KBRA Assigns Preliminary Ratings to BMO 2024-5C5
25 Jul 2024 | New York
KBRA is pleased to announce the assignment of preliminary ratings to 13 classes of BMO 2024-5C5, a $1.0 billion CMBS conduit transaction collateralized by 36 commercial mortgage loans secured by 65 properties.
The collateral properties are located throughout 25 MSAs, of which the three largest are New York (21.5%), Atlanta (14.8%), and San Francisco (5.3%). The pool has exposure to most major property types, with five types representing more than 10.0% of the pool balance: multifamily (35.2%), office (23.0%), lodging (14.0%), retail (11.5%), and mixed-use (11.4%). The loans have principal balances ranging from $4.1 million to $75.0 million for the largest loan in the pool, Arthouse Hotel (7.4%), a 16-story, 291-key, full-service hotel located in the Upper West Side neighborhood of New York City’s borough of Manhattan. The five largest loans, which also include The Motif by Morningside (6.5%), 1025 Lenox Park Northeast (6.4%), One Bay (5.3%), and Fieldside Grande (5.1%), represent 30.8% of the initial pool balance, while the top 10 loans represent 50.0%.
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 9.8% 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, 37.0% less than third party appraisal values. The pool has an in-trust KLTV of 94.6% and an all-in KLTV of 95.2%. 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.
To access rating and relevant documents, click here.
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