The NJ Trust 2023-GSP is preparing to issue $425 million in commercial mortgage-backed securities, secured by a $525 million non-recourse, first lien mortgage loan originated by Goldman Sachs Bank USA, German American Capital Corporation, and Natixis Real Estate Capital.
The loan itself—and then the CMBS notes—will be repaid from revenue from a 1.2 million square-foot portion of Westfield Garden State Plaza, a 2.1 million square-foot mall located in Paramus, New Jersey. Tenants including Macy's, Nordstrom, Zara, and Apple, according to ratings analysts from Kroll Bond Rating Agency and Fitch Ratings.
The deal is slated to close on December 22.
The sponsor, a joint venture between Unibail-Rodamco-Westfield and affiliates of the Prudential Assurance Company, has invested $250 million since 2017 on common area improvements at the mall, the rating agencies said. Reflecting recent trends in repurposing vacant retail spaces, the sponsor plans to invest additional capital to reconfigure the recently purchased Lord & Taylor lot and construct a residential mixed-use development of 550 units.
Proceeds from the financing, along with $4 million of sponsor cash equity, will be used to refinance a $425 million portion of $525 million of existing debt that was provided by RBS 2013-GSP. The remaining $100 million of non-controlling notes will not be part of the trust and are expected to be contributed to one or more future securitizations, ratings analysts said.
The fixed-rate loan has a five-year term and requires monthly interest-only payments based on an estimated coupon of 6.75%. The loan is secured by the borrower's fee simple interest. As of September 2023, the space serving as collateral was 81.3% leased to over 300 unique tenants.
The $525 million total mortgage loan ($255 per square foot) has a Fitch Ratings stressed debt service coverage ratio and loan-to-value ratio of 2.28x and 39.4%, respectively. Fitch says that it has assigned Westfield Garden State Plaza a property quality grade of A-minus.
Goldman Sachs Bank USA, German American Capital Corporation and Natixis Real Estate Capital sold the loans into the trust, and Berkadia Commercial Mortgage is on the transaction as master servicer.
Fitch has rated the class A notes, which have a legal final maturity of January 2039 and are valued at $403.5 million, as AAA. It has rated the interest-only X certificates, which have a notional value of $425 million and a legal final maturity of January 2039, at AA. It has rated the HRR notes, which are valued at $21.5 million and have a legal final maturity of January 2039, at AA.
KBRA has rated the Class A notes as AAA, the X certificates as AAA, and the HRR notes as AAA.
