KBRA Affirms All Ratings for Olympic Tower 2017-OT

KBRA affirms all outstanding ratings for Olympic Tower 2017-OT, a CMBS SASB transaction. The affirmations follow a surveillance review of the transaction, which has exhibited a slight decline in performance since KBRA’s last ratings change in June 2024. However, the magnitude of the change in KBRA value and KLTV does not warrant rating changes at this time. KBRA also considered the strength of the in-place tenancy and limited lease roll in the near to intermediate term.

The collateral consists of a $480.0 million portion of a $760.0 million non-recourse, first lien mortgage loan secured by the borrower’s leasehold interest in a 525,372 sf, Class-A retail and office complex in Midtown Manhattan’s Plaza District. A 99-year ground lease, which expires in September 2074, encumbers the majority of the property, while an additional 2,200 sf parcel is leased by the borrower pursuant to a sub-ground lease that expires in January 2067. The property is also subject to a condominium regime consisting of one commercial unit that is loan collateral and 230 non-collateral residential units. The borrower holds a 46.7% interest in the general common elements. The loan sponsors are OPG Investment Holdings (US), LLC; Crown Retail Services LLC; Centurian Management Corporation; and Crown 600 Broadway LLC, which are affiliates of OMERS Administration Corporation (dba Oxford Properties Group, 67.0% ownership) and Crown Acquisitions (33.0%).

KBRA analyzed the cash flow for the properties utilizing information from the trustee and servicer to determine KNCF. The analysis produced a KNCF of $54.2 million and a KBRA value of $747.7 million ($1,423 per sf). The resulting in-trust KLTV is 101.6%, a change from 97.2% at KBRA’s last review and 80.0% at securitization. KBRA removed the loan’s K-LOC designation but maintains its KPO of Underperform due to a decline in collateral performance since issuance. The deterioration has been driven primarily by lower office occupancy, elevated operating expenses, and reduced retail rental rates. Partially offsetting these concerns, overall occupancy at the property has recently improved, and lease rollover risk remains minimal.

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