Wolfe sued for default on loan connected to Fort Worth office building

Lawsuit claims syndicator Kenny Wolfe defaulted on $7.5 bridge loan

Lawsuit Claims Star-Telegram Building Owner Defaulted on Loan — From left: Bluelofts' John Williams and Ike Bams, Wolfe Investments' Kenneth Wolfe, the Star-Telegram building and Brad Sumrok (Facebook, Blueloft, Google Maps, Brad Sumrok)

Jess Hardin

Research by

Suzannah Cavanaugh

Feb 13, 2024, 5:01 PM

Syndicator Kenny Wolfe is in legal hot water with another downtown highrise.

The CEO of Plano-based Wolfe Investments is being sued by New York-based lender TBG Funding, accused of defaulting on a $7.5 million bridge loan. The September 2023 suit also names 307 Star GP LLC and 307 Star Highrise LLC, which are likely connected to the downtown Fort Worth’s Star-Telegram building at 307 West Seventh Street.

Last May, Wolfe partnered with Dallas-based syndicator Bluelofts to purchase the 19-story Star-Telegram building and the adjoining 16-story Oil & Gas building in downtown Fort Worth. The developers are planning multifamily conversions for both properties, with a total of 268 units.

Bluelofts is marketing the Star-Telegram building as “The Star on 7th,” and aiming to pull in small investors on the deal for a minimum contribution of $25,000.

Wolfe is a protegee of multifamily syndication guru Brad Sumrok. The self-described “Apartment King” claims to teach regular people how to “retire in five years by investing in apartments.” In a newsletter, Sumrok describes Wolfe and his wife Teresa as “some of his successful students.”

Sumrok was slapped with a fraud suit last month when a former student accused him of misrepresenting the value of his mentorship program.

The September lawsuit against Wolfe is the first of two accusing him of defaulting on short-term loans.

Another short term lender, Priya Capital CEO Niraj Shah, accused the Wolfes of defaulting on a $6.15 million loan in a December lawsuit. Shah provided the loan for the purchase of 211 North Ervay Street. In the suit, he claims the Wolfes instead used the money to open a line of credit to purchase the Oil & Gas Building.

Now Wolfe is starting to face foreclosures.

Last week, a downtown Dallas building Wolfe bought last year sold for $42 per square foot at a recent foreclosure auction.

An entity tied to Wolfe’s lender scooped up the blue-paneled tower at 211 North Ervay Street for $8 million, according to data from Roddy’s Foreclosure Listing Service. Thistle Creek Partners, a division of Thistle Creek Capital, provided the $13.2 million loan on the property.

Dallas