The $700 million CMBS loan Nitya Capital secured last month appears to have stoked an ongoing feud between the syndicator’s co-founders.
A recent filing shows Swapnil Agarwal and Vivek Shah, who met and became friends in high school, used arbitration to resolve an unexplained dispute; Shah claims Agarwal is violating the agreement they reached.
Shah is asking the U.S. District Court for the North District of Texas to confirm the “final award” of the arbitration and order Agarwal to comply with its terms.
The final award gave Shah 40 percent ownership of Nitya Capital, his 27 percent ownership of KPM Property Management and KPM Global, and his 33.33 percent ownership of office building 8901 Gaylord, according to the filing. It also confirmed Shah’s veto power over major business decisions and rights as an “equal governing partner,” including that he’s entitled to review Nitya’s records.
They started arbitration in October 2023, with the final arbitration hearing taking place this past April. The final award was issued in June.
Shah requested information about ongoing business transactions, including the $700 million refinancing deal Nitya Capital landed in early June, according to the filing. Agarwal failed to provide the information, Shah wrote in the filing.
Agarwal didn’t respond to a request for comment.
The refi deal covered 18 multifamily and student housing properties in Texas, Tennessee, Arizona, Nevada, North Carolina and South Carolina, Law360 first reported. Citibank originated the fixed-rate loan.
It came at the perfect time for Nitya, which has been inundated with lawsuits and past-due debts.
The syndicator was unable to pay off a $356 million CMBS loan when it matured last year. The loan tied to 2,700 multifamily units was sent to special servicing. Several months later, Nitya was hit with a lawsuit from the City of Mesquite over the condition of Tradewind Apartments, a 308-unit property at 2136 Tradewind Drive. The property racked up 750 complaints between 2023 and 2024, including extended air conditioning outages during the summers, the Dallas Morning News reported.
Nitya and multifamily syndicators like Tides Equities picked up scores of “value-add” apartment complexes when interest rates were low with plans to update them and raise rents. Rising interest rates and sinking valuations upended plans, putting many of these firms in a debt crunch.
These underwater investors were dealt another blow by the Texas multifamily market, which has weathered a historic glut of supply over the last few years. Record deliveries have dampened rent rates and forced operators to offer concessions at their properties.
Read more
Embattled Houston syndicator lassoes $700M CMBS life raft
Syndicator Nitya Capital fails to pay off $356M loan at maturity
City of Mesquite sues Nitya Capital affiliate over apartment conditions
