Fannie Mae has taken legal steps to assume control of Del Sol Apartments, a 152-unit complex in Texas City, after the property’s owners allegedly defaulted on their loan. The lender filed a request with the U.S. District Court for the Southern District of Texas on January 26, seeking the appointment of a receiver.
The apartment complex at 3501 25th Avenue North is owned by entities connected to Shlomo Sorotzkin of Lakewood, New Jersey, and Elliot Menchel of Baltimore. According to court documents, Arbor Realty Trust provided an $11.5 million loan for the property in July 2023.
Problems began following a fire at Del Sol Apartments in 2024 that displaced around twelve residents and damaged at least sixteen units. Fannie Mae stated that this incident led to disagreements between the owners and lender regarding loan payments and repairs.
The foreclosure process started when Fannie Mae issued a notice in March after alleging that the owners had defaulted on their obligations. Sorotzkin and Menchel responded by filing suit to prevent a scheduled sale in May. The dispute was later settled in Galveston County District Court, where both parties agreed to have a receiver appointed.
Judge Jeffrey V. Brown formalized this arrangement by appointing Jacqueline Elizabeth Kimaz from Southlake as receiver on January 27. She will now oversee management of the property.
Experts have noted that multifamily real estate distress is increasing across Texas as investors who bought properties during periods of low interest rates face challenges refinancing or maintaining ownership amid rising debt maturities. In particular, about $19 billion in commercial mortgage-backed securities linked to Texas multifamily properties are set to mature this year, contributing to more foreclosures and receiverships statewide.
“Loan trouble began for Del Sol’s owners after a 2024 fire at the property displaced a dozen residents and damaged at least 16 units at the complex. The incident also sparked a dispute between owner and lender over loan payments and property repairs,” Fannie Mae said in its suit.
“The parties settled the dispute in Galveston County District Court, and the investors agreed to have a receiver appointed,” Fannie Mae alleges in its suit.
