KBRA Removes Watch Downgrade Status for Two Ratings and Affirms All Ratings for 280 Park Avenue 2017-280P
18 Sep 2024 | New York
KBRA affirms all outstanding ratings for 280 Park Avenue 2017-280P, a CMBS SASB transaction, and simultaneously removes from Watch Downgrade (DN) the ratings for Classes C and D where they were placed in May 2024. The affirmations follow a surveillance review of the transaction, which has exhibited a decline in KNCF and KBRA value since issuance. However, the magnitude of the change does not warrant rating adjustments at this time. The affirmations reflect the high quality of the collateral asset, relative strength of the Manhattan office market, and experience of the sponsor. KBRA also considered the recent loan modification and maturity extension, and the property’s low near-term lease rollover exposure.
The transaction collateral is a non-recourse, first-lien mortgage loan secured by the borrower’s fee simple interest in a 1.3 million-sf Class-A office property at 280 Park Avenue between East 48th and East 49th Streets in the Plaza District of New York City’s Manhattan borough. The loan’s sponsor is owned through affiliates of SL Green Realty Corp. (50.0% ownership) and Vornado Realty Trust (50.0%). The floating-rate loan has an outstanding principal balance of $1.075 billion ($853 per sf) as of September 2024.
The loan’s original fully extended maturity date was September 9, 2024, but the borrower did not refinance the loan and it was modified and extended to September 2026. The modification provides for two additional extension options, subject to certain conditions, including paying down the loan balance. The new fully extended maturity is in September 2028.
The review utilized information from the trustee and servicer to analyze the loan collateral. The analysis produced a KNCF of $61.5 million and a KBRA value of $879.2 million ($698 per sf). The resulting in-trust KLTV is 122.3%, compared to 119.1% at last review and 103.0% at securitization. KBRA maintains loan’s K-LOC designation and its KPO of Underperform.
The ratings with adjustments are as follows:
- Class C to A- (sf) from A- (sf) DN
- Class D to BBB- (sf) from BBB- (sf) DN
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