Distressed multifamily investor S2 Capital offloads properties as it seeks $130 million for a new fund after wiping out investor equity.
S2 Capital sold two Dallas-Fort Worth apartment complexes this summer, marking its third multifamily disposition in North Texas this year. The sales follow a July announcement that investor equity in its value-add fund and REIT was wiped out, adding pressure to its financial restructuring efforts.
The firm sold the 266-unit Ellington in Plano, purchased in April 2022 with a $67.7 million loan, to Red Summit Partners. It also disposed of the 223-unit Brixton Apartments. Both transactions reflect S2’s broader strategy to stabilize its portfolio amid legal and financial challenges.
S2 is now raising up to $130 million for a continuation vehicle to retain 26 assets, a plan facing scrutiny over leverage and potential conflicts of interest. The firm’s founder, Scott Everett, has faced mounting legal pressure as the portfolio struggles.