KBRA Assigns Ratings to HGMT 2025-HGLR
13 Feb 2025 | New York
KBRA announces the assignment of ratings to three classes of HGMT 2025-HGLR, a CMBS single-borrower securitization.
The collateral for the transaction is a $1.2 billion non-recourse, first lien mortgage loan that is expected to be originated by Bank of America, N.A. (BANA), Wells Fargo Bank, National Association (WFB), Barclays Capital Real Estate Inc. (BCREI), Goldman Sachs Bank USA (GS Bank), German American Capital Corporation (GACC), Bank of Montreal (BMO), JPMorgan Chase Bank, National Association (JPMCB), Citi Real Estate Funding, Inc. (CREFI), Societe Generale Financial Corporation (SGFC), Natixis Real Estate Capital LLC (NREC), and Santander Bank, N.A. (SB) prior to the transaction closing date of February 13, 2025. The fixed rate loan has a ten-year term and requires monthly interest-only payments based on a fixed rate that is expected to be 6.00%. The loan is secured by the borrower’s fee simple interest in Houston Galleria, a 2.0 million sf super-regional mall located in Houston, Texas, of which 1.6 million sf serves as collateral of the subject loan. The collateral, excluding temporary tenants, is 91.7% leased to over 250 unique tenants.
KBRA’s analysis of the transaction included a detailed evaluation of the properties’ cash flows using our North American CMBS Property Evaluation Methodology and the application of our North American CMBS Single Borrower & Large Loan Rating Methodology. In addition, KBRA also relied on its Global Structured Finance Counterparty Methodology for assessing counterparty risk in this transaction and its ESG Global Rating Methodology, to the extent deemed applicable.
The results of our analysis yielded a KBRA net cash flow (KNCF) for the property of approximately $127.8 million, which is 5.7% below the issuer’s NCF, and a KBRA value of approximately $1.8 billion, which is 49.2% below the appraiser’s as-is value. The resulting in-trust KBRA Loan to Value (KLTV) is 68.3%. In our analysis of the transaction, we also reviewed and considered third party engineering, environmental, and appraisal reports, the results of our site inspection of the property, and legal documentation review.
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