Return to Lender: Week of Feb. 20, 2025

A foreclosure auction is scheduled for March 20 on one of Boston’s largest office buildings, One Lincoln St., the Boston Business Journal reported. The tower’s owner, Fortis Property Group, has not recovered from the loss of State Street Corp., the building’s onetime namesake, according to the Business Journal, which also reported that an office property of this magnitude hasn’t come up for a foreclosure auction locally before. Currently it’s assessed at $588 million, but Fortis took out a $1-billion refinancing three years ago.

A South Natomas office building of more than 80,000 square feet will hit the auction block in late March, after falling into receivership, the Sacramento Business Journal reported. Currently about 50% occupied, 2750 Gateway Oaks Dr., also known as Crown Plaza II, will go up for online bids on March 31 with a starting bid of $1.75 million.

Fannie Mae could seize a Miami Beach apartment building over a $2.27-million foreclosure lawsuit, according to the South Florida Business Journal. The government-backed lender filed a foreclosure complaint Feb. 13 against Noble Florida Property LLC over the 5,860-square-foot apartment complex with eight units at 2822 Pine Tree Dr. In addition to seeking a foreclosure on the real estate, Fannie Mae asked the court to appoint a receiver to manage the property.

The Hilton Garden Inn W 54th Street loan ($175.0 million | MSBAM 2015-C22, MSBAM 2015-C23, & MSC 2015-MS1) has transferred to the special servicer ahead of its March 2025 maturity, reported Morningstar Credit. The Midtown Manhattan hotel was previously specially serviced during the pandemic, and while it returned to the master servicer in 2022, performance has continued to lag issuance, largely driven by increased expenses. The total financing also includes a $25-million mezzanine loan.

Duane Morris Plaza at 30 S. 17th St. in Philadelphia ($105.3 million | 12.1% of BANK 2017-BNK9) has moved to special servicing. No reason was given, according to Morningstar Credit, although the namesake tenant’s lease is due to expire in March 2026. Although cash flow was off by about 11% compared to underwriting for the same period, the DSCR remained strong at 2.11x (albeit on an interest-only basis).

Aspen Lake Business Center ($65.0 million | 8.7% of UBSCM 2018-C9) transferred to the special servicer after major tenant Zimmer Biomet vacated in December 2024, pushing the cash flow below breakeven. Morningstar Credit reported that Zimmer Biomet occupied 43% of the GLA in one of the three Austin office properties backing the loan, accounting for 23% of the collective space. Before the departure, the cash flow was already down, with the 2023 net cash flow 18% below issuance. Two smaller tenants have leases expiring in February 2025; the renewal status of both is unknown.

Morningstar Credit reported that the cross-collateralized/cross-defaulted Chicago Business Center and Chicago Marketplace…