Press Release|CMBS

KBRA Downgrades Six Ratings and Affirms All Other Ratings for JPMBB 2014-C24

16 Apr 2025 | New York

KBRA downgrades the ratings of six classes of certificates and affirms all other outstanding ratings for JPMBB 2014-C24, a $397.1 million CMBS conduit transaction. Simultaneously, six classes have been removed from Watch Downgrade (DN), where they were first placed on December 16, 2024 and maintained on March 14, 2025. The rating actions are driven by an increase in KBRA's estimated losses for seven assets (73.0% of the pool balance) while also considering the magnitude, recoverability and ongoing likelihood of continued interest shortfalls across the capital structure as the special servicer works to resolve the non-performing assets. The servicer has already made a non-recoverable determination for six of the loans.

As of the March 2025 remittance period, the transaction has 10 assets, including eight (73.7%) that are specially serviced, of which two (28.5%) are REO, four (22.4%) are in foreclosure and one (3.8%) is matured non-performing. KBRA identified nine K-LOCs (95.7%), including the specially serviced assets. The details of the top five loans (86.3%) are outlined below.

Columbus Square Portfolio (largest, 22.0%, K-LOC, Underperform)

The loan is collateralized by five condominium buildings that contain retail, community facility and parking garage space located on the Upper West Side of New York City. The collateral contains a total of 494,224 sf within 31 commercial condominium units and consists of 19.9% of ground floor retail space, 36.0% of lower level retail space, 22.2% of community facility space, and 21.9% of leased parking garage space at three locations with a total capacity for 392 vehicles.
KBRA maintains the loan's K-LOC designation and KPO of Underperform due to the loan's prior status with the special servicer. The loan transferred to the special servicer in December 2023 due to imminent maturity default. It transferred back to the master servicer in July 2024 following a loan modification that closed in March 2024, which extended the loan's term by three years to August 2027. Per the December 2024 rent roll the property is 96.1% leased, compared to 99.2% at last review and 95.7% reported at securitization. Lease rollover through 2026 represents 12.0% of base rent and is spread across four tenants, the largest of which is HomeGoods, which represents 5.8% of base rent.
The servicer-reported occupancies and DSCs are: 97.0% / 1.18x (FY 2024), 99.0% / 1.22x (YTD June 2023); at closing these were 95.7% / 1.15x. At this time, KBRA does not estimate a loss on this asset.

635 Madison Avenue (2nd largest, 20.8%, K-LOC, Specially Serviced, REO)

The asset is a 19-story, 177,262 sf, Class-A, mixed-use, office and retail building located on Madison Avenue and 59th Street in the Plaza District of New York City’s borough of Manhattan. Built in 1957 and renovated in 2005, the property includes 156,126 sf of office space as well as 21,136 sf of retail space.
KBRA maintains the asset's K-LOC designation and KPO of Underperform due to its REO status. The loan transferred to the special servicer when it became 90+ days delinquent in August 2020. The property became REO in June 2024 and was deemed non-recoverable in August 2024. In October and December 2024, there were realized losses of $6.3 million and $100,000, respectively, that were applied to certificates of the transaction in order to reimburse the servicer. According to the December 2024 rent roll the property is 61.0% leased, which is a decline from 76.0% at last review and 94.4% at securitization. The decline in occupancy since last review is primarily due to N.Y. Physicians P.C (13.2% of total sf) vacating their space. Per the servicer, the asset is not currently listed for sale.
The servicer-reported occupancies and DSCs are: N/A / 0.28x (YTD September 2024), 63.0% / 0.81x (FY 2023); at closing these were 94.4% / 1.44x. An appraisal dated June 2024 valued the property at $78.8 million ($445 per sf), which is 60.0% lower than the $195.0 million ($1,100 per sf) appraised value at issuance. As a result, the asset carries an ARA of $21.2 million, resulting in a cumulative ASER of $197,902. KBRA’s analysis resulted in an estimated loss of $32.7 million (39.6% estimated loss severity). The loss is based on a KBRA liquidation value of $53.6 million ($302 per sf). The value is derived from a direct capitalization approach using a KNCF of $4.1 million and a blended capitalization rate of 7.60%.

17 State Street (3rd largest, 18.9%, K-LOC, Underperform, Specially Serviced)

The loan is collateralized by a 560,210 sf, 42-story, Class-A office building located in downtown Manhattan. The property was developed on a 0.5-acre site in 1988 and was acquired by the sponsor in 1999.
KBRA identified the loan as a K-LOC and adjusted the loan's KPO to Underperform from Perform due to its status with the special servicer. The loan transferred to the special servicer in August 2024 because the borrower did not repay the loan at its maturity date. An extension agreement was executed in January 2025, which extended the loan's maturity to January 2027, with an option to extend for an additional year to January 2028, contingent on property performance. In December 2024, there were realized losses of $100,000 that were applied to certificates of the transaction in order to a reimburse the servicer. However, in the March 2025 remittance report this loss amount was reduced to zero. Per the December 2024 rent roll the property is 92.6% leased, compared to 93.1% at last review and 90.7% at securitization. Lease rollover through 2026 represents 30.0% of base rent and is spread across 26 tenants, the largest of which is Axioma Inc., which represents 5.6% of base rent.
The servicer-reported occupancies and DSCs are: 93.0% / 2.17x (YTD September 2024), 94.0% / 3.58x (FY 2023); at closing these were 90.7% / 1.79x. An appraisal dated December 2024 valued the property at $215.0 million ($384 per sf), which is 33.8% lower than the $325.0 million ($580 per sf) appraised value at issuance. As of March 2025, the loan is current on payments. However, in the event of a default, KBRA estimates that it could experience a loss given default of $11.0 million (6.1% estimated loss severity) on the whole loan balance of $180.0 million. The loss is based on a KBRA liquidation value of $170.4 million ($304 per sf). The value is derived from a direct capitalization approach using a KNCF of $14.5 million and a capitalization rate of 8.50%.

North Riverside Park Mall (4th largest, 16.8%, K-LOC, Specially Serviced, Foreclosure)

The loan is collateralized by a 429,038 sf portion of a 1.1 million sf regional mall located in North Riverside, Illinois, approximately nine miles west of the Chicago CBD. The mall is currently anchored by JCPenney (180,588 sf, non-collateral). The former non-collateral Carson Pirie Scott (266,275 sf) and Sears (199,544 sf) boxes remain vacant. The sponsor of the borrower is The Feil Organization.
KBRA maintains the loan's K-LOC designation and KPO of Underperform due to the loan's foreclosure status. In May 2021, the loan was modified and extended through October 2024. The loan transferred to the special servicer in October 2024 when the borrower did not repay it at the extended maturity date. The borrower is seeking another maturity extension and the lender is dual tracking discussions with the borrower while proceeding with foreclosure action. As part of the prior modification, the loan was bifurcated into a $45.0 million A-Note and a $21.9 million B-Note. The interest rate remained unchanged, and the amortization type was changed to interest-only from amortizing balloon. The interest payments for the A-Note were paid monthly, while the interest payments for the B-Note, which compound monthly, accrued on each payment date. A cash flow sweep was in place through the October 2024 maturity date. As part of the modification, the borrower funded an all-purpose reserve account with $2.0 million, and as of the March 2025 remittance period, the all-purpose reserve account had a remaining balance of $714,422. Per the September 2024 rent roll the property is 89.0% leased, compared to 86.5% at last review and 94.1% at securitization. Lease rollover through 2025 represents 19.2% of base rent and is spread across 57 tenant leases, the largest of which represents 2.3% of base rent.
The servicer-reported occupancies and DSCs are: N/A / 2.17x (YTD June 2024), 88.0% / 2.15x (FY 2023); at closing these were 94.1% / 1.47x. An appraisal dated November 2024 valued the property at $38.1 million ($89 per sf), which is 70.5% lower than the $129.0 million ($301 per sf) appraised value at issuance. As a result, the asset carries an ARA of $32.5 million. KBRA’s analysis resulted in an estimated loss of $45.1 million (67.4% estimated loss severity). The loss is based on a KBRA liquidation value of $23.6 million ($55 per sf). The value is derived from a direct capitalization approach using a KNCF of $3.3 million and a capitalization rate of 14.00%.

Hilton Houston Post Oak (5th largest, 7.7%, K-LOC, Specially Serviced, REO)

The asset is a 14-story, 448-key, full-service hotel located in Houston, Texas, in the center of the Uptown/Galleria business district, approximately one block north of the Houston Galleria Mall and six miles west of the city’s CBD.
KBRA maintains the asset's K-LOC designation and KPO of Underperform due to its REO status. The trust obtained the title in September 2022 following a deed in lieu of foreclosure arrangement. According to the special servicer, the asset manager is planning to sell the property in 2025. The STR report for the TTM ended January 2025 indicates the hotel is outperforming its competitive set, as evidenced by its RevPAR penetration rate of 103.9%, compared to 109.6% at last review and 103.6% at issuance. The loan was deemed non-recoverable in October 2024. In October and December 2024, there were realized losses of $965,613 and $100,000, respectively, that were applied to certificates of the transaction in order to reimburse the servicer. However, in March 2025, the trust reduced the total losses by $762,000.
The servicer-reported occupancies and DSCs are: 67.9% / 1.44x (YTD September 2024), 52.0% / 1.81x (FY 2023); at closing these were 83.5% / 1.97x. An appraisal dated September 2024 valued the property at $68.8 million ($153,571 per key), which is 45.5% lower than the $126.2 million ($281,696 per key) appraised valued at issuance. As a result, the asset carries an ARA of $6.1 million, resulting in a cumulative ASER of $1.7 million. KBRA’s analysis resulted in an estimated loss of $18.9 million (27.0% estimated loss severity) on the whole loan balance of $70.0 million. The loss is based on a KBRA liquidation value of $52.3 million ($116,799 per key). The value is derived from a direct capitalization approach using a KNCF of $5.8 million and a capitalization rate of 11.00%.

Details concerning the classes with ratings changes are as follows:

Class A-S to AA (sf) from AAA (sf) DN
Class B to BBB- (sf) from AA- (sf) DN
Class EC to BB- (sf) from A- (sf) DN
Class C to BB- (sf) from A- (sf) DN
Class D to CCC (sf) from B- (sf) DN
Class E to C (sf) from CC (sf) DN

KBRA affirms the following ratings:

Class A-5 at AAA (sf)
Class F at 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.

To access ratings and relevant documents, click here.

Related Publication

CMBS: JPMBB 2014-C24 Pre-Sale Report

KBRA Downgrades Six Ratings and Affirms All Other Ratings for JPMBB 2014-C24

Rating Sensitivities

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Methodologies