KBRA Downgrades Five Ratings and Affirms Three Ratings for CG-CCRE 2014-FL1
27 May 2026 | New York
KBRA downgrades the ratings of five classes of certificates and affirms three ratings for CG-CCRE 2014-FL1, a CMBS transaction. The rating changes reflect a continuing decline in KNCF and KBRA value and the difficulty the sponsor is likely to face refinancing the loan at its final maturity date in June 2026. We also considered the potential for principal losses and the resulting recoveries under a liquidation scenario.
The transaction collateral is the borrower’s fee simple interest in 645,179 sf of a 1.4 million sf retail complex located in Lombard, Illinois, approximately 19 miles west of the Chicago CBD. The full development consists of a two-story enclosed super-regional mall (Yorktown Mall), an adjacent open-air lifestyle center (Shops on Butterfield), a retail strip center (The Plaza Shops), 10 outparcels, and a 17-screen AMC Theater. The loan has an outstanding aggregate principal balance of $120.5 million, consisting of a pooled component balance of $107.4 million and $13.0 million of non-pooled junior participations. The loan’s sponsor is Pacific Retail Capital Partners.
The transaction was originally collateralized by three non-recourse, first lien mortgage loans with an aggregate in-trust principal balance of $343.0 million, a pooled component balance of $326.8 million, and $16.3 million of non-pooled debt in the form of junior participations. Two of the loans have paid off and there have been paydowns relating to partial collateral releases and a 2019 loan extension for the Yorktown Center loan.
The loan originally transferred to special servicing in October 2018 due to imminent maturity default ahead of its March 2019 maturity, after KKR, then the majority sponsor, indicated it could not refinance the loan. Following multiple modifications, the loan’s maturity was extended, most notably through a December 2020 modification that extended maturity to March 2023 with a one-year extension option. The modification also permitted KKR to transfer its 95.0% ownership interest to Pacific Retail Capital Partners (other remaining 5% ownership interest), released KKR from its guaranty and indemnity obligations, and forgave $30.3 million of mezzanine debt. After the failed to pay off on its extended March 9, 2024 maturity date, the borrower received another extension that included the servicer’s approval of a sale of a 3.59-acre collateral parcel, with proceeds to be applied as a principal paydown at closing. The most recent modified extended maturity date is June 9, 2026, and the loan remains cash managed. The rated final distribution date for the transaction is June 2031.
KBRA analyzed the cash flow for the property utilizing information from the trustee and servicer to determine KNCF. The analysis produced a KNCF and KBRA value of $5.8 million and $48.9 million ($76 per sf). The resulting in-trust KLTV is 246.2%, a change from 209.9% at KBRA’s last review and 81.8% at issuance. An appraisal of the collateral property dated October 2024 valued the asset at $60.4 million ($94 per sf), which represents a 65.5% decrease from the 2019 value of $175.3 million. Both KBRA’s value and the appraised value imply that the trust has a high risk of incurring losses upon final disposition of the asset. KBRA maintains the loan’s K-LOC designation and KPO of Underperform.
Details for the classes with rating changes are as follows:
- Class B to BB (sf) from A- (sf)
- Class C to CCC (sf) from B- (sf)
- Class D to CC (sf) from CCC (sf)
- Class E to C (sf) from CC (sf)
- Class X-EXT to BB (sf) from AAA (sf)
Details for the classes with rating affirmations are as follows:
- Class YTC1 at C (sf)
- Class YTC2 at C (sf)
- Class YTC3 at C (sf)
To access ratings and relevant documents, click here.
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