KBRA Assigns Preliminary Ratings to BBCMS 2026-5C42
28 May 2026 | New York
KBRA is pleased to announce the assignment of preliminary ratings to 14 classes of BBCMS 2026-5C42, a $633.5 million CMBS conduit transaction collateralized by 37 commercial mortgage loans secured by 58 properties. The collateral properties are located throughout 15 MSAs, of which the three largest are New York (17.0% of pool balance), Detroit (12.5%), and Orange County (9.8%). The pool’s three largest property type exposures are industrial (26.7%), lodging (19.1%), and mixed-use (14.3%). The largest loan in the pool, 215 Coles Street (9.5%), is a 760,000 sf, 10-story industrial building located in Jersey City, New Jersey, less than three miles from Lower Manhattan. The five largest loans, which also include Columbia Center (8.7%), The 840 Building (7.1%), Marriott Savannah Riverfront (6.3%), and ONX Industrial Campus (5.2%), represent 36.8% of the initial pool balance, while the top 10 loans represent 56.0%.
KBRA’s analysis of the transaction incorporated our multi-borrower rating process that begins with our analysts’ evaluation of the underlying collateral properties’ financial and operating performance, which determines KBRA’s estimate of sustainable net cash flow (KNCF) and KBRA value using our North American CMBS Property Evaluation Methodology. On a weighted average basis, the pool’s KNCF was 12.2% less than the issuer's cash flow. KBRA capitalization rates were applied to each asset’s KNCF to derive values that were 39.3% less than third party appraisal values. The pool has an in-trust KLTV of 89.9% and an all-in KLTV of 89.9%. The process also deploys rent and occupancy stresses, probability of default regressions, and loss given default calculations to determine losses for each loan which, in conjunction with pool concentration and other relevant factors, are used to assign our credit ratings.
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