Citigroup’s upcoming $842.0 million commercial mortgage securities conduit has exposure to all the major property types, with three that represent more than 10.0% of the pool balance: office (35.6%), retail (26.3%) and student housing (16.2%).
Kroll Bond Ratings has assigned preliminary ratings to 17 classes of notes issued by the trust, CGCMT 2014-GC25. The notes are backed by 58 fixed-rate commercial mortgage loans that have balances ranging from $1.6 million to $110.0 million for the largest loan in the pool, Bank of America Plaza (13.1%), a 1.4 million square foot Class-A office building in downtown Los Angeles, California.
The top five loans, which also include Multi-State Retail Portfolio (7.4%), Fenley Office Portfolio (7.1%), The Heights at State College (7.0%), and 6010 Bay Parkway (5.8%), represent 40.4% of the initial pool balance, while the top 10 loans represent 59.7%. The Heights at State College is a 291-unit, 849-bed, Class-A, student housing complex located in State College, Pennsylvania, approximately 1.5 miles south of Pennsylvania State University.
Most of the loans have 10-year terms; two loans or 1.0% of the pool, have five-year terms. The majority of the loans, or 75% of the pool, pay interest only; either for part of their terms (59.8%) or their full terms (15.2%).
Four loans, or 16.5% of the pool, have existing subordinate debt in the form of mezzanine financing. These loans are Fenley Office Portfolio loan (3rd largest loan, 7.1%), The Pinnacle at Bishop’s Woods (8th largest, 3.7%), Stamford Plaza Portfolio (9th largest, 3.6%) and Mustang Ranch (15th largest, 2.1%). Mustang Ranch apartments is a 198-unit, 501-bed, Class-A, garden-style student-housing complex located in Stephenville, Texas, approximately two miles southwest of Tarleton State University (TSU).
In addition, seven loans (18.8%) permit future subordinate debt in the form of mezzanine financing.
The overall pool has a weighted average in-trust loan to value ratio, as calculated by Kroll (KLTV) of 104.6%, which is above the average of the 18 CMBS conduits KBRA rated in the last six months. These transactions had in-trust KLTVs ranging from 94.3% to 106.9%, with an average of 101.0%.
The pool is exposed to highly levered loans. The weighted average LTV for this pool is at 104.6%, above the average of the 18 CMBS conduit KBRA rated in the last six months; 39 loans or 77.7% of the pool have LTVs in excess of 100%.
The chart below illustatrets the size and rating of each tranche.