Citigroup is marketing a $917 million commercial mortgage securitization, according to rating agency presale reports.
The deal, CGCMT 2016-P5, is backed by 49 fixed-rate loans secured by 73 properties. The loans have principal balances ranging from $2.8 million to $65 million for the largest loan in the pool, Hyatt Regency Jersey City (representing 7.1% of the pool), a 351-key, full-service hotel located in Jersey City, New Jersey.
The top five loans, which also include Plaza America I & II (6.5%), One Bethesda Center (5.6%), Easton Town Center (4.9%), and College Boulevard Portfolio (4.4%), represent 28.5% of the initial pool balance, while the top 10 loans represent 48.4%.
They were contributed by four lenders: Citigroup Global Markets Realty Corp. (22 loans, 35.4%), Barclays Bank PLC (7 loans, 25.0%), Starwood Mortgage Funding V LLC (11 loans, 21.5%), and Principal Commercial Capital (8 loans, 13.7%).
The deal has slightly less leverage than those of recent multiborrower transactions rated by Fitch Ratings. The overall loan-to-value ratio, as measured by Fitch, is 105.8%. However, two loans, Easton Town Center and Vertex Pharmaceuticals, have investment grade characteristics that help bring down the overall leverage; excluding these two loans, the deal’s LTV rises to 110.4%.
Kroll Bond Rating Agency puts the weighted average LTV lower, at 98.4%, which it says compares favorably to 2014 and 2015 vintage deals. However, the figure is above the average for KBRA conduits rated over the last six months of 97.2%.
Both Fitch and Kroll calculate LTV using what they view as an average value for properties across the credit cycle. This can be lower than the properties’ current valuations.