Press Release|CMBS

KBRA Places All Ratings of DBCG 2017-BBG on Watch Downgrade

3 May 2024   |   New York


KBRA places the ratings of all classes of DBCG 2017-BBG, a CMBS SASB transaction, on Watch Downgrade. The Watch action considers the challenges the borrower will have in refinancing the debt given the term of the Bloomberg lease, in light of the weaker office demand, and the potential costs associated with the retention of the tenant or attracting new tenants if Bloomberg does not renew or downsizes its space. The servicer reports that the borrower has indicated they will not be able to refinance the loan by the June 2024 maturity date. If the loan is not paid off and it is transferred to the special servicer, KBRA will monitor the resolution and evaluate any forbearance, modification or extension to assess if rating actions are warranted.

The collateral for the transaction is a non-recourse, first lien mortgage loan with an outstanding balance of $500.0 million as of April 2024. The mortgage loan is secured by the borrower’s fee simple interests in two office condominium units totaling 909,369 sf located at 731 Lexington Avenue, in the Manhattan borough of New York City, New York. The property was constructed in 2004 and consists of a 57-story Class-A, mixed-use tower connected by a curved glass courtyard to a nine-story building that together are referred to as the Bloomberg Building. The loan sponsor is Alexander’s, Inc., a REIT that is engaged in leasing, managing, developing, and redeveloping its properties. Alexander’s, Inc. is managed by Vornado Realty Trust. Alexander’s Management LLC has subcontracted its duties as property manager to Vornado Office, Inc., an affiliate of the borrower.

KBRA analyzed the cash flow for the properties utilizing information from the trustee and servicer to determine KNCF. The analysis produced a KNCF of $50.4 million and a KBRA value of $671.6 million ($738 per sf). The resulting in-trust KLTV is 74.5%, a change from 64.6% at KBRA’s last review and 61.9% at securitization. KBRA identifies the loan as a K-LOC and adjusts the loan’s KPO to Underperform from Perform due to concerns regarding the loan’s upcoming June 2024 maturity.

KBRA will continue to monitor the transaction and loan performance and will seek to resolve or update the Watch Downgrade status within 90 days.

To access rating and relevant documents, click here.

Click here to view the report.

Related Publication



Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

Doc ID: 1004187

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