KBRA Downgrades Two Ratings and Affirms All Other Ratings for BFLD 2020-EYP
18 May 2026 | New York
KBRA downgrades the ratings of classes A and X-EXT and affirms all of the other outstanding ratings for BFLD 2020-EYP, a CMBS SASB transaction. The downgrades reflect the continued decline in occupancy of the collateral property, EY Plaza, since KBRA’s last ratings adjustments in May 2025, the loan’s foreclosure status, and the fact that interest shortfalls are affecting all rated classes. The loan was transferred to the special servicer in April 2023 and, as of May 2026, there is a $171.4 million ARA, a cumulative ASER amount of $24.2 million, total servicer advances of $13.9 million, and $9.2 million of cumulative non-recoverable interest. Due to the borrower’s payment default in December 2023 and the servicer’s December 2025 non-recoverable determination for advances, none of the rated classes of certificates have received month interest distributions for the prior six months.
The transaction is collateralized by a $275.0 million ($283 per sf) non-recourse, first-lien mortgage loan. The floating-rate loan requires monthly interest-only payments based on one-month term SOFR plus a spread of 2.857%. The loan sponsor, Brookfield DTLA Holdings LLC (Brookfield DTLA), an affiliate of Brookfield Property Partners L.P. (Brookfield), notified the servicer in early April 2023 that it would cease making debt service payments on the loan. The loan transferred to special servicing that same month, and a receiver was appointed in May 2023. The borrower did not repay or extend the loan at its October 2023 maturity.
The loan is secured by the borrower’s fee simple interest in Ernst & Young Plaza, a 41-story, 953,878-sf Class-A, LEED Platinum-certified office tower located in the Downtown Los Angeles submarket. According to CBRE, as of Q1 2026, the Downtown LA CBD submarket contained 31.7 million sf of office inventory. The direct vacancy rate was 35.3% and the overall availability rate was 38.5%, compared to 33.6% and 37.2%, respectively, one year earlier.
KBRA previously downgraded four classes in May 2025 following the announcement of a proposed $130.0 million property sale, which signaled a heightened risk of substantial principal losses to the trust. At that time, KBRA also considered the loan’s specially serviced status, outstanding advances of $23.6 million, a $170.0 million ARA, an $18.0 million ASER, and interest shortfalls of $18.1 million that were affecting Class B and lower. Additional considerations included weak office fundamentals in the Downtown Los Angeles submarket and the limited near-term outlook for a recovery in office demand. The proposed property sale ultimately failed because the parties could not agree on contract terms. Following the failed sale effort, Colliers was engaged in September 2025 to market the note rather than the fee interest. That process generated several bids that are currently under review by the special servicer, with a sale expected in July 2026.
According to the September 2025 rent roll, inclusive of leasing updates from the servicer, property occupancy is 61.5%, down from 68.6% at KBRA’s last review and 92.1% at closing. During the review period, Chicago Title Company (previously 3.4% of base rent) vacated at its lease expiration in December 2025, and The General Services Administration extended its 99,349 sf lease for three years, to June 2028. Leases that generate 31.9% of total base rent are scheduled to expire during the next 24 months.
KBRA analyzed the cash flow for the property utilizing information from the trustee and servicer to determine KNCF. KBRA’s analysis produced a KNCF of $11.3 million and a KBRA value of $102.4 million ($105 per sf). The resulting in-trust KLTV is 268.5%, compared to 232.8% at last review and 99.6% at securitization. Based on KBRA’s value, it is likely that the trust will incur significant principal losses upon final disposition of the asset.
KBRA maintains the loan’s K-LOC status and its KPO of Underperform.
Rating Sensitivities
Future rating actions will be dependent upon the ongoing assessment of the timing and likelihood of ultimate payment of principal and accrued interest on the rated certificates which will be dependent on the value of the asset and the disposition of the loan. The assessment will consider the expected and actual losses, as well as the magnitude and extent of accrued interest shortfalls on the certificates.
Details for the classes with rating changes are as follows:
- Class A to C (sf) from B- (sf)
- Class X-EXT to C (sf) from B- (sf)
To access ratings and relevant documents, click here.