KBRA Assigns Preliminary Ratings to BBCMS 2026-5C43
6 Oct 2026 | New York
KBRA is pleased to announce the assignment of preliminary ratings to 13 classes of BBCMS 2026-5C43, a $989.5 million CMBS conduit transaction collateralized by 43 commercial mortgage loans secured by 98 properties. The collateral properties are located throughout 26 MSAs, of which the three largest are New York (10.7% of pool balance), San Jose (9.9%), and Austin (9.6%). The pool’s three largest property type exposures are retail (22.5%), industrial (19.5%), and lodging (17.0%). The largest loan in the pool, The Assembly (9.9%), is a 491,458 sf industrial and R&D property located in San Jose, California, approximately eight miles northwest of the city’s CBD. The five largest loans, which also include Clackamas Town Center (9.8%), 111 Congress (8.1%), Hilton Beachfront Resort & Spa Hilton Head Island (5.6%), and GBP Industrial Portfolio (5.1%), represent 38.3% of the initial pool balance, while the top 10 loans represent 55.8%.
KBRA’s analysis of the transaction incorporated our multi-borrower rating process that begins with our analysts’ evaluation of the underlying collateral properties’ financial and operating performance, which determines KBRA’s estimate of sustainable net cash flow (KNCF) and KBRA value using our North American CMBS Property Evaluation Methodology. On a weighted average basis, the pool’s KNCF was 12.9% less than the issuer’s cash flow. KBRA capitalization rates were applied to each asset’s KNCF to derive values that were 37.1% less than third party appraisal values. The pool has an in-trust KLTV of 95.5% and an all-in KLTV of 95.6%. The process also deploys rent and occupancy stresses, probability of default regressions, and loss given default calculations to determine losses for each loan which, in conjunction with pool concentration and other relevant factors, are used to assign our credit ratings.
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