KBRA Downgrades Three Ratings and Affirms All Other Ratings for ONYP 2020-1NYP
13 Dec 2024 | New York
KBRA downgrades the ratings of three classes of certificates and affirms all other ratings for ONYP 2020-1NYP, a CMBS single borrower transaction. The rating actions follow a surveillance review of the transaction, which has exhibited a decline in KBRA’s value for the collateral property since securitization. The decline is attributable to an increase in the vacancy rate at the property as well as generally weaker demand for office space, resulting in lower KNCF and higher KLTV. However, the property does benefit from limited lease rollover in the near to medium term.
The transaction collateral is a non-recourse, first-lien mortgage loan secured by the borrower’s fee simple interest in a 50-story, 2.6 million sf, Class-A LEED Gold certified office tower located at One New York Plaza, in the Manhattan borough of New York City. The loan has an outstanding principal balance of $835.0 million ($323 per sf) as of December 2024. The floating-rate, interest-only loan had an initial term of two years, with three one-year extension options resulting in a fully extended maturity date of January 2026. The borrower has already used two extension options. The loan matures in January 2025, and the borrower has a one-year extension option remaining. According to the servicer, the borrower has not yet indicated its intention to either pay off or use the final option to extend the loan.
KBRA analyzed the cash flow for the property utilizing information from the trustee and servicer to determine KNCF. The analysis produced a KNCF of $69.7 million and a KBRA value of $895.5 million ($347 per sf). The resulting in-trust KLTV is 93.2%, compared to 90.1% at last review and 81.8% at securitization. KBRA identified the loan as a K-LOC and revised the loan’s KPO to Underperform from Perform due to a decline in financial performance and difficulty the borrower will have in refinancing the property at its fully extended maturity without improvement in performance or additional equity.
Details concerning the classes with ratings changes are as follows:
- Class C to BBB+ (sf) from A- (sf)
- Class D to BBB- (sf) from BBB (sf)
- Class HRR to BB (sf) from BBB- (sf)
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