Nitya Capital Sells Texas Apartments for $100M Amid Rate Woes

Nitya Capital has sold four multifamily properties in Dallas, Austin and San Antonio, raking in more than $100 million amid a debt crunch from rising rates.

The Houston-based firm has now offloaded more than half of its holdings.

Nitya sold five Houston multifamily properties consisting of more than 1,500 units, for a total of $150 million in May 2022. It also exited other Houston properties, including Bayou Park Apartments, Quail Creek Apartments and Quail Creek II Apartments.

With a portfolio consisting of 20,000 units, Nitya has established a notable presence in multifamily. Its strategy has been to acquire mid-range properties in areas designated “high-growth” across the nation, especially in the Sun Belt, with newer properties in Florida and Tennessee added to the portfolio last year.

However, in March the firm was considering the sale of 40 percent of its multifamily portfolio due, in part, to the impact of interest-rate hikes, Market Watch reported. These hikes have resulted in increased expenses for managing the firm’s floating-rate debt. Since its establishment in 2013, Nitya has amassed 129 properties. With these most recent Texas transactions, it has exited 73 of those, according to a news release, representing approximately 57 percent of its overall portfolio.

In a letter to investors, Nitya Capital CEO Swapnil Agarwal said there were challenges with declining property values and a $2 billion senior debt associated with 60 properties, according to a report from Real Estate Alert. The annual interest payments on this debt have increased by $60 million since it was acquired in 2021, according to Market Watch.

The four properties recently sold, which total 826 units, are Candlelight Park Apartments in Duncanville, Park at Crestview in North Austin, and two complexes in San Antonio’s South Texas Medical Center: Terrain at Medical Center and Latitude Apartments.

New York-based investment firm Lone Star Capital bought Candlelight Park. Nord Group, a Jersey City-based acquisition company, bought the latter three. Nitya had acquired the quartet within the last four years and underwent a series of renovations to increase their valuations.