Goldman Sachs and Citigroup each have filed for new commercial-backed mortgage securitizations this week.

Goldman’s GS Mortgage Securities Trust 2016-GS2 is a $750.6 million notes structure made up predominantly of AAA-rated Class A notes (by Fitch Ratings) with 30% credit enhancement. The pool consists of 37 loans secured by 115 properties (mostly retail, multifamily apartments and hospitality), with an average loan size of $20.3 million – in line with Goldman’s first ABS this year (GSMS 2016-GS1) which had an average size of $21 million per loan.

A plurality of the properties (42.2%) are higher quality ‘B+’ rated properties, with only 3.4% of the pool rated ‘C+’ quality or below by Fitch.

It’s a top heavy structure with 10 loans comprising 62.7% of the pool balance, and top 10 sponsors making of 75.7% of the collateral.

The largest loan in the GMBS 2016-GS2 pool is the $75 million mortgage for Veritas Multifamily 1, a collection of San Francisco apartment rental units appraised at $923 million. The loan is part of a $480 million whole-loan structure that was paired with $196.5 million in three mezzanine loans to refinance $523.2 million in existing Veritas debt, pay upfront reserves of $21.3 million and distribute $124.6 million in principal equity to the owners.

The largest loans provide a higher-than-average concentration compared to other U.S. multi-borrower deals in 2015 (49.3%) and 2016 (54.8% year-to-date), according to Fitch. The collateral pool also has 40.6% of the underlying loans (totaling $304.4 million) who have additional debt obligations outside of the mortgage.

Goldman also placed 17 full interest-only loans that make up 62.5% of the pool, which is also far above averages of other deals rated by Fitch in its presale. Another 14.23% are partial interest-only.

The Class A notes are divided between an $11.7 million A-1 tranche; an A-2 slice for $137.6 million; A-3 notes totaling $165 million A-3; A-4 notes amounting to $187.98 million A-4 notes, and a Class A-AB structure of $23.16 million.  

The percentage of the pool with a debt service coverage ratio below 1x rose to 29.2% from 9.2% in Goldman’s last CMBS securitization. The aggregate cash flow in the pool was $68.14 million, an 11.7% variance from the issuer’s cash flow estimate of $77.1 million.

Goldman’s deal is being underwritten by itself, Drexel Hamilton and Academy Securities.

Notes from the whole-loan structure are part of other Goldman securitizations, such as GS Mortgage Securities Trust 2016-RENT, or to be included in future collateral pools.

Citi’s new deal, filed Wednesday with the Securities and Exchange Commission, is a similarly sized $755 million transaction composed of 13 classes of notes secured by retail, office, hospitality and storage property loans.

The super-senior Class A notes in Citigroup Commercial Mortgage Trust 2016-C1 – divided among five tranches – carry a 30% credit enhancement and preliminary ‘AAA’ structured-finance ratings from Fitch. The Class A-1 notes total $36.2 million; the A-2 notes $15 million; the A-3 notes $185 million; the A-4 notes $237.5 million, and the A-AB notes $55.26 million.

A junior Class A-S tranche, rated ‘AA’ by Fitch, is sized at $38.7 million, and has CE of 24.87%.

Fitch describes the transaction as having higher-than-average leverage, with a debt service coverage ratio of 1.06x that is below the YTD average of other recent Fitch-rated transactions averaging 1.17x DSCR. The loan-to-value ratings of 114.4% is above the YTD 2016 average of 107.9%, and 2015 average of 109.3%.

The largest segment of loans belongs to the retail sector at 35.2% of the pool, with one loan consisting of a mix of unanchored and anchored shopping centers taking up 13.5% of the pool. None of the retail properties are malls, according to Fitch. Fitch shaved 9.8% of the issuer’s aggregate cash flow estimates of $69.7 million to $62.9 million, with haircuts driven by differing expectations on vacancy rates, management fees and in one case, real estate taxes.

Six loans are full-term interest only and 20 loans (39.5%) are partial interest only, with 28 loans (or 44% of the pool) containing balloon payments.

There is limited subordinate debt held by only one borrower – One Harbor Point Square – comprising 5.4% of the pool.

All the loans in the transaction were originated by Citigroup Global Markets Realty Corp., Cantor Commercial Real Estate Lending, Starwood Mortgage Funding V, and FCRE REL LLC.  

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