- Over $400M in distressed multifamily properties are headed for auction in Dallas, Houston, and San Antonio, including high-profile defaults by syndicators like S2 Capital and Tides Equities.
- Houston leads all Texas metros in potential foreclosure activity, with $260M in debt tied to 13 properties.
- Beyond multifamily distress, WS Development acquired a Dallas office tower for $63.4M, while Kroger is shutting down a McKinney store amid national cutbacks.
Multifamily Stress Builds
Texas is facing another surge in multifamily distress, reports The Real Deal. A new round of foreclosures—totaling more than $400M—is set to hit the auction block across major metros next week.
Dallas-based S2 Capital defaulted on a $36M CBRE loan for the 290-unit Preslee Apartments in Arlington. Built in 1981, the loan breaks down to roughly $124K per unit.
Over in North Dallas, Tides Equities is facing foreclosure on two apartment communities:
- Tides on Esperanza, 370 units (built in 1982)
- Tides at North Dallas, 232 units (built in 1981)
Together, Tides defaulted on $73.3M in loans, or about $122K per unit.
In San Antonio, a $30M CBRE loan tied to the 288-unit Barcelo Apartment Homes is also in foreclosure. The property is located at 3501 Pin Oak Drive and was financed in 2023 by ATX Capital.
The Houston metro, particularly Harris County, has emerged as the epicenter of pending distress, with 13 properties and $260M in debt heading toward possible foreclosure—though some may be resolved before auction.
Additional signs of trouble include a $110M CMBS loan for two Austin apartment complexes, now flagged for special servicing.
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More Texas Real Estate Headlines
Dallas Office Acquisition:
Boston-based WS Development acquired the Galleria North Tower I in Far North Dallas for $63.4M. The 16-story, 395K SF office tower is 65% leased, with the price working out to $160 PSF.
Kroger Closure in McKinney:
Kroger is shuttering its store at 1707 W. University Drive in McKinney, part of a larger plan to close around 60 stores nationwide following the collapse of its Albertsons merger. Despite the closure, Kroger continues investing in the region, competing with expanding chains like H-E-B and Walmart.
Austin High-Rise Proposal:
Endeavor Real Estate Group is planning a 510-foot mixed-use tower on the Cidercade site at 600 East Riverside Drive in Austin. The project proposes 200 residential units and 8K SF of retail, contributing to the transformation of the South Central Waterfront near Lady Bird Lake.
Why It Matters
Texas remains a focal point for both opportunity and risk in commercial real estate. As interest rate pressures and syndicator struggles push more multifamily assets toward foreclosure, investors and lenders alike are adjusting to a more cautious, post-boom landscape.
What’s Next
Expect continued scrutiny on highly leveraged multifamily portfolios, particularly those acquired during the low-rate era. Meanwhile, investor interest in key urban corridors and mixed-use development remains strong, though tempered by capital market realities.
