In early May, the BOS 2026-LYRK is expected to close on a $360 million commercial mortgage-backed securities (CMBS) deal, a single-borrower transaction secured by leasehold interests in Lyrik, a class A office building in Boston.
The transaction will issue five tranches of notes, with the class A tranche issuing the bulk of the debt, $193.9 million, according to analysts at Kroll Bond Rating Agency and S&P Global Ratings.
BOS will pay interest and principal payments sequentially to classes A, B, C, D, E and to the horizontal residual interest class, in that order, while losses will be absorbed in reverse order, according to S&P.
All the notes have a rated final distribution date of May 2041, according to the rating agencies. Also, based on a capitalization rate of 7.25%, BOS has a trust loan-to-value ratio of 92.8%, S&P said.
A five-year-loan is financing Lyrik, a 495,275-square-foot, 20-story office tower, plus 38,012 square feet of retail space over the Massachusetts Turnpike in Boston's Back Bay area, a premiere office submarket, S&P said. The building achieved LEED Gold, WELL Gold and Wired Gold certifications.
KBRA assigned an above-average property score of 3.75 to Lyrik, because of its Back Bay location, which also the locus of one of Boston's primary transportation hubs.
These are just some of the attributes that boosted analysts' credit confidence in the transaction. Otherwise, the office mortgage sector—and the securitized notes they support—is raising concerns among analysts.
Remote and hybrid work models could have a "lasting impact on office demand and property values," according to KBRA. Also, cyclical factors including inflation and a slowing economy might destabilize the office market.
Also, the loan is interest-only and without amortization, will not deleverage over its expected five-year term, KBRA said.
Analysts note that as of April 1, 2026, the deal's cutoff date, the property was 93.4% occupied. It has a net operating income of $34.7 million, and net cash flow of $33 million, a collateral square-foot value of $1,097 and a net cash flow debt yield of 9.2%, KBRA said.
KBRA assigns AAA to the class A notes; S&P assigns AAA, AA-, A-, BBB-, BB+ and BB- to classes A, B, C, D, E and HRR, respectively.
