NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of
preliminary ratings to the seven classes of Morgan Stanley Capital I
Trust 2019-BPR, a CMBS single borrower securitization.
The collateral for the transaction is a $310.5 million portion of a
$395.0 million, non-recourse, first lien mortgage loan. The floating
rate loan has an initial two-year term with three, one-year extension
options and requires monthly interest-only payments. The loan is secured
by three super-regional malls located in Virginia, New Mexico, and
Florida. The properties together comprise 3.3 million sf, of which 2.6
million serves as loan collateral. Voluntary property releases are not
permitted per the loan agreement. Highlights for the individual
properties are as follows:
Lynnhaven Mall is a 1.2 million sf super-regional mall located in
Virginia Beach, Virginia, approximately 15 miles east of the Norfolk
CBD. The mall is anchored by JCPenney, Macy’s and Dillard’s. As of
January 2019, the collateral portion of the mall was 96.8% leased by
approximately 130 tenants. The subject’s in-line sales were $489 per
sf ($413 per sf excluding Apple), resulting in an occupancy cost of
14.0%. (16.7% excluding Apple).
Coronado Center is a 1.1 million sf super-regional mall located in
Albuquerque, New Mexico, approximately seven miles east of the city’s
CBD. The mall is anchored by Kohl’s, JCPenney, and Macy’s. As of
January 2019, the collateral portion of the mall was 95.4% leased by
approximately 140 tenants. The subject’s in-line sales were $432 per
sf, resulting in an occupancy cost of 14.0%.
Governor’s Square is a 1.0 million sf super-regional mall located in
Tallahassee, Florida, approximately two miles east of the city’s CBD.
The mall is anchored by Dillard’s, JCPenney, and Macy’s. As of January
2019, the collateral portion of the mall was 70.6% leased by
approximately 100 tenants. The subject’s in-line sales were $360 per
sf, resulting in an occupancy cost of $13.2%.
KBRA’s analysis of the transaction included a detailed evaluation of the
property’s cash flows using our U.S.
CMBS Property Evaluation Methodology and the application of our U.S.
CMBS Single Borrower and Large Loan Rating Methodology. The
results of our analysis yielded a KBRA net cash flow (KNCF) of $52.0
million. To value the portfolio, we applied a capitalization rate of
9.67% to arrive at a KBRA Value of $537.6 million and a KBRA Loan to
Value (KLTV) of 73.5%. In our analysis of the transaction, we also
reviewed and considered third-party engineering, environmental, and
appraisal reports; the results of our site inspections of properties;
and legal documentation.
The preliminary ratings are based on information known to KBRA at the
time of this publication. Information received subsequent to this
release could result in the assignment of final ratings that differ from
the preliminary ratings.
Preliminary Ratings Assigned: Morgan Stanley Capital I Trust
|Class||Expected KBRA Rating||Initial Class Balance (US$)|
1Notional balance. 2Represents the “eligible
vertical residual interest” in satisfaction of US Risk Retention rules.
Related Publications: (available
Stanley Capital I Trust 2019-BPR Pre-Sale Report
CMBS Property Evaluation Methodology
CMBS Single Borrower and Large Loan Rating Methodology
for Rating Interest-Only Certificates in CMBS Transactions
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About KBRA and KBRA Europe
KBRA is a full-service credit rating agency registered with the U.S.
Securities and Exchange Commission as an NRSRO. In addition, KBRA is
designated as a designated rating organization by the Ontario Securities
Commission for issuers of asset-backed securities to file a short form
prospectus or shelf prospectus. KBRA is also recognized by the National
Association of Insurance Commissioners as a Credit Rating Provider, and
is a certified Credit Rating Agency (CRA) by the European Securities and
Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is
registered with ESMA as a CRA.
Kenneth Kor, Associate Director
Michael Brown, Managing Director
Susannah Keagle, Senior Director
James Wang, Senior Director