KBRA Affirms the Rating for JPMCC 2012-C8
20 Aug 2024 | New York
KBRA affirms its outstanding rating of B- (sf) for the Class G of JPMCC 2012-C8, a $47.1 million CMBS conduit transaction. The affirmation follows a surveillance review of the transaction and is based on the performance and expected loss and resulting recovery of the transaction's sole remaining loan, Ashford Office Complex, for which a receiver sale is in the process of being finalized. As of the August 2024 remittance period, the loan remains specially serviced with a performing matured balloon status. The details of the loan are outlined below.
Ashford Office Complex (K-LOC, Underperform, Specially Serviced)
- The $47.1 million loan is collateralized by a 569,986 sf, Class-B office complex located in Houston, Texas, approximately 15 miles west of the city’s CBD. The collateral comprises three multi-tenanted office buildings that were built between 1980 and 1982.
- KBRA maintains the loan's K-LOC designation and KPO of Underperform based on its maturity default in August 2022 and resulting performing matured balloon status with the special servicer. As of December 2023, the property was 57.0% occupied. A receiver was appointed and the property was listed for sale in May 2023. According to updated commentary, the receiver is finalizing a PSA with a buyer.
- The servicer-reported DSCs and occupancies are: 0.88x / 57.0% (FY 2023), 0.54x / 62.0% (FY 2022); at securitization these were 1.48x / 92.8%. An appraisal dated September 2023 valued the property at $32.5 million ($57 per sf), which is 60.8% below the $83.0 million ($146 per sf) value at issuance.
- KBRA estimates a stabilized value of $28.7 million ($50 per sf). Based on the proposed receiver sale, minimal losses would be expected. If the sale is not completed, KBRA’s analysis resulted in an estimated loss of $19.7 million (41.9% estimated loss severity based on a current loan balance of $47.1 million).
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 asset in the transaction, as well as the continuing magnitude and extent of interest shortfalls on the certificates.
To access rating and relevant documents, click here.