Press Release|CMBS
View PDF

KBRA Downgrades Five Ratings, Withdraws Two Ratings and Affirms All Other Ratings for COMM 2014-UBS4

25 Apr 2025   |   New York

Contacts

KBRA downgrades five ratings, withdraws two ratings and affirms all other outstanding ratings for COMM 2014-UBS4, a $365.1 million CMBS conduit transaction. Ten assets remain in the mortgage pool, each of which has been identified as a K-LOC with estimated losses. The rating actions follow a surveillance review of the transaction, which has had a meaningful increase in KBRA's estimated losses since our last ratings change in April 2024. The rating withdrawals on Classes X-A and X-B are done in accordance with KBRA’s Methodology for Rating Interest-Only Certificates (the transaction has 10 or fewer loans remaining).

As of the April 2025 remittance period, two loans (36.5% of the pool balance) are in foreclosure, two (17.9%) have a matured non-performing balloon status, one (4.8%) has a matured performing balloon status, one (2.7%) is REO and four (38.0%) are current. Details of the loans with the greatest estimated losses are outlined below.

State Farm Portfolio (largest, 29.7%, K-LOC)

  • The loan is collateralized by a portfolio originally comprising 14 Class-A and Class-B suburban office buildings located in 11 states. The portfolio totaled 3.4 million sf, and the individual properties ranged in size from 105,639 to 402,177 sf, with an average of 242,699 sf.
  • KBRA maintains the loan's K-LOC designation and its KPO of Underperform because the portfolio of properties is 81.5% vacant. The loan also had been delinquent and spent time in special servicing in 2024. The loan was returned to the master servicer in February 2025 after a partial release of one property. The borrower did not pay off the loan at its April 2024 ARD. The loan's final maturity is in April 2029. The portfolio is 96.4% leased to State Farm, pursuant to leases that primarily expire in 2028. In an effort to consolidate and relocate its headquarters, State Farm has vacated every property in the portfolio. Two properties are fully subleased to single-tenant users, while the remaining properties are listed for sublease.
  • The servicer-reported occupancies and DSCs are: 100.0% / 2.09x (TTM September 2024); 94.0% / 2.06x (FY 2023), 100.0% / 2.06x (FY 2022); at closing these were 100.0% / 2.02x. As of April 2025, the loan is current on payments and not specially serviced. However, in the event of a default, KBRA estimates that it could experience a loss given default of $74.2 million (22.8% estimated loss severity) on the whole loan balance of $325.9 million. The loss is based on a distressed liquidation value of $253.2 million ($81 per sf). The value is derived from a direct capitalization approach using a KNCF of $22.8 million which assumes a vacancy rate of 20.0% and a capitalization rate of 9.0%.

597 Fifth Avenue (2nd largest, 28.8%, K-LOC, Specially Serviced, Foreclosure)

  • The loan is collateralized by two mixed-use buildings that contain 86,032 sf of Class-B office and ground-level retail space in Midtown Manhattan. The larger of the two properties, 597 Fifth Avenue, also known as The Scribner Building, is a 12-story landmarked office building that was built in 1913 and is comprised of 67,128 sf, 12,229 sf of which is a retail component leased to Club Monaco. The 3 East 48th Street property is a six-story office building constructed in 1920 that totals 12,904 sf.
  • KBRA maintains the loan's K-LOC designation and its KPO of Underperform based on the servicer's designated workout strategy of foreclosure. Further, the loan defaulted at its maturity in July 2024 after a history of payment delinquency beginning in 2020. Foreclosure sale has been scheduled for April 2025. The subject is currently 20% occupied by two tenants whose leases expire in 2031 and 2027. The loan was deemed non-recoverable in March 2024.
  • The servicer-reported occupancies and DSCs are: 49.0% / -0.35x (TTM March 2023), 71.0% / 0.28x (TTM June 2022); at closing these were 51.5% / 1.41x. An October 2024 appraisal of the subject valued the collateral at $53.0 million ($616 per sf), which is 70.6% below the appraised value at issuance of $180.0 million ($2,092 per sf). An ARA of $66.0 million was assigned in December 2024 and the cumulative ASER amount is $1,014,661. KBRA's analysis resulted in an estimated loss of $90.6 million on a whole loan balance of $105.0 million (86.3% estimated loss severity). The loss is based on a distressed liquidation value of $26.1 million ($303 per sf) which considers the risk of the property not being able to stabilize.

30 Knightsbridge (3rd largest, 13.8%, K-LOC, Specially Serviced, Matured Non-Performing)

  • 30 Knightsbridge is collateralized by a 686,316 sf, Class-B office complex located in Piscataway, New Jersey, approximately 38 miles southwest of New York City.
  • KBRA maintains the loan's K-LOC designation and its KPO of Underperform based on its status with the special servicer and its default at maturity in July 2024 after falling delinquent in February 2024. The subject is currently 50% occupied. There is high near-term lease rollover risk with leases generating 23.6% of base rent scheduled to expire through 2025, which includes five tenants (11.2% of base rent) operating on a month-to-month basis. The servicer continues to dual track foreclosure while continuing workout discussions. The loan was deemed non-recoverable in January 2025.
  • The servicer-reported occupancies and DSCs are: 50.0% / 0.44x (TTM September 2024), 55.0% / 1.55x (FY 2023); at closing these were 91.0% / 1.49x. An ARA of $12.7 million was assigned in August 2024 and the cumulative ASER amount is $318,978. KBRA's analysis resulted in an estimated loss of $12.5 million on a whole loan balance of $50.3 million (24.8% estimated loss severity). The loss is based on a distressed liquidation value of $40.8 million ($60 per sf), which considers the risk of the property not being able to stabilize.

North Pointe Business Park (4th largest, 7.8%, K-LOC, Specially Serviced, Foreclosure)

  • The loan is collateralized by three three- and four-year story, Class-A office buildings located in a suburban office park in American Fork, Utah. The buildings contain a total rentable area of 250,506 sf and were developed between 2008 and 2014. All three buildings feature amenities including three-story lobby atriums, polished granite lobby floors, fitness centers, key-card entry, backup power generators and multiple fiber providers.
  • KBRA identified the loan as a K-LOC and revised the loan’s KPO of Underperform due to the loan’s foreclosure status. The loan was transferred to the special servicer in June 2024 for payment default. The subject is currently 57.4% occupied with leases representing 17.4% of base rent scheduled to expire through 2025.
  • The servicer-reported occupancies and DSCs are: 76.0% / 1.24x (FY 2023), 100.0% / 1.47x (FY 2022); at closing these were 99.1% / 1.38x. A July 2024 appraisal of the subject valued the collateral at $28.1 million ($112 per sf), which is 44.3% below the appraised value at issuance of $50.4 million. An ARA of $3.7 million was assigned in September 2024 and the cumulative ASER amount is $127,896. KBRA's analysis resulted in an estimated loss of $11.9 million on a whole loan balance of $28.4 million (41.7% estimated loss severity). The loss is based on a distressed liquidation value of $19.3 million ($77 per sf). The value is derived from a direct capitalization approach using a KNCF of $1.8 million which assumes a 20% vacancy and a capitalization rate of 9.25%.

Fremont Moreno (6th largest, 4.8%, K-LOC, Specially Serviced, Matured Performing)

  • The loan is collateralized by a 14,400-sf retail center located within the Third Street Promenade in Santa Monica, California, approximately 15 miles west of the Los Angeles CBD. The property was built in 1948 and features three units.
  • KBRA maintains the loan's K-LOC designation and its KPO of Underperform based on the borrower’s failure to pay off the outstanding loan balance at maturity in June 2024 and the departure of the sole remaining tenant, Foot Locker (52%), who continues to pay rent even after vacating the space. Per the borrower, Foot Locker’s lease expires at year end 2025. The loan was deemed non-recoverable in March 2025. As of April 2025, the loan status is matured performing.
  • The servicer-reported occupancies and DSCs are: N/A / 1.02x (YTD Annualized March 2024), 52.0% / 0.99x (FY 2023); at closing these were 100.0% / 1.53x. A June 2024 appraisal of the subject valued the collateral at $11.6 million ($806 per sf), which is 67.1% below the appraised value at issuance of $35.3 million. An ARA of $7.1 million was assigned in September 2024 and the cumulative ASER amount is $0. KBRA's analysis resulted in an estimated loss of $10.5 million on a whole loan balance of $17.7 million (59.0% estimated loss severity). The loss is based on a distressed liquidation value of $8.6 million ($596 per sf). The value is derived from a direct capitalization approach using a KNCF of $690,000, which assumes a 5% vacancy and a capitalization rate of 8.00%.

Details concerning the ratings adjustments are as follows:

  • Class A-M to AA (sf) from AAA (sf)
  • Class B to BB (sf) from A (sf)
  • Class C to CC (sf) from BB (sf)
  • Class D to C (sf) from CC (sf)
  • Class PEZ to CC (sf) from BB (sf)
  • Class X-A to WR from AAA (sf)
  • Class X-B to WR from AAA (sf)

To access ratings and relevant documents, click here.

Related Publication

Methodologies

Disclosures

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 www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA 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 (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1009116

CONNECT WITH KBRA
805 Third Avenue
29th Floor
New York, NY 10022
+1 (212) 702-0707
Contact Us

© 2010-2025 Kroll Bond Rating Agency, LLC. All Rights Reserved. Kroll Bond Rating Agency, LLC is not affiliated with Kroll Inc., Kroll Associates Inc., KrollOnTrack Inc., or their affiliated businesses.

Sitemap•Terms of Use•Privacy Notice•Cookie Policy••Regulatory