Fannie Mae has filed a lawsuit against Jon Venetos’ Lurin Capital, alleging the firm defaulted on a $77.2 million loan for Latitude 2976, an apartment complex in Houston. The complaint was filed on November 6 in the District Court for the Southern District of Texas.
The mortgage, originally provided by JLL Real Estate Capital in June 2023 and later assigned to Fannie Mae, carries a fixed interest rate of 5.1 percent and is set to mature in August 2028. According to Fannie Mae, Lurin stopped making payments on the loan in June.
In addition to missed payments, Fannie Mae claims that Lurin failed to maintain the property. The lender states that repairs identified during a March inspection were not completed and that “Lurin left the Property to further deteriorate in ways that present immediate danger to tenants and accelerate waste of Fannie Mae’s collateral.” Issues cited include mold, roof leaks, cracked stairs, and lack of running water for some residents.
More than $749,000 in liens have been filed against Latitude 2976, excluding a $107,529 default judgment awarded to a law firm involved in tenant evictions at the property.
Fannie Mae is requesting that the court appoint a receiver for Latitude 2976, which is a 734-unit complex built in 1976 at 201 and 301 Wilcrest Drive, located south of Buffalo Bayou near Briar Forest.
This lawsuit adds to several legal challenges facing Jon and Ashley Venetos’ “value-add” multifamily operation. In late October, Judge Bryan Gantt issued a temporary restraining order against Lurin concerning Evana Grove Apartments in Plano due to unsafe living conditions. Residents at this property reportedly lacked access to water, sewer or gas services while code violations mounted and nearly 100 lawsuits were filed over property conditions.
Legal troubles escalated earlier this year when lender Acore accused Lurin of defaulting on close to $400 million in loans tied to properties across Florida and Texas. Twelve Florida properties went into foreclosure auction in April. Acore asserts that Venetos personally guaranteed $394.4 million borrowed by Lurin and has sought judgments totaling $80.7 million plus additional expenses through six lawsuits filed in October.
Venetos also faces litigation from Select Securities Europe—a Luxembourg-based lender—which alleges he defaulted on fifteen loans totaling $40.5 million.
Lurin Capital was founded by Jon and Ashley Venetos in 2016 with plans focused on acquiring Class B apartment complexes for renovation and resale at higher rents. According to its website, Lurin owns forty-six properties across five states; however, some listed assets have experienced foreclosure proceedings.
Market conditions have contributed significantly to these financial difficulties as rising interest rates increased debt service costs while construction expenses grew. At the same time, Texas saw an influx of new apartment developments leading both rental rates and occupancy levels downward.
Industry analysts expect continued distress within Texas’ multifamily sector as approximately $19 billion worth of commercial mortgage-backed securities (CMBS) loans tied to apartments are set to mature over the next five years.
