A legal dispute has stalled the sale of a 358-unit apartment complex in Arlington.
Development firm the Nehemiah Company is facing a lawsuit over the sale of the Truman at Arlington Commons, a 578,400-square-foot residential property located at 505 East Lamar Boulevard, according to a complaint filed in a Fort Worth court Tuesday.
Nehemiah signed a contract to sell the apartment complex on May 27, 2022. The dispute centers on a $5.4 million credit from the Department of Housing and Urban Development. The plaintiff and buyer, a Delaware entity called Truman Property Owner, LLC, claims it is owed the credit for assuming the loan of the property.
The purchase price in the transaction was not disclosed. However, the most recent valuation of the property was $73.6 million, according to PropertyShark.
The purchase agreement for the apartment complex was amended twice, with the last closing date scheduled on June 8.
In its complaint, Truman Property claimed that, under the terms of the deal, it is owed a credit equal to 10 percent of the $54 million outstanding balance on the asset’s HUD loan. The credit should have been applied against the closing price for the property, it claims. On June 7, a day before the most recent closing date, Nehemiah refused to pay the credit. That refusal created a shortfall that left the buyer unable to cover the entire purchase price, according to the suit.
Nehemiah is behind large multifamily projects in the Dallas-Fort Worth area. In March, the company broke ground on Talia, a Mesquite development that will include 2,500 homes on a 600-acre lot located south of Interstate 20. It is also the company that developed the Viridian, a 2,000 acre community in Arlington.
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Truman Property is seeking a court order that would compel Nehemiah to pay the HUD credit. The plaintiff claims it is still “ready, willing and able” to close on the deal. Nehemiah did not respond to a request for comment.