Wells Fargo and Deutsche Bank have teamed up to offer a $290-million large-loan CMBS secured by a California Mall property and J.P. Morgan is marketing a $506 million of securities backed by 10 large loans.
The Deutsche-Wells deal, DBWF 2015-LCM Mortgage Trust, is backed by the senior portion of a $410.0 million whole commercial mortgage loan secured by Lakewood Center Mall, a 2.07 million-sq-ft.. super-regional shopping mall located in Lakewood, Calif. The mall is anchored by Macy's, Costco, Home Depot, Target and Forever 21.
The loan has an 11-year fixed-rate term. Approximately 25.5% of the whole mortgage loan balance is expected to amortize during the loan term, which reduces refinancing risk at maturity.
The trust will offer $109 million of AAA’, S&P-rated class A notes; $35 million of AA-’, class B notes; $34.5 million of A-, class C notes; $42.3 million of BBB-, class D notes; $57 million of BB-, class E notes; and $11.5 million of B+’, class F notes.
J.P. Morgan also began marketing a $506 million CMBS via its commercial mortgage securities trust.
The deal called JPMCMT 2015- FL7 will offer $287 million of AAA’ rated class A notes; $76.6 million of AA- rated class B notes; and $64.7 million of A- rated class C notes. Also part of the structure are $77.7 million of unrated class D notes. Morningstar and Standard & Poor’s have assigned preliminary ratings to the deal. The class A notes benefit from credit enhancement of 43.3%.
The transaction is backed by 10, floating rate loans that are secured on 64 properties in 14 states. The loans have a pooled, weighted average LTV of 65%. Each loan pays only on interest,which increases the trust’s refinance risk because of the higher loan balance at maturity.
Nearly half of the pool is comprised of lodging properties, 18.3% are retail properties, 16.8% are office properties, 11.6% are industrial property and 4.2% of the pool are one mixed-use property.
Four of the 10 loans are secured by a portfolio of properties. The RLJ 20 Portfolio, which represents 21.8% of the pooled trust balance, is secured by 20 properties in six states; the Southeast Office and Retail Portfolio loan (22.5% of the pool) is secured by 16 properties in four states; the Blue Mountain Lodging Portfolio loan (15.0% of the pool) is secured by 16 properties in two states; and the Devonshire Retail Portfolio loan (12.7% of the pool) is secured by six properties in three states.The high concentration of lodging properties exposes the pool to greater risk of cashflow volatility. S&P considers lodging among the riskiest property types because their pricing structure changes daily, they have a significant underlying operating business, and they have a higher expense ratio than other property types.
