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Cypress Equity Investments Reviews

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Multifamily: Capital Stack Dilution and Principal Loss

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I invested with Cypress in a class-A apartment development project in Texas, which was a highly active market at the time of the investment. The project experienced construction delays and significant cost overruns. A primary driver of the budget issues was a design deficiency discovered late in the process regarding door widths that did not meet Fair Housing and ADA regulations. Correcting this error resulted in substantial additional costs. Although the sponsor achieved 75% occupancy, the rental cash flow lagged behind projections, and the project ran out of operating capital. Cypress Equity provided regular reports and disclosed these operational issues as they occurred. The sponsor managed to secure rescue capital from a preferred equity investor. However, because this capital sits senior to the common equity in the capital stack, it is likely that common equity limited partners will experience a total loss of principal. I invested in this project for potential capital gains, which will not materialize. Due to the lack of operational oversight regarding the design process and what I consider to be too aggressive underwriting, I would not invest with this sponsor again.

Kurt N.
Kurt N.3/20/2026
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