KBRA Downgrades One Rating of UBS 2017-C1 to D (sf) Following Realization of Principal Losses
27 Mar 2024 | New York
KBRA downgrades the rating of the Class F-RR certificate to D(sf) from C (sf) for UBS 2017-C1, a CMBS conduit transaction, following realized losses taken against its outstanding principal balance resulting from the resolution of the of the $18.8 million Hilton Woodcliff Lake REO asset as reflected in the March 2024 remittance report. The asset incurred a loss of $11.9 million (54.0% loss severity of original balance). The loss was generally in line with KBRA's expectations (see May 2023 surveillance report).
The Hilton Woodcliff REO asset was sold in March 2024 for $16.2 million ($48,035 per key), slightly below the most recent appraised value of $17.0 ($50,296 per key) as of October 2023. At issuance, the asset was appraised for $37.0 million ($109,467 per key). The asset was collateralized by a four-story, 338-key, full-service hotel located in Woodcliff Lake, New Jersey, approximately 24 miles northwest of New York City's borough of Manhattan.
The $35.2 million in cumulative principal losses to date, as reported in the March 2024 remittance report. The realized losses has resulted in the principal balance of Class F-RR being reduced by $1.6 million (17.1% of its original balance). Along with the liquidation of the Hilton Woodcliff REO asset, the transaction has incurred losses from the liquidation sale of three previously specially serviced assets: Art Van Portfolio ($3.9 million, September 2021), UniSquare Portfolio ($14.9 million, December 2021), and Greenhill Apartments ($4.5 million, January 2024), which resulted in loss severities of 13.1%, 67.8%, and 60.6%, respectively.
KBRA's other outstanding transaction ratings are unchanged at this time. KBRA most recently downgraded three classes of certificates of the transaction in May 2022 based on KBRA's estimated losses.
Details concerning the classes with ratings changes are as follows:
- Class F-RR to D (sf) from C (sf)
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. The assessment will consider the expected and actual losses on the remaining assets in the transaction, as well as the magnitude and extent of interest shortfalls, if any, on the certificates.
For additional details, please see the UBS 2017-C1 May 2023 Surveillance report linked below.
To access rating and relevant documents, click here.