CRE Foreclosures Climb In Texas As Multifamily Market Unravels

Mounting Pressure In Texas Multifamily

Texas’s commercial real estate market is under increasing financial stress, reports The Real Deal. More than $710M in loans tied to distressed properties are scheduled for foreclosure auctions this month. That figure marks a steady monthly increase. It was up from $670M in August and $400M in July, according to Roddy’s Foreclosure Listing Service.

Multifamily properties make up the majority of foreclosures, especially those with loans issued in 2022 and 2023, when borrowing costs were still relatively low. Now, amid a high-rate environment, many borrowers are struggling to refinance or meet debt obligations.

Market Snapshot: Largest Foreclosures This Month

Houston

• Estates at Avenstar: $52.5M mortgage tied to a 592-unit complex (built in 1974) owned by Lurin. Lender: NexBank.
  
• Repeat properties include assets from Fercan Kalkan’s portfolio, such as:
  
  • Selena Apartments ($37.9M)
    
  • Veranda Village ($31.6M)
    
  • Villa Nueva Apartments ($28.6M)
    
  • The Pointe Apartments ($27.6M)
    

San Antonio

• Aviator at Brooks: Casoro Group faces foreclosure on this 280-unit asset, built in 2016. Loan: $33.9M from Acres Capital.
  

Dallas

• One Dallas Center: Pacific Elm Properties defaulted on a $34.5M securitized loan. The firm owns the lower portion of the 30-story mixed-use tower, converted in 2014.
  

Fort Worth

• Apex Apartments: A 152-unit complex backed by a $12.8M loan from CoreVest. Owned by a joint venture involving CalTier, Bakerson, and Camino Verde Group.

Repeat Foreclosure Cases Rising

Several properties across the state are facing repeat foreclosure notices, signaling prolonged distress:

• In Houston, seven of the ten properties scheduled for auction have previously received foreclosure notices but were not sold.
  
• In Bexar County, both The Joseph at Huebner and Poet’s Walk assisted living facility are repeat listings, with combined debt over $79M.
  
• In Travis County, a retail strip at 13376 North US Highway 183 is also returning to the auction block with $16M in debt.

Why It Matters

The ongoing wave of multifamily foreclosures in Texas underscores the market vulnerability created by low-rate-era borrowing combined with today’s higher interest rate environment. Developers and operators who bought or refinanced in 2022–2023 are now grappling with debt maturities, falling values, and refinancing challenges.

What’s Next

If the trend continues, more institutional lenders and private equity groups may move to snap up distressed assets at auction. Meanwhile, negotiations between borrowers and lenders could still head off some sales at the last minute — but the foreclosure pipeline shows no signs of slowing.

Expect multifamily distress to remain a dominant theme in Texas CRE through the end of 2025.