Press Release|CMBS
KBRA Downgrades Two Ratings and Affirms All Other Ratings for JPMBB 2014-C26
10 Oct 2025 | New York
KBRA downgrades the ratings of two classes and affirms all other outstanding ratings for JPMBB 2014-C26, a $291.1 million CMBS conduit transaction. The rating actions follow a surveillance review of the transaction and are based on the performance and expected recovery of the transaction's six remaining assets, all of which were identified as K-LOCs. These include two assets (28.8%) that are in foreclosure and one (15.9%) that is REO. The details of all remaining assets are outlined below.
500 Fifth Avenue (largest, 33.8%, K-LOC, Watchlist)
- The loan is collateralized by a 712,791 sf, Class-B office property located in Midtown Manhattan, New York City. The 59-story building was developed on a 0.5-acre site in 1931 and designated a New York City Landmark in 2010.
- KBRA maintains the loan's K-LOC designation primarily due to its prior status with the special servicer and subsequent loan modification. The loan was returned to the master servicer in June 2025, following a maturity extension pushing loan maturity to April 2027. As a result, the borrower was required to contribute $10.6 million in equity and a principle curtailment of $1.6 million was allocated to the trust. According to the July 2025 rent roll, the property was 81.9% leased, compared to 81.1% at last review and 92.3% at securitization. Lease rollover through YE 2026 represents 11.4% of base rent across 22 leases, seven of which are MTM (1.2% of base rent).
- The servicer reported occupancies and DSCs are: N/A / 1.52x (YTD March 2025), 79.7% / 2.56x (FY 2024); at closing these were 92.3% / 3.37x. At this time, KBRA does not estimate a loss on this asset.
1515 Market (2nd largest, 19.7%, K-LOC, Foreclosure)
- The loan is collateralized by a 502,213 sf, Class-A office building located in Philadelphia, Pennsylvania, within the city's CBD.
- KBRA maintains the asset's K-LOC designation due to the loan's transfer to the special servicer in December 2023 when the borrower was unable to secure refinancing and had requested that the loan be transferred prior to the loan's maturity date in order to secure an extension. In September 2025, the borrower was granted a two-year extension with an additional one-year option to allow the borrower time to complete minor renovations and attempt to reposition the asset. Further details regarding the extension agreement are unavailable at this time.
- An appraisal dated April 2025 valued the property at $28.0 million ($56 per sf), which is 67.8% below the $87.0 million ($173 per sf) value at issuance. The servicer reported occupancies and DSCs are: 73.3% / 0.93x (YTD September 2024), 73.9% / 0.95x (FY 2023); at closing these were 88.7% / 1.50x. KBRA’s analysis resulted in an estimated loss of $32.1 million (56.1% estimated loss severity). The loss is based on a KBRA liquidation value of $27.6 million ($55 per sf), which is derived from a direct capitalization approach using a KNCF of $3.2 million and a capitalization rate of 11.50%.
Heron Lakes (3rd largest, 15.9%, K-LOC, REO)
- The asset is a 314,504 sf, Class-B suburban office complex comprised of seven office buildings located in Houston,Texas, approximately 13 miles northwest of the city’s CBD.
- KBRA maintains the asset's K-LOC designation based on its REO status. The loan transferred to the special servicer in January 2019 after the borrower filed for Chapter 11 bankruptcy. A receiver was appointed in December 2019 and the collateral became REO in February 2020. As of the September 2025 remittance period, three buildings (100,125 sf) have been sold, while leasing efforts to stabilize the collateral continue, and the remaining four buildings (215,451 sf) are being marketed for sale in phases throughout 2025. The asset carries $10.1 million in non-recoverable advances, which has been applied as a loss to the NR Class certificate.
- An appraisal dated November 2024 valued the property at $18.5 million ($59 per sf), which is 73.9% below the $71.0 million ($226 per sf) value at issuance. As a result, the asset carries an ARA of $30.7 million, resulting in a cumulative ASER of $1.6 million. The servicer reported occupancies and DSCs are: 52.3% / 0.60x (YTD September 2023), N/ A / -0.05x (FY 2022), 57.9% / 0.11x (FY 2021); at closing these were 98.2% / 1.36x. KBRA’s analysis resulted in an estimated loss of $41.3 million (89.4% estimated loss severity) which is based on a KBRA liquidation value of $12.6 million ($59 per sf) which is consistent with the most recent appraisal on a sf basis.
St. Louis Premium Outlets (4th largest, 14.2%, K-LOC, Specially Serviced)
- The loan is collateralized by a 351,462 sf, open-air outlet retail center located in Chesterfield, Missouri, approximately 24 miles west of the St. Louis CBD. The property was developed in 2013 by the sponsor, Simon Property Group.
- KBRA identified the loan as a K-LOC and maintains the loan's KPO of Underperform due to the loan's status with the special servicer after failing to pay off at its October 2024 maturity date. In September 2025, the borrower was granted a two-year loan extension through October 2027 and required the borrower to remit a $750,000 curtailment to the trust. According to the December 2024 rent roll, the property was 86.8% leased, which is in line with last review and compares to 100.0% at securitization. Rollover risk through YE 2026, including MTM leases, represents 30.6% of total base rent in aggregate and are spread across 31 leases, of which. No lease expiring throughout this period represents more than 3.7% of base rent and the collateral has a history operating with a high volume of MTM leases.
- The servicer reported occupancies and DSCs are: 88.0% / 1.70x (YTD March 2025), 87.0% / 1.67x (FY 2024); at closing these were 100% / 1.41x. At this time, KBRA does not estimate a loss on this asset.
The two remaining assets account for 16.4% of the pool balance:
- International Corporate Center (5th largest, 9.2%, Foreclosure) is collateralized by a 168,585 sf, Class-A, three-story office complex, located in Rye, New York, approximately 25 miles northeast of Manhattan. KBRA maintains the loan's K-LOC designation due to its failure to payoff at its December 2024 maturity date and subsequent foreclosure status. According to the special servicer, talks of a loan modification between the borrower and special servicer had stalled due to an ongoing dispute between the master lessee and the borrower. Consequently, a foreclosure complaint was filed, and the special servicer is seeking the appointment of a receiver. An updated appraisal dated May 2025 valued the asset at $15.9 million ($94 per sf) which represents a 61.2% decline from issuance. KBRA's analysis resulted in an estimated loss of $14.3 million (53.7% estimated loss severity) on the loan balance of $26.6 million. The loss is based on a value of $14.7 million ($89 per sf) and was derived from a direct capitalization approach using a KNCF of $1.7 million and a capitalization rate of 9.75%, and adjusted to account for income lost during the stabilization period.
- Marriott Fort Lauderdale (6th largest, 7.3%, K-LOC) is collateralized by a 315-key, full-service hotel in Fort Lauderdale, Florida, approximately three miles southwest of Pompano Beach. KBRA maintains the loan's K-LOC designation primarily due to its prior status with the special servicer and subsequent loan modification. In June 2025, the loan was modified, extending loan maturity to December 2026 with one, 12-month extension option. Additionally, the loan was converted to interest-only in January 2025. An updated appraisal dated July 2024 valued the asset at $28.0 million ($88,889 per key) which represents a 32.0% decline from issuance. KBRA's analysis resulted in an estimated loss of $3.8 million (17.8% estimated loss severity) on the loan balance of $21.2 million. The loss is based on a value of $19.0 million ($60,296 per key) and was derived from a direct capitalization approach using a KNCF of $2.0 million and a capitalization rate of 10.75%
Details concerning the classes with ratings changes are as follows:
- Class D to B- (sf) from B (sf)
- Class E to C (sf) from CC (sf)
Details concerning the ratings affirmations are as follows:
- Class B at AA (sf)
- Class C at A (sf)
- Class EC at A (sf)
- Class F at C (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.