KBRA Assigns Preliminary Ratings to MSBAM 2026-C36
6 Aug 2026 | New York
KBRA is pleased to announce the assignment of preliminary ratings to 14 classes of MSBAM 2026-C36, a $700.5 million CMBS conduit transaction collateralized by 31 commercial mortgage loans secured by 57 properties. The collateral properties are located throughout 18 MSAs, of which the three largest are New York (21.7%), Orange County (10.5%), and San Jose (7.1%). The pool’s three largest property type exposures are retail (26.4%), office (23.9%), and multifamily (20.0%). The largest loan in the pool, Pismo Beach & Queenstown Premium Outlets (10.0%),comprised of two outlet centers in California and Maryland that together comprise 437,025 sf of the space. The five largest loans, which also include U-Haul AREC Portfolio 22 (10.0%), 19000 Homestead (7.1%), Orange Center Tower (5.8%), and Arizona Mills (5.0%), represent 37.9% of the initial pool balance, while the top 10 loans represent 59.1%.
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 determines KBRA’s estimate of sustainable net cash flow (KNCF) and KBRA value using our North American CMBS Property Evaluation Methodology. On a weighted average basis, the pool’s KNCF was 12.8% less than the issuer's cash flow. KBRA capitalization rates were applied to each asset’s KNCF to derive values that were 38.4% less than third party appraisal values. The pool has an in-trust KLTV of 88.2% and an all-in KLTV of 89.1%. The process also deploys rent and occupancy stresses, probability of default regressions, and loss given default calculations to determine losses for each loan which, in conjunction with pool concentration and other relevant factors, are used to assign our credit ratings.
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