KBRA Assigns Preliminary Ratings to BX 2024-PAT
28 Feb 2024 | New York
KBRA announces the assignment of preliminary ratings to four classes of BX 2024-PAT, a CMBS single-borrower securitization.
The collateral for the transaction is a $308.5 million floating rate, interest-only mortgage loan. The loan has an initial two-year term with three, one-year extension options and requires monthly interest-only payments based on a SOFR cap of 5.00%. There is also $66.5 million in mezzanine debt in place. The loan is secured by the borrowers’ fee simple interest in Park Avenue Tower, a 36-story, Class-A office tower containing 621,992 sf. The building is located between Park and Madison Avenues and spans the entire block between 55th and 56th Streets in Midtown Manhattan. The building was constructed in 1986 and acquired by Blackstone in 2014. As of January 2024, the property was 87.1% leased to 25 office and retail tenants. The five largest tenants by base rent include PineBridge Investment Holding (11.7% annual base rent), BTIG (9.1%), The Raine Group (6.8%), EOTFR (6.3%), and Cyrus Capital Partners (5.5%). Together, these top five tenants account for 39.4% of total base rent and 37.4% of the total sf.
KBRA’s analysis of the transaction included a detailed evaluation of the property’s cash flows using our U.S. CMBS Property Evaluation Methodology, and the application of our U.S. CMBS Single Borrower & Large Loan Rating Methodology. In addition, KBRA also relied on its Global Structured Finance Counterparty Methodology for assessing counterparty risk in this transaction, and its ESG Global Rating Methodology, to the extent deemed applicable.
The results of our analysis yielded a KBRA net cash flow (KNCF) for the subject of approximately $31.7 million, which is 9.2% below the issuer’s NCF, and a KBRA value of approximately $395.7 million, which is 39.1% below the appraiser’s as-is value. The resulting in-trust KBRA Loan to Value (KLTV) is 78.0%. In our analysis of the transaction, we also reviewed and considered third party engineering, environmental, and appraisal reports, the results of our site inspection of the property, and legal documentation review.
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Note: This press release was updated since its initial publication on February 28, 2024, to reflect the omission of the Methodology for Rating Interest-Only Certificates given the issuer's elimination of the Class X-CP and Class X-EXT certificates after the initial publication of the preliminary press release. These changes did not impact the ratings of any remaining classes. This press release was last updated on March 18, 2024.