CMBS

After weathering a barrage of industry shifts, weaker office fundamentals also mean special servicing has increased on office CMBS pools.

With uncertain outlooks surrounding the economy and interests, investment managers looking for safer fixed-income investments are finding underpriced assets.

The issuer underwriting (UW) rent for data center space is about 17.9% below the sponsor's market rent estimates, leaving potential opportunities for further rent revenue increases.

KBRA estimates that the property has a net operating income of $101.4 million; a 7.25% cap rate, and an in-trust debt service coverage of 1.18x at term Secured Overnight Financing Rate (SOFR).

PHH Mortgage will service all of the loans in the pool, for an annual fee of 0.20%. For its part, Velocity will act as special servicer on loans that become delinquent for more than 60 days or default.

With 24 sponsors, the collateral pool comprises mostly full-term interest-only loans, 97.4%. Otherwise, amortizing balloons make up the next highest percentage of loans, at 2.6%.

Unibail-Rodamco-Westfield is offering to exchange any and all of its €1.25 billion ($1.37 billion) notes, which currently pay a coupon of 2.125%, with a new bond paying 7.25% and a cash amount.

Self-storage properties, the makeup of the collateral portfolio, were the only real estate type that generated returns in the black during the global financial crisis in 2008.

Multifamily properties account for the vast majority of the initial pool balance, at 86.2%, DBRS said, which is a plus because multifamily properties typically have lower default rates than other CMBS property types.

Miracle Mile Shops have significant tenant lease rollover, with 53.7% of the mall's net rentable area (NRA) and 66.1% of its base rent scheduled to roll over during the five-year term of the notes.