DJE Texas Management Group is facing foreclosure after allegedly defaulting on a loan related to an office-to-residential conversion the firm completed last year.
The San Antonio-based multifamily investor defaulted on an $18.25 million mortgage associated with the building, according to Roddy’s Foreclosure Listing Service. UC Lending provided the loan in 2020, the notice said.
If the borrower and lender don’t work out a deal, the property could be auctioned at a foreclosure sale at 10 a.m. May 6 at the Bexar County Courthouse.
The Travis Building, at 405 North Saint Marys Drive, was built in 1920 as an office building. The nearly 250,000-square-foot, 10-story building was converted into 63 apartments and includes 20,000 square feet of office and retail. The Bexar Central Appraisal District valued the property at $12.9 million last year.
The conversion was made possible through the use of historic tax credits. The project also received $5 million in PACE funding, a program that provides capital to commercial real estate projects making energy efficiency improvements. Specifically, the funding helped pay for window replacements, LED lighting and a new roof.
The project was started by California-based Harris Bay before it was passed off to DJE Texas Management Group.
The current owner has previously focused on multifamily investment, and the biography of its owner Devin Elder boasts “No Investor or Lender Capital Lost on Any Transaction Ever.” DJE couldn’t be reached for comment.
The possible foreclosure illustrates what a challenge it is to complete a successful conversion project. It’s not only logistically complicated — with the existing structure needing to meet certain requirements — but it’s also financially challenging, as indicated by the alleged loan default.
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