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Another Deal Joins CMBS Pipeline

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A $950 million CMBS backed by the fee interest in 1290 Avenue of the Americas called VNDO 2012-6AVE has joined this week's CMBS pipeline. The property is a 2.1 million-square-foot, class A high-rise office building in midtown Manhattan, N.Y., according to a Standard & Poor's presale released last night.

The trust loan balance is comparatively low-leveraged with a 70.8% beginning and ending LTV ratio on a S&P stressed basis and a 47.5% LTV ratio on the appraised value, the rating agency reported. S&P added that the loan has a debt service coverage of 2.67x and benefits from REIT Vornado Realty Trust's strength as a sponsor.

Vornado is one of the biggest and most experienced real estate groups in the country, S&P said. The firm owns and manages a portfolio of more than 100 million square feet., which includes 30 office properties totaling 19.4 million square feet in New York.

S&P noted that 290 Avenue of the Americas is Vornado's second biggest office property in NYC after One Penn Plaza. The property was 95% occupied as of July 2012 and has occupancy rates that have been relatively stable in recent years and currently surpass submarket occupancy levels, the agency noted. It has a prime location in midtown Manhattan's Sixth Avenue/Rockefeller Center submarket and a full block of frontage along Avenue of the Americas  or 6th Avenue, the agency stated.

According to a separate S&P note this morning, this $950 million single-borrower CMBS joins three other transactions this week. The agency expects year-to-date issuance will total roughly $42 billion when all these offerings price.

ASR reported on these other deals last Friday, which include a conduit called GS Mortgage Securities Trust 2012-GCJ9, a General Growth Properties-sponsored single-borrower CMBS called BB-UBS 2012-TFT, and a static cash flow commercial real estate CLO from Redwood Trust's wholly-owned subsidiary Redwood Commercial Mortgage Corp.

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