Lurin Capital, a Dallas-based real estate investment firm, is facing a $40 million loan default lawsuit following the foreclosure of 12 properties in Florida earlier this year. The legal action was brought by Select Securities Europe, a lender based in Luxembourg, which alleges that Lurin defaulted on 15 loans totaling $40.5 million.
According to the complaint filed in U.S. District Court for the Northern District of Texas, Lurin stopped making interest payments on the debt in July 2023. The loans matured in December 2024 and were personally guaranteed by Lurin co-founders Jon and Ashley Venetos. Select Securities Europe is seeking repayment of the full principal, accrued interest, late fees, and attorneys’ fees. As of last month, Lurin reportedly owed $10.7 million in interest.
This latest lawsuit follows previous financial troubles for Lurin Capital. The company also defaulted on $383.6 million in loans from Acore Capital Mortgage, leading to an auction of the 12 foreclosed properties tied to that debt. In addition, another property owned by Lurin—the Estates at Avenstar in Houston—was put up for auction after a default on a $52.5 million mortgage from Nexstar.
Lurin’s business model focuses on acquiring older apartment complexes with plans to renovate them and increase rents before selling for profit. However, this strategy has become more challenging as rising interest rates have increased costs associated with floating-rate debt and repairs.
The issue reflects broader challenges within Texas’ multifamily real estate sector. Operators like Lurin are struggling as they lack sufficient time or resources to wait out high interest rates for more favorable conditions.
Recent data indicates growing distress across Texas commercial real estate markets: over $700 million in commercial real estate loans across the state’s largest counties were marked for foreclosure this month—a significant rise from about $400 million in July (https://therealdeal.com/texas/2024/09/01/700m-in-texas-cre-debt-pegged-for-foreclosure-auction-this-month/). Most affected loans are linked to multifamily properties acquired or financed during 2021 and 2022 when valuations were elevated and borrowing costs lower.
Industry experts caution that these problems may only be beginning; approximately $19 billion in commercial mortgage-backed securities (CMBS) loans tied to Texas multifamily assets are set to mature over the next five years (https://therealdeal.com/texas/2024/08/28/texas-multifamily-distress-just-getting-started/).
