- Electra Capital has filed two new lawsuits against Tides Equities co-founders Sean Kia and Ryan Andrade, seeking $40M over alleged breaches of personal guarantees tied to distressed Las Vegas properties.
- The suits follow a $27M judgment awarded to Starwood, and add to a growing number of legal actions from lenders and investors trying to recover funds from Tides’ troubled portfolio.
- Electra, a preferred equity investor, alleges Tides failed to complete renovations, allowed liens and unpaid invoices to pile up, and defaulted on $95M in debt across two multifamily projects.
- The lawsuits underscore the rising risks and fallout in the multifamily sector, particularly in Sun Belt markets, as rising interest rates and operational failures expose once-aggressive syndicators.
Legal Storm Intensifies
The founders of multifamily investment firm Tides Equities are under growing legal pressure, as reported by The Real Deal. This week, Tampa-based Electra Capital filed two lawsuits totaling $40M against Sean Kia and Ryan Andrade, citing breached guarantees tied to failed preferred equity investments in two Las Vegas properties: Tides at Whitney Ranch and Tides on Valley View.
These filings follow a recent $27M judgment awarded to Starwood Capital and add to a mounting wave of litigation. Court records indicate the pair could now be personally liable for over $120M, not including legal fees.
From Preferred Equity To Preferred Headaches
Electra originally invested $11M as a preferred equity partner in the two Las Vegas projects, expecting a minimum 12% return. Instead, it alleges mismanagement, deteriorating property conditions, and defaults that left the firm cleaning up a financial and physical mess.
According to the suits, Tides failed to deliver on multiple fronts: completing promised renovations, maintaining the buildings, and managing payables. With unpaid bills and liens stacking up, Electra stepped in during 2023 to remove Tides as manager, eventually buying them out of the deals.
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Sun Belt Slowdown Complicates Recovery
Electra Capital has since tried to stabilize the assets by repairing buildings, settling invoices, and bringing loans current. While a rebound in Sun Belt multifamily valuations could offer some upside, timing remains uncertain. Property records show Tides purchased Tides on Valley View for $50M in 2022 — nearly double what the previous owner paid just 15 months earlier, a signal of potentially overextended acquisitions.
Why It Matters
The Tides lawsuits highlight growing fallout among high-leverage multifamily syndicators who acquired aggressively during the low-rate boom. As borrowing costs soared and operational challenges mounted, investors and lenders have turned litigious — pursuing personal guarantees in a bid to recoup losses.
What’s Next
More legal action appears likely as other lenders and partners move to safeguard their investments. For Tides’ founders, personal financial exposure continues to escalate — and could reshape the landscape for syndicators relying on recourse financing in an unforgiving market cycle.
