KBRA Maintains Watch Developing Placements on All Ratings of NCMF 2022-MFP
27 Jun 2024 | New York
KBRA maintains the Watch Developing placements for all ratings of NCMF 2022-MFP, a $346.0 million CMBS SASB transaction. The Watch action is primarily driven by the loan's transfer to the special servicer following the borrower’s failure to either repay the loan or exercise its first extension option by the March 8, 2024 maturity date. The loan is reported as performing matured balloon. According to special servicer commentary, the borrower intends to repay the loan in the near term. The special servicer executed a forbearance agreement that will expire in early July as the borrower is working on refinancing several collateral properties.
The floating-rate loan had a two-year initial term with three one-year extension options and requires monthly interest-only payments. The borrower had entered into an interest rate cap agreement with a strike rate of 1.75% for the initial term of the loan. A replacement interest rate cap agreement is required to be obtained for the duration of the extended term with a strike price equal to the lesser of (a) a strike rate that will cause the DSCR to be equal to or in excess of 1.20x and (b) 1.75%. A new interest rate cap agreement has not been provided by the borrower.
The loan is secured by the borrower’s fee simple interests in 11 workforce housing multifamily properties and one student housing property totaling 2,746 units. The properties range in size from 52 units to 773 units and were built between 1929 and 2021, and are on average 49 years old. The properties are in six states across six MSAs: Indianapolis (41.3% of ALA), Dallas - Fort Worth (19.9%), Nashville (14.5%), Boone, North Caroline (11.6%), Las Vegas (9.6%), and Los Angeles (3.2%). For the nine months ended September 2023, the loan's DSC was 1.13x and the portfolio was 89.0% occupied. At securitization the DSC and occupancy were 1.66x and 95.0%.
KBRA will continue to monitor the transaction and loan performance and will seek to resolve or update the Watch Developing status within 90 days.
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