KBRA Assigns Ratings to BMO 2025-5C9
31 Mar 2025 | New York
KBRA is pleased to announce the assignment of ratings to 12 classes of BMO 2025-5C9, a $681.7 million CMBS conduit transaction collateralized by 31 commercial mortgage loans secured by 54 properties. The collateral properties are located throughout 20 MSAs, of which the three largest are New York (38.6% of pool balance), Chicago (5.6%) and Los Angeles (4.2%). The pool has exposure to most major property types, with three types representing more than 10.0% of the pool balance: retail (32.6%), hospitality (21.3%), and office (19.5%). The loans have in-trust principal balances ranging from $3.4 million to $60.0 million for the largest loan in the pool, Herald Center (8.8%), a 267,207 sf, mixed-use office/retail building located in the Midtown Manhattan of New York City. The five largest loans, which also include Pinnacle Hills Promenade (8.8%), AVAD Midland & Odessa Self Storage Portfolio (8.8%), Commando Self Storage Portfolio (8.8%) and Renaissance New York Midtown Hotel (7.3%), represent 42.5% of the initial pool balance, while the top 10 loans represent 66.3%.
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 North American CMBS Property Evaluation Methodology. On an aggregate basis, KNCF was 10.2% 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, 38.5% less than third party appraisal values. The pool has an in-trust KLTV of 87.9% and an all-in KLTV of 96.4%. 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.
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