Skyloft Austin, a luxury student apartment complex in West Campus, is under fire. Nearly three years after it opened, dozens of lawyers, retirees and others who invested their savings in the building are suing two real estate firms that they say duped them, according to a recent report by the New York Times.

Adelaida Martinez, 82, is retired and lives near the Skyloft. She invested a little over $100,000 in the deal. "I was very naive, as I don't come from the world of finance," she told the Times. "They have not given us any explanation. There is just silence."

The Skyloft investors, who put in between $100,000 and $500,000 apiece, are seeking to recoup much of the $75 million they contributed to the 2019 deal, the Times reported; court filings describe a "Ponzi-like" scheme and accuse Patrick Nelson, of the property management firm that promoted the deal, of using the proceeds to invest in other projects and enrich himself.

In addition to Nelson's California-based property management firm, Nelson Partners Student Housing, the investors are also suing the hedge fund, Axonic Capital, that provided financing and later took control of Skyloft before selling it late last year. Nelson Partners has denied wrongdoing. Axonic said the promoter Patrick Nelson hurt his investors by defaulting on their loan in a statement to the Times.

The investors participated in what is known as a real estate private placement deal, which brokers often pitch to small investors, according to the Times. Such deals are popular because they pay regular dividends and allow investors to defer taxes on property sales, but they lack transparency.