KBRA Assigns Preliminary Ratings to HIH 2024-61P
26 Sep 2024 | New York
KBRA announces the assignment of preliminary ratings to eight classes of HIH 2024-61P, a CMBS single-borrower securitization.
The collateral for the transaction is a $423.6 million floating rate, interest-only mortgage loan. The loan is expected to have an initial two-year term with three, one-year extension options and require monthly interest-only payments. The loan will be secured by the borrowers’ interests in 61 hotels including fee simple interests in 58 lodging properties totaling 4,725 keys (95.2% of loan balance) and the leasehold interests in three hotels totaling 291 keys (4.8%), all located in 22 states. For the TTM 6/2024, the portfolio’s occupancy was 70.4% with an average daily rate (ADR) of $128.22, resulting in revenue per available room (RevPAR) of $90.26. As of the TTM 6/2024 period, the portfolio achieved weighed average occupancy, ADR and RevPAR penetration rates of 109.0%, 108.5% and 118.7%, respectively.
KBRA’s analysis of the transaction included a detailed evaluation of the property’s cash flows using our North American CMBS Property Evaluation Methodology, and the application of our North American CMBS Single Borrower & Large Loan Rating Methodology. In addition, KBRA also relied on its Global Structured Finance Counterparty Methodology for assessing counterparty risk in this transaction, and its ESG Global Rating Methodology, to the extent deemed applicable.
The results of our analysis yielded a KBRA net cash flow (KNCF) for the portfolio of approximately $42.8 million, which is 7.7% below the issuer’s NCF, and a KBRA value of approximately $373.2 million, which is 38.7% below the aggregate of the appraiser’s individual as-is values for 39 properties and the appraiser’s hypothetical as if funded value for 22 properties, which assume that PIP reserve funds have been escrowed upfront. The resulting in-trust KBRA Loan to Value (KLTV) is 113.5%. In our analysis of the transaction, we also reviewed and considered third party engineering, environmental, and appraisal reports, the results of our site inspection of the property, and legal documentation review.
To access rating and relevant documents, click here.
Click here to view the report.