KBRA Affirms All Ratings for 245 Park Avenue Trust 2017-245P
14 Jun 2024 | New York
KBRA affirms all outstanding ratings of 245 Park Avenue Trust 2017-245P, a CMBS SASB transaction. The affirmations follow a surveillance review of the transaction, which has exhibited an improvement in performance since KBRA’s last review, primarily as a result of recent leasing. However, the magnitude of the change in KBRA value and KLTV does not warrant ratings adjustments at this time. In addition, the ratings affirmations also reflect the strong quality of the asset and the experience of the loan’s current sponsor, SL Green Realty Corp. (SL Green).
The transaction collateral is secured by a $500.0 million portion of a $1.2 billion whole loan. The $500.0 million ($290 per sf) trust collateral consists of five pari passu A notes totaling $380.0 million and five subordinate B notes totaling $120.0 million. The remaining portion of the whole mortgage loan, which is not trust collateral, consists of 14 pari passu A notes totaling $700.0 million. The whole loan is collateralized by the borrower’s fee simple interests in a 44-story, 1.7 million square foot, Class-A, office tower located in the Grand Central submarket of New York City, New York.
KBRA analyzed the cash flow for the property utilizing information from the trustee and servicer to determine KNCF. As the property has had additional leasing and is currently closer to market occupancy levels, KBRA is no longer performing a stabilized analysis to derive property value and KLTV. The analysis produced a KNCF of $92.4 million and a KBRA value of $1.3 billion ($766 per sf). The resulting in-trust KLTV is 90.9%, in line with the 89.2% stabilized KLTV at KBRA’s last review and up from 79.6% at securitization. Due to the asset’s improved performance since last review, KBRA has removed the loan’s K-LOC designation. However, due to its decline in performance since securitization, deterioration in the office sector amid weakening demand, and upcoming lease rollover, KBRA maintains the loan’s KPO of Underperform.
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