KBRA Affirms Ratings for All Classes of MSBAM 2012-CKSV

KBRA affirms its outstanding ratings for MSBAM 2012-CKSV, a CMBS large loan transaction. The affirmations follow a surveillance review of the transaction, which has exhibited improved performance since KBRA’s last ratings change in September 2022. However, the magnitude of the change in KBRA value and KLTV does not warrant a rating change at this time.

The transaction collateral consists of two non-recourse, first lien mortgage loans secured by the fee simple interests in 641,823 sf of Clackamas Town Center (“Clackamas”), a 1.4 million sf super-regional mall located in Happy Valley, Oregon and 1.2 million sf of Sunvalley Shopping Center (“Sunvalley”), a 1.4 sf super-regional mall located in Concord, California. The Clackamas loan has an outstanding balance of $191.4 million and the Sunvalley loan has an outstanding balance of $140.4 million, resulting in a combined outstanding principal balance of $331.8 million. The loans are not cross-collateralized or cross-defaulted. The sponsors for the Clackamas Town Center loan are Brookfield Property and Teachers’ Retirement Systems of Illinois. The sponsor for the Sunvalley loan is Simon Property Group, LP. Both loans matured in 2022 and were granted 24-month extensions through October and September 2024, respectively. According to the servicer, the Sunvalley borrower has indicated that it will use a final extension option for a September 2025 maturity. However, there is no update on Clackamas which does not have additional extension options available.

The review utilized information from the trustee and servicer to determine KNCF. For Clackamas, the analysis produced a KNCF of $21.2 million, resulting in a KBRA value of $184.5 million and a whole-loan KLTV of 103.7%. Based on KBRA’s value of Clackamas an implied principal loss, if any, would be minimal. For Sunvalley, the analysis produced a KNCF of $11.2 million, resulting in a KBRA value of $93.6 million and a KLTV of 150.0%. Based on KBRA’s liquidation value of the Sunvalley mall, there is an implied principal loss of about $46.8 million to the trust.

KBRA maintains the loans’ K-LOC status and KPOs of Underperform because of both sponsors’ failure to payoff the debt at the original maturity date and the decline in the value of both malls since securitization.

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