Owner of rat and roach-infested Houston apartments loses 3,000 units in $229M foreclosure
Timber Ridge Apartments resident Beatriz Meraz holds a protest sign during a Houston City Council meeting at City Hall on Tuesday, July 26, 2022.A landlord accused of allowing residents to live in unsafe conditions at an east Houston apartment complex has lost four Houston apartment communities with more than 3,200 units in a foreclosure, underscoring how even owners of large apartment portfolios can fall victim to rising interest rates and inflation.
It’s not clear when cracks in that model started to appear, but residents of one of the properties owned by Applesway Investment Group and sold April 4last year about rats, roaches and mold at the Timber Ridge apartment complex located at 12000 Fleming Drive in northeast Houston. Garbage piled up around dumpsters, green water filled one of the pools and the mailroom had fallen into such disrepair that the Postal Service halted mail delivery, they said.
Carmen Ivonne, of the advocacy group Texas Organizing Project, left, talks to resident Sade Young in an apartment complex in the 1200 block of Redford. The apartments were sold in a foreclosure last week and a new group of owners is set to take over. The owner also lost control of another property, Timber Ridge on the 1200 block of Fleming, which tenants said was pest infested and unsafe last year.
“Floating rate mortgages were very popular in early 2020 to 2021 because they offered the most competitive rates,” said Kai Pan, a Houston-based director of multifamily valuation services with real estate brokerage JLL. But the past year’s rising rates put pressure on landlords' cash flow, Pan said. A record $151.8 billion in U.S. mortgages backed by apartments are expected to expire in 2023, with about $940 billion to expire over five years, the Journal reported, citing Trepp data.
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