Cantor Commercial Real Estate Lending (CCRE) is the first out the gate with a commercial mortgage securitization this year.
The deal, dubbed CFCRE 2016-C3 will offer $702.6 million of notes that are backed by 38 loans, 26 of which are sponsored by CCRE. Societe Generale and Liberty Island Group sponsor the remaining loans in the pool.
It is CCRE’s first CMBS since 2011, according to a presale report published by Kroll Bond Rating Agency.
The largest loan in the pool is sponsored by CCRE and is sized at $168 million and is backed by the suburban LA office complex, Element LA. The property is located in West LA, approximately 14 miles west of the Los Angeles CBD.
Riot Games, the property’s sole occupant, is a video game publisher that is 90% owned by China’s Tencent, one of the largest internet companies in the world. The property serves as Riot Games’ global headquarters pursuant to a 15-year triple-net lease that expires in March 2030, approximately 4.5 years beyond the loan’s maturity. The lease commenced in April 2015 at a contract rent of $43.80 per square feet, which increases by 3.0% per year.
CCRE also contributed the second largest loan in the pool, for $53 million, secured by 123 Townsend, which is located in San Francisco’s CBD. As of November 2015, the property was 84.1% occupied by four tenants, the largest of which are Al Jazeera America, an American news television channel owned by a Middle Eastern multinational multimedia conglomerate; and PayPal,an operator of a worldwide online payment system.
The top five loans also include Empire Mall (7.1%), 215 West 34th Street & 218 West 35th Street (5.7%) and AG Life Time Fitness Portfolio (5.7%).
The pool has a weighted average loan-to-value ratio, as measured by KBRA, of 102.7%. That is slightly above the average of the 25 CMBS conduits KBRA rated over the last six months, at 102.5%. These transactions had in-trust KLTVs ranging from 96.7% to 108.6%.
KBRA assigned preliminary ‘AAA’ ratings to both the super senior and senior tranches of bonds, which benefit from 30% and 24.8% of credit enhancement, respectively.
CCRE’s two prior CMBS were completed in April and December of 2011. It was the sole loan seller for both deals and the sole originator with respect to its first securitization. With respect to the second transaction, CCRE originated 85.1% of the pool and purchased the remaining 14.9% of the pool from Column Financial, Inc.
The firm has acted as a sponsor or mortgage loan seller for a total of 46 fixed- and floating-rate CMBS from 2010 through June 2015.