KBRA Assigns Preliminary Ratings to MSBAM 2025-C35
14 Jul 2025 | New York
KBRA is pleased to announce the assignment of preliminary ratings to 14 classes of MSBAM 2025-C35, a $597.8 million CMBS conduit transaction collateralized by 40 commercial mortgage loans secured by 65 properties. The collateral properties are located throughout 29 MSAs, of which the three largest are New York (11.6% of pool balance), Boston (11.4%), and Washington - NoVA - MD (8.8%). The pool has exposure to all major property types, with four types representing more than 10.0% of the pool balance: office (22.3%), retail (19.4%), mixed-use (18.5%), and lodging (15.3%). The loans have in-trust principal balances ranging from $1.7 million to $59.5 million for the largest loan in the pool, BioMed MIT Portfolio (10.0%), which is comprised of eight life science lab/office properties located in Cambridge, Massachusetts, directly adjacent to the Massachusetts Institute of Technology (MIT) campus. The five largest loans, which also include Marriott World Headquarters (8.8%), Extended Stay Portfolio (7.5%), Crossroads Office Park (7.1%), and 32 Old Slip - Leased Fee (6.0%), represent 39.4% of the initial pool balance, while the top 10 loans represent 61.1%.
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 determine KBRA’s estimate of sustainable net cash flow (KNCF) and KBRA value using our North American CMBS Property Evaluation Methodology. On an aggregate basis, KNCF was 14.0% less than the issuer cash flow. KBRA capitalization rates were applied to each asset’s KNCF to derive values that were, on an aggregate basis, 37.9% less than third party appraisal values. The pool has an in-trust KLTV of 85.5% and an all-in KLTV of 89.8%. The model deploys rent and occupancy stresses, probability of default regressions, and loss given default calculations to determine losses for each collateral loan that are then used to assign our credit ratings.
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