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San Antonio-based multifamily investor, DJE Texas Management Group, is on the brink of losing control over the Travis Building after allegedly defaulting on a nearly $18 million loan used to convert the historic office space into 63 apartments. The property, located at 405 North Saint Marys Drive, was transformed from its original 1920 office building status through the use of historic tax credits and a $5 million PACE funding injection for energy efficiency upgrades.

    The conversion project, initially spearheaded by California-based Harris Bay before being taken over by DJE Texas Management Group, has proven to be a financially challenging endeavor. The property's value was appraised at $12.9 million last year, raising questions about the viability of office-to-residential conversions in the current market. If no agreement is reached between the borrower and lender, UC Lending, the Travis Building could be auctioned off on May 6 at the Bexar County Courthouse.

    This potential foreclosure serves as a stark reminder of the difficulties involved in successfully executing such conversion projects. Not only do they require navigating complex logistical hurdles, but they also pose significant financial risks, as evidenced by DJE Texas Management Group's alleged loan default. The outcome will be closely watched, particularly given the firm's reputation for multifamily investment and its owner Devin Elder's boast of never having lost investor or lender capital on any transaction.