The BX 2026-ALOHA is coming to the capital markets to sell $1.2 billion in commercial mortgage-backed securities (CMBS), backed by a non-recourse, first lien mortgage.
Wells Fargo Bank, National Association, Citi Real Estate Funding and German American Capital, are among the several banks expected to extend the loan on the single-borrower transaction, according to Kroll Bond Rating Agency.
The classes A, B and C notes have a rated final distribution date of April 2043. KBRA assigns ratings of AAA, AA-, and A- to classes A, B and C, respectively.
Fee simple interests in 36 properties and the borrower's pledge of equity in the owner of the leasehold interest for one property. The portfolio that secures the notes consists of 20 retail assets, 15 industrial assets, and two office assets, which represent 75.6%, 22.3% and 2.1% of the pool, respectively.
As of March 2026, the portfolio was 92.7% leased to a diversified group of more than 670 unique tenants. Most of the properties have a needs-based tenancy that serves the local community, with grocery store anchors. The tenant mix includes 16 high-quality, credit worthy tenants that account for 16.7% of retail base rent and 16.6% of total retail square footage. Safeway is the largest tenant, which accounts for 7.0% of the portfolio base rent.
The mortgage's proceeds, with $518 million of cash equity contributed by the sponsor, will also be used to buy Hawaii-based Alexander & Baldwin, a commercial property REIT, and its portfolio properties.
BX 2026-ALOHA has significant leverage, with an above average KBRA in-trust loan-to-value (KLTV) ratio of 101.3%.
The issuer has a net cash flow of $113.2 million, a value per square foot of $468 and a capitalization rate of 6.32%. The deal also has a debt yield of 9.1%.
