BBCMS 2022-C17 is preparing to complete a $905 million CMBS conduit securitization, a transaction that will be secured by 53 loans and 119 commercial properties, mostly office and retail.
Out of the 53 loans in the collateral pool on 119 properties, 11 are portfolio loans representing 29.3% of the pool. Those portfolio loans include four top-10 loans—Chase Street & Cardone, Hamilton Portfolio, A&R Hospitality Portfolio, and Autokiniton Industrial Portfolio, according to Kroll Bond Rating Agency.
Loans secured by multiple properties, or portfolio loans, gives each respective borrower the incentive to keep payments current on the loan should one or more properties underperform, KBRA said. Should a foreclosure happen, the trust could reduce loss severity by realizing proceeds from multiple properties to mitigate potential losses, according to KBRA.
Certain loans in the deal are split loans governed by co-lender agreements, KBRA said, amounting to 38.6% of the pool.
The six classes of notes in the class A series will benefit from credit support of about 30%, according to Moody's Investors Service, which plans to assign ratings of 'Aaa' on the A-1 through X-A notes.
For its part, KBRA intends to assign 'AAA' ratings to the A-1 through A-S notes, the rating agency said.
Office (26.4%) and retail (29.8%) properties comprise the majority of the pool, with multifamily, lodging and industrial comprising 10.3%, 14.3% and 12.3% of the deal, respectively. Overall, single-tenant loans represent about 23% of the pool.
The loan pool appears to be concentrated in some respects. The largest loan in the collateral pool accounts for about 5.2% of the pool, while the largest two loans account for 10.2%. The largest 15 loans in the pool account for a majority of the pool, 56.2%, while the top 10 loans account for 42.3% of the pool balance.
Among the top 10 loans in the pool is one financing the Park West Village, which was 94.7% leased as of July 2022. This is comprised of three high-rise multifamily complexes with a total of 850 units located in Manhattan's Upper West Side neighborhood. Some 418 units are subject to rent stabilization. At closing, the loan's respective sponsor, will use a $7.9 million renovation reserve to renovate 325 units. During the reconstruction 55 of the units will be combined with adjacent units to create 27 larger units.
