KBRA Assigns Ratings to BMO 2024-5C3
14 Feb 2024 | New York
KBRA is pleased to announce the assignment of ratings to 12 classes of BMO 2024-5C3, a $902.2 million CMBS conduit transaction collateralized by 37 commercial mortgage loans secured by 55 properties.
The collateral properties are located throughout 20 MSAs, of which the three largest are New York (20.1%), Washington – NoVA – MD (8.2%), and New Orleans, LA (7.8%). The pool has exposure to all major property types, with three types representing more than 10.0% of the pool balance: retail (36.5%), multifamily (21.5%), and office (19.7%). The loans have principal balances ranging from $3.1 million to $74.0 million for the largest loan in the pool, Tysons Corner Center (8.2%), which is secured by the overlapping fee simple and leasehold interest in a 1.8 million sf, super-regional mall located in McLean, Virginia, approximately 13 miles west of Washington, DC. The five largest loans, which also include Elmwood Shopping Center (7.8%), Margaritaville Lake of the Ozarks (6.7%), Galleria at Tyler (5.5%), and 33 West State Street and 50 East State Street (5.5%), represent 33.7% of the initial pool balance, while the top 10 loans represent 54.1%.
KBRA’s analysis of the transaction incorporated our multi-borrower rating process that begins with our analysts' evaluation of the underlying collateral properties' financial and operating performance, which determine KBRA’s estimate of sustainable net cash flow (KNCF) and KBRA value using our U.S. CMBS Property Evaluation Methodology. On an aggregate basis, KNCF was 11.2% less than the issuer cash flow. KBRA capitalization rates were applied to each asset’s KNCF to derive values that were, on an aggregate basis, 37.5% less than third party appraisal values. The pool has an in-trust KLTV of 82.1% and an all-in KLTV of 85.0%. The model deploys rent and occupancy stresses, probability of default regressions, and loss given default calculations to determine losses for each collateral loan that are then used to assign our credit ratings.
To access rating and relevant documents, click here.
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