NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to seven classes of Shops at Crystals 2016-CSTL, a $300.0 million CMBS single borrower transaction.
The collateral for the transaction is a $300.0 million portion of a $550.0 million non-recourse, first lien mortgage loan secured by the borrower’s fee simple interest in Shops at Crystals, a three-story, 262,327 sf luxury shopping center located on the Las Vegas Strip. The center, which does not have typical mall anchors, has a tenant roster that includes flagship stores for nine high-end luxury retailers: Dolce & Gabbana, Ermenegildo Zegna, Fendi, Gucci, Hermes, Louis Vuitton, Prada, Roberto Cavalli and Tom Ford. As of April 2016, Shops at Crystals was 87.6% occupied. For full-year 2015 the overall property achieved sales of $1,330 per sf with a corresponding occupancy cost of 19.2% and in-line sales of $1,270 per sf with an occupancy cost of 19.9%.
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 $45.8 million. To value the property, we applied a 7.00% capitalization rate to arrive at a KBRA value of $654.2 million and a KBRA Loan to Value (KLTV) of 84.1%. In our analysis of the transaction, we also reviewed and considered third party engineering, environmental and appraisal reports, our own on-site inspection of the property and its competitors, and legal documentation.
For further details on KBRA’s analysis, please see our Pre-Sale Report, entitled Shops at Crystals 2016-CSTL, which was published today at www.kbra.com.
The preliminary ratings are based on information known to KBRA at the time of this publication. Information received subsequent to this release could result in the assignment of final that differ from the preliminary ratings.
Preliminary Ratings Assigned: Shops at Crystals 2016-CSTL
| Class | Expected Rating | Balance (US$) | ||||||
| A | AAA(sf) | $112,000,000 | ||||||
| B | AA-(sf) | $20,700,000 | ||||||
| C | A-(sf) | $50,700,000 | ||||||
| D | BBB-(sf) | $63,800,000 | ||||||
| E | BB(sf) | $52,800,000 | ||||||
| X-A | AAA(sf) | $112,000,0001 | ||||||
| X-B | AAA(sf) | $20,700,0001 |
1Notional 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 Shops at Crystals 2016-CSTL Representations & Warranties Disclosure.
Related publications:
CMBS Presale Report: Shops at Crystals 2016-CSTL
CMBS Property Evaluation Methodology, published March 3, 2015
CMBS Single Borrower and Large Loan Rating Methodology, published March 3, 2015
Methodology for Rating Interest-Only Certificates in CMBS Transactions, published June 6, 2016
Follow us on Twitter!
@KrollBondRating
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).
