KBRA Assigns Preliminary Ratings to BX 2024-AIRC
19 Jul 2024 | New York
KBRA announces the assignment of preliminary ratings to one class of BX 2024-AIRC, a CMBS single-borrower securitization.
Since the assignment of preliminary ratings to one class of the transaction and publication of our Pre-Sale report on July 11, 2024, the issuer has elected to upsize the loan amount from $2.00 billion to $2.95 billion and add 10 properties to the loan collateral. These changes are reflected in our updated Pre-Sale report on our website. There was no change to KBRA’s preliminary rating.
The collateral for the transaction is a $2.95 billion floating rate, interest-only mortgage loan. The loan has an initial two-year term with three, one-year extension options and requires monthly interest-only payments based on an expected SOFR cap of 4.50%. The loan is secured by the borrowers’ fee simple and leasehold interests in 29 multifamily properties totaling 8,831 units. The complexes were built or substantially redeveloped between 1960 and 2022 and on average are approximately 25 years old. As of May 2024, the portfolio was 96.5% occupied, with individual occupancy rates ranging from 83.2% to 99.1%.
KBRA’s analysis of the transaction included a detailed evaluation of the properties’ cash flows using our North American CMBS Property Evaluation Methodology and the application of our North American CMBS Single Borrower & Large Loan Rating Methodology. In addition, KBRA also relied on its Global Structured Finance Counterparty Methodology for assessing counterparty risk in this transaction and its ESG Global Rating Methodology, to the extent deemed applicable.
The results of our analysis yielded an as-is KBRA net cash flow (KNCF) for the portfolio of approximately $200.6 million, which is 6.1% below the issuer’s NCF, and a KBRA value of approximately $2.81 billion, which is 27.0% below the appraiser’s portfolio value. The resulting in-trust KBRA Loan to Value (KLTV) is 105.0%. In our analysis of the transaction, we also reviewed and considered third party engineering, environmental, and appraisal reports, the results of our site inspections of 13 (69.8%) of the portfolio properties, and legal documentation review.
To access rating and relevant documents, click here.
Click here to view the report.