KBRA Assigns Preliminary Ratings to BBCMS 2018-CHRS

NEW YORK--()--Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of AAA (sf) preliminary ratings to the Class A and Class X certificates of BBCMS 2018-CHRS, a CMBS single asset, single borrower (SASB) securitization.

The collateral for the transaction is a $400.0 million portion of a $550.0 million, non-recourse, first lien mortgage loan. The fixed-rate loan requires interest-only payments and has a 10-year term. The loan is secured by the borrower’s fee simple and leasehold interests in 533,772 sf of Christiana Mall, a mostly single-story, approximately 1.3 million-sf, super-regional mall located directly off Interstate 95 in Newark, Delaware, approximately 10 miles southwest of the Wilmington CBD and 40 miles southwest of the Philadelphia CBD.

Christiana Mall is anchored by JCPenney, Macy’s, and Nordstrom, each of which own their store and underlying land, as well as Target, which owns its store subject to a ground lease with the borrower. Other major tenants include well-known retailers such as Apple, Barnes & Noble, Cabela’s, a 12-screen Cinemark theatre, H&M, and XXI Forever. Each of these spaces serve as loan collateral, with the exception of Cabela’s, which owns its improvements and leases the underlying land from the borrower. As of May 2018, the mall was 98.9% occupied inclusive of its non-collateral stores, while the collateral was 98.3% leased.

KBRA’s analysis of the transaction included a detailed evaluation of the property’s cash flows 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 $42.5 million. To value the property, we applied a capitalization rate of 7.00% to arrive at a KBRA Value of $606.9 million and a KBRA Loan to Value (KLTV) of 90.6%. 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 subject; and legal documentation.

For further details on KBRA’s analysis, please see our Pre-Sale Report, entitled BBCMS 2018-CHRS, 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.

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 BBCMS 2018-CHRS Representations & Warranties Disclosure.

Related Publications: (available at www.kbra.com)

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About KBRA and KBRA Europe

KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

Contacts

Analytical:
Courtney Kelly, 646-731-3362
Associate
ckelly@kbra.com
or
Michael Brown, 646-731-2307
Senior Director
mbbrown@kbra.com
or
Michael Jo, 646-731-3376
Managing Director
mjo@kbra.com
or
Nelson Jayakar, 646-731-3317
Analyst
njayakar@kbra.com

Contacts

Analytical:
Courtney Kelly, 646-731-3362
Associate
ckelly@kbra.com
or
Michael Brown, 646-731-2307
Senior Director
mbbrown@kbra.com
or
Michael Jo, 646-731-3376
Managing Director
mjo@kbra.com
or
Nelson Jayakar, 646-731-3317
Analyst
njayakar@kbra.com