Deutsche Bank, Jefferies, and UBS are marketing $1.35 billion in commercial mortgage bonds, according to a regulatory filing. Morningstar has assigned preliminary ratings to the conduit deal.
The transaction, called COMM 2015-1, is collateralized by 80 loans that are secured by 147 commercial real estate properties worth approximately $1.46 billion. The loans are underwritten by Natixis Real Estate and Drexel Hamilton.
Wells Fargo is serving as the master servicer of the deal, while RIALTO is the special servicer and Park Bridge is the operating advisor.
The senior tranches of class A notes have been assigned AAA’ ratings from Morningstar and benefit from 30% credit enhancement (CE). At the subordinate level, the class B notes rated AA-,’ class C notes rated A-,’ and class D notes rated BBB-,’ benefit from 17.375%, 12.375%, and 7.419% credit enhancement, respectively.
By property type, properties securing the deal have the highest exposures to office buildings (36.2%), hospitality facilities (18%), and retail stores (18%). The high exposure to naturally volatile office buildings and hotel properties is considered a key risk of the transaction. Multifamily properties and retail stores are generally considered to be less risky. The states with the highest concentration of properties are California (29%), Florida (9.1%), and Texas (8.4%).
The largest loans in the pool, 9000 Sunset, Princeton GSA Portfolio, and Ocean Key Resort and Spa, represent 8.5%, 7.8%, and 5.1% of the portfolio balance, respectively. The loan portfolio is relatively granular, with the ten largest loans representing 38.7% of the pool and no other loan representing more than 3.3% of the portfolio balance. The vast distribution of the loans serves as a strength of the deal.
Another key strength of COMM 2015-PC1 is the low to moderate weighted average (WA) loan-to-value ratio (LTV) calculated by Morningstar. Loans in the pool have a beginning WA LTV of 90.9% and ending WA LTV of 79.9%, which is low in comparison to previously rated CMBS transactions.
The deal is may price later this week, and is expected to settle July 14.
