Fitch: Imminent Default for $146.5M COPT Office Portfolio Loan

800 International Dr in Linthicum, MD

The $146.5 million COPT Office Portfolio loan has been transferred to a special servicer due to “imminent default,” according to Fitch.

The loan is secured by first mortgages encumbering 14 office properties in Linthicum, MD and Colorado Springs, CO totaling 1.019 million square feet. The properties were appraised for $183.35 million at the time the loan was secured.

The COPT Office Portfolio Loan was originated on December 28, 2006 by Goldman Sachs Commercial Mortgage Capital, L.P. and was subsequently purchased by Goldman Sachs Mortgage Company. The scheduled maturity date was set for December 2016. The interest rate is 5.43 percent.

All payments on the loan are current, according to Trepp.

Servicer notes on the asset from March 2013 say reduced occupancy at the properties are responsible for a lowered debt service coverage ratio. Occupancy was 89 percent at the end of 2010 but has since fallen to 77 percent. The interest only loan was underwritten when occupancy was at 93 percent.

Examples include the largest tenant at 999 Corporate Drive in Linthicum, Alpha Natural Resources, which reduced its leased space from 47,618 square feet to 13,011 square feet in early 2011. At 800 International Drive in Linthicum, Raytheon renewed for 33,666 square feet in the second quarter of 2011, down from 57,352 square feet.

“The property has failed the DSCR covenant that triggers a Cash Management Period,” say the notes, which were provided by Trepp. “The Master Servicer has established the lockbox and is currently sweeping excess cash to a lender held reserve account. Wells has inquired about the upcoming lease rolls in the next 6 months.”

Nine of the office properties are in Linthicum, MD and total approximately 618,541 square feet. They are all within a ten mile radius of the BWI Airport.

Linthicum, MD Property, Loan Amount and Year Built:

  • 96,636 SF Airport Square 20; $18,578,000 (1988)
  • 67,455 SF Airport Square 15: $13,533,000 (2000)
  • 71,076 SF Airport Square 19: $12,012,000 (1983)
  • 73,572 SF Airport Square 10: $11,812,000 (1986)
  • 68,802 SF Airport Square 21: $11,692,000 (1988)
  • 69,072 SF Airport Square 14: $11,291,000 (1987)
  • 57,409 SF Airport Tech 1: $8,488,000 (1986)
  • 57,379 SF Airport Tech 4: $8,408,000 (1988)
  • 57,140 SF Airport Tech 2: $8,008,000 (1986)

Five of the properties are located in Colorado Springs, CO and total 400,441 square feet.

  • 108,976 SF 5725 Mark Dabling Blvd: $12,882,000 (1984)
  • 109,678 SF 5775 Mark Dabling Blvd: $12,477,000 (1985)
  • 105,895 SF 5755 Mark Dabling Blvd: $10,208,000 (1989)
  • 37,946 SF 1925 Aero Tech: $3,717,000 (1985)
  • 37,946 SF 1915 Aero Tech: $3,394,000 (1985)