Thirty-three commercial properties across Texas are headed toward the courthouse steps this month, and apartment complexes make up more than 70 percent of the value on the auction block. Loans flagged for foreclosure statewide total $778 million in September, a slight pullback from August's peak but still part of a distress wave that has gripped the state's multifamily sector for the better part of a year.
The figures come from The Real Deal, which tracks monthly foreclosure listings compiled by Roddy's. According to that data, loans flagged for foreclosure in August exceeded $1 billion, and within the Texas Triangle region specifically, multifamily loans flagged for foreclosure total $562 million this month. Sixteen of the properties on the September list have already been flagged for auction multiple times, a sign that some borrowers and lenders continue negotiating to avoid a courthouse sale even after a listing goes public.
Bexar County Leads the State Again
Bexar County, home to San Antonio, has the most commercial foreclosures among the counties tracked this month, with 10 properties flagged for auction. The county recorded $180 million in distressed loans scheduled for foreclosure back in December 2025, underscoring its persistent role in the state's ongoing commercial property troubles.
Among the San Antonio properties heading to auction is Highland Ridge Apartments, a 734-unit complex at 1700 Jackson Keller Road built in 1985. The loan on Highland Ridge works out to roughly $82,000 per unit. River Rock Capital, based in Lawrence, New York, allegedly defaulted on a $60.5 million Arbor Realty Trust loan and risks losing control of the property. Also on the San Antonio list is Boston Woods Apartments, a 174-unit complex at 800 Gentleman Road carrying a $16.9 million loan.
S2 Capital's Troubles Deepen
No name looms larger over this month's list than S2 Capital, the Dallas-based syndicator already reeling from a string of setbacks. S2 is facing foreclosure on Richmond Apartments, the 531-unit Dallas property at 19251 Preston Road, after Capital One provided an $85.2 million loan that went unpaid. Capital One has sued S2 Capital founder Scott Everett, who allegedly owes $11 million in personal guaranties tied to the default.
S2 also allegedly defaulted on an $84.3 million Citibank loan for Weston Medical Center Apartments, a 792-unit Houston complex at 7510 Brompton Road built in 1973. That loan works out to about $106,000 per unit. The pile-up follows S2's broader collapse this year: founder Scott Everett told investors in July that the firm was winding down its $400 million inaugural value-add fund with zero return of capital after operating expenses climbed 16 percent, interest costs rose 50 percent, and rents dropped 24 percent across its portfolio, according to CRE Daily. S2 had also created a private non-traded REIT in early 2024 by pooling roughly 9,000 to 10,000 apartment units to secure a credit facility and wait out elevated rates, but that vehicle began winding down in May after a $70 million capital call yielded only $30 million, per CREsponsor, whose reporting noted feeder fund Trinity Investors advised investors to expect a full loss of capital.
Other Troubled Operators on the List
S2 isn't alone among the syndicators named on this month's roster of troubled operators. GVA and Lurin Capital both appear on the list as well. GVA, the Austin-based firm, saw its managed portfolio collapse from more than 30,000 apartment units nationwide down to roughly 5,000 units by March, as the rapid Federal Reserve rate hikes of 2022 and 2023 escalated debt service costs on floating-rate acquisition loans, according to Multifamily Dive.
Other multifamily properties flagged for September auctions include Summit Hyde Park Apartments in Austin, a 192-unit complex at 5200 North Lamar Boulevard owned by DB Capital Management and built in 1984, with a loan that works out to $152,000 per unit. Also on the list: Estrella at Kiest Apartments, a 232-unit Dallas complex with a $25.6 million loan; the Loren Apartments, a 250-unit Dallas property carrying a $27.5 million loan; Rise Heather Ridge, a 252-unit Arlington complex with a $28.1 million loan; and Woods of Ridgmar West Apartments, a 117-unit Fort Worth property with a $22.1 million loan.
A Pattern Playing Out Statewide
Texas commercial real estate loans flagged for monthly foreclosure auctions exceeded $800 million for four consecutive months between December 2025 and March 2026, with apartment complexes consistently comprising roughly 70 percent of all distressed assets, per CRE Daily's earlier reporting. The pattern has repeated itself in cases beyond this month's list. Houston-based Nitya Capital agreed in June to pay lender One William Street Capital Management $1 million upfront, plus up to $4 million in monthly extensions, just to forestall foreclosure auctions on three North Texas apartment complexes totaling 847 units — a deal Hoodline covered in June.
Not every distressed borrower waits for the courthouse steps. Jon Venetos' Lurin Capital filed for Chapter 11 bankruptcy protection in March for the 734-unit Latitude 2976 apartments in Houston, automatically halting a scheduled foreclosure auction over a defaulted $77.2 million Fannie Mae loan, after Fannie Mae had sued the firm in November 2025 alleging default. Under Section 51.002 of the Texas Property Code, non-judicial foreclosure auctions must be held on the first Tuesday of each month between 10 a.m. and 4 p.m. at designated county courthouses following a mandatory 21-day public notice — and Texas offers no post-sale statutory right of redemption for mortgage foreclosures, per FindLaw.
Non-apartment properties are also on this month's list, though they represent a smaller share of the total. They include the Embassy Suites, a 217-key San Antonio hotel with a $43.5 million loan; the Comfort Suites Alamo/River Walk, an 89-key San Antonio hotel with a $9.2 million loan; and Hampton Manor, a Fort Worth assisted living facility carrying a $17 million loan. Texas multifamily distress is showing no signs of a slowdown, with the state's monthly foreclosure listings continuing to hover in the hundreds of millions of dollars as syndicators, lenders, and courts work through the fallout of the rate-tightening cycle.
