KBRA Withdraws One Rating, Downgrades Four Ratings and Affirms All Other Ratings for MSCI 2015-MS1
29 Jul 2025 | New York
KBRA downgrades the ratings of four classes of certificates and affirms all other outstanding ratings for MSCI 2015-MS1, a $202.6 million CMBS conduit transaction which has six loans remaining in the pool, five of which (96.8% of the pool balance) have been identified as K-LOCs. In addition, KBRA withdraws the rating of one class following the reduction of its principal balance to zero as reflected in the July 2025 remittance report. The rating actions follow a surveillance review of the transaction and are based on the performance and expected recovery of the remaining loans. In addition, interest shortfalls have increased since our last ratings change in August 2024, and are likely to persist. As of the July 2025 remittance period, three loans (48.6%) have a non-performing matured balloon status with the special servicer and one loan (15.1%) has a performing matured balloon status. The two remaining loans (36.3%) are current, one of which (3.2%) is performing and has a scheduled maturity date in May 2030. The details of the K-LOCs are outlined below.
300 South Riverside Plaza Fee (largest, 33.1%, K-LOC, Current, Watchlist)
- The loan is collateralized by the borrower’s fee interest in the air rights associated with the 2.1-acre parcel of land beneath 300 South Riverside Plaza, a 22-story, 1,1 million-sf office property in the West Loop submarket of downtown Chicago, IL.
- KBRA identified the loan as a K-LOC and maintains its KPO of Underperform based on its failure to pay off at its March 2025 ARD, resulting in a trigger event. Cash management and a cash trap are in the process of being implemented, and a new ARD interest rate is now in effect. According to the loan documents, failure to pay off the loan by its ARD would result in the interest rate increasing to the greater of 8.95% and the treasury rate plus 5.00%. With the new interest rate in effect, the ground lease income will not be sufficient to cover debt service on the loan. The final maturity date is in March 2045.
- The servicer-reported occupancies and DSCs are: 88.0% / 1.79x (FY 2024), 88.0% / 1.74x (FY 2023); at closing these were 100% / 1.48x. As of July 2025, the loan is current on payments and is not specially serviced. However, in the even of a default, KBRA estimates that it could experience a loss given default of $4.8 million on a whole loan balance of $167.0 million (7.2% estimated loss severity). The loss is based on a KBRA liquidation value of $155.3 million ($147 per sf). The value considers a distressed non-stabilized disposition of the asset as well as comparable market values.
Waterfront at Port Chester (2nd largest, 26.4%, K-LOC, Specially Serviced, Non-Performing Matured Balloon)
- The loan is collateralized by a 349,743 sf, anchored retail center located in Port Chester, New York, approximately 33 miles northwest of Midtown Manhattan.
- KBRA maintains the loan's K-LOC designation and KPO of Underperform based on the loan's non-performing matured balloon status with the special servicer after failing to pay off at its April 2025 maturity date. In addition, property performance has suffered due to declining occupancy and increased expenses. Bed Bath and Beyond (10.3% of collateral sf) vacated in 2022, and Crunch Fitness (6.7%) vacated since last review.
- The servicer-reported occupancies and DSCs are: 78.0% / 1.21x (TTM March 2025), 87.0% / 0.63x (FY 2023); at closing these were 95.2% / 1.66x. The subject was reappraised for $106.0 million ($303 per sf) in September 2020, which is 40.5% below the $178.0 million ($509 per sf) value at issuance. KBRA's analysis resulted in an estimated loss of $35.5 million on a whole loan balance of $133.5 million (66.3% estimated loss severity). The loss is based on a KBRA liquidation value of $51.2 million (150 per sf). The value is derived from a direct capitalization approach using a KNCF of $4.4 million and a capitalization rate of 8.50%.
Hilton Garden Inn W 54th Street (3rd largest, 19.7%, K-LOC, Specially Serviced, Non-Performing Matured Balloon)
- The loan is collateralized by a 34-story, 401-key select-service hotel located in Midtown Manhattan.
- KBRA identified the loan as a K-LOC and revised the KPO to Underperform from Perform based on the the loan's non-performing matured balloon status with the special servicer after failing to pay off at its March 2025 maturity. According to special servicer commentary, the borrower has requested a maturity extension due to its inability to obtain refinancing, noting challenges stemming from civil litigation affecting the property.
- The servicer-reported occupancies and DSCs are: 93.0% / 2.46x ( FY 2024), 92.0% / 2.43x (FY 2023); at closing these were 94.6% / 2.64x. The subject was reappraised for $206.6 million ($515,212 per key) in April 2025, a 17.7% decline from $251.0 million ($625,935 per key) at issuance. At this time, KBRA does not estimate a loss on this asset.
Premier Apartments (4th largest, 15.1%, K-LOC, Non-Specially Serviced, Performing Matured Balloon)
- The loan is collateralized by a 160-unit, Class-A, high-rise multifamily complex located in downtown Silver Spring, Maryland, approximately seven miles north of the Washington D.C. CBD.
- KBRA maintains the loan's K-LOC designation and KPO of Underperform based on its failure to pay off at its July 2025 maturity date. In addition, the property has suffered from a low DSC, largely due to increased operating expenses. Recent servicer commentary noted that the property was being marketed for sale at an undisclosed price, and is now under contract and in the due diligence period.
- The servicer-reported occupancies and DSCs are: 98.0% / 1.03x (YTD March 2025), 96.0% / 0.97x (FY 2024); at closing these were 95.6% / 1.15x. At this time, KBRA does not estimate a loss on this asset.
Stony Island Retail Center (6th largest, 2.5%, K-LOC, Specially Serviced, Non-Performing Matured Balloon)
- The loan is collateralized by a 29,332 sf retail property in Chicago, Illinois.
- KBRA maintains the loan's K-LOC designation and KPO of Underperform based on its non-performing matured balloon status with the special servicer after failing to pay off at its May 2025 maturity. In addition, the subject's largest tenant, Dollar Tree (55.0% of collateral sf) vacated the subject at its May 2025 lease expiration, dropping physical occupancy to 45.0%. According to special servicer commentary, the borrower is seeking a maturity extension.
- The servicer-reported occupancies and DSCs are: NA / 1.88x ( FY 2024), NA / 1.97x ( FY 2022); at closing these were 100% / 1.33x. At this time, KBRA does not estimate a loss on this asset.
Details concerning the ratings adjustments are as follows:
- Class A-S to WR (sf) from AAA (sf)
- Class C to BB (sf) from A- (sf)
- Class PST to BB (sf) from A- (sf)
- Class D to BB- (sf) from BB (sf)
- Class E to B- (sf) from B (sf)
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.
To access ratings and relevant documents, click here.