UPDATED 8/10/24 3:50pm
Foreclosures are on the rise in Texas, and some of the eager investors who swept through the state a few years ago are now in trouble.
At the latest monthly auction, a 122-unit Duncanville rental townhome complex returned to lender Fannie Mae. Owner PC Wexford LLC defaulted on a $34.7 million Fannie Mae loan that Lument (formerly known as ORIX Real Estate Capital) originated in 2022.
The lender regained control of Wexford Townhomes at 600 Wembley Circle with a $23.6 million credit bid, which equates to $193,000 per unit, at a Dallas County foreclosure auction on Aug. 6, according to Roddy’s Foreclosure Listing Service.
Utah-based multifamily investor Peak Capital bought the property in 2016, deed records show. Peak Capital says it sold the property when it transferred its membership interest in the ownership entity to Accurate Equity Management in 2022. Accurate Equity Management shares the same address as Wyoming-based ABC Consulting.
The complex was built in 1985 and offers one- and two-bedroom units.
Duncanville is about 10 miles southwest of downtown Dallas. The property is off of Highway 67 with easy access to Interstate 20, which connects to Arlington and Fort Worth.
Commercial foreclosures started spiking in Texas over the last year when debt service ballooned for investors who purchased property with floating-rate loans, causing some to default. Commercial foreclosures in the state surged 129 percent in March compared to the previous year and 31 percent from the month prior.
The data makes it look like Texas’ commercial real estate market is experiencing disproportionate distress, but the numbers reflect the high number of multifamily trades that took place in the Lone Star State when interest rates were low, said Jay Parsons, head of investment strategy and research for Madera Residential.
ORIX is a lender based in New York.
This story was updated to reflect that Peak Capital sold Wexford Townhomes in 2022 to Accurate Equity Management.
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