- Nitya Capital refinanced The Interlace Apartments in Dallas with Morgan Stanley, preventing foreclosure on the 432-unit property.
- The property had faced foreclosure after an alleged $31.4 million loan default to One William Street Capital Management.
- Nitya still faces foreclosure risk on two other DFW apartment properties, underscoring the uneven path for highly leveraged multifamily owners.
Nitya Capital has bought more time for one of its troubled Dallas apartments, refinancing The Interlace with Morgan Stanley and avoiding a foreclosure that had surfaced earlier this year, according to The Real Deal. The Houston-based multifamily syndicator did not disclose the new loan amount, but the deal resolves the immediate threat facing the 432-unit property.
The refinancing comes as Nitya continues to acquire and sell multifamily assets while working through distress elsewhere in its portfolio.
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A Dallas foreclosure reprieve:
The Interlace, at 3801 Gannon Street, was flagged for foreclosure in May after Nitya allegedly defaulted on a $31.4 million loan secured by the property. One William Street Capital Management held the original debt.
Nitya said the Morgan Stanley refinancing allows the property to avoid foreclosure, giving the owner a new capital structure instead of forcing a sale or lender takeover. The company did not disclose the terms, maturity or proceeds of the new financing.
The details:
The Interlace is a 432-unit apartment complex in Dallas. Its financial history also ties into Texas’ controversial property-tax exemption program for affordable housing.
In 2023, Nitya completed a sale-leaseback involving the property and the Texas Essential Housing Public Facility Corporation, an Austin-based nonprofit. The structure relied on a public facility corporation to obtain a property tax exemption, a strategy that drew scrutiny because some nonprofits operated properties far from their home markets.
Texas lawmakers moved to close that loophole through House Bill 2071 in 2023, effectively targeting so-called “traveling” public facility corporations.
The Interlace refinancing does not eliminate Nitya’s broader DFW exposure. The firm still faces foreclosure on The Palace Apartments in Arlington and The Chaparral Apartments in Fort Worth. One William Street provided loans totaling $38.9 million across those two properties.
Nitya keeps moving:
The Dallas apartments refinancing arrives amid a busy stretch for Nitya. The company recently sold a 1,000-unit Houston portfolio to Triten Real Estate, including 3 Corners West in northwest Houston.
That property, built between 1972 and 1982, suffered a major fire last summer that damaged roughly 100 units, according to KHOU.
At the same time, Nitya has continued buying. In June, the firm acquired Tides on McDowell in Phoenix for $41 million, according to Multifamily & Affordable Housing Business. Nitya said it has added 1,300 apartment units to its portfolio in 2026.
The combination of dispositions, acquisitions and loan restructurings points to a portfolio-level strategy rather than a wholesale retreat from multifamily.
Why it matters:
The Interlace deal illustrates the growing importance of refinancing as a pressure valve for multifamily owners facing loan maturities, defaults and higher financing costs. Rather than immediately taking control of a distressed asset, a lender can preserve the property’s operating business and give the borrower additional runway when a refinance remains viable.
For Nitya, however, the reprieve is property-specific. The firm’s other two DFW properties remain exposed to foreclosure, meaning the underlying balance-sheet pressure has not disappeared.
That distinction matters across the multifamily sector. Owners with enough asset value and lender support may be able to refinance individual properties even while other assets require sales, workouts or enforcement actions.
What’s next:
The key watchpoint is whether Nitya can extend the same strategy to The Palace and The Chaparral. Together, the properties carry $38.9 million in One William Street financing, putting those loans at the center of the firm’s remaining DFW distress.
Investors will also be watching whether Nitya’s continued acquisitions and portfolio sales generate enough liquidity to stabilize its existing holdings. The firm’s 1,300-unit acquisition pace in 2026 suggests it remains active on the buying side even as it works through debt problems elsewhere.
