KBRA Assigns Preliminary Ratings to BX 2024-PAT

KBRA announces the assignment of preliminary ratings to six classes of BX 2024-PAT, a CMBS single-borrower securitization.

The collateral for the transaction is a $308.5 million floating rate, interest-only mortgage loan. The loan has an initial two-year term with three, one-year extension options and requires monthly interest-only payments based on a SOFR cap of 5.00%. There is also $66.5 million in mezzanine debt in place. The loan is secured by the borrowers’ fee simple interest in Park Avenue Tower, a 36-story, Class-A office tower containing 621,992 sf. The building is located between Park and Madison Avenues and spans the entire block between 55th and 56th Streets in Midtown Manhattan. The building was constructed in 1986 and acquired by Blackstone in 2014. As of January 2024, the property was 87.1% leased to 25 office and retail tenants. The five largest tenants by base rent include PineBridge Investment Holding (11.7% annual base rent), BTIG (9.1%), The Raine Group (6.8%), EOTFR (6.3%), and Cyrus Capital Partners (5.5%). Together, these top five tenants account for 39.4% of total base rent and 37.4% of the total sf.

KBRA’s analysis of the transaction included a detailed evaluation of the property’s 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, its Methodology for Rating Interest-Only Certificates in CMBS Transactions, and its ESG Global Rating Methodology, to the extent deemed applicable.

The results of our analysis yielded a KBRA net cash flow (KNCF) for the subject of approximately $31.7 million, which is 9.2% below the issuer’s NCF, and a KBRA value of approximately $395.7 million, which is 39.1% below the appraiser’s as-is value. The resulting in-trust KBRA Loan to Value (KLTV) is 78.0%. 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 rating and relevant documents, click here.

Click here to view the report.

Methodologies

• CMBS: U.S. CMBS Property Evaluation Methodology
• CMBS: U.S. CMBS Single Borrower & Large Loan Rating Methodology
• Structured Finance: Global Structured Finance Counterparty Methodology
• CMBS: Methodology for Rating Interest-Only Certificates in CMBS Transactions
• ESG Global 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) is a full-service credit rating agency 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 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.

Doc ID: 1003335

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