Morgan Stanley is offering $545 million of securities backed by five large commercial mortgage loans.
The deal, called MSCI 2015-XLF1, will offer $348.4 million of senior certificates backed by a pool of four mortgage loans, include a $185 million loan secured by 680 Madison Ave, a $103.8 million loan secured by the Ashford full service portfolio, a $31.4 million loan secured by the Ashford select service portfolio and a $28.2 million loan secured by SOMA Towers.
The first series consists of four tranches, including $213.4 million of class A notes that benefit from credit enhancement at 61.3% and $60.5 million of class B notes that benefit from credit enhancement of 17.4%. Kroll Bond ratings and Morningstar expect to rate the $213 million class A senior notes and the $60.5 million class B senior notes, triple-A and double-A minus respectively. Morningstar will rate the class C and D certificates, 'A-' and 'BBB-'.
Lodging properties serve as collateral for the Ashford Full Service Portfolio ($103.8 million, 5 assets) and Ashford Select Service Portfolio ($31.4 million, 5 assets).
The retail exposure is represented by 680 Madison Avenue. The building is located on Madison Avenue between 61st and 62nd streets in New York City’s borough of Manhattan. The retail unit is comprised of 16,358 sf of ground floor retail, 16,667 sf of second floor retail, and 2,500 sf of basement storage space that occupies the entire western block of Madison Avenue between 61st and 62nd streets. As of November 2014, the property was 32.7% leased to three luxury retail tenants; Qela (51.6% of in place base rent), Brioni (36.9%), and Morgenthal Frederics (11.5%).
The SOMA Towers loan, which represents 7.4% of the pool, is secured by a 148-unit Class-A high-rise multifamily complex located in the downtown area of Bellevue, Washington, approximately 10 miles east of the Seattle CBD.
Three of these four loans (the exception is the 680 Madison Ave loan) each also back a second tranche of notes that will be rated only by Morningstar. The Ashford Full Service Portfolio backs $37.1 million of class AFS1 notes rated B-, the Ashford Select Service Portfolio backs $9.1 million of junior, class ASL1 notes rated B+’ and the Soma Tower loan backs $3.8 million if junior notes rated BB+’.
A third series of notes, totaling $87.7 million, is backed by the Elad Portfolio. Morningstar plans to assign ratings of AAA’ to the class ELD1 certificates, AA- ratings to the class ELD2 notes, A- ratings to the ELD3 notes, BBB- ratings to the ELD 4 notes and AAA’ ratings to the ELDX notes.
The Elad Portfolio is a collection of three class B/B+ multifamily properties and one boutique hotel located in South Florida and suburban Chicago.
All of the loans are structured with a two-year term and three, one-year extension options. All of the loans pay only interest for their entire term.
The $1.8 billion MOTEL 2015-MTL6, one of the bggest deals of the yeat in the single asset space, priced on Friday.The transaction backed by a Blackstone portfolio of Motel 6 properties paid swaps plus 95 basis points on the 5-year, class A-2,A2 tranche, according to a pricing document. The triple-A rated, class A-1 and A-2, A1 tranches were preplaced.
The class B notes, rated double-A minus paid swaps plus 165 basis points, the class C notes, rated single-A minus paid swaps plus 200 basis points, the class D notes, rated triple-B minus paid swaps plus 290 basis points , the class E notes, rated double-B minus paid swaps plus 390 basis points and the class F notes, rated single-B minus paid swaps 425 basis points. Standard & Poor's assigned ratings to the senior portion of the offering; Kroll and Fitch Ratings rated the entire capital structure.
JP Morgan Securities and Deutsche Bank Securities are lead underwriters.
The loan backing the deal is secured by 493 extended stay hotels and a pledge of cash flow from 14 hotels. The collateral also includes the equity interests in entities that own certain current and future franchise assets and certain intellectual property including the Motel 6 brand.
These same properties also collateralize $200.0 million of mezzanine portion that is not being securitized.
Blackstone originally acquired its Motel 6 portfolio from Accor S.A. in October 2012 for approximately $1.9 billion. Financing for that transaction included a $1.0 billion mortgage that was securitized in the Motel 6 Trust 2012-MTL6 CMBS transaction.