Morgan Stanley plans to issue $411 million of commercial mortgage bonds that are backed by a single loan, according to Kroll Bond Ratings Agency.
The loan has a seven-year term and pays only interest for its entire term. It is backed by seven properties that consist of retail, office, health club, movie theater and parking condominium units.
Lincoln Square represents 40.6% of the loan balance is a 343,679 square foot retail condominium and Lincoln West, a three-story retail condominium represents 16.8% of the pool. Both properties are located in New York City’s Manhattan borough on the Upper West Side.
Lincoln Triangle, a 76,411 sf, five-story retail condominium, represents 12.6% of the pool. The property is located within a 30-story, Upper West Side luxury residential building ,which is not part of the collateral.
Four Seasons San Francisco Retail represents 10.8% of the pool. The mixed-use office and retail building is located in the downtown area of San Francisco, California.
Commercial units at the Four Seasons Miami make up 8.4% of the pool. This property includes retail space, office space and a 950-space parking garage. The asset is situated in downtown Miami, Florida.
Ritz-Carlton Washington DC Retail, a retail property and 900-space parking garage and Ritz-Carlton Georgetown Retail, both located in Washington DC, represent the rest of the properties.
The deal, dubbed MSCI 2014-MP, will offer $303 million in AAA’ rated notes; $51.8 million in AA-’ rated notes; $37.8 million in A-’ rated notes and $71 million in BBB-’rated notes. The notes are due August 2033.
The deal joins a robust pipeline for single-asset, single-loan CMBS. Last Friday JP Morgan priced its $415 million Courtyard by Mariott deal, JPMCC 2014-CBM. The deal is backed by a alarge loan that is secured by 40 hotel properties. The 4.93 years, triple-A notes priced at a spread of 90 basis points over Libor, according to Interactive Data. At the junior level, the 4.93-year, triple-B minus notes priced at 250 basis points over Libor.
October closed with private-label gross issuance volume at approximately $6 billion, of which $4.4 billion was conduit and $1.6 billion was single-borrower, according to a Bank of America Merrill Lynch report. In total, year-to-date private label issuance for conduit and single-borrower/floater deals now stands at $47.5 billion and $23.4 billion, respectively.
“We believe that the market remains on pace to issue $60 billion of conduit paper and about $30 billion of single-asset/borrower and floating rate bonds by the end of the year,” the report states.