KBRA Downgrades All Ratings for JPMCC 2021-BOLT

KBRA downgrades all outstanding ratings for JPMCC 2021-BOLT, a CMBS single-borrower transaction. The outstanding ratings are simultaneously removed from Watch Downgrade (DN) where they were placed on May 21, 2024. The ratings actions follow a surveillance review of the transaction and are driven by the collateral’s continued decline in financial performance, weaker demand for office space, and the potential for interest shortfalls to reach higher in the capital structure as the special servicer works to resolve the loan. The loan was transferred to the special servicer in June 2024 ahead of its maturity default in August 2024.

The transaction collateral is a non-recourse, first lien mortgage loan secured by the borrower’s fee simple interest in Aspiria, formerly known as the Sprint Corporate Headquarters; a 20-building suburban office park containing 3,721,308 sf and situated on 190.4 acres in Overland Park, Kansas. The floating rate loan has an outstanding balance of $232.5 million ($62 per sf) as of July 2024. The loan, which had an initial maturity date of August 2023, was modified, resulting in a maturity date extension to August 2024 and an adjustment in payment terms which has resulted in ongoing interest shortfalls to classes C and D and the VRR interest. The loan failed to payoff by the modified maturity date, but remains current in payment based on the previously modified debt service.

The review utilized information obtained from the trustee and servicer to analyze the loan collateral. Due to the decline in occupancy following the space reduction by T-Mobile, KBRA performed a stabilized analysis to derive KNCF and KBRA Value. The analysis assumed a stabilized vacancy rate of 69.2%, in line with KBRA’s estimate at last review. The analysis produced a stabilized KNCF of $11.5 million, down 5.4% from last review and 13.4% from KNCF at closing ($13.2 million). The resulting in-trust KLTV is 238.7%, compared to 205.5% at last review and 139.7% at securitization. KBRA’s valuation takes into account the disposition value of the asset, deterioration in the office sector and weakening demand, coupled with a challenging commercial real estate financing landscape for the property type. In addition, KBRA maintains the loan’s K-LOC designation and KPO of Underperform due to the loan’s current status with the special servicer and the decline in collateral occupancy and performance since closing.

Details concerning the classes with rating changes are as follows:

Class A to A (sf) from AAA (sf) DN

Class B to CCC (sf) from BB- (sf) DN

Class C to CC (sf) from CCC (sf) DN

Class X to A (sf) from AAA (sf) DN

To access rating and relevant documents, click here.

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