Computershare Sues Houston Investor, Invoking Guarantee

Troubled Houston investor Rao Polavarapu filed for bankruptcy in November, but that won’t save him from the debt he owes on a commercial mortgage-backed securities loan he personally guaranteed, according to a new lawsuit.

Computershare Trust Company, acting as trustee for loan originator Wells Fargo, claims the guarantee Polavarapu signed on the $29 million loan makes him liable for $30.1 million — a sum that includes the unpaid principal balance, default interest, late fees, yield maintenance premium and other fees.

The loan is backed by Falls at Westpark, a 352-unit apartment complex at 6130 Southwest Freeway in Houston. It was flagged for foreclosure in the fall. Polavarapu filed for Chapter 11 bankruptcy the day before the property was scheduled to be sold at a foreclosure auction, Computershare claims in the suit filed Dec. 23 in New York Supreme Court.

Polavarapu stopped making payments on the loan in July 2025 and failed to maintain the property’s insurance coverage, Computershare claims in the filing.

Polavarapu’s firm, Falls Apartment Group, has been struggling with distress in its portfolio for more than a year.

The firm faced foreclosure on the 468-unit Falls of Las Villas, at 407 South Richey Street in Pasadena, Texas, and the 514-unit Falls of Alta Vista, at 621 Richey Street in Pasadena, Texas, after appearing to default on $33.5 million in debt tied to the properties, according to Roddy’s Foreclosure Listing Service. In July, two CMBS loans totaling $89.5 million backed by four Polavarapu-owned properties headed to special servicing, Morningstar Credit reported.

It’s become increasingly common for lenders to sue underwater multifamily investors for the money owed on loans they took out for deals they went bust.Barry Sternlicht’s Starwood Capital and Acres Capital are pursuing Tides Equities’ Sean Kia and Ryan Andrade for guarantees. In addition, Jon Venetos of Lurin Capital is being hunted down by Acore Capital Mortgage for nearly $400 million in loans it says he personally guaranteed.