KBRA Affirms the Rating for JPMCC 2012-C8
3 Jul 2025 | New York
KBRA affirms its outstanding rating of B- (sf) for Class G of JPMCC 2012-C8, a $44.0 million CMBS conduit transaction. The affirmation follows a surveillance review of the transaction and is based on the performance and expected loss and resulting recovery of the transaction's sole remaining loan, Ashford Office Complex, for which the receiver sale and loan assumption was finalized in May 2025, with a modification extending its maturity through April 2030. As of the June 2025 remittance period, the loan remains specially serviced but is current. The details of the loan are outlined below.
Ashford Office Complex (K-LOC, Specially Serviced)
- The $44.0 million loan is collateralized by a 569,986 sf, Class-B office complex in Houston, Texas, approximately 15 miles west of the city’s CBD. The collateral comprises three multi-tenanted office buildings that were built between 1980 and 1982.
- KBRA maintains the loan's K-LOC designation based on its recent modification, history with the special servicer, and decline in performance due to low occupancy. As of May 2025, the loan was officially assumed by LFFP Ashford Portfolio, a Houston-based investment group, in a deal that closed in early 2025 and included a loan extension through April 2030. Once the transfer and modification are fully processed by the lender, the loan is expected to be transferred back to the master servicer. As part of the loan modification, the outstanding debt was restructured into an A/B note format. The newly created A note totals $31.0 million, while the B note amounts to $13.0 million. All outstanding servicer advances including principal and interest, and taxes and insurance were fully repaid.
- The servicer-reported occupancies and DSCs are: 44.5% / 0.74x (FY 2024), 62.0% / 0.54x (FY 2022); at securitization these were 92.8% / 1.48x. An appraisal dated September 2024 valued the property at $26.0 million ($46 per sf), which is 68.6% below the $83.0 million ($146 per sf) value at issuance. As a result, an ARA of $24.0 million was assigned to the loan in November 2024, resulting in a cumulative ASER of $723,193.
- KBRA's analysis resulted in an estimated loss of $21.4 million on a whole loan balance of $44.0 million (48.7% estimated loss severity). The loss is based on a KBRA value of $24.3 million ($43 per sf). The value is derived from a direct capitalization approach using a stabilized KNCF of $2.7 million, which assumes a stabilized occupancy of 60.0%, and a capitalization rate of 9.75%. KBRA also adjusted this value downward by $3.2 million to account for TI/LC costs and income lost during the stabilization period.
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.
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