KBRA Affirms All Ratings for LIFE 2022-BMR2
15 May 2024 | New York
KBRA affirms all of its outstanding ratings for LIFE 2022-BMR2, a $2.88 billion CMBS single-borrower transaction. The affirmations follow a surveillance review of the transaction, which has exhibited a slight worsening in credit metrics in part due to a decline in occupancy since securitization. However, the magnitude of the change in KBRA value and KLTV does not warrant rating changes at this time.
The transaction collateral is a non-recourse, first lien, floating-rate mortgage loan with an initial two-year term and three one-year extension options. The loan requires interest-only payments based on one-month SOFR plus an initial spread of 1.95%. The borrower has entered into an interest rate cap agreement with a strike rate of 5.50% for the initial loan term. The initial loan term expired on May 9, 2024. According to the master servicer, the borrower has provided notice of its intent to exercise the first one-year extension option.
The loan is secured by the borrowers’ fee simple, leasehold, or leased fee interests in 24 assets, including 18 properties with a mix of laboratory and office uses (86.6%), four office properties (11.3%), one land parcel (1.8%), and one multifamily development (0.3%). The assets are primarily leased by life sciences tenants that utilize their space for office and/or laboratory use. The portfolio properties collectively encompass over 5.1 million sf. Occupancy has dropped to 81.0% from 94.0% at securitization.
KBRA analyzed the cash flow for the properties utilizing information from the trustee and servicer to determine KNCF. The analysis produced a KNCF of $205.3 million and a KBRA value of $2.75 billion ($539 per sf). The resulting KLTV is 104.4%, compared to 101.4% at last review and 101.2% at securitization. KBRA maintains a KPO of Perform on the loan.
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