Yet another offering of commercial mortgage securitization is getting some ratings juice from an investment grade property on Madison Avenue in New York City, but this time it’s a different address.
The $1.1 billion CGCMT 2015-GC35 is backed by 63 commercial mortgage loans secured by 93 properties, including a loan on 590 Madison Avenue. This loan, the second largest in the pool, has credit characteristics commensurate with a ‘AAA’ rated obligation when analyzed on a standalone basis, according to Kroll Bond Rating Agency. The loan is secured by a 1.0 million square foot, class A office building located in the Midtown neighborhood of New York City’s borough of Manhattan and has a loan-to-value (LTV) ratio of 44.9%.
This helps reduce the weighted average LTV of the entire pool, as measured by Kroll, to 99%. It is among the lowest of the 27 conduits rated by KBRA in the past six months, which averaged 102.8%.
Of the 27 CMBS conduits rated by KBRA over the past six months, 18 have had some exposure to investment grade loans ranging from 3.5% to 18.8%. In many case, this was a loan backed by another class A office building at 11 Madison Avenue.
Without the 590 Madison Avenue loan, the weighted average LTV of CGCMT 2015-GC35 would rise to 104.
CGCMT 2015-GC35, sponsored by Citigroup and Goldman Sachs, also has exposure to some very highly 4%. By comparison excluding investment grade from the other 18 deals would have increased their LTVs to between 103.3% to 109.6% with an average of 106.1%.leverage loans, those with LTVs in excess of 100.0%. There are 43 loans accounting for 68% of the collateral. And of the top 10 loans, seven are highly leveraged, with in-trust KLTVs ranging from 103.6% to 118.5%.
Loans range in size from $1.1 million for the largest loan in the pool, Paramus Park (10.9%), which is secured by 308,871 square feet of a 767,928 square foot regional mall located in Paramus, New Jersey, approximately 20 miles northwest of New York City to just $120 million for the smallest loan. Rounding out the top five loans are 590 Madison Avenue (9.0%), South Plains Mall (9.0%), Westin Boston Waterfront (7.2%), and Harbor Pointe Apartments (5.4%).
Most of loans have 10-year terms (55 loans, 89.6%), while the remaining loans have five-year terms (8 loans, 10.4%). Nearly three-quarters of the pool (31 loans, 70.4%) pay only interest for at least part of their terms: eight (37.5%) pay only interest for their entire term and 23 (32.9%) are pay only interest for a partial term. The balance of the pool is comprised of amortizing balloon loans (32 loans, 29.6%) that require principal payments throughout their respective terms.
KBRA assigned 'AAA' ratings to the super senior notes that benefit from 30% credit support and the junior, senior notes that benefit from 24.125% credit support.