KBRA Affirms All Outstanding Ratings for OMPT 2017-1MKT

KBRA affirms all of its outstanding ratings for OMPT 2017-1MKT, a CMBS SASB transaction. The affirmations follow a surveillance review of the transaction, which has exhibited stable collateral performance since KBRA’s last ratings change in January 2021. The rating affirmations also take into consideration a recent decline in occupancy and near-term lease expirations at the collateral property, the property’s high quality and competitive position, as well as the sponsors’ experience.

The transaction collateral consists of a fixed-rate, first lien mortgage loan secured by the borrower’s fee simple and partial leasehold interest in One Market Plaza, a 1.6 million sf, Class-A office complex consisting of a 28-story office tower (Steuart Tower), a 42-story office tower (Spear Tower), a six-story annex building, and a two-story subterranean parking garage. The property is in San Francisco’s South Financial District near the waterfront. The borrower failed to pay off the loan by its originally scheduled maturity date of February 2024. The loan was modified and extended, and its balance was paid down by $125.0 million as part of the modification agreement. The loan has an outstanding balance of $850.0 million ($537 per sf) as of December 2025 and matures on February 6, 2026. According to the servicer, there is one remaining extension option and an additional one-year forbearance period following the second extension option, subject to certain conditions. The sponsor is a joint venture between affiliates of Paramount Group and Blackstone Property Partners.

KBRA analyzed the cash flow for the property utilizing information from the trustee and servicer to determine KNCF. The property’s occupancy decreased following the departures of Google and Morgan, Lewis & Bockius LLP and is expected to drop further following Visa’s move to its new headquarters. Therefore, KBRA utilized a stabilized analysis to derive property value and KLTV. The analysis produced a stabilized KNCF of $88.2 million, down from $96.0 million at KBRA’s last review and $76.8 million at closing. The resulting in-trust KLTV is 77.1%, compared to 70.8% at KBRA’s last review and 89.7% at securitization. KBRA maintains the loan’s K-LOC and KPO of Underperform because the borrower did not repay the loan at maturity and occupancy is below 80.0% and is expected to decline further in the near term. At this time, KBRA does not estimate a loss for this asset.

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