KBRA Assigns Ratings to BMO 2024-5C7
30 Oct 2024 | New York
KBRA is pleased to announce the assignment of ratings to 13 classes of BMO 2024-5C7, a $959.6 million CMBS conduit transaction collateralized by 35 commercial mortgage loans secured by 78 properties.
The collateral properties are located throughout 23 MSAs, of which the three largest are New York (35.2%), Boston (7.8%), and Atlanta (6.3%). The pool has exposure to most major property types, with three types representing more than 10.0% of the pool balance: multifamily (51.0%), industrial (20.9%), and office (12.3%). The loans have principal balances ranging from $4.8 million to $60.0 million for the largest loan in the pool, Colony Square (6.3%), a 1.1 million sf, Class-A, mixed-use office and retail complex located in Atlanta, Georgia, within the Midtown neighborhood of the city’s CBD. The five largest loans, which also include 125 Summer (6.3%), Tank Holding Portfolio (6.3%), Signum at 375 Dean (6.3%), and GRM South Brunswick (6.3%), represent 31.3% of the initial pool balance, while the top 10 loans represent 57.7%.
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 10.1% 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, 35.6% less than third party appraisal values. The pool has an in-trust KLTV of 94.2% and an all-in KLTV of 96.1%. 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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