Barclays plans to market a new series of commercial-mortgage backed bonds totaling $808.8 million, secured primarily by a large cross-section of multifamily and office properties.
Barclays Commercial Mortgage Securities Mortgage Trust 2020-C7 is backed by a pool of 49 fixed-rate loans collateralized by 153 commercial properties – of which 17 loans are tied multifamily/manufactured housing properties representing 35.4% of the pool balance.
Such loans typically carry historically lower rates of losses for investors compared to other commercial property types. According to Moody’s Investors Service, multifamily properties since 1998 have had a loss severity average of 34.5% compared to 50.8% for retail, 47.2% for hotel, 42.4% for industrial, and 42.6% for office. (The cross-sector average is 44%).
Hotel properties and regional malls are specifically excluded from the BBCMS 2020-C7 pool, in likely deference to the high risk to those operations from the economic impact of the COVID-19 outbreak.
Moody’s, Fitch Ratings and DBRS Morningstar have each assigned preliminary triple-A ratings to senior notes in the transactions.
Parkmerced, San Francisco
The pool includes 25 interest-only loans representing 63.9% of the pool, and another 12 (22.6% of the pool) are partial interest-only.
But the pool will pay down by 5.6% by maturity, which is above the year-to-date average of 4.3% on conduit CMBS transactions, according to Fitch.
The pool also has a weighted-average mortgage rate of 3.623% that is “well below historical levels,” according to Fitch.
The top loans in the pool include a $60 million interest in a total $1.6 billion refinance package in 2019 for Maximum Real Estate Partners’ Parkmerced multifamily development in San Francisco, as well as a $60 million loan participation in a $682 million debt package for a San Francisco office property at 525 Market Street.
The property is majority owned by a real estate investment trust of the New York State Teachers’ Retirement System. The new mortgage recapitalizes the REIT’s interests in conjunction with a 49% share of the property to RREEF America REIT II, an indirect subsidiary of Deutsch Bank affiliate DWS, according to ratings agency presale reports.
