NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of
preliminary ratings to eight classes of CGCMT 2019-SST2, a CMBS single
asset, single borrower (SASB) transaction.
The collateral for the transaction is a $180.0 million, non-recourse,
first lien mortgage loan secured by the borrower’s fee simple interests
in 29 self-storage properties. The portfolio properties total 2.1
million sf (17,978 units) with assets ranging from 37,705 sf (320 units)
to 171,320 sf (1,352 units). The self-storage space at the properties
comprises 1.9 million sf (17,186 units) of the total space, with the
remainder consisting of parking and other commercial space. Overall,
29.8% of the portfolio’s self-storage sf (26.9% of total sf) is
climate-controlled. The properties are located in 18 different MSAs
across 10 states, with three state exposures each representing more than
10.0% of the pool balance: California (35.8%), Florida (21.6%) and
Nevada (10.4%). The assets were built between 1979 and 2014 and are on
average approximately 21 years old. As of October 2018, the portfolio
had a weighted average occupancy rate of 86.9%.
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. The
results of our analysis yielded a KBRA net cash flow (KNCF) for the
portfolio of $15.6 million. To value the portfolio, KBRA applied a
blended capitalization rate of 8.85% to arrive at a KBRA value of $176.6
million. The resulting KBRA Loan to Value (KLTV) is 101.9%. In our
analysis of the transaction, we also reviewed and considered third party
engineering, environmental, and appraisal reports; the results of our
site inspections of the properties; and legal documentation.
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: CGCMT 2019-SST2
|Class||Initial Class Balance||Expected KBRA Rating|
1Notional balance. 2To satisfy the US risk
retention rules, Citi Real Estate Funding Inc. is expected to purchase
the VRR Interest which is expected to be an “eligible vertical
interest”. The VRR Interest will equal approximately 5.0% of the
aggregate initial certificate balance of all ABS interests.
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 available here.
Related Publications: (available at www.kbra.com)
2019-SST2 Pre-Sale Report
CMBS Property Evaluation Methodology
CMBS Single Borrower & Large Loan Rating Methodology
for Rating Interest-Only Certificates in CMBS Transactions
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
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, is 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.
Elizabeth Yash, Associate
Michael Brown, Senior Director
Susannah Keagle, Senior Director