Another Wave of Multifamily Distress Rolls Across Texas

28 June 2025

The multifamily distress that first hit the Sun Belt with rising interest rates a couple of years ago is still coming in waves in Texas.

More than $400 million in commercial real estate foreclosures are headed to auction from Dallas to San Antonio to Houston next week, including properties owned by multifamily syndicators.

Dallas-based S2 Capital appears to have defaulted on a $36 million mortgage provided by CBRE for Preslee Apartments, at 2504 Ivy Brook Court in Arlington. The 290-unit apartment complex was built in 1981, and the loan works out to $124,000 per unit.

Meanwhile, Los Angeles-based Tides Equities is facing foreclosure on the 370-unit Tides on Esperanza, at 13450 Esperanza Road, and the 232-unit Tides at North Dallas, at 13250 Emily Road. Tides on Esperanza was built in 1982, and Tides at North Dallas was built in 1981.

Tides defaulted on loans totaling $73.3 million for the two properties, which works out to $122,00 per unit.

In San Antonio, a $30 multifamily loan is scheduled for foreclosure. The loan, which CBRE lent ATX Capital in 2023, is for the Barcelo Apartment Homes, a 288-unit property, at 3501 Pin Oak Drive.

Houston’s Harris County had the most action pointing to the possibilities of foreclosure auctions than any other Texas metro, with 13 properties and $260 million in debt. It’s possible that the lenders and borrowers in any of these cases could work out solutions before they hit the auction block.

Multifamily distress also cropped up in other ways. A $110 million CMBS loan backed by two Austin apartment complexes was flagged for special servicing.

Here’s what else happened in Texas real estate this week.

WS Development recently acquired the 16-story Galleria North Tower I in Far North Dallas for $63.4 million, highlighting continued investor interest in the Dallas North Tollway corridor despite high vacancy rates. The 395,000-square-foot building is about 65 percent leased, and the price worked out to $160 per square foot.
Kroger is closing a store at 1707 West University Drive in McKinney as part of a nationwide shutdown of about 60 locations following the collapse of its merger with Albertsons. The grocer is still investing in developments across North Texas, where competitors like H-E-B and Walmart are also expanding amid rapid regional growth.
Endeavor Real Estate Group proposed a 510-foot mixed-use tower on the Cidercade site, at 600 East Riverside Drive near downtown Austin, aiming to add 200 residential units and 8,000 square feet of retail to the South Central Waterfront district. The project adds to a wave of high-rise proposals reshaping the south shore of Lady Bird Lake, though timing is uncertain amid development constraints and cooling real estate markets.

—Rachel Stone