KBRA Downgrades Two Ratings and Affirms All Other Ratings for BAMLL 2014-520M

KBRA downgrades two classes and affirms all other outstanding ratings for BAMLL 2014-520M, a CMBS SASB transaction. The rating actions follow a surveillance review of the transaction and are driven by a decline in KNCF and KBRA value since issuance. The decline is primarily attributed to a significant increase in operating expenses at the property without a corresponding rise in revenue. In taking these actions, KBRA also considered the likelihood of cash flow stability and the sponsor’s ability to cover contractual debt service payments for the next several years, along with the strong quality of the asset and the experience of the sponsor.

The transaction collateral is a non-recourse, first lien mortgage loan secured by the borrower’s fee simple interest in a 1.0 million sf, Class-A office building. The property is located at 520 Madison Avenue in the Plaza submarket of New York City’s Manhattan borough. The loan has an outstanding balance of $675.0 million ($653 per sf) as of July 2024. The loan’s sponsor is 520 Madison Limited Partnership, an entity controlled by Tishman Speyer.

KBRA analyzed the cash flow for the property utilizing information from the trustee and servicer to determine KNCF. The analysis produced a KNCF of $50.6 million and a KBRA value of $697.5 million ($674 per sf). The resulting in-trust KLTV is 96.8%, which is up from KBRA’s last review (82.0%) and securitization (69.2%). As a result of the decline in KNCF and KBRA value, KBRA has revised the loan’s KPO to Underperform from Perform.

Details for the classes are as follows:

Downgrades:

Affirmations:

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