L
enders who took control of a troubled Boston office building from Fortis Property Group are now seeking $83 million in outstanding debt from the developer and its CEO, Joel Kestenbaum. The lenders claim that Fortis defaulted on two loans: a $763 million senior loan from BDT & MSD Partners and a $145 mezzanine loan from DivcoWest. They allege that Fortis stopped making payments on both loans, leading to foreclosure in March.

    The lenders are now suing to collect interest on the debt service payments Fortis failed to pay off at maturity. DivcoWest is seeking $47 million, while BDT & MSD Partners is demanding $36 million. The lawsuits claim that Kestenbaum and Fortis guaranteed the debt, with the lenders stating they wouldn't have extended credit without an "irrevocable" guarantee.

    Fortis has fired back at the lawsuits, calling them a "defensive ploy" to distract from the lenders' own misconduct. The developer has filed its own suit against the lenders, alleging they violated the loan agreement and a "good faith" arrangement over control of the office tower.

    The 36-story One Lincoln Street building was purchased by Fortis in 2006 for $889 million and refinanced in 2022 for $1 billion. However, it struggled to find new tenants after losing anchor tenant State Street, and is now less than half-occupied. The lenders took control of the property with a $400 million bid, highlighting Boston's struggling office market.

    These latest lawsuits add to Fortis' growing list of legal woes, which include disputes over other properties in Boston and Brooklyn.