KBRA Assigns Preliminary Ratings to BBCMS 2025-5C36
15 Jul 2025 | New York
KBRA is pleased to announce the assignment of preliminary ratings to 22 classes of BBCMS 2025-5C36, a $613.5 million CMBS conduit transaction collateralized by 31 commercial mortgage loans secured by 165 properties. The collateral properties are located throughout 40 MSAs, of which the three largest are New York (20.5% of pool balance), Los Angeles (11.9%) and Atlanta (10.3%). The pool has exposure to all major property types, with four types representing more than 10.0% of the pool balance: multifamily (45.0%), industrial (10.8%), mixed use (10.2%), and lodging (10.1%). The loans have in-trust principal balances ranging from $3.3 million to $61.0 million for the largest loan in the pool, ILPT 2025 Portfolio (9.9%), a portfolio of 102 primarily industrial properties located in 30 states that together comprise 18.3 million sf which is currently 82.9% leased to over 120 tenants. The five largest loans, which also include Equinox Sports Club LA (9.8%), 71 Spring Street (9.1%), Arrowhead Townhomes (7.3%), and The Roosevelt New Orleans (6.5%), represent 42.7% of the initial pool balance, while the top 10 loans represent 67.5%.
KBRA’s analysis of the transaction incorporated our multi-borrower rating process that begins with our analysts' evaluation of the underlying collateral properties' financial and operating performance, which determine KBRA’s estimate of sustainable net cash flow (KNCF) and KBRA value using our North American CMBS Property Evaluation Methodology. On an aggregate basis, KNCF was 7.5% less than the issuer cash flow. KBRA capitalization rates were applied to each asset’s KNCF to derive values that were, on an aggregate basis, 35.3% less than third party appraisal values. The pool has an in-trust KLTV of 94.7% and an all-in KLTV of 99.0%. The model deploys rent and occupancy stresses, probability of default regressions, and loss given default calculations to determine losses for each collateral loan that are then used to assign our credit ratings.
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