Loan for Fortis Property in Austin Heads to Special Servicing

A northwest Austin office comoplex owned by Fortis Property Group is in trouble after the exit of a major tenant.

A $65 million CMBS loan backed by Aspen Lake Business Center was sent to special servicing after biomedical company Zimmer Biomet left in December, Morningstar Credit reported.

The tenant was leasing 43 percent of the 205,000-square-foot Aspen Lake One, one of three adjacent buildings that back the loan. The company’s lease accounted for 23 percent of the complex.

The exit pushed the property’s cashflow below breakeven, Morningstar said.

The Brooklyn-based landlord bought the portfolio in 2014. It includes the Aspen Lake One at 13785 Research Boulevard; 174,000-square-foot Tower of the Hills at 13809 Research Boulevard; and 178,000-square-foot Tower Point at 13805 Tower Point.

The portfolio’s taxable value was set at $69 million last year, appraisal district records show.

The property is across RM 620 from Lakeline Mall in Far Northwest Austin, about 17 miles from downtown. The submarket’s office space has fared better than the city overall with a vacancy rate of 18.5 percent at the end of the fourth quarter, according to Colliers.

The report pegged the city’s overall office vacancy at 22.5 percent, an increase from 21.2 percent a year before.

Fortis is mostly known for its projects in New York and Boston, and its track record is mixed.

The firm scratched out a win with the development of Olympia Dumbo, which is on the way to becoming Brooklyn’s most expensive address.

But, it’s also the developer behind One Seaport in Manhattan, which has been infamously stalled for years by construction disasters, including the death of a construction worker in 2017.