Press Release|CMBS

KBRA Updates the Status of the Ratings of DBCG 2017-BBG to Watch Developing

14 May 2024   |   New York


KBRA updates the status of the ratings of all classes of DBCG 2017-BBG, a CMBS SASB transaction, to Watch Developing from Watch Downgrade. The ratings were previously put on Watch Downgrade due to the challenges the borrower would have in refinancing the debt given the term of the Bloomberg lease. The Watch Developing action is based on reports that Bloomberg, which currently leases 98.8% of the collateral square footage, has extended its lease term from 2029 to 2040. However, at this time KBRA does not have the details of the lease extension including the new rent terms and landlord concessions.

The floating-rate loan requires interest-only payments and had an initial three-year term with four one-year extension options that have all been exercised. The loan is currently scheduled to mature in June 2024 and the servicer has stated as of the April 2024 remittance report that the borrower does not expect to refinance the loan by the maturity date. However, the lease extension puts the borrower in a better position to refinance the loan and also potentially negotiate a loan modification to give them more time to obtain financing. If the refinancing does not occur, and the transaction is not paid off in full, KBRA will take the appropriate rating actions as needed.

The collateral for the transaction is a non-recourse, first lien mortgage loan with an outstanding balance of $500.0 million as of April 2024. The mortgage loan is secured by the borrower’s fee simple interests in two office condominium units totaling 909,369 sf located at 731 Lexington Avenue, in the Manhattan borough of New York City, New York. The property was constructed in 2004 and consists of a 57-story Class-A, mixed-use tower connected by a curved glass courtyard to a nine-story building that together are referred to as the Bloomberg Building. The loan sponsor is Alexander’s, Inc., a REIT that is engaged in leasing, managing, developing, and redeveloping its properties. Alexander’s, Inc. is managed by Vornado Realty Trust. Alexander’s Management LLC has subcontracted its duties as property manager to Vornado Office, Inc., an affiliate of the borrower.

KBRA will continue to monitor the transaction and loan performance and will seek to resolve or update the Watch Developing status within 90 days.

Details for the classes with ratings changes are as follows:

  • Class A to AAA (sf) DEV from AAA (sf) DN
  • Class X-EXT to AAA (sf) DEV from AAA (sf) DN
  • Class B to AA (sf) DEV from AA (sf) DN
  • Class C to AA- (sf) DEV from AA- (sf) DN
  • Class HRR to A+ (sf) DEV from A+ (sf) DN

To access rating and relevant documents, click here.

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A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

Doc ID: 1004315

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