Apartment owner facing financial troubles

A major owner of Texas apartment properties is delinquent on more than $600 million in loans on properties across the state, including five in Austin, according to a report from The CoStar Group.

Metairie, La.-based MBS Cos. owns and operates at least 65 apartment complexes in Texas accounting for roughly 17,000 units. In Austin alone, MBS is in arrears on $136.1 million in loans on five properties totaling 1,1415 units. They include: Walnut Creek, Village of Sage Creek, Lodge at Stone Oak Ranch, Villas of Bristol Heights and Northcastle, the CoStar analysis shows.

A receptionist at the company's headquarters said there was no one available to take calls from the media and a message left was not immediately returned.

The CoStar report indicates that while PNC Financial Services Group originated nearly all of MBS's loans, most of those loans were in turn offloaded into commercial mortgage backed securities and sold in the public markets. The report cites financial analysts who say if MBS defaults, it could mean losses for hundreds, if not thousands, of individual investors.

MBS is reportedly looking for buyers for a number of its delinquent properties from Houston to San Antonio.

In Austin, the company was preparing to sell the 170-unit Northcastle property at 8100 N. MoPac Expressway to Trammell Crow Residential earlier this year. Trammell Crow filed a request with the city of Austin in August to change the zoning from MF-2 to MF-6, the highest allowable density classification. But when the loan on the property was posted for a November 6 foreclosure, Trammell Crow Residential backed out of the deal and withdrew its zoning request. According to CoStar, the MBS borrowing entity in that case filed for Chapter 11 protection shortly before the foreclosure date.

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source: bizjournals.com