KBRA Assigns Preliminary Ratings to SDAL 2025-DAL

KBRA announces the assignment of preliminary ratings to six classes of SDAL 2025-DAL, a CMBS single-borrower securitization.

The collateral for the transaction is a $300.0 million non-recourse, first lien mortgage loan that is expected to be co-originated by Goldman Sachs Bank USA and JPMorgan Chase Bank, National Association. The floating rate loan is expected to have a two-year initial term with three 12-month extension options and require monthly interest-only payments. The mortgage loan will be secured by the borrower’s fee simple and leasehold interests in the Sheraton Dallas, an 1,841-key, full-service convention hotel located on 5.4 acres in downtown Dallas, Texas. The property is the largest hotel by key count in Texas and is comprised of three towers and a convention center building located across the street from the hotel and connected via two skybridges. The hotel's facilities and amenities include five food & beverage outlets, over 230,000 sf of meeting and event space, an outdoor rooftop pool, a concierge lounge, a fitness center, a sundry shop, a gift shop, and a guest laundry. Two towers were originally built as office space in 1959 while the third tower was built in 1981. Since 2017, approximately $92.9 million ($50,438 per key) has been invested on capital improvements which included guestroom renovations as well as lobby, meeting space and food & beverage upgrades. For the TTM 2/2025 period, the subject property achieved an occupancy of 50.0% with an ADR of $179.45, resulting in a RevPAR of $89.71. The property achieved occupancy, ADR and RevPAR penetration rates of 83.5%, 88.6% and 74.0%, respectively, as of the 2024 period.

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, 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 $36.7 million, which is 9.7% below the issuer’s NCF, and a KBRA value of approximately $349.4 million, which is 33.2% below the appraiser’s as-is value. The resulting in-trust KBRA Loan to Value (KLTV) is 85.9%. 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

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

Doc ID: 1008901

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