KBRA Places Four Ratings of MSC 2019-NUGS on Watch Downgrade
9 Sep 2025 | New York
KBRA places four ratings of MSC 2019-NUGS, a CMBS SASB transaction, on Watch Downgrade. The Watch action is based on a significant increase in interest shortfalls, the loan's specially serviced status and the updated appraisal value which is significantly lower than the outstanding loan amount and contributing to the interest shortfalls. Currently, interest shortfalls are affecting up to and including the Class A certificates. The loan was transferred to the special servicer in December 2022 for maturity default. There is a $171.8 million ARA and a $5.8 million cumulative ASER as of August 2025. KBRA also considered the likelihood of interest shortfalls continuing as the special servicer works to resolve the loan.
The transaction collateral is a $277.1 million portion of a $327.7 million non-recourse, first-lien mortgage loan secured by the borrower’s fee simple interests in Wells Fargo Center, a 52-story LEED Gold-certified Class A office building with 1.2 million sf, plus a 12-story parking garage, in Denver, Colorado. The trust collateral is a $277.1 million senior A note. The non-trust collateral consists of $50.6 million of subordinate B notes. There is also $45.3 million of existing mezzanine debt held outside the trust. The floating-rate IO loan had an initial two-year term that ended in December 2021 with three one-year extension options.
The borrower extended the loan until December 2022 and had two extension options remaining. However, the borrower did not extend the loan when it reached maturity at the end of 2022, and it was transferred to special servicing as a matured performing loan in December 2022. The sponsors of the borrower are Beacon Capital Partners and Brookfield Strategic Real Estate Partners, but a receiver was appointed in August 2023 and is currently managing the property.
The servicer reported a DSC of 0.82x on the senior A note and a property occupancy rate of 64.0% as of the TTM ended June 2025.
KBRA will continue to monitor the transaction and loan performance and will seek to resolve or update the Watch Downgrade status within 90 days.
Details concerning the classes with ratings placed on Watch are as follows:
- Class A to BBB- (sf) DN from BBB- (sf)
- Class B to B- (sf) DN from B- (sf)
- Class C to CCC (sf) DN from CCC (sf)
- Class D to CC(sf) DN from CC (sf)
To access ratings and relevant documents, click here.