NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency, Inc. (KBRA) is pleased to announce the assignment of preliminary ratings to seven classes of JPMCC 2016-WPT. JPMCC 2016-WPT is a CMBS single borrower transaction that is collateralized by a $557.0 million floating rate loan that was originated by JPMorgan Chase Bank, National Association. The loan has an initial two-year term with three, one-year extension options. Proceeds from the mortgage loan, along with $259.0 million of mezzanine debt, $99.0 million of preferred equity, and $109.0 million of cash equity contributed by the loan sponsor, were used to acquire 108 office and industrial assets from Liberty Property Trust for $969.0 million.
The loan is secured by the borrower’s fee simple and leasehold interests in 108 real estate assets. Of these, 93 buildings, representing 82.9% of the aggregate allocated loan amount (ALA), are clustered together within 12 business parks. The properties consist of 58 office assets representing 71.4% of the aggregate ALA and 50 flex properties (28.6%). The assets are located in 16 different submarkets in four states: Florida (40.6%), Pennsylvania (25.5%), Arizona (17.4%), and Minnesota (16.5%). The properties are leased to approximately 379 tenants with a weighted average lease term of 10.9 years, with only three tenants that account for more than 3.0% of total base rent.
KBRA’s analysis of the transaction included a detailed evaluation of the portfolio’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 $68.0 million. To value the portfolio, we applied a blended capitalization rate of 9.65% to arrive at a KBRA value of $704.5 million and a KBRA Loan to Value (KLTV) of 79.1%. In our analysis of the transaction, we also reviewed and considered third party engineering, environmental, and appraisal reports, our own on-site inspections of the properties and legal documentation.
For further details on KBRA’s analysis, please see our Pre-Sale Report, entitled JPMCC 2016-WPT, which was published today at www.kbra.com.
The preliminary ratings are based on information known to KBRA at the time of this publication. Information received subsequent to this release could result in the assignment of final that differ from the preliminary ratings.
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Preliminary Ratings Assigned: JPMCC 2016-WPT |
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| Class | Expected Rating | Balance (US$) | |||||||
| A | AAA(sf) | $342,260,000 | |||||||
| X-CP | AAA(sf) |
$445,600,000 |
(1) |
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| X-EXT | AAA(sf) |
$557,000,000 |
(1) |
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| B | AA-(sf) | $66,970,000 | |||||||
| C | A-(sf) | $47,550,000 | |||||||
| D | BBB-(sf) | $58,120,000 | |||||||
| E | BB(sf) | $42,100,000 | |||||||
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1Notional balance |
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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 JPMCC 2016-WPT Representations & Warranties Disclosure.
Related publications:
CMBS
Presale Report: JPMCC 2016-WPT
CMBS
Property Evaluation Methodology, published December 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
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).
