KBRA Maintains Watch Developing Status for All Ratings of CGCMT 2021-PRM2

KBRA is maintaining its Watch Developing status for all ratings of CGCMT 2021-PRM2, a single-borrower transaction. We initially placed the ratings on Watch Developing on November 1, 2024 after the borrower failed to repay or extend the loan prior to its October 2024 maturity date. The loan was transferred to the special servicer in December. The loan status is non-performing matured balloon and is paid through December 2024. The servicer advanced the full interest payment for January.

The floating-rate, interest-only loan originally had a two-year term with three one-year extension options. The loan reached its initial maturity in October 2023, but the borrower used its first option and extended the loan to October 2024. The borrower did not repay the loan by the October 9 maturity date and instead requested, and later rescinded, a 60-day loan extension to facilitate refinancing the debt. The borrower has one extension option remaining, and is working with the special servicer on a 12-month extension to October 2025. The loan’s fully extended maturity is in October 2026.

The transaction is secured by a $340.0 million first-lien whole mortgage loan backed by a portfolio of 21 self-storage properties (71.8% of the loan balance) and one mixed-use property (28.2%). The self-storage properties operate under the Prime Storage brand. The non-recourse carveout guarantors are Prime Storage Fund II, LP, Prime Storage Fund II (Cayman), LP, Prime Storage Fund II IDF, LP, and Robert Moser. The loan sponsor is Robert Moser, the founder and CEO of Prime Group Holdings LLC, a full-service vertically integrated real estate owner-operator focused on self-storage facilities in North America.

The borrower reported NOI of $30.5 million for the trailing 12 months (TTM) ended June 2024. This would result in an NOI DSC of 1.13x (based on an interest rate of 7.95%). The NOI for the TTM ended July 2021 (prior to securitization) was $21.0 million.

KBRA will continue to monitor the transaction and loan performance and will seek to resolve or update the Watch Developing status within 90 days.

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