Some 109 commercial properties are securing $1.3 billion in certificates that represent the beneficial ownership interest in the Bank 2021-BNK35 trust.
Wells Fargo, Bank of America and Morgan Stanley are underwriters on the transaction, whose senior notes are expected to garner mostly ‘AAA’ ratings from Fitch Ratings.
Several large national banks are sponsoring the deal, including Wells Fargo Bank, National Association; Morgan Stanley Mortgage Capital Holdings; and Bank of America, plus National Cooperative Bank, which specializes in providing banking products and services to cooperatives and other member-driven organizations.
Along with Wells Fargo and Key National Bank, National Cooperative Bank is serving as master servicer and special servicer on the transaction.
There is some confidence in the diversity of the pool, which numbers 76 loans, as the 10 largest loans comprise 41.5% of the pool’s cutoff balance, a much lower concentration than what was represented in the 2021 year-to-date average of 53.5%, and the 56.8% average for 2020, according to Fitch.
In terms of the property types securing the trust’s underlying loans, the concentration has shifted from the office sector to heavier representations for retail and multifamily. Office-secured commercial loans represent 26.9%, lower than the YTD averages for 2021 and 2020 of 40.2% and 41.2%, respectively.
Retail represents 24.9% of the pool by balance, including three of the top 10 and seven of the top 20, according to Fitch. The current deal’s concentration is higher than all year-to-date (YTD) averages since 2019, according to Fitch. Multifamily-secured loans represent 24% of the pool by balance, which also exceeded the YTD averages for 2020 and 2021
Bank 2021-BNK35’s loan concentration index is 290, and lower than the 2021 average of 402 and 440 for 440.
The senior-subordinate capital structure has a fairly low percentage of pari passu participations, 22.3%, and tighter reins on the debt exposure. Only 6% of the pool has subordinated secured debt, and 9.2% of the pool has mezzanine financing.
About 74.8% of the loans in the pool are interest-only, and they typically have had just over a month of seasoning.
