A portfolio of U-HAUL storage facilities is making an appearance in a second commercial mortgage securitization.
Part of the $270 million loan secured by these properties, which has a credit opinion from Fitch Ratings of ‘AAA’ and Kroll Bond Rating Agency of 'AA,' was securitized in MSJP 2015-HAUL ,a single-asset CMBS, in September. Now another portion is showing up in JPMBB 2015-C32, a conduit sponsored by JP Morgan and Barclays, where it accounts for 4.33% of the pool balance.
Because of the loan’s high credit opinion, that 4.33% packs a big punch: among other things, it is lowering the in-trust loan-to-value ratio of the collateral pool, as measured by Kroll Bond Rating Agency, to 105.8%. Even this is higher than any conduit rated by Kroll in the past six months.
Without the loan, however, Kroll's calculation of the in-trust LTV increases to 108.0%. "This figure is relatively high in the context of recent deals with investment grade loan exposures," Kroll states in its presale report.
The U-Haul loan is comprised of a $159.0 million senior note and a $111.0 million subordinate companion note. The senior component itself is split into four, pari-passu notes: a $50.0 million A-1B note that will be contributed to this new securitization, a $50.0 million A-1A note that will be contributed to a future securitization, and an A-2A and an A-2B note with an aggregate balance of $59.0 million that was contributed to the MSJP 2015-HAUL securitization.
The junior component consists of two subordinate companion notes (A-3A and A-3B) in the aggregate amount of $111.0 million, which were also contributed to the MSJP 2015-HAUL securitization.
The loan is secured by a portfolio of 105 self-storage facilities located in 35 states that total 2.7 million square feet (32,519 units).
The whole loan amortizes based on a 20-year schedule, however the note component included in this trust will fully amortize over a 10-year term and has a low in-trust KLTV of 57.2%.
Thanks in part to the U-Haul loan, both Fitch and Kroll assigned triple-A ratings to both the super senior and junior senior notes to be issued by JPMBB 2015-C32. Subordination required to support the triple-A ratings on the junior notes was 25.5% but without the U-Haul loan, Fitch said subordination on the notes would have risen to about 26.7%.
The higher leverage in JPMBB 2015-C32 reflects the fact that 70.7% of the pool is comprised of loans with LTVs as calculated by Kroll that are above 100%; 39 loans have LTVs between 110% and 120%; and three loans have LTVs in excess of 120%
In total the pool is comprised of 85 loans with principal balance of approximately $1.1 billion secured by 275 properties. Most of the loans have 10-year terms (74 loans), 10 have five year terms and one has a term of seven years. The pool is scheduled to amortize by 17.5% prior to maturity; a single loan pays only interest, and no principal, for its entire term; another 27 loans pay only interest for a partial term; another loan is fully amortizing; and the remaining 60 loans (51.9%) are amortizing balloon loans with terms of five to 10 years.
