Another bank has filed a lawsuit against Jon Venetos, the founder of Dallas-based Lurin Capital, seeking to recover money owed after a loan default. Vista Bank claims that Venetos personally guaranteed a $10.3 million loan for the purchase of The Nolan, a 100-unit apartment complex in Fort Worth. According to court filings from November 7 in Dallas County District Court, Vista Bank took control of the property at 6629 South Hulen Street through foreclosure with a $6.7 million credit bid after Lurin defaulted on the loan. The bank alleges that Lurin still owes $3 million, which includes remaining debt, property taxes, interest, foreclosure costs and attorney’s fees.
Vista Bank is not alone in pursuing legal action against Venetos. Acore previously claimed that Venetos personally guaranteed a $394.4 million loan tied to properties in Florida and Texas. In October, Acore filed six lawsuits seeking judgments totaling $80.7 million related to these guaranties and other expenses from defaults.
Venetos is also facing lawsuits from Fannie Mae for allegedly defaulting on a $77.2 million loan connected to a Houston apartment complex and from Select Securities Europe, which claims he defaulted on 15 loans totaling $40.5 million.
The remaining properties in Lurin’s portfolio are experiencing difficulties as well. On October 27, Judge Bryan Gantt granted the city of Plano a temporary restraining order against Lurin and ordered residents of Evana Grove Apartments at 3500 Hillridge Drive to vacate due to unsafe conditions. The court filing states that residents did not have access to water, sewer or gas services despite the property accumulating 1,459 code violations and nearly 100 lawsuits over living conditions.
Jon Venetos and his wife Ashley started Lurin Capital in 2016 with plans to acquire Class B apartment complexes, renovate them, raise rents and sell for profit. Although Lurin’s website lists ownership of 46 properties across five states, some assets have been returned to lenders.
Rising interest rates have made it harder for operators like Lurin Capital by increasing debt service costs on floating-rate loans and raising construction expenses. At the same time, Texas has seen significant new apartment development leading to lower rental rates and occupancy levels.
Industry experts expect more distress among multifamily operators in Texas as approximately $19 billion in commercial mortgage-backed securities (CMBS) loans tied to multifamily properties are set to mature within the next five years.
