KBRA Assigns Ratings to RFR 2025-SGRM

KBRA announces the assignment of ratings to seven classes of RFR 2025-SGRM, a CMBS single-borrower securitization. The collateral for the transaction is a $1.2 billion fixed rate, interest-only mortgage loan. The fixed rate loan has a four-year term and requires monthly interest-only payments based on an assumed interest rate of 6.25%. The loan is secured by the borrower’s fee simple interest in 375 Park Avenue, which is commonly known as the Seagram Building, a 38-story, Class-A office tower containing 859,934 sf. The building is located along Park Avenue between East 52^nd and 53^rd Streets in the Midtown neighborhood of New York City’s borough of Manhattan. The property was built in 1958 and subsequently received landmark status in 1976. As of January 2025, the property was 96.3% leased to approximately 40 tenants. The five largest tenants by base rent consist of Blue Owl (31.0% of base rent), TIAA of America (9.8%), Centerbridge Partners (5.5%), Advent International (5.0%), and Arbor Realty Trust (4.8%). Together, these top five tenants account for 56.1% of base rent and 50.4% of sf.

KBRA’s analysis of the transaction included a detailed evaluation of the property’s cash flows using our North American CMBS Property Evaluation Methodology and the application of our North American CMBS Single Borrower & Large Loan Rating Methodology. In addition, KBRA also relied on its Global Structured Finance Counterparty Methodology for assessing counterparty risk in this transaction, its Methodology for Rating Interest-Only Certificates in CMBS Transactions, and its ESG Global Rating Methodology, to the extent deemed applicable.

The results of our analysis yielded a KBRA net cash flow (KNCF) for the subject of approximately $81.2 million, which is 13.5% below the issuer’s NCF, and a KBRA value of approximately $1.137 billion, which is 38.7% below the appraiser’s as-is value. The resulting in-trust KBRA Loan to Value (KLTV) is 105.6%. In our analysis of the transaction, we also reviewed and considered third party engineering, environmental, and appraisal reports, the results of our site inspection of the property, and legal documentation review.

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Methodologies