Too bad loan participations in the Hilton Hawaii Village don’t confer lodging benefits.
This 2,860 room property has showed up as collateral in three commercial mortgage bond offerings so far this week. In the latest deal, the $652 million CFCRE 2016-C7 Mortgage Trust, launched Wednesday, it accounts for 8.7% of pool.
A portion of the same loan accounts for 9.4% of the collateral for JP Morgan Chase Commercial Mortgage Securities Trust 2016-JP4 and 6.9% of Morgan Stanley Bank of America Merrill Lynch Trust 2016-C32. The latter two deals were launched Tuesday.
In addition to a 22 beach acres on the island of Oahu, the loan boasts investment-grade credit characteristics; Fitch gives it a credit opinion of BBB-minus, on a stand-alone basis.
Hilton Hawaii Village isn’t the only high-quality loan; a portion of a loan on Potomac Mills, an outlet mall in suburban Virginia, accounts for another 6.2% of the pool. Fitch has a credit opinion of triple-B on the loan.
That helps offset the high leverage in some other loans used as collateral in all three deals, boosting the credit metrics of the overall pools. For example, CFCRE 2016-C32, sponsored by Cantor Fitzgerald, has a weighted average loan-to-value ratio, as measured by Fitch, of 103%. By comparison, the average LTV for Fitch-rated deals that do not include such high quality loans is 109.9%.
In total, the $652.9 million transaction is backed by 37 loans secured by 64 properties. Most were contributed by Cantor Commercial Real Estate Lending, Société Générale and UBS. (The Hilton Hawaii loan was originated by three other banks, J.P. Morgan, Deutsche Bank, and Goldman Sachs; Cantor acquired a portion of the loan from Deutsche Bank, according to Fitch.)
Retail properties are the biggest exposure, accounting for 44% of the pool, followed by hotels, at 18.9%, and multifamily properties, at 13.1%.
Among other credit considerations cited by Fitch is the low level of amortization of the loans. Based on the scheduled balance at maturity, the pool will pay down by only 7.8%, which is below the YTD 2016 average of 10.5%
Berkeley Point Capital is the deal's primary servicer; Midland Loan Services is the master servicer and special servicer.