A $350 million commercial mortgage backed security (CMBS) secured by a building with the U.S. Postal Service as the main tenant is coming down the pipeline, according to a release by Standard & Poor’s.
The underlying loan is set to mature in 2021. The borrower of the loan is an indirectly majority-owned unit of Vornado Realty.
The Class A notes, rated AAA (sf),’ are sized at $187 million and have a loan-to-value ratio of 45%. The loan backing the deal has an LTV of 84.2%, according to S&P’s valuation. The agency considers this a “moderate” degree of leverage.
Based on S&P’s net cash flow for the Class A notes, the debt yield is 14.3%. The deal is scheduled to close on June 23, 2014.
The property securing the mortgage loan is a roughly 1.3-million-square-foot office building in Midtown Manhattan. Built in 1968, the 32-story building has gone through about $52 million in capital expenditures since 2010.
Presently, the mortgage collateral is 99.8% leased and has historically had a high rate of occupancy. The US Postal Service takes up 36.7% — or 492,375 square feet — of the collateral’s net rentable area. The USPS has been there since the building opened its doors in 1968 and holds a lease that extends to 2038.
The originator is Ladder Capital Commercial Mortgage Securities. The master servicer is Wells Fargo Bank and the special servicer Rialto Capital Advisors.
