A noted upper midtown Manhattan retail center that sold last month for $525 million is among several high-end retail, shopping and hotel resort properties JPMorgan is including in its latest commercial mortgage securitization.
The mixed-use office/retail complex at 693 Fifth Avenue, which was sold last month by Thor Equities to French holding firm Fimalac and includes the Valentino luxury fashion boutique as its prime tenant. The property is one of 47 loans secured by 78 properties that support the $939 million notes issuance by the JPMorgan Chase Commercial Mortgage Securities Trust.
The 2016-JP2 series from the trust is structured with five tranches of Class A super senior notes totaling approximately $414.3 million of the portfolio notes balance. All have been granted preliminary ‘AAA’ ratings by Fitch Ratings, DBRS and Moody's Investors Service, according to a presale reports.
[Fitch Ratings parent Fitch Group was formerly majority owned by French billionaire Marc Ladreit de Lacharrière, CEO of Fimalac. He retains a 20% stake in Fitch].
The maturity dates and coupons are to be determined for the Class A notes, which feature 30% credit enhancement for each tranche: Class A-1 at $31.3 million; Class A-2 at $16.2 million; Class A-3 at $250 million; Class A-4 at $58.38 million; and a Class A-SB tranche for $58.4 million.
The largest asset in 2016-JP2 is a $65 million trust portion of the $250 million loan taken out by Fimalac for 693 Fifth Avenue. That portion represents 6.9% of the pool. The deal by Fimalac drew headlines from Thor’s nearly four-fold return on the complex it purchased six years ago before embarking on major upgrades and renovations.
693 Fifth Avenue is within one of the most travelled luxury shopping corridors in the world, centered along the east side Manhattan between 54th and 55th. Other major tenants include JDS Development Group, Pierson Capital, Carpenters Workshop Gallery and Louis Licari.
693 Fifth Avenue is one of two ‘A’ rated properties in the portfolio. The Las Vegas luxury shopping center The Shops at Crystals has a $50 million stake (or 5.3% of the balance) in the pool, sliced from its $550 million, 10-year refinanced mortgage taken out by owners Simon Property Group.
A $300 million portion of that loan was previously securitized in a stand-alone, single-property MBS underwritten by JPMorgan, Bank of America and Wells Fargo.
The average loan size of the properties is $20 million. Office properties comprise 38.6% of the pool, followed by 26% in retail and 16.8% in hotel properties. The highest concentration of properties is in the Southeast (38.4%), although California has the single largest concentration of assets in the pool on a state level (14.1%).
The loans were all originated by JPMorgan, National Association Benefit Street Partners CRE Finance, German American Capital Corp. and Starwood Mortgage Funding.