NEW YORK--()--Kroll Bond Rating Agency (KBRA) assigned its final ratings to eight classes of RBS 2013-SMV, a $295.0 million CMBS single borrower transaction. Concurrently, we have withdrawn our preliminary ratings on the certificates, which were assigned on January 29, 2013 (see our ratings listed below).
The transaction is collateralized by a single, non-recourse, first lien mortgage loan. The loan is secured by the borrower’s fee simple interest in a 1.16 million sf regional mall known as Shops at Mission Viejo. The Property is located in Mission Viejo, California and features over 130 major and in-line tenants that are predominately leased to national retailers. The mall is anchored by Forever XXI, Macy’s Men’s, Children & Furniture Gallery, Macy’s Women’s & Home and Nordstrom. The Macy’s stores own their own improvements and the underlying land.
The mall is owned by the Borrower of the loan, the Shops at MV, LLC. The borrower is owned in the form of a joint venture consisting of Simon Property Group, L.P. (“SPGLP”) which has a 51% interest, and IMI Woodfield LLC, which has a 49% interest. SPGLP is a subsidiary of Simon Property Group, Inc. (Simon) and owns all of SPG’s real estate properties and other assets. Simon is a publicly traded real estate investment trust. The property is managed by Simon Management Associates, LLC, a Simon affiliate. The collateral was 95.6% occupied as of December 1, 2012. Comparable in-line sales were $583 per sf for the trailing 12 months ending September 2012, resulting in an occupancy ratio of 12.8%.
KBRA’s analysis of the transaction included a detailed evaluation of the property’s cash flow using our CMBS Property Evaluation Guidelines, and the application of our CMBS Single Borrower and Large Loan Rating Methodology. The results of our analysis yielded a KBRA Net Cash flow (KNCF) of $27.8 million. To value the property, we applied a 7.50% capitalization rate to arrive at a KBRA value of $370.2 million. Our resulting KBRA Loan to Value (KLTV) was 79.7%. In our analysis of the transaction, we also reviewed and considered third party engineering and environmental reports, as well as our own on-site inspection of the property and the competition.
Final Ratings Assigned: RBS 2013-SMV Trust
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Related publications (available at www.krollbondratings.com):
CMBS: RBS 2013-SMV 17g-7 Disclosure Report
CMBS Single Borrower and Large Loan Rating Methodology
CMBS Property Evaluation Guidelines, published June 10, 2011
About Kroll Bond Rating Agency
KBRA was established in 2010 by Jules Kroll to restore trust in credit ratings by creating new standards for assessing risk and by offering accurate, clear and transparent ratings. KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).