Kroll Bond Rating Agency (KBRA) announces the assignment of preliminary ratings to four classes of BWAY Trust 2019-1633, a CMBS single-borrower securitization.

The collateral for the transaction is a $250.0 million portion of a $1.25 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 borrowers’ overlapping fee simple and leasehold interests in 1633 Broadway, a 2.6 million sf, 48-story, Class-A office building with a three-story subterranean parking garage located in Midtown Manhattan. The building consists of 2.3 million sf of office space, 145,192 sf of theatre space, 80,000 sf of retail space, 18,384 sf of storage space, and 250 parking garage spaces.

As of October 2019, the property was 98.4% leased to 40 tenants. The five largest tenants at the property include Allianz Asset Mgmt of America (12.5% of total sf, 15.9% of base rent), WMG Acquisition Corp (11.5%, 10.5%), Showtime Networks Inc. (10.2%, 8.7%), Morgan Stanley & Co (10.2%, 11.2%), and Kasowitz Benson Torres (7.9%, 8.3%). Together, the largest five tenants account for 52.3% of the total sf and 54.6% 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 $104.3 million. To value the property, we applied a capitalization rate of 7.00% to arrive at a KBRA value of $1.49 billion. The resulting KBRA Loan to Value (KLTV) is 83.9%. 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.

For further details on KBRA’s analysis, please see our pre-sale report, BWAY Trust 2019-1633, 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: BWAY Trust 2019-1633

1Notional amount.

To access ratings, reports and disclosures, click here.

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

• BWAY Trust 2019-1633 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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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. 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.

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