CENT 2023-CITY, a single-borrower commercial mortgage-backed securities (CMBS) deal, is preparing to sell $925 million in bonds to the securitization market backed by the 1.4 million-square-foot Westfield Century City.
Located about 13 miles west of downtown Los Angeles, Century City is a super-regional mall, the property has three anchor stores and 200 tenants, mostly national retailers, according to ratings analysts from Kroll Bond Rating Agency. Bloomingdale's, Macy's and Nordstrom anchor the property, the rating agency said.
American Multi-Cinema Theaters also operates a 15-screen theater on the property, the rating agency said. Proceeds from the deal will recapitalize the property, fund reserves and return about $906.5 million of equity to the sponsor, KBRA said. The property is has an occupancy rate of 93.8%, KBRA said.
CENT 2023-CITY will feature five classes of notes, with four going to investors and a retained eligible horizontal residual interest, the HRR class. Two classes, the X-CP and X-EXT will issue interest-only certificates. Except for the X-CP tranche, which have a rated final distribution date of October 2024, all classes of notes will have a rated final distribution date of September 2038.
KBRA expects to assign ratings of 'AAA' to the class A notes; the X-CP and C-EXT 'AA-' to the class B notes; and 'A+' to the retained eligible residual interest class, HRR.
KBRA estimates that the property has a net operating income of $101.4 million; a 7.25% cap rate; and a value per collateral square foot of $1,317. Annual debt service comes to $81.3 million, with an in-trust debt service coverage of 1.18x at term Secured Overnight Financing Rate (SOFR).
