KBRA Downgrades Five Ratings and Affirms All Other Ratings for CG-CCRE 2014-FL1

KBRA downgrades the ratings of five classes of certificates and affirms all other outstanding ratings for CG-CCRE 2014-FL1, a CMBS transaction. Six of the ratings are simultaneously removed from Watch Downgrade (DN) where they were placed on March 5, 2025, pending the outcome of a modification and extension of the loan which was being negotiated between the borrower and special servicer. While the outcome of the modification is pending, the rating changes reflect a recent reduction in the collateral property’s appraised value, a continuing decline in KNCF, and the potential for interest shortfalls while the special servicer continues to work to resolve the loan. We also considered the potential for principal losses and the resulting recoveries under a liquidation scenario.

The transaction collateral is the borrower’s fee simple interest in 645,179 sf of a 1.4 million sf retail complex located in Lombard, Illinois, approximately 19 miles west of the Chicago CBD. The full development consists of a two-story enclosed super-regional mall (Yorktown Mall), an adjacent open-air lifestyle center (Shops on Butterfield), a retail strip center (The Plaza Shops), 10 outparcels, and a 17-screen AMC Theater. The loan has an outstanding aggregate principal balance of $120.5 million, consisting of a pooled component balance of $107.4 million and $13.0 million of non-pooled junior participations. The loan’s sponsor is Pacific Retail Capital Partners. In March 2024, the borrower requested that the loan be extended through a modification which remains under review and may include a paydown of the loan. According to the special servicer, the modification is expected to be finalized within the next 30 to 60 days.

KBRA analyzed the cash flow for the property utilizing information from the trustee and servicer to determine KNCF. The analysis produced a KNCF and KBRA value of $7.2 million and $57.4 million ($89 per sf). The resulting in-trust KLTV is 209.9%, a change from 161.6% at KBRA’s last review and 81.8% at issuance. According to the April 2025 remittance, a new appraisal of the collateral property dated October 2024 valued the asset at $60.4 million, which represents a 65.5% decrease from the 2019 value of $175.3 million. The servicer has also reported that a corresponding ARA is in process. Both the new appraised value and KBRA’s value imply that the trust has a high risk of incurring losses upon final disposition of the asset. KBRA maintains the loan’s K-LOC designation and KPO of Underperform due to a decline in performance and the sponsor’s inability to refinance the loan at its extended maturity date in March 2024.

Details concerning the classes with ratings changes are as follows:

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