Arbor forecloses on $229M portfolio
Arbor Realty Trust has foreclosed on a quartet of low-income multifamily properties in Houston valued at $229 million.
The portfolio includes Heights at Post Oak, Redford Apartments, Reserve at Westwood and Timber Ridge Apartments, all of which were purchased by Jay Gajavelli’s Applesway Investment between August 2021 and April 2022.
Located within the city’s Outer Loop, the properties house a combined 3,200 apartment units. Arbor lent Applesway an estimated $69 million for the Redford, $66 million for Reserve at Westwood, $48 million for Heights at Post Oak and $47 million for Timber Ridge, according to the Harris County Clerk’s Office.
Arbor initiated the foreclosure on March 13 after Applesway defaulted on its mortgage payments. The properties went to auction on April 4, but no bids were made, according to sources familiar with the foreclosure. Arbor initiated a credit bid, in which the lender can use the outstanding debt owed on a property as collateral for their bid at a foreclosure auction, for each property. That allows the lender to bid without bringing cash to the table.
The credit bid placed by Arbor was $25 million cheaper than the principal amounts, totaling about $204 million for the four properties, according to ForecloseHouston.com. The lender won the bid and took over all four properties, with Heights at Post Oak being the most expensive at a final bid of $60 million.