An affiliate of New York-based Fortress Investment Group has taken control of four Northeast Side office buildings after a Bexar County foreclosure auction on Tuesday, using a $14.5 million credit bid when no other bidders showed up. The bundle included the two Alamo Towers buildings on N.E. Loop 410 and two office buildings near the airport known as Onyx at the Airport. The lender's winning bid came in about $6 million below the combined appraised value on county rolls, a sharp reminder that what the taxman says a building is worth and what the market will pay in 2024 are two very different numbers. The outcome is the latest sign of pressure on older Class B office properties in San Antonio.
As reported by the Houston Chronicle, Fortress used a credit bid at the May 5 sale and took title after no competing offers materialized. The Chronicle also reported that Fortress declined to comment on the acquisition and that Windmill Investments, which bought the buildings out of bankruptcy in 2019, did not respond to requests for comment.
What Sold And What It Fetched
The sale covered Alamo Towers at 901 and 909 N.E. Loop 410, totaling about 185,000 square feet, and the Onyx at the Airport buildings at 8626 and 8700 Tesoro Drive, at roughly 230,000 square feet combined, according to the San Antonio Express-News. Appraisal records cited in local coverage put Alamo Towers' assessed value at about $13.8 million and each Onyx building at about $6.6 million, leaving the paper value comfortably above Fortress's $14.5 million credit bid and highlighting just how far pricing can fall when a property lands on the courthouse steps.
Where The Debt Came From
Local reporting indicates the foreclosure followed a default by NE Loop 410 LLC on a roughly $37 million loan issued in 2019 by a company tied to Fortress. Public disclosures show that Fortress Investment Group manages tens of billions of dollars in assets, a scale that helps explain why a lender might opt to credit bid and seize the collateral rather than chase a full cash payoff in a soft office market.
What This Means For Landlords And Buyers
Analysts say outcomes like this are becoming more common when older suburban office buildings face weak leasing demand: the auction can end with the lender holding the keys and then deciding whether to keep, recapitalize, or put the properties back on the market. The San Antonio Express-News reported that it is still unclear whether these buildings will attract third-party buyers at current pricing or effectively revert to the lender, a familiar storyline for Class B office space around the city.
Foreclosure Law In Brief
When a foreclosure sale brings in less than the total debt, Texas law allows lenders in some situations to seek a deficiency judgment for the difference, although courts can consider the property's fair market value on the sale date when deciding how large that shortfall really is. The rules are laid out in Texas Property Code §51.003.
For now, Fortress's affiliate controls what happens next on repairs, leasing strategy, and marketing, and San Antonio's office market will be watching to see whether the firm spends to reposition the towers or tries for a quick sale. Coverage will be updated if the companies involved decide to speak publicly or if a buyer steps up for the properties.
