NEW YORK--(EON: Enhanced Online News)--Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to six classes of DBWF 2016-85T, a $271.0 million CMBS single borrower transaction.
The collateral for the securitization consists of a $271.0 million portion of a $396.0 million single, non-recourse, first lien, fixed-rate mortgage loan that is secured by the borrower’s fee simple interest in a 632,584 sf, 11-story Class-A office property located on Tenth Avenue between West 15th Street and West 16th Street. The property, which was constructed in 1914, and redeveloped and renovated several times over the past 20 years, is comprised of 412,130 sf of office space, 171,383 sf of telecom/data space, 41,450 sf of retail space and 7,621 sf of storage/roof space. As of November 2016, the property was 99.6% leased to 10 tenants, the five largest of which account for 94.2% of total base rent.
The five largest tenants at the property include Google, a High Quality Credit Worthy Tenant (HQCWT); Government Services Administration (HQCWT) on behalf of the Federal Bureau of Investigation Joint Terrorism Task Force; Level 3 Communications; Telehouse; and Moet Hennessy (HQCWT).
The loan sponsor is a joint venture between the principals of The Related Companies and The Related Group (50.1% ownership) and Vornado Realty Trust LP (49.9% ownership).
KBRA’s analysis of the transaction included a detailed evaluation of the property’s cash flow using our CMBS Property Evaluation Methodology, 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 $34.4 million. To value the property, we applied a blended capitalization rate of 7.30% to arrive at a KBRA value of $471.7 million and a KBRA Loan to Value (KLTV) of 83.9%. In our analysis of the transaction, we also reviewed and considered third party engineering, environmental and appraisal reports; the results of our site inspection of the property, and legal documentation review.
For further details on KBRA’s analysis, please see our Pre-Sale Report, entitled DBWF 2016-85T, which was published today at www.kbra.com.
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.
Preliminary Ratings Assigned: DBWF 2016-85T
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(1) Notional balance
Representations & Warranties Disclosure:
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 in the report entitled DBWF 2016-85T Representations & Warranties Disclosure.
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About Kroll Bond Rating Agency
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).