KBRA Releases Research – CMBS Single-Tenant Exposure Continues Climb

NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) releases research on CMBS single-tenant exposure. Loans secured by single-tenant properties in KBRA-rated conduits, as a percentage of a transaction’s securitization balance, continued to trend upward through 1H 2021. For the first time in the nine years since we have been tracking this exposure, it pierced the 20% threshold in 2020, and was 21.9% year-to-date as of 1H 2021.

In the report, we examine single-tenant exposure by its risk characteristics, property type, and lease expirations relative to their maturity dates. As office represents more than half of the single-tenant exposure, the report also takes a closer look by market tier as well as provides office market research and our views on the sector. Of the single-tenant loans over the past 18 months, approximately 34% of leases expire prior to the maturity date. Such loans present higher term default risk owing to the increased potential for cash flow interruption prior to loan maturity.

The report also highlights the top 10 single tenants based on their outstanding principal balance, while identifying High Quality Credit Worthy Tenants, including three of the top 10 that are from the technology sector: Facebook, Amazon, and Google.

In addition, we present an Appendix of single-tenant exposure in KBRA-rated conduit deals.

Click here to view the report.

Related Publications

• CMBS Loan Performance Trends: June 2021
• CMBS Conduit Maturities: An 18-Month View
• CREFC Building a Better Future Conference Recap
• Additional CRE Securitizations Converting to SOFR
• CMBS Trend Watch: May 2021

About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.