KBRA Assigns Preliminary Ratings to BLOX 2026-BLOX

NEW YORK--(BUSINESS WIRE)--KBRA announces the assignment of preliminary ratings to seven classes of BLOX 2026-BLOX, a CMBS single-borrower securitization.

The collateral for the transaction is a $210.0 million non-recourse, first lien mortgage loan. The fixed-rate loan will be structured with a four-year Anticipated Repayment Date (ARD), and a seven-year final maturity in September 2033. The loan is interest-only through September 2028, and through September 2029, 50.0% of excess cash flow will be swept and applied monthly to amortize the mortgage loan on a pro rata basis with a 100.0% excess cashflow sweep until final loan maturity in 2033. The loan is secured by the borrower’s leasehold interest in Block 16 and Block 24, which are two adjacent LEED-certified, Class-A mid-rise office buildings located in Bellevue, Washington, within the Seattle MSA. The office space (99.8% of the total square footage) is fully leased to Meta Platforms, Inc. (Meta), a High Quality Credit Worthy Tenant (HQCWT), on a NNN basis through 2033. The leases contain one, seven-year renewal option followed by one, five-year option with no contraction or termination option.

KBRA’s analysis of the transaction included a detailed evaluation of the property’s cash flows using our North American CMBS Property Evaluation Methodology and the application of our North American 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.

The results of our analysis yielded a KBRA net cash flow (KNCF) for the subject of approximately $17.5 million, which is 18.8% below the issuer’s NCF, and a KBRA value of $200.3 million, which is 33.5% below the appraiser’s value. The resulting in-trust KBRA Loan to Value (KLTV) is 104.9%. 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.

To access ratings and relevant documents, click here.

Click here to view the report.

Methodologies

• Structured Finance: Global Structured Finance Counterparty Methodology
• CMBS: North American CMBS Property Evaluation Methodology
• CMBS: North American CMBS Single Borrower & Large Loan Rating Methodology

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

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