Skyloft Austin DST: What NP Skyloft Investors Got Back by 2026

This page is about one trust and what its own record says. For the sponsor's wider history (the 2018 split between Patrick and Brian Nelson, their 40 Form D offerings and the other foreclosed Nelson DSTs), see our Nelson Partners investigation. Everything below comes from documents filed in the Skyloft cases, which the court-appointed administrator posts at skyloftsettlement.com, plus the SEC filings.

What NP Skyloft sold, and to how many people

The trust filed one Form D with the SEC, on March 21, 2019, a month after its first sale, and never amended it. The court's distribution schedule, prepared four years later, shows how the offering ended up:

Two cautions. The Form D does not say whether the $6.7 million for officers and promoters overlaps the commissions, so do not add the two. And the class petition says the interests were sold “In 2019 through February 2020”, so nearly all of the $74.5 million came in after the form was filed.

The capital stack, from the loan prospectus of the UBS 2019-C16 trust that holds the senior mortgage: a $119,550,000 purchase financed with $66,125,000 of mortgage debt and $58,241,118 of borrower equity that included the $35.0 million preferred piece paying 14.0% a year. The prospectus said the preferred investors “may assume control of the borrower under certain conditions”. Our Nelson Partners page has the full table.

How the tower left the trust

The documents line up into a short, dated chain. The claims about control and disclosure are allegations from the investors' petitions; the Axonic parties and the Nelson Parties denied wrongdoing in both settlements.

The heart of the dispute is a clause investors say they never saw. Per the class petition, the joint venture agreement gave the Axonic funds, on default, the right to take control of the venture that controlled the trust's signatory trustee “and to cause the Trust to sell the Trust Property”, and the parties “agreed to keep the JV LLC Agreement and its terms secret, including the default remedies provided to the Axonic Parties”. The PPM, as the petition quotes it, described the worst case of an unpaid preferred investor as a reduction of “cash flow available to operate the [Trust] Property and to pay distributions to the Investors”. Losing the building was a different outcome.

Two dates in the record do not match: the settlement notice puts the jury verdict on May 9, 2022 and the motion for final approval on May 11, 2022. And the December 2024 order gives the address as 527 West 23rd Street, while the PPM and the loan prospectus say 507 West 23rd Street. Neither changes anything for a holder.

The building itself is doing fine. The senior loan went through special servicing in 2021 and 2022, but in the September 2026 servicer report it was current with $36,000,000 outstanding and 86.9% physical occupancy. That money goes to the new owner and its lenders, not to the trust's former investors.

Six cases, two settlements

Investors sued in Texas and California. Everything ended up in two settlements approved by Travis County judges. We cite the cases by number; the investor plaintiffs are private people.

The $50 million plan that paid $9.3 million

On April 19, 2022, days before trial, the investors who had intervened signed a Stipulation and Plan of Liquidation with the Nelson Parties. The plan settled derivative claims in which the investors' petitions accused the Nelson Parties of, among other things, “diverting funds from the Trust for purposes unrelated to Skyloft”, which they denied. Under the plan the Nelson Parties would sell real estate to raise up to $50,000,000: the first $30,000,000 due in January 2023 and the remaining $20,000,000 in October 2023, with an agreed $50,000,000 judgment held in reserve in case they failed to pay. Investors' lawyers would take 20% of what came in, plus expenses.

Only one sale ever funded the plan. Sol y Luna, a Nelson student-housing complex in Arizona, closed on October 24, 2022, at a proposed price the Nelson Parties had described to the administrator as “approximately $203 million”. The Nelson Parties had told the court $18 million would reach the administrator; $9,300,000 did. (In 2023 the Nelson Parties also paid $500,000 under an agreed order, half for investors and half for the administrator's expenses.) On September 26, 2023 the court found them in contempt and listed what had been taken out of the proceeds first:

The same day the court entered the $50 million agreed judgment. In November 2024 the administrator said he did not expect further property sales under the plan, and the judgment, the sanctions award and $250,000 for expenses moved to a new Skyloft Liquidating Trust that is now trying to collect. The administrator's FAQ says the trustee is also suing other parties that received money from the Sol y Luna sale.

The $9 million Axonic settlement

The investors tried their derivative claims against the Axonic parties to a jury. On October 13, 2022 the court said it would enter a judgment of $4,250,000 for the trust and would not undo the sale to TCG Skyloft Owner. The Axonic parties said they would appeal; the judgment was never entered. After a mediation on March 15, 2023 and more than a year of talks, they agreed on August 22, 2024 to pay $9,000,000, about twice the indicated judgment, to settle the trust's claims and every investor's direct claims, including the securities claims filed in California. The class motion called the result “over 10% of the actual loss by Class Members”.

The settlement also dissolved the trust. The court found that the December 2020 sale was a dissolution under the trust agreement, and the trust's leftover cash went to the liquidating trust: of the $2 million the purchaser paid in cash, $734,419.32 was still there, and after expenses $681,106.14 moved over in 2025. Class counsel asked for 30% of that too.

What a $100,000 investor has received

The administrator divides every distribution pro rata on each investor's allowed claim, which is the cash they put in, “without including any interest, profits, bonus, commission, or incentive”, per the administrator's FAQ. His worked example for a $100,000 claim:

Put plainly (our arithmetic): of roughly $74.5 million invested, about $63 million has not come back. The most the holdback can add is $1.75 million after class counsel's 30%, about 2.3% of claims, and only if no covered claim uses it.

Who held the 266 claims

The March 31, 2023 distribution schedule lists every allowed claim by investor ID, without names. Our script over it:

The median claim was $176,943.58 and the mean $283,478.09. Four in five investors with an allowed claim (210 of 263) had $100,000 or more in the trust (our arithmetic); the schedule does not say which of them came in through a 1031 exchange. Two zero-claim lines are marked “Disallowed - sold” and one “Disallowed - NP”.

What the record does not show

• When monthly distributions stopped. Plaintiff-side law firms say payouts were suspended in April 2020. None of the court filings we read gives that date, so we do not report it as fact. The senior loan's servicer data show a late payment in the April 2020 report.
• The December 2020 sale price. The filings name the buyer (TCG Skyloft Owner, LLC) and the $2 million of cash it paid, but not the full price or how much debt it took on.
• The “55% recovery” some law-firm pages still cite. A securities-law firm page says the settlement administrator estimated investors “may receive 55% recovery”. The administrator's own figure, as of June 1, 2025, is 15%, and he describes any further amounts as unknown.
• How much the liquidating trust will collect. The $50 million judgment against the Nelson Parties is reduced by what they paid; whether more can be collected depends on litigation the trustee describes as ongoing. We found no SEC filing by NP Skyloft, DST after March 21, 2019.

Our read

Three things in this record matter beyond Skyloft (our reading, not a finding of any court). First, the loss came from the capital stack, not the building: SkyLoft Austin is 86.9% occupied and its senior loan is current, but a $35 million preferred piece that had to be repaid within about a year sat ahead of the investors, and when it was not repaid its holder could, under a clause investors say was kept from them, take control and sell. Second, the sponsor settlement was only as good as the sponsor's ability to pay: the court found that the Nelson Parties took $16.79 million of commissions, fees and a paydown out of the one sale that funded the plan, which helps explain why a $50 million promise produced $9.3 million. Third, litigation is expensive even when it works: of $18.8 million paid in by the two defendant groups ($9.3 million plus $500,000 from the Nelson Parties and $9.0 million from Axonic, our sum), $4.38 million went to the investors' lawyers in court-approved fees and expenses (our sum of the fee orders), before administration costs and any share of the holdback. That is not a criticism of counsel, who tried the case to a verdict; it is the price of recovering money through a courtroom.

What a Skyloft holder can do now

• Keep your address current with the Liquidating Trustee. Future checks (holdback, judgment collections, any surplus) go to the address on file; the administrator's site asks holders to report changes to the trustee's counsel.
• Check your allowed claim. It is your cash invested per the Nelson Parties' records, without commissions credited or distributions you received. If your number looks wrong, the distribution procedures set a response process; the first one closed on April 14, 2023.
• Look at the person who sold it to you. The December 2024 judgment says released claims do not include claims against “any of the broker-dealers, brokers, or registered representatives involved in the marketing or sale”. FINRA's arbitration rule says no claim is eligible “where six years have elapsed from the occurrence or event giving rise to the claim”, and interests were sold in 2019 and early 2020, so timing is the first question for a securities lawyer, not for us. The Form D names the five firms.
• Talk to your tax preparer about the loss. The court treated the December 2020 sale as the trust's dissolution and the trust was wound up in 2025; how and when your loss is recognized, and what happens to a deferred 1031 gain, depends on your own records (our reading; not tax advice).
• Before your next DST, read the capital stack before the brochure: our DST guide, the DST fee analysis and how to read a PPM show what to look for, and the 1031 exchange rules explain the deadlines that push buyers into whatever DST is available.

FAQ

Sources, read on October 11, 2026: NP Skyloft, DST Form D, CIK 1767237, accession 0001767237-19-000001 (March 21, 2019), its only SEC filing; UBS Commercial Mortgage Trust 2019-C16 prospectus (0001539497-19-000601) and ABS-EE asset data (latest 0001888524-26-017228, September 2026); Travis County district court filings in Cause Nos. D-1-GN-21-000097, D-1-GN-22-001980 and D-1-GN-24-005548 posted at skyloftsettlement.com by the court-appointed administrator: the Notice of Plan of Liquidation with the Stipulation and Plan of Liquidation (May 17, 2022), the Nelson Parties' seventh report (May 10, 2023), the Motion for Show Cause and Contempt (November 14, 2022), the Order Approving Investors' Attorneys' Fees (February 24, 2023), the Administrator's Notice of First Distribution Schedule (March 31, 2023), the Findings and Order Granting the Motion for Contempt and for Sanctions (September 26, 2023), the Notice of Proposed Derivative and Class Action Settlement (August 30, 2024), the Motion for Final Approval with the Supplemental Class Action Petition (November 5, 2024), the Motion for Attorney's Fees (November 5, 2024), the Joint Motion to Approve the Skyloft Liquidating Trust Agreement (November 21, 2024), the Class Action Settlement Approval Order and Final Judgment (December 5, 2024) and the Motion for Attorney's Fees from Additional Funds (April 11, 2025); the administrator's home page, investor updates and FAQ at skyloftsettlement.com (read October 11, 2026); FINRA Rule 12206. Related cases are cited by number: Central District of California Nos. 2:21-cv-01803, 2:21-cv-06443 and 2:22-cv-09400; Orange County Superior Court No. 30-2021-01184473. Statistics of the distribution schedule come from our script over the filed schedule; sums, shares and differences are our arithmetic. Allegations are allegations; the Nelson Parties and the Axonic parties denied wrongdoing. This is analysis of public documents, not investment, legal or tax advice.