FREE WRITING PROSPECTUS | ||
FILED PURSUANT TO RULE 433 | ||
REGISTRATION FILE NO.: 333-193376-24 | ||
The information in this free writing prospectus may be amended and/or supplemented prior to the time of sale. The information in this free writing prospectus supersedes any contrary information contained in any prior free writing prospectus relating to the subject securities and will be superseded by any contrary information contained in any subsequent free writing prospectus prior to the time of sale. In addition, certain information regarding the subject securities is not yet available and, accordingly, has not been included in this free writing prospectus.
THE INFORMATION IN THIS FREE WRITING PROSPECTUS, DATED OCTOBER 13, 2015,
MAY BE AMENDED OR SUPPLEMENTED PRIOR TO THE TIME OF SALE
STATEMENT REGARDING THIS FREE WRITING PROSPECTUS
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (File No. 333-193376) for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the depositor has filed with the Securities and Exchange Commission for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the Securities and Exchange Commission website at www.sec.gov. Alternatively, the depositor, Deutsche Bank Securities Inc., any other underwriter or any dealer participating in this offering will arrange to send to you the prospectus if you request it by calling toll-free 1-800-503-4611 or by emailing prospectus.cpdg@db.com.
$803,520,000 (Approximate)
COMM 2015-CCRE27 Mortgage Trust
Commercial Mortgage Pass-Through Certificates
German American Capital Corporation
The Bank of New York Mellon
KeyBank National Association
Cantor Commercial Real Estate Lending, L.P.
Sponsors and Mortgage Loan Sellers
Deutsche Mortgage & Asset Receiving Corporation
Depositor
COMM 2015-CCRE27 Mortgage Trust
Issuing Entity
The COMM 2015-CCRE27 Mortgage Trust Commercial Mortgage Pass-Through Certificates will represent beneficial ownership interests in the issuing entity, COMM 2015-CCRE27 Mortgage Trust. The issuing entity’s assets will primarily be 65 fixed-rate mortgage loans, secured by first liens on 96 commercial, multifamily and manufactured housing community properties. The COMM 2015-CCRE27 Mortgage Trust Commercial Mortgage Pass-Through Certificates will represent interests in the issuing entity only and will not represent the obligations of Deutsche Bank AG, Deutsche Mortgage & Asset Receiving Corporation, the sponsors or any of their respective affiliates, and neither the certificates nor the underlying mortgage loans are insured or guaranteed by any governmental agency or private insurer.
Each class of offered certificates will receive distributions of interest, principal or both on the fourth business day following the sixth day of each month or the following business day, commencing in November 2015. Credit enhancement will be provided by certain classes of subordinate certificates that will be subordinate to certain classes of certificates as described in this free writing prospectus under “Description of the Offered Certificates—Subordination.”
Certain characteristics of the offered certificates include:
Class | Initial Certificate Balance or Notional Balance(1) | Approximate Initial Pass-Through Rate | Assumed Final Distribution Date(2) | Rated Final | Anticipated Ratings | |||||
Class A-1 | $ 38,731,000 | (4) | August 2020 | October 2048 | Aaa(sf)/AAAsf/AAA(sf) | |||||
Class A-2 | $ 72,542,000 | (4) | October 2020 | October 2048 | Aaa(sf)/AAAsf/AAA(sf) | |||||
Class A-SB | $ 62,544,000 | (4) | July 2025 | October 2048 | Aaa(sf)/AAAsf/AAA(sf) | |||||
Class A-3 | $ 215,000,000 | (4) | September 2025 | October 2048 | Aaa(sf)/AAAsf/AAA(sf) | |||||
Class A-4 | $ 263,315,000 | (4) | September 2025 | October 2048 | Aaa(sf)/AAAsf/AAA(sf) | |||||
Class X-A | $ 705,700,000(5) | Variable(5) | September 2025 | October 2048 | Aa1(sf)/AAAsf/AAA(sf) | |||||
Class A-M | $ 53,568,000 | (4) | September 2025 | October 2048 | Aa2(sf)/AAAsf/AAA(sf) | |||||
Class B | $ 54,732,000 | (4) | September 2025 | October 2048 | A1(sf)/AA-sf/AA(sf) | |||||
Class C | $ 43,088,000 | (4) | September 2025 | October 2048 | NR/A-sf/A(sf) |
(Footnotes to table to begin on page 15)
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined that this free writing prospectus or the attached prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
Investing in the offered certificates involves risks. See “Risk Factors” beginning on page 61 of this free writing prospectus and page 10 of the prospectus.
The issuing entity will be relying on an exclusion or exemption from the definition of “investment company” under the Investment Company Act of 1940, as amended (the “Investment Company Act”), contained in Section 3(c)(5) of the Investment Company Act or Rule 3a-7 under the Investment Company Act, although there may be additional exclusions or exemptions available to the issuing entity. The issuing entity is being structured so as not to constitute a “covered fund” for purposes of the Volcker Rule under the Dodd-Frank Act (both as defined in this free writing prospectus).
With respect to this offering, Deutsche Bank Securities Inc. and Cantor Fitzgerald & Co. are acting as the joint bookrunning managers and co-lead managers in the following manner: Deutsche Bank Securities Inc. is acting as sole bookrunning manager with respect to 100.0% of each class of offered certificates and Cantor Fitzgerald & Co. is acting as sole bookrunning manager with respect to 0.0% of each class of offered certificates. KeyBanc Capital Markets Inc., CastleOak Securities, L.P. and Goldman, Sachs & Co. are acting as co-managers. The underwriters will offer the offered certificates in the amounts that will be set forth in the final prospectus supplement to the public in negotiated transactions or otherwise at varying prices to be determined at the time of sale.
Deutsche Bank Securities Inc., Cantor Fitzgerald & Co., KeyBanc Capital Markets Inc., CastleOak Securities, L.P. and Goldman, Sachs & Co. will be required to purchase the offered certificates (in the amounts that will be set forth under “Method of Distribution (Underwriter Conflicts of Interest)” in the final prospectus supplement) from Deutsche Mortgage & Asset Receiving Corporation, subject to certain conditions. The underwriters expect to deliver the offered certificates to purchasers on or about October 29, 2015.
Deutsche Bank Securities | Cantor Fitzgerald & Co. | |
Joint Bookrunning Managers and Co-Lead Managers | ||
KeyBanc Capital Markets | Goldman, Sachs & Co. | CastleOak Securities, L.P. |
Co-Managers |
October[__], 2015
TABLE OF CONTENTS
EXECUTIVE SUMMARY | 15 | Risks Relating to Property Type | ||
SUMMARY | 19 | Concentration | 78 | |
RISK FACTORS | 61 | Geographic Concentration Exposes | ||
General Risks | 61 | Investors to Greater Risk of Default | ||
The Offered Certificates May Not Be a | and Loss | 79 | ||
Suitable Investment for You | 61 | Multifamily Properties Have Special | ||
Risks Related to Market Conditions | 61 | Risks | 81 | |
The Credit Crisis and Downturn in the | Retail Properties Have Special Risks | 83 | ||
Real Estate Market Have Adversely | Office Properties Have Special Risks | 85 | ||
Affected the Value of Commercial | Hospitality Properties Have Special | |||
Mortgage-Backed Securities | 61 | Risks | 86 | |
The Volatile Economy and Credit Crisis | Industrial Properties Have Special Risks | 90 | ||
May Increase Loan Defaults and | Manufactured Housing Community | |||
Affect the Value and Liquidity of Your | Properties Have Special Risks | 91 | ||
Investment | 62 | Self Storage Properties Have Special | ||
General Conditions in the Commercial | Risks | 92 | ||
Real Estate Mortgage Markets May | Parking Properties Have Special Risks | 93 | ||
Adversely Affect the Performance of | Mixed Use Properties Have Special | |||
the Offered Certificates | 63 | Risks | 93 | |
Risks Related to the Mortgage Loans | 64 | Risks of Co-Tenancy and Other Early | ||
Mortgage Loans Are Non-recourse and | Termination Provisions in Retail and | |||
Are Not Insured or Guaranteed | 64 | Office Leases | 94 | |
The Offered Certificates Are Limited | Condominium Properties Have Special | |||
Obligations and Payments Will Be | Risks | 95 | ||
Primarily Derived from the Mortgage | Risks Related to Construction, | |||
Loans | 64 | Development, Redevelopment, | ||
Commercial Lending Is Dependent upon | Renovation and Repairs at Mortgaged | |||
Net Operating Income | 65 | Properties | 96 | |
Mortgage Loans Have Not Been | Competition May Adversely Affect the | |||
Reunderwritten Since Origination | 67 | Performance of the Mortgaged | ||
The Prospective Performance of the | Property | 98 | ||
Commercial, Multifamily and | Options and Other Purchase Rights May | |||
Manufactured Housing Community | Affect Value or Hinder Recovery with | |||
Mortgage Loans Included in the | Respect to the Mortgaged Properties | 98 | ||
Issuing Entity Should Be Evaluated | The Sellers of the Mortgage Loans Are | |||
Separately from the Performance of | Subject to Bankruptcy or Insolvency | |||
the Mortgage Loans in Any of the | Laws That May Affect the Issuing | |||
Depositor’s Other Trusts | 67 | Entity’s Ownership of the Mortgage | ||
Some Mortgaged Properties May Not | Loans | 99 | ||
Be Readily Convertible to Alternative | Environmental Issues at the Mortgaged | |||
Uses | 68 | Properties May Adversely Affect | ||
Limitations of Appraisals | 68 | Payments on Your Certificates | 100 | |
Property Value May Be Adversely | Potential Issuing Entity Liability Related | |||
Affected Even When Current | to a Materially Adverse Environmental | |||
Operating Income Is Not | 69 | Condition | 101 | |
Risks Related to Tenants | 69 | Borrower May Be Unable To Repay the | ||
Risks Related to Mortgage Loan | Remaining Principal Balance on the | |||
Concentration | 78 | Maturity Date or Anticipated | ||
Risks Related to Borrower | Repayment Date and Longer | |||
Concentration | 78 | Amortization Schedules and Interest- | ||
Only Provisions May Increase Risk | 103 |
3 |
TABLE OF CONTENTS
(Continued)
Risks Relating to Borrower Organization | Risks Related to Zoning Laws | 120 | ||
or Structure | 104 | Risks Related to Litigation and | ||
Delaware Statutory Trusts May Hinder | Condemnation | 122 | ||
Recovery | 105 | Prior Bankruptcies, Defaults or Other | ||
Tenancies in Common May Hinder | Proceedings May Be Relevant to | |||
Recovery | 105 | Future Performance | 123 | |
Risks Related to Additional Debt | 105 | Risks Relating to Costs of Compliance | ||
Bankruptcy Proceedings Entail Certain | with Applicable Laws and Regulations | 124 | ||
Risks | 107 | Risks Related to Conflicts of Interest | 125 | |
Risks Related to Loan Sponsor | Potential Conflicts of Interest of the | |||
Guaranties | 108 | Master Servicer and the Special | ||
Lack of Skillful Property Management | Servicer | 125 | ||
Entails Risks | 108 | Special Servicer May Be Directed To | ||
Risks of Inspections Relating to | Take Actions | 125 | ||
Property | 109 | Potential Conflicts of Interest of the | ||
World Events and Natural (or Other) | Operating Advisor | 127 | ||
Disasters Could Have an Adverse | Potential Conflicts of Interest of the | |||
Impact on the Mortgaged Properties | Underwriters and Their Affiliates | 127 | ||
and Could Reduce the Cash Flow | Potential Conflicts of Interest in the | |||
Available To Make Payments on the | Selection of the Underlying Mortgage | |||
Certificates | 109 | Loans | 128 | |
Inadequate Property Insurance | Related Parties May Acquire Certificates | |||
Coverage Could Have an Adverse | or Experience Other Conflicts | 129 | ||
Impact on the Mortgaged Properties | 110 | Conflicts Between Property Managers | ||
Risks Associated with Blanket Insurance | and the Borrowers | 131 | ||
Policies or Self-Insurance | 111 | Conflicts Between Certificateholders | ||
Availability of Terrorism Insurance | 112 | and Holders of Companion Loans | 131 | |
Appraisals and Market Studies Have | Other Potential Conflicts of Interest | 131 | ||
Certain Limitations | 114 | Risks Related to the Offered | ||
Risks Related to Historic Tax Credits | 115 | Certificates | 134 | |
Increases in Real Estate Taxes Due to | Legal and Regulatory Provisions | |||
Termination of a PILOT Program or | Affecting Investors Could Adversely | |||
Other Tax Abatement Arrangements | Affect the Liquidity of the Offered | |||
May Reduce Payments to | Certificates | 134 | ||
Certificateholders | 116 | Your Yield May Be Adversely Affected | ||
Risks Related to Enforceability | 116 | By Prepayments Resulting From | ||
Risks Related to Enforceability of | Earnout Reserves | 135 | ||
Prepayment Premiums, Yield | Risks Related to Prepayments and | |||
Maintenance Charges and | Repurchases of Mortgage Loans | 136 | ||
Defeasance Provisions | 117 | Limited Obligations | 137 | |
The Master Servicer or the Special | Yield Considerations | 138 | ||
Servicer May Experience Difficulty in | Optional Early Termination of the | |||
Collecting Rents upon the Default | Issuing Entity May Result in an | |||
and/or Bankruptcy of a Borrower | 117 | Adverse Impact on Your Yield or May | ||
Risks Related to Mortgage Loans | Result in a Loss | 139 | ||
Secured by Multiple Properties | 117 | A Mortgage Loan Seller May Not Be | ||
State Law Limitations Entail Certain | Able To Make a Required Repurchase | |||
Risks | 118 | or Substitution of a Defective | ||
Mortgage Loans Secured by Leasehold | Mortgage Loan | 139 | ||
Interests May Expose Investors to | Any Loss of Value Payment Made by a | |||
Greater Risks of Default and Loss | 119 | Mortgage Loan Seller May Prove To | ||
Potential Absence of Attornment | Be Insufficient to Cover All Losses on | |||
Provisions Entails Risks | 120 | a Defective Mortgage Loan | 139 |
4 |
TABLE OF CONTENTS
(Continued)
Risks Related to Borrower Default | 140 | BNY Mellon’s Securitization Program | 156 | |
Risks Related to Modification of | Review of BNY Mellon Mortgage Loans | 156 | ||
Mortgage Loans with Balloon | BNY Mellon’s Underwriting Standards | 158 | ||
Payments | 141 | Exceptions to BNY Mellon’s Disclosed | ||
Risks Related to Certain Payments | 141 | Underwriting Guidelines | 162 | |
Risks of Limited Liquidity and Market | Compliance with Rule 15Ga-1 under the | |||
Value | 141 | Exchange Act | 162 | |
The Limited Nature of Ongoing | KeyBank National Association | 162 | ||
Information May Make It Difficult for | General | 162 | ||
You To Resell Your Certificates | 142 | KeyBank’s Securitization Program | 162 | |
Risks Related to Factors Unrelated to | Review of KeyBank Mortgage Loans | 163 | ||
the Performance of the Certificates | KeyBank’s Underwriting Guidelines and | |||
and the Mortgage Loans, Such as | Process | 164 | ||
Fluctuations in Interest Rates and the | Compliance with Rule 15Ga-1 under the | |||
Supply and Demand of CMBS | Exchange Act | 167 | ||
Generally | 142 | Cantor Commercial Real Estate | ||
Credit Support May Not Cover All Types | Lending, L.P | 167 | ||
of Losses | 143 | General | 167 | |
Disproportionate Benefits May Be Given | CCRE Lending’s Loan Origination and | |||
to Certain Classes | 143 | Acquisition History | 168 | |
The Amount of Credit Support Will Be | Review of CCRE Mortgage Loans | 168 | ||
Limited | 143 | CCRE Lending’s Underwriting | ||
REMIC Status | 143 | Standards | 170 | |
State, Local and Other Tax | Compliance with Rule 15Ga-1 under the | |||
Considerations | 143 | Exchange Act | 175 | |
Certain Federal Tax Consideration | THE DEPOSITOR | 175 | ||
Regarding Original Issue Discount | 144 | THE ISSUING ENTITY | 176 | |
Tax Considerations Related to | THE SERVICERS | 177 | ||
Foreclosure | 144 | Generally | 177 | |
Changes to REMIC Restrictions on | The Master Servicer | 178 | ||
Loan Modifications May Impact an | The Special Servicer | 180 | ||
Investment in the Certificates | 145 | Replacement of the Special Servicer | 183 | |
Risks Relating to Lack of | The Primary Servicers | 186 | ||
Certificateholder Control over the | KeyBank National Association | 186 | ||
Issuing Entity | 145 | Summary of KeyBank Primary Servicing | ||
Different Timing of Mortgage | Agreement | 188 | ||
Loan Amortization Poses Certain | Berkeley Point Capital LLC | 193 | ||
Risks | 146 | Summary of Berkeley Point Primary | ||
Ratings of the Offered Certificates | 146 | Servicing Agreement | 195 | |
Combination or “Layering” of Multiple | THE TRUSTEE, CERTIFICATE | |||
Risks May Significantly Increase Risk | ADMINISTRATOR AND | |||
of Loss | 148 | CUSTODIAN | 200 | |
THE SPONSORS, MORTGAGE LOAN | Certain Matters Regarding the Trustee | 203 | ||
SELLERS AND ORIGINATORS | 149 | Resignation and Removal of the | ||
German American Capital Corporation | 149 | Trustee | 203 | |
General | 149 | Certain Matters Regarding the | ||
GACC’s Securitization Program | 149 | Certificate Administrator | 204 | |
Review of GACC Mortgage Loans | 150 | Trustee and Certificate Administrator | ||
GACC’s Underwriting Standards | 152 | Fee | 206 | |
Compliance with Rule 15Ga-1 under the | PAYING AGENT, CERTIFICATE | |||
Exchange Act | 155 | REGISTRAR, CUSTODIAN AND | ||
The Bank of New York Mellon | 156 | AUTHENTICATING AGENT | 206 | |
General | 156 | THE OPERATING ADVISOR | 207 |
5 |
TABLE OF CONTENTS
(Continued)
CERTAIN RELATIONSHIPS AND | Yield Sensitivity of the Class X-A | |||
RELATED TRANSACTIONS | 207 | Certificates | 288 | |
DESCRIPTION OF THE MORTGAGE | THE POOLING AND SERVICING | |||
POOL | 209 | AGREEMENT | 290 | |
General | 209 | General | 290 | |
Security for the Mortgage Loans | 212 | Servicing of the Mortgage Loans and | ||
Significant Mortgage Loans | 212 | Serviced Loan Combinations; | ||
Sale of the Mortgage Loans | 213 | Collection of Payments | 290 | |
Certain Underwriting Matters | 214 | The Directing Holder | 292 | |
Loan Combinations | 218 | Limitation on Liability of Directing | ||
The 11 Madison Avenue Loan | Holder | 298 | ||
Combination | 218 | The Operating Advisor | 298 | |
The NMS Los Angeles Multifamily | General | 298 | ||
Portfolio Loan Combination | 228 | Role of Operating Advisor While No | ||
Additional Mortgage Loan Information | 230 | Control Termination Event Has | ||
Certain Terms and Conditions of the | Occurred and Is Continuing | 299 | ||
Mortgage Loans | 237 | Role of Operating Advisor While a | ||
Delaware Statutory Trusts May Hinder | Control Termination Event Has | |||
Recovery | 249 | Occurred and Is Continuing | 299 | |
Changes in Mortgage Pool | Annual Report | 301 | ||
Characteristics | 249 | Replacement of the Special Servicer | 302 | |
DESCRIPTION OF THE OFFERED | Termination of the Operating Advisor | |||
CERTIFICATES | 250 | For Cause | 302 | |
General | 250 | Rights upon Operating Advisor | ||
Distributions | 252 | Termination Event | 303 | |
Fees and Expenses | 259 | Termination of the Operating Advisor | ||
Distribution of Available Funds | 262 | Without Cause | 304 | |
Distribution of Excess Interest | 265 | Resignation of the Operating Advisor | 304 | |
Class A-SB Planned Principal Balance | 266 | Operating Advisor Compensation | 304 | |
Prepayment Premiums and Yield | Advances | 305 | ||
Maintenance Charges | 266 | Accounts | 310 | |
Application Priority of Mortgage Loan | Enforcement of “Due-On-Sale” and | |||
Collections or Loan Combination | “Due-On-Encumbrance” Clauses | 312 | ||
Collections | 267 | Inspections | 315 | |
Assumed Final Distribution Date | 269 | Insurance Policies | 315 | |
Realized Losses | 270 | Assignment of the Mortgage Loans | 317 | |
Prepayment Interest Shortfalls | 272 | Representations and Warranties; | ||
Subordination | 273 | Repurchase; Substitution | 318 | |
Appraisal Reductions | 274 | Certain Matters Regarding the | ||
Delivery, Form and Denomination | 278 | Depositor, the Master Servicer, the | ||
Book-Entry Registration | 279 | Special Servicer and the Operating | ||
Definitive Certificates | 281 | Advisor | 320 | |
Certificateholder Communication | 281 | Servicer Termination Events | 323 | |
Access to Certificateholders’ Names | Rights upon a Servicer Termination | |||
and Addresses | 281 | Event | 324 | |
Special Notices | 282 | Waivers of Servicer Termination Events | ||
Retention of Certain Certificates by | and Operating Advisor Termination | |||
Affiliates of Transaction Parties | 282 | Events | 326 | |
YIELD AND MATURITY | Amendment | 327 | ||
CONSIDERATIONS | 283 | No Downgrade Confirmation | 328 | |
Yield Considerations | 283 | Evidence of Compliance | 330 | |
Weighted Average Life | 285 | Voting Rights | 330 | |
Certain Price/Yield Tables | 287 | Realization Upon Mortgage Loans | 331 |
6 |
TABLE OF CONTENTS
(Continued)
Sale of Defaulted Mortgage Loans and | ANNEX D | – | DECREMENT TABLES | D-1 | ||
Serviced REO Properties | 333 | ANNEX E | – | PRICE/YIELD TABLES | E-1 | |
Modifications | 334 | ANNEX F | – | MORTGAGE LOAN | ||
Optional Termination | 338 | SELLER REPRESENTATIONS AND | ||||
Servicing Compensation and Payment | WARRANTIES | F-1 | ||||
of Expenses | 339 | ANNEX G | – | EXCEPTIONS TO | ||
Special Servicing | 340 | MORTGAGE LOAN SELLER | ||||
Master Servicer and Special Servicer | REPRESENTATIONS AND | |||||
Permitted To Buy Certificates | 348 | WARRANTIES | G-1 | |||
Servicing of the Non-Serviced | ANNEX H | – | AMORTIZATION | |||
Mortgage Loan | 348 | SCHEDULE FOR THE ATLANTA | ||||
Reports to Certificateholders; Available | MULTIFAMILY PORTFOLIO | |||||
Information | 349 | MORTGAGE LOAN | H-1 | |||
Certificate Administrator Reports | 349 | |||||
Information Available Electronically | 352 | |||||
Other Information | 356 | |||||
Master Servicer’s Reports | 356 | |||||
Exchange Act Filings | 358 | |||||
Governing Law; Waiver of Jury Trial; | ||||||
and Consent to Jurisdiction | 358 | |||||
MATERIAL FEDERAL INCOME TAX | ||||||
CONSEQUENCES | 358 | |||||
General | 358 | |||||
Tax Status of Offered Certificates | 359 | |||||
Taxation of Offered Certificates | 359 | |||||
Further Information; Taxation of | ||||||
Foreign Investors | 361 | |||||
CERTAIN STATE AND LOCAL TAX | ||||||
CONSIDERATIONS | 361 | |||||
ERISA CONSIDERATIONS | 361 | |||||
LEGAL INVESTMENT | 364 | |||||
LEGAL MATTERS | 364 | |||||
RATINGS | 364 | |||||
LEGAL ASPECTS OF MORTGAGE | ||||||
LOANS IN TEXAS, FLORIDA AND | ||||||
CALIFORNIA | 366 | |||||
INDEX OF DEFINED TERMS | 369 | |||||
ANNEX A-1 – CERTAIN | ||||||
CHARACTERISTICS OF THE | ||||||
MORTGAGE LOANS | A-1-1 | |||||
ANNEX A-2 – CERTAIN POOL | ||||||
CHARACTERISTICS OF THE | ||||||
MORTGAGE LOANS AND | ||||||
MORTGAGED PROPERTIES | A-2-1 | |||||
ANNEX A-3 – CLASS A-SB PLANNED | ||||||
PRINCIPAL BALANCE SCHEDULE | A-3-1 | |||||
ANNEX B – DESCRIPTION OF THE | ||||||
TOP 20 MORTGAGE LOANS | B-1 | |||||
ANNEX C – GLOBAL CLEARANCE, | ||||||
SETTLEMENT AND TAX | ||||||
DOCUMENTATION PROCEDURES | C-1 |
7 |
IMPORTANT NOTICE ABOUT INFORMATION
PRESENTED IN THIS FREE WRITING PROSPECTUS
Information about the certificates offered in this free writing prospectus is contained in two separate documents that progressively provide more detail: (a) the attached prospectus, which provides general information, some of which may not apply to the offered certificates; and (b) this free writing prospectus, which describes the specific terms of the offered certificates. The Annexes to this free writing prospectus are incorporated into and are a part of this free writing prospectus. References in the attached prospectus to the prospectus supplement for the offered certificates should be interpreted to mean this free writing prospectus except when used under the heading “Method of Distribution” in the attached prospectus.
We have filed with the Securities and Exchange Commission a registration statement under the Securities Act of 1933, as amended, with respect to the offered certificates. However, this free writing prospectus does not contain all of the information contained in our registration statement, nor does it contain all information that is required to be included in a prospectus required to be filed as part of a registration statement. For further information regarding the documents referred to in this free writing prospectus, you should refer to our registration statement and the exhibits to it. Our registration statement and the exhibits to it can be inspected and copied at prescribed rates at the public reference facilities maintained by the Securities and Exchange Commission at its public reference room, 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the Securities and Exchange Commission at 1-800-SEC-0330. Copies of these materials can also be obtained electronically through the Securities and Exchange Commission’s internet website (http://www.sec.gov).
This free writing prospectus is not an offer to sell or a solicitation of an offer to buy these securities in any state or other jurisdiction where such offer, solicitation or sale is not permitted. Because the offered certificates are being offered on a “when, as and if issued” basis, any such contract will terminate, by its terms, without any further obligation between us, if the offered certificates themselves, or the particular class to which the contract relates, are not issued. Because the offered certificates are subject to modification or revision, any such contract also is conditioned upon the understanding that no material change will occur with respect to the relevant class of securities prior to the closing date. If a material change does occur with respect to such class, our contract will terminate, by its terms, without any further obligation between us and you (the “Automatic Termination”). If an Automatic Termination occurs, we will provide you with revised offering materials reflecting the material change and give you an opportunity to purchase such class. To indicate your interest in purchasing the class, you must communicate to us your desire to do so within such timeframe as may be designated in connection with your receipt of the revised offering materials.
The information in this free writing prospectus, if conveyed prior to the time of your contractual commitment to purchase any of the offered certificates, supersedes any conflicting information contained in any prior similar materials relating to the offered certificates. The information in this free writing prospectus may be amended or supplemented prior to the time of your contractual commitment to purchase any of the offered certificates. This free writing prospectus is being delivered to you solely to provide you with information about the offered certificates and to solicit an offer to purchase the offered certificates, when, as and if issued. Any such offer to purchase made by you will not constitute a contractual commitment by you to purchase or give rise to an obligation by the underwriters to sell any of the offered certificates, until the underwriters have accepted your offer to purchase those certificates. Prospective investors should understand that, when considering the purchase of the offered certificates, a contract of sale will come into being no sooner than the date on which the relevant class of certificates has been priced and the underwriters have confirmed the allocation of certificates to be made to investors. Any “indications of interest” expressed by you, and any “soft circles” generated by us, will not create binding contractual obligations for you or us.
8 |
You are advised that the terms of the offered certificates, and the characteristics of the mortgage loan pool backing them, may change (due to, among other things, the possibility that mortgage loans that comprise the pool may become delinquent or defaulted or may be removed or replaced and that similar or different mortgage loans may be added to the pool, and that one or more classes of the offered certificates may be split, combined or eliminated), at any time prior to the time sales to purchasers of the offered certificates will first be made. An underwriter’s obligation to sell the offered certificates to you is conditioned on the mortgage loans and offered certificates having the characteristics described in these materials. If for any reason the depositor does not deliver the offered certificates, the underwriter will notify you, and neither the depositor nor any underwriter will have any obligation to you to deliver all or any portion of the offered certificates which you have committed to purchase, and none of the depositor nor any underwriter will be liable for any costs or damages whatsoever arising from or related to such non-delivery.
You should rely only on the information contained in this free writing prospectus and the attached prospectus. We have not authorized anyone to provide you with information that is different from that contained in this free writing prospectus. The information in this free writing prospectus is accurate only as of the date of this free writing prospectus.
This free writing prospectus and the attached prospectus include cross references to sections in these materials where you can find further related discussions. The tables of contents in this free writing prospectus and the attached prospectus identify the pages where these sections are located.
Certain capitalized terms are defined and used in this free writing prospectus and the attached prospectus to assist you in understanding the terms of the offered certificates. The capitalized terms used in this free writing prospectus are defined on the pages indicated under the caption “Index of Defined Terms” in this free writing prospectus.
In this free writing prospectus:
· | the terms “Depositor,” “we,” “us” and “our” refer to Deutsche Mortgage & Asset Receiving Corporation; and |
· | references to “lender” with respect to the mortgage loans generally should be construed to mean, subsequent to the issuance of the offered certificates, the trustee on behalf of the issuing entity as the holder of record title to the mortgage loans or the master servicer or the special servicer, as applicable, with respect to the obligations and rights of the lender as described under “The Pooling and Servicing Agreement” in this free writing prospectus, however, the responsibilities of the trustee as the “lender” will be limited to responsibilities and obligations of the trustee as specified in the pooling and servicing agreement. |
THE OFFERED CERTIFICATES DO NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE DEPOSITOR, THE SPONSORS, THE MORTGAGE LOAN SELLERS, THE MASTER SERVICER, THE SPECIAL SERVICER, THE TRUSTEE, THE CERTIFICATE ADMINISTRATOR, THE OPERATING ADVISOR, THE INITIAL DIRECTING HOLDER, THE UNDERWRITERS OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THE OFFERED CERTIFICATES NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY OR PRIVATE INSURER.
THERE IS CURRENTLY NO SECONDARY MARKET FOR THE OFFERED CERTIFICATES. WE CANNOT ASSURE YOU THAT A SECONDARY MARKET WILL DEVELOP OR, IF A SECONDARY MARKET DOES DEVELOP, THAT IT WILL PROVIDE HOLDERS OF THE OFFERED CERTIFICATES WITH LIQUIDITY OF INVESTMENT OR THAT IT WILL CONTINUE FOR THE TERM OF THE OFFERED CERTIFICATES. THE UNDERWRITERS CURRENTLY INTEND TO MAKE A MARKET IN THE OFFERED CERTIFICATES BUT ARE UNDER NO OBLIGATION TO DO SO. ACCORDINGLY, PURCHASERS MUST BE PREPARED TO BEAR THE RISKS OF THEIR INVESTMENTS FOR AN
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INDEFINITE PERIOD. SEE “RISK FACTORS—RISKS RELATED TO THE OFFERED CERTIFICATES—RISKS OF LIMITED LIQUIDITY AND MARKET VALUE” IN THIS FREE WRITING PROSPECTUS.
FORWARD-LOOKING STATEMENTS
This free writing prospectus and the attached prospectus contain certain forward-looking statements. If and when included in this free writing prospectus, the words “expects”, “intends”, “anticipates”, “estimates” and analogous expressions and all statements that are not historical facts, including statements about our beliefs or expectations, are intended to identify forward-looking statements. Any forward-looking statements are made subject to risks and uncertainties, which could cause actual results to differ materially from those stated. Those risks and uncertainties include, among other things, declines in general economic and business conditions, increased competition, changes in demographics, changes in political and social conditions, regulatory initiatives and changes in customer preferences, many of which are beyond our control and the control of any other person or entity related to this offering. The forward-looking statements made in this free writing prospectus are made as of the date stated on the cover. We have no obligation to update or revise any forward-looking statement.
NOTICE TO RESIDENTS OF THE UNITED KINGDOM
The issuing entity described in this free writing prospectus may constitute a “collective investment scheme” as defined by Section 235 of the Financial Services and Markets Act 2000 (the “FSMA”) that is not a “recognised collective investment scheme” for the purposes of the FSMA and that has not been authorized or otherwise approved. As an unregulated scheme, the certificates cannot be marketed in the United Kingdom to the general public, except in accordance with the FSMA.
The distribution of this free writing prospectus (A) if made by a person who is not an authorized person under the FSMA, is being made only to, or directed only at, persons who (i) are outside the United Kingdom, or (ii) have professional experience in matters relating to investments and qualify as investment professionals in accordance with Article 19(5) of the FSMA (Financial Promotion) Order 2001 (the “Financial Promotion Order”), or (iii) are persons falling within Article 49(2)(a) through (d) (“high net worth companies, unincorporated associations, etc.”) of the Financial Promotion Order 2001 (all such persons together being referred to as “FPO Persons”); and (B) if made by a person who is an authorized person under the FSMA, is being made only to, or directed only at, persons who (i) are outside the United Kingdom, or (ii) have professional experience in participating in unregulated collective investment schemes and qualify as investment professionals in accordance with Article 14(3) of the FSMA (Promotion of Collective Investment Schemes)(Exemptions) Order 2001 (the “Promotion of Collective Investment Schemes Exemptions Order”), or (iii) are persons falling within Article 22(2)(a) through (d) (“high net worth companies, unincorporated associations, etc.”) of the Promotion of Collective Investment Schemes Exemptions Order (all such persons together being referred to as “PCIS Persons” and, together with the FPO Persons, the “Relevant Persons”). This free writing prospectus must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this free writing prospectus relates, including the offered certificates, is available only to Relevant Persons and will be engaged in only with Relevant Persons. Any persons other than Relevant Persons should not rely on this free writing prospectus.
Potential investors in the United Kingdom are advised that all, or most, of the protections afforded by the United Kingdom regulatory system will not apply to an investment in the certificates and that compensation will not be available under the United Kingdom Financial Services Compensation Scheme.
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UNITED KINGDOM SELLING RESTRICTIONS
Each underwriter has represented and agreed, that:
(a) in the United Kingdom, it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA received by it in connection with the issue or sale of any offered certificates in circumstances in which Section 21(1) of the FSMA does not apply to the issuing entity; and
(b) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the offered certificates in, from or otherwise involving the United Kingdom.
NOTICE TO RESIDENTS WITHIN EUROPEAN ECONOMIC AREA
THIS FREE WRITING PROSPECTUS HAS BEEN PREPARED ON THE BASIS THAT ANY OFFER OF CERTIFICATES (AS DEFINED HEREIN) IN ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA WHICH HAS IMPLEMENTED THE PROSPECTUS DIRECTIVE (EACH, A “RELEVANT MEMBER STATE”) WILL BE MADE PURSUANT TO AN EXEMPTION UNDER THE PROSPECTUS DIRECTIVE (AS DEFINED BELOW) FROM THE REQUIREMENT TO PUBLISH A PROSPECTUS FOR OFFERS OF CERTIFICATES. ACCORDINGLY, ANY PERSON MAKING OR INTENDING TO MAKE AN OFFER IN THAT RELEVANT MEMBER STATE OF CERTIFICATES WHICH ARE THE SUBJECT OF AN OFFERING CONTEMPLATED IN THIS FREE WRITING PROSPECTUS AS COMPLETED BY FINAL TERMS IN RELATION TO THE OFFER OF THOSE CERTIFICATES MAY ONLY DO SO IN CIRCUMSTANCES IN WHICH NO OBLIGATION ARISES FOR THE ISSUING ENTITY, THE DEPOSITOR OR AN UNDERWRITER TO PUBLISH A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS DIRECTIVE IN RELATION TO SUCH OFFER.
NONE OF THE ISSUING ENTITY, THE DEPOSITOR AND THE UNDERWRITERS HAS AUTHORISED, NOR DOES ANY OF THEM AUTHORISE, THE MAKING OF ANY OFFER OF CERTIFICATES IN CIRCUMSTANCES IN WHICH AN OBLIGATION ARISES FOR THE ISSUING ENTITY, THE DEPOSITOR OR AN UNDERWRITER TO PUBLISH OR SUPPLEMENT A PROSPECTUS FOR SUCH OFFER.
FOR THE PURPOSES OF THE DISCUSSION IN THIS SECTION ENTITLED “NOTICE TO RESIDENTS WITHIN EUROPEAN ECONOMIC AREA”, THE EXPRESSION “PROSPECTUS DIRECTIVE” MEANS DIRECTIVE 2003/71/EC (AND AMENDMENTS THERETO, INCLUDING THE 2010 PD AMENDING DIRECTIVE, TO THE EXTENT IMPLEMENTED IN THE RELEVANT MEMBER STATE), AND INCLUDES ANY RELEVANT IMPLEMENTING MEASURE IN THE RELEVANT MEMBER STATE AND THE EXPRESSION “2010 PD AMENDING DIRECTIVE” MEANS DIRECTIVE 2010/73/EU.
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EUROPEAN ECONOMIC AREA SELLING RESTRICTIONS
In relation to each Relevant Member State, each underwriter has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”) it has not made and will not make an offer of certificates to the public in that Relevant Member State other than:
(a) to any legal entity which is a “qualified investor” as defined in the Prospectus Directive;
(b) to fewer than 100 or, if the Relevant Member State has implemented the relevant provisions of the 2010 PD Amending Directive, 150 natural or legal persons (other than “qualified investors” as defined in the Prospectus Directive) subject to obtaining the prior consent of the relevant underwriters nominated by the depositor for any such offer; or
(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive;
provided no such offer of certificates referred to in (a) to (c) above shall require the issuing entity, the depositor or any of the underwriters to publish a prospectus pursuant to Article 3 of the Prospectus Directive.
For the purposes of this provision (i), the expression an “offer of certificates to the public” in relation to any certificates in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the certificates to be offered so as to enable an investor to decide to purchase or subscribe the certificates, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State, (ii) the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive to the extent implemented in the Relevant Member State) and includes any relevant implementing measure in the Relevant Member State, and (iii) the expression “2010 PD Amending Directive” means Directive 2010/73/EU.
PEOPLE’S REPUBLIC OF CHINA
THE OFFERED CERTIFICATES WILL NOT BE OFFERED OR SOLD IN THE PEOPLE’S REPUBLIC OF CHINA (EXCLUDING HONG KONG, MACAU AND TAIWAN, THE “PRC”) AS PART OF THE INITIAL DISTRIBUTION OF THE OFFERED CERTIFICATES BUT MAY BE AVAILABLE FOR PURCHASE BY INVESTORS RESIDENT IN THE PRC FROM OUTSIDE THE PRC.
THIS FREE WRITING PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN THE PRC TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE THE OFFER OR SOLICITATION IN THE PRC.
THE DEPOSITOR DOES NOT REPRESENT THAT THIS FREE WRITING PROSPECTUS MAY BE LAWFULLY DISTRIBUTED, OR THAT ANY OFFERED CERTIFICATES MAY BE LAWFULLY OFFERED, IN COMPLIANCE WITH ANY APPLICABLE REGISTRATION OR OTHER REQUIREMENTS IN THE PRC, OR PURSUANT TO AN EXEMPTION AVAILABLE THEREUNDER, OR ASSUME ANY RESPONSIBILITY FOR FACILITATING ANY SUCH DISTRIBUTION OR OFFERING. IN PARTICULAR, NO ACTION HAS BEEN TAKEN BY THE DEPOSITOR WHICH WOULD PERMIT AN OFFERING OF ANY OFFERED CERTIFICATES OR THE DISTRIBUTION OF THIS FREE WRITING PROSPECTUS IN THE PRC. ACCORDINGLY, THE OFFERED CERTIFICATES ARE NOT BEING OFFERED OR SOLD WITHIN THE PRC BY MEANS OF THIS FREE WRITING PROSPECTUS OR ANY OTHER DOCUMENT. NEITHER THIS FREE WRITING PROSPECTUS NOR ANY ADVERTISEMENT OR OTHER OFFERING MATERIAL MAY BE DISTRIBUTED OR PUBLISHED IN THE PRC, EXCEPT UNDER CIRCUMSTANCES THAT WILL RESULT IN COMPLIANCE WITH ANY APPLICABLE LAWS AND REGULATIONS.
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HONG KONG
EACH UNDERWRITER HAS REPRESENTED, WARRANTED AND AGREED THAT:
(1) IT HAS NOT OFFERED OR SOLD AND WILL NOT OFFER OR SELL IN HONG KONG, BY MEANS OF ANY DOCUMENT, ANY OFFERED CERTIFICATES (EXCEPT FOR OFFERED CERTIFICATES WHICH ARE A “STRUCTURED PRODUCT” AS DEFINED IN THE SECURITIES AND FUTURES ORDINANCE (CAP. 571) (THE “SFO”)) OF HONG KONG OTHER THAN (A) TO “PROFESSIONAL INVESTORS” AS DEFINED IN THE SFO AND ANY RULES MADE UNDER THE SFO; OR (B) IN OTHER CIRCUMSTANCES WHICH DO NOT RESULT IN THE DOCUMENT BEING A “PROSPECTUS” AS DEFINED IN THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE (CAP. 32) OF HONG KONG (THE “C(WUMP)O”) OR WHICH DO NOT CONSTITUTE AN OFFER TO THE PUBLIC WITHIN THE MEANING OF THE C(WUMP)O; AND
(2) IT HAS NOT ISSUED OR HAD IN ITS POSSESSION FOR THE PURPOSES OF ISSUE, AND WILL NOT ISSUE OR HAVE IN ITS POSSESSION FOR THE PURPOSES OF ISSUE, WHETHER IN HONG KONG OR ELSEWHERE, ANY ADVERTISEMENT, INVITATION OR DOCUMENT RELATING TO THE OFFERED CERTIFICATES, WHICH IS DIRECTED AT, OR THE CONTENTS OF WHICH ARE LIKELY TO BE ACCESSED OR READ BY, THE PUBLIC OF HONG KONG (EXCEPT IF PERMITTED TO DO SO UNDER THE SECURITIES LAWS OF HONG KONG) OTHER THAN WITH RESPECT TO OFFERED CERTIFICATES WHICH ARE OR ARE INTENDED TO BE DISPOSED OF ONLY TO PERSONS OUTSIDE HONG KONG OR ONLY TO “PROFESSIONAL INVESTORS” AS DEFINED IN THE SFO AND ANY RULES MADE UNDER THE SFO.
W A R N I N G
THE CONTENTS OF THIS FREE WRITING PROSPECTUS HAVE NOT BEEN REVIEWED OR APPROVED BY ANY REGULATORY AUTHORITY IN HONG KONG. YOU ARE ADVISED TO EXERCISE CAUTION IN RELATION TO THE OFFER. IF YOU ARE IN ANY DOUBT ABOUT ANY OF THE CONTENTS OF THIS FREE WRITING PROSPECTUS, YOU SHOULD OBTAIN INDEPENDENT PROFESSIONAL ADVICE.
NOTICE TO RESIDENTS OF THE REPUBLIC OF KOREA
THIS FREE WRITING PROSPECTUS IS, AND UNDER NO CIRCUMSTANCES IS TO BE CONSTRUED AS, A PUBLIC OFFERING OF SECURITIES IN KOREA. NEITHER THE ISSUER NOR ANY OF ITS AGENTS MAKE ANY REPRESENTATION WITH RESPECT TO THE ELIGIBILITY OF ANY RECIPIENTS OF THIS FREE WRITING PROSPECTUS TO ACQUIRE THE OFFERED CERTIFICATES UNDER THE LAWS OF KOREA, INCLUDING, BUT WITHOUT LIMITATION, THE FOREIGN EXCHANGE TRANSACTION LAW AND REGULATIONS THEREUNDER (THE “FETL”). THE OFFERED CERTIFICATES HAVE NOT BEEN REGISTERED WITH THE FINANCIAL SERVICES COMMISSION OF KOREA FOR PUBLIC OFFERING IN KOREA, AND NONE OF THE OFFERED CERTIFICATES MAY BE OFFERED, SOLD OR DELIVERED, DIRECTLY OR INDIRECTLY, OR OFFERED OR SOLD TO ANY PERSON FOR RE-OFFERING OR RESALE, DIRECTLY OR INDIRECTLY IN KOREA OR TO ANY RESIDENT OF KOREA EXCEPT PURSUANT TO THE FINANCIAL INVESTMENT SERVICES AND CAPITAL MARKETS ACT AND THE DECREES AND REGULATIONS THEREUNDER (THE “FSCMA”), THE FETL AND ANY OTHER APPLICABLE LAWS, REGULATIONS AND MINISTERIAL GUIDELINES IN KOREA. WITHOUT PREJUDICE TO THE FOREGOING, THE NUMBER OF OFFERED CERTIFICATES OFFERED IN KOREA OR TO A RESIDENT OF KOREA SHALL BE LESS THAN FIFTY AND FOR A PERIOD OF ONE YEAR FROM THE ISSUE DATE OF THE OFFERED CERTIFICATES, NONE OF THE OFFERED CERTIFICATES MAY BE DIVIDED RESULTING IN AN INCREASED NUMBER OF OFFERED CERTIFICATES. FURTHERMORE, THE OFFERED CERTIFICATES MAY NOT BE RESOLD TO KOREAN RESIDENTS UNLESS THE PURCHASER OF THE OFFERED CERTIFICATES COMPLIES WITH ALL APPLICABLE REGULATORY REQUIREMENTS (INCLUDING, BUT NOT LIMITED TO, GOVERNMENT REPORTING APPROVAL REQUIREMENTS UNDER THE
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FETL AND ITS SUBORDINATE DECREES AND REGULATIONS) IN CONNECTION WITH THE PURCHASE OF THE OFFERED CERTIFICATES.
SINGAPORE
THIS FREE WRITING PROSPECTUS HAS NOT BEEN REGISTERED AS A PROSPECTUS WITH THE MONETARY AUTHORITY OF SINGAPORE. ACCORDINGLY, THIS FREE WRITING PROSPECTUS AND ANY OTHER DOCUMENT OR MATERIAL IN CONNECTION WITH THE OFFER OR SALE, OR INVITATION FOR SUBSCRIPTION OR PURCHASE, OF THE OFFERED CERTIFICATES MAY NOT BE CIRCULATED OR DISTRIBUTED, NOR MAY THE OFFERED CERTIFICATES BE OFFERED OR SOLD, OR BE MADE THE SUBJECT OF AN INVITATION FOR SUBSCRIPTION OR PURCHASE, WHETHER DIRECTLY OR INDIRECTLY, TO PERSONS IN SINGAPORE OTHER THAN (I) TO AN INSTITUTIONAL INVESTOR UNDER SECTION 274 OF THE SECURITIES AND FUTURES ACT, CHAPTER 289 OF SINGAPORE (THE “SFA”), (II) TO A RELEVANT PERSON, OR ANY PERSON PURSUANT TO SECTION 275(1A) OF THE SFA, IN ACCORDANCE WITH THE CONDITIONS SPECIFIED IN SECTION 275 OF THE SFA OR (III) OTHERWISE PURSUANT TO, AND IN ACCORDANCE WITH THE CONDITIONS OF, ANY OTHER APPLICABLE PROVISION OF THE SFA.
WHERE THE OFFERED CERTIFICATES ARE SUBSCRIBED OR PURCHASED UNDER SECTION 275 OF THE SFA BY A RELEVANT PERSON WHICH IS: (A) A CORPORATION (WHICH IS NOT AN ACCREDITED INVESTOR) THE SOLE BUSINESS OF WHICH IS TO HOLD INVESTMENTS AND THE ENTIRE SHARE CAPITAL OF WHICH IS OWNED BY ONE OR MORE INDIVIDUALS, EACH OF WHOM IS AN ACCREDITED INVESTOR; OR (B) A TRUST (WHERE THE TRUSTEE IS NOT AN ACCREDITED INVESTOR) WHOSE SOLE PURPOSE IS TO HOLD INVESTMENTS AND EACH BENEFICIARY IS AN ACCREDITED INVESTOR, SHARES, DEBENTURES AND UNITS OF SHARES AND DEBENTURES OF THAT CORPORATION OR THE BENEFICIARIES’ RIGHTS AND INTEREST IN THAT TRUST SHALL NOT BE TRANSFERABLE FOR 6 MONTHS AFTER THAT CORPORATION OR THAT TRUST HAS ACQUIRED THE OFFERED CERTIFICATES UNDER SECTION 275 OF THE SFA EXCEPT: (1) TO AN INSTITUTIONAL INVESTOR UNDER SECTION 274 OF THE SFA OR TO A RELEVANT PERSON, OR ANY PERSON PURSUANT TO SECTION 275(1A) OF THE SFA, AND IN ACCORDANCE WITH THE CONDITIONS SPECIFIED IN SECTION 275 OF THE SFA; (2) WHERE NO CONSIDERATION IS GIVEN FOR THE TRANSFER; OR (3) BY OPERATION OF LAW.
JAPAN
THE OFFERED CERTIFICATES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE FINANCIAL INSTRUMENTS AND EXCHANGE LAW OF JAPAN, AS AMENDED (THE “FIEL”), AND DISCLOSURE UNDER THE FIEL HAS NOT BEEN AND WILL NOT BE MADE WITH RESPECT TO THE OFFERED CERTIFICATES. ACCORDINGLY, EACHunderwriter HAS REPRESENTED AND AGREED THAT IT HAS NOT, DIRECTLY OR INDIRECTLY, OFFERED OR SOLD AND WILL NOT, DIRECTLY OR INDIRECTLY, OFFER OR SELL ANY CERTIFICATES IN JAPAN OR TO, OR FOR THE BENEFIT OF, ANY RESIDENT OF JAPAN (WHICH TERM AS USED HEREIN MEANS ANY PERSON RESIDENT IN JAPAN, INCLUDING ANY CORPORATION OR OTHER ENTITY ORGANIZED UNDER THE LAWS OF JAPAN) OR TO OTHERS FOR REOFFERING OR RE SALE, DIRECTLY OR INDIRECTLY, IN JAPAN OR TO, OR FOR THE BENEFIT OF, ANY RESIDENT OF JAPAN EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF, AND OTHERWISE IN COMPLIANCE WITH, THE FIEL AND OTHER RELEVANT LAWS, REGULATIONS AND MINISTERIAL GUIDELINES OF JAPAN. AS PART OF THIS OFFERING OF THE OFFERED CERTIFICATES, THEunderwriters MAY OFFER THE OFFERED CERTIFICATES IN JAPAN TO UP TO 49 OFFEREES IN ACCORDANCE WITH THE ABOVE PROVISIONS.
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EXECUTIVE SUMMARY
This Executive Summary does not include all of the information you need to consider in making your investment decision. You are advised to carefully read, and should rely solely on, the detailed information appearing elsewhere in this free writing prospectus relating to the certificates offered by this free writing prospectus and the underlying mortgage loans.
CERTIFICATES
Class | Initial Certificate Balance or Notional Balance(1) | Approximate Initial Credit Support | Description of Pass- Through Rate | Assumed Final Distribution Date(2) | Approx- imate Initial Pass- Through Rate | Weighted Average Life (Yrs.)(6) | Principal Window (Mos.)(6) | Anticipated Ratings (Moody’s/Fitch/DBRS)(3) | |||||||||
Offered Certificates | |||||||||||||||||
A-1 | $ | 38,731,000 | 30.000%(7) | (4) | August 2020 | % | 2.79 | 1 – 58 | Aaa(sf)/AAAsf/AAA(sf) | ||||||||
A-2 | $ | 72,542,000 | 30.000%(7) | (4) | October 2020 | % | 4.87 | 58 – 60 | Aaa(sf)/AAAsf/AAA(sf) | ||||||||
A-SB | $ | 62,544,000 | 30.000%(7) | (4) | July 2025 | % | 7.47 | 60 – 117 | Aaa(sf)/AAAsf/AAA(sf) | ||||||||
A-3 | $ | 215,000,000 | 30.000%(7) | (4) | September 2025 | % | 9.79 | 117 – 119 | Aaa(sf)/AAAsf/AAA(sf) | ||||||||
A-4 | $ | 263,315,000 | 30.000%(7) | (4) | September 2025 | % | 9.86 | 119 – 119 | Aaa(sf)/AAAsf/AAA(sf) | ||||||||
X-A | $ | 705,700,000(5) | N/A | Variable(5) | September 2025 | % | N/A | N/A | Aa1(sf)/AAAsf/AAA(sf) | ||||||||
A-M | $ | 53,568,000 | 24.250% | (4) | September 2025 | % | 9.86 | 119 – 119 | Aa2(sf)/AAAsf/AAA(sf) | ||||||||
B | $ | 54,732,000 | 18.375% | (4) | September 2025 | % | 9.86 | 119 – 119 | A1(sf)/AA-sf/AA(sf) | ||||||||
C | $ | 43,088,000 | 13.750% | (4) | September 2025 | % | 9.86 | 119 – 119 | NR/A-sf/A(sf) | ||||||||
Non-Offered Certificates(8) | |||||||||||||||||
X-B | $ | 97,820,000(5) | N/A | Variable(5) | September 2025 | % | N/A | N/A | NR/A-sf/AAA(sf) | ||||||||
X-C | $ | 51,238,000(5) | N/A | Variable(5) | October 2025 | % | N/A | N/A | NR/BBB-sf/AAA(sf) | ||||||||
X-D | $ | 33,772,000(5) | N/A | Variable(5) | October 2025 | % | N/A | N/A | NR/NR/AAA(sf) | ||||||||
X-E | $ | 13,974,000(5) | N/A | Variable(5) | October 2025 | % | N/A | N/A | NR/NR/AAA(sf) | ||||||||
X-F | $ | 29,113,392(5) | N/A | Variable(5) | October 2025 | % | N/A | N/A | NR/NR/AAA(sf) | ||||||||
D | $ | 51,238,000 | 8.250% | (4) | October 2025 | % | 9.94 | 119 – 120 | NR/BBB-sf/BBB(low)(sf) | ||||||||
E | $ | 24,455,000 | 5.625% | (4) | October 2025 | % | 9.95 | 120 – 120 | NR/BB-sf/BB(low)(sf) | ||||||||
F | $ | 9,317,000 | 4.625% | (4) | October 2025 | % | 9.95 | 120 – 120 | NR/B-sf/B(high)(sf) | ||||||||
G | $ | 13,974,000 | 3.125% | (4) | October 2025 | % | 9.95 | 120 – 120 | NR/NR/B(low)(sf) | ||||||||
H | $ | 29,113,392 | 0.000% | (4) | October 2025 | % | 9.95 | 120 – 120 | NR/NR/NR | ||||||||
V(9) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | NR/NR/NR | |||||||||
R(9) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | NR/NR/NR | |||||||||
LR(9) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | NR/NR/NR |
(1) | Approximate; subject to a variance of plus or minus 5.0%. In addition, the notional amounts of the Class X-A, Class X-B, Class X-C, Class X-D, Class X-E and Class X-F certificates may vary depending upon the final pricing of the classes of certificates whose certificate balances comprise such notional amounts, and, if as a result of such pricing the pass-through rate of the Class X-A, Class X-B, Class X-C, Class X-D, Class X-E or Class X-F certificates, as applicable, would be equal to zero, such class of certificates will not be issued on the closing date of this securitization. |
(2) | The assumed final distribution date with respect to any class of certificates (other than the Class V, Class R and Class LR certificates) is the distribution date on which the final distribution would occur for that class of certificates based on (i) modeling assumptions described in this free writing prospectus, (ii) assumptions that there are no prepayments, delinquencies or losses on the mortgage loans and (iii) assumptions that there are no extensions of maturity dates and that mortgage loans with anticipated repayment dates are repaid on their respective anticipated repayment dates. The rated final distribution date for each class of offered certificates is the distribution date in October 2048. The actual performance and experience of the mortgage loans will likely differ from such assumptions. See “Yield and Maturity Considerations” and “Ratings” in this free writing prospectus. |
(3) | It is a condition to issuance of the certificates that the certificates receive the ratings set forth above. Ratings shown are those of Moody’s Investors Service, Inc., Fitch Ratings, Inc. and DBRS, Inc. Certain nationally recognized statistical rating organizations, as such term is defined in Section 3(a)(62) of the Securities Exchange Act of 1934, as amended, that were not hired by the depositor may use information they receive pursuant to Rule 17g-5 under the Securities Exchange Act of 1934, as amended, or otherwise to rate the certificates. There can be no assurance as to what ratings a nationally recognized statistical rating organization other than Moody’s Investors Service, Inc., Fitch Ratings, Inc. and DBRS, Inc. would assign or that its report will not express differing, possibly negative, views of the mortgage loans and/or the offered certificates. See “Risk Factors—Risks Related to the Offered Certificates—Ratings of the Offered Certificates” and “Ratings” in this free writing prospectus. |
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(4) | For any distribution date, the pass-through rates on the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class A-M, Class B, Class C, Class D, Class E, Class F, Class G and Class H certificates will equal one of (i) a fixedper annum rate, (ii) the weighted average of the net mortgage rates on the mortgage loans (in each case, adjusted, if necessary, to accrue on the basis of a 360-day year consisting of twelve 30-day months) as of their respective due dates in the month preceding the month in which such distribution date occurs, (iii) a rate equal to the lesser of a specified pass-through rate and the rate specified in clause (ii), or (iv) the rate specified in clause (ii), less a specified rate. |
(5) | The Class X-A, Class X-B, Class X-C, Class X-D, Class X-E and Class X-F certificates will not have certificate balances. None of the Class X-A, Class X-B, Class X-C, Class X-D, Class X-E or Class X-F certificates will be entitled to distributions of principal. The Class X-A, Class X-B, Class X-C, Class X-D, Class X-E and Class X-F certificates will accrue interest on their respective notional balance and at their respective pass-through rate as described in “Description of the Offered Certificates—General” and “—Distributions” in this free writing prospectus. |
(6) | The weighted average life and principal window during which distributions of principal would be received as set forth in the table with respect to each class of certificates (other than the Class X-A, Class X-B, Class X-C, Class X-D, Class X-E, Class X-F, Class V, Class R and Class LR certificates) are based on (i) modeling assumptions described in this free writing prospectus, (ii) assumptions that there are no prepayments, delinquencies or losses on the mortgage loans and (iii) assumptions that there are no extensions of maturity dates and that mortgage loans with anticipated repayment dates are repaid on their respective anticipated repayment dates. |
(7) | Represents the approximate initial credit support for the Class A-1, Class A-2, Class A-3, Class A-SB and Class A-4 certificates, in the aggregate. |
(8) | The classes of certificates set forth below “Non-Offered Certificates” in the table are not offered by this free writing prospectus. |
(9) | The Class V certificates will not have a certificate balance, notional balance, pass-through rate, assumed final distribution date, rated final distribution date or rating. The Class V certificates represent undivided interests in excess interest accruing on an anticipated repayment date loan, as further described in this free writing prospectus. The Class V certificates will not be entitled to distributions in respect of principal or interest other than excess interest. The Class R and Class LR certificates will each not have a certificate balance, notional balance, pass-through rate, assumed final distribution date, rated final distribution date or rating. The Class R and Class LR certificates represent the residual interests in each Trust REMIC, as further described in this free writing prospectus. The Class R and Class LR certificates will not be entitled to distributions of principal or interest. |
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The following table shows information regarding the mortgage loans and the mortgaged properties as of the cut-off date. All weighted averages set forth below are based on the principal balances of the mortgage loans as of the cut-off date.
The Mortgage Pool
Outstanding Pool Balance as of the Cut-off Date(1) | $931,617,393 |
Number of Mortgage Loans | 65 |
Number of Mortgaged Properties | 96 |
Average Cut-off Date Mortgage Loan Balance | $14,332,575 |
Average Cut-off Date Mortgage Property Balance | $9,704,348 |
Weighted Average Mortgage Rate | 4.4889% |
Weighted Average Cut-off Date Remaining Term to Maturity or ARD (in months)(2) | 114 |
Weighted Average U/W NCF Debt Service Coverage Ratio(2)(3)(5) | 1.77x |
Weighted Average Cut-off Date Loan-to-Value Ratio(2)(3)(4)(5) | 65.5% |
Weighted Average Cut-off Date U/W NOI Debt Yield(2)(3) | 10.4% |
(1) | Subject to a permitted variance of plus or minus 5.0%. |
(2) | Calculated with respect to an anticipated repayment date for 2 mortgage loans, representing approximately 2.2% of the outstanding pool balance as of the cut-off date. |
(3) | In the case of the 11 Madison Avenue mortgage loan and the NMS Los Angeles Multifamily Portfolio mortgage loan, representing approximately 14.5% of the outstanding pool balance as of the cut-off date, each with one or morepari passu companion loans that will not be included in the mortgage pool, the debt service coverage ratios, loan-to-value ratios and debt yields for such mortgage loans have been calculated based on the mortgage loan included in the mortgage pool and the relatedpari passu companion loans not included in the issuing entity. |
(4) | In the case of Atlanta Multifamily Portfolio mortgage loan, representing approximately 4.8% of the initial outstanding pool balance as of the cut-off date, following an initial interest only period of 18 months, the mortgage loan amortizes based on a non-standard amortization schedule attached to this free writing prospectus as Annex H, and the debt service coverage ratio for such mortgage loan was calculated based on the debt service for the first 12 months of amortizing payments. |
(5) | In the case of 3 mortgaged properties, collectively representing approximately 6.4% of the outstanding pool balance as of the cut-off date, the loan-to-value ratio for such mortgaged properties has been calculated based on the “as complete” or “as renovated” appraised value of the related mortgaged properties. In the case of 3 mortgage loans, collectively representing 17.8% of the outstanding pool balance as of the cut-off date, the loan-to-value ratio for such mortgage loans has been calculated based on the “as portfolio” appraised value. For further description, see the definition of “Appraised Value” in “Description of the Mortgage Pool—Additional Mortgage Loan Information” in this free writing prospectus. |
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SUMMARY | ||
This summary highlights selected information from this free writing prospectus and does not include all of the relevant information you need to consider in making your investment decision. You are advised to carefully read, and should rely solely on, the detailed information appearing elsewhere in this free writing prospectus and in the attached prospectus. | ||
Title of Certificates | COMM 2015-CCRE27 Mortgage Trust Commercial Mortgage Pass-Through Certificates. | |
RELEVANT PARTIES AND DATES | ||
Issuing Entity | COMM 2015-CCRE27 Mortgage Trust, a New York common law trust. The issuing entity will be formed on the closing date pursuant to a pooling and servicing agreement by and among the depositor, the trustee, the certificate administrator, the operating advisor, the master servicer and the special servicer. See “The Issuing Entity” in this free writing prospectus. | |
Depositor | Deutsche Mortgage & Asset Receiving Corporation, a Delaware corporation. Our principal offices are located at 60 Wall Street, New York, New York 10005. Our telephone number is (212) 250-2500. See “The Depositor” in this free writing prospectus and “The Depositor” in the prospectus. | |
Sponsors | German American Capital Corporation, a Maryland corporation, The Bank of New York Mellon, a New York corporation, KeyBank National Association, a national banking association, and Cantor Commercial Real Estate Lending, L.P., a Delaware limited partnership. The sponsors are the entities that will organize and initiate the issuance of the certificates by transferring or causing the transfer of the mortgage loans to the depositor. The depositor in turn will transfer the mortgage loans to the issuing entity and the issuing entity will issue the certificates. See “The Sponsors,Mortgage Loan Sellers and Originators” in this free writing prospectus and “The Sponsor” in the attached prospectus. | |
Mortgage Loan Sellers | German American Capital Corporation (a sponsor and an affiliate of Deutsche Bank Securities Inc., an underwriter, and Deutsche Mortgage & Asset Receiving Corporation, the depositor). | |
The Bank of New York Mellon (a sponsor). | ||
KeyBank National Association (a sponsor and a primary servicer and an affiliate of KeyBanc Capital Markets Inc., an underwriter). | ||
Cantor Commercial Real Estate Lending, L.P. (a sponsor and an affiliate of Cantor Fitzgerald & Co. and CastleOak Securities, L.P., two of the underwriters, and Berkeley Point Capital LLC, a primary servicer). | ||
See “The Sponsors, Mortgage Loan Sellers and Originators” in this free writing prospectus. |
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The number and total cut-off date principal balance of the mortgage loans that will be transferred to the depositor by the respective mortgage loan sellers are as follows: |
Mortgage Loan Seller | Number of Mortgage Loans | Total Cut-off Date Principal Balance | % of Initial Outstanding Pool Balance | |||||||
German American Capital Corporation | 20 | $ | 397,893,862 | 42.7 | % | |||||
The Bank of New York Mellon | 12 | 196,225,586 | 21.1 | |||||||
KeyBank National Association | 25 | 194,035,645 | 20.8 | |||||||
Cantor Commercial Real Estate Lending, L.P | 8 | 143,462,300 | 15.4 | |||||||
Total | 65 | $ | 931,617,393 | 100.0 | % |
Originators | Except as indicated below, each mortgage loan seller or one of its affiliates originated or acquired (either directly or, in some cases, through table funding arrangements) each of the mortgage loans as to which it is acting as mortgage loan seller. | |
The mortgage loan secured by the mortgaged property identified on Annex A-1 to this free writing prospectus as 11 Madison Avenue, representing, in the aggregate, approximately 7.5% of the outstanding pool balance as of the cut-off date, and as to which mortgage loan German American Capital Corporation will act as mortgage loan seller, is part of a loan combination that was co-originated by German American Capital Corporation, Morgan Stanley Bank, N.A. and Wells Fargo Bank, National Association. | ||
See “The Sponsors, Mortgage Loan Sellers and Originators” in this free writing prospectus. | ||
Master Servicer | Midland Loan Services, a Division of PNC Bank, National Association, a national banking association. The master servicer will act in such capacity under the pooling and servicing agreement for this transaction. See “The Servicers—The Master Servicer” in this free writing prospectus. The principal servicing office of Midland Loan Services, a Division of PNC Bank, National Association is located at 10851 Mastin Street, Building 82, Suite 300, Overland Park, Kansas 66210, and its telephone number is (913) 253-9000. | |
The master servicer will be primarily responsible for servicing and administering, directly or through sub-servicers or primary servicers, the mortgage loans (other than non-serviced mortgage loans): (a) as to which there is no default or reasonably foreseeable default that would give rise to a transfer of servicing to the special servicer; (b) as to which any such default or reasonably foreseeable default has been corrected, including as part of a workout; and (c) other than with respect to certain major decisions or special servicer decisions, which will be processed by the special servicer, as more fully described in this free writing prospectus. In addition, the master servicer will be the primary party responsible for making (1) principal and interest advances with respect to each mortgage loan included in the issuing entity and (2) property advances under the pooling and servicing agreement with respect to the mortgage loans (other than any non-serviced mortgage loan) and any serviced loan combination that it is servicing, subject in each case to a nonrecoverability |
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determination. The fee of the master servicer with respect to the mortgage loans (and the serviced companion loans) will be payable monthly from amounts received in respect of interest on each mortgage loan master and/or primary serviced by the master servicer (prior to application of such interest payments to make payments on the certificates). The servicing fee (which will include the fee of the master servicer and the fees of any primary servicer and sub-servicer) will equal a rateper annum equal to the administrative fee rate set forth on Annex A-1 of this free writing prospectus for each mortgage loan (net of the trustee/certificate administrator fee rate, operating advisor fee rate and CREFC® license fee rate) multiplied by the stated principal balance of the related mortgage loan calculated on the same accrual basis as the related mortgage loan. The master servicer will also be entitled to receive income from investment of funds in certain accounts and certain fees paid by the borrowers. See “The Servicers—The Master Servicer” and “The Pooling and Servicing Agreement—Servicing Compensation and Payment of Expenses” in this free writing prospectus. | ||
The 11 Madison Avenue loan combination will be serviced by the master servicer, KeyBank National Association (the “MAD 2015-11MD master servicer”), under the MAD 2015-11MD trust and servicing agreement (the “MAD 2015-11MD trust and servicing agreement”). With respect to the 11 Madison Avenue mortgage loan, the MAD 2015-11MD master servicer will be entitled to receive a primary servicing fee under the MAD 2015-11MD trust and servicing agreement (which fee will accrue at a rate equal to 0.00125%per annum on an actual/360 basis), payable monthly from the 11 Madison Avenue mortgage loan, prior to application of such interest to make payments on the certificates. See “Description of the Mortgage Pool—Loan Combinations—The 11 Madison Avenue Loan Combination” and “The Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loan” in this free writing prospectus. | ||
The NMS Los Angeles Multifamily Portfolio loan combination will be serviced by the master servicer under the pooling and servicing agreement for this transaction. See “Description of the Mortgage Pool—Loan Combinations—The NMS Los Angeles Multifamily Portfolio Loan Combination” in this free writing prospectus. | ||
Special Servicer | Rialto Capital Advisors, LLC, a Delaware limited liability company. The special servicer will be responsible for the servicing and administration of the specially serviced loans and REO properties (other than non-serviced mortgage loans, non-serviced loan combinations and excluded special servicer mortgage loans) as well as the processing of certain major decisions and special servicer decisions for such mortgage loans and REO properties. If the special servicer becomes a borrower party with respect to any mortgage loan (referred to as an “excluded special servicer mortgage loan”), if any, the special servicer will be required to resign. The directing holder (prior to the occurrence and continuance of a control termination event) will be entitled to appoint a separate special servicer that is not a |
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borrower party (referred to as an “excluded special servicer”) with respect to such excluded special servicer mortgage loan unless such excluded special servicer mortgage loan is also an excluded mortgage loan, in which case the largest controlling class certificateholder (by certificate balance) that is not an excluded controlling class holder will be entitled to appoint the excluded special servicer. See “—Directing Holder” below. Any excluded special servicer will be required to perform all of the obligations of the special servicer and will be entitled to all special servicing compensation with respect to such excluded special servicer mortgage loan earned during such time as the related mortgage loan is an excluded special servicer mortgage loan. See “The Servicers—The Special Servicer” and “The Pooling and Servicing Agreement—Special Servicing” in this free writing prospectus. Rialto Capital Advisors, LLC was appointed to be the special servicer by RREF II CMBS AIV, LP, which is expected to be the initial directing holder (other than with respect to any non-serviced mortgage loans, non-serviced loan combinations and excluded mortgage loans, if any). The principal servicing office of Rialto Capital Advisors, LLC is located at 790 NW 107th Avenue, 4th Floor, Miami, Florida 33172 and its telephone number is (305) 485-2077. | ||
If necessary, the 11 Madison Avenue loan combination will be specially serviced by the special servicer, KeyBank National Association, under the MAD 2015-11MD trust and servicing agreement. See “Description of the Mortgage Pool—Loan Combinations—The 11 Madison Avenue Loan Combination” and “The Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loan” in this free writing prospectus. | ||
The NMS Los Angeles Multifamily Portfolio loan combination will be specially serviced by the special servicer pursuant to the pooling and servicing agreement for this transaction. See “Description of the Mortgage Pool—Loan Combinations—TheNMS Los Angeles Multifamily Portfolio Loan Combination” in this free writing prospectus. | ||
The principal compensation to be paid to the special servicer in respect of its special servicing activities will be the special servicing fee, the workout fee and the liquidation fee. | ||
The special servicing fee will equal 0.25%per annum of the stated principal balance of the related specially serviced loan (including any related serviced companion loan) or REO loan (or mortgage loan or serviced loan combination as to which the related mortgaged property has become an REO property), and will be payable monthly. The special servicing fee for each specially serviced loan (including any related serviced companion loan) will accrue on the same basis as interest accrues on such specially serviced loan. | ||
The workout fee will generally be payable with respect to each specially serviced loan (including any related serviced companion loan) which has become a “corrected mortgage loan” (which will occur (i) with respect to a specially serviced loan as to which there has been a payment default, when the borrower has |
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brought the mortgage loan current and thereafter made three consecutive full and timely monthly payments, including pursuant to any workout and (ii) with respect to any other specially serviced loan, when the related default is cured or the other circumstances pursuant to which it became a specially serviced loan cease to exist in the good faith judgment of the special servicer). The workout fee will be payable out of each collection of interest and principal (including scheduled payments, prepayments, balloon payments, and payments at maturity) received on the related mortgage loan (or serviced loan combination, as applicable) for so long as it remains a corrected mortgage loan, in an amount equal to the lesser of (1) 1.0% of each such collection of interest and principal and (2) $1,000,000 in the aggregate with respect to any particular workout of a specially serviced loan. | ||
A liquidation fee will generally be payable with respect to each specially serviced loan (including any related serviced companion loan) as to which the special servicer obtains a full or discounted payoff from the related borrower or which is repurchased by the related mortgage loan seller outside the applicable cure period and, except as otherwise described in this free writing prospectus, with respect to any specially serviced loan or REO property as to which the special servicer receives any liquidation proceeds. The liquidation fee for each specially serviced loan (including any related serviced companion loan) and REO property will be payable from the related payment or proceeds in an amount equal to the lesser of (1) 1.0% of such payment or proceeds and (2) $1,000,000. | ||
Workout fees and liquidation fees paid by the issuing entity with respect to each mortgage loan or serviced loan combination will be subject to an aggregate cap per mortgage loan or serviced loan combination of $1,000,000 as described in “The Pooling and Servicing Agreement—Special Servicing—Special Servicing Compensation” in this free writing prospectus. Any workout fees or liquidation fees paid to a predecessor or successor special servicer will not be taken into account in determining the cap. | ||
The special servicer will also be entitled to receive income from investment of funds in certain accounts and certain fees paid by the borrowers. | ||
The foregoing compensation to the special servicer may result in shortfalls in payments to certificateholders. See “The Servicers—The Special Servicer” and “The Pooling and Servicing Agreement—Special Servicing—Special Servicing Compensation” in this free writing prospectus. | ||
Primary Servicers | KeyBank National Association, a national banking association. KeyBank National Association will act as primary servicer with respect to the mortgage loans which are being transferred to the issuing entity by KeyBank National Association. These mortgage loans represent 20.8% of the outstanding pool balance as of the cut-off date. See “The Servicers—The Primary Servicers—KeyBank National Association” in this free writing prospectus. The principal servicing office of KeyBank National |
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Association is located at 11501 Outlook Street, Suite 300, Overland Park, Kansas 66211, and its telephone number is (888) 979-4220. The master servicer will pay the fees of the primary servicer or servicers to the extent such fees are received. KeyBank National Association is also a sponsor and a mortgage loan seller and an affiliate of KeyBanc Capital Markets Inc., an underwriter. | ||
Berkeley Point Capital LLC, a Delaware limited liability company. Berkeley Point Capital LLC will act as primary servicer with respect to the mortgage loans secured by the mortgaged properties identified on Annex A-1 to this free writing prospectus as NMS Los Angeles Multifamily Portfolio, GSP MHP Portfolio I and Brookhaven MHP, representing 7.0%, 1.9% and 0.8%, respectively, of the outstanding pool balance as of the cut-off date, which will be transferred to the issuing entity by Cantor Commercial Real Estate Lending, L.P. See “The Servicers—The Primary Servicers—Berkeley Point Capital LLC” in this free writing prospectus. In addition, with respect to 4 mortgage loans secured by mortgaged properties representing approximately 4.3% of the outstanding pool balance as of the cut-off date that will be transferred to the issuing entity by Cantor Commercial Real Estate Lending, L.P., Berkeley Point Capital LLC will have the right to assume limited subservicing duties consisting of performing inspections and collecting financial statements. The principal servicing office of Berkeley Point Capital LLC is located at One Beacon Street, 14th Floor, Boston, Massachusetts 02108. The master servicer will pay the fees of the primary servicer or servicers to the extent such fees are received. Berkeley Point Capital LLC is an affiliate of Cantor Commercial Real Estate Lending, L.P., a sponsor and a mortgage loan seller, and Cantor Fitzgerald & Co. and CastleOak Securities, L.P., each an underwriter. | ||
Trustee | Wells Fargo Bank, National Association, a national banking association. The corporate trust offices of Wells Fargo Bank, National Association are located at 9062 Old Annapolis Road, Columbia, Maryland 21045. | |
Following the transfer of the underlying mortgage loans into the issuing entity, the trustee, on behalf of the issuing entity, will become the mortgagee of record with respect to each mortgage loan transferred to the issuing entity (other than with respect to non-serviced mortgage loans). In addition (subject to the terms of the pooling and servicing agreement), the trustee will be primarily responsible for back-up advancing. See “The Trustee”in this free writing prospectus. | ||
The mortgagee of record with respect to the 11 Madison Avenue mortgage loan is expected to be Wilmington Trust, National Association, the trustee under the MAD 2015-11MD trust and servicing agreement. | ||
See “Description of the Mortgage Pool—Loan Combinations” and “The Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loan” in this free writing prospectus. |
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Certificate Administrator | |||
and Custodian | Wells Fargo Bank, National Association, a national banking association. The corporate trust offices of the certificate administrator are located at 9062 Old Annapolis Road, Columbia, Maryland 21045, and the office designated for purposes of certificate transfers and exchanges is located at Wells Fargo Center, Sixth Street & Marquette Avenue, Minneapolis, Minnesota 55479-0113, ATTN: COMM 2015-CCRE27 Mortgage Trust. | ||
The custodian with respect to the 11 Madison Avenue mortgage loan is expected to be Wells Fargo Bank, National Association, the custodian under the MAD 2015-11MD trust and servicing agreement. | |||
The certificate administrator will be responsible for: (a) distributing payments to certificateholders, (b) delivering or otherwise making available certain reports to certificateholders and (c) in its capacity as 17g-5 information provider, making available certain information to rating agencies in accordance with Rule 17g-5 under the Securities Exchange Act of 1934, as amended. In addition, the certificate administrator will have additional duties with respect to tax administration, custody of the mortgage files and serving as the authenticating agent and certificate registrar. See “The Trustee, Certificate Administrator and Custodian” in this free writing prospectus. | |||
The fees of the trustee, custodian and certificate administrator will be payable monthly from amounts received in respect of interest on each mortgage loan (prior to application of such interest payments to make payments on the certificates), and will be equal to, in the aggregate, 0.0048%per annum of the stated principal balance of the related mortgage loan calculated on the same accrual basis as the related mortgage loan. The certificate administrator will also be entitled to receive income from investment of funds in certain accounts maintained on behalf of the issuing entity. | |||
Operating Advisor | Park Bridge Lender Services LLC, a New York limited liability company and an indirect wholly-owned subsidiary of Park Bridge Financial LLC. | ||
With respect to each mortgage loan (other than any non-serviced mortgage loan) or serviced loan combination, at any time during the period when a “Control Termination Event,” as described under “The Pooling and Servicing Agreement—The Directing Holder” in this free writing prospectus, has occurred and is continuing: | |||
(i) | the special servicer will be required to consult with the operating advisor with regard to certain major decisions with respect to the mortgage loans to the extent described in this free writing prospectus and as set forth under the pooling and servicing agreement; |
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(ii) | the operating advisor will be required to review certain operational activities related to specially serviced loans in general on a platform level basis; and | ||
(iii) | based on the operating advisor’s review of certain information described in this free writing prospectus, the operating advisor will be required to prepare an annual report (if any mortgage loans (other than any non-serviced mortgage loans) or serviced loan combinations were specially serviced during the prior calendar year) to be provided to the trustee, the certificate administrator (to be made available through the certificate administrator’s website) and the 17g-5 information provider (to be made available through the 17g-5 information provider’s website) setting forth its assessment of the special servicer’s performance of its duties under the pooling and servicing agreement on a platform level basis with respect to the resolution and liquidation of specially serviced loans. Notwithstanding the foregoing, no operating advisor annual report will be required from the operating advisor with respect to the special servicer if during the prior calendar year no asset status report was prepared by the special servicer in connection with a specially serviced loan or REO property. | ||
With respect to each mortgage loan (other than any non-serviced mortgage loan) or serviced loan combination, after the occurrence and continuance of a “Consultation Termination Event,” as described under “The Pooling and Servicing Agreement—The Directing Holder” in this free writing prospectus, if the operating advisor determines the special servicer is not performing its duties as required under the pooling and servicing agreement or is otherwise not acting in accordance with the servicing standard, the operating advisor may recommend the replacement of the special servicer as described under “The Servicers—Replacement of the Special Servicer” in this free writing prospectus. | |||
The operating advisor is entitled to a fee payable on each distribution date, calculated based on the outstanding principal balance of each mortgage loan in the issuing entity (excluding any non-serviced mortgage loan) and the operating advisor fee rate described under “The Pooling and Servicing Agreement—The Operating Advisor—Operating Advisor Compensation” in this free writing prospectus, which fee will be calculated on the same accrual basis as the related mortgage loan. | |||
In addition, if there are no classes of certificates outstanding other than the Class E, Class F, Class G, Class H, Class X-D, Class X-E, Class X-F, Class V, Class R and Class LR certificates, all of the rights and obligations of the operating advisor under the pooling and servicing agreement (other than any rights or obligations that accrued prior to such termination, including accrued and unpaid compensation, and other than indemnification rights arising out of events that occurred prior to |
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such termination) will terminate without the payment of any termination fee. | ||
For additional information regarding the responsibilities of the operating advisor, see “The Pooling and Servicing Agreement—The Operating Advisor” in this free writing prospectus. | ||
Directing Holder | With respect to each mortgage loan (other than any non-serviced mortgage loan and excluded mortgage loans) or serviced loan combination, the directing holder will be the controlling class certificateholder (or a representative thereof) selected by more than 50% of the controlling class certificateholders, by certificate balance, as determined by the certificate registrar from time to time as provided for in the pooling and servicing agreement. With respect to any non-serviced mortgage loan, the directing holder will be as specified in the definition of “Directing Holder” as set forth in “The Pooling and Servicing Agreement—The Directing Holder” in this free writing prospectus. There will be no directing holder for an excluded mortgage loan. | |
An “excluded mortgage loan” is a mortgage loan or loan combination with respect to which the controlling class representative or any majority controlling class certificateholder is a “borrower party” (as defined in “The Pooling and Servicing Agreement—The Directing Holder” in this free writing prospectus). | ||
The controlling class is the most subordinate of the Class E, Class F, Class G and Class H certificates then outstanding that has an outstanding certificate balance (as reduced or notionally reduced by any realized losses and any appraisal reduction amounts allocable to such class) that is equal to or greater than 25% of the initial certificate balance of that class. No other class of certificates will be eligible to act as the controlling class or appoint a directing holder. | ||
For so long as at least one of the Class E, Class F, Class G and Class H certificates has an outstanding certificate balance (as reduced or notionally reduced by any realized losses and any appraisal reduction amounts allocable to such class) that is equal to or greater than 25% of the initial certificate balance of that class, the directing holder will have certain consent and consultation rights under the pooling and servicing agreement under certain circumstances. | ||
With respect to each mortgage loan and serviced loan combination, at any time a “control termination event,” as described under “The Pooling and Servicing Agreement—The Directing Holder” in this free writing prospectus, has occurred and is continuing, the consent rights of the directing holder will terminate, and the directing holder will retain consultation rights under the pooling and servicing agreement under certain circumstances. | ||
With respect to each mortgage loan and serviced loan combination, at any time a “consultation termination event,” as described under “The Pooling and Servicing Agreement—The |
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Directing Holder” in this free writing prospectus, has occurred and is continuing, all of the rights of the directing holder will terminate (other than the right to receive certain notices and information as a certificateholder). See “The Pooling and Servicing Agreement—The Directing Holder” in this free writing prospectus. | ||
RREF II CMBS AIV, LP (i) is expected to purchase the Class E, Class F, Class G, Class H, Class X-D, Class X-E, Class X-F and Class V certificates and may purchase other certificates and (ii) is expected to act as the initial directing holder with respect to each mortgage loan (other than any non-serviced mortgage loan or excluded mortgage loan) and serviced loan combination. | ||
With respect to the 11 Madison Avenue loan combination, so long as the 11 Madison Avenue subordinate companion loans are included in the MAD 2015-11MD mortgage trust, there will be no directing holder with respect to such loan combination. | ||
Prior to the occurrence of a control termination event, the special servicer may be removed with respect to the mortgage loans (other than any non-serviced mortgage loan or excluded mortgage loan) and serviced loan combination by the directing holder with or without consent. | ||
With respect to any excluded special servicer mortgage loan (that is also not an excluded mortgage loan), if any, the directing holder (prior to the occurrence and continuance of a control termination event) will be entitled to appoint an excluded special servicer with respect to such mortgage loan. On and after a control termination event, the directing holder will not have the right to replace such excluded special servicer and such excluded special servicer will be appointed as described in “The Servicers—Replacement of the Special Servicer”. | ||
In the case of the NMS Los Angeles Multifamily Portfolio loan combination, the holders of the related companion loans will have certain consultation rights with respect to the servicing of the related loan combination described under “Description of the Mortgage Pool—Loan Combinations—The NMS Los Angeles Multifamily Portfolio Loan Combination” in this free writing prospectus. | ||
Underwriters | Deutsche Bank Securities Inc., Cantor Fitzgerald & Co., KeyBanc Capital Markets Inc., CastleOak Securities, L.P. and Goldman, Sachs & Co. are the underwriters. Deutsche Bank Securities Inc. is an affiliate of German American Capital Corporation, a sponsor and a mortgage loan seller and Deutsche Mortgage & Asset Receiving Corporation, the depositor. Cantor Fitzgerald & Co. and CastleOak Securities, L.P. are each affiliates of Cantor Commercial Real Estate Lending, L.P., a sponsor and mortgage loan seller, and Berkeley Point Capital LLC, a primary servicer. KeyBanc Capital Markets Inc. is an affiliate of KeyBank National Association, a sponsor, a mortgage loan seller and a primary servicer. The underwriters are required to purchase the certificates offered in this free writing prospectus |
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from the depositor (in the amounts to be set forth under the heading “Method of Distribution (Underwriter Conflicts of Interest)” in the final prospectus supplement, subject to certain conditions. | ||
Affiliates and Other Relationships | All the shares of capital stock of Deutsche Mortgage & Asset Receiving Corporation, which is the depositor, are held by DB U.S. Financial Markets Holding Corporation. | |
German American Capital Corporation, a sponsor and a mortgage loan seller, Deutsche Bank Securities Inc., an underwriter, and Deutsche Mortgage & Asset Receiving Corporation, the depositor are affiliates of each other. | ||
Cantor Commercial Real Estate Lending, L.P., a sponsor and mortgage loan seller, and Cantor Fitzgerald & Co. and CastleOak Securities, L.P., two of the underwriters, and Berkeley Point Capital LLC, a primary servicer, are affiliates of each other. | ||
KeyBank National Association, a sponsor, a mortgage loan seller and a primary servicer, is an affiliate of KeyBanc Capital Markets Inc., an underwriter. | ||
Pursuant to a primary servicing agreement between KeyBank National Association, on the one hand, and Midland Loan Services, a Division of PNC Bank, National Association, on the other hand, KeyBank National Association will act as primary servicer with respect to the mortgage loans to be contributed to this securitization by KeyBank National Association. Such mortgage loans represent approximately 20.8% of the outstanding pool balance as of the cut-off date. KeyBank National Association will receive the primary servicing fee set forth on Annex A-1 for such mortgage loans. | ||
Pursuant to a primary servicing agreement between Berkeley Point Capital LLC, an affiliate of Cantor Commercial Real Estate Lending, L.P., on the one hand, and Midland Loan Services, a Division of PNC Bank, National Association, on the other hand, Berkeley Point Capital LLC will act as primary servicer with respect to 3 mortgage loans identified on Annex A-1 to this free writing prospectus as NMS Los Angeles Multifamily Portfolio, GSP MHP Portfolio I and Brookhaven MHP, which secure mortgaged properties representing, in the aggregate, approximately 9.7% of the outstanding pool balance as of the cut-off date to be contributed to this securitization by Cantor Commercial Real Estate Lending, L.P., and will receive the fee set forth on Annex A-1 for such mortgage loans. | ||
IH Capital, LLC, which provides mortgage origination, underwriting, securitization and related consulting services to The Bank of New York Mellon, is an affiliate of Ironhound Management Company, LLC, which provides consulting services to borrowers. | ||
Rialto Capital Advisors, LLC, the special servicer, is an affiliate of the entity that is expected to purchase the Class E, Class F, Class G, Class H, Class X-D, Class X-E, Class X-F and Class V |
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certificates and may purchase other certificates and is expected to act as the initial directing holder with respect to each mortgage loan (other than any non-serviced mortgage loan or excluded mortgage loan) and serviced loan combination. Rialto Capital Advisors, LLC, which is acting as the special servicer, assisted RREF II CMBS AIV, LP, the B-Piece Buyer, with due diligence relating to the mortgage loans to be included in the mortgage pool. | ||
Rialto Capital Advisors, LLC, the special servicer, is currently the servicer of, and an affiliate of Rialto Capital Advisors, LLC, is the current holder of, a mezzanine loan secured by direct or indirect equity interests in the borrower under the mortgage loan secured by the mortgaged property identified on Annex A-1 to this free writing prospectus as Atlanta Multifamily Portfolio, representing approximately 4.8% of the outstanding pool balance as of the cut-off date, which mezzanine loan is described under “Description of the Mortgage Pool—Certain Terms and Conditions of the Mortgage Loans—Other Financing” in this free writing prospectus. | ||
Pursuant to certain interim servicing agreements between German American Capital Corporation and certain of its affiliates, on the one hand, and Midland Loan Services, a Division of PNC Bank, National Association, on the other hand, Midland Loan Services, a Division of PNC Bank, National Association acts as interim servicer with respect to certain mortgage loans, including, prior to their inclusion in the issuing entity, 3 of the mortgage loans to be contributed to this securitization by German American Capital Corporation, representing approximately 3.2% of the outstanding pool balance as of the cut-off date. | ||
Pursuant to certain interim servicing agreements between German American Capital Corporation and certain of its affiliates, on the one hand, and KeyBank National Association, on the other hand, KeyBank National Association acts as interim servicer with respect to certain mortgage loans, including, prior to their inclusion in the issuing entity, 7 of the mortgage loans to be contributed to this securitization by German American Capital Corporation, representing approximately 19.2% of the outstanding pool balance as of the cut-off date. | ||
Pursuant to certain interim servicing agreements between German American Capital Corporation and certain of its affiliates, on the one hand, and Wells Fargo Bank, National Association, on the other hand, Wells Fargo Bank, National Association acts as interim servicer with respect to certain mortgage loans, including, prior to their inclusion in the issuing entity, 9 of the mortgage loans to be contributed to this securitization by German American Capital Corporation, representing approximately 19.7% of the outstanding pool balance as of the cut-off date. | ||
Pursuant to certain interim servicing agreements between The Bank of New York Mellon and certain of its affiliates, on the one |
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hand, and Wells Fargo Bank, National Association, on the other hand, Wells Fargo Bank, National Association acts as interim servicer with respect to certain mortgage loans, including, prior to their inclusion in the issuing entity, 11 of the mortgage loans to be contributed to this securitization by The Bank of New York Mellon, representing approximately 18.2% of the outstanding pool balance as of the cut-off date. | |||
Pursuant to certain interim servicing agreements between Cantor Commercial Real Estate Lending, L.P. and certain of its affiliates, on the one hand, and Midland Loan Services, a Division of PNC Bank, National Association, on the other hand, Midland Loan Services, a Division of PNC Bank, National Association acts as interim servicer with respect to certain mortgage loans, including, prior to their inclusion in the issuing entity, 3 of the mortgage loans to be contributed to this securitization by Cantor Commercial Real Estate Lending, L.P., representing approximately 3.3% of the outstanding pool balance as of the cut-off date. | |||
Pursuant to certain interim servicing agreements between Cantor Commercial Real Estate Lending, L.P. and certain of its affiliates, on the one hand, and Wells Fargo Bank, National Association, on the other hand, Wells Fargo Bank, National Association acts as interim servicer with respect to certain mortgage loans, including, prior to their inclusion in the issuing entity, 2 of the mortgage loans to be contributed to this securitization by Cantor Commercial Real Estate Lending, L.P., representing approximately 2.4% of the outstanding pool balance as of the cut-off date, and interim custodian of the loan files for 8 of the mortgage loans that Cantor Commercial Real Estate Lending, L.P. will transfer to the depositor, representing approximately 15.4% of the outstanding pool balance as of the cut-off date. | |||
Pursuant to a limited subservicing agreement between Berkeley Point Capital LLC, on the one hand, and Midland Loan Services, a Division of PNC Bank, National Association, on the other hand, Berkeley Point Capital LLC is expected to assume certain limited subservicing duties consisting of performing inspections and collecting financial statements with respect to 4 of the mortgage loans to be contributed to this securitization by Cantor Commercial Real Estate Lending, L.P., representing approximately4.3% of the outstanding pool balance as of the cut-off date, and will receive a fee equal to 0.0200%per annum for each such mortgage loan. | |||
Wells Fargo Bank, National Association, which is acting as the trustee and the certificate administrator for this transaction, is also a co-originator of the 11 Madison Avenue loan combination and is expected to hold, as of the closing date, the 11 Madison Avenue Note A-3-C1 and Note A-3-C2 companion loans which are expected to be contributed to future securitizations. In addition, Wells Fargo Bank, National Association, is the certificate administrator and custodian under the MAD 2015-11MD trust and servicing agreement. | |||
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KeyBank National Association, a primary servicer, is also the master servicer under the MAD 2015-11MD trust and servicing agreement. | |||
With respect to the 11 Madison Avenue mortgage loan, German American Capital Corporation or certain of its affiliates is expected to hold, as of the closing date, the 11 Madison Avenue Note A-1-C3 companion loan, which is expected to be contributed to future securitizations. | |||
With respect to the NMS Los Angeles Multifamily Portfolio mortgage loan, Cantor Commercial Real Estate Lending, L.P. or one of its affiliates is expected to hold, as of the closing date, subject to any applicable financing arrangements, the NMS Los Angeles Multifamily Portfolio Note A-2 and Note A-3 companion loans. | |||
These roles and other potential relationships may give rise to conflicts of interest as further described under “Risk Factors—Risks Related to Conflicts of Interest” in this free writing prospectus. | |||
SIGNIFICANT DATES, PERIODS AND EVENTS | |||
Cut-off Date | With respect to each mortgage loan, the later of the related due date of such mortgage loan in October 2015 and the date of origination of each mortgage loan. | ||
Closing Date | On or about October 29, 2015. | ||
Distribution Date | The fourth business day following the determination date in each month, commencing in November 2015. The initial distribution date will be November 13, 2015. | ||
Record Date | With respect to any distribution date, the close of business on the last business day of the preceding month. | ||
Determination Date | The sixthday of each month, or if such sixthday is not a business day, the following business day, commencing in November 2015. | ||
Collection Period | With respect to any distribution date, the period that begins immediately following the determination date in the calendar month preceding the month in which that distribution date occurs (or, in the case of the initial distribution date, immediately following the cut-off date) and ends on the determination date in the calendar month in which that distribution date occurs. | ||
Interest Accrual Period | With respect to any distribution date and each class of certificates (other than the Class V, Class R and Class LR certificates), the calendar month immediately preceding the month in which the distribution date occurs. Calculations of interest due in respect of each class of certificates (other than the Class V, Class R and Class LR certificates) will be made on the basis of a 360-day year consisting of twelve 30-day months. | ||
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CERTIFICATES OFFERED | |||||||
General | The depositor is offering hereby the following classes of COMM 2015-CCRE27 Mortgage Trust Commercial Mortgage Pass-Through Certificates: | ||||||
· | Class A-1 | ||||||
· | Class A-2 | ||||||
· | Class A-SB | ||||||
· | Class A-3 | ||||||
· | Class A-4 | ||||||
· | Class X-A | ||||||
· | Class A-M | ||||||
· | Class B | ||||||
· | Class C | ||||||
The trust to be created by the depositor will consist of a total of 22classes, the following of which are not being offered through this free writing prospectus and the attached prospectus: Class X-B, Class X-C, Class X-D, Class X-E, Class X-F, Class D, Class E, Class F, Class G, Class H, Class V, Class R and Class LR. | |||||||
The certificates will represent beneficial ownership interests in the issuing entity. The issuing entity’s assets will primarily consist of 65 fixed-rate mortgage loans. The mortgage loans are secured by first liens on 96 commercial, multifamily and manufactured housing community properties. | |||||||
Certificate Balances | |||||||
and Notional Balances | The offered certificates have the approximate initial certificate balances or notional balances, as applicable, set forth below, subject to a permitted variance of plus or minus 5.0%. | ||||||
Class A-1 | $ | 38,731,000 | |||||
Class A-2 | $ | 72,542,000 | |||||
Class A-SB(1) | $ | 62,544,000 | |||||
Class A-3 | $ | 215,000,000 | |||||
Class A-4 | $ | 263,315,000 | |||||
Class X-A | $ | 705,700,000 | |||||
Class A-M | $ | 53,568,000 | |||||
Class B | $ | 54,732,000 | |||||
Class C | $ | 43,088,000 | |||||
(1) | The Class A-SB certificates have certain priority with respect to reducing the principal balance of those certificates to their planned principal balance, as described in this free writing prospectus. | ||||||
The certificates that are not offered in this free writing prospectus (other than the Class V, Class R and Class LR certificates) will have the initial certificate balances or notional balances, as | |||||||
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applicable, as set forth under “Executive Summary—Certificates” in this free writing prospectus. | |||
The Class X-A, Class X-B, Class X-C, Class X-D, Class X-E and Class X-F certificates will not have principal balances or entitle their holders to distributions of principal. The Class X-A, Class X-B, Class X-C, Class X-D, Class X-E and Class X-F certificates will represent the right to receive distributions of interest accrued as described in this free writing prospectus on their respective notional balances. | |||
The notional balance of the Class X-A certificates will equal the aggregate certificate balance of each of the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4 and Class A-Mcertificates outstanding from time to time. The total initial notional balance of the Class X-A certificates will be approximately $705,700,000. | |||
The notional balance of the Class X-B certificates will equal the aggregate certificate balance of the Class B and Class C certificates outstanding from time to time. The total initial notional balance of the Class X-B certificates will be approximately $97,820,000. | |||
The notional balance of the Class X-C certificates will equal the certificate balance of the Class D certificates outstanding from time to time. The total initial notional balance of the Class X-C certificates will be approximately $51,238,000. | |||
The notional balance of the Class X-D certificates will equal the aggregate certificate balance of the Class E and Class F certificates outstanding from time to time. The total initial notional balance of the Class X-D certificates will be approximately $33,772,000. | |||
The notional balance of the Class X-E certificates will equal the certificate balance of the Class G certificates outstanding from time to time. The total initial notional balance of the Class X-E certificates will be approximately $13,974,000. | |||
The notional balance of the Class X-F certificates will equal the certificate balance of the Class H certificates outstanding from time to time. The total initial notional balance of the Class X-F certificates will be approximately $29,113,392. | |||
Pass-Through Rates | Each class of certificates (other than the Class V, Class R and Class LR certificates) will accrue interest at an annual rate called a pass-through rate which is set forth or otherwise described below: | ||
· | The respective pass-through rates applicable to the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class A-M, Class B, Class C, Class D, Class E, Class F, Class G and Class H certificates will equal one of (i) a fixedper annum rate, (ii) the weighted average of the net mortgage rates on the mortgage loans (in each case, adjusted, if necessary, to accrue on the basis of a 360-day |
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year consisting of twelve 30-day months) as of their respective due dates in the month preceding the month in which such distribution date occurs, (iii) a rate equal to the lesser of a specified pass-through rate and the rate specified in clause (ii), or (iv) the rate specified in clause (ii), less a specified rate. | |||
· | The pass-through rate for the initial distribution date applicable to the (i) Class X-A certificates will equal approximately %per annum, (ii) Class X-B certificates will equal approximately %per annum, (iii) Class X-C certificates will equal approximately %per annum, (iv) Class X-D certificates will equal approximately %per annum, (v) Class X-E certificates will equal approximately %per annum and (vi) Class X-F certificates will equal approximately %per annum. | ||
· | The pass-through rate for each of the Class X-A, Class X-B, Class X-C, Class X-D, Class X-E and Class X-F certificates for any distribution date will equal (in the case of the Class X-A, Class X-B and Class X-D certificates, the weighted average of) the respective strip rates, which we refer to as Class X-A strip rates, Class X-B strip rates, Class X-C strip rate, Class X-D strip rates, Class X-E strip rate and Class X-F strip rate, respectively, at which interest accrues from time to time on the respective components of the notional balance of the Class X-A certificates, Class X-B certificates, Class X-C certificates, Class X-D certificates, Class X-E certificates and Class X-F certificates, respectively, outstanding immediately prior to the related distribution date, and in the case of the Class X-A, Class X-B and Class X-D certificates, with the relevant weighting to be done based upon the relative sizes of those components. Each of the components of the Class X-A certificates will have a component notional balance that corresponds to the certificate balance of the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4 or Class A-M certificates, respectively. Each of the components of the Class X-B certificates will have a component notional balance that corresponds to the certificate balance of the Class B or Class C certificates, respectively. The Class X-C certificates will have a component notional balance that corresponds to the certificate balance of the Class D certificates. Each of the components of the Class X-D certificates will have a component notional balance that corresponds to the certificate balance of the Class E or Class F certificates, respectively. The Class X-E certificates will have a component notional balance that corresponds to the certificate balance of the Class G certificates. The Class X-F certificates will have a component notional balance that corresponds to the certificate balance of the Class H certificates. For purposes of the accrual of interest on the Class X-A, Class X-B, Class X-C, Class X-D, Class X-E and Class X-F certificates for each distribution date, the applicable Class X-A strip rate, Class X-B strip rate, Class X-C strip rate, Class X-D strip rate, Class X-E strip |
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rate or Class X-F strip rate as applicable, with respect to each such component for each such interest accrual period will equal the excess, if any, of (a) the weighted average of the net interest rates on the mortgage loans for such interest accrual period (in each case, adjusted, if necessary, to accrue on the basis of a 360-day year consisting of twelve 30-day months), over (b) the pass-through rate in effect during such interest accrual period for the class of certificates comprising such component. | ||||||
· | For a more detailed discussion of the Class X-A strip rates, the Class X-B strip rates, the Class X-C strip rate, the Class X-D strip rates, the Class X-E strip rate and the Class X-F strip rate and the pass-through rates applicable to the Class X-A, Class X-B, Class X-C, Class X-D, Class X-E and Class X-F certificates, see “Description of the Offered Certificates—Distributions” in this free writing prospectus. | |||||
· | The Class V, Class R and Class LR certificates will not have pass-through rates. See “Description of the Offered Certificates—Distributions—Method,Timing and Amount” and “—Payment Priorities” in this free writing prospectus. | |||||
See “Description of the Offered Certificates—Distributions” in this free writing prospectus. | ||||||
Assumed Final Distribution | ||||||
Date; Rated Final Distribution Date | The assumed final distribution dates of the offered certificates are set forth below. Such dates were calculated based on numerous assumptions as described in this free writing prospectus under “Description of the Offered Certificates—Distributions—Assumed Final Distribution Date.” Accordingly, if those assumptions prove to be inaccurate, the actual final distribution date for one or more classes of the offered certificates may be earlier or later, and could be substantially earlier or later, than the related assumed final distribution date(s). | |||||
Class | Assumed Final Distribution Date | |||||
Class A-1 | August 2020 | |||||
Class A-2 | October 2020 | |||||
Class A-SB | July 2025 | |||||
Class A-3 | September 2025 | |||||
Class A-4 | September 2025 | |||||
Class X-A | September 2025 | |||||
Class A-M | September 2025 | |||||
Class B | September 2025 | |||||
Class C | September 2025 | |||||
The “Rated Final Distribution Date” of the certificates (other than the Class H, Class V, Class R and Class LR certificates) will be the distribution date in October 2048. The Class H, Class V, Class R and Class LR certificates will not have a Rated Final Distribution Date. | ||||||
Distributions | On each distribution date, you will be entitled to receive interest and principal distributions in respect of each class of certificates, |
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other than the Class V, Class R and Class LR certificates, from available funds in an amount equal to your certificate’s interest and/or principal entitlement, subject to: | |||
(i) | payment of the respective interest entitlement for any class of certificates having a higher payment priority, except in respect of the distribution of interest among the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class X-A, Class X-B, Class X-C, Class X-D, Class X-E and Class X-F certificates, which will have the same senior priority, and | ||
(ii) | if applicable, payment of the respective principal entitlement for such distribution date to outstanding classes of certificates having a higher payment priority;provided that the Class A-SB certificates have certain priority with respect to reducing the principal balance of those certificates to their planned principal balance, as described in this free writing prospectus. | ||
A description of the principal and interest entitlement of each class of certificates offered in this free writing prospectus for each distribution date can be found in “Description of the Offered Certificates—Distributions—Method,Timing and Amount,” “—Payment Priorities” and “—Distribution of Available Funds” in this free writing prospectus. | |||
None of the Class X-A, Class X-B, Class X-C, Class X-D, Class X-E or Class X-F certificates will be entitled to any distributions of principal. | |||
The Class V certificates will not be entitled to distributions of principal or interest other than excess interest accruing on an anticipated repayment date loan. | |||
The Class R and Class LR certificates will not be entitled to distributions of interest or principal. | |||
Prepayment Premiums; | |||
Yield Maintenance Charges | Prepayment premiums and yield maintenance charges will be allocated as described in “Description of the Offered Certificates—Distributions—Prepayment Premiums and Yield Maintenance Charges” in this free writing prospectus. | ||
Prepayment and Yield | |||
Considerations | The yield to investors will be sensitive to the timing of prepayments, repurchases or purchases of mortgage loans and the magnitude of losses on the mortgage loans due to liquidations. The yield to maturity on each class of certificates offered in this free writing prospectus will be sensitive to the rate and timing of principal payments (including both voluntary and involuntary prepayments, defaults and liquidations) on the mortgage loans and payments with respect to repurchases thereof that are applied in reduction of the certificate balance of that class. See “Risk Factors—Risks Related to the Offered Certificates—Risks Related to Prepayments and Repurchases of Mortgage Loans”, “—Risks Related to the Offered Certificates— |
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Yield Considerations” and “Yield and Maturity Considerations” in this free writing prospectus and “Yield and Maturity Considerations” in the accompanying prospectus. | ||||
Subordination; Allocation of | ||||
Losses and Certain Expenses | The following chart illustrates the manner in which the rights of various classes (other than the Class V, Class R and Class LR certificates) will be senior to the rights of other classes. This subordination will be effected in two ways: (i) entitlement to receive principal and interest on any distribution date is in descending order and (ii) mortgage loan losses are allocated in ascending order. However, no principal payments or principal losses will be allocated to the Class X-A, Class X-B, Class X-C, Class X-D, Class X-E or Class X-F certificates, although mortgage loan losses that reduce the certificate balance of a class of certificates comprising a component of the notional balance of any of the Class X-A, Class X-B, Class X-C, Class X-D, Class X-E or Class X-F certificates will reduce the notional balances of the Class X-A, Class X-B, Class X-C, Class X-D, Class X-E or Class X-F certificates and, therefore, the amount of interest those classes accrue. | |||
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(1) | The Class A-SB certificates have certain priority with respect to reducing the principal balance of those certificates to their planned principal balance, as described in this free writing prospectus. | |||
(2) | The Class X-A, Class X-B, Class X-C, Class X-D, Class X-E and Class X-F certificates are interest-only certificates. | |||
No other form of credit enhancement will be available for the benefit of the holders of the certificates offered in this free writing prospectus. | ||||
In certain circumstances, shortfalls in mortgage loan interest that are the result of the timing of prepayments and that are in excess of the sum of (x) all or a portion of the servicing fee payable to the master servicer and (y) the amount of mortgage loan interest (exclusive of the excess interest) that accrues and is collected with respect to any principal prepayment that is made after the date on which interest is due will be allocated to, and be deemed distributed to, each class of certificates (other than the Class V, |
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Class R and Class LR certificates), pro rata, based upon amounts distributable in respect of interest to each class. See “Description of the Offered Certificates—Distributions—Prepayment Interest Shortfalls” in this free writing prospectus. | |||
Shortfalls in Mortgage | |||
Pool Available Funds | The following types of shortfalls in available funds will be allocated in the same manner as mortgage loan losses: | ||
· | shortfalls resulting from additional servicing compensation which the master servicer or the special servicer is entitled to receive; | ||
· | shortfalls resulting from interest on advances made by the master servicer, the special servicer or the trustee (to the extent not covered by default interest and late payment fees paid by the related borrower that are not paid to the master servicer or the special servicer as compensation); | ||
· | shortfalls resulting from unanticipated expenses of the issuing entity (including, but not limited to, expenses relating to environmental assessments, appraisals, any administrative or judicial proceeding, management of REO properties, maintenance of insurance policies, and permissible indemnification); and | ||
· | shortfalls resulting from a reduction of a mortgage loan’s interest rate by a bankruptcy court or from other unanticipated or default-related expenses of the issuing entity. | ||
Advances | |||
A. General | The master servicer is required to advance delinquent monthly payments on a mortgage loan if the master servicer determines that the advance (and interest on that advance) will be recoverable from proceeds of the related mortgage loan. A principal and interest advance will generally equal the delinquent portion of the monthly payment (other than a final “balloon” payment that may be due at the related maturity). The master servicer will not be required to advance interest in excess of a mortgage loan’s regular interest rate (i.e., not including any default rate or any excess interest accruing on an anticipated repayment date loan). The master servicer is also not required to advance, among other things, prepayment premiums or yield maintenance charges, or balloon payments. If an advance is made, the master servicer will defer (rather than advance) its servicing fees, but will advance the trustee/certificate administrator’s fees and the operating advisor’s fees. Neither the master servicer nor the trustee will be required to make a principal and interest advance on any companion loan. In addition, neither the master servicer nor the trustee will make an advance if the special servicer determines that such advance is not recoverable from proceeds of the related mortgage loan. | ||
If a borrower fails to pay amounts due on the maturity date of the related mortgage loan, the master servicer will be required, on |
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and after such date and until final liquidation of that mortgage loan, to advance only an amount equal to the interest (at the mortgage loan’s regular interest rate, as described above) and principal portion of the monthly payment due immediately prior to the maturity date, as may be reduced by applicable appraisal reduction events as described in this free writing prospectus, subject to a recoverability determination. With respect to each mortgage loan or serviced loan combination, the master servicer will also be obligated (subject to the limitations described in this free writing prospectus and except with respect to any non-serviced mortgage loans, with respect to which advances will be made as described under “The Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loan” in this free writing prospectus (see also “Description of the Mortgage Pool—Loan Combinations—The 11 Madison Avenue Loan Combination—Advancing” and “—The NMS Los Angeles Multifamily Portfolio Loan Combination—Advancing”) to make advances to pay delinquent real estate taxes, assessments and hazard insurance premiums and to cover other similar costs and expenses necessary to preserve the priority of the related mortgage, enforce the terms of any mortgage loan (or serviced loan combination) or to protect, manage and maintain each related mortgaged property. Any determination by the special servicer that an advance proposed to be made is non-recoverable will be conclusive and binding on the master servicer, subject to the terms of the pooling and servicing agreement related to this transaction. | |||
If the master servicer fails to make any required advance, the trustee will be required to make the advance. The obligation of the master servicer and the trustee to make an advance will also be subject to a determination of non-recoverability. The trustee will be entitled to conclusively rely on the determination of non-recoverability made by either the master servicer or the special servicer. With respect to any loan combination, the master servicer and the trustee will be entitled to conclusively rely on any determination of non-recoverability made by a master servicer or special servicer of a relatedpari passu companion loan if such companion loan has been securitized in a securitization rated by one or more nationally recognized statistical rating organizations and such master servicer or special servicer is an approved master servicer or special servicer by the rating agency rating the related offered certificates. | |||
Principal and interest advances are intended to maintain a regular flow of scheduled interest and principal payments to the certificateholders and are not intended to guarantee or insure against losses. Generally, advances that cannot be reimbursed out of collections on, or in respect of, the related mortgage loans will be reimbursed directly from any other collections on the mortgage loans as provided in this free writing prospectus and thus will cause losses to be borne by certificateholders in the priority specified in this free writing prospectus. The master servicer and the trustee will be entitled to interest on any advances made. This interest will accrue at the rate and is |
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payable under the circumstances described in this free writing prospectus. Interest accrued on outstanding advances may result in reductions in amounts otherwise available for payment on the certificates. | |||
See “The Pooling and Servicing Agreement—Advances” in this free writing prospectus. | |||
B. Appraisal Reduction Event | Certain adverse events affecting a mortgage loan (other than a non-serviced mortgage loan) or any serviced loan combination, called appraisal reduction events, will require the special servicer to obtain a new appraisal (or, with respect to mortgage loans or serviced loan combinations having a principal balance under $2,000,000, at the special servicer’s option, an estimate of value prepared by the special servicer or an appraisal of the related mortgaged property). Based on the appraised value in such appraisal, it may be necessary to calculate an appraisal reduction amount. The amount of interest required to be advanced in respect of a mortgage loan that has been subject to an appraisal reduction event will equal the product of (a) the amount that would be required to be advanced without giving effect to such appraisal reduction event and (b) a fraction, the numerator of which is the stated principal balance of the mortgage loan less any appraisal reduction amounts allocable to such mortgage loan and the denominator of which is the stated principal balance. Due to the payment priorities described above, this will reduce the funds available to pay interest on the most subordinate class or classes of certificates then outstanding. | ||
The non-serviced mortgage loan will be subject to provisions of the pooling and servicing agreement under which it is serviced relating to appraisal reductions that may be different than the provisions set forth above. The existence of an appraisal reduction in respect of a non-serviced mortgage loan will proportionately reduce the master servicer’s or the trustee’s obligation to make principal and interest advances on such mortgage loan under the pooling and servicing agreement. See “Description of the Mortgage Pool—Loan Combinations” and “The Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loan” in this free writing prospectus. |
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THE MORTGAGE POOL | |||
Characteristics of the Mortgage Pool | |||
A. General | For a more complete description of the mortgage loans, see the following sections in this free writing prospectus: | ||
· | Description of the Mortgage Pool; | ||
· | Annex A-1 (Certain Characteristics of the Mortgage Loans); | ||
· | Annex A-2 (Certain Pool Characteristics of the Mortgage Loans and Mortgaged Properties); and | ||
· | Annex B (Description of the Top 20 Mortgage Loans). | ||
All numerical information provided in this free writing prospectus with respect to the mortgage loans is approximate. All weighted average information regarding the mortgage loans reflects weighting of the mortgage loans by their respective principal balances as of the cut-off date. For purposes of calculating the respective outstanding principal balances of the mortgage loans as of the cut-off date, it was assumed that all scheduled payments of principal due with respect to the mortgage loans on the cut-off date are timely made. | |||
When information with respect to mortgaged properties is presented as of the cut-off date and is expressed as a percentage of the initial outstanding pool balance, the percentages are based upon the outstanding principal balance as of the cut-off date of the related mortgage loan or allocated loan amount attributed to such mortgaged property. | |||
The information in the following chart is presented as of the cut-off date, unless otherwise indicated. The information contained in the footnotes to the chart below is applicable throughout this free writing prospectus, unless otherwise indicated. | |||
With respect to the 11 Madison Avenue mortgage loan and the NMS Los Angeles Multifamily Portfolio mortgage loan, each of which is secured by a mortgaged property or portfolio of mortgaged properties that also secures one or morepari passu companion loans that will not be included in the issuing entity, the debt service coverage ratio, loan-to-value ratio and debt yield have been calculated based on such mortgage loan that will be included in the issuing entity and the relatedpari passu companion loan(s) that will not be included in the issuing entity. | |||
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The information in the following chart is presented as of the cut-off date, unless otherwise indicated. The information contained in the footnotes to the chart below is applicable throughout this free writing prospectus, unless otherwise indicated. | |||||||
All Mortgage Loans | |||||||
Number of Mortgage Loans | 65 | ||||||
Number of Mortgaged Properties | 96 | ||||||
Number of Amortizing Balloon Mortgage Loans(1) | 27 | ||||||
Number of Partial Interest-Only Mortgage Loans(2) | 30 | ||||||
Number of Interest-Only Mortgage Loans(3) | 8 | ||||||
Aggregate Principal Balance | $931,617,393 | ||||||
Range of Mortgage Loan Principal Balances | |||||||
Minimum Mortgage Loan Balance | $966,058 | ||||||
Maximum Mortgage Loan Balance | $70,000,000 | ||||||
Average Mortgage Loan Principal Balance | $14,332,575 | ||||||
Range of Mortgage Rates | |||||||
Minimum Mortgage Rate | 3.5602% | ||||||
Maximum Mortgage Rate | 5.1100% | ||||||
Weighted Average Mortgage Rate | 4.4889% | ||||||
Range of Remaining Terms to Maturity(4) | |||||||
Minimum Remaining Term(4) | 58 months | ||||||
Maximum Remaining Term(4) | 120 months | ||||||
Weighted Average Remaining Terms to Maturity(4) | 114 months | ||||||
Range of Remaining Amortization Terms(5)(8) | |||||||
Minimum Remaining Amortization Term(5)(8) | 239 months | ||||||
Maximum Remaining Amortization Term(5)(8) | 360 months | ||||||
Weighted Average Remaining Amortization Term(5) | 357 months | ||||||
Range of Cut-off Date Loan-to-Value Ratios(6)(7) | |||||||
Minimum Cut-off Date Loan-to-Value Ratio(6)(7) | 32.5% | ||||||
Maximum Cut-off Date Loan-to-Value Ratio(6)(7) | 77.2% | ||||||
Weighted Average Cut-off Date Loan-to-Value Ratio(6)(7) | 65.5% | ||||||
Range of U/W NCF Debt Service Coverage Ratios(6)(8) | |||||||
Minimum U/W NCF Debt Service Coverage Ratio(6)(8) | 1.25x | ||||||
Maximum U/W NCF Debt Service Coverage Ratio(6)(8) | 3.89x | ||||||
Weighted Average U/W NCF Debt Service Coverage Ratio(6)(8) | 1.77x | ||||||
Range of U/W NOI Debt Yields(6) | |||||||
Minimum U/W NOI Debt Yield(6) | 6.7% | ||||||
Maximum U/W NOI Debt Yield(6) | 20.2% | ||||||
Weighted Average U/W NOI Debt Yield(6) | 10.4% | ||||||
(1) | Does not include interest-only mortgage loans or partial interest-only mortgage loans. | ||||||
(2) | Includes 30 mortgage loans, collectively representing approximately 45.5% of the outstanding pool balance as of the cut-off date, which pay interest-only for a portion of their term. The remaining interest-only period for such mortgage loans ranges from 11 months to 71 months following the cut-off date. | ||||||
(3) | Includes 8 mortgage loans, collectively representing approximately 20.6% of the outstanding pool balance as of the cut-off date, which pays interest-only through their respective maturity date or anticipated repayment date. | ||||||
(4) | Calculated with respect to the anticipated repayment dates for 2 mortgage loans, representing approximately 2.2% of the outstanding pool balance as of the cut-off date. | ||||||
(5) | Excludes 8 mortgage loans, collectively representing approximately 20.6% of the outstanding pool balance as of the cut-off date, each of which pays interest-only until its respective maturity date or anticipated repayment date. | ||||||
(6) | In the case of the 11 Madison Avenue mortgage loan and the NMS Los Angeles Multifamily Portfolio mortgage loan, collectively representing approximately 14.5% of the outstanding pool balance as of the cut-off date, each of which has one or morepari passu companion loans that are not included in the issuing entity, the debt service coverage ratios, loan-to-value ratios and debt yields have been calculated based on such mortgage loan |
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included in the issuing entity and the relatedpari passu companion loan(s) not included in the issuing entity. | |||
(7) | In the case of 3 mortgaged properties, collectively representing approximately 6.4% of the outstanding pool balance as of the cut-off date, the loan-to-value ratio for such mortgaged properties has been calculated based on the “as complete” or “as renovated” appraised value of the related mortgaged properties. In the case of 3 mortgage loans, collectively representing 17.8% of the outstanding pool balance as of the cut-off date, the loan-to-value ratio for such mortgage loans has been calculated based on the “as portfolio” appraised value. For further description, see the definition of “Appraised Value” in “Description of the Mortgage Pool—Additional Mortgage Loan Information” in this free writing prospectus. | ||
(8) | Annual debt service, monthly debt service and the debt service coverage ratios are calculated using the average of the principal and interest payments for the first twelve payment periods of the mortgage loan following cut-off date (but without regard to any leap year adjustments), provided that (i) in the case of a mortgage loan that provides for interest-only payments through maturity or its anticipated repayment date, as applicable, such items are calculated based on the interest payments scheduled to be due on the first due date following the cut-off date and the 11 due dates thereafter for such mortgage loan, (ii) in the case of a mortgage loan that provides for an initial interest-only period that ends prior to maturity or its anticipated repayment date, as applicable, and provides for scheduled amortization payments thereafter, such items are calculated based on the monthly payment of principal and interest payable immediately following the expiration of the interest-only period and (iii) in the case of a mortgage loan with one or more relatedpari passu companion loans, annual debt service is calculated inclusive of suchpari passu companion loans. In the case of theAtlanta Multifamily Portfolio mortgage loan, representing approximately4.8% of the initial outstanding pool balance as of the cut-off date, following an initial interest only period of18 months, the mortgage loan amortizes based on a non-standard amortization schedule attached to this free writing prospectus as Annex H, and the debt service coverage ratio for such mortgage loan was calculated based on the debt service for the first12 months of amortizing payments. | ||
B. Split Loan Structures | The mortgage loans secured by the mortgaged property or portfolio of mortgaged properties identified as 11 Madison Avenue and NMS Los Angeles Multifamily Portfolio on Annex A-1 to this free writing prospectus also secure one or more companion loans that will not be included in the mortgage pool. | ||
The mortgage loan secured by the mortgaged property identified as 11 Madison Avenue on Annex A-1 to this free writing prospectus secures (1) a promissory note designated as Note A-1-C2 (referred to in this free writing prospectus as the “11 Madison Avenue mortgage loan”) with an outstanding principal balance as of the cut-off date of $70,000,000, representing approximately 7.5% of the outstanding pool balance as of the cut-off date, (2) ninepari passu companion loans, evidenced by promissory notes designated as Note A-1-S1, Note A-1-S2, Note A-1-S3, Note A-2-S1, Note A-2-S2, Note A-2-S3, Note A-3-S1, Note A-3-S2 and Note A-3-S3, respectively, which will not be included in the issuing entity (collectively, the “11 Madison Avenue standalonepari passu companion loans“), with an aggregate outstanding principal balance as of the cut-off date of $397,530,000, which are currently being held by the MAD 2015-11MD Mortgage Trust, (3) sixpari passu companion loans, evidenced by promissory notes designated as Note A-1-C1, Note A-1-C3, Note A-2-C1, Note A-2-C2, Note A-3-C1 and Note A-3-C2, respectively, which will not be included in the issuing entity (collectively, the “11 Madison Avenue non-standalonepari passu |
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companion loans“ and, together with the 11 Madison Avenue standalonepari passu companion loans, the “11 Madison Avenue pari passu companion loans”, “pari passu companion loans” or “companion loans”), with an aggregate outstanding principal balance as of the cut-off date of $296,800,000, of which (i) Note A-1-C1 is currently being held by German American Capital Corporation and is expected to be included in the COMM 2015-CCRE26 securitization, (ii) Note A-1-C3 is currently being held by German American Capital Corporation, (iii) Note A-2-C1 and Note A-2-C2 are currently being held by Morgan Stanley Bank, N.A. and (iv) Note A-3-C1 and Note A-3-C2 are currently being held by Wells Fargo Bank, National Association, and (4) three subordinate companion loans, evidenced by promissory notes designated as Note B-1-S, Note B-2-S and Note B-3-S, respectively, which will not be included in theissuing entity (collectively referred to in this free writingprospectus as the “11 Madison Avenue subordinate companionloans”, “subordinate companion loans”, “non-serviced subordinate companion loans” or “companion loans”), with an aggregate outstanding principal balance as of the cut-off date of $310,670,000, which are currently being held by the MAD 2015-11MD Mortgage Trust. The 11 Madison Avenue mortgage loan, the 11 Madison Avenuepari passucompanion loans and the 11 Madison Avenue subordinate companion loans are collectively referred to in this free writing prospectus as the “11 Madison Avenue loan combination”, a “loan combination” and a “non-serviced loan combination”. The 11 Madison Avenue loan combination will be serviced pursuant to the MAD 2015-11MD trust and servicing agreement and the related co-lender agreement. For additional information regarding the 11 Madison Avenue loan combination, see “Description of the Mortgage Pool—Loan Combinations—The 11 Madison Avenue Loan Combination” in this free writing prospectus. | |||
The mortgaged property identified as NMS Los Angeles Multifamily Portfolio on Annex A-1 to this free writing prospectus secures (1) a mortgage loan evidenced by a promissory note designated as Note A-1 (the “NMS Los Angeles Multifamily Portfolio mortgage loan”) with an outstanding principal balance as of the cut-off date of $65,000,000, representing approximately 7.0% of the outstanding pool balance as of the cut-off date, and (2) twopari passu companion loans, evidenced by promissory notes designated as Note A-2 and A-3, which will not be included in the issuing entity, with original principal balances of $30,000,000 and $25,000,000, respectively, which are currently being held by Cantor Commercial Real Estate Lending, L.P. or an affiliate thereof (subject to any financing arrangement for such note). Each of Note A-2 and Note A-3 of the NMS Los Angeles Multifamily Portfolio loan combination is referred to as a “pari passu companion loan” or “companion loan”. The NMS Los Angeles Multifamily Portfolio mortgage loan and the related companion loan arepari passu in right of payment and are collectively referred to in this free writing prospectus as the “NMS Los Angeles Multifamily Portfolio loan combination,” a “loan combination” and a “serviced loan combination”. The NMS Los Angeles Multifamily Portfolio companion loan may be sold or |
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further divided at any time (subject to compliance with the terms of the related intercreditor agreement). For additional information regarding the NMS Los Angeles Multifamily Portfolio loan combination, see “Description of the Mortgage Pool—Loan Combinations—The NMS Los Angeles Multifamily Portfolio Loan Combination” in this free writing prospectus. | ||
C. ARD Loans | The mortgage loans secured by the mortgaged properties identified on Annex A-1 to this free writing prospectus as University Center and Rockford Crossing, representing approximately 1.2% and 1.0%, respectively, of the outstanding pool balance as of the cut-off date, are each an “ARD” loan and generally provide that if, after a certain date referred to herein as an “anticipated repayment date” or “ARD”, the related borrower has not prepaid such mortgage loan in full, then (i) the non-default rate at which interest accrues will increase, (ii) payment of the additional interest that accrues as a result of such increase in interest rate, together with compound interest thereon (to the extent permitted by applicable law), will be deferred until the principal balance of the subject mortgage loan is paid in full, and (iii) from and after the related ARD, all excess cash flow generated by the related mortgaged property each month that remains after the payment of scheduled debt service and escrows and property expenses will be applied to pay down principal of the subject mortgage loan. Failure to pay the principal amount of such mortgage loan on its anticipated repayment date will not constitute an event of default. | |
D. Security for the Mortgage Loans | All of the mortgage loans included in the issuing entity will be secured on the closing date by first liens on mortgaged properties. | |
E. Non-recourse | All of the mortgage loans are or should be considered non-recourse obligations. No mortgage loan will be insured or guaranteed by any governmental entity or private insurer, or by any other person. | |
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F. Fee Simple/Leasehold Estate | Each mortgage loan is secured by, among other things, a first mortgage lien on (i) the fee simple estate in an income-producing real property, which would include mortgaged properties constituting the borrower’s leasehold interest or interests in the mortgaged property along with the corresponding fee interest of the ground lessor in such mortgaged property or (ii) either (a) a leasehold estate in a portion of the mortgaged property and a fee estate in a portion of the mortgaged property or (b) a leasehold estate in the mortgaged property and no mortgage on the related fee estate, as set forth below: |
Interest of Borrower | Number of Mortgaged Properties | Aggregate Cut- | % of Initial Outstanding | |||||||
Fee Simple(2) | 93 | $ | 812,142,719 | 87.2 | % | |||||
Fee Simple/Leasehold | 1 | $ | 70,000,000 | 7.5 | % | |||||
Leasehold | 2 | $ | 49,474,674 | 5.3 | % | |||||
Total | 96 | $ | 931,617,393 | 100.0 | % |
(1) | Because this table presents information relating to the mortgaged properties and not the mortgage loans, the information for any mortgaged property that relates to a mortgage loan secured by more than one mortgaged property is based on allocated loan amounts (which amounts, if not specified in the related mortgage loan documents, are based on the appraised values and/or square footage of each mortgaged property and/or each mortgaged property’s underwritten net cash flow). | ||
(2) | May include mortgaged properties constituting the borrower’s leasehold interest in the mortgaged property along with the corresponding fee interest of the ground lessor in such mortgaged property. |
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G. Property Purpose | The number of mortgaged properties, and the aggregate cut-off date balance and approximate percentage of the initial outstanding pool balance of the mortgage loans secured thereby, for each indicated purpose are: |
Property Type | Number of Mortgaged Properties | Aggregate Cut-off | % of Initial Outstanding | ||||||||
Multifamily | 29 | $ | 341,141,062 | 36.6 | % | ||||||
Garden | 23 | $ | 224,432,728 | 24.1 | % | ||||||
Mid Rise | 4 | $ | 64,708,333 | 6.9 | % | ||||||
High Rise | 2 | $ | 52,000,000 | 5.6 | % | ||||||
Retail | 24 | $ | 181,503,349 | 19.5 | % | ||||||
Anchored(2) | 22 | $ | 161,253,349 | 17.3 | % | ||||||
Unanchored | 2 | $ | 20,250,000 | 2.2 | % | ||||||
Office | 7 | $ | 167,582,500 | 18.0 | % | ||||||
Suburban | 3 | $ | 87,162,500 | 9.4 | % | ||||||
CBD | 1 | $ | 70,000,000 | 7.5 | % | ||||||
Medical | 3 | $ | 10,420,000 | 1.1 | % | ||||||
Hospitality | 14 | $ | 128,579,188 | 13.8 | % | ||||||
Full Service | 3 | $ | 56,924,811 | 6.1 | % | ||||||
Limited Service | 5 | $ | 37,678,584 | 4.0 | % | ||||||
Select Service | 1 | $ | 18,475,793 | 2.0 | % | ||||||
Extended Stay | 5 | $ | 15,500,000 | 1.7 | % | ||||||
Industrial | 7 | $ | 35,362,500 | 3.8 | % | ||||||
Manufactured Housing Community | 4 | $ | 30,076,497 | 3.2 | % | ||||||
Self Storage | 8 | $ | 26,526,010 | 2.8 | % | ||||||
Parking | 2 | $ | 10,846,286 | 1.2 | % | ||||||
Mixed Use (Multifamily/Retail) | 1 | $ | 10,000,000 | 1.1 | % | ||||||
Total/Weighted Average | 96 | $ | 931,617,393 | 100.0 | % |
(1) | Because this table presents information relating to the mortgaged properties and not the mortgage loans, the information for any mortgaged property that relates to a mortgage loan secured by more than one mortgaged property is based on allocated loan amounts (which amounts, if not specified in the related mortgage loan documents, are based on the appraised value and/or square footage of each mortgaged property and/or each mortgaged property’s underwritten net cash flow). | ||
(2) | Includes anchored, shadow anchored and single tenant properties. |
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H. Property Locations | The mortgaged properties are located in28 separate states and the District of Columbia. The table below shows the number of mortgaged properties, the aggregate principal balance of the related mortgage loans, and the percentage of initial outstanding pool balance secured by mortgaged properties that are located in the top jurisdictions that have concentrations of mortgaged properties of 5.0% or more (based on allocated loan amount as a percentage of the initial outstanding pool balance) as of the cut-off date: |
State/Location | Number of | Aggregate Cut- | % of Initial | ||||||
Texas | 12 | $ | 126,118,259 | 13.5% | |||||
Florida | 11 | $ | 115,142,500 | 12.4% | |||||
California | 9 | $ | 92,986,331 | 10.0% | |||||
New York | 5 | $ | 89,562,262 | 9.6% | |||||
Illinois | 8 | $ | 52,493,290 | 5.6% | |||||
Georgia | 4 | $ | 50,975,000 | 5.5% |
(1) | Because this table presents information relating to the mortgaged properties and not the mortgage loans, the information for any mortgaged property that relates to a mortgage loan secured by more than one mortgaged property is based on allocated loan amounts (which amounts, if not specified in the related mortgage loan documents, are based on the appraised value and/or square footage of each mortgaged property and/or each mortgaged property’s underwritten net cash flow). |
See “Description of the Mortgage Pool—Additional Mortgage Loan Information” in this free writing prospectus. | ||
I. Due Dates | Subject in some cases to a next business day convention, all of the mortgage loans have due dates upon which interest and/or principal payments are due under the related note that occur as described in the following table with the indicated grace period. |
Due | Default | Number of | Aggregate Cut-off | % of Initial | ||||||||
6 | 0 | 40 | $ | 737,581,748 | 79.2 | % | ||||||
1 | 5 | 15 | $ | 137,905,097 | 14.8 | % | ||||||
1 | 0 | 10 | $ | 56,130,548 | 6.0 | % | ||||||
65 | $ | 931,617,393 | 100.0 | % |
As used in this free writing prospectus, “grace period” is the number of days before a payment default is an event of default under each mortgage loan. A grace period does not apply to a maturity date or anticipated repayment date payment. The information in the table above is based on the related loan documents. Certain jurisdictions may impose a statutorily longer grace period. See Annex A-1 to this free writing prospectus for information on the number of days before a payment default is an event of default under each mortgage loan. |
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J. Amortization Types | The mortgage loans have the amortization characteristics set forth in the following table: |
Type of Amortization | Number | Aggregate | % of Initial | |||||
Interest Only, then Amortizing(1) | 28 | $ | 403,141,300 | 43.3 | % | |||
Amortizing Balloon(2) | 27 | $ | 315,682,093 | 33.9 | % | |||
Interest Only | 8 | $ | 192,319,000 | 20.6 | % | |||
Interest Only, then Amortizing, ARD(1) | 2 | $ | 20,475,000 | 2.2 | % | |||
Total | 65 | $ | 931,617,393 | 100.0 | % |
(1) | Collectively, includes 30 mortgage loans that pay interest-only for the first 11 to 71 scheduled payments after the cut-off date and thereafter provide for regularly scheduled payments of interest and principal based on an amortization period longer than the remaining term of such mortgage loan to maturity. Each such mortgage loan therefore has an expected balloon balance at the maturity date. | |||
(2) | Does not include mortgage loans that are interest-only through the related maturity date or partial interest-only mortgage loans. |
All of the mortgage loans will have substantial principal payments due on their maturity dates, unless prepaid earlier, subject to the terms and conditions of the prepayment provisions of each mortgage loan. | ||
K. Modified and Refinanced Loans | As of the cut-off date, none of the mortgage loans were modified due to a delinquency or impending delinquency. | |
The following mortgage loan refinanced a prior loan that was in maturity default at the time of refinancing: |
· | With respect to the mortgaged property identified on Annex A-1 to this free writing prospectus as 4001 North Lincoln, which secures a mortgage loan representing approximately 0.3% of the outstanding pool balance as of the cut-off date, the mortgage loan refinanced a prior mortgage loan shortly after its maturity. Although the prior loan had matured, the prior lender was aware of the anticipated refinancing and did not call a default or exercise any remedies. The prior loan was paid off in full with the proceeds of such mortgage loan, without any default-related penalties. |
For additional information, see “Risk Factors—Risks Related to the Mortgage Loans—Prior Bankruptcies, Defaults or Other Proceedings May Be Relevant to Future Performance” in this free writing prospectus. | ||
L. Properties Underwritten | ||
Based on Projections of | ||
Future Income | With respect to 5 mortgaged properties, representing approximately8.4% of the outstanding pool balance as of the cut-off date (by allocated loan amount), such mortgaged properties (i) were constructed or the subject of a major renovation that was completed within 12 calendar months prior to the cut-off date and therefore the related mortgaged property has no prior operating history, (ii) have a borrower or an affiliate under the related mortgage loan that acquired the related mortgaged property within 12 calendar months prior to the cut-off |
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date and such borrower or affiliate was unable to provide the related mortgage loan seller with historical financial information for such acquired mortgaged property or (iii) are single tenant properties subject to triple-net leases with the related tenant where the related borrower did not provide the related mortgage loan seller with historical financial information for the related mortgaged property. | ||
M. Voluntary Prepayment | ||
Provisions; Defeasance Loans | The mortgage loans have the following prepayment and/or defeasance characteristics following the related initial lockout period, as described below: | |
Defeasance and Prepayment |
Number | Aggregate | % of Initial Outstanding | |||||||||
Lockout, Defeasance(1)(3) | 58 | $ | 824,551,782 | 88.5 | % | ||||||
Lockout, Yield Maintenance(2)(3) | 7 | $ | 107,065,610 | 11.5 | % | ||||||
Total | 65 | $ | 931,617,393 | 100.0 | % |
(1) | All of the mortgage loans classified as “Lockout, Defeasance” prohibit defeasance until at least the second anniversary of the closing date. | |||
(2) | All mortgage loans classified as “Lockout, Yield Maintenance” prohibit voluntary prepayment until at least 23 payments following the cut-off date. | |||
(3) | Certain of the mortgage loans may permit a voluntary partial prepayment in connection with a partial release or substitution of a mortgaged property or portion thereof prior to the end of the related lockout period for such mortgage loan (including, in certain cases, a defeasance loan that permits a partial release with yield maintenance). See “Description of the Mortgage Pool─Certain Terms and Conditions of the Mortgage Loans─Property Releases” in this free writing prospectus. |
All of the mortgage loans that permit voluntary prepayment or defeasance require that the prepayment or defeasance be made on the due date or, if on a different date, that any prepayment or defeasance be accompanied by the interest that would be due on the next due date. |
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Lock-Out Period for Yield Maintenance Loans | ||
Each of the mortgage loans listed in the table below permits prepayment with a yield maintenance charge (which amount is, in some cases, at least 1% of the prepaid amount), in certain circumstances, following a lock-out period as indicated in the following table: |
Mortgage Loan | Cut-off Date | % of Initial | Lock-Out | |||
The Drake | $44,000,000 | 4.7% | 24 | |||
Intellicenter | $33,562,500 | 3.6% | 25 | |||
University Center | $11,025,000 | 1.2% | 25 | |||
Rockford Crossing | $9,450,000 | 1.0% | 25 | |||
Empire Central | $4,000,000 | 0.4% | 35 | |||
Terrace Oak Apartments | $2,531,250 | 0.3% | 23 | |||
Rhett at Remount | $2,496,860 | 0.3% | 24 |
The mortgage loans that are subject to yield maintenance provisions generally permit voluntary prepayment without the payment of any penalty on the last3 to 5 scheduled payment dates (through and including their respective maturity date or anticipated repayment date). | ||
N. Certain Variances from | ||
Underwriting Standards | . | The mortgage loans that German American Capital Corporation will be selling to the depositor were originated in accordance with German American Capital Corporation’s underwriting standards, as set forth under “The Sponsors, Mortgage Loan Sellers and Originators—German American Capital Corporation—GACC’s Underwriting Standards” in this free writing prospectus, except as described under“—GACC’s Underwriting Standards—Exceptions” in this free writing prospectus. |
The mortgage loans thatThe Bank of New York Mellon will be selling to the depositor were originated in accordance with The Bank of New York Mellon’s underwriting standards, as set forth under “The Sponsors, Mortgage Loan Sellers and Originators—The Bank of New York Mellon—Review of BNY Mellon Mortgage Loans” in this free writing prospectus. | ||
The mortgage loans thatKeyBank National Association will be selling to the depositor were originated in accordance with KeyBank National Association’s underwriting standards, as set forth under “The Sponsors, Mortgage Loan Sellers and Originators—KeyBank National Association —KeyBank’s Underwriting Guidelines and Process” in this free writing prospectus, except as described under “—Exceptions” in this free writing prospectus. | ||
The mortgage loans thatCantor Commercial Real Estate Lending, L.P. will be selling to the depositor were originated in accordance with Cantor Commercial Real Estate Lending, L.P.’s underwriting standards, as set forth under “The Sponsors, Mortgage Loan Sellers and Originators—Cantor Commercial |
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Real Estate Lending, L.P.—CCRE Lending’s Underwriting Standards” in this free writing prospectus. | ||
O. Mortgage Loans with | ||
Related Borrowers | Eight (8) groups of mortgage loans have related borrowers that are affiliated with one another through partial or complete direct or indirect common ownership, collectively representing approximately 16.2% of the outstanding pool balance as of the cut-off date and the top three groups representing 4.6%, 2.8% and 2.2% of the outstanding pool. balance as of the cut-off date. The foregoing is in addition to any particular mortgage loan that has multiple affiliated borrowers. | |
P. Significant Mortgage Loans | The following table sets forth information regarding the mortgage loans, which represent, in the aggregate, approximately47.7% of the initial outstanding pool balance. |
Ten Largest Mortgage Loans
Mortgage Loan | Cut-off Date Balance | % of Initial Outstanding Pool Balance | Mortgage Rate | Remaining Term to Maturity or ARD | U/W DSCR | Cut-off Date LTV | LTV Ratio at Maturity or ARD | Cut-off Date U/W NOI Debt Yield | ||||||||
11 Madison Avenue(1) | $ 70,000,000 | 7.5% | 3.5602% | 119 | 3.89x | 32.5% | 32.5% | 14.3% | ||||||||
NMS Los Angeles Multifamily Portfolio(2)(3) | $ 65,000,000 | 7.0% | 4.9380% | 119 | 1.31x | 68.8% | 68.8% | 6.7% | ||||||||
Sandalwood Portfolio(4) | $ 62,912,576 | 6.8% | 4.2100% | 119 | 1.60x | 63.3% | 50.8% | 10.2% | ||||||||
Atlanta Multifamily Portfolio | $ 45,000,000 | 4.8% | 4.8100% | 59 | 1.30x | 64.9% | 61.9% | 8.3% | ||||||||
The Drake | $ 44,000,000 | 4.7% | 4.3400% | 119 | 1.28x | 67.4% | 62.8% | 7.7% | ||||||||
Midwest Shopping Center Portfolio(5) | $ 38,152,658 | 4.1% | 4.3300% | 117 | 1.53x | 67.4% | 54.4% | 10.3% | ||||||||
Intellicenter | $ 33,562,500 | 3.6% | 4.6500% | 120 | 1.44x | 75.0% | 65.9% | 9.3% | ||||||||
Hotel deLuxe | $ 32,419,793 | 3.5% | 4.5900% | 118 | 1.85x | 68.7% | 55.8% | 12.8% | ||||||||
Green Valley Corporate Center | $ 27,000,000 | 2.9% | 4.5900% | 118 | 1.96x | 63.9% | 54.7% | 12.4% | ||||||||
Chase Park | $ 26,600,000 | 2.9% | 4.3200% | 119 | 1.54x | 69.3% | 63.2% | 10.5% | ||||||||
$ 444,647,528 | 47.7% | 4.3886% | 113 | 1.87x | 61.8% | 55.7% | 10.2% |
(1) | In the case of the 11 Madison Avenue mortgage loan, representing approximately 7.5% of the outstanding pool balance as of the cut-off date, has one or morepari passu companion loans that are not included in the issuing entity, the debt service coverage ratio, loan-to-value ratios and debt yield for such mortgage loan has been calculated based on the mortgage loan included in the issuing entity and the relatedpari passu companion loans not included in the issuing entity but excluding the related subordinate companion loans and mezzanine loans. | |
(2) | In the case of the NMS Los Angeles Multifamily Portfolio mortgage loan, representing approximately 7.0% of the outstanding pool balance as of the cut-off date, has one or morepari passu companion loans that are not included in the issuing entity, the debt service coverage ratio, loan-to-value ratios and debt yield for such mortgage loan has been calculated based on the mortgage loan included in the issuing entity and the relatedpari passu companion loans not included in the issuing entity. | |
(3) | In the case of the NMS Los Angeles Multifamily Portfolio mortgage loan, representing approximately 7.0% of the outstanding pool balance as of the cut-off date, the “as portfolio” appraised value of $174,300,000 reflects a premium attributed to the aggregate value of the NMS Los Angeles Multifamily Portfolio as a whole. | |
(4) | In the case of the Sandalwood Portfolio mortgage loan, representing approximately 6.8% of the outstanding pool balance as of the cut-off date, the “as portfolio” appraised value of $99,310,000 reflects a premium attributed to the aggregate value of the Sandalwood Portfolio as a whole. | |
(5) | In the case of the Midwest Shopping Center Portfolio mortgage loan, representing approximately 4.1% of the outstanding pool balance as of the cut-off date, the “as portfolio” appraised value of $56,630,000 reflects a premium attributed to the aggregate value of the Midwest Shopping Center Portfolio as a whole. |
ADDITIONAL CONSIDERATIONS
Optional Termination | On any distribution date on which the remaining aggregate principal balance of the mortgage loans remaining in the issuing entity is less than 1.0% of the aggregate principal balance of all |
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of the mortgage loans as of the cut-off date (except for certain mortgage loans, as further described under “The Pooling and Servicing Agreement—Optional Termination” in this free writing prospectus), each of (i) the holder of the majority interest of the controlling class, (ii) the special servicer or (iii) the master servicer, in that order, may exercise an option to purchase all of the mortgage loans (including all property acquired through the exercise of remedies in respect of any mortgage loan). Exercise of this option will terminate the issuing entity and retire the then outstanding certificates. If the Class A-1 through Class D certificates are no longer outstanding, the issuing entity could also be terminated in connection with an exchange by a sole remaining certificateholder of all the then outstanding certificates, excluding the Class V, Class R and Class LR certificates (and, if the sole remaining certificateholder has taken only an assignment of the voting rights of the Class X-D, Class X-E and Class X-F certificates) for the mortgage loans and REO property remaining in the issuing entity, and the sole remaining certificateholder makes a payment, including the “master servicer make whole amount,” to the certificate administrator and the master servicer as described under “The Pooling and Servicing Agreement—Optional Termination” in this free writing prospectus. | ||
See “The Pooling and Servicing Agreement—Optional Termination” in this free writing prospectus and “Description of the Certificates—Termination” in the prospectus. | ||
Repurchase Obligation | Each mortgage loan seller will make the representations and warranties set forth on Annex F to this free writing prospectus, subject to the exceptions described on Annex G to this free writing prospectus, with respect to the mortgage loans sold by such mortgage loan seller. If a mortgage loan seller has been notified of a breach of any of its representations and warranties or a defect in the documentation of any of the mortgage loans sold by it, which breach or defect materially and adversely affects the value of the subject mortgage loan, the value of the related mortgaged property or the interests of the trustee in the subject mortgage loan or the related mortgaged property, then that mortgage loan seller or an affiliate will be required to either cure the breach or defect (as applicable), repurchase the affected mortgage loan from the issuing entity, replace the affected mortgage loan with another mortgage loan or make a cash payment in lieu of such cure, repurchase or replacement as described under “The Pooling and Servicing Agreement—Representations and Warranties;Repurchase;Substitution” in this free writing prospectus. If the related mortgage loan seller or its affiliate, as applicable, decides to repurchase the affected mortgage loan, the repurchase would have the same effect on the offered certificates as a prepayment in full of the affected mortgage loan, except that the repurchase will not be accompanied by any prepayment premium or yield maintenance charge. |
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Sale of Defaulted Mortgage | ||
Loans and REO Properties | Pursuant to the pooling and servicing agreement, if the special servicer determines that it would be in the best interests of the certificateholders and, in the case of a serviced loan combination, the related serviced companion loan noteholders (as a collective whole as if such parties constituted a single lender), it will be required to solicit offers for defaulted mortgage loans (including, with respect to any serviced loan combination, the related serviced companion loans) and REO properties and accept the first (and, if multiple bids are contemporaneously received, the highest) cash bid from any person that constitutes a fair price for the defaulted mortgage loan or REO property, determined as described in “The Pooling and Servicing Agreement—Sale of Defaulted Mortgage Loans and Serviced REO Properties” in this free writing prospectus, unless the special servicer determines, in its reasonable and good faith judgment, that rejection of such offer would be in the best interests of the certificateholders and, in the case of any serviced loan combination, the related serviced companion loan noteholders, as a collective whole as if such certificateholders and companion loan noteholders constituted a single lender. See “The Pooling and Servicing Agreement—Sale of Defaulted Mortgage Loans and Serviced REO Properties” in this free writing prospectus. | |
With respect to any defaulted mortgage loan or REO property that is part of, or relates to, a serviced loan combination, the sale of such defaulted mortgage loan and REO property will, to the extent set forth in the related intercreditor agreement, generally be subject to any consultation rights of the related serviced companion loan holder, as further described in this free writing prospectus under “Description of the Mortgage Pool—Loan Combinations.” | ||
The holder of a mezzanine loan secured by direct or indirect equity interests in the borrower under a mortgage loan and the holder of a subordinate companion loan, if any, generally has the right to purchase the related mortgage loan under certain default scenarios as described under “Description of the Mortgage Pool—Certain Terms and Conditions of the Mortgage Loans—Other Financing” and “Description of the Mortgage Pool—Loan Combinations” in this free writing prospectus. | ||
With respect to the 11 Madison Avenue mortgage loan, if such mortgage loan becomes a defaulted mortgage loan, the MAD 2015-11MD special servicer will be required to sell such mortgage loan together with the related companion loans as notes evidencing one whole loan, in accordance with the provisions of the related intercreditor agreement and the MAD 2015-11MD trust and servicing agreement. |
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Conflicts of Interest | The relationships between the parties to this transaction and the activities, including business arrangements and financial dealings, of those parties or their affiliates may give rise to certain conflicts of interest. These conflicts of interests may arise from, among other things, the following relationships and activities: |
· | the ownership of any certificates, companion loans or mezzanine loans by the depositor, mortgage loan sellers, underwriters, master servicer, special servicer, trustee, certificate administrator, operating advisor or any of their affiliates; | ||
· | the relationships, including financial dealings and affiliates, of the mortgage loan sellers, underwriters, master servicer, special servicer, trustee, certificate administrator, operating advisor or any of their affiliates (or the master servicer, special servicer, trustee, certificate administrator, or operating advisor with respect to the securitization of any non-serviced companion loan or any of their affiliates) with each other or with any borrower, borrower sponsor or loan guarantor; | ||
· | the obligation of the special servicer to take actions at the direction of any directing holder; | ||
· | the broker-dealer activities of the underwriters and their affiliates, including taking long or short positions in the certificates or entering into credit derivative transactions with respect to the certificates; | ||
· | the opportunity of the initial investor in the Class E, Class F, Class G, Class H, Class X-D, Class X-E, Class X-F and Class V certificates to request the removal or re-sizing of or other changes to the features of some or all of the mortgage loans or to adjust the amount payable to the sponsor of certain mortgage loans from the net proceeds of the certificates purchased by such investor; and | ||
· | the activities of the underwriters, master servicer, special servicer, certificate administrator, operating advisor, mortgage loan sellers or any of their affiliates in connection with any other transaction. |
See “Risk Factors—Risks Related to Conflicts of Interest” in this free writing prospectus. | ||
Material Federal Income | ||
Tax Consequences | Elections will be made to treat portions of the issuing entity (exclusive of the portion of the issuing entity consisting of the excess interest and the related distribution account) as two separate REMICs, known as the “Lower-Tier REMIC” and the “Upper-Tier REMIC” (each, a “Trust REMIC”) for federal income tax purposes. In the opinion of counsel, such portions of the issuing entity will qualify for this treatment pursuant to their elections. |
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The Lower-Tier REMIC will issue regular interests, all of which will be held by the Upper-Tier REMIC, and a residual interest, represented by the Class LR certificates. The Upper-Tier REMIC will issue regular interests, represented by the Regular Certificates, and a residual interest, represented by the Class R certificates. | ||
In the opinion of counsel, the portion of the issuing entity consisting of excess interest and related amounts in the Class V distribution account, beneficial ownership of which is represented by the Class V certificates, will be treated as a grantor trust for federal income tax purposes, as further described under “Material Federal Income Tax Consequences” in this free writing prospectus. | ||
Federal income tax consequences of an investment in the certificates offered in this free writing prospectus include: |
· | Each class of offered certificates will constitute a class of “regular interest” in the Upper-Tier REMIC. | ||
· | The offered certificates will be treated as newly originated debt instruments for federal income tax purposes. | ||
· | It is anticipated that the Class[__], Class[__] and Class[__] certificates will be issued with original issue discount for federal income tax purposes and that the Class[__]certificates will be issued at a premium for federal income tax purposes. |
See “Material Federal Income Tax Consequences” in this free writing prospectus. | ||
ERISA Considerations | A fiduciary of an employee benefit plan should review with its legal advisors whether the purchase or holding of the certificates offered by this free writing prospectus could give rise to a transaction that is prohibited or is not otherwise permitted under either the Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of the Internal Revenue Code of 1986, as amended, or whether there exists any statutory, regulatory or administrative exemption applicable thereto. The U.S. Department of Labor has grantedan administrative exemption to Deutsche Bank Securities Inc., Department Final Authorization Number 97-03E, as amended by Prohibited Transaction Exemption 2013-08, which generally exempts from the application of certain of the prohibited transaction provisions of Section 406 of the Employee Retirement Income Security Act of 1974, as amended, and the excise taxes imposed on such prohibited transactions by Sections 4975(a) and (b) of the Internal Revenue Code of 1986, transactions relating to the purchase, sale and holding of pass-through certificates sold by the underwriters and the servicing and operation of the related asset pool,provided that certain conditions are satisfied. | |
The depositor expects that the exemption granted to Deutsche Bank Securities Inc. will generally apply to the certificates offered in this free writing prospectus;provided that certain conditions |
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are satisfied. See “ERISA Considerations” in this free writing prospectus and “Certain ERISA Considerations” in the prospectus. | ||
Ratings | It is a condition to the issuance of the offered certificates that each class of the offered certificates receive the ratings set forth next to such certificate on the cover of this free writing prospectus fromMoody’s Investors Service, Inc., Fitch Ratings, Inc. and DBRS, Inc., as applicable. | |
See “Ratings” in this free writing prospectus and “Rating” in the prospectus for a discussion of the basis upon which ratings are given, the limitations of and restrictions on the ratings, and the conclusions that should not be drawn from a rating. Each of the rating agencies engaged by the depositor to rate the offered certificates has agreed to perform ratings surveillance with respect to its ratings for so long as the certificates remain outstanding. It is expected that fees for such ratings surveillance will be paid by the depositor. Although it is expected that the depositor will pay fees for ongoing rating surveillance by the rating agencies, the depositor has no obligation or ability to ensure that any rating agency performs rating surveillance. In addition, a rating agency may cease ratings surveillance if the information furnished to that rating agency is insufficient to allow it to perform surveillance. | ||
A rating is not a recommendation to purchase, hold or sell the related certificates. Any rating agency that rates the certificates may, in its discretion, lower or withdraw its rating at any time as to any class of certificates. None of the relevant parties (including, without limitation, the issuing entity, the depositor, the sponsors, the servicers, the certificate administrator, the trustee, the operating advisor and their affiliates) will be required to monitor any changes to any ratings on the certificates. | ||
Nationally recognized statistical rating organizations that the depositor has not engaged to rate the offered certificates may nevertheless issue unsolicited credit ratings on one or more classes of certificates, relying on information they receive pursuant to Rule 17g-5 under the Securities Exchange Act of 1934, as amended, or otherwise. If any such unsolicited ratings are issued, we cannot assure you that they will not be different from any ratings assigned by a rating agency engaged by the depositor. The issuance of unsolicited ratings of a class of the offered certificates that are lower than the ratings assigned by the rating agencies engaged by the depositor may adversely impact the liquidity, market value and regulatory characteristics of that class. | ||
As part of the process of obtaining ratings for the offered certificates, the depositor had initial discussions with and submitted certain materials toMoody’s Investors Service, Inc., Fitch Ratings, Inc. and DBRS, Inc. and certain other nationally recognized statistical rating organizations. Based on preliminary feedback from those nationally recognized statistical rating organizations at that time, the depositor selected Moody’s Investors Service, Inc., Fitch Ratings, Inc. and DBRS, Inc. to rate |
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certain classes of offered certificates and did not select the other nationally recognized statistical rating organizations due, in part, to those nationally recognized statistical rating organizations’ initial subordination levels for the various classes of offered and non-offered certificates. Had the depositor selected such other nationally recognized statistical rating organizations to rate the offered certificates, we cannot assure you as to the ratings that such other nationally recognized statistical rating organizations would ultimately have assigned to the offered certificates. Further, with respect to the rating agencies engaged by the depositor to only rate certain classes of offered certificates, but not others, if the depositor had engaged such rating agencies to rate the remaining classes of offered certificates not rated by it, their ratings of such offered certificates may have been different, and potentially lower, than those ratings ultimately assigned to such offered certificates by the other rating agencies engaged to rate such offered certificates. Although unsolicited ratings may be issued by any nationally recognized statistical rating organization, a nationally recognized statistical rating organization might be more likely to issue an unsolicited rating if it was not selected after having provided preliminary feedback to the depositor. | ||
Neither the depositor nor any other person or entity will have any duty to notify you if any nationally recognized statistical rating organization issues, or delivers notice of its intention to issue, unsolicited ratings on one or more classes of offered certificates after the date of this free writing prospectus. In no event will no downgrade confirmations from any nationally recognized statistical rating organization (other than the rating agencies engaged by the depositor or except in so far as the matter involves a mortgage loan with a split loan structure and such other rating organization is hired to rate securities backed by the related companion loan) be a condition to any action, or the exercise of any right, power or privilege by any person or entity under the pooling and servicing agreement. | ||
Furthermore, the Securities and Exchange Commission may determine that any or all of Moody’s Investors Service, Inc., Fitch Ratings, Inc. and DBRS, Inc. no longer qualifies as a nationally recognized statistical rating organization, or is no longer qualified to rate the offered certificates, and that determination may have an adverse effect on the liquidity, market value and regulatory characteristics of the offered certificates. See “Risk Factors—Risks Related to the Offered Certificates—Ratings of the Offered Certificates” and “Ratings” in this free writing prospectus and “Rating” in the prospectus for more information. | ||
Legal Investment | No class of the offered certificates will constitute “mortgage related securities” for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended. If your investment activities are subject to legal investment laws and regulations, regulatory capital requirements, or review by regulatory authorities, then you may be subject to restrictions on investment in the offered certificates. You should consult your own legal advisors for assistance in determining the suitability |
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and consequences of the purchase, ownership, and sale of the offered certificates. | ||
The issuing entity will be relying on an exclusion or exemption from the definition of “investment company” under the Investment Company Act of 1940, as amended (the “Investment Company Act”), contained in Section 3(c)(5) of the Investment Company Act or Rule 3a-7 under the Investment Company Act, although there may be additional exclusions or exemptions available to the issuing entity. The issuing entity is being structured so as not to constitute a “covered fund” for purposes of the Volcker Rule under the Dodd-Frank Act (both as defined in this free writing prospectus). | ||
See “Legal Investment” in this free writing prospectus and the prospectus. | ||
Denominations; Clearance | ||
and Settlement | The certificates offered in this free writing prospectus will be issuable in registered form, in minimum denominations of certificate balance of (i) $10,000 with respect to the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class A-M, Class B and Class C certificates and (ii) $100,000 with respect to the Class X-A certificates. | |
Investments in excess of the minimum denominations may be made in multiples of $1. | ||
You may hold your certificates through (i) The Depository Trust Company (“DTC”) (in the United States) or (ii) Clearstream Banking Luxembourg, a division of Clearstream International, société anonyme (“Clearstream”) or The Euroclear System (“Euroclear”) (in Europe). Transfers within DTC, Clearstream or Euroclear will be in accordance with the usual rules and operating procedures of the relevant system. See “Description of the Offered Certificates—Delivery,Form and Denomination,” “—Book-Entry Registration” and “—Definitive Certificates” in this free writing prospectus and “Description of the Certificates—Book-Entry Registration and Definitive Certificates” in the attached prospectus. |
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RISK FACTORS
You should carefully consider the following risks and those risks described in “Risk Factors” in the prospectus before making an investment decision. In particular, the timing and amount of distributions on your certificates will depend on payments received on and other recoveries with respect to the mortgage loans. Therefore, you should carefully consider the risk factors relating to the mortgage loans and the mortgaged properties.
If any of the following events or circumstances identified as risks actually occur or materialize, your investment could be materially and adversely affected. We note that additional risks and uncertainties not presently known to us may also impair your investment.
This free writing prospectus also contains forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks described below and elsewhere in this free writing prospectus.
General Risks
The Offered Certificates May Not Be a Suitable Investment for You
The offered certificates are not suitable investments for all investors. In particular, you should not purchase any class of certificates unless you understand and are able to bear the prepayment, credit, liquidity and market risks associated with that class of certificates. For those reasons and for the reasons set forth in these “Risk Factors,” the yield to maturity and the aggregate amount and timing of distributions on the offered certificates are subject to material variability from period to period and over the life of the offered certificates. The interaction of the foregoing factors and their effects are impossible to predict and are likely to change from time to time. As a result, an investment in the offered certificates involves substantial risks and uncertainties and should be considered only by sophisticated investors with substantial investment experience with similar types of securities.
Risks Related to Market Conditions
The Credit Crisis and Downturn in the Real Estate Market Have Adversely Affected the Value of Commercial Mortgage-Backed Securities
Over the past several years, events in the real estate and securitization markets, as well as the debt markets generally, caused significant dislocations, illiquidity and volatility in the market for commercial mortgage-backed securities, as well as in the wider global financial markets. Declining real estate values, coupled with diminished availability of financing for commercial real estate resulted in increased delinquencies and defaults on commercial mortgage loans. In addition, the downturn in the general economy affected the financial strength of many commercial real estate tenants and resulted in increased rent delinquencies and increased vacancies, particularly in the retail sector. Any further economic downturn may lead to increased vacancies, decreased rents or other declines in income from, or the value of, commercial real estate, which would likely have an adverse effect on the value and/or liquidity of commercial mortgage-backed securities that are backed by loans secured by such commercial real estate. We cannot assure you that the dislocation in the commercial mortgage-backed securities market will not continue to occur or become more severe. Even if the commercial mortgage-backed securities market does recover, the mortgaged properties and therefore, the offered certificates, may decline in value. Any further economic downturn may adversely affect the financial resources of the borrowers under the mortgage loans and may result in the inability of the borrowers to make principal and interest payments on, or refinance, the outstanding debt when due or to sell the mortgaged properties for an aggregate amount sufficient to pay off the outstanding debt when due. In the event of default by the borrowers under the mortgage loans, the issuing entity may suffer a partial or total loss allocable to the
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offered certificates. Any delinquency or loss on the mortgage loans may have an adverse effect on the distributions of principal and interest received by holders of the offered certificates.
Even if commercial mortgage-backed securities are performing as anticipated, the value of such commercial mortgage-backed securities in the secondary market may nevertheless decline as a result of a deterioration in general market conditions for other asset-backed securities or structured finance products. Trading activity associated with commercial mortgage-backed securities indices may also drive spreads on those indices wider than spreads on commercial mortgage-backed securities, thereby resulting in a decrease in value of such commercial mortgage-backed securities.
The Volatile Economy and Credit Crisis May Increase Loan Defaults and Affect the Value and Liquidity of Your Investment
The global economy recently experienced a significant recession, as well as a severe, ongoing disruption in the credit markets, including the general absence of investor demand for and purchases of commercial mortgage-backed securities and other asset-backed securities and structured financial products. The economic recovery in the United States has been weak and may be unsustainable, and it is possible that another, possibly more severe, recession may ensue. The global recession and financial crisis have resulted in increased vacancies, decreased rents and/or other declines in income from, or the value of, commercial real estate.
Additionally, decreases in the value of commercial properties and the tightening by commercial real estate lenders of underwriting standards have prevented many commercial mortgage borrowers from refinancing their mortgages. A substantial amount of U.S. mortgage loans, with balloon payment obligations in excess of their respective current property values, are maturing over the coming three years. These circumstances have increased delinquency and default rates of securitized commercial mortgage loans, and may lead to widespread commercial mortgage defaults. In addition, the declines in commercial real estate values have resulted in reduced borrower equity, hindering such borrower’s ability to refinance in an environment of increasingly more restrictive lending standards and giving them less incentive to cure delinquencies and avoid foreclosure. Higher loan-to-value ratios are likely to result in lower recoveries on foreclosure, and an increase in loss severities above those that would have been realized had commercial property values remained the same or continued to increase. Defaults, delinquencies and losses have further decreased property values, thereby resulting in additional defaults by commercial mortgage borrowers, further credit constraints, further declines in property values and further adverse effects on the perception of the value of commercial mortgage-backed securities. Even if the real estate market does recover, the mortgaged property and, consequently, the certificates, may decline in value. Any further economic downturn may adversely affect the financial resources of the borrower and may result in the inability of the borrower to make interest payments on the mortgage loan and repayment at maturity. In the event of default by a borrower under the mortgage loan, the certificateholders would likely suffer a loss on their investment.
Furthermore, the global financial markets have recently experienced increased volatility due to uncertainty surrounding the level and sustainability of the sovereign debt of various countries. Much of this uncertainty has related to certain countries that participate in the European Monetary Union and whose sovereign debt is generally denominated in Euros, the common currency shared by members of that union. In addition, some economists, observers and market participants have expressed concerns regarding the sustainability of the monetary union and the common currency in their current form. Concerns regarding sovereign debt may spread to other countries at any time. In particular, the pace of progress, or the lack of progress, of federal deficit reduction talks in the United States may cause continued volatility. In addition, certain countries in the Middle East are experiencing social unrest. It is uncertain what effects these events will have in such countries or the Middle East, or what effects such events might have on the United States, world financial markets, particular business segments, world commodity prices or otherwise. Furthermore, many state and local governments in the United States are experiencing, and are expected to continue to experience, severe budgetary strain. One or more states could default on their debt, or one or more significant local governments could default on their debt or seek relief from their debt under the federal bankruptcy code or by agreement with their creditors. Any or
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all of the circumstances described above may lead to further volatility in or disruption of the United States or global credit markets at any time.
Moreover, other types of events, domestic or international, may affect general economic conditions and financial markets, such as wars, revolts, insurrections, armed conflicts, energy supply or price disruptions, terrorism, political crisis, natural disasters and man-made disasters. We cannot predict such matters or their effect on the performance of the mortgage loans or the value or performance of your certificates.
General Conditions in the Commercial Real Estate Mortgage Markets May Adversely Affect the Performance of the Offered Certificates
Investors should consider that general conditions in the commercial real estate and mortgage markets may adversely affect the performance of the mortgage loans held by the issuing entity and accordingly the performance of the offered certificates. In addition, in connection with all the circumstances described above, you should be aware in particular that:
· | such circumstances may result in substantial delinquencies and defaults on the mortgage loans and adversely affect the amount of liquidation proceeds the issuing entity would realize in the event of foreclosures and liquidations; |
· | defaults on the mortgage loans may occur in large concentrations over a period of time, which might result in rapid declines in the value of your certificates; |
· | notwithstanding that the mortgage loans were recently underwritten and originated, the values of the mortgaged properties may decline following the issuance of the offered certificates and such declines may be substantial and occur in a relatively short period following the issuance of the offered certificates; and such declines may or may not occur for reasons largely unrelated to the circumstances of the particular property; |
· | if you determine to sell your offered certificates, you may be unable to do so or you may be able to do so only at a substantial discount from the price you paid; this may be the case for reasons unrelated to the then current performance of the offered certificates or the mortgage loans; and this may be the case within a relatively short period following the issuance of the offered certificates; |
· | if the mortgage loans default, then the yield to maturity on your investment may be substantially reduced notwithstanding that liquidation proceeds may be sufficient to result in the repayment of the principal of and accrued interest on your certificates; an earlier-than-anticipated repayment of principal (even in the absence of losses) in the event of a default in advance of the maturity date would tend to shorten the weighted average period during which you earn interest on your investment; and a later-than anticipated repayment of principal (even in the absence of losses) in the event of a default upon the maturity date would tend to delay your receipt of principal and the interest on your investment may be insufficient to compensate you for that delay; |
· | even if liquidation proceeds received on defaulted mortgage loans are sufficient to cover the principal and accrued interest on those mortgage loans, the issuing entity may experience losses in the form of special servicing compensation, interest on advances and other expenses, and you may bear losses as a result, or your yield to maturity may be affected by such losses; |
· | the time periods to resolve defaulted mortgage loans may be long, and those periods may be further extended because of borrower bankruptcies and related litigation; and this may be especially true in the case of loans made to borrowers that have, or whose affiliates have, substantial debts other than the mortgage loan, including related subordinate or mezzanine financing; |
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· | some participants in the commercial mortgage-backed securities markets have sought permission from the Internal Revenue Service to allow a purchaser of a mortgaged property acquired in respect of a mortgage loan held by a REMIC to assume the extinguished debt in connection with a purchase of that property; if such permission is granted and the special servicer pursues such a resolution strategy, then the receipt of proceeds of a foreclosure property would be delayed for an extended period; and this may occur when it would be in your best interest for the property to be sold for cash, even at a lesser price, with the proceeds distributed to certificateholders; |
· | trading activity associated with indices of commercial mortgage-backed securities may also drive spreads on those indices wider than spreads on commercial mortgage-backed securities, thereby resulting in a decrease in value of such commercial mortgage-backed securities, including your certificates, and spreads on those indices may be affected by a variety of factors, and may or may not be affected for reasons involving the commercial real estate markets and may be affected for reasons that are unknown and cannot be discerned; and |
· | even if you intend to hold your offered certificates, depending on your circumstances, you may be required to report declines in the value of your certificates, and/or record losses, on your financial statements or regulatory or supervisory reports, and/or repay or post additional collateral for any secured financing, hedging arrangements or other financial transactions that you have entered into that are backed by or make reference to your certificates, in each case as if your certificates were to be sold immediately. |
In connection with all the circumstances described above, the risks we described elsewhere under “Risk Factors” in this free writing prospectus and the attached prospectus are heightened substantially, and you should review and carefully consider such risk factors in light of such circumstances.
Risks Related to the Mortgage Loans
Mortgage Loans Are Non-recourse and Are Not Insured or Guaranteed
Payments under the mortgage loans are not insured, and are either not, or should not be considered to be, guaranteed by any governmental agency or private insurer.
All of the mortgage loans are or should be considered to be non-recourse loans. If a default occurs, the lender’s remedies generally are limited to foreclosing against the borrower and/or the specific mortgaged properties and other assets that have been pledged to secure the mortgage loan, subject to, in some cases, certain, generally customary, non-recourse carveouts either to the borrower or the loan sponsor. Even if a mortgage loan is recourse to the borrower (or if a non-recourse carveout to the borrower applies), in most cases, the borrower’s assets are limited primarily to its interest in the related mortgaged property. Payment of amounts due under the mortgage loan prior to the maturity date is consequently dependent primarily on the sufficiency of the net operating income of the property. Even if the mortgage loan provides limited recourse to a principal or affiliate of the related borrower, there is no assurance that any recovery from such principal or affiliate will be made or that such principal’s or affiliate’s assets would be sufficient to pay any otherwise recoverable claim.
Payment of a mortgage loan at the maturity date or the anticipated repayment date is primarily dependent upon the market value of the mortgaged property and the borrower’s ability to sell or refinance the mortgaged property for an amount sufficient to repay the mortgage loan.
The Offered Certificates Are Limited Obligations and Payments Will Be Primarily Derived from the Mortgage Loans
The certificates, when issued, will represent beneficial interests in the issuing entity. The certificates will not represent an interest in, or obligation of, the sponsors, the mortgage loan sellers, the depositor, the master servicer, the special servicer, the trustee, the certificate administrator, the operating advisor or any other person. The primary assets of the issuing entity will be the mortgage loans, and the primary
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security and source of payment for the mortgage loans will be the mortgaged properties and the other collateral described in this free writing prospectus. Payments on the certificates are expected to be derived from payments made by the borrowers on the mortgage loans. Payment of a mortgage loan at the maturity date or the anticipated repayment date is primarily dependent upon the market value of the mortgaged property and the borrower’s ability to sell or refinance the mortgaged property for an amount sufficient to repay the mortgage loan. We cannot assure you that the cash flow from the mortgaged properties and the proceeds of any sale or refinancing of the mortgaged properties will be sufficient to pay the principal of, and interest on, the mortgage loans or to distribute in full the amounts of interest and principal to which the holders of the certificates are entitled. See “Description of the Offered Certificates—General” in this free writing prospectus.
Commercial Lending Is Dependent upon Net Operating Income
The mortgage loans are secured by various types of income-producing commercial properties. Commercial mortgage loans are generally thought to expose a lender to greater risk than one to four family residential loans. The repayment of a commercial loan is typically dependent upon the ability of the related mortgaged property to produce cash flow through the collection of rents. Even the liquidation value of a commercial property is determined, in substantial part, by the amount of the mortgaged property’s cash flow (or its potential to generate cash flow). However, net operating income and cash flow are often based on assumptions regarding tenant behavior and market conditions. Net operating income and cash flow can be volatile over time and may be insufficient to cover debt service on the mortgage loan at any given time. Lenders typically look to the debt service coverage ratio (that is, the ratio of net cash flow to debt service) of a mortgage loan secured by income-producing property as an important measure of the risk of default of that mortgage loan.
The net operating income, cash flow and property value of the mortgaged properties may be adversely affected by a large number of factors specific to such properties, such as:
· | the age, design and construction quality of the mortgaged property; |
· | perceptions regarding the safety, convenience and attractiveness of the mortgaged property; |
· | the characteristics of the neighborhood where the mortgaged property is located; |
· | the proximity and attractiveness of competing properties; |
· | the adequacy of the mortgaged property’s management and maintenance; |
· | increases in interest rates, real estate taxes and other operating expenses at the mortgaged property and in relation to competing properties; |
· | an increase in the capital expenditures needed to maintain the mortgaged property or make improvements; |
· | the dependence upon a single tenant, or a concentration of tenants, at the mortgaged property in a particular business or industry; |
· | a decline in the financial condition of a major tenant at the mortgaged property; |
· | an increase in vacancy rates for the applicable property type in the relevant geographic area; and |
· | a decline in rental rates as leases are renewed or entered into with new tenants. |
Five (5) mortgaged properties, representing approximately 8.4% of the outstanding pool balance as of the cut-off date (by allocated loan amount), were either (i) constructed or the subject of a major renovation that was completed within 12 calendar months prior to the cut-off date and therefore the related mortgaged property has no prior operating history, (ii) the borrower or an affiliate under the related
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mortgage loan acquired the related mortgaged property within 12 calendar months prior to the cut-off date and such borrower or affiliate was unable to provide the related mortgage loan seller with historical financial information for such acquired mortgaged property, or (iii) are single tenant properties subject to triple-net leases with the related tenant where the related borrower did not provide the related mortgage loan seller with historical financial information for the related mortgaged property.
Other factors are more general in nature, such as:
· | national, regional or local economic conditions (including plant closings, military base closings, industry slowdowns and unemployment rates); |
· | local real estate conditions (such as an oversupply of competing properties, space, multifamily housing, manufactured housing, or hotel capacity); |
· | demographic factors; |
· | consumer confidence; |
· | consumer tastes and preferences; |
· | retroactive changes in building codes; |
· | changes or continued weakness in specific industry segments; |
· | location of certain mortgaged properties in less densely populated or less affluent areas; and |
· | the public’s perception of safety for customers and clients. |
The volatility of net operating income may be influenced by many of the foregoing factors, as well as by:
· | the length of tenant leases (including that in certain cases, all or substantially all of the tenants, or one or more sole, anchor or other tenants, at a particular mortgaged property have leases that expire or permit the tenant(s) to terminate its or their lease(s) during the term of the related mortgage loan) and other lease terms, including co-tenancy provisions; |
· | the creditworthiness of tenants; |
· | tenant defaults; |
· | in the case of rental properties, the rate at which vacant space or space under expiring leases is re-let; and |
· | the mortgaged property’s “operating leverage” (i.e., the percentage of total property expenses in relation to revenue, the ratio of fixed operating expenses to those that vary with revenues, and the level of capital expenditures required to maintain the property and to retain or replace tenants). |
A decline in the real estate market or in the financial condition of a major tenant will tend to have a more immediate effect on the net operating income of mortgaged properties with short-term revenue sources, such as short-term or month-to-month leases or leases with termination options, and may lead to higher rates of delinquency or defaults under the related mortgage loans.
In addition, underwritten or adjusted cash flows, by their nature, are speculative and are based upon certain assumptions and projections, including with respect to matters such as tenancy and rental income. The failure of these assumptions or projections in whole or in part could cause the underwritten or adjusted cash flows to vary substantially from the actual cash flows of a mortgaged property.
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See “Description of the Mortgage Pool—Additional Mortgage Loan Information” and “Risk Factors—Underwritten Net Cash Flow and Stabilized Values May Be Based on Flawed Assumptions” in the prospectus.
No representation is made that the underwritten net cash flow for any particular mortgaged property set forth in this free writing prospectus is predictive of future net cash flows.
Mortgage Loans Have Not Been Reunderwritten Since Origination
We have not reunderwritten the mortgage loans to determine that such mortgage loans were originated in accordance with the related originator’s underwriting guidelines. Instead, we have relied on the representations and warranties made by the sponsors, and each sponsor’s obligation to repurchase, substitute or effect a cure or make a loss of value payment with respect to a mortgage loan if a representation or warranty was not true when made and such breach materially and adversely affects the value of the mortgage loan, the value of the related mortgaged property or the interests of the trustee in the mortgage loan or the related mortgaged property. The representations and warranties may not cover all of the matters that one would review in underwriting a mortgage loan and you should not view them as a substitute for reunderwriting the mortgage loans. Furthermore, these representations and warranties in some respects represent an allocation of risk rather than a confirmed description of the mortgage loans. If we had reunderwritten the mortgage loans to determine that such mortgage loans were originated in accordance with the related originator’s underwriting guidelines, it is possible that the reunderwriting process may have revealed problems with a mortgage loan not covered by a representation or warranty or may have revealed inaccuracies in the representations and warranties. See, however, Annex G to this free writing prospectus for exceptions identified by the respective mortgage loan sellers to the representations and warranties made by them, which representations and warranties are set forth on Annex F to this free writing prospectus. In addition, we cannot assure you that the applicable sponsor will be able to repurchase or substitute a mortgage loan if a representation or warranty has been breached. See “—Risks Related to the Offered Certificates—A Mortgage Loan Seller May Not Be Able to Make a Required Repurchase or Substitution of a Defective Mortgage Loan” and “The Pooling and Servicing Agreement—Representations and Warranties;Repurchase;Substitution” in this free writing prospectus.
The Prospective Performance of the Commercial, Multifamily and Manufactured Housing Community Mortgage Loans Included in the Issuing Entity Should Be Evaluated Separately from the Performance of the Mortgage Loans in Any of the Depositor’s Other Trusts
While there may be certain common factors affecting the performance and value of income-producing real properties in general, those factors do not apply equally to all income-producing real properties and, in many cases, there are unique factors that will affect the performance and/or value of a particular income-producing real property. Moreover, the effect of a given factor on a particular real property will depend on a number of variables, including but not limited to property type, geographic location, competition, sponsorship and other characteristics of the property and the related mortgage loan. Each income-producing real property represents a separate and distinct business venture; and, as a result, each of the multifamily and commercial mortgage loans included in one of the depositor’s trusts requires a unique underwriting analysis. Furthermore, economic and other conditions affecting real properties, whether worldwide, national, regional or local, vary over time. The performance of a pool of mortgage loans originated and outstanding under a given set of economic conditions may vary significantly from the performance of an otherwise comparable mortgage pool originated and outstanding under a different set of economic conditions. Accordingly, investors should evaluate the mortgage loans underlying the offered certificates independently from the performance of mortgage loans underlying any other series of certificates.
As a result of the distinct nature of each pool of commercial mortgage loans, and the separate mortgage loans within the pool, this free writing prospectus does not include disclosure concerning the delinquency and loss experience of static pools of periodic originations by the sponsor of assets of the type to be securitized (known as “static pool data”). Because of the highly heterogeneous nature of the assets in commercial mortgage-backed securities transactions, static pool data for prior securitized pools,
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even those involving the same asset types (e.g., hotels or office buildings), may be misleading, since the economics of the properties and terms of the mortgage loans may be materially different. In particular, even if that static pool data showed a low level of delinquencies and defaults, it would not be indicative of the performance of this pool or any other pools of mortgage loans originated by the same sponsor or sponsors. Therefore, investors should evaluate this offering on the basis of the information set forth in this free writing prospectus with respect to the mortgage loans, and not on the basis of the performance of other pools of securitized commercial mortgage loans.
Some Mortgaged Properties May Not Be Readily Convertible to Alternative Uses
Some of the mortgaged properties securing the mortgage loans included in the issuing entity (such as an office property used substantially as a data center) may not be readily convertible to alternative uses if those properties were to become unprofitable for any reason. Converting commercial properties to alternate uses generally requires substantial capital expenditures and could result in a significant adverse effect on, or interruption of, the revenues generated by such mortgaged properties. In addition, zoning or other restrictions also may prevent alternative uses. The liquidation value of any such mortgaged property consequently may be substantially less than would be the case if the property were readily adaptable to other uses. For example, restaurants are not easily convertible to alternative uses. See “—Risks Related to Tenants”.
Some of the mortgaged properties may be subject to reciprocal easement agreements that may prevent such properties from being convertible to alternative uses. The related borrower may be unable to convert the mortgaged property to an alternative use due to certain restrictions and requirements in the reciprocal easement agreement.
Some of the mortgaged properties may have been designated as historic or landmark buildings or are located in areas designated as historic or landmark districts. See “—Risks Related to Zoning Laws” in this free writing prospectus.
Such properties may have restrictions related to renovations, construction or other restrictions and may not be permitted to be converted to alternative uses because of such restrictions.
Some of the mortgaged properties may be part of tax-reduction programs that apply only if the mortgaged properties are used for certain purposes. Such properties may be restricted from being converted to alternative uses because of such restrictions.
Some of the mortgaged properties have government tenants or other tenants which may have space that was “built to suit” that particular tenant’s uses and needs. For example, a government tenant may require enhanced security features that required additional construction or renovation costs and for which the related tenant may pay above market rent. However, such enhanced features may not be necessary for a new tenant (and such new tenant may not be willing to pay the higher rent associated with such features). While a government office building or government leased space may be “useable” as a regular office building or tenant space, the rents that may be collected in the event the government tenant does not renew its lease may be significantly lower than the rent currently collected.
Limitations of Appraisals
Appraisals were obtained with respect to each of the mortgaged properties at or about the time of the origination of the applicable mortgage loan, or in connection with the transfer of mortgage loans to the issuing entity. In the case of certain mortgage loans, a new appraisal or an update of a prior appraisal may have been obtained post-origination. As of the closing date, all of the mortgage loans will have appraisals dated within the prior 8 months.
In general, appraisals represent the analysis and opinion of qualified appraisers, but appraisals are not guarantees of present or future value. One appraiser may reach a different conclusion than the conclusion that would be reached if a different appraiser were appraising that property. Moreover, the values of the mortgaged properties may have fluctuated significantly since the appraisals were
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performed. Moreover, appraisals seek to establish the amount a typically motivated buyer would pay a typically motivated seller and, in certain cases, may have taken into consideration the purchase price paid by the borrower. That amount could be significantly higher than the amount obtained from the sale of a mortgaged property under a distress or liquidation sale. In certain cases, appraisals may reflect “as stabilized”, “as complete”, “as renovated”, “hypothetical as is” and/or “as is” values although the appraised value reflected in this free writing prospectus with respect to the mortgaged properties generally reflect only the “as-is” value unless otherwise indicated on Annex A-1 to this free writing prospectus and the footnotes thereto.
In some cases, the related appraisal may value the property on a portfolio basis, which may result in a higher value than the aggregate value that would result from a separate individual appraisal on each mortgaged property. Such is the case with respect to the aggregate appraised value of the portfolio of mortgaged properties identified on Annex A-1 to this free writing prospectus as the NMS Los Angeles Multifamily Portfolio mortgage loan, which secures a mortgage loan representing approximately 7.0% of the outstanding pool balance as of the cut-off date. Based on the aggregate individual property appraised values, the cut-off date LTV is 73.3%. Such is the case with respect to the aggregate appraised value of the portfolio of mortgaged properties identified on Annex A-1 to this free writing prospectus as Sandalwood Portfolio, which secures a mortgage loan representing approximately 6.8% of the outstanding pool balance as of the cut-off date. Based on the aggregate individual property appraised values, the cut-off date LTV is 64.5%. Such is the case with respect to the aggregate appraised value of the portfolio of mortgaged properties identified on Annex A-1 to this free writing prospectus as Midwest Shopping Center Portfolio, which secures a mortgage loan representing approximately 4.1% of the outstanding pool balance as of the cut-off date. Based on the aggregate individual property appraised values, the cut-off date LTV is 69.9%. We cannot assure you that the information set forth in this free writing prospectus regarding appraised values or loan-to-value ratios accurately reflects past, present or future market values of the mortgaged properties. Any appraisal represents only the analysis of the individual appraiser preparing such report at the time of such report, and may not reveal all necessary or desirable repairs, maintenance and capital improvement items.
Property Value May Be Adversely Affected Even When Current Operating Income Is Not
Various factors may adversely affect the value of the mortgaged properties without affecting the properties’ current net operating income. These factors include, among others:
· | changes in governmental regulations, fiscal policy, zoning or tax laws; |
· | potential environmental legislation or liabilities or other legal liabilities; |
· | the availability of refinancing; and |
· | changes in interest rate levels. |
Risks Related to Tenants
Tenant Concentration Entails Risk. A deterioration in the financial condition of a tenant can be particularly significant if a mortgaged property is leased to a single tenant, or if a few tenants make up a significant portion of the rental income. In the event of a default by a significant tenant, if the related lease expires prior to the mortgage loan maturity date and the related tenant fails to renew its lease or the tenant exercises an early termination right, there would likely be an interruption of rental payments under the lease and, accordingly, insufficient funds available to the borrower to pay the debt service on the mortgage loan. This is so because: (i) the financial effect of the absence of rental income from such tenant is typically severe; (ii) more time and leasing costs may be required to re-lease the space; (iii) substantial capital costs may be incurred to make the space appropriate for replacement tenants; and (iv) there is no assurance that the space can be re-leased on or near comparable terms.
The underwriting of single-tenant mortgage loans is based primarily upon the monthly rental payments due from the tenant under the lease at the related mortgaged property. In addition, the
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underwriting for certain single-tenant mortgage loans took into account the creditworthiness of the tenants or lease guarantors under the applicable leases. Similar analysis may impact the underwriting of mortgage loans with significant tenants. Accordingly, such single-tenant or significant-tenant mortgage loans may have higher loan-to-value ratios and lower debt service coverage ratios than other types of mortgage loans. However, there can be no assurance that the assumptions made when underwriting such mortgage loans will be correct, that the related tenant will re-let the premises or that such tenant will maintain its creditworthiness. There are 6 mortgaged properties, which secure mortgage loans representing in the aggregate approximately 3.1% of the outstanding pool balance as of the cut-off date (by allocated loan amount), that are each leased to a single tenant. With respect to 3 mortgaged properties, which secure in part mortgage loans representing in the aggregate approximately 2.7% of the outstanding pool balance as of the cut-off date, such single tenant leases expire before the related mortgage loan final maturity date or anticipated repayment date. Additionally, there are 13 mortgaged properties, securing mortgage loans representing in the aggregate 19.7% of the outstanding pool balance as of the cut-off date, that are each leased to a significant tenant (or a group of affiliated tenants) that lease 50% or more (but not 100%) of the net rentable area at the related mortgaged property. See Annex A-1 to this free writing prospectus for identification of the five largest tenants at each retail, office, mixed use and industrial mortgaged property, based on net rentable area and the scheduled expiration date of each such tenant’s lease (which may occur prior to or shortly following the maturity date of the related mortgage loan). In addition, certain single tenants, or significant tenants, may have specific termination rights under their leases that may be exercised prior to the related mortgage loan maturity date merely upon the giving of notice to the landlord, or upon the occurrence of certain circumstances, including, but not limited to, the failure to timely complete tenant buildouts, casualty and condemnation with respect to specified portions or percentages of the mortgaged property or which prevent the permitted use of the mortgaged property, failure to meet certain income or occupancy thresholds, if utilities or other essential services are not provided to the subject space, or the landlord otherwise fails to perform under the lease, for a specified period. For example, see “—Certain Additional Risks Related to Tenants” below with respect to the mortgage loans with tenant rights to terminate its lease prior to the mortgage loan maturity date.
Certain tenants may not occupy the entire leased space and may sublet all or a portion of the unoccupied space. In such cases, the tenant may not be able to pay its rent if a subtenant vacates, and the single tenant may be less likely to renew its lease than a tenant that fully occupies its leased space.
There can be no assurance that if a single or significant tenant exercises an early termination option prior to or shortly following the mortgage loan maturity date that the related borrower will have adequate cash flow available to satisfy debt service payments or be in a position to refinance the mortgage loan. See “—Certain Additional Risks Related to Tenants” in this free writing prospectus. Also, certain single tenants may be affiliated with the related borrower. See “—Mortgaged Properties Leased to Borrowers or Borrower Affiliated Entities Also Have Risks” below.
A pool of mortgage loans also may be adversely affected if there is a concentration of a particular tenant or type of tenant among the related mortgaged properties or of tenants in a particular business or industry or if there is a concentration of a particular tenant among the shadow anchors of a mortgaged property. In these cases, a problem with a particular tenant could have a disproportionately large impact on the pool of mortgage loans and adversely affect distributions to certificateholders. In certain cases, the tenant or industry may be suffering economic difficulties or may have announced plans to cut costs or close locations. Similarly, an issue with respect to a particular industry could also have a disproportionately large impact on a particular loan or on the pool of mortgage loans if various tenants are concentrated in a particular industry.
For additional information regarding significant tenants, see Annex A-1 to this free writing prospectus.
Such risks are particularly significant with respect to retail properties, in which case fluctuations in the financial performance of an anchor, shadow anchor or large tenant may significantly impact the financial performance of the related property. Such fluctuations may have a particular impact on the financial performance of smaller tenants and may trigger cotenancy provisions in such tenants’ leases that reduce the amount of rent payable or permit such tenants to terminate their leases. We note that several large
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retail companies have recently announced store closures in response to decreased consumer demand and increased competitive pressures. One or more of such companies may be an anchor, shadow anchor or large tenant at, or with respect to, certain mortgaged properties. We cannot assure you that any store not listed in a store closure plan will remain open for business or that, in light of increased competitive pressures in the retail industry, any retail anchor, large anchor or large tenant will continue to operate in its leased space.
Where an income producing property is leased to tenants that are heavily concentrated in a particular business or industry, a deterioration in the financial condition of such business or industry may cause a change in the plan of operations of one or more of those tenants at the same time. If such tenant leases expire and are not renewed or any such tenants have termination options that are exercised, and such non-renewal and/or termination options occur at the same time (or close in time) due to deteriorating conditions in a particular industry, this could cause (i) an interruption of rental payments under a related lease (during the time it takes for the space to be re-leased, which may require substantial capital costs to make the space appropriate for a replacement tenant), (ii) a significant reduction in rental payments for such space to the extent the space cannot be re-leased on or near comparable terms or (iii) the termination of rental payments for such space if the space cannot be re-let during the term of the mortgage loan.
For additional information regarding significant tenants, see Annex A-1 to this free writing prospectus.
Mortgaged Properties Leased to Multiple Tenants Also Have Risks. If a mortgaged property has multiple tenants, re-leasing expenditures may be more frequent than in the case of mortgaged properties with fewer tenants, thereby reducing the cash flow available for debt service payments. Multi-tenanted mortgaged properties also may experience higher continuing vacancy rates and greater volatility in rental income and expenses.
Mortgaged Properties Leased to Borrowers or Borrower Affiliated Entities Also Have Risks. If a mortgaged property is leased in whole or substantial part to the borrower under the mortgage loan or to an affiliate of the borrower, a deterioration in the financial condition of the borrower or its affiliates can be particularly significant to the borrower’s ability to perform under the mortgage loan as it can directly interrupt the cash flow from the mortgaged property if the borrower’s or its affiliate’s financial condition worsens. Certain mortgaged properties or portions of those mortgaged properties are (or may in the future be) leased to affiliates of the borrower under arrangements whereby the affiliate tenant (or affiliated subtenant) operates and/or leases the mortgaged property or the leased premises. Such lease arrangements present additional risks, such as the potential limitations on the ability of a lender upon default to obtain a receiver to obtain control of, and collect the underlying revenues from, the mortgaged property unless and until the affiliate lease is terminated and the affiliate tenant evicted from the mortgaged property or affiliate leased premises (which may not be possible if the affiliate lease is not in default or may be limited by an affiliate tenant bankruptcy or by requirements of local laws pertaining to the dispossession of defaulted tenants under the leases) and the risk that an affiliate lease termination may result in a termination or interruption of rent payments under the underlying subleases between the subtenants and the affiliate tenant. In addition, in some cases, a master lease with the borrower or an affiliate of the borrower is used to stabilize occupancy or cash flow in situations where it may fluctuate.
Certain of the mortgaged properties are leased in part by borrowers or borrower affiliates. Set forth below are examples of mortgaged properties at which at least 10% of (i) the gross income at the mortgaged property relates to leases between the borrower and an affiliate of the borrower or (ii) the net leasable area at the mortgaged property is leased to an affiliate of the borrower, excluding mortgaged properties that are leased to an affiliate of the borrower that functions as an operating lease:
· | With respect to the mortgaged property identified on Annex A-1 to this free writing prospectus as Cookie Factory Lofts, which secures a mortgage loan representing approximately 2.5% of the initial outstanding pool balance as of the cut-off date, the building is a historic structure, and as such, the building’s 2014 gut renovation qualified for state and federal historic tax credits. In connection with the sale of certain of these tax credits to a third party investor, the related borrower entered into a master lease of the property with an affiliate, which is controlled by the |
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loan sponsor and 99% owned by such investor. See “—Risks Related to Historic Tax Credits” in this free writing prospectus. |
· | In the case of the mortgaged property identified on Annex A-1 to this free writing prospectus as Parking Spot Portfolio, which secures a mortgage loan representing approximately 1.2% of the initial outstanding pool balance as of the cut-off date, the Parking Spot Portfolio mortgaged properties are 100% owner-operated under the Parking Spot brand, an affiliate of the Mortgage Loan sponsor. |
In some cases involving a manufactured housing community mortgaged property, an affiliate of the related borrower may own one or more of the homes at such mortgaged property, which it rents out like apartments, and may master lease the underlying pads. Only the rental income from the pads (but not from the homes) will be payable to the related borrower.
Certain Additional Risks Related to Tenants. The income from, and market value of, the mortgaged properties leased to various tenants would be adversely affected if, among other things:
· | space in the mortgaged properties could not be leased or re-leased (whether due to market conditions or specific provisions in leases that restrict the borrower from leasing other space to certain types of tenants); |
· | the mortgaged property were re-leased at a rental rate below the rental rate paid by the tenant at the space when the mortgage loan was originated; |
· | tenants were unable to meet their lease obligations; |
· | a significant tenant were to become a debtor in a bankruptcy case; or |
· | rental payments could not be collected for any other reason. |
For example, if a borrower agreed with a particular tenant that it would not lease space at the mortgaged property to a competitor of that tenant, the borrower may be precluded from leasing vacant space to a viable tenant if that tenant is deemed to be a competitor of the current tenant.
Even if vacated space is successfully relet, the costs associated with reletting, including tenant improvements and leasing commissions, could be substantial and could reduce cash flow from the mortgaged properties. In addition, any tenant may, from time to time, experience a downturn in its business, which may weaken its financial condition and result in a reduction of or failure to make rental payments when due. If tenants’ sales were to decline, percentage rents may decline and, further, tenants may be unable to pay their base rents or other occupancy costs. If a tenant defaults in its obligations to a borrower (or if a tenant terminates pursuant to the terms of its lease), that borrower may experience delays in enforcing its rights as lessor and may incur substantial costs and experience significant delays associated with protecting its investment, including costs incurred in renovating and reletting the property.
In addition, a tenant lease that expires or is terminated near or shortly following the maturity date (or the anticipated repayment date, if applicable) of a mortgage loan may make it more difficult for the borrower to obtain refinancing of the related mortgage loan and may thereby jeopardize repayment of the mortgage loan.
Additionally, in certain jurisdictions, if tenant leases are subordinated to the liens created by the mortgage but do not contain attornment provisions (provisions requiring the tenant to recognize a successor owner following foreclosure as landlord under the lease), the leases may terminate at the tenant’s option upon the transfer of the property to a foreclosing lender or purchaser at foreclosure. Accordingly, if a mortgaged property is located in such a jurisdiction and is leased to one or more desirable tenants under leases that are subordinate to the mortgage and do not contain attornment provisions, that mortgaged property could experience a further decline in value if the tenants’ leases were terminated.
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Certain of the mortgaged properties may have tenants that are related to or affiliated with a borrower. In such cases, a default by the borrower may coincide with a default by the affiliated tenants. Additionally, even if the property becomes an REO property, it is possible that an affiliate of the borrower may remain as a tenant. See “—Mortgaged Properties Leased to Borrowers or Borrower Affiliated Entities Also Have Risks” in this free writing prospectus.
In addition, various tenants may have rights under their respective leases that can result in substantial costs to the landlord.
Certain Risks of Charitable Institution Tenants. Certain mortgaged properties may have tenants that are charitable institutions that generally rely on contributions from individuals and government grants or other subsidies to pay rent on office space and other operating expenses. There can be no assurance that the rate, frequency and level of individual contributions or governmental grants and subsidies will continue with respect to any such institution. A reduction in contributions or grants may impact the ability of the related institution to pay rent, and there can be no assurance that the related borrower will be in a position to meet its obligations under the related mortgage loan documents if such tenant fails to pay its rent.
Certain Risks of School Tenants. Certain of the mortgaged properties may be occupied by a tenant operating a school.
The cash flows generated from public schools are generally dependent on federal, state and local government funding. The cash flows generated from private schools are generally dependent on student enrollment and the ability of enrolled students to pay tuition, which in some cases is dependent on the ability to obtain financial aid or loans. Enrollment at a private school or a charter school may decrease due to, among other factors:
· | changing local demographics; |
· | competition from other schools; |
· | increases in tuition and/or reductions in availability of student loans, government grants or scholarships; |
· | reductions in education spending as a result of changes in economic conditions in the area of the school; |
· | poor performance by teachers, administrative staff or students; or |
· | mismanagement at the private school. |
Some school tenants are for-profit institutions that rely on tuition from online students, many of which finance their education by utilizing the federal financial assistance under Title IV of the Higher Education Act of 1965 (“Title IV Financial Aid”). A for-profit education company will become ineligible for enrolling students that utilize the Title IV Financial Aid for at least two fiscal years, if during the immediately preceding two consecutive fiscal years such institution derives more than 90% of its revenues from the enrollment of students that obtain Title IV Financial Aid. A reduction in student enrollment may impact the ability of the school to pay rent, and there can be no assurance that the related borrower will be in a position to meet its obligations under the related mortgage loan documents if such tenant fails to pay its rent. In addition, there is proposed legislation that could potentially change the Title IV Financial Aid funding methods, which may negatively affect the for-profit education companies.
Certain Risks of Medical or Dental Office Tenants. Certain of the mortgaged properties are occupied by tenants that utilize the mortgaged property as medical or dental offices, some of which offices may perform out-patient medical procedures. The performance of a medical or dental office property may depend on the proximity of such property to a hospital or other healthcare establishment and on reimbursements for patient fees from private or government-sponsored insurance companies. The
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sudden closure of a nearby hospital may adversely affect the value of a medical or dental office property. In addition, the performance of a medical or dental office property may depend on reimbursements to tenants for patient fees from private or government-sponsored insurers and issues related to reimbursement (ranging from non-payment to delays in payment) from such insurers could adversely impact cash flow at such mortgaged properties. Moreover, medical or dental office properties appeal to a narrow market of tenants and the value of a medical or dental office property may be adversely affected by the availability of competing medical or dental office properties.
Certain Risks of Restaurant Tenants. Certain of the mortgaged properties include significant restaurant tenants. For information regarding significant restaurant tenants at mortgaged properties that represent one or more of the 5 largest tenants (by net rentable area leased), see Annex A-1 to this free writing prospectus. Certain other mortgaged properties may have smaller restaurant tenants. Restaurants are subject to certain unique risks including that restaurant space is not easily convertible to other types of retail space (or office space, if applicable) and that restaurant receipts are not only affected by objective factors but by subjective factors. For instance, restaurant receipts are affected by such varied influences as the current personal income levels in the community, an individual consumer’s preference for type of food, style of dining and restaurant atmosphere, the perceived popularity of a restaurant, food safety concerns related to personal health or the handling of food items at the restaurant or by food suppliers and the actions/behaviors of staff and management and level of service to the customers.
Certain Risks of Health Club, Fitness Center or Exercise Studio Space Tenants. Certain of the mortgaged properties includes significant health club, fitness center or exercise studio tenants. For information regarding health club, fitness center or exercise studio tenants at mortgaged properties that represent one or more of the 5 largest tenants (by net rentable area leased), see Annex A-1 to this free writing prospectus. Certain other mortgaged properties may have smaller health club, fitness center, exercise studio or similar tenants. Several factors may adversely affect the value and successful operation of a health club, fitness center or exercise studio, including:
· | the physical attributes of the property (e.g., its age, appearance and layout); |
· | the reputation, safety, convenience and attractiveness of the property to users; |
· | the quality and philosophy of management; |
· | management’s ability to control membership growth and attrition; |
· | competition in the tenant’s marketplace from other health clubs and alternatives to health clubs; and |
· | adverse changes in economic and social conditions and demographic changes (e.g., population decreases or changes in average age or income), which may result in decreased demand. |
In addition, there may be significant costs associated with changing consumer preferences (e.g., multi-purpose clubs from single-purpose clubs or varieties of equipment, classes, services and amenities). In addition, health clubs and exercise studios may not be readily convertible to alternative uses if those properties were to become unprofitable for any reason. The liquidation value of any such health club consequently may be less than would be the case if the property were readily adaptable to changing consumer preferences for other uses.
Certain Risks of Movie Theater and other Specialty Entertainment Tenants. Certain of the mortgaged properties includes significant movie theater tenants or other specialty entertainment tenants such as a live theater tenants or gaming tenants. For information regarding such significant tenants at mortgaged properties that represent one or more of the 5 largest tenants (by net rentable area leased), see Annex A-1 to this free writing prospectus.
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Properties with movie theater tenants, or other specialty entertainment tenants such as live theater tenants or gaming tenants, are exposed to unique risks. Aspects of building site design and adaptability affect the value of a theater or other specialty entertainment venue and make it difficult to easily convert to another use. In addition, decreasing attendance at a theater or other specialty entertainment venue could adversely affect revenue of the theater or such other specialty entertainment venue, which may, in turn, cause the tenant to experience financial difficulties, resulting in downgrades in their tenant ratings, if applicable, and in certain cases, bankruptcy filings. See “—Risks Related to Tenants—Tenant Bankruptcy Entails Risks” in this free writing prospectus.
Certain Risks of Retail Bank Branches. Certain of the mortgaged properties may be occupied by one or more tenants that utilize a portion of the mortgaged property as a bank branch. Bank branches are specialty use properties that are outfitted with vaults, teller counters and other customary installations and equipment that require significant capital expenditures. The ability to lease these properties to entities other than financial institutions may be difficult due to the added cost and time of refitting the properties. For information regarding bank branch tenants at office properties that represent one or more of the 5 largest tenants (by net rentable area leased), see Annex A-1 to this free writing prospectus.
A concentration of leases to banks as to a related mortgage loan or an individual mortgaged property securing a related mortgage loan could have a negative effect on net operating income in the event of a downturn in the banking industry or a shift in the banking industry business model concerning retail branches. Individual banks, as well as the banking industry in general, may be adversely affected by negative economic and market conditions throughout the United States or in the local economies in which regional or community banks operate. In addition, changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System, may have an adverse impact on banks’ loan portfolios and allowances for loan losses. As a result, the mortgaged properties may experience higher rates of lease defaults or terminations in the event of a downturn in the banking industry that they would if the tenant base were more diversified. This, in turn could cause losses on the mortgage loans and on your investment in the certificates offered hereby.
Certain Risks Related to Rent Abatement Periods. Certain tenants currently may be in a “free rent” or rent abatement period. There can be no assurance that such tenants will be in a position to pay full rent when the abatement period expires. For example, with respect to the top 5 tenants for the top 20 mortgage loans, the following tenants listed on Annex A-1 to this free writing prospectus are currently in a rent abatement period for all or a significant portion of such tenant’s leased space:
· | With respect to the mortgaged property identified on Annex A-1 to this free writing prospectus as 11 Madison Avenue, which secures a mortgage loan representing approximately 7.5% of the outstanding pool balance as of the cut-off date, Sony, which leases approximately 25.3% of the rentable area at the mortgaged property, has not yet taken occupancy; however the rent commencement dates have been set for the majority of the leased premises (and with respect to the remaining premises, will be set upon such premises being delivered to Sony). Prior to the respective rent commencement date for each portion of its space, Sony is entitled to a free rent period with respect to such space. On the origination date of the mortgage loan, the borrower deposited $18,847,898 into a rollover reserve account in respect of free rent under the Sony lease. Such funds are required to be transferred each month in an amount equal to the related rent that would otherwise be due absent such free rent period into a lease costs reserve account established for the payment of certain base building costs, tenant improvements and leasing commissions for Sony and other major tenants at the mortgaged property. In addition, certain major tenants are entitled to significant future rent abatements. For example, Credit Suisse is entitled to a $73,465,334 rent credit, which is required to be applied against basic annual rent and additional rent commencing June 1, 2032 until fully applied (subject to increase or decrease if Credit Suisse increases or decreases its leased space), Sony is entitled to receive a rent credit in the amount of $8,178,927 on February 1, 2030, and Yelp is entitled to a one month abatement in April 2025. |
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· | With respect to the mortgaged property identified on Annex A-1 to this free writing prospectus as Green Valley Corporate Center, representing approximately 2.9% of the outstanding pool balance as of the cut-off date, the third largest tenant, Amica Mutual Insurance Company, is entitled to one month of free rent in February 2017. The fifth largest tenant, Par Springer-Miller Systems, Inc., is in a free rent period through October 31, 2015. |
· | With respect to the mortgaged property identified on Annex A-1 to this free writing prospectus as Chase Park, representing approximately 2.9% of the outstanding pool balance as of the cut-off date, three tenants have free rent periods through January 2016 (including the second largest tenant, Austin Stone Church, which has a free rent period in September 2015). At closing, the borrower deposited $67,479 into a free rent reserve. |
Certain Risks Related to Early Termination Provisions in Tenant Leases. Repayment of the mortgage loans secured by retail, office, mixed use and industrial properties will be affected by the expiration or early termination of leases and the ability of the respective borrowers to renew the leases or relet the space on comparable terms. In this regard, the five largest tenants (based on net rentable area) and their respective lease expiration dates for retail, office, mixed use and industrial properties are set forth on Annex A-1 to this free writing prospectus. In certain cases, however, a tenant may have the option to terminate its lease or abate rent prior to the stated lease expiration date. In some cases, this option may be at any time or after the passage of time. In other cases, the option is tied to outside contingencies, for example, if the landlord violates the lease (including impermissible uses of other portions of the property) or interferes with the tenant’s use of the property, upon casualty or condemnation, if utilities or other essential services are not provided to the space for a specified period, for zoning violations or changes in zoning, if certain anchor or key tenants (including at an adjacent property) or a certain number of tenants go dark or cease operations, in connection with the failure to satisfy sales target business objectives, in connection with the inability of the tenant to exercise an expansion right or, in the case of a government tenant, for lack of appropriations or other reasons.
Furthermore, certain of the mortgaged properties have tenant leases that permit a tenant, including a significant tenant, to unilaterally terminate its lease. For example (with respect to the top 5 tenants listed on Annex A-1 to this free writing prospectus for the top 20 mortgage loans), the following significant tenants have lease provisions that permit the tenant to unilaterally terminate its lease or to abate rent, in each case on a future date during the mortgage loan term and prior to the stated lease expiration date:
· | With respect to the mortgaged property identified on Annex A-1 to this free writing prospectus as 11 Madison Avenue, which secures a mortgage loan representing approximately 7.5% of the outstanding pool balance as of the cut-off date, Credit Suisse, which occupies approximately 55.4% of the rentable area at the mortgaged property, has the right to terminate one full floor provided such floor is either the highest of floors 2 through 18 then leased or the highest of floors 19 through 28 then leased, upon at least 15 months advance notice. The termination must be effective on the last day of a month occurring between May 2022 and April 2027 (inclusive). A termination fee generally based on the unamortized value of certain transaction costs for the terminated floors, less the unamortized value of certain future rent abatements for such terminated floors, is due upon such termination. |
· | With respect to the mortgaged property identified on Annex A-1 to this free writing prospectus as Intellicenter, which secures a mortgage loan representing approximately 3.6% of the outstanding pool balance as of the cut-off date, Morgan Stanley, the second largest tenant, has the one-time right to terminate its lease effective March 31, 2019 with at least 12 months prior notice and the payment of a $855,214 termination fee. The borrower is required to deposit with the lender this termination fee within one business day of receipt. |
The footnotes to Annex A-1 to this free writing prospectus identify certain of the non-contingent early termination provisions related to the 5 largest tenants shown on Annex A-1. However, such footnotes do not identify all of the early termination options that tenants may have under their leases. In addition, see
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“Annex B—Description of the Top 20 Mortgage Loans” for certain non-contingent early termination provisions related to the five largest tenants shown on Annex A-1 for the top 10 mortgage loans.
Risks Related to Leases with Government Tenants. There are risks associated with leases with the government or a government agency. Appropriations clauses exist in most leases with the government or a governmental agency. These clauses usually permit the tenant to terminate its lease if the governmental agency does not receive adequate funding or for other related reasons. Additionally, any government shutdown or failure by the government to approve a budget bill might delay the receipt of payments under leases to the U.S. government or a state or local government.
Risks Related to Tenants Not Yet In Occupancy. There are risks associated with leases with tenants that are not yet in occupancy. With respect to such tenants, we cannot assure you that these tenants will take occupancy, begin paying rent or accept possession of the premises. If these tenants do not take occupancy of the leased space and begin paying rent, in some cases such tenants may be permitted to terminate the related lease. This will result in a higher vacancy rate and re-leasing costs that may adversely affect cash flow on the related mortgage loan. For example, solely with respect to the five largest tenants (by net rentable area leased) at the mortgaged properties securing certain of the top 20 mortgage loans:
· | With respect to the mortgaged property identified on Annex A-1 to this free writing prospectus as 11 Madison Avenue, which secures a mortgage loan representing approximately 7.5% of the outstanding pool balance as of the cut-off date, Sony, which leases approximately 25.3% of the rentable area at the mortgaged property, has not yet taken occupancy. The Sony space is being built out for such tenant. Additional work remains to be completed, including the premises on the mezzanine floor space and certain pre-delivery premises work, post-delivery premises work and punch list items in connection with office premises on floors 19 through 29. If the post-delivery premises work is not completed within the time required under the Sony lease, Sony will receive a day for day extension of the rent commencement date for the retail space leased by it and a portion of the mezzanine space. Sony is also entitled to receive various rent and work allowance credits, penalties and/or extensions of its rent commencement dates in connection with failure of the borrower to complete certain items of work or allow Sony employees access to the Sony lobby. |
· | With respect to the mortgaged property identified on Annex A-1 to this free writing prospectus as Chase Park, which secures a mortgage loan representing approximately 2.9% of the outstanding pool balance as of the cut-off date, the largest tenant, Seton, occupying approximately 23.6% of the net rentable area at the mortgaged property, is scheduled to take occupancy and begin paying rent on November 1, 2015 with respect to an expansion space of 8,600 sq. ft., and the second largest tenant, Austin Stone Church, occupying approximately 10.4% of the net rentable area at the mortgaged property, is scheduled to accept delivery of the premises and commence paying rent on 28,614 sq. ft. of its space on November 1, 2015 and the remaining 1,245 sq. ft. on October 1, 2016. At closing, the borrower deposited approximately $1.4 million for tenant improvements and leasing commissions relating to the Austin Stone Church lease. |
See “—Risks of Co-Tenancy and Other Early Termination Provisions in Retail and Office Leases” below for a description of the various termination options that many tenants may exercise upon the occurrence of certain contingencies including, without limitation, based on co-tenancy provisions, breaches of the lease terms, casualty and condemnation and property performance.
Tenant Bankruptcy Entails Risks. The bankruptcy or insolvency of a major tenant, or a number of smaller tenants, in retail, office, mixed use and industrial properties may adversely affect the income produced by a mortgaged property. Under the federal bankruptcy code, a tenant has the option of assuming or rejecting or, subject to certain conditions, assuming and assigning to a third party, any unexpired lease. If the tenant assumes its lease, the tenant must cure all defaults under the lease and provide the landlord with adequate assurance of its future performance under the lease. If the tenant rejects the lease, the landlord’s claim for breach of the lease would be treated as a general unsecured claim against the tenant (absent collateral securing the claim). The landlord’s claim would be limited to
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the unpaid rent due under the lease for the periods prior to the bankruptcy petition (or earlier surrender of the leased premises) that are unrelated to the rejection, plus the greater of one year’s rent or 15% of the remaining reserved rent (but not more than three years’ rent). If the tenant assigns its lease, the tenant must cure all defaults under the lease and the proposed assignee must demonstrate adequate assurance of future performance under the lease. Certain of the tenants may have been, may be, and may at any time during the term of the related mortgage loan become, a debtor in a bankruptcy proceeding.
If the leased premises are located in a “shopping center” as such term has been interpreted under section 365 of the federal bankruptcy code, the assignee may be required to agree to certain conditions that are protective of the property owner, such as compliance with specific lease terms relating to, among other things, exclusivity and the terms of reciprocal easement agreements. However, we cannot assure you that any mortgaged property (even a mortgaged property identified as a “shopping center” in this free writing prospectus) would be considered a shopping center by a court considering the question.
We cannot assure you that tenants of mortgaged properties will continue making payments under their leases or that tenants will not file for (or involuntarily be subjected to) bankruptcy protection in the future or, if any tenants so become debtors under the federal bankruptcy code, that they will continue to make rental payments in a timely manner or that they will not reject their leases.
Risks Related to Mortgage Loan Concentration
Several of the mortgage loans have cut-off date balances that are substantially higher than the average cut-off date balance. In general, concentrations in mortgage loans with larger-than-average balances can result in losses that are more severe, relative to the size of the mortgage loan pool, than would be the case if the aggregate balance of the mortgage loan pool were more evenly distributed. The top 10 mortgage loans represent approximately 47.7% of the outstanding pool balance as of the cut-off date. The top 20 mortgage loans represent approximately 67.4% of the outstanding pool balance as of the cut-off date. Losses on any of these mortgage loans may have a particularly adverse effect on the offered certificates.
The top 20 mortgage loans are described in Annex B to this free writing prospectus. Each of the mortgage loans other than the top 10 mortgage loans represents no more than 2.6% of the outstanding pool balance as of the cut-off date.
Risks Related to Borrower Concentration
Eight (8) groups of mortgage loans are made to the same borrower or have related borrowers that are affiliated with one another through partial or complete direct or indirect common ownership, with the top 3 groups representing approximately 4.6%, 2.8% and 2.2% of the outstanding pool balance as of the cut-off date. A concentration of mortgage loans with the same borrower or related borrowers can pose increased risks to certificateholders. For instance, if a borrower or group of affiliated borrowers that owns several mortgaged properties experiences financial difficulty at one mortgaged property, or at another income-producing property that such borrower or group of affiliated borrowers owns, the related sponsorship may attempt to avert foreclosure at one property by filing a bankruptcy petition that might have the effect of interrupting monthly payments for an indefinite period on all of the related mortgage loans due to administrative delays or in the event of substantive consolidation of the debtors. See Annex A-1 to this free writing prospectus for mortgage loans with related borrowers.
Risks Relating to Property Type Concentration
A concentration of mortgage loans secured by the same mortgaged property types can increase the risk that a decline in a particular industry or business would have a disproportionately large impact on the pool of mortgage loans.
The following are certain property type concentrations of the pool of mortgage loans as of the cut-off date (based on the allocated loan amount):
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· | Twenty-nine (29) multifamily properties, representing approximately 36.6% of the outstanding pool balance as of the cut-off date; |
· | Twenty-four (24) retail properties, representing approximately 19.5% of the outstanding pool balance as of the cut-off date; |
· | Seven (7) office properties, representing approximately 18.0% of the outstanding pool balance as of the cut-off date; |
· | Fourteen (14) hospitality properties, representing approximately 13.8% of the outstanding pool balance as of the cut-off date; |
· | Seven (7) industrial properties, representing approximately 3.8% of the outstanding pool balance as of the cut-off date; |
· | Four (4) manufactured housing community property, representing approximately 3.2% of the outstanding pool balance as of the cut-off date; |
· | Eight (8) self-storage properties, representing approximately 2.8% of the outstanding pool balance as of the cut-off date; |
· | Two (2) parking properties, representing approximately 1.2% of the outstanding pool balance as of the cut-off date; and |
· | One (1) mixed use multifamily/retail property, representing approximately 1.1% of the outstanding pool balance as of the cut-off date. |
Geographic Concentration Exposes Investors to Greater Risk of Default and Loss
As of the cut-off date, the mortgaged properties are located in 28 separate states and the District of Columbia.
The table below shows the number of mortgaged properties, the aggregate cut-off date balance of the related mortgage loans (or allocable portion thereof, with respect to mortgage loans secured by multiple mortgaged properties), and the percentage of initial outstanding pool balance secured by mortgaged properties that are located in the jurisdictions that have concentrations of mortgaged properties of 5.0% or more (based on allocated loan amount as a percentage of the initial outstanding pool balance) as of the cut-off date:
State/Location | Number of Mortgaged Properties | Aggregate Cut- | % of Initial Outstanding Pool Balance(1) | |||
Texas | 12 | $ 126,118,259 | 13.5% | |||
Florida | 11 | $ 115,142,500 | 12.4% | |||
California | 9 | $ 92,986,331 | 10.0% | |||
New York | 5 | $ 89,562,262 | 9.6% | |||
Illinois | 8 | $ 52,493,290 | 5.6% | |||
Georgia | 4 | $ 50,975,000 | 5.5% |
(1) | Because this table presents information related to the mortgaged properties and not the mortgage loans, the information for any mortgaged property that relates to a mortgage loan secured by more than one mortgaged property is based on allocated loan amounts (which amounts, if not specified in the related mortgage loan document, are based on the appraised valued and/or square footage of each mortgaged property and/or each mortgaged property’s underwritten net cash flow). |
See the table entitled “Mortgaged Properties by State and/or Location” in Annex A-2 to this free writing prospectus. Also, for certain legal aspects of mortgage loans secured by mortgaged properties located in a state with a concentration of 10% or more of the outstanding pool balance, see “Legal Aspects of Mortgage Loans in Texas, Florida and California” in this free writing prospectus. Except as set forth in the chart above, no state or location contains more than 5.0% of the mortgaged properties (based on the principal balance as of the cut-off date of the related mortgage loans secured by or, in the case of
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mortgage loans secured by multiple mortgaged properties, on the portion of principal amount of the related mortgage loan allocated to, such mortgaged properties).
Repayments by borrowers and the market value of the related mortgaged properties could be affected by economic conditions generally or by conditions specific to geographic areas or regions of the United States, and concentrations of mortgaged properties in particular geographic areas may increase the risk that adverse economic or other developments or natural disasters affecting a particular region of the country could increase the frequency and severity of losses on mortgage loans secured by those properties. In recent periods, several regions of the United States have experienced significant real estate downturns. Regional economic declines or conditions in regional real estate markets could adversely affect the income from, and market value of, the mortgaged properties. In addition, particular local or regional economies may be adversely affected to a greater degree than other areas of the country by developments affecting industries concentrated in such area. A decline in the general economic condition in the region in which mortgaged properties securing the related mortgage loans are located could result in a decrease in consumer demand in the region, and the income from and market value of the mortgaged properties may be adversely affected.
Several mortgaged properties are located in areas that, based on low population density, poor economic demographics (such as higher than average unemployment rates, lower than average annual household income and/or overall loss of jobs) and/or negative trends in such regard, would be considered secondary or tertiary markets.
Other regional factors –e.g., earthquakes, floods, forest fires or hurricanes or changes in governmental rules or fiscal policies – also may adversely affect the mortgaged properties. For example, properties located in California, Florida, Georgia, Louisiana, North Carolina, South Carolina, Alabama and Texas may be more susceptible to certain hazards (such as earthquakes, floods or hurricanes) than properties in other parts of the country and mortgaged properties located in coastal states, including, but not limited to, Florida, Georgia, Louisiana, North Carolina, South Carolina, Alabama and Texas, also may be more generally susceptible to hurricanes, tornados and other windstorms than properties in other parts of the country. Recent hurricanes have resulted in severe property damage as a result of the winds and the associated flooding. Some of the mortgaged properties may be located in areas more susceptible to these natural disasters. The loan documents for the mortgage loans generally do not require flood insurance on the related mortgaged properties unless material improvements on such mortgaged property is located in a flood zone and flood insurance is available. Even if material improvements on the mortgaged property is located in a flood zone and flood insurance is obtained, we cannot assure you that the flood insurance will be adequate to cover the loss. Moreover, we cannot assure you that hurricane damage would be covered by insurance. Regional areas affected by such events often experience disruptions in travel, transportation and tourism, loss of jobs and an overall decrease in consumer activity, and often a decline in real estate-related investments. There can be no assurance that the economies in such impacted areas will recover sufficiently to support income producing real estate at pre-event levels or that the costs of the related clean-up will not have a material adverse effect on the local or national economy.
In addition, certain cities, states or regions of the country are currently facing or may face a depressed real estate market, which is not due to any natural disaster, but which may cause an overall decline in property values. Certain of the mortgaged properties are located in such cities, states and regions of the country.
With respect to the state concentration levels shown in the chart above, certain areas within a state may have a particularly high concentration of mortgaged properties. With respect to the related mortgage loans, repayments by the related borrower and the market value of the related mortgaged properties could be affected by economic conditions general or specific to New York City. Performance of the related mortgaged properties could be adversely affected by conditions in the New York City real estate market, changes in city and state governmental rules and fiscal policies, acts of nature, including earthquakes, windstorms, hurricanes, sinkholes and floods (which may result in uninsured losses), and other factors which are beyond the control of the related borrowers and the related property managers. In addition, the economy of New York City may be adversely affected to a greater degree than that of other
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areas of the country by developments affecting industries concentrated in the city. The strength of the New York City economy and the office and retail leasing market is dependent upon foreign and domestic businesses selecting New York City as the location in which to engage in trade, finance and business services, and the strength of the tourism industry in New York City. The level of economic growth in general and job growth in the foregoing sectors in particular will affect net absorption of office and retail space and increases in office and retail rental rates. A weakening of the New York City office and retail leasing market generally and the midtown New York City office and retail leasing market in particular may adversely affect the operation of the related mortgaged property and lessen its market value. Conversely, a strong market could lead to increased building and increased competition for tenants. In either case, the resulting effect on the operations of the mortgaged properties located in New York City could adversely affect the amount and timing of payments on the related mortgage loan and consequently the amount and timing of distributions on the certificates.
Multifamily Properties Have Special Risks
There are 29 multifamily properties, securing approximately 36.6% of the outstanding pool balance as of the cut-off date (by allocated loan amount).
A large number of factors may adversely affect the value and successful operation of a multifamily property, including:
· | the physical attributes of the apartment building (e.g., its age, appearance and construction quality); |
· | the quality of property management; |
· | the location of the property (e.g., a change in the neighborhood over time or increased crime in the neighborhood); |
· | the ability of management to provide adequate maintenance and insurance; |
· | the types of services the property provides; |
· | the property’s reputation; |
· | the level of mortgage interest rates (which may encourage tenants to purchase rather than rent housing); |
· | the generally short terms of residential leases and the need for continued reletting; |
· | rent concessions and month-to-month leases, which may impact cash flow at the property; |
· | in the case of student housing facilities, which may be more susceptible to damage or wear and tear than other types of multifamily housing, the reliance on the financial well-being of the college or university to which it relates, competition from on-campus housing units, which may adversely affect occupancy, the physical layout of the housing, which may not be readily convertible to traditional multifamily use, and that student tenants have a higher turnover rate than other types of multifamily tenants, which in certain cases is compounded by the fact that student leases are available for periods of less than 12 months; |
· | in the case of certain of the multi-family properties that may be considered to be “flexible apartment properties,” such properties may have a significant percentage of their units leased to tenants under short term leases (less than one year in term), which creates a higher turnover rate than for other types of multifamily properties; |
· | restrictions on the age of tenants who may reside at the property, thereby limiting the pool of potential tenants; |
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· | the presence of competing properties and residential developments in the local market; |
· | the existence of corporate tenants renting large blocks of units at the property, which if such tenant vacates would leave the property with a significant percentage of unoccupied space, and if such tenant was renting at an above-market rent may make finding replacement tenants difficult; |
· | the tenant mix, particularly if the tenants are predominantly students, personnel from or workers related to a military base or workers from a particular business or industry; |
· | adverse local, regional or national economic conditions, which may limit the amount of rent that can be charged and may result in a reduction in timely rent payments or a reduction in occupancy; |
· | state and local regulations; |
· | government assistance/rent subsidy programs; and |
· | national, state or local politics. |
State Regulations and Government Subsidies May Affect a Borrower’s Ability To Repay a Multifamily Mortgage Loan. Certain states regulate the relationship of an owner and its tenants. Commonly, these laws require a written lease, good cause for eviction, disclosure of fees, and notification to residents of changed land use, while prohibiting unreasonable rules, retaliatory evictions, and restrictions on a resident’s choice of unit vendors. Apartment building owners have been the subject of suits under state “Unfair and Deceptive Practices Acts” and other general consumer protection statutes for coercive, abusive or unconscionable leasing and sales practices. A few states offer more significant protection. For example, there are provisions that limit the basis on which a landlord may terminate a tenancy or increase its rent or prohibit a landlord from terminating a tenancy solely by reason of the sale of the owner’s building.
In addition to state regulation of the landlord-tenant relationship, numerous counties and municipalities, including those in which certain of the mortgaged properties are located, impose rent control or rent stabilization rules on apartment buildings. These ordinances may limit rent increases to fixed percentages, to percentages of increases in the consumer price index, to increases set or approved by a governmental agency, or to increases determined through mediation or binding arbitration. In many cases, the rent control laws do not permit vacancy decontrol. Some local authorities may not be able to impose rent control because it is pre-empted by state law in certain states, and rent control is not imposed at the state level in those states. In other states, however, local rent control ordinances are not pre-empted for tenants having short-term or month-to-month leases, and properties there may be subject to various forms of rent control with respect to those tenants. In some jurisdictions, including, for example, New York City, many apartment buildings are subject to rent stabilization and some units are subject to rent control. These regulations, among other things, limit a borrower’s ability to raise rents above specified percentages. Any limitations on a borrower’s ability to raise property rents may impair such borrower’s ability to repair or renovate the mortgaged property or repay its mortgage loan from net operating income or from the proceeds of a sale or refinancing of the mortgaged property.
Certain of the mortgage loans may be secured now or in the future by mortgaged properties that are eligible for and have received low income housing tax credits pursuant to Section 42 of the Internal Revenue Code of 1986, as amended, in respect of various units within the property or have tenants that rely on rent subsidies under various government-funded programs, including the Section 8 Tenant-Based Assistance Rental Certificate Program of the U.S. Department of Housing and Urban Development. The depositor gives no assurance that such programs will be continued in their present form or that the level of assistance provided will be sufficient to generate enough revenues for the related borrower to meet its obligations under the related mortgage loan. See “Description of the Mortgage Pool—Certain Terms and Conditions of the Mortgage Loans—Mortgage Loans Subject to Government Assistance Programs” in this free writing prospectus.
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Student Housing Facilities Pose Risks Not Associated With Other Types of Multifamily Properties. Two (2) mortgaged properties, securing approximately 1.6% of the outstanding pool balance as of the cut-off date (by allocated loan amount), are 33% or more occupied as student housing. Student housing facilities may be more susceptible to damage or wear and tear than other types of multifamily housing. Such properties are also affected by their reliance on the financial well-being of the college or university to which such housing relates or the college or university that is leasing such space, competition from on-campus housing units (which may adversely affect occupancy), and the physical layout of the housing (which may not be readily convertible to traditional multifamily use). In addition, student tenants have a higher turnover rate than other types of multifamily tenants, which in certain cases is compounded by the fact that student leases are often available for periods of fewer than 12 months.
Certain Risks Related to Multifamily Properties with Age Restrictions. The mortgaged properties identified on Annex A-1 to this free writing prospectus as Lancaster Towers and Sonora Cascade MHC, which secure mortgage loans representing approximately 0.9% and 0.5%, respectively, of the outstanding pool balance as of the cut-off date, requires that residents be 55 years of age or older, thereby limiting the potential tenant pool. The mortgaged property is a “special purpose” property that could not be readily converted to general residential, retail or office use. Thus, if the operation of the mortgaged property becomes unprofitable due to competition, age of the improvements or other factors such that the borrower becomes unable to meet its obligations on the related mortgage loan, the liquidation value of the mortgaged property may be substantially less, relative to the amount owing on the related mortgage loan, than would be the case if the mortgaged property was readily adaptable to other uses.
Retail Properties Have Special Risks
There are 24 retail properties, securing approximately 19.5% of the outstanding pool balance as of the cut-off date (by allocated loan amount). For a list of the top five tenants (by net rentable area), see Annex A-1 to this free writing prospectus. The value of retail properties is significantly affected by the quality of the tenants as well as fundamental aspects of real estate, such as location and market demographics. The correlation between success of tenant business and a retail property’s value may be more direct with respect to retail properties than other types of commercial property because a component of the total rent paid by certain retail tenants is often tied to a percentage of gross sales.
Certain retail properties may have other non-retail types of tenants including office and medical office tenants. For risks related to office tenants, see “—Office Properties Have Special Risks” in this free writing prospectus.
The Presence or Absence of an “Anchor Tenant” May Adversely Affect the Economic Performance of a Retail Property. Whether a retail property is “anchored,” “shadow anchored” or “unanchored” is also an important consideration. The presence or absence of an “anchor tenant” or a “shadow anchor tenant” in or near a retail property also can be important, because anchors play a key role in generating customer traffic and making a center desirable for other tenants. An “anchor tenant” is usually proportionately larger in size than most other tenants in the mortgaged property, is vital in attracting customers to a retail property and is located on the related mortgaged property. Many of the retail properties securing one or more of the mortgage loans also have shadow anchor tenants. A “shadow anchor tenant” is usually proportionally larger in size than most tenants in the mortgaged property, is important in attracting customers to a retail property and is located sufficiently close and convenient to the mortgaged property so as to influence and attract potential customers, but not on the mortgaged property. The economic performance of an anchored or shadow anchored retail property will consequently be adversely affected by:
· | an anchor tenant’s or shadow anchor tenant’s failure to renew its lease or termination of an anchor tenant’s or shadow anchor tenant’s lease; |
· | if the anchor tenant or shadow anchor tenant owns its own site, a decision to vacate; |
· | the bankruptcy or economic decline of an anchor tenant, shadow anchor tenant or self-owned anchor; or |
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· | the cessation of the business of an anchor tenant, a shadow anchor tenant or of a self-owned anchor (notwithstanding its continued payment of rent). |
Although a shadow anchor that owns its own parcel does not pay rent, it generally is required to pay a contribution toward common area maintenance under a reciprocal easement or similar agreement. However, there can be no assurance that a shadow anchor will satisfy its obligations under any such agreement.
Twenty-two (22) of the retail mortgaged properties, representing approximately 17.3% of the outstanding pool balance as of the cut-off date (by allocated loan amount), are retail properties that are considered by the applicable sponsor to have an “anchor tenant” or “shadow anchor tenant”or are leased to a single tenant. For identification of retail properties with a single tenant, see Annex A-1 to this free writing prospectus.
In certain instances with respect to the mortgaged properties, anchor tenant leases may expire during the term of the related mortgage loan. We cannot assure you that if anchor tenants or shadow anchor tenants at a particular mortgaged property were to close or remain vacant, such anchor tenants or shadow anchor tenants, as applicable, would be replaced in a timely manner or, if part of the collateral for the related mortgage loan, without incurring material additional costs to the related borrower and resulting in adverse economic effects. In addition, an anchor tenant or shadow anchor tenant lease that expires near or shortly following the maturity date of a mortgage loan may make it more difficult for the borrower to obtain refinancing of the related mortgage loan and may thereby jeopardize repayment of the mortgage loan.
In addition, various anchor parcels and/or anchor improvements at a mortgaged property may be owned by the anchor tenant (or an affiliate of the anchor tenant) or by a third party and therefore not be part of the related mortgaged property and the related borrower may not receive rental income from such anchor tenant.
Retail properties that have shadow anchor stores often have reciprocal easement and operating agreements (each, an “REA”) between the retail property owner and such shadow anchors that contain certain operating and maintenance covenants.
Anchor tenants that lease their stores often have operating covenants as well. Such operating covenants may be provided for in the anchor tenant lease or in the REA, if any, affecting the mortgaged property. Anchor tenants that have no operating covenants or whose covenants have expired previously or will expire during the terms of the related mortgage loan (as is the case with several retail tenants at mortgaged properties securing mortgage loans in the mortgage pool) are or will not be contractually obligated to operate their stores at the applicable mortgaged property. Retail mortgaged properties that secure mortgage loans in the pool have tenants that are permitted to cease operations at the related mortgaged property prior to lease termination (i.e., “go dark”), provided such tenant continues to pay rent.
Tenant leases and REAs at retail mortgaged properties may have co-tenancy clauses which permit the applicable tenants to abate the rent payable, cease operating and/or terminate their leases if certain other tenants (in particular, anchor tenants) cease operations at the related mortgaged property and/or if a specified percentage of the stores at the related mortgaged property are not occupied and operating and also have certain other termination rights related to sales targets. Certain of the operating covenants with respect to the retail mortgaged properties may have expired or will expire prior to the maturity date of the related mortgage loan. We cannot assure you that operating covenants will be obtained in the future for these or any of the tenants.
Certain anchor tenant and tenant estoppels obtained in connection with the origination of the mortgage loans identify disputes between the related borrower and the applicable tenant, or alleged defaults or potential defaults by the applicable property owner under the lease or REA. Such disputes, defaults or potential defaults, could lead to a set off of rent, to a termination or attempted termination of the applicable lease or REA by the tenant or to litigation against the related borrower. There can be no assurance that the identified tenant disputes will not have a material adverse effect on the ability of the
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related borrowers to repay their portion of the mortgage loan. In addition, there can be no assurance that the tenant estoppels obtained identify all potential disputes that may arise with tenants.
Current Levels of Property Income May Not Be Maintained Due to Varying Tenant Occupancy. Rental payments from tenants of retail properties typically comprise the largest portion of the net operating income of those mortgaged properties. Certain tenants at the retail mortgaged properties may be paying rent but are not yet in occupancy or have signed leases but have not yet started paying rent and/or are not yet in occupancy.
Certain tenants currently may be in a rent abatement period. There can be no assurance that such tenants will be in a position to pay full rent when the abatement period expires. Risks applicable to anchor tenants (such as bankruptcy, failure to renew leases, early terminations of leases and vacancies) also apply to other tenants. We cannot assure you that the rate of occupancy at the stores will remain at the current levels or that the net operating income contributed by the mortgaged properties will remain at its current or past levels.
Competition May Adversely Affect the Performance of a Retail Property. Retail properties also face competition from sources outside a given real estate market. For example, all of the following compete with more traditional retail properties for consumer business:
· | factory outlet centers; |
· | discount shopping centers and clubs; |
· | video shopping networks; |
· | catalogue retailers; |
· | home shopping networks; |
· | direct mail; |
· | internet websites; and |
· | telemarketers. |
Continued growth of these alternative retail outlets (which often have lower operating costs) could adversely affect the rents collectible at the retail properties included in the mortgage pool, as well as the income from, and market value of, the mortgaged properties. Moreover, additional competing retail properties have been and may in the future be built in the areas where the retail properties are located. Such competition could adversely affect the performance of the related mortgage loan and adversely affect distributions to certificateholders.
In addition, although renovations and expansion at a mortgaged property will generally enhance the value of the mortgaged property over time, in the short term, construction and renovation work at a mortgaged property may negatively impact net operating income as customers may be deterred from shopping at or near a construction site.
Office Properties Have Special Risks
There are seven office properties, securing approximately 18.0% of the outstanding pool balance as of the cut-off date (by allocated loan amount). For identification of office properties with a single tenant and a list of leased fee properties operated as office businesses, see Annex A-1 to this free writing prospectus.
Various factors may adversely affect the value of office properties, including:
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· | the quality of an office building’s tenants; |
· | the quality of property management; |
· | provisions in tenant leases that may include early termination provisions; |
· | an economic decline in the business operated by the tenants; |
· | the diversity of an office building’s tenants (or reliance on a single or dominant tenant); |
· | the physical attributes of the building in relation to competing buildings (e.g., age, condition, design, location, access to transportation and ability to offer certain amenities, including, without limitation, current business wiring requirements); |
· | the desirability of the area as a business location; |
· | the strength and nature of the local economy (including labor costs and quality, tax environment and quality of life for employees); and |
· | an adverse change in population, patterns of telecommuting or sharing of office space, and employment growth (which creates demand for office space). |
Moreover, the cost of refitting office space for a new tenant is often higher than the cost of refitting other types of property.
Certain Risks of Lab Space. Certain mortgaged properties are occupied by tenants that utilize the mortgaged property as lab space. Risks related to office space for lab and/or research and development include:
· | unique layout of office space used as lab and/or research and development space may make re-tenanting to new office tenants more expensive; and |
· | funds for research and development rely on government and/or private sources of funding, which sources may become unavailable. |
These factors, among others, may adversely affect the cash flow generating monthly payments for the mortgage loan.
See Annex A-1 to this free writing prospectus for the 5 largest tenants (by net rentable area leased) at each of the office mortgaged properties.
If one or more major tenants at a particular office property were to close or remain vacant, we cannot assure you that such tenants would be replaced in a timely manner or without incurring material additional costs to the related borrower and resulting in adverse economic effects.
Hospitality Properties Have Special Risks
There are 14 hospitality properties, securing approximately 13.8% of the outstanding pool balance as of the cut-off date (by allocated loan amount). Three (3) hospitality properties, securing approximately 6.1% of the outstanding pool balance as of the cut-off date (by allocated loan amount), are considered full service. Five (5) hospitality properties, securing approximately 4.0% of the outstanding pool balance as of the cut-off date (by allocated loan amount), are considered limited service. One (1) hospitality property, securing approximately 2.0% of the outstanding pool balance as of the cut-off date (by allocated loan amount), is considered select service. Five (5) hospitality properties, securing approximately 1.7% of the outstanding pool balance as of the cut-off date (by allocated loan amount), are considered extended stay.
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Property Type | Number of Mortgaged Properties | Aggregate Cut-off Date Balance | % of Initial Outstanding Pool Balance | |||
Hospitality | 14 | $128,579,188 | 13.8% | |||
Full Service | 3 | $56,924,811 | 6.1% | |||
Limited Service | 5 | $37,678,584 | 4.0% | |||
Select Service | 1 | $18,475,793 | 2.0% | |||
Extended Stay | 5 | $15,500,000 | 1.7% |
Various factors may adversely affect the economic performance of a hospitality property, including:
· | adverse economic and social conditions, either local, regional, national or international (which may limit the amount that can be charged per room and reduce occupancy levels); |
· | poor property management; |
· | the construction of competing hotels or resorts; |
· | continuing expenditures for modernizing, refurbishing and maintaining existing facilities prior to the expiration of their anticipated useful lives; |
· | conversion to alternative uses which may not be readily made; |
· | a deterioration in the financial strength or managerial capabilities of the owner and operator of a hospitality property; |
· | changes in travel patterns caused by general adverse economic conditions or the general level of discretionary income of tourists, fear of terrorist attacks, adverse weather conditions and changes in access, energy prices, travel costs, strikes, relocation of highways, the construction of additional highways or other factors; |
· | ability of property managers and/or whether management contracts or franchise agreements are renewed or extended upon expiration; |
· | desirability of particular locations; |
· | leases with restaurant or club operators that may be a draw to a hospitality property; |
· | popularity and profitability of certain amenities, such as spa services or meeting space; |
· | location, quality and management company’s affiliation, each of which affects the economic performance of a hospitality property; and |
· | relative illiquidity of hospitality property investments which limits the ability of the borrowers and property managers to respond to changes in economic or other conditions. |
Because hotel rooms generally are rented for short periods of time, the financial performance of hospitality properties tends to be affected by adverse economic conditions and competition more quickly than other commercial properties.
Certain of the hospitality properties securing the mortgage loans are currently undergoing or are scheduled to undergo renovations or property improvement plans (“PIPs”). In some circumstances, these renovations or PIPs may necessitate taking a portion of the available guest rooms temporarily offline, temporarily decreasing the number of available rooms and the revenue generating capacity of the related hotel. In other cases, these renovations may involve renovations of common spaces or external features of the related hotel, which may cause disruptions or otherwise decrease the attractiveness of the related hotel to potential guests. These PIPs may be required under the related franchise or management agreement and a failure to timely complete them may result in a termination or expiration of a franchise or management agreement and may be an event of default under the related mortgage loan.
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For example, with respect to a mortgaged property that (i) secures a mortgage loan that is one of the top 20 mortgage loans or (ii) where such related costs are anticipated to be more than 10% of the related mortgage loan cut-off date balance:
· | With respect to the portfolio of mortgaged properties identified on Annex A-1 to this free writing prospectus as Ocala Portfolio - AHIP, representing approximately 2.0% of the outstanding pool balance as of the cut-off date, the borrowers are required, pursuant to the PIPs set forth in the franchise agreements, to complete a general upgrade of the Courtyard by Ocala and Fairfield Inn & Suites Ocala mortgaged properties by December 31, 2017. A reserve in the amount of $3,170,000 was established at origination of the mortgage loan to pay for such renovations. Any failure on the part of a borrower to timely complete any required renovation of the applicable mortgaged property may result in a termination of the applicable franchise agreement and an event of default under the loan agreement. |
· | With respect to the mortgaged property identified on Annex A-1 to this free writing prospectus as Hilton Greenville, which secures a mortgage loan representing approximately 1.5% of the outstanding pool balance as of the cut-off date, the borrower is required to complete a PIP as a condition to remaining in compliance with the current franchise agreement with a 2031 expiration date. The PIP requires upgrades to the guest rooms, commercial areas, exterior, mechanicals, and other related upgrades, which upgrades are expected to be completed by July 31, 2016. A reserve in the amount of $3,776,500 was established at origination of the mortgage loan to pay for such renovations in full. |
We cannot assure you that any PIP will be completed in the time frame contemplated, that any amounts reserved will be sufficient, what the impact on the franchise agreement may be in the event that the borrower fails to complete the PIP in accordance with its terms, or that, when and if the PIP is completed, such PIP will improve the operations at, or increase the value of, the subject property. See also “—Risks Related to Construction,Development,Redevelopment,Renovation and Repairs at Mortgaged Properties” below.
The Seasonality of Business May Create Shortfalls in Hospitality Revenue. The hospitality and lodging industry is generally seasonal in nature and different seasons affect different hospitality properties depending on type and location. In some cases, certain hotel properties close during certain months of the year. This seasonality can be expected to cause periodic fluctuations in a hospitality property’s room and restaurant revenues, occupancy levels, room rates and operating expenses. There can be no assurance that cash flow will be sufficient to offset any shortfalls that occur at the mortgaged property during slower periods. There can also be no assurance that the related mortgage loans provide for seasonality reserves, or if seasonality reserves are provided for, that such reserves will be funded or will be sufficient or available to fund such shortfalls.
The Inability To Maintain a Liquor License May Adversely Impact Hospitality Revenue. The liquor licenses for most of the applicable mortgaged properties are commonly held by affiliates of the mortgagors, unaffiliated managers or operating lessees. The laws and regulations relating to liquor licenses generally prohibit the transfer of such licenses. In the event of a foreclosure of a hospitality property that holds a liquor license, a purchaser in a foreclosure sale would likely have to apply for a new license, which might not be granted or might be granted only after a delay which could be significant. There can be no assurance that a new license could be obtained promptly or at all. The lack of a liquor license in a hospitality property with a restaurant or bar could have an adverse impact on the revenue from the related mortgaged property or on the hotel’s occupancy rate.
Mortgage loans secured by hospitality properties may be structured with a master lease (or operating lease) in order to minimize potential liabilities of the borrower. Under the master lease structure, an operating lessee (typically affiliated with the borrower) is also an obligor under the related mortgage loan and the operating lessee pays rent to the borrower.
The Performance of a Hospitality Property Depends in Part on the Performance of Its Franchisor or Management Company. Twelve (12) of the hospitality properties, securing approximately 9.2% of the
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outstanding pool balance as of the cut-off date (by allocated loan amount), are affiliated with a national franchisor through a franchise agreement. Certain of the hospitality properties may be subject to a management or marketing arrangement with a regional or national brand. A hospitality property subject to a franchise, management or marketing agreement relating to a regional or national brand is typically required by the hotel chain or management company to maintain certain standards and satisfy certain criteria or risk termination of its affiliation.
The performance of a hospitality property affiliated with a franchise or hotel management company or managed by a hotel management company depends in part on:
· | the continued existence, reputation, and financial strength of the franchisor or hotel management company; |
· | the public perception of the franchise or management company or hotel chain service mark; and |
· | the duration of the franchise licensing agreement or management agreement. |
Any provision in a franchise agreement or management agreement relating to a regional or national brand providing for termination because of the bankruptcy of a franchisor or manager, as applicable, generally will not be enforceable. In addition, certain franchise agreements or management agreements may only be terminable upon an event of default of the franchisor that causes a material adverse condition to the borrower. Replacement franchises or management agreements relating to a regional or national brand may require significantly higher fees.
Transferability of franchise license agreements is generally restricted. In the event of a foreclosure, the lender or its agent would not have the right to use the franchise license without the franchisor’s consent.
The following table shows each mortgaged property associated with a national or regional hotel brand through a license, franchise agreement, operating agreement or management agreement. If the relationship with the hotel brand is terminated, securing a new arrangement with the existing or a different hotel brand may require significant capital investment for renovations and upgrades necessary to satisfy such brand’s requirements.
Mortgaged Property Name | Mortgaged Property Cut- off Date Balance | Percentage (%) of the Initial Pool Balance by Allocated Loan Amount | Expiration/Termination of Related License/ Franchise Agreement | Maturity Date | ||||
Hilton Garden Inn Charlotte Airport | $18,475,793 | 2.0% | 10/31/2029 | 9/6/2025 | ||||
Hilton Greenville | $14,280,263 | 1.5% | 7/31/2031(1) | 9/1/2025 | ||||
HGI Kennewick | $12,678,584 | 1.4% | 11/10/2025 | 9/6/2025 | ||||
Ocala Portfolio – AHIP – Courtyard Ocala | $7,967,742 | 0.9% | 11/17/2020 | 8/6/2025 | ||||
Ocala Portfolio – AHIP – Residence Inn Ocala | $6,741,935 | 0.7% | 1/29/2027 | 8/6/2025 | ||||
Days Inn | $6,000,000 | 0.6% | 8/10/2030 | 10/6/2025 | ||||
Ocala Portfolio – AHIP – Fairfield Inn & Suites Ocala | $4,290,323 | 0.5% | 12/21/2023 | 8/6/2025 | ||||
WHG Extended Stay Portfolio – Sun Suites Louisville | $4,075,000 | 0.4% | 9/15/2020(2) | 10/6/2020 | ||||
WHG Extended Stay Portfolio – HomeTowne Suites Columbia | $3,400,000 | 0.4% | 9/15/2020(2) | 10/6/2020 | ||||
WHG Extended Stay Portfolio – Sun Suites Alexandria | $3,000,000 | 0.3% | 9/15/2020(2) | 10/6/2020 | ||||
WHG Extended Stay Portfolio – HomeTowne Suites Montgomery | $2,550,000 | 0.3% | 9/15/2020(2) | 10/6/2020 | ||||
WHG Extended Stay Portfolio – Sun Suites Gainesville | $2,475,000 | 0.3% | 9/15/2020(2) | 10/6/2020 |
(1) | The Hilton Greenville franchise agreement is subject to completion of certain PIP items of which lender has fully escrowed for under the loan documents. |
(2) | The properties have 5-year franchise agreements, with additional 5-year renewal terms unless earlier terminated. |
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No assurance can be given that such agreements will be renewed. In addition, no assurance can be given that a franchise or management agreement will not be terminated for any other reason during the term of the related mortgage loan or that the issuing entity would be able to renew a franchise or management agreement or obtain a new franchise or management agreement following termination of the agreement, including with respect to any in place at the time of foreclosure.
Some hospitality properties however, do not have relationships with national brands, and therefore may not be required to maintain certain standards and satisfy certain criteria that are typically required by a franchisor or a hotel chain. For example, in the case of the mortgage loans secured by the mortgaged properties identified on Annex A-1 to this free writing prospectus as Hotel deLuxe and Hotel Preston, representing approximately 3.5% and 1.1%, respectively, of the outstanding pool balance as of the cut-off date, the related mortgaged property is not affiliated with a national brand. Accordingly, they may lack the benefits of a strong franchise or brand affiliation.
Industrial Properties Have Special Risks
There are 7 industrial properties, securing approximately 3.8% of the outstanding pool balance as of the cut-off date (by allocated loan amount). Significant factors determining the value of industrial properties are:
· | the quality of tenants; |
· | reduced demand for industrial space because of a decline in a particular industry segment; |
· | the property becoming functionally obsolete; |
· | building design and adaptability; |
· | unavailability of labor sources; |
· | changes in access, energy prices, strikes, relocation of highways, the construction of additional highways or other factors; |
· | changes in proximity of supply sources; |
· | the expenses of converting a previously adapted space to general use; and |
· | the location of the property. |
Concerns about the quality of tenants, particularly major tenants, are similar in both office properties and industrial properties, although industrial properties often are dependent on a single or a few tenants.
Industrial properties may be adversely affected by reduced demand for industrial space occasioned by a decline in a particular industry segment (for example, a decline in defense spending), and a particular industrial property that suited the needs of its original tenant may be difficult to re-let to another tenant or may become functionally obsolete relative to newer properties. Furthermore, lease terms with respect to industrial properties are generally for shorter periods of time and may result in a substantial percentage of leases expiring in the same year at any particular industrial property. In addition, industrial properties are often more prone to environmental concerns due to the nature of items being stored or type of work conducted at the property.
Aspects of building site design and adaptability affect the value of an industrial property. Site characteristics which are generally desirable to an industrial property include high, clear ceiling heights, wide column spacing, a large number of bays (loading docks) and large bay depths, divisibility, minimum large truck turning radii and overall functionality and accessibility. Location is also important because an industrial property requires the availability of labor sources, proximity to supply sources and customers and accessibility to rail lines, major roadways and other distribution channels. Because of the
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construction utilized in connection with certain industrial facilities, it might be difficult or costly to convert such a facility to an alternative use.
Further, certain of the industrial properties may have tenants that are subject to risks unique to their business, such as cold storage facilities. Cold storage facilities may have unique risks such as short lease terms due to seasonal use, making income potentially more volatile than for properties with longer term leases, and customized refrigeration design, rendering such facilities less readily convertible to alternative uses. Because of seasonal use, leases at such facilities are customarily for shorter terms, making income potentially more volatile than for properties with longer term leases. In addition, such facilities require customized refrigeration design, rendering them less readily convertible to alternative uses.
Certain of the industrial properties may contain warehouse spaces. Properties with warehouse space may be adversely affected by reduced demand for such space occasioned by a decline in need for warehouse space by a particular industry segment that had been leasing or typically leases such spaces. Also, warehouse space that was built to suit the needs of its original tenant may be difficult to relet to another tenant or may become functionally obsolete relative to newer properties.
Further, certain of the industrial properties may be occupied by tenants that utilize a portion of the mortgaged property as medical offices, some of which may perform out-patient medical procedures. See “—Office Properties Have Special Risks” in this free writing prospectus for information regarding medical office tenants.
Manufactured Housing Community Properties Have Special Risks
There are 4 manufactured housing community properties, securing approximately 3.2% of the outstanding pool balance as of the cut-off date (by allocated loan amount). Mortgage loans secured by liens on manufactured housing community properties pose risks not associated with mortgage loans secured by liens on other types of income producing real estate.
The successful operation of a manufactured housing property may depend upon the number of other competing residential developments in the local market, such as:
· | other manufactured housing community properties; |
· | apartment buildings; and |
· | site built single family homes. |
Other factors may also include:
· | the physical attributes of the community, including its age and appearance; |
· | the location of the manufactured housing property; |
· | the ability of management to provide adequate maintenance and insurance; |
· | the type of services or amenities it provides; |
· | the property’s reputation; |
· | restrictions on the age of tenants that may reside at the property; and |
· | state and local regulations, including rent control and rent stabilization. |
The recreational vehicle resort and short-term cabin and/or camping site rental industries are generally seasonal in nature and different seasons affect different recreational vehicle resort properties
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depending on type and location. Rentals at these types of properties are primarily, if not entirely, short-term in nature. As a result, these types of properties are subject to risks that commonly affect other short-term property types, including, among other things, a higher degree of volatility in terms of the supply and demand of available rental sites. There can be no assurance that cash flow will be sufficient to offset any shortfalls that occur at the mortgaged property during slower periods. There can also be no assurance that, if seasonality reserves are provided for, that such reserves will be funded or will be sufficient or available to fund such shortfalls.
Some of the manufactured housing community mortgaged properties securing mortgage loans in the issuing entity have a material number of leased homes that are currently owned by the related borrower or an affiliate thereof and rented by the respective tenants like apartments. In circumstances where the leased homes are owned by an affiliate of the borrower, the related pads may, in some cases, be subject to a master lease with that affiliate. In such cases, the tenants will tend to be more transient and less tied to the property than if they owned their own home. Such leased homes do not, in all (or, possibly, in any) such cases, constitute collateral for the related mortgage loan. Some of the leased homes that are not collateral for the related mortgage loan may be rented on a lease-to-own basis.
Some of the manufactured housing community mortgaged properties securing the mortgage loans are not connected to public water and sewer systems. In such cases, the borrower could incur a substantial expense if it were required to connect the property to such systems in the future. In addition, the use of well water and/or septic systems or private sewage treatment facilities enhances the likelihood that the property could be adversely affected by a recognized environmental condition that impacts soil and groundwater.
Some of the manufactured housing community mortgaged properties require that residents be 55 years of age or older, thereby limiting the potential tenant pool. The manufactured housing community properties are “special purpose” properties that could not be readily converted to general residential, retail or office use. Thus, if the operation of any of the manufactured housing community properties becomes unprofitable due to competition, age of the improvements or other factors such that the borrower becomes unable to meet its obligations on the related mortgage loan, the liquidation value of that manufactured housing property may be substantially less, relative to the amount owing on the related mortgage loan, than would be the case if the manufactured housing community property were readily adaptable to other uses.
Self Storage Properties Have Special Risks
There are 8 self storage properties, securing approximately 2.8% of the outstanding pool balance as of the cut-off date (by allocated loan amount). Various factors may adversely affect the value and successful operation of a self storage property.
Self storage facilities are considered vulnerable to competition, because both acquisition and development costs and break-even occupancy are relatively low. The conversion of self storage facilities to alternative uses would generally require substantial capital expenditures. Thus, if the operation of any of the self storage properties becomes unprofitable due to:
· | decreased demand; |
· | competition; |
· | lack of proximity to apartment complexes or commercial users; |
· | apartment tenants moving to single-family homes; |
· | decline in services rendered, including security; |
· | dependence on business activity ancillary to renting units; |
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· | security concerns; |
· | age of improvements; or |
· | other factors; |
so that the borrower becomes unable to meet its obligations on the related mortgage loan, the liquidation value of that self storage property may be substantially less, relative to the amount owing on the mortgage loan, than if the self storage property were readily adaptable to other uses.
Tenant privacy, anonymity and efficient and/or unsupervised access may heighten environmental risks (although lease agreements generally prohibit users from storing hazardous substance in the units). No environmental assessment of a mortgaged property included an inspection of the contents of the self storage units included in the self storage properties and there is no assurance that all of the units included in the self storage properties are free from hazardous substances or other pollutants or contaminants or will remain so in the future.
Parking Properties Have Special Risks
There are 2 parking lot properties, securing approximately 1.2% of the outstanding pool balance as of the cut-off date (by allocated loan amount). The primary source of income for parking lots and garages is the rental fees charged for parking spaces.
Factors affecting the success of a parking lot or garage include:
· | the number of rentable parking spaces and rates charged; |
· | the location of the lot or garage and, in particular, its proximity to places where large numbers of people work, shop or live; |
· | the amount of alternative parking spaces in the area; |
· | the availability of mass transit; and |
· | the perceptions of the safety, convenience and services of the lot or garage. |
Aspects of building site design and adaptability affect the value of a parking garage facility. Site characteristics that are valuable to a parking garage facility include location, clear ceiling heights, column spacing, zoning restrictions, number of spaces and overall functionality and accessibility.
In addition, because of the unique construction requirements of many parking garages and because a parking lot is often vacant paved land without any structure, a vacant parking garage facility or parking lot may not be easily converted to other uses. See “—Some Mortgaged Properties May Not Be Readily Convertible To Alternative Uses” in this free writing prospectus.
Mixed Use Properties Have Special Risks
There is 1 mixed use property, securing approximately 1.1% of the outstanding pool balance as of the cut-off date (by allocated loan amount). This mixed use property contains two or more of the following property types: multifamily or retail. To the extent a mixed use property has retail, office or flex components, such mortgaged property is subject to the risks relating to the property types described in “—Retail Properties Have Special Risks”, “—Office Properties Have Special Risks” and “—Industrial Properties Have Special Risks.” See Annex A-1 to this free writing prospectus for the 5 largest office, retail and/or industrial tenants (by net rentable area leased) at each of the mixed use properties. A mixed use property may be subject to additional risks, including the property manager’s inexperience in managing the different property types that comprise such mixed use property.
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Risks of Co-Tenancy and Other Early Termination Provisions in Retail and Office Leases
Retail, office, mixed use and industrial properties may have tenants with leases that give tenants the right to terminate the related lease or abate or reduce rent for various reasons or upon various conditions, including (i) if the borrower for the applicable mortgaged property allows uses at the mortgaged property in violation of use restrictions in current tenant leases, (ii) if the borrower or any of its affiliates owns other properties within a certain radius of the mortgaged property and allows uses at those properties in violation of use restrictions, (iii) if the related borrower fails to provide a designated number of parking spaces, (iv) if there is construction at or otherwise affecting access to or parking on the related mortgaged property or an adjacent property (whether or not such adjacent property is owned or controlled by the borrower or any of its affiliates) that may interfere with visibility or a tenant’s use of or access to or parking upon the mortgaged property, (v) upon casualty or condemnation with respect to all or a portion of the mortgaged property above a certain threshold or that interferes with a tenant’s use of or access to such mortgaged property or that otherwise renders such mortgaged property unsuitable for a tenant’s use or if the borrower fails to rebuild such mortgaged property within a certain time, (vi) if a tenant’s use is not permitted by zoning or applicable law, (vii) if a tenant is unable to exercise expansion rights, (viii) if utilities or other essential services are not provided to the subject space for a specified period, or (ix) if the landlord defaults on its obligations under the lease. In each identified instance the borrower may have interests adverse to the mortgagee, and we cannot assure you that the borrower will not violate those restrictions if it feels that such violation may otherwise benefit it or its affiliates to do so, even where such action is to the detriment of the mortgaged property.
In addition, it is common for non-anchor tenants at anchored or shadow-anchored retail centers to have the right to terminate their leases or abate or reduce rent if the anchor or shadow anchor tenant goes dark. In addition, an anchor tenant may have a similar co-tenancy provision in its lease based on the continued operations of another anchor tenant. Even if tenant leases do not include provisions granting such termination or rent abatement rights, because the anchor or shadow anchor tenant plays a key role in generating customer traffic and making a center desirable for other tenants, we cannot assure you that any loss of an anchor tenant will not have a material adverse impact on the non-anchor tenants’ ability to operate, which may in turn adversely impact the borrower’s ability to meet its obligations under the related mortgage loan documents. If an anchor tenant goes dark, generally the borrower’s only remedy is to terminate that lease after the anchor tenant has been dark for a specified amount of time.
Certain of the tenant leases for the mortgaged properties permit the related tenant to terminate its lease and/or abate or reduce rent if the tenant fails to meet certain sales targets or other business objectives for a specified period of time. We cannot assure you that all or any of these tenants will meet the sales targets or business objectives required to avoid any termination and/or abatement rights. For example, with respect to the top 5 tenants for the top 20 mortgage loans:
· | With respect to the mortgaged property identified on Annex A-1 to this free writing prospectus as Chase Park, which secures a mortgage loan representing approximately 2.9% of the outstanding pool balance as of the cut-off date, the third largest tenant, Jacobs Engineering, has the right to terminate its lease, subject to the payment of a termination fee, as of the last day of any calendar month after May 31, 2017 upon no later than 180 days prior written notice, provided that the tenant has received notice from the Texas Department of Transportation (“DOT”) within 90 days of such termination notice of the loss or cancellation of no less than 51% of the tenant’s funding for contracts with the DOT fee. In addition, the fourth largest tenant, Northrop Grumman, may terminate its lease at the end of November 2015, and on each anniversary thereafter, with 180 days prior notice upon the loss of no less than 100% of its funding for contracts with (i) Health and Human Services and (ii) The Department of Family and Protective Services, subject to the payment of a termination fee. |
In addition, certain of the tenant leases for the mortgaged properties may permit the affected tenants to terminate their leases and/or abate or reduce rent if a certain number of other tenants, and/or other tenants occupying a specified percentage of the total space, cease to operate at the applicable mortgaged property. Further, certain of the tenant leases for the other mortgaged properties may permit
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affected tenants to terminate their leases if a tenant at an adjacent or nearby property terminates its lease or goes dark.
In addition, certain of the tenant leases for the mortgaged properties may permit the affected tenants to terminate their leases or abate rent prior to the stated lease expiration date for no reason after a specified period of time following commencement of the lease and/or solely upon notice to the landlord.
See “—Risks Related to Tenants—Certain Additional Risks Related to Tenants” in this free writing prospectus.
Any exercise of the foregoing termination rights could result in vacant space at the related mortgaged property, renegotiation of the lease with the related tenant or re-letting of the space. We cannot assure you that any vacated space could or would be re-let. Furthermore, we cannot assure you that the foregoing termination and/or abatement rights will not arise in the future or materially adversely affect the related borrower’s ability to meet its obligations under the related mortgage loan documents. See
“—Risks Related to Tenants—Certain Additional Risks Related to Tenants” in this free writing prospectus.
Condominium Properties Have Special Risks
In the case of the mortgaged properties identified on Annex A-1 to this free writing prospectus as 11 Madison Avenue and 4001 North Lincoln, representing approximately 7.8% of the outstanding pool balance as of the cut-off date (by allocated loan amount), the related mortgage loans are secured, in whole or in part, by the related borrower’s fee simple ownership interest in one or more condominium units.
The management and operation of a condominium is generally controlled by a condominium board representing the owners of the individual condominium units, subject to the terms of the related condominium rules or by-laws. Generally, the consent of a majority of the board members is required for any actions of the condominium board and a unit owner’s ability to control decisions of the board are generally related to the number of units owned by such owner as a percentage of the total number of units in the condominium. In certain cases, the related borrower may not have a majority of votes on the condominium board. The borrower may control the appointment and voting of the condominium board or the condominium owners may not be permitted to take actions or cause the condominium association to take actions that would affect the borrower’s unit without the borrower’s consent.
Even if a borrower or its designated board members, either through control of the appointment and voting of sufficient members of the related condominium board or by virtue of other provisions in the related condominium documents, has consent rights over actions by the related condominium associations or owners, we cannot assure you that the related condominium board will not take actions that would materially adversely affect the related borrower’s unit.
In the case of the mortgaged property identified on Annex A-1 to this free writing prospectus as 11 Madison Avenue, which secures a mortgage loan representing approximately 7.5% of the outstanding pool balance as of the cut-off date, the mortgaged property is comprised of 36 condominium units. The related borrower holds a fee interest in 27 units and a leasehold (with reversion) interest in 9 units, which areowned by the New York Industrial Development Agency. The borrower controls the entire condominium board.
The condominium board is generally responsible for administration of the affairs of the condominium, including providing for maintenance and repair of common areas, adopting rules and regulations regarding common areas, and obtaining insurance and repairing and restoring the common areas of the property after a casualty. Notwithstanding the insurance and casualty provisions of the related mortgage loan documents, the condominium board may have the right to control the use of casualty proceeds. In addition, the condominium board generally has the right to assess individual unit owners for their share of expenses related to the operation and maintenance of the common elements. In the event that an owner of another unit fails to pay its allocated assessments, the related borrower may be required to pay such assessments in order to properly maintain and operate the common elements of the property. Although
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the condominium board generally may obtain a lien against any unit owner for common expenses that are not paid, such lien generally is extinguished if a lender takes possession pursuant to a foreclosure. Each unit owner is responsible for maintenance of its respective unit and retains essential operational control over its unit.
Certain condominium declarations and/or local laws provide for the withdrawal of a property from a condominium structure under certain circumstances. For example, the New York Condominium Act provides for a withdrawal of the property from a condominium structure by vote of 80% of unit owners. If the condominium is terminated, the building will be subject to an action for partition by any unit owner or lienor as if owned in common. This could cause an early and unanticipated prepayment of the mortgage loan. There can be no assurance the proceeds from partition will be sufficient to satisfy borrower’s obligations under the mortgage loan.
Due to the nature of condominiums and a borrower’s ownership interest therein, a default on a mortgage loan secured by the borrower’s interest in one or more condominium units may not allow the related lender the same flexibility in realizing upon the underlying real property as is generally available with respect to non-condominium properties. The rights of any other unit owners, the governing documents of the owners’ association and state and local laws applicable to condominiums must be considered and respected. Consequently, servicing and realizing upon such collateral could subject the issuing entity to greater expense and risk than servicing and realizing upon collateral for other mortgage loans that are not condominiums.
Risks Related to Construction, Development, Redevelopment, Renovation and Repairs at Mortgaged Properties
Certain of the mortgaged properties are currently undergoing, or are expected to undergo in the future, material construction, development, redevelopment, renovation or repairs. For example, with respect to a mortgaged property that currently or is expected to undergo material construction, development, redevelopment, renovation or repairs and is a mortgaged property (i) that secures a mortgage loan that is one of the top 20 mortgage loans or (ii) where such related costs are anticipated to be more than 10% of the related mortgage loan cut-off date balance:
· | In the case of the mortgaged property identified on Annex A-1 to this free writing prospectus as 11 Madison Avenue, which secures a mortgage loan representing approximately 7.5% of the outstanding pool balance as of the cut-off date, the borrower is responsible for approximately $140,212,434 of leasing commissions, tenant improvements and base building work under major tenant leases, including its leases with Credit Suisse, Sony, Yelp and WME. At origination of the related mortgage loan, (1) the borrower deposited $81,152,102 in a lease costs account for the payment of such expenses, and (2) the guarantor under such mortgage loan, SL Green Realty Corp., provided a lease costs guaranty in the amount of the remaining $59,060,332 of such expenses. If the rating of the guarantor falls below “BB+” by Standard & Poor’s Rating Services (which is the current rating of such guarantor by Standard & Poor’s Rating Services), the guarantor is required either to deposit the remaining unpaid amount of such expenses in the lease costs account, or institute a sweep of excess cash flow to the lease costs account until such remaining unpaid amount is deposited therein. See “—Risks Related to Loan Sponsor Guarantees” below. The tenants at such mortgaged property are entitled to various offsets, penalties and/or additional free rent periods if such work is not completed in accordance with the related leases. With respect to Credit Suisse, pursuant to a new lease that takes effect in 2017, if the borrower does not perform certain building work as and when required under such 2017 lease, Credit Suisse, subject to certain exceptions, (1) has the right to perform and be reimbursed for such work, or to offset the amount against base rent and (2) to receive a per diem rent credit in the applicable amount specified in the lease. In addition, in the event Credit Suisse and the borrower fail to enter into an amendment prior to June 1, 2017 setting forth the scope and completion of work to be performed by the borrower toward the preparation of the leased premises for Credit Suisse’s occupancy, Credit Suisse’s work allowance is required to be increased by $33,806,313. With respect to Sony, see “—Certain Risks Related to Tenants Not |
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Yet in Occupancy” for a description of certain remedies available to Sony if work related to its space is not timely completed. |
· | In the case of the portfolio of mortgaged properties identified on Annex A-1 to this free writing prospectus as Atlanta Multifamily Portfolio, which secures a mortgage loan representing approximately 4.8% of the outstanding pool balance as of the cut-off date, the lender reserved $3,690,000 allocated between the two properties in the amount of $2,080,732 for the Rosemont Cityview Apartments property and $1,609,268 for the Dawson Forest Apartments property for planned capital improvements set forth in the loan agreement, including exterior repairs and upgrades, landscaping upgrades, parking lot repairs and striping, clubhouse remodel, model unit renovations, pool/outdoor kitchen upgrades, new dog park, new signage, upgraded fitness and playground equipment, as well as unit upgrades. |
· | In the case of the mortgaged property identified on Annex A-1 to this free writing prospectus as Hilton Garden Inn Charlotte Airport, which secures a mortgage loan representing approximately 2.0% of the outstanding pool balance as of the cut-off date, the mortgaged property is expected to undergo renovations commencing in the fourth quarter of 2015, including the addition of approximately 40 guest rooms (which may be housed in a new building separate from the current improvements at the Mortgaged Property), the expansion of meeting space by approximately 2,000 square feet and the relocation and redesign of the swimming pool (the “Potential Expansion”). The Potential Expansion is at the borrower’s option, and is not required by the related loan documents or the existing franchise agreement. At origination, the lender required that any Potential Expansion be subject to satisfaction of various conditions, including, lender’s receipt of (i) the plans and specifications of the construction (which are only for informational purposes so long as the construction consists solely of a new building at the Mortgaged Property), (ii) evidence that the Potential Expansion will not be funded with additional debt, (iii) a construction budget, (iv) evidence of adequate builder’s all-risk insurance naming the borrower and the lender as additional insureds under all liability insurance policies, (v) evidence that any necessary approval by the appropriate governmental authorities and/or the franchisor has been obtained, and (vi) a completion guaranty in form and substance reasonably satisfactory to the lender and either (a) payment and performance bonds issued by a surety reasonably acceptable to the lender or (b) a letter of credit in an amount equal to the cost of construction as additional security with respect to such construction. In addition, the borrower’s failure to diligently prosecute to completion the construction once the work has commenced in a manner reasonably acceptable to the lender, which failure continues for a period of nine (9) months, constitutes an event of default under the related loan documents. The borrower also granted to the lender a power of attorney, exercisable by the lender upon the borrower’s failure to diligently proceed with the completion of construction to the lender’s reasonable satisfaction, to either (x) raze any unfinished portion of the improvements or (y) complete the remaining work to an architectural whole in accordance with the plans and to at least substantially the same condition as the other improvements situated on the Mortgaged Property. |
· | With respect to the mortgaged property identified on Annex A-1 to this free writing prospectus as Reserve at Conway, which secures a mortgage loan representing approximately 1.6% of the outstanding pool balance as of the cut-off date, the borrower is required to complete certain renovations of the mortgaged property set forth in the loan agreement, including exterior repairs and upgrades, landscaping, clubhouse and fitness center renovations, pool deck resurfacing and unit interior renovations. The borrower reserved $1,391,748 at origination in connection with the required renovations. |
In addition, certain of the hospitality properties securing the mortgage loans are currently undergoing or are scheduled to undergo renovations or PIPs. See “—Hospitality Properties Have Special Risks” above.
We cannot assure you that any current or planned construction, redevelopment, renovation or repairs will be completed, that such construction, redevelopment, renovation or repairs will be completed in the
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time frame contemplated, or that, when and if redevelopment or renovation is completed, such redevelopment or renovation will improve the operations at, or increase the value of, the subject property. Failure of any of the foregoing to occur could have a material negative impact on the related mortgage loan and/or the value of the related mortgaged property, which could affect the ability of the borrower to repay the related mortgage loan.
If the related borrower or tenant fails to pay the costs for work completed or material delivered in connection with such ongoing construction, redevelopment, renovation or repairs, the related mortgaged property may be subject to mechanic’s or materialmen’s liens that may be senior to the lien of the related mortgage loan. The existence of construction or renovation at a mortgaged property may make such mortgaged property less attractive to tenants or their customers or other users and, accordingly, could have a negative impact on net operating income.
Furthermore, in the event of a foreclosure on any mortgaged property following a default on a related mortgage loan, the special servicer will generally retain an independent contractor to operate the mortgaged property. Among other things, the independent contractor generally will not be able to perform construction work, other than repair, maintenance or certain types of tenant build-outs, unless the construction was more than 10% completed when default on the mortgage loan becomes imminent. In addition, financing will generally be required to complete any such construction work, the availability of which may be particularly limited due to the issuing entity’s inability to incur debt. The inability to complete such construction work may result in lower cash flows and less liquidation proceeds to the issuing entity than if such construction were able to be completed.
Competition May Adversely Affect the Performance of the Mortgaged Property
Borrowers, affiliates of borrowers, and property managers of mortgaged properties may currently own, and in the future property managers of mortgaged properties and affiliates of borrowers may develop or acquire, additional properties and lease space in other properties in the same market areas where the mortgaged properties are located. Property managers at the related mortgaged properties also may manage competing properties, including, without limitation, properties that may be situated near or even adjacent to the mortgaged properties. None of the property managers or any other party has any duty to favor the leasing of space in the mortgaged properties over the leasing of space in other properties, one or more of which may be adjacent to, or near, the mortgaged properties.
Options and Other Purchase Rights May Affect Value or Hinder Recovery with Respect to the Mortgaged Properties
With respect to certain mortgage loans, one or more tenants or another person (or the related mortgaged property may be subject to) may have a purchase option, a right of first refusal or right of first offer in the event a sale is contemplated, a right of first refusal to purchase a leasehold interest in the premises if the sale of the borrower’s leasehold interest is contemplated or an option to purchase all or a portion of the related mortgaged property and/or various similar rights.
For example:
· | In the case of the mortgage loan secured by the mortgaged property identified on Annex A-1 to this free writing prospectus as The Drake, representing approximately 4.7% of the outstanding pool balance as of the cut-off date, The Trustees of the First Baptist Church of the City of Washington, D.C., as fee owner and landlord under a ground lease with the related borrower, has a right of first refusal to purchase the borrower’s leasehold interest if the borrower intends to accept a bona fide offer from a third party. The Drake fee owner will have 60 days following its receipt of written notice to purchase the borrower’s leasehold interest at the same price and on the same terms as the third party. |
· | In the case of the portfolio of mortgaged properties identified on Annex A-1 to this free writing prospectus as Midwest Shopping Center Portfolio, which secures a mortgage loan representing |
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approximately 4.1% of the outstanding pool balance as of the cut-off date, Home Depot, a tenant at the Home Depot Shopping Center property, has a right of first refusal under its lease in connection with a sale of the current Home Depot premises to a third party. Home Depot has waived this right in connection with a foreclosure or deed-in-lieu of foreclosure. |
· | In the case of the portfolio of mortgaged properties identified on Annex A-1 to this free writing prospectus as Ocala Portfolio – AHIP, which secure a mortgage loan representing approximately 2.0% of the outstanding pool balance as of the cut-off date, the franchisor, Marriott International, Inc., has a right of first refusal to purchase the related mortgaged property if the transferee in a proposed transfer is a competitor. The franchisor has subordinated its rights of first refusal to the exercise of the lender’s rights under the mortgage securing the loan. |
· | In the case of the mortgage loan secured by the mortgaged property identified on Annex A-1 to this free writing prospectus as Cannon West Shopping Center, representing approximately 1.4% of the outstanding pool balance as of the cut-off date, the largest tenant at the mortgaged property, Albertsons, whose lease covers approximately 44.5% of the net rentable area at the mortgaged property, has a right of first refusal to purchase all or any portion of the mortgaged property currently occupied by Starbucks and Bamboo Bistro in the event the borrower offers such portion of the mortgaged property for sale. However, in connection with the origination of the mortgage loan, Albertson’s has waived its option with respect to a foreclosure sale or a deed-in-lieu of foreclosure. |
· | With respect to the mortgaged property identified on Annex A-1 to this free writing prospectus as University Center, which secures a mortgage loan representing approximately 1.2% of the outstanding pool balance as of the cut-off date, McDonald’s has a right of first refusal to purchase their leased premises. McDonald’s agreed to subordinate this right pursuant to a SNDA that is recorded in the applicable county records. |
· | In the case of the mortgaged property identified on Annex A-1 to this free writing prospectus as Camelot Medical Office & Dunkin’ Donuts, which secures a mortgage loan representing approximately 0.4% of outstanding pool balance as of the cut-off date, the second largest tenant, Dunkin’ Donuts, has a right of first refusal to purchase its leased premises at the mortgaged property if the related borrower decides to sell such portion of the mortgaged property to a third party. The right of first refusal does not apply to the lender in the event of a foreclosure, deed in lieu of foreclosure or any other enforcement action by the lender or to a subsequent sale by the lender to a third party; however, such right of first refusal will apply to subsequent purchasers of the property. |
· | In the case of the mortgage loan secured by the mortgaged property identified on Annex A-1 to this free writing prospectus as Walgreens Aurora, IN, representing approximately 0.5% of the outstanding pool balance as of the cut-off date, the single tenant at the mortgaged property, Walgreens, has a right of first refusal to purchase the mortgaged property if the related borrower receives from a third party a bona fide offer to purchase the mortgaged property. |
These rights, which may not be subordinated to the related mortgage, may impede the lender’s ability to sell the related mortgaged property at foreclosure or after acquiring the mortgaged property pursuant to foreclosure, or adversely affect the value and/or marketability of the related mortgaged property. Additionally, the exercise of a purchase option may result in the related mortgage loan being prepaid during a period when voluntary prepayments are otherwise prohibited.
The Sellers of the Mortgage Loans Are Subject to Bankruptcy or Insolvency Laws That May Affect the Issuing Entity’s Ownership of the Mortgage Loans
In the event of the bankruptcy or insolvency of any mortgage loan seller, it is possible the issuing entity’s right to payment from or ownership of the mortgage loans transferred by such mortgage loan
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seller could be challenged, and if such challenge were successful, delays or reductions in payments on your certificates could occur.
Based upon an opinion of counsel that the conveyance of the applicable mortgage loans to the depositor would generally be respected in the event of the bankruptcy or insolvency of the related mortgage loan seller, which opinion will be subject to various assumptions and qualifications, the depositor believes that such a challenge will be unsuccessful, but there can be no assurance that a bankruptcy trustee, if applicable, or other interested party will not attempt to assert such a position. Even if actions seeking such results were not successful, it is possible that payments on the certificates would be delayed while a court resolves the claim.
KeyBank National Association is a national banking association, the deposits of which are insured by the FDIC. If KeyBank National Association were to become subject to receivership, the proceeding would be administered by the FDIC under the Federal Deposit Insurance Act (the “FDIA”); and if KeyBank National Association were to become subject to conservatorship, the agency appointed as conservator would likely be the FDIC as well. The FDIA gives the FDIC the power to disaffirm or repudiate contracts to which a bank is party at the time of receivership or conservatorship and the performance of which the FDIC determines to be burdensome, in which case the counterparty to the contract has a claim for payment by the receivership or conservatorship estate of “actual direct compensatory damages” as of the date of receivership or conservatorship.
The FDIC has adopted a rule, substantially revised and effective January 1, 2011, establishing a safe harbor (the “FDIC Safe Harbor”) from its repudiation powers for securitizations meeting the requirements of the rule (12 C.F.R. § 360.6). The transfer of the applicable mortgage loans by KeyBank National Association to the depositor will not qualify for the FDIC Safe Harbor.
Environmental Issues at the Mortgaged Properties May Adversely Affect Payments on Your Certificates
Certain Environmental Laws May Negatively Impact a Borrower’s Ability To Repay a Mortgage Loan. Various environmental laws may make a current or previous owner or operator of real property liable for the costs of removal, remediation or containment of hazardous or toxic substances on, under, in, or emanating from that property. Those laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of the hazardous or toxic substances. For example, certain laws impose liability for release of asbestos containing materials into the air or require the removal or containment of the asbestos containing materials; polychlorinated biphenyls in hydraulic or electrical equipment are regulated as hazardous or toxic substances; and the U.S. Environmental Protection Agency has identified health risks associated with elevated radon gas levels in buildings. In some states, contamination of a property may give rise to a lien on the property for payment of the costs of addressing the condition. This lien may have priority over the lien of a pre-existing mortgage. Additionally, third parties may seek recovery from owners or operators of real properties for personal injury or property damages associated with exposure to hazardous or toxic substances related to the properties.
The costs of any required remediation and the owner’s or operator’s liability for them as to any property are generally not limited under these laws, ordinances and regulations and could exceed the value of the mortgaged property and the aggregate assets of the owner or operator. In addition, as to the owners or operators of mortgaged properties that generate hazardous substances that are disposed of at “offsite” locations, the owners or operators may be held strictly, jointly and severally liable if there are releases or threatened releases of hazardous substances at the offsite locations where that person’s hazardous substances were disposed. Additionally, third parties may seek recovery from owners or operators of real properties for personal injury or property damages associated with exposure to hazardous or toxic substances related to the properties.
Federal law requires owners of certain residential housing constructed prior to 1978 to disclose to potential residents or purchasers any condition on the property that causes exposure to lead-based paint. Contracts for the purchase and sale of an interest in residential housing constructed prior to 1978 must
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contain a “Lead Warning Statement” that informs the purchaser of the potential hazards to pregnant women and young children associated with exposure to lead-based paint. The ingestion of lead-based paint chips and/or the inhalation of dust particles from lead-based paint by children can cause permanent injury, even at low levels of exposure. Property owners may be held liable for injuries to their tenants resulting from exposure to lead-based paint under common law and various state and local laws and regulations that impose affirmative obligations on property owners of residential housing containing lead-based paint.
The presence of hazardous or toxic substances also may adversely affect the owner’s ability to refinance the property or to sell the property to a third party. The presence of, or strong potential for contamination by, hazardous substances consequently can have a materially adverse effect on the value of the mortgaged property and a borrower’s ability to repay its mortgage loan.
In addition, under certain circumstances, a lender (such as the issuing entity) could be liable for the costs of responding to an environmental hazard. See “Certain Legal Aspects of Mortgage Loans—Environmental Considerations” in the prospectus.
A Borrower May Be Required To Take Remedial Steps with Respect to Environmental Hazards at a Property. In certain cases where the environmental consultant recommended that action be taken in respect of a materially adverse or potentially material adverse environmental condition at the related mortgaged property:
· | an environmental consultant investigated those conditions and recommended no further investigations or remedial action; |
· | a responsible third party was identified as being responsible for the remedial action; or |
· | the related originator of the subject mortgage loan generally required the related borrower to: |
(a) take investigative and/or remedial action;
(b) carry out an operation and maintenance plan or other specific remedial action measures post-closing and/or to establish an escrow reserve in an amount sufficient for effecting that plan and/or the remedial action;
(c) monitor the environmental condition and/or to carry out additional testing, in the manner and within the time frame specified by the environmental consultant;
(d) obtain or seek a letter from the applicable regulatory authority stating that no further action was required;
(e) obtain environmental insurance or provide an indemnity or guaranty from an individual or an entity (which may include the loan sponsor); or
(f) the circumstance or condition has been remediated in all material respects.
See “Risk Factors—Commercial and Multifamily Mortgage Loans Are Subject to Certain Risks Which Could Adversely Affect the Performance of Your Offered Certificates—Environmental Issues at the Mortgaged Properties May Adversely Affect Payments on Your Certificates” and “Certain Legal Aspects of Mortgage Loans—Environmental Considerations” in the prospectus.
Potential Issuing Entity Liability Related to a Materially Adverse Environmental Condition
The mortgage loan sellers have represented to the depositor that all of the mortgaged properties have had an environmental site assessment within the 6 months preceding the origination date of the related mortgage loan. The mortgage loan sellers have represented to the depositor that to the extent a Phase II environmental site assessment was recommended, such Phase II was conducted or other
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measures were taken, such as obtaining a lender’s environmental insurance policy. See “Description of the Mortgage Pool—Certain Underwriting Matters—Environmental Site Assessments” in this free writing prospectus.
There can be no assurance that any environmental site assessment, study or review or Phase I and/or Phase IIsampling revealed all possible environmental hazards or that all environmental matters that were revealed were or will be remediated or otherwise adequately addressed. The environmental assessments relating to certain of the mortgage loans revealed the existence of various current and historical recognized environmental conditions, including: (i) the existence of friable or non-friable asbestos-containing materials, mold, lead-based paint, lead in drinking water, radon gas, leaking aboveground and/or underground storage tanks; (ii) the current or historical use as a dry cleaning operation, gas station, auto/truck repair operation, manufacturing facility, photo development operation, asphalt plant, oil company, and/or storage facility for large quantities of waste chemicals, fertilizers, pesticides, fuels and/or other regulated materials; and (iii) the presence of polychlorinated biphenyl contamination, soil and/or ground water contamination (or potential contamination) from onsite and/or off-site sources, elevated soil vapor concentrations, historic existence of natural gas wells or other material environmental conditions. In some cases, particularly with respect to multifamily and manufactured housing community mortgaged properties, a property owner must disclose an environmental condition to potential tenants which may deter them from leasing the subject space. The environmental assessments relating to certain of the mortgage loans may have revealed that the related mortgaged property was located in or near a superfund site. For information regarding environmental site assessments at the mortgaged properties, see “Description of the Mortgage Pool—Certain Underwriting Matters—Environmental Site Assessments” below.
The mortgage loan sellers have informed us of the following potential environmental concerns:
· | With respect to the mortgaged property identified on Annex A-1 to this free writing prospectus as Sonora Cascade MHC, which secures a mortgage loan representing approximately 0.5% of the outstanding pool balance as of the cut-off date, in 2012 the mortgaged property was issued a Cleanup and Abatement Order (“CAO”) in relation to two septic ponds located on the mortgaged property. In order to mitigate the CAO, the sponsor has reported that he completed over $214,000 of improvements to repair all of the deficiencies in one septic pond and the majority of deficiencies in the other septic pond. A comfort letter was provided by the Central Valley Regional Water Board (“CVRWB”) stating that subject to a completion of four remaining improvements on the second septic pond and a satisfactory facility inspection, the CVRWB will not be recommending any further enforcement action. The lender has reserved $101,769 (an amount representing 125% of the estimated costs) in order to complete the remaining improvements. In addition, the guarantor on the mortgage loan is providing a full recourse guarantee for any failure to complete additional work on pond #3 that may be required by CVRWB following their facility inspection, which recourse is capped at $484,300, the estimated cost of connecting the mortgaged property to the public utility system. |
There can be no assurance that the reserve amounts will be sufficient to obtain “no further action” status, remediate any environmental conditions or to clean up the related mortgaged property.
There can be no assurance that the policy amounts will be sufficient to remediate any environmental hazards or to clean up the related mortgaged property.
For more information regarding environmental considerations, see “Risk Factors—Commercial and Multifamily Mortgage Loans Are Subject to Certain Risks Which Could Adversely Affect the Performance of Your Offered Certificates—Environmental Issues at the Mortgaged Properties May Adversely Affect Payments on Your Certificates”and“Certain Legal Aspects of Mortgage Loans—Environmental Considerations” in the prospectus.
The pooling and servicing agreement requires that the special servicer obtain an environmental site assessment of a mortgaged property prior to acquiring title to the mortgaged property on behalf of the issuing entity or assuming its operation. Such requirement may effectively preclude realization of the
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security for the related note until a satisfactory environmental site assessment is obtained (or until any required remedial action is thereafter taken), but will decrease the likelihood that the issuing entity will become liable under any environmental law. However, there can be no assurance that the requirements of the pooling and servicing agreement will effectively insulate the issuing entity from potential liability under environmental laws. See “The Pooling and Servicing Agreement—Realization Upon Mortgage Loans” in this free writing prospectus and “Certain Legal Aspects of Mortgage Loans—Environmental Considerations” in the prospectus.
Borrower May Be Unable To Repay the Remaining Principal Balance on the Maturity Date or Anticipated Repayment Date and Longer Amortization Schedules and Interest-Only Provisions May Increase Risk
All of the mortgage loans are non-amortizing or partially amortizing balloon loans or loans that provide incentives for the borrower to repay the loan by the maturity date or anticipated repayment date. Accordingly, all of the mortgage loans provide for substantial payments of principal to be due at their respective stated maturities or anticipated repayment dates, as applicable, and all of the mortgage loans that amortize have amortization schedules that are significantly longer than their respective terms. Some of the mortgage loans provide for interest-only debt service payments for all or part of their respective terms. A longer amortization schedule or an interest-only provision in a mortgage loan will result in a higher amount of principal outstanding under the mortgage loan at any particular time, including at the maturity date or anticipated repayment date of the mortgage loan, as applicable, than would have otherwise been the case had a shorter amortization schedule been used or had the mortgage loan had a shorter interest-only period or not included an interest-only provision at all. That higher principal amount outstanding could both (i) make it more difficult for the related borrower to make the required balloon or anticipated repayment date payment at maturity or on the related anticipated repayment date and (ii) lead to increased losses for the issuing entity either during the loan term or at maturity or such anticipated repayment date if the mortgage loan becomes a defaulted mortgage loan.
Mortgage loans with substantial remaining principal balances at their stated maturity date or anticipated repayment date involve greater risk than fully amortizing mortgage loans. This is because the borrower may be unable to repay the mortgage loan at that time. In addition, fully-amortizing mortgage loans which may pay interest on an “actual/360” basis but have fixed monthly payments may, in effect, have a small balloon payment due at maturity.
Balloon loans involve a greater risk to the lender than amortizing loans because a borrower’s ability to repay a balloon mortgage loan on its stated maturity date or anticipated repayment date typically will depend upon its ability either to refinance the mortgage loan or to sell the mortgaged property at a price sufficient to permit repayment. A borrower’s ability to effect a refinancing or sale will be affected by a number of factors as described in “Risk Factors—Commercial and Multifamily Mortgage Loans Are Subject to Certain Risks Which Could Adversely Affect the Performance of Your Offered Certificates—Mortgage Loans With Balloon Payments Have a Greater Risk of Default” in the prospectus.
In the case of the mortgage loans secured by the mortgaged properties or portfolio of mortgaged properties identified on Annex A-1 to this free writing prospectus as 11 Madison Avenue and NMS Los Angeles Multifamily Portfolio, collectively representing approximately 14.5% of the outstanding pool balance as of the cut-off date, the balloon risk is enhanced by the existence of one or more companion loans. In addition, with respect to the mortgage loan secured by the mortgaged property identified on Annex A-1 to this free writing prospectus as Atlanta Multifamily Portfolio, representing approximately 4.8% of the outstanding pool balance as of the cut-off date, following an initial interest only period of 18 months, the related mortgage loan accrues interest based on a non-standard amortization schedule provided in this free writing prospectus at Annex H. We cannot assure you that the related borrower will be able to make these interest payments when due.
Whether or not losses are ultimately sustained, any delay in the collection of a balloon payment on the maturity date or anticipated repayment date that would otherwise be distributable on your certificates will likely extend the weighted average life of your certificates.
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The recent credit crisis and recent economic downturn resulted in tightened lending standards and a substantial reduction in capital available to refinance commercial mortgage loans at maturity or anticipated repayment date. These factors increased the risk that refinancing may not be available for commercial mortgage loans. We cannot assure you that each borrower under a balloon loan will have the ability to repay the principal balance of such mortgage loan on the related maturity date. In addition, we cannot assure you that each borrower with an initial interest-only period will have the ability to make amortizing payments following the expiration of the initial interest-only period.
With respect to any loan with an anticipated repayment date, although the related borrower may have certain incentives to do so, the failure of such borrower to pay the loan in full on its anticipated repayment date will not be an event of default under the loan documents.
Neither we nor any of our affiliates nor any other seller or its affiliates will be obligated to refinance any mortgage loan underlying your certificates. We cannot assure you that any borrower will have the ability to repay the remaining principal balances on the related maturity date or anticipated repayment date.
See “Description of the Mortgage Pool—Certain Terms and Conditions of the Mortgage Loans” in this free writing prospectus. See “Risk Factors—Commercial and Multifamily Mortgage Loans Are Subject to Certain Risks Which Could Adversely Affect the Performance of Your Offered Certificates—Mortgage Loans With Balloon Payments Have a Greater Risk of Default” in the prospectus.
Risks Relating to Borrower Organization or Structure
With respect to the mortgage loan borrowers that are characterized as single purpose entities, in most cases, the mortgage loan documents generally contain covenants customarily employed to ensure that a borrower is a single purpose entity. However, in many cases the borrowers are not required to observe all covenants that are typically required in order for them to be viewed under standard rating agency criteria as “special purpose entities.” In most cases, the borrowers’ organizational documents or the terms of the mortgage loan documents typically limit their activities to the ownership of only the related mortgaged property or properties and limit the borrowers’ ability to incur additional indebtedness. These provisions are designed to mitigate the possibility that the borrowers’ financial condition would be adversely impacted by factors unrelated to the mortgaged property and the mortgage loan. However, we cannot assure you that the related borrowers will comply with these requirements. In certain cases, the borrower is not a single purpose entity subject to such covenants. Also, although a borrower may currently be characterized as a single purpose entity, such a borrower may have previously owned property other than (or otherwise engaged in activities unrelated to) the related mortgaged property and/or may not have observed all covenants and conditions which typically are required to view a borrower as a “single purpose entity.” There can be no assurance that circumstances that arose when the borrower did not observe the required covenants will not impact the borrower or the related mortgaged property. In addition, many of the borrowers and their owners do not have an independent director whose consent would be required to file a voluntary bankruptcy petition on behalf of such borrower. One of the purposes of an independent director of the borrower (or of a special purpose entity having an interest in the borrower) is to avoid a bankruptcy petition filing which is intended solely to benefit an affiliate and is not justified by the borrower’s own economic circumstances. Borrowers (and any special purpose entity having an interest in any such borrowers) that do not have an independent director may be more likely to file a voluntary bankruptcy petition and therefore less likely to repay the related mortgage loan. Many of the mortgage loans with original principal balances below $25 million do not require the related borrowers to currently have independent directors. The bankruptcy of a borrower, or the general partner or the managing member of a borrower, may impair the ability of the lender to enforce its rights and remedies under the related mortgage. See “Risk Factors—The Borrower’s Form of Entity May Not Prevent the Borrower’s Bankruptcy” in the prospectus.
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Delaware Statutory Trusts May Hinder Recovery
With respect to 5 of the mortgage loans, representing approximately 3.6% of the outstanding pool balance as of the cut-off date, the related borrower is structured as a Delaware statutory trust. In certain instances where borrowers under mortgage loans use a Delaware statutory trust structure in order to gain certain tax free exchange treatment for property of like kind under Code Section 1031, these borrowers generally are restricted in their ability to actively operate a property, including with respect to loan work-outs, leasing and re-leasing, making material improvements and other material actions affecting the related mortgaged property. In addition, in the case of a mortgaged property that is owned by a Delaware statutory trust, certain decisions may require the consent of the holders of the beneficial interests in the Delaware statutory trust and, in such event, there is a risk that obtaining such consent will be time consuming and cause delays in the event certain actions need to be taken by or on behalf of the borrower or with respect to the mortgaged property.
Tenancies in Common May Hinder Recovery
Seven (7) mortgage loans, representing approximately 16.9% of the outstanding pool balance as of the cut-off date, each have borrowers that own the related mortgaged property as tenants-in-common.
In a tenant-in-common ownership structure, each tenant-in-common owns an undivided share in the property. If such tenant-in-common borrower desires to sell its interest in the property (and is unable to find a buyer or otherwise needs to force a partition) the tenant-in-common borrower has the ability to request that a court order a sale of the property and distribute the proceeds to each tenant-in-common proportionally. As a result, if a tenant-in-common that has not waived its right of partition or similar right exercises a right of partition, the related mortgage loan may be subject to prepayment. The bankruptcy, dissolution or action for partition by one or more of the tenant-in-common borrowers could result in an early repayment of the related mortgage loan, significant delay in recovery against the tenant-in-common borrowers, particularly if the tenant-in-common borrowers file for bankruptcy separately or in series (because each time a tenant-in-common borrower files for bankruptcy, the bankruptcy court will be reinstated), a material impairment in the property management and a substantial decrease in the amount recoverable upon the related mortgage loan. If atenant-in-common borrower waived its right to partition, there can be no assurance that, if challenged, this waiver would be enforceable.
Risks Related to Additional Debt
The mortgage loans generally prohibit the borrower from incurring any additional debt secured by the mortgaged property without the consent of the lender. Generally, none of the depositor, the mortgage loan sellers, the underwriters, the master servicer, the special servicer, the certificate administrator, the operating advisor or the trustee have made any investigations, searches or inquiries to determine the existence or status of any subordinate secured financing with respect to any of the mortgaged properties at any time following origination of the related mortgage loan. However, the mortgage loan sellers have informed us that they are aware of the actual or potential additional debt secured by a mortgaged property with respect to the mortgage loans described under “Description of the Mortgage Pool—Certain Terms and Conditions of the Mortgage Loans—Other Financing” in this free writing prospectus.
The mortgage loans generally prohibit the borrower from incurring future unsecured debt that is not incurred in the ordinary course of business without the consent of the lender. However, in general, any borrower that does not meet the single-purpose entity criteria may not be prohibited from incurring additional debt. This additional debt may be secured by other property owned by such borrower. Certain of these borrowers may have already incurred additional debt. Also, in certain cases, co-mortgagors have executed the mortgage in order to encumber adjoining property or related property interests. Such co-mortgagors may not be special purpose entities, and in such cases could have obligations, debt and activities unrelated to the mortgaged property. In addition, the mortgage loan sellers have informed us that they are aware of actual or potential unsecured debt with respect to the mortgage loans described under “Description of the Mortgage Pool—Certain Terms and Conditions of the Mortgage Loans—Other Financing.”
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Although the mortgage loans generally restrict the transfer or pledging of controlling general partnership and managing member interests in a borrower subject to certain exceptions, the terms of some mortgage loans permit, subject to certain limitations, among others, the transfer or pledge of (i) passive equity interests, such as limited partnership and non-managing membership interests in the related borrower, and/or (ii) less than a certain specified portion of the general partnership and managing membership interests in a borrower. In addition, in general, the parent entity of any borrower that does not meet single purpose entity criteria may not be restricted in any way from incurring mezzanine debt secured by pledges of their equity interests in such borrower. In addition, the mortgage loan sellers have informed us that they are aware of existing or potential mezzanine debt with respect to the mortgage loans described under “Description of the Mortgage Pool—Certain Terms and Conditions of the Mortgage Loans—Other Financing.”
With respect to mezzanine financing, while a mezzanine lender has no security interest in the related mortgaged properties, a default under a mezzanine loan could cause a change in control of the related borrower. With respect to mortgage loans that permit mezzanine financing, the relative rights of the mortgagee and the related mezzanine lender will generally be set forth in an intercreditor agreement, which agreements typically provide that the rights of the mezzanine lender (including the right to payment) against the borrower and mortgaged property are subordinate to the rights of the mortgage lender and that the mezzanine lender may not take any enforcement action against the mortgage borrower and mortgaged property.
Although the terms of the mortgage loans generally prohibit additional debt of the borrowers and debt secured by direct or indirect ownership interests in the borrowers, except as described under “Description of the Mortgage Pool—Certain Terms and Conditions of the Mortgage Loans—Other Financing,” it has not been confirmed whether or not any of the borrowers has incurred additional secured or unsecured debt, or has permitted encumbrances on the direct or indirect ownership interests in such borrowers. There can be no assurance that the borrowers have complied with the restrictions on indebtedness contained in the related mortgage loan documents.
When a borrower (or its constituent members) also has one or more other outstanding loans (even if subordinated, mezzanine or unsecured loans), the issuing entity is subjected to additional risk. The borrower may have difficulty servicing and repaying multiple loans. The existence of another loan generally makes it more difficult for the borrower to obtain refinancing of the mortgage loan and may thereby jeopardize repayment of the mortgage loan. Moreover, the need to service additional debt may reduce the cash flow available to the borrower to operate and maintain the mortgaged property and in some cases, the debt service coverage ratio (based on the combined mortgage loan and other debt) may be less than 1.0x. In addition, the current and any future mezzanine lender may have cure rights with respect to the related mortgage loan, certain consent rights regarding, among other things, modifications of the related mortgage loan, certain consent rights regarding, among other things, annual budgets, leases and alterations with respect to the related mortgaged property and/or an option to purchase the mortgage loan after a default or transfer to special servicing pursuant to an intercreditor agreement. The option to purchase the mortgage loan may cause an early prepayment of the related mortgage loan.
Additionally, if the borrower (or its constituent members) defaults on the mortgage loan and/or any other loan, actions taken by other lenders could impair the security available to the issuing entity. If a junior lender files an involuntary petition for bankruptcy against the borrower (or the borrower files a voluntary petition to stay enforcement by a junior lender), the issuing entity’s ability to foreclose on the property would be automatically stayed, and principal and interest payments might not be made during the course of the bankruptcy case. The bankruptcy of another lender also may operate to stay foreclosure by the issuing entity. See “Certain Legal Aspects of Mortgage Loans—Bankruptcy Laws” in the prospectus.
Furthermore, if another mortgage loan secured by the mortgaged property is in default, the other lender may foreclose on the mortgaged property or, in the case of a mezzanine loan, the related mezzanine lender may foreclose on its equity collateral or exercise its purchase rights, in each case, absent an agreement to the contrary, thereby causing a delay in payments, a change in control of the borrower and/or an involuntary repayment of the mortgage loan prior to its maturity date or its anticipated
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repayment date, as applicable. The issuing entity may also be subject to the costs and administrative burdens of involvement in foreclosure proceedings or related litigation. In cases where the issuing entity is a party to any co-lender, intercreditor or similar agreement in connection with the additional debt described above, some provisions contained in that co-lender, intercreditor or similar agreement restricting another lender’s actions may not be enforceable by the trustee on behalf of the issuing entity. If, in the event of the related borrower’s bankruptcy, a court refuses to enforce certain restrictions against another lender, such as provisions whereby such other lender has agreed not to take direct actions with respect to the related debt, including any actions relating to the bankruptcy of the related borrower, or not to vote the lender’s claim with respect to a bankruptcy proceeding, there could be a resulting impairment and/or delay in the trustee’s ability to recover with respect to the related borrower.
Bankruptcy Proceedings Entail Certain Risks
Under the federal bankruptcy code, the filing of a petition in bankruptcy by or against a borrower will stay the sale of the real property owned by that borrower, as well as the commencement or continuation of a foreclosure action or any deficiency judgment proceedings. In addition, even if a court determines that the value of the mortgaged property is less than the principal balance of the mortgage loan it secures, the court may prevent a lender from foreclosing on the mortgaged property (subject to certain protections available to the lender). As part of a restructuring plan, a court also may reduce the amount of secured indebtedness to the then-current value of the mortgaged property. This action would make the lender a general unsecured creditor for the difference between the then-current value and the amount of its outstanding mortgage indebtedness. A bankruptcy court also may:
· | grant a debtor a reasonable time to cure a payment default on a mortgage loan; |
· | reduce monthly payments due under a mortgage loan; |
· | change the rate of interest due on a mortgage loan; or |
· | otherwise alter the mortgage loan’s repayment schedule. |
Moreover, the filing of a petition in bankruptcy by, or on behalf of, a junior lienholder may stay the senior lienholder from taking action to foreclose on the junior lien. Additionally, the borrower, as debtor-in-possession, or its bankruptcy trustee, has certain special powers to avoid, subordinate or disallow debts. In certain circumstances, the claims of the trustee, on behalf of the certificateholders, may be subordinated to financing obtained by a debtor-in-possession subsequent to its bankruptcy.
Under the federal bankruptcy code, the lender will be stayed from enforcing a borrower’s assignment of rents and leases. The federal bankruptcy code also may interfere with the trustee’s ability to enforce any lockbox requirements. The legal proceedings necessary to resolve these issues can be time consuming and costly and may significantly delay or diminish the lender’s receipt of rents. Rents also may escape an assignment to the extent they are used by the borrower to maintain the mortgaged property or for other court authorized expenses.
As a result of the foregoing, the trustee’s recovery with respect to borrowers in bankruptcy proceedings may be significantly delayed, and the aggregate amount ultimately collected may be substantially less than the amount owed.
Certain of the mortgage loans may have a loan sponsor that has filed for bankruptcy protection more than ten years ago. In all cases of which we are aware, the entity that was in bankruptcy has emerged from bankruptcy, although such entity may have emerged from bankruptcy within the last ten years. Certain of the mortgage loans may have had a loan sponsor that filed (or a loan sponsor that caused an entity under its control to file) for bankruptcy protection within the last ten years. See “—Prior Bankruptcies,Defaults or Other Proceedings May Be Relevant to Future Performance” below. We cannot assure you that, with respect to a loan sponsor that has filed (or has caused an entity under its control to file) for bankruptcy in the past, such loan sponsor will not be more likely than other loan sponsors to utilize their rights in bankruptcy in the event of any threatened action by the lender to enforce its rights
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under the related mortgage loan documents. Nor can we assure you that the bankruptcies of loan sponsors have in all cases been disclosed to us.
Risks Related to Loan Sponsor Guaranties
Although the mortgage loans are considered to be non-recourse, some of the mortgage loans provide for recourse to a person or entity other than the borrower for certain carve-outs to the non-recourse provisions, such as fraud or other bad acts, among other things. Such individuals and entities are not restricted from filing for bankruptcy protection. In addition, in connection with the origination of certain mortgage loans, a borrower may have been permitted to provide a guaranty from its parent or loan sponsor in lieu of funding a reserve or providing an irrevocable letter of credit. In addition, such individuals and entities are not restricted from filing for bankruptcy protection.
A loan sponsor on a guaranty in lieu of reserves will typically be an individual or operating entity; as such, it is capable of incurring liabilities, whether intentionally (such as incurring other debt) or unintentionally (such as being named in a lawsuit). In addition, such individuals and entities are not restricted from filing for bankruptcy protection. For example, in the case of the mortgaged property identified on Annex A-1 to this free writing prospectus as 11 Madison Avenue, which secures a mortgage loan representing approximately 7.5% of the outstanding pool balance as of the cut-off date, the borrower is responsible for approximately $140,212,434 of leasing commissions, tenant improvements and base building work under major tenant leases. In respect of $59,060,332 of such expenses, the guarantor under such mortgage loan, SL Green Realty Corp., provided a lease costs guaranty in such amount, in lieu of the borrower providing cash reserves for such expenses. A loan sponsor on a guaranty may be a guarantor of obligations other than related to the mortgage loan. As such, the net worth of a guarantor may be significantly reduced over time. It should also be noted that in most cases, the net worth of a guarantor is less than (and in most cases, significantly less than) the balance of the mortgage loan. Notwithstanding any net worth requirements that may be contained in a guaranty, there can be no assurance that the net worth requirements are adequate to satisfy guaranteed risks. In addition, certain non-recourse carveout guarantors may not be United States citizens. We cannot assure you that the lender will be able to collect on a guaranty from non-US citizens as such individuals or entities may be beyond the jurisdiction of United States courts. Furthermore, there can be no assurance that a loan sponsor or guarantor will be willing or financially able to satisfy guaranteed obligations. See “—Risks Related to Litigation and Condemnation” below.
It is common for non-recourse mortgage loans to provide for certain carveouts to the non-recourse provisions, such as for fraud and other bad acts, among other things. Often, an individual or entity separate from the related borrower will provide a guaranty of payment with respect to the non-recourse carveouts. In some cases, however, the recourse liability will be limited to an amount significantly less than the outstanding principal balance of the related mortgage loan.
It should also be noted that many of the non-recourse carveout guarantors with respect to mortgage loans in the mortgage pool are also guarantors, including non-recourse carve-out guarantors, with respect to mortgage loans that are not included in the mortgage pool and may also be guarantors of mezzanine loans related to mortgage loans in the mortgage pool and/or other mezzanine loans.
Lack of Skillful Property Management Entails Risks
The successful operation of a real estate project depends upon the property manager’s performance and viability and will be a significant factor affecting the revenues, expenses and value of a mortgaged property. The property manager is generally responsible for:
· | responding to changes in the local market; |
· | planning and implementing the rental structure; |
· | operating the property and providing building services; |
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· | managing operating expenses; and |
· | assuring that maintenance and capital improvements are carried out in a timely fashion. |
Properties deriving revenues primarily from short term sources, such as hotels and self storage facilities, are generally more management intensive than properties leased to creditworthy tenants under long-term leases.
A good property manager, by controlling costs, providing appropriate service to tenants and seeing to the maintenance of improvements, can improve cash flow, reduce vacancy, leasing and repair costs and preserve the building’s value. On the other hand, management errors can, in some cases, impair short-term cash flow and the long-term viability of an income producing property.
A substantial number of the mortgaged properties are managed by property managers affiliated with the respective borrowers. In some cases a mortgaged property may be “self-managed” by the related borrower. No representation or warranty can be made as to the skills or experience of any present or future managers. Many of the property managers are affiliated with the borrower and, in some cases, such property managers may not manage any other properties. Additionally, there can be no assurance that the related property manager will be in a financial condition to fulfill its management responsibilities throughout the terms of its respective management agreement. See also “—Risks Related to Conflicts of Interest—Conflicts Between Property Managers and the Borrowers” in this free writing prospectus.
Risks of Inspections Relating to Property
With limited exception, licensed engineers or consultants inspected the mortgaged properties in connection with the origination of the mortgage loans to assess items such as structure, exterior walls, roofing, interior construction, mechanical and electrical systems and general condition of the site, buildings and other improvements. However, there is no assurance that all conditions requiring repair or replacement were identified, or that any required repairs or replacements were effected. Any engineering report or site inspection represents only the analysis of the individual consultant, engineer or inspector preparing such report at the time of such report, and may not reveal all necessary or desirable repairs, maintenance and capital improvement items.
World Events and Natural (or Other) Disasters Could Have an Adverse Impact on the Mortgaged Properties and Could Reduce the Cash Flow Available To Make Payments on the Certificates
The world-wide economic crisis has had a material impact on general economic conditions, consumer confidence and market liquidity. The economic impact of the United States’ military operations in Afghanistan, Iraq and other parts of the world, as well as the possibility of any terrorist attacks domestically or abroad, is uncertain, but could have a material adverse effect on general economic conditions, consumer confidence, and market liquidity. We can give no assurance as to the effect of these events on consumer confidence and the performance of the mortgage loans held by the issuing entity. Any adverse impact resulting from these events would be borne by the holders of one or more classes of the certificates. In addition, natural disasters, including earthquakes, floods and hurricanes, and other disasters also may adversely affect the real properties securing the mortgage loans that back your certificates. For example, real properties located in California may be more susceptible to certain hazards (such as earthquakes or wildfires) than properties in other parts of the country and mortgaged properties located in coastal states generally may be more susceptible to hurricanes than properties in other parts of the country. Hurricanes and related windstorms, floods, tornadoes, mudslides, sinkholes and oil spills have caused extensive and catastrophic physical damage in and to coastal and inland areas located in the Gulf Coast region of the United States and certain other parts of the Atlantic coast of the United States. The underlying mortgage loans do not all require the maintenance of flood insurance for the related real properties. We cannot assure you that any damage caused by hurricanes, windstorms, floods, tornadoes, mudslides, sinkholes or other disasters would be covered by insurance.
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Inadequate Property Insurance Coverage Could Have an Adverse Impact on the Mortgaged Properties
Certain Risks Are Not Covered under Standard Insurance Policies. In general (other than where the mortgage loan documents permit the borrower to rely on a tenant (including a ground tenant) or other third party (such as a condominium association, if applicable) to obtain the insurance coverage on self-insurance provided by a tenant or on a tenant’s agreement to rebuild or continue paying rent), the master servicer and special servicer will be required to cause the borrower on each mortgage loan to maintain such insurance coverage in respect of the related mortgaged property as is required under the related mortgage loan documents. See “Description of the Mortgage Pool—Certain Underwriting Matters—Property,Liability and Other Insurance” in this free writing prospectus. In general, the standard form of fire and extended coverage policy covers physical damage to or destruction of the improvements of a property by fire, lightning, explosion, smoke, windstorm and hail, and riot, strike and civil commotion, subject to the conditions and exclusions specified in each policy (windstorm is a common exclusion for properties located in certain locations). Most policies typically do not cover any physical damage resulting from, among other things:
· | war; |
· | revolution; |
· | terrorism; |
· | nuclear, biological or chemical materials; |
· | governmental actions; |
· | floods and other water related causes; |
· | earth movement, including earthquakes, landslides and mudflows; |
· | wet or dry rot; |
· | vermin; and |
· | domestic animals. |
Unless the related mortgage loan documents specifically require the borrower to insure against physical damage arising from such causes, then, the resulting losses may be borne by you as a holder of certificates. See “The Pooling and Servicing Agreement—Insurance Policies” in this free writing prospectus.
Standard Insurance May Be Inadequate Even for Types of Losses That Are Insured Against. Even if a type of loss is covered by the insurance policies required to be in place at the mortgaged properties, the mortgaged properties may suffer losses for which the insurance coverage is inadequate. For example:
· | in a case where terrorism coverage is included under a policy, if the terrorist attack is, for example, nuclear, biological or chemical in nature, the policy may include an exclusion that precludes coverage for such terrorist attack; |
· | in certain cases, particularly where land values are high, the insurable value (at the time of origination of the mortgage loan) of the mortgaged property may be significantly lower than the principal balance of the mortgage loan; |
· | with respect to mortgaged properties located in flood prone areas where flood insurance is required, the related mortgaged property may only have federal flood insurance (which only |
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covers up to $500,000), not private flood insurance, and the related mortgaged property may suffer losses that exceed the amounts covered by the federal flood insurance; |
· | the mortgage loan documents may limit the requirement to obtain related insurance to where the premium amounts are “commercially reasonable” or a similar limitation; and |
· | if reconstruction or major repairs are required, changes in laws may materially affect the borrower’s ability to effect any reconstruction or major repairs and/or may materially increase the costs of the reconstruction or repairs and insurance may not cover or sufficiently compensate the insured. |
There Is No Assurance That Required Insurance Will Be Maintained. There is no assurance that borrowers have maintained or will maintain the insurance required under the mortgage loan documents or that such insurance will be adequate.
Even if the mortgage loan documents specify that the related borrower must maintain standard extended coverage casualty insurance or other insurance that covers acts of terrorism, the borrower may fail to maintain such insurance and the master servicer or the special servicer may not enforce such default or cause the borrower to obtain such insurance if the special servicer has determined, in accordance with the servicing standard and subject to the discussion under “The Pooling and Servicing Agreement—The Directing Holder” and “—The Operating Advisor” in this free writing prospectus, that either (a) such insurance is not available at any rate or (b) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the mortgaged property and located in or around the geographic region in which such mortgaged property is located (but only by reference to such insurance that has been obtained by such owners at current market rates) (such default, an “Acceptable Insurance Default”). Additionally, if the related borrower fails to maintain such terrorism insurance coverage, neither the applicable master servicer nor the special servicer will be required to maintain such terrorism insurance coverage if the special servicer determines, in accordance with the servicing standard, that such terrorism insurance coverage is not available for the reasons set forth in (a) or (b) of the preceding sentence. Furthermore, at the time existing insurance policies are subject to renewal, there is no assurance that terrorism insurance coverage will be available and covered under the new policies or, if covered, whether such coverage will be adequate. Most insurance policies covering commercial real properties such as the mortgaged properties are subject to renewal on an annual basis. If this coverage is not currently in effect, is not adequate or is ultimately not continued with respect to some of the mortgaged properties and one of those properties suffers a casualty loss as a result of a terrorist act, then the resulting casualty loss could reduce the amount available to make distributions on your certificates.
Furthermore, with respect to certain mortgage loans, the insurable value of the related mortgaged property as of the origination date of the related mortgage loan was lower than the principal balance of the related mortgage loan. In the event of a casualty when a borrower is not required to rebuild or cannot rebuild, we cannot assure you that the insurance required with respect to the related mortgaged property will be sufficient to pay the related mortgage loan in full and there is no “gap” insurance required under such mortgage loan to cover any difference. In those circumstances, a casualty that occurs near the maturity date may result in an extension of the maturity date of the mortgage loan if the master servicer, in accordance with the servicing standard, determines that such extension was in the best interest of certificateholders.
As a result of any of the foregoing, the amount available to make distributions on your certificates could be reduced.
Risks Associated with Blanket Insurance Policies or Self-Insurance
Certain of the mortgaged properties are covered by blanket insurance policies, which also cover other properties owned by the related borrower or its affiliates (including certain properties in close proximity to the mortgaged properties and including other properties owned, managed and/or franchised by the
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related property manager or its affiliates). In the event that such policies are drawn on to cover losses on such other properties, the amount of insurance coverage available under such policies would thereby be reduced and could be insufficient to cover insurable risks at the related mortgaged property.
In some cases, the related borrower or property manager or its affiliate maintains one or more forms of insurance under blanket policies. For example, with respect to 73 mortgaged properties, which collectively represent approximately 79.9% of the outstanding pool balance as of the cut-off date (by allocated loan amount), certain insurance for the related mortgaged property (or, if applicable, some or all of the related mortgaged properties) is under a borrower’s or property manager’s or affiliate’s blanket insurance policy.
When a mortgaged property is insured pursuant to a blanket policy, there is a risk that casualties at other properties insured under the same blanket policy can exhaust the available coverage and reduce the amount available to be paid in connection with a casualty at the subject mortgaged property.
In some cases, and frequently in the case of leased fee properties and properties with a single tenant, a significant tenant, a credit-rated tenant or a tenant with a rated parent or the tenant at a leased fee parcel, the related mortgage loan documents permit the related borrower to rely on self-insurance or other agreements (such as an agreement to rebuild or just continue paying rent in the event of a casualty) provided by a tenant or an affiliate thereof in lieu of an insurance policy or the insurance requirements are solely governed by the terms of a related long-term lease. To the extent that insurance coverage relies on self-insurance, there is risk that the “insurer” will not be willing or have the financial ability to satisfy the claim when the loss occurs. In some cases, a tenant that may be permitted to self-insure is also permitted during the last few years of the lease term to terminate the lease and not restore the related mortgaged property in the event of a major casualty.
Availability of Terrorism Insurance
After the September 11, 2001 terrorist attacks in New York City and the Washington, D.C. area, all forms of insurance were impacted, particularly from a cost and availability perspective, including comprehensive general liability and business interruption or rent loss insurance policies required by typical mortgage loans. To give time for private markets to develop a pricing mechanism for terrorism risk and to build capacity to absorb future losses that may occur due to terrorism, the Terrorism Risk Insurance Act of 2002 was enacted on November 26, 2002, establishing the “Terrorism Insurance Program.” The Terrorism Insurance Program was extended through December 31, 2014 by the Terrorism Risk Insurance Program Reauthorization Act of 2007 (“TRIPRA”) and was subsequently reauthorized on January 12, 2015 for a period of six years through December 31, 2020 pursuant to the Terrorism Risk Insurance Program Reauthorization Act of 2015 (“TRIPRA 2015”).
The Terrorism Insurance Program requires insurance carriers to provide terrorism coverage in their basic “all-risk” policies. Any commercial property and casualty terrorism insurance exclusion that was in force on November 26, 2002 is automatically void to the extent that it excluded losses that would otherwise be insured losses. Any state approval of those types of exclusions in force on November 26, 2002 is also void.
Under the Terrorism Insurance Program, the federal government shares in the risk of losses occurring within the United States resulting from acts committed in an effort to influence or coerce United States civilians or the United States government. The federal share of compensation for insured losses of an insurer equals 85% (subject to annual 1% decreases beginning in 2016 until such percentage equals 80%) of the portion of such insured losses that exceed a deductible equal to 20% of the value of the insurer’s direct earned premiums over the calendar year immediately preceding that program year. Federal compensation in any program year is capped at $100 billion (with insurers being liable for any amount that exceeds such cap), and no compensation is payable with respect to a terrorist act unless the aggregate industry losses relating to such act exceed $100 million (subject to annual $20 million increases beginning in 2016 until such threshold equals $200 million). The Terrorism Insurance Program does not cover nuclear, biological, chemical or radiological attacks. Unless a borrower obtains separate
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coverage for events that do not meet the thresholds or other requirements above, such events will not be covered.
If the Terrorism Insurance Program is not reenacted after its expiration in 2020, premiums for terrorism insurance coverage will likely increase and the terms of such insurance policies may be materially amended to increase stated exclusions or to otherwise effectively decrease the scope of coverage available (perhaps to the point where it is effectively not available). In addition, to the extent that any insurance policies contain “sunset clauses” (i.e., clauses that void terrorism coverage if the federal insurance backstop program is not renewed), then such policies may cease to provide terrorism insurance upon the expiration of the Terrorism Insurance Program. We cannot assure you that the Terrorism Insurance Program or any successor program will create any long term changes in the availability and cost of such insurance. To the extent that uninsured or underinsured casualty losses occur with respect to the Mortgaged Property, losses on the Mortgage Loan may result. In addition, the failure to maintain such terrorism insurance may constitute a default under the Mortgage Loan.
Under the terms of the Mortgage Loan, the borrower is required to obtain and maintain coverage in its property insurance policy (or by a separate policy) against loss or damage resulting from terrorist acts in an amount equal to 100% of the full replacement cost of the Mortgaged Property plus the rental loss and/or business income interruption insurance required under the Mortgage Loan Purchase Agreement; provided that such coverage is available. For so long as TRIPRA or a subsequent statute or extension thereof is in effect and continues to cover both foreign and domestic acts, the lender is required to accept terrorism insurance with coverage against acts which are “certified” within the meaning of TRIPRA. Notwithstanding the foregoing, with respect to any such stand-alone policy covering terrorist acts, in the event TRIPRA or a subsequent statute or extension thereof is no longer in effect, the borrower will not be required to pay any premiums solely with respect to such terrorism coverage in excess of the “Terrorism Premium Cap”; provided that if the premiums payable with respect to such terrorism coverage exceeds the Terrorism Premium Cap, the borrower is required to purchase a standalone terrorism insurance policy providing the maximum amount of coverage for acts of terrorism as is available with funds equal to the Terrorism Premium Cap (in which event the lender will have the right to determine the modifications of the deductible amounts, policy limits and other required policy terms to reduce the insurance premiums payable with respect to such stand-alone terrorism policy to the Terrorism Premium Cap). The “Terrorism Premium Cap” is the amount equal to two times the amount of the insurance premium that is payable in respect of the Mortgaged Property and business interruption/rental loss insurance required under the Mortgage Loan Documents (without giving effect to the cost of terrorism components of such casualty and business interruption/rental loss insurance) at the time that such terrorism coverage is excluded from the applicable policy.
Certain Mortgage Loans Limit the Borrower’s Obligation To Obtain Terrorism Insurance. In addition, certain of the mortgage loans contain limitations on the borrower’s obligation to obtain terrorism insurance, such as (i) waiving the requirement that such borrowers maintain terrorism insurance in its entirety or only if such insurance is not available at commercially reasonable rates and/or if such insurance is not then being maintained for similarly situated properties in the area of the subject mortgaged property, or waiving such requirement altogether, (ii) providing that the related borrowers may not be required to spend in excess of a specified dollar amount in order to obtain such terrorism insurance or setting a terrorism insurance policy cap that is lower than the Terrorism Premium Cap, (iii) if such terrorism insurance is not available from a “Qualified Carrier,” permitting the related borrower to obtain such terrorism insurance from the highest rated insurance company providing such terrorism coverage, (iv) permitting the related borrower to rely on terrorism insurance obtained by, or on self-insurance provided by, a tenant, or (v) permitting the related borrower to rely on the insurance requirements contained in a related long-term lease. See “Description of the Mortgage Pool—Certain Underwriting Matters—Property,Liability and Other Insurance” in this free writing prospectus.
The various forms of insurance maintained with respect to any of the mortgaged properties, including property and casualty insurance, environmental insurance and earthquake insurance, may be provided under a blanket insurance policy, covering other real properties, some of which may not secure mortgage loans in the issuing entity. As a result of total limits under blanket policies, losses at other properties
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covered by the blanket insurance policy may reduce the amount of insurance coverage available with respect to a mortgaged property securing one of the mortgage loans in the issuing entity and the amounts available could be insufficient to cover insured risks at such mortgaged property.
With respect to certain of the mortgage loans that we intend to include in the issuing entity, the related mortgage loan documents generally provide that the borrowers are required to maintain comprehensive standard extended coverage casualty insurance but may not specify the nature of the specific risks required to be covered by these insurance policies.
With respect to certain of the mortgage loans, the standard extended coverage policy specifically excludes terrorism insurance from its coverage. In certain of those cases, the related borrower obtained supplemental terrorism insurance. In other cases, the lender did not require that terrorism insurance be maintained.
There Is No Assurance That Required Terrorism Insurance Will Be Maintained. Even if the mortgage loan documents specify that the related borrower must maintain standard extended coverage casualty insurance or other insurance that covers acts of terrorism, the borrower may fail to maintain such insurance and the master servicer or special servicer may not enforce such default or cause the borrower to obtain such insurance if the special servicer has determined, in accordance with the servicing standard, that either (a) such insurance is not available at any rate or (b) such insurance is not available at commercially reasonable rates (which determination, with respect to terrorism insurance, will be subject to consent of the directing holder (which is generally the holder of the majority interest of the most subordinate class then outstanding, as described under “The Pooling and Servicing Agreement—The Directing Holder” in this free writing prospectus) and that such hazards are not at the time commonly insured against for properties similar to the mortgaged property and located in or around the geographic region in which such mortgaged property is located. Additionally, if the related borrower fails to maintain such insurance, neither the master servicer nor the special servicer will be required to maintain such terrorism insurance coverage if the special servicer determines, in accordance with the servicing standard, that such insurance is not available for the reasons set forth in (a) or (b) of the preceding sentence. Furthermore, at the time existing insurance policies are subject to renewal, there is no assurance that terrorism insurance coverage will be available and covered under the new policies or, if covered, whether such coverage will be adequate. Most insurance policies covering commercial real properties such as the mortgaged properties are subject to renewal on an annual basis. If this coverage is not currently in effect, is not adequate or is ultimately not continued with respect to some of the mortgaged properties and one of those properties suffers a casualty loss as a result of a terrorist act, then the resulting casualty loss could reduce the amount available to make distributions on your certificates.
As a result of any of the foregoing, the amount available to make distributions on your certificates could be reduced.
Appraisals and Market Studies Have Certain Limitations
An appraisal or other market analysis was conducted with respect to the mortgaged properties in connection with the origination or acquisition of the related mortgage loans. The resulting estimates of value are the bases of the cut-off date loan to value ratios referred to in this free writing prospectus. Those estimates represent the analysis and opinion of the person performing the appraisal or market analysis and are not guarantees of present or future values. There can be no assurance that another appraiser would not have arrived at a different evaluation, even if such appraiser used the same general approach to, and the same method of, appraising the mortgaged property. Moreover, the values of the mortgaged properties may have fluctuated significantly since the appraisal or market study was performed. In addition, appraisals seek to establish the amount a typically motivated buyer would pay a typically motivated seller. Such amount could be significantly higher than the amount obtained from the sale of a mortgaged property under a distress or liquidation sale. In certain cases, appraisals may reflect “as-stabilized” values, reflecting certain assumptions, such as future construction completion, projected re-tenanting or increased tenant occupancies. Information regarding the appraised values of mortgaged properties available to the depositor as of the cut-off date is presented in Annex A-1 to this free writing
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prospectus for illustrative purposes only. See “Description of the Mortgage Pool—Additional Mortgage Loan Information” in this free writing prospectus.
Risks Related to Historic Tax Credits
With respect to certain mortgage loans, the related property owners may be entitled to receive historic tax credits pursuant to Section 47 of the Internal Revenue Code, which provides a tax credit for a percentage of qualified rehabilitation expenditures with respect to any certified historic structure. The property owners may use the tax credits to offset income tax that they may otherwise owe, or they may sell or pass-through the historic tax credit to tax credit investors.
We cannot assure you that the tax credits may not ultimately be subject to recapture. Action by the Internal Revenue Service could be disruptive to the management of the mortgaged property in any event, and if the tax credits are recaptured, the borrower or its affiliates are likely to be contractually responsible to reimburse the tax credit investor for related losses.
Investors should not assume that the issuing entity will derive any economic benefit from the historic tax credits.
To preserve the pass-through of the historic tax credits, the property owner and tax credit investor may use a master lease structure. Typically the lender agrees not to take action that would terminate the master lease during the recapture period. Accordingly, the lender’s exercise of remedies may be subject to additional cost and delay, and we cannot assure you that your certificates will not be adversely affected as a result.
Preserving the historic tax credits may also restrict the use of the property to its uses as rehabilitated, which could limit flexibility in using the property for alternative purposes for the duration of the recapture period.
A property owner’s pass-through of historic tax credits to a tax credit investor may also have the effect of reducing the property owner’s equity in the property, and diminishing incentives to own and operate the mortgaged property in the same manner as it would otherwise. Further, the transaction structure may provide for the tax credit investor’s obtaining a preferred return on its investment. For these and similar reasons, a property with historic tax credits that are sold or passed-through to a third party tax credit investor may experience reduced cash flow compared to a property without them, and the operation or management of the mortgaged property may be adversely affected. For example:
· | With respect to the mortgaged property identified on Annex A-1 to this free writing prospectus as Cookie Factory Lofts, which secures a mortgage loan representing approximately 2.5% of the initial outstanding pool balance as of the cut-off date, the 2014 renovation of the related building, a historic structure listed on the National Register of Historic Places, enabled the borrower to qualify for state and federal historic rehabilitation tax credits. In order to realize the value of the federal historic credits, the borrower entered into a master lease of the mortgaged property and a tax credit pass-through agreement with an affiliate (the “Master Tenant”), controlled by the loan sponsor. In exchange for an investment of approximately $6.6 million, The Sherwin-Williams Company (“Sherwin Williams”) obtained a 99% equity interest in the Master Tenant, and thus received, in addition to ordinary cash distributions based on its membership interest, an allocation of the federal historic tax credits. Pursuant to the master lease, the Master Tenant is required to make monthly payments to the borrower of 1/12th of the annual base rental payments pursuant to a schedule (ranging from $301,527 in 2014 to $1,764,962 in 2039). The master lease term expires on September 30, 2039; however, until December 31, 2019, the master lease may not be terminated nor may rent payable under such lease be accelerated. The federal historic tax credits have an estimated value of $5.332 million. All the Virginia historic tax credits were allocated by the borrower to the Virginia Historic Tax Credit Fund, which acquired a 4% equity interest in the borrower in exchange for payments estimated at $6.635 million. |
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Increases in Real Estate Taxes Due to Termination of a PILOT Program or Other Tax Abatement Arrangements May Reduce Payments to Certificateholders
Certain of the mortgaged properties securing the mortgage loans have or may in the future have the benefit of reduced real estate taxes under a local government program of payment in lieu of taxes (often known as a “PILOT” program) or other tax abatement arrangements. Some of these programs or arrangements are scheduled to terminate or have significant tax increases prior to the maturity of the related mortgage loan, resulting in higher, and in some cases substantially higher, real estate tax obligations for the related borrower. An increase in real estate taxes may impact the ability of the borrower to pay debt service on the mortgage loans or refinance the mortgage loans at maturity. There are no assurances that any such program will continue for the duration of the related mortgage loan or would survive a mortgage loan foreclosure or deed in lieu of foreclosure. For example:
· | With respect to the mortgaged property identified on Annex A-1 to this free writing prospectus as 11 Madison Avenue, which secures a mortgage loan representing approximately 7.5% of the outstanding pool balance as of the cut-off date, a portion of the mortgaged property consisting of the leasehold interests in 9 condominium units, the related fee simple interests of which are owned by the New York City Industrial Development Agency, (“NYC IDA”) is subject to a certain Overlease Agreement dated December 22, 1995, by and between the borrower (as successor to tenant’s interest) and the NYC IDA (as assigned and/or amended, the “11 Madison Avenue Overlease”). The rent under the 11 Madison Avenue Overlease is $10 for the full term and has been fully prepaid. The purpose of the 11 Madison Avenue Overlease is to substitute real property tax obligations with payments in lieu of real estate taxes. Credit Suisse is required to pay all PILOT pursuant to a PILOT Agreement dated December 1, 1995 between the NYC IDA and Credit Suisse; however, the borrower has agreed to make such payments with respect to certain space subleased by it from Credit Suisse. See “11 Madison Avenue—Major Tenants” in Annex B to this free writing prospectus. The IDA structure terminates on December 31, 2016. If the 11 Madison Avenue Overlease terminates for any reason, the fee interest in the condominium units subject to the 11 Madison Avenue Overlease reverts back to the borrower. The mortgage provides that upon any such reversion of condominium units to the borrower, such condominium units will automatically be subject to the mortgage. Upon the reversion of the condominium units to the borrower, the real estate taxes for the mortgaged property are expected to increase substantially and the borrower will be required to pay such real estate taxes. In place PILOT payments are approximately $11,648,777. The mortgage loan was underwritten based on a projection of real estate taxes provided by the borrower, which projected such real estate taxes to be $20,820,385. There can be no assurance that actual real estate taxes will not be greater than such projection. |
Risks Related to Enforceability
All of the mortgages permit the lender to accelerate the debt upon default by the borrower. The courts of all states will enforce acceleration clauses in the event of a material payment default, subject in some cases to a right of the court to revoke such acceleration and reinstate the mortgage loan if a payment default is cured. The equity courts of any state, however, may refuse to allow the foreclosure of a mortgage, deed of trust, or other security instrument or to permit the acceleration of the indebtedness if:
· | the exercise of those remedies would be inequitable or unjust; or |
· | the circumstances would render the acceleration unconscionable. |
Thus, a court may refuse to permit foreclosure or acceleration if a default is deemed immaterial or the exercise of those remedies would be unjust or unconscionable or if a material default is cured.
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Risks Related to Enforceability of Prepayment Premiums, Yield Maintenance Charges and Defeasance Provisions
Provisions requiring yield maintenance charges, prepayment premiums and lock-out periods may not be enforceable in some states and under federal bankruptcy law. Those provisions for charges and premiums also may constitute interest for usury purposes. Accordingly, we cannot assure you that the obligation to pay a yield maintenance charge or prepayment premium or to prohibit prepayments will be enforceable. There is no assurance that the foreclosure proceeds will be sufficient to pay an enforceable yield maintenance charge or prepayment premium. Additionally, although the collateral substitution provisions related to defeasance do not have the same effect on the certificateholders as prepayment, there is no assurance that a court would not interpret those provisions as requiring a yield maintenance charge or prepayment premium. In certain jurisdictions those collateral substitution provisions might therefore be deemed unenforceable under applicable law, or usurious.
The Master Servicer or the Special Servicer May Experience Difficulty in Collecting Rents upon the Default and/or Bankruptcy of a Borrower
If a mortgaged property has tenants, the borrower typically assigns its income as landlord to the lender as further security (typically under an assignment of leases and rents), while retaining a license to collect rents as long as there is no default. If the borrower defaults, the license terminates and the lender is entitled to collect rents. In certain jurisdictions, these assignments are typically not perfected as security interests until the lender takes actual possession of the property’s cash flow. In some jurisdictions, the lender may not be entitled to collect rents until the lender takes possession of the mortgaged property and secures a judicial appointment of a receiver before becoming entitled to collect rents, in which case, the receiver, rather than the lender, would be entitled to collect the rents. A receiver generally may not be appointed as a matter of right, and appointment of a receiver may be delayed or subject to a court’s approval. In addition, as discussed above, if bankruptcy or similar proceedings are commenced by or for the borrower, the lender’s ability to collect the rents may be adversely affected. See “Certain Legal Aspects of Mortgage Loans—Leases and Rents” in the prospectus.
Risks Related to Mortgage Loans Secured by Multiple Properties
Thirteen (13) mortgage loans, representing approximately 34.5% of the outstanding pool balance as of the cut-off date, are secured by more than one mortgaged property. These arrangements are designed primarily to ensure that all of the collateral pledged to secure a multi-property mortgage loan, and the cash flows generated by such properties, are available to support debt service on, and ultimate repayment of, the aggregate indebtedness secured by such properties. This arrangement thus seeks to reduce the risk that the inability of one or more of the mortgaged properties securing any such mortgage loans to generate net operating income sufficient to pay debt service, or a decline in the value of one or more such mortgaged properties, will result in defaults and ultimate losses.
There may not be complete identity of ownership of the mortgaged properties securing a multi-property mortgage loan. Mortgage loans to co-borrowers or co-mortgagors secured by multiple properties or multiple parcels within a single mortgaged property could be challenged as a fraudulent conveyance by creditors of a borrower or mortgagor or by the representative of the bankruptcy estate of a borrower if a borrower or mortgagor were to become a debtor in a bankruptcy case. Generally, under federal and most state fraudulent conveyance statutes, the incurring of an obligation or the transfer of property by a person will be subject to avoidance under certain circumstances if the person did not receive fair consideration or reasonably equivalent value in exchange for such obligation or transfer and:
· | was insolvent or was rendered insolvent by such obligation or transfer, |
· | was engaged in business or a transaction, or was about to engage in business or a transaction, for which any property remaining with the person was an unreasonably small capital, or |
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· | intended to, or believed that it would, incur debts that would be beyond the person’s ability to pay as such debts matured. |
Accordingly, a lien granted by a borrower to secure repayment of another borrower’s mortgage loan could be avoided if a court were to determine that:
· | such borrower was insolvent at the time of granting the lien, was rendered insolvent by the granting of the lien, or was left with inadequate capital, or was not able to pay its debts as they matured, and |
· | the borrower did not, when it allowed its property to be encumbered by a lien securing the entire indebtedness represented by the mortgage loan, receive fair consideration or reasonably equivalent value for pledging such property for the benefit of the other borrower. |
If the lien is avoided, the lender would lose the benefits afforded by such lien.
Some of the multi-property mortgage loans are secured by mortgage liens on mortgaged properties located in different states. Because of various state laws governing foreclosure or the exercise of a power of sale and because, in general, foreclosure actions are brought in state court, and the courts of one state cannot exercise jurisdiction over property in another state or country, it may be necessary upon a default under any such mortgage loan to foreclose on the related mortgaged properties in a particular order rather than simultaneously in order to ensure that the lien of the related mortgages is not impaired or released. Therefore, the lender would experience delay in exercising remedies with respect to multi-property mortgage loans secured by properties located in more than one state or jurisdiction.
In addition, the amount of the mortgage lien encumbering any particular one of the mortgaged properties securing a multi-property mortgage loan is in some cases less than the full amount of the related mortgage loan, generally to minimize mortgage recording tax. In these cases the mortgage may be limited to the allocated loan amount for the related mortgaged property or some other amount that is less than or equal to the appraised value of the mortgaged property at the time of origination. This would limit the extent to which proceeds from the mortgaged property would be available to offset declines in value of the other mortgaged properties securing the same mortgage loan.
State Law Limitations Entail Certain Risks
The ability to realize upon the mortgage loans may be limited by the application of state and federal laws. Several states (including California) have laws that prohibit more than one “judicial action” to enforce a mortgage obligation. Some courts have construed the term “judicial action” broadly. Accordingly, the special servicer may need to obtain advice of counsel prior to enforcing any of the issuing entity’s rights under any of the mortgage loans that include mortgaged properties where a “one action” rule could be applicable. In the case of a mortgage loan secured by multiple mortgaged properties located in multiple states, the special servicer may be required to foreclose first on mortgaged properties located in states where such “one action” rules apply (and where non-judicial foreclosure is permitted) before foreclosing on properties located in states where judicial foreclosure is the only permitted method of foreclosure. As a result, the ability to realize upon the mortgage loans may be limited by the application of state laws and may delay or otherwise limit the ability to realize on defaulted mortgage loans. See “Certain Legal Aspects of Mortgage Loans—Foreclosure” in the prospectus. Foreclosure actions may also, in certain circumstances, subject the issuing entity to liability as a “lender-in-possession” or result in the equitable subordination of the claims of the trustee to the claims of other creditors of the borrower. The special servicer may take these state laws into consideration in deciding which remedy to choose following a default by a borrower.
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Mortgage Loans Secured by Leasehold Interests May Expose Investors to Greater Risks of Default and Loss
Three (3) mortgaged properties, representing approximately 12.8% of the outstanding pool balance as of the cut-off date, are secured by a mortgage on (i) the borrower’s leasehold or subleasehold interest or interests, which may be a space lease or air rights lease, in the mortgaged property and not the related fee simple interest or (ii) the borrower’s leasehold interest or interests in a portion of the mortgaged property and the borrower’s or the related sponsor’s fee simple interest in the remainder of the mortgaged property. For the purpose of this free writing prospectus, a mortgaged property is not considered secured by a leasehold mortgage if the fee is also encumbered.
Below are examples of ground lease provisions that are not standard and that may expose investors to greater risks of default and loss than the typical provisions in more standard ground leases or ground lease estoppels:
· | With respect to the mortgaged property identified on Annex A-1 to this free writing prospectus as 11 Madison Avenue, which secures a mortgage loan representing approximately 7.5% of the outstanding pool balance as of the cut-off date, a portion of the mortgaged property consisting of the leasehold interests in 9 condominium units, the related fee simple interests of which are owned by the NYC IDA, is subject to the 11 Madison Avenue Overlease. The 11 Madison Avenue Overlease terminates on December 31, 2016. If the Overlease terminates for any reason, the fee interest in the condominium units subject to the Overlease reverts back to the borrower. The mortgage loan is secured by borrower’s leasehold interest under the 11 Madison Avenue Overlease, and its reversionary interest in the related condominium units, but is not secured by the NYC IDA’s fee interest in such units. The mortgage provides that upon any such reversion of condominium units to the borrower, the fee simple interest in such condominium units that reverted back to borrower will automatically be subject to the mortgage. |
Mortgage loans secured in whole or in part by a lien on the leasehold estate of the borrower are subject to certain risks not associated with mortgage loans secured by a lien on the fee estate of the borrower. The most significant of these risks is that if the borrower’s leasehold interest were to be terminated upon a lease default or in connection with a lessor or lessee bankruptcy, the leasehold mortgagee would lose its security in such leasehold interest. Generally, the related ground lease requires the lessor to give the leasehold mortgagee notice of lessee defaults and an opportunity to cure them, permits the leasehold estate to be assigned to the leasehold mortgagee or the purchaser at a foreclosure sale, and may contain certain other provisions beneficial to a mortgagee.
Upon the bankruptcy of a lessor or a lessee under a ground lease (or, with respect to a leasehold interest that is a space lease or air rights lease, the space lease or air rights lease), the debtor has the right to assume or reject the lease. If a debtor lessor rejects the lease, the lessee generally has the right (pursuant to section 365(h) of the federal bankruptcy code) to remain in possession of its leased premises paying the rent required under the lease for the term of the lease (including renewals) and to offset against such rent any damages incurred due to the landlord’s failure to perform its obligations under the lease (although in certain cases a bankrupt lessor may obtain court approval to dispose of the related property free and clear of the lessee’s interest). If a debtor lessee/borrower rejects the lease, the leasehold lender could succeed to the lessee/borrower’s position under the lease only if the lease specifically grants the lender such right. If both the lessor and the lessee/borrower are involved in bankruptcy proceedings, the trustee may be unable to enforce the bankrupt lessee/borrower’s obligation to refuse to treat a ground lease rejected by a bankrupt lessor as terminated. In such circumstances, a lease could be terminated notwithstanding lender protection provisions contained therein or in the mortgage. See “Certain Legal Aspects of Mortgage Loans—Bankruptcy Laws” in the prospectus.
Other concerns:
· | A ground lease (or, with respect to a leasehold interest that is a space lease or air rights lease, the space lease or air rights lease) may contain use restrictions that could adversely affect the |
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ability of the related borrower to lease or sell the mortgaged property on favorable terms, thus adversely affecting the borrower’s ability to fulfill its obligations under the related mortgage loan. |
· | The ground lease (or, with respect to a leasehold interest that is a space lease or air rights lease, the space lease or air rights lease) may limit a leasehold mortgagee’s right to hold and/or control application of insurance and condemnation proceeds derived from the applicable mortgaged property. Such proceeds, if not applied to restoration, may first go to compensate losses of the fee owner. |
· | The terms of a ground lease (or, with respect to a leasehold interest that is a space lease or air rights lease, the space lease or air rights lease) may provide that the rent payable under the related ground lease (or, with respect to a leasehold interest that is a space lease or air rights lease, the space lease or air rights lease) increases during the term of the mortgage loan. These increases may adversely affect the cash flow and net income of the borrower from the mortgaged property. |
· | The terms of a ground lease (or, with respect to a leasehold interest that is a space lease or air rights lease, the space lease or air rights lease) may limit the circumstances under which a leasehold mortgagee may obtain a new ground lease following a termination of the ground lease with the related borrower. In addition, certain mortgaged properties rely on lease or licensing agreements with third parties which agreements are significant to the current operation of the mortgaged property and current cash flow. For example, certain hospitality properties may rely on restaurant or night club tenants at the hospitality property for hotel occupancy. See “ —Hospitality Properties Have Special Risks” above. In addition, certain mortgaged properties may have characteristics or be located in locations which the related borrower benefits from utilizing public or other space, which space may require the borrower to enter into a lease or licensing agreement for its use. |
Potential Absence of Attornment Provisions Entails Risks
As described in the prospectus under “Risk Factors—Commercial and Multifamily Mortgage Loans Are Subject to Certain Risks Which Could Adversely Affect the Performance of Your Offered Certificates—Rights Against Tenants May Be Limited If Leases Are Not Subordinate to Mortgage or Do Not Contain Attornment Provisions,” there are risks related to the absence of attornment provisions. Not all leases or subleases were reviewed to ascertain the existence of attornment or subordination provisions. Accordingly, if a mortgaged property is located in a jurisdiction where an attornment provision is required to require the tenant to attorn and such mortgaged property is leased to one or more desirable tenants under leases that are subordinate to the mortgage and do not contain attornment provisions, such mortgaged property could experience a further decline in value if such tenants’ leases were terminated. This is particularly likely if such tenants were paying above market rents or could not be replaced.
If a lease is not subordinate to a mortgage, the issuing entity will not have the right to dispossess the tenant upon foreclosure of the mortgaged property (unless it has otherwise agreed with the tenant). If the lease contains provisions inconsistent with the mortgage loan documents (e.g., provisions relating to application of insurance proceeds or condemnation awards) or which could affect the enforcement of the lender’s rights (e.g., a right of first refusal to purchase the property), the provisions of the lease will take precedence over the provisions of the mortgage. In the event such a lease provision takes precedence over the provisions of the mortgage, such provision may reduce the value of the mortgaged property and may negatively impact your certificates.
Risks Related to Zoning Laws
As described in the prospectus under “Risk Factors—Commercial and Multifamily Mortgage Loans Are Subject to Certain Risks Which Could Adversely Affect the Performance of Your Offered Certificates—If Mortgaged Properties Are Not in Compliance with Current Zoning Laws,Restoration Following a Casualty Loss May Be Limited,” there are risks related to zoning laws. Certain of the
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mortgaged properties that do not conform to current zoning laws may not be “legal non-conforming uses” or “legal non-conforming structures.” The failure of a mortgaged property to comply with zoning laws or to be a “legal non-conforming use” or “legal non-conforming structure” may adversely affect market value of the mortgaged property or the borrower’s ability to continue to use it in the manner it is currently being used or may necessitate material additional expenditures to remedy non-conformities. Violations may be known to exist at a particular mortgaged property, but, except as disclosed below, the related mortgage loan sellers have informed us that, to their knowledge, there are no violations that they consider to be material to the value of the related mortgaged property or that they consider would have a likely negative impact upon your certificates.
Certain of the mortgaged properties have or may have zoning violations or zoning restrictions based on current law related to use, floor area ratio, building separation, height, setbacks, parking or density. Many of these mortgaged properties have been determined to be (i) legal non-conforming structures, which would be required to be rebuilt in accordance with current zoning requirements if there is a casualty greater than a certain threshold percentage of the property, or (ii) legal non-conforming uses, which would no longer be permitted if there is a casualty greater than a certain threshold percentage of the property or if there is an abandonment of the legal non-conforming use for a requisite period. In some cases, the related borrower has obtained law and ordinance insurance to cover additional costs that result from rebuilding the mortgaged property in accordance with current zoning requirements. However, if as a result of the applicable zoning laws the rebuilt improvements are smaller or less attractive to tenants than the original improvements, or the prior use can no longer be continued, the resulting loss in income will generally not be covered by law and ordinance insurance.
If the current use of a mortgaged property is no longer permitted under current zoning rules, the borrower may have obtained zoning protection insurance, which insurance will generally reimburse the lender for the difference between (i) the mortgage loan balance on the date of damage loss to the mortgaged property from an insured peril and (ii) the total collectible insurance proceeds at the time of the damage to the mortgaged property if such mortgaged property cannot be rebuilt to its former use due to new zoning ordinances.
In addition, certain of the mortgaged properties may be subject to certain restrictions and/or operational requirements imposed pursuant to restrictive covenants, reciprocal easement agreements or operating agreements, historical landmark designations or zoning laws. For example:
· | With respect to the mortgaged property identified on Annex A-1 to this free writing prospectus as Sandalwood Portfolio, which secures a mortgage loan representing approximately 6.8% of the outstanding pool balance as of the cut-off date, the Brandon Oaks, Lakeshire Place, Oaks of Northgate, Sugar Tree Apartments and Sundance Apartments mortgaged properties are subject to certain Land Use Restriction Agreements (“LURAs”) and Master Land Use Restriction Agreements (“MLURAs”) which run with the land and place certain rent restrictions on the mortgaged properties. The LURAs require a certain amount of units to be leased to low income tenants (less than 80% of the area’s median income) and to very low income tenants (less than 50% of area median income), and the MLURAs are designed to govern occupancy requirements related to low income occupants on a portfolio basis. The LURAs and MLURAs are subject to annual adjustment based upon HUD’s revised income limits for the applicable area. The LURAs may terminate upon (i) a total casualty or condemnation of the applicable mortgaged property, (ii) the lender’s foreclosure proceedings or other exercise of the lender’s remedies under the mortgage, or (iii) the later of 40 years from the date of execution of the LURA or 50 years from the date the mortgaged property was initially occupied as a multifamily property. There are 523 units across five of the mortgaged properties that are subject to the LURAs; the remaining 759 units at these five mortgaged properties (59%) or 1,121 units at all seven mortgaged properties (68%) are not subject to LURAs. In addition, the Arlington Oaks mortgaged property is legal non-conforming as to use because the mortgaged property was built as a multifamily property prior to the current zoning change. This mortgaged property may be rebuilt as a multifamily property so long as not more than 50% of the fair market value of the mortgaged property is destroyed by a casualty. There is no zoning protection insurance, but in the event that the mortgaged property |
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cannot be rebuilt, according to the loan seller’s insurance consultant, there is expected to be sufficient proceeds to cover the related allocated loan amount. The loan documents provide for a non-recourse carveout for any loss due to the use of the Arlington Oaks mortgaged property failing to comply with all applicable legal requirements, including zoning laws. | ||
· | With respect to the mortgaged property identified on Annex A-1 to this free writing prospectus as Hotel deLuxe, which secures a mortgage loan representing approximately 3.5% of the outstanding pool balance as of the cut-off date, the mortgaged property was added to the list of National Register of Historic Places in 2007. Because of this historic landmark status, any alteration to the exterior historical elements of the building requires Historic Resource Review, which is outlined in the Portland Zoning Code. |
· | With respect to the mortgaged property identified on Annex A-1 to this free writing prospectus as Cookie Factory Lofts, which secures a mortgage loan representing approximately 2.5% of the initial outstanding pool balance as of the cut-off date, the mortgaged property is listed on the National Register of Historic Places. The listing subjects the mortgaged property to restrictions limiting the borrower’s right to make structural modifications to the building inconsistent with the Department of the Interior’s standards for rehabilitation of historic structures. In addition, any structural modifications at the mortgaged property during the five year vesting period for the federal historic rehabilitation credits, which began with the date the rehabilitated structure was placed in service, requires the consent of Sherwin Williams as allocatee of the federal historic credits. |
Such use restrictions could include, for example, limitations on the use or character of the improvements or the properties, limitations affecting noise and parking requirements, among other things, and limitations on borrowers’ rights to operate certain types of facilities within a prescribed radius. Furthermore, certain mortgaged properties may be located on or near wetlands, which may limit future construction or renovation activities at a mortgaged property. These limitations could adversely affect the ability of the related borrower to lease the mortgaged property on favorable terms, thus adversely affecting such borrower’s ability to fulfill its obligations under the related mortgage loan. See “—Some Mortgaged Properties May Not Be Readily Convertible to Alternative Uses” and“—Condominium Properties Have Special Risks” in this free writing prospectus.
Risks Related to Litigation and Condemnation
There may be pending or threatened legal proceedings against the borrowers and managers of the mortgaged properties and their respective affiliates related to the business of or arising outside the ordinary business of the borrowers, managers and affiliates, which litigation or proceedings could cause a delay or inability in the related borrower’s or loan sponsor’s ability to meet its obligations under the related mortgage loan or otherwise in respect of the related mortgaged property or threaten a loan sponsor’s financial condition or control of the related borrower. Such litigation could have a material adverse effect upon the related mortgage loans and could cause a delay in the distributions on your certificates or a mortgage loan default. Therefore, we cannot assure you that this type of litigation will not have a material adverse effect on your certificates.
From time to time, there may be condemnations pending or threatened against one or more of the mortgaged properties securing the mortgage loans. The proceeds payable in connection with a total condemnation may not be sufficient to restore the related mortgaged property or to satisfy the remaining indebtedness of the related mortgage loan. The occurrence of a partial condemnation may have a material adverse effect on the continued use of, or income generation from, the affected mortgaged property. Therefore, we cannot assure you that the occurrence of any condemnation will not have a negative impact upon distributions on your certificates. See “—Prior Bankruptcies, Defaults or Other Proceedings May Be Relevant to Future Performance” below.
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Prior Bankruptcies, Defaults or Other Proceedings May Be Relevant to Future Performance
Certain of the borrowers, principals of borrowers, guarantors, property managers and affiliates thereof are or have been a party to bankruptcy proceedings, mortgage loan defaults and restructurings, discounted payoffs, foreclosure proceedings or deed-in-lieu of foreclosure transactions, or other material proceedings (including criminal proceedings) in the past. For example, in addition to any litigation issues discussed in “—Risks Related to Litigation and Condemnation” above, with respect to the top 20 mortgage loans, we are aware of the following loan sponsors and/or non-recourse carveout guarantors that currently are, or in the past 10 years have been, a party to mortgage loan defaults and restructurings, discounted payoffs, foreclosure proceedings or deed-in-lieu of foreclosure transactions:
· | With respect to the mortgaged property identified on Annex A-1 to this free writing prospectus as Green Valley Corporate Center, which secures a mortgage loan representing approximately 2.9% of the outstanding pool balance as of the cut-off date, the related loan sponsor previously sponsored real estate projects that became the subject of foreclosure proceedings, a deed-in-lieu of foreclosure proceeding, a loan restructuring or other material proceedings relating to loan defaults between 2009 and 2011. In connection with a commercial loan that was the subject of a foreclosure proceeding in 2014, the lender is pursuing a deficiency judgment suit against the related borrower and carveout guarantors, for a deficiency in the amount of $5,835,000. The borrower and carveout guarantors filed a counterclaim, alleging a cause of action for bad faith, which survived the lender’s motion to dismiss. Discovery in the suit, which is in the U.S. District Court of Nevada, has concluded, and various pre-trial motions are pending before the presiding magistrate and district court judge. No trial date is currently scheduled. |
· | In the case of the mortgaged property identified on Annex A-1 to this free writing prospectus as Village Square at Kiln Creek, which secures a mortgage loan representing approximately 2.2% of the outstanding pool balance as of the cut-off date, the sponsor is in default with respect to a loan securing a shopping center located in Richmond, Virginia. |
Other than as listed above, we are not aware of any borrower or principal of any borrower that has filed (or a sponsor that has caused an entity under its control to file) for bankruptcy protection within the last ten years. In some cases, this analysis is limited to equity owners that have at least a 20% or greater interest in the borrower due to the difficulty of confirming, in some instances, the identity of equity owners with a less than 20% interest in the related borrower.
In addition, we are aware of the following borrowers, loan sponsors, guarantors, property managers or affiliates thereof that have been involved in other material legal proceedings in the past:
· | With respect to the mortgaged property identified on Annex A-1 to this free writing prospectus as Chase Park, which secures a mortgage loan representing approximately 2.9% of the outstanding pool balance as of the cut-off date, Neil Kadisha, one of the non-recourse carveout guarantors, was required to pay a $100,000,000 judgment awarded in 2006 in a civil action filed by the beneficiaries of a trust established for the benefit of the widow and children of a friend of Mr. Kadisha, of which Mr. Kadisha was trustee. The civil action included claims of breach of trust and breach of duty of loyalty. The judgment included $5,000,000 of punitive damages, based on evidence that Mr. Kadisha misappropriated trust assets and concealed his actions. The case was on appeal until late 2010, and the judgment was paid in 2011. |
· | With respect to the portfolios of mortgaged properties identified on Annex A-1 to this free writing prospectus as GSP MHP Portfolio I and Brookhaven MHP, which secure mortgage loans representing approximately 1.9% and 0.8%, respectively, of the outstanding pool balance as of the cut-off date, Frank T. Perano, the non-recourse carve-out guarantor, was the subject of an action brought by the federal Environmental Protection Agency (“EPA”) and Pennsylvania Department of Environmental Protection (“PADEP”) for 5,285 alleged violations across a portfolio of 72 manufactured housing communities (including all of the mortgaged properties that secure the above referenced mortgage loans) dating from 2006 through 2012, including violations of the |
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Clean Water Act and the Safe Drinking Water Act. In 2012, Mr. Perano entered into a Consent Decree which included, among other things, a civil penalty of $1,339,000, a complete, three-phase environmental audit of all 72 properties and a re-piping of the Cedar Manor mortgaged property. All terms of the Consent Decree have either been completed or are underway, and no violations have been reported at the affected properties since 2012. Additionally, in 2012, Mr. Perano was charged by the Pennsylvania Office of the Attorney General with six counts of willful misconduct and tampering with public records in connection with activities at three properties (none of which are the mortgaged properties). Upon further review, the Pennsylvania Office of the Attorney General dropped the tampering with public records charges and reduced the remaining charges to misdemeanors, to which Mr. Perano pled guilty, paid a fine of $75,000 and served one year’s probation. |
In addition, in some cases, a mortgage loan refinanced (or provided acquisition financing to) a prior loan that was in default, restructured in connection with a default, paid off at a discount, or the subject of a foreclosure proceeding. For example:
· | With respect to the mortgaged property identified on Annex A-1 to this free writing prospectus as Shops at Randall Road, which secures a mortgage loan representing approximately 1.0% of the outstanding pool balance as of the cut-off date, the mortgaged property was previously encumbered by a $7,500,000 loan (included in the CSFB 2005-C5 securitization) with a June 2015 maturity date. The prior loan went into special servicing following a maturity default. The mortgage loan financed the borrower’s acquisition of the mortgaged property. |
· | With respect to the mortgaged property identified on Annex A-1 to this free writing prospectus as 4001 North Lincoln, which secures a mortgage loan representing approximately 0.3% of the outstanding pool balance as of the cut-off date, the mortgage loan refinanced a prior mortgage loan shortly after its maturity. Although the prior loan had matured, the prior lender was aware of the anticipated refinancing and did not call a default or exercise any remedies. The prior loan was paid off in full with the proceeds of such mortgage loan, without any default-related penalties. |
In addition, borrowers, principals of borrowers, property managers and affiliates thereof may, in the future, be involved in bankruptcy proceedings, foreclosure proceedings or other material proceedings (including criminal proceedings). There can be no assurance that any such proceedings will not negatively impact a borrower’s or loan sponsor’s ability to meet its obligations under the related mortgage loan. Such proceedings could have a material adverse effect upon distributions on your certificates.
If a borrower or a principal of a borrower or an affiliate of the foregoing has been a party to a bankruptcy, foreclosure or other proceeding or has been convicted of a crime in the past, we cannot assure you that the borrower or principal will not be more likely than other borrowers or principals to avail itself or cause a borrower to avail itself of its legal rights, under the federal bankruptcy code or otherwise, in the event of an action or threatened action by the mortgagee or its servicer to enforce the related mortgage loan documents, or otherwise conduct its operations in a manner that is in the best interests of the lender and/or the mortgaged property. We cannot assure you that any such proceedings or actions will not have a material adverse effect upon distributions on your certificates.
Often it is difficult to confirm the identity of owners of 20% or less of the equity in a borrower, which means that past issues may not be discovered as to such owners.
Risks Relating to Costs of Compliance with Applicable Laws and Regulations
A borrower may be required to incur costs to comply with various existing and future federal, state or local laws and regulations applicable to the related mortgaged property, such as zoning laws and the Americans with Disabilities Act of 1990, as amended, which requires all public accommodations to meet certain federal requirements related to access and use by persons with disabilities. See “Certain Legal Aspects of Mortgage Loans—Americans with Disabilities Act” in the prospectus. The expenditure of these costs or the imposition of injunctive relief, penalties or fines in connection with the borrower’s
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noncompliance could negatively impact the borrower’s cash flow and, consequently, its ability to pay its mortgage loan.
Risks Related to Conflicts of Interest
Potential Conflicts of Interest of the Master Servicer and the Special Servicer
The pooling and servicing agreement provides that the mortgage loans are required to be administered in accordance with the servicing standard without regard to ownership of any certificate by the master servicer or special servicer or any of their respective affiliates. See “The Pooling and Servicing Agreement—Servicing of the Mortgage Loans and Serviced Loan Combinations;Collection of Payments” in this free writing prospectus.
Notwithstanding the foregoing, the master servicer, a subservicer, the special servicer or any of their respective affiliates may have interests when dealing with the mortgage loans that are in conflict with those of holders of the certificates, especially if the master servicer, a subservicer, the special servicer or any of their respective affiliates holds certificates or companion loans, or has financial interests in, or other financial dealings with, a borrower or a loan sponsor. Each of these relationships may create a conflict of interest. For instance, if the special servicer or its affiliate holds a subordinate class of certificates, the special servicer might seek to reduce the potential for losses allocable to those certificates from the mortgage loans by deferring acceleration in hope of maximizing future proceeds. However, that action could result in less proceeds to the issuing entity than would be realized if earlier action had been taken. In general, no servicer is required to act in a manner more favorable to the certificates or any particular class of certificates.
Each of the master servicer and the special servicer services and is expected to continue to service, in the ordinary course of its business, existing and new loans for third parties, including portfolios of loans similar to the mortgage loans. The real properties securing these other loans may be in the same markets as, and compete with, certain of the mortgaged properties securing the mortgage loans. Consequently, personnel of the master servicer or special servicer, as applicable, may perform services, on behalf of the issuing entity, with respect to the mortgage loans at the same time as they are performing services, on behalf of other persons, with respect to other mortgage loans secured by properties that compete with the mortgaged properties securing the mortgage loans. This may pose inherent conflicts for the master servicer or the special servicer.
Each of the foregoing relationships should be considered carefully by you before you invest in any offered certificates.
Special Servicer May Be Directed To Take Actions
In connection with the servicing of the specially serviced loans, the special servicer may, at the direction of the directing holder, take actions with respect to the specially serviced loans that could adversely affect the holders of some or all of the classes of certificates. The directing holder (except, with respect to any loan combination, to the extent the directing holder is the holder of a related companion loan) will be controlled by the controlling class certificateholders. The directing holder may have interests in conflict with those of all or some of the other certificateholders. As a result, it is possible that the directing holder may influence the special servicer to take actions that conflict with the interests of certain classes of the certificates. However, the special servicer is not permitted to take actions that are prohibited by law or violate the servicing standard or the terms of the mortgage loan documents.
In addition, except as limited by certain conditions described under “The Servicers—Replacement of the Special Servicer,” with respect to each mortgage loan (other than non-serviced mortgage loans and excluded mortgage loans) and serviced loan combination, for so long as a Control Termination Event is not continuing, the special servicer may be removed without cause by the directing holder, and, for so long as a Control Termination Event is continuing, the special servicer may be removed in accordance with procedures set forth under “The Servicers—Replacement of the Special Servicer” without cause at
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the direction of the holders of certificates (other than the Class X-A, Class X-B, Class X-C, Class X-D, Class X-E, Class X-F, Class V, Class R and Class LRcertificates) (i) upon receipt of approval by certificateholders evidencing at least 75% of a quorum of certificateholders, which is the holders of certificates evidencing at least 75% of the aggregate voting rights (taking into account the application of any appraisal reduction amounts to notionally reduce the certificate balances of the certificates) of the certificates (other than the Class X-A, Class X-B, Class X-C, Class X-D, Class X-E, Class X-F, Class V, Class R and Class LR certificates) or (ii) evidencing more than 50% of each class of “non-reduced certificates” (each class of certificates (other than the Class X-A, Class X-B, Class X-C, Class X-D, Class X-E, Class X-F, Class V, Class R and Class LRcertificates) outstanding that has not been reduced to less than 25% of its initial certificate balance through the application of appraisal reduction amounts and realized losses). See “The Pooling and Servicing Agreement—The Directing Holder,” and “The Servicers—Replacement of the Special Servicer” in this free writing prospectus. With respect to the NMS Los Angeles Multifamily Portfolio mortgage loan, see “Description of the Mortgage Pool—Loan Combinations—The NMS Los Angeles Multifamily Portfolio Loan Combination” in this free writing prospectus. It is expected that RREF II CMBS AIV, LP, an affiliate of the special servicer, will be the initial directing holder with respect to each mortgage loan (other than any non-serviced mortgage loan or excluded mortgage loan) and serviced loan combination. In addition, if any mortgage loan becomes an “excluded controlling class mortgage loan” (i.e., a mortgage loan or loan combination with respect to which the controlling class representative or any controlling class certificateholder is a borrower party), the controlling class representative or any controlling class certificateholder that is a borrower party (each, an “excluded controlling class holder”) will not be entitled to have access to any related “excluded information”, including any asset status reports, final asset status reports or any summaries related thereto (and any other information identified in the pooling and servicing agreement), with respect to such excluded controlling class mortgage loan. Although the pooling and servicing agreement will require (i) each excluded controlling class holder to certify that it acknowledges and agrees that it is prohibited from accessing and reviewing (and it agrees not to access and review) any related excluded information and (ii) the controlling class representative or any controlling class certificateholder that is not an excluded controlling class holder to certify and agree that they will not share any such excluded information with any excluded controlling class holder, we cannot assure you that such excluded controlling class holders will not access, obtain, review and/or use, or the controlling class representative or any controlling class certificateholder that is not an excluded controlling class holder will not share with such excluded controlling class holder, such related excluded information in a manner that adversely impacts your certificates.
In addition, in certain circumstances, following a control termination event, in each case, as described under “The Pooling and Servicing Agreement—The Operating Advisor” in this free writing prospectus, the special servicer will be required to consult with the operating advisor and, in addition, the operating advisor may recommend the removal or replacement of the special servicer if the operating advisor determines that the special servicer is not performing its duties as required under the pooling and servicing agreement or is otherwise not acting in accordance with the servicing standard. As a result, it is possible that the directing holder or the operating advisor may influence the special servicer to take actions that conflict with the interests of certain classes of the certificates. However, the special servicer is not permitted to take actions that are prohibited by law or violate the servicing standard or the terms of the mortgage loan documents.
The special servicer may enter into one or more arrangements with the controlling class representative, a controlling class certificateholder, other certificateholders or a companion loan holder (or an affiliate or a third-party representative of one or more of the preceding) or any person who has the right to replace the special servicer to provide for a discount and/or revenue sharing with respect to certain of the special servicer compensation in consideration of, among other things, the appointment (or continuance) of the special servicer in such capacity under the pooling and servicing agreement and limitations on the right of such person to replace the special servicer in such capacity.
You will be acknowledging and agreeing, by your purchase of certificates, that the directing holder: (i) may take or refrain from taking actions that favor the interests of the directing holder over the certificateholders; (ii) may have special relationships and interests that conflict with the interests of the
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certificateholders and (iii) will not be liable by reason of its having so acted or refrained from acting solely in the interests of the directing holder and that no certificateholder may take any action against the directing holder or any of its officers, directors, employees, principals or agents as a result of such a special relationship or conflict.
Potential Conflicts of Interest of the Operating Advisor
Park Bridge Lender Services LLC, an indirect wholly-owned subsidiary of Park Bridge Financial LLC, has been appointed as the initial operating advisor. See “The Operating Advisor” in this free writing prospectus. With respect to each mortgage loan (other than any non-serviced mortgage loan) or serviced loan combination, if a Control Termination Event has occurred and is continuing, the operating advisor will be required to consult with the special servicer with respect to certain actions of the special servicer. Additionally, with respect to each mortgage loan (other than any non-serviced mortgage loan) or serviced loan combination, if a Control Termination Event has occurred and is continuing, the master servicer or the special servicer, as applicable, will be required to use commercially reasonable efforts consistent with the servicing standard to collect an operating advisor consulting fee from the related borrower in connection with any major decision, to the extent not prohibited by the related mortgage loan documents. The operating advisor is required to act solely on behalf of the issuing entity, in the best interest of, and for the benefit of, the certificateholders (as a collective whole as if such certificateholders constituted a single lender). See “The Pooling and Servicing Agreement—The Operating Advisor” in this free writing prospectus.
Notwithstanding the foregoing, the operating advisor and its affiliates may have interests that are in conflict with those of certificateholders, especially if the operating advisor or any of its affiliates holds certificates issued in this offering or another offering, or acts as advisor to the owners of any such certificates, or has financial interests in or other financial dealings with a borrower or a parent of a borrower. Furthermore, affiliates of the operating advisor may, from time to time, represent borrowers of loans that are not assets of the trust in restructuring discussions with various special servicers of commercial mortgage securitization transactions (including the special servicer under the pooling and servicing agreement for this transaction) where Park Bridge Lender Services LLC is not the operating advisor. Each of these relationships may create a conflict of interest.
Additionally, Park Bridge Lender Services LLC, or its affiliates, in the ordinary course of their business, may in the future (a) perform for third parties contract underwriting services and advisory services as well as service or specially service mortgage loans and (b) acquire mortgage loans for their own account, including, in each such case, mortgage loans similar to the mortgage loans that will be included in the issuing entity. The real properties securing these other mortgage loans may be in the same markets as, and compete with, certain of the real properties securing the mortgage loans that will be included in the issuing entity. Consequently, personnel of Park Bridge Lender Services LLC may perform services, on behalf of the issuing entity, with respect to the mortgage loans held by the issuing entity at the same time as they are performing services with respect to, or while Park Bridge Lender Services LLC or its affiliates are holding, other mortgage loans secured by properties that compete with the mortgaged properties securing the mortgage loans held by the issuing entity. This may pose inherent conflicts for Park Bridge Lender Services LLC.
Potential Conflicts of Interest of the Underwriters and Their Affiliates
The activities of the underwriters and their respective affiliates may result in certain conflicts of interest. The underwriters and their respective affiliates may retain, or own in the future, certificates of various classes, and any voting rights allocable to those certificates could be exercised by them in a manner that could adversely impact the offered certificates. Any of the underwriters and their affiliates may invest or take long or short positions in securities or instruments, including the offered certificates, that may be different from your position as an investor in your certificates. If that were to occur, the interests of that underwriter or its affiliates may not be aligned with your interests in the offered certificates you acquire.
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The underwriters and their respective affiliates include broker-dealers whose business includes executing securities and derivative transactions on their own behalf as principals and on behalf of clients. Accordingly, the underwriters and their respective affiliates and various clients acting through them from time to time buy, sell or hold securities or other instruments, which may include one or more classes of the offered certificates, and do so without consideration of the fact that the underwriters acted as underwriters for the offered certificates. Such transactions may result in the underwriters and their respective affiliates and/or their clients having long or short positions in such instruments. Any such short positions will increase in value if the related securities or other instruments decrease in value. Further, the underwriters and their respective affiliates may (on their own behalf as principals or for their clients) enter into credit derivative or other derivative transactions with other parties pursuant to which they sell or buy credit protection with respect to one or more classes of the offered certificates. The positions of the underwriters and their respective affiliates or their clients in such derivative transactions may increase in value if the offered certificates experience losses or decrease in value. In conducting such activities, none of the underwriters or their respective affiliates will have any obligation to take into account the interests of the certificateholders or any possible effect that such activities could have on them. The underwriters and their respective affiliates and clients acting through them may execute such transactions, modify or terminate such derivative positions and otherwise act with respect to such transactions, and may exercise or enforce, or refrain from exercising or enforcing, any or all of their rights and powers in connection therewith, without regard to whether any such action might have an adverse effect on the offered certificates or the certificateholders. Additionally, none of the underwriters or their respective affiliates will have any obligation to disclose any of these securities or derivatives transactions to you in your capacity as a certificateholder.
In addition, the underwriters and their respective affiliates will have no obligation to monitor the performance of the offered certificates or the actions of the master servicer, the special servicer, the certificate administrator, the operating advisor or the trustee and will have no authority to advise the master servicer, the special servicer, the certificate administrator, the operating advisor or the trustee or to direct their actions.
Furthermore, the underwriters and their respective affiliates may have ongoing relationships with, render services to, and engage in transactions with the borrowers, the loan sponsors, tenants at the mortgaged properties and their respective affiliates, which relationships and transactions may create conflicts of interest between the underwriters and their respective affiliates, on the one hand, and the issuing entity, on the other hand. German American Capital Corporation and its affiliates are playing several roles in this transaction. Deutsche Bank Securities Inc., an underwriter, is an affiliate of Deutsche Mortgage & Asset Receiving Corporation, the depositor, and German American Capital Corporation, a mortgage loan seller and a sponsor. Cantor Fitzgerald & Co. and CastleOak Securities, L.P., two of the underwriters, are affiliates of Cantor Commercial Real Estate Lending, L.P., a mortgage loan seller and sponsor, and Berkeley Point Capital LLC, a Delaware limited liability company. KeyBanc Capital Markets Inc., an underwriter, is an affiliate of KeyBank National Association, a mortgage loan seller, a sponsor and a primary servicer. See “Summary—Relevant Parties and Dates—Affiliates and Other Relationships” and “Certain Relationships and Related Transactions” in this free writing prospectus and “Method of Distribution (Underwriter Conflicts of Interest)”in the final prospectus supplement for a description of certain affiliations and relationships between the underwriters and other participants in this offering.
Each of the foregoing relationships should be considered carefully by you before you invest in any certificates.
Potential Conflicts of Interest in the Selection of the Underlying Mortgage Loans
RREF II CMBS AIV, LP (the “B-Piece Buyer”), the investor that is expected to purchase the Class E, Class F, Class G, Class H, Class X-D, Class X-E, Class X-F and Class V certificates and may purchase other certificates, was given the opportunity by the sponsors to perform due diligence on the mortgage loans originally identified by the sponsors for inclusion in the issuing entity, and to request the removal, re-sizing or change in the expected repayment dates or other features of some or all of the assets. The asset pool as originally proposed by the sponsors was adjusted based on some of these requests. In
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some cases, a sponsor may individually agree with the B-Piece Buyer to adjust the amount payable to such sponsor from the net sale proceeds of the certificates purchased by the B-Piece Buyer based on the particular characteristics of certain of its mortgage loans.
We cannot assure you that you or another investor would have made the same requests to modify the original pool as the B-Piece Buyer or that the final pool as influenced by the B-Piece Buyer’s feedback will not adversely affect the performance of your certificates and benefit the performance of the B-Piece Buyer’s certificates. Because of the differing subordination levels, the B-Piece Buyer has interests that may, in some circumstances, differ from those of purchasers of other classes of certificates, and may desire a portfolio composition that benefits the B-Piece Buyer but that does not benefit other investors. In addition, the B-Piece Buyer may enter into hedging or other transactions or otherwise have business objectives that also could cause its interests with respect to the asset pool to diverge from those of other purchasers of the certificates. The B-Piece Buyer performed due diligence solely for its own benefit. The B-Piece Buyer has no liability to any person or entity for conducting its due diligence. The B-Piece Buyer is not required to take into account the interests of any other investor in the certificates in exercising remedies or voting or other rights in its capacity as owner of the certificates it holds or in making requests or recommendations to the sponsors as to the selection of the mortgage loans and the establishment of other transaction terms. Investors are not entitled to rely on in any way the B-Piece Buyer’s acceptance of a mortgage loan. The B-Piece Buyer’s acceptance of a mortgage loan does not constitute and may not be construed as an endorsement of such mortgage loan, the underwriting for such mortgage loan or the originator of such mortgage loan.
The B-Piece Buyer or its designee will constitute the initial directing holder with respect to the mortgage loans (other than non-serviced mortgage loans and excluded mortgage loans) and serviced loan combinations and thus would have certain rights to direct and consult with the special servicer as described under “The Pooling and Servicing Agreement—The Directing Holder” in this free writing prospectus.
Because the incentives and actions of the B-Piece Buyer may, in some circumstances, differ from or be adverse to those of purchasers of other classes of certificates, you are advised and encouraged to make your own investment decision based on a careful review of the information set forth in this free writing prospectus and your own view of the asset pool.
Related Parties May Acquire Certificates or Experience Other Conflicts
Related Parties’ Ownership of Certificates May Impact the Servicing of the Mortgage Loans and Affect Payments under the Certificates. Affiliates of the depositor, the mortgage loan sellers, the master servicer or the special servicer may purchase a portion of the certificates. The purchase of certificates could cause a conflict between the master servicer’s or the special servicer’s duties to the issuing entity under the pooling and servicing agreement and its interests as a holder of a certificate. In addition, as described under “The Servicers—Replacement of the Special Servicer,” the directing holder generally has certain rights to remove the special servicer (but see the discussion with respect to the removal of the special servicer with respect to certain mortgage loans that are part of a loan combination under “Description of the Mortgage Pool—Loan Combinations” in this free writing prospectus) and appoint a successor, which may be an affiliate of such holder. However, the pooling and servicing agreement provides that the mortgage loans are required to be administered in accordance with the servicing standard without regard to ownership of any certificate by the master servicer, the special servicer or any of their affiliates. See “The Pooling and Servicing Agreement—Servicing of the Mortgage Loans and Serviced Loan Combinations;Collection of Payments” in this free writing prospectus.
Additionally, the master servicer or the special servicer may, especially if it or an affiliate holds a subordinate certificate, or has financial interests in or other financial dealings with a borrower or loan sponsor under any of the mortgage loans, have interests when dealing with the mortgage loans that are in conflict with those of holders of the certificates offered in this free writing prospectus. In addition, for instance, if the special servicer or an affiliate holds a subordinate certificate, the special servicer could seek to reduce the potential for losses allocable to those certificates from a troubled mortgage loan by
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deferring acceleration in hope of maximizing future proceeds. The special servicer might also seek to reduce the potential for such losses by accelerating a mortgage loan earlier than necessary in order to avoid advance interest or additional expenses of the issuing entity. Either action could result in less proceeds to the issuing entity than would be realized if alternate action had been taken. In general, the servicers are not required to act in a manner more favorable to the certificates offered in this free writing prospectus or any particular class of certificates that are subordinate to the certificates offered in this free writing prospectus.
Conflicts of Interest May Arise in the Ordinary Course of the Servicers’ Businesses in Servicing the Mortgage Loans. The master servicer and special servicer service and will, in the future, service, in the ordinary course of their respective businesses, existing and new mortgage loans for third parties, including portfolios of loans similar to the mortgage loans that will be included in the issuing entity. The real properties securing these other mortgage loans may be in the same markets as, and compete with, certain of the real properties securing the mortgage loans that will be included in the issuing entity. Consequently, personnel of the master servicer and the special servicer may perform services, on behalf of the issuing entity, with respect to the mortgage loans at the same time as they are performing services, on behalf of other persons, with respect to other mortgage loans secured by properties that compete with the mortgaged properties securing the mortgage loans. This may pose inherent conflicts for the master servicer or the special servicer.
Conflicts of Interest May Arise Due to the Activities of the Sponsors and their Respective Affiliates. The activities of the mortgage loan sellers or their affiliates may involve properties that are in the same markets as the mortgaged properties underlying the certificates. In such cases, the interests of such mortgage loan sellers or such affiliates may differ from, and compete with, the interests of the issuing entity, and decisions made with respect to those mortgaged properties may adversely affect the amount and timing of distributions with respect to the certificates. Conflicts of interest may arise between the issuing entity and a particular mortgage loan seller or its affiliates that engage in the acquisition, development, operation, financing and disposition of real estate if such mortgage loan seller acquires any certificates. In particular, if certificates held by a mortgage loan seller or an affiliate are part of a class that is or becomes the controlling class, the mortgage loan seller or its affiliate as a controlling class certificateholder would have the ability to influence certain actions of the special servicer under circumstances where the interests of the issuing entity conflict with the interests of the mortgage loan seller or its affiliates as acquirers, developers, operators, financers or sellers of real estate related assets.
Certain of the mortgage loans included in the issuing entity may have been refinancings of debt previously held by a mortgage loan seller or an affiliate of a mortgage loan seller, and/or the mortgage loan sellers or their affiliates may have or have had equity investments in the borrowers (or in the owners of the borrowers) under, or properties securing, certain of the mortgage loans to be included in the issuing entity. Each of the mortgage loan sellers and their affiliates have made and/or may make or have preferential rights to make loans to, or equity investments in, affiliates of the borrowers under the mortgage loans or tenants (or their affiliates) at the mortgaged properties.
The sponsors and their affiliates (including certain of the underwriters) may benefit from this offering in a number of ways, some of which may be inconsistent with the interests of purchasers of the certificates. The sponsors will sell the mortgage loans to the depositor. To the extent unhedged or not completely hedged, these sales will reduce or eliminate the sponsor’s exposure to these mortgage loans by effectively transferring the sponsor’s exposure to the purchasers of the certificates. The sponsors and their affiliates will be compensated in an amount based on, among other things, the offering price of the certificates and the amount of proceeds received from the sale of the certificates to investors.
Furthermore, the sponsors and their affiliates may benefit from a completed offering of the certificates because the offering would establish a market precedent and a valuation data point for securities similar to the certificates, thus enhancing the ability of the sponsors and their affiliates to conduct similar offerings in the future and permitting them to write up, avoid writing down or otherwise adjust the fair value of the mortgage loans or other similar assets or securities held on their balance sheet.
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Each of the foregoing relationships should be considered carefully by you before you invest in any certificates.
Conflicts Between Property Managers and the Borrowers
A substantial number of the mortgaged properties are managed by property managers affiliated with the respective borrowers. In addition, substantially all of the property managers for the mortgaged properties (or their affiliates) manage or may in the future manage additional properties, including properties that may compete with the mortgaged properties. Affiliates of the managers, and certain of the managers themselves, also may own other properties, including competing properties. The managers of the mortgaged properties may accordingly experience conflicts of interest in the management of such mortgaged properties. See “—Risks Related to the Mortgage Loans—Risks Related to Tenants—Mortgaged Properties Leased to Borrowers or Borrower Affiliated Entities Also Have Risks” above for a description of conflicts between borrowers and affiliated tenants.
Conflicts Between Certificateholders and Holders of Companion Loans
With respect to the 11 Madison Avenue mortgage loan, representing approximately 7.5% of the outstanding pool balance as of the cut-off date, the related mortgaged property also secures fifteenpari passu companion loans and three related subordinate companion loans. The 11 Madison Avenue mortgage loan, its relatedpari passu companion loans and its related subordinate companion loans are being serviced pursuant to the MAD 2015-11MD trust and servicing agreement. The MAD 2015-11MD trust and servicing agreement provides for a servicing arrangement that is substantially similar in all material respects but not necessarily identical to that under the pooling and servicing agreement for this transaction. Certain decisions to be made with respect to the 11 Madison Avenue mortgage loan will require the approval of the parties specified in the related intercreditor agreement or the MAD 2015-11MD trust and servicing agreement. As a result, you will have less control over the servicing of the 11 Madison Avenue mortgage loan than you would have if such mortgage loan were being serviced by the master servicer and the special servicer pursuant to the terms of the pooling and servicing agreement for this transaction. See “Description of the Mortgage Pool—Loan Combinations—The 11 Madison Avenue LoanCombination” and “The Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loan” in this free writing prospectus.
With respect to the NMS Los Angeles Multifamily Portfolio mortgage loan, representing approximately 7.0% of the outstanding pool balance as of the cut-off date, the related mortgaged property also secures two additionalpari passu companion loans. As of the closing date, Cantor Commercial Real Estate Lending, L.P. or one of its affiliates (subject to any applicable financing arrangement) is expected to hold the NMS Los Angeles Multifamily Portfolio Note A-2 companion loan and the NMS Los Angeles Multifamily Portfolio Note A-3 companion loan, in the original principal amount of $30,000,000 and $25,000,000, respectively. The NMS Los Angeles Multifamily Portfolio Note A-1 is the controlling note in the NMS Los Angeles Multifamily Portfolio loan combination. See“Description of the Mortgage Pool—Loan Combinations—The NMS Los Angeles Multifamily Portfolio Loan Combination” in this free writing prospectus.
The interests of the holders of the related companion loans (or their designee) entitled to exercise various rights with respect to the servicing of the related mortgage loan and the related companion loan may conflict with the interests of, and its decisions may adversely affect, the holders of one or more classes of offered certificates. No certificateholder may take any action against any holder of a companion loan (or its designee) for having acted solely in its respective interest.
Other Potential Conflicts of Interest
The special servicer may enter into one or more arrangements with the directing holder, a controlling class certificateholder, a companion loan holder or any person with the right to appoint or remove and replace the special servicer to provide for a discount and/or revenue sharing with respect to certain of the special servicer compensation in consideration of, among other things, the appointment of such entity as
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special servicer under the pooling and servicing agreement and the related intercreditor agreement and limitations on such person’s right to replace the special servicer.
German American Capital Corporation, a sponsor and a mortgage loan seller, Deutsche Bank Securities Inc., an underwriter, and Deutsche Mortgage & Asset Receiving Corporation, the depositor, are affiliates of each other.
Cantor Commercial Real Estate Lending, L.P., a sponsor and mortgage loan seller, and Cantor Fitzgerald & Co. and CastleOak Securities, L.P., two of the underwriters, and Berkeley Point Capital LLC, a Primary Servicer, are affiliates of each other.
KeyBank National Association, a sponsor, mortgage loan seller and primary servicer, and KeyBanc Capital Markets Inc., an underwriter, are affiliates of each other.
Pursuant to a primary servicing agreement between KeyBank National Association, on the one hand, and Midland Loan Services, a Division of PNC Bank, National Association, on the other hand, KeyBank National Association will act as primary servicer with respect to the mortgage loans to be contributed to this securitization by KeyBank National Association. Such mortgage loans represent approximately 20.8% of the outstanding pool balance as of the cut-off date. KeyBank National Association will receive the primary servicing fee set forth on Annex A-1 for such mortgage loans.
Pursuant to a primary servicing agreement between Berkeley Point Capital LLC, an affiliate of Cantor Commercial Real Estate Lending, L.P., on the one hand, and Midland Loan Services, a Division of PNC Bank, National Association, on the other hand, Berkeley Point Capital LLC will act as primary servicer with respect to 3 mortgage loans identified on Annex A-1 to this free writing prospectus as NMS Los Angeles Multifamily Portfolio, GSP MHP Portfolio I and Brookhaven MHP, which secure mortgaged properties representing, in the aggregate, approximately 9.7% of the outstanding pool balance as of the cut-off date to be contributed to this securitization by Cantor Commercial Real Estate Lending, L.P., and will receive the primary servicing fee set forth on Annex A-1 for such mortgage loans.
IH Capital, LLC, which provides mortgage origination, underwriting, securitization and related consulting services to The Bank of New York Mellon, is an affiliate of Ironhound Management Company, LLC, which provides consulting services to borrowers.
Rialto Capital Advisors, LLC, the special servicer, is an affiliate of the entity that is expected to purchase the Class E, Class F, Class G, Class H, Class X-D, Class X-E, Class X-F and Class V certificates and may purchase other certificates and is expected to act as the initial directing holder with respect to each mortgage loan (other than any non-serviced mortgage loan or excluded mortgage loan) and serviced loan combination. Rialto Capital Advisors, LLC, which is acting as the special servicer, assisted RREF II CMBS AIV, LP, the B-Piece Buyer, with due diligence relating to the mortgage loans to be included in the mortgage pool.
Rialto Capital Advisors, LLC, the special servicer, is currently the servicer of, and an affiliate of Rialto Capital Advisors, LLC is the current holder of, a mezzanine loan secured by direct or indirect equity interests in the borrower under the mortgage loan secured by the mortgaged property identified on Annex A-1 to this free writing prospectus as Atlanta Multifamily Portfolio, representing approximately 4.8% of the outstanding pool balance as of the cut-off date, which mezzanine loan is described under “Description of the Mortgage Pool—Certain Terms and Conditions of the Mortgage Loans—Other Financing” in this free writing prospectus.
Pursuant to certain interim servicing agreements between German American Capital Corporation and certain of its affiliates, on the one hand, and Midland Loan Services, a Division of PNC Bank, National Association, on the other hand, Midland Loan Services, a Division of PNC Bank, National Association acts as interim servicer with respect to certain mortgage loans, including, prior to their inclusion in the issuing entity, 3 of the mortgage loans to be contributed to this securitization by German American Capital Corporation, representing approximately 3.2% of the outstanding pool balance as of the cut-off date.
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Pursuant to certain interim servicing agreements between German American Capital Corporation and certain of its affiliates, on the one hand, and KeyBank National Association, on the other hand, KeyBank National Association acts as interim servicer with respect to certain mortgage loans, including, prior to their inclusion in the issuing entity, 7 of the mortgage loans to be contributed to this securitization by German American Capital Corporation, representing approximately 19.2% of the outstanding pool balance as of the cut-off date.
Pursuant to certain interim servicing agreements between German American Capital Corporation and certain of its affiliates, on the one hand, and Wells Fargo Bank, National Association, on the other hand, Wells Fargo Bank, National Association acts as interim servicer with respect to certain mortgage loans, including, prior to their inclusion in the issuing entity, 9 of the mortgage loans to be contributed to this securitization by German American Capital Corporation, representing approximately 19.7% of the outstanding pool balance as of the cut-off date.
Pursuant to certain interim servicing agreements between The Bank of New York Mellon and certain of its affiliates, on the one hand, and Wells Fargo Bank, National Association, on the other hand, Wells Fargo Bank, National Association acts as interim servicer with respect to certain mortgage loans, including, prior to their inclusion in the issuing entity, 11 of the mortgage loans to be contributed to this securitization by The Bank of New York Mellon, representing approximately 18.2% of the outstanding pool balance as of the cut-off date.
Pursuant to certain interim servicing agreements between Cantor Commercial Real Estate Lending, L.P. and certain of its affiliates, on the one hand, and Midland Loan Services, a Division of PNC Bank, National Association, on the other hand, Midland Loan Services, a Division of PNC Bank, National Association acts as interim servicer with respect to certain mortgage loans, including, prior to their inclusion in the issuing entity, 3 of the mortgage loans to be contributed to this securitization by Cantor Commercial Real Estate Lending, L.P., representing approximately 3.3% of the outstanding pool balance as of the cut-off date.
Pursuant to certain interim servicing agreements between Cantor Commercial Real Estate Lending, L.P. and certain of its affiliates, on the one hand, and Wells Fargo Bank, National Association, on the other hand, Wells Fargo Bank, National Association acts as interim servicer with respect to certain mortgage loans, including, prior to their inclusion in the issuing entity, 2 of the mortgage loans to be contributed to this securitization by Cantor Commercial Real Estate Lending, L.P., representing approximately 2.4% of the outstanding pool balance as of the cut-off date, and interim custodian of the loan files for 8 of the mortgage loans that Cantor Commercial Real Estate Lending, L.P. will transfer to the depositor, representing approximately 15.4% of the outstanding pool balance as of the cut-off date.
Pursuant to a limited subservicing agreement between Berkeley Point Capital LLC, on the one hand, and Midland Loan Services, a Division of PNC Bank, National Association, on the other hand, Berkeley Point Capital LLC is expected to assume certain limited subservicing duties consisting of performing inspections and collecting financial statements with respect to 4 of the mortgage loans to be contributed to this securitization by Cantor Commercial Real Estate Lending, L.P., representing approximately 4.3% of the outstanding pool balance as of the cut-off date, and will receive a fee equal to 0.0200%per annum for each such mortgage loan.
Wells Fargo Bank, National Association, the trustee, certificate administrator, custodian, 17g-5 information provider, certificate registrar and authenticating agent for this transaction, is also a co-originator of the 11 Madison Avenue loan combination, the holder of the 11 Madison Avenue Non-StandalonePari Passu Companion Loans designated as Note A-3-C1 and Note A-3-C2 and is the certificate administrator and custodian under the MAD 2015-11MD trust and servicing agreement.
With respect to the 11 Madison Avenue mortgage loan, German American Capital Corporation or certain of its affiliates is expected to hold, as of the closing date, the 11 Madison Avenue Note A-1-C1, which is expected to be included in the COMM 2015-CCRE26 securitization, and the 11 Madison Avenue Note A-1-C3 companion loan.
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Risks Related to the Offered Certificates
Legal and Regulatory Provisions Affecting Investors Could Adversely Affect the Liquidity of the Offered Certificates
We make no representations as to the proper characterization of the offered certificates for legal investment, financial institution regulatory, financial reporting or other purposes, as to the ability of particular investors to purchase the offered certificates under applicable legal investment or other restrictions or as to the consequences of an investment in the offered certificates for such purposes or under such restrictions. We note that regulatory or legislative provisions applicable to certain investors may have the effect of limiting or restricting their ability to hold or acquire commercial mortgage-backed securities, which in turn may adversely affect the ability of investors in the offered certificates who are not subject to those provisions to resell their certificates in the secondary market. For example:
· | Articles 404 – 410 of the European Union Capital Requirements Regulation (Regulation (EU) No 575/2013) (“CRR”) applies, in general, to securitizations issued on or after January 1, 2011 as well as certain existing securitizations issued prior to that date where new assets are added or substituted after December 31, 2014. The CRR restricts credit institutions and investment firms regulated in Member States of the European Economic Area (“EEA”) and consolidated group affiliates thereof (each, an “Affected Investor”) from investing in a securitization (as defined by the CRR) unless an originator, sponsor or original lender in respect of that securitization has explicitly disclosed to the Affected Investor that it will retain, on an ongoing basis, a material net economic interest of not less than 5 percent in that securitization in the manner contemplated by Article 405 of the CRR. The CRR also requires that an Affected Investor be able to demonstrate that it has undertaken certain due diligence in respect of, amongst other things, the offered certificates it has acquired and the underlying exposures, and that procedures have been established for monitoring the performance of the underlying exposures on an on-going basis. Failure to comply with one or more of the requirements set out in the CRR may result in the imposition of a penal capital charge with respect to the investment made in the securitization by an Affected Investor. |
· | Article 17 of the European Union Alternative Investment Fund Managers Directive (Directive 2011/61/EU) (as supplemented by Section 5 of Commission Delegated Regulation (EU) No 231/2013) contains requirements similar to those set out in Articles 404 – 410 of the CRR and applies to EEA regulated alternative investment fund managers. Similar requirements are also scheduled to apply in the future to investment in securitizations by EEA regulated UCITS fund managers and EEA regulated insurance and reinsurance undertakings. For the purpose of this provision, all such requirements, together with the Articles 404 – 410 of the CRR, are referred to as the “Securitization Retention Requirements”. |
· | None of the sponsors, mortgage loan sellers or any other party to the transaction intends to retain a material net economic interest in the transaction in accordance with the Securitization Retention Requirements or take any other action (other than providing information relating to the offered certificates and the mortgage loans contained in this free writing prospectus and any other related offering document and any action that any such parties are required to take under the pooling and servicing agreement (including, without limitation, with respect to reporting under “The Pooling and Servicing Agreement – Reports to Certificateholders;Available Information”)), which may be required by investors for the purposes of their compliance with the Securitization Retention Requirements. This may have a negative impact on the regulatory capital position of Affected Investors and on the value and liquidity of the offered certificates in the secondary market. |
· | The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) enacted in the United States requires that federal banking agencies amend their regulations to remove reference to or reliance by national banks on credit agency ratings, including but not limited to those found in the federal banking agencies’ risk-based capital regulations. New regulations have been proposed, some of which have been adopted as final rules while others remain pending. Such regulations, when adopted and effective, may result in greater capital |
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charges to financial institutions that own commercial mortgage-backed securities, or otherwise adversely affect the attractiveness of investments in commercial mortgage-backed securities for regulatory purposes. |
· | The Issuing Entity will be relying on an exclusion or exemption under the Investment Company Act contained in Section 3(c)(5) of the Investment Company Act or Rule 3a-7 under the Investment Company Act, although there may be additional exclusions or exemptions available to the Issuing Entity. The Issuing Entity is being structured so as not to constitute a “covered fund” for purposes of Section 619 of the Dodd-Frank Act (such statutory provision together with such implementing regulations, the “Volcker Rule”). The Volcker Rule generally prohibits “banking entities” (which is broadly defined to include U.S. banks and bank holding companies and many non-U.S. banking entities, together with their respective subsidiaries and other affiliates) from (i) engaging in proprietary trading, (ii) acquiring or retaining an ownership interest in or sponsoring a “covered fund” and (iii) entering into certain relationships with such funds. The Volcker Rule became effective on July 21, 2012, and final regulations implementing the Volcker Rule were adopted on December 10, 2013. Conformance with the Volcker Rule and its implementing regulations is required by July 21, 2015 (subject to the possibility of up to two one-year extensions). In the interim, banking entities must make good-faith efforts to conform their activities and investments to the Volcker Rule. Under the Volcker Rule, unless otherwise jointly determined otherwise by specified federal regulators, a “covered fund” does not include an issuer that may rely on an exclusion or exemption from the definition of “investment company” under the Investment Company Act other than the exclusions contained in Section 3(c)(1) and Section 3(c)(7) of the Investment Company Act. The general effects of the Volcker Rule remain uncertain. Any prospective investor in the certificates, including a U.S. or foreign bank or a subsidiary or other affiliate thereof, should consult its own legal advisors regarding such matters and other effects of the Volcker Rule. |
· | The Financial Accounting Standards Board has adopted changes to the accounting standards for structured products. These changes, or any future changes, may affect the accounting for entities such as the issuing entity, could under certain circumstances require an investor or its owner generally to consolidate the assets of the issuing entity in its financial statements and record third parties’ investments in the issuing entity as liabilities of that investor or owner or could otherwise adversely affect the manner in which the investor or its owner must report an investment in the offered certificates for financial reporting purposes. |
· | For purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended, no class of offered certificates will constitute “mortgage related securities.” |
Accordingly, all prospective investors whose investment activities are subject to legal investment laws and regulations, regulatory capital requirements, or review by regulatory authorities should consult with their own legal, accounting and other advisors in determining whether, and to what extent, the offered certificates will constitute legal investments for them or are subject to investment or other restrictions, unfavorable accounting treatment, capital charges or reserve requirements. See “Legal Investment” in this free writing prospectus.
Your Yield May Be Adversely Affected By Prepayments Resulting From Earnout Reserves
With respect to certain mortgage loans, earnout escrows may have been established at origination, which funds may be released to the related borrower upon satisfaction of certain conditions. If such conditions with respect to any such mortgage loan are not satisfied, the amounts reserved in such escrows may be applied to the payment of the mortgage loan, which would have the same effect on the offered certificates as a prepayment of the mortgage loan, except that such application of funds would not be accompanied by any prepayment premium or yield maintenance charge. See “Annex B—Description of the Top 20 Mortgage Loans” to this free writing prospectus.
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Risks Related to Prepayments and Repurchases of Mortgage Loans
The yield to maturity on your certificates will depend, in significant part, upon the rate and timing of principal payments on the mortgage loans. For this purpose, principal payments include both voluntary prepayments, if permitted, and involuntary prepayments, such as prepayments resulting from casualty or condemnation of mortgaged properties, defaults by borrowers and subsequent liquidations, application of escrow amounts to the reduction of a mortgage loan’s principal balance, or repurchases upon a mortgage loan seller’s breach of representations or warranties or failure to deliver certain required loan documents, the exercise of a purchase option by a mezzanine lender, if applicable, or a companion loan holder, or purchases of defaulted mortgage loans. See “—Risks Related to the Mortgage Loans—Risks Related to Additional Debt,” “Description of the Mortgage Pool—Loan Combinations,” “—Additional Mortgage Loan Information—Definitions,” “—Certain Terms and Conditions of the Mortgage Loans—Performance Escrows and Letters of Credit” and “—Certain Terms and Conditions of the Mortgage Loans—Other Financing,” and “The Pooling and Servicing Agreement—Representations and Warranties;Repurchase;Substitution” in this free writing prospectus.
In addition, although the borrowers of the anticipated repayment date loans may have certain incentives to prepay such mortgage loans on their anticipated repayment dates, we cannot assure you that the borrowers will be able to prepay the anticipated repayment date loans on their anticipated repayment dates. The failure of a borrower to prepay an anticipated repayment date loan on its anticipated repayment date will not be an event of default under the terms of such mortgage loans, and, pursuant to the terms of the pooling and servicing agreement, neither the related master servicer nor the special servicer will be permitted to take any enforcement action with respect to a borrower’s failure to pay interest at an increased rate, other than requests for collection, until the scheduled maturity of the respective anticipated repayment date loan; provided that the related master servicer or the special servicer, as the case may be, may take action to enforce the trust’s right to apply excess cash flow to principal in accordance with the terms of the documents of the anticipated repayment date loans. See “—Risks Related to the Mortgage Loans—Borrower May Be Unable To Repay the Remaining Principal Balance on the Maturity Date or Anticipated Repayment Date and Longer Amortization Schedules and Interest-Only Provisions May Increase Risk” in this free writing prospectus.
The investment performance of your certificates may vary materially and adversely from your expectations if the actual rate of prepayment on the mortgage loans is higher or lower than you anticipate.
Any changes in the weighted average lives of your certificates may adversely affect your yield. Prepayments resulting in a shortening of weighted average lives of your certificates may be made at a time of low interest rates when you may be unable to reinvest the resulting payment of principal on your certificates at a rate comparable to the effective yield to maturity anticipated by you in making your investment in the offered certificates, while delays and extensions resulting in a lengthening of those weighted average lives may occur at a time of high interest rates when you may have been able to reinvest principal payments that would otherwise have been received by you at higher rates.
In addition, the extent to which prepayments on the mortgage loans in the issuing entity ultimately affect the weighted average life of your certificates will depend on the terms of those certificates, more particularly:
· | a class of certificates that entitles the holders of those certificates to a disproportionately larger share of the prepayments on the mortgage loans increases the “call risk” or the likelihood of early retirement of that class if the rate of prepayment is relatively fast; and |
· | a class of certificates that entitles the holders of the certificates to a disproportionately smaller share of the prepayments on the mortgage loans increases the likelihood of “extension risk” or an extended average life of that class if the rate of prepayment is relatively slow. |
See “Yield and Maturity Considerations” in this free writing prospectus.
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Voluntary prepayments under certain mortgage loans require payment of a yield maintenance charge or prepayment premium unless the prepayment is made within a specified number of months of the stated maturity date or the anticipated repayment date, as applicable. See “Description of the Mortgage Pool—Certain Terms and Conditions of the Mortgage Loans—Prepayment Provisions” and “—Property Releases” in this free writing prospectus. Nevertheless, there is no assurance that the related borrowers will be deterred from prepaying their mortgage loans due to the existence of a yield maintenance charge or a prepayment premium. There is no assurance that voluntary or involuntary prepayments will not occur. The rate at which voluntary prepayments occur on the mortgage loans will be affected by a variety of factors, including:
· | the terms of the mortgage loans; |
· | the length of any prepayment lock-out period; |
· | the level of prevailing interest rates; |
· | the availability of mortgage credit; |
· | the applicable yield maintenance charges or prepayment premiums and the extent to which the related mortgage loan terms may be practically enforced; |
· | the related master servicer’s or special servicer’s ability to enforce those charges or premiums; |
· | the occurrence of casualties or natural disasters; and |
· | economic, demographic, tax, legal or other factors. |
Generally, no yield maintenance charge or prepayment premium will be required for partial or full prepayments in connection with a casualty or condemnation (regardless of whether the source of such prepayment includes funds of the borrower in addition to the casualty or condemnation proceeds) unless, in the case of certain of the mortgage loans, an event of default has occurred and is continuing. In addition, if a mortgage loan seller repurchases any mortgage loan from the issuing entity due to a breach of a representation or warranty or as a result of a document defect in the related mortgage file or a mezzanine lenderor, if applicable, a companion loan holder exercises an option to purchase a mortgage loan under the circumstances set forth in the related mezzanine loan documents, intercreditor agreement or co-lender agreement, the purchase price paid will be passed through to the holders of the certificates with the same effect as if the mortgage loan had been prepaid in part or in full, except that no prepayment premium or yield maintenance charge would be payable. Such a repurchase may therefore adversely affect the yield to maturity on your certificates.
The Class X-A certificates will not be entitled to distributions of principal but instead will accrue interest on their notional balance. Because the notional balance of the Class X-A certificates is based upon the outstanding certificate balances of the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4 and Class A-M certificates, the yield to maturity on the Class X-A certificates will be extremely sensitive to the rate and timing of prepayments of principal, liquidations and principal losses on the related mortgage loans to the extent allocated to such classes of certificates. A rapid rate of principal prepayments, liquidations and/or principal losses on the mortgage loans could result in the failure to recoup the initial investment in the Class X-A certificates. Investors in such class of certificates should fully consider the associated risks, including the risk that an extremely rapid rate of amortization, prepayment or other liquidation of the mortgage loans could result in the failure of such investors to recoup fully their initial investments.
Limited Obligations
The offered certificates, when issued, will represent beneficial interests in the issuing entity. The offered certificates will not represent an interest in, or obligation of, any sponsor, the mortgage loan seller, the depositor, the master servicer, the special servicer, the certificate administrator, the operating advisor,
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the trustee or any other person. The primary assets of the issuing entity will be the mortgage loans, and the primary security and source of payment for the mortgage loans will be the mortgaged properties and the other collateral described in this free writing prospectus. Payments on the offered certificates are expected to be derived from payments made by the borrowers on the mortgage loans. We cannot assure you that the cash flow from the mortgaged properties and the proceeds of any sale or refinancing of the mortgaged properties will be sufficient to pay the principal of, and interest on, the mortgage loans or to distribute in full the amounts of interest and principal to which the holders of the offered certificates are entitled. See “Description of the Offered Certificates—General” in this free writing prospectus.
Yield Considerations
The yield to maturity on any certificate offered in this free writing prospectus will depend on (i) the price at which such certificate is purchased by an investor and (ii) the rate, timing and amount of distributions on such offered certificate. The rate, timing and amount of distributions on any certificate will, in turn, depend on, among other things:
· | the interest rate for such certificate; |
· | the rate and timing of principal payments (including principal prepayments) and other principal collections on or in respect of the mortgage loans and the extent to which such amounts are to be applied or otherwise result in a reduction of the certificate balance of such certificate; |
· | the rate, timing and severity of losses on or in respect of the mortgage loans or unanticipated expenses of the issuing entity; |
· | the timing and severity of any interest shortfalls resulting from prepayments, or other shortfalls resulting from special servicing compensation, interest on advances or other expenses of the issuing entity; |
· | the timing and severity of any appraisal reductions; and |
· | the extent to which prepayment premiums and yield maintenance charges are collected and, in turn, distributed on such certificate. |
The investment performance of the certificates offered in this free writing prospectus may be materially different from what you expected if the assumptions you made with respect to the factors listed above are incorrect.
Your certificates may be offered at a premium or discount. If you purchased your certificates at a premium or discount, the yield to maturity on your certificates will be sensitive, and in some cases extremely sensitive, to prepayments on the mortgage loans and, where the amount of interest payable with respect to a class is disproportionately large, as compared to the amount of principal, a holder might fail to recover its original investment. If you purchase your certificates at a discount (other than with respect to the Class X-A certificates), you should consider the risk that a slower than anticipated rate of principal payments on the mortgage loans could result in an actual yield to maturity that is lower than your anticipated yield. If you purchase your certificates at a premium (other than with respect to the Class X-A certificates), you should consider the risk that a faster than anticipated rate of principal payments could result in an actual yield to maturity that is lower than your anticipated yield. The rate and timing of principal prepayments on pools of mortgage loans varies among pools and is influenced by a variety of economic, demographic, geographic, social, tax and legal factors. Accordingly, neither you nor we can predict the rate and timing of principal prepayments on the mortgage loans underlying your certificates.
The yield on any class of certificates whose pass-through rate is affected by the weighted average net mortgage interest rate could also be adversely affected if mortgage loans with higher interest rates pay faster than the mortgage loans with lower interest rates, since those classes bear interest at a rate limited by, equal to, or based on the weighted average net mortgage interest rate of the mortgage loans. The pass-through rates on such certificates may be limited by, equal to, or based on the weighted
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average of the net mortgage interest rates on the mortgage loans even if principal prepayments do not occur.
If you purchase Class X-A certificates, your yield to maturity will be particularly sensitive to the rate and timing of principal payments on the related underlying mortgage loans. Depending on the timing thereof, a payment of principal in reduction of the certificate balance of a class of certificates may result in a reduction in the total notional balance of the Class X-A certificates. Accordingly, if principal payments on the related underlying mortgage loans occur at a rate faster than that assumed at the time of purchase, then your actual yield to maturity with respect to any such class of certificates may be lower than that assumed at the time of purchase. Your yield to maturity could also be adversely affected by the purchase or repurchase of a mortgage loan. See “—Risks Related to Prepayments and Repurchases of Mortgage Loans” above in this free writing prospectus.
Optional Early Termination of the Issuing Entity May Result in an Adverse Impact on Your Yield or May Result in a Loss
The certificates will be subject to optional early termination by means of the purchase of the mortgage loans in the issuing entity. We cannot assure you that the proceeds from a sale of the mortgage loans and/or REO properties will be sufficient to distribute the outstanding certificate balance plus accrued interest and any undistributed shortfalls in interest accrued on the certificates that are subject to the termination. Accordingly, the holders of certificates affected by such a termination may suffer an adverse impact on the overall yield to maturity on their certificates, may experience repayment of their investment at an unpredictable and inopportune time or may even incur a loss on their investment. See “The Pooling and Servicing Agreement—Optional Termination” in this free writing prospectus.
A Mortgage Loan Seller May Not Be Able To Make a Required Repurchase or Substitution of a Defective Mortgage Loan
Each mortgage loan seller is the sole warranting party in respect of the related mortgage loans sold by it to us. Neither we nor any of our affiliates (except, in certain circumstances, for German American Capital Corporation, solely in its capacity as the mortgage loan seller) are obligated to repurchase or substitute any mortgage loan in connection with either a material breach of the mortgage loan seller’s representations and warranties or any material document defects, if such mortgage loan seller defaults on its obligation to do so. In addition, the mortgage loan sellers may have various legal defenses available to them in connection with a repurchase or substitution obligation. Any mortgage loan that is not repurchased or substituted and that is not a “qualified mortgage” within the meaning of section 860G(a)(3) of the Internal Revenue Code of 1986, as amended, may cause designated portions of the issuing entity to fail to qualify as one or more REMICs or cause the issuing entity to incur a tax. See “The Sponsors,Mortgage Loan Sellers and Originators” and “The Pooling and Servicing Agreement—Representations and Warranties;Repurchase;Substitution” in this free writing prospectus.
Any Loss of Value Payment Made by a Mortgage Loan Seller May Prove To Be Insufficient to Cover All Losses on a Defective Mortgage Loan
In lieu of repurchasing or substituting a mortgage loan in connection with either a material breach of the mortgage loan seller’s representations and warranties or any material document defects (other than a material breach that is related to a mortgage loan not being a “qualified mortgage” within the meaning of section 860G(a)(3) of the Internal Revenue Code of 1986, as amended), the related mortgage loan seller may make a loss of value payment to the issuing entity. Upon its making such payment, the mortgage loan seller will be deemed to have cured the related material breach or material document defect in all respects. Although a loss of value payment may only be made to the extent that the special servicer deems such amount to be sufficient to compensate the issuing entity for the related material breach or material document defect, there can be no assurance that such loss of value payment will fully compensate the issuing entity for such material breach or material document defect in all respects. See “The Pooling and Servicing Agreement—Representations and Warranties;Repurchase;Substitution” in this free writing prospectus.
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Risks Related to Borrower Default
The rate and timing of delinquencies or defaults on the mortgage loans will affect:
· | the aggregate amount of distributions on the offered certificates; |
· | their yield to maturity; |
· | the rate of principal payments on the offered certificates; and |
· | their weighted average life. |
Losses on the mortgage loans will be allocated to the Class H, Class G, Class F, Class E, Class D, Class C, Class B and Class A-M certificates, in that order, reducing amounts otherwise payable to each class. Any remaining losses will then be allocated to the Class A-1, Class A-2, Class A-SB, Class A-3 and Class A-4 certificates and, with respect to interest losses only, the Class X-A, Class X-B, Class X-C, Class X-D, Class X-E and Class X-F certificates based on their respective entitlementspro rata. However, because the notional balance of the Class X-B certificates is based on the certificate balances of the Class B and Class C certificates, the notional balance of the Class X-C certificates is based on the certificate balance of the Class D certificates, the notional balance of the Class X-D certificates is based on the certificate balances of the Class E and Class F certificates, the notional balance of the Class X-E certificates is based on the certificate balance of the Class G certificates and the notional balance of the Class X-F certificates is based on the certificate balance of the Class H certificates, any losses allocated to such classes of certificates will have the effect of simultaneously reducing the amount of interest to which the Class X-B, Class X-C, Class X-D, Class X-E and Class X-F certificates are entitled, respectively, notwithstanding that the Class X-B, Class X-C, Class X-D, Class X-E and Class X-F certificates are senior in right of payment to such classes of certificates. Similarly, any losses allocated to the Class A-M certificates will have the effect of simultaneously reducing the amount of interest to which the Class X-A certificates are entitled, notwithstanding that the Class X-A certificates are senior in right of payment to the Class A-M certificates.
Each class of certificates (other than the Class H, Class V, Class R and Class LR certificates) is senior to certain other classes of certificates in respect of the right to receive distributions and the allocation of losses. If losses on the mortgage loans exceed the aggregate certificate balance of the classes of certificates subordinated to such class, that class will suffer a loss equal to the full amount of such excess (up to the outstanding certificate balance of such class).
If you calculate your anticipated yield based on assumed rates of default and losses that are lower than the default rate and losses actually experienced and if such losses are allocable to your certificates, your actual yield to maturity will be lower than the assumed yield. Under certain extreme scenarios, such yield could be negative. In general, the earlier a loss borne by your certificates occurs, the greater the effect on your yield to maturity.
Even if losses on the mortgage loans are not borne by your certificates, those losses may affect the weighted average life and yield to maturity of your certificates. This may be so because those losses cause your certificates to have a higher interest in distributions of principal payments on the remaining mortgage loans than would otherwise have been the case. The effect on the weighted average life and yield to maturity of your certificates will depend upon the characteristics of the remaining mortgage loans.
Additionally, delinquencies and defaults on the mortgage loans may significantly delay the receipt of distributions by you on your certificates, unless principal and interest advances are made to cover delinquent payments or the subordination of another class of certificates fully offsets the effects of any such delinquency or default.
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Risks Related to Modification of Mortgage Loans with Balloon Payments
In order to maximize recoveries on defaulted mortgage loans, the pooling and servicing agreement enables the special servicer to extend and modify the terms of mortgage loans (other than any non-serviced mortgage loan) that are in material default or as to which a payment default (including the failure to make a balloon payment) is reasonably foreseeable, subject to the limitations described under “The Pooling and Servicing Agreement—Servicing of the Mortgage Loans and Serviced Loan Combinations;Collection of Payments,” “—Realization Upon Mortgage Loans” and “—Modifications” in this free writing prospectus. The special servicer is only required to determine that any such extension or modification is reasonably likely to produce a greater recovery than a liquidation of the real property securing such mortgage loan. There is a risk that the decision of the special servicer to extend or modify a mortgage loan may not in fact produce a greater recovery on your certificate. There can be no assurance that any extension or modification will increase the present value of recoveries in a given case. Neither the master servicer nor the special servicer will have the ability to extend or modify any non-serviced mortgage loan, because the related non-serviced loan combination will be serviced by another master servicer and special servicer pursuant to a separate pooling and servicing agreement. Any delay in the collection of a balloon payment that would otherwise be distributable in respect of a class of certificates offered in this free writing prospectus, whether if such delay is due to borrower default or to modification of any non-serviced mortgage loan by the master servicer or special servicer servicing such non-serviced mortgage loan, will likely extend the weighted average life of such class of certificates. See “Yield and Maturity Considerations” in this free writing prospectus and in the attached prospectus.
Risks Related to Certain Payments
To the extent described in this free writing prospectus, the master servicer, the special servicer or the trustee, as applicable, will be entitled to receive interest on unreimbursed advances. This interest will generally accrue from the date on which the related advance is made or the related expense is incurred to the date of reimbursement. In addition, under certain circumstances, including delinquencies in the payment of principal and interest, a mortgage loan will be specially serviced, and the special servicer will be entitled to compensation for special servicing activities. The right to receive interest on advances or special servicing compensation is senior to the rights of certificateholders to receive distributions and may lead to shortfalls in amounts otherwise distributable on your certificates.
Subject to certain conditions, the master servicer is entitled, under the pooling and servicing agreement, to receive, or to assign a portion of its master servicing fee referred to as the excess servicing strip. If a master servicer resigns or is terminated as master servicer, it (or its assignee) would continue to be entitled to receive the excess servicing strip and would be paid that excess servicing strip, except to the extent that any portion of that excess servicing strip is needed to compensate any successor master servicer for assuming the duties of the resigning or terminated master servicer with respect to the mortgage loans that it is servicing under the pooling and servicing agreement. There can be no assurance that, following any resignation or termination of a master servicer, (a) any holder of the excess servicing strip would not dispute the determination that any portion of the excess servicing strip was necessary to compensate a successor master servicer or (b) the issuing entity would be able to successfully recapture the excess servicing strip or any portion of that strip from any holder of the excess servicing strip, in particular if that holder were the subject of a bankruptcy or insolvency proceeding.
Risks of Limited Liquidity and Market Value
The offered certificates will not be listed on any national securities exchange or traded on any automated quotation system of any registered national securities association, and there is currently no secondary market for the offered certificates. While the underwriters have advised that they currently intend to make a secondary market in the offered certificates, they are under no obligation to do so. There is no assurance that a secondary market for the offered certificates will develop. Moreover, if a secondary market does develop, we cannot assure you that it will provide you with liquidity of investment or that it will continue for the life of the offered certificates. Lack of liquidity could result in a precipitous drop in the market value of the offered certificates. In addition, the market value of the offered certificates
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at any time may be affected by many factors, including then-prevailing interest rates, and no representation is made by any person or entity as to the market value of any offered certificates at any time.
The Limited Nature of Ongoing Information May Make It Difficult for You To Resell Your Certificates
The primary source of ongoing information regarding your certificates, including information regarding the status of the related assets of the issuing entity, will be the periodic reports made available to you by the certificate administrator described in this free writing prospectus under the heading “The Pooling and Servicing Agreement—Reports to Certificateholders;Available Information”, and any reports with respect to the issuing entity filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. We cannot assure you that any additional ongoing information regarding your certificates will be available through any other source. In addition, the depositor is not aware of any source through which price information about the certificates will be generally available on an ongoing basis. The limited nature of the information regarding the certificates may adversely affect the liquidity of the certificates, even if a secondary market for the certificates becomes available.
Risks Related to Factors Unrelated to the Performance of the Certificates and the Mortgage Loans, Such as Fluctuations in Interest Rates and the Supply and Demand of CMBS Generally
The market value of the certificates offered in this free writing prospectus can decline even if those certificates and the mortgage loans are performing at or above your expectations.
The market value of the offered certificates will be sensitive to fluctuations in current interest rates. However, a change in the market value of the offered certificates as a result of an upward or downward movement in current interest rates may not equal the change in the market value of the offered certificates as a result of an equal but opposite movement in interest rates.
The market value of the offered certificates will also be influenced by the supply of and demand for commercial mortgage-backed securities generally. The supply of commercial mortgage-backed securities will depend on, among other things, the amount of commercial, multifamily and manufactured housing community mortgage loans, whether newly originated or held in portfolio, that are available for securitization. A number of factors will affect investors’ demand for commercial mortgage-backed securities, including:
· | the availability of alternative investments that offer higher yields or are perceived as being a better credit risk, having a less volatile market value or being more liquid; |
· | legal and other restrictions that prohibit a particular entity from investing in commercial mortgage-backed securities, limit the amount or types of commercial mortgage-backed securities that it may acquire, or require it to maintain increased capital or reserves as a result of its investment in commercial mortgage-backed securities; |
· | investors’ perceptions regarding the commercial, multifamily and manufactured housing community real estate markets, which may be adversely affected by, among other things, a decline in real estate values or an increase in defaults and foreclosures on mortgage loans secured by income producing properties; and |
· | investors’ perceptions regarding the capital markets in general, which may be adversely affected by political, social and economic events completely unrelated to the commercial, multifamily and manufactured housing community real estate markets. |
If you decide to sell any of your certificates, the ability to sell those certificates will depend on, among other things, whether and to what extent a secondary market then exists for such certificates, and you may have to sell at discount from the price you paid for reasons unrelated to the performance of the
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certificates or the mortgage loans. Pricing information regarding the certificates may not be generally available on an ongoing basis or on any particular date.
Credit Support May Not Cover All Types of Losses
Use of credit support will be subject to the conditions and limitations described in this free writing prospectus. Moreover, such credit support may not cover all potential losses or risks. For example, credit support may or may not cover loss by reason of fraud or negligence by a mortgage loan originator or other parties. Any losses not covered by credit support may, at least in part, be allocated to one or more classes of your certificates.
Disproportionate Benefits May Be Given to Certain Classes
Although subordination of certain classes of the non-offered certificates is intended to reduce the likelihood of temporary shortfalls and ultimate losses to holders of the offered certificates, the amount of subordination will be limited and may decline under certain circumstances. In addition, if principal payments on one or more classes of certificates are made in a specified order of priority, any related credit support may be exhausted before the principal of the later paid classes of certificates of such series has been repaid in full. As a result, the impact of losses and shortfalls experienced with respect to the mortgage loans may fall disproportionately upon such later-paid classes of offered certificates.
The Amount of Credit Support Will Be Limited
The amount of any applicable credit support supporting one or more classes of certificates, including the subordination of one or more other classes of certificates, was determined on the basis of criteria established by each rating agency rating such classes of certificates based on an assumed level of defaults, delinquencies and losses on the underlying mortgage loans and certain other factors. However, we cannot assure you that the loss experienced on the mortgage loans will not exceed such assumed levels. See “Description of the Offered Certificates—General” and “—Subordination” in this free writing prospectus. If the losses on the mortgage loans do exceed such assumed levels, you may be required to bear such additional losses.
REMIC Status
Under the Internal Revenue Code of 1986, if during any taxable year, an entity intended to qualify as a real estate mortgage investment conduit (“REMIC”) fails to satisfy one or more of the REMIC requirements, then such entity will not be treated as a REMIC for that taxable year and any taxable year thereafter. In that event, the issuing entity, including the Trust REMICs could be taxable as corporations and one or more of the certificates could be treated as stock in the corporations rather than as debt instruments. The Internal Revenue Code of 1986 authorizes the IRS to grant an entity relief from the consequences of REMIC disqualification if such REMIC disqualification occurs inadvertently and steps are taken to correct the conditions that caused disqualification within a reasonable time after the discovery of the disqualification. The relief may take the form of either allowing the entity to continue as REMIC after it again qualifies as a REMIC or by ignoring the cessation of REMIC status entirely. Any relief may, however, be accompanied by sanctions, such as the imposition of a corporate tax on all or a portion of the REMIC’s income for the period during which it failed to meet the REMIC requirements. The Treasury Department and the IRS are authorized to issue regulations under these relief provisions but no regulations have been proposed.
State, Local and Other Tax Considerations
In addition to the federal income tax consequences described under the heading “Material Federal Income Tax Consequences” in this free writing prospectus, potential purchasers should consider the state and local, and any other, income tax consequences of the acquisition, ownership and disposition of the certificates. State and local income tax laws may differ substantially from the corresponding federal
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income tax laws, and this free writing prospectus does not purport to describe any aspects of the income tax laws of the states or localities or any other jurisdiction in which the mortgaged properties are located or of any other applicable state or locality or any other jurisdiction.
It is possible that one or more jurisdictions may (i) attempt to tax nonresident holders of certificates solely by reason of the location in that jurisdiction of the depositor, the trustee, the certificate administrator, the operating advisor, the sponsors, a related borrower or a mortgaged property or on some other basis, (ii) require nonresident holders of certificates to file returns in such jurisdiction and (iii) attempt to impose penalties for failure to file such returns; and it is possible that any such jurisdiction will ultimately succeed in collecting such taxes or penalties from nonresident holders of certificates. We cannot assure you that holders of certificates will not be subject to tax in any particular state, local or other taxing jurisdiction.
If any tax or penalty is successfully asserted by any state, local or other taxing jurisdiction, none of the depositor, the sponsors, the related borrower, the trustee, the certificate administrator, the operating advisor, the master servicer or the special servicer will be obligated to indemnify or otherwise to reimburse the holders of certificates for that tax or penalty.
You should consult with your own tax advisor with respect to the various state, local or other tax consequences of an investment in the certificates.
Certain Federal Tax Consideration Regarding Original Issue Discount
Certain classes of offered certificates may be issued with original issue discount for federal income tax purposes. Original issue discount is taxable when it accrues rather than when it is received, resulting in the recognition of original issue discount as taxable income before any cash attributable to that taxable income is received. Accordingly, investors must have sufficient sources of cash other than a certificate to pay any federal, state or local income taxes that may be imposed on original issue discount. See “Material Federal Income Tax Consequences” in this free writing prospectus and “Federal Income Tax Consequences for REMIC Certificates—Taxation of Regular Certificates—Original Issue Discount” in the attached prospectus.
Tax Considerations Related to Foreclosure
If the issuing entity acquires a mortgaged property pursuant to a foreclosure or deed in lieu of foreclosure, the special servicer will generally be required to retain an independent contractor to operate and manage the mortgaged property.
Among other things, the independent contractor generally will not be able to perform construction work, other than repair, maintenance or certain types of tenant build outs, unless the construction was more than 10% completed when default on the mortgage loan becomes imminent. Furthermore, any (i) net income from such operation (other than qualifying “rents from real property”), (ii) rental income based on the net profits of a tenant or sub tenant or allocable to a non-customary service and (iii) rental income attributable to personal property leased in connection with a lease of real property, if the rent attributable to the personal property exceeds 15% of the total rent for the taxable year, will subject the Lower-Tier REMIC to federal tax on such income at the highest marginal corporate tax rate (currently 35%) and possibly state or local tax. No determination has been made whether any portion of the income from the mortgaged properties constitutes “rents from real property”. In such event, the net proceeds available for distribution to certificateholders will be reduced. The special servicer may permit the Lower-Tier REMIC to earn “net income from foreclosure property” that is subject to tax if it determines that the net after tax benefit to certificateholders is greater than under another method of operating or leasing the mortgaged property. See “The Pooling and Servicing Agreement—Realization Upon Mortgage Loans” in this free writing prospectus.
In addition, if the issuing entity were to acquire one or more mortgaged properties pursuant to a foreclosure or deed in lieu of foreclosure, upon acquisition of those mortgaged properties, the issuing
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entity may in certain jurisdictions, particularly in New York, be required to pay state or local transfer or excise taxes upon liquidation of the properties. These state or local taxes may reduce net proceeds available for distribution with respect to the certificates.
Changes to REMIC Restrictions on Loan Modifications May Impact an Investment in the Certificates
Ordinarily, a REMIC that modifies a mortgage jeopardizes its tax status as a REMIC and risks having a 100% penalty tax being imposed on any income from the mortgage. A REMIC may avoid such consequences, however, if the default of such mortgage is “reasonably foreseeable” or other special circumstances apply.
Revenue Procedure 2009-45, issued by Internal Revenue Service, eases the tax requirements for a servicer to modify a commercial or multifamily mortgage loan held in a REMIC by interpreting the circumstances under which default is “reasonably foreseeable” to include those where the servicer reasonably believes that there is a “significant risk of default” with respect to the mortgage loan upon maturity of the loan or at an earlier date, and that by making such modification the risk of default is substantially reduced. Accordingly, if the master servicer or the special servicer determined that an underlying mortgage loan was at significant risk of default and permitted one or more modifications otherwise consistent with the terms of the pooling and servicing agreement, any such modification may impact the timing and ultimate recovery on the mortgage loan, and likewise on one or more classes of certificates.
In addition, the IRS has issued final regulations under the REMIC provisions of the Code that allow a servicer to modify terms of REMIC-held mortgage loans that relate to changes in collateral, credit enhancement and recourse features, provided that after the modification the mortgage loan remains “principally secured by real property” (that is, as long as the loan continues to satisfy the “REMIC LTV Test”). In general, a mortgage loan meets the REMIC LTV Test if the loan-to-value ratio is no greater than 125%. One of the modifications covered by the final regulations is a release of a lien on one or more of the mortgaged properties securing a REMIC-held mortgage loan. Following such a release, however, it may be difficult to demonstrate that a mortgage loan still meets the REMIC LTV Test. To provide relief for taxpayers, the IRS has issued Revenue Procedure 2010-30, which describes circumstances in which the IRS will not challenge whether a mortgage loan satisfies the REMIC LTV Test following a lien release. The lien releases covered by Revenue Procedure 2010-30 are “grandfathered transactions” and transactions in which the release is part of a “qualified pay-down transaction.” If the value of the real property securing a mortgage loan were to decline, the need to comply with the rules of Revenue Procedure 2010-30 could restrict the Special Servicer’s actions in negotiating the terms of a workout or in allowing minor lien releases for cases in which a mortgage loan could fail the REMIC LTV Test following the release. This could impact the timing and ultimate recovery on a mortgage loan, and likewise on one or more classes of certificates.
You should consider the possible impact on your investment of any existing REMIC restrictions as well as any potential changes to the REMIC rules.
Risks Relating to Lack of Certificateholder Control over the Issuing Entity
You generally do not have a right to vote, except with respect to certain amendments to the pooling and servicing agreement. Furthermore, you will generally not have the right to make decisions concerning administration of the issuing entity. The pooling and servicing agreement gives the master servicer, the special servicer, the trustee, the certificate administrator or the REMIC administrator, as applicable, certain decision-making authority concerning administration of the issuing entity. These parties may make decisions different from those that holders of any particular class of the certificates offered in this free writing prospectus would have made, and these decisions may negatively affect those holders’ interests.
While there is an operating advisor with certain obligations in respect of reviewing certain actions or proposed actions of the special servicer in compliance with the special servicer’s obligations under the
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pooling and servicing agreement, the operating advisor has no control or consultation rights over actions by the special servicer for so long as no Control Termination Event has occurred and is continuing. In addition, the operating advisor only has the limited obligations and duties set forth in the pooling and servicing agreement, and has no fiduciary duty to act on behalf of the certificateholders or the issuing entity or in the best interest of any particular certificateholder. It is not intended that the operating advisor act as a surrogate for the certificateholders. Investors should not rely on the operating advisor to affect the special servicer’s actions under the pooling and servicing agreement or to monitor the actions of the controlling class representative or special servicer, other than to the limited extent specifically required in respect of certain actions of the special servicer at certain prescribed times under the pooling and servicing agreement.
Different Timing of Mortgage Loan Amortization Poses Certain Risks
As principal payments or prepayments are made on a mortgage loan that is part of a pool of mortgage loans, the pool may be subject to more risk with respect to the decreased diversity of the size of mortgage loans, geographic location and types of mortgaged properties and number and affiliation of borrowers, as described above under the headings “—Risks Related to the Mortgage Loans—Risks Related to Tenants—Mortgaged Properties Leased to Borrowers or Borrower Affiliated Entities Also Have Risks,” “—Risks Related to the Mortgage Loans—Risks Related to Mortgage Loan Concentration,” “—Risks Related to Borrower Concentration” and “—Geographic Concentration Exposes Investors to Greater Risk of Default and Loss.” Classes that have a later sequential designation or a lower payment priority are more likely to be exposed to this concentration risk than are classes with an earlier sequential designation or higher priority. This is so because, subject to the payment of the Class A-SB certificates as described in “Description of the Offered Certificates—Distributions,” principal on the certificates is generally payable in sequential order of designation, and no class entitled to distribution of principal generally receives principal until the certificates balance(s) of the preceding class or classes entitled to receive principal have been reduced to zero.
Ratings of the Offered Certificates
Ratings assigned to the offered certificates by the rating agencies engaged by the depositor will be based, among other things, on the economic characteristics of the mortgaged properties and other relevant structural features of the transaction. A security rating does not represent any assessment of the yield to maturity that a certificateholder may experience. Ratings assigned to the offered certificates reflect only the views of the respective rating agencies as of the date such ratings are issued. Future events could have an adverse impact on such ratings. Ratings may be reviewed, revised, suspended, downgraded, qualified or withdrawn entirely by the applicable rating agency as a result of changes in or unavailability of information. Ratings do not consider to what extent the offered certificates will be subject to prepayment or that the outstanding principal amount of any class of offered certificates will be prepaid.
Furthermore, the amount, type and nature of credit support, if any, provided with respect to the offered certificates is determined on the basis of criteria established by each rating agency. These criteria are sometimes based upon analysis of the behavior of mortgage loans in a larger group. However, we cannot assure you that the historical data supporting that analysis will accurately reflect future experience, or that the data derived from a large pool of mortgage loans will accurately predict the delinquency, foreclosure or loss experience of the mortgage loans in the issuing entity. As evidenced by the significant amount of downgrades, qualifications and withdrawals of ratings assigned to previously issued commercial mortgage-backed securities during the recent credit crisis by the hired rating agencies and other nationally recognized statistical rating organizations, the rating agencies’ assumptions regarding the performance of the mortgage loans related to such commercial mortgage-backed securities were not, in all cases, correct.
With respect to each mortgage loan, certain actions provided for in the related loan agreement require, as a condition to taking such action, that a no downgrade confirmation be obtained from each rating agency. In certain circumstances, this condition may be deemed to have been met or waived without such a no downgrade confirmation being obtained. See the definition of “No Downgrade
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Confirmation” in this free writing prospectus. In the event such an action is taken without a no downgrade confirmation being obtained, we cannot assure you that the applicable rating agency will not downgrade, qualify or withdraw its ratings as a result of the taking of such action. If you invest in the offered certificates, pursuant to the pooling and servicing agreement your acceptance of certificates will constitute an acknowledgment of, and agreement with, the procedures relating to no downgrade confirmations described under the definition of “No Downgrade Confirmation” in this free writing prospectus.
We are not obligated to maintain any particular rating with respect to any class of offered certificates. The ratings initially assigned to the offered certificates by any or all of the rating agencies engaged by the depositor to rate the offered certificates could change adversely as a result of changes affecting, among other things, the underlying mortgage loans, the mortgaged properties, the trustee, the certificate administrator, the operating advisor, the master servicer or the special servicer, or as a result of changes to ratings criteria employed by any or all of such rating agencies. Although these changes would not necessarily result from an event of default on any underlying mortgage loan, any adverse change to the ratings of any class of the offered certificates would likely have an adverse effect on the liquidity, market value and regulatory characteristics of those certificates. See “Ratings” in this free writing prospectus.
Further, a ratings downgrade of any class of offered certificates below an investment grade rating by the rating agencies could affect the ability of a benefit plan or other investor to purchase or retain those certificates. See “ERISA Considerations” and “Legal Investment” in this free writing prospectus.
The depositor has requested a rating on each class of the offered certificates from three nationally recognized statistical rating organizations. Nationally recognized statistical rating organizations that we have not engaged to rate the offered certificates may nevertheless issue unsolicited credit ratings on one or more classes of offered certificates, relying on information they receive pursuant to Rule 17g-5 under the Securities Exchange Act of 1934, as amended. If any such unsolicited ratings are issued, we cannot assure you that they will not be different from the ratings assigned by a rating agency engaged by the depositor. The issuance of unsolicited ratings by any nationally recognized statistical rating organization on a class of the offered certificates that are lower than the ratings assigned by a rating agency engaged by the depositor may adversely impact the liquidity, market value and regulatory characteristics of that class.
As part of the process of obtaining ratings for the offered certificates, the depositor had initial discussions with and submitted certain materials to certain nationally recognized statistical rating organizations. Based on preliminary feedback from those nationally recognized statistical rating organizations at that time, the depositor selected three of those nationally recognized statistical rating organizations to rate certain classes of offered certificates, and did not select the other nationally recognized statistical rating organizations due, in part, to those nationally recognized statistical rating organizations’ initial subordination levels for the various classes of offered and non-offered certificates. Had the depositor selected such other nationally recognized statistical rating organizations to rate the offered certificates, we cannot assure you as to the ratings that such other nationally recognized statistical rating organizations would ultimately have assigned to the offered certificates. Further, with respect to the rating agencies engaged by the depositor to only rate certain classes of offered certificates, but not others, if the depositor had engaged such rating agencies to rate the remaining classes of offered certificates not rated by it, their ratings of such offered certificates may have been different, and potentially lower, than those ratings ultimately assigned to such offered certificates by the other rating agencies engaged to rate such offered certificates. Although unsolicited ratings may be issued by any nationally recognized statistical rating organization, a nationally recognized statistical rating organization might be more likely to issue an unsolicited rating if it was not selected after having provided preliminary feedback to the depositor.
Neither the depositor nor any other person or entity will have any duty to notify you if any such other nationally recognized statistical rating organization issues, or delivers notice of its intention to issue, unsolicited ratings on one or more classes of offered certificates after the date of this free writing prospectus.
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Furthermore, the Securities and Exchange Commission may determine that any or all of the rating agencies engaged by the depositor to rate the offered certificates no longer qualifies as a nationally recognized statistical rating organization, or is no longer qualified to rate the offered certificates, and that determination may have an adverse effect on the liquidity, market value and regulatory characteristics of the offered certificates. To the extent that the provisions of any mortgage loan or the pooling and servicing agreement condition any action, event or circumstance on the delivery of a no downgrade confirmation, the pooling and servicing agreement will address delivery of a no downgrade confirmation only from the rating agencies engaged by the depositor to rate the offered certificates.
Combination or “Layering” of Multiple Risks May Significantly Increase Risk of Loss
Although the various risks discussed in this free writing prospectus are generally described separately, you should consider the potential effects of the interplay of multiple risk factors. Where more than one significant risk factor is present, the risk of loss to an investor in the offered certificates may be significantly increased.
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THE SPONSORS, MORTGAGE LOAN SELLERS AND ORIGINATORS
German American Capital Corporation
General
German American Capital Corporation (“GACC”) is a sponsor and a mortgage loan seller in this securitization transaction (in such capacity, “Sponsor” or “Mortgage Loan Seller”). Except with respect to the 11 Madison Avenue loan combination, which was co-originated by GACC, Morgan Stanley Bank, N.A. and Wells Fargo Bank, National Association, GACC or an affiliate of GACC originated (either directly or, in some cases, through table funding arrangements) all of the GACC Mortgage Loans in this transaction. GACC is a wholly-owned subsidiary of Deutsche Bank Americas Holding Corp., which in turn is a wholly-owned subsidiary of Deutsche Bank AG, a German corporation and GACC is an affiliate of the Depositor and Deutsche Bank Securities Inc., an Underwriter. The principal offices of GACC are located at 60 Wall Street, New York, New York 10005. For more information regarding GACC, see “The Sponsor” in the prospectus.
GACC is engaged in the origination of commercial mortgage loans with the primary intent to sell the loans within a short period of time subsequent to origination into a commercial mortgage backed securities primary issuance securitization or through a sale of whole loan interests to third party investors. GACC originates loans primarily for securitization; however, GACC also originates subordinate mortgage loans or subordinate participation interests in mortgage loans, and mezzanine loans (loans secured by equity interests in entities that own commercial real estate), for sale to third party investors.
GACC originates loans and aggregates and warehouses the loans pending sale via a commercial mortgage backed securities (“CMBS”) securitization.
GACC’s Securitization Program
GACC has been engaged as an originator and seller/contributor of loans into CMBS securitizations for more than ten years.
GACC has been a seller of loans into securitization programs including (i) the “COMM” program, in which its affiliate Deutsche Mortgage & Asset Receiving Corporation (“DMARC”) is the depositor, (ii) the “CD” program in which DMARC was the depositor on a rotating basis with Citigroup Commercial Mortgage Securities Inc., and (iii) programs where third party entities, including affiliates of General Electric Capital Corporation, Capmark Finance Inc. (formerly GMAC Commercial Mortgage Corporation) and others, have acted as depositors.
Under the COMM name, GACC has had two primary securitization programs, the “COMM FL“ program, into which large floating rate commercial mortgage loans were securitized, and the “COMM Conduit/Fusion” program, into which both fixed rate conduit loans and large loans were securitized.
GACC originates both fixed rate and floating rate commercial mortgage loans backed by a range of commercial real estate properties including office buildings, apartments, shopping malls, hotels, and industrial/warehouse properties. The total amount of loans securitized by GACC from October 1, 2010 through June 30, 2015, is approximately $41.531 billion.
Generally, GACC has not purchased significant amounts of mortgage loans for securitization; however it has purchased loans for securitization in the past and it may elect to purchase loans for securitization in the future. In the event GACC purchases loans for securitization, GACC will either reunderwrite the mortgage loans it purchases, or perform other procedures to ascertain the quality of such loans, which procedures will be subject to approval by credit risk management officers.
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In coordination with Deutsche Bank Securities Inc. and other underwriters or initial purchasers, GACC works with NRSROs, other loan sellers, servicers and investors in structuring a securitization transaction to maximize the overall value and capital structure, taking into account numerous factors, including without limitation geographic and property type diversity and NRSRO criteria.
For the most part, GACC relies on independent rated third parties to service loans held pending sale or securitization. It maintains interim servicing agreements with large, institutional commercial mortgage loan servicers who are highly rated by the NRSROs. Periodic financial review and analysis, including monitoring of ratings, of each of the servicers with which GACC has servicing arrangements is conducted under the purview of loan underwriting personnel.
Pursuant to a Mortgage Loan Purchase Agreement, GACC will make certain representations and warranties, subject to certain exceptions set forth therein (and in Annex G to this free writing prospectus), to the Depositor and will covenant to provide certain documents regarding the Mortgage Loans it is selling to the Depositor (the “GACC Mortgage Loans”) and, in connection with certain breaches of such representations and warranties or certain defects with respect to such documents, which breaches or defects are determined to have a material adverse effect on the value of the subject GACC Mortgage Loans or such other standard as is described in the related Mortgage Loan Purchase Agreement, may have an obligation to repurchase such Mortgage Loan, cure the subject defect or breach, replace the subject Mortgage Loan with a Qualified Substitute Mortgage Loan or make a Loss of Value Payment, as the case may be. The Depositor will assign its rights under each Mortgage Loan Purchase Agreement to the issuing entity. In addition, GACC has agreed to indemnify the Depositor, the Underwriters and certain of their respective affiliates with respect to certain liabilities arising in connection with the issuance and sale of the certificates. See “The Pooling and Servicing Agreement—Assignment of the Mortgage Loans” and “—Representations and Warranties;Repurchase;Substitution” in this free writing prospectus.
Review of GACC Mortgage Loans
Overview.GACC, in its capacity as the Sponsor of the GACC Mortgage Loans, has conducted a review of the GACC Mortgage Loans in connection with the securitization described in this free writing prospectus. GACC determined the nature, extent and timing of the review and the level of assistance provided by any third parties. The review of the GACC Mortgage Loans was performed by a deal team comprised of real estate and securitization professionals who are employees of one or more of GACC’s affiliates (the “GACC Deal Team”). The review procedures described below were employed with respect to all of the GACC Mortgage Loans, except that certain review procedures only were relevant to the large loan disclosures in this free writing prospectus, as further described below. No sampling procedures were used in the review process.
Data Tape.To prepare for securitization, members of the GACC Deal Team created a data tape (the “GACC Data Tape”) containing detailed loan-level and property-level information regarding each GACC Mortgage Loan. The GACC Data Tape was compiled from, among other sources, the related Mortgage Loan Documents, appraisals, environmental reports, seismic reports, property condition reports, zoning reports, insurance policies, borrower supplied information (including, but not limited to, rent rolls, leases, operating statements and budgets) and information collected by the GACC during the underwriting process. After origination of each GACC Mortgage Loan, the GACC Deal Team updated the information in the GACC Data Tape with respect to the GACC Mortgage Loan based on updates provided by the related loan servicer relating to loan payment status and escrows, updated operating statements, rent rolls and leasing activity, and information otherwise brought to the attention of the GACC Deal Team. The GACC Data Tape was used by the GACC Deal Team to provide the numerical information regarding the GACC Mortgage Loans in this free writing prospectus.
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Data Comparison and Recalculation. The Depositor, on behalf of GACC, engaged a third party accounting firm to perform certain data comparison and recalculation procedures designed by GACC relating to information in this free writing prospectus regarding the GACC Mortgage Loans. These procedures included:
· | comparing the information in the GACC Data Tape against various source documents provided by GACC that are described above under “—Data Tape”; |
· | comparing numerical information regarding the GACC Mortgage Loans and the related Mortgaged Properties disclosed in this free writing prospectus against the GACC Data Tape; and |
· | recalculating certain percentages, ratios and other formulae relating to the GACC Mortgage Loans disclosed in this free writing prospectus. |
Legal Review.GACC engaged various law firms to conduct certain legal reviews of the GACC Mortgage Loans for disclosure in this free writing prospectus. In anticipation of the securitization of each GACC Mortgage Loan originated by GACC, origination counsel prepared a loan summary that sets forth salient loan terms and summarizes material deviations from GACC’s standard form loan documents. In addition, origination counsel for each GACC Mortgage Loan reviewed GACC’s representations and warranties set forth on Annex F to this free writing prospectus and, if applicable, identified exceptions to those representations and warranties.
Securitization counsel was also engaged to assist in the review of the GACC Mortgage Loans. Such assistance included, among other things, (i) a review of sections of the loan documents with respect to certain of the GACC Mortgage Loans that deviate materially from GACC’s standard form document, (ii) a review of the loan summaries referred to above relating to the GACC Mortgage Loans prepared by origination counsel, and (iii) a review of a due diligence questionnaire completed by the origination counsel. Securitization counsel also reviewed the property release provisions (other than the partial defeasance provisions), if any, for each GACC Mortgage Loan with multiple Mortgaged Properties or, to the extent identified by origination counsel, for each GACC Mortgage Loan with permitted outparcel releases or similar releases for compliance with the REMIC provisions of the Code.
GACC prepared, and reviewed with originating counsel and/or securitization counsel, the loan summaries for those of the GACC Mortgage Loans included in the 10 largest Mortgage Loans in the mortgage pool, and the abbreviated loan summaries for those of the GACC Mortgage Loans included in the next 10 largest Mortgage Loans in the mortgage pool, which loan summaries and abbreviated loan summaries are incorporated in “Annex B—Description of the Top 20 Mortgage Loans” to this free writing prospectus.
Other Review Procedures.With respect to any pending litigation that existed at the origination of any GACC Mortgage Loan, GACC requested updates from the related borrower, origination counsel and/or borrower’s litigation counsel. In connection with the origination of each GACC Mortgage Loan, GACC, together with origination counsel, conducted a search with respect to each borrower under the related GACC Mortgage Loan to determine whether it filed for bankruptcy. If GACC became aware of a significant natural disaster in the vicinity of any Mortgaged Property securing a GACC Mortgage Loan, GACC obtained information on the status of the Mortgaged Property from the related borrower to confirm no material damage to the Mortgaged Property.
With respect to the GACC Mortgage Loans originated by GACC, the GACC Deal Team also consulted with the applicable GACC Mortgage Loan origination team to confirm that the GACC Mortgage Loans were originated in compliance with the origination and underwriting criteria described below under “—GACC’s Underwriting Standards,” as well as to identify any material deviations from those origination and underwriting criteria. See “—GACC’s Underwriting Standards—Exceptions” below.
Findings and Conclusions. Based on the foregoing review procedures, GACC determined that the disclosure regarding the GACC Mortgage Loans in this free writing prospectus is accurate in all material respects. GACC also determined that the GACC Mortgage Loans were originated in accordance with
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GACC’s origination procedures and underwriting criteria, except as described below under “—GACC’s Underwriting Standards—Exceptions.” GACC attributes to itself all findings and conclusions resulting from the foregoing review procedures.
GACC’s Underwriting Standards
General. GACC originates loans located in the United States that are secured by retail, multifamily, office, hospitality, industrial/warehouse and self storage properties. All of the mortgage loans originated by GACC generally are originated in accordance with the underwriting criteria described below. However, each lending situation is unique, and the facts and circumstance surrounding the mortgage loan, such as the quality and location of the real estate, the sponsorship of the borrower and the tenancy of the property, will impact the extent to which the general guidelines below are applied to a specific loan. This underwriting criteria is general, and there is no assurance that every mortgage loan will conform in all respects with the guidelines.
Loan Analysis. In connection with the origination of mortgage loans, GACC conducts an extensive review of the related mortgaged property, including an analysis of the appraisal, environmental report, property operating statements, financial data, rent rolls, sales where applicable and related information or statements of occupancy rates provided by the borrower and, with respect to the mortgage loans secured by retail and office properties, certain major tenant leases and the tenant’s credit. Generally, borrowers are required to be single purpose entities which do not have a credit history; therefore, the financial strength and character of certain of the borrower’s key principals are examined prior to approval of the mortgage loan through a review of available financial statements and public records searches. A member of the GACC underwriting or due diligence team, or a consultant or other designee, visits the mortgaged property for a site inspection to confirm the occupancy rates of the mortgaged property, and analyzes the mortgaged property’s sub-market and the utility of the mortgaged property within the sub-market. Unless otherwise specified in this free writing prospectus, all financial, occupancy and other information contained in this free writing prospectus is based on such information and there can be no assurance that such financial, occupancy and other information remains accurate.
Loan Approval. Prior to loan origination and closing, all mortgage loans must be approved by credit risk management officers (the number of which varies by loan size) in accordance with its credit policies. The credit risk management officers may approve a mortgage loan as recommended, request additional due diligence, modify the loan terms or decline a loan transaction.
Debt Service Coverage Ratio and LTV Ratio. GACC’s underwriting standards as applied to first mortgage liens generally require, as stabilized operating performance the following minimum debt service coverage ratios and maximum LTV ratios for each of the indicated property types:
Property Type | DSCR Guideline | LTV Ratio Guideline | ||
Office | 1.25x | 75% | ||
Retail | 1.30x | 75% | ||
Multifamily | 1.20x | 75% | ||
Manufactured Housing | 1.25x | 75% | ||
Industrial/Warehouse | 1.25x | 75% | ||
Self Storage | 1.25x | 70% | ||
Hospitality | 1.50x | 70% |
The debt service coverage ratio guidelines listed above are calculated based on underwritten net cash flow at origination. Therefore, the debt service coverage ratio for each Mortgage Loan as reported in this free writing prospectus may differ from the amount calculated at the time of origination and may be based on, for example, a net funded amount where a holdback reserve is held by the lender pending some future event. In addition, with respect to certain mortgage loans originated by GACC there may exist subordinate debt secured by the related mortgaged property and/or mezzanine debt secured by direct or indirect ownership interests in the borrower. Such mortgage loans may have a lower debt service coverage ratio, and a higher LTV ratio, if such subordinate or mezzanine debt is taken into account. In addition, GACC’s underwriting guidelines generally permit a maximum amortization period of 30 years. However, the mortgage loans originated by GACC may provide for interest-only payments until
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maturity, or for a specified period. With respect to interest-only loans, such loans are generally underwritten to a minimum debt service coverage ratio of 1.20x and a maximum LTV ratio of 80% on all property types. Moreover, in certain circumstances the actual debt service coverage ratios and LTV ratios for the mortgage loans originated or purchased by GACC and its affiliates may vary from the guidelines above, based on asset quality, sponsor equity, loan structure and other factors. See “Description of the Mortgage Pool” in this free writing prospectus and Annex A-1 to this free writing prospectus.
Escrow Requirements. GACC generally requires a borrower to fund various escrows for taxes and insurance, replacement reserves, re-tenanting expenses and capital expenses, in some cases only during periods when certain debt service coverage ratio tests are not satisfied. In most cases where the property is covered by blanket insurance, insurance reserves will not be required. In certain cases where the loan sponsor is an institutional or investment grade entity, or to the extent that a sole or major tenant (which may include a ground tenant) at the related mortgaged property is required to pay taxes directly, GACC may waive all escrow requirements. In some cases, a borrower will be permitted to post a letter of credit or guaranty in lieu of funding a given reserve or escrow. Generally, the required escrows for mortgage loans originated by GACC are as follows:
Taxes and Insurance—Typically, an initial deposit and monthly escrow deposits equal to 1/12 of the annual property taxes (based on the most recent property assessment and the current millage rate) and annual insurance premiums are required in order to provide lender with sufficient funds to satisfy all taxes and insurance bills prior to their respective due dates.
Replacement Reserves—Monthly deposits generally based on the greater of the amount recommended pursuant to a building condition report prepared for GACC or the following minimum amounts:
Office | $0.20 per square foot |
Retail | $0.15 per square foot of in-line space |
Multifamily | $250 per unit |
Manufactured Housing | $50 per pad |
Industrial/Warehouse | $0.10 per square foot |
Self Storage | $0.15 per square foot |
Hospitality | 4% of gross revenue |
Re-tenanting—Certain major tenants and a significant number of smaller tenants may have lease expirations within the loan term. To mitigate this risk, reserves may be established to be funded either at closing and/or during the loan term to cover certain anticipated leasing commissions and/or tenant improvement costs which may be associated with re-leasing the space occupied by these tenants.
Deferred Maintenance/Environmental Remediation—Generally, an initial deposit is required upon funding of the mortgage loan, in an amount equal to at least the estimated costs of the recommended substantial repairs or replacements pursuant to the building condition report completed by a licensed third party engineer and the estimated costs of environmental remediation expenses as recommended by an independent environmental assessment. In some cases, borrowers are permitted to substitute environmental insurance policies, guarantees or other credit support in lieu of reserves for environmental remediation.
Third Party Reports. In connection with underwriting commercial mortgage loans, GACC generally will perform the procedures and obtain the third party reports or other documents described in this free writing prospectus under “Description of the Mortgage Pool—Certain Underwriting Matters.”
Exceptions. Other than as set forth below, the GACC Mortgage Loans were originated in accordance with the underwriting standards set forth above.
With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Chase Park, representing approximately 2.9% of the Initial Outstanding Pool Balance, the borrower is required to makemonthly replacement reserve deposits equivalent to $0.19 per square foot annually in comparison to a monthly replacement reserve deposit of $0.20 per square foot
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provided for in GACC’s underwriting guidelines for retail properties.GACC’s decision to include the Mortgage Loan in the transaction was based on the sponsor’s investment of $1.8 million ($6.24 PSF) in capital expenditures since acquiring the asset in April 2013. Additionally, the Mortgage Loan has strong credit metrics U/W NOI Debt Yield of 10.5% and UW NCF DSCR of 1.54x based on 30 year amortization.
With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as A&H Pacific, representing approximately 1.9% of the Initial Outstanding Pool Balance, the borrower is required to makemonthly replacement reserve deposits equivalent to $0.09 per square foot annually in comparison to a monthly replacement reserve deposit of $0.15 per square foot provided for in GACC’s underwriting guidelines for retail properties.GACC’s decision to include the Mortgage Loan in the transaction was based on the Mortgage Loan having strong credit metrics including LTV at Cut-off of 61.1%, U/W NOI Debt Yield of 10.0% and UW NCF DSCR of 1.69x based on 30 year amortization. Based on 30-year amortization schedule (after an initial five year interest-only period) the Mortgage Loan has an exit LTV of 55.6%.
With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as The Phenix at Infinity Park II, representing approximately 1.5% of the Initial Outstanding Pool Balance, the borrower is required to makemonthly replacement reserve deposits equivalent to $200 per unit annually in comparison to a monthly replacement reserve deposit of $250 per unit annually provided for in GACC’s underwriting guidelines for multifamily properties.GACC’s decision to include the Mortgage Loan in the transaction was based on the sponsor’s investment of over $4.6 million of capital into the Mortgaged Property, to renovate all of the 131 units at approximately $35,496 per unit. Additionally, the Mortgaged Property has demonstrated strong leasing momentum improving occupancy from 70.2% in December 2014 to 98.5% as of June 14, 2015.
With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as HGI Kennewick, representing approximately 1.4% of the Initial Outstanding Pool Balance, theCut-off Date LTV ratio is 72.0% in comparison to an LTV of 70.0% provided for in GACC’s underwriting guidelines for hospitality properties. GACC’s decision to include the Mortgage Loan in the transaction was based on the U/W NCF DSCR of 1.66x in comparison to a 1.50x U/W NCF DSCR provided for in GACC’s underwriting guidelines for hospitality properties, and the LTV at the maturity date is expected to be 58.5%. In addition, the Mortgaged Property has a history of strong performance and since 2010 has outperformed its competitive set in every category achieving greater than 110% ADR, Occupancy and RevPAR penetration levels in each year.
With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Sonora Cascade MHC, representing approximately 0.5% of the Initial Outstanding Pool Balance, theCut-off Date LTV ratio is 73.3% in comparison to an LTV of 70.0% provided for in GACC’s underwriting guidelines for manufactured housing properties. GACC’s decision to include the Mortgage Loan in the transaction was based on the U/W NCF DSCR of 1.45x in comparison to a 1.25x U/W NCF DSCR provided for in GACC’s underwriting guidelines for manufactured housing properties, and the LTV at the maturity date is expected to be 58.9%. In addition, the sponsor has owned the property for over 10 years and currently owns five manufactured housing communities encompassing over 641 homesites in California and Oregon.
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Compliance with Rule 15Ga-1 under the Exchange Act
GACC most recently filed a Form ABS-15G with the Securities and Exchange Commission (the “SEC”) pursuant to Rule 15Ga-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on February 10, 2015. GACC’s “Central Index Key” number is 0001541294. The following table provides information regarding the demand, repurchase and replacement history with respect to the mortgage loans securitized by GACC during the period from and including July 1, 2011 to and including December 31, 2014:
% of principal balance | Check if Registered | Name of Originator | Total Assets in ABS by Originator(1) | Assets That Were Subject of Demand | Assets That Were Repurchased or Replaced | Assets Pending Repurchase or Replacement (due to expired cure period) | Demand in Dispute | Demand Withdrawn | Demand Rejected | Notes | |||||||||||||||||||||
# | $ | % of principal balance | # | $ | % of principal balance | # | $ | % of principal balance | # | $ | % of principal balance | # | $ | % of principal balance | # | $ | # | $ | % of principal balance | ||||||||||||
Asset Class: Commercial Mortgage Pass-Through Certificates | |||||||||||||||||||||||||||||||
GE Commercial Mortgage Corporation, Series 2007-C1 Trust (CIK # 0001395290) | X | German American Capital Corporation | 34 | 1,551,253,831 | 39.24 | 1 | 26,180,737 | 0.78 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 1 | 26,180,737 | 0.78 | (2) | |||||||
Total by Issuing Entity | 34 | 1,551,253,831 | 39.24 | 1 | 26,180,737 | 0.78 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 1 | 26,180,737 | 0.78 | ||||||||||
Total by Asset Class | 34 | 1,551,253,831 | 39.24 | 1 | 26,180,737 | 0.78 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 1 | 26,180,737 | 0.78 | (3) |
(1) | The dollar amounts and percentages presented in this column are each as of the applicable securitization date. | |
(2) | The repurchase demand refers to the1604 Broadwayloan, which represented 0.78% of the outstanding principal balance of the asset pool as of the applicable securitization date. The repurchase demand was rejected. In the columns entitled “Assets That Were Subject of Demand” and “Demand Rejected,” the dollar amount and percentage presented are as of December 31, 2011. | |
(3) | In the columns entitled “Assets That Were Subject of Demand” and “Demand Rejected,” the percentages presented are in relation to the total outstanding principal balance of the related asset pool as of December 31, 2011. | |
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The Bank of New York Mellon
General
The Bank of New York Mellon (“BNY Mellon”) is an FDIC-insured, New York state-chartered bank and a member of the Federal Reserve System. It is subject to supervision and regulation by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the New York State Department of Financial Services. BNY Mellon offers a wide range of banking services to its customers, both domestically and internationally. BNY Mellon is a wholly-owned bank subsidiary of The Bank of New York Mellon Corporation, a Delaware corporation whose principal office is located in New York, New York. Additional information, including the most recent annual report on Form 10-K for the year ended December 31, 2014, of The Bank of New York Mellon Corporation, and additional annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such reports may be obtained without charge at BNY Mellon’s website at www.bnymellon.com or at the SEC’s website at www.sec.gov, as soon as reasonably practicable after filed with or furnished to the SEC pursuant to Section 13(a) of the U.S. Securities Exchange Act of 1934, as amended. None of the documents that The Bank of New York Mellon Corporation files with the SEC or any of the information on, or accessible through, the SEC’s website or BNY Mellon’s website, is part of, or incorporated by reference into, this free writing prospectus.
BNY Mellon’s Securitization Program
BNY Mellon underwrites and originates mortgage loans secured by commercial or multifamily properties throughout the United States. BNY Mellon has originated commercial and multifamily mortgage loans since 1967, and has been engaged in originating commercial and multifamily mortgage loans specifically for inclusion in commercial mortgaged-backed securitization (“CMBS”) transactions since 2014. As of August 31, 2015, BNY Mellon had securitized approximately $460 million of commercial mortgage loans for inclusion in CMBS transactions. In its capacity as a “sponsor”, BNY Mellon originates, co-originates or acquires mortgage loans and, together with other sponsors, participates in CMBS transactions by transferring such mortgage loans to an unaffiliated third-party depositor, which such depositor transfers the mortgage loans to the issuing entity.
BNY Mellon’s commercial mortgage loans that are originated for sale into CMBS transactions are generally fixed-rate and secured by retail, office, multifamily, industrial, mixed use, and hospitality properties.
Neither BNY Mellon nor any of its affiliates acts as a servicer of the commercial mortgage loans it securitizes. Instead, BNY Mellon generally sells the right to be appointed servicer of its securitized loans to third party servicers. Servicing responsibilities are typically transferred from the third party interim servicer to the master servicer of the securitization trust at the closing of the securitization. In some instances, the interim servicer may retain primary servicing.
Review of BNY Mellon Mortgage Loans
Overview. BNY Mellon, in its capacity as the sponsor of the BNY Mellon mortgage loans (the “BNY Mellon Mortgage Loans”), has conducted a review of the BNY Mellon Mortgage Loans in connection with the securitization described in this free writing prospectus. The review of the BNY Mellon Mortgage Loans was performed by a deal team comprised of real estate and securitization professionals who are employees of BNY Mellon (each a “BNY Member” as defined below) and also includes professionals who are employees of IH Capital, LLC (with whom BNY Mellon has an exclusive consulting agreement under which IH Capital, LLC provides mortgage sourcing, securitization and related services to BNY Mellon to assist in BNY Mellon’s origination of commercial mortgage loans), and / or one or more of BNY Mellon’s affiliates (collectively, the “BNY Mellon Deal Team”). Notwithstanding the possible presence of persons that are not employees of BNY Mellon on the BNY Mellon Deal Team with respect to any particular mortgage loan, the BNY Mellon Deal team with respect to each mortgage loan includes at least one BNY
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Mellon employee (each a “BNY Member”), and all credit review and loan and credit approval decisions ultimately made by the BNY Mellon Deal Team with respect to any mortgage loan must be approved by the applicable BNY Member. The review procedures described below were employed with respect to all of the BNY Mellon Mortgage Loans, except that certain review procedures were only relevant to the large loan disclosures in this free writing prospectus, as further described below. No sampling procedures were used in the review process.
Database. To prepare for securitization, the BNY Member and other members of the BNY Mellon Deal Team updated BNY Mellon’s internal origination database of loan-level and property-level information relating to each BNY Mellon Mortgage Loan. The database was compiled from, among other sources, the related mortgage loan documents, third party appraisals (as well as environmental reports, engineering assessments and seismic reports, if applicable), zoning reports, evidence of insurance coverage or summaries of the same prepared by an outside insurance consultant, borrower supplied information (including, but not limited to, rent rolls, leases, operating statements and budgets) and information collected by BNY Mellon, during the underwriting process. After origination or acquisition of each BNY Mellon Mortgage Loan, BNY Mellon updated the information in the database with respect to such BNY Mellon Mortgage Loan based on updates provided by the third party interim servicer relating to loan payment status and escrows, updated operating statements, rent rolls and leasing activity, and information otherwise brought to the attention of, or known by, the BNY Member and other members of the BNY Mellon Deal Team.
A data tape (the “BNY Mellon Data Tape”) containing detailed information regarding each BNY Mellon Mortgage Loan was created from the information in the database referred to in the prior paragraph. The BNY Mellon Data Tape was used by BNY Mellon to provide the numerical information regarding the BNY Mellon Mortgage Loans in this free writing prospectus.
Data Comparison and Recalculation. BNY Mellon engaged a third party accounting firm to perform certain data comparison and recalculation procedures designed by BNY Mellon relating to information in this free writing prospectus regarding the BNY Mellon Mortgage Loans. These procedures included:
· | comparing the information in the BNY Mellon Data Tape against various source documents provided by BNY Mellon; | |
· | comparing numerical information regarding the BNY Mellon Mortgage Loans and the related Mortgaged Properties disclosed in this free writing prospectus against the BNY Mellon Data Tape; and | |
· | recalculating certain percentages, ratios, formulae and other information relating to the BNY Mellon Mortgage Loans disclosed in this free writing prospectus. |
Legal Review. BNY Mellon engaged law firms involved in the origination and securitization of its mortgage loans to conduct certain legal reviews of the BNY Mellon Mortgage Loans for disclosure in the free writing prospectus. In anticipation of the securitization of each BNY Mellon Mortgage Loan, origination counsel prepared a loan and property summary that sets forth salient loan terms and summarizes material deviations from material provisions of BNY Mellon’s standard form loan documents. In addition, origination counsel for each BNY Mellon Mortgage Loan reviewed BNY Mellon’s representations and warranties set forth on Annex G to this free writing prospectus and, if applicable, identified exceptions to those representations and warranties.
Securitization counsel was also engaged to assist in the review of the BNY Mellon Mortgage Loans. Such assistance included, among other things, a review of (i) an asset summary report for each BNY Mellon Mortgage Loan, (ii) due diligence questionnaires completed by origination counsel and members of the BNY Mellon Deal Team and (iii) exceptions to representations and warranties compiled by origination counsel. Securitization counsel also reviewed the property release provisions (other than the partial defeasance provisions), if any, for each BNY Mellon Mortgage Loan with multiple Mortgaged Properties or, to the extent identified by origination counsel, for each BNY Mellon Mortgage Loan with permitted outparcel releases or similar releases for compliance with the REMIC provisions.
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Origination counsel and/or securitization counsel reviewed the loan summaries for those of the BNY Mellon Mortgage Loans included in the 10 largest Mortgage Loans in the mortgage pool, and the abbreviated loan summaries for those of the BNY Mellon Mortgage Loans included in the next 10 largest Mortgage Loans in the mortgage pool, which loan summaries and abbreviated loan summaries are incorporated in “Annex B—Description of the Top 20 Mortgage Loans” in this free writing prospectus.
Other Review Procedures. In connection with the origination of each BNY Mellon Mortgage Loan, the BNY Member and other members of the BNY Mellon Deal Team, together with the related origination counsel, conducted a search with respect to each borrower principal under the related BNY Mellon Mortgage Loan to determine whether it had filed for bankruptcy. With respect to any material pending litigation that existed at the origination of any BNY Mellon Mortgage Loan relating to any borrower principal or Mortgaged Property, updates were requested from the related borrower, origination counsel and/or borrower’s litigation counsel. If the BNY Member or any other member of the BNY Mellon Deal Team became aware of a significant natural disaster in the vicinity of any Mortgaged Property securing a BNY Mellon Mortgage Loan, updated status information was obtained with respect to the related Mortgaged Property from the related borrower to confirm no material damage to the Mortgaged Property.
With respect to the BNY Mellon Mortgage Loans originated by BNY Mellon, the BNY Member consulted with each member of the BNY Mellon Deal Team and the applicable BNY Mellon Mortgage Loan origination team to confirm that the BNY Mellon Mortgage Loans were originated or acquired in compliance with the origination and underwriting criteria described below under “—BNY Mellon’s Underwriting Standards” as well as to identify any material deviations from those origination and underwriting criteria. See “—Exceptions to BNY Mellon’s Disclosed Underwriting Guidelines” below.
Findings and Conclusions. Based on the foregoing review procedures, BNY Mellon determined that the disclosure regarding the BNY Mellon Mortgage Loans in this free writing prospectus is accurate in all material respects. BNY Mellon also determined that the BNY Mellon Mortgage Loans were originated in accordance with BNY Mellon’s origination procedures and underwriting criteria, except as disclosed under “—Exceptions to BNY Mellon’s Disclosed Underwriting Guidelines” in this free writing prospectus. BNY Mellon attributes to itself all findings and conclusions resulting from the foregoing review procedures.
Review Procedures in the Event of a Mortgage Loan Substitution. BNY Mellon will perform a review of any mortgage loan that it elects to substitute for a mortgage loan in the pool in connection with a material breach of a representation or warranty or a material document defect. BNY Mellon, and, if appropriate, its legal counsel, will review the mortgage loan documents and servicing history of the substitute mortgage loan to confirm it meets each of the criteria required under the terms of the related Mortgage Loan Purchase Agreement and the Pooling and Servicing Agreement (the “Qualification Criteria”). BNY Mellon will engage a third party accounting firm to compare the Qualification Criteria against the underlying source documentation to verify the accuracy of the review by BNY Mellon and to confirm any numerical and/or statistical information to be disclosed in any required filings under the Exchange Act. Legal counsel will also be engaged by BNY Mellon to render any tax opinion required in connection with the substitution.
BNY Mellon’s Underwriting Standards
General. BNY Mellon’s commercial mortgage loans are generally originated in accordance with the underwriting criteria described below; however, variations from these guidelines may be implemented as a result of various conditions, including each mortgage loan’s specific terms, the quality or location of the underlying real estate, the property’s tenancy profile, the background or financial strength of the borrower/loan sponsor, or any other pertinent information deemed material by BNY Mellon. Therefore, this general description of BNY Mellon’s underwriting standards is not intended as a representation that every BNY Mellon mortgage loan complies entirely with all criteria set forth below. For a description of any material exceptions to the underwriting guidelines in this free writing prospectus, if any, see “—Exceptions to BNY Mellon’s Disclosed Underwriting Guidelines” below.
The credit underwriting process for each BNY Mellon mortgage loan is performed by the BNY Member with the support of other members of the BNY Mellon Deal Team and, in some cases, third party
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due diligence providers. BNY Mellon’s credit underwriting process and any related third party due diligence provider’s work product with respect to any particular mortgage loan is ultimately subject to oversight, review and approval by the related BNY Member. The BNY Member and other members of the BNY Mellon Deal Team are required to conduct a thorough review of the related mortgaged property, which typically includes an examination of historical operating statements, rent rolls, tenant leases, current and historical real estate tax information, insurance policies and/or schedules, and third-party reports pertaining to appraisal/valuation, zoning, environmental status and physical condition/seismic/engineering.
Property Analysis. The BNY Member and other members of the BNY Mellon Deal Team perform, or cause to be performed, a site inspection to evaluate the location and quality of the related mortgaged properties. Such inspection generally includes an evaluation of functionality, design, attractiveness, visibility and accessibility, as well as location to major thoroughfares, transportation centers, employment sources, retail areas and educational or recreational facilities. BNY Mellon assesses the submarket in which the property is located to evaluate competitive or comparable properties as well as market trends. In addition, BNY Mellon evaluates the property’s age, physical condition, operating history, lease and tenant mix, and management.
Cash Flow Analysis. The BNY Member and other members of BNY Mellon Deal Team perform a detailed review of the financial status, credit history and background of the borrower and certain key principals through financial statements, income tax returns, credit reports, criminal/background investigations, and specific searches for judgments, liens, bankruptcy and pending litigation. Circumstances may also warrant an examination of the financial strength and credit of key tenants as well as other factors that may impact the tenants’ ongoing occupancy or ability to pay rent. Determinations are also made regarding the implementation of appropriate loan terms to structure in a manner to mitigate risks, resulting in features such as ongoing escrows or upfront reserves, letters of credit, lockboxes/cash management or guarantees.
Debt Service Coverage Ratio and Loan-to-Value Ratio. BNY Mellon’s underwriting includes a calculation of the debt service coverage ratio and the loan-to-value ratio in connection with the origination of a mortgage loan. BNY Mellon’s underwriting standards generally require a minimum debt service coverage ratio of 1.25x and maximum loan-to-value ratio of 80%.
The debt service coverage ratio will generally be calculated based on the underwritten net cash flow from the property in question as determined by the BNY Mellon Deal Team and ultimately approved by the BNY Member and payments on the mortgage loan based on actual principal and/or interest due on the loan. However, underwritten net cash flow is often a highly subjective number based on a variety of assumptions regarding, and adjustments to, revenues and expenses with respect to the related real property collateral. For example, when calculating the debt service coverage ratio for a commercial or multifamily mortgage loan, BNY Mellon may utilize annual net cash flow that was calculated based on assumptions regarding projected future rental income, expenses and/or occupancy. There is no assurance that the foregoing assumptions made with respect to any prospective commercial or multifamily mortgage loan will, in fact, be consistent with actual property performance. In addition, with respect to certain mortgage loans originated by BNY Mellon, there may exist subordinate mortgage debt, mezzanine debt or preferred equity. Such mortgage loans may have a lower debt service coverage ratio and/or a higher loan-to-value ratio if such subordinate, mezzanine debt or preferred equity is taken into account. Additionally, certain mortgage loans may provide for only interest payments prior to maturity, or for an interest-only period during a portion of the term of the mortgage loan.
The loan-to-value ratio, in general, is the ratio, expressed as a percentage, of the then-outstanding principal balance of the mortgage loan divided by the estimated value of the related property based on an appraisal.
Appraisal. For each mortgaged property, BNY Mellon obtains a current (within 6 months of the origination date of the mortgage loan) full narrative appraisal conforming at least to the requirements of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”). The appraisal is based on the current use of the mortgaged property and must include an estimate of the then-current
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market value of the property “as-is” in its then-current condition although in certain cases, BNY Mellon may also obtain a value on an “as-stabilized” basis reflecting factors specific to the related mortgage loan. BNY Mellon then determines the loan-to-value ratio of the mortgage loan at the date of origination or, if applicable, in connection with its acquisition, in each case based on the value set forth in the appraisal.
Evaluation of Borrower.BNY Mellon evaluates the borrower and its principals with respect to credit history and prior experience as an owner and operator of commercial real estate properties. The evaluation will generally include obtaining and reviewing a credit report or other reliable indication of the borrower’s financial capacity; obtaining and verifying credit references and/or business and trade references; and obtaining and reviewing certifications provided by the borrower as to prior real estate experience and current contingent liabilities. Finally, although the mortgage loans generally are non-recourse in nature, in the case of certain mortgage loans, the borrower and certain principals of the borrower may be required to assume legal responsibility for liabilities as a result of, among other things, fraud, misrepresentation, misappropriation or conversion of funds and breach of environmental or hazardous materials requirements. The BNY Member, in collaboration with other members of the BNY Mellon Deal Team, evaluates the financial capacity of the borrower and such principals to meet any obligations that may arise with respect to such liabilities.
Environmental Site Assessment. BNY Mellon will require a Phase I environmental assessment with respect to the real property collateral for a prospective commercial or multifamily mortgage loan. However, when circumstances warrant, BNY Mellon may utilize an update of a prior environmental assessment, a transaction screen or a desktop review. Alternatively, BNY Mellon might forego an environmental assessment in limited circumstances, such as when it has obtained the benefits of an environmental insurance policy or an environmental guarantee. An environmental assessment conducted at any particular real property collateral will not necessarily uncover all potential environmental issues. In some instances, BNY Mellon will engage an independent third party to review an environmental assessment and provide a summary of its findings. Depending on the findings of the initial environmental assessment, BNY Mellon may require additional record searches or environmental testing, such as a Phase II environmental assessment with respect to the real property collateral.
Engineering Assessment. In connection with the origination process, BNY Mellon will require that an engineering firm inspect the real property collateral for any prospective multifamily or commercial mortgage loan to assess the structure, exterior walls, roofing, interior structure and/or mechanical and electrical systems. Based on the resulting report, BNY Mellon will determine the appropriate response to any recommended repairs, corrections or replacements and any identified deferred maintenance.
Title Insurance Policy. The borrower is required to provide, and the BNY Member and others on the BNY Mellon Deal Team review, a title insurance policy for each mortgaged property. The title insurance policy must meet the following requirements: (a) the policy must be written by a title insurer licensed to do business in the jurisdiction where the mortgaged property is located; (b) the policy must be in an amount equal to the original principal balance of the mortgage loan; (c) the protection and benefits must run to the mortgagee and its successors and assigns; (d) the policy should be written on a standard policy form of the American Land Title Association or equivalent policy promulgated in the jurisdiction where the mortgaged property is located; and (e) the legal description of the mortgaged property in the title policy must conform to that shown on the survey of the mortgaged property, where a survey has been required.
Property Insurance. The borrower is required to provide, and the BNY Member and others on the BNY Mellon Deal Team review, certificates of required insurance with respect to the mortgaged property. Such insurance may include: (1) commercial general liability insurance for bodily injury or death and property damage; (2) a fire and extended perils insurance policy providing “special” form coverage including coverage against loss or damage by fire, lightning, explosion, smoke, windstorm and hail, riot or strike and civil commotion; (3) if applicable, boiler and machinery coverage; (4) if the mortgaged property is located in a flood hazard area, flood insurance; and (5) such other coverage as BNY Mellon may require based on the specific characteristics of the mortgaged property.
Seismic Report. A seismic report is required for all properties located in seismic zones 3 or 4.
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Zoning and Building Code Compliance. In connection with the origination of a commercial or multifamily mortgage loan, the originator will examine whether the use and occupancy of the related real property collateral is in material compliance with zoning, land-use, building rules, regulations and orders then applicable to that property. Evidence of this compliance may be in the form of one or more of the following: a zoning report, legal opinions, surveys, recorded documents, temporary or permanent certificates of occupancy, letters from government officials or agencies, title insurance endorsements, engineering or consulting reports and/or representations by the related borrower.
Escrow Requirements. BNY Mellon requires certain borrowers to fund various escrows for taxes, insurance, capital expenses and replacement reserves, which reserves in many instances will be limited to certain capped amounts. In addition, BNY Mellon may identify certain risks that warrant additional escrows or holdbacks for items such as leasing-related matters, deferred maintenance, environmental remediation or unfunded obligations, which escrows or holdbacks would be released upon satisfaction of the applicable conditions. Springing escrows may also be structured for identified risks such as specific rollover exposure, to be triggered upon the non-renewal of one or more key tenants. Escrows are evaluated on a case-by-case basis and are not required for all commercial mortgage loans originated by BNY Mellon. The typical required escrows for mortgage loans originated by BNY Mellon are as follows:
· | Taxes—Typically an initial deposit and monthly escrow deposits equal to 1/12th of the annual property taxes (based on the most recent property assessment and the current millage rate) are required to provide BNY Mellon with sufficient funds to satisfy all taxes and assessments. BNY Mellon may waive this escrow requirement under appropriate circumstances including, but not limited to, (i) where there is institutional sponsorship or a high net worth individual, or (ii) where a tenant is required to pay the taxes directly. | |
· | Insurance—If the property is insured under an individual policy (i.e., the property is not covered by a blanket policy), typically an initial deposit and monthly escrow deposits equal to 1/12th of the annual property insurance premium are required to provide the lender with sufficient funds to pay all insurance premiums. BNY Mellon may waive this escrow requirement under appropriate circumstances, including, but not limited to, (i) where an investment grade tenant is responsible for paying all insurance premiums, (ii) where there is institutional sponsorship or a high net worth individual, or (iii) where a property is covered by a blanket insurance policy maintained by the borrower or loan sponsor. | |
· | Replacement Reserves— Replacement reserves are generally calculated in accordance with the expected useful life of the components of the property during the term of the mortgage loan plus two years. BNY Mellon relies on information provided by an independent engineer to make this determination. BNY Mellon may waive this escrow requirement under appropriate circumstances, including, but not limited to, (i) where there is institutional sponsorship or a high net worth individual, or (ii) where an investment grade tenant is responsible for replacements under the terms of its lease. | |
· | Completion Repair/Environmental Remediation— Typically, a completion repair or remediation reserve is required where an environmental or engineering report suggests that such reserve is necessary. Upon funding of the applicable mortgage loan, BNY Mellon generally requires that at least 100% - 125% of the estimated costs of repairs or replacements be reserved and generally requires that repairs or replacements be completed within a year after the funding of the applicable mortgage loan. BNY Mellon may waive this escrow requirement under appropriate circumstances, including, but not limited to, (i) where a secured creditor insurance policy or borrower insurance policy is in place, (ii) where an investment grade party has agreed to take responsibility, and pay, for any required repair or remediation or (iii) recommended costs do not exceed a de minimis amount. | |
· | Furniture, Fixtures and Equipment—A reserve for furniture, fixtures and equipment expenses may be required to be funded during the term of the mortgage loan based on the suggested reserve |
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amount from an independent, third-party property condition or engineering report, or based on certain minimum requirements depending on the property type. | ||
· | Tenant Improvement/Lease Commissions— In most cases, various tenants have lease expirations within the mortgage loan term. To mitigate this risk, special reserves may be required to be funded either at closing of the mortgage loan and/or during the mortgage loan term to cover certain anticipated leasing commission, free rent periods or tenant improvement costs which might be associated with re-leasing the space occupied by such tenants. BNY Mellon may waive this escrow requirement under appropriate circumstances, including, but not limited to, (i) where no material leases expire within the mortgage loan term, or the lease roll is not concentrated, (ii) where tenant improvement costs are the responsibility of tenants, (iii) where rents at the mortgaged property are considered to be sufficiently below market, or (iv) where there is institutional sponsorship or a high net worth individual. |
Notwithstanding the foregoing discussion under this caption “—BNY Mellon’s Underwriting Standards”, one or more of the mortgage loans contributed to this securitization by BNY Mellon may vary from, or may not fully comply with, BNY Mellon’s underwriting guidelines described above. In addition, in the case of one or more of the mortgage loans contributed to this securitization by BNY Mellon, BNY Mellon may not have strictly applied these underwriting guidelines as the result of a case-by-case permitted exception based upon other compensating or mitigating factors.
Exceptions to BNY Mellon’s Disclosed Underwriting Guidelines.
The BNY Mellon Mortgage Loans were originated in accordance with the applicable underwriting guidelines set forth above.
Compliance with Rule 15Ga-1 under the Exchange Act
BNY Mellon most recently filed a Form ABS-15G on May 8, 2015. BNY Mellon’s “Central Index Key” number is 0001497973. With respect to the period from and including January 1, 2015 to and including June 30, 2015, BNY Mellon does not have any activity to report as required by Rule 15Ga-1 under the Exchange Act with respect to demand, repurchase or replacement requests in connection with breaches of representations and warranties made by it as a sponsor of commercial mortgage securitizations.
KeyBank National Association
General
KeyBank National Association (“KeyBank”) is a national banking association and wholly-owned bank subsidiary of KeyCorp (NYSE: KEY), an Ohio corporation. The principal office of KeyBank is located at Key Tower, 127 Public Square, Cleveland, Ohio 44114, and its telephone number is (216) 689-6300. KeyBank offers a wide range of consumer and commercial banking services to its customers, including commercial real estate financing, throughout the United States. It is chartered and its business is subject to examination and regulation by the Office of the Comptroller of the Currency.
In 2014, KeyBank’s Real Estate Capital Group originated a total of $12.1 billion in permanent, bridge, development and construction commercial mortgage loans from 23 offices nationwide. Of this total, $5.4 billion commercial mortgage loans were originated for sale through commercial mortgage-backed securities (“CMBS”) transactions, acquisition by Fannie Mae or Freddie Mac, sale of Ginnie Mae certificates to third party investors, or sale to life insurance companies and pension funds.
KeyBank’s Securitization Program
KeyBank underwrites and originates mortgage loans secured by commercial or multifamily properties and, together with other sponsors and loan sellers, participates in securitization transactions by
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transferring the mortgage loans to an unaffiliated third party acting as depositor, which then transfers the mortgage loans to the issuing entity.
KeyBank has been engaged in originating commercial and multifamily mortgage loans for inclusion in CMBS transactions since 2000. As of August 30, 2015, KeyBank had originated approximately $14.587 billion of commercial mortgage loans that have been securitized in 67 securitized transactions. KeyBank’s commercial mortgage loans that are originated for sale into a CMBS transaction (or through a sale of whole loan interests to third party investors) are generally fixed-rate and secured by retail, office, multifamily, industrial, self storage, manufactured housing, and hospitality properties. KeyBank also originates other commercial and multifamily mortgage loans that are not securitized, including subordinated and mezzanine loans.
In addition to the origination of commercial and multifamily mortgage loans, KeyBank acts as the primary servicer of many of KeyBank’s commercial and multifamily mortgage loans that are securitized. KeyBank provides interim, primary, master and special servicing for institutional clients and commercial and multifamily securitized products, including CMBS transactions in which KeyBank has sold commercial mortgage loans.
Review of KeyBank Mortgage Loans
Overview. KeyBank has conducted a review of the mortgage loans (the “KeyBank Mortgage Loans”) it is contributing in the securitization described in this free writing prospectus. The review of the KeyBank Mortgage Loans was performed by a team comprised of real estate and securitization professionals who are employees of KeyBank or one or more of its affiliates (the “KeyBank Review Team”). The review procedures described below were employed with respect to all of the KeyBank Mortgage Loans. No sampling procedures were used in the review process.
Database. To prepare for securitization, members of the KeyBank Review Team created a database of loan-level and property-level information relating to each KeyBank Mortgage Loan. The database was compiled from, among other sources, the related mortgage loan documents, appraisals, environmental assessment reports, property condition reports, seismic studies, zoning reports, insurance review summaries, borrower-supplied information (including, but not limited to, rent rolls, leases, operating statements and budgets) and information collected by the KeyBank Review Team during the underwriting process. After origination of each KeyBank Mortgage Loan, the KeyBank Review Team updated the information in the database with respect to such KeyBank Mortgage Loan based on applicable information from KeyBank, as servicer of the KeyBank Mortgage Loans, relating to loan payment status and escrows, updated operating statements, rent rolls and leasing activity, and information otherwise brought to the attention of the KeyBank Review Team.
A data tape (the “KeyBank Data Tape”) containing detailed information regarding each KeyBank Mortgage Loan was created from the information in the database referred to in the prior paragraph. The KeyBank Data Tape was used to provide the numerical information regarding the KeyBank Mortgage Loans in this free writing prospectus.
Data Comparison and Recalculation. KeyBank engaged a third party accounting firm to perform certain data comparison and recalculation procedures, the nature, extent and timing of which were designed by KeyBank, relating to information in this free writing prospectus regarding the KeyBank Mortgage Loans. These procedures included:
· | comparing the information in the KeyBank Data Tape against various source documents provided by KeyBank that are described above under “—Database”; | |
· | comparing numerical information regarding the KeyBank Mortgage Loans and the related Mortgaged Properties disclosed in this free writing prospectus against the KeyBank Data Tape; and |
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· | recalculating certain percentages, ratios and other formulae relating to the KeyBank Mortgage Loans disclosed in this free writing prospectus. |
Legal Review. KeyBank engaged legal counsel in connection with this securitization to provide, among other things, (i) a review of the representations and warranties and exception reports relating to the KeyBank Mortgage Loans prepared by origination counsel, (ii) a review and assistance in the completion by the KeyBank Review Team of a due diligence questionnaire relating to the KeyBank Mortgage Loans, and (iii) a review of certain loan documents with respect to the KeyBank Mortgage Loans. Securitization counsel also reviewed the property release provisions, if any, for each KeyBank mortgage loan with multiple Mortgaged Properties for compliance with the REMIC provisions.
Counsel also assisted in the preparation of the risk factors and mortgage loan summaries set forth in this free writing prospectus, based on their review of pertinent sections of the related mortgage loan documents.
Other Review Procedures. With respect to any material pending litigation of which KeyBank was aware at the origination of any KeyBank Mortgage Loan, KeyBank requested updates from the related borrower, origination counsel and/or borrower’s litigation counsel. If KeyBank became aware of a significant natural disaster in the immediate vicinity of any Mortgaged Property securing a KeyBank Mortgage Loan, KeyBank obtained information on the status of the Mortgaged Property from the related borrower to confirm no material damage to the Mortgaged Property.
The KeyBank Review Team, with the assistance of counsel engaged in connection with this securitization, also reviewed the KeyBank Mortgage Loans to determine whether any KeyBank Mortgage Loan materially deviated from the underwriting guidelines set forth under “—KeyBank’s Underwriting Guidelines and Process” below. See “—Exceptions” below.
Findings and Conclusions. Based on the foregoing review procedures, KeyBank determined that the disclosure regarding the KeyBank Mortgage Loans in this free writing prospectus is accurate in all material respects. KeyBank also determined that the KeyBank Mortgage Loans were originated in accordance with KeyBank’s origination procedures and underwriting criteria, except as described below under “—Exceptions” below. KeyBank attributes to itself all findings and conclusions resulting from the foregoing review procedures.
KeyBank’s Underwriting Guidelines and Process
General. KeyBank has developed guidelines establishing certain procedures with respect to underwriting the KeyBank Mortgage Loans. All of the KeyBank Mortgage Loans were generally underwritten in accordance with the guidelines below. In some instances, one or more provisions of the guidelines were waived or modified by KeyBank at origination where it was determined not to adversely affect the related mortgage loan originated by it in any material respect. The KeyBank Mortgage Loans to be included in the trust were originated by KeyBank generally in accordance with the CMBS program of KeyBank. For a description of any material exceptions to the underwriting guidelines in this free writing prospectus, see “—Exceptions” below.
Notwithstanding the discussion below, given the differences between individual commercial mortgaged properties, the underwriting and origination procedures and the credit analysis with respect to any particular commercial mortgage loan may significantly differ from one asset to another, and will be driven by circumstances particular to that property, including, among others, its type, current and alternative uses, size, location, market conditions, reserve requirements and additional collateral, tenants and leases, borrower identity, sponsorship, and/or performance history. However, except as described in the exceptions to the underwriting guidelines (see “—Exceptions” below), the underwriting of the KeyBank Mortgage Loan will conform to the general guidelines described below.
Property Analysis. KeyBank performs or causes to be performed a site inspection to evaluate the location and quality of the related Mortgaged Properties. Such inspection generally includes an evaluation
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of functionality, attractiveness, visibility and accessibility, as well as location to major thoroughfares, transportation centers, employment sources, and other applicable demand drivers. KeyBank assesses the submarket in which the property is located to evaluate competitive or comparable properties as well as market trends. In addition, KeyBank evaluates the property’s age, physical condition, operating history, lease and tenant mix, and management.
Cash Flow Analysis. KeyBank reviews, among other things, historical operating statements, rent rolls, tenant leases and/or budgeted income and expense statements provided by the borrower and makes adjustments in order to determine a debt service coverage ratio.
Evaluation of the Borrower. KeyBank evaluates the borrower and its principals with respect to credit history and prior experience as an owner and operator of commercial real estate properties. The evaluation will generally include a review of anti-money laundering or OFAC checks, obtaining and reviewing a credit report or other reliable indication of the borrower’s financial capacity; obtaining and verifying credit references and/or business and trade references; and obtaining and reviewing certifications provided by the borrower as to prior real estate experience and current contingent liabilities.
Loan Approval. All mortgage loans originated by KeyBank must be approved by a credit committee. The credit committee may approve a mortgage loan as recommended, request additional due diligence, modify the loan terms, or decline a prospective mortgage loan transaction.
Debt Service Coverage Ratio and LTV Ratio. KeyBank’s underwriting includes a calculation of debt service coverage ratio and loan-to-value ratio in connection with the origination of each mortgage loan.
Generally, the debt service coverage ratios for KeyBank mortgage loans will be equal to or greater than 1.30x;provided,however, variances may be made when consideration is given to circumstances particular to the mortgage loan (including amortization), the related mortgaged property (including tenant composition), loan-to-value ratio, reserves, borrower or other factors. Generally, the loan-to-value ratio for KeyBank mortgage loans will be equal to or less than 75%;provided,however, variances may be made when consideration is given to circumstances particular to the mortgage loan (including amortization), the related mortgaged property (including tenant composition), debt service coverage ratio, reserves, sponsorship or other factors.
Additional Debt. When underwriting a multifamily or commercial mortgage loan, KeyBank will take into account whether the mortgaged property and/or direct or indirect interest in a related borrower are encumbered by additional debt and will analyze the likely effect of that additional debt on repayment of the subject mortgage loan. It is possible that KeyBank or an affiliate will be the lender on that additional debt, and may either sell such debt to an unaffiliated third party or hold it in inventory.
Appraisals. KeyBank will, in most cases, require that the real property collateral for a prospective multifamily or commercial mortgage loan be appraised by a state certified appraiser, an appraiser belonging to the Appraisal Institute, a membership association of professional real estate appraisers, or an otherwise qualified appraiser. In addition, KeyBank will generally require that those appraisals be conducted in accordance with the Uniform Standards of Professional Appraisal Practices developed by The Appraisal Foundation, a not-for-profit organization established by the appraisal profession. Furthermore, the appraisal report will usually include or be accompanied by a separate letter that includes a statement by the appraiser that the guidelines in Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 were followed in preparing the appraisal.
Environmental Assessments. KeyBank will, in most cases, require a Phase I environmental assessment with respect to the real property collateral for a prospective multifamily or commercial mortgage loan. However, when circumstances warrant, KeyBank may utilize an update of a prior environmental assessment, a transaction screen or a desktop review. Alternatively, KeyBank might forego an environmental assessment in limited circumstances, such as when it has obtained the benefits of an environmental insurance policy or an environmental guarantee. An environmental assessment conducted at any particular real property collateral will not necessarily uncover all potential environmental issues. In some instances, KeyBank will engage an independent third party to review an environmental
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assessment and provide a summary of its findings. Depending on the findings of the initial environmental assessment, KeyBank may require additional record searches or environmental testing, such as a Phase II environmental assessment with respect to the real property collateral.
Engineering Assessments. In connection with the origination process, KeyBank may require that an engineering firm inspect the real property collateral for any prospective multifamily or commercial mortgage loan to assess the structure, exterior walls, roofing, interior structure and/or mechanical and electrical systems. Based on the resulting report, KeyBank will determine the appropriate response, if any, to any recommended repairs, corrections or replacements and any identified deferred maintenance.
Seismic Report. A seismic report is required for all Mortgaged Properties located in seismic zones 3 or 4.
Zoning and Building Code Compliance. In connection with the origination of a multifamily or commercial mortgage loan, KeyBank will generally consider whether the use and occupancy of the related real property collateral is in material compliance with zoning, land-use, building rules, regulations and orders then applicable to that property. Evidence of this compliance may be in the form of one or more of the following: legal opinions; surveys; recorded documents; temporary or permanent certificates of occupancy; letters from government officials or agencies, including applicable land use and zoning regulations; title insurance endorsements; engineering or consulting reports; and/or representations by the related borrower.
Escrow Requirements. KeyBank may require borrowers to fund various escrows for taxes, insurance, capital expenses and replacement reserves, which reserves in many instances will be limited to certain capped amounts. In addition, KeyBank may identify certain risks that warrant additional escrows or holdbacks for items such as leasing-related matters, deferred maintenance, environmental remediation or unfunded obligations, which escrows or holdbacks would be released upon satisfaction of the applicable conditions. Springing escrows may also be structured for identified risks such as specific rollover exposure, to be triggered upon the non-renewal of one or more key tenants. Escrows are evaluated on a case-by-case basis and are not required for all commercial mortgage loans originated by KeyBank. The typical required escrows for mortgage loans originated by KeyBank are as follows:
· | Taxes - Typically an initial deposit and monthly escrow deposits equal to 1/12th of the annual property taxes (based on the most recent property assessment and the current millage rate) are required to provide the lender with sufficient funds to satisfy all taxes and assessments. KeyBank may waive this escrow requirement under appropriate circumstances including, but not limited to, (i) where a tenant is required to pay the taxes directly, (ii) where there is institutional sponsorship or a high net worth individual, or (iii) where there is a low loan-to-value ratio (i.e., 65% or less). | |
· | Insurance - If the property is insured under an individual policy (i.e., the property is not covered by a blanket policy), typically an initial deposit and monthly escrow deposits equal to 1/12th of the annual property insurance premium are required to provide the lender with sufficient funds to pay all insurance premiums. KeyBank may waive this escrow requirement under appropriate circumstances, including, but not limited to, (i) where a property is covered by a blanket insurance policy maintained by the borrower or loan sponsor, (ii) where there is institutional sponsorship or a high net worth individual, (iii) where an investment grade tenant is responsible for paying all insurance premiums, or (iv) where there is a low loan-to-value ratio (i.e., 65% or less). | |
· | Replacement Reserves - Replacement reserves are generally calculated in accordance with the expected useful life of the components of the property during the term of the mortgage loan plus two years. KeyBank relies on information provided by an independent engineer to make this determination. KeyBank may waive this escrow requirement under appropriate circumstances, including, but not limited to, (i) where an investment grade tenant is responsible for replacements under the terms of its lease, (ii) where there is institutional sponsorship or a high net worth individual, or (iii) where there is a low loan-to-value ratio (i.e., 65% or less). |
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· | Completion Repair/Environmental Remediation - Typically, a completion repair or remediation reserve is required where an environmental or engineering report suggests that such reserve is necessary. Upon funding of the applicable mortgage loan, KeyBank generally requires that at least 100% - 125% of the estimated costs of repairs or replacements be reserved and generally requires that repairs or replacements be completed within a year after the funding of the applicable mortgage loan. KeyBank may waive this escrow requirement under appropriate circumstances, including, but not limited to, (i) where a secured creditor insurance policy or borrower insurance policy is in place, (ii) where an investment grade party has agreed to take responsibility, and pay, for any required repair or remediation or (iii) recommended costs do not exceed $50,000. | |
· | Tenant Improvement/Lease Commissions - In most cases, various tenants have lease expirations within the mortgage loan term. To mitigate this risk, special reserves may be required to be funded either at closing of the mortgage loan and/or during the mortgage loan term to cover certain anticipated leasing commissions or tenant improvement costs which might be associated with re-leasing the space occupied by such tenants. KeyBank may waive this escrow requirement under appropriate circumstances, including, but not limited to, (i) where there is institutional sponsorship or a high net worth individual, (ii) where tenant improvement costs are the responsibility of tenants, (iii) where rents at the mortgaged property are considered to be sufficiently below market, (iv) where no material leases expire within the mortgage loan term, or the lease roll is not concentrated or (v) where there is a low loan-to-value ratio (i.e., 65% or less). |
Exceptions. Other than as set forth below, the KeyBank mortgage loans were originated in accordance with the underwriting standards set forth above.
In the case of the mortgaged property identified on Annex A-1 to this free writing as Rockford Crossing, which secures a mortgage loan representing approximately 1.0% of the outstanding pool balance as of the cut-off date, the property condition report noted $103,500 in required repairs, however, the borrower was not required to fund an upfront reserve. The loan agreement requires that if the required repairs are not completed on or prior to March 4, 2016 (or in the case that the borrower is currently pursuing completion of the required repairs, September 4, 2016), then the borrower is required to deposit into a reserve account 125% of the required repairs amount set forth in the loan agreement (the “Required Repair Deposit Amount”). If the borrower fails to make the Required Repair Deposit Amount, a cash sweep event will occur and all excess cash will be swept into a reserve until the reserve is equal to 125% of the estimated required repairs that have not been completed at such time.
Compliance with Rule 15Ga-1 under the Exchange Act
KeyBank has filed its most recent Rule 15Ga-1 filing on January 30, 2015 and had no demand, repurchase, or replacement claims to report for the annual reporting period ending December 31, 2014 as a sponsor of commercial mortgage loan securitizations. Since KeyBank has no demand, repurchase or replacement claims as a sponsor of commercial mortgage loan securitizations to report KeyBank has no obligation to file quarterly reports. KeyBank’s Central Index Key is 0001089877. With respect to the period from and including July 1, 2012 to and including June 30, 2015, KeyBank does not have any activity to report as required by Rule 15Ga-1 under the Securities Exchange Act of 1934, as amended with respect to repurchase or replacement requests in connection with breaches of representations and warranties made by it as a sponsor of commercial mortgage securitizations.
The information set forth under “—KeyBank National Association” has been provided by KeyBank.
Cantor Commercial Real Estate Lending, L.P.
General
Cantor Commercial Real Estate Lending, L.P. (“CCRE Lending”) is a sponsor of, and a seller of certain mortgage loans (the “CCRE Mortgage Loans”) into, the securitization described in this free writing
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prospectus. CCRE Lending is a Delaware limited partnership and an affiliate of Cantor Fitzgerald & Co. and CastleOak Securities, L.P., two of the Underwriters, and Berkeley Point Capital LLC, a Primary Servicer. CCRE Lending was formed in 2010. Its general partner is Cantor Commercial Real Estate Holdings, LLC, and its limited partner is Cantor Commercial Real Estate Company, L.P. CCRE Lending’s executive offices are located at 110 East 59th Street, New York, New York 10022, telephone number (212) 938-5000.
According to its consolidated balance sheet (unaudited), as of June 30, 2015, Cantor Commercial Real Estate Company, L.P. and its consolidated subsidiaries (which include CCRE Lending) had total assets of approximately $2.046 billion, total liabilities of approximately $1.012 billion and total partners’ equity of approximately $1.034 billion. As of June 30, 2015, Cantor Commercial Real Estate Company, L.P. is a party to agreements related to $2.625 billion of master repurchase facilities.
CCRE Lending’s Loan Origination and Acquisition History
Since its founding in July 2010 through June 30, 2015, CCRE Lending has originated or acquired approximately 1,389 fixed and floating rate commercial, multifamily and manufactured housing community mortgage loans with an aggregate original principal balance of approximately $25.3 billion and has acted as a sponsor and mortgage loan seller on 46 fixed-rate and floating-rate commercial mortgage-backed securitization transactions.
In future transactions, it is anticipated that many of the commercial mortgage loans originated or acquired by CCRE Lending will be sold to securitizations in which CCRE Lending acts as a sponsor. CCRE Lending expects to originate and acquire both fixed rate and floating rate commercial mortgage loans which will be included in both public and private securitizations. CCRE Lending also expects to originate and acquire subordinate and mezzanine debt for investment, syndication or securitization.
Neither CCRE Lending nor any of its affiliates will insure or guarantee distributions on the Certificates. The Certificateholders will have no rights or remedies against CCRE Lending for any losses or other claims in connection with the Certificates or the CCRE Mortgage Loans except in respect of the repurchase and substitution obligations for Material Document Defects or the Material Breaches of representations and warranties made by CCRE Lending in the related Mortgage Loan Purchase Agreement as described under “The Pooling and Servicing Agreement—Representations and Warranties; Repurchase; Substitution” in this free writing prospectus.
Review of CCRE Mortgage Loans
Overview. CCRE Lending has conducted a review of the CCRE Mortgage Loans in connection with the securitization described in this free writing prospectus. The review of the CCRE Mortgage Loans was performed by a deal team comprised of real estate and securitization professionals (the “CCRE Deal Team”). The review procedures described below were employed with respect to all of the CCRE Mortgage Loans, except that certain review procedures were relevant only to the large loan disclosures in this free writing prospectus, as further described below. No sampling procedures were used in the review process.
Data Tape. To prepare for securitization, members of the CCRE Deal Team created a data tape (the “CCRE Data Tape”) containing detailed loan-level and property-level information regarding each CCRE Mortgage Loan. The CCRE Data Tape was compiled from, among other sources, the related Mortgage Loan Documents, appraisals, environmental reports, seismic reports, property condition reports, zoning reports, insurance policies, borrower-supplied information (including, but not limited to, rent rolls, leases, operating statements and budgets) and information collected by CCRE Lending during the underwriting process. The CCRE Deal Team updated the information in the CCRE Data Tape with respect to the CCRE Mortgage Loans from time to time based on updates provided by the related loan servicer relating to loan payment status and escrows, updated operating statements, rent rolls and leasing activity and information otherwise brought to the attention of the CCRE Deal Team. The CCRE Data Tape was used
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by the CCRE Deal Team in providing the numerical information regarding the CCRE Mortgage Loans in this free writing prospectus.
Data Comparison and Recalculation. CCRE Lending engaged a third party accounting firm to perform certain data comparison and recalculation procedures designed by CCRE Lending relating to information in this free writing prospectus regarding the CCRE Mortgage Loans. These procedures included:
· | comparing the information in the CCRE Data Tape against various source documents provided by CCRE Lending that are described above under “—Data Tape”; | |
· | comparing numerical information regarding the CCRE Mortgage Loans and the related Mortgaged Properties disclosed in this free writing prospectus against the CCRE Data Tape; and | |
· | recalculating certain percentages, ratios and other formulae relating to the CCRE Mortgage Loans disclosed in this free writing prospectus. |
Legal Review. CCRE Lending engaged various law firms to conduct certain legal reviews of the CCRE Mortgage Loans for disclosure in this free writing prospectus. In anticipation of the securitization of each CCRE Mortgage Loan originated by CCRE Lending, origination counsel prepared a loan summary that sets forth salient loan terms and summarizes material deviations from CCRE Lending’s standard form loan documents. In addition, origination counsel for each CCRE Mortgage Loan reviewed CCRE Lending’s representations and warranties set forth on Annex F to this free writing prospectus and, if applicable, identified exceptions to those representations and warranties.
Securitization counsel was also engaged to assist in the review of the CCRE Mortgage Loans. Such assistance included, among other things, a review of (i) a due diligence questionnaires completed by origination counsel and (ii) exceptions to representations and warranties compiled by origination counsel. Securitization counsel also reviewed the property release provisions (other than the partial defeasance provisions), if any, for each CCRE Mortgage Loan with multiple Mortgaged Properties or, to the extent identified by origination counsel, for each CCRE Mortgage Loan with permitted outparcel releases or similar releases for compliance with the REMIC provisions.
CCRE Lending prepared, and reviewed with originating counsel and/or securitization counsel, the loan summaries for those of the CCRE Mortgage Loans included in the 10 largest Mortgage Loans in the mortgage pool, and the abbreviated loan summaries for those of the CCRE Mortgage Loans included in the next 10 largest Mortgage Loans in the mortgage pool, which loan summaries and abbreviated loan summaries are incorporated in “Annex B—Description of the Top 20 Mortgage Loans” in this free writing prospectus.
Other Review Procedures. In connection with the origination of each CCRE Mortgage Loan, CCRE Lending conducted a search with respect to each borrower under the related CCRE Mortgage Loan to determine whether it filed for bankruptcy. With respect to any material pending litigation that existed at the origination of any CCRE Mortgage Loan, CCRE Lending requested updates from the related borrower, origination counsel and/or borrower’s litigation counsel. If CCRE Lending became aware of a significant natural disaster in the vicinity of any mortgaged property securing a CCRE Mortgage Loan, CCRE Lending obtained information on the status of the mortgaged property from the related borrower to confirm no material damage to the mortgaged property.
With respect to the CCRE Mortgage Loans originated by CCRE Lending, the CCRE Deal Team also consulted with the applicable CCRE Mortgage Loan origination team to confirm that the CCRE Mortgage Loans were originated in compliance with the origination and underwriting criteria described below under “—CCRE Lending’s Underwriting Standards”.
Findings and Conclusions. Based on the foregoing review procedures, CCRE Lending determined that the disclosure regarding the CCRE Mortgage Loans in this free writing prospectus is accurate in all material respects. CCRE Lending also determined that the CCRE Mortgage Loans were originated in
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accordance with CCRE Lending’s origination procedures and underwriting criteria. CCRE Lending attributes to itself all findings and conclusions resulting from the foregoing review procedures.
CCRE Lending’s Underwriting Standards
General. CCRE Lending’s commercial mortgage loans are generally originated in accordance with the underwriting criteria described below; however, variations from these guidelines may be implemented as a result of various conditions, including each loan’s specific terms, the quality or location of the underlying real estate, the property’s tenancy profile, the background or financial strength of the borrower/loan sponsor, or any other pertinent information deemed material by CCRE Lending. Therefore, this general description of CCRE Lending’s underwriting standards is not intended as a representation that every CCRE Mortgage Loan complies entirely with all criteria set forth below.
Loan Analysis. The credit underwriting process for each CCRE Lending loan is performed by a team comprised of real estate professionals that typically includes a senior member, originator, underwriter, transaction manager and loan closer. This team is required to conduct a thorough review of the related mortgaged property, which typically includes an examination of historical operating statements, rent rolls, tenant leases, current and historical real estate tax information, insurance policies and/or schedules, and third-party reports pertaining to appraisal/valuation, zoning, environmental status and physical condition/seismic/engineering.
A member of the CCRE Lending team or an agent of CCRE Lending is required to perform an inspection of the property as well as a review of the surrounding market area, including demand generators and competing properties, in order to confirm tenancy information, assess the physical quality of the collateral, determine visibility and access characteristics, and evaluate the property’s competitiveness within its market.
The CCRE Lending team or an affiliate of CCRE Lending, along with a third-party provider engaged by CCRE Lending, also performs a detailed review of the financial status, credit history and background of the borrower and certain key principals through financial statements, income tax returns, credit reports, criminal/background investigations, and specific searches for judgments, liens, bankruptcy and pending litigation. Circumstances may also warrant an examination of the financial strength and credit of key tenants as well as other factors that may impact the tenants’ ongoing occupancy or ability to pay rent.
After the compilation and review of all documentation and other relevant considerations, the CCRE Lending team finalizes its detailed underwriting analysis of the property’s cash flow in accordance with CCRE Lending’s property-specific, cash flow underwriting guidelines. Determinations are also made regarding the implementation of appropriate loan terms to structure in a manner to mitigate risks, resulting in features such as ongoing escrows or upfront reserves, letters of credit, lockboxes/cash management or guarantees. A complete credit committee package is prepared to summarize all of the above-referenced information.
Loan Approval. All commercial mortgage loans must be presented to one or more credit committees that consist of senior real estate and finance professionals of CCRE Lending and its affiliates among others. After a review of the credit committee package and a discussion of the loan, the committee may approve the loan as recommended, request additional due diligence or loan structure, modify the terms, or reject the loan entirely.
Debt Service Coverage and LTV Ratio. CCRE Lending’s underwriting standards generally require a minimum debt service coverage ratio (“DSCR”) of 1.20x and maximum loan-to-value (“LTV”) ratio of 80%; however, these thresholds are guidelines and exceptions may be made on the merits of each loan. Certain properties may also be encumbered by subordinate debt secured by the related mortgaged property and/or mezzanine debt secured by direct or indirect ownership interests in the borrower, which when such mezzanine or subordinate debt is taken into account, may result in aggregate debt that does not conform to the aforementioned parameters; namely, the DSCRs described above will be lower based on the inclusion of the payments related to such additional debt and the LTV ratios described above will
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be higher based on the inclusion of the amount of any such additional subordinate debt and/or mezzanine debt.
The aforementioned DSCR requirements pertain to the underwritten cash flow at origination and may not hold true for each CCRE Mortgage Loan as reported in this free writing prospectus. Property and loan information is typically updated for securitization, including an update or re-underwriting of the property’s cash flow, which may reflect positive or negative developments at the property or in the market that have occurred since origination, possibly resulting in an increase or decrease in the DSCR.
Additional Debt. Certain mortgage loans may have, or permit in the future, certain additional subordinate debt, whether secured or unsecured, and/or mezzanine debt. It is possible that CCRE Lending or an affiliate thereof may be the lender on that additional subordinate debt and/or mezzanine debt.
Amortization Requirements. While CCRE Lending’s underwriting guidelines generally permit a maximum amortization period of 30 years, certain loans may provide for interest-only payments through maturity or for an initial portion of the mortgage loan term; however, if the loan entails only a partial interest-only period, the monthly debt service, annual debt service and DSCR set forth in this free writing prospectus will reflect a calculation on the future (larger) amortizing loan payment.
Servicing. Interim servicing for all CCRE Lending loans prior to securitization will typically be performed by an unaffiliated third party such as Wells Fargo Bank, National Association or Midland Loan Services, a Division of PNC Bank, National Association; however, primary servicing may be occasionally retained by certain qualified subservicers under established sub-servicing agreements with CCRE Lending, which may be retained post-securitization. Otherwise, servicing responsibilities will be transferred from such third-party servicer to the master servicer of the securitization trust (and a primary servicer when applicable) at closing. From time to time, the original third-party servicer may retain primary servicing.
Assessments of Property Condition
As part of the underwriting process, the property assessments and reports described below will typically be obtained:
(i) Appraisals. Independent appraisals or an update of an independent appraisal will generally be required in connection with the origination of each mortgage loan that meets the requirements of the “Uniform Standards of Professional Appraisal Practice” as adopted by the Appraisal Standards Board of the Appraisal Foundation, or the guidelines in Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989. In some cases, however, the value of the subject real property collateral may be established based on a cash flow analysis, a recent sales price or another method or benchmark of valuation.
(ii) Environmental Assessment. In most cases, a Phase I environmental assessment will be required with respect to the real property collateral for a prospective commercial, multifamily or manufactured housing community mortgage loan. However, when circumstances warrant, an update of a prior environmental assessment, a transaction screen or a desktop review may be utilized. Alternatively, in limited circumstances, an environmental assessment may not be required, such as when the benefits of an environmental insurance policy or an environmental guarantee have been obtained. Furthermore, an environmental assessment conducted at any particular real property collateral will not necessarily cover all potential environmental issues. For example, an analysis for radon, lead-based paint, mold and lead in drinking water will usually be conducted only at multifamily rental properties and only when the originator or an environmental consultant believes that such an analysis is warranted under the circumstances. Depending on the findings of the initial environmental assessment, any of the following may be required: additional environmental testing, such as a Phase II environmental assessment with respect to the subject real property collateral; an environmental insurance policy; that the borrower conduct
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remediation activities or establish an operations and maintenance plan; and/or a guaranty or reserve with respect to environmental matters.
(iii) Engineering Assessment. In connection with the origination process, in most cases it will be required that an engineering firm inspect the real property collateral for any prospective commercial, multifamily or manufactured housing community mortgage loan to assess the structure, exterior walls, roofing, interior structure and/or mechanical and electrical systems. Based on the resulting report, the appropriate response will be determined to any recommended repairs, corrections or replacements and any identified deferred maintenance.
(iv) Seismic Report. Generally, a seismic report is required for all properties located in seismic zones 3 or 4.
Notwithstanding the foregoing, engineering inspections and seismic reports will generally not be required or obtained by the originator in connection with the origination process in the case of mortgage loans secured by real properties that are subject to a ground lease, triple-net lease or other long-term lease, or in the case of mortgage loans that are not collateralized by any material improvements on the real property collateral.
Title Insurance. The borrower is required to provide, and CCRE Lending or its origination counsel will typically review, a title insurance policy for each property. The title insurance policies provided typically must be: (i) written by a title insurer licensed to do business in the jurisdiction where the mortgaged property is located, (ii) in an amount at least equal to the original principal balance of the mortgage loan, (iii) issued such that protection and benefits run to the mortgagee and its successors and assigns, (iv) written on an American Land Title Association form or equivalent policy promulgated in the jurisdiction where the mortgaged property is located and (v) issued such that if a survey was prepared, the legal description of the mortgaged property in the title policy conforms to that shown on the survey.
Casualty Insurance. Except in certain instances where sole or significant tenants (which may include ground tenants) are required to obtain insurance or may self-insure, CCRE Lending typically requires that the related mortgaged property be insured by a hazard insurance policy with a customary deductible and in an amount at least equal to the lesser of the outstanding principal balance of the mortgage loan and 100% of the full insurable replacement cost of the improvements located on the property. If applicable, the policy contains appropriate endorsements to avoid the application of coinsurance and does not permit reduction in insurance proceeds for depreciation, except that the policy may permit a deduction for depreciation in connection with a cash settlement after a casualty if the insurance proceeds are not being applied to rebuild or repair the damaged improvements.
Flood insurance, if available, must be in effect for any mortgaged property that at the time of origination included material improvements in any area identified as a special flood hazard area in the Federal Register by the Federal Emergency Management Agency. The flood insurance policy must meet the requirements of the then-current guidelines of the Federal Insurance Administration, be provided by a generally acceptable insurance carrier and be in an amount representing coverage not less than the least of (i) the outstanding principal balance of the mortgage loan, (ii) the full insurable value of the property or, in cases where only a portion of the property is in the flood zone, the full insurable value of the portion of the property contained therein, and (iii) the maximum amount of insurance available under the National Flood Insurance Program, except in some cases where self-insurance was permitted.
The standard form of hazard insurance policy typically covers physical damage or destruction of the improvements on the mortgaged property caused by fire, lightning, explosion, smoke, windstorm and hail, riot or strike and civil commotion. The policies may contain some conditions and exclusions to coverage, including exclusions related to acts of terrorism. Generally, each of the mortgage loans requires that the related property have coverage for terrorism or terrorist acts, if such coverage is available at commercially reasonable rates. In all (or substantially all) cases, there is a cap on the amount that the related borrower will be required to expend on terrorism insurance.
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The mortgage loan documents typically also require the borrower to maintain comprehensive general liability insurance against claims for personal and bodily injury, death or property damage occurring on, in or about the property in an amount customarily required by institutional lenders.
The mortgage loan documents typically further require the related borrower to maintain business interruption or rent loss insurance in an amount not less than 100% of the projected rental income from the related property for not less than twelve months.
Although properties are typically not insured for earthquake risk, a borrower will be required to obtain earthquake insurance if the property has material improvements and the seismic report indicates that the probable maximum loss (“PML”) or scenario expected loss (“SEL”) is greater than 20%.
Zoning and Building Code Compliance. In connection with the origination of a commercial, multifamily or manufactured housing community mortgage loan, the originator will generally examine whether the use and occupancy of the related real property collateral is in material compliance with zoning, land-use, building rules, regulations and orders then applicable to that property. Evidence of this compliance may be in the form of one or more of the following: legal opinions, surveys, recorded documents, temporary or permanent certificates of occupancy, letters from government officials or agencies, title insurance endorsements, engineering or consulting reports, zoning reports and/or representations by the related borrower.
In some cases, a mortgaged property may constitute a legal non-conforming use or structure. In such cases, CCRE Lending may require an endorsement to the title insurance policy or the acquisition of law and ordinance or similar insurance with respect to the particular non-conformity unless it determines that: (i) the non-conformity should not have a material adverse effect on the ability of the borrower to rebuild; (ii) if the improvements are rebuilt in accordance with currently applicable law, the value and performance of the property would be acceptable; (iii) any major casualty that would prevent rebuilding has a sufficiently remote likelihood of occurring; or (iv) a cash reserve, a letter of credit or an agreement from a principal of the borrower is provided to cover losses.
If a material violation exists with respect to a mortgaged property, CCRE Lending may require the borrower to remediate such violation and, subject to the discussion under “—Assessments of Property Condition—Escrow Requirements” below, establish a reserve to cover the cost of such remediation, unless a cash reserve, a letter of credit or an agreement from a principal of the borrower is provided to cover losses.
Escrow Requirements. Based on the originator’s analysis of the real property collateral, the borrower and the principals of the borrower, a borrower under a commercial, multifamily or manufactured housing community mortgage loan may be required to fund various escrows for taxes, insurance, replacement reserves, tenant improvements/leasing commissions, deferred maintenance and/or environmental remediation. A case-by-case analysis will be conducted to determine the need for a particular escrow or reserve. Consequently, the aforementioned escrows and reserves are not established for every commercial, multifamily and manufactured housing community mortgage loan originated by CCRE Lending. Furthermore, CCRE Lending may accept an alternative to a cash escrow or reserve from a borrower, such as a letter of credit or a guarantee from the borrower or an affiliate of the borrower or periodic evidence that the items for which the escrow or reserve would have been established are being paid or addressed. In some cases, CCRE Lending may determine that establishing an escrow or reserve is not warranted given the amounts that would be involved and CCRE Lending’s evaluation of the ability of the property, the borrower or a holder of direct or indirect ownership interests in the borrower to bear the subject expense or cost absent creation of an escrow or reserve. In some cases, CCRE Lending may determine that establishing an escrow or reserve is not warranted because a tenant or other third party has agreed to pay the subject cost or expense for which the escrow or reserve would otherwise have been established.
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Generally, subject to the discussion in the prior paragraph, the required escrows for commercial, multifamily and manufactured housing community mortgage loans originated by CCRE Lending are as follows:
· | Taxes—Monthly escrow deposits equal to 1/12th of the annual property taxes (based on the most recent property assessment and the current millage rate) are typically required to satisfy real estate taxes and assessments, except that such escrows are not required in certain circumstances, including, but not limited to, (i) if there is an institutional property sponsor or high net worth individual property sponsor, or (ii) if and to the extent that a sole or major tenant (which may include a ground tenant) at the related mortgaged property is required to pay taxes directly. | |
· | Insurance—Monthly escrow deposits equal to 1/12th of the annual property insurance premium are typically required to pay insurance premiums, except that such escrows are not required in certain circumstances, including, but not limited to, (i) if there is an institutional property sponsor or high net worth individual property sponsor, (ii) if the related borrower maintains a blanket insurance policy, or (iii) if and to the extent that a sole or major tenant (which may include a ground tenant) at the related mortgaged property is obligated to maintain the insurance or is permitted to self-insure. | |
· | Replacement Reserves—Replacement reserves are generally calculated in accordance with the expected useful life of the components of the property during the term of the mortgage loan. Annual replacement reserves are generally underwritten to the suggested replacement reserve amount from an independent, third-party property condition or engineering report, or to certain minimum requirements by property type, except that such escrows are not required in certain circumstances, including, but not limited to, (i) if a tenant (which may include a ground tenant) at the related mortgaged property or other third party is responsible for all repairs and maintenance, or (ii) if CCRE Lending determines that establishing an escrow or reserve is not warranted given the amounts that would be involved and CCRE Lending’s evaluation of the ability of the property, the borrower or a holder of direct or indirect ownership interests in the borrower to bear the cost of repairs and maintenance absent creation of an escrow or reserve. | |
· | Tenant Improvements / Leasing Commissions—In the case of retail, office and industrial properties, a tenant improvements / leasing commissions reserve may be required to be funded either at loan origination and/or during the related mortgage loan term to cover certain anticipated leasing commissions or tenant improvement costs which might be associated with re-leasing the space occupied by significant tenants, except that such escrows are not required in certain circumstances, including, but not limited to, (i) if the related tenant’s lease extends beyond the loan term, (ii) if the rent for the space in question is considered below market, or (iii) if CCRE Lending determines that establishing an escrow or reserve is not warranted given the amounts that would be involved and CCRE Lending’s evaluation of the ability of the property, the borrower or a holder of direct or indirect ownership interests in the borrower to bear the anticipated leasing commissions or tenant improvement costs absent creation of an escrow or reserve. | |
· | Deferred Maintenance—A deferred maintenance reserve may be required to be funded at loan origination in an amount typically equal to 100% to 125% of the estimated cost of material immediate repairs or replacements identified in the property condition or engineering report, except that such escrows are not required in certain circumstances, including, but not limited to, (i) if the sponsor of the borrower delivers a guarantee to complete the immediate repairs in a specified amount of time, (ii) if the deferred maintenance amount does not materially impact the function, performance or value of the property, (iii) if a tenant (which may include a ground tenant) at the related mortgaged property or other third party is responsible for the repairs, or (iv) if CCRE Lending determines that establishing an escrow or reserve is not warranted given the amounts that would be involved and CCRE Lending’s evaluation of the ability of the property, the borrower or a holder of direct or indirect ownership interests in the borrower to bear the cost of repairs absent creation of an escrow or reserve. |
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· | Environmental Remediation—An environmental remediation reserve may be required at loan origination in an amount typically equal to 100% to 125% of the estimated remediation cost identified in the environmental report, except that such escrows are not required in certain circumstances, including, but not limited to, (i) if the sponsor of the borrower delivers a guarantee agreeing to take responsibility and pay for the identified environmental issues, (ii) if environmental insurance is obtained or already in place, (iii) if a third party unrelated to the borrower is identified as the responsible party or (iv) if CCRE Lending determines that establishing an escrow or reserve is not warranted given the amounts that would be involved and CCRE Lending’s evaluation of the ability of the property, the borrower or a holder of direct or indirect ownership interests in the borrower to bear the cost of remediation absent creation of an escrow or reserve. |
For a description of the escrows collected with respect to the CCRE Mortgage Loans, please see Annex A-1 to this free writing prospectus.
Exceptions. The CCRE Mortgage Loans were originated in accordance with the underwriting standards.
Compliance with Rule 15Ga-1 under the Exchange Act
CCRE Commercial Mortgage Securities, L.P. (the “CCRE Depositor”), an affiliate of CCRE Lending through which certain of CCRE Lending’s prior securitization activity has been conducted, most recently filed a Form ABS-15G on February 14, 2012. The CCRE Depositor’s Central Index Key is 0001515166. With respect to the period from and including October 1, 2011 to and including September 30, 2014, the CCRE Depositor did not have any activity to report as required by Rule 15Ga-1 under the Exchange Act with respect to repurchase or replacement requests in connection with breaches of representations and warranties made by it as a sponsor of commercial mortgage securitizations. CCRE Lending most recently filed a Form ABS-15G on February 14, 2014. CCRE Lending’s Central Index Key is 0001558761. With respect to the period from and including October 1, 2011 to and including June 30, 2015, CCRE Lending did not have any activity to report as required by Rule 15Ga-1 under the Exchange Act with respect to repurchase or replacement requests in connection with breaches of representations and warranties made by it as a sponsor of commercial mortgage securitizations.
THE DEPOSITOR
The Depositor is Deutsche Mortgage & Asset Receiving Corporation (the “Depositor”). The Depositor is a special purpose corporation incorporated in the State of Delaware on March 22, 1996, for the purpose of engaging in the business, among other things, of acquiring and depositing mortgage loans in trust in exchange for certificates evidencing interest in such trusts and selling or otherwise distributing such certificates. The principal executive offices of the Depositor are located at 60 Wall Street, New York, New York 10005. The telephone number is (212) 250-2500. The Depositor’s capitalization is nominal. All of the shares of capital stock of the Depositor are held by DB U.S. Financial Markets Holding Corporation.
During the eight years ending June 30, 2015, the Depositor has acted as depositor with respect to public and private conduit or combined conduit/large loan commercial mortgage securitization transactions in an aggregate amount of approximately $89.074 billion.
The Depositor does not have, nor is it expected in the future to have, any significant assets and is not engaged in activities unrelated to the securitization of mortgage loans. The Depositor will not have any business operations other than securitizing mortgage loans and related activities.
The Depositor has minimal ongoing duties with respect to the Certificates and the Mortgage Loans. The Depositor’s duties pursuant to the Pooling and Servicing Agreement include, without limitation, the duty (i) to appoint a successor Trustee in the event of the resignation or removal of the Trustee, (ii) to provide information in its possession to the Certificate Administrator to the extent necessary to perform REMIC and grantor trust tax administration and to prepare disclosure required under the Exchange Act,
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(iii) to indemnify the Trustee, the Certificate Administrator and the Operating Advisor against certain expenses and liabilities resulting from the Depositor’s willful misconduct, bad faith, fraud or negligence, and (iv) to sign any distribution report on Form 10-D and current report on Form 8-K and annual report on Form 10-K, including the required certification therein under the Sarbanes-Oxley Act, required to be filed by the Trust and review filings pursuant to the Exchange Act, prepared by the Certificate Administrator on behalf of the Trust. The Depositor is required under that certain Underwriting Agreement between the Depositor, Deutsche Bank Securities Inc., Cantor Fitzgerald & Co., CastleOak Securities, L.P., KeyBanc Capital Markets Inc. and Goldman, Sachs & Co. (collectively, the “Underwriters”), and German American Capital Corporation, to indemnify the Underwriters for certain securities law liabilities.
See “Certain Relationships and Related Transactions” in this free writing prospectus for a discussion with respect to the Depositor and certain affiliations, relationships and related transactions with other transaction parties.
THE ISSUING ENTITY
The issuing entity for the certificates will be COMM 2015-CCRE27 Mortgage Trust (the “Issuing Entity”). The Issuing Entity is a New York common law trust that will be formed on the settlement date set for the offered certificates (the “Closing Date”) pursuant to the Pooling and Servicing Agreement. The only activities that the Issuing Entity may perform are those set forth in the Pooling and Servicing Agreement, which are generally limited to owning and administering the Mortgage Loans and any REO property, disposing of defaulted Mortgage Loans and REO property, issuing the Certificates, making distributions, providing reports to certificateholders and the other activities described in this free writing prospectus. Accordingly, the Issuing Entity may not issue securities other than the Certificates, or invest in securities, other than investing funds in the collection account and other accounts maintained under the Pooling and Servicing Agreement in certain short-term high-quality investments. The Issuing Entity may not lend or borrow money, except that the Master Servicer and/or the Trustee, if applicable, may make advances to the Issuing Entity only to the extent that such party deems such advances to be recoverable from the related Mortgage Loan. These advances are intended to provide liquidity, rather than credit support. The Pooling and Servicing Agreement may be amended as set forth in this free writing prospectus under “The Pooling and Servicing Agreement—Amendment.” The Issuing Entity administers the Mortgage Loans through the Trustee, the Certificate Administrator, the Operating Advisor, the Master Servicer and the Special Servicer. A discussion of the duties of the Trustee, the Certificate Administrator, the Operating Advisor, the Master Servicer and the Special Servicer, including any discretionary activities performed by each of them, is set forth in this free writing prospectus under “The Trustee”, “The Certificate Administrator and Custodian,” “The Operating Advisor,” “The Servicers—The Master Servicer,”“The Servicers—The Special Servicer” and “The Pooling and Servicing Agreement.”
The only assets of the Issuing Entity other than the Mortgage Loans and any REO Properties are the Collection Account and other accounts maintained pursuant to the Pooling and Servicing Agreement and the short-term investments in which funds in the Collection Account and other accounts are invested. The Issuing Entity has no present liabilities, but has potential liability relating to the elections for the Trust REMICs, its ownership of the Mortgage Loans and any REO Properties, and the indemnity obligations to the Trustee, the Certificate Administrator, the Operating Advisor, the Master Servicer and the Special Servicer. The fiscal year of the Issuing Entity is the calendar year. The Issuing Entity has no executive officers or a Board of Directors. It acts through the Trustee, the Certificate Administrator, the Operating Advisor, the Master Servicer and the Special Servicer.
The Depositor is contributing the Mortgage Loans to the Issuing Entity. The Depositor is purchasing the Mortgage Loans from the Mortgage Loan Sellers, as described in this free writing prospectus under “Description of the Mortgage Pool—Sale of the Mortgage Loans.”
Since the Issuing Entity is a common law trust, it may not be eligible for relief under Title 11 of the United States Code, as amended (the “Bankruptcy Code”), unless it can be characterized as a “business trust” for purposes of the Bankruptcy Code. Bankruptcy courts look at various considerations in making this determination, so it is not possible to predict with any certainty whether or not the Issuing Entity would
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be characterized as a “business trust.” The Depositor has been formed to be a special purpose bankruptcy remote entity. In connection with the sale of the Mortgage Loans from a Mortgage Loan Seller to the Depositor and from the Depositor to the Issuing Entity, legal opinions are required to be rendered generally to the effect that:
(i) Either (A) if such Mortgage Loan Seller were to become a debtor in a case under the Bankruptcy Code, a federal bankruptcy court, which acted reasonably and correctly applied the law to the facts as set forth in such legal opinion after full consideration of all relevant factors, would hold that (i) the Mortgage Loans and payments thereunder and proceeds thereof are not property of the estate of such Mortgage Loan Seller under Bankruptcy Code section 541 and (ii) the automatic stay arising pursuant to Bankruptcy Code section 362 upon the commencement of a bankruptcy case involving such Mortgage Loan Seller is not applicable to payments on the Certificates or, if applicable, (B) if the Federal Deposit Insurance Corporation (the “FDIC”) were to be appointed receiver or conservator for such Mortgage Loan Seller pursuant to the Federal Deposit Insurance Act, as amended, a court after full consideration of all relevant factors would hold that the Mortgage Loans and payments thereunder and proceeds thereof are not subject to repudiation, reclamation, recovery, or recharacterization by the FDIC.
(ii) If the Depositor were to become a debtor in a case under the Bankruptcy Code, a federal bankruptcy court, which acted reasonably and correctly applied the law to the facts as set forth in such legal opinion after full consideration of all relevant factors, would hold (i) the Mortgage Loans, and payments thereunder and proceeds thereof are not property of the estate of the Depositor under Bankruptcy Code section 541 and (ii) the automatic stay arising pursuant to Bankruptcy Code section 362 upon the commencement of a bankruptcy case of the Depositor is not applicable to payments on the Certificates.
Such legal opinions are based on numerous assumptions, and there can be no assurance that all of such assumed facts are true, or will continue to be true. Moreover, there can be no assurance that a court would rule as anticipated in the foregoing legal opinions. Accordingly, although the Depositor has been structured as a bankruptcy remote entity, and the transfer of the Mortgage Loans from each Mortgage Loan Seller to the Depositor and from the Depositor to the Issuing Entity has been structured as a sale, there can be no assurance that the Depositor will not be subject to a bankruptcy proceeding or that the sale of the Mortgage Loans will not be recharacterized as a pledge, with the result that the Depositor or Issuing Entity is deemed to be a creditor of the related Mortgage Loan Seller rather than an owner of the Mortgage Loans. See “Risk Factors—Risks Related to the Mortgage Loans—The Sellers of the Mortgage Loans Are Subject to Bankruptcy or Insolvency Laws That May Affect the Issuing Entity’s Ownership of the Mortgage Loans” in this free writing prospectus.
THE SERVICERS
Generally
The Pooling and Servicing Agreement provides for the appointment of both a Master Servicer and a Special Servicer. Each of the Master Servicer and the Special Servicer will be required to service and administer the Mortgage Loans (other than the Non-Serviced Mortgage Loan) and each Serviced Loan Combination for which it is responsible as described under “The Pooling and Servicing Agreement—Servicing of the Mortgage Loans and Serviced Loan Combinations;Collection of Payments.” The Pooling and Servicing Agreement requires the Master Servicer or the Special Servicer, as applicable, to make reasonable efforts to collect all payments called for under the terms of the Mortgage Loans (other than any Non-Serviced Mortgage Loan) and Serviced Loan Combination to the extent such procedures are consistent with the Servicing Standard.
The Master Servicer and the Special Servicer are permitted, at their own expense, to employ subservicers, agents or attorneys in performing any of their respective obligations under the Pooling and Servicing Agreement. However, despite any such delegation, the Master Servicer and the Special Servicer will remain liable for their respective obligations. Furthermore, each of the Master Servicer and
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the Special Servicer will be responsible for the acts and omissions of their subservicers, agents or attorneys. Notwithstanding the foregoing, the Special Servicer is generally prohibited from delegating all of its obligations under the Pooling and Servicing Agreement to third parties.
The Master Servicer
Midland Loan Services, a Division of PNC Bank, National Association, a national banking association (“Midland”), will be the master servicer (the “Master Servicer”) and in this capacity will be responsible for the servicing and administration of the Mortgage Loans (other than any Non-Serviced Mortgage Loan) and Serviced Loan Combinations pursuant to the pooling and servicing agreement. Certain servicing and administrative functions will also be provided by one or more primary servicers that previously serviced the mortgage loans for the applicable loan seller.
Midland’s principal servicing office is located at 10851 Mastin Street, Building 82, Suite 300, Overland Park, Kansas 66210.
Midland is a real estate financial services company that provides loan servicing, asset management and technology solutions for large pools of commercial and multifamily real estate assets. Midland is approved as a master servicer, special servicer and primary servicer for investment-grade commercial mortgage-backed securities (“CMBS”) by Standard & Poor’s Rating Services (“S&P”), Moody’s Investors Service, Inc., Fitch, Inc., and Morningstar Credit Ratings, LLC. Midland has received the highest rankings as a master, primary and special servicer of real estate assets under U.S. CMBS transactions from S&P, Fitch and Morningstar. For each category, S&P ranks Midland as “Strong”, Fitch ranks Midland as “1”, and Morningstar ranks Midland as “CS1”. Midland is also a HUD/FHA-approved mortgagee and a Fannie Mae-approved multifamily loan servicer.
Midland has detailed operating procedures across the various servicing functions to maintain compliance with its servicing obligations and the servicing standards under Midland’s servicing agreements, including procedures for managing delinquent and special serviced loans. The policies and procedures are reviewed annually and centrally managed. Furthermore Midland’s disaster recovery plan is reviewed annually.
Midland will not have primary responsibility for custody services of original documents evidencing the underlying mortgage loans. Midland may from time to time have custody of certain of such documents as necessary for enforcement actions involving particular mortgage loans or otherwise. To the extent that Midland has custody of any such documents for any such servicing purposes, such documents will be maintained in a manner consistent with the servicing standard.
No securitization transaction involving commercial or multifamily mortgage loans in which Midland was acting as master servicer, primary servicer or special servicer has experienced a servicer termination event as a result of any action or inaction of Midland as master servicer, primary servicer or special servicer, as applicable, including as a result of Midland’s failure to comply with the applicable servicing criteria in connection with any securitization transaction. Midland has made all advances required to be made by it under the servicing agreements on the commercial and multifamily mortgage loans serviced by Midland in securitization transactions.
From time-to-time Midland is a party to lawsuits and other legal proceedings as part of its duties as a loan servicer (e.g., enforcement of loan obligations) and/or arising in the ordinary course of business. Midland does not believe that any such lawsuits or legal proceedings would, individually or in the aggregate, have a material adverse effect on its business or its ability to service loans pursuant to the pooling and servicing agreement.
Midland currently maintains an Internet-based investor reporting system, CMBS Investor Insight®, that contains performance information at the portfolio, loan and property levels on the various commercial mortgage-backed securities transactions that it services. Certificateholders, prospective transferees of the certificates and other appropriate parties may obtain access to CMBS Investor Insight through Midland’s
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website at www.pnc.com/midland. Midland may require registration and execution of an access agreement in connection with providing access to CMBS Investor Insight.
As of June 30, 2015, Midland was servicing approximately 30,297 commercial and multifamily mortgage loans with a principal balance of approximately $366 billion. The collateral for such loans is located in all 50 states, the District of Columbia, Puerto Rico, Guam and Canada. Approximately 12,038 of such loans, with a total principal balance of approximately $166 billion, pertain to commercial and multifamily mortgage-backed securities. The related loan pools include multifamily, office, retail, hospitality and other income-producing properties. As of June 30, 2015, Midland was named the special servicer in approximately 185 commercial mortgage-backed securities transactions with an aggregate outstanding principal balance of approximately $101 billion. With respect to such commercial mortgage-backed securities transactions as of such date, Midland was administering approximately 102 assets with an outstanding principal balance of approximately $831 million.
Midlandhas been servicing mortgage loans in CMBS transactions since 1992. The table below contains information on the size of the portfolio of commercial and multifamily mortgage loans in CMBS and other servicing transactions for which Midland has acted as master and/or primary servicer from 2012 to 2014.
Portfolio Size – Master/Primary Servicing | Calendar Year End (Approximate amounts in billions) | |||||
2012 | 2013 | 2014 | ||||
CMBS | $115 | $141 | $157 | |||
Other | $167 | $167 | $179 | |||
Total | $282 | $308 | $336 |
Midland has acted as a special servicer for commercial and multifamily mortgage loans in CMBS transactions since 1992. The table below contains information on the size of the portfolio of specially serviced commercial and multifamily mortgage loans and REO properties that have been referred to Midland as special servicer in CMBS transactions from 2012 to 2014.
Portfolio Size –Special Servicing | Calendar Year End (Approximate amounts in billions) | |||||
2012 | 2013 | 2014 | ||||
Total | $82 | $70 | $85 |
Midland will acquire the right to act as Master Servicer and/or primary servicer (and the related right to receive and retain the excess servicing strip) with respect to the Mortgage Loans sold to the Issuing Entity by the Mortgage Loan Sellers pursuant to one or more servicing rights appointment agreements entered into on the Closing Date. The “excess servicing strip” means a portion of the Servicing Fee payable to Midland that accrues at a per annum rate initially equal to the Servicing Fee Rate minus 0.0025%, but which may be reduced under certain circumstances as provided in the Pooling and Servicing Agreement.
Pursuant to certain interim servicing agreements between GACC and certain of its affiliates, on the one hand, and Midland, on the other hand, Midland acts as interim servicer with respect to certain mortgage loans, including, prior to their inclusion in the Issuing Entity, certain of the GACC Mortgage Loans.
Pursuant to certain interim servicing agreements between CCRE Lending and certain of its affiliates, on the one hand, and Midland, on the other hand, Midland acts as interim servicer with respect to certain mortgage loans, including, prior to their inclusion in the Issuing Entity, certain of the CCRE Mortgage Loans.
Pursuant to a primary servicing agreement between KeyBank, on the one hand, and Midland, on the other hand, KeyBank will act as primary servicer with respect to the KeyBank Mortgage Loans. The
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KeyBank Mortgage Loans represent 20.8% of the Initial Outstanding Pool Balance. KeyBank will receive the primary servicing fee set forth on Annex A-1 for the KeyBank Mortgage Loans.
Pursuant to a primary servicing agreement between Berkeley Point, an affiliate of CCRE Lending, on the one hand, and Midland, on the other hand, Berkeley Point will act as primary servicer with respect to 3 of the CCRE Mortgage Loans identified on Annex A-1 to this free writing prospectus as NMS Los Angeles Multifamily Portfolio, GSP MHP Portfolio I and Brookhaven MHP, representing approximately 9.0% of the Initial Outstanding Pool Balance, and will receive a fee set forth on Annex A-1 to the free writing prospectus.
Pursuant to a limited subservicing agreement between Berkeley Point, an affiliate of CCRE Lending, on the one hand, and Midland, on the other hand, Berkeley Point is expected to assume certain limited subservicing duties consisting of performing inspections and collecting financial statements with respect to 4 of the CCRE Mortgage Loans, representing approximately 4.3% of the Initial Outstanding Pool Balance, and will receive a fee equal to 0.0200%per annum for each such CCRE Mortgage Loan.
The foregoing information concerning Midland under this heading “—The Master Servicer” has been provided by Midland.
The Special Servicer
Rialto Capital Advisors, LLC, a Delaware limited liability company (“Rialto”), will initially be appointed to act as the special servicer under the Pooling and Servicing Agreement (in such capacity, the “Special Servicer”) and in such capacity will initially be responsible for the servicing and administration of the Specially Serviced Loans and Serviced REO Properties (other than Excluded Special Servicer Mortgage Loans), as well as the processing of certain Major Decisions and special servicing decisions for all of the Mortgage Loans (other than any Non-Serviced Mortgage Loan or Excluded Special Servicer Mortgage Loan), pursuant to the Pooling and Servicing Agreement. Rialto maintains its principal servicing office at 790 NW 107th Avenue, 4th Floor, Miami, Florida 33172.
Rialto has been engaged in the special servicing of commercial mortgage loans for commercial real estate securitizations since approximately May 2012. Rialto currently has a commercial mortgage-backed securities special servicer rating of “CSS2” by Fitch, a commercial loan special servicer ranking of “Above Average” by S&P and a commercial mortgage special servicer ranking of “MOR CS2” by Morningstar.
Rialto is a wholly-owned subsidiary of Rialto Capital Management, LLC, a Delaware limited liability company (“RCM”). RCM is a vertically integrated commercial real estate investment and asset manager and an indirect wholly-owned subsidiary of Lennar Corporation (“Lennar”) (NYSE: LEN and LEN.B). As of June 30, 2015, RCM was the sponsor of, and certain of its affiliates were investors in, four private equity funds (collectively, the “Funds”) with an aggregate of $2.6 billion of equity under management and RCM also advised one separately managed account with $400 million of committed capital. Two of such funds are focused on distressed and value-add real estate related investments, one of such funds is focused on investments in commercial mortgage-backed securities and the other fund and the separately managed account are focused on mezzanine debt. As of September 28, 2015 RCM has acquired and/or is managing approximately $7.1 billion of non- and sub-performing real estate assets, representing over 10,000 loans. Included in this number are approximately $3 billion in structured transactions with the Federal Deposit Insurance Corporation (“FDIC”). RCM was also a sub-advisor and investor in an approximately $4.6 billion Public Private Investment Fund with the U.S. Department of the Treasury, which was liquidated in October of 2012.
In addition, as of September 28, 2015, RCM has underwritten and purchased, primarily for the Funds, approximately $3.8 billion in face value of subordinate, newly-originated commercial mortgage-backed securities bonds in 51 different securitizations totaling approximately $59.5 billion in overall transaction size. RCM has the right to appoint the special servicer for each of these transactions.
RCM has over 385 employees and is headquartered in Miami with two other main offices located in New York City and Atlanta. In addition, the asset management platform utilizes seven satellite offices
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located in Las Vegas, Nevada, Phoenix, Arizona, Aliso Viejo, California, Denver, Colorado, Portland, Oregon, Chicago, Illinois and Tampa, Florida. It is also supported in local markets by the Lennar infrastructure which provides access to over 6,800 employees across the country’s largest real estate markets.
Rialto has detailed operating policies and procedures which are reviewed at least annually and updated as appropriate. These policies and procedures for the performance of its special servicing obligations are, among other things, in compliance with the applicable servicing criteria set forth in Item 1122 of Regulation AB under the Securities Act. Rialto has developed strategies and procedures for managing delinquent loans, loans subject to bankruptcies of the borrowers and other breaches by borrowers of the underlying loan documents that are designed to maximize value from the assets for the benefit of certificateholders. These strategies and procedures vary on a case by case basis, and include, but are not limited to, liquidation of the underlying collateral, note sales, discounted payoffs, and borrower negotiation or workout in accordance with the related servicing standard. The strategy pursued by Rialto for any particular property depends upon, among other things, the terms and provisions of the underlying loan documents, the jurisdiction where the underlying property is located and the condition and type of underlying property. Standardization and automation have been pursued, and continue to be pursued, wherever possible so as to provide for continued accuracy, efficiency, transparency, monitoring and controls.
Rialto is subject to external and internal audits and reviews. Rialto is subject to Lennar’s internal audit reviews, typically on a semi-annual basis, which focus on specific business areas such as finance, reporting, loan asset management and REO management. Rialto is also subject to external audits as part of the external audit of Lennar and stand-alone audits of the FDIC transactions and the Funds. As part of such external audits, auditors perform test work and review internal controls throughout the year. As a result of this process, Rialto has been determined to be Sarbanes-Oxley compliant.
Rialto maintains a web-based asset management system that contains performance information at the portfolio, loan and property levels on the various loan and REO assets that it services. Additionally, Rialto has a formal, documented disaster recovery and business continuity plan which is managed by Lennar’s on-site staff.
As of June 30, 2015, Rialto and its affiliates were actively special servicing over 2,200 portfolio loans with a principal balance of over $740 million and were responsible for over 1,300 portfolio REO assets with a principal balance of over $1.5 billion.
As of September 28, 2015, Rialto was also performing special servicing for 55 commercial real estate securitizations. With respect to such securitization transactions, as of September 28, 2015, Rialto was administering over 4,100 assets with a principal balance of approximately $61.2 billion. The asset pools specially serviced by Rialto include residential, multifamily/condo, office, retail, hotel, healthcare, industrial, manufactured housing and other income-producing properties as well as residential and commercial land. The table below sets forth information about Rialto’s portfolio of specially serviced commercial and multifamily mortgage loans and REO properties in commercial mortgage-backed securitization transactions as of the dates indicated:
CMBS Pools | As of 12/31/2012 | As of 12/31/2013 | As of 12/31/2014 | As of 6/30/2015 | ||||
Number of CMBS Pools Named Special Servicer | 16 | 27 | 45 | 51 | ||||
Approximate Aggregate Unpaid Principal Balance(1) | $18.9 billion | $32.4 billion | $49.2 billion | $56.0 billion | ||||
Approximate Number of Specially Serviced Loans or REO Properties(2) | 19 | 27 | 28 | 33 | ||||
Approximate Aggregate Unpaid Principal Balance of Specially Serviced Loans or REO Properties(2) | $21 million | $101 million | $126.9 million | $143 million |
(1) | Includes all commercial and multifamily mortgage loans and related REO properties in Rialto’s portfolio for which Rialto is the named special servicer, regardless of whether such mortgage loans and related REO properties are, as of the specified date, specially serviced by Rialto. | |
(2) | Includes only those commercial and multifamily mortgage loans and related REO properties in Rialto’s portfolio for which Rialto is the named special servicer that are, as of the specified date, specially serviced by Rialto. Does not include any resolutions during the specified year. |
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In its capacity as the Special Servicer, Rialto will not have primary responsibility for custody services of original documents evidencing the Mortgage Loans. Rialto may from time to time have custody of certain of such documents as necessary for enforcement actions involving particular Mortgage Loans or otherwise. To the extent that Rialto has custody of any such documents for any such servicing purposes, such documents will be maintained in a manner consistent with the Servicing Standard.
Rialto does not have any material advancing rights or obligations with respect to the commercial mortgage-backed securities pools as to which it acts as special servicer. In certain instances Rialto may have the right or be obligated to make property related servicing advances in emergency situations with respect to certain commercial mortgage-backed securities pools as to which it acts as special servicer.
There are, to the actual current knowledge of Rialto, no special or unique factors of a material nature involved in special servicing the particular types of assets included in this securitization transaction, as compared to the types of assets specially serviced by Rialto in other commercial mortgage-backed securitization pools generally, for which Rialto has developed processes and procedures which materially differ from the processes and procedures employed by Rialto in connection with its special servicing of commercial mortgage-backed securitization pools generally.
There have not been, during the past three years, any material changes to the policies or procedures of Rialto in the servicing function it will perform under the Pooling and Servicing Agreement for assets of the same type included in this securitization transaction. No securitization transaction in which Rialto was acting as special servicer has experienced a servicer event of default as a result of any action or inaction of Rialto as special servicer, including as a result of a failure by Rialto to comply with the applicable servicing criteria in connection with any securitization transaction. Rialto has not been terminated as special servicer in any securitization, either due to a servicing default or the application of a servicing performance test or trigger. Rialto has made all advances required to be made by it under the servicing agreements related to the securitization transactions in which Rialto is acting as special servicer. There has been no previous disclosure of material noncompliance with the applicable servicing criteria by Rialto in connection with any securitization in which Rialto was acting as special servicer. Rialto does not believe that its financial condition will have any adverse effect on the performance of its duties under the Pooling and Servicing Agreement and, accordingly, Rialto believes that its financial condition will not have any material impact on the Mortgage Pool performance or the performance of the Certificates.
From time-to-time Rialto is a party to lawsuits and other legal proceedings as part of its duties as a loan servicer (e.g., enforcement of loan obligations) and/or arising in the ordinary course of business. Rialto does not believe that any such lawsuits or legal proceedings would, individually or in the aggregate, have a material adverse effect on its business or its ability to service loans pursuant to the Pooling and Servicing Agreement.
There are currently no legal proceedings pending, and no legal proceedings known to be contemplated by governmental authorities, against Rialto or of which any of its property is the subject, which are material to Certificateholders. Rialto occasionally engages consultants to perform property inspections and to provide surveillance on a property and its local market. It currently does not have any plans to engage sub-servicers to perform on its behalf any of its duties with respect to this transaction with the exception of some outsourced base servicing functions.
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In the commercial mortgage-backed securitizations in which Rialto acts as special servicer, Rialto may enter into one or more arrangements with any party entitled to appoint or remove and replace the special servicer to provide for a discount and/or revenue sharing with respect to certain of the special servicer compensation in consideration of, among other things, Rialto’s appointment as special servicer under the applicable servicing agreement and limitations on such person’s right to replace Rialto as the special servicer.
Rialto is an affiliate of the entity that is expected to purchase the Class E, Class F, Class G, Class H, Class X-D, Class X-E, Class X-F and Class V Certificates and may purchase other Certificates and is expected to act as the initial Directing Holder with respect to each Mortgage Loan (other than any Non-Serviced Mortgage Loan or Excluded Mortgage Loan) and Serviced Loan Combination. In addition, Rialto is currently the servicer of, and an affiliate of Rialto is the current holder of, a mezzanine loan secured by direct or indirect equity interests in the borrower under the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Atlanta Multifamily Portfolio, representing approximately 4.8% of the Initial Outstanding Pool Balance as of the Cut-Off Date, which mezzanine loan is described under “Description of the Mortgage Pool—Certain Terms and Conditions of the Mortgage Loans—Other Financing” in this free writing prospectus.
The foregoing information set forth under this sub-heading “—The Special Servicer” regarding Rialto has been provided by Rialto.
The Special Servicer will be required to pay all expenses incurred in connection with its responsibilities under the Pooling and Servicing Agreement (subject to reimbursement as described in this free writing prospectus).
The Special Servicer may resign under the Pooling and Servicing Agreement as described under “The Pooling and Servicing Agreement—Certain Matters Regarding the Depositor, the Master Servicer, the Special Servicer and the Operating Advisor” in this free writing prospectus.
Replacement of the Special Servicer
The Special Servicer may be removed, and a successor Special Servicer appointed, at any time, as follows:
(a) with respect to any Mortgage Loan or Serviced Loan Combination (other than with respect to Non-Serviced Mortgage Loans and Excluded Mortgage Loans), if a Control Termination Event has not occurred (or has occurred, but is no longer continuing), the Special Servicer may be removed at the direction of the applicable Directing Holder;
(b) with respect to any Mortgage Loan or Serviced Loan Combination (other than with respect to Non-Serviced Mortgage Loans and Excluded Mortgage Loans), if a Control Termination Event has occurred and is continuing the Special Servicer may be removed, in accordance with the procedures set forth below, at the written direction of (i) holders of Sequential Pay Certificates evidencing at least 75% of a Certificateholder Quorum or (ii) holders of Sequential Pay Certificates evidencing more than 50% of the aggregate Voting Rights of each Class of Non-Reduced Certificates on an aggregate basis; and
(c) with respect to any Mortgage Loan or Serviced Loan Combination (other than with respect to Non-Serviced Mortgage Loans and Excluded Mortgage Loans), if a Consultation Termination Event has occurred and is continuing, the Special Servicer may be removed, in accordance with the procedures set forth below, at the recommendation of the Operating Advisor and with a confirming vote by an affirmative vote of holders of Sequential Pay Certificates evidencing at least a majority of the aggregate Voting Rights (taking into account Realized Losses and the application of any Appraisal Reduction Amounts to notionally reduce the respective Certificate Balances) of all Sequential Pay Certificates on an aggregate basis.
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Notwithstanding the foregoing, if the Special Servicer is a Borrower Party with respect to any Mortgage Loan or Loan Combination (any such Mortgage Loan or Loan Combination, an “Excluded Special Servicer Mortgage Loan”), the Special Servicer will be required to resign as Special Servicer of that Excluded Special Servicer Mortgage Loan. Prior to the occurrence and continuance of a Control Termination Event, if the Excluded Special Servicer Mortgage Loan is not also an Excluded Mortgage Loan, the Controlling Class Representative will be entitled to appoint (and replace with or without cause) a successor special servicer that is not a Borrower Party in accordance with the terms of the Pooling and Servicing Agreement (the “Excluded Special Servicer”) for the related Excluded Special Servicer Mortgage Loan. If an Excluded Special Servicer Mortgage Loan is also an Excluded Mortgage Loan, the largest Controlling Class Certificateholder (by Certificate Balance) that is not an Excluded Controlling Class Holder will be entitled to appoint (and replace with or without cause) the Excluded Special Servicer for the related Excluded Special Servicer Mortgage in accordance with the terms of the Pooling and Servicing Agreement. If a Control Termination Event has occurred and is continuing, neither the Controlling Class Representative nor any other Controlling Class Certificateholder will be entitled to remove or replace the Excluded Special Servicer with respect to any Excluded Special Servicer Mortgage Loan. If a Control Termination Event has occurred and is continuing and prior to a Consultation Termination Event, the largest Controlling Class Certificateholder that is not an Excluded Controlling Class Certificateholder will have the right to appoint the Excluded Special Servicer.
If a Consultation Termination Event has occurred and is continuing, upon resignation of the Special Servicer with respect to an Excluded Special Servicer Mortgage Loan, at the expense of the Issuing Entity, the Certificate Administrator will be required to promptly provide written notice of such resignation to all Certificateholders by posting such notice on its internet website and the Excluded Special Servicer will be appointed upon the written direction of more than 50% of the Voting Rights of the Certificates that exercise their right to vote (provided that holders of at least 20% of the Voting Rights of the Certificates exercise their right to vote). If such Excluded Special Servicer has not been appointed pursuant to the preceding sentence within 30 days after the Special Servicer has provided its written notice of resignation, the Certificate Administrator will provide written notice to the resigning Special Servicer that such Excluded Special Servicer has not been appointed and such resigning Special Servicer will appoint such Excluded Special Servicer.
If at any time a Special Servicer is no longer a Borrower Party with respect to an Excluded Special Servicer Mortgage Loan, (1) the related Excluded Special Servicer will be required to resign, (2) the related Mortgage Loan will no longer be an Excluded Special Servicer Mortgage Loan, (3) such Special Servicer will become the Special Servicer again for the such related Mortgage Loan and (4) such Special Servicer will be entitled all special servicing compensation with respect to such Mortgage Loan earned during such time on and after such Mortgage Loan is no longer an Excluded Special Servicer Mortgage Loan.
The Excluded Special Servicer will be required to perform all of the obligations of the Special Servicer for the related Excluded Special Servicer Mortgage Loan and will be entitled to all special servicing compensation with respect to such Excluded Special Servicer Mortgage Loan earned during such time as the related Mortgage Loan is an Excluded Special Servicer Mortgage Loan.
With respect to any Mortgage Loan or Serviced Loan Combination, the procedures for removing the Special Servicer if a Control Termination Event has occurred and is continuing will be as follows: upon (i) written direction of holders of Sequential Pay Certificates evidencing not less than 25% of the Voting Rights (taking into account the application of any Appraisal Reduction Amounts to notionally reduce the Certificate Balances of the Certificates) of the Sequential Pay Certificates requesting a vote to replace the Special Servicer with a new Special Servicer, (ii) payment by such holders, as applicable, to the Certificate Administrator of the reasonable fees and expenses (including any legal fees and any Rating Agency fees and expenses) to be incurred by the Certificate Administrator in connection with administering such vote, and (iii) delivery by such holders, as applicable, to the Certificate Administrator of No Downgrade Confirmations (which No Downgrade Confirmations will be obtained at the expense of those holders of Certificates requesting such vote), the Certificate Administrator will be required to promptly provide written notice to all Certificateholders of such request by posting such notice on its
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internet website, and by mail, and conduct the solicitation of votes of all Certificates in such regard. Upon the written direction of (i) holders of Sequential Pay Certificates evidencing at least 75% of a Certificateholder Quorum or (ii) holders of Sequential Pay Certificates evidencing more than 50% of the aggregate Voting Rights of each Class of Non-Reduced Certificates on an aggregate basis, in each case, within 180 days of the notice from the Certificate Administrator of the request for such vote, the Trustee will be required to terminate all of the rights and obligations of the Special Servicer under the Pooling and Servicing Agreement and appoint the successor Special Servicer designated by such Certificateholders, subject to indemnification, right to outstanding fees, reimbursement of advances and other rights set forth in the Pooling and Servicing Agreement which survive termination. The Certificate Administrator will include on each Distribution Date Statement a statement that each Certificateholder may access such notices on the Certificate Administrator’s website and each Certificateholder may register to receive email notifications when such notices are posted on the website. The Certificate Administrator will be entitled to reimbursement from the requesting Certificateholders for the reasonable expenses of posting notices of such requests.
In addition, with respect to each Mortgage Loan (other than any Non-Serviced Mortgage Loan) or Serviced Loan Combination, after the occurrence of a Consultation Termination Event, if the Operating Advisor determines that the Special Servicer is not performing its duties in accordance with the Servicing Standard or is otherwise not acting in accordance with the Servicing Standard, the Operating Advisor will have the right to recommend the replacement of the Special Servicer. In such event, the Operating Advisor will be required to deliver to the Trustee and the Certificate Administrator, with a copy to the Special Servicer, a written recommendation; setting forth the reasons supporting its position (along with any information the Operating Advisor considered relevant to its recommendation) and recommending a suggested replacement Special Servicer;provided that in no event should the information or any other content in such written recommendation contravene any provision of the Pooling and Servicing Agreement). The Certificate Administrator will be required to notify each Certificateholder of the recommendation and post it on the Certificate Administrator’s internet website. The Operating Advisor’s recommendation to replace the Special Servicer must be confirmed by an affirmative vote of holders of Sequential Pay Certificates evidencing at least a majority of the aggregate Voting Rights (taking into account any Realized Losses and the application of Appraisal Reduction Amounts to notionally reduce the respective Certificate Balances) of all Sequential Pay Certificates on an aggregate basis within 180 days from the date the Certificate Administrator posts such recommendation on its internet website. If the Certificate Administrator receives a No Downgrade Confirmation from each of the Rating Agencies (and the successor Special Servicer agrees to be bound by the terms of the Pooling and Servicing Agreement), the Trustee will then be required to terminate all of the rights and obligations of the Special Servicer under the Pooling and Servicing Agreement and to appoint the successor Special Servicer approved by the Certificateholders, provided such successor Special Servicer is subject to the terminated Special Servicer’s rights to indemnification, payment of outstanding fees and other compensation, reimbursement of advances and other rights set forth in the Pooling and Servicing Agreement which survive termination. The reasonable costs and expenses associated with obtaining No Downgrade Confirmations and administering the vote of the applicable Sequential Pay Certificates will be an additional expense of the Issuing Entity. The Operating Advisor may not receive any fees, compensation or other remuneration from a Special Servicer or successor Special Servicer in connection with: (i) its obligations under the Pooling and Servicing Agreement or (ii) appointment or recommendation for replacement of any successor Special Servicer to become the Special Servicer.
In addition, the Depositor may direct the Trustee to terminate the Special Servicer upon 5 business days’ written notice if the Special Servicer fails to comply with certain of its reporting obligations under the Pooling and Servicing Agreement (subject to any applicable grace period). In the event of such termination, for so long as no Control Termination Event has occurred and is continuing, the Controlling Class Representative will have the right to appoint a successor Special Servicer.
The appointment of a successor Special Servicer will be subject to a No Downgrade Confirmation from each Rating Agency. In no event may a successor Special Servicer be a current or former Operating Advisor or any affiliate of a current or former Operating Advisor.
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Additionally, the Special Servicer may be replaced in the event that a Servicer Termination Event occurs with respect to such entity as described under “The Pooling and Servicing Agreement—Rights upon a Servicer Termination Event” in this free writing prospectus.
The Special Servicer may resign under the Pooling and Servicing Agreement as described under “The Pooling and Servicing Agreement—Certain Matters Regarding the Depositor,the Master Servicer,the Special Servicer and the Operating Advisor” in this free writing prospectus.
“Certificateholder Quorum” means, in connection with any solicitation of votes in connection with the replacement of the Special Servicer as described above, the holders of Certificates evidencing at least 75% of the aggregate Voting Rights (taking into account Realized Losses and the application of any Appraisal Reduction Amounts to notionally reduce the Certificate Balance of the Certificates) of all Sequential Pay Certificates, on an aggregate basis.
“Non-Reduced Certificates” means any Class of Sequential Pay Certificates then outstanding for which (a)(1) the initial Certificate Balance of such Class of Certificates minus (2) the sum (without duplication) of (x) any payments of principal (whether as principal prepayments or otherwise) distributed to the Certificateholders of such Class of Certificates, (y) any Appraisal Reduction Amounts allocated to such Class of Certificates and (z) any Realized Losses previously allocated to such Class of Certificates, is equal to or greater than (b) 25% of the remainder of (1) the initial Certificate Balance of such Class of Certificates less (2) any payments of principal (whether as principal prepayments or otherwise) previously distributed to the Certificateholders of such Class of Certificates.
The Primary Servicers
KeyBank National Association
KeyBank will be appointed as a primary servicer with respect to KeyBank Mortgage Loans (the “KeyBank Serviced Loans”). KeyBank is a wholly-owned subsidiary of KeyCorp. KeyBank maintains a servicing office at 11501 Outlook Street, Suite 300, Overland Park, Kansas 66211. KeyBank is not an affiliate of the Issuing Entity, the Depositor, any other Mortgage Loan Seller, the Trustee, the Certificate Administrator, the Paying Agent, the Custodian, the Master Servicer, the Special Servicer, the Operating Advisor, or any other sub-servicer.
KeyBank has been engaged in the servicing of commercial mortgage loans since 1995 and commercial mortgage loans originated for securitization since 1998. The following table sets forth information about KeyBank’s portfolio of master or primary serviced commercial mortgage loans as of the dates indicated.
Loans | 12/31/2012 | 12/31/2013 | 12/31/2014 | 6/30/2015 | ||||
By Approximate Number | 10,972 | 16,716 | 16,772 | 17,891 | ||||
By Approximate Aggregate Principal Balance (in billions) | $101.6 | $170.1 | $174.6 | $186.6 |
Within this servicing portfolio are, as of June 30, 2015, approximately 9,153 loans with a total principal balance of approximately $140.9 billion that are included in approximately 362 commercial mortgage-backed securitization transactions.
KeyBank’s servicing portfolio includes mortgage loans secured by multifamily, office, retail, hospitality and other types of income-producing properties that are located throughout the United States. KeyBank also services newly-originated commercial mortgage loans and mortgage loans acquired in the secondary market for issuers of commercial and multifamily mortgage-backed securities, financial institutions and a variety of investors and other third parties. Based on the aggregate outstanding principal balance of loans being serviced as of June 30, 2015, the Mortgage Bankers Association of America ranked KeyBank the third largest commercial mortgage loan servicer in terms of total master and primary servicing volume.
KeyBank is approved as the master servicer and primary servicer for commercial mortgage-backed securities rated by Moody’s, S&P and Fitch and ranked by Morningstar. Moody’s does not assign specific
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ratings to servicers. KeyBank is on S&P’s Select Servicer list as a U.S. Commercial Mortgage Master Servicer and as a U.S. Commercial Mortgage Primary Servicer, and S&P has assigned to KeyBank the rating of “Strong” as a master servicer and primary servicer. Fitch has assigned to KeyBank the ratings of “CMS1” as a master servicer and “CPS2” as a primary servicer. Morningstar has assigned KeyBank the rankings of “MOR CS1” as master servicer and primary servicer. S&P’s and Fitch’s ratings and Morningstar’s rankings of a servicer are based on an examination of many factors, including the servicer’s financial condition, management team, organizational structure and operating history.
KeyBank’s servicing system utilizes a mortgage-servicing technology platform with multiple capabilities and reporting functions. This platform allows KeyBank to process mortgage servicing activities including: (i) performing account maintenance; (ii) tracking borrower communications; (iii) tracking real estate tax escrows and payments, insurance escrows and payments, replacement reserve escrows and operating statement data and rent rolls; (iv) entering and updating transaction data; and (v) generating various reports. KeyBank generally uses the CREFC® format to report to trustees of commercial mortgage-backed securities (CMBS) transactions and maintains a website (www.keybank.com/key2cre) that provides access to reports and other information to investors in CMBS transactions that KeyBank is the primary servicer or the master servicer.
KeyBank maintains the accounts it uses in connection with servicing commercial mortgage loans. The following table sets forth the ratings assigned to KeyBank’s long-term deposits and short-term deposits.
S&P | Fitch | Moody’s | ||||
Long-Term Deposits | A- | A- | Aa3 | |||
Short-Term Deposits | A-2 | F1 | P-1 |
KeyBank believes that its financial condition will not have any material adverse effect on the performance of its duties under the Pooling and Servicing Agreement and, accordingly, will not have any material adverse impact on the performance of the KeyBank Serviced Loans or the performance of the certificates.
KeyBank has developed policies, procedures and controls for the performance of its servicing obligations in compliance with applicable servicing agreements, servicing standards and the servicing criteria set forth in Item 1122 of Regulation AB under the Securities Act of 1933, as amended. These policies, procedures and controls include, among other things, procedures to (i) notify borrowers of payment delinquencies and other loan defaults, (ii) work with borrowers to facilitate collections and performance prior to the occurrence of a servicing transfer event, (iii) if a servicing transfer event occurs as a result of a delinquency, loss, bankruptcy or other loan default, transfer the subject loan to the special servicer, and (iv) manage delinquent loans and loans subject to the bankruptcy of the borrower.
KeyBank’s servicing policies and procedures for the servicing functions it will perform under the KeyBank Primary Servicing Agreement for assets of the same type included in the COMM 2015-CCRE27 transaction are updated periodically to keep pace with the changes in the CMBS industry. For example, KeyBank has, in response to changes in federal or state law or investor requirements, (i) made changes in its insurance monitoring and risk-management functions as a result of the Terrorism Risk Insurance Act of 2002 and (ii) established a website where investors and mortgage loan borrowers can access information regarding their investments and mortgage loans. Otherwise, KeyBank’s servicing policies and procedures have been generally consistent for the last three years in all material respects.
KeyBank is, as the primary servicer of the KeyBank Serviced Loans, generally responsible for the primary servicing functions with respect to the KeyBank Serviced Loans. KeyBank may from time to time perform some of its servicing obligations under the KeyBank Primary Servicing Agreement through one or more third-party vendors that provide servicing functions such as appraisals, environmental assessments, property condition assessments, property management, real estate brokerage services and other services necessary in the routine course of acquiring, managing and disposing of REO Property. KeyBank will, in accordance with its internal procedures and applicable law, monitor and review the performance of any third-party vendors retained by it to perform servicing functions, and KeyBank will
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remain liable for its servicing obligations under the KeyBank Primary Servicing Agreement as if KeyBank had not retained any such vendors.
Generally, all amounts received by KeyBank on the KeyBank Serviced Loans are initially deposited into a common clearing account with collections on other commercial mortgage loans serviced by KeyBank and are then allocated and transferred to the appropriate account within the time required by the KeyBank Primary Servicing Agreement. Similarly, KeyBank generally transfers any amount that is to be disbursed to a common disbursement account on the day of the disbursement.
KeyBank will not have primary responsibility for custody services of original documents evidencing the KeyBank Serviced Loans. KeyBank may from time to time have custody of certain of such documents as necessary for enforcement actions involving particular KeyBank Serviced Loans or otherwise. To the extent that KeyBank has custody of any such documents for any such servicing purposes, such documents will be maintained in a manner consistent with the servicing standard described in the KeyBank Primary Servicing Agreement.
No securitization transaction involving commercial or multifamily mortgage loans in which KeyBank was acting as primary servicer has experienced a servicer event of default as a result of any action or inaction of KeyBank as primary servicer including as a result of KeyBank’s failure to comply with the applicable servicing criteria in connection with any securitization transaction.
From time to time KeyBank is a party to lawsuits and other legal proceedings as part of its duties as a loan servicer and otherwise arising in the ordinary course of its business. KeyBank does not believe that any such lawsuits or legal proceedings that are pending at this time would, individually or in the aggregate, have a material adverse effect on its business or its ability to service loans pursuant to the KeyBank Primary Servicing Agreement. KeyBank is not aware of any lawsuits or legal proceedings, contemplated or pending, by governmental authorities against KeyBank at this time.
The foregoing information under this sub-heading regarding KeyBank has been provided by KeyBank.
Summary of KeyBank Primary Servicing Agreement
General. KeyBank has acquired the right to be appointed as the primary servicer of 25 mortgage loans, representing approximately 20.8% of the initial outstanding pool balance, which are the mortgage loans to be transferred to the depositor by KeyBank (the “KBNA Transferred Loans”). Accordingly, Midland, as master servicer, and KeyBank, as primary servicer, will enter into a Primary Servicing Agreement, dated as of October 1, 2015 (the “KeyBank Primary Servicing Agreement”). The primary servicing of such KBNA Transferred Loans will be governed by the KeyBank Primary Servicing Agreement. The following summary describes certain provisions of the KeyBank Primary Servicing Agreement relating to the primary servicing and administration of the KBNA Transferred Loans. The summary does not purport to be complete and is subject, and qualified in its entirety, by reference to the provisions of the KeyBank Primary Servicing Agreement.
Summary of Duties. With respect to the KBNA Transferred Loans, KeyBank, as primary servicer, will be responsible for performing the primary servicing of such mortgage loans in a manner consistent with the Pooling and Servicing Agreement and the Servicing Standard. Primary servicing will include:
· | maintaining the servicing file and releasing files upon borrower request or payoff of such mortgage loan as approved by the master servicer, |
· | (i) within five (5) business days of receipt of a repurchase demand, reporting any such repurchase demand to the master servicer and forwarding a copy of such repurchase demand to the master servicer, (ii) within five (5) business days of discovery or notice of a document defect or breach, notifying the master servicer in writing of any discovered document defect or breach of mortgage loan representation, and (iii) cooperating with the master servicer in pursuing its obligations to make a repurchase claim against the related mortgage loan seller, |
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· | collecting monthly payments and escrow and reserve payments and maintaining a primary servicer certificate account and applicable escrow and reserve accounts to hold such collections, |
· | remitting to the master servicer on a timely basis monthly payments less any primary servicing fees and compensation in the nature of additional servicing compensation due to KeyBank, as primary servicer and any escrow and reserve payments to be held by KeyBank, |
· | preparing such reports, including a monthly remittance report and such other reports as reasonably requested by the master servicer from time to time, |
· | collecting monthly and quarterly borrower reports, rent rolls, and operating statements, |
· | performing annual inspections of the related mortgaged property and providing inspection reports to the master servicer, |
· | monitoring borrower insurance obligations on such loans and related specially serviced mortgage loans and obtaining such property level insurance when the borrower fails to maintain such insurance, |
· | maintaining errors and omissions insurance and an appropriate fidelity bond, |
· | notifying the master servicer of any borrower requests or transactions;provided,however, that KeyBank will not approve or consummate any borrower request or transaction without obtaining the prior written consent of the master servicer, |
· | promptly notifying master servicer of any defaults under the KBNA Transferred Loans, collection issues or customer issues; provided that KeyBank will not take any action with respect to enforcing such loans without the prior written approval of the master servicer, and |
· | with respect to all servicing responsibilities of the master servicer under the Pooling and Servicing Agreement which are not being performed by KeyBank under the KeyBank Primary Servicing Agreement, KeyBank will reasonably cooperate with the master servicer to facilitate the timely performance of such servicing responsibilities. |
KeyBank’s custodial responsibilities are limited to original letters of credit as long as it (i) has a vault or other adequate safety procedures in place satisfactory to the master servicer, in its sole discretion, or (ii) outsources such responsibility to a third party vendor satisfactory to the master servicer, who has a vault or other adequate safety procedures in place satisfactory to the master servicer, in its sole discretion.
KeyBank will provide to master servicer access to all the servicing files, mortgage loan files and servicing systems maintained by KeyBank with respect to the KBNA Transferred Loans for audit and review. KeyBank will not take any action (whether or not authorized under the KeyBank Primary Servicing Agreement) as to which the master servicer has advised it in writing that the master servicer or the trustee has received an opinion of counsel to the effect that such action if taken would result in the imposition of a tax on any portion of the trust fund or cause either the Lower-Tier REMIC or the Upper-Tier REMIC to fail to qualify as a REMIC or cause the Grantor Trust to fail to qualify as a grantor trust. KeyBank will fully cooperate with the master servicer in connection with avoiding the imposition of a tax on any portion of the trust fund or cause either the Lower-Tier REMIC or the Upper-Tier REMIC to fail to qualify as a REMIC or cause the Grantor Trust to fail to qualify as a grantor trust.
KeyBank will also timely provide such certifications, reports and registered public accountant attestations required by the KeyBank Primary Servicing Agreement or by the master servicer to permit it to comply with the Pooling and Servicing Agreement and the depositor to comply with its Exchange Act reporting obligations.
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The master servicer and KeyBank will each designate a portfolio manager and other appropriate personnel to receive documents and communications between each other such that KeyBank is able to perform its obligations under the KeyBank Primary Servicing Agreement and the master servicer is able to perform its supervisory authority over KeyBank. KeyBank will not communicate directly with the special servicer, the Controlling Class Representative or any Rating Agency except in very limited circumstances set forth in the KeyBank Primary Servicing Agreement.
KeyBank will have no obligation to make any principal and interest advance or any servicing advances. KeyBank will not make any Major Decisions, Special Servicer Decisions or any other action requiring the approval of the Master Servicer under the KeyBank Primary Servicing Agreement without the prior written approval of the master servicer.
Such consent may be subject to: (a) the prior approval of the special servicer, the Controlling Class Representative or any mezzanine loan lender, as applicable, if so required under the Pooling and Servicing Agreement or the related mortgage loan documents, which approval may be withheld in such person’s sole discretion, and (b) obtaining any No Downgrade Confirmation required under the Pooling and Servicing Agreement or the related mortgage loan documents, which confirmation may be withheld in such person’s sole discretion. The master servicer will request any such approvals or No Downgrade Confirmation.
Compensation. As compensation for its activities under the KeyBank Primary Servicing Agreement, the primary servicing fee will be paid only to the extent that the master servicer receives the servicing fee with respect to each KBNA Transferred Loan under the Pooling and Servicing Agreement. KeyBank is not entitled to any Prepayment Interest Excess. KeyBank will be entitled to such additional servicing compensation as set forth in the KeyBank Primary Servicing Agreement. Generally, if received and the master servicer is entitled to retain such amounts under the Pooling and Servicing Agreement, KeyBank will also be entitled to retain, with respect to each related KBNA Transferred Loan, as additional primary servicing compensation (the “Additional Primary Servicing Compensation”), the following:
· | 100% of the master servicer’s share of any assumption application fees and 50% of the master servicer’s share of any defeasance fees; |
· | 100% of the master servicer’s share of any charges for beneficiary statements or demands, amounts collected for checks returned for insufficient funds, other loan processing fees and customary charges actually paid by the borrower; |
· | 100% of penalty charges, except as required to offset outstanding interest on Advances, reserves required to be funded and principal and interest due with respect to the related KBNA Transferred Loan; |
· | 50% of the master servicer’s share of any extension fees, modification fees, assumption fees, processing fees or consent fees; and |
· | subject to certain limitations set forth in the Pooling and Servicing Agreement, any interest or other income earned on deposits in the related accounts held by KeyBank. |
KeyBank will be entitled to 50% of the master servicer’s share of any fees received by the master servicer with respect to any Special Servicer Decision and any Major Decisions regardless as to whether KeyBank processes such action or not. The special servicer will process all Special Servicer Decisions and Major Decisions, unless the master servicer and the special servicer mutually agree that the master servicer will process such Special Servicer Decision or Major Decision. If the master servicer and the special servicer mutually agree that the master servicer will process such Special Servicer Decision or Major Decision, the master servicer will have the right to require KeyBank to process such Special Servicer Decision or Major Decision.
KeyBank will be required to promptly remit to the master servicer any additional servicing compensation or other amounts received by it which KeyBank is not entitled to retain. Except as
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otherwise provided, KeyBank will pay all its overhead and similar expenses incurred by it in connection with its servicing activities under the KeyBank Primary Servicing Agreement.
Indemnification; Limitation of Liability. Neither KeyBank nor any Affiliates, directors, officers, employees, members, managers, representatives or agents (including sub-servicers) of KeyBank (the “KeyBank Parties”) will be under any liability to the master servicer for any action taken, or for refraining from the taking of any action, in good faith pursuant to the KeyBank Primary Servicing Agreement, or for errors in judgment. However, this will not protect the KeyBank Parties against losses resulting from any breach of warranties or representations made in the KeyBank Primary Servicing Agreement, or against any liability that would otherwise be imposed on KeyBank by reason of its willful misconduct, bad faith, fraud or negligence (or by reason of any specific liability imposed under the KeyBank Primary Servicing Agreement for a breach of the accepted primary servicing practices) in the performance of its duties under the KeyBank Primary Servicing Agreement or by reason of its negligent disregard of its obligations or duties under the KeyBank Primary Servicing Agreement. The KeyBank Parties will be indemnified and held harmless by the master servicer against any loss, liability or expenses (including legal fees and expenses) (collectively, the “Losses”) incurred by KeyBank in connection with any claim, loss, penalty, fine, foreclosure, judgment, liability or legal action relating to the KeyBank Primary Servicing Agreement (1) resulting from (a) any breach by the master servicer of a representation or warranty made by it under the KeyBank Primary Servicing Agreement or (b) the master servicer’s willful misconduct, bad faith, fraud, negligence or negligent disregard of its obligations under the KeyBank Primary Servicing Agreement or (2) that may be imposed on, incurred by or asserted against it in connection with, related to, or arising out of, the KeyBank Primary Servicing Agreement or the transactions contemplated by the KeyBank Primary Servicing Agreement, other than any Losses incurred by KeyBank (i) that are specifically required to be borne by KeyBank without right of reimbursement pursuant to the terms of the KeyBank Primary Servicing Agreement or (ii) incurred by reason of (A) a breach of any representation or warranty by KeyBank, or (B) willful misconduct, bad faith, fraud or negligence of KeyBank in the performance of its respective duties under the KeyBank Primary Servicing Agreement or negligent disregard of its respective obligations or duties under the KeyBank Primary Servicing Agreement; provided, however, that the indemnification under clause (2) above will be strictly limited to any actual amount of indemnification received by the master servicer under the Pooling and Servicing Agreement as a result of pursuing the Trust on behalf of the KeyBank for such indemnification. The master servicer agrees to use reasonable efforts to pursue the Trust for any indemnification against any Losses incurred by KeyBank under clause (2) above.
KeyBank will indemnify and hold harmless the master servicer and its directors, officers, representatives, members, managers, agents, employees or Affiliates against any Losses incurred by the master servicer in connection with any claim, loss, penalty, fine, foreclosure, judgment, liability or legal action relating to the KeyBank Primary Servicing Agreement resulting from (1) any breach by KeyBank of a representation or warranty made by KeyBank in the KeyBank Primary Servicing Agreement or (2) any willful misconduct, bad faith, fraud or negligence by KeyBank in the performance of its obligations or duties under the KeyBank Primary Servicing Agreement or by reason of negligent disregard of such obligations or duties.
Termination. The KeyBank Primary Servicing Agreement will be terminated with respect to KeyBank if any of the following occurs:
· | the master servicer elects to terminate KeyBank following a KeyBank Primary Servicer Termination Event (as defined below) (except as provided in the following bullet); |
· | immediately by the master servicer (or at the Depositor’s request to the extent the Depositor has the right to request termination of KeyBank under the Pooling and Servicing Agreement) pursuant to the final two bullets listed under KeyBank Primary Servicer Termination Events below; |
· | upon resignation by KeyBank; |
· | with respect to any KBNA Transferred Loan, in the event such KBNA Transferred Loan is substituted pursuant to the Pooling and Servicing Agreement; |
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· | at the option of the master servicer in its sole discretion, in the event a KBNA Transferred Loan is purchased or repurchased pursuant to the Pooling and Servicing Agreement; |
· | with respect to a KBNA Transferred Loan, upon defeasance of such KBNA Transferred Loan; or |
· | if the master servicer’s responsibilities and duties as master servicer under the Pooling and Servicing Agreement have been assumed by the trustee, and the trustee has the right to terminate KeyBank pursuant to the Pooling and Servicing Agreement. |
“KeyBank Primary Servicer Termination Event”, means any one of the following events:
· | any failure by KeyBank to remit amounts due to the accounts maintained by KeyBank or to the master servicer, any amount required to be so remitted by KeyBank which failure continues unremedied for one (1) business day following the date on which such deposit or remittance was required to be made; |
· | any failure on the part of KeyBank duly to observe or perform in any material respect any other of the covenants or agreements or to cure the breach of any representations or warranties on the part of KeyBank in all material respects, which, in either event, continues unremedied for a period of twenty (20) days (ten (10) days in the case of a failure to pay the premium for any insurance policy required to be maintained under the KeyBank Primary Servicing Agreement) after the date on which written notice of such failure, requiring the same to be remedied, will have been given to KeyBank by the master servicer, provided, however, if such breach is capable of being cured and KeyBank is diligently pursuing such cure, such twenty (20) day period (or ten (10) day period, in the case of insurance) will be extended for an additional twenty (20) days; |
· | any breach on the part of KeyBank of any representation or warranty made pursuant to the KeyBank Primary Servicing Agreement which materially and adversely affects the interests of any class of certificateholders and which continues unremedied for a period of twenty (20) days after the date on which notice of such breach, requiring the same to be remedied, will have been given to KeyBank by the master servicer, provided, however, if such breach is capable of being cured and KeyBank is diligently pursuing such cure, such twenty (20) day period will be extended for an additional thirty (30) days; |
· | a decree or order of a court or agency or supervisory authority having jurisdiction in the premises in an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law for the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings, or for the winding up or liquidation of its affairs, will have been entered against KeyBank and such decree or order will have remained in force, undischarged or unstayed for a period of fifty (50) days; |
· | KeyBank consents to the appointment of a conservator, receiver, liquidator, trustee or similar official in any bankruptcy, insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to KeyBank, or of or relating to all or substantially all of its property; |
· | KeyBank admits in writing its inability to pay its debts generally as they become due, files a petition to take advantage of any applicable insolvency or reorganization statute, makes an assignment for the benefit of its creditors, or voluntarily suspends payment of its obligations or take any corporate action in furtherance of the foregoing; |
· | (1) Moody’s has (A) qualified, downgraded or withdrawn its rating or ratings of one or more classes of Certificates or any class of securities backed by a Serviced Companion Loan, or (B) placed one or more classes of Certificates or any class of securities backed by a Serviced Companion Loan on “watch status” in contemplation of possible rating downgrade or withdrawal (and such qualification, downgrade or withdrawal or “watch status” placement shall not have been withdrawn by Moody’s within 60 days) and, in the case of either of clauses (A) or (B), publicly |
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citing servicing concerns with the master servicer (because of actions of KeyBank) or KeyBank as the sole or a material factor in such rating action; (2) DBRS has (A) qualified, downgraded or withdrawn its rating or ratings of one or more Classes of Certificates or any class of securities backed by a Serviced Companion Loan, or (B) placed one or more Classes of Certificates or any class of securities backed by a Serviced Companion Loan on “watch status” in contemplation of possible rating downgrade or withdrawal (and such qualification, downgrade or withdrawal or “watch status” placement shall not have been withdrawn by DBRS within 60 days of such event, and, in case of either of clause (A) or (B), publicly citing servicing concerns with the Master Servicer (because of actions of KeyBank) or KeyBank as the sole or a material factor in such rating action; or (3) KeyBank ceases to have a servicer rating of at least “CPS3” from Fitch and such rating is not reinstated within 60 days; | ||
· | a Servicer Termination Event by the master servicer under the Pooling and Servicing Agreement, which Servicer Termination Event occurred as a result of the direct failure of KeyBank to perform any obligation required under the KeyBank Primary Servicing Agreement; |
· | the failure of KeyBank to comply with any of the requirements to deliver any reports or certificates at the time such report or certification is required under the KeyBank Primary Servicing Agreement, which failure continues for five (5) days after KeyBank’s receipt of written notice thereof; or |
· | subject to the Pooling and Servicing Agreement, any failure by KeyBank to comply with any of the requirements under Article X of the Pooling and Servicing Agreement applicable to KeyBank, including the failure to deliver any reports, certificates or disclosure information under the Exchange Act or the rules and regulations promulgated under the Exchange Act, at the time such report, certification or information is required under Article X of the Pooling and Servicing Agreement. |
Notwithstanding the foregoing, upon any termination of KeyBank, KeyBank will be entitled to receive all accrued and unpaid primary servicing fees through the date of termination and will cooperate fully with the master servicer to transition primary servicing of the KBNA Transferred Loans to the master servicer or its designee.
The foregoing information regarding the KeyBank Primary Servicing Agreement set forth in this “Summary of KeyBank Primary Servicing Agreement” section has been provided by Midland.
Berkeley Point Capital LLC
Berkeley Point Capital LLC, a Delaware limited liability company (“Berkeley Point”) will be appointed as primary servicer for the CCRE Mortgage Loans identified on Annex A-1 to this free writing prospectus as NMS Los Angeles Multifamily Portfolio, GSP MHP Portfolio I and Brookhaven MHP, representing 7.0%, 1.9% and 0.8%, respectively, of the outstanding pool balance as of the cut-off date, and in such capacity, will be responsible for the primary servicing and administration of these mortgage loans. In addition, with respect to 4 mortgage loans secured by mortgaged properties representing approximately 4.3% of the outstanding pool balance as of the cut-off date, Berkeley Point Capital LLC will have the right to assume limited subservicing duties consisting of performing inspections and collecting financial statements.
The principal executive offices of Berkeley Point are located at 4550 Montgomery Avenue, Suite 1100, Bethesda, Maryland 20814 and principal servicing office of Berkeley Point is located at One Beacon Street, 14th Floor, Boston, Massachusetts 02108 and its telephone number is (877) 526-3562. Berkeley Point is an affiliate under common control with CCRE Lending.
Berkeley Point serves as primary servicer in various transactions and has a primary servicer rating of “CPS2” from Fitch, is an evaluated servicer for CMBS by KBRA and listed as such on their website and is rated Above Average by S&P. Berkeley Point also has a current special servicer ratings of “CSS3+” from Fitch and Average by S&P.
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Berkeley Point is a commercial real estate finance company with a primary focus on multifamily and healthcare real estate loans. Berkeley Point, directly or through its affiliates, originates, sells, services and manages commercial real estate loans primarily for multifamily and healthcare properties across the United States through programs offered by Fannie Mae, Freddie Mac, Ginnie Mae and FHA. Berkeley Point is a Fannie Mae DUS™, Freddie Mac Program Plus® and MAP- and LEAN-approved FHA lender and servicer, and a Ginnie Mae Issuer. It also services loans for life insurance companies. Together with its predecessor entities, Berkeley Point has originated and serviced commercial real estate loans originated under programs offered by Fannie Mae, Freddie Mac and FHA for approximately 25 years and expects to continue doing so. It has been named special servicer on three Freddie Mac K-Series securitizations, the first in 2009, and one in each of 2013 and 2014. Berkeley Point has offices located in Bethesda, Maryland, Boston, Massachusetts, Santa Monica, California, Irvine, California, San Francisco, California, Columbus, Ohio, Dallas, Texas, Brentwood, Tennessee, Seattle, Washington and St. Louis, Missouri.
As of June 30, 2015, Berkeley Point’s primary servicing portfolio was comprised of 1784 loans with an aggregate outstanding principal balance of approximately $29.420 billion, of which Berkeley Point is the primary servicer through sub-servicing agreements with master servicers on 68 Freddie Mac K-Series securitizations for 214 loans with an approximate aggregate outstanding principal balance of approximately $5.16 billion, and 22 commercial mortgage loans with an aggregate outstanding principal balance of approximately $890 million in other CMBS securitizations.
As of June 30, 2015, Berkeley Point had 64 personnel involved in the servicing and asset management of commercial real estate loans and CMBS pools, of which 56 were dedicated to the primary servicing unit.
The table below sets forth information about the various pools of loans primarily serviced by Berkeley Point as of the dates indicated:
CMBS Pools | As of 12/31/2012 | As of 12/31/2013 | As of 12/31/2014 | |||
By Number | 33 pools (95 loans) | 46 pools (122 loans) | 67 pools (177 loans) | |||
Primary Serviced Portfolio By Approximate Aggregate Unpaid Principal Balance | $2.2 billion | $3.1 billion | $4.842 billion |
The commercial real estate loans that Berkeley Point originates and for which Berkeley Point provides servicing are generally multifamily but may include mortgage loans secured by the same types of income producing properties as those securing the underlying mortgage loans backing the series COMM 2015-CCRE27 certificates. Accordingly, the assets that Berkeley Point services as well as assets originated and/or owned by it or its affiliates may, depending upon the particular circumstances, including the nature and location of such assets, compete with the mortgaged real properties securing the underlying mortgage loans for tenants, purchasers, financing and so forth.
Berkeley Point has developed policies and procedures for the performance of its servicing obligations in compliance with applicable USAP and Reg AB servicing standards. Technology can assist the performance of a servicer. Berkeley Point generally utilizes technology infrastructure to bolster and facilitate controls for compliance with pooling and servicing agreements, loan administration and procedures in workout/resolution and commercially appropriate standardization and automation to provide for improved accuracy, efficiency, transparency, monitoring and controls.
Berkeley Point may from time to time engage consultants to perform property inspections and to provide asset management on certain properties. Berkeley Point does not have any material primary advancing obligations with respect to the CMBS pools as to which it is a primary servicer, and accordingly Berkeley Point does not believe that its financial condition will have any adverse effect on the performance of its duties under the series COMM 2015-CCRE27 pooling and servicing agreement nor
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any material impact on the mortgage pool performance or the performance of the series COMM 2015-CCRE27 certificates.
Berkeley Point will not have primary responsibility for custody services of original documents evidencing the underlying mortgage loans. On occasion, Berkeley Point may have custody of certain of such documents as necessary for the performance of its duties with respect to underlying Mortgage Loans or otherwise. To the extent that Berkeley Point has custody of any such documents, such documents will be maintained in a manner consistent with the Servicing Standard.
Berkeley Point is not an affiliate of the Depositor, the Sponsors, the Issuing Entity, the Master Servicer, the Trustee or any originator other than CCRE Lending and any underwriter other than Cantor Fitzgerald & Co and CastleOak Securities, L.P. Other than its relationship with CCRE Lending and CF&Co. (and indirectly any relationships of those two entities disclosed elsewhere in this free writing prospectus), there are no specific relationships involving or relating to this transaction or the securitized mortgage loans between Berkeley Point or any of its affiliates, on the one hand, and the Depositor, the Sponsors or the Issuing Entity, on the other hand, that currently exist or that existed during the past two (2) years. In addition, there are no business relationships, agreements, arrangements, transactions or understandings that have been entered into outside the ordinary course of business or on terms other than would be obtained in an arm’s length transaction with an unrelated third party -- apart from the subject securitization transaction -- between Berkeley Point or any of its affiliates, on the one hand, and the Depositor, the Sponsors or the Issuing Entity, on the other hand, that currently exist or that existed during the past two (2) years and that are material to an investor’s understanding of the series COMM 2015-CCRE27 certificates.
No securitization transaction involving commercial or multifamily mortgage loans in which Berkeley Point is acting as primary or special servicer has experienced an event of default as a result of any action or inaction performed by Berkeley Point in such capacity. In addition, there has been no previous disclosure of material non-compliance with servicing criteria by Berkeley Point with respect to any other securitization transaction involving commercial or multifamily mortgage loans in which Berkeley Point was acting as primary servicer or special servicer.
From time to time, Berkeley Point and its affiliates are parties to lawsuits and other legal proceedings by governmental authorities or other entities arising in the ordinary course of business. Berkeley Point does not believe that any such current lawsuits or legal proceedings would, individually or in the aggregate, have a material adverse effect on its business or its ability to serve as servicer or be material to a certificateholder.
The information set forth above under this heading “—Berkeley Point Capital LLC” has been provided by Berkeley Point and neither the Depositor nor any Underwriter takes any responsibility for such information or makes any representation or warranty as to its accuracy or completeness.
Summary of Berkeley Point Primary Servicing Agreement
General. Berkeley Point has acquired the right to be appointed as the primary servicer of 3 mortgage loans identified on Annex A-1 to this free writing prospectus as NMS Los Angeles Multifamily Portfolio, GSP MHP Portfolio I and Brookhaven MHP, which secure mortgaged properties representing, in the aggregate, approximately 9.7% of the outstanding pool balance as of the cut-off date, which such mortgage loans are to be transferred to the depositor by CCRE (the “CCRE Transferred Loan”). Accordingly, Midland, as master servicer, and Berkeley Point, as primary servicer, will enter into a primary servicing agreement dated as of October 1, 2015 (the “BPC Primary Servicing Agreement”). The primary servicing of such CCRE Transferred Loan will be governed by the BPC Primary Servicing Agreement. The following summary describes certain provisions of the BPC Primary Servicing Agreement relating to the primary servicing and administration of the CCRE Transferred Loan. The summary does not purport to be complete and is subject, and qualified in its entirety, by reference to the provisions of the BPC Primary Servicing Agreement.
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In addition to its services pursuant to the BPC Primary Servicing Agreement, Berkeley Point will have the right to assume certain limited subservicing duties consisting of performing inspections and collecting financial statements with respect to 4 of the CCRE Mortgage Loans, representing approximately 4.3% of the Initial Outstanding Pool Balance, and will receive a fee equal to 0.0200% per annum for each such CCRE Mortgage Loan. The limited, non-cashiering subservicing duties will be performed pursuant to a separate limited subservicing agreement between BP and Master Servicer (“BPC Non-Cashiering Limited Subservicing Agreement”). The information included in this Section pertains solely to the BPC Primary Servicing Agreement.
Summary of Duties. With respect to the CCRE Transferred Loan, Berkeley Point, as primary servicer, will be responsible for performing the primary servicing of such mortgage loan in a manner consistent with the Pooling and Servicing Agreement and the Servicing Standard. Primary servicing will include:
· | maintaining the servicing file and releasing files upon borrower request or payoff of such mortgage loan as approved by the master servicer, |
· | within five (5) business days of receipt of a repurchase demand, reporting any such repurchase demand to the master servicer and forwarding a copy of such repurchase demand to the master servicer, (ii) within five (5) business days of discovery or notice of a document defect or breach, notifying the master servicer in writing of any discovered document defect or breach of mortgage loan representation, and (iii) cooperating with the master servicer in pursuing its obligations to make a repurchase claim against the related mortgage loan seller, |
· | collecting monthly payments and escrow and reserve payments and maintaining a primary servicer certificate account and applicable escrow and reserve accounts to hold such collections, |
· | remitting to the master servicer on a timely basis monthly payments less any primary servicing fees and compensation in the nature of additional servicing compensation due to Berkeley Point, as primary servicer and any escrow and reserve payments to be held by PNC Bank, |
· | preparing such reports, including a day one report, monthly remittance report and such other reports as reasonably requested by the master servicer from time to time, |
· | collecting monthly and quarterly borrower reports, rent rolls and operating statements, |
· | performing annual inspections of the related mortgaged property and providing inspection reports to the master servicer, |
· | monitoring borrower insurance obligations on such loans and related specially serviced mortgage loans and obtaining such property level insurance when the borrower fails to maintain such insurance, |
· | maintaining errors and omissions insurance and an appropriate fidelity bond, |
· | notifying the master servicer of any borrower requests or transactions; provided, however, that Berkeley Point will not approve or consummate any borrower request or transaction without obtaining the prior written consent of the master servicer, |
· | promptly notifying master servicer of any defaults under the CCRE Transferred Loan, collection issues or customer issues; provided that Berkeley Point will not take any action with respect to enforcing such loans without the prior written approval of the master servicer, and |
· | with respect to all servicing responsibilities of the master servicer under the Pooling and Servicing Agreement which are not being performed by Berkeley Point under the BPC Primary Servicing Agreement, Berkeley Point will reasonably cooperate with the master servicer to facilitate the timely performance of such servicing responsibilities. |
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Berkeley Point’s custodial responsibilities are limited to original letters of credit as long as it (i) has a vault or other adequate safety procedures in place satisfactory to the master servicer, in its sole discretion, or (ii) outsources such responsibility to a third party vendor satisfactory to the master servicer, who has a vault or other adequate safety procedures in place satisfactory to the master servicer, in its sole discretion.
Berkeley Point will provide to master servicer access to all the servicing files, mortgage loan files and servicing systems maintained by Berkeley Point with respect to the CCRE Transferred Loan for audit and review. Berkeley Point will not take any action (whether or not authorized under the BPC Primary Servicing Agreement) as to which the master servicer has advised it in writing that the master servicer or the trustee has received an opinion of counsel to the effect that such action if taken would result in the imposition of a tax on any portion of the trust fund or cause either the Lower-Tier REMIC or the Upper-Tier REMIC to fail to qualify as a REMIC or cause the Grantor Trust to fail to qualify as a grantor trust. Berkeley Point will fully cooperate with the master servicer in connection with avoiding the imposition of a tax on any portion of the trust fund or cause either the Lower-Tier REMIC or the Upper-Tier REMIC to fail to qualify as a REMIC or cause the Grantor Trust to fail to qualify as a grantor trust.
Berkeley Point will also timely provide such certifications, reports and registered public accountant attestations required by the BPC Primary Servicing Agreement or by the master servicer to permit it to comply with the Pooling and Servicing Agreement and the depositor to comply with its Exchange Act reporting obligations.
The master servicer and Berkeley Point will each designate a portfolio manager and other appropriate personnel to receive documents and communications between each other such that Berkeley Point is able to perform its obligations under the BPC Primary Servicing Agreement and the master servicer is able to perform its supervisory authority over Berkeley Point. Berkeley Point will not communicate directly with the special servicer, the Controlling Class Representative or any Rating Agency except in very limited circumstances set forth in the BPC Primary Servicing Agreement.
Berkeley Point will have no obligation to make any principal and interest advance or any servicing advances. Berkeley Point will not make any Major Decisions, Special Servicer Decisions or any other action requiring the approval of the master servicer under the BPC Primary Servicing Agreement without the prior written approval of the master servicer.
Such consent may be subject to: (a) the prior approval of the special servicer, the Controlling Class Representative or any mezzanine loan lender, as applicable, if so required under the Pooling and Servicing Agreement or the related mortgage loan documents, which approval may be withheld in such person’s sole discretion, and (b) obtaining any No Downgrade Confirmation required under the Pooling and Servicing Agreement or the related mortgage loan documents, which confirmation may be withheld in such person’s sole discretion. The master servicer will request any such approvals or No Downgrade Confirmation.
Compensation. As compensation for its activities under the BPC Primary Servicing Agreement, the primary servicing fee will be paid only to the extent that the master servicer receives the servicing fee with respect to the CCRE Transferred Loan under the Pooling and Servicing Agreement. Berkeley Point is not entitled to any Prepayment Interest Excess. Berkeley Point will be entitled to such additional servicing compensation as set forth in the BPC Primary Servicing Agreement. Generally, if received and the master servicer is entitled to retain such amounts under the Pooling and Servicing Agreement, Berkeley Point will also be entitled to retain, with respect to the CCRE Transferred Loan, as additional primary servicing compensation (the “Additional Primary Servicing Compensation”), the following:
· | 100% of late charges to the extent Berkeley Point is performing the related collection work, except as required to offset outstanding interest on Advances, reserves required to be funded and principal and interest due with respect to the CCRE Transferred Loan; |
· | 100% of the master servicer’s share of any charges for beneficiary statements or demands and amounts collected for checks returned for insufficient funds; |
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· | 50% of the master servicer’s share of any assumption fees and assumption application fees; |
· | 50% of the master servicer’s share of any extension fees, modification fees or consent fees; and |
· | subject to certain limitations set forth in the Pooling and Servicing Agreement, any interest or other income earned on deposits in the related accounts held by Berkeley Point. |
Berkeley Point will be entitled to 50% of the master servicer’s share of any fees received by the master servicer with respect to any Special Servicer Decision and any Major Decisions regardless as to whether Berkeley Point processes such action or not. The special servicer will process all Special Servicer Decisions and Major Decisions, unless the master servicer and the special servicer mutually agree that the master servicer will process such Special Servicer Decision or Major Decision. If the master servicer and the special servicer mutually agree that the master servicer will process such Special Servicer Decision or Major Decision, the master servicer will have the right to require Berkeley Point to process such Special Servicer Decision or Major Decision.
Berkeley Point will be required to promptly remit to the master servicer any additional servicing compensation or other amounts received by it which Berkeley Point is not entitled to retain. Except as otherwise provided, Berkeley Point will pay all its overhead and similar expenses incurred by it in connection with its servicing activities under the BPC Primary Servicing Agreement.
Indemnification; Limitation of Liability. Neither Berkeley Point nor any Affiliates, directors, officers, employees, members, managers, representatives or agents (including sub-servicers) of Berkeley Point (the “BPC Parties”) will be under any liability to the master servicer for any action taken, or for refraining from the taking of any action, in good faith pursuant to the BPC Primary Servicing Agreement, or for errors in judgment. However, this will not protect the BPC Parties against losses resulting from any breach of warranties or representations made in the BPC Primary Servicing Agreement, or against any liability that would otherwise be imposed on Berkeley Point by reason of its willful misconduct, bad faith, fraud or negligence (or by reason of any specific liability imposed under the BPC Primary Servicing Agreement for a breach of the accepted primary servicing practices) in the performance of its duties under the BPC Primary Servicing Agreement or by reason of its negligent disregard of its obligations or duties under the BPC Primary Servicing Agreement. The BPC Parties will be indemnified and held harmless by the master servicer against any loss, liability or expense (including legal fees and expenses) (collectively, the “Losses”) incurred by Berkeley Point in connection with any claim, loss, penalty, fine, foreclosure, judgment, liability or legal action relating to the BPC Primary Servicing Agreement (1) resulting from the master servicer’s willful misconduct, bad faith, fraud, negligence or negligent disregard of its obligations under the BPC Primary Servicing Agreement or (2) that may be imposed on, incurred by or asserted against it in connection with, related to, or arising out of, the BPC Primary Servicing Agreement or the transactions contemplated by the BPC Primary Servicing Agreement, other than any Losses incurred by Berkeley Point (i) that are specifically required to be borne by Berkeley Point without right of reimbursement pursuant to the terms of the BPC Primary Servicing Agreement or (ii) incurred by reason of (A) a breach of any representation or warranty by Berkeley Point or (B) willful misconduct, bad faith, fraud or negligence of Berkeley Point in the performance of its respective duties under the BPC Primary Servicing Agreement or negligent disregard of its respective obligations or duties under the BPC Primary Servicing Agreement; provided, however, that the indemnification under clause (2) above will be strictly limited to any actual amount of indemnification received by the master servicer under the Pooling and Servicing Agreement as a result of pursuing the Trust on behalf of the Berkeley Point for such indemnification.
Berkeley Point will indemnify and hold harmless the master servicer and its directors, officers, representatives, members, managers, agents, employees or Affiliates against any Losses incurred by the master servicer in connection with any claim, loss, penalty, fine, foreclosure, judgment, liability or legal action relating to the BPC Primary Servicing Agreement resulting from (1) any breach by Berkeley Point of a representation or warranty made by Berkeley Point in the BPC Primary Servicing Agreement or (2) any willful misconduct, bad faith, fraud or negligence by Berkeley Point in the performance of its
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respective obligations or duties under the BPC Primary Servicing Agreement or under the Pooling and Servicing Agreement or by reason of negligent disregard of such obligations or duties.
Termination. The BPC Primary Servicing Agreement will be terminated with respect to Berkeley Point if any of the following occurs:
· | the master servicer elects to terminate Berkeley Point following a BPC Primary Servicer Termination Event (as defined below) (except as provided in the following bullet); |
· | immediately by the master servicer (or at the Depositor’s request to the extent the Depositor has the right to request termination of Berkeley Point under the Pooling and Servicing Agreement) pursuant to the final two bullets listed under BPC Primary Servicer Termination Events below; |
· | upon resignation by Berkeley Point; |
· | in the event the CCRE Transferred Loan becomes a specially serviced loan or is substituted, purchased or repurchased pursuant to the Pooling and Servicing Agreement; |
· | with respect to a CCRE Transferred Loan, upon defeasance of such CCRE Transferred Loan; or |
· | if the master servicer’s responsibilities and duties as master servicer under the Pooling and Servicing Agreement have been assumed by the trustee, and the trustee has the right to terminate Berkeley Point pursuant to the Pooling and Servicing Agreement. |
“BPC Primary Servicer Termination Event”, means any one of the following events:
· | any failure by Berkeley Point to remit amounts due to the accounts maintained by Berkeley Point or to the master servicer, any amount required to be so remitted by Berkeley Point; |
· | any failure on the part of Berkeley Point duly to observe or perform in any material respect any other of the covenants or agreements or to cure the breach of any representations or warranties on the part of Berkeley Point in all material respects, which, in either event, continues unremedied for a period of twenty (20) days (ten (10) days in the case of a failure to pay the premium for any insurance policy required to be maintained under the BPC Primary Servicing Agreement) after the date on which written notice of such failure, requiring the same to be remedied, will have been given to Berkeley Point by the master servicer, provided, however, if such breach (other than a failure to pay insurance policy premiums) is capable of being cured and Berkeley Point is diligently pursuing such cure, such twenty (20) day period will be extended for an additional twenty (20) days; |
· | any breach on the part of Berkeley Point of any representation or warranty made pursuant to the BPC Primary Servicing Agreement which materially and adversely affects the interests of any class of certificateholders and which continues unremedied for a period of twenty (20) days after the date on which notice of such breach, requiring the same to be remedied, will have been given to Berkeley Point by the master servicer, provided, however, if such breach is capable of being cured and Berkeley Point is diligently pursuing such cure, such twenty (20) day period will be extended for an additional twenty (20) days; |
· | a decree or order of a court or agency or supervisory authority having jurisdiction in the premises in an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law for the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings, or for the winding up or liquidation of its affairs, will have been entered against Berkeley Point and such decree or order will have remained in force, undischarged or unstayed for a period of forty-five (45) days; |
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· | Berkeley Point consents to the appointment of a conservator, receiver, liquidator, trustee or similar official in any bankruptcy, insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to Berkeley Point, or of or relating to all or substantially all of its property; |
· | Berkeley Point admits in writing its inability to pay its debts generally as they become due, files a petition to take advantage of any applicable insolvency or reorganization statute, makes an assignment for the benefit of its creditors, or voluntarily suspends payment of its obligations or take any corporate action in furtherance of the foregoing; |
· | (1) Moody’s, Fitch or DBRS has (A) qualified, downgraded or withdrawn its rating or ratings of one or more classes of Certificates or any class of securities backed by a Serviced Companion Loan, or (B) placed one or more classes of Certificates or any class of securities backed by a Serviced Companion Loan on “watch status” in contemplation of possible rating downgrade or withdrawal (and such qualification, downgrade or withdrawal or “watch status” placement shall not have been withdrawn by Moody’s, Fitch or DBRS, as applicable, within 60 days) and, in the case of either of clauses (A) or (B), publicly citing servicing concerns with the master servicer (because of actions of Berkeley Point) or Berkeley Point as the sole or a material factor in such rating action; |
· | a Servicer Termination Event by the master servicer under the Pooling and Servicing Agreement, which Servicer Termination Event occurred as a result of the failure of Berkeley Point to perform any obligation required under the BPC Primary Servicing Agreement; |
· | the failure of Berkeley Point to comply with any of the requirements to deliver any reports or certificates at the time such report or certification is required under the BPC Primary Servicing Agreement, which continues unremedied for five (5) days after the date on which written notice of such failure, requiring the same to be remedied, will have been given to Berkeley Point by the master servicer; |
· | subject to the Pooling and Servicing Agreement and any applicable grace periods, any failure by Berkeley Point to comply with any of the requirements under Article X of the Pooling and Servicing Agreement applicable to Berkeley Point or the master servicer, including the failure to deliver any reports, certificates or disclosure information under the Exchange Act or the rules and regulations promulgated under the Exchange Act, at the time such report, certification or information is required under Article X of the Pooling and Servicing Agreement; or |
· | subject to the Pooling and Servicing Agreement, any failure of Berkeley Point to comply with any and all requirements to deliver any items required by Items 1122 and 1123 of Regulation AB under any other pooling and servicing agreement relating to any other series of certificates offered by the Depositor. |
Notwithstanding the foregoing, upon any termination of Berkeley Point, Berkeley Point will be entitled to receive all accrued and unpaid primary servicing fees through the date of termination and will cooperate fully with the master servicer to transition primary servicing of the CCRE Transferred Loan to the master servicer or its designee.
The foregoing information regarding the BPC Primary Servicing Agreement set forth in this“—Summary of Berkeley Point Primary Servicing Agreement” section has been provided by Midland.
THE TRUSTEE, CERTIFICATE ADMINISTRATOR AND CUSTODIAN
Wells Fargo Bank, National Association (“Wells Fargo”), will act as the trustee (in such capacity, the “Trustee”), the certificate administrator (in such capacity, the “Certificate Administrator”), custodian (in such capacity, the “Custodian”) and the paying agent (in such capacity, the “Paying Agent”) under the Pooling and Servicing Agreement.
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Wells Fargo is a national banking association and a wholly-owned subsidiary of Wells Fargo & Company. A diversified financial services company, Wells Fargo & Company is a U.S. bank holding company with approximately $1.7 trillion in assets and approximately 265,000 employees as of December 31, 2014, which provides banking, insurance, trust, mortgage and consumer finance services throughout the United States and internationally. Wells Fargo provides retail and commercial banking services and corporate trust, custody, securities lending, securities transfer, cash management, investment management and other financial and fiduciary services. Wells Fargo is a co-originator of the 11 Madison Avenue Loan Combination and the holder of the 11 Madison Avenue Non-StandalonePari PassuCompanion Loans designated as Note A-3-C1 and Note A-3-C2. The transaction parties and any Companion Loan holder may maintain banking and other commercial relationships with Wells Fargo and its affiliates. Wells Fargo maintains principal corporate trust offices at 9062 Old Annapolis Road, Columbia, Maryland 21045-1951 (among other locations) and its office for certificate transfer services is located at Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479.
Wells Fargo has provided corporate trust services since 1934. Wells Fargo acts as a trustee for a variety of transactions and asset types, including corporate and municipal bonds, mortgage-backed and asset-backed securities and collateralized debt obligations. As of June 30, 2014, Wells Fargo was acting as trustee on approximately 339 series of commercial mortgage backed-securities with an aggregate principal balance of approximately $171 billion.
Wells Fargo Bank has provided corporate trust services since 1934. Wells Fargo Bank acts as a trustee for a variety of transactions and asset types, including corporate and municipal bonds, mortgage-backed and asset-backed securities and collateralized debt obligations. As of December 31, 2014, Wells Fargo Bank was acting as trustee on approximately 344 series of commercial mortgage-backed securities with an aggregate principal balance of approximately $157 billion.
In its capacity as trustee on commercial mortgage securitizations, Wells Fargo is generally required to make an advance if the related master servicer or special servicer fails to make a required advance. In the past three years, Wells Fargo has not been required to make an advance on a commercial mortgage-backed securities transaction.
Under the terms of the Pooling and Servicing Agreement, the Certificate Administrator is responsible for securities administration, which includes pool performance calculations, distribution calculations and the preparation of monthly distribution reports, and for the preparation and filing of all REMIC and grantor trust tax returns and information on behalf of the Issuing Entity and the preparation of monthly reports on Form 10-D, certain current reports on Form 8-K and annual reports on Form 10-K that are required to be filed with the Securities and Exchange Commission on behalf of the Issuing Entity. Wells Fargo has been engaged in the business of securities administration since June 30, 1995, and in connection with commercial mortgage-backed securities since 1997. As of December 31, 2014, Wells Fargo was acting as securities administrator with respect to more than $171 billion of outstanding commercial mortgage-backed securities.
Wells Fargo is acting as custodian of the mortgage loan files pursuant and subject to the terms of the Pooling and Servicing Agreement. In such capacity, Wells Fargo is responsible for holding and safeguarding the mortgage notes and other contents of the mortgage files on behalf of the Certificateholders. Wells Fargo maintains each mortgage loan file in a separate file folder marked with a unique bar code to assure loan-level file integrity and to assist in inventory management. Files are segregated by transaction or investor. Wells Fargo has been engaged in the mortgage document custody business for more than 25 years. Wells Fargo maintains its commercial document custody facilities in Minneapolis, Minnesota. As of December 31, 2014, Wells Fargo was acting as custodian of more than 116,000 commercial mortgage loan files.
Wells Fargo serves or may have served within the past two years as loan file custodian for various mortgage loans owned by a Sponsor and an affiliate of such Sponsor one or more of those mortgage loans may be included in the Trust. The terms of any custodial agreement under which those services
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are provided by Wells Fargo are customary for the mortgage-backed securitization industry and provide for the delivery, receipt, review and safekeeping of mortgage loan files.
On June 18, 2014, a group of institutional investors filed a civil complaint in the Supreme Court of the State of New York, New York County, against Wells Fargo, in its capacity as trustee under 276 residential mortgage backed securities (“RMBS”) trusts, which was later amended on July 18, 2014, to increase the number of trusts to 284 RMBS trusts. On November 24, 2014, the plaintiffs filed a motion to voluntarily dismiss the state court action without prejudice. That same day, a group of institutional investors filed a civil complaint in the United States District Court for the Southern District of New York against Wells Fargo, alleging claims against the bank in its capacity as trustee for 274 RMBS trusts (the “Complaint”). In December 2014, the plaintiffs’ motion to voluntarily dismiss their original state court action was granted. As with the prior state court action, the Complaint is one of six similar complaints filed contemporaneously against RMBS trustees (Deutsche Bank, Citibank, HSBC, Bank of New York Mellon and US Bank) by a group of institutional investor plaintiffs. The Complaint against Wells Fargo alleges that the trustee caused losses to investors and asserts causes of action based upon, among other things, the trustee’s alleged failure to (i) enforce repurchase obligations of mortgage loan sellers for purported breaches of representations and warranties, (ii) notify investors of alleged events of default purportedly caused by breaches by mortgage loan servicers, and (iii) abide by appropriate standards of care following alleged events of default. Relief sought includes money damages in an unspecified amount, reimbursement of expenses, and equitable relief. Other cases alleging similar causes of action have been filed against Wells Fargo and other trustees by RMBS investors in these and other transactions. There can be no assurances as to the outcome of the litigation, or the possible impact of the litigation on the trustee or the RMBS trusts. However, Wells Fargo denies liability and believes that it has performed its obligations under the RMBS trusts in good faith, that its actions were not the cause of any losses to investors, and that it has meritorious defenses, and it intends to contest the plaintiffs’ claims vigorously.
The foregoing information concerning the Trustee, Certificate Administrator has been provided by Wells Fargo. Wells Fargo does not make any representations as to the validity or sufficiency of the Pooling and Servicing Agreement (other than as to it being a valid obligation of the Certificate Administrator and Custodian), the Certificates, the Mortgage Loans, this free writing prospectus (other than as to the accuracy of the information provided by the Certificate Administrator and Custodian) or any related documents and will not be accountable for the use or application by or on behalf of the Master Servicer or the Special Servicer of any funds paid to the Master Servicer or any Special Servicer in respect of the Certificates or the Mortgage Loans, or any funds deposited into or withdrawn from the certificate account or any other account by or on behalf of the Master Servicer or any Special Servicer.
The Trustee is required to at all times be, and will be required to resign if it fails to be, (i) a corporation, national bank, national banking association or a trust company, organized and doing business under the laws of any state or the United States of America, (ii) authorized under such laws to exercise corporate trust powers and to accept the trust conferred under the Pooling and Servicing Agreement, having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by federal or state authority and will not be an affiliate of the Master Servicer or the Special Servicer and (iii) (a) an institution whose long term senior unsecured debt is rated at least “A2” by Moody’s, “A-” by Fitch and “A” by DBRS, and (b) whose short term unsecured debt is rated at least “P-1” by Moody’s, “F1” by Fitch and “R-1 (middle)” from DBRS, or has been assigned such other ratings as are acceptable to the Rating Agencies or has a fiscal agent that would be an eligible Trustee under the Pooling and Servicing Agreement.
The Depositor, the Underwriters, the Sponsors, the Mortgage Loan Sellers, the Master Servicer, the Special Servicer, the Operating Advisor and the Certificate Administrator may maintain banking and other commercial relationships with the Trustee and its affiliates.
The Pooling and Servicing Agreement provides that no provision of such agreement will be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct or bad faith;provided,however, that if no Servicer Termination Event has occurred and is continuing, the Trustee will be required to perform, and will be liable for, only those duties specifically
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required under the Pooling and Servicing Agreement. Upon receipt of any of the various certificates, reports or other instruments required to be furnished to it pursuant to the Pooling and Servicing Agreement, the Trustee will be required to examine those documents and to determine whether they conform, on their face, to the requirements of that agreement. Within 30 days after the occurrence of any Servicer Termination Event of which a responsible officer of the Trustee has actual knowledge, the Trustee is required to promptly transmit by mail to the Depositor, the Certificate Administrator (who then is required to notify all Certificateholders) and the 17g-5 Information Provider (who will promptly post such notice to the 17g-5 Information Provider’s website) notice of such occurrence, unless such Servicer Termination Event has been cured.
Certain Matters Regarding the Trustee
The Pooling and Servicing Agreement provides that the Trustee will not be liable for an error of judgment made in good faith by a responsible officer of the Trustee, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts. In addition, the Trustee will not be liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with the direction of holders of Certificates entitled to at least 50% of the Voting Rights relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under the Pooling and Servicing Agreement (unless a higher percentage of Voting Rights is required for such action). If no Servicer Termination Event has occurred and is continuing, the Trustee will not be bound to make any investigation into the facts or matters stated in any document, unless requested in writing to do so by holders of Certificates entitled to greater than 25% of the Percentage Interests of each affected Class;provided,however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of the Pooling and Servicing Agreement, the Trustee may require indemnity reasonably satisfactory to it from such requesting holders against such expense or liability as a condition to taking any such action.
The Trustee and any director, officer, employee, representative or agent of the Trustee, will be entitled to indemnification by the Issuing Entity, for any loss, liability damages, claims or unanticipated expenses (including reasonable attorneys’ fees) arising out of or incurred by the Trustee in connection with its participation in the transaction and any act or omission of the Trustee relating to the exercise and performance of any of the powers and duties of the Trustee under the Pooling and Servicing Agreement. However, the indemnification will not extend to any loss, liability or expense that constitutes a specific liability imposed on the Trustee pursuant to the Pooling and Servicing Agreement, or to any loss, liability or expense incurred by reason of willful misconduct, bad faith, fraud or negligence on the part of the Trustee in the performance of its obligations and duties under the Pooling and Servicing Agreement, or by reason of its negligent disregard of those obligations or duties, or as may arise from a breach of any representation, warranty or covenant of the Trustee made in the Pooling and Servicing Agreement.
The Trustee will be entitled to execute any of its trusts or powers under the Pooling and Servicing Agreement or perform any of its duties under the Pooling and Servicing Agreement either directly or by or through agents or attorneys, and the Trustee will not be relieved of any of its duties or obligations by virtue of the appointment of any agents or attorneys.
Resignation and Removal of the Trustee
The Trustee will be permitted at any time to resign from its obligations and duties under the Pooling and Servicing Agreement by giving written notice to the Depositor, the Master Servicer, the Special Servicer, the Certificate Administrator, the Operating Advisor, the Mortgage Loan Sellers, the Directing Holder and the 17g-5 Information Provider (who will promptly post such notice to the 17g-5 Information Provider’s website). Upon receiving such notice of resignation, the Depositor will be required to promptly appoint a successor Trustee, which successor will be, if no Control Termination Event has occurred and is continuing, reasonably acceptable to the Directing Holder. If no successor Trustee has accepted an
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appointment within a specified period after the giving of notice of resignation, the resigning Trustee may petition any court of competent jurisdiction to appoint a successor Trustee.
If at any time the Trustee ceases to be eligible to continue as Trustee under the Pooling and Servicing Agreement, or if at any time the Trustee becomes incapable of acting, or if certain events of, or proceedings in respect of, bankruptcy or insolvency occur with respect to the Trustee, any public officer takes charge or control of the Trustee or its property, the Master Servicer or the Depositor will be authorized to remove the Trustee and appoint a successor Trustee. In addition, holders of the Certificates entitled to at least 51% of the Voting Rights may, at any time, remove the Trustee under the Pooling and Servicing Agreement and appoint a successor Trustee.
At any time, for the purpose of meeting any legal requirements of any jurisdiction in which any part of the Issuing Entity or property securing the same is located, the Trustee will have the power to appoint one or more persons or entities approved by the Trustee to act (at the expense of the Issuing Entity) as co-trustee or co-trustees, jointly with the Trustee, or separate trustee or separate trustees, of all or any part of the Issuing Entity, and to vest in such co-trustee or separate trustee such powers, duties, obligations, rights and trusts as the Trustee may consider necessary or desirable. Except as required by applicable law, the appointment of a co-trustee or separate trustee will not relieve the Trustee of its responsibilities, obligations and liabilities under the Pooling and Servicing Agreement to the extent set forth in the Pooling and Servicing Agreement;provided that no Trustee under the Pooling and Servicing Agreement will be personally liable by reason of any act or omission of any other trustee under the Pooling and Servicing Agreement.
Any resignation or removal of a trustee and appointment of a successor trustee will not become effective until acceptance of appointment by the successor trustee. Notwithstanding the foregoing, upon any termination of the Trustee under the Pooling and Servicing Agreement, the Trustee will continue to be entitled to receive from the Issuing Entity all accrued and unpaid compensation and expenses and indemnity amounts through the date of termination, plus the reimbursement of all advances made by the Trustee and interest thereon as provided in the Pooling and Servicing Agreement. In addition, if the Trustee is terminated without cause, the terminating party is required to pay all of the expenses of the Trustee, necessary to effect the transfer of its responsibilities to the successor trustee. The Trustee will be required to bear all reasonable out of pocket costs and expenses of each party to the Pooling and Servicing Agreement and each Rating Agency in connection with the resignation of such Trustee. Any successor trustee must have a combined capital and surplus of at least $50,000,000 and have a debt rating that satisfies certain criteria set forth in the Pooling and Servicing Agreement.
In addition, certain provisions regarding the obligations and duties of the Trustee, including those related to resignation and termination, may be subject to amendment in connection with a TIA Applicability Determination. See “The Pooling and Servicing Agreement—Amendment” in this free writing prospectus.
Certain Matters Regarding the Certificate Administrator
The Certificate Administrator is required to at all times be, and will be required to resign if it fails to be, (i) a corporation, national bank, national banking association or a trust company, organized and doing business under the laws of any state or the United States of America, (ii) authorized under such laws to exercise corporate trust powers and to accept the trust conferred under the Pooling and Servicing Agreement, having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by federal or state authority and shall not be an affiliate of the Master Servicer or the Special Servicer and (iii) an institution (a) whose long-term senior unsecured debt is rated at least “A2” by Moody’s, “A-” by Fitch and “A” by DBRS, if the Certificate Administrator has a short-term debt rating of at least “R-1 (middle)” from DBRS, and (b) whose short-term unsecured debt is rated at least “P-1” by Moody’s and “F1” by Fitch or has been assigned such other ratings as are acceptable to the Rating Agencies or has a fiscal agent that would be an eligible Certificate Administrator under the Pooling and Servicing Agreement.
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The Certificate Administrator makes no representations as to the validity or sufficiency of the Pooling and Servicing Agreement (other than as to it being a valid obligation of the Certificate Administrator), the Certificates, the Mortgage Loans, this free writing prospectus (other than as to the accuracy of the information provided by the Certificate Administrator as set forth above) or any related documents and will not be accountable for the use or application by or on behalf of the Master Servicer or the Special Servicer of any funds paid to the Master Servicer or any Special Servicer in respect of the Certificates or the Mortgage Loans, or any funds deposited into or withdrawn from the certificate account or any other account by or on behalf of the Master Servicer or any Special Servicer. The Pooling and Servicing Agreement provides that no provision of such agreement shall be construed to relieve the Certificate Administrator from liability for its own negligent action, its own negligent failure to act or its own willful misconduct or bad faith.
The Pooling and Servicing Agreement provides that the Certificate Administrator shall not be liable for an error of judgment made in good faith by a responsible officer of the Certificate Administrator, unless it shall be proved that the Certificate Administrator was negligent in ascertaining the pertinent facts. In addition, the Certificate Administrator will not be liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with the direction of holders of Certificates entitled to greater than 50% of the percentage interest of each affected Class, or of the aggregate Voting Rights of the Certificates, relating to the time, method and place of conducting any proceeding for any remedy available to the Certificate Administrator, or exercising any trust or power conferred upon the Certificate Administrator, under the Pooling and Servicing Agreement (unless a higher percentage of Voting Rights is required for such action).
The Certificate Administrator and any director, officer, employee, representative or agent of the Certificate Administrator, will be entitled to indemnification by the Issuing Entity for any loss, liability, damages, claims or unanticipated expenses (including reasonable attorneys’ fees and expenses) arising out of or incurred by the Certificate Administrator in connection with its participation in the transaction and any act or omission of the Certificate Administrator relating to the exercise and performance of any of the powers and duties of the Certificate Administrator (including in any capacities in which it serves,e.g., Paying Agent, REMIC administrator, Authenticating Agent, Custodian, Certificate Registrar and 17g-5 Information Provider) under the Pooling and Servicing Agreement. However, the indemnification will not extend to any loss, liability or expense that constitutes a specific liability imposed on the Certificate Administrator pursuant to the Pooling and Servicing Agreement, or to any loss, liability or expense incurred by reason of willful misconduct, bad faith, fraud or negligence on the part of the Certificate Administrator in the performance of its obligations and duties under the Pooling and Servicing Agreement, or by reason of its negligent disregard of those obligations or duties, or as may arise from a breach of any representation or warranty of the Certificate Administrator made in the Pooling and Servicing Agreement.
The Certificate Administrator will be entitled to perform any of its duties under the Pooling and Servicing Agreement either directly or by or through agents, nominees, custodians or attorneys, and the Certificate Administrator will not be relieved of any of its duties or obligations by virtue of the appointment of any agents, nominees, custodians or attorneys.
The Certificate Administrator will be the REMIC administrator and the 17g-5 Information Provider.
The Certificate Administrator will be permitted at any time to resign from its obligations and duties under the Pooling and Servicing Agreement by giving written notice to the Depositor, the Master Servicer, the Special Servicer, the Trustee, the Operating Advisor, the Mortgage Loan Sellers and the 17g-5 Information Provider (who will promptly post such notice to the 17g-5 Information Provider’s website). Upon receiving this notice of resignation, the Trustee will be required to promptly appoint a successor Certificate Administrator (which may be the Trustee). If no successor Certificate Administrator shall have accepted an appointment within a specified period after the giving of notice of resignation, the resigning Certificate Administrator may petition any court of competent jurisdiction to appoint a successor Certificate Administrator. The Certificate Administrator will be required to bear all reasonable out of pocket costs and expenses of each party to the Pooling and Servicing Agreement and each Rating Agency in connection with the resignation of such Certificate Administrator.
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The Depositor may direct the Trustee to terminate the Certificate Administrator upon 5 business days’ notice if the Certificate Administrator fails to comply with certain of its reporting obligations under the Pooling and Servicing Agreement.
Trustee and Certificate Administrator Fee
As compensation for the performance of its routine duties, the Trustee and Certificate Administrator will be paid a fee (collectively, the “Trustee/Certificate Administrator Fee”). The Trustee/Certificate Administrator Fee will be payable monthly from amounts received in respect of interest on each Mortgage Loan (prior to application of such interest payments to make payments on the certificates) and will accrue at a rate (the “Trustee/Certificate Administrator Fee Rate”), equal to 0.0048%per annum, and will be computed on the same accrual basis as interest accrues on the related Mortgage Loan and based on the Stated Principal Balance of the related Mortgage Loan as of the Due Date in the immediately preceding Collection Period. The Trustee/Certificate Administrator Fee will be paid to the Certificate Administrator and the Certificate Administrator will be required to remit to the Trustee the trustee fee in accordance with the terms of the Pooling and Servicing Agreement from the Trustee/Certificate Administrator Fee. In addition, the Trustee and Certificate Administrator will each be entitled to recover from the Issuing Entity all reasonable unanticipated expenses and disbursements incurred or made by such party in accordance with any of the provisions of the Pooling and Servicing Agreement, but not including routine expenses incurred in the ordinary course of performing its duties as Trustee or Certificate Administrator, as applicable, under the Pooling and Servicing Agreement, and not including any expense, disbursement or advance as may arise from its willful misconduct, negligence, fraud or bad faith.
PAYING AGENT, CERTIFICATE REGISTRAR, CUSTODIAN AND AUTHENTICATING AGENT
The Certificate Administrator will be the paying agent (in that capacity, the “Paying Agent”). In addition, the Certificate Administrator will initially serve as registrar (in that capacity, the “Certificate Registrar”) for purposes of recording and otherwise providing for the registration of the Certificates and of transfers and exchanges of the definitive certificates, if issued, and as authenticating agent of the certificates (in that capacity, the “Authenticating Agent”). The Certificate Administrator will be responsible for paying the fees of each such agent.
Based solely on the monthly loan information provided by the Master Servicer, the Certificate Administrator will calculate the amount of principal and interest to be paid to each class of Certificates on each Distribution Date. In accordance with the Pooling and Servicing Agreement and based on the monthly loan information provided by the Master Servicer, the Certificate Administrator will perform distribution calculations, remit distributions on the Distribution Date to certificateholders and prepare a monthly statement to certificateholders detailing the payments received and the activity on the Mortgage Loans during the collection period. In performing these obligations, the Certificate Administrator will be able to conclusively rely on the information provided to it by the Master Servicer, and the Certificate Administrator will not be required to recompute, recalculate or verify the information provided to it by the Master Servicer. The Certificate Administrator is responsible for the preparation of all REMIC and grantor trust tax returns on behalf of the Issuing Entity.
The Custodian is responsible for holding and safeguarding the mortgage notes, the participation certificates and other contents of the Mortgage Loan files on behalf of the Trustee and the Certificateholders (other than with respect to any Non-Serviced Mortgage Loan). The Custodian will hold such Mortgage Loan files exclusively for the use and benefit of the Issuing Entity. The Custodian will not have any duty or obligation to inspect, review or examine any of the documents, instruments, certificates or other papers relating to the Mortgage Loans delivered to it to determine that the same are valid. The disposition of the Mortgage Loan files will be governed by the Pooling and Servicing Agreement.
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THE OPERATING ADVISOR
Park Bridge Lender Services LLC (“Park Bridge Lender Services””), a New York limited liability company and an indirect, wholly-owned subsidiary of Park Bridge Financial LLC (“Park Bridge Financial”), will act as operating advisor (in such capacity, the “Operating Advisor”) under the Pooling and Servicing Agreement with respect to each Mortgage Loan (other than any Non-Serviced Mortgage Loan) and Serviced Loan Combination. The principal offices of Park Bridge Lender Services are located at 560 Lexington Avenue, 17th floor, New York, New York 10022 and its telephone number is (212) 230-9090.
Park Bridge Financial is a privately held commercial real estate finance advisory firm headquartered in New York, New York. Since its founding in 2009, Park Bridge Financial and its affiliates have been engaged by commercial banks (community, regional and multi-national), opportunity funds, REITs, investment banks, insurance companies, entrepreneurs and hedge funds on a wide variety of advisory assignments. These engagements have included: mortgage brokerage, loan syndication, contract underwriting, valuations, risk assessments, surveillance, litigation support, expert testimony, loan restructures as well as the disposition of commercial mortgages and related collateral.
Park Bridge Financial’s technology platform is server-based with back-up, disaster-recovery, encryption and archival services performed by vendors and data centers that comply with industry and regulatory standards.
As of September 30, 2015, Park Bridge Lender Services was acting as operating advisor or trust advisor for commercial mortgage-backed securities transactions with an approximate aggregate initial principal balance of $68.6 billion issued in 63 transactions.
There are no legal proceedings pending against Park Bridge Lender Services, or to which any property of Park Bridge Lender Services is subject, that are material to the Certificateholders, nor does Park Bridge Lender Services have actual knowledge of any proceedings of this type contemplated by governmental authorities.
The foregoing information set forth above in this “—The Operating Advisor” section of this free writing prospectus concerning Park Bridge Lender Services has been provided by Park Bridge Lender Services.
Certain terms of the Pooling and Servicing Agreement regarding the Operating Advisor’s rights, obligations, removal, replacement, resignation, transfer, and compensation are described under “The Pooling and Servicing Agreement—The Operating Advisor” in this free writing prospectus. Certain limitations on the Operating Advisor’s liability under the Pooling and Servicing Agreement are described under “The Pooling and Servicing Agreement—Certain Matters Regarding the Depositor,the Master Servicer,the Special Servicer and the Operating Advisor” in this free writing prospectus.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
All the shares of capital stock of the Depositor are held by DB U.S. Financial Markets Holding Corporation.
GACC, a Sponsor and a Mortgage Loan Seller, Deutsche Bank Securities Inc., an Underwriter, and the Depositor are affiliates of each other.
IH Capital, LLC, which provides mortgage origination, underwriting, securitization and related consulting services to BNY Mellon, is an affiliate of Ironhound Management Company, LLC, which provides consulting services to borrowers.
KeyBank, a Sponsor, a Mortgage Loan Seller and a Primary Servicer, and KeyBanc Capital Markets Inc., an Underwriter, are affiliates of each other.
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CCRE Lending, a Sponsor and Mortgage Loan Seller, and Cantor Fitzgerald & Co. and CastleOak Securities, L.P., each an Underwriter, and Berkeley Point Capital LLC, a Primary Servicer, are affiliates of each other.
Rialto, the Special Servicer, is an affiliate of the entity that is expected to purchase the Class E, Class F, Class G, Class H, Class X-D, Class X-E, Class X-F and Class V Certificates and may purchase other certificates and is expected to act as the initial Directing Holder with respect to each Mortgage Loan (other than any Non-Serviced Mortgage Loan or Excluded Mortgage Loan) and Serviced Loan Combination. Rialto, which is acting as the Special Servicer, assisted the B-Piece Buyer with due diligence relating to the Mortgage Loans to be included in the Mortgage Pool.
Rialto, the Special Servicer, is currently the servicer of, and an affiliate of Rialto is the current holder of, a mezzanine loan secured by direct or indirect equity interests in the borrower under the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Atlanta Multifamily Portfolio, representing approximately 4.8% of the Initial Outstanding Pool Balance as of the Cut-Off Date, which mezzanine loan is described under “Description of the Mortgage Pool—Certain Terms and Conditions of the Mortgage Loans—Other Financing” in this free writing prospectus.
Pursuant to certain interim servicing agreements between GACC and certain of its affiliates, on the one hand, and Midland, on the other hand, Midland Loan Services, a Division of PNC Bank, National Association acts as interim servicer with respect to certain mortgage loans, including, prior to their inclusion in the issuing entity, 3 of the Mortgage Loans to be contributed to this securitization by GACC, representing approximately 3.2% of the Initial Outstanding Pool Balance.
Pursuant to certain interim servicing agreements between GACC and certain of its affiliates, on the one hand, and KeyBank, on the other hand, KeyBank acts as interim servicer with respect to certain mortgage loans, including, prior to their inclusion in the Issuing Entity, 7 of the mortgage loans to be contributed by GACC to this securitization, representing approximately 19.2% of the Initial Outstanding Pool Balance.
Pursuant to certain interim servicing agreements between GACC and certain of its affiliates, on the one hand, and Wells Fargo, on the other hand, Wells Fargo acts as interim servicer with respect to certain mortgage loans, including, prior to their inclusion in the Issuing Entity, 9 of the GACC Mortgage Loans, representing approximately 19.7% of the Initial Outstanding Pool Balance.
Pursuant to certain interim servicing agreements between CCRE Lending and certain of its affiliates, on the one hand, and Midland Loan Services, a Division of PNC Bank, National Association, on the other hand, Midland Loan Services, a Division of PNC Bank, National Association acts as interim servicer with respect to certain mortgage loans, including, prior to their inclusion in the issuing entity, 3 of the Mortgage Loans to be contributed to this securitization by CCRE Lending, representing approximately 3.3% of the Initial Outstanding Pool Balance.
Pursuant to certain interim servicing agreements between CCRE Lending and certain of its affiliates, on the one hand, and Wells Fargo, on the other hand, Wells Fargo acts as interim servicer with respect to certain mortgage loans, including, prior to their inclusion in the Issuing Entity, 2 of the CCRE Mortgage Loans, representing approximately 2.4% of the Initial Outstanding Pool Balance, and interim custodian of the loan files for 8 of the CCRE Mortgage Loans, representing approximately 15.4% of the outstanding pool balance as of the cut-off date.
Pursuant to a primary servicing agreement between KeyBank, on the one hand, and Midland, on the other hand, KeyBank will act as primary servicer with respect to the KeyBank Mortgage Loans. The KeyBank Mortgage Loans represent 20.8% of the Initial Outstanding Pool Balance. KeyBank will receive the primary servicing fee set forth on Annex A-1 for the KeyBank Mortgage Loans.
Pursuant to a limited subservicing agreement between Berkeley Point, on the one hand, and Midland, on the other hand, Berkeley Point is expected to assume certain limited subservicing duties consisting of
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performing inspections and collecting financial statements with respect to 4 of the CCRE Mortgage Loans, representing approximately 4.3% of the Initial Outstanding Pool Balance, and will receive a fee equal to 0.0200% per annum for each such CCRE Mortgage Loan.
Pursuant to a primary servicing agreement between Berkeley Point, an affiliate of CCRE Lending, on the one hand, and Midland, on the other hand, Berkeley Point will act as primary servicer with respect to 3 of the CCRE Mortgage Loans, representing in the aggregate approximately 9.7% of the Initial Outstanding Pool Balance, and will receive the primary servicing fee set forth on Annex A-1 for the CCRE Mortgage Loans.
Pursuant to certain interim servicing agreements between BNY Mellon and certain of its affiliates, on the one hand, and Wells Fargo, on the other hand, Wells Fargo acts as interim servicer with respect to certain mortgage loans, including, prior to their inclusion in the Issuing Entity, 11 of the mortgage loans to be contributed to this securitization by BNY Mellon, representing approximately 18.2% of the Initial Outstanding Pool Balance.
Wells Fargo, the Trustee for this transaction, will act as the Certificate Administrator, Custodian, 17g-5 Information Provider, Certificate Registrar and Authenticating Agent for this transaction.
With respect to the 11 Madison Avenue Mortgage Loan, GACC or certain of its affiliates is expected to hold, as of the Closing Date, the 11 Madison Avenue Note A-1-C3 Companion Loan.
Wells Fargo, which is acting as the Trustee, Certificate Administrator and Custodian, is also a co-originator of the 11 Madison Avenue Loan Combination and the holder of the 11 Madison Avenue Non-StandalonePari Passu Companion Loans designated as Note A-3-C1 and Note A-3-C2. In addition, Wells Fargo is the MAD 2015-11MD Certificate Administrator.
DESCRIPTION OF THE MORTGAGE POOL
General
The Issuing Entity to be created by the Depositor will consist of (i) a pool (the “Mortgage Pool”) of 65 fixed-rate mortgage loans, which does not include any Companion Loans (each, a “Mortgage Loan,” and collectively, the “Mortgage Loans”) secured by first liens on 96 commercial, multifamily and manufactured housing community properties (each, a “Mortgaged Property,” and collectively, the “Mortgaged Properties”). The Mortgage Pool has an aggregate principal balance as of the Cut-off Date of approximately $931,617,393 (the “Initial Outstanding Pool Balance”), subject to a variance of plus or minus 5.0%. The principal balances of the Mortgage Loans as of the later of the related due date of such Mortgage Loan in October 2015 and the date of origination of such Mortgage Loan (the “Cut-off Date”) (each, a “Cut-off Date Balance”) will range from $966,058 to $70,000,000 and the average Cut-off Date Balance will be $14,332,575 subject to a variance of plus or minus 5.0%. The calculations of the Initial Outstanding Pool Balance and the respective Cut-off Date Balances of the Mortgage Loans are based on the assumption that all scheduled payments of principal due with respect to the Mortgage Loans during October 2015 are timely made. All numerical information provided in this free writing prospectus with respect to the Mortgage Loans is provided on an approximate basis. All percentages of the Mortgage Pool referred to in this free writing prospectus without further description are approximate percentages of the Initial Outstanding Pool Balance. Descriptions of the terms and provisions of the Mortgage Loans are generalized descriptions of the terms and provisions of the Mortgage Loans in the aggregate. Many of the individual Mortgage Loans have specific terms and provisions that deviate from the general description.
The 11 Madison Avenue Loan Combination is serviced by the MAD 2015-11MD Master Servicer and the MAD 2015-11MD Special Servicer pursuant to the MAD 2015-11MD Trust and Servicing Agreement and the related Intercreditor Agreement.
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The NMS Los Angeles Multifamily Portfolio Loan Combination will be serviced by the Master Servicer and the Special Servicer pursuant to the Pooling and Servicing Agreement and the related Intercreditor Agreement.
“Companion Loan” means each of the 11 Madison Avenue Companion Loans and the NMS Los Angeles Multifamily Portfolio Companion Loans.
“Controlling Companion Loan” means the NMS Los Angeles Multifamily Portfolio Companion Loan.
“Intercreditor Agreement” means with respect to any Loan Combination, the related intercreditor, co-lender or similar agreement in effect from time to time by and between the holders of the related Mortgage Loan and the related Subordinate Companion Loans and the holders of the related ServicedPari Passu Companion Loan(s) relating to the relative rights of such holders. The 11 Madison Avenue intercreditor agreement and the NMS Los Angeles Multifamily Portfolio intercreditor agreement will be an Intercreditor Agreement, as the context may require.
“Loan Combination” means each of the 11 Madison Avenue Loan Combination and the NMS Los Angeles Multifamily Portfolio Loan Combination, as the context may require and as applicable.
“Non-Serviced Companion Loan” means, with respect to any Non-Serviced Loan Combination, any related mortgage note not included in the Issuing Entity that is not serviced under the Pooling and Servicing Agreement and that is generally payable on apari passu basis with a Non-Serviced Mortgage Loan included in the Issuing Entity to the extent set forth in the related Intercreditor Agreement. Each 11 Madison Avenue Companion Loan will be Non-Serviced Companion Loans related to the Issuing Entity.
“Non-Serviced Loan Combination” means any Loan Combination that is not serviced under the Pooling and Servicing Agreement that is divided into one or more notes, which includes a Mortgage Loan included in the Issuing Entity but serviced under another agreement and one or more mortgage notes not included in the Issuing Entity and serviced under another agreement. References herein to a Non-Serviced Loan Combination refer to the aggregate indebtedness under the related notes. The 11 Madison Avenue Loan Combination will be a Non-Serviced Loan Combination related to the Issuing Entity.
“Non-Serviced Mortgage Loan” means, with respect to any Non-Serviced Loan Combination, a Mortgage Loan included in the Issuing Entity but serviced under another agreement. The 11 Madison Avenue Mortgage Loan will be the only Non-Serviced Mortgage Loan.
“Non-Serviced Subordinate Companion Loan” means with respect to any Loan Combination, any related subordinated note not included in the Issuing Entity and serviced under another agreement, which is generally subordinated in right of payment to the related Mortgage Loan to the extent set forth in the related Intercreditor Agreement. As of the Closing Date, the 11 Madison Avenue Subordinate Companion Loans will be the only Non-Serviced Subordinate Companion Loans related to the Issuing Entity.
“Pari Passu Companion Loan” means, with respect to any Loan Combination, any related mortgage note not included in the Issuing Entity that is serviced under the Pooling and Servicing Agreement and that is generally payable on apari passu basis with a Mortgage Loan included in the Issuing Entity to the extent set forth in the related Intercreditor Agreement. Each of the 11 Madison AvenuePari Passu Companion Loans and the NMS Los Angeles Multifamily Portfolio Companion Loans will bePari Passu Companion Loans related to the Issuing Entity.
“Serviced Companion Loan” means, with respect to any Serviced Loan Combination, any related mortgage note not included in the Issuing Entity that is serviced under the Pooling and Servicing Agreement and that is generally payable on apari passu basis with a Mortgage Loan included in the Issuing Entity to the extent set forth in the related Intercreditor Agreement. The NMS Los Angeles Multifamily Portfolio Companion Loan will be the only Serviced Companion Loans related to the Issuing Entity.
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“Serviced Loan Combination” means any Loan Combination serviced under the Pooling and Servicing Agreement, which includes a mortgage note that is included in the Issuing Entity and one or morePari Passu Companion Loans not included in the Issuing Entity. References herein to a Serviced Loan Combination refer to the aggregate indebtedness under the related notes. The NMS Los Angeles Multifamily Portfolio Loan Combination will be the only Serviced Loan Combination related to the Issuing Entity.
“ServicedPari Passu Companion Loan” means, with respect to any Serviced Loan Combination, any relatedPari Passu Companion Loan that is serviced under the Pooling and Servicing Agreement. The NMS Los Angeles Multifamily Portfolio Companion Loans will be ServicedPari Passu Companion Loans related to the Issuing Entity.
“Subordinate Companion Loan” means with respect to any Loan Combination, any related subordinated note not included in the Issuing Entity, which is generally subordinated in right of payment to the related Mortgage Loan to the extent set forth in the related Intercreditor Agreement.
Each Mortgage Loan is evidenced by one or more promissory notes (each, a “Note”) and secured by one or more mortgages, deeds of trust or other similar security instruments (each, a “Mortgage”). Each Mortgage Loan is secured by, among other things, a first mortgage lien on (i) the fee simple estate in an income producing real property, (ii) a leasehold estate in a portion of the mortgaged property and a fee estate in a portion of the mortgaged property which would include Mortgaged Properties constituting the borrower’s leasehold interest or interests in the Mortgaged Property along with the corresponding fee interest of the ground lessor in such Mortgaged Property or (iii) a leasehold estate in the Mortgaged Property and no Mortgage on the related fee estate, as set forth below:
Interest of Borrower Encumbered | Number of Mortgaged Properties | Aggregate Cut-off Date Balance(1) | % of Initial Outstanding Pool Balance(1) | ||||
Fee Simple(2) | 93 | $ | 812,142,719 | 87.2% | |||
Fee Simple/Leasehold | 1 | $ | 70,000,000 | 7.5% | |||
Leasehold | 2 | $ | 49,474,674 | 5.3% | |||
Total | 96 | $ | 931,617,393 | 100.0% |
(1) | Because this table presents information relating to the Mortgaged Properties and not the Mortgage Loans, the information for any Mortgaged Property that relates to a Mortgage Loan secured by more than one Mortgaged Property is based on Allocated Loan Amounts (which amounts, if not specified in the related Mortgage Loan Documents, are based on the appraised values and/or square footage of each Mortgaged Property and/or each Mortgaged Property’s underwritten net cash flow). |
(2) | May include Mortgage Loans secured by the borrower’s leasehold interest in the Mortgaged Property along with the corresponding fee interest of the ground lessor in such Mortgaged Property. |
Subject in some cases to a next business day convention, all of the Mortgage Loans have due dates upon which interest and/or principal payments are due under the related Note (each such date, a “Due Date”) that occur as described in the following table with the indicated grace period.
Due Date | Default Grace Period Days | Number of Mortgage Loans | Aggregate Cut-off Date Balance | % of Initial Outstanding Pool Balance | |||||
6 | 0 | 40 | $ | 737,581,748 | 79.2% | ||||
1 | 5 | 15 | $ | 137,905,097 | 14.8% | ||||
1 | 0 | 10 | $ | 56,130,548 | 6.0% | ||||
65 | $ | 931,617,393 | 100.0% |
As used in this free writing prospectus, “grace period” is the number of days before a payment default is an event of default under each Mortgage Loan. A grace period does not apply to a maturity date or anticipated repayment date payment. The information in the foregoing table is based on the related Mortgage Loan Documents. Certain jurisdictions may impose a statutorily longer grace period. See Annex A-1 to this free writing prospectus for information on the number of days before a payment default is an event of default under each Mortgage Loan.
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Security for the Mortgage Loans
None of the Mortgage Loans is insured or guaranteed by the United States, any governmental agency or instrumentality, any private mortgage insurer or by the Depositor, any Sponsor, any Mortgage Loan Seller, the Master Servicer, the Special Servicer, the Certificate Administrator, the Operating Advisor or the Trustee or any of their respective affiliates. Each Mortgage Loan is or should be considered to be non-recourse to the related borrower. In the event of a default under any Mortgage Loan, the lender’s remedies generally are limited to foreclosing against the specific Mortgaged Property or Mortgaged Properties securing such Mortgage Loan and such limited other assets as may have been pledged to secure such Mortgage Loan. Each Mortgage Loan is secured by one or more Mortgages and an assignment of the related borrower’s (or with respect to any indemnity deed of trust structure, the related property owner’s) interest in the leases, rents, issues and profits of the related Mortgaged Properties. For purposes of the information contained in this free writing prospectus, with respect to Mortgage Loans with an indemnity deed of trust structure, references to the borrower refer to the borrower or the property owner, as applicable. In certain instances, additional collateral exists in the nature of letters of credit, partial indemnities or guaranties, or in the establishment and pledge of one or more reserve or escrow accounts (such accounts, “Reserve Accounts”). In many cases, this additional collateral may be returned to the borrower prior to the related Mortgage Loan maturity date.
With limited exception, each Mortgage constitutes a first lien on a fee or leasehold or combination fee and/or leasehold interest in a Mortgaged Property, subject generally only to the following (collectively, “Permitted Encumbrances”) (i) liens for real property taxes, ground rents, water charges, sewer rents and assessments not yet delinquent and accruing interest or penalties, (ii) covenants, conditions, restrictions, rights of way, easements and other matters of public record acceptable to mortgage lending institutions generally, (iii) such other exceptions and encumbrances on Mortgaged Properties as are reflected in the related title insurance policies, (iv) other matters to which like properties are commonly subject, (v) the rights of tenants, as tenants only, whether underground leases or space leases at the Mortgaged Property and (vi) mortgage liens for a Companion Loan. However, in the case of some of the Mortgaged Properties, a related tenant, related property manager, adjacent property owner or other third party may have a purchase option, right of first refusal, right of first offer or right of first negotiation in connection with a purchase of, or a right to substitute, the subject Mortgaged Property, which right may be senior to the related Mortgage. In addition, there may exist purchase money security interest that encumbers various fixtures at a Mortgaged Property. Furthermore, under applicable state laws, certain after occurring liens and charges (such as liens for real estate taxes) may prime the mortgage encumbering a mortgaged property. See “Risk Factors—Risks Related to the Mortgage Loans—Mortgage Loans Secured by Leasehold Interests May Expose Investors to Greater Risks of Default and Loss” in this free writing prospectus.
Significant Mortgage Loans
The following table sets forth information regarding the 10 largest Mortgage Loans, which represent, in the aggregate, approximately 47.7% of the Initial Outstanding Pool Balance.
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Ten Largest Mortgage Loans
Mortgage Loan | Cut-off Date Balance | % of Initial Outstanding Pool Balance | Mortgage Rate | Remaining Term to Maturity or ARD | U/W NCF DSCR | Cut-off Date LTV | LTV Ratio at Maturity or ARD | Cut-off Date U/W NOI Debt Yield | |||||||||
11 Madison Avenue(1) | $ | 70,000,000 | 7.5% | 3.5602% | 119 | 3.89x | 32.5% | 32.5% | 14.3% | ||||||||
NMS Los Angeles Multifamily Portfolio(2) | $ | 65,000,000 | 7.0% | 4.9380% | 119 | 1.31x | 68.8% | 68.8% | 6.7% | ||||||||
Sandalwood Portfolio | $ | 62,912,576 | 6.8% | 4.2100% | 119 | 1.60x | 63.3% | 50.8% | 10.2% | ||||||||
Atlanta Multifamily Portfolio | $ | 45,000,000 | 4.8% | 4.8100% | 59 | 1.30x | 64.9% | 61.9% | 8.3% | ||||||||
The Drake | $ | 44,000,000 | 4.7% | 4.3400% | 119 | 1.28x | 67.4% | 62.8% | 7.7% | ||||||||
Midwest Shopping Center Portfolio | $ | 38,152,658 | 4.1% | 4.3300% | 117 | 1.53x | 67.4% | 54.4% | 10.3% | ||||||||
Intellicenter | $ | 33,562,500 | 3.6% | 4.6500% | 120 | 1.44x | 75.0% | 65.9% | 9.3% | ||||||||
Hotel deLuxe | $ | 32,419,793 | 3.5% | 4.5900% | 118 | 1.85x | 68.7% | 55.8% | 12.8% | ||||||||
Green Valley Corporate Center | $ | 27,000,000 | 2.9% | 4.5900% | 118 | 1.96x | 63.9% | 54.7% | 12.4% | ||||||||
Chase Park | $ | 26,600,000 | 2.9% | 4.3200% | 119 | 1.54x | 69.3% | 63.2% | 10.5% | ||||||||
$ | 444,647,528 | 47.7% | 4.3886% | 113 | 1.87x | 61.8% | 55.7% | 10.2% |
(1) | In the case of the 11 Madison Avenue mortgage loan, representing approximately 7.5% of the outstanding pool balance as of the cut-off date, has one or morepari passu companion loans that are not included in the issuing entity, the debt service coverage ratio, loan-to-value ratios and debt yield for such mortgage loan has been calculated based on the mortgage loan included in the issuing entity and the relatedpari passu companion loans not included in the issuing entity but excluding the related subordinate companion loans and mezzanine loans. |
(2) | In the case of the NMS Los Angeles Multifamily Portfolio mortgage loan, representing approximately 7.0% of the outstanding pool balance as of the cut-off date, has one or morepari passu companion loans that are not included in the issuing entity, the debt service coverage ratio, loan-to-value ratios and debt yield for such mortgage loan has been calculated based on the mortgage loan included in the issuing entity and the relatedpari passu companion loans not included in the issuing entity. |
For a brief summary of the top 20 Mortgage Loans (including the top 10 Mortgage Loans described above) in the pool of Mortgage Loans, see Annex B to this free writing prospectus.
Sale of the Mortgage Loans
The Depositor will purchase the Mortgage Loans to be included in the Issuing Entity on or before the Closing Date from GACC, BNY Mellon, KeyBank and CCRE Lending (collectively, the “Mortgage Loan Sellers” or the “Sponsors”), pursuant to separate mortgage loan purchase agreements (each, a “Mortgage Loan Purchase Agreement”), each to be dated the Closing Date, between the applicable Mortgage Loan Seller and the Depositor. See “The Sponsors,Mortgage Loan Sellers and Originators” in this free writing prospectus.
The number and total Cut-off Date Balances of the Mortgage Loans to be transferred to the Depositor by the respective Mortgage Loan Sellers are as follows:
Mortgage Loan Seller | Number of Mortgage Loans | Total Cut-off Date Principal Balance | % of Initial Outstanding Pool Balance | ||||
German American Capital Corporation | 20 | $ 397,893,862 | 42.7% | ||||
The Bank of New York Mellon | 12 | $ 196,225,586 | 21.1% | ||||
KeyBank National Association | 25 | $ 194,035,645 | 20.8% | ||||
Cantor Commercial Real Estate Lending, L.P. | 8 | $ 143,462,300 | 15.4% | ||||
Total | 65 | $ 931,617,393 | 100.0% |
Except with respect to the 11 Madison Avenue Loan Combination, which was co-originated by GACC, Morgan Stanley Bank, N.A. and Wells Fargo Bank, National Association, each Mortgage Loan Seller or one of its affiliates originated or acquired (either directly or, in some cases, through table funding arrangements) each of the Mortgage Loans as to which it is acting as Mortgage Loan Seller.
Each Mortgage Loan Purchase Agreement will be governed by the laws of the State of New York. Each party to a Mortgage Loan Purchase Agreement waives its right to a jury trial and consents to the jurisdiction of any New York State and Federal courts sitting in New York City with respect to matters arising out of or related to such Mortgage Loan Purchase Agreement.
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Each of the Mortgage Loan Sellers will make certain representations and warranties with respect to each of the Mortgage Loans sold by it and, with respect to a breach of any such representation or warranty that materially and adversely affects (i) the value of a Mortgage Loan sold by it, (ii) the value of the related Mortgaged Property or (iii) the interests of the Trustee in such Mortgage Loan or the related Mortgaged Property, the related Mortgage Loan Seller generally will be required to cure such breach, repurchase the Mortgage Loan, substitute another mortgage loan for that Mortgage Loan or make a Loss of Value Payment. See “The Pooling and Servicing Agreement—Representations and Warranties;Repurchase;Substitution” in this free writing prospectus.
The information set forth in this free writing prospectus concerning the Mortgage Loan Sellers and the underwriting conducted by each such Mortgage Loan Seller with respect to the related Mortgage Loans, has been provided by the respective Mortgage Loan Sellers.
A description of the underwriting standards of each Mortgage Loan Seller is set forth above under “The Sponsors,Mortgage Loan Sellers and Originators” in this free writing prospectus.
The Mortgage Loans included in this transaction were selected for this transaction from mortgage loans specifically originated or acquired for securitizations of this type by the Mortgage Loan Sellers taking into account rating agency criteria and feedback, subordinate investor feedback, property type and geographic location.
Certain Underwriting Matters
Environmental Site Assessments. Environmental site assessments or updates of a previously conducted assessment based on information in an established database or study were conducted on all of the Mortgaged Properties within the 8-month period prior to the Cut-off Date. In some cases these assessments or updates revealed the existence of material environmental conditions. The Mortgage Loan Sellers have informed the Depositor that, except where disclosed otherwise in this free writing prospectus, where such conditions were identified:
· | the borrower has escrowed funds to effect remediation, and such funds are held or controlled by the related lender; |
· | with respect to the presence of asbestos-containing materials, radon in indoor air, lead-based paint or lead in drinking water, an operations or maintenance plan has been required to be instituted (if such a plan is the only action recommended by the environmental consultant); |
· | the condition has been remediated in all material respects and, if and as appropriate, a “no further action” letter was obtained from the applicable governmental regulatory authority (or the condition was otherwise listed by such governmental authority as “closed” or a reputable environmental consultant has concluded that no further action is required); |
· | environmental insurance with respect to such condition has been obtained; |
· | a responsible party, not related to the borrower, has been identified as the responsible party and such responsible party has financial resources reasonably estimated to be adequate to address the situation; or |
· | a party related to the borrower having financial resources reasonably estimated to be adequate to address the situation is required to take action. |
For more information regarding environmental considerations, see “Risk Factors—Risks Related to the Mortgage Loans—Environmental Issues at the Mortgaged Properties May Adversely Affect Payments on Your Certificates” and “—Potential Issuing Entity Liability Related to a Materially Adverse Environmental Condition” in this free writing prospectus.
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With respect to certain of the Mortgaged Properties, the related borrower obtained a lender’s environmental insurance policy in lieu of obtaining a Phase II environmental site assessment or providing an indemnity or guaranty from a borrower sponsor in connection with the breach of environmental covenants in the related mortgage loan documents as described under “Risk Factors—Risks Related to the Mortgage Loans—Potential Issuing Entity Liability Related to a Materially Adverse Environmental Condition” in this free writing prospectus. Subject to certain conditions and exclusions, an environmental insurance policy generally insures the Issuing Entity against losses resulting from certain environmental conditions at the related Mortgaged Property during the applicable policy period. Subject to certain conditions and exclusions and any deductible, the environmental insurance policies generally provide coverage against (i)(A) losses resulting from default under the applicable Mortgage Loan, up to the then outstanding principal balance and certain unpaid interest of the Mortgage Loan, if on-site environmental conditions in violation of applicable environmental standards are discovered at the Mortgaged Property during the policy period and, in some cases, no foreclosure of the Mortgaged Property has taken place; provided, however, that with respect to certain Mortgage Loans for which an environmental insurance policy was obtained, the coverage may be limited to the lesser of the outstanding mortgage loan balance and the costs of clean-up of environmental conditions, up to the applicable aggregate policy limit or (B) losses arising during the policy period for certain known and disclosed environmental conditions and new environmental conditions discovered during the policy period up to the policy limit; (ii) losses from third party claims against the lender during the policy period for bodily injury, property damage or loss of third party property value resulting from environmental conditions at or emanating from the Mortgaged Property up to the policy limit or loan balance, as applicable; and (iii) legal defense expenses in connection with the foregoing up to the policy limit or loan balance, as applicable. See “Risk Factors—Risks Related to the Mortgage Loans—Environmental Issues at the Mortgaged Properties May Adversely Affect Payments on Your Certificates” and“—Potential Issuing Entity Liability Related to a Materially Adverse Environmental Condition” in this free writing prospectus.
The information contained in this free writing prospectus regarding environmental conditions at the Mortgaged Properties is based on the environmental site assessments or the updates described in the first paragraph under this heading and has not been independently verified by the Depositor, the Mortgage Loan Sellers, the Master Servicer, the Special Servicer, the Certificate Administrator, the Operating Advisor, the Trustee or any of their respective affiliates. There can be no assurance that the environmental site assessments or such updates, as applicable, identified all environmental conditions and risks, or that any such environmental conditions will not have a material adverse effect on the value or cash flow of the related Mortgaged Property. For additional information, see “Risk Factors—Risks Related to the Mortgage Loans—Potential Issuing Entity Liability Related to a Materially Adverse Environmental Condition” in this free writing prospectus.
Property Condition Assessments.The Mortgage Loan Sellers have informed the Depositor that, inspections of all of the Mortgaged Properties (or updates of previously conducted inspections) were conducted by independent licensed engineers or other representatives or designees (which may have been employees) of the related Mortgage Loan Seller or other originator within the 8-month period prior to the Cut-off Date. Such inspections were commissioned to inspect the exterior walls, roofing, interior construction, mechanical and electrical systems (in most cases) and the general condition of the site, buildings and other improvements located at a Mortgaged Property. With respect to certain of the Mortgage Loans, the resulting reports indicated a variety of deferred maintenance items and recommended capital expenditures. The estimated cost of the necessary repairs or replacements at a Mortgaged Property was included in the related property condition assessment. In some (but not all) instances, cash reserves were established with the lender to fund such deferred maintenance and/or replacement items.
In addition, in the case of certain Mortgage Loans, the related borrower is undertaking significant tenant improvements. In some (but not all) instances, cash reserves were established with the lender to fund such tenant improvements.
Appraisals and Market Analysis. The Mortgage Loan Sellers have informed the Depositor that, an appraisal or market analysis for all of the Mortgaged Properties was performed (or an existing appraisal
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was updated) on behalf of the related Mortgage Loan Seller within the 8-month period prior to the Cut-off Date. Such appraisal contained a statement or was accompanied by a letter from the related appraiser, to the effect that the appraisal was performed in accordance with the requirements of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as in effect on the date the appraisal was completed. In general, such appraisals represent the analysis and opinion of the respective appraisers at or before the time made, and are not guarantees of, and may not be indicative of, present or future value. There can be no assurance that another appraiser would not have arrived at a different valuation, even if such appraiser used the same general approach to and the same method of appraising the Mortgaged Property. In addition, appraisals seek to establish the amount a typically motivated buyer would pay a typically motivated seller. Such amount could be significantly higher than the amount obtained from the sale of a Mortgaged Property under a distress or liquidation sale. See “Risk Factors—Risks Related to the Mortgage Loans—Appraisals and Market Studies Have Certain Limitations” in this free writing prospectus.
Property,Liability and Other Insurance. In the case of each Mortgage Loan (except where self-insurance is permitted, where the borrower is permitted to rely on insurance coverage provided by, or self-insurance by, a tenant or where the borrower’s requirements to maintain insurance are otherwise governed by the terms of a related long-term lease), the related Mortgage Loan Documents generally require, or permit the lender to require, that: (i) the related Mortgaged Property be insured by a property and casualty insurance policy in an amount (subject to a customary deductible) at least equal to the least of (a) the outstanding principal balance of the related Mortgage Loan (or, with respect to a Loan Combination, the outstanding principal balance of such Loan Combination), (b) 100% of the full insurable replacement cost of the improvements located on the related Mortgaged Property or (c) with respect to certain Mortgage Loans, the full insurable actual cash value of the related Mortgaged Property; or (ii) the Mortgaged Property be insured by property insurance in such other amounts as was required by the related originators with, if applicable, appropriate endorsements to avoid the application of a co-insurance clause and without reduction in insurance proceeds for depreciation. In general, the standard form of property and casualty insurance policy covers physical damage to, or destruction of, the improvements on the Mortgaged Property by fire, lightning, explosion, smoke and hail, riot or strike and civil commotion, subject to the conditions and exclusions set forth in each policy.
If any portion of the improvements to a Mortgaged Property securing any Mortgage Loan was, at the time of the origination of such Mortgage Loan, in an area identified in the “Federal Register” by the Federal Emergency Management Agency as having special flood hazards, and flood insurance was available, then (except where self-insurance is permitted, where the borrower is permitted to rely on insurance coverage provided by, or self-insurance by, a tenant or where the borrower’s requirements to maintain insurance are otherwise governed by the terms of a related long-term lease) a flood insurance policy meeting the requirements of the then-current guidelines of the Federal Insurance Administration is in effect with a generally acceptable insurance carrier, in an amount representing coverage not less than the least of (1) the outstanding principal balance of such Mortgage Loan or, with respect to a Loan Combination, the outstanding principal balance of such Loan Combination, (2) the maximum amount of insurance available for the related Mortgaged Property under the National Flood Insurance Act of 1968, as amended, and (3) 100% of the replacement cost of the improvements. Notwithstanding the foregoing, in the case of a Mortgaged Property operated as a manufactured housing community, flood insurance may not have been obtained if the only uninsured improvements in the area identified as having special flood hazards are manufactured home pads.
In most cases (except in certain instances that include where self-insurance is permitted, where the borrower is permitted to rely on insurance coverage provided by, or self-insurance by, a tenant or where the borrower’s requirements to maintain insurance are governed by the terms of a related long-term lease), each Mortgage generally requires the related borrower to maintain (i) comprehensive general liability insurance against claims for personal and bodily injury, death or property damage occurring on, in or about the related Mortgaged Property and (ii) business interruption or rent loss insurance in an amount not less than 100% of the projected rental income or gross receipts from the related Mortgaged Property for not less than six months (although some Mortgage Loans permit a shorter period).
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With respect to each of the Mortgaged Properties (except in certain instances that include where the terrorism insurance coverage requirement has been waived, where self-insurance is permitted, where the borrower is permitted to rely on insurance coverage provided by, or self-insurance by, a tenant or where the borrower’s requirements to maintain insurance are governed by the terms of a related long-term lease), if any of the required insurance policies contain exclusions for loss, cost, damage or liability caused by “terrorism” or “terrorist acts,” the related borrower is required to obtain and maintain terrorism coverage to cover such exclusions from a “Qualified Carrier” under the related loan agreement, or in the event that such terrorism coverage is not available from a “Qualified Carrier,” the related borrower is required to obtain such terrorism coverage from the highest rated insurance company providing such terrorism coverage subject, in many cases, to commercially reasonable rates.
With respect to certain of the Mortgage Loans, there are limitations on the amount of premium or amount of coverage that must be obtained by the borrower related specifically to terrorism insurance. Many of the Mortgage Loans provide that the borrower is not required to spend, solely related to terrorism insurance, more than two times the amount of insurance premium payable at the time of the origination of the Mortgage Loan in respect of the property and business interruption/rental loss insurance required under the related Mortgage Loan Documents (without giving effect to the cost of terrorism and earthquake components of such casualty and business interruption/rental loss insurance), and if the cost of terrorism insurance exceeds such amount, the related borrower is required to purchase the maximum amount of terrorism insurance available with funds equal to such amount. Certain Mortgage Loans provide that the borrower is only required to maintain terrorism insurance so long as the lender determines that either (i) prudent owners of real estate comparable to the Mortgaged Property are maintaining such insurance or (ii) prudent institutional lenders to such owners are requiring that such owners maintain such insurance.
For example, with respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as 11 Madison Avenue, which secures a Mortgage Loan representing approximately 7.5% of the Initial Outstanding Pool Balance, the borrower is permitted to obtain terrorism insurance coverage in excess of $100,000,000 written by Belmont Insurance Company, a non-rated captive insurer, provided that (1) Belmont is and remains a licensed captive insurance company which is owned by SL Green Realty Corp. or SL Green Operating Partnership, L.P., (2) as long as there is a United States Federal Government backstop for an amount equal to the then applicable federal share of compensation for insured losses of an insurer under TRIPRA the borrower is required to obtain reinsurance with a cut through endorsement acceptable to lender from a “Qualified Carrier” for the remaining portion of such coverage not subject to such federal backstop; and (3) no insurance policy containing any such terrorism insurance coverage may contain a provision providing that any such terrorism insurance coverage will expire or terminate, or be excluded or otherwise limited in any respect, in the event TRIPRA expires or is otherwise no longer in effect for any reason.
For a further discussion of limitations regarding terrorism insurance coverage on the Mortgaged Properties, see “Risk Factors—Risks Related to the Mortgage Loans—Availability of Terrorism Insurance” in this free writing prospectus.
In general, the Mortgaged Properties are not insured for earthquake risk, floods and other water-related causes, landslides and mudflow, vermin, nuclear reaction or war. In addition, certain of the insurance policies may specifically exclude coverage for losses due to mold, certain acts of nature, terrorist activities or other insurable conditions or events.
In some cases, the related Mortgage Loan Documents permit the related borrower to rely on insurance obtained by a tenant in accordance with its lease, self-insurance or other agreements provided by a tenant in lieu of an insurance policy or the insurance requirements are solely governed by the terms of a related long-term lease. See Representations and Warranties 16 and 29 on Annex F to this free writing prospectus and the exceptions thereto on Annex G to this free writing prospectus.
In some cases, required insurance is provided under a blanket policy that also insures properties that secure mortgage loans owned by the related sponsor that are not included in this securitization. In some cases, the related borrower or the related property manager or its affiliate maintains one or more forms of
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insurance under blanket policies. For example, with respect to 73 Mortgaged Properties that secure Mortgage Loans representing in the aggregate approximately 79.9% of the Initial Outstanding Pool Balance (by Allocated Loan Amount), certain insurance for the related Mortgaged Property (or, if applicable, some or all of the related Mortgaged Properties) is under a borrower’s or property manager’s or affiliate’s blanket insurance policy. With respect to certain of these Mortgage Loans, the related borrower may be required to make payments to an insurance reserve if the related Mortgaged Property is no longer covered by the blanket insurance policy. The blanket insurance risk is magnified when affiliated loans in the same pool are covered by the same blanket policy. Some Mortgaged Properties included in the Mortgage Pool may be insured pursuant to a blanket policy covering such Mortgaged Properties together with other properties owned directly or indirectly by the related loan sponsor that are not included in the Mortgage Pool.
See “Risk Factors—Risks Related to the Mortgage Loans—Inadequate Property Insurance Coverage Could Have an Adverse Impact on the Mortgaged Properties” and “—Risks Associated with Blanket Insurance Policies or Self-Insurance” in this free writing prospectus.
Certain Variances from the Underwriting Guidelines. Certain of the Mortgage Loans may vary from the underwriting guidelines described under “The Sponsors,Mortgage Loan Sellers and Originators—German American Capital Corporation—GACC’s Underwriting Standards,” “—The Bank of New York Mellon—BNY Mellon’s Underwriting Standards,” “—KeyBank National Association—KeyBank’s Underwriting Guidelines and Process,” or “—Cantor Commercial Real Estate Lending,L.P.—CCRE Lending’s Underwriting Standards,” as applicable, in this free writing prospectus.
Loan Combinations
The following table represents certain information regarding the Mortgage Loan and Companion Loans that comprise each Loan Combination:
Mortgage Loan | Mortgage Loan Cut-off Date Balance | Aggregate Companion Loan Cut-off Date Balance | Loan Combination Cut-off Date Balance | Loan Combination U/W NCF DSCR | Loan Combination Cut-off Date LTV Ratio | Loan Combination Cut-off Date U/W NOI Debt Yield | Additional Mezzanine Debt Cut-off Date Balance | |||||||
11 Madison Avenue(1) | $70,000,000 | $694,330,000 | $764,330,000 | 3.89x | 32.5% | 14.3% | $325,000,000 | |||||||
NMS Los Angeles Multifamily Portfolio | $65,000,000 | $55,000,000 | $120,000,000 | 1.31x | 68.8% | 6.7% | N/A |
(1) | Excludes $310,670,000 of subordinate secured debt evidenced by the 11 Madison Avenue Subordinate Companion Loans. |
The 11 Madison Avenue Loan Combination
General. The Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as 11 Madison Avenue, representing approximately 7.5% of the Initial Outstanding Pool Balance of $70,000,000 (the “11 Madison Avenue Mortgage Loan” or “Note A-1-C2”), is part of a Loan Combination comprised of thirteen promissory notes, each of which is secured by the same mortgage instrument on the same underlying Mortgaged Property (the “11 Madison Avenue Mortgaged Property”). The 11 Madison Avenue Loan Combination (as defined below) is evidenced by: (i) one promissory Note A-1-C2 that evidences the 11 Madison Avenue Mortgage Loan; (ii) ninepari passupromissory notes designated as Note A-1-S1, Note A-1-S2, Note A-1-S3, Note A-2-S1, Note A-2-S2, Note A-2-S3, Note A-3-S1, Note A-3-S2 and Note A-3-S3, respectively, having an aggregate outstanding principal balance as of the Cut-off Date of $397,530,000 (the “11 Madison Avenue StandalonePari PassuCompanion Loans”), each of which is generallypari passu in right of payment with the 11 Madison Avenue Mortgage Loan and the 11 Madison Avenue Non-StandalonePari PassuCompanion Loans (as defined below); (iii) sixpari passu promissory notes designated as Note A-1-C1, Note A-1-C3, Note A-2-C1, Note A-2-C2, Note A-3-C1 and Note A-3-C2, respectively, having an aggregate outstanding principal balance as of the Cut-off Date of $296,800,000 (the “11 Madison Avenue Non-StandalonePari Passu Companion Loans” and, together with the 11 Madison Avenue StandalonePari Passu Companion Loans, the “11 Madison AvenuePari Passu Companion Loans”), each of which is generallypari passuin right of payment with the 11 Madison Avenue Mortgage Loan and the 11 Madison Avenue StandalonePari PassuCompanion Loans; and (iv) three promissory notes designated as Note B-1-S, Note B-2-S and
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Note B-3-S, respectively, with an aggregate outstanding principal balance as of the Cut-off Date of $310,670,000 (together, the “11 Madison Avenue Subordinate Companion Loans” and, together with the 11 Madison AvenuePari Passu Companion Loans, the “11 Madison Avenue Companion Loans”), which are subordinate in right of payment in respect of each of the 11 Madison Avenue Mortgage Loan and the 11 Madison AvenuePari Passu Companion Loans. The 11 Madison Avenue StandalonePari PassuCompanion Loans and the 11 Madison Avenue Subordinate Companion Loans are collectively referred to as the “11 Madison Avenue Standalone Companion Loans”).
The 11 Madison Avenue Subordinate Companion Loans, together with the 11 Madison Avenue Mortgage Loan and the 11 Madison AvenuePari PassuCompanion Loans, are referred to as the “11 Madison Avenue Loan Combination”. Only the 11 Madison Avenue Mortgage Loan is included in the Issuing Entity. Each of the 11 Madison Avenue StandalonePari Passu Companion Loans and 11 Madison Avenue Subordinate Companion Loans is included in the MAD 2015-11MD Mortgage Trust. The 11 Madison Avenue Non-StandalonePari PassuCompanion Loans are currently being held as follows: (i) Note A-1-C1 is currently being held by GACC and is expected to be included in the COMM 2015-CCRE26 Mortgage Trust, (ii) Note A-1-C3 is currently being held by GACC, (iii) Note A-2-C1 and Note A-2-C2 are currently being held by Morgan Stanley Bank, N.A. and (iv) Note A-3-C1 and Note A-3-C2 are currently being held by Wells Fargo.
The holders of the 11 Madison Avenue Loan Combination (the “11 Madison Avenue Noteholders”) have entered into a co-lender agreement that sets forth the respective rights of each 11 Madison Avenue Noteholder (the “11 Madison Avenue Intercreditor Agreement”).
Servicing. The 11 Madison Avenue Loan Combination is expected to be serviced by KeyBank National Association, as master servicer (the “MAD 2015-11MD Master Servicer”), and specially serviced by KeyBank National Association, as special servicer (the “MAD 2015-11MD Special Servicer”), pursuant to the trust and servicing agreement, dated as of September 6, 2015 (the “MAD 2015-11MD Trust and Servicing Agreement”), between the Depositor, the MAD 2015-11MD Master Servicer, the MAD 2015-11MD Special Servicer, Wilmington Trust, National Association, as trustee (in such capacity, the “MAD 2015-11MD Trustee”), and Wells Fargo Bank, National Association, as certificate administrator and custodian (in such capacity, the “MAD 2015-11MD Certificate Administrator”), in connection with the MAD 2015-11MD Mortgage Trust (into which each of the 11 Madison Avenue StandalonePari PassuCompanion Loans and the 11 Madison Avenue Subordinate Companion Loans are expected to be deposited), and, subject to the terms of the 11 Madison Avenue Intercreditor Agreement, all decisions, consents, waivers, approvals and other actions on the part of any 11 Madison Avenue Noteholder will be effected in accordance with the MAD 2015-11MD Trust and Servicing Agreement and the 11 Madison Avenue Intercreditor Agreement.
Advancing. The Master Servicer or the Trustee, as applicable, will be responsible for making P&I Advances on the 11 Madison Avenue Mortgage Loan (but not on the 11 Madison Avenue Companion Loans) pursuant to the Pooling and Servicing Agreement, in each case, unless the Master Servicer, the Special Servicer or the Trustee, as applicable, determines that such an Advance would be a Nonrecoverable Advance and will have no obligation to make Property Advances.
The MAD 2015-11MD Master Servicer or MAD 2015-11MD Trustee, as applicable, will be obligated to make property advances with respect to the 11 Madison Avenue Loan Combination, in each case unless a similar determination of nonrecoverability is made under the MAD 2015-11MD Trust and Servicing Agreement.
Distributions. The 11 Madison Avenue Intercreditor Agreement sets forth the respective rights of the holders of the 11 Madison Avenue Mortgage Loan and the 11 Madison Avenue Companion Loans with respect to distributions of funds received in respect of the related 11 Madison Avenue Loan Combination, and provides, in general, that:
· | the 11 Madison Avenue Subordinate Companion Loans are, at all times, junior, subject and subordinate to the 11 Madison Avenue Mortgage Loan and the 11 Madison AvenuePari PassuCompanion Loans, and the right of the holders of the 11 Madison Avenue Subordinate Companion |
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Loans (the “11 Madison Avenue Subordinate Companion Loan Holders”) to receive payments with respect to the 11 Madison Avenue Subordinate Companion Loans is, to the extent set forth in the 11 Madison Avenue Intercreditor Agreement, at all times, junior, subject and subordinate to the rights of the holders of the 11 Madison Avenue Mortgage Loan and the 11 Madison AvenuePari Passu Companion Loans to receive payments with respect to the 11 Madison Avenue Mortgage Loan and the 11 Madison AvenuePari Passu Companion Loans. |
· | prior to calculating any amounts of interest or principal due to the holders of the 11 Madison Avenue Mortgage Loan and the 11 Madison AvenuePari Passu Companion Loans, the principal balance of the 11 Madison Avenue Subordinate Companion Loans will be reduced (but not below zero) by any realized loss with respect to the 11 Madison Avenue Loan Combination, and after the principal balance of the 11 Madison Avenue Subordinate Companion Loans has been reduced to zero, the principal balances of the 11 Madison Avenue Mortgage Loan and the 11 Madison AvenuePari Passu Companion Loans will be reducedpro rata (based on their respective outstanding principal balances, but, in each case, not below zero) by any realized loss with respect to the 11 Madison Avenue Loan Combination. |
· | If no (i) event of default with respect to an obligation of the borrowers to pay money due under the 11 Madison Avenue Loan Combination or (ii) non-monetary event of default pursuant to which the 11 Madison Avenue Loan Combination becomes a specially serviced loan (a “Triggering Event of Default”) has occurred and is continuing, then all amounts tendered by the borrowers (net of certain amounts payable or reimbursable to the MAD 2015-11MD Master Servicer or the MAD 2015-11MD Special Servicer, as applicable) will be distributed as follows: |
(i) first, (A)first, to the MAD 2015-11MD Master Servicer or the MAD 2015-11MD Trustee, up to the amount of any nonrecoverable property advances that remain unreimbursed (together with interest thereon at the applicable advance rate), and (B)second, on apro rata andpari passu basis (based on the total outstanding principal balance of the 11 Madison Avenue Standalone Companion Loans, on the one hand, and the 11 Madison Avenue Mortgage Loan and the 11 Madison Avenue Non-StandalonePari PassuCompanions Loans, on the other hand), to the MAD 2015-11MD Master Servicer or the MAD 2015-11MD Trustee, the Master Servicer or the Trustee, and the master servicer or the trustee with respect any 11 Madison Avenue Non-StandalonePari Passu Companion Loan securitization, up to the amount of any nonrecoverable “p&i advances” or P&I Advances, as applicable, that remain unreimbursed (together with interest thereon at the applicable advance rate or the Advance Rate, as applicable);
(ii) second,pari passu, to Note A-1, Note A-2 and Note A-3,pro rata (based on the unreimbursed amount of costs paid or payable) up to the amount of any unreimbursed costs paid or any costs currently payable by Note A-1, Note A-2 and Note A-3, respectively, or paid or advanced by the MAD 2015-11MD Master Servicer, the MAD 2015-11MD Special Servicer or the MAD 2015-11MD Trustee, as applicable, with respect to the 11 Madison Avenue Loan Combination, including, without limitation, unreimbursed property advances and interest thereon at the applicable advance rate, to the extent such costs, property advances and interest thereon are then payable or reimbursable under the MAD 2015-11MD Trust and Servicing Agreement;
(iii) third, to the MAD 2015-11MD Master Servicer, the applicable accrued and unpaid servicing fee (without duplication of any portion of the servicing fee paid by the borrowers), and then to the MAD 2015-11MD Special Servicer, any special servicing fees (including, without limitation, any workout fees and liquidation fees) earned by it with respect to the 11 Madison Avenue Loan Combination under the MAD 2015-11MD Trust and Servicing Agreement;
(iv) fourth,pari passu to Note A-1, Note A-2 and Note A-3pro rata (based on the relative principal balance of each of Note A-1, Note A-2 and Note A-3), in an amount equal to the accrued and unpaid interest on the related principal balance at the related interest rate on such Note, net of the servicing fee rate, on apro rata basis based on the amount of accrued and unpaid interest due to each such Note;
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(v) fifth, in respect of principal collections, with respect to all payments and prepayments of principal, to Note A-1, Note A-2 and Note A-3, on apro rata andpari passu basis (based on the relative principal balance of each of Note A-1, Note A-2 and Note A-3), in an amount equal to such payments and prepayments in respect of principal, until the related principal balances have been reduced to zero;
(vi) sixth, if the proceeds of any foreclosure sale or any liquidation of the 11 Madison Avenue Loan Combination or the 11 Madison Avenue Mortgaged Property exceed the amounts required to be applied in accordance with the foregoing clauses (i)-(v),pari passu to Note A-1, Note A-2 and Note A-3, in each case, in an amount equal to the aggregate of unreimbursed realized losses previously allocated to Note A-1, Note A-2 or Note A-3, respectively, plus interest thereon at the related Note interest rate minus the servicing fee, on apro ratabasis based on the amount of realized losses previously allocated to each such Note;
(vii) seventh,pari passu, to Note B-1-S, Note B-2-S and Note B-3-S,pro rata (based on the unreimbursed amount of costs paid or payable), up to the amount of any unreimbursed costs paid or any costs currently payable by Note B-1-S, Note B-2-S and/or Note B-3-S, respectively, with respect to the 11 Madison Avenue Loan Combination, including, without limitation, unreimbursed property advances made by the Note B-1-S holder, the Note B-2-S holder and/or the Note B-3-S holder, respectively, and any cure payment made by the Note B-1-S holder, the Note B-2-S holder and/or the Note B-3 holder, respectively, pursuant to the 11 Madison Avenue Intercreditor Agreement;
(viii) eighth,pari passu to Note B-1-S, Note B-2-S and Note B-3-S, in an amount equal to the accrued and unpaid interest on the related principal balance at the related interest rate on such Note, net of the servicing fee rate, on apro rata basis based on the amount of accrued and unpaid interest due to each such Note;
(ix) ninth, in respect of principal collections, with respect to all payments and prepayments of principal, to Note B-1-S, Note B-2-S and Note B-3-S, on apro rata andpari passu basis (based on the relative principal balance of each Note B-1-S, Note B-2-S and Note B-3-S), in an amount equal to such payments and prepayments in respect of principal, until the related principal balances have been reduced to zero;
(x) tenth, to Note B-1-S, Note B-2-S and Note B-3-S, on apro rata andpari passu basis (based on the amount of realized losses previously allocated to each such Note), an amount equal to the aggregate of unreimbursed realized losses previously allocated to Note B-1-S, Note B-2-S and Note B-3-S, respectively, plus interest thereon in each case at the related interest rate on the applicable Note minus the servicing fee, compounded monthly from the date the related realized loss was allocated to Note B-1-S, Note B-2-S or Note B-3-S, as applicable;
(xi) eleventh, any interest accrued at the default rate on the principal balance to the extent such default interest amount is (i) actually paid by the borrowers, (ii) in excess of interest accrued on the principal balance at the 11 Madison Avenue Loan Combination interest rate and (iii) not required to be paid to the MAD 2015-11MD Master Servicer, the MAD 2015-11MD Trustee or the MAD 2015-11MD Special Servicer, the Master Servicer or Trustee under the Pooling and Servicing Agreement or the master servicer or the trustee under any pooling and servicing agreement relating to a 11 Madison Avenue Non-StandalonePari Passu Companion Loan securitization,pro rata (based on the amounts described in each of the following clauses (A) through (F)) andpari passu, to (A) Note A-1 in an amount calculated on the Note A-1 principal balance at the excess of (x) the Note A-1 default rate over (y) the Note A-1 interest rate, (B) Note A-2 in an amount calculated on the Note A-2 principal balance at the excess of (x) the Note A-2 default rate over (y) the Note A-2 interest rate, (C) Note A-3 in an amount calculated on the Note A-3 principal balance at the excess of (x) the Note A-3 default rate over (y) the Note A-3 interest rate, (D) Note B-1-S in an amount calculated on the Note B-1-S principal balance at the excess of (x) the Note B-1-S default rate over (y) the Note B-1-S interest rate, (E) Note B-2-S in an amount calculated on the Note B-2-S principal balance at the excess of (x) the Note B-2-S default rate
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over (y) the Note B-2-S interest rate and (E) Note B-3-S in an amount calculated on the Note B-3-S principal balance at the excess of (x) the Note B-3-S default rate over (y) the Note B-3-S interest rate;
(xii) twelfth, first,pro rata (based on the amounts described in each of the following clauses ((i), (ii) and (iii)) andpari passu, to: (i) the Note A-1 holder, any prepayment premium allocable to any prepayment of Note A-1, (ii) the Note A-2 holder, any prepayment premium allocable to any prepayment of Note A-2, and (iii) the Note A-3 holder, any prepayment premium allocable to any prepayment of Note A-3, and then,pro rata (based on the amounts described in each of the following clauses ((i), (ii) and (iii)) andpari passu, to: (i) the Note B-1-S holder, any prepayment premium allocable to any prepayment of Note B-1-S, (ii) the Note B-2-S holder, any prepayment premium allocable to any prepayment of Note B-2-S, in each case, to the extent actually paid by the borrowers, and (iii) the Note B-3-S holder, any prepayment premium allocable to any prepayment of Note B-3-S, in each case, to the extent actually paid by the borrowers;
(xiii) thirteenth,pro rata andpari passu (in the case of penalty charges, only to the extent not required to be paid to the MAD 2015-11MD Master Servicer, the MAD 2015-11MD Trustee or the MAD 2015-11MD Special Servicer, the Master Servicer or Trustee under the Pooling and Servicing Agreement or the master servicer or the trustee under any pooling and servicing agreement relating to a 11 Madison Avenue Non-StandalonePari PassuCompanion Loan securitization), to: (i) Note A-1 its percentage interest of any assumption fees and penalty charges, (ii) Note A-2 its percentage interest of any assumption fees and penalty charges, (iii) Note A-3 its percentage interest of any assumption fees and penalty charges, (iv) Note B-1-S its percentage interest of any assumption fees and penalty charges, (iv) Note B-2-S, its percentage interest of any assumption fees and penalty charges, in each case, to the extent actually paid by the borrowers; and (vi) Note B-3-S, its percentage interest of any assumption fees and penalty charges, in each case, to the extent actually paid by the borrowers; and
(xiv) fourteenth, any excess amount not otherwise applied pursuant to the foregoing clauses (i) through (xiii) above will be distributed to the 11 Madison Avenue Noteholderspro rata andpari passu in accordance with their respective initial percentage interests.
The MAD 2015-11MD Master Servicer and the MAD 2015-11MD Special Servicer, as applicable, will have no obligation to deposit any amounts that are additional servicing compensation into the collection account or REO account, as applicable, and are entitled to retain any such amount that such party is entitled to under the MAD 2015-11MD Trust and Servicing Agreement.
After the occurrence of and during the continuance of a Triggering Event of Default, all amounts tendered by the borrowers (net of certain amounts payable or reimbursable to the MAD 2015-11MD Master Servicer or the MAD 2015-11MD Special Servicer, as applicable) will be distributed as follows:
(i) first, (A)first, to the MAD 2015-11MD Master Servicer or the MAD 2015-11MD Trustee, up to the amount of any nonrecoverable property advances that remain unreimbursed (together with interest thereon at the applicable advance rate), and (B)second, on apro rata andpari passu basis (based on the total outstanding principal balance of the 11 Madison Avenue Standalone Companion Loans, on the one hand, and the 11 Madison Avenue Mortgage Loan and the 11 Madison Avenue Non-StandalonePari PassuCompanions Loans, on the other hand), to the MAD 2015-11MD Master Servicer or the MAD 2015-11MD Trustee, the Master Servicer or the Trustee, and the master servicer or the trustee with respect any 11 Madison Avenue Non-StandalonePari Passu Companion Loan securitization, up to the amount of any nonrecoverable “p&i advances” or P&I Advances, as applicable, that remain unreimbursed (together with interest thereon at the applicable advance rate or the Advance Rate, as applicable);
(ii) second,pari passu, to Note A-1, Note A-2 and Note A-3,pro rata (based on the unreimbursed amount of costs paid or payable) up to the amount of any unreimbursed costs paid or any costs currently payable by Note A-1, Note A-2 and Note A-3, respectively, or paid or advanced by the MAD 2015-11MD Master Servicer, the MAD 2015-11MD Special Servicer or the
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MAD 2015-11MD Trustee, as applicable, with respect to the 11 Madison Avenue Loan Combination, including, without limitation, unreimbursed property advances and interest thereon at the applicable advance rate, to the extent such costs, property advances and interest thereon are then payable or reimbursable under the MAD 2015-11MD Trust and Servicing Agreement;
(iii) third, to the MAD 2015-11MD Master Servicer, the applicable accrued and unpaid servicing fee (without duplication of any portion of the servicing fee paid by the borrowers), and then to the MAD 2015-11MD Special Servicer, any special servicing fees (including, without limitation, any workout fees and liquidation fees) earned by it with respect to the 11 Madison Avenue Loan Combination under the MAD 2015-11MD Trust and Servicing Agreement;
(iv) fourth,pari passu to Note A-1, Note A-2 and Note A-3pro rata (based on the relative principal balance of each of Note A-1, Note A-2 and Note A-3), in an amount equal to the accrued and unpaid interest on the related principal balance at the related interest rate on such Note, net of the servicing fee rate, on apro rata basis based on the amount of accrued and unpaid interest due to each such Note;
(v) fifth,pari passu to Note B-1-S, Note B-2-S and Note B-3-Spro rata (based on the relative principal balance of each of Note B-1-S, Note B-2-S and Note B-3-S), in an amount equal to the accrued and unpaid interest on the related principal balance at the related interest rate on such Note, net of the servicing fee rate, on apro rata basis based on the amount of accrued and unpaid interest due to each such Note;
(vi) sixth, to Note A-1, Note A-2 and Note A-3, on apro rata andpari passu basis (based on the relative principal balance of each of Note A-1, Note A-2 and Note A-3), in an amount equal to the outstanding principal balance of each such Note, until the related principal balances have been reduced to zero;
(vii) seventh, if the proceeds of any foreclosure sale or any liquidation of the 11 Madison Avenue Loan Combination or the 11 Madison Avenue Mortgaged Property exceed the amounts required to be applied in accordance with the foregoing clauses (i)-(vi),pari passu to Note A-1, Note A-2 and Note A-3, in each case, in an amount equal to the aggregate of unreimbursed realized losses previously allocated to Note A-1, Note A-2 or Note A-3, respectively, plus interest thereon at the related Note interest rate minus the servicing fee, on apro ratabasis based on the amount of realized losses previously allocated to each such Note;
(viii) eighth,pari passu, to Note B-1-S, Note B-2-S and Note B-3-S,pro rata (based on the unreimbursed amount of costs paid or payable), up to the amount of any unreimbursed costs paid or any costs currently payable by Note B-1-S, Note B-2-S and/or Note B-3-S, respectively, with respect to the 11 Madison Avenue Loan Combination, including, without limitation, unreimbursed property advances made by the Note B-1-S holder, the Note B-2-S holder and/or the Note B-3-S holder, respectively, and any cure payment made by the Note B-1-S holder, the Note B-2-S holder and/or the Note B-3-S holder, respectively, pursuant to the 11 Madison Avenue Intercreditor Agreement;
(ix) ninth, to Note B-1-S, Note B-2-S and Note B-3-S, on apro rata andpari passu basis (based on the relative principal balance of each Note B-1-S, Note B-2-S and Note B-3-S), in an amount equal to the outstanding principal balance of each such Note, until the related principal balances have been reduced to zero;
(x) tenth, to Note B-1-S, Note B-2-S and Note B-3-S, on apro rata andpari passu basis (based on the amount of realized losses previously allocated to each such Note), an amount equal to the aggregate of unreimbursed realized losses previously allocated to Note B-1-S, Note B-2-S and Note B-3-S, respectively, plus interest thereon in each case at the related interest rate on the applicable Note minus the servicing fee, compounded monthly from the date the related realized loss was allocated to Note B-1-S, Note B-2-S or Note B-3-S, as applicable;
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(xi) eleventh, any interest accrued at the default rate on the principal balance to the extent such default interest amount is (i) actually paid by the borrowers, (ii) in excess of interest accrued on the principal balance at the 11 Madison Avenue Loan Combination interest rate and (iii) not required to be paid to the MAD 2015-11MD Master Servicer, the MAD 2015-11MD Trustee or the MAD 2015-11MD Special Servicer, the Master Servicer or Trustee under the Pooling and Servicing Agreement or the master servicer or the trustee under any pooling and servicing agreement relating to a 11 Madison Avenue Non-StandalonePari Passu Companion Loan securitization,pro rata (based on the amounts described in each of the following clauses (A) through (F)) andpari passu, to (A) Note A-1 in an amount calculated on the Note A-1 principal balance at the excess of (x) the Note A-1 default rate over (y) the Note A-1 interest rate, (B) Note A-2 in an amount calculated on the Note A-2 principal balance at the excess of (x) the Note A-2 default rate over (y) the Note A-2 interest rate, (C) Note A-3 in an amount calculated on the Note A-3 principal balance at the excess of (x) the Note A-3 default rate over (y) the Note A-3 interest rate, (D) Note B-1-S in an amount calculated on the Note B-1-S principal balance at the excess of (x) the Note B-1-S default rate over (y) the Note B-1-S interest rate, (E) Note B-2-S in an amount calculated on the Note B-2-S principal balance at the excess of (x) the Note B-2-S default rate over (y) the Note B-2-S interest rate and (E) Note B-3-S in an amount calculated on the Note B-3-S principal balance at the excess of (x) the Note B-3-S default rate over (y) the Note B-3-S interest rate;
(xii) twelfth, first,pro rata (based on the amounts described in each of the following clauses ((i), (ii) and (iii)) andpari passu, to: (i) the Note A-1 holder, any prepayment premium allocable to any prepayment of Note A-1, (ii) the Note A-2 holder, any prepayment premium allocable to any prepayment of Note A-2, and (iii) the Note A-3 holder, any prepayment premium allocable to any prepayment of Note A-3, and then,pro rata (based on the amounts described in each of the following clauses ((i), (ii) and (iii)) andpari passu, to: (i) the Note B-1-S holder, any prepayment premium allocable to any prepayment of Note B-1-S, (ii) the Note B-2-S holder, any prepayment premium allocable to any prepayment of Note B-2-S, in each case, to the extent actually paid by the borrowers, and (iii) the Note B-3-S holder, any prepayment premium allocable to any prepayment of Note B-3-S, in each case, to the extent actually paid by the borrowers;
(xiii) thirteenth,pro rata andpari passu (in the case of penalty charges, only to the extent not required to be paid to the MAD 2015-11MD Master Servicer, the MAD 2015-11MD Trustee or the MAD 2015-11MD Special Servicer, the Master Servicer or Trustee under the Pooling and Servicing Agreement or the master servicer or the trustee under any pooling and servicing agreement relating to a 11 Madison Avenue Non-StandalonePari Passu Companion Loan securitization), to: (i) Note A-1 its percentage interest of any assumption fees and penalty charges, (ii) Note A-2 its percentage interest of any assumption fees and penalty charges, (iii) Note A-3 its percentage interest of any assumption fees and penalty charges, (iv) Note B-1-S its percentage interest of any assumption fees and penalty charges, (iv) Note B-2-S, its percentage interest of any assumption fees and penalty charges, in each case, to the extent actually paid by the borrowers; and (vi) Note B-3-S, its percentage interest of any assumption fees and penalty charges, in each case, to the extent actually paid by the borrowers; and
(xiv) fourteenth, any excess amount not otherwise applied pursuant to the foregoing clauses (i) through (xiii) above will be distributed to the 11 Madison Avenue Noteholderspro rata andpari passu in accordance with their respective initial percentage interests.
For the purpose of this “—Distributions” section, with respect to the 11 Madison Avenue Mortgage Loan, the 11 Madison AvenuePari Passu Companion Loans and the 11 Madison Avenue Subordinate Companion Loans, the term “percentage interest” means the percentage equivalent of a fraction, the numerator of which is equal to the principal balance of such loan, and the denominator of which is equal to the principal balance of the 11 Madison Avenue Loan Combination.
In addition, solely for the purpose of this “—Distributions” section, the following terms have the meaning below:
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“Note A-1” means, individually or collectively, Note A-1-S1, Note A-1-S2, Note A-1-S3, Note A-1-C1, Note A-1-C2 and Note A-1-C3, as the context requires.
“Note A-2” means, individually or collectively, Note A-2-S1, Note A-2-S2, Note A-2-S3, Note A-2-C1 and Note A-2-C2, as the context requires.
“Note A-3” means, individually or collectively, Note A-3-S1, Note A-3-S2, Note A-3-S3, Note A-3-C1 and Note A-3-C2, as the context requires.
Control and Consultation. So long as the 11 Madison Avenue Subordinate Companion Loans are included in the MAD 2015-11MD Mortgage Trust, there will be no “controlling noteholder” or “directing holder” with respect to the 11 Madison Avenue Loan Combination.
Cure Rights. If the 11 Madison Avenue Subordinate Companion Loans are no longer included in the MAD 2015-11MD Mortgage Trust and there is a monetary default or non-monetary default (in either case, beyond applicable notice and grace periods) with respect to the 11 Madison Avenue Loan Combination, then each 11 Madison Avenue Subordinate Companion Loan Holder will have the right, but not the obligation, (and if a 11 Madison Avenue Subordinate Companion Loan Holder elects to cure, then all of the 11 Madison Avenue Subordinate Companion Loan Holders collectively, on apro rata basis will have such right) to: (A) cure such monetary default within 10 business days following the receipt of notice of such default and (B) cure such non-monetary default within 30 days following receipt of notice of such default, provided that under certain circumstances the cure period with respect to a non-monetary default may be extended by an additional 60 days (for a total of up to 90 days). If the 11 Madison Avenue Subordinate Companion Loan Holders elect to cure a default by way of a payment of money (a “Cure Payment”), the 11 Madison Avenue Subordinate Companion Loan Holders will be required to make such Cure Payment as directed by the MAD 2015-11MD Special Servicer and such Cure Payment shall include all costs, expenses, losses, liabilities, obligations, damages, penalties and disbursements imposed on, incurred by or asserted against the Issuing Entity or the 11 Madison AvenuePari Passu Companion Loan Holders related to the default and incurred during the period of time from the expiration of the grace period for such default until such Cure Payment is made or other cure is effected. So long as a default exists that is being cured by the 11 Madison Avenue Subordinate Companion Loan Holders and the applicable cure period has not expired and the 11 Madison Avenue Subordinate Companion Loan Holders are permitted to cure under the terms of the 11 Madison Avenue Intercreditor Agreement, the default shall not be treated as a default or a Triggering Event of Default (i) for purposes of “—Distributions” above, (ii) for purposes of triggering an acceleration of the 11 Madison Avenue Loan Combination, modifying, amending or waiving any provisions or the related mortgage loan documents or commencing foreclosure proceedings or similar legal proceedings with respect to the related Mortgaged Property, or (iii) for purposes of treating the 11 Madison Avenue Loan Combination as a specially serviced loan. Notwithstanding anything to the contrary, the 11 Madison Avenue Subordinate Companion Loan Holders’ right to cure a default shall be limited to 6 Cure Events over the life of the 11 Madison Avenue Loan Combination and no single Cure Event may exceed 4 consecutive months. A “Cure Event” means the 11 Madison Avenue Subordinate Companion Loan Holders’ exercise of its cure rights whether for 1 month or for consecutive months in the aggregate.
Purchase Option. If the 11 Madison Avenue Subordinate Companion Loans are no longer included in the MAD 2015-11MD Mortgage Trust and a Triggering Event of Default has occurred and is continuing, then, upon written notice from the MAD 2015-11MD Special Servicer of such occurrence (a “Repurchase Option Notice”), any 11 Madison Avenue Subordinate Companion Loan Holder will have the right (and if all of the 11 Madison Avenue Subordinate Companion Loan Holders provide such notice, then all of the 11 Madison Avenue Subordinate Companion Loan Holders collectively, on apro rata basis will have such right), prior to any other party, by written notice to the MAD 2015-11MD Special Servicer (the “Repurchase Election Notice”) after the occurrence of the Triggering Event of Default and prior to the earliest date to occur of (a) the cure of the Triggering Event of Default, (b) the consummation of a foreclosure sale, sale by power of sale or delivery of a deed-in-lieu of foreclosure with respect to the related Mortgaged Property, (c) the modification of the mortgage loan documents in accordance with the MAD 2015-11MD Trust and Servicing Agreement and the 11 Madison Avenue Intercreditor Agreement, and (d) the date that is 90 days after the related controlling noteholder’s receipt of the Repurchase Option
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Notice, to purchase the 11 Madison Avenue Mortgage Loan and 11 Madison AvenuePari PassuCompanion Loans for the applicable purchase price provided in the 11 Madison Avenue Intercreditor Agreement on a date not less than five (5) business days nor more than 15 business days after the date of the Repurchase Election Notice, except as described below with respect to a Repurchase Election Notice based on a Notice of Foreclosure/DIL.
The MAD 2015-11MD Special Servicer will be required to give the 11 Madison Avenue Subordinate Companion Loan Holders five (5) business days’ prior written notice of its intent with respect to any consummation of a foreclosure sale, sale by power of sale or delivery of deed-in-lieu of foreclosure with respect to the related Mortgaged Property (a “Notice of Foreclosure/DIL”). If the MAD 2015-11MD Special Servicer intends to accept a deed-in-lieu of foreclosure, it will be required to deliver a Notice of Foreclosure/DIL stating its intent to the 11 Madison Avenue Subordinate Companion Loan Holders and the 11 Madison Avenue Subordinate Companion Loan Holders will have the option, within 10 business days from receipt of such Notice of Foreclosure/DIL, to deliver a Repurchase Election Notice to the MAD 2015-11MD Special Servicer and to consummate the purchase option on a date to occur no later than 30 days from the day it received the Notice of Foreclosure/DIL, provided that such 30 days may be extended at the option of the 11 Madison Avenue Subordinate Companion Loan Holders for an additional 30 days upon payment of a $5,000,000 non-refundable cash deposit and provision of evidence satisfactory to the MAD 2015-11MD Special Servicer that it is diligently and expeditiously proceeding to consummate its purchase of the 11 Madison Avenue Mortgage Loan and the 11 Madison AvenuePari Passu Companion Loans.
Sale of Defaulted 11 Madison Avenue Loan Combination. Pursuant to the terms of the 11 Madison Avenue Intercreditor Agreement, if the 11 Madison Avenue Loan Combination becomes a defaulted mortgage loan, and if the MAD 2015-11MD Special Servicer determines to sell the 11 Madison Avenue Mortgage Loan and the 11 Madison Avenue Companion Loans in accordance with the MAD 2015-11MD Trust and Servicing Agreement, then the MAD 2015-11MD Special Servicer will have the right and the obligation to sell the 11 Madison Avenue Mortgage Loan and the 11 Madison Avenue Companion Loans as notes evidencing one whole loan in accordance with the terms of the MAD 2015-11MD Trust and Servicing Agreement. In connection with any such sale, the MAD 2015-11MD Special Servicer will be required to follow the procedures set forth in the MAD 2015-11MD Trust and Servicing Agreement.
Special Servicer Appointment Rights. Pursuant to the 11 Madison Avenue Intercreditor Agreement and the MAD 2015-11MD Trust and Servicing Agreement, the holders of requisite voting rights allocable to certain principal balance certificates issued by the MAD 2015-11MD Mortgage Trust will have the right, with or without cause, to replace the MAD 2015-11MD Special Servicer then acting with respect to the 11 Madison Avenue Loan Combination and appoint a replacement special servicer in lieu thereof without the consent of the Issuing Entity (or its representative).
Description of the MAD 2015-11MD Trust and Servicing Agreement.
The 11 Madison Avenue Loan Combination is currently serviced pursuant to the MAD 2015-11MD Trust and Servicing Agreement. The servicing terms of the MAD 2015-11MD Trust and Servicing Agreement (including, but not limited to, terms governing limitations on servicer liability and retention of loan collections) are similar in all material respects to the servicing terms of the Pooling and Servicing Agreement; however, the servicing arrangements under such agreements differ in certain respects. For example:
· | There is no directing holder or controlling class with respect to the MAD 2015-11MD Mortgage Trust. However, the holders of requisite voting rights allocated to certain principal balance certificates issued by the MAD 2015-11MD Mortgage Trust will have the right to replace the MAD 2015-11MD Special Servicer with respect to the 11 Madison Avenue Loan Combination as described above under “–-Special Servicer Appointment Rights”. |
· | There is no operating advisor (and therefore no operating advisor fee) with respect to the MAD 2015-11MD Mortgage Trust. |
· | ThePari PassuLoan Primary Servicing Fee Rate payable to the related MAD 2015-11MD Master |
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Servicer (KeyBank National Association) under the MAD 2015-11MD Trust and Servicing Agreement is 0.00125%per annum (which, for the avoidance of doubt, is paid in connection with such MAD 2015-11MD Master Servicer’s primary servicing obligations for the 11 Madison Avenue Mortgage Loan). |
· | Special servicing fees (calculated at 0.125%per annum under the MAD 2015-11MD Trust and Servicing Agreement), work-out fees (calculated at 0.250% under the MAD 2015-11MD Trust and Servicing Agreement) and liquidation fees (calculated at 0.250% under the MAD 2015-11MD Trust and Servicing Agreement) payable under the MAD 2015-11MD Trust and Servicing Agreement with respect to the 11 Madison Avenue Loan Combination are generally calculated in a manner similar, but not necessarily identical, to the corresponding fees under the Pooling and Servicing Agreement, except that the work-out and liquidation fee definitions do not include a cap on the total amount of work-out fees, liquidation fees and modification fees equal to the lesser of $1,000,000 or 1.0% as provided in the Pooling and Servicing Agreement. |
· | In addition, any party to the MAD 2015-11MD Trust and Servicing Agreement that makes a property advance or administrative advance with respect to the 11 Madison Avenue Loan Combination will be entitled to reimbursement for that advance, with interest at a prime rate, in a manner similar to the reimbursement of servicing advances under the Pooling and Servicing Agreement. |
· | Items with respect to the 11 Madison Avenue Loan Combination that are the equivalent of ancillary fees, consent fees, assumption fees and/or Modification Fees and that are allocated as additional servicing compensation may be allocated between the MAD 2015-11MD Master Servicer and the MAD 2015-11MD Special Servicer in proportions that are different than the allocation between the Master Servicer and Special Servicer of such fees collected on mortgage loans serviced under the Pooling and Servicing Agreement. |
· | No items with respect to the 11 Madison Avenue Loan Combination that are the equivalent of ancillary fees, consent fees, assumption fees, Modification Fees and/or penalty charges will be allocated to the Master Servicer or Special Servicer as additional servicing compensation or otherwise applied in accordance with the Pooling and Servicing Agreement except and solely to the extent that such items are received by the Issuing Entity with respect to the 11 Madison Avenue Mortgage Loan. |
· | The parties to the MAD 2015-11MD Trust and Servicing Agreement and certain related persons are entitled to reimbursement and/or indemnification for losses, liabilities, claims, costs and expenses associated with the MAD 2015-11MD Trust and Servicing Agreement at least to the same extent that parties to the Pooling and Servicing Agreement and certain related persons are entitled to reimbursement and/or indemnification for losses, liabilities, claims, costs and expenses associated with the Pooling and Servicing Agreement. To the extent that such losses, liabilities, claims, costs and expenses relate to, or are otherwise allocable in accordance with the MAD 2015-11MD Trust and Servicing Agreement and/or the 11 Madison Avenue Intercreditor Agreement to, the 11 Madison Avenue Loan Combination or the related mortgaged property, the Issuing Entity, as holder of the 11 Madison Avenue Mortgage Loan, will be responsible for itspro rata share of amounts allocable to the 11 Madison Avenue senior notes (including out of general collections on the COMM 2015-CCRE27 mortgage pool, if necessary, and notwithstanding that the MAD 2015-11MD Mortgage Trust will only be liable for such amounts to the extent of the principal balance of the 11 Madison Avenue promissory notes included in such trust). |
· | Although the matters to which notice or rating agency confirmation with respect to the rating agencies under the MAD 2015-11MD Trust and Servicing Agreement are similar in all material respects to, but not identical to, the matters with respect to the Rating Agencies under the Pooling and Servicing Agreement, the matters as to which notice or rating agency confirmation is required (and whether it is notice and/or rating agency confirmation that is required) will differ. |
· | The provisions of the MAD 2015-11MD Trust and Servicing Agreement may also vary from the Pooling and Servicing Agreement with respect to timing, terminology, allocation of ministerial |
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duties between multiple servicers or other service providers or certificateholder or investor voting or consent thresholds, servicer and special servicer termination events, rating requirements for accounts, permitted investments and insurance, eligibility requirements applicable to servicers and other service providers, and the circumstances under which approvals, consents, consultation, notices or rating agency confirmations may be required. |
· | The servicing transfer events of the MAD 2015-11MD Trust and Servicing Agreement that would cause the 11 Madison Avenue Loan Combination to become specially serviced are similar to, but not identical to, the corresponding provisions under the Pooling and Servicing Agreement. |
· | The conditions of the MAD 2015-11MD Trust and Servicing Agreement that would require an appraisal are similar to, but differ in some respects from, the conditions that would result in an Appraisal Reduction Event under the Pooling and Servicing Agreement. |
The NMS Los Angeles Multifamily Portfolio Loan Combination
General. The Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as NMS Los Angeles Multifamily Portfolio, representing approximately 7.0% of the Initial Outstanding Pool Balance, with a Cut-off Date Balance of $65,000,000 (the “NMS Los Angeles Multifamily Portfolio Mortgage Loan”), is part of a Loan Combination comprised of three promissory notes, each of which is secured by the same mortgage instrument on the same underlying Mortgaged Property (the “NMS Los Angeles Multifamily Portfolio Mortgaged Property”). The NMS Los Angeles Multifamily Portfolio Mortgage Loan is evidenced by promissory note A-1. The portions of the NMS Los Angeles Multifamily Portfolio Loan Combination (as defined below) evidenced by (a) promissory note A-2, with an outstanding principal balance as of the Cut-off Date of $30,000,000 (the “NMS Los Angeles Multifamily Portfolio Note A-2 Companion Loan”), and (b) promissory note A-3, with an outstanding principal balance as of the Cut-off Date of $25,000,000 (the “NMS Los Angeles Multifamily Portfolio Note A-3 Companion Loan”), each of which (subject to any applicable financing arrangement) is currently being held by LCF (or an affiliate), are collectively referred to as the “NMS Los Angeles Multifamily Portfolio Companion Loans” in this free writing prospectus and arepari passuin right of payment with the NMS Los Angeles Multifamily Portfolio Mortgage Loan. The NMS Los Angeles Multifamily Portfolio Mortgage Loan and the NMS Los Angeles Multifamily Portfolio Companion Loans are collectively referred to as the “NMS Los Angeles Multifamily Portfolio Loan Combination” in this free writing prospectus. The NMS Los Angeles Multifamily Portfolio Companion Loans will not be transferred to the Issuing Entity and will not be part of the Mortgage Pool.
The holders of the promissory notes evidencing the NMS Los Angeles Multifamily Portfolio Loan Combination (the “NMS Los Angeles Multifamily Portfolio Noteholders”) have entered into a co-lender agreement that sets forth the respective rights of each NMS Los Angeles Multifamily Portfolio Noteholder (the “NMS Los Angeles Multifamily Portfolio Intercreditor Agreement”).
Servicing. The NMS Los Angeles Multifamily Portfolio Loan Combination will be serviced by the Master Servicer and the Special Servicer pursuant to the terms of the Pooling and Servicing Agreement. Subject to the terms of the NMS Los Angeles Multifamily Portfolio Intercreditor Agreement, all decisions, consents, waivers, approvals and other actions on the part of any NMS Los Angeles Multifamily Portfolio Noteholder will be effected in accordance with the Pooling and Servicing Agreement.
Advancing. The Master Servicer or the Trustee, as applicable, will be responsible for making: (i) P&I Advances on any NMS Los Angeles Multifamily Portfolio Mortgage Loan (but not on the NMS Los Angeles Multifamily Portfolio Companion Loan) pursuant to the Pooling and Servicing Agreement, in each case, unless the Master Servicer, the Special Servicer or the Trustee, as applicable, determines that such an Advance would be a Nonrecoverable Advance; and (ii) Property Advances with respect to the NMS Los Angeles Multifamily Portfolio Loan Combination, in each case unless a similar determination of nonrecoverability is made under the Pooling and Servicing Agreement.
Distributions. The NMS Los Angeles Multifamily Portfolio Intercreditor Agreement sets forth the respective rights of each of the NMS Los Angeles Multifamily Portfolio Noteholders and provides, in
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general, that all payments, proceeds and other recoveries on or in respect of the NMS Los Angeles Multifamily Portfolio Loan Combination (other than escrow and reserve payments and any proceeds, awards or settlements to be otherwise applied or released in accordance with the related loan documents) will be applied to the NMS Los Angeles Multifamily Portfolio Mortgage Loan and the NMS Los Angeles Multifamily Portfolio Companion Loans on apro rata andpari passu basis according to their respective outstanding principal balances (subject, in each case, to the payment and reimbursement rights of the applicable master servicer and special servicer in accordance with the terms of the applicable pooling and servicing agreement).
Consultation and Control. The directing holder under the NMS Los Angeles Multifamily Portfolio Intercreditor Agreement with respect to the NMS Los Angeles Multifamily Portfolio Loan Combination will be the Controlling Class Representative. Certain decisions to be made with respect to the NMS Los Angeles Multifamily Portfolio Loan Combination, including certain major decisions and the implementation of any recommended actions outlined in an asset status report pursuant to the Pooling and Servicing Agreement, will require the approval of the Controlling Class Representative unless a Control Termination Event exists.
Pursuant to the terms of the NMS Los Angeles Multifamily Portfolio Intercreditor Agreement, each NMS Los Angeles Multifamily Portfolio Non-Controlling Note Holders will have the right to (i) receive copies of all notices, information and reports that the Special Servicer is required to provide to the Controlling Class Representative within the same time frame it is required to provide such notices, information and reports to the Controlling Class Representative (but without regard to whether or not the Controlling Class Representative actually has lost any rights to receive such information as a result of a Consultation Termination Event) and (ii) consult on a strictly non-binding basis with respect to certain major decisions as set forth in the NMS Los Angeles Multifamily Portfolio Intercreditor Agreement and the implementation of any recommended actions outlined in an asset status report. The consultation right of the NMS Los Angeles Multifamily Portfolio Non-Controlling Note Holders will expire 10 business days after the delivery by the Special Servicer of notice and information relating to the matter subject to consultation, whether or not such NMS Los Angeles Multifamily Portfolio Non-Controlling Note Holders has responded within such period;provided, that if a new course of action is proposed that is materially different from the actions previously proposed, the 10 business-day consultation period will begin anew. Notwithstanding each NMS Los Angeles Multifamily Portfolio Non-Controlling Note Holders’ consultation rights described above, the Special Servicer is permitted to make any major decision or take any action set forth in an asset status report before the expiration of the aforementioned 10 business-day period if it determines that immediate action with respect to such decision is necessary to protect the interests of the holders of the NMS Los Angeles Multifamily Portfolio Mortgage Loan and the NMS Los Angeles Multifamily Portfolio Companion Loan.
Notwithstanding the foregoing consent or consultation rights, no direction or objection by the Controlling Class Representative or a NMS Los Angeles Multifamily Portfolio Non-Controlling Note Holder may require or cause the Master Servicer or the Special Servicer, as applicable, to violate any provision of any related mortgage loan documents, applicable law, the Pooling and Servicing Agreement, the NMS Los Angeles Multifamily Portfolio Intercreditor Agreement or the REMIC provision, including, without limitation, the Master Servicer’s or Special Servicer’s obligation to act in accordance with the Servicing Standard or expose the Master Servicer, Special Servicer, paying agent, Trust Fund, Certificate Administrator, Trustee, Depositor, any Mortgage Loan Seller, Operating Advisor, Custodian, or any of their affiliates, officers, directors, employees or agents to liability, or materially expand the scope of the Master Servicer’s or the Special Servicer’s responsibilities under the Pooling and Servicing Agreement.
In addition to the consultation rights of the NMS Los Angeles Multifamily Portfolio Non-Controlling Note Holders described above, the NMS Los Angeles Multifamily Portfolio Non-Controlling Note Holders will have the right to annual conference calls with the Master Servicer or Special Servicer, as applicable, upon reasonable notice and at times reasonably acceptable to the Master Servicer or Special Servicer, as applicable, in which servicing issues related to the NMS Los Angeles Multifamily Portfolio Loan Combination are discussed.
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The “NMS Los Angeles Multifamily Portfolio Non-Controlling Note Holders” means, with respect to the NMS Los Angeles Multifamily Portfolio Companion Loan, (i) until the NMS Los Angeles Multifamily Portfolio Companion Loan is included in a securitization, the holder of the NMS Los Angeles Multifamily Portfolio Companion Loan and (ii) if the NMS Los Angeles Multifamily Portfolio Companion Loan is included in a securitization, the party entitled under such securitization to exercise the rights granted to the holder of the NMS Los Angeles Multifamily Portfolio Companion Loan under the NMS Los Angeles Multifamily Portfolio Intercreditor Agreement.
Sale of Defaulted Mortgage Loan. Pursuant to the terms of the NMS Los Angeles Multifamily Portfolio Intercreditor Agreement, if the NMS Los Angeles Multifamily Portfolio Loan Combination becomes a Defaulted Mortgage Loan pursuant to the terms of the Pooling and Servicing Agreement and thereafter the Special Servicer determines pursuant to the Pooling and Servicing Agreement and the NMS Los Angeles Multifamily Portfolio Intercreditor Agreement to pursue a sale of the NMS Los Angeles Multifamily Portfolio Mortgage Loan, the Special Servicer will be required to sell the NMS Los Angeles Multifamily Portfolio Mortgage Loan together with the NMS Los Angeles Multifamily Portfolio Companion Loans as a single whole loan, in accordance with the provisions of the Pooling and Servicing Agreement and the NMS Los Angeles Multifamily Portfolio Intercreditor Agreement;provided, that the Special Servicer will not be permitted to sell the NMS Los Angeles Multifamily Portfolio Loan Combination without the consent of each NMS Los Angeles Multifamily Portfolio Non-Controlling Note Holder unless the Special Servicer has satisfied certain notice and information delivery requirements.
Appointment of Special Servicer. The Controlling Class Representative (prior to a Control Termination Event) or Certificateholders with the requisite percentage of Voting Rights, as described under “The Pooling and Servicing Agreement—Voting Rights”(following a Control Termination Event), will have the right, with or without cause, to replace the Special Servicer and appoint a replacement special servicer in lieu thereof without the consent of the NMS Los Angeles Multifamily Portfolio Non-Controlling Note Holders as long as such replacement special servicer is a “qualified servicer” (as described in the NMS Los Angeles Multifamily Portfolio Intercreditor Agreement) and satisfies the other conditions set forth in the Pooling and Servicing Agreement.
Additional Mortgage Loan Information
General. The information in this free writing prospectus (including the Annexes to this free writing prospectus) set forth certain information with respect to the Mortgage Loans and Mortgaged Properties. Such information is presented, where applicable, as of the Cut-off Date for each Mortgage Loan, with principal balances adjusted for the scheduled principal payments due on the Mortgage Loans on or before the Cut-off Date. Information with respect to a Mortgaged Property that is one of multiple Mortgaged Properties securing a particular Mortgage Loan is based on the Allocated Loan Amount for such Mortgaged Property. With regard to the Mortgaged Properties located in California, Northern California properties have a zip code greater than 93600 and Southern California properties have a zip code less than or equal to 93600. The statistics in the schedule and tables were derived, in many cases, from information and operating statements furnished by or on behalf of the respective borrowers. Such information and operating statements were generally unaudited. The sum of the amounts in any charts throughout this free writing prospectus, including the Annexes to this free writing prospectus, may not equal the indicated total under such column due to rounding.
Net income for a Mortgaged Property as determined in accordance with generally accepted accounting principles (“GAAP”) is not the same as the stated Underwritten Net Cash Flow for such Mortgaged Property as set forth in this free writing prospectus and in the Annexes to this free writing prospectus. In addition, Underwritten Net Cash Flow is not a substitute for, or comparable to, operating income (as determined in accordance with GAAP) as a measure of the results of a property’s operations or a substitute for cash flows from operating activities (determined in accordance with GAAP) as a measure of liquidity. No representation is made as to the future net cash flow of the Mortgaged Properties, nor is the Underwritten Net Cash Flow set forth in this free writing prospectus with respect to any Mortgaged Property intended to represent such future net cash flow.
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The ARD Loans. The Mortgage Loans secured by the Mortgaged Properties identified on Annex A-1 to this free writing prospectus as University Center and Rockford Crossing (the “ARD Loans”), representing approximately 1.2% and 1.0%, respectively, of the Initial Outstanding Pool Balance, provide that if, after a certain date (the “Anticipated Repayment Date”), the related borrower has not prepaid the related ARD Loan in full, any principal outstanding on that date will accrue interest at an increased interest rate (the “Revised Rate”) rather than the stated Mortgage Rate (the “Initial Rate”). While interest at the Initial Rate will continue to accrue and be payable on a current basis on each ARD Loan after its Anticipated Repayment Date, the payment of Excess Interest, to the extent actually collected, will be deferred and will be required to be paid, with interest (to the extent permitted under applicable law), only after the outstanding principal balance of such ARD Loan has been paid in full, at which time any Excess Interest actually collected will be paid to the holders of the Class V Certificates. The foregoing features, to the extent applicable, are designed to increase the likelihood that each ARD Loan will be prepaid by the related borrower on or about the applicable Anticipated Repayment Date. There can be no assurance that the borrower will pay the related ARD Loan in full on or near its Anticipated Repayment Date.
“Excess Interest” with respect to an ARD Loan is the interest accrued at the related Revised Rate in respect of such ARD Loan after the related Anticipated Repayment Date in excess of the interest accrued at the Initial Rate in respect of such ARD Loan, plus any compound interest thereon at the related Revised Rate, to the extent permitted by applicable law.
Definitions. For purposes of this free writing prospectus, including the information presented in the Annexes to this free writing prospectus, the indicated terms have the following meanings:
(a) “Administrative Fee Rate” for each Mortgage Loan is the percentage rateper annum set forth in Annex A-1 to this free writing prospectus for such Mortgage Loan that is payable in respect of the administration of such Mortgage Loan (which includes the applicable Servicing Fee Rate, Trustee/Certificate Administrator Fee Rate, Operating Advisor Fee Rate, CREFC® License Fee Rate and the fee rate paid to the subservicer, if any).
(b) “ADR” means, for any hospitality property, average daily rate.
(c) “Allocated Loan Amount” generally means, (a) with respect to any single Mortgaged Property that is the only real property collateral for the related Mortgage Loan, the total outstanding principal balance of such Mortgage Loan; and (b) with respect to any Mortgaged Property that is one of multiple Mortgaged Properties securing a Mortgage Loan, the portion of the total outstanding principal balance of such Mortgage Loan allocated to the subject Mortgaged Property in accordance with net cash flow, appraised value or otherwise in accordance with or as set forth in the related Mortgage Loan Documents.
(d) “Annual Debt Service” generally means, for any Mortgage Loan, 12 times the average of the principal and interest payments for the first 12 payment periods of the Mortgage Loan following the Cut-off Date (but without regard to any leap year adjustments),provided that: (i) in the case of a Mortgage Loan that provides for interest-only payments through maturity, the aggregate interest payments scheduled to be due on the Due Date following the Cut-off Date and the 11 Due Dates thereafter for such Mortgage Loan; and (ii) in the case of a Mortgage Loan that provides for an initial interest-only period and provides for scheduled amortization payments thereafter, 12 times the monthly payment of principal and interest payable during the amortization period. Monthly debt service and the debt service coverage ratios are also calculated using the average of the principal and interest payments for the first twelve payment periods of the Mortgage Loan following the Cut-off Date (but without regard to any leap-year adjustments), subject to the proviso to the prior sentence. In the case of a Mortgage Loan with one or more related Companion Loans, Annual Debt Service is calculated with respect to the Mortgage Loan including any Companion Loan (except, in the case of a Mortgage Loan with one or more related Subordinate Companion Loans, Annual Debt Service is calculated without regard to any related Subordinate Companion Loan). In the case of the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Atlanta Multifamily Portfolio, which secures a Mortgage Loan representing approximately 4.8% of the Initial Outstanding Pool Balance,
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following an initial interest only period of 18 months, the Mortgage Loan amortizes based on a non-standard amortization schedule attached to this free writing prospectus as Annex H, and the Annual Debt Service for the Mortgage Loan is based on the first 12 months of amortizing payments.
(e) “Appraised Value” means, for any Mortgaged Property, the appraised value of such Mortgaged Property as determined by the most recent third party appraisal of the Mortgaged Property available to the applicable Mortgage Loan Seller. In certain cases, the appraisals state an “as renovated” or “as complete” value for the related Mortgaged Property that assume that certain events will occur with respect to the re-tenanting, construction renovation or repairs at such Mortgaged Property. The Appraised Value set forth on Annex A-1 is the “as-is” value unless otherwise specified. In the case of the Atlanta Multifamily Portfolio Mortgage Loan, representing approximately 4.8% of the Initial Outstanding Pool Balance, the loan-to-value ratio for such Mortgage Loan has been calculated based on the “as renovated” appraised value of $69,300,000. Based on the “as is” appraised value of $63,800,000, the loan-to-value ratio for such Mortgage Loan is 70.5% and the LTV Ratio at Maturity or ARD for such Mortgage Loan is 67.2%. In the case of the portfolio of Mortgaged Properties identified on Annex A-1 to this free writing prospectus as NMS Los Angeles Multifamily Portfolio, securing a Mortgage Loan representing approximately 7.0% of the Initial Outstanding Pool Balance, the “as portfolio” value of $174,300,000 reflects a premium attributed to the aggregate value of the NMS Los Angeles Multifamily Portfolio as a whole. The sum of the value of each of the Mortgaged Properties within the NMS Los Angeles Multifamily Portfolio on an individual basis is $163,800,000, which represents a loan-to-value ratio for such Mortgage Loan of 73.3% and the LTV Ratio at Maturity or ARD for such Mortgage Loan is 73.3%. In the case of the portfolio of Mortgaged Properties identified on Annex A-1 to this free writing prospectus as Sandalwood Portfolio, securing a Mortgage Loan representing approximately 6.8% of the Initial Outstanding Pool Balance, the “as portfolio” value of $99,310,000 reflects a premium attributed to the aggregate value of the Sandalwood Portfolio as a whole. The sum of the value of each of the Mortgaged Properties within the Sandalwood Portfolio on an individual basis is $97,580,000, which represents a loan-to-value ratio for such Mortgage Loan of 64.5% and the LTV Ratio at Maturity or ARD for such Mortgage Loan is 51.7%. In the case of the portfolio of Mortgaged Properties identified on Annex A-1 to this free writing prospectus as Midwest Shopping Center Portfolio, securing a Mortgage Loan representing approximately 4.1% of the Initial Outstanding Pool Balance, the “as portfolio” value of $56,630,000 reflects a premium attributed to the aggregate value of the Midwest Shopping Center Portfolio as a whole. The sum of the value of each of the Mortgaged Properties within the Midwest Shopping Center Portfolio on an individual basis is $54,600,000, which represents a loan-to-value ratio for such Mortgage Loan of 69.9% and the LTV Ratio at Maturity or ARD for such Mortgage Loan is 56.4%. In the case of the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Reserve at Conway, which secures a Mortgage Loan representing approximately 1.6% of the Initial Outstanding Pool Balance, the loan-to-value ratio for such Mortgage Loan has been calculated based on the “as complete” appraised value of $20,100,000. Based on the “as-is” appraised value of $18,600,000, the loan-to-value ratio for such Mortgage Loan is 79.6% and the LTV Ratio at Maturity or ARD for such Mortgage Loan is 72.9%.
(f) “Balloon Balance” means, with respect to any Mortgage Loan, the principal amount that will be due at maturity (or, in the case of any ARD Loan, at the related Anticipated Repayment Date) for such Mortgage Loan, assuming no payment defaults or principal prepayments.
(g) “CREFC® License Fee” means, with respect to each Mortgage Loan (including any REO Loan or any Mortgage Loan that has been defeased) for any related Interest Accrual Period, the amount of interest accrued during such related Interest Accrual Period at the related CREFC® License Fee Rate on the same balance, in the same manner and for the same number of days as interest at the applicable Mortgage Rate accrued with respect to such Mortgage Loan during such related Interest Accrual Period.
(h) “CREFC® License Fee Rate” means 0.0005%per annum.
(i) “Cut-off Date Loan-to-Value Ratio,” “Loan-to-Value Ratio,” “Cut-off Date LTV,” “Cut-off Date LTV Ratio,” “LTV Ratio” or “Current LTV” means, with respect to any Mortgage Loan, (a) the
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Cut-off Date Balance of such Mortgage Loan divided (b) by the Appraised Value of the related Mortgaged Property or Mortgaged Properties. In the case of a Mortgage Loan that is part of a Loan Combination, unless otherwise indicated, loan-to-value ratios were calculated with respect to the Mortgage Loan including any relatedPari PassuCompanion Loan (and, in the case of a Mortgage Loan with one or more related Subordinate Companion Loans, loan-to-value ratios were calculated without regard to any related Subordinate Companion Loan). For a calculation of the loan-to-value ratio for each Mortgage Loan that is part of a Loan Combination including the related Companion Loans, see “—Loan Combinations” above. In the case of certain of the Mortgage Loans, the Loan-to-Value Ratio for such Mortgage Loans has been calculated based on the “as portfolio”, “as renovated” or “as complete” Appraised Value of the related Mortgaged Property. For further description, see Annex A-1 to this free writing prospectus and the footnotes thereto.
(j) “Cut-off Date U/W NCF Debt Yield,” “Underwritten NCF Debt Yield” or “U/W NCF Debt Yield” means, with respect to any Mortgage Loan, the Underwritten Net Cash Flow for such Mortgaged Property or Mortgaged Properties divided by the Cut-off Date Balance for the related Mortgage Loan. In the case of a Mortgage Loan that is part of a Loan Combination, unless otherwise indicated, debt yields were calculated with respect to such Mortgage Loan including any relatedPari PassuCompanion Loan (and, in the case of a Mortgage Loan with one or more related Subordinate Companion Loans, debt yields were calculated without regard to any related Subordinate Companion Loan). For a calculation of the debt yield for each Mortgage Loan that is part of a Loan Combination including the related Companion Loans, see “—Loan Combinations” above. For further description, see Annex A-1 to this free writing prospectus and the footnotes thereto.
(k) “Cut-off Date U/W NOI Debt Yield,” “Underwritten NOI Debt Yield” or “U/W NOI Debt Yield” means, with respect to any Mortgage Loan, the Underwritten Net Operating Income for such Mortgaged Property or Mortgaged Properties divided by the Cut-off Date Balance for the related Mortgage Loan. In the case of a Mortgage Loan that is part of a Loan Combination, unless otherwise indicated, debt yields were calculated with respect to the Mortgage Loan including any relatedPari Passu Companion Loan (and, in the case of a Mortgage Loan with one or more related Subordinate Companion Loans, debt yields were calculated without regard to any related Subordinate Companion Loan). For a calculation of the debt yield for each Mortgage Loan that is part of a Loan Combination including the related Companion Loans, see “—Loan Combinations” above. For further description, see Annex A-1 to this free writing prospectus and the footnotes thereto.
(l) “GLA” means gross leasable area.
(m) “Interest Rate” means, with respect to any Mortgage Loan, the related Mortgage Rate, in each case without giving effect to a default rate or, in the case of an ARD Loan, the related Revised Rate.
(n) “Leased Fee” means a Mortgaged Property type where the collateral consists of the Borrower’s fee interest in land (excluding the improvements on the related Mortgaged Property) that is subject to a ground lease (or, with respect to a leasehold interest that is a space lease or air rights lease, the space lease or air rights lease). With respect to any Mortgage Loan evidenced by a Leased Fee interest, the tenant or tenants at the related improvements (which are not collateral for the Mortgage Loan) are not included in statistical information herein regarding the tenants at the Mortgaged Properties.
(o) “LTV Ratio at Maturity,” “Balloon LTV”, “Maturity Date LTV,” “LTV Ratio at Maturity or ARD” means, with respect to any Mortgage Loan, (a) the Balloon Balance for such Mortgage Loan, divided by (b) the Appraised Value of the related Mortgaged Property or Mortgaged Properties. In the case of a Mortgage Loan that is part of a Loan Combination, unless otherwise indicated, loan-to-value ratios were calculated with respect to the Mortgage Loan including any relatedPari PassuCompanion Loans (and, in the case of a Mortgage Loan with one or more related Subordinate Companion Loans, Loan-To-Value Ratios were calculated without regard to any related Subordinate Companion Loan). For a calculation of the loan-to-value ratio for each Mortgage Loan that is part of a Loan Combination including the related Companion Loan, see “—Loan Combinations” above. In the
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case of an ARD Loan, the LTV Ratio at Maturity or ARD is calculated with respect to the related Balloon Balance on the related Anticipated Repayment Date. In the case of certain of the Mortgage Loans, the LTV Ratio at Maturity or ARD for such Mortgage Loans has been calculated based on the “as portfolio”, “as complete” or “as renovated” Appraised Value of the related Mortgaged Property. For further description, see Annex A-1 to this free writing prospectus and the footnotes thereto.
(p) “MSA” means metropolitan statistical area.
(q) “Net Operating Income” or “NOI,” with respect to any Mortgaged Property, means historical net operating income for the annual or other period specified (or ending on the “NOI Date” specified). In general, it is the revenue derived from the use and operation of such Mortgaged Property less the sum of (a) actual operating expenses (such as utilities, administrative expenses, repairs and maintenance, management and franchise fees and advertising) and (b) actual fixed expenses (such as insurance, real estate taxes and, if applicable, ground, space or air rights lease payments). Net operating income generally does not reflect (i.e., it does not deduct for) capital expenditures, including tenant improvement costs and leasing commissions, interest expenses and non-cash items such as depreciation and amortization.
(r) “NRA” means net rentable area.
(s) “Occupancy” means the percentage of Square Feet, Units, Rooms, Keys, Pads, Beds or Spaces, as the case may be, of a Mortgaged Property that was occupied or leased as of or, in the case of certain properties, average Units, Keys or Rooms so occupied over a specified period ending on, a specified date (identified on Annex A-1 to this free writing prospectus as the “Occupancy As-of Date”). The Occupancy may have been obtained from the borrower, as derived from the Mortgaged Property’s rent rolls, operating statements or appraisals or as determined by a site inspection of such Mortgaged Property. The Occupancy presented in this free writing prospectus may include unoccupied space leased to an affiliate of the borrower (including space master leased to an affiliate of the borrower to increase occupancy to a “stabilized level”) and space subject to build-out or other construction or renovation and “dark” space as to which the related tenant continues to pay rent. The Occupancy may exclude area currently under renovation. Information on Annex A-1 to this free writing prospectus concerning the “Largest Tenant,” “2nd Largest Tenant,” “3rd Largest Tenant,” “4th Largest Tenant” and “5th Largest Tenant” is presented as of the same date as of which the Occupancy is specified.
(t) “RevPar” means, for any hospitality property, revenues per available room.
(u) “Square Feet”, “SF” or “Sq. Ft.” means, in the case of a Mortgaged Property operated as a retail center, office, industrial/warehouse facility, combination retail/office or other special purpose property, the square footage of the net rentable or leasable area.
(v) “T-12” and “TTM” each means trailing 12 months.
(w) “Term to Maturity” means, with respect to any Mortgage Loan, the remaining term, in months, from the Cut-off Date for such Mortgage Loan to the related maturity date or, in the case of an ARD Loan, the related Anticipated Repayment Date, as applicable. Annex A-1 to this free writing prospectus indicates which Mortgage Loans are ARD Loans.
(x) “Underwritten Net Cash Flow,” “Underwritten NCF” or “U/W NCF,” with respect to any Mortgaged Property, means the Underwritten Net Operating Income decreased by the estimated capital expenditures and reserves for capital expenditures, including tenant improvement costs and leasing commissions, as applicable. Underwritten Net Cash Flow generally does not reflect interest expense and non-cash items such as depreciation and amortization.
(y) “Underwritten Net Operating Income,” “Underwritten NOI,” or “U/W NOI,” with respect to any Mortgaged Property, means an estimate of cash flow available for debt service in a typical year of stable, normal operations as determined by the related Mortgage Loan Seller. In general, it is the
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estimated U/W Revenue derived from the use and operation of such Mortgaged Property (in certain cases, however, inclusive of rents under master leases with an affiliate of the borrower that relate to space not used or occupied by the master lease tenant) less the sum of (a) estimated operating expenses (such as utilities, administrative expenses, repairs and maintenance, management and franchise fees and advertising); and (b) estimated fixed expenses (such as insurance, real estate taxes and, if applicable, ground, space or air rights lease payments). The Underwritten Net Operating Income for each Mortgaged Property is calculated on the basis of numerous assumptions and subjective judgments, which, if ultimately proven erroneous, could cause the actual net cash flow for such Mortgaged Property to differ materially from the Underwritten Net Operating Income set forth in this free writing prospectus. Certain of such assumptions and subjective judgments of each Mortgage Loan Seller relate to future events, conditions and circumstances, including future expense levels, future increases in rents over current rental rates (including in circumstances where a tenant may currently be in a free or reduced rent period), future vacancy rates, the levels and stability of cash flows for properties with short term rentals (such as hospitality properties and self-storage facilities), commencement of occupancy and rent payments with respect to leases for which rentals have not yet commenced and/or a “free rent” period is still in effect, the re-leasing of vacant space and the continued leasing of occupied space, which will be affected by a variety of complex factors over which none of the Depositor, the applicable Mortgage Loan Seller, the Master Servicer or the Special Servicer have control. In certain cases, Net Operating Income includes rents paid on “dark” space by a tenant that has ceased operations at the subject mortgaged property prior to the end of its lease. In some cases, the Underwritten Net Operating Income set forth in this free writing prospectus for any Mortgaged Property is higher, and may be materially higher, than the annual net operating income for such Mortgaged Property based on historical operating statements.
In determining Underwritten Net Operating Income for a Mortgaged Property, the applicable Mortgage Loan Seller generally relied on rent rolls and/or other generally unaudited financial information provided by the respective borrowers; and in some cases, the appraisal, borrower budgets and/or local market information was the primary basis for the determination. From that information, the applicable Mortgage Loan Seller calculated stabilized estimates of cash flow that took into consideration historical financial statements (where available), appraiser estimates, borrower budgets, material changes in the operating position of a Mortgaged Property of which the applicable Mortgage Loan Seller was aware (e.g., current rent roll information including newly signed leases (regardless of whether the tenant has taken occupancy), near term rent steps, expirations of “free rent” periods, market rents, and market vacancy data), and estimated capital expenditures, leasing commissions and tenant improvement costs. In certain cases, the applicable Mortgage Loan Seller’s estimate of Underwritten Net Operating Income reflected differences from the information contained in the operating statements obtained from the respective borrowers (resulting in either an increase or decrease from the recent historical net operating income set forth therein) based upon the applicable Mortgage Loan Seller’s own analysis of such operating statements and the assumptions applied by the respective borrowers in preparing such statements and information. In certain instances, for example, property management fees and other expenses may have been taken into account in the calculation of Underwritten Net Operating Income even though such expenses may not have been reflected in actual historic operating statements. In most of those cases, the information was annualized, with some exceptions, before using it as a basis for the determination of Underwritten Net Operating Income. In certain cases with respect to certain credit rated tenants, or credit worthy tenants, the applicable Mortgage Loan Seller may have calculated Underwritten Net Operating Income based on certain adjustments to the rental income, such as using the average rent due under the related lease from such tenant over the Mortgage Loan or lease term.
(z) “Units” or “Rooms” or “Pads” or “Beds” or “Keys” or “Spaces”, means (a) in the case of a Mortgaged Property operated as multifamily housing, the number of apartments, regardless of the size of or number of rooms or beds in such apartment or (b) in the case of a Mortgaged Property operated as a hospitality property, the number of guest rooms or keys or (c) in the case of a Mortgaged Property operated as a manufactured housing property, if any, the number of pads for manufactured homes or (d) in the case of a Mortgaged Property operated as a parking lot or garage, the number of parking spaces.
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(aa) “U/W EGI” with respect to any Mortgaged Property, means the gross potential rent, recoveries and other income, less mark-to-market, vacancy and collection loss.
(bb) “U/W NCF DSCR,” “Underwritten NCF DSCR,” “Debt Service Coverage Ratio” or “DSCR” means, with respect to any Mortgage Loan, (a) the Underwritten Net Cash Flow for the related Mortgaged Property or Mortgaged Properties, divided by (b) the Annual Debt Service for such Mortgage Loan. In the case of a Mortgage Loan that is part of a Loan Combination, unless otherwise indicated, debt service coverage ratios were calculated with respect to the Mortgage Loan including any relatedPari PassuCompanion Loan (and, in the case of a Mortgage Loan with one or more related Subordinate Companion Loans, debt service coverage ratios were calculated without regard to any related Subordinate Companion Loan). For a calculation of the debt service coverage ratio for each Mortgage Loan that is part of a Loan Combination including the related Companion Loans, see “—Loan Combinations” above. In the case of the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Atlanta Multifamily Portfolio, which secures a Mortgage Loan representing approximately 4.8% of the Initial Outstanding Pool Balance, following an initial interest only period of 18 months, U/W NCF DSCR is based on the debt service for the first 12 months of amortizing payments on the related non-standard amortization schedule attached to this free writing prospectus as Annex H.
In general, debt service coverage ratios are used by income property lenders to measure the ratio of (a) cash currently generated by a property that is available for debt service to (b) required debt service payments. However, debt service coverage ratios only measure the current, or recent, ability of a property to service mortgage debt. If a property does not possess a stable operating expectancy (for instance, if it is subject to material leases that are scheduled to expire during the loan term and that provide for above-market rents and/or that may be difficult to replace), a debt service coverage ratio may not be a reliable indicator of a property’s ability to service the mortgage debt over the entire remaining loan term. The Underwritten NCF DSCRs are presented in this free writing prospectus for illustrative purposes only and, as discussed above, are limited in their usefulness in assessing the current, or predicting the future, ability of a Mortgaged Property to generate sufficient cash flow to repay the related Mortgage Loan. Accordingly, no assurance can be given, and no representation is made, that the Underwritten NCF DSCRs accurately reflect that ability.
(cc) “U/W NOI DSCR” or “Underwritten NOI DSCR” means, with respect to any Mortgage Loan, (a) the Underwritten Net Operating Income for the related Mortgaged Property or Mortgaged Properties, divided by (b) the Annual Debt Service for such Mortgage Loan. In the case of a Mortgage Loan that is part of a Loan Combination, unless otherwise indicated, debt service coverage ratios were calculated with respect to such Mortgage Loan including any relatedPari Passu Companion Loan (and, in the case of a Mortgage Loan with one or more related Subordinate Companion Loans, debt service coverage ratios were calculated without regard to any related Subordinate Companion Loan). For a calculation of the debt service coverage ratio for each Mortgage Loan that is part of a Loan Combination including the related Companion Loans, see “—Loan Combinations” above. In the case of the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Atlanta Multifamily Portfolio, which secures a Mortgage Loan representing approximately 4.8% of the Initial Outstanding Pool Balance, following an initial interest only period of 18 months, U/W NOI DSCR is based on the debt service for the first 12 months of amortizing payments on the related non-standard amortization schedule attached to this free writing prospectus as Annex H.
The Underwritten NOI DSCRs are presented in this free writing prospectus for illustrative purposes only and, as discussed above, are limited in their usefulness in assessing the current, or predicting the future, ability of a Mortgaged Property to generate sufficient cash flow to repay the related Mortgage Loan. Accordingly, no assurance can be given, and no representation is made, that the Underwritten NOI DSCRs accurately reflect that ability. See the definition of “U/W NCF DSCR” in this free writing prospectus for more information regarding the evaluation of debt service coverage ratios.
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(dd) “U/W Revenue” with respect to any Mortgage Loan, means the gross potential rent (or, in the case of a hospitality mortgaged property, room rent, food and beverage revenues and other hotel income), subject to the assumptions and subjective judgments of each Mortgage Loan Seller as described under the definition of “Underwritten Net Operating Income” in this free writing prospectus.
Certain Terms and Conditions of the Mortgage Loans
Calculation of Interest. All of the Mortgage Loans accrue interest on the basis of the actual number of days elapsed and a 360-day year.
Except in the case of the Mortgage Loans with an Anticipated Repayment Date, none of the Mortgage Loans provide for negative amortization or for the deferral of interest.
Amortization of Principal. The Mortgage Loans provide for one or more of the following:
(a) Thirty (30) Mortgage Loans, representing approximately 45.5% of the Initial Outstanding Pool Balance, including 2 ARD Loans, provide for payments of interest-only for a period of 11 months to 71 months following the Cut-off Date and thereafter provide for regularly scheduled payments of interest and principal based on an amortization period longer than the remaining term of the related Mortgage Loan to maturity and therefore each has an expected Balloon Balance at the related maturity or anticipated repayment date. In the case of the Atlanta Multifamily Portfolio Mortgage Loan, representing approximately 4.8% of the Initial Outstanding Pool Balance as of the Cut-off Date, following an initial interest only period of 18 months, the mortgage loan amortizes based on a non-standard amortization schedule attached to this free writing prospectus as Annex H.
(b) Twenty-seven (27) Mortgage Loans (excluding interest-only and partial interest-only Mortgage Loans), representing approximately 33.9% of the Initial Outstanding Pool Balance, provide for payments of interest and principal as of the Cut-off Date and then have an expected Balloon Balance at the maturity or anticipated repayment date.
(c) Eight (8) Mortgage Loans, representing approximately 20.6% of the Initial Outstanding Pool Balance, are interest-only until the related maturity date. See “The Pooling and Servicing Agreement—Accounts—Excess Interest” below.
Prepayment Provisions. The Mortgage Loans generally permit voluntary prepayment without the payment of any penalty on the last 3 to 7 scheduled payment dates (through and including the maturity date or the Anticipated Repayment Date, as applicable, each an “Open Period”). All Yield Maintenance Loans, representing approximately 11.5% of the Initial Outstanding Pool Balance, prohibit voluntary prepayment for a specified period from the Closing Date (a “Yield Maintenance Lock-Out Period”), all of the Prepayment Premium Mortgage Loans prohibit voluntary prepayment for a specified period from the Closing Date (a “Prepayment Premium Lock-Out Period”) and all of the Defeasance Loans prohibit Defeasance (as defined below) for at least two years from the Closing Date (a “Defeasance Lock-Out Period”),provided that under certain circumstances as noted in paragraph (a) below, a Defeasance Loan may permit prepayment with yield maintenance prior to the Defeasance Lock-out Period. Any Yield Maintenance Lock-Out Period, Prepayment Premium Lock-Out Period or Defeasance Lock-Out Period is referred to herein as a “Lock-Out Period”. The weighted average Lock-Out Period remaining from the Cut-off Date for the Mortgage Loans that have a Lock-Out Period is approximately 25 months. The Lock-Out Period, if any, for each Mortgage Loan is set forth on Annex A-1 to this free writing prospectus under the heading “Prepayment Provisions (# of payments).” Each Mortgage Loan restricts voluntary prepayments in one of the following ways:
(a) Fifty-eight (58) of the Mortgage Loans (the “Defeasance Loans”), representing approximately 88.5% of the Initial Outstanding Pool Balance, permit defeasance only (not voluntary prepayment) after the expiration of a Lock-Out Period and prior to the related Open Period (such period, the “Defeasance Period”), which Defeasance Period is set forth on Annex A-1 to this free writing prospectus under the heading “Prepayment Provisions (# of payments).” In the case of the Mortgage Loans that are secured by multiple Mortgaged Properties (other than through cross-
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collateralization) and permit partial defeasance, the Mortgage Loan Documents require, among other things, that the defeasance collateral be an amount equal to a specified percentage, generally 110% to 125% of the portion of the Allocated Loan Amount with respect to the Mortgaged Property that is to be released.
(b) Seven (7) of the Mortgage Loans (the “Yield Maintenance Loans”), representing approximately 11.5% of the Initial Outstanding Pool Balance, permit voluntary prepayment of the Mortgage Loan in whole, if accompanied by a Yield Maintenance Charge from the expiration of the applicable Lock-Out Period until the commencement of the Open Period for such Mortgage Loan (such period, in respect of such Yield Maintenance Loans, the “Yield Maintenance Period”). With respect to these Yield Maintenance Loans, the Yield Maintenance Period is identified on Annex A-1 to this free writing prospectus under the heading “Prepayment Provisions (# of payments).”
With respect to certain Yield Maintenance Loans, the yield maintenance charge (the “Yield Maintenance Charge”) will generally, subject to variations, be equal to the greater of (i) a specified percentage of the amount being prepaid or (ii) the present value as of the prepayment date, of the remaining scheduled payments of principal and interest from the prepayment date through the maturity date or the last date of the related Yield Maintenance Period, as applicable, determined by discounting such payments at the “Discount Rate” defined below (or as stated in the related Mortgage Loan Documents), less the amount of principal being prepaid. However, the Yield Maintenance Charge formula in a Yield Maintenance Loan may be significantly different than this formulation.
The term “Discount Rate” referred to in the preceding paragraph, generally means the yield on a U.S. Treasury security that has the most closely corresponding maturity date to the maturity date or the last date of the related Yield Maintenance Period, as applicable, or, the remaining weighted average life of the Mortgage Loan, plus an additional fixed percentage, as applicable of the Mortgage Loan.
With respect to certain other Yield Maintenance Loans, the Yield Maintenance Charge will generally, subject to certain variations, be an amount (in some cases not less than 1.0% of the amount prepaid) equal to the present value of a series of payments, each equal to the Interest Payment Differential as of the date of prepayment and payable on each scheduled due date over the remaining original term of the prepaid Yield Maintenance Loans through and including the stated maturity date or the Anticipated Repayment Date or the date preceding the commencement of the Open Period, as applicable, discounted at the Reinvestment Yield (in some cases, converted to a monthly equivalent yield) as of the date of prepayment for the number of months remaining from such date of prepayment to each scheduled due date through and including the stated maturity date, the Anticipated Repayment Date or the date preceding the commencement of the Open Period, as applicable.
The term “Interest Payment Differential” as used in the prior paragraph with respect to any prepaid Yield Maintenance Loans will generally equal (i) the positive difference, if any, of mortgage interest rate minus the Reinvestment Yield as of the date of prepayment, divided by (ii) 12, and multiplied by (iii) the outstanding principal balance (or the portion thereof being prepaid) of the prepaid Yield Maintenance Loans on the date of prepayment,provided that the Interest Payment Differential will never be less than zero.
The term “Reinvestment Yield” as used in the prior two paragraphs with respect to any prepaid Yield Maintenance Loan will generally equal, depending on the Mortgage Loan, either: (a) the yield calculated by the lender by the linear interpolation of the yields, “as reported in the Federal Reserve Statistical Release H.15-Selected Interest Rates under the heading U.S. Government Securities/Treasury Constant Maturities” for the week ending prior to the date of prepayment, of U.S. Treasury Constant Maturities with maturity dates (one longer or one shorter) most nearly approximating the loan maturity date or the Anticipated Repayment Date or the date preceding the commencement of the Open Period, as applicable (and, as used in the second preceding paragraph, converted to a monthly compounded nominal yield); or (b) the lesser of (i) the yield on the U.S. Obligations with the same maturity date as the stated maturity date, the Anticipated Repayment Date or date preceding the commencement of the Open Period, as applicable, of the prepaid Yield Maintenance Loan or, if no such U.S. Obligations issue is available, then the interpolated yield on the two U.S. Obligations issues (primary issues) with maturity dates (one prior to
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and one following) that are closest to the stated maturity date, the Anticipated Repayment Date or the date preceding the commencement of the Open Period, as applicable, of the prepaid Yield Maintenance Loan or (ii) the yield on the U.S. Obligations with a term equal to the remaining average life of the prepaid Yield Maintenance Loan or, if no such U.S. Obligations are available, then the interpolated yield on the two U.S. Obligations issues (primary issues) with terms (one prior to and one following) that are closest to the remaining average life of the prepaid Yield Maintenance Loan with each such yield being based on the bid price for such issue as published inThe Wall Street Journal on the date that is fourteen (14) days prior to the date of prepayment set forth in borrower’s notice of repayment (or, if such bid price is not published on that date, the next preceding date on which such bid price is so published) and converted to a monthly compounded nominal yield.
The term “U.S. Obligations” as used in the prior paragraph shall mean, in general, securities evidencing an obligation to timely pay principal and/or interest in a full and timely manner that are (1) direct obligations of the United States of America for the payment of which its full faith and credit is pledged, not subject to prepayment, call or early redemption, (2) other non-callable “government securities” as defined in Treasury Regulations Section 1.860G-2(a)(8)(ii), or (3) such other instruments as set forth in the related Mortgage Loan Documents.
Notwithstanding the foregoing, Yield Maintenance Charges payable (if at all) in connection with an involuntary prepayment (such as a prepayment resulting from a liquidation following a default) may be calculated in a manner that varies from those described above.
“Prepayment Premium” generally means, with respect to any Mortgage Loan, any premium, fee or other additional amount (other than a Yield Maintenance Charge) paid or payable, as the context requires, by a borrower in connection with a Principal Prepayment on, or other early collection of principal of, that Mortgage Loan. In most cases, a Prepayment Premium will equal a specified percentage of the amount prepaid, which percentage may decline over time for any particular Mortgage Loan.
Prepayment Premiums and Yield Maintenance Charges are distributable as described in this free writing prospectus under “Description of the Offered Certificates—Distributions—Prepayment Premiums and Yield Maintenance Charges.”
Most of the Mortgage Loans permit voluntary prepayment without the payment of a Yield Maintenance Charge or any Prepayment Premium during an “open period” that commences a specified number of payments prior to and including the stated maturity date (or, in the case of an ARD Loan, the related Anticipated Repayment Date), as set forth in Annex A-1 to this free writing prospectus.
Furthermore, certain Mortgage Loans may permit prepayments (with or without the payment of Prepayment Premiums or Yield Maintenance Charges) even during a Lock-Out Period in connection with (i) a property release, or (ii) a severance of cross-collateralization including in connection with the sale of a Mortgaged Property and the assumption of the related Mortgage Loan or allocable portion thereof.
All of the Mortgage Loans that permit voluntary prepayments require that the prepayment be made on the Due Date or, if on a different date, that any prepayment be accompanied by the interest that would accrue through but excluding the next Due Date.
Unless a Mortgage Loan is relatively near its stated maturity date (or Anticipated Repayment Date, as applicable) or unless the sale price or the amount of the refinancing of the related Mortgaged Property is considerably higher than the current outstanding principal balance of the Mortgage Loan (due to an increase in the value of the Mortgaged Property or otherwise) and depending on the interest rate environment at the time of prepayment, the Yield Maintenance Charge or Prepayment Premium may offset entirely or render insignificant any economic benefit to be received by a related borrower upon a refinancing or sale of its Mortgaged Property. The Yield Maintenance Charge or Prepayment Premium provision of a Mortgage Loan creates an economic disincentive for the borrower to prepay its Mortgage Loan voluntarily and, accordingly, the related borrower may elect not to prepay its Mortgage Loan. However, we cannot assure you that the imposition of a Yield Maintenance Charge or Prepayment
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Premium will provide a sufficient disincentive to prevent a voluntary principal prepayment or sufficient compensation to Certificateholders affected by a prepayment.
Certain state laws limit the amounts that a lender may collect from a borrower as an additional charge in connection with the prepayment of a Mortgage Loan. The Mortgage Loans generally do not require the payment of Prepayment Premium or Yield Maintenance Charges in connection with a prepayment of the related Mortgage Loan as a result of a casualty or condemnation. Certain of the Mortgage Loans may require the payment of Prepayment Premiums or Yield Maintenance Charges in connection with an acceleration of the related Mortgage Loan. There can be no assurance that the related borrowers will pay the Prepayment Premiums or Yield Maintenance Charges. See “Risk Factors—Risks Related to the Mortgage Loans—Risks Related to Enforceability of Prepayment Premiums,Yield Maintenance Charges and Defeasance Provisions” in this free writing prospectus and “Certain Legal Aspects of Mortgage Loans—Default Interest and Limitations on Prepayments” in the prospectus.
In the case of most of the Mortgage Loans, if an award or loss resulting from an event of condemnation or casualty is less than a specified percentage of the original principal balance of the Mortgage Loan, the proceeds or award may be applied by the borrower to the costs of repairing or replacing the Mortgaged Property. In other circumstances, the Mortgage Loans provide generally that in the event of a condemnation or casualty, the lender may apply the condemnation award or insurance proceeds to the repayment of debt, without payment of a Prepayment Premium or a Yield Maintenance Charge.
Certain Mortgage Loans may provide that if casualty or condemnation proceeds are applied to partially prepay the Mortgage Loan, the borrower will be permitted to supplement such proceeds with an amount sufficient to prepay the entire principal balance or an allocated portion of the Mortgage Loan. In such event, generally no Prepayment Premium or Yield Maintenance Charge would be required to be paid.
Some of the Mortgage Loans may additionally be secured by cash reserves or irrevocable letters of credit that will be released upon satisfaction by the borrower of leasing-related or other conditions, including, in some cases, achieving specified debt service coverage ratios or loan-to-value ratios. In some cases, a Mortgage Loan’s amortization schedule will be recast upon the occurrence of certain events, including prepayments in connection with partial condemnations or partial casualty losses, property releases or partial prepayment of a Mortgage Loan with a holdback amount via application of the related holdback reserves, cash reserves or letter of credit due to the failure to satisfy performance triggers. For additional information, see Annex A-1 to this free writing prospectus.
Neither the Depositor nor any of the Mortgage Loan Sellers makes any representation as to the enforceability of the provision of any Mortgage Loan requiring the payment of a Prepayment Premium or a Yield Maintenance Charge, or of the collectability of any Prepayment Premium or Yield Maintenance Charge. See “Risk Factors—Risks Related to the Offered Certificates—Risks Related to Prepayments and Repurchases of Mortgage Loans” and “—Yield Considerations” in this free writing prospectus and “Certain Legal Aspects of Mortgage Loans—Default Interest and Limitations on Prepayments” in the prospectus.
Property Releases. Certain of the Mortgage Loans contain provisions that permit the related borrower to obtain a release of all or a portion of the Mortgaged Property or Mortgaged Properties from the lien of the Mortgage securing such Mortgage Loan.
All of the Defeasance Loans permit the applicable borrower, after the Defeasance Lock-Out Period, to obtain a release of the Mortgaged Property from the lien of the related Mortgage (“Defeasance” or, the option to cause a Defeasance, the “Defeasance Option”);provided that, among other conditions, (a) no event of default exists; (b) the borrower pays on a Due Date or, in the case of certain Defeasance Loans, any other date,provided that the interest payable through the next Due Date is paid, (the “Release Date”) (i) all principal due on such Due Date and all interest accrued and unpaid on the principal balance of the Note (or, with respect to a partial Defeasance, a portion of the Note) to and including the Release Date and (ii) all other sums, excluding scheduled interest or principal payments, due under the Mortgage Loan
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and all related Mortgage Loan Documents; and (c) the borrower delivers “government securities” (within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended) or such other securities as permitted by the Internal Revenue Code of 1986, as amended (the “Code”) with respect to a Defeasance, that are acceptable to the Rating Agencies (the “Defeasance Collateral”) in an amount sufficient to make all scheduled payments of principal and interest on or prior to, but as close as possible to, all successive scheduled payment dates from the Release Date to the related maturity date (or the related Anticipated Repayment Date, if applicable), or in certain cases, through the date on which the Mortgage Loan is freely prepayable, in amounts equal to the scheduled payments due on such dates under (or, in the case of the final such date, to pay in full) the Mortgage Loan or the defeased amount thereof in the case of a partial Defeasance. In addition, in connection with a Defeasance, the related borrower is generally required to (i) pay any reasonable costs and expenses incurred in connection with the Defeasance and (ii) deliver a security agreement granting the lender a first priority lien on the Defeasance Collateral. Certain of the Defeasance Loans secured by multiple Mortgaged Properties or secured by an individual Mortgaged Property with an identifiable parcel or parcels permit the release from the lien of the related mortgage of such individual Mortgaged Property or portion of the Mortgaged Property, provided, among other things, (i) and (ii) (listed in the prior sentence) are satisfied and the borrower delivers Defeasance Collateral in an amount sufficient to defease and, as described above, to make payments on, that portion of the subject Defeasance Loans equal to a specified percentage (generally 110% to 125%) of the Allocated Loan Amount for such Mortgaged Property or portion of such Mortgaged Property to be released from the lien of the related Mortgage. With respect to all of the Defeasance Loans, the Defeasance Lock-Out Period is at least two years from the Closing Date. In certain cases a borrower may post Defeasance Collateral sufficient to make payments through the related maturity date or the related Anticipated Repayment Date, if applicable, and thereafter prepay the Mortgage Loan after the date upon which the related Mortgage Loan is freely prepayable, in which case the remaining Defeasance Collateral will be returned to the borrower.
In some cases, the borrower under a defeased loan will be a successor borrower, which entity will assume the obligations of the borrower exercising a Defeasance Option and the original borrower will be released from its obligations under the related Mortgage Loan Documents. If a Mortgage Loan is partially defeased and the successor borrower assumes the borrower’s obligations, the related Note will generally be split and only the defeased portion of the borrower’s obligations will be transferred to the successor borrower.
The Depositor makes no representation as to the enforceability of the defeasance provisions of any Mortgage Loan. See “Risk Factors—Risks Related to the Offered Certificates—Risks Related to Prepayments and Repurchases of Mortgage Loans” and “—Yield Considerations” in this free writing prospectus.
In addition to the release of a Mortgaged Property (or portion thereof) by substitution of such Mortgaged Property for Defeasance Collateral, certain of the Mortgage Loans permit the release or substitution of a Mortgaged Property or portion thereof as follows:
The release of a Mortgaged Property, subject to the satisfaction of certain release conditions, including payment of the outstanding loan balance, plus a Yield Maintenance Charge. See “Annex A-1—Certain Characteristics of the Mortgage Loans” for a list of Yield Maintenance Loans.
The release of a portion of a Mortgaged Property (or release of all of a single Mortgaged Property that secures a multi-property Mortgage Loan), subject to satisfaction of certain release conditions, including payment of the outstanding loan balance or Allocated Loan Amount, as applicable, plus, in certain cases, a Yield Maintenance Charge.
The release of a portion of a Mortgaged Property (including, in certain cases, a release of development rights such as “air rights” or “mineral rights”), where, in each such case, such release property is vacant, non-income producing or was given no material value in connection with loan origination and underwriting criteria (although the release property may be developed following the release). For example:
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· | With respect to the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Evergreen Square, which secures a Mortgage Loan representing approximately 0.8% of the Initial Outstanding Pool Balance, the borrower may obtain releases of (i) an easement parcel and (ii) an unimproved release parcel upon satisfaction of certain conditions set forth in the loan documents, including (a) that the borrower provide at least 20 days’ prior written notice of such release, (b) the satisfaction of customary REMIC requirements, and (c) that the easement parcel or the unimproved release parcel, as applicable, is severed or legally subdivided, as applicable, from the Mortgaged Property and on a separate tax lot from the Mortgaged Property. The lender did not consider either parcel in connection with underwriting the related Mortgage Loan. |
Escrows. Certain (but not all) of the Mortgage Loans provide for monthly escrows to cover property taxes, insurance premiums, ground lease payments and ongoing capital replacements. For information regarding certain escrows, see Annex A-1 to this free writing prospectus. In general, no escrow for real estate taxes, ground rents or insurance premiums would be required for any portion of a Mortgaged Property to the extent that a tenant or ground tenant has agreed to pay the real estate taxes and (if applicable) ground rents on, and either self-insure or maintain insurance coverage with respect to, the related Mortgaged Property. In addition, in certain cases such escrows are not required to be paid by the borrower, provided the borrower satisfies certain conditions and/or is not in default under the related Mortgage Loan Documents. Additionally, in certain cases, the borrower may be permitted to provide a letter of credit in lieu of funding an escrow.
Other Financing. The applicable Mortgage Loan Sellers have informed the Depositor that they are aware of the following existing or future permitted indebtedness secured by a Mortgaged Property that also secures a Mortgage Loan:
· | In the case of the mortgaged property identified on Annex A-1 to this free writing prospectus as 11 Madison Avenue, which secures a Mortgage Loan a representing approximately 7.5% of the Initial Outstanding Pool Balance, the related Mortgaged Property also secures the 11 Madison Avenue Pari Passu Companion Loans and the 11 Madison Avenue Subordinate Companion Loans. See “Description of the Mortgage Pool—Loan Combinations—The 11 Madison Avenue Loan Combination” in this free writing prospectus. |
· | In the case of the mortgaged property identified on Annex A-1 to this free writing prospectus as NMS Los Angeles Multifamily Portfolio, which secures a Mortgage Loan representing approximately 7.0% of the Initial Outstanding Pool Balance, the related Mortgaged Property also secures the NMS Los Angeles Multifamily Portfolio Companion Loans. See “Description of the Mortgage Pool—Loan Combinations—The NMS Los Angeles Multifamily Portfolio Loan Combination” in this free writing prospectus. |
The Mortgage Loans generally prohibit the related borrower from incurring secured or unsecured indebtedness, other than trade payables and other debt incurred in the ordinary course of business, including for furniture, fixtures and equipment; however, certain Mortgage Loans may permit unsecured indebtedness.
The Mortgage Loan Documents generally prohibit the pledge or transfer of the related Mortgaged Property or the controlling ownership interests in the related borrower above certain percentage thresholds without lender consent (which, in some cases, may not be unreasonably withheld), other than certain specified transfers, including but not limited to:
· | transfers related to family and estate planning, |
· | transfers related to the death or physical or mental disability of an equity holder, |
· | transfers of a passive interest or less than a controlling interest in the borrower, |
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· | transfers to borrower affiliates or to other existing members, partners, shareholders or other equity holders in the borrower and their respective affiliates and/or family members, as applicable, or between holders of tenant-in-common interests in the Mortgaged Property, |
· | transfers in connection with mergers, consolidations and similar transactions involving affiliated companies, |
· | transfers (including mergers, consolidations and similar transactions) involving publicly traded entities, |
· | transfers of stock listed on a nationally recognized stock exchange, |
· | transfers among affiliated borrowers with respect to any multi-property Mortgage Loans, |
· | transfers which consolidate tenant-in-common ownership into one or more surviving tenant-in-common borrowers, |
· | transfers of tenant-in-common interests to third parties, subject in some cases to lender approval if such transfers are in excess of specified thresholds, |
· | transfers to a pre-approved person or entity or an entity controlled by a pre-approved person or entity, |
· | transfers to any person or entity so long as certain specified persons or entities, or persons or entities satisfying specified criteria, remain in control or acquire control of the day-to-day operations of the borrower, |
· | transfers to certain qualifying entities, which entities generally are required to satisfy, or be under the control of other entities that satisfy, specified criteria, such as net worth and/or experience related tests and satisfy conditions specified in the Mortgage Loan Documents but for which lender consent may not be required, |
· | transfers related to the foreclosure of existing or permitted mezzanine debt, |
· | transfers as to which a No Downgrade Confirmation is obtained, or |
· | other transfers customarily acceptable to prudent commercial, multifamily and manufactured housing community mortgage lending institutions with respect to comparable property and transfers of a similar nature to the foregoing meeting the requirements of the Mortgage Loan Documents. |
For certain permitted transfers that would not trigger the due-on-sale provision in the related Mortgage Loan Documents, see Annex G to this free writing prospectus.
Also, to the extent Mortgage Loan Documents permit mezzanine debt or to the extent a non-controlling equity holder in the borrower is entitled to a preferred return on its investment, under certain circumstances, a transfer of a controlling interest in the borrower to the holder of the mezzanine debt or the preferred equity holder may occur without lender consent and such transfer would not trigger the “due-on-sale” provision in the related Mortgage Loan Documents.
Certain Mortgage Loans also permit the borrower’s parent to pledge direct or indirect ownership interests in the borrower in connection with corporate financing arrangements, provided that such financing is also secured by a significant number of assets other than such ownership interests in the borrower.
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The Mortgage Loan Sellers have notified the Depositor that they are aware of the following borrower entities (or the direct parent) in which another entity is the holder of a preferred equity investment in the borrower (or direct parent) or where such a preferred equity investment is permitted in the future.
· | In the case of the Mortgaged Properties identified on Annex A-1 to this prospectus supplement as Greater Boston Industrial Portfolio I, which secures the Mortgage Loan representing approximately 1.7% of the Initial Outstanding Pool Balance, the borrowers (and/or its direct and indirect equity owners) have a right to accept a future preferred equity investment in connection with a transfer of the Mortgaged Properties and assumption of the related Mortgage Loan,provided, among other things, (i) no Mortgage Loan event of default has occurred and is continuing, (ii) based on the combined Mortgage Loan and preferred equity balances (A) the loan-to value ratio (based on the fair market value of the Mortgaged Properties) is less than or equal to 74%, (B) the amortizing net cash flow debt service coverage ratio for the twelve month period ending with the most recently completed calendar month (based on annual payments required under the Mortgage Loan and the preferred equity investment for the next 12 months) is not less than 1.30x and (C) the debt yield (based on the net cash flow for the twelve month period ending with the most recently completed calendar month) is not less than 8.5% and (iii) each applicable Rating Agency has provided a No Downgrade Confirmation. |
Preferred equity often provides for a higher rate of return to be paid to its holders and functions in some respects similarly to mezzanine indebtedness, including (i) reducing a principal’s economic stake in the related Mortgaged Property, (ii) reducing cash flow on the borrower’s Mortgaged Property after the payment of debt service and after payments on the preferred equity, (iii) potentially increasing the likelihood that the borrower will permit the value or income producing potential of a Mortgaged Property to fall and (iv) potentially increasing the risk that a borrower will default on the Mortgage Loan.
The Mortgage Loan Sellers have notified the Depositor that they are aware of the following existing mezzanine debt:
Mortgage Loan | Mortgage Loan Cut-off Date Balance | % of Initial Outstanding Pool | Mezzanine Debt Cut-off Date | Annual Interest Rate on Mezzanine Loan | Co- | Inter- | Total Debt Cut-Off | Total Debt U/W NCF DSCR | Total Debt U/W NOI Debt Yield | |||||||||
11 Madison Avenue(1) | $70,000,000 | 7.5% | $325,000,000 | 4.7577% | Yes | Yes | 59.6%(2) | 1.97x(2) | 7.8%(2) | |||||||||
Atlanta Multifamily Portfolio(3) | $45,000,000 | 4.8% | $5,000,000 | 12.500% | Yes | Yes | 72.2% | 1.04x | 7.5% | |||||||||
Midwest Shopping Center Portfolio(4) | $38,152,658 | 4.1% | $5,500,000 | 11.0000% | Yes | Yes | 77.1% | 1.21x | 9.0% | |||||||||
CSRA Food Lion Portfolio II(5) | $6,500,000 | 0.7% | $780,000 | 14.0000% | Yes | Yes | 76.0% | 1.10x | 9.4% | |||||||||
(1) | Two mezzanine loans were funded concurrently with the closing of the 11 Madison Avenue Mortgage Loan. A $150,000,000 Mezzanine A Loan, which is coterminous with the related Mortgage Loan, accrues interest at a fixedper annum rate equal to 4.6500% and is currently held by Credos Eleven Madison LLC (a third party not related to GACC), and a $175,000,000 Mezzanine B Loan, which is coterminous with the related Mortgage Loan, accrues interest at a fixedper annum rate equal to 4.8500% and is currently held by Teachers Insurance and Annuity Association of America (a third party not related to GACC). The annual interest rate on the mezzanine loans reported is a blended rate |
(2) | Calculated based on total debt including the 11 Madison AvenuePari Passu Companion Loans and 11 Madison Avenue Subordinate Companion Loans. |
(3) | The related mezzanine loan is currently held by RMezz Atlanta 2-Pack, LLC (a third party not related to GACC). |
(4) | The related mezzanine loan is currently held by REFH SR Mezz LLC (a third party not related to GACC). |
(5) | The related mezzanine loan is currently held by Terra Secured Income Fund 2, LLC (a third party not related to CCRE Lending). |
Each mezzanine loan related to the above described Mortgage Loans is generally subject to an intercreditor agreement between the holder of the related mezzanine loan and the related lender under the related Mortgage Loan that, in each case, sets forth the relative rights and priorities between the holders of the related Mortgage Loan and the related mezzanine loan. The intercreditor agreements generally provide, among other things, that (a) the related mezzanine loan lender will have certain rights to receive notice of and cure defaults under the related Mortgage Loan prior to any acceleration or enforcement of the related Mortgage Loan, (b) upon the occurrence of an event of default under the related Mortgage Loan beyond any applicable notice and cure period provided for in the applicable intercreditor agreement, the related Mortgage Loan lender will be entitled to receive all payments that are due or that will become due under the related Mortgage Loan from funds that are derived from the
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mortgaged property before the related mezzanine lender will be permitted to receive payments under the related mezzanine loan from funds that are derived from the mortgaged property (however, in some cases, the mezzanine loan may be prepaid while the related Mortgage Loan remains outstanding and/or the mezzanine lender will be permitted to receive payments from funds distributed to the related mezzanine loan borrower to the extent such distribution was not in violation of the related Mortgage Loan Documents), (c) the related mezzanine loan lender may amend or modify the related mezzanine loan in certain respects without the consent of the related Mortgage Loan lender, (d) upon the occurrence of an event of default under the related mezzanine loan documents, subject to certain conditions, the related mezzanine loan lender may foreclose upon the pledged equity interests in the related Mortgage Loan borrower, which could result in a change of control with respect to the related Mortgage Loan borrower and a change in the management of the related Mortgaged Properties, (e) if an event of default occurs under the related Mortgage Loan, the related Mortgage Loan is accelerated, an enforcement action has been commenced and is continuing under the related Mortgage Loan, a bankruptcy proceeding has been commenced against the Mortgage Loan borrower, or the related Mortgage Loan becomes a specially serviced loan as a result of certain events of default under the related Mortgage Loan, then the related mezzanine loan lender has the right to purchase the related Mortgage Loan, in whole but not in part, for a price generally equal to the outstanding principal balance thereof, together with all accrued interest and certain other amounts due thereon, plus any protective advances made by the related Mortgage Loan lender or its servicer and any interest thereon or on any monthly debt service advances, but generally excluding any late charges, default interest, exit fees, spread maintenance or yield maintenance charges and prepayment premiums, and (f) an event of default under the Mortgage Loan will trigger an event of default under the mezzanine loan. The holder of each mezzanine loan also has consent rights over certain modifications of the related Mortgage Loan prior to an event of default under the related Mortgage Loan and certain limited consent rights over modifications of the related Mortgage Loan entered into in connection with a workout following an event of default under the related Mortgage Loan. The holder of each mezzanine loan may also have certain consent rights with respect to annual budgets, leases and alterations with respect to the related Mortgaged Property, the replacement of the property manager for the Mortgaged Property transfers and pledges of the Mortgage Loan to non-qualified entities. In addition, the Mortgage Loan lender may be prohibited under the intercreditor agreement from accepting a deed-in-lieu of foreclosure from the borrower until it has provided the mezzanine lender with prior written notice of such intention and given the mezzanine lender the opportunity to purchase the Mortgage Loan for a specified period of time prior to acceptance of such deed at the purchase price set forth in the immediately precedingclause (e). Upon completion of a foreclosure of a mezzanine loan, the non-recourse carveout guarantor for the related Mortgage Loan may be released from liability under its related guaranty.
With respect to the Mortgage Loan listed in the chart below, the related Mortgage Loan Seller has informed us that the direct and/or indirect equity owners of the borrower are permitted to pledge their interest in the related borrower as security for a mezzanine loan, subject to the satisfaction of conditions contained in the related Mortgage Loan Documents, including, among other things, a combined maximum loan-to-value ratio, a combined minimum debt service coverage ratio and minimum combined debt yield as listed below:
Mortgage Loan | Cut-off Date Balance | % of Initial Outstanding Pool Balance | Intercreditor Agreement Required | Combined Minimum DSCR | Combined Maximum | Combined Debt Yield | ||||||
Bonita Springs Self Storage | $3,200,000 | 0.3% | Yes | 1.15x | 75.0% | 7.50% |
The specific rights of the related mezzanine lender with respect to any such future mezzanine loan will be specified in the related intercreditor agreement and may include rights substantially similar to the cure and repurchase rights described above. The direct and/or indirect owners of a borrower under a Mortgage Loan are also generally permitted to pledge their interest in such borrower as security for a mezzanine loan (including in connection with a credit facility) in circumstances where the ultimate transfer of such interest to the mezzanine lender would be a permitted transfer under the related Mortgage Loan Documents. Except as disclosed under this “—Other Financing” subsection, we are not aware of any other mezzanine debt affecting borrowers under the Mortgage Loans that we intend to include in the Issuing Entity.
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Certain risks relating to additional debt are described in “Risk Factors—Risks Related to the Mortgage Loans—Risks Related to Additional Debt” in this free writing prospectus.
Performance Escrows and Letters of Credit. In connection with the origination of certain Mortgage Loans, the related borrower was required to escrow funds or post a letter of credit related to obtaining certain performance objectives, including reaching targeted debt service coverage or occupancy-related levels. The related Mortgage Loan Documents generally provide that such funds will be released to the related borrower upon the satisfaction of certain conditions and the Special Servicer will in some cases be entitled to make the determination or review the determination by the Master Servicer that such conditions have or have not been satisfied. Additionally, such Mortgage Loans may permit that such funds be applied to reduce the principal balance of the related Mortgage Loan if such conditions are not met or to fund shortfalls in debt service. This will have the same effect on the Certificates as a partial prepayment of such Mortgage Loan. For additional information, see Annex A-1 to this free writing prospectus. See also “Risk Factors—Risks Related to the Offered Certificates—Risks Related to Prepayments and Repurchases of Mortgage Loans” in this free writing prospectus. If such conditions are not satisfied and the mortgagee has the discretion to retain the cash or letter of credit as additional collateral, generally, the Master Servicer will be directed in the Pooling and Servicing Agreement to hold the escrows, letters of credit or proceeds of such letters of credit as additional collateral and not use such funds to reduce the principal balance of the related Mortgage Loan, unless holding such funds would otherwise be inconsistent with the Servicing Standard. If such funds are applied to reduce the principal balance of the Mortgage Loan, the Issuing Entity would experience an early prepayment that may adversely affect the yield to maturity on your Certificates. In some cases, the related Mortgage Loan Documents do not require payment of a yield maintenance charge or prepayment premium in connection with such prepayment. In addition, certain other Mortgage Loans have performance escrows or letters of credit, however, these Mortgage Loans do not contain conditions allowing the lender to use such funds to reduce the principal balance of the related Mortgage Loan unless there is an event of default.
“Due-on-Sale” and“Due-on-Encumbrance” Provisions. The Mortgage Loans generally contain “due-on-sale” and “due-on-encumbrance” clauses that, in each case, generally permit the holder of the Mortgage Loan to accelerate the maturity of the Mortgage Loan if the borrower sells or otherwise transfers or encumbers the related Mortgaged Property (other than as permitted in the Mortgage Loan Documents) without the consent of the lender (which, in some cases, may not be unreasonably withheld). See “—Other Financing” above for a discussion of certain permitted transfers and encumbrances of a Mortgaged Property or an interest in a borrower. The Pooling and Servicing Agreement requires the Special Servicer (other than with respect to any Non-Serviced Mortgage Loan) (but subject to the rights of the Directing Holder and after consultation with the Operating Advisor to the extent described under “The Pooling and Servicing Agreement—The Operating Advisor” in this free writing prospectus), to determine, in a manner consistent with the Servicing Standard, whether to exercise any right the lender may have under any such clause to accelerate payment of the related Mortgage Loan upon, or to withhold its consent to, any transfer or further encumbrance of the related Mortgaged Property. Certain of the Mortgage Loans provide that the lender may condition an assumption of the Mortgage Loan on the receipt of an assumption fee, which in some cases may be up to one percent (or larger) of the then unpaid principal balance of the applicable Note, in addition to the payment of all costs and expenses incurred in connection with such assumption. The Depositor makes no representation as to the enforceability of any due-on-sale or due-on-encumbrance provision in any Mortgage Loan.
Mortgage Loans Subject to Government Assistance Programs. Certain of the Mortgage Loans may be secured now or in the future by Mortgaged Properties that are eligible for and have received low income housing tax credits pursuant to Code Section 42 in respect of various units within the Mortgaged Property or have tenants that rely on rent subsidies under various government-funded programs, including the Section 8 Tenant-Based Assistance Rental Certificate Program of the U.S. Department of Housing and Urban Development. For example:
· | With respect to the Mortgage Loan secured by the portfolio of Mortgaged Properties identified on Annex A-1 to this free writing prospectus as NMS Los Angeles Multifamily Portfolio, representing approximately 7.0% of the Outstanding Pool Balance, 26 units at the Mortgaged Properties |
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identified on Annex A-1 to this free writing prospectus as Luxe at 1759, NMS at Northridge and NMS at Warner are leased to tenants at below market rates, which tenants may pay a portion of rent with Section 8 vouchers. With respect to 20 of those units, the related Mortgaged Properties NMS at Northridge and NMS at Warner are not subject to affordable-housing deed restrictions and, upon such units being vacated by any current tenants, such units may be leased at market rates. The appraiser considered the affordable housing deed restrictions described above. In addition, with respect to the Mortgaged Property identified on Annex A-1 to this free writing prospectus as The Luxe at 1548, this mortgaged property is subject to a springing deed restriction (the “Springing Deed Restriction”) by the City of Santa Monica to provide 19 units of affordable housing. The loan sponsors agreed with the City to build a multifamily building at a nearby location (the “New Building”) and provide the affordable housing units at that property (which property will not be collateral for the NMS Multifamily Portfolio Loan). In the event the New Building provides the required affordable housing units, the City is required to release the deed restriction. In the event the loan sponsors have not made affordable housing units available at the New Building, the City may require that the borrower lease 19 units at the Mortgaged Property identified on Annex A-1 as Luxe at 1548 to low income tenants as units become vacant. The appraiser did not consider the Springing Deed Restriction in the August 14, 2015 appraisal for the Mortgaged Property. However, the borrowers delivered a $7.0 million evergreen letter of credit to lender as additional collateral for the NMS Los Angeles Multifamily Loan and the loan sponsors provided a personal guarantee with respect to the last $7.0 million of principal repaid under the NMS Los Angeles Multifamily Loan. The letter of credit and the personal guarantee will be released upon a release of the deed restriction encumbering the Mortgaged Property identified on Annex A-1 as Luxe at 1548 Mortgaged Property or in the event this Mortgaged Property is released from the lien of the security instrument in accordance with the Mortgage Loan documents. Pursuant to the August 14, 2015 appraisal, the appraised value for this Mortgaged Property was $37,100,000. On October 8, 2015, the appraiser provided a supplemental appraisal for this Mortgaged Property that considered the appraised value in the event the City requires the borrower to lease 19 units at this Mortgaged Property to low income tenants. The supplemental appraisal included a hypothetical value for this Mortgaged Property of $31,100,000 in the event the 19 units are subject to Section 8 restrictions and $26,330,000 in the event the 19 units are subject to HUD restrictions. |
· | With respect to the Mortgaged Property identified on Annex A-1 to this free writing prospectus as The Drake, which secures a Mortgage Loan representing approximately 4.7% of the Initial Pool Balance as of the cut-off date, the Mortgaged Property is subject to an inclusionary zoning covenant in favor of the Department of Housing and Community Development of the District of Columbia, and as such, 17 of the 218 units at the Mortgaged Property must be leased to families with income levels at or below 80% of the area median income. |
· | With respect to the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Lancaster Towers, which secures a Mortgage Loan representing approximately 0.9% of the outstanding pool balance as of the cut-off date, the Mortgaged Property is subject to a Section 8 Housing Assistance Payment contract (the “HAP Contract”) with the U.S. Department of Housing and Urban Development that requires the Mortgaged Property to operate as an age restricted facility for tenants over the age of 55 or individuals with qualifying disabilities. The HAP Contract expires on December 29, 2015, but the borrower has received approval for a five-year extension retroactive to December 2014 with a new expiration date of December 2019. |
· | With respect to the Mortgaged Property identified on Annex A-1 to this free writing prospectus as The Meadows Apartments, which secures a Mortgage Loan representing approximately 0.6% of the Initial Pool Balance, the Mortgaged Property obtained and received low income housing tax credits pursuant to Section 42 of the Code in connection with its development. Subsequently, the regulatory agreement governing the low income housing tax credits was terminated, but for a period of three years, ending in 2018, no low income tenant may be evicted except for good cause, and the gross rents related to the low income apartment units may not be increased |
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beyond the amounts permitted pursuant to Section 42 of the Code. Additionally, 29 units at the Mortgaged Properties are affordable-housing units under Section 8 vouchers. |
The Depositor gives no assurance that such programs will be continued in their present form or that the level of assistance provided will be sufficient to generate enough revenues for the related borrower to meet its obligations under the related Mortgage Loan For additional information, see “Risk Factors—Risks Related to the Mortgage Loans—Multifamily Properties Have Special Risks” in this free writing prospectus.
Delinquency.As of the Cut-off Date, none of the Mortgage Loans were thirty (30) days or more delinquent, or had been thirty (30) days or more delinquent during the twelve (12) calendar months preceding the Cut-off Date.
Borrower Concentrations.Eight (8) groups of Mortgage Loans has related borrowers that are affiliated with one another through partial or complete direct or indirect common ownership, with the top 3 groups representing approximately 4.6%, 2.8% and 2.2% of the Initial Outstanding Pool Balance. See “Risk Factors—Risks Related to the Mortgage Loans—Risks Related to Borrower Concentration” in this free writing prospectus.
Single-Tenant Mortgaged Properties. Six (6) Mortgaged Properties, which secure Mortgage Loans representing in the aggregate approximately 3.1% of the Initial Outstanding Pool Balance by Allocated Loan Amount (excluding any leased fee property as to which the land, but not the improvements (not collateral), are ground leased to a single tenant), are 100.0% leased to a single tenant. Each of these Mortgaged Properties is generally subject to a single space lease, which in some cases has a primary lease term that expires on or after the maturity date of the related Mortgage Loan, but in other cases does not. See Annex A-1 to this free writing prospectus for Mortgage Loan maturity dates and the lease expiration dates. In addition, certain of these leases may have termination options that are prior to the maturity date of the related Mortgage Loan.
Geographic Location. The Mortgaged Properties are located throughout 28 states and the District of Columbia, with the largest concentration by Initial Outstanding Pool Balance located in Texas. See “Mortgaged Properties by State and/or Location” in Annex A-2 to this free writing prospectus “Summary—The Mortgage Pool—Characteristics of The Mortgage Pool—Property Locations” in this free writing prospectus for a table setting forth information about the jurisdictions with the greatest concentrations of Mortgaged Properties.
Loan Purpose. Thirty-four (34) of the Mortgage Loans, representing in the aggregate approximately 60.0% of the Initial Outstanding Pool Balance, were originated in connection with the borrower’s refinancing of a previous mortgage loan. Twenty-six (26) of the Mortgage Loans, representing approximately 34.8% of the Initial Outstanding Pool Balance, were originated in connection with the borrower’s acquisition of the related Mortgaged Property. Five (5) of the Mortgage Loans, representing approximately 5.2% of the Initial Outstanding Pool Balance, were originated in connection with the recapitalization of the related sponsor. In several cases, the refinancing of a Mortgaged Property with a Mortgage Loan resulted in cash being paid to the related borrower to the extent that the related Mortgage Loan exceeded the amount of the prior loan, refinancing costs and required reserves and escrows.
Properties Underwritten Based on Projections. With respect to5 Mortgaged Properties, which secure Mortgage Loans representing in the aggregate approximately 8.4% of the Initial Outstanding Pool Balance (by Allocated Loan Amount), such Mortgaged Properties (i) were constructed or the subject of a major renovation that was completed within 12 calendar months prior to the Cut-off Date and therefore the related Mortgaged Property has no prior operating history, (ii) have a borrower or an affiliate under the related Mortgage Loan that acquired the related Mortgaged Property within 12 calendar months prior to the Cut-off Date and such borrower or affiliate was unable to provide the related Mortgage Loan Seller with historical financial information for such acquired Mortgaged Property or (iii) are single tenant properties subject to triple-net leases with the related tenant where the related borrower did not provide the related Mortgage Loan Seller with historical financial information for the related Mortgaged Property.
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Modified Loans. As of the Cut-off Date, noneof the Mortgage Loans were modified due to a delinquency or impending delinquency.
Refinanced Loans. One (1) Mortgage Loan, secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as 4001 North Lincoln, representing approximately 0.3% of the Initial Outstanding Pool Balance, refinanced a prior loan that was in maturity default at the time of refinancing.
Delaware Statutory Trusts May Hinder Recovery
With respect to the Mortgage Loans identified on Annex A-1 to this free writing prospectus as University Center, Rockford Crossing, CSRA Food Lion Portfolio II, Fresenius Medical Care Lake City and Fresenius Medical Care Greece, representing in the aggregate 3.6% of the initial outstanding pool balance, the related borrower is a Delaware statutory trust. A Delaware statutory trust is restricted in its ability to actively operate a property. Accordingly, the related borrower has master leased the property to a newly formed, single-purpose entity that is wholly owned by the same entity that owns the signatory trustee for the related borrower. The master lease has been collaterally assigned to the lender and has been subordinated to the related mortgage loan documents. See “Risk Factors—Risks Related to the Mortgage Loans—Delaware Statutory Trusts May Hinder Recovery” in this free writing prospectus.
Changes in Mortgage Pool Characteristics
The description in this free writing prospectus, including Annex A-1 and Annex A-2 to this free writing prospectus, of the Mortgage Pool and the Mortgaged Properties is based upon the Mortgage Pool as expected to be constituted at the close of business on the Cut-off Date, as adjusted for the scheduled principal payments due on the Mortgage Loans on or before the Cut-off Date. Prior to the issuance of the Certificates, a Mortgage Loan may be removed from inclusion in the securitization transaction described in this free writing prospectus if the Depositor deems such removal necessary or appropriate or if it is prepaid. This may cause the range of Mortgage Rates and maturities as well as the other characteristics of the Mortgage Loans to vary from those described in this free writing prospectus.
A Current Report on Form 8-K (the “Form 8-K”) will be available to purchasers of the Offered Certificates and will be filed by the Depositor, together with the Pooling and Servicing Agreement, with the SEC. In the event Mortgage Loans are removed from the Mortgage Pool as set forth in the preceding paragraph, such removal will be noted in the Form 8-K, and, if such removal or any other event results in any material pool characteristic of the actual Mortgage Pool differing by 5% or more (other than by reason of the Mortgage Loans converting into cash in accordance with their terms) from the description of the Mortgage Pool in the final prospectus supplement filed with the SEC, such Form 8-K will be filed no later than four business days after the initial issuance of the Offered Certificates. Such Form 8-K will be available to purchasers and potential purchasers of the Offered Certificates.
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DESCRIPTION OF THE OFFERED CERTIFICATES
General
The Certificates will be issued pursuant to the Pooling and Servicing Agreement and will consist of the following classes (each, a “Class”) to be designated as (i) the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class X-A, Class X-B, Class X-C, Class X-D, Class X-E, Class X-F, Class A-M, Class B, Class C, Class D, Class E, Class F, Class G and Class H Certificates (collectively, the “Regular Certificates”), (ii) the Class V Certificates, and (iii) the Class R and Class LR Certificates (collectively, the “Residual Certificates” and, together with the Regular Certificates and the Class V Certificates, the “Certificates”). Only the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class X-A, Class A-M, Class B and Class C Certificates (the “Offered Certificates”) are offered hereby. The Class X-B, Class X-C, Class X-D, Class X-E, Class X-F, Class D, Class E, Class F, Class G, Class H, Class V, Class R and Class LR Certificates (the “Private Certificates”) are not offered hereby.
The Certificates represent in the aggregate the entire beneficial ownership interest in the Issuing Entity consisting of, among other things: (i) the Mortgage Loans and all payments under and proceeds of the Mortgage Loans due after the Cut-off Date; (ii) the Issuing Entity’s interest in any Mortgaged Property acquired on behalf of the Issuing Entity and, if applicable, the holders of the Serviced Companion Loans through foreclosure, deed in lieu of foreclosure or otherwise (upon acquisition, an “REO Property” and any such property serviced by the Special Servicer pursuant to the Pooling and Servicing Agreement, a “Serviced REO Property”); (iii) the Collection Account (or any custodial account in respect of a Serviced Companion Loan), the Distribution Account, the Excess Liquidation Proceeds Account, the Interest Reserve Account and any account established in connection with REO Properties (an “REO Account”); (iv) all insurance policies with respect to the Mortgage Loans and the Mortgaged Properties, to the extent of the Issuing Entity’s interests therein; (v) the Depositor’s rights and remedies under the Mortgage Loan Purchase Agreements relating to document delivery requirements with respect to the Mortgage Loans and the representations and warranties of the related Mortgage Loan Seller regarding its Mortgage Loans; and (vi) all of the lender’s right, title and interest in the Reserve Accounts and lock box accounts, in each case, to the extent of the Issuing Entity’s interests therein.
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Upon initial issuance, the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class A-M, Class B, Class C, Class D, Class E, Class F, Class G and Class H Certificates (collectively, the “Sequential Pay Certificates”, and each, a “Sequential Pay Certificate”) will have the following aggregate principal balances (each, a “Certificate Balance”), in each case, subject to a variance of plus or minus 5.0%:
Class | Initial Certificate | Approximate Percentage of Initial Certificate Balance | Approximate Initial Credit Support | ||||||||
Offered Certificates | |||||||||||
A-1 | $ | 38,731,000 | 4.157% | 30.000% | (1) | ||||||
A-2 | $ | 72,542,000 | 7.787% | 30.000% | (1) | ||||||
A-SB | $ | 62,544,000 | 6.713% | 30.000% | (1) | ||||||
A-3 | $ | 215,000,000 | 23.078% | 30.000% | (1) | ||||||
A-4 | $ | 263,315,000 | 28.264% | 30.000% | (1) | ||||||
A-M | $ | 53,568,000 | 5.750% | 24.250% | |||||||
B | $ | 54,732,000 | 5.875% | 18.375% | |||||||
C | $ | 43,088,000 | 4.625% | 13.750% | |||||||
Non-Offered Certificates(2) | |||||||||||
D | $ | 51,238,000 | 5.500% | 8.250% | |||||||
E | $ | 24,455,000 | 2.625% | 5.625% | |||||||
F | $ | 9,317,000 | 1.000% | 4.625% | |||||||
G | $ | 13,974,000 | 1.500% | 3.125% | |||||||
H | $ | 29,113,392 | 3.125% | 0.000% |
(1) | Represents the approximate initial credit support for the Class A-1, Class A-2, Class A-SB, Class A-3 and Class A-4 Certificates, in the aggregate. |
(2) | The Classes of Certificates set forth below (the “Non-Offered Certificates”) in the table are not offered by this free writing prospectus. |
The Class X-A, Class X-B, Class X-C, Class X-D, Class X-E and Class X-F Certificates will each have a notional balance (the “Notional Balance”), which is used solely for the purpose of determining the amount of interest to be distributed on such Certificates and does not represent the right to receive any distributions of principal.
The Notional Balance of the Class X-A Certificates will equal the aggregate Certificate Balance of each of the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4 and Class A-M Certificates outstanding from time to time. In general, the Certificate Balance of each such Class of Certificates will constitute a separate component of the Notional Balance of the Class X-A Certificates. The total initial Notional Balance of the Class X-A Certificates will be approximately $705,700,000.
The Notional Balance of the Class X-B Certificates will equal the aggregate Certificate Balance of the Class B and Class C Certificates outstanding from time to time. In general, the Certificate Balance of each such Class of Certificates will constitute a separate component of the Notional Balance of the Class X-B Certificates. The total initial Notional Balance of the Class X-B Certificates will be approximately $97,820,000.
The Notional Balance of the Class X-C Certificates will equal the Certificate Balance of the Class D Certificates outstanding from time to time. In general, the Certificate Balance of such Class of Certificates will constitute the component of the Notional Balance of the Class X-C Certificates. The total initial Notional Balance of the Class X-C Certificates will be approximately $51,238,000.
The Notional Balance of the Class X-D Certificates will equal the aggregate Certificate Balance of the Class E and Class F Certificates outstanding from time to time. In general, the Certificate Balance of each such Class of Certificates will constitute a separate component of the Notional Balance of the Class X-D Certificates. The total initial Notional Balance of the Class X-D Certificates will be approximately $33,772,000.
The Notional Balance of the Class X-E Certificates will equal the Certificate Balances of the Class G Certificates outstanding from time to time. In general, the Certificate Balance of such Class of Certificates
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will constitute the component of the Notional Balance of the Class X-E Certificates. The total initial Notional Balance of the Class X-E Certificates will be approximately $13,974,000.
The Notional Balance of the Class X-F Certificates will equal the Certificate Balance of the Class H Certificates outstanding from time to time. In general, the Certificate Balance of such Class of Certificates will constitute the component of the Notional Balance of the Class X-F Certificates. The total initial Notional Balance of the Class X-F Certificates will be approximately $29,113,392.
The Class V, Class R and Class LR Certificates will not have Certificate Balances or Notional Balances.
The Certificate Balance of any Class of Sequential Pay Certificates outstanding at any time represents the maximum amount which the holders thereof are entitled to receive as distributions allocable to principal from the cash flow on the Mortgage Loans in the Mortgage Pool and the other assets in the Mortgage Pool;provided,however, that in the event that Realized Losses previously allocated to a Class of Sequential Pay Certificates in reduction of the Certificate Balance thereof are recovered subsequent to the reduction of the Certificate Balance thereof to zero, such Class of Sequential Pay Certificates may receive distributions in respect of such recoveries in accordance with the priorities set forth under “—Distributions—Payment Priorities” below.
The respective Certificate Balance of each Class of Sequential Pay Certificates will in each case be reduced by amounts actually distributed thereon that are allocable to principal and by any Realized Losses allocated to such Class of Certificates.
The Notional Balance of the Class X-A Certificates will be reduced to the extent of all reductions in the aggregate Certificate Balance of the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4 and Class A-M Certificates. Similarly, the Notional Balance of the Class X-B Certificates will be reduced to the extent of all reductions in the aggregate Certificate Balance of the Class B and Class C Certificates, the Notional Balance of the Class X-C Certificates will be reduced to the extent of all reductions in the Certificate Balance of the Class D Certificates, the Notional Balance of the Class X-D Certificates will be reduced to the extent of all reductions in the aggregate Certificate Balance of the Class E and Class F Certificates, the Notional Balance of the Class X-E Certificates will be reduced to the extent of all reductions in the Certificate Balance of the Class G Certificates and the Notional Balance of the Class X-F Certificates will be reduced to the extent of all reductions in the Certificate Balance of the Class H Certificates.
Distributions
Method,Timing and Amount.Distributions on the Certificates will be made on the fourth business day following the Determination Date in each month, commencing in November 2015 (each, a “Distribution Date”). All distributions (other than the final distribution on any Certificate) will be made by the Certificate Administrator to the persons in whose names the Certificates are registered at the close of business on the last business day of the calendar month immediately preceding the month in which such Distribution Date occurs (the “Record Date”). Such distributions will be made by wire transfer in immediately available funds to the account specified by the Certificateholder at a bank or other entity having appropriate facilities therefor, if such Certificateholder provides the Paying Agent with wiring instructions no less than five business days prior to the related Record Date, or otherwise by check mailed to such Certificateholder. The final distribution on any Offered Certificates will be made in like manner, but only upon presentment and surrender of such Certificate at the location specified in the notice to the holder of that Certificate of such final distribution. All distributions made with respect to a Class of Certificates on each Distribution Date will be allocatedpro rata among the outstanding Certificates of that Class based on their respective Percentage Interests. The “Percentage Interest” evidenced by any Certificate (other than the Class V, Class R and Class LR Certificates) is equal to the initial Certificate Balance or Notional Balance thereof as of the Closing Date divided by the initial Certificate Balance or Notional Balance of the related Class and with respect to the Class V, Class R and Class LR Certificates is equal to the percentage interest set forth on the face of the Certificate.
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The aggregate distribution to be made with respect to the Regular Certificates on any Distribution Date will equal the Available Funds. The “Available Funds” for any Distribution Date will be the sum of the following amounts (i) all previously undistributed Monthly Payments or other receipts on account of principal and interest on or in respect of the Mortgage Loans (including Unscheduled Payments and Net REO Proceeds, if any, but excluding Excess Liquidation Proceeds) received by or on behalf of the Master Servicer in the Collection Period relating to such Distribution Date; (ii) all P&I Advances made by the Master Servicer or the Trustee, as applicable, in respect of the Mortgage Loans as of such Distribution Date; (iii) all other amounts received by the Master Servicer in such Collection Period and required to be deposited in the Collection Account by the Master Servicer as described in this free writing prospectus under “The Pooling and Servicing Agreement—Accounts”; (iv) without duplication, any late Monthly Payments on or in respect of the Mortgage Loans received after the end of the Collection Period relating to such Distribution Date but prior to the close of business on the business day prior to the Master Servicer Remittance Date; (v) any amounts representing Prepayment Interest Shortfalls remitted by the Master Servicer to the appropriate Collection Account (as described under “—Prepayment Interest Shortfalls” below) and (vi) for the Distribution Date occurring in each March of each calendar year (or February if the final Distribution Date occurs in such month), the Withheld Amounts then on deposit in the Interest Reserve Account as described under “The Pooling and Servicing Agreement—Accounts—Interest Reserve Account” below, but excluding the following (in no order of priority):
(a) all amounts permitted to be used to reimburse the Master Servicer, the Special Servicer or the Trustee, as applicable, for previously unreimbursed Advances and Workout-Delayed Reimbursement Amounts with interest thereon as described in this free writing prospectus under “The Pooling and Servicing Agreement—Advances”;
(b) the aggregate amount of the Master Servicing Fee, the Trustee/Certificate Administrator Fee, Operating Advisor Fee, any Operating Advisor Consulting Fees (to the extent that such fee is actually received from the related borrower), CREFC® License Fee, fees for primary servicing functions and the other servicing compensation (e.g., Net Prepayment Interest Excess, Net Default Interest, late payment fees (to the extent not applied to the reimbursement of interest on Advances and certain expenses, as provided in the Pooling and Servicing Agreement), Workout Fees, Liquidation Fees, assumption fees, Modification Fees, loan service transaction fees, demand fees, beneficiary statement charges and similar fees payable to the Master Servicer and the Special Servicer), Permitted Special Servicer/Affiliate Fees and the Special Servicing Fee (and other amounts payable to the Special Servicer as described in this free writing prospectus under “The Pooling and Servicing Agreement—Special Servicing—Special Servicing Compensation”), together with interest on Advances to the extent provided in the Pooling and Servicing Agreement, and reinvestment earnings on payments received with respect to the Mortgage Loans (that the Master Servicer or the Special Servicer are entitled to receive as additional servicing compensation), in each case in respect of such Distribution Date;
(c) all amounts representing scheduled Monthly Payments due after the related Due Date;
(d) to the extent permitted by the Pooling and Servicing Agreement, that portion of net liquidation proceeds, net insurance proceeds and net condemnation proceeds with respect to a Mortgage Loan which represents any unpaid Servicing Fee, Servicing Compensation, special servicing compensation, Trustee/Certificate Administrator Fee, CREFC® License Fee and Operating Advisor Fee, to which the Master Servicer, the Special Servicer, any subservicer, the Certificate Administrator, the Operating Advisor, CREFC® and/or the Trustee are entitled;
(e) all amounts representing certain fees and expenses, including indemnity amounts, reimbursable or payable to the Master Servicer, the Special Servicer, the Certificate Administrator (in all of its capacities under the Pooling and Servicing Agreement), the Operating Advisor, CREFC® or the Trustee (in all of its capacities under the Pooling and Servicing Agreement) and other amounts permitted to be retained or withdrawn by the Master Servicer pursuant to the Pooling and Servicing Agreement in respect of various items, including interest on Advances as provided in the Pooling and Servicing Agreement;
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(f) Prepayment Premiums and Yield Maintenance Charges;
(g) any interest or investment income on funds on deposit in the Collection Account or any interest on permitted investments in which such funds may be invested;
(h) all amounts received with respect to each Mortgage Loan previously replaced, purchased or repurchased from the Issuing Entity pursuant to the Pooling and Servicing Agreement or a Mortgage Loan Purchase Agreement during the related Collection Period and subsequent to the date as of which such Mortgage Loan was replaced, purchased or repurchased;
(i) the amount reasonably determined by the Certificate Administrator to be necessary to pay any applicable federal, state or local taxes imposed on the Upper-Tier REMIC or the Lower-Tier REMIC under the circumstances and to the extent described in the Pooling and Servicing Agreement;
(j) with respect to any Distribution Date occurring in each February, and in any January occurring in a year that is not a leap year, in either case, unless such Distribution Date is the final Distribution Date, the Withheld Amounts to be deposited in the Interest Reserve Account in accordance with the Pooling and Servicing Agreement as described in this free writing prospectus under “The Pooling and Servicing Agreement—Accounts”; and
(k) Excess Interest.
The “Monthly Payment” with respect to any Mortgage Loan or Serviced Companion Loan (other than any REO Loan) and any Due Date, is the scheduled monthly payment of principal, if any, and interest at the Mortgage Rate, excluding any balloon payment (but not excluding any constant Monthly Payment due on a Balloon Loan), which is payable by the related borrower on such Due Date under the related Note if applicable, allocable to such Mortgage Loan. The Monthly Payment with respect to an REO Loan for any Distribution Date is the monthly payment that would otherwise have been payable on the related Due Date had the related Note not been discharged, determined as set forth in the Pooling and Servicing Agreement and on the assumption that all other amounts, if any, due thereunder are paid when due.
A “Balloon Loan” is any Mortgage Loan (or Serviced Loan Combination) that requires a payment of principal on the maturity date in excess of its constant Monthly Payment.
“Unscheduled Payments” are all net liquidation proceeds, net insurance proceeds and net condemnation proceeds payable under the Mortgage Loans, the repurchase price of any Mortgage Loan repurchased by a Mortgage Loan Seller due to a breach of a representation or warranty made by it or as a result of a document defect in the mortgage file or the purchase price paid by the parties described in this free writing prospectus under “The Pooling and Servicing Agreement—Optional Termination” and “—Realization Upon Mortgage Loans,” any shortfall amount paid in connection with the substitution of any Mortgage Loan as described in this free writing prospectus under “The Pooling and Servicing Agreement—Representations and Warranties;Repurchase;Substitution,” and any other payments under or with respect to the Mortgage Loans not scheduled to be made, including Principal Prepayments received by the Master Servicer (but excluding Prepayment Premiums and Yield Maintenance Charges, if any) during such Collection Period. See “Yield and Maturity Considerations—Yield Considerations—Certain Relevant Factors” in this free writing prospectus.
“Net REO Proceeds” with respect to any Serviced REO Property are all revenues received by the Special Servicer with respect to such Serviced REO Property, net of any insurance premiums, taxes, assessments and other costs and expenses permitted to be paid therefrom pursuant to the Pooling and Servicing Agreement.
“Principal Prepayments” are payments of principal made by a borrower on a Mortgage Loan or Serviced Companion Loan that are received in advance of the scheduled Due Date for such payments and that are not accompanied by an amount of interest representing the full amount of scheduled interest due on any date or dates in any month or months subsequent to the month of prepayment.
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The “Collection Period” with respect to any Distribution Date and each Mortgage Loan, is the period that begins immediately following the Determination Date in the calendar month preceding the month in which such Distribution Date occurs (or, in the case of the initial Distribution Date, immediately following the Cut-off Date) and ends on the Determination Date in the calendar month in which such Distribution Date occurs.
If, in connection with any Distribution Date, the Certificate Administrator has reported the amount of an anticipated distribution to DTC based on the expected receipt of any monthly payment based on information set forth in a report of the Master Servicer or the Special Servicer, or any other monthly payment, balloon payment or prepayment expected to be or which is paid on the last two business days preceding such Distribution Date, and the related borrower fails to make any such payments at such time, the Certificate Administrator will use commercially reasonable efforts to cause DTC to make the revised distribution on a timely basis on such Distribution Date, but there can be no assurance that DTC can do so. The Trustee, the Certificate Administrator, the Operating Advisor, the Master Servicer and the Special Servicer will not be liable or held responsible for any resulting delay (or claims by DTC resulting therefrom) in the making of such distribution to Certificateholders. In addition, if the Certificate Administrator incurs out-of-pocket expenses, despite reasonable efforts to avoid/mitigate such expenses, as a consequence of a borrower failing to make such payments, the Certificate Administrator will be entitled to reimbursement from the Issuing Entity. Any such reimbursement will constitute an expense of the Issuing Entity.
The “Determination Date” is the sixth day of each calendar month, or if such sixth day is not a business day, then the next business day, commencing in November 2015.
“Net Default Interest” with respect to any Mortgage Loan and any Distribution Date, any Default Interest accrued on such Mortgage Loan during the preceding Collection Period, less amounts required to pay the Master Servicer, the Special Servicer or the Trustee, as applicable, interest on the related Advances on the related Mortgage Loan at the Advance Rate and to reimburse the Issuing Entity for certain additional expenses of the Issuing Entity on the related Mortgage Loan (including Special Servicing Fees, Workout Fees and Liquidation Fees).
“Default Interest” with respect to any Mortgage Loan or Serviced Companion Loan is interest accrued on such Mortgage Loan or Serviced Companion Loan (other than Excess Interest) at the excess of (i) the related Default Rate over (ii) the related Mortgage Rate.
The “Default Rate” with respect to any Mortgage Loan or Serviced Companion Loan is theper annum rate at which interest accrues on such Mortgage Loan or Serviced Companion Loan following any event of default on such Mortgage Loan or Serviced Companion Loan, including a default in the payment of a Monthly Payment or a balloon payment.
Payment Priorities. As used below in describing the priorities of distribution of Available Funds for each Distribution Date, the terms set forth below will have the following meanings:
The “Interest Accrual Amount” with respect to any Distribution Date and any Class of Certificates (other than the Class V, Class R or Class LR Certificates) is an amount equal to interest for the related Interest Accrual Period at the Pass-Through Rate for such Class on the related Certificate Balance or Notional Balance, as applicable, outstanding immediately prior to such Distribution Date minus the amount of any Net Prepayment Interest Shortfall allocated to such Class with respect to such Distribution Date. Calculations of interest due in respect of the Certificates (other than the Class V, Class R or Class LR Certificates) will be made on the basis of a 360-day year consisting of twelve 30-day months.
“Appraisal Reduction Amount” is the amount described under “—Appraisal Reductions” below.
The “Interest Accrual Period” in respect of each Class of Certificates (other than the Class V, Class R or Class LR Certificates) for each Distribution Date is the calendar month immediately preceding the month in which such Distribution Date occurs.
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An “Interest Shortfall” with respect to any Distribution Date for any Class of Certificates (other than the Class V, Class R or Class LR Certificates) is any shortfall in the amount of interest required to be distributed on such Class on such Distribution Date. No interest accrues on Interest Shortfalls.
The “Pass-Through Rate” for any Class of Certificates (other than the Class V, Class R or Class LR Certificates) is theper annum rate at which interest accrues on such Class of Certificates during any Interest Accrual Period. The Pass-Through Rates on the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class A-M, Class B, Class C, Class D, Class E, Class F, Class G and Class H Certificates will equal one of (i) a fixedper annum rate, (ii) the Weighted Average Net Mortgage Pass-Through Rate, (iii) a rate equal to the lesser of a specified pass-through rate and the Weighted Average Net Mortgage Pass-Through Rate, or (iv) the Weighted Average Net Mortgage Pass-Through Rate less a specified rate.
The Pass-Through Rate applicable to the Class X-A Certificates for the initial Distribution Date will equal approximately[ ]%per annum. The Pass-Through Rate applicable to the Class X-A Certificates for each Distribution Date will equal the weighted average of the respective strip rates (the “Class X-A Strip Rates”) at which interest accrues from time to time on the respective components of the total Notional Balance of the Class X-A Certificates outstanding immediately prior to the related Distribution Date (weighted on the basis of the respective balances of such components outstanding immediately prior to such Distribution Date). Each of those components will have a component notional balance that corresponds to the Certificate Balance the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4 and Class A-M Certificates, respectively. The applicable Class X-A Strip Rate with respect to each such component for any Distribution Date will equal the excess, if any, of (a) the Weighted Average Net Mortgage Pass-Through Rate for such Distribution Date, over (b) the Pass-Through Rate for such Distribution Date for the Class of Certificates that comprises such component.
The Pass-Through Rate applicable to the Class X-B Certificates for the initial Distribution Date will equal approximately[ ]% per annum. The Pass-Through Rate applicable to the Class X-B Certificates for each Distribution Date will equal the weighted average of the respective strip rates (the “Class X-B Strip Rates”) at which interest accrues from time to time on the respective component of the total Notional Balance of the Class X-B Certificates outstanding immediately prior to the related Distribution Date (weighted on the basis of the respective balances of such components outstanding immediately prior to such Distribution Date). Each of those components will have a component notional balance that corresponds to the Certificate Balance of the Class B and Class C Certificates, respectively. The applicable Class X-B Strip Rate with respect to each such component for any Distribution Date will equal the excess, if any, of (a) the Weighted Average Net Mortgage Pass-Through Rate for such Distribution Date, over (b) the Pass-Through Rate for such Distribution Date for the Class of Certificates that comprises such component.
The Pass-Through Rate applicable to the Class X-C Certificates for the initial Distribution Date will equal approximately[ ]%per annum. The Pass-Through Rate applicable to the Class X-C Certificates for each Distribution Date will equal the strip rate (the “Class X-C Strip Rate”) at which interest accrues from time to time on the component of the total Notional Balance of the Class X-C Certificates outstanding immediately prior to the related Distribution Date. Such component will have a component notional balance that corresponds to the Certificate Balance of the Class D Certificates. The applicable Class X-C Strip Rate with respect to such component for any Distribution Date will equal the excess, if any, of (a) the Weighted Average Net Mortgage Pass-Through Rate for such Distribution Date, over (b) the Pass-Through Rate for such Distribution Date for the Class of Certificates that comprises such component.
The Pass-Through Rate applicable to the Class X-D Certificates for the initial Distribution Date will equal approximately[ ]%per annum. The Pass-Through Rate applicable to the Class X-D Certificates for each Distribution Date will equal the weighted average of the respective strip rates (the “Class X-D Strip Rates”) at which interest accrues from time to time on the respective component of the total Notional Balance of the Class X-D Certificates outstanding immediately prior to the related Distribution Date (weighted on the basis of the respective balances of such components outstanding immediately prior to such Distribution Date). Each of those components will have a component notional balance that corresponds to the Certificate Balance of the Class E and Class F Certificates, respectively. The
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applicable Class X-D Strip Rate with respect to such component for any Distribution Date will equal the excess, if any, of (a) the Weighted Average Net Mortgage Pass-Through Rate for such Distribution Date, over (b) the Pass-Through Rate for such Distribution Date for the Class of Certificates that comprises such component.
The Pass-Through Rate applicable to the Class X-E Certificates for the initial Distribution Date will equal approximately[ ]%per annum. The Pass-Through Rate applicable to the Class X-E Certificates for each Distribution Date will equal the strip rate (the “Class X-E Strip Rate”) at which interest accrues from time to time on the component of the total Notional Balance of the Class X-E Certificates outstanding immediately prior to the related Distribution Date. Such component will have a component notional balance that corresponds to the Certificate Balance of the Class G Certificates. The applicable Class X-E Strip Rate with respect to such component for any Distribution Date will equal the excess, if any, of (a) the Weighted Average Net Mortgage Pass-Through Rate for such Distribution Date, over (b) the Pass-Through Rate for such Distribution Date for the Class of Certificates that comprises such component.
The Pass-Through Rate applicable to the Class X-F Certificates for the initial Distribution Date will equal approximately[ ]%per annum. The Pass-Through Rate applicable to the Class X-F Certificates for each Distribution Date will equal the strip rate (the “Class X-F Strip Rate”) at which interest accrues from time to time on the component of the total Notional Balance of the Class X-F Certificates outstanding immediately prior to the related Distribution Date. Such component will have a component notional balance that corresponds to the Certificate Balance of the Class H Certificates. The applicable Class X-F Strip Rate with respect to such component for any Distribution Date will equal the excess, if any, of (a) the Weighted Average Net Mortgage Pass-Through Rate for such Distribution Date, over (b) the Pass-Through Rate for such Distribution Date for the Class of Certificates that comprises such component.
Each of the Class V, Class R and Class LR Certificates will not have a Pass-Through Rate. The Class V Certificates will not be entitled to distributions in respect of interest other than Excess Interest.
The “Weighted Average Net Mortgage Pass-Through Rate” for any Distribution Date is aper annum rate equal to a fraction (expressed as a percentage), the numerator of which is the sum for all Mortgage Loans of the product of (i) the Net Mortgage Pass-Through Rate of each such Mortgage Loan as of its respective Due Date in the month preceding the month in which such Distribution Date occurs and (ii) the Stated Principal Balance of each such Mortgage Loan as of the immediately preceding Distribution Date, and the denominator of which is the sum of the Stated Principal Balances of all Mortgage Loans as of the immediately preceding Distribution Date.
The “Net Mortgage Pass-Through Rate” with respect to any Mortgage Loan or Serviced Companion Loan and any Distribution Date is theper annum rate equal to the Mortgage Rate for such Mortgage Loan or Serviced Companion Loan for the related Interest Accrual Period, minus, for any such Mortgage Loan or Serviced Companion Loan, the Administrative Fee Rate; provided,however, that for purposes of calculating the Weighted Average Net Mortgage Pass-Through Rate, the Net Mortgage Pass-Through Rate for any Mortgage Loan or Serviced Companion Loan will be determined without taking into account any modification, waiver or amendment of the terms of the related Mortgage Loan or Serviced Companion Loan, whether agreed to by the Master Servicer or the Special Servicer or resulting from a bankruptcy, insolvency or similar proceeding involving the related borrower or otherwise. For purposes of calculating the Pass-Through Rates on the Certificates (other than the Class V, Class R or Class LR Certificates), the Net Mortgage Pass-Through Rate of each Mortgage Loan or Serviced Companion Loan that accrues interest on an actual/360 basis for any one-month period preceding a related Due Date will be the annualized rate at which interest would have to accrue in respect of the Mortgage Loan or Serviced Companion Loan on the basis of a 360-day year consisting of twelve 30-day months in order to produce the aggregate amount of interest accrued in respect of the Mortgage Loan or Serviced Companion Loan during the one-month period at the related Net Mortgage Pass-Through Rate;provided,however, that with respect to such Mortgage Loans, the Net Mortgage Pass-Through Rate for the one-month period (1) prior to the Distribution Dates in January and February in any year which is not a leap year or in February in any year which is a leap year (unless the related Distribution Date is the final Distribution Date) will be determined exclusive of the Withheld Amounts from that month, and (2) prior to the Due Date in March (or February, if the related Distribution Date is the final Distribution Date)
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(commencing in 2016), will be determined inclusive of the Withheld Amounts from the immediately preceding February, and, if applicable, January. The Net Mortgage Pass-Through Rate will not be reduced by any Operating Advisor Fee Rate following the termination of the Operating Advisor as described in this free writing prospectus under “The Pooling and Servicing Agreement—The Operating Advisor—Termination of the Operating Advisor Without Cause”.
The “Mortgage Rate” with respect to each Mortgage Loan or Serviced Companion Loan and any Interest Accrual Period is the annual rate at which interest accrues on such Mortgage Loan or Serviced Companion Loan during such period (in the absence of a default), as set forth in the related Note from time to time without regard to any Default Interest or any Excess Interest (the initial Mortgage Rate is set forth on Annex A-1 to this free writing prospectus).
“Pari Passu Loan Primary Servicing Fee Rate” with respect to any Non-Serviced Mortgage Loan, is the “primary servicing fee rate” (as defined or set forth in the applicable pooling and servicing agreement) and any other related servicing fee rate (other than those payable to the applicable special servicer) applicable to such Non-Serviced Mortgage Loan that constitutes a portion of the “servicing fee rate” applicable to the other master servicer under the applicable other pooling and servicing agreement. ThePari Passu Loan Primary Servicing Fee Rate for the 11 Madison Avenue Mortgage Loan will be 0.00125%.
The “Principal Distribution Amount” for any Distribution Date will be equal to the sum of the following items without duplication:
(a) the principal component of all scheduled Monthly Payments (other than balloon payments) due on the Mortgage Loans on the related Due Date (if received during the related Collection Period or advanced);
(b) the principal component of all Assumed Scheduled Payments due on the related Due Date (if received during the related Collection Period or advanced) with respect to any Mortgage Loan that is delinquent in respect of its balloon payment;
(c) the Stated Principal Balance of each Mortgage Loan that was, during the related Collection Period, repurchased from the Issuing Entity in connection with the breach of a representation or warranty or a document defect in the related mortgage file or purchased from the Issuing Entity as described in this free writing prospectus under “The Pooling and Servicing Agreement—Representations and Warranties;Repurchase;Substitution,” “—Sale of Defaulted Mortgage Loans and Serviced REO Properties” and “—Optional Termination”;
(d) the portion of Unscheduled Payments allocable to principal of any Mortgage Loan that was liquidated during the related Collection Period;
(e) the principal component of all balloon payments and any other principal payment on any Mortgage Loan received on or after the maturity date thereof, to the extent received during the related Collection Period;
(f) all other Principal Prepayments received in the related Collection Period;
(g) any other full or partial recoveries in respect of principal of the Mortgage Loans, including net insurance proceeds, net liquidation proceeds and Net REO Proceeds received in the related Collection Period, net of any related outstanding P&I Advances allocable to principal, but including any amount related to the Loss of Value Payments to the extent that such amount was transferred into the Collection Account during the related Collection Period as described under “The Pooling and Servicing Agreement—Accounts” in this free writing prospectus; and
(h) as reduced by any (1) Nonrecoverable Advances plus interest on such Nonrecoverable Advances that are paid or reimbursed from principal collections on the Mortgage Loans or, with respect to Property Advances, the Serviced Loan Combinations, in a period during which such
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principal collections would have otherwise been included in the Principal Distribution Amount for such Distribution Date, and (2) Workout-Delayed Reimbursement Amounts that were paid or reimbursed from principal collections on the Mortgage Loans or, with respect to Property Advances, the Serviced Loan Combinations, in a period during which such principal collections would have otherwise been included in the Principal Distribution Amount for such Distribution Date;provided that, in the case of clauses (1) and (2) above, if any of the amounts that were reimbursed from principal collections on the Mortgage Loans are subsequently recovered on the related Mortgage Loan or, with respect to Property Advances, the related Serviced Loan Combination, are subsequently recovered on the related Mortgage Loan or, with respect to Property Advances, the related Serviced Loan Combination, such recovery will increase the Principal Distribution Amount for the Distribution Date related to the period in which such recovery occurs.
The “Assumed Scheduled Payment” with respect to any Mortgage Loan that is delinquent in respect of its balloon payment (including any REO Loan as to which the balloon payment would have been past due) will be an amount equal to the sum of (a) the principal portion of the Monthly Payment that would have been due on such Mortgage Loan on the related Due Date (or the portion thereof not received) based on the constant Monthly Payment that would have been due on such Mortgage Loan on the related Due Date based on the constant payment required by the related Note and the amortization or payment schedule thereof (as calculated with interest at the related Mortgage Rate), if any, assuming such balloon payment has not become due after giving effect to any prior modification, and (b) interest at the Mortgage Rate for such Mortgage Loan minus the applicable Servicing Fee Rate.
An “REO Loan” is any Mortgage Loan or Serviced Loan Combination as to which the related Mortgaged Property has become an REO Property.
Fees and Expenses
The amounts available for distribution on the Certificates on any Distribution Date will generally be net of the following amounts:
Type/Recipient | Amount | Frequency | Source of Payment | |||
Fees | ||||||
Master Servicing Fee(1)/Master Servicer | The Stated Principal Balance of each Mortgage Loan or Serviced Companion Loan multiplied by the Servicing Fee Rate calculated on the same basis as interest accrues on the Mortgage Loan or Serviced Companion Loan. | Monthly | Payment of interest on the related Mortgage Loan or Serviced Companion Loan. | |||
Additional Master Servicing Compensation(2)/Master Servicer | Prepayment interest excess (to the extent any excess exceeds the amount of any Prepayment Interest Shortfalls). | From time to time | Any actual prepayment interest excess. | |||
Additional Master Servicing Compensation(3)/Master Servicer | 100% of any amounts collected for checks returned for insufficient funds. | From time to time | The related fees. | |||
Additional Master Servicing Compensation/Master Servicer | All investment income earned on amounts on deposit in the Collection Account and certain custodial and Reserve Accounts. | Monthly | The investment income. |
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Type/Recipient | Amount | Frequency | Source of Payment | |||
Special Servicing Fee/Special Servicer | The Stated Principal Balance of each Specially Serviced Loan (including any related Serviced Companion Loan) and REO Loan multiplied by the Special Servicing Fee Rate calculated on the same basis as interest accrues on the Mortgage Loan or Serviced Companion Loan. | Monthly | First out of collections on the related Mortgage Loan and then from general collections in the collection account (and custodial account with respect to a Serviced Companion Loan, if applicable), subject to certain limitations. | |||
Workout Fee(2)/Special Servicer | 1.0% of each collection of principal and interest on each Corrected Mortgage Loan (including any related Serviced Companion Loan), subject to a cap described under “The Pooling and Servicing Agreement—Special Servicing—Special Servicing Compensation” in this free writing prospectus. | Monthly | The related collection of principal or interest. | |||
Liquidation Fee(2)/Special Servicer | 1.0% of each recovery of Liquidation Proceeds, net of certain expenses and subject to a cap described, under “The Pooling and Servicing Agreement—Special Servicing—Special Servicing Compensation” in this free writing prospectus. | Upon receipt of Liquidation Proceeds | The related Liquidation Proceeds. | |||
Additional Servicing Compensation(2)/Master Servicer and/or Special Servicer | All late payment fees and Net Default Interest, Modification Fees, assumption application fees, assumption, waiver consent and earnout fees, defeasance fees, loan service transaction fees, beneficiary statement charges and/or other similar items.(1) | From time to time | The related fees. | |||
Solely payable to the Special Servicer, all interest or other income earned on deposits in any REO Account. | Monthly | The investment income. | ||||
Trustee/Certificate Administrator Fee/Trustee and Certificate Administrator | The Trustee/Certificate Administrator Fee Rate multiplied by the Stated Principal Balance of the Mortgage Loans calculated on the same basis as interest accrues on the Mortgage Loan. | Monthly | Payment of interest on the related Mortgage Loan. | |||
Operating Advisor Fee/Operating Advisor | The Operating Advisor Fee Rate multiplied by the Stated Principal Balance of the Mortgage Loans calculated on the same basis as interest accrued on the Mortgage Loans. | Monthly | Payment of interest on the related Mortgage Loan. |
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Type/Recipient | Amount | Frequency | Source of Payment | |||
Operating Advisor Consulting Fee/Operating Advisor | A fee in connection with each Major Decision for which the Operating Advisor has consulting rights equal to $10,000 or such lesser amount as the related borrower agrees to pay with respect to any Mortgage Loan. | From time to time | Paid by related borrower. | |||
CREFC® License Fee | Amount of interest accrued during an Interest Accrual Period at the CREFC® License Fee Rate on the same balance, in the same manner and for the same number of days as interest at the applicable Mortgage Rate accrued with respect to each Mortgage Loan during the related Interest Accrual Period. | Monthly | Payment of interest on the related Mortgage Loan. | |||
Expenses | ||||||
Reimbursement of Property Advances(4)/Master Servicer and Special Servicer/Trustee | To the extent of funds available, the amount of any Property Advances. | From time to time | Recoveries on the related Mortgage Loan or Serviced Companion Loan, or to the extent that the party making the advance determines it is nonrecoverable, from general collections in the Collection Account (and custodial account with respect to a Serviced Companion Loan, if applicable), subject to certain limitations. | |||
Interest on Property Advances(4)/Master Servicer and Special Servicer/Trustee | At Advance Rate. | When Advance is reimbursed | First from late payment charges and Default Interest on the related Mortgage Loan in excess of the regular interest rate, and then from general collections in the Collection Account (and custodial account with respect to a Serviced Companion Loan, if applicable), subject to certain limitations. | |||
Reimbursement of P&I Advances/Master Servicer/Trustee | To the extent of funds available, the amount of any P&I Advances. | From time to time | Recoveries on the related Mortgage Loan or Serviced Companion Loan, or to the extent that the party making the advance determines it is nonrecoverable, from general collections in the Collection Account (and custodial account with respect to a Serviced Companion Loan, if applicable), subject to certain limitations. | |||
Interest on P&I Advances/Master Servicer/Trustee | At Advance Rate. | When Advance is reimbursed | First from late payment charges and Default Interest on the related Mortgage Loan in excess of the regular interest rate, and then from general collections in the Collection Account (and custodial account with respect to a Serviced Companion Loan, if applicable), subject to certain limitations. |
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Type/Recipient | Amount | Frequency | Source of Payment | |||
Expenses, including without limitation, indemnification expenses(4)/Trustee, Certificate Administrator, Operating Advisor, Master Servicer and Special Servicer | Amounts or expenses for which the Trustee, the Certificate Administrator, the Operating Advisor, the Master Servicer and the Special Servicer are entitled to indemnification or reimbursement. | Per occurrence or time of claim | General collections in the Collection Account (and custodial account with respect to a Serviced Companion Loan, if applicable), subject to certain limitations, or the Distribution Account. | |||
Expenses of the Issuing Entity not Advanced (may include environmental remediation, appraisals, expenses of operating REO Property and any independent contractor hired to operate REO Property)(4) | Based on third party charges. | From time to time | First from income on the related REO Property, if applicable, and then from general collections in the Collection Account (and custodial account with respect to a Serviced Companion Loan, if applicable), subject to certain limitations. |
(1) | With respect to the 11 Madison Avenue Mortgage Loan, the related other master servicer (or primary servicer) will be entitled to a primary servicing fee accruing at a rate equal to 0.00125%per annum. |
(2) | In general, with respect to any Non-Serviced Mortgage Loan, we anticipate that the related other master servicer and other special servicer will be entitled to receive fees with respect to such Non-Serviced Mortgage Loan in amounts, from sources and at frequencies that are similar, but not necessarily identical, to those described in the table. For example, the workout and liquidation fees for a Non-Serviced Mortgage Loan may be subject to higher caps or no caps. The rights to compensation for such parties will be governed by the applicable other pooling and servicing agreement. See “Description of the Mortgage Pool—Loan Combinations”and“The Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loan” in this free writing prospectus. |
(3) | Allocable between the Master Servicer and the Special Servicer as provided in the Pooling and Servicing Agreement. The allocations between another master servicer and another special servicer pursuant to another pooling and servicing agreement may be different. |
(4) | In general, with respect to any Non-Serviced Mortgage Loan, we anticipate that the related other master servicer, other special servicer, other operating advisor, other certificate administrator and other trustee will be entitled to receive reimbursement and/or indemnification with respect to, or allocable to, such Non-Serviced Mortgage Loan in amounts, from sources and at frequencies that are similar, but not necessarily identical, to those described in the table. See “Description of the Mortgage Pool—Loan Combinations”and “The Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loan” in this free writing prospectus. |
Pursuant to the Pooling and Servicing Agreement, any successor Master Servicer or Special Servicer assuming the obligations of the Master Servicer or Special Servicer under the Pooling and Servicing Agreement generally will be entitled to the compensation to which the Master Servicer or the Special Servicer would have been entitled. If no successor Master Servicer or Special Servicer can be obtained to perform such obligations for such compensation, additional amounts payable to such successor Master Servicer or Special Servicer shall be treated as Realized Losses. The Pooling and Servicing Agreement does not provide for any successor Trustee to receive compensation in excess of that paid to its predecessor Trustee.
Distribution of Available Funds
On each Distribution Date, prior to the Crossover Date, the Available Funds for such Distribution Date will be distributed in the following amounts and order of priority:
First, to the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class X-A, Class X-B, Class X-C, Class X-D, Class X-E and Class X-F Certificates, in respect of interest, up to an amount equal to, andpro rata in accordance with, the respective Interest Accrual Amount for such Classes;
Second, to the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class X-A, Class X-B, Class X-C, Class X-D, Class X-E and Class X-F Certificates, in respect of interest, up to an amount equal to, andpro rata in accordance with, the respective aggregate unpaid Interest Shortfalls previously allocated to such Classes;
Third, to the Class A-1, Class A-2, Class A-SB, Class A-3 and Class A-4 Certificates, in reduction of the Certificate Balances thereof, in the following priority:
(1) | to the Class A-SB Certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount for such Distribution Date, until the Certificate Balance of the |
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Class A-SB Certificates has been reduced to the Planned Principal Balance as set forth on Annex A-3 for such Distribution Date; |
(2) | then, to the Class A-1 Certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount (or the portion thereof remaining after distributions on the Class A-SB Certificates pursuant to clause (1) above) for such Distribution Date, until the Certificate Balance of the Class A-1 Certificates has been reduced to zero; |
(3) | then, to the Class A-2 Certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount (or the portion thereof remaining after distributions on the Class A-1 and Class A-SB Certificates pursuant to clauses (1) and (2) above) for such Distribution Date, until the Certificate Balance of the Class A-2 Certificates has been reduced to zero; |
(4) | then, to the Class A-3 Certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount (or the portion thereof remaining after distributions on the Class A-1, Class A-2 and Class A-SB Certificates pursuant to clauses (1), (2) and (3) above) for such Distribution Date, until the Certificate Balance of the Class A-3 Certificates has been reduced to zero; |
(5) | then, to the Class A-4 Certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount (or the portion thereof remaining after distributions on the Class A-1, Class A-2, Class A-SB and Class A-3 Certificates pursuant to clauses (1), (2), (3) and (4) above) for such Distribution Date, until the Certificate Balance of the Class A-4 Certificates has been reduced to zero; and |
(6) | then, to the Class A-SB Certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount (or the portion thereof remaining after distributions on the Class A-1, Class A-2, Class A-SB, Class A-3 and Class A-4 Certificates pursuant to clauses (1), (2), (3), (4) and (5) above) for such Distribution Date, until the Certificate Balance of the Class A-SB Certificates has been reduced to zero; |
Fourth, to the Class A-1, Class A-2, Class A-SB, Class A-3 and Class A-4 Certificates, to the extent not distributed pursuant to all prior clauses, for the unreimbursed amounts of Realized Losses, if any, an amount equal to, andpro rata based upon, the aggregate of such unreimbursed Realized Losses previously allocated to such Class;
Fifth,to the Class A-M Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Sixth,to the Class A-M Certificates, in respect of interest, up to an amount equal to the aggregate unpaid Interest Shortfalls previously allocated to such Class;
Seventh,to the Class A-M Certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount less amounts of Principal Distribution Amount distributed pursuant to all prior clauses, until the Certificate Balance of such Class is reduced to zero;
Eighth,to the Class A-M Certificates, to the extent not distributed pursuant to all prior clauses, for the unreimbursed amounts of Realized Losses, if any, up to an amount equal to the aggregate of such unreimbursed Realized Losses previously allocated to such Class;
Ninth,to the Class B Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Tenth,to the Class B Certificates, in respect of interest, up to an amount equal to the aggregate unpaid Interest Shortfalls previously allocated to such Class;
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Eleventh,to the Class B Certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount less amounts of Principal Distribution Amount distributed pursuant to all prior clauses, until the Certificate Balance of such Class is reduced to zero;
Twelfth,to the Class B Certificates, to the extent not distributed pursuant to all prior clauses, for the unreimbursed amounts of Realized Losses, if any, up to an amount equal to the aggregate of such unreimbursed Realized Losses previously allocated to such Class;
Thirteenth,to the Class C Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Fourteenth,to the Class C Certificates, in respect of interest, up to an amount equal to the aggregate unpaid Interest Shortfalls previously allocated to such Class;
Fifteenth,to the Class C Certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount less amounts of Principal Distribution Amount distributed pursuant to all prior clauses, until the Certificate Balance of such Class is reduced to zero;
Sixteenth,to the Class C Certificates, to the extent not distributed pursuant to all prior clauses, for the unreimbursed amounts of Realized Losses, if any, up to an amount equal to the aggregate of such unreimbursed Realized Losses previously allocated to such Class;
Seventeenth, to the Class D Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Eighteenth, to the Class D Certificates, in respect of interest, up to an amount equal to the aggregate unpaid Interest Shortfalls previously allocated to such Class;
Nineteenth, to the Class D Certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount less amounts of Principal Distribution Amount distributed pursuant to all prior clauses, until the Certificate Balance of such Class is reduced to zero;
Twentieth, to the Class D Certificates, to the extent not distributed pursuant to all prior clauses, for the unreimbursed amounts of Realized Losses, if any, up to an amount equal to the aggregate of such unreimbursed Realized Losses previously allocated to such Class;
Twenty-first, to the Class E Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Twenty-second, to the Class E Certificates, in respect of interest, up to an amount equal to the aggregate unpaid Interest Shortfalls previously allocated to such Class;
Twenty-third, to the Class E Certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount less amounts of Principal Distribution Amount distributed pursuant to all prior clauses, until the Certificate Balance of such Class is reduced to zero;
Twenty-fourth, to the Class E Certificates, to the extent not distributed pursuant to all prior clauses, for the unreimbursed amounts of Realized Losses, if any, up to an amount equal to the aggregate of such unreimbursed Realized Losses previously allocated to such Class;
Twenty-fifth, to the Class F Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Twenty-sixth, to the Class F Certificates, in respect of interest, up to an amount equal to the aggregate unpaid Interest Shortfalls previously allocated to such Class;
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Twenty-seventh, to the Class F Certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount less amounts of Principal Distribution Amount distributed pursuant to all prior clauses, until the Certificate Balance of such Class is reduced to zero;
Twenty-eighth, to the Class F Certificates, to the extent not distributed pursuant to all prior clauses, for the unreimbursed amounts of Realized Losses, if any, up to an amount equal to the aggregate of such unreimbursed Realized Losses previously allocated to such Class;
Twenty-ninth, to the Class G Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Thirtieth, to the Class G Certificates, in respect of interest, up to an amount equal to the aggregate unpaid Interest Shortfalls previously allocated to such Class;
Thirty-first, to the Class G Certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount less amounts of Principal Distribution Amount distributed pursuant to all prior clauses, until the Certificate Balance of such Class is reduced to zero;
Thirty-second, to the Class G Certificates, to the extent not distributed pursuant to all prior clauses, for the unreimbursed amounts of Realized Losses, if any, up to an amount equal to the aggregate of such unreimbursed Realized Losses previously allocated to such Class;
Thirty-third, to the Class H Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Thirty-fourth, to the Class H Certificates, in respect of interest, up to an amount equal to the aggregate unpaid Interest Shortfalls previously allocated to such Class;
Thirty-fifth, to the Class H Certificates, in reduction of the Certificate Balance thereof, an amount equal to the Principal Distribution Amount less amounts of Principal Distribution Amount distributed pursuant to all prior clauses, until the Certificate Balance of such Class is reduced to zero;
Thirty-sixth, to the Class H Certificates, to the extent not distributed pursuant to all prior clauses, for the unreimbursed amounts of Realized Losses, if any, up to an amount equal to the aggregate of such unreimbursed Realized Losses previously allocated to such Class; and
Thirty-seventh, to the Class R and Class LR Certificates as specified in the Pooling and Servicing Agreement.
Notwithstanding the foregoing, on each Distribution Date occurring on or after the Crossover Date, regardless of the allocation of principal payments described in priorityThird above, the Principal Distribution Amount for such Distribution Date will be distributed to the Class A-1, Class A-2, Class A-SB, Class A-3 and Class A-4 Certificates,pro rata, based on their respective Certificate Balances, in reduction of their respective Certificate Balances, until the Certificate Balance of each such Class is reduced to zero. The “Crossover Date” is the Distribution Date on which the Certificate Balance of each Class of Sequential Pay Certificates (other than the Class A-1, Class A-2, Class A-SB, Class A-3 and Class A-4 Certificates) is (or will be) reduced to zero. None of the Class X-A, Class X-B, Class X-C, Class X-D, Class X-E or Class X-F Certificates will be entitled to any distribution of principal.
Distribution of Excess Interest
On each Distribution Date, the Certificate Administrator is required to distribute from the Class V Distribution Account any Excess Interest received with respect to any ARD Loan during the related Collection Period to the holders of the Class V Certificates.
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Class A-SB Planned Principal Balance
On each Distribution Date prior to the Crossover Date, the Class A-SB Certificates have priority with respect to receiving distributions of principal to reduce the Class A-SB Certificate Balance to the Planned Principal Balance for such Distribution Date as described in “—Distributions of Available Funds” in this free writing prospectus. The “Planned Principal Balance” for any Distribution Date is the balance shown for such Distribution Date in the table set forth in Annex A-3 to this free writing prospectus. These balances were calculated using, among other things, the Modeling Assumptions. Based on the Modeling Assumptions, the Certificate Balance of the Class A-SB Certificates on each Distribution Date would be reduced to the balance indicated for the related Distribution Date on Annex A-3. We cannot assure you, however, that the Mortgage Loans will perform in conformity with the Modeling Assumptions or that the Certificate Balance of the Class A-SB Certificates on any Distribution Date will equal the balance that is specified for that Distribution Date on Annex A-3. In general, once the Certificate Balances of the Class A-1, Class A-2, Class A-3 and Class A-4 Certificates have been reduced to zero, any remaining portion on any Distribution Date of the Principal Distribution Amount will be distributed to the Class A-SB Certificates until the Certificate Balance of the Class A-SB Certificates is reduced to zero.
Prepayment Premiums and Yield Maintenance Charges
On any Distribution Date, Prepayment Premiums and Yield Maintenance Charges collected in respect of Mortgage Loans during the related Collection Period will be required to be distributed by the Certificate Administrator to the holders of the Class A-1 through Class D Certificates in the following manner: such holders will receive the product of (a) a fraction, not greater than one, the numerator of which is the amount of principal distributed to such Class of Certificates on such Distribution Date and the denominator of which is the total amount of principal distributed to the holders of each Class of Sequential Pay Certificates on such Distribution Date; (b) the Base Interest Fraction for the related principal prepayment and such Class of Certificates and (c) the aggregate amount of the Prepayment Premiums or the Yield Maintenance Charges, as applicable, collected on such principal prepayment during the related Collection Period.
Any Yield Maintenance Charges or Prepayment Premiums collected during the related Collection Period remaining after such distributions described in the preceding paragraph (the “IO Group YM Distribution Amount”) will be allocated in the following manner:
(a) first, to the Class X-A Certificates, in an amount equal to the product of (a) a fraction, the numerator of which is the aggregate amount of principal distribution to the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4 and Class A-M Certificates on such Distribution Date and the denominator of which is the total Principal Distribution Amount in respect of such Distribution Date, multiplied by (b) the IO Group YM Distribution Amount;
(b) second, to the Class X-B Certificates, in an amount equal to the product of (a) a fraction, the numerator of which is the aggregate amount of principal distribution to the Class B and Class C Certificates on such Distribution Date and the denominator of which is the total Principal Distribution Amount in respect of such Distribution Date, multiplied by (b) the IO Group YM Distribution Amount;
(c) third, to the Class X-C Certificates, in an amount equal to the product of (a) a fraction, the numerator of which is the amount of principal distribution to the Class D Certificates on such Distribution Date and the denominator of which is the total Principal Distribution Amount in respect of such Distribution Date, multiplied by (b) the IO Group YM Distribution Amount;
(d) fourth, to the Class X-D Certificates, in an amount equal to the product of (a) a fraction, the numerator of which is the aggregate amount of principal distribution to the Class E and Class F Certificates on such Distribution Date and the denominator of which is the total Principal Distribution Amount in respect of such Distribution Date, multiplied by (b) the IO Group YM Distribution Amount;
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(e) fifth, to the Class X-E Certificates, in an amount equal to the product of (a) a fraction, the numerator of which is the amount of principal distribution to the Class G Certificates on such Distribution Date and the denominator of which is the total Principal Distribution Amount in respect of such Distribution Date, multiplied by (b) the IO Group YM Distribution Amount; and
(f) sixth, to the Class X-F Certificates, the IO Group YM Distribution Amount remaining after such distribution to the holders of the Class X-A, Class X-B, Class X-C, Class X-D and Class X-E Certificates described in (a) through (e) above.
The “Base Interest Fraction” for any principal prepayment on any Mortgage Loan and for any of the Class A-1 through Class D Certificates will be a fraction (not greater than one) (a) whose numerator is the greater of zero and the amount, if any, by which (i) the Pass-Through Rate on such Class of Certificates exceeds (ii) the yield rate (as provided by the Master Servicer) used in calculating the Prepayment Premium or Yield Maintenance Charge, as applicable, with respect to such principal prepayment and (b) whose denominator is the amount, if any, by which (i) the Mortgage Rate on such Mortgage Loan exceeds (ii) the yield rate (as provided by the Master Servicer) used in calculating the Prepayment Premium or Yield Maintenance Charge, as applicable, with respect to such principal prepayment;provided,however, that if such yield rate is greater than or equal to the Mortgage Rate on such Mortgage Loan, then the Base Interest Fraction will be zero;provided,further, that if such yield rate is greater than or equal to the Mortgage Rate on such Mortgage Loan, but less than the Pass-Through Rate described in the clause (a)(i) above, then the Base Interest Fraction will be one.
The yield rate with respect to any prepaid Mortgage Loan will be equal to the yield rate stated in the related loan documents, or if none is stated, will be the yield rate which, when compounded monthly, is equivalent to the yield, on the U.S. Treasury primary issue with a maturity date closest to the maturity date or the related Anticipated Repayment Date, as applicable, for the prepaid Mortgage Loan. In the event that there are: (a) two or more U.S. Treasury issues with the same coupon, the issue with the lower yield will be selected and (b) two or more U.S. Treasury issues with maturity dates equally close to the maturity date or the related Anticipated Repayment Date, as applicable, for such prepaid Mortgage Loan, the issue with the earlier maturity date will be selected.
In the case of the Serviced Loan Combination, Prepayment Premiums or Yield Maintenance Charges actually collected in respect of such Serviced Loan Combination will be allocated in the proportions described in the applicable intercreditor agreement. See “Description of the Mortgage Pool—Loan Combinations” in this free writing prospectus.
Application Priority of Mortgage Loan Collections or Loan Combination Collections
Absent express provisions in the related Mortgage Loan Documents (and, with respect to any Serviced Loan Combination, the related intercreditor agreement), all amounts collected by or on behalf of the Issuing Entity in respect of any Mortgage Loan in the form of payments from the related borrower, Liquidation Proceeds, condemnation proceeds or insurance proceeds (excluding, if applicable, in the case of a Serviced Loan Combination, any amounts payable to the holders of the related Companion Loan(s) pursuant to the related intercreditor agreement) will be deemed to be allocated for purposes of collecting amounts due under the Mortgage Loan, pursuant to the Pooling and Servicing Agreement, in the following order of priority:
First, as a recovery of any unreimbursed Advances with respect to the related Mortgage Loan and unpaid interest at the Advance Rate on such Advances and, if applicable, unreimbursed and unpaid expenses of the Issuing Entity with respect to the related Mortgage Loan;
Second, as a recovery of Nonrecoverable Advances and any interest at the Advance Rate on those Nonrecoverable Advances, to the extent previously reimbursed from and allocated to principal collections with respect to the related Mortgage Loan;
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Third, to the extent not previously allocated pursuant to clauseFirst, as a recovery of accrued and unpaid interest on such Mortgage Loan (exclusive of Default Interest and Excess Interest) to the extent of the excess of (i) accrued and unpaid interest on such Mortgage Loan at the related Mortgage Rate to but not including the Due Date in the Collection Period in which such collections were received, over (ii) the cumulative amount of the reductions (if any) in the amount of related P&I Advances for such Mortgage Loan that have occurred in connection with related Appraisal Reduction Amounts (to the extent collections have not been allocated as recovery of accrued and unpaid interest pursuant to clauseFifth below on earlier dates);
Fourth, to the extent not previously allocated pursuant to clauseFirst, as a recovery of principal of such Mortgage Loan then due and owing, including by reason of acceleration of such Mortgage Loan following a default thereunder (or, if the Mortgage Loan has been liquidated, as a recovery of principal to the extent of its entire remaining unpaid principal balance);
Fifth, as a recovery of accrued and unpaid interest on such Mortgage Loan to the extent of the cumulative amount of the reductions (if any) in the amount of related P&I Advances for such Mortgage Loan that have occurred in connection with related Appraisal Reduction Amounts (to the extent collections have not been allocated as recovery of accrued and unpaid interest pursuant to this clause Fifth on earlier dates);
Sixth, as a recovery of amounts to be currently allocated to the payment of, or escrowed for the future payment of, real estate taxes, assessments and insurance premiums and similar items relating to such Mortgage Loan;
Seventh, as a recovery of any other reserves to the extent then required to be held in escrow with respect to such Mortgage Loan;
Eighth, as a recovery of any Yield Maintenance Charge or Prepayment Premium then due and owing under such Mortgage Loan;
Ninth, as a recovery of any late payment charges and Default Interest and Excess Interest then due and owing under such Mortgage Loan;
Tenth, as a recovery of any assumption fees and Modification Fees then due and owing under such Mortgage Loan;
Eleventh, as a recovery of any other amounts then due and owing under such Mortgage Loan other than remaining unpaid principal (if both consent fees and Operating Advisor Consulting Fees are due and owing,first, allocated to consent fees andthen, allocated to Operating Advisor Consulting Fees); and
Twelfth, as a recovery of any remaining principal of such Mortgage Loan to the extent of its entire remaining unpaid principal balance;
provided that, to the extent required under the REMIC provisions of the Code, payments or proceeds received (or receivable by exercise of the lender’s rights under the related Mortgage Loan documents) with respect to any partial release of a Mortgaged Property (including in connection with a condemnation and Mortgaged Property not assigned any significant value when the Mortgage Loan was originated) at a time when the loan-to-value ratio of the related Mortgage Loan (or Serviced Loan Combination) exceeds 125%, or would exceed 125% following any partial release (based solely on the value of real property and excluding personal property and going concern value, if any) must be collected and allocated to reduce the principal balance of the Mortgage Loan (or Serviced Loan Combination) in the manner permitted by such REMIC provisions.
Collections by or on behalf of the Issuing Entity in respect of any REO Property (exclusive of the amounts to be allocated to the payment of the costs of operating, managing, leasing, maintaining and disposing of such REO Property and, if applicable, in the case of a Serviced Loan Combination, exclusive of any amounts payable to the holders of the related Companion Loan(s), as applicable, pursuant to the
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related intercreditor agreement) will be deemed to be allocated for purposes of collecting amounts due under the Mortgage Loan, pursuant to the Pooling and Servicing Agreement, in the following order of priority:
First, as a recovery of any unreimbursed Advances with respect to the related Mortgage Loan and interest at the Advance Rate on all Advances and, if applicable, unreimbursed and unpaid expenses of the Issuing Entity with respect to the related Mortgage Loan;
Second, as a recovery of Nonrecoverable Advances and any interest at the Advance Rate on those Nonrecoverable Advances, to the extent previously reimbursed from and allocated to principal collections with respect to the related Mortgage Loan;
Third, to the extent not previously allocated pursuant to clauseFirst, as a recovery of accrued and unpaid interest on such Mortgage Loan (exclusive of Default Interest and Excess Interest) to the extent of the excess of (i) accrued and unpaid interest on such Mortgage Loan at the related Mortgage Rate to but not including the Due Date in the Collection Period in which such collections were received, over (ii) the cumulative amount of the reductions (if any) in the amount of related P&I Advances for such Mortgage Loan that have occurred in connection with related Appraisal Reduction Amounts (to the extent collections have not been allocated as a recovery of accrued and unpaid interest pursuant to clause Fifth below on earlier dates);
Fourth, to the extent not previously allocated pursuant to clauseFirst, as a recovery of principal of such Mortgage Loan to the extent of its entire unpaid principal balance;
Fifth, as a recovery of accrued and unpaid interest on such Mortgage Loan to the extent of the cumulative amount of the reductions (if any) in the amount of related P&I Advances for such Mortgage Loan that have occurred in connection with related Appraisal Reduction Amounts (to the extent collections have not been allocated as recovery of accrued and unpaid interest pursuant to this clause Fifth on earlier dates);
Sixth, as a recovery of any Yield Maintenance Charge or Prepayment Premium then due and owing under such Mortgage Loan;
Seventh, as a recovery of any late payment charges and Default Interest and Excess Interest then due and owing under such Mortgage Loan;
Eighth, as a recovery of any assumption fees and Modification Fees then due and owing under such Mortgage Loan; and
Ninth, as a recovery of any other amounts then due and owing under such Mortgage Loan other than remaining unpaid principal (if both consent fees and Operating Advisor Consulting Fees are due and owing,first, allocated to consent fees andthen, allocated to Operating Advisor Consulting Fees).
Assumed Final Distribution Date
The “Assumed Final Distribution Date” with respect to any Class of Regular Certificates is the Distribution Date on which the aggregate Certificate Balance or Notional Balance, as the case may be, of that Class of Certificates would be reduced to zero based on the assumptions and calculations set forth below. The Assumed Final Distribution Date with respect to each Class of Offered Certificates is set forth on the cover of this free writing prospectus.
The Assumed Final Distribution Dates set forth on the cover of this free writing prospectus were calculated without regard to any delays in the collection of balloon payments and without regard to the events of delinquencies or defaults. Accordingly, in the event of defaults on the Mortgage Loans, the actual final Distribution Date for one or more Classes of the Offered Certificates may be later, and could be substantially later, than the related Assumed Final Distribution Date(s).
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In addition, the Assumed Final Distribution Dates set forth on the cover of this free writing prospectus were calculated on the basis of a 0% CPR and based on the Modeling Assumptions (as defined in this free writing prospectus under “Yield and Maturity Considerations—Weighted Average Life”). Since the rate of payment (including prepayments) of the Mortgage Loans may exceed the scheduled rate of payments, and could exceed that scheduled rate by a substantial amount, the actual final Distribution Date for one or more Classes of the Certificates may be earlier, and could be substantially earlier, than the related Assumed Final Distribution Date(s). The rate of payments (including prepayments) on the Mortgage Loans will depend on the characteristics of the Mortgage Loans, as well as on the prevailing level of interest rates and other economic factors, and we cannot assure you as to actual payment experience. Finally, the Assumed Final Distribution Dates were calculated assuming that there would not be an early termination of the Issuing Entity.
The Class V Certificates and the Residual Certificates will not have a Certificate Balance, a Notional Balance or an Assumed Final Distribution Date.
The “Rated Final Distribution Date” for each Class of Offered Certificates will be the Distribution Date in October 2048.
Realized Losses
The Certificate Balances of each Class of Sequential Pay Certificates will be reduced without distribution on any Distribution Date to the extent of any Realized Loss allocated to the applicable Class on such Distribution Date. As referred to in this free writing prospectus, “Realized Loss” with respect to any Distribution Date means the amount, if any, by which the aggregate Certificate Balance of the Sequential Pay Certificates after giving effect to distributions made on such Distribution Date exceeds the aggregate Stated Principal Balance of the Mortgage Loans (for purposes of this calculation only, the aggregate Stated Principal Balance will not be reduced by the amount of principal payments received on the Mortgage Loans that were used to reimburse the Master Servicer or the Trustee from general collections of principal on the Mortgage Loans for Workout-Delayed Reimbursement Amounts, to the extent those amounts are not otherwise determined to be Nonrecoverable Advances), immediately following the Determination Date preceding such Distribution Date. Any such Realized Losses will be applied to the Classes of Sequential Pay Certificates in the following order, until the Certificate Balance of each such Class is reduced to zero:first, to the Class H Certificates,second, to the Class G Certificates,third, to the Class F Certificates,fourth, to the Class E Certificates,fifth, to the Class D Certificates,sixth, to the Class C Certificates,seventh, to the Class B Certificates,eighth, to the Class A-M Certificates, and finally,pro rata, to the Class A-1, Class A-2, Class A-SB, Class A-3 and Class A-4 Certificates, based on their respective Certificate Balances. Any amounts recovered in respect of any such amounts previously allocated as Realized Losses will be distributed to the Classes of Sequential Pay Certificates in reverse order of allocation of such Realized Losses.
Shortfalls in Available Funds resulting from the following expenses will be allocated in the same manner as Realized Losses:
· | interest on Advances (to the extent not covered by Default Interest and late payment fees); |
· | additional servicing compensation (including the Special Servicing Fee); |
· | extraordinary expenses of the Issuing Entity and other additional expenses of the Issuing Entity; |
· | a reduction of the interest rate of a Mortgage Loan by a bankruptcy court pursuant to a plan of reorganization or pursuant to any of its equitable powers; or |
· | a reduction in interest rate or a forgiveness of principal of a Mortgage Loan as described under “The Pooling and Servicing Agreement—Modifications” in this free writing prospectus or otherwise. |
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Net Prepayment Interest Shortfalls, as described under “—Prepayment Interest Shortfalls,” below, will be allocated to, and be deemed distributed to, each Class of Certificates (other than the Class V, Class R and Class LR Certificates),pro rata, based upon amounts distributable in respect of interest to each such Class (without giving effect to any such allocation of Net Prepayment Interest Shortfall).
The Notional Balance of the Class X-A Certificates will be reduced to the extent of all reductions in the Certificate Balance of the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4 and Class A-M Certificates included in the calculation of the Notional Balance of such Class of Certificates on the related Distribution Date, as set forth above, as a result of write-offs in respect of final recovery determinations in respect of liquidation of defaulted Mortgage Loans. The Notional Balance of the Class X-B Certificates will be reduced to the extent of all reductions in the Certificate Balance of the Class B and Class C Certificates included in the calculation of the Notional Balance of such Class of Certificates on the related Distribution Date, as set forth above, as a result of write offs in respect of final recovery determinations in respect of liquidation of defaulted Mortgage Loans. The Notional Balance of the Class X-C Certificates will be reduced to the extent of all reductions in the Certificate Balance of the Class D Certificates included in the calculation of the Notional Balance of such Class of Certificates on the related Distribution Date, as set forth above, as a result of write offs in respect of final recovery determinations in respect of liquidation of defaulted Mortgage Loans. The Notional Balance of the Class X-D Certificates will be reduced to the extent of all reductions in the Certificate Balance of the Class E and Class F Certificates included in the calculation of the Notional Balance of such Class of Certificates on the related Distribution Date, as set forth above, as a result of write offs in respect of final recovery determinations in respect of liquidation of defaulted Mortgage Loans. The Notional Balance of the Class X-E Certificates will be reduced to the extent of all reductions in the Certificate Balance of the Class G Certificates included in the calculation of the Notional Balance of such Class of Certificates on the related Distribution Date, as set forth above, as a result of write offs in respect of final recovery determinations in respect of liquidation of defaulted Mortgage Loans. The Notional Balance of the Class X-F Certificates will be reduced to the extent of all reductions in the Certificate Balance of the Class H Certificates included in the calculation of the Notional Balance of such Class of Certificates on the related Distribution Date, as set forth above, as a result of write offs in respect of final recovery determinations in respect of liquidation of defaulted Mortgage Loans.
The “Stated Principal Balance” of each Mortgage Loan, Serviced Companion Loan or Serviced Loan Combination will generally equal the Cut-off Date Balance thereof (or in the case of a Replacement Mortgage Loan, the outstanding principal balance as of the related date of substitution and after application of all scheduled payments of principal and interest due on or before the related Due Date in the month of substitution, whether or not received), as reduced (to not less than zero) on each Distribution Date by (i) all payments or other collections (or P&I Advances in lieu thereof) of principal of such Mortgage Loan, Serviced Companion Loan or Serviced Loan Combination that have been distributed to the Certificateholders on such Distribution Date or Serviced Companion Loan noteholders on the related servicer remittance date or applied to any other payments required under the Pooling and Servicing Agreement or related Intercreditor Agreement on or prior to such Distribution Date and (ii) any principal forgiven by the Special Servicer (or with respect to any Non-Serviced Mortgage Loan, by the other applicable special servicer) and other principal losses realized in respect of such Mortgage Loan, Serviced Companion Loan or Serviced Loan Combination during the related Collection Period (or with respect to any Non-Serviced Mortgage Loan, other principal losses realized in respect of such Non-Serviced Mortgage Loan during the related Collection Period as determined in accordance with the terms of the related servicing agreement).
With respect to any Non-Serviced Mortgage Loan, any additional trust expenses under the servicing agreement governing such Non-Serviced Mortgage Loan that are similar to those expenses resulting in Realized Losses and that relate to such Non-Serviced Mortgage Loan are to be paid out of collections on, and other proceeds of, such Non-Serviced Mortgage Loan and the related Companion Loan, thereby potentially resulting in a loss to the Issuing Entity.
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Prepayment Interest Shortfalls
For any Distribution Date, a “Prepayment Interest Shortfall” will arise with respect to any Mortgage Loan or Serviced Companion Loan if (i) a borrower makes a Principal Prepayment in full or in part or a balloon payment during the related Collection Period or (ii) a prepayment due to receipt of insurance proceeds, Liquidation Proceeds or condemnation proceeds, as applicable, and the date such payment was made or amounts received (or, in the case of a balloon payment, the date through which interest thereon accrues) occurred after the Due Date in the calendar month preceding such Distribution Date but prior to the Due Date for such Mortgage Loan or Serviced Companion Loan in the related Collection Period. Such a shortfall arises because the amount of interest that accrues on the amount of such Principal Prepayment, the principal portion of a balloon payment or prepayment due to the receipt of insurance proceeds, Liquidation Proceeds or condemnation proceeds, as the case may be, will be less than the corresponding amount of interest accruing on the Regular Certificates, and fees payable to the Trustee, the Certificate Administrator, the Operating Advisor, CREFC® and the Master Servicer. In such case, the Prepayment Interest Shortfall will generally equal the excess of (a) the aggregate amount of interest (excluding the Excess Interest) that would have accrued at the Net Mortgage Pass-Through Rate on the Stated Principal Balance of such Mortgage Loan or Serviced Companion Loan for the one-month period ending on such Due Date if such Principal Prepayment, balloon payment or prepayment due to receipt of insurance proceeds, Liquidation Proceeds or condemnation proceeds had not been made over (b) the aggregate interest (excluding the Excess Interest) that did so accrue (at the Net Mortgage Pass-Through Rate) through the date such payment was made.
In any case in which a Principal Prepayment in full or in part, a balloon payment or prepayment due to receipt of insurance proceeds, Liquidation Proceeds or condemnation proceeds is made during any Collection Period after the Due Date for a Mortgage Loan or Serviced Companion Loan in the related Collection Period and on or prior to the related Determination Date, a “Prepayment Interest Excess” will arise since the amount of interest (excluding the Excess Interest) which accrues on the amount of such Principal Prepayment, the principal portion of a balloon payment or prepayment due to receipt of insurance proceeds, Liquidation Proceeds or condemnation proceeds will exceed the corresponding amount of interest accruing on the Regular Certificates, and fees payable to the Trustee, the Certificate Administrator, the Operating Advisor, CREFC® and the Master Servicer.
If, with respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan, a Specially Serviced Loan or a previously Specially Serviced Loan with respect to which the Special Servicer has waived or amended the prepayment restrictions such that the related borrower is not required to prepay on a Due Date or pay interest that would have accrued on the amount prepaid through and including the last day of the interest accrual period occurring following the date of such prepayment) or ServicedPari Passu Companion Loan, the Master Servicer accepts a voluntary Principal Prepayment (other than (i) in connection with the payment of insurance proceeds or condemnation proceeds unless the Master Servicer did not apply the proceeds thereof in accordance with the terms of the related Mortgage Loan Documents, (ii) subsequent to a default under the related Mortgage Loan Documents (provided that the Master Servicer reasonably believes that acceptance of such prepayment is consistent with the Servicing Standard), (iii) pursuant to applicable law or a court order, or (iv) at the request of or with the consent of the Special Servicer or, for so long as no Control Termination Event has occurred and is continuing, with the consent of the Directing Holder) resulting in a Prepayment Interest Shortfall, then that Master Servicer will be required to deliver to the Certificate Administrator for deposit in the Lower-Tier Distribution Account, without any right of reimbursement therefor, a cash payment (the “Master Servicer Prepayment Interest Shortfall Amount”), in an amount equal to the lesser of (x) the aggregate amount of those Prepayment Interest Shortfalls incurred in connection with such voluntary Principal Prepayments received in respect of the Mortgage Loans (other than a Non-Serviced Mortgage Loan or a Specially Serviced Loan,) or ServicedPari Passu Companion Loans (other than a Specially Serviced Loan) during the related Collection Period, and (y) the aggregate of (A) the portion of its Master Servicing Fee (calculated for this purpose at 0.0025% (one quarter of a basis pointper annum) that is being paid in such Collection Period with respect to the Mortgage Loans or Serviced Pari Passu Companion Loans serviced by it (other than a Non-Serviced Mortgage Loan or a Specially Serviced Loan) and (B) all Prepayment Interest Excess received during the related Collection Period on the Mortgage Loans or Serviced Companion
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Loans (other than a Non-Serviced Mortgage Loan or a Specially Serviced Loan) serviced by the Master Servicer;provided that if any Prepayment Interest Shortfall occurs with respect to any Mortgage Loan as a result of the Master Servicer’s failure to enforce the related Mortgage Loan Documents (other than in connection with (a) a Non-Serviced Mortgage Loan, (b) a Specially Serviced Loan, (c) a previously Specially Serviced Loan with respect to which the Special Servicer has waived or amended the prepayment restriction such that the related borrower is not required to prepay on a Due Date or pay interest that would have accrued on the amount prepaid through and including the last day of the interest accrual period occurring following the date of such prepayment, (d) pursuant to applicable law or court order or (e) the circumstances covered in clauses (i), (ii), (iii) or (iv) above), the Master Servicer Prepayment Interest Shortfall Amount will be equal to the entire Prepayment Interest Shortfall with respect to that Mortgage Loan. The Master Servicer’s obligation to pay the Master Servicer Prepayment Interest Shortfall Amount, and the rights of the Certificateholders to offset of the aggregate Prepayment Interest Shortfalls against those amounts, will not be cumulative.
“Net Prepayment Interest Shortfall” means with respect to the Mortgage Loans or Serviced Companion Loan serviced by the Master Servicer, the aggregate Prepayment Interest Shortfalls in excess of the Master Servicer Prepayment Interest Shortfall Amount and, with respect to any Non-Serviced Mortgage Loan, any prepayment interest shortfalls in excess of any amount of compensating interest payments required to be paid to the holder of such Mortgage Loan under the related non-serviced pooling servicing agreement. The Net Prepayment Interest Shortfall will generally be allocated to each Class of Regular Certificates,pro rata, based on interest amounts distributable (without giving effect to any such allocation of Net Prepayment Interest Shortfall) to each such Class.
To the extent that the Prepayment Interest Excess for all Mortgage Loans (other than the Non-Serviced Mortgage Loans) or Serviced Companion Loans serviced by the Master Servicer exceeds the Master Servicer Prepayment Interest Shortfall Amounts for all Mortgage Loans (other than the Non-Serviced Mortgage Loans) or Serviced Companion Loans serviced by the Master Servicer as of any Distribution Date, such excess amount (the “Net Prepayment Interest Excess”) will be payable to the Master Servicer as additional compensation.
Subordination
As a means of providing a certain amount of protection to the holders of the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class X-A, Class X-B, Class X-C, Class X-D, Class X-E and Class X-F Certificates against losses associated with delinquent and defaulted Mortgage Loans, the rights of the holders of the Class A-M, Class B, Class C, Class D, Class E, Class F, Class G and Class H Certificates (collectively, the “Subordinate Certificates”) to receive distributions of interest and principal with respect to the Mortgage Loans, as applicable, will be subordinated to such rights of the holders of the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class X-A, Class X-B, Class X-C, Class X-D, Class X-E and Class X-F Certificates. Each Class of Subordinate Certificates (other than the Class H Certificates) will be likewise protected by the subordination of each Class of Certificates with a lower payment priority as described under “—Distributions” in this free writing prospectus. This subordination will be effected in two ways: (i) by the preferential right of the holders of a Class of Regular Certificates to receive on any Distribution Date the amounts of interest and principal distributable in respect of such Class on such date prior to any distribution being made on such Distribution Date in respect of any Classes subordinate to such Class, and (ii) by the allocation of Realized Losses as described under “—Distributions—Realized Losses” in this free writing prospectus. No other form of credit enhancement will be available for the benefit of the holders of the Offered Certificates.
Allocation of principal distributions to the Class A-1, Class A-2, Class A-SB, Class A-3 and Class A-4 Certificates will have the effect of reducing the aggregate Certificate Balance of the Class A-1, Class A-2, Class A-SB, Class A-3 and Class A-4 Certificates at a proportionately faster rate than the rate at which the aggregate Stated Principal Balance of the Mortgage Pool will reduce. Thus, as principal is distributed to the holders of the Class A-1, Class A-2, Class A-SB, Class A-3 and Class A-4 Certificates, the percentage interest in the Issuing Entity evidenced by the Class A-1, Class A-2, Class A-SB, Class A-3 and Class A-4 Certificates will be decreased (with a corresponding increase in the percentage interest in
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the Issuing Entity evidenced by the Subordinate Certificates), thereby increasing, relative to their respective Certificate Balances, the subordination afforded the Class A-1, Class A-2, Class A-SB, Class A-3 and Class A-4 Certificates by the Subordinate Certificates.
Appraisal Reductions
Upon an Appraisal Reduction Event (described below), an Appraisal Reduction Amount will be calculated. An “Appraisal Reduction Event” with respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Loan Combination, is the earliest of (i) the date on which such Mortgage Loan or Serviced Loan Combination becomes a Modified Mortgage Loan (as defined below), (ii) the 90th day following the occurrence of any uncured delinquency in Monthly Payments with respect to such Mortgage Loan or Loan Combination, (iii) receipt of notice that the related borrower has filed a bankruptcy petition or the date on which a receiver is appointed and continues in such capacity in respect of a Mortgaged Property securing such Mortgage Loan or Serviced Loan Combination or the 60th day after the related borrower becomes the subject of involuntary bankruptcy proceedings and such proceedings are not dismissed in respect of a Mortgaged Property securing such Mortgage Loan or Serviced Loan Combination, (iv) the date on which the Mortgaged Property securing such Mortgage Loan or Serviced Loan Combination becomes a Serviced REO Property, and (v) with respect to a Balloon Loan, a payment default shall have occurred with respect to the related balloon payment;provided,however, if (A) the related borrower is diligently seeking a refinancing commitment (and delivers a statement to that effect to the Master Servicer within thirty (30) days after the default, who shall promptly deliver a copy to the Special Servicer, the Operating Advisor and the Directing Holder (but only for so long as no Consultation Termination Event has occurred and is continuing)), (B) the related borrower continues to make its Assumed Scheduled Payment, (C) no other Appraisal Reduction Event has occurred with respect to that Mortgage Loan or Serviced Loan Combination, and (D) for so long as no Control Termination Event has occurred and is continuing, the Directing Holder consents, an Appraisal Reduction Event will not occur until sixty (60) days beyond the related maturity date, unless extended by the Special Servicer in accordance with the Mortgage Loan Documents or the Pooling and Servicing Agreement; and provided, further, if the related borrower has delivered to the Master Servicer, who shall have promptly delivered a copy to the Special Servicer, the Operating Advisor and the Directing Holder (but only for so long as no Consultation Termination Event has occurred and is continuing), on or before the 60th day after the related maturity date, a refinancing commitment reasonably acceptable to the Special Servicer, and the borrower continues to make its Assumed Scheduled Payments (and no other Appraisal Reduction Event has occurred with respect to that Mortgage Loan or Serviced Loan Combination), an Appraisal Reduction Event will not occur until the earlier of (1) one hundred twenty (120) days beyond the related maturity date (or extended maturity date) and (2) the termination of the refinancing commitment.
The “Appraisal Reduction Amount” for any Distribution Date and for any Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Loan Combination as to which an Appraisal Reduction Event has occurred will be an amount calculated by the Master Servicer (and if no Consultation Termination Event has occurred and is continuing in consultation with the Directing Holder, and, if a Control Termination Event has occurred and is continuing, in consultation with the Operating Advisor to the extent described under “The Pooling and Servicing Agreement—The Operating Advisor” in this free writing prospectus) by the first Determination Date following the date the Master Servicer receives from the Special Servicer the required appraisal or the Special Servicer’s Small Loan Appraisal Estimate (and thereafter by the first Determination Date following any material change in the amounts set forth in the following equation) equal to the excess, if any, of (a) the Stated Principal Balance of such Mortgage Loan or Serviced Loan Combination over (b) the excess of (i) the sum of (A) 90% of the sum of the appraised values (net of any prior mortgage liens) of the related Mortgaged Properties securing such Mortgage Loan or Serviced Loan Combination as determined by Updated Appraisals obtained by the Special Servicer (the costs of which shall be paid by the Master Servicer as a Property Advance) minus any downward adjustments the Special Servicer deems appropriate in accordance with the Servicing Standard (without implying any duty to do so) based upon its review of the Appraisal and any other information it may deem appropriate or, in the case of a Mortgage Loan or Serviced Loan Combination having a Stated Principal Balance under $2,000,000, 90% of the sum of the Small Loan Appraisal
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Estimates of the related Mortgaged Properties, as described below, plus (B) all escrows and reserves (other than escrows and reserves for taxes and insurance) plus (C) all insurance and casualty proceeds and condemnation awards that constitute collateral for the related Mortgage Loan or Serviced Loan Combination (whether paid or then payable by any insurance company or government authority) over (ii) the sum of (without duplication) (A) to the extent not previously advanced by the Master Servicer or the Trustee, all unpaid interest on such Mortgage Loan or Serviced Loan Combination at aper annum rate equal to the Mortgage Rate (or with respect to the applicable Serviced Loan Combination, the weighted average of its Mortgage Rates), (B) all unreimbursed Property Advances and the principal portion of all unreimbursed P&I Advances, and all unpaid interest on Advances at the Advance Rate in respect of such Mortgage Loan or Serviced Loan Combination, (C) any other unpaid additional expenses of the Issuing Entity in respect of such Mortgage Loan or Serviced Loan Combination and (D) all currently due and unpaid real estate taxes, ground rents and assessments and insurance premiums (net of any escrows or reserves therefor) that have not been the subject of an Advance by the Master Servicer or the Trustee, as applicable, and (E) all other amounts due and unpaid with respect to such Mortgage Loan or Serviced Loan Combination that, if not paid by the related borrower, would result in a shortfall in distributions to the Certificateholders, except for Prepayment Premiums and Yield Maintenance Charges payable due to an acceleration of such Mortgage Loan or Serviced Loan Combination following a default thereunder;provided that if the Special Servicer has not received an appraisal, Updated Appraisal or Small Loan Appraisal Estimate within sixty (60) days after the Appraisal Reduction Event (or in the case of an Appraisal Reduction Event occurring by reason of clause (ii) of the definition thereof, within thirty (30) days of the Appraisal Reduction Event), the Appraisal Reduction Amount will be deemed to be an amount equal to 25% of the current Stated Principal Balance of the related Mortgage Loan or Serviced Loan Combination until an Updated Appraisal or Small Loan Appraisal Estimate is received and the Appraisal Reduction Amount is recalculated.
Within sixty (60) days after an Appraisal Reduction Event (or in the case of an Appraisal Reduction Event occurring by reason of clause (ii) of the definition thereof, within thirty (30) days of the Appraisal Reduction Event) (i) with respect to Mortgage Loans (other than a Non-Serviced Mortgage Loan) or an applicable Serviced Loan Combination having a Stated Principal Balance of $2,000,000 or higher, the Special Servicer will be required to order and use commercially reasonable efforts to obtain an Updated Appraisal, and (ii) for Mortgage Loans (other than a Non-Serviced Mortgage Loan) or an applicable Serviced Loan Combination having a Stated Principal Balance under $2,000,000, the Special Servicer will be required, at its option, (A) to provide its good faith estimate (a “Small Loan Appraisal Estimate”) of the value of the Mortgaged Properties within the same time period as an appraisal would otherwise be required and such Small Loan Appraisal Estimate will be used in lieu of an Updated Appraisal to calculate an Appraisal Reduction Amount for such Mortgage Loans or applicable Serviced Loan Combination, or (B) to order and use commercially reasonable efforts to obtain an Updated Appraisal. On the first Distribution Date occurring on or after the delivery of such an Updated Appraisal or completion of such Small Loan Appraisal Estimate, as applicable, the Master Servicer will be required to adjust the Appraisal Reduction Amount to take into account such Updated Appraisal or Small Loan Appraisal Estimate, as applicable, obtained from the Special Servicer.
Other than with respect to a Non-Serviced Mortgage Loan, contemporaneously with the earliest of (i) the effective date of any modification of the maturity date or extended maturity date, Mortgage Rate, principal balance or amortization terms of any Mortgage Loan or Serviced Loan Combination or any other term thereof, any extension of the maturity date or extended maturity date of a Mortgage Loan or Serviced Loan Combination or consent to the release of any Mortgaged Property or REO Property from the lien of the related Mortgage other than pursuant to the terms of the Mortgage Loan or Serviced Loan Combination; (ii) the occurrence of an Appraisal Reduction Event; (iii) a default in the payment of a balloon payment for which an extension has not been granted; or (iv) the date on which the Special Servicer, consistent with the Servicing Standard, requests an Updated Appraisal, the Special Servicer will be required to use commercially reasonable efforts to obtain an Updated Appraisal (or a letter update for an existing appraisal which is less than two years old) of the Mortgaged Property or REO Property, as the case may be, from an independent MAI appraiser (an “Updated Appraisal”) or a Small Loan Appraisal Estimate, as applicable, in each case within 60 days of such request,provided that, the Special Servicer will not be required to obtain an Updated Appraisal or Small Loan Appraisal Estimate of any Mortgaged
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Property with respect to which there exists an appraisal or Small Loan Appraisal Estimate which is less than 9 months old. The Special Servicer will be required to update, every 9 months, each Small Loan Appraisal Estimate or Updated Appraisal for so long as the related Mortgage Loan or Serviced Loan Combination remains specially serviced.
Each Serviced Loan Combination will be treated as a single mortgage loan for purposes of calculating an Appraisal Reduction Amount with respect to the mortgage loans that comprise such Serviced Loan Combination. Any appraisal reduction with respect to a Serviced Loan Combination will be allocatedfirst, to the related Subordinate Companion Loan, if any, in accordance with the terms of the related intercreditor agreement to notionally reduce the related outstanding principal balance to zero, and then,pro rata, to the related Mortgage Loan and the relatedPari Passu Companion Loan, if any.
In the event that an Appraisal Reduction Event occurs with respect to a Mortgage Loan, the amount to be advanced by the Master Servicer with respect to delinquent payments of interest for such Mortgage Loan will be reduced as described under “The Pooling and Servicing Agreement—Advances” in this free writing prospectus, which will have the effect of reducing the amount of interest available to the most subordinate Class of Certificates then outstanding (i.e., in respect of the Mortgage Loans,first, to the Class H Certificates,then, to the Class G Certificates,then to the Class F Certificates,then, to the Class E Certificates,then, to the Class D Certificates,then, to the Class C Certificates,then, to the Class B Certificates,then, to the Class A-M Certificates, andthen,pro rata based on interest entitlements, to the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class X-A, Class X-B, Class X-C, Class X-D, Class X-E and Class X-F Certificates).
For purposes of determining the Controlling Class (and whether a Control Termination Event has occurred and is continuing) and determining the Voting Rights of the related Classes for purposes of removal of the Special Servicer, Appraisal Reduction Amounts allocated to the Mortgage Loans will be allocated to each class of Sequential Pay Certificates in reverse sequential order to notionally reduce the Certificate Balances until the related Certificate Balance of each such class is reduced to zero (i.e.,first to the Class H Certificates,then, to the Class G Certificates,then, to the Class F Certificates,then, to the Class E Certificates,then, to the Class D Certificates,then, to the Class C Certificates,then, to the Class B Certificates,then, to the Class A-M Certificates, andthen,pro rata based on interest entitlements, to the Class A-1, Class A-2, Class A-SB, Class A-3 and Class A-4 Certificates). With respect to any Appraisal Reduction Amount calculated for purposes of determining the Controlling Class, the appraised value of the related Mortgaged Property will be determined on an “as-is” basis.
The holders of the majority (by Certificate Balance) of any Class of Control Eligible Certificates whose aggregate Certificate Balance, as notionally reduced by Appraisal Reduction Amounts allocated thereto, is less than 25% of the initial Certificate Balance of such Class (such class, an “Appraised-Out Class”) as a result of an allocation of an Appraisal Reduction Amount in respect of such Class will have the right, at their sole expense, to require the Special Servicer to order a second appraisal of any Mortgage Loan (other than a Non-Serviced Mortgage Loan) for which an Appraisal Reduction Event has occurred (such holders, the “Requesting Holders”) and the Special Servicer is required to use its commercially reasonable efforts to obtain an appraisal from an appraiser that is a Member of the Appraisal Institute (“MAI”) reasonably acceptable to the Special Servicer within sixty (60) days from receipt of the Requesting Holders’ written request. Any Appraised-Out Class for which the Requesting Holders are challenging the Appraisal Reduction Amount determination will not exercise any rights of the Controlling Class until such time, if any, as such Class is reinstated as the Controlling Class and the rights of the Controlling Class will be exercised by the most senior Control Eligible Certificates, if any, during such period.
In addition, the Requesting Holders of any Appraised-Out Class will have the right, at their sole expense, to require the Special Servicer to order an additional appraisal of any Mortgage Loan (other than a Non-Serviced Mortgage Loan) for which an Appraisal Reduction Event has occurred if an event has occurred at, or with regard to, the related Mortgaged Property or Mortgaged Properties that would have a material effect on its Appraised Value, and the Special Servicer is required to use reasonable efforts to obtain an appraisal from an MAI appraiser reasonably acceptable to the Special Servicer within 60 days from receipt of the Requesting Holders’ written request;provided that the Special Servicer will
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not be required to obtain such appraisal if it determines in accordance with the Servicing Standard that no events at, or with regard to, the related Mortgaged Property or Mortgaged Properties have occurred that would have a material effect on the Appraised Value of the related Mortgaged Property or Mortgaged Properties. The right of the holders of an Appraised-Out Class to require the Special Servicer to order an additional appraisal as described in this paragraph will be limited to no more frequently than once in any 9-month period with respect to any Mortgage Loan.
Upon receipt of an appraisal requested by holders of an Appraised-Out Class as described above, the Special Servicer will be required to determine, in accordance with the Servicing Standard, whether, based on its assessment of such additional appraisal, any recalculation of the Appraisal Reduction Amount is warranted and, if so warranted is required to direct the Master Servicer, and the Master Servicer will be required, to recalculate such Appraisal Reduction Amount based upon such additional appraisal. If required by any such recalculation, the applicable Appraised-Out Class will be reinstated as the Controlling Class.
Appraisals that are permitted to be obtained by the Special Servicer at the request of holders of an Appraised-Out Class will be in addition to any appraisals that the Special Servicer may otherwise be required to obtain in accordance with the Servicing Standard or the Pooling and Servicing Agreement without regard to any appraisal requests made by any holder of an Appraised-Out Class.
No Appraisal Reduction Amount will exist as to any Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Loan Combination or the related REO Property after the related Mortgage Loan or Serviced Loan Combination has been paid in full, liquidated, repurchased or otherwise removed from the Issuing Entity. In addition, with respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Loan Combination as to which an Appraisal Reduction Event has occurred, such Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Loan Combination will no longer be subject to the Appraisal Reduction Amount if (a) such Mortgage Loan or Serviced Loan Combination has become a Corrected Mortgage Loan (if a Servicing Transfer Event had occurred with respect to the related Mortgage Loan) and (b) no other Appraisal Reduction Event has occurred and is continuing.
An appraisal for any Mortgage Loan (other than a Non-Serviced Mortgage Loan) that has not been brought current for at least three consecutive months (or paid in full, liquidated, repurchased or otherwise disposed of) will be updated every 9 months for so long as an Appraisal Reduction Event exists.
The Non-Serviced Mortgage Loan is subject to provisions in the related pooling and servicing agreement governing such mortgage loan relating to appraisal reductions that may be different than the provisions set forth above. The existence of an appraisal reduction in respect of a Non-Serviced Mortgage Loan will proportionately reduce the Master Servicer’s or the Trustee’s, as the case may be, obligation to make P&I Advances on the Non-Serviced Mortgage Loan and will generally have the effect of reducing the amount otherwise available for current distributions to the holders of the most subordinate Class or Classes of Certificates. If the Master Servicer or the Trustee do not receive notice of an appraisal reduction event and the related appraisal reduction amount with respect to a Non-Serviced Mortgage Loan, it will have no obligation to proportionately reduce the amount of any principal and interest advance required to be made by the Master Servicer or the Trustee for such Non-Serviced Mortgage Loan. With respect to a Non-Serviced Mortgage Loan, the Appraisal Reduction Amount will be the amount calculated by the applicable servicer in accordance with and pursuant to the terms of the related pooling and servicing agreement. With respect to any Non-Serviced Companion Loan that has already been securitized prior to the Closing Date, the Master Servicer, on behalf of the Issuing Entity, will be required to notify the master servicer and the trustee under the other pooling and servicing agreement that governs the servicing of the related Non-Serviced Mortgage Loan that (a) such Non-Serviced Mortgage Loan is included in this trust and (b) upon (i) the existence of an appraisal reduction event and/or (ii) the related calculation of any appraisal reduction amount (or receipt of notice of any such calculation), such master servicer is required to provide to the Master Servicer (who will promptly provide to the Special Servicer and, prior to a Consultation Termination Event, the Directing Holder) and the Trustee prompt notice of the existence of any such appraisal reduction event and/or any such appraisal reduction amount once calculated. With respect to any Serviced Companion Loan, the Master Servicer
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and the Trustee will be required under the Pooling and Servicing Agreement to notify the master servicer and the trustee under the pooling and servicing agreement governing the trust which holds such Serviced Companion Loan of the existence of an appraisal reduction event and related appraisal reduction amount, which notice will be deemed delivered if the Master Servicer or Trustee, as applicable, includes such event and/or amount in its respective monthly statements provided to the other master servicer and other trustee as required under the Pooling and Servicing Agreement.
A “Modified Mortgage Loan” is any Specially Serviced Loan which has been modified by the Special Servicer in a manner that: (a) reduces or delays the amount or timing of any payment of principal or interest due thereon (other than, or in addition to, bringing current Monthly Payments with respect to such Mortgage Loan or Serviced Loan Combination); (b) except as expressly contemplated by the related Mortgage, results in a release of the lien of the Mortgage on any material portion of the related Mortgaged Property without a corresponding Principal Prepayment in an amount not less than the fair market value (as is) of the property to be released; or (c) in the reasonable good faith judgment of the Special Servicer, otherwise materially impairs the value of the security for such Mortgage Loan or Serviced Companion Loan or reduces the likelihood of timely payment of amounts due thereon.
Delivery, Form and Denomination
The Offered Certificates will be issuable in registered form, in minimum denominations of Certificate Balance or Notional Balance, as applicable, of (i) $10,000 with respect to the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class A-M, Class B and Class C Certificates and multiples of $1 in excess thereof and (ii) $100,000with respect to the Class X-A Certificates and in multiples of $1 in excess thereof.
The Offered Certificates will initially be represented by one or more global Certificates for each such Class registered in the name of the nominee of DTC. The Depositor has been informed by DTC that DTC’s nominee will be Cede & Co. No holder of an Offered Certificate will be entitled to receive a certificate issued in fully registered, certificated form (each, a “Definitive Certificate”) representing its interest in such Class, except under the limited circumstances described in the prospectus under “Description of the Certificates—Book-Entry Registration and Definitive Certificates.” Unless and until Definitive Certificates are issued, all references to actions by holders of the Offered Certificates will refer to actions taken by DTC upon instructions received from holders of Offered Certificates through its participating organizations (together with Clearstream Banking Luxembourg, a division of Clearstream International, société anonyme (“Clearstream”) and Euroclear participating organizations, the “Participants”), and all references herein to payments, notices, reports, statements and other information to holders of Offered Certificates will refer to payments, notices, reports and statements to DTC or Cede & Co., as the registered holder of the Offered Certificates, for distribution to holders of Offered Certificates through its Participants in accordance with DTC procedures;provided,however, that to the extent the party responsible for distributing any report, statement or other information has been provided with the name of the beneficial owner of a Certificate (or the prospective transferee of such beneficial owner), such report, statement or other information will be provided to such beneficial owner (or prospective transferee).
Until Definitive Certificates are issued in respect of the Offered Certificates, interests in the Offered Certificates will be transferred on the book-entry records of DTC and its Participants. The Certificate Administrator will initially serve as certificate registrar (in such capacity, the “Certificate Registrar”) for purposes of recording and otherwise providing for the registration of the Offered Certificates.
A “Certificateholder” under the Pooling and Servicing Agreement will be the person in whose name a Certificate is registered in the certificate register maintained pursuant to the Pooling and Servicing Agreement, except that solely for the purpose of giving any consent or taking any action pursuant to the Pooling and Servicing Agreement, any Certificate registered in the name of the Depositor, the Master Servicer, the Special Servicer, any Excluded Special Servicer, the Trustee (in its individual capacity), the Certificate Administrator, a manager of a Mortgaged Property, a borrower or an affiliate of any such party (which determination will be based upon such party’s representations in an Investor Certification
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submitted by such party, upon which the Certificate Registrar will be entitled to conclusively rely) will be deemed not to be outstanding and the Voting Rights to which it is entitled will not be taken into account in determining whether the requisite percentage of Voting Rights necessary to effect any such consent or take any such action has been obtained;provided that (a) for purposes of obtaining the consent of Certificateholders to an amendment to the Pooling and Servicing Agreement, any Certificates beneficially owned by the Master Servicer, Special Servicer or Operating Advisor or an affiliate thereof will be deemed to be outstanding if such amendment does not relate to the increase in compensation or material reduction in obligations of the Master Servicer, Special Servicer, Excluded Special Servicer, Operating Advisor or affiliate thereof (other than solely in its capacity as Certificateholder), in which case such Certificates shall be deemed not to be outstanding; (b) subject to clause (c) below, for purposes of obtaining the consent of Certificateholders to any action proposed to be taken by the Special Servicer with respect to a Specially Serviced Loan or the Excluded Special Servicer with respect to the related Excluded Special Servicer Mortgage Loan, any Certificates beneficially owned by the Special Servicer or the Excluded Special Servicer, as applicable, or an affiliate thereof will be deemed not to be outstanding (provided that any Controlling Class Certificate owned by an Excluded Controlling Class Holder will not be deemed to be outstanding solely with respect to any related Excluded Controlling Class Mortgage Loan; and provided, further that any Controlling Class Certificate owned by the Special Servicer or an affiliate thereof will not be deemed to be outstanding solely with respect to any related Excluded Special Servicer Mortgage Loan); (c) for the purpose of exercising its rights as a member of the Controlling Class or as the Directing Holder (if applicable), any Certificate beneficially owned by the Master Servicer, the Special Servicer or an affiliate thereof will be deemed outstanding; and (d) solely for purposes of providing or distributing any reports, statements or other information pursuant to the Pooling and Servicing Agreement, a Certificateholder will include any beneficial owner (or, subject to the execution of an Investor Certification, a prospective transferee of a beneficial owner) to the extent that the party required or permitted to provide or distribute such report, statement or other information has been provided with the name of such beneficial owner (or prospective transferee). See “Description of the Certificates—Book-Entry Registration and Definitive Certificates” in the prospectus.
“Excluded Controlling Class Mortgage Loan” means any Mortgage Loan or Loan Combination with respect to which the Controlling Class Representative or a Controlling Class Certificateholder is a Borrower Party with respect to such Mortgage Loan or Loan Combination.
No Certificateholder will be a “Party in Interest” as described under 11 U.S.C. Section 1109(b) solely by virtue of its ownership of a Certificate.
Book-Entry Registration
Holders of Offered Certificates may hold their Certificates through DTC (in the United States) or Clearstream or Euroclear (in Europe) if they are Participants of such system, or indirectly through organizations that are participants in such systems. Clearstream and Euroclear will hold omnibus positions on behalf of the Clearstream Participants and the Euroclear Participants, respectively, through customers’ securities accounts in Clearstream’s and Euroclear’s names on the books of their respective depositaries (collectively, the “Depositaries”) which in turn will hold such positions in customers’ securities accounts in the Depositaries’ names on the books of DTC. DTC is a limited purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered pursuant to Section 17A of the Exchange Act. DTC was created to hold securities for its Participants and to facilitate the clearance and settlement of securities transactions between Participants through electronic computerized book-entries, thereby eliminating the need for physical movement of certificates. Participants include securities brokers and dealers, banks, trust companies and clearing corporations. Indirect access to the DTC system also is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (“Indirect Participants”).
Transfers between DTC Participants will occur in accordance with DTC rules. Transfers between Clearstream Participants and Euroclear Participants will occur in accordance with their applicable rules
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and operating procedures. For additional information regarding clearance and settlement procedures for the Offered Certificates and for information with respect to tax documentation procedures relating to the Offered Certificates, see Annex C to this free writing prospectus.
Cross-market transfers between persons holding directly or indirectly through DTC, on the one hand, and directly through Clearstream Participants or Euroclear Participants, on the other, will be effected in DTC in accordance with DTC rules on behalf of the relevant European international clearing system by its Depositary; however, such cross-market transactions will require delivery of instructions to the relevant European international clearing system by the counterparty in such system in accordance with its rules and procedures. If the transaction complies with all relevant requirements, Euroclear or Clearstream, as the case may be, will then deliver instructions to the Depository to take action to effect final settlement on its behalf.
Because of time-zone differences, credits of securities in Clearstream or Euroclear as a result of a transaction with a DTC Participant will be made during the subsequent securities settlement processing, dated the business day following the DTC settlement date, and such credits or any transactions in such securities settled during such processing will be reported to the relevant Clearstream Participant or Euroclear Participant on such business day. Cash received in Clearstream or Euroclear as a result of sales of securities by or through a Clearstream Participant or a Euroclear Participant to a DTC Participant will be received with value on the DTC settlement date but will be available in the relevant Clearstream or Euroclear cash account only as of the business day following settlement in DTC.
The holders of Offered Certificates that are not Participants or Indirect Participants but desire to purchase, sell or otherwise transfer ownership of, or other interests in, Offered Certificates may do so only through Participants and Indirect Participants. In addition, holders of Offered Certificates will receive all distributions of principal and interest from the Certificate Administrator through the Participants who in turn will receive them from DTC. Under a book-entry format, holders of Offered Certificates may experience some delay in their receipt of payments, reports and notices, since such payments, reports and notices will be forwarded by the Certificate Administrator to Cede & Co., as nominee for DTC. DTC will forward such payments, reports and notices to its Participants, which thereafter will forward them to Indirect Participants, Clearstream, Euroclear or holders of Offered Certificates.
Under the rules, regulations and procedures creating and affecting DTC and its operations (the “Rules”), DTC is required to make book-entry transfers of Offered Certificates among Participants on whose behalf it acts with respect to the Offered Certificates and to receive and transmit distributions of principal of, and interest on, the Offered Certificates. Participants and Indirect Participants with which the holders of Offered Certificates have accounts with respect to the Offered Certificates similarly are required to make book-entry transfers and receive and transmit such payments on behalf of their respective holders of Offered Certificates. Accordingly, although the holders of Offered Certificates will not possess the Offered Certificates, the Rules provide a mechanism by which Participants will receive payments on Offered Certificates and will be able to transfer their interest.
Because DTC can only act on behalf of Participants, who in turn act on behalf of Indirect Participants and certain banks, the ability of a holder of Offered Certificates to pledge such Certificates to persons or entities that do not participate in the DTC system, or to otherwise act with respect to such Certificates, may be limited due to the lack of a physical certificate for such Certificates.
DTC has advised the Depositor that it will take any action permitted to be taken by a holder of an Offered Certificate under the Pooling and Servicing Agreement only at the direction of one or more Participants to whose accounts with DTC the Offered Certificates are credited. DTC may take conflicting actions with respect to other undivided interests to the extent that such actions are taken on behalf of Participants whose holdings include such undivided interests.
Clearstream is incorporated under the laws of Luxembourg as a professional depository. Clearstream holds securities for its participating organizations (“Clearstream Participants”) and facilitates the clearance and settlement of securities transactions between Clearstream Participants through
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electronic book-entry changes in accounts of Clearstream Participants, thereby eliminating the need for physical movement of certificates.
Euroclear was created in 1968 to hold securities for participants of the Euroclear system (“Euroclear Participants”) and to clear and settle transactions between Euroclear Participants through simultaneous electronic book-entry delivery against payment.
Securities clearance accounts and cash accounts with the Euroclear Operator are governed by the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System and applicable Belgian law (collectively, the “Terms and Conditions”). The Terms and Conditions govern transfers of securities and cash within the Euroclear system, withdrawal of securities and cash from the Euroclear system, and receipts of payments with respect to securities in the Euroclear system.
Although DTC, Euroclear and Clearstream have implemented the foregoing procedures in order to facilitate transfers of interests in global certificates among Participants of DTC, Euroclear and Clearstream, they are under no obligation to perform or to continue to comply with such procedures, and such procedures may be discontinued at any time. None of the Depositor, the Trustee, the Certificate Administrator, the Master Servicer, the Special Servicer, the Operating Advisor or the Underwriters will have any responsibility for the performance by DTC, Euroclear or Clearstream or their respective direct or indirect Participants of their respective obligations under the rules and procedures governing their operations.
The information herein concerning DTC, Clearstream and Euroclear and their book entry systems has been obtained by the Depositor from DTC, Clearstream and Euroclear and other sources that the Depositor believes to be reliable.
Definitive Certificates
Definitive Certificates will be delivered to beneficial owners of the Certificates (“Certificate Owners”) (or their nominees) only if (i) DTC is no longer willing or able properly to discharge its responsibilities as depository with respect to the book-entry certificates, and the Depositor is unable to locate a qualified successor or (ii) the Depositor, at its sole option, elects to terminate the book-entry system through DTC with respect to some or all of any Class or Classes of Certificates.
Upon the occurrence of any of the events described in clauses (i) or (ii) in the immediately preceding paragraph, the Certificate Administrator is required to notify all affected Certificateholders (through DTC and related DTC Participants) of the availability through DTC of Definitive Certificates. Upon delivery of Definitive Certificates, the Trustee, the Certificate Administrator, the Certificate Registrar and the Master Servicer will recognize the holders of such Definitive Certificates as holders under the Pooling and Servicing Agreement (“Holders”). Distributions of principal and interest on the Definitive Certificates will be made by the Certificate Administrator directly to Holders of Definitive Certificates in accordance with the procedures set forth in the Prospectus and the Pooling and Servicing Agreement.
Upon the occurrence of any of the events described in clauses (i) or (ii) of the second preceding paragraph, requests for transfer of Definitive Certificates will be required to be submitted directly to the Certificate Registrar in a form acceptable to the Certificate Registrar (such as the forms which will appear on the back of the certificate representing a Definitive Certificate), signed by the Holder or such Holder’s legal representative and accompanied by the Definitive Certificate or Certificates for which transfer is being requested. The Certificate Administrator will be appointed as the initial Certificate Registrar.
Certificateholder Communication
Access to Certificateholders’ Names and Addresses
Upon the written request of any Certificateholder or Certificate Owner that has delivered an executed Investor Certification to the Certificate Administrator (a “Certifying Certificateholder”) or the Master
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Servicer, the Certificate Registrar will furnish or cause to be furnished to such requesting party a list of the names and addresses of the Certificateholders as of the most recent Record Date, at the expense of the requesting party.
Special Notices
Upon the written request of any Certifying Certificateholder, the Certificate Administrator will mail a special notice to all Certificateholders at their respective addresses appearing on the certificate register stating that the requesting Certificateholder wishes to be contacted by other Certificateholders, setting forth the relevant contact information and briefly stating the reason for the requested contact, at the expense of the requesting Certificateholder. The Certificate Administrator will be entitled to reimbursement from the Certifying Certificateholder for the reasonable expenses of posting such special notices.
Retention of Certain Certificates by Affiliates of Transaction Parties
Affiliates of the Mortgage Loan Sellers, the Depositor, the Trustee, the Certificate Administrator, the Master Servicer and the Special Servicer may retain certain Classes of Certificates. Any such party will have the right to dispose of such Certificates at any time.
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YIELD AND MATURITY CONSIDERATIONS
Yield Considerations
General. The yield on any Offered Certificate will depend on: (i) the Pass-Through Rate in effect from time to time for that Certificate; (ii) the price paid for that Certificate and the rate and timing of payments of principal on that Certificate; and (iii) the aggregate amount of distributions on that Certificate.
Pass-Through Rate. The Pass-Through Rate, if any, applicable to each Class of Offered Certificates for any Distribution Date will be the rate specified in the definition of the “Pass-Through Rate” in the “Description of the Offered Certificates—Distributions” in this free writing prospectus. The yield to maturity on the Offered Certificates will be sensitive to changes in the relative composition of the Mortgage Loans as a result of scheduled amortization, voluntary prepayments, and liquidations of Mortgage Loans following default and repurchases of Mortgage Loans. Losses or payments of principal on the Mortgage Loans with higher Net Mortgage Pass-Through Rates could result in a reduction in the Weighted Average Net Mortgage Pass-Through Rate, thereby, to the extent that the rate applicable to a particular Class of Offered Certificates is not a fixed rate, reducing the Pass-Through Rate on such Class of Offered Certificates.
See “Yield and Maturity Considerations” in the prospectus, “Description of the Offered Certificates” and “Description of the Mortgage Pool” in this free writing prospectus and “—Rate and Timing of Principal Payments” below.
Rate and Timing of Principal Payments. The yield to maturity to holders of the Certificates will be affected by the rate and timing of principal payments on the Mortgage Loans (including Principal Prepayments on the Mortgage Loans resulting from both voluntary prepayments by the borrowers and involuntary liquidations). The rate and timing of principal payments on the Mortgage Loans will in turn be affected by, among other things, the amortization schedules thereof or the dates on which balloon payments and the rate and timing of Principal Prepayments (including payments on the Anticipated Repayment Date for the ARD Loan) and other unscheduled collections thereon (including for this purpose, collections made in connection with liquidations of Mortgage Loans due to defaults, casualties or condemnations affecting the Mortgaged Properties, or purchases of Mortgage Loans out of the Issuing Entity). Prepayments and, assuming the respective stated maturity dates or Anticipated Repayment Dates thereof have not occurred, liquidations and purchases of the Mortgage Loans, will result in distributions on the Sequential Pay Certificates of amounts that otherwise would have been distributed over the remaining terms of the Mortgage Loans. Defaults on the Mortgage Loans, particularly at or near their stated maturity dates, may result in significant delays in payments of principal on the Mortgage Loans (and, accordingly, on the Sequential Pay Certificates) while workouts are negotiated or foreclosures are completed. See “The Pooling and Servicing Agreement—Amendment” and “—Modifications,” in this free writing prospectus and “Description of the Pooling Agreements—Realization Upon Defaulted Mortgage Loans” and “Certain Legal Aspects of the Mortgage Loans—Foreclosure” in the prospectus. Because the rate of principal payments on the Mortgage Loans will depend on future events and a variety of factors (as described below), no assurance can be given as to such rate or the rate of Principal Prepayments in particular. The Depositor is not aware of any relevant publicly available or authoritative statistics with respect to the historical prepayment experience of a large group of mortgage loans comparable to the Mortgage Loans.
See “Risk Factors—Risks Related to the Mortgage Loans—Borrower May Be Unable To Repay the Remaining Principal Balance on the Maturity Date or Anticipated Repayment Date and Longer Amortization Schedules and Interest-Only Provisions May Increase Risk” in this free writing prospectus.
In addition, although the borrowers under an ARD Loan may have certain incentives to prepay such ARD Loan on its Anticipated Repayment Date, the Depositor makes no assurance that any borrower will be able to prepay any ARD Loan on its Anticipated Repayment Date. The failure of a borrower to prepay an ARD Loan on its Anticipated Repayment Date will not be an event of default under the terms of such
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ARD Loan, and, pursuant to the terms of the Pooling and Servicing Agreement, neither the Master Servicer nor the Special Servicer will be permitted to take any enforcement action with respect to a borrower’s failure to pay Excess Interest, other than requests for collection, until the scheduled maturity of such ARD Loan; provided that the Master Servicer or the Special Servicer, as the case may be, may take action to enforce the trust’s right to apply excess cash flow to principal in accordance with the terms of the related Mortgage Loan Documents. See “Risk Factors—Risks Related to the Mortgage Loan—Borrower May Be Unable To Repay the Remaining Principal Balance on the Maturity Date or Anticipated Repayment Date and Longer Amortization Schedules and Interest-Only Provisions May Increase Risk” in this free writing prospectus.
With respect to the Class A-SB Certificates, the extent to which the planned principal balances are achieved and the sensitivity of the Class A-SB Certificates to principal prepayments on the Mortgage Loans will depend in part on the period of time during which the Class A-1, Class A-2, Class A-3 and Class A-4 Certificates remain outstanding. As such, the Class A-SB Certificates will become more sensitive to the rate of prepayments on the Mortgage Loans if the Class A-1, Class A-2, Class A-3 and Class A-4 Certificates are not outstanding.
The extent to which the yield to maturity of an Offered Certificate may vary from the anticipated yield will depend upon the degree to which such Certificate is purchased at a discount or premium and when, and to what degree, payments of principal on the Mortgage Loans are in turn distributed on or otherwise result in the reduction of the Certificate Balance of such Certificate. An investor should consider, in the case of an Offered Certificate purchased at a discount, the risk that a slower than anticipated rate of principal payments on such Certificate could result in an actual yield to such investor that is lower than the anticipated yield and, in the case of an Offered Certificate purchased at a premium, the risk that a faster than anticipated rate of principal payments on such Certificate could result in an actual yield to such investor that is lower than the anticipated yield. In general, the earlier a payment of principal is made on an Offered Certificate purchased at a discount or premium, the greater will be the effect on an investor’s yield to maturity. As a result, the effect on an investor’s yield to maturity of principal payments on such investor’s Offered Certificates occurring at a rate higher (or lower) than the rate anticipated by the investor during any particular period would not be fully offset by a subsequent like reduction (or increase) in the rate of principal payments.
Losses and Shortfalls. The yield to holders of the Offered Certificates will also depend on the extent to which the holders are required to bear the effects of any losses or shortfalls on the Mortgage Loans. Except as described herein, losses and other shortfalls on the Mortgage Loans will generally be allocated to Class H, Class G, Class F, Class E, Class D, Class C, Class B and the Class A-M Certificates, in that order, reducing amounts otherwise payable to each Class, and any remaining losses will then be allocated to the Class A-1, Class A-2, Class A-SB, Class A-3 and Class A-4 Certificates, and, with respect to interest losses only, the Class X-A, Class X-B, Class X-C, Class X-D, Class X-E and Class X-F Certificates based on their respective entitlementspro rata. Further, any Net Prepayment Interest Shortfall for each Distribution Date will be allocated on such Distribution Date among each Class of Regular Certificates,pro rata, in accordance with the respective Interest Accrual Amounts for each such Class of Certificates for such Distribution Date (without giving effect to any such allocation of Net Prepayment Interest Shortfall).
Certain Relevant Factors. The rate and timing of principal payments and defaults and the severity of losses on the Mortgage Loans may be affected by a number of factors, including, without limitation, prevailing interest rates, the terms of the Mortgage Loans (for example, Prepayment Premiums, prepayment lock-out periods, and amortization terms that require balloon payments), the demographics and relative economic vitality of the areas in which the Mortgaged Properties are located and the general supply and demand for comparable residential and/or commercial space in such areas, the quality of management of the Mortgaged Properties, the servicing of the Mortgage Loans, possible changes in tax laws and other opportunities for investment. See “Risk Factors” and “Description of the Mortgage Pool” in this free writing prospectus and “Risk Factors” and “Yield and Maturity Considerations—Yield and Prepayment Considerations” in the prospectus.
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The rate of prepayment on a Mortgage Loan is likely to be affected by prevailing market interest rates for mortgage loans of a comparable type, term and risk level. When the prevailing market interest rate is below a mortgage coupon, a borrower may have an increased incentive to refinance its mortgage loan. If a Mortgage Loan is not in a Lock-Out Period, the Prepayment Premium or Yield Maintenance Charge, if any, in respect of such Mortgage Loan may not be sufficient economic disincentive to prevent the related borrower from voluntarily prepaying the Mortgage Loan as part of a refinancing thereof. See “Description of the Mortgage Pool—Certain Terms and Conditions of the Mortgage Loans” in this free writing prospectus.
The yield on any Class of Certificates whose Pass-Through Rate is affected by the Weighted Average Net Mortgage Pass-Through Rate could also be adversely affected if Mortgage Loans with higher interest rates pay faster than the Mortgage Loans with lower interest rates, since those Classes bear interest at a rate limited by, equal to, or based on the weighted average of the net mortgage interest rates on the Mortgage Loans. The Pass-Through Rates on such Certificates may be limited by, equal to, or based on the weighted average of the net mortgage interest rates on the Mortgage Loans even if principal prepayments do not occur.
Delay in Payment of Distributions. Because monthly distributions will not be made to Certificateholders until a date that is scheduled to be at least 10 days following the end of the related Interest Accrual Period, the effective yield to the holders of the Offered Certificates will be lower than the yield that would otherwise be produced by the applicable Pass-Through Rates and purchase prices (assuming such prices did not account for such delay).
Unpaid Interest. As described under “Description of the Offered Certificates—Distributions” in this free writing prospectus, if the portion of the Available Funds to be distributed in respect of interest on any Class of Offered Certificates on any Distribution Date is less than the respective Interest Accrual Amount for such Class, the shortfall will be distributable to holders of such Class of Certificates on subsequent Distribution Dates, to the extent of available funds. Any such shortfall will not bear interest, however, and will therefore negatively affect the yield to maturity of such Class of Certificates for so long as it is outstanding.
Weighted Average Life
The weighted average life of a Sequential Pay Certificate refers to the average amount of time that will elapse from the date of its issuance until each dollar allocable to principal of such Certificate is distributed to the investor. For purposes of this free writing prospectus, the weighted average life of a Sequential Pay Certificate is determined by (i) multiplying the amount of each principal distribution thereon by the number of years from the Closing Date to the related Distribution Date, (ii) summing the results and (iii) dividing the sum by the aggregate amount of the reductions in the Certificate Balance of such Certificate. Accordingly, the weighted average life of any such Certificate will be influenced by, among other things, the rate at which principal of the Mortgage Loans is paid or otherwise collected or advanced and the extent to which such payments, collections or advances of principal are in turn applied in reduction of the Certificate Balance of the Class of Certificates to which such Certificate belongs. If the balloon payment on a Balloon Loan having a Due Date after the Determination Date in any month is received on the stated maturity date thereof, the excess of such payment over the related Assumed Scheduled Payment will not be included in the Available Funds until the Distribution Date in the following month. Therefore, the weighted average life of the Sequential Pay Certificates may be extended.
Prepayments on mortgage loans may be measured by a prepayment standard or model. The model used in this free writing prospectus is the Constant Prepayment Rate (“CPR”) model. The CPR model assumes that a group of mortgage loans experiences prepayments each month at a specified constant annual rate. As used in each of the following sets of tables with respect to any particular Class, the column headed “0%” assumes that none of the Mortgage Loans is prepaid before maturity or, with respect to an ARD Loan, the Anticipated Repayment Date. The columns headed “25%,” “50%,” “75%,” and “100%” assume that no prepayments are made on any Mortgage Loan during such Mortgage Loan’s Lock-Out Period, Defeasance Period, Yield Maintenance Period or Prepayment Premium Lock-Out
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Period, in each case if any, and are otherwise made on each of the Mortgage Loans at the indicated CPR percentages. There is no assurance, however, that prepayments of the Mortgage Loans (whether or not in a Lock-Out Period, Defeasance Period, Yield Maintenance Period or Prepayment Premium Lock-Out Period) will conform to any particular CPR percentages, and no representation is made that the Mortgage Loans will prepay in accordance with the assumptions at any of the CPR percentages shown or at any other particular prepayment rate, that all the Mortgage Loans will prepay in accordance with the assumptions at the same rate or that Mortgage Loans that are in a Lock-Out Period, Defeasance Period, Yield Maintenance Period or Prepayment Premium Lock-Out Period will not prepay as a result of involuntary liquidations upon default or otherwise.
The tables set forth on Annex D to this free writing prospectus indicate the percentage of the initial Certificate Balance of each Class of Offered Certificates (other than the Class X-A Certificates) that would be outstanding after the Distribution Date in each of the months shown at the indicated CPR percentages and the corresponding weighted average life of each such Class of Certificates. The tables have been prepared on the basis of the information set forth in this free writing prospectus under “Description of the Mortgage Pool—Additional Mortgage Loan Information” and on Annex A-1 to this free writing prospectus and the following assumptions (collectively, the “Modeling Assumptions”):
(a) the initial Certificate Balance, Notional Balance and the Pass-Through Rate for each Class of Certificates are as set forth in this free writing prospectus;
(b) the scheduled Monthly Payments for each Mortgage Loan are based on such Mortgage Loan’s Cut-off Date Balance, stated monthly principal and interest payments, and the Mortgage Rate in effect as of the Cut-off Date for such Mortgage Loan;
(c) all scheduled Monthly Payments (including balloon payments) are assumed to be timely received on the first day of each month commencing in November 2015;
(d) there are no delinquencies or losses in respect of the Mortgage Loans, there are no extensions of maturity in respect of the Mortgage Loans, there are no Appraisal Reduction Amounts applied to the Mortgage Loans, there are no casualties or condemnations affecting the Mortgaged Properties and no holdback amounts are applied to reduce the principal balance of any Mortgage Loan;
(e) prepayments are made on each of the Mortgage Loans at the indicated CPR percentages set forth in the table (without regard to any limitations in such Mortgage Loans on partial voluntary principal prepayments) except to the extent modified below by the assumption lettered (l);
(f) all Mortgage Loans accrue interest under the method specified in Annex A-1 to this free writing prospectus. See “Description of the Mortgage Pool—Certain Terms and Conditions of the Mortgage Loans” in this free writing prospectus;
(g) no party exercises its right of optional termination described in this free writing prospectus and no party that is entitled to under the Pooling and Servicing Agreement will exercise its option to purchase all of the Mortgage Loans and thereby cause an early termination of the Issuing Entity;
(h) no Mortgage Loan will be repurchased by the related Mortgage Loan Seller for a breach of a representation or warranty or a document defect in the mortgage file and no purchase option holder (permitted to buy out a Mortgage Loan under the related Mortgage Loan Documents, any intercreditor agreement, any co-lender agreement or the Pooling and Servicing Agreement) will exercise its option to purchase such Mortgage Loan;
(i) no Prepayment Interest Shortfalls are incurred and no Prepayment Premiums or Yield Maintenance Charges are collected;
(j) there are no additional expenses of the Issuing Entity;
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(k) distributions on the Certificates are made on the 10th calendar day in each month, commencing in November 2015;
(l) no prepayments are received as to any Mortgage Loan during such Mortgage Loan’s Lock-Out Period, if any, Defeasance Period, if any, or Yield Maintenance Period, if any, or Prepayment Premium Lock-Out Period, if any;
(m) no partial prepayments are received as to any Mortgage Loan in connection with a partial release of the related Mortgaged Property or Mortgaged Properties securing such Mortgage Loan;
(n) the Closing Date is October 29, 2015;
(o) each ARD Loan is paid in full on its Anticipated Repayment Date;
(p) with respect to each Mortgage Loan, the primary servicing fee, the Master Servicing Fee, the Trustee/Certificate Administrator Fee, the Operating Advisor Fee and the CREFC® License Fee accrue on the same basis as interest accrues on such Mortgage Loan and with respect to the Non-Serviced Mortgage Loan, separate servicing fees as set forth in the related servicing agreement are calculated on the same basis as interest accrues on the related Loan Combination; and
(q) the Mortgage Loan secured by the Mortgaged Properties identified on Annex A-1 to this free writing prospectus as Atlanta Multifamily Portfolio amortizes based on the amortization schedule attached as Annex H to this free writing prospectus.
To the extent that the Mortgage Loans have characteristics or experience performance that differs from those assumed in preparing the tables set forth in Annex D to this free writing prospectus, the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class A-M, Class B and Class C Certificates may mature earlier or later than indicated by the tables. It is highly unlikely that the Mortgage Loans will prepay or perform in accordance with the Modeling Assumptions at any constant rate until maturity or that all the Mortgage Loans will prepay in accordance with the Modeling Assumptions or at the same rate. In particular, certain of the Mortgage Loans may not permit voluntary partial Principal Prepayments or may permit the application of certain holdback amounts as a repayment of principal if certain conditions are not satisfied. In addition, variations in the actual prepayment experience and the balance of the specific Mortgage Loans that prepay may increase or decrease the percentages of initial Certificate Balances (and weighted average lives) shown in the tables set forth on Annex D to this free writing prospectus. Such variations may occur even if the average prepayment experience of the Mortgage Loans were to equal any of the specified CPR percentages. In addition, there can be no assurance that the actual pre-tax yields on, or any other payment characteristics of, any Class of Offered Certificates will correspond to any of the information shown in the yield tables in this free writing prospectus, or that the aggregate purchase prices of the Offered Certificates will be as assumed. Accordingly, investors must make their own decisions as to the appropriate assumptions (including prepayment assumptions) to be used in deciding whether to purchase the Offered Certificates.
Investors are urged to conduct their own analyses of the rates at which the Mortgage Loans may be expected to prepay.
Based on the Modeling Assumptions, the tables set forth in Annex D to this free writing prospectus indicate the resulting weighted average lives of the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class A-M, Class B and Class C Certificates and set forth the percentage of the initial Certificate Balance of each such Class of Certificates that would be outstanding after the Closing Date and each of the Distribution Dates shown under the applicable assumptions at the indicated CPR percentages.
Certain Price/Yield Tables
The tables set forth on Annex E to this free writing prospectus show the corporate bond equivalent (“CBE”) yield, and weighted average life in years with respect to each Class of Offered Certificates.
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The yields set forth on the tables set forth on Annex E to this free writing prospectus were calculated by determining the monthly discount rates which, when applied to the assumed stream of cash flows to be paid on each Class of Certificates, would cause the discounted present value of such assumed stream of cash flows as of the Closing Date to equal the assumed purchase prices, plus accrued interest at the applicable Pass-Through Rate as stated on the cover of this free writing prospectus from and including October 1, 2015 to but excluding the Closing Date, and converting such monthly rates to semi-annual corporate bond equivalent rates. Such calculation does not take into account variations that may occur in the interest rates at which investors may be able to reinvest funds received by them as reductions of the Certificate Balances of such Classes of Certificates and consequently does not purport to reflect the return on any investment in such Classes of Certificates when such reinvestment rates are considered. Purchase prices are interpreted as a percentage of the initial Certificate Balance of the specified Class and are exclusive of accrued interest.
Yield Sensitivity of the Class X-A Certificates
The yield to maturity of the Class X-A Certificates will be especially sensitive to the prepayment, repurchase, default and loss experience on the related Mortgage Loans, which prepayment, repurchase, default and loss experience may fluctuate significantly from time to time. A rapid rate of principal payments will have a material negative effect in varying degrees on the yield to maturity of the Class X-A Certificates. There can be no assurance that the Mortgage Loans will prepay at any particular rate. Prospective investors in the Class X-A Certificates should fully consider the associated risks, including the risk that such investors may not fully recover their initial investment.
The table corresponding to the Class X-A Certificates set forth on Annex E to this free writing prospectus indicates the sensitivity of the pre-tax yield to maturity on such class of the certificates to various CPR percentages on the related Mortgage Loans by projecting the monthly aggregate payments of interest on such Class of Certificates and computing the corresponding pre-tax yields to maturity on a corporate bond equivalent basis, based on the Modeling Assumptions. It was further assumed that the purchase price of such Class of Certificates is as specified in the related table interpreted as a percentage of the initial Notional Balance (without accrued interest). Any differences between such assumptions and the actual characteristics and performance of the related Mortgage Loans and of such Class of Certificates may result in yields to maturity being different from those shown in such table. Discrepancies between assumed and actual characteristics and performance underscore the hypothetical nature of the table, which is provided only to give a general sense of the sensitivity of yields to maturity in varying prepayment scenarios.
The pre-tax yields to maturity set forth in the table corresponding to the Class X-A Certificates set forth on Annex E to this free writing prospectus were calculated by determining the monthly discount rates that, when applied to the assumed streams of cash flows to be paid on such Class of Certificates, would cause the discounted present value of such assumed stream of cash flows as of the Closing Date to equal the assumed aggregate purchase price plus accrued interest at the initial Pass-Through Rate for such Class of Certificates from and including October 1, 2015 to but excluding the Closing Date, and by converting such monthly rates to semi-annual corporate bond equivalent rates. Such calculation does not take into account shortfalls in the collection of interest due to prepayments (or other liquidations) of the Mortgage Loans or the interest rates at which investors may be able to reinvest funds received by them as distributions on such Class of Certificates (and accordingly does not purport to reflect the return on any investment in such Class of Certificates when such reinvestment rates are considered).
Notwithstanding the assumed prepayment rates reflected in the table corresponding to the Class X-A Certificates set forth on Annex E to this free writing prospectus, it is highly unlikely that the Mortgage Loans will be prepaid according to one particular pattern. For this reason, and because the timing of cash flows is critical to determining yields, the pre-tax yield to maturity on such Class of Certificates is likely to differ from those shown in such table, even if all of the related Mortgage Loans prepay at the indicated CPR percentages over any given time period or over the entire life of the Certificates.
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There can be no assurance that the Mortgage Loans will prepay in accordance with the Modeling Assumptions at any particular rate or that the yield to maturity on the Class X-A Certificates will conform to the yields described in this free writing prospectus. Investors are encouraged to make their investment decisions based on the determinations as to anticipated rates of prepayment under a variety of scenarios. Investors in the Class X-A Certificates should fully consider the risk that a rapid rate of prepayments on the related Mortgage Loans could result in the failure of such investors to fully recover their investments.
In addition, holders of any of the Class X-A Certificates generally have rights to relatively larger portions of interest payments on the related Mortgage Loans with higher Mortgage Rates; thus, the yield to maturity on such Class of Certificates will be materially and adversely affected if the Mortgage Loans with higher Mortgage Rates prepay faster than the Mortgage Loans with lower Mortgage Rates.
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THE POOLING AND SERVICING AGREEMENT
General
The Certificates will be issued pursuant to a Pooling and Servicing Agreement, dated as of October 1, 2015 (the “Pooling and Servicing Agreement”), entered into by the Depositor, the Master Servicer, the Special Servicer, the Trustee, the Certificate Administrator and the Operating Advisor.
Reference is made to the prospectus for important information in addition to that set forth in this free writing prospectus regarding the terms of the Pooling and Servicing Agreement and the terms and conditions of the Offered Certificates. The Certificate Administrator will make an electronic copy of the Pooling and Servicing Agreement available to prospective or actual holders of Offered Certificates on its website.
Servicing of the Mortgage Loans and Serviced Loan Combinations; Collection of Payments
The Pooling and Servicing Agreement generally requires the Master Servicer (with respect to the Mortgage Loans (other than any Non-Serviced Mortgage Loan) and Serviced Loan Combinations that are not Specially Serviced Loans) and the Special Servicer (with respect to Specially Serviced Loans (other than any Non-Serviced Mortgage Loan) and REO Loans) (in each case, directly or through one or more sub-servicers) to diligently service and administer the applicable Mortgage Loans (other than any Non-Serviced Mortgage Loan, which will be serviced pursuant to separate servicing agreements), Serviced Loan Combinations, Specially Serviced Loans and REO Loans for which each is responsible, in the best interests of and for the benefit of the Certificateholders and, with respect to each applicable Serviced Loan Combination, for the benefit of the holders of the related Serviced Companion Loans (as a collective whole as if such Certificateholders and Serviced Companion Loan holders constituted a single lender (and with respect to any Serviced Loan Combination with a related Subordinate Companion Loan (if any), taking into account the subordinate nature of such Subordinate Companion Loan), as determined by the Master Servicer or the Special Servicer, as the case may be, in the exercise of its reasonable judgment) in accordance with applicable law, the terms of the Pooling and Servicing Agreement, the applicable Mortgage Loan Documents, the related intercreditor agreement, if any, and, to the extent consistent with the foregoing:
in accordance with the higher of the following standards of care:
(a) the same manner in which, and with the same care, skill, prudence and diligence with which such servicer services and administers similar mortgage loans for other third party portfolios, giving due consideration to the customary and usual standards of practice of prudent institutional commercial, multifamily and manufactured housing community mortgage loan servicers servicing their own mortgage loans with a view to the timely recovery of all payments of principal and interest under the applicable Mortgage Loans or Serviced Loan Combination or, in the case of Defaulted Mortgage Loans and defaulted Serviced Loan Combinations, the maximization of timely recovery of principal and interest on a net present value basis on the applicable Mortgage Loans or Serviced Loan Combinations, in all cases and at all times taking into account the costs to Certificateholders or Serviced Companion Loan holders of any Master Servicer or Special Servicer compensation, and the best interests of the Issuing Entity and the Certificateholders and, with respect to any applicable Serviced Loan Combinations, the holders of the related Serviced Companion Loans (as a collective whole as if such Certificateholders and Serviced Companion Loan holders constituted a single lender (and with respect to any Serviced Loan Combination with a related Subordinate Companion Loan (if any), taking into account the subordinate nature of such Subordinate Companion Loan), as determined by the Master Servicer or the Special Servicer, as the case may be, in its reasonable judgment); and
(b) the same care, skill, prudence and diligence with which such servicer services and administers commercial, multifamily and manufactured housing community mortgage loans owned, if
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any, by it with a view to the timely recovery of all payments of principal and interest under the applicable Mortgage Loans or Serviced Loan Combinations or, in the case of Defaulted Mortgage Loans and defaulted Serviced Loan Combinations, the maximization of timely recovery of principal and interest on a net present value basis on the applicable Mortgage Loans or Serviced Loan Combinations, in all cases and at all times, taking into account the costs to Certificateholders or Serviced Companion Loan holders of any Master Servicer or Special Servicer compensation, and the best interests of the Issuing Entity and the Certificateholders and, with respect to any applicable Serviced Loan Combination, the holders of the related Serviced Companion Loans (as a collective whole as if such Certificateholders and Serviced Companion Loan holders constituted a single lender (and with respect to any Serviced Loan Combination with a related Subordinate Companion Loan (if any), taking into account the subordinate nature of such Subordinate Companion Loan), as determined by the Master Servicer or the Special Servicer, as the case may be, in its reasonable judgment);
(c) but without regard to any potential conflict of interest arising from:
(d) any relationship that such servicer or any affiliate of it, may have with the related borrower, any Mortgage Loan Seller, any other party to the Pooling and Servicing Agreement or any affiliate of any of the foregoing;
(e) the ownership of any Certificate, any Companion Loan or any mezzanine loan related to a Mortgage Loan by such servicer or any affiliate of it;
(f) the Master Servicer’s obligation to make Advances;
(g) such servicer’s right to receive compensation for its services under the Pooling and Servicing Agreement or with respect to any particular transaction;
(h) the ownership, servicing or management for others of any other mortgage loans or mortgaged properties by such servicer or any affiliate of such servicer, as applicable;
(i) any debt that such servicer or any affiliate of such servicer, as applicable, has extended to any borrower or an affiliate of any borrower (including, without limitation, any mezzanine financing); and
(j) any obligation of the Master Servicer, or an affiliate thereof, to repurchase or substitute for a Mortgage Loan as Mortgage Loan Seller (if the Master Servicer or any affiliate thereof is a Mortgage Loan Seller) (the foregoing, collectively referred to as the “Servicing Standard”).
For descriptions of the servicing of the 11 Madison Avenue Mortgage Loan, see “—Servicing of the Non-Serviced Mortgage Loan” below and for more information on the servicing of the NMS Los Angeles Multifamily Portfolio Mortgage Loan and the Non-Serviced Mortgage Loan, see “Description of the Mortgage Pool—Loan Combinations” in this free writing prospectus.
The Master Servicer and the Special Servicer are permitted, at their own expense, to employ subservicers, contractors, agents or attorneys in performing any of their respective obligations under the Pooling and Servicing Agreement, but will not thereby be relieved of any such obligation, and will be responsible for the acts and omissions of any such subservicers, agents or attorneys. Notwithstanding the foregoing, the Special Servicer will not be permitted to enter into any sub-servicing agreement which provides for the performance by third parties of any or all of its obligations under the Pooling and Servicing Agreement without, for so long as no Control Termination Event has occurred and is continuing, the consent of the Directing Holder, except to the extent necessary for the Special Servicer to comply with applicable regulatory requirements.
The Pooling and Servicing Agreement provides that neither the Master Servicer, the Special Servicer nor any of their respective affiliates, directors, officers, employees, members, managers, representatives or agents will have any liability to the Issuing Entity or the Certificateholders for taking any action or
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refraining from taking any action in good faith pursuant to the Pooling and Servicing Agreement, or for errors in judgment. The foregoing provision would not protect either of the Master Servicer or the Special Servicer against any breach of its representations or warranties in the Pooling and Servicing Agreement or any liability by reason of willful misconduct, bad faith, fraud or negligence (or by reason of any specific liability imposed under the Pooling and Servicing Agreement for a breach of the Servicing Standard) in the performance of its duties or by reason of its negligent disregard of obligations or duties under the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement requires the Master Servicer or the Special Servicer, as applicable, to make reasonable efforts to collect all payments called for under the terms and provisions of the Mortgage Loans (other than any Non-Serviced Mortgage Loan) and the Serviced Companion Loans and to follow the Servicing Standard with respect to such collection procedures. Consistent with the above, the Master Servicer or the Special Servicer may, in its discretion, waive any late payment fee or default interest in connection with any delinquent Monthly Payment or balloon payment with respect to any Mortgage Loan or Serviced Companion Loan it is servicing.
All net present value calculations and determinations made under the Pooling and Servicing Agreement with respect to any Mortgage Loan, Mortgaged Property or REO Property (including for purposes of the definition of “Servicing Standard” set forth above) will be made in accordance with the Mortgage Loan Documents or, in the event the Mortgage Loan Documents are silent, by using a discount rate appropriate for the type of cash flows being discounted; namely (i) for principal and interest payments on the Mortgage Loan or Serviced Companion Loan or sale of a Defaulted Mortgage Loan, the higher of (1) the rate determined by the Master Servicer or Special Servicer, as applicable, that approximates the market rate that would be obtainable by the borrowers on similar non-defaulted debt of the borrowers as of such date of determination, (2) the Mortgage Rate and (3) the yield on 10-year U.S. treasuries as of such date of determination and (ii) for all other cash flows, including property cash flow, the “discount rate” set forth in the most recent appraisal (or Updated Appraisal).
Notwithstanding anything in the Pooling and Servicing Agreement or in any Intercreditor Agreement to the contrary, no direction or objection by the holder of a Serviced Companion Loan may require or cause the Master Servicer or the Special Servicer, as applicable, to violate any provision of any Mortgage Loan, applicable law, the Pooling and Servicing Agreement, any Intercreditor Agreement or the REMIC provisions, including without limitation the Master Servicer’s or Special Servicer’s obligation to act in accordance with the Servicing Standard, or expose the Master Servicer, the Special Servicer, the Depositor, the Paying Agent, the Issuing Entity, a Mortgage Loan Seller, the Operating Advisor, the Certificate Administrator or the Trustee to liability, or materially expand the scope of the Master Servicer’s or Special Servicer’s responsibilities under the Pooling and Servicing Agreement.
The Directing Holder
For so long as no Control Termination Event has occurred and is continuing, the Directing Holder will be entitled to advise (1) the Special Servicer, with respect to all Specially Serviced Loans, (2) the Special Servicer, with respect to non-Specially Serviced Loans, as to all matters for which the Master Servicer must obtain the consent or deemed consent of the Special Servicer, and (3) the Special Servicer, with respect to all Mortgage Loans for which an extension of maturity is being considered by the Special Servicer or by the Master Servicer, subject to consent or deemed consent of the Special Servicer.
Neither the Master Servicer nor the Special Servicer will be required to take or to refrain from taking any action pursuant to instructions from the Directing Holder, or due to any failure to approve an action by the Directing Holder, or due to an objection by the Directing Holder that would (1) cause either the Master Servicer or the Special Servicer to violate applicable law, the related Mortgage Loan Documents, the Pooling and Servicing Agreement (including the Servicing Standard), any related Intercreditor Agreements or the REMIC provisions of the Code, (2) expose the Master Servicer, the Special Servicer, the Depositor, the Paying Agent, the Issuing Entity, the Operating Advisor, the Certificate Administrator, the Custodian, the Trustee or a Mortgage Loan Seller or their respective affiliates to any claim, suit or liability, or (3) materially expand the scope of the Master Servicer or Special Servicer’s responsibilities
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under the Pooling and Servicing Agreement or cause the Master Servicer or the Special Servicer to act or fail to act, in a manner that is not in the best interests of the Certificateholders.
Except as otherwise described in the succeeding paragraphs below, (a) the Master Servicer will not be permitted to take any of the following actions unless it has obtained the consent of the Special Servicer and (b) for so long as no Control Termination Event has occurred and is continuing, the Special Servicer will not be permitted to consent to the Master Servicer’s taking any of the following actions, nor will the Special Servicer itself be permitted to take any of the following actions, as to which the Directing Holder has objected in writing within ten (or thirty with respect toclause (j) below) business days after receipt of the written recommendation and analysis (provided that if such written objection has not been received by the Special Servicer within the ten-day (or thirty-day) period, the Directing Holder will be deemed to have approved such action) (each of the following, a “Major Decision”):
(a) any proposed or actual foreclosure upon or comparable conversion (which may include acquisitions of an REO Property) of the ownership of properties securing such of the Mortgage Loans (other than a Non-Serviced Mortgage Loan) or Serviced Loan Combination as come into and continue in default;
(b) any modification, consent to a modification or waiver of any monetary term (other than late payment charges or Default Interest) or material non-monetary term (including, without limitation, the timing of payments and acceptance of discounted payoffs but excluding late payment charges or Default Interest) of a Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Loan Combination or any extension of the maturity date of any Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Loan Combination;
(c) any sale of a Defaulted Mortgage Loan (that is not a Non-Serviced Mortgage Loan), or an REO Property (in each case, other than in connection with the termination of the Issuing Entity as described under “—Optional Termination” in this free writing prospectus) for less than the applicable Repurchase Price;
(d) any determination to bring an REO Property into compliance with applicable environmental laws or to otherwise address hazardous material located at an REO Property;
(e) any release of collateral or any acceptance of substitute or additional collateral for a Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Loan Combination or any consent to either of the foregoing, other than as required pursuant to the specific terms of the related Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Loan Combination and for which there is no material lender discretion;
(f) any waiver of a “due-on-sale” or “due-on-encumbrance” clause with respect to a Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Loan Combination or any consent to such a waiver or consent to a transfer of the Mortgaged Property or interests in the borrower or consent to the incurrence of additional debt, other than any such transfer or incurrence of debt as may be effected without the consent of the lender under the related loan agreement;
(g) any property management company changes for which the lender is required to consent or approve under the Mortgage Loan Documents (with respect to a Mortgage Loan) or Serviced Loan Combination (i) with a Stated Principal Balance greater than $2,500,000 or (ii) where the successor property manager is affiliated with the borrower) or franchise changes for which the lender is required to consent or approve under the Mortgage Loan Documents (with respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Loan Combination);
(h) releases of any escrow accounts, reserve accounts or letters of credit held as performance escrows or reserves, other than those required pursuant to the specific terms of the related Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Loan Combination and for which there is no material lender discretion;
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(i) any acceptance of an assumption agreement releasing a borrower from liability under a Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Loan Combination other than pursuant to the specific terms of such Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Loan Combination and for which there is no lender discretion;
(j) any determination of an Acceptable Insurance Default;
(k) the determination of the Special Servicer pursuant to clause (iii) or clause (vii) of the definition of “Specially Serviced Loan”;
(l) any acceleration of a Mortgage Loan or Serviced Loan Combination following a default or an event of default with respect to a Mortgage Loan (other than a Non-Serviced Mortgage Loan) Loan Combination, any initiation of judicial, bankruptcy or similar proceedings under the related Mortgage Loan Documents or with respect to the related mortgagor or Mortgaged Property; and
(m) any modification, waiver or amendment of an intercreditor agreement, co-lender agreement, participation agreement or similar agreement with any mezzanine lender, holder of a Companion Loan or other subordinate debt holder related to a Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Loan Combination, or an action to enforce rights with respect thereto, in each case, in a manner that materially and adversely affects the holders of the Control Eligible Certificates;
provided,further, that if the Master Servicer or the Special Servicer determines that immediate action is necessary to protect the interests of the Certificateholders and, with respect to any applicable Serviced Loan Combination, the holders of any related Serviced Companion Loan (as a collective whole as if such Certificateholders and Serviced Companion Loan holders constituted a single lender) and the Special Servicer has made a reasonable effort to contact the Directing Holder, the Master Servicer or the Special Servicer, as the case may be, may take any such action without waiting for the Directing Holder’s response.
The Special Servicer will be responsible for the processing of Major Decisions;provided that the Master Servicer and the Special Servicer may mutually agree as contemplated in the Pooling and Servicing Agreement that the Master Servicer will process and obtain the prior consent of the Special Servicer to any of the matters listed in the foregoing clauses (a) through (m) with respect to any non-Specially Serviced Loan (see”—Modifications” in this free writing prospectus).
With respect to any Mortgage Loan or Serviced Loan Combination (other than an Excluded Mortgage Loan), if a Control Termination Event has occurred and is continuing, but for so long as no Consultation Termination Event has occurred and is continuing, the Special Servicer will not be required to obtain the consent of the Directing Holder for any of the foregoing actions but will be required to consult with the Directing Holder in connection with any Major Decision (or any other matter for which the consent of the Directing Holder would have been required or for which the Directing Holder would have the right to direct the Master Servicer or the Special Servicer if no Control Termination Event had occurred and was continuing) and to consider alternative actions recommended by the Directing Holder. Such consultation will not be binding on the Special Servicer.
With respect to each Non-Serviced Loan Combination, the Controlling Class Representative will have certain non-binding consultation rights with respect to the servicing of such Non-Serviced Loan Combination as provided in the related Intercreditor Agreement and described under “Description of the Mortgage Pool—Loan Combinations” in this free writing prospectus. With respect to Excluded Mortgage Loans, the Controlling Class Representative will not have any rights with respect to the servicing of such Excluded Mortgage Loans. With respect to each Serviced Loan Combination, the related Non-Controlling Note Holders will have certain non-binding consultation rights with respect to the servicing of the related Serviced Loan Combination as provided in the related Intercreditor Agreement and described under “Description of the Mortgage Pool—Loan Combinations” in this free writing prospectus.
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The “Directing Holder” means: (a) with respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan or Excluded Mortgage Loan) or Serviced Loan Combination, the Controlling Class Representative; and (b) with respect to each Excluded Mortgage Loan, there will be no Directing Holder.
The initial Directing Holder for the Mortgage Loans (other than any Non-Serviced Mortgage Loan or Excluded Mortgage Loan) and Serviced Loan Combinations is expected to be the B-Piece Buyer. The Directing Holder will be responsible for its own expenses.
An “Excluded Mortgage Loan” is a Mortgage Loan or Loan Combination with respect to which the Controlling Class Representative or any Majority Controlling Class Certificateholder is a Borrower Party.
“Borrower Party” means (i) a borrower, a mortgagor or a manager of a Mortgaged Property or any affiliate thereof, or any principal, partner, member, joint venturer, limited partner, employee, director, advisor or direct investor in any of the foregoing, (ii) solely with respect to the 10 largest Mortgage Loans based on Stated Principal Balance, any person that owns, directly or indirectly, 25% or more of a borrower, a mortgagor or a manager of a Mortgaged Property or (iii) any owner (and any affiliate and agent thereof or any person that owns, directly or indirectly, 25% or more of any such owner) of any interest (whether legally, beneficially or otherwise) in any mezzanine loan related to a Mortgage Loan that has accelerated such mezzanine loan (unless (a) acceleration was automatic under such mezzanine loan, (b) the event directly giving rise to the automatic acceleration under such mezzanine loan was not initiated by such owner or an affiliate of such owner and (c) such owner is stayed from exercising and has not commenced the exercise of remedies associated with foreclosure of the equity collateral under such mezzanine loan) or commenced foreclosure proceedings against the equity interests in the borrower(s) of such Mortgage Loan.
“Non-Controlling Note Holder” means, the holder of a non-controlling note for any Loan Combination, as the context may require, if any.
At any time more than 50% of the Percentage Interest of the Controlling Class Certificateholders direct the Certificate Administrator in writing to hold an election for a Controlling Class Representative, the Certificate Administrator is required to hold such election as soon as practicable at the expense of such requesting Certificateholders.
The “Controlling Class Representative” is the Controlling Class Certificateholder (or a representative thereof) selected by more than 50% of the Controlling Class Certificateholders, by Certificate Balance, as determined by the Certificate Registrar from time to time;provided,however, that (i) absent that selection, or (ii) until a Controlling Class Representative is so selected or (iii) upon receipt of a written notice from a majority of the Controlling Class Certificateholders, by Certificate Balance, that a Controlling Class Representative is no longer designated, then the Controlling Class Certificateholder that certifies to the Certificate Administrator that it owns the largest aggregate Certificate Balance of the Controlling Class will be the Controlling Class Representative upon notification to the Certificate Registrar (and the Certificate Registrar’s notice to the other parties to the Pooling and Servicing Agreement) of such Controlling Class Certificateholder’s identity and contact information.
The initial Controlling Class Representative will be the B-Piece Buyer, and the Certificate Registrar and the other parties to the Pooling and Servicing Agreement will be entitled to assume that entity or any successor Controlling Class Representative selected thereby and notified to the Certificate Registrar and the other parties to the Pooling and Servicing Agreement in writing is the Controlling Class Representative on behalf of the B-Piece Buyer, as holder (or beneficial owner) of at least a majority of the applicable Class of Control Eligible Certificates, until the Certificate Registrar and the other parties to the Pooling and Servicing Agreement receive (a) notice of a replacement Controlling Class Representative from a majority of the Controlling Class Certificateholders by Certificate Balance or (b) notice that the B-Piece Buyer is no longer the holder (or beneficial owner) of a majority of the applicable Class of Control Eligible Certificates due to a transfer of those Certificates (or a beneficial ownership interest in those Certificates). In the event of clause (b) above, if no successor Controlling Class Representative is then identified to the Certificate Registrar and the other parties to the Pooling and Servicing Agreement or until such time as the Certificate Registrar provides notice of the identity and contact information of the largest
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aggregate Controlling Class Certificateholder to the parties to the Pooling and Servicing Agreement, then a Control Termination Event will be deemed to exist until such time as the Certificate Registrar and the other parties to the Pooling and Servicing Agreement receive notice of a successor Controlling Class Representative.
A “Controlling Class Certificateholder” is each holder (or beneficial owner, if applicable) of a Certificate of the Controlling Class as determined by the Certificate Registrar to the Certificate Administrator from time to time.
The “Controlling Class” will be as of any time of determination the most subordinate class of Control Eligible Certificates then outstanding that has an aggregate Certificate Balance, as notionally reduced by any Appraisal Reduction Amounts allocable to such class, at least equal to 25% of the initial Certificate Balance of that Class or if no class of Control Eligible Certificates meets the preceding requirement, the Class E Certificates. The Controlling Class as of the Closing Date will be the Class H Certificates.
A “Consultation Termination Event” will occur with respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan or Excluded Mortgage Loan) or Serviced Loan Combination, at any date on which no Class of Control Eligible Certificates exists that has a Certificate Balance that is at least equal to 25% of the initial Certificate Balance of that Class. With respect to Excluded Mortgage Loans, a Consultation Termination Event will be deemed to exist.
If a Consultation Termination Event has occurred and is continuing, the Directing Holder will have no consultation or consent rights under the Pooling and Servicing Agreement and will have no right to receive any notices, reports or information (other than notices, reports or information required to be delivered to all Certificateholders) or any other rights as Directing Holder. However, the Directing Holder will maintain the right to exercise its Voting Rights for the same purposes as any other Certificateholder under the Pooling and Servicing Agreement (other than with respect to Excluded Mortgage Loans).
The Master Servicer, Special Servicer, Certificate Administrator, Operating Advisor or Trustee may request that the Certificate Administrator determine which Class of Certificates is the then-current Controlling Class and the Certificate Administrator must thereafter provide such information to the requesting party. The Master Servicer, Special Servicer, Trustee or Operating Advisor may also request that the Certificate Administrator provide, and the Certificate Administrator must so provide (1) for so long as no Consultation Termination Event has occurred and is continuing, the identity of the Controlling Class Representative, and, to the extent reasonably available, a list of the holders (or beneficial owners, if applicable) of the Controlling Class and (2) confirmation as to whether a Control Termination Event or Consultation Termination Event has occurred in the 12 months preceding any such request or any other period specified in such request. Any expenses incurred in connection with obtaining the information described in clause (1) above will be at the expense of the requesting party, except that if (i) such expenses arise in connection with an event as to which the Directing Holder (or Controlling Class Representative) has review, consent or consultation rights with respect to an action taken by, or report prepared by, the requesting party pursuant to the Pooling and Servicing Agreement or in connection with a request made by the Operating Advisor in connection with its obligation under the Pooling and Servicing Agreement to deliver a copy of its annual report to the Controlling Class Representative and (ii) the requesting party has not been notified of the identity of the Directing Holder (or Controlling Class Representative) or reasonably believes that the identity of the Directing Holder (or Controlling Class Representative) has changed, then such expenses will be at the expense of the Issuing Entity. The Master Servicer, Special Servicer, the Trustee and the Operating Advisor may each rely on any such list so provided.
The Certificate Administrator, and the other parties to the Pooling and Servicing Agreement, will be entitled to assume that the identity of the Directing Holder has not changed absent written notice of a replacement of the Directing Holder by a majority of the Controlling Class, or the resignation of the then current Directing Holder.
The “Control Eligible Certificates” will be any of the Class E, Class F, Class G and Class H Certificates.
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A “Control Termination Event” will occur with respect to any Mortgage Loan (other than Non-Serviced Mortgage Loans and Excluded Mortgage Loans) or Serviced Loan Combination at any date on which (i) no Class of Control Eligible Certificates exists that has a Certificate Balance (as notionally reduced by any Appraisal Reduction Amounts allocable to such class) that is at least equal to 25% of the initial Certificate Balance of that Class. With respect to Excluded Mortgage Loans, a Control Termination Event will be deemed to exist.
If a Control Termination Event has occurred and is continuing, the Directing Holder will have no right to consent to any action taken or not taken by any party to the Pooling and Servicing Agreement, but if no Consultation Termination Event has occurred and is continuing, the Directing Holder will remain entitled to receive any notices, reports or information to which it is entitled pursuant to the Pooling and Servicing Agreement, and the Master Servicer, Special Servicer and any other applicable party will be required to consult with the Directing Holder in connection with any action to be taken or refrained from taking to the extent set forth in the Pooling and Servicing Agreement.
The Directing Holder has certain rights to remove and replace the Special Servicer as described under “The Servicers—Replacement of the Special Servicer” in this free writing prospectus.
Notwithstanding anything to the contrary described in this free writing prospectus, at any time when the Class E certificates are the Controlling Class, the holder of more than 50% of the Class E Certificates, by Certificate Balance, may waive its right to act as, or appoint a representative to act as, the Controlling Class Representative and to exercise any of the rights of the Controlling Class Representative or cause the exercise of any of the rights of the Controlling Class Representative, by irrevocable written notice delivered to the Depositor, Certificate Administrator, Trustee, Master Servicer, Special Servicer and Operating Advisor. Any such waiver will remain effective with respect to such Holder and the Class E Certificates until such time as that Certificateholder has (i) sold a majority of the Class E Certificates (by Certificate Balance) to an unaffiliated third party and (ii) certified to the Depositor, Certificate Administrator, Trustee, Master Servicer, Special Servicer and Operating Advisor that (a) the transferor retains no direct or indirect voting rights with respect to the Class E Certificates that it does not own, (b) there is no voting agreement between the transferee and the transferor and (c) the transferor retains no direct or indirect controlling interest in the Class E Certificates. During such waiver period a Consultation Termination Event will be deemed to exist and the rights of the Controlling Class to appoint a Controlling Class Representative and the rights of the Controlling Class Representative will not be operative (notwithstanding whether a Control Termination Event or a Consultation Termination Event is or would otherwise then be in effect). Following any transfer of more than 50% of the Class E Certificates, the successor holder of more than 50% of the Class E Certificates, if the Class E Certificates are the Controlling Class, by Certificate Balance, will again have the rights to act as, or appoint a representative to act as, the Controlling Class Representative or to exercise any of the rights of the Controlling Class Representative without regard to any prior waiver by the predecessor Certificateholder. The successor Certificateholder will also have the right to irrevocably waive its right to act as or appoint a Controlling Class Representative or cause the exercise of any of the rights of the Controlling Class Representative. No successor Certificateholder described above will have any consent rights with respect to any Mortgage Loan that became a Specially Serviced Loan prior to its acquisition of a majority of the Class E Certificates if such Mortgage Loan had not also become a Corrected Mortgage Loan prior to such acquisition unless and until such Mortgage Loan becomes a Corrected Mortgage Loan.
Each Certificateholder and beneficial owner of a Control Eligible Certificate is deemed to have agreed by virtue of its purchase of such Certificate (or beneficial ownership interest in such Certificate) to provide its name and address to the Certificate Registrar and to notify the Certificate Registrar of the transfer of any Control Eligible Certificate (or the beneficial ownership of any Control Eligible Certificate), the selection of a Controlling Class Representative or the resignation or removal of a Controlling Class Representative. Any such Certificateholder (or beneficial owner) or its designee at any time appointed Controlling Class Representative is deemed to have agreed by virtue of its purchase of a Control Eligible Certificate (or the beneficial ownership interest in a Control Eligible Certificate) to notify the Certificate Registrar when such Certificateholder (or beneficial owner) or designee is appointed Controlling Class Representative and when it is removed or resigns. Upon receipt of such notice, the Certificate Registrar
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will be required to notify the Special Servicer, the Master Servicer, the Certificate Administrator and the Trustee of the identity of the Controlling Class Representative, any resignation or removal of the Controlling Class Representative and/or any new holder or beneficial owner of a Control Eligible Certificate.
Limitation on Liability of Directing Holder
The Directing Holder will not be liable to the Issuing Entity, any party to the Pooling and Servicing Agreement, the Certificateholders or any other person for any action taken, or for refraining from the taking of any action or for errors in judgment. However, the Directing Holder will not be protected against any liability to the Controlling Class Certificateholders that would otherwise be imposed by reason of willful misfeasance, or bad faith or negligence in the performance of duties or by reason of reckless disregard of obligations or duties.
Each Certificateholder acknowledges and agrees, by its acceptance of its Certificates, that the Directing Holder:
(a) may have special relationships and interests that conflict with those of holders of one or more Classes of Certificates or Companion Loan noteholders;
(b) may act solely in the interests of the holders of the Controlling Class (or in the case of a Loan Combination, the holders of any related Companion Loan);
(c) does not have any liability or duties to the holders of any Class of Certificates (other than the Controlling Class);
(d) may take actions that favor the interests of one or more Classes of the Certificates including the Holders of the Controlling Class (or, in the case of a Loan Combination, one or more Companion Loan noteholders) over the interests of the Holders of one or more Classes of Certificates and other Companion Loan noteholders; and
(e) will have no liability whatsoever to any Certificateholder (other than to a Controlling Class Certificateholder, to the extent the Controlling Class Representative is the Directing Holder), the Issuing Entity or any Companion Loan noteholder, any party to the Pooling and Servicing Agreement or any other person (including any borrower under a Mortgage Loan) for having so acted as set forth in clauses (a) through (d) above, and no Certificateholder or Companion Loan noteholder may take any action whatsoever against the Directing Holder or any director, officer, employee, agent or principal thereof for having so acted.
The taking of, or refraining from taking, any action by the Master Servicer or the Special Servicer in accordance with the direction of or approval of the Directing Holder, which does not violate any law or the Servicing Standard or the provisions of the Pooling and Servicing Agreement or any intercreditor agreements, will not result in any liability on the part of the Master Servicer or the Special Servicer.
The Operating Advisor
General
The Operating Advisor will act solely as a contracting party to the extent described in this free writing prospectus and as set forth under the Pooling and Servicing Agreement, will have no fiduciary duty, will have no other duty except with respect to its specific obligations under the Pooling and Servicing Agreement, and will have no duty or liability to any particular Class of Certificates or any Certificateholder. The Operating Advisor will not be charged with changing the outcome on any particular Specially Serviced Loan. By purchasing a Certificate, Certificateholders acknowledge and agree that there could be multiple strategies to resolve any Specially Serviced Loan and that the goal of the Operating Advisor’s participation is to provide additional oversight relating to the Special Servicer’s compliance with the Servicing Standard in making its determinations as to which strategy to execute. Potential investors
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should note that the Operating Advisor is not an “advisor” for any purpose other than as specifically set forth in the Pooling and Servicing Agreement and is not an advisor to any person, including without limitation any Certificateholder. The duties of the Operating Advisor will terminate, without cost or expense to the Operating Advisor, (1) if there are no Classes of Certificates outstanding other than the Control Eligible Certificates, the Class X-D Certificates, the Class X-E Certificates, the Class X-F Certificates, the Class V Certificates, the Class R Certificates and the Class LR Certificates, or (2) upon termination of the Issuing Entity. See “Risk Factors—Risks Related to the Offered Certificates—Risks Relating to Lack of Certificateholder Control over the Issuing Entity” in this free writing prospectus.
Role of Operating Advisor While No Control Termination Event Has Occurred and Is Continuing
With respect to each Mortgage Loan (other than any Non-Serviced Mortgage Loan) or Serviced Loan Combination, unless a Control Termination Event has occurred and is continuing, the Operating Advisor’s obligations will be limited to the following, and generally will not involve an assessment of specific actions of the Special Servicer:
(a) promptly reviewing information available to Privileged Persons on the Certificate Administrator’s website that is relevant to the Operating Advisor’s obligations under the Pooling and Servicing Agreement;
(b) promptly reviewing each Final Asset Status Report; and
(c) reviewing any Appraisal Reduction Amount and net present value calculations used in the Special Servicer’s determination of what course of action to take in connection with the workout or liquidation of a Specially Serviced Loan (after they have been finalized); however the Operating Advisor may not opine on, or otherwise call into question, such Appraisal Reduction Amount calculations and/or net present value calculations (except that if the Operating Advisor discovers a mathematical error contained in such calculations, then the Operating Advisor will be required to notify the Special Servicer and (so long as no Consultation Termination Event will have occurred and be continuing) the Controlling Class Representative of such error).
The Operating Advisor will have no specific involvement with respect to collateral substitutions, assignments, workouts, modifications, consents, waivers, insurance policies, borrower substitutions, lease changes and other similar actions that the Special Servicer may perform under the Pooling and Servicing Agreement and will have no obligations with respect to any Non-Serviced Mortgage Loan.
Role of Operating Advisor While a Control Termination Event Has Occurred and Is Continuing
With respect to each Mortgage Loan (other than any Non-Serviced Mortgage Loan) or Serviced Loan Combination, while a Control Termination Event has occurred and is continuing, the Operating Advisor’s obligations will consist of the following:
(a) the Operating Advisor will be required to consult (on a non-binding basis) with the Special Servicer in accordance with the Operating Advisor Standard with respect to Major Decisions as described under “—The Directing Holder” and “—Special Servicing—Asset Status Report” in this free writing prospectus;
(b) the Operating Advisor will be required in connection with the preparation of the Operating Advisor’s annual report to generally review the Special Servicer’s operational practices in respect of Specially Serviced Loans in order to formulate an opinion (in accordance with the Operating Advisor Standard) as to whether or not those operational practices generally satisfy the Servicing Standard with respect to the resolution and/or liquidation of the Specially Serviced Loans, as described under “—Annual Report” below;
(c) the Operating Advisor will be required to promptly recalculate and verify the accuracy of the mathematical calculations and the corresponding application of the non-discretionary portion of the applicable formulas required to be utilized in connection with: (1) any Appraisal Reduction
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Amount or (2) net present value calculations used in the Special Servicer’s determination of what course of action to take in connection with the workout or liquidation of a Specially Serviced Loan prior to utilization by the Special Servicer. In connection with the foregoing,
(i) after the calculation but prior to the utilization by the Special Servicer, the Special Servicer will be required to deliver the foregoing calculations together with information and support materials (including such additional information reasonably requested by the Operating Advisor to confirm the mathematical accuracy of such calculations, but not including any Privileged Information) to the Operating Advisor;
(ii) if the Operating Advisor does not agree with the mathematical calculations or the application of the applicable non-discretionary portions of the formulas required to be utilized for such calculation, the Operating Advisor and Special Servicer will be required to consult with each other in order to resolve any inaccuracy in the mathematical calculations or the application of the non-discretionary portions of the related formulas in arriving at those mathematical calculations or any disagreement; and
(iii) if the Operating Advisor and Special Servicer are not able to resolve such matters, the Operating Advisor will be required to promptly notify the Certificate Administrator and the Certificate Administrator will be required to examine the calculations and supporting materials provided by the Special Servicer and the Operating Advisor and determine which calculation is to apply; and
(d) the Operating Advisor will be required to prepare an annual report (if any Mortgage Loan (other than any Non-Serviced Mortgage Loan) or Serviced Loan Combination was a Specially Serviced Loan during the prior calendar year) to be provided to the Trustee, the Master Servicer, the Certificate Administrator (to be made available through the Certificate Administrator’s website) and the 17g-5 Information Provider (to be made available through the 17g-5 Information Provider’s website), as described below.
The Operating Advisor will be required to keep all Privileged Information confidential and may not disclose such Privileged Information to any person (including Certificateholders other than the Controlling Class Representative), other than (1) to the extent expressly required by the Pooling and Servicing Agreement, to the other parties to the Pooling and Servicing Agreement with a notice indicating that such information is Privileged Information or (2) pursuant to a Privileged Information Exception. Each party to the Pooling and Servicing Agreement that receives Privileged Information from the Operating Advisor with a notice stating that such information is Privileged Information may not disclose such Privileged Information to any person without the prior written consent of the Special Servicer, the Controlling Class Representative and the Directing Holder other than pursuant to a Privileged Information Exception.
The ability to perform the duties of the Operating Advisor and the quality and the depth of any annual report will be dependent upon the timely receipt of information required to be delivered to the Operating Advisor and the accuracy and the completeness of such information. It is possible that the lack of access to Privileged Information may limit or prohibit the Operating Advisor from performing its duties under the Pooling and Servicing Agreement and the Operating Advisor will not be subject to liability arising from its lack of access to Privileged Information.
The “Operating Advisor Standard” means the Operating Advisor is required to act solely on behalf of the Issuing Entity and in the best interest of, and for the benefit of, the Certificateholders (as a collective whole as if such Certificateholders and, with respect to any Serviced Loan Combination, the related ServicedPari Passu Companion Loan holders, constituted a single lender), and not to any particular Class of Certificateholders (as determined by the Operating Advisor in the exercise of its good faith and reasonable judgment).
“Privileged Information” means (i) any correspondence or other communications between the Directing Holder and the Special Servicer related to any Specially Serviced Loan or the exercise of the consent or consultation rights of a Directing Holder under the Pooling and Servicing Agreement or any
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related intercreditor agreement, (ii) any strategically sensitive information that the Special Servicer has reasonably determined could compromise the Issuing Entity’s position in any ongoing or future negotiations with the related borrower or other interested party, and (iii) information subject to attorney-client privilege.
“Privileged Information Exception” means, with respect to any Privileged Information, at any time (a) such Privileged Information becomes generally available and known to the public other than as a result of a disclosure directly or indirectly by the party restricted from disclosing such Privileged Information (the “Restricted Party”), (b) it is reasonable and necessary for the Restricted Party to disclose such Privileged Information in working with legal counsel, auditors, taxing authorities or other governmental agencies, (c) such Privileged Information was already known to such Restricted Party and not otherwise subject to a confidentiality obligation and/or (d) the Restricted Party is (in the case of the Operating Advisor, as evidenced by an opinion of counsel (which will be an additional expense of the Issuing Entity) delivered to each of the Special Servicer, the Directing Holder with respect to such Mortgage Loan, the Certificate Administrator and the Trustee), required by law to disclose such information.
A “Final Asset Status Report” with respect to any Specially Serviced Loan, means each related Asset Status Report, together with such other data or supporting information provided by the Special Servicer to the Directing Holder, which does not include any communication (other than the related Asset Status Report) between the Special Servicer and the Directing Holder with respect to such Specially Serviced Loan;provided that no Asset Status Report will be considered to be a Final Asset Status Report unless, if no Control Termination Event has occurred and is continuing, the Directing Holder has either finally approved of and consented to the actions proposed to be taken in connection therewith, or has exhausted all of its rights of approval or consent in respect of such action, or has been deemed to approve or consent to such action or the Asset Status Report is otherwise implemented by the Special Servicer in accordance with the terms of the Pooling and Servicing Agreement.
Annual Report
With respect to each Mortgage Loan (other than any Non-Serviced Mortgage Loan) or Serviced Loan Combination, if a Control Termination Event has occurred and is continuing, in each case based on the Operating Advisor’s review of any annual compliance statement, Assessment of Compliance (as defined in the prospectus), Attestation Report (as defined in the prospectus), Asset Status Report and other information (other than any communications between the Directing Holder and the Special Servicer that would be Privileged Information) delivered to the Operating Advisor by the Special Servicer, the Operating Advisor (if any Mortgage Loans (other than any Non-Serviced Mortgage Loan) or any Serviced Loan Combination were Specially Serviced Loans during the prior calendar year) will prepare an annual report to be provided to the Trustee, the Certificate Administrator (to be made available through the Certificate Administrator’s website), the holders of any related Serviced Companion Loan (if applicable) and the 17g-5 Information Provider (to be made available through the 17g-5 Information Provider’s website) setting forth its assessment of the Special Servicer’s performance of its duties under the Pooling and Servicing Agreement on a platform-level basis with respect to the resolution and liquidation of Specially Serviced Loans during the prior calendar year. As used in connection with the Operating Advisor’s annual report, the term “platform level basis” refers to the Special Servicer’s performance of its duties as they relate to the resolution or liquidation of Specially Serviced Loans, taking into account the Special Servicer’s specific duties under the Pooling and Servicing Agreement as well as the extent to which those duties were performed in accordance with the Servicing Standard, with reasonable consideration by the Operating Advisor of the items required to be reviewed by it pursuant to the Pooling and Servicing Agreement.
The Special Servicer and the Directing Holder (for so long as no Consultation Termination Event has occurred and is continuing), must be given an opportunity to review any annual report produced by the Operating Advisor at least 5 business days prior to its delivery to the Trustee and the Certificate Administrator;provided that the Operating Advisor will have no obligation to consider any comments to such annual report that are provided by the Special Servicer or Directing Holder, as applicable.
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In each such annual report, the Operating Advisor, based on its review conducted in accordance with the Pooling and Servicing Agreement, will identify any material deviations (i) from the Servicing Standard and (ii) from the Special Servicer’s obligations under the Pooling and Servicing Agreement with respect to the resolution and liquidation of Specially Serviced Loans. Each annual report will be required to comply with the confidentiality requirements described in this free writing prospectus regarding Privileged Information and as otherwise set forth in the Pooling and Servicing Agreement.
Notwithstanding the foregoing discussion under this “—Annual Report” heading, no operating advisor annual report will be required from the Operating Advisor with respect to the Special Servicer if during the prior calendar year no asset status report was prepared by the Special Servicer in connection with a Specially Serviced Loan or Serviced REO Property.
Replacement of the Special Servicer
With respect to each Mortgage Loan or Serviced Loan Combination (other than any Non-Serviced Mortgage Loan) or Serviced Loan Combination, after the occurrence and continuation of a Consultation Termination Event, if the Operating Advisor determines that the Special Servicer is not performing its duties as required under the Pooling and Servicing Agreement or is otherwise not acting in accordance with the Servicing Standard, the Operating Advisor may recommend the replacement of the Special Servicer in the manner described in “The Servicers—Replacement of the Special Servicer” in this free writing prospectus.
Termination of the Operating Advisor For Cause
The following constitute Operating Advisor termination events under the Pooling and Servicing Agreement (each, an “Operating Advisor Termination Event”), whether any such event is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body:
(a) any failure by the Operating Advisor to observe or perform in any material respect any of its covenants or agreements or the material breach of its representations or warranties under the Pooling and Servicing Agreement, which failure continues unremedied for a period of 30 days after the date on which written notice of such failure is given to the Operating Advisor by any party to the Pooling and Servicing Agreement or to the Operating Advisor, the Certificate Administrator and the Trustee by the holders of Certificates having greater than 25% of the aggregate Voting Rights;provided that with respect to any such failure which is not curable within such 30-day period, the Operating Advisor will have an additional cure period of 30 days to effect such cure so long as it has commenced to cure such failure within the initial 30-day period and has provided the Trustee and the Certificate Administrator with an officer’s certificate certifying that it has diligently pursued, and is continuing to pursue, such cure;
(b) any failure by the Operating Advisor to perform in accordance with the Operating Advisor Standard which failure continues unremedied for a period of 30 days;
(c) any failure by the Operating Advisor to be an Eligible Operating Advisor, which failure continues unremedied for a period of 30 days;
(d) a decree or order of a court or agency or supervisory authority having jurisdiction in the premises in an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law for the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against the Operating Advisor, and such decree or order shall have remained in force undischarged or unstayed for a period of 60 days;
(e) the Operating Advisor consents to the appointment of a conservator or receiver or liquidator or liquidation committee in any insolvency, readjustment of debt, marshaling of assets and
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liabilities, voluntary liquidation, or similar proceedings of or relating to the Operating Advisor or of or relating to all or substantially all of its property; or
(f) the Operating Advisor admits in writing its inability to pay its debts generally as they become due, files a petition to take advantage of any applicable insolvency or reorganization statute, makes an assignment for the benefit of its creditors, or voluntarily suspends payment of its obligations.
Upon receipt by the Certificate Administrator of notice of the occurrence of any Operating Advisor Termination Event, the Certificate Administrator will be required to promptly provide written notice to all Certificateholders electronically by posting such notice on its internet website and by mail, unless such Operating Advisor Termination Event has been remedied.
“Eligible Operating Advisor” means an institution (i) that is the special servicer or operating advisor on a commercial mortgage-backed securities transaction rated by DBRS, Inc. (“DBRS”), Fitch Ratings, Inc. (“Fitch”), Kroll Bond Rating Agency, Inc. (“KBRA”), Moody’s Investors Service, Inc. (“Moody’s”), Morningstar Credit Ratings, LLC (“Morningstar”) or Standard & Poor’s Ratings Services (“S&P”), (including, in the case of Park Bridge Lender Services LLC, this transaction) but has not been special servicer on a transaction for which DBRS, Fitch, KBRA, Moody’s, Morningstar or S&P has qualified, downgraded or withdrawn its rating or ratings of, one or more class of certificates for such transaction citing servicing concerns with the special servicer as the sole or material factor in such rating action, (ii) that can and will make the representations and warranties set forth in the Pooling and Servicing Agreement, (iii) that is not the Depositor, the Master Servicer, the Special Servicer, a Sponsor, a Mortgage Loan Seller, the Controlling Class Representative, the Directing Holder, a depositor, servicer or special servicer with respect to the securitization of a Companion Loan, or an affiliate of the Depositor, the Master Servicer, the Special Servicer, a Sponsor, a Mortgage Loan Seller, the Controlling Class Representative, the Directing Holder, a depositor, servicer or special servicer with respect to the securitization of a Companion Loan and (iv) that has not been paid by any Special Servicer or successor Special Servicer any fees, compensation or other remuneration (x) in respect of its obligations under the Pooling and Servicing Agreement or (y) for the appointment or recommendation for replacement of a successor Special Servicer to become the Special Servicer.
Rights upon Operating Advisor Termination Event
If an Operating Advisor Termination Event occurs then, and in each and every such case, so long as such Operating Advisor Termination Event has not been remedied, either (i) the Trustee may or (ii) upon the written direction of holders of Certificates evidencing at least 25% of the Voting Rights of each Class of Certificates, the Trustee will be required to, terminate all of the rights and obligations of the Operating Advisor under the Pooling and Servicing Agreement, other than rights and obligations accrued prior to such termination (including accrued and unpaid compensation) and indemnification rights (arising out of events occurring prior to such termination), by written notice to the Operating Advisor.
As soon as practicable, but in no event later than 15 business days after (i) the Operating Advisor resigns or (ii) the Trustee or the Certificate Administrator delivers such written notice of termination to the Operating Advisor, upon the written direction of holders of Certificates evidencing not less than 25% of the Voting Rights of each Class of Certificates, the Trustee will be required to, appoint a successor Operating Advisor that is an Eligible Operating Advisor, which successor Operating Advisor may be an affiliate of the Trustee. If the Trustee is acting as the successor Master Servicer or the successor Special Servicer, neither the Trustee nor any of its affiliates will be the successor Operating Advisor. The Trustee will be required to provide written notice of the appointment of a successor Operating Advisor to the Master Servicer, the Special Servicer and the Certificate Administrator (and the Certificate Administrator is required to promptly provide such notice to the Controlling Class Representative, each Serviced Companion Loan noteholder and each Certificateholder) within 1 business day of such appointment. The Operating Advisor will be required to be an Eligible Operating Advisor. The appointment of the successor Operating Advisor will not be subject to the vote, consent or approval of the holder of any Class of Certificates. Upon any termination of the Operating Advisor and appointment of a successor Operating
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Advisor, the Trustee will, as soon as possible, be required to give written notice of the termination and appointment to the Rating Agencies, the Special Servicer, the Master Servicer, the Certificate Administrator, the Depositor, the Controlling Class Representative (but only for so long as no Consultation Termination Event has occurred and is continuing), any Serviced Companion Loan noteholder, the Certificateholders and the 17g-5 Information Provider (to be made available through the 17g-5 Information Provider’s website).
Termination of the Operating Advisor Without Cause
Upon (i) the written direction of holders of Certificates evidencing not less than 15% of the aggregate Voting Rights requesting a vote to terminate and replace the Operating Advisor with a proposed successor Operating Advisor that is an Eligible Operating Advisor and (ii) payment by such holders to the Certificate Administrator of the reasonable fees and expenses to be incurred by the Certificate Administrator in connection with administering such vote, the Certificate Administrator will be required to promptly provide written notice of such request to all Certificateholders and the Operating Advisor by posting such notice on its internet website and by mailing such notice to all Certificateholders. Upon the written direction of holders of more than 50% of the Voting Rights of the Certificates that exercise their right to vote (provided that holders of at least 50% of the Voting Rights of the Certificates exercise their right to vote), the Trustee will be required to terminate all of the rights and obligations of the Operating Advisor under the Pooling and Servicing Agreement by written notice to the Operating Advisor (other than any rights or obligations that accrued prior to such termination (including accrued and unpaid compensation) and other than indemnification rights arising out of events occurring prior to such termination). The Certificate Administrator will be required to include on each Distribution Date Statement a statement that each Certificateholder and beneficial owner of Certificates may access such notices on the Certificate Administrator’s website and each Certificateholder and beneficial owner of Certificates may register to receive email notifications when such notices are posted on the website. The Certificate Administrator will be entitled to reimbursement from the requesting Certificateholders for the reasonable expenses of posting such notices.
In addition, if there are no Classes of Certificates outstanding other than the Control Eligible Certificates, the Class X-D Certificates, the Class X-E Certificates, the Class X-F Certificates, the Class V Certificates, the Class R and the Class LR Certificates, all of the rights and obligations of the Operating Advisor under the Pooling and Servicing Agreement (other than any rights or obligations that accrued prior to such termination, including accrued and unpaid compensation, and other than indemnification rights arising out of events that occurred prior to such termination) will terminate without the payment of any termination fee. If the Operating Advisor is terminated pursuant to the foregoing, then no replacement Operating Advisor will be appointed.
Resignation of the Operating Advisor
The Operating Advisor has the right to resign without cost or expense on or after any date on which the aggregate Stated Principal Balance of the Mortgage Loans remaining in the Issuing Entity is less than 1.0% of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date. The Operating Advisor will provide all of the parties to the Pooling and Servicing Agreement and the Controlling Class Representative 30 days prior written notice of any such resignation. If the Operating Advisor resigns pursuant to the foregoing, then no replacement Operating Advisor will be appointed. The resigning Operating Advisor will be entitled to, and subject to, any rights and obligations that accrued under the Pooling and Servicing Agreement prior to the date of any such resignation (including accrued and unpaid compensation) and any indemnification rights arising out of events occurring prior to its resignation.
Operating Advisor Compensation
An operating advisor fee (the “Operating Advisor Fee”) will be payable to the Operating Advisor monthly from amounts received with respect to the Mortgage Loans (other than any Non-Serviced Mortgage Loan), and will accrue at a rate equal to the applicable Operating Advisor Fee Rate with respect
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to each such Mortgage Loan on the Stated Principal Balance of the related Mortgage Loan and will be calculated on the same interest accrual basis as the related Mortgage Loan and prorated for any partial periods.
The “Operating Advisor Fee Rate” for each Interest Accrual Period is aper annum rate equal to, (a) with respect to each Mortgage Loan (excluding any Non-Serviced Mortgage Loan and the NMS Los Angeles Multifamily Portfolio Mortgage Loan), 0.0023% and (b) with respect to the NMS Los Angeles Multifamily Portfolio Mortgage Loan, 0.0054%.
An Operating Advisor Consulting Fee will be payable to the Operating Advisor with respect to each Major Decision as to which the Operating Advisor has consultation rights. The “Operating Advisor Consulting Fee” will be a fee for each such Major Decision equal to $10,000 or such lesser amount as the related borrower agrees to pay with respect to any Mortgage Loan;provided that the Operating Advisor may in its sole discretion reduce the Operating Advisor Consulting Fee with respect to any Major Decision. The Operating Advisor Consulting Fee is not payable on any Non-Serviced Loan Combination.
Each of the Operating Advisor Fee and the Operating Advisor Consulting Fee will be payable from funds on deposit in the Collection Account out of amounts otherwise available to make distributions on the Certificates, but with respect to the Operating Advisor Consulting Fee only to the extent that such fee is actually received from the related borrower. If the Operating Advisor has consultation rights with respect to a Major Decision, the Pooling and Servicing Agreement will require the Master Servicer or the Special Servicer, as applicable, to use commercially reasonable efforts consistent with the Servicing Standard to collect the applicable Operating Advisor Consulting Fee from the related borrower in connection with such Major Decision, but only to the extent not prohibited by the related loan documents. The Master Servicer or Special Servicer, as applicable, will each be permitted to waive or reduce the amount of any such Operating Advisor Consulting Fee payable by the related borrower if it determines that such full or partial waiver is in accordance with the Servicing Standard but in no event shall take any enforcement action with respect to the collection of such Operating Advisor Consulting Fee other than requests for collection;provided that the Master Servicer or the Special Servicer, as applicable, will be required to consult with the Operating Advisor prior to any such waiver or reduction.
Advances
The Master Servicer will be obligated to advance, on the business day immediately preceding a Distribution Date (the “Master Servicer Remittance Date”) an amount (each such amount, a “P&I Advance”) equal to the amount not received in respect of the Monthly Payment or Assumed Scheduled Payment (in each case, net of related Servicing Fees) on a Mortgage Loan that was delinquent as of the close of business on the immediately preceding Due Date and which delinquent payment has not been received as of the business day immediately preceding the Master Servicer Remittance Date, or, in the event of a default in the payment of amounts due on the maturity date of a Mortgage Loan, the amount equal to the Assumed Scheduled Payment not received that was due prior to the maturity date;provided,however, that the Master Servicer will not be required to make an Advance to the extent it determines that such Advance (with interest on such Advance at the Advance Rate) would not be ultimately recoverable from collections on the related Mortgage Loan as described below. In addition, the Master Servicer will not make an Advance to the extent that the Master Servicer determines, or has received written notice from the Special Servicer that the Special Servicer determines, that such Advance would not be ultimately recoverable from collections on the related Mortgage Loan. Interest (at the Advance Rate) on P&I Advances will accrue from the date such Advance is made.
P&I Advances are intended to maintain a regular flow of scheduled interest and principal payments to holders of the Certificates entitled to such interest and principal, rather than to guarantee or insure against losses. Neither the Master Servicer nor the Trustee will be required or permitted to make a P&I Advance for Default Interest or balloon payments. The Special Servicer will not be required or permitted to make any Advance. The amount of interest required to be advanced in respect of delinquent Monthly Payments or Assumed Scheduled Payments on a Mortgage Loan that has been subject to an Appraisal Reduction Event will equal the product of (a) the amount that would be required to be advanced by the
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Master Servicer without giving effect to such Appraisal Reduction Event and (b) a fraction, the numerator of which is the Stated Principal Balance of the Mortgage Loan as of the immediately preceding Determination Date, less any Appraisal Reduction Amounts allocable to such Mortgage Loan and the denominator of which is the Stated Principal Balance of such Mortgage Loan as of such Determination Date.
With respect to the Non-Serviced Mortgage Loan, the Master Servicer, the Special Servicer and the Trustee will each be permitted to make its own determination that the Master Servicer or Trustee has made a nonrecoverable P&I Advance on such Mortgage Loan or that any proposed P&I Advance, if made, would constitute a nonrecoverable P&I Advance with respect to such Mortgage Loan independently of any determination made by the servicer of any related Companion Loan. If the Master Servicer or the Special Servicer, as applicable, determines that a proposed P&I Advance with respect to a Non-Serviced Mortgage Loan, if made, or any outstanding P&I Advance with respect to such Mortgage Loan previously made, would be, or is, as applicable, a nonrecoverable advance, the Master Servicer or the Special Servicer will be required to provide the servicer of the related Companion Loan written notice of such determination, promptly and in any event within the time permitted by the applicable intercreditor agreement. If the Master Servicer receives written notice from any such servicer that it has determined, with respect to any related Companion Loan, that any proposed advance of principal and/or interest would be, or any outstanding advance of principal and/or interest is, a nonrecoverable advance, such determination will not be binding on the Certificateholders, the Master Servicer, the Special Servicer or the Trustee; provided,however, with respect to any Non-Serviced Loan Combination, the Master Servicer and the Trustee may conclusively rely on such determination.
With respect to each Mortgage Loan that is part of a Loan Combination, the Master Servicer will be entitled to reimbursement for a P&I Advance,first, from amounts that would have been allocable to the holder of the related Subordinate Companion Loan, if any,second, from the amounts that would have been allocable to the holder of the related Mortgage Loan, andthen, if such P&I Advance is a Nonrecoverable Advance, from general collections of the Issuing Entity either immediately or, if it elects, over time in accordance with the terms of the Pooling and Servicing Agreement.
Neither the Master Servicer nor the Trustee will be required to make P&I Advances with respect to any delinquent payment amounts due on any Companion Loan.
In addition to P&I Advances, the Master Servicer will also be obligated (subject to a nonrecoverability determination or the other limitations described in the Pooling and Servicing Agreement and except with respect to a Non-Serviced Mortgage Loan) to make advances (“Property Advances”, and together with P&I Advances, “Advances”) to pay delinquent real estate taxes, assessments and hazard insurance premiums and to cover other similar costs and expenses necessary to preserve the priority of the related Mortgage, enforce the terms of any Mortgage Loan (other than a Non-Serviced Mortgage Loan) or to protect, manage and maintain each related Mortgaged Property. The Master Servicer will also be obligated to make Property Advances with respect to Serviced Loan Combinations. With respect to any Non-Serviced Loan Combination, the applicable servicer under the related pooling and servicing agreement will be obligated to make property advances with respect to such Non-Serviced Loan Combination. See “—Servicing of the Non-Serviced Mortgage Loan”, “Description of the Mortgage Pool—Loan Combinations—The 11 Madison Avenue Loan Combination—Advancing”and“—The NMS Los Angeles Multifamily Portfolio Loan Combination—Advancing” in this free writing prospectus.
With respect to a nonrecoverable property advance on a Non-Serviced Loan Combination, the applicable servicer with respect to the Non-Serviced Mortgage Loan will be entitled to reimbursementfirst, from collections on, and proceeds of, the Non-Serviced Mortgage Loan and any related Non-Serviced Companion Loan, on apro rata basis (based on each such loan’s outstanding principal balance), andthen, with respect to the Non-Serviced Mortgage Loan, from general collections of the Issuing Entity, and with respect to any related Non-Serviced Companion Loan, from general collections of each trust into which such Non-Serviced Companion Loan has been deposited, on apro rata basis (based on each such loan’s outstanding principal balance).
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With respect to a Property Advance on a Serviced Loan Combination, the Master Servicer will be entitled to reimbursementfirst, from amounts that would have been allocable to the holder of the related Subordinate Companion Loan, if any,second, from amounts that would have been allocable to the holder of the related Mortgage Loan and any related ServicedPari Passu Companion Loan, on apro rata basis (based on each such loan’s outstanding principal balance), andthen, if the Property Advance is a Nonrecoverable Advance, from general collections of the Issuing Entity;provided that the Master Servicer will be required, after receiving payment from amounts on deposit in the Collection Account, if any, to (i) promptly notify the holders of the related Companion Loan(s) and (ii) use commercially reasonable efforts to exercise on behalf of the Issuing Entity the rights of the Issuing Entity under the related Intercreditor Agreement to obtain reimbursement for apro rata portion of such amount allocable to the relatedPari Passu Companion Loans from the holders of suchPari Passu Companion Loans.
To the extent that the Master Servicer fails to make an Advance it is required to make under the Pooling and Servicing Agreement, the Trustee, subject to a recoverability determination, will make such required Advance pursuant to the terms of the Pooling and Servicing Agreement. The Trustee will be entitled to rely conclusively on any nonrecoverability determination of the Master Servicer and shall be bound by any nonrecoverability determination of the Special Servicer. The Trustee, as back-up advancer, will be required to have a combined capital and surplus of at least $50,000,000 and have debt ratings that satisfy certain criteria set forth in the Pooling and Servicing Agreement.
Except as otherwise discussed in this section relating to Property Advances made with respect to Loan Combinations, the Master Servicer or the Trustee, as applicable, will be entitled to reimbursement for any Advance made by it in an amount equal to the amount of such Advance, together with all accrued and unpaid interest on that Advance at the Advance Rate, (i) from late payments on the related Mortgage Loan paid by the borrower, (ii) from insurance proceeds, condemnation proceeds, liquidation proceeds from the sale of the related Specially Serviced Loan or the related Mortgaged Property or other collections relating to the Mortgage Loan or (iii) upon determining in accordance with the Servicing Standard (with respect to the Master Servicer) or in its reasonable judgment (with respect to the Trustee) that the Advance is not recoverable in the manner described in the preceding two clauses, from any other amounts from time to time on deposit in the Collection Account.
The Master Servicer and the Trustee will each be entitled to receive interest on Advances at aper annum rate equal to the Prime Rate (the “Advance Rate”) (i) from the amount of Default Interest on the related Mortgage Loan paid by the borrower, (ii) from late payment fees on the related Mortgage Loan paid by the borrower, and (iii) upon determining in good faith that the amounts described in the preceding two clauses are insufficient to pay such interest, then, from any other amounts from time to time on deposit in the Collection Account (provided that, in the case of interest on a Property Advance with respect to a Serviced Loan Combination, the Master Servicer will be required, after receiving payment from amounts on deposit in the Collection Account, if any, to (i) promptly notify the holders of the related Companion Loan(s) and (ii) use commercially reasonable efforts to exercise on behalf of the Issuing Entity the rights of the Issuing Entity under the related Intercreditor Agreement to obtain reimbursement for apro rata portion of such amount allocable to the related Companion Loans from the holders of such Companion Loans). The Master Servicer will be authorized to pay itself or the Trustee, as applicable, such interest monthly prior to any payment to holders of Certificates. If the interest on such Advance is not recovered from Default Interest and late payment charges on such Mortgage Loan, then a shortfall will result which will have the same effect as a Realized Loss. The “Prime Rate” is the rate, for any day, set forth as such in the “Money Rates” section ofThe Wall Street Journal,Eastern Edition.
The obligation of the Master Servicer or the Trustee, as applicable, to make Advances with respect to any Mortgage Loan pursuant to the Pooling and Servicing Agreement continues through the foreclosure of such Mortgage Loan and until the liquidation of the Mortgage Loan or disposition of the related REO Properties. The Advances are subject to the Master Servicer’s or the Trustee’s, as applicable, determination that such Advances are recoverable.
With respect to the payment of insurance premiums and delinquent tax assessments, in the event that the Master Servicer determines that a Property Advance of such amounts would not be recoverable, that Master Servicer will be required to notify the Trustee, the Certificate Administrator and the Special
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Servicer of such determination. Upon receipt of such notice, the Master Servicer (with respect to any Mortgage Loan or Serviced Loan Combination that is not a Specially Serviced Loan) and the Special Servicer (with respect to any Specially Serviced Loan or REO Property) will be required to determine (with the reasonable assistance of the Master Servicer) whether or not payment of such amount (i) is necessary to preserve the related Mortgaged Property and (ii) would be in the best interests of the Certificateholders (and in the case of a Serviced Companion Loan, the holder of the related Serviced Companion Loan, as a collective whole as if such Certificateholders and Serviced Companion Loan holder constituted a single lender). If the Master Servicer or the Special Servicer determines that such payment (i) is necessary to preserve the related Mortgaged Property and (ii) would be in the best interests of the Certificateholders and, in the case of any Serviced Companion Loan, the related Serviced Companion Loan noteholders, the Special Servicer (in the case of a determination by the Special Servicer) will be required to direct the Master Servicer to make such payment, who will then be required to make such payment from the Collection Account (or, with respect to a Serviced Loan Combination, the related custodial account) to the extent of available funds.
Recovery of Advances.Subject to the conditions or limitations set forth in the Pooling and Servicing Agreement, the Master Servicer or the Trustee, as applicable, will be entitled to recover any Advance and interest at the Advance Rate made out of its own funds from any amounts collected in respect of a Mortgage Loan or REO Loan (or, with respect to any Property Advance made with respect to a Serviced Loan Combination, from any amounts collected in respect of such Serviced Loan Combination) as to which that Advance was made, whether in the form of late payments, insurance proceeds, and condemnation proceeds, liquidation proceeds, REO proceeds or otherwise from the Mortgage Loan or REO Loan (or, with respect to any Property Advance made with respect to a Serviced Loan Combination, from any amounts collected in respect of such Serviced Loan Combination) (“Related Proceeds”) prior to distributions on the Certificates. Notwithstanding the foregoing, neither the Master Servicer nor the Trustee will be obligated to make any Advance that it or the Special Servicer determines (in the case of the Special Servicer, if no Consultation Termination Event has occurred and is continuing, in consultation with the Controlling Class Representative) in accordance with the Servicing Standard (with respect to the Master Servicer and the Special Servicer) and in its reasonable judgment (with respect to the Trustee) would, if made, not be ultimately recoverable (including interest on the Advance at the Advance Rate) out of Related Proceeds (a “Nonrecoverable Advance”). Any such determination with respect to the recoverability of Advances by the Master Servicer, the Trustee or the Special Servicer, must be evidenced by an officer’s certificate delivered to the Depositor, the Certificate Administrator, the Operating Advisor, the Special Servicer, any related ServicedPari Passu Companion Loan holder(s), the Controlling Class Representative (but only if no Consultation Termination Event has occurred and is continuing), and the Trustee and, in the case of the Trustee, delivered to the Depositor, the Certificate Administrator, any related ServicedPari Passu Companion Loan holder(s), the Controlling Class Representative (but only if no Consultation Termination Event has occurred and is continuing), the Operating Advisor, the Master Servicer and the Special Servicer, setting forth such nonrecoverability determination and the considerations of such party forming the basis of such determination (such certificate accompanied by, to the extent available, income and expense statements, rents rolls, occupancy status, property inspections and other information used by such party to make such determination, together with any existing appraisal or Updated Appraisal);provided,however, that the Special Servicer may, at its option, make a determination in accordance with the Servicing Standard, that any Advance previously made or proposed to be made is nonrecoverable and shall deliver to the Master Servicer, the Operating Advisor, the Certificate Administrator, any related ServicedPari Passu Companion Loan holder(s), the Controlling Class Representative (but only if no Consultation Termination Event has occurred and is continuing), the Trustee and the 17g-5 Information Provider (who will promptly post such notice to the 17g-5 Information Provider’s website) notice of such determination, together with the officer’s certificate and supporting information referred to above. Any such determination will be conclusive and binding on the Master Servicer, the Special Servicer and the Trustee.
Subject to the discussion in this section relating to Property Advances made with respect to the Loan Combinations, each of the Master Servicer and the Trustee will be entitled to recover any Advance made by it that it or the Special Servicer subsequently determines to be a Nonrecoverable Advance out of general funds on deposit in the Collection Account (or, with respect to any Property Advance made with
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respect to a Serviced Loan Combination,first, out of general funds on deposit in the custodial account related to such Serviced Loan Combination andthen, out of general funds on deposit in the Collection Account), in each case,first, from principal collections andthen, from interest and other collections. If the funds in the Collection Account allocable to principal and available for distribution on the next Distribution Date are insufficient to fully reimburse the party entitled to reimbursement, then such party may elect, on a monthly basis, in its sole discretion, to defer reimbursement of the portion that exceeds such amount allocable to principal (in which case interest will continue to accrue on the unreimbursed portion of the Advance at the Advance Rate) for such time as is required to reimburse such excess portion from principal for a period not to exceed 12 months (with the consent of the Directing Holder, for so long as no Control Termination Event has occurred and is continuing, for any deferral in excess of 6 months). At any time after such determination, the Master Servicer or the Trustee, as applicable, may, in its sole discretion, decide to obtain reimbursement out of general collections on the Mortgage Pool immediately. The fact that a decision to recover a Nonrecoverable Advance over time, or not to do so, benefits some Classes of Certificateholders to the detriment of other Classes of Certificateholders will not constitute a violation of the Servicing Standard or a breach of the terms of the Pooling and Servicing Agreement by any party to the Pooling and Servicing Agreement, or a violation of any fiduciary duty owed to the Certificateholders by any party to the Pooling and Servicing Agreement. In addition, the Master Servicer or the Trustee, as applicable, will be entitled to recover any Advance that is outstanding at the time that a Mortgage Loan, REO Loan or Serviced Loan Combination, as applicable, is modified but is not repaid in full by the borrower in connection with such modification but becomes an obligation of the borrower to pay such amounts in the future (such Advance, a “Workout-Delayed Reimbursement Amount”), (A) if with respect to a Serviced Loan Combination which includes a Subordinate Companion Loan,first, only out of principal collections on the Subordinate Companion Loan,then, out of principal collections in the Collection Account, and (B) with respect to a Mortgage Loan or any Serviced Loan Combination which includes a ServicedPari PassuCompanion Loan,first, only out of principal collections in the Collection Account (provided that, with respect to a Property Advance relating to a Serviced Loan Combination, the Master Servicer will be required, after receiving payment from amounts on deposit in the Collection Account, if any, to (i) promptly notify the holders of the related Companion Loan(s) and (ii) use commercially reasonable efforts to exercise on behalf of the Issuing Entity the rights of the Issuing Entity under the related Intercreditor Agreement to obtain reimbursement for apro rata portion of such amount allocable to the related ServicedPari Passu Companion Loans from the holders of such ServicedPari Passu Companion Loans), less any amounts applied to reimbursement of any nonrecoverable Advances or interest thereon andsecond, with respect to both clauses (A) and (B) above, only upon a determination by the Master Servicer, the Special Servicer or the Trustee, as applicable, that either (a) such amounts will not ultimately be recoverable from late collections of interest and principal or any other recovery on or in respect of the related Mortgage Loan or REO Loan or (b) such Workout-Delayed Reimbursement Amounts would not ultimately be recoverable, along with any other Workout-Delayed Reimbursement Amounts and Nonrecoverable Advances, out of the principal portion of future collections on all of the Mortgage Loans and the REO Properties, from general collections in the Collection Account, taking into account the factors listed below in making this determination. In making a nonrecoverability determination, such person will be entitled to (i) give due regard to the existence of any Nonrecoverable Advance or Workout-Delayed Reimbursement Amount with respect to other Mortgage Loans, the recovery of which, at the time of such consideration, is being deferred or delayed by the Master Servicer or the Trustee, as applicable, in light of the fact that proceeds on the related Mortgage Loan are a source of recovery not only for the Property Advance or P&I Advance under consideration, but also as a potential source of recovery of such Nonrecoverable Advance or Workout-Delayed Reimbursement Amounts which is or may be being deferred or delayed and (ii) consider (among other things) the obligations of the borrower under the terms of the related Mortgage Loan (or the Serviced Loan Combination, as applicable) as it may have been modified, (iii) consider (among other things) the related Mortgaged Properties in their “as-is” or then-current conditions and occupancies, as modified by such party’s assumptions (consistent with the Servicing Standard in the case of the Master Servicer or the Special Servicer) regarding the possibility and effects of future adverse changes with respect to such Mortgaged Properties, (iv) estimate and consider (consistent with the Servicing Standard in the case of the Master Servicer or the Special Servicer) (among other things) future expenses and (v) estimate and consider (among other things) the timing of recoveries. In addition, any such person may update or change its recoverability determinations at any time (but not reverse any other person’s determination that an
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Advance is non-recoverable) and (consistent with the Servicing Standard in the case of the Master Servicer or the Special Servicer) may obtain, at the expense of the Issuing Entity (and, in the case of a Serviced Loan Combination, such expense shall be allocated in accordance with the allocation provisions of the related intercreditor agreement), any analysis, appraisals or market value estimates or other information for such purposes. Absent bad faith, any such determination will be conclusive and binding on the Certificateholders and, with respect to Property Advances, the holders of the Serviced Companion Loans. The Trustee will be entitled to rely conclusively on any nonrecoverability determination of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer will be entitled to rely conclusively on any nonrecoverability determination of the Special Servicer. Nonrecoverable Advances allocated to the Mortgage Loans (including with respect to any Mortgage Loan that is part of a Loan Combination, as described above) will represent a portion of the losses to be borne by the Certificateholders.
In addition, the Master Servicer, the Special Servicer and the Trustee, as applicable, will be required to consider Unliquidated Advances in respect of prior Advances for purposes of nonrecoverability determinations as if such Unliquidated Advances were unreimbursed Advances. Neither the Master Servicer nor the Trustee will be required to make any principal or interest advances with respect to delinquent amounts due on any Companion Loan. Any requirement of the Master Servicer or Trustee to make an Advance in the Pooling and Servicing Agreement is intended solely to provide liquidity for the benefit of the Certificateholders and not as credit support or otherwise to impose on any such person the risk of loss with respect to one or more Mortgage Loans.
“Unliquidated Advance” means any Advance previously made by a party to the Pooling and Servicing Agreement that has been previously reimbursed, as between the person that made the Advance under the Pooling and Servicing Agreement, on the one hand, and the Issuing Entity, on the other, as part of a Workout-Delayed Reimbursement Amount, as applicable, but that has not been recovered from the related borrower or otherwise from collections on or the proceeds of the Mortgage Loan, the applicable Serviced Loan Combination or Serviced REO Property in respect of which the Advance was made.
Accounts
Collection Account. The Master Servicer will establish and maintain one or more segregated accounts (collectively, the “Collection Account”) pursuant to the Pooling and Servicing Agreement, and will be required to deposit into the Collection Account (or, with respect to each Serviced Loan Combination, a separate custodial account, which may be a sub-account of the Collection Account) all payments in respect of the Mortgage Loans or Serviced Loan Combinations, as applicable, other than amounts permitted to be withheld by the Master Servicer or amounts to be deposited into any Reserve Account.
Distribution Account. The Certificate Administrator will establish and maintain a segregated non-interest-bearing account (the “Distribution Account”) in its own name on behalf of the Trustee, for the benefit of the Certificateholders. With respect to each Distribution Date, the Master Servicer will remit on or before the Master Servicer Remittance Date to the Certificate Administrator, and the Certificate Administrator will deposit into the Distribution Account, to the extent of funds on deposit in the Collection Account, on the Master Servicer Remittance Date an amount of immediately available funds equal to the sum of (i) the Available Funds (including all P&I Advances) and (ii) the Trustee/Certificate Administrator Fee. To the extent the Master Servicer fails to do so, the Trustee will deposit all P&I Advances into the Distribution Account as described in this free writing prospectus. See “Description of the Offered Certificates—Distributions” in this free writing prospectus.
Interest Reserve Account. The Certificate Administrator will establish and maintain a segregated non-interest-bearing account (the “Interest Reserve Account”) in its own name on behalf of the Trustee, in trust for the benefit of the Certificateholders (other than with respect to the Class V Certificates). The Interest Reserve Account may be a subaccount of the Distribution Account. The Certificate Administrator will be required to deposit into the Interest Reserve Account, with respect to each Mortgage Loan that accrues interest based on the actual number of days elapsed during any calendar month (or other
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applicable accrual period) in a year assumed to consist of 360 days, on each Distribution Date occurring in February and each Distribution Date occurring in any January, which occurs in a year that is not a leap year, unless such Distribution Date is the final Distribution Date, an amount equal to one (1) day’s interest at the related Net Mortgage Pass-Through Rate on the respective Stated Principal Balance as of the immediately preceding Due Date, to the extent a Monthly Payment or P&I Advance is made in respect thereof (all amounts so deposited, “Withheld Amounts”).
REO Accounts. Other accounts to be established pursuant to the Pooling and Servicing Agreement are one or more REO Accounts for collections from REO Properties.
Excess Interest. The Certificate Administrator is required to establish and maintain the “Class V Distribution Account” in its own name, for the benefit of the Class V Certificateholders. The Class V Distribution Account may be a subaccount of the Distribution Account. On each Distribution Date, the Certificate Administrator is required to distribute from the Class V Distribution Account any Excess Interest received with respect to any ARD Loan during the related Collection Period to the holders of the Class V Certificates.
The Certificate Administrator will also be deemed to establish and maintain one or more segregated non-interest-bearing accounts or sub-accounts for the “Lower-Tier Distribution Account,” the “Upper-Tier Distribution Account” and the “Excess Liquidation Proceeds Account,” each in its own name on behalf of the Trustee, in trust for the benefit of the Certificateholders. The Lower-Tier Distribution Account and the Upper-Tier Distribution Account may be subaccounts of the Distribution Account.
The Collection Account, the separate custodial account for each Serviced Loan Combination, any REO Account, the Lower-Tier Distribution Account, the Upper-Tier Distribution Account, the Class V Distribution Account, the Interest Reserve Account and the Excess Liquidation Proceeds Account will be held in the name of the Trustee (or the Master Servicer, Special Servicer or Certificate Administrator, as applicable, on behalf of the Trustee) for the benefit of the holders of Certificates and, in the case of the separate custodial account for a Serviced Loan Combination, the holder of the related Serviced Companion Loan, and with respect to the Lower-Tier Distribution Account, for the benefit of the Trustee as the holder of the related uncertificated regular interests. Each of the Collection Account, the separate custodial account for each Serviced Loan Combination, any REO Account, the Lower-Tier Distribution Account, the Upper-Tier Distribution Account, the Class V Distribution Account, the Interest Reserve Account and the Excess Liquidation Proceeds Account will be (or will be a sub-account of) (i) an account or accounts maintained with a depository institution or trust company the short-term unsecured debt obligations or commercial paper of which are rated at least “P-1” by Moody’s, “F1” by Fitch and “R-1 (middle)” by DBRS (or, if not rated by DBRS, an equivalent (or higher) rating by any two other NRSROs (which may include Moody’s and Fitch)), in the case of accounts in which deposits have a maturity of 30 days or less or, in the case of accounts in which deposits have a maturity of more than 30 days, the long-term unsecured debt obligations of which are rated at least “A2” by Moody’s, “A” by Fitch and “A” by DBRS (or, if not rated by DBRS, an equivalent (or higher) rating by any two other NRSROs (which may include Moody’s and Fitch)), (ii) an account or accounts maintained with PNC Bank, National Association so long as PNC Bank, National Association’s long-term unsecured debt or deposit accounts are rated at least “A2” by Moody’s and “A” by DBRS (if rated by DBRS or, if not rated by DBRS, an equivalent (or higher) rating by any two other NRSROs (which may include Moody’s and Fitch)) (if the deposits are to be held in the account for more than 30 days) or PNC Bank, National Association’s short-term deposit accounts or short-term unsecured debt rating is rated at least “P-1” by Moody’s and “R-1 (middle)” by DBRS (if rated by DBRS or, if not rated by DBRS, an equivalent (or higher) rating by any two other NRSROs (which may include Moody’s and Fitch)) (if the deposits are to be held in the account for 30 days or less), (iii) an account or accounts maintained with Wells Fargo Bank, National Association so long as Wells Fargo Bank, National Association’s long-term unsecured debt rating shall be at least “A2” by Moody’s (if the deposits are to be held in the account for more than 30 days) and “A” by DBRS (if rated by DBRS or, if not rated by DBRS, an equivalent rating such as that listed above by at least two NRSROs (which may include Moody’s and Fitch)) (if the deposits are to be held in the account for more than 30 days) or Wells Fargo Bank, National Association’s short-term deposit or short-term unsecured debt rating shall be at least “P-1” by Moody’s (if the deposits are to be held in the account for 30 days or less) and
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“R-1 (middle)” by DBRS (if rated by DBRS or, if not rated by DBRS, an equivalent rating such as that listed above by at least two NRSROs (which may include Moody’s and Fitch)) (if the deposits are to be held in the account for 30 days or less), (iv) an account or accounts maintained with KeyBank National Association, so long as such KeyBank National Association’s (a) long-term unsecured debt obligations or deposits are rated at least “A2” by Moody’s and “BBB (high)” by DBRS (or, if not rated by DBRS, an equivalent (or higher) rating by any two other NRSROs (which may include Moody’s and Fitch)) if the deposits are to be held in the account for more than 30 days or (b) short term deposit accounts or short term unsecured debt or deposits are rated at least “P-1” by Moody’s and “R-1 (low)” by DBRS (or, if not rated by DBRS, an equivalent (or higher) rating by any two other NRSROs (which may include Moody’s and Fitch)) if the deposits are to be held in the account for 30 days or less, (v) a segregated trust account or accounts maintained with the trust department of a federal or state chartered depository institution or trust company acting in its fiduciary capacity which institution or trust company (which, subject to the remainder of this clause (v), may include the Certificate Administrator or the Trustee) has a combined capital and surplus of at least $50,000,000 and is subject to supervision or examination by federal or state authority and to regulations regarding fiduciary funds on deposit similar to Title 12 of the Code of Federal Regulations, Section 9.10(b) and the long-term unsecured debt obligations of which are rated at least “A2” by Moody’s, (vi) such other account or accounts that, but for the failure to satisfy one or more of the minimum rating(s) set forth in the applicable clause, would be listed in clauses (i)-(v) above, with respect to which a No Downgrade Confirmation has been obtained from each Rating Agency for which the minimum ratings set forth in the applicable clause is not satisfied with respect to such account or (vii) any other account as to which the Certificate Administrator, the Trustee, the Master Servicer or the Special Servicer, as applicable, receives a No Downgrade Confirmation from each Rating Agency, which may be an account maintained by or with the Certificate Administrator, the Trustee, the Master Servicer or the Special Servicer.
With respect to each of the accounts, the party that maintains such account (i.e., the Master Servicer, with respect to the Collection Account, the Certificate Administrator with respect to the Distribution Account, the Class V Distribution Account, the Interest Reserve Account and the Excess Liquidation Proceeds Account, and the Special Servicer with respect to any REO Account) shall be the party with the right and obligation to make disbursements from such account. The Certificate Administrator will have the right to invest the funds in the Distribution Account, the Interest Reserve Account and the Excess Liquidation Proceeds Account, the Master Servicer will have the right to invest the funds in the Collection Account and the separate custodial account for each Serviced Loan Combination, and the Special Servicer will have the right to invest the funds in any REO Account, in each case, in certain short-term high quality investments maturing on the business day prior to the date such funds are required to be applied pursuant to the Pooling and Servicing Agreement. The Certificate Administrator, the Master Servicer or the Special Servicer (as applicable) will be entitled to retain any interest or other income earned on those funds and will bear any losses resulting from the investment of these funds other than losses resulting from investments directed by or on behalf of a borrower or that result from the insolvency of any financial institution that was an eligible institution under the terms of the Pooling and Servicing Agreement at the time the investment was made and 30 days prior to such insolvency. The transaction accounts and account activity conducted by the Master Servicer, Special Servicer or Certificate Administrator with respect to any account maintained by it will not be independently verified by any other person or entity.
The Master Servicer may make withdrawals from the Collection Account (and the separate custodial account for each Serviced Loan Combination), to the extent permitted and in the priorities provided in the Pooling and Servicing Agreement.
Enforcement of “Due-On-Sale” and “Due-On-Encumbrance” Clauses
Due-On-Sale Clauses. In most cases, the Mortgage Loans (and the Serviced Loan Combinations) contain provisions in the nature of “due-on-sale” clauses (including, without limitation, sales or transfers of Mortgaged Properties (in full or part) or the sale, transfer, pledge or hypothecation of direct or indirect interests in the borrower or its owners), which by their terms, subject to any exceptions in the related Mortgage Loan Documents, (a) provide that the Mortgage Loans (or the Serviced Loan Combinations) will
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(or may at the lender’s option) become due and payable upon the sale or other transfer of an interest in the related Mortgaged Property (or the related borrower or its owners), (b) provide that the Mortgage Loans (or the Serviced Loan Combinations) may not be assumed without the consent of the related lender in connection with any such sale or other transfer or (c) provide that such Mortgage Loans (or the Serviced Loan Combinations) may be assumed or transferred without the consent of the lender provided certain conditions are satisfied. The Special Servicer will be responsible for determining whether to enforce any such due-on-sale clauses or to provide its consent to such an assumption and for the handling of all related processing and documentation, or, if mutually agreed to by the Master Servicer and the Special Servicer, the Master Servicer will be required to process such request subject to the consent of the Special Servicer. The Special Servicer will not be required to enforce any such due-on-sale clauses and in connection therewith will not be required to (i) accelerate payments thereon or (ii) withhold its consent to such an assumption if (x) such provision is not exercisable under applicable law or if the Special Servicer determines, subject to the discussion above under “—The Directing Holder” and “—The Operating Advisor” in this free writing prospectus, that the enforcement of such provision is reasonably likely to result in meritorious legal action by the borrower or (y) subject to the discussion above under “—The Directing Holder” and “—The Operating Advisor” in this free writing prospectus, the Special Servicer determines, in accordance with the Servicing Standard, that granting such consent would be likely to result in a greater recovery, on a present value basis (discounting at the related Mortgage Rate or other applicable discount rate), than would enforcement of such clause. If the Special Servicer determines that (i) granting such consent would be likely to result in a greater recovery, (ii) such provisions are not legally enforceable, or (iii) in the case of a Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Loan Combination described in clause (c) of this paragraph, that the conditions to sale or transfer have been satisfied, the Master Servicer or the Special Servicer is authorized to take or enter into an assumption agreement from or with the proposed transferee as obligor thereon and to release the original borrower;provided that (a) the credit status of the prospective transferee is in compliance with the Servicing Standards and criteria and the terms of the related Mortgage and (b) the Special Servicer has received a No Downgrade Confirmation (and, if the affected Mortgage Loan is part of a Serviced Loan Combination, a No Downgrade Confirmation with respect to any commercial mortgage pass-through certificates backed by any related Serviced Companion Loan (“Companion Loan Securities”)) from Moody’s, Fitch or DBRS with respect to any Mortgage Loan that (A) represents more than 5% of the aggregate Stated Principal Balance of the Mortgage Loans then outstanding and has a Stated Principal Balance of at least $10,000,000, (B) has a Stated Principal Balance that is more than $35,000,000, (C) represents one of the 10 largest Mortgage Loans based on Stated Principal Balance and has a Stated Principal Balance of at least $10,000,000 or (D) is a Mortgage Loan as to which the related Serviced Companion Loan represents one of the 10 largest mortgage loans in the related other securitization (provided that the Special Servicer will be entitled to reasonably rely upon the written notification provided by the master servicer, special servicer, trustee or certificate administrator of such other securitization as to whether such Serviced Companion Loan is one of the 10 largest mortgage loans in such other securitization). To the extent not precluded by the Mortgage Loan Documents, the Special Servicer may not approve an assumption or substitution without requiring the related borrower to pay any fees owed to the Rating Agencies associated with the approval of such assumption or substitution. However, in the event that the related borrower is required but fails to pay such fees, such fees will be an expense of the Issuing Entity;provided that in the case of a Serviced Loan Combination the Special Servicer or the Master Servicer, as applicable, will be required, after receiving payment from amounts on deposit in the Collection Account, if any, to (i) promptly notify the holder of the relatedPari Passu Companion Loan and (ii) use commercially reasonable efforts to exercise on behalf of the Issuing Entity the rights of the Issuing Entity under the related Intercreditor Agreement to obtain reimbursement for apro rata portion of such amount allocable to such ServicedPari Passu Companion Loans from the holders of such ServicedPari Passu Companion Loans. No assumption agreement may contain any terms that are different from any term of any Mortgage or related Note, except pursuant to the provisions described under “—Realization Upon Mortgage Loans” and “—Modifications” below.
Due-On-Encumbrance Clauses. In most cases, the Mortgage Loans (and the Serviced Loan Combinations) contain provisions in the nature of a “due-on-encumbrance” clause which by their terms, subject to any exceptions in the related Mortgage Loan Documents, (a) provide that the related Mortgage Loan (or Serviced Loan Combination) will (or may at the lender’s option) become due and payable upon
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the creation of any lien or other encumbrance on the related Mortgaged Property or any ownership interest in the borrower (including, unless specifically permitted, any mezzanine financing of the borrower or the Mortgaged Property or any sale or transfer of preferred equity in the borrower or its owners), (b) require the consent of the related lender to the creation of any such lien or other encumbrance on the related Mortgaged Property (including, without limitation, any mezzanine financing of the borrower or the Mortgaged Property or any sale or transfer of preferred equity in the borrower or its owners) or (c) provide that such Mortgaged Property may be further encumbered without the consent of the lender (including, without limitation, any mezzanine financing of the borrower or the Mortgaged Property or any sale or transfer of preferred equity in the borrower or its owners), provided certain conditions are satisfied. The Special Servicer will be responsible for determining whether to enforce any such due-on-encumbrance clauses or to provide its consent to such a loan or encumbrance and for the handling of all related processing and documentation or, if mutually agreed to by the Master Servicer and the Special Servicer, the Master Servicer will be required to process such request subject to the consent of the Special Servicer. The Special Servicer will not be required to enforce such due-on-encumbrance clauses and in connection therewith, will not be required to (i) accelerate payments thereon or (ii) withhold its consent to such lien or encumbrance if, subject to the discussion above under “—The Directing Holder” and “—The Operating Advisor” in this free writing prospectus, the Special Servicer (A) determines, in accordance with the Servicing Standard, that such enforcement would not be in the best interests of the Issuing Entity or the holder of any Serviced Companion Loan, if applicable, or that in the case of a Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Loan Combination described in clause (c) of this paragraph, that the conditions to further encumbrance have been satisfied and (B) receives a prior No Downgrade Confirmation (including a No Downgrade Confirmation with respect to any Companion Loan Securities) from Moody’s, Fitch and DBRS with respect to any Mortgage Loan that (A) represents more than 2% of the aggregate Stated Principal Balance of the Mortgage Loans then outstanding, (B) has a Stated Principal Balance that is more than $20,000,000, (C) represents one of the 10 largest Mortgage Loans based on Stated Principal Balance, (D) has an aggregate loan-to-value ratio (including any existing and proposed additional debt) that is equal to or greater than 85%, (E) has an aggregate debt service coverage ratio (in each case, determined based upon the aggregate of the Stated Principal Balance of the related Mortgage Loan, any existing additional debt and the principal amount of the proposed additional lien) that is less than 1.20x, or (F) is a Mortgage Loan as to which the related Serviced Companion Loan represents one of the ten largest mortgage loans in the related other securitization (provided that the Special Servicer will be entitled to reasonably rely upon the written notification provided by the master servicer, special servicer, trustee or certificate administrator of the applicable other securitization as to whether such Serviced Companion Loan is one of the 10 largest mortgage loans in such other securitization);provided that with respect to clauses (A), (C), (D), (E) and (F), such Mortgage Loan must also have a Stated Principal Balance of at least $10,000,000 for the requirement of a No Downgrade Confirmation to apply. To the extent not precluded by the Mortgage Loan Documents, the Special Servicer may not approve the creation of any lien or other encumbrance without requiring the related borrower to pay any fees owed to the Rating Agencies associated with the approval of such lien or encumbrance. However, in the event that the related borrower is required but fails to pay such fees, such fees will be an expense of the Issuing Entity;provided that in the case of a Serviced Loan Combination the Special Servicer or the Master Servicer, as applicable, will be required, after receiving payment from amounts on deposit in the Collection Account, if any, to (i) promptly notify the holder of the relatedPari Passu Companion Loan and (ii) use commercially reasonable efforts to exercise on behalf of the Issuing Entity the rights of the Issuing Entity under the related Intercreditor Agreement to obtain reimbursement for apro rata portion of such amount allocable to such ServicedPari Passu Companion Loans from the holders of such ServicedPari Passu Companion Loan. Neither the Master Servicer nor the Special Servicer will be responsible for enforcing a “due-on-sale” or a “due-on-encumbrance” clause with respect to any Non-Serviced Mortgage Loan.
Notwithstanding the foregoing, without any other approval or consent, the Master Servicer (for non-Specially Serviced Loans) or the Special Servicer (for Specially Serviced Loans) may grant and process a borrower’s request for (i) consent to subject the related Mortgaged Property to an immaterial easement, right of way or similar agreement for utilities, access, parking, public improvements or another purpose, (ii) consent to subordination of the related Mortgage Loan to such easement, right of way or similar agreement, and (iii) consent to any other matter that is not a Major Decision or Special Servicer Decision.
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In any such case, the Master Servicer or the Special Servicer, as applicable, will be entitled to 100% of the related fees.
Inspections
The Master Servicer (or, with respect to any Specially Serviced Loan and Serviced REO Property, the Special Servicer) is required to inspect or cause to be inspected each Mortgaged Property (other than a Mortgaged Property securing a Non-Serviced Mortgage Loan) at such times and in such manner as is consistent with the Servicing Standard, but in any event is required to inspect each Mortgaged Property securing a Note, with a Stated Principal Balance (or in the case of a Mortgage Loan secured by more than one Mortgaged Property, having an Allocated Loan Amount) of (a) $2,000,000 or more at least once every 12 months commencing in 2016 and (b) less than $2,000,000 at least once every 24 months, commencing in 2017 (or at such decreased frequency as each Rating Agency shall have provided a No Downgrade Confirmation relating to the Certificates and Companion Loan Securities, if any);provided,however, that if any Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Loan Combination becomes a Specially Serviced Loan, the Special Servicer is required to inspect or cause to be inspected the related Mortgaged Property as soon as practicable after the Mortgage Loan or Serviced Loan Combination becomes a Specially Serviced Loan and annually thereafter for so long as the Mortgage Loan remains a Specially Serviced Loan;provided,further, that the Master Servicer will not be required to inspect a Mortgaged Property that has been inspected in the previous 6 months. The reasonable cost of each such inspection performed by the Special Servicer will be paid by the Master Servicer as a Property Advance or if such Property Advance would not be recoverable, as an expense of the Issuing Entity including out of general collections. With respect to a Serviced Loan Combination, the costs described in the preceding sentence above that relate to the applicable Serviced Loan Combination will be paid out of amounts on deposit in the separate custodial account maintained with respect to such Serviced Loan Combination (allocated in accordance with the expense allocation provision of the related Intercreditor Agreement). If funds in the applicable custodial account relating to a Serviced Loan Combination are insufficient, then any deficiency will be paid from amounts on deposit in the Collection Account;provided that the Master Servicer will be required, after receiving payment from amounts on deposit in the Collection Account, if any, to (i) promptly notify the holder of the relatedPari Passu Companion Loan and (ii) use commercially reasonable efforts to exercise on behalf of the Issuing Entity the rights of the Issuing Entity under the related Intercreditor Agreement to obtain reimbursement for apro rata portion of such amount allocable to the related ServicedPari Passu Companion Loans from the holders of such ServicedPari Passu Companion Loans. The Master Servicer or the Special Servicer, as applicable, will be required to prepare a written report of the inspection describing, among other things, the condition of and any damage to the Mortgaged Property and specifying the existence of any material vacancies in the Mortgaged Property, any sale, transfer or abandonment of the Mortgaged Property of which it has actual knowledge, any material adverse change in the condition of the Mortgaged Property, or any visible material waste committed on the Mortgaged Property. Inspection of the Mortgaged Properties securing any Non-Serviced Mortgage Loan will be conducted by the other servicers appointed under, and performed in accordance with the terms of, the servicing agreement governing such Non-Serviced Mortgage Loan.
Insurance Policies
In the case of each Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Loan Combination, as applicable (but excluding any Mortgage Loan as to which the related Mortgaged Property has become an REO Property and any Non-Serviced Mortgage Loan), the Master Servicer will be required to use commercially reasonable efforts consistent with the Servicing Standard to cause the related borrower to maintain the following insurance coverage (including identifying the extent to which such borrower is maintaining insurance coverage and, if such borrower does not so maintain, the Master Servicer will be required to itself cause to be maintained) for the related Mortgaged Property: (a) except where the Mortgage Loan Documents permit a borrower to rely on self-insurance provided by a tenant, a fire and casualty extended coverage insurance policy that does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of the full replacement cost of the improvements securing the Mortgage Loan or Serviced Loan Combination, as applicable, or the Stated
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Principal Balance of the Mortgage Loan or the Serviced Loan Combination, as applicable, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, and (b) all other insurance coverage as is required (including, but not limited to, coverage for acts of terrorism), subject to applicable law, under the related Mortgage Loan Documents.
Notwithstanding the foregoing, the Master Servicer will not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless the Trustee has an insurable interest and such insurance policy was (x) in effect at the time of the origination of such Mortgage Loan or the Serviced Loan Combination, as applicable, or (y) required by the related Mortgage Loan Documents and is available at commercially reasonable rates;provided that the Master Servicer will be required to require the related borrower to maintain such insurance in the amount, in the case of clause (x), maintained at origination, and in the case ofclause (y), required by such Mortgage Loan or Serviced Loan Combination, in each case, to the extent such amounts are available at commercially reasonable rates and to the extent the Trustee has an insurable interest;
(i) if and to the extent that any Mortgage Loan Document grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related borrower is to obtain the requisite insurance coverage, the Master Servicer must (to the extent consistent with the Servicing Standard) require the related borrower to obtain the requisite insurance coverage from qualified insurers that meet the required ratings set forth in the Pooling and Servicing Agreement;
(ii) the Master Servicer will have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to enforce those insurance requirements against any borrower;provided that this will not limit the Master Servicer’s obligation to obtain and maintain a force-placed insurance policy as set forth in the Pooling and Servicing Agreement;
(iii) except as provided below, in no event will the Master Servicer be required to cause the borrower to maintain, or itself obtain, insurance coverage to the extent that the failure of such borrower to maintain insurance coverage is an Acceptable Insurance Default (as determined by the Special Servicer subject to the discussion above under “—The Directing Holder” and “—The Operating Advisor” above in this free writing prospectus);
(iv) to the extent the Master Servicer itself is required to maintain insurance that the borrower does not maintain, the Master Servicer will not be required to maintain insurance other than what is available on a force-placed basis at commercially reasonable rates, and only to the extent the Issuing Entity as lender has an insurable interest thereon; and
(v) any explicit terrorism insurance requirements contained in the related Mortgage Loan Documents are required to be enforced by the Master Servicer in accordance with the Servicing Standard (unless the Special Servicer and, if no Control Termination Event has occurred and is continuing, the Directing Holder, have consented to a waiver (including a waiver to permit the Master Servicer to accept insurance that does not comply with specific requirements contained in the Mortgage Loan Documents) in writing of that provision in accordance with the Servicing Standard).
With respect to each Serviced REO Property, the Special Servicer will generally be required to use reasonable efforts, consistent with the Servicing Standard, to maintain with an insurer meeting certain criteria set forth in the Pooling and Servicing Agreement (subject to the right of the Special Servicer to direct the Master Servicer to make a Property Advance for the costs associated with coverage that the Special Servicer determines to maintain, in which case the Master Servicer will be required to make that Property Advance (subject to the recoverability determination and Property Advance procedures described above under “—Advances” in this free writing prospectus)) to the extent reasonably available at commercially reasonable rates and to the extent the Trustee has an insurable interest (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of the full replacement value of the Mortgaged Property or the Stated Principal Balance of the Mortgage Loan (other than a Non-Serviced Mortgage Loan), REO
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Loan or Serviced Loan Combination, as applicable (or such greater amount of coverage required by the related Mortgage Loan Documents (unless such amount is not available or if no Control Termination Event has occurred and is continuing, the Directing Holder has consented to a lower amount)), but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1,000,000 per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least 12 months. However, the Special Servicer will not be required in any event to maintain or obtain insurance coverage described in this paragraph beyond what is reasonably available at a commercially reasonable rates and consistent with the Servicing Standard.
If either (x) the Master Servicer or the Special Servicer obtains and maintains, or causes to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans (other than a Non-Serviced Mortgage Loan) and the Serviced Loan Combinations and the Serviced REO Properties, as applicable, as to which it is the Master Servicer or the Special Servicer, as the case may be, then, to the extent such policy (i) is obtained from an insurer meeting certain criteria set forth in the Pooling and Servicing Agreement, and (ii) provides protection equivalent to the individual policies otherwise required or (y) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations or deposit accounts that are rated not lower than “A2” by Moody’s and “A-” by Fitch, and the Master Servicer or the Special Servicer self-insures for its obligation to maintain the individual policies otherwise required, then the Master Servicer or Special Servicer, as the case may be, will conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or Serviced REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, that maintains such policy will be required, if there shall not have been maintained on any Mortgaged Property securing a Mortgage Loan (other than a Non-Serviced Mortgage Loan)or Serviced REO Property thereunder a hazard insurance policy complying with the requirements described above, and there shall have been one or more losses that would have been covered by such an individual policy, to promptly deposit into the Collection Account (or, with respect to a Serviced Loan Combination, the related separate custodial account), from its own funds, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan or the related Serviced Loan Combination (or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard).
The costs of the insurance premiums incurred by the Master Servicer or the Special Servicer may be recovered by the Master Servicer or the Special Servicer, as applicable, from reimbursements received from the related borrower or, if the borrower does not pay those amounts, as a Property Advance (to the extent that such Property Advances are recoverable advances) as set forth in the Pooling and Servicing Agreement. However, even if such Property Advance would be a nonrecoverable advance, the Master Servicer or the Special Servicer, as applicable, may make such payments using funds held in the Collection Account (or, with respect to a Serviced Loan Combination, the related separate custodial account) or may be permitted or required to make such Property Advance, subject to certain conditions set forth in the Pooling and Servicing Agreement.
No pool insurance policy, special hazard insurance policy, bankruptcy bond, repurchase bond or certificate guarantee insurance will be maintained with respect to the Mortgage Loans or any Serviced Loan Combination, nor will any Mortgage Loan be subject to Federal Housing Administration insurance.
Assignment of the Mortgage Loans
The Depositor will purchase the Mortgage Loans to be included in the Issuing Entity on or before the Closing Date from the Mortgage Loan Sellers pursuant to four separate mortgage loan purchase agreements (the “Mortgage Loan Purchase Agreements”). See “The Sponsors,Mortgage Loan Sellers and Originators” in this free writing prospectus.
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On the Closing Date, the Depositor will sell, transfer or otherwise convey, assign or cause the assignment of the Mortgage Loans, without recourse, together with the Depositor’s rights and remedies against the Mortgage Loan Sellers in respect of breaches of representations and warranties regarding the Mortgage Loans, to the Trustee for the benefit of the holders of the Certificates. On or prior to the Closing Date, the Depositor will deliver to the Custodian, the Note and certain other documents and instruments (the “Mortgage Loan Documents”) with respect to each Mortgage Loan. The Custodian will hold such documents in trust for the benefit of the holders of the Certificates. The Custodian is obligated to review certain documents for each Mortgage Loan within 60 days of the Closing Date and report any missing documents or certain types of defects therein to the Trustee, the Certificate Administrator, the Depositor, the Master Servicer, the Special Servicer, the Operating Advisor, the Directing Holder (but for so long as no Consultation Termination Event has occurred and is continuing) and the related Mortgage Loan Seller.
Each of the Mortgage Loan Sellers will, or will retain a third party vendor (which may be the Trustee or the Custodian) to, complete the assignment and recording or filing of the related Mortgage Loan Documents to the Trustee for the benefit of the Certificateholders. Each Mortgage Loan Seller will be required to effect (at its expense) the assignment and recordation or filing of the related Mortgage Loan Documents until the assignment and recordation or filing of all Mortgage Loan Documents has been completed.
Representations and Warranties; Repurchase; Substitution
In the Pooling and Servicing Agreement, the Depositor will assign to the Trustee for the benefit of Certificateholders the representations and warranties made by the Mortgage Loan Sellers to the Depositor in the Mortgage Loan Purchase Agreements.
Each of the Mortgage Loan Sellers will in its respective Mortgage Loan Purchase Agreement make, with respect to each Mortgage Loan sold by it that is included in the Issuing Entity, representations and warranties generally to the effect set forth on Annex F to this free writing prospectus, as of the Closing Date, or as of such other date specifically provided in the applicable representation and warranty, subject to the exceptions set forth in Annex G to this free writing prospectus.
The Pooling and Servicing Agreement requires that the Depositor, the Master Servicer, the Special Servicer, the Certificate Administrator, the Operating Advisor, the Trustee and the Custodian notify each other, the affected Mortgage Loan Seller and the Directing Holder (but only for so long as no Consultation Termination Event has occurred and is continuing) promptly upon discovery or receipt of notice of any failure by any party to deliver Mortgage Loan Documents in a timely manner, any defect in any document constituting a part of the mortgage file (as described in the Pooling and Servicing Agreement) or any breach of any representation or warranty referred to in the preceding paragraph that, in each case, materially and adversely affects the value of such Mortgage Loan, the value of the related Mortgaged Property or the interests of the Trustee in such Mortgage Loan or the related Mortgaged Property or causes any Mortgage Loan to fail to be a “qualified mortgage” within the meaning of Code Section 860G(a)(3) (each, a “Material Document Defect” or a “Material Breach”, as the case may be). Each of the Mortgage Loan Purchase Agreements provides that, with respect to any such Mortgage Loan, within 90 days following its receipt of such notice from the Depositor, the Master Servicer, the Special Servicer, the Certificate Administrator, the Trustee or the Custodian (or, in the case of a Material Breach or Material Document Defect that would cause the Mortgage Loan not to be a “qualified mortgage” within the meaning of Code Section 860G(a)(3), within 90 days of the Mortgage Loan Seller or any party to the Pooling and Servicing Agreement discovering such Material Breach or Material Document Defect,provided that the related Mortgage Loan Seller has received notice in accordance with the terms of the Pooling and Servicing Agreement), the affected Mortgage Loan Seller (or, if applicable, its affiliate) must either (a) cure such breach or defect in all material respects, (b) repurchase such Mortgage Loan at an amount equal to the sum of (1) the outstanding principal balance of the Mortgage Loan as of the date of purchase, (2) all accrued and unpaid interest on the Mortgage Loan at the related Mortgage Rates in effect from time to time, to but not including the Due Date in the month of purchase, but excluding any yield maintenance or other prepayment penalty, (3) all related unreimbursed Property Advances plus accrued and unpaid interest on related Advances at the Advance Rate and all Special Servicing Fees and
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Workout Fees allocable to the Mortgage Loan (and, in the case of a Non-Serviced Mortgage Loan, unpaid fees payable to the applicable other servicer or trustee allocable to such Mortgage Loan), (4) any Liquidation Fee allocable to the Mortgage Loan, as specified below in “—Special Servicing—Special Servicing Compensation,” (5) all additional expenses of the Issuing Entity allocable to such Mortgage Loan and (6) all reasonable out-of-pocket expenses reasonably incurred or to be incurred by the Master Servicer, the Special Servicer, the Depositor, the Certificate Administrator and the Trustee in respect of the defect or breach giving rise to the repurchase obligation, including any such expenses arising out of the enforcement of the repurchase obligation (such price, the “Repurchase Price”) or (c) substitute, within two years of the Closing Date, a Qualified Substitute Mortgage Loan (a “Replacement Mortgage Loan”) for the affected Mortgage Loan (the “Removed Mortgage Loan”) and pay any shortfall amount equal to the excess of the Repurchase Price of the Removed Mortgage Loan calculated as of the date of substitution over the Stated Principal Balance of the Replacement Mortgage Loan as of the date of substitution;provided that the applicable Mortgage Loan Seller generally has an additional 90-day period (as set forth in the Pooling and Servicing Agreement) to cure the Material Document Defect or Material Breach if such Material Document Defect or Material Breach is not capable of being cured within the initial 90-day period, the Mortgage Loan Seller is diligently proceeding with that cure, and such Material Document Defect or Material Breach is not related to the Mortgage Loan not being a “qualified mortgage” within the meaning of Code Section 860G(a)(3). See “—Servicing Compensation and Payment of Expenses” below in this free writing prospectus. Notwithstanding the foregoing, if a Mortgage Loan is not secured by a Mortgaged Property that is, in whole or in part, a hotel, restaurant (operated by a borrower), healthcare facility, nursing home, assisted living facility, self-storage facility, theater or fitness center (operated by a borrower), then the failure to deliver copies of the UCC financing statements with respect to such Mortgage Loan will not be a material defect.
If (x) there exists a breach of any representation or warranty on the part of a Mortgage Loan Seller as set forth in, or made pursuant to, representation 30 or 32 described in Annex F to this free writing prospectus relating to fees and expenses payable by the borrower associated with the exercise of a defeasance option, a waiver of a “due-on-sale” provision or a “due-on-encumbrance” provision or the release of any Mortgaged Property, and (y) the related Mortgage Loan Documents specifically prohibit the Master Servicer or Special Servicer from requiring the related borrower to pay such fees and expenses, then the applicable Mortgage Loan Seller may cure such breach by transferring to the Collection Account, within 90 days of notice of such breach from the Master Servicer or the Special Servicer, the amount of any such fees and expenses borne by the Trust that are the basis of such breach. Upon its making such deposit, the Mortgage Loan Seller will be deemed to have cured such breach in all respects. Provided such payment is made, this paragraph describes the sole remedy available to the Trust regarding any such breach, regardless of whether it constitutes a material breach, and the applicable Mortgage Loan Seller will not be obligated to repurchase or otherwise cure such breach.
Notwithstanding the foregoing, if there is a Material Breach or Material Document Defect with respect to one or more Mortgaged Properties with respect to a Mortgage Loan, the applicable Mortgage Loan Seller (or, if applicable, its affiliate) will not be obligated to repurchase the Mortgage Loan if (i) the affected Mortgaged Property may be released pursuant to the terms of any partial release provisions in the related Mortgage Loan Documents (and such Mortgaged Property is, in fact, released), (ii) the remaining Mortgaged Property(ies) satisfy the requirements, if any, set forth in the Mortgage Loan Documents and the applicable Mortgage Loan Seller provides an opinion of counsel to the effect that such release would not cause an adverse REMIC event to occur and (iii) each applicable Rating Agency has provided a No Downgrade Confirmation.
In lieu of a Mortgage Loan Seller repurchasing, substituting or curing a Material Breach or Material Document Defect, to the extent that the Mortgage Loan Seller and the Special Servicer on behalf of the Issuing Entity (with the consent of the Directing Holder for so long as no Control Termination Event has occurred and is continuing) are able to agree upon a cash payment payable by the Mortgage Loan Seller to the Special Servicer on behalf of the Issuing Entity that would be deemed sufficient to compensate the Issuing Entity for a Material Breach or Material Document Defect (a “Loss of Value Payment”), the Mortgage Loan Seller may elect, in its sole discretion, to pay such Loss of Value Payment. Upon its making such payment, the Mortgage Loan Seller will be deemed to have cured the related Material
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Breach or Material Document Defect in all respects. A Loss of Value Payment may not be made with respect to a Material Document Defect or Material Breach that is related to a Mortgage Loan not being a “qualified mortgage” within the meaning of Code Section 860G(a)(3).
A “Qualified Substitute Mortgage Loan” is a Mortgage Loan that, among other things: (i) has an outstanding Stated Principal Balance that is not more than the outstanding Stated Principal Balance of the related Removed Mortgage Loan, (ii) accrues interest at a rate of interest at least equal to that of the related Removed Mortgage Loan, (iii) has a remaining term to stated maturity of not greater than, and not more than two years less than, the remaining term to stated maturity of the related Removed Mortgage Loan, (iv) is approved, for so long as no Control Termination Event has occurred and is continuing, by the Directing Holder and (v) the Trustee and the Certificate Administrator have received a prior No Downgrade Confirmation.
The obligations of the Mortgage Loan Sellers to repurchase, substitute, cure or make a Loss of Value Payment described in the second, third, fourth and fifth preceding paragraphs constitute the sole remedies available to holders of Certificates or the Trustee for a document defect in the related mortgage file or a breach of a representation or warranty by the related Mortgage Loan Seller with respect to any Mortgage Loan. None of the Master Servicer, the Special Servicer, the Operating Advisor, the Certificate Administrator or the Trustee will be obligated to purchase or substitute a Mortgage Loan if a Mortgage Loan Seller (or, if applicable, its affiliate) defaults on its obligation to repurchase, substitute or cure, and no assurance can be given that a Mortgage Loan Seller (or, if applicable, its affiliate) will fulfill such obligations. See the discussion of the respective Mortgage Loan Sellers under “The Sponsors,Mortgage Loan Sellers and Originators” in this free writing prospectus. If such obligation is not met as to a Mortgage Loan that is not a “qualified mortgage” within the meaning of Code Section 860G(a)(3), the Upper-Tier REMIC or the Lower-Tier REMIC may fail to qualify to be treated as a REMIC for federal income tax purposes.
Certain Matters Regarding the Depositor, the Master Servicer, the Special Servicer and the Operating Advisor
Each of the Master Servicer, the Special Servicer and the Operating Advisor may assign its rights and delegate its duties and obligations under the Pooling and Servicing Agreement in connection with the sale or transfer of a substantial portion of its mortgage servicing, asset management or (solely with respect to the Operating Advisor) commercial mortgage surveillance, portfolio,provided that certain conditions are satisfied, including obtaining a No Downgrade Confirmation from each Rating Agency (including a No Downgrade Confirmation with respect to any Companion Loan Securities). The resigning Master Servicer, Special Servicer or Operating Advisor, as applicable, will be required to pay all reasonable costs and expenses of each party to the Pooling and Servicing Agreement and each Rating Agency in connection with the resignation of such party. The Pooling and Servicing Agreement provides that none of the Master Servicer, the Special Servicer or the Operating Advisor may otherwise resign from their obligations and duties as the Master Servicer, the Special Servicer or the Operating Advisor thereunder, except upon either (a) the determination that performance of its duties is no longer permissible under applicable law andprovided that such determination is evidenced by an opinion of counsel delivered to the Trustee and the Certificate Administrator, (b) the assignment of rights and delegation of duties as described in the first sentence of this paragraph or (c) solely with respect to the Operating Advisor, under the conditions described above under “—The Operating Advisor—Resignation of the Operating Advisor”. Except under the circumstances contemplated above under “—The Operating Advisor—Resignation of the Operating Advisor”, no such resignation may become effective until the Trustee or a successor Master Servicer, Special Servicer or Operating Advisor, as the case may be, has assumed the obligations of the Master Servicer, the Special Servicer or the Operating Advisor under the Pooling and Servicing Agreement. The Trustee or any other successor Master Servicer, Special Servicer or Operating Advisor assuming the obligations of the Master Servicer, the Special Servicer or the Operating Advisor under the Pooling and Servicing Agreement generally will be entitled to the compensation to which the Master Servicer, Special Servicer or Operating Advisor would have been entitled. If no successor Master Servicer, Special Servicer or Operating Advisor can be obtained to perform such obligations for such
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compensation, additional amounts payable to such successor Master Servicer, Special Servicer or Operating Advisor will be treated as Realized Losses.
The Pooling and Servicing Agreement also provides that none of the Depositor, the Master Servicer, the Special Servicer or the Operating Advisor, or any affiliate, director, officer, employee, member, manager, representative or agent (including subservicers) of the Depositor, the Master Servicer, the Special Servicer or the Operating Advisor will be under any liability to the Issuing Entity, the holders of Certificates, any Serviced Companion Loan noteholders, any party to the Pooling and Servicing Agreement or any third party beneficiary for any action taken or for refraining from the taking of any action in good faith pursuant to the Pooling and Servicing Agreement (including actions taken or not taken at the direction of the Directing Holder), or for errors in judgment;provided that none of the Depositor, the Master Servicer, the Special Servicer or the Operating Advisor or any affiliate, representative, member, manager, director, officer, employee or agent (including subservicers) of the Depositor, the Master Servicer, the Special Servicer or the Operating Advisor will be protected against any breach of its respective representations and warranties made in the Pooling and Servicing Agreement or any liability that would otherwise be imposed by reason of willful misconduct, bad faith, fraud or negligence (or in the case of the Master Servicer, the Special Servicer or the Operating Advisor, by reason of any specific liability imposed for a breach of the Servicing Standard or the Operating Advisor Standard, as applicable) in the performance of duties thereunder or by reason of negligent disregard of obligations and duties thereunder. The Pooling and Servicing Agreement further provides that the Depositor, the Master Servicer, the Special Servicer and the Operating Advisor and any affiliate, director, officer, employee, member, manager, representative or agent (including subservicers) of the Depositor, the Master Servicer, the Special Servicer and the Operating Advisor will be entitled to indemnification by the Issuing Entity for any loss, liability or expense incurred in connection with any claim, loss, penalty, fine, foreclosure, judgment, liability or legal action relating to the Pooling and Servicing Agreement or the Certificates, other than any loss, liability or expense (including legal fees and expenses) (i) incurred by reason of willful misconduct, bad faith, fraud or negligence in the performance of duties thereunder or by reason of negligent disregard of obligations and duties thereunder or (ii) in the case of the Depositor and any of its directors, officers, representatives, members, managers, employees and agents, incurred in connection with any violation by any of them of any state or federal securities law. With respect to a Serviced Loan Combination, the expenses, costs and liabilities described in the preceding sentence above that relate to the applicable Serviced Loan Combination will be paid out of amounts on deposit in the separate custodial account maintained with respect to such Serviced Loan Combination (allocated in accordance with the expense allocation provision of the related Intercreditor Agreement). If funds in the applicable custodial account relating to a Serviced Loan Combination are insufficient, then any deficiency will be paid from amounts on deposit in the Collection Account; provided that the Master Servicer will be required, after receiving payment from amounts on deposit in the Collection Account, if any, to (i) promptly notify the holders of the related Companion Loan(s) and (ii) use commercially reasonable efforts to exercise on behalf of the Issuing Entity the rights of the Issuing Entity under the related Intercreditor Agreement to obtain reimbursement for a pro rata portion of such amount allocable to the related Companion Loans from the holders of such Companion Loan.
The Pooling and Servicing Agreement will also provide that the master servicer, special servicer, the depositor, certificate administrator, trustee and operating advisor of a Non-Serviced Mortgage Loan, and any director, officer, employee or agent of any of them will be entitled to indemnification by the Issuing Entity and held harmless against the Issuing Entity’spro rata share of any and all claims, losses, penalties, fines, forfeitures, legal fees and related costs, judgments and any other costs, liabilities, fees and expenses incurred in connection with servicing and administration of related Non-Serviced Mortgage Loan under the applicable servicing agreement or the Pooling and Servicing Agreement or the related Intercreditor Agreement (but excluding any such losses allocable to the related Companion Loans);provided,however, that such indemnification will not extend to any loss, liability or expense incurred by reason of willful misconduct, bad faith or negligence on the part of such party in the performance of its obligations or duties or by reason of negligent disregard of its obligations or duties under the applicable servicing agreement or related Intercreditor Agreement.
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In addition, the Pooling and Servicing Agreement provides that none of the Depositor, the Master Servicer, the Special Servicer or the Operating Advisor will be under any obligation to appear in, prosecute or defend any legal action unless such action is related to its duties under the Pooling and Servicing Agreement and which in its opinion does not expose it to any expense or liability not recoverable from the Issuing Entity. Each of the Depositor, the Master Servicer, the Special Servicer or the Operating Advisor may, however, in its discretion undertake any such action that it may deem necessary or desirable with respect to the Pooling and Servicing Agreement and the rights and duties of the parties to the Pooling and Servicing Agreement and the interests of the holders of Certificates and Companion Loan Securities, as applicable, thereunder. In such event, the legal expenses and costs of such action and any liability resulting therefrom will be expenses, costs and liabilities of the Issuing Entity, and the Depositor, the Master Servicer, the Special Servicer and the Operating Advisor will be entitled to be reimbursed therefor from the Collection Account (or with respect to a Serviced Loan Combination, first from the related separate custodial account, as described in the second preceding paragraph) no later than 60 days after submitting such expenses or costs for reimbursement.
The management, prosecution, defense and/or settlement of claims and litigation relating to any Mortgage Loan brought against the Issuing Entity or any party to the Pooling and Servicing Agreement will generally be handled by the Master Servicer and the Special Servicer; subject to certain rights of the Trustee to appear in any such action to which it is a named party and the rights of certain parties to the Pooling and Servicing Agreement to indemnification for certain costs or liabilities arising from such litigation, all as more specifically provided for in the Pooling and Servicing Agreement.
The Depositor is not obligated to monitor or supervise the performance of the Master Servicer, the Special Servicer, the Operating Advisor, the Certificate Administrator or the Trustee under the Pooling and Servicing Agreement. The Depositor may, but is not obligated to, enforce the obligations of the Master Servicer or the Special Servicer under the Pooling and Servicing Agreement and may, but is not obligated to, perform or cause a designee to perform any defaulted obligation of the Master Servicer or the Special Servicer or exercise any right of the Master Servicer or the Special Servicer under the Pooling and Servicing Agreement. In the event the Depositor undertakes any such action, it will be reimbursed by the Issuing Entity from the Collection Account (or with respect to a Serviced Loan Combination, to the extent such reimbursement is allocable to such Serviced Loan Combination, first from the related custodial account), to the extent not recoverable from the Master Servicer or Special Servicer, as applicable. Any such action by the Depositor will not relieve the Master Servicer or the Special Servicer of its obligations under the Pooling and Servicing Agreement.
Any person into which the Master Servicer, the Special Servicer, the Depositor or the Operating Advisor may be merged or consolidated, or any person resulting from any merger or consolidation to which the Master Servicer, the Special Servicer, the Depositor or the Operating Advisor is a party, or any person succeeding to the business of the Master Servicer, the Special Servicer, the Depositor or the Operating Advisor, will be the successor of the Master Servicer, the Special Servicer, the Depositor or the Operating Advisor under the Pooling and Servicing Agreement, and shall be deemed to have assumed all of the liabilities and obligations of the Master Servicer, the Special Servicer, the Depositor or the Operating Advisor under the Pooling and Servicing Agreement if each of the Rating Agencies then rating any Certificates has provided a No Downgrade Confirmation (and each rating agency then rating any Companion Loan Securities has provided a No Downgrade Confirmation);provided,however, none of the Depositor, Master Servicer, Special Servicer or Operating Advisor shall be required to obtain a No Downgrade Confirmation from any Rating Agency, as the case may be, if (x) the Master Servicer, the Special Servicer, the Depositor or the Operating Advisor, as applicable, is merged into or consolidated with a Qualified Affiliate or transfers all or substantially all of its assets to a Qualified Affiliate or (y) the Master Servicer, the Special Servicer or the Operating Advisor enters into a merger and the Master Servicer, the Special Servicer or the Operating Advisor, as applicable, is the surviving entity.
A “Qualified Affiliate” is any person (a) that is organized and doing business under the laws of any state of the United States or the District of Columbia, (b) that is in the business of performing the duties of a servicer of mortgage loans (or, in the case of the Operating Advisor, that is in the business of performing the duties of an operating advisor), and (c) as to which 50% or greater of its outstanding
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voting stock or equity ownership interest are directly or indirectly owned by the Master Servicer, the Special Servicer or the Operating Advisor, as applicable, or by any person or persons who directly or indirectly own equity ownership interests in the Master Servicer, the Special Servicer or the Operating Advisor, as applicable.
Servicer Termination Events
“Servicer Termination Events” under the Pooling and Servicing Agreement with respect to the Master Servicer or the Special Servicer, as the case may be, will include, without limitation:
(a) with respect to the Master Servicer only, any failure by the Master Servicer (i) to make a required deposit to the Collection Account or to the separate custodial account for any Loan Combination on the day such deposit was first required to be made, which failure is not remedied within two business days, (ii) to deposit into, or remit to the Certificate Administrator for deposit into, the Distribution Account any amount required to be so deposited or remitted (including any required P&I Advance, unless the Master Servicer determines that such P&I Advance would not be recoverable), which failure is not remedied by 11:00 a.m. (New York City time) on the relevant Distribution Date (provided,however, that to the extent the Master Servicer does not timely make such remittances to the Certificate Administrator, the Master Servicer will be required to pay the Certificate Administrator for the account of the Certificate Administrator interest on any amount not timely remitted at the Prime Rate from and including the applicable required remittance date to, but not including, the date such remittance is actually made) or (iii) to remit to any holder of a Serviced Companion Loan, as and when required by the Pooling and Servicing Agreement or the related intercreditor agreement, any amount required to be so remitted which failure continues for two business days;
(b) with respect to the Special Servicer only, any failure by the Special Servicer to deposit into the REO Account on the day such deposit is required to be made and such failure continues unremedied for two business days, or to remit to the Master Servicer for deposit in the Collection Account (or, in the case of a Serviced Loan Combination, the related custodial account) any such remittance required to be made, under the Pooling and Servicing Agreement;provided,however, that the failure of the Special Servicer to remit such remittance to the Master Servicer will not be a Servicer Termination Event if such failure is remedied within two business days and if the Special Servicer has compensated the Master Servicer for any loss of income (at the Advance Rate) on such amount suffered by the Master Servicer due to and caused by the late remittance of the Special Servicer and reimbursed the Issuing Entity for any resulting advance interest due to the Master Servicer;
(c) any failure by the Master Servicer or the Special Servicer duly to observe or perform in any material respect any of its other covenants or obligations under the Pooling and Servicing Agreement, which failure continues unremedied for 30 days (15 days in the case of the Master Servicer’s failure to make a Property Advance or 45 days in the case of failure to pay the premium for any insurance policy required to be force placed by the Master Servicer or the Special Servicer, as the case may be, pursuant to the Pooling and Servicing Agreement or in any event such reasonable shorter period of time as is necessary to avoid the commencement of foreclosure proceedings for any lien relating to unpaid real estate taxes or assessments or a lapse in any required insurance coverage) after written notice of the failure has been given to the Master Servicer or the Special Servicer, as the case may be, by any other party to the Pooling and Servicing Agreement, by the Certificateholders of any Class, evidencing Percentage Interests aggregating not less than 25% of such Class or by a holder of a Serviced Companion Loan, if affected; provided, if that failure is capable of being cured and the Master Servicer or the Special Servicer, as applicable, is diligently pursuing that cure, that 15-, 30- or 45-day period, as applicable, will be extended an additional 30 days;
(d) any breach on the part of the Master Servicer or the Special Servicer of any representation or warranty in the Pooling and Servicing Agreement which materially and adversely
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affects the interests of any Class of Certificateholders or holder of a Serviced Companion Loan and which continues unremedied for a period of 30 days after the date on which notice of that breach, requiring the same to be remedied, is given to the Master Servicer or the Special Servicer, as the case may be, by any other party to the Pooling and Servicing Agreement, or to the Master Servicer, the Special Servicer, the Depositor and the Trustee by the holders of Certificates of any Class evidencing Percentage Interests aggregating not less than 25% of such Class or by a holder of a Serviced Companion Loan, if affected; provided, if that breach is capable of being cured and the Master Servicer or Special Servicer, as applicable, is diligently pursuing that cure, that 30-day period will be extended an additional 30 days;
(e) certain events of insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings in respect of or relating to the Master Servicer or the Special Servicer, as applicable, and certain actions by or on behalf of the Master Servicer or the Special Servicer indicating its insolvency or inability to pay its obligations;
(f) (i) Moody’s has (A) qualified, downgraded or withdrawn its rating or ratings of one or more Classes of Certificates, or (B) placed one or more Classes of Certificates on “watch status” in contemplation of possible rating downgrade or withdrawal (and such qualification, downgrade or withdrawal or “watch status” placement shall not have been withdrawn by Moody’s within 60 days of such event, and, in case of either of clause (A) or (B), publicly citing servicing concerns with the Master Servicer or Special Servicer, as applicable, as the sole or a material factor in such rating action; (ii) DBRS has (A) qualified, downgraded or withdrawn its rating or ratings of one or more Classes of Certificates, or (B) placed one or more Classes of Certificates on “watch status” in contemplation of possible rating downgrade or withdrawal (and such qualification, downgrade or withdrawal or “watch status” placement shall not have been withdrawn by DBRS within 60 days of such event, and, in case of either of clause (A) or (B), publicly citing servicing concerns with the Master Servicer or Special Servicer, as applicable, as the sole or a material factor in such rating action; or (iii) the Master Servicer or Special Servicer, as applicable, ceases to have a master servicer rating or special servicer rating of at least “CMS3” or “CSS3”, respectively, from Fitch and such rating is not reinstated within 60 days of the delisting; and
(g) so long as the Issuing Entity is subject to Exchange Act reporting requirements, any failure by the Master Servicer or Special Servicer, as applicable, to deliver to the Trustee and the Certificate Administrator (i) an annual certification regarding such servicer’s compliance with the terms of the Pooling and Servicing Agreement, as well as an assessment of compliance with certain servicing criteria and an accountant’s attestation report with respect to such assessment by the time required under the Pooling and Servicing Agreement after any applicable grace period or (ii) any Exchange Act reporting items that a primary servicer, sub-servicer or servicing function participant (such entity, the “Sub-Servicing Entity”) retained by the Master Servicer or Special Servicer, as applicable (but excluding any Sub-Servicing Entity which the Master Servicer or Special Servicer has been directed to retain by a Sponsor or Mortgage Loan Seller) is required to deliver (after any applicable grace period) (any Sub-Servicing Entity will be terminated if it defaults in accordance with the provision of thisclause (g)).
Rights upon a Servicer Termination Event
If a Servicer Termination Event with respect to the Master Servicer or the Special Servicer, as applicable, occurs and is continuing, then the Trustee may, and at the written direction of (1) the holders of Certificates evidencing at least 25% of the aggregate Voting Rights, (2) in the case of the Special Servicer, for so long as no Control Termination Event has occurred and is continuing, the Controlling Class Representative, or (3) the Depositor (with respect toclause (g) of the definition of “Servicer Termination Event”), the Trustee will be required to, terminate all of the rights (other than certain rights to indemnification, compensation and (in certain limited circumstances) the excess servicing strip as provided in the Pooling and Servicing Agreement) and obligations of the Master Servicer as master servicer or the Special Servicer as special servicer, as the case may be, under the Pooling and Servicing Agreement. In the case of a Servicer Termination Event pursuant toclause (f) of the definition thereof,
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the Certificate Administrator will be required to notify Certificateholders and Serviced Companion Loan noteholders of such Servicer Termination Event and request whether such Certificateholders and, if applicable, the Serviced Companion Loan noteholders favor such termination. Notwithstanding the foregoing, upon any termination of the Master Servicer or the Special Servicer, as applicable, under the Pooling and Servicing Agreement, the Master Servicer or the Special Servicer, as applicable, will continue to be entitled to receive all accrued and unpaid servicing compensation through the date of termination plus reimbursement for all Advances and interest thereon as provided in the Pooling and Servicing Agreement.
Notwithstanding the foregoing, (a) if a Servicer Termination Event with respect to the Master Servicer affects a Serviced Companion Loan and the Master Servicer is not otherwise terminated or (b) if a nationally recognized statistical rating organization (“NRSRO”), as that term is defined in Section 3(a)(62) of the Exchange Act, engaged to rate a Companion Loan Security qualifies, downgrades or withdraws its rating of such Companion Loan Security, citing servicing concerns with the Master Servicer as the sole or a material factor in such rating action, then the holder of such Serviced Companion Loan will be entitled to request that the Trustee direct the Master Servicer to appoint a sub-servicer (or if the related Serviced Loan Combination is currently being sub-serviced, then the Trustee may direct the Master Servicer to replace such sub-servicer with a new sub-servicer but only if such original sub-servicer is in default (beyond any applicable cure periods) under the related sub-servicing agreement, and the Master Servicer will be permitted to terminate the sub-servicing agreement due to such default) that will be responsible for servicing the related Serviced Loan Combination;provided that the Trustee will be required to direct the Master Servicer to obtain a No Downgrade Confirmation from each Rating Agency (including a No Downgrade Confirmation with respect to any Companion Loan Securities) (at the expense of the requesting party) with respect to the appointment of such sub-servicer.
Notwithstanding the foregoing, (a) if a Servicer Termination Event with respect to the Special Servicer affects a Serviced Companion Loan and the Special Servicer is not otherwise terminated or (b) if an NRSRO engaged to rate a Companion Loan Security qualifies, downgrades or withdraws its rating of such Companion Loan Security, citing servicing concerns with the Special Servicer as the sole or a material factor in such rating action, then the holder of such Serviced Companion Loan will be entitled to direct that the Trustee terminate the Special Servicer with respect to the related Serviced Loan Combination only, but no other Mortgage Loan.
On and after the date of termination following a Servicer Termination Event by the Master Servicer or the Special Servicer, the Trustee will succeed to all authority and power of the Master Servicer or the Special Servicer, as applicable, under the Pooling and Servicing Agreement (and any sub-servicing agreements) and generally will be entitled to the compensation arrangements to which the Master Servicer or the Special Servicer, as applicable, would have been entitled. If the Trustee is unwilling or unable so to act, or holders of Certificates evidencing (i) in the case of the Master Servicer, at least 25% of the aggregate Voting Rights (or, for so long as no Control Termination Event has occurred and is continuing, the Controlling Class Representative), or (ii) in the case of the Special Servicer, at least 25% of the aggregate Voting Rights (or, for so long as no Control Termination Event has occurred and is continuing, the Directing Holder) so request, or, with respect to a Serviced Loan Combination, if an affected Serviced Companion Loan noteholder so requests, or if the Trustee is not an “approved” servicer by any of the rating agencies for mortgage pools similar to the one held by the Issuing Entity, the Trustee must appoint, or petition a court of competent jurisdiction for the appointment of, a mortgage loan servicing institution that, for so long as no Control Termination Event has occurred and is continuing, has been approved by the Directing Holder (which approval shall not be unreasonably withheld in the case of the appointment of a successor Master Servicer) to act as successor to the Master Servicer or the Special Servicer, as applicable, under the Pooling and Servicing Agreement;provided that the Trustee must obtain a No Downgrade Confirmation (including a No Downgrade Confirmation with respect to any Companion Loan Securities). Pending such appointment, the Trustee is obligated to act in such capacity unless the Trustee is prohibited by law from so acting. The Trustee and any such successor may agree upon the servicing compensation to be paid;provided that no such compensation may be in excess of that permitted to the terminated Master Servicer or Special Servicer,provided,further, that if no successor can be obtained to perform the obligations of the terminated Master Servicer or Special
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Servicer, additional amounts may be paid to such successor and such amounts in excess of that permitted the terminated Master Servicer or Special Servicer shall be treated as Realized Losses. All reasonable costs and expenses of the Trustee (including the cost of obtaining a No Downgrade Confirmation and any applicable indemnity) or the successor Master Servicer or successor Special Servicer incurred in connection with transferring the mortgage files to the successor Master Servicer or Special Servicer and amending the Pooling and Servicing Agreement to reflect such succession are required to be paid by the predecessor Master Servicer or the Special Servicer, as applicable, upon presentation of reasonable documentation of such costs and expenses. If the predecessor Master Servicer or Special Servicer (as the case may be) has not reimbursed the Trustee or the successor Master Servicer or Special Servicer for such expenses within 90 days after the presentation of reasonable documentation, such expense is required to be reimbursed by the Issuing Entity;provided that the terminated Master Servicer or Special Servicer shall not thereby be relieved of its liability for such expenses.
No Certificateholder or holder of a Serviced Companion Loan, as applicable, will have any right under the Pooling and Servicing Agreement to institute any proceeding with respect to the Pooling and Servicing Agreement, the Certificates or the Mortgage Loans, unless, with respect to the Pooling and Servicing Agreement, such holder or such holder of a Serviced Companion Loan, as applicable, previously has given to the Trustee a written notice of a default under the Pooling and Servicing Agreement, and of the continuance thereof, and unless such holder of a Serviced Companion Loan or the holders of Certificates of any Class affected thereby evidencing Percentage Interests of at least 25% of such Class, as applicable, have made written request of the Trustee to institute such proceeding in its capacity as Trustee under the Pooling and Servicing Agreement and have offered to the Trustee such security or indemnity reasonably satisfactory to it as it may require against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee, for 60 days after its receipt of such notice, request and offer of security or indemnity, failed or refused to institute such proceeding.
Neither the Trustee nor the Certificate Administrator will have any obligation to make any investigation of matters arising under the Pooling and Servicing Agreement or to institute, conduct or defend any litigation under the Pooling and Servicing Agreement or in relation to it at the request, order or direction of any of the holders of Certificates, unless such holders of Certificates shall have offered to the Trustee or the Certificate Administrator, as applicable security or indemnity reasonably satisfactory to the Trustee or the Certificate Administrator, as applicable against the costs, expenses and liabilities which may be incurred in connection with such action.
Notwithstanding the foregoing discussion in this “—Rights upon a Servicer Termination Event” section, if the Master Servicer is terminated under the circumstances described above because of the occurrence of any of the events described inclause (f) under “—Servicer Termination Events” above, the Master Servicer will have the right, at its expense, to sell its master servicing rights with respect to the Mortgage Loans to a successor Master Servicer in connection with whose appointment a No Downgrade Confirmation (including a No Downgrade Confirmation with respect to any Companion Loan Securities) has been provided, in accordance with the terms set forth in the Pooling and Servicing Agreement, including that any successor Master Servicer fulfill the ratings requirements for successor Master Servicer set forth in the Pooling and Servicing Agreement.
In addition, the Depositor may direct the Trustee to terminate the Master Servicer upon 5 business days’ written notice if the Master Servicer fails to comply with certain of its reporting obligations under the Pooling and Servicing Agreement (subject to any applicable grace period).
Waivers of Servicer Termination Events and Operating Advisor Termination Events
A Servicer Termination Event or Operating Advisor Termination Event may be waived by the Certificateholders evidencing not less than 66-2/3% of the aggregate Voting Rights of the Certificates and each Serviced Companion Loan noteholder adversely affected by such Servicer Termination Event or Operating Advisor Termination Event, except (a) a Servicer Termination Event under clause (g) of the definition of “Servicer Termination Events” may be waived only with the consent of the Depositor and
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(b) a default in making any required deposits to or payments from the Collection Account, any Serviced Loan Combination custodial account or the Lower-Tier Distribution Account or in remitting payments as received, in each case in accordance with the Pooling and Servicing Agreement.
Amendment
The Pooling and Servicing Agreement may be amended at any time by the Depositor, the Master Servicer, the Special Servicer, the Certificate Administrator, the Operating Advisor and the Trustee without the consent of any of the holders of Certificates or holders of any Companion Loans:
(a) to cure any ambiguity or to correct any error;
(b) to cause the provisions in the Pooling and Servicing Agreement to conform or be consistent with or in furtherance of the statements herein (or in the private placement memorandum relating to the Private Certificates) made with respect to the Certificates, the Issuing Entity or the Pooling and Servicing Agreement or to correct or supplement any provisions in the Pooling and Servicing Agreement which may be defective or inconsistent with any other provisions in the Pooling and Servicing Agreement;
(c) to amend any provision thereof to the extent necessary or desirable to maintain the rating or ratings then assigned to each Class of Certificates or Companion Loan Securities (provided that such amendment does not reduce the consent or consultation rights of the Controlling Class Representative or the right of the Controlling Class Representative to receive information under the Pooling and Servicing Agreement);
(d) to amend or supplement a provision, or to supplement any provisions in the Pooling and Servicing Agreement to the extent not inconsistent with the provisions of the Pooling and Servicing Agreement, or any other change which will not adversely affect in any material respect the interests of any Certificateholder or holder of a Serviced Companion Loan not consenting thereto, as evidenced in writing by an opinion of counsel or, if solely affecting any Certificateholder or holder of a Serviced Companion Loan, in respect of which a No Downgrade Confirmation (including a No Downgrade Confirmation with respect to any Companion Loan Securities) has been obtained; and
(e) to modify the procedures set forth in the Pooling and Servicing Agreement relating to compliance with Rule 17g-5 under the Exchange Act (“Rule 17g-5”).
Any amendment described above may not (a) materially increase the obligations of the Depositor, the Trustee, the Paying Agent, the Certificate Administrator, the Operating Advisor, the 17g-5 Information Provider, the Master Servicer or the Special Servicer without such party’s consent or (b) adversely affect in any material respect the interests of any Certificateholder or Serviced Companion Loan noteholder not consenting thereto, as evidenced in the case of clauses (c) through (e) above by (x) an opinion of counsel or (y) solely in the case of a Certificateholder of a rated Class, receipt of a No Downgrade Confirmation from each applicable Rating Agency. The Pooling and Servicing Agreement requires that no such amendment shall cause the Upper-Tier REMIC or the Lower-Tier REMIC to fail to qualify as a REMIC or cause the Grantor Trust to fail to qualify as a grantor trust for federal income tax purposes.
The Pooling and Servicing Agreement may also be amended from time to time by the Depositor, the Master Servicer, the Special Servicer, the Certificate Administrator, the Operating Advisor and the Trustee with the consent of the holders of Certificates evidencing at least 66-2/3% of the Percentage Interests of each Class of Certificates affected thereby, and the holders of the Serviced Companion Loans affected thereby for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Pooling and Servicing Agreement or modifying in any manner the rights of the holders of Certificates;provided that no such amendment may (i) reduce in any manner the amount of, or delay the timing of, payments received on the Mortgage Loans or Serviced Loan Combinations which are required to be distributed on any Certificate, without the consent of the holders of Certificates representing all of the Percentage Interests of the Class or Classes affected thereby, or which are required to be distributed to the holder of any Serviced Companion Loan, without the consent of the
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holder of such Serviced Companion Loan; (ii) alter the obligations of the Master Servicer or the Trustee to make a P&I Advance or a Property Advance or alter the Servicing Standard or Operating Advisor Standard set forth in the Pooling and Servicing Agreement without the consent of the holders of Certificates representing all of the Percentage Interests of the Class or Classes affected thereby and the consent of any affected Serviced Companion Loan noteholders; (iii) change the percentages of Voting Rights or Percentage Interests of holders of Certificates which are required to consent to any action or inaction under the Pooling and Servicing Agreement; or (iv) amend the section in the Pooling and Servicing Agreement relating to the amendment of the Pooling and Servicing Agreement, in each case, without the consent of the holders of all Certificates representing all the Percentage Interests of the Class or Classes affected thereby and consent of the holder of any affected Serviced Companion Loans.
Further, the Depositor, the Master Servicer, the Special Servicer, the Certificate Administrator, the Operating Advisor and the Trustee, at any time and from time to time, without the consent of the Certificateholders, may amend the Pooling and Servicing Agreement to modify, eliminate or add to any of its provisions (i) to such extent as shall be necessary to maintain the qualification of the Lower-Tier REMIC or the Upper-Tier REMIC as a REMIC or the qualification of the Grantor Trust as a grantor trust, or to prevent the imposition of any additional material state or local taxes, at all times that any Certificates are outstanding;provided that such action, as evidenced by an opinion of counsel (obtained at the expense of the Issuing Entity), is necessary or helpful to maintain such qualification or to prevent the imposition of any such taxes, and would not adversely affect in any material respect the interest of any Certificateholder or (ii) to the extent necessary to comply with the Investment Company Act of 1940, as amended, the Exchange Act, Regulation AB, and/or any related regulatory actions and/or interpretations.
Notwithstanding the foregoing, no amendment of the Pooling and Servicing Agreement may be made (i) which adversely affects the rights, including (without limitation) as a third-party beneficiary under the Pooling and Servicing Agreement, and/or obligations of any Mortgage Loan Seller, initial purchaser or Underwriter without its written consent or (ii) which adversely affects (as determined by the applicable Companion Loan noteholder in good faith) the rights and/or obligations of any Companion Loan noteholder without its written consent.
No Downgrade Confirmation
The Pooling and Servicing Agreement will provide that, notwithstanding the terms of the related Mortgage Loan Documents or other provisions of the Pooling and Servicing Agreement, if any action under such Mortgage Loan Documents or the Pooling and Servicing Agreement requires a No Downgrade Confirmation from each of the Rating Agencies as a condition precedent to such action, if the party (the “Requesting Party”) required to obtain such No Downgrade Confirmation has made a request to any Rating Agency for such No Downgrade Confirmation and, within 10 business days of such request being posted to the Rule 17g-5 website established under the Pooling and Servicing Agreement, such Rating Agency has not replied to such request or has responded in a manner that indicates that such Rating Agency is neither reviewing such request nor waiving the requirement for No Downgrade Confirmation, then (i) such Requesting Party will be required to confirm (without providing notice to the 17g-5 Information Provider) that the applicable Rating Agency has received the No Downgrade Confirmation request, and, if it has not, promptly request the related No Downgrade Confirmation again and (ii) if there is no response to either such No Downgrade Confirmation request within 5 business days of such second request or such Rating Agency has responded in a manner that indicates it is neither reviewing such request nor waiving the requirement for No Downgrade Confirmation, (x) with respect to any condition in any Mortgage Loan Document requiring such No Downgrade Confirmation, or with respect to any other matter under the Pooling and Servicing Agreement relating to the servicing of the Mortgage Loans (other than as set forth inclause (y) or(z) below), the Requesting Party (or, if the Requesting Party is the related borrower, then the Master Servicer (with respect to non-Specially Serviced Loans) or the Special Servicer (with respect to Specially Serviced Loans and REO Loans), as applicable) will be required to determine in accordance with its duties under the Pooling and Servicing Agreement and in accordance with the Servicing Standard, whether or not such action would be in the best interests of the Certificateholders and, in the case of a Serviced Loan Combination, Certificateholders and any holder of the related Serviced Companion Loan (as a collective whole as if
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such Certificateholders and Serviced Companion Loan holders constituted a single lender), and if the Requesting Party (or, if the Requesting Party is the related borrower, then the Master Servicer or the Special Servicer, as applicable) determines that such action would be in the best interest of such parties, then the requirement for a No Downgrade Confirmation will be deemed not to apply (provided that with respect to defeasance, release or substitution of any collateral relating to any Mortgage Loan, any No Downgrade Confirmation requirement with respect to which the Master Servicer or Special Servicer would have been required to make the determination above will be deemed not to apply regardless of any such determination by the Requesting Party (or, if the Requesting Party is the related borrower, the Master Servicer or Special Servicer, as applicable) (it being understood that the Requesting Party (or the Master Servicer or the Special Servicer, as applicable) will in any event review the other conditions required under the related Mortgage Loan Documents with respect to such defeasance, release or substitution and confirm to its satisfaction in accordance with the Servicing Standard that such conditions (other than the requirement for a No Downgrade Confirmation) have been satisfied)), (y) with respect to a replacement of the Master Servicer or the Special Servicer, such condition will be deemed to be satisfied if (i) Moody’s and/or DBRS, as applicable, has not cited servicing concerns of the applicable replacement as the sole or material factor in any qualification, downgrade or withdrawal of the ratings (or placement on “watch status” in contemplation of a ratings downgrade or withdrawal) of securities in a transaction serviced by the applicable servicer prior to the time of determination, if Moody’s and/or DBRS, as applicable, is the non-responding Rating Agency or (ii) the applicable replacement is rated at least “CMS3” (in the case of the master servicer) or “CSS3” (in the case of the special servicer), if Fitch is the non-responding Rating Agency, and (z) with respect to a replacement or successor to the Operating Advisor in any circumstance where a No Downgrade Confirmation is required, such condition will be deemed to be waived with respect to any non-responding Rating Agency so long as such Rating Agency has not cited concerns regarding the replacement operating advisor as the sole or material factor in any qualification, downgrade or withdrawal of the ratings (or placement on “watch status” in contemplation of a ratings downgrade or withdrawal) of securities in any other commercial mortgage-backed securities transaction with respect to which the replacement operating advisor acts as trust advisor or operating advisor prior to the date of determination.
For all other matters or actions not specifically discussed above, the applicable Requesting Party will be required to obtain a No Downgrade Confirmation from each of the Rating Agencies. In the event an action otherwise requires a No Downgrade Confirmation from each of the Rating Agencies, in absence of such No Downgrade Confirmation, there can be no assurance that any Rating Agency will not downgrade, qualify or withdraw its ratings as a result of any such action taken by the Master Servicer or the Special Servicer in accordance with the procedures discussed above.
Any No Downgrade Confirmation requests made by the Master Servicer, the Special Servicer, the Certificate Administrator or the Trustee, as applicable, pursuant to the Pooling and Servicing Agreement, will be required to be made in writing, which writing must contain a cover page indicating the nature of the No Downgrade Confirmation request, and must contain all back-up material necessary for the Rating Agency to process such request. Such written No Downgrade Confirmation requests must be provided in electronic format to the 17g-5 Information Provider (who will be required to promptly post such request to the 17g-5 Information Provider’s website).
The Master Servicer, the Special Servicer, the Certificate Administrator, the Operating Advisor and the Trustee will be permitted (but not required) to orally communicate with the Rating Agencies regarding any Mortgage Loan, any Loan Combination, any Certificateholder, any holder of a Companion Loan, any Mortgaged Property or any REO Property,provided that such party summarizes the information provided to the Rating Agencies in such communication in writing and provides the 17g-5 Information Provider with such written summary the same day such communication takes place. The 17g-5 Information Provider will be required to post such written summary on the 17g-5 Information Provider’s website in accordance with the provisions of the Pooling and Servicing Agreement. All other information required to be delivered to the Rating Agencies pursuant to the Pooling and Servicing Agreement or requested by the Rating Agencies, will first be provided to the 17g-5 Information Provider in electronic format, who will be required to post such information to the 17g-5 Information Provider’s website in accordance with the Pooling and Servicing Agreement.
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“No Downgrade Confirmation” means, with respect to any matter, confirmation in writing by each applicable Rating Agency that a proposed action, failure to act or other event so specified will not in and of itself result in the downgrade, withdrawal or qualification of the then-current rating assigned to any Class of Certificates if then rated by the Rating Agency;provided that a written waiver or acknowledgment from the Rating Agency indicating its decision not to review the matter for which the No Downgrade Confirmation is sought will be deemed to satisfy the requirement for the No Downgrade Confirmation from the Rating Agency with respect to such matter and the Master Servicer, the Special Servicer, the Certificate Administrator or the Trustee, as applicable, may proceed with the contemplated action(s) as if it had received the No Downgrade Confirmation. At any time during which no Certificates are rated by a Rating Agency, no No Downgrade Confirmation will be required from that Rating Agency. With respect to any matter affecting any Serviced Companion Loan, any No Downgrade Confirmation shall also refer to the NRSROs then rating the securities representing an interest in such loan and such rating organizations’ respective ratings of such securities.
Evidence of Compliance
The Certificate Administrator, Custodian, Master Servicer and Special Servicer will be required to provide an annual certification regarding their compliance with the terms of the Pooling and Servicing Agreement. In addition, the Trustee, Certificate Administrator, Custodian, Operating Advisor, Master Servicer and Special Servicer will be required to provide an annual assessment of compliance and accountant’s attestation report regarding their compliance with the terms of the Pooling and Servicing Agreement. Notwithstanding the foregoing, the Trustee will not be required to deliver an assessment of compliance with respect to any periods during which there was no Relevant Servicing Criteria applicable to it. See “Description of the Pooling Agreements—Evidence as to Compliance” in the prospectus.
Voting Rights
At all times during the term of the Pooling and Servicing Agreement, 98% of the voting rights for the Certificates (the “Voting Rights”) shall be allocated among the holders of the respective Classes of Certificates (other than the Class X-A, Class X-B, Class X-C, Class X-D, Class X-E, Class X-F, Class V, Class R and Class LR Certificates) in proportion to the Certificate Balances of their Certificates, and 2% of the Voting Rights will be allocatedpro rata, based on their respective Notional Balances at the time of determination, among the holders of the Class X-A, Class X-B, Class X-C, Class X-D, Class X-E and Class X-F Certificates. Voting Rights allocated to a Class of Certificateholders shall be allocated among such Certificateholders in proportion to the Percentage Interests in such Class evidenced by their respective Certificates. No Voting Rights will be allocated to the Class V, Class R or Class LR Certificates.
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Realization Upon Mortgage Loans
If a payment default or material non-monetary default on a Mortgage Loan (other than a Non-Serviced Mortgage Loan) has occurred, then, pursuant to the Pooling and Servicing Agreement, the Special Servicer, on behalf of the Trustee, may, in accordance with the terms and provisions of the Pooling and Servicing Agreement, at any time institute foreclosure proceedings, exercise any power of sale contained in the related Mortgage, obtain a deed in lieu of foreclosure, or otherwise acquire title to the related Mortgaged Property, by operation of law or otherwise. The Special Servicer is not permitted, however, to cause the Trustee to acquire title to any Mortgaged Property, have a receiver of rents appointed with respect to any Mortgaged Property or take any other action with respect to any Mortgaged Property that would cause the Trustee, for the benefit of the Certificateholders, or any other specified person to be considered to hold title to, to be a “mortgagee-in-possession” of, or to be an “owner” or an “operator” of such Mortgaged Property within the meaning of certain federal environmental laws, unless the Special Servicer has determined in accordance with the Servicing Standard, based on an updated environmental assessment report prepared by a person who regularly conducts environmental audits (which report will be an expense of the Issuing Entity) that:
(a) such Mortgaged Property is in compliance with applicable environmental laws or, if not, after consultation with an environmental consultant, that it would be in the best economic interest of the Certificateholders (and with respect to any Serviced Loan Combination, the Serviced Companion Loan noteholders), as a collective whole as if such Certificateholders and, if applicable, Serviced Companion Loan noteholders constituted a single lender, to take such actions as are necessary to bring such Mortgaged Property in compliance therewith, and
(b) there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any currently effective federal, state or local law or regulation, or that, if any such hazardous materials are present for which such action could be required, after consultation with an environmental consultant, it would be in the best economic interest of the Certificateholders (and with respect to any Serviced Loan Combination, the Serviced Companion Loan noteholders), as a collective whole as if such Certificateholders and, if applicable, Serviced Companion Loan noteholders constituted a single lender, to take such actions with respect to the affected Mortgaged Property.
Such requirement precludes enforcement of the security for the related Mortgage Loan until a satisfactory environmental site assessment is obtained (or until any required remedial action is taken), but will decrease the likelihood that the Issuing Entity will become liable for a material adverse environmental condition at the Mortgaged Property. However, there can be no assurance that the requirements of the Pooling and Servicing Agreement will effectively insulate the Issuing Entity from potential liability for a materially adverse environmental condition at any Mortgaged Property.
If title to any Mortgaged Property is acquired by the Issuing Entity, the Special Servicer, on behalf of the Issuing Entity, will be required to sell the Mortgaged Property prior to the close of the third calendar year following the year in which the Issuing Entity acquires such Mortgaged Property, unless (i) the Internal Revenue Service grants or has not denied an extension of time to sell such property or (ii) the Trustee and the Certificate Administrator receive an opinion of independent counsel to the effect that the holding of the property by the Issuing Entity beyond such period will not result in the imposition of a tax on the Issuing Entity or cause either Trust REMIC to fail to qualify as a REMIC under the Code at any time that any Certificate is outstanding. Subject to the foregoing and any other tax-related limitations, the Special Servicer will generally be required to attempt to sell any Mortgaged Property so acquired on the same terms and conditions it would if it were the owner. If title to any Mortgaged Property is acquired by the Special Servicer on behalf of the Issuing Entity, the Special Servicer will also be required to ensure that the Mortgaged Property is administered so that it constitutes “foreclosure property” within the meaning of Code Section 860G(a)(8) at all times and that income from the operation or the sale of such property does not result in the receipt by the Issuing Entity of any income from non-permitted assets as described in Code Section 860F(a)(2)(B) with respect to such property. If the Issuing Entity acquires title
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to any Mortgaged Property, the Special Servicer, on behalf of the Issuing Entity, generally will be required to retain an independent contractor to manage and operate such property. The independent contractor generally will be permitted to perform construction (including renovation) on an REO Property only if the construction was more than 10% completed at the time default on the related mortgage loan became imminent. The retention of an independent contractor, however, will not relieve the Special Servicer of its obligation to manage such Mortgaged Property as required under the Pooling and Servicing Agreement.
In general, the Special Servicer will be obligated to cause any Mortgaged Property acquired as a Serviced REO Property to be operated and managed in a manner that would, in its good faith and reasonable judgment and to the extent commercially feasible, maximize the Issuing Entity’s net after-tax proceeds from such property. Generally, the Trust REMICs will not be taxable on income received with respect to a Mortgaged Property acquired by the Issuing Entity to the extent that it constitutes “rents from real property,” within the meaning of Code Section 856(c)(3)(A) and Treasury regulations under the Code. Rents from real property include fixed rents and rents based on the receipts or sales of a tenant but do not include the portion of any rental based on the net income or profit of any tenant or sub-tenant. No determination has been made whether rent, if any, on any of the Mortgaged Properties meets this requirement. Rents from real property include charges for services customarily furnished or rendered in connection with the rental of real property, whether or not the charges are separately stated. Services furnished to the tenants of a particular building will be considered as customary if, in the geographic market in which the building is located, tenants in buildings that are of similar class are customarily provided with the service. No determination has been made whether the services furnished to the tenants of the Mortgaged Properties are “customary” within the meaning of applicable regulations. It is therefore possible that a portion of the rental income with respect to an REO Property owned by the Trust would not constitute rents from real property, or that none of such income would qualify if a separate charge is not stated for such non-customary services or they are not performed by an independent contractor. Rents from real property also do not include income from the operation of a trade or business on the Mortgaged Properties, such as any hotels operated on the Mortgaged Properties or rental income attributable to personal property leased in connection with a lease of real property, if the rent attributable to the personal property exceeds 15% of the total rent for the taxable year. Any of the foregoing types of income will instead constitute “net income from foreclosure property” within the meaning of the REMIC Regulations (such tax referred to in this free writing prospectus as the “REO Tax”), which would be taxable to the Lower-Tier REMIC, as applicable, at the highest marginal federal corporate rate (currently 35%) and may also be subject to state or local taxes. After the Special Servicer reviews the operation of such property and consults with the Certificate Administrator to determine the Issuing Entity’s federal income tax reporting position with respect to income it is anticipated that the Issuing Entity would derive from such property, the Special Servicer could determine, pursuant to the Pooling and Servicing Agreement, that it would not be commercially feasible to manage and operate such property in a manner that would avoid the imposition of any REO Tax. The determination as to whether income from an REO Property would be subject to an REO Tax will depend on the specific facts and circumstances relating to the management and operation of each REO Property. Any REO Tax imposed on the Issuing Entity’s income from an REO Property would reduce the amount available for distribution to Certificateholders. Certificateholders are advised to consult their own tax advisors regarding the possible imposition of the REO Tax in connection with the operation of commercial REO Properties by REMICs. The Special Servicer will be required to sell any REO Property acquired on behalf of the Issuing Entity within the time period and in the manner described below under “—Sale of Defaulted Mortgage Loans and Serviced REO Properties” in this free writing prospectus.
Under the Pooling and Servicing Agreement, the Special Servicer is required to establish and maintain one or more REO Accounts, to be held on behalf of the Trustee for the benefit of the Certificateholders and with respect to a Serviced Loan Combination, the Serviced Companion Loan noteholders, for the retention of revenues and insurance proceeds derived from each Serviced REO Property. The Special Servicer is required to use the funds in the REO Account to pay for the proper operation, management, maintenance and disposition of any Serviced REO Property, but only to the extent of amounts on deposit in the REO Account relate to such Serviced REO Property. To the extent that amounts in the REO Account in respect of any Serviced REO Property are insufficient to make such payments, the Master Servicer is required to make a Property Advance, unless it determines such
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Property Advance would be nonrecoverable. Within one business day following the end of each Collection Period, the Special Servicer is required to deposit all amounts received in respect of each Serviced REO Property during such Collection Period, net of any amounts withdrawn to make any permitted disbursements, to the Collection Account;provided that the Special Servicer may retain in the REO Account permitted reserves.
Under the Pooling and Servicing Agreement, the Certificate Administrator is required to establish and maintain an Excess Liquidation Proceeds Account, in its own name on behalf of the Trustee, in trust for the benefit of the Certificateholders. Upon the disposition of any Serviced REO Property as described above, to the extent that Liquidation Proceeds (net of related liquidation expenses of such Mortgage Loan or Serviced Loan Combination or related Serviced REO Property) exceed the amount that would have been received if a principal payment and all other amounts due with respect to such Mortgage Loan and any related Serviced Companion Loan have been paid in full on the Due Date immediately following the date on which proceeds were received (such excess being “Excess Liquidation Proceeds”), such amount will be deposited in the Excess Liquidation Proceeds Account for distribution as provided in the Pooling and Servicing Agreement.
Sale of Defaulted Mortgage Loans and Serviced REO Properties
If the Special Servicer determines in accordance with the Servicing Standard that it would be in the best interests of the Certificateholders or, in the case of a Serviced Loan Combination, Certificateholders and any holder of the related Serviced Companion Loan (as a collective whole as if such Certificateholders and Serviced Companion Loan holders constituted a single lender) to attempt to sell a Defaulted Mortgage Loan (other than a Non-Serviced Mortgage Loan) and any related Serviced Companion Loan as described below, the Special Servicer will be required to use reasonable efforts to solicit offers for each Defaulted Mortgage Loan on behalf of the Certificateholders and the holder of any related Serviced Companion Loan in such manner as will be reasonably likely to realize a fair price. The Special Servicer is required to accept the first cash offer received from any person that constitutes a fair price for the Defaulted Mortgage Loan. If multiple offers are received during the period designated by the Special Servicer for receipt of offers, the Special Servicer is required to select the highest offer. The Special Servicer is required to give the Trustee, the Certificate Administrator, the Master Servicer, the Operating Advisor and the Directing Holder 10 business days’ prior written notice of its intention to sell any such Defaulted Mortgage Loan. Neither the Trustee nor any of its affiliates may make an offer for or purchase any Defaulted Mortgage Loan.
The Special Servicer will be required to determine whether any cash offer constitutes a fair price for any Defaulted Mortgage Loan if the highest offeror is a person other than an Interested Person. In determining whether any offer from a person other than an Interested Person constitutes a fair price for any Defaulted Mortgage Loan, the Special Servicer will be required to take into account (in addition to the results of any appraisal, Updated Appraisal or narrative appraisal that it may have obtained pursuant to the Pooling and Servicing Agreement within the prior 9 months), among other factors, the period and amount of the occupancy level and physical condition of the related Mortgaged Property and the state of the local economy.
If the highest offeror is an Interested Person, then the Trustee will be required to determine whether the cash offer constitutes a fair price. In determining whether any offer received from an Interested Person represents a fair price for any such Defaulted Mortgage Loan, the Trustee will be supplied with and will be required to rely on the most recent appraisal or Updated Appraisal conducted in accordance with the Pooling and Servicing Agreement within the preceding 9-month period or, in the absence of any such appraisal, on a narrative appraisal. The cost of any such Updated Appraisal or narrative appraisal will be covered by, and will be reimbursable as, a Property Advance. The Trustee will be permitted to retain, at the expense of the related Interested Person, an independent third party to determine such fair price and will be permitted to conclusively rely on the opinion of such third party’s determination. Any costs and fees of the Trustee in connection with an offer by an Interested Person and the Trustee’s duties therewith will be paid in advance by such Interested Person as a condition to the Trustee determining the
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fair price of such Defaulted Mortgage Loan. No offer from an Interested Person will constitute a fair price unless it is the highest offer received.
The Special Servicer is required to use reasonable efforts to solicit offers for each Serviced REO Property on behalf of the Certificateholders and the holder of any related Serviced Companion Loan and to sell each Serviced REO Property in the same manner as with respect to a Defaulted Mortgage Loan.
Notwithstanding any of the foregoing paragraphs, the Special Servicer will not be required to accept the highest cash offer if the Special Servicer determines, in its reasonable and good faith judgment, that rejection of such offer would be in the best interests of the Certificateholders and the holder of any related Serviced Companion Loan, as a collective whole as if such Certificateholders and Serviced Companion Loan holder constituted a single lender, and the Special Servicer may accept a lower cash offer (from any person other than itself or an Interested Person) if it determines, in its reasonable and good faith judgment, that acceptance of such offer would be in the best interests of the Certificateholders and the holder of any related Serviced Companion Loan, as a collective whole as if such Certificateholders and Serviced Companion Loan holder constituted a single lender.
If the 11 Madison Avenue Mortgage Loan becomes a Defaulted Mortgage Loan, MAD 2015-11MD Special Servicer will be required to sell such Mortgage Loan together with the related Companion Loans as notes evidencing one whole loan, in accordance with the provisions of the related Intercreditor Agreement and MAD 2015-11MD Trust and Servicing Agreement.
If the NMS Los Angeles Multifamily Portfolio Mortgage Loan becomes a Defaulted Mortgage Loan, the Special Servicer will be required to sell such Mortgage Loan together with the relatedPari Passu Companion Loans as notes evidencing one whole loan, in accordance with the provisions of the Pooling and Servicing Agreement and the related Intercreditor Agreement.
With respect to any Serviced Companion Loan, the related Serviced Companion Loan noteholder will have the right (to the extent set forth in the related intercreditor agreement) to consult with the Special Servicer in connection with the sale of the related Loan Combination as one whole loan after the related Mortgage Loan has become a Defaulted Mortgage Loan. In addition, with respect to any Non-Serviced Mortgage Loan, if such mortgage loan has become a defaulted mortgage loan under the related pooling and servicing agreement, the special servicer under the related pooling and servicing agreement will be required to sell such mortgage loan together with the related companion loan as notes evidencing one whole loan. The Controlling Class Representative (if no Control Termination Event has occurred and is continuing) will have the right (to the extent set forth in the related intercreditor agreement) to consult with the applicable special servicer in connection with such sale.
A “Defaulted Mortgage Loan” is a Mortgage Loan or Serviced Loan Combination that is delinquent at least 60 days in respect of its Monthly Payments or more than 60 days delinquent in respect of its balloon payment, if any, in either case such delinquency to be determined without giving effect to any grace period permitted by the related Mortgage Loan Documents and without regard to any acceleration of payments under the Mortgage Loan or Serviced Loan Combination.
An “Interested Person” is the Depositor, the Master Servicer, the Special Servicer, the Certificate Administrator, the Operating Advisor, the Directing Holder, any Certificateholder, any borrower, any manager of a Mortgaged Property, any independent contractor engaged by the Special Servicer or any affiliate of any of the preceding entities.
Modifications
The Pooling and Servicing Agreement will permit (a) as to Loans that are not Specially Serviced Loans and actions that do not involve Major Decisions or Special Servicer Decisions (other than the items listed inclause (e)(i) andclause (e)(ii) of Special Servicer Decisions, which the Master Servicer will process, subject to Special Servicer consent or deemed consent as provided in the Pooling and Servicing Agreement), the Master Servicer or (b)(i) with respect to any Specially Serviced Loan or (ii) as to Major Decisions or Special Servicer Decisions (other than the items listed inclause (e)(i)andclause (e)(ii) of
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Special Servicer Decisions which the Master Servicer will process, subject to Special Servicer consent or deemed consent as provided in the Pooling and Servicing Agreement) irrespective of whether such Mortgage Loan is a Specially Serviced Loan, the Special Servicer, in each case subject to the rights of the Directing Holder and after consultation with the Operating Advisor to the extent described above under “—The Operating Advisor” in this free writing prospectus to modify, waive or amend any term of any Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Companion Loan if such modification, waiver or amendment (c)(i) is consistent with the Servicing Standard and (ii) would not constitute a “significant modification” of such Mortgage Loan or Serviced Companion Loan pursuant to Treasury Regulations Section 1.860G-2(b) and would not otherwise (A) cause either Trust REMIC to fail to qualify as a REMIC or (B) result in the imposition of a tax upon either Trust REMIC or the Issuing Entity (including but not limited to the tax on “prohibited transactions” as defined in Code Section 860F(a)(2) and the tax on contributions to a REMIC set forth in Code Section 860G(d), but not including the tax on “net income from foreclosure property” under Code Section 860G(c)). Notwithstanding the foregoing, the Master Servicer and Special Servicer may mutually agree as provided in the Pooling and Servicing Agreement that the Master Servicer will process any of the foregoing matters that are Major Decisions or Special Servicer Decisions with respect to any non-Specially Serviced Loan.
In connection with (i) the release of a Mortgaged Property or any portion of a Mortgaged Property from the lien of the related Mortgage or (ii) the taking of a Mortgaged Property or any portion of a Mortgaged Property by exercise of the power of eminent domain or condemnation, if the Mortgage Loan Documents require the Special Servicer to calculate (or to approve the calculation of the related borrower of) the loan-to-value ratio of the remaining Mortgaged Property or Mortgaged Properties or the fair market value of the real property constituting the remaining Mortgaged Property or Mortgaged Properties, for purposes of REMIC qualification of the related Mortgage Loan, then such calculation shall exclude the value of personal property and going concern value, if any.
In no event, however, may the Master Servicer or the Special Servicer extend the maturity of any Mortgage Loan, Serviced Loan Combination or Specially Serviced Loan to a date occurring later than the earlier of (A) five years prior to the Distribution Date in October 2048 and (B) if the Mortgage Loan, Serviced Loan Combination or Specially Serviced Loan is secured solely or primarily by a ground lease (or, with respect to a leasehold interest that is a space lease or an air rights lease, such space lease or air rights lease), the date 20 years prior to the expiration of the term of such ground lease (or, with respect to a leasehold interest that is a space lease or an air rights lease, such space lease or air rights lease) (or 10 years prior to the expiration of such lease if the Master Servicer or the Special Servicer, as applicable, gives due consideration to the remaining term of the ground lease (or, with respect to a leasehold interest that is a space lease or an air rights lease, such space lease or air rights lease) and such extension is in the best interest of the Certificateholders and if a Serviced Companion Loan is involved, the holder of the related Serviced Companion Loan (as a collective whole as if such Certificateholders and Serviced Companion Loan holder constituted a single lender) and, if no Control Termination Event has occurred and is continuing, with the consent of the Directing Holder.
In addition, neither the Master Servicer nor the Special Servicer may permit any borrower to add or substitute any collateral for an outstanding Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Loan Combination, which collateral constitutes real property, unless the Master Servicer or the Special Servicer, as applicable, receives a No Downgrade Confirmation.
The consent of the Special Servicer is required to any modification, waiver or amendment that are Major Decisions or Special Servicer Decisions with regard to any Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Loan Combination that is not a Specially Serviced Loan (other than certain non-material modifications, waivers or amendments), and the Special Servicer will process (unless the Special Servicer and the Master Servicer mutually agree that the Master Servicer will process, as further described below) and consent to or refuse consent to, as applicable, all Major Decisions and Special Servicer Decisions. The Special Servicer will also be required to obtain the consent of the Directing Holder and will be required to consult with the Operating Advisor in connection with any such modification, waiver or amendment, to the extent described above under “—The Directing Holder” and “—The Operating Advisor” in this free writing prospectus. With respect to any non-Specially Serviced Loan
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(other than a Non-Serviced Mortgage Loan), the Master Servicer’s determination to consent to or approve a request by a borrower with respect to any of the following will be subject to the Special Servicer’s processing and consent or, if mutually agreed to by the Special Servicer and the Master Servicer, the Master Servicer will be required to process such request subject to the consent of the Special Servicer as further described below (each of the following, a “Special Servicer Decision”):
(a) approving leases, lease modifications or amendments or any requests for subordination, non-disturbance and attornment agreements for leases in excess of the lesser of (i) 30,000 square feet and (ii) 30% of the net rentable area at the related Mortgaged Property;
(b) approving any waiver regarding the receipt of financial statements (other than any waiver affecting the timing of receipt thereof; provided that such waiver does not involve permitting delivery of financial statements less than quarterly and more than 60 days after the end of the calendar quarter);
(c) approving annual budgets for the related Mortgaged Property that provide for (i) increases in operating expenses in an amount equal to more than 110% of the amounts budgeted therefor for the prior year or (ii) payments to affiliates of the related borrower (excluding affiliated managers paid at fee rates agreed to at the origination of the related Mortgage Loan or Loan Combination);
(d) approving material rights-of-way and material easements, and consent to subordination of the related Mortgage Loan or Serviced Loan Combination to such material rights-of-way or easements;
(e) agreeing to any modification, waiver, consent or amendment of the related Mortgage Loan or Loan Combination in connection with a defeasance if such proposed modification, waiver, consent or amendment is with respect to a (i) a waiver of a mortgage loan event of default (but excluding non-monetary events of default other than defaults relating to transfers of interest in the borrower or the existing collateral or material modifications of the existing collateral), (ii) a modification of the type of defeasance collateral required under the Mortgage Loan or Loan Combination documents other than direct, non-callable obligations of the United States would be permitted or (iii) a modification that would permit a principal prepayment instead of defeasance if the applicable loan documents do not otherwise permit such principal prepayment;provided that the foregoing is not otherwise a Major Decision;
(f) in circumstances where no lender discretion is permitted other than confirming that the conditions in the applicable Mortgage Loan Documents have been satisfied, any requests to incur additional debt in accordance with the terms of the Mortgage Loan Documents;
(g) any requests for the disbursement of earnouts or holdback amounts with respect to any Specially Serviced Loan that is not otherwise a Major Decision;
(h) approving any proposed modification or waiver of any material provision in the related loan documents governing the type, nature or amount of insurance coverage required to be obtained and maintained by the related borrower; and
(i) approving any casualty insurance settlements or condemnation settlements, and determining whether to apply casualty proceeds or condemnation awards to the reduction of the debt rather than to the restoration of the Mortgaged Property;
provided,however, that with respect toclause (e) of this definition (1) the Master Servicer shall evaluate and process requests for any modifications described in sub-clauses (i) and (ii) of suchclause (e) and obtain the consent or deemed consent of the Special Servicer as provided in the Pooling and Servicing Agreement and (2) the Special Servicer shall evaluate and process and/or consent to requests for any modifications described in sub-clause (iii) of suchclause (e).
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Notwithstanding the foregoing, the Master Servicer and Special Servicer may mutually agree as provided in the Pooling and Servicing Agreement that the Master Servicer will process any of the foregoing matters (as well as any Major Decision) with respect to any non-Specially Serviced Loan (other than a Non-Serviced Mortgage Loan). If the Master Servicer and Special Servicer mutually agree that the Master Servicer will process a Special Servicer Decision, the Master Servicer will be required to obtain the Special Servicer’s prior consent to such Special Servicer Decision.
The Special Servicer is also required to obtain the consent of the Directing Holder and will be required to consult with the Operating Advisor in connection with any modification, waiver or amendment with regard to any Specially Serviced Loan to the extent described above under “—The Directing Holder” and “—The Operating Advisor” in this free writing prospectus. When the Special Servicer’s consent is required, the Master Servicer shall promptly provide the Special Servicer with written notice of any request for modification, waiver or amendment (and to the extent that the Master Servicer and the Special Servicer agree that the Master Servicer shall process such modification, amendment or waiver) accompanied by the Master Servicer’s recommendation and analysis and any and all information in the Master Servicer’s possession that the Special Servicer may reasonably request to process or to grant or withhold such consent. When the Special Servicer’s processing and/or consent is required under the Pooling and Servicing Agreement, such consent will be deemed given 15 business days (or, in connection with an Acceptable Insurance Default, 90 days) after receipt (unless earlier objected to) by the Special Servicer from the Master Servicer of the Master Servicer’s written analysis and recommendation with respect to such proposed action together with such other information reasonably required by the Special Servicer. With respect to all Specially Serviced Loans and non-Specially Serviced Loans, the Special Servicer will be required to obtain, prior to consenting to such a proposed action of the Master Servicer, and prior to itself taking such an action, the written consent of the Directing Holder, which consent will be deemed given 10 business days (or, in connection with an Acceptable Insurance Default, 30 days) after receipt (unless earlier objected to) by the Directing Holder of the Master Servicer’s and/or Special Servicer’s, as applicable, written analysis and recommendation with respect to such waiver together with such other information reasonably required by the Directing Holder.
The Master Servicer or the Special Servicer, as applicable, is required to notify the Trustee, the Certificate Administrator, the Directing Holder (other than during the period when a Consultation Termination Event has occurred and is continuing), the Operating Advisor (only if a Control Termination Event has occurred and is continuing), the Depositor and the 17g-5 Information Provider (who will promptly post such notice to the 17g-5 Information Provider’s website), in writing, of any modification, waiver, material consent or amendment of any term of any Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Companion Loan and the date of the modification and deliver a copy to the Custodian for deposit in the related Mortgage File, an original counterpart of the agreement relating to such modification, waiver, material consent or amendment, promptly (and in any event within 10 business days) following the execution of the agreement.
Any modification, extension, waiver or amendment of the payment terms of a Serviced Loan Combination will be required to be structured so as to be consistent with the allocation and payment priorities in the related Mortgage Loan Documents and intercreditor agreement, if any, such that neither the Issuing Entity as holder of the Mortgage Loan nor a holder of any related Serviced Companion Loan gains a priority over the other such holder that is not reflected in the related Mortgage Loan Documents and intercreditor agreement.
Any modification, waiver or amendment with respect to a Serviced Loan Combination may be subject to the consent of one or more holders of a related Serviced Companion Loan and the Special Servicer as described under “Description of the Mortgage Pool—Loan Combinations” in this free writing prospectus.
See also “—The Directing Holder” and “—The Operating Advisor” above in this free writing prospectus for a description of the Directing Holder’s and the Operating Advisor’s rights with respect to modifications, waivers and amendments and reviewing and approving the Asset Status Report.
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Optional Termination
Any holder of Certificates representing greater than 50% of the Percentage Interest of the then Controlling Class, and, if such holder does not exercise its option, the Special Servicer and, if the Special Servicer does not exercise its option, the Master Servicer, will have the option to purchase all of the Mortgage Loans and all property acquired in respect of any Mortgage Loan remaining in the Issuing Entity, and thereby effect termination of the Issuing Entity and early retirement of the then outstanding Certificates, on any Distribution Date on which the aggregate Stated Principal Balance of the Mortgage Loans remaining in the Issuing Entity is less than 1% of the aggregate principal balance of all of the Mortgage Loans as of the Cut-off Date. Any such party may be an affiliate of the Sponsor, Depositor, Issuing Entity or other related party at the time it exercises such right. The purchase price payable upon the exercise of such option on such a Distribution Date will be an amount equal to the sum of, without duplication, (A) 100% of the outstanding principal balance of each Mortgage Loan included in the Issuing Entity as of the last day of the month preceding such Distribution Date (less any P&I Advances previously made on account of principal); (B) the fair market value of all other property included in the Issuing Entity as of the last day of the month preceding such Distribution Date, as determined by an independent appraiser as of a date not more than 30 days prior to the last day of the month preceding such Distribution Date; (C) all unpaid interest accrued on the outstanding principal balance of each Mortgage Loan (including any Mortgage Loans as to which title to the related Mortgaged Property has been acquired) at the Mortgage Rate to the last day of the month preceding such Distribution Date (less any P&I Advances previously made on account of interest); and (D) unreimbursed Advances (with interest thereon), unpaid Servicing Fees and other servicing compensation, Trustee/Certificate Administrator Fees, CREFC® License Fees, Operating Advisor Fees, and unpaid expenses of and indemnity amounts owed by the Issuing Entity. The Issuing Entity may also be terminated in connection with an exchange by the Sole Certificateholder of all the then outstanding Certificates (excluding the Class V, Class R and Class LR Certificates) (provided that the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class A-M, Class X-A, Class X-B, Class B, Class C and Class D Certificates are no longer outstanding) if the Sole Certificateholder: compensates the Certificate Administrator for the amount of investment income the Certificate Administrator would have earned if the outstanding Certificate Balance of the then outstanding Certificates (other than the Class X-A, Class X-B, Class X-C, Class X-D, Class X-E, Class X-F, Class V, Class R and Class LR Certificates) were on deposit with the Certificate Administrator as of the first day of the current calendar month and the Sole Certificateholder pays to the Master Servicer an amount equal to (i) the product of (a) the Prime Rate, (b) the aggregate Certificate Balance of the then outstanding Certificates (other than the Class X-A, Class X-B, Class X-C, Class X-D, Class X-E, Class X-F, Class V, Class R and Class LR Certificates) as of the date of the exchange and (c) three, divided by (ii) 360, for the Mortgage Loans and any REO Properties remaining in the Issuing Entity;provided,further, that if the Sole Certificateholder has taken only an assignment of the Voting Rights of the Class X-D, Class X-E or Class X-F Certificates, the holders of the Class X-D, Class X-E or Class X-F Certificates will be entitled to receive a cash payment in consideration for an exchange of their Certificates. Following such termination, no further amount shall be payable on the Certificates, regardless of whether any recoveries are received on the REO Properties. Notice of any such termination is required to be given promptly by the Certificate Administrator by letter to the Certificateholders with a copy to the Master Servicer, the Special Servicer, the Operating Advisor, the Mortgage Loan Sellers, the Trustee and the 17g-5 Information Provider (who will promptly post such notice to the 17g-5 Information Provider’s website). Notice to the Certificateholders will be given at their addresses shown in the Certificate Registrar not more than 30 days, and not less than ten days, prior to the anticipated termination date. With respect to any book-entry Certificates, such notice will be mailed to DTC and beneficial owners of Certificates will be notified to the extent provided in the procedures of DTC and its participants.
“Sole Certificateholder” is any Certificateholder (or Certificateholders, provided they act in unanimity) holding 100% of the then outstanding Certificates (including Certificates with Certificate Balances that have been actually or notionally reduced by any Realized Losses or Appraisal Reduction Amounts, but excluding the Class V, Class R and Class LR Certificates) or an assignment of the Voting Rights thereof;provided that the Certificate Balances of the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class A-M, Class B, Class C and Class D Certificates have been reduced to zero;provided,further, that if the Certificateholders of the Class X-D, Class X-E and Class X-F Certificates have assigned all of the
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Voting Rights of the Class X-D, Class X-E and Class X-F Certificates to the Holder of 100% of the then outstanding Class E, Class F, Class G and Class H Certificates, then “Sole Certificateholder” means the Certificateholder of 100% of the Class E, Class F, Class G and Class H Certificates.
Servicing Compensation and Payment of Expenses
Pursuant to the Pooling and Servicing Agreement, the Master Servicer will be entitled to withdraw the Master Servicing Fee for the Mortgage Loans and Serviced Companion Loans from the Collection Account (and with respect to each Serviced Loan Combination, the related separate custodial account). The “Master Servicing Fee” will be payable monthly and will accrue at a rateper annum (the “Master Servicing Fee Rate”) that is a component of the Servicing Fee Rate. The “Servicing Fee” will be payable monthly and will accrue at a percentage rateper annum (the “Servicing Fee Rate”) equal to the Administrative Fee Rate set forth on Annex A-1 to this free writing prospectus under the heading “Administrative Fee Rate,” less the Trustee/Certificate Administrator Fee Rate, the Operating Advisor Fee Rate and the CREFC® License Fee Rate, for each Mortgage Loan and will include the Master Servicing Fee and any fee for primary servicing functions payable to the Master Servicer or the applicable primary servicer. The Servicing Fee will be retained by the Master Servicer from payments and collections (including insurance proceeds, condemnation proceeds and liquidation proceeds) in respect of each Mortgage Loan, and to the extent any Servicing Fee remains unpaid at the liquidation of the related Mortgage Loan, from general collections in the Collection Account.
The Master Servicer will also be entitled to retain as additional servicing compensation for the Mortgage Loans that it is servicing (together with the Master Servicing Fee, “Servicing Compensation”) (i) all investment income earned on amounts on deposit in the Collection Account with respect to the Mortgage Loans that it is servicing (and with respect to each Serviced Loan Combination, the related separate custodial account) and certain Reserve Accounts (to the extent consistent with the related Mortgage Loan Documents); (ii) to the extent permitted by applicable law and the related Mortgage Loan Documents (A) with respect to Mortgage Loans (and the related Serviced Companion Loans) that are not Specially Serviced Loans, (1) 100% of any Modification Fees which do not involve a Major Decision or Special Servicer Decision and (2) 50% of any Modification Fees which involve a Major Decision or Special Servicer Decision (whether or not processed by the Special Servicer) and (B) with respect to any Specially Serviced Loans, 0% of any Modification Fees,(iii) 100% of any defeasance fees, (iv) (A) with respect to Mortgage Loans (and the related Serviced Companion Loans) that are not Specially Serviced Loans, (1) 100% of assumption fees which do not involve a Major Decision or Special Servicer Decision and (2) 50% of assumption fees which involve a Major Decision or Special Servicer Decision (whether or not processed by the Special Servicer) and (B) with respect to Specially Serviced Loans, 0% of assumption fees,(v) (A) with respect to Mortgage Loans (and the related Serviced Companion Loans) that are not Specially Serviced Loans, (1) 100% of loan service transaction fees which do not involve a Major Decision or Special Servicer Decision and (2) 50% of loan service transaction fees which involve a Major Decision or Special Servicer Decision (whether or not processed by the Special Servicer) and (B) with respect to Specially Serviced Loans, 0% of loan service transaction fees, (vi) 100% of beneficiary statement charges, demand fees or similar items (but not including Prepayment Premiums or Yield Maintenance Charges) on all Mortgage Loans (and the related Serviced Companion Loans) that are not Specially Serviced Loans, (vii) 100% of assumption application fees with respect to Mortgage Loans (and the related Serviced Companion Loans) that are not Specially Serviced Loans; (viii) Net Prepayment Interest Excess, if any; (ix) 100% of charges for checks returned for insufficient funds (with respect to any Mortgage Loan or Specially Serviced Loan); (x) Net Default Interest and any late payment
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fees that accrued during a Collection Period on any Mortgage Loans (and the related Serviced Companion Loans, if applicable) that are not Specially Serviced Loans to the extent collected by the Issuing Entity and remaining after application thereof to reimburse interest on Advances with respect to such Mortgage Loan and to reimburse the Issuing Entity for certain expenses of the Issuing Entity relating to such Mortgage Loan; and (xi) 50% of any fee paid in connection with any Major Decision or Special Servicer Decision for a non-Specially Serviced Loan (regardless of whether the Master Servicer or Special Servicer processes the related request) and 0% of any fee paid in connection with any Major Decision or Special Servicer Decision for a Specially Serviced Loan. In addition, provided that a Non-Serviced Mortgage Loan is not in special servicing, the Master Servicer will be entitled to any Net Default Interest and any late payment fees collected by the master servicer or the special servicer of the Non-Serviced Mortgage Loan that are allocated to the Non-Serviced Mortgage Loan (but only if and to the extent such amounts are not payable to the servicer that is servicing the Non-Serviced Mortgage Loan pursuant to the terms of the related pooling and servicing agreement and any related intercreditor agreement) in accordance with the related intercreditor agreement and the related servicing agreement during a collection period remaining after application thereof to reimburse interest on P&I Advances on such Non-Serviced Mortgage Loan and to reimburse the Issuing Entity for certain expenses of the Issuing Entity with respect to such Non-Serviced Mortgage Loan, if applicable, as provided in the Pooling and Servicing Agreement. The Master Servicer will not be entitled to the amounts specified in clauses (ii) and (iv) of this paragraph with respect to a Non-Serviced Mortgage Loan. If a Mortgage Loan is a Specially Serviced Loan, the Special Servicer will be entitled to the full amount of any and all Modification Fees, or assumption fees or any other fees, as described below under “—Special Servicing.”
If the Master Servicer resigns or is terminated as the Master Servicer, then it will be entitled to retain the related excess servicing strip, except to the extent that any portion of such excess servicing strip is needed to compensate any replacement Master Servicer for assuming the duties of the Master Servicer, as the Master Servicer under the Pooling and Servicing Agreement. In the event that the Master Servicer resigns or is terminated as a primary servicer, it will be entitled to retain its primary servicing fee with respect to those underlying mortgage loans for which it is primary servicer, except to the extent that any such portion of such primary servicing fee is needed to compensate any replacement primary servicer for assuming the duties of the Master Servicer as a primary servicer under the Pooling and Servicing Agreement. The initial Master Servicer will be entitled to transfer any such excess servicing strip and/or primary servicing fees that may be retained by it in connection with its resignation or termination.
In connection with the Master Servicer Prepayment Interest Shortfall Amount, the Master Servicer will be obligated to reduce its Servicing Compensation as provided in this free writing prospectus under “Description of the Offered Certificates—Distributions—Prepayment Interest Shortfalls.”
The Master Servicer will pay all of its overhead expenses incurred in connection with its responsibilities under the Pooling and Servicing Agreement (subject to reimbursement to the extent and as described in the Pooling and Servicing Agreement). The Certificate Administrator will withdraw monthly from the Distribution Account the Trustee/Certificate Administrator Fee payable to the Trustee and the Certificate Administrator, as well as any other amounts due and owing to the Certificate Administrator or the Trustee, as the case may be, from the Issuing Entity.
Special Servicing
The Special Servicer. For a description of the Special Servicer, see “The Servicers—The Special Servicer” in this free writing prospectus.
Servicing Transfer Event. The duties of the Special Servicer relate to Specially Serviced Loans and to any Serviced REO Property. The Pooling and Servicing Agreement will define a “Specially Serviced Loan”, and such term is defined in this free writing prospectus, to include any Mortgage Loan or Serviced Companion Loan with respect to which:
(i) either (x) with respect to any Mortgage Loan or Serviced Companion Loan, other than a Balloon Loan, a payment default shall have occurred on such Mortgage Loan or Serviced Companion Loan at its maturity date or, if the maturity date of such Mortgage Loan or Serviced Companion Loan has been extended in accordance with the Pooling and Servicing Agreement, a payment default occurs on such Mortgage Loan or Serviced Companion Loan at its extended maturity date or (y) with respect to a Balloon Loan, a payment default shall have occurred with respect to the related balloon payment;provided that if (A) the related borrower is diligently seeking a refinancing commitment (and delivers a statement to that effect to the Master Servicer, who shall promptly deliver a copy to the Special Servicer, the Operating Advisor and the Directing Holder (but only for so long as no Consultation Termination Event has occurred and is continuing) within 30 days after the default), (B) the related borrower continues to make its Assumed
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Scheduled Payment, (C) no other Servicing Transfer Event has occurred with respect to that Mortgage Loan or Serviced Companion Loan and (D) for so long as no Control Termination Event has occurred and is continuing, the Directing Holder consents, a Servicing Transfer Event will not occur until 60 days beyond the related maturity date, unless extended by the Special Servicer in accordance with the Mortgage Loan Documents, the Pooling and Servicing Agreement and any related Intercreditor Agreement; andprovided,further, if the related borrower has delivered to the Master Servicer, who shall have promptly delivered a copy to the Special Servicer, the Operating Advisor and the Directing Holder (but only for so long as no Consultation Termination Event has occurred and is continuing), on or before the 60th day after the related maturity date, a refinancing commitment reasonably acceptable to the Special Servicer, and the borrower continues to make its Assumed Scheduled Payments (and no other Servicing Transfer Event has occurred with respect to that Mortgage Loan or Serviced Companion Loan), a Servicing Transfer Event will not occur until the earlier of (1) 120 days beyond the related maturity date or extended maturity date and (2) the termination of the refinancing commitment;
(ii) any Monthly Payment (other than a balloon payment) or any amount due on a monthly basis as an escrow payment or reserve funds, is 60 days or more delinquent;
(iii) the Master Servicer or the Special Servicer (and, in the case of a determination by the Special Servicer, for so long as no Control Termination Event has occurred and is continuing, with the consent of the Directing Holder and, with respect to any Serviced Loan Combination, in consultation with the related Serviced Companion Loan noteholders to the extent provided for in the related intercreditor agreement) determines in its reasonable business judgment, exercised in accordance with the Servicing Standard, that (x) a default consisting of a failure to make a payment of principal or interest is reasonably foreseeable or there is a significant risk of such default or (y) any other default that is likely to impair the use or marketability of the related Mortgaged Property or the value of the Mortgaged Property as security for the Mortgage Loan or, if applicable, Serviced Companion Loan, is reasonably foreseeable or there is a significant risk of such default, which monetary or other default, in either case, would likely continue unremedied beyond the applicable grace period (or, if no grace period is specified, for a period of 60 days) and is not likely to be cured by the related borrower within 60 days or, except as provided inclause (i)(y) above, in the case of a balloon payment, for at least 30 days;
(iv) the related borrower has become the subject of a decree or order of a court or agency or supervisory authority having jurisdiction in the premises in an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law, or the appointment of a conservator, receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs;
(v) the related borrower consents to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings of or relating to such borrower of or relating to all or substantially all of its property;
(vi) the related borrower admits in writing its inability to pay its debts generally as they become due, files a petition to take advantage of any applicable insolvency or reorganization statute, makes an assignment for the benefit of its creditors, or voluntarily suspends payment of its obligations;
(vii) a default, of which the Master Servicer or the Special Servicer has notice (other than a failure by such related borrower to pay principal or interest) and that in the opinion of the Master Servicer or the Special Servicer (and, in the case of the Special Servicer, for so long as no Control Termination Event has occurred and is continuing, with the consent of the Directing Holder and, with respect to any Serviced Loan Combination, in consultation with the related Serviced Companion Loan noteholders to the extent provided for in the related Intercreditor Agreement) materially and adversely affects the interests of the Certificateholders or any holder of a Serviced Companion Loan, if applicable, occurs and remains unremedied for the applicable grace period specified in the Mortgage Loan Documents for such Mortgage Loan or Serviced
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Companion Loan (or if no grace period is specified for those defaults which are capable of cure, 60 days); or
(viii) the Master Servicer or Special Servicer receives notice of the foreclosure or proposed foreclosure of any lien on the related Mortgaged Property (each of clause (i) through (viii), a “Servicing Transfer Event”).
A Servicing Transfer Event with respect to a Serviced Loan Combination will generally be delayed if the holder of any related Subordinate Companion Loan is making all cure payments necessary to satisfy the related intercreditor agreement or Pooling and Servicing Agreement, as applicable. If applicable, see “Description of the Mortgage Pool—Loan Combinations” in this free writing prospectus.
With respect to each Non-Serviced Loan Combination, if a “servicing transfer event” (or an equivalent event) exists with respect to the related Non-Serviced Companion Loan under the related servicing agreement, then a servicing transfer event under such related servicing agreement will also be deemed to exist with respect to the related Non-Serviced Mortgage Loan. If a Servicing Transfer Event exists with respect to a Mortgage Loan included in a Serviced Loan Combination, then it will also be deemed to exist with respect to the related Serviced Companion Loan. The Loan Combinations are intended to always be serviced or specially serviced, as the case may be, together.
A Mortgage Loan or Serviced Loan Combination will cease to be a Specially Serviced Loan (each, a “Corrected Mortgage Loan”) (A) with respect to the circumstances described in clauses (i) and (ii) above, when the borrower thereunder has brought the Mortgage Loan or Serviced Companion Loan current and thereafter made three consecutive full and timely Monthly Payments, including pursuant to any workout of the Mortgage Loan or Serviced Companion Loan, (B) with respect to the circumstances described inclause (iii),(iv),(v), (vi) and (viii) above, when such circumstances cease to exist in the good faith judgment of the Special Servicer or (C) with respect to the circumstances described in clause (vii) above, when such default is cured (as determined by the Special Servicer in accordance with the Servicing Standard) or waived by the Special Servicer;provided, in each case, that at that time no circumstance exists (as described above) that would cause the Mortgage Loan or Serviced Companion Loan to continue to be characterized as a Specially Serviced Loan.
Asset Status Report. The Special Servicer will prepare a report (the “Asset Status Report”) for each Mortgage Loan and each Serviced Loan Combination that becomes a Specially Serviced Loan not later than 30 days after the servicing of such Mortgage Loan or such Serviced Loan Combination is transferred to the Special Servicer. Each Asset Status Report will be delivered to the Master Servicer, the Directing Holder (only for so long as no Consultation Termination Event has occurred and is continuing), the Operating Advisor (but only if a Control Termination Event has occurred and is continuing), the Controlling Class Representative and the 17g-5 Information Provider (who will be required to promptly post such report to the 17g-5 Information Provider’s website), in the case of each Serviced Loan Combination, the holder of the related Serviced Companion Loan, and upon request, the Underwriters.
For so long as no Control Termination Event has occurred and is continuing, if the Directing Holder does not disapprove of an Asset Status Report within 10 business days, the Directing Holder will be deemed to have approved the Asset Status Report and the Special Servicer will implement the recommended action as outlined in such Asset Status Report;provided,however, that the Special Servicer may not take any actions that are contrary to applicable law, the Servicing Standard or the terms of the Pooling and Servicing Agreement, the applicable Mortgage Loan Documents or any related intercreditor agreement. If, for so long as a Control Termination Event has not occurred and is not continuing, the Directing Holder disapproves such Asset Status Report within such 10 business day period, the Special Servicer will revise such Asset Status Report as soon as practicable thereafter, but in no event later than 30 business days after such disapproval. For so long as a Control Termination Event has not occurred and is not continuing, the Special Servicer will revise such Asset Status Report until the Directing Holder fails to disapprove such revised Asset Status Report as described above or until the Special Servicer makes a determination, consistent with the Servicing Standard, that such objection is not in the best interests of all the Certificateholders (and with respect to a Serviced Loan Combination, the holder of the related Serviced Companion Loan, as a collective whole as if such Certificateholders and
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Companion Loan holder constituted a single lender). In any event, for so long as a Control Termination Event has not occurred and is not continuing, if the Directing Holder does not approve an Asset Status Report within 60 business days from the first submission of an Asset Status Report, the Special Servicer may act upon the most recently submitted form of Asset Status Report if consistent with the Servicing Standard. The Asset Status Report is not intended to replace or satisfy any specific consent or approval right which the Directing Holder may have. Notwithstanding the foregoing, with respect to any Serviced Loan Combination, the Directing Holder will be entitled to a comparable Asset Status Report, but the procedure and timing for approval by the Directing Holder of the related Asset Status Report will be governed by the terms of the related intercreditor agreement and the applicable pooling and servicing agreement.
With respect to each Mortgage Loan (other than a Non-Serviced Mortgage Loan), if a Control Termination Event has occurred and is continuing, each of the Operating Advisor and, for so long as no Consultation Termination Event has occurred and is continuing, the Directing Holder will be entitled to consult with the Special Servicer and propose alternative courses of action in respect of any Asset Status Report and the Special Servicer will be obligated to consider such alternative courses of action and any other feedback provided by the Operating Advisor. The Special Servicer may revise the Asset Status Reports as it deems reasonably necessary in accordance with the Servicing Standard to take into account any input and/or recommendations of the Operating Advisor and the Directing Holder.
Special Servicing Compensation. Pursuant to the Pooling and Servicing Agreement, the Special Servicer will be entitled to certain fees for the Mortgage Loans that it is special servicing including the Special Servicing Fee, the Workout Fee and the Liquidation Fee. The Special Servicer will not be entitled to retain any portion of the Excess Interest paid on any ARD Loan.
The “Special Servicing Fee” will accrue with respect to each Specially Serviced Loan and REO Loan at a rate equal to 0.25%per annum of the Stated Principal Balance of such Specially Serviced Loan or REO Loan, as applicable. The special servicer with respect to each Non-Serviced Loan Combination will accrue a comparable special servicing fee with respect to each Non-Serviced Loan Combination pursuant to the related servicing agreement.
A “Workout Fee” will in general be payable with respect to each Corrected Mortgage Loan and will be payable by the Issuing Entity out of each collection of interest and principal (including scheduled payments, prepayments (provided that a repurchase or substitution by a Mortgage Loan Seller of a Mortgage Loan due to a Material Document Defect or a Material Breach will not be considered a prepayment for purposes of this definition), balloon payments and payments at maturity, but excluding late payment charges, Default Interest and Excess Interest) received on the related Specially Serviced Loan that becomes a Corrected Mortgage Loan, for so long as it remains a Corrected Mortgage Loan, in an amount equal to the lesser of (1) 1.0% of each such collection of interest and principal and (2) $1,000,000 in the aggregate with respect to any particular workout of a Specially Serviced Loan;provided that no Workout Fee will be payable by the Issuing Entity with respect to any Corrected Mortgage Loan if and to the extent that the Corrected Mortgage Loan became a Specially Serviced Loan under clause (iii) of the definition of “Specially Serviced Loan” and no event of default actually occurs, unless the Mortgage Loan or Serviced Companion Loan is modified by the Special Servicer in accordance with the terms of the Pooling and Servicing Agreement or the Mortgage Loan subsequently qualifies as a Specially Serviced Loan for a reason other than under clause (iii) of the definition of “Specially Serviced Loan”;provided, further that if a Mortgage Loan or Serviced Companion Loan becomes a Specially Serviced Loan only because of an event described in clause (i) of the definition of “Specially Serviced Loan” and the related collection of principal and interest is received within 3 months following the related maturity date as a result of the related Mortgage Loan or Serviced Companion Loan being refinanced or otherwise repaid in full, the Special Servicer will not be entitled to collect a Workout Fee out of the proceeds received in connection with such workout if such fee would reduce the amount available for distributions to Certificateholders, but the Special Servicer may collect from the related borrower and retain (x) a workout fee, (y) such other fees as are provided for in the related Mortgage Loan Documents and (z) other appropriate fees in connection with such workout. In addition, notwithstanding the foregoing, the total amount of Workout Fees payable by the Issuing Entity with
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respect to a Corrected Mortgage Loan and with respect to any particular workout (assuming, for the purposes of this calculation, that such Corrected Mortgage Loan continues to perform throughout its term in accordance with the terms of the related workout) will be reduced by the amount of any and all related Offsetting Modification Fees received by the Special Servicer as additional servicing compensation relating to that Corrected Mortgage Loan;provided that the Special Servicer will be entitled to collect such Workout Fees from the Issuing Entity until such time it has been fully paid such reduced amount. In addition, the Workout Fee will be subject to the cap described below.
The Workout Fee with respect to any such Corrected Mortgage Loan will cease to be payable if such Corrected Mortgage Loan again becomes a Specially Serviced Loan or if the related Mortgaged Property becomes an REO Property;provided that a new Workout Fee will become payable if and when such Mortgage Loan or Serviced Loan Combination again becomes a Corrected Mortgage Loan.
If the Special Servicer is terminated (other than for cause) or resigns with respect to any or all of its servicing duties, it will retain the right to receive any and all Workout Fees payable with respect to each Corrected Mortgage Loan during the period that it had responsibility for servicing such Corrected Mortgage Loan (or for any Specially Serviced Loan that had not yet become a Corrected Mortgage Loan because as of the time that the Special Servicer is terminated the borrower has not made three consecutive monthly debt service payments and subsequently the Specially Serviced Loan becomes a Corrected Mortgage Loan) at the time of such termination or resignation (and the successor Special Servicer will not be entitled to any portion of such Workout Fees), in each case until the Workout Fee for any such Corrected Mortgage Loan ceases to be payable in accordance with the preceding paragraph.
The special servicer with respect to each Non-Serviced Loan Combination will accrue a comparable workout fee with respect to such Non-Serviced Loan Combination pursuant to the related pooling and servicing agreement, although there may be a higher cap (or no cap) on such fee.
A “Liquidation Fee” will be payable by the Issuing Entity to the Special Servicer, except as otherwise described below, with respect to (i) each Specially Serviced Loan or REO Loan or (ii) each Mortgage Loan repurchased by a Mortgage Loan Seller or (iii) each Defaulted Mortgage Loan that is a Non-Serviced Mortgage Loan sold by the Special Servicer in accordance with the Pooling and Servicing Agreement, in each case, as to which the Special Servicer obtains a full, partial or discounted payoff from the related borrower, a loan purchaser or Mortgage Loan Seller, as applicable, and, except as otherwise described below, with respect to any Specially Serviced Loan or REO Property as to which the Special Servicer recovered any proceeds (“Liquidation Proceeds”). The Liquidation Fee will be payable from the related payment or proceeds in an amount equal to the lesser of (1) 1.0% of such payment or proceeds (exclusive of any portion of such amount that represents penalty charges) and (2) $1,000,000;provided the total amount of a Liquidation Fee payable by the Issuing Entity with respect to any Specially Serviced Loan, REO Loan or Mortgage Loan in connection with any particular liquidation (or partial liquidation) will be reduced by the amount of any and all related Offsetting Modification Fees received by the Special Servicer as additional servicing compensation relating to that Specially Serviced Loan, REO Loan or Mortgage Loan. In addition, the Liquidation Fee will be subject to the cap described below.
The special servicer with respect to each Non-Serviced Loan Combination will accrue a comparable liquidation fee with respect to such Non-Serviced Loan Combination pursuant to the related pooling and servicing agreement (other than a Liquidation Fee with respect to the repurchase of a Non-Serviced Mortgage Loan included in the Issuing Entity), although there may be a higher cap (or no cap) on such fee.
Notwithstanding anything to the contrary described above, no Liquidation Fee will be payable based on, or out of, Liquidation Proceeds received in connection with:
· | the purchase of any Defaulted Mortgage Loan by the Special Servicer or the Directing Holder or any Companion Loan Holder or any of their affiliates if within 90 days after the transfer of the Defaulted Mortgage Loan to special servicing, |
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· | the purchase of all of the Mortgage Loans and all property acquired in respect of any Mortgage Loan by the Sole Certificateholder, the Certificateholder owning a majority of the Percentage Interest of the then Controlling Class, the Special Servicer or the Master Servicer in connection with the termination of the Issuing Entity, |
· | a repurchase or replacement of a Mortgage Loan by a Mortgage Loan Seller due to a breach of a representation or warranty or a document defect in the mortgage file prior to the expiration of certain cure periods (including any applicable extension thereof) set forth in the Pooling and Servicing Agreement, |
· | with respect to any Mortgage Loan that is subject to mezzanine indebtedness the purchase of such Mortgage Loan by the holder of the related mezzanine loan within 90 days after the first time that such holder’s option to purchase such Mortgage Loan becomes exercisable, |
· | with respect to a Serviced Companion Loan that is subject to another securitization, (A) a repurchase or replacement of such Serviced Companion Loan by the applicable mortgage loan seller due to a breach of a representation or warranty or a document defect under the pooling and servicing agreement for the trust that owns such Serviced Companion Loan prior to the expiration of the cure period (including any applicable extension thereof) set forth therein or (B) a purchase of the Serviced Companion Loan pursuant to a clean-up call or similar liquidation under the pooling and servicing agreement for the trust that owns such Serviced Companion Loan, |
· | a Loss of Value Payment by a Mortgage Loan Seller, if such payment is made prior to the expiration of certain cure periods (including any applicable extension thereof) set forth in the Pooling and Servicing Agreement, and |
· | if a Mortgage Loan or Serviced Loan Combination becomes a Specially Serviced Loan only because of an event described in clause (i) of the definition of “Specially Serviced Loan” and the related Liquidation Proceeds are received within three (3) months following the related maturity date as a result of the related Mortgage Loan or Serviced Loan Combination being refinanced or otherwise repaid in full (provided that the Special Servicer may collect from the related borrower and retain (x) a liquidation fee, (y) such other fees as are provided for in the related Mortgage Loan Documents and (z) other appropriate fees in connection with such liquidation). |
If, however, Liquidation Proceeds are received with respect to any Specially Serviced Loan as to which the Special Servicer is properly entitled to a Workout Fee, such Workout Fee will be payable based on and out of the portion of such Liquidation Proceeds that constitute principal and/or interest. The Special Servicer, however, will only be entitled to receive a Liquidation Fee or a Workout Fee, but not both, with respect to Liquidation Proceeds received on any Mortgage Loan or Specially Serviced Loan.
If the Special Servicer resigns or is terminated, and prior or subsequent to such resignation or termination, either (A) a Specially Serviced Loan was liquidated or modified pursuant to an action plan submitted by the initial Special Servicer and approved (or deemed approved) by the Directing Holder or the Special Servicer has determined to grant a forbearance, or (B) a Specially Serviced Loan being monitored by the Special Servicer subsequently became a Corrected Mortgage Loan, then in either such event the Special Servicer (and not the successor special servicer) will be paid the related Workout Fee or Liquidation Fee, as applicable.
The total amount of Workout Fees and Liquidation Fees that are payable by the Issuing Entity with respect to each Mortgage Loan, Serviced Loan Combination or REO Loan throughout the period such Mortgage Loan or the Mortgage Loan relating to such Serviced Loan Combination (or REO Loan) is an asset of the Issuing Entity will be subject to an aggregate cap of $1,000,000. For the purposes of determining whether any such cap has been reached with respect to a Special Servicer and a Mortgage Loan, Serviced Loan Combination or REO Loan, only the Workout Fees and Liquidation Fees paid to such Special Servicer with respect to such Mortgage Loan, Serviced Loan Combination or REO Loan will be taken into account, and any Workout Fees or Liquidation Fees for any other Mortgage Loans, Serviced
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Loan Combinations or REO Loans will not be taken into account (and any Workout Fees or Liquidation Fees paid to a predecessor or successor special servicer will also not be taken into account).
In addition, the Special Servicer will also be entitled to retain, as additional servicing compensation:
· | (a) 100% of any Modification Fees related to Specially Serviced Loans, (b) 50% of any Modification Fees on Mortgage Loans (and the related Serviced Companion Loans) that are not Specially Serviced Loans which involve a Major Decision or Special Servicer Decision (whether or not processed by the Special Servicer) and (c) 0% of any Modification Fees on Mortgage Loans (and the related Serviced Companion Loans) that are not Specially Serviced Loans which do not involve a Major Decision or Special Servicer Decision, |
· | (a) 100% of any assumption fees and consent fees on Specially Serviced Loans, (b) 50% of any assumption fees on Mortgage Loans (and the related Serviced Companion Loans) that are not Specially Serviced Loans which involve a Major Decision or Special Servicer Decision (whether or not processed by the Special Servicer) and (c) 0% of any assumption fees on Mortgage Loans (and the related Serviced Companion Loans) that are not Specially Serviced Loans which do not involve a Major Decision or Special Servicer Decision, |
· | (a) 100% of any loan service transaction fees on Specially Serviced Loans, (b) 50% of any loan service transaction fees on Mortgage Loans (and the related Serviced Companion Loans) that are not Specially Serviced Loans which involve a Major Decision or Special Servicer Decision (whether or not processed by the Special Servicer) and (c) 0% of any loan service transaction fees on Mortgage Loans (and the related Serviced Companion Loans) that are not Specially Serviced Loans which do not involve a Major Decision or Special Servicer Decision, |
· | 100% of assumption application fees on Specially Serviced Loans, |
· | 100% of beneficiary statement charges, demand fees or similar items (but not including Prepayment Premiums or Yield Maintenance Charges) on Specially Serviced Loans, |
· | any interest or other income earned on deposits in the REO Accounts, |
· | Net Default Interest and any late payment fees that accrued during a Collection Period on any Specially Serviced Loan to the extent collected by the Issuing Entity and remaining after application thereof during such Collection Period to reimburse interest on Advances with respect to such Specially Serviced Loan and to reimburse the Issuing Entity for certain expenses of the Issuing Entity with respect to such Specially Serviced Loan; provided, however, that with respect to a Mortgage Loan that has a related Serviced Companion Loan, Net Default Interest and late payment fees will be allocated as provided in and subject to the terms of the related intercreditor agreement and the applicable pooling and servicing agreement, and |
· | (a) 100% of any fees paid in connection with any Major Decision or Special Servicer Decision with respect to a Specially Serviced Loan and (b) 50% of any fees paid in connection with any Major Decision or Special Servicer Decision with respect to a non-Specially Serviced Loan. |
In addition, provided that a Non-Serviced Mortgage Loan is in special servicing, the Special Servicer will be entitled to any Net Default Interest and any late payment fees collected by the master servicer or the special servicer of the Non-Serviced Mortgage Loan and that are allocated to the Non-Serviced Mortgage Loan (but only if and to the extent such amounts are not payable to the master servicer or the special servicer that is servicing the Non-Serviced Mortgage Loan pursuant to the terms of the related pooling and servicing agreement and any related intercreditor agreement) in accordance with the related intercreditor agreement and the related servicing agreement during a collection period remaining after application thereof to reimburse interest on P&I Advances on such Non-Serviced Mortgage Loan and to reimburse the Issuing Entity for certain expenses of the Issuing Entity with respect to such Non-Serviced Mortgage Loan, if applicable, as provided in the Pooling and Servicing Agreement.
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The special servicer with respect to each Non-Serviced Loan Combination will accrue comparable fees with respect to such Non-Serviced Loan Combination pursuant to the related servicing agreement.
“Modification Fees” means, with respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Companion Loan, any and all fees with respect to a modification, restructure, extension, waiver or amendment that modifies, restructures, extends, amends or waives any term of the related Mortgage Loan Documents (as evidenced by a signed writing) agreed to by the Master Servicer or the Special Servicer (other than all assumption fees, consent fees, assumption application fees, defeasance fees and similar fees). For each modification, restructure, extension, waiver or amendment in connection with the working out of a Specially Serviced Loan, the Modification Fees collected from the related borrower will be subject to a cap of 1% of the outstanding principal balance of such Mortgage Loan or Serviced Companion Loan on the closing date of the related modification, restructure, extension, waiver or amendment (prior to giving effect to such modification, restructure, extension, waiver or amendment);provided that no aggregate cap exists in connection with the amount of Modification Fees which may be collected from the borrower with respect to any Specially Serviced Loan or REO Loan.
“Offsetting Modification Fees” means, with respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan), Serviced Loan Combination or REO Loan and with respect to any Workout Fee or Liquidation Fee payable by the Issuing Entity, any and all Modification Fees collected by the Special Servicer as additional servicing compensation, but only to the extent that (1) such Modification Fees were earned and collected by the Special Servicer (A) in connection with the workout or liquidation (including partial liquidation) of a Specially Serviced Loan or REO Loan as to which the subject Workout Fee or Liquidation Fee became payable or (B) in connection with any workout of a Specially Serviced Loan that closed within the prior 18 months (determined as of the closing day of the workout or liquidation as to which the subject Workout Fee or Liquidation Fee became payable) and (2) such Modification Fees were earned in connection with a modification, restructure, extension, waiver or amendment of such Mortgage Loan, Serviced Loan Combination or REO Loan at a time when such Mortgage Loan, Serviced Loan Combination or REO Loan was a Specially Serviced Loan.
The Pooling and Servicing Agreement will provide that, with respect to each Collection Period, the Special Servicer must deliver on or before each related Determination Date to the Master Servicer, who will deliver, to the extent it has received, to the Certificate Administrator, without charge and on the same day as the Master Servicer is required to deliver the CREFC® Investor Reporting Package, an electronic report which discloses and contains an itemized listing of any Disclosable Special Servicer Fees received by the Special Servicer or any of its affiliates during the related Collection Period. Such report may omit any such information that has previously been delivered to the Certificate Administrator by the Master Servicer or the Special Servicer.
“Disclosable Special Servicer Fees” means, with respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan), Serviced Loan Combination or Serviced REO Property, any compensation and other remuneration (including, without limitation, in the form of commissions, brokerage fees, rebates, and as a result of any other fee-sharing arrangement) received or retained by the Special Servicer or any of its affiliates that is paid by any person (including, without limitation, the Issuing Entity, any borrower, any manager, any guarantor or indemnitor in respect of a Mortgage Loan or Serviced Loan Combination and any purchaser of any Mortgage Loan (other than a Non-Serviced Mortgage Loan), Serviced Loan Combination or Serviced REO Property) in connection with the disposition, workout or foreclosure of any Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Loan Combination, if applicable, the management or disposition of any Serviced REO Property, and the performance by the Special Servicer or any such affiliate of any other special servicing duties under the Pooling and Servicing Agreement;provided that any compensation and other remuneration that the Master Servicer or the Certificate Administrator is permitted to receive or retain pursuant to the terms of the Pooling and Servicing Agreement in connection with its respective duties in such capacity as master servicer or certificate administrator under the Pooling and Servicing Agreement will not be Disclosable Special Servicer Fees.
The Pooling and Servicing Agreement will provide that the Special Servicer and its affiliates will be prohibited from receiving or retaining any compensation or any other remuneration (including, without
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limitation, in the form of commissions, brokerage fees, rebates, or as a result of any other fee-sharing arrangement) from any person (including, without limitation, the Issuing Entity, any borrower, any manager, any guarantor or indemnitor in respect of a Mortgage Loan or Loan Combination and any purchaser of any Mortgage Loan, Serviced Companion Loan or Serviced REO Property) in connection with the disposition, workout or foreclosure of any Mortgage Loan (or Serviced Loan Combination, if applicable), the management or disposition of any Serviced REO Property, or the performance of any other special servicing duties under the Pooling and Servicing Agreement, other than Permitted Special Servicer/Affiliate Fees, compensation and other remuneration expressly provided for in the Pooling and Servicing Agreement.
“Permitted Special Servicer/Affiliate Fees” means any commercially reasonable treasury management fees, banking fees, customary title agent fees and insurance commissions and fees received or retained by the Special Servicer or any of its affiliates in connection with any services performed by such party with respect to any Mortgage Loan, Serviced Loan Combination or Serviced REO Property.
Master Servicer and Special Servicer Permitted To Buy Certificates
The Master Servicer and the Special Servicer are permitted to purchase any Class of Certificates. Such a purchase by the Master Servicer or Special Servicer could cause a conflict relating to the Master Servicer’s or Special Servicer’s duties pursuant to the Pooling and Servicing Agreement and the Master Servicer’s or Special Servicer’s interest as a holder of Certificates, especially to the extent that certain actions or events have a disproportionate effect on one or more Classes of Certificates. The Pooling and Servicing Agreement provides that the Master Servicer or the Special Servicer will administer the Mortgage Loans or Serviced Loan Combinations in accordance with the Servicing Standard, without regard to ownership of any Certificate by the Master Servicer or the Special Servicer or any affiliate thereof.
Servicing of the Non-Serviced Mortgage Loan
Pursuant to the terms of the related intercreditor agreement, the Non-Serviced Mortgage Loan will be serviced and administered pursuant to a separate pooling and servicing agreement, which will contain servicing provisions that may be different than the terms of the Pooling and Servicing Agreement. None of the Master Servicer, the Special Servicer or the Trustee will have any obligation or authority to supervise any other servicer, special servicer or trustee under the pooling and servicing agreement entered into in connection with any Non-Serviced Loan Combination, and no such party will have any obligation or authority to make Property Advances with respect to any Non-Serviced Mortgage Loan. The obligation of the Master Servicer to provide information and collections to the Trustee, the Certificate Administrator and the Certificateholders with respect to any Non-Serviced Mortgage Loan is dependent upon its receipt of the corresponding information and collections from the master servicer or special servicer under the applicable other securitization.
Each other pooling and servicing agreement related to a Non-Serviced Mortgage Loan is expected to contain terms and conditions that are customary for securitization transactions involving assets similar to the Non-Serviced Mortgage Loans and that are otherwise (i) required by the Code relating to the tax elections of the trust fund for the related Non-Serviced Companion Loan, (ii) required by law or changes in any law, rule or regulation or (iii) requested by the rating agencies rating the securitization of the related Non-Serviced Companion Loan. Such terms include, without limitation:
· | Each other master servicer and each other special servicer must satisfy customary servicer rating criteria and each other master servicer and each other special servicer are subject to servicer termination events, which may be different than those in the Pooling and Servicing Agreement. |
· | Each other master servicer will be entitled to receive a primary servicing fee on the related Non-Serviced Mortgage Loan. |
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· | For so long as no control termination event or similar event under each other pooling and servicing agreement is continuing, the directing holder or equivalent party under such other pooling and servicing agreement, or the related representative on its behalf, will have the right to terminate the related other special servicer, with or without cause, and appoint itself or an affiliate or another person as the successor special servicer. |
· | Each other pooling and servicing agreement may make a provision for a vote of certificateholders of the other securitization to terminate the related other special servicer, and for the appointment of a successor special servicer, at the written direction of holders of principal balance certificates under such agreement evidencing a certain percentage of the voting rights of such certificates. |
· | For so long as a consultation termination event or similar event under each other pooling and servicing agreement is continuing, if the related other trust advisor determines that the related other special servicer is not performing its duties under such other pooling and servicing agreement in accordance with the related servicing standard, such other trust advisor has the right to recommend the replacement of such other special servicer. |
· | The provisions of any other pooling and servicing agreement may vary from the Pooling and Servicing Agreement with respect to time periods and timing matters, terminology, allocation of ministerial duties between multiple servicers or other service providers, and notice or rating agency communication and confirmation requirements. |
The Non-Serviced Mortgage Loan will not be subject to the Servicing Transfer Events described above under “—Special Servicing,” but will be subject to generally similar but not identical events provided for in the related other pooling and servicing agreement. In addition, the conditions that would result in an Appraisal Reduction Event under the Pooling and Servicing Agreement may differ in some respects from the conditions that would require an appraisal under any pooling and servicing agreement governing the servicing of a Non-Serviced Loan Combination.
See “Description of the Mortgage Pool—Loan Combinations” in this free writing prospectus.
Reports to Certificateholders; Available Information
Certificate Administrator Reports
On each Distribution Date, the Certificate Administrator will be required to make available to the general public on the Certificate Administrator’s website a statement (a “Distribution Date Statement”) based upon information provided by the Master Servicer and Special Servicer (and in certain cases only to the extent received from the Master Servicer or Special Servicer, as applicable) and delivered to the Certificate Administrator and the information required to be prepared by the Certificate Administrator, in accordance with CRE Finance Council (“CREFC®”) guidelines as of the Closing Date setting forth, among other things:
(a) the Record Date, Interest Accrual Period, and Determination Date for such Distribution Date;
(b) the aggregate amount of the distribution on the Distribution Date to the holders of each Class of Sequential Pay Certificates in reduction of the Certificate Balance of those Certificates;
(c) the aggregate amount of the distribution on the Distribution Date to the holders of each Class of Certificates (other than the Residual Certificates) allocable to the Interest Accrual Amount and Interest Shortfalls;
(d) the aggregate amount of Advances made in respect of the Distribution Date and the amount of interest paid on Advances since the prior Distribution Date (including, to the extent material, the general use of funds advanced and general source of funds for reimbursements);
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(e) the aggregate amount of compensation paid to the Trustee, the Certificate Administrator, the Operating Advisor, CREFC® and servicing compensation paid to the Master Servicer and the Special Servicer for the related Determination Date and any other fees or expenses accrued and paid from the Issuing Entity;
(f) the aggregate Stated Principal Balance of the Mortgage Loans and any REO Loans outstanding immediately before and immediately after the Distribution Date;
(g) the number (as of the related and the next preceding Determination Date), and the aggregate principal balance, weighted average remaining term to maturity and weighted average mortgage rate (and interest rates by distributional groups or ranges) of the Mortgage Loans as of the related Determination Date;
(h) the number and aggregate Stated Principal Balance of the Mortgage Loans or Serviced Loan Combinations (A) delinquent 30-59 days, (B) delinquent 60-89 days, (C) delinquent 90 days or more, (D) that are specially serviced but that are not delinquent, or (E) current, but not specially serviced, as to which foreclosure proceedings have been commenced, but not REO Property;
(i) the Available Funds for the Distribution Date, (ii) the total amount of all principal and/or interest distributions, as well as any other distributions (other than Yield Maintenance Charges), properly made on or in respect of any Class of Regular Certificates with respect to such Distribution Date, and (iii) any other cash flows received on the Mortgage Loans and applied to pay fees and expenses (including the components of the Available Funds, or such other cash flows);
(j) the amount of the distribution on the Distribution Date to the holders of any Class of Regular Certificates allocable to Prepayment Premiums and Yield Maintenance Charges;
(k) the accrued Interest Accrual Amount in respect of each Class of Regular Certificates for such Distribution Date;
(l) the Pass-Through Rate for each Class of Regular Certificates for the Distribution Date;
(m) the Principal Distribution Amount for the Distribution Date;
(n) the aggregate Certificate Balance or aggregate Notional Balance, as the case may be, of each Class of Certificates (other than the Class V, Class R and Class LR Certificates) immediately before and immediately after the Distribution Date, separately identifying any reduction in these amounts as a result of the allocation of any Realized Loss and/or additional trust fund expenses on the Distribution Date;
(o) the fraction, expressed as a decimal carried to at least eight places, the numerator of which is the then related Certificate Balance, and the denominator of which is the related initial aggregate Certificate Balance, for each Class of Certificates (other than the Residual Certificates) immediately following the Distribution Date;
(p) the amount of any Appraisal Reduction Amounts allocated during the related Collection Period on a loan-by-loan basis; and the total Appraisal Reduction Amounts as of such Distribution Date on a loan-by-loan basis;
(q) the number and related principal balances of any Mortgage Loans modified, extended or waived on a loan-by-loan basis since the previous Determination Date (including a description of any material modifications, extensions or waivers to Mortgage Loan terms, fees, penalties or payments during the Collection Period or that have cumulatively become material over time);
(r) the amount of any remaining unpaid Interest Shortfalls for each Class of Certificates (other than the Residual Certificates) as of the Distribution Date;
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(s) a loan-by-loan listing of each Mortgage Loan which was the subject of a principal prepayment (other than liquidation proceeds and insurance proceeds) during the related Collection Period and the amount of principal prepayment occurring, together with the aggregate amount of principal prepayments made during the related Collection Period;
(t) a loan-by-loan listing of any Mortgage Loan which was defeased since the previous Determination Date;
(u) the amount of the distribution to the holders of each Class of Certificates on the Distribution Date attributable to reimbursement of Realized Losses;
(v) as to any Mortgage Loan repurchased by a Mortgage Loan Seller or otherwise liquidated or disposed of during the related Collection Period, (A) the loan number of the related Mortgage Loan and (B) the amount of proceeds of any repurchase of a Mortgage Loan, Liquidation Proceeds and/or other amounts, if any, received thereon during the related Collection Period and the portion thereof included in the Available Funds for such Distribution Date;
(w) the amount on deposit in each of the Interest Reserve Account and the Excess Liquidation Proceeds Account before and after giving effect to the distribution made on such Distribution Date (and any material account activity since the prior Distribution Date);
(x) the then-current credit support levels for each Class of Sequential Pay Certificates;
(y) the original and then-current ratings of each Class of Certificates (other than the Class R and Class LR Certificates);
(z) with respect to any REO Loan as to which the related Mortgaged Property became an REO Property during the preceding calendar month, the city, state, property type, latest Debt Service Coverage Ratio and the current Stated Principal Balance;
(aa) the value of any REO Property included in the Issuing Entity as of the related Determination Date, on an loan-by-loan basis, based on the most recent appraisal or valuation;
(bb) with respect to any Serviced REO Property sold or otherwise disposed of during the related Collection Period and for which a final recovery determination has been made, (A) the Realized Loss attributable to the related Mortgage Loan, (B) the amount of sale proceeds and other amounts, if any, received in respect of such Serviced REO Property during the related Collection Period and the portion thereof included in the Available Funds for such Distribution Date, (C) the date of the final recovery determination and (D) the balance of the Excess Liquidation Proceeds Account for such Distribution Date;
(cc) the amount of the distribution on the Distribution Date to the holders of the Class V Certificates and the Residual Certificates;
(dd) material breaches of Mortgage Loan representations and warranties or any covenants under the Pooling and Servicing Agreement of which the Certificate Administrator, the Trustee, the Operating Advisor, the Master Servicer or the Special Servicer has received written notice;
(ee) the identity of the Operating Advisor;
(ff) the amount of Realized Losses, certain expenses of the Issuing Entity and Interest Shortfalls, if any, incurred with respect to the Mortgage Loans during the related Collection Period and in the aggregate for all prior Collection Periods (except to the extent reimbursed or paid);
(gg) an itemized listing of any Disclosable Special Servicer Fees received by the Special Servicer or any of its affiliates during the related Collection Period;
(hh) the identity of the Controlling Class;
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(ii) the identity of the Controlling Class Representative; and
(jj) such other information and in such form as will be specified in the Pooling and Servicing Agreement.
In addition, the Certificate Administrator may make certain other information and reports (including the collection of reports specified by the CREFC® (or any successor organization reasonably acceptable to the Certificate Administrator and the Master Servicer) known as the “CREFC® Investor Reporting Package”) related to the Mortgage Loans available to Privileged Persons, to the extent that the Certificate Administrator receives relevant information and loan-related reports from the Master Servicer, and direction from the Depositor, or is otherwise directed to do so under the Pooling and Servicing Agreement. The Certificate Administrator will not make any representations or warranties as to the accuracy or completeness of any information provided by it that was based; in whole or in part, on information received from third parties, and may disclaim responsibility for the Certificate Administrator’s website. The Certificate Administrator may require registration and acceptance of a disclaimer and a confidentiality agreement. Neither the Certificate Administrator nor the Master Servicer will be liable for the dissemination of information made in accordance with the Pooling and Servicing Agreement.
Information Available Electronically
The Pooling and Servicing Agreement requires that the Certificate Administrator make available to any Privileged Person (provided that the free writing prospectus, the final prospectus supplement that relates to the Offered Certificates, the Distribution Date Statements and the SEC filings referred to below will be made available to the general public, and provided further that any Privileged Person that is a Borrower Party will only be entitled to access documents made available to the general public), via the Certificate Administrator’s website, among other things, the following items, in each case to the extent received by or, in certain cases, prepared by, the Certificate Administrator:
(a) the following “deal documents”:
· | the final prospectus supplement that relates to the Offered Certificates; |
· | the Pooling and Servicing Agreement, each sub-servicing agreement delivered to the Certificate Administrator from and after the Closing Date, if any, and the Mortgage Loan Purchase Agreements and any amendments and exhibits to those agreements; and |
· | the CREFC® loan setup file delivered to the Certificate Administrator by the Master Servicer; |
(b) the following SEC filings:
· | any reports on Forms 10-D, 10-K and 8-K that have been filed by the Certificate Administrator with respect to the Issuing Entity through the EDGAR system; |
(c) the following “periodic reports”:
· | the Distribution Date Statements; |
· | the reports included in the CREFC® Investor Reporting Package, other than the CREFC® loan setup file (provided they are prepared or received by the Certificate Administrator); and |
· | the annual reports prepared by the Operating Advisor; |
(d) the following “additional documents”:
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· | summaries of Final Asset Status Reports delivered to the Certificate Administrator in electronic format; and |
· | any appraisal, Phase I environmental assessment, Phase II environmental assessment, seismic report and property condition report relating to the Mortgaged Properties (or updates thereof) delivered to the Certificate Administrator in electronic format; |
(e) the following “special notices”:
· | all special notices sent by the Certificate Administrator to the Certificateholders as described in “Description of the Offered Certificates—Certificateholder Communication—Special Notices” in this free writing prospectus; |
· | notice of (i) any request by at least 25% of the Certificates to terminate and replace the Special Servicer notice, (ii) any request by at least 15% of the Voting Rights of the Certificates to terminate and replace the Operating Advisor, (iii) any recommendation of the Operating Advisor to replace the Special Servicer; |
· | notice of any waiver, modification or amendment of any term of any Mortgage Loan; |
· | notice of final payment on the Certificates; |
· | all notices of the occurrence of any Servicer Termination Events received by the Certificate Administrator; |
· | notice of termination or resignation of the Master Servicer, the Special Servicer, the Operating Advisor or the Trustee (and appointments of successors to the Master Servicer, the Special Servicer, the Operating Advisor or the Trustee); |
· | officer’s certificates and other documentation supporting any determination that any Advance was (or, if made, would be) a Nonrecoverable Advance; |
· | any notice of the termination of the Issuing Entity; |
· | any notice of the occurrence and continuance of a Control Termination Event; |
· | any notice of the occurrence and continuance of a Consultation Termination Event; |
· | any Assessment of Compliance (as defined in the prospectus) delivered to the Certificate Administrator; and |
· | any Attestation Reports (as defined in the prospectus) delivered to the Certificate Administrator; |
(f) the “Investor Q&A Forum”; and
(g) solely to Certificateholders and beneficial owners of Certificates, the “Investor Registry.”
Notwithstanding the foregoing, if the Controlling Class Representative or any Controlling Class Certificateholder is a Borrower Party with respect to any related Excluded Controlling Class Mortgage Loan (such party, an “Excluded Controlling Class Holder” with respect to such Excluded Controlling Mortgage Loan only), such Excluded Controlling Class Holder is required to promptly notify each of the Master Servicer, Special Servicer, Operating Advisor, Trustee and Certificate Administrator pursuant to the Pooling and Servicing Agreement and provide a new investor certification pursuant to the Pooling and Servicing Agreement and will not be entitled to access any Excluded Information (as defined below) with respect to such related Excluded Controlling Class Mortgage Loan. The Pooling and Servicing
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Agreement will require each Excluded Controlling Class Holder in such new investor certification to certify that it acknowledges and agrees that it is prohibited from accessing and reviewing (and it agrees not to access and review) any Excluded Information. In addition, if the Controlling Class Representative or any Controlling Class Certificateholder is not an Excluded Controlling Class Holder, such person will certify and agree that they will not share any Excluded Information with any Excluded Controlling Class Holder.
“Excluded Information” means, with respect to any Excluded Controlling Class Mortgage Loan, any information and reports solely relating to such Excluded Controlling Class Mortgage Loan(s) and/or the related Mortgaged Properties, including, without limitation, any Asset Status Reports, Final Asset Status Reports or summaries thereof, or any appraisals, inspection reports (related to Specially Serviced Loans conducted by the Special Servicer), recoverability officer’s certificates, the Operating Advisor Annual Reports, any determination of the Special Servicer’s net present value calculation, any appraisal reduction amount calculations, environmental assessments, seismic reports and property condition reports and such other information and reports designated as Excluded Information (other than such information with respect to such Excluded Controlling Class Mortgage Loan(s) that is aggregated with information of other Mortgage Loans at a pool level). For the avoidance of doubt, any file or report contained in the CREFC® Investor Reporting Package (CREFC® IRP) (other than the CREFC® Special Servicer Loan File relating to any Excluded Controlling Class Mortgage Loan) will not be considered “Excluded Information”.
The Certificate Administrator may require a recipient of any of the information set forth above to execute a confidentiality agreement (which may be in the form of a web page “click-through”).
The Certificate Administrator will make the “Investor Q&A Forum” available to Privileged Persons via the Certificate Administrator’s website, where (a) Certificateholders and beneficial owners of Certificates may (i) submit inquiries to the Certificate Administrator relating to the Distribution Date Statement, (ii) submit inquiries to the Master Servicer or the Special Servicer relating to servicing reports, the Mortgage Loans or the Mortgaged Properties (other than any Non-Serviced Mortgage Loan or related Mortgaged Property) and (iii) submit inquiries to the Operating Advisor relating to its annual reports or actions by the Master Servicer or the Special Servicer as to which the Operating Advisor has consultation rights, whether or not referenced in such annual reports and (b) Privileged Persons may view previously submitted inquiries and related answers. The Certificate Administrator will forward such inquiries to the appropriate parties and, in the case of an inquiry relating to a Non-Serviced Mortgage Loan, to the applicable party under the related other pooling and servicing agreement. The Certificate Administrator, the Operating Advisor, the Master Servicer or the Special Servicer, as applicable, will be required to answer each inquiry, unless it determines that (i) the question is beyond the scope outlined above, (ii) answering the inquiry would not be in the best interests of the Issuing Entity and/or the Certificateholders, would be in violation of applicable law, the Pooling and Servicing Agreement or the Mortgage Loan Documents, would or is reasonably expected to result in a waiver of an attorney-client privilege or the disclosure of attorney work product, or would materially increase the duties of, or result in significant additional cost or expense to, the Certificate Administrator, the Operating Advisor the Master Servicer or the Special Servicer, as applicable, or (iii) it is otherwise not advisable to answer such inquiry, in which case the Certificate Administrator will not post the related inquiry. In addition, no party is permitted to post or otherwise disclose information known to such party to be Privileged Information as part of its response to any inquiry. The Certificate Administrator will be required to post the inquiries and related answers on the Investor Q&A Forum, subject to and in accordance with the Pooling and Servicing Agreement.
The Investor Q&A Forum may not reflect questions, answers and other communications that are not submitted through the Certificate Administrator’s website. Answers posted on the Investor Q&A Forum will be attributable only to the respondent, and no other person will certify as to the accuracy, or will have any responsibility or liability for the content of any such information.
Certificateholders and beneficial owners may register on a voluntary basis for the “Investor Registry” and obtain contact information for any other Certificateholder or beneficial owner that has also registered,provided that they comply with certain requirements as provided for in the Pooling and Servicing Agreement.
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The Certificate Administrator’s website will initially be located atwww.ctslink.com. The 17g-5 Information Provider’s website will initially be located under the Certificate Administrator’s website under the “NRSRO” tab related to the Certificates. Access will be provided by the Certificate Administrator and the 17g-5 Information Provider, as the case may be, to such persons upon its receipt from such person of an Investor Certification or NRSRO Certification in the forms attached to the Pooling and Servicing Agreement, which forms will also be located on and submitted electronically via the Certificate Administrator’s website or the 17g-5 Information Provider’s website, as applicable. In connection with providing access to the Certificate Administrator’s website and the 17g-5 Information Provider’s website, the Certificate Administrator and/or the 17g-5 Information Provider may require registration and the acceptance of a disclaimer. The Certificate Administrator and the 17g-5 Information Provider, as the case may be, will not be liable for the dissemination of information in accordance with the terms of the Pooling and Servicing Agreement. Neither the Certificate Administrator nor the 17g-5 Information Provider make any representations or warranties as to the accuracy or completeness of documents or information posted to its respective website and neither party will assume any responsibility for them. In addition, the Certificate Administrator and the 17g-5 Information Provider, as the case may be, may disclaim responsibility for any such document or information for which it is not the original source. Assistance in using the Certificate Administrator’s website and the 17g-5 Information Provider’s website can be obtained by calling the Certificate Administrator’s customer service desk at (866) 846-4526. The Certificate Administrator and the 17g-5 Information Provider have not obtained and will not be deemed to have obtained actual knowledge of any information only by receipt and posting to the 17g-5 Information Provider’s website;provided that this sentence will not apply to any information received by the Certificate Administrator as notice party under the Pooling and Servicing Agreement.
“Privileged Person” means the Depositor, the Underwriters, the initial purchasers, the Master Servicer, the Special Servicer, the Excluded Special Servicer, if any, each Serviced Companion Loan noteholder, the Controlling Class Representative (but only for so long as no Consultation Termination Event has occurred and is continuing), the Trustee, the Sponsors, the Certificate Administrator, the Operating Advisor, a designee of the Depositor, any person who provides the Certificate Administrator with an Investor Certification and any NRSRO that delivers an NRSRO Certification to the 17g-5 Information Provider, which Investor Certification and NRSRO Certification may be submitted electronically via the Certificate Administrator’s website or the 17g-5 Information Provider’s website, as applicable;provided that in no event may a borrower, a manager of a Mortgaged Property, an affiliate, principal, partner, member, joint venturer, limited partner, employee, representative, director, advisor or investor in any of the foregoing or an agent of any of the foregoing be considered a Privileged Person;provided,further, that any Excluded Controlling Class Holder solely with respect to the related Excluded Controlling Class Mortgage Loan will not be considered a Privileged Person. The Controlling Class Representative, each Controlling Class Certificateholder and the Special Servicer will be considered a Privileged Person with respect to any Mortgage Loans or Serviced Loan Combinations for which it is not then a Borrower Party, and the limitations on access to information set forth in the Pooling and Servicing Agreement will apply only with respect the related Mortgage Loan for which the applicable party is a Borrower Party and only with respect to the related Excluded Information.
“Investor Certification” means a certificate substantially in the form attached to the Pooling and Servicing Agreement or as electronically available on the Certificate Administrator’s website (which may be a click through confirmation) representing that the person executing the certificate (1) is a Certificateholder, a beneficial owner of a Certificate or a prospective purchaser of a Certificate that, in the case of an Offered Certificate, has received a copy of the final prospectus supplement and the prospectus and either (2)(A) is not a borrower, a manager of a Mortgaged Property or an affiliate, principal, partner, member, joint venturer, limited partner, employee, representative, director, advisor or investor in any of the foregoing or an agent of any of the foregoing or, in the case of the Controlling Class Representative or any Controlling Class Certificateholder, such person is not a Borrower Party, in which case such person will have access to all the reports and information made available to Certificateholders under the Pooling and Servicing Agreement, or (B) such person is a Borrower Party, in which case (1) if such person is the Controlling Class Representative or a beneficial owner of a Controlling Class Certificate, such person will not have access to the related Excluded Information, or (2) if such person is not the Controlling Class Representative or a beneficial owner of a Controlling Class Certificate, in which case such person will
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only receive access to the Distribution Date Statements prepared by the Certificate Administrator’s website.
“NRSRO Certification” means a certification (a) executed by an NRSRO in favor of the 17g-5 Information Provider substantially in the form attached to the Pooling and Servicing Agreement or (b) provided electronically and executed by an NRSRO by means of a “click-through” confirmation on the 17g-5 Information Provider’s website that, in each case, states that such NRSRO is a Rating Agency hired to provide ratings on the Certificates, or that such NRSRO has access to the 17g-5 website for the Issuing Entity, has provided the 17g-5 Information Provider with the appropriate certifications under Rule 17g-5(e), and will treat all information obtained from the 17g-5 Information Provider’s website as confidential.
“17g-5 Information Provider” means the Certificate Administrator.
Other Information
The Pooling and Servicing Agreement will require that the Certificate Administrator make available at its offices, during normal business hours, for review by any Privileged Person, originals or copies of, among other things, the following items (to the extent such items are in its possession) (except to the extent not permitted by applicable law or under any of the related Mortgage Loan Documents):
(a) any and all notices and reports delivered to the Certificate Administrator with respect to any Mortgaged Property as to which the environmental testing revealed certain environmental issues;
(b) the most recent annual (or more frequent, if available) operating statements, rent rolls (to the extent such rent rolls have been made available by the related borrower) and/or lease summaries and retail “sales information,” if any, received from the Master Servicer or the Special Servicer with respect to each Mortgaged Property;
(c) the mortgage files, including any and all modifications, waivers and amendments of the terms of a Mortgage Loan or Serviced Loan Combination entered into or consented to by the Master Servicer and/or the Special Servicer and delivered to the Certificate Administrator; and
(d) any other information that may be necessary to satisfy the requirements of subsection (d)(4)(i) of Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”).
The Certificate Administrator may require a Privileged Person to execute a confidentiality agreement prior to granting access to the information described above. Copies of any and all of the foregoing items will be available upon request at the expense of the requesting party from the Certificate Administrator to the extent such documents are in the Certificate Administrator’s possession.
The Certificate Administrator will make available all Distribution Date Statements, CREFC® reports and supplemental notices (provided they are received by the Certificate Administrator) to certain financial modeling firms (including BlackRock Financial Management, Inc., Bloomberg Financial Markets, L.P., Trepp, LLC, Intex Solutions, Inc., Interactive Data Corporation, Markit LLC and Thompson Reuters Corporation) in accordance with the provisions of the Pooling and Servicing Agreement.
Master Servicer’s Reports
The Master Servicer is required to deliver to the Certificate Administrator prior to each Distribution Date (beginning November 2015), and the Certificate Administrator is to make available to any Privileged Person on its website certain reports and data files that are part of the CREFC® Investor Reporting Package.
Subject to the receipt of necessary information from any subservicer, reports will be made available electronically in the form of the standard CREFC® reports;provided,however, the Certificate Administrator will provide Certificateholders (at the expense of such Certificateholders) with a written copy
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of such report upon request. The information that pertains to Specially Serviced Loans and REO Properties reflected in such reports shall be based solely upon the reports delivered by the Special Servicer to the Master Servicer no later than the Determination Date. Absent manifest error, none of the Master Servicer, the Special Servicer, the Certificate Administrator or the Trustee will be responsible for the accuracy or completeness of any information supplied to it by a borrower or third party that is included in any reports, statements, materials or information prepared or provided by the Master Servicer, the Special Servicer, the Certificate Administrator or the Trustee, as applicable.
The Trustee, the Certificate Administrator, the Master Servicer and the Special Servicer will be indemnified by the Issuing Entity against any loss, liability or expense incurred in connection with any claim or legal action relating to any statement or omission based upon information supplied by a borrower or third party under a Mortgage Loan or Serviced Loan Combination and reasonably relied upon by such party.
The Master Servicer is also required to deliver periodically to the Trustee, Certificate Administrator, the Operating Advisor, the Underwriters, the initial purchasers, the 17g-5 Information Provider (who will promptly post such materials to the 17g-5 Information Provider’s website) and the holders of Serviced Companion Loans the following materials, of which the CREFC® Operating Statement Analysis Report and CREFC® NOI Adjustment Worksheet are required to be delivered in electronic format and any items relating to such report or worksheet may be delivered in electronic or paper format:
(a) Within 30 days after receipt of a quarterly operating statement, if any, commencing within 30 days of receipt of such quarterly operating statement for the quarter ending March 31, 2016, with respect to each Mortgage Loan (other than a Non-Serviced Mortgage Loan), Specially Serviced Loan and REO Loan (to the extent prepared by and received from the Special Servicer in the case of any Specially Serviced Loan or REO Loan), “CREFC® Operating Statement Analysis Report” together with copies of the related operating statements and rent rolls (but only to the extent the related borrower is required by the Mortgage to deliver, or has otherwise agreed to provide such information and, with respect to operating statements and rent rolls for Specially Serviced Loans and REO Properties, only to the extent received by the Special Servicer) for such Mortgaged Property or REO Property as of the end of such calendar quarter;provided that, to the extent the annual CREFC® Operating Statement Analysis Report is delivered as described under clause (b) below, then such delivery will satisfy the requirement under this clause (a) to deliver a quarterly CREFC® Operating Statement Analysis Report for the quarter ending June 30 of each year, commencing in 2016;provided, however, that, with respect to any obligation of the Master Servicer or Special Servicer, as applicable, to provide a year-end or quarterly analysis or update, such analysis or update will not be required to the extent such analysis or update is not required to be provided in the then-current applicable CREFC® guidelines.
(b) Annually, on or before June 30 of each year, commencing in 2016, with respect to each Mortgage Loan (other than a Non-Serviced Mortgage Loan), Specially Serviced Loan and REO Loan (to the extent prepared by and received from the Special Servicer in the case of any Specially Serviced Loan or REO Loan), a CREFC® Operating Statement Analysis Report as of the end of the preceding calendar year (initially, year-end 2015) together with copies of the related operating statements and rent rolls (but only to the extent the related borrower is required by the Mortgage to deliver, or has otherwise agreed to provide such information and, with respect to operating statements and rent rolls for Specially Serviced Loans and REO Properties, only to the extent received by the Special Servicer) for such Mortgaged Property or REO Property for the current trailing 12 months, if available, or year-to-date.
(c) Within 45 days of receipt by the Master Servicer (or within 60 days of receipt by the Special Servicer with respect to any Specially Serviced Loan (other than a Non-Serviced Mortgage Loan) or Serviced REO Property) of annual year-end operating statements, if any (in each case, commencing with the statements for year end 2015), with respect to any Mortgaged Property or Serviced REO Property, a “CREFC® NOI Adjustment Worksheet” for such Mortgaged Property or Serviced REO Property (with the annual year-end operating statements attached thereto as an exhibit), presenting the computations made in accordance with the methodology described in the Pooling and Servicing Agreement to “normalize” the full year-end net operating income or net cash flow and debt service coverage numbers used by the Master Servicer or the Special Servicer in the other reports referenced above.
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Upon request for receipt of any such items from any Rating Agency, the Master Servicer shall forward to the 17g-5 Information Provider (who will promptly post such requested item to the 17g-5 Information Provider’s website).
In addition, within a reasonable period of time after the end of each calendar year, the Certificate Administrator is required to send to each person who at any time during the calendar year was a Certificateholder of record, a report summarizing on an annual basis (if appropriate) certain items provided to Certificateholders in the monthly Distribution Date Statements and such other information as may be reasonably required to enable such Certificateholders to prepare their federal income tax returns. The Certificate Administrator will also make available information regarding the amount of original issue discount accrued on each Class of Certificate held by persons other than holders exempted from the reporting requirements and information regarding the expenses of the Issuing Entity.
Exchange Act Filings
The Issuing Entity will file Distribution Reports on Form 10-D, Annual Reports on Form 10-K and (if applicable) Current Reports on Form 8-K with the SEC regarding the Certificates, to the extent, and for such time, as it shall be required to do so pursuant to Rule 15d-22 under the Exchange Act. Such reports will be filed under the name “Deutsche Mortgage & Asset Receiving Corp.” (SEC File No. 333-193376). Members of the public may read and copy any materials filed with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Members of the public may obtain information regarding the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address of that internet site ishttp://www.sec.gov.
Governing Law; Waiver of Jury Trial; and Consent to Jurisdiction
The Pooling and Servicing Agreement will be governed by the laws of the State of New York. Each party to the Pooling and Servicing Agreement will waive its respective right to a jury trial for any claim or cause of action based upon or arising out of or related to the Pooling and Servicing Agreement. Additionally each party to the Pooling and Servicing Agreement will consent to the jurisdiction of any New York State and Federal courts sitting in New York City with respect to matters arising out of or related to the Pooling and Servicing Agreement.
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
General
The following is a general discussion of the anticipated material federal income tax consequences of the purchase, ownership and disposition of the Offered Certificates. The discussion below does not purport to address all federal income tax consequences that may be applicable to particular categories of investors (such as banks, insurance companies, securities dealers, foreign persons, investors whose functional currency is not the U.S. dollar, and investors that hold the Offered Certificates as part of a “straddle” or “conversion transaction”), some of which may be subject to special rules. The authorities on which this discussion is based are subject to change or different interpretations, and any such change or interpretation could apply retroactively. This discussion is based on the Code, as well as regulations (the “REMIC Regulations”) promulgated by the U.S. Department of the Treasury and the IRS. Investors are encouraged to consult their own tax advisors in determining the federal, state, local or any other tax consequences to them of the purchase, ownership and disposition of the Offered Certificates and are encouraged to review the discussions under the heading “Federal Income Tax Consequences for REMIC Certificates” in the prospectus.
Two separate real estate mortgage investment conduit (“REMIC”) elections (the “Lower-Tier REMIC” and the “Upper-Tier REMIC,” and collectively, the “Trust REMICs”) will be made with respect to the
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designated portions of the Issuing Entity. The Lower-Tier REMIC will hold the Mortgage Loans (other than Excess Interest) and certain other assets, will issue certain classes of regular interests (the “Lower-Tier Regular Interests”) to the Upper-Tier REMIC and will issue a sole class of residual interests in the Lower-Tier REMIC, represented by the Class LR Certificates. The Upper-Tier REMIC will hold the Lower-Tier Regular Interests and will issue the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class X-A, Class X-B, Class X-C, Class X-D, Class X-E, Class X-F, Class A-M, Class B, Class C, Class D, Class E, Class F, Class G and Class H Certificates as regular interests in the Upper-Tier REMIC and the Class R Certificates as the sole class of residual interests in the Upper-Tier REMIC.
Qualification as a REMIC requires ongoing compliance with certain conditions. Assuming (i) the making of appropriate elections, (ii) compliance with the Pooling and Servicing Agreement and the Intercreditor Agreements, (iii) compliance with the MAD 2015-11MD Trust and Servicing Agreement, and the continued qualification of all REMICs formed thereunder, and (iv) compliance with any changes in the law, including any amendments to the Code or applicable Treasury regulations thereunder, in the opinion of Cadwalader, Wickersham & Taft LLP, counsel to the Depositor: (a) each Trust REMIC will qualify as a REMIC on the Closing Date and thereafter; (b) each Lower-Tier Regular Interest will constitute a “regular interest” in the Lower-Tier REMIC and each of the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class X-A, Class X-B, Class X-C, Class X-D, Class X-E, Class X-F, Class A-M, Class B, Class C, Class D, Class E, Class F, Class G and Class H Certificates will constitute a “regular interest” in the Upper-Tier REMIC; and (c) the Class LR Certificates will evidence the sole Class of “residual interests” in the Lower-Tier REMIC, and the Class R Certificates will evidence the sole class of “residual interests” in the Upper-Tier REMIC. In addition, in the opinion of Cadwalader, Wickersham & Taft LLP, (i) the portion of the Issuing Entity consisting of the Excess Interest (and related amounts in the Class V Distribution Account), will be treated as a grantor trust (the “Grantor Trust”) for federal income tax purposes under subpart E, part I of subchapter J of the Code and (ii) the Class V Certificates will represent undivided beneficial interests in the Excess Interest and the Class V Distribution Account.
Tax Status of Offered Certificates
Each Class of Offered Certificates held by a real estate investment trust will constitute “real estate assets” within the meaning of Code Section 856(c)(5)(B), and interest on the Offered Certificates will be considered “interest on obligations secured by mortgages on real property or on interests in real property” within the meaning of Code Section 856(c)(3)(B) to the extent described in the prospectus under the heading “Federal Income Tax Consequences For REMIC Certificates—Status of REMIC Certificates.” Offered Certificates held by a domestic building and loan association will be treated as “loans . . . secured by an interest in real property which is . . . residential real property” within the meaning of Code Section 7701(a)(19)(C)(v) or as other assets described in Code Section 7701(a)(19)(C), but only in the proportion that the applicable Trust REMIC’s basis in the related Mortgage Loans secured by multifamily properties relates to the Trust REMIC’s total basis in the Mortgage Loans. As of the Closing Date, 29 of the Mortgaged Properties, representing approximately 36.6% of the Trust REMIC’s basis in the Initial Outstanding Pool Balance (by Allocated Loan Amount), are multifamily properties. Certificateholders should consult their own tax advisors as to whether the foregoing percentage or some other percentage applies to their Certificates. Offered Certificates held by certain financial institutions will constitute an “evidence of indebtedness” within the meaning of Code Section 582(c)(1). In addition, Mortgage Loans that have been defeased with U.S. Treasury obligations or other “government securities” will not qualify for the foregoing tax treatments. Moreover, the Offered Certificates will be “qualified mortgages” for another REMIC within the meaning of Code Section 860G(a)(3).
Taxation of Offered Certificates
General.The Offered Certificates will represent regular interests in the Upper-Tier REMIC. In general, interest, original issue discount and market discount on an Offered Certificate will be treated as ordinary income to the holder of an Offered Certificate (an “Offered Certificateholder”), and principal payments on an Offered Certificate will be treated as a return of capital to the extent of the Offered Certificateholder’s basis in the Offered Certificate. The Offered Certificates will represent newly originated debt instruments for federal income tax purposes. Offered Certificateholders must use the
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accrual method of accounting with regard to the Offered Certificates, regardless of the method of accounting otherwise used by such Offered Certificateholders.
Original Issue Discount. Holders of Offered Certificates issued with original issue discount generally must include original issue discount in ordinary income for federal income tax purposes as it accrues in accordance with the constant yield method, which takes into account the compounding of interest, in advance of receipt of the cash attributable to such income. The Internal Revenue Service has issued temporary and final Treasury regulations (the “OID Regulations”) under Code Sections 1271 through 1273 and 1275 and in part on the provisions of the 1986 Act. Offered Certificateholders should be aware, however, that the OID Regulations do not adequately address certain issues relevant to prepayable securities, such as the Offered Certificates. Investors are encouraged to consult their own tax advisors about the discussions in this free writing prospectus and the prospectus and the appropriate method for reporting interest and original issue discount with respect to the Offered Certificates. See “Federal Income Tax Consequences for REMIC Certificates—Taxation of Regular Certificates—Original Issue Discount” in the prospectus.
Each Offered Certificate will be treated as an installment obligation for purposes of determining the original issue discount includible in an Offered Certificateholder’s income. The total amount of original issue discount on an Offered Certificate is the excess of the “stated redemption price at maturity” of the Offered Certificate over its “issue price.” The issue price of a class of Offered Certificates is the first price at which a substantial amount of Offered Certificates of such class is sold to investors (excluding bond houses, brokers and underwriters). Although unclear under the OID Regulations, the Certificate Administrator will treat the issue price of Offered Certificates for which there is no substantial sale as of the issue date as the fair market value of such class as of the issue date. The issue price of the Offered Certificates also includes the amount paid by an initial Certificateholder of such class for accrued interest that relates to a period prior to the issue date of such class of Offered Certificates. The stated redemption price at maturity of an Offered Certificate is the sum of all payments provided by the debt instrument other than any qualified stated interest payments. Under the OID Regulations, qualified stated interest generally means interest payable at a single fixed rate or a qualified variable rate;provided that such interest payments are unconditionally payable at intervals of one year or less during the entire term of the obligation. Because there is no penalty or default remedy in the case of nonpayment of interest with respect to an Offered Certificate, it is possible that no interest on any class of Offered Certificates will be treated as qualified stated interest. However, because the Mortgage Loans provide for remedies in the event of default, the Certificate Administrator will treat all payments of stated interest on the Offered Certificates (other than the Class X-A Certificates) as qualified stated interest (other than accrued interest distributed on the first Distribution Date for the number of days that exceed the interval between the Closing Date and the first Distribution Date).
For the purposes of accruing original issue discount, if any, determining whether such original issue discount isde minimis and amortizing any premium, the prepayment assumption will be 0% CPR,provided that it is assumed that each ARD Loan will prepay in full on its Anticipated Repayment Date (the “Prepayment Assumption”). See “Federal Income Tax Consequences for REMIC Certificates—Taxation of Regular Certificates—Original Issue Discount” in the prospectus.
Based on the foregoing, it is anticipated that the Class Certificates will be issued with original issue discount and that the Class Certificates will be issued with ade minimis amount of original issue discount for federal income tax purposes.
In addition, it is anticipated that the Certificate Administrator will treat the Class X-A Certificates as having no qualified stated interest. Accordingly, such Class will be considered to be issued with original issue discount in an amount equal to the excess of all distributions of interest expected to be received thereon over its issue price (including interest accrued prior to the Closing Date). Any “negative” amounts of original issue discount on the Class X-A Certificates attributable to rapid prepayments with respect to the Mortgage Loans will not be deductible currently. Holders of Class X-A Certificates may be entitled to a deduction for a loss (which may be a capital loss) to the extent it becomes certain that such Certificateholders will not recover a portion of their basis in such Class, assuming no further prepayments.
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See “Federal Income Tax Consequences for REMIC Certificates—Taxation of Regular Certificates—Original Issue Discount” in the prospectus.
Premium. An Offered Certificate purchased upon initial issuance or in the secondary market at a cost greater than its remaining stated redemption price at maturity generally is considered to be purchased at a premium. See “Federal Income Tax Consequences for REMIC Certificates—Taxation of Regular Certificates—Premium” in the prospectus. It is anticipated that the Class Certificates will be issued at a premium for federal income tax purposes.
Yield Maintenance Charges and Prepayment Premiums. Yield Maintenance Charges and Prepayment Premiums actually collected on the Mortgage Loans will be distributed to the Offered Certificates as described in “Description of the Offered Certificates—Distributions—Prepayment Premiums and Yield Maintenance Charges” in this free writing prospectus. It is not entirely clear under the Code when the amount of Yield Maintenance Charges and Prepayment Premiums so allocated should be taxed to the holders of the Offered Certificates, but it is not expected, for federal income tax reporting purposes, that Yield Maintenance Charges and Prepayment Premiums will be treated as giving rise to any income to the holder of such Classes of Certificates prior to the Certificate Administrator’s actual receipt of the Yield Maintenance Charges and Prepayment Premium. Yield Maintenance Charges and Prepayment Premiums, if any, may be treated as paid upon the retirement or partial retirement of an Offered Certificate. The Internal Revenue Service may disagree with these positions. Certificateholders are encouraged to consult their own tax advisors concerning the treatment of Yield Maintenance Charges and Prepayment Premiums.
Further Information; Taxation of Foreign Investors
For further information regarding the federal income tax consequences of investing in the Offered Certificates, including consequences of purchase, ownership and disposition of Offered Certificates by any person who is not a citizen or resident of the United States, a corporation or partnership or other entity created or organized in or under the laws of the United States, any state thereof or the District of Columbia, or is a foreign estate or trust, see “Federal Income Tax Consequences for REMIC Certificates” in the prospectus.
DUE TO THE COMPLEXITY OF THESE RULES AND THE CURRENT UNCERTAINTY AS TO THE MANNER OF THEIR APPLICATION TO THE ISSUING ENTITY AND CERTIFICATEHOLDERS, IT IS PARTICULARLY IMPORTANT THAT POTENTIAL INVESTORS CONSULT THEIR OWN TAX ADVISORS REGARDING THE TAX TREATMENT OF THEIR ACQUISITION, OWNERSHIP AND DISPOSITION OF THE OFFERED CERTIFICATES.
CERTAIN STATE AND LOCAL TAX CONSIDERATIONS
In addition to the federal income tax consequences described in “Material Federal Income Tax Consequences” in this free writing prospectus, purchasers of Offered Certificates should consider the state, local and other income tax consequences of the acquisition, ownership, and disposition of the Offered Certificates. State, local and other income tax law may differ substantially from the corresponding federal law, and this discussion does not purport to describe any aspect of the income tax laws of any state, locality or other jurisdiction. Therefore, potential purchasers are encouraged to consult their own tax advisors with respect to the various state, local and other tax consequences of investment in the Offered Certificates.
ERISA CONSIDERATIONS
The purchase by or transfer to an employee benefit plan or other retirement arrangement, including an individual retirement account or a Keogh plan, which is subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) or Code Section 4975 (each, an “ERISA Plan”), or a governmental plan (as defined in Section 3(32) of ERISA) or other plan that is subject to any federal,
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state or local law (“Similar Law”) which is, to a material extent, similar to the foregoing provisions of ERISA or the Code (any such plan, collectively with any ERISA Plan, a “Plan”), or a collective investment fund in which such Plans are invested, an insurance company using the assets of separate accounts or general accounts which include assets of Plans (or which are deemed pursuant to ERISA or any Similar Law to include assets of Plans) or other persons acting on behalf of any such Plan or using the assets of any such Plan to acquire the Offered Certificates may constitute or give rise to a prohibited transaction under ERISA or the Code or Similar Law. There are certain exemptions issued by the U.S. Department of Labor (the “Department”) that may be applicable to an investment by an ERISA Plan in the Certificates. The Department has granted an administrative exemption to Deutsche Bank Securities Inc., Department Final Authorization Number 97-03E, as amended by Prohibited Transaction Exemption 2013-08 (the “Exemption”), for certain mortgage-backed and asset-backed certificates underwritten in whole or in part by Deutsche Bank Securities Inc. The Exemption might be applicable to the initial purchase, the holding, and the subsequent resale by an ERISA Plan of certain certificates, such as the Offered Certificates, representing interests in pass-through trusts that consist of certain receivables, loans and other obligations;provided that the conditions and requirements of the Exemption are satisfied. The assets described in the Exemption include mortgage loans such as the Mortgage Loans. The Depositor expects that the Exemption generally will apply to the Offered Certificates. However, it should be noted that in issuing the Exemption, the Department may not have considered interests in pools of the exact nature as some of the Offered Certificates.
Among the conditions that must be satisfied for the Exemption to apply to the acquisition, holding and resale of the Offered Certificates are the following:
(a) the acquisition of Offered Certificates by an ERISA Plan is on terms (including the price for the Certificates) that are at least as favorable to the ERISA Plan as they would be in an arm’s length transaction with an unrelated party;
(b) the Offered Certificates acquired by the ERISA Plan have received a rating at the time of such acquisition that is one of the four highest generic rating categories from at least one NRSRO that meets the requirements of the Exemption (an “Exemption Rating Agency”);
(c) the Trustee must not be an affiliate of any other member of the Restricted Group (as defined below) other than an Underwriter;
(d) the sum of all payments made to and retained by Underwriters in connection with the distribution of Offered Certificates represents not more than reasonable compensation for underwriting the Certificates. The sum of all payments made to and retained by the Depositor pursuant to the assignment of the Mortgage Loans to the Issuing Entity represents not more than the fair market value of such Mortgage Loans. The sum of all payments made to and retained by the Master Servicer and any other servicer represents not more than reasonable compensation for such person’s services under the Pooling and Servicing Agreement and reimbursement of such person’s reasonable expenses in connection therewith; and
(e) the ERISA Plan investing in the Certificates is an “accredited investor” as defined in Rule 501(a)(1) of Regulation D under the Securities Act.
It is a condition of the issuance of the Offered Certificates that they have the ratings required by the Exemption and the Depositor believes that each of the Rating Agencies qualifies as an Exemption Rating Agency. Consequently, the second general condition set forth above will be satisfied with respect to the Offered Certificates as of the Closing Date. As of the Closing Date, the third general condition set forth above will be satisfied. In addition, the Depositor believes that the fourth general condition set forth above will be satisfied with respect to the Offered Certificates. A fiduciary of an ERISA Plan contemplating purchasing an Offered Certificate in the secondary market must make its own determination that, at the time of purchase, the Offered Certificates continue to satisfy the second general condition set forth above. A fiduciary of an ERISA Plan contemplating purchasing an Offered Certificate, whether in the initial issuance of the Offered Certificates or in the secondary market, must make its own determination that the first and fifth general conditions set forth above will be satisfied.
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The Issuing Entity must also meet the following requirements:
(a) the corpus of the Issuing Entity must consist solely of assets of the type that have been included in other investment pools;
(b) certificates in such other investment pools must have been rated in one of the four highest rating categories by at least one Exemption Rating Agency for at least one year prior to the ERISA Plan’s acquisition of the Offered Certificates pursuant to the Exemption; and
(c) certificates evidencing interests in such other investment pools must have been purchased by investors other than ERISA Plans for at least one year prior to any ERISA Plan’s acquisition of the Offered Certificates pursuant to the Exemption.
The Depositor believes that the conditions to the applicability of the Exemption will generally be met with respect to the Offered Certificates, other than those conditions which are dependent on facts unknown to the Depositor or which it cannot control, such as those relating to the circumstances of the ERISA Plan purchaser or the ERISA Plan fiduciary making the decision to purchase any such Offered Certificates.
If all of the conditions of the Exemption are met, then whether or not an ERISA Plan’s assets would be deemed to include an ownership interest in the Mortgage Loans in the Issuing Entity, the acquisition, holding and resale by ERISA Plans of the Offered Certificates with respect to which the conditions were met would be exempt from the prohibited transaction provisions of ERISA and the Code to the extent indicated in the Exemption.
Moreover, the Exemption can provide relief from certain self-dealing/conflict of interest prohibited transactions that may occur if an ERISA Plan fiduciary causes the ERISA Plan to acquire certificates in a trust holding receivables, loans or obligations on which the fiduciary (or its affiliate) is an obligor;provided that, among other requirements, (a) in the case of an acquisition in connection with the initial issuance of certificates, at least fifty percent of each Class of certificates in which ERISA Plans have invested is acquired by persons independent of the Restricted Group (as defined below) and at least fifty percent of the aggregate interest in the Issuing Entity is acquired by persons independent of the Restricted Group (as defined below); (b) such fiduciary (or its affiliate) is an obligor with respect to five percent or less of the fair market value of the Mortgage Loans contained in the Issuing Entity; (c) the ERISA Plan’s investment in certificates of any Class does not exceed twenty-five percent of all of the certificates of that Class outstanding at the time of the acquisition; and (d) immediately after the acquisition no more than twenty-five percent of the assets of the ERISA Plan with respect to which such person is a fiduciary are invested in certificates representing an interest in one or more trusts containing assets sold or serviced by the same entity.
Some of the relief provided by the Exemption does not apply to the purchasing or holding of Offered Certificates by ERISA Plans sponsored by the Depositor, the Trustee, any Underwriter, the Master Servicer, the Special Servicer, any sub-servicer, any obligor with respect to Mortgage Loans included in the Issuing Entity constituting more than five percent of the aggregate unamortized principal balance of the assets in the Issuing Entity, any party considered a “sponsor” within the meaning of the Exemption, or any affiliate of such parties (the “Restricted Group”).
Any fiduciary of an ERISA Plan considering whether to purchase an Offered Certificate should carefully review with its own legal advisors the applicability of the general fiduciary duty provided as well as the prohibited transaction provisions of ERISA and the Code to such investment. A fiduciary of a Plan that is not subject to ERISA or Code Section 4975 should make its own determination as to the need for and the availability of any exemptive relief under any Similar Law. See “Certain ERISA Considerations” in the prospectus.
The sale of Offered Certificates to a Plan is in no respect a representation by the Depositor or the Underwriters that this investment meets all relevant legal requirements with respect to investments by
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Plans generally or any particular Plan, or that this investment is appropriate for Plans generally or any particular Plan.
LEGAL INVESTMENT
No class of the Offered Certificates will constitute “mortgage related securities” for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended (“SMMEA”). The appropriate characterization of the Offered Certificates under various legal investment restrictions, and thus the ability of investors subject to these restrictions to purchase the Offered Certificates, are subject to significant interpretive uncertainties.
Except as regards their status under SMMEA, no representations are made as to the proper characterization of the Offered Certificates for legal investment, financial institution regulatory, or other purposes, or as to the ability of particular investors to purchase the Offered Certificates under applicable legal investment restrictions. Further, any ratings downgrade of any class of Offered Certificates by an NRSRO to less than an “investment grade” rating (i.e., lower than the top four rating categories) may adversely affect the ability of an investor to purchase or retain, or otherwise impact the regulatory characteristics of, that class. The uncertainties described above (and any unfavorable future determinations concerning the legal investment or financial institution regulatory characteristics of the Offered Certificates) may adversely affect the liquidity and market value of the Offered Certificates. Accordingly, all investors whose investment activities are subject to legal investment laws and regulations, regulatory capital requirements or review by regulatory authorities should consult with their own legal advisors in determining whether and to what extent the Offered Certificates will constitute legal investments for them or are subject to investment, capital or other regulatory restrictions.
The Issuing Entity will be relying on an exclusion or exemption from the definition of “investment company” under the Investment Company Act, contained in Section 3(c)(5) of the Investment Company Act or Rule 3a-7 under the Investment Company Act, although there may be additional exclusions or exemptions available to the Issuing Entity. The Issuing Entity is being structured so as not to constitute a “covered fund” for purposes of the Volcker Rule under the Dodd-Frank Act (both as defined in this free writing prospectus).
See “Legal Investment” in the prospectus.
LEGAL MATTERS
The validity of the Offered Certificates and the material federal income tax consequences of investing in the Offered Certificates will be passed upon for the Depositor by Cadwalader, Wickersham & Taft LLP, New York, New York. Certain legal matters with respect to the Offered Certificates will be passed upon for the Underwriters by Cadwalader, Wickersham & Taft LLP, New York, New York.
RATINGS
It is a condition to the issuance of the Offered Certificates that each Class of the Offered Certificates receive the ratings set forth on the cover of this free writing prospectus from Moody’s, Fitch and DBRS (together, the “Rating Agencies”).
Each of the Rating Agencies will perform ratings surveillance with respect to its ratings for so long as the Offered Certificates remain outstanding. Fees for such ratings surveillance will generally be prepaid by the Depositor. Although the Depositor will generally prepay fees for ongoing rating surveillance, the Depositor has no obligation or ability to ensure that any Rating Agency performs rating surveillance. In addition, a Rating Agency may cease rating surveillance if the information furnished to that Rating Agency is insufficient to allow it to perform surveillance.
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We are not obligated to maintain any particular rating with respect to any class of Offered Certificates. Changes affecting the Mortgaged Properties, the Sponsors, the Trustee, the Certificate Administrator, the Master Servicer, the Special Servicer or another person may have an adverse effect on the ratings of the Offered Certificates, and thus on the liquidity, market value and regulatory characteristics of the Offered Certificates, although such adverse changes would not necessarily be an event of default under the applicable Mortgage Loan.
A securities rating on mortgage pass-through certificates addresses credit risk and the likelihood of full and timely payment to the applicable certificateholders of all distributions of interest at the applicable pass-through rate on the certificates in question on each distribution date and, except in the case of interest-only certificates, the ultimate payment in full of the certificate balance of each class of certificates in question on a date that is not later than the rated final distribution date with respect to such class of certificates. A rating takes into consideration, among other things, the credit quality of the related pool of mortgage loans, structural and legal aspects associated with the certificates in question, and the extent to which the payment stream from the related pool of mortgage loans is adequate to make payments required under the certificates in question. A securities rating on mortgage pass-through certificates does not, however, represent an assessment of the likelihood, timing or frequency of principal prepayments (whether voluntary or involuntary) on the related mortgage loans, the degree to which such payments might differ from those originally anticipated or the extent to which the related certificateholders might experience any net prepayment interest shortfalls. The security ratings do not address the possibility that certificateholders might suffer a lower than anticipated yield. In addition, ratings on mortgage pass-through certificates do not address the likelihood, timing or frequency of the receipt of prepayment premiums or default interest. In general, the ratings address credit risk and not prepayment risk.
In addition, a security rating does not represent any assessment of the yield to maturity that investors may experience or whether investors might not fully recover their initial investment in the event of delinquencies or rapid prepayments of the related mortgage loans (including both voluntary and involuntary prepayments) or the application of any realized losses. In the event that the holders of such certificates do not fully recover their investment as a result of rapid principal prepayments on the Mortgage Loans, all amounts “due” to such holders will nevertheless have been paid, and such result is consistent with the securities ratings assigned to such certificates. The Notional Balance of the Class X-A Certificates may be reduced by the allocation of realized losses and prepayments, whether voluntary or involuntary. The securities ratings do not address the timing or magnitude of reductions of such Notional Balance, but only the obligation to distribute interest timely on each such Notional Balance as so reduced from time to time. A security rating does not represent any assessment of the yield to maturity that investors may experience or the possibility that the holders of the Class X-A certificates might not fully recover their initial investment in the event of delinquencies or defaults, prepayments (both voluntary (to the extent permitted) and involuntary), or losses in respect of the mortgage loans. As described in this free writing prospectus, the amounts payable with respect to the Class X-A certificates consist only of interest. If the mortgage loans were to prepay in the initial month, with the result that the holders of the Class X-A certificates receive only a single month’s interest and therefore, suffer a nearly complete loss of their investment, all amounts “due” to such holders will nevertheless have been paid, and such result is consistent with the rating received on the Class X-A certificates. The notional amounts of the Class X-A certificates on which interest is calculated may be reduced by the allocation of realized losses and principal prepayments, whether voluntary or involuntary. The ratings do not address the timing or magnitude of reductions of such notional amount, but only the obligation to pay interest timely on the notional amount, as so reduced from time to time. Therefore, the securities ratings of the Class X-A Certificates should be evaluated independently from similar ratings on other types of securities.
As part of the process of obtaining ratings for the Offered Certificates, the Depositor had initial discussions with and submitted certain materials to certain NRSROs. Based on preliminary feedback from those NRSROs at that time, the Depositor selected the Rating Agencies to rate the Offered Certificates, and did not select the other NRSROs due, in part, to those NRSROs’ initial subordination levels for the various classes of Offered Certificates and Non-Offered Certificates. Had the Depositor selected such other NRSROs to rate the Offered Certificates, we cannot assure you as to the ratings that such other NRSROs would ultimately have assigned to the Offered Certificates. Although unsolicited
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ratings may be issued by any NRSRO, an NRSRO might be more likely to issue an unsolicited rating if it was not selected after having provided preliminary feedback to the Depositor. If unsolicited ratings are issued, there is no assurance that they will not be different from the ratings of the Offered Certificates and, if lower, they may have an adverse impact on the liquidity, market value and regulatory characteristics of the Offered Certificates.
Furthermore, the SEC may determine that any or all of the Rating Agencies no longer qualifies as an NRSRO, or is no longer qualified to rate the Offered Certificates, and that determination may have an adverse effect on the liquidity, market value and regulatory characteristics of the Offered Certificates. See “Risk Factors—Risks Related to the Offered Certificates—Ratings of the Offered Certificates” in this free writing prospectus.
With respect to each Mortgage Loan, certain actions provided for in the related loan agreement require, as a condition to taking such action, that a No Downgrade Confirmation be obtained from each applicable rating agency. In certain circumstances, this condition may be deemed to have been met or waived without such a No Downgrade Confirmation being obtained. See the definition of “No Downgrade Confirmation” in this free writing prospectus. In the event such an action is taken without a No Downgrade Confirmation being obtained, we cannot assure you that the applicable Rating Agency will not downgrade, qualify or withdraw its ratings as a result of the taking of such action. If you invest in the Offered Certificates, pursuant to the Pooling and Servicing Agreement your acceptance of Certificates will constitute an acknowledgment of, and agreement with, the procedures relating to No Downgrade Confirmations described under the definition of “No Downgrade Confirmation” in this free writing prospectus.
Any rating of the Offered Certificates should be evaluated independently from similar ratings on other types of securities. A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning Rating Agency.
LEGAL ASPECTS OF MORTGAGE LOANS IN TEXAS, FLORIDA AND CALIFORNIA
The following discussion summarizes certain legal aspects of mortgage loans secured by real property in Texas (representing approximately 13.5% of the Initial Outstanding Pool Balance (by Allocated Loan Amount)), Florida (representing approximately 12.4% of the Initial Outstanding Pool Balance (by Allocated Loan Amount)) and California (representing approximately 10.0% of the Initial Outstanding Pool Balance (by Allocated Loan Amount)),, which are general in nature. This summary does not purport to be complete and is qualified in its entirety by reference to the applicable federal and state laws governing the Mortgage Loans.
Commercial mortgage loans in Texas are generally secured by deeds of trust on the related real estate. Foreclosure of a deed of trust in Texas may be accomplished by either a non-judicial trustee’s sale under a specific power-of-sale provision set forth in the deed of trust or by judicial foreclosure. Due to the relatively short period of time involved in a non-judicial foreclosure, the judicial foreclosure process is rarely used in Texas. A judicial foreclosure action must be initiated, and a non-judicial foreclosure must be completed, within four (4) years from the date the cause of action accrues. The cause of action for the unpaid balance of the indebtedness accrues upon the maturity of the indebtedness (by acceleration or otherwise). Unless expressly waived in the deed of trust, the lender must provide the debtor with a written demand for payment, a notice of intent to accelerate the indebtedness, and a notice of acceleration prior to commencing any foreclosure action. It is customary practice in Texas for the demand for payment to be combined with the notice of intent to accelerate the indebtedness. In addition, with respect to a non-judicial foreclosure sale and notwithstanding any waiver by debtor to the contrary, the lender is statutorily required to (i) provide each debtor obligated to pay the indebtedness a notice of foreclosure sale via certified mail, postage prepaid and addressed to each debtor at such debtor’s last known address at least twenty-one (21) days before the date of the foreclosure sale; (ii) post a notice of foreclosure sale at the courthouse of each county in which the property is located; and (iii) file a notice of foreclosure sale with the county clerk of each county in which the property is located. Such twenty-one (21) day period includes the entire calendar day on which the notice is deposited with the United States
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mail and excludes the entire calendar day of the foreclosure sale. The statutory foreclosure notice may be combined with the notice of acceleration of the indebtedness and must contain the location of the foreclosure sale and a statement of the earliest time at which the foreclosure sale will begin. To the extent the note or deed of trust contains additional notice requirements, the lender must comply with such requirements in addition to the statutory requirements set forth above. The trustee’s sale must be performed pursuant to the terms of the deed of trust and must take place between the hours of 10 a.m. and 4 p.m. on the first Tuesday of the month, in the area designated for such sales by the county commissioners’ court of the county in which the property is located, and must begin at the time set forth in the notice of foreclosure sale or not later than three (3) hours after that time. If the property is located in multiple counties, the sale may occur in any county in which a portion of the property is located. Under Texas law, the debtor does not have the right to redeem the property after foreclosure. Any action for deficiency must be brought within two (2) years of the foreclosure sale. If the foreclosure sale price is less than the fair market value of the property, the debtor or any obligor (including any guarantor) may be entitled to an offset against the deficiency in the amount by which the fair market value of the property, less the amount of any claim, indebtedness, or obligation of any kind that is secured by a lien or encumbrance on the real property that was not extinguished by the foreclosure, exceeds the foreclosure sale price.
Loans involving real property in Florida are secured by mortgages, and foreclosures are accomplished by judicial foreclosure. There is no power of sale in Florida. After an action for foreclosure is commenced and the lender secures a final judgment, such judgment will provide that the property be sold at a public sale at the courthouse (or on-line depending on the county) if the full amount of the judgment is not paid prior to the scheduled sale. Fla Statute 45.031 requires that foreclosure sale be held no earlier than 20 (but not more than 35) days after the judgment is entered. However, given the backlog of foreclosure cases in many counties, it is not unusual for foreclosure sales to be held later than the 35 day period specified in the statute. After the foreclosure judgment is entered and prior to the foreclosure sale, a notice of sale must be published once a week for two (2) consecutive weeks in the county in which the property is located. There is no right of redemption after the filing of the clerk’s certificate at the conclusion of the foreclosure sale. However, a certificate of title transferring title to the foreclosed property is not issued until 10 days after the foreclosure sale, and challenges to the foreclosure sale are permitted within that 10-day period. Issuance of a certificate of title is sometimes delayed beyond the 10-day period due to a backlog of foreclosure cases. Florida does not have a “one action rule” or “anti-deficiency legislation,” and deficiency judgments are permitted to the extent not prohibited by the applicable loan documents. Subsequent to a foreclosure sale, however, a lender is generally required to prove the value of the property as of the date of foreclosure sale in order to recover a deficiency. Further, Florida law limits any deficiency judgment (if otherwise permitted) against a borrower following a judicial sale to the excess of the final judgment amount (which generally equals the amount of outstanding debt plus attorneys’ fees and other collection costs) over the fair market value of the property at the time of the judicial sale. In limited circumstances, the lender may have a receiver appointed during the pendency of the foreclosure action.
Mortgage loans in California are generally secured by deeds of trust on the related real estate. Foreclosure of a deed of trust in California may be accomplished by a non-judicial trustee’s sale in accordance with the California Civil Code (so long as it is permitted under a specific provision in the deed of trust) or by judicial foreclosure in accordance with the California Code of Civil Procedure. Public notice of either the trustee’s sale or the judgment of foreclosure is given for a statutory period of time after which the mortgaged real estate may be sold by the trustee, if foreclosed pursuant to the trustee’s power of sale, or by court appointed receiver or by the applicable county’s sheriff under a judicial foreclosure. Following certain judicial foreclosure sales, the borrower or its successor in interest may, for a period of up to one year, redeem the property; however, there is no redemption following a trustee’s power of sale. California’s “security first” and “one action” rules require the lender to complete foreclosure of all real estate provided as security under the deed of trust in a single action in an attempt to satisfy the full debt before bringing a personal action (if otherwise permitted) against the borrower for recovery of the debt, except in certain limited cases including as relates to certain environmentally impaired real property where foreclosure of the real property is not required before making a claim under the indemnity. This
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restriction may apply to property which is not located in California if a single promissory note is secured by property located in California and other jurisdictions. California case law has held that acts such as an offset of an unpledged account constitute violations of the statute creating the “security first” and “one-action” rules. Violations of such rules may result in the loss of some or all of the security under the mortgage loan and a loss of the ability to sue for the debt. A sale by the trustee under the deed of trust does not constitute an “action” for purposes of the “one action rule”. Other statutory provisions in California limit any deficiency judgment (if otherwise permitted) against the borrower following a judicial foreclosure to the amount by which the indebtedness exceeds the fair value at the time of the public sale and in no event greater than the difference between the foreclosure sale price and the amount of the indebtedness. Further, under California law, after a property has been sold pursuant to a power of sale clause contained in a deed of trust (and in the case of certain types of purchase money acquisition financings, under all circumstances), the lender is precluded from seeking a deficiency judgment from the borrower or, under certain circumstances, guarantors. On the other hand, under certain circumstances, California law permits separate and even contemporaneous actions against both the borrower (as to the enforcement of the interests in the collateral securing the loan) and any guarantors. California statutory provisions regarding assignments of rents and leases require that a lender whose loan is secured by such an assignment must exercise a remedy with respect to rents as authorized by statute in order to establish its right to receive the rents after an event of default. Among the remedies authorized by statute is the lender’s right to have a receiver appointed under certain circumstances.
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INDEX OF DEFINED TERMS
11 Madison Avenue Intercreditor | BNY Mellon | 156 | ||
Agreement | 219 | BNY Mellon Data Tape | 157 | |
11 Madison Avenue Loan Combination | 219 | BNY Mellon Deal Team | 156 | |
11 Madison Avenue Mortgage Loan | 44, 218 | BNY Mellon Mortgage Loans | 156 | |
11 Madison Avenue Mortgaged Property | 218 | BNY Member | 157 | |
11 Madison Avenue Non-Standalone | Borrower Party | 295 | ||
PariPassuCompanion Loans | 45, 218 | BPC Non-Cashiering Limited | ||
11 Madison Avenue Noteholders | 219 | Subservicing Agreement | 196 | |
11 Madison AvenuePari Passu | BPC Parties | 198 | ||
Companion Loans | 45, 218 | BPC Primary Servicer Termination | ||
11 Madison Avenue Standalone | Event | 199 | ||
Companion Loans | 219 | BPC Primary Servicing Agreement | 195 | |
11 Madison Avenue StandalonePari | B-Piece Buyer | 128 | ||
Passu Companion Loans | 44, 218 | C(WUMP)O | 13 | |
11 Madison Avenue Subordinate | CBE | 287 | ||
Companion Loan Holders | 220 | CCRE Data Tape | 168 | |
11 Madison Avenue Subordinate | CCRE Deal Team | 168 | ||
Companion Loans | 219 | CCRE Depositor | 175 | |
17g-5 Information Provider | 356 | CCRE Lending | 167 | |
2010 PD Amending Directive | 11, 12 | CCRE Mortgage Loans | 167 | |
Acceptable Insurance Default | 111 | CCRE Transferred Loan | 195 | |
Additional Primary Servicing | Certificate Administrator | 200 | ||
Compensation | 190, 197 | Certificate Balance | 251 | |
Administrative Fee Rate | 231 | Certificate Owners | 281 | |
ADR | 231 | Certificate Registrar | 206, 278 | |
Advance Rate | 307 | Certificateholder | 278 | |
Advances | 306 | Certificateholder Quorum | 186 | |
Affected Investor | 134 | Certificates | 250 | |
Allocated Loan Amount | 231 | Certifying Certificateholder | 281 | |
Annual Debt Service | 231 | Class | 250 | |
Anticipated Repayment Date | 231 | Class V Distribution Account | 311 | |
Appraisal Reduction Amount | 255, 274 | Class X-A Strip Rates | 256 | |
Appraisal Reduction Event | 274 | Class X-B Strip Rates | 256 | |
Appraised Value | 232 | Class X-C Strip Rate | 256 | |
Appraised-Out Class | 276 | Class X-D Strip Rates | 256 | |
ARD Loans | 231 | Class X-E Strip Rate | 257 | |
Asset Status Report | 342 | Class X-F Strip Rate | 257 | |
Assumed Final Distribution Date | 269 | Clearstream | 60 | |
Assumed Scheduled Payment | 259 | Clearstream Participants | 280 | |
Authenticating Agent | 206 | Closing Date | 176 | |
Automatic Termination | 8 | CMBS | 149, 156, 162, 178 | |
Available Funds | 253 | Code | 241 | |
Balloon Balance | 232 | Collection Account | 310 | |
Balloon Loan | 254 | Collection Period | 255 | |
Balloon LTV | 233 | Companion Loan | 210 | |
Bankruptcy Code | 176 | Companion Loan Securities | 313 | |
Base Interest Fraction | 267 | Complaint | 202 | |
Beds | 235 | Consultation Termination Event | 26, 296 | |
Berkeley Point | 193 | Control Eligible Certificates | 296 |
369 |
INDEX OF DEFINED TERMS | ||||
(Continued) | ||||
Controlling Class | 296 | EEA | 134 | |
Controlling Class Certificateholder | 296 | Eligible Operating Advisor | 303 | |
Controlling Class Representative | 295 | ERISA | 361 | |
Controlling Companion Loan | 210 | ERISA Plan | 361 | |
Corrected Mortgage Loan | 342 | Euroclear | 60 | |
CPR | 285 | Euroclear Participants | 281 | |
CREFC® | 349 | Excess Interest | 231 | |
CREFC® Investor Reporting Package | 352 | Excess Liquidation Proceeds | 333 | |
CREFC® License Fee | 232 | Excess Liquidation Proceeds Account | 311 | |
CREFC® License Fee Rate | 233 | Exchange Act | 155 | |
CREFC® NOI Adjustment Worksheet | 357 | Excluded Controlling Class Holder | 353 | |
CREFC® Operating Statement Analysis | Excluded Controlling Class Mortgage | |||
Report | 357 | Loan | 279 | |
Crossover Date | 265 | Excluded Information | 354 | |
CRR | 134 | Excluded Mortgage Loan | 295 | |
Cure Event | 225 | Excluded Special Servicer | 184 | |
Cure Payment | 225 | Excluded Special Servicer Mortgage | ||
Current LTV | 233 | Loan | 184 | |
Custodian | 200 | Exemption | 362 | |
Cut-off Date | 209 | Exemption Rating Agency | 362 | |
Cut-off Date Balance | 209 | FDIA | 100 | |
Cut-off Date Loan-to-Value Ratio | 233 | FDIC | 177, 180 | |
Cut-off Date LTV | 233 | FDIC Safe Harbor | 100 | |
Cut-off Date LTV Ratio | 233 | FIEL | 14 | |
Cut-off Date U/W NCF Debt Yield | 233 | Final Asset Status Report | 301 | |
Cut-off Date U/W NOI Debt Yield | 233 | Financial Promotion Order | 10 | |
DBRS | 303 | FIRREA | 159 | |
Debt Service Coverage Ratio | 236 | Fitch | 303 | |
Default Interest | 255 | Form 8-K | 249 | |
Default Rate | 255 | FPO Persons | 10 | |
Defaulted Mortgage Loan | 334 | FSMA | 10 | |
Defeasance | 240 | Funds | 180 | |
Defeasance Collateral | 241 | GAAP | 230 | |
Defeasance Loans | 237 | GACC | 149 | |
Defeasance Lock-Out Period | 237 | GACC Data Tape | 150 | |
Defeasance Option | 240 | GACC Deal Team | 150 | |
Defeasance Period | 238 | GACC Mortgage Loans | 150 | |
Definitive Certificate | 278 | GLA | 233 | |
Department | 362 | Grantor Trust | 359 | |
Depositaries | 279 | Holders | 281 | |
Depositor | 9, 175 | Indirect Participants | 279 | |
Determination Date | 255 | Initial Outstanding Pool Balance | 209 | |
Directing Holder | 295 | Initial Rate | 231 | |
Disclosable Special Servicer Fees | 347 | Intercreditor Agreement | 210 | |
Discount Rate | 238 | Interest Accrual Amount | 255 | |
Distribution Account | 310 | Interest Accrual Period | 255 | |
Distribution Date | 252 | Interest Payment Differential | 238 | |
Distribution Date Statement | 349 | Interest Rate | 233 | |
DMARC | 149 | Interest Reserve Account | 310 | |
Dodd-Frank Act | 134 | Interest Shortfall | 256 | |
DSCR | 170, 236 | Interested Person | 334 | |
DTC | 60 | Investment Company Act | 1, 60 | |
Due Date | 211 | Investor Certification | 355 |
370 |
INDEX OF DEFINED TERMS | ||||
(Continued) | ||||
Investor Q&A Forum | 353, 354 | Monthly Payment | 254 | |
Investor Registry | 353 | Moody’s | 303 | |
IO Group YM Distribution Amount | 266 | Morningstar | 303 | |
Issuing Entity | 176 | Mortgage | 211 | |
KBNA Transferred Loans | 188 | Mortgage Loan Documents | 318 | |
KBRA | 303 | Mortgage Loan Purchase Agreement | 213 | |
KeyBank | 162 | Mortgage Loan Purchase Agreements | 317 | |
KeyBank Data Tape | 163 | Mortgage Loan Sellers | 213 | |
KeyBank Mortgage Loans | 163 | Mortgage Loans | 209 | |
KeyBank Primary Servicer Termination | Mortgage Pool | 209 | ||
Event | 192 | Mortgage Rate | 258 | |
KeyBank Primary Servicing Agreement | 188 | Mortgaged Properties | 209 | |
KeyBank Review Team | 163 | Mortgaged Property | 209 | |
KeyBank Serviced Loans | 186 | MSA | 234 | |
Keys | 235 | Net Default Interest | 255 | |
Leased Fee | 233 | Net Mortgage Pass-Through Rate | 257 | |
Lennar | 180 | Net Operating Income | 234 | |
Liquidation Fee | 344 | Net Prepayment Interest Excess | 273 | |
Liquidation Proceeds | 344 | Net Prepayment Interest Shortfall | 273 | |
Loan Combination | 210 | Net REO Proceeds | 254 | |
Loan-to-Value Ratio | 233 | New Building | 247 | |
Lock-Out Period | 237 | NMS Los Angeles Multifamily Portfolio | ||
Loss of Value Payment | 319 | Companion Loans | 228 | |
Losses | 198 | NMS Los Angeles Multifamily Portfolio | ||
Lower-Tier Distribution Account | 311 | Intercreditor Agreement | 228 | |
Lower-Tier Regular Interests | 359 | NMS Los Angeles Multifamily Portfolio | ||
Lower-Tier REMIC | 358 | Loan Combination | 228 | |
LTV | 170 | NMS Los Angeles Multifamily Portfolio | ||
LTV Ratio | 233 | Mortgage Loan | 228 | |
LTV Ratio at Maturity | 233 | NMS Los Angeles Multifamily Portfolio | ||
LTV Ratio at Maturity or ARD | 233 | Mortgaged Property | 228 | |
MAD 2015-11MD Certificate | NMS Los Angeles Multifamily Portfolio | |||
Administrator | 219 | Non-Controlling Note Holders | 230 | |
MAD 2015-11MD Master Servicer | 21, 219 | NMS Los Angeles Multifamily Portfolio | ||
MAD 2015-11MD Special Servicer | 219 | Note A-2 Companion Loan | 228 | |
MAD 2015-11MD Trust and Servicing | NMS Los Angeles Multifamily Portfolio | |||
Agreement | 21, 219 | Note A-3 Companion Loan | 228 | |
MAD 2015-11MD Trustee | 219 | NMS Los Angeles Multifamily Portfolio | ||
MAI | 276 | Noteholders | 228 | |
Major Decision | 293 | No Downgrade Confirmation | 330 | |
Master Servicer | 178 | NOI | 234 | |
Master Servicer Prepayment Interest | NOI Date | 234 | ||
Shortfall Amount | 272 | Non-Controlling Note Holder | 295 | |
Master Servicer Remittance Date | 305 | Non-Offered Certificates | 16, 251 | |
Master Servicing Fee | 339 | Nonrecoverable Advance | 308 | |
Master Servicing Fee Rate | 339 | Non-Reduced Certificates | 186 | |
Material Breach | 318 | Non-Serviced Companion Loan | 210 | |
Material Document Defect | 318 | Non-Serviced Loan Combination | 210 | |
Maturity Date LTV | 233 | Non-Serviced Mortgage Loan | 210 | |
Midland | 178 | Non-Serviced Subordinate Companion | ||
Modeling Assumptions | 286 | Loan | 210 | |
Modification Fees | 347 | Note | 211 | |
Modified Mortgage Loan | 278 | Notice of Foreclosure/DIL | 226 |
371 |
INDEX OF DEFINED TERMS | ||||
(Continued) | ||||
Notional Balance | 251 | Qualification Criteria | 158 | |
NRA | 234 | Qualified Affiliate | 322 | |
NRSRO | 325 | Qualified Substitute Mortgage Loan | 320 | |
NRSRO Certification | 356 | Rated Final Distribution Date | 36, 270 | |
Occupancy | 234 | Rating Agencies | 364 | |
Occupancy As-of Date | 234 | RCM | 180 | |
Offered Certificateholder | 359 | REA | 84 | |
Offered Certificates | 250 | Realized Loss | 270 | |
Offsetting Modification Fees | 347 | Record Date | 252 | |
OID Regulations | 360 | Regular Certificates | 250 | |
Open Period | 237 | Reinvestment Yield | 238 | |
Operating Advisor | 207 | Related Proceeds | 308 | |
Operating Advisor Consulting Fee | 305 | Release Date | 240 | |
Operating Advisor Fee | 304 | Relevant Implementation Date | 12 | |
Operating Advisor Fee Rate | 305 | Relevant Member State | 11 | |
Operating Advisor Standard | 300 | Relevant Persons | 10 | |
Operating Advisor Termination Event | 302 | REMIC | 143, 358 | |
P&I Advance | 305 | REMIC LTV Test | 145 | |
Pads | 235 | REMIC Regulations | 358 | |
Pari Passu Companion Loan | 210 | Removed Mortgage Loan | 319 | |
Pari Passu Loan Primary Servicing Fee | REO Account | 250 | ||
Rate | 258 | REO Loan | 259 | |
Park Bridge Financial | 207 | REO Property | 250 | |
Park Bridge Lender Services | 207 | REO Tax | 332 | |
Participants | 278 | Replacement Mortgage Loan | 319 | |
Pass-Through Rate | 256 | Repurchase Election Notice | 225 | |
Paying Agent | 200, 206 | Repurchase Option Notice | 225 | |
PCIS Persons | 10 | Repurchase Price | 319 | |
Percentage Interest | 252 | Requesting Holders | 276 | |
Permitted Encumbrances | 212 | Requesting Party | 328 | |
Permitted Special Servicer/Affiliate Fees | 348 | Required Repair Deposit Amount | 167 | |
PIPs | 87 | Reserve Accounts | 212 | |
Plan | 362 | Residual Certificates | 250 | |
Planned Principal Balance | 266 | Restricted Group | 363 | |
PML | 173 | Restricted Party | 301 | |
Pooling and Servicing Agreement | 290 | Revised Rate | 231 | |
PRC | 12 | RevPar | 234 | |
Prepayment Assumption | 360 | Rialto | 180 | |
Prepayment Interest Excess | 272 | RMBS | 202 | |
Prepayment Interest Shortfall | 272 | Rooms | 235 | |
Prepayment Premium | 239 | Rule 17g-5 | 327 | |
Prepayment Premium Lock-Out Period | 237 | Rules | 280 | |
Prime Rate | 307 | S&P | 178, 303 | |
Principal Distribution Amount | 258 | SEC | 155 | |
Principal Prepayments | 254 | Securities Act | 356 | |
Private Certificates | 250 | Securitization Retention Requirements | 134 | |
Privileged Information | 300 | SEL | 173 | |
Privileged Information Exception | 301 | Sequential Pay Certificate | 251 | |
Privileged Person | 355 | Sequential Pay Certificates | 251 | |
Promotion of Collective Investment | Serviced Companion Loan | 210 | ||
Schemes Exemptions Order | 10 | Serviced Loan Combination | 211 | |
Property Advances | 306 | ServicedPari Passu Companion Loan | 211 | |
Prospectus Directive | 11, 12 | Serviced REO Property | 250 |
372 |
INDEX OF DEFINED TERMS | ||||
(Continued) | ||||
Servicer Termination Events | 323 | TTM | 234 | |
Servicing Compensation | 339 | U.S. Obligations | 239 | |
Servicing Fee | 339 | U/W EGI | 236 | |
Servicing Fee Rate | 339 | U/W NCF | 234 | |
Servicing Standard | 291 | U/W NCF Debt Yield | 233 | |
Servicing Transfer Event | 342 | U/W NCF DSCR | 236 | |
SF | 234 | U/W NOI | 235 | |
SFA | 14 | U/W NOI Debt Yield | 233 | |
SFO | 13 | U/W NOI DSCR | 236 | |
Similar Law | 362 | U/W Revenue | 237 | |
Small Loan Appraisal Estimate | 275 | Underwriters | 176 | |
SMMEA | 364 | Underwritten NCF | 234 | |
Sole Certificateholder | 338 | Underwritten NCF Debt Yield | 233 | |
Special Servicer | 180 | Underwritten NCF DSCR | 236 | |
Special Servicer Decision | 336 | Underwritten Net Cash Flow | 234 | |
Special Servicing Fee | 343 | Underwritten Net Operating Income | 237 | |
Specially Serviced Loan | 340 | Underwritten NOI | 235 | |
Sponsors | 213 | Underwritten NOI Debt Yield | 233 | |
Springing Deed Restriction | 247 | Underwritten NOI DSCR | 236 | |
Sq. Ft. | 234 | Units | 235 | |
Square Feet | 234 | Unliquidated Advance | 310 | |
Stated Principal Balance | 271 | Unscheduled Payments | 254 | |
Subordinate Certificates | 273 | Updated Appraisal | 275 | |
Subordinate Companion Loan | 211 | Upper-Tier Distribution Account | 311 | |
Sub-Servicing Entity | 324 | Upper-Tier REMIC | 358 | |
T-12 | 234 | Volcker Rule | 135 | |
Term to Maturity | 234 | Voting Rights | 330 | |
Terms and Conditions | 281 | Weighted Average Net Mortgage Pass- | ||
Terrorism Insurance Program | 112 | Through Rate | 257 | |
Terrorism Premium Cap | 113 | Wells Fargo | 200 | |
Title IV Financial Aid | 73 | Withheld Amounts | 311 | |
Triggering Event of Default | 220 | Workout Fee | 343 | |
TRIPRA | 112 | Workout-Delayed Reimbursement | ||
TRIPRA 2015 | 112 | Amount | 309 | |
Trust REMIC | 56 | Yield Maintenance Charge | 238 | |
Trust REMICs | 358 | Yield Maintenance Loans | 238 | |
Trustee | 200 | Yield Maintenance Lock-Out Period | 237 | |
Trustee/Certificate Administrator Fee | 206 | Yield Maintenance Period | 238 | |
Trustee/Certificate Administrator Fee | ||||
Rate | 206 |
373 |
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
ANNEX A-1
CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | Mortgage | Cut-off | General | Detailed | Interest | Original | ||||||||||||||||||||||||||
Property | Initial Pool | # of | Loan | Original | Date | Maturity | Property | Property | Interest | Administrative | Accrual | Term to | ||||||||||||||||||||
Flag | ID | Property Name | Balance | Properties | Seller (1) | Balance($)(2)(3) | Balance($)(2)(3)(8) | or ARD Balance($)(8) | Type (4)(5) | Type | Rate (6) | Fee Rate (7) | Basis | Maturity or ARD | ||||||||||||||||||
Loan | 1 | 11 Madison Avenue (35)(36)(37) | 7.5% | 1 | GACC | 70,000,000 | 70,000,000 | 70,000,000 | Office | CBD | 3.5602% | 0.0091% | Actual/360 | 120 | ||||||||||||||||||
Loan | 2 | NMS Los Angeles Multifamily Portfolio (35) | 7.0% | 6 | CCRE | 65,000,000 | 65,000,000 | 65,000,000 | Multifamily | Various | 4.9380% | 0.0157% | Actual/360 | 120 | ||||||||||||||||||
Property | 2.01 | Luxe at 1548 | 1.6% | 1 | CCRE | 14,733,333 | 14,733,333 | Multifamily | Mid Rise | |||||||||||||||||||||||
Property | 2.02 | Luxe at 1539 | 1.5% | 1 | CCRE | 14,245,833 | 14,245,833 | Multifamily | Mid Rise | |||||||||||||||||||||||
Property | 2.03 | Luxe at 1759 | 1.4% | 1 | CCRE | 12,729,167 | 12,729,167 | Multifamily | Mid Rise | |||||||||||||||||||||||
Property | 2.04 | NMS at Northridge | 1.3% | 1 | CCRE | 11,645,833 | 11,645,833 | Multifamily | Garden | |||||||||||||||||||||||
Property | 2.05 | NMS at Warner Center | 0.9% | 1 | CCRE | 8,287,500 | 8,287,500 | Multifamily | Garden | |||||||||||||||||||||||
Property | 2.06 | NMS at Superior | 0.4% | 1 | CCRE | 3,358,333 | 3,358,333 | Multifamily | Garden | |||||||||||||||||||||||
Loan | 3 | Sandalwood Portfolio | 6.8% | 7 | GACC | 63,000,000 | 62,912,576 | 50,425,139 | Multifamily | Garden | 4.2100% | 0.0126% | Actual/360 | 120 | ||||||||||||||||||
Property | 3.01 | Oaks of Northgate | 1.1% | 1 | GACC | 10,550,000 | 10,535,360 | Multifamily | Garden | |||||||||||||||||||||||
Property | 3.02 | Cimarron Crossing | 1.1% | 1 | GACC | 10,450,000 | 10,435,499 | Multifamily | Garden | |||||||||||||||||||||||
Property | 3.03 | Brandon Oaks | 1.1% | 1 | GACC | 10,200,000 | 10,185,846 | Multifamily | Garden | |||||||||||||||||||||||
Property | 3.04 | Sugar Tree Apartments | 1.0% | 1 | GACC | 9,450,000 | 9,436,886 | Multifamily | Garden | |||||||||||||||||||||||
Property | 3.05 | Arlington Oaks | 0.9% | 1 | GACC | 8,500,000 | 8,488,205 | Multifamily | Garden | |||||||||||||||||||||||
Property | 3.06 | Lakeshire Place | 0.9% | 1 | GACC | 8,250,000 | 8,238,552 | Multifamily | Garden | |||||||||||||||||||||||
Property | 3.07 | Sundance Apartments | 0.6% | 1 | GACC | 5,600,000 | 5,592,229 | Multifamily | Garden | |||||||||||||||||||||||
Loan | 4 | Atlanta Multifamily Portfolio (37) | 4.8% | 2 | GACC | 45,000,000 | 45,000,000 | 42,905,176 | Multifamily | Garden | 4.8100% | 0.0126% | Actual/360 | 60 | ||||||||||||||||||
Property | 4.01 | Rosemont Cityview Apartments | 2.5% | 1 | GACC | 23,000,000 | 23,000,000 | Multifamily | Garden | |||||||||||||||||||||||
Property | 4.02 | Dawson Forest Apartments | 2.4% | 1 | GACC | 22,000,000 | 22,000,000 | Multifamily | Garden | |||||||||||||||||||||||
Loan | 5 | The Drake | 4.7% | 1 | BNYM | 44,000,000 | 44,000,000 | 40,996,450 | Multifamily | High Rise | 4.3400% | 0.0126% | Actual/360 | 120 | ||||||||||||||||||
Loan | 6 | Midwest Shopping Center Portfolio (37) | 4.1% | 6 | GACC | 38,300,000 | 38,152,658 | 30,788,884 | Retail | Anchored | 4.3300% | 0.0126% | Actual/360 | 120 | ||||||||||||||||||
Property | 6.01 | Home Depot Shopping Center | 1.2% | 1 | GACC | 10,968,500 | 10,926,304 | Retail | Anchored | |||||||||||||||||||||||
Property | 6.02 | Calumet Center | 0.7% | 1 | GACC | 6,725,000 | 6,699,129 | Retail | Anchored | |||||||||||||||||||||||
Property | 6.03 | Waterloo Plaza | 0.7% | 1 | GACC | 6,456,500 | 6,431,662 | Retail | Anchored | |||||||||||||||||||||||
Property | 6.04 | Broadway Plaza | 0.6% | 1 | GACC | 5,835,000 | 5,812,552 | Retail | Anchored | |||||||||||||||||||||||
Property | 6.05 | Kansas Center | 0.5% | 1 | GACC | 4,481,500 | 4,464,259 | Retail | Anchored | |||||||||||||||||||||||
Property | 6.06 | Neil Street Shopping Center | 0.4% | 1 | GACC | 3,833,500 | 3,818,752 | Retail | Anchored | |||||||||||||||||||||||
Loan | 7 | Intellicenter | 3.6% | 1 | KeyBank | 33,562,500 | 33,562,500 | 29,481,411 | Office | Suburban | 4.6500% | 0.0102% | Actual/360 | 120 | ||||||||||||||||||
Loan | 8 | Hotel deLuxe | 3.5% | 1 | BNYM | 32,500,000 | 32,419,793 | 26,360,523 | Hospitality | Full Service | 4.5900% | 0.0126% | Actual/360 | 120 | ||||||||||||||||||
Loan | 9 | Green Valley Corporate Center | 2.9% | 1 | BNYM | 27,000,000 | 27,000,000 | 23,115,347 | Office | Suburban | 4.5900% | 0.0301% | Actual/360 | 120 | ||||||||||||||||||
Loan | 10 | Chase Park | 2.9% | 1 | GACC | 26,600,000 | 26,600,000 | 24,269,263 | Office | Suburban | 4.3200% | 0.0126% | Actual/360 | 120 | ||||||||||||||||||
Loan | 11 | Cookie Factory Lofts | 2.5% | 1 | BNYM | 23,000,000 | 23,000,000 | 20,253,535 | Multifamily | Mid Rise | 4.7600% | 0.0126% | Actual/360 | 120 | ||||||||||||||||||
Loan | 12 | Windrift Apartments | 2.3% | 1 | GACC | 21,450,000 | 21,450,000 | 18,372,664 | Multifamily | Garden | 4.6100% | 0.0126% | Actual/360 | 120 | ||||||||||||||||||
Loan | 13 | Village Square at Kiln Creek | 2.2% | 1 | KeyBank | 20,400,000 | 20,400,000 | 16,883,664 | Retail | Anchored | 4.3400% | 0.0102% | Actual/360 | 120 | ||||||||||||||||||
Loan | 14 | Ocala Portfolio - AHIP | 2.0% | 3 | GACC | 19,000,000 | 19,000,000 | 19,000,000 | Hospitality | Limited Service | 4.2100% | 0.0126% | Actual/360 | 120 | ||||||||||||||||||
Property | 14.01 | Courtyard Ocala | 0.9% | 1 | GACC | 7,967,742 | 7,967,742 | Hospitality | Limited Service | |||||||||||||||||||||||
Property | 14.02 | Residence Inn Ocala | 0.7% | 1 | GACC | 6,741,935 | 6,741,935 | Hospitality | Limited Service | |||||||||||||||||||||||
Property | 14.03 | Fairfield Inn & Suites Ocala | 0.5% | 1 | GACC | 4,290,323 | 4,290,323 | Hospitality | Limited Service | |||||||||||||||||||||||
Loan | 15 | Hilton Garden Inn Charlotte Airport | 2.0% | 1 | BNYM | 18,500,000 | 18,475,793 | 14,976,016 | Hospitality | Select Service | 4.5350% | 0.0126% | Actual/360 | 120 | ||||||||||||||||||
Loan | 16 | GSP MHP Portfolio I | 1.9% | 2 | CCRE | 17,950,000 | 17,927,306 | 14,624,070 | Manufactured Housing Community | Manufactured Housing Community | 4.7235% | 0.0601% | Actual/360 | 120 | ||||||||||||||||||
Property | 16.01 | Indian Creek Village | 1.0% | 1 | CCRE | 9,070,000 | 9,058,533 | Manufactured Housing Community | Manufactured Housing Community | |||||||||||||||||||||||
Property | 16.02 | Cedar Manor MHP | 1.0% | 1 | CCRE | 8,880,000 | 8,868,773 | Manufactured Housing Community | Manufactured Housing Community | |||||||||||||||||||||||
Loan | 17 | A&H Pacific | 1.9% | 1 | GACC | 17,600,000 | 17,600,000 | 16,015,356 | Retail | Unanchored | 4.1600% | 0.0126% | Actual/360 | 120 | ||||||||||||||||||
Loan | 18 | WHG Extended Stay Portfolio | 1.7% | 5 | BNYM | 15,500,000 | 15,500,000 | 14,244,376 | Hospitality | Extended Stay | 4.7600% | 0.0126% | Actual/360 | 60 | ||||||||||||||||||
Property | 18.01 | Sun Suites Louisville | 0.4% | 1 | BNYM | 4,075,000 | 4,075,000 | Hospitality | Extended Stay | |||||||||||||||||||||||
Property | 18.02 | HomeTowne Suites Columbia | 0.4% | 1 | BNYM | 3,400,000 | 3,400,000 | Hospitality | Extended Stay | |||||||||||||||||||||||
Property | 18.03 | Sun Suites Alexandria | 0.3% | 1 | BNYM | 3,000,000 | 3,000,000 | Hospitality | Extended Stay | |||||||||||||||||||||||
Property | 18.04 | HomeTowne Suites Montgomery | 0.3% | 1 | BNYM | 2,550,000 | 2,550,000 | Hospitality | Extended Stay | |||||||||||||||||||||||
Property | 18.05 | Sun Suites Gainesville | 0.3% | 1 | BNYM | 2,475,000 | 2,475,000 | Hospitality | Extended Stay | |||||||||||||||||||||||
Loan | 19 | Greater Boston Industrial Portfolio I | 1.7% | 3 | CCRE | 15,500,000 | 15,500,000 | 13,766,970 | Industrial | Various | 4.9030% | 0.0326% | Actual/360 | 120 | ||||||||||||||||||
Property | 19.01 | 65 Sunnyslope Avenue | 0.9% | 1 | CCRE | 8,425,000 | 8,425,000 | Industrial | Flex | |||||||||||||||||||||||
Property | 19.02 | 82 South Street | 0.5% | 1 | CCRE | 4,375,000 | 4,375,000 | Industrial | Flex | |||||||||||||||||||||||
Property | 19.03 | 19 Technology Drive | 0.3% | 1 | CCRE | 2,700,000 | 2,700,000 | Industrial | Warehouse/Distribution | |||||||||||||||||||||||
Loan | 20 | Reserve at Conway | 1.6% | 1 | GACC | 14,800,000 | 14,800,000 | 13,564,341 | Multifamily | Garden | 4.6000% | 0.0126% | Actual/360 | 120 | ||||||||||||||||||
Loan | 21 | Chestnut Hill Apartments | 1.6% | 1 | KeyBank | 14,500,000 | 14,500,000 | 14,500,000 | Multifamily | Garden | 4.7400% | 0.0102% | Actual/360 | 120 | ||||||||||||||||||
Loan | 22 | Hilton Greenville | 1.5% | 1 | KeyBank | 14,300,000 | 14,280,263 | 11,457,856 | Hospitality | Full Service | 4.2400% | 0.0102% | Actual/360 | 120 | ||||||||||||||||||
Loan | 23 | The Phenix at Infinity Park II | 1.5% | 1 | GACC | 14,250,000 | 14,250,000 | 13,539,866 | Multifamily | Garden | 4.3600% | 0.0426% | Actual/360 | 60 | ||||||||||||||||||
Loan | 24 | Cannon West Shopping Center | 1.4% | 1 | CCRE | 13,000,000 | 13,000,000 | 11,233,584 | Retail | Anchored | 4.9500% | 0.0501% | Actual/360 | 120 | ||||||||||||||||||
Loan | 25 | HGI Kennewick | 1.4% | 1 | GACC | 12,695,000 | 12,678,584 | 10,299,631 | Hospitality | Limited Service | 4.6000% | 0.0126% | Actual/360 | 120 | ||||||||||||||||||
Loan | 26 | Golf Center | 1.2% | 1 | GACC | 11,200,000 | 11,171,109 | 9,015,573 | Retail | Anchored | 4.3700% | 0.0126% | Actual/360 | 120 | ||||||||||||||||||
Loan | 27 | University Center | 1.2% | 1 | KeyBank | 11,025,000 | 11,025,000 | 9,642,215 | Retail | Anchored | 4.4600% | 0.0102% | Actual/360 | 120 |
A-1-1 |
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | Mortgage | Cut-off | General | Detailed | Interest | Original | ||||||||||||||||||||||||||
Property | Initial Pool | # of | Loan | Original | Date | Maturity | Property | Property | Interest | Administrative | Accrual | Term to | ||||||||||||||||||||
Flag | ID | Property Name | Balance | Properties | Seller (1) | Balance($)(2)(3) | Balance($)(2)(3)(8) | or ARD Balance($)(8) | Type (4)(5) | Type | Rate (6) | Fee Rate (7) | Basis | Maturity or ARD | ||||||||||||||||||
Loan | 28 | The Parking Spot Portfolio | 1.2% | 2 | KeyBank | 10,860,000 | 10,846,286 | 8,849,699 | Other | Parking | 4.7300% | 0.0102% | Actual/360 | 120 | ||||||||||||||||||
Property | 28.01 | The Parking Spot Columbus | 0.7% | 1 | KeyBank | 6,236,900 | 6,229,024 | Other | Parking | |||||||||||||||||||||||
Property | 28.02 | The Parking Spot Buffalo | 0.5% | 1 | KeyBank | 4,623,100 | 4,617,262 | Other | Parking | |||||||||||||||||||||||
Loan | 29 | Hotel Preston | 1.1% | 1 | GACC | 10,250,000 | 10,224,755 | 8,316,538 | Hospitality | Full Service | 4.6000% | 0.0126% | Actual/360 | 120 | ||||||||||||||||||
Loan | 30 | Arrowhead Shopping Center | 1.1% | 1 | BNYM | 10,200,000 | 10,200,000 | 8,681,086 | Retail | Anchored | 4.3700% | 0.0126% | Actual/360 | 120 | ||||||||||||||||||
Loan | 31 | Chestnut Street | 1.1% | 1 | BNYM | 10,000,000 | 10,000,000 | 10,000,000 | Mixed Use | Multifamily/Retail | 4.7700% | 0.0126% | Actual/360 | 120 | ||||||||||||||||||
Loan | 32 | Renner Commerce Center Portfolio | 1.1% | 2 | KeyBank | 9,862,500 | 9,862,500 | 8,641,211 | Industrial | Various | 4.5400% | 0.0102% | Actual/360 | 120 | ||||||||||||||||||
Property | 32.01 | Renner Commerce Center - South | 0.6% | 1 | KeyBank | 5,474,674 | 5,474,674 | Industrial | Warehouse/Distribution | |||||||||||||||||||||||
Property | 32.02 | Renner Commerce Center - North | 0.5% | 1 | KeyBank | 4,387,826 | 4,387,826 | Industrial | Flex | |||||||||||||||||||||||
Loan | 33 | Rockford Crossing | 1.0% | 1 | KeyBank | 9,450,000 | 9,450,000 | 8,264,756 | Retail | Anchored | 4.4600% | 0.0102% | Actual/360 | 120 | ||||||||||||||||||
Loan | 34 | Shops at Randall Road | 1.0% | 1 | CCRE | 9,000,000 | 9,000,000 | 7,919,416 | Retail | Shadow Anchored | 4.7285% | 0.0326% | Actual/360 | 120 | ||||||||||||||||||
Loan | 35 | Fort Myers Self Storage Portfolio | 0.9% | 2 | CCRE | 8,630,000 | 8,630,000 | 7,475,049 | Self Storage | Self Storage | 5.0435% | 0.0326% | Actual/360 | 120 | ||||||||||||||||||
Property | 35.01 | Estero Self Storage | 0.5% | 1 | CCRE | 4,920,873 | 4,920,873 | Self Storage | Self Storage | |||||||||||||||||||||||
Property | 35.02 | Valuguard Self Storage | 0.4% | 1 | CCRE | 3,709,127 | 3,709,127 | Self Storage | Self Storage | |||||||||||||||||||||||
Loan | 36 | Lancaster Towers | 0.9% | 1 | KeyBank | 8,000,000 | 8,000,000 | 6,528,243 | Multifamily | High Rise | 4.7700% | 0.0102% | Actual/360 | 120 | ||||||||||||||||||
Loan | 37 | Brookhaven MHP | 0.8% | 1 | CCRE | 7,915,000 | 7,904,993 | 6,448,442 | Manufactured Housing Community | Manufactured Housing Community | 4.7235% | 0.0801% | Actual/360 | 120 | ||||||||||||||||||
Loan | 38 | Park Villas Townhomes | 0.8% | 1 | KeyBank | 7,200,000 | 7,182,553 | 5,857,743 | Multifamily | Garden | 4.6800% | 0.0102% | Actual/360 | 120 | ||||||||||||||||||
Loan | 39 | Evergreen Square | 0.8% | 1 | GACC | 7,173,050 | 7,173,050 | 6,240,846 | Retail | Anchored | 4.2400% | 0.0126% | Actual/360 | 120 | ||||||||||||||||||
Loan | 40 | Rio Verde & Sagewood Apartments Portfolio | 0.7% | 2 | KeyBank | 6,519,000 | 6,519,000 | 6,519,000 | Multifamily | Garden | 4.5900% | 0.0102% | Actual/360 | 120 | ||||||||||||||||||
Property | 40.01 | Sagewood Apartments | 0.4% | 1 | KeyBank | 3,269,000 | 3,269,000 | Multifamily | Garden | |||||||||||||||||||||||
Property | 40.02 | Rio Verde Apartments | 0.3% | 1 | KeyBank | 3,250,000 | 3,250,000 | Multifamily | Garden | |||||||||||||||||||||||
Loan | 41 | CSRA Food Lion Portfolio II (37) | 0.7% | 2 | CCRE | 6,500,000 | 6,500,000 | 5,657,781 | Retail | Anchored | 4.7500% | 0.0326% | Actual/360 | 120 | ||||||||||||||||||
Property | 41.01 | Kimberly Park | 0.4% | 1 | CCRE | 3,343,342 | 3,343,342 | Retail | Anchored | |||||||||||||||||||||||
Property | 41.02 | Eden Center | 0.3% | 1 | CCRE | 3,156,658 | 3,156,658 | Retail | Anchored | |||||||||||||||||||||||
Loan | 42 | La Galleria at the Mills | 0.7% | 1 | KeyBank | 6,150,000 | 6,142,134 | 4,999,754 | Retail | Shadow Anchored | 4.6600% | 0.0102% | Actual/360 | 120 | ||||||||||||||||||
Loan | 43 | Clive Distribution Center | 0.6% | 1 | GACC | 6,000,000 | 6,000,000 | 5,232,609 | Industrial | Warehouse/Distribution | 4.3400% | 0.0526% | Actual/360 | 120 | ||||||||||||||||||
Loan | 44 | Days Inn | 0.6% | 1 | BNYM | 6,000,000 | 6,000,000 | 4,499,059 | Hospitality | Limited Service | 5.0750% | 0.0126% | Actual/360 | 120 | ||||||||||||||||||
Loan | 45 | Dollar Self Storage - Tucson | 0.6% | 1 | KeyBank | 5,800,000 | 5,792,486 | 4,704,018 | Self Storage | Self Storage | 4.5900% | 0.0102% | Actual/360 | 120 | ||||||||||||||||||
Loan | 46 | The Meadows Apartments | 0.6% | 1 | KeyBank | 5,200,000 | 5,200,000 | 4,434,037 | Multifamily | Garden | 4.4400% | 0.0102% | Actual/360 | 120 | ||||||||||||||||||
Loan | 47 | Witte Oaks Apartments | 0.5% | 1 | GACC | 5,115,000 | 5,105,682 | 3,747,124 | Multifamily | Garden | 4.4500% | 0.0801% | Actual/360 | 120 | ||||||||||||||||||
Loan | 48 | Chambers Place | 0.5% | 1 | GACC | 5,000,000 | 5,000,000 | 4,246,164 | Retail | Shadow Anchored | 4.2900% | 0.0126% | Actual/360 | 120 | ||||||||||||||||||
Loan | 49 | Sonora Cascade MHC | 0.5% | 1 | GACC | 4,250,000 | 4,244,197 | 3,412,506 | Manufactured Housing Community | Manufactured Housing Community | 4.3000% | 0.0126% | Actual/360 | 120 | ||||||||||||||||||
Loan | 50 | Walgreens Aurora, IN | 0.5% | 1 | KeyBank | 4,250,000 | 4,242,538 | 3,142,920 | Retail | Single Tenant | 4.7000% | 0.0102% | Actual/360 | 120 | ||||||||||||||||||
Loan | 51 | Empire Central | 0.4% | 1 | GACC | 4,000,000 | 4,000,000 | 3,484,293 | Industrial | Flex | 4.2900% | 0.0526% | Actual/360 | 120 | ||||||||||||||||||
Loan | 52 | Grove Park Shopping Center | 0.4% | 1 | KeyBank | 3,800,000 | 3,800,000 | 3,800,000 | Retail | Anchored | 4.5200% | 0.0102% | Actual/360 | 120 | ||||||||||||||||||
Loan | 53 | Camelot Medical Office & Dunkin’ Donuts | 0.4% | 1 | BNYM | 3,780,000 | 3,780,000 | 3,115,264 | Office | Medical | 5.0700% | 0.0126% | Actual/360 | 120 | ||||||||||||||||||
Loan | 54 | Parkway Plaza Shopping Center | 0.4% | 1 | KeyBank | 3,500,000 | 3,500,000 | 3,500,000 | Retail | Anchored | 4.5700% | 0.0102% | Actual/360 | 120 | ||||||||||||||||||
Loan | 55 | Midvale Park Self Storage | 0.4% | 1 | KeyBank | 3,500,000 | 3,495,466 | 2,838,632 | Self Storage | Self Storage | 4.5900% | 0.0102% | Actual/360 | 120 | ||||||||||||||||||
Loan | 56 | Fresenius Medical Care Lake City | 0.4% | 1 | KeyBank | 3,475,000 | 3,475,000 | 3,190,396 | Office | Medical | 4.7100% | 0.0102% | Actual/360 | 120 | ||||||||||||||||||
Loan | 57 | Bonita Springs Self Storage (38) | 0.3% | 1 | BNYM | 3,200,000 | 3,200,000 | 2,811,529 | Self Storage | Self Storage | 4.6600% | 0.0126% | Actual/360 | 120 | ||||||||||||||||||
Loan | 58 | Fresenius Medical Care Greece | 0.3% | 1 | KeyBank | 3,165,000 | 3,165,000 | 2,898,523 | Office | Medical | 4.5500% | 0.0102% | Actual/360 | 120 | ||||||||||||||||||
Loan | 59 | Storage Pros Lansing | 0.3% | 1 | KeyBank | 3,042,000 | 3,042,000 | 2,638,656 | Self Storage | Self Storage | 4.6300% | 0.0602% | Actual/360 | 120 | ||||||||||||||||||
Loan | 60 | 4001 North Lincoln | 0.3% | 1 | BNYM | 2,650,000 | 2,650,000 | 2,162,480 | Retail | Unanchored | 4.7700% | 0.0126% | Actual/360 | 120 | ||||||||||||||||||
Loan | 61 | Terrace Oak Apartments | 0.3% | 1 | GACC | 2,531,250 | 2,531,250 | 2,107,834 | Multifamily | Garden | 4.5400% | 0.0126% | Actual/360 | 120 | ||||||||||||||||||
Loan | 62 | Rhett at Remount | 0.3% | 1 | KeyBank | 2,500,000 | 2,496,860 | 2,039,275 | Retail | Anchored | 4.7600% | 0.0102% | Actual/360 | 120 | ||||||||||||||||||
Loan | 63 | Winchester Oaks Apartments | 0.2% | 1 | KeyBank | 1,690,000 | 1,690,000 | 1,377,704 | Multifamily | Garden | 4.7400% | 0.0102% | Actual/360 | 120 | ||||||||||||||||||
Loan | 64 | All Star Storage | 0.2% | 1 | KeyBank | 1,400,000 | 1,400,000 | 1,155,299 | Self Storage | Self Storage | 5.1100% | 0.0102% | Actual/360 | 120 | ||||||||||||||||||
Loan | 65 | Midvale Park RV Storage | 0.1% | 1 | KeyBank | 968,500 | 966,058 | 602,694 | Self Storage | Self Storage | 4.6900% | 0.0102% | Actual/360 | 120 |
A-1-2 |
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Pari Passu | Pari Passu | |||||||||||||||||||||||||||||||
% of | Remaining | Original | Remaining | First | Monthly | Annual | Companion Loan | Companion Loan | Remaining | |||||||||||||||||||||||
Property | Initial Pool | Term to | Amortization | Amortization | Origination | Payment | Maturity | ARD Loan | Final | Debt | Debt | Monthly Debt | Annual Debt | Interest Only | ||||||||||||||||||
Flag | ID | Property Name | Balance | Maturity or ARD | Term | Term | Date | Date | or ARD Date | (Yes/No) | Maturity Date | Service($)(8)(9) | Service($) (8)(9) | Service($) | Service($) | Period | ||||||||||||||||
Loan | 1 | 11 Madison Avenue (35)(36)(37) | 7.5% | 119 | 0 | 0 | 08/18/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 210,563 | 2,526,753 | 2,088,572 | 25,062,864 | 119 | ||||||||||||||||
Loan | 2 | NMS Los Angeles Multifamily Portfolio (35) | 7.0% | 119 | 0 | 0 | 08/21/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 271,190 | 3,254,279 | 229,468 | 2,753,621 | 119 | ||||||||||||||||
Property | 2.01 | Luxe at 1548 | 1.6% | |||||||||||||||||||||||||||||
Property | 2.02 | Luxe at 1539 | 1.5% | |||||||||||||||||||||||||||||
Property | 2.03 | Luxe at 1759 | 1.4% | |||||||||||||||||||||||||||||
Property | 2.04 | NMS at Northridge | 1.3% | |||||||||||||||||||||||||||||
Property | 2.05 | NMS at Warner Center | 0.9% | |||||||||||||||||||||||||||||
Property | 2.06 | NMS at Superior | 0.4% | |||||||||||||||||||||||||||||
Loan | 3 | Sandalwood Portfolio | 6.8% | 119 | 360 | 359 | 08/21/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 308,449 | 3,701,384 | |||||||||||||||||||
Property | 3.01 | Oaks of Northgate | 1.1% | |||||||||||||||||||||||||||||
Property | 3.02 | Cimarron Crossing | 1.1% | |||||||||||||||||||||||||||||
Property | 3.03 | Brandon Oaks | 1.1% | |||||||||||||||||||||||||||||
Property | 3.04 | Sugar Tree Apartments | 1.0% | |||||||||||||||||||||||||||||
Property | 3.05 | Arlington Oaks | 0.9% | |||||||||||||||||||||||||||||
Property | 3.06 | Lakeshire Place | 0.9% | |||||||||||||||||||||||||||||
Property | 3.07 | Sundance Apartments | 0.6% | |||||||||||||||||||||||||||||
Loan | 4 | Atlanta Multifamily Portfolio (37) | 4.8% | 59 | 360 | 360 | 08/20/2015 | 10/06/2015 | 09/06/2020 | No | 09/06/2020 | 228,662 | 2,743,941 | 17 | ||||||||||||||||||
Property | 4.01 | Rosemont Cityview Apartments | 2.5% | |||||||||||||||||||||||||||||
Property | 4.02 | Dawson Forest Apartments | 2.4% | |||||||||||||||||||||||||||||
Loan | 5 | The Drake | 4.7% | 119 | 360 | 360 | 08/12/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 218,778 | 2,625,338 | 71 | ||||||||||||||||||
Loan | 6 | Midwest Shopping Center Portfolio (37) | 4.1% | 117 | 360 | 357 | 06/19/2015 | 08/06/2015 | 07/06/2025 | No | 07/06/2025 | 190,211 | 2,282,533 | |||||||||||||||||||
Property | 6.01 | Home Depot Shopping Center | 1.2% | |||||||||||||||||||||||||||||
Property | 6.02 | Calumet Center | 0.7% | |||||||||||||||||||||||||||||
Property | 6.03 | Waterloo Plaza | 0.7% | |||||||||||||||||||||||||||||
Property | 6.04 | Broadway Plaza | 0.6% | |||||||||||||||||||||||||||||
Property | 6.05 | Kansas Center | 0.5% | |||||||||||||||||||||||||||||
Property | 6.06 | Neil Street Shopping Center | 0.4% | |||||||||||||||||||||||||||||
Loan | 7 | Intellicenter | 3.6% | 120 | 360 | 360 | 09/03/2015 | 11/01/2015 | 10/01/2025 | No | 10/01/2025 | 173,061 | 2,076,727 | 36 | ||||||||||||||||||
Loan | 8 | Hotel deLuxe | 3.5% | 118 | 360 | 358 | 08/05/2015 | 09/06/2015 | 08/06/2025 | No | 08/06/2025 | 166,415 | 1,996,983 | |||||||||||||||||||
Loan | 9 | Green Valley Corporate Center | 2.9% | 118 | 360 | 360 | 08/06/2015 | 09/06/2015 | 08/06/2025 | No | 08/06/2025 | 138,253 | 1,659,032 | 22 | ||||||||||||||||||
Loan | 10 | Chase Park | 2.9% | 119 | 360 | 360 | 08/20/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 131,948 | 1,583,381 | 59 | ||||||||||||||||||
Loan | 11 | Cookie Factory Lofts | 2.5% | 120 | 360 | 360 | 09/16/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 120,118 | 1,441,411 | 36 | ||||||||||||||||||
Loan | 12 | Windrift Apartments | 2.3% | 119 | 360 | 360 | 08/31/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 110,090 | 1,321,085 | 23 | ||||||||||||||||||
Loan | 13 | Village Square at Kiln Creek | 2.2% | 119 | 360 | 360 | 08/11/2015 | 10/01/2015 | 09/01/2025 | No | 09/01/2025 | 101,434 | 1,217,202 | 11 | ||||||||||||||||||
Loan | 14 | Ocala Portfolio - AHIP | 2.0% | 118 | 0 | 0 | 08/06/2015 | 09/06/2015 | 08/06/2025 | No | 08/06/2025 | 67,584 | 811,010 | 118 | ||||||||||||||||||
Property | 14.01 | Courtyard Ocala | 0.9% | |||||||||||||||||||||||||||||
Property | 14.02 | Residence Inn Ocala | 0.7% | |||||||||||||||||||||||||||||
Property | 14.03 | Fairfield Inn & Suites Ocala | 0.5% | |||||||||||||||||||||||||||||
Loan | 15 | Hilton Garden Inn Charlotte Airport | 2.0% | 119 | 360 | 359 | 08/10/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 94,122 | 1,129,463 | |||||||||||||||||||
Loan | 16 | GSP MHP Portfolio I | 1.9% | 119 | 360 | 359 | 08/13/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 93,349 | 1,120,190 | |||||||||||||||||||
Property | 16.01 | Indian Creek Village | 1.0% | |||||||||||||||||||||||||||||
Property | 16.02 | Cedar Manor MHP | 1.0% | |||||||||||||||||||||||||||||
Loan | 17 | A&H Pacific | 1.9% | 119 | 360 | 360 | 08/07/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 85,657 | 1,027,880 | 59 | ||||||||||||||||||
Loan | 18 | WHG Extended Stay Portfolio | 1.7% | 60 | 360 | 360 | 09/15/2015 | 11/06/2015 | 10/06/2020 | No | 10/06/2020 | 80,949 | 971,385 | |||||||||||||||||||
Property | 18.01 | Sun Suites Louisville | 0.4% | |||||||||||||||||||||||||||||
Property | 18.02 | HomeTowne Suites Columbia | 0.4% | |||||||||||||||||||||||||||||
Property | 18.03 | Sun Suites Alexandria | 0.3% | |||||||||||||||||||||||||||||
Property | 18.04 | HomeTowne Suites Montgomery | 0.3% | |||||||||||||||||||||||||||||
Property | 18.05 | Sun Suites Gainesville | 0.3% | |||||||||||||||||||||||||||||
Loan | 19 | Greater Boston Industrial Portfolio I | 1.7% | 119 | 300 | 300 | 09/03/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 89,738 | 1,076,852 | 59 | ||||||||||||||||||
Property | 19.01 | 65 Sunnyslope Avenue | 0.9% | |||||||||||||||||||||||||||||
Property | 19.02 | 82 South Street | 0.5% | |||||||||||||||||||||||||||||
Property | 19.03 | 19 Technology Drive | 0.3% | |||||||||||||||||||||||||||||
Loan | 20 | Reserve at Conway | 1.6% | 119 | 360 | 360 | 08/10/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 75,871 | 910,456 | 59 | ||||||||||||||||||
Loan | 21 | Chestnut Hill Apartments | 1.6% | 120 | 0 | 0 | 09/09/2015 | 11/01/2015 | 10/01/2025 | No | 10/01/2025 | 58,070 | 696,846 | 120 | ||||||||||||||||||
Loan | 22 | Hilton Greenville | 1.5% | 119 | 360 | 359 | 08/11/2015 | 10/01/2015 | 09/01/2025 | No | 09/01/2025 | 70,264 | 843,165 | |||||||||||||||||||
Loan | 23 | The Phenix at Infinity Park II | 1.5% | 58 | 360 | 360 | 07/29/2015 | 09/06/2015 | 08/06/2020 | No | 08/06/2020 | 71,022 | 852,266 | 22 | ||||||||||||||||||
Loan | 24 | Cannon West Shopping Center | 1.4% | 119 | 360 | 360 | 08/26/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 69,390 | 832,681 | 23 | ||||||||||||||||||
Loan | 25 | HGI Kennewick | 1.4% | 119 | 360 | 359 | 08/14/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 65,080 | 780,962 | |||||||||||||||||||
Loan | 26 | Golf Center | 1.2% | 118 | 360 | 358 | 08/03/2015 | 09/06/2015 | 08/06/2025 | No | 08/06/2025 | 55,887 | 670,643 | |||||||||||||||||||
Loan | 27 | University Center | 1.2% | 120 | 360 | 360 | 09/04/2015 | 11/01/2015 | 10/01/2025 | Yes | 10/01/2030 | 55,600 | 667,204 | 36 |
A-1-3 |
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Pari Passu | Pari Passu | |||||||||||||||||||||||||||||||
% of | Remaining | Original | Remaining | First | Monthly | Annual | Companion Loan | Companion Loan | Remaining | |||||||||||||||||||||||
Property | Initial Pool | Term to | Amortization | Amortization | Origination | Payment | Maturity | ARD Loan | Final | Debt | Debt | Monthly Debt | Annual Debt | Interest Only | ||||||||||||||||||
Flag | ID | Property Name | Balance | Maturity or ARD | Term | Term | Date | Date | or ARD Date | (Yes/No) | Maturity Date | Service($)(8)(9) | Service($) (8)(9) | Service($) | Service($) | Period | ||||||||||||||||
Loan | 28 | The Parking Spot Portfolio | 1.2% | 119 | 360 | 359 | 08/19/2015 | 10/01/2015 | 09/01/2025 | No | 09/01/2025 | 56,520 | 678,241 | |||||||||||||||||||
Property | 28.01 | The Parking Spot Columbus | 0.7% | |||||||||||||||||||||||||||||
Property | 28.02 | The Parking Spot Buffalo | 0.5% | |||||||||||||||||||||||||||||
Loan | 29 | Hotel Preston | 1.1% | 118 | 360 | 358 | 08/05/2015 | 09/06/2015 | 08/06/2025 | No | 08/06/2025 | 52,546 | 630,553 | |||||||||||||||||||
Loan | 30 | Arrowhead Shopping Center | 1.1% | 118 | 360 | 360 | 07/29/2015 | 09/06/2015 | 08/06/2025 | No | 08/06/2025 | 50,897 | 610,764 | 22 | ||||||||||||||||||
Loan | 31 | Chestnut Street | 1.1% | 120 | 0 | 0 | 09/11/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 40,302 | 483,625 | 120 | ||||||||||||||||||
Loan | 32 | Renner Commerce Center Portfolio | 1.1% | 119 | 360 | 360 | 08/20/2015 | 10/01/2015 | 09/01/2025 | No | 09/01/2025 | 50,207 | 602,478 | 35 | ||||||||||||||||||
Property | 32.01 | Renner Commerce Center - South | 0.6% | |||||||||||||||||||||||||||||
Property | 32.02 | Renner Commerce Center - North | 0.5% | |||||||||||||||||||||||||||||
Loan | 33 | Rockford Crossing | 1.0% | 120 | 360 | 360 | 09/04/2015 | 11/01/2015 | 10/01/2025 | Yes | 10/01/2030 | 47,657 | 571,889 | 36 | ||||||||||||||||||
Loan | 34 | Shops at Randall Road | 1.0% | 119 | 360 | 360 | 08/26/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 46,832 | 561,980 | 35 | ||||||||||||||||||
Loan | 35 | Fort Myers Self Storage Portfolio | 0.9% | 119 | 360 | 360 | 08/28/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 46,557 | 558,689 | 23 | ||||||||||||||||||
Property | 35.01 | Estero Self Storage | 0.5% | |||||||||||||||||||||||||||||
Property | 35.02 | Valuguard Self Storage | 0.4% | |||||||||||||||||||||||||||||
Loan | 36 | Lancaster Towers | 0.9% | 120 | 360 | 360 | 09/11/2015 | 11/01/2015 | 10/01/2025 | No | 10/01/2025 | 41,828 | 501,939 | |||||||||||||||||||
Loan | 37 | Brookhaven MHP | 0.8% | 119 | 360 | 359 | 08/13/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 41,162 | 493,945 | |||||||||||||||||||
Loan | 38 | Park Villas Townhomes | 0.8% | 118 | 360 | 358 | 07/31/2015 | 09/01/2015 | 08/01/2025 | No | 08/01/2025 | 37,255 | 447,065 | |||||||||||||||||||
Loan | 39 | Evergreen Square | 0.8% | 119 | 360 | 360 | 08/21/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 35,245 | 422,941 | 35 | ||||||||||||||||||
Loan | 40 | Rio Verde & Sagewood Apartments Portfolio | 0.7% | 119 | 0 | 0 | 08/25/2015 | 10/01/2015 | 09/01/2025 | No | 09/01/2025 | 25,282 | 303,378 | 119 | ||||||||||||||||||
Property | 40.01 | Sagewood Apartments | 0.4% | |||||||||||||||||||||||||||||
Property | 40.02 | Rio Verde Apartments | 0.3% | |||||||||||||||||||||||||||||
Loan | 41 | CSRA Food Lion Portfolio II (37) | 0.7% | 119 | 360 | 360 | 08/27/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 33,907 | 406,885 | 29 | ||||||||||||||||||
Property | 41.01 | Kimberly Park | 0.4% | |||||||||||||||||||||||||||||
Property | 41.02 | Eden Center | 0.3% | |||||||||||||||||||||||||||||
Loan | 42 | La Galleria at the Mills | 0.7% | 119 | 360 | 359 | 08/20/2015 | 10/01/2015 | 09/01/2025 | No | 09/01/2025 | 31,749 | 380,982 | |||||||||||||||||||
Loan | 43 | Clive Distribution Center | 0.6% | 119 | 360 | 360 | 08/19/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 29,833 | 358,001 | 35 | ||||||||||||||||||
Loan | 44 | Days Inn | 0.6% | 120 | 300 | 300 | 09/16/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 35,338 | 424,057 | |||||||||||||||||||
Loan | 45 | Dollar Self Storage - Tucson | 0.6% | 119 | 360 | 359 | 08/05/2015 | 10/01/2015 | 09/01/2025 | No | 09/01/2025 | 29,699 | 356,385 | |||||||||||||||||||
Loan | 46 | The Meadows Apartments | 0.6% | 118 | 360 | 360 | 07/31/2015 | 09/01/2015 | 08/01/2025 | No | 08/01/2025 | 26,163 | 313,951 | 22 | ||||||||||||||||||
Loan | 47 | Witte Oaks Apartments | 0.5% | 119 | 300 | 299 | 08/10/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 28,286 | 339,430 | |||||||||||||||||||
Loan | 48 | Chambers Place | 0.5% | 118 | 360 | 360 | 08/06/2015 | 09/06/2015 | 08/06/2025 | No | 08/06/2025 | 24,714 | 296,571 | 22 | ||||||||||||||||||
Loan | 49 | Sonora Cascade MHC | 0.5% | 119 | 360 | 359 | 08/12/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 21,032 | 252,384 | |||||||||||||||||||
Loan | 50 | Walgreens Aurora, IN | 0.5% | 119 | 300 | 299 | 08/13/2015 | 10/01/2015 | 09/01/2025 | No | 09/01/2025 | 24,108 | 289,295 | |||||||||||||||||||
Loan | 51 | Empire Central | 0.4% | 119 | 360 | 360 | 08/19/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 19,771 | 237,257 | 35 | ||||||||||||||||||
Loan | 52 | Grove Park Shopping Center | 0.4% | 120 | 0 | 0 | 09/09/2015 | 11/01/2015 | 10/01/2025 | No | 10/01/2025 | 14,512 | 174,146 | 120 | ||||||||||||||||||
Loan | 53 | Camelot Medical Office & Dunkin’ Donuts | 0.4% | 120 | 360 | 360 | 09/16/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 20,454 | 245,447 | |||||||||||||||||||
Loan | 54 | Parkway Plaza Shopping Center | 0.4% | 120 | 0 | 0 | 09/15/2015 | 11/01/2015 | 10/01/2025 | No | 10/01/2025 | 13,514 | 162,171 | 120 | ||||||||||||||||||
Loan | 55 | Midvale Park Self Storage | 0.4% | 119 | 360 | 359 | 09/01/2015 | 10/01/2015 | 09/01/2025 | No | 09/01/2025 | 17,922 | 215,060 | |||||||||||||||||||
Loan | 56 | Fresenius Medical Care Lake City | 0.4% | 119 | 360 | 360 | 08/12/2015 | 10/01/2015 | 09/01/2025 | No | 09/01/2025 | 18,044 | 216,523 | 59 | ||||||||||||||||||
Loan | 57 | Bonita Springs Self Storage (38) | 0.3% | 120 | 360 | 360 | 09/14/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 16,520 | 198,235 | 36 | ||||||||||||||||||
Loan | 58 | Fresenius Medical Care Greece | 0.3% | 118 | 360 | 360 | 07/17/2015 | 09/01/2015 | 08/01/2025 | No | 08/01/2025 | 16,131 | 193,569 | 58 | ||||||||||||||||||
Loan | 59 | Storage Pros Lansing | 0.3% | 117 | 360 | 360 | 06/09/2015 | 08/01/2015 | 07/01/2025 | No | 07/01/2025 | 15,649 | 187,791 | 27 | ||||||||||||||||||
Loan | 60 | 4001 North Lincoln | 0.3% | 120 | 360 | 360 | 09/16/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 13,856 | 166,267 | |||||||||||||||||||
Loan | 61 | Terrace Oak Apartments | 0.3% | 119 | 360 | 360 | 08/12/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 12,886 | 154,628 | 11 | ||||||||||||||||||
Loan | 62 | Rhett at Remount | 0.3% | 119 | 360 | 359 | 08/05/2015 | 10/01/2015 | 09/01/2025 | No | 09/01/2025 | 13,056 | 156,675 | |||||||||||||||||||
Loan | 63 | Winchester Oaks Apartments | 0.2% | 120 | 360 | 360 | 09/03/2015 | 11/01/2015 | 10/01/2025 | No | 10/01/2025 | 8,806 | 105,668 | |||||||||||||||||||
Loan | 64 | All Star Storage | 0.2% | 120 | 360 | 360 | 09/11/2015 | 11/01/2015 | 10/01/2025 | No | 10/01/2025 | 7,610 | 91,319 | |||||||||||||||||||
Loan | 65 | Midvale Park RV Storage | 0.1% | 119 | 240 | 239 | 09/01/2015 | 10/01/2015 | 09/01/2025 | No | 09/01/2025 | 6,227 | 74,724 |
A-1-4 |
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | Crossed | FIRREA | Cut-Off | |||||||||||||||||||||||||||
Property | Initial Pool | Cash | With | Related | Underwritten | Underwritten | Grace | Payment | Appraised | Appraisal | Compliant | Date LTV | ||||||||||||||||||
Flag | ID | Property Name | Balance | Lockbox (10) | Management (11) | Other Loans | Borrower | NOI DSCR (8)(9)(12)(13) | NCF DSCR (8)(9)(12)(13) | Period (14) | Date | Value ($)(15) | As-of Date | (Yes/No) | Ratio (12)(13)(15) | |||||||||||||||
Loan | 1 | 11 Madison Avenue (35)(36)(37) | 7.5% | Hard | Springing | No | 3.97x | 3.89x | 0 | 6 | 2,350,000,000 | 07/01/2015 | Yes | 32.5% | ||||||||||||||||
Loan | 2 | NMS Los Angeles Multifamily Portfolio (35) | 7.0% | Springing Soft | Springing | No | 1.33x | 1.31x | 0 | 6 | 174,300,000 | 06/09/2015 | Yes | 68.8% | ||||||||||||||||
Property | 2.01 | Luxe at 1548 | 1.6% | 37,100,000 | 06/09/2015 | Yes | ||||||||||||||||||||||||
Property | 2.02 | Luxe at 1539 | 1.5% | 35,930,000 | 06/09/2015 | Yes | ||||||||||||||||||||||||
Property | 2.03 | Luxe at 1759 | 1.4% | 32,110,000 | 06/09/2015 | Yes | ||||||||||||||||||||||||
Property | 2.04 | NMS at Northridge | 1.3% | 29,290,000 | 06/09/2015 | Yes | ||||||||||||||||||||||||
Property | 2.05 | NMS at Warner Center | 0.9% | 20,920,000 | 06/09/2015 | Yes | ||||||||||||||||||||||||
Property | 2.06 | NMS at Superior | 0.4% | 8,450,000 | 06/09/2015 | Yes | ||||||||||||||||||||||||
Loan | 3 | Sandalwood Portfolio | 6.8% | Soft | Springing | No | 1.73x | 1.60x | 0 | 6 | 99,310,000 | 07/13/2015 | Yes | 63.3% | ||||||||||||||||
Property | 3.01 | Oaks of Northgate | 1.1% | 16,400,000 | 06/29/2015 | Yes | ||||||||||||||||||||||||
Property | 3.02 | Cimarron Crossing | 1.1% | 15,460,000 | 07/01/2015 | Yes | ||||||||||||||||||||||||
Property | 3.03 | Brandon Oaks | 1.1% | 17,200,000 | 06/29/2015 | Yes | ||||||||||||||||||||||||
Property | 3.04 | Sugar Tree Apartments | 1.0% | 13,650,000 | 07/02/2015 | Yes | ||||||||||||||||||||||||
Property | 3.05 | Arlington Oaks | 0.9% | 12,630,000 | 07/06/2015 | Yes | ||||||||||||||||||||||||
Property | 3.06 | Lakeshire Place | 0.9% | 14,140,000 | 07/07/2015 | Yes | ||||||||||||||||||||||||
Property | 3.07 | Sundance Apartments | 0.6% | 8,100,000 | 06/29/2015 | Yes | ||||||||||||||||||||||||
Loan | 4 | Atlanta Multifamily Portfolio (37) | 4.8% | Soft | In Place | No | 1.36x | 1.30x | 0 | 6 | 69,300,000 | 10/31/2016 | Yes | 64.9% | ||||||||||||||||
Property | 4.01 | Rosemont Cityview Apartments | 2.5% | 35,600,000 | 10/31/2016 | Yes | ||||||||||||||||||||||||
Property | 4.02 | Dawson Forest Apartments | 2.4% | 33,700,000 | 10/31/2016 | Yes | ||||||||||||||||||||||||
Loan | 5 | The Drake | 4.7% | Springing Soft | Springing | No | 1.29x | 1.28x | 0 | 6 | 65,300,000 | 06/19/2015 | Yes | 67.4% | ||||||||||||||||
Loan | 6 | Midwest Shopping Center Portfolio (37) | 4.1% | Hard | In Place | No | 1.73x | 1.53x | 0 | 6 | 56,630,000 | 04/03/2015 | Yes | 67.4% | ||||||||||||||||
Property | 6.01 | Home Depot Shopping Center | 1.2% | 15,250,000 | 04/01/2015 | Yes | ||||||||||||||||||||||||
Property | 6.02 | Calumet Center | 0.7% | 11,950,000 | 03/20/2015 | Yes | ||||||||||||||||||||||||
Property | 6.03 | Waterloo Plaza | 0.7% | 8,400,000 | 04/01/2015 | Yes | ||||||||||||||||||||||||
Property | 6.04 | Broadway Plaza | 0.6% | 7,800,000 | 03/18/2015 | Yes | ||||||||||||||||||||||||
Property | 6.05 | Kansas Center | 0.5% | 5,800,000 | 03/24/2015 | Yes | ||||||||||||||||||||||||
Property | 6.06 | Neil Street Shopping Center | 0.4% | 5,400,000 | 03/12/2015 | Yes | ||||||||||||||||||||||||
Loan | 7 | Intellicenter | 3.6% | Soft | Springing | No | 1.50x | 1.44x | 5 | 1 | 44,750,000 | 08/05/2015 | Yes | 75.0% | ||||||||||||||||
Loan | 8 | Hotel deLuxe | 3.5% | Hard | Springing | No | Yes - A | 2.08x | 1.85x | 0 | 6 | 47,200,000 | 04/10/2015 | Yes | 68.7% | |||||||||||||||
Loan | 9 | Green Valley Corporate Center | 2.9% | Hard | In Place | No | 2.02x | 1.96x | 0 | 6 | 42,280,000 | 06/12/2015 | Yes | 63.9% | ||||||||||||||||
Loan | 10 | Chase Park | 2.9% | Hard | Springing | No | 1.77x | 1.54x | 0 | 6 | 38,400,000 | 05/29/2015 | Yes | 69.3% | ||||||||||||||||
Loan | 11 | Cookie Factory Lofts | 2.5% | Springing Soft | Springing | No | 1.30x | 1.28x | 0 | 6 | 30,200,000 | 08/11/2015 | Yes | 76.2% | ||||||||||||||||
Loan | 12 | Windrift Apartments | 2.3% | Springing Soft | Springing | No | 1.38x | 1.31x | 0 | 6 | 28,700,000 | 06/30/2015 | Yes | 74.7% | ||||||||||||||||
Loan | 13 | Village Square at Kiln Creek | 2.2% | Soft | Springing | No | 1.57x | 1.43x | 5 | 1 | 29,600,000 | 07/10/2015 | Yes | 68.9% | ||||||||||||||||
Loan | 14 | Ocala Portfolio - AHIP | 2.0% | Hard | Springing | No | 3.77x | 3.34x | 0 | 6 | 31,000,000 | 06/01/2015 | Yes | 61.3% | ||||||||||||||||
Property | 14.01 | Courtyard Ocala | 0.9% | 13,000,000 | 06/01/2015 | Yes | ||||||||||||||||||||||||
Property | 14.02 | Residence Inn Ocala | 0.7% | 11,000,000 | 06/01/2015 | Yes | ||||||||||||||||||||||||
Property | 14.03 | Fairfield Inn & Suites Ocala | 0.5% | 7,000,000 | 06/01/2015 | Yes | ||||||||||||||||||||||||
Loan | 15 | Hilton Garden Inn Charlotte Airport | 2.0% | Springing Hard | Springing | No | 2.11x | 1.92x | 0 | 6 | 28,500,000 | 06/18/2015 | Yes | 64.8% | ||||||||||||||||
Loan | 16 | GSP MHP Portfolio I | 1.9% | Soft | Springing | No | Yes - B | 1.31x | 1.29x | 0 | 6 | 23,950,000 | 06/26/2015 | Yes | 74.9% | |||||||||||||||
Property | 16.01 | Indian Creek Village | 1.0% | 12,100,000 | 06/26/2015 | Yes | ||||||||||||||||||||||||
Property | 16.02 | Cedar Manor MHP | 1.0% | 11,850,000 | 06/26/2015 | Yes | ||||||||||||||||||||||||
Loan | 17 | A&H Pacific | 1.9% | Soft Springing Hard | Springing | No | 1.72x | 1.69x | 0 | 6 | 28,800,000 | 04/15/2015 | Yes | 61.1% | ||||||||||||||||
Loan | 18 | WHG Extended Stay Portfolio | 1.7% | Springing Hard | Springing | No | 2.19x | 1.95x | 0 | 6 | 22,000,000 | Various | Yes | 70.5% | ||||||||||||||||
Property | 18.01 | Sun Suites Louisville | 0.4% | 5,900,000 | 08/18/2015 | Yes | ||||||||||||||||||||||||
Property | 18.02 | HomeTowne Suites Columbia | 0.4% | 4,600,000 | 08/17/2015 | Yes | ||||||||||||||||||||||||
Property | 18.03 | Sun Suites Alexandria | 0.3% | 4,300,000 | 08/17/2015 | Yes | ||||||||||||||||||||||||
Property | 18.04 | HomeTowne Suites Montgomery | 0.3% | 3,600,000 | 08/19/2015 | Yes | ||||||||||||||||||||||||
Property | 18.05 | Sun Suites Gainesville | 0.3% | 3,600,000 | 08/18/2015 | Yes | ||||||||||||||||||||||||
Loan | 19 | Greater Boston Industrial Portfolio I | 1.7% | Soft | Springing | No | 1.36x | 1.26x | 0 | 6 | 21,100,000 | Various | Yes | 73.5% | ||||||||||||||||
Property | 19.01 | 65 Sunnyslope Avenue | 0.9% | 11,700,000 | 08/12/2015 | Yes | ||||||||||||||||||||||||
Property | 19.02 | 82 South Street | 0.5% | 6,100,000 | 08/06/2015 | Yes | ||||||||||||||||||||||||
Property | 19.03 | 19 Technology Drive | 0.3% | 3,300,000 | 08/10/2015 | Yes | ||||||||||||||||||||||||
Loan | 20 | Reserve at Conway | 1.6% | Springing Soft | Springing | No | 1.35x | 1.29x | 0 | 6 | 20,100,000 | 07/01/2016 | Yes | 73.6% | ||||||||||||||||
Loan | 21 | Chestnut Hill Apartments | 1.6% | Springing Soft | Springing | No | 2.32x | 2.12x | 5 | 1 | 23,900,000 | 07/29/2015 | Yes | 60.7% | ||||||||||||||||
Loan | 22 | Hilton Greenville | 1.5% | Hard | Springing | No | 3.42x | 3.02x | 5 | 1 | 28,700,000 | 06/26/2015 | Yes | 49.8% | ||||||||||||||||
Loan | 23 | The Phenix at Infinity Park II | 1.5% | Soft | Springing | No | 1.39x | 1.34x | 0 | 6 | 19,900,000 | 06/26/2015 | Yes | 71.6% | ||||||||||||||||
Loan | 24 | Cannon West Shopping Center | 1.4% | Hard | Springing | No | Yes - C | 1.49x | 1.38x | 0 | 6 | 17,350,000 | 07/21/2015 | Yes | 74.9% | |||||||||||||||
Loan | 25 | HGI Kennewick | 1.4% | Hard | Springing | No | 1.92x | 1.66x | 0 | 6 | 17,600,000 | 07/03/2015 | Yes | 72.0% | ||||||||||||||||
Loan | 26 | Golf Center | 1.2% | Springing Hard | Springing | No | 1.58x | 1.38x | 0 | 6 | 16,000,000 | 03/16/2015 | Yes | 69.8% | ||||||||||||||||
Loan | 27 | University Center | 1.2% | Springing Hard | Springing | No | Yes - D | 1.43x | 1.36x | 0 | 1 | 15,750,000 | 07/30/2015 | Yes | 70.0% |
A-1-5 |
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | Crossed | FIRREA | Cut-Off | |||||||||||||||||||||||||||
Property | Initial Pool | Cash | With | Related | Underwritten | Underwritten | Grace | Payment | Appraised | Appraisal | Compliant | Date LTV | ||||||||||||||||||
Flag | ID | Property Name | Balance | Lockbox (10) | Management (11) | Other Loans | Borrower | NOI DSCR (8)(9)(12)(13) | NCF DSCR (8)(9)(12)(13) | Period (14) | Date | Value ($)(15) | As-of Date | (Yes/No) | Ratio (12)(13)(15) | |||||||||||||||
Loan | 28 | The Parking Spot Portfolio | 1.2% | Springing Hard | Springing | No | 2.11x | 1.99x | 5 | 1 | 17,150,000 | Various | Yes | 63.2% | ||||||||||||||||
Property | 28.01 | The Parking Spot Columbus | 0.7% | 9,850,000 | 06/09/2015 | Yes | ||||||||||||||||||||||||
Property | 28.02 | The Parking Spot Buffalo | 0.5% | 7,300,000 | 06/05/2015 | Yes | ||||||||||||||||||||||||
Loan | 29 | Hotel Preston | 1.1% | Hard | Springing | No | Yes - A | 2.68x | 2.25x | 0 | 6 | 14,700,000 | 04/13/2015 | Yes | 69.6% | |||||||||||||||
Loan | 30 | Arrowhead Shopping Center | 1.1% | Springing Hard | Springing | No | 1.66x | 1.59x | 0 | 6 | 14,000,000 | 06/16/2015 | Yes | 72.9% | ||||||||||||||||
Loan | 31 | Chestnut Street | 1.1% | Springing Soft | Springing | No | Yes - E | 1.51x | 1.50x | 0 | 6 | 14,800,000 | 07/29/2015 | Yes | 67.6% | |||||||||||||||
Loan | 32 | Renner Commerce Center Portfolio | 1.1% | Springing Soft | Springing | No | 1.45x | 1.33x | 5 | 1 | 13,150,000 | 07/06/2015 | Yes | 75.0% | ||||||||||||||||
Property | 32.01 | Renner Commerce Center - South | 0.6% | 7,299,565 | 07/06/2015 | Yes | ||||||||||||||||||||||||
Property | 32.02 | Renner Commerce Center - North | 0.5% | 5,850,435 | 07/06/2015 | Yes | ||||||||||||||||||||||||
Loan | 33 | Rockford Crossing | 1.0% | Springing Hard | Springing | No | Yes - D | 1.63x | 1.36x | 0 | 1 | 13,800,000 | 07/31/2015 | Yes | 68.5% | |||||||||||||||
Loan | 34 | Shops at Randall Road | 1.0% | Soft Springing Hard | Springing | No | 1.48x | 1.38x | 0 | 6 | 12,000,000 | 05/19/2015 | Yes | 75.0% | ||||||||||||||||
Loan | 35 | Fort Myers Self Storage Portfolio | 0.9% | Hard | Springing | No | 1.32x | 1.29x | 0 | 6 | 11,680,000 | 07/21/2015 | Yes | 73.9% | ||||||||||||||||
Property | 35.01 | Estero Self Storage | 0.5% | 6,660,000 | 07/21/2015 | Yes | ||||||||||||||||||||||||
Property | 35.02 | Valuguard Self Storage | 0.4% | 5,020,000 | 07/21/2015 | Yes | ||||||||||||||||||||||||
Loan | 36 | Lancaster Towers | 0.9% | Soft | Springing | No | 1.54x | 1.44x | 0 | 1 | 12,000,000 | 08/25/2015 | Yes | 66.7% | ||||||||||||||||
Loan | 37 | Brookhaven MHP | 0.8% | Soft | Springing | No | Yes - B | 1.30x | 1.28x | 0 | 6 | 10,930,000 | 06/26/2015 | Yes | 72.3% | |||||||||||||||
Loan | 38 | Park Villas Townhomes | 0.8% | Soft | Springing | No | 1.52x | 1.35x | 5 | 1 | 9,300,000 | 06/03/2015 | Yes | 77.2% | ||||||||||||||||
Loan | 39 | Evergreen Square | 0.8% | Springing Hard | Springing | No | 1.88x | 1.68x | 0 | 6 | 9,900,000 | 06/27/2015 | Yes | 72.5% | ||||||||||||||||
Loan | 40 | Rio Verde & Sagewood Apartments Portfolio | 0.7% | Springing Soft | Springing | No | 2.47x | 2.32x | 0 | 1 | 10,300,000 | 06/26/2015 | Yes | 63.3% | ||||||||||||||||
Property | 40.01 | Sagewood Apartments | 0.4% | 5,100,000 | 06/26/2015 | Yes | ||||||||||||||||||||||||
Property | 40.02 | Rio Verde Apartments | 0.3% | 5,200,000 | 06/26/2015 | Yes | ||||||||||||||||||||||||
Loan | 41 | CSRA Food Lion Portfolio II (37) | 0.7% | Hard | Springing | No | Yes - F | 1.69x | 1.40x | 0 | 6 | 9,575,000 | Various | Yes | 67.9% | |||||||||||||||
Property | 41.01 | Kimberly Park | 0.4% | 4,925,000 | 07/01/2015 | Yes | ||||||||||||||||||||||||
Property | 41.02 | Eden Center | 0.3% | 4,650,000 | 07/02/2015 | Yes | ||||||||||||||||||||||||
Loan | 42 | La Galleria at the Mills | 0.7% | Soft | Springing | No | 1.43x | 1.31x | 5 | 1 | 9,700,000 | 04/30/2015 | Yes | 63.3% | ||||||||||||||||
Loan | 43 | Clive Distribution Center | 0.6% | Hard | Springing | No | Yes - C | 1.84x | 1.63x | 0 | 6 | 8,500,000 | 07/07/2015 | Yes | 70.6% | |||||||||||||||
Loan | 44 | Days Inn | 0.6% | Springing Hard | Springing | No | 2.56x | 2.30x | 0 | 6 | 10,000,000 | 07/09/2015 | Yes | 60.0% | ||||||||||||||||
Loan | 45 | Dollar Self Storage - Tucson | 0.6% | None | None | No | Yes - G | 1.71x | 1.67x | 0 | 1 | 9,370,000 | 06/11/2015 | Yes | 61.8% | |||||||||||||||
Loan | 46 | The Meadows Apartments | 0.6% | Springing Soft | Springing | No | 1.57x | 1.42x | 5 | 1 | 7,470,000 | 04/13/2015 | Yes | 69.6% | ||||||||||||||||
Loan | 47 | Witte Oaks Apartments | 0.5% | Soft | Springing | No | 1.68x | 1.57x | 0 | 6 | 6,820,000 | 07/14/2015 | Yes | 74.9% | ||||||||||||||||
Loan | 48 | Chambers Place | 0.5% | Springing Hard | Springing | No | 1.93x | 1.78x | 0 | 6 | 7,200,000 | 06/25/2015 | Yes | 69.4% | ||||||||||||||||
Loan | 49 | Sonora Cascade MHC | 0.5% | Springing Soft | Springing | No | 1.47x | 1.45x | 0 | 6 | 5,790,000 | 07/02/2015 | Yes | 73.3% | ||||||||||||||||
Loan | 50 | Walgreens Aurora, IN | 0.5% | Springing Soft | Springing | No | 1.31x | 1.30x | 0 | 1 | 6,750,000 | 06/20/2015 | Yes | 62.9% | ||||||||||||||||
Loan | 51 | Empire Central | 0.4% | Springing Hard | Springing | No | 1.90x | 1.59x | 0 | 6 | 5,600,000 | 07/02/2015 | Yes | 71.4% | ||||||||||||||||
Loan | 52 | Grove Park Shopping Center | 0.4% | Soft | Springing | No | Yes - H | 3.02x | 2.57x | 5 | 1 | 6,800,000 | 07/24/2015 | Yes | 55.9% | |||||||||||||||
Loan | 53 | Camelot Medical Office & Dunkin’ Donuts | 0.4% | Springing Hard | Springing | No | 1.37x | 1.25x | 0 | 6 | 5,040,000 | 08/07/2015 | Yes | 75.0% | ||||||||||||||||
Loan | 54 | Parkway Plaza Shopping Center | 0.4% | Soft | Springing | No | Yes - H | 2.51x | 2.17x | 5 | 1 | 6,050,000 | 07/27/2015 | Yes | 57.9% | |||||||||||||||
Loan | 55 | Midvale Park Self Storage | 0.4% | Springing Soft | Springing | No | Yes - G | 1.60x | 1.56x | 0 | 1 | 5,070,000 | 06/11/2015 | Yes | 68.9% | |||||||||||||||
Loan | 56 | Fresenius Medical Care Lake City | 0.4% | Hard | In Place | No | Yes - F | 1.65x | 1.56x | 0 | 1 | 5,700,000 | 07/07/2015 | Yes | 61.0% | |||||||||||||||
Loan | 57 | Bonita Springs Self Storage (38) | 0.3% | Springing Soft | Springing | No | 1.51x | 1.43x | 0 | 6 | 4,600,000 | 08/05/2015 | Yes | 69.6% | ||||||||||||||||
Loan | 58 | Fresenius Medical Care Greece | 0.3% | Hard | In Place | No | Yes - F | 1.52x | 1.43x | 0 | 1 | 5,300,000 | 06/24/2015 | Yes | 59.7% | |||||||||||||||
Loan | 59 | Storage Pros Lansing | 0.3% | None | None | No | 1.48x | 1.42x | 5 | 1 | 4,190,000 | 05/15/2015 | Yes | 72.6% | ||||||||||||||||
Loan | 60 | 4001 North Lincoln | 0.3% | Springing Hard | Springing | No | Yes - E | 1.34x | 1.27x | 0 | 6 | 3,600,000 | 08/10/2015 | Yes | 73.6% | |||||||||||||||
Loan | 61 | Terrace Oak Apartments | 0.3% | Springing Hard | Springing | No | 1.55x | 1.46x | 0 | 6 | 3,375,000 | 05/29/2015 | Yes | 75.0% | ||||||||||||||||
Loan | 62 | Rhett at Remount | 0.3% | Springing Hard | Springing | No | 1.69x | 1.44x | 5 | 1 | 3,380,000 | 07/06/2015 | Yes | 73.9% | ||||||||||||||||
Loan | 63 | Winchester Oaks Apartments | 0.2% | Springing Soft | Springing | No | 2.02x | 1.80x | 5 | 1 | 2,600,000 | 06/26/2015 | Yes | 65.0% | ||||||||||||||||
Loan | 64 | All Star Storage | 0.2% | None | None | No | 1.95x | 1.90x | 5 | 1 | 2,400,000 | 08/05/2015 | Yes | 58.3% | ||||||||||||||||
Loan | 65 | Midvale Park RV Storage | 0.1% | Springing Soft | Springing | No | Yes - G | 1.96x | 1.85x | 0 | 1 | 1,490,000 | 06/11/2015 | Yes | 64.8% |
A-1-6 |
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Net | ||||||||||||||||||||||||||
% of | Rentable Area | Units | ||||||||||||||||||||||||
Property | Initial Pool | LTV Ratio at | Year | Year | (SF/Units/ | of | ||||||||||||||||||||
Flag | ID | Property Name | Balance | Maturity or ARD (12)(13)(15) | Address | City | County | State | Zip Code | Built | Renovated | Rooms/Pads/Spaces)(4) | Measure | |||||||||||||
Loan | 1 | 11 Madison Avenue (35)(36)(37) | 7.5% | 32.5% | 11 Madison Avenue | New York | New York | NY | 10010 | 1932-1950 | 1994-1997, 2015 | 2,285,043 | Sq. Ft. | |||||||||||||
Loan | 2 | NMS Los Angeles Multifamily Portfolio (35) | 7.0% | 68.8% | Various | Various | Los Angeles | CA | Various | Various | Various | 384 | Units | |||||||||||||
Property | 2.01 | Luxe at 1548 | 1.6% | 1548 6th Street | Santa Monica | Los Angeles | CA | 90401 | 2009 | NAP | 54 | Units | ||||||||||||||
Property | 2.02 | Luxe at 1539 | 1.5% | 1539 4th Street | Santa Monica | Los Angeles | CA | 90401 | 2008 | NAP | 62 | Units | ||||||||||||||
Property | 2.03 | Luxe at 1759 | 1.4% | 1759 Beloit Avenue | Los Angeles | Los Angeles | CA | 90025 | 2009 | NAP | 61 | Units | ||||||||||||||
Property | 2.04 | NMS at Northridge | 1.3% | 9710 Zelzah Avenue | Northridge | Los Angeles | CA | 91325 | 1987 | 2015 | 102 | Units | ||||||||||||||
Property | 2.05 | NMS at Warner Center | 0.9% | 21021 Vanowen Street | Canoga Park | Los Angeles | CA | 91303 | 1988 | NAP | 79 | Units | ||||||||||||||
Property | 2.06 | NMS at Superior | 0.4% | 17089 Superior Street | Northridge | Los Angeles | CA | 91325 | 2003 | 2015 | 26 | Units | ||||||||||||||
Loan | 3 | Sandalwood Portfolio | 6.8% | 50.8% | Various | Various | Various | TX | Various | Various | Various | 1,644 | Units | |||||||||||||
Property | 3.01 | Oaks of Northgate | 1.1% | 8000 Oakdell Way | San Antonio | Bexar | TX | 78240 | 1985 | 2015 | 276 | Units | ||||||||||||||
Property | 3.02 | Cimarron Crossing | 1.1% | 9500 Jollyville Road | Austin | Travis | TX | 78759 | 1981 | NAP | 160 | Units | ||||||||||||||
Property | 3.03 | Brandon Oaks | 1.1% | 800 Vista Valet | San Antonio | Bexar | TX | 78216 | 1986 | 2015 | 276 | Units | ||||||||||||||
Property | 3.04 | Sugar Tree Apartments | 1.0% | 8050 South Padre Island Drive | Corpus Christi | Nueces | TX | 78412 | 1983 | NAP | 250 | Units | ||||||||||||||
Property | 3.05 | Arlington Oaks | 0.9% | 1111 Honeysuckle Way | Arlington | Tarrant | TX | 76011 | 1981 | NAP | 202 | Units | ||||||||||||||
Property | 3.06 | Lakeshire Place | 0.9% | 503 El Dorado Boulevard | Webster | Harris | TX | 77598 | 1979 | NAP | 304 | Units | ||||||||||||||
Property | 3.07 | Sundance Apartments | 0.6% | 4615 Gardendale Street | San Antonio | Bexar | TX | 78240 | 1972 | NAP | 176 | Units | ||||||||||||||
Loan | 4 | Atlanta Multifamily Portfolio (37) | 4.8% | 61.9% | Various | Various | Various | GA | Various | Various | 2015 | 588 | Units | |||||||||||||
Property | 4.01 | Rosemont Cityview Apartments | 2.5% | 1650 Barnes Mill Road | Marietta | Cobb | GA | 30062 | 1987 | 2015 | 320 | Units | ||||||||||||||
Property | 4.02 | Dawson Forest Apartments | 2.4% | 100 Green Forest Drive | Dawsonville | Dawson | GA | 30534 | 1999 | 2015 | 268 | Units | ||||||||||||||
Loan | 5 | The Drake | 4.7% | 62.8% | 1355 17th Street Northwest | Washington | District of Columbia | DC | 20036 | 2014 | NAP | 218 | Units | |||||||||||||
Loan | 6 | Midwest Shopping Center Portfolio (37) | 4.1% | 54.4% | Various | Various | Various | Various | Various | Various | Various | 889,413 | Sq. Ft. | |||||||||||||
Property | 6.01 | Home Depot Shopping Center | 1.2% | 4820-5132 Southeast 14th Street | Des Moines | Polk | IA | 50320 | 1991-2000 | 1999 | 260,801 | Sq. Ft. | ||||||||||||||
Property | 6.02 | Calumet Center | 0.7% | 1699 River Oaks West Road | Calumet City | Cook | IL | 60409 | 1974 | 2005 | 159,145 | Sq. Ft. | ||||||||||||||
Property | 6.03 | Waterloo Plaza | 0.7% | 2705 Crossroads Boulevard | Waterloo | Black Hawk | IA | 50702 | 1991 | NAP | 104,074 | Sq. Ft. | ||||||||||||||
Property | 6.04 | Broadway Plaza | 0.6% | 2501 South Broadway Street | Edmond | Oklahoma | OK | 73013 | 1994 | NAP | 103,027 | Sq. Ft. | ||||||||||||||
Property | 6.05 | Kansas Center | 0.5% | 4701-4707 East Bannister Road | Kansas City | Jackson | MO | 64137 | 1999 | NAP | 150,381 | Sq. Ft. | ||||||||||||||
Property | 6.06 | Neil Street Shopping Center | 0.4% | 2101 North Neil Street | Champaign | Champaign | IL | 61820 | 1984 | 2006 | 111,985 | Sq. Ft. | ||||||||||||||
Loan | 7 | Intellicenter | 3.6% | 65.9% | 12653 Telecom Drive | Tampa | Hillsborough | FL | 33637 | 2008 | NAP | 203,509 | Sq. Ft. | |||||||||||||
Loan | 8 | Hotel deLuxe | 3.5% | 55.8% | 729 Southwest 15th Avenue | Portland | Multnomah | OR | 97205 | 1912 | 2006 | 130 | Rooms | |||||||||||||
Loan | 9 | Green Valley Corporate Center | 2.9% | 54.7% | 2475, 2485 & 2495 Village View Drive | Henderson | Clark | NV | 89074 | 2004 | NAP | 163,052 | Sq. Ft. | |||||||||||||
Loan | 10 | Chase Park | 2.9% | 63.2% | 7600, 7700, 7715 & 7745 Chevy Chase Drive and 313 Anderson Lane | Austin | Travis | TX | 78752 | 1969-1975 | 2006-2015 | 288,382 | Sq. Ft. | |||||||||||||
Loan | 11 | Cookie Factory Lofts | 2.5% | 67.1% | 900 Terminal Place | Richmond | Richmond City | VA | 23220 | 1927 | 2014 | 178 | Units | |||||||||||||
Loan | 12 | Windrift Apartments | 2.3% | 64.0% | 949 Crowsnest Circle | Orlando | Orange | FL | 32825 | 1987 | 2011 | 288 | Units | |||||||||||||
Loan | 13 | Village Square at Kiln Creek | 2.2% | 57.0% | 5003A & 5000-5007 Victory Boulevard | Yorktown | York | VA | 23693 | 1993 | 2015 | 267,021 | Sq. Ft. | |||||||||||||
Loan | 14 | Ocala Portfolio - AHIP | 2.0% | 61.3% | Various | Ocala | Marion | FL | 34474 | Various | Various | 352 | Rooms | |||||||||||||
Property | 14.01 | Courtyard Ocala | 0.9% | 3712 Southwest 38th Avenue | Ocala | Marion | FL | 34474 | 1988 | 2012 | 169 | Rooms | ||||||||||||||
Property | 14.02 | Residence Inn Ocala | 0.7% | 3610 Southwest 38th Avenue | Ocala | Marion | FL | 34474 | 2007 | 2014 | 87 | Rooms | ||||||||||||||
Property | 14.03 | Fairfield Inn & Suites Ocala | 0.5% | 4101 Southwest 38th Court | Ocala | Marion | FL | 34474 | 1998 | 2011 | 96 | Rooms | ||||||||||||||
Loan | 15 | Hilton Garden Inn Charlotte Airport | 2.0% | 52.5% | 2400 Cascade Pointe Boulevard | Charlotte | Mecklenburg | NC | 28208 | 2013 | NAP | 117 | Rooms | |||||||||||||
Loan | 16 | GSP MHP Portfolio I | 1.9% | 61.1% | Various | Various | Various | PA | Various | Various | NAP | 510 | Pads | |||||||||||||
Property | 16.01 | Indian Creek Village | 1.0% | 5545 Sherman Drive | Macungie | Lehigh | PA | 18062 | 2001 | NAP | 194 | Pads | ||||||||||||||
Property | 16.02 | Cedar Manor MHP | 1.0% | 94 Florence Drive | Elizabethtown | Dauphin | PA | 17022 | 1970, 2004 | NAP | 316 | Pads | ||||||||||||||
Loan | 17 | A&H Pacific | 1.9% | 55.6% | 1151 Maple Avenue & 158 Santee Street | Los Angeles | Los Angeles | CA | 90015 | 1981, 1985 | NAP | 33,202 | Sq. Ft. | |||||||||||||
Loan | 18 | WHG Extended Stay Portfolio | 1.7% | 64.7% | Various | Various | Various | Various | Various | Various | 2014 | 547 | Rooms | |||||||||||||
Property | 18.01 | Sun Suites Louisville | 0.4% | 4540 Taylorsville Road | Louisville | Jefferson | KY | 40220 | 1997 | 2014 | 141 | Rooms | ||||||||||||||
Property | 18.02 | HomeTowne Suites Columbia | 0.4% | 350 Columbiana Drive | Columbia | Lexington | SC | 29212 | 1999 | 2014 | 88 | Rooms | ||||||||||||||
Property | 18.03 | Sun Suites Alexandria | 0.3% | 1000 MacArthur Drive | Alexandria | Rapides | LA | 71303 | 2005 | 2014 | 113 | Rooms | ||||||||||||||
Property | 18.04 | HomeTowne Suites Montgomery | 0.3% | 5047 Carmichael Road | Montgomery | Montgomery | AL | 36101 | 1998 | 2014 | 95 | Rooms | ||||||||||||||
Property | 18.05 | Sun Suites Gainesville | 0.3% | 1115 Jesse Jewell Parkway Southwest | Gainesville | Hall | GA | 30501 | 2000 | 2014 | 110 | Rooms | ||||||||||||||
Loan | 19 | Greater Boston Industrial Portfolio I | 1.7% | 65.2% | Various | Various | Various | MA | Various | Various | Various | 275,441 | Sq. Ft. | |||||||||||||
Property | 19.01 | 65 Sunnyslope Avenue | 0.9% | 65 Sunnyslope Avenue | Tewksbury | Middlesex | MA | 01876 | 1987 | NAP | 153,641 | Sq. Ft. | ||||||||||||||
Property | 19.02 | 82 South Street | 0.5% | 82 South Street | Hopkinton | Middlesex | MA | 01748 | 1987 | NAP | 70,600 | Sq. Ft. | ||||||||||||||
Property | 19.03 | 19 Technology Drive | 0.3% | 19 Technology Drive | Auburn | Worcester | MA | 01501 | 1969 | 2006 | 51,200 | Sq. Ft. | ||||||||||||||
Loan | 20 | Reserve at Conway | 1.6% | 67.5% | 3149 Landtree Place | Orlando | Orange | FL | 32812 | 1983 | 2015 | 220 | Units | |||||||||||||
Loan | 21 | Chestnut Hill Apartments | 1.6% | 60.7% | 7500 Bellerive Drive | Houston | Harris | TX | 77036 | 1982 | 2014 | 460 | Units | |||||||||||||
Loan | 22 | Hilton Greenville | 1.5% | 39.9% | 207 Southwest Greenville Boulevard | Greenville | Pitt | NC | 27834 | 1986 | 2015 | 141 | Rooms | |||||||||||||
Loan | 23 | The Phenix at Infinity Park II | 1.5% | 68.0% | 1000 South Dahlia Street and 4747 East Mississippi Avenue | Glendale | Arapahoe | CO | 80246 | 1972 | 2013 | 131 | Units | |||||||||||||
Loan | 24 | Cannon West Shopping Center | 1.4% | 64.7% | 6800, 6816 and 6818 West Gate Boulevard | Austin | Travis | TX | 78745 | 1981, 1983, 2001 | NAP | 129,969 | Sq. Ft. | |||||||||||||
Loan | 25 | HGI Kennewick | 1.4% | 58.5% | 701 North Young Street | Kennewick | Benton | WA | 99336 | 2004 | 2014 | 120 | Rooms | |||||||||||||
Loan | 26 | Golf Center | 1.2% | 56.3% | 19 West Golf Road | Hoffman Estates | Cook | IL | 60169 | 1990 | 2005 | 165,699 | Sq. Ft. | |||||||||||||
Loan | 27 | University Center | 1.2% | 61.2% | 3600, 3642 & 3752 University Boulevard West | Jacksonville | Duval | FL | 32217 | 1974 | 2013-2015 | 102,885 | Sq. Ft. |
A-1-7 |
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Net | ||||||||||||||||||||||||||
% of | Rentable Area | Units | ||||||||||||||||||||||||
Property | Initial Pool | LTV Ratio at | Year | Year | (SF/Units/ | of | ||||||||||||||||||||
Flag | ID | Property Name | Balance | Maturity or ARD (12)(13)(15) | Address | City | County | State | Zip Code | Built | Renovated | Rooms/Pads/Spaces)(4) | Measure | |||||||||||||
Loan | 28 | The Parking Spot Portfolio | 1.2% | 51.6% | Various | Various | Various | Various | Various | Various | Various | 3,189 | Spaces | |||||||||||||
Property | 28.01 | The Parking Spot Columbus | 0.7% | 1399 Stelzer Road and 2733 & 2737 Johnstown Road | Columbus | Franklin | OH | 43219 | 1967, 1970, 1995 | 2011 | 2,139 | Spaces | ||||||||||||||
Property | 28.02 | The Parking Spot Buffalo | 0.5% | 4099 Genesee Street | Buffalo | Erie | NY | 14225 | 1979 | NAP | 1,050 | Spaces | ||||||||||||||
Loan | 29 | Hotel Preston | 1.1% | 56.6% | 733 Envious Lane | Nashville | Davidson | TN | 37217 | 1973 | 2007 | 196 | Rooms | |||||||||||||
Loan | 30 | Arrowhead Shopping Center | 1.1% | 62.0% | 20165 North 67th Avenue | Glendale | Maricopa | AZ | 85308 | 1990 | NAP | 84,592 | Sq. Ft. | |||||||||||||
Loan | 31 | Chestnut Street | 1.1% | 67.6% | 1510-1512 Chestnut Street | Philadelphia | Philadelphia | PA | 19102 | 1923 | 2011 | 30 | Units | |||||||||||||
Loan | 32 | Renner Commerce Center Portfolio | 1.1% | 65.7% | Various | Lenexa | Johnson | KS | 66219 | Various | Various | 157,240 | Sq. Ft. | |||||||||||||
Property | 32.01 | Renner Commerce Center - South | 0.6% | 10831 Renner Boulevard | Lenexa | Johnson | KS | 66219 | 2014 | NAP | 89,064 | Sq. Ft. | ||||||||||||||
Property | 32.02 | Renner Commerce Center - North | 0.5% | 10801-10817 Renner Boulevard | Lenexa | Johnson | KS | 66219 | 1999 | 2014 | 68,176 | Sq. Ft. | ||||||||||||||
Loan | 33 | Rockford Crossing | 1.0% | 59.9% | 6630-6640 East State Street and 290-298 North Mill Road | Rockford | Winnebago | IL | 61108 | 1993 | 2000, 2014-2015 | 118,650 | Sq. Ft. | |||||||||||||
Loan | 34 | Shops at Randall Road | 1.0% | 66.0% | 364 Randall Road | South Elgin | Kane | IL | 60177 | 2001 | NAP | 78,213 | Sq. Ft. | |||||||||||||
Loan | 35 | Fort Myers Self Storage Portfolio | 0.9% | 64.0% | Various | Fort Myers | Lee | FL | Various | Various | NAP | 130,572 | Sq. Ft. | |||||||||||||
Property | 35.01 | Estero Self Storage | 0.5% | 19580 South Tamiami Trail | Fort Myers | Lee | FL | 33908 | 2000, 2003, 2006 | NAP | 62,070 | Sq. Ft. | ||||||||||||||
Property | 35.02 | Valuguard Self Storage | 0.4% | 13750 Plantation Road | Fort Myers | Lee | FL | 33912 | 2001, 2002 | NAP | 68,502 | Sq. Ft. | ||||||||||||||
Loan | 36 | Lancaster Towers | 0.9% | 54.4% | 1 Pleasant Avenue West | Lancaster | Erie | NY | 14086 | 1974 | NAP | 155 | Units | |||||||||||||
Loan | 37 | Brookhaven MHP | 0.8% | 59.0% | 332 Gosling Drive | York | York | PA | 17406 | 1970 | NAP | 171 | Pads | |||||||||||||
Loan | 38 | Park Villas Townhomes | 0.8% | 63.0% | 4974 South 76th East Avenue | Tulsa | Tulsa | OK | 74145 | 1970 | NAP | 259 | Units | |||||||||||||
Loan | 39 | Evergreen Square | 0.8% | 63.0% | 801 West Lake Avenue | Peoria | Peoria | IL | 61614 | 1984 | NAP | 110,726 | Sq. Ft. | |||||||||||||
Loan | 40 | Rio Verde & Sagewood Apartments Portfolio | 0.7% | 63.3% | Various | Cottonwood | Yavapai | AZ | 86326 | Various | Various | 160 | Units | |||||||||||||
Property | 40.01 | Sagewood Apartments | 0.4% | 330 North 10th Street | Cottonwood | Yavapai | AZ | 86326 | 1999 | NAP | 80 | Units | ||||||||||||||
Property | 40.02 | Rio Verde Apartments | 0.3% | 355 South 12th Street | Cottonwood | Yavapai | AZ | 86326 | 1996 | 2014 | 80 | Units | ||||||||||||||
Loan | 41 | CSRA Food Lion Portfolio II (37) | 0.7% | 59.1% | Various | Various | Various | NC | Various | Various | Various | 106,943 | Sq. Ft. | |||||||||||||
Property | 41.01 | Kimberly Park | 0.4% | 1005 Monroe Street | Carthage | Moore | NC | 28327 | 2000 | NAP | 47,900 | Sq. Ft. | ||||||||||||||
Property | 41.02 | Eden Center | 0.3% | 824 South Van Buren Road | Eden | Rockingham | NC | 27288 | 1990 | 2015 | 59,043 | Sq. Ft. | ||||||||||||||
Loan | 42 | La Galleria at the Mills | 0.7% | 51.5% | 4323 Mills Circle | Ontario | San Bernardino | CA | 91764 | 2005 | NAP | 20,470 | Sq. Ft. | |||||||||||||
Loan | 43 | Clive Distribution Center | 0.6% | 61.6% | 10400-10440 Hickman Road | Clive | Polk | IA | 50325 | 1980 | NAP | 260,000 | Sq. Ft. | |||||||||||||
Loan | 44 | Days Inn | 0.6% | 45.0% | 961 North Highway 89 | Page | Coconino | AZ | 86040 | 1998 | 2010, 2014 | 81 | Rooms | |||||||||||||
Loan | 45 | Dollar Self Storage - Tucson | 0.6% | 50.2% | 2443 & 2505 North Dragoon Street | Tucson | Pima | AZ | 85745 | 1996, 2005 | NAP | 85,760 | Sq. Ft. | |||||||||||||
Loan | 46 | The Meadows Apartments | 0.6% | 59.4% | 5066 Meadow Boulevard | Kalamazoo | Kalamazoo | MI | 49048 | 1996 | NAP | 128 | Units | |||||||||||||
Loan | 47 | Witte Oaks Apartments | 0.5% | 54.9% | 1655 Witte Road | Houston | Harris | TX | 77080 | 1964 | 2015 | 122 | Units | |||||||||||||
Loan | 48 | Chambers Place | 0.5% | 59.0% | 4840-4860 and 4878-4896 Chambers Road | Denver | Denver | CO | 80239 | 1984 | NAP | 37,891 | Sq. Ft. | |||||||||||||
Loan | 49 | Sonora Cascade MHC | 0.5% | 58.9% | 18330 Wards Ferry Road | Sonora | Tuolumne | CA | 95370 | 1970 | NAP | 113 | Pads | |||||||||||||
Loan | 50 | Walgreens Aurora, IN | 0.5% | 46.6% | 512 Green Boulevard | Aurora | Dearborn | IN | 47001 | 2006 | NAP | 14,820 | Sq. Ft. | |||||||||||||
Loan | 51 | Empire Central | 0.4% | 62.2% | 7000 Empire Central Drive | Houston | Harris | TX | 77040 | 1982 | NAP | 94,781 | Sq. Ft. | |||||||||||||
Loan | 52 | Grove Park Shopping Center | 0.4% | 55.9% | 1324-1360 & 1370 Chestnut Street | Orangeburg | Orangeburg | SC | 29115 | 1987, 1990 | 2014 | 106,557 | Sq. Ft. | |||||||||||||
Loan | 53 | Camelot Medical Office & Dunkin’ Donuts | 0.4% | 61.8% | 123-125 Conhocton Street & 315 East Denison Parkway | Corning | Steuben | NY | 14830 | 1985, 2003 | 2000 | 21,251 | Sq. Ft. | |||||||||||||
Loan | 54 | Parkway Plaza Shopping Center | 0.4% | 57.9% | 303-363 Venture Drive | Brunswick | Glynn | GA | 31525 | 2002 | NAP | 52,365 | Sq. Ft. | |||||||||||||
Loan | 55 | Midvale Park Self Storage | 0.4% | 56.0% | 6565 South Headley Road | Tucson | Pima | AZ | 85746 | 1996 | NAP | 57,608 | Sq. Ft. | |||||||||||||
Loan | 56 | Fresenius Medical Care Lake City | 0.4% | 56.0% | 179 Southwest Prosperity Place | Lake City | Columbia | FL | 32024 | 2015 | NAP | 10,377 | Sq. Ft. | |||||||||||||
Loan | 57 | Bonita Springs Self Storage (38) | 0.3% | 61.1% | 24381 South Tamiami Trail | Bonita Springs | Lee | FL | 34134 | 1998 | NAP | 43,360 | Sq. Ft. | |||||||||||||
Loan | 58 | Fresenius Medical Care Greece | 0.3% | 54.7% | 1570 Long Pond Road | Greece | Monroe | NY | 14626 | 2015 | NAP | 9,352 | Sq. Ft. | |||||||||||||
Loan | 59 | Storage Pros Lansing | 0.3% | 63.0% | 4724 South Creyts Road | Lansing | Eaton | MI | 48917 | 1988 | NAP | 67,525 | Sq. Ft. | |||||||||||||
Loan | 60 | 4001 North Lincoln | 0.3% | 60.1% | 4001-4037 North Lincoln Avenue | Chicago | Cook | IL | 60618 | 2002 | NAP | 9,896 | Sq. Ft. | |||||||||||||
Loan | 61 | Terrace Oak Apartments | 0.3% | 62.5% | 500 Smith Avenue | Lake Bluff | Lake Bluff | IL | 60044 | 1966 | 2014 | 48 | Units | |||||||||||||
Loan | 62 | Rhett at Remount | 0.3% | 60.3% | 1213 Remount Road | North Charleston | Charleston | SC | 29406 | 1983 | 1994, 2005, 2013 | 42,628 | Sq. Ft. | |||||||||||||
Loan | 63 | Winchester Oaks Apartments | 0.2% | 53.0% | 2902 Tuppence Drive | Columbus | Franklin | OH | 43232 | 1979, 1981 | 2011 | 78 | Units | |||||||||||||
Loan | 64 | All Star Storage | 0.2% | 48.1% | 896 North Westridge Drive | Saint George | Washington | UT | 84770 | 1992, 1999 | NAP | 46,014 | Sq. Ft. | |||||||||||||
Loan | 65 | Midvale Park RV Storage | 0.1% | 40.4% | 6569 South Headley Road | Tucson | Pima | AZ | 85746 | 2001 | NAP | 55,236 | Sq. Ft. |
A-1-8 |
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Loan per Net | ||||||||||||||||||||||||||
% of | Rentable Area | Second Most | Second | Second | Second | |||||||||||||||||||||
Property | Initial Pool | (SF/Units/Rooms/ | Prepayment Provisions | Most Recent Operating | Most Recent | Most Recent | Most Recent | Recent Operating | Most Recent | Most Recent | Most Recent | |||||||||||||||
Flag | ID | Property Name | Balance | Pads/Spaces) ($)(12)(13) | (# of payments) (16)(17)(18) | Statements Date | EGI ($) | Expenses($) | NOI($)(19) | Statements Date | EGI($) | Expenses($) | NOI($)(19) | |||||||||||||
Loan | 1 | 11 Madison Avenue (35)(36)(37) | 7.5% | 334 | L(25), D(88), O(7) | T-12 5/31/2015 | 70,265,498 | 23,876,107 | 46,389,392 | 12/31/2014 | 69,880,799 | 23,175,050 | 46,705,749 | |||||||||||||
Loan | 2 | NMS Los Angeles Multifamily Portfolio (35) | 7.0% | 312,500 | L(25), D(92), O(3) | T-12 6/30/2015 | 10,320,673 | 2,948,022 | 7,372,651 | 12/31/2014 | 9,892,397 | 2,879,423 | 7,012,973 | |||||||||||||
Property | 2.01 | Luxe at 1548 | 1.6% | 503,704 | T-12 6/30/2015 | 2,135,295 | 669,126 | 1,466,169 | 12/31/2014 | 1,967,666 | 621,427 | 1,346,239 | ||||||||||||||
Property | 2.02 | Luxe at 1539 | 1.5% | 424,194 | T-12 6/30/2015 | 2,172,533 | 603,926 | 1,568,607 | 12/31/2014 | 2,078,139 | 579,194 | 1,498,945 | ||||||||||||||
Property | 2.03 | Luxe at 1759 | 1.4% | 385,246 | T-12 6/30/2015 | 1,902,091 | 491,224 | 1,410,867 | 12/31/2014 | 1,832,189 | 478,574 | 1,353,615 | ||||||||||||||
Property | 2.04 | NMS at Northridge | 1.3% | 210,784 | T-12 6/30/2015 | 1,985,767 | 446,203 | 1,539,564 | 12/31/2014 | 1,917,154 | 466,678 | 1,450,475 | ||||||||||||||
Property | 2.05 | NMS at Warner Center | 0.9% | 193,671 | T-12 6/30/2015 | 1,518,404 | 558,900 | 959,504 | 12/31/2014 | 1,510,708 | 552,010 | 958,698 | ||||||||||||||
Property | 2.06 | NMS at Superior | 0.4% | 238,462 | T-12 6/30/2015 | 606,583 | 178,643 | 427,940 | 12/31/2014 | 586,541 | 181,540 | 405,001 | ||||||||||||||
Loan | 3 | Sandalwood Portfolio | 6.8% | 38,268 | L(25), D(90), O(5) | T-12 6/30/2015 | 14,456,214 | 8,439,113 | 6,017,102 | 12/31/2014 | 14,316,451 | 7,867,475 | 6,448,976 | |||||||||||||
Property | 3.01 | Oaks of Northgate | 1.1% | 38,172 | T-12 6/30/2015 | 2,124,235 | 1,236,767 | 887,468 | 12/31/2014 | 2,173,410 | 1,316,706 | 856,704 | ||||||||||||||
Property | 3.02 | Cimarron Crossing | 1.1% | 65,222 | T-12 6/30/2015 | 1,745,424 | 841,062 | 904,361 | 12/31/2014 | 1,690,648 | 846,139 | 844,509 | ||||||||||||||
Property | 3.03 | Brandon Oaks | 1.1% | 36,905 | T-12 6/30/2015 | 2,449,646 | 1,550,557 | 899,089 | 12/31/2014 | 2,465,669 | 1,398,242 | 1,067,427 | ||||||||||||||
Property | 3.04 | Sugar Tree Apartments | 1.0% | 37,748 | T-12 6/30/2015 | 2,417,107 | 1,498,627 | 918,480 | 12/31/2014 | 2,446,117 | 1,308,544 | 1,137,573 | ||||||||||||||
Property | 3.05 | Arlington Oaks | 0.9% | 42,021 | T-12 6/30/2015 | 1,718,190 | 967,041 | 751,150 | 12/31/2014 | 1,676,833 | 923,684 | 753,149 | ||||||||||||||
Property | 3.06 | Lakeshire Place | 0.9% | 27,100 | T-12 6/30/2015 | 2,552,318 | 1,454,089 | 1,098,229 | 12/31/2014 | 2,459,430 | 1,242,886 | 1,216,544 | ||||||||||||||
Property | 3.07 | Sundance Apartments | 0.6% | 31,774 | T-12 6/30/2015 | 1,449,293 | 890,969 | 558,325 | 12/31/2014 | 1,404,344 | 831,274 | 573,070 | ||||||||||||||
Loan | 4 | Atlanta Multifamily Portfolio (37) | 4.8% | 76,531 | L(25), D(31), O(4) | T-12 6/30/2015 | 6,048,756 | 2,413,321 | 3,635,435 | 12/31/2014 | 5,825,610 | 2,399,227 | 3,426,383 | |||||||||||||
Property | 4.01 | Rosemont Cityview Apartments | 2.5% | 71,875 | T-12 6/30/2015 | 3,091,830 | 1,249,070 | 1,842,761 | 12/31/2014 | 2,975,265 | 1,246,495 | 1,728,770 | ||||||||||||||
Property | 4.02 | Dawson Forest Apartments | 2.4% | 82,090 | T-12 6/30/2015 | 2,956,925 | 1,164,251 | 1,792,674 | 12/31/2014 | 2,850,345 | 1,152,732 | 1,697,613 | ||||||||||||||
Loan | 5 | The Drake | 4.7% | 201,835 | L(25), YM1(91), O(4) | |||||||||||||||||||||
Loan | 6 | Midwest Shopping Center Portfolio (37) | 4.1% | 43 | L(27), D(89), O(4) | T-9 7/31/2015 Ann. | 7,678,973 | 3,514,924 | 4,164,051 | 12/31/2014 | 7,599,429 | 3,354,015 | 4,245,414 | |||||||||||||
Property | 6.01 | Home Depot Shopping Center | 1.2% | 42 | T-9 7/31/2015 Ann. | 1,757,257 | 733,581 | 1,023,676 | 12/31/2014 | 1,822,737 | 710,391 | 1,112,346 | ||||||||||||||
Property | 6.02 | Calumet Center | 0.7% | 42 | T-9 7/31/2015 Ann. | 3,074,664 | 1,978,209 | 1,096,455 | 12/31/2014 | 2,951,869 | 1,836,614 | 1,115,254 | ||||||||||||||
Property | 6.03 | Waterloo Plaza | 0.7% | 62 | T-9 7/31/2015 Ann. | 1,074,305 | 349,044 | 725,261 | 12/31/2014 | 939,188 | 345,770 | 593,418 | ||||||||||||||
Property | 6.04 | Broadway Plaza | 0.6% | 56 | T-9 7/31/2015 Ann. | 651,925 | 91,243 | 560,683 | 12/31/2014 | 663,472 | 99,091 | 564,381 | ||||||||||||||
Property | 6.05 | Kansas Center | 0.5% | 30 | T-9 7/31/2015 Ann. | 583,173 | 207,684 | 375,489 | 12/31/2014 | 678,885 | 200,423 | 478,462 | ||||||||||||||
Property | 6.06 | Neil Street Shopping Center | 0.4% | 34 | T-9 7/31/2015 Ann. | 537,649 | 155,163 | 382,487 | 12/31/2014 | 543,278 | 161,726 | 381,553 | ||||||||||||||
Loan | 7 | Intellicenter | 3.6% | 165 | L(25), YM1(92), O(3) | T-12 6/30/2015 | 4,387,406 | 1,511,286 | 2,876,120 | 12/31/2014 | 3,840,966 | 1,500,125 | 2,340,841 | |||||||||||||
Loan | 8 | Hotel deLuxe | 3.5% | 249,383 | L(26), D(89), O(5) | T-12 6/30/2015 | 11,276,723 | 7,116,911 | 4,159,812 | 12/31/2014 | 10,392,584 | 6,780,756 | 3,611,828 | |||||||||||||
Loan | 9 | Green Valley Corporate Center | 2.9% | 166 | L(26), D(90), O(4) | T-12 5/31/2015 | 4,166,068 | 754,456 | 3,411,612 | 12/31/2014 | 4,194,304 | 770,686 | 3,423,618 | |||||||||||||
Loan | 10 | Chase Park | 2.9% | 92 | L(25), D(91), O(4) | T-12 3/31/2015 | 4,705,786 | 2,266,517 | 2,439,268 | 12/31/2014 | 4,515,925 | 2,270,587 | 2,245,338 | |||||||||||||
Loan | 11 | Cookie Factory Lofts | 2.5% | 129,213 | L(24), D(92), O(4) | T-3 7/31/2015 Ann. | 1,911,063 | 754,307 | 1,156,756 | |||||||||||||||||
Loan | 12 | Windrift Apartments | 2.3% | 74,479 | L(25), D(91), O(4) | T-12 6/30/2015 | 2,926,427 | 1,185,180 | 1,741,247 | 12/31/2014 | 2,825,688 | 1,098,132 | 1,727,556 | |||||||||||||
Loan | 13 | Village Square at Kiln Creek | 2.2% | 76 | L(25), D(91), O(4) | T-12 6/30/2015 | 2,516,829 | 529,361 | 1,987,468 | 12/31/2014 | 2,523,327 | 508,242 | 2,015,085 | |||||||||||||
Loan | 14 | Ocala Portfolio - AHIP | 2.0% | 53,977 | L(26), D(90), O(4) | T-12 4/30/2015 | 8,647,140 | 5,289,000 | 3,358,140 | 12/31/2014 | 8,114,280 | 5,148,000 | 2,966,280 | |||||||||||||
Property | 14.01 | Courtyard Ocala | 0.9% | 47,146 | T-12 4/30/2015 | 4,083,000 | 2,528,000 | 1,555,000 | 12/31/2014 | 3,813,000 | 2,446,000 | 1,367,000 | ||||||||||||||
Property | 14.02 | Residence Inn Ocala | 0.7% | 77,494 | T-12 4/30/2015 | 2,581,000 | 1,499,000 | 1,082,000 | 12/31/2014 | 2,438,000 | 1,475,000 | 963,000 | ||||||||||||||
Property | 14.03 | Fairfield Inn & Suites Ocala | 0.5% | 44,691 | T-12 4/30/2015 | 1,983,140 | 1,262,000 | 721,140 | 12/31/2014 | 1,863,280 | 1,227,000 | 636,280 | ||||||||||||||
Loan | 15 | Hilton Garden Inn Charlotte Airport | 2.0% | 157,913 | L(25), D(91), O(4) | T-12 8/31/2015 | 5,611,210 | 3,215,096 | 2,396,114 | 12/31/2014 | 4,717,721 | 2,990,916 | 1,726,805 | |||||||||||||
Loan | 16 | GSP MHP Portfolio I | 1.9% | 35,152 | L(25), D(92), O(3) | T-12 6/30/2015 | 2,230,934 | 752,073 | 1,478,861 | 12/31/2014 | 2,138,694 | 891,230 | 1,247,462 | |||||||||||||
Property | 16.01 | Indian Creek Village | 1.0% | 46,693 | T-12 6/30/2015 | 1,118,674 | 259,362 | 859,311 | 12/31/2014 | 1,059,277 | 275,780 | 783,496 | ||||||||||||||
Property | 16.02 | Cedar Manor MHP | 1.0% | 28,066 | T-12 6/30/2015 | 1,112,260 | 492,711 | 619,549 | 12/31/2014 | 1,079,416 | 615,450 | 463,965 | ||||||||||||||
Loan | 17 | A&H Pacific | 1.9% | 530 | L(25), D(91), O(4) | T-12 6/30/2015 | 2,175,711 | 282,647 | 1,893,064 | 12/31/2014 | 2,206,646 | 305,689 | 1,900,957 | |||||||||||||
Loan | 18 | WHG Extended Stay Portfolio | 1.7% | 28,336 | L(24), D(32), O(4) | T-12 6/30/2015 | 5,860,679 | 3,750,502 | 2,110,177 | 12/31/2014 | 5,475,180 | 3,715,216 | 1,759,964 | |||||||||||||
Property | 18.01 | Sun Suites Louisville | 0.4% | 28,901 | ||||||||||||||||||||||
Property | 18.02 | HomeTowne Suites Columbia | 0.4% | 38,636 | ||||||||||||||||||||||
Property | 18.03 | Sun Suites Alexandria | 0.3% | 26,549 | ||||||||||||||||||||||
Property | 18.04 | HomeTowne Suites Montgomery | 0.3% | 26,842 | ||||||||||||||||||||||
Property | 18.05 | Sun Suites Gainesville | 0.3% | 22,500 | ||||||||||||||||||||||
Loan | 19 | Greater Boston Industrial Portfolio I | 1.7% | 56 | L(25), D(90), O(5) | T-12 5/31/2015 | 2,135,761 | 605,371 | 1,530,390 | 12/31/2014 | 2,108,958 | 605,619 | 1,503,339 | |||||||||||||
Property | 19.01 | 65 Sunnyslope Avenue | 0.9% | 55 | T-12 5/31/2015 | 1,116,716 | 284,462 | 832,254 | 12/31/2014 | 1,095,445 | 273,081 | 822,363 | ||||||||||||||
Property | 19.02 | 82 South Street | 0.5% | 62 | T-12 5/31/2015 | 622,122 | 166,210 | 455,912 | 12/31/2014 | 627,922 | 174,906 | 453,017 | ||||||||||||||
Property | 19.03 | 19 Technology Drive | 0.3% | 53 | T-12 5/31/2015 | 396,923 | 154,699 | 242,224 | 12/31/2014 | 385,591 | 157,632 | 227,959 | ||||||||||||||
Loan | 20 | Reserve at Conway | 1.6% | 67,273 | L(25), D(91), O(4) | T-12 5/31/2015 | 2,256,770 | 1,109,340 | 1,147,430 | 12/31/2014 | 2,172,063 | 1,089,503 | 1,082,560 | |||||||||||||
Loan | 21 | Chestnut Hill Apartments | 1.6% | 31,522 | L(24), D(93), O(3) | T-12 7/31/2015 | 3,153,497 | 1,420,399 | 1,733,098 | T-12 3/31/2014 | 2,849,959 | 2,091,125 | 758,834 | |||||||||||||
Loan | 22 | Hilton Greenville | 1.5% | 101,278 | L(25), D(92), O(3) | T-12 6/30/2015 | 8,533,124 | 5,656,683 | 2,876,440 | 12/31/2014 | 8,009,157 | 5,388,645 | 2,620,513 | |||||||||||||
Loan | 23 | The Phenix at Infinity Park II | 1.5% | 108,779 | L(26), D(30), O(4) | T-3 6/30/2015 Ann. | 1,788,782 | 672,652 | 1,116,130 | T-12 6/30/2015 | 1,163,198 | 522,313 | 640,884 | |||||||||||||
Loan | 24 | Cannon West Shopping Center | 1.4% | 100 | L(25), D(91), O(4) | T-12 6/30/2015 | 1,858,635 | 275,609 | 1,583,026 | 12/31/2014 | 1,673,254 | 509,899 | 1,163,355 | |||||||||||||
Loan | 25 | HGI Kennewick | 1.4% | 105,655 | L(25), D(90), O(5) | T-12 6/30/2015 | 4,150,300 | 2,624,231 | 1,526,069 | 12/31/2014 | 4,115,996 | 2,573,759 | 1,542,237 | |||||||||||||
Loan | 26 | Golf Center | 1.2% | 67 | L(26), D(89), O(5) | T-12 4/30/2015 | 2,239,009 | 1,343,251 | 895,759 | 12/31/2014 | 2,352,350 | 1,303,781 | 1,048,569 | |||||||||||||
Loan | 27 | University Center | 1.2% | 107 | L(25), YM1(92), O(3) | 12/31/2014 | 859,111 | 324,650 | 534,461 | 12/31/2013 | 493,124 | 286,964 | 206,160 |
A-1-9 |
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Loan per Net | ||||||||||||||||||||||||||
% of | Rentable Area | Second Most | Second | Second | Second | |||||||||||||||||||||
Property | Initial Pool | (SF/Units/Rooms/ | Prepayment Provisions | Most Recent Operating | Most Recent | Most Recent | Most Recent | Recent Operating | Most Recent | Most Recent | Most Recent | |||||||||||||||
Flag | ID | Property Name | Balance | Pads/Spaces) ($)(12)(13) | (# of payments) (16)(17)(18) | Statements Date | EGI ($) | Expenses($) | NOI($)(19) | Statements Date | EGI($) | Expenses($) | NOI($)(19) | |||||||||||||
Loan | 28 | The Parking Spot Portfolio | 1.2% | 3,401 | L(25), D(92), O(3) | T-12 6/30/2015 | 4,879,397 | 3,089,567 | 1,789,830 | 12/31/2014 | 4,743,618 | 3,218,816 | 1,524,802 | |||||||||||||
Property | 28.01 | The Parking Spot Columbus | 0.7% | 2,912 | T-12 6/30/2015 | 2,658,368 | 1,705,624 | 952,744 | 12/31/2014 | 2,553,619 | 1,762,039 | 791,580 | ||||||||||||||
Property | 28.02 | The Parking Spot Buffalo | 0.5% | 4,397 | T-12 6/30/2015 | 2,221,029 | 1,383,943 | 837,086 | 12/31/2014 | 2,189,999 | 1,456,777 | 733,222 | ||||||||||||||
Loan | 29 | Hotel Preston | 1.1% | 52,167 | L(26), D(89), O(5) | T-12 6/30/2015 | 6,810,763 | 5,178,882 | 1,631,881 | 12/31/2014 | 6,382,595 | 4,795,163 | 1,587,432 | |||||||||||||
Loan | 30 | Arrowhead Shopping Center | 1.1% | 121 | L(26), D(90), O(4) | T-12 5/31/2015 | 1,225,328 | 271,700 | 953,628 | 12/31/2014 | 1,201,794 | 347,280 | 854,514 | |||||||||||||
Loan | 31 | Chestnut Street | 1.1% | 333,333 | L(24), D(92), O(4) | 12/31/2014 | 943,144 | 160,453 | 782,691 | 12/31/2013 | 909,190 | 166,275 | 742,915 | |||||||||||||
Loan | 32 | Renner Commerce Center Portfolio | 1.1% | 63 | L(25), D(91), O(4) | T-12 6/30/2015 | 1,386,125 | 396,728 | 989,397 | 12/31/2014 | 1,157,519 | 348,146 | 809,373 | |||||||||||||
Property | 32.01 | Renner Commerce Center - South | 0.6% | 61 | T-12 6/30/2015 | 690,106 | 130,307 | 559,799 | 12/31/2014 | 554,467 | 101,111 | 453,356 | ||||||||||||||
Property | 32.02 | Renner Commerce Center - North | 0.5% | 64 | T-12 6/30/2015 | 696,019 | 266,421 | 429,598 | 12/31/2014 | 603,052 | 247,035 | 356,017 | ||||||||||||||
Loan | 33 | Rockford Crossing | 1.0% | 80 | L(25), YM1(92), O(3) | T-12 3/31/2015 | 579,235 | 565,945 | 13,290 | 12/31/2014 | 586,743 | 616,667 | -29,924 | |||||||||||||
Loan | 34 | Shops at Randall Road | 1.0% | 115 | L(25), D(91), O(4) | T-6 6/30/2015 Ann. | 1,297,453 | 479,724 | 817,729 | 12/31/2014 | 1,223,696 | 453,328 | 770,369 | |||||||||||||
Loan | 35 | Fort Myers Self Storage Portfolio | 0.9% | 66 | L(25), D(90), O(5) | T-12 7/31/2015 | 1,130,956 | 302,035 | 828,923 | 12/31/2014 | 1,068,400 | 357,272 | 711,128 | |||||||||||||
Property | 35.01 | Estero Self Storage | 0.5% | 79 | T-12 7/31/2015 | 642,429 | 121,136 | 521,294 | 12/31/2014 | 608,497 | 166,301 | 442,196 | ||||||||||||||
Property | 35.02 | Valuguard Self Storage | 0.4% | 54 | T-12 5/30/2015 | 488,527 | 180,899 | 307,629 | 12/31/2014 | 459,903 | 190,971 | 268,932 | ||||||||||||||
Loan | 36 | Lancaster Towers | 0.9% | 51,613 | L(24), D(93), O(3) | T-10 7/31/2015 Ann. | 1,512,654 | 744,373 | 768,281 | 12/31/2014 | 1,484,813 | 636,637 | 848,176 | |||||||||||||
Loan | 37 | Brookhaven MHP | 0.8% | 46,228 | L(25), D(92), O(3) | T-12 6/30/2015 | 954,270 | 311,185 | 643,085 | 12/31/2014 | 957,605 | 321,946 | 635,659 | |||||||||||||
Loan | 38 | Park Villas Townhomes | 0.8% | 27,732 | L(26), D(91), O(3) | T-12 5/31/2015 | 1,863,657 | 1,217,483 | 646,174 | 12/31/2014 | 1,866,640 | 1,236,709 | 629,931 | |||||||||||||
Loan | 39 | Evergreen Square | 0.8% | 65 | L(25), D(90), O(5) | T-12 5/31/2015 | 1,184,671 | 359,209 | 825,461 | 12/31/2014 | 1,139,193 | 347,583 | 791,610 | |||||||||||||
Loan | 40 | Rio Verde & Sagewood Apartments Portfolio | 0.7% | 40,744 | L(25), D(92), O(3) | T-12 6/30/2015 | 1,267,988 | 537,381 | 730,607 | 12/31/2014 | 1,211,457 | 540,574 | 670,883 | |||||||||||||
Property | 40.01 | Sagewood Apartments | 0.4% | 40,863 | T-12 6/30/2015 | 633,401 | 264,168 | 369,233 | 12/31/2014 | 615,930 | 261,772 | 354,158 | ||||||||||||||
Property | 40.02 | Rio Verde Apartments | 0.3% | 40,625 | T-12 6/30/2015 | 634,587 | 273,213 | 361,374 | 12/31/2014 | 595,527 | 278,802 | 316,725 | ||||||||||||||
Loan | 41 | CSRA Food Lion Portfolio II (37) | 0.7% | 61 | L(25), D(92), O(3) | 12/31/2014 | 815,893 | 238,769 | 577,124 | 12/31/2013 | 809,850 | 238,242 | 571,608 | |||||||||||||
Property | 41.01 | Kimberly Park | 0.4% | 70 | 12/31/2014 | 485,489 | 129,894 | 355,595 | 12/31/2013 | 477,188 | 127,811 | 349,377 | ||||||||||||||
Property | 41.02 | Eden Center | 0.3% | 53 | 12/31/2014 | 330,404 | 108,875 | 221,529 | 12/31/2013 | 332,662 | 110,431 | 222,231 | ||||||||||||||
Loan | 42 | La Galleria at the Mills | 0.7% | 300 | L(25), D(92), O(3) | T-7 7/31/2015 Ann. | 684,465 | 138,723 | 545,742 | 12/31/2014 | 685,719 | 153,897 | 531,822 | |||||||||||||
Loan | 43 | Clive Distribution Center | 0.6% | 23 | L(25), D(90), O(5) | T-12 3/31/2015 | 1,171,302 | 347,822 | 823,480 | 12/31/2014 | 1,196,858 | 396,668 | 800,190 | |||||||||||||
Loan | 44 | Days Inn | 0.6% | 74,074 | L(24), D(92), O(4) | T-12 7/31/2015 | 2,790,645 | 1,710,738 | 1,079,907 | 12/31/2014 | 2,770,000 | 1,635,279 | 1,134,721 | |||||||||||||
Loan | 45 | Dollar Self Storage - Tucson | 0.6% | 68 | L(25), D(92), O(3) | T-12 5/31/2015 | 1,021,038 | 399,089 | 621,949 | 12/31/2014 | 1,018,191 | 396,157 | 622,034 | |||||||||||||
Loan | 46 | The Meadows Apartments | 0.6% | 40,625 | L(26), D(91), O(3) | T-12 6/30/2015 | 1,060,391 | 454,706 | 605,684 | 12/31/2014 | 1,021,649 | 452,820 | 568,830 | |||||||||||||
Loan | 47 | Witte Oaks Apartments | 0.5% | 41,850 | L(25), D(90), O(5) | T-12 6/30/2015 | 1,176,790 | 576,367 | 600,423 | 12/31/2014 | 1,058,127 | 540,800 | 517,327 | |||||||||||||
Loan | 48 | Chambers Place | 0.5% | 132 | L(26), D(90), O(4) | T-12 6/30/2015 | 857,802 | 256,711 | 601,091 | 12/31/2014 | 807,286 | 254,725 | 552,561 | |||||||||||||
Loan | 49 | Sonora Cascade MHC | 0.5% | 37,559 | L(25), D(90), O(5) | T-12 6/30/2015 | 570,944 | 214,615 | 356,329 | 12/31/2014 | 581,710 | 226,596 | 355,114 | |||||||||||||
Loan | 50 | Walgreens Aurora, IN | 0.5% | 286 | L(25), D(92), O(3) | |||||||||||||||||||||
Loan | 51 | Empire Central | 0.4% | 42 | L(36), YM1(79), O(5) | T-12 5/31/2015 | 724,347 | 316,287 | 408,060 | 12/31/2014 | 685,454 | 260,388 | 425,066 | |||||||||||||
Loan | 52 | Grove Park Shopping Center | 0.4% | 36 | L(24), D(93), O(3) | T-12 5/31/2015 | 783,782 | 242,454 | 541,329 | 12/31/2014 | 778,589 | 236,545 | 542,044 | |||||||||||||
Loan | 53 | Camelot Medical Office & Dunkin’ Donuts | 0.4% | 178 | L(24), D(93), O(3) | T-12 6/30/2015 | 512,510 | 186,550 | 325,960 | 12/31/2014 | 523,312 | 185,450 | 337,862 | |||||||||||||
Loan | 54 | Parkway Plaza Shopping Center | 0.4% | 67 | L(24), D(93), O(3) | T-12 5/31/2015 | 588,003 | 153,530 | 434,473 | 12/31/2014 | 632,939 | 161,253 | 471,687 | |||||||||||||
Loan | 55 | Midvale Park Self Storage | 0.4% | 61 | L(25), D(92), O(3) | T-12 6/30/2015 | 570,491 | 216,317 | 354,174 | 12/31/2014 | 565,459 | 204,284 | 361,175 | |||||||||||||
Loan | 56 | Fresenius Medical Care Lake City | 0.4% | 335 | L(25), D(92), O(3) | |||||||||||||||||||||
Loan | 57 | Bonita Springs Self Storage (38) | 0.3% | 74 | L(24), D(92), O(4) | T-3 6/30/2015 Ann. | 533,403 | 218,205 | 315,198 | 12/31/2014 | 467,900 | 197,259 | 270,641 | |||||||||||||
Loan | 58 | Fresenius Medical Care Greece | 0.3% | 338 | L(26), D(91), O(3) | |||||||||||||||||||||
Loan | 59 | Storage Pros Lansing | 0.3% | 45 | L(27), D(90), O(3) | T-12 3/31/2015 | 472,213 | 160,532 | 311,681 | 12/31/2014 | 466,010 | 159,101 | 306,909 | |||||||||||||
Loan | 60 | 4001 North Lincoln | 0.3% | 268 | L(24), D(92), O(4) | T-6 7/31/2015 Ann. | 327,142 | 99,649 | 227,493 | 12/31/2014 | 241,110 | 107,492 | 133,618 | |||||||||||||
Loan | 61 | Terrace Oak Apartments | 0.3% | 52,734 | L(24), YM2(92), O(4) | T-12 6/30/2015 | 500,072 | 248,150 | 251,922 | 12/31/2014 | 493,449 | 256,123 | 237,326 | |||||||||||||
Loan | 62 | Rhett at Remount | 0.3% | 59 | L(25), YM1(92), O(3) | T-12 6/30/2015 | 418,582 | 116,954 | 301,628 | 12/31/2014 | 407,902 | 117,012 | 290,890 | |||||||||||||
Loan | 63 | Winchester Oaks Apartments | 0.2% | 21,667 | L(24), D(93), O(3) | T-12 7/31/2015 | 499,468 | 265,157 | 234,312 | 12/31/2014 | 494,952 | 253,842 | 241,110 | |||||||||||||
Loan | 64 | All Star Storage | 0.2% | 30 | L(24), D(93), O(3) | T-12 7/31/2015 | 263,893 | 49,004 | 214,889 | 12/31/2014 | 243,000 | 46,013 | 196,987 | |||||||||||||
Loan | 65 | Midvale Park RV Storage | 0.1% | 17 | L(25), D(92), O(3) | T-12 6/30/2015 | 245,746 | 101,562 | 144,184 | 12/31/2014 | 254,914 | 96,586 | 158,328 |
A-1-10 |
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | Third Most | Third | Third | Third | ||||||||||||||||||||||||||
Property | Initial Pool | Recent Operating | Most Recent | Most Recent | Most Recent | Underwritten NOI | Underwritten NCF | Underwritten | Underwritten | Underwritten | Underwritten | Underwritten | Underwritten | |||||||||||||||||
Flag | ID | Property Name | Balance | Statements Date | EGI($) | Expenses($) | NOI($) | Debt Yield (12)(13) | Debt Yield (12)(13) | Revenue($) | EGI($) | Expenses($) | NOI ($) | Reserves($) | TI/LC($) | |||||||||||||||
Loan | 1 | 11 Madison Avenue (35)(36)(37) | 7.5% | 12/31/2013 | 69,947,780 | 22,896,733 | 47,051,047 | 14.3% | 14.1% | 154,647,005 | 163,039,756 | 53,546,158 | 109,493,598 | 457,009 | 1,605,307 | |||||||||||||||
Loan | 2 | NMS Los Angeles Multifamily Portfolio (35) | 7.0% | 12/31/2013 | 8,993,591 | 2,958,570 | 6,035,021 | 6.7% | 6.6% | 11,281,164 | 10,840,983 | 2,859,551 | 7,981,432 | 96,000 | ||||||||||||||||
Property | 2.01 | Luxe at 1548 | 1.6% | 12/31/2013 | 1,756,371 | 666,283 | 1,090,089 | 2,356,452 | 2,295,351 | 664,861 | 1,630,490 | 13,500 | ||||||||||||||||||
Property | 2.02 | Luxe at 1539 | 1.5% | 12/31/2013 | 1,804,980 | 562,268 | 1,242,712 | 2,288,160 | 2,302,133 | 600,505 | 1,701,628 | 15,500 | ||||||||||||||||||
Property | 2.03 | Luxe at 1759 | 1.4% | 12/31/2013 | 1,645,535 | 458,693 | 1,186,842 | 2,069,748 | 1,918,375 | 463,747 | 1,454,628 | 15,250 | ||||||||||||||||||
Property | 2.04 | NMS at Northridge | 1.3% | 12/31/2013 | 1,811,387 | 500,842 | 1,310,544 | 2,166,168 | 2,117,713 | 459,280 | 1,658,433 | 25,500 | ||||||||||||||||||
Property | 2.05 | NMS at Warner Center | 0.9% | 12/31/2013 | 1,395,433 | 582,091 | 813,342 | 1,711,020 | 1,576,256 | 493,471 | 1,082,785 | 19,750 | ||||||||||||||||||
Property | 2.06 | NMS at Superior | 0.4% | 12/31/2013 | 579,885 | 188,393 | 391,492 | 689,616 | 631,155 | 177,687 | 453,468 | 6,500 | ||||||||||||||||||
Loan | 3 | Sandalwood Portfolio | 6.8% | 12/31/2013 | 14,233,709 | 7,826,781 | 6,406,928 | 10.2% | 9.4% | 14,809,372 | 14,730,922 | 8,309,785 | 6,421,137 | 493,200 | ||||||||||||||||
Property | 3.01 | Oaks of Northgate | 1.1% | 12/31/2013 | 2,317,118 | 1,150,919 | 1,166,199 | 2,427,926 | 2,330,833 | 1,323,770 | 1,007,063 | 82,800 | ||||||||||||||||||
Property | 3.02 | Cimarron Crossing | 1.1% | 12/31/2013 | 1,594,144 | 762,018 | 832,126 | 1,701,264 | 1,748,095 | 863,597 | 884,497 | 48,000 | ||||||||||||||||||
Property | 3.03 | Brandon Oaks | 1.1% | 12/31/2013 | 2,557,475 | 1,387,499 | 1,169,976 | 2,637,581 | 2,453,696 | 1,484,015 | 969,681 | 82,800 | ||||||||||||||||||
Property | 3.04 | Sugar Tree Apartments | 1.0% | 12/31/2013 | 2,431,259 | 1,289,493 | 1,141,766 | 2,396,801 | 2,439,845 | 1,357,735 | 1,082,110 | 75,000 | ||||||||||||||||||
Property | 3.05 | Arlington Oaks | 0.9% | 12/31/2013 | 1,597,802 | 915,167 | 682,635 | 1,709,129 | 1,718,712 | 962,727 | 755,985 | 60,600 | ||||||||||||||||||
Property | 3.06 | Lakeshire Place | 0.9% | 12/31/2013 | 2,331,848 | 1,458,694 | 873,154 | 2,473,192 | 2,580,360 | 1,430,124 | 1,150,236 | 91,200 | ||||||||||||||||||
Property | 3.07 | Sundance Apartments | 0.6% | 12/31/2013 | 1,404,063 | 862,991 | 541,072 | 1,463,481 | 1,459,381 | 887,818 | 571,563 | 52,800 | ||||||||||||||||||
Loan | 4 | Atlanta Multifamily Portfolio (37) | 4.8% | 12/31/2013 | 5,409,815 | 2,247,829 | 3,161,986 | 8.3% | 8.0% | 6,065,712 | 6,158,549 | 2,432,865 | 3,725,685 | 147,000 | ||||||||||||||||
Property | 4.01 | Rosemont Cityview Apartments | 2.5% | 12/31/2013 | 2,795,459 | 1,128,603 | 1,666,856 | 3,201,336 | 3,123,041 | 1,266,285 | 1,856,756 | 80,000 | ||||||||||||||||||
Property | 4.02 | Dawson Forest Apartments | 2.4% | 12/31/2013 | 2,614,356 | 1,119,226 | 1,495,130 | 2,864,376 | 3,035,508 | 1,166,580 | 1,868,928 | 67,000 | ||||||||||||||||||
Loan | 5 | The Drake | 4.7% | 7.7% | 7.6% | 5,672,940 | 5,740,558 | 2,351,420 | 3,389,139 | 32,700 | ||||||||||||||||||||
Loan | 6 | Midwest Shopping Center Portfolio (37) | 4.1% | 12/31/2013 | 7,511,907 | 3,636,452 | 3,875,455 | 10.3% | 9.2% | 6,291,596 | 7,438,432 | 3,493,319 | 3,945,112 | 142,531 | 305,765 | |||||||||||||||
Property | 6.01 | Home Depot Shopping Center | 1.2% | 12/31/2013 | 1,902,154 | 778,170 | 1,123,984 | 1,673,197 | 1,794,323 | 750,530 | 1,043,792 | |||||||||||||||||||
Property | 6.02 | Calumet Center | 0.7% | 12/31/2013 | 2,900,582 | 1,976,226 | 924,356 | 2,261,681 | 2,673,165 | 1,906,637 | 766,528 | |||||||||||||||||||
Property | 6.03 | Waterloo Plaza | 0.7% | 12/31/2013 | 905,138 | 396,802 | 508,336 | 706,972 | 1,057,229 | 358,733 | 698,495 | |||||||||||||||||||
Property | 6.04 | Broadway Plaza | 0.6% | 12/31/2013 | 599,982 | 130,400 | 469,582 | 605,517 | 699,989 | 105,587 | 594,402 | |||||||||||||||||||
Property | 6.05 | Kansas Center | 0.5% | 12/31/2013 | 667,493 | 204,070 | 463,423 | 626,066 | 641,698 | 206,723 | 434,975 | |||||||||||||||||||
Property | 6.06 | Neil Street Shopping Center | 0.4% | 12/31/2013 | 536,558 | 150,784 | 385,774 | 418,163 | 572,028 | 165,109 | 406,920 | |||||||||||||||||||
Loan | 7 | Intellicenter | 3.6% | 12/31/2013 | 1,427,038 | 1,155,844 | 271,194 | 9.3% | 8.9% | 4,818,392 | 5,018,946 | 1,908,604 | 3,110,342 | 40,704 | 69,497 | |||||||||||||||
Loan | 8 | Hotel deLuxe | 3.5% | 12/31/2013 | 9,572,408 | 6,488,771 | 3,083,637 | 12.8% | 11.4% | 7,013,945 | 11,276,723 | 7,123,860 | 4,152,863 | 451,069 | ||||||||||||||||
Loan | 9 | Green Valley Corporate Center | 2.9% | 12/31/2013 | 3,823,808 | 731,243 | 3,092,565 | 12.4% | 12.0% | 4,355,808 | 4,101,491 | 750,489 | 3,351,001 | 40,763 | 62,510 | |||||||||||||||
Loan | 10 | Chase Park | 2.9% | 12/31/2013 | 3,773,028 | 2,055,631 | 1,717,397 | 10.5% | 9.1% | 6,094,871 | 5,340,395 | 2,541,367 | 2,799,028 | 54,793 | 312,812 | |||||||||||||||
Loan | 11 | Cookie Factory Lofts | 2.5% | 8.2% | 8.0% | 2,337,120 | 2,454,660 | 576,852 | 1,877,808 | 35,600 | ||||||||||||||||||||
Loan | 12 | Windrift Apartments | 2.3% | T-12 9/30/2013 | 2,685,291 | 1,378,335 | 1,306,956 | 8.5% | 8.1% | 2,820,756 | 3,014,113 | 1,196,365 | 1,817,748 | 88,992 | ||||||||||||||||
Loan | 13 | Village Square at Kiln Creek | 2.2% | 12/31/2013 | 2,553,306 | 483,946 | 2,069,360 | 9.4% | 8.5% | 2,333,844 | 2,570,772 | 658,915 | 1,911,857 | 53,404 | 114,910 | |||||||||||||||
Loan | 14 | Ocala Portfolio - AHIP | 2.0% | 12/31/2013 | 7,347,470 | 5,096,000 | 2,251,470 | 16.1% | 14.3% | 8,185,000 | 8,647,140 | 5,589,506 | 3,057,634 | 345,886 | ||||||||||||||||
Property | 14.01 | Courtyard Ocala | 0.9% | 12/31/2013 | 3,222,000 | 2,423,000 | 799,000 | 3,717,000 | 4,083,000 | 2,670,156 | 1,412,844 | 163,320 | ||||||||||||||||||
Property | 14.02 | Residence Inn Ocala | 0.7% | 12/31/2013 | 2,432,000 | 1,467,000 | 965,000 | 2,505,000 | 2,581,000 | 1,598,620 | 982,380 | 103,240 | ||||||||||||||||||
Property | 14.03 | Fairfield Inn & Suites Ocala | 0.5% | 12/31/2013 | 1,693,470 | 1,206,000 | 487,470 | 1,963,000 | 1,983,140 | 1,320,730 | 662,410 | 79,326 | ||||||||||||||||||
Loan | 15 | Hilton Garden Inn Charlotte Airport | 2.0% | 12.9% | 11.7% | 4,901,107 | 5,611,210 | 3,222,889 | 2,388,321 | 224,448 | ||||||||||||||||||||
Loan | 16 | GSP MHP Portfolio I | 1.9% | 12/31/2013 | 2,171,013 | 757,679 | 1,413,333 | 8.2% | 8.0% | 2,724,260 | 2,280,461 | 814,792 | 1,465,669 | 26,005 | ||||||||||||||||
Property | 16.01 | Indian Creek Village | 1.0% | 12/31/2013 | 1,035,875 | 249,253 | 786,622 | 1,104,000 | 1,092,600 | 303,086 | 789,514 | 6,790 | ||||||||||||||||||
Property | 16.02 | Cedar Manor MHP | 1.0% | 12/31/2013 | 1,135,137 | 508,426 | 626,710 | 1,620,260 | 1,187,861 | 511,706 | 676,155 | 19,215 | ||||||||||||||||||
Loan | 17 | A&H Pacific | 1.9% | 12/31/2013 | 2,198,415 | 302,426 | 1,895,989 | 10.0% | 9.9% | 2,265,509 | 2,156,837 | 389,251 | 1,767,586 | 2,988 | 25,000 | |||||||||||||||
Loan | 18 | WHG Extended Stay Portfolio | 1.7% | 13.7% | 12.2% | 5,753,804 | 5,860,679 | 3,732,413 | 2,128,266 | 234,427 | ||||||||||||||||||||
Property | 18.01 | Sun Suites Louisville | 0.4% | |||||||||||||||||||||||||||
Property | 18.02 | HomeTowne Suites Columbia | 0.4% | |||||||||||||||||||||||||||
Property | 18.03 | Sun Suites Alexandria | 0.3% | |||||||||||||||||||||||||||
Property | 18.04 | HomeTowne Suites Montgomery | 0.3% | |||||||||||||||||||||||||||
Property | 18.05 | Sun Suites Gainesville | 0.3% | |||||||||||||||||||||||||||
Loan | 19 | Greater Boston Industrial Portfolio I | 1.7% | 12/31/2013 | 2,015,404 | 578,991 | 1,436,413 | 9.4% | 8.7% | 1,574,160 | 2,069,479 | 606,419 | 1,463,059 | 27,544 | 82,632 | |||||||||||||||
Property | 19.01 | 65 Sunnyslope Avenue | 0.9% | 12/31/2013 | 1,064,877 | 267,456 | 797,421 | 855,780 | 1,087,394 | 288,845 | 798,549 | 15,364 | 46,092 | |||||||||||||||||
Property | 19.02 | 82 South Street | 0.5% | 12/31/2013 | 593,667 | 150,653 | 443,014 | 444,780 | 571,213 | 157,765 | 413,448 | 7,060 | 21,180 | |||||||||||||||||
Property | 19.03 | 19 Technology Drive | 0.3% | 12/31/2013 | 356,860 | 160,882 | 195,978 | 273,600 | 410,872 | 159,809 | 251,063 | 5,120 | 15,360 | |||||||||||||||||
Loan | 20 | Reserve at Conway | 1.6% | 12/31/2013 | 2,069,731 | 1,047,574 | 1,022,157 | 8.3% | 7.9% | 2,113,560 | 2,312,136 | 1,086,426 | 1,225,710 | 55,000 | ||||||||||||||||
Loan | 21 | Chestnut Hill Apartments | 1.6% | 12/31/2013 | 2,490,962 | 2,112,583 | 378,379 | 11.1% | 10.2% | 3,410,244 | 3,383,108 | 1,767,583 | 1,615,526 | 138,000 | ||||||||||||||||
Loan | 22 | Hilton Greenville | 1.5% | 12/31/2013 | 8,061,578 | 5,311,578 | 2,750,000 | 20.2% | 17.8% | 4,400,388 | 8,532,905 | 5,648,328 | 2,884,577 | 341,316 | ||||||||||||||||
Loan | 23 | The Phenix at Infinity Park II | 1.5% | 12/31/2014 | 502,726 | 468,408 | 34,318 | 8.3% | 8.0% | 1,725,360 | 1,776,934 | 594,963 | 1,181,971 | 39,300 | ||||||||||||||||
Loan | 24 | Cannon West Shopping Center | 1.4% | 12/31/2013 | 1,662,326 | 544,704 | 1,117,622 | 9.6% | 8.9% | 1,373,409 | 1,807,927 | 566,211 | 1,241,717 | 25,994 | 64,849 | |||||||||||||||
Loan | 25 | HGI Kennewick | 1.4% | 12/31/2013 | 3,953,194 | 2,525,525 | 1,427,669 | 11.8% | 10.2% | 3,718,617 | 4,076,319 | 2,578,725 | 1,497,595 | 203,816 | ||||||||||||||||
Loan | 26 | Golf Center | 1.2% | 12/31/2013 | 1,970,100 | 1,108,398 | 861,702 | 9.5% | 8.3% | 1,413,688 | 2,342,139 | 1,280,856 | 1,061,283 | 24,855 | 109,292 | |||||||||||||||
Loan | 27 | University Center | 1.2% | 8.6% | 8.3% | 1,178,598 | 1,365,560 | 413,551 | 952,010 | 20,577 | 21,005 |
A-1-11 |
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | Third Most | Third | Third | Third | ||||||||||||||||||||||||||
Property | Initial Pool | Recent Operating | Most Recent | Most Recent | Most Recent | Underwritten NOI | Underwritten NCF | Underwritten | Underwritten | Underwritten | Underwritten | Underwritten | Underwritten | |||||||||||||||||
Flag | ID | Property Name | Balance | Statements Date | EGI($) | Expenses($) | NOI($) | Debt Yield (12)(13) | Debt Yield (12)(13) | Revenue($) | EGI($) | Expenses($) | NOI ($) | Reserves($) | TI/LC($) | |||||||||||||||
Loan | 28 | The Parking Spot Portfolio | 1.2% | 12/31/2013 | 4,657,567 | 3,582,606 | 1,074,961 | 13.2% | 12.4% | 4,832,651 | 4,879,397 | 3,450,385 | 1,429,012 | 79,725 | ||||||||||||||||
Property | 28.01 | The Parking Spot Columbus | 0.7% | 12/31/2013 | 2,444,126 | 1,919,574 | 524,552 | 2,611,622 | 2,658,368 | 1,888,536 | 769,832 | 53,475 | ||||||||||||||||||
Property | 28.02 | The Parking Spot Buffalo | 0.5% | 12/31/2013 | 2,213,441 | 1,663,032 | 550,409 | 2,221,029 | 2,221,029 | 1,561,849 | 659,180 | 26,250 | ||||||||||||||||||
Loan | 29 | Hotel Preston | 1.1% | 12/31/2013 | 5,391,276 | 4,228,138 | 1,163,138 | 16.5% | 13.9% | 5,577,045 | 6,810,763 | 5,121,926 | 1,688,837 | 272,431 | ||||||||||||||||
Loan | 30 | Arrowhead Shopping Center | 1.1% | 12/31/2013 | 1,151,273 | 374,737 | 776,536 | 9.9% | 9.5% | 1,146,909 | 1,328,239 | 313,490 | 1,014,749 | 12,689 | 33,836 | |||||||||||||||
Loan | 31 | Chestnut Street | 1.1% | 12/31/2012 | 855,072 | 161,347 | 693,725 | 7.3% | 7.2% | 800,940 | 947,179 | 214,627 | 732,552 | 7,750 | ||||||||||||||||
Loan | 32 | Renner Commerce Center Portfolio | 1.1% | 8.9% | 8.1% | 988,207 | 1,489,894 | 616,932 | 872,961 | 22,014 | 49,627 | |||||||||||||||||||
Property | 32.01 | Renner Commerce Center - South | 0.6% | 489,852 | 801,784 | 359,493 | 442,290 | 12,469 | 29,908 | |||||||||||||||||||||
Property | 32.02 | Renner Commerce Center - North | 0.5% | 12/31/2013 | 663,963 | 209,851 | 454,112 | 498,355 | 688,110 | 257,439 | 430,671 | 9,545 | 19,719 | |||||||||||||||||
Loan | 33 | Rockford Crossing | 1.0% | 9.8% | 8.2% | 1,164,437 | 1,468,798 | 538,504 | 930,294 | 23,730 | 128,117 | |||||||||||||||||||
Loan | 34 | Shops at Randall Road | 1.0% | 12/31/2013 | 1,248,350 | 449,406 | 798,944 | 9.3% | 8.6% | 1,000,914 | 1,310,433 | 476,704 | 833,729 | 19,553 | 39,107 | |||||||||||||||
Loan | 35 | Fort Myers Self Storage Portfolio | 0.9% | 12/31/2013 | 1,009,994 | 374,081 | 635,913 | 8.5% | 8.4% | 1,393,312 | 1,130,957 | 396,015 | 734,942 | 12,859 | ||||||||||||||||
Property | 35.01 | Estero Self Storage | 0.5% | 12/31/2013 | 555,644 | 177,036 | 378,608 | 757,992 | 642,429 | 190,690 | 451,739 | 6,137 | ||||||||||||||||||
Property | 35.02 | Valuguard Self Storage | 0.4% | 12/31/2013 | 454,350 | 197,045 | 257,305 | 635,320 | 488,527 | 205,325 | 283,203 | 6,722 | ||||||||||||||||||
Loan | 36 | Lancaster Towers | 0.9% | 12/31/2013 | 1,474,459 | 747,469 | 726,990 | 9.7% | 9.0% | 1,467,540 | 1,451,338 | 678,655 | 772,684 | 49,800 | ||||||||||||||||
Loan | 37 | Brookhaven MHP | 0.8% | 12/31/2013 | 944,338 | 327,842 | 616,496 | 8.1% | 8.0% | 923,460 | 991,051 | 348,228 | 642,823 | 9,405 | ||||||||||||||||
Loan | 38 | Park Villas Townhomes | 0.8% | 12/31/2013 | 1,886,885 | 1,181,431 | 705,454 | 9.4% | 8.4% | 1,938,468 | 1,910,918 | 1,233,020 | 677,898 | 73,297 | ||||||||||||||||
Loan | 39 | Evergreen Square | 0.8% | 12/31/2013 | 1,360,942 | 392,449 | 968,493 | 11.1% | 9.9% | 838,407 | 1,113,294 | 319,978 | 793,316 | 20,904 | 62,712 | |||||||||||||||
Loan | 40 | Rio Verde & Sagewood Apartments Portfolio | 0.7% | 12/31/2013 | 1,118,671 | 479,853 | 638,818 | 11.5% | 10.8% | 1,288,683 | 1,297,210 | 549,145 | 748,065 | 45,440 | ||||||||||||||||
Property | 40.01 | Sagewood Apartments | 0.4% | 12/31/2013 | 596,989 | 232,085 | 364,904 | 620,403 | 643,904 | 276,751 | 367,153 | 25,440 | ||||||||||||||||||
Property | 40.02 | Rio Verde Apartments | 0.3% | 12/31/2013 | 521,682 | 247,768 | 273,914 | 668,280 | 653,306 | 272,394 | 380,912 | 20,000 | ||||||||||||||||||
Loan | 41 | CSRA Food Lion Portfolio II (37) | 0.7% | 12/31/2012 | 836,667 | 239,119 | 597,547 | 10.6% | 8.7% | 835,978 | 921,185 | 235,398 | 685,788 | 21,389 | 96,249 | |||||||||||||||
Property | 41.01 | Kimberly Park | 0.4% | 12/31/2012 | 470,227 | 128,450 | 341,776 | 452,538 | 503,105 | 126,217 | 376,888 | 9,580 | 43,110 | |||||||||||||||||
Property | 41.02 | Eden Center | 0.3% | 12/31/2012 | 366,440 | 110,669 | 255,771 | 383,440 | 418,081 | 109,181 | 308,900 | 11,809 | 53,139 | |||||||||||||||||
Loan | 42 | La Galleria at the Mills | 0.7% | 12/31/2013 | 714,783 | 133,488 | 581,295 | 8.9% | 8.1% | 667,635 | 720,918 | 176,531 | 544,387 | 4,094 | 42,920 | |||||||||||||||
Loan | 43 | Clive Distribution Center | 0.6% | 12/31/2013 | 1,135,752 | 345,466 | 790,286 | 11.0% | 9.7% | 725,450 | 1,018,861 | 358,517 | 660,343 | 26,000 | 52,000 | |||||||||||||||
Loan | 44 | Days Inn | 0.6% | 12/31/2013 | 2,401,743 | 1,423,440 | 978,303 | 18.1% | 16.2% | 2,739,465 | 2,799,645 | 1,713,800 | 1,085,845 | 111,986 | ||||||||||||||||
Loan | 45 | Dollar Self Storage - Tucson | 0.6% | 12/31/2013 | 962,802 | 385,762 | 577,040 | 10.5% | 10.3% | 1,093,757 | 1,020,454 | 411,318 | 609,137 | 12,864 | ||||||||||||||||
Loan | 46 | The Meadows Apartments | 0.6% | 12/31/2013 | 945,801 | 449,861 | 495,940 | 9.5% | 8.6% | 1,065,288 | 1,009,551 | 517,997 | 491,555 | 45,568 | ||||||||||||||||
Loan | 47 | Witte Oaks Apartments | 0.5% | 11.2% | 10.5% | 1,187,664 | 1,176,841 | 606,558 | 570,283 | 36,600 | ||||||||||||||||||||
Loan | 48 | Chambers Place | 0.5% | 12/31/2013 | 770,155 | 207,208 | 562,947 | 11.4% | 10.5% | 655,147 | 830,377 | 257,889 | 572,488 | 5,684 | 40,080 | |||||||||||||||
Loan | 49 | Sonora Cascade MHC | 0.5% | 12/31/2013 | 591,641 | 197,141 | 394,500 | 8.8% | 8.6% | 581,444 | 585,343 | 213,259 | 372,084 | 6,441 | ||||||||||||||||
Loan | 50 | Walgreens Aurora, IN | 0.5% | 8.9% | 8.8% | 391,500 | 444,862 | 67,229 | 377,633 | 2,964 | ||||||||||||||||||||
Loan | 51 | Empire Central | 0.4% | 11.3% | 9.4% | 562,383 | 785,041 | 334,092 | 450,949 | 20,852 | 53,101 | |||||||||||||||||||
Loan | 52 | Grove Park Shopping Center | 0.4% | 12/31/2013 | 741,220 | 218,561 | 522,660 | 13.8% | 11.8% | 710,394 | 770,406 | 244,388 | 526,018 | 25,574 | 52,037 | |||||||||||||||
Loan | 53 | Camelot Medical Office & Dunkin’ Donuts | 0.4% | 12/31/2013 | 530,979 | 195,370 | 335,609 | 8.9% | 8.1% | 379,893 | 529,522 | 193,703 | 335,819 | 8,925 | 21,251 | |||||||||||||||
Loan | 54 | Parkway Plaza Shopping Center | 0.4% | 12/31/2013 | 613,655 | 140,106 | 473,549 | 11.6% | 10.1% | 520,384 | 596,552 | 189,868 | 406,684 | 15,710 | 38,702 | |||||||||||||||
Loan | 55 | Midvale Park Self Storage | 0.4% | 12/31/2013 | 556,856 | 216,777 | 340,078 | 9.8% | 9.6% | 617,626 | 565,342 | 222,100 | 343,242 | 8,641 | ||||||||||||||||
Loan | 56 | Fresenius Medical Care Lake City | 0.4% | 10.3% | 9.7% | 385,245 | 426,735 | 69,617 | 357,118 | 2,075 | 16,788 | |||||||||||||||||||
Loan | 57 | Bonita Springs Self Storage (38) | 0.3% | 12/31/2013 | 470,734 | 189,754 | 280,980 | 9.4% | 8.9% | 585,641 | 483,613 | 225,799 | 299,606 | 16,209 | ||||||||||||||||
Loan | 58 | Fresenius Medical Care Greece | 0.3% | 9.3% | 8.7% | 321,365 | 414,700 | 120,247 | 294,453 | 1,870 | 16,301 | |||||||||||||||||||
Loan | 59 | Storage Pros Lansing | 0.3% | 12/31/2013 | 431,262 | 171,563 | 259,699 | 9.1% | 8.8% | 512,832 | 451,292 | 174,005 | 277,288 | 10,129 | ||||||||||||||||
Loan | 60 | 4001 North Lincoln | 0.3% | 12/31/2013 | 249,662 | 100,162 | 149,499 | 8.4% | 8.0% | 272,044 | 329,256 | 105,778 | 223,478 | 1,979 | 9,896 | |||||||||||||||
Loan | 61 | Terrace Oak Apartments | 0.3% | 12/31/2013 | 499,023 | 240,538 | 258,485 | 9.5% | 8.9% | 504,660 | 489,733 | 250,198 | 239,534 | 14,400 | ||||||||||||||||
Loan | 62 | Rhett at Remount | 0.3% | 12/31/2013 | 419,591 | 115,145 | 304,445 | 10.6% | 9.1% | 332,887 | 396,860 | 132,757 | 264,103 | 6,420 | 31,585 | |||||||||||||||
Loan | 63 | Winchester Oaks Apartments | 0.2% | 12/31/2013 | 481,432 | 251,479 | 229,953 | 12.6% | 11.3% | 482,796 | 499,468 | 285,773 | 213,695 | 23,400 | ||||||||||||||||
Loan | 64 | All Star Storage | 0.2% | 12/31/2013 | 182,910 | 44,069 | 138,842 | 12.7% | 12.4% | 288,179 | 263,893 | 85,734 | 178,159 | 4,685 | ||||||||||||||||
Loan | 65 | Midvale Park RV Storage | 0.1% | 12/31/2013 | 240,229 | 105,368 | 134,861 | 15.2% | 14.3% | 301,462 | 248,486 | 101,783 | 146,703 | 8,604 |
A-1-12 |
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | ||||||||||||||||||||||||||
Property | Initial Pool | Underwritten | Ownership | Ground Lease | Ground Lease | Lease | Lease | |||||||||||||||||||
Flag | ID | Property Name | Balance | NCF($) | Interest (20)(21) | Expiration (21) | Extension Terms (21) | Largest Tenant (22)(23)(24)(25)(26)(27)(28) | SF | Expiration | 2nd Largest Tenant (23)(25)(26)(27) | SF | Expiration | |||||||||||||
Loan | 1 | 11 Madison Avenue (35)(36)(37) | 7.5% | 107,431,283 | Fee Simple/Leasehold | 12/31/2016 | None | Credit Suisse | 1,266,051 | 05/31/2037 | Sony | 578,791 | 01/31/2031 | |||||||||||||
Loan | 2 | NMS Los Angeles Multifamily Portfolio (35) | 7.0% | 7,885,432 | Fee Simple | |||||||||||||||||||||
Property | 2.01 | Luxe at 1548 | 1.6% | 1,616,990 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Property | 2.02 | Luxe at 1539 | 1.5% | 1,686,128 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Property | 2.03 | Luxe at 1759 | 1.4% | 1,439,378 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Property | 2.04 | NMS at Northridge | 1.3% | 1,632,933 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Property | 2.05 | NMS at Warner Center | 0.9% | 1,063,035 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Property | 2.06 | NMS at Superior | 0.4% | 446,968 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 3 | Sandalwood Portfolio | 6.8% | 5,927,937 | Fee Simple | |||||||||||||||||||||
Property | 3.01 | Oaks of Northgate | 1.1% | 924,263 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Property | 3.02 | Cimarron Crossing | 1.1% | 836,497 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Property | 3.03 | Brandon Oaks | 1.1% | 886,881 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Property | 3.04 | Sugar Tree Apartments | 1.0% | 1,007,110 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Property | 3.05 | Arlington Oaks | 0.9% | 695,385 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Property | 3.06 | Lakeshire Place | 0.9% | 1,059,036 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Property | 3.07 | Sundance Apartments | 0.6% | 518,763 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 4 | Atlanta Multifamily Portfolio (37) | 4.8% | 3,578,685 | Fee Simple | |||||||||||||||||||||
Property | 4.01 | Rosemont Cityview Apartments | 2.5% | 1,776,756 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Property | 4.02 | Dawson Forest Apartments | 2.4% | 1,801,928 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 5 | The Drake | 4.7% | 3,356,439 | Leasehold | 11/30/2111 | None | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||
Loan | 6 | Midwest Shopping Center Portfolio (37) | 4.1% | 3,496,815 | Fee Simple | |||||||||||||||||||||
Property | 6.01 | Home Depot Shopping Center | 1.2% | Fee Simple | Home Depot | 111,847 | 01/31/2020 | Best Buy | 35,280 | 06/30/2016 | ||||||||||||||||
Property | 6.02 | Calumet Center | 0.7% | Fee Simple | Marshalls | 30,557 | 01/31/2016 | Big Lots | 28,400 | 01/31/2020 | ||||||||||||||||
Property | 6.03 | Waterloo Plaza | 0.7% | Fee Simple | Hobby Lobby | 65,045 | 11/30/2024 | TJ Maxx | 29,029 | 01/31/2020 | ||||||||||||||||
Property | 6.04 | Broadway Plaza | 0.6% | Fee Simple | Academy Sports | 97,527 | 04/30/2019 | NAP | NAP | NAP | ||||||||||||||||
Property | 6.05 | Kansas Center | 0.5% | Fee Simple | Home Depot | 113,969 | 01/31/2020 | Firestone Tire | 6,600 | 01/31/2019 | ||||||||||||||||
Property | 6.06 | Neil Street Shopping Center | 0.4% | Fee Simple | Hobby Lobby | 70,695 | 07/31/2017 | Carle Clinic | 41,290 | 11/30/2018 | ||||||||||||||||
Loan | 7 | Intellicenter | 3.6% | 3,000,142 | Fee Simple | H. Lee Moffitt Cancer Center | 154,963 | 03/31/2027 | Morgan Stanley | 25,294 | 03/31/2024 | |||||||||||||||
Loan | 8 | Hotel deLuxe | 3.5% | 3,701,794 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 9 | Green Valley Corporate Center | 2.9% | 3,247,729 | Fee Simple | IADT | 49,902 | 04/30/2016 | Cypress Capital, LLC | 12,819 | 05/31/2018 | |||||||||||||||
Loan | 10 | Chase Park | 2.9% | 2,431,423 | Fee Simple | Seton | 68,105 | 03/31/2023 | Austin Stone Church | 29,859 | 10/30/2020 | |||||||||||||||
Loan | 11 | Cookie Factory Lofts | 2.5% | 1,842,208 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 12 | Windrift Apartments | 2.3% | 1,728,756 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 13 | Village Square at Kiln Creek | 2.2% | 1,743,543 | Fee Simple | Kmart Corporation | 98,660 | 11/30/2018 | Kmart Corporation (Kroger Limited Partnership I) | 92,348 | 09/30/2033 | |||||||||||||||
Loan | 14 | Ocala Portfolio - AHIP | 2.0% | 2,711,748 | Fee Simple | |||||||||||||||||||||
Property | 14.01 | Courtyard Ocala | 0.9% | 1,249,524 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Property | 14.02 | Residence Inn Ocala | 0.7% | 879,140 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Property | 14.03 | Fairfield Inn & Suites Ocala | 0.5% | 583,084 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 15 | Hilton Garden Inn Charlotte Airport | 2.0% | 2,163,872 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 16 | GSP MHP Portfolio I | 1.9% | 1,439,664 | Fee Simple | |||||||||||||||||||||
Property | 16.01 | Indian Creek Village | 1.0% | 782,724 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Property | 16.02 | Cedar Manor MHP | 1.0% | 656,940 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 17 | A&H Pacific | 1.9% | 1,739,598 | Fee Simple | Parking Network Inc. | 14,000 | 11/30/2015 | Kamin Neman Ebrahim | 1,350 | 07/31/2017 | |||||||||||||||
Loan | 18 | WHG Extended Stay Portfolio | 1.7% | 1,893,838 | Fee Simple | |||||||||||||||||||||
Property | 18.01 | Sun Suites Louisville | 0.4% | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||||||
Property | 18.02 | HomeTowne Suites Columbia | 0.4% | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||||||
Property | 18.03 | Sun Suites Alexandria | 0.3% | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||||||
Property | 18.04 | HomeTowne Suites Montgomery | 0.3% | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||||||
Property | 18.05 | Sun Suites Gainesville | 0.3% | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||||||
Loan | 19 | Greater Boston Industrial Portfolio I | 1.7% | 1,352,883 | Fee Simple | |||||||||||||||||||||
Property | 19.01 | 65 Sunnyslope Avenue | 0.9% | 737,093 | Fee Simple | Eastern Bag & Paper Co. | 153,641 | 10/31/2021 | NAP | NAP | NAP | |||||||||||||||
Property | 19.02 | 82 South Street | 0.5% | 385,208 | Fee Simple | Hutchinson Aerospace & Industry, Inc. | 70,600 | 04/30/2016 | NAP | NAP | NAP | |||||||||||||||
Property | 19.03 | 19 Technology Drive | 0.3% | 230,583 | Fee Simple | Accelerated Media Technologies, Inc. | 27,200 | 02/28/2019 | Harrell’s Turf Specialty, LLC | 24,000 | 01/31/2018 | |||||||||||||||
Loan | 20 | Reserve at Conway | 1.6% | 1,170,710 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 21 | Chestnut Hill Apartments | 1.6% | 1,477,526 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 22 | Hilton Greenville | 1.5% | 2,543,261 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 23 | The Phenix at Infinity Park II | 1.5% | 1,142,671 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 24 | Cannon West Shopping Center | 1.4% | 1,150,874 | Fee Simple | Albertsons | 57,830 | 04/06/2025 | Premiere Lady Fitness | 17,370 | 03/31/2018 | |||||||||||||||
Loan | 25 | HGI Kennewick | 1.4% | 1,293,779 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 26 | Golf Center | 1.2% | 927,137 | Fee Simple | TJ Maxx | 34,600 | 02/28/2023 | TVI Savers | 30,520 | 01/31/2024 | |||||||||||||||
Loan | 27 | University Center | 1.2% | 910,427 | Fee Simple | LA Fitness | 44,450 | 06/30/2029 | TJ Maxx | 24,067 | 03/31/2025 |
A-1-13 |
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | ||||||||||||||||||||||||||
Property | Initial Pool | Underwritten | Ownership | Ground Lease | Ground Lease | Lease | Lease | |||||||||||||||||||
Flag | ID | Property Name | Balance | NCF($) | Interest (20)(21) | Expiration (21) | Extension Terms (21) | Largest Tenant (22)(23)(24)(25)(26)(27)(28) | SF | Expiration | 2nd Largest Tenant (23)(25)(26)(27) | SF | Expiration | |||||||||||||
Loan | 28 | The Parking Spot Portfolio | 1.2% | 1,349,287 | Fee Simple | |||||||||||||||||||||
Property | 28.01 | The Parking Spot Columbus | 0.7% | 716,357 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Property | 28.02 | The Parking Spot Buffalo | 0.5% | 632,930 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 29 | Hotel Preston | 1.1% | 1,416,407 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 30 | Arrowhead Shopping Center | 1.1% | 968,224 | Fee Simple | 99 Cents Only | 25,000 | 01/31/2020 | Ace Hardware | 16,410 | 01/31/2025 | |||||||||||||||
Loan | 31 | Chestnut Street | 1.1% | 724,802 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 32 | Renner Commerce Center Portfolio | 1.1% | 801,320 | Fee Simple/Leasehold | |||||||||||||||||||||
Property | 32.01 | Renner Commerce Center - South | 0.6% | 399,913 | Leasehold | 06/01/2020 | 1 option, 5 years | Select Brands | 89,064 | 03/31/2021 | NAP | NAP | NAP | |||||||||||||
Property | 32.02 | Renner Commerce Center - North | 0.5% | 401,407 | Fee Simple | Select Brands | 52,449 | 03/31/2021 | Federal Milk Market Administrator | 15,727 | 07/31/2020 | |||||||||||||||
Loan | 33 | Rockford Crossing | 1.0% | 778,447 | Fee Simple | Hobby Lobby | 55,000 | 01/31/2019 | HomeGoods | 21,000 | 05/31/2025 | |||||||||||||||
Loan | 34 | Shops at Randall Road | 1.0% | 775,069 | Fee Simple | TJ Maxx | 30,200 | 01/31/2022 | Petco | 13,534 | 01/31/2022 | |||||||||||||||
Loan | 35 | Fort Myers Self Storage Portfolio | 0.9% | 722,083 | Fee Simple | |||||||||||||||||||||
Property | 35.01 | Estero Self Storage | 0.5% | 445,602 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Property | 35.02 | Valuguard Self Storage | 0.4% | 276,481 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 36 | Lancaster Towers | 0.9% | 722,884 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 37 | Brookhaven MHP | 0.8% | 633,418 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 38 | Park Villas Townhomes | 0.8% | 604,601 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 39 | Evergreen Square | 0.8% | 709,700 | Fee Simple | TJ Maxx | 30,271 | 11/30/2019 | Citi Trends | 27,110 | 11/30/2019 | |||||||||||||||
Loan | 40 | Rio Verde & Sagewood Apartments Portfolio | 0.7% | 702,625 | Fee Simple | |||||||||||||||||||||
Property | 40.01 | Sagewood Apartments | 0.4% | 341,713 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Property | 40.02 | Rio Verde Apartments | 0.3% | 360,912 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 41 | CSRA Food Lion Portfolio II (37) | 0.7% | 568,150 | Fee Simple | |||||||||||||||||||||
Property | 41.01 | Kimberly Park | 0.4% | 324,198 | Fee Simple | Food Lion, Inc. | 29,000 | 04/30/2025 | Family Dollar Stores, Inc. | 7,200 | 12/31/2019 | |||||||||||||||
Property | 41.02 | Eden Center | 0.3% | 243,952 | Fee Simple | Food Lion, Inc. | 40,138 | 04/30/2025 | NC Scrapbook Crops & Retreats | 3,000 | 11/30/2015 | |||||||||||||||
Loan | 42 | La Galleria at the Mills | 0.7% | 497,373 | Fee Simple | Creative Soul | 3,240 | 09/30/2020 | Ontario Jewelry Plaza | 2,991 | 09/30/2015 | |||||||||||||||
Loan | 43 | Clive Distribution Center | 0.6% | 582,343 | Fee Simple | Centennial Logistics, LLC | 80,000 | 02/28/2021 | SMA Midwest, LLC | 50,000 | 02/28/2017 | |||||||||||||||
Loan | 44 | Days Inn | 0.6% | 973,859 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 45 | Dollar Self Storage - Tucson | 0.6% | 596,273 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 46 | The Meadows Apartments | 0.6% | 445,987 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 47 | Witte Oaks Apartments | 0.5% | 533,683 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 48 | Chambers Place | 0.5% | 526,724 | Fee Simple | JTLHOP (Liquor Store) | 7,794 | 12/31/2020 | Rocky Mountain Medical | 5,355 | 08/31/2017 | |||||||||||||||
Loan | 49 | Sonora Cascade MHC | 0.5% | 365,643 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 50 | Walgreens Aurora, IN | 0.5% | 374,669 | Fee Simple | Walgreens | 14,820 | 12/31/2081 | NAP | NAP | NAP | |||||||||||||||
Loan | 51 | Empire Central | 0.4% | 376,996 | Fee Simple | Level 3 Communications | 38,033 | 06/01/2019 | Garden Glass Patios & Guttermaxx | 14,367 | 11/01/2019 | |||||||||||||||
Loan | 52 | Grove Park Shopping Center | 0.4% | 448,407 | Fee Simple | BI-LO | 41,600 | 02/28/2021 | Orange Cut Rate Drugs | 9,104 | 02/28/2019 | |||||||||||||||
Loan | 53 | Camelot Medical Office & Dunkin’ Donuts | 0.4% | 305,642 | Fee Simple | Guthrie Medical Group, P.C. | 18,751 | 05/01/2019 | Dunkin’ Donuts | 2,500 | 08/31/2023 | |||||||||||||||
Loan | 54 | Parkway Plaza Shopping Center | 0.4% | 352,273 | Fee Simple | Winn-Dixie | 37,985 | 10/29/2022 | Dollar General | 7,980 | 09/30/2017 | |||||||||||||||
Loan | 55 | Midvale Park Self Storage | 0.4% | 334,600 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 56 | Fresenius Medical Care Lake City | 0.4% | 338,254 | Fee Simple | Fresenius | 10,377 | 06/30/2030 | NAP | NAP | NAP | |||||||||||||||
Loan | 57 | Bonita Springs Self Storage (38) | 0.3% | 283,397 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 58 | Fresenius Medical Care Greece | 0.3% | 276,282 | Fee Simple | Fresenius Medical Care - New York Dialysis Services, Inc. | 9,352 | 04/01/2030 | NAP | NAP | NAP | |||||||||||||||
Loan | 59 | Storage Pros Lansing | 0.3% | 267,159 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 60 | 4001 North Lincoln | 0.3% | 211,603 | Fee Simple | US Bank | 2,400 | 10/31/2018 | Starbucks | 1,650 | 02/28/2023 | |||||||||||||||
Loan | 61 | Terrace Oak Apartments | 0.3% | 225,134 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 62 | Rhett at Remount | 0.3% | 226,098 | Fee Simple | Food Lion | 29,748 | 10/31/2017 | Family Dollar | 8,640 | 04/30/2017 | |||||||||||||||
Loan | 63 | Winchester Oaks Apartments | 0.2% | 190,295 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 64 | All Star Storage | 0.2% | 173,474 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||||||
Loan | 65 | Midvale Park RV Storage | 0.1% | 138,099 | Fee Simple | NAP | NAP | NAP | NAP | NAP | NAP |
A-1-14 |
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | ||||||||||||||||||||||||||||
Property | Initial Pool | Lease | Lease | Lease | Occupancy | |||||||||||||||||||||||
Flag | ID | Property Name | Balance | 3rd Largest Tenant (23)(26) | SF | Expiration | 4th Largest Tenant | SF | Expiration | 5th Largest Tenant (26) | SF | Expiration | Occupancy | As-of Date | ||||||||||||||
Loan | 1 | 11 Madison Avenue (35)(36)(37) | 7.5% | Yelp | 152,232 | 04/30/2025 | WME | 103,426 | 09/30/2030 | Young & Rubicam, Inc. | 99,107 | 03/30/2019 | 97.8% | 08/11/2015 | ||||||||||||||
Loan | 2 | NMS Los Angeles Multifamily Portfolio (35) | 7.0% | 99.2% | 08/25/2015 | |||||||||||||||||||||||
Property | 2.01 | Luxe at 1548 | 1.6% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 100.0% | 08/25/2015 | ||||||||||||||
Property | 2.02 | Luxe at 1539 | 1.5% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 100.0% | 08/25/2015 | ||||||||||||||
Property | 2.03 | Luxe at 1759 | 1.4% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 100.0% | 08/25/2015 | ||||||||||||||
Property | 2.04 | NMS at Northridge | 1.3% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 99.0% | 08/25/2015 | ||||||||||||||
Property | 2.05 | NMS at Warner Center | 0.9% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 97.5% | 08/25/2015 | ||||||||||||||
Property | 2.06 | NMS at Superior | 0.4% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 100.0% | 08/25/2015 | ||||||||||||||
Loan | 3 | Sandalwood Portfolio | 6.8% | 96.4% | 07/31/2015 | |||||||||||||||||||||||
Property | 3.01 | Oaks of Northgate | 1.1% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 89.9% | 07/31/2015 | ||||||||||||||
Property | 3.02 | Cimarron Crossing | 1.1% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 100.0% | 07/31/2015 | ||||||||||||||
Property | 3.03 | Brandon Oaks | 1.1% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 96.4% | 07/31/2015 | ||||||||||||||
Property | 3.04 | Sugar Tree Apartments | 1.0% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 94.4% | 07/31/2015 | ||||||||||||||
Property | 3.05 | Arlington Oaks | 0.9% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 98.0% | 07/31/2015 | ||||||||||||||
Property | 3.06 | Lakeshire Place | 0.9% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 98.7% | 07/31/2015 | ||||||||||||||
Property | 3.07 | Sundance Apartments | 0.6% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 100.0% | 07/31/2015 | ||||||||||||||
Loan | 4 | Atlanta Multifamily Portfolio (37) | 4.8% | 95.6% | 06/11/2015 | |||||||||||||||||||||||
Property | 4.01 | Rosemont Cityview Apartments | 2.5% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 94.4% | 06/11/2015 | ||||||||||||||
Property | 4.02 | Dawson Forest Apartments | 2.4% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 97.0% | 06/11/2015 | ||||||||||||||
Loan | 5 | The Drake | 4.7% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 99.1% | 08/10/2015 | ||||||||||||||
Loan | 6 | Midwest Shopping Center Portfolio (37) | 4.1% | 90.2% | 08/18/2015 | |||||||||||||||||||||||
Property | 6.01 | Home Depot Shopping Center | 1.2% | OfficeMax | 24,428 | 01/31/2018 | PetSmart | 22,646 | 01/31/2017 | Jo-Ann Fabrics | 12,466 | 01/31/2017 | 87.9% | 08/18/2015 | ||||||||||||||
Property | 6.02 | Calumet Center | 0.7% | Ross Dress for Less | 26,040 | 01/31/2023 | Fallas Paredes | 18,934 | 01/31/2024 | Petco | 15,010 | 04/30/2017 | 84.1% | 08/18/2015 | ||||||||||||||
Property | 6.03 | Waterloo Plaza | 0.7% | Shoe Carnival | 10,000 | 02/28/2025 | NAP | NAP | NAP | NAP | NAP | NAP | 100.0% | 08/18/2015 | ||||||||||||||
Property | 6.04 | Broadway Plaza | 0.6% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 100.0% | 08/18/2015 | ||||||||||||||
Property | 6.05 | Kansas Center | 0.5% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 80.2% | 08/18/2015 | ||||||||||||||
Property | 6.06 | Neil Street Shopping Center | 0.4% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 100.0% | 08/18/2015 | ||||||||||||||
Loan | 7 | Intellicenter | 3.6% | Open Text | 21,344 | 03/31/2019 | Four Fingers IC, Inc. d/b/a Nature’s Table | 1,908 | 06/30/2023 | NAP | NAP | NAP | 100.0% | 07/01/2015 | ||||||||||||||
Loan | 8 | Hotel deLuxe | 3.5% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 80.5% | 06/30/2015 | ||||||||||||||
Loan | 9 | Green Valley Corporate Center | 2.9% | Amica Mutual Insurance Company | 12,451 | 12/31/2023 | Toyota Financial Savings Bank | 12,028 | 11/30/2015 | PAR Springer-Miller Systems | 12,000 | 07/31/2020 | 95.7% | 07/21/2015 | ||||||||||||||
Loan | 10 | Chase Park | 2.9% | Jacobs Engineering | 27,775 | 03/31/2019 | Northrop Grumman | 18,945 | 11/30/2016 | Forte | 13,572 | 12/31/2016 | 87.0% | 08/20/2015 | ||||||||||||||
Loan | 11 | Cookie Factory Lofts | 2.5% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 93.3% | 09/14/2015 | ||||||||||||||
Loan | 12 | Windrift Apartments | 2.3% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 95.1% | 08/10/2015 | ||||||||||||||
Loan | 13 | Village Square at Kiln Creek | 2.2% | Ben Franklin Crafts | 19,560 | 08/31/2016 | Dress Barn | 8,000 | 12/31/2017 | Long-Foster Real E | 7,026 | 02/28/2020 | 97.2% | 08/05/2015 | ||||||||||||||
Loan | 14 | Ocala Portfolio - AHIP | 2.0% | 61.6% | 04/30/2015 | |||||||||||||||||||||||
Property | 14.01 | Courtyard Ocala | 0.9% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 58.9% | 04/30/2015 | ||||||||||||||
Property | 14.02 | Residence Inn Ocala | 0.7% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 69.5% | 04/30/2015 | ||||||||||||||
Property | 14.03 | Fairfield Inn & Suites Ocala | 0.5% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 59.3% | 04/30/2015 | ||||||||||||||
Loan | 15 | Hilton Garden Inn Charlotte Airport | 2.0% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 85.0% | 08/31/2015 | ||||||||||||||
Loan | 16 | GSP MHP Portfolio I | 1.9% | 86.3% | 07/09/2015 | |||||||||||||||||||||||
Property | 16.01 | Indian Creek Village | 1.0% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 99.5% | 07/09/2015 | ||||||||||||||
Property | 16.02 | Cedar Manor MHP | 1.0% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 78.2% | 07/09/2015 | ||||||||||||||
Loan | 17 | A&H Pacific | 1.9% | Mostafa Hassan | 1,350 | 09/30/2017 | Morris Mellamed | 1,350 | 09/30/2017 | Aurea Castro | 1,320 | 07/31/2016 | 96.2% | 07/01/2015 | ||||||||||||||
Loan | 18 | WHG Extended Stay Portfolio | 1.7% | 73.1% | 07/31/2015 | |||||||||||||||||||||||
Property | 18.01 | Sun Suites Louisville | 0.4% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 78.2% | 07/31/2015 | ||||||||||||||
Property | 18.02 | HomeTowne Suites Columbia | 0.4% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 71.8% | 07/31/2015 | ||||||||||||||
Property | 18.03 | Sun Suites Alexandria | 0.3% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 70.3% | 07/31/2015 | ||||||||||||||
Property | 18.04 | HomeTowne Suites Montgomery | 0.3% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 69.0% | 07/31/2015 | ||||||||||||||
Property | 18.05 | Sun Suites Gainesville | 0.3% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 74.2% | 07/31/2015 | ||||||||||||||
Loan | 19 | Greater Boston Industrial Portfolio I | 1.7% | 100.0% | 08/25/2015 | |||||||||||||||||||||||
Property | 19.01 | 65 Sunnyslope Avenue | 0.9% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 100.0% | 08/25/2015 | ||||||||||||||
Property | 19.02 | 82 South Street | 0.5% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 100.0% | 08/25/2015 | ||||||||||||||
Property | 19.03 | 19 Technology Drive | 0.3% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 100.0% | 08/25/2015 | ||||||||||||||
Loan | 20 | Reserve at Conway | 1.6% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 95.5% | 07/08/2015 | ||||||||||||||
Loan | 21 | Chestnut Hill Apartments | 1.6% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 95.9% | 07/30/2015 | ||||||||||||||
Loan | 22 | Hilton Greenville | 1.5% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 70.5% | 06/30/2015 | ||||||||||||||
Loan | 23 | The Phenix at Infinity Park II | 1.5% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 98.5% | 07/14/2015 | ||||||||||||||
Loan | 24 | Cannon West Shopping Center | 1.4% | Dollar General | 8,160 | 03/31/2017 | National American University | 6,300 | 04/30/2021 | JP Morgan Chase | 3,560 | 09/30/2018 | 98.1% | 07/29/2015 | ||||||||||||||
Loan | 25 | HGI Kennewick | 1.4% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 72.9% | 06/30/2015 | ||||||||||||||
Loan | 26 | Golf Center | 1.2% | Royal Buffet | 22,980 | 08/31/2026 | Petland/Aquarium Adventure | 16,800 | 12/31/2020 | Factory Card Outlet of America (Party City) | 13,324 | 01/31/2021 | 100.0% | 08/01/2015 | ||||||||||||||
Loan | 27 | University Center | 1.2% | Beall’s Outlet | 21,020 | 04/30/2025 | Dollar Tree | 12,448 | 09/30/2020 | San Juan Cleaners | 900 | 09/30/2022 | 100.0% | 08/12/2015 |
A-1-15 |
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | ||||||||||||||||||||||||||||
Property | Initial Pool | Lease | Lease | Lease | Occupancy | |||||||||||||||||||||||
Flag | ID | Property Name | Balance | 3rd Largest Tenant (23)(26) | SF | Expiration | 4th Largest Tenant | SF | Expiration | 5th Largest Tenant (26) | SF | Expiration | Occupancy | As-of Date | ||||||||||||||
Loan | 28 | The Parking Spot Portfolio | 1.2% | NAP | NAP | |||||||||||||||||||||||
Property | 28.01 | The Parking Spot Columbus | 0.7% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||||
Property | 28.02 | The Parking Spot Buffalo | 0.5% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||||
Loan | 29 | Hotel Preston | 1.1% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 76.5% | 06/30/2015 | ||||||||||||||
Loan | 30 | Arrowhead Shopping Center | 1.1% | Tuesday Morning | 8,450 | 07/31/2020 | Teaching and Learning Stuff | 4,605 | 10/31/2017 | Arrowhead Martial Arts | 3,232 | 09/30/2019 | 95.2% | 06/01/2015 | ||||||||||||||
Loan | 31 | Chestnut Street | 1.1% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 100.0% | 09/01/2015 | ||||||||||||||
Loan | 32 | Renner Commerce Center Portfolio | 1.1% | 100.0% | 07/01/2015 | |||||||||||||||||||||||
Property | 32.01 | Renner Commerce Center - South | 0.6% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 100.0% | 07/01/2015 | ||||||||||||||
Property | 32.02 | Renner Commerce Center - North | 0.5% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 100.0% | 07/01/2015 | ||||||||||||||
Loan | 33 | Rockford Crossing | 1.0% | DSW | 19,467 | 04/30/2025 | Aldi | 18,352 | 06/30/2030 | GameStop | 2,005 | 01/31/2016 | 97.6% | 08/12/2015 | ||||||||||||||
Loan | 34 | Shops at Randall Road | 1.0% | Shoe Carnival | 10,072 | 05/31/2023 | Pier 1 Imports | 9,403 | 02/28/2017 | Lumber Liquidators | 8,400 | 08/31/2022 | 100.0% | 06/30/2015 | ||||||||||||||
Loan | 35 | Fort Myers Self Storage Portfolio | 0.9% | 83.9% | Various | |||||||||||||||||||||||
Property | 35.01 | Estero Self Storage | 0.5% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 86.8% | 07/10/2015 | ||||||||||||||
Property | 35.02 | Valuguard Self Storage | 0.4% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 81.2% | 06/30/2015 | ||||||||||||||
Loan | 36 | Lancaster Towers | 0.9% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 99.4% | 07/31/2015 | ||||||||||||||
Loan | 37 | Brookhaven MHP | 0.8% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 91.2% | 07/09/2015 | ||||||||||||||
Loan | 38 | Park Villas Townhomes | 0.8% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 94.6% | 06/05/2015 | ||||||||||||||
Loan | 39 | Evergreen Square | 0.8% | Petco | 11,281 | 01/31/2021 | Dollar Tree | 11,096 | 01/31/2025 | Party City | 10,860 | 06/30/2019 | 95.1% | 07/31/2015 | ||||||||||||||
Loan | 40 | Rio Verde & Sagewood Apartments Portfolio | 0.7% | 91.9% | 08/01/2015 | |||||||||||||||||||||||
Property | 40.01 | Sagewood Apartments | 0.4% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 93.8% | 08/01/2015 | ||||||||||||||
Property | 40.02 | Rio Verde Apartments | 0.3% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 90.0% | 08/01/2015 | ||||||||||||||
Loan | 41 | CSRA Food Lion Portfolio II (37) | 0.7% | 95.0% | 07/21/2015 | |||||||||||||||||||||||
Property | 41.01 | Kimberly Park | 0.4% | Time Out Sports Bar & Grille | 2,700 | 08/31/2017 | Moore County ABC Board | 1,800 | 02/28/2016 | V-Nails | 1,200 | 07/01/2020 | 95.0% | 07/21/2015 | ||||||||||||||
Property | 41.02 | Eden Center | 0.3% | Signature Nails | 2,255 | 12/31/2024 | OneMain Financial, Inc. | 1,500 | 03/31/2019 | Subway Real Estate Corp. | 1,200 | 06/30/2016 | 94.9% | 07/21/2015 | ||||||||||||||
Loan | 42 | La Galleria at the Mills | 0.7% | Scrubsworld LLC | 2,908 | 03/31/2020 | T-Mobile USA, Inc. | 2,841 | 09/30/2020 | Velvet Room | 2,005 | 03/31/2020 | 100.0% | 07/31/2015 | ||||||||||||||
Loan | 43 | Clive Distribution Center | 0.6% | Prairie Van & Storage | 29,500 | 08/31/2019 | Centennial Logistics, LLC | 20,000 | 08/31/2017 | Comercializadora Del Midwest, LLC | 20,000 | 01/31/2019 | 100.0% | 08/31/2015 | ||||||||||||||
Loan | 44 | Days Inn | 0.6% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 81.0% | 07/31/2015 | ||||||||||||||
Loan | 45 | Dollar Self Storage - Tucson | 0.6% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 86.5% | 06/01/2015 | ||||||||||||||
Loan | 46 | The Meadows Apartments | 0.6% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 91.4% | 07/07/2015 | ||||||||||||||
Loan | 47 | Witte Oaks Apartments | 0.5% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 95.1% | 08/10/2015 | ||||||||||||||
Loan | 48 | Chambers Place | 0.5% | Jacob Pak (Hair Accessories) | 2,600 | 06/30/2016 | Rico Pan Bakery Inc | 2,594 | 10/31/2018 | Valdivia Fashions | 2,037 | 06/30/2018 | 94.1% | 07/31/2015 | ||||||||||||||
Loan | 49 | Sonora Cascade MHC | 0.5% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 92.9% | 07/28/2015 | ||||||||||||||
Loan | 50 | Walgreens Aurora, IN | 0.5% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 100.0% | 07/13/2015 | ||||||||||||||
Loan | 51 | Empire Central | 0.4% | The Editing Company | 8,988 | 02/01/2017 | NordStar Group | 5,400 | 09/01/2019 | AeroCare Home Medical | 5,373 | 05/01/2019 | 89.0% | 06/03/2015 | ||||||||||||||
Loan | 52 | Grove Park Shopping Center | 0.4% | Kool Smiles | 6,291 | 12/31/2019 | Beauty Line 4 | 6,206 | 10/31/2018 | South Carolina State University | 6,000 | 11/01/2015 | 89.9% | 08/27/2015 | ||||||||||||||
Loan | 53 | Camelot Medical Office & Dunkin’ Donuts | 0.4% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 100.0% | 08/31/2015 | ||||||||||||||
Loan | 54 | Parkway Plaza Shopping Center | 0.4% | Subway | 1,600 | 06/30/2017 | Chinatown | 1,600 | 02/28/2016 | LA Nails | 1,600 | 10/31/2016 | 96.9% | 08/13/2015 | ||||||||||||||
Loan | 55 | Midvale Park Self Storage | 0.4% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 80.1% | 06/16/2015 | ||||||||||||||
Loan | 56 | Fresenius Medical Care Lake City | 0.4% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 100.0% | 06/01/2015 | ||||||||||||||
Loan | 57 | Bonita Springs Self Storage (38) | 0.3% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 82.6% | 06/30/2015 | ||||||||||||||
Loan | 58 | Fresenius Medical Care Greece | 0.3% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 100.0% | 04/01/2015 | ||||||||||||||
Loan | 59 | Storage Pros Lansing | 0.3% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 92.7% | 04/23/2015 | ||||||||||||||
Loan | 60 | 4001 North Lincoln | 0.3% | Creative Hairdressers, Inc. | 1,396 | 06/30/2019 | Undra, Inc. - Prima Donna Nais | 1,010 | 11/30/2019 | Christian Montero - Dry Cleaners | 740 | 06/30/2018 | 85.4% | 09/02/2015 | ||||||||||||||
Loan | 61 | Terrace Oak Apartments | 0.3% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 100.0% | 07/01/2015 | ||||||||||||||
Loan | 62 | Rhett at Remount | 0.3% | Smokey’s Place | 4,240 | 08/31/2017 | NAP | NAP | NAP | NAP | NAP | NAP | 100.0% | 06/30/2015 | ||||||||||||||
Loan | 63 | Winchester Oaks Apartments | 0.2% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 97.4% | 08/19/2015 | ||||||||||||||
Loan | 64 | All Star Storage | 0.2% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 97.2% | 07/22/2015 | ||||||||||||||
Loan | 65 | Midvale Park RV Storage | 0.1% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | 72.1% | 06/16/2015 |
A-1-16 |
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | Upfront | Monthly | Upfront | |||||||||
Property | Initial Pool | Replacement | Replacement | TI/LC | ||||||||
Flag | ID | Property Name | Balance | Reserves($) (30) | Reserves ($)(31)(32)(33) | Reserves ($)(30)(33) | ||||||
Loan | 1 | 11 Madison Avenue (35)(36)(37) | 7.5% | Springing | 81,152,102 | |||||||
Loan | 2 | NMS Los Angeles Multifamily Portfolio (35) | 7.0% | 8,000 | ||||||||
Property | 2.01 | Luxe at 1548 | 1.6% | |||||||||
Property | 2.02 | Luxe at 1539 | 1.5% | |||||||||
Property | 2.03 | Luxe at 1759 | 1.4% | |||||||||
Property | 2.04 | NMS at Northridge | 1.3% | |||||||||
Property | 2.05 | NMS at Warner Center | 0.9% | |||||||||
Property | 2.06 | NMS at Superior | 0.4% | |||||||||
Loan | 3 | Sandalwood Portfolio | 6.8% | 41,100 | ||||||||
Property | 3.01 | Oaks of Northgate | 1.1% | |||||||||
Property | 3.02 | Cimarron Crossing | 1.1% | |||||||||
Property | 3.03 | Brandon Oaks | 1.1% | |||||||||
Property | 3.04 | Sugar Tree Apartments | 1.0% | |||||||||
Property | 3.05 | Arlington Oaks | 0.9% | |||||||||
Property | 3.06 | Lakeshire Place | 0.9% | |||||||||
Property | 3.07 | Sundance Apartments | 0.6% | |||||||||
Loan | 4 | Atlanta Multifamily Portfolio (37) | 4.8% | 12,250 | ||||||||
Property | 4.01 | Rosemont Cityview Apartments | 2.5% | |||||||||
Property | 4.02 | Dawson Forest Apartments | 2.4% | |||||||||
Loan | 5 | The Drake | 4.7% | 2,725 | ||||||||
Loan | 6 | Midwest Shopping Center Portfolio (37) | 4.1% | 14,824 | 500,000 | |||||||
Property | 6.01 | Home Depot Shopping Center | 1.2% | |||||||||
Property | 6.02 | Calumet Center | 0.7% | |||||||||
Property | 6.03 | Waterloo Plaza | 0.7% | |||||||||
Property | 6.04 | Broadway Plaza | 0.6% | |||||||||
Property | 6.05 | Kansas Center | 0.5% | |||||||||
Property | 6.06 | Neil Street Shopping Center | 0.4% | |||||||||
Loan | 7 | Intellicenter | 3.6% | 3,392 | 3,392 | 250,000 | ||||||
Loan | 8 | Hotel deLuxe | 3.5% | 4.0% of prior month’s gross revenues | ||||||||
Loan | 9 | Green Valley Corporate Center | 2.9% | 3,000 | 3,393 | 1,652,360 | ||||||
Loan | 10 | Chase Park | 2.9% | 4,566 | 1,433,086 | |||||||
Loan | 11 | Cookie Factory Lofts | 2.5% | 2,967 | ||||||||
Loan | 12 | Windrift Apartments | 2.3% | 7,416 | ||||||||
Loan | 13 | Village Square at Kiln Creek | 2.2% | 4,450 | 4,450 | 500,000 | ||||||
Loan | 14 | Ocala Portfolio - AHIP | 2.0% | Springing | ||||||||
Property | 14.01 | Courtyard Ocala | 0.9% | |||||||||
Property | 14.02 | Residence Inn Ocala | 0.7% | |||||||||
Property | 14.03 | Fairfield Inn & Suites Ocala | 0.5% | |||||||||
Loan | 15 | Hilton Garden Inn Charlotte Airport | 2.0% | 18,360 | 1/12 of 4.0% of prior year’s gross revenues | |||||||
Loan | 16 | GSP MHP Portfolio I | 1.9% | 2,167 | ||||||||
Property | 16.01 | Indian Creek Village | 1.0% | |||||||||
Property | 16.02 | Cedar Manor MHP | 1.0% | |||||||||
Loan | 17 | A&H Pacific | 1.9% | 249 | 25,000 | |||||||
Loan | 18 | WHG Extended Stay Portfolio | 1.7% | 100,000 | The greater of (i) 1/12 of 4.0% of gross revenues for the month that is 2 months prior to such payment date, (ii) any amount required under the Franchise Agreement for FF&E and (iii) $15,000. | |||||||
Property | 18.01 | Sun Suites Louisville | 0.4% | |||||||||
Property | 18.02 | HomeTowne Suites Columbia | 0.4% | |||||||||
Property | 18.03 | Sun Suites Alexandria | 0.3% | |||||||||
Property | 18.04 | HomeTowne Suites Montgomery | 0.3% | |||||||||
Property | 18.05 | Sun Suites Gainesville | 0.3% | |||||||||
Loan | 19 | Greater Boston Industrial Portfolio I | 1.7% | 1,050,000 | Springing | 1,010,771 | ||||||
Property | 19.01 | 65 Sunnyslope Avenue | 0.9% | |||||||||
Property | 19.02 | 82 South Street | 0.5% | |||||||||
Property | 19.03 | 19 Technology Drive | 0.3% | |||||||||
Loan | 20 | Reserve at Conway | 1.6% | 4,583 | ||||||||
Loan | 21 | Chestnut Hill Apartments | 1.6% | 11,500 | 11,500 | |||||||
Loan | 22 | Hilton Greenville | 1.5% | 28,443 | Greater of (i) 1/12 of 4.0% of the greater of (a) prior year’s gross income from operations and (b) gross income projected in approved ann. budget for following year and (ii) amount required under Franchise Agreement | |||||||
Loan | 23 | The Phenix at Infinity Park II | 1.5% | 2,183 | ||||||||
Loan | 24 | Cannon West Shopping Center | 1.4% | 2,166 | ||||||||
Loan | 25 | HGI Kennewick | 1.4% | The greater of 4.0% of prior month’s gross revenues and any amount required under Management Agreement or Franchise Agreement for FF&E Work | ||||||||
Loan | 26 | Golf Center | 1.2% | 2,071 | ||||||||
Loan | 27 | University Center | 1.2% | Springing |
A-1-17 |
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | Upfront | Monthly | Upfront | |||||||||
Property | Initial Pool | Replacement | Replacement | TI/LC | ||||||||
Flag | ID | Property Name | Balance | Reserves($) (30) | Reserves ($)(31)(32)(33) | Reserves ($)(30)(33) | ||||||
Loan | 28 | The Parking Spot Portfolio | 1.2% | 6,835 | 6,835 | |||||||
Property | 28.01 | The Parking Spot Columbus | 0.7% | |||||||||
Property | 28.02 | The Parking Spot Buffalo | 0.5% | |||||||||
Loan | 29 | Hotel Preston | 1.1% | 5.0% of prior month’s gross revenues | ||||||||
Loan | 30 | Arrowhead Shopping Center | 1.1% | 1,057 | 3,525 | |||||||
Loan | 31 | Chestnut Street | 1.1% | 646 | 646 | 240,000 | ||||||
Loan | 32 | Renner Commerce Center Portfolio | 1.1% | 1,835 | 1,835 | 3,931 | ||||||
Property | 32.01 | Renner Commerce Center - South | 0.6% | |||||||||
Property | 32.02 | Renner Commerce Center - North | 0.5% | |||||||||
Loan | 33 | Rockford Crossing | 1.0% | Springing | ||||||||
Loan | 34 | Shops at Randall Road | 1.0% | 1,629 | ||||||||
Loan | 35 | Fort Myers Self Storage Portfolio | 0.9% | 1,072 | ||||||||
Property | 35.01 | Estero Self Storage | 0.5% | |||||||||
Property | 35.02 | Valuguard Self Storage | 0.4% | |||||||||
Loan | 36 | Lancaster Towers | 0.9% | 4,150 | 4,150 | |||||||
Loan | 37 | Brookhaven MHP | 0.8% | 784 | ||||||||
Loan | 38 | Park Villas Townhomes | 0.8% | 6,108 | 6,108 | |||||||
Loan | 39 | Evergreen Square | 0.8% | 92,067 | 2,307 | |||||||
Loan | 40 | Rio Verde & Sagewood Apartments Portfolio | 0.7% | 3,787 | 3,787 | |||||||
Property | 40.01 | Sagewood Apartments | 0.4% | |||||||||
Property | 40.02 | Rio Verde Apartments | 0.3% | |||||||||
Loan | 41 | CSRA Food Lion Portfolio II (37) | 0.7% | 1,782 | 200,000 | |||||||
Property | 41.01 | Kimberly Park | 0.4% | |||||||||
Property | 41.02 | Eden Center | 0.3% | |||||||||
Loan | 42 | La Galleria at the Mills | 0.7% | 340 | 340 | 50,000 | ||||||
Loan | 43 | Clive Distribution Center | 0.6% | 3,250 | ||||||||
Loan | 44 | Days Inn | 0.6% | The greater of (i) 1/12 of 4.0% times the annual Total Revenue of the Property for the previous 12 month period, (ii) any amount required under the Franchise Agreement and (iii) 9,332.15 | ||||||||
Loan | 45 | Dollar Self Storage - Tucson | 0.6% | 1,085 | 1,085 | |||||||
Loan | 46 | The Meadows Apartments | 0.6% | 136,704 | Springing | |||||||
Loan | 47 | Witte Oaks Apartments | 0.5% | 400,000 | 3,050 | |||||||
Loan | 48 | Chambers Place | 0.5% | 474 | 75,000 | |||||||
Loan | 49 | Sonora Cascade MHC | 0.5% | 537 | ||||||||
Loan | 50 | Walgreens Aurora, IN | 0.5% | Springing | ||||||||
Loan | 51 | Empire Central | 0.4% | 1,738 | ||||||||
Loan | 52 | Grove Park Shopping Center | 0.4% | 2,131 | 2,131 | 5,770 | ||||||
Loan | 53 | Camelot Medical Office & Dunkin’ Donuts | 0.4% | 885 | 885 | |||||||
Loan | 54 | Parkway Plaza Shopping Center | 0.4% | 1,309 | 1,309 | 2,836 | ||||||
Loan | 55 | Midvale Park Self Storage | 0.4% | 720 | 720 | |||||||
Loan | 56 | Fresenius Medical Care Lake City | 0.4% | 10,500 | ||||||||
Loan | 57 | Bonita Springs Self Storage (38) | 0.3% | 675 | 675 | |||||||
Loan | 58 | Fresenius Medical Care Greece | 0.3% | 9,350 | ||||||||
Loan | 59 | Storage Pros Lansing | 0.3% | 844 | 844 | |||||||
Loan | 60 | 4001 North Lincoln | 0.3% | 165 | 30,000 | |||||||
Loan | 61 | Terrace Oak Apartments | 0.3% | 1,200 | ||||||||
Loan | 62 | Rhett at Remount | 0.3% | 535 | 535 | 100,000 | ||||||
Loan | 63 | Winchester Oaks Apartments | 0.2% | 1,950 | 1,950 | |||||||
Loan | 64 | All Star Storage | 0.2% | 390 | 390 | |||||||
Loan | 65 | Midvale Park RV Storage | 0.1% | 717 | 717 |
A-1-18 |
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | Monthly | Upfront | Monthly | Upfront | Monthly | Upfront | Upfront | Monthly | ||||||||||||||
Property | Initial Pool | TI/LC | Tax | Tax | Insurance | Insurance | Engineering | Other | Other | |||||||||||||
Flag | ID | Property Name | Balance | Reserves ($)(31)(32)(33) | Reserves ($)(30) | Reserves ($)(31)(32) | Reserves($)(30) | Reserves ($)(31)(32) | Reserve($)(30) | Reserves ($)(30) | Reserves ($)(31)(32)(33) | |||||||||||
Loan | 1 | 11 Madison Avenue (35)(36)(37) | 7.5% | Springing | Springing | Springing | 55,348,898 | |||||||||||||||
Loan | 2 | NMS Los Angeles Multifamily Portfolio (35) | 7.0% | 633,333 | 79,167 | 52,199 | 10,440 | 199,100 | ||||||||||||||
Property | 2.01 | Luxe at 1548 | 1.6% | |||||||||||||||||||
Property | 2.02 | Luxe at 1539 | 1.5% | |||||||||||||||||||
Property | 2.03 | Luxe at 1759 | 1.4% | |||||||||||||||||||
Property | 2.04 | NMS at Northridge | 1.3% | |||||||||||||||||||
Property | 2.05 | NMS at Warner Center | 0.9% | |||||||||||||||||||
Property | 2.06 | NMS at Superior | 0.4% | |||||||||||||||||||
Loan | 3 | Sandalwood Portfolio | 6.8% | 1,322,157 | 165,270 | 175,000 | Springing | 497,169 | ||||||||||||||
Property | 3.01 | Oaks of Northgate | 1.1% | |||||||||||||||||||
Property | 3.02 | Cimarron Crossing | 1.1% | |||||||||||||||||||
Property | 3.03 | Brandon Oaks | 1.1% | |||||||||||||||||||
Property | 3.04 | Sugar Tree Apartments | 1.0% | |||||||||||||||||||
Property | 3.05 | Arlington Oaks | 0.9% | |||||||||||||||||||
Property | 3.06 | Lakeshire Place | 0.9% | |||||||||||||||||||
Property | 3.07 | Sundance Apartments | 0.6% | |||||||||||||||||||
Loan | 4 | Atlanta Multifamily Portfolio (37) | 4.8% | 86,429 | 37,076 | Springing | 43,750 | 4,190,000 | ||||||||||||||
Property | 4.01 | Rosemont Cityview Apartments | 2.5% | |||||||||||||||||||
Property | 4.02 | Dawson Forest Apartments | 2.4% | |||||||||||||||||||
Loan | 5 | The Drake | 4.7% | 100,596 | 16,750 | Springing | Springing | |||||||||||||||
Loan | 6 | Midwest Shopping Center Portfolio (37) | 4.1% | 29,647 | 894,563 | 224,518 | Springing | 105,640 | 58,401 | Springing | ||||||||||||
Property | 6.01 | Home Depot Shopping Center | 1.2% | |||||||||||||||||||
Property | 6.02 | Calumet Center | 0.7% | |||||||||||||||||||
Property | 6.03 | Waterloo Plaza | 0.7% | |||||||||||||||||||
Property | 6.04 | Broadway Plaza | 0.6% | |||||||||||||||||||
Property | 6.05 | Kansas Center | 0.5% | |||||||||||||||||||
Property | 6.06 | Neil Street Shopping Center | 0.4% | |||||||||||||||||||
Loan | 7 | Intellicenter | 3.6% | 16,959 | 630,000 | 52,500 | Springing | Springing | ||||||||||||||
Loan | 8 | Hotel deLuxe | 3.5% | 102,978 | 5,598 | Springing | ||||||||||||||||
Loan | 9 | Green Valley Corporate Center | 2.9% | 15,626 | 11,771 | 12,515 | Springing | |||||||||||||||
Loan | 10 | Chase Park | 2.9% | 25,137 | 375,850 | 46,981 | Springing | 9,775 | 67,479 | Springing | ||||||||||||
Loan | 11 | Cookie Factory Lofts | 2.5% | 42,720 | 5,340 | 22,428 | Springing | 360,353 | ||||||||||||||
Loan | 12 | Windrift Apartments | 2.3% | 263,475 | 23,952 | 78,160 | 11,166 | Springing | ||||||||||||||
Loan | 13 | Village Square at Kiln Creek | 2.2% | 13,796 | 23,511 | 5,878 | Springing | Springing | ||||||||||||||
Loan | 14 | Ocala Portfolio - AHIP | 2.0% | 197,032 | 21,892 | Springing | 16,500 | 3,170,000 | ||||||||||||||
Property | 14.01 | Courtyard Ocala | 0.9% | |||||||||||||||||||
Property | 14.02 | Residence Inn Ocala | 0.7% | |||||||||||||||||||
Property | 14.03 | Fairfield Inn & Suites Ocala | 0.5% | |||||||||||||||||||
Loan | 15 | Hilton Garden Inn Charlotte Airport | 2.0% | 112,489 | 11,841 | 4,739 | 1,185 | |||||||||||||||
Loan | 16 | GSP MHP Portfolio I | 1.9% | 152,182 | 21,740 | Springing | 3,188 | 360,614 | ||||||||||||||
Property | 16.01 | Indian Creek Village | 1.0% | |||||||||||||||||||
Property | 16.02 | Cedar Manor MHP | 1.0% | |||||||||||||||||||
Loan | 17 | A&H Pacific | 1.9% | 2,083 | 66,752 | 8,344 | Springing | 27,500 | ||||||||||||||
Loan | 18 | WHG Extended Stay Portfolio | 1.7% | 140,352 | 20,050 | Springing | ||||||||||||||||
Property | 18.01 | Sun Suites Louisville | 0.4% | |||||||||||||||||||
Property | 18.02 | HomeTowne Suites Columbia | 0.4% | |||||||||||||||||||
Property | 18.03 | Sun Suites Alexandria | 0.3% | |||||||||||||||||||
Property | 18.04 | HomeTowne Suites Montgomery | 0.3% | |||||||||||||||||||
Property | 18.05 | Sun Suites Gainesville | 0.3% | |||||||||||||||||||
Loan | 19 | Greater Boston Industrial Portfolio I | 1.7% | Springing | 63,857 | 31,928 | 6,133 | 2,044 | 38,125 | |||||||||||||
Property | 19.01 | 65 Sunnyslope Avenue | 0.9% | |||||||||||||||||||
Property | 19.02 | 82 South Street | 0.5% | |||||||||||||||||||
Property | 19.03 | 19 Technology Drive | 0.3% | |||||||||||||||||||
Loan | 20 | Reserve at Conway | 1.6% | 188,411 | 18,841 | Springing | 11,625 | 1,391,748 | ||||||||||||||
Loan | 21 | Chestnut Hill Apartments | 1.6% | 188,024 | 20,892 | 55,039 | 9,173 | |||||||||||||||
Loan | 22 | Hilton Greenville | 1.5% | 12,592 | 12,592 | Springing | 223,500 | 3,776,500 | Springing | |||||||||||||
Loan | 23 | The Phenix at Infinity Park II | 1.5% | 15,986 | 3,997 | 19,437 | 1,944 | 32,813 | ||||||||||||||
Loan | 24 | Cannon West Shopping Center | 1.4% | 5,415 | 205,611 | 22,846 | 25,841 | 2,524 | 4,062 | 59,325 | Springing | |||||||||||
Loan | 25 | HGI Kennewick | 1.4% | 37,728 | 7,819 | Springing | 394 | 460,000 | Springing | |||||||||||||
Loan | 26 | Golf Center | 1.2% | $4,695 through and including August 6, 2019; $6,904 thereafter | 39,800 | 66,333 | Springing | 341,520 | 60,167 | Springing | ||||||||||||
Loan | 27 | University Center | 1.2% | Springing | 85,877 | 7,156 | Springing | Springing |
A-1-19 |
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | Monthly | Upfront | Monthly | Upfront | Monthly | Upfront | Upfront | Monthly | ||||||||||||||
Property | Initial Pool | TI/LC | Tax | Tax | Insurance | Insurance | Engineering | Other | Other | |||||||||||||
Flag | ID | Property Name | Balance | Reserves ($)(31)(32)(33) | Reserves ($)(30) | Reserves ($)(31)(32) | Reserves($)(30) | Reserves ($)(31)(32) | Reserve($)(30) | Reserves ($)(30) | Reserves ($)(31)(32)(33) | |||||||||||
Loan | 28 | The Parking Spot Portfolio | 1.2% | 37,444 | 6,974 | 3,404 | 681 | |||||||||||||||
Property | 28.01 | The Parking Spot Columbus | 0.7% | |||||||||||||||||||
Property | 28.02 | The Parking Spot Buffalo | 0.5% | |||||||||||||||||||
Loan | 29 | Hotel Preston | 1.1% | 69,099 | 9,871 | Springing | 180,000 | Springing | ||||||||||||||
Loan | 30 | Arrowhead Shopping Center | 1.1% | 3,525 | 39,177 | 9,794 | Springing | 87,115 | 32,587 | Springing | ||||||||||||
Loan | 31 | Chestnut Street | 1.1% | Springing | 81,146 | 10,144 | Springing | Springing | ||||||||||||||
Loan | 32 | Renner Commerce Center Portfolio | 1.1% | 3,931 | 88,413 | 17,683 | 8,864 | 739 | 832,500 | |||||||||||||
Property | 32.01 | Renner Commerce Center - South | 0.6% | |||||||||||||||||||
Property | 32.02 | Renner Commerce Center - North | 0.5% | |||||||||||||||||||
Loan | 33 | Rockford Crossing | 1.0% | Springing | 42,695 | 21,348 | Springing | 375,000 | Springing | |||||||||||||
Loan | 34 | Shops at Randall Road | 1.0% | 3,259 | 43,078 | 21,539 | Springing | |||||||||||||||
Loan | 35 | Fort Myers Self Storage Portfolio | 0.9% | 39,258 | 6,543 | 11,177 | 5,589 | |||||||||||||||
Property | 35.01 | Estero Self Storage | 0.5% | |||||||||||||||||||
Property | 35.02 | Valuguard Self Storage | 0.4% | |||||||||||||||||||
Loan | 36 | Lancaster Towers | 0.9% | 42,817 | 10,704 | Springing | Springing | |||||||||||||||
Loan | 37 | Brookhaven MHP | 0.8% | 65,815 | 9,402 | Springing | 15,125 | |||||||||||||||
Loan | 38 | Park Villas Townhomes | 0.8% | 83,724 | 10,465 | 50,844 | 10,169 | |||||||||||||||
Loan | 39 | Evergreen Square | 0.8% | 6,920 | 17,677 | 1,475 | 1,475 | 26,400 | Springing | |||||||||||||
Loan | 40 | Rio Verde & Sagewood Apartments Portfolio | 0.7% | 18,457 | 3,691 | 11,786 | 1,964 | |||||||||||||||
Property | 40.01 | Sagewood Apartments | 0.4% | |||||||||||||||||||
Property | 40.02 | Rio Verde Apartments | 0.3% | |||||||||||||||||||
Loan | 41 | CSRA Food Lion Portfolio II (37) | 0.7% | 8,021 | 6,588 | 6,588 | 3,180 | 1,590 | 2,500 | 60,015 | ||||||||||||
Property | 41.01 | Kimberly Park | 0.4% | |||||||||||||||||||
Property | 41.02 | Eden Center | 0.3% | |||||||||||||||||||
Loan | 42 | La Galleria at the Mills | 0.7% | 3,580 | 33,646 | 5,608 | 4,791 | 799 | 23,800 | |||||||||||||
Loan | 43 | Clive Distribution Center | 0.6% | 4,333 | 13,212 | 16,009 | Springing | 13,513 | 103,916 | Springing | ||||||||||||
Loan | 44 | Days Inn | 0.6% | 3,651 | 3,651 | 6,383 | 1,277 | 240,000 | Springing | |||||||||||||
Loan | 45 | Dollar Self Storage - Tucson | 0.6% | 35,217 | 8,804 | 1,867 | 373 | |||||||||||||||
Loan | 46 | The Meadows Apartments | 0.6% | 47,787 | 7,964 | 42,404 | 3,534 | |||||||||||||||
Loan | 47 | Witte Oaks Apartments | 0.5% | 79,975 | 9,997 | 9,328 | 4,664 | 13,375 | ||||||||||||||
Loan | 48 | Chambers Place | 0.5% | Springing | 22,239 | 7,413 | 8,328 | 833 | 13,412 | |||||||||||||
Loan | 49 | Sonora Cascade MHC | 0.5% | 27,749 | 4,625 | 6,534 | 653 | 101,769 | ||||||||||||||
Loan | 50 | Walgreens Aurora, IN | 0.5% | Springing | Springing | |||||||||||||||||
Loan | 51 | Empire Central | 0.4% | 5,134 | 70,482 | 8,810 | 8,186 | 4,093 | Springing | |||||||||||||
Loan | 52 | Grove Park Shopping Center | 0.4% | 5,770 | Springing | 19,749 | 1,975 | Springing | ||||||||||||||
Loan | 53 | Camelot Medical Office & Dunkin’ Donuts | 0.4% | 1,771 | 34,412 | 7,941 | 2,260 | 753 | 4,688 | Springing | ||||||||||||
Loan | 54 | Parkway Plaza Shopping Center | 0.4% | 2,836 | Springing | 14,263 | 4,754 | Springing | ||||||||||||||
Loan | 55 | Midvale Park Self Storage | 0.4% | 3,746 | 1,518 | 304 | Springing | |||||||||||||||
Loan | 56 | Fresenius Medical Care Lake City | 0.4% | Springing | 8,632 | 785 | 2,173 | 1,087 | ||||||||||||||
Loan | 57 | Bonita Springs Self Storage (38) | 0.3% | 32,928 | 4,679 | 796 | 796 | |||||||||||||||
Loan | 58 | Fresenius Medical Care Greece | 0.3% | Springing | 8,610 | 1,230 | 743 | 372 | ||||||||||||||
Loan | 59 | Storage Pros Lansing | 0.3% | 22,851 | 3,808 | 827 | 413 | |||||||||||||||
Loan | 60 | 4001 North Lincoln | 0.3% | 825 | 22,204 | 5,551 | Springing | |||||||||||||||
Loan | 61 | Terrace Oak Apartments | 0.3% | 5,423 | 5,602 | 1,867 | 175,813 | |||||||||||||||
Loan | 62 | Rhett at Remount | 0.3% | 2,667 | 38,216 | 4,246 | 13,216 | 1,468 | 135,952 | Springing | ||||||||||||
Loan | 63 | Winchester Oaks Apartments | 0.2% | 14,384 | 3,596 | 7,937 | 1,323 | |||||||||||||||
Loan | 64 | All Star Storage | 0.2% | 12,181 | 1,015 | 3,826 | 383 | |||||||||||||||
Loan | 65 | Midvale Park RV Storage | 0.1% | 1,576 | 567 | 113 | Springing |
A-1-20 |
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | Other | Environmental | ||||||||||
Property | Initial Pool | Reserves | Report | Engineering | ||||||||
Flag | ID | Property Name | Balance | Description | Date (34) | Report Date | ||||||
Loan | 1 | 11 Madison Avenue (35)(36)(37) | 7.5% | Credit Suisse Sublease Payments (Upfront: $36,500,000); Sony Free Rent (Upfront: $18,847,898); Endorsement Fund (Upfront: $1,000) | 04/30/2015 | 04/30/2015 | ||||||
Loan | 2 | NMS Los Angeles Multifamily Portfolio (35) | 7.0% | |||||||||
Property | 2.01 | Luxe at 1548 | 1.6% | 08/12/2015 | 06/23/2015 | |||||||
Property | 2.02 | Luxe at 1539 | 1.5% | 07/20/2015 | 06/23/2015 | |||||||
Property | 2.03 | Luxe at 1759 | 1.4% | 08/12/2015 | 06/23/2015 | |||||||
Property | 2.04 | NMS at Northridge | 1.3% | 08/12/2015 | 08/12/2015 | |||||||
Property | 2.05 | NMS at Warner Center | 0.9% | 08/12/2015 | 06/23/2015 | |||||||
Property | 2.06 | NMS at Superior | 0.4% | 08/12/2015 | 08/12/2015 | |||||||
Loan | 3 | Sandalwood Portfolio | 6.8% | |||||||||
Property | 3.01 | Oaks of Northgate | 1.1% | 07/17/2015 | 07/17/2015 | |||||||
Property | 3.02 | Cimarron Crossing | 1.1% | 07/17/2015 | 07/17/2015 | |||||||
Property | 3.03 | Brandon Oaks | 1.1% | 07/17/2015 | 07/17/2015 | |||||||
Property | 3.04 | Sugar Tree Apartments | 1.0% | 07/17/2015 | 07/17/2015 | |||||||
Property | 3.05 | Arlington Oaks | 0.9% | 07/17/2015 | 07/15/2015 | |||||||
Property | 3.06 | Lakeshire Place | 0.9% | 07/17/2015 | 07/17/2015 | |||||||
Property | 3.07 | Sundance Apartments | 0.6% | 07/17/2015 | 07/17/2015 | |||||||
Loan | 4 | Atlanta Multifamily Portfolio (37) | 4.8% | Capital Expenditure Funds Holdback (Upfront: 3,690,000); Tax Reassessment Reserve (Upfront: 500,000) | ||||||||
Property | 4.01 | Rosemont Cityview Apartments | 2.5% | 07/13/2015 | 07/13/2015 | |||||||
Property | 4.02 | Dawson Forest Apartments | 2.4% | 07/13/2015 | 07/13/2015 | |||||||
Loan | 5 | The Drake | 4.7% | Ground Rent Reserve (Monthly: Springing) | 06/23/2015 | 06/24/2015 | ||||||
Loan | 6 | Midwest Shopping Center Portfolio (37) | 4.1% | Ross Dress for Less Reserve (Upfront: 58,401); Lease Sweep Reserve (Springing Monthly: Excess Cash Flow) | ||||||||
Property | 6.01 | Home Depot Shopping Center | 1.2% | 04/28/2015 | 05/18/2015 | |||||||
Property | 6.02 | Calumet Center | 0.7% | 04/28/2015 | 05/18/2015 | |||||||
Property | 6.03 | Waterloo Plaza | 0.7% | 04/28/2015 | 05/18/2015 | |||||||
Property | 6.04 | Broadway Plaza | 0.6% | 04/28/2015 | 05/18/2015 | |||||||
Property | 6.05 | Kansas Center | 0.5% | 04/28/2015 | 05/18/2015 | |||||||
Property | 6.06 | Neil Street Shopping Center | 0.4% | 04/28/2015 | 05/18/2015 | |||||||
Loan | 7 | Intellicenter | 3.6% | Morgan Stanley Reserve (Future one-time deposit: Springing); Major Tenant Rollover Reserve (Springing Monthly: Excess Cash Flow) | 07/16/2015 | 07/16/2015 | ||||||
Loan | 8 | Hotel deLuxe | 3.5% | 04/14/2015 | 04/14/2015 | |||||||
Loan | 9 | Green Valley Corporate Center | 2.9% | 06/15/2015 | 06/18/2015 | |||||||
Loan | 10 | Chase Park | 2.9% | Free Rent Reserve (Upfront: 67,479); Lease Sweep Reserve (Springing Monthly: Excess Cash Flow) | 06/04/2015 | 06/04/2015 | ||||||
Loan | 11 | Cookie Factory Lofts | 2.5% | Debt Service Reserve (Upfront: 360,353) | 08/13/2015 | 08/13/2015 | ||||||
Loan | 12 | Windrift Apartments | 2.3% | Required Repairs Reserve (Future one-time deposit: Springing) | 07/06/2015 | 07/02/2015 | ||||||
Loan | 13 | Village Square at Kiln Creek | 2.2% | Debt Service Reserve (Springing Monthly: Excess Cash Flow); Kmart BK Reserve (Future one-time deposit: Springing) | 08/10/2015 | 08/10/2015 | ||||||
Loan | 14 | Ocala Portfolio - AHIP | 2.0% | PIP Reserve (Upfront: 3,170,000) | ||||||||
Property | 14.01 | Courtyard Ocala | 0.9% | 06/05/2015 | 06/02/2015 | |||||||
Property | 14.02 | Residence Inn Ocala | 0.7% | 06/05/2015 | 06/02/2015 | |||||||
Property | 14.03 | Fairfield Inn & Suites Ocala | 0.5% | 06/11/2015 | 06/02/2015 | |||||||
Loan | 15 | Hilton Garden Inn Charlotte Airport | 2.0% | 06/25/2015 | 07/02/2015 | |||||||
Loan | 16 | GSP MHP Portfolio I | 1.9% | Sewer Charges Reserve (Upfront: 360,614) | ||||||||
Property | 16.01 | Indian Creek Village | 1.0% | 08/11/2015 | 07/10/2015 | |||||||
Property | 16.02 | Cedar Manor MHP | 1.0% | 08/11/2015 | 07/10/2015 | |||||||
Loan | 17 | A&H Pacific | 1.9% | 06/10/2015 | 06/10/2015 | |||||||
Loan | 18 | WHG Extended Stay Portfolio | 1.7% | |||||||||
Property | 18.01 | Sun Suites Louisville | 0.4% | 08/20/2015 | 08/25/2015 | |||||||
Property | 18.02 | HomeTowne Suites Columbia | 0.4% | 08/20/2015 | 08/25/2015 | |||||||
Property | 18.03 | Sun Suites Alexandria | 0.3% | 08/21/2015 | 08/25/2015 | |||||||
Property | 18.04 | HomeTowne Suites Montgomery | 0.3% | 08/20/2015 | 08/25/2015 | |||||||
Property | 18.05 | Sun Suites Gainesville | 0.3% | 08/21/2015 | 08/25/2015 | |||||||
Loan | 19 | Greater Boston Industrial Portfolio I | 1.7% | |||||||||
Property | 19.01 | 65 Sunnyslope Avenue | 0.9% | 08/17/2015 | 08/17/2015 | |||||||
Property | 19.02 | 82 South Street | 0.5% | 08/20/2015 | 08/17/2015 | |||||||
Property | 19.03 | 19 Technology Drive | 0.3% | 08/17/2015 | 08/17/2015 | |||||||
Loan | 20 | Reserve at Conway | 1.6% | Required Renovations Reserve (Upfront: 1,391,748) | 07/17/2015 | 07/17/2015 | ||||||
Loan | 21 | Chestnut Hill Apartments | 1.6% | 08/13/2015 | 08/12/2015 | |||||||
Loan | 22 | Hilton Greenville | 1.5% | Current PIP Renovations (Upfront: 3,776,500); Required Future PIP Renovations (Future one-time deposit: Springing) | 06/30/2015 | 07/06/2015 | ||||||
Loan | 23 | The Phenix at Infinity Park II | 1.5% | 07/03/2015 | 07/07/2015 | |||||||
Loan | 24 | Cannon West Shopping Center | 1.4% | Bamboo Bistro Reserve (Upfront: 59,325); Anchor Tenant Rollover Reserve (Springing Monthly: Excess Cash Flow) | 08/12/2015 | 07/27/2015 | ||||||
Loan | 25 | HGI Kennewick | 1.4% | PIP Reserve (Upfront: 375,000); Seasonality Reserve (Upfront: 85,000, Monthly: Springing) | 07/14/2015 | 07/15/2015 | ||||||
Loan | 26 | Golf Center | 1.2% | Free Rent Reserve (Upfront: 60,167); Lease Sweep Reserve (Springing Monthly: Excess Cash Flow) | 03/31/2015 | 03/26/2015 | ||||||
Loan | 27 | University Center | 1.2% | Specified Tenant Reserve (Springing Monthly: Excess Cash Flow) | 04/13/2015 | 04/10/2015 |
A-1-21 |
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | Other | Environmental | ||||||||||
Property | Initial Pool | Reserves | Report | Engineering | ||||||||
Flag | ID | Property Name | Balance | Description | Date (34) | Report Date | ||||||
Loan | 28 | The Parking Spot Portfolio | 1.2% | |||||||||
Property | 28.01 | The Parking Spot Columbus | 0.7% | 03/06/2015 | 03/09/2015 | |||||||
Property | 28.02 | The Parking Spot Buffalo | 0.5% | 03/06/2015 | 03/09/2015 | |||||||
Loan | 29 | Hotel Preston | 1.1% | Cash Flow Sweep Reserve (Springing Monthly: Excess Cash Flow) | 04/14/2015 | 04/14/2015 | ||||||
Loan | 30 | Arrowhead Shopping Center | 1.1% | Free Rent Reserve (Upfront: 32,587); Lease Sweep Reserve (Springing Monthly: Excess Cash Flow) | 06/23/2015 | 06/29/2015 | ||||||
Loan | 31 | Chestnut Street | 1.1% | Major Lease Reserve (Monthly: Springing) | 09/10/2015 | 09/09/2015 | ||||||
Loan | 32 | Renner Commerce Center Portfolio | 1.1% | Disbursement Reserve (Upfront: 831,500); Fee Purchase Reserve (Upfront: 1,000) | ||||||||
Property | 32.01 | Renner Commerce Center - South | 0.6% | 07/15/2015 | 07/17/2015 | |||||||
Property | 32.02 | Renner Commerce Center - North | 0.5% | 07/15/2015 | 07/17/2015 | |||||||
Loan | 33 | Rockford Crossing | 1.0% | Hobby Lobby Reserve (Upfront: 275,000); HomeGoods Reserve (Upfront: 100,000); HomeGoods/DSW Reserve (Springing Monthly: Excess Cash Flow); Required Repairs Reserve (Future one-time deposit: Springing; Springing Monthly: Excess Cash Flow) | 05/29/2015 | 05/21/2015 | ||||||
Loan | 34 | Shops at Randall Road | 1.0% | 05/27/2015 | 05/27/2015 | |||||||
Loan | 35 | Fort Myers Self Storage Portfolio | 0.9% | |||||||||
Property | 35.01 | Estero Self Storage | 0.5% | 07/24/2015 | 07/21/2015 | |||||||
Property | 35.02 | Valuguard Self Storage | 0.4% | 07/24/2015 | 07/21/2015 | |||||||
Loan | 36 | Lancaster Towers | 0.9% | Debt Service Reserve (Future one-time deposit: Springing) | 08/14/2015 | 08/14/2015 | ||||||
Loan | 37 | Brookhaven MHP | 0.8% | 08/11/2015 | 07/10/2015 | |||||||
Loan | 38 | Park Villas Townhomes | 0.8% | 06/11/2015 | 06/11/2015 | |||||||
Loan | 39 | Evergreen Square | 0.8% | Lease Sweep Reserve (Springing Monthly: Excess Cash Flow) | 07/06/2015 | 07/06/2015 | ||||||
Loan | 40 | Rio Verde & Sagewood Apartments Portfolio | 0.7% | |||||||||
Property | 40.01 | Sagewood Apartments | 0.4% | 07/02/2015 | 07/06/2015 | |||||||
Property | 40.02 | Rio Verde Apartments | 0.3% | 07/02/2015 | 07/02/2015 | |||||||
Loan | 41 | CSRA Food Lion Portfolio II (37) | 0.7% | Outstanding TI Reserve (Upfront: 49,140); Free Rent Reserve (Upfront: 10,875) | ||||||||
Property | 41.01 | Kimberly Park | 0.4% | 08/10/2015 | 04/20/2015 | |||||||
Property | 41.02 | Eden Center | 0.3% | 08/10/2015 | 04/20/2015 | |||||||
Loan | 42 | La Galleria at the Mills | 0.7% | Ontario Jewelry Reserve (Upfront: 23,800) | 05/05/2015 | 05/05/2015 | ||||||
Loan | 43 | Clive Distribution Center | 0.6% | Free Rent Reserve (Upfront: 103,916); Major Tenant Lease Sweep Reserve (Springing Monthly: Excess Cash Flow) | 06/08/2015 | 06/05/2015 | ||||||
Loan | 44 | Days Inn | 0.6% | Seasonality Reserve (Upfront: 240,000, Springing Monthly: 34,296) | 08/31/2015 | 08/28/2015 | ||||||
Loan | 45 | Dollar Self Storage - Tucson | 0.6% | 07/30/2015 | 07/30/2015 | |||||||
Loan | 46 | The Meadows Apartments | 0.6% | 04/15/2015 | 04/15/2015 | |||||||
Loan | 47 | Witte Oaks Apartments | 0.5% | 07/16/2015 | 07/16/2015 | |||||||
Loan | 48 | Chambers Place | 0.5% | 07/10/2015 | 07/10/2015 | |||||||
Loan | 49 | Sonora Cascade MHC | 0.5% | 07/13/2015 | 08/03/2015 | |||||||
Loan | 50 | Walgreens Aurora, IN | 0.5% | 07/09/2015 | 07/10/2015 | |||||||
Loan | 51 | Empire Central | 0.4% | Lease Sweep Reserve (Springing Monthly: Excess Cash Flow) | 07/20/2015 | 07/20/2015 | ||||||
Loan | 52 | Grove Park Shopping Center | 0.4% | Major Tenant Rollover Reserve (Springing Monthly: Excess Cash Flow) | 07/10/2015 | 07/10/2015 | ||||||
Loan | 53 | Camelot Medical Office & Dunkin’ Donuts | 0.4% | Lease Sweep Reserve (Springing Monthly: Excess Cash Flow) | 08/13/2015 | 08/08/2015 | ||||||
Loan | 54 | Parkway Plaza Shopping Center | 0.4% | Major Tenant Rollover Reserve (Springing Monthly: Excess Cash Flow) | 07/10/2015 | 07/09/2015 | ||||||
Loan | 55 | Midvale Park Self Storage | 0.4% | Distribution Reserve (Future one-time deposit: Springing) | 06/30/2015 | 06/30/2015 | ||||||
Loan | 56 | Fresenius Medical Care Lake City | 0.4% | 07/13/2015 | 07/14/2015 | |||||||
Loan | 57 | Bonita Springs Self Storage (38) | 0.3% | 07/28/2015 | 07/28/2015 | |||||||
Loan | 58 | Fresenius Medical Care Greece | 0.3% | 07/06/2015 | 07/07/2015 | |||||||
Loan | 59 | Storage Pros Lansing | 0.3% | 05/19/2015 | 05/19/2015 | |||||||
Loan | 60 | 4001 North Lincoln | 0.3% | 08/31/2015 | 08/14/2015 | |||||||
Loan | 61 | Terrace Oak Apartments | 0.3% | 06/08/2015 | 06/08/2015 | |||||||
Loan | 62 | Rhett at Remount | 0.3% | Major Tenant Rollover Reserve (Springing Monthly: Excess Cash Flow) | 07/27/2015 | 07/20/2015 | ||||||
Loan | 63 | Winchester Oaks Apartments | 0.2% | 07/14/2015 | 07/16/2015 | |||||||
Loan | 64 | All Star Storage | 0.2% | 08/11/2015 | 08/11/2015 | |||||||
Loan | 65 | Midvale Park RV Storage | 0.1% | Distribution Reserve (Future one-time deposit: Springing) | 08/05/2015 | 08/05/2015 |
A-1-22 |
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | ||||||||||||
Property | Initial Pool | Loan | ||||||||||
Flag | ID | Property Name | Balance | Purpose | Sponsor (29) | Guarantor | ||||||
Loan | 1 | 11 Madison Avenue (35)(36)(37) | 7.5% | Acquisition | SL Green Realty Corp. | SL Green Realty Corp. | ||||||
Loan | 2 | NMS Los Angeles Multifamily Portfolio (35) | 7.0% | Refinance | Naum Neil Shekhter; Margot V. Shekhter | Naum Neil Shekhter; Margot V. Shekhter | ||||||
Property | 2.01 | Luxe at 1548 | 1.6% | |||||||||
Property | 2.02 | Luxe at 1539 | 1.5% | |||||||||
Property | 2.03 | Luxe at 1759 | 1.4% | |||||||||
Property | 2.04 | NMS at Northridge | 1.3% | |||||||||
Property | 2.05 | NMS at Warner Center | 0.9% | |||||||||
Property | 2.06 | NMS at Superior | 0.4% | |||||||||
Loan | 3 | Sandalwood Portfolio | 6.8% | Refinance | Thomas D. Crowson, Sr., M.D. | Thomas D. Crowson, Sr., M.D. | ||||||
Property | 3.01 | Oaks of Northgate | 1.1% | |||||||||
Property | 3.02 | Cimarron Crossing | 1.1% | |||||||||
Property | 3.03 | Brandon Oaks | 1.1% | |||||||||
Property | 3.04 | Sugar Tree Apartments | 1.0% | |||||||||
Property | 3.05 | Arlington Oaks | 0.9% | |||||||||
Property | 3.06 | Lakeshire Place | 0.9% | |||||||||
Property | 3.07 | Sundance Apartments | 0.6% | |||||||||
Loan | 4 | Atlanta Multifamily Portfolio (37) | 4.8% | Acquisition | Franck A. Ruimy | Franck A. Ruimy | ||||||
Property | 4.01 | Rosemont Cityview Apartments | 2.5% | |||||||||
Property | 4.02 | Dawson Forest Apartments | 2.4% | |||||||||
Loan | 5 | The Drake | 4.7% | Refinance | Gary I. Squire; Claude E. Keener | Gary I. Squire; Claude E. Keener | ||||||
Loan | 6 | Midwest Shopping Center Portfolio (37) | 4.1% | Refinance | Natin Paul | Natin Paul | ||||||
Property | 6.01 | Home Depot Shopping Center | 1.2% | |||||||||
Property | 6.02 | Calumet Center | 0.7% | |||||||||
Property | 6.03 | Waterloo Plaza | 0.7% | |||||||||
Property | 6.04 | Broadway Plaza | 0.6% | |||||||||
Property | 6.05 | Kansas Center | 0.5% | |||||||||
Property | 6.06 | Neil Street Shopping Center | 0.4% | |||||||||
Loan | 7 | Intellicenter | 3.6% | Acquisition | City Office REIT Operating Partnership, L.P. | City Office REIT Operating Partnership, L.P. | ||||||
Loan | 8 | Hotel deLuxe | 3.5% | Refinance | Gordon D. Sondland | Gordon D. Sondland | ||||||
Loan | 9 | Green Valley Corporate Center | 2.9% | Refinance | Brian Greenspun; Danny Greenspun; Susan Fine; Jane Gale | American Nevada Holdings, LLC | ||||||
Loan | 10 | Chase Park | 2.9% | Refinance | Benjamin Nazarian; Neil Kadisha | Benjamin Nazarian; Neil Kadisha | ||||||
Loan | 11 | Cookie Factory Lofts | 2.5% | Refinance | Kevin T. McFadden; Robert W. Hargett; Daniel L. Hargett | Kevin T. McFadden; Robert W. Hargett; Daniel L. Hargett | ||||||
Loan | 12 | Windrift Apartments | 2.3% | Refinance | Shaul Kopelowitz | Shaul Kopelowitz | ||||||
Loan | 13 | Village Square at Kiln Creek | 2.2% | Refinance | C. Torrey Breeden; A. Kent Little | C. Torrey Breeden; A. Kent Little | ||||||
Loan | 14 | Ocala Portfolio - AHIP | 2.0% | Acquisition | American Hotel Income Properties REIT Inc. | American Hotel Income Properties REIT Inc. | ||||||
Property | 14.01 | Courtyard Ocala | 0.9% | |||||||||
Property | 14.02 | Residence Inn Ocala | 0.7% | |||||||||
Property | 14.03 | Fairfield Inn & Suites Ocala | 0.5% | |||||||||
Loan | 15 | Hilton Garden Inn Charlotte Airport | 2.0% | Refinance | Ashok Patel; Surendra Patel | Ashok Patel; Surendra Patel | ||||||
Loan | 16 | GSP MHP Portfolio I | 1.9% | Refinance | Frank T. Perano | Frank T. Perano | ||||||
Property | 16.01 | Indian Creek Village | 1.0% | |||||||||
Property | 16.02 | Cedar Manor MHP | 1.0% | |||||||||
Loan | 17 | A&H Pacific | 1.9% | Refinance | Moshe Aflalo; Efrem Harkham; Uri Harkham | Moshe Aflalo; Efrem Harkham; Uri Harkham | ||||||
Loan | 18 | WHG Extended Stay Portfolio | 1.7% | Recapitalization | R-Roof Assets LLC | R-Roof Assets LLC | ||||||
Property | 18.01 | Sun Suites Louisville | 0.4% | |||||||||
Property | 18.02 | HomeTowne Suites Columbia | 0.4% | |||||||||
Property | 18.03 | Sun Suites Alexandria | 0.3% | |||||||||
Property | 18.04 | HomeTowne Suites Montgomery | 0.3% | |||||||||
Property | 18.05 | Sun Suites Gainesville | 0.3% | |||||||||
Loan | 19 | Greater Boston Industrial Portfolio I | 1.7% | Acquisition | Christopher J. Knisley; Mark J. McInerney | Christopher J. Knisley; Mark J. McInerney | ||||||
Property | 19.01 | 65 Sunnyslope Avenue | 0.9% | |||||||||
Property | 19.02 | 82 South Street | 0.5% | |||||||||
Property | 19.03 | 19 Technology Drive | 0.3% | |||||||||
Loan | 20 | Reserve at Conway | 1.6% | Acquisition | David J. Carlson; Mark A. Isaacson | David J. Carlson; Mark A. Isaacson | ||||||
Loan | 21 | Chestnut Hill Apartments | 1.6% | Refinance | Ajay Gupta | Ajay Gupta | ||||||
Loan | 22 | Hilton Greenville | 1.5% | Refinance | Michel Bittan; John VanCoutren | Michel Bittan; John VanCoutren | ||||||
Loan | 23 | The Phenix at Infinity Park II | 1.5% | Refinance | Peter Eklund; Matthew Ferlic; Anthony Loeffler | Peter Eklund; Matthew Ferlic; Anthony Loeffler | ||||||
Loan | 24 | Cannon West Shopping Center | 1.4% | Recapitalization | Kenneth Levy; Levy Family Trust Dated February 18, 1983, As Amended | Kenneth Levy; Levy Family Trust Dated February 18, 1983, As Amended | ||||||
Loan | 25 | HGI Kennewick | 1.4% | Refinance | William J. Lawson | William J. Lawson | ||||||
Loan | 26 | Golf Center | 1.2% | Refinance | Richard J. Robin | Richard J. Robin | ||||||
Loan | 27 | University Center | 1.2% | Acquisition | Inland Private Capital Corporation | Inland Private Capital Corporation |
A-1-23 |
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | ||||||||||||
Property | Initial Pool | Loan | ||||||||||
Flag | ID | Property Name | Balance | Purpose | Sponsor (29) | Guarantor | ||||||
Loan | 28 | The Parking Spot Portfolio | 1.2% | Recapitalization | TPS Parent, LLC | TPS Parent, LLC | ||||||
Property | 28.01 | The Parking Spot Columbus | 0.7% | |||||||||
Property | 28.02 | The Parking Spot Buffalo | 0.5% | |||||||||
Loan | 29 | Hotel Preston | 1.1% | Refinance | Gordon D. Sondland | Gordon D. Sondland | ||||||
Loan | 30 | Arrowhead Shopping Center | 1.1% | Acquisition | Investment Concepts, Inc. | Investment Concepts, Inc. | ||||||
Loan | 31 | Chestnut Street | 1.1% | Acquisition | Daniel Blatteis | Daniel Blatteis | ||||||
Loan | 32 | Renner Commerce Center Portfolio | 1.1% | Acquisition | John E. Shaffer | John E. Shaffer | ||||||
Property | 32.01 | Renner Commerce Center - South | 0.6% | |||||||||
Property | 32.02 | Renner Commerce Center - North | 0.5% | |||||||||
Loan | 33 | Rockford Crossing | 1.0% | Acquisition | Inland Private Capital Corporation | Inland Private Capital Corporation | ||||||
Loan | 34 | Shops at Randall Road | 1.0% | Acquisition | Laurence H. Weiner; Scott Inbinder | Laurence H. Weiner; Scott Inbinder | ||||||
Loan | 35 | Fort Myers Self Storage Portfolio | 0.9% | Acquisition | Todd Michael Allen; William D. Wilson; Lewis G. Pollack; Hans D. Box | Todd Michael Allen; William D. Wilson; Lewis G. Pollack; Hans D. Box | ||||||
Property | 35.01 | Estero Self Storage | 0.5% | |||||||||
Property | 35.02 | Valuguard Self Storage | 0.4% | |||||||||
Loan | 36 | Lancaster Towers | 0.9% | Refinance | Arthur M. Gellman; George I. Gellman; Clarke H. Narins | Arthur M. Gellman; George I. Gellman; Clarke H. Narins | ||||||
Loan | 37 | Brookhaven MHP | 0.8% | Refinance | Frank T. Perano | Frank T. Perano | ||||||
Loan | 38 | Park Villas Townhomes | 0.8% | Refinance | Graham Bennett | Graham Bennett | ||||||
Loan | 39 | Evergreen Square | 0.8% | Acquisition | Lawrence Margolis; Jared Margolis; James Errant | Lawrence Margolis; Jared Margolis; James Errant | ||||||
Loan | 40 | Rio Verde & Sagewood Apartments Portfolio | 0.7% | Acquisition | Paul F. Schultheis | Paul F. Schultheis | ||||||
Property | 40.01 | Sagewood Apartments | 0.4% | |||||||||
Property | 40.02 | Rio Verde Apartments | 0.3% | |||||||||
Loan | 41 | CSRA Food Lion Portfolio II (37) | 0.7% | Acquisition | Louis J. Rogers | Louis J. Rogers | ||||||
Property | 41.01 | Kimberly Park | 0.4% | |||||||||
Property | 41.02 | Eden Center | 0.3% | |||||||||
Loan | 42 | La Galleria at the Mills | 0.7% | Refinance | Fereidoon Roshan | Fereidoon Roshan | ||||||
Loan | 43 | Clive Distribution Center | 0.6% | Acquisition | Kenneth Levy | Kenneth Levy | ||||||
Loan | 44 | Days Inn | 0.6% | Recapitalization | Dane Allen Beck | Dane Allen Beck | ||||||
Loan | 45 | Dollar Self Storage - Tucson | 0.6% | Refinance | The Thomson Family Trust, Dated June 18, 1997; John C. Thomson | The Thomson Family Trust, Dated June 18, 1997; John C. Thomson | ||||||
Loan | 46 | The Meadows Apartments | 0.6% | Refinance | Paul Heule | Paul Heule | ||||||
Loan | 47 | Witte Oaks Apartments | 0.5% | Acquisition | Mark D. Campbell | Mark D. Campbell | ||||||
Loan | 48 | Chambers Place | 0.5% | Refinance | Robert L. Whelan | Robert L. Whelan | ||||||
Loan | 49 | Sonora Cascade MHC | 0.5% | Refinance | Philip Hoon | Philip Hoon | ||||||
Loan | 50 | Walgreens Aurora, IN | 0.5% | Acquisition | George R. Oberer, Sr. | George R. Oberer, Sr. | ||||||
Loan | 51 | Empire Central | 0.4% | Acquisition | John Able | John Able | ||||||
Loan | 52 | Grove Park Shopping Center | 0.4% | Acquisition | Wheeler Real Estate Investment Trust, Inc. | Wheeler Real Estate Investment Trust, Inc. | ||||||
Loan | 53 | Camelot Medical Office & Dunkin’ Donuts | 0.4% | Refinance | Mark M. Mauer | Mark M. Mauer | ||||||
Loan | 54 | Parkway Plaza Shopping Center | 0.4% | Acquisition | Wheeler Real Estate Investment Trust, Inc. | Wheeler Real Estate Investment Trust, Inc. | ||||||
Loan | 55 | Midvale Park Self Storage | 0.4% | Refinance | John C. Thompson; The Thomson Family Trust, Dated June 18, 1997 | John C. Thompson; The Thomson Family Trust, Dated June 18, 1997 | ||||||
Loan | 56 | Fresenius Medical Care Lake City | 0.4% | Acquisition | Louis J. Rogers | Louis J. Rogers | ||||||
Loan | 57 | Bonita Springs Self Storage (38) | 0.3% | Recapitalization | Ryan L. Hanks | Ryan L. Hanks | ||||||
Loan | 58 | Fresenius Medical Care Greece | 0.3% | Acquisition | Louis J. Rogers | Louis J. Rogers | ||||||
Loan | 59 | Storage Pros Lansing | 0.3% | Acquisition | David M. Levenfeld; Ian M. Burnstein | David M. Levenfeld; Ian M. Burnstein | ||||||
Loan | 60 | 4001 North Lincoln | 0.3% | Refinance | Daniel Blatteis | Daniel Blatteis | ||||||
Loan | 61 | Terrace Oak Apartments | 0.3% | Refinance | Robert K. Fischer; Genevieve Conkey | Robert K. Fischer; Genevieve Conkey | ||||||
Loan | 62 | Rhett at Remount | 0.3% | Refinance | Victory Real Estate Investments, LLC | Victory Real Estate Investments, LLC | ||||||
Loan | 63 | Winchester Oaks Apartments | 0.2% | Acquisition | Harold Kulish; The Harold Kulish Trust under Agreement dated April 12, 1976; George M. Nyman | Harold Kulish; The Harold Kulish Trust under Agreement dated April 12, 1976; George M. Nyman | ||||||
Loan | 64 | All Star Storage | 0.2% | Refinance | Douglas Christie; Karren Christie | Douglas Christie; Karren Christie | ||||||
Loan | 65 | Midvale Park RV Storage | 0.1% | Refinance | John C. Thompson; The Thomson Family Trust, Dated June 18, 1997 | John C. Thompson; The Thomson Family Trust, Dated June 18, 1997 |
A-1-24 |
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | Existing | Future Debt | ||||||||||||
Property | Initial Pool | Additional Debt | Permitted | |||||||||||
Flag | ID | Property Name | Balance | Previous Securitization | Amount | Existing Additional Debt Description | Type | |||||||
Loan | 1 | 11 Madison Avenue (35)(36)(37) | 7.5% | CSMC 2006-C4 | 1,330,000,000 | $694,330,000 Pari Passu Debt; $310,670,000 Subordinate Secured Debt; $325,000,000 Mezzanine Debt | NAP | |||||||
Loan | 2 | NMS Los Angeles Multifamily Portfolio (35) | 7.0% | Various | 55,000,000 | Pari Passu Debt | NAP | |||||||
Property | 2.01 | Luxe at 1548 | 1.6% | |||||||||||
Property | 2.02 | Luxe at 1539 | 1.5% | FREMF 2010-K9 | ||||||||||
Property | 2.03 | Luxe at 1759 | 1.4% | FREMF 2011-K11 | ||||||||||
Property | 2.04 | NMS at Northridge | 1.3% | FREMF 2012-K709 | ||||||||||
Property | 2.05 | NMS at Warner Center | 0.9% | COMM 2007-C9 | ||||||||||
Property | 2.06 | NMS at Superior | 0.4% | |||||||||||
Loan | 3 | Sandalwood Portfolio | 6.8% | COMM 2006-C7 | None | NAP | ||||||||
Property | 3.01 | Oaks of Northgate | 1.1% | COMM 2006-C7 | ||||||||||
Property | 3.02 | Cimarron Crossing | 1.1% | COMM 2006-C7 | ||||||||||
Property | 3.03 | Brandon Oaks | 1.1% | COMM 2006-C7 | ||||||||||
Property | 3.04 | Sugar Tree Apartments | 1.0% | COMM 2006-C7 | ||||||||||
Property | 3.05 | Arlington Oaks | 0.9% | COMM 2006-C7 | ||||||||||
Property | 3.06 | Lakeshire Place | 0.9% | COMM 2006-C7 | ||||||||||
Property | 3.07 | Sundance Apartments | 0.6% | COMM 2006-C7 | ||||||||||
Loan | 4 | Atlanta Multifamily Portfolio (37) | 4.8% | Various | 5,000,000 | Mezzanine Debt | NAP | |||||||
Property | 4.01 | Rosemont Cityview Apartments | 2.5% | |||||||||||
Property | 4.02 | Dawson Forest Apartments | 2.4% | BSCMS 2006-PW13 | ||||||||||
Loan | 5 | The Drake | 4.7% | None | NAP | |||||||||
Loan | 6 | Midwest Shopping Center Portfolio (37) | 4.1% | 5,500,000 | Mezzanine Debt | NAP | ||||||||
Property | 6.01 | Home Depot Shopping Center | 1.2% | |||||||||||
Property | 6.02 | Calumet Center | 0.7% | |||||||||||
Property | 6.03 | Waterloo Plaza | 0.7% | |||||||||||
Property | 6.04 | Broadway Plaza | 0.6% | |||||||||||
Property | 6.05 | Kansas Center | 0.5% | |||||||||||
Property | 6.06 | Neil Street Shopping Center | 0.4% | |||||||||||
Loan | 7 | Intellicenter | 3.6% | None | NAP | |||||||||
Loan | 8 | Hotel deLuxe | 3.5% | CD 2007-CD5 | None | NAP | ||||||||
Loan | 9 | Green Valley Corporate Center | 2.9% | GSMS 2006-GG8 | None | NAP | ||||||||
Loan | 10 | Chase Park | 2.9% | None | NAP | |||||||||
Loan | 11 | Cookie Factory Lofts | 2.5% | None | NAP | |||||||||
Loan | 12 | Windrift Apartments | 2.3% | FREMF 2014-KF04 | None | NAP | ||||||||
Loan | 13 | Village Square at Kiln Creek | 2.2% | CD 2005-CD1 | None | NAP | ||||||||
Loan | 14 | Ocala Portfolio - AHIP | 2.0% | Various | None | NAP | ||||||||
Property | 14.01 | Courtyard Ocala | 0.9% | MLMT 2006-C2 | ||||||||||
Property | 14.02 | Residence Inn Ocala | 0.7% | |||||||||||
Property | 14.03 | Fairfield Inn & Suites Ocala | 0.5% | MLCFC 2007-9 | ||||||||||
Loan | 15 | Hilton Garden Inn Charlotte Airport | 2.0% | None | NAP | |||||||||
Loan | 16 | GSP MHP Portfolio I | 1.9% | Various | None | NAP | ||||||||
Property | 16.01 | Indian Creek Village | 1.0% | |||||||||||
Property | 16.02 | Cedar Manor MHP | 1.0% | WBCMT 2005-C21 | ||||||||||
Loan | 17 | A&H Pacific | 1.9% | CSMC 2006-C4 | None | NAP | ||||||||
Loan | 18 | WHG Extended Stay Portfolio | 1.7% | None | NAP | |||||||||
Property | 18.01 | Sun Suites Louisville | 0.4% | |||||||||||
Property | 18.02 | HomeTowne Suites Columbia | 0.4% | |||||||||||
Property | 18.03 | Sun Suites Alexandria | 0.3% | |||||||||||
Property | 18.04 | HomeTowne Suites Montgomery | 0.3% | |||||||||||
Property | 18.05 | Sun Suites Gainesville | 0.3% | |||||||||||
Loan | 19 | Greater Boston Industrial Portfolio I | 1.7% | None | NAP | |||||||||
Property | 19.01 | 65 Sunnyslope Avenue | 0.9% | |||||||||||
Property | 19.02 | 82 South Street | 0.5% | |||||||||||
Property | 19.03 | 19 Technology Drive | 0.3% | |||||||||||
Loan | 20 | Reserve at Conway | 1.6% | FREMF 2012-K20 | None | NAP | ||||||||
Loan | 21 | Chestnut Hill Apartments | 1.6% | None | NAP | |||||||||
Loan | 22 | Hilton Greenville | 1.5% | CSFB 2005-C6 | None | NAP | ||||||||
Loan | 23 | The Phenix at Infinity Park II | 1.5% | None | NAP | |||||||||
Loan | 24 | Cannon West Shopping Center | 1.4% | JPMCC 2005-CB12 | None | NAP | ||||||||
Loan | 25 | HGI Kennewick | 1.4% | None | NAP | |||||||||
Loan | 26 | Golf Center | 1.2% | JPMCC 2005-CB13 | None | NAP | ||||||||
Loan | 27 | University Center | 1.2% | None | Unsecured Subordinate Debt |
A-1-25 |
COMM 2015-CCRE27
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | Existing | Future Debt | ||||||||||||
Property | Initial Pool | Additional Debt | Permitted | |||||||||||
Flag | ID | Property Name | Balance | Previous Securitization | Amount | Existing Additional Debt Description | Type | |||||||
Loan | 28 | The Parking Spot Portfolio | 1.2% | None | NAP | |||||||||
Property | 28.01 | The Parking Spot Columbus | 0.7% | |||||||||||
Property | 28.02 | The Parking Spot Buffalo | 0.5% | |||||||||||
Loan | 29 | Hotel Preston | 1.1% | GSMS 2013-GC10 | None | NAP | ||||||||
Loan | 30 | Arrowhead Shopping Center | 1.1% | None | NAP | |||||||||
Loan | 31 | Chestnut Street | 1.1% | None | NAP | |||||||||
Loan | 32 | Renner Commerce Center Portfolio | 1.1% | None | NAP | |||||||||
Property | 32.01 | Renner Commerce Center - South | 0.6% | |||||||||||
Property | 32.02 | Renner Commerce Center - North | 0.5% | |||||||||||
Loan | 33 | Rockford Crossing | 1.0% | None | Unsecured Subordinate Debt | |||||||||
Loan | 34 | Shops at Randall Road | 1.0% | CSFB 2005-C5 | None | NAP | ||||||||
Loan | 35 | Fort Myers Self Storage Portfolio | �� | 0.9% | None | NAP | ||||||||
Property | 35.01 | Estero Self Storage | 0.5% | WBCMT 2007-C34 | ||||||||||
Property | 35.02 | Valuguard Self Storage | 0.4% | |||||||||||
Loan | 36 | Lancaster Towers | 0.9% | None | NAP | |||||||||
Loan | 37 | Brookhaven MHP | 0.8% | WBCMT 2005-C21 | None | NAP | ||||||||
Loan | 38 | Park Villas Townhomes | 0.8% | None | NAP | |||||||||
Loan | 39 | Evergreen Square | 0.8% | None | NAP | |||||||||
Loan | 40 | Rio Verde & Sagewood Apartments Portfolio | 0.7% | None | NAP | |||||||||
Property | 40.01 | Sagewood Apartments | 0.4% | |||||||||||
Property | 40.02 | Rio Verde Apartments | 0.3% | |||||||||||
Loan | 41 | CSRA Food Lion Portfolio II (37) | 0.7% | 780,000 | Mezzanine Debt | NAP | ||||||||
Property | 41.01 | Kimberly Park | 0.4% | |||||||||||
Property | 41.02 | Eden Center | 0.3% | |||||||||||
Loan | 42 | La Galleria at the Mills | 0.7% | JPMCC 2005-LDP4 | None | NAP | ||||||||
Loan | 43 | Clive Distribution Center | 0.6% | None | NAP | |||||||||
Loan | 44 | Days Inn | 0.6% | None | NAP | |||||||||
Loan | 45 | Dollar Self Storage - Tucson | 0.6% | CSFB 2005-C6 | None | NAP | ||||||||
Loan | 46 | The Meadows Apartments | 0.6% | None | NAP | |||||||||
Loan | 47 | Witte Oaks Apartments | 0.5% | None | NAP | |||||||||
Loan | 48 | Chambers Place | 0.5% | GSMS 2006-GG6 | None | NAP | ||||||||
Loan | 49 | Sonora Cascade MHC | 0.5% | None | NAP | |||||||||
Loan | 50 | Walgreens Aurora, IN | 0.5% | None | NAP | |||||||||
Loan | 51 | Empire Central | 0.4% | None | NAP | |||||||||
Loan | 52 | Grove Park Shopping Center | 0.4% | None | NAP | |||||||||
Loan | 53 | Camelot Medical Office & Dunkin’ Donuts | 0.4% | None | NAP | |||||||||
Loan | 54 | Parkway Plaza Shopping Center | 0.4% | None | NAP | |||||||||
Loan | 55 | Midvale Park Self Storage | 0.4% | MSC 2005-HQ7 | None | NAP | ||||||||
Loan | 56 | Fresenius Medical Care Lake City | 0.4% | None | NAP | |||||||||
Loan | 57 | Bonita Springs Self Storage (38) | 0.3% | None | Mezzanine | |||||||||
Loan | 58 | Fresenius Medical Care Greece | 0.3% | None | NAP | |||||||||
Loan | 59 | Storage Pros Lansing | 0.3% | None | NAP | |||||||||
Loan | 60 | 4001 North Lincoln | 0.3% | None | NAP | |||||||||
Loan | 61 | Terrace Oak Apartments | 0.3% | None | NAP | |||||||||
Loan | 62 | Rhett at Remount | 0.3% | GCCFC 2006-GG7 | None | NAP | ||||||||
Loan | 63 | Winchester Oaks Apartments | 0.2% | None | Unsecured Subordinate Debt | |||||||||
Loan | 64 | All Star Storage | 0.2% | None | NAP | |||||||||
Loan | 65 | Midvale Park RV Storage | 0.1% | MSC 2005-HQ7 | None | NAP |
A-1-26 |
FOOTNOTES TO ANNEX A-1
Loan numbers listed below refer to the ID number identified on Annex A-1 for the related Mortgage Loan
(1) | GACC—German American Capital Corporation or one of its affiliates; BNYM—The Bank of New York Mellon or one of its affiliates; CCRE—Cantor Commercial Real Estate Lending, L.P. or one of its affiliates; Keybank—KeyBank National Association or one of its affiliates. |
(2) | Loan No. 1 – 11 Madison Avenue – The Original Balance ($) and Cut-off Date Balance ($) of $70.0 million represents the non-controlling Note A-1-C2 of a $1.075 billion whole loan evidenced by sixteen seniorpari passu and three subordinate notes. The remaining notes include twelve notes contributed to the MAD 2015-11MD transaction, including the nine non-controlling seniorpari passu companion Notes A-1-S1, A-1-S2, A-1-S3, A-2-S1, A-2-S2, A-2-S3, A-3-S1, A-3-S2, A-3-S3 in the original principal amount of $397.53 million and the controlling three subordinatepari passu Notes B-1-S, B-2-S, B-3-S in the original principal amount of $310.67 million; the non-controllingpari passu note A-1-C1 that is expected to be contributed to the COMM 2015-CCRE26 transaction in the original principal amount of $70.0 million; onepari passunote held by held by GACC or an affiliate, the non-controlling Note A-1-C3, in the original principal amount of $69.6 million; thepari passunotes held by Morgan Stanley Bank, N.A. or an affiliate, including two senior non-controlling Notes A-2-C1 and A-2-C2 in the aggregate original principal amount of $91.7 million; and thepari passunotes held by Wells Fargo Bank, including the two senior non-controlling Notes A-3-C1 and A-3-C2 in the aggregate original principal amount of $65.5 million. With respect to the 11 Madison Avenue loan combination, so long as the 11 Madison Avenue subordinate companion loans are included in the MAD 2015-11MD mortgage trust, there will be no directing holder with respect to such loan combination. |
Loan No. 2 – NMS Los Angeles Multifamily Portfolio – The Original Balance ($) and Cut-off Date Balance ($) of $65.0 million represents the controlling Note A-1 of a $120.0 million whole loan evidenced by threepari passu notes. Thepari passu companion loans are the non-controlling Note A-2 in the original principal amount of $30.0 million and the non-controlling Note A-3 in the original principal amount of $25.0 million, which are all currently held by CCRE or an affiliate.
(3) | With respect to any Mortgaged Property securing a multi-property Mortgage Loan, the amounts listed under the headings “Original Balance ($)” and “Cut-off Date Balance ($)” reflect the Allocated Loan Amount related to such Mortgaged Property. |
(4) | Loan No. 31 – Chestnut Street – The Chestnut Street Mortgaged Property’s Net Rentable Area (SF/Units/Rooms/Pads/Spaces) ($) of 30 units contains an additional 3,282 sq. ft. of retail space. |
(5) | Loan No. 3 – Sandalwood Portfolio – Five of the seven properties that comprise the Sandalwood Portfolio Mortgaged Properties are subject to land use restriction agreements requiring 523 units to be leased to low income tenants who earn less than 80% of the area’s median income and to very low income tenants who earn less than 50% of the area’s median income. In addition, the Arlington Oaks property is legal non-conforming as to use because the mortgaged property was built as a multifamily property prior to the current zoning change. The mortgaged property may be rebuilt as multifamily property so long as not more than 50% of the fair market value of the mortgaged property is destroyed by a casualty. |
Loan No. 5 – The Drake – The Drake Mortgaged Property is subject to an inclusionary zoning covenant in favor of the Department of Housing and Community Development of the District of Columbia, requiring 17 of the 218 units to be leased to families with income levels at or below 80% of the area’s median income.
Loan No. 8 – Hotel deLuxe – The Hotel deLuxe Mortgaged Property is listed on the National Register of Historic Places. Because of this historic landmark status, any alteration to the exterior historical elements of the building requires Historic Resource Review, in accordance with the Portland Zoning Code.
Loan No. 11 – Cookie Factory Lofts – The listing on the National Register of Historic Places and the award of federal historic rehabilitation credits subject the Cookie Factory Lofts Mortgaged Property to restrictions limiting the borrower’s right to make structural modifications to the building inconsistent with the Department of the Interior’s standards for rehabilitation of historic structures. In addition, any structural modifications at the Mortgaged Property during the five year vesting period for the federal credits, which began with the date the rehabilitated structure was placed in service in November 2014, requires the consent of Sherwin Williams as allocatee of the federal historic credits.
A-1-27 |
(6) | Loan No. 27 – University Center – The University Center Mortgage Loan has an ARD feature with an anticipated repayment date of October 1, 2025, with a revised interest rate for the period from the anticipated repayment date through the final maturity date of October 1, 2030, of the greater of (i) 7.9600% and (ii) 3.5000% plus the ten-year swap yield as of the first business day after the anticipated repayment date. The revised interest rate will not exceed 9.4600%. |
Loan No. 33 – Rockford Crossing – The Rockford Crossing Mortgage Loan has an ARD feature with an anticipated repayment date of October 1, 2025, with a revised interest rate for the period from the anticipated repayment date through the final maturity date of October 1, 2030, of the greater of (i) 7.9600% and (ii) 3.5000% plus the ten-year swap yield as of the first business day after the anticipated repayment date. The revised interest rate will not exceed 9.4600%.
(7) | The Administrative Fee Rate includes the respective per annum rates applicable to the calculation of the servicing fee, any sub-servicing fee, trustee/certificate administrator fee, operating advisor fee and CREFC® license fee with respect to each Mortgage Loan. For purposes of this Annex A-1, the definition of Administrative Fee Rate as it relates to any Non-Serviced Mortgage Loan includes the related Pari Passu Loan Primary Servicing Fee Rate which includes the “primary servicing fee rate” (as defined or set forth in the applicable pooling and servicing agreement) and any other related servicing fee rate (other than those payable to the applicable special servicer) applicable to such Non-Serviced Mortgage Loan that constitutes a portion of the “servicing fee rate” applicable to the other master servicer under the applicable other pooling and servicing agreement. ThePari Passu Loan Primary Servicing Fee Rate for the 11 Madison Avenue Loan will be 0.00125%. |
(8) | Loan No. 4 – Atlanta Multifamily Portfolio – Following an initial 18-month interest only period, the Atlanta Multifamily Portfolio Mortgage Loan amortizes on a planned amortization schedule provided in Annex H to the free writing prospectus. As such, the Cut-off Date Balance ($), Maturity or ARD Balance ($), Monthly Debt Service, Annual Debt Service ($), Underwritten NOI DSCR and Underwritten NCF DSCR all reflect this fixed amortization schedule. The amount of Monthly Debt Service shown in Annex A-1 was calculated using the average of principal and interest payments over the first 12 months following the initial interest only period. Underwritten NOI DSCR and Underwritten NCF DSCR were calculated using the average Monthly Debt Service previously stated. |
(9) | Annual Debt Service, Monthly Debt Service, Underwritten NOI DSCR and Underwritten NCF DSCR for Mortgage Loans (i) with partial interest only periods are shown based on the monthly debt service payment immediately following the expiration of the interest only period and (ii) that are interest only until the related maturity date are shown based on the interest only payments during the 12-month period following the Cut-off Date (or, in the case of Monthly Debt Service, the average of such interest only payments) without regard to leap year adjustments. |
(10) | “Hard” generally means each tenant is required to transfer its rent directly to the lender-controlled lockbox account. However, with respect to hospitality properties, “Hard” means all credit card receipts are deposited directly into the lockbox by the card processing company and all over-the-counter cash and equivalents are deposited by the property manager or borrower into the lockbox. “Soft” means the borrower has established a lockbox account that will be under lender control and the borrower or property manager must collect rents from the tenants and then deposit those rents into such lockbox account. “Springing Soft” means that upon the occurrence of a trigger event (as specified in the related Mortgage Loan Documents), the borrower is required to establish a lockbox account that will be under lender control and the borrower or property manager is required to collect rents from the tenants and then deposit those rents into such lockbox account. “Springing Hard” means that upon a trigger event (as specified in the related Mortgage Loan Documents), each tenant will be required to transfer its rent directly to a lender-controlled lockbox. “Soft Springing Hard” means that the borrower has established a lockbox account that will be under lender control and the borrower or property manager must collect rents from the tenants and then deposit those rents into such lockbox account. Upon a trigger event (as specified in the related Mortgage Loan documents), each tenant will be required to transfer its rent directly into a lender-controlled lockbox. |
(11) | “In Place” means that related property cash flows go through a waterfall of required reserve or other payment amounts due before the lender either (i) disburses excess cash to the related borrower or (ii) retains excess cash as additional collateral for the Mortgage Loan. “Springing” means that upon the occurrence of a trigger event, as defined in the related Mortgage Loan Documents, In Place cash |
A-1-28 |
management (as described above) will take effect, and will generally continue until all trigger events are cured (to the extent a cure is permitted under the related Mortgage Loan Documents). |
(12) | Loan No. 1 – 11 Madison Avenue – The Underwritten NOI DSCR, Underwritten NCF DSCR, Cut-off Date LTV Ratio, LTV Ratio at Maturity or ARD, Underwritten NOI Debt Yield, Underwritten NCF Debt Yield and Loan per Net Rentable Area (SF/Units/Rooms/Pads/Spaces) ($) are calculated based on the mortgage loan included in the issuing entity and the relatedpari passu companion loans in the aggregate. |
Loan No. 2 – NMS Los Angeles Multifamily Portfolio– The Underwritten NOI DSCR, Underwritten NCF DSCR, Cut-off Date LTV Ratio, LTV Ratio at Maturity or ARD, Underwritten NOI Debt Yield, Underwritten NCF Debt Yield and Loan per Net Rentable Area (SF/Units/Rooms/Pads/Spaces) ($) are calculated based on the mortgage loan included in the issuing entity and the relatedpari passu companion loans in the aggregate.
(13) | Loan No. 1 – 11 Madison Avenue – The Underwritten NOI DSCR, Underwritten NCF DSCR, Cut-off Date LTV Ratio, LTV Ratio at Maturity or ARD, Underwritten NOI Debt Yield, Underwritten NCF Debt Yield and Loan per Net Rentable Area (SF/Units/Rooms/Pads/Spaces) ($) calculations exclude the 11 Madison Avenue subordinate secured debt. |
(14) | The grace periods noted under “Grace Period” reflect the number of days of grace before a payment default is an event of default. Certain jurisdictions impose a statutorily longer grace period. Certain of the Mortgage Loans may additionally be subject to grace periods with respect to the occurrence of an event of default (other than a payment default) and/or commencement of late charges which are not addressed in Annex A-1 to this free writing prospectus. |
Loan No. 19 – Greater Boston Industrial Portfolio I – The late payment fee will be waived if any principal, interest or any other sum due under the loan documents (other than the outstanding principal balance due and payable on the maturity date) is paid within five business days following the date on which it is due.
(15) | Loan No. 2 – NMS Los Angeles Multifamily Portfolio – The Cut-off Date LTV Ratio, LTV Ratio at Maturity or ARD and Appraised Value ($) are based on the Portfolio “As Is” value of $174.3 million, which reflects a premium attributed to the aggregate value of the NMS Los Angeles Multifamily Portfolio Mortgage Loan as a whole. The sum of the value of each of the properties on an individual basis is $163.8 million, which represents a Cut-off Date LTV of 73.3%. This value of the properties on an individual basis does not consider the springing deed restriction related to the Luxe at 1548 Mortgaged Property (described in footnote 33 below). |
Loan No. 3 – Sandalwood Portfolio – The Cut-off Date LTV Ratio, LTV Ratio at Maturity or ARD and Appraised Value ($) are based on the Portfolio “As Is” value of $99.31 million, which reflects a premium attributed to the aggregate value of the Sandalwood Portfolio Mortgage Loan as a whole. The sum of the value of each of the properties on an individual basis is $97.58 million, which represents a Cut-off Date LTV of 64.5%.
Loan No. 4 – Atlanta Multifamily Portfolio – The Cut-off Date LTV Ratio, LTV Ratio at Maturity or ARD and Appraised Value ($) are based on the “As Renovated” value of $69.3 million, which takes into account upgrades being performed at each property. Based on the “As-is” appraised value of $63.8 million, the Cut-off Date LTV is 70.5%.
Loan No. 6 – Midwest Shopping Center Portfolio – The Cut-off Date LTV Ratio, LTV Ratio at Maturity or ARD and Appraised Value ($) are based on the Portfolio “As Is” value of $56.63 million, which reflects a premium attributed to the aggregate value of the Midwest Shopping Center Portfolio Mortgage Loan as a whole. The sum of the value of each of the properties on an individual basis is $54.6 million, which represents a Cut-off Date LTV of 69.9%.
Loan No. 20 – Reserve at Conway – Cut-off Date LTV Ratio, LTV Ratio at Maturity or ARD and Appraised Value ($) with respect to the loan is based on the “As Complete” value of $20.1 million, which assumes planned capital expenditures at the property are completed by July, 1 2016. At closing, the borrower deposited approximately $1.4 million into a required repairs reserve to cover the full cost of the borrower’s capital expenditures budget. Based on the “As-is” appraised value of $18.6 million, the Cut-off Date LTV is 79.6%.
A-1-29 |
(16) | Prepayment Provisions are shown from the respective Mortgage Loan First Payment Date. |
“L(x)” means lock-out for x payments.
“D(x)” means may be defeased for x payments.
“YM1(x)” means may be prepaid for x payments with payment of the greater of a yield maintenance charge and 1% of the amount prepaid.
“YM2(x)” means may be prepaid for x payments with payment of the greater of a yield maintenance charge and 2% of the amount prepaid.
“O(x)” means freely prepayable for x payments, including the maturity date or anticipated repayment date.
Certain of the Mortgage Loans permit the release of a portion of a Mortgaged Property (or an individual Mortgaged Property, in connection with a portfolio mortgage loan) under various circumstances, as described in this free writing prospectus. See “Description of the Mortgage Pool—Certain Terms and Conditions of the Mortgage Loans—Property Releases” in this free writing prospectus.
(17) | Loan No. 1 – 11 Madison Avenue – The lockout period will be at least 25 payment dates beginning with and including the first payment date of October 6, 2015. Defeasance of the full $1.075 billion 11 Madison Avenue Loan Combination is permitted after the date that is the earlier to occur of (i) two years after the closing date of the securitization that includes the lastpari passu note to be securitized, and (ii) August 18, 2018. The assumed lockout period of 25 payments is based on the expected COMM 2015-CCRE27 securitization closing date in October 2015. The actual lockout period may be longer. |
Loan No. 2 – NMS Los Angeles Multifamily Portfolio – The lockout period for defeasance will be at least 25 payment dates beginning with and including the first payment date of October 6, 2015. Defeasance of the full $120.0 million NMS Los Angeles Multifamily Loan Combination is permitted on or after the date that is the earlier to occur of (i) two years after the closing date of the securitization that includes the lastpari passu note to be securitized and (ii) October 6, 2019. The assumed lockout period of 25 payments is based on the expected COMM 2015-CCRE27 securitization closing date in October 2015. The actual lockout period may be longer.
(18) | Loan No. 2 – NMS Los Angeles Multifamily Portfolio – After the expiration of the lockout period and prior to the open period, the borrower may obtain the release of an individual property upon a bona fide third-party sale provided, among other things, (i) no event of default has occurred and is continuing, (ii) the borrower partially defeases in an amount equal to the greater of, with respect to the individual property to be released (a) 125% of the allocated loan amount and (b) 100% of the net sales proceeds, (iii) the combined LTV of the remaining properties is less than or equal to the lessor of (a) 68.8% or (b) the LTV immediately prior to the release, (iv) the combined DSCR of the remaining properties is equal to or exceeds the greater of (a) 1.20x or (b) the DSCR immediately prior to the release, (v) the combined debt yield of the remaining properties is equal to or exceeds the greater of (a) 6.0% or (b) the debt yield immediately prior to the release and (vi) prior to (or concurrent with) the release of either of the Luxe at 1539 Street or Luxe at 1548 Street Mortgaged Properties, the borrower is required to obtain the release of two of the following properties: (a) the Beloit Property, (b) the Vanowen Property or (c) the Zelzah Property. |
Loan No. 3 – Sandalwood Portfolio – At any time after the lockout period, the borrower may obtain the release of an individual property upon a bona fide third-party sale, provided, among other things, (i) the LTV for the remaining properties does not exceed the lesser of the LTV immediately preceding such release and 63.4%, (ii) the DSCR for the remaining properties is not less than the greater of the DSCR immediately preceding the partial release and 1.54x, (iii) borrower partially defeases to lender the greater of 125% of the allocated loan amount for the released property or 100% of the net sales proceeds from the released property and (iv) the ratio of unpaid principal balance of the LTV of the properties is greater than 125%.
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Loan No. 6 – Midwest Shopping Center Portfolio – At any time after the lockout period, the borrower may obtain the release of an individual property upon a bona fide third-party sale, provided, among other things, (i) the LTV for the remaining properties does not exceed the lesser of the LTV immediately preceding such sale and 77.3%, (ii) the DSCR for the remaining properties is not less than the greater of the DSCR immediately preceding the sale and 1.19x and (iii) borrower partially defeases to lender a release amount equal to the greater of (a) 87.443% of net sale proceeds and (b) 120% of the allocated loan amount for the property being sold.
Loan No. 14 – Ocala Portfolio - AHIP – At any time after the lockout period, the borrower may obtain the release of an individual property upon a bona fide third-party sale, provided, among other things, (i) no event of default has occurred and is continuing, (ii) if the debt yield for the remaining properties is less than 15% then the LTV for the remaining properties does not exceed the lesser of the LTV immediately preceding such release and 61.3%, (iii) the DSCR for the remaining properties is not less than the greater of the DSCR immediately preceding the partial release and 2.30x and (iv) borrower partially defeases to lender 110% of the allocated loan amount for the released property.
Loan No. 16 – GSP MHP Portfolio I –On any date after the expiration of the lockout period and prior to the open prepayment date, the borrower may obtain the release of the Cedar Manor MHP Mortgaged Property upon a bona fide third-party sale provided, among other things, (i) the LTV for the Indian Creek Village Mortgaged Property does not exceed the lesser of the LTV immediately preceding such sale and 75.0%, (ii) the DSCR for the Indian Creek Village Mortgaged Property is not less than the greater of the DSCR immediately preceding the sale and 1.30x, (iii) borrower partially defeases to lender an amount equal to the greater of (a) 120% of the allocated loan amount for Cedar Manor MHP Mortgaged Property (which ALA is equal to $ $8,880,000) and (b) 100% of the net sales proceeds.
Loan No. 18 – WHG Extended Stay Portfolio – Any time after the lockout period ends and prior to the open date, the borrowers may release a property, provided, among other things per the loan documents, (i) no event of default has occurred and is continuing, (ii) the borrowers defease a portion of the loan equal to the greater of (A) (a) 125% of the Amortized Allocated Loan Amount or (b) 100% of Net Sales Proceeds with respect to such Individual Property, (B) the DSCR for the remaining properties is no less than the greater of 1.25x and the DSCR immediately preceding such release, (C) the LTV for the remaining properties is no greater than 70.0% and (D) the Debt Yield for the remaining properties is no less than 12.0%.
Loan No. 28 – The Parking Spot Portfolio – Any time after the lockout period ends and prior to the open date, the borrowers may release a property, provided, among other things per the loan documents, (i) no event of default has occurred and is continuing, (ii) the borrowers defease a portion of the loan equal to the greater of (a) 125% of the allocated loan amount or (b) 85% of the proceeds from the sale of the applicable individual property, (iii) the DSCR for the remaining property is no less than 1.98x based on the trailing 12 months, (iv) the LTV for the remaining property is no greater than 63.32% and (v) the debt yield is no less than 13.2%.
Loan No. 32 – Renner Commerce Center Portfolio – Any time after the lockout period ends and prior to the open date, the borrowers may release a property, provided, among other things per the loan documents, (i) no event of default has occurred and is continuing, (ii) the borrowers defease a portion of the loan equal to the greater of (a) 125% of the allocated loan amount or (b) 85% of the net proceeds from the sale of the applicable individual property, (iii) the DSCR for the remaining property based on the trailing 12 months is no less than the greater of 1.30x and the DSCR immediately preceding such release, (iv) the LTV for the remaining property is no greater than the lesser of 75% and the LTV immediately preceding such release and (v) the debt yield for the remaining property is no less than the greater of 8.0% and the debt yield immediately preceding such release.
Loan No. 39 – Evergreen Square – The borrower may release the Citi Trends easement parcel and/or the release parcel provided, among other things, (i) the LTV for the remaining property does not exceed 125% and (ii) upon release of the Citi Trends easement parcel, the monthly taxes will be reduced to cover only the remaining property.
Loan No. 40 – Rio Verde & Sagewood Apartments Portfolio – Any time after the lockout period ends and prior to the open date, the borrower may release a property, provided, among other things per the loan documents, (i) no event of default has occurred and is continuing, (ii) the borrower defeases a portion of the loan equal to the greater of (a) 115% of the allocated loan amount or (b) 80% of the net proceeds from the sale of the applicable individual property, (iii) the DSCR for the remaining property based on the trailing 12 months is no less than the greater of 2.30x and the DSCR immediately preceding such release and (iv) the
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LTV for the remaining property is no greater than the lesser of 63.3% and the LTV immediately preceding such release.
(19) | Loan No. 27 – University Center – The University Center Mortgage Loan represents the acquisition of a recently stabilized property. The Most Recent NOI($) and Second Most Recent NOI($) reflect the low operating performance of the Mortgaged Property in 2013 and 2014, during which time the Mortgaged Property was being re-tenanted and renovated. |
Loan No. 33 – Rockford Crossing – The Rockford Crossing Mortgage Loan represents the acquisition of a recently stabilized property. The Most Recent NOI($) and Second Most Recent NOI($) reflect the low operating performance of the Mortgaged Property in 2014 and 2015, during which time the Mortgaged Property was being re-tenanted and renovated.
(20) | Loan No. 16 – GSP MHP Portfolio I – The collateral for the GSP MHP Portfolio I Mortgage Loan consists of both the fee and leasehold interests in both the Indian Creek Village Mortgaged Property and Cedar Manor MHP Mortgaged Property. The fee owner, an affiliate of the borrower, is obligated to lender under a fee mortgage. |
(21) | The following Mortgaged Properties consist, in whole or in part, of the respective borrower’s interest in one or more ground leases, space leases, air rights leases or other similar leasehold interests: |
Loan No. 1 – 11 Madison Avenue – The 11 Madison Avenue Mortgaged Property is subject, in part, to a New York City Industrial Development Agency (“IDA”) and a New York City Industrial and Commercial Incentive Program (“ICIP”) tax abatement. A portion of the property consisting of the leasehold interests in 9 condominium units, the related fee simple interests of which are owned by the New York City Industrial Development Agency, is subject to a certain Overlease Agreement dated December 22, 1995, by and between the borrower (as successor to tenant’s interest) and the IDA (as assigned and/or amended, the “11 Madison Avenue Overlease”). The rent under the 11 Madison Avenue Overlease is $10 for the full term and has been fully prepaid. The purpose of the 11 Madison Avenue Overlease is to substitute real property tax obligations with payments in lieu of real estate taxes. Credit Suisse is required to pay all PILOT pursuant to a PILOT Agreement dated December 1, 1995 between the IDA and Credit Suisse; however, the borrower has agreed to make such payments with respect to certain space subleased by it from Credit Suisse. See “11 Madison Avenue—Major Tenants” on Annex B to the free writing prospectus. The IDA structure terminates on December 31, 2016. If the 11 Madison Avenue Overlease terminates for any reason, the fee interest in the condominium units subject to the 11 Madison Avenue Overlease reverts back to the borrower. The mortgage provides that upon any such reversion of condominium units to the borrower, such condominium units will automatically be subject to the mortgage.
Loan No. 5 – The Drake – The Drake Mortgaged Property is subject to a ground lease with The Trustees of the First Baptist Church of the City of Washington D.C. as ground lessor. The ground lease expires on November 30, 2111, with no renewal options. The current annual ground rent payment is $1,008,042.09 per annum. On December 1 of each year during the term of The Drake Mortgage Loan, the ground rent payments for the 12-month period commencing on such date will be subject to adjustment by the percentage increase in the Consumer Price Index for the prior calendar year, subject to a floor of 2% per annum and a ceiling of 4% per annum.
Loan No. 32 – Renner Commerce Center Portfolio – The Renner Commerce Center - South Mortgaged Property is subject to a ground lease with an expiration date of June 1, 2020 and one, five-year extension option. The property is the subject of a ground lease that was created in connection with the issuance of municipal bonds to provide funding of the construction costs improvements to such property, and in connection with conferring tax abatement on such property. The annual ground rent under the lease is equal to the monthly amount which will be sufficient to pay, on June 1 of each year, all amounts then due on all outstanding bonds.
(22) | Loan No. 28 – The Parking Spot Portfolio – The Parking Spot Portfolio Mortgaged Properties are 100.0% owner-operated under the Parking Spot brand, an affiliate of the loan sponsor. |
(23) | The lease expiration dates shown are based on full lease terms. However, in certain cases, a tenant may have the option to terminate its lease or abate rent prior to the stated lease expiration date for no reason after a specified period of time and/or upon notice to the landlord or upon the occurrence of certain contingencies including, without limitation, if landlord violates the lease or fails to provide utilities or certain |
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essential services for a specified period or allows certain restricted uses, upon interference with tenant’s use of access or parking, upon casualty or condemnation, for zoning violations, if certain anchor or key tenants (including at an adjacent property) or a certain number of tenants go dark or cease operations, if a certain percentage of the net rentable area at the property is not occupied, if the tenant fails to meet sales targets or business objectives, or, in the case of a government tenant, for lack of appropriations or other reasons. In addition, in some instances, a tenant may have the right to assign its lease and be released from its obligations under the subject lease. Furthermore, some tenants may have the option to downsize their rented space without terminating the lease completely. In addition to the foregoing, the following are early non-contingent termination options for those tenants listed in Annex A-1:
Loan No. 1 – 11 Madison Avenue – The Largest Tenant, Credit Suisse, has the right to terminate one full floor provided such floor is either the highest of floors 2 through 18 then leased or the highest of floors 19 through 28 then leased, upon at least 15 months’ advance notice. The termination must be effective on the last day of a month occurring between May 2022 and April 2027 (inclusive).
Loan No. 7 – Intellicenter – The 2nd Largest Tenant, Morgan Stanley, has the one-time right to terminate its lease effective March 31, 2019, with 12 months’ prior written notice and payment of an $855,214 termination fee. The borrower is required to deposit into a Morgan Stanley reserve within one business day of receipt any fees or payments received in connection with the rejection, buy-out, termination, surrender, or cancellation of the Morgan Stanley lease.
Loan No. 27 – University Center – The 2nd Largest Tenant, TJ Maxx, has the right to terminate its lease effective March 31, 2020, with six months’ prior notice and payment of a $433,206 termination fee.
Loan No. 34 – Shops at Randall Road – The 3rd Largest Tenant, Shoe Carnival, may terminate its lease effective January 1, 2018 if gross sales do not exceed $235 PSF during January 2, 2016 through January 1, 2017, so long as 6 months’ notice is provided, subject to a termination fee of $50,000.
(24) | Loan No. 1 – 11 Madison Avenue – The Largest Tenant, Credit Suisse, recently renewed its lease at the 11 Madison Avenue Property through May 31, 2037 for 1,079,655 sq. ft. (which includes 862,269 sq. ft. of office space, 203,863 sq. ft. of concourse space and 13,523 sq. ft. of lobby/storage space. Credit Suisse currently occupies an additional 177,626 sq. ft. of office space and 8,770 sq. ft. of storage space that will expire in May 2017. |
(25) | The following major tenants (listed on Annex A-1) are currently subleasing all or a significant portion of its leased space: |
Loan No. 13 – Village Square at Kiln Creek – The Largest Tenant, Kmart Corporation (“Kmart”), is currently subleasing 92,348 sf. ft. to Kroger Limited Partnership I (“Kroger”), the 2nd Largest Tenant, with a lease expiration of September 30, 2033. Furthermore, Kmart has entered into two ground subleases with Kroger Fuel Pad and Chick-Fil-A, Inc. on two outparcels with lease expirations of September 30, 2033, and March 31, 2016, respectively. In the event Kmart vacates upon lease expiration on November 30, 2018, the Kroger lease will convert into a direct lease with the borrower and the Kroger Fuel Pad and Chick-Fil-A, Inc. ground subleases will convert into direct ground leases with the borrower.
Loan No. 24 – Cannon West Shopping Center - The Largest Tenant, Albertson’s, is subleasing 12,000 sq. ft. to Loco-Motion Inflatable Play and 18,025 sq. ft. to Gateway Community Church, Inc.
(26) | The following major tenants shown on Annex A-1 have abated, free or prepaid rent: |
Loan No. 1 – 11 Madison Avenue - At closing, the borrower deposited $18,847,898 into a Sony free rent reserve account for rent concessions with respect to the Sony lease, for monthly payments starting September 2015 through August 2016.
Loan No. 9 – Green Valley Corporate Center – The 3rd Largest Tenant, Amica Mutual Insurance Company, is entitled to one month of free rent in February 2017. The 5th Largest Tenant, PAR Springer-Miller Systems, is in a free rent period through October 31, 2015.
Loan No. 10 – Chase Park – At closing, the borrower deposited $47,690 into a free rent reserve for free rent concessions with respect to the 2nd Largest Tenant, Austin Stone Church, for the month of September 2015, as well as an additional $19,789 for two additional tenants that account for 1.7% of total NRA.
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Loan No. 26 – Golf Center – At closing, the borrower deposited $60,167 into a free rent reserve for free rent concessions with respect to the Party City lease and the Royal Foot Spa lease for monthly payments starting in September 2015 through December 2015.
Loan No. 30 – Arrowhead Shopping Center – At closing, the borrower deposited $14,144 into a free rent reserve account for rent concessions with respect to Arrowhead Martial Arts, the 5th Largest Tenant, for monthly payments starting October 2015 through December 2015.
Loan No. 43 – Clive Distribution Center – At closing, the borrower deposited $103,916 into a free rent reserve for free rent concessions with respect to the Largest Tenant, Centennial Logistics, LLC, for the five months including October 2015, November 2016, December 2017, January 2019 and February 2020, as well as for free rent concessions with respect to the 2nd Largest Tenant, SMA Midwest, LLC, for the two months of January 2016 and February 2017.
(27) | The tenants shown in the Annex A-1 have signed leases but may or may not be open for business as of the cutoff date of the securitization. |
Loan No. 1 – 11 Madison Avenue – The 2nd Largest Tenant, Sony, which leases approximately 25.3% of the NRA at the 11 Madison Avenue Mortgaged Property, has not yet taken occupancy. The Sony space is being built out for such tenant.
Loan No. 10 – Chase Park – The 2nd Largest Tenant, Austin Stone Church, which leases approximately 10.4% of the NRA at the Chase Park Mortgaged Property, has not yet taken occupancy. The tenant is expected to take occupancy of 28,614 sq. ft. of its space on November 1, 2015 and the remaining 1,245 sq. ft. on October 1, 2016.
Loan No. 19 – Greater Boston Industrial Portfolio I – The Largest Tenant at the 19 Technology Drive Mortgaged Property, Accelerated Media Technologies, Inc., is not yet in occupancy of its expansion space of 1,600 sq. ft. The tenant will take occupancy of such space on February 1, 2016 per the terms of its lease amendment.
(28) | Loan No. 10 – Chase Park – Occupancy includes the executed expansion space lease (3.0% of NRA) for Seton, the Largest Tenant. The expansion space lease commences at the earlier of (i) tenant work completion or (ii) November 1, 2015. |
(29) | Loan No. 1 – 11 Madison Avenue – The borrowers, 11 Madison Avenue Owner LLC, 11 Madison Avenue Owner 2 LLC, 11 Madison Avenue Owner 3 LLC, 11 Madison Avenue Owner 4 LLC, 11 Madison Avenue Owner 5 LLC and 11 Madison Avenue Owner 6 LLC, are structured as tenants-in-common and are each a Delaware limited liability company structured to be bankruptcy-remote, with two independent directors in its organizational structure. The sponsor of the borrowers and the non-recourse carveout guarantor is SL Green Realty Corp. |
Loan No. 4 – Atlanta Multifamily Portfolio – The borrowers, 3Mind Rosemont Cityview, LLC, SG Atlantic, LLC, SG Moezinia, LLC, SG Single, LLC and SG Avaria, LLC (collectively, “Rosemont Cityview Apartments Borrower”), and 3Mind Dawson Forest, LLC, SG Atlantic, LLC, SG Moezinia, LLC, SG Single, LLC and SG Avaria, LLC (collectively, “Dawson Forest Apartments Borrower”); are each newly formed Delaware limited liability companies. 3Mind Rosemont Cityview, LLC and 3Mind Dawson Forest, LLC are each known as a “3Mind Borrower” and are collectively known as the “3Mind Borrowers”. SG Atlantic, LLC, SG Moezinia, LLC, SG Single, LLC, and SG Avaria, LLC are collectively known as the “Core TIC Group”. Rosemont Cityview Apartments is owned by the Core TIC Group and 3Mind Rosemont Cityview, LLC as tenants-in-common and Dawson Forest Apartments is owned by the Core TIC Group and 3Mind Dawson Forest, LLC as tenants-in-common. Each borrower is managed by Franck A. Ruimy. Franck A. Ruimy is the sponsor of each of the 3Mind Borrowers, the manager of each of the borrowers and the non-recourse carve-out guarantor for the Atlanta Multifamily Portfolio Loan.
Loan No. 17 – A&H Pacific – The borrowers, 1151 Maple-1-AHPP, LLC, 1151 Maple-37.125-EHS, LLC, 1151 Maple-37.125 HFE, LLC and 1151 Maple-24.75-1151MA, LLC, are structured as tenants-in-common, are each a Delaware limited liability company structured to be bankruptcy-remote, with one independent director in its organizational structure. The sponsors of the borrowers and the non-recourse carveout guarantors are Moshe Aflalo, Efrem Harkham and Uri Harkham.
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Loan No. 32 – Renner Commerce Center Portfolio – The borrowers, JES Lenexa Renner, LLC; K3D Lenexa Renner, LLC; 3D Lenexa Renner, LLC, are structured as tenants-in-common and are each a special purpose Delaware limited liability company. John E. Shaffer is the guarantor of the Renner Commerce Center Portfolio Mortgage Loan.
Loan No. 39 – Evergreen Square – The borrowers, Evergreen Peoria SC LLC and JSERT Evergreen Peoria SC LLC, are structured as tenants-in-common and are each a single purpose Illinois limited liability company. The sponsors of the borrowers and the non-recourse carveout guarantors areLawrence Margolis, Jared Margolis and James Errant.
Loan No. 48 – Chambers Place – The borrowers, HGW Chambers Place, LLC, a Delaware limited liability company and RLW Commercial Property I, LLC, a Colorado limited liability company, are structured as tenants-in-common and are each a single purpose Delaware limited liability company and Colorado limited liability company, respectively. The sponsor of the borrowers and the non-recourse carveout guarantor is Robert L. Whelan.
Loan No. 60 – 4001 North Lincoln – The borrowers, Damen Blatteis, LLC and KDS Damen, LLC, are structured as tenants-in-common and are each a single purpose Illinois limited liability company. The sponsor of the borrowers and the non-recourse carveout guarantor is Daniel Blatteis.
(30) | All upfront reserve balances reflect the upfront reserve amount at loan origination. The current balance may be less than the amount shown. |
(31) | All ongoing reserve balances reflect the ongoing reserve amount at loan origination. The current balance may be greater than or less than the amount shown. Monthly reserves required to be deposited in such accounts may be capped pursuant to the related Mortgage Loan Documents. |
(32) | Loan No. 5 – The Drake – The borrower is required to deposit an amount equal to the monthly ground rent into a ground rent reserve account if (i) an event of default has occurred, (ii) the borrower fails to provide satisfactory evidence of payment of the ground rent prior to the 15th of each month or (iii) the lender does not receive certification from the borrower of its timely payment. |
Loan No. 7 – Intellicenter – A cash sweep into the Major Tenant Rollover Reserve account will commence upon a Major Tenant Trigger Event, as defined in the loan documents. Additionally, the borrower is required to deposit into the Morgan Stanley reserve account within one business day of receipt any fees or payments received in connection with the rejection, buy-out, termination, surrender, or cancellation of the Morgan Stanley lease.
Loan No. 9 – Green Valley Corporate Center – Upon the DSCR falling below 1.20x as of the end of a calendar quarter, until such time as the DSCR is at least 1.25x for two consecutive calendar quarters, or upon the occurrence of a triggering event relating to expenses incurred in connection with the IADT tenant space, until such time as either the triggering event has been cured or an amount of excess cash flow equal to the expenses incurred by the borrower in excess of the disbursement cap of $25.00 per square foot has been deposited with the lender, all excess cash will be deposited into a lender-controlled account, to be held by the lender as additional collateral.
Loan No. 12 – Windrift Apartments – The borrower is required to deposit 125% of the then-remaining required repairs if the repairs are not completed within 90 days of closing.
Loan No. 13 – Village Square at Kiln Creek – Upon the occurrence of the DSCR falling below 1.20x following a Kmart go-dark event or a Kmart bankruptcy event, all excess cash flow will be deposited into the Rollover Reserve until the Rollover Reserve increased cap or Modified Rollover Reserve Cap has been reached and then into the Debt Service Reserve account, up to a cap of $608,601. In addition, if a Kmart bankruptcy event occurs during a Cash Sweep Period caused by the DSCR falling below 1.20x following a Kmart go-dark event, the borrower is required to deposit cash or a letter of credit in an amount equal to the difference between $608,601 and the amount then held in the Debt Service Reserve account. Furthermore, provided no cash sweep period caused by DSCR falling below 1.20x following a Kmart go-dark event is ongoing, within 30 days following a Kmart bankruptcy event, the borrower will deposit cash or a letter of credit into the Kmart BK Reserve in an amount equal to $608,601. In no event will the borrower be obligated to fund both the Debt Service Reserve and the Kmart BK Reserve upon the occurrence of a Kmart bankruptcy event.
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Loan No. 13 – Village Square at Kiln Creek – During the continuance of a cash sweep period caused by a Kmart failure to renew event or by a DSCR trigger event following a Kmart go-dark event or a Kmart bankruptcy event, all excess cash will be deposited into the Rollover Reserve, subject to the Rollover Reserve increased cap of $875,000 in the aggregate. During the continuance of a cash sweep period caused by a Kmart failure to renew event, or following a Kmart go-dark event or a Kmart bankruptcy event, if a Kmart Partial Lease Renewal should occur, then the Rollover Reserve Increased Cap shall decrease to the Modified Rollover Reserve Cap, as defined in the loan documents.
Loan No. 13 – Village Square at Kiln Creek – Borrower will be required to deposit 1/12 of the annual taxes that are paid directly by Kmart into the tax account upon (i) an event of default, (ii) Kmart no longer pays all taxes directly, (iii) borrower fails to provide evidence that taxes have been paid or (iv) the Kmart Lease is no longer in full force and effect.
Loan No. 14 – Ocala Portfolio - AHIP – Beginning on the payment date in August 2017, borrower will deposit the greater of 1/12 of 4.0% of such year’s annual rents and any amount required under the Franchise Agreement for FF&E work.
Loan No. 22 – Hilton Greenville – The borrower will deposit 125% of the amount required to complete the Required PIP Plan. The borrower is required to complete the required future PIP renovations on or before the deadline for each renovation required by the franchisor.
Loan No. 25 – HGI Kennewick – The borrower will deposit $28,500 into a seasonality reserve commencing in the month of July during each calendar year, subject to a cap of $85,000.
Loan No. 30 – Arrowhead Shopping Center – On each monthly payment date, the borrower is required to deposit $3,524.67 into the TI/LC reserve account at any time that (i) the balance in the TI/LC reserve is less than $170,000, (ii) an event of default has occurred and is continuing, (iii) the borrower fails to maintain a DSCR of at least 1.15x as of the end of any calendar quarter, until such time as the DSCR is at least 1.25x for two consecutive calendar quarters or (iv) the occurrence of certain defaults and other events relating to tenants 99 Cents Only Store or Ace Hardware, including, among other things, the date such tenant “goes dark”, the early termination of such tenant’s lease or the date such tenant provides notice of its intent to terminate, the date that is six months prior to the expiration of the related lease, if not renewed, or upon the bankruptcy of such tenant.
Loan No. 32 – Renner Commerce Center Portfolio – A cash sweep into the rollover reserve account will commence upon a major tenant trigger event, as defined in the loan documents. So long as a major tenant trigger event – vacation is continuing, the rollover reserve account will be capped at $675,000.
Loan No. 33 – Rockford Crossing – Upon the occurrence of a HomeGoods/DSW trigger event, the borrower is required to deposit all excess cash into the HomeGoods/DSW Reserve. Additionally, the borrower shall deposit 125% of the Required Repairs set forth in the loan agreement into the Required Repairs Reserve if the Required Repairs are not completed on or prior to March 4, 2016 (or in the case that the borrower is currently pursuing completion of the Required Repairs, September 4, 2016). Upon the occurrence of a required repairs deposit event, the borrower is required to deposit all excess cash into the Required Repairs Reserve.
Loan No. 36 – Lancaster Towers – Upon the occurrence of a debt service reserve trigger event, the borrower is required to deposit $250,967 into the Debt Service Reserve.
Loan No. 55 – Midvale Park Self Storage – Upon the occurrence and during the continuance of (i) a cash sweep event or (ii) a related loan cash sweep event, the borrower is required to deposit any distribution payable to the sponsor to the distribution reserve. Such amount will be held as additional collateral for the Mortgage Loan as well as the Midvale Park RV Storage Mortgage Loan.
Loan No. 62 – Rhett at Remount – Upon the occurrence of a major tenant trigger event - lease expiration and/or major tenant trigger event - vacation, all excess cash flow will be deposited into the Rollover Reserve, capped at $225,000. Monthly collections of $2,667 will continue and will not be subject to the cap. Upon the occurrence of a major tenant trigger event – bankruptcy, all excess cash flow will be deposited into the Major Tenant Rollover Reserve.
Loan No. 65 – Midvale Park RV Storage – Upon the occurrence and during the continuance of (i) a Cash Sweep Event or (ii) a related loan cash sweep event, borrower is required to deposit any distribution payable
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to the sponsor to the Distribution Reserve. Such amount will be held as additional collateral for the Mortgage Loan as well as the Midvale Park Self Storage Mortgage Loan.
(33) | Loan No. 1 – 11 Madison Avenue – The borrower is responsible for approximately $140,212,434 of leasing commissions, tenant improvements and base building work under major tenant leases, including its leases with Credit Suisse, Sony, and other tenants. At origination of the related mortgage loan, (1) the borrower deposited $81,152,102 in a lease costs account for the payment of such expenses, and (2) the guarantor under such mortgage loan, SL Green Realty Corp., provided a lease costs guaranty in the amount of the remaining $59,060,332 of such expenses. |
Loan No. 2 – NMS Los Angeles Multifamily Portfolio – The Luxe at 1548 Mortgaged Property is subject to a springing deed restriction by the City of Santa Monica to provide 19 units of affordable housing. The loan sponsors agreed with the City to build a multifamily building at a nearby location (the “New Building”) and provide the affordable housing units at that property (which will not be collateral for the NMS Los Angeles Portfolio Mortgage Loan). In the event the New Building provides the required affordable housing units, the City is required to release the deed restriction. In the event the sponsors have not made affordable housing units available at the New Building, the City may require that the borrower lease 19 units at the Luxe at 1548 Mortgaged Property to low income tenants as units become vacant. In connection with the springing deed restriction, the borrower delivered a $7.0 million evergreen letter of credit to the lender as additional collateral for the NMS Los Angeles Multifamily Portfolio Mortgage Loan and Naum Neil Schekhter and Margot V. Shekhter, the sponsors, provided a personal guarantee with respect to the last $7.0 million of principal repaid under the NMS Los Angeles Multifamily Portfolio Mortgage Loan. The letter of credit and the personal guarantee will be released upon a release of the deed restriction encumbering the Luxe at 1548 Mortgaged Property or in the event the Luxe at 1548 Mortgaged Property is released from the lien of the security instrument in accordance with the loan documents. Pursuant to the August 14, 2015 appraisal, the appraised value for this property is $37,100,000. This value was used in the calculation of the sum of the value of each of the properties on an individual basis (as described in footnote 15 above). On October 8, 2015, the appraiser provided a supplemental appraisal that considered the appraised value in the event the City requires the borrower to lease 19 units to low income tenants. The supplemental appraisal included a hypothetical value for this Mortgaged Property of $31,100,000 in the event the 19 units are subject to Section 8 restrictions and $26,330,000 in the event the 19 units are subject to HUD restrictions.
Loan No. 14 – Ocala Portfolio – AHIP – The borrower is responsible for FF&E reserves starting on the payment date in August 2017 in an amount that is greater of 1/12 of 4.0% of such year’s annual rents and the then required amount under the Franchise Agreement, provided that in lieu of monthly reserves, the borrower may deliver to the lender a letter of credit in an amount equal to 4.0% of the rents for the preceding 12 months.
Loan No. 27 – University Center – The borrower shall make monthly deposits of $1,713 upon the occurrence of a Replacement Reserve Trigger Event. In lieu of monthly reserves, the borrower may deposit an amount equal to the product of $1,713 multiplied by the number of payment dates occurring from the date of such determination through and until the anticipated repayment date. Additionally, the borrower shall make monthly deposits of $5,207 upon the occurrence of a Rollover Reserve Trigger Event. In lieu of monthly reserves, the borrower may deposit an amount equal to the $7.50 PSF of a Major Tenant Space.
Loan No. 33 – Rockford Crossing – The borrower shall make monthly deposits of $1,978 upon the occurrence of a Replacement Reserve Trigger Event. In lieu of monthly reserves, the borrower may deposit an amount equal to the product of $1,978 multiplied by the number of payment dates occurring from the date of such determination through and until the anticipated repayment date. Additionally, the borrower shall make monthly deposits of $5,463 upon the occurrence of a Rollover Reserve Trigger Event. In lieu of monthly reserves, the borrower may deposit an amount equal to the $7.50 PSF of a Major Tenant Space.
Loan No. 52 – Grove Park Shopping Center – Upon the occurrence of a Major Tenant Trigger Event, all excess cash flow shall be deposited to the Major Tenant Rollover Reserve. A major tenant rollover reserve cap of $249,600 shall only apply if a Major Tenant Trigger Event – Lease Expiration is continuing. In lieu of a cash flow sweep caused solely by a Major Tenant Trigger Event – Lease Expiration, the borrower may deposit cash or post a letter of credit in the amount of $249,600.
Loan No. 54 – Parkway Plaza Shopping Center – Upon the occurrence of a Major Tenant Trigger Event, all excess cash flow shall be deposited to the Major Tenant Rollover Reserve. A major tenant rollover reserve cap of $229,925 shall only apply if a Major Tenant Trigger Event – Lease Expiration is continuing. In lieu of a
A-1-37 |
cash flow sweep caused solely by a Major Tenant Trigger Event – Lease Expiration, the borrower may deposit cash or post a letter of credit in the amount of $229,925.
(34) | Loan No. 6 – Midwest Shopping Center Portfolio – The Phase I environmental report recommended that a Phase II report be completed for the Kansas Center Mortgaged Property to assess whether the subsurface had been impacted by the historical and current long-term use of the property by auto repair operations. The Phase II investigation was completed and no further action was recommended at the Kansas Center Mortgaged Property. |
(35) | Summary of Existing Pari Passu Debt |
Loan No. | Mortgage Loan | Mortgage Loan Cut-off Date Balance | Pari Passu Companion Loan Cut-off Date Balance | Loan Combination Cut-off Date Balance | Loan Combination U/W NCF DSCR | Loan Combination Cut-off Date LTV Ratio | Loan Combination Cut-off Date U/W NOI Debt Yield | ||||||
1 | 11 Madison Avenue | $70,000,000 | $694,330,000 | $764,330,000(1) | 3.89x | 32.5% | 14.3% | ||||||
2 | NMS Los Angeles Multifamily Portfolio | $65,000,000 | $55,000,000 | $120,000,000 | 1.31x | 68.8% | 6.7% | ||||||
(1) | The Loan Combination Cut-off Date Balance, U/W NCF DSCR, Cut-off Date LTV Ratio and Cut-off Date U/W NOI Debt Yield excludes three subordinate companion loans in the aggregate original amount of $310.67 million as well as two mezzanine loans in the aggregate original balance of $325.0 million. |
(36) | Split Loan Summary |
Loan No. | Mortgage Loan | Mortgage Loan Cut-off Date Balance | Subordinate Companion Loan Cut-off Date Balance | Total Mortgage Debt Cut-off Date Balance(1) | Pooled Trust U/W NCF DSCR | Total Mortgage Debt U/W NCF DSCR | Pooled Trust Cut-off Date LTV | Total Mortgage Debt Cut- off Date LTV Ratio | Pooled Trust U/W NOI Debt Yield | Total Mortgage Debt U/W NOI Debt Yield | |||||||||
1 | 11 Madison Avenue | $70,000,000 | $310,670,000 | $1,075,000,000 | 3.89x | 1.97x | 32.5% | 59.6% | 14.3% | 7.8% |
(1) | Total mortgage debt includes the additional pari passu loans and the subordinate companion loans. |
(37) | Summary of Existing Mezzanine Debt |
Loan No. | Mortgage Loan | Mortgage Loan Cut-off Date Balance | % of Initial Outstanding Pool Balance | Mezzanine Debt Cut-off Date Balance | Annual Interest Rate on Mezzanine Loan | Mezzanine Loan Maturity Date | Intercreditor Agreement | Total Debt Cut- off Date LTV Ratio | Total Debt U/W NCF DSCR | Total Debt U/W NOI Debt Yield | ||||||||||
1 | 11 Madison Avenue(1) | $70,000,000 | 7.5% | $325,000,000 | 4.7577%(2) | 9/6/2025 | Yes | 59.6% | 1.97x | 7.8% | ||||||||||
4 | Atlanta Multifamily Portfolio | $45,000,000 | 4.8% | $5,000,000 | 12.5000%(3) | 9/6/2020 | Yes | 72.2% | 1.04x | 7.5% | ||||||||||
6 | Midwest Shopping Center Portfolio | $38,152,658 | 4.1% | $5,500,000 | 11.0000% | 7/6/2025 | Yes | 77.1% | 1.21x | 9.0% | ||||||||||
41 | CSRA Food Lion Portfolio II | $780,000 | 0.7% | $780,000 | 14.000% | 9/6/2025 | Yes | 76.0% | 1.10x | 9.4% |
(1) | With respect to the 11 Madison Avenue Mortgage Loan, LTV, DSCR and debt yield calculations include the relatedpari passu companion loans. Two mezzanine loans were funded concurrently with the closing of the 11 Madison Avenue Loan. A $150,000,000 mezzanine A loan, which is coterminous with the 11 Madison Avenue Mortgage Loan, accrues interest at a fixed per annum rate equal to 4.6500% and a $175,000,000 mezzanine B loan, which is coterminous with the 11 Madison Avenue Mortgage Loan, accrues interest at a fixed per annum rate equal to 4.8500%. Total Debt Cut-off Date LTV Ratio, Total Debt U/W NCF DSCR and Total Debt U/W NOI Debt Yield include the related pari passu companion loans, the related subordinate loans and the two mezzanine loans. An intercreditor agreement is in place (i) among the holders of the 11 Madison Avenue Mortgage Loan, the related pari passu companion loans and the related subordinate loans and (ii) as between the holders of the foregoing loans, and the holders of the related mezzanine loans. |
(2) | The annual interest rate on the mezzanine loan is a blended rate. The actual interest rates on the mezzanine A loan and mezzanine B loan are 4.650% and 4.850%, respectively. |
(3) | The mezzanine loan accrues interest at a rate of 12.5000% and after an initial 18-month interest only period, amortizes on a fixed amortization schedule. |
(38) | Summary of Future Mezzanine Debt |
Loan No.(1)(2)(3)(4) | Mortgage Loan | Mortgage Loan Cut-off Date Balance | % of Initial Outstanding Pool Balance | Intercreditor Agreement Required | Combined Minimum DSCR | Combined Maximum LTV | Combined Debt Yield | |||||||
57 | Bonita Springs Self Storage | $3,200,000 | 0.3% | Yes | 1.15x | 75.0% | 7.5% |
(1) | The chart above does not include Greater Boston Industrial Portfolio I, which permits the borrower to obtain a Preferred Equity Investment in connection with a transfer and assumption provided, among other things, (i) no event of default has occurred and is continuing, (ii) a combined LTV of no greater than 75.0%, (iii) a combined DSCR of no less than 1.30x and (iv) a combined Debt Yield of no less than 8.5%. |
(2) | The chart above does not include University Center Mortgage Loan, which permits the borrower to incur unsecured debt from a guarantor to be used solely to pay debt service, approved re-leasing expenses, capital expenditures, extraordinary expenses, and actual operating expenses necessary for the operation, maintenance, or re-tenanting of the property as a result of the insufficient reserves. The unsecured debt must be subordinate to the mortgage loan pursuant to a subordination and standstill agreement reasonably satisfactory to the lender. The aggregate amount may not exceed $1,102,500 without lender’s consent. |
(3) | The chart above does not include Rockford Crossing Mortgage Loan, which permits the borrower to incur unsecured debt from a guarantor to be used solely to pay debt service, approved re-leasing expenses, capital expenditures, extraordinary expenses, and actual operating expenses necessary for the operation, maintenance, or re-tenanting of the property as a result of the insufficient reserves. The unsecured debt must be subordinate to the mortgage loan pursuant to a subordination and standstill agreement reasonably satisfactory to the lender. The aggregate amount may not exceed $945,000 without lender’s consent. |
(4) | The chart above does not include Winchester Oaks Apartments Mortgage Loan, which permits the borrower to incur future, unsecured, affiliate debt provided that (i) it does not exceed in the aggregate $75,000, (ii) it is evidenced by a promissory note acceptable to lender, (iii) it is subordinate to the mortgage loan pursuant to a subordination and standstill agreement reasonably acceptable to lender, (iv) it does not permit payments to be made following the occurrence of a cash sweep event under the related loan documents, and (v) the proceeds may only be used in connection with the Mortgaged Property. |
A-1-38 |
ANNEX A-2
CERTAIN POOL CHARACTERISTICS OF THE MORTGAGE LOANS
AND MORTGAGED PROPERTIES
Range of Cut-off Date Balances(1)(2)(3)
Weighted Averages | ||||||||||||||||||
% of Initial | Stated | |||||||||||||||||
Number of | Aggregate | Outstanding | Remaining | Cut-off | LTV Ratio at | |||||||||||||
Mortgage | Cut-off Date | Pool | Mortgage | Term | U/W NCF | Date LTV | Maturity or | |||||||||||
Range of Cut-off Date Balances | Loans | Balance | Balance | Rate | (Mos.) | DSCR | Ratio(4) | ARD(4) | ||||||||||
$966,058 - $7,499,999 | 28 | $ | 118,293,275 | 12.7% | 4.5902% | 119 | 1.64x | 67.8% | 57.4% | |||||||||
$7,500,000 - $14,999,999 | 18 | $ | 199,823,491 | 21.4% | 4.6004% | 115 | 1.64x | 68.9% | 60.1% | |||||||||
$15,000,000 - $24,999,999 | 9 | $ | 168,853,099 | 18.1% | 4.5504% | 114 | 1.71x | 69.7% | 61.0% | |||||||||
$25,000,000 - $49,999,999 | 7 | $ | 246,734,951 | 26.5% | 4.5244% | 108 | 1.52x | 68.0% | 60.0% | |||||||||
$50,000,000 - $70,000,000 | 3 | $ | 197,912,576 | 21.2% | 4.2193% | 119 | 2.31x | 54.2% | 50.2% | |||||||||
Total/Weighted Average | 65 | $ | 931,617,393 | 100.0% | 4.4889% | 114 | 1.77x | 65.5% | 57.8% | |||||||||
Range of Mortgage Rates(1)(2)(3) | ||||||||||||||||||
Weighted Averages | ||||||||||||||||||
Stated | ||||||||||||||||||
Number of | Aggregate | % of Initial | Remaining | Cut-off | LTV Ratio at | |||||||||||||
Range of Mortgage | Mortgage | Cut-off Date | Outstanding | Mortgage | Term | U/W NCF | Date LTV | Maturity or | ||||||||||
Rates as of Cut-off Date | Loans | Balance | Pool Balance | Rate | (Mos.) | DSCR | Ratio(4) | ARD(4) | ||||||||||
3.5602% - 4.2499% | 6 | $ | 190,965,889 | 20.5% | 3.9706% | 119 | 2.73x | 50.9% | 45.2% | |||||||||
4.2500% - 4.4999% | 15 | $ | 214,798,647 | 23.1% | 4.3536% | 115 | 1.44x | 69.2% | 60.1% | |||||||||
4.5000% - 4.7499% | 29 | $ | 299,395,996 | 32.1% | 4.6293% | 119 | 1.66x | 69.2% | 59.2% | |||||||||
4.7500% - 5.1100% | 15 | $ | 226,456,860 | 24.3% | 4.8688% | 103 | 1.39x | 69.5% | 64.4% | |||||||||
Total/Weighted Average | 65 | $ | 931,617,393 | 100.0% | 4.4889% | 114 | 1.77x | 65.5% | 57.8% |
Type of Mortgaged Properties(1)(2)(3)(5)
Weighted Averages | ||||||||||||||||||||||||
Cut-off Date | ||||||||||||||||||||||||
Number of | Balance per # | |||||||||||||||||||||||
Units, Pads, | of Units, | |||||||||||||||||||||||
Number of | Aggregate | % of Initial | Rooms, | Pads, | Stated | Cut-off | LTV Ratio | |||||||||||||||||
Mortgaged | Cut-off Date | Outstanding | NRA or | Rooms, NRA | Mortgage | Remaining | U/W NCF | Date LTV | at Maturity | |||||||||||||||
Property Type | Properties | Balance | Pool Balance | Spaces | or Spaces | Rate | Term (Mos.) | Occupancy | DSCR | Ratio(4) | or ARD(4) | |||||||||||||
Multifamily | 29 | $ | 341,141,062 | 36.6% | 5,061 | $ | 138,319 | 4.5950% | 109 | 96.9% | 1.42x | 68.1% | 61.9% | |||||||||||
Garden | 23 | $ | 224,432,728 | 24.1% | 4,333 | $ | 73,753 | 4.5581% | 103 | 96.1% | 1.49x | 67.3% | 60.2% | |||||||||||
Mid Rise | 4 | $ | 64,708,333 | 6.9% | 355 | $ | 329,787 | 4.8747% | 119 | 97.6% | 1.30x | 71.4% | 68.2% | |||||||||||
High Rise | 2 | $ | 52,000,000 | 5.6% | 373 | $ | 178,724 | 4.4062% | 119 | 99.1% | 1.30x | 67.3% | 61.5% | |||||||||||
Retail | 24 | $ | 181,503,349 | 19.5% | 2,371,940 | $ | 136 | 4.4493% | 119 | 96.0% | 1.52x | 68.3% | 58.0% | |||||||||||
Anchored(6) | 22 | $ | 161,253,349 | 17.3% | 2,328,842 | $ | 91 | 4.4756% | 119 | 96.1% | 1.50x | 69.0% | 58.2% | |||||||||||
Unanchored | 2 | $ | 20,250,000 | 2.2% | 43,098 | $ | 496 | 4.2398% | 119 | 94.8% | 1.64x | 62.7% | 56.2% | |||||||||||
Office | 7 | $ | 167,582,500 | 18.0% | 2,980,966 | $ | 231 | 4.1416% | 119 | 96.3% | 2.56x | 54.0% | 49.2% | |||||||||||
Suburban | 3 | $ | 87,162,500 | 9.4% | 654,943 | $ | 143 | 4.5307% | 119 | 94.7% | 1.63x | 69.8% | 61.6% | |||||||||||
CBD | 1 | $ | 70,000,000 | 7.5% | 2,285,043 | $ | 334 | 3.5602% | 119 | 97.8% | 3.89x | 32.5% | 32.5% | |||||||||||
Medical | 3 | $ | 10,420,000 | 1.1% | 40,980 | $ | 279 | 4.7920% | 119 | 100.0% | 1.41x | 65.7% | 57.7% | |||||||||||
Hospitality | 14 | $ | 128,579,188 | 13.8% | 1,684 | $ | 126,840 | 4.5320% | 111 | 75.5% | 2.26x | 65.2% | 55.3% | |||||||||||
Full Service | 3 | $ | 56,924,811 | 6.1% | 467 | $ | 176,805 | 4.5040% | 118 | 77.3% | 2.22x | 64.1% | 52.0% | |||||||||||
Limited Service | 5 | $ | 37,678,584 | 4.0% | 553 | $ | 76,273 | 4.4790% | 119 | 69.1% | 2.61x | 64.7% | 57.8% | |||||||||||
Select Service | 1 | $ | 18,475,793 | 2.0% | 117 | $ | 157,913 | 4.5350% | 119 | 85.0% | 1.92x | 64.8% | 52.5% | |||||||||||
Extended Stay | 5 | $ | 15,500,000 | 1.7% | 547 | $ | 29,220 | 4.7600% | 60 | 73.1% | 1.95x | 70.5% | 64.7% | |||||||||||
Industrial | 7 | $ | 35,362,500 | 3.8% | 787,462 | $ | 51 | 4.6369% | 119 | 98.8% | 1.38x | 73.2% | 64.4% | |||||||||||
Manufactured Housing | ||||||||||||||||||||||||
Community | 4 | $ | 30,076,497 | 3.2% | 794 | $ | 39,789 | 4.6637% | 119 | 90.1% | 1.31x | 74.0% | 60.2% | |||||||||||
Self Storage | 8 | $ | 26,526,010 | 2.8% | 486,075 | $ | 61 | 4.7817% | 119 | 85.3% | 1.49x | 68.8% | 57.8% | |||||||||||
Parking | 2 | $ | 10,846,286 | 1.2% | 3,189 | $ | 3,544 | 4.7300% | 119 | NAP | 1.99x | 63.2% | 51.6% | |||||||||||
Mixed Use | 1 | $ | 10,000,000 | 1.1% | 30 | $ | 333,333 | 4.7700% | 120 | 100.0% | 1.50x | 67.6% | 67.6% | |||||||||||
Total/Weighted Average | 96 | $ | 931,617,393 | 100.0% | 4.4889% | 114 | 93.2% | 1.77x | 65.5% | 57.8% |
A-2-1 |
Mortgaged Properties by State and/or Location(1)(2)(3)(5)
Weighted Averages | ||||||||||||||||||||
Cut-off | ||||||||||||||||||||
Number of | Aggregate | % of Initial | Stated | Date | LTV Ratio | |||||||||||||||
Mortgaged | Cut-off Date | Outstanding | Mortgage | Remaining | U/W NCF | LTV | at Maturity | |||||||||||||
State/Location | Properties | Balance | Pool Balance | Rate | Term (Mos.) | DSCR | Ratio(4) | or ARD(4) | ||||||||||||
Texas | 12 | $ | 126,118,259 | 13.5% | 4.3827% | 119 | 1.62x | 66.2% | 56.5% | |||||||||||
Florida | 11 | $ | 115,142,500 | 12.4% | 4.5769% | 119 | 1.69x | 71.4% | 64.0% | |||||||||||
California | 9 | $ | 92,986,331 | 10.0% | 4.7433% | 119 | 1.39x | 67.2% | 64.7% | |||||||||||
Southern(7) | 8 | $ | 88,742,134 | 9.5% | 4.7645% | 119 | 1.39x | 66.9% | 65.0% | |||||||||||
Northern(7) | 1 | $ | 4,244,197 | 0.5% | 4.3000% | 119 | 1.45x | 73.3% | 58.9% | |||||||||||
New York | 5 | $ | 89,562,262 | 9.6% | 3.8273% | 119 | 3.37x | 39.9% | 37.5% | |||||||||||
New York City | 1 | $ | 70,000,000 | 7.5% | 3.5602% | 119 | 3.89x | 32.5% | 32.5% | |||||||||||
Remaining New York State | 4 | $ | 19,562,262 | 2.1% | 4.7829% | 119 | 1.53x | 66.3% | 55.2% | |||||||||||
Illinois | 8 | $ | 52,493,290 | 5.6% | 4.4503% | 119 | 1.45x | 70.8% | 59.6% | |||||||||||
Georgia | 4 | $ | 50,975,000 | 5.5% | 4.7911% | 63 | 1.39x | 64.7% | 61.8% | |||||||||||
District of Columbia | 1 | $ | 44,000,000 | 4.7% | 4.3400% | 119 | 1.28x | 67.4% | 62.8% | |||||||||||
Virginia | 2 | $ | 43,400,000 | 4.7% | 4.5626% | 120 | 1.35x | 72.8% | 62.4% | |||||||||||
North Carolina | 4 | $ | 39,256,056 | 4.2% | 4.4633% | 119 | 2.23x | 59.9% | 49.0% | |||||||||||
Pennsylvania | 4 | $ | 35,832,300 | 3.8% | 4.7365% | 119 | 1.35x | 72.3% | 62.5% | |||||||||||
Arizona | 7 | $ | 32,973,010 | 3.5% | 4.6131% | 119 | 1.88x | 66.0% | 55.8% | |||||||||||
Oregon | 1 | $ | 32,419,793 | 3.5% | 4.5900% | 118 | 1.85x | 68.7% | 55.8% | |||||||||||
Nevada | 1 | $ | 27,000,000 | 2.9% | 4.5900% | 118 | 1.96x | 63.9% | 54.7% | |||||||||||
Iowa | 3 | $ | 23,357,965 | 2.5% | 4.3326% | 118 | 1.56x | 68.2% | 56.2% | |||||||||||
Colorado | 2 | $ | 19,250,000 | 2.1% | 4.3418% | 74 | 1.45x | 71.0% | 65.7% | |||||||||||
Massachusetts | 3 | $ | 15,500,000 | 1.7% | 4.9030% | 119 | 1.26x | 73.5% | 65.2% | |||||||||||
Oklahoma | 2 | $ | 12,995,106 | 1.4% | 4.5234% | 118 | 1.43x | 72.8% | 59.2% | |||||||||||
Washington | 1 | $ | 12,678,584 | 1.4% | 4.6000% | 119 | 1.66x | 72.0% | 58.5% | |||||||||||
Tennessee | 1 | $ | 10,224,755 | 1.1% | 4.6000% | 118 | 2.25x | 69.6% | 56.6% | |||||||||||
Kansas | 2 | $ | 9,862,500 | 1.1% | 4.5400% | 119 | 1.33x | 75.0% | 65.7% | |||||||||||
South Carolina | 3 | $ | 9,696,860 | 1.0% | 4.6659% | 99 | 2.06x | 65.7% | 60.1% | |||||||||||
Michigan | 2 | $ | 8,242,000 | 0.9% | 4.5101% | 118 | 1.42x | 70.7% | 60.7% | |||||||||||
Ohio | 2 | $ | 7,919,024 | 0.9% | 4.7321% | 119 | 1.95x | 63.6% | 51.9% | |||||||||||
Missouri | 1 | $ | 4,464,259 | 0.5% | 4.3300% | 117 | 1.53x | 67.4% | 54.4% | |||||||||||
Indiana | 1 | $ | 4,242,538 | 0.5% | 4.7000% | 119 | 1.30x | 62.9% | 46.6% | |||||||||||
Kentucky | 1 | $ | 4,075,000 | 0.4% | 4.7600% | 60 | 1.95x | 70.5% | 64.7% | |||||||||||
Louisiana | 1 | $ | 3,000,000 | 0.3% | 4.7600% | 60 | 1.95x | 70.5% | 64.7% | |||||||||||
Alabama | 1 | $ | 2,550,000 | 0.3% | 4.7600% | 60 | 1.95x | 70.5% | 64.7% | |||||||||||
Utah | 1 | $ | 1,400,000 | 0.2% | 5.1100% | 120 | 1.90x | 58.3% | 48.1% | |||||||||||
Total/Weighted Average | 96 | $ | 931,617,393 | 100.0% | 4.4889% | 114 | 1.77x | 65.5% | 57.8% |
Range of Cut-off Date LTV Ratios(1)(2)(3)(4)
Weighted Averages | ||||||||||||||||||
Stated | ||||||||||||||||||
Number of | Aggregate | % of Initial | Remaining | Cut-off | LTV Ratio at | |||||||||||||
Range of Cut-off Date LTV | Mortgage | Cut-off Date | Outstanding | Mortgage | Term | U/W NCF | Date LTV | Maturity or | ||||||||||
Ratios | Loans | Balance | Pool Balance | Rate | (Mos.) | DSCR | Ratio | ARD | ||||||||||
32.5% - 54.9% | 2 | $ | 84,280,263 | 9.0% | 3.6754% | 119 | 3.74x | 35.4% | 33.8% | |||||||||
55.0% - 59.9% | 4 | $ | 11,865,000 | 1.3% | 4.6124% | 119 | 2.07x | 57.8% | 55.2% | |||||||||
60.0% - 64.9% | 15 | $ | 248,471,872 | 26.7% | 4.5023% | 108 | 1.82x | 63.2% | 55.3% | |||||||||
65.0% - 69.9% | 17 | $ | 300,503,781 | 32.3% | 4.5511% | 119 | 1.48x | 68.4% | 61.0% | |||||||||
70.0% - 74.9% | 20 | $ | 197,577,674 | 21.2% | 4.6262% | 110 | 1.44x | 73.0% | 63.1% | |||||||||
75.0% - 77.2% | 7 | $ | 88,918,803 | 9.5% | 4.6913% | 120 | 1.37x | 75.5% | 65.7% | |||||||||
Total/Weighted Average | 65 | $ | 931,617,393 | 100.0% | 4.4889% | 114 | 1.77x | 65.5% | 57.8% | |||||||||
Range of LTV Ratios at Maturity or ARD(1)(2)(3)(4) | ||||||||||||||||||
Weighted Averages | ||||||||||||||||||
Stated | ||||||||||||||||||
Number of | Aggregate | % of Initial | Remaining | Cut-off | LTV Ratio at | |||||||||||||
Range of LTV | Mortgage | Cut-off Date | Outstanding | Mortgage | Term | U/W NCF | Date LTV | Maturity or | ||||||||||
Ratios at Maturity or ARD | Loans | Balance | Pool Balance | Rate | (Mos.) | DSCR | Ratio | ARD | ||||||||||
32.5% - 49.9% | 6 | $ | 96,888,859 | 10.4% | 3.8378% | 119 | 3.50x | 38.8% | 35.3% | |||||||||
50.0% - 54.9% | 11 | $ | 187,282,616 | 20.1% | 4.4189% | 118 | 1.68x | 64.7% | 52.7% | |||||||||
55.0% - 59.9% | 16 | $ | 157,063,898 | 16.9% | 4.4788% | 119 | 1.66x | 67.9% | 57.1% | |||||||||
60.0% - 64.9% | 23 | $ | 295,407,020 | 31.7% | 4.5745% | 107 | 1.59x | 69.2% | 62.5% | |||||||||
65.0% - 68.8% | 9 | $ | 194,975,000 | 20.9% | 4.7583% | 115 | 1.34x | 72.2% | 67.3% | |||||||||
Total/Weighted Average | 65 | $ | 931,617,393 | 100.0% | 4.4889% | 114 | 1.77x | 65.5% | 57.8% |
A-2-2 |
Range of U/W NCF DSCRs(1)(2)(3)
Weighted Averages | ||||||||||||||||||
Stated | ||||||||||||||||||
Number of | Aggregate | % of Initial | Remaining | Cut-off | LTV Ratio at | |||||||||||||
Mortgage | Cut-off Date | Outstanding | Mortgage | Term | U/W NCF | Date LTV | Maturity or | |||||||||||
Range of U/W NCF DSCRs | Loans | Balance | Pool Balance | Rate | (Mos.) | DSCR | Ratio(4) | ARD(4) | ||||||||||
1.25x – 1.39x | 22 | $ | 364,968,134 | 39.2% | 4.6971% | 109 | 1.31x | 70.7% | 64.0% | |||||||||
1.40x – 1.44x | 9 | $ | 85,566,360 | 9.2% | 4.5813% | 119 | 1.43x | 71.0% | 60.9% | |||||||||
1.45x – 1.54x | 5 | $ | 81,528,105 | 8.8% | 4.3857% | 118 | 1.52x | 68.6% | 59.4% | |||||||||
1.55x – 1.99x | 20 | $ | 251,730,775 | 27.0% | 4.4455% | 115 | 1.75x | 66.2% | 55.2% | |||||||||
2.00x – 2.49x | 5 | $ | 40,743,755 | 4.4% | 4.7156% | 119 | 2.22x | 63.0% | 57.5% | |||||||||
2.50x – 2.99x | 1 | $ | 3,800,000 | 0.4% | 4.5200% | 120 | 2.57x | 55.9% | 55.9% | |||||||||
3.00x – 3.89x | 3 | $ | 103,280,263 | 11.1% | 3.7737% | 119 | 3.67x | 40.2% | 38.8% | |||||||||
Total/Weighted Average | 65 | $ | 931,617,393 | 100.0% | 4.4889% | 114 | 1.77x | 65.5% | 57.8% | |||||||||
Original Terms to Maturity or ARD in Months(1)(2)(3) | ||||||||||||||||||
Weighted Averages | ||||||||||||||||||
Number of | Aggregate | % of Initial | Stated | Cut-off | LTV Ratio at | |||||||||||||
Original Terms to Maturity or | Mortgage | Cut-off Date | Outstanding | Mortgage | Remaining | U/W NCF | Date LTV | Maturity or | ||||||||||
ARD in Months | Loans | Balance | Pool Balance | Rate | Term (Mos.) | DSCR | Ratio(4) | ARD(4) | ||||||||||
60 | 3 | $ | 74,750,000 | 8.0% | 4.7138% | 59 | 1.44x | 67.3% | 63.6% | |||||||||
120 | 62 | $ | 856,867,393 | 92.0% | 4.4693% | 119 | 1.79x | 65.4% | 57.3% | |||||||||
Total/Weighted Average | 65 | $ | 931,617,393 | 100.0% | 4.4889% | 114 | 1.77x | 65.5% | 57.8% | |||||||||
Range of Remaining Terms to Maturity or ARD in Months(1)(2)(3) | ||||||||||||||||||
Weighted Averages | ||||||||||||||||||
Number of | Aggregate | % of Initial | Stated | Cut-off | LTV Ratio at | |||||||||||||
Range of Remaining Terms to | Mortgage | Cut-off Date | Outstanding | Mortgage | Remaining | U/W NCF | Date LTV | Maturity or | ||||||||||
Maturity or ARD in Months | Loans | Balance | Pool Balance | Rate | Term (Mos.) | DSCR | Ratio(4) | ARD(4) | ||||||||||
58 - 60 | 3 | $ | 74,750,000 | 8.0% | 4.7138% | 59 | 1.44x | 67.3% | 63.6% | |||||||||
117 - 120 | 62 | $ | 856,867,393 | 92.0% | 4.4693% | 119 | 1.79x | 65.4% | 57.3% | |||||||||
Total/Weighted Average | 65 | $ | 931,617,393 | 100.0% | 4.4889% | 114 | 1.77x | 65.5% | 57.8% | |||||||||
Range of U/W NOI Debt Yields(1)(2)(3) | ||||||||||||||||||
Weighted Averages | ||||||||||||||||||
Number of | Aggregate | % of Initial | Stated | Cut-off | LTV Ratio at | |||||||||||||
Mortgage | Cut-off Date | Outstanding | Mortgage | Remaining | U/W NCF | Date LTV | Maturity or | |||||||||||
Range of U/W NOI Debt Yields | Loans | Balance | Pool Balance | Rate | Term (Mos.) | DSCR | Ratio(4) | ARD(4) | ||||||||||
6.7% - 8.9% | 18 | $ | 313,908,669 | 33.7% | 4.6917% | 108 | 1.31x | 70.1% | 64.3% | |||||||||
9.0% - 9.9% | 16 | $ | 158,099,878 | 17.0% | 4.6100% | 119 | 1.41x | 72.1% | 61.7% | |||||||||
10.0% - 12.4% | 18 | $ | 255,005,897 | 27.4% | 4.3865% | 119 | 1.69x | 65.7% | 56.1% | |||||||||
12.5% - 14.9% | 8 | $ | 154,131,872 | 16.5% | 4.1473% | 113 | 2.82x | 51.1% | 45.3% | |||||||||
15.0% - 20.2% | 5 | $ | 50,471,076 | 5.4% | 4.4095% | 119 | 2.88x | 59.6% | 52.0% | |||||||||
Total/Weighted Average | 65 | $ | 931,617,393 | 100.0% | 4.4889% | 114 | 1.77x | 65.5% | 57.8% |
A-2-3 |
Amortization Type(1)(2)(3)
Weighted Averages | ||||||||||||||||||
Number of | Aggregate | % of Initial | Stated | Cut-off | LTV Ratio at | |||||||||||||
Mortgage | Cut-off Date | Outstanding | Mortgage | Remaining | U/W NCF | Date LTV | Maturity or | |||||||||||
Amortization Type | Loans | Balance | Pool Balance | Rate | Term (Mos.) | DSCR | Ratio(4) | ARD(4) | ||||||||||
Interest Only, then Amortizing | 28 | $ | 403,141,300 | 43.3% | 4.5609% | 110 | 1.43x | 70.1% | 62.5% | |||||||||
Amortizing Balloon | 27 | $ | 315,682,093 | 33.9% | 4.5053% | 116 | 1.71x | 66.8% | 54.2% | |||||||||
Interest Only | 8 | $ | 192,319,000 | 20.6% | 4.3142% | 119 | 2.60x | 53.5% | 53.5% | |||||||||
Interest Only, then Amortizing, ARD | 2 | $ | 20,475,000 | 2.2% | 4.4600% | 120 | 1.36x | 69.3% | 60.6% | |||||||||
Total/Weighted Average | 65 | $ | 931,617,393 | 100.0% | 4.4889% | 114 | 1.77x | 65.5% | 57.8% |
A-2-4 |
FOOTNOTES TO ANNEX A-2
1) | In the case of a Mortgage Loan that provides for an initial interest-only period and for scheduled amortization payments thereafter, U/W NCF DSCR for such Mortgage Loan was calculated based on the debt service for the first 12 amortizing payments. In the case of the Atlanta Multifamily Portfolio Mortgage Loan, representing approximately 4.8% of the initial outstanding pool balance, which, following an initial interest only period of 18 months, amortizes on a nonstandard amortization schedule attached to the free writing prospectus as Annex H, the U/W NCF DSCR was calculated based on the debt service for the first 12 months of amortizing payments. |
2) | With respect to the 11 Madison Avenue Mortgage Loan and NMS Los Angeles Multifamily Portfolio Mortgage Loan, the Cut-off Date LTV Ratio, LTV Ratio at Maturity or ARD, U/W NOI Debt Yields, U/W NCF DSCRs and Cut-off Date Balance per # of Units, Pads, Rooms, NRA or Spaces calculations include all relatedpari passucompanion loans and exclude any subordinate companion loans. |
3) | For the ARD Loans, the Original Term to Maturity or ARD, Remaining Term to Maturity or ARD and LTV Ratio at Maturity or ARD are through the related Anticipated Repayment Date. |
4) | With respect to 3 Mortgage Loans, collectively representing 17.8% of the initial outstanding pool balance, the Cut-off Date LTV Ratio and LTV Ratio at Maturity or ARD have in certain cases been calculated based on the “as portfolio” appraised value, which reflects a premium attributed to the aggregate value of the portfolio as a whole.In the case of 2 Mortgage Loans, collectively representing approximately 6.4% of the initial outstanding pool balance, theCut-off Date LTV Ratio and LTV Ratio at Maturity or ARDhave been calculated based on an “as complete” or “as renovated” value for the related mortgaged properties. For additional information, see the Footnotes to Annex A-1. |
5) | Because this table presents information relating to the Mortgaged Properties and not the Mortgage Loans, the information for Mortgaged Properties that relate to Mortgage Loans secured by more than one Mortgaged Property is based on Allocated Loan Amounts. |
6) | Includes anchored, single tenant and shadow anchored properties. |
7) | Northern California properties have a zip code greater than 93600. Southern California properties have a zip code less than or equal to 93600. |
A-2-5 |
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
ANNEX A-3
CLASS A-SB PLANNED PRINCIPAL BALANCE SCHEDULE
Period | Balance($) | Period | Balance($) | |||||
1 | 62,544,000.00 | 60 | 62,543,604.84 | |||||
2 | 62,544,000.00 | 61 | 61,647,136.26 | |||||
3 | 62,544,000.00 | 62 | 60,673,840.29 | |||||
4 | 62,544,000.00 | 63 | 59,770,090.38 | |||||
5 | 62,544,000.00 | 64 | 58,862,821.51 | |||||
6 | 62,544,000.00 | 65 | 57,733,058.64 | |||||
7 | 62,544,000.00 | 66 | 56,817,854.78 | |||||
8 | 62,544,000.00 | 67 | 55,826,357.11 | |||||
9 | 62,544,000.00 | 68 | 54,903,727.70 | |||||
10 | 62,544,000.00 | 69 | 53,905,015.95 | |||||
11 | 62,544,000.00 | 70 | 52,974,903.84 | |||||
12 | 62,544,000.00 | 71 | 52,041,169.83 | |||||
13 | 62,544,000.00 | 72 | 50,972,024.94 | |||||
14 | 62,544,000.00 | 73 | 49,976,159.49 | |||||
15 | 62,544,000.00 | 74 | 48,899,248.90 | |||||
16 | 62,544,000.00 | 75 | 47,895,328.64 | |||||
17 | 62,544,000.00 | 76 | 46,887,507.51 | |||||
18 | 62,544,000.00 | 77 | 45,645,404.89 | |||||
19 | 62,544,000.00 | 78 | 44,628,838.68 | |||||
20 | 62,544,000.00 | 79 | 43,531,817.04 | |||||
21 | 62,544,000.00 | 80 | 42,507,037.02 | |||||
22 | 62,544,000.00 | 81 | 41,402,035.57 | |||||
23 | 62,544,000.00 | 82 | 40,368,978.65 | |||||
24 | 62,544,000.00 | 83 | 39,331,907.34 | |||||
25 | 62,544,000.00 | 84 | 38,214,964.75 | |||||
26 | 62,544,000.00 | 85 | 37,169,522.13 | |||||
27 | 62,544,000.00 | 86 | 36,044,446.71 | |||||
28 | 62,544,000.00 | 87 | 34,990,568.49 | |||||
29 | 62,544,000.00 | 88 | 33,932,594.75 | |||||
30 | 62,544,000.00 | 89 | 32,645,016.51 | |||||
31 | 62,544,000.00 | 90 | 31,577,925.12 | |||||
32 | 62,544,000.00 | 91 | 30,431,817.65 | |||||
33 | 62,544,000.00 | 92 | 29,356,124.35 | |||||
34 | 62,544,000.00 | 93 | 28,201,660.02 | |||||
35 | 62,544,000.00 | 94 | 27,117,298.74 | |||||
36 | 62,544,000.00 | 95 | 26,028,723.16 | |||||
37 | 62,544,000.00 | 96 | 24,861,743.54 | |||||
38 | 62,544,000.00 | 97 | 23,764,401.02 | |||||
39 | 62,544,000.00 | 98 | 22,588,904.20 | |||||
40 | 62,544,000.00 | 99 | 21,482,727.39 | |||||
41 | 62,544,000.00 | 100 | 20,372,251.29 | |||||
42 | 62,544,000.00 | 101 | 19,110,530.90 | |||||
43 | 62,544,000.00 | 102 | 17,990,833.34 | |||||
44 | 62,544,000.00 | 103 | 16,793,618.31 | |||||
45 | 62,544,000.00 | 104 | 15,664,914.72 | |||||
46 | 62,544,000.00 | 105 | 14,458,950.21 | |||||
47 | 62,544,000.00 | 106 | 13,321,171.40 | |||||
48 | 62,544,000.00 | 107 | 12,178,970.14 | |||||
49 | 62,544,000.00 | 108 | 10,959,892.48 | |||||
50 | 62,544,000.00 | 109 | 9,808,512.30 | |||||
51 | 62,544,000.00 | 110 | 8,580,517.20 | |||||
52 | 62,544,000.00 | 111 | 7,419,887.59 | |||||
53 | 62,544,000.00 | 112 | 6,254,746.48 | |||||
54 | 62,544,000.00 | 113 | 4,869,994.73 | |||||
55 | 62,544,000.00 | 114 | 3,694,939.72 | |||||
56 | 62,544,000.00 | 115 | 2,443,944.18 | |||||
57 | 62,544,000.00 | 116 | 1,259,457.83 | |||||
58 | 62,544,000.00 | 117 and thereafter | 0 | |||||
59 | 62,544,000.00 |
A-3-1 |
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
ANNEX B
DESCRIPTION OF THE TOP 20 MORTGAGE LOANS
B-1 |
11 Madison Avenue New York, NY 10010 | Collateral Asset Summary – Loan No. 1 11 Madison Avenue | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $70,000,000 3.89x 14.3% |
B-2 |
11 Madison Avenue New York, NY 10010 | Collateral Asset Summary – Loan No. 1 11 Madison Avenue | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $70,000,000 3.89x 14.3% |
Mortgage Loan Information | |
Loan Seller: | GACC |
Loan Purpose: | Acquisition |
Credit Assessment (Fitch/DBRS/Moody’s): | AAA/AA(low)/A2 |
Sponsor: | SL Green Realty Corp. |
Borrower: | 11 Madison Avenue Owner LLC; 11 Madison Avenue Owner 2 LLC; 11 Madison Avenue Owner 3 LLC; 11 Madison Avenue Owner 4 LLC; 11 Madison Avenue Owner 5 LLC; 11 Madison Avenue Owner 6 LLC; 11 Madison EAT Lender LLC |
Original Balance(1): | $70,000,000 |
Cut-off Date Balance(1): | $70,000,000 |
% by Initial UPB: | 7.5% |
Interest Rate: | 3.5602% |
Payment Date: | 6thof each month |
First Payment Date: | October 6, 2015 |
Maturity Date: | September 6, 2025 |
Amortization: | Interest Only |
Additional Debt(1): | $694,330,000Pari Passu Debt; $310,670,000 Subordinate Secured Debt; $325,000,000 Mezzanine Debt |
Call Protection(2): | L(25), D(88), O(7) |
Lockbox / Cash Management: | Hard / Springing |
Reserves(3) | ||
Initial | Monthly | |
Taxes: | $0 | Springing |
Insurance: | $0 | Springing |
Replacement: | $0 | Springing |
TI/LC: | $81,152,102 | Springing |
Credit Suisse Sublease(4): | $36,500,000 | $0 |
Sony Free Rent: | $18,847,898 | $0 |
Endorsement: | $1,000 | $0 |
Financial Information | ||
Senior Notes(5) | Total Debt(6) | |
Cut-off Date Balance / Sq. Ft.: | $334 | $613 |
Balloon Balance / Sq. Ft.: | $334 | $613 |
Cut-off Date LTV: | 32.5% | 59.6% |
Balloon LTV: | 32.5% | 59.6% |
Underwritten NOI DSCR: | 3.97x | 2.01x |
Underwritten NCF DSCR: | 3.89x | 1.97x |
Underwritten NOI Debt Yield: | 14.3% | 7.8% |
Underwritten NCF Debt Yield: | 14.1% | 7.7% |
Underwritten NOI Debt Yield at Balloon: | 14.3% | 7.8% |
Underwritten NCF Debt Yield at Balloon: | 14.1% | 7.7% |
Property Information | |
Single Asset / Portfolio: | Single Asset |
Property Type: | CBD Office |
Collateral: | Fee Simple/Leasehold |
Location: | New York, NY |
Year Built / Renovated: | 1932-1950 / 1994-1997, 2015 |
Total Sq. Ft.: | 2,285,043 |
Property Management: | SL Green Management LLC |
Underwritten NOI(7): | $109,493,598 |
Underwritten NCF: | $107,431,283 |
Appraised Value: | $2,350,000,000 |
Appraisal Date: | July 1, 2015 |
Historical NOI | |
Most Recent NOI(7): | $46,389,392 (T-12 May 31, 2015) |
2014 NOI: | $46,705,749 (December 31, 2014) |
2013 NOI: | $47,051,047 (December 31, 2013) |
2012 NOI: | $52,397,490 (December 31, 2012) |
Historical Occupancy | |
Most Recent Occupancy: | 97.8% (August 11, 2015) |
2014 Occupancy: | 94.0% (December 31, 2014) |
2013 Occupancy: | 87.5% (December 31, 2013) |
2012 Occupancy: | 99.1% (December 31, 2012) |
(1) | The Original Balance and Cut-off Date Balance of $70.0 million represents the senior non-controlling Note A-1-C2 which, together with the remainingpari passu Senior Notes (defined herein) with an aggregate original principal balance of $764.33 million and the Junior Notes (defined herein) with an aggregate original principal balance of $310.67 million, comprises the 11 Madison Avenue Loan Combination with an aggregate original principal balance of $1.075 billion. For additional information regarding thepari passu Senior Notes and Junior Notes, see “The Loan” and “Current Mezzanine or Subordinate Indebtedness” herein. |
(2) | The lockout period will be at least 25 payment dates beginning with and including the first payment date of October 6, 2015. Defeasance of the full $1.075 billion 11 Madison Avenue Loan Combination is permitted on or after the date that is the earlier to occur of (i) two years after the closing date of the securitization that includes the lastpari passu note to be securitized and (ii) August 18, 2018. The assumed lockout period of 25 payments is based on the expected COMM 2015-CCRE27 securitization closing date in October 2015. The actual lockout period may be longer. |
(3) | See “Initial Reserves” and “Ongoing Reserves” herein. |
(4) | The borrower deposited an additional $2,500,000 associated with outstanding sublease payments in relation to the Credit Suisse Sublease which were subsequently paid at closing. See “Initial Reserves” and “Ongoing Reserves” herein. |
(5) | DSCR, LTV, Debt Yield and Balance / Sq. Ft. calculations are based on the Senior Notes only, which have an aggregate principal balance of $764.33 million. |
(6) | DSCR, LTV, Debt Yield and Balance / Sq. Ft. calculations are based on the total debt in the amount of $1.4 billion. |
(7) | The increase in Underwritten NOI over Most Recent NOI is due to the lender underwriting Credit Suisse’s higher contractual base rent beginning in 2017, for all floors except 11 and 13 and 8,770 sq. ft. of storage space, for which the in-place rent is reflected. The lender underwriting also includes WME’s expansion onto a portion of the 17thfloor, which occurred in August 2015. |
B-3 |
11 Madison Avenue New York, NY 10010 | Collateral Asset Summary – Loan No. 1 11 Madison Avenue | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $70,000,000 3.89x 14.3% |
Tenant Summary | ||||||||
Tenant | Ratings (Fitch/Moody’s/S&P)(1) | Net Rentable Area (Sq. Ft.) | % of Net Rentable Area | U/W Base Rent PSF | % of Total U/W | Lease Expiration | ||
Credit Suisse(2)(3) | A/A1/A | 1,079,655 | 47.2% | $63.98 | 46.7% | 5/31/2037 | ||
Credit Suisse (Option)(4) | A/A1/A | 186,396 | 8.2% | $26.18 | 3.3% | 5/31/2017 | ||
Sony(5) | BB-/Ba1/BBB- | 578,791 | 25.3% | $73.75 | 28.9% | 1/31/2031 | ||
Yelp | NR/NR/NR | 152,232 | 6.7% | $85.00 | 8.7% | 4/30/2025 | ||
WME | NR/NR/NR | 103,426 | 4.5% | $85.02 | 5.9% | 9/30/2030 | ||
Young & Rubicam, Inc. | NR/NR/NR | 99,107 | 4.3% | $74.65 | 5.0% | 3/30/2019 | ||
Fidelity Brokerage Company | NR/NR/NR | 21,999 | 1.0% | $76.59 | 1.1% | 12/31/2028 | ||
Eleven Madison Park | NR/NR/NR | 12,000 | 0.5% | $27.42 | 0.2% | 12/31/2017 | ||
Subtotal / Wtd. Avg. | 2,233,606 | 97.7% | $66.16 | 99.9% | ||||
Other(6) | 572 | 0.0% | $230.04 | 0.1% | ||||
Total / Wtd. Avg. Occupied | 2,234,178 | 97.8% | $66.21 | 100.0% | ||||
Vacant | 50,865 | 2.2% | ||||||
Total / Wtd. Avg. | 2,285,043 | 100.0% | ||||||
(1) | Certain ratings are those of the parent company whether or not the parent company guarantees the lease. |
(2) | Credit Suisse pays $73.81 PSF for floors 3-10, $50.00 PSF for the second floor office space and $32.85 PSF for approximately 217,386 sq. ft. of concourse and lobby/storage space. |
(3) | Credit Suisse has three partial termination options for one floor each, exercisable 5, 10 and 15 years into the lease term, upon 15 months’ written notice and subject to a termination fee. |
(4) | Consists of space leased at below market rents on floors 11 and 13 as well as a portion of the first floor storage space. Credit Suisse has an option on this space to extend through 2037 at $73.81 PSF, which must be exercised by April 1, 2016. |
(5) | Sony is not yet in occupancy and is not yet paying rent. It is anticipated that Sony will take occupancy of its space beginning in February 2016 and will commence paying rent following the expiration of the free rent periods for its respective premises. In connection with these free rent periods, the borrowers reserved $18,847,898 with the lender at loan closing. |
(6) | Consists of Martin’s News & Sundry, which pays $77.19 PSF for 570 sq. ft., as well as two antenna / satellite tenants paying $12,000 PSF and $75,584 PSF respectively. |
Lease Rollover Schedule(1) | |||||||||||||||||
Year | # of Leases Expiring | Total Expiring Sq. Ft. | % of Total Sq. Ft. Expiring | Cumulative Sq. Ft. Expiring | Cumulative % of Sq. Ft. Expiring | Annual U/W Base Rent PSF | % U/W Base Rent Rolling | Cumulative % of U/W Base Rent | |||||||||
MTM | 0 | 0 | 0.0% | 0 | 0.0% | $0.00 | 0.0% | 0.0% | |||||||||
2015 | 0 | 0 | 0.0% | 0 | 0.0% | $0.00 | 0.0% | 0.0% | |||||||||
2016 | 2 | 2 | 0.0% | 2 | 0.0% | $43,792.00 | 0.1% | 0.1% | |||||||||
2017 | 3 | 198,966 | 8.7% | 198,968 | 8.7% | $26.40 | 3.6% | 3.6% | |||||||||
2018 | 0 | 0 | 0.0% | 198,968 | 8.7% | $0.00 | 0.0% | 3.6% | |||||||||
2019 | 1 | 99,107 | 4.3% | 298,075 | 13.0% | $74.65 | 5.0% | 8.6% | |||||||||
2020 | 0 | 0 | 0.0% | 298,075 | 13.0% | $0.00 | 0.0% | 8.6% | |||||||||
2021 | 0 | 0 | 0.0% | 298,075 | 13.0% | $0.00 | 0.0% | 8.6% | |||||||||
2022 | 0 | 0 | 0.0% | 298,075 | 13.0% | $0.00 | 0.0% | 8.6% | |||||||||
2023 | 0 | 0 | 0.0% | 298,075 | 13.0% | $0.00 | 0.0% | 8.6% | |||||||||
2024 | 0 | 0 | 0.0% | 298,075 | 13.0% | $0.00 | 0.0% | 8.6% | |||||||||
2025 | 1 | 152,232 | 6.7% | 450,307 | 19.7% | $85.00 | 8.7% | 17.4% | |||||||||
Thereafter | 4 | 1,783,871 | 78.1% | 2,234,178 | 97.8% | $68.52 | 82.6% | 100.0% | |||||||||
Vacant | NAP | 50,865 | 2.2% | 2,285,043 | 100.0% | NAP | NAP | ||||||||||
Total / Wtd. Avg. | 11 | 2,285,043 | 100.0% | $66.21 | 100.0% |
(1) | Certain tenants have lease termination options that may become exercisable prior to the originally stated expiration date of the tenant lease that are not considered in the lease rollover schedule. |
B-4 |
11 Madison Avenue New York, NY 10010 | Collateral Asset Summary – Loan No. 1 11 Madison Avenue | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $70,000,000 3.89x 14.3% |
The Loan. The 11 Madison Avenue loan (the “11 Madison Avenue Loan”) is a fixed rate loan secured by the borrowers’ fee simple interests in 27 condominium units and leasehold interests (with the reversionary right to the fee simple interests related to such leasehold interests) in nine condominium units of the borrowers in a 29-story Class A office building consisting of 2,285,043 sq. ft. and located at 11 Madison Avenue in New York, New York (the “Property” or the “11 Madison Avenue Property”) with an original principal balance of $70.0 million. The 11 Madison Avenue Loan is comprised of the non-controlling Note A-1-C2 of a $1.075 billion whole loan that is evidenced by 19 promissory notes: 16 senior notes with an aggregate principal balance of $764,330,000 (the “Senior Notes”) and three junior notes with an aggregate principal balance of $310,670,000 (the “Junior Notes” and together with the Senior Notes the “11 Madison Avenue Loan Combination”). Only the $70.0 million non-controlling Note A-1-C2 will be included in the COMM 2015-CCRE27 trust. Nine of the Senior Notes with an aggregate principal balance of $397,530,000 along with the three Junior Notes are being contributed to the MAD 2015-11MD trust. The A-1-C1 Note is expected to be contributed to the COMM 2015-CCRE26 securitization and the remaining Senior Notes are held by GACC, Morgan Stanley Bank, N.A. (“MSBNA”) or Wells Fargo Bank, National Association (“Wells Fargo Bank”) as summarized in the chart below.
The relationship between the holders of the Senior Notes and the Junior Notes will be governed by a co-lender agreement as described under“Description of the Mortgage Pool – Loan Combinations – The 11 Madison Avenue Loan Combination” in the accompanying Free Writing Prospectus.
Mortgage Loan Combination Note Summary | |||||
Note | Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece | |
A-1-C2 | $70,000,000 | $70,000,000 | COMM 2015-CCRE27 | No | |
A-1-S1, A-1-S2, A-1-S3, A-2-S1, A-2-S2, A-2-S3, A-3-S1, A-3-S2, A-3-S3 | $397,530,000 | $397,530,000 | MAD 2015-11MD | No | |
B-1-S, B-2-S, B-3-S | $310,670,000 | $310,670,000 | MAD 2015-11MD | Yes(2) | |
A-1-C1, A-1-C3(1) | $139,600,000 | $139,600,000 | COMM 2015-CCRE26 /GACC | No | |
A-2-C1, A-2-C2 | $91,700,000 | $91,700,000 | MSBNA | No | |
A-3-C1, A-3-C2 | $65,500,000 | $65,500,000 | Wells Fargo Bank | No | |
Total | $1,075,000,000 | $1,075,000,000 |
(1) | The A-1-C1 Note is expected to be contributed to the COMM 2015-CCRE26 securitization. |
(2) | So long as the Junior Notes are included in the MAD 2015-11MD trust, there will be no controlling class or directing holder with respect to the 11 Madison Avenue Loan Combination. |
The 11 Madison Avenue Loan Combination has a 10-year term and pays interest only for the term of the loan. The 11 Madison Avenue Loan Combination accrues interest at a fixed rate equal to 3.5602% and has a cut-off date balance of $70.0 million. Loan proceeds, in addition to approximately $1.1 billion of cash equity from the sponsor, were used to purchase the 11 Madison Avenue Property for approximately $2.3 billion, pay approximately $139.6 million in costs associated with lease-stipulated improvements to the Property, fund upfront reserves of $100.0 million and pay transaction costs of approximately $22.7 million. Based on the appraised value of $2.35 billion as of July 1, 2015, the cut-off date LTV for the Senior Notes is 32.5%. The most recent prior financing of the 11 Madison Avenue Property was included in the CSMC 2006-C4 transaction.
Sources and Uses | ||||||
Sources | Proceeds | % of Total | Uses(1) | Proceeds | % of Total | |
Mortgage Loan | $1,075,000,000 | 42.2% | Purchase Price(2) | $2,285,000,000 | 89.7% | |
First Mezzanine Loan | $150,000,000 | 5.9% | Leasing/Base Building Costs | $139,562,788 | 5.5% | |
Second Mezzanine Loan | $175,000,000 | 6.9% | Lease Costs Funds | $81,152,102 | 3.2% | |
Sponsor Equity | $1,147,232,451 | 45.0% | Sony Free Rent Reserve | $18,847,898 | 0.7% | |
Closing Costs | $22,669,663 | 0.9% | ||||
Total Sources | $2,547,232,451 | 100.0% | Total Uses | $2,547,232,451 | 100.0% |
(1) | SLG also delivered a guaranty at loan closing in the amount of $59,060,332 to partially collateralize leasing obligations at the Property. |
(2) | Purchase Price includes the $39,000,000 CS Sublease Reserve, $2,500,000 of which was paid down at closing. |
The Borrower / Sponsor. The borrowers, 11 Madison Avenue Owner LLC, 11 Madison Avenue Owner 2 LLC, 11 Madison Avenue Owner 3 LLC, 11 Madison Avenue Owner 4 LLC, 11 Madison Avenue Owner 5 LLC and 11 Madison Avenue Owner 6 LLC (collectively the “TIC Owners”) and 11 Madison EAT Lender LLC, are each a single purpose Delaware limited liability company structured to be bankruptcy-remote with two independent directors in its organizational structure. Each of the TIC Owners is a tenant-in-common owner of the Property who collectively own 100% of the fee simple and/or leasehold interest in the Property and have subsequently master leased the Property to 11 Madison EAT Lender. The sponsor of the borrowers and the non-recourse carveout guarantor is SL Green
B-5 |
11 Madison Avenue New York, NY 10010 | Collateral Asset Summary – Loan No. 1 11 Madison Avenue | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $70,000,000 3.89x 14.3% |
Realty Corp. (“SLG”). SLG also delivered a guaranty at loan closing in the amount of $59,060,332 to partially collateralize leasing obligations at the 11 Madison Avenue Property.
SLG (rated BBB-/Baa3/BB+ by Fitch/Moody’s/S&P), an S&P 500 company and New York City’s largest office landlord, is a fully integrated REIT that is focused primarily on acquiring, managing, and maximizing value of Manhattan commercial properties. As of June 30, 2015, SLG held interests in 120 Manhattan buildings totaling 44.1 million sq. ft. This included ownership interests in 29.0 million sq. ft. of commercial buildings and debt and preferred equity investments secured by 15.1 million sq. ft. of buildings. In addition to its Manhattan investments, SLG held ownership interests in 37 suburban buildings totaling 5.9 million sq. ft. in Brooklyn, Long Island, Westchester County, Connecticut and New Jersey.
As of June 30, 2015, SLG reported total assets of approximately $17.3 billion, including cash and cash equivalents of approximately $215.9 million. For fiscal year 2014, SLG reported total revenues of $1.5 billion, an increase of 10.9% over fiscal year 2013 revenues of approximately $1.4 billion. As of June 30, 2015, SLG reported a market capitalization of approximately $10.7 billion, and, over a 52-week period, its stock price ranged from $109.45 to $131.99.
The Property.The 11 Madison Avenue Property is a 29-story, 2,285,043 sq. ft., Class A office tower located directly east of Manhattan’s Madison Square Park. The Property enjoys full-block frontage on Madison Square Park and occupies an entire city “super block” between Park Avenue South, Madison Avenue, and East 24th and East 25th Streets. Developed by MetLife as part of its headquarters complex, the Property was constructed in three phases beginning in 1932: from 1932 to 1938, half of the building was built along Park Avenue between 24th and 25th Street; from 1938 to 1941, the northwest section of the building was completed; and from 1947 to 1950, the final phase, the southwest quadrant, was completed. The 11 Madison Avenue Property was built to an international headquarters quality standard and features an art deco design. The Property has an Alabama limestone exterior and four vaulted entrances with terrazzo floors at each corner that lead to a double-height marble lobby. Both the floors and walls are comprised of Italian Cremo marble, Tennessee granite and travertine. Due to the Property’s unique and high quality construction, the 11 Madison Avenue Property was added to the National Register of Historic Places in 1996.
Between 1994 and 1997, Credit Suisse and MetLife collectively modernized the Property at a cost exceeding $700.0 million. During that time, MetLife invested $400.0 million in technological enhancements at the Property and established the Property as a sought after headquarter location due to its modern building systems, large floor plates, landmark status, and amenity-rich park-fronting location. Furthermore, during that time, Credit Suisse invested an additional $300.0 million to create its North American headquarters, adding dedicated emergency generators, supplemental HVAC systems, its own UPS facility (additionally upgraded for $30.0 million in 2011), and other miscellaneous electrical upgrades. The Property is currently undergoing a number of base building projects totaling approximately $86.0 million, which, when combined with Sony’s and Credit Suisse’s tenant improvement and leasing commissions, will result in over $279.8 million of capital invested into the Property between 2015 and 2018. The capital is expected to be invested to modernize and update the Property to today’s headquarters standard, including a new BMS system, elevator modernization, chiller plant/cooling towers upgrade, increased ventilation capacity, private entrance and sky lobby for Sony, new 28th floor window line and a new usable rooftop garden.
The Property is 97.8% leased as of August 11, 2015 to 10 tenants including Credit Suisse (rated A/A1/A by Fitch/Moody’s/S&P) and Sony (rated BB-/Ba1/BBB- by Fitch/Moody’s/S&P). The Property has served as the North American headquarters for Credit Suisse since 1996 and is expected to be the U.S. headquarters for Sony starting in 2016. Credit Suisse recently renewed its lease at the Property through May 31, 2037 for 1,079,655 sq. ft. (which includes 862,269 sq. ft. of office space, 203,863 sq. ft. of concourse space and 13,523 sq. ft. of lobby/storage space. Credit Suisse currently occupies an additional 177,626 sq. ft. of office space and 8,770 sq. ft. of storage space that will expire in 2017. Credit Suisse has the option to extend its space on these floors through 2037. Sony is expected to relocate its headquarters to the Property from its previous location at 550 Madison Avenue in early 2016, having signed a lease through January 31, 2031 for 578,791 sq. ft. (548,113 sq. ft. of office space on the top 11 floors of the Property, 17,555 sq. ft. of retail space and 13,123 sq. ft. of storage space). Other tenants include Yelp, Young & Rubicam, Inc., William Morris Endeavor (“WME”) and the Eleven Madison Park restaurant. Credit Suisse and Sony will occupy in the aggregate 1,844,842 sq. ft. (80.7% of NRA) at the Property.
Located in Manhattan’s Midtown South neighborhood, the Property has direct access to the number 6 subway line which, along with the nearby N, R, Q, F and M lines, provides connections from the Upper East Side and Grand Central to Union Square, Downtown Manhattan and Brooklyn. Additionally, the Property is within walking distance of the Flatiron, Gramercy and Chelsea neighborhoods.
Environmental Matters.The Phase I environmental report dated April 30, 2015 recommended the continued implementation of an asbestos operation and maintenance plan at the Property, which is currently in place.
B-6 |
11 Madison Avenue New York, NY 10010 | Collateral Asset Summary – Loan No. 1 11 Madison Avenue | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $70,000,000 3.89x 14.3% |
Major Tenants.
Credit Suisse (1,266,051 sq. ft.; 55.4% of NRA; 50.0% of U/W Base Rent; A/A1/A by Fitch/Moody’s/S&P) Credit Suisse is a multinational financial services company based in Zurich, Switzerland. Credit Suisse is organized as a stock corporation with four divisions: Investment Banking, Private Banking, Asset Management, and a Shared Services Group. Operating out of global headquarters in Zurich, London and New York, Credit Suisse has 45,800 employees in 344 branches and offices in over 50 countries. Credit Suisse has used the Property as its North American headquarters since 1996. In 2014, Credit Suisse vacated a portion of its space, which it subleased to the borrowers to allow for Sony to take approximately 548,000 sq. ft. of office space on the Property’s top 11 floors. Credit Suisse currently occupies 1,266,051 sq. ft., which includes its office space on floors 2-11 and 13 as well as its space in the basement, the lobby and its concourse space.
Credit Suisse recently executed a new lease for 862,269 sq. ft. commencing in June 2017 through May 2037 for floors 2 through 10, as well as 217,386 sq. ft. of concourse space, mechanical and lobby space. Credit Suisse has two, 10-year extension options for the space that expires in 2037 as well as three partial termination options for one floor each, which are exercisable 5, 10 and 15 years into the lease term, upon 15 months written notice and subject to a termination fee as described in the lease documents. Credit Suisse’s space on floors 11 and 13 expires in 2017 (along with a small portion of storage space on the first floor) and the tenant has the option to extend these floors through 2037 at $73.81 PSF. This option must be exercised by April 1, 2016. Credit Suisse currently pays a blended base rent of $26.18 PSF for these floors, which is significantly below current market rents as the leases for these floors were signed over 15 years ago.
Sony (578,791 sq. ft.; 25.3% of NRA; 28.9% of U/W Base Rent; BB-/Ba1/BBB- by Fitch/Moody’s/S&P)Sony is a multinational electronics and entertainment company based in Tokyo, Japan. The company employs nearly 140,000 people worldwide and operates in four business segments: SONY Corporation (SONY Electronics in the US), SONY Pictures Entertainment, SONY Mobile Communications, and SONY Financial.
In 2015, Sony signed a 16-year lease at the Property for the top 11 floors, as well as retail space on the ground floor and mezzanine level. The Property is expected to serve as its U.S. headquarters as well as house its flagship store, the “SONY Experience.” Sony has made a significant financial commitment to the space, and is expected to spend approximately $150.0 million to complete its build-out, in addition to a TI allowance from the borrowers. Sony is leasing 548,113 sq. ft. in the top floors of the building (19-29) for its office space at a base rent of $74.00 PSF. Additionally, Sony is leasing 17,555 sq. ft. of retail space for its “SONY Experience” store, the ground floor of which has a base rent of $225.00 PSF and 13,123 sq. ft. of storage space. Sony has two successive extension options for all of its space, the first for 10 years and the second for either 5 or 10 years. Sony has not yet taken occupancy of its space at the Property as its space is still being built out. Substantially all of the Sony space is currently leased to Credit Suisse, which has subleased such space to the borrowers, which has in turn leased such space to Sony (which converts to a direct lease upon expiration of the Credit Suisse lease for that space in 2017). Sony is entitled to free rent periods with respect to various portions of its space following the related lease commencement.
The Market.The Property is located in the Midtown South office market - Manhattan’s smallest office market - housing 66.6 million sq. ft. of space. The market has a total of 35 Class A buildings totaling 17.3 million sq. ft. As of Q1 2015, the Midtown South office market exhibited a vacancy rate of 7.0% and a rental rate of $63.28 PSF. The Property is one of seven trophy office buildings in the Midtown South office market.
The Midtown South office market is geographically segmented into five major submarkets: SoHo, Greenwich Village/NoHo, Madison/Union Square, Hudson Square/West Village, and Chelsea. The 11 Madison Avenue Property is located in the Madison/Union Square submarket. The Madison/Union Square submarket contains over 32.0 million sq. ft. of office space and is Midtown South’s largest submarket. The submarket contains 10.4 million sq. ft. of Class A space (including the Property at 2.3 million sq. ft.). As of Q1 2015, the Madison/Union Square submarket had an overall vacancy rate of 7.3% and an overall asking rent of $64.22 PSF.
The appraiser identified 34 comparable properties totaling approximately 19.3 million sq. ft. of space that exhibited a rental range of $40.00 PSF to $90.00 PSF with a weighted average occupancy of approximately 96.8%. However, according to the appraiser, the Property is directly competitive with ten Class A office properties located within the Madison/Union Square submarket. The average direct occupancy rate for the directly competitive buildings is 100.0%, compared to 96.8% for the full competitive set and 95.90% for the Class A Midtown South market as a whole. The chart below summarizes the ten properties considered to be directly competitive to the 11 Madison Avenue Property within the Madison/Union Square office submarket.
B-7 |
11 Madison Avenue New York, NY 10010 | Collateral Asset Summary – Loan No. 1 11 Madison Avenue | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $70,000,000 3.89x 14.3% |
Competitive Set(1) | |||||||||
Building | Net Rentable Area | Available Sq. Ft. (Direct) | Available Sq. Ft. (Sublease) | Direct Occupancy | Total Occupancy | ||||
One Madison Avenue | 1,443,908 | 0 | 0 | 100.0% | 100.0% | ||||
41 Madison Avenue | 532,525 | 0 | 55,126 | 100.0% | 89.7% | ||||
51 Madison Avenue | 974,653 | 0 | 0 | 100.0% | 100.0% | ||||
63 Madison Avenue | 636,660 | 0 | 8,296 | 100.0% | 98.7% | ||||
114 Fifth Avenue | 287,804 | 0 | 19,326 | 100.0% | 93.3% | ||||
160 Fifth Avenue | 117,900 | 0 | 0 | 100.0% | 100.0% | ||||
200 Fifth Avenue | 594,089 | 0 | 0 | 100.0% | 100.0% | ||||
770 Broadway | 911,213 | 0 | 0 | 100.0% | 100.0% | ||||
111 Eighth Avenue | 2,300,000 | 0 | 0 | 100.0% | 100.0% | ||||
51 Astor Place | 307,839 | 0 | 0 | 100.0% | 100.0% | ||||
Total / Wtd. Avg. | 8,106,591 | 0 | 82,748 | 100.0% | 99.0% |
(1) | Source: Appraisal. |
The appraiser identified nine comparable transactions that are under contract or have occurred since June 2014. The transactions reflect a range of unadjusted price PSF from $713.02 to $1,819.33 PSF. After making adjustments including but not limited to location, age, condition, quality and appeal, the appraiser determined an adjusted price range of approximately $972.21 PSF to $1,107.94 PSF for the comparable sales transactions.
Comparable Retail Sales – Multi-Level(1) | |||||||
Location | Net Rentable Area (Sq. Ft.) | Year Built/Renovated | No. Stories | Transaction Date | Price | Price/NRA | Occupancy at Sale |
757 Third Avenue | 504,893 | 1964 | 27 | Mar-15 | $360,000,000 | $713 | 95.0% |
230 Park Avenue | 1,404,918 | 1928 | 34 | Mar-15 | $1,200,000,000 | $854 | 90.0% |
717 Fifth Avenue | 352,951 | 1959/2001 | 26 | Feb-15 | $415,000,000 | $1,176 | 92.0% |
11 Times Square | 1,107,839 | 2010 | 40 | Feb-15 | $1,400,000,000 | $1,264 | 85.0% |
601 Lexington Avenue (Allocated) | 1,669,897 | 1977 | 61 | Dec-14 | $2,400,000,000 | $1,437 | 99.0% |
1045 Sixth Avenue/7 Bryant Park (Leasehold) | 473,672 | 2015 (under construction) | 28 | Dec-14 | $598,000,000 | $1,262 | 0.0% |
1095 Sixth Avenue | 1,179,552 | 1973/2008 | 41 | Nov-14 | $2,146,000,000 | $1,819 | 96.0% |
1740 Broadway | 620,928 | 1950/2007 | 26 | Nov-14 | $600,912,768 | $968 | 98.0% |
Park Avenue Tower | 616,082 | 1986 | 36 | Jun-14 | $750,000,000 | $1,217 | 96.0% |
(1) | Source: Appraisal. |
The appraiser concluded an average rental rate for the 11 Madison Avenue Property in the mid $80s, as summarized in the chart below.
Office Market Rent(1) | |
Type | Market Rent PSF |
Concourse | $30.00 |
Office Floors 2, 5-12 | $80.00 |
Office Floors 3-4 | $85.00 |
Office Floors 13-14, 16-20 | $90.00 |
Office Floors 15 | $70.00 |
Office Floors 21-24 | $95.00 |
Office Floors 25-29 | $100.00 |
(1) | Source: Appraisal. |
B-8 |
11 Madison Avenue New York, NY 10010 | Collateral Asset Summary – Loan No. 1 11 Madison Avenue | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $70,000,000 3.89x 14.3% |
Cash Flow Analysis.
Cash Flow Analysis | |||||||||||
2013 | 2014 | T-12 5/31/2015 | Sponsor Budget | U/W | U/W PSF | ||||||
Base Rent(1) | $52,888,225 | $52,592,579 | $53,715,326 | $159,869,968 | $147,917,623 | $64.73 | |||||
Rent Abatements | 0 | 0 | 0 | (5,368,454) | 0 | 0.00 | |||||
Straight Line Rents(2) | 0 | 0 | 0 | 0 | 1,932,702 | 0.85 | |||||
Value of Vacant Space | 0 | 0 | 0 | 0 | 4,796,680 | 2.10 | |||||
Gross Potential Rent | $52,888,225 | $52,592,579 | $53,715,326 | $154,501,514 | $154,647,005 | $67.68 | |||||
Total Recoveries | 15,059,977 | 14,780,924 | 13,408,807 | 3,799,446 | 5,509,992 | 2.41 | |||||
Total Other Income | 2,724,962 | 2,996,156 | 3,461,086 | 8,005,327 | 7,679,439 | 3.36 | |||||
Less: Vacancy/Bad Debt(3) | (725,384) | (488,860) | (319,721) | 0 | (4,796,680) | (2.10) | |||||
Effective Gross Income | $69,947,780 | $69,880,799 | $70,265,498 | $166,306,287 | $163,039,756 | $71.35 | |||||
Total Variable Expenses | 13,213,979 | 12,999,874 | 13,312,685 | 31,651,567 | 31,569,448 | 13.82 | |||||
Total Fixed Expenses | 9,682,754 | 10,175,176 | 10,563,422 | 21,976,710 | 21,976,710 | 9.62 | |||||
Net Operating Income | $47,051,047 | $46,705,749 | $46,389,392 | $112,678,010 | $109,493,598 | $47.92 | |||||
TI/LC | 0 | 0 | 0 | 0 | 1,605,307 | 0.70 | |||||
Capital Expenditures | 0 | 0 | 0 | 0 | 457,009 | 0.20 | |||||
Net Cash Flow | $47,051,047 | $46,705,749 | $46,389,392 | $112,678,010 | $107,431,283 | $47.01 |
(1) | Base Rent includes Credit Suisse’s contractual base rent beginning in 2017 for all floors except 11 and 13 and 8,770 sq. ft. of storage space, for which the in-place rent is reflected. Base Rent also includes WME’s expansion onto a portion of the 17th floor, which occurred in August 2015. |
(2) | Straight Line Rents is equal to the average rent for Sony’s space over the loan term. |
(3) | U/W Vacancy/Bad Debt is based on the in-place vacancy. |
Property Management. The 11 Madison Avenue Property is managed by SL Green Management LLC, a borrower affiliate.
Lockbox / Cash Management. The 11 Madison Avenue Loan Combination is structured with a hard lockbox and springing cash management. At closing, the borrowers were required to deliver tenant direction letters requiring all rents, revenues and receipts from the Property to be deposited directly by the tenants into a clearing account established by the borrowers. Amounts on deposit in the clearing account are required to be transferred daily to a deposit account controlled by the lender, and provided no Trigger Period (defined herein) exists, automatic daily transfers of such deposits are required to be made from the deposit account into borrower’s operating account. During a Trigger Period, any transfers to borrower’s operating account will cease and sums on deposit in the deposit account are required to be applied to payment of all monthly amounts due under the loan documents.
A “Trigger Period” will commence upon the occurrence or commencement, as applicable, of (i) an event of default, (ii) a Low Debt Yield Trigger Period (defined herein), (iii) a default by the borrowers of any major lease obligation, (iv) a Lease Collateral Sweep Period (defined herein), (v) a Lease Sweep Period (defined herein) or (vi) a First Mezzanine or Second Mezzanine loan default.
A “Low Debt Yield Trigger Period” will commence if , as of the last day of any quarter, the mortgage loan debt yield falls below 7.50% or the aggregate debt yield falls below 5.75% and will cease to exist if either (i) the mortgage loan debt yield exceeds 7.50% or the total debt yield exceeds 5.75% for two consecutive quarters or (ii) the borrowers provide cash or a letter of credit to the lender in the amount that the outstanding principal balance would need to be reduced to cause the mortgage loan debt yield to be equal to or greater than 7.50% or the total debt yield to be equal to or greater than 5.75% (such cash or letter of credit are required to be released to the borrowers upon the borrowers meeting the conditions set forth in subsection (i) hereof).
A “Lease Collateral Sweep Period” will commence if the long-term unsecured credit rating of the guarantor under the Lease Costs Guaranty falls below the minimum credit rating requirement as further described in “Initial Reserves” below and will end if either (i) all lease costs have been fully funded in cash into the lease costs account or (ii) upon the subsequent date that guarantor meets the minimum credit rating.
B-9 |
11 Madison Avenue New York, NY 10010 | Collateral Asset Summary – Loan No. 1 11 Madison Avenue | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $70,000,000 3.89x 14.3% |
A “Lease Sweep Period” will commence upon a bankruptcy proceeding in which the tenant and/or guarantor under either the Credit Suisse Lease or the Sony Lease, or its respective parent entity, (each a “Major Tenant”) is the debtor and will end upon the earlier to occur of (i) in the event either of the Major Tenant leases are rejected in the applicable bankruptcy proceeding, the date on which a sufficient portion of the space occupied under the defaulted Major Tenant Lease is re-leased so as to achieve a mortgage loan debt yield of 7.50% or greater and an aggregate debt yield of 5.75%, (ii) the date of an assumption or assignment of the applicable Major Tenant lease out of bankruptcy or (iii) the date on which the amount of $75.00 per rentable square foot of the relevant space is deposited into a rollover reserve account for approved leasing costs.
Initial Reserves. At loan closing, the borrowers deposited (i) $18,847,898 into the Sony free rent reserve account on account of free rent concessions with respect to the Sony lease, (ii) $39,000,000 in cash on account of outstanding payments with respect to the Credit Suisse sublease ($2,500,000 of the sublease payments were paid off at closing and the remaining $36,500,000 was deposited into the Credit Suisse sublease account), (iii) $1,000 into an endorsement reserve on account of outstanding disbursements to be made with respect to the delivery of updates to the title insurance policy and (iv) (a) $81,152,102 into the lease costs account to partially fund the lease costs, and (b) the Lease Costs Guaranty (defined below). The lease costs consist of (1) outstanding TI/LC obligations with respect to the Credit Suisse, Sony, Yelp and WME leases (collectively, the “Outstanding TI/LC Expenses”) and (2) the outstanding base building work obligations, detailed in the chart below, with respect to the Credit Suisse, Sony, Yelp and WME leases (the “Base Building Work”).
On the origination date, the guarantor delivered a guaranty (the “Lease Costs Guaranty”) in the amount of $59,060,332, which represents the remaining portion of the $140,212,434 of lease costs owed by the borrowers under existing leases, less the amount deposited in the lease costs reserve. The Lease Costs Guaranty covers an amount equal to (i) the lease costs outstanding (including any cost overruns) minus (ii) the sum of (A) the reserve funds in the lease costs account and (B) the amount of any lease costs letters of credit. In the event that the long-term unsecured S&P credit rating of the guarantor is less than “BB+”, the borrowers will be required to immediately deposit cash reserves into the lease costs account in the amount of (and in exchange for) any lease costs covered by the Lease Costs Guaranty; provided that in lieu of such cash collateralization, so long as no event of default exists, the borrower may elect to have all available cash applied to the lease costs account until all of the lease costs have been fully funded in cash.
Lease cost funds are required to be released and the Lease Costs Guaranty will be reduced, generally, on a pro rata basis as the borrowers satisfy the leasing obligations and incur the lease costs. In addition, amounts on reserve in the Sony free rent reserve account will be transferred to the lease costs account monthly in connection with the amortization of Sony’s free rent. The Lease Costs Guaranty will be reduced by such deposits into the lease costs account as well as deposits of any other reserve funds into the lease costs account.
Lease Costs | |
Lease Costs | Outstanding Amount |
Credit Suisse Landlord Base Building Work | $21,591,448 |
Sony Landlord Base Building Work | 19,931,438 |
Credit Suisse Tenant Improvements(1) | 43,898,724 |
Sony Tenant Improvements | 43,641,509 |
Other Tenant Improvements | 4,533,205 |
Credit Suisse Leasing Commissions | 4,529,626 |
Sony Leasing Commissions | 0 |
Other Leasing Commissions | 2,086,484 |
Total Lease Costs | $140,212,434 |
(1) | Includes $33,806,313 in anticipated work allowance under the 2017 Credit Suisse Lease. |
Ongoing Reserves. During the continuance of a Trigger Period, the borrowers are required to deposit, on a monthly basis, (i) 1/12 of the taxes payable in the next 12 months, (ii) provided an acceptable blanket policy is no longer in place, 1/12 of the insurance premiums payable in the next 12 months and (iii) $342,756 for annual capital expenditures.
Current Mezzanine or Subordinate Indebtedness. Two mezzanine loans were funded concurrently with the closing of the 11 Madison Avenue Loan Combination. A $150,000,000 mezzanine A loan, which is coterminous with the 11 Madison Avenue Loan, and accrues interest at a fixed per annum rate equal to 4.650% and a $175,000,000 mezzanine B loan, which is coterminous with the 11 Madison Avenue Loan, and accrues interest at a fixed per annum rate equal to 4.850%. An intercreditor agreement is in place with respect to the 11 Madison Avenue Loan and the related mezzanine loans.
Future Mezzanine or Subordinate Indebtedness Permitted. None.
B-10 |
11 Madison Avenue New York, NY 10010 | Collateral Asset Summary – Loan No. 1 11 Madison Avenue | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $70,000,000 3.89x 14.3% |
IDA Lease Units.A portion of the 11 Madison Avenue Property consisting of the leasehold interests in 9 condominium units, the related fee simple interests of which are owned by the New York City Industrial Development Agency, (“IDA”) is subject to a certain overlease agreement dated December 22, 1995, by and between the borrowers (as successor to tenant’s interest) and the IDA (as assigned and/or amended, the “11 Madison Avenue Overlease”). The rent under the 11 Madison Avenue Overlease is $10 for the full term and has been fully prepaid. The purpose of the 11 Madison Avenue Overlease is to substitute real property tax obligations with payments in lieu of real estate taxes. Credit Suisse is required to pay all PILOT pursuant to a PILOT Agreement dated December 1, 1995 between the IDA and Credit Suisse First Boston Corporation; however, under the sublease described under “Major Tenants” above, the borrowers have agreed to make such payments as to the subleased space. The IDA structure terminates on December 31, 2016. If the 11 Madison Avenue Overlease terminates for any reason, the fee simple interest in the condominium units subject to the 11 Madison Avenue Overlease reverts back to the borrower. The mortgage provides that upon any such reversion of condominium units to the borrowers, such condominium units will automatically be subject to the mortgage.
B-11 |
11 Madison Avenue New York, NY 10010 | Collateral Asset Summary – Loan No. 1 11 Madison Avenue | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $70,000,000 3.89x 14.3% |
B-12 |
11 Madison Avenue New York, NY 10010 | Collateral Asset Summary – Loan No. 1 11 Madison Avenue | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $70,000,000 3.89x 14.3% |
B-13 |
Various, California | Collateral Asset Summary – Loan No. 2 NMS Los Angeles Multifamily | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $65,000,000 68.8% 1.31x 6.7% |
B-14 |
Various, California | Collateral Asset Summary – Loan No. 2 NMS Los Angeles Multifamily | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $65,000,000 68.8% 1.31x 6.7% |
Mortgage Loan Information | |
Loan Seller: | CCRE |
Loan Purpose: | Refinance |
Sponsor: | Naum Neil Shekhter; Margot V. Shekhter |
Borrower: | NMS 1539, LLC; NMS 1548, LLC; NMS 1759, LLC; NMS Superior Apartments, LLC; NMS Warner Center, LLC; NMS Northridge, LLC |
Original Balance(1): | $65,000,000 |
Cut-off Date Balance(1): | $65,000,000 |
% by Initial UPB: | 7.0% |
Interest Rate: | 4.9380% |
Payment Date: | 6th of each month |
First Payment Date: | October 6, 2015 |
Maturity Date: | September 6, 2025 |
Amortization: | Interest Only |
Additional Debt(1): | $55,000,000 Pari Passu Debt |
Call Protection(2)(3): | L(25), D(92), O(3) |
Lockbox / Cash Management: | Springing Soft / Springing |
Reserves(4) | ||
Initial | Monthly | |
Taxes: | $633,333 | $79,167 |
Insurance: | $52,199 | $10,440 |
Replacement: | $0 | $8,000 |
Required Repairs: | $199,100 | NAP |
Financial Information(5) | ||
Cut-off Date Balance / Unit: | $312,500 | |
Balloon Balance / Unit: | $312,500 | |
Cut-off Date LTV(6): | 68.8% | |
Balloon LTV(6): | 68.8% | |
Underwritten NOI DSCR: | 1.33x | |
Underwritten NCF DSCR: | 1.31x | |
Underwritten NOI Debt Yield: | 6.7% | |
Underwritten NCF Debt Yield: | 6.6% | |
Underwritten NOI Debt Yield at Balloon: | 6.7% | |
Underwritten NCF Debt Yield at Balloon: | 6.6% | |
Property Information | |
Single Asset / Portfolio: | Portfolio of six properties |
Property Type: | Multifamily - Various |
Collateral: | Fee Simple |
Location: | Various, CA |
Year Built / Renovated: | 1987-1988, 2003, 2008-2009 / 2015 |
Total Units: | 384 |
Property Management: | NMS Properties, Inc. |
Underwritten NOI: | $7,981,432 |
Underwritten NCF: | $7,885,432 |
Appraised Value(6): | $174,300,000 |
Appraisal Date: | June 9, 2015 |
Historical NOI | |
Most Recent NOI: | $7,372,651 (T-12 June 30, 2015) |
2014 NOI: | $7,012,973 (December 31, 2014) |
2013 NOI: | $6,035,021 (December 31, 2013) |
2012 NOI: | NAV |
Historical Occupancy | |
Most Recent Occupancy: | 99.2% (August 25, 2015) |
2014 Occupancy: | 94.8% (December 31, 2014) |
2013 Occupancy: | 94.8% (December 31, 2013) |
2012 Occupancy: | 96.9% (December 31, 2012) |
(1) | The NMS Los Angeles Multifamily Portfolio Loan Combination is evidenced by threepari passu notes in the aggregate original principal amount of $120.0 million. The controlling Note A-1, with an original principal balance of $65.0 million, will be included in the COMM 2015-CCRE27 mortgage trust. The non-controlling Note A-2 and Note A-3, with an aggregate original principal balance of $55.0 million, will not be included in the trust and are expected to be held by CCRE or an affiliate. For additional information on thepari passu companion loans, see “The Loan” herein. |
(2) | Partial release is permitted. See “Partial Release” herein. |
(3) | The lockout period for defeasance will be at least 25 payment dates beginning with and including the first payment date of October 6, 2015. Defeasance of the full $120.0 million NMS Los Angeles Multifamily Portfolio Loan Combination is permitted on or after the date that is the earlier to occur of (i) two years after the closing date of the securitization that includes the lastpari passu note to be securitized and (ii) October 6, 2019. The assumed lockout period of 25 payments is based on the expected COMM 2015-CCRE27 securitization closing date in October 2015. The actual lockout period may be longer. |
(4) | See “Initial Reserves” and “Ongoing Reserves” herein. |
(5) | DSCR, LTV, Debt Yield and Balance / Unit calculations are based on the aggregate NMS Los Angeles Multifamily Portfolio Loan Combination. |
(6) | The portfolio Appraised Value of $174.3 million reflects a premium attributed to the aggregate value of the NMS Los Angeles Multifamily Portfolio as a whole. The sum of the value of each of the NMS Los Angeles Multifamily Portfolio Properties on an individual basis is $163.8 million, which represents a Cut-off Date LTV and Balloon LTV of 73.3%. See “Letter of Credit” herein. |
B-15 |
Various, California | Collateral Asset Summary – Loan No. 2 NMS Los Angeles Multifamily | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $65,000,000 68.8% 1.31x 6.7% |
Portfolio Summary | |||||||||||||||
Property | Location | Year Built / Renovated | # of Units | Allocated Loan Amount ($) | Allocated Loan Amount (%) | Appraised Value(1) | Occupancy(2) | ||||||||
Luxe at 1548 | Santa Monica, CA | 2009 / NAP | 54 | $27,200,000 | 22.7% | $37,100,000 | 100.0% | ||||||||
Luxe at 1539 | Santa Monica, CA | 2008 / NAP | 62 | $26,300,000 | 21.9% | $35,930,000 | 100.0% | ||||||||
Luxe at 1759 | West Los Angeles, CA | 2009 / NAP | 61 | $23,500,000 | 19.6% | $32,110,000 | 100.0% | ||||||||
NMS at Northridge | Northridge, CA | 1987 / 2015 | 102 | $21,500,000 | 17.9% | $29,290,000 | 99.0% | ||||||||
NMS at Warner Center | Canoga Park, CA | 1988 / NAP | 79 | $15,300,000 | 12.8% | $20,920,000 | 97.5% | ||||||||
NMS at Superior | Northridge, CA | 2003 / 2015 | 26 | $6,200,000 | 5.2% | $8,450,000 | 100.0% | ||||||||
Total / Wtd. Avg. | 384 | $120,000,000 | 100.0% | $163,800,000 | 99.2% | ||||||||||
Total with Portfolio Premium | $174,300,000 | ||||||||||||||
(1) | The portfolio Appraised Value of $174.3 million reflects a premium attributed to the aggregate value of the NMS Los Angeles Multifamily Portfolio as a whole. The sum of the value of each of the NMS Los Angeles Multifamily Portfolio Properties on an individual basis is $163.8 million. |
(2) | Occupancy based on a rent roll dated August 25, 2015. |
The Loan.The NMS Los Angeles Multifamily Portfolio loan (the “NMS Los Angeles Multifamily Portfolio Loan”) is a fixed rate loan secured by the borrowers’ fee simple interest in a 384-unit, six property portfolio of mid-rise and garden apartment properties located in Santa Monica, Northridge and Canoga Park, Los Angeles, California (each a “Property”, collectively, the “NMS Los Angeles Multifamily Portfolio Properties”) with an original and cut-off date principal balance of $120.0 million. The NMS Los Angeles Multifamily Portfolio Loan is evidenced by the controlling Note A-1, with original principal balance of $65.0 million, which will be included in the COMM 2015-CCRE27 Mortgage Trust. The pari passu non-controlling Note A-2, and Note A-3, with an aggregate original principal balance of $55.0 million (and, together with the NMS Los Angeles Multifamily Portfolio Loan, the “NMS Los Angeles Multifamily Portfolio Loan Combination”), will not be included in the trust and are expected to be held by CCRE or an affiliate or transferred to a future securitization.
The relationship between the holders of the NMS Los Angeles Multifamily Portfolio Loan Combination is governed by a co-lender agreement as described under “Description of the Mortgage Pool–Loan Combinations–The NMS Los Angeles Multifamily Portfolio Loan” in the Free Writing Prospectus.
Loan Combination Summary | |||||
Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece | ||
Note A-1 | $65,000,000 | $65,000,000 | COMM 2015-CCRE27 | Yes | |
Note A-2 & A-3 | $55,000,000 | $55,000,000 | CCRE | No | |
Total | $120,000,000 | $120,000,000 |
The NMS Los Angeles Multifamily Portfolio Loan has a 10-year term and interest only payments for the term of the loan. The NMS Los Angeles Multifamily Portfolio Loan accrues interest at a fixed rate equal to 4.9380%. Loan proceedswere used to retire existing debt of approximately $89.5 million, fund upfront reserves of approximately $884,632, pay closing costs and return approximately $28.8 million of equity to the borrower. Based on the portfolio appraised value of $174.3 million as of June 9, 2015, the cut-off date LTV ratio is 68.8%. The most recent prior financings of the NMS Los Angeles Multifamily Portfolio Properties were included in the FREMF 2010-K9, FREMF 2011-K11, FREMF 2012-K709 and COMM 2007-C9 securitizations.
Sources and Uses | ||||||
Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
Mortgage Loan | $120,000,000 | 100.0% | Loan Payoff | $89,464,958 | 74.6% | |
Reserves | $884,632 | 0.7% | ||||
Closing Costs | $857,010 | 0.7% | ||||
Return of Equity | $28,793,400 | 24.0% | ||||
Total Sources | $120,000,000 | 100.0% | Total Uses | $120,000,000 | 100.0% |
The Borrowers / Sponsor.The borrowers are NMS 1539, LLC, NMS 1548, LLC, NMS 1759, LLC, NMS Superior Apartments, LLC, NMS Warner Center, LLC, NMS Northridge, LLC, each a single purpose Delaware limited liability company, structured to be bankruptcy-remote, with two independent directors in its organizational structure. The sponsors of the borrower and the nonrecourse carve-out guarantors are Naum Neil Shekhter and Margot V. Shekhter, on a joint and several basis.
B-16 |
Various, California | Collateral Asset Summary – Loan No. 2 NMS Los Angeles Multifamily | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $65,000,000 68.8% 1.31x 6.7% |
Neil Shekhter has over 25 years of developing and managing multifamily properties. Mr. Shekhter founded NMS Properties, a privately owned real estate development and management firm, in 1988. NMS Properties manages more than 50 properties with approximately 2,000 apartment units and 320,000 sq. ft. of retail and commercial space in the Los Angeles area. NMS Properties also has an additional 2,500 multifamily units and 200,000 sq. ft. of mixed-use space under development.
The Properties.The NMS Los Angeles Multifamily Portfolio Properties consist of six, Class A mid-rise (66.3% of appraised value) and garden style (33.7% of appraised value) multifamily properties totaling 384 units located in the Santa Monica, Los Angeles and San Fernando Valley areas of California. As of August 25, 2015, the NMS Los Angeles Multifamily Portfolio Properties were 99.2% occupied and have maintained a weighted average historical occupancy of 96.7% since 2011.
The NMS Los Angeles Multifamily Portfolio Properties are equipped with various mixes of luxury amenities and fixtures including pools, jacuzzis, fitness rooms, saunas, stainless steel appliances, loft-style high ceilings, in-unit washers and dryers, central A/C and heating, on-site management and maintenance, underground gated parking, hardwood style flooring, and large windows and balconies.
The Luxe at 1548, Luxe at 1539 and Luxe at 1759 Properties (collectively, the “West LA / Santa Monica Properties”) were all built by the sponsor within the past seven years, (2009, 2008, and 2009 respectively). NMS at Superior was built by the sponsor in 2003 and the NMS at Northridge and NMS at Warner Center (collectively, the “Canoga Park / Northridge Properties”) were purchased by the sponsor in 1999 and 1997, respectively. The Properties are well located in their respective markets proximate to the respective major demand drivers including the Third Street Promenade and Santa Monica Pier in Santa Monica, UCLA in Westwood and Sawtelle Japantown in West Los Angeles, and California State University at Northridge (CSUN), Pierce College and Warner Center in the San Fernando Valley.
The NMS Los Angeles Multifamily Portfolio Properties have experienced consistent growth in rental rates. For the West LA / Santa Monica Properties and Canoga Park / Northridge Properties, new leases executed over the past three months have average net rental rates that are 7.0% and 5.0% higher, respectively, as compared to their twelve month averages.
Luxe at 1548 Property The Luxe at 1548 Property consists of one, Class A five-story apartment building with 54 units and approximately 1,000 sq. ft. of ground floor commercial/office space. The Luxe at 1548 Property was constructed in 2009 and is 100.0% occupied as of August 25, 2015. The Luxe at 1548 Property features 1 bed/1 bath configurations and 2 bed/2 bath configurations, 102 subterranean garage parking spaces and a concierge dry cleaning service. The Luxe at 1548 Property is located in the city of Santa Monica in west Los Angeles County, California.
The property is situated five blocks from Ocean Avenue and less than a mile from the Santa Monica Pier. Additionally, the property is located within one block of the Santa Monica station of the Expo Line, a light-rail line providing access to downtown Los Angeles that is anticipated to open in 2016. According to walkscore.com, the Luxe at 1548 Property received a walk score of 92. One unit at the Luxe at 1548 Property is currently leased to low income tenants under affordability restrictions. The Luxe at 1548 Property is subject to a springing deed restriction as described below under “Letter of Credit.”
Luxe at 1548 Property Unit Mix Summary(1) | |||||||
Unit Type | # of Units | % of Total | Occupied Units | Occupancy | Average Unit Size (Sq. Ft.) | Average Monthly Rental Rate | Average Monthly Rental Rate PSF |
1 Bed / 1 Bath | 17 | 31.5% | 17 | 100.0% | 676 | $3,312 | $4.90 |
1 Bed / 1 Bath | 1 | 1.9% | 1 | 100.0% | 625 | $1,708(2) | $2.73 |
2 Bed / 2 Bath | 33 | 61.1% | 33 | 100.0% | 875 | $3,719 | $4.25 |
1 Bed / 1 Bath-Pent | 1 | 1.9% | 1 | 100.0% | 725 | $4,031 | $5.56 |
1 Bed / 1 Bath-Pent | 1 | 1.9% | 1 | 100.0% | 1,050 | $5,558 | $5.29 |
2 Bed / 2 Bath | 1 | 1.9% | 1 | 100.0% | 1,100 | $5,885 | $5.35 |
Total / Wtd. Avg. | 54 | 100.0% | 54 | 100.0% | 812 | $3,634 | $4.47 |
(1) | Based on appraisal. |
(2) | Affordable unit. |
B-17 |
Various, California | Collateral Asset Summary – Loan No. 2 NMS Los Angeles Multifamily | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $65,000,000 68.8% 1.31x 6.7% |
Luxe at 1539 Property The Luxe at 1539 Property consists of one, Class A six-story apartment building with 62 units and approximately 940 sq. ft. of ground floor office space. The Luxe at 1539 Property was constructed in 2008 and is 100.0% occupied as of August 25, 2015. The Luxe at 1539 Property features 1 bed/1 bath configurations and loft/1.5 bath configurations as well as 83 subterranean garage parking spaces. The Luxe at 1539 Property is located in the city of Santa Monica in west Los Angeles County, California, which is located approximately 16 miles of west of the Los Angeles CBD.
The property is located three blocks from Ocean Avenue and approximately 0.5 miles from the Santa Monica Pier. Additionally, the Luxe at 1539 Property is directly across the street from Santa Monica Place and Third Street Promenade, a premier shopping destination, and adjacent to the Santa Monica station of the Expo Line. According to walkscore.com, the Luxe at 1539 Property received a walk score of 94.
Luxe at 1539 Property Unit Mix Summary(1) | |||||||
Unit Type | # of Units | % of Total | Occupied Units | Occupancy | Average Unit Size (Sq. Ft.) | Average Monthly Rental Rate | Average Monthly Rental Rate PSF |
1 Bed / 1 Bath-Jr. | 26 | 41.9% | 26 | 100.0% | 482 | $2,724 | $5.65 |
1 Bed / 1 Bath | 19 | 30.6% | 19 | 100.0% | 599 | $2,929 | $4.89 |
1 Bed / 1 Bath+Den | 2 | 3.2% | 2 | 100.0% | 803 | $3,104 | $3.87 |
Loft / 1.5 Bath | 14 | 22.6% | 14 | 100.0% | 803 | $3,688 | $4.59 |
1 Bed / 1 Bath-Pent | 1 | 1.6% | 1 | 100.0% | 1,025 | $3,922 | $3.83 |
Total / Wtd. Avg. | 62 | 100.0% | 62 | 100.0% | 609 | $3,036 | $4.98 |
(1) | Based on appraisal. |
Luxe at 1759 PropertyThe Luxe at 1759 Property consists of one, seven-story apartment building with 61 units. The Luxe at 1759 Property was constructed in 2009 and is 100.0% occupied as of August 25, 2015. The Luxe at 1759 Property features 1 bed/1 bath configurations, loft/1 bath configurations, 2 bed/2 bath configurations, 3 bed/2 bath configurations, 3 bed/3 bath configurations and 4 bed/3 bath configurations as well as 81 subterranean garage parking spaces. The Luxe at 1759 Property is located within the community of Sawtelle in the city of Los Angeles in west Los Angeles County, California. The property is adjacent to San Diego Freeway (Interstate 405) and the Sawtelle corridor and is proximate to Brentwood (approximately 2.1 miles), UCLA (approximately 2.5 miles), Century City (approximately 2.9 miles), Beverly Hills (approximately 3.5 miles) and Santa Monica (approximately 3.3 miles).
Downtown Los Angeles is accessible from the 10 Freeway, approximately 11 miles east of the Luxe at 1759 Property. According to walkscore.com, the Luxe at 1539 Property received a walk score of 93. Five units at the Luxe at 1759 Property are currently leased to low income tenants under affordability restrictions.
Luxe at 1759 Property Unit Mix Summary(1) | |||||||
Unit Type | # of Units | % of Total | Occupied Units | Occupancy | Average Unit Size (Sq. Ft.) | Average Monthly Rental Rate | Average Monthly Rental Rate PSF |
1 Bed / 1 Bath | 26 | 42.6% | 26 | 100.0% | 447 | $2,182 | $4.88 |
1 Bed / 1 Bath | 4 | 6.6% | 4 | 100.0% | 630 | $2,553 | $4.05 |
Loft / 1 Bath | 4 | 6.6% | 4 | 100.0% | 750 | $3,117 | $4.16 |
2 Bed / 2 Bath | 16 | 26.2% | 16 | 100.0% | 1,008 | $3,144 | $3.12 |
3 Bed / 2 Bath | 6 | 9.8% | 6 | 100.0% | 1,133 | $3,797 | $3.35 |
3 Bed / 3 Bath | 2 | 3.3% | 2 | 100.0% | 1,323 | $4,358 | $3.30 |
3 Bed / 3 Bath | 1 | 1.6% | 1 | 100.0% | 1,520 | $4,600 | $3.03 |
4 Bed / 3 Bath | 2 | 3.3% | 2 | 100.0% | 1,400 | $5,013 | $3.58 |
Total / Wtd. Avg. | 61 | 100.0% | 61 | 100.0% | 771 | $2,883 | $3.74 |
(1) | Based on appraisal. |
B-18 |
Various, California | Collateral Asset Summary – Loan No. 2 NMS Los Angeles Multifamily | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $65,000,000 68.8% 1.31x 6.7% |
NMS at Northridge Property The NMS at Northridge Property consists of four, two-story apartment buildings with 102 units, a clubhouse, pool, and spa and fitness center. The NMS at Northridge Property was constructed in 1987 and is 99.0% occupied as of August 25, 2015. NMS at Northridge Property features 1 bed/1 bath configurations, 2 bed/2 bath configurations and 3 bed/2 bath configurations, and private garages providing 211 parking spaces. The property is currently undergoing in-unit renovations, which include flooring upgrades, stainless steel appliances, new cabinets, granite countertops and upgraded light fixtures, among other things. According to the borrower, approximately 60% of the units have been renovated with the remaining units scheduled for renovation as tenants vacate. The NMS at Northridge Property is located in the city of Northridge within the San Fernando Valley area.
Additionally, the NMS at Northridge Property is located across the street from California State University at Northridge (approximately 32,500 full-time students) and 40,131 total students). The university has the largest student body out of all 23 campuses in the California State University system and is the second largest university in California. According to the borrower, approximately 33.0% of the NMS at Northridge Property is leased to students. Twelve units at the NMS at Northridge Property are currently leased to low income tenants under affordability restrictions. The restrictions expired in 2012 and the borrower intends to lease these units to market rent tenants as the current tenants vacate.
NMS at Northridge Property Unit Mix Summary(1) | |||||||
Unit Type | # of Units | % of Total | Occupied Units | Occupancy | Average Unit Size (Sq. Ft.) | Average Monthly Rental Rate | Average Monthly Rental Rate PSF |
1 Bed / 1 Bath | 6 | 5.9% | 6 | 100.0% | 650 | $1,472 | $2.26 |
1 Bed / 1 Bath | 10 | 9.8% | 10 | 100.0% | 700 | $1,473 | $2.10 |
2 Bed / 2 Bath | 85 | 83.3% | 84 | 98.8% | 900 | $1,856 | $2.06 |
3 Bed / 2 Bath | 1 | 1.0% | 1 | 100.0% | 1,100 | $2,000 | $1.82 |
Total / Wtd. Avg. | 102 | 100.0% | 101 | 99.0% | 868 | $1,797 | $2.07 |
(1) | Based on appraisal. |
NMS at Warner Center Property The NMS at Warner Center Property consists of eight, two and three-story apartment buildings with 79 units. The NMS at Warner Center Property was constructed in 1988 and is 97.5% occupied as of August 25, 2015. The NMS at Warner Center Property features 1 bed/1 bath configurations, 2 bed/2 bath configurations and 3 bed/2 bath configurations as well as 195 subterranean garage parking spaces. The NMS at Warner Center Property is located in the city of Canoga Park within the San Fernando Valley. Additionally, the NMS at Warner Center Property is located within approximately one mile of Warner Center, 1.5 miles of Westfield Topanga and Westfield Promenade and approximately 5.1 miles of Northridge Fashion Center. Eight units at the NMS at Warner Center Property are currently leased to low income tenants under affordability restrictions. The restrictions expired in 2013 and the borrower intends to lease these units to market rent tenants as the current tenants vacate.
NMS at Warner Center Property Unit Mix Summary(1) | |||||||
Unit Type | # of Units | % of Total | Occupied Units | Occupancy | Average Unit Size | Average Monthly Rental Rate | Average Monthly Rental Rate PSF |
1 Bed / 1 Bath | 26 | 32.9% | 24 | 92.3% | 700 | $1,633 | $2.33 |
2 Bed / 2 Bath | 40 | 50.6% | 40 | 100.0% | 900 | $1,860 | $2.07 |
3 Bed / 2 Bath | 13 | 16.5% | 13 | 100.0% | 1,050 | $2,127 | $2.03 |
Total / Wtd. Avg. | 79 | 100.0% | 77 | 97.5% | 859 | $1,829 | $2.13 |
(1) | Based on appraisal. |
NMS at Superior Property The NMS at Superior Property consists of one two-story apartment building with 26 units. The NMS at Superior Property was constructed in 2003 and is 100.0% occupied as of August 25, 2015. The NMS at Superior Property features 1 bed/2 bath configurations, 2 bed/2 bath configurations, 3 bed/2 bath configurations and 3 bed/3 bath configurations, 58 podium parking spaces. The NMS at Superior Property is located in the city of Northridge in the county of Los Angeles, California. The NMS at Superior Property is located in the San Fernando Valley area, adjacent to the NMS at Northridge Property and within walking distance of the California State University at Northridge. According to the borrower, approximately 33.0% of the NMS at Superior Property is leased to students.
NMS at Superior Property Unit Mix Summary(1) | |||||||
Unit Type | # of Units | % of Total | Occupied Units | Occupancy | Average Unit Size (Sq. Ft.) | Average Monthly Rental Rate | Average Monthly Rental Rate PSF |
1 Bed / 2 Bath | 2 | 7.7% | 2 | 100.0% | 900 | $1,822 | $2.02 |
2 Bed / 2 Bath | 20 | 76.9% | 20 | 100.0% | 1,000 | $2,131 | $2.13 |
3 Bed / 2 Bath | 2 | 7.7% | 2 | 100.0% | 1,200 | $2,611 | $2.18 |
3 Bed / 3 Bath | 2 | 7.7% | 2 | 100.0% | 1,250 | $2,672 | $2.14 |
Total / Wtd. Avg. | 26 | 100.0% | 26 | 100.0% | 1,027 | $2,186 | $2.13 |
(1) | Based on appraisal. |
B-19 |
Various, California | Collateral Asset Summary – Loan No. 2 NMS Los Angeles Multifamily | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $65,000,000 68.8% 1.31x 6.7% |
Environmental Matters.The Phase I environmental reports dated August 25, 2015 or August 12, 2015 recommended no further action at the NMS Los Angeles Multifamily Properties other than the continued implementation of the existing asbestos operations & maintenance plans.
The Market.
Market Comparison(1) | ||||||||
Market Conclusion(4) | 5-Mile Radius | |||||||
Property Name | Monthly Rent Per Unit(2) | Monthly Rent PSF |
Occupancy(3) | Monthly Rent Per Unit | Monthly Rent PSF | Occupancy | Population | Median Household Income |
Luxe at 1548 Property | $3,634 | $4.47 | 100.0% | $3,473 | $4.28 | 96% | 428,511 | $69,889 |
Luxe at 1539 Property | $3,036 | $4.98 | 100.0% | $2,946 | $4.83 | 96% | 419,112 | $70,180 |
Luxe at 1759 Property | $2,883 | $3.74 | 100.0% | $2,797 | $3.63 | 96% | 598,596 | $68,451 |
NMS at Northridge Property | $1,797 | $2.07 | 99.0% | $1,804 | $2.08 | 95% | 583,649 | $53,692 |
NMS at Warner Center Property | $1,829 | $2.13 | 97.5% | $1,813 | $2.11 | 95% | 445,276 | $61,411 |
NMS at Superior Property | $2,186 | $2.13 | 100.0% | $2,081 | $2.03 | 95% | 584,359 | $53,707 |
Wtd. Average: | $2,461 | $3.16 | 99.2% | $2,401 | $3.08 | 95% | 509,222 | $62,565 |
(1) | Based on appraisals. |
(2) | Monthly Rent Per Unit amounts are exclusive (gross) of concessions. |
(3) | Based on rent rolls dated August 25, 2015. |
(4) | Represents appraiser’s concluded market rent and occupancy. |
The NMS Los Angeles Multifamily Portfolio Properties are all located within Los Angeles County. As of Q1 2015, the Los Angeles apartment market reported an average vacancy rate of 3.2%, in line with the average vacancy rate from 2010 to 2014 of 3.7%. During the same time period, Class A units reported an increase in asking rent of 2.5% year-over year.
The Santa Monica / West Los Angeles Properties are situated in West Los Angeles. From 2010-2015, the population grew by approximately 3.45% and is estimated to grow by an additional 3.82% by 2020. The Canoga Park / Northridge Properties are situated in the San Fernando Valley. From 2010-2015, the population grew by approximately 3.76% and is estimated to grow by an additional 4.08% by 2020.
Santa Monica The Luxe at 1548 Property and Luxe at 1539 Property are located in the city of Santa Monica in west Los Angeles County, California. As of August 25, 2015, the occupancy and average monthly rent per unit at the Luxe at 1548 Property and Luxe at 1539 Property was 100.0% and $3,634, respectively, and 100.0% and $3,036, respectively.
West Los Angeles The Luxe at 1759 Property is located in the city of Los Angeles in west Los Angeles County, California. As of August 25, 2015, the occupancy and average monthly rent per unit at the Luxe at 1759 Property were 100.0% and $2,883, respectively.
Northridge The NMS at Northridge Property and NMS at Superior Property are located in the city of Northridge within the San Fernando Valley area of northern Los Angeles. As of August 25, 2015, the occupancy and average monthly rent per unit at the NMS at Northridge Property and NMS at Superior Property were 99.0% and $1,797, respectively, and 100.0% and $2,186, respectively.
Canoga Park The NMS at Warner Center Property is located in the city of Canoga Park, within the San Fernando Valley area of northern Los Angeles, California. As of July 20, 2015, the occupancy and average monthly rent per unit at the NMS at Warner Center Property was 97.5% and $1,829, respectively.
Inventory growth is limited within the NMS Los Angeles Multifamily Portfolio’s submarkets due to high barriers to entry including significant costs of development. In addition to the lack of new supply, the submarkets have averaged a net effective rent growth rate of approximately 2.5% per year for the past five years.
NMS Los Angeles Multifamily Portfolio – Submarket Inventory Growth and Rent Growth(1) | ||||||||||||
Santa Monica | West Los Angeles | Northridge | Canoga Park | |||||||||
Year | Inventory Growth | Vacancy | Rent Growth | Inventory Growth | Vacancy | Rent Growth | Inventory Growth | Vacancy | Rent Growth | Inventory Growth | Vacancy | Rent Growth |
2011 | 0.0% | 3.3% | 2.2% | 0.4% | 4.1% | 1.1% | 0.0% | 3.0% | 1.7% | 2.6% | 6.8% | 1.6% |
2012 | 0.2% | 3.0% | 3.7% | 0.2% | 3.4% | 4.4% | 0.0% | 2.4% | 2.8% | 0.5% | 5.2% | 3.9% |
2013 | 0.7% | 2.8% | 1.2% | 0.2% | 3.1% | 1.3% | 0.0% | 2.0% | 3.2% | 4.1% | 6.2% | 4.6% |
2014 | 0.8% | 3.2% | 2.6% | 0.2% | 2.9% | 3.9% | 0.0% | 1.5% | 2.0% | 0.0% | 5.0% | 1.2% |
2015 | 0.0% | 3.0% | 2.1% | 0.1% | 2.9% | 2.4% | 0.0% | 1.3% | 2.5% | 0.0% | 4.3% | 2.3% |
Avg. | 0.3% | 3.1% | 2.4% | 0.2% | 3.3% | 2.6% | 0.0% | 2.0% | 2.4% | 1.4% | 5.5% | 2.7% |
(1) | Source: Market Research Report. |
B-20 |
Various, California | Collateral Asset Summary – Loan No. 2 NMS Los Angeles Multifamily | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $65,000,000 68.8% 1.31x 6.7% |
Cash Flow Analysis.
Cash Flow Analysis | ||||||
2013 | 2014 | T-12 6/30/2015 | T-3 6/30/2015 Annualized | U/W | U/W per Unit | |
Gross Potential Rent(1) | $10,534,060 | $10,944,140 | $11,107,643 | $11,151,132 | $11,281,164 | $29,378 |
Total Other Income(2) | 328,176 | 545,392 | 578,080 | 586,980 | 582,021 | 1,516 |
Less: Vacancy & Concessions(3) | (1,868,645) | (1,597,137) | (1,365,050) | (1,116,340) | (1,022,203) | (2,662) |
Effective Gross Income | $8,993,590 | $9,892,396 | $10,320,673 | $10,621,772 | $10,840,983 | $28,232 |
Total Operating Expenses(4) | 2,958,570 | 2,879,423 | 2,948,022 | 2,948,022 | 2,859,551 | 7,447 |
Net Operating Income | $6,035,021 | $7,012,972 | $7,372,650 | $7,673,750 | $7,981,432 | $20,785 |
Capital Expenditures | 0 | 0 | 0 | 0 | 96,000 | 250 |
Net Cash Flow(5) | $6,035,021 | $7,012,972 | $7,372,650 | $7,673,750 | $7,885,432 | $20,535 |
(1) | U/W Gross Potential Rent is based on the rent rolls as of August 25, 2015. |
(2) | Other Income includes, among other things, commercial rental income and furnished unit rental income. |
(3) | Vacancy & Concessions collectively represents 9.1% of U/W Gross Potential Rent. Vacancy represents approximately 4.0% of U/W Gross Potential Rent. As of August 25, 2015, in-place vacancy at the NMS Los Angeles Multifamily Portfolio Properties is 0.8%. The appraiser concluded an average market vacancy rate of 4.0%. |
(4) | Taxes are based on the T-12 actual taxes for the period ending June 30, 2015. |
(5) | The increase in Net Cash Flow from 2013 to U/W is the result of, among other things: (1) four newly built units coming online in 2014 at the Luxe at 1548 Property, (2) general re-stabilization following displacement/disruption during the construction period (2013-2014) of the four units at the Luxe at 1548 Property, (3) general re-stabilization following displacement/disruption at the Luxe at 1548 Property and Luxe at 1539 Property as result of the 2013-2014 ongoing construction of the adjacent Santa Monica Light Rail Expo, (4) initiation of furnished rental program in 2014, (5) NMS at Northridge Property rental rate growth resulting from ongoing interior unit renovations, (6) commercial space leasing and (7) general market rent growth. |
Property Management. The NMS Los Angeles Multifamily Portfolio Properties are managed by NMS Properties, Inc. a California corporation and an affiliate of the borrowers.
Lockbox / Cash Management. The NMS Los Angeles Multifamily Portfolio Loan is structured with a springing soft lockbox and springing cash management. A soft lockbox, in-place cash management and an excess cash flow sweep will occur during a Cash Trap Period.
A “Cash Trap Period” will occur (i) during an event of default, (ii) during any bankruptcy action of the borrowers, guarantors or property manager or (iii) upon the failure of the borrowers after the end of two consecutive calendar quarters to maintain an aggregate NMS Los Angeles Multifamily Portfolio Loan debt service coverage ratio of at least 1.20x until the debt service coverage ratio is at least 1.25x for two consecutive calendar quarters.
Initial Reserves.At loan closing, the borrowers deposited (i) $633,333 into a tax reserve account, (ii) $52,199 into an insurance reserve account and (iii) $199,100 into a required repairs reserve account, which represents approximately 125.0% of the engineer’s estimated immediate repairs.
Ongoing Reserves. On a monthly basis, the borrowers are required to deposit reserves of (i) 1/12 of the estimated annual real estate taxes, which currently equates to $79,167, into a tax reserve account, (ii) 1/12 of the annual insurance premiums, which currently equates to $10,440, into an insurance reserve account and (iii) $8,000 ($250 per unit annually) into a capital expenditure account.
Current Mezzanine or Subordinate Indebtedness. None.
Future Mezzanine or Subordinate Indebtedness Permitted. None.
Partial Release.On any payment date after the lockout period, the borrower may obtain the release of any NMS Los Angeles Multifamily Portfolio Property, provided, among other things, (i) no event of default has occurred and (ii) the borrowers deliver defeasance collateral in an amount equal to the greater of (a) 125% of the related allocated loan amount for the individual property being released, (b) 100% of the net sales proceeds with respect to such property or (c) the amount necessary to satisfy the requirements that (i) the combined LTV of the remaining properties is less than or equal to the lesser of (x) 68.8% or (y) the LTV immediately prior to the release, (ii) the combined DSCR of the remaining properties is at least equal to the greater of (x) 1.20x or (y) the DSCR immediately prior to the release, (iii) the combined debt yield of the remaining properties is at least equal to the greater of (x) 6.0% or (y) the debt yield immediately prior to the release and (iv) the loan documents require that two of the following properties: (A) the Luxe at 1759 Property, (B) the NMS at Warner Center Property or (C) the NMS at Northridge Property be released before a release of the Luxe at 1548 Property or Luxe at 1539 Property is permitted.
B-21 |
Various, California | Collateral Asset Summary – Loan No. 2 NMS Los Angeles Multifamily | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $65,000,000 68.8% 1.31x 6.7% |
Letter of Credit.The Luxe at 1548 Property is subject to a springing deed restriction by the city of Santa Monica to provide 19 units of affordable housing. The loan sponsors agreed with the city to build a multifamily building at a nearby location (the “New Building”) and provide the affordable housing units at that property (which property will not be collateral for the NMS Los Angeles Portfolio Loan). In the event the New Building provides the required affordable housing units, the city is required to release the deed restriction. In the event the sponsors have not made affordable housing units available at the New Building, the city may require that the borrowers lease 19 units at the Luxe at 1548 Property to low income tenants as units become vacant. The appraisal did not consider the springing deed restriction. However, the borrowers delivered a $7.0 million evergreen letter of credit to lender as additional collateral for the NMS Los Angeles Multifamily Loan and the loan sponsors provided a personal guarantee with respect to the last $7.0 million of principal repaid under the NMS Los Angeles Multifamily Loan. The letter of credit and the personal guarantee will be released upon a release of the deed restriction encumbering the Luxe at 1548 Property or in the event the Luxe at 1548 Property is released from the lien of the security instrument in accordance with the loan documents. Pursuant to the August 14, 2015 appraisal (before the springing deed restriction), the appraised value for this property was $37,100,000. This value was used in the calculation of the sum of the value of each of the properties on an individual basis. On October 8, 2014, the appraiser provided a supplemental appraisal that included a hypothetical value of $31,100,000 in the event the 19 units are subject to Section 8 restrictions and $26,330,000 in the event the 19 units are subject to HUD restrictions.
B-22 |
Various, California | Collateral Asset Summary – Loan No. 2 NMS Los Angeles Multifamily | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $65,000,000 68.8% 1.31x 6.7% |
B-23 |
Various, TX | Collateral Asset Summary – Loan No. 3 Sandalwood Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $62,912,576 63.3% 1.60x 10.2% |
B-24 |
Various, TX | Collateral Asset Summary – Loan No. 3 Sandalwood Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $62,912,576 63.3% 1.60x 10.2% |
Mortgage Loan Information | |
Loan Seller: | GACC |
Loan Purpose: | Refinance |
Sponsor: | Thomas D. Crowson, Sr., M.D. |
Borrower(1): | Various |
Original Balance: | $63,000,000 |
Cut-off Date Balance: | $62,912,576 |
% by Initial UPB: | 6.8% |
Interest Rate: | 4.2100% |
Payment Date: | 6th of each month |
First Payment Date: | October 6, 2015 |
Maturity Date: | September 6, 2025 |
Amortization: | 360 months |
Additional Debt: | None |
Call Protection(2): | L(25), D(90), O(5) |
Lockbox / Cash Management: | Soft / Springing |
Reserves(3) | ||
Initial | Monthly | |
Taxes: | $1,322,157 | $165,270 |
Insurance: | $175,000 | Springing |
Replacement: | $0 | $41,100 |
Required Repairs: | $497,169 | NAP |
Financial Information | |
Cut-off Date Balance / Unit: | $38,268 |
Balloon Balance / Unit: | $30,672 |
Cut-off Date LTV(4): | 63.3% |
Balloon LTV(4): | 50.8% |
Underwritten NOI DSCR: | 1.73x |
Underwritten NCF DSCR: | 1.60x |
Underwritten NOI Debt Yield: | 10.2% |
Underwritten NCF Debt Yield: | 9.4% |
Underwritten NOI Debt Yield at Balloon: | 12.7% |
Underwritten NCF Debt Yield at Balloon: | 11.8% |
Property Information | |
Single Asset / Portfolio: | Portfolio of seven properties |
Property Type: | Garden Multifamily |
Collateral: | Fee Simple |
Location: | Various, TX |
Year Built / Renovated: | Various |
Total Units: | 1,644 |
Property Management: | Sandalwood Management, Inc. |
Underwritten NOI: | $6,421,137 |
Underwritten NCF: | $5,927,937 |
Appraised Value(4): | $99,310,000 |
Appraisal Date: | July 13, 2015 |
Historical NOI | |
Most Recent NOI(5): | $6,017,102 (T-12 June 30, 2015) |
2014 NOI(5): | $6,448,976 (December 31, 2014) |
2013 NOI: | $6,406,928 (December 31, 2013) |
2012 NOI: | $5,872,126 (December 31, 2012) |
Historical Occupancy | |
Most Recent Occupancy: | 96.4% (July 31, 2015) |
2014 Occupancy(5): | 90.5% (December 31, 2014) |
2013 Occupancy(5): | 94.3% (December 31, 2013) |
2012 Occupancy: | NAV |
(1) | The borrowers under the Sandalwood Portfolio Loan are SAT Brandon Oaks Apts., LTD.; TX Arlington Oaks Apts., LTD.; Cimarron Crossing Apts., LTD.; SAT Oaks of Northgate Apts., LTD.; Sugar Tree Apts., LTD.; Sundance Apts., LTD.; WEB Lakeshire Place Apts., LTD. |
(2) | Partial release is permitted. See “Partial Release” herein. |
(3) | See “Initial Reserves” and “Ongoing Reserves” herein. |
(4) | The portfolio Appraised Value of $99.31 million reflects a premium attributed to the aggregate value of the Sandalwood Portfolio Properties as a whole. The sum of the value of each of the Sandalwood Portfolio Properties on an individual basis is $97.58 million, which represents a Cut-off Date LTV and Balloon LTV of 64.5% and 51.7%, respectively. |
(5) | The decline in Most Recent NOI compared to 2014 NOI and the decline in 2014 Occupancy compared to 2013 Occupancy reflects the renovation of 24 units damaged in a fire at the Oaks of Northgate Property. The units were totally renovated and have re-entered the leasing pool as of August 2015. |
B-25 |
Various, TX | Collateral Asset Summary – Loan No. 3 Sandalwood Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $62,912,576 63.3% 1.60x 10.2% |
Portfolio Summary | |||||||
Property Name | Location | Units | Year Built / Renovated | Allocated Loan Amount | Appraised Value(1) | Occupancy(2) | |
Oaks of Northgate | San Antonio, TX | 276 | 1985 / 2015 | $10,550,000 | $16,400,000 | 89.9% | |
Cimarron Crossing | Austin, TX | 160 | 1981 / NAP | $10,450,000 | $15,460,000 | 100.0% | |
Brandon Oaks | San Antonio, TX | 276 | 1986 / 2015 | $10,200,000 | $17,200,000 | 96.4% | |
Sugar Tree Apartments | Corpus Christi, TX | 250 | 1983 / NAP | $9,450,000 | $13,650,000 | 94.4% | |
Arlington Oaks | Arlington, TX | 202 | 1981 / NAP | $8,500,000 | $12,630,000 | 98.0% | |
Lakeshire Place | Webster, TX | 304 | 1979 / NAP | $8,250,000 | $14,140,000 | 98.7% | |
Sundance Apartments | San Antonio, TX | 176 | 1972 / NAP | $5,600,000 | $8,100,000 | 100.0% | |
Total / Wtd. Avg. | 1,644 | $63,000,000 | $97,580,000 | 96.4% | |||
Total with Portfolio Premium | $99,310,000 |
(1) | The portfolio Appraised Value of $99.31 million reflects a premium attributed to the aggregate value of the Sandalwood Portfolio Properties as a whole. The sum of the value of each of the Sandalwood Portfolio Properties on an individual basis is $97.58 million. |
(2) | Occupancy based on rent rolls dated July 31, 2015. |
The Loan. The Sandalwood Portfolio loan (the “Sandalwood Portfolio Loan”) is a fixed rate loan secured by the borrowers’ fee simple interest in a 1,644 unit multifamily portfolio located in Texas within the cities of San Antonio, Austin, Corpus Christi, Arlington and Webster, collectively the “Sandalwood Portfolio Properties” with an original principal balance of $63.0 million. The Sandalwood Portfolio Loan has a 10-year term and amortizes on a 30-year schedule. The Sandalwood Portfolio Loan accrues interest at a fixed rate of 4.2100% and has a cut-off date balance of $62,912,576. The Sandalwood Portfolio Loan proceeds were used to refinance the refinance approximately $37.7 million of existing debt, fund upfront reserves of approximately $2.0 million, pay closing costs of approximately $0.8 million and return approximately $22.5 million of equity to the borrower. Based on the portfolio appraised value of $99.31 million, the cut-off date LTV is 63.3%. The most recent prior financing of the Sandalwood Portfolio Properties was included in the COMM 2006-C7 securitization.
Sources and Uses | ||||||
Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
Mortgage Loan | $63,000,000 | 100.0% | Loan Payoff | $37,742,526 | 59.9% | |
Reserves | $1,994,325 | 3.2% | ||||
Closing Costs | $776,231 | 1.2% | ||||
Return of Equity | $22,486,917 | 35.7% | ||||
Total Sources | $63,000,000 | 100.0% | Total Uses | $63,000,000 | 100.0% |
The Borrowers / Sponsor. The borrowers, SAT Brandon Oaks Apts., LTD., TX Arlington Oaks Apts., LTD., Cimarron Crossing Apts., LTD., SAT Oaks of Northgate Apts., LTD., Sugar Tree Apts., LTD., Sundance Apts., LTD., WEB Lakeshire Place Apts., LTD., are each Texas limited partnerships with two independent directors. Thomas D. Crowson, Sr., M.D. is the sponsor of each of the borrowers and the non-recourse carve-out guarantor for the Sandalwood Portfolio Loan.
Thomas D. Crowson, Sr., M.D. has been in the multifamily and commercial real estate business since the 1970s and his current commercial real estate holdings include approximately 2,361 apartment units in Texas, Mississippi and Arkansas; five new and used car dealerships in Mississippi; eight Newks Eatery Restaurants in Birmingham, Alabama, as well as in Austin and Houston, Texas; two Country Clubs/Golf Courses in Florida and Mississippi; and a Modular Home Builder in Georgia.
The Properties.The Sandalwood Portfolio Properties consists of seven Class B/C garden-style apartment complexes located in Texas, within five markets, including San Antonio, Austin, Corpus Christi, Arlington and Webster. The properties were built between 1972 and 1986, and acquired by the sponsor between 1993 and 1995. Since acquisition, the sponsor invested approximately $12.3 million ($7,501/unit) including approximately $1.6 million ($954/unit) spent in 2015 for capital improvements to renovate and update each of the Sandalwood Portfolio Properties. Amenities at each of the properties generally include a pool, fitness center, leasing office, resident clubhouse and laundry room. Unit amenities generally feature a standard appliance package, washer and dryers, and balcony or patios.
B-26 |
Various, TX | Collateral Asset Summary – Loan No. 3 Sandalwood Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $62,912,576 63.3% 1.60x 10.2% |
Land Use Restriction Agreement: Five of the seven properties are subject to a Land Use Restriction Agreement (“LURA”) requiring 523 units (31.8%) to be leased to tenants who earn less than 80% of the area’s median income (“Low Income Tenants”) and to tenants who earn less than 50% of area median income (“Very Low Income Tenants”). The remaining 1,121 units (68.2%) can be leased at market rents. The LURA’s restrictions can be terminated in one of three ways: 1) a total casualty or condemnation of the applicable property, 2) through lender foreclosure proceedings or other exercise of lender’s remedies under the Mortgage, or 3) through the natural expiration of time (i.e. the later of 40 years from the date of execution of the Agreement or 50 years from the date the property was initially occupied as a multifamily property). Salient details about the 523 units (31.8%) across the properties that are subject to these restrictions are detailed below:
Land Use Restriction Agreement(1) | ||||||||
Property Name | Subject to LURA | Subject to Master LURA | Total Units | Restricted Units | % Restricted | Restricted Low Income (80%) | Very Low Income (50%) | LURA Expiration |
Oaks of Northgate | Yes | Yes | 276 | 97 | 35.1% | 41 | 56 | 2033 |
Cimarron Crossing | No | No | 160 | 0 | 0.0% | 0 | 0 | NAP |
Brandon Oaks | Yes | Yes | 276 | 138 | 50.0% | 82 | 56 | 2033 |
Sugar Tree Apartments | Yes | Yes | 250 | 88 | 35.2% | 38 | 50 | 2034 |
Arlington Oaks | No | No | 202 | 0 | 0.0% | 0 | 0 | NAP |
Lakeshire Place | Yes | No | 304 | 107 | 35.2% | 46 | 61 | 2034 |
Sundance Apartments | Yes | Yes | 176 | 93 | 52.8% | 55 | 38 | 2033 |
Total | 1,644 | 523 | 31.8% | 262 | 261 |
(1) | Source: LURA Agreements and MLURA Agreements for Oaks of Northgate, Brandon Oaks, Lakeshire Place, Sugar Tree Apartments and Sundance Apartments. |
According to the Sugar Tree Apartments appraisal, the Low Income Tenant rents do not impact rent levels that can be achieved at the properties subject to the LURA, because the monthly rental rates for both tenants that pay market level rents and Low Income Tenants are the same. However, the rental rates that Very Low Income Tenants pay are discounted when compared to market rental rates. Four of the five properties subject to the LURA, are also subject to Master LURAs (as indicated above), which designate occupancy requirements on a portfolio basis. The Master LURAs provide the sponsor with the flexibility to allocate the income restricted units across the portfolio which helps manage vacancy, rental rates, and move-outs across the portfolio.
Oaks of Northgate (16.7% of Total Loan Amount)is a 276-unit Class B garden-style apartment complex located at 8000 Oakdell Way in San Antonio, Texas. Built in 1985, and renovated in 2015, the property contains 19, two and three-story residential buildings. The property underwent renovations in 2015, consisting of complete renovations to 24 units that were damaged in a fire at building one. The units have been totally renovated and have re-entered the leasing pool in August. According to the sponsor, rents on these units are projected to be higher than comparable size units in the other buildings at this property and the units are expected to lease-up in a short period. The property has a total of 419 open surface parking spaces which equates to a parking ratio of 1.5 spaces per unit. As of July 31, 2015, Oaks of Northgatewas 89.9% occupied. Concessions are currently offered on the one-bedroom units and are reflected in the quoted rents shown below.
Unit Mix Summary – Oaks of Northgate(1) | ||||||||||
Unit Type | # | Unit Size (Sq. Ft.) | % of Total Units | Occupied Units | Occupancy Rate | Avg. Monthly Rental Rate | Avg. Monthly Rental Rate PSF | Monthly Market Rental Rate(2) | Monthly Market Rate PSF(2) | |
1 Bed / 1 Bath | 72 | 660 | 26.1% | 70 | 97.2% | $650 | $0.99 | $625 | $0.95 | |
1 Bed / 1 Bath(3) | 8 | 660 | 2.9% | 0(4) | 0.0% | NAV(4) | NAV(4) | $675 | $1.02 | |
1 Bed / 1 Bath(5) | 16 | 660 | 5.8% | 0(4) | 0.0% | NAV(4) | NAV(4) | $775 | $1.17 | |
1 Bed / 1 Bath | 44 | 710 | 15.9% | 44 | 100.0% | $671 | $0.95 | $640 | $0.90 | |
2 Bed / 2 Bath | 64 | 838 | 23.2% | 62 | 96.9% | $753 | $0.90 | $765 | $0.91 | |
2 Bed / 2 Bath | 72 | 966 | 26.1% | 72 | 100.0% | $825 | $0.85 | $840 | $0.87 | |
Total / Wtd. Avg. | 276 | 789 | 100.0% | 248 | 89.9% | $730 | $0.93 | $726 | $0.92 |
(1) | Source: July 31, 2015 rent roll. |
(2) | Source: Appraisal. |
(3) | Units fully renovated after a building fire. The units that received upgraded flooring and appliances command a $50 premium according to management. |
(4) | Occupied units exclude 24 units significantly damaged in a fire. Renovations were completed in August 2015 and the units are in the process of being leased. |
(5) | Units fully renovated after a building fire, and command a $150 premium according to management. |
B-27 |
Various, TX | Collateral Asset Summary – Loan No. 3 Sandalwood Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $62,912,576 63.3% 1.60x 10.2% |
Cimarron Crossing (16.6% of Total Loan Amount)is a 160-unit Class B garden-style apartment complex located at 9500 Jollyville Road in Austin, Texas. Built in 1981, the property contains 34, one- and two-story residential buildings. The property has 263 surface parking spaces for a parking ratio of 1.6 spaces per unit. As of July 31, 2015, Cimarron Crossing was 100.0% occupied.
Unit Mix Summary – Cimarron Crossing(1) | |||||||||
Unit Type | # | Unit Size (Sq. Ft.) | % of Total Units | Occupied Units | Occupancy Rate | Avg. Monthly Rental Rate | Avg. Monthly Rental Rate PSF | Monthly Market Rental Rate(2) | Monthly Market Rate PSF(2) |
Studio | 24 | 400 | 15.0% | 24 | 100.0% | $690 | $1.73 | $725 | $1.81 |
1 Bed / 1 Bath | 62 | 700 | 38.8% | 62 | 100.0% | $842 | $1.20 | $860 | $1.23 |
1 Bed / 1 Bath | 30 | 750 | 18.8% | 30 | 100.0% | $867 | $1.16 | $900 | $1.20 |
1 Bed / 1 Bath | 8 | 780 | 5.0% | 8 | 100.0% | $957 | $1.23 | $1,000 | $1.28 |
2 Bed / 2.5 Bath | 12 | 1,020 | 7.5% | 12 | 100.0% | $1,106 | $1.08 | $1,189 | $1.17 |
2 Bed / 2 Bath | 24 | 1,025 | 15.0% | 24 | 100.0% | $1,084 | $1.06 | $1,200 | $1.17 |
Total / Wtd. Avg. | 160 | 741 | 100.0% | 160 | 100.0% | $886 | $1.24 | $930 | $1.25 |
(1) | Source: July 31, 2015 rent roll. |
(2) | Source: Appraisal. |
Brandon Oaks (16.2% of Total Loan Amount)is a 276-unit, Class B garden-style apartment complex located at 800 Vista Valet in San Antonio, Texas. Built in 1986, and renovated in 2015, the property contains 29, two- and three-story residential buildings. The property renovation in 2015 included interior upgrades, new carpet and vinyl, appliances, upgrades to the office and club house, in addition to landscaping upgrades, some of which are currently on-going. The property has 419 surface parking spaces and a parking ratio of 1.5 spaces per unit. As of July 31, 2015, Brandon Oaks was 96.4% occupied.
Unit Mix Summary – Brandon Oaks(1) | |||||||||
Unit Type | # of Units | Unit Size | % of Total Units | Occupied Units | Occupancy Rate | Avg. Monthly Rental Rate | Avg. Monthly Rental Rate PSF | Monthly Market Rental Rate(2) | Monthly Market Rate PSF(2) |
1Bed / 1Bath | 41 | 506 | 14.9% | 40 | 97.6% | $580 | $1.15 | $575 | $1.14 |
1Bed / 1Bath | 19 | 506 | 6.9% | 19 | 100.0% | $575 | $1.14 | $575 | $1.14 |
2Bed / 1Bath | 56 | 855 | 20.3% | 54 | 96.4% | $768 | $0.90 | $770 | $0.90 |
2Bed / 1Bath | 72 | 944 | 26.1% | 70 | 97.2% | $803 | $0.85 | $825 | $0.87 |
2Bed / 2Bath | 56 | 1,037 | 20.3% | 53 | 94.6% | $881 | $0.85 | $880 | $0.85 |
3Bed / 2Bath | 32 | 1,174 | 11.6% | 30 | 93.8% | $1,091 | $0.93 | $1,054 | $0.90 |
Total / Wtd. Avg. | 276 | 876 | 100.0% | 266 | 96.4% | $794 | $0.91 | $797 | $0.91 |
(1) | Source: July 31, 2015 rent roll. |
(2) | Source: Appraisal. |
Sugar Tree Apartments (15.0% of Total Loan Amount)is a 250-unit Class B garden-style apartment complex located at 8050 South Padre Island Drive in Corpus Christi, Texas. Built in 1983, the property contains 16, two- and three-story residential buildings. The property has 439 open surface parking spaces which equates to a parking ratio of 1.8 spaces per unit. As of July 31, 2015, Sugar Tree Apartments was 94.4% occupied.
Unit Mix Summary – Sugar Tree Apartments(1) | |||||||||
Unit Type | #of Units | Unit Size (Sq. Ft.) | % of Total Units | Occupied Units | Occupancy Rate | Avg. Monthly Rental Rate | Avg. Monthly Rental Rate PSF | Monthly Market Rental Rate(2) | Monthly Market Rate PSF(2) |
1Bed / 1Bath | 80 | 540 | 32.0% | 79 | 98.8% | $681 | $1.26 | $705 | $1.31 |
1Bed / 1Bath | 16 | 600 | 6.4% | 16 | 100.0% | $727 | $1.21 | $750 | $1.25 |
1Bed / 1Bath | 50 | 670 | 20.0% | 46 | 92.0% | $765 | $1.14 | $765 | $1.14 |
1Bed / 1Bath | 24 | 745 | 9.6% | 15 | 62.5% | $843 | $1.13 | $800 | $1.07 |
1Bed / 1Bath | 12 | 890 | 4.8% | 12 | 100.0% | $869 | $0.98 | $900 | $1.01 |
2Bed / 1Bath | 24 | 825 | 9.6% | 24 | 100.0% | $879 | $1.07 | $905 | $1.10 |
2Bed / 1.5Bath | 8 | 1,125 | 3.2% | 8 | 100.0% | $1,026 | $0.91 | $1,050 | $0.93 |
2Bed / 2Bath | 36 | 1,000 | 14.4% | 36 | 100.0% | $994 | $0.99 | $1,000 | $1.00 |
Total / Wtd. Avg. | 250 | 719 | 100.0% | 236 | 94.4% | $800 | $1.11 | $811 | $1.13 |
(1) | Source: July 31, 2015 rent roll. |
(2) | Source: Appraisal. |
B-28 |
Various, TX | Collateral Asset Summary – Loan No. 3 Sandalwood Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $62,912,576 63.3% 1.60x 10.2% |
Arlington Oaks (13.5% of Total Loan Amount)is a 202-unit Class B garden-style apartment complex located at 1111 Honeysuckle Way in Arlington, Texas. Built in 1981, the property contains 20, one-, two-, and three-story residential buildings. The property has 362 surface parking spaces which equates to a parking ratio of 1.8 spaces per unit. As of July 31 2015, Arlington Oaks was 98.0% occupied. The Arlington Oaks property is legal non-conforming as to zoning with respect to the use of the property as a multifamily dwelling.For additional information, see “Risk Factors—Risks Related to the Mortgage Loans—Risks Related to Zoning Laws” in the free writing prospectus.
Unit Mix Summary – Arlington Oaks(1) | |||||||||
Unit Type | # of Units | Unit Size | % of Total Units | Occupied Units | Occupancy Rate | Avg. Monthly Rental Rate | Avg. Monthly Rental Rate PSF | Monthly Market Rental Rate(2) | Monthly Market Rate PSF (2) |
1 Bed / 1 Bath | 78 | 556 | 38.6% | 78 | 100.0% | $601 | $1.08 | $645 | $1.16 |
1 Bed / 1 Bath | 30 | 684 | 14.9% | 30 | 100.0% | $637 | $0.93 | $685 | $1.00 |
1 Bed / 1 Bath | 20 | 775 | 9.9% | 20 | 100.0% | $723 | $0.93 | $760 | $0.98 |
1 Bed / 1 Bath | 18 | 850 | 8.9% | 18 | 100.0% | $737 | $0.87 | $770 | $0.91 |
1 Bed / 1 Bath | 4 | 914 | 2.0% | 4 | 100.0% | $818 | $0.89 | $855 | $0.94 |
2 Bed / 2 Bath | 16 | 950 | 7.9% | 12 | 75.0% | $843 | $0.89 | $865 | $0.91 |
2 Bed / 2 Bath | 8 | 954 | 4.0% | 8 | 100.0% | $818 | $0.86 | $865 | $0.91 |
2 Bed / 2 Bath | 8 | 972 | 4.0% | 8 | 100.0% | $844 | $0.87 | $895 | $0.92 |
2 Bed / 2 Bath | 20 | 1,105 | 9.9% | 20 | 100.0% | $931 | $0.84 | $1,015 | $1.00 |
Total / Wtd. Avg. | 202 | 748 | 100.0% | 198 | 98.0% | $702 | $0.94 | $750 | $1.00 |
(1) | Source: July 31, 2015 rent roll. |
(2) | Source: Appraisal. |
Lakeshire Place (13.1% of Total Loan Amount)is a 304-unit Class B garden-style apartment complex located at 503 El Dorado Boulevard in Webster, Texas. Built in 1979, the property contains 20, two-story residential buildings. The property has 486 surface parking spaces which equates to a parking ratio of 1.6 spaces per unit. As of July 31, 2015, Lakeshire Place was 98.7% occupied.
Unit Mix Summary – Lakeshire Place(1) | |||||||||
Unit Type | # of Units | Unit Size | % of Total Units | Occupied Units | Occupancy Rate | Avg. Monthly Rental Rate | Avg. Monthly Rental Rate PSF | Monthly Market Rental Rate(2) | Monthly Market Rate PSF (2) |
1Bed / 1Bath | 4 | 539 | 1.3% | 4 | 100.0% | $663 | $1.23 | $650 | $1.21 |
1Bed / 1Bath | 76 | 539 | 25.0% | 76 | 100.0% | $582 | $1.08 | $595 | $1.10 |
1Bed / 1Bath | 12 | 660 | 3.9% | 11 | 91.7% | $721 | $1.09 | $740 | $1.12 |
1Bed / 1Bath | 108 | 660 | 35.5% | 107 | 99.1% | $612 | $0.93 | $625 | $0.95 |
2Bed / 1Bath | 48 | 857 | 15.8% | 46 | 95.8% | $778 | $0.91 | $795 | $0.93 |
2Bed / 2Bath | 56 | 950 | 18.4% | 56 | 100.0% | $840 | $0.88 | $855 | $0.90 |
Total / Wtd. Avg. | 304 | 713 | 100.0% | 300 | 98.7% | $677 | $0.95 | $692 | $0.97 |
(1) | Source: July 31, 2015 rent roll. |
(2) | Source: Appraisal. |
Sundance Apartments (8.9% of Total Loan Amount)is a 176-unit Class B/C garden-style apartment complex located at 4615 Gardendale Street in San Antonio, Texas. Built in 1972, the property contains 23, two-story residential buildings. The property has 274 open surface parking spaces which equates to a parking ratio of 1.6 spaces per unit. As of July 31, 2015, Sundance Apartments was 100.0% occupied.
Unit Mix Summary – Sundance Apartments(1) | |||||||||
Unit Type | # of Units | Unit Size | % of Total Units | Occupied Units | Occupancy Rate | Avg. Monthly Rental Rate | Avg. Monthly Rental Rate PSF | Monthly Market Rental Rate(2) | Monthly Market Rate PSF (2) |
1Bed / 1Bath | 56 | 523 | 31.8% | 56 | 100.0% | $568 | $1.09 | $565 | $1.08 |
1Bed / 1Bath | 32 | 709 | 18.2% | 32 | 100.0% | $632 | $0.89 | $625 | $0.88 |
2Bed / 2Bath | 48 | 909 | 27.3% | 48 | 100.0% | $726 | $0.80 | $695 | $0.76 |
2Bed / 2Bath | 24 | 1,037 | 13.6% | 24 | 100.0% | $822 | $0.79 | $754 | $0.73 |
3Bed / 2Bath | 16 | 1,258 | 9.1% | 16 | 100.0% | $958 | $0.76 | $884 | $0.70 |
Total / Wtd. Avg. | 176 | 799 | 100.0% | 176 | 100.0% | $693 | $0.87 | $666 | $0.83 |
(1) | Source: July 31, 2015 rent roll. |
(2) | Source: Appraisal. |
B-29 |
Various, TX | Collateral Asset Summary – Loan No. 3 Sandalwood Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $62,912,576 63.3% 1.60x 10.2% |
Environmental Matters.The Phase I environmental reports dated July 17, 2015 recommended no further action at the Sandalwood Portfolio Properties.
The Market.
San Antonio(Three properties; 728 units; 41.8% of Total Loan Amount) The Brandon Oaks, Oaks of Northgate and Sundance Apartments properties are located in San Antonio, Texas within the San Antonio MSA. The San Antonio MSA occupies approximately 368.6 square miles and spans the counties of Atascosa, Bandera, Bexar, Comal, Guadalupe, Kendall, Medina and Wilson. According to the appraiser, employment in San Antonio has increased more than both the national average and the average for Texas over the past year and unemployment has declined to a cyclical low of 3.8%. Major economic drivers in the area include government and military, healthcare, energy and construction. As of Q1 2015, the San Antonio apartment market contains 145,002 sq. ft. of existing supply, with 4,392 units coming online in the last 12 months. Average occupancy over that time period was 92.6%, compared to 96.4%, 89.9% (including 24 fully renovated units that came online in August 2014 after fire damage) and 100.0% at the Brandon Oaks, Oaks of Northgate and Sundance Apartments properties, respectively, as of July 31, 2015. Average rent PSF per month for the San Antonio Market as of Q1 2015 was $1.03, compared to $0.91, $0.93 and $0.87 for the Brandon Oaks, Oaks of Northgate and Sundance Apartments properties, respectively. Over the past 12 months, absorption in the San Antonio MSA has been a positive at 6,145 units.
Austin(One property; 160 units; 16.6% of Total Loan Amount) The Cimarron Crossing property is located within the Austin City MSA, about 15 miles northwest of the Austin CBD. According to the appraiser, the unemployment rate in the Austin MSA is 3.5%, below the U.S. average and the labor force is rising rapidly. Economic drivers in the MSA include the IT Industry, residential construction and state government, as Austin the state capital, as well as the University of Texas. According to the appraiser, the area experienced a 1.40% growth in population from 2010-2015 and has a median household income of $55,622 within a 5 mile radius of the Cimarron Crossing property. As of Q1 2015, the Austin MSA has a total of 158,822 existing apartments units, 2,175 of which were constructed in the last 12 months. For that same time period average occupancy was 93.8%, compared to 100.0% at Cimarron Crossing property as of July 31, 2015, and average monthly rent was $1.28 PSF compared to $1.24 PSF for the Cimarron Crossing property.
Corpus Christi (One property; 250 units; 15.0% of Total Loan Amount) The Sugar Tree Apartments property is located in the Corpus Christi metro area. According to the appraiser, Corpus Christi’s economy continues to expand despite downward pressure from declining oil prices with an unemployment rate of 5%. The economy is supported by large scale investment projects spurred by the recent boom as well as the Port of Corpus Christi, which is the sixth largest in the world by tonnage and is expected to grow even larger with the construction of the LA Quinta Container Terminal. Economic drivers in the area include the oil and natural gas industry, university research centers and premier healthcare facilities as well as the region’s tropical climate and wealth of outdoor activities. According to the appraiser, the area has experienced a 1.43% growth in population from 2010-2015 and has a median household income of $59,055 within a 5 mile radius of the Sugar Tree Apartments property. As of June 2015, the Corpus Christi metro area contained 23,467 apartment units, with 737 units coming online in the last 12 months. Over the last 12 months absorption was positive at 1,111 units. Average occupancy as of June 2015 was 91.5%, compared to 94.4% at Sugar Tree Apartments property as of July 31, 2015, and average rent PSF per month was $1.08, compared to $1.11 rents achieved at the Sugar Tree Apartments property.
Fort Worth-Arlington (One property; 202 units; 13.5% of Total Loan Amount) The Arlington Oaks property is located in the Fort Worth-Arlington metro area. According to the appraiser, the economy of the Fort Worth-Arlington metro area is growing faster than the nation as a whole, led by gains in personal services and construction. The unemployment rate has declined over the past year and a half and is at a cyclical low of 4.1%. Economic drivers in the area include transportation and air travel (supported by DFW Airport, the world’s third busiest airport), aerospace manufacturing and residential construction. According to the appraiser, there are three new projects expected to be delivered to the submarket over the next two years, and net absorption is projected to negative over the next year. However, the new supply is not expected to compete with the subject owing to its vintage and construction class. According to the appraiser, the area has experienced a 0.79% growth in population from 2010-2015 and has a median household income of $40,695 within a 5 mile radius of the Arlington Oaks property. There are 172,893 apartment units in the Fort Worth-Arlington metro area and the appraiser concluded to an occupancy of 95.1%, compared to 98.0% at Arlington Oaks property as of July 31, 2015, and average rent PSF per month of $0.94, compared to rent of $0.94 PSF per month at Arlington Oaks property.
B-30 |
Various, TX | Collateral Asset Summary – Loan No. 3 Sandalwood Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $62,912,576 63.3% 1.60x 10.2% |
Webster/Houston (One property; 304 units; 13.1% of Total Loan Amount) The Lakeshire Place property is located in Webster, Texas, a suburb approximately 24 miles southeast of the Houston central business district, within The Woodlands-Sugar Land metro area. According to the appraiser, unemployment in the metro area is near a cyclical low at 4.3% despite the impact of the recent decline in oil prices. Major economic drivers in the area include oil drilling, petrochemical, construction, healthcare and local government. Additionally, the area is home to a technical workforce due to the presence of the NASA/Johnson Space Center, the Clear Lake Medical Center, the Houston Ship Channel and its associated petrochemical complex, which is the largest in the world. According to the appraiser, the area has experienced a 1.67% growth in population from 2010-2015 and has a median household income of $73,173 within a five mile radius of the Lakeshire Place property. As of July 2015, the Clear Lake submarket contained 24,520 units with 913 coming on line in the last five years. Over the last 12 months absorption was positive at 538 units. Average occupancy as of July 2015 was 95.5%, compared to 98.7% at the Lakeshire Place property as of July 31, 2015, and average rent PSF per month was $1.13, compared to $0.95 rents achieved at the Lakeshire Place property.
Overall, the appraiser concluded to an occupancy and market rent of 94.1% and $0.98 PSF per month, which is in line with the in place occupancy and rent for the Sandalwood Portfolio of 96.4% and $0.99 PSF per month.
Market Rate Conclusion | |||||
Property Name | # of Units | Avg. Monthly | Monthly Market | Occupancy Rate(1) | Appraiser Concluded |
Oaks of Northgate | 276 | $0.93 | $0.92 | 89.9% | 94.0% |
Cimarron Crossing | 160 | $1.24 | $1.25 | 100.0% | 95.0% |
Brandon Oaks | 276 | $0.91 | $0.91 | 96.4% | 93.0% |
Sugar Tree Apartments | 250 | $1.11 | $1.13 | 94.4% | 94.0% |
Arlington Oaks | 202 | $0.94 | $1.00 | 98.0% | 95.0% |
Lakeshire Place | 304 | $0.95 | $0.97 | 98.7% | 95.0% |
Sundance Apartments | 176 | $0.87 | $0.83 | 100.0% | 93.0% |
Sandalwood Portfolio | 1,644 | $0.98 | $0.99 | 96.4% | 94.1% |
(1) | Source: July 31, 2015 rent roll. |
(2) | Stabilized occupancy projections, inclusive of concessions and bad debt as determined within the appraisals. |
Cash Flow Analysis.
Cash Flow Analysis | ||||||
2012 | 2013 | 2014 | T-12 6/30/2015 | U/W | U/W per Unit | |
Gross Potential Rent | $13,048,315 | $13,458,617 | $14,028,392 | $14,248,796 | $14,809,372 | $9,008 |
Total Other Income | 1,513,134 | 1,667,579 | 1,661,742 | 1,640,804 | 1,640,804 | 998 |
Less: Vacancy(1) | (951,374) | (647,475) | (1,128,238) | (1,182,354) | (1,483,691) | (902) |
Less: Bad Debt(1) | (158,323) | (141,267) | (140,135) | (151,666) | (138,993) | (85) |
Less: Concessions(1) | (275,597) | (103,745) | (105,310) | (99,366) | (96,571) | (59) |
Effective Gross Income | $13,176,155 | $14,233,709 | $14,316,451 | $14,456,214 | $14,730,922 | $8,960 |
Total Operating Expenses | 7,304,029 | 7,826,781 | 7,867,475 | 8,439,113 | 8,309,785 | 5,055 |
Net Operating Income | $5,872,126 | $6,406,928 | $6,448,976 | $6,017,102 | $6,421,137 | $3,906 |
Capital Expenditures | 0 | 0 | 0 | 0 | 493,200 | 300 |
Net Cash Flow | $5,872,126 | $6,406,928 | $6,448,976 | $6,017,102 | $5,927,937 | $3,606 |
(1) | U/W Vacancy, together with Bad Debt and Concessions represents approximately 11.6% of Gross Potential Rent, which is higher than the appraiser’s concluded average vacancy rate of 5.9% for the Sandalwood Portfolio Properties. |
Property Management. The Sandalwood Portfolio Properties are managed by Sandalwood Management, Inc. Founded in 1985 in Austin, Texas, Sandalwood Management, Inc. has expanded throughout 13 US states and Quebec Canada. The company’s current portfolio includes more than 80 owned and manages properties across North America. The company’s holdings encompass approximately 6.0 million sq. ft. of retail and office space and more than 6,000 multifamily residential units.
B-31 |
Various, TX | Collateral Asset Summary – Loan No. 3 Sandalwood Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $62,912,576 63.3% 1.60x 10.2% |
Lockbox / Cash Management. The Sandalwood Portfolio Loan is structured with a soft lockbox and springing cash management. All rents from the Sandalwood Portfolio Properties are required to be deposited directly into the clearing account by the property manager within one business day of receipt and until the commencement of a Trigger Period (as defined below), all sums deposited in the clearing account will be transferred daily to the borrower’s operating account. Following the commencement of a Trigger Period, funds deposited into the clearing account are required to be swept daily by the clearing bank into a lender controlled deposit account, where the funds are required to be disbursed in accordance with the loan agreement. During a Trigger Period, excess cash flow is deposited into a lender controlled cash collateral account.
A “Trigger Period” will commence (i) upon and during the continuance of an event of default or (ii) if the debt service coverage ratio falls below 1.20x for any calendar quarter and will end if all events of default have been cured and such cure has been accepted by the lender with respect to clause (i) and the debt service coverage ratio has increased to at least 1.25x for two consecutive calendar quarters with respect to clause (ii).
Initial Reserves. At loan closing, the borrowers deposited (i) $1,322,157 into a tax reserve account, (ii) $175,000 into an insurance reserve account, and (iii) $497,169 into a required repairs reserve account, which represents 125% of the engineer’s recommended repairs at the Sandalwood Portfolio Properties.
Ongoing Reserves. On a monthly basis, the borrowers are required to deposit reserves of (i) 1/12 of the estimated annual real estate taxes, which currently equates to $165,270, into a tax reserve account, (ii) $41,100 into a replacement reserve account, which represents 125% of the engineer’s recommendation and (iii) 1/12 of the annual insurance premiums into an insurance reserve account if an acceptable blanket insurance policy is no longer in place.
Current Mezzanine or Subordinate Indebtedness. None.
Future Mezzanine or Subordinate Indebtedness Permitted. None.
Partial Release. After the expiration of the lockout period, the borrowers may obtain the release of an individual property or properties upon an arm’s length third-party sale provided, among other things, (i) the LTV ratio for the remaining properties does not exceed the lesser of the LTV immediately preceding such release and 63.4%, (ii) the DSCR for the remaining properties is not less than the greater of the DSCR immediately preceding the partial release and 1.54x and (iii) the borrowers partially defease the loan in an amount equal to the greater of 125% of the allocated loan amount for the released property or 100% of the net sales proceeds from the released property, which in no event may be less than 94% of the gross sales price of the property to be released.
Substitution.None.
B-32 |
Various, TX | Collateral Asset Summary – Loan No. 3 Sandalwood Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $62,912,576 63.3% 1.60x 10.2% |
B-33 |
Various | Collateral Asset Summary – Loan No. 4 Atlanta Multifamily Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $45,000,000 64.9% 1.30x 8.3% |
B-34 |
Various | Collateral Asset Summary – Loan No. 4 Atlanta Multifamily Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $45,000,000 64.9% 1.30x 8.3% |
Mortgage Loan Information | |
Loan Seller: | GACC |
Loan Purpose: | Acquisition |
Sponsor: | Franck A. Ruimy |
Borrower: | 3Mind Rosemont Cityview, LLC; 3Mind Dawson Forest, LLC; SG Atlantic, LLC; SG Moezinia, LLC; SG Single, LLC; SG Avaria, LLC |
Original Balance: | $45,000,000 |
Cut-off Date Balance: | $45,000,000 |
% by Initial UPB: | 4.8% |
Interest Rate: | 4.8100% |
Payment Date: | 6thof each month |
First Payment Date: | October 6, 2015 |
Maturity Date: | September 6, 2020 |
Amortization(1): | Interest only for first 18 months; 360 months thereafter |
Additional Debt(2): | $5,000,000 Mezzanine Debt |
Call Protection: | L(25), D(31), O(4) |
Lockbox / Cash Management: | Soft / In Place |
Reserves(3) | ||
Initial | Monthly | |
Taxes: | $86,429 | $37,076 |
Insurance: | $0 | Springing |
Replacement: | $0 | $12,250 |
Required Repairs: | $43,750 | NAP |
Capital Expenditure Holdback: | $3,690,000 | $0 |
Tax Reassessment: | $500,000 | $0 |
Financial Information | |||
Mortgage Loan | Total Debt | ||
Cut-off Date Balance / Unit: | $76,531 | $85,034 | |
Balloon Balance / Unit: | $72,968 | $81,076 | |
Cut-off Date LTV(4): | 64.9% | 72.2% | |
Balloon LTV(4): | 61.9% | 68.8% | |
Underwritten NOI DSCR(5): | 1.36x | 1.08x | |
Underwritten NCF DSCR(5): | 1.30x | 1.04x | |
Underwritten NOI Debt Yield: | 8.3% | 7.5% | |
Underwritten NCF Debt Yield: | 8.0% | 7.2% | |
Underwritten NOI Debt Yield at Balloon: | 8.7% | 7.8% | |
Underwritten NCF Debt Yield at Balloon: | 8.3% | 7.5% | |
Property Information | ||||
Single Asset / Portfolio: | Portfolio of two properties | |||
Property Type: | Garden Multifamily | |||
Collateral: | Fee Simple | |||
Location: | Marietta, GA; Dawsonville, GA | |||
Year Built / Renovated: | Various | |||
Total Units: | 588 | |||
Property Management: | Vesta Management Services, LLC | |||
Underwritten NOI: | $3,725,685 | |||
Underwritten NCF: | $3,578,685 | |||
“As-is” Appraised Value: | $63,800,000 | |||
“As-is” Appraisal Date: | June 30, 2015 | |||
“As Renovated” Appraised Value(4): | $69,300,000 | |||
“As Renovated” Appraisal Date: | October 31, 2016 | |||
Historical NOI | ||||
Most Recent NOI: | $3,635,435 (T-12 June 30, 2015) | |||
2014 NOI: | $3,426,383 (December 31, 2014) | |||
2013 NOI: | $3,161,986 (December 31, 2013) | |||
2012 NOI: | $3,014,476 (December 31, 2012) | |||
Historical Occupancy | ||||
Most Recent Occupancy: | 95.6% (June 11, 2015) | |||
2014 Occupancy: | 96.3% (December 31, 2014) | |||
2013 Occupancy: | 96.0% (December 31, 2013) | |||
2012 Occupancy: | 95.6% (December 31, 2012) | |||
(1) | Following an initial 18-month interest only period beginning on the first payment date, the Atlanta Multifamily Portfolio Loan is structured with a fixed amortization schedule based on a non-standard amortization schedule attached as Annex H in the Free Writing Prospectus. |
(2) | See “Current Mezzanine or Subordinate Indebtedness” herein. |
(3) | See “Initial Reserves” and “Ongoing Reserves” herein. |
(4) | The “As Renovated” Appraised Value takes into account upgrades being performed at each property. At closing, $3.69 million was deposited in escrows for capital improvements. Based on the “As-is” appraised value of $63.8 million, the Cut-off Date LTV and Balloon LTV for the Atlanta Multifamily Portfolio Loan are 70.5% and 67.2%, respectively. Based on the “As-is” appraised value of $63.8 million, the Total Debt Cut-off Date LTV and Total Debt Balloon LTV for the Atlanta Multifamily Portfolio Loan are 78.4% and 74.7%, respectively. |
(5) | Based on amortizing debt service payments. Based on the current interest only payments, the Underwritten NOI DSCR and Underwritten NCF DSCR for the mortgage loan are 1.70x and 1.63x, respectively. The Underwritten NOI DSCR and Underwritten NCF DSCR for the total debt are 1.32x and 1.27x, respectively. |
Property Summary | ||||||
Property Name | Location | Units | Year Built / Renovated | Allocated Loan Amount | “As Renovated” Appraised Value | Occupancy(1) |
Rosemont Cityview Apartments | Marietta, GA | 320 | 1987 / 2015 | $23,000,000 | $35,600,000 | 94.4% |
Dawson Forest Apartments | Dawsonville, GA | 268 | 1999 / 2015 | $22,000,000 | $33,700,000 | 97.0% |
Total / Wtd. Avg. | 588 | $45,000,000 | $69,300,000 | 95.6% |
(1) | Based on the June 11, 2015 rent rolls. |
B-35 |
Various | Collateral Asset Summary – Loan No. 4 Atlanta Multifamily Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $45,000,000 64.9% 1.30x 8.3% |
The Loan.The Atlanta Multifamily Portfolio loan (the “Atlanta Multifamily Portfolio Loan”) is a fixed rate loan secured by the borrowers’ fee simple interests in a 588-unit garden multifamily portfolio located at 1650 Barnes Mill Road in Marietta, Georgia (the “Rosemont Cityview Apartments Property”) and 100 Green Forest Drive in Dawsonville, Georgia (the “Dawson Forest Apartment Property”, and together with the Rosemont Cityview Apartments Property, the “Atlanta Multifamily Portfolio Properties”) with an original principal balance of $45.0 million. The Atlanta Multifamily Portfolio Loan has a five-year term and, after an initial 18-month interest only period, amortizes on a non-standard amortization schedule. The Atlanta Multifamily Portfolio Loan accrues interest at a fixed rate equal to 4.8100% and has a cut-off date balance of $45.0 million. The Atlanta Multifamily Portfolio Loan proceeds, along with a $5.0 million mezzanine loan and approximately $17.9 million of sponsor equity were used to acquire the Atlanta Multifamily Portfolio Properties for approximately $61.5 million, fund reserves, a capital expenditure holdback of approximately $3.7 million, a tax reassessment reserve of $0.5 million and pay closing costs of approximately $2.0 million. Based on the “As Renovated” appraised value of the properties of $69.3 million as of October 31, 2016, the cut-off date LTV is 64.9%. The “As Renovated” appraised value takes into account upgrades being performed at each property. At closing, $3.69 million was deposited in escrows for capital improvements. The “As-is” appraised value is approximately $63.8 million as of June 30, 2015.The most recent prior financing of the Dawson Forest Apartments Property was included in the BSCMS 2006-PW13 securitization. The most recent prior financing of the Rosemont Cityview Apartments Property was not included in a securitization.
Sources and Uses | ||||||
Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
Mortgage Loan | $45,000,000 | 66.3% | Purchase Price | $61,500,000 | 90.6% | |
Mezzanine Loan | $5,000,000 | 7.4% | Capital Expenditure Holdback | $3,690,000 | 5.4% | |
Sponsor Equity | $17,854,910 | 26.3% | Tax Reassessment | $500,000 | 0.7% | |
Reserves | $130,179 | 0.2% | ||||
Closing Costs | $2,034,732 | 3.0% | ||||
Total Sources | $67,854,910 | 100.0% | Total Uses | $67,854,910 | 100.0% |
The Borrowers / Sponsor.The borrowers, 3Mind Rosemont Cityview, LLC; SG Atlantic, LLC; SG Moezinia, LLC; SG Single, LLC; and SG Avaria, LLC and 3Mind Dawson Forest, LLC; SG Atlantic, LLC; SG Moezinia, LLC; SG Single, LLC; and SG Avaria, LLC are each newly formed Delaware limited liability companies. 3Mind Rosemont Cityview, LLC and 3Mind Dawson Forest, LLC are each known as a “3Mind Borrower” and are collectively known as the “3Mind Borrowers”. SG Atlantic, LLC; SG Moezinia, LLC; SG Single, LLC; and SG Avaria, LLC are collectively known as the “Core TIC Group”. The Rosemont Cityview Apartments Property is owned by the Core TIC Group and 3Mind Rosemont Cityview, LLC as tenants-in-common and the Dawson Forest Apartments Property is owned by the Core TIC Group and 3Mind Dawson Forest, LLC as tenants-in-common. Each borrower is managed by Franck A. Ruimy. Franck A. Ruimy is the sponsor of each of the 3Mind Borrowers, the manager of each of the borrowers and the non-recourse carve-out guarantor for the Atlanta Multifamily Portfolio Loan.
Franck Ruimy has 22 years of experience in real estate investment, finance and asset management in North America and Europe. Mr. Ruimy is the chief executive officer of Aerium Group, a European real estate investment manager that acquires, owns and manages portfolios of commercial properties for investment funds. Founded in 1988, Aerium is headquartered in Luxembourg and has offices in London, Geneva, Paris, Düsseldorf and Istanbul. Aerium currently manages over €6.1 billion in property assets across 12 countries. Mr. Ruimy also served as director of several of Aerium’s subsidiaries since 1992 and led the 2003 launch of its pan-European investment platform. Mr. Ruimy’s real estate schedule of US assets includes nine rental homes/condos located in New York, NY as well as a big box anchored retail center in Paradise Valley, Arizona.
The Properties.The Atlanta Multifamily Portfolio Properties include two Class B multifamily garden properties totaling 588 units located in Marietta, Georgia and Dawsonville, Georgia. A summary of each property is below:
B-36 |
Various | Collateral Asset Summary – Loan No. 4 Atlanta Multifamily Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $45,000,000 64.9% 1.30x 8.3% |
The Rosemont Cityview Apartments Property
Unit Mix Summary – Rosemont Cityview Apartments(1) | ||||||||||||
Unit Type | # of Units | % of Total | Occupied Units | Occupancy | Avg. Unit Size (Sq. Ft.) | Avg. Monthly Rental Rate | Avg. Monthly Rental Rate PSF | Monthly Market Rental Rate(2) | Monthly Market Rate PSF(2) | “As Renovated” Monthly Market Rental Rate(2) | “As Renovated” Monthly Market Rate PSF(2) | |
1 Bed / 1 Bath | 100 | 31.3% | 91 | 91.0% | 688 | $742 | $1.08 | $735 | $1.07 | $810 | $1.18 | |
1 Bed / 1 Bath | 78 | 24.4% | 75 | 96.2% | 844 | $809 | $0.96 | $900 | $1.07 | $975 | $1.16 | |
1 Bed / 1 Bath | 50 | 15.6% | 49 | 98.0% | 979 | $833 | $0.85 | $1,050 | $1.07 | $1,125 | $1.15 | |
2 Bed / 2 Bath | 92 | 28.8% | 87 | 94.6% | 1,197 | $932 | $0.78 | $1,160 | $0.97 | $1,235 | $1.03 | |
Total / Wtd. Avg. | 320 | 100.0% | 302 | 94.4% | 918 | $827 | $0.90 | $947 | $1.04 | $1,022 | $1.12 | |
(1) | Based on the rent roll dated June 11, 2015. |
(2) | Source: Appraisal. |
The Rosemont Cityview Apartments Property is a 320-unit, Class B garden complex comprised of 24, three-story residential buildings on a 40.9-acre site located at 1650 Barnes Mill Road in Marietta, Georgia. The property was built in 1987 and amenities include an on-site leasing office, clubhouse, fitness center, outdoor kitchen, sand volleyball court, lighted tennis court and swimming pool. The residential units feature carpeting and vinyl tile flooring, standard kitchen appliances, ceiling fans, laundry connections and patio or balconies. In addition, the property has 621 open surface spaces, which equates to 1.94 parking spaces per unit.
The borrowers have budgeted $2,080,732 ($6,502 per unit) to be invested in capital improvements at the Rosemont Cityview Apartments Property including interior upgrades, improvement of shared amenities, and exterior renovations. The full amount of the renovation budget has been reserved upfront. Of a total of 320 units at the property, 54 units were recently renovated by the seller of the Rosemont Cityview Apartments Property and are generating rental premiums of $75 per unit. A tiered renovation plan will be implemented for 50% of the remaining unrenovated units (total of 133 units), with 50% receiving level 1 upgrades and 50% receiving level 2 upgrades. The interior renovations will be completed as units are vacated with an overall budget of $4,211 per unit for the 133 units that fall under the current capital improvement plan. Interior upgrades will include plank flooring, new cabinets, new countertops, new appliances, upgraded carpeting, upgraded hardware and lighting and new paint colors including an accent wall. Exterior upgrades will include upgrades and improvements to the roof, landscaping, ironwork, paving, pool and pool area amenities, signage and renovations to the leasing center and model units. The U/W NCF does not take into account any rental premiums for the planned upgrades.
Rosemont Cityview Apartments Capital Expenditure Budget | ||
Capital Expenditures | Budgeted Renovations | Budgeted Renovations per Unit |
Interior Upgrades | $560,000 | $4,211(1) |
Exterior/Amenity Upgrades(2) | $1,520,732 | $4,752 |
Total | $2,080,732 | $6,502(3) |
(1) | Represents the amount of Budgeted Renovations per Unit for 133 units selected for interior upgrades at the property. |
(2) | Exterior/Amenity upgrades include contingency budget and construction fee. |
(3) | Based on 320 units. |
The Dawson Forest Apartments Property
Unit Mix Summary – Dawson Forest Apartments(1) | |||||||||||
Unit Type | # of Units | % of Total | Occupied Units | Occupancy | Average Unit Size (Sq. Ft.) | Average Monthly Rental Rate | Average Monthly Rental Rate PSF | Monthly Market Rental Rate(2) | Monthly Rental Rate PSF(2) | “As Renovated” Monthly Market Rental Rate(2) | “As Renovated” Monthly Market Rate PSF(2) |
1 Bed / 1 Bath | 84 | 31.3% | 81 | 96.4% | 778 | $772 | $0.99 | $800 | $1.03 | $875 | $1.12 |
2 Bed / 2 Bath | 71 | 26.5% | 69 | 97.2% | 1,109 | $878 | $0.79 | $975 | $0.88 | $1,050 | $0.95 |
2 Bed / 2 Bath | 73 | 27.2% | 71 | 97.3% | 1,144 | $915 | $0.80 | $1,000 | $0.87 | $1,075 | $0.94 |
3 Bed / 2 Bath | 40 | 14.9% | 39 | 97.5% | 1,378 | $1,107 | $0.80 | $1,225 | $0.89 | $1,300 | $0.94 |
Total / Wtd. Avg. | 268 | 100.0% | 260 | 97.0% | 1,055 | $889 | $0.83 | $964 | $0.91 | $1,039 | $0.97 |
(1) | Based on the rent roll dated June 11, 2015. |
(2) | Source: Appraisal. |
B-37 |
Various | Collateral Asset Summary – Loan No. 4 Atlanta Multifamily Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $45,000,000 64.9% 1.30x 8.3% |
The Dawson Forest Apartments Property is a 268-unit, Class B garden complex comprised of 23, two- and three-story residential buildings and five amenity buildings on a 23.1-acre site located at 100 Green Forest Drive in Dawsonville, Georgia. The property was built in 1999 and amenities include a resort-style swimming pool with a pergola, detached garages, lighted tennis court, 24-hour fitness center, clubhouse, cyber lounge, controlled access gates, playground, car care center and laundry facility. The residential units feature carpeting and vinyl tile flooring, standard kitchen appliances, ceiling fans, laundry connections and patio or balconies. In addition, the property has 534 open surface spaces and 15 covered spaces, which equates to 2.05 parking spaces per unit.
The borrowers have budgeted $1,609,268 ($6,005 per unit) to be invested in capital improvements at the Dawson Forest Apartments Property including interior upgrades, improvement of shared amenities, and exterior renovations. The full amount of the renovation budget has been reserved upfront. A tiered renovation plan will be implemented for 50% of the units (total of 134 units), with 50% receiving level 1 upgrades and 50% receiving level 2 upgrades. The interior renovations will be completed as units are vacated with an overall budget of $3,500 per unit for the 134 units that fall under the current capital improvement plan. Interior upgrades will include plank flooring, new cabinets, new countertops, new appliances, upgraded carpeting, upgraded hardware and lighting and new paint colors including an accent wall. Exterior upgrades will include upgrades and improvements to the roof, landscaping, ironwork, paving, pool and pool area amenities, signage and renovations to the leasing center and model units. The U/W NCF does not take into account any rental premiums for the planned upgrades.
Dawson Forest Apartments Capital Expenditure Budget | ||
Capital Expenditures | Budgeted Renovations | Budgeted Renovations per Unit |
Interior Upgrades | $469,000 | $3,500(1) |
Exterior/Amenity Upgrades(2) | $1,110,268 | $4,143 |
Total | $1,609,268 | $6,005(3) |
(1) | Represents the amount of Budgeted Renovations per Unit for 134 units selected for interior upgrades at the property. |
(2) | Exterior/Amenity upgrades include contingency budget and construction fee. |
(3) | Based on 268 units. |
Environmental Matters.The Phase I environmental reports dated July 13, 2015 recommended no further action at the Rosemont Cityview Apartments Property or the Dawson Forest Apartments Property.
The Market.
Atlanta-Sandy Springs-Roswell MSAThe Atlanta Multifamily Portfolio Properties are located in the Atlanta-Sandy Springs-Roswell metropolitan statistical area (“Atlanta MSA”). The Atlanta MSA has a total estimated population of 5,527,230 as of 2015 and has experienced an annual growth rate of 0.9% since 2010. Atlanta is the primary transportation hub of the southeast region of the country, via highway, railroad, and air, with Hartsfield - Jackson Atlanta International Airport holding the title of the world’s busiest airport since 1998. The Atlanta metropolitan area is the eighth largest economy in the country and 17th largest in the world. Corporate operations comprise a large portion of the Atlanta’s economy, with the city serving as the regional, national or global headquarters for many corporations such as 19 Fortune 500 companies, including Delta Airlines, Wal-Mart Stores, AT&T, UPS, Coca-Cola and Home Depot. The unemployment rate in the region decreased to 5.9% in May 2015 from 6.8% in Q4 2014. The 2015 median household income for the Atlanta MSA was $56,889, which is higher than the state’s median income of $49,210 and the country’s median income of $53,217.
The Rosemont Cityview Apartments Property is located within the Marietta multifamily submarket. The average submarket vacancy in Q2 2015 reached a low of 3.4%, representing an improvement of 0.2% from the previous quarter and 1.0% from Q2 2014. Monthly effective rental rates averaged $835 per unit in Q2 2015, representing a 1.0% increase from the previous quarter and a 3.2% increase from Q2 2014. In Q2 2015, properties of the same vintage as the Rosemont Cityview Apartments Property (built between 1980 and 1989) reported average monthly asking rent of $873 per unit and an average vacancy rate of 3.2%.
Rosemont Cityview Apartments Property Competitive Set(1) | ||||||
Name | Rosemont Cityview Apartments Property | Jefferson at Lakeside | Watermark at East Cobb | The Knolls | Falls at Sope Creek | Azalea Springs |
Location | 1650 Barnes Mill Road | 2085 Roswell Road | 2000 East Lake Way | 1675 Roswell Road | 1950 Roswell Road | 2010 Roswell Road |
City | Marietta | Marietta | Marietta | Marietta | Marietta | Marietta |
Year Built | 1987 | 1992 | 1986 | 1983 | 1984 | 1995 |
Total Occupancy | 94.4%(2) | 91.2% | 96.6% | 94.0% | 95.6% | 97.4% |
Units | 320 | 323 | 510 | 312 | 463 | 232 |
Average Rent per Unit | $827(2) | $897 | $1,260 | $879 | $913 | $1,002 |
Average Rent PSF | $0.90(2) | $0.91 | $1.20 | $0.89 | $0.99 | $1.09 |
(1) | Source: Appraisal. |
(2) | As of the June 11, 2015 rent roll. |
B-38 |
Various | Collateral Asset Summary – Loan No. 4 Atlanta Multifamily Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $45,000,000 64.9% 1.30x 8.3% |
The Dawson Forest Apartments Property is located in Dawsonville, Georgia, which falls outside of the submarkets tracked by standard market research reports. The property is approximately 50 miles north of downtown Atlanta. The primary competitive set shown below represents the closest properties achieving similar rental rates. As exhibited below, the average monthly rent at Dawson Forest Apartments Property falls within range of the comparables on a per unit and PSF basis. Despite the Dawson Forest Apartments Property being further from Atlanta then its primary competitive set, the property benefits from the absence of competitive properties within the town of Dawsonville and the above average household income within a five-mile radius of the property ($84,144 versus national average and State of Georgia of $74,699 and $68,131, respectively).
Dawson Forest Apartments Property Competitive Set(1) | ||||||
Name | Dawson Forest Apartments Property | Park Creek | Carrington Park at Lanier | Lake Lanier Club | Preston Pointe at Windemere | Evergreen at Aubrey’s Landing |
Location | 100 Green Forest Drive | 1100 Park Creek | 150 Carrington Park Drive | 1701 Dawsonville Highway | 3100 Preston Pointe Way | 3305 Hutchinson Road |
City | Dawsonville | Gainesville | Gainesville | Gainesville | Cumming | Cumming |
Year Built | 1999 | 1997 | 2007 | 1998 | 2001 | 2000 |
Total Occupancy | 97.0%(2) | 100.0% | 96.5% | 98.0% | 96.0% | 97.2% |
Units | 268 | 200 | 303 | 517 | 346 | 184 |
Average Rent per Unit | $888(2) | $843 | $825 | $970 | $1,174 | $1,238 |
Average Rent PSF | $0.83(2) | $0.88 | $0.88 | $0.83 | $0.94 | $1.00 |
(1) | Source: Appraisal. |
(2) | As of the June 11, 2015 rent roll. |
Cash Flow Analysis.
CashFlow Analysis | ||||||
2012 | 2013 | 2014 | T-12 6/30/2015 | U/W | U/W per Unit | |
Gross Potential Rent | $5,622,819 | $5,851,033 | $5,964,789 | $5,988,910 | $6,065,712 | $10,316 |
Total Other Income | 576,432 | 578,559 | 726,173 | 757,946 | 757,946 | 1,289 |
Less: Concessions(1) | (676,098) | (738,637) | (635,749) | (496,392) | (327,910) | (558) |
Less: Vacancy(2) | (253,747) | (248,631) | (210,565) | (187,397) | (337,199) | (573) |
Less: Credit Loss & Bad Debt | (35,292) | (32,509) | (19,038) | (14,312) | 0 | 0 |
Effective Gross Income | $5,234,114 | $5,409,815 | $5,825,610 | $6,048,756 | $6,158,549 | $10,474 |
Total Expenses | 2,219,638 | 2,247,829 | 2,399,227 | 2,413,321 | 2,432,865 | 4,138 |
Net Operating Income | $3,014,476 | $3,161,986 | $3,426,383 | $3,635,435 | $3,725,685 | $6,336 |
Replacement Reserves | 147,000 | 147,000 | 147,000 | 147,000 | 147,000 | 250 |
Capital Expenditures | 131,061 | 277,167 | 285,802 | 170,612 | 0 | 0 |
Net Cash Flow | $2,736,415 | $2,737,819 | $2,993,581 | $3,317,823 | $3,578,685 | $6,086 |
(1) | U/W Concessions represent 5.41% of Gross Potential Rent. |
(2) | U/W Vacancy represents 5.56% of Gross Potential Rent, which is higher than the appraiser’s concluded vacancy rate with respect to the Rosemont Cityview Apartments Property and higher than all comparable properties with respect to the Dawson Forest Apartments Property. |
Property Management.The Atlanta Multifamily Portfolio Properties are managed by Vesta Management Services, LLC (“Vesta”), a professional property management company with expertise in the management of full-service multifamily properties. Vesta is the property management arm of InterCapital Group and manages over 38 properties nationwide with over 9,000 multifamily units.
Lockbox / Cash Management.The Atlanta Multifamily Portfolio Loan is structured with a soft lockbox and in place cash management. All rents and other gross revenue are required to be deposited by the borrowers or property manager into a clearing account within one business day of receipt. All funds in the clearing account are swept daily to a cash management account under the control of the lender and disbursed in accordance with the Atlanta Multifamily Portfolio Loan documents.
Additionally, all excess cash will be swept into a lender controlled account upon (i) an event of default under the Atlanta Multifamily Portfolio Loan documents, (ii) an event of default under the mezzanine loan documents or (iii) if the debt service coverage ratio is less than 1.15x on the last day of the calendar quarter, and any excess cash sweep will end if (a) with respect to clause (i) or (ii) above, the respective event of default has been cured or waived and no other event of default is then continuing or (b) with respect to clause (iii) above, the debt service coverage ratio is at least 1.20x for two consecutive calendar quarters.
B-39 |
Various | Collateral Asset Summary – Loan No. 4 Atlanta Multifamily Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $45,000,000 64.9% 1.30x 8.3% |
Initial Reserves.At loan closing, the borrowers deposited (i) $86,429 into a tax reserve account, (ii) $43,750 into a required repairs reserve account, which represents approximately 125% of the engineer’s estimated cost of the required repairs, (iii) $3,690,000 into a capital expenditure holdback account related to the budgeted renovations at the Atlanta Multifamily Portfolio Properties and (iv) $500,000 in a tax reassessment reserve account, related to a pending tax assessment, which amount will be available to be transferred to the tax reserve account in the event the assessment is greater than the current assessment.
Ongoing Reserves.On a monthly basis, the borrowers are required to deposit reserves of (i) 1/12 of the estimated annual real estate taxes, which currently equates to $37,076, into a tax reserve account and (ii) $12,250 into a replacement reserve account. In addition, the borrowers are required to deposit 1/12 of the annual insurance premiums into an insurance reserve account if an acceptable blanket policy is no longer in place.
Current Mezzanine or Subordinate Indebtedness.A $5,000,000 mezzanine loan was funded concurrently with the Atlanta Multifamily Portfolio Loan and is currently held by Rmezz Atlanta 2-Pack, LLC, an affiliate of Rialto Capital. The mezzanine loan accrues interest at a rate of 12.5000% and after an initial 18-month interest only period, amortizes on a non-standard amortization schedule. An intercreditor agreement is in place with respect to the mezzanine loan.
Future Mezzanine or Subordinate Indebtedness Permitted.None.
Partial Release.None.
Substitution.None.
B-40 |
Various | Collateral Asset Summary – Loan No. 4 Atlanta Multifamily Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $45,000,000 64.9% 1.30x 8.3% |
B-41 |
1355 17th Street Northwest Washington, DC 20036 | Collateral Asset Summary – Loan No. 5 The Drake | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $44,000,000 67.4% 1.28x 7.7% |
B-42 |
1355 17th Street Northwest Washington, DC 20036 | Collateral Asset Summary – Loan No. 5 The Drake | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $44,000,000 67.4% 1.28x 7.7% |
Mortgage Loan Information | |
Loan Seller: | BNYM |
Loan Purpose: | Refinance |
Sponsor: | Gary I. Squire; Claude E. Keener |
Borrower: | KS/FBC L.L.C. |
Original Balance: | $44,000,000 |
Cut-off Date Balance: | $44,000,000 |
% by Initial UPB: | 4.7% |
Interest Rate: | 4.3400% |
Payment Date: | 6thof each month |
First Payment Date: | October 6, 2015 |
Maturity Date: | September 6, 2025 |
Amortization: | Interest only for first 72 months; 360 months thereafter |
Additional Debt: | None |
Call Protection: | L(25), YM1(91), O(4) |
Lockbox / Cash Management: | Springing Soft / Springing |
Reserves(1) | ||
Initial | Monthly | |
Taxes: | $100,596 | $16,750 |
Insurance: | $0 | Springing |
Replacement: | $0 | $2,725 |
Ground Rent: | $0 | Springing |
Financial Information | |
Cut-off Date Balance / Sq. Ft.: | $201,835 |
Balloon Balance / Sq. Ft.: | $188,057 |
Cut-off Date LTV: | 67.4% |
Balloon LTV: | 62.8% |
Underwritten NOI DSCR(2): | 1.29x |
Underwritten NCF DSCR(2): | 1.28x |
Underwritten NOI Debt Yield: | 7.7% |
Underwritten NCF Debt Yield: | 7.6% |
Underwritten NOI Debt Yield at Balloon: | 8.3% |
Underwritten NCF Debt Yield at Balloon: | 8.2% |
Property Information | ||
Single Asset / Portfolio: | Single Asset | |
Property Type: | High Rise Multifamily | |
Collateral: | Leasehold | |
Location: | Washington, D.C. | |
Year Built / Renovated: | 2014 / NAP | |
Total Sq. Ft.: | 218 | |
Property Management: | Keener Management, Inc. | |
Underwritten NOI: | $3,389,139 | |
Underwritten NCF: | $3,356,439 | |
Appraised Value: | $65,300,000 | |
Appraisal Date: | July 19, 2015 | |
Historical NOI(3) | ||
Most Recent NOI: | NAV | |
2014 NOI: | NAP | |
2013 NOI: | NAP | |
2012 NOI: | NAP | |
Historical Occupancy(3) | ||
Most Recent Occupancy: | 99.1% (August 10, 2015) | |
2014 Occupancy: | NAP | |
2013 Occupancy: | NAP | |
2012 Occupancy: | NAP |
(1) | See “Initial Reserves” and “Ongoing Reserves” herein. |
(2) | Based on amortizing debt service payments. Based on the current interest only payments, the Underwritten NOI DSCR and Underwritten NCF DSCR are 1.75x and 1.73x, respectively. |
(3) | The Drake was completed in late 2014. As such, Historical NOI and Historical Occupancy are not available. |
B-43 |
1355 17th Street Northwest Washington, DC 20036 | Collateral Asset Summary – Loan No. 5 The Drake | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $44,000,000 67.4% 1.28x 7.7% |
Market Rate Unit Mix Summary(1) | ||||||||||||||
Average Unit Size | Average Monthly | Average Monthly | ||||||||||||
Unit Type | # of Units | % of Total | Occupied Units | Occupancy | (Sq. Ft.) | Rental Rate | Rental Rate PSF | |||||||
Studio | 43 | 19.7% | 41 | 95.3% | 342 | $1,833 | $5.40 | |||||||
1 Bed / 1 Bath Jr. | 157 | 72.0% | 157 | 100.0% | 412 | $2,156 | $5.25 | |||||||
1 Bed / 1 Bath | 3 | 1.4% | 3 | 100.0% | 517 | $2,022 | $3.87 | |||||||
2 Bed / 1 Bath | 15 | 6.9% | 15 | 100.0% | 701 | $3,329 | $4.76 | |||||||
Total / Wtd. Avg. | 218 | 100.0% | 216 | 99.1% | 419 | $2,171 | $5.23 |
(1) | Based on the rent roll dated August 10, 2015. |
The Loan.The Drake loan (the “Drake Loan”) is a fixed rate loan secured by the borrower’s leasehold interest in a 218-unit high rise apartment complex located at 1355 17th Street Northwest in Washington, D.C. (the “Drake Property”) with an original and cut-off date principal balance of $44.0 million. The Drake Loan has a 10-year term and subsequent to a 72-month interest only period, amortizes on a 30-year schedule. The Drake Loan accrues interest at a fixed rate equal to 4.3400%. Loan proceeds were used to retire existing construction debt of approximately $28.8 million, pay closing costs of $472,075, fund reserves of $100,596 and return approximately $14.6 million of equity to the sponsor. Based on the appraised value of $65.3 million as of June 19, 2015, the cut-off date LTV ratio is 67.4%. The most recent prior financing of The Drake Property was not included in a securitization.
Sources and Uses | ||||||
Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
Mortgage Loan | $44,000,000 | 100.0% | Loan Payoff | $28,865,723 | 65.6% | |
Closing Costs | $472,075 | 1.1% | ||||
Reserves | $100,596 | 0.2% | ||||
Return of Equity | $14,561,606 | 33.1% | ||||
Total Sources | $44,000,000 | 100.0% | Total Uses | $44,000,000 | 100.0% |
The Borrower / Sponsor.The borrower is KS/FBC L.L.C., a single purpose District of Columbia limited liability company structured to be bankruptcy-remote, with two independent directors in its organizational structure. The sponsors of the borrower and the nonrecourse carve-out guarantors are Claude E. Keener and Gary I. Squire, on a joint and several basis.
Since 1984, Claude E. Keener and Gary I. Squire have been engaged in the acquisition, renovation, construction and management of residential property in the Northwest quadrant of Washington, D.C. The sponsors currently own and manage more than 2,000 condominiums and apartment units, including 13 rental buildings.
The Property.The Drake Property is a Class A, 218-unit high rise multifamily complex constructed in 2014, located at 1355 17thStreet in Washington, D.C. The Drake Property is comprised of one nine-story residential building, as well as a leasing office and 92 parking spaces in an on-site garage, on an approximately 0.32-acre site. The units are available in four different configurations with an average unit size of 419 sq. ft. Amenities at the Drake Property include a rooftop deck with grilling areas, a fitness center, a business center, a resident lounge, a kitchen/dining area, bike storage, and a 24-hour front desk/concierge. Each unit contains stainless steel appliances, a washer and dryer, and silestone counters.
Trailing 12 - Month Occupancy History(1) | |||||||||||||
Oct 14 | Nov 14 | Dec 14 | Jan 15 | Feb 15 | Mar 15 | Apr 15 | May 15 | Jun 15 | Jul 15 | Aug 15 | Sep 15 | ||
6.0% | 18.0% | 23.0% | 32.0% | 36.0% | 42.0% | 49.0% | 56.0% | 65.0% | 81.0% | 98.0% | 99.1% | ||
(1) As provided by the borrower and represents occupancy based on the rent roll dated August 15, 2015. |
The Drake Property is located in the DuPont Circle/Adams Morgan submarket of Washington, D.C., in close proximity to the several bus and subway lines. In addition, the Union Station commuter rail is approximately a 13 minute drive or 17 minute subway ride from the Drake Property. The DuPont Circle/Adams Morgan submarket has high barriers to entry, and a 3.7% vacancy rate across nearly 12,000 units.
The Drake Property is subject to an inclusionary zoning covenant in favor of the Department of Housing and Community Development of the District of Columbia, and as such, 17 of the 218 units at the property are required to be leased to families with income levels at or below 80% of the area median income.
Environmental Matters.The Phase I environmental report dated June 23, 2015 recommended no further action at the Drake Property.
B-44 |
1355 17th Street Northwest Washington, DC 20036 | Collateral Asset Summary – Loan No. 5 The Drake | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $44,000,000 67.4% 1.28x 7.7% |
The Market.The Drake Property is located in Washington, D.C., in the DuPont Circle/Adams Morgan submarket.According to the appraisal, in 2014, the number of households in the Washington, D.C. region increased by 0.9%. That figure is anticipated to grow by another 1.4% in 2015 as the economy continues to improve. The immediate area has experienced moderate growth over the past decade. The population within a one-mile radius is projected to grow at an annual rate of 0.91% compared to 3.11% for the greater Washington, D.C. area.
The Washington, D.C. multifamily market contains 97,428 apartment units with an average occupancy of 93.4%. The DuPont Circle/Adams Morgan submarket contains 11,805 units with an average occupancy of 96.3%. Demand for apartments in the DuPont Circle/Adams Morgan submarket remains strong although the average occupancy has decreased from 97.6% in 2010 to 96.4% in April 2015. The 2014 population within a three-mile radius of the Drake Property is 363,702, with a median household income of $116,550.
The appraisal identified five comparable properties that were sold between March 2013 and November 2014.The average adjusted sales price per unit was $309,801, as compared to the appraised value per unit at the Drake Property of$299,541 and the Drake Loan per unit of $201,835.
The appraisal identified six competitive properties located within 1.3 miles of the Drake Property in the DuPont Circle/Adams Morgan submarket containing 1,074 units (exclusive of the Drake Property). The Drake Property’s competitive set exhibited a range of occupancy between 95% and 99%, and monthly rental rates ranged from $1,795 to $6,072 for the competitive set. The appraisal concluded a stabilized occupancy of 96.0% and a market rent of $2,208 per unit, in line with the Drake Property’s current occupancy of 99.1% as of August 10, 2015 and average rent per unit of $2,171. The Drake Property competitive set is summarized below.
Competitive Set(1) | |||||||
Name | Drake Apartments(2) |
Bond Building |
14W |
The District |
Flats at |
View 14 |
The |
Distance from Subject | NAP | 0.6 miles | 1.1 miles | .07 miles | 0.5 miles | 1.1 miles | 1.6 miles |
Year Built / Renovated | 2014 / NAP | 1929 / 2012 | 2013 / NAP | 2013 / NAP | 1967 / 2006 | 2010 / NAP | 2013 / NAP |
Total Occupancy | 99.1% | 98% | 97% | 99% | 98% | 96% | 95% |
No. of Units | 218 | 83 | 231 | 125 | 306 | 185 | 144 |
Avg. Rent Per Unit |
| ||||||
Studio
| $1,833 | $2,057 - $2,138 | $1,850 - $2,005 | $2,003 - $2,494 | $1,955 - $2,300 | $2,058 - $2,098
| $1,795 - $2,050 $2,275 - $3,350 |
1 Bed / 1 Bath 1 Bed / 1 Bath Jr | $2,022 $2,156 | $2,525 - $2,850 - | $2,200 - $3,015 - | $2,583 - $3,581 - | $2,385 - $2,745 $2,480 - $2,615 | $2,616 - $3,658 - | $2,275 - $3,350 $1,825 - $2,600 |
1 Bed / 1 Bath Den 1 Bed / 1.5 Bath 2 Bed / 1 Bath |
$3,329 | - - $2,831 - $3,650 | $2,265 - $3,050 - $3,365 - $3,445 | - $3,368 - $3,941 - | - - - | $2,853 - $4,206 - - | - - - |
2 Bed / 2 Bath | $3,395 - $3,600 | $3,755 - $4,685 | $4,274 - $5,000 | $4,200 - $4,295 | $4,261 - $6,072 | - |
(1) | Source: Appraisal |
(2) | Based on the rent roll dated August 10, 2015. |
Cash Flow Analysis.
Cash Flow Analysis(1) | |||||
U/W | U/W per Unit | ||||
Gross Potential Rent | $5,672,940 | $26,023 | |||
Total Other Income(2) | 294,536 | 1,351 | |||
Less: Vacancy(3) | (226,918) | (1,041) | |||
Effective Gross Income | $5,740,558 | $26,333 | |||
Total Operating Expenses(4) | 2,351,420 | 10,786 | |||
Net Operating Income | $3,389,139 | $15,547 | |||
Capital Expenditures | (32,700) | (150) | |||
Net Cash Flow(2) | $3,356,439 | $15,397 | |||
(1) | The Drake Property was constructed in 2014. As such, historical data is not yet available. |
(2) | Total Other Income is based upon the competitive set identified in the appraisal in an amount equal to 0.024% of Effective Gross Income. |
(3) | U/W Vacancy 4.0% of UW Gross Potential Rent, in-line with the appraiser’s conclusion for the submarket. As of August 10, 2015, the Drake Property was 99.1% leased. |
(4) | U/W Total Operating Expenses are based on the appraiser’s conclusion. |
B-45 |
1355 17th Street Northwest Washington, DC 20036 | Collateral Asset Summary – Loan No. 5 The Drake | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $44,000,000 67.4% 1.28x 7.7% |
Property Management.The Drake Property is managed by Keener Management, Inc., an affiliate of the borrower.
Lockbox / Cash Management.The Drake Loan is structured with a springing soft lockbox and springing cash management. The borrower is required to deposit all rents and other payments into the lockbox account controlled by the lender upon the commencement of a Cash Trap Period (as defined below). During a Cash Trap Period, all funds in the lockbox account are to be swept daily to a cash management account under the control of the lender and disbursed in accordance with the loan documents. In addition, during a Cash Trap Period an excess cash flow sweep will be in effect and all excess cash will be deposited into a lender-controlled account, to be held by the lender as additional collateral for the Drake Loan.
A “Cash Trap Period” will commence upon (i) the occurrence and continuance of an event of default under the Drake Loan or (ii) the debt service coverage ratio falling below 1.05x as of the end of a calendar quarter (without regard to the interest only period and based on a 30-year amortization period).
A Cash Trap Period will cease to exist, with respect to clause (i), when such event of default has been cured and no other event under clause (ii) of the definition has occurred and is continuing, and with respect to clause (ii), when the debt service coverage ratio is at least equal to 1.15x for two consecutive calendar quarters, provided no event of default has occurred and is then continuing.
Initial Reserves.At loan closing, the borrower deposited $100,596 into a tax reserve account.
Ongoing Reserves.On a monthly basis, the borrower is required to deposit reserves of (i) 1/12 of the estimated annual real estate taxes, which currently equates to $16,750, into a tax reserve account and (ii) $2,725 ($150 per unit annually) into a replacement reserve account. In addition, upon notice from the lender, the borrower will be required to deposit on a monthly basis (i) 1/12th of the estimated annual insurance premiums into an insurance reserve account if (a) an event of default has occurred, (b) an acceptable blanket insurance policy is no longer in place, (c) the borrower fails to provide evidence of renewal of the blanket insurance policy or (d) the borrower fails to provide evidence that the insurance premiums have been paid and (ii) an amount equal to the monthly ground rent into a ground rent reserve account if (a) an event of default has occurred, (b) the borrower fails to provide satisfactory evidence of payment of the ground rent prior to the 15th of each month or (c) the lender does not receive certification of the borrower’s current and timely payment of the ground rent.
Current Mezzanine or Subordinate Indebtedness.None.
Future Mezzanine or Subordinate Indebtedness Permitted.None.
Ground Lease.The Drake Property is subject to a ground lease with The Trustees of the First Baptist Church of the City of Washington D.C. as ground lessor. The ground lease expires on November 30, 2111, with no renewal options. The current annual ground rent payment for the Drake Property ground lease is $1,008,042.09 per annum. On December 1st of each year during the term of the Drake Loan, the ground rent payments for the 12-month period commencing on such date will be subject to adjustment by the percentage increase in the Consumer Price Index for the prior calendar year, subject to a floor of 2% per annum and a ceiling of 4% per annum.
B-46 |
1355 17th Street Northwest Washington, DC 20036 | Collateral Asset Summary – Loan No. 5 The Drake | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $44,000,000 67.4% 1.28x 7.7% |
B-47 |
Various | Collateral Asset Summary – Loan No. 6 Midwest Shopping Center Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $38,152,658 67.4% 1.53x 10.3% |
B-48 |
Various | Collateral Asset Summary – Loan No. 6 Midwest Shopping Center Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $38,152,658 67.4% 1.53x 10.3% |
Mortgage Loan Information | |
Loan Seller: | GACC |
Loan Purpose: | Refinance |
Sponsor: | Natin Paul |
Borrower(1): | Various |
Original Balance: | $38,300,000 |
Cut-off Date Balance: | $38,152,658 |
% by Initial UPB: | 4.1% |
Interest Rate: | 4.3300% |
Payment Date: | 6thof each month |
First Payment Date: | August 6, 2015 |
Maturity Date: | July 6, 2025 |
Amortization: | 360 months |
Additional Debt(2): | $5,500,000 Mezzanine Debt |
Call Protection(3): | L(27), D(89), O(4) |
Lockbox / Cash Management: | Hard / In Place |
Reserves(4) | ||
Initial | Monthly | |
Taxes: | $894,563 | $224,518 |
Insurance: | $0 | Springing |
Replacement: | $0 | $14,824 |
TI/LC(5): | $500,000 | $29,647 |
Required Repairs: | $105,640 | NAP |
Ross Dress for Less: | $58,401 | $0 |
Lease Sweep: | $0 | Springing |
Financial Information | ||
Mortgage Loan | Total Debt | |
Cut-off Date Balance / Sq. Ft.: | $43 | $49 |
Balloon Balance / Sq. Ft.: | $35 | $41 |
Cut-off Date LTV(6): | 67.4% | 77.1% |
Balloon LTV(6): | 54.4% | 64.1% |
Underwritten NOI DSCR: | 1.73x | 1.36x |
Underwritten NCF DSCR: | 1.53x | 1.21x |
Underwritten NOI Debt Yield: | 10.3% | 9.0% |
Underwritten NCF Debt Yield: | 9.2% | 8.0% |
Underwritten NOI Debt Yield at Balloon: | 12.8% | 10.9% |
Underwritten NCF Debt Yield at Balloon: | 11.4% | 9.6% |
Property Information | |
Single Asset / Portfolio: | Portfolio of six properties |
Property Type: | Anchored Retail |
Collateral: | Fee Simple |
Location: | Various |
Year Built / Renovated: | Various |
Total Sq. Ft.(7): | 889,413 |
Property Management: | Greenstar Property Management, LLC |
Underwritten NOI: | $3,945,112 |
Underwritten NCF: | $3,496,815 |
Appraised Value(6): | $56,630,000 |
Appraisal Date: | April 3, 2015 |
Historical NOI | |
Most Recent NOI: | $4,164,051 (T-9 July 31, 2015 Ann.) |
2014 NOI: | $4,245,414 (December 31, 2014) |
2013 NOI: | $3,875,455 (December 31, 2013) |
2012 NOI: | $4,482,923 (December 31, 2012) |
Historical Occupancy | |
Most Recent Occupancy: | 90.2% (August 18, 2015) |
2014 Occupancy: | 91.0% (December 31, 2014) |
2013 Occupancy: | 96.9% (December 31, 2013) |
2012 Occupancy: | 96.5% (December 31, 2012) |
(1) | The borrowers under the Midwest Shopping Center Portfolio Loan are WC MRP Calumet Center, LLC; WC MRP Des Moines Center, LLC; WC MRP Kansas Center, LLC; WC MRP Champaign Center, LLC; WC MRP Broadway Plaza, LLC and WC MRP Waterloo Plaza, LLC. |
(2) | See “Current Mezzanine or Subordinate Indebtedness” herein. |
(3) | Partial release is permitted. See “Partial Release” herein. |
(4) | See “Initial Reserves” and “Ongoing Reserves” herein. |
(5) | The TI/LC reserve is subject to a cap of $1,000,000 so long as (i) the debt yield is no less than 10% and (ii) the Home Depot leases have been renewed, extended or replaced in accordance with the terms and conditions provided in the loan documents. |
(6) | The Appraised Value of $56.63 million reflects a premium attributed to the aggregate value of the Midwest Shopping Center Portfolio Properties as a whole. The sum of the value of each of the properties on an individual basis is $54.6 million, which represents a Cut-off Date LTV of 69.9% and a Balloon LTV of 56.4%. |
(7) | Total Sq. Ft. includes 37,143 sq. ft. across three leased fee outparcels including a vacant pad site at the Calumet Center property (25,280 sq. ft.), Rib Crib BBQ & Grill (5,500 sq. ft.) and Bank of the West (6,363 sq. ft.). |
B-49 |
Various | Collateral Asset Summary – Loan No. 6 Midwest Shopping Center Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $38,152,658 67.4% 1.53x 10.3% |
Portfolio Summary | ||||||
Property Name | Location | Sq. Ft. | Year Built | Allocated Loan Amount | “As-is” Appraised Value(1) | Occupancy(2) |
Home Depot Shopping Center | Des Moines, IA | 260,801 | 1991-2000 | $10,968,500 | $15,250,000 | 87.9% |
Calumet Center | Calumet City, IL | 159,145 | 1974 | $6,725,000 | $11,950,000 | 84.1% |
Waterloo Plaza | Waterloo, IA | 104,074 | 1991 | $6,456,500 | $8,400,000 | 100.0% |
Broadway Plaza | Edmond, OK | 103,027 | 1994 | $5,835,000 | $7,800,000 | 100.0% |
Kansas Center | Kansas City, MO | 150,381 | 1999 | $4,481,500 | $5,800,000 | 80.2% |
Neil Street Shopping Center | Champaign, IL | 111,985 | 1984 | $3,833,500 | $5,400,000 | 100.0% |
Total / Wtd. Avg. | 889,413 | $38,300,000 | $54,600,000 | 90.2% | ||
Total with Portfolio Premium | $56,630,000 | |||||
(1) | The portfolio “As-Is” Value of $56.63 million reflects a premium attributed to the aggregate value of the Midwest Shopping Center Portfolio as a whole. The sum of the value of each of the properties on an individual basis is $54.60 million. |
(2) | Occupancy based on rent rolls dated August 18, 2015. |
Tenant Summary | ||||||||
Tenant | Property | Credit Rating (Fitch/ Moody’s/S&P)(1) | Net Rentable Area (Sq. Ft.) | % of Net Rentable Area | U/W Base Rent PSF | % of Total U/W | Lease Expiration | |
Home Depot(2) | Kansas Center | A/A2/A | 113,969 | 12.8% | $3.34 | 7.1% | 1/31/2020 | |
Home Depot(3) | Home Depot Center | A/A2/A | 111,847 | 12.6% | $2.81 | 5.8% | 1/31/2020 | |
Academy Sports(4) | Broadway Plaza | NR/NR/NR | 97,527 | 11.0% | $5.25 | 9.5% | 4/30/2019 | |
Hobby Lobby(5) | Neil Street Shopping Center | NR/NR/NR | 70,695 | 7.9% | $3.71 | 4.9% | 7/31/2017 | |
Hobby Lobby(6) | Waterloo Plaza | NR/NR/NR | 65,045 | 7.3% | $5.00 | 6.0% | 11/30/2024 | |
Total Major Tenants(7) | 459,083 | 51.6% | $3.91 | 33.4% | ||||
Remaining Tenants(8) | 343,564 | 38.6% | $10.43 | 66.6% | ||||
Total Occupied Collateral | 802,647 | 90.2% | $6.70 | 100.0% | ||||
Vacant | 86,766 | 9.8% | ||||||
Total | 889,413 | 100.0% | ||||||
(1) | Certain ratings are those of the parent company whether or not the parent company guarantees the lease. |
(2) | Home Depot at the Kansas Center property has six, five-year renewal options upon written notice no later than twelve months prior to the lease expiration date of January 31, 2020. The tenant has no termination options. |
(3) | Home Depot at the Home Depot Center property has ten, five-year renewal options upon written notice no later than twelve months prior to the lease expiration date of January 31, 2020. The tenant has no termination options. |
(4) | Academy Sports at the Broadway Plaza property has one, five-year renewal option upon written notice no later than 210 days prior to the lease expiration date of April 30, 2019. The tenant has no termination options. |
(5) | Hobby Lobby at the Neil Street Shopping Center property has two, five-year renewal options upon written notice no later than twelve months prior to the lease expiration date of July 31, 2017. The tenant has no termination options. |
(6) | Hobby Lobby at the Waterloo Plaza property has one, five-year renewal option upon written notice no later than twelve months prior to the lease expiration date of November 30, 2024. The tenant has no termination options. |
(7) | None of the Major Tenants shown above were required to report sales. |
(8) | Includes the B-Bops leased fee parcel, which is excluded from collateral sq. ft. and accounts for $52,470 in U/W base rent as well as the Rib Crib BBQ & Grill and Bank of the West leased fee outparcels which are 5,500 sq. ft. and 6,363 sq. ft., respectively. |
B-50 |
Various | Collateral Asset Summary – Loan No. 6 Midwest Shopping Center Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $38,152,658 67.4% 1.53x 10.3% |
Lease Rollover Schedule(1) | ||||||||
Year | # of Leases Expiring | Total Expiring Sq. Ft. | % of Total Sq. Ft. Expiring | Cumulative Sq. Ft. Expiring | Cumulative % of Sq. Ft. Expiring | Annual U/W Per Sq. Ft. | % U/W Rolling | Cumulative % of U/W Base Rent |
MTM | 2 | 3,345 | 0.4% | 3,345 | 0.4% | $13.32 | 0.8% | 0.8% |
2015 | 1 | 2,940 | 0.3% | 6,285 | 0.7% | $15.00 | 0.8% | 1.6% |
2016 | 4 | 70,889 | 8.0% | 77,174 | 8.7% | $9.36 | 12.3% | 14.0% |
2017 | 7 | 127,269 | 14.3% | 204,443 | 23.0% | $7.01 | 16.6% | 30.6% |
2018(2) | 5 | 79,039 | 8.9% | 283,482 | 31.9% | $6.28 | 9.2% | 39.8% |
2019(3) | 2 | 104,127 | 11.7% | 387,609 | 43.6% | $6.06(3) | 11.7% | 51.5% |
2020 | 4 | 283,245 | 31.8% | 670,854 | 75.4% | $4.86 | 25.6% | 77.1% |
2021 | 0 | 0 | 0.0% | 670,854 | 75.4% | $0.00 | 0.0% | 77.1% |
2022 | 0 | 0 | 0.0% | 670,854 | 75.4% | $0.00 | 0.0% | 77.1% |
2023 | 2 | 37,814 | 4.3% | 708,668 | 79.7% | $10.64 | 7.5% | 84.6% |
2024 | 2 | 83,979 | 9.4% | 792,647 | 89.1% | $8.27 | 12.9% | 97.5% |
2025 | 1 | 10,000 | 1.1% | 802,647 | 90.2% | $13.50 | 2.5% | 100.0% |
Thereafter | 0 | 0 | 0.0% | 802,647 | 90.2% | $0.00 | 0.0% | 100.0% |
Vacant | NAP | 86,766 | 9.8% | 889,413 | 100.0% | NAP | NAP | |
Total / Wtd. Avg. | 30 | 889,413 | 100.0% | $6.70 | 100.0% | |||
(1) | Certain tenants have lease termination options that may become exercisable prior to the originally stated expiration date of the tenant lease and that are not considered in the lease rollover schedule. |
(2) | Includes the Rib Crib BBQ & Grill and Bank of the West leased fee outparcels which are 5,500 sq. ft. and 6,363 sq. ft., respectively. |
(3) | Includes the B-Bop leased fee parcel, which is excluded from collateral sq. ft., which accounts for $52,470 in U/W base rent. |
The Loan. The Midwest Shopping Center Portfolio loan (the “Midwest Shopping Center Portfolio Loan”) is a $38.3 million fixed rate loan secured by the borrowers’ fee simple interest in a portfolio of six anchored retail properties located across four states, totaling 889,413 sq. ft. (the “Midwest Shopping Center Portfolio Properties”). The Midwest Shopping Center Portfolio Loan has a 10-year term and amortizes on a 30-year schedule. The Midwest Shopping Center Portfolio Loan accrues at a fixed rate equal to 4.3300%. Loan proceeds, along with a $5.5 million mezzanine loan, were used to retire existing debt of approximately $40.3 million, fund upfront reserves of approximately $1.6 million, pay closing costs of approximately $0.5 million and return approximately $1.4 million of equity to the borrowers. Based on the portfolio “as-is” appraised value of $56.63 million as of April 3, 2015, which reflects a premium attributed to the aggregate value of the Midwest Shopping Center Portfolio as a whole, the cut-off date LTV is 67.4%. The most recent prior financing of the Midwest Shopping Center Portfolio Loan was not included in a securitization.
Sources and Uses | ||||||
Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
Mortgage Loan | $38,300,000 | 87.4% | Loan Payoff | $40,257,681 | 91.9% | |
Mezzanine Loan | $5,500,000 | 12.6% | Reserves | $1,558,604 | 3.6% | |
Closing Costs | $537,343 | 1.2% | ||||
Return of Equity | $1,446,372 | 3.3% | ||||
Total Sources | $43,800,000 | 100.0% | Total Uses | $43,800,000 | 100.0% |
The Borrowers / Sponsor. The borrower consists of six single purpose Delaware limited liability companies each structured to be bankruptcy-remote, with two independent directors in their organizational structure. The sponsor of the borrowers and nonrecourse carve-out guarantor is Natin Paul.
Natin Paul is the chief executive officer and founder of World Class Capital Group, LLC, a national real estate investment firm focusing on acquiring, developing and managing real estate. World Class Capital Group owns and operates a diverse mix of real estate properties including office buildings, retail centers, apartments, student housing and hotels. World Class Capital Group, LLC currently owns over 8 million sq. ft. in 16 states in its national portfolio.
The Properties. The Midwest Shopping Center Portfolio Properties are comprised of six retail properties totaling 889,413 sq. ft., located across Illinois, Iowa, Missouri and Oklahoma. The Midwest Shopping Center Portfolio is currently 90.2% occupied with tenants that include Home Depot, Academy Sports, Hobby Lobby, Best Buy, TJ Maxx, Big Lots, OfficeMax and PetSmart.
The Midwest Shopping Center Portfolio has maintained a weighted average historical occupancy of approximately 94.2% since 2011. The Midwest Shopping Center Portfolio tenants have been in occupancy for an average of 14.5 years. Approximately 79.9% of net rentable area of the Midwest Shopping Center Portfolio’s tenants is leased to national retailers and 42.2% of the net rentable area is leased to investment grade tenants.
B-51 |
Various | Collateral Asset Summary – Loan No. 6 Midwest Shopping Center Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $38,152,658 67.4% 1.53x 10.3% |
The five largest tenants occupy 51.6% of the total sq. ft. and account for 33.4% of the U/W Base Rent. The Midwest Shopping Center Portfolio exhibits a weighted average (based on sq. ft.) in-place rent of $6.70 PSF.
The Home Depot Shopping Center property is a 260,801 sq. ft. retail center located in Des Moines, Iowa. The Home Depot Shopping Center property is 87.9% occupied as of August 18, 2015 and is anchored by Home Depot (42.9% of Home Depot Shopping Center NRA), Best Buy (13.5%), OfficeMax (9.4%) and PetSmart (8.7%). Approximately 56.4% of the Home Depot Shopping Center property is occupied by investment grade tenants. The Home Depot Center Shopping Center property is located with excellent visibility along US Highway 69 and McKinley Street. US Highway 69 is a major north-south thoroughfare in the Des Moines metropolitan area and provides access to the retail corridor servicing the South Des Moines submarket. The 2015 population and average household income within a three-mile radius of the property are 61,953 and $58,759, respectively.
The Calumet Center property is a 159,145 sq. ft. retail center located in Calumet City, Illinois, a suburb of Chicago. The Calumet Center property is situated in a retail corridor along Torrence Avenue in close proximity to I-294. The Calumet Center property is 84.1% occupied as of August 18, 2015 and is anchored by Marshalls (19.2% of Calumet Center NRA), Big Lots (17.8%), Ross Dress for Less (16.4%) and Petco (9.4%). The Calumet Center property also benefits from its close proximity to River Oaks Mall, a mall anchored by Macy’s and JC Penney. Approximately 53.4% of the Calumet Center property is occupied by investment grade tenants and the average tenant has occupied its space for over 10 years. The neighborhood surrounding the property is an established retail market and features good population density and access to numerous thoroughfares. The 2015 population and average household income within a three-mile radius of the property are 122,448 and $54,217, respectively.
The Waterloo Plaza property is a 104,074 sq. ft. retail center located in Waterloo, Iowa, that is 100.0% occupied as of August 18, 2015. The Waterloo Plaza property is anchored by Hobby Lobby (62.5% of Waterloo Plaza NRA), TJ Maxx (27.9%) and Shoe Carnival (9.6%) and is shadow anchored by Dick’s Sporting Goods. The Waterloo Plaza property is located adjacent to Crossroads Center, a regional mall anchored by Gordman’s, Dillard’s, Younkers and Sears. The Waterloo Plaza property has been 100.0% occupied since 2011 and features no tenant turnover within the first five years of the Midwest Shopping Center Portfolio Loan term. The 2015 population and average household income with a three-mile radius of the property are 47,859 and $54,851, respectively.
The Broadway Plaza property is a 103,027 sq. ft. retail center located in Edmond, Oklahoma that is 94.7% occupied by Academy Sports as of August 18, 2015. The Broadway Plaza property also includes a restaurant outparcel ground leased to Rib Crib BBQ & Grill. Academy Sports has been a tenant at the Broadway Plaza property since 2003 and recently executed a five year renewal through 2019. In addition, Academy Sports has invested approximately $0.5 million into its space in 2014. The proximate area features dense residential areas to the east via Highway 77. The 2015 population and average household income within a three-mile radius of the property are 73,886 and $76,052, respectively.
The Kansas Center property is a 150,381 sq. ft. retail center located in Kansas City, Missouri. The Kansas Center property is 80.2% occupied, as of August 18, 2015, by two tenants, Home Depot (75.8% of Kansas Center NRA), the anchor tenant, and Firestone Tire (4.4%). Home Depot has been a tenant since 1998 and recently executed a five year renewal through January 2020 and has six, five-year renewal options remaining. The Kansas Center property is located in close proximity to the 4.5 million sq. ft. Three Trails redevelopment, an office development anticipated to employ approximately 15,000 people and nearby Oxford on the Blue, a 350-acre biotech office park located in south Kansas City. The 2015 population and average household income within a three-mile radius of the property are 52,319 and $46,797, respectively.
The Neil Street Shopping Center property is an 111,985 sq. ft. retail center 100.0% leased to Hobby Lobby (63.1% of Neil Street Shopping Center NRA) and Carle Clinic (36.9%), which is an out-patient primary care facility, under triple net leases, located in Champaign, Illinois. The property has been 100.0% occupied since 2008 and is located adjacent to Marketplace Mall, a 1,100,000 sq. ft. mall anchored by JC Penney, Bergner’s and Macy’s. In addition, there is a retail corridor nearby the Neil Street Shopping Center property which features national retailers such as Wal-Mart, Meijer, Dick’s Sporting Goods, Best Buy, Michael’s, UIta, Menard’s and Lowe’s. The Neil Street Shopping Center property is also located adjacent to a bus stop on the University of Illinois bus route which traverses Neil Street and provides access to Champaign’s retail corridor. The area is also supported by national companies, including State Farm, Dow Chemical Company, Caterpillar and Sony. The 2015 population and average household income with a three-mile radius of the property are 76,308 and $44,009, respectively.
Environmental Matters. The Phase I environmental reports and subsequent reliance letter dated April 28, 2015 recommended no further action other than at the Kansas Center property. At the Kansas Center property, a Phase II subsurface investigation was recommended to assess whether the subsurface had been impacted by the historical and current long-term use of the property by auto repair operations. The Phase II investigation was completed as of the date of the reliance letter and no further action is recommended at the Kansas Center property.
B-52 |
Various | Collateral Asset Summary – Loan No. 6 Midwest Shopping Center Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $38,152,658 67.4% 1.53x 10.3% |
The Market.The Midwest Shopping Center Portfolio is geographically diversified, representing six different markets: Des Moines, Iowa, Calumet City, Illinois, Waterloo, Iowa, Edmond, Oklahoma, Kansas City, Missouri and Champaign, Illinois.
Des Moines Market. The Home Depot Shopping Center property is located in Des Moines, Iowa within the South Des Moines Submarket. Des Moines, the capital and most populous city in Iowa, is a major center for the insurance and financial services industries. Des Moines is home to a number of financial services companies, including Wells Fargo, Nationwide Mutual Insurance and Principal Financial Group. The Des Moines retail market experienced a moderate improvement in market conditions in Q4 2014. The vacancy rate decreased from 6.0% in Q3 2014 to 5.4% in Q4 2014. Quoted rental rates decreased from Q3 2014 levels, ending at $10.70 PSF. The South Des Moines Submarket is comprised of 28 buildings and 1.79 million sq. ft. There were no new deliveries in the submarket in 2014 and 7,360 sq. ft. of negative absorption. The Q4 2014 submarket vacancy was 7.3% and quoted rental rates were $8.28 PSF.
Calumet City Market.The Calumet Center property is located in Calumet City, Illinois, a southern suburb located within the Chicago metropolitan statistical area (the “Chicago MSA”). Chicago is the third most populous city in the United States, after New York City and Los Angeles and acts as the economic hub for the entire Midwestern region. The Chicago MSA retail market has grown 23.2% since 2002. During Q4 2014, the Chicago retail market vacancy rate dropped 0.3% from 9.8% in Q3 2014 to 9.5% in Q4 2014. Net asking lease rates increased in Q4 2014 to $17.85 PSF from $17.73 PSF in Q3 2014. The Calumet Center property is located within the South Suburbs Submarket of the Chicago MSA retail market. The submarket is comprised of 42 buildings and approximately 6.5 million sq. ft. The Q4 2014 submarket vacancy was 18.0% and quoted rental rates were $13.64 PSF.
Waterloo Market.The Waterloo Plaza property is located in Waterloo, Iowa within the Waterloo metropolitan statistical area (the “Waterloo MSA”). The Waterloo MSA is home to the University of North Iowa which has a current enrollment of over 14,000 students and a staff of more than 1,700 employees. Waterloo-Cedar Falls’ population growth is supported by the growth of the University of Northern Iowa as well as the presence of Deere & Co.’s, operations in the Waterloo region. Deere & Co., one of the world’s largest manufacturers of agricultural equipment, is the top employer in the MSA with over 6,000 employees at their operations facilities. The Waterloo-Cedar Falls retail market is comprised of 480 buildings totaling 7.22 million sq. ft. The market had 134,552 sq. ft. of absorption in 2014. The Q4 2014 market vacancy was 5.5% and quoted rents were $9.96 PSF. The Waterloo Plaza property is located within the Black Hawk County retail submarket. The Black Hawk County retail submarket is comprised of 409 properties consisting of 6.44 million sq. ft. The Q4 2014 vacancy rate was 5.4%, representing a 1.3% decrease from Q4 2013. The Q4 2014 average rental rate was $10.34 PSF, representing a 10.7% increase over Q4 2013.
Edmond Market.The Broadway Plaza property is located in Edmond, Oklahoma a suburb located in the Oklahoma City metropolitan statistical area. Oklahoma City is the state capital of Oklahoma and national headquarters to two Fortune 500 companies, Chesapeake Energy Corporation and Devon. Oklahoma City was recently named as one of the “Top Metro Areas with the Most Economic Momentum Going into 2014” by Forbes Magazine. As of the end of Q4 2014, the Oklahoma City retail vacancy rate stood at 6.7%, representing a 0.1% decrease year over year. Net absorption was positive 96,480 sq. ft., and vacant sublease space increased by 6,160 sq. ft. during the same time period. Quoted rents ended Q4 2014 at $11.08 PSF, which represents an increase from $10.87 PSF in the Q3 2014 and $10.84 PSF at the end of Q1 2014.
Kansas City Market.The Kansas Center property is located in Kansas City, Missouri within the Kansas City metropolitan statistical area (the “Kansas City MSA”). The Kansas City MSA is home to nearly 2.1 million residents as of 2012 and is undergoing a major renaissance with over $9.0 billion in major improvements currently under construction or recently completed. The Kansas City MSA has nearly 110 million sq. ft. of retail space and the MSA reported an average occupancy of 91.9% and average rent of $12.28 PSF as of Q4 2014. The South Kansas City Shopping Center Submarket, where the Kansas Center property is located, encompasses 8.57 million sq. ft. The Q4 2014 submarket vacancy was 11.3% and quoted rental rates averaged $11.40 PSF.
Champaign Market.The Neil Street property is located in Champaign, Illinois within the Champaign-Urbana metropolitan statistical area (the “Champaign-Urbana MSA”). The Champaign-Urbana MSA had a 2014 population of approximately 236,100 and experienced total employment growth in both 2013 and 2014. In addition, the unemployment rate in the Champaign-Urbana MSA decreased 1.3% from 2013 to 2014 to 6.9%. The Champaign-Urbana retail market is comprised of 575 buildings and 9.86 million sq. ft. The Champaign-Urbana market had 137,726 sq. ft. of absorption in 2014. The Q4 2014 market vacancy was 4.4% and quoted rents were $10.98 PSF. There are 54 retail properties with greater than 30,000 sq. ft. (approximately 5.48 million sq. ft.) within a five mile radius of the Neil Street property. The Q4 2014 vacancy rate was 4.1% and asking rents ranged from $4.25 to $15.50 PSF with an average of $7.79 PSF.
B-53 |
Various | Collateral Asset Summary – Loan No. 6 Midwest Shopping Center Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $38,152,658 67.4% 1.53x 10.3% |
Cash Flow Analysis.
Cash Flow Analysis | ||||||
2012 | 2013 | 2014 | T-9 7/31/2015 Ann. | U/W | U/W PSF | |
Gross Potential Rent | $5,249,110 | $5,272,520 | $5,768,146 | $5,135,304 | $6,291,596 | $7.07 |
Reimbursements | 2,617,067 | 2,084,576 | 1,541,287 | 2,340,269 | 1,855,680 | 2.09 |
Other Income(1) | 371,472 | 154,811 | 289,995 | 203,401 | 199,521 | 0.22 |
Gross Potential Income | $8,237,649 | $7,511,907 | $7,599,428 | $7,678,975 | $8,346,797 | $9.38 |
Less: Vacancy(2) | 0 | 0 | 0 | 0 | (908,366) | (1.02) |
Effective Gross Income | $8,237,649 | $7,511,907 | $7,599,428 | $7,678,975 | $7,438,431 | $8.36 |
Total Operating Expenses | 3,754,726 | 3,636,452 | 3,354,015 | 3,514,924 | 3,493,319 | 3.93 |
Net Operating Income | $4,482,923 | $3,875,455 | $4,245,413 | $4,164,051 | $3,945,112 | $4.44 |
TI/LC | 0 | 0 | 0 | 0 | 305,765 | 0.34 |
Capital Expenditures | 0 | 0 | 0 | 0 | 142,531 | 0.16 |
Net Cash Flow | $4,482,923 | $3,875,455 | $4,245,413 | $4,164,051 | $3,496,815 | $3.93 |
(1) Other Income includes miscellaneous property level income.
(2) U/W Vacancy represents 11.1% of gross income.
Property Management. The Midwest Shopping Center Portfolio Properties are managed by Greenstar Property Management, LLC. Greenstar Property Management, LLC is a Texas based company that provides property management services, accounting and reporting for income-producing properties.
Lockbox / Cash Management. The Midwest Shopping Center Portfolio Loan is structured with a hard lockbox and in place cash management. The borrowers instructed the tenants to deposit all rents and other payments into the lockbox account controlled by the lender. All funds in the lockbox account are swept daily to a cash management account under the control of the lender. Provided no Trigger Period (as defined herein) exists, all funds in the cash management account after payment of all required monthly debt service and reserve amounts due under the Midwest Shopping Center Portfolio Loan documents will be remitted to the borrower.
A “Trigger Period” will commence (i) upon an event of default under the mortgage loan documents, (ii) if the DSCR is less than 1.10x on the last day of any calendar quarter, (iii) upon an event of default under the mezzanine loan or (iv) upon the commencement of a Lease Sweep Period (as defined below). A Trigger Period will cease to exist when (a) with respect to clause (i) and (iii), such event of default has been cured, (b) with respect to clause (ii) the DSCR is at least 1.15x for two consecutive quarters and (c) with respect to clause (iv) when such Lease Sweep Period has ended and no other Lease Sweep Period is then continuing.
A “Lease Sweep Period” will commence on the first monthly payment date following the occurrence of any of the following: (i) the date that is 18 months prior to the earliest stated expiration of a Lease Sweep Lease (as defined herein), (ii) the receipt by borrower or manager of a notice from any tenant under a Lease Sweep Lease exercising its right to terminate its lease sweep space, (iii) the date on which a Lease Sweep Tenant Party surrenders, cancels or terminates its Lease Sweep Lease (or any material portion thereof) prior to its then current expiration date or the date on which a Lease Sweep Tenant Party delivers to the borrower or property manager a notice that it intends to surrender, cancel or terminate its Lease Sweep Lease (or any material portion thereof) prior to its then current expiration date, (iv) the date that any Lease Sweep Tenant Party discontinues its business in the space demised under the applicable Lease Sweep Lease, (v) upon the occurrence of a monetary or material non-monetary default under a Lease Sweep Lease by the tenant thereunder that continues beyond any applicable notice and cure period, (vi) upon a Lease Sweep Tenant Party insolvency proceeding or (vii) upon a decline in the credit rating of the tenant under a Lease Sweep Lease below “BBB+” or equivalent of any of the rating agencies.
The “Lease Sweep Lease” means (i) the certain lease between KRCV Corp. and Home Depot U.S.A., Inc., dated as of October 19, 1998, (ii) the certain lease between Kimven Corporation and Home Dept U.S.A., Inc., dated as October 16, 1998 (collectively with the lease identified in subclause (i), the “Home Depot Leases”) or (iii) any replacement lease that, either individually or when taken together with any other lease with the same tenant (or its affiliate), covers 80% of the space demised pursuant to the Lease Sweep Lease that is being replaced.
A “Lease Sweep Tenant Party” means the tenant under a Lease Sweep Lease or its direct or indirect parent company, if any.
B-54 |
Various | Collateral Asset Summary – Loan No. 6 Midwest Shopping Center Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $38,152,658 67.4% 1.53x 10.3% |
Initial Reserves. At loan closing, the borrowers deposited (i) $894,563 into a tax reserve account, (ii) $500,000 into the TI/LC reserve account, (iii) $105,640 into the required repairs reserve account, which represents 110% of the engineer’s recommendation and (iv) $58,401 into a Ross Dress for Less reserve account, which was reserved for common area maintenance reconciliations for 2012 and 2013.
Ongoing Reserves. On a monthly basis, the borrowers are required to deposit reserves of (i) $14,824 into a replacement reserve account, (ii) $29,647 into a TI/LC reserve account, subject to a cap of $1,000,000 so long as (a) the debt yield is no less than 10% and (b) the Home Depot leases have been renewed, extended or replaced in accordance with the terms and conditions provided in the loan documents, (iii) 1/12 of the estimated annual taxes, initially estimated to be $224,518 (which excludes taxes for any portion of the properties where Home Depot and Rib Crib BBQ are obligated to pay the taxing authority directly and such tenant is paying the applicable authority in accordance with the loan documents) and (iv) 1/12 of the annual insurance premiums into an insurance reserve account if an acceptable blanket insurance policy is no longer in place. On each monthly payment date during a Lease Sweep Period, all excess cash flow will be deposited to the lease sweep reserve.
Current Mezzanine or Subordinate Indebtedness. A $5,500,000 mezzanine loan was funded concurrently with the funding of the Midwest Shopping Center Portfolio Loan. The mezzanine loan is coterminous with the Midwest Shopping Center Portfolio Loan, accrues interest at a rate of 11.0000% and is interest only for the entire term. The current holder of the mezzanine loan is WC MRP6 Mezz, LLC.
Future Mezzanine or Subordinate Indebtedness Permitted.None.
Partial Release. On any payment date after the lockout period, the borrowers may obtain the release of an individual property upon a bona fide third-party sale provided, among other things, (i) the LTV for the remaining properties does not exceed the lesser of the LTV immediately preceding such sale and 77.3%, (ii) the DSCR for the remaining properties is not less than the greater of the DSCR immediately preceding the sale and 1.19x and (iii) the borrowers partially defease to the lender a release amount equal to the greater of (a) 87.443% of net sale proceeds and (b) 120% of the allocated loan amount for the property being sold. For the avoidance of doubt, the LTV and DSCR calculations used in connection with the release of an individual property from the Midwest Shopping Center Portfolio are based on the sum of the outstanding principal balance of the Midwest Shopping Center Portfolio Loan and the outstanding principal balance of the current mezzanine loan.
Substitution.None.
B-55 |
Various | Collateral Asset Summary – Loan No. 6 Midwest Shopping Center Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $38,152,658 67.4% 1.53x 10.3% |
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B-57 |
12653 Telecom Drive | Collateral Asset Summary – Loan No. 7 Intellicenter | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $33,562,500 75.0% 1.44x 9.3% |
B-58 |
12653 Telecom Drive | Collateral Asset Summary – Loan No. 7 Intellicenter | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $33,562,500 75.0% 1.44x 9.3% |
Mortgage Loan Information | |
Loan Seller: | KeyBank |
Loan Purpose: | Acquisition |
Sponsor: | City Office REIT Operating Partnership, L.P. |
Borrower: | CIO Intellicenter, Limited Partnership |
Original Balance: | $33,562,500 |
Cut-off Date Balance: | $33,562,500 |
% by Initial UPB: | 3.6% |
Interest Rate: | 4.6500% |
Payment Date: | 1st of each month |
First Payment Date: | November 1, 2015 |
Maturity Date: | October 1, 2025 |
Amortization: | Interest only for first 36 months; 360 months thereafter |
Additional Debt: | None |
Call Protection: | L(25), YM1(92), O(3) |
Lockbox / Cash Management: | Soft / Springing |
Reserves(1) | ||
Initial | Monthly | |
Taxes: | $630,000 | $52,500 |
Insurance: | $0 | Springing |
Replacement: | $3,392 | $3,392 |
TI/LC(2): | $250,000 | $16,959 |
Morgan Stanley: | $0 | Springing |
Major Tenant Rollover: | $0 | Springing |
Financial Information | |
Cut-off Date Balance / Sq. Ft.: | $165 |
Balloon Balance / Sq. Ft.: | $145 |
Cut-off Date LTV: | 75.0% |
Balloon LTV: | 65.9% |
Underwritten NOI DSCR(3): | 1.50x |
Underwritten NCF DSCR(3): | 1.44x |
Underwritten NOI Debt Yield: | 9.3% |
Underwritten NCF Debt Yield: | 8.9% |
Underwritten NOI Debt Yield at Balloon: | 10.6% |
Underwritten NCF Debt Yield at Balloon: | 10.2% |
Property Information | |
Single Asset / Portfolio: | Single Asset |
Property Type: | Suburban Office |
Collateral: | Fee Simple |
Location: | Tampa, FL |
Year Built / Renovated: | 2008 / NAP |
Total Sq. Ft.: | 203,509 |
Property Management: | Cassidy Turley Commercial Real Estate Services, Inc., d/b/a Cushman and Wakefield |
Underwritten NOI: | $3,110,342 |
Underwritten NCF: | $3,000,142 |
Appraised Value: | $44,750,000 |
Appraisal Date: | August 5, 2015 |
Historical NOI(4) | |
Most Recent NOI: | $2,876,120 (T-12 June 30, 2015) |
2014 NOI: | $2,340,841 (December 31, 2014) |
2013 NOI: | $271,194 (December 31, 2013) |
2012 NOI: | NAV |
Historical Occupancy | |
Most Recent Occupancy: | 100.0% (July 1, 2015) |
2014 Occupancy: | 100.0% (December 15, 2014) |
2013 Occupancy: | NAV |
2012 Occupancy: | NAV |
(1) | See “Initial Reserves” and “Ongoing Reserves” herein. |
(2) | The TI/LC reserve is subject to a cap of $525,000. |
(3) | Based on amortizing debt service payments. Based on the current interest only debt service payments, the Underwritten NOI DSCR and Underwritten NCF DSCR are 1.97x and 1.90x, respectively. |
(4) | For information regarding the increase in Historical NOI see “Cash Flow Analysis” herein. |
B-59 |
12653 Telecom Drive | Collateral Asset Summary – Loan No. 7 Intellicenter | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $33,562,500 75.0% 1.44x 9.3% |
Tenant Summary |
Tenant | Ratings (Fitch/Moody’s/S&P)(1) | Net Rentable Area (Sq. Ft.) | % of Net Rentable Area | U/W Base Rent PSF | % of Total U/W Base Rent | Lease Expiration | ||||||||||
H. Lee Moffitt Cancer Center(2) | NR/A3/A- | 154,963 | 76.1 | % | $23.88 | (3) | 76.8 | % | 3/31/2027 | |||||||
Morgan Stanley(4) | A/A3/A- | 25,294 | 12.4 | % | $24.23 | (5) | 12.7 | % | 3/31/2024(6) | |||||||
Open Text(7) | NR/ Ba1/BB+ | 21,344 | 10.5 | % | $23.69 | 10.5 | % | 3/31/2019 | ||||||||
Total Major Tenants | 201,601 | 99.1 | % | $23.90 | 100.0 | % | ||||||||||
Non-Major Tenants | 1,908 | 0.9 | % | $0.00 | (8) | 0.0 | % | |||||||||
Total Occupied Collateral | 203,509 | 100.0 | % | $23.68 | 100.0 | % | ||||||||||
Vacant | 0 | 0.0 | % | |||||||||||||
Total | 203,509 | 100.0 | % | |||||||||||||
(1) | Certain ratings are those of the parent company whether or not the parent company guarantees the lease. |
(2) | The H. Lee Moffitt Cancer Center lease contains two, ten-year extension options with written notice to exercise an option delivered no earlier than 18 months and no later than 15 months prior to expiration. |
(3) | U/W Base Rent PSF includes $374,494 in step rent which represents the straight line of average rent underwritten throughout the loan term. The current in-place base rent PSF is $21.46. |
(4) | The Morgan Stanley lease contains one, seven-year extension option with written notice to exercise an option delivered no earlier than 18 months and no later than 12 months prior to expiration. |
(5) | Morgan Stanley U/W Base Rent PSF includes a rental increase effective April 1, 2016. |
(6) | Morgan Stanley has the right to terminate their lease on 3/31/2019 upon at least 12 months’ notice and payment of a termination fee of $855,214 ($33.81 PSF). |
(7) | The Open Text lease contains two, five-year extension options with notice of tenant’s exercise of option delivered no earlier than 12 months and no later than 9 months prior to expiration. |
(8) | The Non-Major Tenant, Four Fingers IC, Inc. d/b/a Nature’s Table (cafeteria operator), pays percentage rent at the rate of 7% of gross sales. No rent was underwritten for the tenant. |
Lease Rollover Schedule(1) | ||||||||||||||||||||||||
Year | # of Leases Expiring | Total Expiring Sq. Ft. | % of Total Sq. Ft. Expiring | Cumulative Sq. Ft. Expiring | Cumulative % of Sq. Ft. Expiring | Annual U/W Base Rent PSF | % U/W Base Rent Rolling | Cumulative % of U/W Base Rent | ||||||||||||||||
MTM | 0 | 0 | 0.0 | % | 0 | 0.0% | $0.00 | 0.0 | % | 0.0 | % | |||||||||||||
2015 | 0 | 0 | 0.0 | % | 0 | 0.0% | $0.00 | 0.0 | % | 0.0 | % | |||||||||||||
2016 | 0 | 0 | 0.0 | % | 0 | 0.0% | $0.00 | 0.0 | % | 0.0 | % | |||||||||||||
2017 | 0 | 0 | 0.0 | % | 0 | 0.0% | $0.00 | 0.0 | % | 0.0 | % | |||||||||||||
2018 | 0 | 0 | 0.0 | % | 0 | 0.0% | $0.00 | 0.0 | % | 0.0 | % | |||||||||||||
2019 | 1 | 21,344 | 10.5 | % | 21,344 | 10.5% | $23.69 | 10.5 | % | 10.5 | % | |||||||||||||
2020 | 0 | 0 | 0.0 | % | 21,344 | 10.5% | $0.00 | 0.0 | % | 10.5 | % | |||||||||||||
2021 | 0 | 0 | 0.0 | % | 21,344 | 10.5% | $0.00 | 0.0 | % | 10.5 | % | |||||||||||||
2022 | 0 | 0 | 0.0 | % | 21,344 | 10.5% | $0.00 | 0.0 | % | 10.5 | % | |||||||||||||
2023 | 1 | 1,908 | 0.9 | % | 23,252 | 11.4% | $0.00 | 0.0 | % | 10.5 | % | |||||||||||||
2024 | 1 | 25,294 | 12.4 | % | 48,546 | �� | 23.9% | $24.23 | 12.7 | % | 23.2 | % | ||||||||||||
2025 | 0 | 0 | 0.0 | % | 48,546 | 23.9% | $0.00 | 0.0 | % | 23.2 | % | |||||||||||||
Thereafter | 1 | 154,963 | 76.1 | % | 203,509 | 100.0% | $23.88 | 76.8 | % | 100.0 | % | |||||||||||||
Vacant | NAP | 0 | 0.0 | % | 203,509 | 100.0% | NAP | NAP | ||||||||||||||||
Total / Wtd. Avg. | 4 | 203,509 | 100.0 | % | $23.68 | 100.0 | % | |||||||||||||||||
(1) | Certain tenants have lease termination options that may become exercisable prior to the originally stated expiration date of the tenant lease that are not considered in the lease rollover schedule. |
The Loan. The Intellicenter loan (the “Intellicenter Loan”) is a $33.5625 million fixed rate loan secured by the borrower’s fee simple interest in a 203,509 sq. ft. Class A office property located at 12653 Telecom Drive in Tampa, Florida (the “Intellicenter Property”). The Intellicenter Loan has a 10-year term and is interest only for the first 36 months of the term and amortizes on a 30-year schedule thereafter. The Intellicenter Loan accrues interest at a fixed rate equal to 4.6500%. Loan proceeds, along with approximately $12.5 million of sponsor equity, were used to acquire the Intellicenter Property for $44.6 million, fund upfront reserves of approximately $0.9 million and pay closing costs of approximately $0.6 million. Based on the appraised value of $44.75 million as of August 5, 2015, the cut-off date LTV ratio is 75.0%. The most recent prior financing of the Intellicenter Property was not included in a securitization.
B-60 |
12653 Telecom Drive | Collateral Asset Summary – Loan No. 7 Intellicenter | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $33,562,500 75.0% 1.44x 9.3% |
Sources and Uses | ||||||
Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
Mortgage Loan | $33,562,500 | 72.8% | Purchase Price | $44,600,000 | 96.8% | |
Sponsor Equity | $12,512,969 | 27.2% | Reserves | $883,392 | 1.9% | |
Closing Costs | $592,077 | 1.3% | ||||
Total Sources | $46,075,469 | 100.0% | Total Uses | $46,075,469 | 100.0% |
The Borrower / Sponsor. The borrower is CIO Intellicenter, Limited Partnership, a single purpose Delaware limited partnership structured to be bankruptcy-remote, with one independent director in its organizational structure. The sponsor of the borrower and the non-recourse carve-out guarantor is City Office REIT Operating Partnership, L.P.
City Office REIT Operating Partnership, L.P. is a subsidiary of City Office REIT, Inc. (“CIO”). CIO, which was formed in 2013, is a Maryland corporation focused on acquiring, owning and operating high-quality Class A and B office properties located primarily within 12 target markets in the southern and western United States. As of June 20, 2015, CIO owned 12 office complexes comprising 25 buildings, representing 2.7 million square feet. Chief Executive Officer and Director of CIO, James Farrar, has over 15 years of experience in the private equity, real estate and corporate finance industries. Since 2009, he has been involved in over $1 billion of real estate acquisitions across the United States.
The Property.The Intellicenter Property is a four-story, suburban office building totaling 203,509 sq. ft.,located in Tampa, Florida. The Intellicenter Property was constructed in 2008, features a LEED Silver Core & Shell certification and has high quality interior finishes. There are 1,155 available surface parking spaces at the Intellicenter Property which equates to a parking ratio of approximately 5.68 spaces per 1,000 sq. ft. The Intellicenter Property is located within the 199-acre Tampa Telecom Park, one of the Tampa Bay area’s largest business parks containing approximately two million square feet within 33 buildings. Tampa Telecom Park, a master planned mixed-use business park located along the Hillsborough River, features office, medical office, retail, service center and light industrial uses, as well as a variety of restaurants, hotels and a full service child care facility.
As of July 1, 2015, the Intellicenter Property is 100.0% leased to four tenants. Approximately 88.6% of the net rentable area is occupied by investment grade tenants.
Environmental Matters. The Phase I environmental report dated July 16, 2015 recommended no further action at the Intellicenter Property.
Major Tenants.
H. Lee Moffitt Cancer Center(“Moffitt”)(154,963 sq. ft., 76.1% of NRA, 76.8% of U/W Base Rent; rated A3/A- by Moody’s/S&P) Moffitt is a nonprofit cancer treatment and research center located in Tampa, Florida on the University of South Florida Campus, approximately four miles from the Intellicenter Property. Moffitt opened in 1986 and has been ranked as one of the nation’s top cancer hospitals since 1999. It is one of 41 National Cancer Institute-designated Comprehensive Cancer Centers in the United States and the only one located in Florida. Moffitt combines compassionate clinical practice, focused, innovative research and education to further their mission goal of preventing and curing cancer. As of December 31, 2014, Moffitt employed approximately 4,556 people and its capital expenditures, operations and employment were estimated to generate a $1.7 billion economic impact in the state of Florida. Net patient revenues have grown over the past five years by 36.3% from approximately $556.8 million in 2010 to $758.7 million in 2014.
Moffitt’s lease expires March 31, 2027 and has two, ten-year extension options. Renewal rent will be at fair market value. Moffitt does not have any termination options. The Intellicenter Property serves as Moffitt’s business and administrative headquarters after consolidating those functions from around the Tampa region.
Morgan Stanley(25,294 sq. ft., 12.4% of NRA, 12.7% of U/W Base Rent; rated A3/A-/A by Moody’s/S&P/Fitch) Morgan Stanley is a financial holding company that provides various financial products and services to corporations, governments, financial institutions and individuals worldwide. Morgan Stanley’s business segments includes Institutional Securities, which offers financial advisory services on mergers and acquisitions and capital-raising services; Wealth Management, which provides comprehensive financial services to high net worth individuals and small to medium sized businesses; and Investment Management, which provides traditional asset management, alternative investments, merchant banking and real estate investing services. As of year-end 2014 Morgan Stanley had 55,802 employees worldwide and reported net revenue of approximately $34.3 billion.
Morgan Stanley’s lease expires March 31, 2024 and has one, seven-year extension option. Renewal rent will be at fair market value. Morgan Stanley has one termination option effective March 31, 2019 with at least 12 months’ notice and payment of a termination fee of $855,214 ($33.81 PSF). Morgan Stanley reportedly invested $6.6 million ($261 PSF) into their space at the Intellicenter Property.
B-61 |
12653 Telecom Drive | Collateral Asset Summary – Loan No. 7 Intellicenter | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $33,562,500 75.0% 1.44x 9.3% |
The Market. The Intellicenter Property is located in the I-75 Corridor market within the Tampa-St. Petersburg-Clearwater, FL metropolitan statistical area (“MSA”) and is part of the Northeast Tampa office submarket. Primary access to the Intellicenter Property’s neighborhood is provided by Interstate 75 located approximately 1.5 miles to the east. Interstate 75 is the major north/south arterial through the central and western Florida. Interstate 4 is located approximately six miles to the south, provides access to the Tampa CBD and continues to Interstate 275 linking Tampa to St. Petersburg across Old Tampa Bay. The Intellicenter Property is located approximately four miles from the Moffitt Cancer Center on the University of South Florida campus, approximately 17 miles from the Tampa CBD and approximately 23 miles from the Tampa International Airport.
The Northeast Tampa submarket is located within the I-75 Corridor market, the third largest market by leasable area in the Tampa/St. Petersburg/Clearwater, FL MSA. The submarket is bounded roughly by Interstate 4 to the south, State Highway 41 to the west and the Hillsborough County lines to the north and east. The I-75 Corridor market consists of 1,264 buildings providing approximately 19.3 million sq. ft. of commercial office space. The vacancy rate in the I-75 Corridor market was 13.1% at the end of Q2 2015, down 1.5% from the 13.3% vacancy rate in Q2 2014. Asking rents were $19.05 PSF at the end of Q2 2015, up 2.2% from $18.64 PSF in Q2 2014. Class A vacancy in the I-75 Corridor market was 10.8% with asking rent of $22.35 PSF as of Q2 2015.Class A vacancy in the Northeast Tampa submarket was 15.3% with asking rent of $22.90 PSF as of Q2 2015. There are no new projects under construction in the submarket.
Summary of Comparable Office Rentals(1) | ||||
Name | Intellicenter Property | Highland Oaks IV | Highland Oaks V | 8800 Hidden River |
Distance from subject (miles) | NAP | 8.6 | 8.9 | 1.8 |
Building Sq. Ft. | 203,509 | 128,376 | 98,472 | 135,000 |
Year Built | 2008 | 2008 | 2007 | 1992 |
Occupancy | 100.0% | 98.0% | 98.0% | 100.0% |
Rent PSF | $23.68 | $24.70 | $22.75 | $20.00 |
Expense Basis | Modified Gross | FS | FS | FS |
(1) | Source: Appraisal. |
Cash Flow Analysis.
Cash Flow Analysis | |||||
2013 | 2014 | T-12 6/30/2015 | U/W | U/W PSF | |
Base Rent(1)(2) | $1,408,694 | $3,396,696 | $3,991,312 | $4,421,483 | $21.73 |
Value of Vacant Space | 0 | 0 | 0 | 396,909 | 1.95 |
Gross Potential Rent | $1,408,694 | $3,396,696 | $3,991,312 | $4,818,392 | $23.68 |
Total Recoveries | 3,950 | 435,517 | 388,334 | 591,463 | 2.91 |
Total Other Income | 14,394 | 8,753 | 7,760 | 6,000 | 0.03 |
Less: Vacancy & Credit Loss(3) | 0 | 0 | 0 | (396,909) | (1.95) |
Effective Gross Income | $1,427,038 | $3,840,966 | $4,387,406 | $5,018,946 | $24.66 |
Total Operating Expenses | 1,155,844 | 1,500,125 | 1,511,286 | 1,908,604 | 9.38 |
Net Operating Income | $271,194 | $2,340,841 | $2,876,120 | $3,110,342 | $15.28 |
TI/LC(4) | 3,823,057 | 831,549 | 433,686 | 69,497 | 0.34 |
Capital Expenditures | 627,107 | 41,257 | 184,964 | 40,704 | 0.20 |
Net Cash Flow | $(4,178,970) | $1,468,035 | $2,257,470 | $3,000,142 | $14.74 |
(1) | U/W Base Rent includes $374,494 in step rent averaged over the loan term for Moffitt and $14,923 in base rent steps for Morgan Stanley through April 2016. In-place base rent is $4,053,074 ($19.92 PSF) which results in an underwritten NCF DSCR of 1.27x. |
(2) | The increase in base rent from the 2013 to T-12 6/30/2015 period was due to increasing occupancy at the Intellicenter Property. |
(3) | U/W Vacancy represents 7.3% of gross income. The physical occupancy as of July 1, 2015 is 100.0%. |
(4) | In lieu of normalized monthly TI/LC reserve collections of $0.34 PSF per annum, the borrower accelerated collections into the TI/LC reserve account by depositing $250,000 at closing along with ongoing monthly collection of $16,959 ($1.00 PSF per annum) until the TI/LC reserve cap of $525,000 is reached. Using TI/LC collections of $1.00 PSF, the loan underwrites to a NCF DSCR of 1.38x. |
Property Management. The Intellicenter Property is managed by Cassidy Turley Commercial Real Estate Services, Inc., d/b/a Cushman and Wakefield.
B-62 |
12653 Telecom Drive | Collateral Asset Summary – Loan No. 7 Intellicenter | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $33,562,500 75.0% 1.44x 9.3% |
Lockbox / Cash Management. The Intellicenter Loan is structured with a soft lockbox and springing cash management. The borrower and property manager are required to deposit all rents and other revenue into a clearing account within two business days of receipt. All funds in the clearing account are swept daily into the borrower’s operating account unless a Cash Sweep Event (as defined herein) is continuing, in which event funds will be swept on a daily basis into the cash management account and disbursed in accordance with the loan documents.
A “Cash Sweep Event” will commence upon (i) the occurrence of an event of default, (ii) bankruptcy, insolvency, or similar action of the borrower or the property manager, (iii) if the debt service coverage ratio falls below 1.20x on a trailing three-month basis or (iv) the date that Moffitt or its successors ceases operations, vacates, or abandons the Intellicenter Property (or gives notice), or files for bankruptcy, insolvency or similar action of such tenant (“Moffitt Cash Sweep Event”).
Initial Reserves. At loan closing, the borrower deposited (i) $630,000 into a tax reserve account, (ii) $250,000 into a TI/LC reserve account and (iii) $3,392 into a replacement reserve account.
Ongoing Reserves. On a monthly basis, the borrower is required to deposit reserves of (i) 1/12 of the estimated annual real estate taxes, which currently equates to $52,500, into a reserve account, (ii) 1/12 of the annual insurance premium will be required to be deposited into an insurance reserve account if an acceptable blanket insurance policy is no longer in place, (iii) $3,392 into a replacement reserve account and (iv) $16,959 into a TI/LC reserve account, subject to a TI/LC reserve cap equal to $525,000. In lieu of ongoing monthly TI/LC reserve deposits, the borrower may post a letter of credit in an amount equal to the difference between the TI/LC reserve cap and the then current balance in the TI/LC reserve. In addition, upon a Moffitt Cash Sweep Event, all excess cash flow will be deposited in the major tenant rollover reserve to fund tenant improvements and leasing commissions for the Moffitt premises. Furthermore, the borrower will be required to deposit within one business day of receipt any fees or payments received in connection with the rejection, buy-out, termination, surrender or cancellation of the Morgan Stanley lease into the Morgan Stanley reserve account.
Current Mezzanine or Subordinate Indebtedness. None.
Future Mezzanine or Subordinate Indebtedness Permitted. None.
B-63 |
12653 Telecom Drive | Collateral Asset Summary – Loan No. 7 Intellicenter | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $33,562,500 75.0% 1.44x 9.3% |
B-64 |
12653 Telecom Drive | Collateral Asset Summary – Loan No. 7 Intellicenter | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $33,562,500 75.0% 1.44x 9.3% |
B-65 |
729 Southwest 15th Avenue Portland, OR 97205 | Collateral Asset Summary – Loan No. 8 Hotel deLuxe | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $32,419,793 68.7% 1.85x 12.8% |
B-66 |
729 Southwest 15th Avenue Portland, OR 97205 | Collateral Asset Summary – Loan No. 8 Hotel deLuxe | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $32,419,793 68.7% 1.85x 12.8% |
Mortgage Loan Information | |
Loan Seller: | BNYM |
Loan Purpose: | Refinance |
Sponsor(1): | Gordon D. Sondland |
Borrower: | Aspen Mallory Holdings, LLC |
Original Balance: | $32,500,000 |
Cut-off Date Balance: | $32,419,793 |
% by Initial UPB: | 3.5% |
Interest Rate: | 4.5900% |
Payment Date: | 6th of each month |
First Payment Date: | September 6, 2015 |
Maturity Date: | August 6, 2025 |
Amortization: | 360 months |
Additional Debt: | None |
Call Protection: | L(26), D(89), O(5) |
Lockbox / Cash Management: | Hard / Springing |
Reserves(2) | ||||
Initial | Monthly | |||
Taxes: | $102,978 | $5,598 | ||
Insurance: | $0 | Springing | ||
FF&E: | $0 | 4.0% of prior month’s gross revenues | ||
Financial Information | ||||
Cut-off Date Balance / Room: | $249,383 | |||
Balloon Balance / Room: | $202,773 | |||
Cut-off Date LTV: | 68.7% | |||
Balloon LTV: | 55.8% | |||
Underwritten NOI DSCR: | 2.08x | |||
Underwritten NCF DSCR: | 1.85x | |||
Underwritten NOI Debt Yield: | 12.8% | |||
Underwritten NCF Debt Yield: | 11.4% | |||
Underwritten NOI Debt Yield at Balloon: | 15.8% | |||
Underwritten NCF Debt Yield at Balloon: | 14.0% | |||
Property Information | |
Single Asset / Portfolio: | Single Asset |
Property Type: | Full Service Hospitality |
Collateral: | Fee Simple |
Location: | Portland, OR |
Year Built / Renovated: | 1912 / 2006 |
Total Rooms: | 130 |
Property Management: | Aspen Lodging Group, LLC |
Underwritten NOI: | $4,152,863 |
Underwritten NCF: | $3,701,794 |
Appraised Value: | $47,200,000 |
Appraisal Date: | April 10, 2015 |
Historical NOI | |
Most Recent NOI: | $4,159,812 (T-12 June 30, 2015) |
2014 NOI: | $3,611,828 (December 31, 2014) |
2013 NOI: | $3,083,637 (December 31, 2013) |
2012 NOI: | $2,593,684 (December 31, 2012) |
Historical Occupancy | |
Most Recent Occupancy: | 80.5% (June 30, 2015) |
2014 Occupancy: | 78.1% (December 31, 2014) |
2013 Occupancy: | 79.2% (December 31, 2013) |
2012 Occupancy: | 75.6% (December 31, 2012) |
(1) | The sponsor is also the sponsor of the mortgage loan identified on Annex A-1 to the Free Writing Prospectus as Hotel Preston, which has a Cut-off Date Balance of $10,224,755. |
(2) | See “Initial Reserves” and “Ongoing Reserves” herein. |
B-67 |
729 Southwest 15th Avenue Portland, OR 97205 | Collateral Asset Summary – Loan No. 8 Hotel deLuxe | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $32,419,793 68.7% 1.85x 12.8% |
The Loan. The Hotel deLuxe loan (the “Hotel deLuxe Loan”) is a $32.5 million fixed rate loan secured by the borrower’s fee simple interest in a 130-room full service boutique hotel located at 729 Southwest 15th Avenue in Portland, Oregon (the “Hotel deLuxe Property”). The Hotel deLuxe Loan has a 10-year term and amortizes on a 30-year schedule. The Hotel deLuxe Loan accrues interest at a fixed rate equal to 4.5900%. Loan proceeds were used to retire existing debt of $24.5 million, pay closing costs of approximately $0.3 million, fund reserves of approximately $0.1 million and return approximately $7.6 million in equity to the borrower. Based on the appraised value of $47.2 million as of April 10, 2015, the cut-off date LTV is 68.7%. The most recent prior financing of the Hotel deLuxe Property was included in the CD 2007-CD5 securitization.
Sources and Uses | ||||||
Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
Mortgage Loan | $32,500,000 | 100.0% | Loan Payoff | $24,520,808 | 75.4% | |
Closing Costs | $281,482 | 0.9% | ||||
Reserves | $102,978 | 0.3% | ||||
Return of Equity | $7,594,732 | 23.4% | ||||
Total Sources | $32,500,000 | 100.0% | Total Uses | $32,500,000 | 100.0% |
The Borrower / Sponsor. The borrower, Aspen Mallory Holdings, LLC, is a single purpose Delaware limited liability company structured to be bankruptcy-remote, with two independent directors in the organizational structure. The sponsor of the borrower and nonrecourse carve-out guarantor is Gordon D. Sondland.
Gordon D. Sondland is a principal of The Aspen Companies (“Aspen”) and the founder and CEO of Provenance Hotels (“Provenance”). Aspen owns, develops and manages a diversified portfolio of income properties including hotels, retail centers, office buildings and residential properties. Founded in 1985, Provenance serves as Aspen’s boutique hotel brand. In 2001, Provenance launched a management company that today operates six independent boutique hotels with two additional properties currently undergoing construction and rebranding. Provenance manages six additional hotels, including The Westin Portland. Provenance is also an approved manager for Starwood and Marriott. Including the Hotel DeLuxe Property, Provenance owns, or retains an equity interest in, thirteen hotels, totaling 2,236 rooms, all of which are located in Oregon, Washington and Tennessee.
The sponsor has advised the lender that it intends to effect a restructuring of its ownership interests in its real estate portfolio into a consolidated holding company controlled by the sponsor (“Holdco”), as permitted by the loan documents. In such event, the borrower will be permitted to replace the sponsor as nonrecourse carve-out guarantor with Holdco, subject to satisfaction of various conditions, including that Holdco meets specified minimum net worth and liquidity requirements.
The Property.The Hotel deLuxe Property is an eight-story, 130-room, full service luxury boutique hotel located in Portland, Oregon. The Hotel deLuxe Property includes 1,772 sq. ft. of banquet and meeting space and a 5,700 sq. ft. rooftop event space in the adjacent parking structure that is part of the Hotel deLuxe Property. The Hotel deLuxe Property was built in 1912 as the Mallory Hotel. After being acquired by the sponsor in 2006, the Hotel deLuxe Property underwent a $9.0 million renovation ($69,231 per room), and reopened in May 2006 as the Hotel deLuxe. In 2007, the Hotel deLuxe Property was added to the National Register of Historical Places. In addition to the $9.0 million renovation expenditures and rebranding in 2006, capital expenditures between 2010 and 2014 totaled $485,450 for guest room case goods and soft goods, computer/phone system upgrades, a fitness center, carpet replacement and upgrades to the parking structure.
The collateral for the Hotel deLuxe Loan includes a 205-space, four-story parking structure, completed in 1999, located across the street from the Hotel deLuxe Property at the corner of Southwest Yamhill Street and 15th Avenue. The parking structure offers monthly and long-term parking to local residents and employees (i.e. employees of the U.S. General Services Administration, the current tenant in the ground floor office space).
Historical Occupancy, ADR, RevPar(1) | |||||||||
Hotel deLuxe Property(2) | Competitive Set | Penetration Factor | |||||||
Year | Occupancy | ADR | RevPAR | Occupancy | ADR | RevPAR | Occupancy | ADR | RevPAR |
2013 | 75.8% | $142.15 | $107.70 | 80.6% | $143.88 | $115.93 | 94.0% | 98.8% | 92.9% |
2014 | 78.0% | $155.56 | $121.36 | 78.9% | $160.65 | $126.75 | 98.9% | 96.8% | 95.7% |
T–12 April 2015 | 79.9% | $180.23 | $143.99 | 82.5% | $184.23 | $151.96 | 96.9% | 97.8% | 94.8% |
(1) | Source: Hospitality research report. |
(2) | The minor variances between the underwriting, the hospitality research report and the above table with respect to Occupancy, ADR and RevPAR at the Hotel deLuxe Property are attributable to variances in reporting methodologies and/or timing differences. |
Environmental Matters. The Phase I environmental report dated April 14, 2015 recommended no further action at the Hotel deLuxe Property other than the implementation of an asbestos operations and maintenance plan due to the property’s age.
B-68 |
729 Southwest 15th Avenue Portland, OR 97205 | Collateral Asset Summary – Loan No. 8 Hotel deLuxe | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $32,419,793 68.7% 1.85x 12.8% |
The Market.The Hotel deLuxe Property is located on the western border of Portland’s central business district on Southwest 15th Avenue, two blocks west of Interstate 405, which loops around the west side of downtown Portland. West Burnside Street is two blocks north of the Hotel deLuxe Property, which is an east/west arterial that bisects the central business district. The Hotel deLuxe Property is one block north of the MAX light rail line which connects the central business district directly to the Oregon Convention Center, Memorial Coliseum, MODA Center and Portland International Airport (PDX). The street trolley stop is immediately south of the Hotel deLuxe Property. According to the appraisal, the Hotel deLuxe Property is the closest full service hotel to the Pearl District and Nob Hill, which are destination shopping neighborhoods. The Hotel deLuxe Property is also a few blocks away from another retail shopping core along southwest Broadway, which is downtown Portland’s primary north-south retail arterial.The full service hospitality Portland submarket had an estimated occupancy rate of 81.5% in 2014, which is expected to remain steady at about 80% into 2018, while ADR was an estimated $166.46 in 2014 and is expected to increase to $203.09 in 2018.
The Portland area attracts many leisure travelers due to numerous annual events and festivals, including the Rock and Roll Marathon in May and the Portland Marathon in October. According to the appraisal, leisure travelers make up 63.0% of the Hotel deLuxe Property’s room night demand, which is slightly less than the competitive set. Tax-free shopping, popular arts culture and a growing culinary scene are among the reasons leisure demand is anticipated to remain strong.
In downtown Portland, corporate demand is driven by business growth and increases in occupied office space, which is forecasted to slightly increase and improve as the economy continues to improve. According to the appraisal, commercial travelers and meeting and group travelers make up 21.0% and 16.0%, respectively, of the Hotel deLuxe Property’s room night demand. This segment is driven by social events, annual festivals, meetings from local and regional business and the Oregon Convention Center. Stable growth is forecasted for the meeting and group segment in Portland.
According to the appraisal, additional commercial demand generators include Nike, the largest lodging demand generator in downtown Portland, placing approximately 30,000 room nights in the market annually. NikeTown, Nike’s signature interactive retail venue, attracts millions of consumers every year. Intel is the largest private employer in downtown Portland. With an annual payroll of $1.5 billion, more than 90% of Intel’s 17,500 Oregon employees live in the Portland area. A $3.0 billion expansion project is anticipated to be completed by 2016. Providence Portland Medical Center, a part of Providence Health & Services, is the largest healthcare employer in the area with 15,239 employees. The Oregon Health and Sciences University (“OHSU”) is Oregon’s only health and research university. OHSU operates on a $1.4 billion dollar budget and is one of Portland’s largest employers, with 14,616 employees. Adidas, the second largest sports goods manufacturer in the world, has its North American headquarters located in Portland, Oregon.
The subsequent chart presents the primary competitive set to the Hotel deLuxe Property:
Primary Competitive Set (1) | ||||||
Property | Rooms | Year Opened | Approximate Distance | 2014 Occupancy(2) | 2014 ADR(2) | 2014 RevPAR(2) |
Hotel deLuxe Property | 130 | 1912 | NAP | 78.1% | $172.23 | $134.55 |
Hotel Lucia | 127 | 1908 | 0.6 miles | 79.0% | $178.00 | $140.62 |
Hotel Monaco Portland | 221 | 1996 | 0.6 miles | 92.0% | $206.00 | $189.52 |
Hotel Vintage Plaza | 117 | 1991 | 0.6 miles | 87.0% | $194.00 | $168.78 |
Sentinel Hotel | 100 | 1909 | 0.3 miles | 79.0% | $196.00 | $154.84 |
Westin Portland | 205 | 1999 | 0.5 miles | 83.0% | $200.90 | $166.75 |
Total / Wtd. Avg. | 900 | 84.0% | $193.94 | $162.94 |
(1) | Source: Appraisal. |
(2) | 2014 Occupancy, 2014 ADR and 2014 RevPAR represent estimates from the appraisal. The minor variances between the underwriting, the hospitality research report and the above table with respect to 2014 Occupancy, 2014 ADR and 2014 RevPAR at the Hotel deLuxe Property are attributable to variances in reporting methodologies and/or timing differences. |
The appraiser determined demand segmentation of 63% leisure, 21% commercial and 16% meeting and group for the Hotel deLuxe Property, compared to 43% leisure, 40% commercial and 17% meeting and group for the primary competitive set. The market demand mix is presented in the table below:
Demand Segmentation(1) | ||||
Property | Rooms | Leisure | Commercial | Meeting and Group |
Hotel deLuxe Property | 130 | 63% | 21% | 16% |
Hotel Lucia | 127 | 45% | 30% | 25% |
Hotel Monaco Portland | 221 | 40% | 40% | 20% |
Hotel Vintage Plaza | 117 | 45% | 40% | 15% |
Sentinel Hotel | 100 | 38% | 40% | 22% |
Westin Portland | 205 | 35% | 56% | 9% |
Total / Wtd. Avg. | 900 | 43% | 39% | 17% |
(1) | Source: Appraisal. |
B-69 |
729 Southwest 15th Avenue Portland, OR 97205 | Collateral Asset Summary – Loan No. 8 Hotel deLuxe | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $32,419,793 68.7% 1.85x 12.8% |
Cash Flow Analysis.
Cash Flow Analysis | |||||||
2012 | 2013 | 2014 | T-12 6/30/2015 | U/W | U/W per Room | ||
Occupancy | 75.6% | 79.2% | 78.1% | 80.5% | 80.5% | ||
ADR | $140.73 | $150.36 | $172.28 | $183.60 | $183.60 | ||
RevPAR | $106.39 | $119.09 | $134.55 | $147.82 | $147.82 | ||
Room Revenue | $5,061,968 | $5,650,642 | $6,384,323 | $7,013,945 | $7,013,945 | $53,953 | |
F&B Revenue | 2,521,767 | 2,663,593 | 2,657,609 | 2,851,986 | 2,851,986 | 21,938 | |
Parking Income | 655,008 | 701,084 | 746,861 | 801,620 | 801,620 | 6,166 | |
Other Revenue | 426,499 | 557,089 | 603,791 | 609,172 | 609,172 | 4,686 | |
Total Revenue | $8,665,242 | $9,572,408 | $10,392,584 | $11,276,723 | $11,276,723 | $86,744 | |
Operating Expenses | 3,730,750 | 3,988,216 | 4,165,299 | 4,337,815 | 4,337,815 | 33,368 | |
Undistributed Expenses | 1,789,564 | 1,896,785 | 1,966,178 | 2,094,146 | 2,094,146 | 16,109 | |
Gross Operating Profit | $3,144,928 | $3,687,407 | $4,261,107 | $4,844,762 | $4,844,762 | $37,267 | |
Management Fee(1) | 346,584 | 383,305 | 415,682 | 444,120 | 451,069 | 3,470 | |
Total Fixed Charges | 204,660 | 220,465 | 233,597 | 240,830 | 240,830 | 1,853 | |
Net Operating Income | $2,593,684 | $3,083,637 | $3,611,828 | $4,159,812 | $4,152,863 | $31,945 | |
FF&E(2) | 339,234 | 339,234 | 369,503 | 427,763 | 451,069 | 3,470 | |
Net Cash Flow | $2,254,450 | $2,744,403 | $3,242,325 | $3,732,049 | $3,701,794 | $28,475 |
(1) | U/W Management Fee represents 4.0% of Total Revenue. |
(2) | U/W FF&E represents 4.0% of Total Revenue. |
Property Management. The Hotel deLuxe Property is managed by Aspen Lodging Group, LLC, a borrower affiliate.
Lockbox / Cash Management. The Hotel deLuxe Loan is structured with a hard lockbox and springing cash management. The borrower is required to direct the credit card processing companies or tenants, as applicable, to deposit all credit card receipts and commercial rents directly into a lockbox account controlled by the lender. All non-credit card receipts are required to be deposited in the clearing account within two business days of receipt by the borrower or property manager. For so long as no Cash Flow Trigger Period (as defined below) exists, all funds in the lockbox will be swept daily to the borrower’s operating account. During a Cash Flow Trigger Period, amounts on deposit in the clearing account will be swept daily to a cash management account established and maintained by the lender, and applied to make required payments in accordance with the loan documents, with any excess funds (after payment of debt service, reserve payments and all other amounts due under the loan documents) held by the lender as additional cash collateral.
A “Cash Flow Trigger Period” will commence upon the occurrence of (i) an event of default or (ii) the debt service coverage ratio falling below 1.15x as of the end of any calendar quarter. A Cash Flow Trigger Period will cease to exist (a) with respect to clause (i) above, if such event of default has been cured or waived and (b) with respect to clause (ii) above, if the debt service coverage ratio exceeds 1.20x for two consecutive calendar quarters.
Initial Reserves.At loan closing, the borrower deposited $102,978 into a tax reserve account.
Ongoing Reserves.On a monthly basis, the borrower is required to deposit reserves of (i) 1/12 of the estimated annual real estate taxes, which currently equates to $5,598, into a tax reserve account and (ii) 4.0% of the prior month’s gross revenues into a FF&E reserve account. In addition, upon notice from the lender, theborrower will be required to deposit 1/12 of the annual insurance premiums into an insurance reserve account if (i) an event of default has occurred, (ii) an acceptable blanket insurance policy is no longer in place, (iii) the borrower fails to provide evidence of renewal of the blanket insurance policy or (iv) the borrower fails to provide evidence that the insurance premiums have been paid.
Property Release. None.
Current Mezzanine or Subordinate Indebtedness. None.
Future Mezzanine or Subordinate Indebtedness Permitted. None.
B-70 |
729 Southwest 15th Avenue Portland, OR 97205 | Collateral Asset Summary – Loan No. 8 Hotel deLuxe | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $32,419,793 68.7% 1.85x 12.8% |
B-71 |
2475, 2485 & 2495 Village View Drive Henderson, NV 89074 | Collateral Asset Summary – Loan No. 9 Green Valley Corporate Center | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $27,000,000 12.4% |
B-72 |
2475, 2485 & 2495 Village View Drive Henderson, NV 89074 | Collateral Asset Summary – Loan No. 9 Green Valley Corporate Center | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $27,000,000 12.4% |
Mortgage Loan Information | |
Loan Seller: | BNYM |
Loan Purpose: | Refinance |
Sponsor: | Brian Greenspun; Danny Greenspun; Susan Fine, Jane Gale |
Borrower: | GVR Back Office 123, LLC |
Original Balance: | $27,000,000 |
Cut-off Date Balance: | $27,000,000 |
% by Initial UPB: | 2.9% |
Interest Rate: | 4.5900% |
Payment Date: | 6th of each month |
First Payment Date: | September 6, 2015 |
Maturity Date: | August 6, 2025 |
Amortization: | Interest only for first 24 months; 360 months thereafter |
Additional Debt: | None |
Call Protection: | L(26), D(90), O(4) |
Lockbox / Cash Management: | Hard / In Place |
Reserves | ||
Initial | Monthly | |
Taxes: | $11,771 | $12,515 |
Insurance: | $0 | Springing |
Replacement: | $3,000 | $3,393 |
TI/LC: | $1,652,360 | $15,626 |
Financial Information | |
Cut-off Date Balance / Sq. Ft.: | $166 |
Balloon Balance / Sq. Ft.: | $142 |
Cut-off Date LTV: | 63.9% |
Balloon LTV: | 54.7% |
Underwritten NOI DSCR(1): | 2.02x |
Underwritten NCF DSCR(1): | 1.96x |
Underwritten NOI Debt Yield: | 12.4% |
Underwritten NCF Debt Yield: | 12.0% |
Underwritten NOI Debt Yield at Balloon: | 14.5% |
Underwritten NCF Debt Yield at Balloon: | 14.1% |
Property Information | ||
Single Asset / Portfolio: | Single Asset | |
Property Type: | Suburban Office | |
Collateral: | Fee Simple | |
Location: | Henderson, NV | |
Year Built / Renovated: | 2004 / NAP | |
Total Sq. Ft.: | 163,052 | |
Property Management: | American Nevada Realty, LLC | |
Underwritten NOI: | $3,351,001 | |
Underwritten NCF: | $3,247,729 | |
Appraised Value: | $42,280,000 | |
Appraisal Date: | June 12, 2015 | |
Historical NOI | ||
Most Recent NOI: | $3,411,612 (T-12 May 31, 2015) | |
2014 NOI: | $3,423,618 (December 31, 2014) | |
2013 NOI: | $3,092,565 (December 31, 2013) | |
2012 NOI: | $3,583,269 (December 31, 2012) | |
Historical Occupancy | ||
Most Recent Occupancy: | 95.7% (July 21, 2015) | |
2014 Occupancy: | 91.6% (December 31, 2014) | |
2013 Occupancy: | 91.6% (December 31, 2013) | |
2012 Occupancy: | 85.9% (December 31, 2012) |
(1) | Based on amortizing debt service payments. Based on the current interest only payments, the Underwritten NOI DSCR and Underwritten NCF DSCR are 2.67x and 2.58x, respectively. |
B-73 |
2475, 2485 & 2495 Village View Drive Henderson, NV 89074 | Collateral Asset Summary – Loan No. 9 Green Valley Corporate Center | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $27,000,000 12.4% |
Tenant Summary | |||||||
Tenant | Ratings (Fitch/Moody’s/S&P) | Net Rentable Area (Sq. Ft.) |
% of Net Rentable Area | U/W Base Rent PSF | % of Total U/W Base Rent | Lease Expiration | |
IADT(1) | NR/NR/NR | 49,902 | 30.6% | $27.90 | 33.4% | 4/30/2016 | |
Cypress Capital, LLC | NR/NR/NR | 12,819 | 7.9% | $25.92 | 8.0% | 5/31/2018 | |
Amica Mutual Insurance Company | NR/NR/NR | 12,451 | 7.6% | $23.40 | 7.0% | 12/31/2023 | |
Toyota Financial Savings Bank | NR/NR/NR | 12,028 | 7.4% | $27.01 | 7.8% | 11/30/2015 | |
PAR Springer-Miller Systems(2) | NR/NR/NR | 12,000 | 7.4% | $26.28 | 7.6% | 7/31/2020 | |
CHM2 Hill, Inc | NR/NR/NR | 11,209 | 6.9% | $29.04 | 7.8% | 1/31/2016 | |
Equity Title | NR/NR/NR | 10,351 | 6.3% | $25.96 | 6.4% | 7/31/2020 | |
Total Major Tenants | 120,760 | 74.1% | $26.92 | 78.0% | |||
Remaining Tenants | 35,232 | 21.6% | $26.09 | 22.0 % | |||
Total Occupied Tenants | 155,992 | 95.7% | $26.73 | 100.0% | |||
Vacant | 7,060 | 4.3% | |||||
Total | 163,052 | 100% |
(1) | IADT has advised the sponsor that it will be vacating approximately 25,000 sq. ft. of their 49,602 sq. ft. space at the end of its lease on April 30, 2016 and has commenced discussions with the sponsor about a renewal lease for the balance of the square footage. |
(2) | Par Springer-Miller Systems is in a free rent period through October 31, 2015. |
Lease Rollover Schedule(1) | ||||||||
Year | # of Leases Expiring | Total Expiring Sq. Ft. | % of Total Sq. Ft. Expiring | Cumulative Sq. Ft. Expiring | Cumulative % of Sq. Ft. Expiring | Annual U/W PSF | % U/W Rolling | Cumulative % of U/W Base Rent |
MTM | 0 | 0 | 0.0% | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
2015 | 2 | 15,302 | 9.4% | 15,302 | 9.4% | $27.57 | 10.1% | 10.1% |
2016 | 7 | 88,547 | 54.3% | 103,849 | 63.7% | $27.46 | 58.3% | 68.4% |
2017 | 0 | 0 | 0.0% | 103,849 | 63.7% | $0.00 | 0.0% | 68.4% |
2018 | 2 | 17,341 | 10.6% | 121,190 | 74.3% | $25.42 | 10.6% | 79.0% |
2019 | 0 | 0 | 0.0% | 121,190 | 74.3% | $0.00 | 0.0% | 79.0% |
2020 | 2 | 22,351 | 13.7% | 143,541 | 88.0% | $26.13 | 14.0% | 93.0% |
2021 | 0 | 0 | 0.0% | 143,541 | 88.0% | $0.00 | 0.0% | 93.0% |
2022 | 0 | 0 | 0.0% | 143,541 | 88.0% | $0.00 | 0.0% | 93.0% |
2023 | 1 | 12,451 | 7.6% | 155,992 | 95.7% | $23.40 | 7.0% | 100.0% |
2024 | 0 | 0 | 0.0% | 155,992 | 95.7% | $0.00 | 0.0% | 100.0% |
2025 | 0 | 0 | 0.0% | 155,992 | 95.7% | $0.00 | 0.0% | 100.0% |
Thereafter | 0 | 0 | 0.0% | 155,992 | 95.7% | $0.00 | 0.0% | 100.0% |
Vacant | NAP | 7,060 | 4.3% | 163,052 | 100.0% | NAP | NAP | |
Total / Wtd. Avg. | 14 | 163,052 | 100.0% | $26.73 | 100.0% | |||
(1) | Certain tenants have lease termination options that may become exercisable prior to the originally stated expiration date of the tenant lease that are not considered in the lease rollover schedule. |
B-74 |
2475, 2485 & 2495 Village View Drive Henderson, NV 89074 | Collateral Asset Summary – Loan No. 9 Green Valley Corporate Center | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $27,000,000 12.4% |
The Loan. The Green Valley Corporate Center loan (the “GVCC Loan”) is a $27.0 million fixed rate loan secured by the borrower’s fee simple interest in a three-building, 163,052 sq. ft. suburban office building center at 2475, 2485 and 2495 Village View Drive in Henderson, Nevada (the “GVCC Property”). The GVCC Loan has a 10-year term and subsequent to a 24-month interest only period, amortizes on a 30-year schedule thereafter. The GVCC Loan accrues interest at a fixed rate equal to 4.5900% and has a cut-off date balance of $27.0 million. Proceeds of the GVCC Loan were used to retire existing debt of approximately $26.9 million, pay closing costs of approximately $0.3 million, and fund reserves of approximately $1.7 million. Based on the appraised value of $42.28 million as of June 12, 2015, the cut-off date LTV is 63.9%. The most recent prior financing of the GVCC Property was included in the GSMS 2006-GG8 securitization.
Sources and Uses | ||||||
Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
Mortgage Loan | $27,000,000 | 93.6% | Loan Payoff | $26,898,801 | 93.2% | |
Sponsor Equity | $1,855,731 | 6.4% | Reserves | $1,667,131 | 5.8% | |
Closing Costs | $289,798 | 1.0% | ||||
Total Sources | $28,855,731 | 100.0% | Total Uses | $28,855,731 | 100.0% |
The Borrower / Sponsor. The borrower, GVR Back Office 123, LLC, is a single purpose Nevada limited liability company structured to be bankruptcy-remote, with two independent directors in its organizational structure. The sponsors of the borrower areBrian Greenspun, Danny Greenspun, Susan Fine and Jane Gale and the non-recourse carveout guarantor is American Nevada Holdings, LLC (“ANH”), which is controlled by the sponsors.
ANH is the developer of Green Valley in Henderson, Nevada, which is an 7,100-acre community with over 75,000 residents. ANH also developed the communities of Green Valley Ranch and Seven Hills and is the managing partner in the community of Aliante. ANH has over 60 years of combined industry experience and has developed over 3.0 million sq. ft. of commercial properties, including office, retail, industrial, mixed-use and apartment properties.
The Property.The GVCC Property consists of three office buildings totaling 163,052 sq. ft. on a 12.75 acre site. All three buildings were built in 2004 by the sponsor as part of the 90-acre, master planned business park known as the Green Valley Corporate Center. Two of the buildings (2475 and 2495) are two stories and the third (2485) is three stories. Downtown Henderson is approximately six miles east of the GVCC Property while downtown Las Vegas is approximately seven miles north of the GVCC Property. The property is located off of Village View Drive which intersects Green Valley Parkway to the east, a major north/south thoroughfare that provides access to the I-215 beltway north of the GVCC Property. Village View Drive also intersects Pase Verde Parkway to the south, which is a major east/west thoroughfare that runs parallel to the 215 Freeway to the north. I-215 is a 50.5 mile beltway route circling three-quarters of the Las Vegas Valley. The Green Valley Corporate Center is surrounded by single-family residential properties in addition to several other amenities. Adjacent to the business park is a large lifestyle center with national retailers and restaurants such as Pottery Barn, Loft, P.F. Chang’s and Whole Foods. Another neighborhood power retail center called the “Beltway Marketplace” is 1.5 miles west of the property. The Legacy Golf Club, a public golf course, is two miles north of the property. The University of Nevada, Las Vegas (“UNLV”) is approximately eight miles northwest of the property.
As of July 21, 2015, the GVCC Property was 95.7% occupied by 14 tenants representing the healthcare, financial, real estate, and education sectors. The three largest tenants at the GVCC Property occupy a total of 46.1% of the total NRA and account for 48.3% of underwritten base rent. The largest tenant, International Academy of Design and Technology (“IADT”), occupies 49,902 sq. ft., or 30.6% of total NRA, and accounts for 33.4% of underwritten base rent. IADT has advised the sponsor that it will be vacating approximately 25,000 sq. ft. of their 49,602 sq. ft. space at the end of its lease on April 30, 2016 and has commenced discussions with the sponsor about a renewal lease for the balance of the square footage. The second largest tenant, Cypress Capital, LLC, occupies 12,819 sq. ft. or 7.9% of total NRA, and accounts for 8.0% of underwritten base rent. The third largest tenant, Amica Mutual Insurance Company, occupies 12,451 sq. ft. or 7.6% of total NRA, and accounts for 7.0% of underwritten base rent.
Environmental Matters. The Phase I environmental report dated June 15, 2015 recommended no further action at the GVCC Property.
Recent Leasing Activity(1) | ||||||
Tenant | New / Renewal / Relocation / Expansion | Net Rentable Area | Lease/Renewal Start Date | Term (years) | Base Rent PSF | Annual Rent |
Equity Title | New | 10,351 | 5/15/2015 | 5.2 | $25.96 | $268,712 |
All Western Mortgage, INC. | New | 4,743 | 7/3/2013 | 3.4 | $22.87 | $108,453 |
Total | 15,094 | $377,165 |
(1) | Based on the rent roll dated July 21, 2015. |
B-75 |
2475, 2485 & 2495 Village View Drive Henderson, NV 89074 | Collateral Asset Summary – Loan No. 9 Green Valley Corporate Center | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $27,000,000 12.4% |
Major Tenants.
IADT, (49,902 sq. ft., 30.6% of NRA; 33.4% of U/W Base Rent)IADT is a for-profit college, which merged with Sanford-Brown in March 2014, resulting in locations in 16 U.S. cities, including Chicago, Henderson, Orlando, Seattle, San Antonio and Tampa. Sanford-Brown is accredited by the Accredited Council for Independent Colleges and Schools to award associates degrees and bachelor degrees. IADT has advised the Sponsor that they will be vacating approximately 25,000 sq. ft. of its 49,902 sq. ft. space at the end of its lease on April 30, 2016 and has commenced discussions with the Sponsor about a renewal lease for the balance of the square footage.
Cypress Capital, LLC (12,819 sq. ft., 7.9% of NRA; 8.0% of U/W Base Rent) Cypress Capital isan investment services and personal financing firm.
Amica Mutual Insurance Company, (12,451 sq. ft.; 7.6% of NRA; 7.0% of U/W Base Rent)Amica is the oldest mutual insurer of automobiles in the U.S., with over 100 years of experience. Amica also offers home, marine, personal umbrella liability and life insurance products.
The Market.The GVCC Property is located in the Southeast submarket within the Las Vegas market and considered a Class B property. As of Q1 2015, the Las Vegas market has 956 Class B office buildings, while the Southeast submarket contains 226. According to the appraisal, there are five projects totaling 591,151 sq. ft. currently under construction in the Las Vegas office market, however, only 149,129 sq. ft. of Class B space is located in the Central East and Southwest submarkets. There is currently no new construction for office buildings in the Southeast submarket. The Southeast submarket has an overall occupancy of 81.7% for Class B office buildings, up by 4% from 77.7% in Q1 2014. The asking rent for Class B properties in the Southeast increased by 4.0% from $1.75 PSF as of Q1 2014 to $1.82 as of Q1 2015. Office related employment represents 19.0% of the workforce. The Las Vegas unemployment rate as of February 2015 was 7.2%. Over the last 12 months, Las Vegas added about 27,650 new jobs or a 3.2% increase. The appraiser notes that with a high correlation between office market fundamentals and employment growth, the office market should continue to sustain positive growth in the near future as unemployment decreases.
Historical and Current Occupancy.
Historical and Current Occupancy(1) | ||||||||||
2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | Most Recent(2) |
NAP | 93.7% | 82.8% | 69.2% | 70.7% | 86.3% | 92.2% | 86.1% | 89.3% | 91.6% | 95.7% |
(1) | Source: Borrower. |
(2) | Based on the rent roll dated July 21, 2015. |
The appraisal analyzed a set of six comparable properties within the immediate competitive area of the GVCC Property. The chart below summarizes the competitive set as determined by the appraisal.
Competitive Set(1) | |||||
Building | Location | Year Built | Total GLA | Occupancy | Parking/1,000 SF |
GVCC Property | 2475, 2485 & 2495 Village View Drive, Henderson, NV | 2004 | 163,052(2) | 95.7%(2) | 5.2 |
Corporate Center I | 901 North Green Valley Parkway, Henderson, NV | 1995 | 46,737 | 91% | NAV |
Green Valley Corporate Center | 2290 Corporate Circle, Henderson, NV | 1998 | 54,192 | 100% | 7.0 |
Green Valley Corporate Center | 2230-2260 Corporate Circle, Henderson, NV | 1997 | 112,267 | 82% | NAV |
Green Valley Corporate Center | 2275 Corporate Circle, Henderson, NV | 2000 | 66,800 | 93% | NAV |
Green Valley Corporate Center 2285 | 2285 Corporate Circle, Henderson, NV | 2002 | 44,108 | 92% | NAV |
Commerce on The Green | 2200 Paseo Verde Parkway, Henderson, NV | 2004 | 59,818 | 78% | NAV |
(1) | Source: Appraisal. |
(2) | Based on the rent roll dated July 21, 2015. |
B-76 |
2475, 2485 & 2495 Village View Drive Henderson, NV 89074 | Collateral Asset Summary – Loan No. 9 Green Valley Corporate Center | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $27,000,000 12.4% |
Cash Flow Analysis.
Cash Flow Analysis | |||||
2013 | 2014 | T-12 5/31/2015 | U/W | U/W PSF | |
Base Rent | $3,766,248 | $4,031,445 | $4,013,649 | $4,132,906 | $25.35 |
Base Rent Steps | 0 | 0 | 0 | 36,518 | 0.22 |
Vacant Gross Up(1) | 0 | 0 | 0 | 186,384 | 1.14 |
Gross Potential Rent | $3,766,248 | $4,031,445 | $4,013,649 | $4,355,808 | $26.71 |
Total Recoveries | 14,228 | 60,984 | 49,467 | 49,467 | 0.30 |
Total Other Income | 43,332 | 101,875 | 102,952 | 50,000 | 0.31 |
Less: Vacancy | 0 | 0 | 0 | (353,784) | (2.17) |
Effective Gross Income | $3,823,808 | $4,194,304 | $4,166,068 | $4,101,491 | $25.15 |
Total Operating Expenses | 731,243 | 770,686 | 754,456 | 750,489 | 4.60 |
Net Operating Income | $3,092,565 | $3,423,618 | $3,411,612 | $3,351,001 | $20.55 |
TI/LC | 0 | 0 | 0 | 187,510 | 1.15 |
Capital Expenditures | 0 | 0 | 0 | 40,763 | 0.25 |
Amortizing TI | 0 | 0 | 0 | (125,000) | (0.77) |
Net Cash Flow | $3,092,565 | $3,423,618 | $3,411,612 | $3,247,729 | $19.92 |
(1) | UW Vacancy Gross Up includes IADT at its current rent. |
Property Management. The GVCC Property is managed by American Nevada Realty, LLC, an affiliate of the borrower.
Lockbox / Cash Management. The GVCC Loan is structured with a hard lockbox and in place cash management. The borrower is required to send direction letters to all tenants instructing them to deposit all rents and other payments into the lockbox account controlled by the lender. All funds are swept daily into a lender-controlled cash management account, where the funds are to be disbursed in accordance with the loan documents. In addition, during a Cash Trap Period an excess cash flow sweep will be in effect and all excess cash will be deposited into a lender-controlled account, to be held as additional collateral for the GVCC Loan.
A “Cash Trap Period” will commence upon (i) the occurrence of an event of default, (ii) the debt service coverage ratio falling below 1.20x on the last day of any calendar quarter or (iii) the occurrence of a Tenant Cash Trap Event (as defined below). A Cash Trap Period will cease to exist (a) with respect to clause (i), when such event of default has been cured and no other event of default exists, (b) with respect to clause (ii), when the debt service coverage ratio exceeds 1.25x for two consecutive quarters and (c) with respect to clause (iii), when either the Tenant Cash Trap Event has been cured or an amount of excess cash flow equal to the expenses incurred by the borrower in excess of the disbursement cap of $25.00 PSF (the “Tenant Disbursement Cap”) has been deposited with the lender.
A “Tenant Cash Trap Event” will occur when the expenses incurred by the borrower with respect to the re-tenanting of the IADT space exceed the Tenant Disbursement Cap, and such expenses above the Tenant Disbursement Cap remain unpaid.
Initial Reserves. At loan closing, the borrower deposited (i) $11,771 into a tax reserve account, (ii) $3,000 into a replacement reserve account and (iii) $1,652,360 into a TI/LC reserve account, of which $1,250,000 was reserved for the retenanting of the IADT space and $402,360 was reserved for tenant work allowances.
Ongoing Reserves. On a monthly basis, the borrower is required to deposit reserves of (i) 1/12 of the estimated annual real estate taxes, which currently equates to $12,515, into a tax reserve account, (ii) $3,393 into a replacement reserve account and (iii) $15,626 into a TI/LC reserve account. In addition, upon notice from the lender, the borrower will be required to deposit 1/12 of the annual insurance premiums into an insurance reserve account if (i) an event of default has occurred, (ii) an acceptable blanket insurance policy is no longer in place, (iii) the borrower fails to provide evidence of renewal of insurance or (iv) the borrower fails to provide evidence that the insurance premiums have been paid.
Current Mezzanine or Subordinate Indebtedness. None.
Future Mezzanine or Subordinate Indebtedness Permitted. None.
B-77 |
2475, 2485 & 2495 Village View Drive Henderson, NV 89074 | Collateral Asset Summary – Loan No. 9 Green Valley Corporate Center | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $27,000,000 12.4% |
B-78 |
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B-79 |
7600, 7700, 7715 & 7745 Chevy Austin, TX 78752 | Collateral Asset Summary – Loan No. 10 Chase Park | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $26,600,000 69.3% 1.54x 10.5% |
B-80 |
7600, 7700, 7715 & 7745 Chevy Austin, TX 78752 | Collateral Asset Summary – Loan No. 10 Chase Park | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $26,600,000 69.3% 1.54x 10.5% |
Mortgage Loan Information | |
Loan Seller: | GACC |
Loan Purpose: | Refinance |
Sponsor: | Benjamin Nazarian; Neil Kadisha |
Borrower: | Omninet Chase Park, LLC |
Original Balance: | $26,600,000 |
Cut-off Date Balance: | $26,600,000 |
% by Initial UPB: | 2.9% |
Interest Rate: | 4.3200% |
Payment Date: | 6thof each month |
First Payment Date: | October 6, 2015 |
Maturity Date: | September 6, 2025 |
Amortization: | Interest only for first 60 months; 360 months thereafter |
Additional Debt: | None |
Call Protection: | L(25), D(91), O(4) |
Lockbox / Cash Management: | Hard / Springing |
Reserves(1) | ||
Initial | Monthly | |
Taxes: | $375,850 | $46,981 |
Insurance: | $0 | Springing |
Replacement: | $0 | $4,566 |
TI/LC: | $1,433,086 | $25,137 |
Lease Sweep: | $0 | Springing |
Required Repairs: | $9,775 | NAP |
Free Rent: | $67,479 | $0 |
Financial Information | ||
Cut-off Date Balance / Sq. Ft.: | $92 | |
Balloon Balance / Sq. Ft.: | $84 | |
Cut-off Date LTV(2): | 69.3% | |
Balloon LTV(2): | 63.2% | |
Underwritten NOI DSCR(3): | 1.77x | |
Underwritten NCF DSCR(3): | 1.54x | |
Underwritten NOI Debt Yield: | 10.5% | |
Underwritten NCF Debt Yield: | 9.1% | |
Underwritten NOI Debt Yield at Balloon: | 11.5% | |
Underwritten NCF Debt Yield at Balloon: | 10.0% |
Property Information | |
Single Asset / Portfolio: | Single Asset |
Property Type: | Suburban Office |
Collateral: | Fee Simple |
Location: | Austin, TX |
Year Built / Renovated: | 1969-1975 / 2006-2015 |
Total Sq. Ft.: | 288,382 |
Property Management: | Omninet Property Management, Inc. |
Underwritten NOI: | $2,799,028 |
Underwritten NCF: | $2,431,423 |
“As-is” Appraised Value: | $38,400,000 |
“As-is” Appraisal Date: | May 29, 2015 |
“As Stabilized” Appraised Value(2): | $41,200,000 |
“As Stabilized” Appraisal Date: | May 29, 2015 |
Historical NOI(4) | |
Most Recent NOI: | $2,439,268 (T-12 March 31, 2015) |
2014 NOI: | $2,245,338 (December 31, 2014) |
2013 NOI: | $1,717,397 (December 31, 2013) |
2012 NOI: | NAV |
Historical Occupancy | |
Most Recent Occupancy(5): | 87.0% (August 20, 2015) |
2014 Occupancy: | 72.7% (December 31, 2014) |
2013 Occupancy: | 71.9% (December 31, 2013) |
2012 Occupancy: | 64.4% (December 31, 2012) |
(1) | See “Initial Reserves” and “Ongoing Reserves” herein. |
(2) | The “As Stabilized” Appraised Value assumes that the property is at stabilized occupancy of 90.0% as of the appraisal date. Based on the “As Stabilized” appraised value of $41,200,000, the Cut-off Date LTV and Balloon LTV are 64.6% and 58.9%, respectively. |
(3) | Based on amortizing debt service payments. Based on the current interest only payments, the Underwritten NOI DSCR and Underwritten NCF DSCR are 2.40x and 2.09x, respectively. |
(4) | The sponsors acquired the mortgaged property in April 2013; as such, Historical NOI prior to that is not available. |
(5) | Most Recent Occupancy includes the executed expansion space lease of 8,600 sq. ft. effective November 1, 2015 (3.0% of NRA) for Seton, the largest tenant, as well as the 29,859 sq. ft. of space (10.4% of NRA) for Austin Stone Church (which tenant is not yet in occupancy). Austin Stone Church is expected to take occupancy of 28,614 sq. ft. of its space and begin paying rent in November 2015 and the remaining 1,245 sq. ft. in October 2016. |
B-81 |
7600, 7700, 7715 & 7745 Chevy Austin, TX 78752 | Collateral Asset Summary – Loan No. 10 Chase Park | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $26,600,000 69.3% 1.54x 10.5% |
Tenant Summary | ||||||||||||||||
Major Tenants | Ratings (Fitch/Moody’s/S&P)(1) | Net Rentable Area (Sq. Ft.) | % of Net Rentable Area |
| U/W Base Rent PSF | % of Total U/W Base Rent | Lease Expiration | |||||||||
Seton(2) | NR/NR/NR | 68,105 | 23.6% | $20.75 | 27.2% | 3/31/2023 | ||||||||||
Austin Stone Church(3) | NR/NR/NR | 29,859 | 10.4% | $19.17 | 11.0% | 10/30/2020 | ||||||||||
Jacobs Engineering | NR/NR/NR | 27,775 | 9.6% | $20.25 | 10.8% | 3/31/2019 | ||||||||||
Northrop Grumman | BBB+/Baa2/BBB+ | 18,945 | 6.6% | $22.50 | 8.2% | 11/30/2016 | ||||||||||
Total Major Tenants | 144,684 | 50.2% | $20.55 | 57.3% | ||||||||||||
Non-Major Tenants | 106,159 | 36.8% | $20.88 | 42.7% | ||||||||||||
Total Occupied Collateral | 250,843 | 87.0% | $20.69 | 100.0% | ||||||||||||
Vacant | 37,539 | 13.0% | ||||||||||||||
Total | 288,382 | 100.0% | ||||||||||||||
(1) | Certain ratings are those of the parent company whether or not the parent company guarantees the lease. |
(2) | Seton occupies 4,050 sq. ft. of space that expires on March 31, 2016. Seton’s Net Rentable Area (Sq. Ft.) also includes 8,600 sq. ft. of expansion space that is not yet in occupancy. It is expected that Seton will take occupancy of this expansion space and begin paying rent on the space in November 1, 2015. |
(3) | Austin Stone Church has signed a lease for 28,614 sq. ft. of space at the mortgaged property but has not yet taken occupancy or begun paying rent. It is expected that Austin Stone Church will take occupancy of this space and begin paying rent on November 1, 2015. Austin Stone Church’s Net Rentable Area (Sq. Ft.) includes an additional 1,245 sq. ft. of space which it is expected to take occupancy of on October 1, 2016 and which expires on September 30, 2020. |
Lease Rollover Schedule(1) | ||||||||||||||||||||||||
Year | # of Leases Expiring | Total Expiring Sq. Ft. | % of Total Sq. Ft. Expiring | Cumulative Sq. Ft. Expiring | Cumulative % of Sq. Ft. Expiring | Annual U/W Base Rent PSF | % U/W | Cumulative % of U/W Base Rent | ||||||||||||||||
MTM | 0 | 0 | 0.0 | % | 0 | 0.0 | % | $0.00 | 0.0 | % | 0.0 | % | ||||||||||||
2015 | 1 | 5,378 | 1.9 | % | 5,378 | 1.9 | % | $25.55 | 2.6 | % | 2.6 | % | ||||||||||||
2016 | 5 | 44,772 | 15.5 | % | 50,150 | 17.4 | % | $20.85 | 18.0 | % | 20.6 | % | ||||||||||||
2017 | 0 | 0 | 0.0 | % | 50,150 | 17.4 | % | $0.00 | 0.0 | % | 20.6 | % | ||||||||||||
2018 | 2 | 8,863 | 3.1 | % | 59,013 | 20.5 | % | $22.65 | 3.9 | % | 24.5 | % | ||||||||||||
2019 | 6 | 68,787 | 23.9 | % | 127,800 | 44.3 | % | $20.95 | 27.8 | % | 52.3 | % | ||||||||||||
2020 | 6 | 53,819 | 18.7 | % | 181,619 | 63.0 | % | $20.23 | 21.0 | % | 73.2 | % | ||||||||||||
2021 | 0 | 0 | 0.0 | % | 181,619 | 63.0 | % | $0.00 | 0.0 | % | 73.2 | % | ||||||||||||
2022 | 0 | 0 | 0.0 | % | 181,619 | 63.0 | % | $0.00 | 0.0 | % | 73.2 | % | ||||||||||||
2023 | 6 | 67,296 | 23.3 | % | 248,915 | 86.3 | % | $20.64 | 26.8 | % | 100.0 | % | ||||||||||||
2024 | 0 | 0 | 0.0 | % | 248,915 | 86.3 | % | $0.00 | 0.0 | % | 100.0 | % | ||||||||||||
2025 | 0 | 0 | 0.0 | % | 248,915 | 86.3 | % | $0.00 | 0.0 | % | 100.0 | % | ||||||||||||
Thereafter | 1 | 1,928 | 0.7 | % | 250,843 | 87.0 | % | $0.00 | 0.0 | % | 100.0 | % | ||||||||||||
Vacant | NAP | 37,539 | 13.0 | % | 288,382 | 100.0 | % | NAP | NAP | |||||||||||||||
Total / Wtd. Avg. | 27 | 288,382 | 100.00 | % | $20.69 | 100.0 | % | |||||||||||||||||
(1) | Certain tenants have lease termination options that may become exercisable prior to the originally stated expiration date of the tenant lease that are not considered in the lease rollover schedule. |
B-82 |
7600, 7700, 7715 & 7745 Chevy Austin, TX 78752 | Collateral Asset Summary – Loan No. 10 Chase Park | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $26,600,000 69.3% 1.54x 10.5% |
The Loan.The Chase Park loan (the “Chase Park Loan”) is a $26.6 million fixed rate loan secured by the borrower’s fee simple interest in a 288,382 sq. ft. Class B/C, suburban office complex comprised of five, two- to five-story buildings located at 7600, 7700, 7715 and 7745 Chevy Chase Drive and 313 Anderson Lane in Austin, Texas (the “Chase Park Property”). The Chase Park Loan has a 10-year term and is interest only for the first 60 months of the term and amortizes on a 30-year schedule thereafter. The Chase Park Loan accrues interest at a fixed rate equal to 4.3200% per annum. Loan proceeds were used to refinance the Chase Park Property for approximately $18.8 million, fund upfront reserves of approximately $1.9 million, pay closing costs of approximately $0.2 million and return approximately $5.7 million of equity to the sponsor. Based on the “As-is” Appraised Value of $38.4 million as of May 29, 2015, the Cut-off Date LTV ratio is 69.3%. Based on the “As Stabilized” Appraised Value of $41.2 million, which assumes that the Chase Park Property is at stabilized occupancy of 90.0% as of the appraisal date, the Cut-off Date LTV is 64.6%. The most recent prior financing of the Chase Park Property was not included in a securitization.
Sources and Uses | ||||||
Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
Mortgage Loan | $26,600,000 | 100.0% | Loan Payoff | $18,774,562 | 70.6% | |
Reserves | $1,886,190 | 7.1% | ||||
Closing Costs | $234,804 | 0.9% | ||||
Return of Equity | $5,704,444 | 21.4% | ||||
Total Sources | $26,600,000 | 100.0% | Total Uses | $26,600,000 | 100.0% |
The Borrower / Sponsor.The borrower is Omninet Chase Park, LLC, a single purpose Delaware limited liability company structured to be bankruptcy-remote, with one independent director in its organizational structure. The sponsors of the borrower and the non-recourse carve-out guarantors are Benjamin Nazarian and Neil Kadisha on a joint and several basis. Benjamin Nazarin and Neil Kadisha are both managing partners of Omninet Capital, LLC. For additional information regarding Neil Kadisha, see “Risk Factors—Risks Related to the Mortgage Loans—Prior Bankruptcies, Defaults or Other Proceedings May Be Relevant to Future Performance” in the Free Writing Prospectus.
The sponsors, through their controlling stake in Omninet Capital, LLC have been investing in commercial real estate and venture capital for over 20 years. Omninet Capital, LLC is a private equity firm that specializes in leveraged buyouts and growth equity financing in high growth middle markets. Omninet Capital, LLC pursues direct investment in commercial real estate debt and income producing properties. Omninet’s commercial real estate portfolio includes nearly 4 million sq. ft. across six states.
The Property.The Chase Park Property is a 288,382 sq. ft. Class B/C, suburban office complex comprised of five, two- to five-story buildings located in Austin, Texas. The buildings were constructed between 1969 and 1975 and renovated in 2006. The Chase Park Property is located at the intersection of two of the Austin metro area’s major highway arterials, Interstate 35 and US-183. As of August 20, 2015, the Chase Park Property was 87.0% leased to a diverse mix of 19 tenants including one investment grade tenant, Northrop Grumman. The Chase Park Property has 1,213 surface parking spaces, which equates to a parking ratio of 4.21 spaces per 1,000 sq. ft.
The sponsors acquired the Chase Park Property in April 2013 for $23.0 million ($79.76 PSF), at which time the property was 67.0% occupied. Since acquisition, according to the sponsors, they have invested approximately $1.8 million ($6.24 PSF) to update the lobby, renovate the restrooms, upgrade the elevator cab, update lighting and install a new electronic directory, which upgrades have contributed to the increased occupancy level. In the past 12 months five new leases have been signed at the Chase Park Property, accounting for 18.3% of NRA and 20.3% of base rent. Additionally, in February 2013, the largest tenant at the building, Seton, renewed their lease through 2023 and expanded their space at the Chase Park Property by 16,237 sq. ft and recently finalized a second expansion for an additional 8,600 sq. ft. at the Chase Park Property, bringing their total space up to 68,105 sq. ft. Only 4,050 sq. ft. of space occupied by Seton is set to expire in March 2016.
Environmental Matters.The Phase I environmental report dated June 4, 2015 recommended no further action at the Chase Park Property.
Major Tenants.
Seton (68,105 sq. ft., 23.6% of NRA, 27.2% of U/W Base Rent) Seton is a faith-based, non-profit health care provider that operates more than 100 clinical locations, including four teaching hospitals affiliated with The University of Texas. Seton moved into the Chase Park Property in January 2003, and has expanded from its initial space of 12,743 sq. ft. to its current size of 68,105 sq. ft., with the most recent expansion executed in August 2015 for 8,600 additional sq. ft. The expansion space lease will commence at the earlier of (i) tenant work completion or (ii) November 1, 2015. Seton does not have any extension options remaining and has no termination options.
B-83 |
7600, 7700, 7715 & 7745 Chevy Austin, TX 78752 | Collateral Asset Summary – Loan No. 10 Chase Park | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $26,600,000 69.3% 1.54x 10.5% |
Austin Stone Church(29,859 sq. ft., 10.4% of NRA, 11.0% of U/W Base Rent) Austin Stone Church is one of the largest Christian churches in the Austin area. It is expected that Austin Stone Church will take occupancy of 28,614 sq. ft. and 1,245 sq. ft. and commence rent payments in November 2015 and October 2016, respectively. According to the sponsor, this tenant intends to use its space as office and administration space for the church, which has four campuses in Austin and one in Round Rock, Texas. The Chase Park Loan was structured with approximately $1.4 million upfront reserve related to the outstanding TI/LC relating to the Austin Stone Church lease. Austin Stone Church’s 1,245 sq. ft. lease expires September 30, 2020, and the 28,614 sq. ft. lease expires October 30, 2020. Austin Stone Church has one five-year extension option and no termination options.
Jacobs Engineering(27,775 sq. ft., 9.6% of NRA, 10.8% of U/W Base Rent) Jacobs Engineering is an international technical professional services firm that provides a diverse range of technical, professional and construction services to industrial, commercial and government clients. Jacobs Engineering has been at the Chase Park Property since May of 2014. The current lease expires March 31,2019 but the tenant has the option to extend the term of the lease for (i) the entire premises, or (ii) only their space in building 2 or (iii) their space in building 5, in any case, for a period of the longer of (a) one year or (b) the remaining length of time on any client contract that Jacobs Engineering services from the property. Jacobs Engineering has the right to terminate its lease after May 31, 2017 provided that it has received notice from the Texas Department of Transportation of the loss or cancellation of no less than 51% of Jacobs Engineering’s funding for contracts with the Texas Department of Transportation. Subject to conditions set forth in the lease, Jacobs Engineering has a right of first refusal during the initial lease term to lease any available space on the 4th floor of building 2 and the 3rd floor of building 5.
The Market.The Chase Park Property is located in Austin, Texas, approximately six miles northeast of the central business district and approximately five miles northeast of The University of Texas. The property is one block southwest of Interstate-35 and US-183, which provides access to the entire Austin metro area. The Austin metro area is home to a diverse base of businesses in the government, trade, transportation and utilities and professional services. The 2015 population and median household income within a three-mile radius of the Chase Park Property was 147,804 and $41,471. As of Q2 2015, the Central Class B and Class C submarkets consisted of approximately 2.8 million sq. ft. and 2.5 million sq. ft., respectively. According to an industry report, as of Q2 2015, vacancy within the Central Class B and Class C submarkets was 9.8% and 3.1%, respectively, with quoted rents of $22.98 PSF and $20.67 PSF, respectively. The appraiser projected a stabilized vacancy of 10.0% and a rent of $21.50 PSF for the Chase Park Property. As of August 20, 2015, vacancy at the Chase Park Property was 13.0% and the weighted average underwritten rent was $20.69 PSF.
Summary of Comparable Office Rentals(1) | |||||||||||
Name | Chase Park Property | La Costa Centre | Chase Northcross | One La Costa | Centennial Towers | Greystone II | |||||
Distance from subject (miles) | NAP | 2.5 | 2.5 | 2.0 | 1.7 | 1.7 | |||||
Building Sq. Ft. | 288,382(2) | 80,821 | 82,909 | 61,654 | 156,293 | 47,318 | |||||
Year Built/Renovated | 1969-1975/2006 | 1982 | 1972-84 | 1979 | 1986 | 1980 | |||||
Occupancy | 87.0%(2) | 85.1% | 89.7% | 96.5% | 91.5% | 73.8% | |||||
Rent PSF | $20.69(2) | $19.50 | $24.00 | $19.00 | $22.00 | $23.50 | |||||
Expense Basis | Gross | Gross | Gross | Gross | Modified Gross | Full Service |
(1) | Source: Appraisal. |
(2) | Per underwritten rent roll. |
B-84 |
7600, 7700, 7715 & 7745 Chevy Austin, TX 78752 | Collateral Asset Summary – Loan No. 10 Chase Park | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $26,600,000 69.3% 1.54x 10.5% |
Cash Flow Analysis.
Cash Flow Analysis | |||||||||
2013 | 2014 | T-12 3/31/2015 | U/W | U/W PSF | |||||
Base Rent(1)(2) | $3,067,112 | $3,756,670 | $3,992,162 | $5,303,941 | $18.39 | ||||
Value of Vacant Space | 0 | 0 | 0 | 790,929 | 2.74 | ||||
Gross Potential Rent | $3,067,112 | $3,756,670 | $3,992,162 | $6,094,871 | $21.13 | ||||
Total Recoveries | 705,916 | 754,652 | 709,020 | 33,454 | 0.12 | ||||
Total Other Income | 0 | 4,603 | 4,604 | 3,000 | 0.01 | ||||
Less: Vacancy(3) | 0 | 0 | 0 | (790,929) | (2.74) | ||||
Effective Gross Income | $3,773,028 | $4,515,925 | $4,705,786 | $5,340,395 | $18.52 | ||||
Total Operating Expenses | 2,055,631 | 2,270,587 | 2,266,517 | 2,541,367 | 8.81 | ||||
Net Operating Income | $1,717,397 | $2,245,338 | $2,439,268 | $2,799,028 | $9.71 | ||||
TI/LC | 0 | 0 | 0 | 312,812 | 1.08 | ||||
Capital Expenditures | 0 | 0 | 0 | 54,793 | 0.19 | ||||
Net Cash Flow | $1,717,397 | $2,245,338 | $2,439,268 | $2,431,423 | $8.43 | ||||
(1) | U/W Base Rent includes 12 months ($113,268) in rent steps. |
(2) | The increase in base rent from T-12 3/31/2015 to U/W was due to increased occupancy at the Chase Park Property. |
(3) | U/W Vacancy represents 12.9% of gross income. The in-place occupancy as of August 20, 2015 is 87.0%, inclusive of the expansion space lease (3.0% of NRA) effective November 1, 2015 for Seton, the largest tenant, as well as 29,859 sq. ft. (10.4% of NRA) for Austin Stone Church, which is expected to take occupancy of 28,614 sq. ft. of its space on November 1, 2015 and the remaining 1,245 sq. ft. on October 1, 2016. |
Property Management. The Chase Park Property is managed by Omninet Property Management, Inc., a borrower affiliate.
Lockbox / Cash Management.The Chase Park Loan is structured with a hard lockbox and a springing cash management. At loan closing, the borrower was required to deliver tenant direction letters requiring all rents, revenues and receipts from the Chase Park Property to be deposited directly by the tenants into a clearing account established by the borrower. Amounts on deposit in the clearing account are required to be transferred daily from the clearing account into borrower’s operating account. During a Trigger Period (as defined below), sums on deposit in the clearing account are required to be swept daily into a lender controlled deposit account.
A “Trigger Period” will commence (i) upon an event of default, (ii) if the DSCR falls below 1.20x (a “Low Debt Service Period”) until such time that the DSCR is at least 1.20x for two consecutive calendar quarters or (iii) the commencement of a Lease Sweep Period (as defined below). The borrower may prevent a Trigger Period commencing due to a Low Debt Service Period by depositing cash or posting a letter of credit in an amount equal to $315,000, which amount will be increased by (i) $315,000 if the Low Debt Service Period continues for two calculation dates after the initial commencement, (ii) an additional $315,000 if the Low Debt Service Period is continuing for eight calculation dates after the initial commencement, and (iii) $315,000 for each succeeding four calculation dates thereafter if the Low Debt Service Period is continuing.
If the debt yield is less than 8.0%, a “Lease Sweep Period” will commence on the first monthly payment date following (i) 15 months prior to the expiration of a Lease Sweep Lease (as defined below), (ii) the tenant under the Lease Sweep Lease failing to renew its lease, defaulting under its lease or becoming subject to insolvency proceedings or (iii) the giving of notice from any tenant under a Lease Sweep Lease exercising its right to terminate its lease.
A “Lease Sweep Lease” includes (i) the Seton lease or (ii) any replacement lease (or leases) with a tenant that leases the full or substantially all of the 68,105 sq. ft. of the applicable lease space.
Initial Reserves.At loan closing, the borrower deposited (i) $375,850 into a tax reserve account, (ii) $1,433,086 into a TI/LC reserve account, (iii) $9,775 into a required repairs reserve account, which represents 115% of the engineer’s recommendation and (iv) $67,479 into a free rent account. The initial TI/LC deposit is comprised of (i) Austin Stone Church outstanding tenant improvements of $1,316,244, (ii) Austin Stone Church outstanding leasing commissions of $108,238 and (iii) Patricio Garza Izaguirre TI/LC of $8,604. The free rent deposit is comprised of $47,690 for the free rent for month of September 2015 for Austin Stone Church, as well as an additional $19,789 for two tenants that account for 1.7% of total NRA for the months of September 2015 through January 2016.
Ongoing Reserves.On a monthly basis, the borrower is required to deposit reserves of (i) 1/12 of the estimated annual real estate taxes, which currently equates to $46,981, into a tax reserve account, (ii) $4,566 into a replacement reserve account and (iii) $25,137 into a TI/LC reserve account, subject to a TI/LC reserve cap equal to $1.4 million, which does not include the initial deposit of $1,433,086. Additionally, during a Lease Sweep Period, all excess cash will be deposited into a lease sweep account, and if an acceptable blanket insurance policy is no longer in place the borrower is required to deposit 1/12 of the estimated annual insurance premiums into an insurance reserve account.
B-85 |
7600, 7700, 7715 & 7745 Chevy Austin, TX 78752 | Collateral Asset Summary – Loan No. 10 Chase Park | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $26,600,000 69.3% 1.54x 10.5% |
Current Mezzanine or Subordinate Indebtedness. None.
Future Mezzanine or Subordinate Indebtedness Permitted. None.
B-86 |
7600, 7700, 7715 & 7745 Chevy Austin, TX 78752 | Collateral Asset Summary – Loan No. 10 Chase Park | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $26,600,000 69.3% 1.54x 10.5% |
B-87 |
7600, 7700, 7715 & 7745 Chevy Austin, TX 78752 | Collateral Asset Summary – Loan No. 10 Chase Park | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $26,600,000 69.3% 1.54x 10.5% |
B-88 |
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B-89 |
900 Terminal Place Richmond, VA 23220 | Collateral Asset Summary – Loan No. 11 Cookie Factory Lofts | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $23,000,000 76.2% 1.28x 8.2% |
Mortgage Loan Information | |
Loan Seller: | BNYM |
Loan Purpose: | Refinance |
Sponsor: | Kevin T. McFadden; Robert W. Hargett; Daniel L. Hargett |
Borrower: | Interbake Partners, LLC |
Original Balance: | $23,000,000 |
Cut-off Date Balance: | $23,000,000 |
% by Initial UPB: | 2.5% |
Interest Rate: | 4.7600% |
Payment Date: | 6thof each month |
First Payment Date: | November 6, 2015 |
Maturity Date: | October 6, 2025 |
Amortization: | Interest only for first 36 months; 360 months thereafter |
Additional Debt: | None |
Call Protection: | L(24), D(92), O(4) |
Lockbox / Cash Management(1): | Springing Soft / Springing |
Reserves | ||
Initial | Monthly | |
Taxes: | $42,720 | $5,340 |
Insurance(2): | $22,428 | Springing |
Replacement: | $0 | $2,967 |
Debt Service: | $360,353 | $0 |
Financial Information | ||
Cut-off Date Balance / Unit: | $129,213 | |
Balloon Balance / Unit: | $113,784 | |
Cut-off Date LTV: | 76.2% | |
Balloon LTV: | 67.1% | |
Underwritten NOI DSCR(3): | 1.30x | |
Underwritten NCF DSCR(3): | 1.28x | |
Underwritten NOI Debt Yield: | 8.2% | |
Underwritten NCF Debt Yield: | 8.0% |
Property Management | |
Single Asset / Portfolio: | Single Asset |
Property Type: | Mid Rise Multifamily |
Collateral: | Fee Simple |
Location: | Richmond, VA |
Year Built / Renovated: | 1927 / 2014 |
Total Units: | 178 |
Property Management: | 1414 W. Marshall St. LLC d/b/a Pondok Management |
Underwritten NOI: | $1,877,808 |
Underwritten NCF: | $1,842,208 |
Appraised Value: | $30,200,000 |
Appraisal Date: | August 11, 2015 |
Historical NOI(4) | |
Most Recent NOI: | $1,156,756 (T-3 July 31, 2015 Ann.) |
2014 NOI: | NAV |
2013 NOI: | NAV |
2012 NOI: | NAV |
Historical Occupancy(4) | |
Most Recent Occupancy: | 93.3% (September 14, 2015) |
2014 Occupancy: | NAV |
2013 Occupancy: | NAV |
2012 Occupancy: | NAV |
(1) | A soft lockbox and in place cash management will be triggered (i) upon an event of default or (ii) if the DSCR falls below 1.10x (based on amortizing debt service payments) for two consecutive calendar quarters. |
(2) | Upon notice from the lender, the borrower will be required to deposit 1/12 of the annual insurance premiums into an insurance reserve account if (i) an event of default has occurred, (ii) an acceptable blanket insurance policy is no longer in place, (iii) the borrower fails to provide evidence of renewal of the blanket insurance policy or (iv) the borrower fails to provide evidence that the insurance premiums have been paid. |
(3) | Based on amortizing debt service payments. Based on the current interest only payments, the Underwritten NOI DSCR and Underwritten NCF DSCR are 1.69x and 1.66x, respectively. |
(4) | The redevelopment of the Cookie Factory Lofts property was completed in late 2014. As such, Historical NOI and Historical Occupancy are not available. |
TRANSACTION HIGHLIGHTS |
■ | Property.The Cookie Factory Lofts property is comprised of a six-story residential building and a single-story building containing a leasing office on approximately 4.14 acres. The property also has 245 parking spaces on-site, 101 of which are in an underground garage. The property was formerly a bakery factory that was converted into multifamily apartments in 2014. Amenities include a rooftop deck with grilling areas, a fitness center, a business center, a resident lounge, a communal kitchen and dining area and an outdoor pool. Each unit contains new appliances, including a washer and dryer. The property is a historic structure listed on the National Register of Historic Places. |
■ | Location.The property is located at 900 Terminal Place in Richmond, Virginia. Richmond is the state capital of Virginia. The property is located in the Scott’s Addition multifamily submarket. The property is adjacent to the Washington Redskins training facility and the Science Museum of Richmond. |
■ | Historic Tax Credits. As a result of the 2014 gut renovation and the building’s status as a historic structure, the property qualified for state and federal historic rehabilitation tax credits. The borrower leased the entirety of the property under a master lease to a master tenant in order to pass the federal tax credits through to the 99% owner of the master tenant, The Sherwin-Williams Company. The master lease expires on September 30, 2039 and may not be terminated nor accelerated until December 31, 2019. The current annual base rent under the master lease is $1,764,962.The federal historic tax credits have an estimated value of $5.332 million. The Virginia historic tax credits were allocated by the borrower to The Virginia Historic Tax Credit Fund L.P., which acquired an approximately 4% equity interest in the borrower in exchange for payments estimated at $6.635 million. |
■ | Sponsor.The sponsors are Kevin T. McFadden, Robert W. Hargett, and Daniel L. Hargett, who are principals in Rebkee Group, a real estate company specializing in the development, ownership and management of multifamily and retail properties throughout the Southeastern United States. |
B-90 |
949 Crowsnest Circle Orlando, FL 32825 | Collateral Asset Summary – Loan No. 12 Windrift Apartments | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $21,450,000 74.7% 1.31x 8.5% |
Mortgage Loan Information | |
Loan Seller: | GACC |
Loan Purpose: | Refinance |
Sponsor: | Shaul Kopelowitz |
Borrower: | WE Windrift LLC |
Original Balance: | $21,450,000 |
Cut-off Date Balance: | $21,450,000 |
% by Initial UPB: | 2.3% |
Interest Rate: | 4.6100% |
Payment Date: | 6thof each month |
First Payment Date: | October 6, 2015 |
Maturity Date: | September 6, 2025 |
Amortization: | Interest only for first 24 months; 360 months thereafter |
Additional Debt: | None |
Call Protection: | L(25), D(91), O(4) |
Lockbox / Cash Management(1): | Springing Soft / Springing |
Reserves | ||
Initial | Monthly | |
Taxes: | $263,475 | $23,952 |
Insurance: | $78,160 | $11,166 |
Replacement: | $0 | $7,416 |
Required Repairs(2): | $0 | Springing |
Financial Information | ||
Cut-off Date Balance / Unit: | $74,479 | |
Balloon Balance / Unit: | $63,794 | |
Cut-off Date LTV: | 74.7% | |
Balloon LTV: | 64.0% | |
Underwritten NOI DSCR(3): | 1.38x | |
Underwritten NCF DSCR(3): | 1.31x | |
Underwritten NOI Debt Yield: | 8.5% | |
Underwritten NCF Debt Yield: | 8.1% |
Property Information | |
Single Asset / Portfolio: | Single Asset |
Property Type: | Garden Multifamily |
Collateral: | Fee Simple |
Location: | Orlando, FL |
Year Built / Renovated: | 1987 / 2011 |
Total Units: | 288 |
Property Management: | Greystar RS FL, LLC |
Underwritten NOI: | $1,817,748 |
Underwritten NCF: | $1,728,756 |
Appraised Value: | $28,700,000 |
Appraised Date: | June 30, 2015 |
Historical NOI(4) | |
Most Recent NOI: | $1,741,247 (T-12 June 30, 2015) |
2014 NOI: | $1,727,556 (December 31, 2014) |
2013 NOI: | $1,306,956 (T-12 September 30, 2013) |
2012 NOI: | NAV |
Historical Occupancy(4) | |
Most Recent Occupancy: | 95.1% (August 10, 2015) |
2014 Occupancy: | 93.8% (December 31, 2014) |
2013 Occupancy: | NAV |
2012 Occupancy: | NAV |
(1) | A soft lockbox and cash management will be triggered (i) upon an event of default or (ii) if the DSCR falls below 1.15x until such time that the DSCR is at least 1.20x for two consecutive calendar quarters. |
(2) | If certain identified required repairs are not completed by November 29, 2015, the borrower is required to deposit 125% of the estimated cost of the then-remaining required repairs, estimated (as of the loan closing date) to be $46,000. |
(3) | Based on amortizing debt service payments. Based on the current interest only debt service payments, the Underwritten NOI DSCR and Underwritten NCF DSCR are 1.81x and 1.72x, respectively. |
(4) | The sponsor acquired the property in December 2013; as such, Historical NOI and Occupancy are not available prior to September 2013. |
TRANSACTION HIGHLIGHTS |
■ | Property.Windrift Apartments is a Class B multifamily development located in Orlando, Florida. The property was constructed in 1987 and renovated in 2011, and contains 288 units in 17, two-story garden style buildings. As of May 2015, according to the borrower, it invested approximately $1.2 million ($4,259/unit) in capital expenditures at the property. Amenities at Windrift Apartments include a swimming pool and hot tub, tennis courts, racquetball courts, a picnic area, a clubhouse and a fitness center. One and two bedroom units vary in size from 567-760 sq. ft. and 912-1,077 sq. ft., respectively and unit amenities include fully equipped kitchens, washer and dryer hookups, walk in closets, balconies and tenant storage space. The property contains 532 surface parking spaces, which equates to a parking ratio of 1.85 spaces per unit. |
■ | Location/Market.Windrift Apartments is located in Orange County, within the greater Orlando metropolitan statistical area. The property is located approximately six miles east of downtown Orlando, 15 miles north of the greater Orlando International Airport and is accessible via State Road 417, State Road 408 and State Road 50. According to a market research report, as of Q1 2015, the Orlando apartment market contains 129,805 rental units across 554 buildings. 15% of that total inventory is located within the property’s submarket. Overall vacancy as of Q1 2015 was 5.5% for the greater Orlando apartment market and 6.1% for the property’s submarket and the average quoted market rents were $974/month and $993/month, respectively. According to the appraiser, a projected 2,619 units will be added to the submarket over the next five years. |
■ | Sponsor.Shaul Kopelowitz, the sponsor of the borrower and the non-recourse careveout guarantor, has over 20 years of experience in real estate investment, development and management with 5,410 multifamily units owned across six states. |
B-91 |
5003A & 5000-5007 Victory Boulevard Yorktown, VA 23693 | Collateral Asset Summary – Loan No. 13 Village Square at Kiln Creek | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $20,400,000 68.9% 1.43x 9.4% |
Mortgage Loan Information | |
Loan Seller: | KeyBank |
Loan Purpose: | Refinance |
Sponsor: | C. Torrey Breeden; A. Kent Little |
Borrower: | Kiln Creek Shopping Center, L.L.C. |
Original Balance: | $20,400,000 |
Cut-off Date Balance: | $20,400,000 |
% by Initial UPB: | 2.2% |
Interest Rate: | 4.3400% |
Payment Date: | 1stof each month |
First Payment Date: | October 1, 2015 |
Maturity Date: | September 1, 2025 |
Amortization: | Interest only for first 12 months; 360 months thereafter |
Additional Debt: | None |
Call Protection: | L(25), D(91), O(4) |
Lockbox / Cash Management(1): | Soft / Springing |
Reserves | ||
Initial | Monthly | |
Taxes(2): | $23,511 | $5,878 |
Insurance(3): | $0 | Springing |
Replacement: | $4,450 | $4,450 |
TI/LC(4): | $500,000 | $13,796 |
Debt Service(5): | $0 | Springing |
Kmart BK(6): | $0 | Springing |
Financial Information | ||
Cut-off Date Balance / Sq. Ft.: | $76 | |
Balloon Balance / Sq. Ft.: | $63 | |
Cut-off Date LTV: | 68.9% | |
Balloon LTV: | 57.0% | |
Underwritten NOI DSCR(7): | 1.57x | |
Underwritten NCF DSCR(7): | 1.43x | |
Underwritten NOI Debt Yield: | 9.4% | |
Underwritten NCF Debt Yield: | 8.5% |
Property Information | |
Single Asset / Portfolio: | Single Asset |
Property Type: | Anchored Retail |
Collateral: | Fee Simple |
Location: | Yorktown, VA |
Year Built / Renovated: | 1993 / 2015 |
Total Sq. Ft.: | 267,021 |
Property Management: | The Breeden Company, Inc. |
Underwritten NOI: | $1,911,857 |
Underwritten NCF: | $1,743,543 |
Appraised Value: | $29,600,000 |
Appraisal Date: | July 10, 2015 |
Historical NOI | |
Most Recent NOI: | $1,987,468 (T-12 June 30, 2015) |
2014 NOI: | $2,015,085 (December 31, 2014) |
2013 NOI: | $2,069,360 (December 31, 2013) |
2012 NOI: | $2,107,683 (December 31, 2012) |
Historical Occupancy | |
Most Recent Occupancy: | 97.2% (August 5, 2015) |
2014 Occupancy: | 97.2% (December 31, 2014) |
2013 Occupancy: | 97.2% (December 31, 2013) |
2012 Occupancy: | 98.6% (December 31, 2012) |
(1) | In place cash management will be triggered upon (i) an event of default, (ii) any bankruptcy action of the borrower or property manager, (iii) the occurrence of a Kmart failure to renew event, (a “Renewal Event”), or (iv) the DSCR on a trailing three month basis falling below 1.20x (a “DSCR Event”). |
(2) | In addition to the monthly deposits, the borrower will be required to deposit 1/12 of the annual taxes that are currently paid directly by Kmart into the tax reserve upon (i) an event of default, (ii) Kmart no longer paying all taxes directly, (iii) the borrower failing to provide evidence that taxes have been paid upon lender’s request or (iv) the Kmart lease no longer being in full force and effect. |
(3) | If an acceptable blanket insurance policy is no longer in place, the borrower is required to deposit 1/12 of the annual premiums into the insurance reserve on a monthly basis. |
(4) | TI/LC reserves are subject to a cap of $600,000. During the continuance of a cash sweep period due to a Renewal Event or a DSCR Event following either a Kmart go-dark event (a “Go-Dark Event”) or a Kmart bankruptcy event (a “Bankruptcy Event”), all excess cash will be deposited into the TI/LC reserve, subject to an increased cap of $875,000. During the continuance of a cash sweep period due to a Renewal Event, Go-Dark Event or a Bankruptcy Event, if the Kmart premises is leased per lender’s approval, then the cap of $875,000 will decrease to the modified rollover reserve cap, as defined in the loan documents. |
(5) | Upon the occurrence of a DSCR Event following a Go-Dark Event or a Bankruptcy Event, all excess cash flow will be deposited into the TI/LC reserve until the cap has been reached and then into the Debt Service Reserve which is capped at $608,601. If a Bankruptcy Event occurs during a Cash Sweep Period due to a DSCR Event following a Go-Dark Event, within 30 days the borrower will be required to deposit cash or a letter of credit in an amount equal to the difference between $608,601 and the amount already on deposit in the Debt Service Reserve. |
(6) | Provided no cash sweep period due to a DSCR Event following a Go-Dark Event is ongoing, within 30 days following a Bankruptcy Event the borrower is required to deposit cash or a letter of credit in an amount equal to $608,601 into the Kmart BK Reserve. The borrower will not be obligated to fund both the Debt Service Reserve and the Kmart BK Reserve upon the occurrence of a Bankruptcy Event. |
(7) | Based on amortizing debt service payments. Based on the current interest only payments, the Underwritten NOI DSCR and Underwritten NCF DSCR are 2.13x and 1.94x, respectively. |
TRANSACTION HIGHLIGHTS |
■ | Tenancy.The property is anchored by Kmart Corporation (“Kmart”) and Kroger (rated Baa2/BBB/BBB by Moody’s/S&P/Fitch). Kmart occupies 36.9% of the NRA via a 25-year lease expiring November 30, 2018 with 10 five-year options, and Kroger occupies 34.6% of the NRA via a 20-year sublease with Kmart expiring September 30, 2033. Kroger invested approximately $11.5 million ($125 PSF) into their space and is projecting 2015 annual sales of approximately $45.0 million ($487 PSF). The property is 97.2% occupied by 18 tenants and has been over 97.0% occupied since 2012. Excluding the anchor tenants, no individual tenant occupies more than 7.3% of the NRA. |
■ | Market.The property is located in Yorktown, Virginia, along Victory Boulevard, approximately one mile east of Interstate 64 in an established in-fill location. Victory Boulevard is a main retail corridor for the surrounding area and has an average daily traffic count of 43,000. The submarket vacancy is 6.9%. The 2015 population within a five-mile radius of the property is 180,473 with estimated average household income of $78,930. |
■ | Sponsor.C. Torrey Breeden, a sponsor of the loan, is the Executive Vice President at The Breeden Company, a family-owned and operated real estate development company founded in 1961. The Breeden Company’s portfolio consists of 70 properties valued at approximately $990.7 million. |
B-92 |
Various Ocala, FL 34474 | Collateral Asset Summary – Loan No. 14 Ocala Portfolio - AHIP | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $19,000,000 61.3% 3.34x 16.1% |
Mortgage Loan Information | |
Loan Seller: | GACC |
Loan Purpose: | Acquisition |
Sponsor: | American Hotel Income Properties REIT Inc. |
Borrower: | AHIP FL Ocala 3712 Properties LLC; AHIP FL Ocala 3712 Enterprises LLC; AHIP FL Ocala 4101 Properties LLC; AHIP FL Ocala 4101 Enterprises LLC; AHIP FL Ocala 3610 Properties LLC; AHIP FL Ocala 3610 Enterprises LLC |
Original Balance: | $19,000,000 |
Cut-off Date Balance: | $19,000,000 |
% by Initial UPB: | 2.0% |
Interest Rate: | 4.2100% |
Payment Date: | 6thof each month |
First Payment Date: | September 6, 2015 |
Maturity Date: | August 6, 2025 |
Amortization: | Interest Only |
Additional Debt: | None |
Call Protection(1): | L(26), D(90), O(4) |
Lockbox / Cash Management(2): | Hard / Springing |
Reserves | ||
Initial | Monthly | |
Taxes: | $197,032 | $21,892 |
Insurance(3): | $0 | Springing |
FF&E(4): | $0 | Springing |
Required Repairs | $16,500 | NAP |
PIP: | $3,170,000 | $0 |
Financial Information | ||
Cut-off Date Balance / Room: | $53,977 | |
Balloon Balance / Room: | $53,977 | |
Cut-off Date LTV: | 61.3% | |
Balloon LTV: | 61.3% | |
Underwritten NOI DSCR: | 3.77x | |
Underwritten NCF DSCR: | 3.34x | |
Underwritten NOI Debt Yield: | 16.1% | |
Underwritten NCF Debt Yield: | 14.3% |
Property Information | |
Single Asset / Portfolio: | Portfolio of three properties |
Property Type: | Limited Service Hospitality |
Collateral: | Fee Simple |
Location: | Ocala, FL |
Year Built / Renovated: | Various |
Total Rooms: | 352 |
Property Management: | One FL Ocala CY Management LLC; One FL Ocala FI Management LLC; One FL Ocala RI Management LLC |
Underwritten NOI: | $3,057,634 |
Underwritten NCF: | $2,711,748 |
Appraised Value: | $31,000,000 |
Appraisal Date: | June 1, 2015 |
Historical NOI | |
Most Recent NOI: | $3,358,140 (T-12 April 30, 2015) |
2014 NOI: | $2,966,280 (December 31, 2014) |
2013 NOI: | $2,251,470 (December 31, 2013) |
2012 NOI: | $2,225,230 (December 31, 2012) |
Historical Occupancy | |
Most Recent Occupancy: | 61.6% (April 30, 2015) |
2014 Occupancy: | 59.7% (December 31, 2014) |
2013 Occupancy: | 55.4% (December 31, 2013) |
2012 Occupancy: | 55.5% (December 31, 2012) |
(1) | Any time after the expiration of the lockout period the borrowers may obtain the release of an individual property upon a bona fide third-party sale provided, among other things, (i) no event of default has occurred and is continuing, (ii) if the debt yield for the remaining properties is less than 15% then the LTV for the remaining properties may not exceed the lesser of the LTV immediately preceding such release and 61.3%, (iii) the DSCR for the remaining properties is not less than the greater of the DSCR immediately preceding the partial release and 2.30x and (iv) borrowers partially defease to lender 110% of the allocated loan amount for the released property. |
(2) | Cash management will be triggered (i) upon an event of default or (ii) if the DSCR falls below 1.20x until such time that the DSCR is at least 1.20x for two consecutive calendar quarters. |
(3) | The borrowers will be required to deposit 1/12 of the annual insurance premiums into an insurance reserve if an acceptable blanket policy is no longer in place. |
(4) | FF&E reserves will be waived until the payment date in August 2017. Commencing on the monthly payment date in August 2017, the borrowers are required to make monthly deposits in an amount equal to the greater of 1/12 of 4.0% of such year’s annual rents and the then required amount under the franchise agreement, provided that in lieu of monthly reserves, the borrowers may deliver to the lender a letter of credit in an amount equal to 4.0% of prior year’s gross revenues. |
TRANSACTION HIGHLIGHTS |
■ | Property.Ocala Portfolio - AHIP consists of three limited service, Marriott International, Inc. franchised hotel properties containing a total of 352 guestrooms and located in Ocala, Florida. The properties in the portfolio are each three stories and include the 169-room Courtyard Ocala that opened in 1988, the 87-room Residence Inn Ocala that opened in 2007, and the 96-room Fairfield Inn & Suites Ocala that opened in 1998. The loan is structured with a $3,170,000 property improvement plan, of which $3,095,000 is allocated to the Courtyard Ocala property, with $2,785,500 appropriated for hard costs and $309,500 for soft costs, and the remainder $75,000 is allocated to Fairfield Inn & Suites Ocala, with $67,500 appropriated for hard costs and $7,500 soft costs. |
■ | Performance.Based on an April 2015 industry report, the portfolio’s T-12 ADR, RevPAR and occupancy were $103.37, $63.71 and 61.6%, respectively. The RevPAR penetration rates over the same time period were 78.1% for Courtyard Ocala, 112.4% for Residence Inn Ocala and 90.0% for Fairfield Inn & Suites Ocala. |
■ | Market.The hotels are each located at the intersection of I-75 and Southwest College Road in Ocala, Florida, within a 0.6 mile radius of each other and approximately 40 miles south of Gainesville and 80 miles north of Orlando. The region is a major retiree and tourist destination and as the baby boomer population retires, the region is expected to see strong gains in consumer services (including leisure/hospitality) and healthcare demand. In addition to the retirement and traveler demand, the area has several corporate headquarters and major regional offices, including Lockheed Martin, AT&T, Signature Brands and K-Mart. In addition, Ocala is considered the “horse capital of the world” with over 1,200 horse farms, which employ over 44,000 individuals and generate over $2.2 billion in annual revenue for the county. |
■ | Sponsorship.The sponsor of the borrowers and the non-recourse carve-out guarantor is American Hotel Income Properties REIT Inc., which is the United States holding company for all of American Hotel Income Properties REIT LP’s (“AHIP”) US assets. AHIP is traded on the Toronto Exchange under the symbol HOT-UN.TO. AHIP indirectly owns and acquires hotel properties in the United States. The portfolio is comprised of 78 hotel properties that provide railway crew accommodation and 24-hour food service in 27 states. The branded portfolio consists of 35 hotels and 3,331 guestrooms and is affiliated with the world’s largest hotel brands. As of June 30, 2015, American Hotel Income Properties REIT Inc. had a net worth of approximately $235.9 million and liquidity of $31.0 million. |
B-93 |
2400 Cascade Pointe Boulevard, Charlotte, NC 28208 | Collateral Asset Summary – Loan No. 15 Hilton Garden Inn Charlotte Airport | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $18,475,793 64.8% 1.92x 12.9% |
Mortgage Loan Information | |
Loan Seller: | BNYM |
Loan Purpose: | Refinance |
Sponsor: | Ashok Patel; Surendra Patel |
Borrower: | Naman Lakepointe, LLC |
Original Balance: | $18,500,000 |
Cut-off Date Balance: | $18,475,793 |
% by Initial UPB: | 2.0% |
Interest Rate: | 4.5350% |
Payment Date: | 6thof each month |
First Payment Date: | October 6, 2015 |
Maturity Date: | September 6, 2025 |
Amortization: | 360 months |
Additional Debt: | None |
Call Protection: | L(25), D(91), O(4) |
Lockbox / Cash Management(1): | Springing Hard / Springing |
Reserves | ||
Initial | Monthly | |
Taxes: | $112,489 | $11,841 |
Insurance: | $4,739 | $1,185 |
FF&E: | $18,360 | 1/12 of 4.0% of prior year’s gross revenues |
Financial Information | ||
Cut-off Date Balance / Room: | $157,913 | |
Balloon Balance / Room: | $128,000 | |
Cut-off Date LTV: | 64.8% | |
Balloon LTV: | 52.5% | |
Underwritten NOI DSCR: | 2.11x | |
Underwritten NCF DSCR: | 1.92x | |
Underwritten NOI Debt Yield: | 12.9% | |
Underwritten NCF Debt Yield: | 11.7% |
Property Information | |
Single Asset / Portfolio: | Single Asset |
Property Type: | Select Service Hospitality |
Collateral: | Fee Simple |
Location: | Charlotte, NC |
Year Built / Renovated: | 2013 / NAP |
Total Rooms: | 117 |
Property Management: | Naman Management, LLC |
Underwritten NOI: | $2,388,321 |
Underwritten NCF: | $2,163,872 |
Appraised Value: | $28,500,000 |
Appraisal Date: | June 18, 2015 |
Historical NOI(2) | |
Most Recent NOI: | $2,396,114 (T-12 August 31, 2015) |
2014 NOI: | $1,726,805 (December 31, 2014) |
2013 NOI: | NAP |
2012 NOI: | NAP |
Historical Occupancy(2) | |
Most Recent Occupancy: | 85.0% (August 31, 2015) |
2014 Occupancy: | 73.1% (December 31, 2014) |
2013 Occupancy: | NAP |
2012 Occupancy: | NAP |
(1) | A hard lockbox and in place cash management will be triggered upon (i) an event of default or (ii) the failure by the borrower to maintain a DSCR of at least 1.15x, until such time as the DSCR is at least 1.20x for two consecutive calendar quarters. |
(2) | The property was opened in 2013 and as such, Historical NOI and Historical Occupancy are not available. |
TRANSACTION HIGHLIGHTS |
■ | Property. The Hilton Garden Inn Charlotte Airport is a select service 117-room hotel in Charlotte, North Carolina that was developed in 2013. The property offers studio rooms and 2-room suites set within a corporate office park among lakes, jogging trails, and gardens. Each room includes high speed internet, 42-inch flat screen televisions with complimentary HBO, a work desk, and Serta Suite Dreams bedding and non-allergenic feather pillows. The property features a 24-hour business center, a fitness center, an outdoor pool, The Pavilion Pantry, which sells sundries, beverages and ready-to-cook meals, and guest laundry facilities. The property’s restaurant, the Garden Grill and Bar, serves breakfast, lunch and dinner. The property operates pursuant to a Hilton brand franchise agreement that expires in October 2029. |
■ | Location.The property is located in Charlotte, North Carolina in a primarily commercial and industrial neighborhood. There are residential developments scattered throughout the neighborhood off of main thoroughfares. The property is less than five miles southeast of the Charlotte Douglas International Airport, which is the primary demand generator in the immediate area. The property is accessible by a number of regional throughways, including Interstate 77 and Interstate 485. The property is adjacent to an on-ramp for Interstate 77, which provides access to downtown Charlotte. |
■ | Sponsor.Ashok Patel and Surendra Patel co-founded Naman Hotels (“Naman”), an owner, operator and manager of restaurants and hotels in the Southeastern United States, in 1978. Naman currently owns and manages 19 hotels, containing more than 1,950 guest rooms, and has offices in South Carolina and Georgia. Ashok Patel is the Chief Executive Officer of Naman Hotels with 35 years’ experience in the hospitality industry and has completed training programs for Hilton Hotels, Marriot Hotels, InterContinental Hotels Group, Choice Hotels, and Denny’s Restaurants. Surendra Patel is the Director of Real Estate and Construction and is currently responsible for acquisitions, purchasing and construction and renovation projects. |
■ | Performance.For the trailing 12-month period ending August 31, 2015, the Hilton Garden Inn Charlotte Airport property reported occupancy, ADR and RevPAR of 85.0%, $135.06 and $114.77, respectively. According to a third party market research firm, the property competitive set reported occupancy, ADR and RevPAR of 84.3%, $120.85 and $101.91, respectively, as of June 2015. |
B-94 |
Various | Collateral Asset Summary – Loan No. 16 GSP MHP Portfolio I | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $17,927,306 74.9% 1.29x 8.2% |
Mortgage Loan Information | |
Loan Seller: | CCRE |
Loan Purpose: | Refinance |
Sponsor(1): | Frank T. Perano |
Borrowers: | Cedar Manor Management, LLC; Indian Creek Village Management, LLC |
Original Balance: | $17,950,000 |
Cut-off Date Balance: | $17,927,306 |
% by Initial UPB: | 1.9% |
Interest Rate: | 4.7235% |
Payment Date: | 6thof each month |
First Payment Date: | October 6, 2015 |
Maturity Date: | September 6, 2025 |
Amortization: | 360 months |
Additional Debt: | None |
Call Protection(2): | L(25), D(92), O(3) |
Lockbox / Cash Management(3): | Soft / Springing |
Reserves | ||
Initial | Monthly | |
Taxes: | $152,182 | $21,740 |
Insurance(4): | $0 | Springing |
Replacement: | $0 | $2,167 |
Required Repairs: | $3,188 | NAP |
Sewer Charges: | $360,614 | $0 |
Financial Information | ||
Cut-off Date Balance / Pad: | $35,152 | |
Balloon Balance / Pad: | $28,675 | |
Cut-off Date LTV: | 74.9% | |
Balloon LTV: | 61.1% | |
Underwritten NOI DSCR: | 1.31x | |
Underwritten NCF DSCR: | 1.29x | |
Underwritten NOI Debt Yield: | 8.2% | |
Underwritten NCF Debt Yield: | 8.0% |
Property Information | |
Single Asset / Portfolio: | Portfolio of two properties |
Property Type: | Manufactured Housing Community |
Collateral: | Fee Simple |
Location: | Various, PA |
Year Built / Renovated: | 1970, 2001, 2004 / NAP |
Total Pads: | 510 |
Property Management: | GSP Management Co. |
Underwritten NOI: | $1,465,669 |
Underwritten NCF: | $1,439,664 |
Appraised Value: | $23,950,000 |
Appraisal Date: | June 26, 2015 |
Historical NOI | |
Most Recent NOI: | $1,478,861 (T-12 June 30, 2015) |
2014 NOI: | $1,247,462 (December 31, 2014) |
2013 NOI: | $1,413,333 (December 31, 2013) |
2012 NOI: | $1,310,556 (December 31, 2012) |
Historical Occupancy | |
Most Recent Occupancy: | 86.3% (July 9, 2015) |
2014 Occupancy: | 87.0% (December 31, 2014) |
2013 Occupancy: | 87.6% (December 31, 2013) |
2012 Occupancy: | 88.2% (December 31, 2012) |
(1) | The sponsor is also the sponsor of the mortgage loan secured by the mortgaged property identified on Annex A-1 to the Free Writing Prospectus as Brookhaven MHP, which mortgage loan represents approximately 0.8% of the initial pool balance. For additional information, see “Risk Factors—Risks Related to the Mortgage Loans—Risks Related to Litigation and Condemnation” in the free writing prospectus. |
(2) | On any date after the expiration of the lockout period and prior to the open prepayment date, the borrowers may obtain the release of the Cedar Manor MHP property upon a bona fide third-party sale provided, among other things, (i) the LTV for the Indian Creek Village property does not exceed the lesser of the LTV immediately preceding such sale and 75.0%, (ii) the DSCR for the Indian Creek Village property is not less than the greater of the DSCR immediately preceding the sale and 1.30x and (iii) borrowers partially defease to lender a release amount equal to the greater of (a) 120% of the allocated loan amount for the Cedar Manor MHP property (which ALA is equal to $8,880,000) and (b) 100% of the net sales proceeds. |
(3) | In place cash management will be triggered upon the occurrence of (i) an event of default, (ii) any bankruptcy action of the borrowers, guarantor or property manager, (iii) failure by the borrowers, after the end of two calendar quarters to maintain a debt service coverage ratio of at least 1.10x, until the debt service coverage ratio is at least 1.25x for four consecutive quarters. |
(4) | The borrowers will be required to deposit 1/12 of the annual insurance premiums into the insurance account (i) upon an event of default, (ii) if an acceptable blanket insurance policy is no longer in place or (iii) if the borrowers fail to provide evidence of the payment of all insurance premiums. |
TRANSACTION HIGHLIGHTS |
■ | Portfolio.GSP MHP Portfolio I is a portfolio of two manufactured housing communities located in Macungie and Elizabethtown, Pennsylvania. The portfolio contains a total of 510 pads that are 86.3% occupied as of July 9, 2015; 194 pads (99.5% occupied) at the Indian Creek Village property and 316 pads (78.2% occupied) at the Cedar Manor MHP property. |
■ | Occupancy History. GSP MHP Portfolio I has maintained a weighted average occupancy of 91.9% since 2006. |
■ | Market & Location.The Indian Creek Village property is located in Macungie, Pennsylvania within Lehigh County. The property is accessible via I-76, which is located three miles to the north. The Indian Creek Village property is located approximately 8.5 miles southwest of Allentown and 50 miles north of Philadelphia. As of the 2010 census, the Lehigh Valley region had a population of 821,623 and is the fastest growing and third most populous region in Pennsylvania. Allentown is home to several global manufacturing companies such as Mack Trucks, PPL and Air Products. The Cedar Manor MHP property is located in Elizabethtown, Pennsylvania, within the Harrisburg-York-Lebanon combined statistical area. As of the 2010 census, the Harrisburg-York-Lebanon combined statistical area had a population of 1,233,708. Since Harrisburg is the state capital, the economy is driven by the government as well as companies in the private sector such as IBM, Hershey Foods and Rite Aid Corporation. |
■ | Sponsor.Frank T. Perano has over 30 years of experience owning and operating manufactured housing communities throughout Pennsylvania and Delaware. His manufactured housing portfolio consists of over 10,000 pads across 72 properties. |
B-95 |
1151 Maple Avenue & 158 Santee Street Los Angeles, CA 90015 | Collateral Asset Summary – Loan No. 17 A&H Pacific | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $17,600,000 61.1% 1.69x 10.0% |
Mortgage Loan Information | |
Loan Seller: | GACC |
Loan Purpose: | Refinance |
Sponsor: | Moshe Aflalo; Efrem Harkham; Uri Harkham |
Borrower(1): | 1151 Maple-1-AHPP, LLC; 1151 Maple-37.125-EHS, LLC; 1151 Maple-37.125 HFE, LLC; 1151 Maple-24.75-1151MA, LLC |
Original Balance: | $17,600,000 |
Cut-off Date Balance: | $17,600,000 |
% by Initial UPB: | 1.9% |
Interest Rate: | 4.1600% |
Payment Date: | 6thof each month |
First Payment Date: | October 6, 2015 |
Maturity Date: | September 6, 2025 |
Amortization: | Interest only for first 60 months; 360 months thereafter |
Additional Debt: | None |
Call Protection: | L(25), D(91), O(4) |
Lockbox / Cash Management(2): | Soft Springing Hard / Springing |
Reserves | ||
Initial | Monthly | |
Taxes: | $66,752 | $8,344 |
Insurance(3): | $0 | Springing |
Replacement(4): | $0 | $249 |
TI/LC(4): | $25,000 | $2,083 |
Required Repairs: | $27,500 | NAP |
Financial Information | ||
Cut-off Date Balance / Sq. Ft.: | $530 | |
Balloon Balance / Sq. Ft.: | $482 | |
Cut-off Date LTV: | 61.1% | |
Balloon LTV: | 55.6% | |
Underwritten NOI DSCR(5): | 1.72x | |
Underwritten NCF DSCR(5): | 1.69x | |
Underwritten NOI Debt Yield: | 10.0% | |
Underwritten NCF Debt Yield: | 9.9% |
Property Information | |
Single Asset / Portfolio: | Single Asset |
Property Type: | Unanchored Retail |
Collateral: | Fee Simple |
Location: | Los Angeles, CA |
Year Built / Renovated: | 1981, 1985 / NAP |
Total Sq. Ft.: | 33,202 |
Property Management: | A&H Management |
Underwritten NOI: | $1,767,586 |
Underwritten NCF: | $1,739,598 |
Appraised Value: | $28,800,000 |
Appraisal Date: | April 15, 2015 |
Historical NOI | |
Most Recent NOI: | $1,893,064 (T-12 June 30, 2015) |
2014 NOI: | $1,900,957 (December 31, 2014) |
2013 NOI: | $1,895,989 (December 31, 2013) |
2012 NOI: | $1,799,694 (December 31,2012) |
Historical Occupancy | |
Most Recent Occupancy: | 96.2% (July 1, 2015) |
2014 Occupancy: | 99.9% (December 31, 2014) |
2013 Occupancy: | 99.9% (December 31, 2013) |
2012 Occupancy: | 100.0% (December 31, 2012) |
(1) | The borrowers, 1151 Maple-1-AHPP, LLC, 1151 Maple-37.125-EHS, LLC, 1151 Maple-37.125 HFE, LLC and 1151 Maple-24.75-1151MA, LLC, are structured as tenants-in-common. |
(2) | A hard lockbox and in place cash management will be triggered (i) upon an event of default or (ii) if the DSCR falls below 1.15x until such time that the DSCR is at least 1.20x for two consecutive calendar quarters. |
(3) | If an acceptable blanket insurance policy is no longer in place, the borrowers are required to deposit 1/12 of the annual insurance premiums into the insurance reserve account on a monthly basis. |
(4) | Replacement reserves and TI/LC reserves are subject to caps of $37,000 and $50,000, respectively. |
(5) | Based on amortizing debt service payments. Based on the current interest only debt service payments, the Underwritten NOI DSCR and UW NCF DSCR are 2.38x and 2.34x, respectively. |
TRANSACTION HIGHLIGHTS |
■ | Property. A&H Pacific is a 33,202 sq. ft. retail strip center comprised of two retail buildings, totaling 19,202 sq. ft. and 14,000 sq. ft. of rooftop parking space, located along East 12th Street between Santee Street and Maple Avenue in the fashion district of downtown Los Angeles. The two buildings face each other along Santee Alley, a pedestrian only shopping alley made popular by the its fashion retailers. The buildings were constructed in 1981 and 1985 and are currently 96.2% occupied as of July 1, 2015 by 22 tenants (including the 14,000 sq. ft. parking lease). The rooftop parking lot contains 64 parking spaces, which equates to a parking ratio of 3.3 spaces per 1,000 sq. ft. of retail space, and is leased out to a third party parking operator. |
■ | Location/Market.A&H Pacific is located in the fashion district of Los Angeles, specifically within the Santee Alley shopping center. Wholesale distribution of fashion and accessories drives economic activity in the area, supporting a network of design rooms, warehouses and showrooms. The fashion district contains over 2,800 businesses with approximately 14,600 employees. According to the appraiser, the estimated 2015 population within a one, three and five-mile radius are 50,034, 582,255 and 1,308,435, respectively and 2015 median household incomes are $24,698, $28,427 and $32,771, respectively. The appraiser identified eight comparable retail properties within a 0.2 mile radius of A&H Pacific that ranged in occupancy from 90.0% to 100.0%. No new inventory has been added to the fashion district since 2008 and no new supply is expected in the near future. |
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Various | Collateral Asset Summary – Loan No. 18 WHG Extended Stay Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $15,500,000 70.5% 1.95x 13.7% |
Mortgage Loan Information | |
Loan Seller: | BNYM |
Loan Purpose: | Recapitalization |
Sponsor: | R-Roof Assets LLC |
Borrower: | WHG SU Montgomery LLC; WHG SU Louisville LLC; WHG SU Alexandria LLC; WHG SU Columbia LLC; WHG SU Gainesville LLC |
Original Balance: | $15,500,000 |
Cut-off Date Balance: | $15,500,000 |
% by Initial UPB: | 1.7% |
Interest Rate: | 4.7600% |
Payment Date: | 6thof each month |
First Payment Date: | November 6, 2015 |
Maturity Date: | October 6, 2020 |
Amortization: | 360 months |
Additional Debt: | None |
Call Protection(1): | L(24), D(32), O(4) |
Lockbox / Cash Management(2): | Springing Hard / Springing |
Reserves | ||
Initial | Monthly | |
Taxes: | $140,352 | $20,050 |
Insurance(3): | $0 | Springing |
FF&E(4): | $100,000 | 1/12 of 4.0% of gross revenues |
Financial Information | ||
Cut-off Date Balance / Room: | $28,336 | |
Balloon Balance / Room: | $26,041 | |
Cut-off Date LTV: | 70.5% | |
Balloon LTV: | 64.7% | |
Underwritten NOI DSCR: | 2.19x | |
Underwritten NCF DSCR: | 1.95x | |
Underwritten NOI Debt Yield: | 13.7% | |
Underwritten NCF Debt Yield: | 12.2% |
Property Information | |
Single Asset / Portfolio: | Portfolio of five properties |
Property Type: | Extended Stay Hospitality |
Collateral: | Fee Simple |
Location: | Various |
Year Built / Renovated: | Various / 2014 |
Total Rooms: | 547 |
Property Management: | Suburban Management LLC |
Underwritten NOI: | $2,128,266 |
Underwritten NCF: | $1,893,838 |
Appraised Value: | $22,000,000 |
Appraisal Date: | Various |
Historical NOI | |
Most Recent NOI: | $2,110,177 (T-12 June 30, 2015) |
2014 NOI: | $1,759,964 (December 31, 2014) |
2013 NOI(5): | NAP |
2012 NOI(5): | NAP |
Historical Occupancy | |
Most Recent Occupancy: | 73.1% (July 31, 2015) |
2014 Occupancy: | 68.9% (December 31, 2014) |
2013 Occupancy: | 61.0% (December 31, 2013) |
2012 Occupancy(5): | NAP |
(1) | Any time after the lockout period ends and prior to the open date, the borrowers may release a property, provided, among other things per the loan documents, (i) no event of default has occurred and is continuing, (ii) borrowers shall defease a portion of the loan equal to the greater of (A) (a) 125% of the Amortized Allocated Loan Amount or (b) 100% of Net Sales Proceeds with respect to such Individual Property, (B) the DSCR for the remaining properties is no less than the greater of 1.25x and the DSCR immediately preceding such release, (C) the LTV for the remaining properties is no greater than 70.0% and (D) the Debt Yield for the remaining properties is no less than 12.0%. |
(2) | A hard lockbox and in place cash management will be triggered (i) upon an event of default or (ii) if the DSCR falls below 1.15x after the end of any calendar quarter until such time that the DSCR is at least 1.20x for two consecutive quarters. |
(3) | Upon notice from the lender, the borrower will be required to deposit 1/12 of the annual insurance premiums into an insurance reserve account if (i) an event of default has occurred, (ii) an acceptable blanket insurance policy is no longer in place, (iii) the borrower fails to provide evidence of renewal of insurance or (iv) borrower fails to provide evidence that the insurance premiums have been paid. |
(4) | The borrower is required to deposit monthly the greater of (i) 1/12 of 4.0% of gross revenues of the month that is two months prior to such date, (ii) any amount required under the franchise agreement for FF&E and (iii) $15,000. |
(5) | The sponsor purchased the properties in 2013. As such, Historical NOI and Historical Occupancy are not available. |
TRANSACTION HIGHLIGHTS |
■ | Properties. The WHG Extended Stay Portfolio is comprised of five extended stay hotels totaling 547 rooms located in five states, predominately throughout the southeastern US. The typical amenity package consists of an outdoor swimming pool, fitness center, and business center. Each property consists of a single three- to four-story building. |
■ | Location.Sun Suites Louisville is an approximately 18-year-old, 141-guestroom, three-story hotel complex located at, 4540 Taylorsville Road, Louisville, Kentucky. Sun Suites Gainesville is an approximately 15-year-old, 110-guestroom, four-story hotel complex located at 1115 Jesse Jewell Parkway Southwest, Gainesville, Georgia. Sun Suites Alexandria is an approximately 10-year-old, 113-guestroom, four -story hotel complex located at 1000 MacArthur Road, Alexandria, Louisiana. HomeTowne Suites Columbia is an approximately 16-year-old, 88-guestroom, three-story hotel complex located at, 350 Columbiana Drive, Columbia, South Carolina. HomeTowne Suites Montgomery is an approximately 17-year-old, 95-guestroom, three-story hotel complex located at, 5047 Carmichael Road, Montgomery, Alabama. Three properties operate under the Sun Suites flag and two properties operate under the HomeTowne Suites flag. The properties have new five-year franchise agreements, with successive five-year renewal terms unless earlier terminated. |
■ | Sponsor.The sponsor is R-Roof Assets LLC, an affiliate of Westmont Hospitality Group (“Westmont”). Westmont is a large privately-held hospitality organization and currently operates over 500 hotels across three continents. Since 1976, Westmont has co-owned and through its subsidiaries, operated more than 800 hotels in North America. Currently, Westmont has ownership interests in excess of 400 hotels across North America, with approximately 85,000 rooms. |
■ | Performance.For the trailing 12-month period ending June 2015, the WHG Extended Stay Portfolio reported occupancy, ADR and RevPAR of 73.2%, $39.27 and $28.74, respectively. |
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Various, MA | Collateral Asset Summary – Loan No. 19 Greater Boston Industrial Portfolio I | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $15,500,000 73.5% 1.26x 9.4% |
Mortgage Loan Information | |
Loan Seller: | CCRE |
Loan Purpose: | Acquisition |
Sponsor: | Christopher J. Knisley; Mark J. McInerney |
Borrower: | Albany Road-Technology LLC; Albany Road-South LLC; Albany Road-Sunnyslope LLC |
Original Balance: | $15,500,000 |
Cut-off Date Balance: | $15,500,000 |
% by Initial UPB: | 1.7% |
Interest Rate: | 4.9030% |
Payment Date: | 6thof each month |
First Payment Date: | October 6, 2015 |
Maturity Date: | September 6, 2025 |
Amortization: | Interest only for first 60 months; 300 months thereafter |
Additional Debt: | None |
Call Protection: | L(25), D(90), O(5) |
Lockbox / Cash Management(1): | Soft / Springing |
Reserves | ||
Initial | Monthly | |
Taxes: | $63,857 | $31,928 |
Insurance: | $6,133 | $2,044 |
Replacement(2): | $1,050,000 | Springing |
TI/LC(3): | $1,010,771 | Springing |
Required Repairs: | $38,125 | NAP |
Financial Information | ||
Cut-off Date Balance / Sq. Ft.: | $56 | |
Balloon Balance / Sq. Ft.: | $50 | |
Cut-off Date LTV: | 73.5% | |
Balloon LTV: | 65.2% | |
Underwritten NOI DSCR(4): | 1.36x | |
Underwritten NCF DSCR(4): | 1.26x | |
Underwritten NOI Debt Yield: | 9.4% | |
Underwritten NCF Debt Yield: | 8.7% |
Property Information | |
Single Asset / Portfolio: | Portfolio of three properties |
Property Type: | Industrial / Various |
Collateral: | Fee Simple |
Location: | Various, MA |
Year Built / Renovated: | Various |
Total Sq. Ft.: | 275,441 |
Property Management: | Albany Road Asset Services; CB Richard Ellis-N.E. Partners, LP |
Underwritten NOI: | $1,463,059 |
Underwritten NCF: | $1,352,883 |
Appraised Value: | $21,100,000 |
Appraisal Date: | Various |
Historical NOI | |
Most Recent NOI: | $1,530,390 (T-12 May 31, 2015) |
2014 NOI: | $1,503,339 (December 31, 2014) |
2013 NOI: | $1,436,413 (December 31, 2013) |
Historical Occupancy | |
Most Recent Occupancy: | 100.0% (August 25, 2015) |
2014 Occupancy: | 100.0% (December 31, 2014) |
2013 Occupancy: | 100.0% (December 31, 2013) |
2012 Occupancy: | 100.0% (December 31, 2012) |
(1) | In place cash management and an excess cash trap will commence in the occurrence of (i) the event of default, (ii) if the DSCR falls below a 1.15x for two consecutive quarters or (iii) the earliest to occur of (a) the date upon which EBP and/or Hutchinson gives notice to terminate their respective lease(s), (b) the date EBP and/or Hutchinson delivers notice to not renew their respective leases, or (c) twelve months prior to the then current expiration date of the EBP and/or Hutchinson leases. |
(2) | Replacement reserves are subject to a cap of $100,000. Upon the reserve balance being less than $100,000, the borrower will be required to make monthly deposits of $2,295 to be due for replacements and repairs required to be made to the property during the calendar year. |
(3) | TI/LC reserves are subject to a cap $300,000. Upon the reserve balance being less than or equal to $150,000, the borrower will be required to make monthly deposits of $6,886 into the Rollover Reserve on each payment date, which shall be held by Lender for approved leasing expenses incurred following the date hereof. |
(4) | Based on amortizing debt service payments. Based on the current interest only payments, Underwritten NOI DSCR and Underwritten NCF DSCR are 1.90x and 1.76x, respectively. |
TRANSACTION HIGHLIGHTS |
■ | Portfolio.Greater Boston Industrial Portfolio I consists of three cross-collateralized, cross-defaulted, flex and warehouse/distribution industrial properties in the greater Boston area. The properties in the portfolio combine for 275,441 sq. ft., and are currently 100% occupied as of August 25th, 2015. Two of the three properties are single tenant. 65 Sunnyslope Avenue (153,641 sq. ft.) is occupied by Eastern Bag & Paper Co. and is located in Tewksbury, Massachusetts. 82 South Street (70,600 sq. ft.), is occupied by Hutchinson Aerospace & Industry, Inc. and located in Hopkinton, Massachusetts. The third property, 19 Technology Drive (51,200 sq. ft.), is located in Auburn, Massachusetts. Its two tenants, Accelerated Media Technologies, Inc. and Harrell’s Turf Specialty, LLC, consist of 27,200 and 24,000 sq. ft. respectively. |
■ | Strong Market.The portfolio is located just outside of Boston within the Route 495-Mass Pike West & Route 3 North submarkets that have average occupancies of 83.2% and 85.1%, respectively as of Q2 2015. |
■ | Consistent Occupancy.The properties are currently 100.0% leased and have maintained an average occupancy of 100.0% since 2012. Eastern Bag & Paper Co. and Hutchinson Aerospace & Industry, Inc., the portfolio’s two largest tenants, have occupied their buildings since 2006 and 2005, respectively. Both of their leases have been extended for terms of five or more years in late 2014. Eastern Bag & Paper Co. has a lease expiration date of October 31, 2021 and Hutchinson Aerospace & Industry, Inc. has a lease expiration date of January 31, 2020. |
■ | Sponsor.Boston-based Albany Road was established in July, 2012. The company and its team combine for over 200 years of real estate, investment banking, and venture capital experience. After an initial focus on opportunities in New England, the firm has also expanded its reach by closing investments in Tennessee and Georgia. Albany Road aims to structure its investments with a combination of company equity in addition to high net worth/family office or institutional equity and leverages investments with a debt component that is usually 65-75%. |
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3149 Landtree Place Orlando, FL 32812 | Collateral Asset Summary – Loan No. 20 Reserve at Conway | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $14,800,000 73.6% 1.29x 8.3% |
Mortgage Loan Information | |
Loan Seller: | GACC |
Loan Purpose: | Acquisition |
Sponsor: | David J. Carlson; Mark A. Isaacson |
Borrower: | Redwood Reserve at Conway, LLC |
Original Balance: | $14,800,000 |
Cut-off Date Balance: | $14,800,000 |
% by Initial UPB: | 1.6% |
Interest Rate: | 4.6000% |
Payment Date: | 6thof each month |
First Payment Date: | October 6, 2015 |
Maturity Date: | September 6, 2025 |
Amortization: | Interest only for first 60 months; 360 months thereafter |
Additional Debt: | None |
Call Protection: | L(25), D(91), O(4) |
Lockbox / Cash Management(1): | Springing Soft / Springing |
Reserves | ||
Initial | Monthly | |
Taxes: | $188,411 | $18,841 |
Insurance(2): | $0 | Springing |
Replacement: | $0 | $4,583 |
Required Repairs: | $11,625 | NAP |
Required Renovation Reserve: | $1,391,748 | $0 |
Financial Information | ||
Cut-off Date Balance / Unit: | $67,273 | |
Balloon Balance / Unit: | $61,656 | |
Cut-off Date LTV(3): | 73.6% | |
Balloon LTV(3): | 67.5% | |
Underwritten NOI DSCR(4): | 1.35x | |
Underwritten NCF DSCR(4): | 1.29x | |
Underwritten NOI Debt Yield: | 8.3% | |
Underwritten NCF Debt Yield: | 7.9% |
Property Information | |
Single Asset / Portfolio: | Single Asset |
Property Type: | Garden Multifamily |
Collateral: | Fee Simple |
Location: | Orlando, FL |
Year Built / Renovated: | 1983 / 2015 |
Total Units: | 220 |
Property Management: | American Management Services Central LLC |
Underwritten NOI: | $1,225,710 |
Underwritten NCF: | $1,170,710 |
“As Complete” Appraised Value(5): | $20,100,000 |
“As Complete” Appraised Date(5): | July 1, 2016 |
Historical NOI | |
Most Recent NOI: | $1,147,430 (T-12 May 31, 2015) |
2014 NOI: | $1,082,560 (December 31, 2014) |
2013 NOI: | $1,022,157 (December 31, 2013) |
2012 NOI: | NAV |
Historical Occupancy | |
Most Recent Occupancy: | 95.5% (July 8, 2015) |
2014 Occupancy: | 94.3% (December 31, 2014) |
2013 Occupancy: | 95.1% (December 31, 2013) |
2012 Occupancy: | NAV |
(1) | A soft lockbox and in place cash management will be triggered (i) upon an event of default or (ii) if the DSCR falls below 1.10x until such time that the DSCR is at least 1.20x for two consecutive calendar quarters. |
(2) | If an acceptable blanket insurance policy is no longer in place, the borrower is required to deposit 1/12 of the annual insurance premiums into the insurance reserve account on a monthly basis. |
(3) | The Cut-off Date LTV and Balloon LTV are based on the “As Complete” appraised value of $20.1 million as of July 1, 2016. Based on the “As-is” appraised value of $18.6 million as of July 8, 2015, the Cut-off Date LTV and Balloon LTV is 79.6% and 72.9%, respectively. |
(4) | Based on amortizing payments. Based on the current interest only debt service payments, the Underwritten NOI DSCR and Underwritten NCF DSCR are 1.78x and 1.70x, respectively. |
(5) | The “As Complete” appraised value assumes the completion of planned capital expenditures at the property by July 1, 2016. The full amount of planned capital expenditures, $1,391,748, was reserved for at loan closing. |
TRANSACTION HIGHLIGHTS |
■ | Property.The Reserve at Conway property is a 220-unit, garden style apartment complex located in Orlando, Florida. The property was constructed in 1983 and consists of 15 apartment buildings with 164,484 sq. ft. of rentable area and one clubhouse/office. The Reserve at Conway property offers one- and two-bedroom floor plans with an average unit size of 748 sq. ft. The Reserve at Conway property amenities include a swimming pool, fitness center, grill area, tennis court, clubhouse, laundry facility, dog park, business center, car care center and 24-hour emergency maintenance. Parking is provided via 356 open surface parking spaces, which equates to a parking ratio of 1.62 spaces per unit. |
■ | Capital Improvements.According to the sponsor, since early 2012, the seller has invested approximately $941,000 ($4,277 per unit) in capital improvements at the Reserve at Conway property. The improvements included unit upgrades, including a full renovation of 36 units, exterior painting, pool upgrades, HVAC and water heater replacement, landscaping upgrades, exterior enhancements, new signage, clubhouse upgrades and roofing and parking lot repairs. The borrower plans to spend an additional $1,391,748 ($6,326 per unit) in capital improvements post loan origination. Budgeted improvements at the Reserve at Conway property include $1.06 million of unit interior improvements, $117,000 of common area improvements, including landscaping, clubhouse and fitness center renovations, pool deck resurfacing, and $215,000 of exterior improvements. |
■ | Market. Reserve at Conway is located in Orlando, Florida within the Orlando MSA, approximately four miles southeast of the Orlando central business district and 3.5 miles north of the Orlando International Airport. According to the appraisal, the population within a one-, three- and five-mile radius is 16,565, 112,783 and 270,886, respectively, and median household income is $39,636, $39,363 and $40,199, respectively. As of Q1 2015, the Orlando multifamily market had a total inventory of 129,805 units and the Reserve at Conway property’s submarket had an inventory of 18,672 units. New inventory of 200 units was added to the Orlando multifamily market in Q1 2015 and 4,376 units were added in 2014, compared to no new units in Q1 2015 and 1,326 units in 2014 for the Reserve at Conway property’s submarket. |
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ANNEX C
GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES
Except in limited circumstances, the globally offered COMM 2015-CCRE27 Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class X-A, Class A-M, Class B and Class C will be available only in book-entry form.
The book-entry certificates will be tradable as home market instruments in both the European and U.S. domestic markets. Initial settlement and all secondary trades will settle in same-day funds. Secondary market trading between investors holding book-entry certificates through Clearstream and Euroclear will be conducted in the ordinary way in accordance with their normal rules and operating procedures and in accordance with conventional Eurobond practice, which is seven calendar days’ settlement. Secondary market trading between investors holding book-entry certificates through DTC will be conducted according to the rules and procedures applicable to U.S. corporate debt obligations.
Secondary cross-market trading between member organizations of Clearstream or Euroclear and Participants holding book-entry certificates will be accomplished on a delivery against payment basis through the respective depositaries of Clearstream and Euroclear, in that capacity, as Participants.
As described under “Certain U.S. Federal Income Tax Documentation Requirements” below, non-U.S. holders of book-entry certificates will be subject to U.S. withholding taxes unless those holders meet specific requirements and deliver appropriate U.S. tax documents to the securities clearing organizations of their participants.
Initial Settlement
All Certificates of each Class of Offered Certificates will be held in registered form by DTC in the name of Cede & Co. as nominee of DTC. Investors’ interests in the book-entry certificates will be represented through financial institutions acting on their behalf as direct and indirect Participants. As a result, Clearstream and Euroclear will hold positions on behalf of their member organizations through their respective depositaries, which in turn will hold positions in accounts as Participants. Investors’ securities custody accounts will be credited with their holdings against payment in same-day funds on the settlement date.
Investors electing to hold their book-entry certificates through Clearstream or Euroclear accounts will follow the settlement procedures applicable to conventional Eurobonds, except that there will be no temporary global security and no “lock up” or restricted period. Global securities will be credited to the securities custody accounts on the settlement date against payment in same-day funds.
Secondary Market Trading
Since the purchaser determines the place of delivery, it is important to establish at the time of the trade where both the purchaser’s and seller’s accounts are located to ensure that settlement can be made on the desired value date.
Trading between Participants. Secondary market trading between Participants will be settled in same-day funds.
Trading between Clearstream and/or Euroclear Participants. Secondary market trading between member organizations of Clearstream or Euroclear will be settled using the procedures applicable to conventional Eurobonds in same-day funds.
Trading between DTC Seller and Clearstream or Euroclear Purchaser. When book-entry certificates are to be transferred from the account of a Participant to the account of a member organization of Clearstream or Euroclear, the purchaser will send instructions to Clearstream or Euroclear through that member organization at least one business day prior to settlement. Clearstream or Euroclear, as the
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case may be, will instruct the respective depositary to receive the book-entry certificates against payment. Payment will include interest accrued on the book-entry certificates from and including the first day of the interest accrual period coinciding with or commencing in, as applicable, the calendar month in which the last coupon payment date occurs (or, if no coupon payment date has occurred, from and including the first day of the initial interest accrual period) to and excluding the settlement date, calculated on the basis of a year of 360 days consisting of twelve 30-day months. Payment will then be made by the respective depositary to the Participant’s account against delivery of the book-entry certificates. After settlement has been completed, the book-entry certificates will be credited to the respective clearing system and by the clearing system, in accordance with its usual procedures, to the account of the member organization of Clearstream or Euroclear, as the case may be. The securities credit will appear the next day, European time, and the cash debit will be back-valued to, and the interest on the book-entry certificates will accrue from, the value date, which would be the preceding day when settlement occurred in New York. If settlement is not completed on the intended value date, which means the trade fails, the Clearstream or Euroclear cash debit will be valued instead as of the actual settlement date.
Member organizations of Clearstream and Euroclear will need to make available to the respective clearing systems the funds necessary to process same-day funds settlement. The most direct means of doing so is to pre-position funds for settlement, either from cash on hand or existing lines of credit, as they would for any settlement occurring within Clearstream or Euroclear. Under this approach, they may take on credit exposure to Clearstream or Euroclear until the book-entry certificates are credited to their accounts one day later.
As an alternative, if Clearstream or Euroclear has extended a line of credit to them, member organizations of Clearstream or Euroclear can elect not to pre-position funds and allow that credit line to be drawn upon to finance settlement. Under this procedure, the member organizations purchasing book-entry certificates would incur overdraft charges for one day, assuming they cleared the overdraft when the book-entry certificates were credited to their accounts. However, interest on the book-entry certificates would accrue from the value date. Therefore, in many cases the investment income on the book-entry certificates earned during that one-day period may substantially reduce or offset the amount of those overdraft charges, although this result will depend on the cost of funds of the respective member organization of Clearstream or Euroclear.
Since the settlement is taking place during New York business hours, Participants can employ their usual procedures for sending book-entry certificates to the respective depositary for the benefit of member organizations of Clearstream or Euroclear. The sale proceeds will be available to the DTC seller on the settlement date. Thus, to the Participant a cross-market transaction will settle no differently than a trade between two Participants.
Trading between Clearstream or Euroclear Seller and DTC Purchaser. Due to time zone differences in their favor, member organizations of Clearstream or Euroclear may employ their customary procedures for transactions in which book-entry certificates are to be transferred by the respective clearing system, through the respective depositary, to a Participant. The seller will send instructions to Clearstream or Euroclear through a member organization of Clearstream or Euroclear at least one business day prior to settlement. In these cases, Clearstream or Euroclear, as appropriate, will instruct the respective depositary to deliver the book-entry certificates to the Participant’s account against payment. Payment will include interest accrued on the book-entry certificates from and including the first day of the interest accrual period coinciding with or commencing in, as applicable, the calendar month in which the last coupon payment date occurs (or, if no coupon payment date has occurred, from and including the first day of the initial interest accrual period) to and excluding the settlement date, calculated on the basis of a year of 360 days consisting of twelve 30-day months. The payment will then be reflected in the account of the member organization of Clearstream or Euroclear the following day, and receipt of the cash proceeds in the account of that member organization of Clearstream or Euroclear would be back-valued to the value date, which would be the preceding day, when settlement occurred in New York. Should the member organization of Clearstream or Euroclear have a line of credit with its respective clearing system and elect to be in debit in anticipation of receipt of the sale proceeds in its account, the back-valuation will extinguish any overdraft charges incurred over the one-day period. If settlement is not completed on the
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intended value date, which means the trade fails, receipt of the cash proceeds in the account of the member organization of Clearstream or Euroclear would be valued instead as of the actual settlement date.
Finally, day traders that use Clearstream or Euroclear and that purchase book-entry certificates from Participants for delivery to member organizations of Clearstream or Euroclear should note that these trades would automatically fail on the sale side unless affirmative action were taken. At least three techniques should be readily available to eliminate this potential problem:
· | borrowing through Clearstream or Euroclear for one day, until the purchase side of the day trade is reflected in their Clearstream or Euroclear accounts, in accordance with the clearing system’s customary procedures; | |
· | borrowing the book-entry certificates in the United States from a Participant no later than one day prior to settlement, which would allow sufficient time for the book-entry certificates to be reflected in their Clearstream or Euroclear accounts in order to settle the sale side of the trade; or | |
· | staggering the value dates for the buy and sell sides of the trade so that the value date for the purchase from the Participant is at least one day prior to the value date for the sale to the member organization of Clearstream or Euroclear. |
Certain U.S. Federal Income Tax Documentation Requirements
A holder that is not a “United States person” (a “U.S. person”) within the meaning of Code Section 7701(a)(30) (a “non-U.S. holder”) holding a book-entry certificate through Clearstream, Euroclear or DTC may be subject to U.S. withholding tax unless such holder provides certain documentation to the issuer of such holder’s book-entry certificate, the paying agent or any other entity required to withhold tax (any of the foregoing, a “U.S. withholding agent”) establishing an exemption from withholding. A non-U.S. holder may be subject to withholding unless each U.S. withholding agent receives:
(a) from a non-U.S. holder that is an individual, and is eligible for the benefits of the portfolio interest exemption or an exemption (or reduced rate) based on a treaty, a duly completed and executed IRS Form W-8BEN (or any successor form);
(b) from a non-U.S. holder that is an entity for U.S. federal income tax purposes or is an individual, and is eligible for the benefits of the portfolio interest exemption or an exemption (or reduced rate) based on a treaty, a duly completed and executed IRS Form W-8BEN-E (or any successor form);
(c) from a non-U.S. holder that is eligible for an exemption on the basis that the holder’s income from the Certificate is effectively connected to its U.S. trade or business, a duly completed and executed IRS Form W-8ECI (or any successor form);
(d) from a non-U.S. holder that is classified as a partnership for U.S. federal income tax purposes, a duly completed and executed IRS Form W-8IMY (or any successor form) with all supporting documentation (as specified in the U.S. Treasury Regulations) required to substantiate exemptions from withholding on behalf of its partners; certain partnerships may enter into agreements with the Internal Revenue Service providing for different documentation requirements and it is recommended that such partnerships consult their tax advisors with respect to these certification rules;
(e) from a non-U.S. holder that is an intermediary (i.e., a person acting as a custodian, a broker, nominee or otherwise as an agent for the beneficial owner of a Certificate):
(i) if the intermediary is a “qualified intermediary” within the meaning of section 1.1441-1(e)(5)(ii) of the U.S. Treasury Regulations (a “qualified intermediary”), a duly completed and executed IRS Form W-8IMY (or any successor or substitute form)—
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(A) stating the name, permanent residence address and qualified intermediary employer identification number of the qualified intermediary and the country under the laws of which the qualified intermediary is created, incorporated or governed,
(B) certifying that the qualified intermediary has provided, or will provide, a withholding statement as required under section 1.1441-1(e)(5)(v) of the U.S. Treasury Regulations,
(1) certifying that, with respect to accounts it identifies on its withholding statement, the qualified intermediary is not acting for its own account but is acting as a qualified intermediary, and
(2) providing any other information, certifications, or statements that may be required by the Internal Revenue Service Form W-8IMY or accompanying instructions in addition to, or in lieu of, the information and certifications described in section 1.1441-1(e)(3)(ii) or 1.1441-1(e)(5)(v) of the U.S. Treasury Regulations; or
(C) if the intermediary is not a qualified intermediary (a “nonqualified intermediary”), a duly completed and executed IRS Form W-8IMY (or any successor or substitute form)—
(1) stating the name and permanent residence address of the nonqualified intermediary and the country under the laws of which the nonqualified intermediary is created, incorporated or governed,
(2) certifying that the nonqualified intermediary is not acting for its own account,
(3) certifying that the nonqualified intermediary has provided, or will provide, a withholding statement that is associated with the appropriate IRS Forms W-8 and W-9 required to substantiate exemptions from withholding on behalf of such nonqualified intermediary’s beneficial owners, and
(4) providing any other information, certifications or statements that may be required by the Internal Revenue Service Form W-8IMY or accompanying instructions in addition to, or in lieu of, the information, certifications, and statements described in section 1.1441-1(e)(3)(iii) or (iv) of the U.S. Treasury Regulations; or
(f) from a non-U.S. holder that is a trust, depending on whether the trust is classified for U.S. federal income tax purposes as the beneficial owner of the Certificate, either an IRS Form W-8BEN. W-8BEN-E or W-8IMY; any non-U.S. holder that is a trust should consult its tax advisors to determine which of these forms it should provide.
All non-U.S. holders will be required to update the above-listed forms and any supporting documentation in accordance with the requirements under the U.S. Treasury Regulations. These forms generally remain in effect for a period starting on the date the form is signed and ending on the last day of the third succeeding calendar year, unless a change in circumstances makes any information on the form incorrect. Under certain circumstances, an IRS Form W-8BEN or W-8-BEN-E, if furnished with a taxpayer identification number, remains in effect until the status of the beneficial owner changes, or a change in circumstances makes any information on the form incorrect.
In addition, all holders, including holders that are U.S. persons, holding book-entry certificates through Clearstream, Euroclear or DTC may be subject to backup withholding unless the holder—
· | provides the appropriate IRS Form W-8 (or any successor or substitute form), duly completed and executed, if the holder is a non-U.S. holder; | |
· | provides a duly completed and executed IRS Form W-9, if the holder is a U.S. person; or |
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· | can be treated as an “exempt recipient” within the meaning of section 1.6049-4(c)(1)(ii) of the U.S. Treasury Regulations (e.g., a corporation or a financial institution such as a bank). |
This summary does not deal with all of the aspects of U.S. federal income tax withholding or backup withholding that may be relevant to investors that are non-U.S. holders. Such holders are advised to consult their own tax advisors for specific tax advice concerning their holding and disposing of book-entry certificates.
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ANNEX D
DECREMENT TABLES
Percentages of the Initial Certificate Balance
of the Class A-1 Certificates at the Specified CPRs
0% CPR During Lock-Out, Defeasance, Yield Maintenance
and Prepayment Premium—Otherwise at Indicated CPR
Date | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR | |||||
Initial | 100% | 100% | 100% | 100% | 100% | |||||
October 2016 | 87% | 87% | 87% | 87% | 87% | |||||
October 2017 | 71% | 71% | 71% | 71% | 71% | |||||
October 2018 | 50% | 50% | 50% | 50% | 50% | |||||
October 2019 | 23% | 23% | 23% | 23% | 23% | |||||
October 2020 and thereafter | 0% | 0% | 0% | 0% | 0% | |||||
Weighted Average Life (in years) | 2.79 | 2.78 | 2.78 | 2.78 | 2.78 |
Percentages of the Initial Certificate Balance
of the Class A-2 Certificates at the Specified CPRs
0% CPR During Lock-Out, Defeasance, Yield Maintenance
and Prepayment Premium—Otherwise at Indicated CPR
Date | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR | |||||
Initial | 100% | 100% | 100% | 100% | 100% | |||||
October 2016 | 100% | 100% | 100% | 100% | 100% | |||||
October 2017 | 100% | 100% | 100% | 100% | 100% | |||||
October 2018 | 100% | 100% | 100% | 100% | 100% | |||||
October 2019 | 100% | 100% | 100% | 100% | 100% | |||||
October 2020 and thereafter | 0% | 0% | 0% | 0% | 0% | |||||
Weighted Average Life (in years) | 4.87 | 4.86 | 4.84 | 4.82 | 4.63 |
Percentages of the Initial Certificate Balance
of the Class A-SB Certificates at the Specified CPRs
0% CPR During Lock-Out, Defeasance, Yield Maintenance
and Prepayment Premium—Otherwise at Indicated CPR
Date | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR | |||||
Initial | 100% | 100% | 100% | 100% | 100% | |||||
October 2016 | 100% | 100% | 100% | 100% | 100% | |||||
October 2017 | 100% | 100% | 100% | 100% | 100% | |||||
October 2018 | 100% | 100% | 100% | 100% | 100% | |||||
October 2019 | 100% | 100% | 100% | 100% | 100% | |||||
October 2020 | 100% | 100% | 100% | 100% | 100% | |||||
October 2021 | 81% | 81% | 81% | 81% | 81% | |||||
October 2022 | 61% | 61% | 61% | 61% | 61% | |||||
October 2023 | 40% | 40% | 40% | 40% | 40% | |||||
October 2024 | 18% | 18% | 18% | 18% | 18% | |||||
October 2025 and thereafter | 0% | 0% | 0% | 0% | 0% | |||||
Weighted Average Life (in years) | 7.47 | 7.47 | 7.47 | 7.47 | 7.47 |
D-1 |
Percentages of the Initial Certificate Balance
of the Class A-3 Certificates at the Specified CPRs
0% CPR During Lock-Out, Defeasance, Yield Maintenance
and Prepayment Premium—Otherwise at Indicated CPR
Date | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR | |||||
Initial | 100% | 100% | 100% | 100% | 100% | |||||
October 2016 | 100% | 100% | 100% | 100% | 100% | |||||
October 2017 | 100% | 100% | 100% | 100% | 100% | |||||
October 2018 | 100% | 100% | 100% | 100% | 100% | |||||
October 2019 | 100% | 100% | 100% | 100% | 100% | |||||
October 2020 | 100% | 100% | 100% | 100% | 100% | |||||
October 2021 | 100% | 100% | 100% | 100% | 100% | |||||
October 2022 | 100% | 100% | 100% | 100% | 100% | |||||
October 2023 | 100% | 100% | 100% | 100% | 100% | |||||
October 2024 | 100% | 100% | 100% | 100% | 100% | |||||
October 2025 and thereafter | 0% | 0% | 0% | 0% | 0% | |||||
Weighted Average Life (in years) | 9.79 | 9.74 | 9.69 | 9.62 | 9.45 |
Percentages of the Initial Certificate Balance
of the Class A-4 Certificates at the Specified CPRs
0% CPR During Lock-Out, Defeasance, Yield Maintenance
and Prepayment Premium—Otherwise at Indicated CPR
Date | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR | |||||
Initial | 100% | 100% | 100% | 100% | 100% | |||||
October 2016 | 100% | 100% | 100% | 100% | 100% | |||||
October 2017 | 100% | 100% | 100% | 100% | 100% | |||||
October 2018 | 100% | 100% | 100% | 100% | 100% | |||||
October 2019 | 100% | 100% | 100% | 100% | 100% | |||||
October 2020 | 100% | 100% | 100% | 100% | 100% | |||||
October 2021 | 100% | 100% | 100% | 100% | 100% | |||||
October 2022 | 100% | 100% | 100% | 100% | 100% | |||||
October 2023 | 100% | 100% | 100% | 100% | 100% | |||||
October 2024 | 100% | 100% | 100% | 100% | 100% | |||||
October 2025 and thereafter | 0% | 0% | 0% | 0% | 0% | |||||
Weighted Average Life (in years) | 9.86 | 9.86 | 9.85 | 9.83 | 9.58 |
Percentages of the Initial Certificate Balance
of the Class A-M Certificates at the Specified CPRs
0% CPR During Lock-Out, Defeasance, Yield Maintenance
and Prepayment Premium—Otherwise at Indicated CPR
Date | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR | |||||
Initial | 100% | 100% | 100% | 100% | 100% | |||||
October 2016 | 100% | 100% | 100% | 100% | 100% | |||||
October 2017 | 100% | 100% | 100% | 100% | 100% | |||||
October 2018 | 100% | 100% | 100% | 100% | 100% | |||||
October 2019 | 100% | 100% | 100% | 100% | 100% | |||||
October 2020 | 100% | 100% | 100% | 100% | 100% | |||||
October 2021 | 100% | 100% | 100% | 100% | 100% | |||||
October 2022 | 100% | 100% | 100% | 100% | 100% | |||||
October 2023 | 100% | 100% | 100% | 100% | 100% | |||||
October 2024 | 100% | 100% | 100% | 100% | 100% | |||||
October 2025 and thereafter | 0% | 0% | 0% | 0% | 0% | |||||
Weighted Average Life (in years) | 9.86 | 9.86 | 9.86 | 9.86 | 9.67 |
D-2 |
Percentages of the Initial Certificate Balance
of the Class B Certificates at the Specified CPRs
0% CPR During Lock-Out, Defeasance, Yield Maintenance
and Prepayment Premium—Otherwise at Indicated CPR
Date | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR | |||||
Initial | 100% | 100% | 100% | 100% | 100% | |||||
October 2016 | 100% | 100% | 100% | 100% | 100% | |||||
October 2017 | 100% | 100% | 100% | 100% | 100% | |||||
October 2018 | 100% | 100% | 100% | 100% | 100% | |||||
October 2019 | 100% | 100% | 100% | 100% | 100% | |||||
October 2020 | 100% | 100% | 100% | 100% | 100% | |||||
October 2021 | 100% | 100% | 100% | 100% | 100% | |||||
October 2022 | 100% | 100% | 100% | 100% | 100% | |||||
October 2023 | 100% | 100% | 100% | 100% | 100% | |||||
October 2024 | 100% | 100% | 100% | 100% | 100% | |||||
October 2025 and thereafter | 0% | 0% | 0% | 0% | 0% | |||||
Weighted Average Life (in years) | 9.86 | 9.86 | 9.86 | 9.86 | 9.70 |
Percentages of the Initial Certificate Balance
of the Class C Certificates at the Specified CPRs
0% CPR During Lock-Out, Defeasance, Yield Maintenance
and Prepayment Premium—Otherwise at Indicated CPR
Date | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR | |||||
Initial | 100% | 100% | 100% | 100% | 100% | |||||
October 2016 | 100% | 100% | 100% | 100% | 100% | |||||
October 2017 | 100% | 100% | 100% | 100% | 100% | |||||
October 2018 | 100% | 100% | 100% | 100% | 100% | |||||
October 2019 | 100% | 100% | 100% | 100% | 100% | |||||
October 2020 | 100% | 100% | 100% | 100% | 100% | |||||
October 2021 | 100% | 100% | 100% | 100% | 100% | |||||
October 2022 | 100% | 100% | 100% | 100% | 100% | |||||
October 2023 | 100% | 100% | 100% | 100% | 100% | |||||
October 2024 | 100% | 100% | 100% | 100% | 100% | |||||
October 2025 and thereafter | 0% | 0% | 0% | 0% | 0% | |||||
Weighted Average Life (in years) | 9.86 | 9.86 | 9.86 | 9.86 | 9.70 |
D-3 |
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ANNEX E
PRICE/YIELD TABLES
Pre-Tax Yield to Maturity (CBE) and Weighted Average Life
for the Class A-1 Certificates at the Specified CPRs
0% CPR During Lock-Out, Defeasance, Yield Maintenance and Prepayment
Premium—Otherwise at Indicated CPR
Assumed Price | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR | |||||
% | % | % | % | % | % | |||||
% | % | % | % | % | % | |||||
% | % | % | % | % | % | |||||
Weighted Average Life (years) |
Pre-Tax Yield to Maturity (CBE) and Weighted Average Life
for the Class A-2 Certificates at the Specified CPRs
0% CPR During Lock-Out, Defeasance, Yield Maintenance and Prepayment
Premium—Otherwise at Indicated CPR
Assumed Price | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR | |||||
% | % | % | % | % | % | |||||
% | % | % | % | % | % | |||||
% | % | % | % | % | % | |||||
Weighted Average Life (years) |
Pre-Tax Yield to Maturity (CBE) and Weighted Average Life
for the Class A-SB Certificates at the Specified CPRs
0% CPR During Lock-Out, Defeasance, Yield Maintenance and Prepayment
Premium—Otherwise at Indicated CPR
Assumed Price | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR | |||||
% | % | % | % | % | % | |||||
% | % | % | % | % | % | |||||
% | % | % | % | % | % | |||||
Weighted Average Life (years) |
Pre-Tax Yield to Maturity (CBE) and Weighted Average Life
for the Class A-3 Certificates at the Specified CPRs
0% CPR During Lock-Out, Defeasance, Yield Maintenance and Prepayment
Premium—Otherwise at Indicated CPR
Assumed Price | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR | |||||
% | % | % | % | % | % | |||||
% | % | % | % | % | % | |||||
% | % | % | % | % | % | |||||
Weighted Average Life (years) |
E-1 |
Pre-Tax Yield to Maturity (CBE) and Weighted Average Life
for the Class A-4 Certificates at the Specified CPRs
0% CPR During Lock-Out, Defeasance, Yield Maintenance and Prepayment
Premium—Otherwise at Indicated CPR
Assumed Price | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR | |||||
% | % | % | % | % | % | |||||
% | % | % | % | % | % | |||||
% | % | % | % | % | % | |||||
Weighted Average Life (years) |
Pre-Tax Yield to Maturity (CBE) for the Class X-A Certificates at the Specified CPRs
0% CPR During Lock-Out, Defeasance, Yield Maintenance and Prepayment
Premium—Otherwise at Indicated CPR
Assumed Price | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR | |||||
% | % | % | % | % | % | |||||
% | % | % | % | % | % | |||||
% | % | % | % | % | % |
Pre-Tax Yield to Maturity (CBE) and Weighted Average Life
for the Class A-M Certificates at the Specified CPRs
0% CPR During Lock-Out, Defeasance, Yield Maintenance and Prepayment
Premium—Otherwise at Indicated CPR
Assumed Price | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR | |||||
% | % | % | % | % | % | |||||
% | % | % | % | % | % | |||||
% | % | % | % | % | % | |||||
Weighted Average Life (years) |
Pre-Tax Yield to Maturity (CBE) and Weighted Average Life
for the Class B Certificates at the Specified CPRs
0% CPR During Lock-Out, Defeasance, Yield Maintenance and Prepayment
Premium—Otherwise at Indicated CPR
Assumed Price | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR | |||||
% | % | % | % | % | % | |||||
% | % | % | % | % | % | |||||
% | % | % | % | % | % | |||||
Weighted Average Life (years) |
Pre-Tax Yield to Maturity (CBE) and Weighted Average Life
for the Class C Certificates at the Specified CPRs
0% CPR During Lock-Out, Defeasance, Yield Maintenance and Prepayment
Premium—Otherwise at Indicated CPR
Assumed Price | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR | |||||
% | % | % | % | % | % | |||||
% | % | % | % | % | % | |||||
% | % | % | % | % | % | |||||
Weighted Average Life (years) |
E-2
ANNEX F
MORTGAGE LOAN SELLER REPRESENTATIONS AND WARRANTIES
Each Mortgage Loan Seller will in its respective Mortgage Loan Purchase Agreement make, with respect to each Mortgage Loan sold by it that is included in the Issuing Entity, representations and warranties generally to the effect set forth below, as of the Closing Date, or as of such other date specifically provided in the applicable representation and warranty, subject to exceptions set forth in Annex G to this free writing prospectus. Capitalized terms used but not otherwise defined in this Annex F will have the meanings set forth in this free writing prospectus or, if not defined in this free writing prospectus, in the related Mortgage Loan Purchase Agreement.
Each Mortgage Loan Purchase Agreement, together with the related representations and warranties, serves to contractually allocate risk between the related Mortgage Loan Seller, on the one hand, and the Issuing Entity, on the other. We present the related representations and warranties set forth below for the sole purpose of describing some of the terms and conditions of that risk allocation. The presentation of representations and warranties below is not intended as statements regarding the actual characteristics of the Mortgage Loans, the Mortgaged Properties or other matters. We cannot assure you that the Mortgage Loans actually conform to the statements made in the representations and warranties that we present below.
(1) | Whole Loan; Ownership of Mortgage Loans. Except with respect to a Mortgage Loan that is part of a Loan Combination, each Mortgage Loan is a whole loan and not a participation interest in a Mortgage Loan. At the time of the sale, transfer and assignment to Purchaser, no Note or Mortgage was subject to any assignment (other than assignments to the Seller), participation or pledge, and the Seller had good title to, and was the sole owner of, each Mortgage Loan free and clear of any and all liens, charges, pledges, encumbrances, participations, any other ownership interests on, in or to such Mortgage Loan other than any servicing rights appointment or similar agreement. Seller has full right and authority to sell, assign and transfer each Mortgage Loan, and the assignment to Purchaser constitutes a legal, valid and binding assignment of such Mortgage Loan free and clear of any and all liens, pledges, charges or security interests of any nature encumbering such Mortgage Loan. |
(2) | Loan Document Status. Each related Note, Mortgage, Assignment of Leases, Rents and Profits (if a separate instrument), guaranty and other agreement executed by or on behalf of the related Borrower, guarantor or other obligor in connection with such Mortgage Loan is the legal, valid and binding obligation of the related Borrower, guarantor or other obligor (subject to any non-recourse provisions contained in any of the foregoing agreements and any applicable state anti-deficiency or market value limit deficiency legislation), as applicable, and is enforceable in accordance with its terms, except (i) as such enforcement may be limited by (a) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (b) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law) and (ii) that certain provisions in such Loan Documents (including, without limitation, provisions requiring the payment of default interest, late fees or prepayment/yield maintenance fees, charges and/or premiums) are, or may be, further limited or rendered unenforceable by or under applicable law, but (subject to the limitations set forth in clause (i) above) such limitations or unenforceability will not render such Loan Documents invalid as a whole or materially interfere with the mortgagee’s realization of the principal benefits and/or security provided thereby (clauses (i) and (ii) collectively, the “Standard Qualifications”). |
Except as set forth in the immediately preceding sentences, there is no valid offset, defense, counterclaim or right of rescission available to the related Borrower with respect to any of the related Notes, Mortgages or other Loan Documents, including, without limitation, any such valid offset, defense, counterclaim or right based on intentional fraud by Seller in connection with the origination of the Mortgage Loan, that would deny the mortgagee the principal benefits intended to be provided by the Note, Mortgage or other Loan Documents.
F-1 |
(3) | Mortgage Provisions. The Loan Documents for each Mortgage Loan contain provisions that render the rights and remedies of the holder thereof adequate for the practical realization against the Mortgaged Property of the principal benefits of the security intended to be provided thereby, including realization by judicial or, if applicable, non-judicial foreclosure subject to the limitations set forth in the Standard Qualifications. |
(4) | Mortgage Status; Waivers and Modifications. Since origination and except by written instruments set forth in the related Mortgage File or as otherwise provided in the related Mortgage Loan documents (a) the material terms of such Mortgage, Note, Mortgage Loan guaranty, and related Loan Documents have not been waived, impaired, modified, altered, satisfied, canceled, subordinated or rescinded in any respect; (b) no related Mortgaged Property or any portion thereof has been released from the lien of the related Mortgage in any manner which materially interferes with the security intended to be provided by such Mortgage or the use or operation of the remaining portion of such Mortgaged Property; and (c) neither the related Borrower nor the related guarantor has been released from its material obligations under the Mortgage Loan. With respect to each Mortgage Loan, except as contained in a written document included in the Mortgage File, there have been no modifications, amendments or waivers, that could be reasonably expected to have a material adverse effect on such Mortgage Loan consented to by Mortgage Loan Seller on or after September 24, 2015. |
(5) | Lien; Valid Assignment. Subject to the Standard Qualifications, each assignment of Mortgage and assignment of Assignment of Leases, Rents and Profits to the Trust constitutes a legal, valid and binding assignment to the Trust. Each related Mortgage and Assignment of Leases, Rents and Profits is freely assignable without the consent of the related Borrower. Each related Mortgage is a legal, valid and enforceable first lien on the related Borrower’s fee or leasehold interest in the Mortgaged Property in the principal amount of such Mortgage Loan or allocated loan amount (subject only to Permitted Encumbrances (as defined below) and the exceptions to paragraph (6) set forth in Annex G (each such exception, a “Title Exception”)), except as the enforcement thereof may be limited by the Standard Qualifications. Such Mortgaged Property (subject to and excepting Permitted Encumbrances and the Title Exceptions) as of origination was, and as of the Cut-off Date, to the Seller’s knowledge, is free and clear of any recorded mechanics’ liens, recorded materialmen’s liens and other recorded encumbrances which are prior to or equal with the lien of the related Mortgage, except those which are bonded over, escrowed for or insured against by a lender’s title insurance policy (as described below), and, to the Seller’s knowledge and subject to the rights of tenants (as tenants only) (subject to and excepting Permitted Encumbrances and the Title Exceptions), no rights exist which under law could give rise to any such lien or encumbrance that would be prior to or equal with the lien of the related Mortgage, except those which are bonded over, escrowed for or insured against by a lender’s title insurance policy (as described below). Notwithstanding anything herein to the contrary, no representation is made as to the perfection of any security interest in rents or other personal property to the extent that possession or control of such items or actions other than the filing of Uniform Commercial Code (“UCC”) financing statements is required in order to effect such perfection. |
(6) | Permitted Liens; Title Insurance. Each Mortgaged Property securing a Mortgage Loan is covered by an American Land Title Association loan title insurance policy or a comparable form of loan title insurance policy approved for use in the applicable jurisdiction (or, if such policy is yet to be issued, by a pro forma policy, a preliminary title policy with escrow instructions or a “marked up” commitment, in each case binding on the title insurer) (the “Title Policy”) in the original principal amount of such Mortgage Loan (or with respect to a Mortgage Loan secured by multiple properties, an amount equal to at least the allocated loan amount with respect to the Title Policy for each such property) after all advances of principal (including any advances held in escrow or reserves), that insures for the benefit of the owner of the indebtedness secured by the Mortgage, the first priority lien of the Mortgage, which lien is subject only to (a) the lien of current real property taxes, water charges, sewer rents and assessments not yet due and payable; (b) covenants, conditions and restrictions, rights of way, easements and other matters of public |
F-2 |
record; (c) the exceptions (general and specific) and exclusions set forth in such Title Policy; (d) other matters to which like properties are commonly subject; (e) the rights of tenants (as tenants only) under leases (including subleases) pertaining to the related Mortgaged Property and condominium declarations; and (f) if the related Mortgage Loan is cross-collateralized and cross-defaulted with another Mortgage Loan (each a “Crossed Mortgage Loan”), the lien of the Mortgage for another Mortgage Loan that is cross-collateralized and cross-defaulted with such Crossed Mortgage Loan,provided that none of which items (a) through (f), individually or in the aggregate, materially and adversely interferes with the value or current use of the Mortgaged Property or the security intended to be provided by such Mortgage or the Borrower’s ability to pay its obligations when they become due (collectively, the “Permitted Encumbrances”). Except as contemplated byclause (f) of the preceding sentence, none of the Permitted Encumbrances are mortgage liens that are senior to or coordinate and co-equal with the lien of the related Mortgage. Such Title Policy (or, if it has yet to be issued, the coverage to be provided thereby) is in full force and effect, all premiums thereon have been paid and no claims have been made by the Seller thereunder and no claims have been paid thereunder. Neither the Seller, nor to the Seller’s knowledge, any other holder of the Mortgage Loan, has done, by act or omission, anything that would materially impair the coverage under such Title Policy. | ||
(7) | Junior Liens. It being understood that B notes secured by the same Mortgage as a Mortgage Loan are not subordinate mortgages or junior liens, except for any Crossed Mortgage Loan, there are, as of origination, and to the Seller’s knowledge, as of the Cut-off Date, no subordinate mortgages or junior liens securing the payment of money encumbering the related Mortgaged Property (other than Permitted Encumbrances and the Title Exceptions, taxes and assessments, mechanics and materialmen’s liens (which are the subject of the representation in paragraph (5) above), and equipment and other personal property financing). Except as set forth in Schedule G-1 to Annex G, the Seller has no knowledge of any mezzanine debt secured directly by interests in the related Borrower. |
(8) | Assignment of Leases, Rents and Profits. There exists as part of the related Mortgage File an Assignment of Leases, Rents and Profits (either as a separate instrument or incorporated into the related Mortgage). Subject to the Permitted Encumbrances and the Title Exceptions, each related Assignment of Leases, Rents and Profits creates a valid first-priority collateral assignment of, or a valid first-priority lien or security interest in, rents and certain rights under the related lease or leases, subject only to a license granted to the related Borrower to exercise certain rights and to perform certain obligations of the lessor under such lease or leases, including the right to operate the related leased property, except as the enforcement thereof may be limited by the Standard Qualifications. The related Mortgage or related Assignment of Leases, Rents and Profits, subject to applicable law, provides that, upon an event of default under the Mortgage Loan, a receiver is permitted to be appointed for the collection of rents or for the related mortgagee to enter into possession to collect the rents or for rents to be paid directly to the mortgagee. |
(9) | UCC Filings. If the related Mortgaged Property is operated as a hospitality property, the Seller has filed and/or recorded or caused to be filed and/or recorded (or, if not filed and/or recorded, have been submitted in proper form for filing and/or recording), UCC financing statements in the appropriate public filing and/or recording offices necessary at the time of the origination of the Mortgage Loan to perfect a valid security interest in all items of physical personal property reasonably necessary to operate such Mortgaged Property owned by such Borrower and located on the related Mortgaged Property (other than any non-material personal property, any personal property subject to a purchase money security interest, a sale and leaseback financing arrangement as permitted under the terms of the related Mortgage Loan documents or any other personal property leases applicable to such personal property), to the extent perfection may be effected pursuant to applicable law by recording or filing, as the case may be. Subject to the Standard Qualifications, each related Mortgage (or equivalent document) creates a valid and enforceable lien and security interest on the items of personalty described above. No representation is made as to the perfection of any security interest in rents or other personal |
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property to the extent that possession or control of such items or actions other than the filing of UCC financing statements are required in order to effect such perfection. | ||
(10) | Condition of Property. Seller or the originator of the Mortgage Loan inspected or caused to be inspected each related Mortgaged Property within six months of origination of the Mortgage Loan and within twelve months of the Cut-off Date. |
An engineering report or property condition assessment was prepared in connection with the origination of each Mortgage Loan no more than twelve months prior to the Cut-off Date. To the Seller’s knowledge, based solely upon due diligence customarily performed in connection with the origination of comparable mortgage loans, as of the Closing Date, each related Mortgaged Property was free and clear of any material damage (other than (i) any damage or deficiency that is estimated to cost less than $50,000 to repair, (ii) any deferred maintenance for which escrows were established at origination and (iii) any damage fully covered by insurance) that would affect materially and adversely the use or value of such Mortgaged Property as security for the Mortgage Loan.
(11) | Taxes and Assessments. All taxes, governmental assessments and other outstanding governmental charges (including, without limitation, water and sewage charges), or installments thereof, that could be a lien on the related Mortgaged Property that would be of equal or superior priority to the lien of the Mortgage and that prior to the Cut-off Date have become delinquent in respect of each related Mortgaged Property have been paid, or an escrow of funds has been established in an amount sufficient to cover such payments and reasonably estimated interest and penalties, if any, thereon. For purposes of this representation and warranty, real estate taxes and governmental assessments and other outstanding governmental charges and installments thereof shall not be considered delinquent until the earlier of (a) the date on which interest and/or penalties would first be payable thereon and (b) the date on which enforcement action is entitled to be taken by the related taxing authority. |
(12) | Condemnation. As of the date of origination and to the Seller’s knowledge as of the Cut-off Date, there is no proceeding pending, and, to the Seller’s knowledge as of the date of origination and as of the Cut-off Date, there is no proceeding threatened, for the total or partial condemnation of such Mortgaged Property that would have a material adverse effect on the value, use or operation of the Mortgaged Property. |
(13) | Actions Concerning Mortgage Loan. As of the date of origination and to the Seller’s knowledge as of the Cut-off Date, there was no pending or filed action, suit or proceeding, arbitration or governmental investigation involving any Borrower, guarantor, or Borrower’s interest in the Mortgaged Property, an adverse outcome of which would reasonably be expected to materially and adversely affect (a) such Borrower’s title to the Mortgaged Property, (b) the validity or enforceability of the Mortgage, (c) such Borrower’s ability to perform under the related Mortgage Loan, (d) such guarantor’s ability to perform under the related guaranty, (e) the principal benefit of the security intended to be provided by the Mortgage Loan documents or (f) the current principal use of the Mortgaged Property. |
(14) | Escrow Deposits. All escrow deposits and payments required to be escrowed with lender pursuant to each Mortgage Loan are in the possession, or under the control, of the Seller or its servicer, and there are no deficiencies (subject to any applicable grace or cure periods) in connection therewith, and all such escrows and deposits (or the right thereto) that are required to be escrowed with lender under the related Loan Documents are being conveyed by the Seller to Purchaser or its servicer. |
(15) | No Holdbacks. The Stated Principal Balance as of the Cut-off Date of the Mortgage Loan set forth on the mortgage loan schedules attached asExhibit A to the Mortgage Loan Purchase Agreement has been fully disbursed as of the Closing Date and there is no requirement for future advances thereunder (except in those cases where the full amount of the Mortgage Loan has been disbursed but a portion thereof is being held in escrow or reserve accounts pending the |
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satisfaction of certain conditions relating to leasing, repairs or other matters with respect to the related Mortgaged Property, the Borrower or other considerations determined by Seller to merit such holdback). | ||
(16) | Insurance. Each related Mortgaged Property is, and is required pursuant to the related Mortgage to be, insured by a property insurance policy providing coverage for loss in accordance with coverage found under a “special cause of loss form” or “all risk form” that includes replacement cost valuation issued by an insurer meeting the requirements of the related Loan Documents and having a claims-paying or financial strength rating of any one of the following: (i) at least “A-:VIII” from A.M. Best Company, (ii) at least “A3” (or the equivalent) from Moody’s Investors Service, Inc. or (iii) at least “A-” from Standard & Poor’s Ratings Services (collectively the “Insurance Rating Requirements”), in an amount (subject to a customary deductible) not less than the lesser of (1) the original principal balance of the Mortgage Loan and (2) the full insurable value on a replacement cost basis of the improvements, furniture, furnishings, fixtures and equipment owned by the borrower and included in the Mortgaged Property (with no deduction for physical depreciation), but, in any event, not less than the amount necessary or containing such endorsements as are necessary to avoid the operation of any coinsurance provisions with respect to the related Mortgaged Property. |
Each related Mortgaged Property is also covered, and required to be covered pursuant to the related Loan Documents, by business interruption or rental loss insurance which (subject to a customary deductible) covers a period of not less than 12 months (or with respect to each Mortgage Loan on a single asset with a principal balance of $50 million or more, 18 months).
If any material part of the improvements, exclusive of a parking lot, located on a Mortgaged Property is in an area identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards, the related Borrower is required to maintain insurance in the maximum amount available under the National Flood Insurance Program.
If the Mortgaged Property is located within 25 miles of the coast of the Gulf of Mexico or the Atlantic coast of Florida, Georgia, South Carolina or North Carolina, the related Borrower is required to maintain coverage for windstorm and/or windstorm related perils and/or “named storms” issued by an insurer meeting the Insurance Rating Requirements or endorsement covering damage from windstorm and/or windstorm related perils and/or named storms.
The Mortgaged Property is covered, and required to be covered pursuant to the related Loan Documents, by a commercial general liability insurance policy issued by an insurer meeting the Insurance Rating Requirements including coverage for property damage, contractual damage and personal injury (including bodily injury and death) in amounts as are generally required by the Seller for loans originated for securitization, and in any event not less than $1 million per occurrence and $2 million in the aggregate.
An architectural or engineering consultant has performed an analysis of each of the Mortgaged Properties located in seismic zones 3 or 4 in order to evaluate the structural and seismic condition of such property, for the sole purpose of assessing either the scenario expected limit (“SEL”) or the probable maximum loss (“PML”) for the Mortgaged Property in the event of an earthquake. In such instance, the SEL or PML, as applicable, was based on a 475-year return period, an exposure period of 50 years and a 10% probability of exceedance. If the resulting report concluded that the SEL or PML, as applicable, would exceed 20% of the amount of the replacement costs of the improvements, earthquake insurance on such Mortgaged Property was obtained by an insurer rated at least “A:VIII” by A.M. Best Company or “A3” (or the equivalent) from Moody’s Investors Service, Inc. or “A-” by Standard & Poor’s Ratings Services in an amount not less than 100% of the SEL or PML, as applicable.
The Loan Documents require insurance proceeds in respect of a property loss to be applied either (a) to the repair or restoration of all or part of the related Mortgaged Property, with respect
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to all property losses in excess of 5% of the then outstanding principal amount of the related Mortgage Loan (or Loan Combination, if applicable), the lender (or a trustee appointed by it) having the right to hold and disburse such proceeds as the repair or restoration progresses, or (b) to the payment of the outstanding principal balance of such Mortgage Loan (or Loan Combination, if applicable) together with any accrued interest thereon.
All premiums on all insurance policies referred to in this section required to be paid as of the Cut-off Date have been paid, and such insurance policies name the lender under the Mortgage Loan and its successors and assigns as a loss payee under a mortgagee endorsement clause or, in the case of the general liability insurance policy, as named or additional insured. Such insurance policies will inure to the benefit of the Trustee (or, in the case of a Mortgage Loan that is a Non-Serviced Mortgage Loan, the applicable Other Trustee). Each related Mortgage Loan obligates the related Borrower to maintain all such insurance and, at such Borrower’s failure to do so, authorizes the lender to maintain such insurance at the Borrower’s cost and expense and to charge such Borrower for related premiums. All such insurance policies (other than commercial liability policies) require at least 10 days’ prior notice to the lender of termination or cancellation arising because of nonpayment of a premium and at least 30 days’ prior notice to the lender of termination or cancellation (or such lesser period, not less than 10 days, as may be required by applicable law) arising for any reason other than non-payment of a premium and no such notice has been received by Seller.
(17) | Access; Utilities; Separate Tax Lots. Each Mortgaged Property (a) is located on or adjacent to a public road and has direct legal access to such road, or has access via an irrevocable easement or irrevocable right of way permitting ingress and egress to/from a public road, (b) is served by or has uninhibited access rights to public or private water and sewer (or well and septic) and all required utilities, all of which are appropriate for the current use of the Mortgaged Property, and (c) constitutes one or more separate tax parcels which do not include any property which is not part of the Mortgaged Property or is subject to an endorsement under the related Title Policy insuring the Mortgaged Property, or in certain cases, an application has been, or will be, made to the applicable governing authority for creation of separate tax lots, in which case the Mortgage Loan requires the Borrower to escrow an amount sufficient to pay taxes for the existing tax parcel of which the Mortgaged Property is a part until the separate tax lots are created. |
(18) | No Encroachments. To Seller’s knowledge based solely on surveys obtained in connection with origination and the lender’s Title Policy (or, if such policy is not yet issued, a pro forma title policy, a preliminary title policy with escrow instructions or a “marked up” commitment) obtained in connection with the origination of each Mortgage Loan, all material improvements that were included for the purpose of determining the appraised value of the related Mortgaged Property at the time of the origination of such Mortgage Loan are within the boundaries of the related Mortgaged Property, except encroachments that do not materially and adversely affect the value or current use of such Mortgaged Property or for which insurance or endorsements were obtained under the Title Policy. No improvements on adjoining parcels encroach onto the related Mortgaged Property except for encroachments that do not materially and adversely affect the value or current use of such Mortgaged Property or for which insurance or endorsements were obtained under the Title Policy. No improvements encroach upon any easements except for encroachments the removal of which would not materially and adversely affect the value or current use of such Mortgaged Property or for which insurance or endorsements obtained with respect to the Title Policy. |
(19) | No Contingent Interest or Equity Participation. No Mortgage Loan has a shared appreciation feature, any other contingent interest feature or a negative amortization feature (except that an ARD Loan may provide for the accrual of the portion of interest in excess of the rate in effect prior to the Anticipated Repayment Date) or an equity participation by Seller. |
(20) | REMIC. The Mortgage Loan is a “qualified mortgage” within the meaning of Code Section 860G(a)(3) (but determined without regard to the rule in the U.S. Department of Treasury |
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Regulations (the “Treasury Regulations”) Section 1.860G-2(f)(2) that treats certain defective mortgage loans as qualified mortgages), and, accordingly, (A) the issue price of the Mortgage Loan to the related Borrower at origination did not exceed the non-contingent principal amount of the Mortgage Loan and (B) either: (a) such Mortgage Loan is secured by an interest in real property (including buildings and structural components thereof, but excluding personal property) having a fair market value (i) at the date the Mortgage Loan was originated at least equal to 80% of the adjusted issue price of the Mortgage Loan (or Loan Combination, as applicable) on such date or (ii) at the Closing Date at least equal to 80% of the adjusted issue price of the Mortgage Loan (or Loan Combination, as applicable) on such date,provided that for purposes hereof, the fair market value of the real property interest must first be reduced by (A) the amount of any lien on the real property interest that is senior to the Mortgage Loan and (B) a proportionate amount of any lien that is in parity with the Mortgage Loan; or (b) substantially all of the proceeds of such Mortgage Loan were used to acquire, improve or protect the real property which served as the only security for such Mortgage Loan (other than a recourse feature or other third-party credit enhancement within the meaning of Section 1.860G-2(a)(1)(ii) of the Treasury Regulations). If the Mortgage Loan was “significantly modified” prior to the Closing Date so as to result in a taxable exchange under Code Section 1001, it either (x) was modified as a result of the default or reasonably foreseeable default of such Mortgage Loan or (y) satisfies the provisions of either sub-clause (B)(a)(i) above (substituting the date of the last such modification for the date the Mortgage Loan was originated) or sub-clause (B)(a)(ii), including the proviso thereto. Any prepayment premium and yield maintenance charges applicable to the Mortgage Loan constitute “customary prepayment penalties” within the meaning of Section 1.860G-1(b)(2) of the Treasury Regulations. All terms used in this paragraph shall have the same meanings as set forth in the related Treasury Regulations. | ||
(21) | Compliance with Usury Laws. The Mortgage Rate (exclusive of any default interest, late charges, yield maintenance charge, or prepayment premiums) of such Mortgage Loan complied as of the date of origination with, or was exempt from, applicable state or federal laws, regulations and other requirements pertaining to usury. |
(22) | Authorized to do Business. To the extent required under applicable law, as of the Cut-off Date or as of the date that such entity held the Note, each holder of the Note was authorized to transact and do business in the jurisdiction in which each related Mortgaged Property is located, or the failure to be so authorized does not materially and adversely affect the enforceability of such Mortgage Loan by the Trust. |
(23) | Trustee under Deed of Trust. With respect to each Mortgage which is a deed of trust, as of the date of origination and, to the Seller’s knowledge, as of the Closing Date, a trustee, duly qualified under applicable law to serve as such, currently so serves and is named in the deed of trust or has been substituted in accordance with the Mortgage and applicable law or may be substituted in accordance with the Mortgage and applicable law by the related mortgagee. |
(24) | Local Law Compliance. To the Seller’s knowledge, based upon any of a letter from any governmental authorities, a legal opinion, an architect’s letter, a zoning consultant’s report, an endorsement to the related Title Policy, or other affirmative investigation of local law compliance consistent with the investigation conducted by the Seller for similar commercial, multifamily or, if applicable, manufactured housing community mortgage loans intended for securitization, with respect to the improvements located on or forming part of each Mortgaged Property securing a Mortgage Loan as of the date of origination of such Mortgage Loan and as of the Cut-off Date, there are no material violations of applicable zoning ordinances, building codes and land laws (collectively “Zoning Regulations”) other than those which (i) constitute a legal non-conforming use or structure, as to which as the Mortgaged Property may be restored or repaired to the full extent necessary to maintain the use of the structure immediately prior to a casualty or the inability to restore or repair to the full extent necessary to maintain the use or structure immediately prior to the casualty would not materially and adversely affect the use or operation of the Mortgaged Property, (ii) are insured by the Title Policy or other insurance policy, (iii) are |
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insured by law and ordinance insurance coverage in amounts customarily required by the Seller for loans originated for securitization that provides coverage for additional costs to rebuild and/or repair the property to current Zoning Regulations or (iv) would not have a material adverse effect on the Mortgage Loan. The terms of the Loan Documents require the Borrower to comply in all material respects with all applicable governmental regulations, zoning and building laws. | ||
(25) | Licenses and Permits. Each Borrower covenants in the Loan Documents that it shall keep all material licenses, permits and applicable governmental authorizations necessary for its operation of the Mortgaged Property in full force and effect, and to the Seller’s knowledge based upon a letter from any government authorities or other affirmative investigation of local law compliance consistent with the investigation conducted by the Seller for similar commercial, multifamily or, if applicable, manufactured housing community mortgage loans intended for securitization, all such material licenses, permits and applicable governmental authorizations are in effect. The Mortgage Loan requires the related Borrower to be qualified to do business in the jurisdiction in which the related Mortgaged Property is located. |
(26) | Recourse Obligations. The Loan Documents for each Mortgage Loan provide that (a) the related Borrower and at least one individual or entity shall be fully liable for actual losses, liabilities, costs and damages arising from certain acts of the related Borrower and/or its principals specified in the related Loan Documents, which acts generally include the following: (i) acts of fraud or intentional material misrepresentation, (ii) misapplication or misappropriation of rents, insurance proceeds or condemnation awards, (iii) intentional material physical waste of the Mortgaged Property, and (iv) any breach of the environmental covenants contained in the related Loan Documents, and (b) the Mortgage Loan shall become full recourse to the related Borrower and at least one individual or entity, if the related Borrower files a voluntary petition under federal or state bankruptcy or insolvency law. |
(27) | Mortgage Releases. The terms of the related Mortgage or related Loan Documents do not provide for release of any material portion of the Mortgaged Property from the lien of the Mortgage except (a) a partial release, accompanied by principal repayment, or partial Defeasance (as defined in paragraph (32)), of not less than a specified percentage at least equal to the lesser of (i) 110% of the related allocated loan amount of such portion of the Mortgaged Property and (ii) the outstanding principal balance of the Mortgage Loan, (b) upon payment in full of such Mortgage Loan, (c) upon a Defeasance (as defined in paragraph (32)), (d) releases of out-parcels that are unimproved or other portions of the Mortgaged Property which will not have a material adverse effect on the underwritten value of the Mortgaged Property and which were not afforded any value in the appraisal obtained at the origination of the Mortgage Loan and are not necessary for physical access to the Mortgaged Property or compliance with zoning requirements, or (e) as required pursuant to an order of condemnation. With respect to any partial release under the preceding clauses (a) or (d), either: (x) such release of collateral (i) would not constitute a “significant modification” of the subject Mortgage Loan within the meaning of Section 1.860G-2(b)(2) of the Treasury Regulations and (ii) would not cause the subject Mortgage Loan to fail to be a “qualified mortgage” within the meaning of Code Section 860G(a)(3)(A); or (y) the mortgagee or servicer can, in accordance with the related Loan Documents, condition such release of collateral on the related Borrower’s delivery of an opinion of tax counsel to the effect specified in the immediately preceding clause (x). For purposes of the preceding clause (x), if the fair market value of the real property constituting such Mortgaged Property after the release is not equal to at least 80% of the principal balance of the Mortgage Loan (or Loan Combination, as applicable) outstanding after the release, the Borrower is required to make a payment of principal in an amount not less than the amount required by the REMIC Provisions. |
In the case of any Mortgage Loan, in the event of a taking of any portion of a Mortgaged Property by a State or any political subdivision or authority thereof, whether by legal proceeding or by agreement, the Borrower can be required to pay down the principal balance of the Mortgage Loan in an amount not less than the amount required by the REMIC Provisions and, to such extent,
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condemnation proceeds may not be required to be applied to the restoration of the Mortgaged Property or released to the Borrower, if, immediately after the release of such portion of the Mortgaged Property from the lien of the Mortgage (but taking into account the planned restoration) the fair market value of the real property constituting the remaining Mortgaged Property is not equal to at least 80% of the remaining principal balance of the Mortgage Loan (or Loan Combination, as applicable).
No Mortgage Loan that is secured by more than one Mortgaged Property or that is a Crossed Mortgage Loan permits the release of cross-collateralization of the related Mortgaged Properties or a portion thereof, including due to a partial condemnation, other than in compliance with the loan-to-value ratio and other requirements of the REMIC Provisions.
(28) | Financial Reporting and Rent Rolls. Each Mortgage requires the Borrower to provide the owner or holder of the Mortgage with quarterly (other than for single-tenant properties) and annual operating statements, and quarterly (other than for single-tenant properties) rent rolls for properties that have leases contributing more than 5% of the in-place base rent and annual financial statements, which annual financial statements with respect to each Mortgage Loan with more than one Borrower are in the form of an annual combined balance sheet of the Borrower entities (and no other entities), together with the related combined statements of operations, members’ capital and cash flows, including a combining balance sheet and statement of income for the Mortgaged Properties on a combined basis. |
(29) | Acts of Terrorism Exclusion. With respect to each Mortgage Loan over $20 million, the related special-form all-risk insurance policy and business interruption policy (issued by an insurer meeting the Insurance Rating Requirements) do not specifically exclude Acts of Terrorism, as defined in the Terrorism Risk Insurance Act of 2002, as amended by the Terrorism Risk Insurance Program Reauthorization Act of 2007 and the Terrorism Risk Insurance Program Reauthorization Act of 2015 (collectively referred to as “TRIA”), from coverage, or if such coverage is excluded, it is covered by a separate terrorism insurance policy. With respect to each other Mortgage Loan, the related special-form all-risk insurance policy and business interruption policy (issued by an insurer meeting the Insurance Rating Requirements) did not, as of the date of origination of the Mortgage Loan, and, to Seller’s knowledge, do not, as of the Cut-off Date, specifically exclude Acts of Terrorism, as defined in TRIA, from coverage, or if such coverage is excluded, it is covered by a separate terrorism insurance policy. With respect to each Mortgage Loan, the related Loan Documents do not expressly waive or prohibit the mortgagee from requiring coverage for Acts of Terrorism, as defined in TRIA, or damages related thereto except to the extent that any right to require such coverage may be limited by commercial availability on commercially reasonable terms, or as otherwise indicated in Annex G;provided,however, that if TRIA or a similar or subsequent statute is not in effect, then, provided that terrorism insurance is commercially available, the Borrower under each Mortgage Loan is required to carry terrorism insurance, but in such event the Borrower shall not be required to spend on terrorism insurance coverage more than two times the amount of the insurance premium that is payable in respect of the property and business interruption/rental loss insurance required under the related Loan Documents (without giving effect to the cost of terrorism and earthquake components of such casualty and business interruption/rental loss insurance) at such time, and if the cost of terrorism insurance exceeds such amount, the Borrower is required to purchase the maximum amount of terrorism insurance available with funds equal to such amount. |
(30) | Due on Sale or Encumbrance. Subject to specific exceptions set forth below, each Mortgage Loan contains a “due on sale” or other such provision for the acceleration of the payment of the unpaid principal balance of such Mortgage Loan if, without the consent of the holder of the Mortgage (which consent, in some cases, may not be unreasonably withheld) and/or complying with the requirements of the related Loan Documents (which provide for transfers without the consent of the lender which are customarily acceptable to the Seller lending on the security of property comparable to the related Mortgaged Property, including, without limitation, transfers of worn-out or obsolete furnishings, fixtures, or equipment promptly replaced with property of |
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equivalent value and functionality and transfers by leases entered into in accordance with the Loan Documents), (a) the related Mortgaged Property, or any equity interest of greater than 50% in the related Borrower, is directly or indirectly pledged, transferred or sold, other than as related to (i) family and estate planning transfers or transfers upon death or legal incapacity, (ii) transfers to certain affiliates as defined in the related Loan Documents, (iii) transfers of less than, or other than, a controlling interest in the related Borrower, (iv) transfers to another holder of direct or indirect equity in the Borrower, a specific Person designated in the related Loan Documents or a Person satisfying specific criteria identified in the related Loan Documents, such as a qualified equityholder, (v) transfers of stock or similar equity units in publicly traded companies or (vi) a substitution or release of collateral within the parameters of paragraphs (27) and (32) herein or the exceptions thereto set forth in Annex G, or (vii) by reason of any mezzanine debt that existed at the origination of the related Mortgage Loan as set forth on Schedule G-1 to Annex G, or future permitted mezzanine debt in each case as set forth on Schedule G-2 to Annex G or (b) the related Mortgaged Property is encumbered with a subordinate lien or security interest against the related Mortgaged Property, other than (i) any Companion Loan or any subordinate debt that existed at origination and is permitted under the related Loan Documents, (ii) purchase money security interests, (iii) any Crossed Mortgage Loan as set forth on Schedule G-3 or (iv) Permitted Encumbrances. The Mortgage or other Loan Documents provide that to the extent any Rating Agency fees are incurred in connection with the review of and consent to any transfer or encumbrance, the Borrower is responsible for such payment along with all other reasonable fees and expenses incurred by the Mortgagee relative to such transfer or encumbrance. | ||
(31) | Single-Purpose Entity. Each Mortgage Loan requires the Borrower to be a Single-Purpose Entity for at least as long as the Mortgage Loan is outstanding. Both the Loan Documents and the organizational documents of the Borrower with respect to each Mortgage Loan with a Cut-off Date Stated Principal Balance in excess of $5 million provide that the Borrower is a Single-Purpose Entity, and each Mortgage Loan with a Cut-off Date Stated Principal Balance of $20 million or more has a counsel’s opinion regarding non-consolidation of the Borrower. For this purpose, a “Single-Purpose Entity” shall mean an entity, other than an individual, whose organizational documents (or if the Mortgage Loan has a Cut-off Date Stated Principal Balance equal to $5 million or less, its organizational documents or the related Loan Documents) provide substantially to the effect that it was formed or organized solely for the purpose of owning and operating one or more of the Mortgaged Properties securing the Mortgage Loans and prohibit it from engaging in any business unrelated to such Mortgaged Property or Properties, and whose organizational documents further provide, or which entity represented in the related Loan Documents, substantially to the effect that it does not have any assets other than those related to its interest in and operation of such Mortgaged Property or Properties, or any indebtedness other than as permitted by the related Mortgage(s) or the other related Loan Documents, that it has its own books and records and accounts separate and apart from those of any other person (other than a Borrower for a Crossed Mortgage Loan), and that it holds itself out as a legal entity, separate and apart from any other person or entity. |
(32) | Defeasance. With respect to any Mortgage Loan that, pursuant to the Loan Documents, can be defeased (a “Defeasance”), (i) the Loan Documents provide for Defeasance as a unilateral right of the Borrower, subject to satisfaction of conditions specified in the Loan Documents; (ii) the Mortgage Loan cannot be defeased within two years after the Closing Date; (iii) the Borrower is permitted to pledge only United States “government securities” within the meaning of Section 1.860G-2(a)(8)(ii) of the Treasury Regulations, the revenues from which will, in the case of a full Defeasance, be sufficient to make all scheduled payments under the Mortgage Loan when due, including the entire remaining principal balance on the maturity date (or on or after the first date on which payment may be made without payment of a yield maintenance charge or prepayment penalty) or, if the Mortgage Loan is an ARD Loan, the entire principal balance outstanding on the Anticipated Repayment Date, and if the Mortgage Loan permits partial releases of real property in connection with partial Defeasance, the revenues from the collateral will be sufficient to pay all such scheduled payments calculated on a principal amount equal to a specified percentage at least equal to the lesser of (a) 110% of the allocated loan amount for the |
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real property to be released and (b) the outstanding principal balance of the Mortgage Loan; (iv) the Borrower is required to provide a certification from an independent certified public accountant that the collateral is sufficient to make all scheduled payments under the Note as set forth in clause (iii) above; (v) if the Borrower would continue to own assets in addition to the Defeasance collateral, the portion of the Mortgage Loan secured by defeasance collateral is required to be assumed (or the mortgagee may require such assumption) by a Single-Purpose Entity; (vi) the Borrower is required to provide an opinion of counsel that the mortgagee has a perfected security interest in such collateral prior to any other claim or interest; and (vii) the Borrower is required to pay all rating agency fees associated with Defeasance (if rating confirmation is a specific condition precedent thereto) and all other reasonable expenses associated with Defeasance, including, but not limited to, accountant’s fees and opinions of counsel. | ||
(33) | Fixed Interest Rates. Each Mortgage Loan bears interest at a rate that remains fixed throughout the remaining term of such Mortgage Loan, except in the case of ARD Loans and situations where default interest is imposed. |
(34) | Ground Leases. For purposes of the Mortgage Loan Purchase Agreement, a “Ground Lease” shall mean a lease creating a leasehold estate in real property where the fee owner as the ground lessor conveys for a term or terms of years its entire interest in the land, or with respect to air rights leases, the air, and buildings and other improvements, if any, comprising the premises demised under such lease to the ground lessee (who may, in certain circumstances, own the building and improvements on the land), subject to the reversionary interest of the ground lessor as fee owner and does not include industrial development agency (IDA) or similar leases for purposes of conferring a tax abatement or other benefit. |
With respect to any Mortgage Loan where the Mortgage Loan is secured by a leasehold estate under a Ground Lease in whole or in part, and the related Mortgage does not also encumber the related lessor’s fee interest in such Mortgaged Property, based upon the terms of the Ground Lease and any estoppel or other agreement received from the ground lessor in favor of Seller, its successors and assigns, Seller represents and warrants that:
(a) | The Ground Lease or a memorandum regarding such Ground Lease has been duly recorded or submitted for recordation in a form that is acceptable for recording in the applicable jurisdiction. The Ground Lease or an estoppel or other agreement received from the ground lessor permits the interest of the lessee to be encumbered by the related Mortgage and does not restrict the use of the related Mortgaged Property by such lessee, its successors or assigns in a manner that would materially adversely affect the security provided by the related Mortgage; |
(b) | The lessor under such Ground Lease has agreed in a writing included in the related Mortgage File (or in such Ground Lease) that the Ground Lease may not be amended or modified, or canceled or terminated by agreement of lessor and lessee, without the prior written consent of the lender, and no such consent has been granted by the Seller since the origination of the Mortgage Loan except as reflected in any written instruments which are included in the related Mortgage File; |
(c) | The Ground Lease has an original term (or an original term plus one or more optional renewal terms, which, under all circumstances, may be exercised, and will be enforceable, by either Borrower or the mortgagee) that extends not less than 20 years beyond the stated maturity of the related Mortgage Loan, or 10 years past the stated maturity if such Mortgage Loan fully amortizes by the stated maturity (or with respect to a Mortgage Loan that accrues on an actual 360 basis, substantially amortizes); |
(d) | The Ground Lease either (i) is not subject to any liens or encumbrances superior to, or of equal priority with, the Mortgage, except for the related fee interest of the ground lessor |
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and the Permitted Encumbrances, or (ii) is subject to a subordination, non-disturbance and attornment agreement to which the mortgagee on the lessor’s fee interest in the Mortgaged Property is subject; | ||
(e) | The Ground Lease does not place commercially unreasonable restrictions on the identity of the Mortgagee and the Ground Lease is assignable to the holder of the Mortgage Loan and its successors and assigns without the consent of the lessor thereunder, and in the event it is so assigned, it is further assignable by the holder of the Mortgage Loan and its successors and assigns without the consent of the lessor; |
(f) | The Seller has not received any written notice of material default under or notice of termination of such Ground Lease. To the Seller’s knowledge, there is no material default under such Ground Lease and no condition that, but for the passage of time or giving of notice, would result in a material default under the terms of such Ground Lease and to the Seller’s knowledge, such Ground Lease is in full force and effect as of the Closing Date; |
(g) | The Ground Lease or ancillary agreement between the lessor and the lessee requires the lessor to give to the lender written notice of any default, and provides that no notice of default or termination is effective against the lender unless such notice is given to the lender; |
(h) | A lender is permitted a reasonable opportunity (including, where necessary, sufficient time to gain possession of the interest of the lessee under the Ground Lease through legal proceedings) to cure any default under the Ground Lease which is curable after the lender’s receipt of notice of any default before the lessor may terminate the Ground Lease; |
(i) | The Ground Lease does not impose any restrictions on subletting that would be viewed as commercially unreasonable by the Seller in connection with loans originated for securitization; |
(j) | Under the terms of the Ground Lease, an estoppel or other agreement received from the ground lessor and the related Mortgage (taken together), any related insurance proceeds or the portion of the condemnation award allocable to the ground lessee’s interest (other than (i) de minimis amounts for minor casualties or (ii) in respect of a total or substantially total loss or taking as addressed in clause (k) below) will be applied either to the repair or to restoration of all or part of the related Mortgaged Property with (so long as such proceeds are in excess of the threshold amount specified in the related Loan Documents) the lender or a trustee appointed by it having the right to hold and disburse such proceeds as repair or restoration progresses, or to the payment of the outstanding principal balance of the Mortgage Loan, together with any accrued interest; |
(k) | In the case of a total or substantially total taking or loss, under the terms of the Ground Lease, an estoppel or other agreement and the related Mortgage (taken together), any related insurance proceeds, or portion of the condemnation award allocable to ground lessee’s interest in respect of a total or substantially total loss or taking of the related Mortgaged Property to the extent not applied to restoration, will be applied first to the payment of the outstanding principal balance of the Mortgage Loan, together with any accrued interest; and |
(l) | Provided that the lender cures any defaults which are susceptible to being cured, the ground lessor has agreed to enter into a new lease with lender upon termination of the Ground Lease for any reason, including rejection of the Ground Lease in a bankruptcy proceeding. |
F-12 |
(35) | Servicing. The servicing and collection practices used by the Seller with respect to the Mortgage Loan have been, in all respects, legal and have met customary industry standards for servicing of commercial loans for conduit loan programs. |
(36) | Origination and Underwriting. The origination practices of the Seller (or the related originator if the Seller was not the originator) with respect to each Mortgage Loan have been, in all material respects, legal and as of the date of its origination, such Mortgage Loan and the origination thereof complied in all material respects with, or was exempt from, all requirements of federal, state or local law relating to the origination of such Mortgage Loan;provided that such representation and warranty does not address or otherwise cover any matters with respect to federal, state or local law otherwise covered in this Annex F. |
(37) | No Material Default;Payment Record. No Mortgage Loan has been more than 30 days delinquent, without giving effect to any grace or cure period, in making required payments since origination, and as of the date hereof, no Mortgage Loan is more than 30 days delinquent (beyond any applicable grace or cure period) in making required payments as of the Closing Date. To the Seller’s knowledge, there is (a) no material default, breach, violation or event of acceleration existing under the related Mortgage Loan, or (b) no event (other than payments due but not yet delinquent) which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a material default, breach, violation or event of acceleration, which default, breach, violation or event of acceleration, in the case of either clause (a) or clause (b), materially and adversely affects the value of the Mortgage Loan or the value, use or operation of the related Mortgaged Property,provided,however, that this representation and warranty does not cover any default, breach, violation or event of acceleration that specifically pertains to or arises out of an exception scheduled to any other representation and warranty made by the Seller in this Annex F. No person other than the holder of such Mortgage Loan may declare any event of default under the Mortgage Loan or accelerate any indebtedness under the Loan Documents. |
(38) | Bankruptcy. As of the date of origination of the related Mortgage Loan and to the Seller’s knowledge as of the Cut-off Date, no Borrower, guarantor or tenant occupying a single-tenant property is a debtor in state or federal bankruptcy, insolvency or similar proceeding. |
(39) | Organization of Borrower. With respect to each Mortgage Loan, in reliance on certified copies of the organizational documents of the Borrower delivered by the Borrower in connection with the origination of such Mortgage Loan, the Borrower is an entity organized under the laws of a state of the United States of America or the District of Columbia. Except with respect to any Crossed Mortgage Loan, no Mortgage Loan has a Borrower that is an Affiliate of another Borrower under another Mortgage Loan. (An “Affiliate” for purposes of this paragraph (39) means, a Borrower that is under direct or indirect common ownership and control with another Borrower.) |
(40) | Environmental Conditions. A Phase I environmental site assessment (or update of a previous Phase I and or Phase II site assessment) and, with respect to certain Mortgage Loans, a Phase II environmental site assessment (collectively, an “ESA”) meeting ASTM requirements conducted by a reputable environmental consultant in connection with such Mortgage Loan within 12 months prior to its origination date (or an update of a previous ESA was prepared), and such ESA either (i) did not identify the existence of recognized environmental conditions (as such term is defined in ASTM E1527-05 or its successor, hereinafter “Environmental Condition”) at the related Mortgaged Property or the need for further investigation with respect to any Environmental Condition that was identified, or (ii) if the existence of an Environmental Condition or need for further investigation was indicated in any such ESA, then at least one of the following statements is true: (A) an amount reasonably estimated by a reputable environmental consultant to be sufficient to cover the estimated cost to cure any material noncompliance with applicable environmental laws or the Environmental Condition has been escrowed by the related Borrower and is held or controlled by the related lender; (B) if the only Environmental Condition relates to the presence of asbestos-containing materials, radon in indoor air, lead based paint or lead in drinking water, and the only recommended action in the ESA is the institution of such a plan, an |
F-13 |
operations or maintenance plan has been required to be instituted by the related Borrower that can reasonably be expected to mitigate the identified risk; (C) the Environmental Condition identified in the related environmental report was remediated or abated in all material respects prior to the date hereof, and, if and as appropriate, a no further action or closure letter was obtained from the applicable governmental regulatory authority (or the Environmental Condition affecting the related Mortgaged Property was otherwise listed by such governmental authority as “closed” or a reputable environmental consultant has concluded that no further action is required); (D) a secured creditor environmental policy or a pollution legal liability insurance policy that covers liability for the Environmental Condition was obtained from an insurer rated no less than A- (or the equivalent) by Moody’s, S&P and/or Fitch; (E) a party not related to the Borrower was identified as the responsible party for such Environmental Condition and such responsible party has financial resources reasonably estimated to be adequate to address the situation; or (F) a party related to the Borrower having financial resources reasonably estimated to be adequate to address the situation is required to take action. To Seller’s knowledge, except as set forth in the ESA, there is no Environmental Condition (as such term is defined in ASTM E1527-05 or its successor) at the related Mortgaged Property. | ||
(41) | Appraisal. The Servicing File contains an appraisal of the related Mortgaged Property with an appraisal date within 6 months of the Mortgage Loan origination date, and within 12 months of the Closing Date. The appraisal is signed by an appraiser who is either a Member of the Appraisal Institute (“MAI”) and/or has been licensed and certified to prepare appraisals in the state where the Mortgaged Property is located. Each appraiser has represented in such appraisal or in a supplemental letter that the appraisal satisfies the requirements of the “Uniform Standards of Professional Appraisal Practice” as adopted by the Appraisal Standards Board of the Appraisal Foundation and has certified that such appraiser had no interest, direct or indirect, in the Mortgaged Property or the Borrower or in any loan made on the security thereof, and its compensation is not affected by the approval or disapproval of the Mortgage Loan. |
(42) | Mortgage Loan Schedule. The information pertaining to each Mortgage Loan which is set forth in the mortgage loan schedule attached asExhibit A to the Mortgage Loan Purchase Agreement is true and correct in all material respects as of the Cut-off Date and contains all information required by the Mortgage Loan Purchase Agreement to be contained therein. |
(43) | Cross-Collateralization. No Mortgage Loan is cross-collateralized or cross-defaulted with any mortgage loan that is outside the Trust, except as set forth in Annex G. |
(44) | Advance of Funds by the Seller. After origination, no advance of funds has been made by Seller to the related Borrower other than in accordance with the Loan Documents, and, to Seller’s knowledge, no funds have been received from any person other than the related Borrower or an affiliate for, or on account of, payments due on the Mortgage Loan (other than as contemplated by the Loan Documents, such as, by way of example and not in limitation of the foregoing, amounts paid by the tenant(s) into a lender-controlled lockbox if required or contemplated under the related lease or Loan Documents). Neither Seller nor any affiliate thereof has any obligation to make any capital contribution to any Borrower under a Mortgage Loan, other than contributions made on or prior to the date hereof. |
(45) | Compliance with Anti-Money Laundering Laws. Seller has complied in all material respects with all applicable anti-money laundering laws and regulations, including without limitation the USA Patriot Act of 2001 with respect to the origination of the Mortgage Loan, the failure to comply with which would have a material adverse effect on the Mortgage Loan. |
For purposes of these representations and warranties, the phrases “the Seller’s knowledge” or “the Seller’s belief” and other words and phrases of like import shall mean, except where otherwise expressly set forth herein, the actual state of knowledge or belief of the Seller, its officers and employees directly responsible for the underwriting, origination, servicing or sale of the Mortgage Loans regarding the matters expressly set forth herein.
F-14 |
ANNEX G
EXCEPTIONS TO MORTGAGE LOAN SELLER REPRESENTATIONS AND WARRANTIES
Capitalized terms used but not otherwise defined in this Annex G will have the meanings set forth in the related Mortgage Loan Purchase Agreement or, if not defined in related Mortgage Loan Purchase Agreement, in the Pooling and Servicing Agreement.
G-1 |
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
ANNEX G-1
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES FOR
GERMAN AMERICAN CAPITAL CORPORATION MORTGAGE LOANS
Annex | Mortgage Loans | Representations | Exceptions | |||
6.01 | Midwest Shopping Center Portfolio – Home Depot Shopping Center | (6) Permitted Liens; Title Insurance | Tenant Home Depot has a right of first refusal under its lease in connection with a sale of the current Home Depot premises to a third party. Home Depot has waived this right in connection with a foreclosure or deed-in-lieu of foreclosure. | |||
14 | Ocala Portfolio – AHIP | (6) Permitted Liens; Title Insurance | Pursuant to the related franchise agreements, the franchisor has a right of first refusal to purchase a Mortgaged Property if the transferee of the related Mortgaged Property in a proposed transfer is a competitor. The franchisor has subordinated its rights of first refusal to the exercise of the lender’s rights under the mortgage securing the Mortgage Loan. | |||
1 | 11 Madison Avenue | (16) Insurance | With respect to terrorism insurance coverage, Borrower may obtain coverage in excess of $100,000,000 written by Belmont Insurance Company, a non-rated captive insurer, provided that (1) Belmont is and remains a licensed captive insurance company which is owned by SL Green Realty Corp. or SL Green Operating Partnership, L.P., (2) as long as there is a United States federal government backstop for an amount equal to the then applicable federal share of compensation for insured losses of an insurer under TRIA, Borrower is required to obtain reinsurance with a cut through endorsement acceptable to Lender from a qualified insurance carrier satisfying the ratings requirements in the loan documents for the remaining portion of such coverage not subject to such federal backstop; and (3) no insurance policy containing any such terrorism insurance coverage shall contain a so-called sunset (or any other) provision providing that such policy or any such terrorism insurance coverage will expire or terminate, or that any terrorism insurance coverage thereunder will be excluded or otherwise limited in any respect, in the event TRIA expires or is otherwise no longer in effect for any reason. | |||
51 | Empire Central | (16) Insurance | The Borrower’s excess flood insurance policy is subject to a $100,000 deductible. The amount of this deductible may be considered higher than customary. | |||
3.05 | Sandalwood Portfolio – Arlington | (24) Local Law | The Mortgaged Property is legal non-conforming as to use because the Mortgaged Property was |
G-1-1 |
Annex | Mortgage Loans | Representations | Exceptions | |||
Oaks | Compliance | built as a multifamily property prior to the current zoning change. The Mortgaged Property may be rebuilt as multifamily property so long as not more than 50% of the fair market value of the Mortgaged Property is destroyed by a casualty. The Borrowers do not have zoning protection insurance. | ||||
1 | 11 Madison Avenue | (26) Recourse Obligations | With respect to misappropriation, the Mortgage Loan Documents provide for recourse solely for the following: “(i)(a) the misappropriation by Borrower or any Affiliate of Borrower of: (A) any Insurance Proceeds actually received by Borrower or any Affiliate of Borrower, or (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of the Property actually received by Borrower or any Affiliate of Borrower, or (C) security deposits, advance deposits or any other deposits) or (b) the failure by Borrower or any Affiliate of Borrower to deposit Rents and any other funds required to be deposited by Borrower into the Clearing Account pursuant to Section 6.1 of the Loan Agreement.” | |||
10 | Chase Park | (26) Recourse Obligations | The aggregate liability of the Guarantors is capped at $26,600,000. Such cap excludes and does not apply to (A) attorneys’ fees and other expenses incurred in the enforcement of the liability of the Guarantor under the recourse guaranty, (B) recourse liability for losses arising from (i) fraud or intentional misrepresentation of Borrower or Guarantors, (ii) breach of environmental covenants in the Loan Documents relating to environmental laws, hazardous materials or asbestos, or (iii) misappropriation or conversion by or on behalf of the Borrower of rents, insurance proceeds or condemnation awards, (C) full recourse liability for the Borrower filing a voluntary petition under federal or state bankruptcy law, or (D) the environmental indemnity agreement included in the Loan Documents. Such cap does, however, apply to recourse liability for losses arising from intentional material physical waste. | |||
29 | Hotel Preston | (39) Organization of Borrower
| The Borrower is affiliated with the Borrower under the Mortgage Loan identified on Annex A-1 as Hotel deLuxe, which Mortgage Loan is being sold to the trust by The Bank of New York Mellon. | |||
43 | Clive Distribution Center | (39) Organization of Borrower | The Borrower is affiliated with the Borrower under the Mortgage Loan identified on Annex A-1 |
G-1-2 |
Annex | Mortgage Loans | Representations | Exceptions | |||
as Cannon West Shopping Center, which Mortgage Loan is being sold to the trust by Cantor Commercial Real Estate Lending, L.P. | ||||||
1 | 11 Madison Avenue | (43) Cross-Collateralization | The Mortgage Loan is evidenced by a $70,000,000pari passuA-1-C2 note. The Mortgaged Property is also security for fifteenpari passu notes with an aggregate original principal balance of $694,330,000 and three subordinate notes with an aggregate original principal balance of $310,670,000. The notes are cross-collateralized and cross defaulted with each other. |
G-1-3 |
SCHEDULE G-1
GERMAN AMERICAN CAPITAL CORPORATION MORTGAGE LOANS
WITH EXISTING MEZZANINE DEBT
Annex A-1 ID# | Mortgage Loan | Original Principal Amount of Existing | ||
1 | 11 Madison Avenue | $325,000,000 | ||
4 | Atlanta Multifamily Portfolio | $5,000,000 | ||
6 | Midwest Shopping Center Portfolio | $5,500,000 |
G-1-4 |
SCHEDULE G-2
GERMAN AMERICAN CAPITAL CORPORATION MORTGAGE LOANS WITH RESPECT
TO WHICH MEZZANINE DEBT IS PERMITTED IN THE FUTURE
None.
G-1-5 |
SCHEDULE G-3
GERMAN AMERICAN CAPITAL CORPORATION CROSSED MORTGAGE LOANS
None.
G-1-6 |
ANNEX G-2
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES FOR
THE BANK OF NEW YORK MELLON MORTGAGE LOANS
Annex | Mortgage Loan | Representation | Exception | |||
11 | Cookie Factory Lofts | (3) Mortgage Provisions | The Loan Documents are subject to a subordination, non-disturbance and attornment agreement with the Borrower, the master tenant, lender and The Sherwin-Williams Company (the 99% member in the master tenant), which restricts the remedies that the lender has against the master tenant (until December 31, 2019, the master lease may not be terminated nor may rent payable under the master lease be accelerated) and restricts the transferees which can assume the ownership of the Mortgaged Property until December 31, 2019. | |||
5 | The Drake | (6) Permitted Liens; Title Insurance | The Trustees of the First Baptist Church of the City of Washington, D.C. (“Fee Owner”), as landlord under a Ground Lease, has a right of first refusal to purchase the Borrower’s leasehold interest if the Borrower intends to accept a bona fide written offer from a third party. Fee Owner will have 60 days following receipt of written notice from the Borrower to purchase the Borrower’s interest at the same price and on the same terms. If Fee Owner elects not to purchase the Borrower’s interest, the Borrower has 6 months to sell its interest at a price and on terms not materially more favorable than originally furnished to Fee Owner by the Borrower. Pursuant to an estoppel agreement executed by Fee Owner in favor of the lender, Fee Owner agreed that its right of first refusal is subject to the sale and assumption provisions in the loan agreement;provided that on or after the lockout release date, in the event Fee Owner elects not to assume the Mortgage Loan in connection with its purchase of the Borrower’s interest, Fee Owner is required to prepay (or cause the Borrower to prepay) the outstanding principal balance of the Mortgage Loan and all other amounts payable under the Loan Documents, including any yield maintenance premium. | |||
53 | Camelot Medical Office & Dunkin’ Donuts | (6) Permitted Liens; Title Insurance | Dunkin’ Donuts, the single tenant at the 125 Conhocton Street building, has a right of first refusal to purchase that portion of the Mortgaged Property if the Borrower intends to sell that portion of the Mortgaged Property to a third party. The right of first refusal does not apply to the lender in the event of a foreclosure, deed in lieu of foreclosure or any other enforcement action by the lender or to a subsequent sale by the lender to a third party; however, such right of first refusal will apply to subsequent purchasers of the Mortgaged Property. |
G-2-1 |
Annex | Mortgage Loan | Representation | Exception | |||
60 | 4001 North Lincoln | (16) Insurance | The Mortgaged Property consists of ground floor commercial condominium units, which are located beneath a 32 unit residential building subject to a condominium regime. The condominium association maintains insurance with respect to the common elements of the building. If there is a casualty and the insurance proceeds are sufficient to restore the building to the condition that existed prior to the casualty, the condominium association is obligated to restore the building. However, if the insurance proceeds from a casualty are not sufficient for a full restoration to the building’s former condition, then the condominium board is required to call a meeting of all unit owners, at which the unit owners will vote on whether to restore the structure (which may include the Mortgaged Property) by imposing a special assessment on unit owners, or to not restore and withdraw the portion of the building subject to the casualty event from the condominium regime. At loan origination, the lender required the Borrower to maintain casualty insurance in addition to the insurance maintained by the condominium association. If the condominium association fails to commence and timely complete a restoration, the Borrower is required to complete the restoration of the Mortgaged Property. Whether or not insurance proceeds are available, the Borrower is obligated to repair the Mortgaged Property to the extent necessary (i) to protect life and safety at the Mortgaged Property and (ii) to return the Mortgaged Property to a condition where the Mortgaged Property is deemed an architectural whole, whereby access to any portion of the Mortgaged Property is not impaired. Pursuant to the loan agreement, the Borrower is required to pay all costs of such restoration, whether or not such costs are covered by insurance. In addition, at loan origination, the Borrower gave the lender a proxy which, among other things, entitles, the lender to vote on behalf of the Borrower with respect to the decision to restore the Mortgaged Property after the occurrence of a casualty or in connection with the institution of a special assessment. The lender required an additional recourse carveout for any losses if the Borrower fails to comply with the lender’s directive with respect to voting matters under the condominium regime. The lender is also named as mortgagee on the property insurance policies maintained by the condominium association. |
G-2-2 |
Annex | Mortgage Loan | Representation | Exception | |||
60 | 4001 North Lincoln | (29) Acts of Terrorism Exclusion | The Mortgaged Property consists of ground floor commercial condominium units, which are located beneath a 32 unit residential building subject to a condominium regime. While the insurance policies obtained by the Borrower include coverage for acts of terrorism, the property insurance maintained by the condominium association with respect to the common elements of the entire building excludes coverage for acts of terrorism. At origination, the lender required an additional recourse carveout for any losses resulting from the Borrower’s failure to maintain coverage for acts of terrorism with respect to the common elements of the building. | |||
11 | Cookie Factory Lofts | (31) Single-Purpose Entity | The Borrower was not required to deliver a non-consolidation opinion in conjunction with the origination of the Mortgage Loan. | |||
31, 60 | Chestnut Street and 4001 North Lincoln | (39) Organization of Borrower | The Borrowers under the Mortgage Loans have common ownership and are Affiliates. | |||
8 | Hotel deLuxe | (39) Organization of Borrower | The Borrower is affiliated with the Borrower under the Mortgage Loan identified on Annex A-1 as Hotel Preston, which Mortgage Loan is being sold to the trust by German American Capital Corporation. |
G-2-3 |
SCHEDULE G-1
THE BANK OF NEW YORK MELLON MORTGAGE
LOANS WITH EXISTING MEZZANINE DEBT
None.
G-2-4 |
SCHEDULE G-2
THE BANK OF NEW YORK MELLON MORTGAGE LOANS WITH RESPECT
TO WHICH MEZZANINE DEBT IS PERMITTED IN THE FUTURE
Annex A-1 ID# | Mortgage Loan | |
57 | Bonita Springs Self Storage |
G-2-5 |
SCHEDULE G-3
THE BANK OF NEW YORK MELLON CROSSED MORTGAGE LOANS
None.
G-2-6 |
ANNEX G-3
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES FOR
KEYBANK NATIONAL ASSOCIATION MORTGAGE LOANS
Annex | Mortgage Loan | Representation | Exception | |||
33 | Rockford Crossing | (10) Condition of Property | The condition report regarding the Mortgaged Property noted $103,500 in required repairs, but the Borrower was not required to fund an upfront reserve. The Mortgage Loan documents require that if the required repairs are not completed on or prior to March 4, 2016, then the Borrower is required to deposit into a reserve account 125% of the required repairs amount set forth in the Mortgage Loan documents (the “Required Repair Deposit Amount”). If the Borrower fails to make the Required Repair Deposit Amount, a cash sweep event will occur and all excess cash will be swept into a reserve until the reserve is equal to 125% of the estimated required repairs that have not been completed at such time. | |||
13 | Village Square at Kiln Creek | (16) Insurance | The Loan Documents provide that Kmart’s lease will control with respect to the right to hold and disburse proceeds in connection with any repair or restoration. | |||
50 | Walgreens Aurora, IN | (16) Insurance | The related tenant may self-insure with respect to both property and liability insurance provided that certain tenant insurance conditions are met under the Loan Documents. |
G-3-1 |
Annex | Mortgage Loan | Representation | Exception | |||
7, 13, 21, 22, 32, 36, 38, 40, 42, 45, 46, 50, 55, 56, 58, 59, 62, 63, 64, 65 | Intellicenter, Village Square at Kiln Creek, Chestnut Hill Apartments, Hilton Greenville, Renner Commerce Center Portfolio, Lancaster Towers, Park Villas Townhomes, Rio Verde & Sagewood Apartments Portfolio, La Galleria at the Mills, Dollar Self Storage – Tucson, The Meadows Apartments, Walgreens Aurora, IN, Midvale Park Self Storage, Fresenius Medical Care Lake City, Fresenius Medical Care Greece, Storage Pros Lansing, Rhett at Remount, Winchester Oaks Apartments, All Star Storage, and Midvale Park RV Storage | (26) Recourse Obligations | The non-recourse provisions of the Mortgage Loans provide for liability for actual losses, liabilities, costs and damages in connection with “willful misrepresentation” as opposed to “intentional material misrepresentation.”
| |||
7 | Intellicenter | (26) Recourse | The non-recourse provision of the Mortgage Loan provides for liability for actual losses, liabilities, costs and damages in connection with “material physical waste of the Mortgaged Property, excluding any failure to maintain or make repairs or replacements to the Mortgaged Property because there was insufficient cash flow available from the Mortgaged Property and physical waste resulting from lender failing to make funds available to maintain and make repairs and replacements to the Mortgaged Property in violation of the Loan Documents” as opposed to “intentional material physical waste of the Mortgaged Property”. |
G-3-2 |
Annex | Mortgage Loan | Representation | Exception | |||
28, 54 | The Parking Spot Portfolio and Parkway Plaza Shopping Center | (26) Recourse Obligations | The non-recourse provisions of the Mortgage Loan provides for liability for actual losses, liabilities, costs and damages in connection with intentional material physical waste, but only if there is net cash flow available to the Borrower from the related Mortgaged Property to prevent such material physical waste. | |||
63 | Winchester Oaks Apartments | (26) Recourse Obligations | The non-recourse provisions of the Mortgage Loan provides for liability for actual losses, liabilities, costs and damages in connection with any misapplication, misappropriation, or conversion of rents after an event of default under the related Loan Documents and for those rents received more than 30 days in advance, but under no circumstances will funds applied by the Borrower to pay expenses of the operating, maintaining, repairing, or replacing of the Mortgaged Property or funds delivered to the lender by deemed to be misapplied, misappropriated, or converted.
The non-recourse provisions of the Mortgage Loan provides for liability for actual losses, liabilities, costs and damages in connection with the Borrower’s failure to comply in any material respect with the environmental covenants as opposed to any breach of the environmental covenants.
| |||
All Mortgage Loans
| (27) Mortgage Releases | With respect to a taking of a portion of each Mortgaged Property, the principal balance of the Mortgage Loans is not required to be paid down if the holder of the Mortgage Loan receives an opinion of counsel that, if such amount is not paid, the securitization will not fail to maintain its status as a REMIC trust. | ||||
28 | The Parking Spot Portfolio | (28) Financial Reporting and Rent Rolls | The Loan Documents do not require the Borrower to deliver combined balance sheets, statements of operations, statements of income, or capital or cash flows with respect to the Mortgaged Properties. |
G-3-3 |
Annex | Mortgage Loan | Representation | Exception | |||
27, 33 | University Center and Rockford Crossing | (30) Due-on-Sale or Encumbrance | After a transfer to master Delaware statutory trust (the “Master DST”) of the beneficial interests in the related Borrower and delivery of the tax opinion to Lender pursuant to the loan agreement, the holder of a beneficial ownership interest in Master DST may transfer such interest without the consent of lender so long as: (i) following the transfer, no single transferee (each, a “Master DST Beneficial Interest Owner Transferee”) owns more than 49% of the direct or indirect interests in Master DST; provided, that, to the extent a Master DST Beneficial Interest Owner Transferee owns twenty percent (20%) or more of the direct or indirect interests in Master DST immediately following the transfer, the related Borrower must deliver, prior to such transfer and at its sole cost and expense, customary searches (credit, judgment, lien, bankruptcy, etc.) reasonably acceptable to lender with respect to such Master DST Beneficial Interest Owner Transferee, (ii) following the transfer, the guarantor (or a permitted guarantor affiliate) owns no less than 0.5% of the direct or indirect interests in Master DST, (iii) each Master DST Beneficial Interest Owner Transferee is an accredited investor pursuant to the loan agreement, (iv) each transfer complies with all applicable legal requirements, (v) no change of control results from any transfer, (vi) the management of the Mortgaged Property remains unchanged, (vii) there are no more than four hundred and ninety-nine holders of a beneficial interest in the Master DST, and (viii) the Borrower continues to comply with the representations and warranties in the Loan Documents after the transfer. |
G-3-4 |
Annex | Mortgage Loan | Representation | Exception | |||
56, 58 | Fresenius Medical Care Lake City and Fresenius Medical Care Greece | (30) Due-on-Sale or Encumbrance | After a transfer to master Delaware statutory trust (the “Master DST”) of the beneficial interests in the related Borrower and delivery of the tax opinion to Lender pursuant to the loan agreement, the holder of a beneficial ownership interest in Master DST may transfer such interest without the consent of lender so long as: (i) following the transfer, no single transferee (each, a “Master DST Beneficial Interest Owner Transferee”) owns more than 49% of the direct or indirect interests in Master DST; provided, that, to the extent a Master DST Beneficial Interest Owner Transferee owns fifteen percent (15%) or more of the direct or indirect interests in Master DST immediately following the transfer, the related Borrower must deliver, prior to such transfer and at its sole cost and expense, customary searches (credit, judgment, lien, bankruptcy, etc.) reasonably acceptable to lender with respect to such Master DST Beneficial Interest Owner Transferee, (ii) each Master DST Beneficial Interest Owner Transferee is an accredited investor pursuant to the loan agreement, (iii) each transfer complies with all applicable legal requirements, (iv) no change of control results from any transfer, (v) the management of the Mortgaged Property remains unchanged, (vi) there are no more than four hundred and ninety-nine holders of a beneficial interest in the Master DST, and (vii) the Borrower continues to comply with the representations and warranties in the Loan Documents after the transfer. |
G-3-5 |
Annex | Mortgage Loan | Representation | Exception | |||
28 | The Parking Spot Portfolio | (31) Single-Purpose Entity | The Borrower is allowed to share accounts with its affiliates so long as records are maintained by or on behalf of the Borrower so that it can readily ascertain, without undue effort, time or cost, the funds of the Borrower that are contained in such accounts, transferred from such accounts, and disbursed from such accounts to pay the Borrower’s expenses.
The Borrower has operated and may operate the Mortgaged Properties under the name “The Parking Spot”, “Parking Spot” or any other name then being used by the property manager for the respective Mortgaged Properties, which name is or may be also used by certain of its affiliates and third parties. | |||
27, 33 | University Center and Rockford Crossing | (31) Single-Purpose Entity | The manager of the Mortgaged Property is allowed to share a custodial account with affiliates of the Borrower so long as the funds have been separately accounted and continue to be separately accounted for each item of income and expense applicable to the Mortgage Property. | |||
36 | Lancaster Towers | (31) Single-Purpose Entity | The Borrower is a recycled entity that has owned prior property and had prior debt. The Borrower made standard recycled entity representations warranties in the Loan Documents. | |||
62 | Rhett at Remount | (31) Single-Purpose Entity | Until the occurrence of the first cash sweep event under the Loan Documents, the Borrower is allowed to share accounts with its affiliates so long as records are maintained by or on behalf of the Borrower so that it can readily ascertain, without undue effort, time or cost, the funds of the Borrower that are contained in such accounts, transferred from such accounts, and disbursed from such accounts to pay the Borrower’s expenses.
The Loan Documents allow the Borrower to file a consolidated federal income tax return with its affiliates so long as the Borrower’s assets and liabilities are separately identified. |
G-3-6 |
Annex | Mortgage Loan | Representation | Exception | |||
32.01 | Renner Commerce Center Portfolio – Renner Commerce Center - South | (34) Ground Leases | A portion of the Mortgaged Property is the subject of a “ground lease” that was created in connection with the issuance of municipal bonds to provide funding of the construction costs for improvements to such property, and in connection with conferring a tax abatement on such property. Fee title to such property is held by the City of Lenexa, Kansas, the issuer of the municipal bonds and the ground lessor. Borrower is the ground lessee and the owner of such municipal bonds. The ground lease payment is the amount required to pay any amounts due upon the municipal bonds. The ground lessee is entitled to purchase the fee interest in such property at the end of the lease term for the amount required to pay off the municipal bonds, the interest due thereon, any necessary expenses and $1,000.00. | |||
27, 33 | University Center and Rockford Crossing | (39) Organization of Borrower | The Borrowers under the Mortgage Loans have common ownership and are Affiliates. | |||
45, 55, 65 | Dollar Self Storage – Tucson, Midvale Park Self Storage, and Midvale Park RV Storage | (39) Organization of Borrower | The Borrowers under the Mortgage Loans have common ownership and are Affiliates. | |||
56, 58 | Fresenius Medical Care Lake City and Fresenius Medical Care Greece | (39) Organization of Borrower | The Borrowers under the Mortgage Loans have common ownership and are Affiliates. | |||
52, 54 | Grove Park Shopping Center and Parkway Plaza Shopping Center | (39) Organization of Borrower | The Borrowers under the Mortgage Loans have common ownership and are Affiliates. |
G-3-7 |
SCHEDULE G-1
keybank national association MORTGAGE
LOANS WITH EXISTING MEZZANINE DEBT
None.
G-3-8 |
SCHEDULE G-2
keybank national association MORTGAGE LOANS WITH RESPECT
TO WHICH MEZZANINE DEBT IS PERMITTED IN THE FUTURE
None.
G-3-9 |
SCHEDULE G-3
keybank national association CROSSED MORTGAGE LOANS
None.
G-3-10 |
ANNEX G-4
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES FOR
CANTOR COMMERCIAL REAL ESTATE LENDING, L.P. MORTGAGE LOANS
Annex | Mortgage | Representation | Exception | |||
2 | NMS Los Angeles Multifamily Portfolio | (6) Permitted Liens; Title Insurance | The Luxe at 1548 Mortgaged Property is subject to a springing deed restriction by the City of Santa Monica to provide 19 units of affordable housing. The loan sponsors agreed with the City to build a multifamily building at a nearby location (the “New Building”) and provide the affordable housing units at that property (which property will not be collateral for the NMS Los Angeles Multifamily Portfolio Loan). In the event the sponsor has not made affordable housing units available at the New Building, the City may require that the borrower lease 19 units at the Luxe at 1548 Mortgaged Property to low income tenants as units become vacant. | |||
24 | Cannon West Shopping Center | (6) Permitted Liens; Title Insurance | A tenant at the Mortgaged Property, Albertsons, has a right of first refusal to purchase all or any portion of the Mortgaged Property currently occupied by Starbucks and Bamboo Bistro in the event the Borrower offers such portion of the Mortgaged Property for sale, which right does not apply to a foreclosure sale or a deed-in-lieu of foreclosure. | |||
24 | Cannon West Shopping Center | (16) Insurance | The Subordination, Non-Disturbance and Attornment Agreement with the Albertson’s tenant (“Albertson’s SNDA”) provides that in the event of any conflict between the Albertson’s lease and the Loan Documents, the Albertson’s lease controls. Accordingly, insurance proceeds payable under insurance maintained by the Albertson’s tenant will be allocated and applied as provided in the Albertson’s lease, which provides that the tenant will control the disbursement of such proceeds. | |||
2 | NMS Los Angeles Multifamily Portfolio | (26) Recourse Obligations | The Mortgage Loan provides for recourse for misappropriation of rents only during a Cash Management Period (as defined in the Loan Documents) or if such rents are paid more than one month in advance. | |||
24 | Cannon West Shopping Center | (39) Organization of Borrower | The Borrower is affiliated with the Borrower under the Mortgage Loan identified on Annex A-1 as Clive Distribution Center, which Mortgage Loan is being sold to the trust by German American Capital Corporation. | |||
2 | NMS Los Angeles Multifamily Portfolio | (43) Cross-Collateralization | The Mortgage Loan is evidenced by a $65,000,000 pari passu A-1 note. The Mortgaged Properties are also security for a $30,000,000 pari passu A-2 note and a $25,000,000 pari passu A-3 note. The notes are cross-collateralized and cross defaulted with each other. |
G-4-1 |
SCHEDULE G-1
CANTOR COMMERCIAL REAL ESTATE LENDING, L.P. MORTGAGE
LOANS WITH EXISTING MEZZANINE DEBT
Annex A-1 ID# | Mortgage Loan | Original Principal Amount of Existing | ||
41 | CSRA Food Lion Portfolio II | $780,000 |
G-4-2 |
SCHEDULE G-2
CANTOR COMMERCIAL REAL ESTATE LENDING, L.P. MORTGAGE LOANS WITH RESPECT
TO WHICH MEZZANINE DEBT IS PERMITTED IN THE FUTURE
None.
G-4-3 |
SCHEDULE G-3
CANTOR COMMERCIAL REAL ESTATE LENDING, L.P. CROSSED MORTGAGE LOANS
None.
G-4-4 |
ANNEX H
AMORTIZATION SCHEDULE FOR THEATLANTA MULTIFAMILY PORTFOLIOMORTGAGE LOAN
Payment Date | Total Monthly | Interest | Principal | Ending Principal | ||||
10/6/2015 | $180,375.00 | $180,375.00 | $0.00 | $45,000,000.00 | ||||
11/6/2015 | $186,387.50 | $186,387.50 | $0.00 | $45,000,000.00 | ||||
12/6/2015 | $180,375.00 | $180,375.00 | $0.00 | $45,000,000.00 | ||||
1/6/2016 | $186,387.50 | $186,387.50 | $0.00 | $45,000,000.00 | ||||
2/6/2016 | $186,387.50 | $186,387.50 | $0.00 | $45,000,000.00 | ||||
3/6/2016 | $174,362.50 | $174,362.50 | $0.00 | $45,000,000.00 | ||||
4/6/2016 | $186,387.50 | $186,387.50 | $0.00 | $45,000,000.00 | ||||
5/6/2016 | $180,375.00 | $180,375.00 | $0.00 | $45,000,000.00 | ||||
6/6/2016 | $186,387.50 | $186,387.50 | $0.00 | $45,000,000.00 | ||||
7/6/2016 | $180,375.00 | $180,375.00 | $0.00 | $45,000,000.00 | ||||
8/6/2016 | $186,387.50 | $186,387.50 | $0.00 | $45,000,000.00 | ||||
9/6/2016 | $186,387.50 | $186,387.50 | $0.00 | $45,000,000.00 | ||||
10/6/2016 | $180,375.00 | $180,375.00 | $0.00 | $45,000,000.00 | ||||
11/6/2016 | $186,387.50 | $186,387.50 | $0.00 | $45,000,000.00 | ||||
12/6/2016 | $180,375.00 | $180,375.00 | $0.00 | $45,000,000.00 | ||||
1/6/2017 | $186,387.50 | $186,387.50 | $0.00 | $45,000,000.00 | ||||
2/6/2017 | $186,387.50 | $186,387.50 | $0.00 | $45,000,000.00 | ||||
3/6/2017 | $168,350.00 | $168,350.00 | $0.00 | $45,000,000.00 | ||||
4/6/2017 | $227,941.21 | $186,387.50 | $41,553.71 | $44,958,446.29 | ||||
5/6/2017 | $228,929.09 | $180,208.44 | $48,720.65 | $44,909,725.64 | ||||
6/6/2017 | $228,000.99 | $186,013.59 | $41,987.40 | $44,867,738.24 | ||||
7/6/2017 | $228,987.22 | $179,844.85 | $49,142.37 | $44,818,595.88 | ||||
8/6/2017 | $228,061.33 | $185,636.13 | $42,425.20 | $44,776,170.68 | ||||
9/6/2017 | $228,089.43 | $185,460.41 | $42,629.02 | $44,733,541.66 | ||||
10/6/2017 | $229,073.21 | $179,306.95 | $49,766.27 | $44,683,775.39 | ||||
11/6/2017 | $228,150.61 | $185,077.72 | $43,072.90 | $44,640,702.50 | ||||
12/6/2017 | $229,132.71 | $178,934.82 | $50,197.89 | $44,590,504.60 | ||||
1/6/2018 | $228,212.37 | $184,691.39 | $43,520.98 | $44,546,983.62 | ||||
2/6/2018 | $228,241.19 | $184,511.13 | $43,730.06 | $44,503,253.56 | ||||
3/6/2018 | $231,122.07 | $166,491.62 | $64,630.45 | $44,438,623.11 | ||||
4/6/2018 | $228,312.95 | $184,062.31 | $44,250.64 | $44,394,372.46 | ||||
5/6/2018 | $229,290.57 | $177,947.44 | $51,343.12 | $44,343,029.34 | ||||
6/6/2018 | $228,376.25 | $183,666.36 | $44,709.89 | $44,298,319.45 | ||||
7/6/2018 | $229,352.12 | $177,562.43 | $51,789.69 | $44,246,529.77 | ||||
8/6/2018 | $228,440.15 | $183,266.67 | $45,173.48 | $44,201,356.28 | ||||
9/6/2018 | $228,470.07 | $183,079.56 | $45,390.50 | $44,155,965.78 | ||||
10/6/2018 | $229,443.34 | $176,991.83 | $52,451.51 | $44,103,514.26 | ||||
11/6/2018 | $228,534.86 | $182,674.31 | $45,860.55 | $44,057,653.71 | ||||
12/6/2018 | $229,506.35 | $176,597.76 | $52,908.58 | $44,004,745.13 | ||||
1/6/2019 | $228,600.26 | $182,265.21 | $46,335.05 | $43,958,410.07 | ||||
2/6/2019 | $228,630.94 | $182,073.29 | $46,557.65 | $43,911,852.42 | ||||
3/6/2019 | $231,475.79 | $164,279.12 | $67,196.67 | $43,844,655.75 | ||||
4/6/2019 | $228,706.27 | $181,602.13 | $47,104.14 | $43,797,551.61 | ||||
5/6/2019 | $229,673.03 | $175,555.19 | $54,117.84 | $43,743,433.76 | ||||
6/6/2019 | $228,773.30 | $181,182.87 | $47,590.43 | $43,695,843.34 | ||||
7/6/2019 | $229,738.21 | $175,147.51 | $54,590.70 | $43,641,252.64 | ||||
8/6/2019 | $228,840.96 | $180,759.64 | $48,081.32 | $43,593,171.32 | ||||
9/6/2019 | $228,872.80 | $180,560.49 | $48,312.31 | $43,544,859.01 | ||||
10/6/2019 | $229,834.96 | $174,542.31 | $55,292.65 | $43,489,566.35 |
H-1 |
Payment Date | Total Monthly | Interest | Principal | Ending Principal | ||||
11/6/2019 | $228,941.41 | $180,131.37 | $48,810.04 | $43,440,756.31 | ||||
12/6/2019 | $229,901.67 | $174,125.03 | $55,776.64 | $43,384,979.67 | ||||
1/6/2020 | $229,010.67 | $179,698.18 | $49,312.49 | $43,335,667.18 | ||||
2/6/2020 | $229,043.32 | $179,493.93 | $49,549.40 | $43,286,117.78 | ||||
3/6/2020 | $230,925.41 | $167,721.68 | $63,203.73 | $43,222,914.05 | ||||
4/6/2020 | $229,117.99 | $179,026.91 | $50,091.08 | $43,172,822.98 | ||||
5/6/2020 | $230,073.38 | $173,051.07 | $57,022.31 | $43,115,800.67 | ||||
6/6/2020 | $229,188.92 | $178,583.25 | $50,605.66 | $43,065,195.00 | ||||
7/6/2020 | $230,142.35 | $172,619.66 | $57,522.69 | $43,007,672.31 | ||||
8/6/2020 | $229,260.52 | $178,135.39 | $51,125.13 | $42,956,547.19 | ||||
9/6/2020 | $229,294.37 | $177,923.63 | $42,956,547.191 | $0.00 |
1Includes balloon payment of $42,905,176.45.
H-2 |
Deutsche Mortgage & Asset Receiving Corporation,
● | one or more multifamily or commercial mortgage loans of various types, |
● | mortgage participations, pass-through certificates or other mortgage-backed securities that evidence interests in one or more of various types of multifamily or commercial mortgage loans, or |
● | combination of the assets described above. |
SUMMARY OF PROSPECTUS | 1 | |
RISK FACTORS | 10 | |
The Lack of Liquidity May Make it Difficult for You to Resell Your Offered Certificates and May Have an Adverse Effect on the Market Value of Your Offered Certificates | 10 | |
The Trust Fund’s Assets May Be Insufficient To Allow For Payment In Full On Your Certificates | 11 | |
Any Credit Support for Your Offered Certificates May Be Insufficient to Protect You Against All Potential Losses | 11 | |
Performance of Your Offered Certificates Will Depend on Payments, Defaults and Losses on the Underlying Mortgage Loans which May Be Highly Unpredictable | 12 | |
Prepayments May Reduce The Average Life or the Yield of Your Certificates | 13 | |
Taxes on Foreclosure Property Will Reduce Amounts Available to Make Payments on the Offered Certificates | 14 | |
Ratings Do Not Guaranty Payment | 15 | |
The Prospective Performance of the Commercial and Multifamily Mortgage Loans Included in Each Trust Should Be Evaluated Separately from the Performance of the Mortgage Loans in any of our Other Trusts | 15 | |
Commercial and Multifamily Mortgage Loans Are Subject to Certain Risks Which Could Adversely Affect the Performance of Your Offered Certificates | 16 | |
The Borrower’s Form of Entity May Not Prevent the Borrower’s Bankruptcy | 25 | |
Risks Related to Terrorist Attacks and Military Conflict | 26 | |
Some Certificates May Not Be Appropriate for ERISA Plans | 27 | |
Changes to REMIC Restrictions on Loan Modifications May Impact an Investment in the Certificates | 27 | |
Residual Interests in a Real Estate Mortgage Investment Conduit Have Adverse Tax Consequences | 27 | |
Certain Federal Tax Considerations Regarding Original Issue Discount | 28 | |
Bankruptcy Proceedings Entail Certain Risks | 28 | |
Book-Entry System for Certain Classes May Decrease Liquidity and Delay Payment | 29 | |
Inclusion of Delinquent Mortgage Loans in a Mortgage Asset Pool | 29 | |
Termination of the Trust Fund Could Affect the Yield on Your Offered Certificates | 30 | |
Underwritten Net Cash Flow and Stabilized Values May Be Based on Flawed Assumptions | 30 | |
THE SPONSOR | 30 | |
OTHER SPONSORS, MORTGAGE LOAN SELLERS AND ORIGINATORS | 31 | |
THE DEPOSITOR | 31 | |
DESCRIPTION OF THE TRUST FUNDS | 31 | |
General | 31 | |
Mortgage Loans | 33 | |
MBS | 38 | |
Certificate Accounts | 39 | |
Credit Support | 39 | |
Cash Flow Agreements | 40 | |
YIELD AND MATURITY CONSIDERATIONS | 40 | |
General | 40 | |
Pass-Through Rate | 41 | |
Payment Delays | 41 | |
Certain Shortfalls in Collections of Interest | 41 | |
Yield and Prepayment Considerations | 41 | |
Weighted Average Life and Maturity | 43 | |
Controlled Amortization Classes and Companion Classes | 44 | |
Other Factors Affecting Yield, Weighted Average Life and Maturity | 44 | |
DESCRIPTION OF THE CERTIFICATES | 46 | |
General | 46 | |
Distributions | 47 | |
Distributions of Interest on the Certificates | 47 | |
Distributions of Principal of the Certificates | 49 |
Distributions on the Certificates in Respect of Prepayment Premiums or in Respect of EquityParticipations | 50 | |
Allocation of Losses and Shortfalls | 50 | |
Advances | 50 | |
Reports to Certificateholders | 51 | |
Voting Rights | 52 | |
Termination | 52 | |
Book-Entry Registration and Definitive Certificates | 53 | |
Depositable and Exchangeable Certificates | 54 | |
DESCRIPTION OF THE POOLING AGREEMENTS | 57 | |
General | 57 | |
Assignment of Mortgage Loans; Repurchases | 57 | |
Representations and Warranties; Repurchases | 59 | |
Collection and Other Servicing Procedures | 60 | |
Primary Servicers and Sub-Servicers | 61 | |
Certificate Account | 62 | |
Modifications, Waivers and Amendments of Mortgage Loans | 64 | |
Realization upon Defaulted Mortgage Loans | 65 | |
Hazard Insurance Policies | 66 | |
Due-on-Sale and Due-on-Encumbrance Provisions | 67 | |
Servicing Compensation and Payment of Expenses | 67 | |
Evidence as to Compliance | 68 | |
Certain Matters Regarding the Master Servicer, the Special Servicer, the REMIC Administrator and the Depositor | 68 | |
Termination Events | 70 | |
Rights upon Termination Event | 70 | |
Amendment | 71 | |
List of Certificateholders | 72 | |
The Trustee | 72 | |
Duties of the Trustee | 72 | |
Certain Matters Regarding the Trustee | 73 | |
Resignation and Removal of the Trustee | 73 | |
Additional Parties to the Agreements | 73 | |
DESCRIPTION OF CREDIT SUPPORT | 74 | |
General | 74 | |
Subordinate Certificates | 74 | |
Cross-Support Provisions | 75 | |
Overcollateralization | 75 | |
Letter of Credit | 75 | |
Insurance or Guarantees with Respect to Mortgage Loans | 75 | |
Certificate Insurance and Surety Bonds | 75 | |
Reserve Funds | 76 | |
Credit Support with Respect to MBS | 76 | |
CASH FLOW AND DERIVATIVES AGREEMENTS | 76 | |
CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS | 76 | |
General | 77 | |
Types of Mortgage Instruments | 77 | |
Leases and Rents | 77 | |
Personalty | 78 | |
Foreclosure | 78 | |
Bankruptcy Laws | 81 | |
Environmental Considerations | 86 | |
Due-on-Sale and Due-on-Encumbrance Provisions | 88 | |
Junior Liens; Rights of Holders of Senior Liens | 88 | |
Subordinate Financing | 88 | |
Default Interest and Limitations on Prepayments | 88 |
Applicability of Usury Laws | 88 | |
Certain Laws and Regulations | 89 | |
Americans with Disabilities Act | 89 | |
Servicemembers Civil Relief Act | 89 | |
Anti-Money Laundering, Economic Sanctions and Bribery | 90 | |
Potential Forfeiture of Assets | 90 | |
CERTAIN FEDERAL INCOME TAX CONSEQUENCES | 90 | |
FEDERAL INCOME TAX CONSEQUENCES FOR REMIC CERTIFICATES | 91 | |
General | 91 | |
Status of REMIC Certificates | 92 | |
Qualification as a REMIC | 92 | |
Taxation of Regular Certificates | 94 | |
Taxation of Residual Certificates | 101 | |
Taxes that May Be Imposed on the REMIC Pool | 109 | |
Liquidation of the REMIC Pool | 110 | |
Administrative Matters | 110 | |
Limitations on Deduction of Certain Expenses | 110 | |
Taxation of Certain Foreign Investors | 111 | |
3.8% Medicare Tax on “Net Investment Income” | 112 | |
Backup Withholding | 112 | |
Reporting Requirements | 113 | |
FEDERAL INCOME TAX CONSEQUENCES FOR CERTIFICATES AS TO WHICH NO REMIC ELECTION IS MADE | 113 | |
Standard Certificates | 113 | |
Stripped Certificates | 116 | |
Reporting Requirements and Backup Withholding | 119 | |
Taxation of Certain Foreign Investors | 120 | |
3.8% Medicare Tax on “Net Investment Income” | 120 | |
Taxation of Classes of Exchangeable Certificates | 120 | |
STATE, LOCAL AND OTHER TAX CONSEQUENCES | 121 | |
CERTAIN ERISA CONSIDERATIONS | 122 | |
General | 122 | |
Plan Asset Regulations | 122 | |
Prohibited Transaction Exemptions | 123 | |
Tax Exempt Investors | 126 | |
LEGAL INVESTMENT | 126 | |
USE OF PROCEEDS | 127 | |
METHOD OF DISTRIBUTION | 127 | |
LEGAL MATTERS | 128 | |
FINANCIAL INFORMATION | 129 | |
RATING | 129 | |
INDEX OF DEFINED TERMS | 130 |
SUMMARY OF PROSPECTUS | ||||
This summary highlights selected information from this prospectus. It does not contain all of the information you need to consider in making your investment decision.To understand all of the terms of an offering of certificates, read this entire document and the accompanying prospectus supplement carefully. | ||||
Securities Offered | Mortgage pass-through certificates, issuable in series. Each series of certificates will represent beneficial ownership in a trust fund. Each trust fund will own a segregated pool of certain mortgage assets, described below under “—The Mortgage Assets.” | |||
Relevant Parties | ||||
Who We Are | Deutsche Mortgage & Asset Receiving Corporation, a Delaware corporation. See “The Depositor.” Our principal offices are located at 60 Wall Street, New York, New York 10005. Our telephone number is (212) 250-2500. | |||
Issuing Entity | The issuing entity with respect to each series will be a New York common law trust formed by the depositor and containing the assets described in this prospectus and specified in the related prospectus supplement. | |||
Trustee | The trustee for each series of certificates will be named in the related prospectus supplement. See “Description of the Pooling Agreements—The Trustee.” | |||
Master Servicer | If a trust fund includes mortgage loans, then each master servicer, for the corresponding series of certificates will be named in the related prospectus supplement. Certain of the duties of the master servicer may be performed by one or more primary servicers or sub-servicers. See “Description of the Pooling Agreements—Certain Matters Regarding the Master Servicer, the Special Servicer, the REMIC Administrator and the Depositor.” | |||
Special Servicer | If a trust fund includes mortgage loans, then each special servicer for the corresponding series of certificates will be named, or the circumstances under which a special servicer may be appointed will be described, in the related prospectus supplement. See “Description of the Pooling Agreements—Collection and Other Servicing Procedures.” | |||
MBS Administrator | If a trust fund includes mortgage-backed securities, then the entity responsible for administering such mortgage-backed securities will be named in the related prospectus supplement. | |||
REMIC Administrator | The person responsible for the various tax-related administration duties for a series of certificates as to which one or more REMIC elections have been made, will be named in the related prospectus supplement. See “Description of the Pooling Agreements—Certain Matters Regarding the Master Servicer, the Special Servicer, the REMIC Administrator and the Depositor.” | |||
Other Parties | If so specified in the prospectus supplement for a series, there may be one or more additional parties to the related pooling and servicing agreement, including but not limited to (i) a paying agent, which will make payments and perform other specified duties with respect to the |
certificates, (ii) a certificate registrar, which will maintain the register of certificates and perform certain duties with respect to certificate transfer, (iii) an authenticating agent, which will countersign the certificates on behalf of the trustee and/or (iv) a fiscal agent, which will be required to make advances if the trustee fails to do so when required. | ||||
Sponsors | The sponsor or sponsors for each series of certificates will be named in the related prospectus supplement. The sponsor or sponsors will initiate the issuance of a series of certificates and will sell mortgage loans to the depositor. If specified in the related prospectus supplement, the sponsor or co-sponsor may be German American Capital Corporation, an affiliate of the depositor. | |||
Sellers | The seller or sellers of the mortgage loans or other assets will be named in the related prospectus supplement. A seller may be an affiliate of Deutsch Mortgage & Asset Receiving Corporation, the depositor. The depositor will purchase the mortgage loans or other assets from the seller or sellers, on or before the issuance of the related series of certificates. | |||
Originators | If the mortgage loans or other assets have been originated by an entity other than the related sponsor or loan seller, the prospectus supplement will identify the related originator and set forth certain information with respect thereto. | |||
Information About The Mortgage Pool | ||||
The Mortgage Assets | The mortgage assets will be the primary assets of any trust fund. The mortgage assets with respect to each series of certificates will, in general, consist: | |||
● one or more multifamily (which include manufactured housing community) or commercial mortgage loans of various types, | ||||
● mortgage participations, pass-through certificates or other mortgage-backed securities that evidence interests in one or more of various types of multifamily or commercial mortgage loans, or | ||||
● a combination of the assets described above. | ||||
If sospecified in the related prospectus supplement, a trust fund may include one or more mortgage loans secured by liens on real estate projects under construction. The mortgage loans will not be guaranteed or insured by us or any of our affiliates or, unless the related prospectus supplement specifies otherwise, by any governmental agency or instrumentality or by any other person. If the related prospectus supplement so provides, some mortgage loans may be delinquent as of the date the related trust fund is formed. | ||||
If the related prospectus supplement so provides, a mortgage loan: | ||||
● may provide for no accrual of interest or for accrual of interest at an interest rate that is fixed over its term, that adjusts from time to time, or that may be converted at the borrower’s election from an adjustable to a fixed interest rate, or from a fixed to an adjustable rate, |
● may provide for level payments to maturity or for payments that adjust from time to time to accommodate changes in the interest rate or to reflect the occurrence of certain events, and may permit negative amortization, | ||||
● may be fully amortizing or may be partially amortizing or nonamortizing, with a balloon payment due on its stated maturity date, | ||||
● may prohibit prepayments over its term or for a certain period and/or require payment of a premium or a yield maintenance payment in connection with certain prepayments, | ||||
● may provide for defeasance of the mortgage loan, and | ||||
● may provide for payments of principal, interest or both, on regular due dates or at such other interval as is specified in the related prospectus supplement. | ||||
Each mortgage loan will have had an original term to maturity of not more than 40 years. We will not originate any mortgage loans. Some or all of the mortgage loans in any trust fund may have been originated by an affiliate of the depositor. See “Description of the Trust Funds—Mortgage Loans.” If any mortgage loan, or group of related mortgage loans, constitutes a 10% or greater concentration of credit risk, financial statements or other financial information with respect to the related mortgaged property or mortgaged properties will be included in the related Prospectus Supplement. See “Description of the Trust Funds—Mortgage Loans—Mortgage Loan Information in Prospectus Supplements.” If the related prospectus supplement so specifies, the mortgage assets with respect to a series of certificates may also include, or consist of, mortgage participations, mortgage pass-through certificates and/or other mortgage-backed securities, that evidence an interest in, or are secured by a pledge of, one or more mortgage loans that conform to the descriptions of the mortgage loans contained in this prospectus and which may or may not be issued, insured or guaranteed by the United States or an agency or instrumentality thereof. See “Description of the Trust Funds—MBS.” | ||||
Information About The Certificates | ||||
The Certificates | Each series of certificates will be issued in one or more classes pursuant to a pooling and servicing agreement or other agreement specified in the related prospectus supplement and will represent in the aggregate the entire beneficial ownership interest in the related trust fund. | |||
The certificates of each series may consist of one or more classes of certificates that, among other things: | ||||
● are senior or subordinate to one or more other classes of certificates in entitlement to certain distributions on the certificates; | ||||
● are entitled to distributions of principal with disproportionate, nominal or no distributions of interest; |
● are entitled to distributions of interest, with disproportionate nominal or no distributions of principal; | ||||
● provide for distributions of interest or principal that commence only after the occurrence of certain events, such as the retirement of one or more other classes of certificates of such series; | ||||
● provide for distributions of principal to be made, from time to time or for designated periods, at a rate that is faster (and, in some cases, substantially faster) or slower (and, in some cases, substantially slower) than the rate at which payments or other collections of principal are received on the mortgage assets in the related trust fund; | ||||
● provide for distributions of principal to be made, subject to available funds, based on a specified principal payment schedule or other methodology; | ||||
● provide for distributions based solely or primarily on specified mortgage assets or a specified group of mortgage assets; or | ||||
● provide for distribution based on collections on the mortgage assets in the related trust fund attributable to prepayment premiums, yield maintenance payments or equity participations. | ||||
If so specified in the related prospectus supplement, a series of certificates may include one or more “controlled amortization classes,” which will entitle the holders thereof to receive principal distributions according to a specified principal payment schedule. See “Risk Factors—Prepayments May Reduce the Average Life of Your Certificates” and “—Prepayments May Reduce the Yield on Your Certificates.” If the related prospectus supplement so provides, a class of certificates may have two or more component parts, each having characteristics that are otherwise described in this prospectus as being attributable to separate and distinct classes. The certificates will not be guaranteed or insured by us or any of our affiliates, by any governmental agency or instrumentality or by any other person or entity, unless the related prospectus supplement specifies otherwise. See “Risk Factors—Limited Assets.” | ||||
Distributions of Interest on the Certificates | Each class of certificates, other than certain classes of principal-only certificates and certain classes of residual certificates, will accrue interest on its certificate balance or, in the case of certain classes of interest-only certificates, on a notional amount, based on a fixed, floating, variable or adjustable interest rate. Common indices used for determining floating interest rates include one-month, three-month, six-month and one-year “LIBOR” (an average of the interest rate on one-month, three-month, six-month or one-year dollar-denominated deposits traded between banks in London), “CMT” (weekly or monthly average yields of U.S. treasury short and long-term securities, adjusted to a constant maturity), “COFI” (an index of the weighted average interest rate paid by savings institutions in Nevada, Arizona and California), “MTA” (a one-year average of the monthly average yields |
of U.S. treasury securities) and the “Prime Rate” (an interest rate charged by banks for short-term loans to their most creditworthy customers). | ||||
The related prospectus supplement will specify the certificate balance, notional amount and/or pass-through rate (or, in the case of a variable or adjustable pass-through rate, the method for determining such rate), as applicable, for each class of offered certificates. Distributions of interest with respect to one or more classes of certificates may not commence until the occurrence of certain events, such as the retirement of one or more other classes of certificates, and interest accrued with respect to a class of such certificates prior to the occurrence of such an event will either be added to the certificate balance thereof or otherwise deferred as described in the related prospectus supplement. Distributions of interest with respect to one or more classes of certificates may be reduced to the extent of certain delinquencies, losses and other contingencies described in this prospectus and in the related prospectus supplement. See “Risk Factors—Prepayments May Reduce the Average Life of Your Certificates” and “—Prepayments May Reduce the Yield on Your Certificates,” “Yield and Maturity Considerations—Certain Shortfalls in Collections of Interest” and “Description of the Certificates—Distributions of Interest on the Certificates.” | ||||
Distributions of Principal of the Certificates | Each class of certificates of each series (other than certain classes of interest-only certificates and certain classes of residual certificates) will have a certificate balance. The certificate balance of a class of certificates outstanding from time to time will represent the maximum amount that you are then entitled to receive in respect of principal from future cash flow on the assets in the related trust fund. As described in each prospectus supplement, distributions of principal with respect to the related series of certificates will be made on each distribution date to the holders of the class or classes of certificates of such series until the certificate balances of such certificates have been reduced to zero. | |||
As described in each prospectus supplement, distributions of principal with respect to one or more classes of certificates: | ||||
● may be made at a rate that is faster (and, in some cases, substantially faster) or slower (and, in some cases, substantially slower) than the rate at which payments or other collections of principal are received on the mortgage assets in the related trust fund; | ||||
● may not commence until the occurrence of certain events, such as the retirement of one or more other classes or certificates of the same series; or | ||||
● may be made, subject to certain limitations, based on a specified principal payment schedule. | ||||
Unless the related prospectus supplement provides otherwise, distributions of principal of any class of offered certificates will be made on apro rata basis among all of the certificates of such class. See |
“Description of the Certificates—Distributions of Principal of the Certificates.” | ||||
Credit Support and Cash Flow Agreements | Partial or full protection against certain defaults and losses on the mortgage assets in the related trust fund may be provided to one or more classes of certificates of the related series in the form of subordination of one or more other classes of certificates of such series or by one or more other types of credit support, which may include: | |||
● a letter of credit, | ||||
● a loan insurance policy, | ||||
● a certificate insurance policy, | ||||
● a guarantee, | ||||
● cross-support provisions, | ||||
● a surety bond, | ||||
● a reserve fund, or | ||||
● a combination of the items described above. | ||||
In addition, a trust fund may include: | ||||
● guaranteed investment contracts pursuant to which moneys held in the funds and accounts established for the related series will be invested at a specified rate; or | ||||
● interest rate exchange agreements, interest rate cap or floor agreements to reduce the effects of interest rate fluctuations on the mortgage assets or on one or more classes of certificates or to alter the payment characteristics of the cash flows from a trust fund. | ||||
The related prospectus supplement for a series of offered certificates will provide certain relevant information regarding any applicable credit support or cash flow agreement. See “Risk Factors—Any Credit Support For Your Offered Certificates May Be Insufficient to Protect You Against All Potential Losses,” “Description of the Trust Funds—Credit Support” and “—Cash Flow Agreements” and “Description of Credit Support.” | ||||
Advances | If the related prospectus supplement so provides, the master servicer, the special servicer, the trustee, any provider of credit support and/or any other specified person may be obligated to make, or have the option of making, certain advances with respect to delinquent scheduled payments of principal and/or interest on mortgage loans included in the related trust fund or for property protection expenses. Any such advances made with respect to a particular mortgage loan will be reimbursable from subsequent recoveries in respect of such mortgage loan and otherwise to the extent described in this prospectus and in the related prospectus supplement. See “Description of the Certificates—Advances.” Any entity making advances may be entitled to receive |
interest on such advances, which will be payable from amounts in the related trust fund. See “Description of the Certificates—Advances.” | ||||
If a trust fund includes mortgage participations, pass-through certificates or mortgage-backed securities, the related prospectus supplement will describe any comparable advancing obligation of a party to the related pooling and servicing agreement, or of a party to the related indenture or similar agreement. | ||||
Optional Termination | If the related prospectus supplement so provides, a series of certificates may be subject to optional early termination through the purchase of the mortgage assets in the related trust fund by the party or parties specified in the related prospectus supplement, under the circumstances and in the manner set forth in the related prospectus supplement. If the related prospectus supplement so provides, upon the reduction of the certificate balance of a specified class or classes of certificates by a specified percentage or amount or upon a specified date, a party specified in such prospectus supplement may be authorized or required to solicit bids for the purchase of all of the mortgage assets of the related trust fund, or of a sufficient portion of such mortgage assets to retire such class or classes, under the circumstances and in the manner set forth in the prospectus supplement. If any class of certificates has an optional termination feature that may be exercised when 25% or more of the original principal balance of the mortgage assets in the related trust fund is still outstanding, the title of such class of certificates will include the word “callable.” See “Description of the Certificates—Termination” in this prospectus. | |||
Repurchases and Substitutions of Mortgage Assets; Acquisition ofAdditional Mortgage Assets | If and to the extent described in the related prospectus supplement, Deutsch Mortgage & Asset Receiving Corporation, a mortgage asset seller or another specified person or entity may make or assign to or for the benefit of one of our trusts various representations and warranties, or may be obligated to deliver to one of our trusts various documents, in either case relating to some or all of the mortgage assets transferred to that trust. A material breach of one of those representations and warranties or a failure to deliver a material document may, under the circumstances described in the related prospectus supplement, give rise to an obligation to repurchase the affected mortgage asset(s) out of the subject trust or to replace the affected mortgage asset(s) with other mortgage asset(s) that satisfy the criteria specified in the related prospectus supplement or to reimburse the related trust fund for any related losses. See “Description of the Pooling Agreements—Assignment of Mortgage Loans—Repurchases” and“—Representations and Warranties—Repurchases” herein. | |||
In addition, if so specified in the related prospectus supplement, if a mortgage loan backing a series of certificates defaults, it may be subject to a fair value purchase option or other purchase option under the related pooling and servicing agreement or another agreement, or may be subject to a purchase option on the part of another lender whose loan is secured by the related real estate collateral or by a security interest in the equity in the related borrower. Further, if so specified in the related prospectus supplement, a special servicer or other specified party for a trust fund may be obligated to sell a mortgage asset that is in default. |
See “Description of the Pooling Agreements—Realization Upon Defaulted Mortgage Loans” herein. In general, the initial total principal balance of the mortgage assets in a trust will equal or exceed the initial total principal balance of the related certificates. If the initial total principal balance of the related mortgage assets is less than the initial total principal balance of any series, we may arrange an interim deposit of cash or liquid investments with the trustee to cover the shortfall. For the period specified in the related prospectus supplement, following the initial issuance of that series, we will be entitled to obtain a release of the deposited cash or investments in exchange for the deposit of a corresponding amount of mortgage assets. If we fail to deliver mortgage assets sufficient to make up the entire shortfall within that specified period, any of the cash or investments remaining on deposit with the related trustee will be used to pay down the principal balance of the related certificates, as described in the related prospectus supplement. If so specified in the related prospectus supplement, the related trustee may be authorized or required to apply collections on the mortgage assets underlying a series of offered certificates to acquire new mortgage assets that conform to the description of mortgage assets in this prospectus, and satisfy the criteria set forth in the related prospectus supplement. If the subject securitization transaction involves a prefunding or revolving period, then we will indicate in the related prospectus supplement, certain characteristics of such prefunding or revolving period. No prefunding period will extend for more than one year from the date of issuance of any related class or series of certificates and the portion of the proceeds of the offering of such certificates deposited in the prefunding account will not exceed 50% of the proceeds of such offering. No revolving period will extend for more than three years from the date of issuance of any related class or series of certificates and the additional pool assets acquired during the revolving period will be of the same general character as the original pool assets. See “Description of the Trust Funds—General” herein. | ||||
Registration of Book-Entry Certificates | If the related prospectus supplement so provides, one or more classes of the offered certificates will be offered in book-entry form through the facilities of the Depository Trust Company. Each class of book-entry certificates will be initially represented by one or more global certificates registered in the name of a nominee of the Depository Trust Company. No person acquiring an interest in a class of book-entry certificates will be entitled to receive definitive certificates of that class in fully registered form, except under the limited circumstances described in this prospectus. See “Risk Factors—Book-Entry System for Certain Classes May Decrease Liquidity and Delay Payment” and “Description of the Certificates—Book-Entry Registration and Definitive Certificates.” |
Certain Federal Income Tax Consequences | The Certificates of each series will constitute or evidence ownership of either: | |||
● “regular interests” and “residual interests” in a trust fund, or a designated portion thereof, treated as “real estate mortgage investment conduit” under Sections 860A through 860G of the Internal Revenue Code of 1986, or | ||||
● interests in a trust fund treated as a grantor trust under applicable provisions of the Internal Revenue Code of 1986. | ||||
You should consult your tax advisor concerning the specific tax consequences to you of the purchase, ownership and disposition of the offered certificates and you should review “Certain Federal Income Tax Consequences” in this prospectus and in the related prospectus supplement. | ||||
ERISA Considerations | If you are a fiduciary of any employee benefit plan or certain other retirement plans and arrangements, including individual retirement accounts, annuities, Keogh plans, and collective investment funds and separate accounts in which such plans, accounts, annuities or arrangements are invested, that is subject to the Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of the Internal Revenue Code of 1986, you should review with your legal advisor whether the purchase or holding of offered certificates could give rise to a transaction that is prohibited or is not otherwise permissible under the Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of the Internal Revenue Code of 1986. See “Certain ERISA Considerations” in this prospectus and “ERISA Considerations” in the related prospectus supplement. | |||
Legal Investment | Your offered certificates will constitute “mortgage related securities” for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended, only if the related prospectus supplement so provides. If your investment activities are subject to legal investment laws and regulations, regulatory capital requirements, or review by regulatory authorities, you may be subject to restrictions on investment in the Offered Certificates. You should consult your own legal advisor(s) to determine the suitability of and consequences to you of the purchase, ownership, and sale of the offered certificates. See “Legal Investment” in this prospectus and in the related prospectus supplement. | |||
Rating | At their respective dates of issuance, each class of offered certificates will be rated not lower than investment grade by one or more nationally recognized statistical rating organizations. See “Rating” in this prospectus and in the related prospectus supplement. |
● | the perceived liquidity of your offered certificates, anticipated cash flow of your offered certificates (which may vary widely depending upon the prepayment and default assumptions applied in respect of the underlying mortgage loans) and |
● | prevailing interest rates. |
● | the availability of alternative investments that offer higher yields or are perceived as being a better credit risk, having a less volatile market value or being more liquid, |
● | legal and other restrictions that prohibit a particular entity from investing in commercial mortgage-backed securities or limit the amount or types of commercial mortgage-backed securities that it may acquire, |
● | investors’ perceptions regarding the commercial and multifamily real estate markets, which may be adversely affected by, among other things, a decline in real estate values or an increase in defaults and foreclosures on mortgage loans secured by income-producing properties, and |
● | investors’ perceptions regarding the capital markets in general, which may be adversely affected by political, social and economic events that may be completely unrelated to the commercial and multifamily real estate markets. |
● | the payment priorities of the respective classes of the certificates of the same series, |
● | the order in which the principal balances of the respective classes of the certificates of the same series with balances will be reduced in connection with losses and default-related shortfalls, and |
● | the characteristics and quality of the mortgage loans in the related trust. |
● | the rate of prepayments and other unscheduled collections of principal on the underlying mortgage loans being faster or slower than you anticipated, or |
● | the rate of defaults on the underlying mortgage loans being faster, or the severity of losses on the underlying mortgage loans being greater, than you anticipated. |
● | to apro rata share of the prepayments on the mortgage loans that are distributable on such date, |
● | to a disproportionately large share of such prepayments, or |
● | to a disproportionately small share of such prepayments. |
● | any net income from that operation and management that does not consist of qualifying rents from real property within the meaning of Section 856(d) of the Internal Revenue Code, |
● | any rental income based on the net profits of a tenant or sub-tenant or allocable to a service that is non-customary in the area and for the type of building involved, and |
● | any rental income attributable to personal property leased in connection with a lease of real property, if the rent attributable to the personal property exceeds 15% of the total rent for the taxable year. |
● | changes in general or local economic conditions and/or specific industry segments; |
● | declines in real estate values; |
● | declines in rental or occupancy rates; |
● | increases in interest rates, real estate tax rates and other operating expenses; |
● | changes in governmental rules, regulations and fiscal policies, including environmental legislation; |
● | natural disasters such as earthquakes, hurricanes, floods, eruptions or other acts of God; |
● | Civil disturbances such as riots; and |
● | other circumstances, conditions or events beyond the control of a master servicer or a special servicer. |
● | Mortgaged properties that operate as hospitals and nursing homes are subject to significant governmental regulation of the ownership, operation, maintenance and financing of health care institutions; |
● | Hotel and motel properties are often operated pursuant to franchise, management or operating agreements that may be terminable by the franchisor or operator, and the transferability of a hotel’s operating, liquor and other licenses upon a transfer of the hotel, whether through purchase or foreclosure, is subject to local law requirements; |
● | The demand for hotel and motel properties is generally seasonal in nature and this seasonality can be expected to cause periodic fluctuations in room and other revenues, occupancy levels, room rates and operating expenses; |
● | The demand for hotel and motel properties may also be affected by changes in travel patterns caused by changes in energy prices, strikes, relocation of highways, construction of additional highways and other factors; |
● | The ability of a borrower to repay a mortgage loan secured by shares allocable to one or more cooperative dwelling units may depend on the ability of the dwelling units to generate sufficient rental income, which may be subject to rent control or stabilization laws, to cover both debt service on the loan as well as maintenance charges to the cooperative. Further, a mortgage loan secured by cooperative shares is subordinate to the mortgage, if any, on the cooperative apartment building; |
● | Mortgaged properties that are owned by the borrower under a condominium form of ownership are subject to the declaration, by-laws and other rules and regulations of the condominium association and specific local laws that relate to condominiums; |
● | Mortgaged properties that are multifamily properties may be subject to rent control or other tenant protective laws, which could impact the future cash flows of those properties; |
● | Self-storage properties are considered vulnerable to competition, because both acquisition costs and break-even occupancy are relatively low and conversion to alternative uses would generally require substantial capital expenditures; and |
● | Self-storage properties may have heightened environmental risk due to tenant privacy and inability of the borrower to readily access each unit. |
● | responding to changes in the local market; |
● | planning and implementing the rental structure; |
● | operating the property and providing building services; |
● | managing operating expenses; and |
● | assuring that maintenance and capital improvements are carried out in a timely fashion. |
● | was insolvent or was rendered insolvent by such obligation or transfer, |
● | was engaged in business or a transaction, or was about to engage in business or a transaction, for which any property remaining with the person was an unreasonably small capital or |
● | intended to, or believed that it would, incur debts that would be beyond the person’s ability to pay as such debts matured. |
● | such borrower was insolvent at the time of granting the lien, was rendered insolvent by the granting of the lien, or was left with inadequate capital, or was not able to pay its debts as they matured and |
● | the borrower did not, when it allowed its mortgaged property to be encumbered by a lien securing the entire indebtedness represented by the other mortgage loan, receive fair consideration or reasonably equivalent value for pledging such mortgaged property for the equal benefit of the other borrower. |
● | the availability of, and competition for, credit for commercial or multifamily real estate projects; |
● | the fair market value and condition of the related mortgaged property; |
● | prevailing interest rates; |
● | the borrower’s equity in the related mortgaged property; |
● | the borrower’s financial condition; |
● | the operating history and occupancy level of the related mortgaged property; |
● | changes in zoning or tax laws; |
● | with respect to multifamily mortgage loans, reductions in government assistance/rent subsidy programs or changes in rent control laws; |
● | with respect to hospitals, nursing homes and other healthcare facilities, changes in Medicaid and Medicare reimbursement rates; |
● | changes in competition in the relevant area; |
● | changes in rental rates in the relevant area; |
● | changes in governmental regulation and fiscal policy; |
● | prevailing general and regional economic conditions; |
● | the state of the fixed income and mortgage markets; and |
● | the availability of credit for multifamily rental or commercial properties. |
● | the exercise of those remedies would be inequitable or unjust; or |
● | the circumstances would render the acceleration unconscionable. |
● | establishing reserves for cleanup costs when they can be anticipated and estimated; or |
● | designating the trust as the named insured in specialized environmental insurance that is designed for secured lenders. |
● | war; |
● | revolution; |
● | terrorism; |
● | nuclear, biological or chemical materials; |
● | governmental actions; |
● | floods and other water-related causes; |
● | earth movement, including earthquakes, landslides and mudflows; |
● | wet or dry rot; |
● | vermin; and |
● | domestic animals. |
● | in a case where terrorism coverage is included under a policy, if the terrorist attack is, for example, nuclear, biological or chemical in nature, the policy may include an exclusion that precludes coverage for such terrorist attack; |
● | in certain cases, particularly where land values are high, the insurable value (at the time of loan origination) of the mortgaged property may be significantly lower than the principal balance of the mortgage loan; |
● | with respect to mortgaged properties located in flood prone areas where flood insurance is required, the related mortgaged property may only have federal flood insurance (which only covers up to $500,000), not private flood insurance, and the related mortgaged property may suffer losses that exceed the amounts covered by the federal flood insurance; |
● | the mortgage loan documents may limit the requirement to obtain related insurance to where the premium amounts are “commercially reasonable” or a similar limitation; and |
● | if reconstruction or major repairs are required, changes in laws may materially affect the borrower’s ability to effect any reconstruction or major repairs and/or may materially increase the costs of the reconstruction or repairs and insurance may not cover or sufficiently compensate the insured. |
● | operating entities with a business distinct from the operation of the mortgaged property with the associated liabilities and risks of operating an ongoing business; or |
● | entities or individuals that have liabilities unrelated to the mortgaged property. |
● | grant a debtor a reasonable time to cure a payment default on a mortgage loan; |
● | reduce monthly payments due under a mortgage loan; |
● | change the rate of interest due on a mortgage loan; or |
● | otherwise alter a mortgage loan’s repayment schedule. |
● | The liquidity of book-entry certificates in any secondary trading market that may develop may be limited because investors may be unwilling to purchase certificates for which they cannot obtain physical certificates. |
● | Your ability to pledge certificates to persons or entities that do not participate in the DTC system, or otherwise to take action in respect of the certificates, may be limited due to lack of a physical security representing the certificates. |
● | Your access to information regarding the certificates may be limited since conveyance of notices and other communications by The Depository Trust Company to its participating organizations, and directly and indirectly through those participating organizations to you, will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect at that time. |
● | You may experience some delay in receiving distributions of interest and principal on your certificates because distributions will be made by the trustee to DTC and DTC will then be required to credit those distributions to the accounts of its participating organizations and only then will they be credited to your account either directly or indirectly through DTC’s participating organizations. |
● | various types of multifamily (which include manufactured housing community) or commercial mortgage loans, |
● | mortgage participations, pass-through certificates or other mortgage-backed securities (“MBS”) that evidence interests in one or more of various types of multifamily or commercial mortgage loans, or |
● | a combination of mortgage loans and MBS. |
● | the term or duration of the prefunding period or revolving period; |
● | for prefunding periods, the amount of proceeds to be deposited in the prefunding account; |
● | for revolving periods, the maximum amount or additional assets that may be acquired during the revolving period, if applicable; |
● | the percentage of the asset pool and any class or series of securities represented by the prefunding account or the revolving account, if applicable; |
● | any triggers or events that will trigger limits on or terminate the prefunding or revolving period and the effects of such triggers, including, for revolving periods, the operation of the revolving period and amortization period; |
● | when and how new pool assets may be acquired during the prefunding or revolving period, and if, or when and how pool assets can be removed or substituted and any limits on the amount, type or speed with which pool assets may be acquired, substituted or removed; |
● | the acquisition or underwriting criteria for additional pool assets to be acquired during the prefunding or revolving period, including a description of any differences from the criteria used to select the current asset pool; |
● | which party has the authority to add, remove or substitute assets from the asset pool or determine if such pool assets meet the acquisition or underwriting criteria for additional pool assets and whether there will be any independent verification of such exercise of authority or determinations; |
● | any requirements to add or remove minimum amounts of pool assets and any effects of not meeting those requirements; |
● | if applicable, the procedures or standards for the temporary investment of funds in a prefunding or revolving account pending use (including the disposition of gains and losses on pending funds) and a description of the financial products or instruments eligible for such accounts; |
● | the circumstances under which funds in a prefunding account or revolving account will be returned to investors or otherwise disposed of; and |
● | whether, and if so, how investors will be notified of changes in the asset pool. |
● | residential properties consisting of five or more rental or cooperatively-owned dwelling units in high-rise, mid-rise or garden apartment buildings or other residential structures, and manufactured housing communities; and |
● | commercial properties consisting of office buildings, retail shopping facilities, such as shopping centers, malls and individual stores, hotels or motels, health care-related facilities (such as hospitals, skilled nursing facilities, nursing homes, congregate care facilities and senior housing), recreational vehicle parks, warehouse facilities, mini-warehouse facilities, self-storage facilities, industrial facilities, parking lots, restaurants, mixed use properties (that is, any combination of the foregoing), unimproved land and other income-generating commercial properties. |
● | the risk of delay in distributions while a deficiency judgment against the borrower is obtained, and |
● | the risk of loss if the deficiency judgment is not obtained and satisfied. Moreover, deficiency judgments may not be available in certain jurisdictions, or the particular mortgage loan may be a nonrecourse loan, which means that, absent special facts, recourse in the case of default will be limited to the mortgaged property and such other assets, if any, that were pledged to secure repayment of the mortgage loan. |
● | the Net Operating Income derived from the related mortgaged property for a twelve-month period to |
● | the annualized scheduled payments of principal and/or interest on the mortgage loan and any other loans senior thereto that are secured by the related mortgaged property. |
● | non-cash items such as depreciation and amortization, |
● | capital expenditures, and |
● | debt service on the related mortgage loan or on any other loans that are secured by such mortgaged property. |
● | the then outstanding principal balance of the mortgage loan and any other loans senior thereto that are secured by the related mortgaged property to |
● | the Value of the related mortgaged property. |
● | the greater the incentive of the borrower to perform under the terms of the related mortgage loan (in order to protect such equity) and |
● | the greater the cushion provided to the lender against loss on liquidation following a default. |
● | the market comparison method (recent resale value of comparable properties at the date of the appraisal), |
● | the cost replacement method (the cost of replacing the property at such date), |
● | the income capitalization method (a projection of value based upon the property’s projected net cash flow), or |
● | upon a selection from or interpolation of the values derived from such methods. |
● | have had original terms to maturity of not more than 40 years and |
● | provide for scheduled payments of principal, interest or both, to be made on due dates that occur monthly, quarterly, semiannually or annually. |
● | may provide for no accrual of interest or for accrual of interest thereon at an interest rate, that is fixed over its term or that adjusts from time to time, or that may be converted at the borrower’s election from an adjustable to a fixed interest rate or from a fixed to an adjustable interest rate, |
● | may provide for level payments to maturity or for payments that adjust from time to time to accommodate changes in the interest rate or to reflect the occurrence of certain events, and may permit negative amortization, |
● | may be fully amortizing or may be partially amortizing or non-amortizing, with a balloon payment due on its stated maturity date, and |
● | may prohibit over its term or for a certain period prepayments (the period of such prohibition, a “Lock-out Period” and its date of expiration, a “Lock-out Date”) and/or require payment of a premium or a yield maintenance payment (a “Prepayment Premium”) in connection with certain prepayments, or permit defeasance, in each case as described in the related prospectus supplement. |
● | the aggregate outstanding principal balance and the largest, smallest and average outstanding principal balance of the mortgage loans, |
● | the type or types of property that provide security for repayment of the mortgage loans, |
● | the earliest and latest origination date and maturity date (or other “anticipated repayment date”) of the mortgage loans, |
● | the original and remaining terms to maturity (or other “anticipated repayment date”) of the mortgage loans, or the respective ranges thereof, and the weighted average original and remaining terms to maturity (or other “anticipated repayment date”) of the mortgage loans, |
● | the Loan-to-Value Ratios of the mortgage loans (either at origination or as of a more recent date), or the range thereof, and the weighted average of such Loan-to-Value Ratios, |
● | the interest rates borne by the mortgage loans, or the range thereof, and the weighted average interest rate borne by the mortgage loans, |
● | with respect to mortgage loans with adjustable interest rates (“ARM Loans”), the index or indices upon which such adjustments are based, the adjustment dates, the range of gross margins and the weighted average gross margin, and any limits on interest rate adjustments at the time of any adjustment and over the life of the ARM Loan. The interest rate of any mortgage loan that bears interest at an adjustable interest rate will be based on an index (which may be increased or decreased by a specified margin, and/or subject to a cap or floor), which may be the London interbank offered rate for one month, three month, six month, or one-year, U.S. dollar deposits or may be another index, which in each case will be specified in the related prospectus supplement and will be an index reflecting interest paid on a debt, and will not be a commodities or securities index. |
● | information regarding the payment characteristics of the mortgage loans, including, without limitation, balloon payment and other amortization provisions, Lock-out Periods and Prepayment Premiums, |
● | the Debt Service Coverage Ratios of the mortgage loans (either at origination or as of a more recent date), or the range thereof, and the weighted average of such Debt Service Coverage Ratios, and |
● | the geographic distribution of the mortgaged properties on a state-by-state (or other jurisdiction) basis. |
● | private-label (that is, not issued, insured or guaranteed by the United States or any agency or instrumentality thereof) mortgage participations, mortgage pass-through certificates or other mortgage-backed securities or |
● | certificates issued and/or insured or guaranteed by the Federal Home Loan Mortgage Corporation (“FHLMC”), the Federal National Mortgage Association (“FNMA”), the Governmental National Mortgage Association (“GNMA”) or the Federal Agricultural Mortgage Corporation (“FAMC”), |
● | the aggregate approximate initial and outstanding principal amount(s) and type of the MBS to be included in the trust fund, |
● | the original and remaining term(s) to stated maturity of the MBS, if applicable, |
● | the pass-through or bond rate(s) of the MBS or the formula for determining such rate(s), |
● | the payment characteristics of the MBS, |
● | the MBS Issuer, MBS Servicer and MBS Trustee, as applicable, of each of the MBS, |
● | a description of the related credit support, if any, |
● | the circumstances under which the related underlying mortgage loans, or the MBS themselves, may be purchased prior to their maturity, |
● | the terms on which mortgage loans may be substituted for those originally underlying the MBS, |
● | if the MBS Issuer is required to file reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), how to locate such reports of the MBS Issuer; |
● | the market price of the MBS and the basis on which the market price was determined; |
● | the type of mortgage loans underlying the MBS and, to the extent appropriate under the circumstances, such other information in respect of the underlying mortgage loans described under “—Mortgage Loans—Mortgage Loan Information in Prospectus Supplements,” and |
● | the characteristics of any cash flow agreements that relate to the MBS. |
● | a letter of credit, |
● | a loan insurance policy, |
● | a certificate insurance policy, |
● | a guarantee, |
● | a surety bond, |
● | cross-support provisions, |
● | a reserve fund, |
● | or any combination thereof (any such coverage with respect to the certificate of any series, “Credit Support”). |
● | guaranteed investment contracts pursuant to which moneys held in the funds and accounts established for such series will be invested at a specified rate, |
● | interest rate exchange agreements, or |
● | interest rate cap or floor agreements, |
● | the pass-through rate for each class of offered certificates of such series or, in the case of a class of offered certificates with a variable or adjustable pass-through rate, the method of determining the pass-through rate, |
● | the effect, if any, of the prepayment of any mortgage loan on the pass-through rate of one or more classes of offered certificates, |
● | and whether the distributions of interest on the offered certificates of any class will be dependent, in whole or in part, on the performance of any obligor under a Cash Flow Agreement. |
● | the availability of mortgage credit, |
● | the relative economic vitality of the area in which the mortgaged properties are located, |
● | the quality of management of the mortgaged properties, |
● | the servicing of the mortgage loans, |
● | possible changes in tax laws and other opportunities for investment. |
● | converting to a fixed rate loan and thereby “locking in” such rate or |
● | taking advantage of a different index, margin or rate cap or floor on another adjustable rate mortgage loan. |
● | limits the amount by which its scheduled payment may adjust in response to a change in its interest rate, |
● | provides that its scheduled payment will adjust less frequently than its interest rate or |
● | provides for constant scheduled payments notwithstanding adjustments to its interest rate. |
● | whether such offered certificate was purchased at a premium or a discount and |
● | the extent to which the payment characteristics of such mortgage loans delay or accelerate the distributions of principal on such certificate (or, in the case of a interest-only certificate, delay or accelerate the reduction of the notional amount thereof). See “—Yield and Prepayment Considerations” above. |
● | a reduction in the entitlements to interest and/or the Certificate Balances of one or more such classes of certificates and/or |
● | establishing a priority of payments among such classes of certificates. |
● | amounts attributable to interest accrued but not currently distributable on one or more classes of Accrual Certificates, |
● | Excess Funds, or |
● | any other amounts described in the related prospectus supplement. |
● | interest received or advanced on the mortgage assets in the related trust fund that is in excess of the interest currently accrued on the certificates of such series, or |
● | prepayment premiums, payments from Equity Participations or any other amounts received on the mortgage assets in the related trust fund that do not constitute interest thereon or principal thereof. |
● | based on the principal balances of some or all of the mortgage assets (or portions thereof) in the related trust fund or |
● | equal to the Certificate Balances (or one or more portions thereof) of one or more other classes of certificates of the same series. Reference to a Notional Amount with respect to a class of interest-only certificates is solely for convenience in making certain calculations and does not represent the right to receive any distributions of principal or |
● | such other formula as may be specified in the related prospectus supplement. |
● | a reduction in the entitlements to interest and/or the Certificate Balances of one or more such classes of certificates and/or |
● | establishing a priority of payments among such classes of certificates. See “Description of Credit Support.” |
● | the final payment or other liquidation of the last mortgage asset subject thereto or the disposition of all property acquired upon foreclosure of any mortgage loan subject thereto and |
● | the payment (or provision for payment) to the certificateholders of that series of all amounts required to be paid to them pursuant to such Pooling Agreement. |
● | the depositor advises the Trustee in writing that DTC is no longer willing or able to discharge properly its responsibilities as depository with respect to such certificates and the depositor is unable to locate a qualified successor or |
● | the depositor, at its option, elects to terminate the book-entry system through DTC with respect to such certificates. Upon the occurrence of either of the events described in the preceding sentence, DTC will be required to notify all DTC Participants of the availability through DTC of Definitive Certificates. Upon surrender by DTC of the certificate or certificates representing a class of Book-Entry Certificates, together with instructions for registration, the trustee for the related series or other designated party will be required to issue to the Certificate Owners identified in such instructions the Definitive Certificates to which they are entitled, and thereafter the holders of such Definitive Certificates will be recognized as “Certificateholders” under and within the meaning of the related Pooling Agreement. |
● | the aggregate principal balance of the exchangeable certificates received in the exchange, immediately after the exchange, must equal the aggregate principal balance, immediately prior to the exchange, of the related depositable certificates (for purposes of this condition, an interest-only class will have a principal balance of zero); |
● | the aggregate amount of interest payable on any distribution date with respect to the exchangeable certificates received in the exchange must equal the aggregate amount of interest payable on such distribution date with respect to the related depositable certificates; and |
● | the class or classes of depositable certificates must be exchanged in the proportions, if any, described in the related prospectus supplement. |
● | A class of depositable certificates with a floating interest rate and a class of depositable certificates with an inverse floating interest rate may be exchangeable, together, for a class of exchangeable certificates with a fixed interest rate. In this case, the classes of depositable certificates with interest rates that vary with an index would produce, in the aggregate, an annual interest amount equal to that generated by the |
exchangeable class with a fixed interest rate. In addition, the aggregate principal balance of the two depositable classes with interest rates that vary with an index would equal the principal balance of the exchangeable class with the fixed interest rate. |
● | An interest-only class and a principal-only class of depositable certificates may be exchangeable, together, for a class of exchangeable certificates that is entitled to both principal and interest payments. The principal balance of the principal and interest class of exchangeable certificates would be equal to the principal balance of the depositable principal-only class, and the interest rate on the exchangeable principal and interest class would be a fixed rate that, when applied to the principal balance of this class, would generate an annual interest amount equal to the annual interest amount of the depositable interest-only class in distributions that have identical amounts and identical timing. |
● | Two or more classes of depositable principal and interest classes with different fixed interest rates may be exchangeable, together, for an exchangeable class that is entitled to both principal and interest payments, with a principal balance equal to the aggregate principal balance of the two or more depositable classes, and a fixed interest rate that, when applied to the principal balance of the exchangeable class, would generate an annual interest amount equal to the aggregate amount of annual interest of the two or more depositable classes. |
● | A class of depositable certificates that accretes all of its interest for a specified period, with the accreted amount added to the principal balance of the accreting class, and a class of depositable certificates that receives principal payments from these accretions may be exchangeable, together, for a single class of exchangeable certificates that receives payments of interest continuously from the first distribution date on which is receives interest until it is retired. |
● | A class of depositable certificates that is a planned principal class or targeted principal class, and a class of depositable certificates that only received principal payments on a distribution date if scheduled payments have been made on the planned principal class or targeted principal class, as applicable, may be exchangeable, together, for a class of exchangeable certificates that receives principal payments without regard to the schedule from the first distribution date on which it receives principal until it is retired. |
● | the address of the related mortgaged property and type of such property; |
● | the mortgage rate and, if applicable, the applicable index, gross margin, adjustment date and any rate cap information; |
● | the original and remaining term to maturity; |
● | the amortization term; and |
● | the original and outstanding principal balance. |
● | the mortgage note endorsed, without recourse, either in blank or to the order of such trustee (or its nominee), |
● | the mortgage with evidence of recording indicated thereon (except for any mortgage not returned from the public recording office), |
● | an assignment of the mortgage in blank or to the trustee (or its nominee) in recordable form, together with any intervening assignments of the mortgage with evidence of recording thereon (except for any such assignment not returned from the public recording office), and, |
● | if applicable, any riders or modifications to such mortgage note and mortgage, together with certain other documents at such times as set forth in the related Pooling Agreement. |
● | the accuracy of the information set forth for such mortgage loan on the schedule of mortgage loans appearing as an exhibit to the related Pooling Agreement; |
● | the enforceability of the related mortgage note and mortgage and the existence of title insurance insuring the lien priority of the related mortgage; |
● | the Warranting Party’s title to the mortgage loan and the authority of the Warranting Party to sell the mortgage loan; and |
● | the payment status of the mortgage loan. |
● | mortgage loans that are delinquent in respect of a specified number of scheduled payments; |
● | mortgage loans as to which the related borrower has entered into or consented to bankruptcy, appointment of a receiver or conservator or similar insolvency proceeding, or the related borrower has become the subject of a decree or order for such a proceeding which shall have remained in force undischarged or unstayed for a specified number of days; and |
● | REO Properties. |
● | monitor any mortgage loan that is in default, |
● | evaluate whether the causes of the default can be corrected over a reasonable period without significant impairment of the value of the related mortgaged property, |
● | initiate corrective action in cooperation with the Mortgagor if cure is likely, |
● | inspect the related mortgaged property and |
● | take such other actions as it deems necessary and appropriate. |
● | federal funds, |
● | uncertificated certificates of deposit, |
● | time deposits, |
● | bankers’ acceptances and repurchase agreements, |
● | certain United States dollar-denominated commercial paper, |
● | units of money market funds that maintain a constant net asset value and any other obligations or security acceptable to each rating agency. |
● | will not affect the amount or timing of any scheduled payments of principal or interest on the mortgage loan, |
● | will not, in the judgment of the master servicer or the special servicer, as the case may be, materially impair the security for the mortgage loan or reduce the likelihood of timely payment of amounts due thereon, and |
● | will not adversely affect the coverage under any applicable instrument of Credit Support. |
● | a material default on the mortgage loan has occurred or a payment default is imminent, |
● | such modification, waiver or amendment is reasonably likely to produce a greater recovery with respect to the mortgage loan, taking into account the time value of money, than would liquidation and |
● | such modification, waiver or amendment will not adversely affect the coverage under any applicable instrument of Credit Support. |
● | that such restoration will increase the proceeds to certificateholders on liquidation of the mortgage loan after reimbursement of the special servicer or the master servicer, as the case may be, for its expenses and |
● | that such expenses will be recoverable by it from related Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds and/or amounts drawn on any instrument or fund constituting Credit Support. |
● | the replacement cost of the improvements less physical depreciation and |
● | such proportion of the loss as the amount of insurance carried bears to the specified percentage of the full replacement cost of such improvements. |
● | a specified portion of the interest payments on each mortgage loan serviced by it, or if so specified in the related prospectus supplement, on each mortgage loan in the related trust fund, whether or not serviced by it; |
● | an additional specified portion of the interest payments on each mortgage loan then currently serviced by it; and |
● | subject to any specified limitations, a fixed percentage of some or all of the collections and proceeds received with respect to each mortgage loan which was at any time serviced by it, including mortgage loans for which servicing was returned to the master servicer. |
● | a statement of the party’s responsibility for assessing compliance with the servicing criteria applicable to it; |
● | a statement that the party used the criteria in Item 1122(d) of Regulation AB to assess compliance with the applicable servicing criteria; |
● | the party’s assessment of compliance with the applicable servicing criteria during and as of the end of the prior calendar month, setting forth any material instance of noncompliance identified by the party; and |
● | a statement that a registered public accounting firm has issued an attestation report on the party’s assessment of compliance with the applicable servicing criteria during and as of the end of the prior calendar month. |
● | the appointment of, and the acceptance of such appointment by, a successor thereto and receipt by the trustee of written confirmation from each applicable rating agency that such resignation and appointment |
will not have an adverse effect on the rating assigned by such rating agency to any class of certificates of such series or |
● | a determination that such obligations are no longer permissible under applicable law or are in material conflict by reason of applicable law with any other activities carried on by it. No such resignation will become effective until the trustee or other successor has assumed the obligations and duties of the resigning master servicer, special servicer or REMIC administrator, as the case may be, under the Pooling Agreement. |
● | any failure by the master servicer to distribute or cause to be distributed to the certificateholders of such series, or to remit to the trustee for distribution to such certificateholders, any amount required to be so distributed or remitted, which failure continues unremedied for five days (or such other period specified in the related prospectus supplement) after written notice thereof has been given to the master servicer by any other party to the related Pooling Agreement, or to the master servicer, with a copy to each other party to the related Pooling Agreement, by certificateholders entitled to not less than 25% (or such other percentage specified in the related prospectus supplement) of the Voting Rights for such series; |
● | any failure by the special servicer to remit to the master servicer or the trustee, as applicable, any amount required to be so remitted, which failure continues unremedied for five days (or such other period specified in the related prospectus supplement) after written notice thereof has been given to the special servicer by any other party to the related Pooling Agreement, or to the special servicer, with a copy to each other party to the related Pooling Agreement, by the certificateholders entitled to not less than 25% (or such other percentage specified in the related prospectus supplement) of the Voting Rights of such series; |
● | any failure by the master servicer or the special servicer duly to observe or perform in any material respect any of its other covenants or obligations under the related Pooling Agreement, which failure continues unremedied for sixty days (or such other period specified in the related prospectus supplement) after written notice thereof has been given to the master servicer or the special servicer, as the case may be, by any other party to the related Pooling Agreement, or to the master servicer or the special servicer, as the case may be, with a copy to each other party to the related Pooling Agreement, by certificateholders entitled to not less than 25% (or such other percentage specified in the related prospectus supplement) of the Voting Rights for such series; |
● | any failure by a REMIC administrator (if other than the trustee) duly to observe or perform in any material respect any of its covenants or obligations under the related Pooling Agreement, which failure continues unremedied for sixty days after written notice thereof has been given to the REMIC administrator by any other party to the related Pooling Agreement, or to the REMIC administrator, with a copy to each other party to the related Pooling Agreement, by certificateholders entitled to not less than 25% (or such other percentage specified in the related prospectus supplement) of the Voting Rights for such series; and |
● | certain events of insolvency, readjustment of debt, marshaling of assets and liabilities, or similar proceedings in respect of or relating to the master servicer, the special servicer or the REMIC administrator (if other than the trustee), and certain actions by or on behalf of the master servicer, the special servicer or the REMIC administrator (if other than the trustee) indicating its insolvency or inability to pay its obligations. Material variations to the foregoing Termination Event (other than to add thereto or shorten cure periods or eliminate notice requirements) will be specified in the related prospectus supplement. When a single entity acts as master servicer, special servicer and REMIC administrator, or in any two of the foregoing capacities, for any trust fund, a Termination Events in one capacity generally will constitute a Termination Event in each capacity; however, the related prospectus supplement may provide that a Termination Event will only constitute a Termination Event of such entity in the capacity in which the related event occurred. |
● | to cure any ambiguity, |
● | to correct or supplement any provision therein which may be inconsistent with any other provision therein or to correct any error, |
● | to change the timing and/or nature of deposits in the Certificate Account, provided that (A) such change would not adversely affect in any material respect the interests of any certificateholder, as evidenced by an opinion of counsel, and (B) such change would not adversely affect the then-current rating of any rated classes of certificates, as evidenced by a letter from each applicable rating agency, |
● | if a REMIC election has been made with respect to the related trust fund, to modify, eliminate or add to any of its provisions (A) to such extent as shall be necessary to maintain the qualification of the trust fund (or any designated portion thereof) as a REMIC or to avoid or minimize the risk of imposition of any tax on the related trust fund, provided that the trustee has received an opinion of counsel to the effect that (1) such action is necessary or desirable to maintain such qualification or to avoid or minimize such risk, and (2) such action will not adversely affect in any material respect the interests of any holder of certificates covered by the pooling agreement, or (B) to restrict the transfer of the Residual certificates, provided that the depositor has determined that the then-current ratings of the classes of the certificates that have been rated will not be adversely affected, as evidenced by a letter from each applicable rating agency, and that any such amendment will not give rise to any tax with respect to the transfer of the Residual certificates to a non-permitted transferee (See “Certain Federal Income Tax Consequences—Federal Income Tax |
Consequences for REMIC Certificates—Taxation of Residual Certificates—Tax Related Restrictions on Transfer of Residual Certificates” herein), |
● | to make any other provisions with respect to matters or questions arising under such pooling agreement or any other change, provided that such action will not adversely affect in any material respect the interests of any certificateholder, |
● | to amend specified provisions that are not material to holders of any class of certificates offered hereunder, |
● | for such other purposes as may be specified in the related prospectus supplement. |
● | reduce in any manner the amount of, or delay the timing of, payments received on mortgage loans which are required to be distributed on a certificate of any class without the consent of the holder of such certificate or |
● | reduce the aforesaid percentage of certificates of any class the holders of which are required to consent to any such amendment without the consent of the holders of all certificates of such class covered by such pooling agreement then outstanding. |
● | the subordination of one or more classes of certificates, |
● | cross-support provisions, |
● | overcollateralization, |
● | a letter of credit, |
● | a loan insurance policy, |
● | a certificate insurance policy, |
● | a guarantee, |
● | a surety bond, |
● | a reserve fund, |
● | or any combination thereof (any such coverage with respect to the certificate of any series, “Credit Support”). |
● | the nature and amount of coverage under such Credit Support, |
● | any conditions to payment thereunder not otherwise described herein, |
● | the conditions (if any) under which the amount of coverage under such Credit Support may be reduced and under which such Credit Support may be terminated or replaced and |
● | the material provisions relating to such Credit Support. Additionally, the related prospectus supplement will set forth certain information with respect to the obligor, if any, under any instrument of Credit Support. See “Risk Factors—Credit Support Limitations.” |
● | references to the mortgage loans include references to the mortgage loans underlying any MBS included in the mortgage assets; and |
● | where the applicable prospectus supplement provides for a fixed retained yield with respect to the mortgage loans underlying a series of certificates, references to the mortgage loans will be deemed to refer to that portion of the mortgage loans held by the trust fund which does not include the portion, if any, of the payments on the mortgage loan that is retained by the related mortgage asset seller. References to a “holder” or “certificateholder” in this discussion generally mean the beneficial owner of a certificate. |
● | the making of proper elections; |
● | compliance with the Pooling Agreement and other related documents and no amendments thereof; |
● | the accuracy of all representations made with respect to the mortgage loans; and |
● | compliance with any changes in the law, including any amendments to the Code or applicable Treasury regulations thereunder, each REMIC Pool will qualify as a REMIC. |
● | the fair market value of the real property security (including buildings and structural components thereof) is at least 80% of the principal balance of the related mortgage loan or mortgage loan underlying the MBS either at origination or as of the Startup Day (an original loan-to-value ratio of not more than 125% with respect to the real property security); or |
● | substantially all the proceeds of the mortgage loan or the underlying mortgage loan were used to acquire, improve or protect an interest in real property that, at the origination date, was the only security for the mortgage loan or underlying mortgage loan. |
● | in exchange for any qualified mortgage within a three-month period thereafter; or |
● | in exchange for a “defective obligation” within a two-year period thereafter. |
● | a mortgage in default or as to which default is reasonably foreseeable; |
● | a mortgage as to which a customary representation or warranty made at the time of transfer to the REMIC Pool has been breached; |
● | a mortgage that was fraudulently procured by the mortgagor; and |
● | a mortgage that was not in fact principally secured by real property (but only if such mortgage is disposed of within 90 days of discovery). |
● | one or more classes of regular interests; or |
● | a single class of residual interests on which distributions, if any, are madepro rata. |
● | the sum of (a) the present value of all of the remaining distributions to be made on the Regular Certificate as of the end of that accrual period that are included in the Regular Certificate’s stated redemption price at maturity and (b) the distributions made on the Regular Certificate during the accrual period that are included in the Regular Certificate’s stated redemption price at maturity; over |
● | the adjusted issue price of the Regular Certificate at the beginning of the accrual period. |
● | the yield to maturity of the Regular Certificate at the issue date; |
● | events (including actual prepayments) that have occurred prior to the end of the accrual period; and |
● | the Prepayment Assumption. |
● | the issue price does not exceed the original principal balance by more than a specified amount; and |
● | the interest compounds or is payable at least annually at current values of |
● | is exceeded by the then-current principal amount of the Regular Certificate; or |
● | in the case of a Regular Certificate having original issue discount, is exceeded by the adjusted issue price of such Regular Certificate at the time of purchase. |
● | on the basis of a constant interest rate; or |
● | in the ratio of stated interest allocable to the relevant period to the sum of the interest for such period plus the remaining interest as of the end of such period, or in the case of a Regular Certificate issued with original issue discount, in the ratio of original issue discount accrued for the relevant period to the sum of the original issue discount accrued for such period plus the remaining original issue discount as of the end of such period. |
● | “interest” includes stated interest, original issue discount,de minimis original issue discount, market discount andde minimis market discount, as adjusted by any amortizable bond premium or acquisition premium; and |
● | the debt instrument is treated as if the instrument were issued on the holder’s acquisition date in the amount of the holder’s adjusted basis immediately after acquisition. |
● | if a Regular Certificate is held as part of a “conversion transaction” as defined in Code Section 1258(c), up to the amount of interest that would have accrued on the Regular Certificateholder’s net investment in the conversion transaction at 120% of the appropriate applicable Federal rate under Code Section 1274(d) in effect at the time the taxpayer entered into the transaction minus any amount previously treated as ordinary income with respect to any prior disposition of property that was held as a part of such transaction; |
● | in the case of a non-corporate taxpayer, to the extent such taxpayer has made an election under Code Section 163(d)(4) to have net capital gains taxed as investment income at ordinary rates; or |
● | to the extent that such gain does not exceed the excess, if any, of (a) the amount that would have been includible in the gross income of the holder if its yield on such Regular Certificate were 110% of the applicable Federal rate as of the date of purchase, over (b) the amount of income actually includible in the gross income of such holder with respect to the Regular Certificate. |
● | the limitations on deductibility of investment interest expense and expenses for the production of income do not apply; |
● | all bad loans will be deductible as business bad debts; and |
● | the limitation on the deductibility of interest and expenses related to tax-exempt income will apply. |
● | the prepayment may be used in whole or in part to make distributions in reduction of principal on the Regular Certificates; and |
● | the discount on the mortgage loans which is includible in income may exceed the deduction allowed upon such distributions on those Regular Certificates on account of any unaccrued original issue discount relating to those Regular Certificates. |
● | in the same amounts and over the same period that the taxpayer uses for financial reporting purposes, provided that such period is not shorter than the period the REMIC is expected to generate taxable income; or |
● | ratably over the remaining anticipated weighted average life of all the regular and residual interests issued by the REMIC, determined based on actual distributions projected as remaining to be made on such interests under the Prepayment Assumption. |
● | 120% of the long-term applicable Federal rate that would have applied to the Residual Certificate (if it were a debt instrument) on the Startup Day under Code Section 1274(d), multiplied by; |
● | the adjusted issue price of such Residual Certificate at the beginning of such quarterly period. |
● | the present value of the total anticipated excess inclusions with respect to such Residual Certificate for periods after the transfer; and |
● | the highest marginal federal income tax rate applicable to corporations. |
● | the amount of excess inclusions on the Residual Certificate that are allocable to the interest in the Pass-Through Entity during the period such interest is held by such Disqualified Organization; and |
● | the highest marginal federal corporate income tax rate. |
● | “Disqualified Organization” means the United States, any state or political subdivision thereof, any foreign government, any international organization, any agency or instrumentality of any of the foregoing (provided, that such term does not include an instrumentality if all of its activities are subject to tax and a majority of its board of directors is not selected by any such governmental entity), any cooperative organization furnishing electric energy or providing telephone service to persons in rural areas as described in Code Section 1381(a)(2)(C), and any organization (other than a farmers’ cooperative described in Code Section 521) that is exempt from taxation under the Code unless such organization is subject to the tax on unrelated business income imposed by Code Section 511; |
● | “Pass-Through Entity” means any regulated investment company, real estate investment trust, common trust fund, partnership, trust or estate and certain corporations operating on a cooperative basis (except as |
may be provided in Treasury regulations, any person holding an interest in a Pass-Through Entity as a nominee for another will, with respect to such interest, be treated as a Pass-Through Entity); and |
● | an “electing large partnership” means any partnership having more than 100 members during the preceding tax year (other than certain service partnerships and commodity pools), which elect to apply simplified reporting provisions under the Code. |
● | the proposed transferee provides to the transferor and the trustee an affidavit providing its taxpayer identification number and stating that such transferee is the beneficial owner of the Residual Certificate, is not a Disqualified Organization and is not purchasing such Residual Certificates on behalf of a Disqualified Organization (i.e., as a broker, nominee or middleman thereof); and |
● | the transferor provides a statement in writing to the depositor and the trustee that it has no actual knowledge that such affidavit is false. |
● | the present value of the expected future distributions on the residual interest at least equals the product of the present value of the anticipated excess inclusions and the highest corporate income tax rate in effect for the year in which the transfer occurs; and |
● | the transferor reasonably expects that the transferee will receive distributions from the REMIC at or after the time at which taxes accrue on the anticipated excess inclusions in an amount sufficient to satisfy the accrued taxes. |
● | the transferor conducted, at the time of the transfer, a reasonable investigation of the financial condition of the transferee and found that the transferee historically had paid its debts as they came due and found no significant evidence to indicate that the transferee would not continue to pay its debts as they came due in the future; |
● | the transferee represents to the transferor that it understands that, as the holder of the noneconomic residual interest, the transferee may incur tax liabilities in excess of cash flows generated by the interest and that the transferee intends to pay taxes associated with holding the residual interest as they become due; and |
● | the transferee represents that it will not cause income from the Residual Certificate to be attributable to a foreign permanent establishment or fixed base, within the meaning of an applicable income tax treaty, of the transferee or any other U.S. Person (as defined below); and |
● | either the “formula test” or the “assets test” (each described below) is satisfied. |
● | the disposition of a qualified mortgage other than for (a) substitution within two years of the Startup Day for a defective (including a defaulted) obligation (or repurchase in lieu of substitution of a defective (including a defaulted) obligation at any time) or for any qualified mortgage within three months of the Startup Day, (b) foreclosure, default or imminent default of a qualified mortgage, (c) bankruptcy or insolvency of the REMIC Pool or (d) a qualified (complete) liquidation; |
● | the receipt of income from assets that are not the type of mortgages or investments that the REMIC Pool is permitted to hold; |
● | the receipt of compensation for services; or |
● | the receipt of gain from disposition of cash flow investments other than pursuant to a qualified liquidation. |
● | during the three months following the Startup Day; |
● | made to a qualified reserve fund by a Residual Certificateholder; |
● | in the nature of a guarantee; |
● | made to facilitate a qualified liquidation or clean-up call; and |
● | as otherwise permitted in Treasury regulations yet to be issued. |
● | to the appointment of the tax matters person as provided in the preceding sentence; and |
● | to the irrevocable designation of the master servicer as agent for performing the functions of the tax matters person. |
● | 3% of the excess, if any, of adjusted gross income over a threshold amount; or |
● | 80% of the amount of itemized deductions otherwise allowable for such year. |
● | is not a “10-percent shareholder” within the meaning of Code Section 871(h)(3)(B) or, or a controlled foreign corporation described in Code Section 881(c)(3)(C) related to, the REMIC (or possibly one or more mortgagors); and |
● | provides the trustee, or the person who would otherwise be required to withhold tax from such distributions under Code Section 1441 or 1442, with an appropriate statement, signed under penalties of perjury, identifying the beneficial owner and stating, among other things, that the beneficial owner of the Regular Certificate is a Non-U.S. Person. |
● | the mortgage loans (including mortgage loans underlying MBS) were issued after July 18, 1984; and |
● | the trust fund or segregated pool of assets therein (as to which a separate REMIC election will be made), to which the Residual Certificate relates, consists of obligations issued in “registered form” within the meaning of Code Section 163(f)(1). |
● | if a Standard Certificate is held as part of a “conversion transaction” as defined in Code Section 1258(c), up to the amount of interest that would have accrued on the Standard Certificateholder’s net investment in the conversion transaction at 120% of the appropriate applicable Federal rate in effect at the time the taxpayer entered into the transaction minus any amount previously treated as ordinary income with respect to any prior disposition of property that was held as a part of such transaction; or |
● | in the case of a non-corporate taxpayer, to the extent such taxpayer has made an election under Code Section 163(d)(4) to have net capital gains taxed as investment income at ordinary income rates. |
● | the depositor or any of its affiliates retains (for its own account or for purposes of resale), in the form of fixed retained yield or otherwise, an ownership interest in a portion of the payments on the mortgage loans; |
● | the master servicer is treated as having an ownership interest in the mortgage loans to the extent it is paid (or retains) servicing compensation in an amount greater than reasonable consideration for servicing the mortgage loans (see “Standard Certificates—Recharacterization of Servicing Fees” above); and |
● | certificates are issued in two or more classes or subclasses representing the right to non-pro-rata percentages of the interest and principal payments on the mortgage loans. |
● | the trust fund will be treated as a grantor trust under subpart E, Part 1 of subchapter J of the Code and not as an association taxable as a corporation or a “taxable mortgage pool” within the meaning of Code Section 7701(i); and |
● | unless otherwise specified in the related prospectus supplement, each Stripped Certificate should be treated as a single installment obligation for purposes of calculating original issue discount and gain or loss on disposition. |
● | the initial discount with respect to the Stripped Certificate was treated as zero under thede minimis rule; or |
● | no more than 100 basis points in excess of reasonable servicing is stripped off the related mortgage loans. |
● | one installment obligation consisting of such Stripped Certificate’spro rata share of the payments attributable to principal on each mortgage loan and a second installment obligation consisting of such Stripped Certificate’spro rata share of the payments attributable to interest on each mortgage loan; |
● | as many stripped bonds or stripped coupons as there are scheduled payments of principal and/or interest on each mortgage loan; or |
● | a separate installment obligation for each mortgage loan, representing the Stripped Certificate’spro rata share of payments of principal and/or interest to be made with respect thereto. Alternatively, the holder of one or more classes of Stripped Certificates may be treated as the owner of apro rata fractional undivided interest in each mortgage loan to the extent that such Stripped Certificate, or classes of Stripped Certificates in the aggregate, represent the samepro rata portion of principal and interest on each such mortgage loan, and a stripped bond or stripped coupon (as the case may be), treated as an installment obligation or contingent payment obligation, as to the remainder. Final regulations issued on December 28, 1992 regarding original issue discount on stripped obligations make the foregoing interpretations less likely to be applicable. The preamble to those regulations states that they are premised on the assumption that an aggregation approach is appropriate for determining whether original issue discount on a stripped bond or stripped coupon isde minimis, and solicits comments on appropriate rules for aggregating stripped bonds and stripped coupons under Code Section 1286. |
● | has investment discretion with respect to the investment of Plan Assets; or |
● | has authority or responsibility to give (or regularly gives) investment advice with respect to Plan Assets for a fee pursuant to an agreement or understanding that such advice will serve as a primary basis for investment decisions with respect to such Plan Assets. |
● | the trust fund must consist solely of assets of the type that have been included in other investment pools; |
● | certificates evidencing interests in such other investment pools must have been rated in one of the four highest categories by at least one Exemption Rating Agency for at least one year prior to the acquisition of certificates by or on behalf of a Tax Favored Plan or with Plan Assets; and |
● | certificates evidencing interests in such other investment pools must have been purchased by investors other than Tax Favored Plans for at least one year prior to any acquisition of certificates by or on behalf of a Tax Favored Plan or with Plan Assets. |
● | the direct or indirect sale, exchange or transfer of certificates in the initial issuance of certificates between the depositor or an Underwriter and a Tax Favored Plan when the person who has discretionary authority or renders investment advice with respect to the investment of Plan Assets in the certificates is (a) a mortgagor with respect to 5% or less of the fair market value of the trust fund or (b) an affiliate of such a person; |
● | the direct or indirect acquisition or disposition in the secondary market of certificates by a Tax Favored Plan; and |
● | the holding of certificates by a Tax Favored Plan or with Plan Assets. |
● | the transferee is an insurance company and the source of funds used to purchase such ERISA Restricted Certificates is an “insurance company general account” (as such term is defined in PTCE 95-60); and |
● | the conditions set forth in Sections I and III of PTCE 95-60 (or the conditions of a similar exemption under Similar Law) have been satisfied; and |
● | there is no Tax Favored Plan with respect to which the amount of such general account’s reserves and for contracts held by or on behalf of such Tax Favored Plan and all other Tax Favored Plans maintained by the same employer (or any “affiliate” thereof, as defined in PTCE 95-60) or by the same employee organization exceed 10% of the total of all reserves and liabilities of such general account (as determined under PTCE 95-60) as of the date of the acquisition of such ERISA Restricted Certificates. |
● | are rated in one of the two highest rating categories by at least one nationally recognized statistical rating organization (“NRSRO”), as such term is defined in Section 3(a)(62) of the Exchange Act; and |
● | are part of a series evidencing interests in a trust fund consisting of loans originated by certain types of originators specified in SMMEA and secured by first liens on real estate. |
Equity Participation | 36 | |||
1 | ERISA | 122 | ||
ERISA Plans | 122 | |||
1986 Act | 94 | ERISA Restricted Certificates | 125 | |
Excess Funds | 46 | |||
A | Excess Servicing | 115 | ||
Exchange Act | 39 | |||
Accrual Certificates | 48 | Exemption | 123 | |
Accrued Certificate Interest | 48 | Exemption Rating Agency | 124 | |
Act | 86 | |||
ADA | 89 | F | ||
Affiliate | 125 | |||
ARM Loans | 37 | FAMC | 38 | |
Available Distribution Amount | 47 | FHLMC | 38 | |
Financial Intermediary | 53 | |||
B | FNMA | 38 | ||
Bankruptcy Code | 79 | G | ||
Book-Entry Certificates | 47 | |||
GACC | 30 | |||
C | Garn Act | 88 | ||
GNMA | 38 | |||
Cash Flow Agreement | 40 | |||
Certificate Account | 39 | I | ||
Certificate Balance | 49 | |||
Certificate Owner | 53 | Insurance Proceeds | 62 | |
CMBS | 31 | IRS | 65, 91 | |
Code | 91 | |||
Companion Class | 49 | L | ||
Controlled Amortization Class | 49 | |||
CPR | 43 | Letter of Credit Bank | 75 | |
Credit Support | 40, 74 | Liquidation Proceeds | 62 | |
Cut-off Date | 49 | Loan-to-Value Ratio | 35 | |
Lock-out Date | 36 | |||
D | Lock-out Period | 36 | ||
DBBM | 31 | M | ||
DBMC | 31 | |||
DBSI | 123 | MBS | 32 | |
Debt Service Coverage Ratio | 34 | MBS Agreement | 38 | |
Definitive Certificates | 47 | MBS Issuer | 38 | |
Determination Date | 41, 47 | MBS Servicer | 38 | |
Disqualified Organization | 105 | MBS Trustee | 38 | |
Distribution Date Statement | 51 | |||
DOL | 122 | N | ||
DTC | 53 | |||
DTC Participants | 53 | Net Leases | 35 | |
Due Period | 41 | Net Operating Income | 34 | |
Due-on-Sale | 80 | Nonrecoverable Advance | 50 | |
E | O | |||
EC Trust | 120 | OID Regulations | 94 | |
Electing Large Partnership | 105 |
P | Securities Act | 38 | ||
Similar Law | 122 | |||
Parties in Interest | 122 | SMMEA | 126 | |
Pass-Through Entity | 105 | SPA | 43 | |
Patriot Act | 90 | Standard Certificateholder | 113 | |
Percentage Interest | 47 | Standard Certificates | 113 | |
Permitted Investments | 62 | Stripped Certificateholder | 118 | |
Plan Asset Regulations | 122 | Stripped Certificates | 113, 114 | |
Plan Assets | 122 | Stripped Certificates | 116 | |
Plans | 122 | |||
Pooling Agreement | 57 | T | ||
Prepayment Assumption | 95 | |||
Prepayment Interest Shortfall | 41 | Tax Exempt Investor | 126 | |
Prepayment Premium | 36 | Tax Favored Plans | 122 | |
Purchase Price | 58 | Termination Events | 70 | |
Title V | 88 | |||
R | Treasury | 91 | ||
Record Date | 47 | U | ||
Regular Certificateholder | 94 | |||
Regular Certificates | 91, 112 | UBTI | 126 | |
Related Proceeds | 50 | UCC | 77 | |
Relief Act | 89 | Underwriter | 123 | |
REMIC | 91 | |||
REMIC Certificates | 91 | V | ||
REMIC Pool | 91 | |||
REMIC Regulations | 91 | Value | 35 | |
REO Property | 60 | Voting Rights | 52 | |
Requirements | 90 | |||
Residual Certificateholders | 101 | W | ||
S | Warranting Party | 59 | ||
SEC | 53 |
[THIS PAGE INTENTIONALLY BLANK]
No dealer, salesperson or other person is authorized to giveany information or to represent anything not contained in this freewriting prospectus. You must not rely on any unauthorizedinformation or representations. This free writing prospectus and theattached prospectus is an offer to sell only the offered certificates, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this free writing prospectus is current only as of its date. |
$803,520,000 (Approximate)
Deutsche Bank Securities
Cantor Fitzgerald & Co.
KeyBanc Capital Markets
CastleOak Securities, L.P.
Goldman, Sachs & Co.
COMM 2015-CCRE27 Mortgage Trust
Commercial Mortgage Pass-Through Certificates
FREE WRITING PROSPECTUS
October , 2015 | ||
TABLE OF CONTENTS | |||
FREE WRITING PROSPECTUS | |||
EXECUTIVE SUMMARY | 15 | ||
SUMMARY | 19 | ||
RISK FACTORS | 61 | ||
THE SPONSORS, MORTGAGE LOAN SELLERS AND ORIGINATORS | 149 | ||
THE DEPOSITOR | 175 | ||
THE ISSUING ENTITY | 176 | ||
THE SERVICERS | 177 | ||
THE TRUSTEE, CERTIFICATE ADMINISTRATOR AND CUSTODIAN | 200 | ||
PAYING AGENT, CERTIFICATE REGISTRAR, CUSTODIAN AND | |||
AUTHENTICATING AGENT | 206 | ||
THE OPERATING ADVISOR | 207 | ||
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS | 207 | ||
DESCRIPTION OF THE MORTGAGE POOL | 209 | ||
DESCRIPTION OF THE OFFERED CERTIFICATES | 250 | ||
YIELD AND MATURITY CONSIDERATIONS | 283 | ||
THE POOLING AND SERVICING AGREEMENT | 290 | ||
MATERIAL FEDERAL INCOME TAX CONSEQUENCES | 358 | ||
CERTAIN STATE AND LOCAL TAX CONSIDERATIONS | 361 | ||
ERISA CONSIDERATIONS | 361 | ||
LEGAL INVESTMENT | 364 | ||
LEGAL MATTERS | 364 | ||
RATINGS | 364 | ||
LEGAL ASPECTS OF MORTGAGE LOANS IN TEXAS, FLORIDA AND | |||
CALIFORNIA | 366 | ||
INDEX OF DEFINED TERMS | 369 | ||
ANNEX A-1 – CERTAIN CHARACTERISTICS OF THE MORTGAGE | |||
LOAN | A-1-1 | ||
ANNEX A-2 – CERTAIN POOL CHARACTERISTICS OF THE | |||
MORTGAGE LOANS AND MORTGAGED PROPERTIES | A-2-1 | ||
ANNEX A-3 – CLASS A-SB PLANNED PRINCIPAL BALANCE | |||
SCHEDULE | A-3-1 | ||
ANNEX B – DESCRIPTION OF THE TOP 20 MORTGAGE LOANS | B-1 | ||
ANNEX C – GLOBAL CLEARANCE, SETTLEMENT AND TAX | |||
DOCUMENTATION PROCEDURES | C-1 | ||
ANNEX D – DECREMENT TABLES | D-1 | ||
ANNEX E – PRICE/YIELD TABLES | E-1 | ||
ANNEX F – MORTGAGE LOAN SELLER REPRESENTATIONS AND | |||
WARRANTIES | F-1 | ||
ANNEX G – EXCEPTIONS TO MORTGAGE LOAN SELLER | |||
REPRESENTATIONS AND WARRANTIES | G-1 | ||
ANNEX H – AMORTIZATION SCHEDULE FOR THE ATLANTA | |||
MULTIFAMILY PORTFOLIO MORTGAGE LOAN | H-1 | ||
PROSPECTUS | |||
SUMMARY OF PROSPECTUS | 1 | ||
RISK FACTORS | 10 | ||
THE SPONSOR | 30 | ||
OTHER SPONSORS, MORTGAGE LOAN SELLERS AND ORIGINATORS | 31 | ||
THE DEPOSITOR | 31 | ||
DESCRIPTION OF THE TRUST FUNDS | 31 | ||
YIELD AND MATURITY CONSIDERATIONS | 40 | ||
DESCRIPTION OF THE CERTIFICATES | 46 | ||
DESCRIPTION OF THE POOLING AGREEMENTS | 57 | ||
DESCRIPTION OF CREDIT SUPPORT | 74 | ||
CASH FLOW AND DERIVATIVES AGREEMENTS | 76 | ||
CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS | 76 | ||
CERTAIN FEDERAL INCOME TAX CONSEQUENCES | 90 | ||
FEDERAL INCOME TAX CONSEQUENCES FOR REMIC CERTIFICATES | 91 | ||
FEDERAL INCOME TAX CONSEQUENCES FOR CERTIFICATES AS TO | |||
WHICH NO REMIC ELECTION IS MADE | 113 | ||
STATE, LOCAL AND OTHER TAX CONSEQUENCES | 121 | ||
CERTAIN ERISA CONSIDERATIONS | 122 | ||
LEGAL INVESTMENT | 126 | ||
USE OF PROCEEDS | 127 | ||
METHOD OF DISTRIBUTION | 127 | ||
LEGAL MATTERS | 128 | ||
FINANCIAL INFORMATION | 129 | ||
RATING | 129 | ||
INDEX OF DEFINED TERMS | 130 | ||