Five student housing complexes in Denton, owned by Dallas-area firm Jordan Multifamily, are scheduled for a foreclosure auction next month. The properties, which serve students at the University of North Texas, are tied to a $55.5 million loan from Argentic Real Estate Finance that the operator allegedly defaulted on, according to Roddy’s Foreclosure Listing Service.
The affected portfolio includes 405 units across five sites: 911 Bernard Street (79 units), 707 Bernard Street (80 units), 1607 West Live Oak Street (81 units), 1003 Eagle Drive (82 units), and 2424 West Oak Street (83 units). These buildings were constructed between 1962 and 1975. Jordan Multifamily purchased them in 2022.
If no agreement is reached between Jordan Multifamily and Argentic before the sale date, the properties will be auctioned at the Denton County Courthouse on December 2 at 10 a.m.
Jordan Multifamily focuses on renovating older apartment buildings, raising rents, and selling them for profit—a strategy known as “value-add.” However, many operators using this approach have struggled recently. They acquired properties when interest rates were low but now face higher debt costs due to rising rates and increased construction expenses. Meanwhile, new apartment developments in major Texas cities have led to lower rental prices and occupancy levels.
This situation has resulted in significant distress among value-add multifamily owners, who account for much of the commercial real estate debt moving toward foreclosure each month.
Industry experts warn that more challenges may lie ahead. Over the next five years, about $19 billion in commercial mortgage-backed securities loans connected to Texas multifamily assets will come due, said James Shevlin of CWCapital at a recent conference hosted by Connect CRE.
CRE debt headed to auction in Texas has surpassed $580 million in recent months as reported by The Real Deal. Industry professionals also anticipate continued distress within the state’s multifamily sector according to recent expert analysis.
