Press Release|CMBS

KBRA Downgrades Four Ratings and Affirms All Other Ratings for COMM 2014-UBS5

27 Jun 2025 | New York

KBRA downgrades the ratings of four classes of certificates and affirms all other outstanding ratings for COMM 2014-UBS5, a $316.5 million CMBS conduit transaction, which has 11 assets remaining in the underlying mortgage pool. The rating actions follow a surveillance review of the transaction, which reflected an increase in KBRA’s estimated losses compared to KBRA’s last review as well as the likelihood of interest shortfalls reaching higher in the capital structure as the servicer works through the resolution of distressed assets. Additionally, the transaction has incurred realized losses since last review from the reimbursement of servicer advances for the REO Harwood Center asset (6th largest, 8.3% of the pool balance).

As of the June 2025 remittance period, seven (58.0%) of the 11 remaining assets are specially serviced, including two REO assets (20.0%) and two assets (8.8%) in foreclosure. Four assets (31.5%) have been deemed non-recoverable by the servicer. KBRA identified all remaining assets in the pool as K-LOCs. Eight (67.0%) of the K-LOCs have estimated losses. The details of the remaining assets are outlined below.

Summit Rancho Bernardo (largest, 17.2%, K-LOC, Underperform)

The loan is collateralized by 196,734 sf, Class-A LEED certified Gold suburban office building located in San Diego, California, approximately 24 miles north of the city’s CBD. The property is primarily occupied by Apple (95.7% of total base rent) pursuant to a lease that is scheduled to expire in January 2028. Apple has a termination option that would be effective in March 2026.
KBRA identified the loan as a K-LOC and revised its KPO to Underperform from Perform due to maturity default and subsequent transfer to special servicing in September 2024. The loan returned to the master servicer in February 2025 after a loan modification in November 2024. Modification terms included a maturity extension through September 2025 to align with the expiration of Apple’s termination notice period and an extension option through September 2026, which is contingent on the contribution of new cash equity, among other requirements. The borrower contributed $3.0 million in new cash equity, applied as a principal curtailment in January 2025.
The servicer-reported occupancies and DSCs are: 100% / 1.84x (YTD June 2024), 100% / 1.86x (FY 2023); at closing these were 100% / 1.49x. An updated appraisal dated September 2024 valued the property at $62.4 million ($317 per sf), which is 33.6% below the $94.0 million ($478 per sf) appraisal value at issuance. At this time, KBRA does not estimate a loss on the $54.3 million loan balance.

State Farm Portfolio (2nd largest, 14.7%, K-LOC, Underperform, Specially Serviced)

The loan is collateralized by a portfolio comprising 13 Class-A and Class-B suburban office buildings located in 11 states. The portfolio totals 3.1 million sf, and the individual properties range in size from 105,639 to 402,177 sf. Since issuance, one property totaling 287,580 sf has been released from the portfolio. The portfolio is 96.4% leased to State Farm, pursuant to leases that expire in November 2028. In an effort to consolidate and relocate its headquarters, State Farm vacated every property in the portfolio. The portfolio is 81.5% physically vacant: two properties are fully subleased to single-tenant users, while the remaining properties are listed for sublease.
KBRA maintains the loan's K-LOC designation and its KPO of Underperform based on collateral occupancy concerns, its status with the special servicer, and the borrower's failure to pay off the loan at its ARD in April 2024. The loan previously transferred to the special servicer in September 2023 and returned to the master servicer in January 2025 after a property release. Most recently, the loan transferred to the special servicer in May 2025 due to imminent monetary default. In addition to a principal curtailment associated with the property release, the loan has deleveraged with excess cash flow that has been applied to reduce the outstanding principal balance since the loan passed its ARD. The loan’s final maturity date is April 6, 2029.
The servicer-reported occupancies and DSCs are: 100% / 2.09x (FY 2024); 94.0% / 2.06x (FY 2023); at closing these were 100% / 2.02x. KBRA’s analysis resulted in an estimated loss of $71.7 million (22.3% estimated loss severity) on the $322.0 million whole loan balance. The estimated loss is based on a KBRA value of $253.2 million ($81 per sf), which is derived from an income capitalization approach using a KNCF of $22.8 million and a capitalization rate of 9.00%.

Quakerbridge (3rd largest, 13.4%, K-LOC, Underperform)

The loan is collateralized by a 425,859 sf, Class-B office complex located in Hamilton, New Jersey, approximately 40 miles northeast of Philadelphia, Pennsylvania. The development comprises four three-story and eight single-story buildings.
KBRA identified the loan as a K-LOC and revised its KPO to Underperform from Perform due to maturity default and subsequent transfer to the special servicer in September 2024. The loan was modified in March 2025 and returned to the master servicer in May 2025. The modification terms included a two-year maturity extension to September 2026, a principal curtailment of $425,000, and modification of the cash management waterfall to include the application of excess cash flow toward further principal curtailment, among other items.
The servicer-reported occupancies and DSCs are: 95.0% / 1.26x (YTD June 2024), 95.0% / 1.35x (FY 2023); at closing these were 91.8% / 1.37x. An updated appraisal dated October 2024 valued the property at $50.1 million ($118 per sf), which is 25.2% below the $67.0 million ($157 per sf) appraisal value at issuance. At this time, KBRA does not estimate a loss on the $42.3 million loan balance.

Town Park Ravine I, II, III (4th largest, 11.7%, K-LOC, Underperform, REO)

The asset is a 367,090 sf office portfolio located in Kennesaw, Georgia, approximately 25 miles north of Atlanta. The property comprises two six-story buildings and one four-story building.
KBRA maintains the asset’s K-LOC designation and KPO of Underperform based on its REO status. The asset transferred to the special servicer in September 2024 due to maturity default. The special servicer pursued foreclosure, and the trust acquired title to the asset in June 2025.
The servicer-reported occupancies and DSCs are: 55.0% / 1.21x (YTD June 2024), 59.0% / 1.25x (FY 2023); at issuance these were 93.0% / 1.56x. An updated appraisal dated April 2025 valued the property at $29.8 million ($81 per sf), which is 48.2% below the $57.5 million ($157 per sf) appraisal value at issuance. The asset carries an ARA of $8.7 million, resulting in a cumulative ASER of $178,558. The asset was deemed non-recoverable by the servicer in April 2025 and cumulative non-recoverable interest totaled $273,993 as of June. KBRA’s analysis resulted in an estimated of $15.1 million (40.8% estimated loss severity) on the $37.1 million outstanding balance. The estimated loss is based on a KBRA value of $23.1 million ($63 per sf), which is derived from an income capitalization approach using a KNCF of $2.1 million and a capitalization rate of 9.25%.

Breakwater Hotel (5th largest, 8.9%, K-LOC, Underperform)

The loan is collateralized by the borrower's fee interest in a 99-key independent boutique hotel located in Miami Beach, Florida. The asset was constructed in 1939 and renovated in 2011.
KBRA maintains the loan's K-LOC designation and KPO of Underperform based on its multiple transfers to special servicing. The loan was first transferred to the special servicer in October 2020 due to pandemic-related distress and returned to the master servicer in May 2022 following a forbearance agreement. The loan most recently transferred to the special servicer for a second time in November 2022 due to non-monetary default caused by a judgment lien against the borrower related to the property’s restaurant tenant. The borrower failed to pay off the loan at maturity in September 2024, but the loan returned to the master servicer in January 2025 after a forbearance agreement extended loan maturity to September 2025.
The servicer-reported occupancies and DSCs are: 49.0% / 0.66x (YTD September 2024), 61.0% / 0.73x (FY 2023); at issuance these were 78.0% / 1.64x. An appraisal dated March 2024 valued the property at $40.0 million ($404,040 per key), which is 16.7% below the $48.0 million ($484,848 per key) appraisal value at issuance. The loan still has a cumulative ASER of $43,095 derived from an ARA of $2.9 million that was effectuated in March 2021. As of June 2025, the loan no longer carries an ARA, is current in payment, and is not specially serviced. However, in the event of another default or transfer to special servicing, KBRA estimated that the loan could experience a loss given default of $3.8 million (13.4% estimated loss severity) on the loan balance of $28.3 million. The estimated loss is based on a KBRA value of $30.0 million ($303,030 per key), which represents 75% of the most recent appraisal value.

Harwood Center (6th largest, 8.3%, K-LOC, Underperform, REO)

The asset comprises fee and leasehold interests in a 723,963 sf, Class-A office property located in the CBD of Dallas, Texas. The property includes a 36-story office tower and an attached nine-story parking garage, together providing 744 parking spaces.
KBRA maintains the asset’s K-LOC designation and KPO of Underperform based on its REO status. The asset transferred to special servicing in May 2020 for imminent monetary default due to occupancy concerns and the trust acquired the title to the property in November 2021. According to servicer commentary as of June 2025, the special servicer will market the asset for sale in 2025 and has an expected disposition date in Q4 2025. According to the September 2024 rent roll, the property was 48.5% leased.
The servicer-reported occupancies and DSCs are: 69.0% / 0.56x (YTD March 2020), 91.0% / 1.37x (FY 2019); at issuance these were 84.0% / 1.36x. An appraisal dated November 2024 valued the property at $51.2 million ($71 per sf), which is 58.7% below the $124.0 million ($171 per sf) appraisal value at issuance. An aggregate ARA of $26.2 million has been effectuated on the whole loan balance, of which $8.7 million is attributable to the COMM 2014-UBS5 transaction. The ARA for this transaction resulted in a cumulative ASER of $350,506. The asset was deemed non-recoverable in April 2024, resulting in cumulative non-recoverable interest of $1.2 million for the COMM 2014-UBS5 transaction. KBRA's analysis resulted in an estimated loss of $43.4 million (54.9% estimated loss severity) on the aggregate outstanding balance of $79.1 million. The estimated loss is based on a KBRA liquidation value of $37.2 million ($51 per sf).

The remaining five assets account for 25.8% of the pool balance:

Seacourt Pavilion (7th largest, 8.3%, K-LOC, Matured Non-Performing) is collateralized by a 248,727 sf shopping center located in Toms River, New Jersey, which is approximately eight miles from Seaside Heights. The loan transferred to the special servicer in May 2020 for imminent monetary default caused by a decline in occupancy. A receiver was appointed for the property in November 2022 and the workout strategy is a receivership sale. An appraisal dated November 2024 valued the property at $25.0 million ($101 per sf), which is 37.5% below the $40.0 million ($161 per sf) appraisal value at issuance. The loan carries an ARA of $2.2 million, resulting in a cumulative ASER of $227,097. The loan was deemed non-recoverable by the servicer in September 2024, resulting in cumulative non-recoverable interest of $976,803. KBRA’s analysis resulted in an estimated loss of $4.2 million (15.9% estimated loss severity) on the $26.3 million loan balance, which is based on a KBRA liquidation value of $22.5 million ($90 per sf).
315 South Beverly Drive (8th largest, 6.2%, K-LOC, Matured Non-Performing) is collateralized by the borrower’s leasehold interest in a 68,064 sf Class-B office building located in Beverly Hills, California, approximately 11 miles west of the Los Angeles CBD. The property is subject to a ground lease that has an expiration in 2026 and one 30-year extension option. The loan transferred to the special servicing in February 2024 due to payment default and a property condition default issued by the ground lessor. The workout strategy by the servicer noted a potential forbearance agreement to allow the borrower to resolve outstanding issues with the ground lessor. An appraisal dated September 2024 valued the property at $14.6 million ($215 per sf), which is 51.0% below the $29.8 million ($438 per sf) appraisal value at issuance. An ARA of $7.3 million was effectuated in March 2025, resulting in a cumulative ASER of $144,708. KBRA’s analysis resulted in an estimated loss of $13.5 million (69.2% estimated loss severity) on the $19.6 million loan balance. The estimated loss is based on a KBRA value of $7.3 million ($107 per sf), which is 50.0% of the most recent appraisal value and accounts for risk of reversion of the collateral property to the ground lessor.
Commons at Madera Fair (9th largest, 5.6%, K-LOC, Foreclosure) is collateralized by the borrower’s leasehold interest in a 297,846 sf retail property located in Madera, California, approximately 25 miles northwest of Fresno. The property is subject to a ground lease with the State of California that has an expiration in 2090. The loan transferred to the special servicer in September 2024 due to maturity default and a receiver for the collateral was appointed in November 2024. The workout strategy includes negotiations with the ground lessor for unresolved issues. An appraisal dated October 2024 valued the property at $18.9 million ($63 per sf), which is 32.5% below the $28.0 million ($94 per sf) appraisal value at issuance. The loan carries an ARA of $1.8 million, resulting in a cumulative ASER of $21,794. KBRA’s analysis resulted in an estimated loss of $1.1 million (6.0% estimated loss severity) on the $17.7 million loan balance. The estimated loss is based on a KBRA value of $17.3 million ($58 per sf), which is derived from a KNCF of $1.5 million and a capitalization rate of 8.75%.
Honey Creek III (10th largest, 3.2%, K-LOC, Foreclosure) is collateralized by a 118,072 sf suburban office building located in Milwaukee, Wisconsin, approximately seven miles west of the CBD. The loan transferred to the special servicer in February 2019 due to the borrower’s initial failure to comply with cash management after major tenants went dark and failed to renew at lease expiration. The special servicer’s workout strategy is foreclosure. An appraisal dated October 2024 valued the property at $9.2 million ($78 per sf), which is 47.4% below the $17.5 million ($148 per sf) appraisal value at issuance. The loan carries an ARA of $2.4 million, resulting in a cumulative ASER of $32,633. The loan was deemed non-recoverable by the servicer in May 2025, resulting in cumulative non-recoverable interest of $78,678. KBRA’s analysis resulted in an estimated loss of $4.6 million (45.3% estimated loss severity) on the $10.1 million loan balance. The estimated loss is based on a KBRA liquidation value of $6.2 million ($53 per sf).
West Clinic Portfolio (2.5%, K-LOC) is collateralized by a portfolio of three single-tenant medical office buildings located in rural Tennessee and Mississippi. The loan failed to pay off at its Anticipated Repayment Date in June 2024 and will be cash managed until its final maturity date in June 2031. At this time, KBRA does not estimate a loss on the $7.9 million loan balance, which is being paid down with excess cash flow.

Details concerning the classes with rating changes are as follows:

Class B to A (sf) from AA (sf)
Class C to BB (sf) from A (sf)
Class PEZ to BB (sf) from A (sf)
Class D to C (sf) from CCC (sf)

Rating Sensitivities

Future rating actions will be dependent upon the ongoing assessment of the timing and likelihood of ultimate payment of principal and accrued interest on the rated certificates. The assessment will consider the expected and actual losses on the remaining assets in the transaction, as well as the magnitude and extent of interest shortfalls, if any, on the certificates.

To access ratings and relevant documents, click here.

Related Publication

CMBS: COMM 2014-UBS5 Pre-Sale Report

KBRA Downgrades Four Ratings and Affirms All Other Ratings for COMM 2014-UBS5

Rating Sensitivities

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Methodologies