JP Morgan plans to sell $415 million of securities backed by a two-year, floating-rate commercial mortgage loan that is secured by 40 Courtyard by Marriott hotels.
All of the properties were built between 1984 and 1989, and range in size from 130 to 154 keys. The properties have all been renovated since 2008 and a total of $106.3 million has been spent on capital improvements across the portfolio from 2008 to 2013.
JP MCC 2014-CBM will offer $133.6 million of AAA’/’AAA’ rated class A notes; $48.7 million of AA-’ / AA-’rated class B notes; $36.2 million of A-’/ A-’rated class C notes; $52.1 million of BBB-’/ BBB-’ rated, class D notes; $75.4 million of BB-’ / BB-’class E notes and $69 million of B-’/ B-’, class F notes. Kroll Bond Ratings and Standard & Poor's assigned ratings to the deal.
The underlying loan has a loan-to-value of 94.3%. An additional $97 million of existing mezzanine debt held outside the trust, raising the LTV to 116.3%. “Higher leverage implies lower borrower equity levels and higher default probability,” stated KBRA in the presale.
This is the second large loan, Hotel CMBS JP Morgan is marketing this month. At the beginning of October, the bank began marketing J.P. Morgan Chase Commercial Mortgage Securities Trust 2014-PHH, a $266 million large loan, CMBS that is secured by the Palmer House Hilton hotel in Chicago.
The historic AAA, four diamond hotel is located in downtown Chicago. It is less than one block from Millennium Park and within walking distance of the Central Business District's major office properties, shopping areas, and the theater district.
The property benefits from 131.0 million of capital improvements, executed between 2006 and 2009. Upgrades included renovating 947 guestrooms, food and beverage outlets, meeting spaces, the lobby, and common areas. Since 2012, an additional 456 guestrooms were renovated for $14.8 million.