Troubled Houston real estate investor Rao Polavarapu is facing a lawsuit from Computershare Trust Company, which acts as trustee for Wells Fargo, over a $29 million commercial mortgage-backed securities (CMBS) loan. The suit alleges that Polavarapu’s personal guarantee on the loan makes him responsible for $30.1 million, including unpaid principal, default interest, late fees, yield maintenance premium, and other charges.
The loan is secured by Falls at Westpark, a 352-unit apartment complex located at 6130 Southwest Freeway in Houston. According to court documents filed December 23 in New York Supreme Court, the property was set for foreclosure before Polavarapu filed for Chapter 11 bankruptcy one day prior to the scheduled auction.
Computershare claims that Polavarapu stopped making payments on the loan in July 2025 and failed to maintain insurance coverage on the property. The lender asserts that despite the bankruptcy filing, Polavarapu remains liable due to his personal guarantee.
Polavarapu’s firm, Falls Apartment Group, has reportedly faced ongoing financial difficulties. The company encountered foreclosure proceedings on two other properties: Falls of Las Villas and Falls of Alta Vista in Pasadena, Texas. Both were tied to an alleged default on $33.5 million in debt according to Roddy’s Foreclosure Listing Service. In July 2025, Morningstar Credit reported that two CMBS loans totaling $89.5 million linked to four properties owned by Polavarapu had been transferred to special servicing due to distress.
Lenders are increasingly pursuing legal action against multifamily investors who personally guaranteed loans now in default. Barry Sternlicht’s Starwood Capital and Acres Capital have filed suits against Tides Equities’ Sean Kia and Ryan Andrade over similar guarantees. Jon Venetos of Lurin Capital also faces litigation from Acore Capital Mortgage regarding nearly $400 million in personally guaranteed loans.
A statement from Computershare Trust Company included: “The guarantee Polavarapu signed on the $29 million loan makes him liable for $30.1 million — a sum that includes the unpaid principal balance, default interest, late fees, yield maintenance premium and other fees.”
Polavarapu has not issued a public response regarding the lawsuit or his company’s broader financial challenges.
