SEC Probes GVA and Alan Stalcup Amid Fraud Claims

Federal regulators are circling an Austin-based real estate operator already under siege from investors.

The Securities and Exchange Commission is investigating Alan Stalcup, founder and CEO of GVA Real Estate Group, following a wave of lawsuits alleging he misappropriated as much as $100 million from investors. The Austin American-Statesman reported that the probe adds a new layer of risk for the multifamily debt syndicator.

The existence of the SEC investigation surfaced after Jackson Walker, a law firm representing a family suing Stalcup for fraud, disclosed it had been served with an SEC subpoena in October seeking documents tied to the case. According to the outlet, a Texas judge later ordered the records turned over to law enforcement.

While the SEC does not publicly confirm investigations, an attorney for Jackson Walker wrote in a court filing that “based on the SEC subpoena, it appears the SEC is investigating Mr. Stalcup for securities fraud.”

Stalcup previously told the publication that he welcomed an SEC investigation into what he described as “defamatory fictions” in the lawsuits.

Founded in 2015, GVA operates as a property manager and debt syndicator, pooling investor capital to acquire underperforming apartment complexes. Many of those investment vehicles are registered with the SEC as securities.

Court filings say Stalcup and GVA own or operate roughly 150 apartment properties, primarily in Texas, Tennessee and Kentucky. According to his firm’s website, it has acquired 43,000 units across nine states and closed $10 billion in transactions since its founding.

Legal trouble accelerated last year as rising interest rates strained floating-rate debt and exposed cracks in GVA’s capital stack. In June, Barry Sternlicht’s Starwood Capital sued Stalcup, accusing him of mismanaging three properties and allowing liens to pile up in violation of loan guarantees. In February, Benefit Street Partners filed suit in New York, alleging Stalcup misappropriated insurance proceeds, commingled tenant funds and engaged in other misconduct.

Across more than half a dozen lawsuits, investors claim Stalcup blurred the lines between properties and treated company accounts like a “personal piggy bank.” One complaint filed by attorneys for investor Brian Kastleman alleges more than $38 million was spent on personal expenses, including private jet travel, yacht charters and luxury vehicles. Other suits accuse GVA of inflating rental income and falsifying financials to mask deteriorating performance.

One filing alleges that in 2023 alone, GVA overstated rental income across its portfolio by more than $20.6 million. Another accuses Stalcup of improperly moving $650,000 between accounts tied to different properties he controlled, according to the publication.

Stalcup has pushed back, filing several counterclaims, including one that accuses Kastleman of trying to tank GVA’s reputation to claw back capital.

— Eric Weilbacher