TROUBLE IN TEXAS: Huge Multifamily Owner Nears Collapse

Apartment Giant MBS Cos. Goes Deep in Arrears on More Than $600 Million in LoansMBS Cos., one of the largest multifamily property owners in the country, is delinquent, in default or in danger of becoming so, on more than $900 million in loans. For Michael B. Smuck (the MBS in the company name), that means he is in danger of seeing his apartment empire dissipate for the second time in his nearly 30-year real estate career. Based in the New Orleans area, MBS Cos. owns and operates more than 65 apartment complexes totaling about 17,000 units - all in Texas. Smuck's debt problems have been the subject of whispered conversations among financial firms and analysts for the past month as the extent of the company's financial problems slowly came to light. Those same financial analysts fear if MBS defaults, it could spell losses for many and affect property recovery operations, potentially for years to come. It will also generate a huge spike up in CMBS delinquencies, expected to be reported this week or next. (Editor's Note: For a complete list of MBS properties, the CMBS they are associated with, and notes on their individual loan status see Watch List

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