NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) announces the assignment of preliminary ratings to seven classes of Hudson Yards 2019-55HY, a CMBS single-borrower securitization.
The collateral for the transaction is a $810.5 million portion of a $1.245 billion non-recourse mortgage loan. The fixed rate loan has a 10-year term and requires monthly interest-only payments. The loan is secured by the borrower’s fee simple interest in 55 Hudson Yards, a 2.4 million sf, 51-story, Class-A office building located in the Hudson Yards neighborhood of Manhattan. The newly constructed property features high end tenant build outs and is LEED Gold certified.
As of November 2019, the property was 97.3% leased to 21 tenants. The five largest tenants are either financial institutions or large law firms, and include Point 72 Asset Management (23.2% of total sf, 21.9% of base rent), Milbank Tweed Hadley & McCloy (20.1%, 17.9%), Cooley (10.2%, 11.2%), Boies Schiller & Flexner (7.7%, 6.8%) and Third Point (6.2%, 8.6%). Together, these five tenants account for 67.5% of the total sf and 66.5% 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, to the extent deemed applicable.
The results of our analysis yielded a KBRA net cash flow (KNCF) of $91.8 million. To value the property, we applied a capitalization rate of 6.75% to arrive at a KBRA value of $1.36 billion. The resulting KBRA Loan to Value (KLTV) is 91.5%. 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, Hudson Yards 2019-55HY, published 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: Hudson Yards 2019-55HY
Class |
Initial Class Balance |
Expected KBRA Rating |
A |
$357,393,000 |
AAA (sf) |
B |
$61,969,000 |
AA- (sf) |
C |
$55,092,000 |
A (sf) |
D |
$101,246,000 |
BBB (sf) |
E |
$85,025,000 |
BBB- (sf) |
F |
$109,250,000 |
BB (sf) |
X |
$474,454,0001 |
AAA (sf) |
1Notional amount.
To access ratings, reports and disclosures, click here.
Related Publications: (available at www.kbra.com)
- Hudson Yards 2019-55HY Pre-Sale Report
- U.S. CMBS Property Evaluation Methodology
- U.S. CMBS Single Borrower & Large Loan Rating Methodology
- Methodology for Rating Interest-Only Certificates in CMBS Transactions
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KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is 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.
