KBRA Assigns Preliminary Ratings to BX 2024-MDHS
30 Apr 2024 | New York
KBRA announces the assignment of preliminary ratings to six classes of BX 2024-MDHS, a CMBS single-borrower securitization.
The collateral for the transaction is a $1.38 billion floating rate, interest-only mortgage loan. The loan has an initial two-year term with three, one-year extension options and requires monthly interest-only payments based on an expected SOFR cap of 5.50%. The loan is secured by the borrowers’ fee simple interests in 142 primarily industrial assets. In total, the portfolio contains 17.1 million sf and is located in 15 states throughout the US. The top five state exposures include Georgia (27.9% of allocated loan amount), Florida (26.1%), Tennessee (8.4%), Texas (8.3%) and North Carolina (6.5%). As of April 2024, the portfolio was 91.1% leased to approximately 300 unique tenants, with no individual tenant accounting for more than 4.9% of total base rent.
KBRA’s analysis of the transaction included a detailed evaluation of the properties’ cash flows using our U.S. CMBS Property Evaluation Methodology and the application of our U.S. CMBS Single Borrower & Large Loan Rating Methodology. In addition, KBRA also relied on its Global Structured Finance Counterparty Methodology for assessing counterparty risk in this transaction and its ESG Global Rating Methodology, to the extent deemed applicable.
The results of our analysis yielded an as-is KBRA net cash flow (KNCF) for the portfolio of approximately $90.2 million and a stabilized KNCF of approximately $101.1 million, which is 8.8% and 8.4% below the issuer’s as-is and stabilized NCFs, respectively, and a KBRA value of approximately $1.33 billion, which is 34.0% and 35.4% below the appraiser’s aggregate as-is and stabilized values, respectively. The resulting in-trust KBRA Loan to Value (KLTV) is 104.1%. In our analysis of the transaction, we also reviewed and considered third party engineering, environmental, and appraisal reports, the results of our site inspections of 24 (39.4%) of the portfolio properties, and legal documentation review.
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