Distress at Scott Everett\u2019s S2 Capital is behind one-third of the value of commercial real estate loans flagged for foreclosure in Texas this month.\u00a0<\/p>\n
After projecting an equity wipeout for its multifamily real estate investment trust in May, the firm will likely hand keys back to five North Texas apartment properties at Tuesday\u2019s auctions. The apartments are tied to $311 million in troubled loans from Computershare Trust, Benefit Street Partners, Citibank and U.S. Bank Trust.\u00a0\u00a0<\/p>\n
The foreclosures are likely to ramp up for S2, which told investors on July 1 that it\u2019s dissolving its $400 million first fund<\/a> with \u201cno returns of capital.\u201d\u00a0<\/p>\n Loans flagged for foreclosure in July dipped to $913 million, after surging past $1 billion in May<\/a> and June<\/a>, according to Roddy\u2019s Foreclosure Listing Service. Of the 39 loans flagged for auctions, 11 are tied to properties in Dallas County. Harris County (home to Houston) and Bexar County (home to San Antonio) each have 7 CRE loans flagged for foreclosure.\u00a0<\/p>\n Here are the biggest loans up for auction. It\u2019s possible that some of these borrowers and lenders will reach agreements to avoid auction.<\/p>\n Houston<\/p>\n Rao Polavarapu\u2019s Falls Apartment Group is facing foreclosure on Miami Gardens Apartments, a 441-unit property at 9540 Kempwood Drive. Falls borrowed $64.5 million from Computershare Trust for the property in 2024. The debt works out to $146,000 per unit. It\u2019s the latest in a slew of foreclosures for the firm, which has been struggling with distress for over a year. Since the firm filed for bankruptcy<\/a> in November, Lynd Management Group has taken over troubled properties<\/a> in Falls\u2019 multifamily portfolio.\u00a0<\/p>\n Austin<\/p>\n A $6.5 million loan backed by a 55-bed rehabilitation center at 3509 Rogge Lane is the biggest new loan in Travis County to be flagged for July\u2019s foreclosure auction. The owner is Apollo Healthcare, which is based in Houston. The lender is Enclave Equities, which is based in Purchase, New York.\u00a0\u00a0<\/p>\n San Antonio<\/p>\n Blue Sky Bank provided the $11.5 million loan for the 46,000-square-foot office property at 12672 Silicon Drive in San Antonio. It\u2019s one of the properties owned by San Antonio physician and investor Dr. Sanjay Misra that\u2019s facing foreclosure this month. Misra could also lose control of The Vogue Building in Downtown San Antonio, two other office buildings, a retail strip and a 91-room Comfort Suites hotel, the San Antonio Express-News reported<\/a>.\u00a0<\/p>\n Dallas\u00a0<\/p>\n