KBRA Affirms All Ratings for NCMF 2022-MFP
27 Sep 2024 | New York
KBRA affirms its outstanding ratings for NCMF 2022-MFP, a $346.0 million CMBS single borrower transaction. The affirmations follow a surveillance review of the transaction, which has exhibited a slight decline in performance since securitization. However the magnitude of the decline does not warrant rating adjustments at this time. Simultaneously, KBRA removes the Watch Developing status from all classes which were placed in March 2024 after the borrower failed to extend or pay off the loan.
The collateral for the transaction is a $346.0 million non-recourse, first lien mortgage loan. The loan is secured by the borrowers’ fee simple interests in 11 garden-style, workforce housing multifamily properties and one student housing property totaling 2,746 units located across six states. The non-recourse carve out guarantors are Nitya Capital, LLC and Swapnil Agarwal. The properties are managed by Karya Property Management, an affiliate of the sponsor. The borrower failed to either repay the loan or exercise its first extension option by the March 8, 2024 maturity date. The special servicer executed a forbearance agreement that extended the initial maturity to July 2024 and recently executed a second forbearance extending the maturity to December 2024, as the borrower is working on refinancing several collateral properties. Unlike the first forbearance, an interest rate cap of 1.75% has been obtained under the second forbearance running from August 2024 through December 31, 2024. If the borrower continues to be unable or unwilling to pay off the loan as of December 31, 2024 KBRA will revisit the transaction performance and take appropriate rating actions as needed.
KBRA analyzed the cash flow for the properties utilizing information from the trustee and servicer to determine KNCF.The analysis produced a KNCF of $21.0 million and a KBRA value of $261.8 million ($95,340 per unit). The resulting intrust KLTV is 132.2%, compared to 129.2% at last review and 124.3% at securitization. KBRA revised its KPO to Underperform from Perform due to the forbearance and refinance risk.
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