KBRA Downgrades Three Ratings and Affirms All Other Ratings for LSTAR 2017-5

KBRA downgrades the ratings of three classes of certificates and affirms all other outstanding ratings for LSTAR 2017-5, a $505.5 million CRE multi-borrower transaction. The rating actions follow a surveillance review of the transaction, which has exhibited an increase in estimated losses since KBRA’s last ratings adjustments in March 2024, stemming primarily from the largest loan in the pool, Charlotte Plaza (13.9% of the pool). The transaction, however, has deleveraged since issuance, particularly at the top of the capital structure, due to loan payoffs and amortization.

As of the March 2025 remittance period, there are two specially serviced assets (16.2%). KBRA identified four K-LOCs (21.9%), including the specially serviced assets. The K-LOCs include one top 10 loan:

The three remaining K-LOCs (8.0%) also have estimated losses:

Excluding K-LOCs with estimated losses, the transaction’s WA KLTV is 106.4%, compared to 113.5% KBRA’s last ratings changes at its prior review and 108.4% at securitization. The KDSC is 1.39x, compared to 1.23x at last review and 1.52x at securitization.

Details concerning the classes with rating changes are as follows:

To access ratings and relevant documents, click here.

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