Owner of student housing complex near Sac State files for bankruptcy
Teetering on the edge of a foreclosure, the owner of a student housing complex located about a mile away from Sacramento State filed for bankruptcy in April.
Now, the owner Brian Nelson hopes the bankruptcy case — which was first reported by the Sacramento Business Journal — will allow him to reorganize his company’s finances, bring in additional investors and improve the 288-unit apartment complex known as The Element.
“We will hopefully put some money into the property and focus on improving the tenant experience,” Nelson said. “Because there have been issues in the recent past, we’re just going to try to overcompensate and do what we can to earn their trust and ensure they have this home away from home while they’re going to school.”
There are groups who have expressed interest in investing in the property, he said. However, if all doesn’t go according to his plan, the property will have to be sold. In either case, Nelson said he was sure the outcome would not compromise tenant experience. That remains to be seen.
At present, The Element — located at 6730 4th Ave. — houses approximately 290 people at an occupancy rate of 40%, according to the ownership. The majority of those tenants are Sacramento State students. Occupancy rates are low even as the school’s enrollment rates are at a record high.
Technically open to anyone, the complex is marketed towards students. On its website, the apartment complex bills itself as an “all-inclusive community where Sac State students live.” While it is not officially affiliated to the university, it appears on a list of off-campus housing options curated by the school for its international students.
A university representative said Sacramento State did not have any comment on the situation.
What happened to The Element?
In 2017, Nelson bought the property through a since-dissolved company that he founded with his brother. The acquisition was funded through $38 million from more than 150 small investors and a $53 million loan from the Federal National Mortgage Association, commonly known as Fannie Mae.
In 2022, two of Nelson’s partners in his new company Versity Investments usurped control of the company’s assets and ousted him, he said. This led to a complicated legal battle that returned control of the company to him last year, per his court filings.
By then, however, the company had defaulted on payments to Fannie Mae several times. In August 2025, Fannie Mae filed a complaint against the company, NB Element, in the Sacramento Superior Court. In its complaint, the association said NB Element had not only defaulted on loan payments but also allowed the property to “fall into disrepair, threatening the health and well-being of the tenants.”
The court appointed a receiver to take control of the property and The Element was set for a foreclosure auction. After a few extensions, the auction was scheduled for April 9. At that point, Nelson filed for Chapter 11 bankruptcy to avoid the sale of the property.
Now, the case is set for a status conference June 24. At that time, Nelson will have to inform the bankruptcy court of his reorganization plans.
Most of the properties connected to Nelson’s company across the country are student housing. Per news reports, The Element is not the only one facing trouble.
