The start of 2026 has not brought relief to Texas’ commercial real estate sector, as distressed debt remains high. According to Roddy’s Foreclosure Listing Service, more than $826 million in troubled loans backed by properties in the Texas Triangle are scheduled for auction this month. This is a decrease from December’s $911 million but still significantly higher than previous months, which saw totals near $600 million.
Multifamily properties continue to make up most of the distressed loans. However, hotel-related loans account for 19 percent of the total value flagged for foreclosure this month. Harris County, which includes Houston, leads with 11 loans totaling over $300 million. Dallas County follows closely, with more than $280 million in property-backed loans facing foreclosure.
In Houston, Terra Hospitality faces foreclosure on Heritage Place Houston Brookhollow, a 197-key hotel at 2504 North Loop West. The company reportedly defaulted on a $50.9 million loan from Wells Fargo tied to the property.
In Austin, DB Capital Management could lose Ascent at Northgate, a 112-unit apartment complex at 1830 West Rundberg Lane. The firm allegedly defaulted on a $14.3 million loan provided by ReadyCap Commercial in 2021 and later assigned to Ascendant Capital Partners.
San Antonio’s Broadstone Colonnade Apartments, a 280-unit property built in 2005 and purchased by Quantum Leap Multifamily Group in 2022 with a $40 million loan from CBRE, is also headed for auction. Quantum Leap partnered with Edcouch Community Housing Finance Corporation to obtain property tax breaks through a “traveling” housing finance corporation structure. This involved selling the property to Edcouch and leasing back the ground. Governor Greg Abbott signed legislation closing this loophole after it became widely used among multifamily investors.
Dallas-based Tides Equities may lose Tides at Highland Meadows, a 650-unit apartment complex at 11330 Amanda Lane, after reportedly defaulting on a $76.4 million loan from Mack Real Estate Credit Strategies.
In Fort Worth, AllTrades Industrial Properties could lose a 3.5-acre site at 5001 Golden Triangle Boulevard after purchasing it in 2022 with a $5.8 million loan from Susser Bank.
Twelve properties listed for auction have faced foreclosure multiple times due to ongoing litigation or loan modifications. These include Latitude 2976 in Houston ($77.2 million), Mia Riverside in Austin ($50.2 million), Decorative Center of Houston ($50 million), Verandah Flats in Dallas ($26.5 million), Tesoro at 12 Apartments in Dallas ($24.2 million), Augusta North Houston ($22.7 million), Galleria Oaks Building 2 in Austin ($16 million), Wyndham Garden Austin ($13.4 million), The London in Dallas ($12.9 million), Iconic at The Station in San Antonio ($4.9 million), Soccer Central retail building in San Antonio ($10.5 million), and La Bella Vista Apartments in Houston ($9.2 million).
The article was updated to clarify that Miami-based Terra Hospitality is not the owner of Heritage Place Houston Brookhollow.
