KBRA Downgrades Five Ratings and Affirms All Other Outstanding Ratings for Benchmark 2018-B2
7 Feb 2025 | New York
KBRA downgrades the ratings of five classes of certificates and affirms all other outstanding ratings of Benchmark 2018-B2, a $1.1 billion CMBS conduit transaction. The rating actions follow a surveillance review of the transaction, which has an increase in KBRA’s estimated losses for 10 K-LOCs (29.4% of the pool balance) and the resulting loss adjusted C/E levels. The rating actions also consider the transaction deleveraging from loan payoffs, amortization and defeasance.
As of the January 2025 remittance period, there are six specially serviced assets (19.4%), of which one (7.1%) is REO, one (2.0%) is in foreclosure, and two (5.5%) are delinquent. KBRA identified 14 K-LOCs (40.7%), including the specially serviced assets. This includes:
Five of the top 10 loans (25.0%):
- Central Park of Lisle (largest, 7.1% of the pool balance, 41.4% estimated loss severity)
- Rochester Hotel Portfolio (4th largest, 4.9%, 21.5%)
- InterContinental San Francisco (6th largest, 4.7%, 3.8%)
- Worldwide Plaza (7th largest, 4.5%)
- Braddock Metro Center (9th largest, 3.8%, 19.4%)
Six (8.9%) other K-LOCs have estimated losses:
- 90 Hudson (2.7%, 29.6%)
- Gateway Plaza (2.0%, 15.9%)
- Village Green of Waterford (2.0%, 3.0%)
- 220 Northwest 8th Avenue (1.6%, 74.2%)
- WAG Lawrenceville (0.3%, 1.5%)
- Rite Aid Johnstown (0.2%, 27.1%)
The remaining three K-LOCs represent 6.8% of the pool balance.
Excluding the K-LOCs with estimated losses, the transaction's WA KLTV is 93.8%, compared to 99.5% at last review and 96.4% at securitization. The KDSC is 1.72x, compared to 1.86x at last review and 2.14x at securitization.
Details concerning the classes with rating changes are as follows:
- Class D to BBB (sf) from BBB+ (sf)
- Class E-RR to BB- (sf) from BBB- (sf)
- Class F-RR to B- (sf) from BB (sf)
- Class G-RR to CCC (sf) from B (sf)
- Class X-D to BBB (sf) from BBB+ (sf)
To access ratings and relevant documents, click here.
Click here to view the report.