J.P. Morgan plans to issue $269 million of securities backed by two large, floating-rate loans secured by hotel properties, according to a Morningstar presale report.
The deal, JPM Commercial Mortgage Trust 2014-BXH, Series 2014-BXH is structured with $97 million of class A-1 notes rated AAA’; $35.6 million of AA-’ rated class B notes; $26.4 million of A-’ rated class C notes; $34.9 million of BBB-’ rated class D notes and $74.9 million of BB-’ rated class E notes.
The weighted average loan-to-value ration of the collateral is 52.4% and the deal has weighted average debt service coverage ratio of 2.37x, based on a 5.925% interest rate (4.0% LIBOR cap rate + 1.925% spread), according to the Morningstar presale report.
The loans backing the deal are not cross collateralized. The OTO Portfolio backs one of the loans and is secured by 16 hotels with 2,031 rooms located in California, Maryland, Alabama, Florida, North Carolina, Pennsylvania, Virginia and Connecticut. The portfolio includes 10 limited service, five extended-stay, and one full-service hotel.
The second loan is secured by the Four Seasons hotel Las Colinas located in Irving, Texas.
Both portfolios of proprties have a senior mezzanine loan and junior mezzanine loan that are not part of the securitization.
Blackstone Real Estate Partners is the loan sponsor and acquired the properties through two separate transactions in the first quarter of 2014. Blackstone has approximately $266 billion in assets under management, as of December 31, 2013.
Each of the first-mortgage loans provides for a two-year initial term and the option for three 12-month extensions. The loans are interest-only throughout the initial and extended terms. Full term, interest-only loans are more difficult to refinance than loans that amortize due to the higher balloon payment due at maturity.