Fannie Mae has filed a lawsuit against Lurin Capital, led by Jon Venetos, alleging default on a $77.2 million loan for the Latitude 2976 apartment complex in Houston. The complaint was submitted to the District Court for the Southern District of Texas on November 6.
The mortgage was originally provided by JLL Real Estate Capital in June 2023 and later assigned to Fannie Mae. According to the lawsuit, the fixed-rate loan at 5.1 percent is scheduled to mature in August 2028. Fannie Mae claims that Lurin stopped making payments as of June.
In addition to missed payments, Fannie Mae accuses Lurin of neglecting property maintenance and failing to address repairs identified during a March inspection. The lender alleges that Lurin “left the Property to further deteriorate in ways that present immediate danger to tenants and accelerate waste of Fannie Mae’s collateral.” Reported issues include mold, roof leaks, cracked stairs, and lack of running water for some residents.
Liens totaling more than $749,000 have been filed against Latitude 2976, not including 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 consists of 734 units built in 1976 at 201 and 301 Wilcrest Drive near Briar Forest in Houston.
This case is one among several legal challenges facing Jon and Ashley Venetos’ multifamily real estate business model focused on acquiring and renovating Class B apartment complexes. Judge Bryan Gantt recently granted Plano officials a temporary restraining order against Lurin related to Evana Grove Apartments due to unsafe living conditions; residents were ordered to vacate after lacking access to water, sewer or gas amid numerous code violations and lawsuits over property conditions.
Lurin Capital’s financial troubles began escalating earlier this year when Acore alleged defaults on nearly $400 million worth of loans tied to properties across Florida and Texas. Twelve Florida properties are headed toward foreclosure auction following these claims.
Acore asserts that Jon Venetos personally guaranteed $394.4 million borrowed by his company. In October alone, Acore filed six lawsuits seeking judgments totaling $80.7 million plus other costs related to defaults.
Venetos also faces litigation from Select Securities Europe—a Luxembourg-based lender—over alleged defaults on loans amounting to $40.5 million.
Lurin Capital’s website states it owns 46 properties across five states; however, some listed assets have faced foreclosure proceedings.
Market analysts expect continued distress within Texas’ multifamily sector as about $19 billion in commercial mortgage-backed securities (CMBS) loans linked with multifamily properties are set for maturity over the next five years (https://therealdeal.com/texas/2024/03/12/texas-multifamily-distress-looms-as-cmbs-loans-come-due/). This comes amid higher interest rates increasing debt service costs and rising construction expenses while new apartment supply has driven down rental rates and occupancy levels across Texas markets.
