Normandy Real Estate Partners ran into trouble with its South Boston holdings recently, and there are signs of distress in two other pools of the company’s Boston-area properties.

Taken together, Normandy’s struggles show the extent to which acquisitions from the commercial property boom continue to haunt commercial real estate investors, even as those companies hunt for opportunities in a distressed market.

To be sure, Normandy isn’t the only high-profile landlord in Boston trying to manage its legacy acquisitions while simultaneously hunting for bargain buys. Griffith Properties is reportedly close to losing its Burlington headquarters, but it’s also in the market for new purchases. Berkeley Investments, the firm looking to displace Griffith in Burlington, received foreclosure threats after the mortgage on its large Fort Point office portfolio matured.

But neither of those peer companies had as high a profile success story as Normandy’s play on Boston’s John Hancock Tower, either.

Normandy gained fame a year ago when it swiped the Hancock out from under Broadway Partners. Normandy won the tower by scooping up its debt, then using that debt to foreclose Broadway out of the building.

Normandy targeted an owner that had paid too much during the commercial boom. It exploited debt, falling property values and faltering building performance.

The forces that dropped the Hancock into Normandy’s lap aren’t unique. They afflict many owners who used leverage to overpay for properties in 2006 and 2007 – including Normandy itself.

The company is near default on a pair of South Boston office buildings it bought at the market’s peak. A large suburban office portfolio appears severely over-leveraged, and has been on a loan servicer’s watch list since 2008. A second suburban portfolio, purchased in 2006, was refinanced in 2008 for $40 million more than Normandy paid for the buildings; they’re now likely worth far less than their debt.

Lofty Leverage

Before New Jersey-based Normandy owned New England’s most iconic office tower, the company was known for gobbling up office space outside of the urban core. It sunk $73 million into a pair of converted warehouses in Boston’s Fort Point neighborhood. The firm also scooped up hundreds of millions of dollars worth of properties in the suburbs.

The Fort Point deal was the first to falter. Earlier this month, ratings agency Fitch Ratings said the securitized mortgage on 281 and 321 Summer St. had been transferred to special servicing – the last stop before a loan modification, or a foreclosure.

The properties’ 257,000 square feet of office space were 95 percent full when Normandy bought them in 2007. At the end of 2009, the buildings were only 54 percent full, according to the debt-tracking agency Trepp. On top of that, falling rents are pressuring the income assumptions used to justify the buildings’ price tag. Class B office rents in South Boston have fallen by 23 percent since the beginning of 2009, according to data from Jones Lang LaSalle.

Normandy financed the buildings’ $73 million purchase with a $51 million mortgage from UBS. UBS then packaged the mortgage into a pool of commercial debt and sold it to Wall Street investors. Normandy also took out a $15.2 million mezzanine loan to help finance the property, making the deal more than 90 percent leveraged.

The loan has extensions that run through May 2012.

Normandy has a second commercial mortgage-backed securities (CMBS) deal standing on shaky ground: A 10-property, 1.4 million-square-foot portfolio of suburban properties it bought for $215 million.

At the end of 2006, Morgan Stanley bought out office REIT Glenborough Realty Trust for $1.9 billion. In a move that anticipated the Blackstone Group’s breakup of Equity Office Properties, Morgan Stanley then flipped Glenborough’s East Coast assets to Normandy for $215 million.

Local properties in the 10-property Glenborough portfolio include the 570,000-square-foot Marlborough Technology Park and the 165,000-square-foot Westford Corporate Center, as well as smaller assets in Westborough, Marlborough and Lexington.

Lehman Bros. provided Normandy with a $97.4 million first mortgage, also eventually put into a CMBS pool and sold to investors, as well as a $12.5 million junior mortgage and $66.1 million in mezzanine debt. The total debt load of $176 million made the deal more than 80 percent leveraged.

Impaired Equity

According to Trepp, the loan has been on a servicer’s watch list since October, 2008. Trepp data shows the properties were 90 percent leased at the time Lehman’s loan was securitized, but are now only 70 percent full. Roughly half the portfolio’s leases expired within the first two years of securitization.

Occupancy declines and falling property values have likely combined to wipe out Normandy’s equity in the properties. The question now is whether Normandy can service the portfolio’s sizable debt load. A portfolio stress test run by Fitch at the time of securitization modeled an economic downturn. That test had the portfolio falling short on its debt service load by 20 cents on every dollar. A recent Fitch report found that 2007-era CMBS products accounted for 44 percent of all CMBS delinquencies, “reflecting the frothy underwriting practices of the vintage.”

Occupancy is healthier at a third suburban portfolio of Normandy properties in Newton, Quincy, Dedham, Lexington and Peabody, but the firm’s equity position looks to be just as impaired, thanks to value declines and market timing.

Normandy bought those properties for $162 million in 2006, with debt from GE Capital, Lehman Bros. and Capmark Bank. Normandy then rode exploding property values to a massive 2008 debt restructuring, retiring $129 million in acquisition loans and replacing that debt with a $200 million mortgage from GE Capital.

Justin Krebs, who heads Normandy’s Boston office, did not return several calls for comment.