SCF Realty Capital, a lender that specializes in single-tenant properties, launched its first commercial mortgage securitization last week.
The transaction is structured as a master trust that can issue several series of notes. There are two initial series with preliminary ratings from Kroll Bond Rating Agency: $263.5 million of series 2016-1 notes are rated A and $17.25 million of series 2016-2 notes are rated BBB. They are backed by 256 commercial real estate properties with an aggregate value of approximately $351.7 million.
All of the notes are expected to be repaid by November 2021; the legal final maturity is November 2046.
Midland Loan Services is the initial sub-manager and backup manager.
Credit Suisse Securities is the sole bookrunner and structuring agent; it is joined by Guggenheim Securities as initial purchaser.
SCF, founded this year, is the real estate division of Stonebriar Commercial Finance. It is led by president Peter M. Mavoides, who previously served as president and chief operating officer of Spirit Realty Capital.
Among Kroll’s primary rating consideration is the fact that the portfolio is highly concentrated in the restaurant sector. Restaurant locations, including quick service, casual dining and family dining, account for approximately 74.7% of the collateral value. The restaurant industry is cyclical and remains highly competitive. Further, one single tenant, Captain D’s, accounts for approximately 22.6% of collateral value.
Mitigating high industry and obligor concentration in this pool is the geographic diversity and high weighted average FCCR at the individual restaurant locations.