NEW YORK--(BUSINESS WIRE)--
Kroll Bond Rating Agency, Inc. (KBRA) is pleased to announce the assignment of preliminary ratings to four classes of BAMLL 2014-520M, a $675.0 million CMBS large loan fixed-rate transaction (see ratings list below).
The collateral for the securitization consists of a single, non-recourse, first lien mortgage loan that is secured by the borrower’s fee simple interest in 1.0 million square feet (sf) of 520 Madison Avenue. The property is a 43-story, Class A, office building located on Madison Avenue between 53rd and 54th Streets, in the Manhattan borough of New York City, New York. The property consists of 989,311 sf of office space, 23,301 sf of retail space, and 21,831 sf of storage space. The property was built in 1982 and subsequently renovated in 2008. As of June 2014, the property was 99.6% leased, primarily to financial services firms, the two largest of which are Jefferies LLC and The Carlyle Group. Each of these tenants are both High Quality Credit Worthy Tenants (HQCWTs) that together account for 50.7% of total base rent. The collateral is majority owned by certain family members as well as current and former employees of Tishman Speyer, which developed the subject.
KBRA’s analysis of the transaction included a detailed evaluation of the properties’ cash flow using our CMBS Property Evaluation Guidelines, and the application of our CMBS Single Borrower and Large Loan Rating Methodology. The results of our analysis yielded a KBRA net cash flow (KNCF) of $69.9 million. To value the property, we applied a 7.0% capitalization rate to arrive at a value of $998.2 million. KBRA adjusted the value downward by $22.2 million, which is portion of the sponsor’s unreserved tenant improvement and leasing commission obligations. Our resulting KBRA value was $976.0 million and our KBRA Loan to Value (KLTV) was 69.2%. In our analysis of the transaction, we also reviewed and considered third party engineering, environmental and appraisal reports; our own on-site inspection of the properties and its competitors; and legal documentation.
The preliminary ratings are based on information known to KBRA at the time of this publication. Information received subsequent to this release could result in the assignment of final ratings that differ from the preliminary ratings.
|Class||Expected Rating||Balance (USD)||Rating Action|
1 Notional balance
All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description of a transaction’s representations, warranties and enforcement mechanisms that are available to investors when issuing credit ratings. KBRA’s disclosure for this transaction can be found at https://www.krollbondratings.com/show_report/1371.
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KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).
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