FILED PURSUANT TO RULE 424(b)(5) | ||
REGISTRATION FILE NO.: 333-193376-25 | ||
Prospectus Supplement
(To Prospectus, Dated September 3, 2014)
$828,786,000 (Approximate)
COMM 2015-LC23 Mortgage Trust
Commercial Mortgage Pass-Through Certificates
German American Capital Corporation
Ladder Capital Finance LLC
Cantor Commercial Real Estate Lending, L.P.
Jefferies LoanCore LLC
Sponsors and Mortgage Loan Sellers
Deutsche Mortgage & Asset Receiving Corporation
Depositor
COMM 2015-LC23 Mortgage Trust
Issuing Entity
The COMM 2015-LC23 Mortgage Trust Commercial Mortgage Pass-Through Certificates will represent beneficial ownership interests in the issuing entity, COMM 2015-LC23 Mortgage Trust. The issuing entity’s assets will primarily be 62 fixed-rate mortgage loans, secured by first liens on 120 commercial, multifamily and manufactured housing community properties. The COMM 2015-LC23 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 December 2015. Credit enhancement will be provided by certain classes of subordinate certificates that will be subordinate to certain classes of certificates as described in “Description of the Offered Certificates—Subordination” to this prospectus supplement.
Certain characteristics of the offered certificates include:
Class | Initial Certificate Balance | Approximate | Assumed Final | |||||
Class A-1 | $ | 39,109,000 | 1.811%(5) | September 2020 | ||||
Class A-2 | $ | 210,190,000 | 3.221%(5) | October 2020 | ||||
Class A-SB | $ | 53,371,000 | 3.598%(5) | July 2025 | ||||
Class A-3 | $ | 125,000,000 | 3.521%(5) | September 2025 | ||||
Class A-4 | $ | 244,968,000 | 3.774%(5) | October 2025 | ||||
Class XP-A | $ | 733,896,000 | (6) | 0.908%(6) | June 2025 | |||
Class XS-A | $ | 733,896,000 | (6) | 0.250%(6) | October 2025 | |||
Class A-M | $ | 61,258,000 | 4.158%(5) | October 2025 | ||||
Class B | $ | 51,649,000 | 4.459%(5) | October 2025 | ||||
Class C | $ | 43,241,000 | 4.646%(5) | October 2025 |
(Footnotes to table to begin on page S-13)
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined that this prospectus supplement or the accompanying 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 S-67 of this prospectus supplement 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 prospectus supplement).
With respect to this offering, Deutsche Bank Securities Inc. and Cantor Fitzgerald & Co. are acting as 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. Jefferies LLC is acting as co-manager. The underwriters will offer the offered certificates in the amounts set forth in this 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. and Jefferies LLC will be required to purchase the offered certificates (in the amounts set forth under “Method of Distribution (Underwriter Conflicts of Interest)” in this prospectus supplement) from Deutsche Mortgage & Asset Receiving Corporation, subject to certain conditions. Deutsche Mortgage & Asset Receiving Corporation expects to receive from the sale of the offered certificates approximately 108.2137218688% of the initial aggregate certificate balance of the offered certificates with a principal balance plus accrued interest before deducting expenses payable by it. The underwriters expect to deliver the offered certificates to purchasers on or about November 17, 2015.
Deutsche Bank Securities | Cantor Fitzgerald & Co. |
Joint Bookrunning Managers and Co-Lead Managers |
Jefferies |
Co-Manager |
November 16, 2015 |
TABLE OF CONTENTS
EXECUTIVE SUMMARY | S-13 | Risks of Co-Tenancy and Other Early | ||
SUMMARY | S-16 | Termination Provisions in Retail | ||
RISK FACTORS | S-67 | and Office Leases | S-105 | |
General Risks | S-67 | Condominium Properties Have Special | ||
The Offered Certificates May Not Be a | Risks | S-106 | ||
Suitable Investment for You | S-67 | Risks Related to Construction, | ||
Risks Related to Market Conditions | S-67 | Development, Redevelopment, | ||
The Credit Crisis and Downturn in the | Renovation and Repairs at | |||
Real Estate Market Have | Mortgaged Properties | S-108 | ||
Adversely Affected the Value of | Competition May Adversely Affect the | |||
Commercial Mortgage-Backed | Performance of the Mortgaged | |||
Securities | S-67 | Property | S-110 | |
The Volatile Economy and Credit Crisis | Options and Other Purchase Rights May | |||
May Increase Loan Defaults and | Affect Value or Hinder Recovery | |||
Affect the Value and Liquidity of | with Respect to the Mortgaged | |||
Your Investment | S-68 | Properties | S-110 | |
General Conditions in the Commercial | The Sellers of the Mortgage Loans Are | |||
Real Estate Mortgage Markets May | Subject to Bankruptcy or | |||
Adversely Affect the Performance | Insolvency Laws That May Affect | |||
of the Offered Certificates | S-69 | the Issuing Entity’s Ownership of | ||
Risks Related to the Mortgage Loans | S-70 | the Mortgage Loans | S-110 | |
Mortgage Loans Are Non-recourse and | Environmental Issues at the Mortgaged | |||
Are Not Insured or Guaranteed | S-70 | Properties May Adversely Affect | ||
The Offered Certificates Are Limited | Payments on Your Certificates | S-111 | ||
Obligations and Payments Will Be | Potential Issuing Entity Liability Related | |||
Primarily Derived from the | to a Materially Adverse | |||
Mortgage Loans | S-71 | Environmental Condition | S-112 | |
Commercial Lending Is Dependent upon | Borrower May Be Unable To Repay the | |||
Net Operating Income | S-72 | Remaining Principal Balance on | ||
Mortgage Loans Have Not Been | the Maturity Date or Anticipated | |||
Reunderwritten Since Origination | S-74 | Repayment Date and Longer | ||
The Prospective Performance of the | Amortization Schedules and | |||
Commercial, Multifamily and | Interest-Only Provisions May | |||
Manufactured Housing Community | Increase Risk | S-115 | ||
Mortgage Loans Included in the | Risks Relating to Borrower Organization | |||
Issuing Entity Should Be Evaluated | or Structure | S-116 | ||
Separately from the Performance | Tenancies in Common May Hinder | |||
of the Mortgage Loans in Any of | Recovery | S-117 | ||
the Depositor’s Other Trusts | S-74 | Risks Related to Additional Debt | S-117 | |
Some Mortgaged Properties May Not | Bankruptcy Proceedings Entail Certain | |||
Be Readily Convertible to | Risks | S-119 | ||
Alternative Uses | S-75 | Risks Related to Loan Sponsor | ||
Limitations of Appraisals | S-76 | Guaranties | S-120 | |
Property Value May Be Adversely | Lack of Skillful Property Management | |||
Affected Even When Current | Entails Risks | S-121 | ||
Operating Income Is Not | S-77 | Risks of Inspections Relating to | ||
Risks Related to Tenants | S-77 | Property | S-122 | |
Risks Related to Mortgage Loan | World Events and Natural (or Other) | |||
Concentration | S-89 | Disasters Could Have an Adverse | ||
Risks Related to Borrower | Impact on the Mortgaged | |||
Concentration | S-89 | Properties and Could Reduce the | ||
Risks Relating to Property Type | Cash Flow Available To Make | |||
Concentration | S-90 | Payments on the Certificates | S-122 | |
Retail Properties Have Special Risks | S-92 | Inadequate Property Insurance | ||
Office Properties Have Special Risks | S-95 | Coverage Could Have an Adverse | ||
Hospitality Properties Have Special | Impact on the Mortgaged | |||
Risks | S-96 | Properties | S-123 | |
Multifamily Properties Have Special | Risks Associated with Blanket Insurance | |||
Risks | S-100 | Policies or Self-Insurance | S-124 | |
Industrial Properties Have Special Risks | S-102 | Availability of Terrorism Insurance | S-125 | |
Manufactured Housing Community | Appraisals and Market Studies Have | |||
Properties Have Special Risks | S-103 | Certain Limitations | S-127 | |
Mixed Use Properties Have Special | Risks Related to Historic Tax Credits | S-127 | ||
Risks | S-104 | Increases in Real Estate Taxes Due to | ||
Self Storage Properties Have Special | Termination of a PILOT Program or | |||
Risks | S-105 | Other Tax Abatement |
S-3 |
TABLE OF CONTENTS
(Continued)
Arrangements May Reduce | Yield Considerations | S-155 | ||
Payments to Certificateholders | S-128 | Optional Early Termination of the | ||
Risks Related to Enforceability | S-129 | Issuing Entity May Result in an | ||
Risks Related to Enforceability of | Adverse Impact on Your Yield or | |||
Prepayment Premiums, Yield | May Result in a Loss | S-157 | ||
Maintenance Charges and | A Mortgage Loan Seller May Not Be | |||
Defeasance Provisions | S-129 | Able To Make a Required | ||
The Master Servicer or the Special | Repurchase or Substitution of a | |||
Servicer May Experience Difficulty | Defective Mortgage Loan | S-157 | ||
in Collecting Rents upon the | Any Loss of Value Payment Made by a | |||
Default and/or Bankruptcy of a | Mortgage Loan Seller May Prove | |||
Borrower | S-129 | To Be Insufficient to Cover All | ||
Risks Related to Mortgage Loans | Losses on a Defective Mortgage | |||
Secured by Multiple Properties | S-130 | Loan | S-157 | |
State Law Limitations Entail Certain | Risks Related to Borrower Default | S-158 | ||
Risks | S-131 | Risks Related to Modification of | ||
Mortgage Loans Secured by Leasehold | Mortgage Loans with Balloon | |||
Interests May Expose Investors to | Payments | S-159 | ||
Greater Risks of Default and Loss | S-131 | Risks Related to Certain Payments | S-159 | |
Potential Absence of Attornment | Risks of Limited Liquidity and Market | |||
Provisions Entails Risks | S-133 | Value | S-159 | |
Risks Related to Zoning Laws | S-134 | The Limited Nature of Ongoing | ||
Risks Related to Litigation and | Information May Make It Difficult for | |||
Condemnation | S-135 | You To Resell Your Certificates | S-160 | |
Prior Bankruptcies, Defaults or Other | Risks Related to Factors Unrelated to | |||
Proceedings May Be Relevant to | the Performance of the Certificates | |||
Future Performance | S-135 | and the Mortgage Loans, Such as | ||
Risks Relating to Costs of Compliance | Fluctuations in Interest Rates and | |||
with Applicable Laws and | the Supply and Demand of CMBS | |||
Regulations | S-139 | Generally | S-160 | |
There May Be Changes in the Tax Laws | Credit Support May Not Cover All Types | |||
of the United State Virgin Islands; | of Losses | S-161 | ||
No Gross-Up | S-139 | Disproportionate Benefits May Be Given | ||
Risks Related to Conflicts of Interest | S-139 | to Certain Classes | S-161 | |
Potential Conflicts of Interest of the | The Amount of Credit Support Will Be | |||
Master Servicer and the Special | Limited | S-161 | ||
Servicer | S-139 | REMIC Status | S-161 | |
Special Servicer May Be Directed To | State and Local Tax Considerations | S-161 | ||
Take Actions | S-140 | Certain Federal Tax Consideration | ||
The Servicing of Servicing Shift Loan | Regarding Original Issue Discount | S-162 | ||
Combinations Will Shift to Others | S-141 | Tax Considerations Related to | ||
Potential Conflicts of Interest of the | Foreclosure | S-162 | ||
Operating Advisor | S-142 | Changes to REMIC Restrictions on | ||
Potential Conflicts of Interest of the | Loan Modifications May Impact an | |||
Underwriters and Their Affiliates | S-143 | Investment in the Certificates | S-163 | |
Potential Conflicts of Interest in the | Risks Relating to Lack of | |||
Selection of the Underlying | Certificateholder Control over the | |||
Mortgage Loans | S-144 | Issuing Entity | S-163 | |
Related Parties May Acquire Certificates | Different Timing of Mortgage | |||
or Experience Other Conflicts | S-144 | Loan Amortization Poses Certain | ||
Conflicts Between Property Managers | Risks | S-164 | ||
and the Borrowers | S-146 | Ratings of the Offered Certificates | S-164 | |
Conflicts Between Certificateholders | Combination or “Layering” of Multiple | |||
and Holders of Companion Loans | S-147 | Risks May Significantly Increase | ||
Other Potential Conflicts of Interest | S-148 | Risk of Loss | S-166 | |
Risks Related to the Offered Certificates | S-151 | THE SPONSORS, MORTGAGE LOAN SELLERS | ||
Legal and Regulatory Provisions | AND ORIGINATORS | S-166 | ||
Affecting Investors Could | German American Capital Corporation | S-166 | ||
Adversely Affect the Liquidity of the | General | S-166 | ||
Offered Certificates | S-151 | GACC’s Securitization Program | S-167 | |
Your Yield May Be Adversely Affected | Review of GACC Mortgage Loans | S-168 | ||
By Prepayments Resulting From | GACC’s Underwriting Standards | S-169 | ||
Earnout Reserves | S-153 | Compliance with Rule 15Ga-1 under the | ||
Risks Related to Prepayments and | Exchange Act | S-173 | ||
Repurchases of Mortgage Loans | S-153 | Ladder Capital Finance LLC | S-174 | |
Limited Obligations | S-155 | General | S-174 |
S-4 |
TABLE OF CONTENTS
(Continued)
Ladder Capital Group’s Securitization | DESCRIPTION OF THE OFFERED CERTIFICATES | S-280 | ||
Program | S-174 | General | S-280 | |
Review of LCF Mortgage Loans | S-176 | Distributions | S-282 | |
Ladder’s Underwriting Standards | S-177 | Fees and Expenses | S-290 | |
Assessments of Property Condition | S-179 | Distribution of Excess Interest | S-297 | |
Compliance with Rule 15Ga-1 under the | Class A-SB Planned Principal Balance | S-297 | ||
Exchange Act | S-183 | Prepayment Premiums and Yield | ||
Cantor Commercial Real Estate Lending, | Maintenance Charges | S-297 | ||
L.P. | S-183 | Application Priority of Mortgage Loan | ||
General | S-183 | Collections or Loan Combination | ||
CCRE Lending’s Loan Origination and | Collections | S-299 | ||
Acquisition History | S-183 | Assumed Final Distribution Date | S-301 | |
Review of CCRE Mortgage Loans | S-184 | Realized Losses | S-302 | |
CCRE Lending’s Underwriting | Prepayment Interest Shortfalls | S-303 | ||
Standards | S-185 | Subordination | S-305 | |
Assessments of Property Condition | S-187 | Appraisal Reductions | S-305 | |
Compliance with Rule 15Ga-1 under the | Delivery, Form and Denomination | S-310 | ||
Exchange Act | S-190 | Book-Entry Registration | S-311 | |
Jefferies LoanCore LLC | S-191 | Definitive Certificates | S-313 | |
General | S-191 | Certificateholder Communication | S-313 | |
JLC’s Commercial Mortgage | Access to Certificateholders’ Names | |||
Securitization Program | S-191 | and Addresses | S-313 | |
Review of JLC Mortgage Loans | S-192 | Special Notices | S-313 | |
Jefferies LoanCore’s Underwriting | Retention of Certain Certificates by | |||
Standards | S-193 | Affiliates of Transaction Parties | S-314 | |
Assessments of Property Condition | S-195 | YIELD AND MATURITY CONSIDERATIONS | S-314 | |
THE DEPOSITOR | S-199 | Yield Considerations | S-314 | |
THE ISSUING ENTITY | S-199 | Weighted Average Life | S-316 | |
THE SERVICERS | S-201 | Certain Price/Yield Tables | S-319 | |
Generally | S-201 | Yield Sensitivity of the Class XP-A and | ||
The Master Servicer | S-201 | Class XS-A Certificates | S-319 | |
The Special Servicer | S-204 | THE POOLING AND SERVICING AGREEMENT | S-320 | |
Replacement of the Special Servicer | S-207 | General | S-320 | |
The Primary Servicer | S-211 | Special Note Regarding Servicing Shift | ||
THE TRUSTEE | S-218 | Loan Combinations | S-320 | |
Certain Matters Regarding the Trustee | S-219 | Servicing of the Mortgage Loans and | ||
Resignation and Removal of the Trustee | S-220 | Serviced Loan Combinations; | ||
THE CERTIFICATE ADMINISTRATOR AND | Collection of Payments | S-321 | ||
CUSTODIAN | S-221 | The Directing Holder | S-323 | |
Certain Matters Regarding the Certificate | Limitation on Liability of Directing Holder | S-329 | ||
Administrator | S-222 | The Operating Advisor | S-330 | |
Trustee and Certificate Administrator Fee | S-223 | General | S-330 | |
PAYING AGENT, CERTIFICATE REGISTRAR, | Role of Operating Advisor While No | |||
CUSTODIAN AND AUTHENTICATING AGENT | S-224 | Control Termination Event Has | ||
THE OPERATING ADVISOR | S-224 | Occurred and Is Continuing | S-330 | |
CERTAIN RELATIONSHIPS AND RELATED | Role of Operating Advisor While a | |||
TRANSACTIONS | S-225 | Control Termination Event Has | ||
DESCRIPTION OF THE MORTGAGE POOL | S-228 | Occurred and Is Continuing | S-331 | |
General | S-228 | Annual Report | S-333 | |
Security for the Mortgage Loans | S-231 | Replacement of the Special Servicer | S-333 | |
Significant Mortgage Loans | S-232 | Termination of the Operating Advisor | ||
Sale of the Mortgage Loans | S-233 | For Cause | S-334 | |
Certain Underwriting Matters | S-234 | Rights upon Operating Advisor | ||
Loan Combinations | S-238 | Termination Event | S-335 | |
Equity Inns Portfolio Loan Combination | S-238 | Termination of the Operating Advisor | ||
32 Avenue of the Americas Loan | Without Cause | S-335 | ||
Combination | S-240 | Resignation of the Operating Advisor | S-336 | |
11 Madison Avenue Loan Combination | S-243 | Operating Advisor Compensation | S-336 | |
Harvey Building Products Portfolio Loan | Advances | S-337 | ||
Combination | S-253 | Accounts | S-342 | |
Springfield Mall Loan Combination | S-255 | Enforcement of “Due-On-Sale” and “Due- | ||
40 Wall Street Loan Combination | S-257 | On-Encumbrance” Clauses | S-344 | |
Additional Mortgage Loan Information | S-259 | Inspections | S-346 | |
Certain Terms and Conditions of the | Insurance Policies | S-347 | ||
Mortgage Loans | S-265 | Assignment of the Mortgage Loans | S-349 | |
Changes in Mortgage Pool Characteristics | S-279 |
S-5 |
TABLE OF CONTENTS
(Continued)
Representations and Warranties; | ANNEX B | – | DESCRIPTION OF THE TOP 20 | |||
Repurchase; Substitution | S-350 | MORTGAGE LOANS | B-1 | |||
Certain Matters Regarding the Depositor, | ANNEX C | – | GLOBAL CLEARANCE, | |||
the Master Servicer, the Special | SETTLEMENT AND TAX DOCUMENTATION | |||||
Servicer and the Operating Advisor | S-352 | PROCEDURES | C-1 | |||
Servicer Termination Events | S-354 | ANNEX D | – | DECREMENT TABLES | D-1 | |
Rights upon a Servicer Termination Event | S-356 | ANNEX E | – | PRICE/YIELD TABLES | E-1 | |
Waivers of Servicer Termination Events | ANNEX F | – | MORTGAGE LOAN SELLER | |||
and Operating Advisor Termination | REPRESENTATIONS AND WARRANTIES | F-1 | ||||
Events | S-358 | ANNEX G | – | EXCEPTIONS TO MORTGAGE LOAN | ||
Amendment | S-358 | SELLER REPRESENTATIONS AND | ||||
No Downgrade Confirmation | S-361 | WARRANTIES | G-1 | |||
Evidence of Compliance | S-363 | ANNEX H | – | CLASS XP-A COMPONENT | ||
Voting Rights | S-363 | NOTIONAL AMOUNTS | H-1 | |||
Realization Upon Mortgage Loans | S-363 | ANNEX I | – | CLASS XP-A REFERENCE RATES | I-1 | |
Sale of Defaulted Mortgage Loans and | ||||||
Serviced REO Properties | S-366 | |||||
Modifications | S-367 | |||||
Optional Termination | S-371 | |||||
Servicing Compensation and Payment of | ||||||
Expenses | S-372 | |||||
Special Servicing | S-373 | |||||
Master Servicer and Special Servicer | ||||||
Permitted To Buy Certificates | S-382 | |||||
Servicing of the Non-Serviced Mortgage | ||||||
Loans | S-382 | |||||
Reports to Certificateholders; Available | ||||||
Information | S-383 | |||||
Certificate Administrator Reports | S-383 | |||||
Information Available Electronically | S-386 | |||||
Other Information | S-391 | |||||
Master Servicer’s Reports | S-391 | |||||
Exchange Act Filings | S-393 | |||||
Governing Law; Waiver of Jury Trial; and | ||||||
Consent to Jurisdiction | S-393 | |||||
USE OF PROCEEDS | S-393 | |||||
MATERIAL FEDERAL INCOME TAX | ||||||
CONSEQUENCES | S-393 | |||||
General | S-393 | |||||
Tax Status of Offered Certificates | S-394 | |||||
Taxation of Offered Certificates | S-394 | |||||
Changes Made by the Bipartisan Budget | ||||||
Act of 2015 | S-396 | |||||
Further Information; Taxation of Foreign | ||||||
Investors | S-396 | |||||
CERTAIN STATE AND LOCAL TAX | ||||||
CONSIDERATIONS | S-397 | |||||
ERISA CONSIDERATIONS | S-397 | |||||
LEGAL INVESTMENT | S-399 | |||||
METHOD OF DISTRIBUTION (UNDERWRITER | ||||||
CONFLICTS OF INTEREST) | S-400 | |||||
LEGAL MATTERS | S-402 | |||||
RATINGS | S-402 | |||||
LEGAL ASPECTS OF MORTGAGE LOANS IN | ||||||
CALIFORNIA AND NEW YORK | S-403 | |||||
INDEX OF DEFINED TERMS | S-405 | |||||
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 |
S-6 |
IMPORTANT NOTICE ABOUT INFORMATION
PRESENTED IN THIS PROSPECTUS SUPPLEMENT
Information about the certificates offered in this prospectus supplement is contained in two separate documents that progressively provide more detail: (a) the accompanying prospectus, which provides general information, some of which may not apply to the offered certificates; and (b) this prospectus supplement, which describes the specific terms of the offered certificates. The Annexes to this prospectus supplement are incorporated into and are a part of this prospectus supplement.
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. This prospectus supplement and the accompanying prospectus form a part of that registration statement. However, this prospectus supplement and the accompanying prospectus do not contain all of the information contained in our registration statement. For further information regarding the documents referred to in this prospectus supplement, 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 prospectus supplement 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.
You should rely only on the information contained in this prospectus supplement and the accompanying prospectus. We have not authorized anyone to provide you with information that is different from that contained in this prospectus supplement. The information in this prospectus supplement is accurate only as of the date of this prospectus supplement.
This prospectus supplement and the accompanying prospectus include cross references to sections in these materials where you can find further related discussions. The tables of contents in this prospectus supplement and the accompanying prospectus identify the pages where these sections are located.
Certain capitalized terms are defined and used in this prospectus supplement and the accompanying prospectus to assist you in understanding the terms of the offered certificates. The capitalized terms used in this prospectus supplement are defined on the pages indicated under the caption “Index of Defined Terms” in this prospectus supplement.
In this prospectus supplement:
· | 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 prospectus supplement, 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,
S-7 |
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 INDEFINITE PERIOD. SEE “RISK FACTORS—RISKS RELATED TO THE OFFERED CERTIFICATES—RISKS OF LIMITED LIQUIDITY AND MARKET VALUE” IN THIS PROSPECTUS SUPPLEMENT.
FORWARD-LOOKING STATEMENTS
This prospectus supplement and the accompanying prospectus contain certain forward-looking statements. If and when included in this prospectus supplement, 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 prospectus supplement 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
WITHIN THE UNITED KINGDOM, THIS PROSPECTUS SUPPLEMENT IS DIRECTED ONLY AT PERSONS WHO (i) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND WHO QUALIFY AS INVESTMENT PROFESSIONALS IN ACCORDANCE WITH ARTICLE 19(5), OR (ii) AS HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, PARTNERSHIPS OR TRUSTEES IN ACCORDANCE WITH ARTICLE 49(2) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (TOGETHER, “RELEVANT PERSONS”). THIS PROSPECTUS SUPPLEMENT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS PROSPECTUS SUPPLEMENT RELATES, INCLUDING THE OFFERED CERTIFICATES, IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.
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 Financial Services and Markets Act 2000 (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
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(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 prospectus supplement is not a prospectus for the purposes of the European Union’s Directive 2003/71/EC (as amended, including by Directive 2010/73/EU) (the “EU Prospectus Directive”) as implemented in any Member State of the European Economic Area (each, a “Relevant Member State”). This prospectus supplement has been prepared on the basis that all offers of the offered certificates will be made pursuant to an exemption under the EU Prospectus Directive from the requirement to produce a prospectus in connection with offers of the offered certificates. Accordingly, any person making or intending to make any offer in that Relevant Member State of offered certificates which are the subject of the offering contemplated in this prospectus supplement may only do so in circumstances in which no obligation arises for the depositor, the issuing entity or any of the underwriters to produce a prospectus for such offer. None of the depositor, the issuing entity or the underwriters have authorized, and none of such entities authorizes, the making of any offer of the offered certificates in circumstances in which an obligation arises for the depositor, the issuing entity or the underwriters to publish a prospectus for such offer.
EUROPEAN ECONOMIC AREA SELLING RESTRICTIONS
In relation to each member state of the European Economic Area which has implemented the EU Prospectus Directive (each, a “Relevant Member State“), each underwriter has represented and agreed that, with effect from and including the date on which the EU Prospectus Directive is implemented in that Relevant Member State, it has not made and will not make an offer of the offered certificates which are the subject of the offering contemplated by this prospectus supplement to the public in that Relevant Member State other than:
(a) to any legal entity which is a “qualified investor” as defined in the EU Prospectus Directive;
(b) to fewer than 150 natural or legal persons (other than “qualified investors” as defined in the EU Prospectus Directive) subject to obtaining the prior consent of the relevant underwriter or underwriters nominated by the depositor for any such offer; or
(c) in any other circumstances falling within Article 3(2) of the EU Prospectus Directive,
provided, that no such offer of the offered certificates above shall require the issuing entity, the depositor or any of the underwriters to publish a prospectus pursuant to Article 3 of the EU Prospectus Directive.
For the purposes of the prior paragraph, (1) the expression an “offer of the offered certificates which are the subject of the offering contemplated by this prospectus supplement to the public” in relation to any offered certificate 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 to the offered certificates, as the same may be varied in that Relevant Member State by any measure implementing the EU Prospectus Directive in that Relevant Member State and (2) the expression “EU Prospectus Directive” means Directive 2003/71/EC (as amended, including by Directive 2010/73/EU) and includes any relevant implementing measure in the Relevant Member State.
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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 PROSPECTUS SUPPLEMENT 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 PROSPECTUS SUPPLEMENT 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 PROSPECTUS SUPPLEMENT IN THE PRC. ACCORDINGLY, THE OFFERED CERTIFICATES ARE NOT BEING OFFERED OR SOLD WITHIN THE PRC BY MEANS OF THIS PROSPECTUS SUPPLEMENT OR ANY OTHER DOCUMENT. NEITHER THIS PROSPECTUS SUPPLEMENT 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.
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.
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W A R N I N G
THE CONTENTS OF THIS PROSPECTUS SUPPLEMENT 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 PROSPECTUS SUPPLEMENT, YOU SHOULD OBTAIN INDEPENDENT PROFESSIONAL ADVICE.
NOTICE TO RESIDENTS OF THE REPUBLIC OF KOREA
THIS PROSPECTUS SUPPLEMENT IS NOT, 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 PROSPECTUS SUPPLEMENT 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 FETL AND ITS SUBORDINATE DECREES AND REGULATIONS) IN CONNECTION WITH THE PURCHASE OF THE OFFERED CERTIFICATES.
SINGAPORE
THIS PROSPECTUS SUPPLEMENT HAS NOT BEEN REGISTERED AS A PROSPECTUS WITH THE MONETARY AUTHORITY OF SINGAPORE. ACCORDINGLY, THIS PROSPECTUS SUPPLEMENT 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.
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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 prospectus supplement relating to the certificates offered by this prospectus supplement and the underlying mortgage loans.
CERTIFICATES
Class | Initial Certificate | Approximate Initial Credit Support | Description of | Assumed Final Distribution Date(2) | Approximate | Weighted Average | Principal | |||||||||
Offered Certificates | ||||||||||||||||
A-1 | $ | 39,109,000 | 30.000%(4) | Fixed(5) | September 2020 | 1.811% | 2.67 | 1 – 58 | ||||||||
A-2 | $ | 210,190,000 | 30.000%(4) | Fixed(5) | October 2020 | 3.221% | 4.89 | 58 – 59 | ||||||||
A-SB | $ | 53,371,000 | 30.000%(4) | Fixed(5) | July 2025 | 3.598% | 7.40 | 59 – 116 | ||||||||
A-3 | $ | 125,000,000 | 30.000%(4) | Fixed(5) | September 2025 | 3.521% | 9.79 | 116 – 118 | ||||||||
A-4 | $ | 244,968,000 | 30.000%(4) | Fixed(5) | October 2025 | 3.774% | 9.85 | 118 – 119 | ||||||||
XP-A | $ | 733,896,000 | (6) | N/A | Variable(6) | June 2025 | 0.908% | N/A | N/A | |||||||
XS-A | $ | 733,896,000 | (6) | N/A | Variable(6) | October 2025 | 0.250% | N/A | N/A | |||||||
A-M | $ | 61,258,000 | 23.625% | WAC CAP(5) | October 2025 | 4.158% | 9.90 | 119 – 119 | ||||||||
B | $ | 51,649,000 | 18.250% | WAC CAP(5) | October 2025 | 4.459% | 9.90 | 119 – 119 | ||||||||
C | $ | 43,241,000 | 13.750% | WAC(5) | October 2025 | 4.646% | 9.90 | 119 – 119 | ||||||||
Non-Offered Certificates(7) | ||||||||||||||||
X-B | $ | 94,890,000 | (6) | N/A | Variable(6) | October 2025 | 0.101% | N/A | N/A | |||||||
X-C | $ | 52,850,000 | (6) | N/A | Variable(6) | November 2025 | 1.000% | N/A | N/A | |||||||
X-D | $ | 22,822,000 | (6) | N/A | Variable(6) | November 2025 | 1.396% | N/A | N/A | |||||||
X-E | $ | 22,822,000 | (6) | N/A | Variable(6) | November 2025 | 1.396% | N/A | N/A | |||||||
X-F | $ | 33,632,147 | (6) | N/A | Variable(6) | November 2025 | 1.396% | N/A | N/A | |||||||
D | $ | 28,828,000 | 10.750% | WAC – 1.000%(5) | November 2025 | 3.646% | 9.90 | 119 – 120 | ||||||||
E | $ | 24,022,000 | 8.250% | WAC – 1.000%(5) | November 2025 | 3.646% | 9.98 | 120 – 120 | ||||||||
F | $ | 22,822,000 | 5.875% | Fixed(5) | November 2025 | 3.250% | 9.98 | 120 – 120 | ||||||||
G | $ | 10,810,000 | 4.750% | Fixed(5) | November 2025 | 3.250% | 9.98 | 120 – 120 | ||||||||
H | $ | 12,012,000 | 3.500% | Fixed(5) | November 2025 | 3.250% | 9.98 | 120 – 120 | ||||||||
J | $ | 33,632,147 | 0.000% | Fixed(5) | November 2025 | 3.250% | 9.98 | 120 – 120 | ||||||||
V(8) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||
R(8) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||
LR(8) | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
(1) | Approximate; subject to a variance of plus or minus 5.0%. |
(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 and prepayment assumptions described in this prospectus supplement, (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 actual performance and experience of the mortgage loans will likely differ from such assumptions. See “Yield and Maturity Considerations” in this prospectus supplement. |
(3) | 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 XP-A, Class XS-A, Class X-B, Class X-C, Class X-D, Class X-E, Class X-F, Class V, Class R and Class LR certificates) is based on (i) modeling assumptions and prepayment assumptions described in this prospectus supplement, (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. |
(4) | 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. |
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(5) | 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 F, Class G, Class H and Class J certificates will be fixed at their initial pass-through rate of 1.811%, 3.221%, 3.598%, 3.521%, 3.774%, 3.250%, 3.250%, 3.250% and 3.250%, respectively,per annum.For any distribution date, the pass-through rate on the Class A-M certificates will be aper annumrate equal to the lesser of (i) 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 and (ii) 4.158%. For any distribution date, the pass-through rate on the Class B certificates will be aper annumrate equal to the lesser of (i) 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 and (ii) 4.459%. For any distribution date, the pass-through rate on the Class C certificates will be aper annumrate equal to the weighted average of the net mortgage interest 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. For any distribution date, the pass-through rate on each of the Class D and Class E certificates will be aper annumrate equal to the weighted average of the net mortgage interest 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,minus 1.000%, but no less than 0.000%. |
(6) | The Class XP-A, Class XS-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 XP-A, Class XS-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 XP-A, Class XS-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 balances and at their respective pass-through rates as described in “Description of the Offered Certificates—General” and “—Distributions” in this prospectus supplement. |
(7) | The classes of certificates set forth below “Non-Offered Certificates” in the table are not offered by this prospectus supplement. |
(8) | The Class V certificates will not have a certificate balance, notional balance, pass-through rate, assumed final distribution date or rating. The Class V certificates will represent undivided interests in excess interest accruing on an anticipated repayment date loan, as further described in this prospectus supplement. 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 or rating. The Class R and Class LR certificates will represent the residual interests in each Trust REMIC, as further described in this prospectus supplement. 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) | $960,912,147 |
Number of Mortgage Loans | 62 |
Number of Mortgaged Properties | 120 |
Average Cut-off Date Mortgage Loan Balance | $15,498,583 |
Average Cut-off Date Mortgage Property Balance | $8,007,601 |
Weighted Average Mortgage Rate | 4.6650% |
Weighted Average Cut-off Date Remaining Term to Maturity or ARD (in months)(2) | 105 |
Weighted Average U/W NCF Debt Service Coverage Ratio(3) | 1.82x |
Weighted Average Cut-off Date Loan-to-Value Ratio(3)(4) | 61.6% |
Weighted Average Cut-off Date U/W NOI Debt Yield(3) | 10.6% |
(1) | Subject to a permitted variance of plus or minus 5.0%. |
(2) | Calculated with respect to an anticipated repayment date for 5 mortgage loans, collectively representing approximately 0.4% of the outstanding pool balance as of the cut-off date. |
(3) | In the case of the Equity Inns Portfolio mortgage loan, the 32 Avenue of the Americas mortgage loan, the 11 Madison Avenue mortgage loan, the Harvey Building Products Portfolio mortgage loan, the Springfield Mall mortgage loan and the 40 Wall Street mortgage loan, collectively representing approximately 31.1% 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 issuing entity, 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 issuing entity and the relatedpari passu companion loan(s) not included in the issuing entity. |
(4) | In the case of the mortgage loan secured by the portfolio of mortgaged properties identified on Annex A-1 to this prospectus supplement as Equity Inns Portfolio, representing approximately 8.3% of the outstanding pool balance as of the cut-off date, the cut-off date loan-to-value ratio has been calculated based on the “portfolio appraised value” of $360,000,000, which reflects a premium attributed to the aggregate value of the Equity Inns Portfolio mortgaged properties as a whole. In the case of the mortgage loan secured by the mortgaged property identified on Annex A-1 to this prospectus supplement as 611 Cowper, representing approximately 3.4% of the outstanding pool balance as of the cut-off date, the cut-off date loan-to-value ratio has been calculated based on the “as stabilized” value for such mortgaged property. The “as stabilized” value refers to the mortgaged property once all remaining punch list items have been completed on such newly constructed mortgaged property and all free rent and tenant allowances have been exhausted. For further description, see the definition of “Appraised Value” in “Description of the Mortgage Pool—Additional Mortgage Loan Information” in this prospectus supplement. |
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SUMMARY | ||
This Summary highlights selected information from this prospectus supplement 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 prospectus supplement and in the accompanying prospectus. | ||
Title of Certificates | COMM 2015-LC23 Mortgage Trust Commercial Mortgage Pass-Through Certificates. | |
RELEVANT PARTIES AND DATES | ||
Issuing Entity | COMM 2015-LC23 Mortgage Trust, a New York common law trust. The issuing entity will be formed on the closing date pursuant to the pooling and servicing agreement, dated as of November 1, 2015, between the depositor, the master servicer, the special servicer, the trustee, the certificate administrator and the operating advisor. See “The Issuing Entity” in this prospectus supplement. | |
Depositor | Deutsche Mortgage & Asset Receiving Corporation, a Delaware corporation. The depositor’s principal offices are located at 60 Wall Street, New York, New York 10005, and its telephone number is (212) 250-2500. See “The Depositor” in this prospectus supplement and “The Depositor” in the accompanying prospectus. | |
Sponsors | German American Capital Corporation, a Maryland corporation, Ladder Capital Finance LLC, a Delaware limited liability company, Cantor Commercial Real Estate Lending, L.P., a Delaware limited partnership, and Jefferies LoanCore LLC, a Delaware limited liability company. 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 prospectus supplement and “The Sponsor” in the accompanying prospectus. | |
Mortgage Loan Sellers | German American Capital Corporation (a sponsor and an affiliate of Deutsche Mortgage & Asset Receiving Corporation, the depositor, and Deutsche Bank Securities Inc., an underwriter). | |
Ladder Capital Finance LLC (a sponsor). | ||
Cantor Commercial Real Estate Lending, L.P. (a sponsor and an affiliate of Cantor Fitzgerald & Co., L.P., an underwriter, and Berkeley Point Capital LLC, a primary servicer). | ||
Jefferies LoanCore LLC (a sponsor and an affiliate of Jefferies LLC, an underwriter). | ||
See “The Sponsors,Mortgage Loan Sellers and Originators” in this prospectus supplement. |
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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 | 17 | $ | 362,856,940 | 37.8 | % | ||||
Ladder Capital Finance LLC. | 25 | $ | 246,060,185 | 25.6 | % | ||||
Cantor Commercial Real EstateLending, L.P. | 11 | $ | 158,901,949 | 16.5 | % | ||||
Jefferies LoanCore LLC | 8 | $ | 113,093,073 | 11.8 | % | ||||
Ladder Capital Finance LLC/German American Capital Corporation(1) | 1 | $ | 80,000,000 | 8.3 | % | ||||
Total | 62 | $ | 960,912,147 | 100.0 | % |
(1) | The Equity Inns Portfolio mortgage loan was co-originated by Ladder Capital Finance LLC and German American Capital Corporation. Ladder Capital Finance LLC will contribute $48.0 million of the Equity Inns Portfolio mortgage loan cut-off date balance and German American Capital Corporation will contribute $32.0 million of the Equity Inns Portfolio mortgage loan cut-off date balance. |
Originators | Except as indicated below, each mortgage loan seller or one of its affiliates originated (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 portfolio of mortgaged properties identified on Annex A-1 to this prospectus supplement as Equity Inns Portfolio, representing approximately 8.3% of the outstanding pool balance as of the cut-off date, and as to which Ladder Capital Finance LLC and German American Capital Corporation are each a mortgage loan seller with respect to its respective note, is part of a loan combination that was co-originated by Ladder Capital Finance LLC and German American Capital Corporation. | ||
The mortgage loan secured by the mortgaged property identified on Annex A-1 to this prospectus supplement as 32 Avenue of the Americas, representing approximately 7.3% of the outstanding pool balance as of the cut-off date, and as to which 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 and JPMorgan Chase Bank, National Association. | ||
The mortgage loan secured by the mortgaged property identified on Annex A-1 to this prospectus supplement as 11 Madison Avenue, representing approximately 7.2% of the outstanding pool balance as of the cut-off date, and as to which 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 prospectus supplement. |
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Master Servicer | Wells Fargo Bank, National Association, a national banking association. Wells Fargo Bank, National Association will act as the master servicer under the pooling and servicing agreement for this transaction. See “The Servicers—The Master Servicer” in this prospectus supplement. The principal west coast commercial mortgage master servicing offices of Wells Fargo Bank, National Association are located at 1901 Harrison Street, Oakland, California 94612. The principal east coast commercial mortgage master servicing offices of Wells Fargo Bank, National Association are located at Duke Energy Center, 550 South Tryon Street, 14th Floor, MAC D1086-120, Charlotte, North Carolina 28202. | |
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 prospectus supplement. 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 non-serviced mortgage loans) and any serviced loan combination that it is servicing, subject in each case to a nonrecoverability 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 rate per annum equal to the administrative fee rate set forth on Annex A-1 of this prospectus supplement 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 prospectus supplement. | ||
The 32 Avenue of the Americas loan combination, a “servicing shift loan combination”, will initially be serviced by the master servicer under the pooling and servicing agreement for this transaction. After the applicable servicing shift securitization date, it is anticipated that the related servicing shift loan combination will be serviced under, and by the master servicer |
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designated in (the “servicing shift master servicer”), the pooling and servicing agreement entered into in connection with such securitization (the “servicing shift pooling and servicing agreement”). It is anticipated that the applicable servicing shift master servicer will be entitled to receive a primary servicing fee with respect to the related servicing shift mortgage loan pursuant to the related servicing shift pooling and servicing agreement, payable monthly from such servicing shift mortgage loan, prior to application of such interest to make payments on the certificates. See “The Mortgage Pool—Loan Combinations—32 Avenue of the Americas”. See also, “Description of the Mortgage Pool—Loan Combinations—32 Avenue of the AmericasLoan Combination” and “The Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans” in this prospectus supplement. | ||
The 11 Madison Avenue loan combination is currently being serviced byKeyBank National Association, the master servicer (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 is entitled to receive a primary servicing fee pursuant to 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—11 Madison Avenue Loan Combination” and “The Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans” in this prospectus supplement. | ||
The 40 Wall Street loan combination is currently being serviced byWells Fargo Bank, National Association, the master servicer (the “WFCM 2015-LC22 master servicer”) under the WFCM 2015-LC22 pooling and servicing agreement (the “WFCM 2015-LC22 pooling and servicing agreement”). With respect to the 40 Wall Street mortgage loan, the WFCM 2015-LC22 master servicer is entitled to receive a primary servicing fee pursuant to the WFCM 2015-LC22 pooling and servicing agreement (which fee will accrue at a rate equal to 0.0025%per annum on an actual/360 basis), payable monthly from the 40 Wall Street mortgage loan, prior to application of such interest to make payments on the certificates. See “Description of the Mortgage Pool—Loan Combinations—40 Wall Street Loan Combination” and “The Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans” in this prospectus supplement. | ||
Special Servicer | LNR Partners, LLC, a Florida limited liability company. The special servicer will be primarily responsible for the servicing and administration of the specially serviced loans and REO properties, as well as the processing of certain major decisions and special servicer decisions for all mortgage loans and REO properties (other than non-serviced mortgage loans, non-serviced loan combinations and excluded special servicer mortgage loans). If the special servicer obtains knowledge that it |
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has become 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 as special servicer of such excluded special servicer mortgage loan. The directing holder (prior to the occurrence and continuance of a control termination event) will be entitled to appoint (and replace with or without cause) a separate special servicer that is not a 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 (and replace with or without cause) 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 prospectus supplement. LNR Partners, LLC was appointed to be the special servicer (other than with respect to non-serviced mortgage loans, non-serviced loan combinations and excluded special servicer mortgage loans, if any) by the initial directing holder, which is expected to be LNR Securities Holdings, LLC, an affiliate of LNR Partners, LLC. The principal servicing office of LNR Partners, LLC is located at 1601 Washington Avenue, Suite 700, Miami Beach, Florida 33139 and its telephone number is (305) 695-5600. LNR Securities Holdings, LLC is also expected to purchase, on the closing date, an approximately 60.0% interest in the Class X-D, Class X-E, Class X-F, Class F, Class G, Class H, Class J and Class V certificates. Seer Capital Partners Master Fund L.P., or its affiliate, is expected to purchase, on the closing date, an approximately 40.0% interest in the Class X-D, Class X-E, Class X-F, Class F, Class G, Class H, Class J and Class V certificates. See “—Directing Holder” below. | ||
Prior to the applicable servicing shift securitization date, the related servicing shift loan combination, if necessary, will be specially serviced by the special servicer under the pooling and servicing agreement for this transaction. It is expected that after the applicable servicing shift securitization date, the related servicing shift loan combination will be specially serviced, if necessary, under, and by the special servicer (the “servicing shift special servicer”) designated in, the related servicing shift pooling and servicing agreement. See “The Mortgage Pool—Loan Combinations—32 Avenue of the Americas”. See also, “Description of the Mortgage Pool—Loan Combinations—32 Avenue of the AmericasLoan Combination” and “The Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans” in this prospectus supplement. | ||
If necessary, the 11 Madison Avenue loan combination will be specially serviced by KeyBank National Association, the special |
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servicer under the MAD 2015-11MD trust and servicing agreement. See “Description of the Mortgage Pool—Loan Combinations—11 Madison Avenue Loan Combination” and “The Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans” in this prospectus supplement. | ||
If necessary, the 40 Wall Street loan combination will be specially serviced by Rialto Capital Advisors, LLC, the special servicer under the WFCM 2015-LC22 pooling and servicing agreement. See “Description of the Mortgage Pool—Loan Combinations—40 Wall Street Loan Combination” and “The Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans” in this prospectus supplement. | ||
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 the greater of (i) 0.25% per annum and (ii) the rate that would result in a special servicing fee of $1,000 for the related month 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 related borrower has 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 (i) each specially serviced loan (including any related serviced companion loan) and (ii) any defaulted non-serviced loan that is not sold, together with the related companion loan, as one whole loan by the special servicer under the other pooling and servicing agreement, in each case as to which the special servicer obtains a full or discounted payoff from the related borrower or which is |
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repurchased by the related mortgage loan seller outside the applicable cure period and, except as otherwise described in this prospectus supplement, 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 prospectus supplement. 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 prospectus supplement. | ||
Primary Servicer | Berkeley Point Capital LLC, a Delaware limited liability company. Berkeley Point Capital LLC will act as primary servicer with respect to the mortgage loan secured by the mortgaged property identified on Annex A-1 to this prospectus supplement as Landings Shops and Offices, representing approximately 0.9% 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 Servicer—Berkeley Point Capital LLC” in this prospectus supplement. In addition, with respect to 10 mortgage loans secured by mortgaged properties representing approximately 15.6% 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., L.P., an underwriter. | |
Trustee | Wilmington Trust, National Association, a national banking association. The corporate trust offices of Wilmington Trust, |
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National Association are located at 1100 North Market Street, Wilmington, Delaware 19801. | ||
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 prospectus supplement. | ||
The initial mortgagee of record with respect to the servicing shift mortgage loans will be Wilmington Trust, National Association, in its capacity as trustee under the pooling and servicing agreement for this transaction. It is expected that after the applicable servicing shift securitization date, the mortgagee of record with respect to the related servicing shift mortgage loan will be the trustee under the related servicing shift pooling and servicing agreement. | ||
The mortgagee of record with respect to the 11 Madison Avenue mortgage loan is currently Wilmington Trust, National Association, the trustee under the MAD 2015-11MD trust and servicing agreement. | ||
The mortgagee of record with respect to the 40 Wall Street mortgage loan is currently Wilmington Trust, National Association, the trustee under the WFCM 2015-LC22 pooling and servicing agreement. | ||
See “Description of the Mortgage Pool—Loan Combinations” and “The Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans” in this prospectus supplement. | ||
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-LC23 Mortgage Trust. | |
The initial custodian with respect to the servicing shift mortgage loans will be Wells Fargo Bank, National Association, in its capacity as custodian under the pooling and servicing agreement for this transaction. After the applicable servicing shift securitization date, the custodian of the related mortgage file (other than the promissory note evidencing the related servicing shift mortgage loan) will be the custodian under the related servicing shift pooling and servicing agreement. See “Description of the Mortgage Pool—Loan Combinations” and “The Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans” in this prospectus supplement. |
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The custodian with respect to the11 Madison Avenue mortgage loan is currently Wells Fargo Bank, National Association, the custodian under the MAD 2015-11MD trust and servicing agreement. | ||
The custodian with respect to the40 Wall Street mortgage loan is currently Wells Fargo Bank, National Association, the custodian under the WFCM 2015-LC22 pooling 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. 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 Certificate Administrator and Custodian” in this prospectus supplement. | ||
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, 0.0047% 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 non-serviced mortgage loans and servicing shift mortgage loans) and serviced loan combinations (other than servicing shift loan combinations), at any time during the period when a “control termination event,” as described under “The Pooling and Servicing Agreement—The Directing Holder” in this prospectus supplement, 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 prospectus supplement and as set forth under the pooling and servicing agreement; | ||
(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 |
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(iii) | based on the operating advisor’s review of certain information described in this prospectus supplement, the operating advisor will be required to prepare an annual report (if any mortgage loan (other than non-serviced mortgage loans and servicing shift mortgage loans) and serviced loan combinations (other than servicing shift 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, provided, however, that no such 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 required to be prepared by the special servicer in connection with a specially serviced loan or REO property. | ||
With respect to each mortgage loan (other than non-serviced mortgage loans and servicing shift mortgage loans) and serviced loan combinations (other than servicing shift loan combinations), after the occurrence and continuance of a “consultation termination event,” as described under “The Pooling and Servicing Agreement—The Directing Holder” in this prospectus supplement, 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 prospectus supplement. | |||
The operating advisor is entitled to a fee payable on each distribution date, calculated based on the outstanding principal balance of each mortgage loan (other than non-serviced mortgage loans and servicing shift mortgage loans) and serviced loan combinations (other than servicing shift loan combinations) and the operating advisor fee rate described under “The Pooling and Servicing Agreement—The Operating Advisor—Operating Advisor Compensation” in this prospectus supplement, 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 theClass X-D, Class X-E, Class X-F, Class F, Class G, Class H, Class J, 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 indemnification |
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rights arising out of events that occurred prior to 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,” and “The Operating Advisor” in this prospectus supplement. | ||
Directing Holder | With respect to each mortgage loan (other than non-serviced mortgage loans, servicing shift mortgage loans and excluded mortgage loans) and serviced loan combinations (other than servicing shift loan combinations), the directing holder will be the controlling class certificateholder (or a representative thereof) selected by the majority controlling class certificateholders. With respect to non-serviced mortgage loans and servicing shift mortgage loans, 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 prospectus supplement. 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”. | ||
A “borrower party” means (i) a borrower, a mortgagor or a manager of a mortgaged property or any affiliate thereof, (ii) solely with respect to the 10 largest mortgage loans based on cut-off date principal balance, (A) any person that owns, directly or indirectly, 25% or more of a borrower, a mortgagor or a manager of a mortgaged property or (B) any person that owns, directly or indirectly, 25% or more of a beneficial interest in any mezzanine lender of any mezzanine loan related to a mortgage loan that has accelerated such mezzanine loan as set forth in clause (iii) or (iii) any mezzanine lender (or an affiliate thereof) of 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 mezzanine lender or an affiliate of such mezzanine lender and (c) such mezzanine lender 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. | ||
The controlling class is the most subordinate of the Class F, Class G, Class H and Class J 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;provided that if at any time the certificate balances of the sequential pay |
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certificates (other than the Class F, Class G, Class H and Class J certificates) have been reduced to zero as a result of the allocation of principal payments on the mortgage loans, then the controlling class will be the most subordinate class among the Class F, Class G, Class H and Class J certificates that has an aggregate certificate balance greater than zero without regard to the application of appraisal reduction amounts to notionally reduce the certificate balance of such 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 F, Class G, Class H and Class J 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. | ||
At any time a “control termination event,” as described under “The Pooling and Servicing Agreement—The Directing Holder” in this prospectus supplement, 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. | ||
At any time a “consultation termination event,” as described under “The Pooling and Servicing Agreement—The Directing Holder” in this prospectus supplement, has occurred and is continuing, all of the rights (other than the right to receive certain notices and information as a certificateholder) of the directing holder will terminate. See “The Pooling and Servicing Agreement—The Directing Holder” in this prospectus supplement. | ||
It is anticipated that LNR Securities Holdings, LLC and Seer Capital Partners Master Fund, L.P. will purchase an approximately 60.0% interest and an approximately 40.0% interest, respectively, in each of the Class X-D, Class X-E, Class X-F, Class F, Class G, Class H, Class J and Class V certificates (collectively, the “B-Piece Buyer”), and that LNR Securities Holdings, LLC, an affiliate of LNR Partners, LLC, will be the initial directing holder with respect to each mortgage loan (other than non-serviced mortgage loans, servicing shift mortgage loans and excluded mortgage loans) and serviced loan combinations (other than servicing shift loan combinations). | ||
With respect to the servicing shift mortgage loan, the holder of the related controlling companion loan, which is currently JPMorgan Chase Bank, National Association (in the case of the 32 Avenue of the Americas loan combination), is the directing holder of the related servicing shift loan combination. It is expected that on and after the applicable servicing shift securitization date, the directing holder with respect to the related servicing shift mortgage loan will be the directing holder |
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under the related servicing shift pooling and servicing agreement. | ||
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. | ||
With respect to the40 Wall Street mortgage loan, Rialto CMBS VI, LLC, the directing holder under the WFCM 2015-LC22 pooling and servicing agreement, is the directing holder of the 40 Wall Street loan combination. | ||
Prior to the occurrence of a control termination event, the special servicer may be removed with respect to each mortgage loan (other than non-serviced mortgage loans, servicing shift mortgage loans and excluded mortgage loans) and serviced loan combinations (other than servicing shift loan combinations) by the directing holder (a) for cause at any time, and (b) without cause if either (i) LNR Partners, LLC or its affiliate is no longer the special servicer, or (ii) LNR Securities Holdings, LLC or its affiliate owns less than 15% of the certificate balance of the then controlling class of certificates. | ||
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 (and replace with or without cause) 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”. | ||
For provisions regarding the removal of the special servicer with respect to servicing shift loan combinations, see “Description of the Mortgage Pool—Loan Combinations—32 Avenue of the Americas Loan Combination—Appointment of Special Servicer” in this prospectus supplement. | ||
Underwriters | Deutsche Bank Securities Inc., Cantor Fitzgerald & Co. and Jefferies LLC 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. is an affiliate of Cantor Commercial Real Estate Lending, L.P., a sponsor and a mortgage loan seller, and Berkeley Point Capital LLC, a primary servicer. Jefferies LLC is an affiliate of Jefferies LoanCore LLC, a sponsor and a mortgage loan seller. The underwriters are required to purchase the certificates offered in this prospectus supplement from the depositor (in the amounts set forth under the heading “Method of Distribution (Underwriter Conflicts of Interest)” in this prospectus supplement, subject to certain conditions. |
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Affiliates and Other Relationships | All the shares of capital stock of Deutsche Mortgage & Asset Receiving Corporation, the depositor, are held by DB U.S. Financial Markets Holding Corporation. | |
German American Capital Corporation, a sponsor and a mortgage loan seller, Deutsche Mortgage & Asset Receiving Corporation, the depositor, and Deutsche Bank Securities Inc., an underwriter, are affiliates of each other. | ||
Cantor Commercial Real Estate Lending, L.P., a sponsor and a mortgage loan seller, Cantor Fitzgerald & Co., an underwriter, and Berkeley Point Capital LLC, a primary servicer, are affiliates of each other. | ||
Jefferies LoanCore LLC, a sponsor and a mortgage loan seller, and Jefferies LLC, an underwriter, are affiliates of each other. | ||
Deutsche Bank AG, Cayman Islands Branch (an affiliate of Deutsche Mortgage & Asset Receiving Corporation, the depositor, German American Capital Corporation, a sponsor and a mortgage loan seller, and Deutsche Bank Securities Inc., an underwriter), Wells Fargo Bank, National Association and certain other third party lenders provide warehouse financingto certain affiliates of Ladder Capital Finance LLC through various repurchase facilities. Ladder Capital Finance Holdings LLLP, Series TRS of Ladder Capital Finance Holdings LLLP and Series REIT of Ladder Capital Finance Holdings LLLP guarantee certain obligations under those repurchase facilities of the Ladder Capital Finance LLC affiliates that are the primary obligors thereunder. Some or all of the mortgage loans that Ladder Capital Finance LLC will transfer to the depositor are (or are expected to be prior to the closing date for this securitization) subject to those repurchase facilities. Proceeds received by Ladder Capital Finance LLC in connection with the contribution of mortgage loans to this securitization transaction will be applied, among other things, to reacquire the financed mortgage loans and make payments to the repurchase agreement counterparties. As of November 10, 2015, Deutsche Bank AG, Cayman Islands Branch was the repurchase agreement counterparty with respect to 3 of the mortgage loans that Ladder Capital Finance LLC will transfer to the depositor (including the Equity Inns Portfolio mortgage loan which was co-originated by Ladder Capital Finance LLC and German American Capital Corporation), representing approximately 15.4% of the outstanding pool balance as of the cut-off date, and Wells Fargo Bank, National Association was the repurchase agreement counterparty with respect to 3 of the mortgage loans that Ladder Capital Finance LLC will transfer to the depositor, representing approximately 3.7% of the outstanding pool balance as of the cut-off date (except that the number and dollar amount of mortgage loans subject to those repurchase facilities may increase or decrease prior to the issuance of the certificates). | ||
Deutsche Bank AG, Cayman Islands Branch and certain other third party lenders provide warehouse financing to certain affiliates of Jefferies LoanCore LLC through various repurchase |
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facilities. Some or all of the mortgage loans that Jefferies LoanCore LLC will transfer to the depositor are (or are expected to be prior to the closing date) subject to those repurchase facilities. Proceeds received by Jefferies LoanCore LLC in connection with the contribution of mortgage loans to this securitization transaction will be applied, among other things, to reacquire the financed mortgage loans and make payments to the repurchase agreement counterparties. As of October 22, 2015, Deutsche Bank AG, Cayman Islands Branch is the repurchase agreement counterparty with respect to 1 of the mortgage loans that Jefferies LoanCore LLC will transfer to the depositor, representing approximately 2.2% of the outstanding pool balance as of the cut-off date (except that the number and dollar amount of mortgage loans subject to that repurchase facility may increase or decrease prior to the issuance of the certificates). | ||
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, 4 of the mortgage loans to be contributed to this securitization by German American Capital Corporation, representing approximately 5.0% of the outstanding pool balance as of the cut-off date, as well as the Equity Inns Portfolio mortgage loan, representing 8.3% of the outstanding pool balance as of the cut-off date, which was co-originated by Ladder Capital Finance LLC and German American Capital Corporation. | ||
Pursuant to certain interim servicing agreements between Ladder Capital Finance LLC and/or 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 of the mortgage loans owned from time to time by Ladder Capital Finance LLC and those affiliates thereof, including, prior to their inclusion in the issuing entity, all of the mortgage loans to be contributed to this securitization by Ladder Capital Finance LLC, representing approximately 25.6% of the outstanding pool balance as of the cut-off date, as well as the Equity Inns Portfolio mortgage loan, representing 8.3% of the outstanding pool balance as of the cut-off date, which was co-originated by Ladder Capital Finance LLC and German American Capital Corporation, provided that in the case of the 40 Wall Street mortgage loan, it has been doing so as a sub-servicer. Wells Fargo Bank, National Association also acts as interim custodian of the loan files (or, in the case of each of the Harvey Building Products Portfolio mortgage loan and the 40 Wall Street mortgage loan, just the related promissory note) for all of the mortgage loans that Ladder Capital Finance LLC will transfer to the depositor. | ||
Pursuant to certain interim servicing agreements between Cantor Commercial Real Estate Lending, L.P. and certain of its affiliates, |
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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 of the mortgage loans, including, prior to their inclusion in the issuing entity, 9 of the mortgage loans to be contributed to this securitization by Cantor Commercial Real Estate Lending, L.P., representing approximately 12.2% of the outstanding pool balance as of the cut-off date, and interim custodian of the loan files for all of the mortgage loans (other than the mortgage loan secured by the mortgaged property identified on Annex A-1 to this prospectus supplement as Colerain Center) that Cantor Commercial Real Estate Lending, L.P. will transfer to the depositor. | ||
Pursuant to certain interim servicing agreements between Jefferies LoanCore LLC 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 of the mortgage loans owned from time to time by Jefferies LoanCore LLC and those affiliates thereof, including, prior to their inclusion in the issuing entity, all of the mortgage loans to be contributed to this securitization by Jefferies LoanCore LLC, representing approximately 11.8% of the outstanding pool balance as of the cut-off date. Wells Fargo Bank, National Association also acts as interim custodian of the loan files for all of the mortgage loans that Jefferies LoanCore LLC will transfer to the depositor. | ||
Pursuant to a limited subservicing agreement between Berkeley Point Capital LLC, on the one hand, and Wells Fargo 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 10 of the mortgage loans to be contributed to this securitization by Cantor Commercial Real Estate Lending, L.P., representing approximately 15.6% 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. | ||
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 Wells Fargo Bank, National Association, on the other hand, Berkeley Point Capital LLC will act as primary servicer with respect to 1 mortgage loan representing approximately 0.9% 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 a fee equal to 0.0700%per annum for such mortgage loan. | ||
LNR Partners, LLC, the special servicer, assistedLNR Securities Holdings, LLC or its affiliate with due diligence relating to the mortgage loans to be included in the mortgage pool. | ||
LNR Partners, LLC, the special servicer, is an affiliate of LNR Securities Holdings, LLC, the entity expected to purchase an approximately 60.0% interest in each of the Class X-D, Class X-E, Class X-F, Class F, Class G, Class H, Class J and |
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Class V certificates and appoint itself as the initial directing holder with respect to each mortgage loan (other than non-serviced mortgage loans, servicing shift mortgage loans and excluded mortgage loans) and serviced loan combinations (other than servicing shift loan combinations). LNR Securities Holdings, LLC and/or its affiliates, which may include LNR Partners, LLC, a special servicer, assisted entities managed by Seer Capital Partners Master Fund L.P. or one of its affiliates, which entities are expected to purchase an approximately 40.0% interest in each of the Class X-D, Class X-E, Class X-F, Class F, Class G, Class H, Class J and Class V certificates (and may purchase additional certificates), with due diligence relating to the mortgage loans included in the mortgage pool. | ||
German American Capital Corporation is expected to hold, as of the closing date, (i) the Equity Inns Portfolio Note A-4-B, Note A-5 and Note A-6 companion loans, and (ii) the 32 Avenue of the Americas Note A-5 companion loan. | ||
Ladder Capital Finance LLC is expected to hold, as of the closing date, (i) the Equity Inns Portfolio Note A-1-B, Note A-2-A, Note A-2-B and Note A-3 companion loans, and (ii) theHarvey Building Products Portfolio Note A-2A, Note A-2B and Note A-3 companion loans. | ||
Cantor Commercial Real Estate Lending, L.P. is expected to hold, as of the closing date, the Springfield Mall Note A-2 companion loan. | ||
Ladder Capital Finance LLC, a sponsor and a mortgage loan seller, is an indirect wholly-owned subsidiary of Ladder Capital Finance Holdings LLLP and an affiliate of Series TRS of Ladder Capital Finance Holdings LLLP and Series REIT of Ladder Capital Finance Holdings LLLP. Ladder Capital Finance Holdings LLLP, Series TRS of Ladder Capital Finance Holdings LLLP and Series REIT of Ladder Capital Finance Holdings LLLP will agree, pursuant to the related mortgage loan purchase agreement, to guarantee payment in connection with the performance of Ladder Capital Finance LLC’s obligations to repurchase or replace its respective mortgage loans for material breaches of representations and warranties or material loan document defects under the circumstances described under “The Sponsors, Mortgage Loan Sellers and Originators—Ladder Capital Finance LLC” in this prospectus supplement. | ||
Ladder Capital Finance LLC is affiliated with the borrowers under the mortgage loans secured by the mortgaged properties identified on Annex A-1 to this prospectus supplement as Family Dollar - Rose Hill, Family Dollar – Moultrie, Family Dollar – Biscoe, Family Dollar – Rockingham and Dollar General – De Soto, collectively representing approximately 0.4% of the outstanding pool balance as of the cut-off date. Ladder Capital Finance LLC or an affiliate thereof originated each of those mortgage loans, and Ladder Capital Finance LLC is the mortgage loan seller with respect to those mortgage loans. Those mortgage loans may contain provisions and terms that are |
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more favorable to the respective borrowers thereunder than would otherwise have been the case if the lender and borrower were not affiliated, including: (i) the related loan documents permit transfers without lender’s consent by the related borrower and by or to certain affiliates of Ladder Capital FinanceHoldings LLLP; (ii) the related loan documents permit future mezzanine financing; and (iii) in the case of the 5 mortgage loans secured by the mortgaged properties referred to above in this paragraph, there is no separate environmental indemnitor other than the related borrower. | ||
Ladder Capital Finance LLC and/or its affiliates may acquire certificates, either in connection with the initial issuance or in the secondary market. | ||
Wells Fargo Bank, National Association, which is acting as the master servicer, certificate administrator and custodian, is also a co-originator of the 11 Madison Avenue loan combination and the holder of the 11 Madison Avenue Note A-3-C2 companion loan, which is expected to be contributed to a future securitization. In addition, Wells Fargo Bank, National Association is currently the general master servicer, certificate administrator and custodian under the WFCM 2015-LC22 pooling and servicing agreement and the certificate administrator and custodian under the MAD 2015-11MD trust and servicing agreement. | ||
Wilmington Trust, National Association, the trustee, is also (i) the MAD 2015-11MD trustee and, accordingly, the current mortgagee of record with respect to the 11 Madison Avenue loan combination under the MAD 2015-11MD trust and servicing agreement and (ii) the WFCM 2015-LC22 trustee and, accordingly, the current mortgagee of record with respect to the 40 Wall Street loan combination. | ||
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 prospectus supplement. | ||
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 November 2015 and the date of origination of each mortgage loan. | |
Closing Date | On or about November 17, 2015. | |
Distribution Date | The fourth business day following the determination date in each month, commencing in December 2015. The initial distribution date will be December 11, 2015. | |
Record Date | With respect to any distribution date, the close of business on the last business day of the preceding month. | |
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Determination Date | The sixth day of each month, or if such sixth day is not a business day, the following business day, commencing in December 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. | ||
CERTIFICATES OFFERED | |||
General | The depositor is offering hereby the following classes of COMM 2015-LC23 Mortgage Trust Commercial Mortgage Pass-Through Certificates: | ||
● | Class A-1 | ||
● | Class A-2 | ||
● | Class A-SB | ||
● | Class A-3 | ||
● | Class A-4 | ||
● | Class XP-A | ||
● | Class XS-A | ||
● | Class A-M | ||
● | Class B | ||
● | Class C | ||
The trust to be created by the depositor will consist of a total of 24classes, the following of which are not being offered through this prospectus supplement and the accompanying 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 J, 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 62 fixed-rate mortgage loans. The mortgage loans are secured by first liens on 120 commercial, multifamily and manufactured housing community properties. | |||
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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 | $ | 39,109,000 | |||||
Class A-2 | $ | 210,190,000 | |||||
Class A-SB(1) | $ | 53,371,000 | |||||
Class A-3 | $ | 125,000,000 | |||||
Class A-4 | $ | 244,968,000 | |||||
Class XP-A | $ | 733,896,000 | |||||
Class XS-A | $ | 733,896,000 | |||||
Class A-M | $ | 61,258,000 | |||||
Class B | $ | 51,649,000 | |||||
Class C | $ | 43,241,000 |
(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 prospectus supplement. |
The certificates that are not offered in this prospectus supplement (other than the Class V, Class R and Class LR certificates) will have the initial certificate balances or notional balances, as applicable, as set forth under “Executive Summary—Certificates” in this prospectus supplement. | ||
The Class XP-A, Class XS-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 XP-A, Class XS-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 prospectus supplement on their respective notional balances. | ||
The notional balance of the Class XP-A certificates from time to time will equal the sum of the component notional amounts of the components of the Class XP-A Certificates (each, a “Class XP-A component”). Each of the Class XP-A components will relate to one of the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4 and Class A-M certificates and, at any time during any of the periods specified on Annex H to this prospectus supplement, will equal the lesser of (a) the amount specified on Annex H to this prospectus supplement, and (b) the then certificate balance of the related class of certificates. The initial notional balance of the Class XP-A certificates will be approximately $733,896,000. | ||
The notional balance of the Class XS-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. The initial notional balance of the Class XS-A certificates will be approximately $733,896,000. The notional balance of the Class X-B certificates will equal the aggregate certificate balance of each of the Class B and Class C certificates outstanding from time to time. The initial notional balance of the Class X-B certificates will be approximately $94,890,000. | ||
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The notional balance of the Class X-C certificates will equal the aggregate certificate balance of each of the Class D and Class E certificates outstanding from time to time. The initial notional balance of the Class X-C certificates will be approximately $52,850,000. | |||
The notional balance of the Class X-D certificates will equal the certificate balance of the Class F certificates outstanding from time to time. The initial notional balance of the Class X-D certificates will be approximately $22,822,000. | |||
The notional balance of the Class X-E certificates will equal the aggregate certificate balance of each of the Class G and Class H certificates outstanding from time to time. The initial notional balance of the Class X-E certificates will be approximately $22,822,000. | |||
The notional balance of the Class X-F certificates will equal the certificate balance of the Class J certificates outstanding from time to time. The initial notional balance of the Class X-F certificates will be approximately $33,632,147. | |||
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 pass-through rates applicable to the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class F, Class G, Class H and Class J certificates will be fixed at their initial pass-through rate of 1.811%, 3.221%, 3.598%, 3.521%, 3.774%, 3.250%, 3.250%, 3.250% and 3.250%, respectively,per annum. The pass-through rate applicable to the Class A-M certificates will be aper annumrate equal to the lesser of (i) 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 and (ii) 4.158%. The pass-through rate applicable to the Class B certificates will be aper annumrate equal to the lesser of (i) 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 and (ii) 4.459%. The pass-through rate applicable to the Class C certificates will equal the weighted average of the net mortgage interest 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. The pass-through rate applicable to each of the Class D and Class E certificates will equal the weighted average of the net |
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mortgage interest 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,minus 1.000%, but no less than 0.000%. | |||
● | The pass-through rate for the initial distribution date applicable to the (i) Class XP-A certificates will equal approximately 0.908% per annum, (ii) Class XS-A certificates will equal approximately 0.250% per annum, (iii) Class X-B certificates will equal approximately 0.101% per annum, (iv) Class X-C certificates will equal approximately 1.000% per annum, (v) Class X-D certificates will equal approximately 1.396% per annum, (vi) Class X-E certificates will equal approximately 1.396% per annum, and (vii) Class X-F certificates will equal approximately 1.396% per annum. | ||
● | The pass-through rate for each of the Class XP-A, Class XS-A, Class X-B, Class X-C, Class X-D, Class X-E and Class X-F certificates for any distribution date will equal the weighted average of the respective strip rates, which we refer to as Class XP-A strip rates, Class XS-A strip rates, Class X-B strip rates, Class X-C strip rates, Class X-D strip rates, Class X-E strip rates and Class X-F strip rates, respectively, at which interest accrues from time to time on the respective components of the notional balance of the Class XP-A, Class XS-A, Class X-B, Class X-C, Class X-D, Class X-E and Class X-F certificates, respectively, outstanding immediately prior to the related distribution date, with the relevant weighting to be done based upon the relative sizes of those components. | ||
● | Each of the components of the Class XP-A certificates will have a component notional balance equal to the lesser of (a) the amount specified for the related class of certificates on Annex H to this prospectus supplement, and (b) the then certificate balance of the related class of certificates. Each of the components of the Class XS-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 and 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. Each of the components of the Class X-C certificates will have a component notional balance that corresponds to the certificate balance of the Class D or Class E certificates, respectively. The Class X-D certificates will have a component notional balance that corresponds to the certificate balance of the Class F certificates. Each of the components of the Class X-E certificates will have a component notional balance that corresponds to the |
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certificate balance of the Class G or Class H certificates, respectively. The Class X-F certificates will have a component notional balance that corresponds to the certificate balance of the Class J certificates. For purposes of accrual of interest on the Class XP-A certificates for each distribution date, the applicable Class XP-A strip rates with respect to each such component for each such interest accrual period will equal the excess, if any, of (a) the lesser of (1) the rate per annum for such distribution date set forth on Annex I to this prospectus supplement and (2) the weighted average of the net mortgage 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 related class of certificates. For purposes of accrual of interest on the Class XS-A certificates for each distribution date, the applicable Class XS-A strip rates with respect to each such component for each such interest accrual period will equal (A) if any portion of the related component notional amount is also included in the related component of a Class XP-A component immediately prior to the related distribution date, the excess, if any, of (a) the weighted average of the net mortgage 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 greater of (1) the rate per annum corresponding to such distribution date as set forth on Annex I to this prospectus supplement and (2) the pass-through rate in effect during such interest accrual period for the related class of certificates, and (B) if any portion of the related component notional amount is not included in the related component of a Class XP-A component immediately prior to the related distribution date, the excess, if any, of (a) the weighted average of the net mortgage 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 related class of certificates. For purposes of the accrual of interest on the 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-B strip rates, Class X-C strip rates, Class X-D strip rates, Class X-E strip rates or Class X-F strip rates, 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 mortgage 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 related class of certificates. | |||
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● | For a more detailed discussion of the Class XP-A strip rates, Class XS-A strip rates, Class X-B strip rates, Class X-C strip rates, Class X-D strip rates, Class X-E strip rates and Class X-F strip rates and the pass-through rates applicable to the Class XP-A, Class XS-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 prospectus supplement. | ||
● | 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 prospectus supplement. | ||
See “Description of the Offered Certificates—Distributions” in this prospectus supplement. | |||
Assumed 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 prospectus supplement 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 | September 2020 | |||||
Class A-2 | October 2020 | |||||
Class A-SB | July 2025 | |||||
Class A-3 | September 2025 | |||||
Class A-4 | October 2025 | |||||
Class XP-A | June 2025 | |||||
Class XS-A | October 2025 | |||||
Class A-M | October 2025 | |||||
Class B | October 2025 | |||||
Class C | October 2025 |
Distributions | On each distribution date, you will be entitled to receive interest and principal distributions in respect of each class of certificates (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 XP-A, Class XS-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 | |||
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(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 prospectus supplement. | |||
A description of the principal and interest entitlement of each class of certificates offered in this prospectus supplement 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 prospectus supplement. | ||||
None of the Class XP-A, Class XS-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 prospectus supplement. | |||
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 prospectus supplement 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”, “—Yield Considerations” and “Yield and Maturity Considerations” in this prospectus supplement and “Yield and Maturity Considerations” in the accompanying prospectus. | |||
Subordination; Allocation of | ||||
Losses and Certain Expenses | The chart below 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 |
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ascending order. However, no principal payments or principal losses will be allocated to the Class XP-A, Class XS-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 XP-A, Class XS-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 XP-A, Class XS-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. | ||||
(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 prospectus supplement. | |||
(2) | The Class XP-A, Class XS-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 prospectus supplement. | ||||
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 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, 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 prospectus supplement. |
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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 will be 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 will also not be 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 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 | ||||
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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 prospectus supplement, 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 prospectus supplement 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 Loans” in this prospectus supplement) 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 termsof 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 nonrecoverable 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 nonrecoverability. The trustee will be entitled to conclusively rely on the determination of nonrecoverability 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 nonrecoverability 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. | ||
The special servicer will have no obligation to make any property advances; provided that in an urgent or emergency situation requiring the making of a property advance, the special servicer may make such property advance, and the master servicer will be required to reimburse the special servicer for such advance (with interest on that advance) within a specified number of days as set forth in the pooling and servicing agreement, provided such advance is not determined to be non-recoverable by the master servicer in its reasonable judgment (in which case it will be reimbursed out of general collections). Once reimbursed the master servicer will be deemed to have made such property advance as of the date made by the special servicer, and will be entitled to reimbursement with interest on that advance in accordance with the terms of the pooling and servicing agreement. | ||
Principal and interest advances are intended to maintain a regular flow of scheduled interest and principal payments to the | ||
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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 prospectus supplement and thus will cause losses to be borne by certificateholders in the priority specified in this prospectus supplement. The master servicer, the special servicer and the trustee will be entitled to interest on any advances made. This interest will accrue at the rate and is payable under the circumstances described in this prospectus supplement. 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 prospectus supplement. | ||||
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. | ||
Each non-serviced mortgage loan will be subject to provisions of the applicable pooling and servicing agreement under which it is serviced relating to appraisal reductions that are substantially similar but not identical to the provisions set forth above. Generally, 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 for this transaction. See “Description of the Mortgage Pool—Loan Combinations” and “The Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans” in this prospectus supplement. | ||||
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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 prospectus supplement: | ||
· | 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 prospectus supplement 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. | ||||
In the case of the Equity Inns Portfolio mortgage loan, the 32 Avenue of the Americas mortgage loan, the 11 Madison Avenue mortgage loan, the Harvey Building Products Portfolio mortgage loan, the Springfield Mall mortgage loan and the 40 Wall Street mortgage loan, collectively representing approximately 31.1% 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 issuing entity, 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 issuing entity and the relatedpari passu companion loan(s) not included in the issuing entity. | ||||
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 prospectus supplement, unless otherwise indicated. |
All Mortgage Loans | ||||||
Number of Mortgage Loans | 62 | |||||
Number of Mortgaged Properties | 120 | |||||
Number of Amortizing Balloon Mortgage Loans(1) | 33 | |||||
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All Mortgage Loans | ||||||
Number of Partial Interest-Only Mortgage Loans(2) | 15 | |||||
Number of Interest-Only Mortgage Loans(3) | 14 | |||||
Aggregate Principal Balance | $960,912,147 | |||||
Range of Mortgage Loan Principal Balances | ||||||
Minimum Mortgage Loan Balance | $702,000 | |||||
Maximum Mortgage Loan Balance | $80,000,000 | |||||
Average Mortgage Loan Principal Balance | $15,498,583 | |||||
Range of Mortgage Rates | ||||||
Minimum Mortgage Rate | 3.5602% | |||||
Maximum Mortgage Rate | 5.3380% | |||||
Weighted Average Mortgage Rate | 4.6650% | |||||
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) | 105 months | |||||
Range of Remaining Amortization Terms(5) | ||||||
Minimum Remaining Amortization Term(5) | 214 months | |||||
Maximum Remaining Amortization Term(5) | 419 months | |||||
Weighted Average Remaining Amortization Term(5) | 349 months | |||||
Range of Cut-off Date Loan-to-Value Ratios(6)(7) | ||||||
Minimum Cut-off Date Loan-to-Value Ratio(6)(7) | 29.4% | |||||
Maximum Cut-off Date Loan-to-Value Ratio(6)(7) | 75.0% | |||||
Weighted Average Cut-off Date Loan-to-Value Ratio(6)(7) | 61.6% | |||||
Range of U/W NCF Debt Service Coverage Ratios(6)(8) | ||||||
Minimum U/W NCF Debt Service Coverage Ratio(6)(8) | 1.13x | |||||
Maximum U/W NCF Debt Service Coverage Ratio(6)(8) | 3.89x | |||||
Weighted Average U/W NCF Debt Service Coverage Ratio(6)(8) | 1.82x | |||||
Range of U/W NOI Debt Yields(6) | ||||||
Minimum U/W NOI Debt Yield(6) | 7.1% | |||||
Maximum U/W NOI Debt Yield(6) | 18.4% | |||||
Weighted Average U/W NOI Debt Yield(6) | 10.6% |
(1) | Does not include interest-only mortgage loans or partial interest-only mortgage loans. | |||
(2) | Includes 15 mortgage loans, collectively representing approximately 21.8% of the outstanding pool balance as of the cut-off date, which pay interest-only for a portion of their term. The interest-only periods for such mortgage loans range from 22 months to 59 months following the cut-off date. | |||
(3) | Includes 14 mortgage loans, collectively representing approximately 38.7% of the outstanding pool balance as of the cut-off date, which pay interest-only through their respective maturity date or anticipated repayment date. | |||
(4) | Calculated with respect to an anticipated repayment date for 5 mortgage loans, collectively representing approximately 0.4% of the outstanding pool balance as of the cut-off date. | |||
(5) | Excludes 14 mortgage loans, collectively representing approximately 38.7% 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 6 mortgage loans, collectively representing approximately 31.1% 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 for such mortgage loans have been calculated based on the mortgage loan included in the issuing entity and the relatedpari passu companion loan(s) not included in the issuing entity. | |||
(7) | In the case of the mortgage loan secured by the portfolio of mortgaged properties identified on Annex A-1 to this prospectus supplement as Equity Inns Portfolio, representing approximately 8.3% of the outstanding pool balance as of the cut-off date, the cut-off date loan-to-value ratio has been calculated based on the “portfolio appraised value” of $360,000,000, which reflects a premium attributed to the aggregate value of the Equity Inns Portfolio mortgaged properties as a whole. In the case of the mortgage loan secured by the mortgaged property identified on Annex A-1 to this prospectus supplement as 611 Cowper, representing approximately 3.4% of the outstanding pool balance as of the cut-off date, the cut-off date loan-to-value ratio has been calculated based on the “as stabilized” value for such mortgaged property. The “as stabilized” value refers to the mortgaged property once all remaining punch list items have been completed on such newly constructed mortgaged property and all free | |||
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rent and tenant allowances have been exhausted. For further description, see the definition of “Appraised Value” in “Description of the Mortgage Pool—Additional Mortgage Loan Information” in this prospectus supplement. | |||
(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. |
B. | Loan Combinations | The mortgage loans secured by the mortgaged properties identified asEquity Inns Portfolio, 32 Avenue of the Americas, 11 Madison Avenue, Harvey Building Products Portfolio, Springfield Mall and 40 Wall Street on Annex A-1 to this prospectus supplement also secure one or more companion loans that will not be included in the mortgage pool. | |
Equity Inns Portfolio. The portfolio of mortgaged properties identified as Equity Inns Portfolio on Annex A-1 to this prospectus supplement secures (1) two promissory notes designated as Note A-1-A and Note A-4-A (collectively, the “Equity Inns Portfolio mortgage loan”), with an aggregate outstanding principal balance as of the cut-off date of $80,000,000, representing approximately 8.3% of the outstanding pool balance as of the cut-off date, and (2) seven promissory notes designated as Note A-1-B, Note A-2-A, Note A-2-B, Note A-3, Note A-4-B, Note A-5 and Note A-6 (the “Equity Inns Portfolio companion loans”), with an aggregate outstanding principal balance as of the cut-off date of $152,000,000, which Note A-1-B, Note A-2-A, Note A-2-B and Note A-3 are currently held by an affiliate of Ladder Capital Finance LLC and are expected to be contributed to future securitizations and which Note A-4-B, Note A-5 and Note A-6 are currently held by German American Capital Corporation and are expected to be contributed to future securitizations, each of which will not be included in the issuing entity. The Equity Inns Portfolio mortgage loan and the Equity Inns Portfolio companion loans arepari passu in right of payment and are collectively referred to as the “Equity Inns Portfolio loan combination”. The Equity Inns Portfolio companion loans may be sold or further divided at any time (subject to compliance with the terms of the related intercreditor agreement). For additional information regarding the Equity Inns Portfolio loan combination, see “Description of the Mortgage Pool—Loan Combinations—Equity Inns Portfolio Loan Combination” in this prospectus supplement. | |||
32 Avenue of the Americas. The mortgaged property identified as 32 Avenue of the Americas on Annex A-1 to this prospectus supplement secures (1) a promissory note designated as Note A-4 (the “32 Avenue of the Americas mortgage loan”), with an outstanding principal balance as of the cut-off date of $70,000,000, representing approximately 7.3% of the outstanding pool balance as of the cut-off date, and (2) four |
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promissory notes designated as Note A-1, Note A-2, Note A-3 and Note A-5 (the “32 Avenue of the Americas companion loans”), with an aggregate outstanding principal balance as of the cut-off date of $355,000,000, which Note A-5 is currently held by German American Capital Corporation and is expected to be contributed to a future securitization, and each of Note A-1, Note A-2 and Note A-3 which is currently held by JPMorgan Chase Bank, National Association and is expected to be contributed to a future securitization, each of which will not be included in the issuing entity. The32 Avenue of the Americas mortgage loan and the 32 Avenue of the Americas companion loans arepari passu in right of payment and are collectively referred to as the “32 Avenue of the Americas loan combination”. The 32 Avenue of the Americas companion loans may be sold or further divided at any time (subject to compliance with the terms of the related intercreditor agreement). After the 32 Avenue of the Americas Note A-1 securitization date, the 32 Avenue of the Americas loan combination will be serviced pursuant to the 32 Avenue of the Americas pooling and servicing agreement and the related intercreditor agreement. For additional information regarding the 32 Avenue of the Americas loan combination, see “Description of the Mortgage Pool—Loan Combinations—32 Avenue of the Americas Loan Combination” in this prospectus supplement. | ||
11 Madison Avenue. The mortgaged property identified as 11 Madison Avenue on Annex A-1 to this prospectus supplement secures (1) a senior promissory note designated as Note A-1-C3 (the “11 Madison Avenue mortgage loan”), with an outstanding principal balance as of the cut-off date of $69,600,000, representing approximately 7.2% of the outstanding pool balance as of the cut-off date, (2) nine senior 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 (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) six senior promissory notes designated as Note A-1-C1, Note A-1-C2, Note A-2-C1, Note A-2-C2, Note A-3-C1 and Note A-3-C2 (collectively, the “11 Madison Avenue non-standalonepari passu companion loans” and, together with the 11 Madison Avenue standalonepari passu companion loans, the11 Madison Avenuepari passu companion loans”), with an aggregate outstanding principal balance as of the cut-off date of $297,200,000, of which (i) Note A-1-C1 is currently being held by the COMM 2015-CCRE26 Mortgage Trust, (ii) Note A-1-C2 is currently being held by the COMM 2015-CCRE27 Mortgage Trust, (iii) Note A-2-C1 and Note A-2-C2 are currently held by Morgan Stanley Bank, N.A. and are expected to be contributed to a future securitization, (iv) Note A-3-C1 is currently being held by the WFCM 2015-NXS3 Mortgage Trust, and (v) Note A-3-C2 is currently held by Wells Fargo Bank, National Association and is expected to be contributed to a future securitization, and (4) three junior promissory notes designated as Note B-1-S, Note B-2-S and Note B-3-S (collectively, the “11 Madison Avenue subordinate companion loans”), with an aggregate outstanding | ||
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principal balance as of the cut-off date of $310,670,000, which are currently held by the MAD 2015-11MD Mortgage Trust. The 11 Madison Avenuepari passu companion loans and the 11 Madison Avenue subordinate companion loans will not be included in the issuing entity. The 11 Madison Avenue mortgage loan, the 11 Madison Avenuepari passu companion loans and the 11 Madison Avenue subordinate companion loans are collectively referred as the “11 Madison Avenue loan combination”. The 11 Madison Avenue loan combination is being 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—11 Madison Avenue Loan Combination” in this prospectus supplement. | |||
Harvey Building Products Portfolio. The portfolio of mortgaged properties identified as Harvey Building Products Portfolio on Annex A-1 to this prospectus supplement secures (1) a promissory note designated as Note A-1 (the “Harvey Building Products Portfolio mortgage loan”), with an outstanding principal balance as of the cut-off date of $41,953,778, representing approximately 4.4% of the outstanding pool balance as of the cut-off date, and (2) three promissory notes designated as Note A-2A, Note A-2B and Note A-3 (collectively, the “Harvey Building Products Portfolio companion loan”), with an aggregate outstanding principal balance as of the cut-off date of $67,925,164, which are currently held by an affiliate of Ladder Capital Finance LLC and are expected to be contributed to future securitizations. The Harvey Building Products Portfolio companion loans will not be included in the issuing entity. The Harvey Building Products Portfolio mortgage loan and the Harvey Building Products Portfolio companion loans arepari passu in right of payment and are collectively referred to as the “Harvey Building Products Portfolio loan combination”. The Harvey Building Products Portfolio companion loans may be sold or further divided at any time (subject to compliance with the terms of the related intercreditor agreement). See “Description of the Mortgage Pool—Loan Combinations—Harvey Building Products Portfolio Loan Combination” in this prospectus supplement. | |||
Springfield Mall. The mortgaged property identified asSpringfieldMall on Annex A-1 to this prospectus supplement secures (1) a promissory note designated as Note A-1 (the “Springfield Mall mortgage loan”), with an outstanding principal balance as of the cut-off date of $32,460,817, representing approximately 3.4% of the outstanding pool balance as of the cut-off date, and (2) a promissory note designated as Note A-2 (the “Springfield Mall companion loan”), with an outstanding principal balance as of the cut-off date of $32,460,817, which is currently held by Cantor Commercial Real Estate Lending, L.P. and is expected to be contributed to a future securitization. The Springfield Mall companion loan will not be included in the issuing entity. The Springfield Mall mortgage loan and the Springfield Mall companion loan arepari passu in right of |
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payment and are collectively referred to as the “Springfield Mall loan combination“. The Springfield Mall companion loan may be sold or further divided at any time (subject to compliance with the terms of the related intercreditor agreement). For additional information regarding the Springfield Mall loan combination, see “Description of the Mortgage Pool—Loan Combinations—Springfield Mall Loan Combination” in this prospectus supplement. | ||
40 Wall Street. The mortgaged property identified as 40 Wall Street on Annex A-1 to this prospectus supplement secures (1) a promissory note designated as Note A-1-B (the “40 Wall Street mortgage loan”), with an outstanding principal balance as of the cut-off date of $4,960,524, representing approximately 0.5% of the outstanding pool balance as of the cut-off date, (2) two promissory notes designated as Note A-1-A and Note A-2, with an aggregate outstanding principal balance as of the cut-off date of $94,249,948, which are currently held by the WFCM 2015-LC22 Mortgage Trust, and (3) a promissory note designated as Note A-3 (together with Note A-1-A and Note A-2, collectively, the “40 Wall Street companion loans”), with an outstanding principal balance as of the cut-off date of $59,526,283, which is currently held by the COMM 2015-CCRE24 Mortgage Trust. The 40 Wall Street mortgage loan and the 40 Wall Street companion loans arepari passu in right of payment and are collectively referred to as the “40 Wall Street loan combination”. The 40 Wall Street companion loans will not be included in the issuing entity. The 40 Wall Street loan combination is being serviced pursuant to the WFCM 2015-LC22 pooling and servicing agreement and the related intercreditor agreement. For additional information regarding the 40 Wall Street loan combination, see “Description of the Mortgage Pool—Loan Combinations—40 Wall Street Loan Combination” in this prospectus supplement. | ||
Each of the Equity Inns Portfolio loan combination, the Harvey Building Products Portfolio loan combination and the Springfield Mall loan combination is referred to as a “serviced loan combination”. Each of the Equity Inns Portfolio companion loans, the Harvey Building Products Portfolio companion loans and the Springfield Mall companion loan is referred to as a “serviced companion loan”. | ||
Each of the 11 Madison mortgage loan and 40 Wall Street mortgage loan is referred to as a “non-serviced mortgage loan”. Each of the 11 Madison loan combination and 40 Wall Street loan combination is referred to as a “non-serviced loan combination”. Each of the 11 Madison companion loans and 40 Wall Street companion loans is referred to as a “non-serviced companion loans”. | ||
The 32 Avenue of the Americas mortgage loan is referred to as a “servicing shift mortgage loan”. On and after the applicable securitization date, each servicing shift mortgage loan is referred to as a non-serviced mortgage loan. Each servicing shift loan combination, prior to the applicable servicing shift securitization | ||
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date, is also referred to as a serviced loan combination, and, on and after the applicable servicing shift securitization date, is referred to as a non-serviced loan combination. | ||
The 32 Avenue of the Americas pooling and servicing agreement is referred to as a “servicing shift pooling and servicing agreement”. The 32 Avenue of the Americas Note A-1 securitization date is referred to as a “servicing shift securitization date”. | ||
C. ARD Loans | Each mortgage loan identified on Annex A-1 to this prospectus supplement as an “ARD” loan generally provides that if, as of 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, except in limited circumstances, by any other person. | |
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, including mortgaged properties constituting the related borrower’s leasehold interest or interests in the mortgaged property along with the corresponding fee interest of the lessor in such mortgaged property, (ii) a leasehold estate in a portion of the mortgaged property and a fee simple estate in another portion of the mortgaged property or (iii) a leasehold or subleasehold estate in the mortgaged property and no mortgage on the related fee simple estate, as set forth below: | |
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Interest of Borrower Encumbered | Number of Mortgaged Properties | Aggregate Cut- off Date Balance(1) | % of Initial Outstanding Pool Balance(1) | |||||||
Fee Simple(2) | 118 | $ | 886,351,624 | 92.2% | ||||||
Fee Simple/Leasehold | 1 | $ | 69,600,000 | 7.2% | ||||||
Leasehold | 1 | $ | 4,960,524 | 0.5% | ||||||
Total | 120 | $ | 960,912,147 | 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 and/or another basis deemed appropriate by the related mortgage loan seller). | |||
(2) | May include mortgaged properties constituting the related borrower’s leasehold interest in the mortgaged property along with the corresponding fee interest of the lessor in such mortgaged property. | |||
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 Date Balance(1) | % of Initial Outstanding Pool Balance(1) | |||||||
Retail | 30 | $ | 311,283,850 | 32.4% | ||||||
Anchored(2) | 21 | $ | 225,381,127 | 23.5% | ||||||
Unanchored | 9 | $ | 85,902,723 | 8.9% | ||||||
Office | 18 | $ | 273,595,382 | 28.5% | ||||||
CBD | 4 | $ | 163,539,209 | 17.0% | ||||||
Suburban | 12 | $ | 64,696,510 | 6.7% | ||||||
Medical | 2 | $ | 45,359,663 | 4.7% | ||||||
Hospitality | 27 | $ | 191,255,094 | 19.9% | ||||||
Full Service | 3 | $ | 95,944,447 | 10.0% | ||||||
Limited Service | 13 | $ | 45,845,129 | 4.8% | ||||||
Extended Stay | 6 | $ | 31,310,345 | 3.3% | ||||||
Select Service | 5 | $ | 18,155,172 | 1.9% | ||||||
Multifamily | 9 | $ | 123,068,650 | 12.8% | ||||||
Industrial | 29 | $ | 37,804,168 | 3.9% | ||||||
Manufactured Housing Community | 4 | $ | 12,955,800 | 1.3% | ||||||
Mixed Use | 2 | $ | 7,949,204 | 0.8% | ||||||
Office/Retail | 2 | $ | 7,949,204 | 0.8% | ||||||
Self Storage | 1 | $ | 3,000,000 | 0.3% | ||||||
Total | 120 | $ | 960,912,147 | 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 and/or another basis deemed appropriate by the related mortgage loan seller). | |||
(2) | “Anchored” retail properties include urban, anchored, regional mall and single tenant properties. | |||
H. Property Locations | The mortgaged properties are located in 26 states and the U.S. Virgin Islands. 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 | |||
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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-off Date Balance(1) | % of Initial Outstanding Pool Balance(1) | ||||||||
California | 14 | $ | 254,575,194 | 26.5% | |||||||
New York | 7 | $ | 199,074,357 | 20.7% | |||||||
Texas | 11 | $ | 85,658,646 | 8.9% | |||||||
Illinois | 12 | $ | 65,871,854 | 6.9% | |||||||
Pennsylvania | 6 | $ | 64,902,201 | 6.8% | |||||||
Florida | 6 | $ | 60,774,138 | 6.3% |
(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 and/or another basis deemed appropriate by the related mortgage loan seller). | |||
See “Description of the Mortgage Pool—Additional Mortgage Loan Information” in this prospectus supplement. | ||||
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 Date | Default Grace Period Days | Number of Mortgage Loans | Aggregate Cut-off Date Balance | % of Initial Outstanding Pool Balance | |||||||||
6 | 0 | 60 | $ | 878,925,662 | 91.5% | ||||||||
1 | 0 | 1 | $ | 70,000,000 | 7.3% | ||||||||
1 | 5 | 1 | $ | 11,986,486 | 1.2% |
As used in this prospectus supplement, “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. 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 prospectus supplement 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 of Mortgage Loans | Aggregate Cut-off Date Balance | % of Initial Outstanding Pool Balance | |||||||||
Amortizing Balloon(1) | 33 | $ | 378,778,647 | 39.4% | ||||||||
Interest Only | 9 | $ | 367,990,000 | 38.3% | ||||||||
Interest Only, then Amortizing(2) | 15 | $ | 209,840,000 | 21.8% | ||||||||
Interest Only, ARD | 5 | $ | 4,303,500 | 0.4% | ||||||||
Total | 62 | $ | 960,912,147 | 100.0% |
(1) | Does not include (a) mortgage loans that are interest-only through the related maturity date or anticipated repayment date, as applicable or (b) partial interest-only mortgage loans. | |||
(2) | Includes 15 mortgage loans that pay interest-only for the first 22 to 59 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 or anticipated repayment date. Each such mortgage loan therefore has an expected balloon balance at the maturity date or the anticipated repayment date. | |||
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. | |||
Each of the following mortgage loans 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 prospectus supplement as Murrieta Spectrum, which secures a mortgage loan representing approximately 2.1% of the outstanding pool balance as of the cut-off date, the mortgaged property was previously financed as part of a $38,900,000 loan that was securitized in 2006 in the GSMS 2006-GC6 transaction. In 2009, the prior loan was moved to special servicing. In 2010, the prior loan was modified, splitting such prior loan into a $17,400,000 A-Note and a $21,500,000 B-Note. Proceeds of the Murrieta Spectrum mortgage loan were used to pay the A-Note in full and only $2,915,679 principal balance of the B-Note. | |||
L. Properties Underwritten | ||||
Based on Projections of | ||||
Future Income | With respect to 44 mortgaged properties, representing approximately 15.8% 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 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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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 of Mortgage Loans | Aggregate Cut-off Date Balance | % of Initial Outstanding Pool Balance | |||||||||
Lockout/Defeasance(1)(3) | 43 | $ | 624,562,336 | 65.0% | |||||||
Lockout/Yield Maintenance(2)(3) | 13 | $ | 292,046,311 | 30.4% | |||||||
Lockout/Defeasance/ Defeasance or Prepayment Penalty(1)(3)(4) | 1 | $ | 40,000,000 | 4.2% | |||||||
Yield Maintenance/ Defeasance or Yield Maintenance(1)(3) | 5 | $ | 4,303,500 | 0.4% | |||||||
Total | 62 | $ | 960,912,147 | 100.0% |
(1) | All of the mortgage loans that permit 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 10 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” and“─Prepayment Provisions” in this prospectus supplement. | |||
(4) | Includes 1 mortgage loan, representing approximately 4.2% of the outstanding pool balance as of the cut-off date, that permits defeasance for 91 payments after a lockout period. Beginning with the 59th payment after the lockout period, in lieu of defeasance, the borrower may prepay such mortgage loan in full, together with a prepayment penalty equal to (a) 4% if such prepayment is made on or after October 6, 2022 through October 5, 2023, (b) 3% if such prepayment is made on or after October 6, 2023 through October 5, 2024 and (c) 1% if such prepayment is made on or after October 6, 2024 through July 5, 2025. | |||
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. | ||||
Lock-Out Period for Yield Maintenance Loans | ||||
Each of the yield maintenance loans listed in the table below permits prepayment with a yield maintenance charge (which amount is, in 13 cases, at least 1.0% of the prepaid amount), in certain circumstances, following the lock-out period (if applicable) as indicated in the following table: |
Mortgage Loan | Cut-off Date Principal Balance | % of Initial Outstanding Pool Balance | Lock-Out Period (months from Cut- off Date) | ||||||
Equity Inns Portfolio | $ | 80,000,000 | 8.3% | 24 | |||||
32 Avenue of the Americas | $ | 70,000,000 | 7.3% | 25 | |||||
Good Samaritan Medical Tower | $ | 42,700,000 | 4.4% | 10 | |||||
Laguna Niguel Town Center | $ | 26,433,612 | 2.8% | 21 | |||||
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Hacienda Gardens | $ | 24,000,000 | 2.5% | 24 | |||||
BJs Montgomeryville | $ | 11,986,486 | 1.2% | 24 | |||||
Ortega Village - Retail | $ | 10,574,134 | 1.1% | 21 | |||||
Somerset Apartments | $ | 7,500,000 | 0.8% | 24 | |||||
High Country Plaza | $ | 6,483,964 | 0.7% | 21 | |||||
Walton Shoppes | $ | 3,500,000 | 0.4% | 24 | |||||
Ortega Village - Pads | $ | 3,491,459 | 0.4% | 21 | |||||
Ferndale Avenue Shoppes | $ | 3,032,410 | 0.3% | 23 | |||||
Eureka Crossings | $ | 2,344,247 | 0.2% | 23 | |||||
Family Dollar - Rose Hill | $ | 997,500 | 0.1% | NAP | |||||
Family Dollar - Moultrie | $ | 927,500 | 0.1% | NAP | |||||
Family Dollar - Biscoe | $ | 857,500 | 0.1% | NAP | |||||
Family Dollar - Rockingham | $ | 819,000 | 0.1% | NAP | |||||
Dollar General - De Soto | $ | 702,000 | 0.1% | NAP |
The mortgage loans that are subject to yield maintenance provisions generally permit voluntary prepayment without the payment of any penalty on the last 3 to 7 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 prospectus supplement, except as described under “—GACC’s Underwriting Standards—Exceptions” in this prospectus supplement. | |
The mortgage loans that Ladder Capital Finance LLC will be selling to the depositor were originated in accordance with Ladder Capital Finance LLC’s underwriting standards, as set forth under “The Sponsors,Mortgage Loan Sellers and Originators—Ladder Capital Finance LLC—LCF’s Underwriting Standards” in this prospectus supplement. | ||
The mortgage loans that Cantor 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 Real Estate Lending, L.P.—CCRE Lending’s Underwriting Standards” in this prospectus supplement. | ||
The mortgage loans that Jefferies LoanCore LLC will be selling to the depositor were originated in accordance with Jefferies LoanCore LLC’s underwriting standards, as set forth under “The Sponsors, Mortgage Loan Sellers and Originators—Jefferies LoanCore LLC—JLC’s Underwriting Guidelines and Procedures” in this prospectus supplement. | ||
O. Mortgage Loans with | ||
Related Borrowers | Five (5) groups of mortgage loans have related borrowers that are affiliated with one another through partial or complete direct or indirect common ownership, with the 3 largest groups representing approximately 4.9%, 2.8% and 0.9%, respectively, | |
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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 10 largest mortgage loans, which represent in the aggregate approximately 51.2% 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 | U/W NCF DSCR | Cut-off Date LTV | LTV Ratio at Maturity or ARD | Cut-off Date U/W NOI Debt Yield | |||||||||
Equity Inns Portfolio (1)(2) | $ | 80,000,000 | 8.3% | 4.9600% | 59 | 2.35x | 64.4% | 64.4% | 13.3% | ||||||||
32 Avenue of the Americas(1) | $ | 70,000,000 | 7.3% | 4.8320% | 120 | 1.88x | 55.2% | 55.2% | 9.8% | ||||||||
11 Madison Avenue(1) | $ | 69,600,000 | 7.2% | 3.5602% | 118 | 3.89x | 32.5% | 32.5% | 14.3% | ||||||||
1209 DeKalb | $ | 46,000,000 | 4.8% | 4.7250% | 59 | 1.48x | 72.3% | 72.3% | 7.1% | ||||||||
Good Samaritan Medical Tower | $ | 42,700,000 | 4.4% | 4.5400% | 118 | 1.96x | 62.8% | 62.8% | 9.7% | ||||||||
Harvey Building Products Portfolio(1) | $ | 41,953,778 | 4.4% | 4.8500% | 59 | 1.96x | 53.5% | 49.3% | 12.8% | ||||||||
Beach House Hilton Head | $ | 40,000,000 | 4.2% | 4.9000% | 119 | 1.58x | 72.7% | 62.8% | 11.3% | ||||||||
Whitehall Hotel | $ | 35,944,447 | 3.7% | 4.9900% | 119 | 1.51x | 53.6% | 40.2% | 11.7% | ||||||||
611 Cowper(3) | $ | 32,914,514 | 3.4% | 4.3500% | 118 | 1.60x | 55.8% | 45.0% | 10.1% | ||||||||
Springfield Mall(1) | $ | 32,460,817 | 3.4% | 4.4485% | 119 | 1.76x | 58.0% | 46.8% | 11.1% | ||||||||
Total/Wtd. Avg. | $ | 491,573,556 | 51.2% | 4.5984% | 98 | 2.14x | 57.1% | 53.5% | 11.4% |
(1) | Each such mortgage loan is part of a loan combination and has one or morepari passu companion loans that will not be included in the issuing entity. The debt service coverage ratio, loan-to-value ratios and debt yield for each such mortgage loan have been calculated based on the 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. In addition, in the case of the 11 Madison Avenue mortgage loan, representing approximately 7.2% of the outstanding pool balance as of the cut-off date, 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 mortgage loan secured by the portfolio of mortgaged properties identified on Annex A-1 to this prospectus supplement as Equity Inns Portfolio, representing approximately 8.3% of the outstanding pool balance as of the cut-off date, the “portfolio appraised value” of $360,000,000 reflects a premium attributed to the aggregate value of the Equity Inns Portfolio mortgaged properties as a whole. Based on the sum of the appraised value of each of the mortgaged properties within the Equity Inns Portfolio on an individual basis, which is $322,400,000, the cut-off date LTV is 72.0%. | |
(3) | In the case of the 611 Cowper mortgage loan, representing approximately 3.4% of the outstanding pool balance as of the cut-off date, the cut-off date LTV has been calculated based on the “as stabilized” appraised value. Based on the “as-is” appraised value of $51,800,000, the cut-off date LTV is 63.5%. |
For a brief summary of the 20 largest mortgage loans (including the top 10 mortgage loans described above) in the pool of mortgage loans, see Annex B to this prospectus supplement. | ||
ADDITIONAL CONSIDERATIONS | ||
Optional Termination | On any distribution date on which the aggregate outstanding principal balance of the mortgage loans remaining in the issuing entity is less than 1.0% of the aggregate outstanding pool balance as of the cut-off date, each of (i) the majority controlling class certificateholders, (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 E certificates are no longer outstanding, the issuing entity could also be terminated in connection with an exchange by the “sole certificateholder” (as defined in “The Pooling and Servicing | |
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Agreement—Optional Termination”) of all the then outstanding certificates, excluding the Class V, Class R and Class LR certificates (and, if the sole 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 certificateholder makes a payment to the master servicer and the certificate administrator as described under “The Pooling and Servicing Agreement—Optional Termination” in this prospectus supplement. | ||
See “The Pooling and Servicing Agreement—Optional Termination” in this prospectus supplement and “Description of the Certificates—Termination” in the accompanying prospectus. | ||
Repurchase Obligation | Each mortgage loan seller will make the representations and warranties set forth on Annex F to this prospectus supplement, subject to the exceptions set forth on Annex G to this prospectus supplement, 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 prospectus supplement. Ladder Capital Finance Holdings LLLP, Series TRS of Ladder Capital Finance Holdings LLLP and Series REIT of Ladder Capital Finance Holdings LLLP will agree, pursuant to the related mortgage loan purchase agreement, to guarantee payment in connection with the performance of such obligations on the part of Ladder Capital Finance LLC, which is an indirect subsidiary of Ladder Capital Finance Holdings LLLP. 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. | |
In the case of the mortgage loan secured by the portfolio of mortgaged properties identified on Annex A-1 to this prospectus supplement as Equity Inns Portfolio, as to which Ladder Capital Finance LLC and German American Capital Corporation are each a mortgage loan seller with respect to its respective note, each mortgage loan seller will only be obligated to repurchase the specific note as to which it is acting as mortgage loan seller. | ||
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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 prospectus supplement, 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 prospectus supplement. | |
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 prospectus supplement under “Description of the Mortgage Pool—Loan Combinations.” | ||
The holder of a mezzanine loan secured by direct or indirect equity interests in the related 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 “—Loan Combinations” in this prospectus supplement. | ||
With respect to each of the Equity Inns Portfolio mortgage loan, the Harvey Building Products Portfolio mortgage loan and the Springfield Mall mortgage loan, if such mortgage loan becomes a defaulted mortgage loan, the 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 pooling and servicing agreement. | ||
With respect to each servicing shift mortgage loan, if such servicing shift mortgage loan becomes a defaulted mortgage loan, the special servicer (or, on and after the applicable servicing shift securitization date, the servicing shift special |
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servicer), will be required to sell such servicing shift 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 related pooling and servicing agreement. | |||
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. | |||
With respect to the 40 Wall Street mortgage loan, if such mortgage loan becomes a defaulted mortgage loan, the WFCM 2015-LC22 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 WFCM 2015-LC22 pooling and servicing agreement. | |||
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, companion loan-backed securities or mezzanine loans by the depositor, mortgage loan sellers, underwriters, master servicer, special servicer, trustee, certificate administrator, operating advisor (or the master servicer or special servicer with respect to the securitization of any non-serviced companion loan) or any of their affiliates; | ||
· | the relationships, including financial dealings, 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; | ||
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· | the opportunity of the initial investor in the Class X-D, Class X-E, Class X-F, Class F, Class G, Class H, Class J 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 prospectus supplement. | |||
Material Federal Income | |||
Tax Consequences | Elections will be made to treat portions of the issuing entity (exclusive of the portions of the issuing entity consisting of the entitlement to excess interest and the related distribution account), as two separate REMICs, referred to herein 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. | ||
The Lower-Tier REMIC will issue regular interests, all of which will be held by the Upper-Tier REMIC, and a residual interest. The Upper-Tier REMIC will issue regular interests and a residual interest. | |||
Certain other assets will be held as a portion of the issuing entity separate and apart from the two REMICs. In the opinion of counsel, the portions of the issuing entity consisting of the entitlement to 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 prospectus supplement. | |||
Federal income tax consequences of an investment in the certificates offered in this prospectus supplement 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 A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class A-M and Class B certificates will be issued at a premium for federal income tax purposes. It is anticipated that the Class C certificates will be issued with | ||
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ade minimis amount of original issue discount for federal income tax purposes | ||
See “Material Federal Income Tax Consequences” in this prospectus supplement. | ||
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 prospectus supplement 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 or whether there exists any statutory, regulatory or administrative exemption applicable thereto. The U.S. Department of Labor has granted substantially identical administrative exemptions to Deutsche Bank Securities Inc., Department Final Authorization Number 97-03E, and to Cantor Fitzgerald & Co., Department Final Authorization Number 2011-05E, each as amended by Prohibited Transaction Exemption 2013-08, which generally exempt 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 exemptions granted to Deutsche Bank Securities Inc. and Cantor Fitzgerald & Co. will generally apply to the certificates offered in this prospectus supplement;provided that certain conditions are satisfied. See “ERISA Considerations” in this prospectus supplement and “Certain ERISA Considerations” in the accompanying prospectus. | ||
Ratings | It is a condition to the issuance of the offered certificates that each class of the offered certificates receive investment grade credit ratings from the nationally recognized statistical rating organizations engaged by the depositor to rate such class of offered certificates. | |
See “Ratings” in this prospectus supplement and “Rating” in the accompanying 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 related class of offered certificates has agreed to perform ratings surveillance with respect to its ratings for so long as such related class of offered certificates remains outstanding. It is expected that the fees for such ratings surveillance will be paid by the depositor. Although it is expected that the depositor will pay such fees for ongoing rating surveillance by the rating agencies, the depositor has no obligation or ability to ensure that any rating agency performs any such rating surveillance. In addition, a rating |
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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 class of offered certificates. Any rating agency that rates a class of offered certificates may, in its discretion, lower or withdraw its rating at any time as to such class of offered certificates. None of the relevant parties (including, without limitation, the issuing entity, the depositor, the sponsors, the master servicer, the special servicer, the certificate administrator, the trustee, the operating advisor and their affiliates) will be required to monitor any changes to any ratings on the offered certificates. | ||
Nationally recognized statistical rating organizations that the depositor has not engaged to rate any class of certificates may nevertheless issue unsolicited credit ratings on one or more classes of certificates and any one or more of the engaged rating agencies may issue unsolicited credit ratings on one or more classes of the certificates that it was not engaged to rate upon initial issuance, in each case, relying on information they receive pursuant to Rule 17g-5 under the Securities Exchange Act of 1934, or otherwise. If any such unsolicited ratings are issued with respect to any rated class of certificates, we cannot assure you that they will not be different from any ratings assigned by an engaged rating agency to the related class of certificates on the closing date. The issuance of any unsolicited ratings that are lower than the ratings assigned by an engaged rating agency to the related class of certificates on the closing date may adversely impact the liquidity, market value and regulatory characteristics of that class of certificates. | ||
As part of the process of obtaining ratings for the offered certificates, the depositor had initial discussions with 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 the related classes of offered certificates and certain classes of private certificates not offered by this prospectus supplement (although an engaged rating agency may not ultimately issue ratings on all classes of certificates). The decision not to engage certain of the nationally recognized statistical rating organizations to rate any classes of certificates was due, in part, to those engaged nationally recognized statistical rating organizations’ initial subordination levels for such classes of certificates and the decision to engage one or more of the engaged rating agencies to only rate certain classes of certificates, but not others, was also due, in part, to those engaged rating agencies’ initial subordination levels for such classes of certificates. Accordingly, if the depositor selected such other nationally recognized statistical rating organizations to rate the offered certificates or had it engaged the engaged rating agencies to rate those other classes of |
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certificates, their ratings of the offered certificates may have been different, and potentially lower, than those ratings ultimately assigned to the related class of offered certificates by the engaged rating agencies. 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. In addition, the decision not to engage the engaged rating agencies in the rating of a class of certificates to be issued in connection with this transaction may negatively impact the liquidity, market value and regulatory characteristics of those classes of certificates. | ||
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 prospectus supplement. In no event will no downgrade confirmations from any nationally recognized statistical rating organization (other than the engaged rating agencies 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 the engaged rating agencies 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 prospectus supplement and “Rating” in the accompanying 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 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 |
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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 prospectus supplement). | ||
See “Legal Investment” in this prospectus supplement and the accompanying prospectus. | ||
Denominations; Clearance | ||
and Settlement | The certificates offered in this prospectus supplement 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 XP-A and Class XS-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 prospectus supplement and “Description of the Certificates—Book-Entry Registration and Definitive Certificates” in the accompanying 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 prospectus supplement 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 prospectus supplement.
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 related borrower and may result in the inability of such 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 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 all of the circumstances described
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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 prospectus supplement and the accompanying 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 or any other person.
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 related 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 related borrower (or if a non-recourse carveout to the borrower applies), in most cases, such 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.
It may be possible that the master lease for the mortgaged loan secured by the portfolio of mortgaged properties identified on Annex A-1 to this prospectus supplement as Harvey Building Products Portfolio, which represent approximately 4.4% of the outstanding pool balance as of the cut-off date (the “Harvey Building Products Portfolio Master Lease”) could be construed in a bankruptcy as a financing lease or other arrangement under which the related master lessee (and/or its affiliates) would be deemed as effectively the owner of the Harvey Building Products Portfolio properties, rather than a tenant, with potentially adverse consequences for the holder of the Harvey Building Products Portfolio mortgage loan, including a potentially greater risk of an unfavorable plan of reorganization and competing claims of creditors of the related master lessee and/or its affiliates. However, the Harvey Building Products Portfolio
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Master Lease includes no option on the part of the related master lessee to purchase the Harvey Building Products Portfolio properties, and the related borrower has delivered a “true lease” opinion with respect to the Harvey Building Products Portfolio Master Lease, which is a reasoned opinion of outside counsel to the related borrower to the effect that, in a federal bankruptcy proceeding, and subject to certain qualifications and limitations set forth therein, the Harvey Building Products Portfolio Master Lease would be construed as a true lease rather than being characterized as a financing lease. The “true lease” opinion is subject to certain assumptions and qualifications regarding the related borrower, the related master lessee, their respective affiliates and the lender and regarding the Harvey Building Products Portfolio properties and the Harvey Building Products Portfolio Master Lease, including assumptions that the Harvey Building Products Portfolio properties have a useful life beyond the term of the Harvey Building Products Portfolio Master Lease and that the rent under the Harvey Building Products Portfolio Master Lease is reflective of a fair rental value for the Harvey Building Products Portfolio properties. Furthermore, reasoned opinions, in general, do not provide any guaranty as to what any particular court would actually decide, but rather an opinion as to the decision a court would reach if the issues were competently presented and the court followed existing precedent as to legal and equitable principles applicable in the bankruptcy cases. Therefore, the result described in such “true lease” opinion is not a guarantee.
The Harvey Building Products Portfolio Master Lease is drafted as a single, unitary, indivisible, non-severable lease of all the Harvey Building Products Portfolio properties and not to constitute separate leases contained in one document that are each governed by similar terms. The related borrower delivered a “unitary lease opinion” with respect to the Harvey Building Products Portfolio Master Lease which is a reasoned opinion of outside counsel to the related borrower to the effect that, subject to certain qualifications and limitations set forth therein, the Harvey Building Products Portfolio Master Lease would be construed as a unitary, non-severable lease. The “unitary lease” opinion is subject to certain assumptions and qualifications regarding future actions of the related borrower, the related master lessee, their respective affiliates and the lender and regarding the Harvey Building Products Portfolio properties and the Harvey Building Products Portfolio Master Lease. Furthermore, reasoned opinions, in general, do not provide any guaranty as to what any particular court would actually decide, but rather an opinion as to the decision a court would reach if the issues were competently presented and the court followed existing precedent as to legal and equitable principles applicable in the bankruptcy cases. Therefore, the result described in such “unitary lease” opinion is not a guarantee.
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 related 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 security and source of payment for the mortgage loans will be the mortgaged properties and the other collateral described in this prospectus supplement. 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 related 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 prospectus supplement.
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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. |
Forty-four (44) mortgaged properties, representing approximately 15.8% 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 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.
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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 prospectus supplement 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 prospectus supplement 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 prospectus supplement. 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 prospectus supplement.
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 prospectus supplement 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
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assets in commercial mortgage-backed securities transactions, static pool data for prior securitized pools, 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 prospectus supplement 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. See “—Risks Related to Tenants—Tenant Concentration Entails Risk”.
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. As a result, 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. For example:
· | In the case of the mortgage loan secured by the mortgaged property identified on Annex A-1 to this prospectus supplement as 32 Avenue of the Americas, representing approximately 7.3% of the outstanding pool balance as of the cut-off date, the mortgaged property has been designated as a “landmark” by the New York City Landmark Preservation Commission. As a result, any alteration which would otherwise require a permit to be obtained by the New York City Department of Buildings (generally, major alterations that are not considered ordinary repairs) and plans to restore the building following a casualty or condemnation, must be approved by the New York City Landmark Preservation Commission. |
· | In the case of the mortgaged property identified on Annex A-1 to this prospectus supplement as 40 Wall Street, which secures a mortgage loan representing approximately 0.5% of the outstanding pool balance as of the cut-off date, the mortgaged property has been awarded landmark status by the New York City Landmarks Preservation Committee and is on the U.S. National Register of Historic Places. In addition, changes, alterations, renovations, restorations, improvements or rebuildings in or of the land and the building do not require the ground lessor’s consent (subject to procurement of permits, insurance as required by the ground lease and, depending on the cost of the alterations, bonding), but the ground lessor may object to changes or alterations on the grounds that same would adversely affect the structural integrity of the building, provided such objection would have to be accompanied by a letter of a licensed engineer or architect identifying how such changes or alternations adversely affect the structural integrity of the building. Any alterations involving connecting or tying in the building with another building on an adjoining property requires landlord’s consent, unless such connection or tie in existed as of the date of the ground lease. The ground lessor’s consent is required for any demolition of the building, not to be unreasonably withheld or delayed. |
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In addition, certain other properties may have restrictions related to use, renovations, construction or other restrictions and may not be permitted to be converted to alternative uses because of such restrictions. For example:
· | In the case of the mortgaged property identified on Annex A-1 to this prospectus supplement as Springfield Mall, which secures a mortgage loan representing approximately 3.4% of the outstanding pool balance as of the cut-off date, the mortgaged property is restricted to use only as a retail shopping mall. |
· | In the case of the mortgaged property identified on Annex A-1 to this prospectus supplement as Hacienda Gardens, which secures a mortgage loan representing approximately 2.5% of the outstanding pool balance as of the cut-off date, as a result of a 2010 subsurface investigation that found contamination in the soil, the mortgaged property may not be developed for residential use without providing notice to the Santa Clara County Recorder’s Office. |
· | In the case of the mortgaged property identified on Annex A-1 to this prospectus supplement as Biltmore Parks Apartments, which secures a mortgage loan representing approximately 1.1% of the outstanding pool balance as of the cut-off date, the mortgaged property is restricted to use only for multifamily housing purposes. |
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 or other specialized office building or leased space may be “useable” as a regular office building or tenant space, the rents that may be collected in the event the 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 7 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 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 related 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 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.
We cannot assure you that the information set forth in this prospectus supplement regarding appraised values or loan-to-value ratios accurately reflects past, present or future market values of the
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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. In certain cases, appraisals may reflect “as-stabilized”, “as-complete”, “as renovated”, “hypothetical as is”, “as portfolio” and/or “as-is” values although the appraised value reflected in this prospectus supplement with respect to the mortgaged properties generally reflect only the “as-is” value unless otherwise indicated in the definition of “Appraisal Value” under “Description of the Mortgage Pool” below, on Annex A-1 to this prospectus supplement and/or the footnotes thereto.
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 related 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 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 42 mortgaged properties, which secure mortgage loans representing in the aggregate approximately 12.1% 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 2 mortgaged properties, which secure mortgage loans representing approximately 1.1% of the outstanding pool balance as of the cut-off date, such single tenant leases expire before the related mortgage loan maturity date or anticipated repayment date. Additionally, there are 4 mortgaged properties, securing mortgage loans representing in the aggregate 7.7% 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 prospectus supplement 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
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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 single 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 “—Risks Related to Tenants—Certain Additional Risks Related to Tenants” in this prospectus supplement. 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. 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. 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 and Annex B to this prospectus supplement.
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 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. For example:
· | On June 15, 2015, Gap, Inc. (the “Gap”) announced plans to close approximately 175 stores, approximately 140 stores will close this year in an effort to reduce store locations. Although specific properties have not been identified by the company, we cannot assure you that mortgaged properties having such tenants will not be adversely affected. In the case of the mortgaged property identified on Annex A-1 to this prospectus supplement as Springfield Mall, which secures a mortgage loan representing approximately 3.4% of the outstanding pool balance as of the cut-off date, The Gap/Gap Kids is the third largest tenant at the mortgaged property. We cannot assure you that this Gap will remain open for business or that the closing of any other Gap store will not impact other mortgaged properties securing mortgage loans in the mortgage pool. |
· | On September 8, 2015, Macy’s, Inc. announced plans to close between 35 and 40 underperforming stores out of its approximately 730 stores. In the case of the mortgaged property identified on Annex A-1 to this prospectus supplement as Springfield Mall, which secures |
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a mortgage loan representing approximately 3.4% of the outstanding pool balance as of the cut-off date, Macy’s is a shadow anchor tenant at such mortgaged property. We cannot assure you that this Macy’s will remain open for business. |
· | In the case of the mortgaged properties identified on Annex A-1 to this prospectus supplement as Laguna Niguel Town Center, Walgreens VA Beach, 40 Wall Street, Walgreens Frisco TX and Walgreens – Goodwill Missouri TX, which secure mortgage loans representing approximately 2.8%, 0.8%, 0.5%, 0.4% and 0.4%, respectively of the outstanding pool balance as of the cut-off date, each such mortgaged property contains at least one Walgreens store (which includes Duane Reade stores) as a tenant (or as the sole tenant). In the case of the mortgaged property identified as Walgreens – Goodwill Missouri TX, although Walgreens remains the tenant on the lease, such mortgaged property is subleased to Goodwill on undisclosed terms, and Walgreens has never occupied the mortgaged property. Walgreens recently announced plans to close approximately 200 stores. Although specific properties have not been identified by the company, we cannot assure you that the Walgreens stores at these mortgaged properties will not be closed. In addition, on October 27, 2015, Walgreens Boot Alliance Inc. (Walgreen’s parent company) announced its intention to purchase Rite Aid Corp. In the case of the mortgaged properties identified on Annex A-1 to this prospectus supplement as Hacienda Gardens, Washington Plaza and Warsaw Village, which secure mortgage loans representing approximately 2.5%, 2.4% and 0.4%, respectively of the outstanding pool balance as of the cut-off date, each such mortgaged property contains at least one Rite Aid store. If such transaction were to go through, we cannot assure you that the Rite Aid stores at these mortgaged properties will not be closed as either part of the transaction or as a result of Walgreens’ closure announcement. |
· | In the case of the mortgaged property identified on Annex A-1 to this prospectus supplement as Addison Town Center, which secures a mortgage loan representing approximately 1.7% of the outstanding pool balance as of the cut-off date, the second largest tenant at such mortgaged property is Office Depot. In May 2014, Office Depot, Inc. announced plans to close approximately 400 locations (approximately 21% of all its stores) over the following two years. Although specific properties have not been identified by Office Depot, Inc., we cannot assure you that the Office Depot store at this mortgaged property will not be closed. |
· | On March 29, 2012, Best Buy announced its plan to close 50 of its U.S. stores in 2013 and cut $800 million in costs by 2015. In the case of the mortgaged property identified on Annex A-1 to this prospectus supplement as Best Buy Boca Raton, which secures a mortgage loan representing approximately 0.8% of the outstanding pool balance as of the cut-off date, the mortgaged property has a Best Buy store as the sole tenant. We cannot assure you that Best Buy will remain open for business or that the closing of any Best Buy store will not impact other mortgaged properties securing mortgage loans in the mortgage pool. |
· | In connection with its July 2015 completion of its acquisition of Family Dollar, Dollar Tree Inc. will be required to sell 330 stores in the 150 days following such acquisition. In the case of the mortgaged properties identified on Annex A-1 to this prospectus supplement as Family Dollar – Rose Hill, Family Dollar – Moultrie, Family Dollar – Biscoe and Family Dollar – Rockingham, each of which secures a mortgage loan representing 0.1% of the outstanding pool balance as of the cut-off date, the sole tenant at each such mortgaged property operates as a Family Dollar store. We cannot assure you that these mortgaged properties will continue to operate as Family Dollar stores. |
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
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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 prospectus supplement.
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 related borrower under the mortgage loan or to an affiliate of such borrower, a deterioration in the financial condition of such borrower or its affiliates can be particularly significant to such borrower’s ability to perform under the mortgage loan as it can directly interrupt the cash flow from the mortgaged property if such 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 related 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 related borrower or an affiliate of such 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 (1) securing the 20 largest mortgage loans at which at least 10% of (x) the gross income at the mortgaged property relates to leases between the related borrower and an affiliate of such borrower or (y) the net leasable area at the mortgaged property is leased to an affiliate of the related borrower or (2) at which more than 50% of (x) the gross income at the mortgaged property relates to leases between the related borrower and an affiliate of such borrower or (y) the net leasable area at the mortgaged property is leased to an affiliate of the related borrower, in each case excluding mortgaged properties that are leased to an affiliate of such borrower that functions as an operating lease or tax credit lease structure:
· | With respect to the mortgage loan secured by the portfolio of mortgaged properties identified on Annex A-1 to this prospectus supplement as Harvey Building Products Portfolio, representing approximately 4.4% of the outstanding pool balance as of the cut-off date, the sole tenant at each mortgaged property, Harvey Industries, Inc., is an affiliate of the related borrower and occupies the related mortgaged property pursuant to a unitary master lease. The master lease is drafted as a single, non-severable lease for all the mortgaged properties in the portfolio, and no material modifications of the lease are permitted without the lender’s consent. |
· | With respect to the mortgage loan secured by the mortgaged property identified on Annex A-1 to this prospectus supplement as Wedgewood Building, representing approximately 2.0% of the outstanding pool balance as of the cut-off date, the borrower is affiliated with the first, third, fourth and fifth largest tenants (as listed on Annex A-1), as well as one smaller tenant, which tenants collectively occupy approximately 61.5% of the net rentable area at the mortgaged property. |
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Wedgewood Enterprises, Maxim Properties and Greenhedge Escrow executed joint and several lease guarantees for each of the aforementioned five borrower-affiliated leases. |
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 related 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. |
Certain Risks of School Tenants. Certain of the mortgaged properties may be occupied by a tenant operating a school. 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; and |
· | 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.
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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 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 prospectus supplement. 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, gymnastics, dance or other recreational facilities or exercise studio tenants. For information regarding health club, fitness center, exercise studio or recreational facility 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 prospectus supplement. 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, exercise studios and other recreational facilities may not be readily convertible to alternative uses if those properties were to become unprofitable for any reason. The liquidation value of any mortgaged property containing health club, fitness or other recreational facilities
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consequently may be less than would be the case if the applicable space at the related mortgaged 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 prospectus supplement.
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. Gaming tenants may rely on a special license related to the operation of its business, which licenses are generally not transferable. 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 prospectus supplement.
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 prospectus supplement.
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 than 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 20 mortgage loans, the following tenants listed on Annex A-1 to this prospectus supplement are currently in a “free rent” or 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 prospectus supplement as 32 Avenue of the Americas, which secures a mortgage loan representing approximately 7.3% of the outstanding pool balance as of the cut-off date, a free rent reserve was established at origination in the amount of $1,796,381, $1,577,928 of which is in respect of six months of free rent (from May through October 2016) for Telx, the largest tenant at such mortgaged property, and is required to be disbursed in the month to which such free rent relates into the clearing account under such mortgage loan, and the remainder of which is reserved in respect of the tenant, Impact Digital, and is required to be disbursed to the borrower upon such tenant taking occupancy of its space and commencing to pay full rent. |
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· | With respect to the mortgaged property identified on Annex A-1 to this prospectus supplement as 11 Madison Avenue, which secures a mortgage loan representing approximately 7.2% 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 $73,465,334.09 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 $8,178,926.94 on February 1, 2030, and Yelp is entitled to a one month abatement in April 2025. |
· | With respect to the mortgaged property identified on Annex A-1 to this prospectus supplement as Good Samaritan Medical Tower, which secures a mortgage loan representing approximately 4.4% of the outstanding pool balance as of the cut-off date, approximately thirteen of the sixty-one tenants, including the second largest tenant, United Imaging, LLC, which occupies 6.0% of the net rentable area, have a period ranging from one to six months of free rent following the delivery of the applicable space. At origination, the borrower deposited $275,931 into a free rent reserve for such tenants, covering various free rent periods through the year 2018. |
· | In the case of the mortgaged property identified on Annex A-1 to this prospectus supplement as 611 Cowper, which secures a mortgage loan representing approximately 3.4% of the outstanding pool balance as of the cut-off date, the sole tenant, A9.com (a wholly owned subsidiary of Amazon.com, Inc.), which has executed a 10-year lease at the mortgaged property, is not yet in occupancy or paying rent. The borrower has not yet completed certain punch list items included in the landlord work. Under the terms of the lease, rent payments are required to commence on the later of October 29, 2015 and the date of substantial completion of the landlord work required under the lease. A free rent reserve of $1,620,000 (six months’ rent) was established at origination to cover any delays in rent commencement. Until such time as the tenant is paying full rent in accordance with the terms of its lease, the lender is required to release $270,000 of such rent reserves monthly to the borrower (or if a cash management trigger event exists, into the cash management account for such mortgage loan). See “Certain Risks Related to Tenants Not Yet in Occupancy” below. |
· | With respect to the mortgaged property identified on Annex A-1 to this prospectus supplement as Murrieta Spectrum, which secures a mortgage loan representing approximately 2.1% of the outstanding pool balance as of the cut-off date, the largest tenant, Ashley’s (which occupies approximately 29.5% of net rentable area), is paying reduced rent from October 1, 2015 through September 30, 2017. See “—Risks Related to Tenants—Tenant Bankruptcy Entails Risks” in this prospectus supplement. |
· | With respect to the mortgaged property identified on Annex A-1 to this prospectus supplement as Lake Creek Festival, which secures a mortgage loan representing approximately 2.1% of the outstanding pool balance as of the cut-off date, a free rent reserve of approximately $141,365 was deposited at origination with respect to free rent periods for three tenants, including the third largest tenant, Pinballz Arcade, which has a six month free rent period through January 2016. |
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· | With respect to the mortgaged property identified on Annex A-1 to this prospectus supplement as Wedgewood Building, which secured a mortgaged loan representing approximately 2.0% of the outstanding pool balance as of the cut-off date, the second largest tenant, T-Mobile, which occupies approximately 17.1% of the net rentable area at the mortgaged property, is entitled to free rent during the months of September, October, November and December 2020. |
· | With respect to the mortgaged property identified on Annex A-1 to this prospectus supplement as Kenhorst Plaza, which secures a mortgage loan representing approximately 1.9% of the outstanding pool balance as of the cut-off date, the second largest tenant, Retro Fitness (which occupies approximately 13.3% of net rentable area), executed a lease but has not yet taken possession of the premises. The tenant is expected to take occupancy in March 2016 following build out of the space. The tenant is entitled to 12 months free rent, ending in July 2016. At origination of the mortgage loan, the borrower reserved $810,000, which amount represents the base rent due under the lease during the free rent period and the estimated cost to complete build out of the premises. The mortgage loan documents provide recourse liability to the guarantor for the losses related to the borrower’s failure to deliver the premises by July 31, 2016. See “Certain Risks Related to Tenants Not Yet in Occupancy” below. |
· | With respect to the mortgaged property identified on Annex A-1 to this prospectus supplement as Addison Town Center, which secures a mortgage loan representing approximately 1.7% of the outstanding pool balance as of the cut-off date, the third largest tenant, Crunch Fitness, representing 10.7% of the net rentable area, is currently in a free rent period through April 2016. The borrower deposited $199,884 into a free rent reserve at origination. |
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 prospectus supplement. 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 20 mortgage loans and the tenants listed on Annex A-1 to this prospectus supplement), 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 prospectus supplement as 11 Madison Avenue, which secures a mortgage loan representing approximately 7.2% 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. |
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· | With respect to the mortgaged property identified on Annex A-1 to this prospectus supplement as Good Samaritan Medical Tower, which secures a mortgage loan representing approximately 4.4% of the outstanding pool balance as of the cut-off date, the largest tenant, University of Southern California, which currently occupies 10.0% of the net rentable area, has a one-time right to terminate its lease with respect to 2,648 square feet of its space in March 2019, upon at least 6 months’ notice and payment of an amount equal to the unamortized portion of the tenant improvements. |
· | With respect to the mortgage loan secured by the mortgaged property identified on Annex A-1 to this prospectus supplement as Wedgewood Building, representing approximately 2.0% of the outstanding pool balance as of the cut-off date, the second largest tenant, T-Mobile, which occupies approximately 17.1% of the net rentable area at the mortgaged property, has a one-time right to terminate its lease effective August 31, 2020, upon at least nine months’ advance written notice and the payment of a termination fee equal to any unamortized brokerage costs and tenant improvements. |
The footnotes to Annex A-1 to this prospectus supplement identify certain of the non-contingent early termination provisions related to 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 “Annex B—Description of the Top 20 Mortgage Loans” for certain non-contingent early termination provisions related to the 5 largest tenants shown on Annex A-1 for the top 10 mortgage loans.
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.
Certain Risks of Charitable Institution Tenants. Certain mortgaged properties may have tenants that are charitable or non-profit institutions that generally rely on contributions from individuals and/or government grants or other subsidies to pay rent on office space and other operating expenses. For information regarding significant charitable or non-profit 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 prospectus supplement. 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 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 prospectus supplement as 11 Madison Avenue, which secures a mortgage loan representing 7.2% 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 |
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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 prospectus supplement as Good Samaritan Medical Tower, representing approximately 4.4% of the outstanding pool balance as of the cut-off date, a lease for approximately 3,920 square feet of expansion space is being negotiated with the University of Southern California, the largest tenant which currently leases approximately 14,605 square feet (inclusive of such expansion space) at the mortgaged property. The related mortgage loan was underwritten based on the assumption that such tenant has executed and is paying full rent under the expansion lease. At origination, the borrower deposited approximately $452,542 into a reserve, of which $130,771 is being held as additional collateral pending the execution of the expansion lease, and $321,771 is being held for tenant improvements and leasing commissions for the expansion space. The $130,771 expansion deposit is required to be released to the borrower upon execution of the expansion lease, completion of all tenant improvements and receipt of a tenant estoppel confirming its occupancy and payment of full, unabated rent, and the $321,771 of tenant funds is required to be released for tenant improvements and leasing commissions for such space. If the expansion lease is not executed, the tenant is not in occupancy and/or terminates the expansion, the borrower may use the $321,771 of tenant funds to re-tenant and improve any space at the mortgaged property. In addition, provided no event of default exists, and the mortgaged property obtains a debt yield of at least 8.75% and occupancy of at least 87.5%, the borrower may obtain release of all funds in the $452,542 reserve, regardless of whether any other conditions are satisfied. |
· | In the case of the mortgaged property identified on Annex A-1 to this prospectus supplement as 611 Cowper, which secures a mortgage loan representing approximately 3.4% of the outstanding pool balance as of the cut-off date, the sole tenant, A9.com, which has executed a 10-year lease at the mortgaged property, is not yet in occupancy or paying rent. The mortgaged property is newly constructed. The tenant is not expected to take occupancy at the mortgaged property until both (i) the borrower completes certain remaining required punch list items with respect to its required landlord work under the lease and (ii) the tenant completes certain tenant improvement work for which it is entitled to tenant allowances under the lease. As a result, the borrower has not yet obtained a permanent certificate of occupancy for the mortgaged property; however, it has obtained a temporary certificate of occupancy. |
· | With respect to the mortgaged property identified on Annex A-1 to this prospectus supplement as Lake Creek Festival, which secures a mortgage loan representing approximately 2.1% of the outstanding pool balance as of the cut-off date, the third largest tenant, Pinballz Arcade, is building out its space and is not yet in occupancy. |
· | With respect to the mortgaged property identified on Annex A-1 to this prospectus supplement as Kenhorst Plaza, which secures a mortgage loan representing approximately 1.9% of the outstanding pool balance as of the cut-off date, the second largest tenant, Retro Fitness (which occupies approximately 13.3% of net rentable area), executed a lease but has not yet taken possession of the premises. The tenant is expected to take occupancy in March 2016 following build out of the space. The tenant is entitled to 12 months free rent, ending in July 2016. At origination of the mortgage loan, the borrower reserved $810,000, which amount represents the base rent due under the lease during the free rent period and the estimated cost to complete build out of the premises. The mortgage loan documents provide recourse liability to the guarantor for the losses related to the borrower’s failure to deliver the premises by July 31, 2016. |
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
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occurrence of certain contingencies including, without limitation, based on co-tenancy provisions, breaches of the lease terms, casualty and condemnation and property performance.
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 related 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 related 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.
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 prospectus supplement.
In addition, various tenants may have rights under their respective leases that can result in substantial costs to the landlord.
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 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.
For example, with respect to the mortgaged property identified on Annex A-1 to this prospectus supplement as Murrieta Spectrum, which secures a mortgage loan representing approximately 2.1% of the outstanding pool balance as of the cut-off date, the anchor tenant, Ashleys, representing approximately 29.5% of the NRA, sought protection under Chapter 11 of the United States Bankruptcy
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Code in August 2008. At the time, the tenant was a tenant at the mortgaged property. The tenant affirmed its lease and paid $185,290 to the borrower as part of a settlement. The bankruptcy case was discharged on January 26, 2010. At mortgage loan closing, the borrower deposited $168,994 of the settlement amount into a lender controlled reserve account to be applied as prepaid rent and $16,296 of the settlement amount into a lender controlled reserve account to be applied as tenant improvement allowance. From October 1, 2015 – September 30, 2017, approximately $7,014.44 will be released monthly from the above referenced reserve account into the lockbox account related to the Ashleys monthly rent. The borrower has instructed Ashleys to pay the remaining portion of rent due each month (approximately $27,571.92) to the lockbox account (for a total of $34,586.36 rent each month).
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 prospectus supplement) 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 51.2% of the outstanding pool balance as of the cut-off date. The top 20 mortgage loans represent approximately 72.9% 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 prospectus supplement. Each of the mortgage loans other than the top 10 mortgage loans represents no more than 2.8% of the outstanding pool balance as of the cut-off date.
Risks Related to Borrower Concentration
Five (5) 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 3 largest groups representing approximately 4.9%, 2.8% and 0.9%, respectively, 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. A concentration of mortgage loans with the same borrower or related borrowers also can pose increased risks. 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, it could attempt to avert foreclosure 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 prospectus supplement for mortgage loans with related borrowers.
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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):
· | Thirty (30) retail properties, representing approximately 32.4% of the outstanding pool balance as of the cut-off date (by allocated loan amount); |
· | Eighteen (18) office properties, representing approximately 28.5% of the outstanding pool balance as of the cut-off date (by allocated loan amount); |
· | Twenty-seven (27) hospitality properties, representing approximately 19.9% of the outstanding pool balance as of the cut-off date (by allocated loan amount); |
· | Nine (9) multifamily properties, representing approximately 12.8% of the outstanding pool balance as of the cut-off date (by allocated loan amount); |
· | Twenty-nine (29) industrial properties, representing approximately 3.9% of the outstanding pool balance as of the cut-off date (by allocated loan amount); |
· | Four (4) manufactured housing community properties, representing approximately 1.3% of the outstanding pool balance as of the cut-off date (by allocated loan amount); |
· | Two (2) mixed use properties, representing approximately 0.8% of the outstanding pool balance as of the cut-off date (by allocated loan amount); and |
· | One (1) self storage property, representing approximately 0.3% of the outstanding pool balance as of the cut-off date (by allocated loan amount). |
Geographic Concentration Exposes Investors to Greater Risk of Default and Loss
As of the cut-off date, the mortgaged properties are located in 26 states and the U.S. Virgin Islands.
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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 | Aggregate Cut- | % of Initial | ||||
California | 14 | $ | 254,575,194 | 26.5% | |||
New York | 7 | $ | 199,074,357 | 20.7% | |||
Texas | 11 | $ | 85,658,646 | 8.9% | |||
Illinois | 12 | $ | 65,871,854 | 6.9% | |||
Pennsylvania | 6 | $ | 64,902,201 | 6.8% | |||
Florida | 6 | $ | 60,774,138 | 6.3% |
(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 and/or another basis deemed appropriate by the related mortgage loan seller). |
See the table entitled “Mortgaged Properties by State and/or Location” in Annex A-2 to this prospectus supplement. 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 California and New York” in this prospectus supplement. Except as set forth in the chart above, no state or location contains more than 4.2% 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 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, South Carolina, Tennessee, 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, 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
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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. For example, with respect to the seven (7) mortgaged properties located in New York State, 4 of those mortgaged properties, representing approximately 19.8% of the outstanding pool balance as of the cut-off date, are located in New York City. 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 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.
Retail Properties Have Special Risks
Thirty (30) mortgaged properties, securing mortgage loans representing in the aggregate approximately 32.4% of the outstanding pool balance as of the cut-off date (by allocated loan amount), are retail properties. For a list of retail properties with a single tenant, see Annex A-1 to this prospectus supplement. 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, medical and dental office tenants. For risks related to office tenants, see “—Office Properties Have Special Risks” in this prospectus supplement.
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In addition, certain of the retail properties may be subject to reciprocal easement agreements or fee-sharing agreements or other agreements in connection with the operation and maintenance of certain areas shared by the related borrower and other property owners. There can be no assurance that the other property owners will comply with the terms of the related fee sharing agreements.
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 |
· | 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-one (21) of the mortgaged properties, representing approximately 23.5% 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 prospectus supplement.
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.
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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 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; |
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· | 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.
See Annex A-1 to this prospectus supplement for the 5 largest tenants (by net rentable area leased) at each of the retail mortgaged properties.
Office Properties Have Special Risks
Eighteen (18) mortgaged properties, securing mortgage loans representing approximately 28.5% of the outstanding pool balance as of the cut-off date (by allocated loan amount), are office properties.
Various factors may adversely affect the value of office properties, including:
· | 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.
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In addition, certain of the office properties may be subject to reciprocal easement agreements or fee-sharing agreements or other agreements in connection with the operation and maintenance of certain areas shared by the related borrower and other property owners. There can be no assurance that the other property owners will comply with the terms of the related fee sharing agreements.
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 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 office property may be adversely affected by the availability of competing medical or dental office properties.
See Annex A-1 to this prospectus supplement 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 twenty-seven (27) hospitality properties, representing approximately 19.9% of the outstanding pool balance as of the cut-off date (by allocated loan amount). Three (3) hospitality properties, representing approximately 10.0 % of the outstanding pool balance as of the cut-off date (by allocated loan amount), are considered full service. Thirteen (13) hospitality properties, representing approximately 4.8% of the outstanding pool balance as of the cut-off date (by allocated loan amount), are considered limited service. Six (6) hospitality properties, representing approximately 3.3% of the outstanding pool balance as of the cut-off date (by allocated loan amount), are considered extended stay. Five (5) of the hospitality properties, representing approximately 1.9% of the outstanding pool balance as of the cut-off date (by allocated loan amount), is considered select service.
Property Type | Number of Mortgaged | Aggregate Cut-off Date | % of Initial Outstanding | ||||
Hospitality | 27 | $ | 191,255,094 | 19.9% | |||
Full Service | 3 | $ | 95,944,447 | 10.0% | |||
Limited Service | 13 | $ | 45,845,129 | 4.8% | |||
Extended Stay | 6 | $ | 31,310,345 | 3.3% | |||
Select Service | 5 | $ | 18,155,172 | 1.9% |
Various factors may adversely affect the economic performance of a hospitality property, including:
· | adverse economic and social conditions, either local, regional or national (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; |
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· | 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, 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; |
· | 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.
The portfolio of mortgaged properties identified on Annex A-1 to this prospectus supplement as Equity Inns Portfolio, which secures a mortgage loan representing approximately 8.3% of the outstanding pool balance as of the cut-off date, and the mortgaged property identified on Annex A-1 to this prospectus supplement as Beach House Hilton Head, which secures a mortgage loan representing approximately 4.2% of the outstanding pool balance as of the cut-off date, are undergoing substantial renovations. See “Risks Related to Construction, Development, Redevelopment, Renovation and Repairs at Mortgaged Properties” below.
With respect to the mortgaged property identified on Annex A-1 to this prospectus supplement as Westin Lake Mary, which secures a mortgage loan representing approximately 2.1% of the outstanding pool balance as of the cut-off date, there are two new hotels in the market where the mortgaged property is located.
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. 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. For example:
· | With respect to the mortgaged property identified on Annex A-1 as Beach House Hilton Head, which secures a mortgage loan representing approximately 4.2% of the outstanding pool balance as of the cut-off date, the borrower deposited approximately $658,778 into a seasonal working capital reserve, which amount is required to be applied, provided no event of default exists, to pay |
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debt service due in December 2015 and January, February and March 2016 (regardless of whether there is a shortfall in available funds). Commencing in April 2016, on each payment date in April through November of each year, if the balance in such reserve is less than the Seasonal Working Capital Reserve Account Annual Deposit Amount (defined below), the borrower must deposit one eighth of the Seasonal Working Capital Reserve Account Annual Deposit Amount into such reserve. Commencing in December 2016, provided no event of default exists: (i) if there is no cash management trigger period, such reserve is required to be applied on each payment date in December through March of each year to pay debt service and required deposits into tax, insurance (if any) and FF&E reserves (regardless of whether there is a shortfall in available funds) and (ii) if there is a cash management trigger period, such reserve is required to be applied on each payment date in December through March to pay debt service, required reserve deposits, approved budgeted monthly operating expenses and approved extraordinary expenses to the extent there are insufficient funds in the cash management account to pay such amounts. The “Seasonal Working Capital Reserve Account Annual Deposit Amount” is equal to the following amounts due in December through March of each year: debt service, required deposits into tax, insurance (if any) and FF&E reserves, and, if a cash management trigger period exists, the approved budgeted monthly operating expense amount and estimated extraordinary expenses. |
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.
The Performance of a Hospitality Property Depends in Part on the Performance of Its Franchisor or Management Company. Twenty-six (26) of the hospitality properties, representing approximately 16.2% of the outstanding pool balance as of the cut-off date (by allocated loan amount), are affiliated with a national franchisor through a franchise agreement or management agreement. Certain of the hospitality properties may be subject to a management or marketing arrangement with a regional or national brand. A hospitality property that derives its brand through a franchise, management or marketing agreement 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 mortgaged property affiliated with a franchise through a franchise agreement or management agreement 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 providing for termination because of the bankruptcy of a franchisor generally will not be enforceable. Replacement franchises 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.
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Certain of these franchise agreements or management agreements may, by their express provisions, expire during the term of the related mortgage loan. We cannot assure you 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.
With respect to the portfolio of 21 hotel mortgaged properties identified on Annex A-1 to this prospectus supplement as Equity Inns Portfolio, which secures a mortgage loan representing approximately 8.3% of the outstanding pool balance as of the cut-off date, the borrower for the mortgaged property identified as Residence Inn Jacksonville, which represents approximately 0.2% of the outstanding pool balance as of the cut-off date by allocated loan amount, recently entered into a Notice of Default and Continuing Forbearance Agreement with its franchisor. Pursuant to such agreement, the borrower acknowledged it was in default under its franchise agreement with respect to such mortgaged property, and the franchisor agreed to forbear from terminating the franchise agreement provided certain conditions were met. The agreement provides that if a property improvement plan addendum to the franchise agreement for such mortgaged property (the “PIP Addendum”) is not timely and satisfactorily completed or the mortgaged property is in the “Red Zone” for the July-December 2016 quality assurance evaluation period, or if the mortgaged property does not remain out of the “Red Zone” for all periods through the July-December 2018 quality assurance evaluation period, the franchisor may terminate the franchise agreement. The PIP Addendum calls for the completion of the work required thereunder by, or in some instances prior to, March 31, 2016. Under the related loan documents, a borrower default under any franchise agreement beyond any notice and/or cure periods, which permits a franchisor to terminate or cancel such franchise agreement, constitutes an event of default under such mortgage loan. An event of default arising from a franchise termination may be cured if within 60 days thereafter borrower enters into a replacement franchise with a franchisor which either (i) was an existing franchisor at origination or in lender’s reasonable judgment meets certain requirements in the loan documents or (ii) is one of certain pre-approved brands (Hilton, Marriott, Starwood, IHG, Hyatt, Choice, Carlson, Wyndham, AmericInn and La Quinta); provided that the right to cure with a pre-approved brand (without lender’s consent) is permitted only up to a maximum of four times and provided further that the right to cure does not apply to voluntary termination of the agreement by the borrower. In addition, with respect to five of the mortgaged properties in the portfolio, identified as and Homewood Suites Orlando, Hampton Inn Orlando, Hampton Inn Austin, Hampton Inn Alcoa, and Homewood Suites Augusta, representing in the aggregate 1.8% of the outstanding pool balance as of the cut-off date by allocated loan amount, had the property improvement plan at each related mortgaged property not been in place, the mortgaged properties score in a range that would otherwise have resulted in an unacceptable score on the most recent quality assurance evaluation conducted by the related franchisor. There can be no assurance that any of the related property improvement plans for the Residence Inn Jacksonville or any of the foregoing hotels will be satisfactorily or timely completed or that such completion will result in the related mortgaged properties meeting the quality assurance requirements in the future.
In addition, all of the mortgaged properties included in the Equity Inns Portfolio are subject to property improvement plans, which have an aggregate preliminary estimated cost of approximately $45.6 million. Such property improvement plans are required pursuant to the related franchise agreements, which further require such plans to be completed by December 2019. At origination, $10,000,000 was reserved to cover the costs of the property improvement plans. Additional reserve deposits aggregating $27,500,000 are required to be made by the borrowers in eleven quarterly scheduled payments beginning in December 2015 and ending in June 2018. There can be no assurance that the borrowers will have the funds to make, or will make, such deposits. Failure to fund or perform such property improvement plans could lead to termination of the related franchise. See“—Risks Related to Construction, Development, Redevelopment, Renovation and Repairs at the Mortgaged Properties.”
With respect to the mortgage loan secured by the mortgaged property identified on Annex A-1 to this prospectus supplement as Beach House Hilton Head, representing approximately 4.2% of the outstanding pool balance as of the cut-off date, the franchise agreement with Holiday Hospitality
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Franchising, LLC expires in February 2023, prior to the maturity of the related mortgage loan in October 2025. The borrower has a one-time right to “de-flag” the hotel no later than 90 days prior to termination of such franchise agreement, provided that: (i) the hotel becomes affiliated with any one of Preferred Hotel Group, The Leading Hotels of the World, Ltd. or another hotel group reasonably acceptable to the lender, (ii) lender reasonably approves the related documentation, (iii) the borrower pays any work costs in connection with such new affiliation, and (iv) the new hotel group provides a comfort letter to the lender. Upon “de-flagging” the hotel, the borrower is required to reserve $1,515,000; provided that if the hotel operates as a de-flagged hotel for 12 months and achieves an aggregate debt yield (including the mortgage loan and any mezzanine loan then in place) of at least 9.0% thereafter, the lender is required to disburse such reserve (i) into a property improvement plan (“PIP”) reserve to the extent an amount equal to 110% of the estimated cost of any required PIP is not then on deposit and (ii) the remainder to the borrower (or if a cash management trigger period exists, to the cash management account to be disbursed as rents). The borrower also has a one-time right to replace the existing franchisor after expiration of the current franchise, without lender’s consent, provided that (i) such replacement is one of certain specified brands of the following franchisors: Hilton Hotels & Resorts, Marriott International, Starwood Hotels & Resorts, Hyatt Hotels & Resorts or InterContinental Hotels Group, and (ii) the new franchise agreement ends no earlier than the later of five years after its commencement and October 2027.
Some hospitality properties however, may not be subject to franchise agreements, and therefore may not be required to maintain certain standards and satisfy certain criteria that would typically be required by a franchisor or a hotel chain.
In addition, 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 borrower pays rent to the fee owner borrower. For example, in the case of the mortgage loan secured by the portfolio of mortgaged properties identified on Annex A-1 to this prospectus supplement as Equity Inns Portfolio, representing approximately 8.3% of the outstanding pool balance as of the cut-off date, the fee owner borrowers leased each of the related mortgaged properties to an affiliate under an operating lease, which affiliate operating lessees are also obligors under the related mortgage loan. The Equity Inns Portfolio mortgage loan is secured by both the fee owner’s and the operating lessee’s interest in the related mortgaged properties.
Multifamily Properties Have Special Risks
There are nine (9) multifamily properties, representing approximately 12.8% 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; |
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· | 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; |
· | restrictions on the age of tenants who may reside at the property, thereby limiting the pool of potential tenants; |
· | 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. |
In addition, certain of the multifamily properties may be subject to reciprocal easement agreements or fee-sharing agreements or other agreements in connection with the operation and maintenance of certain areas shared by the related borrower and other property owners. There can be no assurance that the other property owners will comply with the terms of the related fee sharing agreements.
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.
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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, 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 prospectus supplement.
Student Housing Facilities Pose Risks Not Associated With Other Types of Multifamily Properties. Two (2) mortgaged properties representing approximately 1.6% of the outstanding pool balance as of the cut-off date, are 10% 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.
Industrial Properties Have Special Risks
There are twenty-nine (29) industrial properties, representing approximately 3.9% 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; |
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· | 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 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 have tenants that are subject to risks unique to their business, which may include cold storage facilities. In addition, such facilities require customized refrigeration design, rendering them less readily convertible to alternative uses.
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 prospectus supplement for information regarding medical office tenants.
Manufactured Housing Community Properties Have Special Risks
There are four (4) manufactured housing community properties, representing approximately 1.3% 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; |
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· | 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. |
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 leased homes owned by a borrower or its affiliate may be financed and a default on that financing may materially adversely affect the performance of the manufactured housing community mortgaged property.
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 related 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.
Mixed Use Properties Have Special Risks
There are two (2) mixed use properties, representing approximately 0.8% of the outstanding pool balance as of the cut-off date (by allocated loan amount). Each of these mixed use properties contains two or more of the following property types: office and retail. To the extent a mixed use property has one or more of the components above, such mortgaged property is subject to the risks relating to the property types described in “—Office Properties Have Special Risks”, “—Retail Properties Have Special Risks”,
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“—Multifamily Properties Have Special Risks”, “—Industrial Properties Have Special Risks” and “—Parking Properties Have Special Risks”. See Annex A-1 to this prospectus supplement for the 5 largest office and/or retail 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.
Self Storage Properties Have Special Risks
There is one (1) self storage property, representing approximately 0.3% 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; |
· | security concerns; |
· | age of improvements; or |
· | other factors; |
so that the related 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.
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
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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 related 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.
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 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 prospectus supplement.
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 prospectus supplement.
Condominium Properties Have Special Risks
In the case of six (6) of the mortgaged properties, representing approximately 16.8% 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.
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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 does 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, have 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.
For example, with the respect to the top 20 mortgage loans:
· | In the case of the mortgaged property identified on Annex A-1 to this prospectus supplement as 11 Madison Avenue, which secures a mortgage loan representing approximately 7.2% 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. |
· | In the case of the mortgaged property identified on Annex A-1 to this prospectus supplement as Beach House Hilton Head, which secures a mortgage loan representing approximately 4.2% of the outstanding pool balance as of the cut-off date, the mortgaged property consists of two condominium units in a two condominium unit condominium regime, each owned by the borrower. |
· | In the case of the mortgaged property identified on Annex A-1 to this prospectus supplement as 611 Cowper, which secures a mortgage loan representing approximately 3.4% of the outstanding pool balance as of the cut-off date, the mortgaged property represents a condominium unit in a two unit condominium. The unit that constitutes the mortgaged property consists of the first three floors of a four-story building. The remaining floor, which is not collateral for the mortgage loan, constitutes the residential unit of the condominium. The residential condominium unit is owned by the same entity that owns the borrower. The borrower, as owner of the mortgaged property, is entitled to 80% of the voting rights in the condominium association. |
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 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
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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.
In addition, certain of the mortgaged properties may be converted, in whole or in part, to a condominium regime at a future date. For additional information, see “Description of the Mortgage Pool—Certain Terms and Conditions of the Mortgage Loans—Property Releases.”
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 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:
· | In the case of the portfolio of 21 hotel mortgaged properties identified on Annex A-1 to this prospectus supplement as Equity Inns Portfolio, which secures a mortgage loan representing approximately 8.3% of the outstanding pool balance as of the cut-off date, all of such mortgaged properties are subject to property improvement plans to upgrade each hotel, which have an aggregate preliminary estimated cost of approximately $45.6 million. Such upgrades are required pursuant to the franchise agreements with the respective franchisors, which upgrades are required under such franchise agreements to be completed by December 2019. At origination, $10,000,000 was reserved to cover the costs of the property improvement plans. Additional reserve deposits aggregating $27,500,000 are required to be made by the borrowers in eleven quarterly scheduled payments beginning in December 2015 and ending in June 2018. There can be no assurance that the borrowers will have the funds to make, or will make, such deposits. Failure to fund or perform such property improvement plans could lead to termination of the related franchise. |
· | In the case of the mortgaged property identified on Annex A-1 to this prospectus supplement as 11 Madison Avenue, which secures a mortgage loan representing approximately 7.2% 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 |
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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 $33,806,313.00. With respect to Sony, see “—Certain Risks Related to Tenants Not 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 mortgage loan secured by the mortgaged property identified on Annex A-1 to this prospectus supplement as Beach House Hilton Head, representing approximately 4.2% of the outstanding pool balance as of the cut-off date, a capital improvement plan including guest room renovation, replacement of furniture, fixtures and equipment, and roofing and other deferred maintenance projects, with a total budgeted cost of $6,400,000 is expected to be implemented during 2015-2016. $600,000 of such budgeted amount was spent prior to loan origination, and $5,800,000 was deposited into a reserve at origination, of which $922,889 was immediately disbursed to the borrower to purchase FF&E. |
· | In the case of the mortgaged property identified on Annex A-1 to this prospectus supplement as 611 Cowper, which secures a mortgage loan representing approximately 3.4% of the outstanding pool balance as of the cut-off date, such mortgaged property is newly constructed. The sole tenant, A9.com, is not expected to take occupancy at the mortgaged property until both (i) the borrower completes certain remaining required punch list items with respect to the landlord work it is required to perform under the lease and (ii) the tenant completes certain tenant improvement work for which it is entitled to tenant allowances under the lease. As a result, the borrower has not yet obtained a permanent certificate of occupancy for the mortgaged property; however, it has obtained a temporary certificate of occupancy. |
· | In the case of the mortgage loan secured by the mortgaged property identified on Annex A-1 to this prospectus supplement as Carrollwood Station, representing approximately 2.2% of the outstanding pool balance as of the cut-off date, the borrower is planning to perform $1,550,000 of renovations at the mortgaged property, including exterior improvements and interior unit upgrades. At mortgage loan origination, (1) the borrower reserved $650,000 with lender for the payment of related interior unit upgrade expenses and (2) the borrower and guarantor provided a $900,000 lien-free completion guaranty in connection with the proposed exterior improvements, which will be held as additional collateral for the mortgage loan until, in lender’s reasonable determination, among other things, the borrower has either (a) expended $900,000 on approved budgeted expenses (exclusive of the initial $650,000 reserve) or (b) expended at least $450,000 on approved budgeted expenses (exclusive of the initial $650,000 reserve) and the mortgaged property has achieved a debt yield of 9.25% or greater as of any four consecutive calculation dates. |
· | In the case of the mortgage loan secured by the mortgaged property identified on Annex A-1 to this prospectus supplement as Addison Town Center, representing approximately 1.7% of the outstanding pool balance as of the cut-off date, the anchor tenant, Kroger Food Stores, has notified the borrower that it intends to construct a fuel center on the mortgaged property in the fall of 2015. The tenant will be funding all of the costs, estimated to be approximately $2,000,000, associated with the construction of the fuel center. |
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 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.
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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 related 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 related 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.
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 seller could be challenged, and if such challenge were successful, delays or reductions in payments on your certificates could occur.
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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.
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 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
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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. |
There can be no assurance that the reserve amounts will be sufficient to obtain regulatory closure, to remediate any environmental conditions or to clean up the related mortgaged property.
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 7 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 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 prospectus supplement.
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
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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 mortgage loan secured by the mortgaged property identified on Annex A-1 to this prospectus supplement as Whitehall Hotel, which secures a mortgage loan representing approximately 3.7% of the outstanding pool balance as of the cut-off date, the related Phase I environmental site assessment (“ESA”) reported that although a leaking underground storage tank (“LUST”) incident is listed in a state environmental spills database as being located at the street address of the mortgaged property, the LUST incident actually relates to an adjacent non-collateral property that is owned by an affiliate of the borrower, and was formerly owned by the borrower. Records show that sampling during the 1993 filling with concrete and closure in place of the tank had detected low levels of hydrocarbons in soil near the tank ends, a report was submitted to the Illinois Environmental Protection Agency (“IEPA”), and the IEPA later had requested, in a letter dated June 20, 2011, sampling at the tank sidewalls. According to the ESA, such sampling now would be impracticable since a new structure has been constructed over the tank area. The ESA concluded based on the existing sampling data, capping by sidewalk and construction, and other factors, that remediation is unnecessary and infeasible. Therefore, the ESA recommended that appropriate paperwork be submitted to the IEPA to explain the address error and the basis for requesting regulatory closure with no further investigation or other action. The borrower is obligated to (i) file a response to IEPA’s request for sampling at the tank sidewalls, requesting closure of the LUST incident at the adjacent property, and (ii) to commence, and thereafter diligently pursue, the correction of the address error with IEPA such that no incident reports related to the mortgaged property mistakenly remain on file with IEPA. Notwithstanding the foregoing, we cannot assure you that such paper work will be submitted or that the IEPA will in fact grant regulatory closure during the term of the related mortgage loan. However, the owner of the adjacent parcel has agreed to remediate such parcel in the event required by IEPA and to indemnify the borrower for any loss related to the related remediation. In addition, the mortgage loan is recourse to the guarantor for all costs related to the adjacent parcel being listed on the database and for any related cleanup not covered by the current owner of the Database Parcel. |
· | With respect to the mortgaged property identified on Annex A-1 to this prospectus supplement as Hacienda Gardens, which secures a mortgage loan representing approximately 2.5% of the outstanding pool balance as of the cut-off date, the Phase I ESA identified a former dry cleaner operation that was located on the parking lot area of the mortgaged property from approximately 1960 to 2005. In 2010, an initial subsurface investigation at the mortgaged property found contamination in the soil and groundwater. The Santa Clara County Department of Environmental Health (“SCCDEH”) determined that soil vapor intrusion was not a concern based on the depth of the contamination and the lack of structures located over the areas of concern. However, a deed restriction that restricts any development of the parking lot and provides that the rest of the mortgaged property may not be developed for residential use without notification to the SSCDEH and potential additional data/documentation was recorded with the Santa Clara County Recorder’s Office on July 16, 2014. |
· | With respect to the mortgage loan secured by the mortgaged property identified on Annex A-1 to this prospectus supplement as Brentwood Retail Center, representing approximately 1.4% of the outstanding pool balance as of the cut-off date, the related Phase I ESA identified a recognized |
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environmental condition for a gasoline and oil service station occupying a portion of the mortgaged property from at least 1928 to 1948. Due to a lack of regulatory oversight and related records during this period, there is potential that underground storage tanks (“USTs”) are still present. Based on an existing structure capping this portion of the mortgaged property, as well as the lack of evidence of any associated petroleum release, the Phase I ESA does not recommend any further action. |
· | In the case of the mortgaged property identified on Annex A-1 to this prospectus supplement as Walgreens VA Beach, which secures a mortgage loan representing approximately 0.8% of the outstanding pool balance as of the cut-off date, the related environmental report noted issues relating to the prior operation of a dry cleaner and underground storage tanks at the mortgaged property. Continued remediation until closure is obtained from the Virginia Department of Environmental Quality (“VDEQ”) was recommended. The borrower has entered into a voluntary remediation program with the VDEQ. At origination, an environmental reserve in the amount of $59,375 was established for such remediation. In addition, an environmental policy in the name of the seller of the mortgaged property was issued by Steadfast Insurance Company. The borrower and lender under the mortgage loan are named as additional insureds under such policy. Such policy has an individual and annual aggregate claim limit of $5,000,000, a deductible of $50,000, and a term of 10 years (which may be extended an additional 2 years, upon payment of an additional insurance premium at the rate charged by the insurer at the time of the extension), and is limited to known and disclosed conditions. Any claim made by any other party that is a named or additional insured under such policy will reduce the coverage available to lender. Walgreens, the sole tenant at the mortgaged property, has the right to terminate its lease if the borrower fails to perform, or is not diligently pursuing, its remediation work. |
· | In the case of the mortgaged property identified on Annex A-1 to this prospectus supplement as Ferndale Avenue Shoppes, which secures a mortgage loan representing approximately 0.3% of the outstanding pool balance as of the cut-off date, a leaking underground storage tank case remains outstanding due to contaminated soil and ground water (which were above permitted residential criteria but within the criteria for the current commercial use). The Michigan Department of Environmental Quality (“MDEQ”) had requested the prior owner file a restrictive covenant and closure request, which the borrower filed at closing, and the MDEQ has 90 days to review. The environmental consultant stated no further action was required but recommended borrower follow up with the MDEQ. |
With respect to each mortgaged property identified in the bullet below, 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 sponsor in connection with the breach of environmental covenants in the related mortgage loan documents or in connection with a potential environmental concern:
· | In the case of the portfolio of mortgaged properties identified on Annex A-1 to this prospectus supplement as Harvey Building Products Portfolio, which secures a mortgage loan representing approximately 4.4% of the outstanding pool balance as of the cut-off date, the related Phase I ESAs recommended the following: (i) limited subsurface investigation be conducted at the Waltham Corporate mortgaged property related to historical autobody repair and manufacturing activities conducted at the mortgaged property; (ii) the oil water separator in place at the Dartmouth mortgaged property be serviced, which separator is in place due to a hydraulic oil leak from a solid waste compactor and that such compactor be repaired; (iii) secondary containment structures be installed at the Woburn mortgaged property beneath four above ground storage tanks in order to contain potential spills or releases and that a limited subsurface investigation be conducted in the vicinity of the former underground storage tanks; (iv) phase II ESA be conducted at the Bethlehem mortgaged property related to soil and groundwater contamination; (v) that closure documentation for the former underground storage tank with respect to the Woburn CPD mortgaged property be provided for review and, if unavailable, a geophysical survey, including a ground penetrating radar be conducted in the reported former location of such underground |
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storage tank; (vi) ongoing monitoring at the Manchester mortgaged property with respect to soil contamination; (vii) a limited subsurface investigation be conducted in the vicinity of the former underground storage tank at the Fitchburg mortgaged property and (viii) if underground storage tank closure documentation is unavailable for review, a limited subsurface investigation be conducted with respect to potential soil contamination. The related borrower obtained an environmental insurance policy from XL Catlin Insurance, with coverage up to $6,000,000, in the aggregate and $2,000,000 per incident. |
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 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 prospectus supplement 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 related borrower to repay the loan by the maturity date or anticipated repayment date. Accordingly, such 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, 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 related 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
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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 identified on Annex A-1 to this prospectus supplement as Equity Inns Portfolio, 32 Avenue of the Americas, 11 Madison Avenue, Harvey Building Products Portfolio, Springfield Mall and 40 Wall Street, representing approximately 8.3%, 7.3%, 7.2%, 4.4%, 3.4% and 0.5%, respectively, 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.
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.
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 prospectus supplement. 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. 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
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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. Most or all of the mortgage loans with original principal balances below $20 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.
In certain cases, a borrower may have a fund in its organizational structure, which fund has been organized to survive for a limited term.
Additionally, certain of the mortgage loans related to mortgaged properties located in Maryland may be structured with a borrower (that is directly obligated under the related note) that is different from the legal owner of the related mortgaged property. In such instances, the related property owner, although not obligated directly under the note, ordinarily agrees to guaranty all amounts payable by the related borrower under the related note and executes an indemnity deed of trust in favor of the lender to secure such guaranty. In such instances, references to obligations and responsibilities of the “borrower” in this prospectus supplement, may apply to such property owner instead. Although such indemnity deeds of trust executed prior to July 1, 2012 may have been exempt from mortgage recording tax under Maryland law, due to changes under Maryland law, indemnity deeds of trust executed on or after July 1, 2012 are not exempt from mortgage recording tax and the related property owners were required to pay all applicable Maryland recording tax at the time such mortgage loan was originated. In certain cases, the property owners in those loans may choose to use the indemnity deed of trust structure to maintain their ability to attempt to take advantage of mortgage recording tax savings in the event Maryland mortgage recording tax law is revised to reinstitute the exemption.
Tenancies in Common May Hinder Recovery
Six (6) mortgage loans, representing approximately 14.6% of the outstanding pool balance as of the cut-off date, 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
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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 prospectus supplement.
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.”
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 controlling or 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 1.00x. 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
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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 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 on behalf of the issuing entity with respect to the related borrower.
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 related borrower’s mortgaged property after the payment of debt service and after payments on the preferred equity, (iii) potentially increasing the likelihood that the related borrower will permit the value or income producing potential of a mortgaged property to fall and (iv) potentially increasing the risk that a related borrower will default on the mortgage loan.
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 |
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· | 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 on behalf of the issuing entity 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 on behalf of the issuing entity 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 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. 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 prospectus supplement as 11 Madison Avenue, which secures a mortgage loan representing approximately 7.2% 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. In addition, in the case of the mortgage loan secured by the mortgaged property identified on Annex A-1 to this prospectus supplement as Carrollwood Station, representing approximately 2.2% of the outstanding pool balance as of the cut-off date, the borrower is planning to perform $1.55 million of renovations at the mortgaged property. With respect to $900,000 of such expenses, the borrower and guarantor provided a lien-free completion guaranty in such amount in lieu of providing cash reserves. For additional information, see “Risk Factors—Risks Related to Construction, Development, Redevelopment, Renovation and Repairs at Mortgaged Properties” in this prospectus supplement. A loan sponsor on a guaranty may be a guarantor of obligations other than related to the
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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 required to or willing or financially able to satisfy guaranteed obligations. See “—Risks Related to Litigation and Condemnation” below. In addition, certain mortgage loans do not have a non-recourse carveout guarantor. For example:
· | In the case of the mortgaged property identified on Annex A-1 to this prospectus supplement as 32 Avenue of the Americas, which secures a mortgage loan representing approximately 7.3% of the outstanding pool balance as of the cut-off date, there is neither a non-recourse carveout guarantor nor an environmental indemnitor other than the related borrower. |
As indicated under “—Potential Issuing Entity Liability Related to a Materially Adverse Environmental Condition”, certain mortgage loans may permit the related borrower to provide an environmental insurance policy in lieu of an environmental indemnity.
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.
For example, in the case of the portfolio of mortgaged properties identified on Annex A-1 to this prospectus supplement as Equity Inns Portfolio, which secure a mortgage loan representing approximately 8.3% of the outstanding pool balance as of the cut-off date, a preferred equity interest has been issued in an upper-tier owner of the borrowers. If the preferred equity owner exercises its right to effectuate a change in control of the borrowers, it will be required to provide a replacement guarantor as non-recourse carve-out guarantor and environmental indemnitor, and the existing non-recourse carve-out guarantor and environmental indemnitor will not be liable with respect to events arising from and after such change in control. The liability of any such replacement guarantor under its non-recourse carveout guaranty for voluntary or collusive bankruptcy and similar events will be capped at an amount equal to the original principal balance of the mortgage loan plus accrued and unpaid interest times 0.20.
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; |
· | managing operating expenses; and |
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· | 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 “Risk Factors—Risks Related to Conflicts of Interest—Conflicts Between Property Managers and the Borrowers” in this prospectus supplement.
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 prospectus supplement. 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 prospectus supplement.
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; |
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· | 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. |
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 Pooling and Servicing Agreement—The Operating Advisor” in this prospectus supplement, 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.
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 of the related borrower or tenant or its affiliates (including certain properties in close proximity to the mortgaged properties). 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 tenant may maintain one or more forms of insurance under blanket policies. For example, with respect to 89 mortgaged properties, which secure mortgage loans which collectively represent approximately 73.8% of the outstanding pool balance as of the cut-off date
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(by allocated loan amount), certain insurance for the related mortgaged property (or, if applicable, some or all of the related mortgaged properties) is under the related insured’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.
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 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”).
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 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
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Terrorism Insurance Program or any successor program will create any long term changes in the availability and cost of such insurance. Moreover, future legislation, including regulations expected to be adopted by the Treasury Department pursuant to TRIPRA, may have a material effect on the availability of federal assistance in the terrorism insurance market. To the extent that uninsured or underinsured casualty losses occur with respect to the related mortgaged properties, losses on the mortgage loans may result. In addition, the failure to maintain such terrorism insurance may constitute a default under the related mortgage loan.
Some of the mortgage loans do not require the related borrower to maintain terrorism insurance. In addition, most of the mortgage loans contain limitations on the related borrower’s obligation to obtain terrorism insurance, such as (i) waiving the requirement that such borrower maintain terrorism insurance if such insurance is not available at commercially reasonable rates, (ii) providing that the related borrower is not required to spend in excess of a specified dollar amount (or in some cases, a specified multiple of what is spent on other insurance) in order to obtain such terrorism insurance, (iii) requiring coverage only for as long as the TRIPRA is in effect, or (iv) requiring coverage only for losses arising from domestic acts of terrorism or from terrorist acts certified by the federal government as “acts of terrorism” under the TRIPRA. See “Annex B—Description of the Top 20 Mortgage Loans” to this prospectus supplement for a summary of the terrorism insurance requirements under each of the 10 largest mortgage loans.
We cannot assure you that all of the mortgaged properties will be insured against the risks of terrorism and similar acts. As a result of any of the foregoing, the amount available to make distributions on your certificates could be reduced.
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, (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 prospectus supplement.
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 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.
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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 prospectus supplement) 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 prospectus supplement. 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 prospectus supplement for illustrative purposes only. See “Description of the Mortgage Pool—Additional Mortgage Loan Information” in this prospectus supplement.
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,
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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.
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 certain of the top 20 mortgage loans:
· | With respect to the mortgaged property identified on Annex A-1 to this prospectus supplement as 11 Madison Avenue, which secures a mortgage loan representing approximately 7.2% 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 prospectus supplement. 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 |
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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. |
· | With respect to the mortgaged property identified on Annex A-1 to this prospectus supplement as 1209 DeKalb, which secures a mortgage loan representing approximately 4.8% of the outstanding pool balance as of the cut-off date, such mortgaged property benefits from a 421-A tax abatement, which provides an exemption from real estate taxes on the amount of the assessed value of newly constructed improvements. The mortgaged property is in the 4th year of the 15-year program. Taxes with respect to the improvements are fully exempt during the first 11 years of the program, and the tax abatement will decline by 20% each year thereafter. |
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.
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
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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
Five (5) mortgage loans, representing approximately 14.6% of the outstanding pool balance as of the cut-off date, are secured by more than one mortgaged property and/or are cross-collateralized and cross-defaulted with another mortgage loan in the pool. 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 or a cross-collateralized group of mortgage loans. 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 |
· | 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
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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.
Mortgage Loans Secured by Leasehold Interests May Expose Investors to Greater Risks of Default and Loss
Two (2) mortgaged properties, representing approximately 7.8% of the outstanding pool balance as of the cut-off date (by allocated loan amount), 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.
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
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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 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. |
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 prospectus supplement as 11 Madison Avenue, which secures a mortgage loan representing approximately 7.2% 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. |
· | With respect to the mortgaged property identified on Annex A-1 to this prospectus supplement as 40 Wall Street which secures a mortgage loan representing approximately 0.5% of the outstanding pool balance as of the cut-off date, the mortgaged property is subject to a ground lease with two entities as ground lessor. The ground lease expires on April 30, 2059 and has two consecutive renewal options. The first renewal option has a 67.5 year term expiring October 31, |
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2126, and the second renewal option has an 80-year and two-month term expiring December 31, 2206. The current annual ground rent payment is $1,650,000 through December 31, 2017. Effective January 1, 2018 the annual ground rent payment is $1,815,000 through December 31, 2019. Effective January 1, 2020 the annual ground rent payment is $2,315,000 through December 31, 2022. Effective January 1, 2023 the annual ground rent payment is $2,546,500 through December 31, 2027. Effective January 1, 2028 the annual ground rent payment is $2,801,150 through December 31, 2032. On January 1, 2033, the ground rent will reset to the greater of (a) 6.0% of the value of the land (considered as vacant and unimproved, but with the right to construct a 900,000 sq. ft. building for (i) office purposes and (ii) retail (A) where legally permissible on the ground floor and (B) elsewhere in the building where it existed at any time during the 5 year period prior to the applicable date of valuation, and otherwise free and clear of all liens and encumbrances) or (b) 85.0% of the net rent payable in the immediately preceding 12-month period. The average annual ground lease rent payable over the loan term is $2,114,096. |
In addition, at the request of one of the ground lessors, which is entitled to a 20% share of ground rents, the related borrower has refrained since January 5, 2015 from making the periodic ground rent payment owed to that ground lessor and is expected to continue to so refrain until instructed to resume making such payments. There can be no assurance as to when the borrower will again be requested to make ground rent payments, including such deferred payments, to the above-referenced ground lessor, or that when the borrower is again requested to make these payments that the borrower will be required to do so in one lump sum payment or in a number or payments. The borrower’s sponsor has provided a guaranty with respect to ground rent payments.
· | In addition, in the case of the mortgaged property identified on Annex A-1 to this prospectus supplement as 40 Wall Street, which secures a mortgage loan representing approximately 0.5% of the outstanding pool balance as of the cut-off date, the related lender has an assignment of the subleases and subrents under the related ground lease, which is subject to a prior assignment of such subleases and subrents to the ground lessor. The prior assignment to the ground lessor only becomes effective upon an event of default under the ground lease and is expressly subject to the related lender’s exercise of its cure rights under the ground lease. |
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.
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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 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 zoning violations 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.
For example, with respect to the top 10 mortgage loans:
· | In the case of the mortgaged property identified on Annex A-1 to this prospectus supplement as Beach House Hilton Head, representing approximately 4.2% of the outstanding pool balance as of the cut-off date, such mortgaged property is legal non-conforming as to improvements, including as to density (maximum conforming density would be 161 hotel rooms, while the mortgaged property currently has 202 hotel rooms), height, buffer and setback requirements. If the structures at the mortgaged property are damaged or destroyed to the extent of 50% or more of its appraised fair market value, the mortgaged property would be required to be reconstructed to current zoning and building code requirements. Law and ordinance coverage has been obtained. |
· | In the case of the portfolio of mortgaged properties identified on Annex A-1 to this prospectus supplement as Harvey Building Products Portfolio, which secure a mortgage loan representing approximately 4.4% of the outstanding pool balance as of the cut-off date, the Bethlehem mortgaged property is legal, non-conforming as to use. Following a casualty or condemnation, the Bethlehem mortgaged property may be rebuilt if the exterior structure is properly secured following the damage or destruction and reconstruction begins within 12 months of the date of such damage or destruction. In addition, the Norwalk mortgaged property is legal, non-conforming as to use. If 50% or more of the Norwalk mortgaged property is destroyed, such Mortgaged Property could only be rebuilt with a special use permit. |
In certain cases, zoning protection insurance may have been obtained to protect against loss resulting from certain changes in zoning laws. Zoning protection 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
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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 or, in the case of those mortgaged properties that are condominiums, condominium declarations or other condominium use restrictions or regulations especially in a situation where the mortgaged property does not represent the entire condominium building. Such use restrictions may 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. In addition, certain mortgaged properties may be subject to restrictions based on past environmental concerns at the mortgaged property.
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 prospectus supplement.
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.
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.
We are aware of the following loan sponsors and/or non-recourse carveout guarantors that have been, or that have had interests in entities that were, a party to bankruptcy proceedings in the past 10 years:
· | With respect to the mortgage loan secured by the mortgaged property identified on Annex A-1 to this prospectus supplement as 40 Wall Street, representing approximately 0.5% of the outstanding pool balance as of the cut-off date, the sponsor of the related borrower, Donald J. |
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Trump, held an interest in, or was otherwise involved with, Trump Hotels & Casino Resorts, Inc. and certain of its subsidiaries when, in November 2004, such entities filed voluntary petitions for a pre-arranged plan of reorganization. In February 2009, Trump Entertainment Resorts Inc. (f/k/a Trump Hotels & Casino Resorts, Inc.) filed voluntary petitions seeking relief in the U.S. bankruptcy court. However, Mr. Trump has informed the related lender that he no longer held an interest in that entity at such time. Mr. Trump is also subject to current litigation brought by multiple plaintiffs in New York and California who allege that Mr. Trump operated an unlicensed, illegal educational institution purporting to teach real estate strategies and techniques. The educational institution has ceased conducting business. |
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 10 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. 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.
In addition, with respect to the top 20 mortgage loans, we are aware of the following borrowers, loan sponsors, guarantors, property managers or affiliates thereof that were recently involved in other material legal proceedings:
· | With respect to the mortgaged properties identified on Annex A-1 to this prospectus supplement as Equity Inns Portfolio, which secure a mortgage loan representing approximately 8.3% of the outstanding pool balance as of the cut-off date, the non-recourse carve-out guarantor is American Realty Capital Hospitality Trust, Inc. Both the sponsor of the guarantor and the external advisor to the guarantor are 100% owned and controlled by AR Capital, LLC (“AR Capital”). The key principals and controlling parties of AR Capital are Nicholas S. Schorsch and William M. Kahane. Mr. Schorsch and certain family members are the majority owners of AR Capital. Mr. Schorsch previously served as the chairman of the board of directors of the guarantor. Mr. Kahane is currently the executive chairman of the board of directors of the guarantor. |
The mortgaged properties included in the Equity Inns Portfolio are subject to operating management agreements with wholly-owned subsidiaries of AR Capital (the “Operators”) pursuant to which the Operators are responsible for the management of the mortgaged properties. The Operators subcontract such management responsibilities under management agreements with four managers, one of which is Crestline Hotels & Resorts, which is 60% owned by AR Capital, and manages twelve of the 21 mortgaged properties. AR Capital also owns a less than 3.0% interest in each borrower.
AR Capital is the direct owner of 100% of the sponsor of American Realty Capital Hospitality Trust, Inc. and the indirect owner of 100% of the external manager of American Realty Capital Hospitality Trust, Inc. AR Capital or companies owned and controlled by AR Capital also previously externally managed American Realty Capital Properties Inc. (“ARCP”) until January 2014, when the company became self-managed. On October 29, 2014, ARCP, a real estate investment trust sponsored by AR Capital, and of which Mr. Schorsch was then the chairman, issued a press release announcing that, based on preliminary findings of ARCP’s audit committee, such committee concluded that previously issued financial statements and other financial information contained in ARCP’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and Quarterly Reports on Form 10-Q for the fiscal periods ended March 31, 2014 and June 30, 2014, and ARCP’s earnings releases and other financial communications for those periods should no longer be relied upon. The audit committee stated that it believed that ARCP incorrectly included certain amounts related to its non-controlling interests in the calculation of adjusted funds from operations (“AFFO”), a non-U.S. GAAP financial measure, and, as a result, overstated AFFO for certain periods. According to the press release, the audit committee believed that this error was identified but intentionally not corrected by the responsible
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individuals at ARCP, and other AFFO and financial statement errors were intentionally made, resulting in an overstatement of AFFO and an understatement of ARCP’s net loss for the three and six months ended June 30, 2014. As a result of these accounting irregularities, the chief financial officer and chief accounting officer resigned from ARCP. In addition, Mr. Schorsch resigned as chairman of ARCP in October 2014, and also resigned from the boards of certain other companies sponsored by AR Capital, including the guarantor.
On March 2, 2015, ARCP (which has changed its name to VEREIT, Inc.) filed amended financial statements. For year-end 2013, the net loss was increased and AFFO decreased by $0.20 per share. As part of the restatement, the audit committee identified certain payments made to ARC Properties Advisors, LLC and certain affiliates that were not appropriately documented totaling $8.5 million. Additionally, the investigation found that equity awards made to Mr. Schorsch and another former executive in connection with the transition to self-management of the company contained provisions that, as drafted, were more favorable than those approved by the Compensation Committee of the company’s Board of Directors, and also identified certain material weaknesses in the company’s internal controls over financial reporting and its disclosure controls.
ARCP has also disclosed that it is the subject of various regulatory investigations, including by the Securities and Exchange Commission and the U.S. Attorney’s office for the Southern District of New York. It has further been reported that ARCP is the subject of an investigation by the Federal Bureau of Investigation.
Between October 30, 2014 and January 20, 2015, ARCP, AR Capital, Mr. Schorsch, Mr. Kahane and certain other former officers and current and former directors of ARCP were named as defendants in ten securities class action complaints filed in the United States District Court for the Southern District of New York, which were subsequently consolidated under the captionIn re American Realty Capital Properties, Inc. Litigation, No. 15-MC-00040 (AKH), which alleged various violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 in connection with the purchase or sale of ARCP’s securities. The complaint also included allegations of payment of inappropriate fees by ARCP to companies controlled by Mr. Schorsch. ARCP, AR Capital, their affiliates, as well as Mr. Schorsch and Mr. Kahane, have also been named in various other lawsuits related to regulatory findings and otherwise, including class actions, derivative actions and securities fraud actions. On October 27, 2015 an additional securities fraud action was filed by The Vanguard Funds against ARCP, AR Capital, and Mr. Schorsch, among other persons and entities.
In August 2015, AMH Holdings (Cayman), L.P., an affiliate of Apollo Global Management, LLC, entered into a transaction agreement with AR Capital pursuant to which the parties agreed, subject to satisfaction of certain conditions, that AMH Holdings (Cayman), L.P. would acquire a 60% stake in a new company called AR Global Investments, LLC, the remaining 40% of which would be owned by AR Capital, to which AR Capital would transfer substantially all of its ongoing asset management business. However, on November 9, 2015, Apollo Global Management, LLC and AR Capital announced that they have mutually agreed to terminate the planned transaction.
In addition, on November 12, 2015, Realty Capital Securities, LLC (“RCS”) was charged by the Secretary of the Commonwealth of Massachusetts with fraudulent casting of shareholder proxy votes on investment programs sponsored by American Realty Capital. The complaint seeks to revoke RCS’s broker-dealer registration in Massachusetts and calls for a permanent cease and desist order and an administrative fine.
RCS is an entity under common control with AR Capital, LLC, the direct owner of 100% of the sponsor of American Realty Capital Hospitality Trust, Inc. and the indirect owner of 100% of the external manager of American Realty Capital Hospitality Trust, Inc. American Realty Capital Hospitality Trust, Inc. is the sponsor and guarantor of the related borrowers. RCS is a broker dealer that acts as dealer manager for American Realty Capital Hospitality Trust, Inc. and as such
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RCS may facilitate American Realty Capital Hospitality Trust, Inc.’s access to future equity investments.
We cannot assure you that the charges against RCS, or any additional charges that may be brought against RCS or any of its affiliates or other companies in the American Realty Capital family, or any principals, officers, directors or employees of the foregoing, will not have a material adverse effect on (1) RCS’s ability to support American Realty Capital Hospitality Trust, Inc.’s access to any future equity investments; (2) the related borrowers’ ability to satisfy their obligations under the related mortgage loan documents, including the payment of required deposits into the property improvement plan (PIP) reserve account and their obligations to complete the PIPs under the related franchise agreements, or (3) the related borrowers’ ability to satisfy required payments to the Equity Inns PE Member under the preferred equity documents. Any such failure to raise capital may result in, among other things: (A) a default under the mortgage loan documents and/or related franchise agreements, or (B) a breach under their preferred equity agreement, which could result in a change of control of the related borrowers. In addition, if RCS is found guilty of the charges, even if all required disbursements were made to the Equity Inns PE Member, we cannot assure you that a change of control event would not occur.
On November 16, 2015, AR Capital, LLC announced it will suspend the acceptance of new subscriptions to certain of its current investment programs, including American Realty Capital Hospitality Trust, Inc., effective December 31, 2015 as a result of regulatory and market uncertainty affecting capital raising for both new and existing offerings in the direct investment industry. We cannot assure you that AR Capital, LLC will re-enter this market in the future. This may have the effect of further exacerbating the risks described in the immediately preceding paragraph. In addition, AR Capital, LLC also announced that it has, effective immediately, directed RCS to discontinue all proxy activities on behalf of all AR Capital LLC sponsored companies, in light of the action taken by the State of Massachusetts described above.
There can be no assurances as to the outcome of any of the litigation, or the possible impact of these litigations on the guarantor or the borrowers. There also can be no assurances that similar litigations will not be brought against the guarantor or any other of the borrowers’ affiliates.
In addition, in some cases, mortgaged properties securing certain of the mortgage loans previously secured other loans that were either in default at the time the related mortgage loan refinanced such defaulted loan or were restructured in connection with the refinancing of that prior loan with the related mortgage loan or the related mortgage loan was originated in connection with a discounted payoff, foreclosure or deed-in-lieu of foreclosure. For example:
· | With respect to the mortgaged property identified on Annex A-1 to this prospectus supplement as Murrieta Spectrum, which secures a mortgage loan representing approximately 2.1% of the outstanding pool balance as of the cut-off date, the mortgaged property was previously financed as part of a $38,900,000 loan that was securitized in 2006 in the GSMS 2006-GC6 transaction. In 2009, the prior loan was moved to special servicing. In 2010, the loan was modified, splitting the loan into a $17,400,000 A-Note and a $21,500,000 B-Note. The Mortgage Loan paid off the A-Note in full and only paid off $2,915,679 of the B-Note balance. |
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
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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.
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 noncompliance could negatively impact the borrower’s cash flow and, consequently, its ability to pay its mortgage loan.
There May Be Changes in the Tax Laws of the United State Virgin Islands; No Gross-Up
The mortgage loan secured by the mortgaged property identified on Annex A-1 to thisprospectus supplement as Courtyard Self Storage, representing approximately 0.3% of the outstanding pool balance as of the cut-off date, is secured by a property located in the United States Virgin Islands (“USVI”) and is an obligation of a borrower organized in the USVI. USVI law currently provides an exemption from USVI withholding tax for USVI-source interest payments on loans secured by a property or properties located in the USVI. We cannot assure you that this exemption will not change in the future or that USVI law will not otherwise change, and this mortgage loan does not provide for any gross-up in the event of the imposition of any such withholding tax. As a result, if the exemption is changed or any additional tax is imposed, it may result in a shortfall with respect to this mortgage loan. In addition, in the event that the issuing entity acquires the mortgaged property securing such mortgage loan, the issuing entity may be treated as engaged in a trade or business in the USVI and may be subject to tax on net income or gains with respect to that net income.
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 thisprospectus supplement.
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.
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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, servicing shift mortgage loans and excluded mortgage loans) and serviced loan combinations (other than servicing shift loan combinations) for so long as a Control Termination Event is not continuing, LNR Partners, LLC may be removed without cause by the directing holder if either (i) LNR Partners, LLC or its affiliate is no longer the special servicer, or (ii) LNR Securities Holdings, LLC or its affiliate owns less than 15% of the certificate balance of the then controlling class of certificates, 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 the direction of the holders of certificates (other than the Class XP-A, Class XS-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 XP-A, Class XS-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 XP-A, Class XS-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 thisprospectus supplement. With respect to servicing shift mortgage loans, see “Description of the Mortgage Pool—Loan Combinations—32 Avenue of the Americas Loan Combination” in thisprospectus supplement for a discussion of the right of the directing holder of the related servicing shift loan combination to replace the special servicer with respect to such servicing shift loan combination. It is expected that LNR Securities Holdings, LLC, an affiliate of the special servicer, will purchase an approximately 60.0% interest in the Class X-D, Class X-E, Class X-F, Class F, Class G, Class H, Class J and Class V Certificates and will be the initial directing holder with respect to each mortgage loan (other than non-serviced mortgage loans, servicing shift mortgage loans and excluded mortgage loans) or serviced loan combination (other than servicing shift loan combinations). In addition, Seer Capital Partners Master Fund L.P., or its affiliate, is expected to purchase, on the closing date, an approximately 40.0% interest in the Class X-D, Class X-E, Class X-F, Class F, Class G, Class H, Class J and Class V certificates.
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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 with respect to each mortgage loan (other than non-serviced mortgage loans and servicing shift mortgage loans) and serviced loan combinations (other than servicing shift loan combinations), during the continuance of a Control Termination Event as described under “The Pooling and Servicing Agreement—The Operating Advisor” in thisprospectus supplement, 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 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.
The Servicing of Servicing Shift Loan Combinations Will Shift to Others
It is expected that the servicing of the 32 Avenue of the Americas loan combination, a servicing shift loan combination, will be governed by the pooling and servicing agreement only temporarily until the applicable servicing shift securitization date. After the applicable servicing shift securitization date, it is expected that servicing responsibilities for the related servicing shift loan combination will shift to the master servicer and the special servicer under the related servicing shift pooling and servicing agreement and will be governed exclusively by such servicing shift pooling and servicing agreement and the related intercreditor agreement. Neither the applicable servicing shift securitization date nor the identity of the servicing shift master servicer or the servicing shift special servicer have been determined. In addition,
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the provisions of the related servicing shift pooling and servicing agreement have not been determined, although they will be required pursuant to the related intercreditor agreement to satisfy certain requirements described under “Description of the Mortgage Pool—Loan Combinations—32 Avenue of the AmericasLoan Combination”, in thisprospectus supplement. Prospective investors should be aware that they will not have any control over the identity of the servicing shift master servicer or the servicing shift special servicer, nor will they have any assurance as to the terms of such servicing shift pooling and servicing agreement except to the extent of compliance with the requirements referred to in the previous sentence.
If either a servicing shift mortgage loan or related controlling companion loan becomes specially serviced prior to the applicable servicing shift securitization date, the special servicer will be required to service and administer the related servicing shift loan combination and any related REO property pursuant to the pooling and servicing agreement and will be entitled to all rights and compensation earned with respect to such servicing shift loan combination as set forth under the pooling and servicing agreement. Prior to the applicable servicing shift securitization date, no other special servicer will be entitled to any such compensation or have such rights and obligations. If a servicing shift loan combination is being specially serviced when the servicing shift securitization date occurs, the special servicer will be entitled to compensation for the period during which it acted as the special servicer, as well as all surviving indemnity and other rights in respect of such special servicing role.
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 thisprospectus supplement. With respect to each mortgage loan (other than non-serviced mortgage loans and servicing shift mortgage loans) and serviced loan combination (other than servicing shift loan combinations), 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 non-serviced mortgage loans and servicing shift mortgage loans) and serviced loan combination (other than servicing shift loan combinations), 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 thisprospectus supplement.
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 CMBS 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
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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.
Each of the foregoing relationships should be considered carefully by prospective investors.
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.
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., an underwriter, is an affiliate of Cantor Commercial Real Estate Lending, L.P., a mortgage loan seller and a sponsor, and Berkeley Point Capital
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LLC, a primary servicer. Jefferies LLC, an underwriter, is an affiliate of Jefferies LoanCore LLC, a mortgage loan seller and a sponsor.
See “Summary—Relevant Parties and Dates—Affiliates and Other Relationships” and “Certain Relationships and Related Transactions” in thisprospectus supplement and “Method of Distribution (Underwriter Conflicts of Interest)”in this 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
The B-Piece Buyer 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 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.
LNR Securities Holdings, LLC, a B-Piece Buyer and an affiliate of the special servicer, or its designee will constitute the initial directing holder with respect to each mortgage loan (other than non-serviced mortgage loans, servicing shift mortgage loans and excluded mortgage loans) and serviced loan combinations (other than servicing shift 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 thisprospectus supplement.
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 thisprospectus supplement 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
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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, in the case of each mortgage loan (other than non-serviced mortgage loans, servicing shift mortgage loans and excluded mortgage loans) and serviced loan combinations (other than servicing shift loan combinations), generally has certain rights to remove the special servicer and appoint a successor, which may be an affiliate of such holder (but see “Description of the Mortgage Pool—Loan Combinations” in thisprospectus supplement for a discussion regarding the removal of the special servicer with respect to non-serviced mortgage loans and servicing shift mortgage loans that are part of loan combinations, excluded mortgage loans and excluded special servicer mortgage loans) (a) for cause at any time, and (b) without cause if either (i) LNR Partners, LLC or its affiliate is no longer the special servicer, or (ii) LNR Securities Holdings, LLC or its affiliate owns less than 15% of the certificate balance of the then controlling class of certificates, 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 thisprospectus supplement.
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 thisprospectus supplement. 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 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 thisprospectus supplement or any particular class of certificates that are subordinate to the certificates offered in thisprospectus supplement.
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
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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. For example, Ladder Capital Finance LLC is affiliated with the borrowers under the mortgage loans secured by the mortgaged properties identified on Annex A-1 to thisprospectus supplement as Family Dollar – Rose Hill, Family Dollar – Moultrie, Family Dollar – Biscoe, Family Dollar – Rockingham and Dollar General - De Soto, collectively representing approximately 0.4% of the outstanding pool balance as of the cut-off date. Ladder Capital Finance LLC or an affiliate thereof originated each of those mortgage loans, and Ladder Capital Finance LLC is the mortgage loan seller with respect to those mortgage loans. Those mortgage loans may contain provisions and terms that are more favorable to the respective borrowers thereunder than would otherwise have been the case if the lender and borrower were not affiliated, including: (i) the related loan documents permit transfers without lender’s consent by the related borrower and by or to certain affiliates of Ladder Capital Finance Holdings LLLP; (ii) the related loan documents permit future mezzanine financing; and (iii) there is no environmental indemnitor separate from the related borrower.
Ladder Capital Finance LLC or one of its affiliates may purchase certain certificates offered by thisprospectus supplement and/or certain non-offered certificates of the same series.
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.
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.
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Conflicts Between Certificateholders and Holders of Companion Loans
With respect to the Equity Inns Portfolio mortgage loan, representing approximately 8.3% of the outstanding pool balance as of the cut-off date, the related mortgaged properties also secure seven additionalpari passu companion loans. Ladder Capital Finance LLC is expected to hold as of the closing date the related companion loans designated as Note A-1-B, Note A-2-A, Note A-2-B and Note A-3 and German American Capital Corporation is expected to hold as of the closing date the related companion loans designated as Note A-4-B, Note A-5 and Note A-6. See“Description of the Mortgage Pool—Loan Combinations—Equity Inns Portfolio Loan Combination” in thisprospectus supplement.
With respect to the 32 Avenue of the Americas mortgage loan, representing approximately 7.3% of the outstanding pool balance as of the cut-off date, the related mortgaged property also secures four additionalpari passu companion loans. German American Capital Corporation is expected to hold as of the closing date the related companion loan designated as Note A-5. See“Description of the Mortgage Pool—Loan Combinations—32 Avenue of the Americas Loan Combination” in thisprospectus supplement.
With respect to the 11 Madison Avenue mortgage loan, representing approximately 7.2% 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 similar but not 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—11 Madison Avenue Loan Combination” and“The Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans” in thisprospectus supplement.
With respect to the Harvey Building Products Portfolio mortgage loan, representing approximately 4.4% of the outstanding pool balance as of the cut-off date, the related mortgaged properties also secures three additionalpari passu companion loans. Ladder Capital Finance LLC is expected to hold as of the closing date the related companion loans designated as Note A-2A, Note A-2B and Note A-3. See“Description of the Mortgage Pool—Loan Combinations—Harvey Building Products Portfolio Loan Combination” in thisprospectus supplement.
With respect to the Springfield Mall mortgage loan, representing approximately 3.4% of the outstanding pool balance as of the cut-off date, the related mortgaged property also secures one additionalpari passu companion loan. Cantor Commercial Real Estate Lending, L.P. is expected to hold as of the closing date the related companion loan designated as Note A-2. See“Description of the Mortgage Pool—Loan Combinations—Springfield Mall Loan Combination” in thisprospectus supplement.
With respect to the 40 Wall Street mortgage loan, representing approximately 0.5% of the outstanding pool balance as of the cut-off date, the related mortgaged property also secures three additionalpari passu companion loans. The 40 Wall Street mortgage loan and its relatedpari passu companion loans are being serviced pursuant to the WFCM 2015-LC22 pooling and servicing agreement. The WFCM 2015-LC22 pooling and servicing agreement provides for a servicing arrangement that is similar but not identical to that under the pooling and servicing agreement for this transaction. Certain decisions to be made with respect to the 40 Wall Street mortgage loan will require the approval of the related controlling class representative or such other party specified in the related intercreditor agreement or the WFCM 2015-LC22 pooling and servicing agreement. As a result, you will have less control over the servicing of the 40 Wall Street 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
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servicing agreement for this transaction. See “Description of the Mortgage Pool—Loan Combinations—40 Wall StreetLoan Combination” and“The Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans” in thisprospectus supplement.
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 (including the controlling class representative), 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 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. Pursuant to the terms of the pooling and servicing agreement, prior to the occurrence of a control termination event, the special servicer may be removed with respect to each mortgage loan (other than non-serviced mortgage loans, servicing shift mortgage loans and excluded mortgage loans) and serviced loan combinations (other than servicing shift loan combinations) by the directing holder (a) for cause at any time, and (b) without cause if either (i) LNR Partners, LLC or its affiliate is no longer the special servicer, or (ii) LNR Securities Holdings, LLC or its affiliate owns less than 15% of the certificate balance of the then controlling class of certificates.
German American Capital Corporation, a sponsor and a mortgage loan seller, Deutsche Mortgage & Asset Receiving Corporation, the depositor, and Deutsche Bank Securities Inc., an underwriter, are affiliates of each other.
Cantor Commercial Real Estate Lending, L.P., a sponsor and a mortgage loan seller, Cantor Fitzgerald & Co., an underwriter, and Berkeley Point Capital LLC, a primary servicer, are affiliates of each other.
Jefferies LoanCore LLC, a sponsor and a mortgage loan seller, and Jefferies LLC, an underwriter, are affiliates of each other.
Deutsche Bank AG, Cayman Islands Branch (an affiliate of Deutsche Mortgage & Asset Receiving Corporation, the depositor, German American Capital Corporation, a sponsor and a mortgage loan seller, and Deutsche Bank Securities Inc., an underwriter), Wells Fargo Bank, National Association and certain other third party lenders provide warehouse financing to certain affiliates of Ladder Capital Finance LLC through various repurchase facilities. Ladder Capital Finance Holdings LLLP, Series TRS of Ladder Capital Finance Holdings LLLP and Series REIT of Ladder Capital Finance Holdings LLLP guarantee certain obligations under those repurchase facilities of the Ladder Capital Finance LLC affiliates that are the primary obligors thereunder. Some or all of the mortgage loans that Ladder Capital Finance LLC will transfer to the depositor are (or are expected to be prior to the closing date for this securitization) subject to those repurchase facilities. Proceeds received by Ladder Capital Finance LLC in connection with the contribution of mortgage loans to this securitization transaction will be applied, among other things, to reacquire the financed mortgage loans and make payments to the repurchase agreement counterparties. As of November 10, 2015, Deutsche Bank AG, Cayman Islands Branch was the repurchase agreement counterparty with respect to 3 of the mortgage loans that Ladder Capital Finance LLC will transfer to the depositor (including the Equity Inns Portfolio mortgage loan which was co-originated by Ladder Capital Finance LLC and German American Capital Corporation), representing approximately 15.4% of the outstanding pool balance as of the cut-off date, and Wells Fargo Bank, National Association was the repurchase agreement counterparty with respect to 3 of the mortgage loans that Ladder Capital Finance LLC will transfer to the depositor, representing approximately 3.7% of the outstanding pool balance as of
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the cut-off date (except that the number and dollar amount of mortgage loans subject to those repurchase facilities may increase or decrease prior to the issuance of the certificates).
Deutsche Bank AG, Cayman Islands Branch and certain other third party lenders provide warehouse financing to certain affiliates of Jefferies LoanCore LLC through various repurchase facilities. Some or all of the mortgage loans that Jefferies LoanCore LLC will transfer to the depositor are (or are expected to be prior to the closing date) subject to those repurchase facilities. Proceeds received by Jefferies LoanCore LLC in connection with the contribution of mortgage loans to this securitization transaction will be applied, among other things, to reacquire the financed mortgage loans and make payments to the repurchase agreement counterparties. As of October 22, 2015, Deutsche Bank AG, Cayman Islands Branch is the repurchase agreement counterparty with respect to 1 of the mortgage loans that Jefferies LoanCore LLC will transfer to the depositor, representing approximately 2.2% of the outstanding pool balance as of the cut-off date (except that the number and dollar amount of mortgage loans subject to that repurchase facility may increase or decrease prior to the issuance of the certificates).
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, 4 of the mortgage loans to be contributed to this securitization by German American Capital Corporation, representing approximately 5.0% of the outstanding pool balance as of the cut-off date, as well as the Equity Inns Portfolio mortgage loan, representing 8.3% of the outstanding pool balance as of the cut-off date, which was co-originated by Ladder Capital Finance LLC and German American Capital Corporation.
Pursuant to certain interim servicing agreements between Ladder Capital Finance LLC and/or 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 of the mortgage loans owned from time to time by Ladder Capital Finance LLC and those affiliates thereof, including, prior to their inclusion in the issuing entity, all of the mortgage loans to be contributed to this securitization by Ladder Capital Finance LLC, representing approximately 25.6% of the outstanding pool balance as of the cut-off date, as well as the Equity Inns Portfolio mortgage loan, representing 8.3% of the outstanding pool balance as of the cut-off date, which was co-originated by Ladder Capital Finance LLC and German American Capital Corporation, provided that in the case of the 40 Wall Street mortgage loan, it has been doing so as a sub-servicer. Wells Fargo Bank, National Association also acts as interim custodian of the loan files (or, in the case of each of the Harvey Building Products Portfolio mortgage loan and the 40 Wall Street mortgage loan, just the related promissory note) for all of the mortgage loans that Ladder Capital Finance LLC will transfer to the depositor.
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 of the mortgage loans, including, prior to their inclusion in the issuing entity, 9 of the mortgage loans to be contributed to this securitization by Cantor Commercial Real Estate Lending, L.P., representing approximately 12.2% of the outstanding pool balance as of the cut-off date, and interim custodian of the loan files for all of the mortgage loans (other than the mortgage loan secured by the mortgaged property identified on Annex A-1 to thisprospectus supplement as Colerain Center) that Cantor Commercial Real Estate Lending, L.P. will transfer to the depositor.
Pursuant to certain interim servicing agreements between Jefferies LoanCore LLC 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 of the mortgage loans owned from time to time by Jefferies LoanCore LLC and those affiliates thereof, including, prior to their inclusion in the issuing entity, all of the mortgage loans to be contributed to this securitization by Jefferies LoanCore LLC, representing approximately 11.8% of the outstanding pool balance as of the cut-off date. Wells Fargo Bank, National Association also acts as interim custodian of the loan files for all of the mortgage loans that Jefferies LoanCore LLC will transfer to the depositor.
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Pursuant to a limited subservicing agreement between Berkeley Point Capital LLC, on the one hand, and Wells Fargo 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 10 of the mortgage loans to be contributed to this securitization by Cantor Commercial Real Estate Lending, L.P., representing approximately 15.6% 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.
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 Wells Fargo Bank, National Association, on the other hand, Berkeley Point Capital LLC will act as primary servicer with respect to 1 mortgage loan representing approximately 0.9% 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 a fee equal to 0.0700%per annum for such mortgage loan.
LNR Partners, LLC, the special servicer, assisted LNR Securities Holdings, LLC or its affiliate with due diligence relating to the mortgage loans to be included in the mortgage pool.
LNR Partners, LLC, the special servicer, is an affiliate of LNR Securities Holdings, LLC, the entity expected to purchase an approximately 60.0% interest in each of the Class X-D, Class X-E, Class X-F, Class F, Class G, Class H, Class J and Class V certificates and appoint itself as the initial directing holder with respect to each mortgage loan (other than non-serviced mortgage loans, servicing shift mortgage loans and excluded mortgage loans) and serviced loan combinations (other than servicing shift loan combinations). LNR Securities Holdings, LLC and/or its affiliates, which may include LNR Partners, LLC, a special servicer, assisted entities managed by Seer Capital Partners Master Fund L.P. or one of its affiliates, which entities are expected to purchase an approximately 40.0% interest in each of the Class X-D, Class X-E, Class X-F, Class F, Class G, Class H, Class J and Class V certificates (and may purchase additional certificates), with due diligence relating to the mortgage loans included in the mortgage pool.
German American Capital Corporation is expected to hold, as of the closing date, (i) the Equity Inns Portfolio Note A-4-B, Note A-5 and Note A-6 companion loans, and (ii) the 32 Avenue of the Americas Note A-5 companion loan.
Ladder Capital Finance LLC is expected to hold, as of the closing date, (i) the Equity Inns Portfolio Note A-1-B, Note A-2-A, Note A-2-B and Note A-3 companion loans, and (ii) the Harvey Building Products Portfolio Note A-2A, Note A-2B and Note A-3 companion loans.
Cantor Commercial Real Estate Lending, L.P. is expected to hold, as of the closing date, the Springfield Mall Note A-2 companion loan.
Ladder Capital Finance LLC, a sponsor and a mortgage loan seller, is an indirect wholly-owned subsidiary of Ladder Capital Finance Holdings LLLP and an affiliate of Series TRS of Ladder Capital Finance Holdings LLLP and Series REIT of Ladder Capital Finance Holdings LLLP. Ladder Capital Finance Holdings LLLP, Series TRS of Ladder Capital Finance Holdings LLLP and Series REIT of Ladder Capital Finance Holdings LLLP will agree, pursuant to the related mortgage loan purchase agreement, to guarantee payment in connection with the performance of Ladder Capital Finance LLC’s obligations to repurchase or replace its respective mortgage loans for material breaches of representations and warranties or material loan document defects under the circumstances described under “The Sponsors, Mortgage Loan Sellers and Originators—Ladder Capital Finance LLC” in thisprospectus supplement.
Ladder Capital Finance LLC is affiliated with the borrowers under the mortgage loans secured by the mortgaged properties identified on Annex A-1 to thisprospectus supplement as Family Dollar – Rose Hill, Family Dollar – Moultrie, Family Dollar – Biscoe, Family Dollar – Rockingham and Dollar General – De Soto, collectively representing approximately 0.4% of the outstanding pool balance as of the cut-off date. Ladder Capital Finance LLC or an affiliate thereof originated each of those mortgage loans, and Ladder Capital Finance LLC is the mortgage loan seller with respect to those mortgage loans. Those mortgage
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loans may contain provisions and terms that are more favorable to the respective borrowers thereunder than would otherwise have been the case if the lender and borrower were not affiliated, including: (i) the related loan documents permit transfers without lender’s consent by the related borrower and by or to certain affiliates of Ladder Capital Holdings LLLP; (ii) the related loan documents permit future mezzanine financing; and (iii) in the case of the 5 mortgage loans secured by the mortgaged properties referred to above in this paragraph, there is no separate environmental indemnitor other than the related borrower.
Ladder Capital Finance LLC and/or its affiliates may acquire certificates, either in connection with the initial issuance or in the secondary market.
Wells Fargo Bank, National Association, which is acting as the master servicer, certificate administrator and custodian, is also a co-originator of the 11 Madison Avenue loan combination and the holder of the 11 Madison Avenue Note A-3-C2 companion loan, which is expected to be contributed to a future securitization. In addition, Wells Fargo Bank, National Association is currently the general master servicer, certificate administrator and custodian under the WFCM 2015-LC22 pooling and servicing agreement and the certificate administrator and custodian under the MAD 2015-11MD trust and servicing agreement.
Wilmington Trust, National Association, the trustee, is also (i) the MAD 2015-11MD trustee and, accordingly, the current mortgagee of record with respect to the 11 Madison Avenue loan combination under the MAD 2015-11MD trust and servicing agreement and (ii) the WFCM 2015-LC22 trustee and, accordingly, the current mortgagee of record with respect to the 40 Wall Street loan combination.
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 thisprospectus supplement.
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. |
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· | 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 thisprospectus supplement 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. |
· | Investors in the offered certificates are responsible for analyzing their own regulatory position, and are encouraged to consult their own investment and legal advisors regarding compliance with the Securitization Retention Requirements and the suitability of the offered certificates for investment. None of the issuing entity, the underwriters, the depositor, the sponsors, the mortgage loan sellers and any other party to the transaction makes any representation to any prospective investor or purchaser of the offered certificates regarding the regulatory capital treatment of their investment in the offered certificates on the closing date or at any time in the future. |
· | 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 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 the regulations adopted to implement 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 and became effective on April 1, 2014. Conformance with the Volcker Rule and its implementing regulations was required by July 21, 2015 (or, by July 21, 2016 in respect of investments in and relationships with “covered funds” that were in place prior to December 31, 2013, subject to the possibility of a one-year |
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extension). 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 thisprospectus supplement.
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 thisprospectus supplement.
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 “—Other Financing,” and “The Pooling and Servicing Agreement—Representations and Warranties;Repurchase;Substitution” in thisprospectus supplement.
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
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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 thisprospectus supplement.
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 thisprospectus supplement.
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 thisprospectus supplement. 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; |
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· | 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 XP-A and Class XS-A certificates will not be entitled to distributions of principal but instead will accrue interest on their notional balances. Because the notional balance of each of the Class XP-A and Class XS-A certificates is based upon some or all of the outstanding 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, the yield to maturity on the Class XP-A and Class XS-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 XP-A or Class XS-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, 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 thisprospectus supplement. 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 thisprospectus supplement.
Yield Considerations
The yield to maturity on any certificate offered in thisprospectus supplement 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:
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· | 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 thisprospectus supplement 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 XP-A and Class XS-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 (or with respect to the Class XP-A and Class XS-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 average of the net mortgage interest rates on the mortgage loans even if principal prepayments do not occur.
If you purchase Class XP-A or Class XS-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 notional balance of the Class XP-A or Class XS-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 thisprospectus supplement.
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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 thisprospectus supplement.
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. However, Ladder Capital Finance Holdings LLLP, Series TRS of Ladder Capital Finance Holdings LLLP and Series REIT of Ladder Capital Finance Holdings LLLP will agree, pursuant to the related mortgage loan purchase agreement, to guarantee the payment obligations of Ladder Capital Finance LLC in this regard. We cannot provide assurances that the mortgage loan seller (or, in the case of Ladder Capital Finance LLC, Ladder Capital Finance Holdings LLLP, Series TRS of Ladder Capital Finance Holdings LLLP or Series REIT of Ladder Capital Finance Holdings LLLP) will have the financial ability to effect such repurchases or substitutions. In the case of the mortgage loan secured by the portfolio of mortgaged properties identified on Annex A-1 to thisprospectus supplement as Equity Inns Portfolio, as to which German American Capital Corporation and Ladder Capital Finance LLC are each acting as a mortgage loan seller with respect to its respective note, each mortgage loan seller will only be obligated to repurchase the specific note as to which it is acting as mortgage loan seller. 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, 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 thisprospectus supplement.
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, the related mortgage loan seller (or, in the case of mortgage loans sold by Ladder Capital Finance LLC, Ladder Capital Finance Holdings LLLP, Series TRS of Ladder Capital Finance Holdings LLLP or Series REIT of Ladder Capital Finance Holdings LLLP)) 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 thisprospectus supplement.
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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 J, 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 XP-A, Class XS-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 balance of each of the Class B and Class C certificates, the notional balance of the Class X-C certificates is based on the certificate balance of each of the Class D and Class E certificates, the notional balance of the Class X-D certificates is based on the certificate balance of the Class F certificates, the notional balance of the Class X-E certificates is based on the certificate balance of each of the Class G and Class H certificates and the notional balance of the Class X-F certificates is based on the certificate balance of the Class J 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 XP-A and Class XS-A certificates are entitled, notwithstanding that the Class XP-A and Class XS-A certificates are senior in right of payment to the Class A-M certificates.
Each class of certificates (other than the Class J, Class V, Class R and Class LR certificates) are 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 loans, which are being serviced pursuant to separate servicing agreements) 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 thisprospectus supplement. 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 thisprospectus supplement, whether 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 thisprospectus supplement and in the accompanying prospectus.
Risks Related to Certain Payments
To the extent described in thisprospectus supplement, 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
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drop in the market value of the offered certificates. In addition, the market value of the offered certificates 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 thisprospectus supplement 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. 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 thisprospectus supplement 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
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may have to sell at discount from the price you paid for reasons unrelated to the performance of the 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 thisprospectus supplement. 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 thisprospectus supplement. 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 and Local Tax Considerations
In addition to the federal income tax consequences described under the heading “Material Federal Income Tax Consequences” in thisprospectus supplement, potential purchasers should consider the state and local income tax consequences of the acquisition, ownership and disposition of the certificates.
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State and local income tax laws may differ substantially from the corresponding federal income tax laws, and thisprospectus supplement does not purport to describe any aspects of the income tax laws of the states or localities in which the mortgaged properties are located or of any other applicable state or locality.
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 or local taxing jurisdiction.
If any tax or penalty is successfully asserted by any state or local 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 and local 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. 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 thisprospectus supplement and “Federal Income Tax Consequences for REMIC Certificates—Taxation of Regular Certificates—Original Issue Discount” in the accompanying prospectus.
Tax Considerations Related to Foreclosure
Any income from a mortgaged property acquired by the Trust on foreclosure may be subject to entity level taxes (that is, taxes at the Trust level) unless certain conditions are satisfied. Specifically, income from the operation or management of a mortgaged property may be subject to federal tax at the highest marginal corporate tax rate (currently 35%) if the mortgaged property is operated or managed other than as rental property. Similarly, gain from the sale of a mortgaged property may be subject to federal tax at the highest marginal corporate tax rate if the mortgaged property is characterized as primarily held for sale to customers in the ordinary course of a trade or business. In addition, income from the operation or management of a mortgaged property, whether or not the mortgaged property is operated or managed as rental property, and income from the sale of a mortgaged property, whether or not the mortgaged property is characterized as primarily held for sale to customers in the ordinary course of a trade or business, may be subject to state and local taxes. Income subject to such taxes may be permitted, however, if it is determined that the benefit to Certificateholders is greater than under other methods of operating, managing or selling the mortgaged property.
In addition, income from the operation and management of a mortgaged property acquired by the Trust on foreclosure or gain from the sale of a mortgaged property may be subject to a 100% federal tax if the mortgaged property ceases to qualify as “foreclosure property” for REMIC purposes. In addition to other circumstances, a mortgaged property will cease to be foreclosure property if (i) construction work is performed on the mortgaged property (other than repair or maintenance), unless the construction was more than 10% completed when default on the related mortgage loan became imminent, (ii) income from the mortgaged property fails to qualify as “rents from real property” or (iii) the mortgaged property is
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managed or operated in a trade or business, unless such management or operation is provided by an independent contractor (in which case the mortgaged property will not cease to be foreclosure property but its income will be subject to the entity level tax described above). Income from a mortgaged property will fail to qualify as “rents from real property” if it is based on the net profits of a tenant, or allocable to a service that is not customary in the area for the type of mortgaged property involved, unless such service is provided by an independent contractor. In addition, income from the operation or management of a mortgaged property and income from the sale of a mortgaged property, whether or not the mortgaged property qualifies as “foreclosure property” for REMIC purposes, may be subject to state and local taxes.
Changes to REMIC Restrictions on Loan Modifications May Impact an Investment in the Certificates
Ordinarily, a REMIC that modifies a mortgage loan jeopardizes its tax status as a REMIC and risks having a 100% penalty tax being imposed on any income from the mortgage loan. A REMIC may avoid such consequences, however, if the mortgage loan is in default, the default of such mortgage loan 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.
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 thisprospectus supplement would have made, and these decisions may negatively affect those holders’ interests.
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While there is an operating advisor with certain obligations in respect of reviewing the compliance of certain of the special servicer’s obligations under the 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 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 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
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without such a no downgrade confirmation being obtained. See the definition of “No Downgrade Confirmation” in thisprospectus supplement. 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 thisprospectus supplement.
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 thisprospectus supplement.
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 thisprospectus supplement.
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 the depositor has not engaged to rate any class of certificates may nevertheless issue unsolicited credit ratings on one or more classes of certificates and any one or more of the engaged rating agencies may issue unsolicited credit ratings on one or more classes of the certificates that it was not engaged to rate upon initial issuance, in each case, relying on information they receive pursuant to Rule 17g-5 under the Securities Exchange Act of 1934, or otherwise. If any such unsolicited ratings are issued with respect to any rated class of certificates, we cannot assure you that they will not be different from any ratings assigned by an engaged rating agency to the related class of certificates on the closing date. The issuance of any unsolicited ratings that are lower than the ratings assigned by an engaged rating agency to the related class of certificates on the closing date may adversely impact the liquidity, market value and regulatory characteristics of that class of certificates.
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 the related classes of offered certificates and certain classes of private certificates not offered by thisprospectus supplement (although an engaged rating agency may not ultimately issue ratings on all classes of certificates). The decision not to engage certain of the nationally recognized statistical rating organizations to rate any classes of certificates was due, in part, to those nationally recognized statistical rating organizations’ initial subordination levels for such classes of certificates and the decision to engage one or more of the engaged rating agencies to only rate certain classes of certificates, but not others, was also due, in part, to those rating agencies’ initial subordination levels for such classes of certificates. Accordingly, if the depositor selected such other nationally recognized statistical rating organizations to rate the offered certificates or had it engaged the engaged rating agencies to rate those other classes of certificates, their ratings of the offered certificates may have been different, and potentially lower, than those ratings ultimately assigned to the related class of offered certificates by the engaged rating agencies. 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. In addition, the decision not to engage the engaged rating agencies in the rating of a
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class of certificates to be issued in connection with this transaction may negatively impact the liquidity, market value and regulatory characteristics of those classes of certificates.
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 thisprospectus supplement. In no event will no downgrade confirmations from any nationally recognized statistical rating organization (other than the engaged rating agencies 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 the engaged rating agencies 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 thisprospectus supplement 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.
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 (i) the Equity Inns Portfolio loan combination, which was co-originated by GACC and LCF, (ii) the 32 Avenue of the Americas loan combination, which was co-originated by GACC and JPMorgan Chase Bank, National Association, and (iii) the 11 Madison Avenue loan combination, which was co-originated by GACC, Morgan Stanley Bank, N.A. and Wells Fargo Bank, National Association, 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.
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GACC’s Securitization Program
GACC has been engaged as an originator and seller/contributor of loans into CMBS securitizations for over 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 September 30, 2015, is approximately $38.704 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.
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 thisprospectus supplement), 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 thisprospectus supplement.
In the case of the Mortgage Loan secured by the portfolio of Mortgaged Properties identified on Annex A-1 to thisprospectus supplement as Equity Inns Portfolio, representing approximately 8.3% of the
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Initial Outstanding Pool Balance, which is evidenced by two Notes, GACC is acting as Mortgage Loan Seller with respect to one of the Notes and LCF is acting as Mortgage Loan Seller with respect to the other Note. The related whole loan was co-originated by GACC and LCF.
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 thisprospectus supplement. 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 thisprospectus supplement, 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 thisprospectus supplement.
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 thisprospectus supplement 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 thisprospectus supplement against the GACC Data Tape; and |
· | recalculating certain percentages, ratios and other formulae relating to the GACC Mortgage Loans disclosed in thisprospectus supplement. |
Legal Review.GACC engaged various law firms to conduct certain legal reviews of the GACC Mortgage Loans for disclosure in thisprospectus supplement. 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 thisprospectus supplement 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
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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.
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 thisprospectus supplement.
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 thisprospectus supplement is accurate in all material respects. GACC also determined that the GACC Mortgage Loans were originated in accordance with 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
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mortgaged property’s sub-market and the utility of the mortgaged property within the sub-market. Unless otherwise specified in thisprospectus supplement, all financial, occupancy and other information contained in thisprospectus supplement 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 | 70% | ||
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 thisprospectus supplementmay 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 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 thisprospectus supplement and Annex A-1 to thisprospectus supplement.
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:
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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 thisprospectus supplement 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 thisprospectus supplement as Beach House Hilton Head, representing approximately 4.2% of the Initial Outstanding Pool Balance, theCut-off Date LTV ratio is 72.7% 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 propertygoing through a capital improvement plan from 2015 to 2016 for a total budgeted cost of $6.4 million ($31,683 per room), of which $5.8 million was reserved for at loan closing. The property underwent an approximately $3.6 million renovation in 2012 and since the sponsor’s acquisition in February 2013, approximately $600,000 ($2,970 per room) in renovations has been spent on the property. Additionally, the appraiser concluded to an “as complete” appraised value of $62.4 million as of August 1, 2016, which wouldresult ina Cut-off Date LTV ratio of 64.1%, and an “asstabilized” appraised value of $64.5 million as of August 1, 2017, which would result in aCut-off Date LTV ratio of 62.0%.
With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to thisprospectus supplement as Brown Street Centre, representing approximately 1.2% of the Initial Outstanding Pool Balance, the borrower is required to makemonthly replacement reserve deposits of $0.15 per square foot (on an annual basis) in comparison to a monthly replacement reserve deposit of $0.20 per square foot (on an annual basis) 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
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having spent approximately $700,000 in capital improvements since acquisition in 1999 and establishing an upfront immediate repairs reserve of $144,375 ($2.07 PSF), which represents 125% of the amount recommended per the property condition report. Additionally, the Mortgage Loan has aCut-off Date LTV ratio of 64.6%, in comparison to an LTV of 70.0% required by GACC’s underwriting guidelines,U/W NOI Debt Yield of 11.1% and UW NCF DSCR of 1.60x based on 30 year amortization.
With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this prospectus supplement as Walgreens Frisco TX, representing approximately 0.4% of the Initial Outstanding Pool Balance, the U/W NCF DSCR is 1.20x in comparison to an U/W NCF DSCR of 1.30x 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 LTV at Cut-off Date of 60.4% compared to an LTV at Cut-off Date of 75.0% provided for in GACC’s underwriting guidelines for retail properties, and based on the 20-year amortization schedule, the LTV Ratio at the Maturity Date is expected to be 37.5%. In addition, the property is 100.0% occupied by a national and investment grade tenant rated Baa2/BBB by Moody’s/S&P, with a lease through April 2079 (subject to termination options every five years commencing April 16, 2029), and a lease sweep structure in place with respect to such tenant.
With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this prospectus supplement as Walgreens-Goodwill Missouri TX, representing approximately 0.4% of the Initial Outstanding Pool Balance, the U/W NCF DSCR is 1.13x in comparison to an U/W NCF DSCR of 1.30x 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 property being 100% leased by Walgreens, a national and investment grade tenant rated Baa2/BBB by Moody’s/S&P with a lease through July 2080 (subject to termination options every five years commencing July 15, 2030), and with lease sweep structure in place with respect to such tenant. In addition, based on the 18-year amortization schedule, the LTV Ratio at the Maturity Date is expected to be 41.1%.
With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this prospectus supplement as Walton Shoppes, representing approximately 0.4% of the Initial Outstanding Pool Balance, the U/W NCF DSCR is 1.28x in comparison to an U/W NCF DSCR of 1.30x 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 LTV at Cut-off of 65.4% compared to an LTV at Cut-off of 75.0% provided for in GACC’s underwriting guidelines for retail properties, and based on the 20-year amortization schedule, the LTV Ratio at the Maturity Date is expected to be 40.2%. Additionally, the property is located in Oakland County Michigan with an average household income of $112,875 within a three-mile radius, and since the property was developed in 2014, the borrower has leased over 18,100 sq. ft. to nine tenants.
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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 October 1, 2012 to and including September 30, 2015:
% 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 (CIK #
| 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 Broadway loan, which represented 0.68% 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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Ladder Capital Finance LLC
General
Ladder Capital Finance LLC (“LCF”) is a sponsor of, and a seller of certain Mortgage Loans (the “LCF Mortgage Loans”) into, the securitization described in this prospectus supplement. LCF is a limited liability company organized under the laws of the State of Delaware and an indirect subsidiary of Ladder Capital Finance Holdings LLLP (“Ladder Holdings”) and Series TRS of Ladder Capital Finance Holdings LLLP (“TRS LLLP”). Ladder Holdings is a limited liability limited partnership organized under the laws of the State of Delaware. TRS LLLP and Series REIT of Ladder Capital Finance Holdings LLLP (“REIT LLLP”) are each a series of Ladder Holdings. Ladder Capital Corp. holds a controlling interest in Ladder Holdings.
Ladder Holdings commenced operations in October 2008. Ladder Holdings, together with its direct and indirect subsidiaries, including LCF, are collectively referred to in this prospectus supplement as the “Ladder Capital Group”. The Ladder Capital Group is a vertically integrated, full-service commercial real estate finance and investment management company that primarily originates, underwrites, structures, acquires, manages and distributes commercial, multifamily and manufactured housing community mortgage loans and other real estate debt instruments. The executive offices of the Ladder Capital Group are located at 345 Park Avenue, 8th Floor, New York, New York 10154.
Deutsche Bank AG, Cayman Islands Branch (an affiliate of the Depositor, German American Capital Corporation, a Sponsor and Mortgage Loan Seller and Deutsche Bank Securities Inc., one of the Underwriters), Wells Fargo Bank, National Association and certain third party lenders provide these various repurchase facilities to affiliates of LCF (the “LCF Financing Affiliates”) through various repurchase facilities. Some or all of the LCF Mortgage Loans are (or are expected to be prior to the Closing Date) subject to those repurchase facilities. If such is the case at the time the Certificates are issued, then LCF will use the proceeds from its sale of the LCF Mortgage Loans to the Depositor to, among other things, reacquire such LCF Mortgage Loans from the related LCF Financing Affiliates, and each of the related LCF Financing Affiliates will, in turn, use the funds that it receives from LCF to, among other things, reacquire the warehoused LCF Mortgage Loans from the repurchase agreement counterparties free and clear of any liens. As of November 10, 2015, Deutsche Bank AG, Cayman Islands Branch was the repurchase agreement counterparty with respect to 3 LCF Mortgage Loans (including the Equity Inns Portfolio Mortgage Loan which was co-originated by LCF and GACC), representing approximately 15.4% of the Initial Outstanding Pool Balance, and Wells Fargo was the repurchase counterparty with respect to 3 LCF Mortgage Loan, representing approximately 3.7% of the Initial Outstanding Pool Balance (except that the number and dollar amount of LCF Mortgage Loans subject to those repurchase facilities may increase or decrease prior to the issuance of the Certificates).
Wells Fargo acts as interim custodian of the Mortgage Loan Documents (or, in the case of each of the Harvey Building Products Portfolio Mortgage Loan and the 40 Wall Street Mortgage Loan, just the related promissory note) with respect to all of the LCF Mortgage Loans.
LCF or one of its affiliates may purchase certificates issued in connection with this securitization, either at initial issuance or in the secondary market.
Ladder Capital Group’s Securitization Program
During 2010, LCF contributed approximately $329.76 million of commercial, multifamily and manufactured housing community mortgage loans to two (2) commercial mortgage securitizations. During 2011, LCF contributed approximately $1.02 billion of commercial, multifamily and manufactured housing community mortgage loans to three (3) commercial mortgage securitizations. During 2012, LCF contributed approximately $1.6 billion of commercial, multifamily and manufactured housing community mortgage loans to six (6) commercial mortgage securitizations. During 2013, LCF contributed approximately $2.23 billion of commercial, multifamily and manufactured housing community mortgage
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loans to six (6) commercial mortgage securitizations. During 2014, LCF contributed approximately $3.49 billion of commercial, multifamily and manufactured housing community mortgage loans to 10 commercial mortgage securitizations. During the first nine (9) calendar months of 2015, LCF has contributed approximately $2.064 billion of commercial, multifamily and manufactured housing community mortgage loans to 7 commercial mortgage securitizations. LCF began securitizing such types of mortgage loans in 2010 and has not been involved in the securitization of any other types of financial assets.
The Ladder Capital Group originates, and acquires from unaffiliated third party originators, commercial, multifamily and manufactured housing community mortgage loans throughout the United States. The following table sets forth information with respect to originations of fixed rate commercial, multifamily and manufactured housing community mortgage loans by Ladder Capital Group during the calendar years 2010, 2011, 2012, 2013 and 2014 and the first six months of 2015.
Originations of Fixed Rate Multifamily,
Manufactured Housing Community and Commercial Mortgage Loans
No. of | Approximate Aggregate | ||||||
2010 | 48 | $ | 663,256,700 | ||||
2011 | 65 | $ | 1,170,444,775 | ||||
2012 | 152 | $ | 2,463,328,246 | ||||
2013 | 120 | $ | 2,269,641,443 | ||||
2014 | 158 | $ | 3,290,652,162 | ||||
2015(1) | 124 | $ | 1,909,515,489 | ||||
(1)During the period from January 1, 2015 through September 30, 2015. |
In connection with commercial mortgage securitization transactions in which it participates as a sponsor, LCF will generally transfer the subject mortgage loans to the applicable depositor, who will then transfer those mortgage loans to the issuing entity for the related securitization. In return for the transfer by the depositor to the issuing entity of those mortgage loans (together with any other mortgage loans being securitized), the issuing entity will issue commercial mortgage pass-through certificates that are, in whole or in part, backed by, and supported by the cash flows generated by, the mortgage loans being securitized. In coordination with underwriters or initial purchasers and the applicable depositor, LCF works with rating agencies, other loan sellers, servicers and investors and participates 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 rating agency criteria.
LCF will generally make certain representations and warranties and undertake certain loan document delivery requirements with respect to the mortgage loans that it contributes to a commercial mortgage securitization; and, in the event of an uncured material breach of any such representation and warranty or an uncured material document defect or omission, LCF will generally be obligated to repurchase or replace the affected mortgage loan or, in some cases, pay an amount estimated to cover the approximate loss associated with such breach, defect or omission. LCF has limited assets with which to effect any such repurchase or substitution or make any such estimated loss reimbursement payment. However, as is the case in this securitization, Ladder Holdings, TRS LLLP and REIT LLLP will often guarantee LCF’s payment obligations in connection with a repurchase or substitution of a defective mortgage loan resulting from, or the making of an estimated loss reimbursement payment related to, any such breach of representation or warranty or defective or missing loan documentation. Notwithstanding the existence of any such guarantee, no assurance can beprovided that Ladder Holdings, TRS LLLP, REIT LLLP or LCF will have the financial ability to repurchase or replace, or to make an estimated loss reimbursement payment with respect to, a defective mortgage loan, or to cause such to occur, and no other member of the Ladder Capital Group will be responsible for doing so if Ladder Holdings, TRS LLLP, REIT LLLP and LCF all fail with respect to their obligations.
No member of the Ladder Capital Group acts as a servicer of the commercial, multifamily and manufactured housing community mortgage loans that LCF or its affiliates originates, acquires or
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securitizes. Instead, LCF sells the right to be appointed servicer of its securitized loans to unaffiliated third party servicers and utilizes unaffiliated third party servicers as interim servicers. Wells Fargo Bank, National Association, has been acting as interim servicer with respect to all of the LCF Mortgage Loans, which represents 25.6% of the Initial Outstanding Pool Balance, as well as the Equity Inns Portfolio Mortgage Loan, representing 8.3% of the Initial Outstanding Pool Balance, which was co-originated by LCF and GACC, provided that in the case of the 40 Wall Street Mortgage Loan, it has been doing so as a sub-servicer.
Review of LCF Mortgage Loans
Overview. LCF has conducted a review of the LCF Mortgage Loans in connection with the securitization described in this prospectus supplement. The review of the LCF Mortgage Loans was performed by a team comprised of real estate and securitization professionals who are employees of Ladder Capital Group (the “Ladder Capital Review Team”). The review procedures described below were employed with respect to all of the LCF Mortgage Loans, except that certain review procedures only were relevant to the large loan disclosures in this prospectus supplement. No sampling procedures were used in the review process.
Database. To prepare for securitization, members of the Ladder Capital Review Team created a database of loan-level and property-level information, and prepared an asset summary report, relating to each LCF Mortgage Loan. The database and the respective asset summary reports were 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 Ladder Capital Review Team during the underwriting process. After origination of each LCF Mortgage Loan, the Ladder Capital Review Team updated the information in the database and the related asset summary report with respect to such LCF Mortgage Loan based on updates provided by the related 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 Ladder Capital Review Team.
A data tape (the “LCF Data Tape”) containing detailed information regarding each LCF Mortgage Loan was created from the information in the database referred to in the prior paragraph. The LCF Data Tape was used to provide the numerical information regarding the LCF Mortgage Loans in this prospectus supplement.
Data Comparison and Recalculation. LCF engaged a third party accounting firm to perform certain data comparison and recalculation procedures designed by LCF, relating to information in this prospectus supplement regarding the LCF Mortgage Loans. These procedures included:
· | comparing the information in the LCF Data Tape against various source documents provided by LCF that are described under “—Database” above; |
· | comparing numerical information regarding the LCF Mortgage Loans and the related Mortgaged Properties disclosed in this prospectus supplement against the LCF Data Tape; and |
· | recalculating certain percentages, ratios and other formulae relating to the LCF Mortgage Loans disclosed in this prospectus supplement. |
Legal Review. The Ladder Capital Group engaged various law firms to conduct certain legal reviews of the LCF Mortgage Loans for disclosure in this prospectus supplement. In anticipation of the securitization of the LCF Mortgage Loans, the Ladder Capital Group’s origination counsel for each LCF Mortgage Loan reviewed the representations and warranties set forth on Annex F to this prospectus supplement and, if applicable, identified exceptions to those representations and warranties.
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Legal counsel was also engaged in connection with this securitization to assist in the review of the LCF Mortgage Loans. Such assistance included, among other things, (i) a review of the Ladder Capital Group’s asset summary reports for certain of the LCF Mortgage Loans, (ii) a review of the representation and warranty exception reports referred to above relating to certain of the LCF Mortgage Loans and prepared by origination counsel, (iii) a review of a due diligence questionnaire regarding the LCF Mortgage Loans prepared by Ladder Capital Group, (iv) a review of data tapes relating to the LCF Mortgage Loans prepared by Ladder Capital Group, and (v) the review of select provisions in certain loan documents with respect to certain of the LCF Mortgage Loans.
Origination counsel or securitization counsel also assisted in the preparation of the individual LCF Mortgage Loan summaries in Annex B to this prospectus supplement based on their respective reviews of the related asset summary reports and/or the pertinent sections of the related Mortgage Loan documents.
Other Review Procedures. With respect to any material pending litigation of which the Ladder Capital Group was aware at the origination of any LCF Mortgage Loan, the Ladder Capital Group requested updates from the related borrower, origination counsel and/or borrower’s litigation counsel. If the Ladder Capital Group became aware of a significant natural disaster in the vicinity of the Mortgaged Property securing any LCF Mortgage Loan, the Ladder Capital Group obtained information on the status of the Mortgaged Property from the related borrower to confirm no material damage to the Mortgaged Property.
The Ladder Capital Review Team also reviewed the LCF Mortgage Loans to determine, with the assistance of counsel engaged in connection with this securitization, whether any LCF Mortgage Loan materially deviated from the underwriting guidelines set forth under “—Ladder’s Underwriting Standards” below.
Findings and Conclusions. Based on the foregoing review procedures, Ladder Capital Group determined that the disclosure regarding the LCF Mortgage Loans in this prospectus supplement is accurate in all material respects. Ladder Capital Group also determined that the LCF Mortgage Loans were originated in accordance with Ladder Capital Group’s origination procedures and underwriting criteria discussed under “—Ladder’s Underwriting Standards” below. LCF attributes to itself all findings and conclusions resulting from the foregoing review procedures.
Review Procedures in the Event of a Mortgage Loan Substitution. The Ladder Capital Group will perform a review of any LCF Mortgage Loan that it elects to substitute for a LCF Mortgage Loan in the pool in connection with material breach of a representation or warranty or a material document defect. The Ladder Capital Group, 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“). The Ladder Capital Group 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 the Ladder Capital Group 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 the Ladder Capital Group to render any tax opinion required in connection with the substitution.
Ladder’s Underwriting Standards
Each of the LCF Mortgage Loans was originated by LCF or one of its affiliates. Set forth below is a discussion of certain general underwriting guidelines and processes with respect to commercial, multifamily and manufactured housing community mortgage loans originated by LCF and its affiliates for securitization.
Notwithstanding the discussion below, given the unique nature of commercial, multifamily and manufactured housing community mortgaged properties, the underwriting and origination procedures and the credit analysis with respect to any particular commercial, multifamily or manufactured housing community mortgage loan may significantly differ from one loan to another, and will be driven by
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circumstances particular to that property, including, among others, its type, current use, size, location, market conditions, reserve requirements and additional collateral, tenants and leases, borrower identity, sponsorship, performance history and/or other factors. Consequently, there can be no assurance that the underwriting of any particular commercial, multifamily or manufactured housing community mortgage loan originated by LCF or one of its affiliates will conform to the general guidelines and processes described below. For important information about the circumstances that have affected the underwriting of particular LCF Mortgage Loans, see “—Ladder’s Underwriting Standards—Exceptions” below and “Annex G—Exceptions to Mortgage Loan Seller Representations and Warranties” in this prospectus supplement.
Loan Analysis. Generally both a credit analysis and a collateral analysis are conducted with respect to each commercial, multifamily and manufactured housing community mortgage loan. The credit analysis of the borrower generally includes a review of third party credit reports or judgment, lien, bankruptcy and pending litigation searches. Such searches are limited in the time periods that they cover, and generally cover no more than the prior 10-year period. Furthermore, in the case of equity holders in the borrowers, such searches would generally be conducted only as to equity holders with at least a 20% interest in the subject borrower or that control the subject borrower. The collateral analysis generally includes a review of, in each case to the extent available and applicable, the historical property operating statements, rent rolls and certain significant tenant leases. The credit underwriting also generally includes a review of third party appraisals, as well as environmental reports, engineering assessments and seismic reports, if applicable and obtained. Generally, the originator also conducts or causes a third party to conduct a site inspection to ascertain the overall quality, functionality and competitiveness of the property, including its neighborhood and market, accessibility and visibility, and to assess the tenancy of the property. The submarket in which the property is located is assessed to evaluate the competitive or comparable properties as well as market trends.
Loan Approval. Prior to commitment, each commercial, multifamily and manufactured housing community mortgage loan to be originated must be approved by a loan committee that includes senior personnel from the Ladder Capital Group. The committee 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 Loan-to-Value Ratio. The underwriting includes a calculation of the debt service coverage ratio and loan-to-value ratio in connection with the origination of a loan. With respect to loans originated for securitization, the Ladder Capital Group’s underwriting standards generally require, without regard to any other debt, a debt service coverage ratio of not less than 1.20x and a loan-to-value ratio of not more than 80.0%.
A debt service coverage ratio will generally be calculated based on the underwritten net cash flow from the property in question as determined by the Ladder Capital Group and payments on the loan based on actual (or, in some cases, assumed) 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, multifamily or manufactured housing community mortgage loan, annual net cash flow that was calculated based on assumptions regarding projected future rental income, expenses and/or occupancy may be utilized. There is no assurance that the foregoing assumptions made with respect to any prospective commercial, multifamily or manufactured housing community mortgage loan will, in fact, be consistent with actual property performance. Such underwritten net cash flow may be higher than historical net cash flow reflected in recent financial statements. 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. A 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.
Additional Debt. Certain mortgage loans originated by LCF or one of its affiliates may have or permit in the future certain additional subordinate debt, whether secured or unsecured, and/or mezzanine debt.
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It is possible that a member of the Ladder Capital Group may be the lender on that additional subordinate debt and/or mezzanine debt.
The debt service coverage ratios described above will be lower based on the inclusion of the payments related to such additional debt and the loan-to-value ratios described above will be higher based on the inclusion of the amount of any such additional subordinate debt and/or mezzanine debt.
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 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. An engineering assessment may not be conducted with respect to a mortgaged property that lacks material improvements owned by the related borrower.
(iv) Seismic Report. Generally, a seismic report is required for all properties located in seismic zones 3 or 4. A seismic study may not be conducted with respect to a mortgaged property that lacks material improvements owned by the related borrower.
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.
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Title Insurance. The borrower is required to provide, and the Ladder Capital Group or its origination counsel typically will review, a title insurance policy for each property. The title insurance policies provided typically must meet the following requirements: (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) 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) 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 permitted to obtain insurance or self-insure, or where another third party unrelated to the applicable borrower (such as a condominium association, franchisor or third party property manager, if applicable) is permitted to obtain insurance, or the subject mortgaged property is covered by a blanket policy (which may have been obtained by an affiliate of the related borrower), the Ladder Capital Group 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 borrower-owned improvements in any area identified in the Federal Register by the Federal Emergency Management Agency a special flood hazard area. 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 material borrower-owned improvements at the property or, in cases where only a portion of the property is in the flood zone, the full insurable value of the material borrower-owned improvements at 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, except in certain instances where sole or significant tenants (which may include ground tenants) are permitted to obtain insurance or self-insure, or where another third party unrelated to the applicable borrower (such as a condominium association, franchisor or third party property manager, if applicable) is permitted to obtain insurance, or the subject mortgaged property is covered by a blanket policy (which may have been obtained by an affiliate of the related borrower), each of the mortgage loans requires that the related borrower maintain: (i) coverage for terrorism or terrorist acts, if such coverage is available at commercially reasonable rates (although in many cases there is a cap on the amount that the related borrower will be required to expend on terrorism insurance); (ii) 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; and (iii) 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
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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, the Ladder Capital Group may require an endorsement to the title insurance policy or the acquisition of law and ordinance insurance or a non-recourse carveout in the related loan documents 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; or (ii) if the improvements are rebuilt in accordance with currently applicable law, the value and performance of the property would be acceptable; or (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, the Ladder Capital Group may require the borrower to remediate such violation and, subject to the discussion under “—Ladder’s Underwriting Standards—Escrow Requirements” below, to 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 (depending on the property type), 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 a member of the Ladder Capital Group. In certain cases, these reserves may be released to the borrower upon satisfaction of certain conditions in the related loan documents that may include, but are not limited to, achievement of leasing matters, achieving a specified debt service coverage ratio or debt yield or satisfying other conditions. Furthermore, the Ladder Capital Group 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, the Ladder Capital Group may determine that establishing an escrow or reserve is not warranted given the amounts that would be involved and the Ladder Capital Group’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, the Ladder Capital Group 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.
Generally, subject to the discussion in the prior paragraph, the required escrows for commercial, multifamily and manufactured housing community mortgage loans originated by the Ladder Capital Group 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, (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, to reimburse the landlord/borrower for the payment of such taxes or to deliver to the landlord/borrower funds for purposes of paying such taxes in advance of their due date, (iii) in the case of a hospitality property, the franchisor or a third-party property manager is maintaining such |
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an escrow or reserve or (iv) if a sponsor, a key principal or an affiliate of the borrower delivers a guarantee relating to the payment of real estate taxes. |
· | 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 or an affiliate maintains a blanket insurance policy covering the subject mortgaged property, (iii) if and to the extent that a sole or major tenant (which may include a ground tenant) at the related mortgaged property is permitted to maintain the insurance or to self-insure, (iv) if and to the extent that another third party unrelated to the applicable borrower (such as a condominium association, franchisor or third party property manager, if applicable) is permitted to maintain the insurance, (v) in the case of a hospitality property, the franchisor or a third-party property manager is maintaining such an escrow or reserve or (vi) if a sponsor, a key principal or an affiliate of the borrower delivers a guarantee relating to the payment of insurance premiums. |
· | 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 and may be required to be funded either at loan origination and/or during the related mortgage loan term and/or after the occurrence and during the continuance of a specified trigger event. 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 and to the extent a tenant (which may include a ground tenant) at the related mortgaged property or other third party is responsible for all repairs and maintenance, (ii) if a sponsor, a key principal or an affiliate of the borrower delivers a guarantee agreeing to take responsibility and pay for the related costs and expenses, (iii) if the Ladder Capital Group determines that establishing an escrow or reserve is not warranted given the amounts that would be involved and the Ladder Capital Group’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, or (iv) in the case of a hospitality property, the franchisor or a third-party property manager is maintaining such 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 and/or after the occurrence and during the continuance of a specified trigger event 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 a sponsor, a key principal or an affiliate of the borrower delivers a guarantee agreeing to take responsibility and pay for the related costs and expenses, or (iv) if the Ladder Capital Group determines that establishing an escrow or reserve is not warranted given the amounts that would be involved and the Ladder Capital Group’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, a key principal or an affiliate 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 |
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may include a ground tenant) at the related mortgaged property or other third party is responsible for the repairs, or (iv) if the Ladder Capital Group determines that establishing an escrow or reserve is not warranted given the amounts that would be involved and the Ladder Capital Group’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. |
· | 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, a key principal or an affiliate 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 the Ladder Capital Group determines that establishing an escrow or reserve is not warranted given the amounts that would be involved and the Ladder Capital Group’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 LCF Mortgage Loans, please see Annex A-1 to this prospectus supplement.
Exceptions. The LCF Mortgage Loans were originated in accordance with the underwriting standards set forth above.
Compliance with Rule 15Ga-1 under the Exchange Act
As of the date of this prospectus supplement, LCF most recently filed a Form ABS-15G on February 10, 2015. LCF’s Central Index Key number is 0001541468. With respect to the period from and including October 1, 2012 to and including September 30, 2015, LCF does 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.
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 prospectus supplement. CCRE Lending is a Delaware limited partnership and an affiliate of Cantor Fitzgerald & Co., an Underwriter, 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
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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 prospectus supplement.
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 prospectus supplement. 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 prospectus supplement, 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 by the CCRE Deal Team in providing the numerical information regarding the CCRE Mortgage Loans in this prospectus supplement.
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 prospectus supplement 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 prospectus supplement against the CCRE Data Tape; and |
· | recalculating certain percentages, ratios and other formulae relating to the CCRE Mortgage Loans disclosed in this prospectus supplement. |
Legal Review. CCRE Lending engaged various law firms to conduct certain legal reviews of the CCRE Mortgage Loans for disclosure in this prospectus supplement. In anticipation of the securitization
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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 prospectus supplement 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 prospectus supplement.
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 prospectus supplement is accurate in all material respects. CCRE Lending also determined that the CCRE Mortgage Loans were originated in 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
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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 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 prospectus supplement. 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 prospectus supplement will reflect a calculation on the future (larger) amortizing loan payment.
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Servicing. Interim servicing for all CCRE Lending loans prior to securitization will typically be performed by affiliated servicer Berkeley Point Capital LLC or 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 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
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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 borrower-owned 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 material borrower-owned improvements at the property or, in cases where only a portion of the property is in the flood zone, the full insurable value of the material borrower-owned improvements at 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.
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.
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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.
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 |
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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. |
· | 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 prospectus supplement.
Exceptions. The CCRE Mortgage Loans were originated in accordance with the underwriting standards set forth above.
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 number is 0001515166. With respect to the period from and including April 1, 2012 to and including March 31,
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2015, 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 5, 2015. CCRE Lending’s Central Index Key number is 0001558761. With respect to the period from and including October 1, 2012 to and including September 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.
Jefferies LoanCore LLC
General
Jefferies LoanCore LLC (“Jefferies LoanCore” or “JLC”) is a sponsor of, and a seller of certain mortgage loans (the “JLC Mortgage Loans”) into, the securitization described in this prospectus supplement. Jefferies LoanCore is a Delaware limited liability company and is affiliated with Jefferies LLC. Jefferies LoanCore is a privately held company that commenced operations in February 2011. It was formed for the purpose of acquiring, originating, syndicating and securitizing real estate related debt. Jefferies LoanCore’s executive offices are located at 55 Railroad Avenue, Suite 100, Greenwich, Connecticut 06830, telephone number (203) 861-6000.
According to its consolidated statement of financial condition (unaudited), as of August 31, 2015, Jefferies LoanCore and its consolidated subsidiaries had total assets of approximately $1,788.6 million, total liabilities of approximately $1,276.4 million and total members’ capital of approximately $512.2 million.
Deutsche Bank AG, Cayman Islands Branch (an affiliate of the Depositor, German American Capital Corporation, a Sponsor and Mortgage Loan Seller, Deutsche Bank Securities Inc., one of the Underwriters) and certain third party lenders provide warehouse financing to affiliates of Jefferies LoanCore (the “JLC Financing Affiliates”) through various repurchase facilities. Jefferies LoanCore guarantees certain obligations of the JLC Financing Affiliates under such repurchase facilities. Certain of the JLC Mortgage Loans are (or are expected to be prior to the Closing Date) subject to those repurchase facilities. If such is the case at the time the Certificates are issued, then Jefferies LoanCore will use the proceeds from its sale of the JLC Mortgage Loans to the Depositor to, among other things, reacquire such JLC Mortgage Loans from the related JLC Financing Affiliate, and the related JLC Financing Affiliate will, in turn, use the funds that it receives from Jefferies LoanCore to, among other things, reacquire the warehoused JLC Mortgage Loans from the repurchase agreement counterparties free and clear of any liens. As of October 22, 2015, Deutsche Bank AG, Cayman Islands Branch is the repurchase agreement counterparty with respect to 1 JLC Mortgage Loan, representing approximately 2.2% of the Initial Outstanding Pool Balance.
Neither Jefferies LoanCore nor any of its affiliates will insure or guarantee distributions on the Certificates. The Certificateholders will have no rights or remedies against Jefferies LoanCore for any losses or other claims in connection with the Certificates or the JLC 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 Jefferies LoanCore in the related Mortgage Loan Purchase Agreement as described under “The Pooling and Servicing Agreement—Representations and Warranties; Repurchase; Substitution” in this prospectus supplement.
JLC’s Commercial Mortgage Securitization Program
Jefferies LoanCore has acted as a sponsor and/or loan seller with respect to 15 prior commercial mortgage securitizations with respect to mortgage loans with an aggregate outstanding balance of approximately $4.65 billion as of the cut-off date for each such securitization.
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Jefferies LoanCore originates, and acquires from unaffiliated third party originators, mortgage loans secured by, and mezzanine loans secured by indirect and/or direct interests in entities that own, commercial and multifamily real properties located throughout the United States. The following table sets forth information with respect to originations of fixed rate mortgage loans secured by, and mezzanine loans secured by direct and/or indirect interests in entities that own, commercial and multifamily real properties, by Jefferies LoanCore from its inception in February 2011 to and including November 30, 2011, from December 1, 2011 to and including November 30, 2012, from December 1, 2012 to and including November 30, 2013, from December 1, 2013 to and including November 30, 2014 and from December 1, 2014 to and including August 31, 2015.
Originations of Fixed Rate Commercial and
Multifamily Mortgage Loans and Mezzanine Loans
No. of Loans(6) | Approximate Aggregate | ||||||
2011(1) | 19 | $ | 566,050,515 | ||||
2012(2) | 37 | $ | 860,275,447 | ||||
2013(3) | 108 | $ | 1,786,891,500 | ||||
2014(4) | 69 | $ | 899,117,929 | ||||
2015(5) | 58 | $ | 1,187,712,500 |
(1) | Reflects activity from February 23, 2011 to and including November 30, 2011. |
(2) | Reflects activity from December 1, 2011 to and including November 30, 2012. |
(3) | Reflects activity from December 1, 2012 to and including November 30, 2013. |
(4) | Reflects activity from December 1, 2013 to and including November 30, 2014. |
(5) | Reflects activity from December 1, 2014 to and including August 31, 2015. |
(6) | A/B andpari passu split note structures are treated as one loan, and a mortgage loan and related mezzanine loan are treated as two loans. |
Review of JLC Mortgage Loans
Overview. Jefferies LoanCore has conducted a review of the JLC Mortgage Loans in connection with the securitization described in this prospectus supplement. The review of the JLC Mortgage Loans was performed by a team comprised of real estate and securitization professionals (the “JLC Review Team”). The review procedures described below were employed with respect to all of the JLC Mortgage Loans, except that certain review procedures were relevant only to the large loan disclosures in this prospectus supplement, as further described below. No sampling procedures were used in the review process.
Database. To prepare for securitization, members of the JLC Review Team created a database of loan-level and property-level information, and prepared an asset summary report, relating to each JLC Mortgage Loan. The database and the respective asset summary reports were 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 JLC Review Team during the underwriting process. After origination of each JLC Mortgage Loan, the JLC Review Team updated the information in the database with respect to such JLC Mortgage Loans 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 JLC Review Team.
A data tape (the “JLC Data Tape”) containing detailed information regarding each JLC Mortgage Loan was created from the information in the database referred to in the prior paragraph. The JLC Data Tape was used by the JLC Review Team to provide certain numerical information regarding the JLC Mortgage Loans in this prospectus supplement.
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Data Comparison and Recalculation. Jefferies LoanCore engaged a third party accounting firm to perform certain data comparison and recalculation procedures designed by Jefferies LoanCore relating to information in this prospectus supplement regarding the JLC Mortgage Loans. These procedures included:
· | comparing the information in the JLC Data Tape against various source documents provided by Jefferies LoanCore that are described above under “—Database”; |
· | comparing numerical information regarding the JLC Mortgage Loans and the related Mortgaged Properties disclosed in this prospectus supplement against the JLC Data Tape; and |
· | recalculating certain percentages, ratios and other formulae relating to the JLC Mortgage Loans disclosed in this prospectus supplement. |
Legal Review. Jefferies LoanCore engaged various law firms to conduct certain legal reviews of the JLC Mortgage Loans for disclosure in this prospectus supplement. In anticipation of the securitization of the JLC Mortgage Loans, origination counsel for each JLC Mortgage Loan reviewed Jefferies LoanCore’s representations and warranties set forth on Annex F to this prospectus supplement and, if applicable, identified exceptions to those representations and warranties.
Securitization counsel was also engaged to assist in the review of the JLC Mortgage Loans. Such assistance included, among other things, a review of (i) Jefferies LoanCore’s preliminary or final asset summary report for each JLC Mortgage Loan, (ii) various statistical data tapes prepared by, and a due diligence questionnaire completed by or on behalf of, Jefferies LoanCore, (iii) the representation and warranty exception reports referred to above relating to certain of the JLC Mortgage Loans prepared by origination counsel and (iv) select provisions in certain loan documents with respect to certain of the JLC Mortgage Loans.
Origination counsel and/or securitization counsel also assisted in the preparation and review of the loan summaries for those of the JLC Mortgage Loans included in the 10 largest Mortgage Loans in the mortgage pool, and the abbreviated loan summaries for those of the JLC 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 prospectus supplement.
Other Review Procedures. With respect to any material pending litigation of which Jefferies LoanCore was aware at the origination of any JLC Mortgage Loan, Jefferies LoanCore requested updates from the related borrower, origination counsel and/or borrower’s litigation counsel.
The JLC Review Team also reviewed the JLC Mortgage Loans to determine, whether any JLC Mortgage Loan materially deviated from the underwriting guidelines described below under “—Jefferies LoanCore’s Underwriting Standards”.
Findings and Conclusions. Based on the foregoing review procedures, Jefferies LoanCore determined that the disclosure regarding the JLC Mortgage Loans in this prospectus supplement is accurate in all material respects. Jefferies LoanCore also determined that the JLC Mortgage Loans were originated in accordance with Jefferies LoanCore’s origination procedures and underwriting criteria. Jefferies LoanCore attributes to itself all findings and conclusions resulting from the foregoing review procedures.
Jefferies LoanCore’s Underwriting Standards
General. Each of the JLC Mortgage Loans was originated by Jefferies LoanCore. Set forth below is a discussion of certain general underwriting guidelines and processes with respect to commercial and multifamily mortgage loans originated by Jefferies LoanCore.
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Notwithstanding the discussion below, given the unique nature of commercial and multifamily mortgaged properties, the underwriting and origination procedures and the credit analysis with respect to any particular commercial or multifamily 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 use, size, location, market conditions, reserve requirements and additional collateral, tenants and leases, borrower identity, sponsorship, performance history and/or other factors. Consequently, we cannot assure you that the underwriting of any particular commercial or multifamily mortgage loan originated by Jefferies LoanCore will conform to the general guidelines and processes described below.
Loan Analysis. Generally both a credit analysis and a collateral analysis are conducted with respect to each commercial and multifamily mortgage loan. The credit analysis of the borrower generally includes a review of third party credit reports or judgment, lien, bankruptcy and pending litigation searches. The collateral analysis generally includes a review of, in each case to the extent available and applicable, the historical property operating statements, rent rolls and certain significant tenant leases. The credit underwriting also generally includes a review of third party appraisals, as well as environmental reports, engineering assessments and seismic reports, if applicable and obtained. Generally, the originator also conducts or causes a third party to conduct a site inspection to ascertain the overall quality, functionality and competitiveness of the property, including its neighborhood and market, accessibility and visibility, and to assess the tenancy of the property. The submarket in which the property is located is assessed to evaluate competitive or comparable properties as well as market trends.
Loan Approval. Prior to commitment, each commercial and multifamily mortgage loan to be originated or acquired must be approved by a loan committee that includes senior personnel from Jefferies LoanCore. The committee 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 Loan-to-Value Ratio. The underwriting includes a calculation of the debt service coverage ratio and loan-to-value ratio in connection with the origination of a loan. With respect to loans originated for securitization, Jefferies LoanCore’s underwriting standards generally require, without regard to any other debt, a debt service coverage ratio of not less than 1.20x and a loan-to-value ratio of not more than 80%.
A debt service coverage ratio will generally be calculated based on the underwritten net cash flow from the property in question as determined by Jefferies LoanCore and payments on the loan based on actual (or, in some cases, assumed) 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, annual net cash flow that was calculated based on assumptions regarding projected future rental income, expenses and/or occupancy may be utilized. We cannot assure you that the foregoing assumptions made with respect to any prospective commercial or multifamily mortgage loan will, in fact, be consistent with actual property performance. Such underwritten net cash flow may be higher than historical net cash flow reflected in recent financial statements. 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. A 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.
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 Jefferies LoanCore or an affiliate may be the lender on that additional subordinate debt and/or mezzanine debt.
The debt service coverage ratios described above will be lower based on the inclusion of the payments related to such additional debt and the loan-to-value ratios described above will be higher based on the inclusion of the amount of any such additional subordinate debt and/or mezzanine debt.
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Servicing. Interim servicing for all loans originated by Jefferies LoanCore prior to securitization is typically performed by an interim servicer that is unaffiliated with Jefferies LoanCore. Generally, servicing responsibilities will be transferred from the interim servicer to the master servicer of the securitization trust at closing. From time to time, the interim 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, and 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 or multifamily 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 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 or multifamily 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 Jefferies LoanCore 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
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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, Jefferies LoanCore 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, except in certain instances where sole or significant tenants (which may include ground tenants) are required to obtain insurance or may self-insure, 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.
Except in certain instances where sole or significant tenants (which may include ground tenants) are required to obtain insurance or may self-insure, each mortgage instrument typically also requires the 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 property in an amount customarily required by institutional lenders; and (ii) 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 or multifamily 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, Jefferies LoanCore 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
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value and performance of the property would be acceptable; (iii) the insurance proceeds received in connection with a major casualty should be sufficient to satisfy the mortgage loan; (iv) any major casualty that would prevent rebuilding has a sufficiently remote likelihood of occurring; or (v) 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, Jefferies LoanCore may require the borrower to remediate such violation and, subject to the discussion under “—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 or multifamily 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 and multifamily mortgage loan originated by Jefferies LoanCore. Furthermore, Jefferies LoanCore 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, Jefferies LoanCore may determine that establishing an escrow or reserve is not warranted given the amounts that would be involved and Jefferies LoanCore’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, Jefferies LoanCore 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.
Generally, subject to the discussion in the prior paragraph, the required escrows for commercial and multifamily mortgage loans originated by Jefferies LoanCore 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, (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, or (iv) if and to the extent that another third party unrelated to the borrower (such as a condominium board, if applicable) is obligated to maintain the insurance. |
· | 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 Jefferies LoanCore determines that establishing an escrow or reserve is not warranted given the amounts that would be involved and Jefferies LoanCore’s evaluation of the ability of the property, the borrower or a holder of direct or indirect ownership interests in the borrower to bear |
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the cost of repairs and maintenance absent creation of an escrow or reserve. Such escrows may also not be required unless a particular trigger event (for example, an event relating to property performance) has occurred and is continuing. |
· | 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 and/or upon the occurrence and during the continuance of a particular trigger event (for example, an event relating to property performance) 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 Jefferies LoanCore determines that establishing an escrow or reserve is not warranted given the amounts that would be involved and Jefferies LoanCore’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 or a key principal 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 Jefferies LoanCore determines that establishing an escrow or reserve is not warranted given the amounts that would be involved and Jefferies LoanCore’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. |
· | 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 or a key principal 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 Jefferies LoanCore determines that establishing an escrow or reserve is not warranted given the amounts that would be involved and Jefferies LoanCore’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 JLC Mortgage Loans, see Annex A-1 to this prospectus supplement.
Exceptions. The JLC Mortgage Loans were originated in accordance with the underwriting standards set forth above.
Compliance with Rule 15Ga-1 under the Exchange Act
Jefferies LoanCore most recently filed a Form ABS-15G on February 10, 2015. Jefferies LoanCore’s Central Index Key is 0001555524. With respect to the period from and including October 1, 2012 through and including September 30, 2015, Jefferies LoanCore does 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
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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 tax administration and to prepare disclosure required under the Exchange Act, (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 the Underwriting Agreement, between the Depositor, Deutsche Bank Securities Inc., Cantor Fitzgerald & Co. and Jefferies LLC (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 prospectus supplement 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-LC23 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 prospectus supplement. 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 prospectus supplement under “The Pooling and Servicing Agreement—Amendment.” The Issuing Entity administers the Mortgage Loans
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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 prospectus supplement 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 two REMIC elections, 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 prospectus supplement 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 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
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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 prospectus supplement.
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 Loans) 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 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
Wells Fargo Bank, National Association (“Wells Fargo”) will act as the master servicer for all of the Mortgage Loans to be deposited into the Issuing Entity and the primary servicer for the Serviced Companion Loans (in such capacity, the “Master Servicer”). Wells Fargo is a national banking association organized under the laws of the United States of America, and is a wholly-owned direct and indirect subsidiary of Wells Fargo & Company. Wells Fargo is also the Certificate Administrator and Custodian. In addition, Wells Fargo is currently the WFCM 2015-LC22 Master Servicer, the WFCM 2015-LC22 Certificate Administrator, the MAD 2015-11MD Certificate Administrator, a co-originator of the 11 Madison Avenue Loan Combination and the holder of the 11 Madison Avenue Companion Loan designated as Note A-3-C2. On December 31, 2008, Wells Fargo & Company acquired Wachovia Corporation, the owner of Wachovia Bank, National Association (“Wachovia”), and Wachovia Corporation merged with and into Wells Fargo & Company. On March 20, 2010, Wachovia merged with and into Wells Fargo. Like Wells Fargo, Wachovia acted as master servicer of securitized commercial and multifamily mortgage loans and, following the merger of the holding companies, Wells Fargo and Wachovia integrated their two servicing platforms under a senior management team that is a combination of both legacy Wells Fargo managers and legacy Wachovia managers.
The principal west coast commercial mortgage master servicing offices of Wells Fargo are located at MAC A0227-020, 1901 Harrison Street, Oakland, California 94612. The principal east coast commercial mortgage master servicing offices of Wells Fargo are located at MAC D1086, 550 South Tryon Street, Charlotte, North Carolina 28202.
Wells Fargo has been master servicing securitized commercial and multifamily mortgage loans in excess of ten years. Wells Fargo’s primary servicing system runs on McCracken Financial Solutions software, Strategy CS. Wells Fargo reports to trustees and certificate administrators in the CREFC® format. The following table sets forth information about Wells Fargo’s portfolio of master or primary
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serviced commercial and multifamily mortgage loans (including loans in securitization transactions and loans owned by other investors) as of the dates indicated:
Commercial and | As of | As of 12/31/2013 | As of | As of |
By Approximate Number: | 35,189 | 33,354 | 33,590 | 32,950 |
By Approximate Aggregate Unpaid Principal Balance (in billions): | $428.52 | $434.37 | $474.38 | $490.94 |
Within this portfolio, as of September 30, 2015, are approximately 24,056 commercial and multifamily mortgage loans with an unpaid principal balance of approximately $403.5 billion related to commercial mortgage-backed securities or commercial real estate collateralized debt obligation securities. In addition to servicing loans related to commercial mortgage-backed securities and commercial real estate collateralized debt obligation securities, Wells Fargo also services whole loans for itself and a variety of investors. The properties securing loans in Wells Fargo’s servicing portfolio, as of September 30, 2015, were located in all 50 states, the District of Columbia, Guam, Mexico, the Bahamas, the Virgin Islands and Puerto Rico and include retail, office, multifamily, industrial, hotel and other types of income-producing properties.
In its master servicing and primary servicing activities, Wells Fargo utilizes a mortgage-servicing technology platform with multiple capabilities and reporting functions. This platform allows Wells Fargo to process mortgage servicing activities including, but not limited to: (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.
The following table sets forth information regarding principal and interest advances and servicing advances made by Wells Fargo, as master servicer, on commercial and multifamily mortgage loans included in commercial mortgage-backed securitizations. The information set forth below is the average amount of such advances outstanding over the periods indicated (expressed as a dollar amount and as a percentage of Wells Fargo’s portfolio, as of the end of each such period, of master serviced commercial and multifamily mortgage loans included in commercial mortgage-backed securitizations).
Period | Approximate Securitized | Approximate | Approximate |
Calendar Year 2012 | $ 331,765,453,800 | $ 2,133,375,220 | 0.64% |
Calendar Year 2013 | $ 346,011,017,466 | $ 2,158,219,403 | 0.62% |
Calendar Year 2014 | $ 377,947,659,331 | $ 1,750,352,607 | 0.46% |
YTD Q3 2015 | $ 391,394,556,943 | $ 1,652,387,266 | 0.42% |
* “UPB” means unpaid principal balance, “P&I” means principal and interest advances and “PPA” means property protection advances.
Wells Fargo is rated by Fitch, S&P and Morningstar as a primary servicer, a master servicer and a special servicer of commercial mortgage loans. Wells Fargo’s servicer ratings by each of these agencies are outlined below:
Fitch | S&P | Morningstar | |
Primary Servicer: | CPS1- | Strong | MOR CS1 |
Master Servicer: | CMS1- | Strong | MOR CS1 |
Special Servicer: | CSS2 | Above Average | MOR CS2 |
The long-term deposits of Wells Fargo are rated “AA-” by S&P, “Aa1” by Moody’s and “AA” by Fitch. The short-term deposits of Wells Fargo are rated “A-1+” by S&P, “P-1” by Moody’s and “F1+” by Fitch.
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Wells Fargo has developed policies, procedures and controls relating to its servicing functions to maintain compliance with applicable servicing agreements and servicing standards, including procedures for handling delinquent loans during the period prior to the occurrence of a special servicing transfer event. Wells Fargo’s master servicing policies and procedures are updated periodically to keep pace with the changes in the commercial mortgage-backed securities industry and have been generally consistent for the last three years in all material respects. The only significant changes in Wells Fargo’s policies and procedures have come in response to changes in federal or state law or investor requirements, such as updates issued by the Federal National Mortgage Association or Federal Home Loan Mortgage Corporation.
Wells Fargo may perform any of its obligations under the Pooling and Servicing Agreement through one or more third-party vendors, affiliates or subsidiaries. Notwithstanding the foregoing, the Master Servicer will remain responsible for its duties thereunder. Wells Fargo may engage third-party vendors to provide technology or process efficiencies. Wells Fargo monitors its third-party vendors in compliance with its internal procedures and applicable law. Wells Fargo has entered into contracts with third-party vendors for the following functions:
· | provision of Strategy and Strategy CS software; |
· | tracking and reporting of flood zone changes; |
· | abstracting of leasing consent requirements contained in loan documents; |
· | legal representation; |
· | assembly of data regarding buyer and seller (borrower) with respect to proposed loan assumptions and preparation of loan assumption package for review by Wells Fargo; |
· | performance of property inspections; |
· | performance of tax parcel searches based on property legal description, monitoring and reporting of delinquent taxes, and collection and payment of taxes; and |
· | Uniform Commercial Code searches and filings. |
Wells Fargo may also enter into agreements with certain firms to act as a primary servicer and to provide cashiering or non-cashiering sub-servicing on the Mortgage Loans and the Serviced Companion Loans. Wells Fargo monitors and reviews the performance of sub-servicers appointed by it. Generally, all amounts received by Wells Fargo on the Mortgage Loans and the Serviced Companion Loans will initially be deposited into a common clearing account with collections on other mortgage loans serviced by Wells Fargo and will then be allocated and transferred to the appropriate account as described in this prospectus supplement. On the day any amount is to be disbursed by Wells Fargo, that amount is transferred to a common disbursement account prior to disbursement.
Wells Fargo (in its capacity as the Master Servicer) will not have primary responsibility for custody services of original documents evidencing the Mortgage Loans and the Serviced Companion Loans. On occasion, Wells Fargo may have custody of certain of such documents as are necessary for enforcement actions involving the Mortgage Loans, the Serviced Companion Loans or otherwise. To the extent Wells Fargo performs custodial functions as a servicer, documents will be maintained in a manner consistent with the Servicing Standard.
A Wells Fargo proprietary website (www.wellsfargo.com/com/comintro) provides investors with access to investor reports for commercial mortgage-backed securitization transactions for which Wells Fargo is master servicer, and also provides borrowers with access to current and historical loan and property information for these transactions.
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Wells Fargo & Company files reports with the SEC as required under the Exchange Act. Such reports include information regarding Wells Fargo and may be obtained at the website maintained by the SEC at www.sec.gov.
There are no legal proceedings pending against Wells Fargo, or to which any property of Wells Fargo is subject, that are material to the Certificateholders, nor does Wells Fargo have actual knowledge of any proceedings of this type contemplated by governmental authorities.
The master servicer will enter into one or more agreements with the Mortgage Loan Sellers to purchase the master servicing rights to the related Mortgage Loans and the primary servicing rights with respect to certain of the related Mortgage Loans (other than any Non-Serviced Mortgage Loan) and Serviced Companion Loans and/or the right to be appointed as the master servicer or primary servicer, as the case may be, with respect to such Mortgage Loans.
Pursuant to certain interim servicing agreements between Wells Fargo and GACC or certain of its affiliates, Wells Fargo acts as interim servicer with respect to certain mortgage loans owned by GACC or those affiliates from time to time, which may include, prior to their inclusion in the Issuing Entity, some or all of the GACC Mortgage Loans.
Pursuant to certain interim servicing agreements between Wells Fargo and CCRE or certain of its affiliates, Wells Fargo acts as interim servicer with respect to certain mortgage loans owned by CCRE or those affiliates from time to time, which may include, prior to their inclusion in the Issuing Entity, some or all of the CCRE Mortgage Loans.
Pursuant to certain interim servicing agreements between Wells Fargo and JLC or certain of its affiliates, Wells Fargo acts as interim servicer with respect to certain mortgage loans owned by JLC or those affiliates from time to time, which may include, prior to their inclusion in the Issuing Entity, some or all of the JLC Mortgage Loans.
Wells Fargo is the purchaser under a repurchase agreement with LCF, or with a wholly-owned subsidiary or affiliate of LCF, for the purpose of providing short term warehousing of mortgage loans originated or acquired by LCF. Pursuant to certain interim servicing agreements between Wells Fargo and LCF or certain of its affiliates, Wells Fargo acts as interim servicer with respect to certain mortgage loans owned by LCF or those affiliates from time to time, which may include, prior to their inclusion in the Issuing Entity, some or all of the LCF Mortgage Loans.
Wells Fargo expects to enter into a limited servicing agreement with Berkeley Point pursuant to which Berkeley Point is expected to assume certain limited subservicing duties with respect to some or all of the CCRE Mortgage Loans.
Wells Fargo expects to enter into a primary servicing agreement with Berkeley Point pursuant to which Berkeley Point is expected to act as primary servicer with respect to some of the CCRE Mortgage Loans.
The foregoing information concerning information under this heading “—The Master Servicer” has been provided by Wells Fargo.
The Special Servicer
LNR Partners, LLC (“LNR Partners”), a Florida limited liability company and a subsidiary of LNR Property LLC (“LNR”), a Delaware limited liability company, will initially be appointed as the special servicer for each Mortgage Loan (other than Non-Serviced Mortgage Loans and Excluded Special Servicer Mortgage Loans) and Serviced Loan Combination to be deposited into the issuing entity (the “Special Servicer”). The principal executive offices of LNR Partners are located at 1601 Washington Avenue, Suite 700, Miami Beach, Florida 33139 and its telephone number is (305) 695-5600.
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LNR through its subsidiaries, affiliates and joint ventures, is involved in the real estate finance, management and development business and engages in, among other activities:
· | acquiring, developing, repositioning, managing and selling commercial and multifamily residential real estate properties, |
· | investing in high-yielding real estate loans, and |
· | investing in, and managing as special servicer, unrated and non-investment grade rated commercial mortgage backed securities. |
LNR Partners and its affiliates have substantial experience in working out loans and in performing the other obligations of the special servicer as more particularly described in the Pooling and Servicing Agreement, including, but not limited to, processing borrower requests for lender consent to assumptions, leases, easements, partial releases and expansion and/or redevelopment of the mortgaged properties. LNR Partners and its affiliates have been engaged in the special servicing of commercial real estate assets for over 22 years. The number of CMBS pools specially serviced by LNR Partners and its affiliates has increased from 46 in December 1998 to 156 as of September 30, 2015. More specifically, LNR Partners (and its predecessors in interest) acted as special servicer with respect to: (a) 84 domestic CMBS pools as of December 31, 2001, with a then current face value in excess of $53 billion; (b) 101 domestic CMBS pools as of December 31, 2002, with a then current face value in excess of $67 billion; (c) 113 domestic CMBS pools as of December 31, 2003, with a then current face value in excess of $79 billion; (d) 134 domestic CMBS pools as of December 31, 2004, with a then current face value in excess of $111 billion; (e) 142 domestic CMBS pools as of December 31, 2005, with a then current face value in excess of $148 billion; (f) 143 domestic CMBS pools as of December 31, 2006, with a then current face value in excess of $201 billion; (g) 143 domestic CMBS pools as of December 31, 2007 with a then current face value in excess of $228 billion; (h) 138 domestic CMBS pools as of December 31, 2008 with a then current face value in excess of $210 billion; (i) 136 domestic CMBS pools as of December 31, 2009 with a then current face value in excess of $191 billion; (j) 144 domestic CMBS pools as of December 31, 2010 with a then current face value in excess of $201 billion; (k) 140 domestic CMBS pools as of December 31, 2011 with a then current face value in excess of $176 billion; (l) 131 domestic CMBS pools as of December 31, 2012 with a then current face value in excess of $136 billion; (m) 141 domestic CMBS pools as of December 31, 2013 with a then current face value in excess of $133 billion; (n) 152 domestic CMBS pools as of December 31, 2014 with a then current face value in excess of $135 billion; and (o) 156 domestic CMBS pools as of September 30, 2015 with a then current face value in excess of $118 billion. As of September 30, 2015, LNR Partners has resolved approximately $61.8 billion of U.S. commercial and multifamily loans over the past 22 years, including approximately $1.1 billion of U.S. commercial and multifamily mortgage loans during 2001, $1.9 billion of U.S. commercial and multifamily mortgage loans during 2002, $1.5 billion of U.S. commercial and multifamily mortgage loans during 2003, $2.1 billion of U.S. commercial and multifamily mortgage loans during 2004, $2.4 billion of U.S. commercial and multifamily mortgage loans during 2005, $0.9 billion of U.S. commercial and multifamily mortgage loans during 2006, $1.4 billion of U.S. commercial and multifamily mortgage loans during 2007, $1.0 billion of U.S. commercial and multifamily mortgage loans during 2008, $1.2 billion of U.S. commercial and multifamily mortgage loans during 2009, $7.7 billion of U.S. commercial and multifamily mortgage loans during 2010, $10.9 billion of U.S. commercial and multifamily mortgage loans during 2011, $11.7 billion of U.S. commercial and multifamily mortgage loans during 2012, $6.5 billion of U.S. commercial and multifamily mortgage loans during 2013; $6.3 billion of U.S. commercial and multifamily mortgage loans during 2014 and $4.2 billion of U.S. commercial and multifamily mortgage loans as of the third quarter of 2015.
LNR or one of its affiliates generally seeks investments where it has the right to appoint LNR Partners as the special servicer. LNR Partners and its affiliates have regional offices located across the country in Florida, Georgia, Massachusetts, California, New York and North Carolina and in England and Germany. As of September 30, 2015, LNR Partners had approximately 185 employees responsible for the special servicing of commercial real estate assets. As of September 30, 2015, LNR Partners and its affiliates specially service a portfolio, which included approximately 8,650 assets across the United States and
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various international properties with a then current face value of approximately $118.3 billion, all of which are commercial real estate assets. Those commercial real estate assets include mortgage loans secured by the same types of income producing properties as secure the Mortgage Loans backing the Certificates. Accordingly, the assets of LNR Partners and 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. LNR Partners does not service any assets other than commercial real estate assets.
LNR Partners maintains internal and external watch lists, corresponds with master servicers on a monthly basis and conducts overall deal surveillance and shadow servicing. LNR Partners has developed distinct strategies and procedures for working with borrowers on problem loans (caused by delinquencies, bankruptcies or other breaches of the mortgage loan documents) designed to maximize value from the assets for the benefit of the 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 pay-offs, and borrower negotiation or workout in accordance with the applicable servicing standard. Generally, four basic factors are considered by LNR Partners as part of its analysis and determination of what strategies and procedures to utilize in connection with problem loans. They are (i) the condition and type of mortgaged property, (ii) the borrower, (iii) the jurisdiction in which the mortgaged property is located and (iv) the actual terms, conditions and provisions of the underlying mortgage loan documents. After each of these items is evaluated and considered, LNR Partners’ strategy is guided by the servicing standard and all relevant provisions of the applicable pooling and servicing agreement pertaining to specially serviced and REO mortgage loans.
LNR Partners has the highest ratings afforded to special servicers by Standard & Poor’s Rating Services and is rated “CSS1-” by Fitch.
There have not been, during the past three years, any material changes to the policies or procedures of LNR Partners in the servicing function it will perform under the Pooling and Servicing Agreement for assets of the same type included in this securitization transaction. LNR Partners has not engaged, and currently does not have any plans to engage, any sub-servicers to perform on its behalf any of its duties with respect to this securitization transaction. LNR Partners 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, will not have any material impact on the Mortgage Pool performance or the performance of the Certificates. Generally, LNR Partners’ servicing functions under pooling and servicing agreements do not include collection on the pool assets, however LNR Partners does maintain certain operating accounts with respect to REO mortgage loans in accordance with the terms of the applicable pooling and servicing agreements and consistent with the servicing standard set forth in each of such pooling and servicing agreements. LNR Partners does not have any material advancing obligations with respect to the CMBS pools as to which it acts as special servicer. Generally, LNR Partners has the right, but not the obligation, to make property related servicing advances in emergency situations with respect to CMBS pools as to which it acts as special servicer.
LNR Partners will not have primary responsibility for custody services of original documents evidencing the Mortgage Loans. On occasion, LNR Partners may have custody of certain of such documents as necessary for enforcement actions involving particular Mortgage Loans or otherwise. To the extent that LNR Partners has custody of any such documents, such documents will be maintained in a manner consistent with the Servicing Standard.
No securitization transaction involving commercial or multifamily mortgage loans in which LNR Partners was acting as special servicer has experienced an event of default as a result of any action or inaction by LNR Partners as special servicer. LNR Partners has not been terminated as servicer in a commercial mortgage loan securitization, either due to a servicing default or to application of a servicing performance test or trigger. In addition, there has been no previous disclosure of material noncompliance with servicing criteria by LNR Partners with respect to any other securitization transaction involving commercial or multifamily mortgage loans in which LNR Partners was acting as special servicer.
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There are, to the actual current knowledge of LNR Partners, no special or unique factors of a material nature involved in special servicing the particular types of assets included in the subject securitization, as compared to the types of assets specially serviced by LNR Partners in other commercial mortgage backed securitization pools generally, for which LNR Partners has developed processes and procedures which materially differ from the processes and procedures employed by LNR Partners in connection with its special servicing of commercial mortgaged backed securitization pools generally.
There are currently no legal proceedings pending, and no legal proceedings known to be contemplated, by governmental authorities, against LNR Partners or of which any of its property is the subject, that are material to the Certificateholders.
LNR Partners is not an affiliate of the Depositor, the Underwriters, the Issuing Entity, the Master Servicer, the Trustee, the Certificate Administrator, the Operating Advisor, the Sponsors, or any Originator. LNR Partners, however, is an affiliate of LNR Securities Holdings, LLC, which entity is expected to purchase an approximately 60.0% interest in each of the Class X-D, Class X-E, Class X-F, Class F, Class G, Class H, Class J and Class V Certificates on the Closing Date.
Except as disclosed in this prospectus supplement and except for LNR Partners acting as a Special Servicer for this securitization transaction and an affiliate of LNR Partners purchasing an approximately 60.0% interest in each of the Class X-D, Class X-E, Class X-F, Class F, Class G, Class H, Class J and Class V Certificates and appointing itself as the initial Directing Holder, there are no specific relationships that are material involving or relating to this securitization transaction or the securitized mortgage loans between LNR Partners or any of its affiliates, on the one hand, and the Depositor, the Issuing Entity, the Sponsors, the Trustee, the Certificate Administrator, any Originator, any significant obligor, the Master Servicer or the Operating Advisor, on the other hand, that currently exist or that existed during the past two years. In addition, except as otherwise disclosed in this prospectus supplement, 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 this securitization transaction - between LNR Partners or any of its affiliates, on the one hand, and the Depositor, the Issuing Entity, the Sponsors, the Trustee, the Certificate Administrator, any Originator, any significant obligor, any Master Servicer or the Operating Advisor, on the other hand, that currently exist or that existed during the past two years and that are material to an investor’s understanding of the Certificates.
The foregoing information set forth under this sub-heading “The Special Servicer” regarding LNR Partners has been provided by LNR Partners.
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 prospectus supplement).
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 prospectus supplement.
Replacement of the Special Servicer
The Special Servicer may be removed with respect to each Mortgage Loan (other than Non-Serviced Mortgage Loans, Servicing Shift Mortgage Loans and Excluded Mortgage Loans) and Serviced Loan Combination (other than Servicing Shift Loan Combinations) serviced by it, and a successor Special Servicer appointed, at any time, as follows:
(a) if a Control Termination Event has not occurred (or has occurred, but is no longer continuing), the Special Servicer may be removed (other than with respect to Servicing Shift Mortgage Loans and Excluded Mortgage Loans) at the direction of the applicable Directing Holder (i) for cause at any time and (ii) without cause if either (A) LNR Partners, LLC or its affiliate is no longer
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the Special Servicer or (B) LNR Securities Holdings, LLC or its affiliate owns less than 15% of the then Controlling Class of Certificates;
(b) 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; and
(c) 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.
Notwithstanding the foregoing, if the Special Servicer obtains knowledge that it has become 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, (1) 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 or (2) if no Controlling Class Certificateholder is not an Excluded Controlling Class Holder, then the Excluded Special Servicer will be appointed pursuant to the following paragraph below. 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. The resigning Special Servicer will not have any liability for the identity or actions of the newly appointed Excluded Special Servicer, and will, absent negligence, willful misconduct or bad faith, be indemnified by the Issuing Entity for any loss, liability or expense incurred in connection with any legal action relating to this transaction resulting solely from the identity or actions of such Excluded Special Servicer.
If at any time a Special Servicer has knowledge that it is no longer a Borrower Party (including, without limitation, as a result of the related Mortgaged Property becoming REO Property) with respect to an Excluded Special Servicer Mortgage Loan, (1) the related Excluded Special Servicer will be required
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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 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.
The procedures for removing the Special Servicer (other than with respect to a Servicing Shift Loan Combination) 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 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 Non-Serviced Mortgage Loans and Servicing Shift Mortgage Loans) and Serviced Loan Combination (other than Servicing Shift Loan Combinations), after the occurrence 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 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 (provided, that the Operating Advisor will not be permitted to recommend the replacement of the Special Servicer for any Loan Combination so long as the holder of the related Companion Loan is the Loan Specific Directing Holder under the related Intercreditor Agreement); 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 Special Servicer will have the opportunity to respond and deliver its own report to the Certificate Administrator, which will be required to post the report to its internet website and, if applicable, the Special Servicer will be required to deliver such report to any
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related Serviced Companion Loan holder. 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 (i) 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 and (ii) promptly notify such outgoing Special Servicer of the effective date of such termination, provided that if such written direction is not provided within 180 days of notice from the Certificate Administrator of the request for a vote to terminate and replace the Special Servicer, then such written direction shall have no force and effect. 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) the Operating Advisor’s 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. 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.
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 prospectus supplement.
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 prospectus supplement.
“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.
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The Primary Servicer
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 Loan identified on Annex A-1 to this prospectus supplement as Landings Shops and Offices, representing 0.9% 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 this mortgage loan. In addition, with respect to 10 mortgage loans secured by mortgaged properties representing approximately 15.6% 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 current special servicer ratings of “CSS3+” from Fitch and Average by S&P.
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 five Freddie Mac K-Series securitizations, the first in 2009, one in each of 2013 and 2014, and two in 2015. Berkeley Point has offices located in Bethesda, Maryland, Boston, Massachusetts, Santa Monica, California, Irvine, California, Columbus, Ohio, Dallas, Texas, Brentwood, Tennessee, Seattle, Washington and St. Louis, Missouri.
As of September 30, 2015, Berkeley Point’s primary servicing portfolio was comprised of 1783 loans with an aggregate outstanding principal balance of approximately $30.090 billion, of which Berkeley Point is the primary servicer through sub-servicing agreements with master servicers on 70 Freddie Mac K-Series securitizations for 220 loans with an approximate aggregate outstanding principal balance of approximately $5.26 billion, and 26 commercial mortgage loans with an aggregate outstanding principal balance of approximately $1.080 billion in other CMBS securitizations.
As of September 30, 2015, Berkeley Point had 59 personnel involved in the servicing and asset management of commercial real estate loans and CMBS pools, of which 52 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 | As of | As of | As of | |
By Number | 33 pools (95 loans) | 46 pools (122 loans) | 67 pools (177 loans) | 83 pools (246 loans) | |
Primary Serviced Portfolio By Approximate Aggregate Unpaid Principal Balance | $2.2 billion | $3.1 billion | $4.842 billion | $6.334 billion |
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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-LC23 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-LC23 pooling and servicing agreement nor any material impact on the mortgage pool performance or the performance of the series COMM 2015-LC23 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. Other than its relationship with CCRE Lending and CF&Co. (and indirectly any relationships of those two entities disclosed elsewhere in this prospectus supplement), 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-LC23 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.
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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 1 mortgage loan, representing approximately 0.9% of the outstanding pool balance as of the cut-off date, which such mortgage loan is to be transferred to the depositor by CCRE (the “BPC Primary Serviced Mortgage Loan”). Accordingly, Wells Fargo, as master servicer, and Berkeley Point, as primary servicer, will enter into a primary servicing agreement dated as of November 1, 2015 (the “BPC Primary Servicing Agreement”). The primary servicing of such BPC Primary Serviced Mortgage 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 BPC Primary Serviced Mortgage 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.
Summary of Certain Primary Servicing Duties. With respect to the BPC Primary Serviced Mortgage 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 duties will include:
· | maintaining the servicing file and releasing files in accordance with the Pooling and Servicing Agreement and the BPC Primary Servicing Agreement, |
· | within five (5) business days of receipt of a repurchase communication, reporting any such repurchase communication to the master servicer and forwarding a copy of such repurchase communication to the master servicer and such information in its possession reasonably requested by 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 collection account and applicable escrow and reserve accounts (consistent with the requirements of the Pooling and Servicing Agreement) to hold such collections, |
· | remitting to the master servicer on a timely basis monthly payments less any primary servicing fees, escrow and reserve payments and payments in the nature of additional servicing compensation due to Berkeley Point, as primary servicer, |
· | preparing such reports, including a collection report, monthly remittance report, various CREFC® reports and such other reports as reasonably requested by the master servicer from time to time, |
· | collecting monthly and quarterly borrower reports, income statements and rent rolls, |
· | performing inspections of the related mortgaged property at the frequency required of the master servicer under the Pooling and Servicing Agreement and providing inspection reports to the master servicer, |
· | monitoring borrower insurance obligations on such loan 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 and performing certain duties of the master servicer with respect to such borrower request or transaction; provided, |
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however, that Berkeley Point will not approve or consummate any borrower request or transaction without confirming that the master servicer and the special servicer have mutually agreed that the master servicer shall process such request and obtaining the prior written consent of the master servicer, |
· | promptly notifying master servicer of any defaults under the BPC Primary Serviced Mortgage 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. |
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 BPC Primary Serviced Mortgage 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 such action if taken may result in the imposition of a tax on any portion of the Issuing Entity 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 Issuing Entity 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.
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 or Special Servicer Decisions or take 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 will be subject to the consent of the special servicer and the special servicer will process such request unless mutually agreed by the special servicer and the master servicer that the master servicer shall process such request. The master servicer will request any such approvals or Rating Agency 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 BPC Primary Serviced Mortgage Loan under the Pooling and Servicing Agreement. Berkeley Point is not entitled to any Prepayment Interest Excess, default interest, or other amounts not specifically set forth in the BPC Primary Servicing Agreement. 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 BPC Primary Serviced
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Mortgage Loan, as additional primary servicing compensation (the “Additional Primary Servicing Compensation” ), the following:
· | 50% of the master servicer’s share of late fees to the extent Berkeley Point is performing the related collection work and to the extent not required to offset with respect to the BPC Primary Serviced Mortgage Loan under the Pooling and Servicing Agreement (1) Advances, including interest on such Advances or (2) additional trust fund expenses; |
· | 100% of the master servicer’s share of any charges for beneficiary statements, demand fees and amounts collected for checks returned for insufficient funds; |
· | 100% of the master servicer’s share of any assumption application fees to the extent Berkeley Point performs the related assumption; |
· | 50% of the master servicer’s share of any assumption fees, modification fees, consent fees, and defeasance fees to the extent such action was performed by Berkeley Point; 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 not be entitled to any additional primary servicing compensation in the form of fees earned with respect to the processing of any Major Decision or Special Servicer Decision performed by the Special Servicer; provided, however, if Berkeley Point processes any Special Servicer Decision following approval of such decision by the Special Servicer, Berkeley Point will be entitled to the applicable fee as described in the bullets above.
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 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 Servicing Standard) 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 by the master servicer against any loss, liability or expense (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 resulting from the master servicer’s willful misconduct, bad faith, fraud, or negligence in the performance of duties under the BPC Primary Servicing Agreement or negligent disregard of its obligations under the BPC Primary Servicing Agreement. The BPC Parties will be indemnified by the Issuing Entity, to the extent provided in the Pooling and Servicing Agreement, against any 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, other than any Losses (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) that are 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 duties under the BPC Primary Servicing Agreement or negligent disregard of obligations and duties under the BPC Primary Servicing Agreement; provided, however, that the indemnification described in this sentence will be strictly limited to any actual amount of indemnification received by the
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master servicer under the Pooling and Servicing Agreement as a result of pursuing the Trust on behalf of 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, the Pooling and Servicing Agreement or the Certificates by reason of (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 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 and duties.
Resignation. The BPC Primary Servicing Agreement will provide that Berkeley Point may not resign from the obligations and duties imposed on it thereunder except by mutual consent of Berkeley Point and the Master Servicer or upon the determination that its duties thereunder are no longer permissible under applicable law and such incapacity cannot be cured by Berkeley Point.
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); |
· | the master servicer elects (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) to terminate pursuant to the final two bullets listed under BPC Primary Servicer Termination Events below; |
· | upon resignation by Berkeley Point; |
· | upon the later of the final payment or other liquidation of the BPC Primary Serviced Mortgage Loan and remittance of all funds thereunder or if the BPC Primary Serviced Mortgage Loan becomes an REO Mortgage Loan or the related Mortgaged Property becomes an REO Property; |
· | by mutual consent of Berkeley Point and the master servicer in writing; |
· | upon termination of the Pooling and Servicing Agreement; |
· | in the event the BPC Primary Serviced Mortgage Loan becomes a specially serviced loan or is substituted, purchased or repurchased pursuant to the Pooling and Servicing Agreement; |
· | at the option of the purchaser of the BPC Primary Serviced Mortgage Loan pursuant to the terms of the Pooling and Servicing Agreement; 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 (i) to make a required deposit to the accounts maintained by Berkeley Point on the day and by the time such deposit was first required to be made, or (ii) to remit to the master servicer any amount required to be so deposited or remitted by Berkeley Point, which failure is not cured within 1 Business Day after such deposit or remittance is due; |
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· | any failure on the part of Berkeley Point to deliver to the master servicer certain certificates or reports specified in the BPC Primary Servicing Agreement subject to cure periods specified in the BPC Primary Servicing Agreement; |
· | any failure by Berkeley Point duly to observe or perform in any material respect any of its other covenants or obligations under the BPC Primary Servicing Agreement, which failure continues unremedied for 25 days (40 days in the case of failure to pay the premium for any insurance policy required to be force placed Berkeley Point pursuant to BPC Primary 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 Berkeley Point by the master servicer; provided, if that failure is capable of being cured and Berkeley Point is diligently pursuing that cure, that 25- or 40-day period, as applicable, will be extended an additional 30 days; |
· | any breach on the part of Berkeley Point of any representation or warranty in the BPC Primary Servicing Agreement which materially and adversely affects the interests of the master servicer or any Class of Certificateholders 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 Berkeley Point, by the master servicer; provided, if that breach is capable of being cured and Berkeley Point is diligently pursuing that cure, that 30-day period will be extended an additional 30 days; |
· | certain events of insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings in respect of or relating to Berkeley Point and certain actions by or on behalf Berkeley Point indicating its insolvency or inability to pay its obligations; |
· | any of Moody’s or KBRA 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 or KBRA, as applicable, within 60 days of such event) 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; |
· | Berkeley Point ceases to have a commercial primary servicer rating of at least “CPS3” from Fitch and that rating is not reinstated within 60 days of delisting; |
· | the net worth of Berkeley Point, determined in accordance with generally accepted accounting principles shall decline to less than $2 million; |
· | 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; |
· | Berkeley Point shall assign or transfer or attempt to assign or transfer all or part of its rights and obligations under the BPC Primary Servicing Agreement except as permitted by the BPC Primary Servicing Agreement; |
· | (1) so long as the Issuing Entity is subject to Exchange Act reporting requirements, any failure by Berkeley Point to deliver any annual certification, assessment of compliance with certain servicing criteria, any accountant’s attestation report or any other Exchange Act reporting items that the Primary Servicer is required by this Agreement to deliver to the Depositor, the Certificate Administrator or the master servicer (after any applicable grace period) and (2) 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 |
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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 be required to cooperate fully with the master servicer to transition primary servicing of the BPC Primary Serviced Mortgage Loan to the master servicer or its designee.
The foregoing information set forth in this“—Summary of Berkeley Point Primary Servicing Agreement” section has been provided by Wells Fargo.
THE TRUSTEE
Wilmington Trust, National Association (“WTNA”) (formerly called M&T Bank, National Association) will act as trustee (in such capacity, the “Trustee”) on behalf of the Certificateholders pursuant to the Trust and Servicing Agreement. WTNA is a national banking association with trust powers incorporated in 1995. WTNA’s principal place of business is located at 1100 North Market Street, Wilmington, Delaware 19890. WTNA is an affiliate of Wilmington Trust Company and both WTNA and Wilmington Trust Company are subsidiaries of Wilmington Trust Corporation. Since 1998, Wilmington Trust Company has served as trustee in numerous asset-backed securities transactions. As of June 30, 2015, WTNA served as trustee on over 1,500 mortgage-backed related securities transactions having an aggregate original principal balance in excess of $100 billion, of which approximately 113 transactions were commercial mortgage-backed securities transactions having an aggregate original principal balance of approximately $70 billion.
The parties to this transaction may maintain banking and other commercial relationships with WTNA and its affiliates. In its capacity as trustee on commercial mortgage securitizations, WTNA and its affiliates are generally required to make an advance if the related servicer or special servicer fails to make a required advance. In the past three years, WTNA and its affiliates have not been required to make an advance on a commercial mortgage-backed securities transaction.
WTNA is subject to various legal proceedings that arise from time to time in the ordinary course of business. WTNA does not believe that the ultimate resolution of any of these proceedings will have a material adverse effect on its services as Trustee.
The foregoing information concerning the Trustee has been provided by WTNA. WTNA 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 Trustee), the Certificates, the Mortgage Loans, this prospectus supplement (other than as to the accuracy of the information provided by the Trustee) or any related documents and will not be accountable for the use or application by or on behalf of the Master Servicer, any Special Servicer or the Certificate Administrator of any funds paid to the Master Servicer, any Special Servicer or the Certificate Administrator 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, any Special Servicer or the Certificate Administrator.
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
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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 (1) “A2” by Moody’s (or in the case of WTNA, a long term unsecured debt rating of no less than “Baa2” by Moody’s and the Master Servicer maintains a long term unsecured debt rating of “A2” by Moody’s) and (2) “A-” by Fitch, or (b) 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 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 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
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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 (of not more than 60 days) 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 Consultation Termination Event has occurred and is continuing, acceptable to the initial Directing Holder (or, in the event that there is a successor Directing Holder that is not an entity that was a controlling class certificateholder as of the Closing Date, the Master Servicer, and otherwise, such successor Directing Holder). If no successor Trustee has accepted an 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.
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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 prospectus supplement.
THE CERTIFICATE ADMINISTRATOR AND CUSTODIAN
Wells Fargo Bank, National Association (“Wells Fargo”), will act as 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.
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. 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.
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 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
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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 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 prospectus supplement (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.
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 whose unsecured long-term debt is rated at least (1) “A2” by Moody’s and (2) “A-” 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.
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 prospectus supplement (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
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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.
In addition, certain provisions regarding the obligations and duties of the Certificate Administrator, 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 prospectus supplement.
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
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at a rate (the “Trustee/Certificate Administrator Fee Rate”), equal to 0.0047% 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 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, for which custodial arrangements will be governed by the related pooling and servicing agreement). 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.
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 Non-Serviced Mortgage Loans and Servicing Shift Mortgage Loans) and Serviced Loan Combination (other than Servicing Shift Loan Combinations). 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,
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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 prospectus supplement 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 prospectus supplement. 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 prospectus supplement.
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, the Depositor, and Deutsche Bank Securities Inc., an Underwriter, are affiliates of each other.
CCRE Lending, a Sponsor and a Mortgage Loan Seller, Cantor Fitzgerald & Co., an Underwriter, and Berkeley Point Capital LLC, a primary servicer, are affiliates of each other.
JLC, a Sponsor and a Mortgage Loan Seller, and Jefferies LLC, and Underwriter, are affiliates of each other.
Deutsche Bank AG, Cayman Islands Branch (an affiliate of the Depositor, GACC, a Sponsor and a Mortgage Loan Seller, and Deutsche Bank Securities Inc., an Underwriter), Wells Fargo and certain other third party lenders provide warehouse financing to certain affiliates of LCF through various repurchase facilities. Ladder Holdings, TRS LLLP and REIT LLLP guarantee certain obligations under those repurchase facilities of the LCF affiliates that are the primary obligors thereunder. Some or all of the Mortgage Loans that LCF will transfer to the Depositor are (or are expected to be prior to the Closing Date) subject to those repurchase facilities. Proceeds received by LCF in connection with the contribution of Mortgage Loans to this securitization transaction will be applied, among other things, to reacquire the financed Mortgage Loans and make payments to the repurchase agreement counterparties. As of November 10, 2015, Deutsche Bank AG, Cayman Islands Branch was the repurchase agreement counterparty with respect to 3 LCF Mortgage Loan (including the Equity Inns Portfolio Mortgage Loan which was co-originated by LCF and GACC), representing approximately 15.4% of the Initial Outstanding Pool Balance, and Wells Fargo was the repurchase counterparty with respect to 3 LCF Mortgage Loans, representing approximately 3.7% of the Initial Outstanding Pool Balance (except that the number and
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dollar amount of LCF Mortgage Loans subject to those repurchase facilities may increase or decrease prior to the issuance of the Certificates).
Deutsche Bank AG, Cayman Islands Branch and certain other third party lenders provide warehouse financing to the JLC Financing Affiliates through various repurchase facilities. Some or all of the JLC Mortgage Loans are (or are expected to be prior to the Closing Date) subject to those repurchase facilities. Proceeds received by JLC in connection with the contribution of Mortgage Loans to this securitization transaction will be applied, among other things, to reacquire the warehoused JLC Mortgage Loans and make payments to the repurchase agreement counterparties. As of October 22, 2015, Deutsche Bank AG, Cayman Islands Branch is the repurchase agreement counterparty with respect to 1 JLC Mortgage Loan, representing approximately 2.2% of the Initial Outstanding Pool Balance (except that the number and dollar amount of JLC Mortgage Loans subject to that repurchase facility may increase or decrease prior to the issuance of the Certificates).
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, 4 of the GACC Mortgage Loans, representing approximately 5.0% of the Initial Outstanding Pool Balance, as well as the Equity Inns Portfolio Mortgage Loan, representing 8.3% of the Initial Outstanding Pool Balance, which was co-originated by LCF and GACC.
Pursuant to certain interim servicing agreements between LCF and/or 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 of the mortgage loans owned from time to time by LCF and those affiliates thereof, including, prior to their inclusion in the Issuing Entity, all of the LCF Mortgage Loans, representing approximately 25.6% of the Initial Outstanding Pool Balance, as well as the Equity Inns Portfolio Mortgage Loan, representing 8.3% of the Initial Outstanding Pool Balance, which was co-originated by LCF and GACC, provided that in the case of the 40 Wall Street Mortgage Loan, it has been doing so as a sub-servicer. Wells Fargo also acts as interim custodian of the loan files (or, in the case of each of the Harvey Building Products Portfolio Mortgage Loan and the 40 Wall Street Mortgage Loan, just the related promissory note) for all of the LCF Mortgage Loans.
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 of the mortgage loans, including, prior to their inclusion in the Issuing Entity, 9 of the CCRE Mortgage Loans, representing approximately 12.2% of the Initial Outstanding Pool Balance.
Pursuant to certain interim servicing agreements between JLC 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 of the mortgage loans, including, prior to their inclusion in the Issuing Entity, all of the JLC Mortgage Loans, representing approximately 11.8% of the Initial Outstanding Pool Balance.
Pursuant to a limited subservicing agreement between Berkeley Point, on the one hand, and Wells Fargo, 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 10 of the CCRE Mortgage Loans, representing approximately 15.6% 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 Wells Fargo, on the other hand, Berkeley Point will act as primary servicer with respect to 1 of the CCRE Mortgage Loans, representing approximately 0.9% of the Initial Outstanding Pool Balance, and will receive a fee equal to 0.0700%per annum for such Mortgage Loan.
LNR Partners, LLC, the Special Servicer, assisted LNR Securities Holdings, LLC or its affiliate with due diligence relating to the mortgage loans to be included in the Mortgage Pool.
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LNR Partners, LLC, the Special Servicer, is an affiliate of LNR Securities Holdings, LLC, the entity expected to purchase an approximately 60.0% interest in each of the Class X-D, Class X-E, Class X-F, Class F, Class G, Class H, Class J and Class V Certificates and is expected to appoint itself as the initial directing holder with respect to each Mortgage Loan (other than Non-Serviced Mortgage Loans and Servicing Shift Mortgage Loans) and Serviced Loan Combination (other than Servicing Shift Loan Combinations). LNR Securities Holdings, LLC and/or its affiliates, which may include LNR Partners, LLC, the Special Servicer, assisted entities managed by Seer Capital Partners Master Fund, L.P., or one of its affiliates, which entities are expected to purchase an approximately 40.0% interest in each of the Class X-D, Class X-E, Class X-F, Class F, Class G, Class H, Class J and Class V Certificates (and may purchase additional Certificates), with due diligence relating to the Mortgage Loans included in the mortgage pool.
GACC is expected to hold, as of the Closing Date, (i) the Equity Inns Portfolio Note A-4-B, Note A-5 and Note A-6 companion loans, and (ii) the 32 Avenue of the Americas Note A-5 companion loan.
LCF is expected to hold, as of the Closing Date, (i) the Equity Inns Portfolio Note A-1-B, Note A-2-A, Note A-2-B and Note A-3 companion loans, and (ii) the Harvey Building Products Portfolio Note A-2A, Note A-2B and Note A-3 companion loans.
CCRE is expected to hold, as of the Closing Date, the Springfield Mall Note A-2 companion loan.
LCF, a Sponsor and a Mortgage Loan Seller, is an indirect wholly-owned subsidiary of Ladder Holdings and an affiliate of TRS LLLP and REIT LLLP. Ladder Holdings, TRS LLLP and REIT LLLP will agree, pursuant to the related mortgage loan purchase agreement, to guarantee payment in connection with the performance of LCF’s obligations to repurchase or replace its respective Mortgage Loans for material breaches of representations and warranties or material loan document defects under the circumstances described under “The Sponsors, Mortgage Loan Sellers and Originators—Ladder Capital Finance LLC” in this prospectus supplement.
LCF is affiliated with the borrowers under the Mortgage Loans secured by the Mortgaged Properties identified on Annex A-1 to this prospectus supplement as Family Dollar - Rose Hill, Family Dollar – Moultrie, Family Dollar – Biscoe, Family Dollar – Rockingham and Dollar General – De Soto, collectively representing approximately 0.4% of the Initial Outstanding Pool Balance. LCF or an affiliate thereof originated each of those Mortgage Loans, and LCF is the Mortgage Loan Seller with respect to those Mortgage Loans. Those Mortgage Loans may contain provisions and terms that are more favorable to the respective borrowers thereunder than would otherwise have been the case if the lender and borrower were not affiliated, including: (i) the related loan documents permit transfers without lender’s consent by the related borrower and by or to certain affiliates of Ladder Holdings; (ii) the related loan documents permit future mezzanine financing; and (iii) in the case of the 5 Mortgage Loans secured by the mortgaged properties referred to above in this paragraph, there is no separate environmental indemnitor other than the related borrower.
LCF and/or its affiliates may acquire Certificates, either in connection with initial issuance or in the secondary market.
Wells Fargo, which is acting as the Master Servicer, Certificate Administrator and Custodian, is also a co-originator of the 11 Madison Avenue Loan Combination and the holder of the 11 Madison Avenue Companion Loan designated as Note A-3-C2, which is expected to be contributed to a future securitization. In addition, Wells Fargo is currently the WFCM 2015-LC22 Master Servicer and the WFCM 2015-LC22 Certificate Administrator under the WFCM 2015-LC22 Pooling and Servicing Agreement and the MAD 2015-11MD Certificate Administrator under the MAD 2015-11MD Trust and Servicing Agreement.
Wilmington Trust, National Association, the Trustee, is also (i) the MAD 2015-11MD Trustee and, accordingly, the current mortgagee of record with respect to the 11 Madison Avenue Loan Combination under the MAD 2015-11MD Trust and Servicing Agreement and (ii) the WFCM 2015-LC22 Trustee and,
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accordingly, the current mortgagee of record with respect to the 40 Wall Street Loan Combination under the WFCM 2015-LC22 Pooling and Servicing Agreement.
DESCRIPTION OF THE MORTGAGE POOL
General
The Issuing Entity to be created by the Depositor will consist of a pool (the “Mortgage Pool”) of 62 fixed-rate mortgage loans, which does not include any Companion Loan (each such mortgage loan, a “Mortgage Loan,” and collectively, the “Mortgage Loans”) secured by first liens on 120 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 $960,912,147 (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 November 2015 and the date of origination of such Mortgage Loan (the “Cut-off Date”) (each, a “Cut-off Date Balance”) will range from $702,000 to $80,000,000 and the average Cut-off Date Balance will be $15,498,583 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 November 2015 are timely made. All numerical information provided in this prospectus supplement with respect to the Mortgage Loans is provided on an approximate basis. All percentages of the Mortgage Pool referred to in this prospectus supplement 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 Equity Inns Portfolio Loan Combination, the Harvey Building Products Portfolio Loan Combination and the Springfield Mall 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.
The 32 Avenue of the Americas Loan Combination, a Servicing Shift Loan Combination, will initially be serviced by the Master Servicer and the Special Servicer pursuant to the Pooling and Servicing Agreement and the related Intercreditor Agreement. On and after the applicable Servicing Shift Securitization Date, the related Servicing Shift Loan Combination will be serviced by the related Servicing Shift Master Servicer and Servicing Shift Special Servicer appointed under and pursuant to the related Servicing Shift Pooling and Servicing Agreement and the related Intercreditor Agreement.
The 11 Madison Avenue Loan Combination is currently being 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.
The 40 Wall Street Loan Combination is currently being serviced by the WFCM 2015-LC22 Master Servicer and the WFCM 2015-LC22 Special Servicer pursuant to the WFCM 2015-LC22 Pooling and Servicing Agreement and the related Intercreditor Agreement.
“Companion Loan” means a Serviced Companion Loan or Non-Serviced Companion Loan, as applicable and as the context may require.
“Controlling Companion Loan” means, with respect to any Servicing Shift Loan Combination, the relatedPari Passu Companion Loan which, upon the securitization of suchPari Passu Companion Loan, servicing is expected to shift to the related Servicing Shift Pooling and Servicing Agreement entered into in connection with such securitization. JPMorgan Chase Bank, National Association is currently the holder of the “Controlling Companion Loan” with respect to the 32 Avenue of Americas Loan Combination.
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“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 (a) the holders of the related Mortgage Loan(s) and the related Subordinate Companion Loan(s) relating to the relative rights of such holders or (b) the holders of the related Mortgage Loan and the related ServicedPari Passu Companion Loan(s) orpari passuNon-Serviced Companion Loan(s) relating to the relative rights of such holders. Each of the Equity Inns Portfolio intercreditor agreement, the 32 Avenue of the Americas intercreditor agreement, the 11 Madison Avenue intercreditor agreement, the Harvey Building Products Portfolio intercreditor agreement, the Springfield Mall intercreditor agreement and the 40 Wall Street intercreditor agreement will be an “Intercreditor Agreement”, as the context may require.
“Loan Combination” means each of the Equity Inns Portfolio Loan Combination, the 32 Avenue of the Americas Loan Combination, the 11 Madison Avenue Loan Combination, the Harvey Building Products Portfolio Loan Combination, the Springfield Mall Loan Combination and the 40 Wall Street Loan Combination, as the context may require.
“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 (a) 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 or (b) subordinated in right of payment to the related Non-Serviced Mortgage Loan included in the Issuing Entity to the extent set forth in the related Intercreditor Agreement. Each of the 11 Madison Avenue Companion Loans and the 40 Wall Street Companion Loans will be Non-Serviced Companion Loans related to the Issuing Entity. On and after the applicable Servicing Shift Securitization Date, each of the 32 Avenue of the Americas Companion Loans will be a Non-Serviced Companion Loan related to the Issuing Entity. Prior to the applicable Servicing Shift Securitization Date, each of the 32 Avenue of the Americas Companion Loans will be a Serviced Companion Loan 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 two 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. Each of the 11 Madison Avenue Loan Combination and the 40 Wall Street Loan Combination will be a Non-Serviced Loan Combination related to the Issuing Entity. On and after the applicable Servicing Shift Securitization Date, the related Servicing Shift Loan Combination will be a Non-Serviced Loan Combination related to the Issuing Entity. Prior to the applicable Servicing Shift Securitization Date, the related Servicing Shift Loan Combination will be a Serviced Loan Combination.
“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. Each of the 11 Madison Avenue Mortgage Loan and the 40 Wall Street Mortgage Loan will be a Non-Serviced Mortgage Loan related to the Issuing Entity. On and after the applicable Servicing Shift Securitization Date, the related Servicing Shift Mortgage Loan will be a Non-Serviced Mortgage Loan related to the Issuing Entity.
“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, which 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 Equity Inns Portfolio Companion Loans, the 32 Avenue of the Americas Companion Loans, the 11 Madison AvenuePari Passu Companion Loans, the Harvey Building Products Portfolio Companion Loans, the Springfield Mall Companion Loan and the 40 Wall Street Companion Loans will bePari Passu Companion Loans related to the Issuing Entity.
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“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 (a) payable on apari passu basis with a Mortgage Loan included in the Issuing Entity to the extent set forth in the related Intercreditor Agreement or (ii) subordinated in right of payment to the related Mortgage Loan included in the Issuing Entity to the extent set forth in the related Intercreditor Agreement. The Equity Inns Portfolio Companion Loans, the Harvey Building Products Portfolio Companion Loans and the Springfield Mall Companion Loan will be Serviced Companion Loans related to the Issuing Entity. Prior to the applicable Servicing Shift Securitization Date, each of the 32 Avenue of the Americas Companion Loans will be a Serviced Companion Loan related to the Issuing Entity. On and after the applicable Servicing Shift Securitization Date, each of the 32 Avenue of the Americas Companion Loans will be a Non-Serviced Companion Loan related to the Issuing Entity.
“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 (a) one or more Subordinate Companion Loans not included in the Issuing Entity and/or (b) 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. Each of the Equity Inns Portfolio Loan Combination, the Harvey Building Products Portfolio Loan Combination and the Springfield Mall Loan Combination will be a Serviced Loan Combination related to the Issuing Entity. Prior to the applicable Servicing Shift Securitization Date, the 32 Avenue of the Americas Loan Combination will be a Serviced Loan Combination related to the Issuing Entity. On and after the applicable Servicing Shift Securitization Date, the 32 Avenue of the Americas Loan Combination will be a Non-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. Each of the Equity Inns Companion Loans, the Harvey Building Products Portfolio Companion Loans and the Springfield Mall Companion Loan will be ServicedPari PassuCompanion Loans related to the Issuing Entity. Prior to the applicable Servicing Shift Securitization Date, each of the 32 Avenue of the Americas Companion Loans will be a Serviced Companion Loans related to the Issuing Entity.
“Servicing Shift Loan Combination” means any Loan Combination serviced under the Pooling and Servicing Agreement as of the Closing Date, which includes the related Servicing Shift Mortgage Loan included in the Issuing Entity and one or morePari Passu Companion Loans not included in the Issuing Entity, but the servicing of which is expected to shift to the Servicing Shift Pooling and Servicing Agreement entered into in connection with the securitization of the related Controlling Companion Loan on and after the Servicing Shift Securitization Date. As of the Closing Date, the 32 Avenue of the Americas Loan Combination will be a Servicing Shift Loan Combination related to the Issuing Entity.
“Servicing Shift Mortgage Loan” means, with respect to any Servicing Shift Loan Combination, a Mortgage Loan included in the Issuing Entity that will be serviced under the Pooling and Servicing Agreement as of the Closing Date, but the servicing of which is expected to shift to the Servicing Shift Pooling and Servicing Agreement entered into to in connection with the securitization of the related Controlling Companion Loan on and after the applicable Servicing Shift Securitization Date. As of the Closing Date, the 32 Avenue of the Americas Mortgage Loan will be a Servicing Shift Mortgage Loan related to the Issuing Entity.
“Servicing Shift Pooling and Servicing Agreement” means the 32 Avenue of the Americas Pooling and Servicing Agreement.
“Servicing Shift Securitization Date” means the 32 Avenue of the Americas Note A-1 Securitization Date.
“Serviced Subordinate Companion Loan” means with respect to any Loan Combination, any related subordinated note not included in the Issuing Entity but serviced under the Pooling and Servicing Agreement, which is generally subordinated in right of payment to the related Mortgage Loan to the
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extent set forth in the related Intercreditor Agreement. As of the Closing Date, there will be no Serviced Subordinate Companion Loan related to the Issuing Entity.
“Subordinate Companion Loan” means a Serviced Subordinate Companion Loan or Non-Serviced Subordinate Companion Loan, as applicable and as the context may require.
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, including Mortgaged Properties constituting the borrower’s leasehold interest or interests in the Mortgaged Property along with the corresponding fee simple interest of the lessor in such Mortgaged Property, (ii) a leasehold estate in a portion of the mortgaged property and a fee simple estate in another portion of the mortgaged property or (iii) a leasehold or subleasehold estate in the Mortgaged Property and no Mortgage on the related fee simple estate, as set forth below:
Interest of Borrower | Number of | Aggregate Cut-off | % of Initial | ||||
Fee Simple(2) | 118 | $ | 886,351,624 | 92.2% | |||
Fee Simple/Leasehold | 1 | $ | 69,600,000 | 7.2% | |||
Leasehold | 1 | $ | 4,960,524 | 0.5% | |||
Total | 120 | $ | 960,912,147 | 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 and/or another basis deemed appropriate by the related Mortgage Loan Seller). |
(2) | May include Mortgage Loans secured by the borrower’s leasehold interest in the Mortgaged Property along with the corresponding fee interest of the 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 | Aggregate Cut-off | % of Initial | |||||
6 | 0 | 60 | $ | 878,925,662 | 91.5% | ||||
1 | 0 | 1 | $ | 70,000,000 | 7.3% | ||||
1 | 5 | 1 | $ | 11,986,486 | 1.2% |
As used in this prospectus supplement, “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. 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 prospectus supplement for information on the number of days before a payment default is an event of default under each Mortgage Loan.
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. 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, subject, in some cases, to certain generally customary non-recourse carveouts either to the borrower or the loan sponsor. 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
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property owner’s) interest in the leases, rents, issues and profits of the related Mortgaged Properties. For purposes of the information contained in this prospectus supplement, 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 under ground 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 prospectus supplement.
Significant Mortgage Loans
The following table sets forth information regarding the 10 largest Mortgage Loans in the pool, which represent, in the aggregate, approximately 51.2% 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 | U/W NCF DSCR | Cut-off Date LTV | LTV Ratio at Maturity or ARD | Cut-off Date U/W NOI Debt Yield | |||||||||
Equity Inns Portfolio(1)(2) | $ | 80,000,000 | 8.3% | 4.9600% | 59 | 2.35x | 64.4% | 64.4% | 13.3% | ||||||||
32 Avenue of the Americas(1) | $ | 70,000,000 | 7.3% | 4.8320% | 120 | 1.88x | 55.2% | 55.2% | 9.8% | ||||||||
11 Madison Avenue(1) | $ | 69,600,000 | 7.2% | 3.5602% | 118 | 3.89x | 32.5% | 32.5% | 14.3% | ||||||||
1209 DeKalb | $ | 46,000,000 | 4.8% | 4.7250% | 59 | 1.48x | 72.3% | 72.3% | 7.1% | ||||||||
Good Samaritan Medical Tower | $ | 42,700,000 | 4.4% | 4.5400% | 118 | 1.96x | 62.8% | 62.8% | 9.7% | ||||||||
Harvey Building Products Portfolio(1) | $ | 41,953,778 | 4.4% | 4.8500% | 59 | 1.96x | 53.5% | 49.3% | 12.8% | ||||||||
Beach House Hilton Head | $ | 40,000,000 | 4.2% | 4.9000% | 119 | 1.58x | 72.7% | 62.8% | 11.3% | ||||||||
Whitehall Hotel | $ | 35,944,447 | 3.7% | 4.9900% | 119 | 1.51x | 53.6% | 40.2% | 11.7% | ||||||||
611 Cowper(3) | $ | 32,914,514 | 3.4% | 4.3500% | 118 | 1.60x | 55.8% | 45.0% | 10.1% | ||||||||
Springfield Mall(1) | $ | 32,460,817 | 3.4% | 4.4485% | 119 | 1.76x | 58.0% | 46.8% | 11.1% | ||||||||
Total/Wtd. Avg. | $ | 491,573,556 | 51.2% | 4.5984% | 98 | 2.14x | 57.1% | 53.5% | 11.4% |
(1) | Each such Mortgage Loan is part of a Loan Combination and has one or morePari Passu Companion Loan(s) that are not included in the Issuing Entity. The debt service coverage ratio, LTV Ratios and debt yield for each Mortgage Loan have been calculated based on the Mortgage Loan included in the Issuing Entity and any such relatedPari Passu Companion Loan(s) not included in the Issuing Entity. In addition, in the case of the 11 Madison Avenue Mortgage Loan, representing approximately 7.2% of the Initial Outstanding Pool Balance, the debt service coverage ratio, LTV Ratios and debt yield for such Mortgage Loan has been calculated based on the Mortgage Loan included in the Issuing Entity and the relatedpari passucompanion loans not included in the issuing entity but excluding the related subordinate companion loans and mezzanine loans. |
(2) | In the case of the Equity Inns Portfolio Mortgage Loan, representing approximately 8.3% of the Initial Outstanding Pool Balance as of the cut-off date, the Cut-off Date LTV has been calculated based on the “portfolio appraised value” of $360,000,000, which reflects a premium attributed to the aggregate value of the Equity Inns Portfolio Mortgaged Properties as a whole. Based on the sum of the appraised value of each of the Equity Inns Portfolio Mortgaged Properties on an individual basis, which is $322,400,000, the Cut-off Date LTV is 72.0%. |
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(3) | In the case of the 611 Cowper Mortgage Loan, representing approximately 3.4% of the Initial Outstanding Pool Balance, the Cut-off Date LTV has been calculated based on the “as stabilized” appraised value. Based on the “as-is” appraised value of $51,800,000, the Cut-off Date LTV is 63.5%. |
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 prospectus supplement.
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, LCF, CCRE Lending and JLC (collectively, the “Mortgage Loan Sellers” or the “Sponsors”), pursuant to four separate mortgage loan purchase agreements (each, a “Mortgage Loan Purchase Agreement”), each to be dated the date of pricing of the Certificates, between the applicable Mortgage Loan Seller (and, in the case of LCF, Ladder Holdings, TRS LLP and REIT LLP) and the Depositor. See “The Sponsors,Mortgage Loan Sellers and Originators” in this prospectus supplement.
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 | Aggregate Cut-off | % of Initial | ||||
German American Capital Corporation | 17 | $ | 362,856,940 | 37.8% | |||
Ladder Capital Finance LLC | 25 | $ | 246,060,185 | 25.6% | |||
Cantor Commercial Real Estate Lending, L.P. | 11 | $ | 158,901,949 | 16.5% | |||
Jefferies LoanCore LLC | 8 | $ | 113,093,073 | 11.8% | |||
Ladder Capital Finance LLC/German American Capital Corporation(1) | 1 | $ | 80,000,000 | 8.3% | |||
Total | 62 | $ | 960,912,147 | 100.0% |
(1) | The Equity Inns Portfolio Mortgage Loan was co-originated by LCF and GACC. LCF will contribute $48.0 million of the Equity Inns Portfolio Mortgage Loan cut-off date balance and GACC will contribute $32.0 million of the Equity Inns Portfolio Mortgage Loan cut-off date balance. |
Except with respect to (i) the Equity Inns Portfolio Loan Combination, as to which GACC and LCF are each acting as a Mortgage Loan Seller with respect to its respective Note, which was co-originated by GACC and LCF, (ii) the 32 Avenue of the Americas Loan Combination, which was co-originated by GACC and JPMorgan Chase Bank, National Association, and (iii) 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 (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.
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 prospectus supplement.
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The information set forth in this prospectus supplement 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 prospectus supplement.
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 7-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 prospectus supplement, 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 prospectus supplement.
With respect to certain 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 or in connection with the breach of environmental covenants in the related mortgage loan documents or in connection with a potential environmental concern, as described under “Risk Factors—Risks Related to the Mortgage Loans—Potential Issuing Entity Liability Related to a Materially Adverse Environmental Condition” in this prospectus supplement. For additional information regarding Mortgaged Properties covered by an environmental insurance policy, see “Risk Factors—Risks Related to the Mortgage Loans—Environmental Issues at the Mortgaged Properties May Adversely Affect
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Payments on Your Certificates” in this prospectus supplement. 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 prospectus supplement.
In the case of the mortgaged property identified on Annex A-1 to this prospectus supplement as 32 Avenue of the Americas, which secures a mortgage loan representing approximately 7.3% of the outstanding pool balance as of the cut-off date, there is no environmental indemnitor other than the related borrower.
The information contained in this prospectus supplement 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 prospectus supplement.
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 7-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.
Appraisals and Market Analysis. The Mortgage Loan Sellers have informed the Depositor that, an appraisal for all of the Mortgaged Properties was performed (or an existing appraisal was updated) on behalf of the related Mortgage Loan Seller within the 7-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
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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 prospectus supplement.
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 material portion of the borrower-owned 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 borrower-owned 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 or, in the case of business interruption or certain other types of insurance, in circumstances where the related borrower does not own the improvements at the related Mortgaged Property), 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 a specified percentage (generally 200%) of the amount of insurance premium either then currently payable or payable at the time of the origination of the Mortgage Loan, as applicable, 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, earthquake, flood and other catastrophe 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 prospectus supplement as 11 Madison Avenue, which secures a Mortgage Loan representing approximately 7.2% 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 prospectus supplement.
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 prospectus supplement and the exceptions thereto on Annex G to this prospectus supplement.
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
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cases, the related borrower or tenant maintains one or more forms of insurance under blanket policies. With respect to certain of these Mortgage Loans, the related insured 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 anAdverse Impact on the Mortgaged Properties” and “Risk Factors—Risks Related to the Mortgage Loans—Risks Associated with Blanket Insurance Policies or Self-Insurance” in this prospectus supplement.
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”, “—Ladder Capital Finance LLC—LCF’s UnderwritingStandards,” “—Cantor Commercial Real Estate Lending,L.P.—CCRE Lending’s Underwriting Standards” or “—Jefferies LoanCore LLC—JLC’s Underwriting Standards” as applicable, in this prospectus supplement.
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 | Companion Loan Cut-off Date | Loan | Loan Combination | Loan Combination | Loan Combination |
Equity Inns Portfolio | $ 80,000,000 | $ 152,000,000 | $ 232,000,000 | 2.35x | 64.4% | 13.3% |
32 Avenue of the Americas | $ 70,000,000 | $ 355,000,000 | $ 425,000,000 | 1.88x | 55.2% | 9.8% |
11 Madison Avenue(1) | $ 69,600,000 | $ 694,730,000 | $ 764,330,000 | 3.89x | 32.5% | 14.3% |
Harvey Building Products Portfolio | $ 41,953,778 | $ 67,925,164 | $ 109,878,942 | 1.96x | 53.5% | 12.8% |
Springfield Mall | $ 32,460,817 | $ 32,460,817 | $ 64,921,633 | 1.76x | 58.0% | 11.1% |
40 Wall Street | $ 4,960,524 | $ 153,776,230 | $ 158,736,754 | 2.13x | 29.4% | 14.2% |
(1) | Excludes $310,670,000 of subordinate secured debt evidenced by the Note B-1-S, Note B-2-S and Note B-3-S Subordinate Companion Loans. |
Equity Inns Portfolio Loan Combination
General. The Mortgage Loan secured by the portfolio of Mortgaged Properties identified on Annex A-1 to this prospectus supplement as Equity Inns Portfolio, representing approximately 8.3% of the Initial Outstanding Pool Balance, with a Cut-off Date Balance of $80,000,000 (the “Equity Inns Portfolio Mortgage Loan”), is part of a Loan Combination comprised of nine promissory notes, each of which is secured by the same mortgage instrument on the same underlying Mortgaged Properties (the “Equity Inns Portfolio Mortgaged Properties”). The Equity Inns Portfolio Mortgage Loan is evidenced by promissory Note A-1-A and promissory Note A-4-A. The portion of the Equity Inns Portfolio Loan Combination (as defined below) evidenced by promissory A-1-B, promissory Note A-2-A, promissory Note A-2-B and promissory Note A-3, each of which is currently held by an affiliate of LCF and is expected to be contributed to a future securitization, and promissory Note A-4-B, promissory Note A-5 and promissory Note A-6, each of which is currently held by GACC and is expected to be contributed to a future securitization, with an aggregate outstanding principal balance as of the Cut-off Date of $152,000,000, is referred to in this prospectus supplement as the “Equity Inns Portfolio Companion Loans”, and each ispari passuin right of payment with each other and with the Equity Inns Portfolio Mortgage Loan. The Equity Inns Portfolio Mortgage Loan and the Equity Inns Portfolio Companion Loans are collectively referred to in this prospectus supplement as the “Equity Inns Portfolio Loan Combination.” The Equity Inns Portfolio Companion Loans will not be transferred to the Issuing Entity and will not be part of the Mortgage Pool.
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The holders of the promissory notes evidencing the Equity Inns Portfolio Loan Combination (the “Equity Inns Portfolio Noteholders”) have entered into a co-lender agreement that sets forth the respective rights of each Equity Inns Portfolio Noteholder (the “Equity Inns Portfolio Intercreditor Agreement”).
Servicing. The Equity Inns 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 Equity Inns Portfolio Intercreditor Agreement, all decisions, consents, waivers, approvals and other actions on the part of any Equity Inns Portfolio Noteholder will be effected in accordance with the Pooling and Servicing Agreement and the Equity Inns Portfolio Intercreditor Agreement.
Advancing. The Master Servicer or the Trustee, as applicable, will be responsible for making: (i) P&I Advances on the Equity Inns Portfolio Mortgage Loan (but not on the Equity Inns Portfolio 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 (ii) Property Advances with respect to the Equity Inns Portfolio Loan Combination, in each case unless a similar determination of nonrecoverability is made under the Pooling and Servicing Agreement.
Distributions. The Equity Inns Portfolio Intercreditor Agreement sets forth the respective rights of each of the Equity Inns Portfolio Noteholders and provides, in general, that all payments, proceeds and other recoveries on or in respect of the Equity Inns Portfolio Loan Combination (other than escrow and reserve payments and any proceeds, awards or settlements) will be applied to the Equity Inns Portfolio Mortgage Loan and the Equity Inns 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 Pooling and Servicing Agreement and the Equity Inns Portfolio Intercreditor Agreement).
Consultation and Control. The directing holder under the Equity Inns Portfolio Intercreditor Agreement with respect to the Equity Inns Portfolio Loan Combination will be the holder of the Equity Inns Portfolio Mortgage Loan or its designee. Accordingly, certain decisions to be made with respect to the Equity Inns Portfolio Loan Combination, including certain major servicing decisions, and the implementation of any recommended actions outlined in an asset status report with respect to the Equity Inns Portfolio Loan Combination or any related REO Property 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 Equity Inns Portfolio Intercreditor Agreement, the Equity Inns Portfolio Non-Controlling Note Holder will have the right (regardless of whether a Control Termination Event or a Consultation Termination Event exists) 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 (provided that to the extent that any Equity Inns Portfolio Companion Loan is included in a securitization transaction, such copies of notices, information and reports required to be delivered by the Special Servicer to such Equity Inns Portfolio Non-Controlling Note Holder shall be delivered to the master servicer related to such securitization transaction) and (ii) consult on a strictly non-binding basis with respect to (x) certain major servicing decisions regarding the Equity Inns Portfolio Loan Combination or any related REO Property as set forth in the Equity Inns Portfolio Intercreditor Agreement and (y) the implementation of any recommended actions outlined in an asset status report in respect of the Equity Inns Portfolio Mortgage Loan or any related REO Property. The consultation right of the Equity Inns Portfolio Non-Controlling Note Holders will expire 10 business days after the delivery by the Special Servicer of notice and information and reports relating to the matter subject to consultation, whether or not the Equity Inns Portfolio Non-Controlling Note Holders have 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 the Equity Inns 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 in respect of the Equity Inns Portfolio Mortgaged Property before the expiration of the aforementioned 10 business-day period if it
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determines that immediate action with respect to such decision is necessary to protect the interests of the holders of the Equity Inns Portfolio Mortgage Loan and the Equity Inns Portfolio Companion Loans.
In addition to the consultation rights of the Equity Inns Portfolio Non-Controlling Note Holders described above, the Equity Inns 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 Equity Inns Portfolio Loan Combination are discussed.
The “Equity Inns Portfolio Non-Controlling Note Holders” means, with respect to the Equity Inns Portfolio Companion Loans, the parties entitled to exercise the rights granted to the holders of the Equity Inns Portfolio Companion Loans under the Equity Inns Portfolio Intercreditor Agreement.
Sale of Defaulted Mortgage Loan. Pursuant to the terms of the Equity Inns Portfolio Intercreditor Agreement, if the Equity Inns Portfolio Loan Combination becomes a Defaulted Mortgage Loan pursuant to the terms of the Pooling and Servicing Agreement, the Special Servicer will be required to sell the Equity Inns Portfolio Mortgage Loan together with the Equity Inns Portfolio Companion Loans as a single whole loan. The Equity Inns Portfolio Non-Controlling Note Holders will have consultation rights in connection with such sale, as described above.
Appointment of Special Servicer. Subject to the terms of the Pooling and Servicing Agreement, the holder of the Equity Inns Portfolio Mortgage Loan or its designee will have the right, with or without cause, to replace the Special Servicer for the Equity Inns Portfolio Loan Combination and appoint a replacement special servicer in lieu thereof without the consent of the Equity Inns Portfolio Non-Controlling Note Holders as long as such replacement special servicer is a “qualified servicer” (as described in the Equity Inns Portfolio Intercreditor Agreement) and satisfies the other conditions set forth in the Pooling and Servicing Agreement. The circumstances under which a Special Servicer may be replaced pursuant to the Pooling and Servicing Agreement are described under “The Servicers—Replacement of the Special Servicer” in this prospectus supplement.
32 Avenue of the Americas Loan Combination
General. The Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this prospectus supplement as 32 Avenue of the Americas, representing approximately 7.3% of the Initial Outstanding Pool Balance, with a Cut-off Date Balance of $70,000,000 (the “32 Avenue of the Americas Mortgage Loan”), is part of a Loan Combination comprised of five promissory notes, each of which is secured by the same mortgage instruments on the same underlying Mortgaged Property (the “32 Avenue of the Americas Mortgaged Property”). The 32 Avenue of the Americas Mortgage Loan is evidenced by promissory Note A-4. The portion of the 32 Avenue of the Americas Loan Combination (as defined below) evidenced by (a) promissory Note A-1, promissory Note A-2 and promissory Note A-3, with an aggregate outstanding principal balance as of the Cut-off Date of $297,500,000, each of which is currently held by JPMorgan Chase Bank, National Association and is expected to be contributed to a future securitization, and (b) promissory Note A-5, which is currently held by GACC and is expected to be contributed to a future securitization, with an outstanding principal balance as of the Cut-off Date of $57,500,000 (together with promissory Note A-1, promissory Note A-2 and promissory Note A-3, the “32 Avenue of the Americas Companion Loans”) are eachpari passuin right of payment with each other and with the 32 Avenue of the Americas Mortgage Loan. The 32 Avenue of the Americas Mortgage Loan and the 32 Avenue of the Americas Companion Loans are collectively referred to in this prospectus supplement as the “32 Avenue of the Americas Loan Combination.” The 32 Avenue of the Americas 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 32 Avenue of the Americas Loan Combination (the “32 Avenue of the AmericasNoteholders”) have entered into a co-lender agreement that sets forth the respective rights of each 32 Avenue of the Americas Noteholder (the “32 Avenue of the Americas Intercreditor Agreement”).
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Servicing. The 32 Avenue of the Americas Loan Combination will be serviced as follows:
(a) from and after the Closing Date, but prior to the date that the 32 Avenue of the Americas Note A-1 Companion Loan is included in a securitization trust (the “32 Avenue of the Americas Note A-1 Securitization Date”), the 32 Avenue of the Americas Loan Combination will be serviced by the Master Servicer and the Special Servicer pursuant to the terms of the Pooling and Servicing Agreement, and
(b) from and after the 32 Avenue of the Americas Note A-1 Securitization Date, the 32 Avenue of the Americas Loan Combination will be serviced (x) pursuant to the terms of the pooling and servicing agreement entered into in connection with the securitization of the 32 Avenue of the Americas Note A-1 Companion Loan (the “32 Avenue of the Americas Pooling and Servicing Agreement”) and, subject to the terms of the 32 Avenue of the Americas Intercreditor Agreement, all decisions, consents, waivers, approvals and other actions on the part of any 32 Avenue of the Americas Noteholders will be effected in accordance with the 32 Avenue of the Americas Pooling and Servicing Agreement and (y) by the master servicer and the special servicer appointed pursuant to the 32 Avenue of the Americas Pooling and Servicing Agreement.
Advancing. The Master Servicer or the Trustee, as applicable, will be responsible for making: (i) P&I Advances on the 32 Avenue of the Americas Mortgage Loan (but not on the 32 Avenue of the Americas 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 (ii) prior to the 32 Avenue of the Americas Note A-1 Securitization Date, Property Advances with respect to the 32 Avenue of the Americas Loan Combination, in each case unless a similar determination of nonrecoverability is made under the Pooling and Servicing Agreement.
After the 32 Avenue of the Americas Note A-1 Securitization Date:
(a) the Master Servicer or the Trustee, as applicable, will continue to be responsible for making P&I Advances on the 32 Avenue of the Americas Mortgage Loan (but not on the 32 Avenue of the Americas Companion Loans) pursuant to the Pooling and Servicing Agreement, unless the Master Servicer, the Special Servicer or the Trustee, as applicable, determines that such an Advance would be a Nonrecoverable Advance; and
(b) the 32 Avenue of the Americas Master Servicer or the trustee under the 32 Avenue of the Americas Pooling and Servicing Agreement, as applicable, will be obligated to make (i) any required principal and interest advances on the 32 Avenue of the Americas Note A-1 Companion Loan as required under the terms of the 32 Avenue of the Americas Pooling and Servicing Agreement (but not on the 32 Avenue of the Americas Mortgage Loan or the 32 Avenue of the Americas Companion Loans designated as Note A-2, Note A-3 or Note A-5) and (ii) property advances with respect to the 32 Avenue of the Americas Loan Combination, in each case unless a similar determination of nonrecoverability is made under the 32 Avenue of the Americas Pooling and Servicing Agreement.
With respect to the 32 Avenue of the Americas Mortgage Loan, each of the Master Servicer and the Trustee will be permitted to make its own determination that it 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 servicers of a 32 Avenue of the Americas Companion Loans. If the Master Servicer determines that a proposed P&I Advance with respect to the 32 Avenue of the Americas 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 will be required to provide the servicer of a 32 Avenue of the Americas Companion Loan written notice of such determination, promptly and in any event within the time required by the 32 Avenue of the Americas Intercreditor Agreement. After the 32 Avenue of the Americas Note A-1 Securitization Date, if the Master Servicer receives written notice from any such servicer of a 32 Avenue of the Americas Companion Loan that it has determined, with respect to a 32 Avenue of the Americas Companion Loan, that any proposed advance of principal and/or interest would
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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 or the Trustee; provided, however, the Master Servicer and the Trustee may conclusively rely on such determination.
Distributions. The 32 Avenue of the Americas Intercreditor Agreement sets forth the respective rights of each of the 32 Avenue of the Americas Noteholders and provides, in general, that all payments, proceeds and other recoveries on or in respect of the 32 Avenue of the Americas Loan Combination (other than escrow and reserve payments and any proceeds, awards or settlements) will be applied to the 32 Avenue of the Americas Mortgage Loan and the 32 Avenue of the Americas 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 Pooling and Servicing Agreement, the 32 Avenue of the Americas Pooling and Servicing Agreement and the 32 Avenue of the Americas Intercreditor Agreement, as applicable).
Consultation and Control. The directing holder under the 32 Avenue of the Americas Intercreditor Agreement with respect to the 32 Avenue of the Americas Loan Combination (such party, the “32 Avenue of the Americas Directing Holder”) will initially be the holder of the 32 Avenue of the Americas Note A-1 Companion Loan, and from and after the 32 Avenue of the Americas Note A-1 Securitization Date, will be the controlling class representative or such other party specified in the 32 Avenue of the Americas Pooling and Servicing Agreement. Certain decisions to be made with respect to the 32 Avenue of the Americas Loan Combination, including certain major servicing decisions, and the implementation of any recommended actions outlined in an asset status report with respect to the 32 Avenue of the Americas Loan Combination or any related REO Property pursuant to the Pooling and Servicing Agreement or the 32 Avenue of the Americas Pooling and Servicing Agreement, as applicable, will require the approval of the 32 Avenue of the Americas Directing Holder.
Pursuant to the terms of the 32 Avenue of the Americas Intercreditor Agreement, each 32 Avenue of the Americas Non-Controlling Note Holder will have the right to (i) receive copies of all notices, information and reports that the Special Servicer or, from and after the 32 Avenue of the Americas Note A-1 Securitization Date, the 32 Avenue of the Americas Special Servicer is required to provide to the 32 Avenue of the Americas Directing Holder within the same time frame it is required to provide such notices, information and reports to the 32 Avenue of the Americas Directing Holder and (ii) to be consulted on a strictly non-binding basis with respect to (x) certain major servicing decisions regarding the 32 Avenue of the Americas Loan Combination or any related REO Property as set forth in the 32 Avenue of the Americas Intercreditor Agreement and (y) the implementation of any recommended actions outlined in an asset status report in respect of the 32 Avenue of the Americas Mortgage Loan or any related REO Property. The consultation right of a 32 Avenue of the Americas Non-Controlling Note Holder will expire 10 business days after the delivery by such special servicer of notice and information relating to the matter subject to consultation, whether or not such 32 Avenue of the Americas Non-Controlling Note Holder 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 32 Avenue of the Americas Non-Controlling Note Holder’s consultation rights described above, the Special Servicer or the 32 Avenue of the Americas Special Servicer, as applicable, is permitted to make any major servicing decision or take any action set forth in an asset status report in respect of the 32 Avenue of the Americas Mortgaged Property 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 32 Avenue of the Americas Mortgage Loan and the 32 Avenue of the Americas Companion Loans.
Notwithstanding the foregoing consultation rights, no direction or objection by a 32 Avenue of the Americas Non-Controlling Note Holder may require or cause the Master Servicer or the Special Servicer, as applicable, or, from and after the 32 Avenue of the Americas Note A-1 Securitization Date, the 32 Avenue of the Americas Master Servicer or the 32 Avenue of the Americas Special Servicer, as applicable, to violate any provision of any related mortgage loan documents, applicable law, the Pooling and Servicing Agreement or the 32 Avenue of the Americas Pooling and Servicing Agreement, as
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applicable, the 32 Avenue of the Americas Intercreditor Agreement or the REMIC provisions, including without limitation the applicable master servicer’s or special servicer’s obligation to act in accordance with the applicable servicing standard, or expose the applicable 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 such master servicer’s or special servicer’s responsibilities under the Pooling and Servicing Agreement or the 32 Avenue of the Americas Pooling and Servicing Agreement, as applicable.
In addition to the consultation rights of each 32 Avenue of the Americas Non-Controlling Note Holder described above, each 32 Avenue of the Americas Non-Controlling Note Holder will have the right to annual conference calls with the Master Servicer or Special Servicer or, from and after the 32 Avenue of the Americas Note A-1 Securitization Date, the 32 Avenue of the Americas Master Servicer or the 32 Avenue of the Americas Special Servicer, as applicable, upon reasonable notice and at times reasonably acceptable to the Master Servicer or Special Servicer or, from and after the 32 Avenue of the Americas Note A-1 Securitization Date, the 32 Avenue of the Americas Master Servicer or the 32 Avenue of the Americas Special Servicer, as applicable, in which servicing issues related to the 32 Avenue of the Americas Loan Combination are discussed.
The “32 Avenue of the Americas Non-Controlling Note Holder” means, with respect to the 32 Avenue of the Americas Loan Combination, the Controlling Class Representative (for so long as it is permitted under the Pooling and Servicing Agreement), and with respect to the 32 Avenue of the Americas Companion Loans designated as Note A-2, Note A-3 and Note A-5, the holder of such Notes or the party entitled under a future pooling and servicing agreement to exercise the rights granted to the holders of such Notes under the 32 Avenue of the Americas Intercreditor Agreement.
Sale of Defaulted Mortgage Loan. Pursuant to the terms of the 32 Avenue of the Americas Intercreditor Agreement, if the 32 Avenue of the Americas Loan Combination becomes a “defaulted mortgage loan” (as defined in and pursuant to the terms of the Pooling and Servicing Agreement or, after the 32 Avenue of the Americas Note A-1 Securitization Date, pursuant to the terms of the 32 Avenue of the Americas Pooling and Servicing Agreement), the Special Servicer, or the 32 Avenue of the Americas Special Servicer, will be required to sell the 32 Avenue of the Americas Mortgage Loan together with the 32 Avenue of the Americas Companion Loans as a single whole loan. The 32 Avenue of the Americas Non-Controlling Note Holder will have consultation rights in connection with such sale, as described above.
Appointment of Special Servicer. The 32 Avenue of the Americas Directing Holder will have the right, with or without cause, to replace the special servicer for the 32 Avenue of the Americas Loan Combination and appoint a replacement special servicer for the 32 Avenue of the Americas Loan Combination in lieu thereof without the consent of the 32 Avenue of the Americas Non-Controlling Note Holder as long as such replacement special servicer is a “qualified servicer” (as described in the 32 Avenue of the Americas Intercreditor Agreement) and satisfies the other conditions set forth in the applicable pooling and servicing agreement.
11 Madison Avenue Loan Combination
General. The Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this prospectus supplement as 11 Madison Avenue, representing approximately 7.2% of the Initial Outstanding Pool Balance, with a Cut-off Date Balance of $69,600,000 (the “11 Madison Avenue Mortgage Loan”), is part of a Loan Combination comprised of nineteen 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-C3 that evidences the 11 Madison Avenue Mortgage Loan; (ii) ninepari passu 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, having an aggregate outstanding principal balance as of the Cut-off Date of $397,530,000 (the “11 Madison Avenue Standalone Pari Passu Companion Loans”), each of which is generallypari passu in right of payment with
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the 11 Madison Avenue Mortgage Loan and the 11 Madison Avenue Non-StandalonePari Passu Companion Loans (as defined below); (iii) sixpari passupromissory notes designated as Note A-1-C1, Note A-1-C2, 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 $297,200,000 (the “11 Madison Avenue Non-Standalone Pari Passu Companion Loans” and, together with the 11 Madison Avenue Standalone Pari Passu Companion Loans, the “11 Madison Avenue Pari Passu Companion Loans”), each of which is generallypari passu in right of payment with the 11 Madison Avenue Mortgage Loan and the 11 Madison Avenue StandalonePari Passu Companion Loans; and (iv) three promissory notes designated as Note B-1-S, Note B-2-S and 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 Avenue Pari 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 Avenue Pari Passu Companion Loans. The 11 Madison Avenue Standalone Pari Passu Companion 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 Avenue Pari Passu Companion Loans, are referred to as the “11 Madison AvenueLoan Combination”. Only the 11 Madison Avenue Mortgage Loan is included in the Issuing Entity. Each of the 11 Madison Avenue Standalone Pari Passu Companion Loans and 11 Madison Avenue Subordinate Companion Loans was included in the MAD 2015-11MD Mortgage Trust. The 11 Madison Avenue Non-Standalone Pari Passu Companion Loans are currently being held as follows: (i) Note A-1-C1 is currently being by the COMM 2015-CCRE26 Mortgage Trust, (ii) Note A-1-C2 is currently being held by the COMM 2015-CCRE27 Mortgage Trust, (iii) Note A-2-C1 and Note A-2-C2 are currently held by the Morgan Stanley Bank, N.A. and are expected to be contributed to a future securitization, (iv) Note A-3-C1 is currently being held by the WFCM 2015-NXS3 Mortgage Trust, and (v) Note A-3-C2 is currently held by Wells Fargo and is expected to be contributed to a future securitization.
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 Standalone Pari Passu Companion 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
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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 Avenue Pari Passu Companion Loans, and the right of the holders of the 11 Madison Avenue Subordinate Companion 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 Avenue Pari Passu Companion Loans to receive payments with respect to the 11 Madison Avenue Mortgage Loan and the 11 Madison Avenue Pari 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 Avenue Pari 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 Avenue Pari 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-Standalone Pari Passu Companions 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-Standalone Pari 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;
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(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, 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
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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-Standalone Pari 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-Standalone Pari 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.
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
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Standalone Companion Loans, on the one hand, and the 11 Madison Avenue Mortgage Loan and the 11 Madison Avenue Non-Standalone Pari Passu Companions 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-Standalone Pari 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;
(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;
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(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;
(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-Standalone Pari 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-Standalone Pari 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
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(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 Avenue Pari 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:
“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 Avenue Pari 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.
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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 Notice, to purchase the 11 Madison Avenue Mortgage Loan and 11 Madison Avenue Pari Passu Companion 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 Avenue Pari 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
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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. |
· | The Pari Passu Loan Primary Servicing Fee Rate payable to the related MAD 2015-11MD Master 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 |
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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-CCRE26 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 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. |
Harvey Building Products Portfolio Loan Combination
General. The Mortgage Loan secured by the portfolio of Mortgaged Properties identified on Annex A-1 to this prospectus supplement as Harvey Building Products Portfolio, representing approximately 4.4% of the Initial Outstanding Pool Balance, with a Cut-off Date Balance of $41,953,778 (the “Harvey Building Products Portfolio Mortgage Loan”), is part of a Loan Combination comprised of four promissory notes, each of which is secured by the same mortgage instruments on the same underlying Mortgaged Property (the “Harvey Building Products Portfolio Mortgaged Property”). The Harvey Building Products Portfolio Mortgage Loan is evidenced by promissory Note A-1. The portion of the Harvey Building Products Portfolio Loan Combination (as defined below) evidenced by (a) promissory Note A-2A, with an outstanding principal balance as of the Cut-off Date of $24,972,487 (the “Harvey Building Products Portfolio Note A-2A Companion Loan“), (b) promissory note A-2B, with an outstanding principal balance as of the Cut-off Date of $9,988,995 (the “Harvey Building Products Portfolio Note A-2B Companion Loan“), and (c) promissory Note A-3, with an outstanding principal balance as of the Cut-off Date of $32,963,683 (the “Harvey Building Products Portfolio Note A-3 Companion Loan“), each of which is currently held by an affiliate of LCF and is expected to be contributed to a future securitization, are collectively referred to in this prospectus supplement as the “Harvey Building Products Portfolio Companion Loans” and each ispari passuin right of payment with each other and with the Harvey Building Products Portfolio Mortgage Loan. The Harvey Building Products Portfolio Mortgage Loan and the Harvey Building Products Portfolio Companion Loans are collectively referred to in this prospectus supplement as the “Harvey Building Products Portfolio Loan Combination.” The Harvey Building Products Portfolio Companion Loans will not be transferred to the Issuing Entity and will not be part of the Mortgage Pool. The Harvey Building Products Portfolio Companion Loans may be split into one or more additional notes reallocating the principal balance of the related Harvey Building Products Portfolio Companion Loan.
The holders of the promissory notes evidencing the Harvey Building Products Portfolio Loan Combination (the “Harvey Building Products PortfolioNoteholders”) have entered into a co-lender
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agreement that sets forth the respective rights of each Harvey Building Products Portfolio Noteholder (the “Harvey Building Products Portfolio Intercreditor Agreement”).
Servicing. The Harvey Building Products 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 Harvey Building Products Portfolio Intercreditor Agreement, all decisions, consents, waivers, approvals and other actions on the part of any Harvey Building Products Portfolio Noteholder will be effected in accordance with the Pooling and Servicing Agreement and the Harvey Building Products Portfolio Intercreditor Agreement.
Advancing. The Master Servicer or the Trustee, as applicable, will be responsible for making: (i) P&I Advances on the Harvey Building Products Portfolio Mortgage Loan (but not on the Harvey Building Products Portfolio 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 (ii) Property Advances with respect to the Harvey Building Products Portfolio Loan Combination, in each case unless a similar determination of nonrecoverability is made under the Pooling and Servicing Agreement.
Distributions. The Harvey Building Products Portfolio Intercreditor Agreement sets forth the respective rights of each of the Harvey Building Products Portfolio Noteholders and provides, in general, that all payments, proceeds and other recoveries on or in respect of the Harvey Building Products Portfolio Loan Combination (other than escrow and reserve payments and any proceeds, awards or settlements) will be applied to the Harvey Building Products Portfolio Mortgage Loan and the Harvey Building Products 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 Pooling and Servicing Agreement and the Harvey Building Products Portfolio Intercreditor Agreement).
Consultation and Control. The directing holder under the Harvey Building Products Portfolio Intercreditor Agreement with respect to the Harvey Building Products Portfolio Loan Combination will be the holder of the Harvey Building Products Portfolio Mortgage Loan or its designee. Accordingly, certain decisions to be made with respect to the Harvey Building Products Portfolio Loan Combination, including certain major servicing decisions, and the implementation of any recommended actions outlined in an asset status report with respect to the Harvey Building Products Portfolio Loan Combination or any related REO Property 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 Harvey Building Products Portfolio Intercreditor Agreement, the Harvey Building Products Portfolio Non-Controlling Note Holder will have the right (regardless of whether a Control Termination Event or a Consultation Termination Event exists) 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 (provided that to the extent that any Harvey Building Products Portfolio Companion Loan is included in a securitization transaction, such copies of notices, information and reports required to be delivered by the Special Servicer to such Harvey Building Products Portfolio Non-Controlling Note Holder shall be delivered to the master servicer related to such securitization transaction) and (ii) consult on a strictly non-binding basis with respect to (x) certain major servicing decisions regarding the Harvey Building Products Portfolio Loan Combination or any related REO Property as set forth in the Harvey Building Products Portfolio Intercreditor Agreement and (y) the implementation of any recommended actions outlined in an asset status report in respect of the Harvey Building Products Portfolio Mortgage Loan or any related REO Property. The consultation right of the Harvey Building Products Portfolio Non-Controlling Note Holders will expire 10 business days after the delivery by the Special Servicer of notice and information and reports relating to the matter subject to consultation, whether or not the Harvey Building Products Portfolio Non-Controlling Note Holders have 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 the Harvey Building Products Portfolio Non-Controlling Note Holders’ consultation rights
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described above, the Special Servicer is permitted to make any major decision or take any action set forth in an asset status report in respect of the Harvey Building Products Portfolio Mortgaged Property 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 Harvey Building Products Portfolio Mortgage Loan and the Harvey Building Products Portfolio Companion Loans.
In addition to the consultation rights of the Harvey Building Products Portfolio Non-Controlling Note Holders described above, the Harvey Building Products 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 Harvey Building Products Portfolio Loan Combination are discussed.
The “Harvey Building Products Portfolio Non-Controlling Note Holders” means, with respect to the Harvey Building Products Portfolio Companion Loans, the parties entitled to exercise the rights granted to the holders of the Harvey Building Products Portfolio Companion Loans under the Harvey Building Products Portfolio Intercreditor Agreement.
Sale of Defaulted Mortgage Loan. Pursuant to the terms of the Harvey Building Products Portfolio Intercreditor Agreement, if the Harvey Building Products Portfolio Loan Combination becomes a Defaulted Mortgage Loan pursuant to the terms of the Pooling and Servicing Agreement, the Special Servicer will be required to sell the Harvey Building Products Portfolio Mortgage Loan together with the Harvey Building Products Portfolio Companion Loans as a single whole loan. The Harvey Building Products Portfolio Non-Controlling Note Holders will have consultation rights in connection with such sale, as described above.
Appointment of Special Servicer. Subject to the terms of the Pooling and Servicing Agreement, the holder of the Harvey Building Products Portfolio Mortgage Loan or its designee will have the right, with or without cause, to replace the Special Servicer for the Harvey Building Products Portfolio Loan Combination and appoint a replacement special servicer in lieu thereof without the consent of the Harvey Building Products Portfolio Non-Controlling Note Holders as long as such replacement special servicer is a “qualified servicer” (as described in the Harvey Building Products Portfolio Intercreditor Agreement) and satisfies the other conditions set forth in the Pooling and Servicing Agreement. The circumstances under which a Special Servicer may be replaced pursuant to the Pooling and Servicing Agreement are described under “The Servicers—Replacement of the Special Servicer” in this prospectus supplement.
Springfield Mall Loan Combination
General. The Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this prospectus supplement as Springfield Mall, representing approximately 3.4% of the Initial Outstanding Pool Balance, with a Cut-off Date Balance of $32,460,817 (the “Springfield Mall Mortgage Loan”), is part of a Loan Combination comprised of two promissory notes, each of which is secured by the same mortgage instruments on the same underlying Mortgaged Property (the “Springfield Mall Mortgaged Property”). The Springfield Mall Mortgage Loan is evidenced by promissory Note A-1. The portion of the Springfield Mall Loan Combination (as defined below) evidenced by promissory Note A-2, with an outstanding principal balance as of the Cut-off Date of $32,460,817 (the “Springfield Mall Companion Loan“), which is currently held by CCRE Lending and is expected to be contributed to a future securitization, ispari passuin right of payment with the Springfield Mall Mortgage Loan. The Springfield Mall Mortgage Loan and the Springfield Mall Companion Loan are collectively referred to in this prospectus supplement as the “Springfield Mall Loan Combination.” The Springfield Mall Companion Loan 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 Springfield Mall Loan Combination (the “Springfield MallNoteholders”) have entered into a co-lender agreement that sets forth the respective rights of each Springfield Mall Noteholder (the “Springfield Mall Intercreditor Agreement”).
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Servicing. The Springfield Mall 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 Springfield Mall Intercreditor Agreement, all decisions, consents, waivers, approvals and other actions on the part of any Springfield Mall Noteholder will be effected in accordance with the Pooling and Servicing Agreement and the Springfield Mall Intercreditor Agreement.
Advancing. The Master Servicer or the Trustee, as applicable, will be responsible for making: (i) P&I Advances on the Springfield Mall Mortgage Loan (but not on the Springfield Mall 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 Springfield Mall Loan Combination, in each case unless a similar determination of nonrecoverability is made under the Pooling and Servicing Agreement.
Distributions. The Springfield Mall Intercreditor Agreement sets forth the respective rights of each of the Springfield Mall Noteholders and provides, in general, that all payments, proceeds and other recoveries on or in respect of the Springfield Mall Loan Combination (other than escrow and reserve payments and any proceeds, awards or settlements) will be applied to the Springfield Mall Mortgage Loan and the Springfield Mall Companion Loan 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 Pooling and Servicing Agreement and the Springfield Mall Intercreditor Agreement).
Consultation and Control. The directing holder under the Springfield Mall Intercreditor Agreement with respect to the Springfield Mall Loan Combination will be the holder of the Springfield Mall Mortgage Loan or its designee. Accordingly, certain decisions to be made with respect to the Springfield Mall Loan Combination, including certain major servicing decisions, and the implementation of any recommended actions outlined in an asset status report with respect to the Springfield Mall Loan Combination or any related REO Property 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 Springfield Mall Intercreditor Agreement, the Springfield Mall Non-Controlling Note Holder will have the right (regardless of whether a Control Termination Event or a Consultation Termination Event exists) 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 (provided that to the extent that the Springfield Mall Companion Loan is included in a securitization transaction, such copies of notices, information and reports required to be delivered by the Special Servicer to the Springfield Mall Non-Controlling Note Holder shall be delivered to the master servicer related to such securitization transaction) and (ii) consult on a strictly non-binding basis with respect to (x) certain major servicing decisions regarding the Springfield Mall Loan Combination or any related REO Property as set forth in the Springfield Mall Intercreditor Agreement and (y) the implementation of any recommended actions outlined in an asset status report in respect of the Springfield Mall Mortgage Loan or any related REO Property. The consultation right of the Springfield Mall Non-Controlling Note Holder will expire 10 business days after the delivery by the Special Servicer of notice and information and reports relating to the matter subject to consultation, whether or not the Springfield Mall Non-Controlling Note Holder 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 the Springfield Mall Non-Controlling Note Holder’s 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 in respect of the Springfield Mall Mortgaged Property 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 Springfield Mall Mortgage Loan and the Springfield Mall Companion Loan.
In addition to the consultation rights of the Springfield Mall Non-Controlling Note Holder described above, the Springfield Mall Non-Controlling Note Holder will have the right to annual conference calls with the Master Servicer or Special Servicer, as applicable, upon reasonable notice and at times reasonably
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acceptable to the Master Servicer or Special Servicer, as applicable, in which servicing issues related to the Springfield Mall Loan Combination are discussed.
The “Springfield Mall Non-Controlling Note Holder” means, with respect to the Springfield Mall Companion Loan, the parties entitled to exercise the rights granted to the holder of the Springfield Mall Companion Loan under the Springfield Mall Intercreditor Agreement.
Sale of Defaulted Mortgage Loan. Pursuant to the terms of the Springfield Mall Intercreditor Agreement, if the Springfield Mall Loan Combination becomes a Defaulted Mortgage Loan pursuant to the terms of the Pooling and Servicing Agreement, the Special Servicer will be required to sell the Springfield Mall Mortgage Loan together with the Springfield Mall Companion Loan as a single whole loan. The Springfield Mall Non-Controlling Note Holder will have consultation rights in connection with such sale, as described above.
Appointment of Special Servicer. Subject to the terms of the Pooling and Servicing Agreement, the holder of the Springfield Mall Mortgage Loan or its designee will have the right, with or without cause, to replace the Special Servicer for the Springfield Mall Loan Combination and appoint a replacement special servicer in lieu thereof without the consent of the Springfield Mall Non-Controlling Note Holder as long as such replacement special servicer is a “qualified servicer” (as described in the Springfield Mall Intercreditor Agreement) and satisfies the other conditions set forth in the Pooling and Servicing Agreement. The circumstances under which a Special Servicer may be replaced pursuant to the Pooling and Servicing Agreement are described under “The Servicers—Replacement of the Special Servicer” in this prospectus supplement.
40 Wall Street Loan Combination
General. The Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this prospectus supplement as 40 Wall Street, representing approximately 0.5% of the Initial Outstanding Pool Balance, with a Cut-off Date Balance of $4,960,524 (the “40 Wall Street Mortgage Loan”), is part of a loan combination comprised of four promissory notes, each of which is secured by the same mortgage instrument on the same underlying Mortgaged Property (the “40 Wall Street Mortgaged Property”). The 40 Wall Street Mortgage Loan is evidenced by promissory Note A-1-B. The portions of the 40 Wall Street Loan Combination (as defined below) evidenced by (a) promissory Note A-1-A and promissory Note A-2, with an aggregate Cut-off Date Balance of $94,249,948, each of which is included in the WFCM 2015-LC22 Mortgage Trust and (b) promissory note A-3, with a Cut-off Date Balance of $59,526,283, which is included in the COMM 2015-CCRE24 Mortgage Trust, are collectively referred to in this prospectus supplement as the “40 Wall Street Companion Loans” and each ispari passuin right of payment with the 40 Wall Street Mortgage Loan. The 40 Wall Street Mortgage Loan and the 40 Wall Street Companion Loans are collectively referred to in this prospectus supplement as the “40 Wall Street Loan Combination.” The 40 Wall Street Companion Loans will not be transferred to the Issuing Entity and will not be part of the Mortgage Pool.
The holders of the 40 Wall Street Loan Combination (the “40 Wall Street Noteholders”) have entered into a co-lender agreement that sets forth the respective rights of each 40 Wall Street Noteholder (the “40 Wall Street Intercreditor Agreement”).
Servicing. The 40 Wall Street Loan Combination is expected to be serviced by Wells Fargo Bank, National Association, as master servicer (the “WFCM 2015-LC22 Master Servicer”) and specially serviced by Rialto Capital Advisors, LLC, as special servicer (the “WFCM 2015-LC22 Special Servicer”), pursuant to the pooling and servicing agreement entered into between the Depositor, the WFCM 2015-LC22 Master Servicer, the WFCM 2015-LC22 Special Servicer, Wilmington Trust, National Association, as trustee (the “WFCM 2015-LC22 Trustee”), Wells Fargo Bank, National Association, as certificate administrator and custodian (the “WFCM 2015-LC22 Certificate Administrator”), and Park Bridge Lender Services LLC, as trust advisor (the “WFCM 2015-LC22 Trust Advisor”), in connection with the WFCM 2015-LC22 Mortgage Trust (into which the 40 Wall Street Companion Loan designated as note A-1 has been deposited) (the “WFCM 2015-LC22 Pooling and Servicing Agreement”), and, subject to the terms of
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the 40 Wall Street Intercreditor Agreement, all decisions, consents, waivers, approvals and other actions on the part of any 40 Wall Street Noteholder will be effected in accordance with the WFCM 2015-LC22 Pooling and Servicing Agreement and the 40 Wall Street Intercreditor Agreement.
Advancing. The Master Servicer or the Trustee, as applicable, will be responsible for making P&I Advances on the 40 Wall Street Mortgage Loan (but not on the 40 Wall Street 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.
The WFCM 2015-LC22 Master Servicer or the WFCM 2015-LC22 Trustee, as applicable, will be obligated to make property advances with respect to the 40 Wall Street Loan Combination, in each case unless a similar determination of nonrecoverability is made under the WFCM 2015-LC22 Pooling and Servicing Agreement.
Distributions. The 40 Wall Street Intercreditor Agreement sets forth the respective rights of each of the 40 Wall Street Noteholders and provides, in general, that all payments, proceeds and other recoveries on or in respect of the 40 Wall Street Loan Combination will be applied to the 40 Wall Street Mortgage Loan and the 40 Wall Street 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 40 Wall Street Intercreditor Agreement with respect to the 40 Wall Street Loan Combination will be the controlling class representative or such other party specified in the WFCM 2015-LC22 Pooling and Servicing Agreement (such party, the “WFCM 2015-LC22 Directing Holder”). Certain decisions to be made with respect to the 40 Wall Street Loan Combination, including certain major decisions and the implementation of any recommended actions outlined in an asset status report pursuant to the WFCM 2015-LC22 Pooling and Servicing Agreement, will require the approval of the WFCM 2015-LC22 Directing Holder.
Pursuant to the terms of the 40 Wall Street Intercreditor Agreement, the Controlling Class Representative (the “40 Wall Street Non-Controlling Note Holder”) will have the right to (i) receive copies of all notices, information and reports that the WFCM 2015-LC22 Special Servicer is required to provide to the WFCM 2015-LC22 Directing Holder within the same time frame it is required to provide such notices, information and reports to the WFCM 2015-LC22 Directing Holder and (ii) consult on a strictly non-binding basis with respect to certain major decisions as set forth in the 40 Wall Street Intercreditor Agreement and the implementation of any recommended actions outlined in an asset status report. The consultation right of the 40 Wall Street Non-Controlling Note Holder will expire 10 business days after the delivery by the WFCM 2015-LC22 Special Servicer of notice and information relating to the matter subject to consultation, whether or not the 40 Wall Street Non-Controlling Note Holder 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 the 40 Wall Street Non-Controlling Note Holder’s consultation rights described above, the WFCM 2015-LC22 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 40 Wall Street Mortgage Loan and the 40 Wall Street Companion Loans.
In addition to the consultation rights of the 40 Wall Street Non-Controlling Note Holder described above, the 40 Wall Street Non-Controlling Note Holder will have the right to annual conference calls with the WFCM 2015-LC22 Master Servicer or WFCM 2015-LC22 Special Servicer, as applicable, upon reasonable notice and at times reasonably acceptable to the WFCM 2015-LC22 Master Servicer or WFCM 2015-LC22 Special Servicer, as applicable, in which servicing issues related to the 40 Wall Street Loan Combination are discussed.
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Sale of Defaulted Mortgage Loan. Pursuant to the terms of the 40 Wall Street Intercreditor Agreement, if the 40 Wall Street Loan Combination becomes a defaulted mortgage loan pursuant to the terms of the WFCM 2015-LC22 Pooling and Servicing Agreement, the WFCM 2015-LC22 Special Servicer will be required to sell the 40 Wall Street Mortgage Loan together with the 40 Wall Street Companion Loans as a single whole loan.
Appointment of Special Servicer. The WFCM 2015-LC22 Directing Holder will have the right, with or without cause, to replace the WFCM 2015-LC22 Special Servicer then acting with respect to the 40 Wall Street Loan Combination and appoint a replacement special servicer in lieu thereof as long as such replacement special servicer is a “qualified servicer” (as described in the 40 Wall Street Intercreditor Agreement) and satisfies the other conditions set forth in the WFCM 2015-LC22 Pooling and Servicing Agreement.
Additional Mortgage Loan Information
General. The information in this prospectus supplement (including the Annexes to this prospectus supplement) 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 prospectus supplement, including the Annexes to this prospectus supplement, 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 prospectus supplement and in the Annexes to this prospectus supplement. 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 prospectus supplement with respect to any Mortgaged Property intended to represent such future net cash flow.
The ARD Loans. Each of the Mortgage Loans secured by the Mortgaged Properties identified on Annex A-1 to this prospectus supplement as Family Dollar – Rose Hill, Family Dollar – Moultrie, Family Dollar – Biscoe, Family Dollar – Rockingham and Dollar General – De Soto (the “ARD Loans”), each of which represents approximately 0.1% of the Initial Outstanding Pool Balance, respectively, provides 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.
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“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 prospectus supplement, including the information presented in the Annexes to this prospectus supplement, the indicated terms have the following meanings:
(a) “Administrative Fee Rate” for each Mortgage Loan is the percentage rate per annum set forth in Annex A-1 to this prospectus supplement 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). With respect to any Non-Serviced Mortgage Loan, the Administrative Fee Rate set forth on Annex A-1 also includes thePari Passu Loan Primary Servicing Fee Rate.
(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 or Anticipated Repayment Date, 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).
(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 complete”, “as-is less certain escrows” or “as-is” 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 portfolio of Mortgaged Properties identified on Annex A-1 to this prospectus supplement as Equity Inns Portfolio, securing a Mortgage Loan representing approximately 8.3% of the Initial Outstanding Pool Balance, the portfolio Appraised Value of $360,000,000 reflects a premium attributed to the aggregate value of the Equity Inns Portfolio as a whole. The sum of the appraised value of each of the Mortgaged Properties within the Equity Inns Portfolio on an individual basis is $322,400,000, which represents a Cut-off Date Loan-to-Value Ratio for such Mortgage Loan of 72.0% and a loan-to-value ratio at maturity for
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such Mortgage Loan of 72.0%. In the case of the Mortgaged Property identified on Annex A-1 to this prospectus supplement as 611 Cowper, which secures a Mortgage Loan representing approximately 3.4% of the Initial Outstanding Pool Balance, the Loan-to-Value Ratio for such Mortgage Loan has been calculated based on the “as stabilized” Appraised Value of $59,000,000. The “as stabilized” value refers to the Mortgaged Property once all remaining punch list items have been completed on such newly constructed mortgaged property and all free rent and tenant allowances have been exhausted. Based on the “as-is” Appraised Value of $51,800,000 as of the Cut-off Date, the Cut-off Date Loan-to-Value Ratio for such Mortgage Loan is 63.5% and the maturity date loan-to-value ratio is 51.2%.
(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 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 Passu Companion Loan(s) (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 relatedPari Passu Companion Loan(s), see “—Loan Combinations” above.In the case of the cross-collateralized and cross-defaulted mortgage loans, the LTV Ratio was calculated on an aggregate basis.
(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 Passu Companion Loan(s) (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 relatedPari Passu Companion Loan(s), see “—Loan Combinations” above.
(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(s) (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 relatedPari Passu Companion Loan(s), see “—Loan
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Combinations” above. In the case of the cross-collateralized and cross-defaulted Mortgage Loans, the Cut-Off Date U/W NOI Debt Yield was calculated on an aggregate basis.
(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 or ARD,” “Balloon LTV” or “Maturity Date or ARD LTV” 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 Passu Companion Loan(s) (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 relatedPari Passu Companion Loan(s), see “—Loan Combinations” above. In the case of the cross-collateralized and cross-defaulted mortgage loans, the LTV Ratio at Maturity or ARD was calculated on an aggregate basis. In the 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.
(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, Beds or Pads, 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 or Rooms so occupied over a specified period ending on, a specified date (identified on Annex A-1 to this prospectus supplement 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 prospectus supplement 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
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A-1 to this prospectus supplement concerning the “Largest Tenant,” “2nd Largest Tenant,” “3rd Largest Tenant,” “4thLargest 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, office, industrial/warehouse facility, self-storage, 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 prospectus supplement 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 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 prospectus supplement. 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 prospectus supplement 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
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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”, 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 in such apartment or (b) in the case of a Mortgaged Property operated as a hospitality property, the number of guest rooms 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 student housing, the number of beds or (e) in the case of a Mortgaged Property operated as a parking facility, the number of parking spaces.
(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 Passu Companion Loan(s) (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 relatedPari Passu Companion Loan(s), see “—Loan Combinations” above. In the case of the cross-collateralized and cross-defaulted mortgage loans, the U/W NCF DSCR was calculated on an aggregate basis.
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 (i) may include free rent amounts until certain tenants commence paying and (ii) 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 prospectus supplement 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
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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(s) (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 relatedPari Passu Companion Loan(s), see “—Loan Combinations” above. In the case of the cross-collateralized and cross-defaulted mortgage loans the U/W NOI DSCR was calculated on an aggregate basis.
The Underwritten NOI DSCRs are presented in this prospectus supplement 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 prospectus supplement for more information regarding the evaluation of debt service coverage ratios.
(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 prospectus supplement.
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.
Other than Mortgage Loans with Anticipated Repayment Dates, 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:
Thirty-three (33) Mortgage Loans (excluding interest-only and partial interest-only Mortgage Loans), representing approximately 39.4% 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.
Fourteen (14) Mortgage Loans, representing approximately 38.7% of the Initial Outstanding Pool Balance, are interest-only until the related maturity date or Anticipated Repayment Date.
Fifteen (15) Mortgage Loans, representing approximately 21.8% of the Initial Outstanding Pool Balance, provide for payments of interest-only for a period of 22 months to 59 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 or Anticipated Repayment Date and therefore each has an expected Balloon Balance at the related maturity date or Anticipated Repayment Date.
The ARD Loans, representing approximately 0.4% of the Initial Outstanding Pool Balance, provide for an increase in the interest rate after the applicable Anticipated Repayment Date. The Excess Interest
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with respect to each ARD Loan will be deferred and will not be paid until the principal balance and all other amounts related to such ARD Loan have been paid. Any amount received in respect of that deferred interest will be distributed to the holders of the Class V Certificates. See “The Pooling and Servicing Agreement—Accounts—Excess Interest” below. In addition, after the related Anticipated Repayment Date, all excess cash flow from the related Mortgaged Property will be applied to reduce the outstanding principal balance of the related ARD Loan until such balance is reduced to zero.
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 but 5 of the Yield Maintenance Loans 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 paragraphs (d) and (e) below, a Yield Maintenance Loan may also permit defeasance following the second anniversary of the Closing Date. Any Yield Maintenance Lock-Out Period, Prepayment Premium Lock-Out Period or Defeasance Lock-Out Period are each referred to herein as a “Lock-Out Period”. The weighted average Lock-Out Period remaining from the Cut-off Date for the Mortgage Loans is approximately 23 months. The Lock-Out Period, if any, for each Mortgage Loan is set forth on Annex A-1 to this prospectus supplement under the heading “Prepayment Provisions (# of payments).” Each Mortgage Loan restricts voluntary prepayments in one of the following ways:
(a) Forty-four (44) of the Mortgage Loans (the “Defeasance Loans”), representing approximately 69.2% 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 prospectus supplement 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-collateralization), or certain individual Mortgaged Properties that provide for the partial release of a portion of such Mortgaged Property, 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 115% to 125% of the portion of the Allocated Loan Amount with respect to the Mortgaged Property that is to be released. In addition, one (1) such Mortgage Loan, representing approximately 4.2% of the Initial Outstanding Pool Balance, also permits defeasance for 91 payments after a lockout period. Beginning with the 59th payment after the lockout period, in lieu of defeasance, the borrower may prepay such Mortgage Loan in full, together with a prepayment penalty equal to (a) 4% if such prepayment is made on or after October 6, 2022 through October 5, 2023, (b) 3% if such prepayment is made on or after October 6, 2023 through October 5, 2024 and (c) 1% if such prepayment is made on or after October 6, 2024 through July 5, 2025. See “Annex B—Description of the Top 20 Mortgage Loans—Beach House Hilton Head” in this prospectus supplement.
(b) Thirteen (13) of the Mortgage Loans (the “Yield Maintenance Loans”), representing approximately 30.4% 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 prospectus supplement under the heading “Prepayment Provisions (# of payments).”
(c) Five (5) of the Mortgage Loans (which are also Yield Maintenance Loans), representing approximately 0.4% of the Initial Outstanding Pool Balance, permit (i) voluntary prepayment of the Mortgage Loan, without a Lock-Out Period, accompanied by a Yield Maintenance Charge until the commencement of the Open Period for such Mortgage Loan or (ii) at the borrower’s option, after the expiration of a Lock-Out Period, defeasance.
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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, the Anticipated Repayment 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, the Anticipated Repayment Date or the last date of the related Yield Maintenance Period, as applicable, or, the remaining weighted average life of the Mortgage Loan, plus, in some cases, an additional fixed percentage, and in some cases, converted to a monthly equivalent yield as described in the applicable Mortgage Loan Documents.
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, 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, 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 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
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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 prospectus supplement 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 prospectus supplement.
Furthermore, certain Mortgage Loans may permit prepayments (with 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 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 a 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
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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 prospectus supplement 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, or if the conditions are not satisfied within the requisite time period, applied to the subject Mortgage Loan.
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 prospectus supplement.
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 prospectus supplement 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 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 (the “Code”) with respect to a Defeasance, that are acceptable to the Rating Agencies (the “Defeasance Collateral”) in an amount sufficient to make
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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 115% 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 prospectus supplement.
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:
(a) 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:
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this prospectus supplement as Whitehall Hotel, representing approximately 3.7% of the Initial Outstanding Pool Balance, on any payment date, the borrower may obtain the release of a small, non-income producing portion of the Mortgaged Property (identified in the loan agreement) from the lien of the mortgage provided, among other things, the REMIC loan-to-value ratio after the release is not more than 125% and, with respect to the adjacent development (as described below), (i) lender has approved, among other things, certain agreements and plans related to the adjacent development, (ii) borrower has delivered $1,800,000 to lender to be held as additional collateral for the Mortgage Loan (until such time that the adjacent development is completed to the satisfaction of lender) and (iii) the sponsors have delivered to lender a guaranty of lien-free completion of the adjacent development. According to the sponsors, an affiliate of the borrower intends to develop the released parcel, |
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together with adjacent parcels owned by an affiliate of the borrower, for the purpose of developing on the property adjacent to the Mortgaged Property amenities that may be used by guests at the Mortgaged Property including a ballroom, meeting and event space, parking area, office space, restaurant, gym, and other amenity spaces and services for the Mortgaged Property. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this prospectus supplement as Colerain Center, representing approximately 1.2% of the Initial Outstanding Pool Balance, the borrower may obtain the free release of a certain vacant and non-income producing portion of the Mortgaged Property, subject to the satisfaction of certain conditions, including, but not limited to, satisfaction of the REMIC LTV test. |
(b) 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.
(c) 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. For example:
· | With respect to the Mortgage Loan secured by the portfolio of Mortgaged Properties identified on Annex A-1 to this prospectus supplement as Equity Inns Portfolio, representing approximately 8.3% of the Initial Outstanding Pool Balance, on and after the date that is the earlier of (x) 2 years after the origination date and (y) December 31, 2017, the borrower has the right to obtain the release of one or more of the Mortgaged Properties in connection with a third-party, arms-length sale of such Mortgaged Property(ies) (or with respect to up to two of such Mortgaged Properties at which hotel operations have ceased and are no longer commercially viable, in connection with a sale to an affiliate) upon, among other conditions, (i) no event of default exists, (ii) the payment of a release price equal to the greater of (x) 115% of the Allocated Loan Amount of the subject Mortgaged Property(ies) and (y) 100% of the net sales proceeds of the subject Mortgaged Property(ies) after deducting the closing costs of the sale, which costs are required to be capped at 6% of gross sales proceeds, (iii) the debt service coverage ratio of the remaining properties shall not be less than the greater of 2.35x and the debt service coverage ratio immediately prior to the release and the loan to value ratio of the remaining properties shall not be greater than the lesser of 64.4% and the loan to value ratio immediately prior to the release, (iv) payment of a yield maintenance premium on the portion of the principal balance being prepaid in connection with such release and interest accrued to the next payment date, and (v) if such release would result in a loan to value ratio greater than 125%, payment of a “qualified amount” as such term is defined in Internal Revenue Service Revenue Procedure 2010-30, unless lender receives an opinion of counsel that failure to make such payment will not cause the Issuing Entity to fail to maintain its status as a REMIC. If, as a result of a casualty or condemnation, the application of net proceeds or awards to prepay such Mortgage Loan results in a reduction of the outstanding principal balance of the Mortgage Loan in an amount greater than 60% of the Allocated Loan Amount of the affected Mortgaged Property, then, the related borrower may obtain a release of such Mortgaged Property upon satisfaction of the same conditions as described above, except that the required payment to lender is equal to the sum of (i) the difference, if any, between 115% of the Allocated Loan Amount of such affected Mortgaged Property and the net proceeds previously applied, plus (ii) all interest which would have accrued to the next payment date, and shall not include a yield maintenance premium. |
· | With respect to the Mortgage Loan secured by the portfolio of Mortgaged Properties identified on Annex A-1 to this prospectus supplement as Harvey Building Products Portfolio, representing approximately 4.4% of the Initial Outstanding Pool Balance, the borrower may obtain the release |
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of one or more individual Mortgaged Properties at the expiration of the lockout period ,provided, among other things, (i) no event of default has occurred and is continuing, (ii) the borrower partially defeases the Mortgage Loan in an amount equal to the greater of (x) the net sales proceeds with respect to such individual Mortgaged Property and (y) 125% of the Allocated Loan Amount for such individual Mortgaged Property and (iii) if, after such release, at least $11,000,000 of the principal amount of the Mortgage Loan has been repaid or defeased, the loan-to-value ratio for the remaining Mortgaged Properties is no greater than 60%. |
(d) The release of all or a portion of the Mortgaged Property in connection with a substitution of another property for the Mortgaged Property.
(e) The release of all or a portion of the Mortgaged Property for reasons unique to the specific Mortgage Loan terms.
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 prospectus supplement. 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, insurance escrows may be waived if the borrower has provided an acceptable blanket insurance policy meeting the requirements of the loan documents. 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.
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 Equity Inns Portfolio Mortgage Loan, representing approximately 8.3% of the Initial Outstanding Pool Balance, the related Mortgaged Property also secures the Equity Inns Portfolio Companion Loans. See “Description of the Mortgage Pool—Loan Combinations—Equity Inns Portfolio Loan Combination” in this prospectus supplement. |
· | In the case of the 32 Avenue of the Americas Mortgage Loan, representing approximately 7.3% of the Initial Outstanding Pool Balance, the related Mortgaged Property also secures the 32 Avenue of the Americas Companion Loans. See “Description of the Mortgage Pool—Loan Combinations—32 Avenue of the Americas Loan Combination” in this prospectus supplement. |
· | In the case of the 11 Madison Avenue Mortgage Loan, representing approximately 7.2% 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—11 Madison Avenue Loan Combination” in this prospectus supplement. |
· | In the case of the Harvey Building Products Portfolio Mortgage Loan, representing approximately 4.4% of the Initial Outstanding Pool Balance, the related Mortgaged Property also secures the Harvey Building Products Portfolio Companion Loans. See “Description of the Mortgage Pool—Loan Combinations—Harvey Building Products Portfolio Loan Combination” in this prospectus supplement. |
· | In the case of the Springfield Mall Mortgage Loan, representing approximately 3.4% of the Initial Outstanding Pool Balance, the related Mortgaged Property also secures the Springfield Mall Companion Loan. See “Description of the Mortgage Pool—Loan Combinations—Springfield Mall Loan Combination” in this prospectus supplement. |
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· | In the case of the 40 Wall Street Mortgage Loan, representing approximately 0.5% of the Initial Outstanding Pool Balance, the related Mortgaged Property also secures the 40 Wall Street Companion Loans. See “Description of the Mortgage Pool—Loan Combinations—40 Wall Street Loan Combination” in this prospectus supplement. |
The Mortgage Loan Sellers have informed the Depositor that they are aware of the following other existing debt that is not secured by the related Mortgaged Property.
· | For example, the Mortgaged Properties identified on Annex A-1 to this prospectus supplement as Harvey Building Products Portfolio, which secure a Mortgage Loan representing approximately 4.4% of the Initial Outstanding Pool Balance, are held by the borrower, Harvey Propco, LLC, while ongoing manufacturing and distribution operations will be owned by Harvey Industries, Inc., a subsidiary of the borrower’s indirect parent company, which is the sole tenant at the Mortgaged Properties pursuant to a master lease. The sponsor financed its acquisition of Harvey Industries, Inc. with (i) a $30,000,000 revolving line of credit and (ii) a $70,000,000 term loan secured by all of the assets of Harvey Industries, Inc. The revolver and term loan lenders do not have a direct lien on the mortgaged properties or on the equity of the borrower. |
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.
In addition, the direct or indirect parents of certain borrowers may have material indebtedness that is not secured by the mortgaged property, in addition to trade payables and other debt incurred in the ordinary course of business, including for furniture, fixtures and equipment.
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, |
· | 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, |
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· | 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 management and policies and/or 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. |
Also, to the extent Mortgage Loan Documents permit mezzanine debt or to the extent a non-controlling equity holder in the related borrower is entitled to a preferred return on its investment, under certain circumstances, a transfer of a controlling interest in the related 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 related borrower’s parent to pledge direct or indirect ownership interests in the related borrower in connection with corporate financing arrangements, provided that such financing is also secured by a significant or otherwise specified number of assets other than such ownership interests in the related borrower.
For certain permitted transfers that would not trigger the due-on-sale provision in the related Mortgage Loan Documents, see Annex G to this prospectus supplement.
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):
· | With respect to the Mortgage Loan secured by the Mortgaged Properties identified on Annex A-1 to this prospectus supplement as Equity Inns Portfolio, representing approximately 8.3% of the Initial Outstanding Pool Balance, W2007 Equity Inns Partnership, L.P. and W2007 Equity Inns Trust (collectively, “Equity Inns PE Member”), each an affiliate of Whitehall Street Global Real Estate Partnership 2007 (which is the real estate private equity unit of Goldman Sachs Group, Inc.) holds a preferred equity interest with an outstanding balance as of closing of the Equity Inns Portfolio Loan of $75,780,091 in an upper-tier affiliate of the borrowers (“Holdco”). Provided no Equity Inns PE Changeover Event (as defined below) has occurred, Equity Inns PE Member is entitled to a preferred return on its investment payable from cash flow from the Equity Inns Portfolio Properties, equal to 7.5% for the period ending August 27, 2016 and 8.0% thereafter. If an Equity Inns PE Changeover Event has occurred, Equity Inns PE Member is entitled to an increase of 5.0% above such preferred return. 50% of the Equity Inns PE Member’s original capital contributions are required to be paid to Equity Inns PE Member by February 27, 2018 and |
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100% are required to be paid to Equity Inns PE Member by February 27, 2019. The balance of the preferred equity investment (inclusive of all returns) is required to be redeemed in full by payment to Equity Inns PE Member of (i) all its capital contributions and (ii) Equity Inns PE Member’s required return plus (iii) any other amounts due to Equity Inns PE Member on or prior to the earlier of (x) the first occurrence of an Equity Inns PE Changeover Event or (y) January 4, 2021 (the “Mandatory Equity Inns PE Redemption Date”). Upon certain events (each an “Equity Inns PE Changeover Event”) set forth in Holdco’s organizational documents (including Holdco’s failure to pay the monthly preferred return, the failure to repay Equity Inns PE Member’s capital contributions as provided in Holdco’s operating agreement and the failure to redeem the preferred equity investment by the Mandatory Equity Inns PE Redemption Date), Equity Inns PE Member is entitled to take over control of Holdco and thereby control over the borrower. In the event Equity Inns PE Member takes control of Holdco, any replacement guarantee will provide that liability of the replacement guarantor for voluntary bankruptcy and related carveouts will be capped at an amount equal to the original principal balance of the mortgage loan plus accrued and unpaid interest times 0.20. |
The lender and Equity Inns PE Member entered into a recognition agreement. Among other things, the recognition agreement contains acknowledgements from Equity Inns PE Member that upon an event of default under the Equity Inns Portfolio mortgage loan or upon the occurrence of a cash sweep event period under the Equity Inns Portfolio mortgage loan no cash from the related Mortgaged Properties will be distributed to Equity Inns PE Member, until the Equity Inns Portfolio mortgage loan has been paid in full or the distribution hold has been revoked or withdrawn by lender; however, such agreement does not prevent the Equity Inns PE Member from exercising its right to take control of the borrowers due to its failure to receive amounts due to it under the preferred equity documents. The recognition agreement requires the lender to give Equity Inns PE Member copies of any default notices given to the borrower and grants Equity Inns PE Member the opportunity to cure such defaults by the borrower.
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 related borrower’s Mortgaged Property after the payment of debt service and after payments on the preferred equity, (iii) potentially increasing the likelihood that the related borrower will permit the value or income producing potential of a Mortgaged Property to fall and (iv) potentially increasing the risk that a related 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 | % of Initial | Mezzanine | Annual | Mezzanine | Intercreditor | Total | Total | Total Debt | |||||||||
11 Madison Avenue(1) | $69,600,000 | 7.2% | $325,000,000 | 4.7577% | 9/6/2025 | Yes | 59.6%(2) | 1.97x(2) | 7.8%(2) | |||||||||
1209 DeKalb | $46,000,000 | 4.8% | $8,500,000 | 9.3750% | 10/6/2020 | Yes | 85.7% | 1.08x | 6.0% | |||||||||
Brentwood Retail Center | $13,290,772 | 1.4% | $2,000,000 | 10.0000% | 10/6/2025 | Yes | 76.5% | 1.01x | 7.1% | |||||||||
(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 annumrate 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 annumrate 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 the total debt amount of $1,400,000,000. |
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
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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 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, and (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 related 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. 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, and 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 related 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 clause (e) of the second sentence of this paragraph. 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 Loans listed in the chart below, the related Mortgage Loan Sellers have informed us that the direct and/or indirect equity owners of the related 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/or minimum combined debt yield as listed below:
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Mortgage Loan | Cut-off Date | % of Initial | Intercreditor | Combined | Combined | Combined | ||||||||
32 Avenue of the Americas | $ | 70,000,000 | 7.3% | Yes | 1.90x | 53.7% | NAP | |||||||
1209 DeKalb | $ | 46,000,000 | 4.8% | Yes | NAP | 72.3% | NAP | |||||||
Good Samaritan Medical Tower | $ | 42,700,000 | 4.4% | Yes | 1.35x | 62.8% | 8.4% | |||||||
Beach House Hilton Head | $ | 40,000,000 | 4.2% | Yes | 1.43x | 72.73% | 9.6% | |||||||
75 Executive Drive | $ | 8,169,533 | 0.9% | Yes | 1.30x | 70.0% | NAP | |||||||
Monument Creek | $ | 6,640,000 | 0.7% | Yes | 1.40x | 75.0% | NAP | |||||||
Family Dollar - Rose Hill | $ | 997,500 | 0.1% | Yes | 1.20x | 85.0% | NAP | |||||||
Family Dollar - Moultrie | $ | 927,500 | 0.1% | Yes | 1.20x | 85.0% | NAP | |||||||
Family Dollar - Biscoe | $ | 857,500 | 0.1% | Yes | 1.20x | 85.0% | NAP | |||||||
Family Dollar - Rockingham | $ | 819,000 | 0.1% | Yes | 1.20x | 85.0% | NAP | |||||||
Dollar General - De Soto | $ | 702,000 | 0.1% | Yes | 1.20x | 85.0% | NAP |
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 related borrower under a Mortgage Loan are also generally permitted to pledge their interest in such borrower as security for a mezzanine loan 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.
In addition, with respect to the Mortgage Loan secured by the portfolio of Mortgaged Properties identified on Annex A-1 to this prospectus supplement as Harvey Building Products Portfolio, representing approximately 4.4% of the Initial Outstanding Pool Balance, the related loan documents allow for the pledge of direct or indirect interests in the guarantor of the Mortgage Loan to secure corporate level financing, provided that the value of the Mortgaged Properties are not more than 25% of the value of all security for such financing. There is no requirement for an intercreditor agreement in connection with such pledges.
Certain risks relating to additional debt are described in “Risk Factors—Risks Related to the Mortgage Loans—Risks Related to Additional Debt” in this prospectus supplement.
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 prospectus supplement. See also “—Prepayment Provisions” and “Risk Factors—Risks Related to the Offered Certificates—Risks Related to Prepayments and Repurchases of Mortgage Loans” in this prospectus supplement. 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
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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 related 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 related 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 prospectus supplement), 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 Section 42 of the Code 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 additional information, see “Risk Factors—Risks Related to the Mortgage Loans—Multifamily Properties Have Special Risks” in this prospectus supplement.
With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this prospectus supplement as Somerset Apartments, representing approximately 0.8% of the Initial Outstanding Pool Balance, 37 units at the Mortgaged Property, representing 16.5% of the total units at the Mortgaged Property, are rented to tenants under Section 8 vouchers.
Delinquency.As of the Cut-off Date, none of the Mortgage Loans were 30 days or more delinquent, or had been 30 days or more delinquent during the 12 calendar months preceding the Cut-off Date.
Borrower Concentrations.Five (5) groups of Mortgage Loans have related borrowers that are affiliated with one another through partial or complete direct or indirect common ownership, with the 3 largest groups representing approximately 4.9%, 2.8% and 0.9, respectively, of the Initial Outstanding Pool Balance. See “Risk Factors—Risks Related to the Mortgage Loans—Risks Related to Borrower Concentration” in this prospectus supplement.
Single-Tenant Mortgaged Properties. Forty-two (42) Mortgaged Properties, which secure Mortgage Loans representing in the aggregate approximately 12.1% 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 prospectus supplement 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.
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Geographic Location. The Mortgaged Properties are located throughout 26 states and the U.S. Virgin Islands, with the largest concentration by Initial Outstanding Pool Balance located in California. See “Mortgaged Properties by State and/or Location” in Annex A-2 to this prospectus supplement “Summary—The Mortgage Pool—Characteristics of The Mortgage Pool—Property Locations” in this prospectus supplement for a table setting forth information about the jurisdictions with the greatest concentrations of Mortgaged Properties.
Loan Purpose. Forty-three (43) of the Mortgage Loans, representing in the aggregate approximately 72.9% of the Initial Outstanding Pool Balance, were originated in connection with the related borrower’s refinancing of a previous mortgage loan. Seventeen (17) of the Mortgage Loans, representing approximately 25.4% of the Initial Outstanding Pool Balance, were originated in connection with the related borrower’s acquisition of the related Mortgaged Property. Two (2) of the Mortgage Loans, representing approximately 1.7% of the Initial Outstanding Pool Balance, were originated in connection with the related borrower’s recapitalization.
Properties Underwritten Based on Projections. With respect to 44 Mortgaged Properties, which secure Mortgage Loans representing in the aggregate approximately 15.8% 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.
Modified Loans. As of the Cut-off Date, noneof the Mortgage Loans were modified due to a delinquency or impending delinquency.
Refinanced Loans at a Discount or From Default. One (1) Mortgage Loan, secured by the Mortgaged Property identified on Annex A-1 to this prospectus supplement as Murrieta Spectrum, representing approximately 2.1% of the Initial Outstanding Pool Balance, the related Mortgaged Property was previously financed as part of a $38,900,000 loan that was securitized in 2006 in the GSMS 2006-GC6 transaction. In 2009, the prior loan was moved to special servicing. In 2010, the prior loan was modified, splitting such prior loan into a $17,400,000 A-Note and a $21,500,000 B-Note. Proceeds of the Murrieta Spectrum Mortgage Loan were used to pay the A-Note in full and only $2,915,679 of the principal balance of the B-Note.
Changes in Mortgage Pool Characteristics
The description in this prospectus supplement, including Annex A-1 and Annex A-2 to this prospectus supplement, 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 prospectus supplement 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 prospectus supplement.
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 this prospectus supplement filed with the SEC, such Form 8-K will be filed no later than
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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.
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 XP-A, Class XS-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, Class H and Class J 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 XP-A, Class XS-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 J, 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.
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, Class H and Class J 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%:
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Class | Initial Certificate | Approximate | Approximate Initial | |||||||
Offered Certificates | ||||||||||
A-1 | $ | 39,109,000 | 4.070% | 30.000%(1) | ||||||
A-2 | $ | 210,190,000 | 21.874% | 30.000%(1) | ||||||
A-SB | $ | 53,371,000 | 5.554% | 30.000%(1) | ||||||
A-3 | $ | 125,000,000 | 13.008% | 30.000%(1) | ||||||
A-4 | $ | 244,968,000 | 25.493% | 30.000%(1) | ||||||
A-M | $ | 61,258,000 | 6.375% | 23.625% | ||||||
B | $ | 51,649,000 | 5.375% | 18.250% | ||||||
C | $ | 43,241,000 | 4.500% | 13.750% | ||||||
Non-Offered Certificates(2) | ||||||||||
D | $ | 28,828,000 | 3.000% | 10.750% | ||||||
E | $ | 24,022,000 | 2.500% | 8.250% | ||||||
F | $ | 22,822,000 | 2.375% | 5.875% | ||||||
G | $ | 10,810,000 | 1.125% | 4.750% | ||||||
H | $ | 12,012,000 | 1.250% | 3.500% | ||||||
J | $ | 33,632,147 | 3.500% | 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 prospectus supplement. |
The Class XP-A, Class XS-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 XP-A Certificates from time to time will equal the sum of the component notional amounts of the components of the Class XP-A Certificates (each, a “Class XP-A Component“). Each of the Class XP-A Components will relate to one of the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4 and Class A-M Certificates and, at any time during any of the periods specified on Annex H to this prospectus supplement, will equal the lesser of (a) the amount specified on Annex H to this prospectus supplement, and (b) the then Certificate Balance of the related Class of Certificates. The initial Notional Balance of the Class XP-A Certificates will be approximately $733,896,000.
The Notional Balance of the Class XS-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 XS-A Certificates. The initial Notional Balance of the Class XS-A Certificates will be approximately $733,896,000.
The Notional Balance of the Class X-B Certificates will equal the aggregate Certificate Balance of each 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 initial Notional Balance of the Class X-B Certificates will be approximately $94,890,000.
The Notional Balance of the Class X-C Certificates will equal the aggregate Certificate Balance of each of the Class D and Class E 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-C Certificates. The initial Notional Balance of the Class X-C Certificates will be approximately $52,850,000.
The Notional Balance of the Class X-D Certificates will equal the Certificate Balance of the Class F Certificates outstanding from time to time. In general, the Certificate Balance of such Class of Certificates will constitute a separate component of the Notional Balance of the Class X-D Certificates. The initial Notional Balance of the Class X-D Certificates will be approximately $22,822,000.
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The Notional Balance of the Class X-E Certificates will equal the aggregate Certificate Balance of each of the Class G and Class H 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-E Certificates. The initial Notional Balance of the Class X-E Certificates will be approximately $22,822,000.
The Notional Balance of the Class X-F Certificates will equal the Certificate Balance of the Class J Certificates outstanding from time to time. In general, the Certificate Balance of such Class of Certificates will constitute a separate component of the Notional Balance of the Class X-F Certificates. The initial Notional Balance of the Class X-F Certificates will be approximately $33,632,147.
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 XP-A and Class XS-A Certificates will be reduced to the extent of all reductions in the aggregate Certificate Balance of one or more of each 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 each 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 aggregate Certificate Balance of each of the Class D and Class E Certificates, 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 F Certificates, the Notional Balance of the Class X-E Certificates will be reduced to the extent of all reductions in the aggregate Certificate Balance of each of the Class G and Class H 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 J 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 December 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
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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.
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 prospectus supplement 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 prospectus supplement 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 prospectus supplement 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;
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(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;
(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 Lower-Tier REMIC or the Upper-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 March, 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 prospectus supplement 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 prospectus supplement 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 prospectus supplement 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
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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 prospectus supplement.
“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.
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 December 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 the per 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.
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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.
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 applicable to the Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class F, Class G, Class H and Class J Certificates will be fixed at their initial Pass-Through Rate of 1.811%, 3.221%, 3.598%, 3.521%, 3.774%, 3.250%, 3.250%, 3.250% and 3.250%, respectively,per annum.The Pass-Through Rate applicable to the Class A-M Certificates will be aper annumrate equal to the lesser of (i) the Weighted Average Net Mortgage Pass-Through Rate and (ii) 4.158%. The Pass-Through Rate applicable to the Class B Certificates will be aper annumrate equal to the lesser of (i) the Weighted Average Net Mortgage Pass-Through Rate and (ii) 4.459%. The Pass-Through Rate applicable to the Class C Certificates will equal the Weighted Average Net Mortgage Pass-Through Rate. The Pass-Through Rate applicable to each of the Class D and Class E Certificates will equal the Weighted Average Net Mortgage Pass-Through Rate,minus 1.000%, but no less than 0.000%.
The Pass-Through Rate applicable to the Class XP-A Certificates for the initial Distribution Date will equal approximately 0.908%per annum. The Pass-Through Rate applicable to the Class XP-A Certificates for each Distribution Date will equal the weighted average of the respective strip rates (the “Class XP-A Strip Rates”) at which interest accrues from time to time on the respective components of the Notional Balance of the Class XP-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 equal to the lesser of (a) the amount specified for the related Class of Certificates on Annex H to this prospectus supplement, and (b) the then Certificate Balance of the related Class of Certificates. The applicable Class XP-A Strip Rate with respect to each such component for any Distribution Date will equal the excess, if any, of (a) the lesser of (1) the rate per annum for such Distribution Date set forth on Annex I to this prospectus supplement and (2) the Weighted Average Net Mortgage Pass-Through Rate for such Distribution Date, over (b) the Pass-Through Rate for such Distribution Date for the related Class of Certificates.
The Pass-Through Rate applicable to the Class XS-A Certificates for the initial Distribution Date will equal approximately 0.250%per annum. The Pass-Through Rate applicable to the Class XS-A Certificates for each Distribution Date will equal the weighted average of the respective strip rates (the “Class XS-A Strip Rates”) at which interest accrues from time to time on the respective components of the Notional Balance of the Class XS-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
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corresponds to 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, respectively. The applicable Class XS-A Strip Rate with respect to each such component for any Distribution Date will equal (A) if any portion of the related component notional amount is also included in the related component of a Class XP-A Component immediately prior to the related Distribution Date, the excess, if any, of (a) the Weighted Average Net Mortgage Pass-Through Rate for such Distribution Date, over (b) the greater of (1) the rate per annum corresponding to such Distribution Date as set forth on Annex I to this prospectus supplement and (2) the Pass-Through Rate for such Distribution Date for the related Class of Certificates, and (B) if any portion of the related component notional amount is not included in the related component of a Class XP-A Component immediately prior to the related Distribution Date, 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 related Class of Certificates.
The Pass-Through Rate applicable to the Class X-B Certificates for the initial Distribution Date will equal approximately 0.101%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 components of the 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 1.000%per annum. The Pass-Through Rate applicable to the Class X-C Certificates for each Distribution Date will equal the weighted average of the respective strip rates (the “Class X-C Strip Rate“) at which interest accrues from time to time on the respective components of the Notional Balance of the Class X-C 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 D and Class E Certificates, respectively. The applicable Class X-C 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-D Certificates for the initial Distribution Date will equal approximately 1.396%per annum. The Pass-Through Rate applicable to the Class X-D Certificates for each Distribution Date will equal the strip rate (the “Class X-D Strip Rate“) at which interest accrues from time to time on the component of the Notional Balance of the Class X-D 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 F Certificates. The 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 1.396%per annum. The Pass-Through Rate applicable to the Class X-E Certificates for each Distribution Date will equal the weighted average of the respective strip rates (the “Class X-E Strip Rates“) at which interest accrues from time to time on the respective components of the Notional Balance of the Class X-E Certificates outstanding immediately prior to the related Distribution Date (weighted on the basis of the respective balances of such components outstanding immediately prior to
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such Distribution Date). Each of these components will have a component notional balance that corresponds to the Certificate Balance of the Class G and Class H Certificates, respectively. The applicable Class X-E 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-F Certificates for the initial Distribution Date will equal approximately 1.396%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 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 J 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 as described under “Description of the Mortgage Pool—Additional Mortgage Loan Information—The ARD Loans” in this prospectus supplement.
The “Weighted Average Net Mortgage Pass-Through Rate” for any Distribution Date is a per 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 the per 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. 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) (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 prospectus supplement under “The Pooling and Servicing Agreement—The Operating Advisor—Termination of the Operating Advisor Without Cause”.
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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 prospectus supplement).
“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 (A) the 32 Avenue of the Americas Mortgage Loan will be such amount as set forth in the 32 Avenue of the Americas Pooling and Servicing Agreement on and after the 32 Avenue of the Americas Note A-1 Securitization Date, (B) the 11 Madison Avenue Mortgage Loan will be 0.00125% and (C) the 40 Wall Street Mortgage Loan will be 0.0025%.
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 prospectus supplement 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; and
(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 prospectus supplement;
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 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
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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 (excluding any Non-Serviced 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 custodial account with respect to a Serviced Companion Loan, if applicable) and then from general collections in the collection account, 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 prospectus supplement. | 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 prospectus supplement. | 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.(3) | 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 Loan. | 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 (and custodial account with respect to a Serviced Companion Loan, if applicable) in excess of the regular interest rate, and then from general collections in the Collection Account, 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. |
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Type/Recipient | Amount | Frequency | Source of Payment | |||
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. | |||
Expenses, including without limitation, indemnification expenses(4)/Trustee, Certificate Administrator, Operating Advisor, Master Servicer and Special Servicer | Amounts 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 each Non-Serviced Mortgage Loan, each other master servicer (or primary servicer) will be entitled to a primary servicing fee accruing at a rate equal to (i) for the 32 Avenue of the Americas Mortgage Loan, such amount will be set forth in the 32 Avenue of the Americas Pooling and Servicing Agreement on and after the 32 Avenue of the Americas Note A-1 Securitization Date, (ii) 0.00125% per annum with respect to the 11 Madison Avenue Mortgage Loan, and (iii) 0.0025% per annum with respect to the 40 Wall Street Mortgage Loan. |
(2) | In general, with respect to each 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 Loan Combinations” in this prospectus supplement. |
(3) | Allocable between the Master Servicer and the Special Servicer as provided in the Pooling and Servicing Agreement. The allocations between an other master servicer and an other special servicer pursuant to an other pooling and servicing agreement may be different. |
(4) | In general, with respect to each 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 Loan Combinations” in this prospectus supplement. |
In this sub-heading “Fees and Expenses,” each of the terms “Mortgage Loan” and “Specially Serviced Loan,” unless otherwise indicated, generally does not include the Non-Serviced Mortgage Loan.
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 will 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.
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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 XP-A, Class XS-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 XP-A, Class XS-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 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;
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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;
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;
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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;
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;
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Thirty-seventh, to the Class J Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Thirty-eighth, to the Class J Certificates, in respect of interest, up to an amount equal to the aggregate unpaid Interest Shortfalls previously allocated to such Class;
Thirty-ninth, to the Class J 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;
Fortieth, to the Class J 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
Forty-first, 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 XP-A, Class XS-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.
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—Distribution of Available Funds” in this prospectus supplement. 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 prospectus supplement. 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
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Administrator to the holders of the Class A-1 through Class E 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 the Class A-1 through Class E 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 XS-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 aggregate amount of principal distribution to the Class D and Class E 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 amount of principal distribution to the 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;
(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 aggregate amount of principal distribution to the Class G and Class H 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 XS-A, Class X-B, Class X-C, Class X-D and Class X-E Certificates described in (a), (b), (c), (d) and (e) above.
The “Base Interest Fraction” for any principal prepayment on any Mortgage Loan and for any of the Class A-1 through Class ECertificates 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.
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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 prospectus supplement.
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 holder of the related Companion Loan 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;
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);
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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 holder of the related Companion Loan, as applicable, 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 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
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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 Offered 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 prospectus supplement.
The Assumed Final Distribution Dates set forth on the cover of this prospectus supplement 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).
In addition, the Assumed Final Distribution Dates set forth on the cover of this prospectus supplement were calculated on the basis of a 0% CPR and based on the Modeling Assumptions (as defined in this prospectus supplement 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.
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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 prospectus supplement, “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 J Certificates,second, to the Class H Certificates,third, to the Class G Certificates,fourth, to the Class F Certificates,fifth, to the Class E Certificates,sixth, to the Class D Certificates,seventh, to the Class C Certificates,eighth, to the Class B Certificates,ninth, 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 prospectus supplement or otherwise. |
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 XP-A and Class XS-A Certificates will be reduced to the extent of all reductions in the Certificate Balances 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 Balances 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 Balances of the Class D and Class E 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
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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 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 Balances of the Class G and 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 Notional Balance of the Class X-F Certificates will be reduced to the extent of all reductions in the Certificate Balance of the Class J 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 Loans, thereby potentially resulting in a loss to the Issuing Entity.
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
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(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 Serviced Pari Passu Companion Loan, the Master Servicer accepts a voluntary Principal Prepayment (other than (i) in accordance with the terms of the related Mortgage Loan Documents, (ii) 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, (iii) 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), (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 or (v) pursuant to applicable law or a court order) 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 Serviced Pari Passu Companion Loans (other than a Non-Serviced Mortgage Loan or 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 point per annum) that is being paid in such Collection Period with respect to the Mortgage Loans or Serviced 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 Loans (other than a Non-Serviced Mortgage Loan or a Specially Serviced Loan);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 or (d) 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
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pooling and 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 XP-A, Class XS-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, Class H and Class J 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 XP-A, Class XS-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 J Certificates) will be likewise protected by the subordination of each Class of Certificates with a lower payment priority. 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 “Description of the Offered Certificates—Distributions—Realized Losses” in this prospectus supplement. 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 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,
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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 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 prospectus supplement) 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 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 a per 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
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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 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, andthen,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 prospectus supplement, 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 J Certificates,then, 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
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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 XP-A, Class XS-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 J Certificates,then, to theClass H Certificates,then,to the ClassG 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 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 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
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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.
Each Non-Serviced Mortgage Loan is subject to provisions in the related pooling and servicing agreement governing such mortgage loan relating to appraisal reductions that are substantially similar but not identical to the provisions set forth above. If the Master Servicer receives notice of an appraisal reduction event and the related appraisal reduction amount for a Non-Serviced Mortgage Loan, the existence of an appraisal reduction in respect of such 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 Trust, 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 written notice of the existence of any such appraisal reduction event and/or any such appraisal reduction amount once calculated. The Master Servicer and the Trustee will be deemed to have received notice of any such appraisal reduction event and related appraisal reduction amount if such master servicer under the related other pooling and servicing agreement includes such event and/or amount in its monthly servicer statements provided to the Master Servicer. With respect to any Serviced Companion Loan, the Master Servicer 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
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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 XP-A and Class XS-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 or any Borrower Party (which determination will be based upon such party’s representations in an Investor Certification 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
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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; (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 (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); 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 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 prospectus supplement.
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.
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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 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.
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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 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 Offered 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 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.
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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.
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 prospectus supplement. 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 prospectus supplement 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 related 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 an 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, property releases, the application of earnout reserves, 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 prospectus supplement 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 prospectus supplement.
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In addition, although the related 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 related borrower to prepay an ARD Loan on its Anticipated Repayment Date will not be an event of default under the terms of such 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 related 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 prospectus supplement.
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 J, 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 XP-A, Class XS-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
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laws and other opportunities for investment. See “Risk Factors” and “Description of the Mortgage Pool” in this prospectus supplement and “Risk Factors” and “Yield and Maturity Considerations—Yield and Prepayment Considerations” in the prospectus.
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 prospectus supplement.
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 prospectus supplement, 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 prospectus supplement, 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 prospectus supplement 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
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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 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 prospectus supplement indicate the percentage of the initial Certificate Balance of each Class of Offered Certificates (other than the Class XP-A and Class XS-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 prospectus supplement under “Description of the Mortgage Pool—Additional Mortgage Loan Information” and on Annex A-1 to this prospectus supplement 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 prospectus supplement; |
(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 December 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 prospectus supplement. See “Description of the Mortgage Pool—Certain Terms and Conditions of the Mortgage Loans” in this prospectus supplement; |
(g) | no party exercises its right of optional termination described in this prospectus supplement 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 |
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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; |
(k) | distributions on the Certificates are made on the 10th calendar day in each month, commencing in December 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 November 17, 2015; |
(o) | each ARD Loan is paid in full on its Anticipated Repayment Date; and |
(p) | with respect to each Mortgage Loan, the 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 each 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. |
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 prospectus supplement, 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 prospectus supplement. 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 prospectus supplement, 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 prospectus supplement 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
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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 prospectus supplement show the corporate bond equivalent (“CBE”) yield, and weighted average life in years with respect to each Class of Offered Certificates.
The yields set forth on the tables set forth on Annex E to this prospectus supplement 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 prospectus supplement from and including November 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 XP-A and Class XS-A Certificates
The yield to maturity of the Class XP-A and Class XS-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 XP-A and Class XS-A Certificates. There can be no assurance that the Mortgage Loans will prepay at any particular rate. Prospective investors in the Class XP-A and Class XS-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 XP-A and Class XS-A Certificates set forth on Annex E to this prospectus supplement 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 XP-A and Class XS-A Certificates set forth on Annex E to this prospectus supplement 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 November 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
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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 XP-A and Class XS-A Certificates set forth on Annex E to this prospectus supplement, 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.
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 XP-A and Class XS-A Certificates will conform to the yields described in this prospectus supplement. 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 XP-A and Class XS-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 XP-A or Class XS-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.
THE POOLING AND SERVICING AGREEMENT
General
The Certificates will be issued pursuant to the Pooling and Servicing Agreement, dated as of November 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 prospectus supplement 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.
Special Note Regarding Servicing Shift Loan Combinations
As to particular servicing matters, the discussion under this heading “The Pooling and Servicing Agreement” is applicable with respect to Servicing Shift Loan Combinations only while the Pooling and Servicing Agreement governs the servicing of such Servicing Shift Loan Combinations. As described under “Risk Factors—Risks Related to Conflicts of Interest—The Servicing of Servicing Shift Loan Combinations Will Shift to Others” in this prospectus supplement, on and after the applicable Servicing Shift Securitization Date, the related Servicing Shift Loan Combination will be serviced pursuant to the related Servicing Shift Pooling and Servicing Agreement, and the provisions of such Servicing Shift Pooling and Servicing Agreement may be different than the terms of the Pooling and Servicing Agreement, although such Servicing Shift Loan Combination will still need to be serviced in compliance with the requirements of the related Intercreditor Agreement, as described under “Description of the Mortgage Pool—Loan Combinations” in this prospectus supplement.
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Servicing of the Mortgage Loans and Serviced Loan Combinations; Collection of Payments
The Pooling and Servicing Agreement generally requires the Master Servicer or the Special Servicer, as the case may be (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:
1. | 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 |
2. | the same care, skill, prudence and diligence with which such servicer services and administers commercial, multifamily and manufactured housing community mortgage loans owned, if 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); |
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but without regard to any potential conflict of interest arising from:
1. | 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; |
2. | 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; |
3. | the Master Servicer’s obligation to make Advances; |
4. | such servicer’s right to receive compensation for its services under the Pooling and Servicing Agreement or with respect to any particular transaction; |
5. | 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; |
6. | 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 |
7. | 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 Non-Serviced Mortgage Loans, see“—Servicing of the Non-Serviced Mortgage Loans” below and “Description of the Mortgage Pool—Loan Combinations” in this prospectus supplement.
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 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
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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 highest 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 related borrowers on similar non-defaulted debt of the related 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 Trust Fund, 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 Major Decisions, 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 any Companion Loan holder, or due to any failure to approve an action by the Directing Holder or any Companion Loan holder, or due to an objection by the Directing Holder or any Companion Loan 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 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 to clause (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”):
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(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 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 or Serviced Loan Combination or any extension of the maturity date of any Mortgage Loan or Serviced Loan Combination;
(c) any sale of a Defaulted Mortgage Loan (that is not a Non-Serviced Mortgage Loan), an REO Property (in each case, other than in connection with the termination of the Issuing Entity as described under “The Pooling and Servicing Agreement—Optional Termination” in this prospectus supplement) 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 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 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 or Serviced Loan Combination or any consent to such a waiver or consent to a transfer of the Mortgaged Property or interests in the related 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 or related to an immaterial easement, right of way or similar encumbrance;
(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 with a Stated Principal Balance greater than $2,500,000 or franchise changes for which the lender is required to consent or approve under the Mortgage Loan Documents (with respect to any Mortgage Loan or Serviced Loan Combination);
(h) releases of any escrow accounts, reserve accounts or letters of credit held as performance or earn-out escrows or reserves, other than those required pursuant to the specific terms of the related Mortgage Loan or Serviced Loan Combination and for which there is no material lender discretion (and other than those that are Special Servicer Decisions);
(i) any acceptance of an assumption agreement or any other agreement permitting a transfer of interests in the related borrower or guarantor releasing such borrower or guarantor from liability under a Mortgage Loan or Serviced Loan Combination other than pursuant to the specific terms of such 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 or Serviced Loan Combination, any
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initiation of judicial, bankruptcy or similar proceedings under the related Mortgage Loan Documents or with respect to the related mortgagor or Mortgaged Property;
(m) any consent to incurrence of additional debt by a borrower or mezzanine debt by a direct or indirect parent of a borrower, to the extent consent of the lender is required under the related Mortgage Loan Documents;
(n) any proposed modification or waiver of a material provision in the loan documents governing the type, nature or amount of insurance coverage required to be obtained and maintained by the related borrower; and
(o) any approval of any casualty insurance settlements or condemnation settlements, and any determination to apply casualty proceeds or condemnation awards to the reduction of the debt rather than to the restoration of the Mortgaged Property;
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 (o) with respect to any non-Specially Serviced Loan (see “—Modifications” in this prospectus supplement).
In the case of any Loan Combination, so long as the related Companion Loan Holder is the Directing Holder with respect to the Loan Combination, such Companion Loan Holder may have consent rights with respect to certain servicing matters set forth under “Description of the Mortgage Pool—Loan Combinations” in this prospectus supplement.
For the avoidance of any doubt, the Master Servicer and the Special Servicer (each in such capacity) may not make or be obligated to make any Major Decisions with respect to any Non-Serviced Mortgage Loans and the Controlling Class Representative will have no consent rights regarding Major Decisions with respect to any Non-Serviced Mortgage Loans, Servicing Shift Mortgage Loans and Excluded Mortgage Loans under the Pooling and Servicing Agreement.
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 Mortgage Loan, if a Control Termination Event has occurred and is continuing (and without regard to the occurrence and continuance of a Consultation Termination Event), the Special Servicer will be required to consult with the Operating Advisor in connection with any Major Decision and to consider alternative actions recommended by the Operating Advisor. Such consultation will not be binding on the Special Servicer.
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With respect to each Non-Serviced Loan Combination and Servicing Shift Loan Combination, the Controlling Class Representative will have certain non-binding consultation rights with respect to the servicing of such Non-Serviced Loan Combination and Servicing Shift Loan Combination as provided in the related Intercreditor Agreement and described under “Description of the Mortgage Pool—Loan Combinations” in this prospectus supplement. With respect to Excluded Mortgage Loans, the Controlling Class Representative or any Controlling Class Certificateholder will not have any consent or consultation 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 prospectus supplement.
The “Directing Holder” means:
(a) | with respect to each Mortgage Loan (other than Non-Serviced Mortgage Loans, Servicing Shift Mortgage Loans and Excluded Mortgage Loans) and Serviced Loan Combination (other than Servicing Shift Loan Combinations), the Controlling Class Representative; |
(b) | with respect to each Servicing Shift Loan Combination, the related Loan-Specific Directing Holder; and |
(c) | with respect to each Excluded Mortgage Loan, there will be no Directing Holder. |
The initial Directing Holder for each Mortgage Loan (other than Non-Serviced Mortgage Loans, Servicing Shift Mortgage Loans and Excluded Mortgage Loans) and Serviced Loan Combinations (other than Servicing Shift Loan Combinations) is expected to be LNR Securities Holdings, LLC or its affiliate. 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, (ii) solely with respect to the 10 largest Mortgage Loans based on Cut-off Date Principal Balance, (A) any person that owns, directly or indirectly, 25% or more of a borrower, a mortgagor or a manager of a Mortgaged Property or (B) any person that owns, directly or indirectly, 25% or more of a beneficial interest in any mezzanine lender of any mezzanine loan related to a Mortgage Loan that has accelerated such mezzanine loan as set forth in clause (iii) or (iii) any mezzanine lender (or an Affiliate thereof) of 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 mezzanine lender or an Affiliate of such mezzanine lender and (c) such mezzanine lender 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.
“Affiliate” means, with respect to any specified person or entity, any other person or entity controlling or controlled by or under common control with such specified person or entity, respectively.
“Loan-Specific Directing Holder” means, with respect to any Servicing Shift Loan Combination, the “controlling holder”, the “directing holder”, “directing lender” or any analogous concept under the related Intercreditor Agreement. Prior to the applicable Servicing Shift Securitization Date, the “directing holder” with respect to the related Servicing Shift Loan Combination will be the holder of the related Controlling Companion Loan. On and after the applicable Servicing Shift Securitization Date, there will be no Loan-Specific Directing Holder under the Pooling and Servicing Agreement with respect to the related Servicing Shift Loan Combination.
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“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 the Majority Controlling Class Certificateholders;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 the Majority Controlling Class Certificateholders that a Controlling Class Representative is no longer designated, then the Controlling Class Certificateholder that owns the largest aggregate Certificate Balance of the Controlling Class will be the Controlling Class Representative.
“Majority Controlling Class Certificateholders” means more than 50% of the Controlling Class Certificateholder(s), by Certificate Balance, as determined by the Certificate Registrar from time to time.
The initial Controlling Class Representative will be LNR Securities Holdings, LLC or its affiliate, 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 in writing is the Controlling Class Representative on behalf of LNR Securities Holdings, LLC, as holder (or beneficial owner) of at least a majority of the applicable Class of Control Eligible Certificates, until the Certificate Registrar receives (a) notice of a replacement Controlling Class Representative from the Majority Controlling Class Certificateholders or (b) notice that LNR Securities Holdings, LLC 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).
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;provided that if at any time the Certificate Balances of the Sequential Pay Certificates (other than the Control Eligible Certificates) have been reduced to zero as a result of the allocation of principal payments on the Mortgage Loans, then the “Controlling Class” will be the most subordinate class of Control Eligible Certificates that has an aggregate Certificate Balance greater than zero without regard to the application of Appraisal Reduction Amounts to notionally reduce the Certificate Balance of such Class. The Controlling Class as of the Closing Date will be the Class J Certificates.
A “Consultation Termination Event” will occur under the following circumstances, with respect to each Mortgage Loan (other than Non-Serviced Mortgage Loans, Servicing Shift Mortgage Loans and Excluded Mortgage Loans) and Serviced Loan Combination (other than Servicing Shift Loan Combinations) 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;provided that prior to the applicable Servicing Shift Securitization Date, no Consultation Termination Event may occur with respect to the Loan-Specific Directing Holder related to the related Servicing Shift Loan Combination and the term “Consultation Termination Event” will not be applicable to the Loan-Specific Directing Holder related to such Servicing Shift Loan Combination;providedfurther that if at any time the Certificate Balances of the Sequential Pay Certificates (other than the Control Eligible Certificates) have been reduced to zero as a result of the allocation of principal payments on the Mortgage Loans, then it will be deemed as if no Control Termination Event or Consultation Termination Event has occurred and the Controlling Class
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Representative will be afforded all rights to which it is entitled under the Pooling and Servicing Agreement in such circumstance. 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 Registrar determine which Class of Certificates is the then-current Controlling Class and the Certificate Registrar 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 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 notice of a replacement of the Directing Holder by the Majority Controlling Class Certificateholders, or the resignation of the then current Directing Holder.
The “Control Eligible Certificates” will be any of the Class F, Class G, Class H and Class J Certificates.
A “Control Termination Event” will occur under the following circumstances, with respect to each Mortgage Loan (other than Non-Serviced Mortgage Loans, Servicing Shift Mortgage Loans and Excluded Mortgage Loans) and Serviced Loan Combination (other than Servicing Shift Loan Combinations) at any date on which 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;provided that prior to (i) the applicable Servicing Shift Securitization Date, no Control Termination Event may occur with respect to the Loan-Specific Directing Holder related to the related Servicing Shift Loan Combination and the term “Control Termination Event” will not be applicable to the Loan-Specific Directing Holder related to such Servicing Shift Loan Combination;provided further that if at any time the Certificate Balances of the Sequential Pay Certificates (other than the Control Eligible Certificates) have been reduced to zero as a result of the allocation of principal payments on the Mortgage Loans, then it will be deemed as if no Control Termination Event has occurred and the Controlling Class Representative will be afforded all rights to which it is entitled under the Pooling and Servicing Agreement in such circumstance. 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
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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 prospectus supplement.
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 and the other parties to the Pooling and Servicing Agreement 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 will be required to notify the Special Servicer, the Master Servicer, the Certificate Administrator, the Depositor, the Operating Advisor 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 |
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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 prospectus supplement 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 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 and the Class X-D, Class X-E, Class X-F, Class V, Class R and 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 prospectus supplement.
Role of Operating Advisor While No Control Termination Event Has Occurred and Is Continuing
With respect to each Mortgage Loan (other than Non-Serviced Mortgage Loans and Servicing Shift Mortgage Loans) and Serviced Loan Combination (other than Servicing Shift Loan Combinations), 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).
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Prior to a Control Termination Event, 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 Non-Serviced Mortgage Loans or Servicing Shift Mortgage Loans.
Role of Operating Advisor While a Control Termination Event Has Occurred and Is Continuing
With respect to each Mortgage Loan (other than Non-Serviced Mortgage Loans and Servicing Shift Mortgage Loans) and Serviced Loan Combination (other than Servicing Shift Loan Combinations), 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 prospectus supplement;
(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 on a platform-level basis 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 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 Non-Serviced Mortgage Loans and Servicing Shift Mortgage Loans) or Serviced Loan Combination (other than Servicing Shift Loan Combinations) was a Specially Serviced Loan during the prior calendar year) to be provided to the Trustee, the Master Servicer, the Certificate
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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 holder(s), 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 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 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.
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Annual Report
With respect to each Mortgage Loan (other than Non-Serviced Mortgage Loans and Servicing Shift Mortgage Loans) and Serviced Loan Combination (other than Servicing Shift Loan Combinations), if a Control Termination Event has occurred and is continuing, 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 (collectively, the “Performance Assessment Information”), the Operating Advisor (if any Mortgage Loan (other than Non-Serviced Mortgage Loans and Servicing Shift Mortgage Loans) and Serviced Loan Combination (other than Servicing Shift Loan Combinations) were Specially Serviced Loans during the prior calendar year) will prepare an annual report to be provided to the Master Servicer, 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 Performance Assessment Information.
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.
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 prospectus supplement regarding Privileged Information and as otherwise set forth in the Pooling and Servicing Agreement.
Notwithstanding the foregoing discussion under this “—Annual Report” heading, no such 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 (other than Non-Serviced Mortgage Loans and Servicing Shift Mortgage Loans) and Serviced Loan Combination (other than Servicing Shift Loan Combinations), after the occurrence and during the 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 prospectus supplement.
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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 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, KBRA, Fitch, 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
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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 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 the date of such termination (including accrued and unpaid compensation) and other than indemnification rights arising out of events occurring prior to such
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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 and the 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 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 may resign from its obligations and duties under the Pooling and Servicing Agreement, without payment of any penalty, at any time when the Certificate Balances of the Classes of Certificates senior to the Class E Certificates have been reduced to zero. No successor operating advisor will be required to be appointed in connection with, or as a condition to, such resignation.
In addition, 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 each Mortgage Loan (other than Non-Serviced Mortgage Loans and Servicing Shift Mortgage Loans) and Serviced Loan Combination (other than Servicing Shift Loan Combinations) and will accrue at a rate equal to the applicable Operating Advisor Fee Rate with respect 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 annumrate which will equal to (i) 0.0022% per annum with respect to each Mortgage Loan (other than the Equity Inns Portfolio Mortgage Loan, the Harvey Building Products Portfolio Mortgage Loan and the Springfield Mall Mortgage Loan), (ii) 0.0047% per annum with respect to the Equity Inns Portfolio Mortgage Loan, (iii) 0.0070% per annum with respect to the Harvey Building Products Portfolio Mortgage Loan and (iv) 0.0084% per annum with respect to the Springfield Mall Mortgage Loan.
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
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Decision. The Operating Advisor Consulting Fee is not payable on any Non-Serviced Loan Combination or Servicing Shift 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, neither the Master Servicer nor the Trustee will make an Advance to the extent that such party 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 P&I 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 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 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.
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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 (other than a Mortgaged Property related to a Non-Serviced Mortgage Loan). The Master Servicer will also be obligated to make Property Advances with respect to Serviced Loan Combinations. With respect to any Non-Serviced Loan Combinations, 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 “The Pooling and Servicing Agreement—Servicing of the Non-Serviced Mortgage Loans” and “Description of the Mortgage Pool—Loan Combinations” in this prospectus supplement.
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 on the Mortgage Loans in the Issuing Entity, and with respect to any related securitized Non-Serviced Companion Loan, from general collections of the trust into which such Non-Serviced Companion Loan has been deposited, on apro rata basis (based on each such loan’s outstanding principal balance).
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 holder of the related 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 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.
The Special Servicer will have no obligation to make any Property Advances; provided that in an urgent or emergency situation requiring the making of a Property Advance, the Special Servicer may make such Property Advance, and the Master Servicer will be required to reimburse the Special Servicer for such Property Advance (with interest on that Advance) within a specified number of days as set forth in the Pooling and Servicing Agreement, provided such Property Advance is not determined to be non-recoverable by the Master Servicer in its reasonable judgment (in which case it will be reimbursed out of general collections). Once reimbursed the Master Servicer will be deemed to have made such Property Advance as of the date made by the Special Servicer, and will be entitled to reimbursement with interest on that Advance in accordance with the terms of the Pooling and Servicing Agreement.
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Except as otherwise discussed in this section relating to Property Advances made with respect to Loan Combinations, the Master Servicer, the Special 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 related 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 business 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, the Special 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 related borrower and received by or on behalf of the Issuing Entity, (ii) from late payment fees on the related Mortgage Loan paid by the related borrower and received by or on behalf of the Issuing Entity, 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 holder of the related 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 Companion Loans from the holders of such Companion Loans). The Master Servicer will be authorized to pay itself, the Special Servicer 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, the Special 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 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 Noteholder, 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.
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Recovery of Advances.Subject to the conditions or limitations set forth in the Pooling and Servicing Agreement, the Master Servicer, the Special 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 its reasonable judgment in accordance with the Servicing Standard (with respect to the Master Servicer and the Special Servicer) and in its reasonable business 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 Directing Holder (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 Directing Holder (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 Directing Holder (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, the Special Servicer and the Trustee will be entitled to recover any Advance made by it that it 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 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, the Special 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
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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, the Special 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 related borrower in connection with such modification but becomes an obligation of the related 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 holder of the related 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), 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 related 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 Advance is nonrecoverable) 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
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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.
With respect to each Non-Serviced Mortgage Loan, the Master Servicer, the Special Servicer or the Trustee will each be permitted to make its own determination that the Master Servicer or the 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 the related Non-Serviced Loan Combination. If the Master Servicer or 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 any Non-Serviced Mortgage Loan previously made, would be, or is, as applicable, a nonrecoverable advance, the Master Servicer or Special Servicer, as applicable, will be required to provide the servicer of the related Non-Serviced 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 the related Non-Serviced Companion Loans, 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 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.
“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, in trust 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 prospectus supplement. See “Description of the Offered Certificates—Distributions” in this prospectus supplement.
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
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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 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, 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 at least the equivalent by KBRA (if then rated by KBRA), in the case of accounts in which deposits are held for 30 days or less or, in the case of accounts in which deposits are held for more than 30 days, the long-term unsecured debt obligations of which are rated at least “A2” by Moody’s, “A” by Fitch and at least the equivalent by KBRA (if then rated by KBRA), (ii) an account or accounts maintained with Wells Fargo Bank, National Association, so long as such depository’s long-term unsecured debt or deposit accounts are rated at least “A2” by Moody’s, “BBB+” by Fitch and at least the equivalent by KBRA (if then rated by KBRA) (if the deposits are to be held in the account for more than 30 days) or its short term deposit accounts or short term unsecured debt is rated at least “P-1” by Moody’s, “F2” by Fitch and at least the equivalent by KBRA (if then rated by KBRA) (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 it meets the eligibility standards of the Certificate Administrator set forth in the Pooling and Servicing Agreement, (iv) 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 (iv), 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
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unsecured debt obligations of which are rated at least “A2” by Moody’s, (v) 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)-(iv) 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 (vi) 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 related 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 (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 the Special Servicer determines, subject to the discussion under “—The Directing Holder” and “—The Operating Advisor” in this prospectus supplement, 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 prospectus
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supplement, 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 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 Standard 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 and KBRA with respect to any Mortgage Loan that (A) represents one of the 10 largest Mortgage Loans based on Stated Principal Balance, (B) 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 or (C) has a Stated Principal Balance that is more than $35,000,000;provided, that the Special Servicer will be entitled to reasonably rely upon the written notification delivered to the Special Servicer of the applicable other servicer regarding the 10 largest mortgage loans or groups of cross-collateralized Mortgage Loans in such 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 at the direction of the Special 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 related 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 Serviced Companion Loans from the holders of such Serviced 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 the creation of any lien or other encumbrance on the related Mortgaged Property or any ownership interest in the related borrower (including, unless specifically permitted, any mezzanine financing of the related borrower or the Mortgaged Property or any sale or transfer of preferred equity in the related 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 related borrower or the Mortgaged Property or any sale or transfer of preferred equity in the related 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 related borrower or the Mortgaged Property or any sale or transfer of preferred equity in the related 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 prospectus supplement, the Special Servicer (A) determines, in accordance with the Servicing Standard,
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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 KBRA with respect to any Mortgage Loan that (A) represents one of the 10 largest Mortgage Loans based on Stated Principal Balance, (B) represents more than 2% of the aggregate Stated Principal Balance of the Mortgage Loans then outstanding or (C) has a Stated Principal Balance that is more than $20,000,000;provided, that the Special Servicer will be entitled to reasonably rely upon the written notification delivered to the Special Servicer of the applicable other servicer regarding the 10 largest mortgage loans or groups of cross-collateralized Mortgage Loans in such securitization. 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 at the direction of the Special 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 related 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 Serviced Companion Loans from the holders of such Serviced 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 a Special Servicer Decision. 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, at its own expense (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 2017 and (b) less than $2,000,000 at least once every 24 months, commencing in 2018 (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
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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 PassuCompanion 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 the Non-Serviced Mortgage Loans will be conducted by the other servicers appointed under, and performed in accordance with the terms of, the servicing agreements governing the Non-Serviced Mortgage Loans.
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 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,
(i) 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 of clause (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;
(ii) 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;
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(iii) 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;
(iv) 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 under “—The Directing Holder” and “—The Operating Advisor” above in this prospectus supplement);
(v) 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
(vi) 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 prospectus supplement)) 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 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 any 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 at least “A2” by Moody’s, “A-” by Fitch and at least the equivalent rating by KBRA (if then rated by KBRA), 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
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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 prospectus supplement.
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 (other than a Non-Serviced Mortgage Loan); except that the Mortgage Loan Documents with respect to the Servicing Shift Loan Combinations will be delivered to the Custodian on or prior to the Closing Date, and such Mortgage Loan Documents (other than the Note evidencing the Mortgage Loan included in the Issuing Entity) will be transferred to the custodian related to the securitization of the related Controlling Companion 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
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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 prospectus supplement, 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 prospectus supplement.
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 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
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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 prospectus supplement. 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 prospectus supplement 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 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
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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;providedthat with respect to the obligations of LCF, Ladder Holdings, TRS LLLP and REIT LLLP will agree, pursuant to the related Mortgage Loan Purchase Agreement, to guarantee payment in connection with the performance of such obligations. 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 prospectus supplement. 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 commercial mortgage servicing, asset management or (solely with respect to the Operating Advisor) commercial mortgage surveillance, portfolio,providedthat certain conditions are satisfied, including obtaining a No Downgrade Confirmation (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 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
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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 its respective duties thereunder or by reason of negligent disregard of its respective 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 its respective duties thereunder or by reason of negligent disregard of its respective 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 holder of the related 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 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 servicer, special servicer, 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, reasonable legal fees and related costs, judgments and any other costs, liabilities, fees and expenses incurred in connection with servicing and administration of the 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.
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.
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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 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 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
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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 2 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 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;
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(f) (i) any of Moody’s or KBRA 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 or KBRA, as applicable, 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 (ii) 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 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 this clause (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 to clause (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 to clause (f) of the definition thereof, 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
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Master Servicer to obtain a No Downgrade Confirmation (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 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
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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 in clause (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 (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; |
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(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 (providedthat 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; |
(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”); and |
(f) | in the event of a TIA Applicability Determination (as defined below), to modify, eliminate or add to the provisions of the Pooling and Servicing Agreement (A) to the extent necessary to effect the qualification of the Pooling and Servicing Agreement under the TIA or under any similar federal statute hereafter enacted and to add to the Pooling and Servicing Agreement such other provisions as may be expressly required by the TIA, and (B) to modify such other provisions of the Pooling and Servicing Agreement to the extent necessary to make those provisions consistent with, and conform to, the modifications made pursuant to clause (A);provided that any amendment pursuant to this clause (f) will be at the sole cost and expense of the Depositor. |
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 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 for federal income tax purposes.
In a number of cases that have been filed alleging certain violations of the Trust Indenture Act of 1939, as amended (the “TIA”), certain federal district courts have held that the TIA was applicable to certain agreements similar to the Pooling and Servicing Agreement and that the mortgage-backed certificates issued pursuant to such agreements were not exempt under Section 304(a)(2) of the TIA. (See for example,In Retirement Bd. of the Policemen’s Annuity and Benefit Fund of the City of Chicago,et al. v. The Bank of New York Mellon, 11 Civ. 5459 (WHP) (S.D.N.Y. Apr. 3, 2012),Policemen’s Annuity and Benefit Fund of the City of Chicago v. Bank of America,et.al, 12 Civ. 2865 (KBF) (S.D.N.Y. Dec. 7, 2012) andAmerican Fidelity Assurance Co. v. Bank of New York Mellon, No. Civ-11-1284-D (W.D. Okla. Dec. 26, 2013)). These rulings are contrary to more than three decades of market and Securities and Exchange Commission practice. In addition, on December 23, 2014, the United States Court of Appeals for the Second Circuit reversed the lower court’s ruling inRetirement Bd. of the Policemen’s Annuity regarding the applicability of the TIA to trusts governed by pooling and servicing agreements under New York law, holding that the mortgage-backed securities at issue are exempt under Section 304(a)(2) of the TIA. If any of the other rulings by the federal district courts is affirmed on appeal, that would likely result in the Pooling and Servicing Agreement being required to be qualified under the TIA. Depending on the circumstances, rulings by lower courts similar to the foregoing cases, as well as litigation involving the Pooling and Servicing Agreement, could also result in its being required to be qualified under the TIA. It
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is expected that the Depositor, in consultation with the Trustee, will perform on an ongoing basis an analysis as to whether the TIA applies to the Pooling and Servicing Agreement.
In the event that subsequent to the date of this prospectus supplement the Depositor, upon consultation with the Trustee, has determined that the TIA does apply to the Pooling and Servicing Agreement or that qualification under the TIA or any similar federal statute hereafter enacted is required (a “TIA Applicability Determination”), the Pooling and Servicing Agreement will provide that it will be amended without the consent of any Certificateholder to the extent necessary to comply with the TIA. In addition, if the TIA were to apply to the Pooling and Servicing Agreement, the TIA provides that certain provisions would automatically be deemed to be included in the Pooling and Servicing Agreement (and the Pooling and Servicing Agreement thus would be statutorily amended without any further action);provided,however, that it will be deemed that the parties to the Pooling and Servicing Agreement have agreed that, to the extent permitted under the TIA, the Pooling and Servicing Agreement will expressly exclude any non-mandatory provisions that (x) conflict with the provisions of the Pooling and Servicing Agreement or would otherwise alter the provisions of the Pooling and Servicing Agreement or (y) increase the obligations, liabilities or scope of responsibility of any party to the Pooling and Servicing Agreement. Generally, the TIA provisions include additional obligations of the Trustee, certain additional reporting requirements, and heightened conflict of interest rules which may require, for example, that the Trustee resign in the event the interests of the holders of the various classes of Certificates differ from one another under certain circumstances and that one or more other trustees be appointed in its place. While investors should understand the potential for such amendments, investors should not purchase Certificates with any expectation that the TIA will be determined to apply or that any such amendments will be made.
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 and the holders of any Non-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 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 or, if applicable, the holder of any affected Serviced Companion Loan, 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
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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 in clause (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 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) (a) the applicable replacement master servicer or special servicer, as applicable, confirms in writing that it was appointed to act as the master servicer or special servicer on a transaction level basis, as applicable, on the closing date of a commercial mortgage loan securitization with respect to which Moody’s rated one or more classes of certificates and one or more of such classes of certificates are still outstanding and rated by Moody’s and (b) Moody’s has not cited servicing concerns of the applicable replacement as the sole or
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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 rated by Moody’s in any other CMBS transaction serviced by the applicable servicer prior to the time of determination, if Moody’s is the non-responding Rating Agency; (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; or (iii) the applicable replacement master servicer or special servicer, as applicable, confirms in writing that KBRA 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 CMBS in a transaction serviced by the applicable servicer prior to the time of determination, if KBRA is the non-responding Rating Agency, and (z) with respect to a replacement of or successor to the Operating Advisor in any circumstance where a No Downgrade Confirmation is required with respect to such successor operating advisor, 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 CMBS transaction with respect to which the replacement operating advisor acts as trust advisor or operating advisor prior to the time 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.
In connection with the delivery by the Master Servicer or Special Servicer to the 17g-5 Information Provider of any information, report, notice or document for posting to the 17g-5 Information Provider’s Website, the 17g-5 Information Provider is required to notify (which may include automatic electronic notifications) the Master Servicer or Special Servicer when such information, report, notice or document has been posted. The Master Servicer or Special Servicer, as applicable, may, but is not obligated to send such information, report, notice or document to the applicable Rating Agency following the earlier of (a) receipt of such notice from the 17g-5 Information Provider and (b) 12:00 p.m. on the first Business Day following the date the Master Servicer or the Special Servicer, as applicable, has provided such information, report, notice or other document to the 17g-5 Information Provider.
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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;providedthat 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 XP-A, Class XS-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 XP-A, Class XS-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.
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:
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(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, the Special Servicer 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 the Issuing Entity (or any designated portion thereof) 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 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, none of the Trust REMICs will 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
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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 prospectus supplement 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 prospectus supplement.
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 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.
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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 any 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;provided, that with respect to any Non-Serviced Mortgage Loan, the Special Servicer will be permitted to sell (with the consent of the Directing Holder prior to a Control Termination Event) such Non-Serviced Mortgage Loan if it determines in accordance with the Servicing Standard (taking into consideration the rights and obligations of the holder of the Non-Serviced Companion Loan and the related special servicer with respect thereto under the related Intercreditor Agreement and pooling and servicing agreement) that such action would be in the best interests of the Certificateholders. The Special Servicer is required to accept the first (and, if multiple offers are contemporaneously received, the highest) cash offer received from any person that constitutes a fair price for the Defaulted Mortgage Loan. 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 reimbursable by such Interested Person. 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 affiliate) 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
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related Serviced Companion Loan, as a collective whole as if such Certificateholders and Serviced Companion Loan holder constituted a single lender.
With respect to each of the Equity Inns Portfolio Mortgage Loan, the Harvey Building Products Mortgage Loan and the Springfield Mall Mortgage Loan, if such Mortgage Loan becomes a Defaulted Mortgage Loan, the 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 Pooling and Servicing Agreement.
With respect to each of the Servicing Shift Mortgage Loans, if such Servicing Shift Mortgage Loan becomes a Defaulted Mortgage Loan, the Special Servicer (or, on or after the applicable Servicing Shift Securitization Date, the related Servicing Shift 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 Pooling and Servicing Agreement or the Servicing Shift Pooling and Servicing Agreement, as the case may be.
If the 11 Madison Avenue 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.
If the 40 Wall Street Mortgage Loan becomes a Defaulted Mortgage Loan, the WFCM 2015-LC22 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 WFCM 2015-LC22 Pooling and Servicing 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 may have the right 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 Excluded Special Servicer, if any, the Certificate Administrator, the Operating Advisor, the Directing Holder, any Certificateholder, any Companion Loan Holder (solely in connection with the related Serviced Loan Combination), any independent contractor engaged by the Special Servicer or any affiliate of any of the preceding entities or any Borrower Party.
Modifications
The Pooling and Servicing Agreement will permit (a) the Master Servicer (subject to the Special Servicer’s processing and/or consent if the related modification or waiver constitutes a Major Decision or Special Servicer Decision) or (b) with respect to any 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
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the extent described above under “—The Operating Advisor” in this prospectus supplement, 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 (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 any Trust REMIC to fail to qualify as a REMIC or (B) result in the imposition of a tax upon any 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)). Each of the Master Servicer and the Special Servicer may rely on an opinion of counsel in meeting this requirement. In order to meet the foregoing requirements, in the case of a release of real property collateral securing a Mortgage Loan, the Master Servicer or Special Servicer, as applicable, will be required to observe the REMIC requirements of the Code with respect to a required payment of principal if the loan-to-value ratio immediately after the release exceeds 125% with respect to the related real property collateral.
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 lender (or its designee, the Master Servicer or the Special Servicer, as applicable), 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 (or, if a Control Termination Event has occurred and is continuing but a Consultation Termination Event has not occurred, after consultation with 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 and processing of the Special Servicer is required to any modification, waiver or amendment 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 under “—The Directing Holder” and “—The Operating Advisor” in this prospectus
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supplement. With respect to any non-Specially Serviced Loan (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 or denying leases, lease modifications or amendments or any requests for subordination, non-disturbance and attornment agreements or other similar agreements for (i) all ground leases, including any determination whether to cure any borrower defaults relating to any ground lease, and (ii) all other leases in excess of the lesser of (y) 30,000 square feet and (z) 30% of the net rentable area at the related Mortgaged Property so long as it is considered a “major lease” or otherwise reviewable by the lender under the related Mortgage Loan Documents;
(b) approving any waiver regarding the receipt of financial statements (other than immaterial timing waiver including late financial statements);
(c) approving an annual budget submitted by a borrower with respect to a Mortgage Loan with a DSCR below 1.25x (to the extent lender approval is required under the related Mortgage Loan documents), if such budget includes material (more than 10%) increases in operating expenses or payments to entities actually known by the Master Servicer to be affiliates of the related borrower (excluding affiliated managers paid at fee rates agreed to at the origination of the related Mortgage Loan);
(d) approving easements that materially affect the use or value of a Mortgaged Property or the borrower’s ability to make payments with respect to the related Mortgage Loan;
(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, (ii) a modification of the type of defeasance collateral required under the Mortgage Loan or Loan Combination documents such that defeasance collateral 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 required other than confirming that the conditions in the related Mortgage Loan Documents have been satisfied (including determining whether any applicable terms or tests are satisfied), any request to incur additional debt in accordance with the terms of the Mortgage Loan Documents;
(g) any requests for the funding or disbursement of amounts from any escrow accounts, reserve funds or letters of credit held as “performance”, “earn-out” or “holdback” escrows or reserves, including the funding or disbursement of any such amounts with respect to any of the Mortgage Loans secured by the Mortgaged Properties specifically identified in the Pooling and Servicing Agreement, other than routine and/or customary escrow and reserve fundings or disbursements for which the satisfaction of performance-related criteria is not required pursuant to the terms of the related Mortgage Loan Documents (for the avoidance of doubt, any request for the funding or disbursement of ordinary course impounds, repair and replacement reserves, lender approved budget and operating expenses, and tenant improvements pursuant to an approved lease, each in accordance with the Mortgage Loan Documents or any other funding or disbursement as mutually agreed upon by the Master Servicer and the Special Servicer, will not constitute a Special Servicer Decision);
(h) in circumstances where no lender discretion is required other than confirming satisfaction of the applicable terms of the Mortgage Loan documents (including determining whether any applicable
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terms or tests are satisfied), processing requests for any release of collateral or any acceptance of substitute or additional collateral for a Mortgage Loan; provided that, in any case, Special Servicer Decisions will not include (i) grants of easements or rights of way that do not materially affect the use or value of the Mortgaged Property or the borrower’s ability to make any payments with respect to the Mortgage Loan; (ii) the release, substitution or addition of collateral securing any Mortgage Loan (other than Non-Serviced Mortgage Loans) or Serviced Loan Combination in connection with a defeasance of such collateral; or (iii) requests that are related to any condemnation action that is pending, or threatened in writing, and would affect a non-material portion of the Mortgaged Property; provided that such release or substitution or addition of collateral is not a Major Decision; and
(i) any modification, consent to a modification or waiver of any material term of any intercreditor or similar agreement related to a Mortgage Loan or Serviced Loan Combination, or any action to enforce rights with respect thereto;
provided,however, that 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. If the Master Servicer and Special Servicer mutually agree that the Master Servicer will process a Special Servicer Decision with respect to any non-specially Serviced Loan, the Master Servicer and the Special Servicer will each be entitled to 50% of any fee paid in connection with 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 under “—The Directing Holder” and “—The Operating Advisor” in this prospectus supplement. 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.
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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 prospectus supplement.
See also “—The Directing Holder” and “—The Operating Advisor” above in this prospectus supplement 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.
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 1.0% of the Initial Outstanding Pool Balance. 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 XP-A, Class XS-A, Class X-B, Class X-C, Class A-M, Class B, Class C, Class D and Class E 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 XP-A, Class XS-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 XP-A, Class XS-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 and Class X-F Certificates, the holders of the Class X-D, Class X-E and 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
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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, Class D and Class E 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 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 F, Class G, Class H and Class J Certificates, then “Sole Certificateholder” means the Certificateholder of 100% of the Class F, Class G, Class H and Class J 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 prospectus supplement 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, 100% of any Modification Fees with respect to Mortgage Loans (and the related Serviced Companion Loans) that are not Specially Serviced Loans (50% where the processing by, or consent of the Special Servicer is required), 100% of any defeasance fees, 100% of assumption fees with respect to Mortgage Loans (and the related Serviced Companion Loans) that are not Specially Serviced Loans (50% where the processing by, or consent of the Special Servicer is required), 100% of any and all demand fees, beneficiary statement charges and other usual and customary charges and fees (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, 100% of assumption application fees with respect to Mortgage Loans (and the related Serviced Companion Loans) that are not Specially Serviced Loans in the case of assumptions processed by the Master Servicer (whether or not the consent of the Special Servicer is required); (iii) Net Prepayment Interest Excess, if any; (iv) 100% of charges for checks returned for insufficient funds; (v) 50% of all fees paid in connection with a Major Decision or a Special Servicer Decision with respect to all Mortgage Loans that are not Specially Serviced Loans; and
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(vi) Net Default Interest and any late payment 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. 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 servicer servicing the Non-Serviced Mortgage Loan that are allocated to the Non-Serviced Mortgage Loan (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.” With respect to each of the Non-Serviced Mortgage Loans, the servicing fees of the related servicer will accrue on the same basis as interest accrues on the related Loan Combination.
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 prospectus supplement 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 prospectus supplement.
Servicing Transfer Event. The duties of the Special Servicer generally 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 prospectus supplement, to include any Mortgage Loan (other than a Non-Serviced 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 |
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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 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 related 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 in clause (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; |
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(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 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 required by the related intercreditor agreement or Pooling and Servicing Agreement, as applicable. If applicable, see “Description of the Mortgage Pool—Loan Combinations” in this prospectus supplement.
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 related 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 in clause (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) 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.
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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 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 Non-Serviced Mortgage Loan or Servicing Shift Mortgage Loan, 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. For the avoidance of doubt, with respect to any Excluded Mortgage Loan, the Controlling Class Representative and the Controlling Class Certificateholders that is a Borrower Party with respect to such Excluded Mortgage Loan or Excluded Controlling Class Mortgage Loan, as applicable, will be prohibited from accessing Asset Status Reports, Final Asset Status Reports or any summaries thereof (and any other information identified in the Pooling and Servicing Agreement) solely related to such Excluded Mortgage Loan or Excluded Controlling Class Mortgage Loan, as applicable. The Pooling and Servicing Agreement will require the Controlling Class Representative and the Controlling Class Certificateholders to certify that they acknowledge and agree that they are prohibited from accessing and reviewing (and they will agree not to access and review) any Excluded Information with respect to such Excluded Mortgage Loans or Excluded Controlling Class Mortgage Loans, as applicable (other than such information that is aggregated with information of other Mortgage Loans at a pool level to which the Controlling Class Representative and the Controlling Class Certificateholders are entitled to access).
With respect to each Mortgage Loan (other than Non-Serviced Mortgage Loans or Servicing Shift Mortgage Loans), 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 the greater of (i) 0.25% per annum and (ii) the rate that would result in a special servicing fee of $1,000 for the related month of the Stated Principal Balance of such Specially Serviced
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Loan or REO Loan, as applicable (the “Special Servicing Fee Rate”). The special servicer with respect to each Non-Serviced Loan Combination will accrue a comparable special servicing fee with respect to such Non-Serviced Loan Combination pursuant to the related pooling and 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 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;providedthat 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 related 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 other 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.
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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, (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 other 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 any of its affiliates if within 90 days after the transfer of the Defaulted Mortgage Loan to special servicing, |
· | 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 related mortgage loan purchase agreement related to 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 |
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· | 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, in accordance with the Pooling and Servicing Agreement.
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 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:
· | 100% of any Modification Fees related to Specially Serviced Loans (and 50% of such Modification Fees on Mortgage Loans (and the related Serviced Companion Loans) that are not Specially Serviced Loans when processing by and/or consent of the Special Servicer is required), |
· | 100% of any assumption fees and consent fees on Specially Serviced Loans (and 50% of such assumption fees and consent fees on Mortgage Loans (and the related Serviced Companion Loans) that are not Specially Serviced Loans when processing by and/or consent of the Special Servicer is required), |
· | 100% of assumption application fees on (x) Specially Serviced Loans and (y) Mortgage Loans that are not Specially Serviced Loans for which the assumptions are processed by the Special Servicer, |
· | 100% of any and all demand fees, beneficiary statement charges and other usual and customary charges and fees (but not including Prepayment Premiums or Yield Maintenance Charges) on Specially Serviced Loans, |
· | 50% of all fees paid in connection with a Major Decision or a Special Servicer Decision with respect to all Mortgage Loans that are not Specially Serviced Loans, |
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· | 100% of all fees paid in connection with a Major Decision or a Special Servicer Decision with respect to all Mortgage Loans that are Specially Serviced Loans, |
· | any interest or other income earned on deposits in the REO Accounts, and |
· | 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. |
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 servicer that is servicing 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 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 and to reimburse the Issuing Entity for certain expenses of the Issuing Entity, if applicable, as provided in the Pooling and Servicing Agreement.
The other 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.
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The Pooling and Servicing Agreement will provide that, with respect to each Collection Period, the Special Servicer must deliver or cause to be delivered to the Master Servicer, without charge and no later than two business days following the related Determination Date (and the Master Servicer, to the extent it has received, will deliver or cause to be delivered to the Certificate Administrator, without charge and on each Master Servicer Remittance Date), 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 provided that the Special Servicer will not be required to deliver such reports for any Collection Period during which the Special Servicer did not receive any Disclosable Special Servicer Fees. 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 or 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 (other than a Non-Serviced 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 other than to the extent otherwise included in the Distribution Date Statement for the applicable period;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 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 and 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.
If either a Servicing Shift Mortgage Loan or any related Companion Loan becomes a Specially Serviced Loan prior to the related Servicing Shift Securitization Date, then the related Servicing Shift Loan Combination will be specially serviced under and in accordance with the Pooling and Servicing Agreement and the Special Servicer will be entitled to receive the same special servicing compensation for such Servicing Shift Loan Combination as if each related Companion Loan was a mortgage loan under the Pooling and Servicing Agreement. Prior to the applicable Servicing Shift Securitization Date, no other special servicer will be entitled to any such compensation or have such rights and obligations. On and after the applicable Servicing Shift Securitization Date, the related Servicing Shift Loan Combination will be serviced under the related Servicing Shift Pooling and Servicing Agreement. If such
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Servicing Shift Loan Combination is being specially serviced when the related Servicing Shift Companion Loan is securitized, the Special Servicer will be entitled to compensation for the period during which it acted as special servicer with respect to such Servicing Shift Loan Combination, including its share of any liquidation or workout fees and its share of any additional servicing compensation as well as all surviving indemnity and other rights in respect of such special servicing role.
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 Loans
Pursuant to the terms of the related intercreditor agreement, each Non-Serviced Mortgage Loan is being serviced and administered pursuant to a separate pooling and servicing agreement, which contains servicing provisions substantially similar to, but not necessarily identical with, the provisions 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 Loans. 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 contains 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. Although the other pooling and servicing agreements currently governing the servicing of the Non-Serviced Loan Combinations are generally similar to the Pooling and Servicing Agreement as regards servicing arrangements, investors should consider, among other things:
· | 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 (or a sub-servicer on its behalf) will be entitled to receive a primary servicing fee on the related Non-Serviced Mortgage Loan. |
· | 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. |
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· | 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, among other things, time periods and timing matters, terminology, allocation of ministerial duties between multiple servicers or other service providers, the circumstances under which appraisals must be obtained, the calculation of appraisal reduction events, Major Decisions (or the equivalent), servicer termination events, rating requirements for accounts and permitted investments, circumstances under which a master servicer must obtain special servicer consent, and notice or rating agency communication and confirmation requirements. |
Notwithstanding the foregoing, following the applicable Servicing Shift Securitization Date, the related Servicing Shift Loan Combination will be serviced by the related Servicing Shift Master Servicer and the related Servicing Shift Special Servicer pursuant to the terms of the related Servicing Shift Pooling and Servicing Agreement. Although the related Intercreditor Agreement imposes some requirements regarding the terms of the related Servicing Shift Pooling and Servicing Agreement (and it is expected that such Servicing Shift Pooling and Servicing Agreement will contain servicing provisions similar to, but not identical with, the provisions of the Pooling and Servicing Agreement), the securitization to which the related Controlling Companion Loan is to be contributed has not been determined, and accordingly, the servicing terms of such Servicing Shift Pooling and Servicing Agreement are unknown. See “Description of the Mortgage Pool—Loan Combinations—32 Avenue of the Americas Loan Combination” in this prospectus supplement.
Each Non-Serviced Mortgage Loan will not be subject to the Servicing Transfer Events described under “The Pooling and Servicing Agreement—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 prospectus supplement.
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; |
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(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); |
(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; |
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(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; |
(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; |
(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; |
(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 |
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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; |
(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 (providedthat this prospectus supplement that relates to 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:
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(a) | the following “deal documents”: |
· | this prospectus supplement; |
· | 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”: |
· | 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 prospectus supplement; |
· | 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; |
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· | 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) on the Certificate Administrator’s Website with respect to such related Excluded Controlling Class Mortgage Loan (but will be entitled to receive all other information relating to a Mortgage Loan with respect to which it is not a Borrower Party pursuant to the Pooling and Servicing Agreement). The Pooling and Servicing 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 related 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 (provided that the Special Servicer will be entitled to receive and review any Operating Advisor Annual Report with respect to Specially Serviced Loans that it is servicing), 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”.
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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 the Non-Serviced Mortgage Loans or related Mortgaged Properties) 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 any Non-Serviced Mortgage Loan, to the other certificate administrator to forward 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.
The Certificate Administrator’s website will initially be located at www.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
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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.
“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 mortgagor, 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, subject to the following proviso;provided,further, that any Excluded Controlling Class Holder solely with respect to the related Excluded Controlling Class Mortgage Loan and the Special Servicer solely with respect to the related Excluded Special Servicer 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 such certificate (a) 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 this prospectus supplement and the accompanying prospectus and either (b)(1) such person is not a borrower, a mortgagor, 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 (2) such person is a Borrower Party, in which case (A) if such person is the Controlling Class Representative or a beneficial owner of a Controlling Class Certificate, such person will not have access solely to the related Excluded Information, or (B) if such person is not the Controlling Class Representative or a beneficial owner of a Controlling Class Certificate, in which case such person will only receive access to the Distribution Date Statements prepared by the Certificate Administrator.
“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.
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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 (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., Thomson Reuters Corporation, Trepp, LLC, Intex Solutions, Inc., Interactive Data Corporation and Markit LLC) 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 December 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 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
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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 2017;provided, however, that, with respect to any obligation of the Master Servicer or Special Servicer, as applicable, to provide a quarterly analysis or update, such quarterly analysis or update with respect to the first calendar quarter of each year will not be required to the extent provided in the then-current applicable CREFC® guidelines.
(b) Annually, on or before June 30 of each year, commencing in 2017, 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 2016), 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 or Serviced REO Property) of annual year-end operating statements, if any (in each case, commencing with the statements for year-end 2016), with respect to any Mortgaged Property (except with respect to any Non-Serviced Mortgage Loan) 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.
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
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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 is http://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.
USE OF PROCEEDS
The net proceeds from the sale of the Offered Certificates will be used by the Depositor to pay part of the purchase price for the Mortgage Loans.
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 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 designated portions of the Issuing Entity. The Lower-Tier REMIC will hold the Mortgage Loans (other
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than the entitlement to any Excess Interest and the related distribution account)and certain other assets, will issue certain classes of regular interests (the “Lower-Tier Regular Interests”) to the Upper-Tier REMIC and will issue the Class LR Certificates as the sole class of residual interests in the Lower-Tier REMIC. 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 XP-A, Class XS-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, Class H and Class J 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, the MAD 2015-11MD Trust and Servicing Agreement, the WFCM 2015-LC22 Pooling and Servicing Agreement, on and after the applicable Servicing Shift Securitization Date, the related Servicing Shift Pooling and Servicing Agreement and each Intercreditor Agreement, and (iii) compliance with any changes in the law, including any amendments to the Code or applicable Treasury regulations thereunder, in the opinion of Sidley Austinllp, 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 XP-A, Class XS-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, Class H and Class J 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 Sidley Austinllp, (i) the portions of the Issuing Entity consisting of the entitlement to any 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, 9 of the Mortgaged Properties, representing approximately 12.8% of the Trust REMIC’s basis in the Initial Outstanding Pool Balance (by Allocated Loan Amount), are multifamily properties. Certificateholders should consult their tax advisors on 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 all or a portion of one or more, regular interests in the Upper-Tier REMIC. In general, (i) amounts of interest, original issue discount and market discount on an Offered Certificate will be taxable as ordinary income to the holder of an Offered Certificate (an “Offered Certificateholder”), (ii) amounts of premium will be treated as an offset to ordinary income, and (iii) other amounts will be treated as a return of capital (to the extent of the Offered Certificateholder’s
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basis in the Offered Certificate). The Offered Certificates will represent newly originated debt instruments for federal income tax purposes. Offered Certificateholders must use the 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. Additional guidance is provided by the legislative history accompanying enactment of the Tax Reform Act of 1986. Offered Certificateholders should be aware, however, that such guidance does not adequately address certain issues relevant to prepayable securities, such as the Offered Certificates. Investors are encouraged to consult their tax advisors about the discussions in this prospectus supplement and the accompanying 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 XP-A and Class XS-A Certificates) as qualified stated interest.
For the purposes of accruing original issue discount, if any, determining whether such original issue discount is de minimis and amortizing any premium, the prepayment assumption will be 0% CPR, provided that it is assumed that the ARD Loans 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 C Certificates will be issued with a de minimis amount of original issue discount for federal income tax purposes.
In addition, it is anticipated that the Certificate Administrator will treat the Class XP-A and Class XS-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 XP-A or Class XS-A Certificates attributable to rapid prepayments with respect to the Mortgage Loans will not be deductible currently. Holders of Class XP-A and Class XS-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, even if there are no further prepayments on the Mortgage Loans. See “Federal
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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 A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class A-M and Class B 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 prospectus supplement. 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.
Changes Made by the Bipartisan Budget Act of 2015
On November 2, 2015, President Obama signed into law the Bipartisan Budget Act of 2015 (the “2015 Budget Act”), which includes new audit rules affecting entities treated as partnerships, their partners and the persons that are authorized to represent entities treated as partnerships in IRS audits and related procedures. Under the 2015 Budget Act, these rules will also apply to REMICs the holders of their residual interests and the trustees authorized to represent REMICs in IRS audits and related procedures (“tax matters persons” or “TMPs”). These new audit rules are scheduled to become effective for taxable years beginning with 2018 and will apply to both new and existing REMICs.
In addition to other changes, under the 2015 Budget Act, (1) unless a REMIC elects otherwise, taxes arising from IRS audit adjustments are required to be paid by the REMIC rather than by its residual interest holders, (2) a REMIC appoints one person to act as its sole representative in connection with IRS audits and related procedures and that representative’s actions, including agreeing to adjustments to REMIC taxable income, will be binding on residual interest holders more so than a TMP’s actions under the current rules and (3) if the IRS makes an adjustment to a REMIC’s taxable year, the holders of residual interests for the audited taxable year, may have to take the adjustment into account for the taxable year in which the adjustment is made rather than for the audited taxable year.
The parties responsible for the tax administration of the REMICs described herein will have the authority to utilize, and will be required to utilize, any exceptions available under the new provisions (including any changes) and IRS regulations so that a REMIC’s residual interest holders, to the fullest extent possible, rather than the REMIC itself, will be liable for any taxes arising from audit adjustments to the REMIC’s taxable income. It is unclear how any such elections may affect the procedural rules available to challenge any audit adjustment that would otherwise be available in the absence of any such elections. Residual interest holders should discuss with their own tax advisors the possible effect of the new rules on them.
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
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any person that 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 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,” purchasers of Offered Certificates should consider the state and local income tax consequences of the acquisition, ownership, and disposition of the Offered Certificates. State and local 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 or locality. Potential purchasers are encouraged to consult their own tax advisors with respect to the various state and local 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, or a governmental plan (as defined in Section 3(32) of ERISA) that is subject to any federal, state or local law (“Similar Law”) which is, to a material extent, similar to the foregoing provisions of ERISA or the Code (each, 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 a Plan in the Certificates. The Department has granted substantially identical administrative exemptions to Deutsche Bank Securities Inc., Department Final Authorization Number 97-03E, and to Cantor Fitzgerald & Co., Department Final Authorization Number 2011-05E, each 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 the underwriters. The Exemption might be applicable to the initial purchase, the holding, and the subsequent resale by a 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 a Plan is on terms (including the price for the Certificates) that are at least as favorable to the Plan as they would be in an arm’s length transaction with an unrelated party; |
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(b) | the Offered Certificates acquired by the 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 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 described above 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 with respect to the Offered Certificates. 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 a 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 a 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 with respect to the related Offered Certificate. 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 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 Plans for at least one year prior to any 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 possibly 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 Plan purchaser or the 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 a 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 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.
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Moreover, the Exemption can provide relief from certain self-dealing/conflict of interest prohibited transactions that may occur if a Plan fiduciary causes a 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 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 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 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 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”).
Before purchasing an Offered Certificate, a fiduciary of a Plan should make its own determination (a) as to the availability of the exemptive relief provided by the Exemption, or (b) the availability of any other ERISA prohibited transaction exemptions and whether the conditions of any such exemption will be applicable to such purchase. A fiduciary of a Plan that is not subject to ERISA should make its own determination as to the need for and the availability of any exemptive relief under any Similar Law.
Any fiduciary of a Plan considering whether to purchase an Offered Certificate should also 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, or, as applicable, Similar Law, to such investment. 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 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 with regards to 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
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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 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 prospectus supplement).
See “Legal Investment” in the prospectus.
METHOD OF DISTRIBUTION (UNDERWRITER CONFLICTS OF INTEREST)
Subject to the terms and conditions set forth in the Underwriting Agreement, dated as of November 6, 2015 (the “Underwriting Agreement“), between the Depositor, German American Capital Corporation, Deutsche Bank Securities Inc., Cantor Fitzgerald & Co. and Jefferies LLC (collectively, the “Underwriters“), the Underwriters have agreed to purchase, and the Depositor has agreed to sell to the Underwriters, the Offered Certificates. It is expected that delivery of the Offered Certificates will be made only in book-entry form through the Same Day Funds Settlement System of DTC on or about November 17, 2015, against payment therefor in immediately available funds.
In the Underwriting Agreement, the Underwriters have agreed, subject to the terms and conditions set forth therein, to purchase the Certificate Balance (or, in the case of the Class XP-A and Class XS-A Certificates, the Notional Balance) of each Class of Offered Certificates set forth below, subject in each case to a variance of 5.0%:
Class | Deutsche Bank Securities Inc. | Cantor Fitzgerald & Co. | Jefferies LLC | ||||||||
Class A-1 | $ | 39,109,000 | $ | 0 | $ | 0 | |||||
Class A-2 | $ | 210,190,000 | $ | 0 | $ | 0 | |||||
Class A-SB | $ | 53,371,000 | $ | 0 | $ | 0 | |||||
Class A-3 | $ | 125,000,000 | $ | 0 | $ | 0 | |||||
Class A-4 | $ | 244,968,000 | $ | 0 | $ | 0 | |||||
Class XP-A | $ | 733,896,000 | $ | 0 | $ | 0 | |||||
Class XS-A | $ | 733,896,000 | $ | 0 | $ | 0 | |||||
Class A-M | $ | 59,258,000 | $ | 2,000,000 | $ | 0 | |||||
Class B | $ | 51,649,000 | $ | 0 | $ | 0 | |||||
Class C | $ | 43,241,000 | $ | 0 | $ | 0 |
The Underwriting Agreement provides that the obligation of each Underwriter to pay for and accept delivery of the Offered Certificates is subject to, among other things, the receipt of certain legal opinions and to the conditions, among others, that no stop order suspending the effectiveness of the Depositor’s registration statement will be in effect, and that no proceedings for such purpose will be pending before or threatened by the SEC.
The distribution of the Offered Certificates by the Underwriters may be effected from time to time in one or more negotiated transactions, or otherwise, at varying prices to be determined at the time of sale. Proceeds to the Depositor from the sale of the Offered Certificates, before deducting expenses payable by the Depositor, will be approximately 108.2137218688% of the aggregate Certificate Balance of the Offered Certificates with a principal balance, plus accrued interest. Each Underwriter may effect such transactions by selling its Offered Certificates to or through dealers, and such dealers may receive compensation in the form of underwriting discounts, concessions or commissions from the Underwriter for whom they act as agent. In connection with the sale of the Offered Certificates, each Underwriter may be deemed to have received compensation from the Depositor in the form of underwriting compensation. Each Underwriter and any dealers that participate with such Underwriter in the distribution of the Offered Certificates may be deemed to be underwriters and any profit on the resale of the Offered Certificates positioned by them may be deemed to be underwriting discounts and commissions under the Securities Act of 1933, as amended.
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The Underwriting Agreement or a separate indemnification agreement provides that the Depositor and the Mortgage Loan Sellers will indemnify the Underwriters against certain civil liabilities under the Securities Act of 1933, as amended, or contribute to payments to be made in respect thereof.
There can be no assurance that a secondary market for the Offered Certificates will develop or, if it does develop, that it will continue. The primary source of ongoing information available to investors concerning the Offered Certificates will be the reports distributed by the Certificate Administrator discussed in this prospectus supplement under “The Pooling and Servicing Agreement—Reports to Certificateholders; Available Information.” Except as described in this prospectus supplement under “The Pooling and Servicing Agreement—Reports to Certificateholders; Available Information,” there can be no assurance that any additional information regarding the Offered Certificates will be available through any other source. In addition, the Depositor is not aware of any source through which price information about the Offered Certificates will be generally available on an ongoing basis. The limited nature of such information regarding the Offered Certificates may adversely affect the liquidity of the Offered Certificates, even if a secondary market for the Offered Certificates becomes available.
Deutsche Bank Securities Inc. is an affiliate of Deutsche Mortgage & Asset Receiving Corporation, the Depositor, and German American Capital Corporation, a Sponsor and a Mortgage Loan Seller. Cantor Fitzgerald & Co. is an affiliate of Cantor Commercial Real Estate Lending, L.P., a Sponsor and a Mortgage Loan Seller, and Berkeley Point Capital LLC, a Primary Servicer. Jefferies LLC is an affiliate of Jefferies LoanCore LLC, a Sponsor and a Mortgage Loan Seller. See “Risk Factors—Risks Related to Conflicts of Interest—Potential Conflicts of Interest of the Underwriters and Their Affiliates” in this prospectus supplement.
Pursuant to Rule 15c6-1 under the Exchange Act, trades in the secondary market generally are required to settle in 3 business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade Offered Certificates in the secondary market prior to such delivery should specify a longer settlement cycle, or should refrain from specifying a shorter settlement cycle, to the extent that failing to do so would result in a settlement date that is earlier than the date of delivery of such Offered Certificates.
A substantial portion of the net proceeds of this offering (after the payment of underwriting compensation and transaction expenses) is intended to be directed to affiliates of (i) Deutsche Bank Securities Inc., one of the Underwriters and one of the joint bookrunning managers with respect to 100.0% of each Class of Offered Certificates and co-lead managers with respect to each Class of Offered Certificates, (ii) Cantor Fitzgerald & Co., one of the Underwriters and one of the joint bookrunning managers with respect to 0.0% of each Class of Offered Certificates and co-lead managers with respect to each Class of Offered Certificates, and (iii) Jefferies LLC, one of the Underwriters and one of the co-managers. That flow of funds will occur by means of the collective effect of the payment by the Underwriters to the Depositor of the purchase price for the Offered Certificates and (i) the payment by the Depositor to German American Capital Corporation, an affiliate of Deutsche Bank Securities Inc., in its capacity as a Sponsor, of the purchase price for the GACC Mortgage Loans, (ii) the payment by the Depositor to Ladder Capital Finance LLC, in its capacity as a Sponsor, of the purchase price for the LCF Mortgage Loans, (iii) the payment by the Depositor to Cantor Commercial Real Estate Lending, L.P., an affiliate of Cantor Fitzgerald & Co., in its capacity as a Sponsor, of the purchase price for the CCRE Mortgage Loans and (iv) the payment by the Depositor to Jefferies LoanCore LLC, an affiliate of Jefferies LLC, in its capacity as a Sponsor, of the purchase price for the JLC Mortgage Loans. As a result of the circumstances described above, Deutsche Bank Securities Inc., Cantor Fitzgerald & Co. and Jefferies LLC have a “conflict of interest” within the meaning of Rule 5121 of the consolidated rules of The Financial Industry Regulatory Authority, Inc. In addition, other circumstances exist that result in the Underwriters or their affiliates having conflicts of interest, notwithstanding that such circumstances may not constitute a “conflict of interest” within the meaning of such Rule 5121. See “Risk Factors—Risks Related to Conflicts of Interest—Potential Conflicts of Interest of the Underwriters and Their Affiliates” in this prospectus supplement.
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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 Sidley Austinllp, New York, New York. Certain legal matters with respect to the Offered Certificates will be passed upon for the Underwriters by Sidley Austinllp, 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 investment grade credit ratings from the NRSROs engaged by the Depositor to rate such Class of Offered Certificates (together, the “Rating Agencies”).
Each of the Rating Agencies has agreed to perform ratings surveillance with respect to its ratings for so long as the related Classes of Offered Certificates remain outstanding. Fees for such ratings surveillance by the Rating Agencies are expected to be paid by the Depositor.
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 XP-A and Class XS-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. Therefore, the securities ratings of the Class XP-A and Class XS-A Certificates should be evaluated independently from similar ratings on other types of securities.
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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 related Classes of Offered Certificates and certain Classes of Private Certificates not offered by this prospectus supplement (although a Rating Agency may not ultimately issue ratings on all Classes of Certificates). The decision not to engage certain of the NRSROs to rate any Classes of Certificates was due, in part, to those NRSROs’ initial subordination levels for such Classes of Certificates and the decision to engage one or more of the Rating Agencies to only rate certain Classes of Certificates, but not others, was also due, in part, to those Rating Agencies’ initial subordination levels for such Classes of Certificates. Accordingly, if the Depositor selected such other NRSROs to rate the Offered Certificates or had it engaged the Rating Agencies to rate those other Classes of Certificates, their ratings of the Offered Certificates may have been different, and potentially lower, than those ratings ultimately assigned to the related Class of Offered Certificates by the Rating Agencies. Although unsolicited 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. In addition, the decision not to engage the Rating Agencies in the rating of a Class of Certificates to be issued in connection with this transaction may negatively impact the liquidity, market value and regulatory characteristics of those Classes of 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 prospectus supplement.
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 prospectus supplement. 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 prospectus supplement.
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 CALIFORNIA AND NEW YORK
The following discussion summarizes certain legal aspects of mortgage loans secured by real property in California (representing approximately 26.5% of the Initial Outstanding Pool Balance (by Allocated Loan Amount)) and New York (representing approximately 20.7% 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.
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
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sale, or by court appointed receiver or by the applicable county’s sheriff under a judicial foreclosure. Following certain judicial foreclosure sales, the related 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 related 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 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 related 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 related borrower or, under certain circumstances, guarantors. On the other hand, under certain circumstances, California law permits separate and even contemporaneous actions against both the related 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.
Mortgage loans in New York are generally secured by mortgages on the related real estate. Foreclosure of a mortgage is usually accomplished in judicial proceedings. After an action for foreclosure is commenced, and if the lender secures a ruling that is entitled to foreclosure ordinarily by motion for summary judgment, the court then appoints a referee to compute the amount owed together with certain costs, expenses and legal fees of the action. The lender then moves to confirm the referee’s report and enter a final judgment of foreclosure and sale. Public notice of the foreclosure sale, including the amount of the judgment, is given for a statutory period of time, after which the mortgaged real estate is sold by a referee at public auction. There is no right of redemption after the foreclosure sale. In certain circumstances, deficiency judgments may be obtained. Under mortgages containing a statutorily sanctioned covenant, the lender has a right to have a receiver appointed without notice and without regard to the adequacy of the mortgaged real estate as security for the amount owned.
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INDEX OF DEFINED TERMS
11 Madison Avenue Companion Loans | S-244 | |
11 Madison Avenue Intercreditor | ||
Agreement | S-244 | |
11 Madison Avenue Loan Combination | S-244 | |
11 Madison Avenue Mortgage Loan | S-243 | |
11 Madison Avenue Mortgaged Property | S-243 | |
11 Madison Avenue Non-Standalone | ||
Pari Passu Companion Loans | S-244 | |
11 Madison Avenue Noteholders | S-244 | |
11 Madison Avenue Pari Passu | ||
Companion Loans | S-244 | |
11 Madison Avenue Standalone | ||
Companion Loans | S-244 | |
11 Madison Avenue Standalone Pari | ||
Passu Companion Loans | S-243 | |
11 Madison Avenue Subordinate | ||
Companion Loan Holders | S-245 | |
11 Madison Avenue Subordinate | ||
Companion Loans | S-244 | |
17g-5 Information Provider | S-390 | |
2015 Budget Act | S-396 | |
32 Avenue of the Americas Companion | ||
Loans | S-240 | |
32 Avenue of the Americas Directing | ||
Holder | S-242 | |
32 Avenue of the Americas Intercreditor | ||
Agreement | S-240 | |
32 Avenue of the Americas Loan | ||
Combination | S-240 | |
32 Avenue of the Americas Mortgage | ||
Loan | S-240 | |
32 Avenue of the Americas Mortgaged | ||
Property | S-240 | |
32 Avenue of the Americas Non- | ||
Controlling Note Holder | S-243 | |
32 Avenue of the Americas Note A-1 | ||
Securitization Date | S-241 | |
32 Avenue of the Americas Noteholders | S-240 | |
32 Avenue of the Americas Pooling and | ||
Servicing Agreement | S-241 | |
40 Wall Street Companion Loans | S-257 | |
40 Wall Street Intercreditor Agreement | S-257 | |
40 Wall Street Loan Combination | S-257 | |
40 Wall Street Mortgage Loan | S-257 | |
40 Wall Street Mortgaged Property | S-257 | |
40 Wall Street Non-Controlling Note | ||
Holder | S-258 | |
40 Wall Street Noteholders | S-257 | |
Acceptable Insurance Default | S-124 | |
Additional Primary Servicing | ||
Compensation | S-215 | |
Administrative Fee Rate | S-260 | |
ADR | S-260 |
Advance Rate | S-339 | |
Advances | S-338 | |
Affected Investor | S-151 | |
Affiliate | S-326 | |
Allocated Loan Amount | S-260 | |
Annual Debt Service | S-260 | |
Anticipated Repayment Date | S-259 | |
Appraisal Reduction Amount | S-286, S-306 | |
Appraisal Reduction Event | S-305 | |
Appraised Value | S-260 | |
Appraised-Out Class | S-308 | |
ARD Loans | S-259 | |
Asset Status Report | S-375 | |
Assumed Final Distribution Date | S-301 | |
Assumed Scheduled Payment | S-290 | |
Authenticating Agent | S-224 | |
Available Funds | S-283 | |
Balloon Balance | S-261 | |
Balloon Loan | S-284 | |
Balloon LTV | S-262 | |
Bankruptcy Code | S-200 | |
Base Interest Fraction | S-298 | |
Beds | S-264 | |
Berkeley Point | S-211 | |
Borrower Party | S-326 | |
BPC Parties | S-215 | |
BPC Primary Serviced Mortgage Loan | S-213 | |
BPC Primary Servicer Termination | ||
Event | S-216 | |
BPC Primary Servicing Agreement | S-213 | |
B-Piece Buyer | S-27 | |
CBE | S-319 | |
CCRE Data Tape | S-184 | |
CCRE Deal Team | S-184 | |
CCRE Depositor | S-190 | |
CCRE Lending | S-183 | |
CCRE Mortgage Loans | S-183 | |
Certificate Administrator | S-221 | |
Certificate Balance | S-280 | |
Certificate Owners | S-313 | |
Certificate Registrar | S-224, S-310 | |
Certificateholder | S-310 | |
Certificateholder Quorum | S-210 | |
Certificates | S-280 | |
Certifying Certificateholder | S-313 | |
Class | S-280 | |
Class V Distribution Account | S-343 | |
Class X-B Strip Rates | S-287 | |
Class X-C Strip Rate | S-287 | |
Class X-D Strip Rate | S-287 | |
Class X-E Strip Rates | S-287 | |
Class X-F Strip Rate | S-288 | |
Class XP-A Component | S-281 |
S-405 |
INDEX OF DEFINED TERMS
(Continued)
Class XP-A Strip Rates | S-286 | |
Class XS-A Strip Rates | S-286 | |
Clearstream | S-65 | |
Clearstream Participants | S-312 | |
Closing Date | S-199 | |
CMBS | S-166 | |
Code | S-269 | |
Collection Account | S-342 | |
Collection Period | S-285 | |
Companion Loan | S-228 | |
Companion Loan Securities | S-345 | |
Complaint | S-222 | |
Consultation Termination Event | S-25, S-327 | |
Control Eligible Certificates | S-328 | |
Control Termination Event | S-24 | |
Controlling Class | S-327 | |
Controlling Class Certificateholder | S-327 | |
Controlling Class Representative | S-327 | |
Controlling Companion Loan | S-228 | |
Corrected Mortgage Loan | S-375 | |
CPR | S-316 | |
CREFC® | S-383 | |
CREFC® Investor Reporting Package | S-386 | |
CREFC® License Fee | S-261 | |
CREFC® License Fee Rate | S-261 | |
CREFC® NOI Adjustment Worksheet | S-392 | |
CREFC® Operating Statement Analysis | ||
Report | S-392 | |
Crossover Date | S-297 | |
CRR | S-151 | |
Cure Event | S-250 | |
Cure Payment | S-250 | |
Current LTV | S-261 | |
Custodian | S-221 | |
Cut-off Date | S-228 | |
Cut-off Date Balance | S-228 | |
Cut-off Date Loan-to-Value Ratio | S-261 | |
Cut-off Date LTV | S-261 | |
Cut-off Date LTV Ratio | S-261 | |
Cut-off Date U/W NCF Debt Yield | S-261 | |
Cut-off Date U/W NOI Debt Yield | S-261 | |
DBRS | S-334 | |
Debt Service Coverage Ratio | S-264 | |
Default Interest | S-285 | |
Default Rate | S-285 | |
Defaulted Mortgage Loan | S-367 | |
Defeasance | S-269 | |
Defeasance Collateral | S-269 | |
Defeasance Loans | S-266 | |
Defeasance Lock-Out Period | S-266 | |
Defeasance Option | S-269 | |
Defeasance Period | S-266 | |
Definitive Certificate | S-310 |
Department | S-397 | |
Depositaries | S-311 | |
Depositor | S-7, S-199 | |
Determination Date | S-285 | |
Directing Holder | S-326 | |
Disclosable Special Servicer Fees | S-381 | |
Discount Rate | S-267 | |
Distribution Account | S-342 | |
Distribution Date | S-282 | |
Distribution Date Statement | S-383 | |
DMARC | S-167 | |
DSCR | S-186, S-264 | |
DTC | S-65 | |
Due Date | S-231 | |
EEA | S-151 | |
Eligible Operating Advisor | S-334 | |
Equity | S-239 | |
Equity Inns Portfolio Companion Loans | S-238 | |
Equity Inns Portfolio Loan Combination | S-238 | |
Equity Inns Portfolio Mortgage Loan | S-238 | |
Equity Inns Portfolio Mortgaged | ||
Properties | S-238 | |
Equity Inns Portfolio Non-Controlling | ||
Note Holders | S-240 | |
Equity Inns Portfolio Noteholders | S-239 | |
ERISA | S-397 | |
EU Prospectus Directive | S-9 | |
Euroclear | S-65 | |
Euroclear Participants | S-312 | |
Excess Interest | S-260 | |
Excess Liquidation Proceeds | S-365 | |
Excess Liquidation Proceeds Account | S-343 | |
Exchange Act | S-173 | |
excluded controlling class holder | S-141 | |
Excluded Controlling Class Holder | S-388 | |
Excluded Controlling Class Mortgage | ||
Loan | S-311 | |
Excluded Information | S-388 | |
Excluded Mortgage Loan | S-326 | |
excluded special servicer | S-20 | |
Excluded Special Servicer | S-208 | |
excluded special servicer mortgage loan | S-20 | |
Excluded Special Servicer Mortgage | ||
Loan | S-208 | |
Exemption | S-397 | |
Exemption Rating Agency | S-398 | |
FDIC | S-200 | |
FETL | S-11 | |
FIEL | S-12 | |
Final Asset Status Report | S-332 | |
Fitch | S-334 | |
Form 8-K | S-279 | |
FSCMA | S-11 |
S-406 |
INDEX OF DEFINED TERMS
(Continued)
FSMA | S-8 | |
GAAP | S-259 | |
GACC | S-166 | |
GACC Data Tape | S-168 | |
GACC Deal Team | S-168 | |
GACC Mortgage Loans | S-167 | |
GLA | S-262 | |
Grantor Trust | S-394 | |
Harvey Building Products Portfolio | ||
Companion Loans | S-253 | |
Harvey Building Products Portfolio | ||
Intercreditor Agreement | S-254 | |
Harvey Building Products Portfolio Loan | ||
Combination | S-253 | |
Harvey Building Products Portfolio | ||
Mortgage Loan | S-253 | |
Harvey Building Products Portfolio | ||
Mortgaged Property | S-253 | |
Harvey Building Products Portfolio Non- | ||
Controlling Note Holders | S-255 | |
Harvey Building Products Portfolio Note | ||
A-2A Companion Loan | S-253 | |
Harvey Building Products Portfolio Note | ||
A-2B Companion Loan | S-253 | |
Harvey Building Products Portfolio Note | ||
A-3 Companion Loan | S-253 | |
Harvey Building Products Portfolio | ||
Noteholders | S-253 | |
Holders | S-313 | |
Indirect Participants | S-311 | |
Initial Outstanding Pool Balance | S-228 | |
Initial Rate | S-259 | |
Intercreditor Agreement | S-229 | |
Interest Accrual Amount | S-286 | |
Interest Accrual Period | S-286 | |
Interest Payment Differential | S-267 | |
Interest Rate | S-262 | |
Interest Reserve Account | S-342 | |
Interest Shortfall | S-286 | |
Interested Person | S-367 | |
Investment Company Act | 1, S-64, S-400 | |
Investor Certification | S-390 | |
Investor Q&A Forum | S-388, S-389 | |
Investor Registry | S-388 | |
IO Group YM Distribution Amount | S-298 | |
Issuing Entity | S-199 | |
Jefferies LoanCore | S-191 | |
JLC | S-191 | |
JLC Data Tape | S-192 | |
JLC Financing Affiliates | S-191 | |
JLC Mortgage Loans | S-191 | |
JLC Review Team | S-192 | |
KBRA | S-334 |
Ladder Capital Group | S-174 | |
Ladder Capital Review Team | S-176 | |
Ladder Holdings | S-174 | |
LCF | S-174 | |
LCF Data Tape | S-176 | |
LCF Financing Affiliates | S-174 | |
LCF Mortgage Loans | S-174 | |
Leased Fee | S-262 | |
Liquidation Fee | S-378 | |
Liquidation Proceeds | S-378 | |
LNR | S-204 | |
LNR Partners | S-204 | |
Loan Combination | S-229 | |
Loan-Specific Directing Holder | S-326 | |
Loan-to-Value Ratio | S-261 | |
Lock-Out Period | S-266 | |
Loss of Value Payment | S-351 | |
Lower-Tier Distribution Account | S-343 | |
Lower-Tier Regular Interests | S-394 | |
Lower-Tier REMIC | S-61, S-393 | |
LTV | S-186 | |
LTV Ratio | S-261 | |
LTV Ratio at Maturity or ARD | S-262 | |
MAD 2015-11MD Certificate | ||
Administrator | S-244 | |
MAD 2015-11MD Master Servicer | S-244 | |
MAD 2015-11MD Special Servicer | S-244 | |
MAD 2015-11MD Trust and Servicing | ||
Agreement | S-244 | |
MAD 2015-11MD Trustee | S-244 | |
MAI | S-308 | |
Major Decision | S-323 | |
Majority Controlling Class | ||
Certificateholders | S-327 | |
Master Servicer | S-201 | |
Master Servicer Prepayment Interest | ||
Shortfall Amount | S-304 | |
Master Servicer Remittance Date | S-337 | |
Master Servicing Fee | S-372 | |
Master Servicing Fee Rate | S-372 | |
Material Breach | S-350 | |
Material Document Defect | S-350 | |
Maturity Date or ARD LTV | S-262 | |
Modeling Assumptions | S-317 | |
Modification Fees | S-380 | |
Modified Mortgage Loan | S-309 | |
Monthly Payment | S-284 | |
Moody’s | S-334 | |
Morningstar | S-334 | |
Mortgage | S-231 | |
Mortgage Loan Documents | S-349 | |
Mortgage Loan Purchase Agreement | S-233 | |
Mortgage Loan Purchase Agreements | S-349 |
S-407 |
INDEX OF DEFINED TERMS
(Continued)
Mortgage Loan Sellers | S-233 | |
Mortgage Loans | S-228 | |
Mortgage Pool | S-228 | |
Mortgage Rate | S-289 | |
Mortgaged Properties | S-228 | |
Mortgaged Property | S-228 | |
MSA | S-262 | |
Net Default Interest | S-285 | |
Net Mortgage Pass-Through Rate | S-288 | |
Net Operating Income | S-262 | |
Net Prepayment Interest Excess | S-305 | |
Net Prepayment Interest Shortfall | S-304 | |
Net REO Proceeds | S-285 | |
No Downgrade Confirmation | S-363 | |
NOI | S-262 | |
NOI Date | S-262 | |
Non-Controlling Note Holder | S-327 | |
Non-Offered Certificates | S-14, S-281 | |
Nonrecoverable Advance | S-340 | |
Non-Reduced Certificates | S-210 | |
Non-Serviced Companion Loan | S-229 | |
Non-Serviced Loan Combination | S-229 | |
Non-Serviced Mortgage Loan | S-229 | |
Non-Serviced Subordinate Companion | ||
Loan | S-229 | |
non-U.S. holder | 3 | |
Note | S-231 | |
Notice of Foreclosure/DIL | S-251 | |
Notional Balance | S-281 | |
NRA | S-262 | |
NRSRO | S-356 | |
NRSRO Certification | S-390 | |
Occupancy | S-262 | |
Occupancy As-of Date | S-262 | |
Offered Certificateholder | S-394 | |
Offered Certificates | S-280 | |
Offsetting Modification Fees | S-380 | |
OID Regulations | S-395 | |
Operating Advisor | S-224 | |
Operating Advisor Consulting Fee | S-336 | |
Operating Advisor Fee | S-336 | |
Operating Advisor Fee Rate | S-336 | |
Operating Advisor Standard | S-332 | |
Operating Advisor Termination Event | S-334 | |
P&I Advance | S-337 | |
Pads | S-264 | |
Pari Passu Companion Loan | S-229 | |
Pari Passu Loan Primary Servicing Fee | ||
Rate | S-289 | |
Park Bridge Financial | S-224 | |
Park Bridge Lender Services | S-224 | |
Participants | S-310 | |
Pass-Through Rate | S-286 |
Paying Agent | S-221, S-224 | |
percentage interest | S-250 | |
Percentage Interest | S-282 | |
Performance Assessment Information | S-333 | |
Permitted Encumbrances | S-232 | |
Permitted Special Servicer/Affiliate Fees | S-381 | |
Plan | S-397 | |
Planned Principal Balance | S-297 | |
PML | S-180, S-188, S-196 | |
Pooling and Servicing Agreement | S-320 | |
PRC | S-10 | |
Prepayment Assumption | S-395 | |
Prepayment Interest Excess | S-304 | |
Prepayment Interest Shortfall | S-303 | |
Prepayment Premium | S-268 | |
Prepayment Premium Lock-Out Period | S-266 | |
Prime Rate | S-339 | |
Principal Distribution Amount | S-289 | |
Principal Prepayments | S-285 | |
Private Certificates | S-280 | |
Privileged Information | S-332 | |
Privileged Information Exception | S-332 | |
Privileged Person | S-390 | |
Property Advances | S-338 | |
Qualification Criteria | S-177 | |
Qualified Affiliate | S-354 | |
qualified intermediary | 4 | |
Qualified Substitute Mortgage Loan | S-351 | |
Rating Agencies | S-402 | |
REA | S-94 | |
Realized Loss | S-302 | |
Record Date | S-282 | |
Regular Certificates | S-280 | |
REIT LLLP | S-174 | |
Related Proceeds | S-340 | |
Release Date | S-269 | |
Relevant Member State | S-9 | |
Relevant Persons | S-8 | |
REMIC | S-161, S-393 | |
REMIC Regulations | S-393 | |
Removed Mortgage Loan | S-350 | |
REO Account | S-280 | |
REO Loan | S-290 | |
REO Property | S-280 | |
REO Tax | S-365 | |
Replacement Mortgage Loan | S-350 | |
Repurchase Election Notice | S-251 | |
Repurchase Option Notice | S-251 | |
Repurchase Price | S-350 | |
Requesting Holders | S-308 | |
Requesting Party | S-361 | |
Reserve Accounts | S-232 | |
Residual Certificates | S-280 |
S-408 |
INDEX OF DEFINED TERMS
(Continued)
Restricted Group | S-399 | |
Restricted Party | S-332 | |
Revised Rate | S-259 | |
RevPar | S-263 | |
RMBS | S-221 | |
Rooms | S-264 | |
Rule 17g-5 | S-359 | |
Rules | S-312 | |
S&P | S-334 | |
SEC | S-173 | |
Securities Act | S-391 | |
Securitization Retention Requirements | S-152 | |
SEL | S-180, S-188, S-196 | |
Sequential Pay Certificate | S-280 | |
Sequential Pay Certificates | S-280 | |
Serviced Companion Loan | S-230 | |
Serviced Loan Combination | S-230 | |
ServicedPari Passu Companion Loan | S-230 | |
Serviced REO Property | S-280 | |
Serviced Subordinate Companion Loan | S-230 | |
Servicer Termination Events | S-354 | |
Servicing Compensation | S-372 | |
Servicing Fee | S-372 | |
Servicing Fee Rate | S-372 | |
Servicing Shift Loan Combination | S-230 | |
Servicing Shift Mortgage Loan | S-230 | |
Servicing Shift Pooling and Servicing | ||
Agreement | S-230 | |
Servicing Shift Securitization Date | S-230 | |
Servicing Standard | S-322 | |
Servicing Transfer Event | S-375 | |
SF | S-263 | |
SFA | S-11 | |
Similar Law | S-397 | |
Small Loan Appraisal Estimate | S-307 | |
SMMEA | S-399 | |
Sole Certificateholder | S-372 | |
Special Servicer | S-204 | |
Special Servicer Decision | S-369 | |
Special Servicing Fee | S-376 | |
Special Servicing Fee Rate | S-377 | |
Specially Serviced Loan | S-373 | |
Sponsors | S-233 | |
Springfield Mall Companion Loan | S-255 | |
Springfield Mall Intercreditor Agreement | S-255 | |
Springfield Mall Loan Combination | S-255 | |
Springfield Mall Mortgage Loan | S-255 | |
Springfield Mall Mortgaged Property | S-255 | |
Springfield Mall Non-Controlling Note | ||
Holder | S-257 | |
Springfield Mall Noteholders | S-255 | |
Sq. Ft. | S-263 | |
Square Feet | S-263 |
Stated Principal Balance | S-303 | |
Subordinate Certificates | S-305 | |
Subordinate Companion Loan | S-231 | |
Sub-Servicing Entity | S-356 | |
T-12 | S-263 | |
tax matters persons | S-396 | |
Term to Maturity | S-263 | |
Terms and Conditions | S-312 | |
TIA | S-359 | |
TIA Applicability Determination | S-360 | |
TMPs | S-396 | |
Triggering Event of Default | S-245 | |
TRIPRA | S-125 | |
TRS LLLP | S-174 | |
Trust REMIC | S-61 | |
Trust REMICs | S-393 | |
Trustee | S-218 | |
Trustee/Certificate Administrator Fee | S-223 | |
Trustee/Certificate Administrator Fee | ||
Rate | S-224 | |
TTM | S-263 | |
U.S. Obligations | S-268 | |
U.S. person | 3 | |
U.S. withholding agent | 3 | |
U/W EGI | S-264 | |
U/W NCF | S-263 | |
U/W NCF Debt Yield | S-261 | |
U/W NCF DSCR | S-264 | |
U/W NOI | S-263 | |
U/W NOI Debt Yield | S-261 | |
U/W NOI DSCR | S-265 | |
U/W Revenue | S-265 | |
Underwriters | S-199, S-400 | |
Underwriting Agreement | S-400 | |
Underwritten NCF | S-263 | |
Underwritten NCF Debt Yield | S-261 | |
Underwritten NCF DSCR | S-264 | |
Underwritten Net Cash Flow | S-263 | |
Underwritten Net Operating Income | S-265 | |
Underwritten NOI | S-263 | |
Underwritten NOI Debt Yield | S-261 | |
Underwritten NOI DSCR | S-265 | |
Units | S-264 | |
Unliquidated Advance | S-342 | |
Unscheduled Payments | S-284 | |
Updated Appraisal | S-307 | |
Upper-Tier Distribution Account | S-343 | |
Upper-Tier REMIC | S-61, S-393 | |
Volcker Rule | S-152 | |
Voting Rights | S-363 | |
Wachovia | S-201 | |
Weighted Average Net Mortgage Pass- | ||
Through Rate | S-288 |
S-409 |
INDEX OF DEFINED TERMS
(Continued)
Wells Fargo | S-201, S-221 | |
WFCM 2015-LC22 Certificate | ||
Administrator | S-257 | |
WFCM 2015-LC22 Directing Holder | S-258 | |
WFCM 2015-LC22 Master Servicer | S-257 | |
WFCM 2015-LC22 Pooling and | ||
Servicing Agreement | S-257 | |
WFCM 2015-LC22 Special Servicer | S-257 | |
WFCM 2015-LC22 Trust Advisor | S-257 | |
WFCM 2015-LC22 Trustee | S-257 |
Withheld Amounts | S-343 | |
Workout Fee | S-377 | |
Workout-Delayed Reimbursement | ||
Amount | S-341 | |
WTNA | S-218 | |
Yield Maintenance Charge | S-267 | |
Yield Maintenance Loans | S-266 | |
Yield Maintenance Lock-Out Period | S-266 | |
Yield Maintenance Period | S-266 |
S-410 |
ANNEX A-1
CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
COMM 2015-LC23 | ||||||||||||||||||||||||
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES | ||||||||||||||||||||||||
% of | Mortgage | Cut-off | General | Detailed | ||||||||||||||||||||
Property | Initial Pool | # of | Loan | Original | Date | Maturity | Property | Property | Interest | Administrative | ||||||||||||||
Flag | ID | Property Name | Balance | Properties | Seller(1) | Balance($)(2)(3) | Balance($)(2)(3) | or ARD Balance($) | Type (4)(5) | Type | Rate (6) | Fee Rate (7) | ||||||||||||
Loan | 1 | Equity Inns Portfolio (33) | 8.3% | 21 | LCF/GACC | 80,000,000 | 80,000,000 | 80,000,000 | Hospitality | Various | 4.9600% | 0.0149% | ||||||||||||
Property | 1.01 | Homewood Suites Seattle | 1.5% | 1 | LCF/GACC | 14,517,241 | 14,517,241 | Hospitality | Extended Stay | |||||||||||||||
Property | 1.02 | Homewood Suites Orlando | 0.7% | 1 | LCF/GACC | 6,327,586 | 6,327,586 | Hospitality | Extended Stay | |||||||||||||||
Property | 1.03 | Courtyard Carlsbad | 0.5% | 1 | LCF/GACC | 5,034,483 | 5,034,483 | Hospitality | Select Service | |||||||||||||||
Property | 1.04 | Courtyard Houston | 0.5% | 1 | LCF/GACC | 4,655,172 | 4,655,172 | Hospitality | Select Service | |||||||||||||||
Property | 1.05 | Homewood Suites Stratford | 0.4% | 1 | LCF/GACC | 4,310,345 | 4,310,345 | Hospitality | Extended Stay | |||||||||||||||
Property | 1.06 | Hampton Inn Urbana | 0.4% | 1 | LCF/GACC | 4,275,862 | 4,275,862 | Hospitality | Limited Service | |||||||||||||||
Property | 1.07 | Springhill Suites Asheville | 0.4% | 1 | LCF/GACC | 3,965,517 | 3,965,517 | Hospitality | Limited Service | |||||||||||||||
Property | 1.08 | Hilton Garden Inn Louisville | 0.4% | 1 | LCF/GACC | 3,948,276 | 3,948,276 | Hospitality | Select Service | |||||||||||||||
Property | 1.09 | Hampton Inn Orlando | 0.4% | 1 | LCF/GACC | 3,844,828 | 3,844,828 | Hospitality | Limited Service | |||||||||||||||
Property | 1.10 | Hampton Inn Austin | 0.4% | 1 | LCF/GACC | 3,793,103 | 3,793,103 | Hospitality | Limited Service | |||||||||||||||
Property | 1.11 | Hampton Inn College Station | 0.4% | 1 | LCF/GACC | 3,620,690 | 3,620,690 | Hospitality | Limited Service | |||||||||||||||
Property | 1.12 | Hampton Inn Indianapolis | 0.3% | 1 | LCF/GACC | 3,120,690 | 3,120,690 | Hospitality | Limited Service | |||||||||||||||
Property | 1.13 | TownePlace Suites Savannah | 0.3% | 1 | LCF/GACC | 2,931,034 | 2,931,034 | Hospitality | Extended Stay | |||||||||||||||
Property | 1.14 | Hampton Inn East Lansing | 0.3% | 1 | LCF/GACC | 2,758,621 | 2,758,621 | Hospitality | Limited Service | |||||||||||||||
Property | 1.15 | Hampton Inn Naperville | 0.3% | 1 | LCF/GACC | 2,517,241 | 2,517,241 | Hospitality | Limited Service | |||||||||||||||
Property | 1.16 | Hilton Garden Inn Rio Rancho | 0.3% | 1 | LCF/GACC | 2,482,759 | 2,482,759 | Hospitality | Select Service | |||||||||||||||
Property | 1.17 | Courtyard Dalton | 0.2% | 1 | LCF/GACC | 2,034,483 | 2,034,483 | Hospitality | Select Service | |||||||||||||||
Property | 1.18 | Hampton Inn Alcoa | 0.2% | 1 | LCF/GACC | 1,706,897 | 1,706,897 | Hospitality | Limited Service | |||||||||||||||
Property | 1.19 | Homewood Suites Augusta | 0.2% | 1 | LCF/GACC | 1,672,414 | 1,672,414 | Hospitality | Extended Stay | |||||||||||||||
Property | 1.20 | Residence Inn Jacksonville | 0.2% | 1 | LCF/GACC | 1,551,724 | 1,551,724 | Hospitality | Extended Stay | |||||||||||||||
Property | 1.21 | Hampton Inn Milford | 0.1% | 1 | LCF/GACC | 931,034 | 931,034 | Hospitality | Limited Service | |||||||||||||||
Loan | 2 | 32 Avenue of the Americas (33)(36) | 7.3% | 1 | GACC | 70,000,000 | 70,000,000 | 70,000,000 | Office | CBD | 4.8320% | 0.0102% | ||||||||||||
Loan | 3 | 11 Madison Avenue (33)(34)(35) | 7.2% | 1 | GACC | 69,600,000 | 69,600,000 | 69,600,000 | Office | CBD | 3.5602% | 0.00895% | ||||||||||||
Loan | 4 | 1209 DeKalb (35)(36) | 4.8% | 1 | LCF | 46,000,000 | 46,000,000 | 46,000,000 | Multifamily | Mid-Rise | 4.7250% | 0.0124% | ||||||||||||
Loan | 5 | Good Samaritan Medical Tower (36) | 4.4% | 1 | GACC | 42,700,000 | 42,700,000 | 42,700,000 | Office | Medical | 4.5400% | 0.0124% | ||||||||||||
Loan | 6 | Harvey Building Products Portfolio (33) | 4.4% | 30 | LCF | 42,000,000 | 41,953,778 | 38,651,618 | Various | Various | 4.8500% | 0.0172% | ||||||||||||
Property | 6.01 | Londonderry Manufacturing | 0.8% | 1 | LCF | 8,113,636 | 8,104,707 | Industrial | Manufacturing | |||||||||||||||
Property | 6.02 | Waltham Corporate | 0.4% | 1 | LCF | 4,154,182 | 4,149,610 | Office | Suburban | |||||||||||||||
Property | 6.03 | Dartmouth Manufacturing | 0.4% | 1 | LCF | 3,875,455 | 3,871,190 | Industrial | Manufacturing | |||||||||||||||
Property | 6.04 | Nashua | 0.2% | 1 | LCF | 1,954,909 | 1,952,758 | Industrial | Warehouse | |||||||||||||||
Property | 6.05 | West Bridgewater | 0.2% | 1 | LCF | 1,813,636 | 1,811,640 | Industrial | Warehouse | |||||||||||||||
Property | 6.06 | Woburn | 0.2% | 1 | LCF | 1,794,545 | 1,792,571 | Industrial | Warehouse | |||||||||||||||
Property | 6.07 | Manchester, NH | 0.2% | 1 | LCF | 1,482,600 | 1,480,968 | Industrial | Warehouse | |||||||||||||||
Property | 6.08 | New London | 0.1% | 1 | LCF | 1,393,636 | 1,392,103 | Industrial | Warehouse | |||||||||||||||
Property | 6.09 | East Haven | 0.1% | 1 | LCF | 1,298,182 | 1,296,753 | Industrial | Warehouse | |||||||||||||||
Property | 6.10 | Salem | 0.1% | 1 | LCF | 1,298,182 | 1,296,753 | Industrial | Warehouse | |||||||||||||||
Property | 6.11 | Bethlehem | 0.1% | 1 | LCF | 1,260,000 | 1,258,613 | Industrial | Warehouse | |||||||||||||||
Property | 6.12 | Lincoln | 0.1% | 1 | LCF | 1,212,273 | 1,210,939 | Industrial | Warehouse | |||||||||||||||
Property | 6.13 | Berlin | 0.1% | 1 | LCF | 1,164,545 | 1,163,264 | Industrial | Warehouse | |||||||||||||||
Property | 6.14 | Woburn CPD | 0.1% | 1 | LCF | 1,145,455 | 1,144,194 | Industrial | Warehouse | |||||||||||||||
Property | 6.15 | Norwalk | 0.1% | 1 | LCF | 954,545 | 953,495 | Industrial | Warehouse | |||||||||||||||
Property | 6.16 | Dartmouth | 0.1% | 1 | LCF | 916,364 | 915,355 | Industrial | Warehouse | |||||||||||||||
Property | 6.17 | Braintree | 0.1% | 1 | LCF | 859,091 | 858,145 | Industrial | Warehouse | |||||||||||||||
Property | 6.18 | Manchester, CT | 0.1% | 1 | LCF | 801,818 | 800,936 | Industrial | Warehouse | |||||||||||||||
Property | 6.19 | Portland | 0.1% | 1 | LCF | 801,818 | 800,936 | Industrial | Warehouse | |||||||||||||||
Property | 6.20 | Norwalk | 0.1% | 1 | LCF | 725,455 | 724,656 | Industrial | Warehouse | |||||||||||||||
Property | 6.21 | Warwick | 0.1% | 1 | LCF | 720,873 | 720,079 | Industrial | Warehouse | |||||||||||||||
Property | 6.22 | Fitchburg | 0.1% | 1 | LCF | 617,782 | 617,102 | Industrial | Warehouse | |||||||||||||||
Property | 6.23 | Auburn | 0.1% | 1 | LCF | 597,164 | 596,506 | Industrial | Warehouse | |||||||||||||||
Property | 6.24 | Portsmouth | 0.1% | 1 | LCF | 576,545 | 575,911 | Industrial | Warehouse | |||||||||||||||
Property | 6.25 | Southampton | 0.0% | 1 | LCF | 477,273 | 476,747 | Industrial | Warehouse | |||||||||||||||
Property | 6.26 | Hyannis | 0.0% | 1 | LCF | 453,218 | 452,719 | Industrial | Warehouse | |||||||||||||||
Property | 6.27 | Wilkes-Barre | 0.0% | 1 | LCF | 420,000 | 419,538 | Industrial | Warehouse | |||||||||||||||
Property | 6.28 | Berlin CPD | 0.0% | 1 | LCF | 410,455 | 410,003 | Industrial | Warehouse | |||||||||||||||
Property | 6.29 | Springfield | 0.0% | 1 | LCF | 381,818 | 381,398 | Industrial | Warehouse | |||||||||||||||
Property | 6.30 | White River Junction | 0.0% | 1 | LCF | 324,545 | 324,188 | Industrial | Warehouse | |||||||||||||||
Loan | 7 | Beach House Hilton Head (36) | 4.2% | 1 | GACC | 40,000,000 | 40,000,000 | 34,522,266 | Hospitality | Full Service | 4.9000% | 0.0124% | ||||||||||||
Loan | 8 | Whitehall Hotel | 3.7% | 1 | JLC | 36,000,000 | 35,944,447 | 26,910,934 | Hospitality | Full Service | 4.9900% | 0.0124% | ||||||||||||
Loan | 9 | 611 Cowper | 3.4% | 1 | GACC | 33,000,000 | 32,914,514 | 26,543,534 | Office | Suburban | 4.3500% | 0.0799% | ||||||||||||
Loan | 10 | Springfield Mall (33) | 3.4% | 1 | CCRE | 32,500,000 | 32,460,817 | 26,232,336 | Retail | Regional Mall | 4.4485% | 0.0386% | ||||||||||||
Loan | 11 | Laguna Niguel Town Center | 2.8% | 1 | LCF | 26,500,000 | 26,433,612 | 21,438,886 | Retail | Unanchored | 4.5170% | 0.0124% | ||||||||||||
Loan | 12 | Hacienda Gardens | 2.5% | 1 | CCRE | 24,000,000 | 24,000,000 | 24,000,000 | Retail | Anchored | 4.4905% | 0.0324% | ||||||||||||
Loan | 13 | Washington Plaza | 2.4% | 1 | CCRE | 22,900,000 | 22,873,570 | 18,606,962 | Retail | Anchored | 4.6425% | 0.0324% | ||||||||||||
Loan | 14 | Carrollwood Station | 2.2% | 1 | JLC | 21,500,000 | 21,500,000 | 21,500,000 | Multifamily | Garden | 5.3380% | 0.0124% | ||||||||||||
Loan | 15 | Murrieta Spectrum | 2.1% | 1 | CCRE | 20,600,000 | 20,600,000 | 19,680,148 | Retail | Anchored | 4.9500% | 0.0324% | ||||||||||||
Loan | 16 | Westin Lake Mary | 2.1% | 1 | GACC | 20,000,000 | 20,000,000 | 17,758,696 | Hospitality | Full Service | 5.1400% | 0.0124% |
A-1-1 |
COMM 2015-LC23 | ||||||||||||||||||||||||
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES | ||||||||||||||||||||||||
% of | Mortgage | Cut-off | General | Detailed | ||||||||||||||||||||
Property | Initial Pool | # of | Loan | Original | Date | Maturity | Property | Property | Interest | Administrative | ||||||||||||||
Flag | ID | Property Name | Balance | Properties | Seller(1) | Balance($)(2)(3) | Balance($)(2)(3) | or ARD Balance($) | Type (4)(5) | Type | Rate (6) | Fee Rate (7) | ||||||||||||
Loan | 17 | Lake Creek Festival | 2.1% | 1 | GACC | 19,750,000 | 19,750,000 | 16,849,699 | Retail | Anchored | 4.4600% | 0.0124% | ||||||||||||
Loan | 18 | Wedgewood Building | 2.0% | 1 | JLC | 19,000,000 | 18,978,686 | 15,503,018 | Office | CBD | 4.7670% | 0.0124% | ||||||||||||
Loan | 19 | Kenhorst Plaza | 1.9% | 1 | LCF | 18,300,000 | 18,300,000 | 16,902,098 | Retail | Anchored | 5.1000% | 0.0124% | ||||||||||||
Loan | 20 | Addison Town Center | 1.7% | 1 | CCRE | 16,250,000 | 16,231,741 | 13,256,050 | Retail | Anchored | 4.7600% | 0.0324% | ||||||||||||
Loan | 21 | A&H Olympic | 1.5% | 1 | GACC | 14,200,000 | 14,200,000 | 12,921,783 | Retail | Unanchored | 4.1600% | 0.0124% | ||||||||||||
Loan | 22 | Brentwood Retail Center (35) | 1.4% | 1 | JLC | 13,300,000 | 13,290,772 | 11,674,932 | Retail | Urban | 5.2165% | 0.0124% | ||||||||||||
Loan | 23 | A&H Maple Avenue | 1.4% | 1 | GACC | 13,000,000 | 13,000,000 | 11,799,625 | Retail | Unanchored | 4.0100% | 0.0124% | ||||||||||||
Loan | 24 | BJs Montgomeryville | 1.2% | 1 | LCF | 12,000,000 | 11,986,486 | 9,785,801 | Retail | Single Tenant | 4.7500% | 0.0124% | ||||||||||||
Loan | 25 | Colerain Center | 1.2% | 1 | CCRE | 11,625,000 | 11,625,000 | 10,243,840 | Retail | Anchored | 4.7905% | 0.0324% | ||||||||||||
Loan | 26 | Whitewater Place | 1.2% | 1 | LCF | 11,500,000 | 11,486,750 | 9,346,485 | Multifamily | Garden | 4.6500% | 0.0124% | ||||||||||||
Loan | 27 | Brown Street Centre | 1.2% | 1 | GACC | 11,300,000 | 11,300,000 | 9,928,213 | Office | Suburban | 4.6600% | 0.0124% | ||||||||||||
Loan | 28 | Biltmore Parks Apartments | 1.1% | 1 | CCRE | 11,000,000 | 11,000,000 | 10,127,513 | Multifamily | Garden | 4.8900% | 0.0324% | ||||||||||||
Loan | 29 | Ortega Village - Retail | 1.1% | 1 | LCF | 10,600,000 | 10,574,134 | 8,613,669 | Retail | Unanchored | 4.6470% | 0.0124% | ||||||||||||
Loan | 30 | Landings Shops and Offices | 0.9% | 3 | CCRE | 8,925,000 | 8,915,490 | 7,335,962 | Various | Various | 4.9885% | 0.0799% | ||||||||||||
Property | 30.01 | Landings Shops and Offices | 0.5% | 1 | CCRE | 4,462,500 | 4,457,745 | Mixed Use | Office/Retail | |||||||||||||||
Property | 30.02 | Progressive Properties | 0.3% | 1 | CCRE | 2,662,500 | 2,659,663 | Office | Medical | |||||||||||||||
Property | 30.03 | Kopf Offices | 0.2% | 1 | CCRE | 1,800,000 | 1,798,082 | Office | Suburban | |||||||||||||||
Loan | 31 | Terraces on Second | 0.9% | 1 | LCF | 8,600,000 | 8,600,000 | 7,893,678 | Multifamily | Student Housing | 4.6940% | 0.0124% | ||||||||||||
Loan | 32 | 75 Executive Drive (36) | 0.9% | 1 | LCF | 8,200,000 | 8,169,533 | 6,630,256 | Office | Suburban | 4.4990% | 0.0124% | ||||||||||||
Loan | 33 | Best Buy Boca Raton | 0.8% | 1 | LCF | 7,550,000 | 7,550,000 | 7,550,000 | Retail | Single Tenant | 4.6400% | 0.0124% | ||||||||||||
Loan | 34 | Somerset Apartments | 0.8% | 1 | LCF | 7,500,000 | 7,500,000 | 6,591,017 | Multifamily | Garden | 4.6700% | 0.0524% | ||||||||||||
Loan | 35 | Walgreens VA Beach | 0.8% | 1 | GACC | 7,365,000 | 7,365,000 | 6,758,768 | Retail | Single Tenant | 4.6800% | 0.0124% | ||||||||||||
Loan | 36 | Holiday Inn Express & Suites Rockport | 0.8% | 1 | LCF | 7,340,000 | 7,328,897 | 5,508,840 | Hospitality | Limited Service | 5.1000% | 0.0124% | ||||||||||||
Loan | 37 | Commons at Pembroke | 0.7% | 1 | JLC | 7,200,000 | 7,192,095 | 5,893,071 | Multifamily | Student Housing | 4.8600% | 0.0124% | ||||||||||||
Loan | 38 | Monument Creek (36) | 0.7% | 1 | LCF | 6,640,000 | 6,640,000 | 6,640,000 | Manufactured Housing Community | Manufactured Housing Community | 4.4800% | 0.0124% | ||||||||||||
Loan | 39 | High Country Plaza | 0.7% | 1 | LCF | 6,500,000 | 6,483,964 | 5,272,283 | Retail | Unanchored | 4.5930% | 0.0124% | ||||||||||||
Loan | 40 | Williamsburg Center | 0.7% | 7 | JLC | 6,375,000 | 6,364,771 | 4,727,360 | Office | Suburban | 4.7720% | 0.0124% | ||||||||||||
Property | 40.01 | 1734 Corporate Crossing | 0.2% | 1 | JLC | 1,501,839 | 1,499,429 | Office | Suburban | |||||||||||||||
Property | 40.02 | 1728 Corporate Crossing | 0.2% | 1 | JLC | 1,444,076 | 1,441,759 | Office | Suburban | |||||||||||||||
Property | 40.03 | 1722 Corporate Crossing | 0.1% | 1 | JLC | 1,386,313 | 1,384,088 | Office | Suburban | |||||||||||||||
Property | 40.04 | 1035 East Gate Drive | 0.1% | 1 | JLC | 677,340 | 676,254 | Office | Suburban | |||||||||||||||
Property | 40.05 | 735 Seibert Road | 0.1% | 1 | JLC | 505,318 | 504,507 | Office | Suburban | |||||||||||||||
Property | 40.06 | 703 Seibert Road | 0.0% | 1 | JLC | 440,809 | 440,102 | Office | Suburban | |||||||||||||||
Property | 40.07 | 723 Seibert Road | 0.0% | 1 | JLC | 419,306 | 418,633 | Office | Suburban | |||||||||||||||
Loan | 41 | Shops at Cardiff Ranch | 0.7% | 1 | JLC | 6,350,000 | 6,334,356 | 5,151,843 | Retail | Unanchored | 4.6000% | 0.0124% | ||||||||||||
Loan | 42 | Cobblestone Court II | 0.5% | 1 | GACC | 5,200,000 | 5,194,474 | 4,275,783 | Multifamily | Garden | 5.0000% | 0.0124% | ||||||||||||
Loan | 43 | Hampton Inn & Suites – Portland | 0.5% | 1 | LCF | 5,000,000 | 4,988,391 | 3,140,015 | Hospitality | Limited Service | 4.9100% | 0.0124% | ||||||||||||
Loan | 44 | 40 Wall Street (33) | 0.5% | 1 | LCF | 5,000,000 | 4,960,524 | 3,552,308 | Office | CBD | 3.6650% | 0.0102% | ||||||||||||
Loan | 45 | Palisades of Bridgeport | 0.5% | 1 | CCRE | 4,600,000 | 4,595,331 | 3,806,202 | Multifamily | Mid-Rise | 5.1935% | 0.0324% | ||||||||||||
Loan | 46 | Walgreens Frisco TX | 0.4% | 1 | GACC | 4,000,000 | 3,979,897 | 2,471,694 | Retail | Single Tenant | 4.5200% | 0.0124% | ||||||||||||
Loan | 47 | Walgreens-Goodwill Missouri TX | 0.4% | 1 | GACC | 4,000,000 | 3,976,398 | 2,206,463 | Retail | Single Tenant | 4.5200% | 0.0124% | ||||||||||||
Loan | 48 | Warsaw Village | 0.4% | 1 | CCRE | 3,600,000 | 3,600,000 | 3,448,131 | Retail | Anchored | 5.2480% | 0.0324% | ||||||||||||
Loan | 49 | Walton Shoppes | 0.4% | 1 | GACC | 3,500,000 | 3,500,000 | 2,152,767 | Retail | Unanchored | 4.4100% | 0.0124% | ||||||||||||
Loan | 50 | Ortega Village- Pads | 0.4% | 1 | LCF | 3,500,000 | 3,491,459 | 2,844,135 | Mixed Use | Retail/Office | 4.6470% | 0.0124% | ||||||||||||
Loan | 51 | 691 14th Street Retail | 0.4% | 1 | JLC | 3,500,000 | 3,487,946 | 2,864,638 | Retail | Urban | 4.8590% | 0.0124% | ||||||||||||
Loan | 52 | Monte & Wishing Well | 0.3% | 2 | LCF | 3,325,000 | 3,319,359 | 2,436,428 | Manufactured Housing Community | Manufactured Housing Community | 4.4550% | 0.0124% | ||||||||||||
Property | 52.01 | Monte Carlo MHC | 0.2% | 1 | LCF | 1,914,613 | 1,911,365 | Manufactured Housing Community | Manufactured Housing Community | |||||||||||||||
Property | 52.02 | Wishing Well MHP | 0.1% | 1 | LCF | 1,410,387 | 1,407,994 | Manufactured Housing Community | Manufactured Housing Community | |||||||||||||||
Loan | 53 | Ferndale Avenue Shoppes | 0.3% | 1 | GACC | 3,040,000 | 3,032,410 | 1,866,107 | Retail | Unanchored | 4.3600% | 0.0124% | ||||||||||||
Loan | 54 | Courtyard Self Storage | 0.3% | 1 | CCRE | 3,000,000 | 3,000,000 | 2,601,015 | Self-Storage | Self-Storage | 5.0800% | 0.0324% | ||||||||||||
Loan | 55 | Bayonne MHP | 0.3% | 1 | LCF | 3,000,000 | 2,996,441 | 2,427,504 | Manufactured Housing Community | Manufactured Housing Community | 4.5210% | 0.0124% | ||||||||||||
Loan | 56 | Best Western Cleveland Airport | 0.3% | 1 | LCF | 3,000,000 | 2,993,359 | 1,911,074 | Hospitality | Limited Service | 5.2625% | 0.0124% | ||||||||||||
Loan | 57 | Eureka Crossings | 0.2% | 1 | GACC | 2,350,000 | 2,344,247 | 1,451,640 | Retail | Unanchored | 4.5100% | 0.0124% | ||||||||||||
Loan | 58 | Family Dollar - Rose Hill (36) | 0.1% | 1 | LCF | 997,500 | 997,500 | 997,500 | Retail | Single Tenant | 4.9400% | 0.0124% | ||||||||||||
Loan | 59 | Family Dollar - Moultrie (36) | 0.1% | 1 | LCF | 927,500 | 927,500 | 927,500 | Retail | Single Tenant | 4.9400% | 0.0124% | ||||||||||||
Loan | 60 | Family Dollar - Biscoe (36) | 0.1% | 1 | LCF | 857,500 | 857,500 | 857,500 | Retail | Single Tenant | 4.9400% | 0.0124% | ||||||||||||
Loan | 61 | Family Dollar - Rockingham (36) | 0.1% | 1 | LCF | 819,000 | 819,000 | 819,000 | Retail | Single Tenant | 4.9400% | 0.0124% | ||||||||||||
Loan | 62 | Dollar General - De Soto (36) | 0.1% | 1 | LCF | 702,000 | 702,000 | 702,000 | Retail | Single Tenant | 5.2100% | 0.0124% |
A-1-2 |
COMM 2015-LC23 | ||||||||||||||||||||||||||||
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES | ||||||||||||||||||||||||||||
% of | Interest | Original | Remaining | Original | Remaining | First | Monthly | |||||||||||||||||||||
Property | Initial Pool | Accrual | Term to | Term to | Amortization | Amortization | Origination | Payment | Maturity | ARD Loan | Final | Debt | ||||||||||||||||
Flag | ID | Property Name | Balance | Basis | Maturity or ARD | Maturity or ARD | Term | Term | Date | Date | or ARD Date | (Yes/No) | Maturity Date | Service($)(8) | ||||||||||||||
Loan | 1 | Equity Inns Portfolio (33) | 8.3% | Actual/360 | 60 | 59 | 0 | 0 | 10/06/2015 | 11/06/2015 | 10/06/2020 | No | 10/06/2020 | 335,259 | ||||||||||||||
Property | 1.01 | Homewood Suites Seattle | 1.5% | |||||||||||||||||||||||||
Property | 1.02 | Homewood Suites Orlando | 0.7% | |||||||||||||||||||||||||
Property | 1.03 | Courtyard Carlsbad | 0.5% | |||||||||||||||||||||||||
Property | 1.04 | Courtyard Houston | 0.5% | |||||||||||||||||||||||||
Property | 1.05 | Homewood Suites Stratford | 0.4% | |||||||||||||||||||||||||
Property | 1.06 | Hampton Inn Urbana | 0.4% | |||||||||||||||||||||||||
Property | 1.07 | Springhill Suites Asheville | 0.4% | |||||||||||||||||||||||||
Property | 1.08 | Hilton Garden Inn Louisville | 0.4% | |||||||||||||||||||||||||
Property | 1.09 | Hampton Inn Orlando | 0.4% | |||||||||||||||||||||||||
Property | 1.10 | Hampton Inn Austin | 0.4% | |||||||||||||||||||||||||
Property | 1.11 | Hampton Inn College Station | 0.4% | |||||||||||||||||||||||||
Property | 1.12 | Hampton Inn Indianapolis | 0.3% | |||||||||||||||||||||||||
Property | 1.13 | TownePlace Suites Savannah | 0.3% | |||||||||||||||||||||||||
Property | 1.14 | Hampton Inn East Lansing | 0.3% | |||||||||||||||||||||||||
Property | 1.15 | Hampton Inn Naperville | 0.3% | |||||||||||||||||||||||||
Property | 1.16 | Hilton Garden Inn Rio Rancho | 0.3% | |||||||||||||||||||||||||
Property | 1.17 | Courtyard Dalton | 0.2% | |||||||||||||||||||||||||
Property | 1.18 | Hampton Inn Alcoa | 0.2% | |||||||||||||||||||||||||
Property | 1.19 | Homewood Suites Augusta | 0.2% | |||||||||||||||||||||||||
Property | 1.20 | Residence Inn Jacksonville | 0.2% | |||||||||||||||||||||||||
Property | 1.21 | Hampton Inn Milford | 0.1% | |||||||||||||||||||||||||
Loan | 2 | 32 Avenue of the Americas (33)(36) | 7.3% | Actual/360 | 120 | 120 | 0 | 0 | 10/05/2015 | 12/01/2015 | 11/01/2025 | No | 11/01/2025 | 285,781 | ||||||||||||||
Loan | 3 | 11 Madison Avenue (33)(34)(35) | 7.2% | Actual/360 | 120 | 118 | 0 | 0 | 08/18/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 209,360 | ||||||||||||||
Loan | 4 | 1209 DeKalb (35)(36) | 4.8% | Actual/360 | 60 | 59 | 0 | 0 | 10/01/2015 | 11/06/2015 | 10/06/2020 | No | 10/06/2020 | 183,641 | ||||||||||||||
Loan | 5 | Good Samaritan Medical Tower (36) | 4.4% | Actual/360 | 120 | 118 | 0 | 0 | 09/01/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 163,792 | ||||||||||||||
Loan | 6 | Harvey Building Products Portfolio (33) | 4.4% | Actual/360 | 60 | 59 | 360 | 359 | 10/01/2015 | 11/06/2015 | 10/06/2020 | No | 10/06/2020 | 221,631 | ||||||||||||||
Property | 6.01 | Londonderry Manufacturing | 0.8% | |||||||||||||||||||||||||
Property | 6.02 | Waltham Corporate | 0.4% | |||||||||||||||||||||||||
Property | 6.03 | Dartmouth Manufacturing | 0.4% | |||||||||||||||||||||||||
Property | 6.04 | Nashua | 0.2% | |||||||||||||||||||||||||
Property | 6.05 | West Bridgewater | 0.2% | |||||||||||||||||||||||||
Property | 6.06 | Woburn | 0.2% | |||||||||||||||||||||||||
Property | 6.07 | Manchester, NH | 0.2% | |||||||||||||||||||||||||
Property | 6.08 | New London | 0.1% | |||||||||||||||||||||||||
Property | 6.09 | East Haven | 0.1% | |||||||||||||||||||||||||
Property | 6.10 | Salem | 0.1% | |||||||||||||||||||||||||
Property | 6.11 | Bethlehem | 0.1% | |||||||||||||||||||||||||
Property | 6.12 | Lincoln | 0.1% | |||||||||||||||||||||||||
Property | 6.13 | Berlin | 0.1% | |||||||||||||||||||||||||
Property | 6.14 | Woburn CPD | 0.1% | |||||||||||||||||||||||||
Property | 6.15 | Norwalk | 0.1% | |||||||||||||||||||||||||
Property | 6.16 | Dartmouth | 0.1% | |||||||||||||||||||||||||
Property | 6.17 | Braintree | 0.1% | |||||||||||||||||||||||||
Property | 6.18 | Manchester, CT | 0.1% | |||||||||||||||||||||||||
Property | 6.19 | Portland | 0.1% | |||||||||||||||||||||||||
Property | 6.20 | Norwalk | 0.1% | |||||||||||||||||||||||||
Property | 6.21 | Warwick | 0.1% | |||||||||||||||||||||||||
Property | 6.22 | Fitchburg | 0.1% | |||||||||||||||||||||||||
Property | 6.23 | Auburn | 0.1% | |||||||||||||||||||||||||
Property | 6.24 | Portsmouth | 0.1% | |||||||||||||||||||||||||
Property | 6.25 | Southampton | 0.0% | |||||||||||||||||||||||||
Property | 6.26 | Hyannis | 0.0% | |||||||||||||||||||||||||
Property | 6.27 | Wilkes-Barre | 0.0% | |||||||||||||||||||||||||
Property | 6.28 | Berlin CPD | 0.0% | |||||||||||||||||||||||||
Property | 6.29 | Springfield | 0.0% | |||||||||||||||||||||||||
Property | 6.30 | White River Junction | 0.0% | |||||||||||||||||||||||||
Loan | 7 | Beach House Hilton Head (36) | 4.2% | Actual/360 | 120 | 119 | 360 | 360 | 09/10/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 212,291 | ||||||||||||||
Loan | 8 | Whitehall Hotel | 3.7% | Actual/360 | 120 | 119 | 300 | 299 | 10/06/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 210,243 | ||||||||||||||
Loan | 9 | 611 Cowper | 3.4% | Actual/360 | 120 | 118 | 360 | 358 | 08/28/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 164,278 | ||||||||||||||
Loan | 10 | Springfield Mall (33) | 3.4% | Actual/360 | 120 | 119 | 360 | 359 | 09/23/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 163,680 | ||||||||||||||
Loan | 11 | Laguna Niguel Town Center | 2.8% | Actual/360 | 120 | 118 | 360 | 358 | 09/02/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 134,539 | ||||||||||||||
Loan | 12 | Hacienda Gardens | 2.5% | Actual/360 | 120 | 120 | 0 | 0 | 10/09/2015 | 12/06/2015 | 11/06/2025 | No | 11/06/2025 | 91,057 | ||||||||||||||
Loan | 13 | Washington Plaza | 2.4% | Actual/360 | 120 | 119 | 360 | 359 | 10/02/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 117,978 | ||||||||||||||
Loan | 14 | Carrollwood Station | 2.2% | Actual/360 | 60 | 58 | 0 | 0 | 09/03/2015 | 10/06/2015 | 09/06/2020 | No | 09/06/2020 | 96,967 | ||||||||||||||
Loan | 15 | Murrieta Spectrum | 2.1% | Actual/360 | 60 | 59 | 360 | 360 | 10/02/2015 | 11/06/2015 | 10/06/2020 | No | 10/06/2020 | 109,957 | ||||||||||||||
Loan | 16 | Westin Lake Mary | 2.1% | Actual/360 | 120 | 118 | 360 | 360 | 09/02/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 109,082 | ||||||||||||||
A-1-3 |
COMM 2015-LC23
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | Interest | Original | Remaining | Original | Remaining | First | Monthly | |||||||||||||||||||||
Property | Initial Pool | Accrual | Term to | Term to | Amortization | Amortization | Origination | Payment | Maturity | ARD Loan | Final | Debt | ||||||||||||||||
Flag | ID | Property Name | Balance | Basis | Maturity or ARD | Maturity or ARD | Term | Term | Date | Date | or ARD Date | (Yes/No) | Maturity Date | Service($)(8) | ||||||||||||||
Loan | 17 | Lake Creek Festival | 2.1% | Actual/360 | 120 | 119 | 360 | 360 | 09/11/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 99,602 | ||||||||||||||
Loan | 18 | Wedgewood Building | 2.0% | Actual/360 | 120 | 119 | 360 | 359 | 09/25/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 99,308 | ||||||||||||||
Loan | 19 | Kenhorst Plaza | 1.9% | Actual/360 | 120 | 119 | 360 | 360 | 09/11/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 99,360 | ||||||||||||||
Loan | 20 | Addison Town Center | 1.7% | Actual/360 | 120 | 119 | 360 | 359 | 09/14/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 84,866 | ||||||||||||||
Loan | 21 | A&H Olympic | 1.5% | Actual/360 | 120 | 117 | 360 | 360 | 07/31/2015 | 09/06/2015 | 08/06/2025 | No | 08/06/2025 | 69,109 | ||||||||||||||
Loan | 22 | Brentwood Retail Center (35) | 1.4% | Actual/360 | 120 | 119 | 420 | 419 | 10/02/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 68,971 | ||||||||||||||
Loan | 23 | A&H Maple Avenue | 1.4% | Actual/360 | 120 | 118 | 360 | 360 | 08/07/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 62,139 | ||||||||||||||
Loan | 24 | BJs Montgomeryville | 1.2% | Actual/360 | 120 | 119 | 360 | 359 | 09/08/2015 | 11/01/2015 | 10/01/2025 | No | 10/01/2025 | 62,598 | ||||||||||||||
Loan | 25 | Colerain Center | 1.2% | Actual/360 | 120 | 119 | 360 | 360 | 09/22/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 60,926 | ||||||||||||||
Loan | 26 | Whitewater Place | 1.2% | Actual/360 | 120 | 119 | 360 | 359 | 09/30/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 59,298 | ||||||||||||||
Loan | 27 | Brown Street Centre | 1.2% | Actual/360 | 120 | 119 | 360 | 360 | 09/15/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 58,335 | ||||||||||||||
Loan | 28 | Biltmore Parks Apartments | 1.1% | Actual/360 | 120 | 119 | 360 | 360 | 09/23/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 58,313 | ||||||||||||||
Loan | 29 | Ortega Village - Retail | 1.1% | Actual/360 | 120 | 118 | 360 | 358 | 09/02/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 54,638 | ||||||||||||||
Loan | 30 | Landings Shops and Offices | 0.9% | Actual/360 | 120 | 119 | 360 | 359 | 09/29/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 47,849 | ||||||||||||||
Property | 30.01 | Landings Shops and Offices | 0.5% | |||||||||||||||||||||||||
Property | 30.02 | Progressive Properties | 0.3% | |||||||||||||||||||||||||
Property | 30.03 | Kopf Offices | 0.2% | |||||||||||||||||||||||||
Loan | 31 | Terraces on Second | 0.9% | Actual/360 | 120 | 118 | 360 | 360 | 09/03/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 44,572 | ||||||||||||||
Loan | 32 | 75 Executive Drive (36) | 0.9% | Actual/360 | 120 | 117 | 360 | 357 | 08/05/2015 | 09/06/2015 | 08/06/2025 | No | 08/06/2025 | 41,543 | ||||||||||||||
Loan | 33 | Best Buy Boca Raton | 0.8% | Actual/360 | 120 | 120 | 0 | 0 | 10/08/2015 | 12/06/2015 | 11/06/2025 | No | 11/06/2025 | 29,599 | ||||||||||||||
Loan | 34 | Somerset Apartments | 0.8% | Actual/360 | 120 | 119 | 360 | 360 | 10/01/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 38,763 | ||||||||||||||
Loan | 35 | Walgreens VA Beach | 0.8% | Actual/360 | 120 | 119 | 360 | 360 | 09/08/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 38,109 | ||||||||||||||
Loan | 36 | Holiday Inn Express & Suites Rockport | 0.8% | Actual/360 | 120 | 119 | 300 | 299 | 10/06/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 43,338 | ||||||||||||||
Loan | 37 | Commons at Pembroke | 0.7% | Actual/360 | 120 | 119 | 360 | 359 | 09/17/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 38,037 | ||||||||||||||
Loan | 38 | Monument Creek (36) | 0.7% | Actual/360 | 120 | 119 | 0 | 0 | 09/29/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 25,134 | ||||||||||||||
Loan | 39 | High Country Plaza | 0.7% | Actual/360 | 120 | 118 | 360 | 358 | 09/01/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 33,295 | ||||||||||||||
Loan | 40 | Williamsburg Center | 0.7% | Actual/360 | 120 | 119 | 300 | 299 | 10/01/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 36,426 | ||||||||||||||
Property | 40.01 | 1734 Corporate Crossing | 0.2% | |||||||||||||||||||||||||
Property | 40.02 | 1728 Corporate Crossing | 0.2% | |||||||||||||||||||||||||
Property | 40.03 | 1722 Corporate Crossing | 0.1% | |||||||||||||||||||||||||
Property | 40.04 | 1035 East Gate Drive | 0.1% | |||||||||||||||||||||||||
Property | 40.05 | 735 Seibert Road | 0.1% | |||||||||||||||||||||||||
Property | 40.06 | 703 Seibert Road | 0.0% | |||||||||||||||||||||||||
Property | 40.07 | 723 Seibert Road | 0.0% | |||||||||||||||||||||||||
Loan | 41 | Shops at Cardiff Ranch | 0.7% | Actual/360 | 120 | 118 | 360 | 358 | 08/31/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 32,553 | ||||||||||||||
Loan | 42 | Cobblestone Court II | 0.5% | Actual/360 | 120 | 119 | 360 | 359 | 09/10/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 27,915 | ||||||||||||||
Loan | 43 | Hampton Inn & Suites – Portland | 0.5% | Actual/360 | 120 | 119 | 240 | 239 | 09/30/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 32,750 | ||||||||||||||
Loan | 44 | 40 Wall Street (33) | 0.5% | Actual/360 | 120 | 116 | 300 | 296 | 07/02/2015 | 08/06/2015 | 07/06/2025 | No | 07/06/2025 | 25,476 | ||||||||||||||
Loan | 45 | Palisades of Bridgeport | 0.5% | Actual/360 | 120 | 119 | 360 | 359 | 09/24/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 25,241 | ||||||||||||||
Loan | 46 | Walgreens Frisco TX | 0.4% | Actual/360 | 120 | 118 | 240 | 238 | 09/01/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 25,349 | ||||||||||||||
Loan | 47 | Walgreens-Goodwill Missouri TX | 0.4% | Actual/360 | 120 | 118 | 216 | 214 | 09/01/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 27,095 | ||||||||||||||
Loan | 48 | Warsaw Village | 0.4% | Actual/360 | 60 | 58 | 360 | 360 | 09/03/2015 | 10/06/2015 | 09/06/2020 | No | 09/06/2020 | 19,875 | ||||||||||||||
Loan | 49 | Walton Shoppes | 0.4% | Actual/360 | 120 | 120 | 240 | 240 | 10/07/2015 | 12/06/2015 | 11/06/2025 | No | 11/06/2025 | 21,973 | ||||||||||||||
Loan | 50 | Ortega Village- Pads | 0.4% | Actual/360 | 120 | 118 | 360 | 358 | 09/02/2015 | 10/06/2015 | 09/06/2025 | No | 09/06/2025 | 18,041 | ||||||||||||||
Loan | 51 | 691 14th Street Retail | 0.4% | Actual/360 | 120 | 117 | 360 | 357 | 07/10/2015 | 09/06/2015 | 08/06/2025 | No | 08/06/2025 | 18,488 | ||||||||||||||
Loan | 52 | Monte & Wishing Well | 0.3% | Actual/360 | 120 | 119 | 300 | 299 | 10/01/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 18,397 | ||||||||||||||
Property | 52.01 | Monte Carlo MHC | 0.2% | |||||||||||||||||||||||||
Property | 52.02 | Wishing Well MHP | 0.1% | |||||||||||||||||||||||||
Loan | 53 | Ferndale Avenue Shoppes | 0.3% | Actual/360 | 120 | 119 | 240 | 239 | 09/30/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 19,004 | ||||||||||||||
Loan | 54 | Courtyard Self Storage | 0.3% | Actual/360 | 120 | 119 | 360 | 360 | 09/23/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 16,252 | ||||||||||||||
Loan | 55 | Bayonne MHP | 0.3% | Actual/360 | 120 | 119 | 360 | 359 | 10/06/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 15,238 | ||||||||||||||
Loan | 56 | Best Western Cleveland Airport | 0.3% | Actual/360 | 120 | 119 | 240 | 239 | 09/16/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 20,236 | ||||||||||||||
Loan | 57 | Eureka Crossings | 0.2% | Actual/360 | 120 | 119 | 240 | 239 | 09/23/2015 | 11/06/2015 | 10/06/2025 | No | 10/06/2025 | 14,880 | ||||||||||||||
Loan | 58 | Family Dollar - Rose Hill (36) | 0.1% | Actual/360 | 120 | 119 | 0 | 0 | 09/28/2015 | 11/06/2015 | 10/06/2025 | Yes | 10/06/2030 | 4,163 | ||||||||||||||
Loan | 59 | Family Dollar - Moultrie (36) | 0.1% | Actual/360 | 120 | 119 | 0 | 0 | 09/28/2015 | 11/06/2015 | 10/06/2025 | Yes | 10/06/2030 | 3,871 | ||||||||||||||
Loan | 60 | Family Dollar - Biscoe (36) | 0.1% | Actual/360 | 120 | 119 | 0 | 0 | 09/28/2015 | 11/06/2015 | 10/06/2025 | Yes | 10/06/2030 | 3,579 | ||||||||||||||
Loan | 61 | Family Dollar - Rockingham (36) | 0.1% | Actual/360 | 120 | 119 | 0 | 0 | 09/28/2015 | 11/06/2015 | 10/06/2025 | Yes | 10/06/2030 | 3,418 | ||||||||||||||
Loan | 62 | Dollar General - De Soto (36) | 0.1% | Actual/360 | 120 | 119 | 0 | 0 | 09/28/2015 | 11/06/2015 | 10/06/2025 | Yes | 10/06/2030 | 3,090 |
A-1-4 |
COMM 2015-LC23 | ||||||||||||||||||||||||
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES | ||||||||||||||||||||||||
Pari Passu | Pari Passu | |||||||||||||||||||||||
% of | Annual | Companion Loan | Companion Loan | Remaining | Crossed | |||||||||||||||||||
Property | Initial Pool | Debt | Monthly Debt | Annual Debt | Interest Only | Cash | With | Related | Underwritten | |||||||||||||||
Flag | ID | Property Name | Balance | Service($)(8) | Service($) | Service($) | Period | Lockbox (9) | Management (10) | Other Loans | Borrower | NOI DSCR (8)(11)(12) | ||||||||||||
Loan | 1 | Equity Inns Portfolio (33) | 8.3% | 4,023,111 | 636,993 | 7,643,911 | 59 | Hard | In-Place | No | 2.65x | |||||||||||||
Property | 1.01 | Homewood Suites Seattle | 1.5% | |||||||||||||||||||||
Property | 1.02 | Homewood Suites Orlando | 0.7% | |||||||||||||||||||||
Property | 1.03 | Courtyard Carlsbad | 0.5% | |||||||||||||||||||||
Property | 1.04 | Courtyard Houston | 0.5% | |||||||||||||||||||||
Property | 1.05 | Homewood Suites Stratford | 0.4% | |||||||||||||||||||||
Property | 1.06 | Hampton Inn Urbana | 0.4% | |||||||||||||||||||||
Property | 1.07 | Springhill Suites Asheville | 0.4% | |||||||||||||||||||||
Property | 1.08 | Hilton Garden Inn Louisville | 0.4% | |||||||||||||||||||||
Property | 1.09 | Hampton Inn Orlando | 0.4% | |||||||||||||||||||||
Property | 1.10 | Hampton Inn Austin | 0.4% | |||||||||||||||||||||
Property | 1.11 | Hampton Inn College Station | 0.4% | |||||||||||||||||||||
Property | 1.12 | Hampton Inn Indianapolis | 0.3% | |||||||||||||||||||||
Property | 1.13 | TownePlace Suites Savannah | 0.3% | |||||||||||||||||||||
Property | 1.14 | Hampton Inn East Lansing | 0.3% | |||||||||||||||||||||
Property | 1.15 | Hampton Inn Naperville | 0.3% | |||||||||||||||||||||
Property | 1.16 | Hilton Garden Inn Rio Rancho | 0.3% | |||||||||||||||||||||
Property | 1.17 | Courtyard Dalton | 0.2% | |||||||||||||||||||||
Property | 1.18 | Hampton Inn Alcoa | 0.2% | |||||||||||||||||||||
Property | 1.19 | Homewood Suites Augusta | 0.2% | |||||||||||||||||||||
Property | 1.20 | Residence Inn Jacksonville | 0.2% | |||||||||||||||||||||
Property | 1.21 | Hampton Inn Milford | 0.1% | |||||||||||||||||||||
Loan | 2 | 32 Avenue of the Americas (33)(36) | 7.3% | 3,429,378 | 1,449,320 | 17,391,844 | 120 | Hard | Springing | No | 2.00x | |||||||||||||
Loan | 3 | 11 Madison Avenue (33)(34)(35) | 7.2% | 2,512,314 | 2,089,775 | 25,077,302 | 118 | Hard | Springing | No | 3.97x | |||||||||||||
Loan | 4 | 1209 DeKalb (35)(36) | 4.8% | 2,203,688 | 59 | Soft | In-Place | No | 1.49x | |||||||||||||||
Loan | 5 | Good Samaritan Medical Tower (36) | 4.4% | 1,965,505 | 118 | Springing Soft | Springing | No | 2.11x | |||||||||||||||
Loan | 6 | Harvey Building Products Portfolio (33) | 4.4% | 2,659,567 | 358,830 | 4,305,965 | Hard | In-Place | No | 2.02x | ||||||||||||||
Property | 6.01 | Londonderry Manufacturing | 0.8% | |||||||||||||||||||||
Property | 6.02 | Waltham Corporate | 0.4% | |||||||||||||||||||||
Property | 6.03 | Dartmouth Manufacturing | 0.4% | |||||||||||||||||||||
Property | 6.04 | Nashua | 0.2% | |||||||||||||||||||||
Property | 6.05 | West Bridgewater | 0.2% | |||||||||||||||||||||
Property | 6.06 | Woburn | 0.2% | |||||||||||||||||||||
Property | 6.07 | Manchester, NH | 0.2% | |||||||||||||||||||||
Property | 6.08 | New London | 0.1% | |||||||||||||||||||||
Property | 6.09 | East Haven | 0.1% | |||||||||||||||||||||
Property | 6.10 | Salem | 0.1% | |||||||||||||||||||||
Property | 6.11 | Bethlehem | 0.1% | |||||||||||||||||||||
Property | 6.12 | Lincoln | 0.1% | |||||||||||||||||||||
Property | 6.13 | Berlin | 0.1% | |||||||||||||||||||||
Property | 6.14 | Woburn CPD | 0.1% | |||||||||||||||||||||
Property | 6.15 | Norwalk | 0.1% | |||||||||||||||||||||
Property | 6.16 | Dartmouth | 0.1% | |||||||||||||||||||||
Property | 6.17 | Braintree | 0.1% | |||||||||||||||||||||
Property | 6.18 | Manchester, CT | 0.1% | |||||||||||||||||||||
Property | 6.19 | Portland | 0.1% | |||||||||||||||||||||
Property | 6.20 | Norwalk | 0.1% | |||||||||||||||||||||
Property | 6.21 | Warwick | 0.1% | |||||||||||||||||||||
Property | 6.22 | Fitchburg | 0.1% | |||||||||||||||||||||
Property | 6.23 | Auburn | 0.1% | |||||||||||||||||||||
Property | 6.24 | Portsmouth | 0.1% | |||||||||||||||||||||
Property | 6.25 | Southampton | 0.0% | |||||||||||||||||||||
Property | 6.26 | Hyannis | 0.0% | |||||||||||||||||||||
Property | 6.27 | Wilkes-Barre | 0.0% | |||||||||||||||||||||
Property | 6.28 | Berlin CPD | 0.0% | |||||||||||||||||||||
Property | 6.29 | Springfield | 0.0% | |||||||||||||||||||||
Property | 6.30 | White River Junction | 0.0% | |||||||||||||||||||||
Loan | 7 | Beach House Hilton Head (36) | 4.2% | 2,547,488 | 23 | Hard | Springing | No | 1.78x | |||||||||||||||
Loan | 8 | Whitehall Hotel | 3.7% | 2,522,913 | Hard | Springing | No | 1.67x | ||||||||||||||||
Loan | 9 | 611 Cowper | 3.4% | 1,971,335 | Hard | Springing | No | 1.68x | ||||||||||||||||
Loan | 10 | Springfield Mall (33) | 3.4% | 1,964,157 | 163,680 | 1,964,157 | Hard | Springing | No | 1.83x | ||||||||||||||
Loan | 11 | Laguna Niguel Town Center | 2.8% | 1,614,473 | None | None | No | Yes - A | 1.43x | |||||||||||||||
Loan | 12 | Hacienda Gardens | 2.5% | 1,092,688 | 120 | Springing Hard | Springing | No | 1.89x | |||||||||||||||
Loan | 13 | Washington Plaza | 2.4% | 1,415,735 | Springing Hard | Springing | No | 1.29x | ||||||||||||||||
Loan | 14 | Carrollwood Station | 2.2% | 1,163,610 | 58 | Soft | Springing | No | 1.60x | |||||||||||||||
Loan | 15 | Murrieta Spectrum | 2.1% | 1,319,479 | 23 | Hard | Springing | No | 1.40x | |||||||||||||||
Loan | 16 | Westin Lake Mary | 2.1% | 1,308,985 | 34 | Hard | Springing | No | 1.82x |
A-1-5 |
COMM 2015-LC23
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Pari Passu | Pari Passu | |||||||||||||||||||||||
% of | Annual | Companion Loan | Companion Loan | Remaining | Crossed | |||||||||||||||||||
Property | Initial Pool | Debt | Monthly Debt | Annual Debt | Interest Only | Cash | With | Related | Underwritten | |||||||||||||||
Flag | ID | Property Name | Balance | Service($)(8) | Service($) | Service($) | Period | Lockbox (9) | Management (10) | Other Loans | Borrower | NOI DSCR (8)(11)(12) | ||||||||||||
Loan | 17 | Lake Creek Festival | 2.1% | 1,195,218 | 23 | Hard | Springing | No | 1.85x | |||||||||||||||
Loan | 18 | Wedgewood Building | 2.0% | 1,191,693 | Springing Hard | Springing | No | 1.35x | ||||||||||||||||
Loan | 19 | Kenhorst Plaza | 1.9% | 1,192,318 | 59 | Hard | In-Place | No | 1.33x | |||||||||||||||
Loan | 20 | Addison Town Center | 1.7% | 1,018,388 | Hard | Springing | No | 1.56x | ||||||||||||||||
Loan | 21 | A&H Olympic | 1.5% | 829,312 | 57 | Springing Hard | Springing | No | Yes - B | 1.78x | ||||||||||||||
Loan | 22 | Brentwood Retail Center (35) | 1.4% | 827,652 | Hard | In-Place | No | 1.31x | ||||||||||||||||
Loan | 23 | A&H Maple Avenue | 1.4% | 745,668 | 58 | Springing Hard | Springing | No | Yes - B | 2.35x | ||||||||||||||
Loan | 24 | BJs Montgomeryville | 1.2% | 751,172 | Hard | Springing | No | 1.32x | ||||||||||||||||
Loan | 25 | Colerain Center | 1.2% | 731,107 | 35 | Springing Hard | Springing | No | 1.46x | |||||||||||||||
Loan | 26 | Whitewater Place | 1.2% | 711,579 | Springing Soft | Springing | No | 1.54x | ||||||||||||||||
Loan | 27 | Brown Street Centre | 1.2% | 700,016 | 35 | Springing Hard | Springing | No | 1.79x | |||||||||||||||
Loan | 28 | Biltmore Parks Apartments | 1.1% | 699,757 | 59 | Springing Soft | Springing | No | 1.53x | |||||||||||||||
Loan | 29 | Ortega Village - Retail | 1.1% | 655,661 | None | None | No | Yes - A | 1.33x | |||||||||||||||
Loan | 30 | Landings Shops and Offices | 0.9% | 574,183 | Soft | Springing | No | 1.46x | ||||||||||||||||
Property | 30.01 | Landings Shops and Offices | 0.5% | |||||||||||||||||||||
Property | 30.02 | Progressive Properties | 0.3% | |||||||||||||||||||||
Property | 30.03 | Kopf Offices | 0.2% | |||||||||||||||||||||
Loan | 31 | Terraces on Second | 0.9% | 534,862 | 58 | Springing Soft | Springing | No | 1.28x | |||||||||||||||
Loan | 32 | 75 Executive Drive (36) | 0.9% | 498,520 | Springing Hard | Springing | No | 1.60x | ||||||||||||||||
Loan | 33 | Best Buy Boca Raton | 0.8% | 355,186 | 120 | Hard | In-Place | No | 1.87x | |||||||||||||||
Loan | 34 | Somerset Apartments | 0.8% | 465,153 | 35 | Springing Soft | Springing | No | 1.44x | |||||||||||||||
Loan | 35 | Walgreens VA Beach | 0.8% | 457,310 | 59 | Springing Hard | Springing | No | 1.37x | |||||||||||||||
Loan | 36 | Holiday Inn Express & Suites Rockport | 0.8% | 520,052 | Springing Hard | Springing | No | 1.94x | ||||||||||||||||
Loan | 37 | Commons at Pembroke | 0.7% | 456,450 | Soft | Springing | No | 1.46x | ||||||||||||||||
Loan | 38 | Monument Creek (36) | 0.7% | 301,604 | 119 | Springing Soft | Springing | No | 1.84x | |||||||||||||||
Loan | 39 | High Country Plaza | 0.7% | 399,536 | None | None | No | Yes - A | 1.37x | |||||||||||||||
Loan | 40 | Williamsburg Center | 0.7% | 437,108 | Soft | Springing | No | 1.92x | ||||||||||||||||
Property | 40.01 | 1734 Corporate Crossing | 0.2% | |||||||||||||||||||||
Property | 40.02 | 1728 Corporate Crossing | 0.2% | |||||||||||||||||||||
Property | 40.03 | 1722 Corporate Crossing | 0.1% | |||||||||||||||||||||
Property | 40.04 | 1035 East Gate Drive | 0.1% | |||||||||||||||||||||
Property | 40.05 | 735 Seibert Road | 0.1% | |||||||||||||||||||||
Property | 40.06 | 703 Seibert Road | 0.0% | |||||||||||||||||||||
Property | 40.07 | 723 Seibert Road | 0.0% | |||||||||||||||||||||
Loan | 41 | Shops at Cardiff Ranch | 0.7% | 390,635 | Springing Hard | Springing | No | 1.67x | ||||||||||||||||
Loan | 42 | Cobblestone Court II | 0.5% | 334,977 | Springing Soft | Springing | No | 1.37x | ||||||||||||||||
Loan | 43 | Hampton Inn & Suites – Portland | 0.5% | 392,996 | Springing Hard | Springing | No | 2.34x | ||||||||||||||||
Loan | 44 | 40 Wall Street (33) | 0.5% | 305,710 | 789,750 | 9,477,003 | Hard | In-Place | No | 2.31x | ||||||||||||||
Loan | 45 | Palisades of Bridgeport | 0.5% | 302,888 | Soft | In-Place | No | 1.45x | ||||||||||||||||
Loan | 46 | Walgreens Frisco TX | 0.4% | 304,190 | Springing Hard | Springing | No | Yes - C | 1.20x | |||||||||||||||
Loan | 47 | Walgreens-Goodwill Missouri TX | 0.4% | 325,143 | Springing Hard | Springing | No | Yes - C | 1.13x | |||||||||||||||
Loan | 48 | Warsaw Village | 0.4% | 238,498 | 22 | Springing Hard | Springing | No | 1.50x | |||||||||||||||
Loan | 49 | Walton Shoppes | 0.4% | 263,677 | Springing Hard | Springing | No | Yes - D | 1.41x | |||||||||||||||
Loan | 50 | Ortega Village- Pads | 0.4% | 216,492 | None | None | No | Yes - A | 1.34x | |||||||||||||||
Loan | 51 | 691 14th Street Retail | 0.4% | 221,860 | Springing Hard | Springing | No | 1.57x | ||||||||||||||||
Loan | 52 | Monte & Wishing Well | 0.3% | 220,759 | Springing Soft | Springing | No | 1.63x | ||||||||||||||||
Property | 52.01 | Monte Carlo MHC | 0.2% | |||||||||||||||||||||
Property | 52.02 | Wishing Well MHP | 0.1% | |||||||||||||||||||||
Loan | 53 | Ferndale Avenue Shoppes | 0.3% | 228,043 | Springing Hard | Springing | No | Yes - D | 1.51x | |||||||||||||||
Loan | 54 | Courtyard Self Storage | 0.3% | 195,020 | 23 | Soft | Springing | No | 1.60x | |||||||||||||||
Loan | 55 | Bayonne MHP | 0.3% | 182,856 | Springing Soft | Springing | No | 1.75x | ||||||||||||||||
Loan | 56 | Best Western Cleveland Airport | 0.3% | 242,835 | Springing Hard | Springing | No | 1.74x | ||||||||||||||||
Loan | 57 | Eureka Crossings | 0.2% | 178,559 | Springing Hard | Springing | No | Yes - D | 1.62x | |||||||||||||||
Loan | 58 | Family Dollar - Rose Hill (36) | 0.1% | 49,961 | 119 | Hard | In-Place | No | Yes - E | 1.74x | ||||||||||||||
Loan | 59 | Family Dollar - Moultrie (36) | 0.1% | 46,455 | 119 | Hard | In-Place | No | Yes - E | 1.71x | ||||||||||||||
Loan | 60 | Family Dollar - Biscoe (36) | 0.1% | 42,949 | 119 | Hard | In-Place | No | Yes - E | 1.74x | ||||||||||||||
Loan | 61 | Family Dollar - Rockingham (36) | 0.1% | 41,021 | 119 | Hard | In-Place | No | Yes - E | 1.73x | ||||||||||||||
Loan | 62 | Dollar General - De Soto (36) | 0.1% | 37,082 | 119 | Hard | In-Place | No | Yes - E | 1.91x |
A-1-6 |
COMM 2015-LC23 | ||||||||||||||||||||||
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES | ||||||||||||||||||||||
% of | FIRREA | Cut-Off | ||||||||||||||||||||
Property | Initial Pool | Underwritten | Grace | Payment | Appraised | Appraisal | Compliant | Date LTV | LTV Ratio at | |||||||||||||
Flag | ID | Property Name | Balance | NCF DSCR (8)(11)(12) | Period (13) | Date | Value ($)(14) | As-of Date | (Yes/No) | Ratio (11)(12)(14) | Maturity or ARD (11)(12)(14) | |||||||||||
Loan | 1 | Equity Inns Portfolio (33) | 8.3% | 2.35x | 0 | 6 | 360,000,000 | Various | Yes | 64.4% | 64.4% | |||||||||||
Property | 1.01 | Homewood Suites Seattle | 1.5% | 56,700,000 | 08/18/2015 | Yes | ||||||||||||||||
Property | 1.02 | Homewood Suites Orlando | 0.7% | 26,100,000 | 08/13/2015 | Yes | ||||||||||||||||
Property | 1.03 | Courtyard Carlsbad | 0.5% | 21,800,000 | 08/18/2015 | Yes | ||||||||||||||||
Property | 1.04 | Courtyard Houston | 0.5% | 18,200,000 | 08/17/2015 | Yes | ||||||||||||||||
Property | 1.05 | Homewood Suites Stratford | 0.4% | 18,600,000 | 08/18/2015 | Yes | ||||||||||||||||
Property | 1.06 | Hampton Inn Urbana | 0.4% | 16,800,000 | 08/14/2015 | Yes | ||||||||||||||||
Property | 1.07 | Springhill Suites Asheville | 0.4% | 16,400,000 | 08/20/2015 | Yes | ||||||||||||||||
Property | 1.08 | Hilton Garden Inn Louisville | 0.4% | 15,100,000 | 08/18/2015 | Yes | ||||||||||||||||
Property | 1.09 | Hampton Inn Orlando | 0.4% | 14,800,000 | 08/13/2015 | Yes | ||||||||||||||||
Property | 1.10 | Hampton Inn Austin | 0.4% | 14,600,000 | 08/17/2015 | Yes | ||||||||||||||||
Property | 1.11 | Hampton Inn College Station | 0.4% | 14,100,000 | 08/14/2015 | Yes | ||||||||||||||||
Property | 1.12 | Hampton Inn Indianapolis | 0.3% | 12,200,000 | 08/17/2015 | Yes | ||||||||||||||||
Property | 1.13 | TownePlace Suites Savannah | 0.3% | 12,100,000 | 08/19/2015 | Yes | ||||||||||||||||
Property | 1.14 | Hampton Inn East Lansing | 0.3% | 10,800,000 | 08/17/2015 | Yes | ||||||||||||||||
Property | 1.15 | Hampton Inn Naperville | 0.3% | 9,800,000 | 08/19/2015 | Yes | ||||||||||||||||
Property | 1.16 | Hilton Garden Inn Rio Rancho | 0.3% | 9,600,000 | 08/10/2015 | Yes | ||||||||||||||||
Property | 1.17 | Courtyard Dalton | 0.2% | 8,800,000 | 08/18/2015 | Yes | ||||||||||||||||
Property | 1.18 | Hampton Inn Alcoa | 0.2% | 8,000,000 | 08/17/2015 | Yes | ||||||||||||||||
Property | 1.19 | Homewood Suites Augusta | 0.2% | 6,500,000 | 08/17/2015 | Yes | ||||||||||||||||
Property | 1.20 | Residence Inn Jacksonville | 0.2% | 6,200,000 | 08/19/2015 | Yes | ||||||||||||||||
Property | 1.21 | Hampton Inn Milford | 0.1% | 5,200,000 | 08/17/2015 | Yes | ||||||||||||||||
Loan | 2 | 32 Avenue of the Americas (33)(36) | 7.3% | 1.88x | 0 | 1 | 770,000,000 | 08/04/2015 | Yes | 55.2% | 55.2% | |||||||||||
Loan | 3 | 11 Madison Avenue (33)(34)(35) | 7.2% | 3.89x | 0 | 6 | 2,350,000,000 | 07/01/2015 | Yes | 32.5% | 32.5% | |||||||||||
Loan | 4 | 1209 DeKalb (35)(36) | 4.8% | 1.48x | 0 | 6 | 63,600,000 | 08/10/2015 | Yes | 72.3% | 72.3% | |||||||||||
Loan | 5 | Good Samaritan Medical Tower (36) | 4.4% | 1.96x | 0 | 6 | 68,000,000 | 07/23/2015 | Yes | 62.8% | 62.8% | |||||||||||
Loan | 6 | Harvey Building Products Portfolio (33) | 4.4% | 1.96x | 0 | 6 | 205,460,000 | Various | Yes | 53.5% | 49.3% | |||||||||||
Property | 6.01 | Londonderry Manufacturing | 0.8% | 40,000,000 | 09/09/2015 | Yes | ||||||||||||||||
Property | 6.02 | Waltham Corporate | 0.4% | 23,900,000 | 09/10/2015 | Yes | ||||||||||||||||
Property | 6.03 | Dartmouth Manufacturing | 0.4% | 17,800,000 | 09/01/2015 | Yes | ||||||||||||||||
Property | 6.04 | Nashua | 0.2% | 9,500,000 | 09/09/2015 | Yes | ||||||||||||||||
Property | 6.05 | West Bridgewater | 0.2% | 7,900,000 | 09/10/2015 | Yes | ||||||||||||||||
Property | 6.06 | Woburn | 0.2% | 7,400,000 | 09/10/2015 | Yes | ||||||||||||||||
Property | 6.07 | Manchester, NH | 0.2% | 7,200,000 | 09/09/2015 | Yes | ||||||||||||||||
Property | 6.08 | New London | 0.1% | 6,620,000 | 10/01/2015 | Yes | ||||||||||||||||
Property | 6.09 | East Haven | 0.1% | 6,300,000 | 10/01/2015 | Yes | ||||||||||||||||
Property | 6.10 | Salem | 0.1% | 5,500,000 | 09/09/2015 | Yes | ||||||||||||||||
Property | 6.11 | Bethlehem | 0.1% | 5,500,000 | 10/01/2015 | Yes | ||||||||||||||||
Property | 6.12 | Lincoln | 0.1% | 5,900,000 | 09/01/2015 | Yes | ||||||||||||||||
Property | 6.13 | Berlin | 0.1% | 5,390,000 | 10/01/2015 | Yes | ||||||||||||||||
Property | 6.14 | Woburn CPD | 0.1% | 6,400,000 | 09/10/2015 | Yes | ||||||||||||||||
Property | 6.15 | Norwalk | 0.1% | 5,310,000 | 10/01/2015 | Yes | ||||||||||||||||
Property | 6.16 | Dartmouth | 0.1% | 4,900,000 | 09/01/2015 | Yes | ||||||||||||||||
Property | 6.17 | Braintree | 0.1% | 3,700,000 | 09/10/2015 | Yes | ||||||||||||||||
Property | 6.18 | Manchester, CT | 0.1% | 3,920,000 | 10/01/2015 | Yes | ||||||||||||||||
Property | 6.19 | Portland | 0.1% | 3,900,000 | 09/09/2015 | Yes | ||||||||||||||||
Property | 6.20 | Norwalk | 0.1% | 4,260,000 | 10/01/2015 | Yes | ||||||||||||||||
Property | 6.21 | Warwick | 0.1% | 3,500,000 | 09/01/2015 | Yes | ||||||||||||||||
Property | 6.22 | Fitchburg | 0.1% | 3,000,000 | 09/09/2015 | Yes | ||||||||||||||||
Property | 6.23 | Auburn | 0.1% | 2,900,000 | 09/10/2015 | Yes | ||||||||||||||||
Property | 6.24 | Portsmouth | 0.1% | 2,800,000 | 09/09/2015 | Yes | ||||||||||||||||
Property | 6.25 | Southampton | 0.0% | 2,350,000 | 10/01/2015 | Yes | ||||||||||||||||
Property | 6.26 | Hyannis | 0.0% | 2,200,000 | 09/10/2015 | Yes | ||||||||||||||||
Property | 6.27 | Wilkes-Barre | 0.0% | 1,900,000 | 10/01/2015 | Yes | ||||||||||||||||
Property | 6.28 | Berlin CPD | 0.0% | 1,910,000 | 10/01/2015 | Yes | ||||||||||||||||
Property | 6.29 | Springfield | 0.0% | 2,100,000 | 09/08/2015 | Yes | ||||||||||||||||
Property | 6.30 | White River Junction | 0.0% | 1,500,000 | 09/09/2015 | Yes | ||||||||||||||||
Loan | 7 | Beach House Hilton Head (36) | 4.2% | 1.58x | 0 | 6 | 55,000,000 | 08/01/2015 | Yes | 72.7% | 62.8% | |||||||||||
Loan | 8 | Whitehall Hotel | 3.7% | 1.51x | 0 | 6 | 67,000,000 | 09/01/2015 | Yes | 53.6% | 40.2% | |||||||||||
Loan | 9 | 611 Cowper | 3.4% | 1.60x | 0 | 6 | 59,000,000 | 11/01/2015 | Yes | 55.8% | 45.0% | |||||||||||
Loan | 10 | Springfield Mall (33) | 3.4% | 1.76x | 0 | 6 | 112,000,000 | 08/15/2015 | Yes | 58.0% | 46.8% | |||||||||||
Loan | 11 | Laguna Niguel Town Center | 2.8% | 1.38x | 0 | 6 | 43,000,000 | 06/03/2015 | Yes | 61.5% | 49.9% | |||||||||||
Loan | 12 | Hacienda Gardens | 2.5% | 1.82x | 0 | 6 | 38,400,000 | 07/17/2015 | Yes | 62.5% | 62.5% | |||||||||||
Loan | 13 | Washington Plaza | 2.4% | 1.24x | 0 | 6 | 33,000,000 | 07/27/2015 | Yes | 69.3% | 56.4% | |||||||||||
Loan | 14 | Carrollwood Station | 2.2% | 1.53x | 0 | 6 | 34,600,000 | 08/12/2015 | Yes | 62.1% | 62.1% | |||||||||||
Loan | 15 | Murrieta Spectrum | 2.1% | 1.30x | 0 | 6 | 29,300,000 | 08/13/2015 | Yes | 70.3% | 67.2% | |||||||||||
Loan | 16 | Westin Lake Mary | 2.1% | 1.57x | 0 | 6 | 29,500,000 | 06/01/2015 | Yes | 67.8% | 60.2% |
A-1-7 |
COMM 2015-LC23
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | FIRREA | Cut-Off | ||||||||||||||||||||
Property | Initial Pool | Underwritten | Grace | Payment | Appraised | Appraisal | Compliant | Date LTV | LTV Ratio at | |||||||||||||
Flag | ID | Property Name | Balance | NCF DSCR (8)(11)(12) | Period (13) | Date | Value ($)(14) | As-of Date | (Yes/No) | Ratio (11)(12)(14) | Maturity or ARD (11)(12)(14) | |||||||||||
Loan | 17 | Lake Creek Festival | 2.1% | 1.66x | 0 | 6 | 28,200,000 | 07/01/2015 | Yes | 70.0% | 59.8% | |||||||||||
Loan | 18 | Wedgewood Building | 2.0% | 1.27x | 0 | 6 | 28,200,000 | 08/17/2015 | Yes | 67.3% | 55.0% | |||||||||||
Loan | 19 | Kenhorst Plaza | 1.9% | 1.25x | 0 | 6 | 25,000,000 | 07/21/2015 | Yes | 73.2% | 67.6% | |||||||||||
Loan | 20 | Addison Town Center | 1.7% | 1.43x | 0 | 6 | 22,460,000 | 07/13/2015 | Yes | 72.3% | 59.0% | |||||||||||
Loan | 21 | A&H Olympic | 1.5% | 1.67x | 0 | 6 | 25,000,000 | 04/15/2015 | Yes | 56.8% | 51.7% | |||||||||||
Loan | 22 | Brentwood Retail Center (35) | 1.4% | 1.29x | 0 | 6 | 20,000,000 | 07/21/2015 | Yes | 66.5% | 58.4% | |||||||||||
Loan | 23 | A&H Maple Avenue | 1.4% | 2.31x | 0 | 6 | 28,500,000 | 04/15/2015 | Yes | 45.6% | 41.4% | |||||||||||
Loan | 24 | BJs Montgomeryville | 1.2% | 1.32x | 5 | 1 | 17,600,000 | 07/08/2015 | Yes | 68.1% | 55.6% | |||||||||||
Loan | 25 | Colerain Center | 1.2% | 1.36x | 0 | 6 | 15,500,000 | 06/04/2015 | Yes | 75.0% | 66.1% | |||||||||||
Loan | 26 | Whitewater Place | 1.2% | 1.51x | 0 | 6 | 16,980,000 | 09/03/2015 | Yes | 67.6% | 55.0% | |||||||||||
Loan | 27 | Brown Street Centre | 1.2% | 1.60x | 0 | 6 | 17,500,000 | 04/20/2015 | Yes | 64.6% | 56.7% | |||||||||||
Loan | 28 | Biltmore Parks Apartments | 1.1% | 1.41x | 0 | 6 | 18,400,000 | 08/27/2015 | Yes | 59.8% | 55.0% | |||||||||||
Loan | 29 | Ortega Village - Retail | 1.1% | 1.31x | 0 | 6 | 14,500,000 | 06/03/2015 | Yes | 72.9% | 59.4% | |||||||||||
Loan | 30 | Landings Shops and Offices | 0.9% | 1.31x | 0 | 6 | 11,900,000 | 05/18/2015 | Yes | 74.9% | 61.6% | |||||||||||
Property | 30.01 | Landings Shops and Offices | 0.5% | 5,950,000 | 05/18/2015 | Yes | ||||||||||||||||
Property | 30.02 | Progressive Properties | 0.3% | 3,550,000 | 05/18/2015 | Yes | ||||||||||||||||
Property | 30.03 | Kopf Offices | 0.2% | 2,400,000 | 05/18/2015 | Yes | ||||||||||||||||
Loan | 31 | Terraces on Second | 0.9% | 1.26x | 0 | 6 | 11,500,000 | 08/11/2015 | Yes | 74.8% | 68.6% | |||||||||||
Loan | 32 | 75 Executive Drive (36) | 0.9% | 1.45x | 0 | 6 | 11,200,000 | 07/02/2015 | Yes | 72.9% | 59.2% | |||||||||||
Loan | 33 | Best Buy Boca Raton | 0.8% | 1.81x | 0 | 6 | 12,600,000 | 08/27/2015 | Yes | 59.9% | 59.9% | |||||||||||
Loan | 34 | Somerset Apartments | 0.8% | 1.33x | 0 | 6 | 10,500,000 | 09/08/2015 | Yes | 71.4% | 62.8% | |||||||||||
Loan | 35 | Walgreens VA Beach | 0.8% | 1.36x | 0 | 6 | 12,300,000 | 07/24/2015 | Yes | 59.9% | 54.9% | |||||||||||
Loan | 36 | Holiday Inn Express & Suites Rockport | 0.8% | 1.76x | 0 | 6 | 11,100,000 | 07/29/2015 | Yes | 66.0% | 49.6% | |||||||||||
Loan | 37 | Commons at Pembroke | 0.7% | 1.34x | 0 | 6 | 10,400,000 | 08/10/2015 | Yes | 69.2% | 56.7% | |||||||||||
Loan | 38 | Monument Creek (36) | 0.7% | 1.82x | 0 | 6 | 10,140,000 | 08/04/2015 | Yes | 65.5% | 65.5% | |||||||||||
Loan | 39 | High Country Plaza | 0.7% | 1.29x | 0 | 6 | 9,450,000 | 06/02/2015 | Yes | 68.6% | 55.8% | |||||||||||
Loan | 40 | Williamsburg Center | 0.7% | 1.72x | 0 | 6 | 8,500,000 | 06/03/2015 | Yes | 74.9% | 55.6% | |||||||||||
Property | 40.01 | 1734 Corporate Crossing | 0.2% | 1,300,000 | 06/03/2015 | Yes | ||||||||||||||||
Property | 40.02 | 1728 Corporate Crossing | 0.2% | 1,250,000 | 06/03/2015 | Yes | ||||||||||||||||
Property | 40.03 | 1722 Corporate Crossing | 0.1% | 1,200,000 | 06/03/2015 | Yes | ||||||||||||||||
Property | 40.04 | 1035 East Gate Drive | 0.1% | 1,575,000 | 06/03/2015 | Yes | ||||||||||||||||
Property | 40.05 | 735 Seibert Road | 0.1% | 1,175,000 | 06/03/2015 | Yes | ||||||||||||||||
Property | 40.06 | 703 Seibert Road | 0.0% | 1,025,000 | 06/03/2015 | Yes | ||||||||||||||||
Property | 40.07 | 723 Seibert Road | 0.0% | 975,000 | 06/03/2015 | Yes | ||||||||||||||||
Loan | 41 | Shops at Cardiff Ranch | 0.7% | 1.60x | 0 | 6 | 9,400,000 | 08/10/2015 | Yes | 67.4% | 54.8% | |||||||||||
Loan | 42 | Cobblestone Court II | 0.5% | 1.31x | 0 | 6 | 7,420,000 | 07/07/2015 | Yes | 70.0% | 57.6% | |||||||||||
Loan | 43 | Hampton Inn & Suites – Portland | 0.5% | 2.12x | 0 | 6 | 8,900,000 | 06/22/2015 | Yes | 56.0% | 35.3% | |||||||||||
Loan | 44 | 40 Wall Street (33) | 0.5% | 2.13x | 0 | 6 | 540,000,000 | 06/01/2015 | Yes | 29.4% | 21.1% | |||||||||||
Loan | 45 | Palisades of Bridgeport | 0.5% | 1.34x | 0 | 6 | 6,300,000 | 07/17/2015 | Yes | 72.9% | 60.4% | |||||||||||
Loan | 46 | Walgreens Frisco TX | 0.4% | 1.20x | 0 | 6 | 6,585,000 | 07/14/2015 | Yes | 60.4% | 37.5% | |||||||||||
Loan | 47 | Walgreens-Goodwill Missouri TX | 0.4% | 1.13x | 0 | 6 | 5,370,000 | 07/23/2015 | Yes | 74.0% | 41.1% | |||||||||||
Loan | 48 | Warsaw Village | 0.4% | 1.33x | 0 | 6 | 4,900,000 | 08/07/2015 | Yes | 73.5% | 70.4% | |||||||||||
Loan | 49 | Walton Shoppes | 0.4% | 1.28x | 0 | 6 | 5,350,000 | 07/17/2015 | Yes | 65.4% | 40.2% | |||||||||||
Loan | 50 | Ortega Village- Pads | 0.4% | 1.31x | 0 | 6 | 5,900,000 | 06/03/2015 | Yes | 59.2% | 48.2% | |||||||||||
Loan | 51 | 691 14th Street Retail | 0.4% | 1.51x | 0 | 6 | 4,900,000 | 04/22/2015 | Yes | 71.2% | 58.5% | |||||||||||
Loan | 52 | Monte & Wishing Well | 0.3% | 1.61x | 0 | 6 | 4,550,000 | 05/14/2015 | Yes | 73.0% | 53.5% | |||||||||||
Property | 52.01 | Monte Carlo MHC | 0.2% | 2,620,000 | 05/14/2015 | Yes | ||||||||||||||||
Property | 52.02 | Wishing Well MHP | 0.1% | 1,930,000 | 05/14/2015 | Yes | ||||||||||||||||
Loan | 53 | Ferndale Avenue Shoppes | 0.3% | 1.39x | 0 | 6 | 4,600,000 | 07/17/2015 | Yes | 65.9% | 40.6% | |||||||||||
Loan | 54 | Courtyard Self Storage | 0.3% | 1.57x | 0 | 6 | 4,100,000 | 08/15/2015 | Yes | 73.2% | 63.4% | |||||||||||
Loan | 55 | Bayonne MHP | 0.3% | 1.71x | 0 | 6 | 5,700,000 | 05/27/2015 | Yes | 52.6% | 42.6% | |||||||||||
Loan | 56 | Best Western Cleveland Airport | 0.3% | 1.52x | 0 | 6 | 4,500,000 | 08/17/2015 | Yes | 66.5% | 42.5% | |||||||||||
Loan | 57 | Eureka Crossings | 0.2% | 1.45x | 0 | 6 | 3,650,000 | 07/17/2015 | Yes | 64.2% | 39.8% | |||||||||||
Loan | 58 | Family Dollar - Rose Hill (36) | 0.1% | 1.71x | 0 | 6 | 1,425,000 | 05/06/2015 | Yes | 70.0% | 70.0% | |||||||||||
Loan | 59 | Family Dollar - Moultrie (36) | 0.1% | 1.68x | 0 | 6 | 1,325,000 | 05/06/2015 | Yes | 70.0% | 70.0% | |||||||||||
Loan | 60 | Family Dollar - Biscoe (36) | 0.1% | 1.71x | 0 | 6 | 1,225,000 | 05/06/2015 | Yes | 70.0% | 70.0% | |||||||||||
Loan | 61 | Family Dollar - Rockingham (36) | 0.1% | 1.70x | 0 | 6 | 1,170,000 | 05/06/2015 | Yes | 70.0% | 70.0% | |||||||||||
Loan | 62 | Dollar General - De Soto (36) | 0.1% | 1.88x | 0 | 6 | 1,080,000 | 08/06/2015 | Yes | 65.0% | 65.0% |
A-1-8 |
COMM 2015-LC23 | ||||||||||||||||||||||||||
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES | ||||||||||||||||||||||||||
Net | Loan per Net | |||||||||||||||||||||||||
% of | Rentable Area | Units | Rentable Area | |||||||||||||||||||||||
Property | Initial Pool | Year | Year | (SF/Units/ | of | (SF/Units/Rooms/ | ||||||||||||||||||||
Flag | ID | Property Name | Balance | Address | City | County | State | Zip Code | Built | Renovated | Rooms/Pads)(4) | Measure | Pads) ($)(11)(12) | |||||||||||||
Loan | 1 | Equity Inns Portfolio (33) | 8.3% | Various | Various | Various | Various | Various | Various | Various | 2,690 | Rooms | 86,245 | |||||||||||||
Property | 1.01 | Homewood Suites Seattle | 1.5% | 206 Western Avenue West | Seattle | King | WA | 98119 | 1998 | NAP | 161 | Rooms | 261,491 | |||||||||||||
Property | 1.02 | Homewood Suites Orlando | 0.7% | 8745 International Drive | Orlando | Orange | FL | 32819 | 1999 | 2014 | 252 | Rooms | 72,817 | |||||||||||||
Property | 1.03 | Courtyard Carlsbad | 0.5% | 5835 Owens Avenue | Carlsbad | San Diego | CA | 92008 | 2000 | 2012-2013 | 145 | Rooms | 100,690 | |||||||||||||
Property | 1.04 | Courtyard Houston | 0.5% | 12401 Katy Freeway | Houston | Harris | TX | 77079 | 1979 | 2010 | 176 | Rooms | 76,705 | |||||||||||||
Property | 1.05 | Homewood Suites Stratford | 0.4% | 6905 Main Street | Stratford | Fairfield | CT | 06614 | 2002 | 2009, 2013, 2014 | 135 | Rooms | 92,593 | |||||||||||||
Property | 1.06 | Hampton Inn Urbana | 0.4% | 1200 West University Avenue | Urbana | Champaign | IL | 61801 | 1995 | 2011 | 130 | Rooms | 95,385 | |||||||||||||
Property | 1.07 | Springhill Suites Asheville | 0.4% | 2 Buckstone Place | Asheville | Buncombe | NC | 28805 | 2001 | 2009 | 88 | Rooms | 130,682 | |||||||||||||
Property | 1.08 | Hilton Garden Inn Louisville | 0.4% | 1530 Alliant Avenue | Louisville | Jefferson | KY | 40299 | 1999 | 2012 | 112 | Rooms | 102,232 | |||||||||||||
Property | 1.09 | Hampton Inn Orlando | 0.4% | 8900 Universal Boulevard | Orlando | Orange | FL | 32819 | 1999 | 2012 | 170 | Rooms | 65,588 | |||||||||||||
Property | 1.10 | Hampton Inn Austin | 0.4% | 7619 Interstate 35 North | Austin | Travis | TX | 78752 | 1985 | 2009 | 121 | Rooms | 90,909 | |||||||||||||
Property | 1.11 | Hampton Inn College Station | 0.4% | 320 Texas Avenue South | College Station | Brazos | TX | 77840 | 1986 | 2007, 2008 | 133 | Rooms | 78,947 | |||||||||||||
Property | 1.12 | Hampton Inn Indianapolis | 0.3% | 6817 East 82nd Street | Indianapolis | Marion | IN | 46250 | 1987 | 2013 | 128 | Rooms | 70,703 | |||||||||||||
Property | 1.13 | TownePlace Suites Savannah | 0.3% | 11309 Abercorn Street | Savannah | Chatham | GA | 31411 | 2000 | 2012, 2013 | 93 | Rooms | 91,398 | |||||||||||||
Property | 1.14 | Hampton Inn East Lansing | 0.3% | 2500 Coolidge Road | East Lansing | Ingham | MI | 48823 | 2000 | 2008 | 86 | Rooms | 93,023 | |||||||||||||
Property | 1.15 | Hampton Inn Naperville | 0.3% | 1087 East Diehl Road | Naperville | Du Page | IL | 60563 | 1987 | 2010 | 129 | Rooms | 56,589 | |||||||||||||
Property | 1.16 | Hilton Garden Inn Rio Rancho | 0.3% | 1771 Rio Rancho Boulevard | Rio Rancho | Sandoval | NM | 87124 | 1998 | 2014 | 129 | Rooms | 55,814 | |||||||||||||
Property | 1.17 | Courtyard Dalton | 0.2% | 785 College Drive | Dalton | Whitfield | GA | 30720 | 1999 | 2012 | 93 | Rooms | 63,441 | |||||||||||||
Property | 1.18 | Hampton Inn Alcoa | 0.2% | 148 International Avenue | Alcoa | Blount | TN | 37701 | 1989 | 2009-2010 | 118 | Rooms | 41,949 | |||||||||||||
Property | 1.19 | Homewood Suites Augusta | 0.2% | 1049 Stevens Creek Road | Augusta | Richmond | GA | 30907 | 1997 | 2008 | 65 | Rooms | 74,615 | |||||||||||||
Property | 1.20 | Residence Inn Jacksonville | 0.2% | 1310 Airport Road | Jacksonville | Duval | FL | 32218 | 1999 | NAP | 78 | Rooms | 57,692 | |||||||||||||
Property | 1.21 | Hampton Inn Milford | 0.1% | 129 Plains Road | Milford | New Haven | CT | 06460 | 1986 | 2010 | 148 | Rooms | 18,243 | |||||||||||||
Loan | 2 | 32 Avenue of the Americas (33)(36) | 7.3% | 32 Avenue of the Americas | New York | New York | NY | 10013 | 1932 | 1999 | 1,163,051 | Sq. Ft. | 365 | |||||||||||||
Loan | 3 | 11 Madison Avenue (33)(34)(35) | 7.2% | 11 Madison Avenue | New York | New York | NY | 10010 | 1932-1950 | 1994-1997, 2015 | 2,285,043 | Sq. Ft. | 334 | |||||||||||||
Loan | 4 | 1209 DeKalb (35)(36) | 4.8% | 1209 DeKalb Avenue | Brooklyn | Kings | NY | 11221 | 2013 | NAP | 127 | Units | 362,205 | |||||||||||||
Loan | 5 | Good Samaritan Medical Tower (36) | 4.4% | 1127 Wilshire Boulevard | Los Angeles | Los Angeles | CA | 90017 | 1965 | 2014 | 146,354 | Sq. Ft. | 292 | |||||||||||||
Loan | 6 | Harvey Building Products Portfolio (33) | 4.4% | Various | Various | Various | Various | Various | Various | Various | 2,046,119 | Sq. Ft. | 54 | |||||||||||||
Property | 6.01 | Londonderry Manufacturing | 0.8% | 5 Jack’s Bridge Road | Londonderry | Hillsborough | NH | 03062 | 2007 | NAP | 376,294 | Sq. Ft. | 56 | |||||||||||||
Property | 6.02 | Waltham Corporate | 0.4% | 1400 Main Street | Waltham | Middlesex | MA | 02451 | 1999 | 2010-2015 | 54,400 | Sq. Ft. | 200 | |||||||||||||
Property | 6.03 | Dartmouth Manufacturing | 0.4% | 7 Ledgewood Boulevard | North Dartmouth | Bristol | MA | 02714 | 1998 | NAP | 235,239 | Sq. Ft. | 43 | |||||||||||||
Property | 6.04 | Nashua | 0.2% | 90 Northeastern Boulevard | Nashua | Hillsborough | NH | 03062 | 2006 | NAP | 111,594 | Sq. Ft. | 46 | |||||||||||||
Property | 6.05 | West Bridgewater | 0.2% | 10 Turnpike Street | West Bridgewater | Plymouth | MA | 02379 | 2005 | NAP | 81,776 | Sq. Ft. | 58 | |||||||||||||
Property | 6.06 | Woburn | 0.2% | 27-33 Commonwealth Avenue | Woburn | Middlesex | MA | 01801 | 1989 | 2013 | 76,054 | Sq. Ft. | 62 | |||||||||||||
Property | 6.07 | Manchester, NH | 0.2% | 344 East Industrial Park Drive | Manchester | Hillsborough | NH | 03109 | 2003 | NAP | 81,747 | Sq. Ft. | 47 | |||||||||||||
Property | 6.08 | New London | 0.1% | 1096 Hartford Turnpike | Waterford | New London | CT | 06385 | 2008 | NAP | 70,642 | Sq. Ft. | 52 | |||||||||||||
Property | 6.09 | East Haven | 0.1% | 221 Commerce Street | East Haven | New Haven | CT | 06512 | 2005 | NAP | 70,089 | Sq. Ft. | 48 | |||||||||||||
Property | 6.10 | Salem | 0.1% | 4 Raymond Avenue | Salem | Rockingham | NH | 03079 | 2001 | NAP | 58,286 | Sq. Ft. | 58 | |||||||||||||
Property | 6.11 | Bethlehem | 0.1% | 2000 City Line Road | Bethlehem | Lehigh | PA | 18017 | 1973 | NAP | 71,091 | Sq. Ft. | 46 | |||||||||||||
Property | 6.12 | Lincoln | 0.1% | 21 Wellington Road | Lincoln | Providence | RI | 02865 | 2003 | NAP | 80,240 | Sq. Ft. | 40 | |||||||||||||
Property | 6.13 | Berlin | 0.1% | 272 Woodlawn Road | Berlin | Hartford | CT | 06037 | 1995 | NAP | 43,796 | Sq. Ft. | 70 | |||||||||||||
Property | 6.14 | Woburn CPD | 0.1% | 35 Commonwealth Avenue | Woburn | Middlesex | MA | 01801 | 1984 | NAP | 59,800 | Sq. Ft. | 50 | |||||||||||||
Property | 6.15 | Norwalk | 0.1% | 256-258 Dr. Martin Luther King Jr. Drive | Norwalk | Fairfield | CT | 06854 | 1972 | NAP | 40,232 | Sq. Ft. | 62 | |||||||||||||
Property | 6.16 | Dartmouth | 0.1% | 965 Reed Road | Dartmouth | Bristol | MA | 02747 | 1974 | 2004 | 63,117 | Sq. Ft. | 38 | |||||||||||||
Property | 6.17 | Braintree | 0.1% | 320 Wood Road | Braintree | Norfolk | MA | 02184 | 1986 | NAP | 32,531 | Sq. Ft. | 69 | |||||||||||||
Property | 6.18 | Manchester, CT | 0.1% | 730 Parker Street | Manchester | Hartford | CT | 06042 | 1996 | 2004 | 49,175 | Sq. Ft. | 43 | |||||||||||||
Property | 6.19 | Portland | 0.1% | 401 Riverside Street | Portland | Cumberland | ME | 04103 | 1976 | 2003 | 48,145 | Sq. Ft. | 44 | |||||||||||||
Property | 6.20 | Norwalk | 0.1% | 260 Dr. Martin Luther King Jr. Drive | Norwalk | Fairfield | CT | 06854 | 1974 | NAP | 30,000 | Sq. Ft. | 63 | |||||||||||||
Property | 6.21 | Warwick | 0.1% | 45 Lori Ann Way | Warwick | Kent | RI | 02886 | 1997 | NAP | 43,899 | Sq. Ft. | 43 | |||||||||||||
Property | 6.22 | Fitchburg | 0.1% | 133 Benson Street | Fitchburg | Worcester | MA | 01420 | 2002 | NAP | 39,433 | Sq. Ft. | 41 | |||||||||||||
Property | 6.23 | Auburn | 0.1% | 300 Washington Street | Auburn | Worcester | MA | 01501 | 1983 | 1995-2006 | 37,132 | Sq. Ft. | 42 | |||||||||||||
Property | 6.24 | Portsmouth | 0.1% | 240 West Road | Portsmouth | Rockingham | NH | 03801 | 1993 | NAP | 31,470 | Sq. Ft. | 48 | |||||||||||||
Property | 6.25 | Southampton | 0.0% | 99 Buck Road | Huntingdon Valley | Bucks | PA | 19006 | 2009 | NAP | 36,421 | Sq. Ft. | 34 | |||||||||||||
Property | 6.26 | Hyannis | 0.0% | 186 Breeds Hill Road | Hyannis | Barnstable | MA | 02601 | 1986 | 2001-2002 | 24,070 | Sq. Ft. | 49 | |||||||||||||
Property | 6.27 | Wilkes-Barre | 0.0% | 936 Rutter Avenue | Forty Fort | Luzerne | PA | 18704 | 1950 | 1999 | 32,200 | Sq. Ft. | 34 | |||||||||||||
Property | 6.28 | Berlin CPD | 0.0% | 230 Woodlawn Road | Berlin | Hartford | CT | 06037 | 1977 | 2002 | 28,163 | Sq. Ft. | 38 | |||||||||||||
Property | 6.29 | Springfield | 0.0% | 175 Carando Drive | Springfield | Hampden | MA | 01104 | 1989 | NAP | 25,347 | Sq. Ft. | 39 | |||||||||||||
Property | 6.30 | White River Junction | 0.0% | 1354 North Hartland Road | White River Junction | Windsor | VT | 05001 | 1981 | 1991 | 13,736 | Sq. Ft. | 62 | |||||||||||||
Loan | 7 | Beach House Hilton Head (36) | 4.2% | 1 South Forest Beach Drive | Hilton Head Island | Beaufort | SC | 29928 | 1973 | 2012 | 202 | Rooms | 198,020 | |||||||||||||
Loan | 8 | Whitehall Hotel | 3.7% | 105 East Delaware Place | Chicago | Cook | IL | 60611 | 1928 | 1972, 1994, 2012-2014 | 222 | Rooms | 161,912 | |||||||||||||
Loan | 9 | 611 Cowper | 3.4% | 611 Cowper Street | Palo Alto | Santa Clara | CA | 94301 | 2015 | NAP | 30,000 | Sq. Ft. | 1,097 | |||||||||||||
Loan | 10 | Springfield Mall (33) | 3.4% | 1250 Baltimore Pike | Springfield Township | Delaware | PA | 19064 | 1974 | 1997 | 223,180 | Sq. Ft. | 291 | |||||||||||||
Loan | 11 | Laguna Niguel Town Center | 2.8% | 30000-30192 Town Center Drive | Laguna Niguel | Orange | CA | 92677 | 1980 | 2004 | 98,157 | Sq. Ft. | 269 | |||||||||||||
Loan | 12 | Hacienda Gardens | 2.5% | 3001-3171 Meridian Avenue | San Jose | Santa Clara | CA | 95124 | 1959, 2007, 2010, 2013, 2015 | NAP | 104,557 | Sq. Ft. | 230 | |||||||||||||
Loan | 13 | Washington Plaza | 2.4% | 400-530 East Washington Boulevard | Los Angeles | Los Angeles | CA | 90015 | 1926 | 2014 | 138,010 | Sq. Ft. | 166 | |||||||||||||
Loan | 14 | Carrollwood Station | 2.2% | 8781 White Swan Drive | Tampa | Hillsborough | FL | 33614 | 1984 | 2015 | 336 | Units | 63,988 | |||||||||||||
Loan | 15 | Murrieta Spectrum | 2.1% | 25115 - 25175 Madison Avenue | Murrieta | Riverside | CA | 92562 | 2005 | NAP | 172,598 | Sq. Ft. | 119 | |||||||||||||
Loan | 16 | Westin Lake Mary | 2.1% | 2974 International Parkway | Lake Mary | Seminole | FL | 32746 | 2009 | NAP | 252 | Rooms | 79,365 |
A-1-9 |
COMM 2015-LC23
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Net | Loan per Net | |||||||||||||||||||||||||
% of | Rentable Area | Units | Rentable Area | |||||||||||||||||||||||
Property | Initial Pool | Year | Year | (SF/Units/ | of | (SF/Units/Rooms/ | ||||||||||||||||||||
Flag | ID | Property Name | Balance | Address | City | County | State | Zip Code | Built | Renovated | Rooms/Pads)(4) | Measure | Pads) ($)(11)(12) | |||||||||||||
Loan | 17 | Lake Creek Festival | 2.1% | 13729 Research Boulevard | Austin | Williamson | TX | 78750 | 1990, 1991 | NAP | 285,454 | Sq. Ft. | 69 | |||||||||||||
Loan | 18 | Wedgewood Building | 2.0% | 2015 Manhattan Beach Boulevard | Redondo Beach | Los Angeles | CA | 90278 | 1986 | 2014 | 83,005 | Sq. Ft. | 229 | |||||||||||||
Loan | 19 | Kenhorst Plaza | 1.9% | 300 Kenhorst Plaza | Kenhorst | Berks | PA | 19607 | 1990 | NAP | 161,424 | Sq. Ft. | 113 | |||||||||||||
Loan | 20 | Addison Town Center | 1.7% | 3740-3850 Beltline Road | Addison | Dallas | TX | 75001 | 1993-1994 | 2003 | 186,275 | Sq. Ft. | 87 | |||||||||||||
Loan | 21 | A&H Olympic | 1.5% | 210 East Olympic Boulevard | Los Angeles | Los Angeles | CA | 90015 | 1989 | NAP | 105,225 | Sq. Ft. | 135 | |||||||||||||
Loan | 22 | Brentwood Retail Center (35) | 1.4% | 11707-11715 Gorham Avenue | Brentwood | Los Angeles | CA | 90049 | 1960 | 1979 | 10,511 | Sq. Ft. | 1,264 | |||||||||||||
Loan | 23 | A&H Maple Avenue | 1.4% | 1001 South Maple Avenue | Los Angeles | Los Angeles | CA | 90015 | 1984, 1993 | NAP | 23,941 | Sq. Ft. | 543 | |||||||||||||
Loan | 24 | BJs Montgomeryville | 1.2% | 724 Bethlehem Pike | Montgomeryville | Montgomery | PA | 18936 | 2015 | NAP | 87,984 | Sq. Ft. | 136 | |||||||||||||
Loan | 25 | Colerain Center | 1.2% | 9470 Colerain Avenue | Colerain Township | Hamilton | OH | 45251 | 1988, 2003 | 2013 | 78,169 | Sq. Ft. | 149 | |||||||||||||
Loan | 26 | Whitewater Place | 1.2% | 2695 Satinwood Avenue Southeast | Grand Rapids | Kent | MI | 49546 | 2015 | NAP | 89 | Units | 129,065 | |||||||||||||
Loan | 27 | Brown Street Centre | 1.2% | 255 East Brown Street | Birmingham | Oakland | MI | 48009 | 1985 | 2014 | 69,716 | Sq. Ft. | 162 | |||||||||||||
Loan | 28 | Biltmore Parks Apartments | 1.1% | 1111 Vista Valet | San Antonio | Bexar | TX | 78216 | 1984 | 2015 | 264 | Units | 41,667 | |||||||||||||
Loan | 29 | Ortega Village - Retail | 1.1% | 31654-31742 Rancho Viejo Road | San Juan Capistrano | Orange | CA | 92675 | 1981 | NAP | 40,423 | Sq. Ft. | 262 | |||||||||||||
Loan | 30 | Landings Shops and Offices | 0.9% | Various | Avon Lake | Lorain | OH | 44012 | Various | Various | 102,220 | Sq. Ft. | 87 | |||||||||||||
Property | 30.01 | Landings Shops and Offices | 0.5% | 445 Avon Belden Road | Avon Lake | Lorain | OH | 44012 | 1975-1980 | NAP | 71,063 | Sq. Ft. | 63 | |||||||||||||
Property | 30.02 | Progressive Properties | 0.3% | 450 Avon Belden Road | Avon Lake | Lorain | OH | 44012 | 1997 | NAP | 12,100 | Sq. Ft. | 220 | |||||||||||||
Property | 30.03 | Kopf Offices | 0.2% | 412 & 420 Avon Belden Road | Avon Lake | Lorain | OH | 44012 | 1996 | 2004 | 19,057 | Sq. Ft. | 94 | |||||||||||||
Loan | 31 | Terraces on Second | 0.9% | 507 South 2nd Street | Champaign | Champaign | IL | 61820 | 2015 | NAP | 112 | Beds | 76,786 | |||||||||||||
Loan | 32 | 75 Executive Drive (36) | 0.9% | 75 Executive Drive | Aurora | DuPage | IL | 60504 | 1980 | 1990, 2006 | 107,087 | Sq. Ft. | 76 | |||||||||||||
Loan | 33 | Best Buy Boca Raton | 0.8% | 20540 State Road 7 | Boca Raton | Palm Beach | FL | 33498 | 1995 | 2015 | 58,000 | Sq. Ft. | 130 | |||||||||||||
Loan | 34 | Somerset Apartments | 0.8% | 1101,1201 & 1205 Madeira Drive Southeast | Albuquerque | Bernalillo | NM | 87108 | 1962 | 2004-2014 | 224 | Units | 33,482 | |||||||||||||
Loan | 35 | Walgreens VA Beach | 0.8% | 645 First Colonial Road | Virginia Beach | Virginia Beach City | VA | 23451 | 2015 | NAP | 14,200 | Sq. Ft. | 519 | |||||||||||||
Loan | 36 | Holiday Inn Express & Suites Rockport | 0.8% | 925 Lady Claire Street | Rockport | Aransas | TX | 78382 | 2010 | NAP | 69 | Rooms | 106,216 | |||||||||||||
Loan | 37 | Commons at Pembroke | 0.7% | 408 West Railroad Street | Pembroke | Robeson | NC | 28372 | 2006, 2010 | NAP | 336 | Beds | 21,405 | |||||||||||||
Loan | 38 | Monument Creek (36) | 0.7% | 85 Sunflower Road | Colorado Springs | El Paso | CO | 80907 | 1997 | NAP | 137 | Pads | 48,467 | |||||||||||||
Loan | 39 | High Country Plaza | 0.7% | 15805-15817 Bernardo Center Drive | San Diego | San Diego | CA | 92127 | 1988 | NAP | 20,598 | Sq. Ft. | 315 | |||||||||||||
Loan | 40 | Williamsburg Center | 0.7% | Various | O’Fallon | St. Clair | IL | 62269 | Various | NAP | 84,487 | Sq. Ft. | 75 | |||||||||||||
Property | 40.01 | 1734 Corporate Crossing | 0.2% | 1734 Corporate Crossing | O’Fallon | St. Clair | IL | 62269 | 2005 | NAP | 12,100 | Sq. Ft. | 124 | |||||||||||||
Property | 40.02 | 1728 Corporate Crossing | 0.2% | 1728 Corporate Crossing | O’Fallon | St. Clair | IL | 62269 | 1999 | NAP | 12,100 | Sq. Ft. | 119 | |||||||||||||
Property | 40.03 | 1722 Corporate Crossing | 0.1% | 1722 Corporate Crossing | O’Fallon | St. Clair | IL | 62269 | 2000 | NAP | 12,100 | Sq. Ft. | 114 | |||||||||||||
Property | 40.04 | 1035 East Gate Drive | 0.1% | 1035 Eastgate | O’Fallon | St. Clair | IL | 62269 | 2005 | NAP | 14,600 | Sq. Ft. | 46 | |||||||||||||
Property | 40.05 | 735 Seibert Road | 0.1% | 735 Seibert Road | O’Fallon | St. Clair | IL | 62269 | 1996 | NAP | 11,218 | Sq. Ft. | 45 | |||||||||||||
Property | 40.06 | 703 Seibert Road | 0.0% | 703 Seibert Road | O’Fallon | St. Clair | IL | 62269 | 1996 | NAP | 11,169 | Sq. Ft. | 39 | |||||||||||||
Property | 40.07 | 723 Seibert Road | 0.0% | 723 Seibert Road | O’Fallon | St. Clair | IL | 62269 | 1996 | NAP | 11,200 | Sq. Ft. | 37 | |||||||||||||
Loan | 41 | Shops at Cardiff Ranch | 0.7% | 4603 FM 1463 | Katy | Fort Bend | TX | 77494 | 2015 | NAP | 24,250 | Sq. Ft. | 261 | |||||||||||||
Loan | 42 | Cobblestone Court II | 0.5% | 910-1010 Center Place Drive | Rochester | Monroe | NY | 14615 | 1994, 2001 | NAP | 80 | Units | 64,931 | |||||||||||||
Loan | 43 | Hampton Inn & Suites – Portland | 0.5% | 1705 Highway 181 North | Portland | San Patricio | TX | 78374 | 2001 | 2013 | 54 | Rooms | 92,378 | |||||||||||||
Loan | 44 | 40 Wall Street (33) | 0.5% | 40 Wall Street | New York | New York | NY | 10006 | 1929 | 1995 | 1,165,207 | Sq. Ft. | 136 | |||||||||||||
Loan | 45 | Palisades of Bridgeport | 0.5% | 245-275, 315 Palisade Avenue | Bridgeport | Fairfield | CT | 06610 | 1918-1920 | 1993 | 93 | Units | 49,412 | |||||||||||||
Loan | 46 | Walgreens Frisco TX | 0.4% | 3030 West Main Street | Frisco | Denton | TX | 75034 | 2003 | NAP | 14,560 | Sq. Ft. | 273 | |||||||||||||
Loan | 47 | Walgreens-Goodwill Missouri TX | 0.4% | 4042 Lake Shore Harbour Boulevard | Missouri City | Fort Bend | TX | 77459 | 2005 | NAP | 14,820 | Sq. Ft. | 268 | |||||||||||||
Loan | 48 | Warsaw Village | 0.4% | 4665-4719 Richmond Road | Warsaw | Richmond | VA | 22572 | 1991 | NAP | 60,100 | Sq. Ft. | 60 | |||||||||||||
Loan | 49 | Walton Shoppes | 0.4% | 1266 Walton Boulevard | Rochester Hills | Oakland | MI | 48307 | 2014 | NAP | 22,715 | Sq. Ft. | 154 | |||||||||||||
Loan | 50 | Ortega Village- Pads | 0.4% | 31734-31736 Rancho Viejo Road | San Juan Capistrano | Orange | CA | 92675 | 1980 | NAP | 16,601 | Sq. Ft. | 210 | |||||||||||||
Loan | 51 | 691 14th Street Retail | 0.4% | 691 14th Street, Northwest | Atlanta | Fulton | GA | 30318 | 2014 | NAP | 10,857 | Sq. Ft. | 321 | |||||||||||||
Loan | 52 | Monte & Wishing Well | 0.3% | Various | Various | Various | NY | Various | Various | Various | 95 | Pads | 34,941 | |||||||||||||
Property | 52.01 | Monte Carlo MHC | 0.2% | 4294 Caledonia Avon Road | Caledonia | Livingston | NY | 14423 | 1977 | 1987 | 54 | Pads | 35,396 | |||||||||||||
Property | 52.02 | Wishing Well MHP | 0.1% | 2469 State Route 444 | Bloomfield | Ontario | NY | 14469 | 1980 | 1990 | 41 | Pads | 34,341 | |||||||||||||
Loan | 53 | Ferndale Avenue Shoppes | 0.3% | 23123-23235 Woodward Avenue | Ferndale | Oakland | MI | 48220 | 2013 | NAP | 17,218 | Sq. Ft. | 176 | |||||||||||||
Loan | 54 | Courtyard Self Storage | 0.3% | #40A & #40B Bay Road, 1, 2, & 3 East End Quarter | St. Thomas | NAP | USVI | 00802 | 2006 | NAP | 12,060 | Sq. Ft. | 249 | |||||||||||||
Loan | 55 | Bayonne MHP | 0.3% | 197 West 24th Street | Bayonne | Hudson | NJ | 07002 | 1960 | 1994 | 109 | Pads | 27,490 | |||||||||||||
Loan | 56 | Best Western Cleveland Airport | 0.3% | 16501 Snow Road | Brook Park | Cuyahoga | OH | 44142 | 1996 | 2012 | 64 | Rooms | 46,771 | |||||||||||||
Loan | 57 | Eureka Crossings | 0.2% | 15200-15300 Eureka Road | Southgate | Wayne | MI | 48195 | 1991 | NAP | 25,233 | Sq. Ft. | 93 | |||||||||||||
Loan | 58 | Family Dollar - Rose Hill (36) | 0.1% | 269 North Sycamore Street | Rose Hill | Duplin | NC | 28458 | 2014 | NAP | 8,320 | Sq. Ft. | 120 | |||||||||||||
Loan | 59 | Family Dollar - Moultrie (36) | 0.1% | 2993 West Boulevard | Moultrie | Colquitt | GA | 31768 | 2014 | NAP | 8,233 | Sq. Ft. | 113 | |||||||||||||
Loan | 60 | Family Dollar - Biscoe (36) | 0.1% | 2804 NC Highway 24-27 | Biscoe | Montgomery | NC | 27209 | 2015 | NAP | 8,320 | Sq. Ft. | 103 | |||||||||||||
Loan | 61 | Family Dollar - Rockingham (36) | 0.1% | 303 Airport Road | Rockingham | Richmond | NC | 28379 | 2014 | NAP | 8,320 | Sq. Ft. | 98 | |||||||||||||
Loan | 62 | Dollar General - De Soto (36) | 0.1% | 1003 Guthrie Street | De Soto | Dallas | IA | 50069 | 2015 | NAP | 9,100 | Sq. Ft. | 77 |
A-1-10 |
COMM 2015-LC23 | ||||||||||||||||||||||||
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES | ||||||||||||||||||||||||
% of | Second Most | Second | Second | Second | ||||||||||||||||||||
Property | Initial Pool | Prepayment Provisions | Most Recent Operating | Most Recent | Most Recent | Most Recent | Recent Operating | Most Recent | Most Recent | Most Recent | ||||||||||||||
Flag | ID | Property Name | Balance | (# of payments)(15)(16)(17) | Statements Date | EGI ($) | Expenses($) | NOI($) | Statements Date | EGI($) | Expenses($) | NOI($) | ||||||||||||
Loan | 1 | Equity Inns Portfolio (33) | 8.3% | L(25), YM1(31), O(4) | T-12 7/31/2015 | 87,351,020 | 56,731,542 | 30,619,478 | 12/31/2014 | 82,802,871 | 52,725,736 | 30,077,135 | ||||||||||||
Property | 1.01 | Homewood Suites Seattle | 1.5% | T-12 7/31/2015 | 9,695,746 | 4,733,832 | 4,961,914 | 12/31/2014 | 9,110,662 | 4,346,617 | 4,764,045 | |||||||||||||
Property | 1.02 | Homewood Suites Orlando | 0.7% | T-12 7/31/2015 | 7,994,338 | 5,765,497 | 2,228,841 | 12/31/2014 | 7,343,829 | 5,469,631 | 1,874,198 | |||||||||||||
Property | 1.03 | Courtyard Carlsbad | 0.5% | T-12 7/31/2015 | 5,576,175 | 3,734,377 | 1,841,798 | 12/31/2014 | 5,290,027 | 3,470,323 | 1,819,704 | |||||||||||||
Property | 1.04 | Courtyard Houston | 0.5% | T-12 7/31/2015 | 5,390,708 | 3,599,768 | 1,790,940 | 12/31/2014 | 5,977,581 | 3,570,607 | 2,406,973 | |||||||||||||
Property | 1.05 | Homewood Suites Stratford | 0.4% | T-12 7/31/2015 | 4,885,156 | 3,501,764 | 1,383,392 | 12/31/2014 | 3,981,884 | 2,707,196 | 1,274,688 | |||||||||||||
Property | 1.06 | Hampton Inn Urbana | 0.4% | T-12 7/31/2015 | 4,235,040 | 2,469,341 | 1,765,699 | 12/31/2014 | 4,346,857 | 2,335,303 | 2,011,554 | |||||||||||||
Property | 1.07 | Springhill Suites Asheville | 0.4% | T-12 7/31/2015 | 3,226,221 | 1,705,976 | 1,520,245 | 12/31/2014 | 2,895,310 | 1,528,871 | 1,366,439 | |||||||||||||
Property | 1.08 | Hilton Garden Inn Louisville | 0.4% | T-12 7/31/2015 | 4,050,176 | 2,482,237 | 1,567,939 | 12/31/2014 | 3,767,236 | 2,236,143 | 1,531,093 | |||||||||||||
Property | 1.09 | Hampton Inn Orlando | 0.4% | T-12 7/31/2015 | 4,963,636 | 3,428,039 | 1,535,597 | 12/31/2014 | 4,688,699 | 3,312,275 | 1,376,424 | |||||||||||||
Property | 1.10 | Hampton Inn Austin | 0.4% | T-12 7/31/2015 | 3,866,877 | 2,404,632 | 1,462,245 | 12/31/2014 | 3,550,282 | 2,231,667 | 1,318,616 | |||||||||||||
Property | 1.11 | Hampton Inn College Station | 0.4% | T-12 7/31/2015 | 4,240,816 | 2,644,965 | 1,595,851 | 12/31/2014 | 4,363,868 | 2,638,993 | 1,724,875 | |||||||||||||
Property | 1.12 | Hampton Inn Indianapolis | 0.3% | T-12 7/31/2015 | 3,718,793 | 2,430,846 | 1,287,947 | 12/31/2014 | 3,375,772 | 2,214,349 | 1,161,423 | |||||||||||||
Property | 1.13 | TownePlace Suites Savannah | 0.3% | T-12 7/31/2015 | 2,606,956 | 1,500,642 | 1,106,314 | 12/31/2014 | 2,251,693 | 1,259,578 | 992,115 | |||||||||||||
Property | 1.14 | Hampton Inn East Lansing | 0.3% | T-12 7/31/2015 | 3,176,643 | 1,934,959 | 1,241,684 | 12/31/2014 | 3,077,502 | 1,861,234 | 1,216,267 | |||||||||||||
Property | 1.15 | Hampton Inn Naperville | 0.3% | T-12 7/31/2015 | 3,472,035 | 2,345,517 | 1,126,518 | 12/31/2014 | 3,221,059 | 2,245,205 | 975,854 | |||||||||||||
Property | 1.16 | Hilton Garden Inn Rio Rancho | 0.3% | T-12 7/31/2015 | 3,295,587 | 2,316,761 | 978,826 | 12/31/2014 | 2,983,525 | 2,050,453 | 933,072 | |||||||||||||
Property | 1.17 | Courtyard Dalton | 0.2% | T-12 7/31/2015 | 2,476,550 | 1,719,253 | 757,297 | 12/31/2014 | 2,341,811 | 1,546,844 | 794,967 | |||||||||||||
Property | 1.18 | Hampton Inn Alcoa | 0.2% | T-12 7/31/2015 | 2,600,086 | 1,996,583 | 603,503 | 12/31/2014 | 2,580,652 | 1,926,109 | 654,543 | |||||||||||||
Property | 1.19 | Homewood Suites Augusta | 0.2% | T-12 7/31/2015 | 2,411,258 | 1,633,763 | 777,495 | 12/31/2014 | 2,402,709 | 1,607,550 | 795,159 | |||||||||||||
Property | 1.20 | Residence Inn Jacksonville | 0.2% | T-12 7/31/2015 | 2,321,387 | 1,634,869 | 686,518 | 12/31/2014 | 2,235,022 | 1,598,696 | 636,326 | |||||||||||||
Property | 1.21 | Hampton Inn Milford | 0.1% | T-12 7/31/2015 | 3,146,836 | 2,747,921 | 398,915 | 12/31/2014 | 3,016,890 | 2,568,090 | 448,800 | |||||||||||||
Loan | 2 | 32 Avenue of the Americas (33)(36) | 7.3% | L(25), YM1(90), O(5) | T-12 6/30/2015 | 62,077,026 | 21,472,061 | 40,604,965 | 12/31/2014 | 61,348,373 | 21,720,013 | 39,628,360 | ||||||||||||
Loan | 3 | 11 Madison Avenue (33)(34)(35) | 7.2% | L(26), D(87), 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 | 4 | 1209 DeKalb (35)(36) | 4.8% | L(25), D(28), O(7) | T-12 8/31/2015 | 3,574,218 | 805,389 | 2,768,829 | ||||||||||||||||
Loan | 5 | Good Samaritan Medical Tower (36) | 4.4% | L(12), YM2(103), O(5) | T-12 4/30/2015 | 5,234,036 | 1,556,725 | 3,677,311 | 12/31/2014 | 5,023,834 | 1,514,919 | 3,508,915 | ||||||||||||
Loan | 6 | Harvey Building Products Portfolio (33) | 4.4% | L(25), D(31), O(4) | ||||||||||||||||||||
Property | 6.01 | Londonderry Manufacturing | 0.8% | |||||||||||||||||||||
Property | 6.02 | Waltham Corporate | 0.4% | |||||||||||||||||||||
Property | 6.03 | Dartmouth Manufacturing | 0.4% | |||||||||||||||||||||
Property | 6.04 | Nashua | 0.2% | |||||||||||||||||||||
Property | 6.05 | West Bridgewater | 0.2% | |||||||||||||||||||||
Property | 6.06 | Woburn | 0.2% | |||||||||||||||||||||
Property | 6.07 | Manchester, NH | 0.2% | |||||||||||||||||||||
Property | 6.08 | New London | 0.1% | |||||||||||||||||||||
Property | 6.09 | East Haven | 0.1% | |||||||||||||||||||||
Property | 6.10 | Salem | 0.1% | |||||||||||||||||||||
Property | 6.11 | Bethlehem | 0.1% | |||||||||||||||||||||
Property | 6.12 | Lincoln | 0.1% | |||||||||||||||||||||
Property | 6.13 | Berlin | 0.1% | |||||||||||||||||||||
Property | 6.14 | Woburn CPD | 0.1% | |||||||||||||||||||||
Property | 6.15 | Norwalk | 0.1% | |||||||||||||||||||||
Property | 6.16 | Dartmouth | 0.1% | |||||||||||||||||||||
Property | 6.17 | Braintree | 0.1% | |||||||||||||||||||||
Property | 6.18 | Manchester, CT | 0.1% | |||||||||||||||||||||
Property | 6.19 | Portland | 0.1% | |||||||||||||||||||||
Property | 6.20 | Norwalk | 0.1% | |||||||||||||||||||||
Property | 6.21 | Warwick | 0.1% | |||||||||||||||||||||
Property | 6.22 | Fitchburg | 0.1% | |||||||||||||||||||||
Property | 6.23 | Auburn | 0.1% | |||||||||||||||||||||
Property | 6.24 | Portsmouth | 0.1% | |||||||||||||||||||||
Property | 6.25 | Southampton | 0.0% | |||||||||||||||||||||
Property | 6.26 | Hyannis | 0.0% | |||||||||||||||||||||
Property | 6.27 | Wilkes-Barre | 0.0% | |||||||||||||||||||||
Property | 6.28 | Berlin CPD | 0.0% | |||||||||||||||||||||
Property | 6.29 | Springfield | 0.0% | |||||||||||||||||||||
Property | 6.30 | White River Junction | 0.0% | |||||||||||||||||||||
Loan | 7 | Beach House Hilton Head (36) | 4.2% | L(25), D(58), D or 4%(12), D or 3%(12), D or 1%(9), O(4) | T-12 6/30/2015 | 12,599,845 | 8,095,958 | 4,503,886 | 12/31/2014 | 11,685,641 | 7,553,459 | 4,132,182 | ||||||||||||
Loan | 8 | Whitehall Hotel | 3.7% | L(25), D(91), O(4) | T-12 7/31/2015 | 10,359,193 | 6,160,208 | 4,198,985 | 12/31/2014 | 9,466,357 | 5,820,535 | 3,645,822 | ||||||||||||
Loan | 9 | 611 Cowper | 3.4% | L(26), D(90), O(4) | ||||||||||||||||||||
Loan | 10 | Springfield Mall (33) | 3.4% | L(25), D(91), O(4) | T-12 7/31/2015 | 13,153,800 | 5,571,477 | 7,582,323 | 12/31/2014 | 13,162,646 | 5,699,481 | 7,463,165 | ||||||||||||
Loan | 11 | Laguna Niguel Town Center | 2.8% | L(23), YM1(93), O(4) | T-12 7/31/2015 | 3,137,121 | 636,680 | 2,500,441 | 12/31/2014 | 3,137,242 | 663,725 | 2,473,518 | ||||||||||||
Loan | 12 | Hacienda Gardens | 2.5% | L(24), YM1(92), O(4) | T-12 6/30/2015 | 1,760,916 | 874,346 | 886,570 | 12/31/2014 | 1,559,298 | 933,541 | 625,757 | ||||||||||||
Loan | 13 | Washington Plaza | 2.4% | L(25), D(91), O(4) | T-12 6/30/2015 | 2,421,115 | 639,156 | 1,781,959 | 12/31/2014 | 2,386,562 | 634,201 | 1,752,361 | ||||||||||||
Loan | 14 | Carrollwood Station | 2.2% | L(26), D(31), O(3) | T-12 7/31/2015 | 3,355,819 | 1,556,668 | 1,799,151 | 12/31/2014 | 3,266,291 | 1,539,276 | 1,727,015 | ||||||||||||
Loan | 15 | Murrieta Spectrum | 2.1% | L(25), D(29), O(6) | T-12 7/31/2015 | 2,450,896 | 888,707 | 1,562,189 | 12/31/2014 | 2,253,498 | 808,273 | 1,445,224 | ||||||||||||
Loan | 16 | Westin Lake Mary | 2.1% | L(26), D(89), O(5) | T-12 8/31/2015 | 8,016,808 | 5,622,245 | 2,394,563 | 12/31/2014 | 7,519,357 | 5,330,025 | 2,189,332 |
A-1-11 |
COMM 2015-LC23
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | Second Most | Second | Second | Second | ||||||||||||||||||||
Property | Initial Pool | Prepayment Provisions | Most Recent Operating | Most Recent | Most Recent | Most Recent | Recent Operating | Most Recent | Most Recent | Most Recent | ||||||||||||||
Flag | ID | Property Name | Balance | (# of payments)(15)(16)(17) | Statements Date | EGI ($) | Expenses($) | NOI($) | Statements Date | EGI($) | Expenses($) | NOI($) | ||||||||||||
Loan | 17 | Lake Creek Festival | 2.1% | L(25), D(91), O(4) | T-12 7/31/2015 | 2,680,040 | 904,608 | 1,775,432 | 12/31/2014 | 2,406,605 | 950,234 | 1,456,372 | ||||||||||||
Loan | 18 | Wedgewood Building | 2.0% | L(25), D(91), O(4) | ||||||||||||||||||||
Loan | 19 | Kenhorst Plaza | 1.9% | L(25), D(92), O(3) | T-12 6/30/2015 | 2,299,976 | 778,162 | 1,521,814 | 12/31/2014 | 2,210,920 | 797,126 | 1,413,794 | ||||||||||||
Loan | 20 | Addison Town Center | 1.7% | L(25), D(90), O(5) | T-12 5/31/2015 | 2,353,449 | 792,644 | 1,560,805 | 12/31/2014 | 2,433,500 | 758,599 | 1,674,901 | ||||||||||||
Loan | 21 | A&H Olympic | 1.5% | L(27), D(89), O(4) | 12/31/2014 | 2,081,322 | 611,924 | 1,469,398 | 12/31/2013 | 2,071,753 | 601,271 | 1,470,482 | ||||||||||||
Loan | 22 | Brentwood Retail Center (35) | 1.4% | L(25), D(91), O(4) | T-12 6/30/2015 | 1,297,894 | 227,028 | 1,070,866 | 12/31/2014 | 1,272,104 | 226,368 | 1,045,736 | ||||||||||||
Loan | 23 | A&H Maple Avenue | 1.4% | L(26), D(90), O(4) | 12/31/2014 | 2,097,346 | 277,895 | 1,819,451 | 12/31/2013 | 2,128,095 | 286,376 | 1,841,719 | ||||||||||||
Loan | 24 | BJs Montgomeryville | 1.2% | L(25), YM1(91), O(4) | ||||||||||||||||||||
Loan | 25 | Colerain Center | 1.2% | L(25), D(91), O(4) | T-12 3/31/2015 | 1,275,531 | 301,137 | 974,395 | 12/31/2014 | 1,288,808 | 314,952 | 973,856 | ||||||||||||
Loan | 26 | Whitewater Place | 1.2% | L(25), D(92), O(3) | T-3 8/31/2015 Ann. | 1,146,164 | 355,829 | 790,335 | ||||||||||||||||
Loan | 27 | Brown Street Centre | 1.2% | L(25), D(91), O(4) | T-12 4/30/2015 | 1,923,678 | 644,141 | 1,279,537 | 12/31/2014 | 1,910,361 | 662,293 | 1,248,068 | ||||||||||||
Loan | 28 | Biltmore Parks Apartments | 1.1% | L(25), D(91), O(4) | T-12 8/31/2015 | 2,402,953 | 1,380,011 | 1,022,942 | 12/31/2014 | 2,290,626 | 1,275,786 | 1,014,840 | ||||||||||||
Loan | 29 | Ortega Village - Retail | 1.1% | L(23), YM1(93), O(4) | T-7 7/31/2015 Ann. | 1,267,057 | 395,504 | 871,553 | 12/31/2014 | 1,156,234 | 386,846 | 769,388 | ||||||||||||
Loan | 30 | Landings Shops and Offices | 0.9% | L(25), D(91), O(4) | T-12 4/30/2015 | 1,683,953 | 567,201 | 1,116,752 | 12/31/2014 | 1,682,575 | 577,652 | 1,104,923 | ||||||||||||
Property | 30.01 | Landings Shops and Offices | 0.5% | T-12 4/30/2015 | 850,316 | 336,364 | 513,952 | 12/31/2014 | 847,286 | 336,180 | 511,106 | |||||||||||||
Property | 30.02 | Progressive Properties | 0.3% | T-12 4/30/2015 | 330,223 | 94,662 | 235,561 | 12/31/2014 | 338,161 | 99,110 | 239,051 | |||||||||||||
Property | 30.03 | Kopf Offices | 0.2% | T-12 4/30/2015 | 503,414 | 136,175 | 367,239 | 12/31/2014 | 497,128 | 142,362 | 354,766 | |||||||||||||
Loan | 31 | Terraces on Second | 0.9% | L(26), D(91), O(3) | ||||||||||||||||||||
Loan | 32 | 75 Executive Drive (36) | 0.9% | L(27), D(89), O(4) | T-12 6/30/2015 | 1,117,419 | 681,440 | 435,979 | 12/31/2014 | 876,276 | 697,300 | 178,976 | ||||||||||||
Loan | 33 | Best Buy Boca Raton | 0.8% | L(24), D(92), O(4) | 12/31/2013 | 571,344 | 571,344 | |||||||||||||||||
Loan | 34 | Somerset Apartments | 0.8% | L(25), YM1(92), O(3) | T-12 8/31/2015 | 1,565,691 | 902,394 | 663,297 | 12/31/2014 | 1,514,968 | 887,844 | 627,124 | ||||||||||||
Loan | 35 | Walgreens VA Beach | 0.8% | L(25), D(91), O(4) | ||||||||||||||||||||
Loan | 36 | Holiday Inn Express & Suites Rockport | 0.8% | L(25), D(92), O(3) | T-12 7/31/2015 | 2,302,052 | 1,310,412 | 991,640 | 12/31/2014 | 2,222,461 | 1,234,423 | 988,038 | ||||||||||||
Loan | 37 | Commons at Pembroke | 0.7% | L(25), D(91), O(4) | T-12 7/31/2015 | 1,590,611 | 923,155 | 667,456 | 12/31/2014 | 1,464,077 | 901,826 | 562,251 | ||||||||||||
Loan | 38 | Monument Creek (36) | 0.7% | L(25), D(91), O(4) | T-12 7/1/2015 | 738,655 | 212,177 | 526,478 | 12/31/2014 | 719,911 | 206,604 | 513,307 | ||||||||||||
Loan | 39 | High Country Plaza | 0.7% | L(23), YM1(93), O(4) | T-12 7/31/2015 | 761,536 | 200,375 | 561,161 | 12/31/2014 | 757,983 | 212,977 | 545,006 | ||||||||||||
Loan | 40 | Williamsburg Center | 0.7% | L(25), D(91), O(4) | T-12 6/30/2015 | 1,264,258 | 416,446 | 847,812 | 12/31/2014 | 1,290,718 | 416,068 | 874,650 | ||||||||||||
Property | 40.01 | 1734 Corporate Crossing | 0.2% | T-12 6/30/2015 | 200,073 | 69,634 | 130,439 | 12/31/2014 | 198,849 | 69,930 | 128,918 | |||||||||||||
Property | 40.02 | 1728 Corporate Crossing | 0.2% | T-12 6/30/2015 | 188,554 | 49,945 | 138,609 | 12/31/2014 | 188,228 | 53,066 | 135,162 | |||||||||||||
Property | 40.03 | 1722 Corporate Crossing | 0.1% | T-12 6/30/2015 | 168,692 | 51,881 | 116,811 | 12/31/2014 | 162,059 | 50,212 | 111,847 | |||||||||||||
Property | 40.04 | 1035 East Gate Drive | 0.1% | T-12 6/30/2015 | 218,628 | 58,825 | 159,803 | 12/31/2014 | 255,500 | 56,064 | 199,436 | |||||||||||||
Property | 40.05 | 735 Seibert Road | 0.1% | T-12 6/30/2015 | 164,788 | 72,403 | 92,385 | 12/31/2014 | 164,540 | 74,026 | 90,514 | |||||||||||||
Property | 40.06 | 703 Seibert Road | 0.0% | T-12 6/30/2015 | 183,902 | 54,422 | 129,480 | 12/31/2014 | 180,050 | 51,414 | 128,636 | |||||||||||||
Property | 40.07 | 723 Seibert Road | 0.0% | T-12 6/30/2015 | 139,622 | 59,337 | 80,285 | 12/31/2014 | 141,492 | 61,357 | 80,135 | |||||||||||||
Loan | 41 | Shops at Cardiff Ranch | 0.7% | L(26), D(91), O(3) | ||||||||||||||||||||
Loan | 42 | Cobblestone Court II | 0.5% | L(25), D(91), O(4) | YTD 6/30/2015 | 843,526 | 308,884 | 534,642 | 12/31/2014 | 850,509 | 300,745 | 549,764 | ||||||||||||
Loan | 43 | Hampton Inn & Suites – Portland | 0.5% | L(25), D(92), O(3) | T-12 7/31/2015 | 2,160,732 | 1,238,457 | 922,275 | 12/31/2014 | 1,938,101 | 1,131,086 | 807,015 | ||||||||||||
Loan | 44 | 40 Wall Street (33) | 0.5% | L(28), D(88), O(4) | T-12 3/31/2015 | 29,157,396 | 18,863,645 | 10,293,751 | 12/31/2014 | 29,603,829 | 18,918,523 | 10,685,306 | ||||||||||||
Loan | 45 | Palisades of Bridgeport | 0.5% | L(25), D(91), O(4) | T-12 6/30/2015 | 840,307 | 385,359 | 454,948 | 12/31/2014 | 833,636 | 390,033 | 443,603 | ||||||||||||
Loan | 46 | Walgreens Frisco TX | 0.4% | L(26), D(90), O(4) | T-12 6/30/2015 | 364,000 | 16,057 | 347,943 | 12/31/2014 | 364,000 | 15,592 | 348,408 | ||||||||||||
Loan | 47 | Walgreens-Goodwill Missouri TX | 0.4% | L(26), D(90), O(4) | ||||||||||||||||||||
Loan | 48 | Warsaw Village | 0.4% | L(26), D(30), O(4) | T-12 6/30/2015 | 412,151 | 79,881 | 332,270 | 12/31/2014 | 434,697 | 91,590 | 343,107 | ||||||||||||
Loan | 49 | Walton Shoppes | 0.4% | L(24), YM1(92), O(4) | T-12 6/30/2015 | 346,748 | 153,788 | 192,960 | ||||||||||||||||
Loan | 50 | Ortega Village- Pads | 0.4% | L(23), YM1(93), O(4) | T-12 7/31/2015 | 416,854 | 136,817 | 280,037 | 12/31/2014 | 428,445 | 140,309 | 288,136 | ||||||||||||
Loan | 51 | 691 14th Street Retail | 0.4% | L(27), D(90), O(3) | ||||||||||||||||||||
Loan | 52 | Monte & Wishing Well | 0.3% | L(25), D(91), O(4) | Various | 626,049 | 247,549 | 378,500 | 12/31/2014 | 620,808 | 257,762 | 363,046 | ||||||||||||
Property | 52.01 | Monte Carlo MHC | 0.2% | T-12 4/30/15 | 388,896 | 142,544 | 246,352 | 12/31/2014 | 385,072 | 151,686 | 233,386 | |||||||||||||
Property | 52.02 | Wishing Well MHP | 0.1% | T-12 3/31/15 | 237,153 | 105,005 | 132,148 | 12/31/2014 | 235,736 | 106,076 | 129,660 | |||||||||||||
Loan | 53 | Ferndale Avenue Shoppes | 0.3% | L(24), YM1(92), O(4) | T-12 6/30/2015 | 357,078 | 127,507 | 229,570 | ||||||||||||||||
Loan | 54 | Courtyard Self Storage | 0.3% | L(25), D(92), O(3) | T-12 7/31/2015 | 476,496 | 145,291 | 331,205 | 12/31/2014 | 493,550 | 150,396 | 343,154 | ||||||||||||
Loan | 55 | Bayonne MHP | 0.3% | L(25), D(92), O(3) | T-12 6/30/2015 | 732,718 | 396,963 | 335,755 | 12/31/2014 | 695,780 | 403,791 | 291,988 | ||||||||||||
Loan | 56 | Best Western Cleveland Airport | 0.3% | L(25), D(91), O(4) | T-12 7/31/15 | 1,320,127 | 842,577 | 477,551 | 12/31/2014 | 1,296,651 | 870,607 | 426,044 | ||||||||||||
Loan | 57 | Eureka Crossings | 0.2% | L(24), YM1(92), O(4) | T-12 6/30/2015 | 508,113 | 163,836 | 344,278 | 12/31/2014 | 521,033 | 163,523 | 357,510 | ||||||||||||
Loan | 58 | Family Dollar - Rose Hill (36) | 0.1% | YM(25), DorYM(88), O(7) | ||||||||||||||||||||
Loan | 59 | Family Dollar - Moultrie (36) | 0.1% | YM(25), DorYM(88), O(7) | ||||||||||||||||||||
Loan | 60 | Family Dollar - Biscoe (36) | 0.1% | YM(25), DorYM(88), O(7) | ||||||||||||||||||||
Loan | 61 | Family Dollar - Rockingham (36) | 0.1% | YM(25), DorYM(88), O(7) | ||||||||||||||||||||
Loan | 62 | Dollar General - De Soto (36) | 0.1% | YM(25), DorYM(88), O(7) |
A-1-12 |
COMM 2015-LC23 | ||||||||||||||||||||||||||||
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 | ||||||||||||||||
Flag | ID | Property Name | Balance | Statements Date | EGI($) | Expenses($) | NOI($) | Debt Yield (11)(12) | Debt Yield (11)(12) | Revenue($) | EGI($) | Expenses($) | NOI ($) | Reserves($) | ||||||||||||||
Loan | 1 | Equity Inns Portfolio (33) | 8.3% | 12/31/2013 | 78,328,375 | 50,981,127 | 27,347,248 | 13.3% | 11.8% | 84,440,306 | 87,351,020 | 56,459,731 | 30,891,289 | 3,494,041 | ||||||||||||||
Property | 1.01 | Homewood Suites Seattle | 1.5% | 12/31/2013 | 7,953,044 | 4,027,501 | 3,925,543 | 9,372,913 | 9,695,746 | 4,733,449 | 4,962,297 | 387,830 | ||||||||||||||||
Property | 1.02 | Homewood Suites Orlando | 0.7% | 12/31/2013 | 7,623,501 | 5,544,041 | 2,079,460 | 7,764,666 | 7,994,338 | 5,761,809 | 2,232,529 | 319,774 | ||||||||||||||||
Property | 1.03 | Courtyard Carlsbad | 0.5% | 12/31/2013 | 4,878,776 | 3,322,802 | 1,555,974 | 5,098,077 | 5,576,175 | 3,743,775 | 1,832,400 | 223,047 | ||||||||||||||||
Property | 1.04 | Courtyard Houston | 0.5% | 12/31/2013 | 6,005,150 | 3,671,066 | 2,334,083 | 4,835,726 | 5,390,708 | 3,515,072 | 1,875,636 | 215,628 | ||||||||||||||||
Property | 1.05 | Homewood Suites Stratford | 0.4% | 12/31/2013 | 4,870,147 | 3,513,462 | 1,356,685 | 4,758,339 | 4,885,156 | 3,471,649 | 1,413,507 | 195,406 | ||||||||||||||||
Property | 1.06 | Hampton Inn Urbana | 0.4% | 12/31/2013 | 4,199,219 | 2,298,203 | 1,901,016 | 4,184,929 | 4,235,040 | 2,472,946 | 1,762,094 | 169,402 | ||||||||||||||||
Property | 1.07 | Springhill Suites Asheville | 0.4% | 12/31/2013 | 2,742,070 | 1,483,884 | 1,258,186 | 3,187,361 | 3,226,221 | 1,703,774 | 1,522,447 | 129,049 | ||||||||||||||||
Property | 1.08 | Hilton Garden Inn Louisville | 0.4% | 12/31/2013 | 3,318,817 | 1,975,294 | 1,343,523 | 3,805,606 | 4,050,176 | 2,447,349 | 1,602,827 | 162,007 | ||||||||||||||||
Property | 1.09 | Hampton Inn Orlando | 0.4% | 12/31/2013 | 4,173,205 | 3,010,211 | 1,162,993 | 4,880,548 | 4,963,636 | 3,429,795 | 1,533,841 | 198,545 | ||||||||||||||||
Property | 1.10 | Hampton Inn Austin | 0.4% | 12/31/2013 | 3,349,149 | 2,132,939 | 1,216,210 | 3,843,408 | 3,866,877 | 2,362,967 | 1,503,910 | 154,675 | ||||||||||||||||
Property | 1.11 | Hampton Inn College Station | 0.4% | 12/31/2013 | 3,750,664 | 2,360,530 | 1,390,133 | 4,223,801 | 4,240,816 | 2,640,560 | 1,600,256 | 169,633 | ||||||||||||||||
Property | 1.12 | Hampton Inn Indianapolis | 0.3% | 12/31/2013 | 2,819,186 | 2,011,012 | 808,174 | 3,686,201 | 3,718,793 | 2,442,585 | 1,276,208 | 148,752 | ||||||||||||||||
Property | 1.13 | TownePlace Suites Savannah | 0.3% | 12/31/2013 | 1,878,363 | 1,162,564 | 715,800 | 2,553,485 | 2,606,956 | 1,473,976 | 1,132,980 | 104,278 | ||||||||||||||||
Property | 1.14 | Hampton Inn East Lansing | 0.3% | 12/31/2013 | 2,985,229 | 1,784,784 | 1,200,445 | 3,167,128 | 3,176,643 | 1,921,391 | 1,255,252 | 127,066 | ||||||||||||||||
Property | 1.15 | Hampton Inn Naperville | 0.3% | 12/31/2013 | 3,004,217 | 2,010,965 | 993,252 | 3,421,514 | 3,472,035 | 2,343,387 | 1,128,648 | 138,881 | ||||||||||||||||
Property | 1.16 | Hilton Garden Inn Rio Rancho | 0.3% | 12/31/2013 | 2,843,844 | 1,950,114 | 893,730 | 3,094,105 | 3,295,587 | 2,307,529 | 988,058 | 131,823 | ||||||||||||||||
Property | 1.17 | Courtyard Dalton | 0.2% | 12/31/2013 | 2,219,835 | 1,469,140 | 750,696 | 2,259,460 | 2,476,550 | 1,715,951 | 760,599 | 99,062 | ||||||||||||||||
Property | 1.18 | Hampton Inn Alcoa | 0.2% | 12/31/2013 | 2,582,379 | 1,825,293 | 757,087 | 2,544,861 | 2,600,086 | 1,972,560 | 627,526 | 104,003 | ||||||||||||||||
Property | 1.19 | Homewood Suites Augusta | 0.2% | 12/31/2013 | 2,175,403 | 1,502,680 | 672,724 | 2,377,125 | 2,411,258 | 1,631,000 | 780,258 | 96,450 | ||||||||||||||||
Property | 1.20 | Residence Inn Jacksonville | 0.2% | 12/31/2013 | 1,978,909 | 1,466,475 | 512,435 | 2,262,669 | 2,321,387 | 1,623,719 | 697,668 | 92,855 | ||||||||||||||||
Property | 1.21 | Hampton Inn Milford | 0.1% | 12/31/2013 | 2,977,267 | 2,458,167 | 519,099 | 3,118,384 | 3,146,836 | 2,744,487 | 402,349 | 125,873 | ||||||||||||||||
Loan | 2 | 32 Avenue of the Americas (33)(36) | 7.3% | 12/31/2013 | 63,975,291 | 21,551,233 | 42,424,058 | 9.8% | 9.2% | 60,250,530 | 64,113,840 | 22,373,187 | 41,740,653 | 232,610 | ||||||||||||||
Loan | 3 | 11 Madison Avenue (33)(34)(35) | 7.2% | 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 | ||||||||||||||
Loan | 4 | 1209 DeKalb (35)(36) | 4.8% | 7.1% | 7.1% | 4,111,434 | 4,060,279 | 783,617 | 3,276,662 | 25,400 | ||||||||||||||||||
Loan | 5 | Good Samaritan Medical Tower (36) | 4.4% | 12/31/2013 | 5,062,069 | 1,423,760 | 3,638,309 | 9.7% | 9.0% | 5,321,396 | 5,747,318 | 1,590,546 | 4,156,772 | 36,589 | ||||||||||||||
Loan | 6 | Harvey Building Products Portfolio (33) | 4.4% | 12.8% | 12.5% | 14,947,405 | 14,531,091 | 435,933 | 14,095,158 | 411,326 | ||||||||||||||||||
Property | 6.01 | Londonderry Manufacturing | 0.8% | 2,900,183 | 2,797,302 | 83,919 | 2,713,383 | 56,444 | ||||||||||||||||||||
Property | 6.02 | Waltham Corporate | 0.4% | 1,675,520 | 1,599,127 | 47,974 | 1,551,153 | 14,688 | ||||||||||||||||||||
Property | 6.03 | Dartmouth Manufacturing | 0.4% | 1,293,815 | 1,279,735 | 38,392 | 1,241,343 | 58,810 | ||||||||||||||||||||
Property | 6.04 | Nashua | 0.2% | 688,017 | 666,779 | 20,003 | 646,775 | 16,739 | ||||||||||||||||||||
Property | 6.05 | West Bridgewater | 0.2% | 574,749 | 566,988 | 17,010 | 549,978 | 24,533 | ||||||||||||||||||||
Property | 6.06 | Woburn | 0.2% | 538,707 | 520,471 | 15,614 | 504,857 | 11,408 | ||||||||||||||||||||
Property | 6.07 | Manchester, NH | 0.2% | 523,103 | 515,797 | 15,474 | 500,323 | 22,072 | ||||||||||||||||||||
Property | 6.08 | New London | 0.1% | 479,719 | 463,893 | 13,917 | 449,977 | 10,596 | ||||||||||||||||||||
Property | 6.09 | East Haven | 0.1% | 456,652 | 441,991 | 13,260 | 428,731 | 10,513 | ||||||||||||||||||||
Property | 6.10 | Salem | 0.1% | 397,081 | 393,882 | 11,816 | 382,065 | 19,234 | ||||||||||||||||||||
Property | 6.11 | Bethlehem | 0.1% | 398,574 | 394,584 | 11,838 | 382,746 | 18,484 | ||||||||||||||||||||
Property | 6.12 | Lincoln | 0.1% | 429,234 | 425,842 | 12,775 | 413,067 | 20,862 | ||||||||||||||||||||
Property | 6.13 | Berlin | 0.1% | 430,983 | 419,361 | 12,581 | 406,780 | 12,263 | ||||||||||||||||||||
Property | 6.14 | Woburn CPD | 0.1% | 460,460 | 449,791 | 13,494 | 436,298 | 14,950 | ||||||||||||||||||||
Property | 6.15 | Norwalk | 0.1% | 398,297 | 382,543 | 11,476 | 371,067 | 6,035 | ||||||||||||||||||||
Property | 6.16 | Dartmouth | 0.1% | 353,104 | 343,034 | 10,291 | 332,743 | 9,468 | ||||||||||||||||||||
Property | 6.17 | Braintree | 0.1% | 268,381 | 261,921 | 7,858 | 254,064 | 8,458 | ||||||||||||||||||||
Property | 6.18 | Manchester, CT | 0.1% | 293,812 | 289,145 | 8,674 | 280,471 | 11,802 | ||||||||||||||||||||
Property | 6.19 | Portland | 0.1% | 281,254 | 273,386 | 8,202 | 265,184 | 7,703 | ||||||||||||||||||||
Property | 6.20 | Norwalk | 0.1% | 319,440 | 306,484 | 9,195 | 297,289 | 4,500 | ||||||||||||||||||||
Property | 6.21 | Warwick | 0.1% | 254,241 | 248,847 | 7,465 | 241,382 | 8,780 | ||||||||||||||||||||
Property | 6.22 | Fitchburg | 0.1% | 216,882 | 210,791 | 6,324 | 204,467 | 5,915 | ||||||||||||||||||||
Property | 6.23 | Auburn | 0.1% | 210,357 | 204,291 | 6,129 | 198,163 | 5,570 | ||||||||||||||||||||
Property | 6.24 | Portsmouth | 0.1% | 203,621 | 197,115 | 5,913 | 191,201 | 4,721 | ||||||||||||||||||||
Property | 6.25 | Southampton | 0.0% | 170,268 | 166,261 | 4,988 | 161,274 | 5,463 | ||||||||||||||||||||
Property | 6.26 | Hyannis | 0.0% | 157,386 | 152,321 | 4,570 | 147,751 | 3,611 | ||||||||||||||||||||
Property | 6.27 | Wilkes-Barre | 0.0% | 171,985 | 167,287 | 5,019 | 162,268 | 4,830 | ||||||||||||||||||||
Property | 6.28 | Berlin CPD | 0.0% | 138,686 | 135,209 | 4,056 | 131,153 | 4,224 | ||||||||||||||||||||
Property | 6.29 | Springfield | 0.0% | 153,350 | 151,321 | 4,540 | 146,782 | 6,590 | ||||||||||||||||||||
Property | 6.30 | White River Junction | 0.0% | 109,545 | 105,591 | 3,168 | 102,423 | 2,060 | ||||||||||||||||||||
Loan | 7 | Beach House Hilton Head (36) | 4.2% | 12/31/2013 | 9,595,781 | 6,112,423 | 3,483,358 | 11.3% | 10.1% | 7,904,244 | 12,599,845 | 8,066,820 | 4,533,024 | 504,006 | ||||||||||||||
Loan | 8 | Whitehall Hotel | 3.7% | 12/31/2013 | 9,676,912 | 7,140,262 | 2,536,649 | 11.7% | 10.6% | 9,723,680 | 10,335,152 | 6,115,924 | 4,219,228 | 413,406 | ||||||||||||||
Loan | 9 | 611 Cowper | 3.4% | 10.1% | 9.6% | 3,472,140 | 4,308,094 | 991,468 | 3,316,626 | 6,000 | ||||||||||||||||||
Loan | 10 | Springfield Mall (33) | 3.4% | 12/31/2013 | 12,758,515 | 5,575,147 | 7,183,368 | 11.1% | 10.7% | 7,014,409 | 12,822,044 | 5,621,685 | 7,200,359 | 44,636 | ||||||||||||||
Loan | 11 | Laguna Niguel Town Center | 2.8% | 12/31/2013 | 2,999,446 | 686,098 | 2,313,348 | 8.8% | 8.4% | 2,580,048 | 3,150,431 | 834,862 | 2,315,569 | 19,631 | ||||||||||||||
Loan | 12 | Hacienda Gardens | 2.5% | 12/31/2013 | 1,171,364 | 613,087 | 558,276 | 8.6% | 8.3% | 2,698,601 | 3,066,348 | 1,000,213 | 2,066,134 | 22,120 | ||||||||||||||
Loan | 13 | Washington Plaza | 2.4% | 12/31/2013 | 2,343,077 | 656,353 | 1,686,724 | 8.0% | 7.7% | 2,163,483 | 2,613,118 | 785,627 | 1,827,491 | 20,702 | ||||||||||||||
Loan | 14 | Carrollwood Station | 2.2% | 12/31/2013 | 3,147,292 | 1,553,187 | 1,594,105 | 8.6% | 8.3% | 3,317,232 | 3,400,213 | 1,540,749 | 1,859,464 | 84,000 | ||||||||||||||
Loan | 15 | Murrieta Spectrum | 2.1% | 12/31/2013 | 2,342,893 | 845,588 | 1,497,305 | 8.9% | 8.4% | 2,503,706 | 2,747,661 | 904,993 | 1,842,668 | 34,505 | ||||||||||||||
Loan | 16 | Westin Lake Mary | 2.1% | 12/31/2013 | 6,487,583 | 4,641,507 | 1,846,076 | 11.9% | 10.3% | 7,293,566 | 8,016,808 | 5,636,525 | 2,380,283 | 320,672 |
A-1-13 |
COMM 2015-LC23
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 | ||||||||||||||||
Flag | ID | Property Name | Balance | Statements Date | EGI($) | Expenses($) | NOI($) | Debt Yield (11)(12) | Debt Yield (11)(12) | Revenue($) | EGI($) | Expenses($) | NOI ($) | Reserves($) | ||||||||||||||
Loan | 17 | Lake Creek Festival | 2.1% | 12/31/2013 | 3,554,318 | 1,087,024 | 2,467,294 | 11.2% | 10.0% | 2,583,585 | 3,287,826 | 1,071,085 | 2,216,741 | 57,091 | ||||||||||||||
Loan | 18 | Wedgewood Building | 2.0% | 8.5% | 8.0% | 2,363,951 | 2,349,679 | 740,267 | 1,609,412 | 13,200 | ||||||||||||||||||
Loan | 19 | Kenhorst Plaza | 1.9% | 12/31/2013 | 2,083,105 | 700,186 | 1,382,919 | 8.7% | 8.2% | 1,826,859 | 2,415,120 | 826,861 | 1,588,259 | 30,671 | ||||||||||||||
Loan | 20 | Addison Town Center | 1.7% | 12/31/2013 | 2,499,694 | 814,118 | 1,685,576 | 9.8% | 8.9% | 2,265,759 | 2,453,890 | 862,124 | 1,591,766 | 27,941 | ||||||||||||||
Loan | 21 | A&H Olympic | 1.5% | 12/31/2012 | 2,061,989 | 615,548 | 1,446,441 | 10.4% | 9.7% | 2,198,496 | 2,103,475 | 624,665 | 1,478,811 | 22,097 | ||||||||||||||
Loan | 22 | Brentwood Retail Center (35) | 1.4% | 12/31/2013 | 1,049,210 | 204,473 | 844,737 | 8.2% | 8.0% | 1,160,430 | 1,414,525 | 328,544 | 1,085,981 | 1,577 | ||||||||||||||
Loan | 23 | A&H Maple Avenue | 1.4% | 12/31/2012 | 2,061,049 | 273,765 | 1,787,284 | 13.5% | 13.2% | 2,166,838 | 2,063,193 | 314,530 | 1,748,663 | 4,788 | ||||||||||||||
Loan | 24 | BJs Montgomeryville | 1.2% | 8.3% | 8.3% | 1,055,808 | 1,013,576 | 20,272 | 993,304 | |||||||||||||||||||
Loan | 25 | Colerain Center | 1.2% | 12/31/2013 | 1,263,356 | 293,615 | 969,742 | 9.2% | 8.5% | 1,154,040 | 1,617,633 | 553,408 | 1,064,224 | 16,921 | ||||||||||||||
Loan | 26 | Whitewater Place | 1.2% | 9.5% | 9.4% | 1,612,920 | 1,618,337 | 521,434 | 1,096,903 | 22,250 | ||||||||||||||||||
Loan | 27 | Brown Street Centre | 1.2% | 12/31/2013 | 1,847,730 | 655,591 | 1,192,139 | 11.1% | 9.9% | 1,870,666 | 1,932,188 | 676,879 | 1,255,309 | 10,457 | ||||||||||||||
Loan | 28 | Biltmore Parks Apartments | 1.1% | 12/31/2013 | 2,165,483 | 1,169,660 | 995,823 | 9.7% | 9.0% | 2,466,276 | 2,421,907 | 1,350,767 | 1,071,140 | 85,449 | ||||||||||||||
Loan | 29 | Ortega Village - Retail | 1.1% | 12/31/2013 | 1,141,656 | 379,269 | 762,387 | 8.2% | 8.1% | 887,477 | 1,279,830 | 407,895 | 871,935 | 14,495 | ||||||||||||||
Loan | 30 | Landings Shops and Offices | 0.9% | 12/31/2013 | 1,634,622 | 562,063 | 1,072,559 | 9.4% | 8.4% | 1,521,384 | 1,380,688 | 541,682 | 839,006 | 20,692 | ||||||||||||||
Property | 30.01 | Landings Shops and Offices | 0.5% | 12/31/2013 | 831,583 | 328,281 | 503,302 | 952,084 | 754,660 | 323,454 | 431,207 | 14,213 | ||||||||||||||||
Property | 30.02 | Progressive Properties | 0.3% | 12/31/2013 | 319,109 | 100,229 | 218,881 | 242,000 | 315,093 | 94,761 | 220,331 | 2,477 | ||||||||||||||||
Property | 30.03 | Kopf Offices | 0.2% | 12/31/2013 | 483,930 | 133,553 | 350,376 | 327,300 | 310,935 | 123,467 | 187,468 | 4,002 | ||||||||||||||||
Loan | 31 | Terraces on Second | 0.9% | 8.0% | 7.8% | 1,047,360 | 1,073,992 | 390,273 | 683,719 | 11,000 | ||||||||||||||||||
Loan | 32 | 75 Executive Drive (36) | 0.9% | 12/31/2013 | 1,011,544 | 655,987 | 355,557 | 9.8% | 8.9% | 1,663,222 | 1,487,040 | 688,424 | 798,615 | 21,417 | ||||||||||||||
Loan | 33 | Best Buy Boca Raton | 0.8% | 8.8% | 8.5% | 714,180 | 678,471 | 13,569 | 664,902 | 5,800 | ||||||||||||||||||
Loan | 34 | Somerset Apartments | 0.8% | 12/31/2013 | 1,477,806 | 820,464 | 657,342 | 8.9% | 8.3% | 1,686,204 | 1,586,590 | 917,722 | 668,868 | 49,728 | ||||||||||||||
Loan | 35 | Walgreens VA Beach | 0.8% | 8.5% | 8.5% | 645,000 | 687,629 | 61,982 | 625,647 | 1,420 | ||||||||||||||||||
Loan | 36 | Holiday Inn Express & Suites Rockport | 0.8% | 12/31/2013 | 2,044,801 | 1,142,307 | 902,494 | 13.7% | 12.5% | 2,279,978 | 2,302,052 | 1,295,362 | 1,006,690 | 92,082 | ||||||||||||||
Loan | 37 | Commons at Pembroke | 0.7% | 12/31/2013 | 1,431,490 | 861,185 | 570,305 | 9.2% | 8.5% | 1,710,444 | 1,590,611 | 926,347 | 664,265 | 50,400 | ||||||||||||||
Loan | 38 | Monument Creek (36) | 0.7% | 12/31/2013 | 702,510 | 196,148 | 506,362 | 8.4% | 8.3% | 768,660 | 751,976 | 196,123 | 555,853 | 6,850 | ||||||||||||||
Loan | 39 | High Country Plaza | 0.7% | 12/31/2013 | 727,609 | 186,917 | 540,692 | 8.4% | 7.9% | 583,809 | 778,228 | 232,169 | 546,060 | 5,225 | ||||||||||||||
Loan | 40 | Williamsburg Center | 0.7% | 12/31/2013 | 1,294,972 | 406,844 | 888,128 | 13.2% | 11.8% | 1,386,164 | 1,230,712 | 390,578 | 840,134 | 24,205 | ||||||||||||||
Property | 40.01 | 1734 Corporate Crossing | 0.2% | 12/31/2013 | 196,400 | 70,280 | 126,121 | 236,257 | 227,921 | 67,817 | 160,104 | 2,904 | ||||||||||||||||
Property | 40.02 | 1728 Corporate Crossing | 0.2% | 12/31/2013 | 185,901 | 47,230 | 138,671 | 189,435 | 168,597 | 46,043 | 122,554 | 2,904 | ||||||||||||||||
Property | 40.03 | 1722 Corporate Crossing | 0.1% | 12/31/2013 | 151,607 | 52,494 | 99,113 | 177,665 | 161,914 | 49,388 | 112,526 | 2,904 | ||||||||||||||||
Property | 40.04 | 1035 East Gate Drive | 0.1% | 12/31/2013 | 255,500 | 56,227 | 199,273 | 244,090 | 217,240 | 50,877 | 166,363 | 3,066 | ||||||||||||||||
Property | 40.05 | 735 Seibert Road | 0.1% | 12/31/2013 | 177,617 | 70,507 | 107,110 | 178,217 | 163,706 | 68,984 | 94,722 | 4,151 | ||||||||||||||||
Property | 40.06 | 703 Seibert Road | 0.0% | 12/31/2013 | 178,400 | 50,224 | 128,176 | 175,340 | 119,612 | 48,682 | 70,930 | 4,133 | ||||||||||||||||
Property | 40.07 | 723 Seibert Road | 0.0% | 12/31/2013 | 149,547 | 59,881 | 89,666 | 185,160 | 171,721 | 58,787 | 112,934 | 4,144 | ||||||||||||||||
Loan | 41 | Shops at Cardiff Ranch | 0.7% | 10.3% | 9.9% | 700,125 | 870,629 | 216,326 | 654,302 | 6,063 | ||||||||||||||||||
Loan | 42 | Cobblestone Court II | 0.5% | 12/31/2013 | 839,417 | 286,784 | 552,633 | 8.8% | 8.4% | 863,484 | 833,780 | 375,766 | 458,013 | 20,640 | ||||||||||||||
Loan | 43 | Hampton Inn & Suites – Portland | 0.5% | 12/31/2013 | 1,722,730 | 992,130 | 730,600 | 18.4% | 16.7% | 2,133,092 | 2,160,732 | 1,241,134 | 919,598 | 86,429 | ||||||||||||||
Loan | 44 | 40 Wall Street (33) | 0.5% | 12/31/2013 | 32,979,857 | 18,225,522 | 14,754,335 | 14.2% | 13.1% | 41,999,727 | 43,165,470 | 20,600,765 | 22,564,706 | 291,302 | ||||||||||||||
Loan | 45 | Palisades of Bridgeport | 0.5% | 12/31/2013 | 767,530 | 375,638 | 391,892 | 9.6% | 8.8% | 896,085 | 854,711 | 415,274 | 439,437 | 33,483 | ||||||||||||||
Loan | 46 | Walgreens Frisco TX | 0.4% | 12/31/2013 | 364,000 | 15,463 | 348,537 | 9.1% | 9.1% | 364,000 | 364,000 | 364,000 | ||||||||||||||||
Loan | 47 | Walgreens-Goodwill Missouri TX | 0.4% | 9.3% | 9.3% | 369,000 | 369,000 | 369,000 | ||||||||||||||||||||
Loan | 48 | Warsaw Village | 0.4% | 12/31/2013 | 440,613 | 88,611 | 352,001 | 10.0% | 8.8% | 418,930 | 446,846 | 88,030 | 358,816 | 12,020 | ||||||||||||||
Loan | 49 | Walton Shoppes | 0.4% | 10.6% | 9.6% | 551,075 | 527,321 | 156,748 | 370,573 | 3,407 | ||||||||||||||||||
Loan | 50 | Ortega Village- Pads | 0.4% | 12/31/2013 | 404,402 | 137,883 | 266,519 | 8.3% | 8.1% | 484,124 | 441,454 | 150,307 | 291,147 | 6,806 | ||||||||||||||
Loan | 51 | 691 14th Street Retail | 0.4% | 10.0% | 9.6% | 370,938 | 445,905 | 96,489 | 349,415 | 2,171 | ||||||||||||||||||
Loan | 52 | Monte & Wishing Well | 0.3% | 12/31/2013 | 568,212 | 253,373 | 314,839 | 10.9% | 10.7% | 481,320 | 619,220 | 258,993 | 360,227 | 5,550 | ||||||||||||||
Property | 52.01 | Monte Carlo MHC | 0.2% | 12/31/2013 | 345,150 | 149,704 | 195,446 | 289,440 | 374,466 | 150,072 | 224,394 | 3,500 | ||||||||||||||||
Property | 52.02 | Wishing Well MHP | 0.1% | 12/31/2013 | 223,062 | 103,669 | 119,393 | 191,880 | 244,754 | 108,921 | 135,833 | 2,050 | ||||||||||||||||
Loan | 53 | Ferndale Avenue Shoppes | 0.3% | 11.4% | 10.4% | 425,468 | 474,922 | 130,358 | 344,564 | 2,583 | ||||||||||||||||||
Loan | 54 | Courtyard Self Storage | 0.3% | 12/31/2013 | 448,502 | 155,082 | 293,420 | 10.4% | 10.2% | 472,187 | 476,179 | 164,238 | 311,940 | 5,328 | ||||||||||||||
Loan | 55 | Bayonne MHP | 0.3% | 12/31/2013 | 728,965 | 408,851 | 320,115 | 10.7% | 10.4% | 809,556 | 728,601 | 409,454 | 319,147 | 6,250 | ||||||||||||||
Loan | 56 | Best Western Cleveland Airport | 0.3% | 12/31/2013 | 1,184,037 | 848,238 | 335,799 | 14.1% | 12.4% | 1,305,463 | 1,320,127 | 897,481 | 422,646 | 52,805 | ||||||||||||||
Loan | 57 | Eureka Crossings | 0.2% | 12/31/2013 | 403,934 | 180,993 | 222,941 | 12.4% | 11.0% | 359,931 | 464,841 | 174,800 | 290,040 | 3,785 | ||||||||||||||
Loan | 58 | Family Dollar - Rose Hill (36) | 0.1% | 8.7% | 8.6% | 93,039 | 89,573 | 2,687 | 86,886 | 1,248 | ||||||||||||||||||
Loan | 59 | Family Dollar - Moultrie (36) | 0.1% | 8.6% | 8.4% | 85,486 | 82,385 | 3,022 | 79,364 | 1,235 | ||||||||||||||||||
Loan | 60 | Family Dollar - Biscoe (36) | 0.1% | 8.7% | 8.6% | 79,670 | 76,872 | 2,306 | 74,566 | 1,248 | ||||||||||||||||||
Loan | 61 | Family Dollar - Rockingham (36) | 0.1% | 8.7% | 8.5% | 75,822 | 73,216 | 2,196 | 71,020 | 1,248 | ||||||||||||||||||
Loan | 62 | Dollar General - De Soto (36) | 0.1% | 10.1% | 9.9% | 75,678 | 73,191 | 2,196 | 70,995 | 1,365 |
A-1-14 |
COMM 2015-LC23 | ||||||||||||||||||||
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES | ||||||||||||||||||||
% of | ||||||||||||||||||||
Property | Initial Pool | Underwritten | Underwritten | Ownership | Ground Lease | Ground Lease | ||||||||||||||
Flag | ID | Property Name | Balance | TI/LC($) | NCF($) | Interest | Expiration (18) | Extension Terms (18) | Largest Tenant (19)(20)(21)(22)(23)(24)(25) | SF | ||||||||||
Loan | 1 | Equity Inns Portfolio (33) | 8.3% | 27,397,249 | Fee Simple | |||||||||||||||
Property | 1.01 | Homewood Suites Seattle | 1.5% | 4,574,467 | Fee Simple | NAP | NAP | |||||||||||||
Property | 1.02 | Homewood Suites Orlando | 0.7% | 1,912,755 | Fee Simple | NAP | NAP | |||||||||||||
Property | 1.03 | Courtyard Carlsbad | 0.5% | 1,609,353 | Fee Simple | NAP | NAP | |||||||||||||
Property | 1.04 | Courtyard Houston | 0.5% | 1,660,007 | Fee Simple | NAP | NAP | |||||||||||||
Property | 1.05 | Homewood Suites Stratford | 0.4% | 1,218,101 | Fee Simple | NAP | NAP | |||||||||||||
Property | 1.06 | Hampton Inn Urbana | 0.4% | 1,592,692 | Fee Simple | NAP | NAP | |||||||||||||
Property | 1.07 | Springhill Suites Asheville | 0.4% | 1,393,398 | Fee Simple | NAP | NAP | |||||||||||||
Property | 1.08 | Hilton Garden Inn Louisville | 0.4% | 1,440,820 | Fee Simple | NAP | NAP | |||||||||||||
Property | 1.09 | Hampton Inn Orlando | 0.4% | 1,335,296 | Fee Simple | NAP | NAP | |||||||||||||
Property | 1.10 | Hampton Inn Austin | 0.4% | 1,349,235 | Fee Simple | NAP | NAP | |||||||||||||
Property | 1.11 | Hampton Inn College Station | 0.4% | 1,430,623 | Fee Simple | NAP | NAP | |||||||||||||
Property | 1.12 | Hampton Inn Indianapolis | 0.3% | 1,127,456 | Fee Simple | NAP | NAP | |||||||||||||
Property | 1.13 | TownePlace Suites Savannah | 0.3% | 1,028,701 | Fee Simple | NAP | NAP | |||||||||||||
Property | 1.14 | Hampton Inn East Lansing | 0.3% | 1,128,186 | Fee Simple | NAP | NAP | |||||||||||||
Property | 1.15 | Hampton Inn Naperville | 0.3% | 989,767 | Fee Simple | NAP | NAP | |||||||||||||
Property | 1.16 | Hilton Garden Inn Rio Rancho | 0.3% | 856,235 | Fee Simple | NAP | NAP | |||||||||||||
Property | 1.17 | Courtyard Dalton | 0.2% | 661,537 | Fee Simple | NAP | NAP | |||||||||||||
Property | 1.18 | Hampton Inn Alcoa | 0.2% | 523,523 | Fee Simple | NAP | NAP | |||||||||||||
Property | 1.19 | Homewood Suites Augusta | 0.2% | 683,808 | Fee Simple | NAP | NAP | |||||||||||||
Property | 1.20 | Residence Inn Jacksonville | 0.2% | 604,813 | Fee Simple | NAP | NAP | |||||||||||||
Property | 1.21 | Hampton Inn Milford | 0.1% | 276,475 | Fee Simple | NAP | NAP | |||||||||||||
Loan | 2 | 32 Avenue of the Americas (33)(36) | 7.3% | 2,274,094 | 39,233,948 | Fee Simple | AMFM Operating, Inc. | 169,304 | ||||||||||||
Loan | 3 | 11 Madison Avenue (33)(34)(35) | 7.2% | 1,605,307 | 107,431,283 | Fee Simple/Leasehold | 12/31/2016 | None | Credit Suisse | 1,266,051 | ||||||||||
Loan | 4 | 1209 DeKalb (35)(36) | 4.8% | 3,251,262 | Fee Simple | NAP | NAP | |||||||||||||
Loan | 5 | Good Samaritan Medical Tower (36) | 4.4% | 263,437 | 3,856,746 | Fee Simple | University of Southern California | 14,605 | ||||||||||||
Loan | 6 | Harvey Building Products Portfolio (33) | 4.4% | 13,683,832 | Fee Simple | |||||||||||||||
Property | 6.01 | Londonderry Manufacturing | 0.8% | 2,656,939 | Fee Simple | Harvey Industries, Inc. | 376,294 | |||||||||||||
Property | 6.02 | Waltham Corporate | 0.4% | 1,536,465 | Fee Simple | Harvey Industries, Inc. | 54,400 | |||||||||||||
Property | 6.03 | Dartmouth Manufacturing | 0.4% | 1,182,533 | Fee Simple | Harvey Industries, Inc. | 235,239 | |||||||||||||
Property | 6.04 | Nashua | 0.2% | 630,036 | Fee Simple | Harvey Industries, Inc. | 111,594 | |||||||||||||
Property | 6.05 | West Bridgewater | 0.2% | 525,446 | Fee Simple | Harvey Industries, Inc. | 81,776 | |||||||||||||
Property | 6.06 | Woburn | 0.2% | 493,449 | Fee Simple | Harvey Industries, Inc. | 76,054 | |||||||||||||
Property | 6.07 | Manchester, NH | 0.2% | 478,251 | Fee Simple | Harvey Industries, Inc. | 81,747 | |||||||||||||
Property | 6.08 | New London | 0.1% | 439,380 | Fee Simple | Harvey Industries, Inc. | 70,642 | |||||||||||||
Property | 6.09 | East Haven | 0.1% | 418,218 | Fee Simple | Harvey Industries, Inc. | 70,089 | |||||||||||||
Property | 6.10 | Salem | 0.1% | 362,831 | Fee Simple | Harvey Industries, Inc. | 58,286 | |||||||||||||
Property | 6.11 | Bethlehem | 0.1% | 364,262 | Fee Simple | Harvey Industries, Inc. | 71,091 | |||||||||||||
Property | 6.12 | Lincoln | 0.1% | 392,205 | Fee Simple | Harvey Industries, Inc. | 80,240 | |||||||||||||
Property | 6.13 | Berlin | 0.1% | 394,517 | Fee Simple | Harvey Industries, Inc. | 43,796 | |||||||||||||
Property | 6.14 | Woburn CPD | 0.1% | 421,348 | Fee Simple | Harvey Industries, Inc. | 59,800 | |||||||||||||
Property | 6.15 | Norwalk | 0.1% | 365,032 | Fee Simple | Harvey Industries, Inc. | 40,232 | |||||||||||||
Property | 6.16 | Dartmouth | 0.1% | 323,275 | Fee Simple | Harvey Industries, Inc. | 63,117 | |||||||||||||
Property | 6.17 | Braintree | 0.1% | 245,606 | Fee Simple | Harvey Industries, Inc. | 32,531 | |||||||||||||
Property | 6.18 | Manchester, CT | 0.1% | 268,669 | Fee Simple | Harvey Industries, Inc. | 49,175 | |||||||||||||
Property | 6.19 | Portland | 0.1% | 257,481 | Fee Simple | Harvey Industries, Inc. | 48,145 | |||||||||||||
Property | 6.20 | Norwalk | 0.1% | 292,789 | Fee Simple | Harvey Industries, Inc. | 30,000 | |||||||||||||
Property | 6.21 | Warwick | 0.1% | 232,602 | Fee Simple | Harvey Industries, Inc. | 43,899 | |||||||||||||
Property | 6.22 | Fitchburg | 0.1% | 198,552 | Fee Simple | Harvey Industries, Inc. | 39,433 | |||||||||||||
Property | 6.23 | Auburn | 0.1% | 192,593 | Fee Simple | Harvey Industries, Inc. | 37,132 | |||||||||||||
Property | 6.24 | Portsmouth | 0.1% | 186,481 | Fee Simple | Harvey Industries, Inc. | 31,470 | |||||||||||||
Property | 6.25 | Southampton | 0.0% | 155,810 | Fee Simple | Harvey Industries, Inc. | 36,421 | |||||||||||||
Property | 6.26 | Hyannis | 0.0% | 144,141 | Fee Simple | Harvey Industries, Inc. | 24,070 | |||||||||||||
Property | 6.27 | Wilkes-Barre | 0.0% | 157,438 | Fee Simple | Harvey Industries, Inc. | 32,200 | |||||||||||||
Property | 6.28 | Berlin CPD | 0.0% | 126,928 | Fee Simple | Harvey Industries, Inc. | 28,163 | |||||||||||||
Property | 6.29 | Springfield | 0.0% | 140,192 | Fee Simple | Harvey Industries, Inc. | 25,347 | |||||||||||||
Property | 6.30 | White River Junction | 0.0% | 100,363 | Fee Simple | Harvey Industries, Inc. | 13,736 | |||||||||||||
Loan | 7 | Beach House Hilton Head (36) | 4.2% | 4,029,018 | Fee Simple | NAP | NAP | |||||||||||||
Loan | 8 | Whitehall Hotel | 3.7% | 3,805,822 | Fee Simple | NAP | NAP | |||||||||||||
Loan | 9 | 611 Cowper | 3.4% | 148,230 | 3,162,396 | Fee Simple | A9.com | 30,000 | ||||||||||||
Loan | 10 | Springfield Mall (33) | 3.4% | 223,180 | 6,932,543 | Fee Simple | Ulta | 10,287 | ||||||||||||
Loan | 11 | Laguna Niguel Town Center | 2.8% | 74,456 | 2,221,482 | Fee Simple | Denault’s Hardware | 15,000 | ||||||||||||
Loan | 12 | Hacienda Gardens | 2.5% | 52,249 | 1,991,766 | Fee Simple | Fitness Evolution Health Club | 31,278 | ||||||||||||
Loan | 13 | Washington Plaza | 2.4% | 48,304 | 1,758,485 | Fee Simple | Rite Aid - Store | 20,212 | ||||||||||||
Loan | 14 | Carrollwood Station | 2.2% | 1,775,464 | Fee Simple | NAP | NAP | |||||||||||||
Loan | 15 | Murrieta Spectrum | 2.1% | 86,263 | 1,721,900 | Fee Simple | Ashleys | 50,974 | ||||||||||||
Loan | 16 | Westin Lake Mary | 2.1% | 2,059,611 | Fee Simple | NAP | NAP |
A-1-15 |
COMM 2015-LC23
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | ||||||||||||||||||||
Property | Initial Pool | Underwritten | Underwritten | Ownership | Ground Lease | Ground Lease | ||||||||||||||
Flag | ID | Property Name | Balance | TI/LC($) | NCF($) | Interest | Expiration (18) | Extension Terms (18) | Largest Tenant (19)(20)(21)(22)(23)(24)(25) | SF | ||||||||||
Loan | 17 | Lake Creek Festival | 2.1% | 178,314 | 1,981,336 | Fee Simple | Burlington Coat Factory | 86,479 | ||||||||||||
Loan | 18 | Wedgewood Building | 2.0% | 84,600 | 1,511,612 | Fee Simple | Wedgewood | 24,350 | ||||||||||||
Loan | 19 | Kenhorst Plaza | 1.9% | 64,951 | 1,492,638 | Fee Simple | Redner’s Warehouse Markets (Redner’s Markets, Inc.) | 57,935 | ||||||||||||
Loan | 20 | Addison Town Center | 1.7% | 111,221 | 1,452,604 | Fee Simple | Kroger Food Stores | 50,540 | ||||||||||||
Loan | 21 | A&H Olympic | 1.5% | 72,605 | 1,384,108 | Fee Simple | Athena Parking, Inc. | 28,532 | ||||||||||||
Loan | 22 | Brentwood Retail Center (35) | 1.4% | 15,767 | 1,068,638 | Fee Simple | Rag & Bone | 4,000 | ||||||||||||
Loan | 23 | A&H Maple Avenue | 1.4% | 25,000 | 1,718,875 | Fee Simple | Carlos Sandoval & Heather Olson | 2,195 | ||||||||||||
Loan | 24 | BJs Montgomeryville | 1.2% | 993,304 | Fee Simple | BJ’s Wholesale Club, Inc. | 87,984 | |||||||||||||
Loan | 25 | Colerain Center | 1.2% | 55,177 | 992,127 | Fee Simple | LA Fitness & Sports Club | 30,000 | ||||||||||||
Loan | 26 | Whitewater Place | 1.2% | 1,074,653 | Fee Simple | NAP | NAP | |||||||||||||
Loan | 27 | Brown Street Centre | 1.2% | 123,485 | 1,121,367 | Fee Simple | Wells Fargo | 20,667 | ||||||||||||
Loan | 28 | Biltmore Parks Apartments | 1.1% | 985,691 | Fee Simple | NAP | NAP | |||||||||||||
Loan | 29 | Ortega Village - Retail | 1.1% | 857,440 | Fee Simple | Bad to the Bone | 4,161 | |||||||||||||
Loan | 30 | Landings Shops and Offices | 0.9% | 66,590 | 751,725 | Fee Simple | ||||||||||||||
Property | 30.01 | Landings Shops and Offices | 0.5% | 50,403 | 366,591 | Fee Simple | Next Generation Child Care | 10,892 | ||||||||||||
Property | 30.02 | Progressive Properties | 0.3% | 12,503 | 205,351 | Fee Simple | Cleveland Clinic | 12,100 | ||||||||||||
Property | 30.03 | Kopf Offices | 0.2% | 3,684 | 179,783 | Fee Simple | Kopf Construction Corp | 14,400 | ||||||||||||
Loan | 31 | Terraces on Second | 0.9% | 672,719 | Fee Simple | NAP | NAP | |||||||||||||
Loan | 32 | 75 Executive Drive (36) | 0.9% | 52,122 | 725,076 | Fee Simple | Aftermath, Inc. | 16,267 | ||||||||||||
Loan | 33 | Best Buy Boca Raton | 0.8% | 17,400 | 641,702 | Fee Simple | Best Buy | 58,000 | ||||||||||||
Loan | 34 | Somerset Apartments | 0.8% | 619,140 | Fee Simple | NAP | NAP | |||||||||||||
Loan | 35 | Walgreens VA Beach | 0.8% | 624,227 | Fee Simple | Walgreens | 14,200 | |||||||||||||
Loan | 36 | Holiday Inn Express & Suites Rockport | 0.8% | 914,608 | Fee Simple | NAP | NAP | |||||||||||||
Loan | 37 | Commons at Pembroke | 0.7% | 613,865 | Fee Simple | NAP | NAP | |||||||||||||
Loan | 38 | Monument Creek (36) | 0.7% | 549,003 | Fee Simple | NAP | NAP | |||||||||||||
Loan | 39 | High Country Plaza | 0.7% | 25,686 | 515,149 | Fee Simple | 7-Eleven | 3,000 | ||||||||||||
Loan | 40 | Williamsburg Center | 0.7% | 63,365 | 752,563 | Fee Simple | ||||||||||||||
Property | 40.01 | 1734 Corporate Crossing | 0.2% | 9,075 | 148,125 | Fee Simple | Univ. of Illinois Chicago | 5,441 | ||||||||||||
Property | 40.02 | 1728 Corporate Crossing | 0.2% | 9,075 | 110,575 | Fee Simple | Red Cedar | 8,550 | ||||||||||||
Property | 40.03 | 1722 Corporate Crossing | 0.1% | 9,075 | 100,547 | Fee Simple | First Command | 5,600 | ||||||||||||
Property | 40.04 | 1035 East Gate Drive | 0.1% | 10,950 | 152,347 | Fee Simple | Lockheed Martin | 8,080 | ||||||||||||
Property | 40.05 | 735 Seibert Road | 0.1% | 8,414 | 82,158 | Fee Simple | C5T | 2,632 | ||||||||||||
Property | 40.06 | 703 Seibert Road | 0.0% | 8,377 | 58,421 | Fee Simple | Aegis | 4,434 | ||||||||||||
Property | 40.07 | 723 Seibert Road | 0.0% | 8,400 | 100,390 | Fee Simple | Paragon Technology | 3,602 | ||||||||||||
Loan | 41 | Shops at Cardiff Ranch | 0.7% | 23,925 | 624,315 | Fee Simple | Brixton Pet Health | 12,000 | ||||||||||||
Loan | 42 | Cobblestone Court II | 0.5% | 437,373 | Fee Simple | NAP | NAP | |||||||||||||
Loan | 43 | Hampton Inn & Suites – Portland | 0.5% | 833,169 | Fee Simple | NAP | NAP | |||||||||||||
Loan | 44 | 40 Wall Street (33) | 0.5% | 1,473,381 | 20,800,023 | Leasehold | 04/30/2059 | 2 Extension options. 1 - 67.5 year extension option, 1 - 80 year and 2 month extension option | Green Ivy | 86,350 | ||||||||||
Loan | 45 | Palisades of Bridgeport | 0.5% | 405,954 | Fee Simple | NAP | NAP | |||||||||||||
Loan | 46 | Walgreens Frisco TX | 0.4% | 364,000 | Fee Simple | Walgreens | 14,560 | |||||||||||||
Loan | 47 | Walgreens-Goodwill Missouri TX | 0.4% | 369,000 | Fee Simple | Walgreens | 14,820 | |||||||||||||
Loan | 48 | Warsaw Village | 0.4% | 30,050 | 316,746 | Fee Simple | Food Lion (Store 1196) | 29,000 | ||||||||||||
Loan | 49 | Walton Shoppes | 0.4% | 30,912 | 336,253 | Fee Simple | Rochester Eye Care | 3,000 | ||||||||||||
Loan | 50 | Ortega Village- Pads | 0.4% | 284,341 | Fee Simple | Davita Renal Healthcare | 8,268 | |||||||||||||
Loan | 51 | 691 14th Street Retail | 0.4% | 12,010 | 335,234 | Fee Simple | Cooks & Soldiers | 4,625 | ||||||||||||
Loan | 52 | Monte & Wishing Well | 0.3% | 354,677 | Fee Simple | |||||||||||||||
Property | 52.01 | Monte Carlo MHC | 0.2% | 220,894 | Fee Simple | NAP | NAP | |||||||||||||
Property | 52.02 | Wishing Well MHP | 0.1% | 133,783 | Fee Simple | NAP | NAP | |||||||||||||
Loan | 53 | Ferndale Avenue Shoppes | 0.3% | 25,891 | 316,090 | Fee Simple | Dickey’s BBQ | 2,589 | ||||||||||||
Loan | 54 | Courtyard Self Storage | 0.3% | 306,612 | Fee Simple | NAP | NAP | |||||||||||||
Loan | 55 | Bayonne MHP | 0.3% | 312,897 | Fee Simple | NAP | NAP | |||||||||||||
Loan | 56 | Best Western Cleveland Airport | 0.3% | 369,841 | Fee Simple | NAP | NAP | |||||||||||||
Loan | 57 | Eureka Crossings | 0.2% | 27,223 | 259,032 | Fee Simple | Woodward Detroit CVS, LLC | 10,590 | ||||||||||||
Loan | 58 | Family Dollar - Rose Hill (36) | 0.1% | 85,638 | Fee Simple | Rose Hill, NC | 8,320 | |||||||||||||
Loan | 59 | Family Dollar - Moultrie (36) | 0.1% | 78,129 | Fee Simple | Moultrie, GA | 8,233 | |||||||||||||
Loan | 60 | Family Dollar - Biscoe (36) | 0.1% | 73,318 | Fee Simple | Biscoe, NC | 8,320 | |||||||||||||
Loan | 61 | Family Dollar - Rockingham (36) | 0.1% | 69,772 | Fee Simple | Rockingham, NC | 8,320 | |||||||||||||
Loan | 62 | Dollar General - De Soto (36) | 0.1% | 69,630 | Fee Simple | De Soto, IA | 9,100 |
A-1-16 |
COMM 2015-LC23 | ||||||||||||||||||||||||
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES | ||||||||||||||||||||||||
% of | ||||||||||||||||||||||||
Property | Initial Pool | Lease | Lease | Lease | ||||||||||||||||||||
Flag | ID | Property Name | Balance | Expiration | 2nd Largest Tenant (20)(21)(24)(25) | SF | Expiration | 3rd Largest Tenant (19)(20)(21)(23)(24)(25) | SF | Expiration | 4th Largest Tenant (19)(21)(23)(24) | SF | ||||||||||||
Loan | 1 | Equity Inns Portfolio (33) | 8.3% | |||||||||||||||||||||
Property | 1.01 | Homewood Suites Seattle | 1.5% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 1.02 | Homewood Suites Orlando | 0.7% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 1.03 | Courtyard Carlsbad | 0.5% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 1.04 | Courtyard Houston | 0.5% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 1.05 | Homewood Suites Stratford | 0.4% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 1.06 | Hampton Inn Urbana | 0.4% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 1.07 | Springhill Suites Asheville | 0.4% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 1.08 | Hilton Garden Inn Louisville | 0.4% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 1.09 | Hampton Inn Orlando | 0.4% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 1.10 | Hampton Inn Austin | 0.4% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 1.11 | Hampton Inn College Station | 0.4% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 1.12 | Hampton Inn Indianapolis | 0.3% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 1.13 | TownePlace Suites Savannah | 0.3% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 1.14 | Hampton Inn East Lansing | 0.3% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 1.15 | Hampton Inn Naperville | 0.3% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 1.16 | Hilton Garden Inn Rio Rancho | 0.3% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 1.17 | Courtyard Dalton | 0.2% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 1.18 | Hampton Inn Alcoa | 0.2% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 1.19 | Homewood Suites Augusta | 0.2% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 1.20 | Residence Inn Jacksonville | 0.2% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 1.21 | Hampton Inn Milford | 0.1% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 2 | 32 Avenue of the Americas (33)(36) | 7.3% | 09/30/2022 | Dentsu Holdings USA, Inc. | 168,891 | 09/30/2021 | Centurylink Communications, LLC | 165,034 | 08/31/2020 | Telx | 79,243 | ||||||||||||
Loan | 3 | 11 Madison Avenue (33)(34)(35) | 7.2% | 05/31/2037 | Sony | 578,791 | 01/31/2031 | Yelp | 152,232 | 04/30/2025 | WME | 103,426 | ||||||||||||
Loan | 4 | 1209 DeKalb (35)(36) | 4.8% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 5 | Good Samaritan Medical Tower (36) | 4.4% | 02/28/2023 | United Imaging, LLC | 8,824 | 01/31/2021 | Samaritan Tower Surgery Center, LLC | 7,847 | 09/30/2026 | Retina Vitreous Associates | 6,404 | ||||||||||||
Loan | 6 | Harvey Building Products Portfolio (33) | 4.4% | |||||||||||||||||||||
Property | 6.01 | Londonderry Manufacturing | 0.8% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.02 | Waltham Corporate | 0.4% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.03 | Dartmouth Manufacturing | 0.4% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.04 | Nashua | 0.2% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.05 | West Bridgewater | 0.2% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.06 | Woburn | 0.2% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.07 | Manchester, NH | 0.2% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.08 | New London | 0.1% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.09 | East Haven | 0.1% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.10 | Salem | 0.1% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.11 | Bethlehem | 0.1% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.12 | Lincoln | 0.1% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.13 | Berlin | 0.1% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.14 | Woburn CPD | 0.1% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.15 | Norwalk | 0.1% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.16 | Dartmouth | 0.1% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.17 | Braintree | 0.1% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.18 | Manchester, CT | 0.1% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.19 | Portland | 0.1% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.20 | Norwalk | 0.1% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.21 | Warwick | 0.1% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.22 | Fitchburg | 0.1% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.23 | Auburn | 0.1% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.24 | Portsmouth | 0.1% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.25 | Southampton | 0.0% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.26 | Hyannis | 0.0% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.27 | Wilkes-Barre | 0.0% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.28 | Berlin CPD | 0.0% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.29 | Springfield | 0.0% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 6.30 | White River Junction | 0.0% | 10/31/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 7 | Beach House Hilton Head (36) | 4.2% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 8 | Whitehall Hotel | 3.7% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 9 | 611 Cowper | 3.4% | 10/31/2025 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 10 | Springfield Mall (33) | 3.4% | 10/31/2022 | American Eagle Outfitters | 8,284 | 08/31/2024 | The Gap/Gap Kids | 8,035 | 01/31/2019 | Express | 7,530 | ||||||||||||
Loan | 11 | Laguna Niguel Town Center | 2.8% | 10/31/2018 | Walgreens | 12,904 | 11/30/2027 | U.S. Bank | 8,500 | 07/31/2021 | So Cal Dental Partner | 6,432 | ||||||||||||
Loan | 12 | Hacienda Gardens | 2.5% | 07/31/2025 | Rite Aid | 17,340 | 2/28/2033 | Hometown Buffet, Inc. | 9,600 | 12/31/2034 | Dollar Tree Stores, Inc. | 9,100 | ||||||||||||
Loan | 13 | Washington Plaza | 2.4% | 05/31/2025 | 99 Cents Only Stores Inc. | 19,782 | 1/31/2022 | Da Vita Inc. | 7,440 | 4/30/2019 | Wenceslao Lopez dba Urban Design | 5,750 | ||||||||||||
Loan | 14 | Carrollwood Station | 2.2% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 15 | Murrieta Spectrum | 2.1% | 10/01/2022 | Savers | 26,194 | 9/1/2022 | Automobile Club of SC | 9,870 | 07/31/2016 | Sleep Train | 6,688 | ||||||||||||
Loan | 16 | Westin Lake Mary | 2.1% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
A-1-17 |
COMM 2015-LC23
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | ||||||||||||||||||||||||
Property | Initial Pool | Lease | Lease | Lease | ||||||||||||||||||||
Flag | ID | Property Name | Balance | Expiration | 2nd Largest Tenant (20)(21)(24)(25) | SF | Expiration | 3rd Largest Tenant (19)(20)(21)(23)(24)(25) | SF | Expiration | 4th Largest Tenant (19)(21)(23)(24) | SF | ||||||||||||
Loan | 17 | Lake Creek Festival | 2.1% | 11/30/2020 | Hobby Lobby | 57,454 | 05/31/2018 | Pinballz Arcade | 33,900 | 01/31/2026 | Southwest Theaters | 29,100 | ||||||||||||
Loan | 18 | Wedgewood Building | 2.0% | 06/30/2030 | T-Mobile | 14,203 | 8/13/2022 | Maxim Properties | 11,335 | 6/30/2030 | Greenhedge Escrow | 6,297 | ||||||||||||
Loan | 19 | Kenhorst Plaza | 1.9% | 04/30/2030 | Retro Fitness | 21,440 | 02/28/2026 | Dollar Tree (Dollar Tree Stores, Inc.) | 11,251 | 01/31/2024 | US Postal Service | 10,460 | ||||||||||||
Loan | 20 | Addison Town Center | 1.7% | 05/31/2019 | Office Depot | 21,067 | 10/31/2016 | Crunch Fitness | 19,920 | 3/31/2025 | PetSmart | 19,551 | ||||||||||||
Loan | 21 | A&H Olympic | 1.5% | 02/29/2016 | Yong Nam Kim | 4,705 | 12/31/2016 | Bahram Messian | 3,910 | 06/30/2016 | This is Ground LLC | 3,348 | ||||||||||||
Loan | 22 | Brentwood Retail Center (35) | 1.4% | 10/31/2023 | E*Trade | 3,944 | 02/28/2017 | Starbucks | 1,817 | 8/31/2019 | Pinkberry | 750 | ||||||||||||
Loan | 23 | A&H Maple Avenue | 1.4% | 02/28/2019 | Navid Javidzad | 2,000 | 03/31/2016 | Aurea Castro | 1,400 | 05/31/2017 | Ali Liaquat | 1,400 | ||||||||||||
Loan | 24 | BJs Montgomeryville | 1.2% | 08/13/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 25 | Colerain Center | 1.2% | 01/31/2019 | Aldi’s Grocery | 17,494 | 04/30/2024 | Shoe Carnival | 12,000 | 07/31/2025 | Jack’s Pets | 6,000 | ||||||||||||
Loan | 26 | Whitewater Place | 1.2% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 27 | Brown Street Centre | 1.2% | 03/31/2019 | Moffet, Vitu, et al | 8,148 | 03/31/2017 | Berry Moorman | 5,474 | 07/31/2016 | Jacobson Brothers | 5,157 | ||||||||||||
Loan | 28 | Biltmore Parks Apartments | 1.1% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 29 | Ortega Village - Retail | 1.1% | 12/31/2021 | Ortega Tack And Feed | 3,953 | 04/30/2016 | S&R Market | 3,888 | 01/31/2019 | Ball Park Pizza | 3,507 | ||||||||||||
Loan | 30 | Landings Shops and Offices | 0.9% | |||||||||||||||||||||
Property | 30.01 | Landings Shops and Offices | 0.5% | 03/31/2018 | St. John & West Shore Hospital | 5,400 | 4/30/2020 | Tai Chee Kung, Inc. | 4,100 | 5/31/2019 | Jose Jesus Jimenez | 4,080 | ||||||||||||
Property | 30.02 | Progressive Properties | 0.3% | 12/31/2019 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 30.03 | Kopf Offices | 0.2% | 12/31/2015 | Emerge, Inc. | 3,057 | 5/31/2018 | VIP Property Management | 1,600 | 12/31/2015 | NAP | NAP | ||||||||||||
Loan | 31 | Terraces on Second | 0.9% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 32 | 75 Executive Drive (36) | 0.9% | 09/30/2017 | Aceyus, Corp. | 11,637 | 11/30/2022 | K-Rise Systems, Inc. | 3,789 | 05/31/2019 | Envoy Aerospace, LLC | 3,455 | ||||||||||||
Loan | 33 | Best Buy Boca Raton | 0.8% | 05/24/2025 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 34 | Somerset Apartments | 0.8% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 35 | Walgreens VA Beach | 0.8% | 03/30/2035 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 36 | Holiday Inn Express & Suites Rockport | 0.8% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 37 | Commons at Pembroke | 0.7% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 38 | Monument Creek (36) | 0.7% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 39 | High Country Plaza | 0.7% | 09/30/2017 | Kelly’s Pub | 2,700 | 09/30/2021 | Cuts N Games | 1,800 | MTM | Domino’s Pizza | 1,650 | ||||||||||||
Loan | 40 | Williamsburg Center | 0.7% | |||||||||||||||||||||
Property | 40.01 | 1734 Corporate Crossing | 0.2% | 10/31/2016 | GSA | 4,599 | 9/23/2022 | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 40.02 | 1728 Corporate Crossing | 0.2% | 10/31/2018 | Harris Corp | 3,550 | 9/30/2019 | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 40.03 | 1722 Corporate Crossing | 0.1% | 04/30/2018 | American Automotive | 2,481 | 5/31/2016 | Vets | 1,983 | 12/31/2015 | Office Centers | 1,236 | ||||||||||||
Property | 40.04 | 1035 East Gate Drive | 0.1% | 06/30/2019 | Tricor | 6,520 | 4/30/2020 | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 40.05 | 735 Seibert Road | 0.1% | 04/30/2018 | LMI | 2,481 | 3/31/2016 | Techguard | 2,220 | 1/31/2017 | Tricor | 1,632 | ||||||||||||
Property | 40.06 | 703 Seibert Road | 0.0% | 08/31/2020 | Veterans United | 2,000 | 5/31/2020 | Dr. Jill Kinsella | 1,252 | 2/28/2017 | NAP | NAP | ||||||||||||
Property | 40.07 | 723 Seibert Road | 0.0% | 08/31/2016 | Asynchrony | 3,049 | 9/30/2016 | CDM Technologies | 2,049 | 12/31/2015 | Indrasoft | 1,200 | ||||||||||||
Loan | 41 | Shops at Cardiff Ranch | 0.7% | 04/30/2030 | Tiny Teeth of Katy | 2,800 | 6/30/2025 | Z Zone Fitness Studio | 1,750 | 3/31/2020 | Reese Chiropractic | 1,400 | ||||||||||||
Loan | 42 | Cobblestone Court II | 0.5% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 43 | Hampton Inn & Suites – Portland | 0.5% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 44 | 40 Wall Street (33) | 0.5% | 11/30/2061 | Countrywide Insurance Company | 82,302 | 08/31/2021 | Duane Reade | 77,810 | 03/31/2028 | Haks Engineering & Land Surveyors | 69,916 | ||||||||||||
Loan | 45 | Palisades of Bridgeport | 0.5% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 46 | Walgreens Frisco TX | 0.4% | 04/16/2029 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 47 | Walgreens-Goodwill Missouri TX | 0.4% | 07/15/2030 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 48 | Warsaw Village | 0.4% | 12/01/2017 | Rite Aid of Virginia Inc. | 9,600 | 1/31/2017 | Mincheng Zheng | 7,150 | 5/31/2025 | U.S. Renal Care Inc. (DCA of Warsaw) | 7,000 | ||||||||||||
Loan | 49 | Walton Shoppes | 0.4% | 12/31/2018 | KLG Retail (d/b/a Lole) | 2,500 | 10/01/2019 | LaVida Massage | 2,500 | 04/22/2019 | Jake’s Wayback Burgers | 2,000 | ||||||||||||
Loan | 50 | Ortega Village- Pads | 0.4% | 02/29/2024 | Capistrano Dance Academy | 2,683 | 08/31/2016 | Ortega Therapy Day Spa | 2,584 | 06/30/2018 | N.R. Amiri D.D.S. Inc., | 1,523 | ||||||||||||
Loan | 51 | 691 14th Street Retail | 0.4% | 10/31/2024 | Southern Institute of Aesthetics PC | 2,250 | 4/30/2025 | Revelator Coffee | 1,725 | 5/30/2020 | Kane Boutique | 1,200 | ||||||||||||
Loan | 52 | Monte & Wishing Well | 0.3% | |||||||||||||||||||||
Property | 52.01 | Monte Carlo MHC | 0.2% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Property | 52.02 | Wishing Well MHP | 0.1% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 53 | Ferndale Avenue Shoppes | 0.3% | 10/04/2024 | The Rocket, LLC | 2,588 | 12/06/2019 | LaVida Massage | 2,500 | 05/19/2019 | Jimmy John’s | 1,780 | ||||||||||||
Loan | 54 | Courtyard Self Storage | 0.3% | �� | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | |||||||||||
Loan | 55 | Bayonne MHP | 0.3% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 56 | Best Western Cleveland Airport | 0.3% | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 57 | Eureka Crossings | 0.2% | 07/31/2021 | Weight Watchers (WW Group) | 2,432 | 12/01/2020 | Rx Optical Laboratories | 2,400 | 10/20/2021 | Angel Animal Hospital (Randhawa) | 2,348 | ||||||||||||
Loan | 58 | Family Dollar - Rose Hill (36) | 0.1% | 06/30/2029 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 59 | Family Dollar - Moultrie (36) | 0.1% | 06/30/2029 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 60 | Family Dollar - Biscoe (36) | 0.1% | 06/30/2029 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 61 | Family Dollar - Rockingham (36) | 0.1% | 06/30/2029 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP | ||||||||||||
Loan | 62 | Dollar General - De Soto (36) | 0.1% | 07/31/2030 | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
A-1-18 |
COMM 2015-LC23 | ||||||||||||||||||||
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES | ||||||||||||||||||||
% of | Upfront | |||||||||||||||||||
Property | Initial Pool | Lease | Lease | Occupancy | Replacement | |||||||||||||||
Flag | ID | Property Name | Balance | Expiration | 5th Largest Tenant (19)(21)(23)(24)(25) | SF | Expiration | Occupancy | As-of Date | Reserves($)(27) | ||||||||||
Loan | 1 | Equity Inns Portfolio (33) | 8.3% | 75.6% | 07/31/2015 | |||||||||||||||
Property | 1.01 | Homewood Suites Seattle | 1.5% | NAP | NAP | NAP | NAP | 89.0% | 07/31/2015 | |||||||||||
Property | 1.02 | Homewood Suites Orlando | 0.7% | NAP | NAP | NAP | NAP | 75.0% | 07/31/2015 | |||||||||||
Property | 1.03 | Courtyard Carlsbad | 0.5% | NAP | NAP | NAP | NAP | 73.5% | 07/31/2015 | |||||||||||
Property | 1.04 | Courtyard Houston | 0.5% | NAP | NAP | NAP | NAP | 57.2% | 07/31/2015 | |||||||||||
Property | 1.05 | Homewood Suites Stratford | 0.4% | NAP | NAP | NAP | NAP | 76.7% | 07/31/2015 | |||||||||||
Property | 1.06 | Hampton Inn Urbana | 0.4% | NAP | NAP | NAP | NAP | 70.6% | 07/31/2015 | |||||||||||
Property | 1.07 | Springhill Suites Asheville | 0.4% | NAP | NAP | NAP | NAP | 76.4% | 07/31/2015 | |||||||||||
Property | 1.08 | Hilton Garden Inn Louisville | 0.4% | NAP | NAP | NAP | NAP | 77.1% | 07/31/2015 | |||||||||||
Property | 1.09 | Hampton Inn Orlando | 0.4% | NAP | NAP | NAP | NAP | 83.1% | 07/31/2015 | |||||||||||
Property | 1.10 | Hampton Inn Austin | 0.4% | NAP | NAP | NAP | NAP | 73.7% | 07/31/2015 | |||||||||||
Property | 1.11 | Hampton Inn College Station | 0.4% | NAP | NAP | NAP | NAP | 71.4% | 07/31/2015 | |||||||||||
Property | 1.12 | Hampton Inn Indianapolis | 0.3% | NAP | NAP | NAP | NAP | 77.9% | 07/31/2015 | |||||||||||
Property | 1.13 | TownePlace Suites Savannah | 0.3% | NAP | NAP | NAP | NAP | 87.7% | 07/31/2015 | |||||||||||
Property | 1.14 | Hampton Inn East Lansing | 0.3% | NAP | NAP | NAP | NAP | 81.1% | 07/31/2015 | |||||||||||
Property | 1.15 | Hampton Inn Naperville | 0.3% | NAP | NAP | NAP | NAP | 69.3% | 07/31/2015 | |||||||||||
Property | 1.16 | Hilton Garden Inn Rio Rancho | 0.3% | NAP | NAP | NAP | NAP | 73.1% | 07/31/2015 | |||||||||||
Property | 1.17 | Courtyard Dalton | 0.2% | NAP | NAP | NAP | NAP | 74.1% | 07/31/2015 | |||||||||||
Property | 1.18 | Hampton Inn Alcoa | 0.2% | NAP | NAP | NAP | NAP | 81.4% | 07/31/2015 | |||||||||||
Property | 1.19 | Homewood Suites Augusta | 0.2% | NAP | NAP | NAP | NAP | 80.6% | 07/31/2015 | |||||||||||
Property | 1.20 | Residence Inn Jacksonville | 0.2% | NAP | NAP | NAP | NAP | 82.1% | 07/31/2015 | |||||||||||
Property | 1.21 | Hampton Inn Milford | 0.1% | NAP | NAP | NAP | NAP | 69.9% | 07/31/2015 | |||||||||||
Loan | 2 | 32 Avenue of the Americas (33)(36) | 7.3% | 07/31/2033 | University of Cambridge | 64,256 | 01/31/2022 | 99.6% | 08/12/2015 | |||||||||||
Loan | 3 | 11 Madison Avenue (33)(34)(35) | 7.2% | 09/30/2030 | Young & Rubicam, Inc. | 99,107 | 03/30/2019 | 97.8% | 08/11/2015 | |||||||||||
Loan | 4 | 1209 DeKalb (35)(36) | 4.8% | NAP | NAP | NAP | NAP | 99.2% | 09/14/2015 | |||||||||||
Loan | 5 | Good Samaritan Medical Tower (36) | 4.4% | 03/31/2016 | Boulevard Medical Properties | 5,412 | 06/30/2018 | 90.4% | 09/01/2015 | |||||||||||
Loan | 6 | Harvey Building Products Portfolio (33) | 4.4% | 100.0% | 11/06/2015 | |||||||||||||||
Property | 6.01 | Londonderry Manufacturing | 0.8% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.02 | Waltham Corporate | 0.4% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.03 | Dartmouth Manufacturing | 0.4% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.04 | Nashua | 0.2% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.05 | West Bridgewater | 0.2% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.06 | Woburn | 0.2% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.07 | Manchester, NH | 0.2% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.08 | New London | 0.1% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.09 | East Haven | 0.1% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.10 | Salem | 0.1% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.11 | Bethlehem | 0.1% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.12 | Lincoln | 0.1% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.13 | Berlin | 0.1% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.14 | Woburn CPD | 0.1% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.15 | Norwalk | 0.1% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.16 | Dartmouth | 0.1% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.17 | Braintree | 0.1% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.18 | Manchester, CT | 0.1% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.19 | Portland | 0.1% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.20 | Norwalk | 0.1% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.21 | Warwick | 0.1% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.22 | Fitchburg | 0.1% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.23 | Auburn | 0.1% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.24 | Portsmouth | 0.1% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.25 | Southampton | 0.0% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.26 | Hyannis | 0.0% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.27 | Wilkes-Barre | 0.0% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.28 | Berlin CPD | 0.0% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.29 | Springfield | 0.0% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 6.30 | White River Junction | 0.0% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Loan | 7 | Beach House Hilton Head (36) | 4.2% | NAP | NAP | NAP | NAP | 68.4% | 06/30/2015 | |||||||||||
Loan | 8 | Whitehall Hotel | 3.7% | NAP | NAP | NAP | NAP | 78.2% | 07/31/2015 | |||||||||||
Loan | 9 | 611 Cowper | 3.4% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | 12,000 | ||||||||||
Loan | 10 | Springfield Mall (33) | 3.4% | 01/31/2019 | Victoria’s Secret | 7,000 | 01/31/2023 | 95.4% | 07/31/2015 | |||||||||||
Loan | 11 | Laguna Niguel Town Center | 2.8% | 09/30/2017 | Signature Sports Bar | 4,000 | 09/30/2019 | 91.4% | 08/18/2015 | 106,000 | ||||||||||
Loan | 12 | Hacienda Gardens | 2.5% | 7/31/2019 | Wells Fargo Bank, NA | 5,177 | 8/31/2020 | 90.1% | 09/28/2015 | |||||||||||
Loan | 13 | Washington Plaza | 2.4% | MTM | Payless ShoeSource - Store | 4,872 | 12/31/2017 | 100.0% | 08/26/2015 | |||||||||||
Loan | 14 | Carrollwood Station | 2.2% | NAP | NAP | NAP | NAP | 97.9% | 08/05/2015 | 650,000 | ||||||||||
Loan | 15 | Murrieta Spectrum | 2.1% | 1/31/2021 | San Diego County Credit Union | 6,500 | 09/30/2020 | 78.0% | 10/01/2015 | |||||||||||
Loan | 16 | Westin Lake Mary | 2.1% | NAP | NAP | NAP | NAP | 72.9% | 08/31/2015 |
A-1-19 |
COMM 2015-LC23
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | Upfront | |||||||||||||||||||
Property | Initial Pool | Lease | Lease | Occupancy | Replacement | |||||||||||||||
Flag | ID | Property Name | Balance | Expiration | 5th Largest Tenant (19)(21)(23)(24)(25) | SF | Expiration | Occupancy | As-of Date | Reserves($)(27) | ||||||||||
Loan | 17 | Lake Creek Festival | 2.1% | 01/31/2024 | The Pep Boys - GL | 22,500 | 04/30/2017 | 98.1% | 09/08/2015 | |||||||||||
Loan | 18 | Wedgewood Building | 2.0% | 6/30/2030 | HMC Assets | 4,774 | 3/31/2019 | 100.0% | 09/01/2015 | |||||||||||
Loan | 19 | Kenhorst Plaza | 1.9% | 06/11/2020 | Cash Converters (CC Kenhorst, LLC) | 7,203 | 04/14/2016 | 92.2% | 09/01/2015 | |||||||||||
Loan | 20 | Addison Town Center | 1.7% | 1/31/2019 | New New Buffet | 10,000 | 7/31/2017 | 88.5% | 09/02/2015 | |||||||||||
Loan | 21 | A&H Olympic | 1.5% | 02/29/2016 | CKCC, Inc. | 3,275 | 11/30/2015 | 98.7% | 07/01/2015 | |||||||||||
Loan | 22 | Brentwood Retail Center (35) | 1.4% | 02/28/2017 | NAP | NAP | NAP | 100.0% | 09/01/2015 | |||||||||||
Loan | 23 | A&H Maple Avenue | 1.4% | 04/30/2017 | Ebrahim Tahvilian Kashi | 1,400 | 03/31/2017 | 100.0% | 07/01/2015 | |||||||||||
Loan | 24 | BJs Montgomeryville | 1.2% | NAP | NAP | NAP | NAP | 100.0% | 11/01/2015 | |||||||||||
Loan | 25 | Colerain Center | 1.2% | 02/28/2022 | Chick-Fil-A | 4,600 | 06/01/2030 | 100.0% | 09/21/2015 | |||||||||||
Loan | 26 | Whitewater Place | 1.2% | NAP | NAP | NAP | NAP | 96.6% | 09/15/2015 | |||||||||||
Loan | 27 | Brown Street Centre | 1.2% | 10/31/2019 | Nexus Realty | 3,940 | 10/31/2022 | 91.4% | 09/09/2015 | |||||||||||
Loan | 28 | Biltmore Parks Apartments | 1.1% | NAP | NAP | NAP | NAP | 98.1% | 09/09/2015 | |||||||||||
Loan | 29 | Ortega Village - Retail | 1.1% | 07/31/2017 | OC Pharmacy | 3,124 | 09/30/2023 | 100.0% | 08/05/2015 | 71,600 | ||||||||||
Loan | 30 | Landings Shops and Offices | 0.9% | 88.3% | Various | |||||||||||||||
Property | 30.01 | Landings Shops and Offices | 0.5% | 12/31/2019 | Herman’s Furniture | 3,000 | 9/30/2016 | 83.2% | 07/22/2015 | |||||||||||
Property | 30.02 | Progressive Properties | 0.3% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Property | 30.03 | Kopf Offices | 0.2% | NAP | NAP | NAP | NAP | 100.0% | 04/08/2015 | |||||||||||
Loan | 31 | Terraces on Second | 0.9% | NAP | NAP | NAP | NAP | 95.5% | 08/25/2015 | |||||||||||
Loan | 32 | 75 Executive Drive (36) | 0.9% | 09/30/2019 | Pillar Enterprises, Inc. | 2,666 | 08/31/2020 | 92.1% | 06/30/2015 | 42,835 | ||||||||||
Loan | 33 | Best Buy Boca Raton | 0.8% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Loan | 34 | Somerset Apartments | 0.8% | NAP | NAP | NAP | NAP | 92.4% | 09/17/2015 | |||||||||||
Loan | 35 | Walgreens VA Beach | 0.8% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Loan | 36 | Holiday Inn Express & Suites Rockport | 0.8% | NAP | NAP | NAP | NAP | 75.3% | 07/31/2015 | |||||||||||
Loan | 37 | Commons at Pembroke | 0.7% | NAP | NAP | NAP | NAP | 97.0% | 08/19/2015 | 200,000 | ||||||||||
Loan | 38 | Monument Creek (36) | 0.7% | NAP | NAP | NAP | NAP | 98.5% | 08/03/2015 | |||||||||||
Loan | 39 | High Country Plaza | 0.7% | 11/30/2022 | Westside Cleaners | 1,500 | 11/30/2019 | 95.7% | 08/05/2015 | |||||||||||
Loan | 40 | Williamsburg Center | 0.7% | 88.9% | 08/06/2015 | |||||||||||||||
Property | 40.01 | 1734 Corporate Crossing | 0.2% | NAP | NAP | NAP | NAP | 83.0% | 08/06/2015 | |||||||||||
Property | 40.02 | 1728 Corporate Crossing | 0.2% | NAP | NAP | NAP | NAP | 100.0% | 08/06/2015 | |||||||||||
Property | 40.03 | 1722 Corporate Crossing | 0.1% | 7/31/2020 | NAP | NAP | NAP | 93.4% | 08/06/2015 | |||||||||||
Property | 40.04 | 1035 East Gate Drive | 0.1% | NAP | NAP | NAP | NAP | 100.0% | 08/06/2015 | |||||||||||
Property | 40.05 | 735 Seibert Road | 0.1% | MTM | Engility | 543 | MTM | 84.8% | 08/06/2015 | |||||||||||
Property | 40.06 | 703 Seibert Road | 0.0% | NAP | NAP | NAP | NAP | 68.8% | 08/06/2015 | |||||||||||
Property | 40.07 | 723 Seibert Road | 0.0% | 2/29/2016 | NAP | NAP | NAP | 88.4% | 08/06/2015 | |||||||||||
Loan | 41 | Shops at Cardiff Ranch | 0.7% | 07/31/2020 | Posh Nails & Spa | 1,400 | 5/31/2020 | 95.7% | 07/30/2015 | |||||||||||
Loan | 42 | Cobblestone Court II | 0.5% | NAP | NAP | NAP | NAP | 99.4% | 06/30/2015 | |||||||||||
Loan | 43 | Hampton Inn & Suites – Portland | 0.5% | NAP | NAP | NAP | NAP | 77.0% | 07/31/2015 | |||||||||||
Loan | 44 | 40 Wall Street (33) | 0.5% | 03/31/2029 | Weidlinger Associates Inc | 61,082 | 01/31/2033 | 95.0% | 05/19/2015 | |||||||||||
Loan | 45 | Palisades of Bridgeport | 0.5% | NAP | NAP | NAP | NAP | 96.8% | 08/18/2015 | |||||||||||
Loan | 46 | Walgreens Frisco TX | 0.4% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Loan | 47 | Walgreens-Goodwill Missouri TX | 0.4% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Loan | 48 | Warsaw Village | 0.4% | 1/31/2021 | Virginia Alcoholic Beverage Control | 3,000 | 01/31/2021 | 95.0% | 08/24/2015 | |||||||||||
Loan | 49 | Walton Shoppes | 0.4% | 06/19/2024 | Tropical Smoothie | 2,000 | 10/16/2020 | 79.7% | 09/01/2015 | |||||||||||
Loan | 50 | Ortega Village- Pads | 0.4% | 08/31/2019 | NAP | NAP | NAP | 90.7% | 08/05/2015 | 72,800 | ||||||||||
Loan | 51 | 691 14th Street Retail | 0.4% | 10/31/2019 | Bilthouse | 1,057 | 10/31/2019 | 100.0% | 08/31/2015 | |||||||||||
Loan | 52 | Monte & Wishing Well | 0.3% | 97.9% | 04/30/2015 | |||||||||||||||
Property | 52.01 | Monte Carlo MHC | 0.2% | NAP | NAP | NAP | NAP | 100.0% | 04/30/2015 | |||||||||||
Property | 52.02 | Wishing Well MHP | 0.1% | NAP | NAP | NAP | NAP | 95.1% | 04/30/2015 | |||||||||||
Loan | 53 | Ferndale Avenue Shoppes | 0.3% | 04/22/2019 | Verizon Wireless | 1,558 | 04/30/2019 | 88.1% | 09/01/2015 | |||||||||||
Loan | 54 | Courtyard Self Storage | 0.3% | NAP | NAP | NAP | NAP | 85.6% | 07/31/2015 | |||||||||||
Loan | 55 | Bayonne MHP | 0.3% | NAP | NAP | NAP | NAP | 97.2% | 09/25/2015 | |||||||||||
Loan | 56 | Best Western Cleveland Airport | 0.3% | NAP | NAP | NAP | NAP | 83.2% | 07/31/2015 | |||||||||||
Loan | 57 | Eureka Crossings | 0.2% | 01/10/2021 | Wild Bill’s Tobacco | 1,840 | 01/26/2017 | 100.0% | 09/01/2015 | |||||||||||
Loan | 58 | Family Dollar - Rose Hill (36) | 0.1% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Loan | 59 | Family Dollar - Moultrie (36) | 0.1% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Loan | 60 | Family Dollar - Biscoe (36) | 0.1% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Loan | 61 | Family Dollar - Rockingham (36) | 0.1% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 | |||||||||||
Loan | 62 | Dollar General - De Soto (36) | 0.1% | NAP | NAP | NAP | NAP | 100.0% | 11/06/2015 |
A-1-20 |
COMM 2015-LC23 | ||||||||||
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES | ||||||||||
% of | Monthly | Upfront | ||||||||
Property | Initial Pool | Replacement | TI/LC | |||||||
Flag | ID | Property Name | Balance | Reserves ($)(28)(29)(31) | Reserves($)(27) | |||||
Loan | 1 | Equity Inns Portfolio (33) | 8.3% | The greater of 1/12 of 4% of gross revenue of the trailing 12 months from the most recent quarter and (ii) the amount required under the Franchise Agreement and Management Agreement for FF&E work | ||||||
Property | 1.01 | Homewood Suites Seattle | 1.5% | |||||||
Property | 1.02 | Homewood Suites Orlando | 0.7% | |||||||
Property | 1.03 | Courtyard Carlsbad | 0.5% | |||||||
Property | 1.04 | Courtyard Houston | 0.5% | |||||||
Property | 1.05 | Homewood Suites Stratford | 0.4% | |||||||
Property | 1.06 | Hampton Inn Urbana | 0.4% | |||||||
Property | 1.07 | Springhill Suites Asheville | 0.4% | |||||||
Property | 1.08 | Hilton Garden Inn Louisville | 0.4% | |||||||
Property | 1.09 | Hampton Inn Orlando | 0.4% | |||||||
Property | 1.10 | Hampton Inn Austin | 0.4% | |||||||
Property | 1.11 | Hampton Inn College Station | 0.4% | |||||||
Property | 1.12 | Hampton Inn Indianapolis | 0.3% | |||||||
Property | 1.13 | TownePlace Suites Savannah | 0.3% | |||||||
Property | 1.14 | Hampton Inn East Lansing | 0.3% | |||||||
Property | 1.15 | Hampton Inn Naperville | 0.3% | |||||||
Property | 1.16 | Hilton Garden Inn Rio Rancho | 0.3% | |||||||
Property | 1.17 | Courtyard Dalton | 0.2% | |||||||
Property | 1.18 | Hampton Inn Alcoa | 0.2% | |||||||
Property | 1.19 | Homewood Suites Augusta | 0.2% | |||||||
Property | 1.20 | Residence Inn Jacksonville | 0.2% | |||||||
Property | 1.21 | Hampton Inn Milford | 0.1% | |||||||
Loan | 2 | 32 Avenue of the Americas (33)(36) | 7.3% | Springing | 3,908,742 | |||||
Loan | 3 | 11 Madison Avenue (33)(34)(35) | 7.2% | Springing | 81,152,102 | |||||
Loan | 4 | 1209 DeKalb (35)(36) | 4.8% | 2,117 | ||||||
Loan | 5 | Good Samaritan Medical Tower (36) | 4.4% | 3,049 | ||||||
Loan | 6 | Harvey Building Products Portfolio (33) | 4.4% | |||||||
Property | 6.01 | Londonderry Manufacturing | 0.8% | |||||||
Property | 6.02 | Waltham Corporate | 0.4% | |||||||
Property | 6.03 | Dartmouth Manufacturing | 0.4% | |||||||
Property | 6.04 | Nashua | 0.2% | |||||||
Property | 6.05 | West Bridgewater | 0.2% | |||||||
Property | 6.06 | Woburn | 0.2% | |||||||
Property | 6.07 | Manchester, NH | 0.2% | |||||||
Property | 6.08 | New London | 0.1% | |||||||
Property | 6.09 | East Haven | 0.1% | |||||||
Property | 6.10 | Salem | 0.1% | |||||||
Property | 6.11 | Bethlehem | 0.1% | |||||||
Property | 6.12 | Lincoln | 0.1% | |||||||
Property | 6.13 | Berlin | 0.1% | |||||||
Property | 6.14 | Woburn CPD | 0.1% | |||||||
Property | 6.15 | Norwalk | 0.1% | |||||||
Property | 6.16 | Dartmouth | 0.1% | |||||||
Property | 6.17 | Braintree | 0.1% | |||||||
Property | 6.18 | Manchester, CT | 0.1% | |||||||
Property | 6.19 | Portland | 0.1% | |||||||
Property | 6.20 | Norwalk | 0.1% | |||||||
Property | 6.21 | Warwick | 0.1% | |||||||
Property | 6.22 | Fitchburg | 0.1% | |||||||
Property | 6.23 | Auburn | 0.1% | |||||||
Property | 6.24 | Portsmouth | 0.1% | |||||||
Property | 6.25 | Southampton | 0.0% | |||||||
Property | 6.26 | Hyannis | 0.0% | |||||||
Property | 6.27 | Wilkes-Barre | 0.0% | |||||||
Property | 6.28 | Berlin CPD | 0.0% | |||||||
Property | 6.29 | Springfield | 0.0% | |||||||
Property | 6.30 | White River Junction | 0.0% | |||||||
Loan | 7 | Beach House Hilton Head (36) | 4.2% | Greater of 4.0% of prior month’s rents for the property and any amount required under Management Agreement or Franchise Agreement for FF&E Work | ||||||
Loan | 8 | Whitehall Hotel | 3.7% | 1/12 of 4% of annual operating income | ||||||
Loan | 9 | 611 Cowper | 3.4% | Springing | 3,043,827 | |||||
Loan | 10 | Springfield Mall (33) | 3.4% | Springing | ||||||
Loan | 11 | Laguna Niguel Town Center | 2.8% | 1,636 | ||||||
Loan | 12 | Hacienda Gardens | 2.5% | 123,195 | ||||||
Loan | 13 | Washington Plaza | 2.4% | 1,725 | 300,000 | |||||
Loan | 14 | Carrollwood Station | 2.2% | 7,000 | ||||||
Loan | 15 | Murrieta Spectrum | 2.1% | 2,875 | 800,000 | |||||
Loan | 16 | Westin Lake Mary | 2.1% | Greater of 4.0% of prior month’s rents for the property and any amount required under Management Agreement or Franchise Agreement for FF&E Work |
A-1-21 |
COMM 2015-LC23
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | Monthly | Upfront | ||||||||
Property | Initial Pool | Replacement | TI/LC | |||||||
Flag | ID | Property Name | Balance | Reserves ($)(28)(29)(31) | Reserves($)(27) | |||||
Loan | 17 | Lake Creek Festival | 2.1% | 4,758 | 508,615 | |||||
Loan | 18 | Wedgewood Building | 2.0% | 1,107 | ||||||
Loan | 19 | Kenhorst Plaza | 1.9% | 2,556 | 220,000 | |||||
Loan | 20 | Addison Town Center | 1.7% | 2,328 | 250,000 | |||||
Loan | 21 | A&H Olympic | 1.5% | 1,841 | 100,000 | |||||
Loan | 22 | Brentwood Retail Center (35) | 1.4% | 131 | ||||||
Loan | 23 | A&H Maple Avenue | 1.4% | 399 | 25,000 | |||||
Loan | 24 | BJs Montgomeryville | 1.2% | Springing | ||||||
Loan | 25 | Colerain Center | 1.2% | 1,410 | ||||||
Loan | 26 | Whitewater Place | 1.2% | 1,854 | ||||||
Loan | 27 | Brown Street Centre | 1.2% | 871 | 200,000 | |||||
Loan | 28 | Biltmore Parks Apartments | 1.1% | 7,121 | ||||||
Loan | 29 | Ortega Village - Retail | 1.1% | 1,208 | 600,000 | |||||
Loan | 30 | Landings Shops and Offices | 0.9% | 1,720 | 20,000 | |||||
Property | 30.01 | Landings Shops and Offices | 0.5% | |||||||
Property | 30.02 | Progressive Properties | 0.3% | |||||||
Property | 30.03 | Kopf Offices | 0.2% | |||||||
Loan | 31 | Terraces on Second | 0.9% | 917 | ||||||
Loan | 32 | 75 Executive Drive (36) | 0.9% | Springing | 160,631 | |||||
Loan | 33 | Best Buy Boca Raton | 0.8% | 483 | 100,000 | |||||
Loan | 34 | Somerset Apartments | 0.8% | 4,144 | ||||||
Loan | 35 | Walgreens VA Beach | 0.8% | Springing | ||||||
Loan | 36 | Holiday Inn Express & Suites Rockport | 0.8% | Greater of (i) (a) 2% (1st year of the term), (b) 3% (2nd year of the term), (c) 1/2 of 4% (remainder of the term) and (ii) the T-12 gross revenue or the Annual Budget projected Gross Revenue | ||||||
Loan | 37 | Commons at Pembroke | 0.7% | 4,200 | ||||||
Loan | 38 | Monument Creek (36) | 0.7% | 571 | ||||||
Loan | 39 | High Country Plaza | 0.7% | 435 | ||||||
Loan | 40 | Williamsburg Center | 0.7% | 2,041 | ||||||
Property | 40.01 | 1734 Corporate Crossing | 0.2% | |||||||
Property | 40.02 | 1728 Corporate Crossing | 0.2% | |||||||
Property | 40.03 | 1722 Corporate Crossing | 0.1% | |||||||
Property | 40.04 | 1035 East Gate Drive | 0.1% | |||||||
Property | 40.05 | 735 Seibert Road | 0.1% | |||||||
Property | 40.06 | 703 Seibert Road | 0.0% | |||||||
Property | 40.07 | 723 Seibert Road | 0.0% | |||||||
Loan | 41 | Shops at Cardiff Ranch | 0.7% | 404 | ||||||
Loan | 42 | Cobblestone Court II | 0.5% | 1,720 | ||||||
Loan | 43 | Hampton Inn & Suites – Portland | 0.5% | The greater of 4% of gross revenue of the trailing 12 months from the most recent quarter and (ii) the amount required under the Franchise Agreement and Management Agreement for FF&E work | ||||||
Loan | 44 | 40 Wall Street (33) | 0.5% | Springing | ||||||
Loan | 45 | Palisades of Bridgeport | 0.5% | 2,790 | ||||||
Loan | 46 | Walgreens Frisco TX | 0.4% | Springing | ||||||
Loan | 47 | Walgreens-Goodwill Missouri TX | 0.4% | Springing | ||||||
Loan | 48 | Warsaw Village | 0.4% | 1,002 | ||||||
Loan | 49 | Walton Shoppes | 0.4% | 285 | ||||||
Loan | 50 | Ortega Village- Pads | 0.4% | 567 | 140,000 | |||||
Loan | 51 | 691 14th Street Retail | 0.4% | 181 | 276,750 | |||||
Loan | 52 | Monte & Wishing Well | 0.3% | 396 | ||||||
Property | 52.01 | Monte Carlo MHC | 0.2% | |||||||
Property | 52.02 | Wishing Well MHP | 0.1% | |||||||
Loan | 53 | Ferndale Avenue Shoppes | 0.3% | 215 | ||||||
Loan | 54 | Courtyard Self Storage | 0.3% | 158 | ||||||
Loan | 55 | Bayonne MHP | 0.3% | 454 | ||||||
Loan | 56 | Best Western Cleveland Airport | 0.3% | 1/12 of 4.0% of the greater of (a) Gross Revenue during the 12 month period and (b) Gross Revenue projected in the Approved Annual Budget for the 12 month period. | ||||||
Loan | 57 | Eureka Crossings | 0.2% | 315 | ||||||
Loan | 58 | Family Dollar - Rose Hill (36) | 0.1% | |||||||
Loan | 59 | Family Dollar - Moultrie (36) | 0.1% | |||||||
Loan | 60 | Family Dollar - Biscoe (36) | 0.1% | |||||||
Loan | 61 | Family Dollar - Rockingham (36) | 0.1% | |||||||
Loan | 62 | Dollar General - De Soto (36) | 0.1% |
A-1-22 |
COMM 2015-LC23 | ||||||||||||||||||
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES | ||||||||||||||||||
% of | Monthly | Upfront | Monthly | Upfront | Monthly | Upfront | ||||||||||||
Property | Initial Pool | TI/LC | Tax | Tax | Insurance | Insurance | Engineering | |||||||||||
Flag | ID | Property Name | Balance | Reserves ($)(28)(31) | Reserves($)(27) | Reserves ($)(28) | Reserves($)(27) | Reserves ($)(28) | Reserves($)(27) | |||||||||
Loan | 1 | Equity Inns Portfolio (33) | 8.3% | 890,215 | 296,738 | Springing | 160,928 | |||||||||||
Property | 1.01 | Homewood Suites Seattle | 1.5% | |||||||||||||||
Property | 1.02 | Homewood Suites Orlando | 0.7% | |||||||||||||||
Property | 1.03 | Courtyard Carlsbad | 0.5% | |||||||||||||||
Property | 1.04 | Courtyard Houston | 0.5% | |||||||||||||||
Property | 1.05 | Homewood Suites Stratford | 0.4% | |||||||||||||||
Property | 1.06 | Hampton Inn Urbana | 0.4% | |||||||||||||||
Property | 1.07 | Springhill Suites Asheville | 0.4% | |||||||||||||||
Property | 1.08 | Hilton Garden Inn Louisville | 0.4% | |||||||||||||||
Property | 1.09 | Hampton Inn Orlando | 0.4% | |||||||||||||||
Property | 1.10 | Hampton Inn Austin | 0.4% | |||||||||||||||
Property | 1.11 | Hampton Inn College Station | 0.4% | |||||||||||||||
Property | 1.12 | Hampton Inn Indianapolis | 0.3% | |||||||||||||||
Property | 1.13 | TownePlace Suites Savannah | 0.3% | |||||||||||||||
Property | 1.14 | Hampton Inn East Lansing | 0.3% | |||||||||||||||
Property | 1.15 | Hampton Inn Naperville | 0.3% | |||||||||||||||
Property | 1.16 | Hilton Garden Inn Rio Rancho | 0.3% | |||||||||||||||
Property | 1.17 | Courtyard Dalton | 0.2% | |||||||||||||||
Property | 1.18 | Hampton Inn Alcoa | 0.2% | |||||||||||||||
Property | 1.19 | Homewood Suites Augusta | 0.2% | |||||||||||||||
Property | 1.20 | Residence Inn Jacksonville | 0.2% | |||||||||||||||
Property | 1.21 | Hampton Inn Milford | 0.1% | |||||||||||||||
Loan | 2 | 32 Avenue of the Americas (33)(36) | 7.3% | Springing | Springing | Springing | ||||||||||||
Loan | 3 | 11 Madison Avenue (33)(34)(35) | 7.2% | Springing | Springing | Springing | ||||||||||||
Loan | 4 | 1209 DeKalb (35)(36) | 4.8% | 8,430 | 1,686 | 45,402 | 5,675 | |||||||||||
Loan | 5 | Good Samaritan Medical Tower (36) | 4.4% | 21,953 | 73,631 | 12,272 | Springing | 25,200 | ||||||||||
Loan | 6 | Harvey Building Products Portfolio (33) | 4.4% | 1,207,022 | 199,837 | 594,489 | 78,692 | 500,000 | ||||||||||
Property | 6.01 | Londonderry Manufacturing | 0.8% | |||||||||||||||
Property | 6.02 | Waltham Corporate | 0.4% | |||||||||||||||
Property | 6.03 | Dartmouth Manufacturing | 0.4% | |||||||||||||||
Property | 6.04 | Nashua | 0.2% | |||||||||||||||
Property | 6.05 | West Bridgewater | 0.2% | |||||||||||||||
Property | 6.06 | Woburn | 0.2% | |||||||||||||||
Property | 6.07 | Manchester, NH | 0.2% | |||||||||||||||
Property | 6.08 | New London | 0.1% | |||||||||||||||
Property | 6.09 | East Haven | 0.1% | |||||||||||||||
Property | 6.10 | Salem | 0.1% | |||||||||||||||
Property | 6.11 | Bethlehem | 0.1% | |||||||||||||||
Property | 6.12 | Lincoln | 0.1% | |||||||||||||||
Property | 6.13 | Berlin | 0.1% | |||||||||||||||
Property | 6.14 | Woburn CPD | 0.1% | |||||||||||||||
Property | 6.15 | Norwalk | 0.1% | |||||||||||||||
Property | 6.16 | Dartmouth | 0.1% | |||||||||||||||
Property | 6.17 | Braintree | 0.1% | |||||||||||||||
Property | 6.18 | Manchester, CT | 0.1% | |||||||||||||||
Property | 6.19 | Portland | 0.1% | |||||||||||||||
Property | 6.20 | Norwalk | 0.1% | |||||||||||||||
Property | 6.21 | Warwick | 0.1% | |||||||||||||||
Property | 6.22 | Fitchburg | 0.1% | |||||||||||||||
Property | 6.23 | Auburn | 0.1% | |||||||||||||||
Property | 6.24 | Portsmouth | 0.1% | |||||||||||||||
Property | 6.25 | Southampton | 0.0% | |||||||||||||||
Property | 6.26 | Hyannis | 0.0% | |||||||||||||||
Property | 6.27 | Wilkes-Barre | 0.0% | |||||||||||||||
Property | 6.28 | Berlin CPD | 0.0% | |||||||||||||||
Property | 6.29 | Springfield | 0.0% | |||||||||||||||
Property | 6.30 | White River Junction | 0.0% | |||||||||||||||
Loan | 7 | Beach House Hilton Head (36) | 4.2% | 271,388 | 28,122 | Springing | ||||||||||||
Loan | 8 | Whitehall Hotel | 3.7% | 225,000 | 48,900 | 138,000 | 11,900 | 38,750 | ||||||||||
Loan | 9 | 611 Cowper | 3.4% | Springing | 37,308 | Springing | 930 | Springing | ||||||||||
Loan | 10 | Springfield Mall (33) | 3.4% | Springing | 566,919 | 174,917 | Springing | |||||||||||
Loan | 11 | Laguna Niguel Town Center | 2.8% | 7,601 | 208,966 | 18,997 | 5,172 | 1,724 | ||||||||||
Loan | 12 | Hacienda Gardens | 2.5% | 148,000 | 37,000 | 30,529 | 2,775 | |||||||||||
Loan | 13 | Washington Plaza | 2.4% | 4,025 | 133,333 | 16,667 | 47,509 | 4,319 | 38,031 | |||||||||
Loan | 14 | Carrollwood Station | 2.2% | 300,000 | 33,300 | 55,000 | 11,200 | |||||||||||
Loan | 15 | Murrieta Spectrum | 2.1% | 7,189 | 119,000 | 39,667 | 10,817 | 2,704 | ||||||||||
Loan | 16 | Westin Lake Mary | 2.1% | 263,826 | 26,383 | 186,193 | 16,927 | 29,400 |
A-1-23 |
COMM 2015-LC23
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | Monthly | Upfront | Monthly | Upfront | Monthly | Upfront | ||||||||||||
Property | Initial Pool | TI/LC | Tax | Tax | Insurance | Insurance | Engineering | |||||||||||
Flag | ID | Property Name | Balance | Reserves ($)(28)(31) | Reserves($)(27) | Reserves ($)(28) | Reserves($)(27) | Reserves ($)(28) | Reserves($)(27) | |||||||||
Loan | 17 | Lake Creek Festival | 2.1% | 14,748 | 347,442 | 38,605 | Springing | 15,000 | ||||||||||
Loan | 18 | Wedgewood Building | 2.0% | 7,055 | 145,000 | 17,600 | 4,100 | 1,900 | ||||||||||
Loan | 19 | Kenhorst Plaza | 1.9% | Springing | 183,994 | 36,799 | 26,997 | 2,454 | 29,338 | |||||||||
Loan | 20 | Addison Town Center | 1.7% | 9,314 | 414,670 | 41,467 | 30,123 | 3,012 | 3,025 | |||||||||
Loan | 21 | A&H Olympic | 1.5% | Springing | 89,426 | 12,775 | Springing | |||||||||||
Loan | 22 | Brentwood Retail Center (35) | 1.4% | 1,314 | 68,000 | 7,930 | 27,000 | 2,500 | ||||||||||
Loan | 23 | A&H Maple Avenue | 1.4% | 2,083 | 66,046 | 8,256 | Springing | |||||||||||
Loan | 24 | BJs Montgomeryville | 1.2% | Springing | Springing | |||||||||||||
Loan | 25 | Colerain Center | 1.2% | 4,598 | 159,167 | 31,833 | 3,342 | 1,671 | 49,938 | |||||||||
Loan | 26 | Whitewater Place | 1.2% | 27,233 | 5,447 | 10,010 | 834 | |||||||||||
Loan | 27 | Brown Street Centre | 1.2% | 6,565 | 18,246 | 18,246 | 16,019 | 1,657 | 144,375 | |||||||||
Loan | 28 | Biltmore Parks Apartments | 1.1% | 325,000 | 32,500 | 30,260 | 4,323 | 25,938 | ||||||||||
Loan | 29 | Ortega Village - Retail | 1.1% | 92,090 | 8,372 | 2,287 | 1,144 | |||||||||||
Loan | 30 | Landings Shops and Offices | 0.9% | 8,518 | 97,957 | 21,768 | 2,228 | 2,228 | 17,078 | |||||||||
Property | 30.01 | Landings Shops and Offices | 0.5% | |||||||||||||||
Property | 30.02 | Progressive Properties | 0.3% | |||||||||||||||
Property | 30.03 | Kopf Offices | 0.2% | |||||||||||||||
Loan | 31 | Terraces on Second | 0.9% | 5,000 | 5,000 | 14,325 | 1,592 | |||||||||||
Loan | 32 | 75 Executive Drive (36) | 0.9% | Springing | 7,009 | 7,009 | 12,617 | 1,051 | 41,156 | |||||||||
Loan | 33 | Best Buy Boca Raton | 0.8% | 1,450 | Springing | Springing | ||||||||||||
Loan | 34 | Somerset Apartments | 0.8% | 36,396 | 6,066 | 17,644 | 5,881 | 125,688 | ||||||||||
Loan | 35 | Walgreens VA Beach | 0.8% | Springing | Springing | Springing | ||||||||||||
Loan | 36 | Holiday Inn Express & Suites Rockport | 0.8% | 66,763 | 6,069 | 18,298 | 6,099 | |||||||||||
Loan | 37 | Commons at Pembroke | 0.7% | 9,200 | 9,200 | 6,887 | 3,500 | |||||||||||
Loan | 38 | Monument Creek (36) | 0.7% | 4,030 | 1,007 | Springing | ||||||||||||
Loan | 39 | High Country Plaza | 0.7% | 2,140 | 37,336 | 3,111 | 604 | 302 | ||||||||||
Loan | 40 | Williamsburg Center | 0.7% | 5,280 | 45,000 | 12,252 | 2,976 | 1,438 | 25,003 | |||||||||
Property | 40.01 | 1734 Corporate Crossing | 0.2% | |||||||||||||||
Property | 40.02 | 1728 Corporate Crossing | 0.2% | |||||||||||||||
Property | 40.03 | 1722 Corporate Crossing | 0.1% | |||||||||||||||
Property | 40.04 | 1035 East Gate Drive | 0.1% | |||||||||||||||
Property | 40.05 | 735 Seibert Road | 0.1% | |||||||||||||||
Property | 40.06 | 703 Seibert Road | 0.0% | |||||||||||||||
Property | 40.07 | 723 Seibert Road | 0.0% | |||||||||||||||
Loan | 41 | Shops at Cardiff Ranch | 0.7% | 2,021 | 90,000 | 11,300 | 3,000 | 900 | ||||||||||
Loan | 42 | Cobblestone Court II | 0.5% | 137,242 | 15,249 | 2,689 | 2,689 | |||||||||||
Loan | 43 | Hampton Inn & Suites – Portland | 0.5% | 26,467 | 2,941 | 33,943 | 4,243 | 20,125 | ||||||||||
Loan | 44 | 40 Wall Street (33) | 0.5% | Springing | 1,515,525 | 505,175 | Springing | |||||||||||
Loan | 45 | Palisades of Bridgeport | 0.5% | 42,667 | 10,667 | 10,399 | 2,080 | 28,438 | ||||||||||
Loan | 46 | Walgreens Frisco TX | 0.4% | Springing | Springing | Springing | ||||||||||||
Loan | 47 | Walgreens-Goodwill Missouri TX | 0.4% | Springing | Springing | Springing | ||||||||||||
Loan | 48 | Warsaw Village | 0.4% | 1-24 payment dates $6,260.42 without Food Lion Extension; 1-24 payment dates $1,552.58 with Food Lion Extension; 25th payment date onwards $0 | 15,934 | 1,449 | 3,202 | 801 | 276,157 | |||||||||
Loan | 49 | Walton Shoppes | 0.4% | 2,580 | 29,678 | 5,936 | Springing | |||||||||||
Loan | 50 | Ortega Village- Pads | 0.4% | 39,181 | 3,562 | 523 | 261 | 5,675 | ||||||||||
Loan | 51 | 691 14th Street Retail | 0.4% | Springing | 25,236 | 2,294 | 1,630 | 408 | ||||||||||
Loan | 52 | Monte & Wishing Well | 0.3% | 27,215 | 6,804 | 2,415 | 483 | 10,925 | ||||||||||
Property | 52.01 | Monte Carlo MHC | 0.2% | |||||||||||||||
Property | 52.02 | Wishing Well MHP | 0.1% | |||||||||||||||
Loan | 53 | Ferndale Avenue Shoppes | 0.3% | 2,158 | 6,682 | 1,670 | Springing | |||||||||||
Loan | 54 | Courtyard Self Storage | 0.3% | 286 | 2,674 | 891 | 7,302 | 2,834 | ||||||||||
Loan | 55 | Bayonne MHP | 0.3% | 33,290 | 11,097 | 4,136 | 2,068 | 21,563 | ||||||||||
Loan | 56 | Best Western Cleveland Airport | 0.3% | 31,999 | 5,333 | 4,710 | 2,355 | |||||||||||
Loan | 57 | Eureka Crossings | 0.2% | 2,208 | 23,052 | 5,763 | Springing | |||||||||||
Loan | 58 | Family Dollar - Rose Hill (36) | 0.1% | Springing | Springing | |||||||||||||
Loan | 59 | Family Dollar - Moultrie (36) | 0.1% | Springing | Springing | |||||||||||||
Loan | 60 | Family Dollar - Biscoe (36) | 0.1% | Springing | Springing | |||||||||||||
Loan | 61 | Family Dollar - Rockingham (36) | 0.1% | Springing | Springing | |||||||||||||
Loan | 62 | Dollar General - De Soto (36) | 0.1% | 140 | 47 | Springing |
A-1-24 |
COMM 2015-LC23 | ||||||||||||
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES | ||||||||||||
% of | Upfront | Monthly | Other | |||||||||
Property | Initial Pool | Other | Other | Reserves | ||||||||
Flag | ID | Property Name | Balance | Reserves($)(27) | Reserves ($)(28)(29)(30) | Description | ||||||
Loan | 1 | Equity Inns Portfolio (33) | 8.3% | 10,000,000 | Required PIP Amount (Quarterly) | PIP Reserve (Upfront: 10,000,000; Quarterly: Required PIP Amount) | ||||||
Property | 1.01 | Homewood Suites Seattle | 1.5% | |||||||||
Property | 1.02 | Homewood Suites Orlando | 0.7% | |||||||||
Property | 1.03 | Courtyard Carlsbad | 0.5% | |||||||||
Property | 1.04 | Courtyard Houston | 0.5% | |||||||||
Property | 1.05 | Homewood Suites Stratford | 0.4% | |||||||||
Property | 1.06 | Hampton Inn Urbana | 0.4% | |||||||||
Property | 1.07 | Springhill Suites Asheville | 0.4% | |||||||||
Property | 1.08 | Hilton Garden Inn Louisville | 0.4% | |||||||||
Property | 1.09 | Hampton Inn Orlando | 0.4% | |||||||||
Property | 1.10 | Hampton Inn Austin | 0.4% | |||||||||
Property | 1.11 | Hampton Inn College Station | 0.4% | |||||||||
Property | 1.12 | Hampton Inn Indianapolis | 0.3% | |||||||||
Property | 1.13 | TownePlace Suites Savannah | 0.3% | |||||||||
Property | 1.14 | Hampton Inn East Lansing | 0.3% | |||||||||
Property | 1.15 | Hampton Inn Naperville | 0.3% | |||||||||
Property | 1.16 | Hilton Garden Inn Rio Rancho | 0.3% | |||||||||
Property | 1.17 | Courtyard Dalton | 0.2% | |||||||||
Property | 1.18 | Hampton Inn Alcoa | 0.2% | |||||||||
Property | 1.19 | Homewood Suites Augusta | 0.2% | |||||||||
Property | 1.20 | Residence Inn Jacksonville | 0.2% | |||||||||
Property | 1.21 | Hampton Inn Milford | 0.1% | |||||||||
Loan | 2 | 32 Avenue of the Americas (33)(36) | 7.3% | 1,796,381 | Free Rent Funds (Upfront: 1,796,381) | |||||||
Loan | 3 | 11 Madison Avenue (33)(34)(35) | 7.2% | 55,348,898 | Credit Suisse Sublease Payments (Upfront: 36,500,000); Sony Free Rent (Upfront: 18,847,898); Easement Fund (Upfront: 1,000) | |||||||
Loan | 4 | 1209 DeKalb (35)(36) | 4.8% | 93,227 | Prepaid Rent Reserve (Upfront: 93,227) | |||||||
Loan | 5 | Good Samaritan Medical Tower (36) | 4.4% | 1,028,474 | Free Rent (Upfront: 275,931); Suite 800 Lease Funds (Upfront: 452,542); Elevator Upgrade Funds (Upfront: 300,000); | |||||||
Loan | 6 | Harvey Building Products Portfolio (33) | 4.4% | |||||||||
Property | 6.01 | Londonderry Manufacturing | 0.8% | |||||||||
Property | 6.02 | Waltham Corporate | 0.4% | |||||||||
Property | 6.03 | Dartmouth Manufacturing | 0.4% | |||||||||
Property | 6.04 | Nashua | 0.2% | |||||||||
Property | 6.05 | West Bridgewater | 0.2% | |||||||||
Property | 6.06 | Woburn | 0.2% | |||||||||
Property | 6.07 | Manchester, NH | 0.2% | |||||||||
Property | 6.08 | New London | 0.1% | |||||||||
Property | 6.09 | East Haven | 0.1% | |||||||||
Property | 6.10 | Salem | 0.1% | |||||||||
Property | 6.11 | Bethlehem | 0.1% | |||||||||
Property | 6.12 | Lincoln | 0.1% | |||||||||
Property | 6.13 | Berlin | 0.1% | |||||||||
Property | 6.14 | Woburn CPD | 0.1% | |||||||||
Property | 6.15 | Norwalk | 0.1% | |||||||||
Property | 6.16 | Dartmouth | 0.1% | |||||||||
Property | 6.17 | Braintree | 0.1% | |||||||||
Property | 6.18 | Manchester, CT | 0.1% | |||||||||
Property | 6.19 | Portland | 0.1% | |||||||||
Property | 6.20 | Norwalk | 0.1% | |||||||||
Property | 6.21 | Warwick | 0.1% | |||||||||
Property | 6.22 | Fitchburg | 0.1% | |||||||||
Property | 6.23 | Auburn | 0.1% | |||||||||
Property | 6.24 | Portsmouth | 0.1% | |||||||||
Property | 6.25 | Southampton | 0.0% | |||||||||
Property | 6.26 | Hyannis | 0.0% | |||||||||
Property | 6.27 | Wilkes-Barre | 0.0% | |||||||||
Property | 6.28 | Berlin CPD | 0.0% | |||||||||
Property | 6.29 | Springfield | 0.0% | |||||||||
Property | 6.30 | White River Junction | 0.0% | |||||||||
Loan | 7 | Beach House Hilton Head (36) | 4.2% | 5,535,889 | Springing | Renovation Funds (Upfront: 4,877,111); Seasonal Working Capital (Upfront: 658,778, Monthly: Springing); PIP Funds (Monthly: Springing); Franchise Termination Funds (Monthly: Springing) | ||||||
Loan | 8 | Whitehall Hotel | 3.7% | 300,000 | 1/12 of 1% of annual operating income | Room Renovation Reserve (Upfront: 300,000); Capital Expense Reserve (Monthly: 1/12 of 1% of annual operating income) | ||||||
Loan | 9 | 611 Cowper | 3.4% | 1,620,000 | Springing | Free Rent (Upfront: 1,620,000); Lease Sweep Funds (Monthly: Springing); Common Charges (Monthly: Springing) | ||||||
Loan | 10 | Springfield Mall (33) | 3.4% | |||||||||
Loan | 11 | Laguna Niguel Town Center | 2.8% | Springing | Major Tenant Reserve Deposit (Monthly: Springing) | |||||||
Loan | 12 | Hacienda Gardens | 2.5% | 2,091,000 | Rent Concession Reserve (Upfront: 221,000); Earnout Reserve (Upfront: 1,870,000) | |||||||
Loan | 13 | Washington Plaza | 2.4% | |||||||||
Loan | 14 | Carrollwood Station | 2.2% | |||||||||
Loan | 15 | Murrieta Spectrum | 2.1% | 1,024,685 | Springing | Concession Reserve (Upfront: 168,994); Existing TI/LC Obligation Reserve (Upfront: 55,691); Earnout Reserve (Upfront: 800,000); Occupancy Reserve (Monthly: Springing) | ||||||
Loan | 16 | Westin Lake Mary | 2.1% | 1,452,172 | PIP Reserve (Upfront: 1,452,172) |
A-1-25 |
COMM 2015-LC23
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | Upfront | Monthly | Other | |||||||||
Property | Initial Pool | Other | Other | Reserves | ||||||||
Flag | ID | Property Name | Balance | Reserves($)(27) | Reserves ($)(28)(29)(30) | Description | ||||||
Loan | 17 | Lake Creek Festival | 2.1% | 141,365 | Springing | Free Rent (Upfront: 141,365); Lease Sweep Funds (Monthly: Springing) | ||||||
Loan | 18 | Wedgewood Building | 2.0% | Springing | Special Rollover Reserve (Monthly: Springing) | |||||||
Loan | 19 | Kenhorst Plaza | 1.9% | 810,000 | Retro Fitness Reserve (Upfront: 810,000) | |||||||
Loan | 20 | Addison Town Center | 1.7% | 276,124 | Roof Repair Reserve (Upfront: 76,280); Free Rent Reserve (Upfront: 199,884) | |||||||
Loan | 21 | A&H Olympic | 1.5% | |||||||||
Loan | 22 | Brentwood Retail Center (35) | 1.4% | Springing | Special Rollover Reserve (Monthly: Springing) | |||||||
Loan | 23 | A&H Maple Avenue | 1.4% | |||||||||
Loan | 24 | BJs Montgomeryville | 1.2% | |||||||||
Loan | 25 | Colerain Center | 1.2% | |||||||||
Loan | 26 | Whitewater Place | 1.2% | 500,000 | Performance Reserve (Upfront: 500,000) | |||||||
Loan | 27 | Brown Street Centre | 1.2% | 198,947 | Springing | Free Rent (Upfront: 93,395); MBT Holdback (Upfront: 105,552); Lease Sweep Funds (Monthly: Springing) | ||||||
Loan | 28 | Biltmore Parks Apartments | 1.1% | |||||||||
Loan | 29 | Ortega Village - Retail | 1.1% | Springing | Major Tenant Reserve Deposit (Monthly: Springing) | |||||||
Loan | 30 | Landings Shops and Offices | 0.9% | 675,000 | Springing | Kopf Builders Rollover Reserve (Monthly: Springing); Earn-Out Reserve (Upfront: 675,000) | ||||||
Property | 30.01 | Landings Shops and Offices | 0.5% | |||||||||
Property | 30.02 | Progressive Properties | 0.3% | |||||||||
Property | 30.03 | Kopf Offices | 0.2% | |||||||||
Loan | 31 | Terraces on Second | 0.9% | |||||||||
Loan | 32 | 75 Executive Drive (36) | 0.9% | 79,015 | Free Rent Reserve (Upfront: 79,015) | |||||||
Loan | 33 | Best Buy Boca Raton | 0.8% | |||||||||
Loan | 34 | Somerset Apartments | 0.8% | |||||||||
Loan | 35 | Walgreens VA Beach | 0.8% | 59,375 | Springing | Environmental Reserve Funds (Upfront: 59,375, Monthly: Springing); Lease Sweep Funds (Monthly: Springing) | ||||||
Loan | 36 | Holiday Inn Express & Suites Rockport | 0.8% | 489,000 | Springing | PIP Reserve (Upfront: 379,000); Seasonality Reserve (Upfront: 110,000; Monthly: Springing) | ||||||
Loan | 37 | Commons at Pembroke | 0.7% | |||||||||
Loan | 38 | Monument Creek (36) | 0.7% | |||||||||
Loan | 39 | High Country Plaza | 0.7% | Springing | Major Tenant Reserve Deposit (Monthly: Springing) | |||||||
Loan | 40 | Williamsburg Center | 0.7% | 50,000 | Springing | Operating Reserve (Upfront: $50,000); Special Rollover Reserve (Monthly: Springing) | ||||||
Property | 40.01 | 1734 Corporate Crossing | 0.2% | |||||||||
Property | 40.02 | 1728 Corporate Crossing | 0.2% | |||||||||
Property | 40.03 | 1722 Corporate Crossing | 0.1% | |||||||||
Property | 40.04 | 1035 East Gate Drive | 0.1% | |||||||||
Property | 40.05 | 735 Seibert Road | 0.1% | |||||||||
Property | 40.06 | 703 Seibert Road | 0.0% | |||||||||
Property | 40.07 | 723 Seibert Road | 0.0% | |||||||||
Loan | 41 | Shops at Cardiff Ranch | 0.7% | 711,800 | Springing | Outstanding Tenant Improvement Reserve (Upfront: 711,800); Special Rollover Reserve (Monthly Springing: Excess Cash Flow) | ||||||
Loan | 42 | Cobblestone Court II | 0.5% | |||||||||
Loan | 43 | Hampton Inn & Suites – Portland | 0.5% | 1,030,000 | Springing | Seasonality Reserve (Upfront: 30,000; Monthly: Springing); PIP Reserve (Upfront: 1,000,000) | ||||||
Loan | 44 | 40 Wall Street (33) | 0.5% | 815,226 | Springing | Payment Reserve (Upfront: 815,226); Ground Rent Funds (Monthly: Springing) | ||||||
Loan | 45 | Palisades of Bridgeport | 0.5% | |||||||||
Loan | 46 | Walgreens Frisco TX | 0.4% | Springing | Lease Sweep Funds (Monthly: Springing) | |||||||
Loan | 47 | Walgreens-Goodwill Missouri TX | 0.4% | Springing | Lease Sweep Funds (Monthly: Springing) | |||||||
Loan | 48 | Warsaw Village | 0.4% | |||||||||
Loan | 49 | Walton Shoppes | 0.4% | Springing | Condominium Assessment Funds (Monthly: Springing) | |||||||
Loan | 50 | Ortega Village- Pads | 0.4% | Springing | Major Tenant Reserve Deposit (Monthly: Springing) | |||||||
Loan | 51 | 691 14th Street Retail | 0.4% | 500,000 | Springing | Occupancy Reserve (Upfront: 500,000); Special Rollover Reserve (Monthly Springing: Excess Cash Flow) | ||||||
Loan | 52 | Monte & Wishing Well | 0.3% | |||||||||
Property | 52.01 | Monte Carlo MHC | 0.2% | |||||||||
Property | 52.02 | Wishing Well MHP | 0.1% | |||||||||
Loan | 53 | Ferndale Avenue Shoppes | 0.3% | |||||||||
Loan | 54 | Courtyard Self Storage | 0.3% | |||||||||
Loan | 55 | Bayonne MHP | 0.3% | |||||||||
Loan | 56 | Best Western Cleveland Airport | 0.3% | 249,000 | Springing | PIP Reserve (Upfront: 230,000); Seasonality Reserve (Upfront: 19,000) | ||||||
Loan | 57 | Eureka Crossings | 0.2% | Springing | Lease Sweep Funds (Monthly: Springing) | |||||||
Loan | 58 | Family Dollar - Rose Hill (36) | 0.1% | |||||||||
Loan | 59 | Family Dollar - Moultrie (36) | 0.1% | |||||||||
Loan | 60 | Family Dollar - Biscoe (36) | 0.1% | |||||||||
Loan | 61 | Family Dollar - Rockingham (36) | 0.1% | |||||||||
Loan | 62 | Dollar General - De Soto (36) | 0.1% |
A-1-26 |
COMM 2015-LC23 | ||||||||||||
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES | ||||||||||||
% of | Environmental | |||||||||||
Property | Initial Pool | Report | Engineering | Loan | ||||||||
Flag | ID | Property Name | Balance | Date (32) | Report Date | Purpose | ||||||
Loan | 1 | Equity Inns Portfolio (33) | 8.3% | Refinance | ||||||||
Property | 1.01 | Homewood Suites Seattle | 1.5% | 08/25/2015 | 08/26/2015 | |||||||
Property | 1.02 | Homewood Suites Orlando | 0.7% | 08/25/2015 | 08/26/2015 | |||||||
Property | 1.03 | Courtyard Carlsbad | 0.5% | 08/25/2015 | 08/25/2015 | |||||||
Property | 1.04 | Courtyard Houston | 0.5% | 08/26/2015 | 08/20/2015 | |||||||
Property | 1.05 | Homewood Suites Stratford | 0.4% | 08/25/2015 | 08/26/2015 | |||||||
Property | 1.06 | Hampton Inn Urbana | 0.4% | 08/26/2015 | 08/28/2015 | |||||||
Property | 1.07 | Springhill Suites Asheville | 0.4% | 08/25/2015 | 08/26/2015 | |||||||
Property | 1.08 | Hilton Garden Inn Louisville | 0.4% | 08/25/2015 | 08/26/2015 | |||||||
Property | 1.09 | Hampton Inn Orlando | 0.4% | 08/24/2015 | 08/26/2015 | |||||||
Property | 1.10 | Hampton Inn Austin | 0.4% | 08/26/2015 | 08/28/2015 | |||||||
Property | 1.11 | Hampton Inn College Station | 0.4% | 08/26/2015 | 08/26/2015 | |||||||
Property | 1.12 | Hampton Inn Indianapolis | 0.3% | 08/26/2015 | 08/26/2015 | |||||||
Property | 1.13 | TownePlace Suites Savannah | 0.3% | 08/25/2015 | 08/26/2015 | |||||||
Property | 1.14 | Hampton Inn East Lansing | 0.3% | 08/26/2015 | 08/25/2015 | |||||||
Property | 1.15 | Hampton Inn Naperville | 0.3% | 08/26/2015 | 08/25/2015 | |||||||
Property | 1.16 | Hilton Garden Inn Rio Rancho | 0.3% | 08/26/2015 | 08/26/2015 | |||||||
Property | 1.17 | Courtyard Dalton | 0.2% | 08/25/2015 | 08/25/2015 | |||||||
Property | 1.18 | Hampton Inn Alcoa | 0.2% | 08/24/2015 | 08/26/2015 | |||||||
Property | 1.19 | Homewood Suites Augusta | 0.2% | 08/25/2015 | 08/20/2015 | |||||||
Property | 1.20 | Residence Inn Jacksonville | 0.2% | 08/25/2015 | 08/26/2015 | |||||||
Property | 1.21 | Hampton Inn Milford | 0.1% | 08/26/2015 | 08/26/2015 | |||||||
Loan | 2 | 32 Avenue of the Americas (33)(36) | 7.3% | 08/04/2015 | 08/04/2015 | Refinance | ||||||
Loan | 3 | 11 Madison Avenue (33)(34)(35) | 7.2% | 04/30/2015 | 04/30/2015 | Acquisition | ||||||
Loan | 4 | 1209 DeKalb (35)(36) | 4.8% | 08/21/2015 | 08/24/2015 | Refinance | ||||||
Loan | 5 | Good Samaritan Medical Tower (36) | 4.4% | 09/03/2015 | 07/28/2015 | Refinance | ||||||
Loan | 6 | Harvey Building Products Portfolio (33) | 4.4% | Acquisition | ||||||||
Property | 6.01 | Londonderry Manufacturing | 0.8% | 09/10/2015 | 09/18/2015 | |||||||
Property | 6.02 | Waltham Corporate | 0.4% | 09/14/2015 | 09/18/2015 | |||||||
Property | 6.03 | Dartmouth Manufacturing | 0.4% | 09/10/2015 | 09/18/2015 | |||||||
Property | 6.04 | Nashua | 0.2% | 09/14/2015 | 09/18/2015 | |||||||
Property | 6.05 | West Bridgewater | 0.2% | 09/11/2015 | 09/18/2015 | |||||||
Property | 6.06 | Woburn | 0.2% | 09/11/2015 | 09/18/2015 | |||||||
Property | 6.07 | Manchester, NH | 0.2% | 09/09/2015 | 09/18/2015 | |||||||
Property | 6.08 | New London | 0.1% | 09/14/2015 | 09/18/2015 | |||||||
Property | 6.09 | East Haven | 0.1% | 09/10/2015 | 09/18/2015 | |||||||
Property | 6.10 | Salem | 0.1% | 09/14/2015 | 09/18/2015 | |||||||
Property | 6.11 | Bethlehem | 0.1% | 09/14/2015 | 09/18/2015 | |||||||
Property | 6.12 | Lincoln | 0.1% | 09/14/2015 | 09/18/2015 | |||||||
Property | 6.13 | Berlin | 0.1% | 09/14/2015 | 09/18/2015 | |||||||
Property | 6.14 | Woburn CPD | 0.1% | 09/11/2015 | 09/17/2015 | |||||||
Property | 6.15 | Norwalk | 0.1% | 09/14/2015 | 09/18/2015 | |||||||
Property | 6.16 | Dartmouth | 0.1% | 09/14/2015 | 09/18/2015 | |||||||
Property | 6.17 | Braintree | 0.1% | 09/14/2015 | 09/18/2015 | |||||||
Property | 6.18 | Manchester, CT | 0.1% | 09/14/2015 | 09/18/2015 | |||||||
Property | 6.19 | Portland | 0.1% | 09/16/2015 | 09/18/2015 | |||||||
Property | 6.20 | Norwalk | 0.1% | 09/14/2015 | 09/17/2015 | |||||||
Property | 6.21 | Warwick | 0.1% | 09/11/2015 | 09/18/2015 | |||||||
Property | 6.22 | Fitchburg | 0.1% | 09/14/2015 | 09/18/2015 | |||||||
Property | 6.23 | Auburn | 0.1% | 09/14/2015 | 09/18/2015 | |||||||
Property | 6.24 | Portsmouth | 0.1% | 09/14/2015 | 09/18/2015 | |||||||
Property | 6.25 | Southampton | 0.0% | 09/14/2015 | 09/18/2015 | |||||||
Property | 6.26 | Hyannis | 0.0% | 09/11/2015 | 09/18/2015 | |||||||
Property | 6.27 | Wilkes-Barre | 0.0% | 09/11/2015 | 09/17/2015 | |||||||
Property | 6.28 | Berlin CPD | 0.0% | 09/14/2015 | 09/17/2015 | |||||||
Property | 6.29 | Springfield | 0.0% | 09/11/2015 | 09/18/2015 | |||||||
Property | 6.30 | White River Junction | 0.0% | 09/11/2015 | 09/18/2015 | |||||||
Loan | 7 | Beach House Hilton Head (36) | 4.2% | 08/24/2015 | 09/01/2015 | Acquisition | ||||||
Loan | 8 | Whitehall Hotel | 3.7% | 09/08/2015 | 09/01/2015 | Refinance | ||||||
Loan | 9 | 611 Cowper | 3.4% | 06/05/2015 | 07/13/2015 | Refinance | ||||||
Loan | 10 | Springfield Mall (33) | 3.4% | 09/09/2015 | 08/18/2015 | Refinance | ||||||
Loan | 11 | Laguna Niguel Town Center | 2.8% | 08/28/2015 | 06/12/2015 | Refinance | ||||||
Loan | 12 | Hacienda Gardens | 2.5% | 07/27/2015 | 07/24/2015 | Refinance | ||||||
Loan | 13 | Washington Plaza | 2.4% | 07/30/2015 | 07/30/2015 | Refinance | ||||||
Loan | 14 | Carrollwood Station | 2.2% | 08/18/2015 | 08/18/2015 | Acquisition | ||||||
Loan | 15 | Murrieta Spectrum | 2.1% | 10/06/2015 | 08/10/2015 | Refinance | ||||||
Loan | 16 | Westin Lake Mary | 2.1% | 06/26/2015 | 06/26/2015 | Refinance |
A-1-27 |
COMM 2015-LC23
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | Environmental | |||||||||||
Property | Initial Pool | Report | Engineering | Loan | ||||||||
Flag | ID | Property Name | Balance | Date (32) | Report Date | Purpose | ||||||
Loan | 17 | Lake Creek Festival | 2.1% | 07/15/2015 | 07/14/2015 | Refinance | ||||||
Loan | 18 | Wedgewood Building | 2.0% | 08/19/2015 | 08/21/2015 | Refinance | ||||||
Loan | 19 | Kenhorst Plaza | 1.9% | 08/24/2015 | 07/29/2015 | Acquisition | ||||||
Loan | 20 | Addison Town Center | 1.7% | 07/18/2015 | 07/17/2015 | Refinance | ||||||
Loan | 21 | A&H Olympic | 1.5% | 06/10/2015 | 06/10/2015 | Refinance | ||||||
Loan | 22 | Brentwood Retail Center (35) | 1.4% | 08/06/2015 | 07/28/2015 | Recapitalization | ||||||
Loan | 23 | A&H Maple Avenue | 1.4% | 06/10/2015 | 06/10/2015 | Refinance | ||||||
Loan | 24 | BJs Montgomeryville | 1.2% | 08/10/2015 | 08/07/2015 | Refinance | ||||||
Loan | 25 | Colerain Center | 1.2% | 09/02/2015 | 06/11/2015 | Acquisition | ||||||
Loan | 26 | Whitewater Place | 1.2% | 09/25/2015 | 09/25/2015 | Refinance | ||||||
Loan | 27 | Brown Street Centre | 1.2% | 04/22/2015 | 04/22/2015 | Refinance | ||||||
Loan | 28 | Biltmore Parks Apartments | 1.1% | 09/14/2015 | 09/03/2015 | Refinance | ||||||
Loan | 29 | Ortega Village - Retail | 1.1% | 06/11/2015 | 06/10/2015 | Refinance | ||||||
Loan | 30 | Landings Shops and Offices | 0.9% | Refinance | ||||||||
Property | 30.01 | Landings Shops and Offices | 0.5% | 06/09/2015 | 05/22/2015 | |||||||
Property | 30.02 | Progressive Properties | 0.3% | 05/27/2015 | 05/22/2015 | |||||||
Property | 30.03 | Kopf Offices | 0.2% | 07/27/2015 | 05/22/2015 | |||||||
Loan | 31 | Terraces on Second | 0.9% | 08/24/2015 | 08/21/2015 | Refinance | ||||||
Loan | 32 | 75 Executive Drive (36) | 0.9% | 07/02/2015 | 07/03/2015 | Refinance | ||||||
Loan | 33 | Best Buy Boca Raton | 0.8% | 09/01/2015 | 09/01/2015 | Acquisition | ||||||
Loan | 34 | Somerset Apartments | 0.8% | 09/17/2015 | 09/17/2015 | Refinance | ||||||
Loan | 35 | Walgreens VA Beach | 0.8% | 08/13/2015 | 07/29/2015 | Acquisition | ||||||
Loan | 36 | Holiday Inn Express & Suites Rockport | 0.8% | 07/16/2015 | 07/14/2015 | Refinance | ||||||
Loan | 37 | Commons at Pembroke | 0.7% | 08/18/2015 | 08/17/2015 | Acquisition | ||||||
Loan | 38 | Monument Creek (36) | 0.7% | 08/13/2015 | 08/13/2015 | Acquisition | ||||||
Loan | 39 | High Country Plaza | 0.7% | 06/05/2015 | 06/05/2015 | Refinance | ||||||
Loan | 40 | Williamsburg Center | 0.7% | Refinance | ||||||||
Property | 40.01 | 1734 Corporate Crossing | 0.2% | 07/30/2015 | 07/30/2015 | |||||||
Property | 40.02 | 1728 Corporate Crossing | 0.2% | 07/30/2015 | 07/30/2015 | |||||||
Property | 40.03 | 1722 Corporate Crossing | 0.1% | 07/30/2015 | 07/30/2015 | |||||||
Property | 40.04 | 1035 East Gate Drive | 0.1% | 07/27/2015 | 07/28/2015 | |||||||
Property | 40.05 | 735 Seibert Road | 0.1% | 07/30/2015 | 07/29/2015 | |||||||
Property | 40.06 | 703 Seibert Road | 0.0% | 07/30/2015 | 07/29/2015 | |||||||
Property | 40.07 | 723 Seibert Road | 0.0% | 07/30/2015 | 07/29/2015 | |||||||
Loan | 41 | Shops at Cardiff Ranch | 0.7% | 08/17/2015 | 08/14/2015 | Refinance | ||||||
Loan | 42 | Cobblestone Court II | 0.5% | 07/15/2015 | 07/14/2015 | Refinance | ||||||
Loan | 43 | Hampton Inn & Suites – Portland | 0.5% | 07/07/2015 | 07/06/2015 | Acquisition | ||||||
Loan | 44 | 40 Wall Street (33) | 0.5% | 06/03/2015 | 05/28/2015 | Refinance | ||||||
Loan | 45 | Palisades of Bridgeport | 0.5% | 09/17/2015 | 07/28/2015 | Refinance | ||||||
Loan | 46 | Walgreens Frisco TX | 0.4% | 07/22/2015 | 07/28/2015 | Refinance | ||||||
Loan | 47 | Walgreens-Goodwill Missouri TX | 0.4% | 07/20/2015 | 07/20/2015 | Refinance | ||||||
Loan | 48 | Warsaw Village | 0.4% | 08/19/2015 | 08/14/2015 | Refinance | ||||||
Loan | 49 | Walton Shoppes | 0.4% | 08/03/2015 | 07/31/2015 | Recapitalization | ||||||
Loan | 50 | Ortega Village- Pads | 0.4% | 06/11/2015 | 06/10/2015 | Refinance | ||||||
Loan | 51 | 691 14th Street Retail | 0.4% | 06/05/2015 | 05/07/2015 | Refinance | ||||||
Loan | 52 | Monte & Wishing Well | 0.3% | Refinance | ||||||||
Property | 52.01 | Monte Carlo MHC | 0.2% | 05/21/2015 | 05/20/2015 | |||||||
Property | 52.02 | Wishing Well MHP | 0.1% | 05/22/2015 | 05/20/2015 | |||||||
Loan | 53 | Ferndale Avenue Shoppes | 0.3% | 07/31/2015 | 07/29/2015 | Refinance | ||||||
Loan | 54 | Courtyard Self Storage | 0.3% | 09/17/2015 | 08/24/2015 | Refinance | ||||||
Loan | 55 | Bayonne MHP | 0.3% | 07/01/2015 | 07/01/2015 | Refinance | ||||||
Loan | 56 | Best Western Cleveland Airport | 0.3% | 08/24/2015 | 08/14/2015 | Acquisition | ||||||
Loan | 57 | Eureka Crossings | 0.2% | 07/30/2015 | 09/08/2015 | Refinance | ||||||
Loan | 58 | Family Dollar - Rose Hill (36) | 0.1% | 05/18/2015 | 05/18/2015 | Acquisition | ||||||
Loan | 59 | Family Dollar - Moultrie (36) | 0.1% | 05/19/2015 | 05/17/2015 | Acquisition | ||||||
Loan | 60 | Family Dollar - Biscoe (36) | 0.1% | 05/19/2015 | 05/18/2015 | Acquisition | ||||||
Loan | 61 | Family Dollar - Rockingham (36) | 0.1% | 05/18/2015 | 05/14/2015 | Acquisition | ||||||
Loan | 62 | Dollar General - De Soto (36) | 0.1% | 08/14/2015 | 08/17/2015 | Acquisition |
A-1-28 |
COMM 2015-LC23 | ||||||||
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES | ||||||||
% of | ||||||||
Property | Initial Pool | |||||||
Flag | ID | Property Name | Balance | Sponsor (26) | ||||
Loan | 1 | Equity Inns Portfolio (33) | 8.3% | American Realty Capital Hospitality Trust, Inc. | ||||
Property | 1.01 | Homewood Suites Seattle | 1.5% | |||||
Property | 1.02 | Homewood Suites Orlando | 0.7% | |||||
Property | 1.03 | Courtyard Carlsbad | 0.5% | |||||
Property | 1.04 | Courtyard Houston | 0.5% | |||||
Property | 1.05 | Homewood Suites Stratford | 0.4% | |||||
Property | 1.06 | Hampton Inn Urbana | 0.4% | |||||
Property | 1.07 | Springhill Suites Asheville | 0.4% | |||||
Property | 1.08 | Hilton Garden Inn Louisville | 0.4% | |||||
Property | 1.09 | Hampton Inn Orlando | 0.4% | |||||
Property | 1.10 | Hampton Inn Austin | 0.4% | |||||
Property | 1.11 | Hampton Inn College Station | 0.4% | |||||
Property | 1.12 | Hampton Inn Indianapolis | 0.3% | |||||
Property | 1.13 | TownePlace Suites Savannah | 0.3% | |||||
Property | 1.14 | Hampton Inn East Lansing | 0.3% | |||||
Property | 1.15 | Hampton Inn Naperville | 0.3% | |||||
Property | 1.16 | Hilton Garden Inn Rio Rancho | 0.3% | |||||
Property | 1.17 | Courtyard Dalton | 0.2% | |||||
Property | 1.18 | Hampton Inn Alcoa | 0.2% | |||||
Property | 1.19 | Homewood Suites Augusta | 0.2% | |||||
Property | 1.20 | Residence Inn Jacksonville | 0.2% | |||||
Property | 1.21 | Hampton Inn Milford | 0.1% | |||||
Loan | 2 | 32 Avenue of the Americas (33)(36) | 7.3% | Jack Rudin; William C. Rudin; Eric C. Rudin; Beth Rudin DeWoody | ||||
Loan | 3 | 11 Madison Avenue (33)(34)(35) | 7.2% | SL Green Realty Corp. | ||||
Loan | 4 | 1209 DeKalb (35)(36) | 4.8% | Joshua Crane, Robert Schwartz | ||||
Loan | 5 | Good Samaritan Medical Tower (36) | 4.4% | Edward G. Hudson | ||||
Loan | 6 | Harvey Building Products Portfolio (33) | 4.4% | Dunes Point Capital | ||||
Property | 6.01 | Londonderry Manufacturing | 0.8% | |||||
Property | 6.02 | Waltham Corporate | 0.4% | |||||
Property | 6.03 | Dartmouth Manufacturing | 0.4% | |||||
Property | 6.04 | Nashua | 0.2% | |||||
Property | 6.05 | West Bridgewater | 0.2% | |||||
Property | 6.06 | Woburn | 0.2% | |||||
Property | 6.07 | Manchester, NH | 0.2% | |||||
Property | 6.08 | New London | 0.1% | |||||
Property | 6.09 | East Haven | 0.1% | |||||
Property | 6.10 | Salem | 0.1% | |||||
Property | 6.11 | Bethlehem | 0.1% | |||||
Property | 6.12 | Lincoln | 0.1% | |||||
Property | 6.13 | Berlin | 0.1% | |||||
Property | 6.14 | Woburn CPD | 0.1% | |||||
Property | 6.15 | Norwalk | 0.1% | |||||
Property | 6.16 | Dartmouth | 0.1% | |||||
Property | 6.17 | Braintree | 0.1% | |||||
Property | 6.18 | Manchester, CT | 0.1% | |||||
Property | 6.19 | Portland | 0.1% | |||||
Property | 6.20 | Norwalk | 0.1% | |||||
Property | 6.21 | Warwick | 0.1% | |||||
Property | 6.22 | Fitchburg | 0.1% | |||||
Property | 6.23 | Auburn | 0.1% | |||||
Property | 6.24 | Portsmouth | 0.1% | |||||
Property | 6.25 | Southampton | 0.0% | |||||
Property | 6.26 | Hyannis | 0.0% | |||||
Property | 6.27 | Wilkes-Barre | 0.0% | |||||
Property | 6.28 | Berlin CPD | 0.0% | |||||
Property | 6.29 | Springfield | 0.0% | |||||
Property | 6.30 | White River Junction | 0.0% | |||||
Loan | 7 | Beach House Hilton Head (36) | 4.2% | Mark Mance; Simon Hallgarten; David Zeuske; Matthew Trevenen | ||||
Loan | 8 | Whitehall Hotel | 3.7% | Su-Mei Yen; Hui-Hsien Bert Yen | ||||
Loan | 9 | 611 Cowper | 3.4% | Stephen Reller; Mark Moragne | ||||
Loan | 10 | Springfield Mall (33) | 3.4% | PREIT Associates, L.P.; Simon Property Group, L.P. | ||||
Loan | 11 | Laguna Niguel Town Center | 2.8% | Robert F. Buie; Robert F. Buie, as Trustee of the Robert F. Buie and Pamela I. Buie Family Trust Under Trust Agreement; Jeffry L. Stoddard; Jeffry L. Stoddard, as Trustee of the Jeff and Kris Stoddard Living Trust | ||||
Loan | 12 | Hacienda Gardens | 2.5% | Michael T. LaBarbera; Robert B. Facchino, II | ||||
Loan | 13 | Washington Plaza | 2.4% | Dennis Needleman | ||||
Loan | 14 | Carrollwood Station | 2.2% | LMA Limited Partnership; Glider LLC | ||||
Loan | 15 | Murrieta Spectrum | 2.1% | Steve ChengChe Chou; TsuHo Lee | ||||
Loan | 16 | Westin Lake Mary | 2.1% | Mohana R. Velagapudi; K. Rao Yedla; Srinath R. Yedla; Satya N. Yedla |
A-1-29 |
COMM 2015-LC23
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | ||||||||
Property | Initial Pool | |||||||
Flag | ID | Property Name | Balance | Sponsor (26) | ||||
Loan | 17 | Lake Creek Festival | 2.1% | William Bernstein Qualified Terminable Interest Property Trust; RBC Miller Brothers Trust; Richard Miller; Craig Miller; Barton Miller | ||||
Loan | 18 | Wedgewood Building | 2.0% | Gregory L. Geiser; David R. Wehrly; Darin Puhl | ||||
Loan | 19 | Kenhorst Plaza | 1.9% | Paul Sub | ||||
Loan | 20 | Addison Town Center | 1.7% | Herbert D. Weitzman | ||||
Loan | 21 | A&H Olympic | 1.5% | Moshe Aflalo; Efrem Harkham; Uri Harkham | ||||
Loan | 22 | Brentwood Retail Center (35) | 1.4% | Bryan Gordon | ||||
Loan | 23 | A&H Maple Avenue | 1.4% | Moshe Aflalo; Efrem Harkham; Uri Harkham | ||||
Loan | 24 | BJs Montgomeryville | 1.2% | Richard Birdoff | ||||
Loan | 25 | Colerain Center | 1.2% | Bryan Berkett; David Rifkind | ||||
Loan | 26 | Whitewater Place | 1.2% | David M. Conwill; Steven B. Kimmelman; Keith Ritz; Steven B. Kimmelman as Trustee of The Jerome Kimmelman Gift Trust; Keith Ritz as Trustee of The Sanford L. Ritz Gift Trust | ||||
Loan | 27 | Brown Street Centre | 1.2% | Todd Mooney | ||||
Loan | 28 | Biltmore Parks Apartments | 1.1% | Alan J. Hayman | ||||
Loan | 29 | Ortega Village - Retail | 1.1% | Robert F. Buie; Robert F. Buie, as Trustee of the Robert F. Buie and Pamela I. Buie Family Trust Under Trust Agreement; Jeffry L. Stoddard, as Trustee of the Jeff and Kris Stoddard Living Trust | ||||
Loan | 30 | Landings Shops and Offices | 0.9% | Herman R. Kopf Revocable Trust Dated January 5, 2006; Herman R. Kopf | ||||
Property | 30.01 | Landings Shops and Offices | 0.5% | |||||
Property | 30.02 | Progressive Properties | 0.3% | |||||
Property | 30.03 | Kopf Offices | 0.2% | |||||
Loan | 31 | Terraces on Second | 0.9% | Rodney Poole | ||||
Loan | 32 | 75 Executive Drive (36) | 0.9% | Andrew J. Segal | ||||
Loan | 33 | Best Buy Boca Raton | 0.8% | Gittel Bausk | ||||
Loan | 34 | Somerset Apartments | 0.8% | David Burns, Debra Dout | ||||
Loan | 35 | Walgreens VA Beach | 0.8% | Joseph Plotnick; Chris Steiner; Howard Hertz; Jeffrey Leibovitz; Darryl Stineman; John Hobson | ||||
Loan | 36 | Holiday Inn Express & Suites Rockport | 0.8% | Kanti Bhakta; Divyeshbhai Bhakta; Satish Patel; Raju Bhagat | ||||
Loan | 37 | Commons at Pembroke | 0.7% | Nasser Ahmad; Cyrus Boga | ||||
Loan | 38 | Monument Creek (36) | 0.7% | Ross H. Partrich | ||||
Loan | 39 | High Country Plaza | 0.7% | Robert F. Buie; Robert F. Buie, as Trustee of the Robert F. Buie and Pamela I. Buie Family Trust Under Trust Agreement; Jeffry L. Stoddard, as Trustee of the Jeff and Kris Stoddard Living Trust | ||||
Loan | 40 | Williamsburg Center | 0.7% | Robert G. Wolfe | ||||
Property | 40.01 | 1734 Corporate Crossing | 0.2% | |||||
Property | 40.02 | 1728 Corporate Crossing | 0.2% | |||||
Property | 40.03 | 1722 Corporate Crossing | 0.1% | |||||
Property | 40.04 | 1035 East Gate Drive | 0.1% | |||||
Property | 40.05 | 735 Seibert Road | 0.1% | |||||
Property | 40.06 | 703 Seibert Road | 0.0% | |||||
Property | 40.07 | 723 Seibert Road | 0.0% | |||||
Loan | 41 | Shops at Cardiff Ranch | 0.7% | Randall D. Keith | ||||
Loan | 42 | Cobblestone Court II | 0.5% | Louis J. Masi; Mary Louise Szefc | ||||
Loan | 43 | Hampton Inn & Suites – Portland | 0.5% | Mahavir Bhagat; Vilina Bhagat | ||||
Loan | 44 | 40 Wall Street (33) | 0.5% | Donald J. Trump | ||||
Loan | 45 | Palisades of Bridgeport | 0.5% | Wilfredo Santos | ||||
Loan | 46 | Walgreens Frisco TX | 0.4% | Michael D. Gorge | ||||
Loan | 47 | Walgreens-Goodwill Missouri TX | 0.4% | Michael D. Gorge | ||||
Loan | 48 | Warsaw Village | 0.4% | William R. Elliott; Thomas E. Messier | ||||
Loan | 49 | Walton Shoppes | 0.4% | Nisreen Jonna; Jordan Jonna; Scott Jonna | ||||
Loan | 50 | Ortega Village- Pads | 0.4% | Robert F. Buie; Robert F. Buie, as Trustee of the Robert F. Buie and Pamela I. Buie Family Trust Under Trust Agreement; Jeffry L. Stoddard, as Trustee of the Jeff and Kris Stoddard Living Trust | ||||
Loan | 51 | 691 14th Street Retail | 0.4% | J. Christopher Faussemagne; Michael Millett | ||||
Loan | 52 | Monte & Wishing Well | 0.3% | Jeffrey N. Cohen; Dennis S. Cohen | ||||
Property | 52.01 | Monte Carlo MHC | 0.2% | |||||
Property | 52.02 | Wishing Well MHP | 0.1% | |||||
Loan | 53 | Ferndale Avenue Shoppes | 0.3% | Jordan Jonna; Scott Jonna | ||||
Loan | 54 | Courtyard Self Storage | 0.3% | Edward P. McKenzie | ||||
Loan | 55 | Bayonne MHP | 0.3% | Min Kim | ||||
Loan | 56 | Best Western Cleveland Airport | 0.3% | Anand Bhakta | ||||
Loan | 57 | Eureka Crossings | 0.2% | Nisreen Jonna; Jordan Jonna; Scott Jonna | ||||
Loan | 58 | Family Dollar - Rose Hill (36) | 0.1% | Ladder Capital CRE Equity LLC | ||||
Loan | 59 | Family Dollar - Moultrie (36) | 0.1% | Ladder Capital CRE Equity LLC | ||||
Loan | 60 | Family Dollar - Biscoe (36) | 0.1% | Ladder Capital CRE Equity LLC | ||||
Loan | 61 | Family Dollar - Rockingham (36) | 0.1% | Ladder Capital CRE Equity LLC | ||||
Loan | 62 | Dollar General - De Soto (36) | 0.1% | Ladder Capital CRE Equity LLC |
A-1-30 |
COMM 2015-LC23 | ||||||||
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES | ||||||||
% of | ||||||||
Property | Initial Pool | |||||||
Flag | ID | Property Name | Balance | Guarantor | ||||
Loan | 1 | Equity Inns Portfolio (33) | 8.3% | American Realty Capital Hospitality Trust, Inc. | ||||
Property | 1.01 | Homewood Suites Seattle | 1.5% | |||||
Property | 1.02 | Homewood Suites Orlando | 0.7% | |||||
Property | 1.03 | Courtyard Carlsbad | 0.5% | |||||
Property | 1.04 | Courtyard Houston | 0.5% | |||||
Property | 1.05 | Homewood Suites Stratford | 0.4% | |||||
Property | 1.06 | Hampton Inn Urbana | 0.4% | |||||
Property | 1.07 | Springhill Suites Asheville | 0.4% | |||||
Property | 1.08 | Hilton Garden Inn Louisville | 0.4% | |||||
Property | 1.09 | Hampton Inn Orlando | 0.4% | |||||
Property | 1.10 | Hampton Inn Austin | 0.4% | |||||
Property | 1.11 | Hampton Inn College Station | 0.4% | |||||
Property | 1.12 | Hampton Inn Indianapolis | 0.3% | |||||
Property | 1.13 | TownePlace Suites Savannah | 0.3% | |||||
Property | 1.14 | Hampton Inn East Lansing | 0.3% | |||||
Property | 1.15 | Hampton Inn Naperville | 0.3% | |||||
Property | 1.16 | Hilton Garden Inn Rio Rancho | 0.3% | |||||
Property | 1.17 | Courtyard Dalton | 0.2% | |||||
Property | 1.18 | Hampton Inn Alcoa | 0.2% | |||||
Property | 1.19 | Homewood Suites Augusta | 0.2% | |||||
Property | 1.20 | Residence Inn Jacksonville | 0.2% | |||||
Property | 1.21 | Hampton Inn Milford | 0.1% | |||||
Loan | 2 | 32 Avenue of the Americas (33)(36) | 7.3% | NAP | ||||
Loan | 3 | 11 Madison Avenue (33)(34)(35) | 7.2% | SL Green Realty Corp. | ||||
Loan | 4 | 1209 DeKalb (35)(36) | 4.8% | Joshua Crane, Robert Schwartz | ||||
Loan | 5 | Good Samaritan Medical Tower (36) | 4.4% | Edward G. Hudson | ||||
Loan | 6 | Harvey Building Products Portfolio (33) | 4.4% | Harvey Parent Corporation | ||||
Property | 6.01 | Londonderry Manufacturing | 0.8% | |||||
Property | 6.02 | Waltham Corporate | 0.4% | |||||
Property | 6.03 | Dartmouth Manufacturing | 0.4% | |||||
Property | 6.04 | Nashua | 0.2% | |||||
Property | 6.05 | West Bridgewater | 0.2% | |||||
Property | 6.06 | Woburn | 0.2% | |||||
Property | 6.07 | Manchester, NH | 0.2% | |||||
Property | 6.08 | New London | 0.1% | |||||
Property | 6.09 | East Haven | 0.1% | |||||
Property | 6.10 | Salem | 0.1% | |||||
Property | 6.11 | Bethlehem | 0.1% | |||||
Property | 6.12 | Lincoln | 0.1% | |||||
Property | 6.13 | Berlin | 0.1% | |||||
Property | 6.14 | Woburn CPD | 0.1% | |||||
Property | 6.15 | Norwalk | 0.1% | |||||
Property | 6.16 | Dartmouth | 0.1% | |||||
Property | 6.17 | Braintree | 0.1% | |||||
Property | 6.18 | Manchester, CT | 0.1% | |||||
Property | 6.19 | Portland | 0.1% | |||||
Property | 6.20 | Norwalk | 0.1% | |||||
Property | 6.21 | Warwick | 0.1% | |||||
Property | 6.22 | Fitchburg | 0.1% | |||||
Property | 6.23 | Auburn | 0.1% | |||||
Property | 6.24 | Portsmouth | 0.1% | |||||
Property | 6.25 | Southampton | 0.0% | |||||
Property | 6.26 | Hyannis | 0.0% | |||||
Property | 6.27 | Wilkes-Barre | 0.0% | |||||
Property | 6.28 | Berlin CPD | 0.0% | |||||
Property | 6.29 | Springfield | 0.0% | |||||
Property | 6.30 | White River Junction | 0.0% | |||||
Loan | 7 | Beach House Hilton Head (36) | 4.2% | Mark Mance; Simon Hallgarten; David Zeuske; Matthew Trevenen | ||||
Loan | 8 | Whitehall Hotel | 3.7% | Su-Mei Yen; Hui-Hsien Bert Yen | ||||
Loan | 9 | 611 Cowper | 3.4% | Stephen Reller; Mark Moragne | ||||
Loan | 10 | Springfield Mall (33) | 3.4% | PREIT Associates, L.P.; Simon Property Group, L.P. | ||||
Loan | 11 | Laguna Niguel Town Center | 2.8% | Robert F. Buie; Robert F. Buie, as Trustee of the Robert F. Buie and Pamela I. Buie Family Trust Under Trust Agreement; Jeffry L. Stoddard; Jeffry L. Stoddard, as Trustee of the Jeff and Kris Stoddard Living Trust | ||||
Loan | 12 | Hacienda Gardens | 2.5% | Michael T. LaBarbera; Robert B. Facchino, II | ||||
Loan | 13 | Washington Plaza | 2.4% | Dennis Needleman | ||||
Loan | 14 | Carrollwood Station | 2.2% | LMA Limited Partnership; Glider LLC | ||||
Loan | 15 | Murrieta Spectrum | 2.1% | Steve ChengChe Chou; TsuHo Lee | ||||
Loan | 16 | Westin Lake Mary | 2.1% | Mohana R. Velagapudi; K. Rao Yedla; Srinath R. Yedla; Satya N. Yedla |
A-1-31 |
COMM 2015-LC23
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
% of | ||||||||
Property | Initial Pool | |||||||
Flag | ID | Property Name | Balance | Guarantor | ||||
Loan | 17 | Lake Creek Festival | 2.1% | William Bernstein Qualified Terminable Interest Property Trust; RBC Miller Brothers Trust; Richard Miller; Craig Miller; Barton Miller | ||||
Loan | 18 | Wedgewood Building | 2.0% | Gregory L. Geiser; David R. Wehrly; Darin Puhl | ||||
Loan | 19 | Kenhorst Plaza | 1.9% | Paul Sub | ||||
Loan | 20 | Addison Town Center | 1.7% | Herbert D. Weitzman | ||||
Loan | 21 | A&H Olympic | 1.5% | Moshe Aflalo; Efrem Harkham; Uri Harkham | ||||
Loan | 22 | Brentwood Retail Center (35) | 1.4% | Bryan Gordon | ||||
Loan | 23 | A&H Maple Avenue | 1.4% | Moshe Aflalo; Efrem Harkham; Uri Harkham | ||||
Loan | 24 | BJs Montgomeryville | 1.2% | Richard Birdoff | ||||
Loan | 25 | Colerain Center | 1.2% | Bryan Berkett; David Rifkind | ||||
Loan | 26 | Whitewater Place | 1.2% | David M. Conwill; Steven B. Kimmelman; Keith Ritz; Steven B. Kimmelman as Trustee of The Jerome Kimmelman Gift Trust; Keith Ritz as Trustee of The Sanford L. Ritz Gift Trust | ||||
Loan | 27 | Brown Street Centre | 1.2% | Todd Mooney | ||||
Loan | 28 | Biltmore Parks Apartments | 1.1% | Alan J. Hayman | ||||
Loan | 29 | Ortega Village - Retail | 1.1% | Robert F. Buie; Robert F. Buie, as Trustee of the Robert F. Buie and Pamela I. Buie Family Trust Under Trust Agreement; Jeffry L. Stoddard, as Trustee of the Jeff and Kris Stoddard Living Trust | ||||
Loan | 30 | Landings Shops and Offices | 0.9% | Herman R. Kopf Revocable Trust Dated January 5, 2006; Herman R. Kopf | ||||
Property | 30.01 | Landings Shops and Offices | 0.5% | |||||
Property | 30.02 | Progressive Properties | 0.3% | |||||
Property | 30.03 | Kopf Offices | 0.2% | |||||
Loan | 31 | Terraces on Second | 0.9% | Rodney Poole | ||||
Loan | 32 | 75 Executive Drive (36) | 0.9% | Andrew J. Segal | ||||
Loan | 33 | Best Buy Boca Raton | 0.8% | Gittel Bausk | ||||
Loan | 34 | Somerset Apartments | 0.8% | David Burns, Debra Dout | ||||
Loan | 35 | Walgreens VA Beach | 0.8% | Joseph Plotnick; Chris Steiner; Howard Hertz; Jeffrey Leibovitz; Darryl Stineman; John Hobson | ||||
Loan | 36 | Holiday Inn Express & Suites Rockport | 0.8% | Kanti Bhakta; Divyeshbhai Bhakta; Satish Patel; Raju Bhagat | ||||
Loan | 37 | Commons at Pembroke | 0.7% | Nasser Ahmad; Cyrus Boga | ||||
Loan | 38 | Monument Creek (36) | �� | 0.7% | Ross H. Partrich | |||
Loan | 39 | High Country Plaza | 0.7% | Robert F. Buie; Robert F. Buie, as Trustee of the Robert F. Buie and Pamela I. Buie Family Trust Under Trust Agreement; Jeffry L. Stoddard, as Trustee of the Jeff and Kris Stoddard Living Trust | ||||
Loan | 40 | Williamsburg Center | 0.7% | Robert G. Wolfe | ||||
Property | 40.01 | 1734 Corporate Crossing | 0.2% | |||||
Property | 40.02 | 1728 Corporate Crossing | 0.2% | |||||
Property | 40.03 | 1722 Corporate Crossing | 0.1% | |||||
Property | 40.04 | 1035 East Gate Drive | 0.1% | |||||
Property | 40.05 | 735 Seibert Road | 0.1% | |||||
Property | 40.06 | 703 Seibert Road | 0.0% | |||||
Property | 40.07 | 723 Seibert Road | 0.0% | |||||
Loan | 41 | Shops at Cardiff Ranch | 0.7% | Randall D. Keith | ||||
Loan | 42 | Cobblestone Court II | 0.5% | Louis J. Masi; Mary Louise Szefc | ||||
Loan | 43 | Hampton Inn & Suites – Portland | 0.5% | Mahavir Bhagat; Vilina Bhagat | ||||
Loan | 44 | 40 Wall Street (33) | 0.5% | Donald J. Trump | ||||
Loan | 45 | Palisades of Bridgeport | 0.5% | Wilfredo Santos | ||||
Loan | 46 | Walgreens Frisco TX | 0.4% | Michael D. Gorge | ||||
Loan | 47 | Walgreens-Goodwill Missouri TX | 0.4% | Michael D. Gorge | ||||
Loan | 48 | Warsaw Village | 0.4% | William R. Elliott; Thomas E. Messier | ||||
Loan | 49 | Walton Shoppes | 0.4% | Nisreen Jonna; Jordan Jonna; Scott Jonna | ||||
Loan | 50 | Ortega Village- Pads | 0.4% | Robert F. Buie; Robert F. Buie, as Trustee of the Robert F. Buie and Pamela I. Buie Family Trust Under Trust Agreement; Jeffry L. Stoddard, as Trustee of the Jeff and Kris Stoddard Living Trust | ||||
Loan | 51 | 691 14th Street Retail | 0.4% | J. Christopher Faussemagne; Michael Millett | ||||
Loan | 52 | Monte & Wishing Well | 0.3% | Jeffrey N. Cohen; Dennis S. Cohen | ||||
Property | 52.01 | Monte Carlo MHC | 0.2% | |||||
Property | 52.02 | Wishing Well MHP | 0.1% | |||||
Loan | 53 | Ferndale Avenue Shoppes | 0.3% | Jordan Jonna; Scott Jonna | ||||
Loan | 54 | Courtyard Self Storage | 0.3% | Edward P. McKenzie | ||||
Loan | 55 | Bayonne MHP | 0.3% | Min Kim | ||||
Loan | 56 | Best Western Cleveland Airport | 0.3% | Anand Bhakta | ||||
Loan | 57 | Eureka Crossings | 0.2% | Nisreen Jonna; Jordan Jonna; Scott Jonna | ||||
Loan | 58 | Family Dollar - Rose Hill (36) | 0.1% | Ladder Capital CRE Equity LLC | ||||
Loan | 59 | Family Dollar - Moultrie (36) | 0.1% | Ladder Capital CRE Equity LLC | ||||
Loan | 60 | Family Dollar - Biscoe (36) | 0.1% | Ladder Capital CRE Equity LLC | ||||
Loan | 61 | Family Dollar - Rockingham (36) | 0.1% | Ladder Capital CRE Equity LLC | ||||
Loan | 62 | Dollar General - De Soto (36) | 0.1% | Ladder Capital CRE Equity LLC |
A-1-32 |
COMM 2015-LC23 | ||||||||||||||
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 | Equity Inns Portfolio (33) | 8.3% | 227,780,091 | $152,000,000 Pari Passu Debt; $75,780,091 Preferred Equity | NAP | ||||||||
Property | 1.01 | Homewood Suites Seattle | 1.5% | |||||||||||
Property | 1.02 | Homewood Suites Orlando | 0.7% | |||||||||||
Property | 1.03 | Courtyard Carlsbad | 0.5% | |||||||||||
Property | 1.04 | Courtyard Houston | 0.5% | |||||||||||
Property | 1.05 | Homewood Suites Stratford | 0.4% | |||||||||||
Property | 1.06 | Hampton Inn Urbana | 0.4% | |||||||||||
Property | 1.07 | Springhill Suites Asheville | 0.4% | |||||||||||
Property | 1.08 | Hilton Garden Inn Louisville | 0.4% | |||||||||||
Property | 1.09 | Hampton Inn Orlando | 0.4% | |||||||||||
Property | 1.10 | Hampton Inn Austin | 0.4% | |||||||||||
Property | 1.11 | Hampton Inn College Station | 0.4% | |||||||||||
Property | 1.12 | Hampton Inn Indianapolis | 0.3% | |||||||||||
Property | 1.13 | TownePlace Suites Savannah | 0.3% | |||||||||||
Property | 1.14 | Hampton Inn East Lansing | 0.3% | |||||||||||
Property | 1.15 | Hampton Inn Naperville | 0.3% | |||||||||||
Property | 1.16 | Hilton Garden Inn Rio Rancho | 0.3% | |||||||||||
Property | 1.17 | Courtyard Dalton | 0.2% | |||||||||||
Property | 1.18 | Hampton Inn Alcoa | 0.2% | |||||||||||
Property | 1.19 | Homewood Suites Augusta | 0.2% | |||||||||||
Property | 1.20 | Residence Inn Jacksonville | 0.2% | |||||||||||
Property | 1.21 | Hampton Inn Milford | 0.1% | |||||||||||
Loan | 2 | 32 Avenue of the Americas (33)(36) | 7.3% | BSCMS 2007-PWR17 | 355,000,000 | $355,000,000 Pari Passu Debt | Mezzanine | |||||||
Loan | 3 | 11 Madison Avenue (33)(34)(35) | 7.2% | CSMCS 2006-C4 | 1,330,400,000 | $694,730,000 Pari Passu Debt; $310,670,000 Subordinate Secured Debt; $325,000,000 Mezzanine Debt | NAP | |||||||
Loan | 4 | 1209 DeKalb (35)(36) | 4.8% | 8,500,000 | Mezzanine Debt | Mezzanine | ||||||||
Loan | 5 | Good Samaritan Medical Tower (36) | 4.4% | MLMT 2005-LC1 | None | Mezzanine | ||||||||
Loan | 6 | Harvey Building Products Portfolio (33) | 4.4% | 67,925,164 | Pari Passu Debt | Senior Secured Debt | ||||||||
Property | 6.01 | Londonderry Manufacturing | 0.8% | |||||||||||
Property | 6.02 | Waltham Corporate | 0.4% | |||||||||||
Property | 6.03 | Dartmouth Manufacturing | 0.4% | |||||||||||
Property | 6.04 | Nashua | 0.2% | |||||||||||
Property | 6.05 | West Bridgewater | 0.2% | |||||||||||
Property | 6.06 | Woburn | 0.2% | |||||||||||
Property | 6.07 | Manchester, NH | 0.2% | |||||||||||
Property | 6.08 | New London | 0.1% | |||||||||||
Property | 6.09 | East Haven | 0.1% | |||||||||||
Property | 6.10 | Salem | 0.1% | |||||||||||
Property | 6.11 | Bethlehem | 0.1% | |||||||||||
Property | 6.12 | Lincoln | 0.1% | |||||||||||
Property | 6.13 | Berlin | 0.1% | |||||||||||
Property | 6.14 | Woburn CPD | 0.1% | |||||||||||
Property | 6.15 | Norwalk | 0.1% | |||||||||||
Property | 6.16 | Dartmouth | 0.1% | |||||||||||
Property | 6.17 | Braintree | 0.1% | |||||||||||
Property | 6.18 | Manchester, CT | 0.1% | |||||||||||
Property | 6.19 | Portland | 0.1% | |||||||||||
Property | 6.20 | Norwalk | 0.1% | |||||||||||
Property | 6.21 | Warwick | 0.1% | |||||||||||
Property | 6.22 | Fitchburg | 0.1% | |||||||||||
Property | 6.23 | Auburn | 0.1% | |||||||||||
Property | 6.24 | Portsmouth | 0.1% | |||||||||||
Property | 6.25 | Southampton | 0.0% | |||||||||||
Property | 6.26 | Hyannis | 0.0% | |||||||||||
Property | 6.27 | Wilkes-Barre | 0.0% | |||||||||||
Property | 6.28 | Berlin CPD | 0.0% | |||||||||||
Property | 6.29 | Springfield | 0.0% | |||||||||||
Property | 6.30 | White River Junction | 0.0% | |||||||||||
Loan | 7 | Beach House Hilton Head (36) | 4.2% | None | Mezzanine | |||||||||
Loan | 8 | Whitehall Hotel | 3.7% | GCCFC 2005-GG5 | None | NAP | ||||||||
Loan | 9 | 611 Cowper | 3.4% | None | NAP | |||||||||
Loan | 10 | Springfield Mall (33) | 3.4% | 32,460,817 | Pari Passu Debt | NAP | ||||||||
Loan | 11 | Laguna Niguel Town Center | 2.8% | MSC 2005-HQ7 | None | NAP | ||||||||
Loan | 12 | Hacienda Gardens | 2.5% | None | NAP | |||||||||
Loan | 13 | Washington Plaza | 2.4% | MLCFC 2006-4 | None | NAP | ||||||||
Loan | 14 | Carrollwood Station | 2.2% | None | NAP | |||||||||
Loan | 15 | Murrieta Spectrum | 2.1% | GSMS 2006-GG6 | None | NAP | ||||||||
Loan | 16 | Westin Lake Mary | 2.1% | None | NAP |
A-1-33 |
COMM 2015-LC23
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 | 17 | Lake Creek Festival | 2.1% | CD 2006-CD2 | None | NAP | ||||||||
Loan | 18 | Wedgewood Building | 2.0% | None | NAP | |||||||||
Loan | 19 | Kenhorst Plaza | 1.9% | JPMCC 2005-LDP4 | None | NAP | ||||||||
Loan | 20 | Addison Town Center | 1.7% | None | NAP | |||||||||
Loan | 21 | A&H Olympic | 1.5% | MLMT 2006-C1 | None | NAP | ||||||||
Loan | 22 | Brentwood Retail Center (35) | 1.4% | CSMC 2006-C5 | 2,000,000 | Mezzanine Debt | NAP | |||||||
Loan | 23 | A&H Maple Avenue | 1.4% | CSMC 2006-C1 | None | NAP | ||||||||
Loan | 24 | BJs Montgomeryville | 1.2% | None | NAP | |||||||||
Loan | 25 | Colerain Center | 1.2% | CSMC 2007-C2 | None | NAP | ||||||||
Loan | 26 | Whitewater Place | 1.2% | None | NAP | |||||||||
Loan | 27 | Brown Street Centre | 1.2% | None | NAP | |||||||||
Loan | 28 | Biltmore Parks Apartments | 1.1% | CSMC 2006-C3 | None | NAP | ||||||||
Loan | 29 | Ortega Village - Retail | 1.1% | MSC 2006-HQ8 | None | NAP | ||||||||
Loan | 30 | Landings Shops and Offices | 0.9% | GMACC 2006-C1 | None | NAP | ||||||||
Property | 30.01 | Landings Shops and Offices | 0.5% | |||||||||||
Property | 30.02 | Progressive Properties | 0.3% | |||||||||||
Property | 30.03 | Kopf Offices | 0.2% | |||||||||||
Loan | 31 | Terraces on Second | 0.9% | None | NAP | |||||||||
Loan | 32 | 75 Executive Drive (36) | 0.9% | WBCMT 2003-C3 | None | Mezzanine | ||||||||
Loan | 33 | Best Buy Boca Raton | 0.8% | None | NAP | |||||||||
Loan | 34 | Somerset Apartments | 0.8% | None | NAP | |||||||||
Loan | 35 | Walgreens VA Beach | 0.8% | None | NAP | |||||||||
Loan | 36 | Holiday Inn Express & Suites Rockport | 0.8% | None | NAP | |||||||||
Loan | 37 | Commons at Pembroke | 0.7% | None | NAP | |||||||||
Loan | 38 | Monument Creek (36) | 0.7% | FNA 2014-M5 | None | Mezzanine | ||||||||
Loan | 39 | High Country Plaza | 0.7% | MSC 2005-HQ7 | None | NAP | ||||||||
Loan | 40 | Williamsburg Center | 0.7% | None | NAP | |||||||||
Property | 40.01 | 1734 Corporate Crossing | 0.2% | |||||||||||
Property | 40.02 | 1728 Corporate Crossing | 0.2% | |||||||||||
Property | 40.03 | 1722 Corporate Crossing | 0.1% | |||||||||||
Property | 40.04 | 1035 East Gate Drive | 0.1% | |||||||||||
Property | 40.05 | 735 Seibert Road | 0.1% | |||||||||||
Property | 40.06 | 703 Seibert Road | 0.0% | |||||||||||
Property | 40.07 | 723 Seibert Road | 0.0% | |||||||||||
Loan | 41 | Shops at Cardiff Ranch | 0.7% | None | NAP | |||||||||
Loan | 42 | Cobblestone Court II | 0.5% | None | NAP | |||||||||
Loan | 43 | Hampton Inn & Suites – Portland | 0.5% | None | NAP | |||||||||
Loan | 44 | 40 Wall Street (33) | 0.5% | 153,776,230 | Pari Passu Debt | NAP | ||||||||
Loan | 45 | Palisades of Bridgeport | 0.5% | None | NAP | |||||||||
Loan | 46 | Walgreens Frisco TX | 0.4% | None | NAP | |||||||||
Loan | 47 | Walgreens-Goodwill Missouri TX | 0.4% | CSFB 2005-C5 | None | NAP | ||||||||
Loan | 48 | Warsaw Village | 0.4% | GCCFC 2005-GG5 | None | NAP | ||||||||
Loan | 49 | Walton Shoppes | 0.4% | None | NAP | |||||||||
Loan | 50 | Ortega Village- Pads | 0.4% | MSC 2006-HQ8 | None | NAP | ||||||||
Loan | 51 | 691 14th Street Retail | 0.4% | None | NAP | |||||||||
Loan | 52 | Monte & Wishing Well | 0.3% | None | NAP | |||||||||
Property | 52.01 | Monte Carlo MHC | 0.2% | |||||||||||
Property | 52.02 | Wishing Well MHP | 0.1% | |||||||||||
Loan | 53 | Ferndale Avenue Shoppes | 0.3% | None | NAP | |||||||||
Loan | 54 | Courtyard Self Storage | 0.3% | None | NAP | |||||||||
Loan | 55 | Bayonne MHP | 0.3% | LBUBS 2005-C7 | None | NAP | ||||||||
Loan | 56 | Best Western Cleveland Airport | 0.3% | None | NAP | |||||||||
Loan | 57 | Eureka Crossings | 0.2% | None | NAP | |||||||||
Loan | 58 | Family Dollar - Rose Hill (36) | 0.1% | None | Mezzanine | |||||||||
Loan | 59 | Family Dollar - Moultrie (36) | 0.1% | None | Mezzanine | |||||||||
Loan | 60 | Family Dollar - Biscoe (36) | 0.1% | None | Mezzanine | |||||||||
Loan | 61 | Family Dollar - Rockingham (36) | 0.1% | None | Mezzanine | |||||||||
Loan | 62 | Dollar General - De Soto (36) | 0.1% | None | Mezzanine |
A-1-34 |
FOOTNOTES TO ANNEX A-1 | |
(1) | GACC—German American Capital Corporation or one of its affiliates; LCF—Ladder Capital Finance LLC or one of its affiliates; CCRE—Cantor Commercial Real Estate Lending, L.P. or one of its affiliates; JLC—Jefferies LoanCore LLC or one of its affiliates. |
(2) | Loan No. 1 – Equity Inns Portfolio – The Original Balance ($) of $80.0 million and Cut-off Date Balance ($) of $80.0 million represent the $48.0 million controlling Note A-1-A and $32.0 million non-controlling note A-4-A of a $232.0 million whole loan evidenced by ninepari passu notes. Thepari passu companion loans are comprised of the non controlling Notes A-1-B, with an original principal balance of $12 million, A-2-A, with an original principal balance of $30 million, A-2-B, with an original principal balance of $9.6 million, A-3, with an original principal amount of $39.6 million, A-4-B, with an original principal amount of $8.0 million, and A-5 and A-6, with an original principal amount of $26.4 million each. |
Loan No. 2 – 32 Avenue of the Americas – The Original Balance ($) and Cut-off Date Balance ($) of $70.0 million represents the non-controlling Note A-4 of a $425.0 million whole loan evidenced by fivepari passu notes. Thepari passu companion loans are the non-controlling Note A-5 in the original principal amount of $57.5 million, which is currently held by GACC or an affiliate, and the controlling Note A-1, non-controlling Note A-2 and non-controlling Note A-3, in the aggregate original principal amount of $297.5 million, which are all currently held by JP Morgan Chase Bank, N.A. or an affiliate. | |
Loan No. 3 – 11 Madison Avenue – The Original Balance ($) and Cut-off Date Balance ($) of $69.6 million represents the non-controlling Note A-1-C3 of a $1.075 billion whole loan evidenced by sixteen seniorpari passu and three subordinate notes. The remaining notes include twelve notes that have been included in 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 has been included in the COMM 2015-CCRE26 transaction in the original principal amount of $70.0 million; the non-controllingpari passu Note A-1-C2 that has been included in the COMM 2015-CCRE27 transaction in the original principal amount of $70.0 million; thepari passunotes held by Morgan Stanley Bank, N.A. or an affiliate or a securitization trust as to which it is a loan seller, 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, or an affiliate or a securitization trust as to which it is a loan seller, including the senior non-controlling Note A-3-C1 that is included in the WFCM 2015-NXS3 transaction in the original principal amount of $35.0 million and the senior non-controlling Note A-3-C2 in the aggregate original principal amount of $30.5 million. With respect to the 11 Madison Avenue loan combination, so long as the 11 Madison Avenue subordinate companion loans are included in the MAD 2015-11MD mortgage trust, there will be no directing holder with respect to such loan combination. | |
Loan No. 6 – Harvey Building Products Portfolio – The Original Balance ($) of $42.0 million and Cut-off Date Balance ($) of approximately $41.95 million represent the controlling Note A-1 of a $110.0 million whole loan evidenced by fourpari passu notes. Thepari passu companion loans are comprised of the non-controlling Note A-2A, non-controlling Note A-2B and non-controlling Note A-3, with an aggregate outstanding principal amount of approximately $67.9 million, which are expected to be included in future securitizations. | |
Loan No. 10 – Springfield Mall - The Original Balance and Cut-off Date Balance of $32.5 million and $32.46 million, respectively, represent the controlling Note A-1 of a $65.0 million whole loan evidenced by twopari passu notes. Thepari passu companion loan is the non-controlling Note A-2 in the outstanding principal amount of approximately $32.46 million, which is currently held by CCRE. | |
Loan No. 44 – 40 Wall Street – The Original Balance ($) of $5.0 million and Cut-off Date Balance ($) of approximately $4.96 million represent the non-controlling Note A-1-B of a $160.0 million whole loan evidenced by fourpari passu notes. Thepari passu companion loans are comprised of the controlling Note A-1-A and the non-controlling Note A-2, with an aggregate outstanding principal amount of approximately $94.2 million and the non-controlling Note A-3, with an outstanding principal amount of approximately $59.5 million. Thepari passu Note A-1-A and Note A-2 were included in the WFCM 2015-LC22 and thepari passu note A-3 was included in the COMM 2015-CCRE24. | |
(3) | With respect to any Mortgaged Property securing a multi-property Mortgage Loan, the amounts listed under the headings “Original Balance ($)” and “Cut-off Date Balance ($)” reflect the Allocated Loan Amount related to such Mortgaged Property. |
A-1-35 |
(4) | Loan No. 50 – Ortega Village- Pads – The Ortega Village- Pads Mortgaged Property’s Net Rentable Area (SF/Units/Rooms/Pads/Beds) of 16,601 sq. ft. reflects 6,810 sq. ft. of retail space and 9,791 sq. ft. of medical office space. |
(5) | Loan No. 2 – 32 Avenue of the Americas – The 32 Avenue of the Americas 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 New York City’s Landmark Preservation Commission. |
(6) | Loan No. 58 – Family Dollar - Rose Hill – The Family Dollar - Rose Hill Mortgage Loan has an ARD feature with an anticipated repayment date of October 6, 2025, with a revised interest rate for the period from the anticipated repayment date through the final maturity date of October 6, 2030 of the sum of the initial rate of 4.9400% and 4.0000%. |
Loan No. 59 – Family Dollar – Moultrie – The Family Dollar - Moultrie Mortgage Loan has an ARD feature with an anticipated repayment date of October 6, 2025, with a revised interest rate for the period from the anticipated repayment date through the final maturity date of October 6, 2030 of the sum of the initial rate of 4.9400% and 4.0000%. | |
Loan No. 60 – Family Dollar – Biscoe – The Family Dollar – Biscoe Mortgage Loan has an ARD feature with an anticipated repayment date of October 6, 2025, with a revised interest rate for the period from the anticipated repayment date through the final maturity date of October 6, 2030 of the sum of the initial rate of 4.9400% and 4.0000%. | |
Loan No. 61 – Family Dollar – Rockingham – The Family Dollar – Rockingham Mortgage Loan has an ARD feature with an anticipated repayment date of October 6, 2025, with a revised interest rate for the period from the anticipated repayment date through the final maturity date of October 6, 2030 of the sum of the initial rate of 4.9400% and 4.0000%. | |
Loan No. 62 – Dollar General - De Soto – The Dollar General - De Soto Mortgage Loan has an ARD feature with an anticipated repayment date of October 6, 2025, with a revised interest rate for the period from the anticipated repayment date through the final maturity date of October 6, 2030 of the sum of the initial rate of 5.2100% and 4.0000%. | |
(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 relatedPari 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. The Pari Passu Loan Primary Servicing Fee Rate for the 32 Avenue of the Americas Loan will be such amount as set forth in the 32 Avenue of the Americas Pooling and Servicing Agreement on and after the 32 Avenue of the Americas Note A-1 Securitization Date. The Pari Passu Loan Primary Servicing Fee Rate for the 11 Madison Avenue Loan will be 0.00125%. The Pari Passu Loan Primary Servicing Fee Rate for the 40 Wall Street Loan will be 0.0025%. |
(8) | 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. |
(9) | “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 |
A-1-36 |
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. | |
(10) | “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 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). |
(11) | Loan No. 1 – Equity Inns 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 are calculated based on the Mortgage Loan included in the issuing entity and the relatedpari passu companion loans in the aggregate. |
Loan No. 2 – 32 Avenue of the Americas – 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 are calculated based on the mortgage loan included in the issuing entity and the relatedpari passu companion loans in the aggregate. | |
Loan No. 3 – 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 are calculated based on the mortgage loan included in the issuing entity and the relatedpari passu companion loans in the aggregate. | |
Loan No. 6 – Harvey Building Products 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 are calculated based on the Mortgage Loan included in the issuing entity and the relatedpari passu companion loans in the aggregate. | |
Loan No. 10 – Springfield Mall – 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 are calculated based on the mortgage loan included in the issuing entity and the relatedpari passu companion loans in the aggregate. | |
Loan No. 44 – 40 Wall Street—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 are calculated based on the Mortgage Loan included in the issuing entity and the relatedpari passu companion loans in the aggregate. | |
(12) | Loan No. 3 – 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/Beds)($) calculations exclude the 11 Madison Avenue subordinate secured debt. |
(13) | 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 prospectus supplement. |
(14) | Loan No. 1 – Equity Inns Portfolio – The Cut-off Date LTV Ratio, LTV Ratio at Maturity or ARD and Appraised Value ($) are based on the portfolio appraised value of $360.0 million, which attributes a premium to the aggregate value of the Equity Inns Portfolio Mortgaged Properties as a whole. Based on the sum of the appraised values of the Equity Inns Portfolio Mortgaged Properties on an individual basis of $322.4 million, the Cut-off Date LTV is 72.0%. |
Loan No. 9 – 611 Cowper – The Cut-off Date LTV Ratio, LTV Ratio at Maturity or ARD and Appraised Value ($) are based on the “As Stabilized” value of $59.0 million, which assumes the punch list items have been |
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completed and all free rent and TI allowance have been exhausted. Based on the “As-is” appraised value of $51.8 million, the Cut-off Date LTV is 63.5%. | |
(15) | 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. | |
“YM(x)” means may be prepaid for x payments with payment of the greater of a yield maintenance charge. | |
“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. | |
“DorYM(x)” means may be prepaid for x payments with either defeasance or a yield maintenance charge. | |
“1%(x)” means may be prepaid for x payments with payment of a prepayment premium equal to 1% of the amount prepaid. | |
“3%(x)” means may be prepaid for x payments with payment of a prepayment premium equal to 3% of the amount prepaid. | |
“4%(x)” means may be prepaid for x payments with payment of a prepayment premium equal to 4% of the amount prepaid. | |
“O(x)” means freely prepayable for x payments, including the maturity date or anticipated repayment date. | |
Certain 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 prospectus supplement. See “Description of the Mortgage Pool—Certain Terms and Conditions of the Mortgage Loans—Property Releases” in this prospectus supplement. | |
Loan No. 7 – Beach House Hilton Head – Defeasance of the Beach House Hilton Head Mortgage Loan is permitted for 91 payments after a lockout period. Beginning with the 59th payment after the lockout period, in lieu of defeasance, the borrower may prepay the mortgage loan in full, together with a prepayment penalty equal to (a) 4% if such prepayment is made on or after October 6, 2022 through October 5, 2023, 3% if such prepayment is made on or after October 6, 2023 through October 5, 2024 and 1% if such prepayment is made on or after October 6, 2024 through July 5, 2025. On or after July 6, 2025 through October 6, 2025, the Beach House Hilton Head mortgage loan may be prepaid without penalty. | |
(16) | Loan No. 1 – Equity Inns Portfolio – The lockout period will be at least 25 payment dates beginning with and including the first payment date of November 6, 2015. Prepayment of the full $232.0 million Equity Inns 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) December 31, 2017. The assumed lockout period of 25 payments is based on the expected COMM 2015-LC23 securitization closing date in November 2015. The actual lockout period may be longer. |
Loan No. 3 – 11 Madison Avenue – The lockout period will be at least 26 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 26 payments is based on the expected COMM 2015-LC23 securitization closing date in November 2015. The actual lockout period may be longer. | |
Loan No. 6 – Harvey Building Products Portfolio –The lockout period will be at least 25 payment dates beginning with and including the first payment date of November 6, 2015. Defeasance of the full $110.0 million Harvey Building Products Portfolio 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) October 1, 2018. |
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Loan No. 10 – Springfield Mall – The lockout period will be at least 25 payment dates beginning with and including the first payment date of November 6, 2015. Defeasance of the full $65.0 million Springfield Mall 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) November 6, 2019. The assumed lockout period of 25 payments is based on the expected COMM 2015-LC23 securitization closing date in November 2015. The actual lockout period may be longer. | |
Loan No. 44 – 40 Wall Street – The lockout period will be at least 28 payment dates beginning with and including the first payment date of August 6, 2015. Defeasance of the full $160.0 million 40 Wall Street 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) July 2, 2018. | |
(17) | Loan No. 1 – Equity Inns Portfolio – From and after the prepayment lockout date, the lender is required to release an individual property or properties from the collateral in connection with a third-party, arms-length sale of such property(ies) (or to an affiliate with respect to up to two properties at which hotel operations have ceased and are no longer commercially viable) subject to, among other things, the following conditions: (i) no event of default has occurred or would occur as a result of the release, (ii) the remaining collateral has an LTV no greater than the lesser of (a) 64.4% and (b) the LTV in place immediately prior to the release, (iii) the remaining collateral has a DSCR no less than the greater of (a) 2.35x and (b) the DSCR in place immediately prior to the release, (iv) payment of a Release Price (as defined below) and any yield maintenance premium associated with the payment of the Release Price, (v) satisfaction of customary REMIC requirements, (vi) payment of all interest which would have accrued on the portion of the outstanding principal balance being prepaid through, but not including, the next occurring monthly payment date and (vii) payment of all other costs and expenses of lender in connection with the release, provided the LTV and DSCR tests may be satisfied with an additional prepayment of principal (with yield maintenance). The “Release Price” shall equal the greater of (x) 115% of the loan amount allocated to the subject property(ies) and (y) 100% of the net sales proceeds of the subject property(ies) after deducting the costs of closing the sale, which costs are required to be capped for purposes of determining the Release Price at six percent of gross sales proceeds. |
Loan No. 6 – Harvey Building Products Portfolio – The borrower may obtain the release of one or more individual Mortgaged Properties at the expiration of the lockout period, provided, among other things, (i) no event of default has occurred and is continuing, (ii) the borrower partially defeases the Mortgage Loan in an amount equal to the greater of (x) the net sales proceeds with respect to such individual Mortgaged Property and (y) 125% of the allocated loan amount for such individual Mortgaged Property and (iii) if, after such release, at least $11,000,000 of the principal amount of the Mortgage Loan has been repaid or defeased, the loan-to-value ratio for the remaining Mortgaged Properties is no greater than 60.0%. | |
Loan No. 8 – Whitehall Hotel - On any payment date, the borrower may obtain the release of a small, non-income producing portion of the Whitehall Hotel Mortgaged Property (identified in the loan agreement) from the lien of the mortgage provided, among other things, the REMIC loan-to-value ratio after the release is not more than 125% and, with respect to the adjacent development (as described below), (i) lender has approved, among other things, certain agreements and plans related to the adjacent development, (ii) borrower has delivered $1,800,000 to lender to be held as additional collateral for the Whitehall Hotel Mortgage Loan (until such time that the adjacent development is completed to the satisfaction of lender) and (iii) the sponsors have delivered to lender a guaranty of lien-free completion of the adjacent development. According to the sponsors, an affiliate of the borrower intends to develop the released parcel, together with adjacent parcels owned by an affiliate of the borrower, for the purpose of developing on the property adjacent to the Whitehall Hotel Mortgaged Property amenities that may be used by guests at the Whitehall Hotel Mortgaged Property including, a ballroom, meeting and event space, parking area, office space, restaurant, gym, and other amenity spaces and services for the Whitehall Hotel Mortgaged Property. | |
Loan No. 15 – Murrietta Spectrum – After the permitted release date and prior to the open prepayment date, the borrower may partially defease and obtain the release one or more individual pad buildings provided, among other things, (i) the borrower provide defeasance collateral to an amount equal to the greater of (A) 100% of the net sales proceeds and (B) 125% of the allocated loan amount for the parcel to be released and (ii) after the release, (A) the DSCR is greater than or equal to 1.30x, (B) the debt yield is greater than or equal to 8.5% and (C) the LTV is less than or equal to 75%. |
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Loan No. 25 – Colerain Center – The borrower may obtain the free release of a certain vacant and non-income producing portion of the Mortgaged Property, subject to the satisfaction of certain conditions, including, but not limited to, satisfaction of the REMIC LTV test. | |
Loan No. 30 – Landings Shops and Offices – After the permitted release date and prior to the open prepayment date, the borrower may partially defease and obtain a release of either of the Kopf Offices Mortgaged Property and/or the Progressive Property from the lien of the Mortgage Loan upon a bona fide third-party sale provided, among other things, (i) Kopf Offices Mortgaged Property is released prior to the release of Progressive Property, (ii) the borrower provides defeasance collateral in an amount equal to the greater of: (a) 93% of the net sales proceeds from the sale of the property or (b) 115% of the Allocated Loan Amount for such property, and (iii) based on the remaining properties, the DSCR no less than the greater of: (a) 1.30x and (b) the DSCR immediately preceding such release. | |
(18) | 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. 3 – 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 prospectus supplement. 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. 6 – Harvey Building Products Portfolio –The Sole Tenant, Harvey Industries, Inc. is the tenant under a unitary master lease with Harvey Propco, LLC, the borrower under the Harvey Building Products Portfolio. | |
Loan No. 44 – 40 Wall Street — The collateral for The 40 Wall Street Mortgage Loan consists of the leasehold interest in The 40 Wall Street Mortgaged Property. | |
(19) | Loan No. 6 – Harvey Building Products Portfolio –The Sole Tenant, Harvey Industries, Inc., which is an affiliate of the borrower, is the tenant under a unitary master lease with Harvey Propco, LLC, the borrower under the Harvey Building Products Portfolio. |
Loan No. 18 – Wedgewood Building – The Largest Tenant, Wedgewood, the 3rd Largest Tenant, Maxim Properties, the 4th Largest Tenant, Greenhedge Escrow, the 5th Largest Tenant, HMC Assets and the 6th Largest Tenant, Civic Financial, which are affiliates of the borrower, collectively lease 61.5% of the net rentable area at the Mortgaged Property. Wedgewood, Maxim Properties and Greenhedge Escrow executed joint and several lease guarantees for each of these affiliated leases. | |
(20) | Loan No. 2 – 32 Avenue of the Americas – The 2nd Largest Tenant, Dentsu Holdings USA, Inc., occupies three spaces, representing 14.5% of the NRA, with various lease expirations. One space of 99,184 sq. ft. expires in September 2021, one space of 32,862 sq. ft. expires in December 2023 and the other space of 36,845 sq. ft. expires in August 2025. |
Loan No. 5 – Good Samaritan Medical Tower – The Largest Tenant, University of Southern California, has leases for 8,037 sq. ft. that expire in February 2023, 2,648 sq. ft. that expire in February 2024 and the expansion lease that is being negotiated for 3,920 sq. ft. is expected to have a December 2024 expiration date. | |
Loan No. 44 – 40 Wall Street - The 3rd Largest Tenant, Duane Reade, occupies 54,500 sq. ft. of office space on the 21st and 22nd floors under a lease that commenced on October 1, 2012 and expires March |
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31, 2028 with a current underwritten rent of $29.78 PSF. Duane Reade also occupies 23,310 sq. ft. of retail space under a lease that commenced on July 6, 2011 and expires January 31, 2032 with a current underwritten rent of $67.23 PSF. | |
(21) | 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 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 that occur prior to the maturity date of the related loan for those tenants listed in Annex A-1: |
Loan No. 3 – 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. 5 – Good Samaritan Medical Tower – The Largest Tenant, University of Southern California, which currently occupies 10.0% of the NRA, has a one-time right to terminate its lease with respect to 2,648 sq. ft. of its space in March 2019, upon at least 6 months’ notice and payment of an amount equal to the unamortized portion of the tenant improvements. | |
Loan No. 18 – Wedgewood Building – The 2nd Largest Tenant, T-Mobile, has a right to terminate its lease effective August 31, 2020, upon at least nine months’ advance written notice and the payment of a termination fee equal to any unamortized brokerage costs and tenant improvements. | |
Loan No. 27 – Brown Street Centre– The 2nd Largest Tenant, Moffet, Vitu, et al, which currently occupies 11.7% of the NRA, may terminate its lease at any time during the lease term with one year’s notice. | |
Loan No. 29 – Ortega Village - Retail - The 5th Largest Tenant, OC Pharmacy, has the right to terminate the lease for 1,428 sq. ft. of its expansion space effective September 30, 2018 with 180 days notice to the landlord and payment of the unamortized portion of landlord’s expenses. | |
Loan No. 32 – 75 Executive Drive - The 2nd Largest Tenant, Aceyus, Corp., has the right to terminate its lease effective April 30, 2020 with notice no later than July 31, 2019 and payment of the unamortized portion of landlord’s expenses with 8.0% interest. | |
Loan No. 44 – 40 Wall Street– The 3rd Largest Tenant, Duane Reade, has the right to terminate the lease for its 54,500 sq. ft. of office space effective March 31, 2018 with a payment of $2,932,476 and on March 31, 2023 with a payment of $535,917. The 4th Largest Tenant, Haks Engineering & Land Surveyors, may terminate its lease effective March 1, 2024 with 12 months’ notice and payment of a termination fee of $2,110,746. The 5th Largest Tenant, Weidlinger Associates Inc, may terminate its lease effective January 31, 2028 for one or both floors of its premises with 12 months’ notice and payment of the unamortized portion of landlord’s expenses. | |
Loan No. 57 – Eureka Crossings – The 5th Largest Tenant, Wild Bill’s Tobacco, may terminate its lease at any-time during the lease term with 30 days’ notice and payment of a termination fee of $12,500. | |
(22) | Loan No. 3 – 11 Madison Avenue – The Largest Tenant, Credit Suisse, recently renewed its lease at the 11 Madison Avenue Mortgaged 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. |
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(23) | The following major tenants (listed on Annex A-1) are currently subleasing all or a significant portion of its leased space: |
Loan No. 2 – 32 Avenue of the Americas – In addition to its 168,891 sq. ft. direct lease, the Largest Tenant, Dentsu Holdings USA, Inc. is subleasing 44,514 sq. ft. from the Third Largest Tenant, Centurylink Communications, LLC. Dentsu Holdings USA, Inc. has also agreed to sublease 64,256 from the 5th Largest Tenant, University of Cambridge, effective January 1, 2016, which will bring the total leased space by Dentsu Holdings USA to 277,661 sq. ft., or 23.9% of NRA. The 4th Largest Tenant, Telx, has agreed to sublease an additional 60,759 sq. ft. from another tenant at the property, which will bring its leased space to 140,002 sq. ft., or 12.0% of NRA, effective May 1, 2016. | |
Loan No. 44 – 40 Wall Street - The 5th Largest Tenant, Weidlinger Associates Inc, subleases a portion of its space on the 19th floor totaling 10,324 to RF Lafferty for a five (5) year term expiring in January 2019 at a current rental rate of $317,463 ($30.75 PSF), a premium to Weidlinger Associates Inc’s, current in-place rent. The lease was signed in December 2013. | |
Loan No. 47 – Walgreens-Goodwill Missouri TX – The Largest Tenant, Walgreens, which is the sole tenant, is subleasing its entire 14,820 sq. ft. to Goodwill. The terms of such sublease have not been disclosed to the lender. | |
(24) | The following major tenants shown on Annex A-1 have abated, free or prepaid rent: |
Loan No. 2 – 32 Avenue of the Americas – At closing, the borrower deposited $1,577,928 into a free rent reserve account for rent concessions with respect to the Telx lease, the Largest Tenant, for monthly payments starting May 2016 through October 2016. | |
Loan No. 3 – 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, the 2nd Largest Tenant, for monthly payments starting September 2015 through August 2016. | |
Loan No. 5 – Good Samaritan Medical Tower – At closing, the borrower deposited $275,931 into a free reserve account for rent concessions with respect to various tenants at the property. Of the $275,931 in reserved free rent, the 2nd Largest Tenant, United Imaging, LLC, will receive $143,910 in free rent for six months between the period of February 2016 and November 2018. | |
Loan No. 9 – 611 Cowper – The Largest Tenant, A9.com, which is the Sole Tenant at the Mortgaged Property, has executed a 10-year lease at the Mortgaged Property, but is not yet in occupancy or paying rent. The borrower has not yet completed certain punch list items included in the landlord work. Under the terms of the lease, rent payments are required to commence on the later of October 29, 2015 and the date of substantial completion of the landlord work required under the lease. A free rent reserve of $1,620,000 (six months’ rent) was established at origination to cover any delays in rent commencement. | |
Loan No. 15 – Murrieta Spectrum – The Largest Tenant, Ashleys, affirmed its lease with the borrower following a 2008 bankruptcy and paid $185,290 to the borrower in settlement. See “Risk Factors - Risks Related to the Mortgage Loans – Tenant Bankruptcy Entails Risk” in the prospectus supplement. At loan closing, the borrower deposited $168,994 of that settlement amount into the free rent reserve and from October 1, 2015 through September 30, 2017, approximately $7,014.44 of this reserve is required to be applied to pay a portion of this tenant’s rent due. | |
Loan No. 17 – Lake Creek Festival – At closing, the borrower deposited $141,365 into a free reserve account for rent concessions with respect to various tenants at the Mortgaged Property. Of the $141,365 in reserved free rent, the 3rd Largest Tenant, Pinballz Arcade, will receive $120,063 in free rent for five months between the period of September 2015 and January 2016. | |
Loan No. 18 – Wedgewood Building – The 2nd Largest Tenant, T-Mobile, has four months of free rent from September 2020 to December 2020. | |
Loan No. 19 – Kenhorst Plaza – The 2nd Largest Tenant, Retro Fitness, executed a lease and is expected to take occupancy in March 2016 following build out of the space. The tenant is entitled to 12 months free rent, ending in July 2016, which amount was reserved at closing. |
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Loan No. 20 – Addison Town Center – At closing, the borrower deposited $199,884 into the free rent reserve for the 3rd Largest Tenant, Crunch Fitness. Amounts in the free rent reserve are required to be disbursed to the borrower in equal sums on each of the initial six payment dates in the amount of $30,464, and provided the tenant has commenced paying full unabated rent pursuant to its lease, on the seventh payment date, or on a later date when the tenant is in occupancy and paying full rent, $17,100. | |
Loan No. 27 – Brown Street Centre – At closing, the borrower deposited $93,395 into a free reserve account for rent concessions with respect to various tenants at the Mortgaged Property. Of the $93,395 in reserved free rent, the 5th Largest Tenant, Nexus Realty, has free rent in the amount of $62,245 for rent payments from October 2015 to October 2016. | |
Loan No. 44 – 40 Wall Street - The Largest Tenant, Green Ivy, has free rent from July 2, 2015 to November 18, 2016 which amounts to $3,568,885. The 4th Largest Tenant, Haks Engineering & Land Surveyors, has free rent from January 1, 2016 to March 1, 2016 which amounts to $194,613. The 5th Largest Tenant, Weidlinger Associates Inc, has free rent for one month in February 2016, February 2017 and February 2018 which amounts to $371,232. In lieu of collecting free rent reserves, the sponsor has provided a personal guaranty which is capped at $26,000,000 (except with respect to lease termination payments, ground lease payments and insurance premiums, none of which are subject to the cap). | |
(25) | 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. 3 – 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. 5 – Good Samaritan Medical Tower – The Largest Tenant, University of Southern California, which leases approximately 10.0% of the NRA at the Good Samaritan Medical Tower Mortgaged Property, is negotiating a lease expansion with respect to 3,920 sq. ft. suite 800 expansion space, which has not yet been executed. If the lease is executed, University of Southern California is expected to take occupancy of the expansion space in January 2016. At closing, $130,771 was reserved by the borrower for the execution of the suite 800 expansion space and $321,771 for tenant improvements and leasing commissions in association with the suite 800 expansion space. | |
Loan No. 9 – 611 Cowper – The Largest Tenant, A9.com, which leases 100.0% of the NRA at the 611 Cowper Mortgaged Property, has not yet taken occupancy. The Mortgaged Property is newly constructed. The tenant is not expected to take occupancy at the Mortgaged Property until both (i) the borrower completes certain remaining required punch list items with respect to the landlord work it is required to perform under the lease and (ii) the tenant completes certain tenant improvement work for which it is entitled to tenant allowances under the lease. At loan closing, the borrower deposited approximately $1,620,000 into a free rent reserve account (representing six months of free rent) to cover any delays in rent commencement. Additionally, Amazon provided a parent company guarantee for A9.com’s lease subject to a maximum liability amount of $10,000,000. | |
Loan No. 17 – Lake Creek Festival – The 3rd Largest Tenant, Pinballz Arcade, which leases approximately 11.9% of the NRA at the Lake Creek Festival Mortgaged Property, has not yet taken occupancy and is currently building out its space. The Pinballz Arcade’s lease commenced on August 1, 2015 and provides for six months of free rent between the period of September 2015 and January 2016, for which $120,063 was reserved for at closing. | |
Loan No. 19 – Kenhorst Plaza – The 2nd Largest Tenant, Retro Fitness (Beach One Holdings, LLC) (which occupies approximately 13.3% of net rentable area), executed a lease but has not yet taken possession of the premises. The tenant is expected to take occupancy in March 2016, replacing the current tenant, Sears Hardware (Sears, Roebuck, & Co.), which has a lease expiration of February 3, 2016. | |
Loan No. 27 – Brown Street Centre – The 5th Largest Tenant, Nexus Realty, which leases approximately 5.7% of the NRA at the Brown Street Centre Mortgaged Property, is expected to take occupancy in October 2015 and commencement of monthly rent payments is expected to begin in November 2015. | |
(26) | Loan No. 3 – 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 |
A-1-43 |
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. 10 – Springfield Mall – The borrowers, PR Springfield/Delco Limited Partnership and KS Springfield Limited Partnership are structured as tenants-in-common and are a Pennsylvania limited partnership and a Delaware limited partnership, respectively. The sponsors of the borrowers and the non-recourse carveout guarantors are Simon Property Group, L.P. and PREIT Associates, L.P. | |
Loan No. 21 – A&H Olympic – The borrowers, 210 E. Olympic-1-AHOP, LLC; 210 E. Olympic-19.8-EHT, LLC; 210 E. Olympic-39.6-HFE, LLC; 210 E. Olympic-39.6-210EOB, LLC, are structured as tenants-in-common, and 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. | |
Loan No. 23 – A&H Maple Avenue – The borrowers, 1007 Maple-1-AHMP, LLC; 1007 Maple-24.75-EHT, LLC; 1007 Maple-24.75-HFE, LLC; 1007 Maple-24.75-1001MA, LLC; 1007 Maple-24.75-1139MA, LLC, are structured as tenants-in-common, and 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. | |
Loan No. 35 – Walgreens VA Beach – The borrowers, 645 First Colonial Road Investor #1, LLC; 645 First Colonial Road Investor #10, LLC; 645 First Colonial Road Investor #14, LLC; 645 First Colonial Road Investor #23, LLC; 645 First Colonial Road Investor #24, LLC; 645 First Colonial Road Investor #JH, LLC, are structured as tenants-in-common and are each a special purpose Delaware limited liability company. The sponsors of the borrowers and the non-recourse carveout guarantors are Joseph Plotnick; Chris Steiner; Howard Hertz; Jeffrey Leibovitz; Darryl Stineman; John Hobson. | |
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Loan No. 51 – 691 14th Street Retail – The borrowers, Crapgame, LLC; and Drewry Capital, LLC, are structured as tenants-in-common and are both a Georgia limited liability company structured to be bankruptcy-remote. The sponsors of the borrowers and the non-recourse carveout guarantors are J. Christopher Faussemagne and Michael Millett. | |
(27) | All upfront reserve balances reflect the upfront reserve amount at loan origination. The current balance may be less than the amount shown. |
Loan No. 36 – Holiday Inn Express & Suites Rockport – At closing a seasonality reserve of $110,000 was collected. If funds are disbursed from the seasonality reserve, then borrower will be required to deposit the lesser of (i) 25% of the seasonality reserve cap ($110,000) and (ii) available cash flow after debt service and reserve and all other payments due under the loan until the seasonality reserve cap is reached (initially $110,000). | |
Loan No. 43 – Hampton Inn & Suites – Portland – At closing a seasonality reserve of $30,000 was collected. If funds are disbursed from the seasonality reserve, then borrower will be required to deposit the lesser of (i) 25% of the seasonality reserve cap ($19,000) and (ii) available cash flow after debt service and reserve and all other payments due under the loan until the seasonality reserve cap is reached (initially $30,000). | |
Loan No. 56 – Best Western Cleveland Airport – At closing a seasonality reserve of $19,000 was collected. If funds are disbursed from the seasonality reserve, then borrower will be required to deposit the lesser of (i) 25% of the seasonality reserve cap ($30,000) and (ii) available cash flow after debt service and reserve and all other payments due under the loan until the seasonality reserve cap is reached (initially $19,000). | |
(28) | 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. |
(29) | Loan No. 7 – Beach House Hilton Head – Beginning in April 2016, the borrower will be required to deposit an amount equal to 1/8 of the Seasonal Working Capital Reserve Account Annual Deposit on each monthly payment date in April, May, June, July, August, September, October and November if the seasonal working capital reserve account balance is less than the Seasonal Working Capital Reserve Account Annual Deposit |
A-1-44 |
Amount. On each monthly payment date, in December, January, February and/or March the borrower will be required to pay 1/12 of the estimated required monthly deposits into the tax reserve account, the insurance reserve account (if a blanket policy is no longer in place) and the FF&E reserve account due, in order to cover the respective amounts that were not collected during the Seasonal Working Capital Reserve Account Monthly Deposits. |
Loan No. 35 – Walgreens VA Beach – The borrower is required to deposit $1,250 per month if the Remediation Work is not completed by December 1, 2016.
(30) | Loan No. 1 – Equity Inns Portfolio – On a quarterly basis, the borrower will be required to make deposits into the PIP Reserve equal to a pre-determined amount set forth under the loan agreement, in the aggregate of $27,500,000. |
(31) | Loan No. 1 – Equity Inns Portfolio – Borrower may deliver a letter of credit to cure a DSCR trigger event which would cause a cash sweep, in an amount which, if applied to the outstanding principal balance of the Mortgage Loan would result in the required DSCR cash sweep cure threshold being satisfied. |
Loan No. 2 – 32 Avenue of the Americas – Borrower may deliver a letter of credit to avoid a DSCR trigger event which would cause a cash sweep, in an amount which, if applied to the outstanding principal balance of the Mortgage Loan would result in the DSCR trigger event not occurring.
Loan No. 3 – 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. 14 – Carrollwood Station – The borrower is planning to perform $1.55 million of renovations at the mortgaged property. With respect to $900,000 of such expenses, the borrower and guarantor provided a lien-free completion guaranty in such amount in lieu of providing cash reserves.
Loan No. 44 – 40 Wall Street – In lieu of monthly deposits into the insurance, replacement, TI/LC and ground rent reserve accounts, the sponsor has provided a personal guaranty which is capped at $26,000,000 (except with respect to lease termination payments, ground lease payments and insurance premiums, none of which are subject to the cap)
(32) | With respect to the Mortgage Loans identified below, the lender is insured under an environmental insurance policy obtained (i) in lieu of obtaining a Phase II Environmental Site Assessment, (ii) in lieu of providing an indemnity or guaranty from a sponsor or (iii) to address environmental conditions or concerns. 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 prospectus supplement. |
Loan No. | Mortgage Loan | Mortgage Loan Cut-off Date Balance | % of Initial Outstanding Pool Balance | Maximum Policy Amount | Premium Paid in Full | Expiration Date | ||||||
6 | Harvey Building Products Portfolio | $41,953,778 | 4.4% | $6,000,000 | Yes | 10/1/2023 | ||||||
35 | Walgreens VA Beach | $7,365,000 | 0.8% | $5,000,000 | Yes | 10/23/2023 |
A-1-45 |
(33) | Summary of Existing Pari Passu Debt |
Loan No. | Mortgage Loan | Mortgage Loan Cut-off DateBalance | 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 | Equity Inns Portfolio | $80,000,000 | $152,000,000 | $232,000,000 | 2.35x | 64.4% | 13.3% | |||||||
2 | 32 Avenue of the Americas | $70,000,000 | $355,000,000 | $425,000,000 | 1.88x | 55.2% | 9.8% | |||||||
3 | 11 Madison Avenue | $69,600,000 | $694,730,000 | $764,330,000 | (1) | 3.89x | 32.5% | 14.3% | ||||||
6 | Harvey Building Products Portfolio | $41,953,778 | $67,925,164 | $109,878,942 | 1.96x | 53.5% | 12.8% | |||||||
10 | Springfield Mall | $32,460,817 | $32,460,817 | $64,921,633 | 1.76x | 58.0% | 11.1% | |||||||
44 | 40 Wall Street | $4,960,524 | $153,776,230 | $158,736,754 | 2.13x | 29.4% | 14.2% |
(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. |
(34) | 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 | ||||||||||
3 | 11 Madison Avenue | $69,600,000 | $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 additionalpari passu loans and the subordinate companion loans. |
(35) | 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 | ||||||||||
3 | 11 Madison Avenue(1) | $69,600,000 | 7.2% | $325,000,000 | 4.7577%(2) | 9/6/2025 | Yes | 59.6% | 1.97x | 7.8% | ||||||||||
4 | 1209 DeKalb | $46,000,000 | 4.8% | $8,500,000 | 9.3750% | 10/6/2020 | Yes | 85.7% | 1.08x | 6.0% | ||||||||||
22 | Brentwood Retail Center | $13,290,772 | 1.4% | $2,000,000 | 10.0000% | 10/6/2025 | Yes | 76.5% | 1.01x | 7.1% |
(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 relatedpari 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 relatedpari 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 4.6500% and 4.8500%, respectively. |
(36) | Summary of Future Mezzanine Debt |
Loan No.(1) | 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 | |||||||
2 | 32 Avenue of the Americas | $70,000,000 | 7.3% | Yes | 1.90x | 53.7% | NAP | |||||||
4 | 1209 DeKalb | $46,000,000 | 4.8% | Yes | NAP | 72.3% | NAP | |||||||
5 | Good Samaritan Medical Tower | $42,700,000 | 4.4% | Yes | 1.35x | 62.8% | 8.4% | |||||||
7 | Beach House Hilton Head | $40,000,000 | 4.2% | Yes | 1.43x | 72.73% | 9.6% | |||||||
32 | 75 Executive Drive | $8,169,533 | 0.9% | Yes | 1.30x | 70.0% | NAP | |||||||
38 | Monument Creek | $6,640,000 | 0.7% | Yes | 1.40x | 75.0% | NAP | |||||||
58 | Family Dollar - Rose Hill | $997,500 | 0.1% | Yes | 1.20x | 85.0% | NAP | |||||||
59 | Family Dollar - Moultrie | $927,500 | 0.1% | Yes | 1.20x | 85.0% | NAP | |||||||
60 | Family Dollar - Biscoe | $857,500 | 0.1% | Yes | 1.20x | 85.0% | NAP | |||||||
61 | Family Dollar - Rockingham | $819,000 | 0.1% | Yes | 1.20x | 85.0% | NAP |
A-1-46 |
62 | Dollar General - De Soto | $702,000 | 0.1% | Yes | 1.20x | 85.0% | NAP |
(1) | The chart above does not include Harvey Building Products Portfolio Mortgage Loan, which allows for the borrower to obtain a pledge of direct or indirect interests in the guarantor of the mortgage loan to secure corporate level financing, provided that the value of the Harvey Building Products Portfolio Mortgaged Properties is not more than 25% of the value of all security for such financing. There is no requirement for an intercreditor agreement in connection with such pledges. |
A-1-47 |
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ANNEX A-2
CERTAIN POOL CHARACTERISTICS OF THE MORTGAGE LOANS
AND MORTGAGED PROPERTIES
Range of Cut-off Date Balances(1)(2)(3)(4)
Weighted Averages | |||||||||||||||||
Range of Cut-off Date Balances | Number of Mortgage Loans | Aggregate Cut-off Date Balance | % of Initial Outstanding Pool Balance | Mortgage Rate | Stated Remaining Term (Mos.) | U/W NCF DSCR | Cut-off Date LTV Ratio | LTV Ratio at Maturity or ARD | |||||||||
$702,000 - $7,499,999 | 28 | $ | 111,472,819 | 11.6% | 4.7221% | 117 | 1.54x | 65.3% | 51.6% | ||||||||
$7,500,000 - $14,999,999 | 14 | $ | 149,198,164 | 15.5% | 4.6503% | 119 | 1.51x | 65.7% | 57.2% | ||||||||
$15,000,000 - $24,999,999 | 9 | $ | 182,233,997 | 19.0% | 4.8435% | 105 | 1.46x | 68.0% | 61.1% | ||||||||
$25,000,000 - $49,999,999 | 8 | $ | 298,407,168 | 31.1% | 4.6816% | 101 | 1.67x | 61.8% | 54.8% | ||||||||
$50,000,000 - $74,999,999 | 2 | $ | 139,600,000 | 14.5% | 4.1979% | 119 | 2.88x | 43.9% | 43.9% | ||||||||
$75,000,000 - $80,000,000 | 1 | $ | 80,000,000 | 8.3% | 4.9600% | 59 | 2.35x | 64.4% | 64.4% | ||||||||
Total/Weighted Average | 62 | $ | 960,912,147 | 100.0% | 4.6650% | 105 | 1.82x | 61.6% | 55.2% |
Type of Mortgaged Properties(1)(2)(3)(4)(5)
Weighted Averages | |||||||||||||||||||||||
Property Type | Number of Mortgaged Properties | Aggregate Cut-off Date Balance | % of Initial Outstanding Pool Balance | Number of Units, Rooms, Beds, Pads or NRA | Cut-off Date Balance per # of Units, Rooms, Beds, Pads or NRA | Mortgage Rate | Stated Remaining Term (Mos.) | Occupancy | U/W NCF DSCR | Cut-off Date LTV Ratio | LTV Ratio at Maturity or ARD | ||||||||||||
Retail | 30 | $ | 311,283,850 | 32.4% | 2,040,752 | $253 | 4.6312% | 114 | 94.8% | 1.51x | 65.4% | 56.2% | |||||||||||
Anchored(6) | 21 | $ | 225,381,127 | 23.5% | 1,662,992 | $244 | 4.7197% | 113 | 94.6% | 1.48x | 67.1% | 58.6% | |||||||||||
Unanchored | 9 | $ | 85,902,723 | 8.9% | 377,760 | $278 | 4.3990% | 118 | 95.2% | 1.57x | 61.1% | 49.9% | |||||||||||
Office | 18 | $ | 273,595,382 | 28.5% | 5,219,507 | $391 | 4.3636% | 118 | 96.9% | 2.30x | 52.7% | 49.0% | |||||||||||
CBD | 4 | $ | 163,539,209 | 17.0% | 4,696,306 | $329 | 4.2478% | 119 | 98.7% | 2.67x | 46.2% | 44.5% | |||||||||||
Suburban | 12 | $ | 64,696,510 | 6.7% | 364,747 | $621 | 4.5143% | 114 | 96.6% | 1.61x | 61.8% | 50.6% | |||||||||||
Medical | 2 | $ | 45,359,663 | 4.7% | 158,454 | $288 | 4.5663% | 118 | 91.0% | 1.92x | 63.5% | 62.7% | |||||||||||
Hospitality | 27 | $ | 191,255,094 | 19.9% | 3,553 | $135,410 | 4.9807% | 94 | 75.2% | 1.91x | 64.3% | 57.4% | |||||||||||
Full Service | 3 | $ | 95,944,447 | 10.0% | 676 | $159,758 | 4.9837% | 119 | 73.0% | 1.55x | 64.5% | 53.8% | |||||||||||
Limited Service | 13 | $ | 45,845,129 | 4.8% | 1,438 | $84,992 | 4.9967% | 79 | 76.2% | 2.18x | 63.9% | 57.4% | |||||||||||
Extended Stay | 6 | $ | 31,310,345 | 3.3% | 784 | $164,105 | 4.9600% | 59 | 83.6% | 2.35x | 64.4% | 64.4% | |||||||||||
Select Service | 5 | $ | 18,155,172 | 1.9% | 655 | $84,564 | 4.9600% | 59 | 70.1% | 2.35x | 64.4% | 64.4% | |||||||||||
Multifamily | 9 | $ | 123,068,650 | 12.8% | 1,661 | $175,575 | 4.8713% | 86 | 97.7% | 1.44x | 68.8% | 64.5% | |||||||||||
Industrial | 29 | $ | 37,804,168 | 3.9% | 1,991,719 | $51 | 4.8500% | 59 | 100.0% | 1.96x | 53.5% | 49.3% | |||||||||||
Manufactured Housing Community | 4 | $ | 12,955,800 | 1.3% | 341 | $40,152 | 4.4831% | 119 | 98.1% | 1.74x | 64.4% | 57.1% | |||||||||||
Mixed Use | 2 | $ | 7,949,204 | 0.8% | 87,664 | $128 | 4.8385% | 119 | 86.5% | 1.31x | 68.0% | 55.7% | |||||||||||
Office/Retail | 2 | $ | 7,949,204 | 0.8% | 87,664 | $128 | 4.8385% | 119 | 86.5% | 1.31x | 68.0% | 55.7% | |||||||||||
Self Storage | 1 | $ | 3,000,000 | 0.3% | 12,060 | $249 | 5.0800% | 119 | 85.6% | 1.57x | 73.2% | 63.4% | |||||||||||
Total/Weighted Average | 120 | $ | 960,912,147 | 100.0% | 4.6650% | 105 | 92.0% | 1.82x | 61.6% | 55.2% |
A-2-1 |
Mortgaged Properties by State and/or Location(1)(2)(3)(4)(5)
Weighted Averages | |||||||||||||||||
State/Location | Number of Mortgaged Properties | Aggregate | % of Initial Outstanding Pool Balance | Mortgage | Stated Remaining Term (Mos.) | U/W NCF | Cut-off Date LTV Ratio | LTV Ratio at Maturity or | |||||||||
California | 14 | $ | 254,575,194 | 26.5% | 4.5703% | 112 | 1.59x | 62.8% | 55.9% | ||||||||
Southern(7) | 12 | $ | 197,660,680 | 20.6% | 4.6167% | 111 | 1.56x | 64.0% | 56.9% | ||||||||
Northern(7) | 2 | $ | 56,914,514 | 5.9% | 4.4092% | 119 | 1.69x | 58.6% | 52.4% | ||||||||
New York | 7 | $ | 199,074,357 | 20.7% | 4.3316% | 105 | 2.48x | 51.3% | 50.4% | ||||||||
New York City | 4 | $ | 190,560,524 | 19.8% | 4.3113% | 104 | 2.52x | 50.4% | 50.1% | ||||||||
Remaining New York State | 3 | $ | 8,513,833 | 0.9% | 4.7875% | 119 | 1.43x | 71.2% | 56.0% | ||||||||
Texas | 11 | $ | 85,658,646 | 8.9% | 4.7394% | 110 | 1.67x | 66.7% | 55.1% | ||||||||
Illinois | 12 | $ | 65,871,854 | 6.9% | 4.8663% | 112 | 1.58x | 61.9% | 50.2% | ||||||||
Pennsylvania | 6 | $ | 64,902,201 | 6.8% | 4.7012% | 117 | 1.54x | 64.0% | 54.4% | ||||||||
Florida | 6 | $ | 60,774,138 | 6.3% | 5.1132% | 86 | 1.74x | 64.1% | 61.6% | ||||||||
South Carolina | 1 | $ | 40,000,000 | 4.2% | 4.9000% | 119 | 1.58x | 72.7% | 62.8% | ||||||||
Michigan | 6 | $ | 34,422,027 | 3.6% | 4.6186% | 114 | 1.57x | 65.8% | 52.5% | ||||||||
Ohio | 5 | $ | 23,533,849 | 2.4% | 4.9255% | 119 | 1.36x | 73.9% | 61.4% | ||||||||
Massachusetts | 11 | $ | 16,590,431 | 1.7% | 4.8500% | 59 | 1.96x | 53.5% | 49.3% | ||||||||
Connecticut | 10 | $ | 16,577,920 | 1.7% | 4.9800% | 76 | 1.91x | 62.3% | 57.2% | ||||||||
Washington | 1 | $ | 14,517,241 | 1.5% | 4.9600% | 59 | 2.35x | 64.4% | 64.4% | ||||||||
North Carolina | 5 | $ | 13,831,612 | 1.4% | 4.9041% | 102 | 1.70x | 68.0% | 61.5% | ||||||||
New Hampshire | 5 | $ | 13,411,097 | 1.4% | 4.8500% | 59 | 1.96x | 53.5% | 49.3% | ||||||||
Georgia | 5 | $ | 11,053,377 | 1.2% | 4.9265% | 82 | 2.03x | 67.0% | 63.0% | ||||||||
Virginia | 2 | $ | 10,965,000 | 1.1% | 4.8665% | 99 | 1.35x | 64.4% | 60.0% | ||||||||
New Mexico | 2 | $ | 9,982,759 | 1.0% | 4.7421% | 104 | 1.58x | 69.7% | 63.2% | ||||||||
Colorado | 1 | $ | 6,640,000 | 0.7% | 4.4800% | 119 | 1.82x | 65.5% | 65.5% | ||||||||
Kentucky | 1 | $ | 3,948,276 | 0.4% | 4.9600% | 59 | 2.35x | 64.4% | 64.4% | ||||||||
Indiana | 1 | $ | 3,120,690 | 0.3% | 4.9600% | 59 | 2.35x | 64.4% | 64.4% | ||||||||
U.S. Virgin Islands | 1 | $ | 3,000,000 | 0.3% | 5.0800% | 119 | 1.57x | 73.2% | 63.4% | ||||||||
New Jersey | 1 | $ | 2,996,441 | 0.3% | 4.5210% | 119 | 1.71x | 52.6% | 42.6% | ||||||||
Rhode Island | 2 | $ | 1,931,018 | 0.2% | 4.8500% | 59 | 1.96x | 53.5% | 49.3% | ||||||||
Tennessee | 1 | $ | 1,706,897 | 0.2% | 4.9600% | 59 | 2.35x | 64.4% | 64.4% | ||||||||
Maine | 1 | $ | 800,936 | 0.1% | 4.8500% | 59 | 1.96x | 53.5% | 49.3% | ||||||||
Iowa | 1 | $ | 702,000 | 0.1% | 5.2100% | 119 | 1.88x | 65.0% | 65.0% | ||||||||
Vermont | 1 | $ | 324,188 | 0.0% | 4.8500% | 59 | 1.96x | 53.5% | 49.3% | ||||||||
Total/Weighted Average | 120 | $ | 960,912,147 | 100.0% | 4.6650% | 105 | 1.82x | 61.6% | 55.2% |
Range of U/W NCF DSCRs(1)(2)(3)(4)
Weighted Averages | |||||||||||||||||
Range of U/W NCF | Number of Mortgage Loans | Aggregate | % of Initial Outstanding Pool Balance | Mortgage Rate | Stated Remaining Term (Mos.) | U/W NCF DSCR | Cut-off Date LTV Ratio | LTV Ratio at Maturity or ARD | |||||||||
1.13x – 1.39x | 23 | $ | 232,088,778 | 24.2% | 4.7874% | 112 | 1.30x | 68.9% | 58.0% | ||||||||
1.40x – 1.44x | 2 | $ | 27,231,741 | 2.8% | 4.8125% | 119 | 1.42x | 67.3% | 57.4% | ||||||||
1.45x – 1.54x | 8 | $ | 131,926,281 | 13.7% | 4.8885% | 88 | 1.50x | 64.9% | 58.0% | ||||||||
1.55x – 1.99x | 24 | $ | 397,116,433 | 41.3% | 4.6743% | 113 | 1.77x | 61.4% | 55.7% | ||||||||
2.00x – 2.49x | 4 | $ | 102,948,914 | 10.7% | 4.7752% | 72 | 2.32x | 59.9% | 58.0% | ||||||||
2.50x – 3.89x | 1 | $ | 69,600,000 | 7.2% | 3.5602% | 118 | 3.89x | 32.5% | 32.5% | ||||||||
Total/Weighted Average | 62 | $ | 960,912,147 | 100.0% | 4.6650% | 105 | 1.82x | 61.6% | 55.2% |
Range of Cut-off Date LTV Ratios(1)(2)(3)(4)
Weighted Averages | |||||||||||||||||
Range of Cut-off Date | Number of Mortgage Loans | Aggregate | % of Initial Outstanding Pool Balance | Mortgage Rate | Stated Remaining Term (Mos.) | U/W NCF DSCR | Cut-off Date LTV Ratio | LTV Ratio | |||||||||
29.4% – 54.9% | 6 | $ | 168,455,190 | 17.5% | 4.2414% | 103 | 2.69x | 43.5% | 38.9% | ||||||||
55.0% – 59.9% | 9 | $ | 183,970,181 | 19.1% | 4.6143% | 119 | 1.74x | 56.7% | 51.1% | ||||||||
60.0% – 64.9% | 8 | $ | 212,257,755 | 22.1% | 4.7763% | 90 | 1.94x | 63.2% | 60.6% | ||||||||
65.0% – 69.9% | 15 | $ | 142,823,344 | 14.9% | 4.8186% | 119 | 1.41x | 67.6% | 55.8% | ||||||||
70.0% – 74.9% | 23 | $ | 241,780,678 | 25.2% | 4.8044% | 101 | 1.45x | 72.3% | 64.1% | ||||||||
75.0% – 75.0% | 1 | $ | 11,625,000 | 1.2% | 4.7905% | 119 | 1.36x | 75.0% | 66.1% | ||||||||
Total/Weighted Average | 62 | $ | 960,912,147 | 100.0% | 4.6650% | 105 | 1.82x | 61.6% | 55.2% |
A-2-2 |
Range of LTV Ratios at Maturity or ARD(1)(2)(3)(4)
Weighted Averages | |||||||||||||||||
Range of LTV Ratios | Number of Mortgage Loans | Aggregate Cut-off Date Balance | % of Initial Outstanding | Mortgage Rate | Stated | U/W NCF | Cut-off Date | LTV Ratio | |||||||||
21.1% – 49.9% | 18 | $ | 295,899,190 | 30.8% | 4.3613% | 110 | 2.21x | 50.5% | 41.8% | ||||||||
50.0% – 54.9% | 4 | $ | 31,218,715 | 3.2% | 4.4033% | 118 | 1.58x | 61.4% | 53.3% | ||||||||
55.0% – 59.9% | 18 | $ | 261,914,921 | 27.3% | 4.7547% | 119 | 1.54x | 64.9% | 56.7% | ||||||||
60.0% – 64.9% | 10 | $ | 252,210,821 | 26.2% | 4.8793% | 95 | 1.88x | 66.2% | 62.9% | ||||||||
65.0% – 72.3% | 12 | $ | 119,668,500 | 12.5% | 4.8367% | 84 | 1.41x | 72.1% | 69.3% | ||||||||
Total/Weighted Average | 62 | $ | 960,912,147 | 100.0% | 4.6650% | 105 | 1.82x | 61.6% | 55.2% |
Range of Mortgage Rates(1)(2)(3)(4)
Weighted Averages | |||||||||||||||||
Range of Mortgage | Number of Mortgage Loans | Aggregate Cut-off Date Balance | % of Initial Outstanding | Mortgage Rate | Stated Remaining Term (Mos.) | U/W NCF DSCR | Cut-off Date LTV Ratio | LTV Ratio at Maturity | |||||||||
3.5602% – 4.4999% | 13 | $ | 235,547,156 | 24.5% | 4.1204% | 118 | 2.37x | 51.4% | 45.3% | ||||||||
4.5000% – 4.7499% | 18 | $ | 231,989,828 | 24.1% | 4.6214% | 107 | 1.51x | 66.8% | 59.7% | ||||||||
4.7500% – 5.3380% | 31 | $ | 493,375,163 | 51.3% | 4.9456% | 99 | 1.70x | 64.0% | 57.8% | ||||||||
Total/Weighted Average | 62 | $ | 960,912,147 | 100.0% | 4.6650% | 105 | 1.82x | 61.6% | 55.2% |
Range of Remaining Terms to Maturity or ARD in Months(1)(2)(3)(4)
Weighted Averages | |||||||||||||||||
Range of Remaining | Number of Mortgage Loans | Aggregate Cut-off Date Balance | % of Initial Outstanding | Mortgage Rate | Stated Remaining Term (Mos.) | U/W NCF DSCR | Cut-off Date | LTV Ratio at Maturity | |||||||||
58 – 60 | 6 | $ | 213,653,778 | 22.2% | 4.9297% | 59 | 1.89x | 64.5% | 63.3% | ||||||||
112 – 117 | 4 | $ | 30,818,002 | 3.2% | 4.2493% | 117 | 1.67x | 58.3% | 49.5% | ||||||||
118 – 120 | 52 | $ | 716,440,367 | 74.6% | 4.6040% | 119 | 1.81x | 60.9% | 53.0% | ||||||||
Total/Weighted Average | 62 | $ | 960,912,147 | 100.0% | 4.6650% | 105 | 1.82x | 61.6% | 55.2% |
Range of Original Terms to Maturity or ARD in Months(1)(2)(3)(4)
Weighted Averages | |||||||||||||||||
Range of Original | Number of Mortgage Loans | Aggregate Cut-off Date Balance | % of Initial Outstanding | Mortgage Rate | Stated Remaining Term (Mos.) | U/W NCF DSCR | Cut-off Date LTV Ratio | LTV Ratio at Maturity | |||||||||
60 | 6 | $ | 213,653,778 | 22.2% | 4.9297% | 59 | 1.89x | 64.5% | 63.3% | ||||||||
120 | 56 | $ | 747,258,370 | 77.8% | 4.5894% | 119 | 1.80x | 60.8% | 52.9% | ||||||||
Total/Weighted Average | 62 | $ | 960,912,147 | 100.0% | 4.6650% | 105 | 1.82x | 61.6% | 55.2% |
Range of U/W NOI Debt Yields(1)(2)(3)(4)
Weighted Averages | |||||||||||||||||
Range of U/W NOI Debt | Number of Mortgage Loans | Aggregate Cut-off Date Balance | % of Initial Outstanding | Mortgage Rate | Stated Remaining Term (Mos.) | U/W NCF DSCR | Cut-off Date LTV Ratio | LTV Ratio at Maturity | |||||||||
7.1% – 8.9% | 23 | $ | 290,963,657 | 30.3% | 4.7809% | 101 | 1.42x | 67.6% | 61.7% | ||||||||
9.0% – 9.9% | 12 | $ | 199,872,235 | 20.8% | 4.7444% | 119 | 1.68x | 63.3% | 57.7% | ||||||||
10.0% – 12.4% | 18 | $ | 238,886,538 | 24.9% | 4.6758% | 118 | 1.60x | 62.8% | 52.0% | ||||||||
12.5% – 14.9% | 8 | $ | 226,201,328 | 23.5% | 4.4291% | 86 | 2.70x | 51.1% | 48.5% | ||||||||
15.0% – 18.4% | 1 | $ | 4,988,391 | 0.5% | 4.9100% | 119 | 2.12x | 56.0% | 35.3% | ||||||||
Total/Weighted Average | 62 | $ | 960,912,147 | 100.0% | 4.6650% | 105 | 1.82x | 61.6% | 55.2% |
A-2-3 |
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, the DSCR was calculated using Annual Debt Service equal to the first twelve (12) monthly payments of principal and interest payable during the amortization period. |
2) | With respect to the Equity Inns Portfolio Mortgage Loan, 32 Avenue of the Americas Mortgage Loan, 11 Madison Avenue Mortgage Loan, Harvey Building Products Portfolio Mortgage Loan, Springfield Mall Mortgage Loan and 40 Wall Street Mortgage Loan, the loan-to-value ratios, debt yields, debt service coverage ratios and Cut-off Date Balance per number of Units, Rooms, Beds, Pads or NRA calculations include all related pari passu 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 1 Mortgage Loan, representing 8.3% of the Initial Outstanding Pool Balance, the Cut-off Date LTV Ratio and LTV Ratio at Maturity or ARD has been calculated based on the“portfolio” appraised value.With respect to 1 Mortgage Loan, representing 3.4% of the Initial Outstanding Pool Balance, the Cut-off Date LTV Ratio and LTV Ratio at Maturity or ARD has been calculated based on the “as stabilized” appraised value. 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, regional mall and urban 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-2-4 |
ANNEX A-3
CLASS A-SB PLANNED PRINCIPAL BALANCE SCHEDULE
Period | Balance ($) | Period | Balance ($) | Period | Balance ($) |
Initial Balance | 53,371,000.00 | 39 | 53,371,000.00 | 78 | 36,836,359.52 |
1 | 53,371,000.00 | 40 | 53,371,000.00 | 79 | 35,969,938.39 |
2 | 53,371,000.00 | 41 | 53,371,000.00 | 80 | 35,038,716.37 |
3 | 53,371,000.00 | 42 | 53,371,000.00 | 81 | 34,165,039.94 |
4 | 53,371,000.00 | 43 | 53,371,000.00 | 82 | 33,287,838.14 |
5 | 53,371,000.00 | 44 | 53,371,000.00 | 83 | 32,346,140.93 |
6 | 53,371,000.00 | 45 | 53,371,000.00 | 84 | 31,461,597.69 |
7 | 53,371,000.00 | 46 | 53,371,000.00 | 85 | 30,512,767.06 |
8 | 53,371,000.00 | 47 | 53,371,000.00 | 86 | 29,620,823.71 |
9 | 53,371,000.00 | 48 | 53,371,000.00 | 87 | 28,725,280.96 |
10 | 53,371,000.00 | 49 | 53,371,000.00 | 88 | 27,645,039.07 |
11 | 53,371,000.00 | 50 | 53,371,000.00 | 89 | 26,741,517.56 |
12 | 53,371,000.00 | 51 | 53,371,000.00 | 90 | 25,774,246.41 |
13 | 53,371,000.00 | 52 | 53,371,000.00 | 91 | 24,863,173.10 |
14 | 53,371,000.00 | 53 | 53,371,000.00 | 92 | 23,888,564.14 |
15 | 53,371,000.00 | 54 | 53,371,000.00 | 93 | 22,969,878.70 |
16 | 53,371,000.00 | 55 | 53,371,000.00 | 94 | 22,047,485.44 |
17 | 53,371,000.00 | 56 | 53,371,000.00 | 95 | 21,061,877.29 |
18 | 53,371,000.00 | 57 | 53,371,000.00 | 96 | 20,131,781.43 |
19 | 53,371,000.00 | 58 | 53,371,000.00 | 97 | 19,138,688.93 |
20 | 53,371,000.00 | 59 | 53,370,777.95 | 98 | 18,200,828.89 |
21 | 53,371,000.00 | 60 | 52,571,082.81 | 99 | 17,259,183.32 |
22 | 53,371,000.00 | 61 | 51,704,695.98 | 100 | 16,195,999.88 |
23 | 53,371,000.00 | 62 | 50,898,278.66 | 101 | 15,246,258.50 |
24 | 53,371,000.00 | 63 | 50,088,608.53 | 102 | 14,234,077.13 |
25 | 53,371,000.00 | 64 | 49,086,243.33 | 103 | 13,276,414.55 |
26 | 53,371,000.00 | 65 | 48,269,258.05 | 104 | 12,256,536.42 |
27 | 53,371,000.00 | 66 | 47,386,071.03 | 105 | 11,290,889.31 |
28 | 53,371,000.00 | 67 | 46,562,225.43 | 106 | 10,321,344.02 |
29 | 53,371,000.00 | 68 | 45,672,372.49 | 107 | 9,289,919.88 |
30 | 53,371,000.00 | 69 | 44,841,611.77 | 108 | 8,312,295.09 |
31 | 53,371,000.00 | 70 | 44,007,499.60 | 109 | 7,273,020.37 |
32 | 53,371,000.00 | 71 | 43,107,671.02 | 110 | 6,287,251.48 |
33 | 53,371,000.00 | 72 | 42,266,561.72 | 111 | 5,297,502.83 |
34 | 53,371,000.00 | 73 | 41,359,934.28 | 112 | 4,131,826.78 |
35 | 53,371,000.00 | 74 | 40,511,771.93 | 113 | 3,133,371.09 |
36 | 53,371,000.00 | 75 | 39,660,187.63 | 114 | 2,073,855.70 |
37 | 53,371,000.00 | 76 | 38,619,811.05 | 115 | 1,067,089.37 |
38 | 53,371,000.00 | 77 | 37,760,587.72 | 116 and after | 0.00 |
A-3-1 |
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
ANNEX B
DESCRIPTION OF THE TOP 20 MORTGAGE LOANS
B-1 |
Various | Collateral Asset Summary – Loan No. 1 Equity Inns Portfolio | Cut-off Date Balance: | $80,000,000 |
Cut-off Date LTV: | 64.4% | ||
U/W NCF DSCR: | 2.35x | ||
U/W NOI Debt Yield: | 13.3% |
B-2 |
Various | Collateral Asset Summary – Loan No. 1 Equity Inns Portfolio | Cut-off Date Balance: | $80,000,000 |
Cut-off Date LTV: | 64.4% | ||
U/W NCF DSCR: | 2.35x | ||
U/W NOI Debt Yield: | 13.3% |
Mortgage Loan Information | |
Loan Seller: | LCF/GACC |
Loan Purpose: | Refinance |
Sponsor: | American Realty Capital Hospitality Trust, Inc. |
Borrowers(1): | Various |
Original Balance(2): | $80,000,000 |
Cut-off Date Balance(2): | $80,000,000 |
% by Initial UPB: | 8.3% |
Interest Rate: | 4.9600% |
Payment Date: | 6thof each month |
First Payment Date: | November 6, 2015 |
Maturity Date: | October 6, 2020 |
Amortization: | Interest Only |
Additional Debt(2): | $152,000,000Pari Passu Debt |
Call Protection(3)(4): | L(25), YM1(31), O(4) |
Lockbox / Cash Management: | Hard / In-Place |
Reserves(5) | ||
Initial | Monthly | |
Taxes: | $890,215 | $296,738 |
Insurance: | $0 | Springing |
Required Repairs: | $160,928 | NAP |
FF&E: | $0 | 1/12 of 4.0% of Annual Gross Revenue |
PIP: | $10,000,000 | Springing |
Financial Information(6) | ||
Cut-off Date Balance / Room: | $86,245 | |
Balloon Balance / Room: | $86,245 | |
Cut-off Date LTV: | 64.4% | |
Balloon LTV: | 64.4% | |
Underwritten NOI DSCR: | 2.65x | |
Underwritten NCF DSCR: | 2.35x | |
Underwritten NOI Debt Yield: | 13.3% | |
Underwritten NCF Debt Yield: | 11.8% | |
Underwritten NOI Debt Yield at Balloon: | 13.3% | |
Underwritten NCF Debt Yield at Balloon: | 11.8% | |
Property Information | ||
Single Asset / Portfolio: | Portfolio of 21 properties | |
Property Type: | Various Hospitality | |
Collateral: | Fee Simple | |
Location: | Various | |
Year Built / Renovated: | Various | |
Total Rooms: | 2,690 | |
Property Management(7): | Various | |
Underwritten NOI: | $30,891,289 | |
Underwritten NCF: | $27,397,249 | |
Appraised Value(8): | $360,000,000 | |
Appraisal Date: | August 2015 | |
Historical NOI | ||
Most Recent NOI: | $30,619,478 (T-12 July 31, 2015) | |
2014 NOI: | $30,077,135 (December 31, 2014) | |
2013 NOI: | $27,347,248 (December 31, 2013) | |
2012 NOI: | $25,736,730 (December 31, 2012) | |
Historical Occupancy | ||
Most Recent Occupancy: | 75.6% (July 31, 2015) | |
2014 Occupancy: | 74.6% (December 31, 2014) | |
2013 Occupancy: | 72.4% (December 31, 2013) | |
2012 Occupancy: | 70.0% (December 31, 2012) |
(1) | ARC Hospitality Portfolio II Owner, LLC; ARC Hospitality Portfolio II TRS, LLC; ARC Hospitality Portfolio II MISC TRS, LLC; ARC Hospitality Portfolio II HIL TRS, LLC; ARC Hospitality Stratford, LLC; ARC Hospitality TRS Stratford, LLC; ARC Hospitality Portfolio II NTC Owner, LP; ARC Hospitality Portfolio II NTC HIL TRS, LP; ARC Hospitality Portfolio II NTC TRS, LP |
(2) | The Original Balance and Cut-off Date Balance of $80.0 million represent both the controlling Note A-1-A and non-controlling Note A-4-A of the $232.0 million Equity Inns Portfolio Loan Combination evidenced by nine pari passu notes. The pari passu companion loans are comprised of the non-controlling Note A-1-B, Note A-2-A, A-2-B, Note A-3, Note A-4-B, Note A-5 and Note A-6, with an aggregate original principal balance of $152.0 million. For additional information on the pari passu companion loans, see “The Loan” herein. |
(3) | The lockout period will be at least 25 payment dates beginning with and including the first payment date of November 6, 2015. Prepayment of the full $232.0 million Equity Inns 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) December 31, 2017. The assumed lockout period of 25 payments is based on the expected COMM 2015-LC23 securitization closing date in November 2015. The actual lockout period may be longer. |
(4) | Partial release is permitted. See “Partial Release” herein. |
(5) | See “Initial Reserves” and “Ongoing Reserves” herein. |
(6) | DSCR, LTV, Debt Yield, and Balance / Room calculations are based on the aggregate $232.0 million Equity Inns Portfolio Loan Combination. |
(7) | Homewood Suites Management, LLC; Crestline Hotels & Resorts, LLC; Hampton Inns Management LLC; McKibbon Hotel Management, Inc. |
(8) | The Appraised Value of $360.0 million reflects a premium attributed to the aggregate value of the Equity Inns Portfolio as a whole. The sum of the value of each of the properties on an individual basis is $322.4 million, which represents a Cut-off Date LTV of 72.0%. |
Historical Occupancy, ADR, RevPAR(1) | |||||||||
Year | Equity Inns Portfolio | Competitive Set | Penetration Factor | ||||||
Occupancy(2) | ADR(2) | RevPAR(2) | Occupancy | ADR | RevPAR | Occupancy | ADR | RevPAR | |
2012 | 70.0% | $103.35 | $72.88 | 65.4% | $94.55 | $63.45 | 106.6% | 108.7% | 113.2% |
2013 | 72.4% | $106.32 | $77.07 | 66.1% | $98.36 | $66.68 | 109.2% | 107.7% | 115.4% |
2014 | 74.3% | $110.66 | $82.41 | 68.8% | $103.17 | $72.96 | 108.0% | 106.7% | 113.5% |
T-12 Jul 2015 | 75.6% | $113.75 | $86.05 | 70.7% | $105.59 | $75.50 | 106.8% | 107.5% | 115.5% |
(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 Equity Inns Portfolio are attributable to variances in reporting methodologies and/or timing differences. |
B-3 |
Various | Collateral Asset Summary – Loan No. 1 Equity Inns Portfolio | Cut-off Date Balance: | $80,000,000 |
Cut-off Date LTV: | 64.4% | ||
U/W NCF DSCR: | 2.35x | ||
U/W NOI Debt Yield: | 13.3% |
The Loan.The Equity Inns Portfolio loan (the “Equity Inns Portfolio Loan”) consists of the controlling Note A-1-A and non-controlling Note A-4-A in the aggregate original principal amount of $80.0 million of a fixed rate loan in the aggregate principal amount of $232.0 million (the “Equity Inns Portfolio Loan Combination”). The Equity Inns Portfolio Loan Combination is secured by the applicable borrowers’ fee simple interests and operating leasehold interests in a portfolio of 21 hotel properties located across 13 states, totaling 2,690 rooms (the “Equity Inns Portfolio” or the “Equity Inns Portfolio Properties”). The Equity Inns Portfolio Loan Combination was co-originated by Ladder Capital Finance LLC (“LCF”) and German American Capital Corporation (“GACC”) and is evidenced by nine pari passu notes. Of the Equity Inns Portfolio Loan Combination, only the controlling Note A-1-A and non-controlling Note A-4-A, with an aggregate original principal balance of $80.0 million, will be included in the COMM 2015-LC23 mortgage trust. The non-controlling Note A-1-B, with an original principal balance of $12.0 million, Note A-2-A, with an original principal balance of $30.0 million, Note A-2-B, with an original principal balance of $9.6 million, and Note A-3, with an original principal balance of $39.6 million are currently held by LCF and are expected to be included in one or more future securitizations. The non-controlling Note A-4-B, with an original principal balance of $8.0 million, Note A-5, with an original principal balance of $26.4 million and Note A-6, with an original principal balance of $26.4 million are currently held by GACC and are expected to be included in one or more future securitizations.
The relationship between the holders of the Note A-1-A, Note A-1-B, Note A-2-A, Note A-2-B, Note A-3, Note A-4-A, Note A-4-B, Note A-5 and Note A-6 will be governed by a co-lender agreement as described under“Description of the Mortgage Pool – Loan Combinations – Equity Inns Portfolio”in the accompanying prospectus supplement.
Loan Combination Summary | ||||
Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece | |
Note A-1-A & Note A-4-A | $80,000,000 | $80,000,000 | COMM 2015-LC23 | Yes(1) |
Note A-1-B, Note A-2-A, Note A-2-B & Note A-3 | $91,200,000 | $91,200,000 | LCF | No |
Note A-4-B, Note A-5 & Note A-6 | $60,800,000 | $60,800,000 | GACC | No |
Total | $232,000,000 | $232,000,000 |
(1) Only the $48.0 million Note A-1-A is controlling.
The Equity Inns Portfolio Loan has a five-year interest only term and accrues interest at a fixed rate equal to 4.9600% perannum. Loan proceeds were used to retire existing debt, inclusive of accrued interest and other fees, of approximately $228.8 million, fund reserves of approximately $11.1 million and pay closing costs of approximately $3.6 million. Based on the portfolio appraised value of $360.0 million the cut-off date LTV is 64.4%. The most recent prior financing of the Equity Inns Portfolio Properties was not included in a securitization.
Sources and Uses | ||||||
Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
Mortgage Loan | $232,000,000 | 95.3% | Loan Payoff | $228,749,792 | 94.0% | |
Equity Contribution(1) | $11,371,163 | 4.7% | Reserves | $11,051,143 | 4.5% | |
Closing Costs | $3,570,228 | 1.5% | ||||
Total Sources | $243,371,163 | 100.0% | Total Uses | $243,371,163 | 100.0% |
(1) | The borrower acquired twenty of the twenty-one properties on February 27, 2015 for $346,837,695 ($135,642/Room) while also leveraging the 21st property (Homewood Suites Stratford) which the borrower acquired previously on March 21, 2014. In order to acquire the twenty properties and leverage the 21st property, the borrower used approximately $227.0 million of first mortgage debt, approximately $99.0 million of preferred equity, and approximately $38.4 million of equity. Since closing of the previous transaction, the borrower has paid down the preferred equity by approximately $23.2 million to a balance of $75.8 million, deposited $10.0 million into a PIP Reserve for such transaction, and completed the approximately $3.4 million PIP at the Homewood Suites Stratford. |
The Borrower / Sponsor.The borrower consists of six single purpose Delaware limited liability companies and three single purpose Delaware limited partnerships, each structured to be bankruptcy remote, with two independent directors in its organizational structure. The sponsor of the borrowers and non-recourse carve out guarantor is American Realty Capital Hospitality Trust, Inc.
American Realty Capital Hospitality Trust, Inc. (“ARC Hospitality”), a public non-traded real estate investment trust (“REIT”), focuses on acquiring upper midscale, upscale and upper upscale lodging properties in the select service, extended stay and small full service segments within the hospitality sector, franchised by leading global brands including Hilton, Marriott, Hyatt, IHG and Starwood Hotels & Resorts Worldwide, Inc.. The acquisition of the Equity Inns Portfolio on February 27, 2015 (and contemporaneous acquisition of 116 hotels) established ARC Hospitality as one of the largest owners of select-service hotels (by enterprise value) in the North American lodging REIT sector, with a current portfolio of approximately 122 hotels totaling 14,924 rooms.
The external advisor of ARC Hospitality is American Realty Capital Hospitality Advisors, LLC a subsidiary of AR Capital, LLC (“AR Capital”). AR Capital owns a 60% interest in Crestline Hotels & Resorts, LLC (“Crestline”), the hotel manager of twelve of the Equity Inns Portfolio Properties and a 100% interest in the Operators (as defined below) of each of the Equity Inns Portfolio Properties (and through which each of the hotel managers, including Crestline, is employed) (see Property Management section below). AR Capital also owns less than a 3.0% interest in the borrowers. In August 2015, AMH Holdings (Cayman), L.P., an affiliate of Apollo Global Management, LLC, entered into a transaction agreement with AR Capital pursuant to which the parties agreed, subject to satisfaction of
B-4 |
Various | Collateral Asset Summary – Loan No. 1 Equity Inns Portfolio | Cut-off Date Balance: | $80,000,000 |
Cut-off Date LTV: | 64.4% | ||
U/W NCF DSCR: | 2.35x | ||
U/W NOI Debt Yield: | 13.3% |
certain conditions, that AMH Holdings (Cayman), L.P. would acquire a 60% stake in a new company called AR Global Investments, LLC, the remaining 40% of which would be owned by AR Capital, to which AR Capital would transfer substantially all of its ongoing asset management business. However, on November 9, 2015, Apollo Global Management, LLC and AR Capital announced that they have mutually agreed to terminate the planned transaction. AR Capital and certain of its principals are subject to litigation. See“Risk Factors—Risk Related to the Mortgage Loans—Prior Bankruptcies, Defaults or Other Proceedings May be Relevant to Future Performance” in the accompanying prospectus supplement.
The Properties.The Equity Inns Portfolio Loan is secured by the fee simple interests and operating leasehold interests in 21 hotel properties located across 13 states, totaling 2,690 rooms. Hotels are operated under 7 brands. A breakdown of the brands and portfolio can be found below:
Brand Breakdown | |||||||||
Brand | # Hotels | Rooms | % of Rooms | Allocated Loan Amount | $/Room | “As-is” Appraised Value(1) | LTV(1) | UW NCF | % UW NCF |
Homewood Suites | 4 | 613 | 22.8% | $77,800,000 | $126,917 | $107,900,000 | 72.1% | $8,389,131 | 30.6% |
Hampton Inn | 9 | 1,163 | 43.2% | $77,050,000 | $66,251 | $106,300,000 | 72.5% | $9,753,254 | 35.6% |
Courtyard | 3 | 414 | 15.4% | $34,000,000 | $82,126 | $48,800,000 | 69.7% | $3,930,897 | 14.3% |
Hilton Garden Inn | 2 | 241 | 9.0% | $18,650,000 | $77,386 | $24,700,000 | 75.5% | $2,297,055 | 8.4% |
SpringHill Suites | 1 | 88 | 3.3% | $11,500,000 | $130,682 | $16,400,000 | 70.1% | $1,393,398 | 5.1% |
TownePlace Suites | 1 | 93 | 3.5% | $8,500,000 | $91,398 | $12,100,000 | 70.2% | $1,028,701 | 3.8% |
Residence Inn | 1 | 78 | 2.9% | $4,500,000 | $57,692 | $6,200,000 | 72.6% | $604,813 | 2.2% |
Total | 21 | 2,690 | 100.0% | $232,000,000 | $86,245 | $360,000,000 | 64.4% | $27,397,249 | 100.0% |
(1) | The Portfolio “As-Is” Appraised Value of $360.0 million reflects a premium attributed to the aggregate value of the Equity Inns Portfolio as a whole. The sum of the value of each of the properties on an individual basis is $322.4 million, which results in an LTV of 72.0%. |
Portfolio Summary | |||||||
Property Name | City | State | Rooms | Year | Ownership Interest | “As-is” Appraised Value(1) | Allocated Loan Amount |
Homewood Suites Seattle | Seattle | WA | 161 | 1998 | Fee Simple | $56,700,000 | $42,100,000 |
Homewood Suites Orlando | Orlando | FL | 252 | 1999 | Fee Simple | $26,100,000 | $18,350,000 |
Courtyard Carlsbad | Carlsbad | CA | 145 | 2000 | Fee Simple | $21,800,000 | $14,600,000 |
Courtyard Houston | Houston | TX | 176 | 1979 | Fee Simple | $18,200,000 | $13,500,000 |
Homewood Suites Stratford | Stratford | CT | 135 | 2002 | Fee Simple | $18,600,000 | $12,500,000 |
Hampton Inn Urbana | Urbana | IL | 130 | 1995 | Fee Simple | $16,800,000 | $12,400,000 |
Springhill Suites Asheville | Asheville | NC | 88 | 2001 | Fee Simple | $16,400,000 | $11,500,000 |
Hilton Garden Inn Louisville | Louisville | KY | 112 | 1999 | Fee Simple | $15,100,000 | $11,450,000 |
Hampton Inn Orlando | Orlando | FL | 170 | 1999 | Fee Simple | $14,800,000 | $11,150,000 |
Hampton Inn Austin | Austin | TX | 121 | 1985 | Fee Simple | $14,600,000 | $11,000,000 |
Hampton Inn College Station | College Station | TX | 133 | 1986 | Fee Simple | $14,100,000 | $10,500,000 |
Hampton Inn Indianapolis | Indianapolis | IN | 128 | 1987 | Fee Simple | $12,200,000 | $9,050,000 |
TownePlace Suites Savannah | Savannah | GA | 93 | 2000 | Fee Simple | $12,100,000 | $8,500,000 |
Hampton Inn East Lansing | East Lansing | MI | 86 | 2000 | Fee Simple | $10,800,000 | $8,000,000 |
Hampton Inn Naperville | Naperville | IL | 129 | 1987 | Fee Simple | $9,800,000 | $7,300,000 |
Hilton Garden Inn Rio Rancho | Rio Rancho | NM | 129 | 1998 | Fee Simple | $9,600,000 | $7,200,000 |
Courtyard Dalton | Dalton | GA | 93 | 1999 | Fee Simple | $8,800,000 | $5,900,000 |
Hampton Inn Alcoa | Alcoa | TN | 118 | 1989 | Fee Simple | $8,000,000 | $4,950,000 |
Homewood Suites Augusta | Augusta | GA | 65 | 1997 | Fee Simple | $6,500,000 | $4,850,000 |
Residence Inn Jacksonville(2) | Jacksonville | FL | 78 | 1999 | Fee Simple | $6,200,000 | $4,500,000 |
Hampton Inn Milford | Milford | CT | 148 | 1986 | Fee Simple | $5,200,000 | $2,700,000 |
Total | 2,690 | $322,400,000 | $232,000,000 | ||||
Total w/ Portfolio Premium | $360,000,000 |
(1) | The Portfolio “As-Is” Appraised Value of $360.0 million reflects a premium attributed to the aggregate value of the Equity Inns Portfolio as a whole. The sum of the value of each of the properties on an individual basis is $322.4 million. |
(2) | With respect to the Residence Inn Jacksonville Property, the borrower has entered into a continuing forbearance agreement dated October 20, 2015 with the related franchisor, pursuant to which the borrower acknowledged that it was in default under its franchise agreement, and the franchisor agreed to forbear from terminating such franchise agreement provided the borrower complied with certain conditions related to the property improvement plan and the franchisor’s quality assurance program. If the borrower fails to satisfy such conditions, the franchisor will have the right to terminate the franchise agreement. See “Risk Factors—Risks Related to the Mortgage Loans—Hospitality Properties Have Special Risks” in the prospectus supplement. |
All 21 hotels in the Equity Inns Portfolio are operated under management agreements with Crestline (12 hotels), Hilton (7 hotels) or McKibbon (2 hotels). The hotels range in age from 13 to 29 years old with an average age of 20 and an average room count of 128. Approximately $56.4 million ($20,960 per room) of capital expenditures have been made since 2008 in order to update the portfolio and
B-5 |
Various | Collateral Asset Summary – Loan No. 1 Equity Inns Portfolio | Cut-off Date Balance: | $80,000,000 |
Cut-off Date LTV: | 64.4% | ||
U/W NCF DSCR: | 2.35x | ||
U/W NOI Debt Yield: | 13.3% |
to maintain competitiveness within each asset’s market. The borrower is required to invest approximately $45,571,108 ($17,819/Room) across 20 of the 21 hotels for Property Improvement Plans (“PIPs”) to upgrade each hotel to the most current brand standards over the next four years (through Q4 2019). The borrower deposited $10,000,000 into a PIP Reserve at origination for completion of the PIPs. Additional reserve deposits aggregating $27,500,000 are required to be made by the borrowers in eleven quarterly scheduled payments beginning in December 2015 and ending in June 2018, as described in more detail below under “Ongoing Reserves.” The borrower completed the $3.4 million ($25,185/Room) PIP at the Homewood Suites Stratford in March 2015.
Historical Capital Expenditures(1) | ||||||
2008-2010 | 2011 | 2012 | 2013 | 2014 | Total | |
Total | $34,231,898 | $5,358,103 | $5,833,847 | $3,285,312 | $7,673,988 | $56,383,148 |
Per Room | $12,726 | $1,992 | $2,169 | $1,221 | $2,853 | $20,960 |
(1) | Source: Borrower. |
The Equity Inns Portfolio is located across 13 states and no one state accounts for more than 18.6% of the portfolio’s total rooms or 16.7% of underwritten net cash flow. Florida represents the largest exposure to a single state, with three assets totaling 18.6% of the portfolio’s total room count and 14.1% of underwritten net cash flow. No other state accounts for more than 16.2% of total underwritten net cash flow; which is represented by the three properties in Texas. A chart demonstrating exposure to various states in the Equity Inns Portfolio can be found below.
Regional Breakdown | |||||||||
Region | # Hotels | Rooms | % of Rooms | Occupancy(1) | ADR(1) | RevPAR(1) | RevPAR Penetration(1) | UW NCF | % of UW NCF |
California | 1 | 145 | 5.4% | 73.5% | $131.50 | $96.60 | 83.0% | $1,609,353 | 5.9% |
Connecticut | 2 | 283 | 10.5% | 73.2% | $103.21 | $76.24 | 109.4% | $1,494,576 | 5.5% |
Florida | 3 | 500 | 18.6% | 78.8% | $104.20 | $81.80 | 101.3% | $3,852,864 | 14.1% |
Georgia | 3 | 251 | 9.3% | 80.8% | $97.21 | $78.45 | 135.0% | $2,374,046 | 8.7% |
Illinois | 2 | 259 | 9.6% | 70.0% | $114.79 | $80.38 | 117.9% | $2,582,459 | 9.4% |
Indiana | 1 | 128 | 4.8% | 77.9% | $101.16 | $78.82 | 121.4% | $1,127,456 | 4.1% |
Kentucky | 1 | 112 | 4.2% | 77.1% | $120.74 | $93.11 | 121.1% | $1,440,820 | 5.3% |
Michigan | 1 | 86 | 3.2% | 81.0% | $124.52 | $100.91 | 147.9% | $1,128,186 | 4.1% |
North Carolina | 1 | 88 | 3.3% | 76.3% | $130.06 | $99.27 | 98.0% | $1,393,398 | 5.1% |
New Mexico | 1 | 129 | 4.8% | 73.2% | $89.79 | $65.71 | 180.6% | $856,235 | 3.1% |
Tennessee | 1 | 118 | 4.4% | 81.4% | $72.53 | $59.01 | 108.7% | $523,523 | 1.9% |
Texas | 3 | 430 | 16.0% | 66.2% | $125.29 | $82.45 | 107.6% | $4,439,866 | 16.2% |
Washington | 1 | 161 | 6.0% | 89.0% | $179.07 | $159.38 | 106.7% | $4,574,467 | 16.7% |
Total / Wtd. Avg. | 21 | 2,690 | 100.0% | 75.6% | $113.75 | $86.05 | 115.5% | $27,397,249 | 100.0% |
(1) | Occupancy, ADR, RevPAR and RevPAR Penetration are based on a July 2015 Hospitality Research Report. The minor variances between the underwriting, the hospitality research report and the above table with respect to Occupancy, ADR and RevPAR at the Equity Inns Portfolio are attributable to variances in reporting methodologies and/or timing differences. |
B-6 |
Various | Collateral Asset Summary – Loan No. 1 Equity Inns Portfolio | Cut-off Date Balance: | $80,000,000 |
Cut-off Date LTV: | 64.4% | ||
U/W NCF DSCR: | 2.35x | ||
U/W NOI Debt Yield: | 13.3% |
Additionally, other than Homewood Suites Seattle, which contributes 16.7% of the total underwritten net cash flow, no hotel contributes greater than 7.0% of the total underwritten net cash flow. The top ten assets account for 55.3% of the portfolio by room count and 66.8% of underwritten net cash flow. A breakout of the top ten Equity Inns Portfolio Properties by underwritten net cash flow is shown below.
Top Ten Properties by UW NCF | ||||||
Hotel Name | Rooms | % of Rooms | UW NCF | % of Total UW NCF | “As-is” Appraised Value(1) | Per Room |
Homewood Suites Seattle | 161 | 6.0% | $4,574,467 | 16.7% | $56,700,000 | $352,174 |
Homewood Suites Orlando | 252 | 9.4% | $1,912,755 | 7.0% | $26,100,000 | $103,571 |
Courtyard Houston | 176 | 6.5% | $1,660,007 | 6.1% | $18,200,000 | $103,409 |
Courtyard Carlsbad | 145 | 5.4% | $1,609,353 | 5.9% | $21,800,000 | $150,345 |
Hampton Inn Urbana | 130 | 4.8% | $1,592,692 | 5.8% | $16,800,000 | $129,231 |
Hilton Garden Inn Louisville | 112 | 4.2% | $1,440,820 | 5.3% | $15,100,000 | $134,821 |
Hampton Inn College Station | 133 | 4.9% | $1,430,623 | 5.2% | $14,100,000 | $106,015 |
Springhill Suites Asheville | 88 | 3.3% | $1,393,398 | 5.1% | $16,400,000 | $186,364 |
Hampton Inn Austin | 121 | 4.5% | $1,349,235 | 4.9% | $14,600,000 | $120,661 |
Hampton Inn Orlando | 170 | 6.3% | $1,335,296 | 4.9% | $14,800,000 | $87,059 |
Subtotal | 1,488 | 55.3% | $18,298,647 | 66.8% | $214,600,000 | $144,220 |
Remaining Hotels | 1,202 | 44.7% | $9,098,602 | 33.2% | $107,800,000 | $89,684 |
Total | 2,690 | 100.0% | $27,397,249 | 100.0% | $322,400,000 | $119,851 |
Total w/ Portfolio Premium | $360,000,000 | $133,829 |
(1) | The Portfolio “As-Is” Appraised Value of $360.0 million reflects a premium attributed to the aggregate value of the Equity Inns Portfolio as a whole. The sum of the value of each of the properties on an individual basis is $322.4 million. |
Environmental Matters.The Phase I environmental reports dated August 24 through August 26, 2015 recommended no further action at the Equity Inns Portfolio Properties. The Borrower is required to maintain operations and maintenance plans for asbestos-containing materials at six of the Equity Inns Portfolio Properties.
The Market. The Equity Inns Portfolio has broad exposure to the hospitality industry across the United States with properties located in 13 different states. According to the appraisals for the Equity Inns Portfolio, following the significant occupancy and RevPAR decline experienced during the last recession, demand growth in the overall U.S. hospitality industry resumed in 2010, led by select markets that had recorded growth trends in the fourth quarter of 2009. In 2010, lodging demand in the U.S. increased by 7.3% over that registered in 2009. A return of business travel and some group activity contributed to this trend. The resurgence in demand was partly fueled by the significant price discounts that were widely available in the first half of 2010. These discounting policies were largely phased out in the latter half of the year, balancing much of the early rate loss. Average rate decreased by only 0.1% in 2010 when compared to 2009.
Demand growth continued, but decelerated from 2011 through 2013, increasing at rates of 4.7%, 2.8%, and 2.0%, respectively. Average rate increased by respective rates of 3.8% and 4.2% in 2011 and 2012, followed by increases of 4.0% and 4.6%, respectively, in 2013 and 2014. In 2012, occupancy reached 61.3% (exceeding the ten-year average); moreover, occupancy gained another point in 2013, ending the year at 62.2%. The nation’s occupancy in 2014 registered an additional gain of just over two points, finishing the year at 64.4%. Average rate finished the year just over $110 in 2013, with a 4.6% gain registered in 2014; as a result, average rate ended 2014 at $115.32.
B-7 |
Various | Collateral Asset Summary – Loan No. 1 Equity Inns Portfolio | Cut-off Date Balance: | $80,000,000 |
Cut-off Date LTV: | 64.4% | ||
U/W NCF DSCR: | 2.35x | ||
U/W NOI Debt Yield: | 13.3% |
The appraiser identified several recent sales of hotel portfolios it considered to be comparable to the Equity Inns Portfolio which are summarized in the chart below.
Sales Comparison(1) | ||||||
Portfolio Name | Date of Sale | Sales Price | # of Hotels | # of Rooms | Price/Room | Buyer / Seller |
Equity Inns Portfolio | NAP | $360,000,000(2) | 21 | 2,690 | $133,829(2) | NAP |
Pinnacle Select Service | Jul 2015 | $203,000,000 | 15 | 1,705 | $119,062 | Blackstone Group / Pinnacle Hotel Management |
Hyatt Hotel Portfolio 2014 | Nov 2014 | $590,000,000 | 38 | 4,950 | $119,192 | Lone Star Funds / Hyatt Hotels |
Inland Hotel Portfolio | Nov 2014 | $1,100,000,000 | 52 | 6,976 | $157,683 | NorthStar Realty Finance / Chatham / Inland American Real Estate Trust |
Clarion Partners Hotel Portfolio 2014 | Aug 2014 | $800,000,000 | 48 | 6,013 | $133,045 | Blackstone Group / Clarion Partners |
Innkeepers Hotel Portfolio 2014 | Jun 2014 | $933,900,000 | 47 | 5,945 | $157,090 | NorthStar Realty Finance / Cerberus |
(1) | Source: Appraisal. |
(2) | Sales Price for the Equity Inns Portfolio reflects the “As-is” appraised value inclusive of the portfolio premium attributed to the aggregate value of the Equity Inns Portfolio as a whole. The sum of the value of each of the properties on an individual basis is $322.4 million. |
Cash Flow Analysis.
Cash Flow Analysis | |||||||
2012 | 2013 | 2014 | T-12 7/31/2015 | U/W | U/W per Room(1) | ||
Occupancy(2) | 70.0% | 72.4% | 74.6% | 75.6% | 75.6% | ||
ADR(2) | $103.98 | $106.26 | $110.57 | $113.78 | $113.78 | ||
RevPAR(2) | $72.83 | $76.97 | $82.46 | $86.00 | $86.00 | ||
Room Revenue | $71,755,435 | $75,575,349 | $80,084,622 | $84,440,306 | $84,440,306 | $31,390 | |
F&B Revenue | 1,452,484 | 1,475,632 | 1,498,112 | 1,491,111 | 1,491,111 | 554 | |
Other Revenue | 1,300,394 | 1,277,394 | 1,220,137 | 1,419,603 | 1,419,603 | 528 | |
Total Revenue | $74,508,313 | $78,328,375 | $82,802,871 | $87,351,020 | $87,351,020 | $32,472 | |
Operating Expenses | 18,135,766 | 18,815,854 | 21,325,798 | 21,767,247 | 21,766,685 | 8,092 | |
Undistributed Expenses | 24,497,243 | 25,990,540 | 25,273,647 | 27,445,273 | 27,445,273 | 10,203 | |
Gross Operating Profit | $31,875,304 | $33,521,981 | $36,203,426 | $38,138,500 | $38,139,062 | $14,178 | |
Management Fee | 1,857,069 | 1,826,486 | 1,905,426 | 2,765,568 | 2,620,531 | 974 | |
Total Fixed Charges | 4,281,505 | 4,348,247 | 4,220,864 | 4,753,454 | 4,627,242 | 1,720 | |
Net Operating Income | $25,736,730 | $27,347,248 | $30,077,135 | $30,619,478 | $30,891,289 | $11,484 | |
FF&E | 3,162,953 | 3,323,030 | 3,521,489 | 3,494,041 | 3,494,041 | 1,299 | |
Net Cash Flow | $22,573,777 | $24,024,218 | $26,555,646 | $27,125,437 | $27,397,249 | $10,185 |
(1) | U/W per Room is based on a total of 2,690 rooms. |
(2) | The minor variances between the underwriting, the hospitality research report and the above table with respect to Occupancy, ADR and RevPAR at the Equity Inns Portfolio are attributable to variances in reporting methodologies and/or timing differences. |
Property Management.The Equity Inns Portfolio Properties are subject to operating agreements (“Operating Agreements”) with subsidiaries of AR Capital (the “Operators”) pursuant to which the Operators are responsible for the management of the Equity Inns Portfolio Properties. The Operators subcontract such management responsibilities under management agreements with the following four managers: Homewood Suites Management, LLC and Hampton Inns Management LLC (“Hilton”); Crestline Hotels & Resorts, LLC (“Crestline”); and McKibbon Hotel Management, Inc. (“McKibbon”; together with Hilton and Crestline, each a “Hotel Manager” and collectively the “Hotel Managers”).
Management Company Distribution | |||||||
Management Company | # Hotels | Rooms | % Rooms | Individual UW NCF | % of Total UW NCF | “As-is” Value(1) | Per Room |
Crestline | 12 | 1,627 | 60.5% | $15,369,030 | 56.1% | $181,400,000 | $111,494 |
Hilton | 7 | 882 | 32.8% | $9,606,119 | 35.1% | $112,500,000 | $127,551 |
McKibbon | 2 | 181 | 6.7% | $2,422,099 | 8.8% | $28,500,000 | $157,459 |
Total | 21 | 2,690 | 100.0% | $27,397,249 | 100.0% | $360,000,000 | $133,829 |
(1) | The Portfolio “As-Is” Value of $360.0 million reflects a premium attributed to the aggregate value of the Equity Inns Portfolio as a whole. The sum of the value of each of the properties on an individual basis is $322.4 million. |
B-8 |
Various | Collateral Asset Summary – Loan No. 1 Equity Inns Portfolio | Cut-off Date Balance: | $80,000,000 |
Cut-off Date LTV: | 64.4% | ||
U/W NCF DSCR: | 2.35x | ||
U/W NOI Debt Yield: | 13.3% |
Lockbox / Cash Management.The Equity Inns Portfolio Loan is structured with a hard lockbox and in place cash management. All revenues are required to be deposited directly by the credit card companies and otherwise by the borrowers or managers into a lender controlled lockbox account and distributed pursuant to the terms of the loan documents, with any excess cash flow being distributed to the borrower. During the continuance of a Cash Sweep Period (as defined below), all excess cash flow is required to be swept into an excess cash flow reserve and held by the lender as additional collateral for the Equity Inns Portfolio Loan Combination. To the extent that a Cash Sweep Period is caused by occurrences of events described in clause (ii) or clause (iv) in the definition of “Cash Sweep Period” below with respect to less than all the properties, excess cash flow swept by lender is required to be capped at the sum of the allocated loan amount(s) for each such property or properties. The loan documents provide that no fees exceeding (in the aggregate) 3% of gross revenues may be paid to the Operators under the Operating Agreements or any Hotel Manager out of cash flow generated by the properties during the continuance of a Cash Sweep Period.
A “Cash Sweep Period” will commence upon (i) an event of default, (ii) an event of default by any borrower, Operator or affiliated manager under one or more management agreements, which affects five or more properties in the aggregate, (iii) the DSCR for the Equity Inns Portfolio falls below 1.75x or (iv) the delivery of one or more notices by any franchisor of any breach or default by borrower under any franchise agreement that (a) affect five or more properties in the aggregate, and (b) with the passage of time and/or delivery of notice, permits the franchisor to terminate or cancel such franchise agreement (provided, however, this will not include any notice by the franchisor solely by reason of the existence of a required PIP then being performed by a borrower at a property so long as such PIP work is being performed in accordance with the terms of the applicable franchise agreement).
A Cash Sweep Period will cease to exist with respect to clause (i) above, upon a cure of the event of default being accepted by the lender in its sole and absolute discretion; with respect to clause (ii), (a) upon the event of default having been cured to the lender’s reasonable satisfaction or (b) upon the applicable manager being replaced by the borrower in accordance with the loan documents; with respect to clause (iii) upon the DSCR being at least 1.80x for two consecutive calendar quarters, which may be achieved (x) at any time the underwritten net cash flow shall have increased to achieve such DSCR threshold, (y) prior to the prepayment lockout date, by delivery by the borrowers of a letter of credit or cash collateral, in an amount which, if applied to prepay the mortgage loan, would result in the DSCR being at least 1.80x, to be held as collateral (which may be released if the DSCR is at least 1.80x for two consecutive calendar quarters), or (z) at any time on or after the prepayment lockout date, by a prepayment of principal such that the DSCR is at least 1.80x (such payment to be accompanied by applicable yield maintenance charges); and with respect to clause (iv), upon borrowers delivering evidence reasonably satisfactory to the lender, which may include a “good standing” or similar letter from the franchisor, indicating that the franchise agreement is in full force and effect with no default thereunder.
Initial Reserves.At closing, the borrowers deposited (i) $890,215 into a tax reserve account, (ii) $160,928 into a required repairs reserve account and (iii) $10,000,000 into a PIP reserve account for property improvement plans at the Equity Inns Portfolio Properties.
Ongoing Reserves.On a monthly basis, the borrowers are required to make deposits of (i) 1/12 of the required annual taxes, which currently equates to $296,738 into a tax reserve account, (ii) 1/12 of the annual insurance premiums if, among other things, (a) an acceptable blanket policy is no longer in place, or (b) lender fails to receive evidence at least 10 days prior to the annual expiration date of any such blanket insurance program that such insurance program has been renewed, (iii) the greater of (a) 1/12 of 4% of gross revenue of the trailing 12 months ending on the last day of the most recent calendar quarter and (b) the amount required under the Franchise Agreement and Management Agreement for FF&E work and (iv) deposits into the PIP reserve account according to the PIP reserve funding schedule below:
Date | Required Deposit |
December 31, 2015 | $2,000,000 |
March 31, 2016 | $3,750,000 |
June 30, 2016 | $3,750,000 |
September 30, 2016 | $3,000,000 |
December 31, 2016 | $2,500,000 |
March 31, 2017 | $2,500,000 |
June 30, 2017 | $2,500,000 |
September 30, 2017 | $2,500,000 |
December 31, 2017 | $2,500,000 |
March 31, 2018 | $1,250,000 |
June 30, 2018 | $1,250,000 |
Total | $27,500,000 |
Current Mezzanine or Subordinate Indebtedness.None.
Future Mezzanine or Subordinate Indebtedness Permitted. None.
B-9 |
Various | Collateral Asset Summary – Loan No. 1 Equity Inns Portfolio | Cut-off Date Balance: | $80,000,000 |
Cut-off Date LTV: | 64.4% | ||
U/W NCF DSCR: | 2.35x | ||
U/W NOI Debt Yield: | 13.3% |
Current Preferred Equity Holder.W2007 Equity Inns Partnership, L.P. and W2007 Equity Inns Trust (collectively, “Equity Inns PE Member”), each an affiliate of Whitehall Street Global Real Estate Limited Partnership 2007 (which is the real estate private equity unit of Goldman Sachs Group, Inc.) holds a preferred equity interest with an outstanding balance as of closing of the Equity Inns Portfolio Loan of $75,780,091 in an upper-tier affiliate of the borrowers (“Holdco”). Provided no Equity Inns PE Changeover Event (as defined below) has occurred, Equity Inns PE Member is entitled to a preferred return on its investment payable from cash flow from the Equity Inns Portfolio Properties, equal to 7.5% for the period ending August 27, 2016 and 8.0% thereafter. If an Equity Inns PE Changeover Event has occurred, Equity Inns PE Member is entitled to an increase of 5.0% above such preferred return. 50% of the Equity Inns PE Member’s original capital contributions are required to be paid to Equity Inns PE Member by February 27, 2018 and 100% of such capital contributions are required to be paid to Equity Inns PE Member by February 27, 2019. The balance of the preferred equity investment (inclusive of all returns required to be paid pursuant to the operating agreement of Holdco) is required to be redeemed in full by payment to Equity Inns PE Member of (i) all its capital contributions and (ii) Equity Inns PE Member’s required return plus (iii) any other amounts due to Equity Inns PE Member on or prior to the date that is the earlier of (x) the date of the first occurrence of an Equity Inns PE Changeover Event or (y) January 4, 2021 (the “Mandatory Equity Inns PE Redemption Date”). Upon the occurrence of certain events (each an “Equity Inns PE Changeover Event”) set forth in Holdco’s organizational documents (including Holdco’s failure to pay the monthly preferred return, the failure to repay to Equity Inns PE Member’s capital contributions as provided in Holdco’s operating agreement and the failure to redeem the preferred equity investment by the Mandatory Equity Inns PE Redemption Date), Equity Inns PE Member is entitled to take over control of Holdco and thereby control over the borrower.
In connection with the origination of the Equity Inns Portfolio Loan, the lender and Equity Inns PE Member entered into a recognition agreement. Among other things, the recognition agreement contains acknowledgements from Equity Inns PE Member that upon an event of default under the Equity Inns Portfolio Loan or upon the occurrence of a Cash Sweep Event Period under the Equity Inns Portfolio Loan, no cash from Equity Inns Portfolio Properties will be distributed to Equity Inns PE Member, until the Equity Inns Portfolio Loan has been paid in full or the distribution hold has been revoked or withdrawn by lender. The recognition agreement requires the lender to give Equity Inns PE Member copies of any default notices given to the borrower and grants Equity Inns PE Member the opportunity to cure such defaults by the borrower. The recognition agreement also provides the mechanics under which Equity Inns PE Member is permitted to exercise its remedy to take over control of Holdco (and the related remedial actions available to Equity Inns PE Member under the Holdco operating agreement), including, among other things, requiring that Whitehall Street Global Real Estate Limited Partnership 2007 and Whitehall Parallel Global Real Estate Limited Partnership 2007 satisfies financial requirements and delivers replacement guarantees and indemnities in the form attached to such recognition agreement. Such form of replacement guarantee provides that liability of the replacement guarantor for voluntary bankruptcy and related carveouts will be capped at an amount equal to the original principal balance of the mortgage loan plus accrued and unpaid interest times 0.20. See “Description of the Mortgage Pool—Certain Terms and Conditions of the Mortgage Loans—Other Financing” in the accompanying prospectus supplement.
Partial Release.From and after the prepayment lockout date, the lender is required to release an individual property or properties from the collateral in connection with a third-party, arms-length sale of such property(ies) (or to an affiliate with respect to up to 2 properties at which hotel operations have ceased and are no longer commercially viable) subject to, among other things, the following conditions: (i) no event of default has occurred or would occur as a result of the release, (ii) the remaining collateral has an LTV no greater than the lesser of (a) 64.4% and (b) the LTV in place immediately prior to the release, (iii) the remaining collateral has a Debt Service Coverage Ratio no less than the greater of (a) 2.35x and (b) the Debt Service Coverage Ratio in place immediately prior to the release, (iv) payment of a Release Price (as defined below) and any yield maintenance premium associated with the payment of the Release Price, (v) satisfaction of customary REMIC requirements, (vi) payment of all interest which would have accrued on the portion of the outstanding principal balance being prepaid through, but not including, the next occurring monthly payment date and (vii) payment of all other costs and expenses of lender in connection with the release, provided the LTV and Debt Service Coverage Ratio tests may be satisfied with an additional prepayment of principal (with yield maintenance). The “Release Price” shall equal the greater of (x) 115% of the loan amount allocated to the subject property(ies) and (y) 100% of the net sales proceeds of the subject property(ies) after deducting the costs of closing the sale, which costs are required to be capped for purposes of determining the Release Price at six percent of gross sales proceeds.
If, as a result of a casualty or condemnation, the application of net proceeds or awards in connection therewith in respect of any particular property results in a reduction of the outstanding principal balance of the Equity Inns Portfolio Loan in an amount greater than 60% of the allocated loan amount of such affected property, then, the borrower may obtain a release of such property in accordance with the terms of the preceding paragraph provided that in lieu of the Release Price and any other required payments, the borrower pays to the lender the sum of (i) the difference, if any, between 115% of the allocated loan amount in respect of such affected property and the net proceeds previously applied, plus (ii) all interest which would have accrued through, but not including, the next occurring payment date. No yield maintenance or other prepayment premium or penalty is due in connection with a prepayment made to release a property after such casualty or condemnation.
Substitution.None.
B-10 |
Various | Collateral Asset Summary – Loan No. 1 Equity Inns Portfolio | Cut-off Date Balance: | $80,000,000 |
Cut-off Date LTV: | 64.4% | ||
U/W NCF DSCR: | 2.35x | ||
U/W NOI Debt Yield: | 13.3% |
B-11 |
32 Avenue of the Americas New York, NY 10013 | Collateral Asset Summary – Loan No. 2 32 Avenue of the Americas | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $70,000,000 55.2% 1.88x 9.8% |
B-12 |
32 Avenue of the Americas New York, NY 10013 | Collateral Asset Summary – Loan No. 2 32 Avenue of the Americas | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $70,000,000 55.2% 1.88x 9.8% |
Mortgage Loan Information | |
Loan Seller: | GACC |
Loan Purpose: | Refinance |
Sponsor: | Jack Rudin, William C. Rudin, Eric C. Rudin and Beth Rudin DeWoody |
Borrower: | 32 Sixth Avenue Company LLC |
Original Balance(1): | $70,000,000 |
Cut-off Date Balance(1): | $70,000,000 |
% by Initial UPB: | 7.3% |
Interest Rate: | 4.8320% |
Payment Date: | 1stof each month |
First Payment Date: | December 1, 2015 |
Maturity Date: | November 1, 2025 |
Amortization: | Interest Only |
Additional Debt(1)(2): | $355,000,000Pari Passu Debt; Future Mezzanine Debt Permitted |
Call Protection: | L(25), YM1(90), O(5) |
Lockbox / Cash Management: | Hard / Springing |
Reserves(3) | ||
Initial | Monthly | |
Taxes: | $0 | Springing |
Insurance: | $0 | Springing |
Replacement: | $0 | Springing |
TI/LC: | $3,908,742 | Springing |
Free Rent: | $1,796,381 | $0 |
Financial Information(4) | ||
Cut-off Date Balance / Sq. Ft.: | $365 | |
Balloon Balance / Sq. Ft.: | $365 | |
Cut-off Date LTV: | 55.2% | |
Balloon LTV: | 55.2% | |
Underwritten NOI DSCR: | 2.00x | |
Underwritten NCF DSCR: | 1.88x | |
Underwritten NOI Debt Yield: | 9.8% | |
Underwritten NCF Debt Yield: | 9.2% | |
Underwritten NOI Debt Yield at Balloon: | 9.8% | |
Underwritten NCF Debt Yield at Balloon: | 9.2% |
Property Information | |
Single Asset / Portfolio: | Single Asset |
Property Type: | CBD Office |
Collateral: | Fee Simple |
Location: | New York, NY |
Year Built / Renovated: | 1932 / 1999 |
Total Sq. Ft.: | 1,163,051 |
Property Management: | Rudin Management Co. Inc. |
Underwritten NOI: | $41,740,653 |
Underwritten NCF: | $39,233,948 |
Appraised Value: | $770,000,000 |
Appraisal Date: | August 4, 2015 |
Historical NOI | |
Most Recent NOI: | $40,604,965 (T-12 June 30, 2015) |
2014 NOI: | $39,628,360 (December 31, 2014) |
2013 NOI(5): | $42,424,058 (December 31, 2013) |
2012 NOI: | $38,188,911 (December 31, 2012) |
Historical Occupancy | |
Most Recent Occupancy: | 99.6% (August 12, 2015) |
2014 Occupancy: | 99.2% (December 31, 2014) |
2013 Occupancy: | 98.7% (December 31, 2013) |
2012 Occupancy: | 98.7% (December 31, 2012) |
(1) | The 32 Avenue of the Americas Loan Combination is evidenced by fivepari passu notes in the aggregate original principal amount of $425.0 million. The non-controlling Note A-4, with an original principal balance of $70.0 million, will be included in the COMM 2015-LC23 mortgage trust. The controlling Note A-1, non-controlling Note A-2, non-controlling Note A-3 and non-controlling Note A-5 with an aggregate original principal balance of $355.0 million, arepari passu companion loans and will not be included in the trust and are expected to be held by JPM or an affiliate and GACC or an affiliate or a securitization transaction as to which JPM or GACC is a loan seller. For additional information on thepari passu companion loans, see “The Loan” herein. |
(2) | See “Future Mezzanine or Subordinate Indebtedness Permitted” herein. |
(3) | See “Initial Reserves” and “Ongoing Reserves” herein. |
(4) | DSCR, LTV, Debt Yield and Balance / Sq. Ft. calculations are based on the aggregate 32 Avenue of the Americas Loan Combination. |
(5) | The increase in 2013 NOI from 2012 NOI is attributed to approximately $3.5 million in lease termination fees. |
B-13 |
32 Avenue of the Americas New York, NY 10013 | Collateral Asset Summary – Loan No. 2 32 Avenue of the Americas | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $70,000,000 55.2% 1.88x 9.8% |
Tenant Summary | ||||||||
Tenant | Ratings | Net Rentable | % of Net |
| U/W Base | % of Total | Lease | |
Office Tenants | ||||||||
AMFM Operating, Inc. | NR/NR/CCC+ | 169,304 | 14.6% | $40.07 | 11.3% | 9/30/2022 | ||
Dentsu Holdings USA, Inc.(2) | NR/NR/NR | 168,891 | 14.5% | $39.23 | 11.0% | Various(3) | ||
University of Cambridge(2) | NR/Aaa/NR | 64,256 | 5.5% | $36.16 | 3.9% | 1/31/2022 | ||
Subtotal / Wtd. Avg. | 402,451 | 34.6% | $39.10 | 26.2% | ||||
Remaining Office Space | 185,936 | 16.0% | $36.11 | 11.2% | ||||
Total / Wtd. Avg. Office Space | 588,387 | 50.6% | $38.15 | 37.4% | ||||
Data Center Tenants | ||||||||
CenturyLink Communications, LLC(2)(4) | BB+/Ba2/BB | 165,034 | 14.2% | $53.97 | 14.8% | 8/31/2020 | ||
Telx(5) | BBB/Baa2/BBB | 51,915 | 4.5% | $70.54 | 6.1% | 7/31/2033 | ||
Telx Meet Me Room | BBB/Baa2/BBB | 27,328 | 2.3% | $256.88 | 11.7% | 7/31/2033 | ||
MCI Communications Services, Inc | NR/NR/NR | 58,775 | 5.1% | $55.25 | 5.4% | 9/30/2025 | ||
Subtotal / Wtd. Avg. | 303,052 | 26.1% | $75.35 | 38.1% | ||||
Remaining Data Center Space | 264,288 | 22.7% | $54.76 | 24.1% | ||||
Total / Wtd. Avg. Data Center Space | 567,340 | 48.8% | $65.76 | 62.2% | ||||
Starbucks | 2,900 | 0.2% | $43.79 | 0.2% | 2/28/2025 | |||
Other(6) | 0 | 0.0% | NAP | 0.2% | ||||
Total / Wtd. Avg. Occupied | 1,158,627 | 99.6% | $51.79 | 100.0% | ||||
Vacant | 4,424 | 0.4% | ||||||
Total / Wtd. Avg. | 1,163,051 | 100.0% | ||||||
(1) | Certain ratings are those of the parent company whether or not the parent company guarantees the lease. |
(2) | In addition to the 168,891 sq. ft. leased by Dentsu Holdings USA, Inc., the tenant is also subleasing approximately 44,514 sq. ft. from CenturyLink Communications, LLC through August 2020. Dentsu Holdings USA, Inc. has also agreed to sub-lease the full 64,256 sq. ft. University of Cambridge space effective January 1, 2016 which will bring its total leased space to 277,661 sq. ft., or 23.9% of NRA. |
(3) | Dentsu Holdings USA, Inc. has leases for 99,184 sq. ft. that expire in September 2021, 32,862 sq. ft. that expire in December 2023 and 36,845 sq. ft. that expire in August 2025. |
(4) | Of the 165,034 sq. ft. leased by CenturyLink Communications, LLC at the 32 Avenue of the Americas Property, the 44,514 sq. ft. space on the 16th floor is subleased to Dentsu Holdings USA, Inc. through the end of the lease term in August 2020. |
(5) | Telx has three additional sub-leased spaces totaling 60,759 sq. ft. effective May 2016 that are not included as part of the Telx space in the above chart. In addition, a free rent reserve was established in the amount of $1,577,928 for free rent from May 2016 to October 2016. |
(6) | Other includes rent received from the use of cooling towers, generators, and antennas and consists of $122,352 in U/W Base Rent. |
B-14 |
32 Avenue of the Americas New York, NY 10013 | Collateral Asset Summary – Loan No. 2 32 Avenue of the Americas | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $70,000,000 55.2% 1.88x 9.8% |
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 | 1 | 600 | 0.1% | 600 | 0.1% | $10.00 | 0.0% | 0.0% |
2015 | 3 | 1,340 | 0.1% | 1,940 | 0.2% | $35.89 | 0.1% | 0.1% |
2016 | 5 | 18,324 | 1.6% | 20,264 | 1.7% | $32.10 | 1.0% | 1.1% |
2017 | 5 | 16,695 | 1.4% | 36,959 | 3.2% | $33.18 | 0.9% | 2.0% |
2018 | 7 | 42,182 | 3.6% | 79,141 | 6.8% | $42.98 | 3.0% | 5.0% |
2019 | 2 | 13,589 | 1.2% | 92,730 | 8.0% | $33.07 | 0.7% | 5.8% |
2020 | 8 | 168,534 | 14.5% | 261,264 | 22.5% | $53.63 | 15.1% | 20.8% |
2021 | 6 | 151,254 | 13.0% | 412,518 | 35.5% | $33.04 | 8.3% | 29.2% |
2022 | 26 | 313,378 | 26.9% | 725,896 | 62.4% | $39.23 | 20.5% | 49.6% |
2023 | 8 | 114,719 | 9.9% | 840,615 | 72.3% | $54.92 | 10.5% | 60.1% |
2024 | 0 | 0 | 0.0% | 840,615 | 72.3% | $0.00 | 0.0% | 60.1% |
2025 | 11 | 129,017 | 11.1% | 969,632 | 83.4% | $55.57 | 11.9% | 72.1% |
Thereafter | 13 | 188,995 | 16.2% | 1,158,627 | 99.6% | $88.60 | 27.9% | 100.0% |
Vacant | NAP | 4,424 | 0.4% | 1,163,051 | 100.0% | NAP | NAP | |
Total / Wtd. Avg. | 95 | 1,163,051 | 100.0% | $51.79 | 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 32 Avenue of the Americas loan (the “32 Avenue of the Americas Loan”) is a fixed rate loan secured by the borrower’s fee simple interests in a 27-story Class A office and data center building consisting of 1,163,051 sq. ft. and located at 32 Avenue of the Americas in New York, New York (the “32 Avenue of the Americas Property”). The 32 Avenue of the Americas Loan is evidenced by the non-controlling Note A-4, with an original principal balance of $70.0 million, which will be included in the COMM 2015-LC23 Mortgage Trust. The controlling Note A-1, the non-controlling Note A-2, the non-controlling Note A-3 and the non-controlling Note A-5 arepari passu companion loans (together with the 32 Avenue of the Americas Loan, the “32 Avenue of the Americas Loan Combination”), with an aggregate original principal balance of $425.0 million, are expected to be held by GACC, or an affiliate, and JPM, or an affiliate, or by a securitization transaction as to which GACC or JPM is a loan seller.
The relationship between the holders of the 32 Avenue of the Americas Loan Combination will be governed by a co-lender agreement as described under“Description of the Mortgage Pool – Loan Combinations – The 32 Avenue of the Americas Loan Combination” in the accompanying Prospectus supplement.
Mortgage Loan Combination Note Summary | |||||
Note | Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece | |
Note A-4 | $70,000,000 | $70,000,000 | COMM 2015-LC23 | No | |
Note A-1 | $125,000,000 | $125,000,000 | JPM | Yes | |
Note A-2 | $100,000,000 | $100,000,000 | JPM | No | |
Note A-3 | $72,500,000 | $72,500,000 | JPM | No | |
Note A-5 | $57,500,000 | $57,500,000 | GACC | No | |
Total | $425,000,000 | $425,000,000 |
The 32 Avenue of the Americas Loan Combination has a 10-year term and pays interest only for the term of the loan. The 32 Avenue of the Americas Loan Combination accrues interest at a fixed rate equal to 4.8320% and has a cut-off date balance of $425.0 million. Loan proceeds were used to refinance previous debt of approximately $371.6 million, fund upfront reserves of approximately $5.7 million, pay approximately $3.4 million in closing costs and return approximately $44.3 million to the borrower. Based on the appraised value of $770.0 million as of August 4, 2015, the cut-off date LTV is 55.2%. The most recent prior financing of the 32 Avenue of the Americas Property was included in the BSCMS 2007-PWR17 transaction.
B-15 |
32 Avenue of the Americas New York, NY 10013 | Collateral Asset Summary – Loan No. 2 32 Avenue of the Americas | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $70,000,000 55.2% 1.88x 9.8% |
Sources and Uses | ||||||
Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
Mortgage Loan | $425,000,000 | 100.0% | Loan Payoff(1) | $371,570,253 | 87.4% | |
Upfront Reserves | $5,705,123 | 1.3% | ||||
Closing Costs | $3,387,104 | 0.8% | ||||
Return of Equity | $44,337,521 | 10.4% | ||||
Total Sources | $425,000,000 | 100.0% | Total Uses | $425,000,000 | 100.0% |
(1) | Includes a prepayment penalty of approximately $41.3 million. |
The Borrower / Sponsor. The borrower, 32 Sixth Avenue Company LLC, is 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 are Jack Rudin, William C. Rudin, Eric C. Rudin and Beth Rudin DeWoody, the managing members of the Rudin Management Co. Inc. There is no separate non-recourse carveout guarantor or environmental indemnitor for the 32 Avenue of the Americas Loan Combination.
Jack Rudin, William C. Rudin, Eric C. Rudin and Beth Rudin DeWoody are the managing members of the Rudin Management Co. Inc., which owns and manages one of the largest privately owned commercial and residential property portfolios in New York. The company was founded in the early 1920’s and is based in New York, New York. The firm owns and manages 16 office buildings containing approximately 15.0 million sq. ft. and 20 apartment buildings comprising over 5.0 million sq. ft. Office properties owned by the Rudin family include 3 Times Square, 345 Park Avenue, 355 Lexington Avenue, 415 Madison Avenue, 40 East 52nd Street, 560 Lexington Avenue, 845 Third Avenue, 16785 Broadway and 641 Lexington Avenue in Midtown Manhattan and 80 Pine Street, 55 Broad Street, One Whitehall Street, One Battery Park Plaza and 110 Wall Street in Downtown Manhattan.
The Property.The 32 Avenue of the Americas Property is a 27-story, 1,163,051 sq. ft., Class A office and data center located in Manhattan’s TriBeCa neighborhood. The 32 Avenue of the Americas Property was built in 1932 and was known as the AT&T Long Lines Building. In 1956, the first transatlantic telephone call via cable was switched through the 32 Avenue of the Americas Property, which connected Europe with the North American long distance network, linking New York with 360 cities in the United States and Canada via wire for the first time in history. In 1989, the New York City Landmarks Preservation Commission designated the 32 Avenue of the Americas Property as a historic landmark. Access to the 32 Avenue of the Americas Property is provided with an in-building subway entrance to the A, C and E lines which provide access to Manhattan’s West Side, Queens, Brooklyn and the Bronx. Penn Station is three stops from the 32 Avenue of the Americas Property via an express train. Within two blocks are the 6, N and Q subway lines. Buses run east/west on Canal Street and north on Hudson Street. The 32 Avenue of the Americas Property is located one block from the entrance to the Holland Tunnel, which provides access to New Jersey and New York’s outer boroughs, and is in close proximity to both the West Side Highway and Manhattan Bridge.
As of August 12 2015, the 32 Avenue of the Americas Property was 99.6% occupied by 28 office, data center, and telecommunications tenants. The occupied space consists of approximately 50.8% office space and approximately 49.0% data center space and a retail space leased by Starbucks. From 2007 to 2014, average annual occupancy at the 32 Avenue of the Americas Property has been 97.3% and has not fallen below 93.1%.
In 1999, Rudin Management Co. Inc. purchased the 32 Avenue of the Americas Property, with the intention of continuing the building’s legacy as a telecommunications center and has since invested approximately $100.0 million ($86 PSF) in renovations to the building. Renovations included restoration projects and installation of new infrastructure to host wireless technology. The 32 Avenue of the Americas Property infrastructure has heavy floor loads, expansive electrical capacity and connections to the fiber optic network which benefit telecommunications tenants. The building is also equipped with its own power generating station in the basement, making it suitable for technology companies. The approximately 28,000 sq. ft. connection center, known as “The HUB”, is located on the 24th floor and includes data storage services and a “Meet-Me-Room” that can physically connect different companies’ networks. The Meet-Me-Room is currently operated by Telx, which signed a 20-year lease for the space in 2013. According to Telx, its operations at the 32 Avenue of the Americas Property provide access to over 400 carriers, ISPs, and enterprise networks, making it one of the most connected buildings in the United States.
Environmental Matters.The Phase I environmental report dated August 4, 2015 recommended the continued implementation of an asbestos operations and maintenance plan at the 32 Avenue of the Americas Property, which is currently in place.
Major Tenants.
AMFM Operating, Inc. (Office tenant; 169,304 sq. ft.; 14.6% of NRA; 11.3% of U/W Base Rent; CCC+ by S&P)AMFM Operating, Inc. (dba iHeartMedia Inc.) owns and operates radio stations throughout the United States. The company also sells national spot advertising time for clients in the radio and television industries. Since March of 2004, AMFM Operating, Inc. has operated as a subsidiary of iHeartMedia, Inc. iHeartMedia, Inc. is a leading media company that delivers music, news, talk, sports and other content
B-16 |
32 Avenue of the Americas New York, NY 10013 | Collateral Asset Summary – Loan No. 2 32 Avenue of the Americas | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $70,000,000 55.2% 1.88x 9.8% |
to diverse audiences across multiple platforms. iHeartMedia is the nation’s largest owner of radio stations with over 850 full-power AM & FM radio stations in the US.
AMFM Operating, Inc. has been at the 32 Avenue of the Americas Property since 2007 and has one five-year renewal option remaining. The tenant does not have any termination options.
Dentsu Holdings USA, Inc. (Office tenant; 168,891 sq. ft.; 14.5% of NRA; 11.0% of U/W Base Rent) Dentsu Holdings USA, Inc. operates as a subsidiary of Dentsu Inc., an international advertising and public relations company based in Japan. Dentsu Inc. offers a range of services, from traditional and creative marketing to more specialized areas such as sports marketing, feature film production and broadcasting rights, public relations, digital contents, and a growing range of communication services. Dentsu Inc. is the largest Japanese advertising company in terms of net sales and the No. 1 advertising company in the domestic market. Dentsu Holdings USA, Inc. was founded in 1983 and is headquartered at the 32 Avenue of the Americas Property.
Dentsu Holdings USA, Inc. does not have any termination or renewal options. In addition to the 168,891 sq. ft. leased by Dentsu Holdings USA, Inc., the tenant is also subleasing approximately 44,514 sq. ft. from CenturyLink Communications, LLC through August 2020. Dentsu Holdings USA, Inc. has also agreed to sub-lease the 64,256 sq. ft. University of Cambridge space effective January 1, 2016 through January 2022, which will bring its total leased space to 277,661 sq. ft., or 23.9% of NRA. University of Cambridge has a lease on this space through January 2022 and does not have any termination options.
CenturyLink Communications, LLC (Data Center tenant; 165,034 sq. ft.; 14.2% of NRA; 14.8% of U/W Base Rent; BB+/Ba2/BB by Fitch/Moody’s/S&P)CenturyLink Communications, LLC is a subsidiary of CenturyLink Corporate (NYSE: CTL), a global communications, hosting, cloud and IT services company. CenturyLink Corporate offers network and data systems management, Big Data analytics and IT consulting, and operates over 55 data centers in North America, Europe and Asia. The company is the third-largest telecommunications company in the United States in terms of lines served, behind AT&T and Verizon.
CenturyLink Communication, LLC has been at the 32 Avenue of the Americas Property since 2000 and has one five-year renewal option. The tenant does not have any termination options. Of the 165,034 sq. ft. leased at the 32 Avenue of the Americas Property, the 44,514 sq. ft. space on the 16th floor is subleased to Dentsu Holdings USA, Inc. through the end of the lease term in August 2020.
Telx (Data Center tenant; 79,243 sq. ft.; 6.8% of NRA; 17.8% of U/W Base Rent; BBB/Baa2/BBB by Fitch/Moody’s/S&P)Telx is a provider of interconnection and data center services headquartered at 1 State Street in New York, New York. Founded in 2000, Telx serves a broad range of industries from 20 datacenters located across 13 US markets, including three facilities in the New York metropolitan area.
In October 2015, Digital Realty (BBB/Baa2/BBB by Fitch/Moody’s/S&P), one of the leading data center operators and developers, acquired Telx in a transaction valued at approximately $1.9 billion. Digital Realty Trust is a publicly traded Real Estate Investment Trust on the New York Stock Exchange (NYSE: DLR).
Telx exclusively manages and operates the approximately 28,000 square foot HUB, which includes the 32 Avenue of the Americas Property’s signature “Meet-Me-Room” room that aggregates voice, data and wireless service providers in a single space. Telx has agreed to sublease an additional 60,759 sq. ft. from Tata effective May 1, 2016 through July 2033, which will bring its leased space to 140,002 sq. ft., or 12.0% of NRA. A free rent reserve was established for the Telx space in the amount of $1,577,928 for free rent from May 2016 to October 2016. Telx has one five-year renewal option remaining and does not have any termination options.
The Market.The 32 Avenue of the Americas Property is located within the City Hall sub district of Downtown Manhattan in the neighborhood of TriBeCa. The district is serviced by the A, C, E, 1, 2, and 3 subway trains, which also provide access to Manhattan’s West Side, Queens, Brooklyn and the Bronx. There is also transportation linkage to New Jersey via the Holland Tunnel, which is located 0.5 mile north of the 32 Avenue of the Americas Property. The local area is composed predominantly of multi-story warehouse and industrial loft buildings that have generally been converted to commercial and residential uses.
Data Center Market.New York City benefits from numerous connections with the rest of the country; in addition, there are more than 10 undersea cables with landings near New York City that connect it with international destinations, especially in Europe. The New York data center market includes 124 active data centers and 59 data center providers which supply the region with about 500 megawatts of power dispersed throughout 3.7 million sq. ft. of data center space. The New York metro area multi-tenant data center market is considered to be composed of Manhattan, Brooklyn, Long Island/northern New Jersey, Jersey City, and adjacent townships. There are connectivity hubs at New York carrier hotels including 111 8th Avenue, 60 Hudson Street, and the 32 Avenue of the Americas Property. Other supporting submarkets include the small and medium sized regional businesses as well as high-frequency/low-latency trading market. Another key feature in this market is the exchanges between trading centers given the city’s role in financial services.
The most recent data space leases at the 32 Avenue of the Americas Property were signed by Telx for 60,579 sq. ft. beginning in May 2016. Telx signed leases for an average rate of $59.52 PSF, which is a 19.9% increase over the average in-place rent of $49.65 PSF for the remaining data tenants (excluding the Meet-Me-Room space, which is leased for $220.67 PSF). Moreover, leases signed by
B-17 |
32 Avenue of the Americas New York, NY 10013 | Collateral Asset Summary – Loan No. 2 32 Avenue of the Americas | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $70,000,000 55.2% 1.88x 9.8% |
data center tenants in 2013 or later (excluding the Meet-Me-Room space) have an average rental rate of $58.99 PSF, a 21.4% increase over leases signed by data center tenants prior to 2013, which average $48.60 PSF.
The appraiser concluded to market rents of $60.00 PSF for telecom leases and $50.00 PSF for the telecom support floor (floor 15).
Office Market.According to the appraisal, the Downtown Manhattan office market remains competitive due to its pricing and growing attractiveness to both residents and employers. The market has moved away from being dominated by financial services firms and now benefits from greater industrial diversity. This trend has been helped by creative and tech firms moving south after being priced out of the tight Midtown South office market. The previous oversupply of space is beginning to be absorbed by renewed interest in the Downtown market. According to a local business alliance, 10.0 million sq. ft. of office space has been converted to residential or hotel use since 2004, and another 5.1 million sq. ft. of space is in the potential conversion pipeline. The residential conversions have the added benefit of removing excess office supply from the market.
The Downtown office inventory of 87.8 million sq. ft. is segmented into five major submarkets, with the 32 Avenue of the Americas Property located within the City Hall submarket. Asking rents for the submarket climbed to $58.25 PSF during the second quarter of 2015, a 14.1% increase since the beginning of the year. Additionally, Downtown asking rents saw the largest increase of the three major markets, rising 18.4% percent from Q2 2014. The Q2 2015 Downtown Class A overall asking rents are also up 15.1% over the past year, primarily as a result of top-end space added to the market. The City Hall submarket contains nearly 12.8 million sq. ft. of office space, with approximately 6.6 million sq. ft. of Class A space. The City Hall submarket maintains the lowest vacancy rate of the Downtown market at 1.8%, despite a 0.9% increase during Q2 2015.
The appraiser concluded to market rents of $50.00 PSF for lower floor office leases (floors 1-16) and $56.00 PSF for upper floor office leases (floors 17 and above). Of the 31 buildings surveyed by the appraiser, six office properties were identified as being comparable to the 32 Avenue of the Americas Property.
Competitive Office Buildings(1) | |||||
Building | Net Rentable Area | Available Sq. Ft. (Direct) | Direct Occupancy | Direct Asking Rent | |
32 Avenue of the Americas Property | 1,163,051 | 4,424 | 99.6% | $50.00 - $56.00(2) | |
40 Wall Street | 1,300,000 | 38,079 | 97.1% | $37.00 - $52.00 | |
115 Broadway | 409,596 | 66,463 | 83.8% | $50.00 - $54.00 | |
75 Varick Street | 1,003,920 | 76,098 | 92.4% | $79.00 - $79.00 | |
200 Varick Street | 426,000 | 8,385 | 98.0% | $52.00 - $52.00 | |
388 Greenwich Street | 1,600,000 | 0 | 100.0% | NAV | |
100 Avenue of the Americas | 302,000 | 8,682 | 97.1% | $66.00 - $66.00 | |
Total / Wtd. Avg.(3) | 5,041,516 | 197,707 | 96.1% | $37.00 - $79.00 |
(1) | Source: Appraisal. |
(2) | Represents the appraisers market office rent conclusion for the 32 Avenue of the Americas Property. |
(3) | Total / Wtd Avg. excludes the 32 Avenue of the Americas Property |
B-18 |
32 Avenue of the Americas New York, NY 10013 | Collateral Asset Summary – Loan No. 2 32 Avenue of the Americas | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $70,000,000 55.2% 1.88x 9.8% |
Cash Flow Analysis.
Cash Flow Analysis | ||||||
2012 | 2013 | 2014 | T-12 6/30/2015 | U/W | U/W PSF | |
Base Rent(1) | $49,968,339 | $52,735,008 | $53,123,968 | $55,176,885 | $60,003,778 | $51.59 |
Value of Vacant Space | 0 | 0 | 0 | 0 | 246,752 | 0.21 |
Gross Potential Rent | $49,968,339 | $52,735,008 | $53,123,968 | $55,176,885 | $60,250,530 | $51.80 |
Total Recoveries | 6,484,754 | 7,218,925 | 7,601,119 | 6,879,442 | 7,076,221 | 6.08 |
Total Other Income(2) | 1,944,356 | 4,021,358 | 623,286 | 20,699 | 153,426 | 0.13 |
Less: Vacancy(3) | 0 | 0 | 0 | 0 | (3,366,338) | (2.89) |
Effective Gross Income | $58,397,449 | $63,975,291 | $61,348,373 | $62,077,026 | $64,113,840 | $55.13 |
Total Variable Expenses | 12,062,859 | 11,881,526 | 10,900,906 | 10,118,605 | 10,232,836 | 8.80 |
Total Fixed Expenses | 8,145,679 | 9,669,707 | 10,819,107 | 11,353,455 | 12,140,351 | 10.44 |
Net Operating Income | $38,188,911 | $42,424,058 | $39,628,360 | $40,604,965 | $41,740,653 | $35.89 |
TI/LC | 0 | 0 | 0 | 0 | 2,274,094 | 1.96 |
Capital Expenditures | 0 | 0 | 0 | 0 | 232,610 | 0.20 |
Net Cash Flow | $38,188,911 | $42,424,058 | $39,628,360 | $40,604,965 | $39,233,948 | $33.73 |
(1) | Base Rent includes $4,414,782 in step rent through August 2016. |
(2) | Total Other Income in 2013 includes approximately $3.5 million in lease termination fees. |
(3) | U/W Vacancy represents 5.0% of gross potential income. From 2007 to 2014, vacancy at the 32 Avenue of the Americas Property has averaged 2.7%. |
Property Management. The 32 Avenue of the Americas Property is managed by Rudin Management Co. Inc., a borrower affiliate.
Lockbox / Cash Management. The 32 Avenue of the Americas Loan Combination is structured with a hard lockbox and springing cash management. The borrower delivered tenant direction letters requiring all rents, revenues and receipts from the 32 Avenue of the Americas Property to be deposited directly by the tenants into a lender controlled clearing account. Prior to a Cash Sweep Period (defined below), amounts on deposit in the clearing account are required to be swept daily to the borrower’s account. During a Cash Sweep Period, any transfers to borrower’s operating account are required to cease and sums on deposit in the clearing account are required to be swept into a lender-controlled deposit account and applied to payment of all monthly amounts due under the loan documents.
A “Cash Sweep Period “ will commence upon the occurrence or commencement, as applicable, of (i) an event of default, (ii) the DSCR is less than 1.15x for two consecutive calendar quarters based on the trailing-3 month period (a “DSCR Trigger Event”) or (iii) a bankruptcy action by the borrower or manager and will end if, (a) with respect to (i) above, the default is cured, (b) with respect to (ii) above, the debt service coverage ratio is at least 1.20x for two consecutive calendar quarters based on the trailing-3 month period and (c) with respect to (iii) above, the manager is replaced with a qualified manager, but for the avoidance of doubt, in no event shall the borrower have the ability or right to cure a Cash Sweep Period caused by a bankruptcy action of the borrower.
Initial Reserves. At closing, the borrower deposited (i) $3,908,742 into the TI/LC reserve for tenant improvements and leasing commissions under existing leases and (ii) $1,796,381 into a free rent reserve for the Telx and Impact Digital tenants.
Ongoing Reserves. Ongoing monthly reserves were waived at closing. During the continuance of (a) an event of default or (b) a DSCR Trigger Event, the borrower will be required to make monthly deposits of (i) 1/12 of the taxes payable in the next 12 months, (ii) 1/12 of the insurance premiums payable in the next 12 months, so long as no blanket insurance policy is in place, (iii) $19,384 for capital expenditures and (iv) $193,842 into a TI/LC reserve account.
Current Mezzanine or Subordinate Indebtedness. None.
Future Mezzanine or Subordinate Indebtedness Permitted. The borrower may obtain an approved mezzanine loan provided that, among other things, the mezzanine loan (i) has a term that is coterminous with the 32 Avenue of the Americas Loan Combination, (ii) the combined LTV ratio is less than or equal to 53.7%, (iii) the combined DSCR is greater than or equal to 1.90x and (iv) lender shall receive rating agency confirmation.
B-19 |
32 Avenue of the Americas New York, NY 10013 | Collateral Asset Summary – Loan No. 2 32 Avenue of the Americas | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $70,000,000 55.2% 1.88x 9.8% |
B-20 |
32 Avenue of the Americas New York, NY 10013 | Collateral Asset Summary – Loan No. 2 32 Avenue of the Americas | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $70,000,000 55.2% 1.88x 9.8% |
B-21 |
11 Madison Avenue New York, NY 10010 | Collateral Asset Summary – Loan No. 3 11 Madison Avenue | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $69,600,000 32.5% 3.89x 14.3% |
B-22 |
11 Madison Avenue New York, NY 10010 | Collateral Asset Summary – Loan No. 3 11 Madison Avenue | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $69,600,000 32.5% 3.89x 14.3% |
Mortgage Loan Information | |
Loan Seller: | GACC |
Loan Purpose: | Acquisition |
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): | $69,600,000 |
Cut-off Date Balance(1): | $69,600,000 |
% by Initial UPB: | 7.2% |
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): | $694,730,000Pari Passu Debt; $310,670,000 Subordinate Secured Debt; $325,000,000 Mezzanine Debt |
Call Protection(2): | L(26), D(87), 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 $69.6 million represents the senior non-controlling Note A-1-C3 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 26 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 passunote to be securitized, and (ii) August 18, 2018. The assumed lockout period of 26 payments is based on the expected COMM 2015-LC23 securitization closing date in November 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 17th floor, which occurred in August 2015. |
B-23 |
11 Madison Avenue New York, NY 10010 | Collateral Asset Summary – Loan No. 3 11 Madison Avenue | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $69,600,000 32.5% 3.89x 14.3% |
Tenant Summary | ||||||||||
Tenant | Ratings | Net Rentable | % of Net | U/W Base | % of Total | Lease | ||||
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 | Total | % of Total Sq. | Cumulative | Cumulative % | Annual U/W | % U/W | Cumulative % |
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-24 |
11 Madison Avenue New York, NY 10010 | Collateral Asset Summary – Loan No. 3 11 Madison Avenue | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $69,600,000 32.5% 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 $69.6 million. The 11 Madison Avenue Loan is comprised of the non-controlling Note A-1-C3 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 $69.6 million non-controlling Note A-1-C3 will be included in the COMM 2015-LC23 trust. Nine of the Senior Notes with an aggregate principal balance of $397,530,000 along with the three Junior Notes have been contributed to the MAD 2015-11MD trust. The A-1-C1 Note has been contributed to the COMM 2015-CCRE26 securitization, the A-1-C2 Note has been contributed to the COMM 2015-CCRE27 securitization, the A-3-C1 Note has been contributed to the WFCM 2015-NXS3 securitization and the remaining Senior Notes are held by Morgan Stanley Bank, N.A. (“MSBNA”) or Wells Fargo Bank, National Association (“Wells Fargo Bank”) or securitizations as to which MSBNA or Wells Fargo Bank is a loan seller 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 Prospectus supplement.
Mortgage Loan Combination Note Summary | |||||
Note | Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece | |
A-1-C3 | $69,600,000 | $69,600,000 | COMM 2015-LC23 | 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(1) | |
A-1-C1 | $70,000,000 | $70,000,000 | COMM 2015-CCRE26 | No | |
A-1-C2 | $70,000,000 | $70,000,000 | COMM 2015-CCRE27 | No | |
A-2-C1, A-2-C2 | $91,700,000 | $91,700,000 | Morgan Stanley Bank, N.A. | No | |
A-3-C1 | $35,000,000 | $35,000,000 | WFCM 2015-NXS3 | No | |
A-3-C2 | $30,500,000 | $30,500,000 | Wells Fargo Bank | No | |
Total | $1,075,000,000 | $1,075,000,000 |
(1) | So long as the Junior Notes are included in the MAD 2015-11 MD 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 $69.6 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
B-25 |
11 Madison Avenue New York, NY 10010 | Collateral Asset Summary – Loan No. 3 11 Madison Avenue | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $69,600,000 32.5% 3.89x 14.3% |
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 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-26 |
11 Madison Avenue New York, NY 10010 | Collateral Asset Summary – Loan No. 3 11 Madison Avenue | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $69,600,000 32.5% 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 11 Madison Avenue 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-27 |
11 Madison Avenue New York, NY 10010 | Collateral Asset Summary – Loan No. 3 11 Madison Avenue | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $69,600,000 32.5% 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 | Year Built/Renovated | No. Stories | Transaction Date | Sales Price | Sales Price/NRA | Occupancy | |
757 Third Avenue | 504,893 | 1964 | 27 | Mar 2015 | $360,000,000 | $713 | 95.0% | |
230 Park Avenue | 1,404,918 | 1928 | 34 | Mar 2015 | $1,200,000,000 | $854 | 90.0% | |
717 Fifth Avenue | 352,951 | 1959 / 2001 | 26 | Feb 2015 | $415,000,000 | $1,176 | 92.0% | |
11 Times Square | 1,107,839 | 2010 | 40 | Feb 2015 | $1,400,000,000 | $1,264 | 85.0% | |
601 Lexington Avenue (Allocated) | 1,669,897 | 1977 | 61 | Dec 2014 | $2,400,000,000 | $1,437 | 99.0% | |
1045 Sixth Avenue/7 Bryant Park (Leasehold) | 473,672 | 2015 (under construction) | 28 | Dec 2014 | $598,000,000 | $1,262 | 0.0% | |
1095 Sixth Avenue | 1,179,552 | 1973 / 2008 | 41 | Nov 2014 | $2,146,000,000 | $1,819 | 96.0% | |
1740 Broadway | 620,928 | 1950 / 2007 | 26 | Nov 2014 | $600,912,768 | $968 | 98.0% | |
Park Avenue Tower | 616,082 | 1986 | 36 | Jun 2014 | $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-28 |
11 Madison Avenue New York, NY 10010 | Collateral Asset Summary – Loan No. 3 11 Madison Avenue | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $69,600,000 32.5% 3.89x 14.3% |
Cash Flow Analysis.
Cash Flow Analysis | ||||||
2013 | 2014 | T-12 5/31/2015 | Sponsor Budget (3 Year) | 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-29 |
11 Madison Avenue New York, NY 10010 | Collateral Asset Summary – Loan No. 3 11 Madison Avenue | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $69,600,000 32.5% 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-30 |
11 Madison Avenue New York, NY 10010 | Collateral Asset Summary – Loan No. 3 11 Madison Avenue | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $69,600,000 32.5% 3.89x 14.3% |
IDA Lease Units.A portion of the 11 Madison Avenue Property consisting of the leasehold interests in nine 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-31 |
11 Madison Avenue New York, NY 10010 | Collateral Asset Summary – Loan No. 3 11 Madison Avenue | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $69,600,000 32.5% 3.89x 14.3% |
B-32 |
11 Madison Avenue New York, NY 10010 | Collateral Asset Summary – Loan No. 3 11 Madison Avenue | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $69,600,000 32.5% 3.89x 14.3% |
B-33 |
1209 DeKalb Avenue Brooklyn, NY 11221 | Collateral Asset Summary – Loan No. 4 1209 DeKalb | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $46,000,000 72.3% 1.48x 7.1% |
B-34 |
1209 DeKalb Avenue Brooklyn, NY 11221 | Collateral Asset Summary – Loan No. 4 1209 DeKalb | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $46,000,000 72.3% 1.48x 7.1% |
Mortgage Loan Information | |
Loan Seller: | LCF |
Loan Purpose: | Refinance |
Sponsor: | Joshua Crane; Robert Schwartz |
Borrower: | Spruce 1209 LLC |
Original Balance: | $46,000,000 |
Cut-off Date Balance: | $46,000,000 |
% by Initial UPB: | 4.8% |
Interest Rate: | 4.7250% |
Payment Date: | 6thof each month |
First Payment Date: | November 6, 2015 |
Maturity Date: | October 6, 2020 |
Amortization: | Interest Only |
Additional Debt(1)(2): | $8,500,000 Mezzanine Debt; Future Mezzanine Debt Permitted |
Call Protection: | L(25), D(28), O(7) |
Lockbox / Cash Management: | Soft / In-Place |
Reserves(3) | ||
Initial | Monthly | |
Taxes: | $8,430 | $1,686 |
Insurance: | $45,402 | $5,675 |
Replacement: | $0 | $2,117 |
Prepaid Rent: | $93,227 | NAP |
Financial Information | ||
Mortgage Loan | Total Debt | |
Cut-off Date Balance / Unit: | $362,205 | $429,134 |
Balloon Balance / Unit: | $362,205 | $429,134 |
Cut-off Date LTV: | 72.3% | 85.7% |
Balloon LTV: | 72.3% | 85.7% |
Underwritten NOI DSCR: | 1.49x | 1.09x |
Underwritten NCF DSCR: | 1.48x | 1.08x |
Underwritten NOI Debt Yield: | 7.1% | 6.0% |
Underwritten NCF Debt Yield: | 7.1% | 6.0% |
Underwritten NOI Debt Yield at Balloon: | 7.1% | 6.0% |
Underwritten NCF Debt Yieldat Balloon: | 7.1% | 6.0% |
Property Information | ||
Single Asset / Portfolio: | Single Asset | |
Property Type: | Mid-Rise Multifamily | |
Collateral: | Fee Simple | |
Location: | Brooklyn, NY | |
Year Built / Renovated: | 2013 / NAP | |
Total Units: | 127 | |
Property Management: | Rizaro Management LLC | |
Underwritten NOI(4): | $3,276,662 | |
Underwritten NCF: | $3,251,262 | |
“As-is” Appraised Value: | $63,600,000 | |
“As-is” Appraisal Date: | August 10, 2015 | |
Historical NOI(5) | ||
Most Recent NOI: | $2,768,829 (T-12 August 31, 2015) | |
2014 NOI: | NAP | |
2013 NOI: | NAP | |
2012 NOI: | NAP | |
Historical Occupancy(5) | ||
Current Occupancy: | 99.2% (September 14, 2015) | |
2014 Occupancy: | 90.6% (December 31, 2014) | |
2013 Occupancy: | NAP | |
2012 Occupancy: | NAP | |
(1) | See “Current Mezzanine or Subordinate Indebtedness” herein. |
(2) | See “Future Mezzanine or Subordinate Indebtedness Permitted” herein. |
(3) | See “Initial Reserves” and “Ongoing Reserves” herein. |
(4) | The increase in Underwritten NOI from T-12 8/31/2015 cash flows represent the lease-up of the 1209 DeKalb Property. |
(5) | The 1209 DeKalb Property was acquired by the sponsor vacant in 2014 and as a result no prior operating history is available. |
B-35 |
1209 DeKalb Avenue Brooklyn, NY 11221 | Collateral Asset Summary – Loan No. 4 1209 DeKalb | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $46,000,000 72.3% 1.48x 7.1% |
The Loan. The 1209 DeKalb Loan (the “1209 DeKalb Loan”) is a fixed rate loan secured by the borrower’s fee simple interest in a mid-rise multifamily property consisting of 127 residential apartments and a 46-car parking lot, located at 1209 DeKalb Avenue in Brooklyn, New York (the “1209 DeKalb Property”) and has an original principal balance of $46.0 million. The 1209 DeKalb Loan has a 5-year term and pays interest only for the term of the loan. The 1209 DeKalb Loan accrues interest at a fixed rate equal to 4.7250%per annumand has a cut-off date balance of $46.0 million. Based on the appraised value of $63.6 million as of August 10, 2015, the cut-off date LTV ratio is 72.3%. The most recent prior financing of the 1209 DeKalb Property was not included in a securitization.
Loan proceeds, along with an $8.5 million mezzanine loan, were used to retire existing debt of approximately $42.5 million, pay closing costs of approximately $0.6 million and fund upfront reserves of approximately $0.1 million, giving the borrower a return of equity of approximately $11.3 million.
Sources and Uses | ||||||
Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
Mortgage Loan | $46,000,000 | 84.4% | Loan Payoff | $42,463,745 | 77.9% | |
Mezzanine Loan | $8,500,000 | 15.6% | Closing Costs | $635,128 | 1.2% | |
Reserves | $147,060 | 0.3% | ||||
Return of Equity | $11,254,068 | 20.6% | ||||
Total Sources | $54,500,000 | 100.0% | Total Uses | $54,500,000 | 100.0% |
The Borrower / Sponsor. The borrower, Spruce 1209 LLC, is 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 Joshua Crane and Robert Schwartz.
The sponsors of the 1209 DeKalb Loan, Joshua Crane and Robert Schwartz are principals of Spruce Capital Partners (“Spruce Capital”). Spruce Capital was founded in 2007 and has experience in construction, financing and acquisitions in New York, New York.
The Property. The 1209 DeKalb Property consists of a five-story, Class A mid-rise apartment building located in the Bushwick neighborhood of Brooklyn, New York. The 1209 DeKalb Property was constructed in 2012 and contains 127 residential apartments and a 46-car parking lot. Amenities include bicycle storage, on-site storage, a screening room, billiards room, wet bar, fitness center, art gallery, laundry center, roof terrace, and doorman. Residents have access to have 46 secured parking spaces with an on-site Zipcar. In addition, each apartment contains washer/dryer connections, stainless steel appliances, and condo-quality finishes. As of September 14, 2015, the 1209 DeKalb Property is 99.2% occupied. A breakdown of the residential apartment mix is presented in the below chart.
Unit Mix Summary(1) | ||||||
Unit Type | # of Units | % of Total | Occupancy | Average Unit Size | Average Monthly Rental Rate | Average Monthly Rental Rate PSF |
Studio | 16 | 12.6% | 100.0% | 445 | $2,088 | $56.32 |
1 BD | 67 | 52.8% | 100.0% | 594 | $2,439 | $49.26 |
2 BD | 44 | 34.6% | 97.7% | 947 | $3,318 | $42.06 |
Total / Wtd. Avg. | 127 | 100.0% | 99.2% | 697 | $2,698 | $46.36 |
(1) | Based on a rent roll dated September 14, 2015. |
Environmental Matters. The Phase I environmental report dated August 21, 2015 recommended no further action at the 1209 DeKalb Property.
The Market. The 1209 DeKalb Property is located in the Bushwick neighborhood of Brooklyn within Kings County, New York. The 1209 DeKalb Property is located three blocks from the J train on Broadway and four blocks from the M train on Myrtle Avenue. Additionally, the 1209 DeKalb Property is within close proximity to the Myrtle Avenue station at Broadway, which includes the J, M and Z trains which run west to the Lower East Side and Downtown Manhattan in approximately 20 minutes.
According to the appraisal, the median home value in 1209 DeKalb Property’s neighborhood is $547,498 and there are 31,487 households. From 2010-2014 the Kings County population has grown by 1.14%. Estimated average household income in Kings County for 2015 was reported to be $68,494. As of the second quarter of 2015, average asking rental rates appreciated by 2.3% with average rents listed at $2,012 in Kings County.
The 1209 DeKalb Property is well situated within the neighborhood with respect to residential demand drivers such as schools, municipalities, public space, and retail centers. There are three local schools in the area which are located within 0.1 miles of the 1209 DeKalb Property. In addition, the 1209 DeKalb Property is located 1.6 miles from Interfaith Medical Center, which is a multi-site community teaching health care system. The 1209 DeKalb Property is in close proximity to Bushwick’s main retail corridor, which is
B-36 |
1209 DeKalb Avenue Brooklyn, NY 11221 | Collateral Asset Summary – Loan No. 4 1209 DeKalb | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $46,000,000 72.3% 1.48x 7.1% |
located along Broadway, Myrtle Avenue, and Knickerbocker Avenue. The tenants mostly comprise of local retailers, bars, and restaurants. The 1209 DeKalb Property is located 0.6 miles from C-Town Supermarket, and 0.3 miles from Family Dollar.
The chart below shows a comparison of the competitive set:
Competitive Set(1) | |||||||
Name | 1209 DeKalb Property | 1433 DeKalb Avenue | 114 Troutman Street | 1610 DeKalb Avenue | 74 Maujer Street | 100 Maspeth Avenue | |
Distance from Subject | NAP | 0.4 miles | 0.4 miles | 0.7 miles | 1.7 miles | 1.8 miles | |
Year Built / Renovated | 2013 | 2014 | 2006 | 2005 | 2014 | 2007 | |
No. of Units | 127(2) | 28 | 144 | 24 | 40 | 87 | |
Unit Size (Sq. Ft.) | 427 – 1,074(2) | 549 | 500 – 930 | 656 | 600– 1,000 | 453 – 728 | |
Rent/Unit | $1,995 - $3,950(2) | $2,444 | $2,570 - $3,200 | $2,095 | $2,599 – $4,199 | $2,250 - $3,575 | |
Annual Rent PSF | $46.36(2) | $53.42 | $41.29 - $61.68 | $38.32 | $42.84 - $51.98 | $58.93 - $62.35 | |
(1) | Source: Appraisal |
(2) | Based on a rent roll dated September 14, 2015 |
Cash Flow Analysis.
Cash Flow Analysis(1) | |||||
T-12 8/31/2015 | U/W | U/W per Unit | |||
Gross Potential Rent(2) | $3,440,698 | $4,111,434 | $32,373 | ||
Other Income | 133,521 | 154,416 | 1,216 | ||
Less: Residential Vacancy(3) | 0 | (205,572) | (1,619) | ||
Effective Gross Income | $3,574,218 | $4,060,279 | $31,971 | ||
Total Operating Expenses(4) | 805,389 | 783,617 | 6,170 | ||
Net Operating Income | $2,768,829 | $3,276,662 | $25,800 | ||
Capital Expenditures | 0 | 25,400 | 200 | ||
Net Cash Flow | $2,768,829 | $3,251,262 | $25,600 | ||
(1) | The 1209 DeKalb Property was acquired vacant in 2014. |
(2) | The increase in U/W Gross Potential Rent and U/W Net Operating Income from T-12 8/31/2015 cash flows represent the lease-up of the 1209 DeKalb Property. |
(3) | U/W Residential Vacancy represents 5.0% of Gross Potential Rent. |
(4) | The 1209 DeKalb Property is currently in its fourth year of its 421-A tax abatement. Lender’s U/W taxes of $20,641 represents the average abated taxes over a 5 year period. The 1209 DeKalb Property’s current actual taxes are $20,233. |
Property Management. The 1209 DeKalb Property is managed by Rizaro Management LLC, an affiliate of the borrower.
Lockbox / Cash Management. The 1209 DeKalb Loan is structured with a soft lockbox and in-place cash management. The borrower or manager is required to deposit all residential gross revenues into a clearing account within two business days of receipt. Funds deposited into the clearing account are required to be swept on a daily basis to the cash management account and applied in accordance with the loan documents. During the continuance of a Trigger Period (as defined below), excess cash after payment of debt service for the 1209 DeKalb Loan, reserve deposits, operating expenses (including management fees), default interest, late charges, and debt service for the mezzanine loan, shall be held by lender as additional collateral for the 1209 DeKalb Loan.
A “Trigger Period” will begin upon the occurrence of (i) an event of default or (ii) an event of default under the management agreement or (iii) the debt service coverage ratio falling below 1.05x on the aggregate of the loan and the mezzanine loan and will end upon (a) with respect to clause (i) and (ii), the date the event of default has been cured and (b) with respect to clause (iii), the date that the debt service coverage ratio is calculated to be 1.05x or greater on the aggregate of the loan and the mezzanine loan for two consecutive calendar quarters.
Initial Reserves. At closing, the borrower deposited (i) $8,430 into a tax reserve account, (ii) $45,402 into an insurance reserve account and (iii) $93,227 into a prepaid rent reserve.
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 $1,686, into a tax reserve account, (ii) 1/12 of the annual insurance premiums, which currently equates to $5,675, into an insurance reserve account, and (iii) $2,117 ($200 per unit annually) into a replacement reserve account.
B-37 |
1209 DeKalb Avenue Brooklyn, NY 11221 | Collateral Asset Summary – Loan No. 4 1209 DeKalb | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $46,000,000 72.3% 1.48x 7.1% |
Current Mezzanine or Subordinate Indebtedness. An $8,500,000 mezzanine loan was funded concurrently with the funding of the 1209 DeKalb Loan. The mezzanine loan is coterminous with the 1209 DeKalb Loan, accrues interest at a rate of 9.3750%per annumand is interest-only for the term of the mezzanine loan. The mezzanine borrower under the mezzanine loan is Spruce 1209 MEZZ LLC. The current holder of the mezzanine loan is SMHF Cayman Hotel, LLC.
Future Mezzanine or Subordinate Indebtedness Permitted. If the mezzanine loan shall be repaid in full during the term of the 1209 DeKalb Loan, the mezzanine borrower shall have the right to obtain mezzanine financing (the “Permitted Mezzanine Loan”) provided that certain conditions precedent are satisfied, including the following: (a) no default or event of default shall have occurred and be continuing or shall occur solely as a result of such Permitted Mezzanine Loan, (b) the term of the Permitted Mezzanine Loan shall be coterminous with the 1209 DeKalb Loan, and all other terms, provisions and conditions of the Permitted Mezzanine Loan shall be acceptable to lender and the rating agencies (c) the aggregate loan-to-value ratio of the 1209 DeKalb Loan and the Permitted Mezzanine Loan shall be no greater than the aggregate loan-to-value ratio of the 1209 DeKalb Loan and Permitted Mezzanine Loan as of the closing date of the 1209 DeKalb Loan, (d) the Permitted Mezzanine Loan shall be made by a Permitted Mezzanine Loan lender reasonably acceptable to Lender and the rating agencies, (e) the Permitted Mezzanine Loan lender shall enter into an intercreditor agreement in form and substance reasonably acceptable to lender and the rating agencies and (f) lender shall have received a rating agency confirmation as to the Permitted Mezzanine Loan.
B-38 |
1209 DeKalb Avenue Brooklyn, NY 11221 | Collateral Asset Summary – Loan No. 4 1209 DeKalb | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $46,000,000 72.3% 1.48x 7.1% |
B-39 |
1127 Wilshire Boulevard Los Angeles, CA 90017 | Collateral Asset Summary – Loan No. 5 Good Samaritan Medical Tower | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $42,700,000 62.8% 1.96x 9.7% |
B-40 |
1127 Wilshire Boulevard Los Angeles, CA 90017 | Collateral Asset Summary – Loan No. 5 Good Samaritan Medical Tower | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $42,700,000 62.8% 1.96x 9.7% |
Mortgage Loan Information | |
Loan Seller: | GACC |
Loan Purpose: | Refinance |
Sponsor: | Edward G. Hudson |
Borrower: | Los Angeles Medical, LLC |
Original Balance: | $42,700,000 |
Cut-off Date Balance: | $42,700,000 |
% by Initial UPB: | 4.4% |
Interest Rate: | 4.5400% |
Payment Date: | 6thof each month |
First Payment Date: | October 6, 2015 |
Maturity Date: | September 6, 2025 |
Amortization: | Interest Only |
Additional Debt(1): | Future Mezzanine Debt Permitted |
Call Protection: | L(12), YM2(103), O(5) |
Lockbox / Cash Management: | Springing Soft / Springing |
Reserves(2) | ||
Initial | Monthly | |
Taxes: | $73,631 | $12,272 |
Insurance: | $0 | Springing |
Replacement: | $0 | $3,049 |
TI/LC: | $0 | $21,953 |
Required Repairs: | $25,200 | NAP |
Suite 800 Lease: | $452,542 | $0 |
Elevator Upgrade: | $300,000 | $0 |
Free Rent: | $275,931 | $0 |
Financial Information | ||
Cut-off Date Balance / Sq. Ft.: | $292 | |
Balloon Balance / Sq. Ft.: | $292 | |
Cut-off Date LTV: | 62.8% | |
Balloon LTV: | 62.8% | |
Underwritten NOI DSCR: | 2.11x | |
Underwritten NCF DSCR: | 1.96x | |
Underwritten NOI Debt Yield: | 9.7% | |
Underwritten NCF Debt Yield: | 9.0% | |
Underwritten NOI Debt Yield at Balloon: | 9.7% | |
Underwritten NCF Debt Yield at Balloon: | 9.0% |
Property Information | |
Single Asset / Portfolio: | Single Asset |
Property Type: | Medical Office |
Collateral: | Fee Simple |
Location: | Los Angeles, CA |
Year Built / Renovated: | 1965 / 2014 |
Total Sq. Ft.: | 146,354 |
Property Management: | Boulevard Investment Group, Inc. |
Underwritten NOI: | $4,156,772 |
Underwritten NCF: | $3,856,746 |
Appraised Value: | $68,000,000 |
Appraisal Date: | July 23, 2015 |
Historical NOI | |
Most Recent NOI: | $3,677,311 (T-12 April 30, 2015) |
2014 NOI: | $3,508,915 (December 31, 2014) |
2013 NOI: | $3,638,309 (December 31, 2013) |
2012 NOI: | $3,240,497 (December 31, 2012) |
Historical Occupancy | |
Most Recent Occupancy(3): | 90.4% (September 1, 2015) |
2014 Occupancy: | 85.2% (December 31, 2014) |
2013 Occupancy: | 85.3% (December 31, 2013) |
2012 Occupancy: | 82.5% (December 31, 2012) |
(1) | See “Future Mezzanine or Subordinate Indebtedness Permitted” herein. |
(2) | See “Initial Reserves” and “Ongoing Reserves” herein. |
(3) | Most Recent Occupancy includes a 3,920 sq. ft. expansion space for University of Southern California which, if executed, is anticipated to commence in January 2016. As of October 2015, the sponsor is finalizing negotiations with the tenant and the lease has not been executed. At closing, $452,542 was deposited into a Suite 800 Lease Funds reserve account as additional collateral pending the execution of the University of Southern California expansion lease, of which $130,771 represents one year of lease payments for the tenant and $321,771 is being held for tenant improvements and leasing commissions for the expansion space. |
B-41 |
1127 Wilshire Boulevard Los Angeles, CA 90017 | Collateral Asset Summary – Loan No. 5 Good Samaritan Medical Tower | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $42,700,000 62.8% 1.96x 9.7% |
Tenant Summary | |||||||
Tenant | Ratings (Fitch/Moody’s/S&P)(1) | Net Rentable Area (Sq. Ft.) | % of Net Rentable Area |
| Annual U/W Base Rent PSF | % of Total U/W Base Rent | Lease Expiration |
University of Southern California(2) | NR/Aa1/AA | 14,605 | 10.0% | $33.16 | 10.2% | Various | |
United Imaging, LLC(3) | NR/NR/NR | 8,824 | 6.0% | $35.13 | 6.5% | 1/31/2021 | |
Samaritan Tower Surgery Center, LLC(4) | NR/NR/NR | 7,847 | 5.4% | $51.19 | 8.4% | 9/30/2026 | |
Retina Vitreous Associates(5) | NR/NR/NR | 6,404 | 4.4% | $40.91 | 5.5% | 3/31/2016 | |
Boulevard Medical Properties | NR/NR/NR | 5,412 | 3.7% | $37.75 | 4.3% | 6/30/2018 | |
Total Major Tenants | 43,092 | 29.4% | $38.57 | 34.9% | |||
Remaining Tenants | 89,171 | 60.9% | $34.84 | 65.1% | |||
Total Occupied Collateral | 132,263 | 90.4% | $36.06 | 100.0% | |||
Vacant | 14,091 | 9.6% | |||||
Total | 146,354 | 100.0% | |||||
(1) | Certain ratings may be those of the parent company whether or not the parent company guarantees the lease. |
(2) | The University of Southern California space includes leases for 8,037 sq. ft. that expire in February 2023, 2,648 sq. ft. that expire in February 2024 and the expansion lease that is being negotiated for 3,920 sq. ft. is expected to have a December 2024 expiration date. The first year of rent ($130,771) for the expansion space was deposited into a Suite 800 reserve at closing, along with $321,771 for tenant improvements and leasing commissions in connection with such space. With respect to the lease of 2,648 sq. ft. of space, the tenant has two five-year extension options and a one-time right to terminate its lease in March 2019, upon at least six months’ notice and payment of an amount equal to the unamortized portion of the tenant improvements. |
(3) | United Imaging, LLC has two five-year extension options each upon written notice at least six months prior to the lease expiration date of January 31, 2021. The tenant has no termination options. |
(4) | Samaritan Tower Surgery Center, LLC has two five-year extension options each upon written notice at least six months prior to the lease expiration date of September 30, 2026. The tenant has no termination options. |
(5) | Retina Vitreous Associates has two five-year extension options. |
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 Rent PSF | % U/W Rolling | Cumulative % of U/W Base Rent |
MTM | 1 | 529 | 0.4% | 529 | 0.4% | $33.36 | 0.4% | 0.4% |
2015 | 0 | 0 | 0.0% | 529 | 0.4% | $0.00 | 0.0% | 0.4% |
2016 | 11 | 19,616 | 13.4% | 20,145 | 13.8% | $38.52 | 15.8% | 16.2% |
2017 | 5 | 8,350 | 5.7% | 28,495 | 19.5% | $34.07 | 6.0% | 22.2% |
2018 | 9 | 17,803 | 12.2% | 46,298 | 31.6% | $34.80 | 13.0% | 35.2% |
2019 | 9 | 15,538 | 10.6% | 61,836 | 42.3% | $35.40 | 11.5% | 46.7% |
2020 | 9 | 11,970 | 8.2% | 73,806 | 50.4% | $35.77 | 9.0% | 55.7% |
2021 | 7 | 18,722 | 12.8% | 92,528 | 63.2% | $33.51 | 13.2% | 68.8% |
2022 | 1 | 812 | 0.6% | 93,340 | 63.8% | $36.45 | 0.6% | 69.5% |
2023 | 5 | 11,295 | 7.7% | 104,635 | 71.5% | $32.64 | 7.7% | 77.2% |
2024 | 2 | 6,568 | 4.5% | 111,203 | 76.0% | $34.35 | 4.7% | 81.9% |
2025 | 3 | 4,744 | 3.2% | 115,947 | 79.2% | $31.60 | 3.1% | 85.1% |
Thereafter | 4 | 16,316 | 11.1% | 132,263 | 90.4% | $43.66 | 14.9% | 100.0% |
Vacant | NAP | 14,091 | 9.6% | 146,354 | 100.0% | NAP | NAP | |
Total / Wtd. Avg. | 66 | 146,354 | 100.0% | $36.06 | 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 Good Samaritan Medical Tower loan (the “Good Samaritan Medical Tower Loan”) is a fixed rate loan secured by the borrower’s fee simple interest in a Class A medical office building totaling 146,354 sq. ft. located in Los Angeles, California (the “Good Samaritan Medical Tower Property”) with an original principal balance of $42.7 million. The Good Samaritan Medical Tower Loan has a 10-year term and is interest only for the entire term. The Good Samaritan Medical Tower Loan accrues interest at a fixed rate equal to 4.5400% and has a cut-off date balance of $42.7 million. Loan proceeds were used to retire existing debt of approximately $32.5 million, fund upfront reserves of approximately $1.1 million, pay closing costs of approximately $0.4 million and return equity of approximately $8.6 million to the borrower. Based on the appraised value of $68.0 million as of July 23, 2015, the cut-off date LTV ratio is 62.8%. The most recent prior financing of the Good Samaritan Medical Tower Property was included in the MLMT 2005-LC1 securitization.
B-42 |
1127 Wilshire Boulevard Los Angeles, CA 90017 | Collateral Asset Summary – Loan No. 5 Good Samaritan Medical Tower | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $42,700,000 62.8% 1.96x 9.7% |
Sources and Uses | ||||||
Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
Mortgage Loan | $42,700,000 | 100.0% | Loan Payoff | $32,525,145 | 76.2% | |
Reserves | $1,127,305 | 2.6% | ||||
Closing Costs | $425,176 | 1.0% | ||||
Return of Equity | $8,622,375 | 20.2% | ||||
Total Sources | $42,700,000 | 100.0% | Total Uses | $42,700,000 | 100.0% |
The Borrower / Sponsor. The borrower, Los Angeles Medical, LLC is a special purpose Delaware limited liability company structured to be bankruptcy-remote, with two independent directors in its organizational structure. The sponsor of the borrower and non-recourse carve-out guarantor is Edward G. Hudson.
Edward G. Hudson is the President of Boulevard Investment Group, Inc, a private owner of medical office space in Los Angeles. Prior to joining Boulevard Investment Group, Inc., Mr. Hudson was the co-founder of Westway Properties, a Los Angeles-based real estate development firm.
The Property. The Good Samaritan Medical Tower Property is located in Los Angeles, California on Wilshire Boulevard. Constructed in 1965 and renovated in 2014, the Good Samaritan Medical Tower Property consists of a single 15-story Class A medical office building totaling 146,354 sq. ft. The 2014 renovation included common area upgrades, lobby upgrades, a new roof system and new fire and security systems. The Good Samaritan Medical Tower Property includes 330 parking spaces, which equates to a ratio of 2.25 spaces per 1,000 sq. ft., located in the adjacent 7-level parking garage connected to the office building. The Good Samaritan Medical Tower Property is monitored by a third party security system and features surveillance cameras throughout the building and public areas, motion detectors and keycard access.
The Good Samaritan Medical Tower Property’s immediate area is comprised mostly of medical office buildings and low to high rise residential buildings. Located adjacent to the Good Samaritan Medical Tower Property is the Good Samaritan Hospital, a not-for-profit hospital founded in 1885 that is affiliated with both USC and UCLA Schools of Medicine. Each year, Good Samaritan Hospital admits approximately 17,000 patients and handles more than 93,500 outpatient visits, 4,000 deliveries and 8,000 surgeries across 18 surgical suites. Good Samaritan Hospital is also currently developing a new 193,000 sq. ft. Medical Pavilion directly west of the Good Samaritan Medical Tower Property which is anticipated to open in 2016 to help serve outpatient needs.
The Good Samaritan Medical Tower Property is 90.4% leased to 61 tenants. The granular rent roll features no tenant occupying greater than 10.0% of the net rentable area and 10.2% of the annual U/W base rent. Additionally, tenants representing 42.3% of the net rentable area have been in occupancy for more than 10 years.
Environmental Matters. The Phase I environmental report dated September 3, 2015 recommended no further action at the Good Samaritan Medical Tower Property.
Major Tenants.
University of Southern California dba USC Fertility(14,605 sq. ft.; 10.0% of NRA; 10.2% of U/W Base Rent; Aa1/AA by Moody’s/S&P) The University of Southern California Fertility Center (“USC Fertility”) is among the national leaders in research and scientific breakthroughs in the field of fertility. USC Fertility has made numerous advances in the field including offering expanded fertility treatment options for in-vitro fertilization, pioneering fertility preservation in the state of California, leading research which extends fertility for women of advanced maternal age, and has become one of the few fertility clinics with a proven track record in egg freezing. As a result, USC Fertility has earned a reputation as a leader in male infertility and female infertility throughout the world.
The University of Southern California has been at the Good Samaritan Medical Tower Property since 2003 and currently occupies three suites. Included in their square footage is a 3,920 sq. ft. expansion space which, if executed, is anticipated to commence in January 2016. As of October 2015, the sponsor is finalizing negotiations with the tenant and the lease has not been executed. At closing, $452,542 was deposited into a suite 800 lease funds reserve account, of which $130,771 is being held as additional collateral pending the execution of the expansion lease, and $321,771 is being held for tenant improvements and leasing commissions related to the expansion space. The leases for suite 1400, representing 4,900 sq. ft. and suite 1410, representing 3,137 sq. ft., have no renewal or termination options. Suite 1414, representing 2,648 sq. ft., has two five-year extension options and a one-time right to terminate the lease in March 2019, upon at least six months’ notice and payment of an amount equal to the unamortized portion of the tenant improvements.
United Imaging, LLC (8,824 sq. ft.; 6.0% of NRA; 6.5% of U/W Base Rent) United Imaging, LLC offers a full spectrum of radiology services including PET, MRI, Breast MRI, Breast Biopsy, CAT Scan, Nuclear Medicine, Thyroid Biopsy, Ultrasound, Digital
B-43 |
1127 Wilshire Boulevard Los Angeles, CA 90017 | Collateral Asset Summary – Loan No. 5 Good Samaritan Medical Tower | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $42,700,000 62.8% 1.96x 9.7% |
Mammography, Fluoroscopy, DEXA Scans and Digital X-Rays. United Imaging, LLC currently operates 18 locations providing outpatient imaging facilities.
United Imaging, LLC took occupancy at the Good Samaritan Medical Tower Property in 2001 and has expanded their lease premises twice since the initial start date. In addition, United Imaging, LLC has invested over $3.0 million of capital into the build-out of their space. The United Imaging, LLC lease expires in January 2021 and has two, five-year extension options. The tenant has no termination options.
Samaritan Tower Surgery Center, LLC (7,847 sq. ft.; 5.4% of NRA; 8.4% of U/W Base Rent) Samaritan Tower Surgery Center, LLC is leased by Dr. Jorge Minor and John Kowalczyk, who both guarantee the lease. Dr. Minor is the Medical Director at LA Pain & Wellness Institute. Dr. Minor is board certified in Physical Medicine and Rehabilitation, Pain Management and Interventional Pain Medicine.
Samaritan Tower Surgery Center, LLC took occupancy at the Good Samaritan Medical Tower Property in 2014 and invested approximately $2.0 million of capital into their space. The Samaritan Tower Surgery Center, LLC lease expires in September 2026 and has two, five-year extension options remaining. The tenant has no termination options.
The Market. The Good Samaritan Medical Tower Property is located in the city of Los Angeles in the Downtown Los Angeles office submarket. Located adjacent to the Good Samaritan Medical Tower Property is the Good Samaritan Hospital, a 408-bed hospital which serves the Greater Downtown Los Angeles Area. Good Samaritan Hospital supports six award-winning medical centers that focus on advancing medical science while also providing patient care. The centers include the Heart & Vascular Center, Good Samaritan Hospital Orthopaedic Center, Tertiary Retinal Surgery, Pancreatico-Biliary Program, Transfusion-Free Medicine & Surgery Center, and the Davajan-Cabal Center for Perinatal Medicine. The Good Samaritan Hospital is also currently developing an approximately $109.0 million outpatient facility adjacent to the Good Samaritan Medical Tower Property that will feature patient lobbies, radiation oncology, pharmacy, imaging services and a café on the first floor. The outpatient facility is anticipated to be completed in 2016.
The Good Samaritan Medical Tower Property benefits from a surrounding amenity base in Downtown Los Angeles including the STAPLES Center, LA Live and the Los Angeles Convention Center. The LA Live campus is an entertainment campus with a 54-story JW Marriott and Ritz Carlton convention center hotel as its centerpiece. Other notable improvements on the LA Live Campus include the 7,100 sq. ft. Nokia Theater, 18 restaurants totaling 115,000 sq. ft. and the Grammy Museum. The Downtown Los Angeles area has also experienced residential development in recent years. Notable residential developments in the area include 6th Street and Bixel Street, a 648-apartment project currently under construction in close proximity to the Good Samaritan Medical Tower Property and a 700-unit apartment complex under construction at 8th Street and Grand Avenue.
The Downtown Los Angeles Office submarket totaled approximately 31.8 million sq. ft. of rentable area as of Q1 2015 and had an 18.1% vacancy rate and an average asking rent of $35.64 PSF. Within the Downtown Los Angeles Office submarket, as of Q1 2015 medical offices comprised approximately 1.4 million sq. ft. and had a direct vacancy rate of 7.6% with an average asking rent of $28.58 PSF.
The appraiser analyzed recent leases negotiated in competitive buildings in the marketplace, ranging in size from 1,211 sq. ft. to 4,777 sq. ft. The comparable leases exhibited a range in rents from $27.00 to $38.40 PSF, with an average price of $30.66 PSF.
Based on an analysis of five comparable properties and the Good Samaritan Medical Tower Property’s recent leasing, the appraiser determined a market rent of $34.80 PSF for medical office space, $51.00 PSF for surgical suite space and $42.00 PSF for pharmacy space. The appraiser considers the following five comparable properties to constitute the Good Samaritan Medical Tower Property’s competitive set:
Competitive Set(1) | |||||||
Property Name | City, State | Occupancy | Total NRA (Sq. Ft.) | Lease Sq. Ft. | Rent PSF | Term (yrs.) | Lease Date |
Good Samaritan Medical Tower Property | Los Angeles, CA | 90%(2) | 146,354(2) | Various | $36.06(2) | Various | Various |
California Medical Center | Los Angeles, CA | 75% | 60,000 | 2,883 | $35.40 | 8.0 | May 2014 |
Laker Medical Arts | Los Angeles, CA | 74% | 54,700 | 1,500 | $38.40 | 5.0 | July 2015 |
Good Samaritan Medical | Los Angeles, CA | 100% | 91,391 | 1,216 | $27.60 | 1.0 | May 2014 |
St. Vincent Professional Building | Los Angeles, CA | 97% | 110,923 | 1,211 | $27.00 | 7.0 | July 2015 |
California Professional Center | Los Angeles, CA | 100% | 77,946 | 4,777 | $30.36 | 3.0 | April 2014 |
Total / Wtd. Avg.(3) | 92% | 394,960 | 11,587 | $30.66 | 4.7 |
(1) | Source: Appraisal. |
(2) | Based on the rent roll dated September 1, 2015. |
(3) | Total / Wtd. Avg. does not include the Good Samaritan Medical Tower Property. |
B-44 |
1127 Wilshire Boulevard Los Angeles, CA 90017 | Collateral Asset Summary – Loan No. 5 Good Samaritan Medical Tower | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $42,700,000 62.8% 1.96x 9.7% |
Cash Flow Analysis.
Cash Flow Analysis | ||||||
2012 | 2013 | 2014 | T-12 4/30/2015 | U/W | U/W PSF | |
Base Rent(1) | $3,734,992 | $3,951,456 | $4,205,572 | $4,364,301 | $4,829,465 | $33.00 |
Value of Vacant Space | 0 | 0 | 0 | 0 | 491,931 | 3.36 |
Gross Potential Rent | $3,734,992 | $3,951,456 | $4,205,572 | $4,364,301 | $5,321,396 | $36.36 |
Total Recoveries | 73,664 | 123,238 | 106,696 | 99,155 | 122,853 | 0.84 |
Total Other Income | 946,286 | 1,166,567 | 711,566 | 770,580 | 795,000 | 5.43 |
Less: Vacancy(2) | 0 | 0 | 0 | 0 | (491,931) | (3.36) |
Less: Abatements | (155,870) | (179,191) | 0 | 0 | 0 | 0.00 |
Effective Gross Income | $4,599,071 | $5,062,069 | $5,023,834 | $5,234,036 | $5,747,318 | $39.27 |
Total Operating Expenses | 1,358,573 | 1,423,760 | 1,514,919 | 1,556,725 | 1,590,546 | 10.87 |
Net Operating Income | $3,240,497 | $3,638,309 | $3,508,915 | $3,677,311 | $4,156,772 | $28.40 |
TI/LC | $0 | $0 | $0 | $0 | 263,437 | 1.80 |
Capital Expenditures | $0 | $0 | $0 | $0 | 36,589 | 0.25 |
Net Cash Flow | $3,240,497 | $3,638,309 | $3,508,915 | $3,677,311 | $3,856,746 | $26.35 |
(1) | U/W Base Rent includes $60,604 of contractual rent steps through September 2016. In addition, U/W Base Rent includes $130,771 attributed to the University of Southern California 3,920 sq. ft. expansion space (suite 800). At closing, $452,542 was deposited into a suite 800 lease funds reserve account, of which $130,771 is being held as additional collateral pending the execution of the University of Southern California expansion lease, and $321,771 is being held for tenant improvements and leasing commissions for the expansion space. |
(2) | U/W Vacancy represents 7.9% of gross income. |
Property Management. The Good Samaritan Medical Tower Property is managed by Boulevard Investment Group, Inc., a borrower affiliate.
Lockbox / Cash Management. The Good Samaritan Medical Tower Loan is structured with a springing soft lockbox and springing cash management.Following a Trigger Period (as defined herein), all rents, revenues and receipts from the Good Samaritan Medical Tower Property are required to be deposited by the borrower or property manager within one business day of receipt. All sums deposited in the lockbox account are required to be transferred daily to a borrower controlled account, unless a Trigger Period is continuing, in which event such funds are required to be swept daily to a lender controlled account to be applied to payment of all monthly amounts due under the loan documents.
A “Trigger Period” will commence (i) upon an event of default, (ii) the DSCR is less than 1.15x on the last day of any calendar quarter or (iii) if a mezzanine loan is outstanding and will end (a) with respect to clause (i), if such event of default is cured, (b) with respect to clause (ii), the DSCR is at least 1.20x for two consecutive quarters and (c) with respect to clause (iii) such mezzanine loan is no longer outstanding.
Initial Reserves. At closing, the borrower deposited (i) $73,631 in the tax reserve account, (ii) $25,200 in the required repairs reserve account, which represents 120% of the engineer’s recommendation, (iii) $452,542 in the Suite 800 lease funds reserve account, of which $130,771 is being held as additional collateral pending the execution of the University of Southern California expansion lease, and of which $321,771 is being held for tenant improvements and leasing commissions for the expansion space, (iv) $300,000 in the elevator upgrade reserve account and (v) $275,931 in the free rent 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 $12,272, into a tax reserve account, (ii) $3,049 into a replacement reserve account, subject to a cap of $109,766 and (iii) $21,953 into a TI/LC reserve account, subject to a cap of $790,312. In addition, 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.
Current Mezzanine or Subordinate Indebtedness. None.
Future Mezzanine or Subordinate Indebtedness Permitted. The borrowers are permitted to obtain future mezzanine financing provided that, among other conditions, the principal amount of such mezzanine loan when combined with the principal amount of the Good Samaritan Medical Tower Loan will result in a (i) combined LTV of no more than 62.8%, (ii) combined DSCR greater than or equal to 1.35x and (iii) combined debt yield of no less than 8.4%.
B-45 |
1127 Wilshire Boulevard Los Angeles, CA 90017 | Collateral Asset Summary – Loan No. 5 Good Samaritan Medical Tower | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $42,700,000 62.8% 1.96x 9.7% |
B-46 |
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B-47 |
Various | Collateral Asset Summary – Loan No. 6 Harvey Building Products Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $41,953,778 53.5% 1.96x 12.8% |
B-48 |
Various | Collateral Asset Summary – Loan No. 6 Harvey Building Products Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $41,953,778 53.5% 1.96x 12.8% |
Mortgage Loan Information | |
Loan Seller: | LCF |
Loan Purpose: | Acquisition |
Sponsor: | Dunes Point Capital |
Borrower: | Harvey Propco, LLC |
Original Balance(1): | $42,000,000 |
Cut-off Date Balance(1): | $41,953,778 |
% by Initial UPB: | 4.4% |
Interest Rate: | 4.8500% |
Payment Date: | 6thof each month |
First Payment Date: | November 6, 2015 |
Maturity Date: | October 6, 2020 |
Amortization: | 360 months |
Additional Debt(1)(2): | $67,925,164Pari Passu Debt; Future Secured Debt Permitted |
Call Protection(3)(4): | L(25), D (31), O(4) |
Lockbox / Cash Management: | Hard / In-Place |
Reserves(5) | ||
Initial | Monthly | |
Taxes: | $1,207,022 | $199,837 |
Insurance: | $594,489 | $78,692 |
Required Repairs: | $500,000 | NAP |
Financial Information(6) | ||
Cut-off Date Balance / Sq. Ft.: | $54 | |
Balloon Balance / Sq. Ft.: | $49 | |
Cut-off Date LTV: | 53.5% | |
Balloon LTV: | 49.3% | |
Underwritten NOI DSCR: | 2.02x | |
Underwritten NCF DSCR: | 1.96x | |
Underwritten NOI Debt Yield: | 12.8% | |
Underwritten NCF Debt Yield: | 12.5% | |
Underwritten NOI Debt Yield at Balloon: | 13.9% | |
Underwritten NCF Debt Yield at Balloon: | 13.5% |
Property Information | |
Single Asset / Portfolio: | Portfolio of 30 properties |
Property Type: | Various |
Collateral: | Fee Simple |
Location: | Various |
Year Built / Renovated: | Various |
Total Sq. Ft.: | 2,046,119 |
Property Management: | Self-Managed |
Underwritten NOI: | $14,095,158 |
Underwritten NCF: | $13,683,832 |
Appraised Value: | $205,460,000 |
Appraisal Date: | September – October 2015 |
Historical NOI(7) | |
2014 NOI: | NAV |
2013 NOI: | NAV |
2012 NOI: | NAV |
Historical Occupancy(7) | |
Most Recent Occupancy: | 100.0% (November 6, 2015) |
2014 Occupancy: | NAV |
2013 Occupancy: | NAV |
2012 Occupancy: | NAV |
(1) | The Original Balance of $42.0 million represents the controlling Note A-1, of a $110.0 million whole loan (the “Harvey Building Products Portfolio Loan Combination”) evidenced by four pari passu notes. The pari passu companion loans are comprised of the non-controlling Note A-2-A, Note A-2-B and non-controlling Note A-3, with an aggregate original principal amount of $68.0 million, which are expected to be included in one or more future securitizations. |
(2) | See “Future Mezzanine or Subordinate Indebtedness Permitted” herein. |
(3) | Partial release is permitted. See “Partial Release” herein. |
(4) | The defeasance lockout period will be at least 25 payment dates beginning with and including the first payment date of November 6, 2015. Defeasance of the full $110.0 million Harvey Building Products 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 passunote to be securitized, and (ii) October 1, 2018. The assumed lockout period of 25 payments is based on the expected COMM 2015-LC23 securitization closing date in November 2015. The actual lockout period may be longer. |
(5) | See “Initial Reserves” and “Ongoing Reserves” herein. |
(6) | DSCR, LTV, Debt Yield and Balance / Sq. Ft. calculations are based on the aggregate Harvey Building Products Portfolio Loan Combination. |
(7) | Historical NOI and Historical Occupancy are unavailable as the borrower entered into a new 20-year master lease with an affiliate of the borrower at closing of the Harvey Building Products Portfolio Loan. |
B-49 |
Various | Collateral Asset Summary – Loan No. 6 Harvey Building Products Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $41,953,778 53.5% 1.96x 12.8% |
Portfolio Summary | ||||||||
Property Name | Ownership Interest | City | State | Sq. Ft. | Year Built | Allocated Loan Amount | “As-Is” Appraised Value | Occupancy(1) |
Londonderry Manufacturing | Fee Simple | Londonderry | NH | 376,294 | 2007 | $21,250,000 | $40,000,000 | 100.0% |
Waltham Corporate | Fee Simple | Waltham | MA | 54,400 | 1999 | $10,880,000 | $23,900,000 | 100.0%(2) |
Dartmouth Manufacturing | Fee Simple | North Dartmouth | MA | 235,239 | 1998 | $10,150,000 | $17,800,000 | 100.0% |
Nashua | Fee Simple | Nashua | NH | 111,594 | 2006 | $5,120,000 | $9,500,000 | 100.0% |
West Bridgewater | Fee Simple | West Bridgewater | MA | 81,776 | 2005 | $4,750,000 | $7,900,000 | 100.0% |
Woburn | Fee Simple | Woburn | MA | 76,054 | 1989 | $4,700,000 | $7,400,000 | 100.0% |
Manchester, NH | Fee Simple | Manchester | NH | 81,747 | 2003 | $3,883,000 | $7,200,000 | 100.0% |
New London | Fee Simple | Waterford | CT | 70,642 | 2008 | $3,650,000 | $6,620,000 | 100.0% |
East Haven | Fee Simple | East Haven | CT | 70,089 | 2005 | $3,400,000 | $6,300,000 | 100.0% |
Salem | Fee Simple | Salem | NH | 58,286 | 2001 | $3,400,000 | $5,500,000 | 100.0% |
Bethlehem | Fee Simple | Bethlehem | PA | 71,091 | 1973 | $3,300,000 | $5,500,000 | 100.0% |
Lincoln | Fee Simple | Lincoln | RI | 80,240 | 2003 | $3,175,000 | $5,900,000 | 100.0% |
Berlin | Fee Simple | Berlin | CT | 43,796 | 1995 | $3,050,000 | $5,390,000 | 100.0% |
Woburn CPD | Fee Simple | Woburn | MA | 59,800 | 1984 | $3,000,000 | $6,400,000 | 100.0% |
Norwalk | Fee Simple | Norwalk | CT | 40,232 | 1972 | $2,500,000 | $5,310,000 | 100.0% |
Dartmouth | Fee Simple | Dartmouth | MA | 63,117 | 1974 | $2,400,000 | $4,900,000 | 100.0% |
Braintree | Fee Simple | Braintree | MA | 32,531 | 1986 | $2,250,000 | $3,700,000 | 100.0% |
Manchester, CT | Fee Simple | Manchester | CT | 49,175 | 1996 | $2,100,000 | $3,920,000 | 100.0% |
Portland | Fee Simple | Portland | ME | 48,145 | 1976 | $2,100,000 | $3,900,000 | 100.0% |
Norwalk | Fee Simple | Norwalk | CT | 30,000 | 1974 | $1,900,000 | $4,260,000 | 100.0% |
Warwick | Fee Simple | Warwick | RI | 43,899 | 1997 | $1,888,000 | $3,500,000 | 100.0% |
Fitchburg | Fee Simple | Fitchburg | MA | 39,433 | 2002 | $1,618,000 | $3,000,000 | 100.0% |
Auburn | Fee Simple | Auburn | MA | 37,132 | 1983 | $1,564,000 | $2,900,000 | 100.0% |
Portsmouth | Fee Simple | Portsmouth | NH | 31,470 | 1993 | $1,510,000 | $2,800,000 | 100.0% |
Southampton | Fee Simple | Huntingdon Valley | PA | 36,421 | 2009 | $1,250,000 | $2,350,000 | 100.0% |
Hyannis | Fee Simple | Hyannis | MA | 24,070 | 1986 | $1,187,000 | $2,200,000 | 100.0% |
Wilkes-Barre | Fee Simple | Forty Fort | PA | 32,200 | 1950 | $1,100,000 | $1,900,000 | 100.0% |
Berlin CPD | Fee Simple | Berlin | CT | 28,163 | 1977 | $1,075,000 | $1,910,000 | 100.0% |
Springfield | Fee Simple | Springfield | MA | 25,347 | 1989 | $1,000,000 | $2,100,000 | 100.0% |
White River Junction | Fee Simple | White River Junction | VT | 13,736 | 1981 | $850,000 | $1,500,000 | 100.0% |
Total / Wtd. Avg. | 2,046,119 | $110,000,000 | $205,460,000 | 100.0% | ||||
(1) | The Harvey Building Products Portfolio Properties are subject to a 20-year master lease with Harvey Industries, Inc. as tenant. |
(2) | Harvey Industries, Inc. the master tenant, currently subleases 16,898 sq. ft. to three separate tenants, Massachusetts Association of Realtors, Inc., B4 Consulting, Inc. and Delphi Building Services, Inc. |
Tenant Summary | |||||||
Tenant | Credit Rating (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 |
Harvey Industries, Inc. | NR/NR/NR | 2,046,119 | 100.0% | $7.31 | 100.0% | 10/31/2035 | |
Total Occupied Collateral | 2,046,119 | 100.0% | $7.31 | 100.0% | |||
Vacant | 0 | 0.0% | |||||
Total | 2,046,119 | 100.0% | |||||
B-50 |
Various | Collateral Asset Summary – Loan No. 6 Harvey Building Products Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $41,953,778 53.5% 1.96x 12.8% |
Lease Rollover Schedule | ||||||||
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 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 | 0 | 0 | 0.0% | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
2020 | 0 | 0 | 0.0% | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
2021 | 0 | 0 | 0.0% | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
2022 | 0 | 0 | 0.0% | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
2023 | 0 | 0 | 0.0% | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
2024 | 0 | 0 | 0.0% | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
2025 | 0 | 0 | 0.0% | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
Thereafter | 1 | 2,046,119 | 100.0% | 2,046,119 | 100.0% | $7.31 | 100.0% | 100.0% |
Vacant | NAP | 0 | 0.0% | 2,046,119 | 100.0% | NAP | NAP | |
Total / Wtd. Avg. | 1 | 2,046,119 | 100.0% | $7.31 | 100.0% | |||
The Loan.The Harvey Building Products Portfolio loan (the “Harvey Building Products Portfolio Loan”) is a fixed rate loan secured by the borrower’s fee simple interest in a portfolio of 27 warehouse properties, two manufacturing properties, and one office property located across seven states, totaling 2,046,119 sq. ft. (the “Harvey Building Products Portfolio” or the “Harvey Building Products Portfolio Properties”). The Original Balance of $42.0 million represents the controlling Note A-1 of a $110.0 million whole loan (the “Harvey Building Products Portfolio Loan Combination”) evidenced by four pari passu notes. The pari passu companion loans are comprised of the non-controlling Note A-2-A, the non-controlling Note A-2-B and the non-controlling Note A-3, with an aggregate original principal amount of $68.0 million, which are expected to be included in one or more future securitizations.
The relationship between the holders of the Harvey Building Products Portfolio Loan Combination is governed by a co-lender agreement as described under “Description of the Mortgage Pool—Loan Combinations—The Harvey Building Products Portfolio Loan”in the prospectus supplement.
Loan Combination Summary | ||||
Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece | |
Note A-1 | $42,000,000 | $41,953,778 | COMM 2015-LC23 | Yes |
Note A-2-A | $25,000,000 | $24,972,487 | LCF | No |
Note A-2-B | $10,000,000 | $9,988,995 | LCF | No |
Note A-3 | $33,000,000 | $32,963,683 | LCF | No |
Total | $110,000,000 | $109,878,942 |
The Harvey Building Products Portfolio Loan has a 5-year term and amortizes on a 30-year schedule. The Harvey Building Products Portfolio Loan accrues interest at a fixed rate equal to 4.8500% per annum and has a cut-off date balance of $109.9 million. Loan proceeds, along with approximately $113.0 million in equity, a $70.0 million Opco term loan, $5.0 million in seller preferred shares, and approximately $1.8 million under an Opco revolving loan facility were used to acquire Harvey Building Products (inclusive of the Harvey Building Products Portfolio Properties) for approximately $299.8 million cash consideration, fund upfront reserves of approximately $0.5 million and pay closing costs of approximately $4.3 million. Based on the as-is appraised values totaling approximately $205.5 million as of September and October 2015, the cut-off date LTV is 53.5%. The most recent prior financing of the Harvey Building Products Portfolio was not included in a securitization.
B-51 |
Various | Collateral Asset Summary – Loan No. 6 Harvey Building Products Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $41,953,778 53.5% 1.96x 12.8% |
Sources and Uses | ||||||
Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
Mortgage Loan | $110,000,000 | 36.7% | Purchase Price(2) | $295,000,000 | 98.4% | |
Equity | $113,000,000 | 37.7% | Reserves | $500,000 | 0.2% | |
Opco Term Loan(1) | $70,000,000 | 23.4% | Closing Costs(3) | $4,250,000 | 1.4% | |
Seller Preferred Shares(1) | $5,000,000 | 1.7% | ||||
Opco Revolver(1) | $1,750,000 | 0.6% | ||||
Total Sources | $299,750,000 | 100.0% | Total Uses | $299,750,000 | 100.0% |
(1) | Dunes Point Capital acquired Harvey Building Products for a total purchase price of $295.0 million and a total cost basis of $299.8 million inclusive of closing costs. |
(2) | The Purchase Price reflects the acquisition of both the Harvey Building Products Opco and Propco. The appraised value for the Harvey Building Products Portfolio Properties is $205.5 million. |
(3) | The Closing Costs reflect the closing costs incurred as a result of the acquisition of the Harvey Building Products Opco and Propco. The Closing Costs for the Harvey Building Products Portfolio Properties were approximately $1.1 million. |
The Borrower / Sponsor. The borrower, Harvey Propco, LLC is a single purpose, bankruptcy remote entity organized in Delaware with two independent directors in its organizational structure. The sponsor of the borrower is Dunes Point Capital and the nonrecourse carve-out guarantor is the Harvey Parent Corporation.
Dunes Point Capital is a family office and private investment firm founded in 2013 by former Blackstone Group LP executive Timothy White. The company invests in industrial and energy companies. Dunes Point Capital is a wholly owned subsidiary of White Group Holdings. The team has invested, or overseen the investment of, over $5 billion in transactions over the last 20 years.
The Properties. The Harvey Building Products Portfolio is comprised of 30 properties totaling 2,046,119 sq. ft., including 27 light industrial warehouse properties located in Massachusetts, Connecticut, Maine, Rhode Island, Pennsylvania, New Hampshire and Vermont that serve as the distribution and sales centers for the Harvey Building Products Portfolio, two manufacturing properties, located in Massachusetts and New Hampshire, where the company produces all of its windows and doors and a corporate headquarters building in Waltham, Massachusetts, which is home to its finance, accounting, sales, and senior management teams.
Twenty-seven of the 30 properties are located in New England (93.2% sq. ft., 94.9% allocated loan amount), with the largest concentration by state located in Massachusetts, with 11 properties representing 35.6% of property sq. ft. and 39.5% of allocated loan amount. The Harvey Building Products Portfolio Properties were built between 1950 and 2009, with an average age of 19 years.
The Harvey Building Products Portfolio Properties consist of a blend of office, warehouse, and manufacturing space and range from approximately 13,736 sq. ft. to 376,294 sq. ft. in size.
Environmental Matters. The Phase I environmental reports are dated September 2015. Phase II reports were recommended for the following properties: with respect to the Waltham property, to rule out groundwater contamination; with respect to the Woburn property, to rule out groundwater contamination and ensure containment of existing aboveground storage tanks; with respect to the Woburn CPD property, to ensure that the underground storage tanks have been removed and to rule out groundwater contamination; with respect to the Bethlehem property, to rule out groundwater contamination; and with respect to the Fitchburg property, to rule out groundwater contamination. The Borrower agreed to undertake mitigating actions under the environmental indemnity and environmental insurance was obtained for the portfolio in lieu of obtaining Phase II reports.
Property Tenancy.Harvey Industries, Inc. (“Harvey Building Products” or “Opco”) executed a single 20 year absolute net unitary master lease (“Master Lease”) for the 30 properties at an initial yearly base rent of $14,950,000 ($7.31 PSF). The Master Lease represents an absolute net lease, with Harvey Building Products responsible for the direct payment of all real estate taxes, insurance premiums, and capital expenditures. The Master Lease has no termination options except with respect to substantial condemnation with respect to the affected property or other termination options tied to casualty or changes in law during the last two years of the initial term of the Master Lease or any option period. The rent steps up 10% every six years and there are two, five-year renewal options with 360 days’ notice to the Landlord.
Harvey Building Products offers a broad base of exterior products including: vinyl windows, exterior doors, vinyl siding, shutters, PVC trim, and decking. The company’s revenue streams are split approximately 40% in the manufacture and direct to contractor sale of Harvey-branded windows and doors, and approximately 60% in the distribution of third party building products to contractors. Harvey Building Products reported total revenues of $403.9 million over the trailing twelve month period ended May 31, 2015.
Harvey Building Products is a leading manufacturer and marketer of premium vinyl windows, as well as a wholesale distributor of a broad range of exterior building products, and has been in continuous operation since 1961. They currently have the leading market position for vinyl windows in its core Northeastern markets, and have installed over 10 million windows since 1990. Harvey Building Products is consistently ranked in the top 15 manufacturers on Windows & Door’s Top 100 Manufacturers list.
B-52 |
Various | Collateral Asset Summary – Loan No. 6 Harvey Building Products Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $41,953,778 53.5% 1.96x 12.8% |
According to the company’s T-12 financial statements ended July 2015, the warehouse locations that will serve as collateral for the Harvey Building Products Portfolio Loan generated total sales of $324,852,851, representing a 2.8% occupancy cost on the their allocated rental rate of $9,077,888. Overall, the collateral locations represent a majority of Harvey Building Products’ sales.
Historical Portfolio EBITDAR | |||||||||
State | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | T-12 7/30/2015 | |
EBITDAR | 30,400,000 | 36,725,000 | 32,102,000 | 32,441,000 | 33,300,000 | 31,877,000 | 33,470,000 | 36,238,000 | |
Rent Coverage Ratio | 2.0x | 2.5x | 2.1x | 2.2x | 2.2x | 2.1x | 2.2x | 2.4x | |
The Market.The overall United States national industrial market continued to strengthen with overall availability rates declining to 9.8% in Q2 2015. Rents increased, growing by 1.3% in Q2 2015 and by nearly 3% year-to-date. Demand has been strong, with 68.6 million sq. ft. of positive net absorption recorded in Q2 2015—up 36% over the previous quarter and 20% year-over-year. According to the US Census Bureau, spending in the repair and remodel market is expected to grow by 4.4% annually between 2014 and 2018, driven by improved consumer confidence and employment.
The Harvey Building Products Portfolio Properties span across seven states in the Northeast United States, primarily focused in Massachusetts, Connecticut, and New Hampshire.
State Level Concentrations | |||||||
State | Number of Properties | Sq. Ft. | % of Portfolio NRA | Weighted Average Occupancy | U/W Base Rent | % of U/W Base Rent | U/W Base Rent PSF |
Massachusetts | 11 | 728,899 | 35.6% | 100.0% | $5,902,711 | 39.5% | $8.10 |
Connecticut | 7 | 332,097 | 16.2% | 100.0% | $2,517,589 | 16.8% | $7.58 |
New Hampshire | 5 | 659,391 | 32.2% | 100.0% | $4,712,005 | 31.5% | $7.15 |
Pennsylvania | 3 | 139,712 | 6.8% | 100.0% | $740,827 | 5.0% | $5.30 |
Rhode Island | 2 | 124,139 | 6.1% | 100.0% | $683,475 | 4.6% | $5.51 |
Maine | 1 | 48,145 | 2.4% | 100.0% | $281,254 | 1.9% | $5.84 |
Vermont | 1 | 13,736 | 0.7% | 100.0% | $109,545 | 0.7% | $7.98 |
Total / Wtd. Avg. | 30 | 2,046,119 | 100.0% | 100.0% | $14,947,405 | 100.0% | $7.31 |
Massachusetts Market. (11 properties totaling 728,899 sq. ft., 35.6% of NRA, 39.5% of U/W Base Rent) Boston’s economy has been expanding steadily with an unemployment rate that is well below the national average at 4.4%. In addition, multifamily permitting numbers have reached record highs. The Greater Boston Industrial market has benefited from positive absorption of 1.24 million sq. ft. in Q2 2015. This was the fourth consecutive quarter with an excess of 400,000 sq. ft. of positive absorption in the market. In addition, falling vacancy rates have pressured rents upwards across all submarkets. As a result, asking rents have grown 4.5% year-over-year. The low availability and vacancy levels in the Greater Boston Industrial Market kept average asking rents of approximately $8.00 PSF NNN mark in the Metro North submarket and $15.54 PSF NNN mark in the 128-West submarket.
The lone office property in the Harvey Building Products Portfolio is located in Waltham, Massachusetts where the suburban office market saw 549,258 sq. ft. of positive absorption in Q2 2015. The vacancy rate for the Route 128-West submarket as of the 2nd quarter 2015 was 12.6% with an average asking gross rent of $29.81 PSF.
Connecticut Market.(7 properties totaling 332,097 sq. ft., 16.2% of NRA, 16.8% of U/W Base Rent) Four of the properties in the Harvey Building Products Portfolio are part of the Greater Hartford Industrial market, which experienced over 844,000 sq. ft. of positive absorption in 2014. In addition, overall vacancy fell from 13.2% at yearend 2013 to 12.3% at yearend 2014.
Two of the seven Connecticut properties in the Harvey Building Products Portfolio are part of the Westchester/ Southern Connecticut Industrial Market, which has seen its vacancy rate decrease in Q3 2015 to a five year low of 9.3% despite adding 15,000 sq. ft. of new supply in the previous quarter. In the Norwalk Industrial submarket, average rents were $10.18 PSF and vacancy decreased by 100 basis points year-over-year.
New Hampshire Market. (5 properties totaling 659,391 sq. ft., 32.2% of NRA, 31.5% of U/W Base Rent) Four of the five properties in New Hampshire, including the largest property of the Harvey Building Products portfolio, are located within the I93/Route 3 Corridor Industrial Market where vacancy rates decreased 120 basis points year-over-year in 2014 to 9.7%. The I93/Route 3 Corridor Industrial Market is also home to a 614,000 sq. ft. UPS logistics warehouse. Just east of the warehouse, FedEx Ground is expected to open a 340,000 sq. ft. facility this year.
The fifth New Hampshire property in the Harvey Building Products Portfolio is located in the Seacoast New Hampshire Industrial Market. In this market, US Foods expanded into the 500,000 sq. ft., former Poland Spring distribution center. In addition, Andover
B-53 |
Various | Collateral Asset Summary – Loan No. 6 Harvey Building Products Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $41,953,778 53.5% 1.96x 12.8% |
Health Care secured a 50,687 sq. ft. facility for their manufacturing operations and executive offices as well as its customer service, sales and marketing departments nearby.
Cash Flow Analysis.
Cash Flow Analysis(1) | ||
U/W | U/W PSF | |
Base Rent | $14,947,405 | $7.31 |
Value of Vacant Space | 0 | 0.00 |
Gross Potential Rent | $14,947,405 | $7.31 |
Total Recoveries | 847,259 | 0.41 |
Total Other Income | 0 | 0.00 |
Less: Vacancy(2) | (1,263,573) | (0.62) |
Effective Gross Income | $14,531,091 | $7.10 |
Total Operating Expenses | 435,933 | 0.21 |
Net Operating Income | $14,095,158 | $6.89 |
TI/LC | 0 | 0.00 |
Capital Expenditures | 411,326 | 0.20 |
Net Cash Flow | $13,683,832 | $6.69 |
(1) | Historical NOI is unavailable as Harvey Building Products entered into a new 20-year master lease at closing of the Harvey Building Products Portfolio Loan. |
(2) | U/W Vacancy is based on economic vacancy and represents 8.5% of Gross Potential Rent. |
Property Management. The Harvey Building Products Portfolio is self-managed by the borrower.
Lockbox / Cash Management. The Harvey Building Products Portfolio Loan is structured with a hard lockbox and in place cash management. The borrower is required to direct all tenants to deposit all rents and other payments into the lockbox account controlled by the lender that was established by the borrower at closing. Provided no Trigger Period (as defined below) is continuing, all excess cash flow is required to be swept monthly to the borrower’s operating account. Upon the occurrence and during the continuance of a Trigger Period, excess cash flow is required to be swept to an excess cash flow account that is held as collateral for the loan.
A “Trigger Period” will commence upon the occurrence of (i) an event of default under the Loan Agreement; (ii) Opco ceases to conduct its normal business operations in at least 80% of the total square footage at the Harvey Building Products Portfolio (it being understood that one or more subtenants conducting normal business operations in up to 10% of the total square feet at the property in the aggregate may count towards the 80% requirement); (iii) Opco (or its parent) being adjudicated insolvent or filing for bankruptcy; (iv) either (a) the Opco (or its successor) failing to satisfy the 4.5x EBITDA leverage ratio under Opco’s existing term loan or (b) the borrower failing to deliver the financial information required to be delivered under the lease or under any term loan or credit facility of Opco (“Opco Debt”) (including, without limitation, a calculation of EBITDA and adjusted EBITDA and a calculation of the leverage covenant under such term loan) and/or; (v) a default in the payment of principal or interest under the Opco Debt after applicable notice and cure periods.
Initial Reserves. At or about loan closing, the borrower deposited (i) $1,207,022 into a tax reserve account, (ii) $594,489 into an insurance reserve account and (iii) $500,000 into a required repairs reserve account.
Ongoing Reserves. On a monthly basis, the borrower is required to deposit reserves of (i) $199,837 into a tax reserve account, and (ii) $78,692 into an insurance reserve account
Current Mezzanine or Subordinate Indebtedness. None.
Future Mezzanine or Subordinate Indebtedness Permitted.The Harvey Building Products Portfolio loan documents allow for the pledge of direct or indirect interests in the guarantor of the mortgage loan to secure corporate level financing, provided that the value of the Harvey Building Products Portfolio property is not more than 25% of the value of all security for such financing. There is no requirement for an intercreditor agreement in connection with such pledges.
B-54 |
Various | Collateral Asset Summary – Loan No. 6 Harvey Building Products Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $41,953,778 53.5% 1.96x 12.8% |
Partial Release. The borrower may obtain the release of one or more individual Mortgaged Properties at the expiration of the lockout period, provided, among other things, (i) no event of default has occurred and is continuing, (ii) the borrower partially defeases the mortgage loan in an amount equal to the greater of (x) the net sales proceeds with respect to such individual mortgaged property and (y) 125% of the allocated loan amount for such individual mortgaged property and (iii) if, after such release, at least $11,000,000 of the principal amount of the Harvey Building Products Portfolio Loan has been defeased or repaid, the loan-to-value ratio for the remaining Mortgaged Properties is no greater than 60%.
Substitution.None.
B-55 |
Various | Collateral Asset Summary – Loan No. 6 Harvey Building Products Portfolio | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $41,953,778 53.5% 1.96x 12.8% |
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B-57 |
1 South Forest Beach Drive Hilton Head Island, SC 29928 | Collateral Asset Summary – Loan No. 7 Beach House Hilton Head | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $40,000,000 72.7% 1.58x 11.3% |
B-58 |
1 South Forest Beach Drive Hilton Head Island, SC 29928 | Collateral Asset Summary – Loan No. 7 Beach House Hilton Head | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $40,000,000 72.7% 1.58x 11.3% |
Mortgage Loan Information | |
Loan Seller: | GACC |
Loan Purpose: | Acquisition |
Sponsors: | Mark Mance; Simon Hallgarten; David Zeuske; Matthew Trevenen |
Borrower: | AGRE NV HH Property Owner LLC |
Original Balance: | $40,000,000 |
Cut-off Date Balance: | $40,000,000 |
% by Initial UPB: | 4.2% |
Interest Rate: | 4.9000% |
Payment Date: | 6thof each month |
First Payment Date: | November 6, 2015 |
Maturity Date: | October 6, 2025 |
Amortization: | Interest only for first 24 months; 360 months thereafter |
Additional Debt(1): | Future Mezzanine Debt Permitted |
Call Protection: | L(25), D(58), D or 4%(12), D or 3%(12), D or 1%(9), O(4) |
Lockbox / Cash Management: | Hard / Springing |
Reserves(2) | ||
Initial | Monthly | |
Taxes: | $271,388 | $28,122 |
Insurance: | $0 | Springing |
FF&E: | $0 | At least 4% of prior month’s gross revenues |
Renovations Funds: | $4,877,111 | NAP |
Seasonal Working Capital: | $658,778 | Springing |
PIP: | $0 | Springing |
Franchise Termination: | $0 | Springing |
Financial Information | ||
Cut-off Date Balance / Room: | $198,020 | |
Balloon Balance / Room: | $170,902 | |
Cut-off Date LTV: | 72.7% | |
Balloon LTV: | 62.8% | |
Underwritten NOI DSCR(3): | 1.78x | |
Underwritten NCF DSCR(3): | 1.58x | |
Underwritten NOI Debt Yield: | 11.3% | |
Underwritten NCF Debt Yield: | 10.1% | |
Underwritten NOI Debt Yield at Balloon: | 13.1% | |
Underwritten NCF Debt Yield at Balloon: | 11.7% | |
Property Information | |
Single Asset / Portfolio: | Single Asset |
Property Type: | Full Service Hospitality |
Collateral: | Fee Simple |
Location: | Hilton Head Island, SC |
Year Built / Renovated: | 1973 / 2012 |
Total Rooms: | 202 |
Property Management: | NVHG Beach House Hotel Operator LLC |
Underwritten NOI: | $4,533,024 |
Underwritten NCF: | $4,029,018 |
“As-is” Appraised Value: | $55,000,000 |
“As-is” Appraisal Date: | August 1, 2015 |
“As Renovated” Appraised Value(4): | $62,400,000 |
“As Renovated” Appraised Date(4): | August 1, 2016 |
“As Stabilized” Appraised Value(4): | $64,500,000 |
“As Stabilized” Appraised Date(4): | August 1, 2017 |
Historical NOI | |
Most Recent NOI: | $4,503,886 (T-12 June 30, 2015) |
2014 NOI: | $4,132,182 (December 31, 2014) |
2013 NOI: | $3,483,358 (December 31, 2013) |
2012 NOI(5): | NAV |
Historical Occupancy | |
Most Recent Occupancy: | 68.4% (June 30, 2015) |
2014 Occupancy: | 63.8% (December 31, 2014) |
2013 Occupancy: | 61.7% (December 31, 2013) |
2012 Occupancy(5): | NAV |
(1) | See “Future Mezzanine or Subordinate Indebtedness Permitted” herein. |
(2) | See “Initial Reserves” and “Ongoing Reserves” herein. |
(3) | 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 2.28x and 2.03x, respectively. |
(4) | The “As Renovated” Appraised Value assumes the Beach House Hilton Head Property has completed all scheduled renovations. Based on the “As Renovated” Value, the Beach House Hilton Head Property has an “As Renovated” LTV of 64.1%. The “As Stabilized” Appraised Value assumes the Beach House Hilton Head Property has achieved a stabilized occupancy of 68.0% and an ADR of $186.43. Based on the “As Stabilized” Value, the Beach House Hilton Head Property has an “As Stabilized” LTV of 62.0%. |
(5) | The sponsor acquired the property in 2013; as such, 2012 NOI and Occupancy are not available. |
B-59 |
1 South Forest Beach Drive Hilton Head Island, SC 29928 | Collateral Asset Summary – Loan No. 7 Beach House Hilton Head | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $40,000,000 72.7% 1.58x 11.3% |
Historical Occupancy, ADR, RevPAR(1)(2) | |||||||||
Beach House Hilton Head Property | Competitive Set | Penetration Factor | |||||||
Year | Occupancy | ADR | RevPAR | Occupancy | ADR | RevPAR | Occupancy | ADR | RevPAR |
2013 | 62.0% | $150.97 | $93.60 | 55.9% | $180.48 | $100.85 | 111.0% | 83.6% | 92.8% |
2014 | 63.7% | $157.27 | $100.22 | 59.1% | $197.16 | $116.46 | 107.9% | 79.8% | 86.1% |
T-12 Aug 2015 | 68.5% | $156.45 | $107.11 | 59.8% | $200.36 | $119.84 | 114.5% | 78.1% | 89.4% |
(1) | Source: Hospitality research report. |
(2) | Occupancy, ADR and RevPAR represent estimates from the hospitality research report. The minor variances between the underwriting, the appraisal and the above table with respect to Occupancy, ADR and RevPAR at the Beach House Hilton Head Property are attributable to variances in reporting methodologies and/or timing differences. |
The Loan. The Beach House Hilton Head loan (the “Beach House Hilton Head Loan”) is a $40.0 million fixed rate loan secured by the borrower’s fee simple interest in two condominium units, which collectively comprise a 202-room full service hotel located at 1 South Forest Beach Drive in Hilton Head Island, South Carolina (the “Beach House Hilton Head Property”). There are no other condominium units at the Beach House Hilton Head Property. The Beach House Hilton Head Loan has a 10-year term and, after an initial 24-month interest only period, amortizes on a 30-year schedule. The Beach House Hilton Head Loan accrues interest at a fixed rate equal to 4.9000%. Loan proceeds, along with approximately $12.9 million in sponsor equity, were used to retire existing debt of approximately $34.2 million, fund reserves of approximately $6.7 million and pay closing costs of approximately $1.4 million. Based on the “As-is” appraised value of $55.0 million as of August 1, 2015, the cut-off date LTV is 72.7%. Based on the “As Renovated” appraised value of $62.4 million, the cut-off date LTV is 64.1%. Based on the “As Stabilized” appraised value of $64.5 million, the cut-off date LTV is 62.0%. The most recent prior financing of the Beach House Hilton Head Property was not included in a securitization.
Sources and Uses | ||||||
Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
Mortgage Loan | $40,000,000 | 75.6% | Loan Payoff | $34,241,381 | 64.7% | |
Sponsor Equity | $12,904,129 | 24.4% | Partnership Buyout(1) | $10,492,924 | 19.8% | |
Renovation Funds(2) | $5,800,000 | 11.0% | ||||
Reserves | $930,165 | 1.8% | ||||
Closing Costs | $1,439,657 | 2.7% | ||||
Total Sources | $52,904,129 | 100.0% | Total Uses | $52,904,129 | 100.0% |
(1) | In February 2013, a joint venture formed by affiliates of Apollo Global Real Estate Management, L.P. (“Apollo”) and NV HH Beach House Investors, LLC (affiliates of Northview Hotel Group, LLC) acquired the Beach House Hilton Head Property for a total cost basis of $39.1 million ($193,564 per room). Apollo had an 88.74% interest and NV HH Beach House Investors, LLC had an 11.26% interest in the Beach House Hilton Head Property. Loan funds, along with fresh equity from the sponsor were used to refinance prior debt as well as buyout the remaining ownership interest of the Beach House Hilton Head Property. In addition to the proceeds from the Beach House Hilton Head Loan, the borrower contributed approximately $3.7 million of fresh equity in order to complete the partnership buyout for an aggregate of approximately $14.2 million. |
(2) | At loan closing, $922,889 was drawn from the renovation funds reserve account and distributed to the borrower for FF&E purchases. The remaining balance on deposit in the renovation funds reserve account is $4,877,111. |
The Borrower / Sponsor. The borrower, AGRE NV HH Property Owner LLC, is a single purpose Delaware limited liability company structured to be bankruptcy-remote, with two independent directors in the organizational structure. The sponsors of the borrower and nonrecourse carve-out guarantors are Mark Mance, Simon Hallgarten, David Zeuske and Matthew Trevenen, on a joint and several basis.
Northview Hotel Group (“NVHG”) is a fully-integrated hotel operating partner and management company led by Mark Mance, Simon Hallgarten, David Zeuske and Matthew Trevenen. The sponsors have experience in all phases of the lodging industry, including investing, financing, deal structuring, due diligence analysis, operations and construction management. NVHG currently operates a portfolio of thirteen properties, ranging from branded urban hotels to independent and soft-flagged destination resorts. Since formation in 2004, NVHG has acquired over $700 million in lodging assets as a joint venture partner with a number of the largest real estate private equity firms in the U.S. NVHG’s hotel management team has also operated over 100 hotels in the last 20 years with an asset value in excess of $3.0 billion.
The Property.The Beach House Hilton Head Property is a 202-room full service hotel located on Hilton Head Island, South Carolina. The Beach House Hilton Head Property, built in 1973 and renovated most recently in 2012, consists of a five-story building on a 4.62 acre oceanfront site located at Coligny Beach. There are 202 parking spaces at the property, which equates to 1.00 space per room. The Beach House Hilton Head Property underwent approximately $3.6 million ($17,821 per room) in renovations in 2012. The renovations included upgrades to the guestrooms, meeting space and common area space to transform the property from a standard Holiday Inn to “The Beach House, a Holiday Inn Resort”. In addition to the previous renovations, the sponsor plans to implement a capital improvement plan from 2015 to 2016 for a total budgeted cost of $6.4 million ($31,683 per room), of which $5.8 million was reserved for at loan closing. Since the sponsor’s acquisition in February 2013, $600,000 ($2,970 per room) has been spent for renovations at the Beach House Hilton Head Property. Of the $5.8 million in renovation funds, $4.6 million ($22,722 per room) is expected to be spent on guest rooms and $620,000 ($3,069 per room) is expected to be set aside for roofing and deferred maintenance projects. Additionally, concurrent with loan closing, $922,889 was disbursed to the borrower from the $5.8 million renovation funds
B-60 |
1 South Forest Beach Drive Hilton Head Island, SC 29928 | Collateral Asset Summary – Loan No. 7 Beach House Hilton Head | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $40,000,000 72.7% 1.58x 11.3% |
reserve account to purchase FF&E. The remaining budget of the capital improvement plan will be used for any contingency items. Following the planned renovations, which are expected to be completed in 2016, it is anticipated that the property’s rooms will be renovated to a 4-diamond standard.
The Beach House Hilton Head Property features 9,731 sq. ft. of meeting space, lounge, outdoor pool, fitness center, sundry shop, outdoor patio, guest laundry facilities, volleyball court, private beach, The Porch Southern Kitchen and Bar, The Shack (poolside restaurant) and The Tiki Hut (beachfront bar), which has been open since 1977. The Beach House Hilton Head Property is the only beachfront hotel on Hilton Head Island with a liquor license allowed to serve alcohol on the beach. The sponsors recently reallocated space within the hotel to create a second group and meeting breakout room. In 2014, the Beach House Hilton Head Property hosted 8 weddings. Post renovation, as of June 2015, there has been over 42 weddings hosted at the property.
The Beach House Hilton Head Property guestroom unit mix consists of 135 double double-bed rooms, 54 king-bed rooms, 3 king suites and 10 accessible rooms. Room categories are further divided into oceanfront, ocean view or island view. Each of the guestrooms features a television, work space, dresser, nightstands and a lounge chair. Larger rooms also include sofas, coffee tables and other related home furnishings and the rooms facing the ocean offer a small private standing balcony.
The Beach House Hilton Head Property is operated under a franchise agreement with Holiday Hospitality Franchising, LLC, which expires in February 2023. In connection with such expiration, the borrower has the option to “de-flag” the hotel and affiliate it with a pre-approved list of hotel groups, or to replace the existing franchisor with one of a specified list of franchisors and brands, as described in the accompanying prospectus supplement under “Risks Related to the Mortgage Loans—Hospitality Properties Have Special Risks.”
Environmental Matters. The Phase I environmental report dated August 24, 2015 recommended no further action at the Beach House Hilton Head Property.
The Market.The Beach House Hilton Head Property is located on Hilton Head Island, South Carolina within Beaufort County. Hilton Head is the largest barrier island on the Atlantic coast between Florida and New Jersey. It is located at the southernmost point of South Carolina, approximately 25 miles northeast of Savannah, Georgia. Approximately 2.5 million visitors stay in Hilton Head annually, with slightly more than half of the visitors coming during the three-month period between Memorial Day and Labor Day, of which 65% are estimated to be repeat visitors. Hilton Head has an official population of approximately 39,412 as of 2014; however, this population swells to over 250,000 in the summer months.
Hilton Head Island is regarded as the most popular resort destination in South Carolina and although it is known primarily for its beaches, other major tourist and leisure attractions include 24 world class golf courses, of which seven have been nationally ranked. The island also hosts the annual RBC Heritage PGA Tour, which has been played every April since 1969. The event is played at Sea Pine’s Harbour Town Golf Links, which is recognized as one of America’s top courses and consistently draws over 100,000 fans. An economic impact study estimated the tournament infuses approximately $96.0 million into the state each and every year. Additionally, there are more than 250 restaurants and 200 outlets and stores located on the island. The largest retail development on the island includes the Shelter Cove Mall, located approximately 4 miles northeast of the Beach House Hilton Head Property, and the adjacent neighborhood shopping center. The mall entrance is directly connected to US-278, the main road through the island and features 290,000 sq. ft. of retail, restaurant and entertainment space and is anchored by Belk and Kroger while the shopping center is anchored by TJ Maxx and Whole Foods.
The primary competitive set for the Beach House Hilton Head Property consists of four hotels, which range in size from 323 to 513 rooms and contain an aggregate of 1,592 rooms. The appraiser determined there is no new supply expected to be directly competitive to the Beach House Hilton Head Property given the property’s recent renovations and beachfront location. The subsequent chart presents the primary competitive set to the Beach House Hilton Head Property:
Primary Competitive Set(1) | ||||||
Property | Rooms | Year Opened | Approximate Distance | 2014 Occupancy(2) | 2014 ADR(2) | 2014 RevPAR(2) |
Beach House Hilton Head Property | 202 | 1973 | NAP | 64.0% | $157.03 | $100.01 |
Sonesta Resort | 340 | 1981 | 5.1 miles | 60.0% | $195.00 | $117.00 |
Omni Hilton Head Oceanfront Resort | 323 | 1981 | 5.2 miles | 61.0% | $190.00 | $115.90 |
Marriott Hilton Head Resort | 513 | 1976 | 5.0 miles | 54.0% | $177.00 | $95.58 |
Westin Resort | 416 | 1985 | 7.4 miles | 63.0% | $225.00 | $141.75 |
Total / Wtd. Avg.(3) | 1,592 | 59.1% | $196.02 | $116.34 |
(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 Beach House Hilton Head Property are attributable to variances in reporting methodologies and/or timing differences. |
(3) | Total / Wtd. Avg. does not include the Beach House Hilton Head Property. |
B-61 |
1 South Forest Beach Drive Hilton Head Island, SC 29928 | Collateral Asset Summary – Loan No. 7 Beach House Hilton Head | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $40,000,000 72.7% 1.58x 11.3% |
The appraiser determined demand segmentation of 85% leisure travel, 10% meeting and group and 5% commercial for the Beach House Hilton Head Property, compared to 70% leisure travel, 25% meeting and group and 5% commercial for the primary competitive set. The market demand mix is presented in the table below:
Demand Segmentation(1) | ||||
Property | Rooms | Commercial | Meeting and Group | Leisure |
Beach House Hilton Head Property | 202 | 5% | 10% | 85% |
Sonesta Resort | 340 | 5% | 30% | 65% |
Omni Hilton Head Oceanfront Resort | 323 | 5% | 25% | 70% |
Marriott Hilton Head Resort | 513 | 5% | 25% | 70% |
Westin Resort | 416 | 5% | 30% | 65% |
Total / Wtd. Avg.(2) | 1,592 | 5% | 27% | 68% |
(1) | Source: Appraisal. |
(2) | Total / Wtd. Avg. does not include the Beach House Hilton Head Property. |
Cash Flow Analysis.
Cash Flow Analysis | ||||||
2013 | 2014 | T-12 6/30/2015 | U/W | U/W per Room | ||
Occupancy | 61.7% | 63.8% | 68.4% | 68.4% | ||
ADR | $149.05 | $156.67 | $156.65 | $156.65 | ||
RevPAR | $91.90 | $100.01 | $107.21 | $107.21 | ||
Room Revenue | $6,775,720 | $7,373,782 | $7,904,244 | $7,904,244 | $39,130 | |
F&B Revenue | 2,286,850 | 3,701,389 | 3,934,611 | 3,934,611 | 19,478 | |
Other Revenue | 533,211 | 610,470 | 760,990 | 760,990 | 3,767 | |
Total Revenue | $9,595,781 | $11,685,641 | $12,599,845 | $12,599,845 | $62,375 | |
Operating Expenses | 2,821,340 | 3,893,299 | 4,139,331 | 4,139,448 | 20,492 | |
Undistributed Expenses | 2,374,023 | 2,540,525 | 2,789,425 | 2,789,425 | 13,809 | |
Gross Operating Profit | $4,400,418 | $5,251,817 | $5,671,089 | $5,670,972 | $28,074 | |
Management Fee(1) | 287,873 | 350,574 | 377,995 | 377,995 | 1,871 | |
Total Fixed Charges | 629,187 | 769,061 | 789,207 | 759,952 | 3,762 | |
Net Operating Income | $3,483,358 | $4,132,182 | $4,503,886 | $4,533,024 | $22,441 | |
FF&E(2) | 383,831 | 467,431 | 506,006 | 504,006 | 2,495 | |
Net Cash Flow | $3,099,527 | $3,664,751 | $3,997,881 | $4,029,018 | $19,946 |
(1) | U/W Management Fee is 3.0% of gross revenues. |
(2) | U/W FF&E represents 4.0% of gross revenues. |
Property Management. The Beach House Hilton Head Property is managed by NVHG Beach House Hotel Operator LLC, an affiliate of the borrower.
Lockbox / Cash Management. The Beach House Hilton Head Loan is structured with a hard lockbox and springing cash management. All rents and other payments are required to be deposited directly into a clearing account controlled by the lender. Unless a Trigger Period (as defined herein) is ongoing, all amounts on deposit in the clearing account are required to be swept daily into the borrower’s account. During a Trigger Period, all amounts on deposit in the clearing account are required to be swept daily into an account controlled by the lender and applied to pay all monthly amounts due under the loan documents.
A “Trigger Period” will commence (i) upon an event of default, (ii) during a Low Debt Service Period (as defined herein), (iii) if a PIP is required by the franchisor or by an Acceptable Non-Flag Affiliation Group (as defined herein) or any PIP required with de-flagging (which will end when 110% of the estimated PIP costs are deposited), (iv) 12 months prior to expiration of the term of the franchise agreement (which will end as described below under “Ongoing Reserves”) or (v) a Mezzanine Trigger Period (as defined herein).
A “Low Debt Service Period” will occur if the debt service coverage ratio for the trailing 12-month period is less than 1.20x on the last day of any calendar quarter and will end if the debt service coverage ratio is at least 1.25x for two consecutive quarters.
An “Acceptable Non-Flag Affiliation Group” means (i) Preferred Hotel Group and The Leading Hotels of the World, Ltd., provided that the Beach House Hilton Head Property is given full access to their respective sales, marketing and reservations systems and is listed
B-62 |
1 South Forest Beach Drive Hilton Head Island, SC 29928 | Collateral Asset Summary – Loan No. 7 Beach House Hilton Head | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $40,000,000 72.7% 1.58x 11.3% |
as one of the “Preferred Hotels & Resorts” or “Leading Hotels of the World”, respectively or (ii) another hotel group reasonably acceptable to the lender.
A “Mezzanine Trigger Period” will commence and continue for so long as any mezzanine loan is outstanding.
Initial Reserves.At loan closing, the borrower deposited (i) $271,388 into a tax reserve account, (ii) $5,800,000 into a renovation funds reserve, of which $922,889 has already been disbursed to the borrower for FF&E purchases and (iii) $658,778 into a seasonal working capital reserve account.
Ongoing Reserves.On a monthly basis, the borrower is required to deposit monthly reserves of (i) 1/12 of the estimated annual real estate taxes, which currently equates to $28,122, into a tax reserve account and (ii) the greater of (a) 4.0% of the property’s prior month’s gross revenues, (b) any amount required under the management agreement and (c) any amount required under the franchise agreement for FF&E work (notwithstanding the foregoing, if as a result of the deposit of excess renovation funds the balance in the FF&E reserve exceeds $1,000,000, the borrower’s obligation to make monthly payments will temporarily cease until the first monthly payment date following the date on which the amount on deposit in the FF&E reserve account falls below $500,000). In addition, the borrower is required to deposit 1/12 of the estimated annual insurance premiums into an insurance reserve account if an acceptable blanket policy is no longer in place.
Beginning in April 2016, the borrower will be required to deposit an amount equal to the Seasonal Working Capital Reserve Account Monthly Deposit (as defined herein) on each monthly payment date in April, May, June, July, August, September, October and November if the seasonal working capital reserve account balance is less than the Seasonal Working Capital Reserve Annual Deposit Amount (as defined herein).
The “Seasonal Working Capital Reserve Annual Deposit Amount” will be equal to the sum of (a) the required monthly deposits into the tax reserve account, the insurance reserve account (if any) and the FF&E reserve account due on each monthly payment date occurring in December, January, February and/or March of each year during the loan term, (b) the monthly debt service amount or monthly interest payment amount (as applicable) due on each monthly payment date occurring in December, January, February and/or March of each year during the loan term, and (c) during the continuance of a Trigger Period only, the monthly operating expense budgeted amount applicable to the months of December, January, February and/or March of each year during the loan term and an amount for the payment of approved extraordinary operating expenses applicable to the months of December, January, February and/or March of each year during the loan term as reasonably determined by lender.
The “Seasonal Working Capital Reserve Account Monthly Deposit” will be equal to the quotient of the Seasonal Working Capital Reserve Annual Deposit Amount divided by eight or such lesser amount as is necessary to cause the amount on deposit in the seasonal working capital reserve account to equal the Seasonal Working Capital Reserve Annual Deposit Amount.
If the franchisor requires the borrower to implement a PIP at the Beach House Hilton Head Property or a PIP is required by an Acceptable Non-Flag Affiliation Group or a PIP is required as reasonably determined by the lender to de-flag the property, the borrower is required to deposit 110% of the estimated cost of the PIP. In addition, if the franchise agreement has less than twelve whole calendar months of term remaining or has been terminated, all available cash is required to be deposited into an account for the benefit of the lender until either borrower renews its current franchise agreement or enters into a new franchise agreement with a new franchisor of a pre-approved brand or elects to de-flag the property.
Upon the borrower de-flagging the property, the borrower is required to deposit the Franchise Termination Collateral Amount (as defined herein).
The “Franchise Termination Collateral Amount” will be the amount by which (a) $1,515,000 exceeds (b) the amount of PIP funds deposited in accordance with the loan documents. The franchise termination reserve funds are required to be released upon the Beach House Hilton Head Property achieving a 9.0% debt yield based on the trailing 12 months of operation without a flag.
Current Mezzanine or Subordinate Indebtedness. None.
Future Mezzanine or Subordinate Indebtedness Permitted. Mezzanine debt is permitted provided, among other conditions, (i) the combined LTV must be less than or equal to 72.73%, (ii) the combined DSCR must be greater than or equal to 1.43x and (iii) the combined debt yield must be greater than or equal to 9.60%.
B-63 |
1 South Forest Beach Drive Hilton Head Island, SC 29928 | Collateral Asset Summary – Loan No. 7 Beach House Hilton Head | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $40,000,000 72.7% 1.58x 11.3% |
B-64 |
(THIS PAGE INTENTIONALLY LEFT BLANK)
B-65 |
105 East Delaware Place Chicago, IL 60611 | Collateral Asset Summary – Loan No. 8 Whitehall Hotel | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $35,944,447 53.6% 1.51x 11.7% |
B-66 |
105 East Delaware Place Chicago, IL 60611 | Collateral Asset Summary – Loan No. 8 Whitehall Hotel | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $35,944,447 53.6% 1.51x 11.7% |
Mortgage Loan Information | |
Loan Seller: | JLC |
Loan Purpose: | Refinance |
Sponsor: | Su-Mei Yen; Hui-Hsien Bert Yen |
Borrower: | Whitehall Hotel, L.L.C. |
Original Balance: | $36,000,000 |
Cut-off Date Balance: | $35,944,447 |
% by Initial UPB: | 3.7% |
Interest Rate: | 4.9900% |
Payment Date: | 6thof each month |
First Payment Date: | November 6, 2015 |
Maturity Date: | October 6, 2025 |
Amortization: | 300 months |
Additional Debt: | None |
Call Protection(1): | L(25), D(91), O(4) |
Lockbox / Cash Management: | Hard / Springing |
Reserves(2) | ||
Initial | Monthly | |
Taxes: | $225,000 | $48,900 |
Insurance: | $138,000 | $11,900 |
Rooms Renovation: | $300,000 | NAP |
FF&E: | NAP | 1/12 of 4% of annual operating income |
Required Repairs: | $38,750 | NAP |
Capital Expense: | NAP | 1/12 of 1% of annual operating income |
Financial Information | ||
Cut-off Date Balance / Room: | $161,912 | |
Balloon Balance / Room: | $121,220 | |
Cut-off Date LTV: | 53.6% | |
Balloon LTV: | 40.2% | |
Underwritten NOI DSCR: | 1.67x | |
Underwritten NCF DSCR: | 1.51x | |
Underwritten NOI Debt Yield: | 11.7% | |
Underwritten NCF Debt Yield: | 10.6% | |
Underwritten NOI Debt Yield at Balloon: | 15.7% | |
Underwritten NCF Debt Yield at Balloon: | 14.1% |
Property Information | |
Single Asset / Portfolio: | Single Asset |
Property Type: | Full Service Hospitality |
Collateral: | Fee Simple |
Location: | Chicago, IL |
Year Built / Renovated: | 1928 / 1972, 1994, 2012-2014 |
Total Rooms: | 222 |
Property Management: | SB Yen’s Management Group, Inc. |
Underwritten NOI: | $4,219,228 |
Underwritten NCF: | $3,805,822 |
Appraised Value: | $67,000,000 |
Appraisal Date: | September 1, 2015 |
Historical NOI | |
Most Recent NOI: | $4,198,985 (T-12 July 31, 2015) |
2014 NOI: | $3,645,822 (December 31, 2014) |
2013 NOI: | $2,536,649 (December 31, 2013) |
2012 NOI: | $2,714,749 (December 31, 2012) |
Historical Occupancy(3) | |
Most Recent Occupancy: | 78.2% (July 31, 2015) |
2014 Occupancy: | 76.6% (December 31, 2014) |
2013 Occupancy: | 66.9% (December 31, 2013) |
2012 Occupancy: | 68.5% (December 31, 2012) |
(1) | See “Partial Releases” herein. |
(2) | See “Initial Reserves” and “Ongoing Reserves” herein. |
(3) | The Whitehall Hotel Property was under renovation from 2012-2014 and rooms were taken offline to complete the renovations. Excluding the rooms taken offline during the renovations, 2012, 2013 and 2014 occupancy was equal to 73.3%, 73.6% and 78.9%, respectively. |
B-67 |
105 East Delaware Place Chicago, IL 60611 | Collateral Asset Summary – Loan No. 8 Whitehall Hotel | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $35,944,447 53.6% 1.51x 11.7% |
Historical Occupancy, ADR, RevPAR(1) | |||||||||
Whitehall Hotel Property | Competitive Set | Penetration Factor | |||||||
Year | Occupancy | ADR | RevPAR | Occupancy | ADR | RevPAR | Occupancy | ADR | RevPAR(2) |
2012 | 69.1% | $144.69 | $99.94 | 74.6% | $167.95 | $125.35 | 92.6% | 86.2% | 79.7% |
2013 | 67.4% | $149.29 | $100.59 | 75.0% | $174.39 | $130.82 | 89.8% | 85.6% | 76.9% |
2014 | 77.2% | $143.55 | $110.87 | 76.0% | $171.63 | $130.46 | 101.6% | 83.6% | 85.0% |
T-12 July 2015 | 78.5% | $154.90 | $121.67 | 77.1% | $180.09 | $138.89 | 101.9% | 86.0% | 87.6% |
(1) | Source: Hospitality research report. |
(2) | The Whitehall Hotel Property has ranked 1 of 6 in the competitive set in terms of RevPAR penetration over the last 24 month period ending July 31, 2015. |
The Loan. The Whitehall Hotel mortgage loan (the “Whitehall Hotel Loan”) is a $36.0 million fixed rate loan secured by the borrower’s fee simple interest in a 222-room full-service hotel located at 105 East Delaware Place in Chicago, Illinois (“The Whitehall Hotel Property”). The Whitehall Hotel Loan has a 10-year term and amortizes on a 25-year schedule. The Whitehall Hotel Loan accrues interest at a fixed rate equal to 4.9900% and has a cut-off date balance of approximately $35.9 million. Proceeds of the Whitehall Hotel Loan were used to retire existing debt of approximately $31.3 million, fund upfront reserves of approximately $0.7 million, pay closing costs of approximately $0.7 million and return approximately $3.4 million of equity to the sponsor. Based on the appraised value of $67.0 million as of September 1, 2015, the cut-off date LTV ratio is 53.6% and the remaining implied equity is approximately $31.0 million. The most recent prior financing of The Whitehall Hotel Property was included in the GCCFC 2005-GG5 transaction.
Sources and Uses | ||||||
Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
Mortgage Loan | $36,000,000 | 100.0% | Loan Payoff | $31,272,307 | 86.9% | |
Rooms Renovation Reserve | $300,000 | 0.8% | ||||
Upfront Reserves | $401,750 | 1.1% | ||||
Closing Costs | $674,804 | 1.9% | ||||
Return of Equity | $3,351,139 | 9.3% | ||||
Total Sources | $36,000,000 | 100.0% | Total Uses | $36,000,000 | 100.0% |
The Borrower / Sponsor. The borrower, Whitehall Hotel, L.L.C. is a single purpose Illinois 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 Su-Mei Yen and Hui-Hsien Bert Yen, on a joint and several basis.
The sponsors of the borrower are hotel operators with over 25 years of ownership and management experience. The sponsors’ portfolio of properties includes the Whitehall Hotel Property, the Best Western Grant Park located in Chicago, Illinois, the Best Western University Plaza located in Evanston, Illinois, the Comfort Inn Downers Grove located in Grove, Illinois and the Best Western DeKalb Inn and Suites located in DeKalb, Illinois.
The Property. The Whitehall Hotel Property is a 222-room, luxury, full-service boutique hotel that was originally built in 1928 as an apartment tower and was converted to hotel use in 1972. There are a total of 222 guestrooms (of which 23 are suites, including the Delaware and Whitehall suites on the top floor which have access to private rooftop decks with views of the city and Lake Michigan).
The Whitehall Hotel Property guestrooms and suites offer king, queen and double queen layouts. Typical guest room furnishings include premium Egyptian cotton linens, white silk duvet covers over goose down comforters and Cashmere Hypnos Mattresses. Typical guest room bathrooms feature marble with hand-placed onyx mosaic tiles with shower and soaking tub, vanity and luxury bath amenities. All guestrooms feature 42-inch high definition LED televisions, wireless internet access, custom designed furniture, a cordless phone, Whitehall signature plush robes and a mini-bar.
The Whitehall Hotel Property amenities include a lobby with 24-hour front desk, concierge service, valet parking, 24-hour security, business center, fitness center, two restaurants (Fornetto Mei, a pan-Italian restaurant and Mei’s Corner, an upscale Asian restaurant), overnight shoe shines, valet laundry and 24-hour room service. The Whitehall Hotel Property also features 2,600 sq. ft. of meeting and banquet space which benefits from custom catering from the onsite restaurants and also provides a number of multi-use areas fit for entertaining and hosting up to 150 guests for special events, corporate meetings and banquet receptions.
The sponsors acquired the Whitehall Hotel Property in 1989 and subsequently completed a $25.0 million restoration program in 1994. The sponsor then reopened the Whitehall Hotel Property as an elegant small European hotel operation. Since 2000, the sponsor has invested approximately $18.3 million ($82,339 per room) through a variety of building improvements, including $14.6 million ($65,913 per room) invested over the past 10 years to improve the guestrooms including all rooms on the floors 3-17, lobby and common areas, exterior façade, mechanical systems and food and beverage outlets. The sponsor has informed the lender that it plans to renovate the suites on floors 18-21 during 2016.
B-68 |
105 East Delaware Place Chicago, IL 60611 | Collateral Asset Summary – Loan No. 8 Whitehall Hotel | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $35,944,447 53.6% 1.51x 11.7% |
Historical Capital Expenditures(1) | |||||||||
Item | 2000-01 | 2002-03 | 2004-05 | 2006-07 | 2008-09 | 2010-11 | 2012-13 | 2014-15 | Total |
Room Renovations, FF&E, & Interior Improvements | $1,875,280 | $81,558 | $480,463 | $2,688,498 | $136,540 | $84,770 | $1,810,045 | $305,798 | $7,462,951 |
Lobby & Common Area Renovations | $0 | $0 | $0 | $0 | $0 | $0 | $490,104 | $0 | $490,104 |
FF&E Restaurants / Opening of New Restaurant | $265,914 | $12,705 | $94,609 | $35,131 | $0 | $329,538 | $14,175 | $1,439 | $753,511 |
FF&E Computers, Internet, Telephone, Office | $0 | $0 | $69,329 | $271,632 | $22,650 | $24,158 | $200,224 | $152,385 | $740,378 |
Building Improvement - Exterior | $1,048,312 | $14,259 | $845,805 | $15,220 | $71,625 | $247,232 | $483,175 | $327,292 | $3,052,920 |
Building Improvement - HVAC, Plumbing, Etc. | $95,520 | $32,500 | $0 | $111,634 | $3,562,242 | $1,258,530 | $149,292 | $240,430 | $5,450,147 |
Operating Equipment & Elevator Upgrades | $0 | $0 | $0 | $329,304 | $0 | $0 | $0 | $0 | $329,304 |
Total | $3,285,026 | $141,022 | $1,490,206 | $3,451,417 | $3,793,057 | $1,944,228 | $3,147,013 | $1,027,344 | $18,279,315 |
(1) | Source: Sponsor |
Environmental Matters. The Phase I environmental report dated September 8, 2015 recommended no further action at the Whitehall Hotel Property.
The Market. The Whitehall Hotel Property is located in the Gold Coast neighborhood in the city of Chicago, Illinois. Located one-half block from Michigan Avenue, in close proximity to the lakefront and just off of the Magnificent Mile shopping area, the Whitehall Hotel Property is located in one of the most affluent areas in Chicago. The Gold Coast features tree-lined streets, Victorian houses, stately mansions, brownstones and luxury high-rise condominiums overlooking Lake Michigan. The 2014 average household income and population within a one-mile radius are $141,947 and 91,930, respectively. The Whitehall Hotel Property is within close proximity to some of Chicago’s historic cultural and tourist attractions including the Magnificent Mile, Water Tower, the John Hancock Center, Museum of Contemporary Art, Navy Pier, Millennium Park and Oak Street Beach.
The demand segmentation for the Whitehall Hotel Property consists of 50% commercial demand, 15% meeting and group demand and 35% leisure demand.
The Whitehall Hotel Property’s immediate marketplace includes five competitive properties, including MileNorth, Millennium Knickerbocker, Raffaello Hotel, The Talbott Hotel and The James Hotel Chicago. The five primary competitors range in size from 149 to 305 rooms and the competitive set collectively contains an aggregate of 1,346 rooms. The five primary competitors for the subject hotel are summarized in the table below:
Primary Competitive Set(1) | ||||||
Property | Rooms | Year Opened | Meeting | 2014 Occupancy | 2014 ADR | 2014 RevPAR |
Whitehall Hotel Property | 222 | 1972(2) | 2,590 | 77% | $145 | $111 |
MileNorth | 213 | 1981 | 3,000 | 76% | $165 | $125 |
Millennium Knickerbocker | 305 | 1927 | 18,500 | 80% | $215 | $172 |
Raffaello Hotel | 160 | 1979 | 400 | 73% | $130 | $95 |
The Talbott Hotel | 149 | 1926 | 1,942 | 74% | $125 | $93 |
The James Hotel Chicago | 297 | 1985 | 7,000 | 75% | $170 | $128 |
Total / Wtd. Avg. | 1,346 | 76% | $166 | $127 |
(1) | Source: Appraisal |
(2) | The Whitehall Hotel Property was built in 1928 and first opened as a hotel in 1972. |
B-69 |
105 East Delaware Place Chicago, IL 60611 | Collateral Asset Summary – Loan No. 8 Whitehall Hotel | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $35,944,447 53.6% 1.51x 11.7% |
Cash Flow Analysis.
Cash Flow Analysis | |||||||
2012 | 2013 | 2014 | T-12 7/31/2015 | U/W | U/W per Room | ||
Occupancy(1) | 68.5% | 66.9% | 76.6% | 78.2% | 75.0% | ||
ADR | $145.98 | $150.15 | $144.50 | $155.93 | $160.00 | ||
RevPAR | $100.05 | $100.51 | $110.74 | $121.90 | $120.00 | ||
Room Revenue | $8,129,201 | $8,143,979 | $8,973,227 | $9,877,689 | $9,723,680 | $43,800 | |
F&B Revenue(2) | 837,380 | 1,098,582 | 66,908 | 63,745 | 200,000 | 901 | |
Other Revenue | 441,998 | 434,351 | 426,221 | 417,759 | 411,472 | 1,853 | |
Total Revenue | $9,408,579 | $9,676,912 | $9,466,357 | $10,359,193 | $10,335,152 | $46,555 | |
Operating Expenses | 3,000,157 | 3,150,774 | 2,099,590 | 2,403,932 | 2,365,161 | 10,654 | |
Undistributed Expenses | 2,590,360 | 2,874,207 | 2,808,589 | 2,829,491 | 2,822,925 | 12,716 | |
Gross Operating Profit | $3,818,062 | $3,651,930 | $4,558,178 | $5,125,770 | $5,147,067 | $23,185 | |
Management Fee | 285,996 | 289,700 | 283,991 | 310,776 | 310,055 | 1,397 | |
Total Fixed Charges | 817,317 | 825,581 | 628,366 | 616,010 | 617,784 | 2,783 | |
Net Operating Income | $2,714,749 | $2,536,649 | $3,645,822 | $4,198,985 | $4,219,228 | $19,006 | |
FF&E(3) | 0 | 0 | 0 | 0 | 413,406 | 1,862 | |
Net Cash Flow | $2,714,749 | $2,536,649 | $3,645,822 | $4,198,985 | $3,805,822 | $17,143 |
(1) | The Whitehall Hotel Property was under renovation from 2012-2014 and rooms were taken offline to complete the renovations. Excluding the rooms taken offline during the renovations, 2012, 2013 and 2014 occupancy was equal to 73.3%, 73.6% and 78.9%, respectively. |
(2) | UW F&B Revenue represents an executed lease with Whitehall Hotel Restaurant, Inc, which is fully guaranteed by the sponsors. The initial term of the lease expires in 2027 and annual base rent is $200,000. |
(3) | U/W FF&E represents approximately 4.0% of U/W Total Revenue. |
Property Management. The Whitehall Hotel Property is managed by SB Yen’s Management Group, Inc., an affiliate of the borrower.
Lockbox / Cash Management. The Whitehall Hotel Loan is structured with a hard lockbox and springing cash management. All credit card receipts are required to be deposited by credit card processing companies directly into a clearing account, and all non-credit card receipts are required to be deposited in the clearing account within one business day of receipt by borrower or property manager. Amounts on deposit in the clearing accounts are required to be transferred daily to an account controlled by the borrower unless a Cash Management Period (defined below) is continuing.
A “Cash Management Period” will commence (i) upon the maturity date of the Whitehall Hotel Loan, (ii) upon the occurrence of an event of default, or (iii) if the debt service coverage ratio is less than 1.20x, and the period will end if (A) with respect to clause (i), the Whitehall Hotel Loan has been repaid in full, (B) with respect to clause (ii), the event of default has been cured, and (C) with respect to clause (iii) the debt service coverage ratio is at least 1.30x for two consecutive calculation dates.
Initial Reserves. At loan closing, the borrower deposited (i) $225,000 into a tax reserve account, (ii) $38,750 into a required repairs reserve account, which represents 125% of the engineer’s recommendation, (iii) $138,000 into an insurance reserve account and (iv) $300,000 into a room renovation reserve account related to the planned renovation of the suites on floors 18-21 during 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 $48,900, into a tax reserve account and (ii) 1/12of 4.0% of annual operating income into an FF&E reserve account. The borrower is required to deposit 1/12 of the annual insurance premiums, which currently equates to $11,900, into an insurance reserve account. Additionally, on each monthly payment date the borrower is required to deposit into a capital expense reserve an amount equal to 1/12 of 1% of annual operating income.
Partial Releases. On any payment date, the borrower may obtain the release of a small, non-income producing portion of the Whitehall Hotel Property (identified in the loan agreement) from the lien of the mortgage provided, among other things, the REMIC loan-to-value ratio after the release is not more than 125% and, with respect to the adjacent development (as described below), (i) lender has approved, among other things, certain agreements and plans related to the adjacent development, (ii) borrower has delivered $1,800,000 to lender to be held as additional collateral for the Whitehall Hotel Loan (until such time that the adjacent development is completed to the satisfaction of lender) and (iii) the sponsors have delivered to lender a guaranty of lien-free completion of the adjacent development. According to the sponsors, an affiliate of the borrower intends to develop the released parcel, together with adjacent parcels owned by an affiliate of the borrower, for the purpose of developing on the property adjacent to the Whitehall Hotel Property amenities that may be used by guests at the Whitehall Hotel Property including, a ballroom, meeting and event space, parking area, office space, restaurant, gym, and other amenity spaces and services for the Whitehall Hotel Property.
B-70 |
105 East Delaware Place Chicago, IL 60611 | Collateral Asset Summary – Loan No. 8 Whitehall Hotel | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $35,944,447 53.6% 1.51x 11.7% |
Current Mezzanine or Subordinate Indebtedness. None.
Future Mezzanine or Subordinate Indebtedness Permitted. None.
B-71 |
105 East Delaware Place Chicago, IL 60611 | Collateral Asset Summary – Loan No. 8 Whitehall Hotel | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $35,944,447 53.6% 1.51x 11.7% |
B-72 |
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B-73 |
611 Cowper Street Palo Alto, CA 94301 | Collateral Asset Summary – Loan No. 9 611 Cowper | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $32,914,514 55.8% 1.60x 10.1% |
B-74 |
611 Cowper Street Palo Alto, CA 94301 | Collateral Asset Summary – Loan No. 9 611 Cowper | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $32,914,514 55.8% 1.60x 10.1% |
Mortgage Loan Information | |
Loan Seller: | GACC |
Loan Purpose: | Refinance |
Sponsors: | Stephen Reller; Mark Moragne |
Borrower: | 611 Cowper Commercial LLC |
Original Balance: | $33,000,000 |
Cut-off Date Balance: | $32,914,514 |
% by Initial UPB: | 3.4% |
Interest Rate: | 4.3500% |
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(26), D(90), O(4) |
Lockbox / Cash Management: | Hard / Springing |
Reserves(1) | ||
Initial | Monthly | |
Taxes: | $37,308 | Springing |
Insurance: | $930 | Springing |
Replacement: | $12,000 | Springing |
TI/LC: | $3,043,827 | Springing |
Free Rent: | $1,620,000 | NAP |
Lease Sweep: | $0 | Springing |
Common Charges | $0 | Springing |
Financial Information | ||
Cut-off Date Balance / Sq. Ft.: | $1,097 | |
Balloon Balance / Sq. Ft.: | $885 | |
Cut-off Date LTV(2): | 55.8% | |
Balloon LTV(2): | 45.0% | |
Underwritten NOI DSCR: | 1.68x | |
Underwritten NCF DSCR: | 1.60x | |
Underwritten NOI Debt Yield: | 10.1% | |
Underwritten NCF Debt Yield: | 9.6% | |
Underwritten NOI Debt Yield at Balloon: | 12.5% | |
Underwritten NCF Debt Yield at Balloon: | 11.9% | |
Property Information | |
Single Asset / Portfolio: | Single Asset |
Property Type: | Suburban Office |
Collateral: | Fee Simple |
Location: | Palo Alto, CA |
Year Built / Renovated: | 2015 / NAP |
Total Sq. Ft.: | 30,000 |
Property Management: | Premier Property Management, Inc. |
Underwritten NOI: | $3,316,626 |
Underwritten NCF: | $3,162,396 |
“As-is” Appraised Value: | $51,800,000 |
“As-is” Appraisal Date: | June 29, 2015 |
“As Stabilized” Appraised Value(3): | $59,000,000 |
“As Stabilized” Appraisal Date(3): | November 1, 2015 |
Historical NOI(4) | |
2014 NOI: | NAP |
2013 NOI: | NAP |
2012 NOI: | NAP |
Historical Occupancy(4) | |
Most Recent Occupancy: | 100.0% (November 6, 2015) |
2014 Occupancy: | NAP |
2013 Occupancy: | NAP |
2012 Occupancy: | NAP |
(1) | See “Initial Reserves” and “Ongoing Reserves” herein. |
(2) | The Cut-off Date LTV and Balloon LTV were calculated using the As Stabilized Appraised Value of $59.0 million. Based on the As-is Appraised Value, the Cut-off Date LTV and Balloon LTV are 63.5% and 51.2%, respectively. |
(3) | The As Stabilized Appraised Value assumes the punch list items have been completed and all free rent and TI allowance have been exhausted at the 611 Cowper Property. |
(4) | The 611 Cowper Property was completed in 2015; as such, Historical NOI and Historical Occupancy are not applicable. |
B-75 |
611 Cowper Street Palo Alto, CA 94301 | Collateral Asset Summary – Loan No. 9 611 Cowper | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $32,914,514 55.8% 1.60x 10.1% |
Tenant Summary | |||||||
Tenant | Ratings | Net Rentable | % of Net |
| U/W Base | % of Total | Lease |
A9.com | NR/Baa1/AA- | 30,000 | 100.0%(2) | $108.00 | 100.0% | 10/31/2025 | |
Total Occupied Collateral | 30,000 | 100.0% | $108.00 | 100.0% | |||
Vacant | 0 | 0.0% | |||||
Total | 30,000 | 100.0% | |||||
(1) | Credit ratings represent Amazon.com, Inc., the parent company of A9.com. Amazon.com, Inc. guarantees up to $10,000,000 of the A9.com lease. See “Tenant” below. |
(2) | The 611 Cowper Property is 100.0% leased to A9.com. The tenant is anticipated to take occupancy in 2015. |
Lease Rollover Schedule | ||||||||
Year | # of | Total | % of Total Sq. | Cumulative | Cumulative % of | Annual U/W | % U/W | Cumulative % |
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 | 0 | 0 | 0.0% | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
2020 | 0 | 0 | 0.0% | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
2021 | 0 | 0 | 0.0% | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
2022 | 0 | 0 | 0.0% | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
2023 | 0 | 0 | 0.0% | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
2024 | 0 | 0 | 0.0% | 0 | 0.0% | $0.00 | 0.0% | 0.0% |
2025 | 1 | 30,000 | 100.0% | 30,000 | 100.0% | $108.00 | 100.0% | 100.0% |
Thereafter | 0 | 0 | 0.0% | 30,000 | 100.0% | $0.00 | 0.0% | 100.0% |
Vacant | NAP | 0 | 0.0% | 30,000 | 100.0% | NAP | NAP | |
Total / Wtd. Avg. | 1 | 30,000 | 100.0% | $108.00 | 100.0% | |||
The Loan. The 611 Cowper loan (the “611 Cowper Loan”) is a fixed rate loan secured by the borrower’s fee simple interest in an office condominium totaling 30,000 sq. ft., located on the first three stories of a four-story, newly constructed Class A office and residential building located at 611 Cowper Street in Palo Alto, California (the “611 Cowper Property”) with an original principal balance of $33.0 million. The 611 Cowper Loan has a 10-year term and amortizes on a 30-year schedule. The 611 Cowper Loan accrues interest at a fixed rate equal to 4.3500% and has a cut-off date balance of $32.9 million. Loan proceeds were used to retire existing debt of approximately $15.4 million, fund upfront reserves of approximately $3.0 million, pay closing costs of approximately $2.0 million, pay punch list items of approximately $1.7 million and return approximately $11.0 million of equity to the sponsor. Based on the “As-is” appraised value of $51.8 million, the cut-off date LTV ratio is 63.5%. Based on the “As Stabilized” value of $59.0 million, the cut-off date LTV ratio is 55.8%.The most recent prior financing of the 611 Cowper Property was not included in a securitization.
Sources and Uses | ||||||
Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
Mortgage Loan | $33,000,000 | 100.0% | Loan Payoff | $15,364,048 | 46.6% | |
Reserves | $3,020,238 | 9.2% | ||||
Closing Costs | $1,952,063 | 5.9% | ||||
Punch List Items | $1,693,827 | 5.1% | ||||
Return of Equity | $10,969,824 | 33.2% | ||||
Total Sources | $33,000,000 | 100.0% | Total Uses | $33,000,000 | 100.0% |
B-76 |
611 Cowper Street Palo Alto, CA 94301 | Collateral Asset Summary – Loan No. 9 611 Cowper | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $32,914,514 55.8% 1.60x 10.1% |
The Borrower / Sponsor. The borrower, 611 Cowper Commercial LLC, is a special 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 nonrecourse carve-out guarantors are Stephen Reller and Mark Moragne, on a joint and several basis.
Stephen Reller and Mark Moragne own and operate R&M Properties and NorthWall Builders, a home and office developer and construction company located in Palo Alto, California. Over the past two years, the borrowers have completed a number of developments within Palo Alto including an office and residential development on Hamilton Avenue, a historical renovation of an apartment building on Gilman Street, a renovation of an office building on Hawthorne Avenue and the development of a new 44-unit assisted living facility on El Camino Way.
The sponsors are 100% owners of 611 Cowper Commercial LLC, which is the sole owner and member of both the borrowing entity and the entity which holds the residential condominium unit. The commercial portion of the 611 Cowper Property has 80% of the voting rights in the condominium association.
The Property. The 611 Cowper Property is a 30,000 sq. ft. office condominium located on the first three stories of a newly constructed four-story, Class A office and residential building. The sponsor originally purchased the 611 Cowper Property in 2012 for $7.95 million and subsequently bought out the existing tenants and tore down the existing structure. The sponsor began construction on the 611 Cowper Property in January 2014 for a total development cost of $34.3 million including land value and the building was completed in October 2015. The building, which is comprised of a two unit condominium, has a total NRA of 36,712 sq. ft. with 30,000 sq. ft. allocated to the office space and 6,712 sq. ft. allocated to the residential space, which is not part of the collateral. The residential and commercial portions of the building have no shared common area and each features its own private access and dedicated parking spaces. The 611 Cowper Property has 58 underground parking spaces, which equates to a ratio of 1.93 spaces per 1,000 sq. ft. The tenant of the commercial portion also has exclusive use of 4,500 sq. ft. of outdoor patio and terrace space which is not included in the total NRA.
The 611 Cowper Property is located in Downtown Palo Alto, approximately 30 miles south of San Francisco and 15 miles north of San Jose. The 611 Cowper Property is well served by two access routes, University Avenue and Embarcadero Road, which intersect with US Highway 101 to the east of the 611 Cowper Property. University Avenue is a main thoroughfare within the Downtown Palo Alto area and also is the main commercial area, with many shops, restaurants, offices and theaters located on the street and on side streets adjacent to University Avenue.
Environmental Matters. The Phase I environmental report dated June 5, 2015 recommended no further action at the 611 Cowper Property.
Tenant. The 611 Cowper Property is fully leased to A9.com (“A9”), a subsidiary of Amazon.com, Inc. (“Amazon”) (rated Baa1/AA- by Moody’s/S&P). Created in 2003 by Amazon, A9 develops search and advertising technology for use by Amazon and other online eCommerce retailers. Currently, the A9 search engine powers product search globally for Amazon.com and has expanded into targeted advertising, mobile apps and searches related to the Cloud.A9 currently has another office in Palo Alto on Alma Street and additional teams in Bangalore, Beijing, Dublin, Iasi, Munich and Tokyo.
Amazon provided a parent guarantee for A9’s lease with a maximum liability of $10,000,000 during the lease term. A9’s lease commenced July 1, 2015 and expires 120 months from the rent commencement date which will occur upon the later of (i) 120 days from the commencement date (October 29, 2015) or (ii) the date upon which the building is substantially completed, subject to any punch list items to be completed by the borrower that are accepted by A9. Six months of base rent has been reserved to cover any delays in rent commencement. The sole tenant is not expected to take occupancy at the 611 Cowper Property until both (i) the borrower completes certain remaining required punch list items with respect to landlord work required under the lease and (ii) the tenant completes certain tenant improvement work for which it is entitled to tenant allowances under the lease. The property does not yet have a permanent certificate of occupancy and is operating under a temporary certificate. Payment of base rent commences at $108.00 PSF with annual 3.5% increases. A9 has two five-year renewal options at 100% of the fair market rent upon nine months’ notice. The tenant has no termination options.
On July 24, 2015, Amazon reported net earnings of $92.0 million in the three months ended June 30, 2015. Q2 2015 net sales were $23.2 billion, a 19.9% increase from $19.3 billion in the second quarter of the prior fiscal year. Amazon had a $254.8 billion market capitalization as of October 14, 2015.
The Market. The 611 Cowper Property is located in the city of Palo Alto, California which lies within the Silicon Valley region. According to the appraisal, Silicon Valley has a population of approximately 2.6 million. Silicon Valley’s economy continues to benefit from its technology sector and the region’s employment growth ranked first in the nation in March 2015. The commercial real estate market in Greater Silicon Valley has also benefitted from hiring in the technology sector which has fueled demand for office and high tech space. The average household income in Silicon Valley is $122,160 which is 71.3% above the U.S. average and 45.0% of households have a bachelor or advanced degree compared to just 28.4% for the nation.
B-77 |
611 Cowper Street Palo Alto, CA 94301 | Collateral Asset Summary – Loan No. 9 611 Cowper | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $32,914,514 55.8% 1.60x 10.1% |
Palo Alto is best known as the home of Stanford University but is also recognized as a center for research and development activities and as an international hub of technology. As of 2013, Palo Alto had a population of 66,673 and very little land available for development. Population growth in the city is driven primarily by dense development replacing low density apartment and homes, mostly in the form of small condominium complexes. Similarly, new office development is primarily in the form of redevelopment of existing structures. Per a Q1 2015 market report, the downtown Palo Alto submarket had only one Class A office building and 109 Class B office properties totaling approximately 2.0 million sq. ft. The submarket featured a 2.9% vacancy rate with an average asking rent of $89.92 PSF.
The appraiser determined six recent comparable office leases with base rents ranging from $89.40 to $114.00 PSF, with an average of $97.20 PSF. The comparable leases ranged in size from 3,231 sq. ft. to 15,599 sq. ft. Based on the recent leases and the Palo Alto market fundamentals, the appraiser determined a market rent of $108.00 PSF, in line with the A9 base rent. Comparable office leases are detailed below.
Competitive Set(1) | ||||||||
Property Name | City, State | Class | Year Built | Total Office NRA (Sq. Ft.) | Lease SF | Rent PSF | Term (yrs.) | Lease Date |
611 Cowper Property | Palo Alto, CA | A | 2015 | 30,000(2) | 30,000 | $108.00(2) | 10.0(2) | Various(2) |
Primary Competitive Set | ||||||||
Palo Alto Office Center | Palo Alto, CA | A | 1986 | 31,317 | 10,289 | $114.00 | Neg. | Listing |
537 Hamilton Avenue | Palo Alto, CA | A | 2014 | 17,150 | 9,395 | $96.00 | 12.0 | December 2013 |
Total / Wtd. Avg.(3) | 48,467 | 9,973 | $107.63 | 12.0 | ||||
Secondary Competitive Set | ||||||||
Bank of America Building | Palo Alto, CA | B | 1975 | 50,000 | 3,231 | $97.44 | 6.3 | December 2014 |
Wells Fargo Building | Palo Alto, CA | B | 1984 | 97,000 | 9,320 | $91.20 | 5.0 | October 2014 |
The Hamilton Lane Building | Palo Alto, CA | B | 1985 | 12,897 | 12,897 | $95.40 | 8.0 | October 2014 |
431 Waverly Street | Palo Alto, CA | B | 1955 | 15,599 | 15,599 | $89.40 | 10.0 | September 2014 |
Total / Wtd. Avg.(3) | 175,496 | 8,406 | $93.13 | 6.0 |
(1) | Source: Appraisal. |
(2) | Based on the rent roll dated November 6, 2015. |
(3) | Total / Wtd. Avg. does not include the 611 Cowper Property. |
Cash Flow Analysis.
Cash Flow Analysis | ||
U/W | U/W PSF | |
Base Rent(1) | $3,472,140 | $115.74 |
Value of Vacant Space | 0 | 0.00 |
Gross Potential Rent | $3,472,140 | $115.74 |
Total Recoveries | 969,194 | 32.31 |
Less: Vacancy(2) | (133,240) | (4.44) |
Effective Gross Income | $4,308,094 | $143.60 |
Total Operating Expenses | 991,468 | 33.05 |
Net Operating Income | $3,316,626 | $110.55 |
TI/LC | 148,230 | 4.94 |
Capital Expenditures | 6,000 | 0.20 |
Net Cash Flow | $3,162,396 | $105.41 |
(1) | U/W Base Rent includes $232,140 in contractual step rent through November 2016 and NPV credit step rent through July 2018. |
(2) | U/W Vacancy represents 3.0% of total gross income. The 611 Cowper Property is 100.0% leased as of November 6, 2015. |
Property Management. The 611 Cowper Property is managed by Premier Property Management, Inc.
Lockbox / Cash Management. The 611 Cowper Loan is structured with a hard lockbox and springing cash management. All rents and other payments are required to be deposited directly into a clearing account controlled by lender. Unless a Trigger Period (as defined below) is ongoing, all amounts on deposit in the clearing account are required to be swept daily into the borrower’s account. During a Trigger Period, all amounts on deposit in the clearing account are required to be swept daily into the deposit account controlled by the lender and applied to pay monthly amounts due under the loan documents.
B-78 |
611 Cowper Street Palo Alto, CA 94301 | Collateral Asset Summary – Loan No. 9 611 Cowper | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $32,914,514 55.8% 1.60x 10.1% |
A “Trigger Period” will commence (i) upon an event of default, (ii) if the debt service coverage ratio falls below 1.20x on the last day of any calendar quarter, or (iii) during a Lease Sweep Period (as defined below). A Trigger Period will cease to exist upon (a) with respect to clause (i) above, such event of default has been cured, (b) with respect to clause (ii), the debt service coverage ratio is at least 1.25x for two consecutive quarters, and (c) with respect to clause (iii), such Lease Sweep Period has ended.
A “Lease Sweep Period” will commence on the first monthly payment date following (i) the earlier of (a) 12 months prior to the earliest expiration of a Lease Sweep Lease (as defined below) or (b) the date by which any tenant under a Lease Sweep Lease is required to give notice of its exercise of a renewal option under its Lease Sweep Lease, (ii) the receipt by the borrower or manager of notice from any tenant under a Lease Sweep Lease exercising its right to terminate its Lease Sweep Lease (if applicable), (iii) the date that a Lease Sweep Lease is surrendered, cancelled or terminated prior to its then current expiration date, (iv) the date that any tenant under a Lease Sweep Lease “goes dark” or (v) a tenant under a Lease Sweep Lease defaulting under its lease or becoming subject to bankruptcy proceedings. A Lease Sweep Period will be cured if (a) with respect to clause (i), (ii), (iii) and (iv), (x) at least 20,000 sq. ft. of the Lease Sweep Lease space is leased pursuant to one or more qualified leases, as defined in the loan documents and the replacement tenant(s) are in occupancy and paying full un-abated rent (the “Occupancy Conditions”), (y) the funds in the lease sweep account are able to cover all anticipated leasing expenses, free rent periods, and rent abatement periods and (z) the debt service coverage ratio is at least 1.35x; (b) with respect to clause (i), the tenant has renewed or extended its lease pursuant to its extension option or otherwise on terms acceptable to lender with respect to its space and the funds in the sweep account are equal to the leasing expenses, free rent periods and rent abatement periods in connection with such renewal or extension, (c) with respect to clause (ii), the termination option is not validly exercised by the tenant under the Lease Sweep Lease or the exercise thereof is revoked, (d) with respect to clause (iv), the date the tenant under the Lease Sweep Lease has recommenced its business or has revoked its notice of intent to discontinue its business, (e) with respect to clause (v), the date upon which the default has been cured and the applicable insolvency proceeding has been terminated and (f) with respect to clause (i), (ii), (iii), (iv) and (v) above, the date upon which the funds in the lease sweep account are equal to the Lease Sweep Deposit Amount (defined below).
A “Lease Sweep Lease” means (i) the A9 lease or (ii) any replacement lease that covers 20,000 or more rentable sq. ft. of the 611 Cowper Property.
The “Lease Sweep Deposit Amount” means the product of (i) $40 and (ii) the total rentable sq. ft. of the Lease Sweep Lease that has not been relet.
Initial Reserves. At loan closing, the borrower deposited (i) $37,308 into a tax reserve account, (ii) $930 into an insurance reserve account, (iii) $12,000 into a replacement reserve account, (iv) $3,043,827 into a TI/LC reserve account for outstanding approved leasing expenses and (v) $1,620,000 into a free rent reserve account.
Ongoing Reserves. On a monthly basis, the borrower will be required to deposit (i) 1/12 of estimated insurance premiums into the insurance reserve, (ii) 1/12 of estimated taxes into the tax reserve, (iii) $1.50 per rentable square foot into the TI/LC reserve and (iv) an amount equal to the monthly amount due for common charges under the condominium documents for the succeeding month.
Notwithstanding the foregoing, the borrower is not obligated to make ongoing deposits for taxes, insurance, TI/LC or common charges if, among other things, (i) all of the 611 Cowper Property is occupied by A9 under the A9 lease, (ii) no default, event of default or Trigger Period is continuing, (iii) the A9 lease is in full force and effect and (iv) other than with respect to the TI/LC reserve, A9 is paying the amounts for which the reserve is established under the A9 lease.
On each monthly payment date during a Lease Sweep Period, all available cash is required to be transferred into the lease sweep account. In addition, if the replacement reserve falls below $12,000, borrower will be required to make monthly deposits of $500 into the replacement reserve account.
Current Mezzanine or Subordinate Indebtedness. None.
Future Mezzanine or Subordinate Indebtedness Permitted. None.
B-79 |
611 Cowper Street Palo Alto, CA 94301 | Collateral Asset Summary – Loan No. 9 611 Cowper | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $32,914,514 55.8% 1.60x 10.1% |
B-80 |
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B-81 |
1250 Baltimore Pike Springfield Township, PA 19064 | Collateral Asset Summary – Loan No. 10 Springfield Mall | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $32,460,817 58.0% 1.76x 11.1% |
B-82 |
1250 Baltimore Pike Springfield Township, PA 19064 | Collateral Asset Summary – Loan No. 10 Springfield Mall | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $32,460,817 58.0% 1.76x 11.1% |
Mortgage Loan Information | |
Loan Seller: | CCRE |
Loan Purpose: | Refinance |
Sponsors: | PREIT Associates, L.P.; Simon Property Group, L.P. |
Borrowers: | PR Springfield/Delco Limited Partnership; KS Springfield Limited Partnership |
Original Balance(1): | $32,500,000 |
Cut-off Date Balance(1): | $32,460,817 |
% by Initial UPB: | 3.4% |
Interest Rate: | 4.4485% |
Payment Date: | 6thof each month |
First Payment Date: | November 6, 2015 |
Maturity Date: | October 6, 2025 |
Amortization: | 360 months |
Additional Debt(1): | $32,460,817Pari Passu Debt |
Call Protection(2): | L(25), D(91), O(4) |
Lockbox / Cash Management: | Hard / Springing |
Reserves(3) | ||
Initial | Monthly | |
Taxes: | $566,919 | $174,917 |
Insurance: | $0 | Springing |
Replacement: | $0 | Springing |
TI/LC: | $0 | Springing |
Financial Information(4) | |
Cut-off Date Balance / Sq. Ft.: | $291 |
Balloon Balance / Sq. Ft.: | $235 |
Cut-off Date LTV: | 58.0% |
Balloon LTV: | 46.8% |
Underwritten NOI DSCR: | 1.83x |
Underwritten NCF DSCR: | 1.76x |
Underwritten NOI Debt Yield: | 11.1% |
Underwritten NCF Debt Yield: | 10.7% |
Underwritten NOI Debt Yield at Balloon: | 13.7% |
Underwritten NCF Debt Yield at Balloon: | 13.2% |
Property Information | |
Single Asset / Portfolio: | Single Asset |
Property Type: | Regional Mall |
Collateral: | Fee Simple |
Location: | Springfield Township, PA |
Year Built / Renovated: | 1974 / 1997 |
Total Sq. Ft.: | 611,079 |
Total Collateral Sq. Ft.: | 223,180 |
Property Management: | PREIT Services LLC |
Underwritten NOI: | $7,200,359 |
Underwritten NCF: | $6,932,543 |
Appraised Value: | $112,000,000 |
Appraisal Date: | August 15, 2015 |
Historical NOI | |
Most Recent NOI: | $7,582,323 (T-12 July 31, 2015) |
2014 NOI: | $7,463,165 (December 31, 2014) |
2013 NOI: | $7,183,368 (December 31, 2013) |
2012 NOI: | $6,656,154 (December 31, 2012) |
Historical Occupancy | |
Most Recent Occupancy: | 95.4% (July 31, 2015) |
2014 Occupancy | 95.2% (December 31, 2014) |
2013 Occupancy: | 97.5% (December 31, 2013) |
2012 Occupancy: | 94.7% (December 31, 2012) |
(1) | The Springfield Mall Loan Combination is evidenced by two pari passu notes in the aggregate original principal amount of $65.0 million. The controlling Note A-1, with an original principal balance of $32.5 million, will be included in the COMM 2015-LC23 mortgage trust. The non-controlling Note A-2, with an original balance of $32.5 million, will not be included in the trust and is expected to be held by CCRE or an affiliate and contributed to a future securitization. |
(2) | The lockout period for defeasance will be at least 25 payment dates beginning with and including the first payment date of November 6, 2015. Defeasance of the full $65.0 million Springfield Mall 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) November 6, 2019. The assumed lockout period of 25 payments is based on the expected COMM 2015-LC23 securitization closing date in November 2015. The actual lockout period may be longer. |
(3) | See “Initial Reserves” and “Ongoing Reserves” herein. |
(4) | DSCR, LTV, Debt Yield and Balance/ Sq. Ft. calculations are based on the aggregate Springfield Mall Loan Combination. |
B-83 |
1250 Baltimore Pike Springfield Township, PA 19064 | Collateral Asset Summary – Loan No. 10 Springfield Mall | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $32,460,817 58.0% 1.76x 11.1% |
Tenant Summary(1) | |||||||||
Tenant | Ratings (Fitch/Moody’s/S&P)(2) | Total Sq. Ft. | % of Total Collateral Sq. Ft. | Lease Expiration | Annual U/W Base Rent PSF(3) | Total Sales (000s)(4) | Sales PSF(4) | Occupancy | |
Non-Collateral Anchor Tenants | |||||||||
Target | A-/A2/A | 195,899 | NAP | NAP | NAP | $75,000 | $383 | NAP | |
Macy’s | BBB+/Baa2/BBB+ | 192,000 | NAP | NAP | NAP | $39,000 | $203 | NAP | |
Subtotal | 387,899 | ||||||||
Major Tenants (≥ 7,000 sq. ft.) | |||||||||
Ulta | NR/NR/NR | 10,287 | 4.6% | 10/31/2022 | $24.70 | $6,165 | $599 | 6.6% | |
American Eagle Outfitters | NR/NR/NR | 8,284 | 3.7% | 8/31/2024 | $26.54 | NAP | NAP | NAP | |
The Gap/Gap Kids | BBB-/Baa2/BBB- | 8,035 | 3.6% | 1/31/2019 | $26.26 | $1,986 | $247 | 10.6% | |
Express | NR/NR/NR | 7,530 | 3.4% | 1/31/2019 | $33.75 | $2,689 | $357 | 18.3% | |
Victoria’s Secret | BB+/Ba1/BB+ | 7,000 | 3.1% | 1/31/2023 | $35.00 | $5,910 | $844 | 8.8% | |
Charlotte Russe(5) | NR/NR/NR | 7,000 | 3.1% | MTM | $29.00 | $2,709 | $387 | 16.8% | |
Subtotal | 48,136 | 21.6% | $19,458 | $488 | 10.7% | ||||
In-line Tenants (<7,000 sq. ft.)(6) | 164,692 | 73.8% | $32.00 | $52,059 | $393 | 13.8% | |||
Total Occupied Collateral | 212,828 | 95.4% | |||||||
Vacant | 10,352 | 4.6% | |||||||
Total Collateral | 223,180 | 100.0% | |||||||
(1) | Based on rent roll as of July 31, 2015. |
(2) | Certain ratings may be those of the parent company whether or not the parent company guarantees the lease. |
(3) | Annual U/W Base Rent PSF includes rent steps through September 2016 and excludes temporary tenant income. |
(4) | Total Sales (000s) and Sales PSF were provided by the borrower as of June 30, 2015 and only include tenants which reported sales for a minimum of 12 months (81.0% of occupied NRA). Total Sales (000s) and Sales PSF for Non-Collateral Anchor Tenants were estimates provided by the borrower as of December 31, 2014. Occupancy Cost (% of Sales) is based on Annual U/W Base Rent PSF and U/W expense recoveries. |
(5) | According to the borrower, as of October 21, 2015, Charlotte Russe is negotiating a seven-year lease renewal. |
(6) | In-line Tenants include food court, kiosk, and temporary tenants. |
B-84 |
1250 Baltimore Pike Springfield Township, PA 19064 | Collateral Asset Summary – Loan No. 10 Springfield Mall | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $32,460,817 58.0% 1.76x 11.1% |
Lease Rollover Schedule(1)(2) | ||||||||
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 Base Rent Rolling | Cumulative % of U/W Base Rent |
Temporary Tenants | 5 | 20,380 | 9.1% | 20,380 | 9.1% | NAP | NAP | NAP |
2015 | 8 | 19,935 | 8.9% | 40,315 | 16.6% | $35.85 | 10.7% | 10.7% |
2016 | 11 | 30,054 | 13.5% | 70,369 | 31.5% | $33.86 | 15.3% | 26.0% |
2017 | 10 | 15,455 | 6.9% | 85,824 | 38.5% | $43.79 | 10.2% | 36.2% |
2018 | 7 | 20,571 | 9.2% | 106,395 | 47.7% | $33.22 | 10.3% | 46.4% |
2019 | 6 | 21,479 | 9.6% | 127,874 | 57.3% | $35.99 | 11.6% | 58.1% |
2020 | 3 | 4,138 | 1.9% | 132,012 | 59.2% | $45.08 | 2.8% | 60.9% |
2021 | 3 | 11,558 | 5.2% | 143,570 | 64.3% | $31.43 | 5.5% | 66.3% |
2022 | 4 | 18,193 | 8.2% | 161,763 | 72.5% | $33.88 | 9.3% | 75.6% |
2023 | 7 | 27,056 | 12.1% | 188,819 | 84.6% | $37.05 | 15.1% | 90.6% |
2024 | 2 | 13,302 | 6.0% | 202,121 | 90.6% | $26.25 | 5.2% | 95.9% |
2025 | 2 | 5,243 | 2.3% | 207,364 | 92.9% | $31.16 | 2.5% | 98.3% |
Thereafter | 2 | 5,464 | 2.4% | 212,828 | 95.4% | $20.35 | 1.7% | 100.0% |
Vacant | NAP | 10,352 | 4.6% | 223,180 | 100.0% | NAP | NAP | |
Total / Wtd. Avg. | 69 | 223,180 | 100.0% | $34.60 | 100.0% |
(1) | Based on rent roll as of July 31, 2015. |
(2) | Certain tenants have lease termination options related to co-tenancy provisions and sales thresholds 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. |
The Loan.The Springfield Mall loan (the “Springfield Mall Loan”) is a fixed rate loan secured by the borrower’s fee simple interest in a portion of a two-story, enclosed regional mall located in Springfield Township, Pennsylvania. Springfield Mall is a 611,079 sq. ft. mall anchored by Macy’s and Target (both non-owned and not part of the collateral). The collateral (the “Springfield Mall Property”) for the Springfield Mall Loan consists of 223,180 sq. ft. and includes all major and in-line tenants.
The Springfield Mall Loan has an Original Balance of $32.5 million and represents the controlling Note A-1 of a $65.0 million whole loan (“the Springfield Mall Loan Combination”). The Springfield Mall Loan Combination is evidenced by two pari passu notes, the controlling Note A-1, with an original principal balance of $32.5 million, which will be included in the COMM 2015-LC23 Mortgage Trust, and the non-controlling Note A-2, with an original principal balance of $32.5 million. The non-controlling Note A-2 will not be included in the trust and is expected to be held by CCRE or an affiliate and transferred to a future securitization.
Loan Combination Summary | |||||
Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece | ||
Note A-1 | $32,500,000 | $32,460,817 | COMM 2015-LC23 | Yes | |
Note A-2 | $32,500,000 | $32,460,817 | CCRE | No | |
Total | $65,000,000 | $64,921,633 |
The Springfield Mall Loan has a 10-year term and amortizes on a 30-year schedule. The Springfield Mall Loan accrues interest at a fixed rate equal to 4.4485% and has a cut-off date balance of approximately $32.46 million. The Springfield Mall Loan proceeds were used to refinance existing debt of approximately $61.8 million, fund upfront reserves of approximately $0.6 million, pay closing costs of approximately $0.5 million and return approximately $2.1 million of equity to the sponsors. Based on the appraised value of $112.0 million as of August 15, 2015, the cut-off date LTV ratio is 58.0% with remaining implied equity of approximately $47.0 million. The most recent prior financing of the Springfield Mall Property was not included in a securitization.
Sources and Uses | ||||||
Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |
Mortgage Loan | $65,000,000 | 100.0% | Loan Payoff | $61,815,845 | 95.1% | |
Return of Equity | $2,084,361 | 3.2% | ||||
Reserves | $566,919 | 0.9% | ||||
Closing Costs | $532,875 | 0.8% | ||||
Total Sources | $65,000,000 | 100.0% | Total Uses | $65,000,000 | 100.0% |
B-85 |
1250 Baltimore Pike Springfield Township, PA 19064 | Collateral Asset Summary – Loan No. 10 Springfield Mall | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $32,460,817 58.0% 1.76x 11.1% |
The Borrower / Sponsor. The borrowers are PR Springfield/Delco Limited Partnership and KS Springfield Limited Partnership as tenants-in-common. PR Springfield/Delco Limited Partnership, is a single purpose Pennsylvania limited partnership structured to be bankruptcy remote with two independent directors in its organizational structure. KS Springfield Limited Partnership, is a single purpose Delaware limited liability company structured to be bankruptcy remote with two independent directors in its organizational structure. The sponsors of the borrowers and the non-recourse carveout guarantors are Simon Property Group, L.P. and PREIT Associates, L.P.
Simon Property Group, L.P. (“Simon”) is an S&P 500 company and the largest publicly traded retail real estate company in North America with a total market capitalization of approximately $64.76 billion as of October 2015. Simon currently owns or has an interest in more than 325 retail real estate properties, totaling approximately 241 million sq. ft., in North America and Asia. Simon also owns a 29% interest in Klépierre, a publicly-traded Paris-based real estate investment company, which owns shopping centers in 13 European countries. Headquartered in Indianapolis, Simon employs more than 5,000 people worldwide.
PREIT Associates, L.P. (“PREIT”) is an equity real estate investment trust that owns and operates over 30 malls and over 27 million sq. ft. of space. PREIT has a primary investment focus on retail shopping malls located in the eastern half of the United States, primarily in the Mid-Atlantic region. The company engages in the ownership, management, leasing, acquisition, redevelopment and development of enclosed malls. Its properties and malls include national or regional department stores, large format retailers or other anchors and a diverse mix of national, regional and local in-line stores.
The Property.Springfield Mall is a two-story, enclosed regional mall containing 611,079 sq. ft. of total leasable area, 223,180 sq. ft. of which is collateral for the Springfield Mall Loan. The Springfield Mall Property is located on Baltimore Pike in Springfield Township, Pennsylvania, approximately 12 miles outside Philadelphia. The Springfield Mall Property was constructed in 1974 and acquired by the sponsors in 2005 for $103.5 million. Since 2012, the Springfield Mall Property has undergone more than $3.2 million in capital expenditures and tenant improvement costs.
The Springfield Mall is anchored by Macy’s and Target, both of which are non-owned and not part of the collateral. Macy’s has been operating at this mall since 1986, when original anchor Bamberger’s was rebranded as Macy’s. Target opened in fall 2009 after purchasing a parcel formerly occupied by a Strawbridge’s, which closed due to a corporate merger with Macy’s. The Springfield Mall Property (collateral) is 95.4% occupied as of July 31, 2015 by 69 in-line tenants, none of which account for more than 4.6% of collateral. National in-line tenants include Aeropostale, American Eagle Outfitters, Champs Sports, Foot Locker, The Gap/Gap Kids, GNC, Ulta, Victoria’s Secret and Zales Jewelers.
In the trailing twelve month period ending June 30, 2015, in-line tenants in occupancy that reported sales for a minimum of 12 months reported annual sales of $403 PSF with an occupancy cost of 13.5%. Since 2011, in-line tenant sales have grown steadily with sales averaging $391 PSF over that time period.
In-Line Historical Sales PSF(1) | |||||
2011 | 2012 | 2013 | 2014 | T-12 6/30/2015 | |
Sales PSF | $382 | $380 | $392 | $400 | $403 |
Occupancy Cost | 14.3% | 14.5% | 13.9% | 13.6% | 13.5% |
(1) | As provided by borrower. In-line tenant sales include all tenants occupying less than 10,000 sq. ft., which have been in occupancy and reported sales for a minimum of 12 months. |
Environmental Matters. The Phase I environmental report dated September 9, 2015 recommended no further action at the Springfield Mall Property.
The Market. The Springfield Mall Property is located approximately 12 miles outside of Philadelphia in Springfield Township, Pennsylvania. The Mall is situated just off of Interstate 476 along Baltimore Pike, which is the main retail corridor that runs through Springfield, Pennsylvania. The subject property is located at the intersection of Baltimore Pike and Sproul Road. On a daily basis, this intersection experiences a high volume of cars, with approximately 32,000 vehicles on Baltimore Pike and approximately 15,000 vehicles on Sproul Road. In the surrounding five mile radius of the Springfield Mall Property, the average household income is approximately $82,749 and, as of 2014, the population is approximately 335,677 people.
Located on the main retail corridor of Baltimore Pike, the Springfield Mall Property is surrounded by other major retail tenants that include Pier 1 Imports, Best Buy, Kohl’s, Home Depot, Walmart, AMC Theaters, Marshalls, Burlington Coat Factory and Petco.
The appraiser concluded that four super regional / lifestyle centers are considered primary and secondary competition in nature to the Springfield Mall Property. The only primary competitor, The Court & Plaza at King of Prussia, is a super-regional mall and the largest shopping mall on the East Coast of the United States. The Court & Plaza at King of Prussia is owned and managed by Simon Property Group, a sponsor of the Springfield Mall Loan. The Macy’s located at secondary competitor Suburban Square is scheduled to close in 2016 making the next nearest Macy’s more than 12 miles away from the Springfield Mall Property.
B-86 |
1250 Baltimore Pike Springfield Township, PA 19064 | Collateral Asset Summary – Loan No. 10 Springfield Mall | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $32,460,817 58.0% 1.76x 11.1% |
Springfield Mall Competitive Set(1) | |||||
Name | Springfield Mall | Suburban Square | Concord Mall | The Court & Plaza at King of Prussia | Exton Square Mall |
Competition | NAP | Secondary | Secondary | Primary | Secondary |
Distance from Subject | NAP | 7.4 miles | 12.1 miles | 12.2 miles | 16.5 miles |
City, State | Springfield, PA | Ardmore, PA | Wilmington, DE | King of Prussia, PA | Exton, PA |
Property Type | Regional Mall | Lifestyle Center | Super Regional Mall | Super Regional Mall | Super Regional Center |
Year Built / Renovated | 1974 /1997 | 1928 /1984 | 1969 /1984 | 1962 /2004 | 1973 / 2000 |
Total Occupancy | 95.4%(2) | 92% | 97% | 98% | 96% |
Anchor Size (Sq. Ft.) | 387,899(3) | 108,621 | 358,772 | 1,400,000 | 625,000 |
Total Size (Sq. Ft.) | 611,079(3) | 354,150 | 863,251 | 2,400,000 | 1,087,728 |
Anchor Tenants | Target, Macy’s | Macy’s (closing in 2016) | Boscov’s, Macy’s, Macy’s Home, Sears | Bloomingdale’s, Dick’s Sporting Goods, JC Penney, Lord & Taylor, Macy’s, Neiman Marcus, Nordstrom | Boscov’s, Macy’s, Sears, Whole Foods (2016) |
(1) | Source: Appraisal |
(2) | Total Occupancy for Springfield Mall is based on only the collateral square footage of 223,180 as of July 31, 2015 and includes temporary tenants. |
(3) | Anchor Size (Sq. Ft.) and Total Size (Sq. Ft.) for the Springfield Mall are based on the entire mall square footage of 611,079. |
Cash Flow Analysis.
Cash Flow Analysis | ||||||
2012 | 2013 | 2014 | T-12 7/31/2015 | U/W | U/W PSF | |
Base Rent(1) | $6,145,257 | $6,649,917 | $6,816,054 | $6,796,871 | $6,657,928 | $29.83 |
Value of Vacant Space | 0 | 0 | 0 | 0 | 356,481 | 1.60 |
Gross Potential Rent | $6,145,257 | $6,649,917 | $6,816,054 | $6,796,871 | $7,014,409 | $31.43 |
Total Recoveries | 5,031,396 | 5,067,222 | 5,307,136 | 5,348,856 | 5,437,593 | 24.36 |
Total % Rents | 241,635 | 244,033 | 312,518 | 308,613 | 308,613 | 1.38 |
Total Other Income | 784,949 | 797,343 | 726,938 | 699,460 | 699,460 | 3.13 |
Less: Vacancy & Credit Loss(2) | 0 | 0 | 0 | 0 | (638,031) | (2.86) |
Effective Gross Income | $12,203,237 | $12,758,515 | $13,162,646 | $13,153,800 | $12,822,044 | $57.45 |
Total Operating Expenses | 5,547,083 | 5,575,147 | 5,699,481 | 5,571,477 | 5,621,685 | 25.19 |
Net Operating Income | $6,656,154 | $7,183,368 | $7,463,165 | $7,582,323 | $7,200,359 | $32.26 |
TI/LC | 0 | 0 | 0 | 0 | 223,180 | 1.00 |
Capital Expenditures | 0 | 0 | 0 | 0 | 44,636 | 0.20 |
Net Cash Flow | $6,656,154 | $7,183,368 | $7,463,165 | $7,582,323 | $6,932,543 | $31.06 |
(1) | U/W Base Rent includes $90,726 in contractual rent steps through September 2016. |
(2) | U/W Vacancy & Credit Loss is based on an economic vacancy of 5.0% of Gross Potential Rent, Total Recoveries and Total % Rents. Per rent roll dated July 31 2015, in-place physical vacancy is 95.4%. |
Property Management. The Springfield Mall Property is managed by PREIT Services LLC, which is an affiliate of one of the sponsors, PREIT Associates, L.P.
Lockbox / Cash Management. The Springfield Mall Loan is structured with a hard lockbox and springing cash management. In place cash management and a full excess cash flow sweep will occur upon (i) an event of default or (ii) the failure by the borrower after the end of two consecutive calendar quarters to maintain a DSCR of 1.25x until the DSCR is at least equal to 1.35x for two consecutive calendar quarters.
Initial Reserves. At loan closing, the borrower deposited $566,919 into a tax reserve account.
Ongoing Reserves. On a monthly basis, the borrower is required to deposit reserves of 1/12 of the estimated annual real estate taxes, which currently equates to $174,917. In addition, if the DSCR is less than 1.25x for two consecutive calendar quarters, the borrower is required to deposit reserves of (i) $3,720 into a replacement reserve account, subject to a cap of $89,272 and (ii) $18,598 into a rollover reserve account, subject to a cap of $446,360. Additionally, the borrower is required to deposit 1/12 of the estimated annual insurance premiums into an insurance reserve account if an acceptable blanket insurance policy is no longer in place.
B-87 |
1250 Baltimore Pike Springfield Township, PA 19064 | Collateral Asset Summary – Loan No. 10 Springfield Mall | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $32,460,817 58.0% 1.76x 11.1% |
Current Mezzanine or Subordinate Indebtedness. None.
Future Mezzanine or Subordinate Indebtedness Permitted. None.
B-88 |
1250 Baltimore Pike Springfield Township, PA 19064 | Collateral Asset Summary – Loan No. 10 Springfield Mall | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $32,460,817 58.0% 1.76x 11.1% |
B-89 |
30000-30192 Town Center Drive Laguna Niguel, CA 92677 | Collateral Asset Summary – Loan No. 11 Laguna Niguel Town Center | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $26,433,612 61.5% 1.38x 8.8% |
Mortgage Loan Information | |
Loan Seller: | LCF |
Loan Purpose: | Refinance |
Sponsors: | Robert F. Buie; Jeffry L. Stoddard; Robert F. Buie, as Trustee of the Robert F. Buie and Pamela I. Buie Family Trust Under Trust Agreement; Jeffry L. Stoddard, as Trustee of the Jeff and Kris Stoddard Living Trust |
Borrower: | Laguna Niguel Town Center LLC |
Original Balance: | $26,500,000 |
Cut-off Date Balance: | $26,433,612 |
% by Initial UPB: | 2.8% |
Interest Rate: | 4.5170% |
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: | L(23), YM1(93), O(4) |
Lockbox / Cash Management: | None / None |
Reserves | ||
Initial | Monthly | |
Taxes: | $208,966 | $18,997 |
Insurance: | $5,172 | $1,724 |
Replacement: | $106,000 | $1,636 |
TI/LC: | $0 | $7,601 |
Major Tenant Reserve(1): | NAP | Springing |
Financial Information | ||
Cut-off Date Balance / Sq. Ft.: | $269 | |
Balloon Balance / Sq. Ft.: | $218 | |
Cut-off Date LTV: | 61.5% | |
Balloon LTV: | 49.9% | |
Underwritten NOI DSCR: | 1.43x | |
Underwritten NCF DSCR: | 1.38x | |
Underwritten NOI Debt Yield: | 8.8% | |
Underwritten NCF Debt Yield: | 8.4% |
Property Information | |
Single Asset / Portfolio: | Single Asset |
Property Type: | Unanchored Retail |
Collateral: | Fee Simple |
Location: | Laguna Niguel, CA |
Year Built / Renovated: | 1980 / 2004 |
Total Sq. Ft.: | 98,157 |
Property Management: | Pacific West Asset Management Corporation |
Underwritten NOI: | $2,315,569 |
Underwritten NCF: | $2,221,482 |
Appraised Value: | $43,000,000 |
Appraisal Date: | June 3, 2015 |
Historical NOI | |
Most Recent NOI: | $2,500,441 (T-12 July 31, 2015) |
2014 NOI: | $2,473,518 (December 31, 2014) |
2013 NOI: | $2,313,348 (December 31, 2013) |
2012 NOI: | $2,278,474 (December 31, 2012) |
Historical Occupancy | |
Most Recent Occupancy: | 91.4% (August 18, 2015) |
2014 Occupancy: | 95.4% (December 31, 2014) |
2013 Occupancy: | 93.0% (December 31, 2013) |
2012 Occupancy: | 95.4% (December 31, 2012) |
(1) | Upon the earliest to occur of (i) Denault’s Hardware ceases operations at the property, (ii) Denault’s Hardware gives notice of its intent to not extend the lease, (iii) Denault’s Hardware files a petition as a debtor in a bankruptcy proceeding, or (iv) unless borrower has delivered to lender an officer’s certificate certifying to lender that Denault’s Hardware has extended the Denault’s Hardware lease in accordance with the terms thereof, on the stated date that the term of the Denault’s Hardware lease expires pursuant to the express terms of the Denault’s Hardware lease, in which case the borrower is required to post with lender $600,000 ($40.00 PSF) to be used for re-leasing the Denault’s Hardware premises. The obligation of the borrower to deposit funds is a recourse obligation of borrower and guarantor. |
TRANSACTION HIGHLIGHTS |
■ | Property.Laguna Niguel Town Center property is a 98,157 sq. ft. unanchored retail property located in Laguna Niguel, California that is 91.4% occupied as of August 18, 2015 by 32 tenants. The largest tenants at the property include Denault’s Hardware (15.3% of NRA, October 31, 2018 expiration) and Walgreens (13.1% of NRA, November 30, 2027 expiration). The property was constructed in 1980 and renovated in 2004. According to the appraisal, recent traffic counts in the vicinity of the property are 23,069 cars per day along Crown Valley Parkway, and 18,067 on Alicia Parkway. |
■ | Market.TheLaguna Niguel Town Center property is located in the South Orange County retail submarket. According to a Q1 2015 report, the submarket had a total inventory of approximately 17.9 million sq. ft. within 119 buildings. The vacancy rate in the submarket was reported at 3.7% with an average asking rental rate of $29.28 PSF. The 2015 population within a five mile radius of the property is 239,990. The 2015 median household income within a five mile radius of the property was $91,785. |
■ | Sponsorship.Robert F. Buie and Jeffry L. Stoddard are principals of the Buie Stoddard Group (“Buie Stoddard”), a real estate company that specializes in the acquisition, planning, funding, development, and management of retail, office, residential, and industrial projects. Buie Stoddard currently owns 30 commercial and retail properties comprising more than two million sq. ft. throughout San Diego County, Orange County, and Boise, Idaho. Additionally, Buie Stoddard owns more than four million sq. ft. of industrial space and has acquired, master-planned, and developed over 10,000 residential units in San Diego, Orange and Riverside counties. |
B-90 |
3001-3171 Meridian Avenue San Jose, CA 95124 | Collateral Asset Summary – Loan No. 12 Hacienda Gardens | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $24,000,000 62.5% 1.82x 8.6% |
Mortgage Loan Information | |
Loan Seller: | CCRE |
Loan Purpose: | Refinance |
Sponsor: | Michael T. LaBarbera; Robert B. Facchino, II |
Borrower: | Facchino/ LaBarbera Hacienda Gardens DE LLC |
Original Balance: | $24,000,000 |
Cut-off Date Balance: | $24,000,000 |
% by Initial UPB: | 2.5% |
Interest Rate: | 4.4905% |
Payment Date: | 6th of each month |
First Payment Date: | December 6, 2015 |
Maturity Date: | November 6, 2025 |
Amortization: | Interest Only |
Additional Debt: | None |
Call Protection: | L(24), YM1(92), O(4) |
Lockbox / Cash Management(1): | Springing Hard / Springing |
Reserves | ||
Initial | Monthly | |
Taxes: | $148,000 | $37,000 |
Insurance: | $30,529 | $2,775 |
TI/LC(2): | $123,195 | NAP |
Rent Concession(3): | $221,000 | NAP |
Earnout(4): | $1,870,000 | NAP |
Financial Information | ||
Cut-off Date Balance / Sq. Ft.: | $230 | |
Balloon Balance / Sq. Ft.: | $230 | |
Cut-off Date LTV: | 62.5% | |
Balloon LTV: | 62.5% | |
Underwritten NOI DSCR: | 1.89x | |
Underwritten NCF DSCR: | 1.82x | |
Underwritten NOI Debt Yield: | 8.6% | |
Underwritten NCF Debt Yield: | 8.3% |
Property Information | |
Single Asset / Portfolio: | Single Asset |
Property Type: | Anchored Retail |
Collateral: | Fee Simple |
Location: | San Jose, CA |
Year Built / Renovated: | 1959, 2007, 2010, 2013, 2015 / NAP |
Total Sq. Ft.: | 104,557 |
Property Management: | Terracommercial Real Estate Corporation |
Underwritten NOI(5): | $2,066,134 |
Underwritten NCF: | $1,991,766 |
Appraised Value: | $38,400,000 |
Appraisal Date: | July 17, 2015 |
Historical NOI(6) | |
Most Recent NOI(5): | $886,570 (T-12 June 30, 2015) |
2014 NOI: | $625,757 (December 31, 2014) |
2013 NOI: | $558,276 (December 31, 2013) |
2012 NOI: | $451,315 (December 31, 2012) |
Historical Occupancy(6) | |
Most Recent Occupancy: | 90.1% (September 28, 2015) |
2014 Occupancy: | 97.0% (December 31, 2014) |
2013 Occupancy: | 90.0% (December 31, 2013) |
2012 Occupancy: | 57.0% (December 31, 2012) |
(1) | A hard lockbox, in place cash management and an excess cash flow sweep will be triggered upon (i) an event of default, (ii) any bankruptcy action of the borrower, member of the borrower, guarantor or property manager or (iii) failure by the borrower, after the end of any calendar quarter to maintain a debt service coverage ratio of at least 1.10x (and the excess cash flow sweep will cease upon the borrower maintaining a debt service coverage ratio of at least 1.15x for two consecutive quarters). |
(2) | TI/LC reserve account represents outstanding tenant improvement obligations owed to Holders Meridian Grill and Nick the Greek. |
(3) | At closing, the borrower deposited nine months of free rent in connection to two recently executed leases. |
(4) | Amounts in the Earnout reserve will be disbursed to the borrower when the property achieves a debt yield of no less than 9.0%. |
(5) | The increase from Most Recent NOI to Underwritten NOI is primarily due to three recently executed leases, which represent approximately 22.9% of underwritten gross potential rent. |
(6) | The increase in occupancy and Historical NOI is primarily due to the sponsor investing approximately $10.4 million after acquisition and Rite Aid executing a 20-year lease in 2013. |
TRANSACTION HIGHLIGHTS |
■ | Property.The Hacienda Gardens property is an anchored, neighborhood retail center located in San Jose, California. Two of the eight buildings were recently completed in September 2015 which added 13,563 sq. ft. to the existing property. Since acquiring the property in 2011, the sponsor has invested approximately $10.4 million in capital expenditures, resulting in an increase in occupancy from 57.0% in 2012 to 90.1% as of September 28, 2015. |
■ | Market & Location.The property is located in the Cambrian Park neighborhood in south San Jose. Land use within the neighborhood contains a mixture of commercial and residential development. Main access to the neighborhood is provided by State Highway 85, which provides access to downtown San Jose and State Highway 87, which connects to Interstate 280 and US Highway 101. The South Bay/San Jose retail market has experienced low vacancy rates of 3.6% in the previous quarter and 3.7% in the current quarter and average asking rents ending at $30.07 PSF per year. |
■ | Tenancy.The Hacienda Gardens property is an eight-building shopping center with a mix of local, regional, and national retailers. The five major tenants include Fitness Evolution Health Club (31,278 sq. ft.), Rite Aid (17,340 sq. ft.), Hometown Buffet, Inc. (9,600 sq. ft.), Dollar Tree Stores, Inc. (9,100 sq. ft.) and Wells Fargo Bank, NA (5,177 sq. ft.). |
■ | Property Management. The property manager, Terracommercial Real Estate Corporation, is a diversified San Jose-based commercial real estate company founded in 1992 specializing in shopping centers. The company’s holdings include 12 shopping centers as well as several industrial, residential and land holdings located primarily in the San Jose area. |
B-91 |
400-530 East Washington Boulevard Los Angeles, CA 90015 | Collateral Asset Summary – Loan No. 13 Washington Plaza | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $22,873,570 69.3% 1.24x 8.0% |
Mortgage Loan Information | |
Loan Seller: | CCRE |
Loan Purpose: | Refinance |
Sponsor: | Dennis Needleman |
Borrower: | Eagle’s Nest Property, LLC |
Original Balance: | $22,900,000 |
Cut-off Date Balance: | $22,873,570 |
% by Initial UPB: | 2.4% |
Interest Rate: | 4.6425% |
Payment Date: | 6thof each month |
First Payment Date: | November 6, 2015 |
Maturity Date: | October 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: | $133,333 | $16,667 |
Insurance: | $47,509 | $4,319 |
Replacement: | $0 | $1,725 |
TI/LC(2): | $300,000 | $4,025 |
Required Repairs: | $38,031 | NAP |
Financial Information | ||
Cut-off Date Balance / Sq. Ft.: | $166 | |
Balloon Balance / Sq. Ft.: | $135 | |
Cut-off Date LTV: | 69.3% | |
Balloon LTV: | 56.4% | |
Underwritten NOI DSCR: | 1.29x | |
Underwritten NCF DSCR: | 1.24x | |
Underwritten NOI Debt Yield: | 8.0% | |
Underwritten NCF Debt Yield: | 7.7% |
Property Information | |
Single Asset / Portfolio: | Single Asset |
Property Type: | Anchored Retail |
Collateral: | Fee Simple |
Location: | Los Angeles, CA |
Year Built / Renovated: | 1926 / 2014 |
Total Sq. Ft.: | 138,010 |
Property Management: | Eagle Eye Management, LLC |
Underwritten NOI: | $1,827,491 |
Underwritten NCF: | $1,758,485 |
Appraised Value: | $33,000,000 |
Appraisal Date: | July 27, 2015 |
Historical NOI | |
Most Recent NOI: | $1,781,959 (T-12 June 30, 2015) |
2014 NOI: | $1,752,361 (December 31, 2014) |
2013 NOI: | $1,686,724 (December 31, 2013) |
2012 NOI: | $1,717,263 (December 31, 2012) |
Historical Occupancy | |
Most Recent Occupancy: | 100.0% (August 26, 2015) |
2014 Occupancy: | 99.9% (December 31, 2014) |
2013 Occupancy: | 100.0% (December 31, 2013) |
2012 Occupancy: | 98.5% (December 31, 2012) |
(1) | A hard lockbox, in place cash management and an excess cash flow sweep will be triggered upon (i) an event of default, (ii) any bankruptcy action of the borrower, sole member of the borrower, guarantor or property manager, (iii) failure by the borrower, after the end of two calendar quarters to maintain a debt service coverage ratio of at least 1.10x (and the excess cash flow sweep will cease upon the borrower maintaining a debt service coverage ratio of at least 1.15x for two consecutive quarters). |
(2) | The TI/LC reserve account is subject to a $350,000 cap provided, (i) leased NRA is greater than or equal to 85.0%, (ii) DSCR is at least 1.20x, or, (iii) debt yield is at least 7.25%. |
TRANSACTION HIGHLIGHTS |
■ | Property.Washington Plaza is a 100.0% occupied, 138,010 sq. ft. multi-tenant neighborhood retail property, located in southeast Los Angeles, California. The property is anchored by two credit tenants, Rite Aid - Store (20,212 sq. ft., rated B/B2/B by Fitch/Moody’s/S&P) and 99 Cents Only Stores Inc. (19,782 sq. ft.). |
■ | Market & Location.The Washington Plaza property is approximately 0.9 miles southeast of the Harbor Freeway (Interstate 110) and one block south of the Santa Monica Freeway (Interstate 10). It is also in close proximity to the Washington Boulevard and the Metro Line Station. As such, although the property is situated in a predominantly residential and industrial neighborhood, it benefits from high visibility and traffic count and is easily accessible. According to market reports, as of the end of the first quarter of 2015, the Greater Los Angeles market has a total vacancy rate of 5.2%. |
■ | Historical Occupancy.Since 2011, the Washington Plaza property has maintained an average occupancy of 99.0%. As of August 26, 2015, the property is 100.0% occupied. Fifteen tenants, occupying approximately 52.0% of the net rentable area have been in occupancy for at least 15 years and nine tenants, occupying approximately 27.1% of the net rentable area having been at the property for more than 20 years. |
■ | Long Term Anchor Tenancy.The two largest anchor tenants, Rite Aid-Store and 99 Cents Only Stores Inc. have been at the property since 1985 and 1997, respectively. Rite Aid-Store recently invested $450,000 ($22.26 PSF) into its space. Renovations included new finishes, relocated fixtures, a new consultation room, restroom renovations, and new building signage. Furthermore, Rite Aid-Store began a 10-year renewal option on June 1, 2015. |
■ | Demographics. The population within a 3-mile radius and 5-mile radius of the property is 530,283 and 1,317,686, respectively as of July 27, 2015. |
B-92 |
8781 White Swan Drive Tampa, FL 33614 | Collateral Asset Summary – Loan No. 14 Carrollwood Station | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $21,500,000 62.1% 1.53x 8.6% |
Mortgage Loan Information | |
Loan Seller: | JLC |
Loan Purpose: | Acquisition |
Sponsors: | LMA Limited Partnership; Glider LLC |
Borrower: | Carrollwood Station LLC |
Original Balance: | $21,500,000 |
Cut-off Date Balance: | $21,500,000 |
% by Initial UPB: | 2.2% |
Interest Rate: | 5.3380% |
Payment Date: | 6thof each month |
First Payment Date: | October 6, 2015 |
Maturity Date: | September 6, 2020 |
Amortization: | Interest Only |
Additional Debt: | None |
Call Protection: | L(26), D(31), O(3) |
Lockbox / Cash Management(1): | Soft / Springing |
Reserves | ||
Initial | Monthly | |
Taxes: | $300,000 | $33,300 |
Insurance: | $55,000 | $11,200 |
Replacement(2): | $650,000 | $7,000 |
Financial Information | ||
Cut-off Date Balance / Unit: | $63,988 | |
Balloon Balance / Unit: | $63,988 | |
Cut-off Date LTV: | 62.1% | |
Balloon LTV: | 62.1% | |
Underwritten NOI DSCR: | 1.60x | |
Underwritten NCF DSCR: | 1.53x | |
Underwritten NOI Debt Yield: | 8.6% | |
Underwritten NCF Debt Yield: | 8.3% |
Property Information | |
Single Asset / Portfolio: | Single Asset |
Property Type: | Garden Multifamily |
Collateral: | Fee Simple |
Location: | Tampa, FL |
Year Built / Renovated: | 1984 / 2015 |
Total Units: | 336 |
Property Management: | Providence Management Company, LLC |
Underwritten NOI: | $1,859,464 |
Underwritten NCF: | $1,775,464 |
Appraised Value: | $34,600,000 |
Appraisal Date: | August 12, 2015 |
Historical NOI | |
Most Recent NOI: | $1,799,151 (T-12 July 31, 2015) |
2014 NOI: | $1,727,015 (December 31, 2014) |
2013 NOI: | $1,594,105 (December 31, 2013) |
2012 NOI: | $1,459,271 (December 31, 2012) |
Historical Occupancy | |
Most Recent Occupancy: | 97.9% (August 5, 2015) |
2014 Occupancy: | 97.9% (December 31, 2014) |
2013 Occupancy: | 97.3% (December 31, 2013) |
2012 Occupancy: | 96.2% (December 31, 2012) |
(1) | A cash management period and hard lockbox will be triggered(i) if the DSCR as of the end of two consecutive quarters is less than (A) 1.20x for payments 1-17, (B) 1.25x for payments 18-29 and (C)1.30x for payments 30-60; (ii) on the 30th payment date if the borrower has failed to provide to lender (A) the supplemental statement outlining capital expenditures (as required under the loan documents) and (B) the shortfall payment if the required capital expenditures to date equal less than $900,000 in the aggregate. |
(2) | The initial Replacement reserve amount relates to the planned capital expenditure plan described below. |
TRANSACTION HIGHLIGHTS |
■ | Property.Carrollwood Station is a 336-unit garden apartment complex located on a 19.1 acre site. The development consists of 28 two-story buildings with an average unit size of 750 sq. ft., and 657 surface parking spaces. Carrollwood Station’s unit mix is comprised of 240 1-bedroom/1-bathroom units and 96 2-bedroom/2-bathroom units. Property amenities include a swimming pool, fitness room, tennis court, racquetball court, fishing lake, 3-hole putting green, business center and picnic area. |
■ | Capital Expenditure Plan.The sponsor plans to invest an additional $1.55 million in capital improvements to the property within the next 30 months. The upgrades will primarily be focused on unit upgrades and exterior site improvements. In addition to the upfront replacement reserve, the sponsor provided a guaranty for up to $900,000. |
■ | Market.The property is located in the Sulphur Springs multifamily submarket. As of Q2 2015, this submarket reported a vacancy rate of approximately 2.3%, as compared to the current physical vacancy rate at the property of 2.1% and the overall competitive set vacancy of 3.8%. Additionally, no new units have been delivered to the submarket since prior to 2010. |
■ | Sponsorship.The sponsors, LMA Limited Partnership and Glider LLC, are real estate holding entities controlled by the principals of Providence Management Company, LLC (“Providence”). Providence has purchased and sold over 25 multifamily assets over the past 20 years and has extensive experience in management of multifamily properties. Providence currently manages over 5,000 units at 18 different properties, 10 of which are in Florida. The sponsors contributed approximately $11.1 million of equity to the property at loan closing. |
B-93 |
25115 – 25175 Madison Avenue Murrieta, CA 92562 | Collateral Asset Summary – Loan No. 15 Murrieta Spectrum | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $20,600,000 70.3% 1.30x 8.9% |
Mortgage Loan Information | |
Loan Seller: | CCRE |
Loan Purpose(1): | Refinance |
Sponsors: | Steve ChengChe Chou; TsuHo Lee |
Borrower: | Murrieta Spectrum, L.P. |
Original Balance: | $20,600,000 |
Cut-off Date Balance: | $20,600,000 |
% by Initial UPB: | 2.1% |
Interest Rate: | 4.9500% |
Payment Date: | 6thof each month |
First Payment Date: | November 6, 2015 |
Maturity Date: | October 6, 2020 |
Amortization: | Interest only for first 24 months; 360 months thereafter |
Additional Debt: | None |
Call Protection(2): | L(25), D(29), O(6) |
Lockbox / Cash Management(3): | Hard / Springing |
Reserves | ||
Initial | Monthly | |
Taxes: | $119,000 | $39,667 |
Insurance: | $10,817 | $2,704 |
Replacement: | $0 | $2,875 |
TI/LC: | $800,000 | $7,189 |
Earnout(4): | $800,000 | NAP |
Free Rent(5): | $168,994 | NAP |
Existing TI/LC Obligation: | $55,691 | NAP |
Occupancy(6): | $0 | Springing |
Financial Information | ||
Cut-off Date Balance / Sq. Ft.: | $119 | |
Balloon Balance / Sq. Ft.: | $114 | |
Cut-off Date LTV: | 70.3% | |
Balloon LTV: | 67.2% | |
Underwritten NOI DSCR(7): | 1.40x | |
Underwritten NCF DSCR(7): | 1.30x | |
Underwritten NOI Debt Yield: | 8.9% | |
Underwritten NCF Debt Yield: | 8.4% |
Property Information | |
Single Asset / Portfolio: | Single Asset |
Property Type: | Anchored Retail |
Collateral: | Fee Simple |
Location: | Murrieta, CA |
Year Built / Renovated: | 2005 / NAP |
Total Sq. Ft.: | 172,598 |
Property Management: | WestMar Property Management, Inc. |
Underwritten NOI: | $1,842,668 |
Underwritten NCF: | $1,721,900 |
Appraised Value: | $29,300,000 |
Appraisal Date: | August 13, 2015 |
Historical NOI | |
Most Recent NOI: | $1,562,189 (T-12 July 31, 2015) |
2014 NOI: | $1,445,224 (December 31, 2014) |
2013 NOI: | $1,497,305 (December 31, 2013) |
2012 NOI: | $966,658 (December 31, 2012) |
Historical Occupancy | |
Most Recent Occupancy: | 78.0% (October 1, 2015) |
2014 Occupancy: | 89.0% (December 31, 2014) |
2013 Occupancy: | 81.0% (December 31, 2013) |
2012 Occupancy: | 75.0% (December 31, 2012) |
(1) | See “Executive Summary—Modified and Refinanced Loans”, and “Risk Factors—Risks Related to the Mortgage Loans--Prior Bankruptcies, Defaults or Other Proceedings May Be Relevant to Future Performance” in the prospectus supplement. |
(2) | After the permitted release date and prior to the open prepayment date, the borrower may obtain the release of one or more individual pad buildings provided, among other things, (i) the borrower provides defeasance collateral in an amount equal to the greater of (A) 100% of the net sales proceeds and (B) 125% of the allocated loan amount for the parcel to be released and (ii) after the release, (A) the DSCR is greater than or equal to 1.30x, (B) the debt yield is greater than or equal to 8.5% and (C) LTV is less than or equal to 75%. |
(3) | Cash management will commence upon the occurrence of (i) an event of default; or (ii) any bankruptcy action of the borrower, general partner of the borrower, guarantor, or manager has occurred. |
(4) | Earnout reserve of $800,000 will be disbursed to borrower, provided, among other things, (i) the debt service coverage ratio is equal to or greater than 1.25x, (ii) the debt yield is equal to or greater than 8.5%, and (iii) no event of default has occurred at any point during the period between the borrower’s request and the lender’s disbursement of such funds. |
(5) | The largest tenant, Ashleys, affirmed its lease with the borrower following a 2008 bankruptcy and paid $185,280 to the borrower in settlement. SeeRisk Factors—Risks Related to the Mortgage Loans—Tenant Bankruptcy Entails Risk” in the prospectus supplement. At loan closing, the borrower deposited $168,994 of that settlement amount into the Free Rent reserve and from October 1, 2015 through September 30, 2017, approximately $7,014 of this reserve will be applied to pay a portion of this tenant’s rent due. |
(6) | During a Lease Trigger Period, all excess cash will be transferred to lender to be held for approved leasing expenses. A “Lease Trigger Period” will commence upon (i) with respect to a “Major Tenant” on the date that is the earlier of 12 months prior to the lease expiration or the date on or before which such tenant must notify the borrower of lease renewal or termination, or (ii) if any Major Tenant (a) fails to continuously operate, (b) is the subject of a bankruptcy action, (c) gives notice of lease termination or vacates the premises, (d) lease terminates or expires, or (e) is in default under its lease. “Major Tenant” means any tenant that leases 15% or more of the NRA or pays 15% or more of the in-place rents. |
(7) | Based on amortizing debt service payments. Based on the current interest only payments, Underwritten NOI DSCR and Underwritten NCF DSCR are 1.78x and 1.67x, respectively. |
TRANSACTION HIGHLIGHTS |
■ | Property.Murrieta Spectrum is a seven building, 172,598 sq. ft. community shopping center in Murrieta, California. It is located between Los Angeles (80 miles north) and San Diego (65 miles south). The property consists of one large multi-tenant building, five multi-tenant pad buildings, and one single-tenant pad building. As of October 1, 2015 the subject property has a physical occupancy of 78.0%. |
■ | Retail Location.The property has a hard corner in a retail pocket located northwest of the junction of I-15 and Murrieta Hot Springs Road. The retail corridor consists of four retail centers including Murrieta Spectrum along Madison Avenue, with a daily average traffic count of 16,400 vehicles. |
■ | Recent Leasing. The property has seen a notable amount of leasing activity in the past year. There have been eight lease renewals, in addition to two new leases executed since the beginning of 2015 totaling approximately 32,934 sq. ft. and $910,256 of base rent. |
■ | Sponsor. The sponsors are TsuHo Lee and Steve ChengChe Chou. In addition to the subject property, the Lee family has developed multiple other commercial properties in California. The sponsors have owned the land the subject property was built on for more than 20 years, and in addition to the subject property, the Lee family has developed multiple other commercial properties in southern California. |
B-94 |
2974 International Parkway Lake Mary, FL 32746 | Collateral Asset Summary – Loan No. 16 Westin Lake Mary | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $20,000,000 67.8% 1.57x 11.9% |
Mortgage Loan Information | |
Loan Seller: | GACC |
Loan Purpose: | Refinance |
Sponsors: | Mohana R. Velagapudi; K. Rao Yedla; Srinath R. Yedla; Satya N. Yedla |
Borrower: | YRG Hotel Group III, LLC |
Original Balance: | $20,000,000 |
Cut-off Date Balance: | $20,000,000 |
% by Initial UPB: | 2.1% |
Interest Rate: | 5.1400% |
Payment Date: | 6thof each month |
First Payment Date: | October 6, 2015 |
Maturity Date: | September 6, 2025 |
Amortization: | Interest only for first 36 months; 360 months thereafter |
Additional Debt: | None |
Call Protection: | L(26), D(89), O(5) |
Lockbox / Cash Management(1): | Hard / Springing |
Reserves | ||
Initial | Monthly | |
Taxes: | $263,826 | $26,383 |
Insurance: | $186,193 | $16,927 |
FF&E(2): | $0 | At least 4.0% of prior month’s gross rents |
Required Repairs: | $29,400 | NAP |
PIP(3): | $1,452,172 | NAP |
Financial Information | ||
Cut-off Date Balance / Room: | $79,365 | |
Balloon Balance / Room: | $70,471 | |
Cut-off Date LTV: | 67.8% | |
Balloon LTV: | 60.2% | |
Underwritten NOI DSCR(4): | 1.82x | |
Underwritten NCF DSCR(4): | 1.57x | |
Underwritten NOI Debt Yield: | 11.9% | |
Underwritten NCF Debt Yield: | 10.3% |
Property Information | |
Single Asset / Portfolio: | Single Asset |
Property Type: | Full Service Hospitality |
Collateral: | Fee Simple |
Location: | Lake Mary, FL |
Year Built / Renovated: | 2009 / NAP |
Total Rooms: | 252 |
Property Management: | Yedla Management Company, Inc. |
Underwritten NOI: | $2,380,283 |
Underwritten NCF: | $2,059,611 |
Appraised Value: | $29,500,000 |
Appraisal Date: | June 1, 2015 |
Historical NOI | |
Most Recent NOI: | $2,394,563 (T-12 August 31, 2015) |
2014 NOI: | $2,189,332 (December 31, 2014) |
2013 NOI: | $1,846,076 (December 31, 2013) |
2012 NOI: | $1,946,082 (December 31, 2012) |
Historical Occupancy | |
Most Recent Occupancy: | 72.9% (August 31, 2015) |
2014 Occupancy: | 70.2% (December 31, 2014) |
2013 Occupancy: | 63.2% (December 31, 2013) |
2012 Occupancy: | 64.9% (December 31, 2012) |
(1) | Cash management and an excess cash sweep will be triggered upon (i) an event of default, (ii) if the DSCR falls below 1.25x as of any calendar quarter or (iii) a PIP is required by the franchisor and shall continue until such event of default is cured or the DSCR is at least 1.30x for two consecutive calendar quarters or 125% of the estimated cost of such PIP has been reserved. |
(2) | On a monthly basis, the borrower is required to deposit the greater of 4.0% of prior month’s gross rents, any amount required under the management agreement or any amount required under the franchise agreement for FF&E work into a FF&E reserve account. |
(3) | At closing the borrower deposited $1,452,172 into a PIP reserve account for planned improvements at the property that are expected to be completed by 2016. |
(4) | Based on amortizing debt service payments. Based on current interest only payments, the Underwritten NOI DSCR and the Underwritten NCF DSCR are 2.28x and 1.98x, respectively. |
TRANSACTION HIGHLIGHTS |
■ | Property.Westin Lake Mary is a seven-story, 252-room full service hotel located in Lake Mary, Florida. The hotel has a franchise agreement with Westin Hotel Management, L.P., which expires on November 12, 2034. The hotel features 252 rooms, comprised of 96 king rooms, 154 queen rooms and 2 suites. The hotel has numerous amenities including a business center, fitness center, outdoor swimming pool, Westin Executive Club, as well as the 200-seat Shula’s 347 Grill, 25-seat lobby bar and approximately 14,667 sq. ft. of meeting space, which includes 3,900 sq. ft. of outdoor space. The food and beverage options are leased to a third party, Culinaire of Florida, Inc., on a 15-year lease which commenced in 2009. |
■ | Market. Westin Lake Mary is located in Lake Mary, Florida within Seminole County and approximately 18 miles north of the Orlando central business district. The Lake Mary area has developed rapidly over the past 20 years as growth from Orlando continues to push north. There are several recent high-quality mixed-use developments which have improved the subject neighborhood, making it one of the fastest growing areas in Orlando. The hotel’s surrounding area is home to headquarters and regional offices for various national and international companies such as Deloitte, Verizon, AT&T, Charisma Media, Cingular Wireless, Duke Energy, Siemens Information and Communications Network, Inc., SunGard, among others. The property is in close proximity to a number of access routes including Interstate 4, a main east-west thoroughfare in the area, Interstate 95 and Florida’s Turnpike. Lake Mary is also accessible via the SunRail train service which connects to downtown Orlando, the Lynx bus service and the Orlando-Sanford International Airport, which accommodated approximately 2.2 million travelers in 2014. |
■ | Performance.As of August 31, 2015 the Westin Lake Mary property had occupancy of 72.9%, ADR of $108.77 and RevPAR of $79.30. According to a market research report, the property outperformed its competitive set, with a reported RevPAR penetration level of 106.7%, for the trailing 12-month period ending August 31, 2015. |
B-95 |
13729 Research Boulevard Austin, TX 78750 | Collateral Asset Summary – Loan 17 Lake Creek Festival | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $19,750,000 70.0% 1.66x 11.2% |
Mortgage Loan Information | |
Loan Seller: | GACC |
Loan Purpose: | Refinance |
Sponsors: | William Bernstein Qualified Terminable Interest Property Trust; RBC Miller Brothers Trust; Richard Miller; Craig Miller; Barton Miller |
Borrower: | Lake Creek Festival, LLC |
Original Balance: | $19,750,000 |
Cut-off Date Balance: | $19,750,000 |
% by Initial UPB: | 2.1% |
Interest Rate: | 4.4600% |
Payment Date: | 6thof each month |
First Payment Date: | November 6, 2015 |
Maturity Date: | October 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): | Hard / Springing |
Reserves | ||
Initial | Monthly | |
Taxes: | $347,442 | $38,605 |
Insurance(2): | $0 | Springing |
Replacement: | $0 | $4,758 |
TI/LC(3): | $508,615 | $14,748 |
Required Repairs: | $15,000 | NAP |
Free Rent: | $141,365 | NAP |
Lease Sweep(4): | $0 | Springing |
Financial Information | ||
Cut-off Date Balance / Sq. Ft.: | $69 | |
Balloon Balance / Sq. Ft.: | $59 | |
Cut-off Date LTV: | 70.0% | |
Balloon LTV: | 59.8% | |
Underwritten NOI DSCR(5): | 1.85x | |
Underwritten NCF DSCR(5): | 1.66x | |
Underwritten NOI Debt Yield: | 11.2% | |
Underwritten NCF Debt Yield: | 10.0% |
Property Information | |
Single Asset / Portfolio: | Single Asset |
Property Type: | Anchored Retail |
Collateral: | Fee Simple |
Location: | Austin, TX |
Year Built / Renovated: | 1990,1991 / NAP |
Total Sq. Ft.: | 285,454 |
Property Management: | Endura Advisory Group, GP LLC |
Underwritten NOI: | $2,216,741 |
Underwritten NCF: | $1,981,336 |
Appraised Value: | $28,200,000 |
Appraisal Date: | July 1, 2015 |
Historical NOI(6) | |
Most Recent NOI: | $1,775,432 (T-12 July 31, 2015) |
2014 NOI: | $1,456,372 (December 31, 2014) |
2013 NOI: | $2,467,294 (December 31, 2013) |
Historical Occupancy(6) | |
Most Recent Occupancy: | 98.1% (September 8, 2015) |
2014 Occupancy: | 84.1% (December 31, 2014) |
2013 Occupancy: | 96.7% (December 31, 2013) |
(1) | Cash management will be triggered (i) upon an event of default, (ii) if the DSCR falls below 1.20x for any calendar quarter until such time that the DSCR is at least 1.25x for two consecutive calendar quarters, or (iii) the commencement of a Lease Sweep Period (as defined herein) until such Lease Sweep Period is cured as provided in the loan documents. |
(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) | TI/LC reserves are subject to a cap of $535,000 (exclusive of the Initial TI/LC deposit), subject to replenishment if drawn. |
(4) | A “Lease Sweep Period” will commence (i) twelve months prior to the expiration of a Lease Sweep Lease (as defined herein) or upon the date the Sweep Tenant (as defined herein) is required to give notice of its exercise of a renewal option (and such renewal has not been so exercised), (ii) upon the early termination, early cancellation or early surrender of a Lease Sweep Lease (or at least 25% of its space) or upon Borrower’s receipt of notice by a Sweep Tenant of its intent to effect an early termination, early cancellation or early surrender of its Lease Sweep Lease (or at least 25% of its space), (iii) upon the date the Sweep Tenant discontinues (i.e., “goes dark”) its business at all or substantially all of its Premises, (iv) upon a monetary or material nonmonetary default by Sweep Tenant under its lease or (v) upon a bankruptcy or insolvency proceeding of a Sweep Tenant or its parent. A “Lease Sweep Lease” shall mean (i) each of the Burlington Coat Factory lease and the Hobby Lobby lease and (ii) any replacement lease that, either individually, or when taken together with any other lease of the same tenant, covers all or substantially all of the rentable square feet of the space covered by the applicable Lease Sweep Lease. “Sweep Tenant” means any tenant under a Lease Sweep Lease. |
(5) | Based on amortizing debt service payments. Based on current interest only payments, the Underwritten NOI DSCR and the Underwritten NCF DSCR are 2.48x and 2.22x, respectively. |
(6) | In October 2013, Stein Mart vacated 34,000 sq. ft. of space. 33,900 sq. ft. of the space has since been leased to Pinballz Arcade with a lease that commenced on August 1, 2015. Pinballz Arcade has not yet taken occupancy and is entitled to free rent through January 2016, which was deposited in an upfront reserve account. |
TRANSACTION HIGHLIGHTS |
■ | Property.The Lake Creek Festival property is a 285,454 sq. ft. community shopping center anchored by Burlington Coat Factory and Hobby Lobby located in Austin, Texas. The improvements consist of five, single story buildings situated on 24.8 acres. The property has 1,264 surface parking spaces which equates to a ratio of 4.43 spaces per 1,000 sq. ft. The property has good visibility on Research Boulevard (US Highway 183), the primary retail corridor in the immediate area, and the back of the property abuts Hymeadow Drive, a residential road. Along Research Boulevard, there are a number of big box retailers, including Lowe’s Home Improvement, a Walmart Supercenter, Home Depot, Target and Kohl’s, all located within a mile of the property. In addition, the Lakeline Mall, a 1.3 million sq. ft. shopping center and the Lakeline Plaza, an approximately 366,000 sq. ft. center, are in close proximity. |
■ | Tenancy. As of September 8, 2015, the property is 98.1% leased to 19 tenants, with the top five tenants occupying approximately 80.4% of the net rentable area. The property is anchored by Burlington Coat Factory (30.3% of NRA; 19.7% of U/W Base Rent; rated Ba3 by Moody’s) and Hobby Lobby (20.1% of NRA; 11.9% of U/W Base Rent). Tenants have been in occupancy for an average of 13.1 years and the weighted average remaining lease term at the property is 5.1 years. |
■ | Location. The property is located in Williamson County within the city of Austin, the state capital of Texas.The property’s neighborhood is proximate to Cedar Park and is considered to be a suburban location in the Far Northwest submarket of the Austin MSA. As of Q2 2015, the property’s submarket contained approximately 4.8 sq. ft. and had a vacancy rate of 9.4% compared to 4.3% for the entire Austin region. The asking rent in the Far Northwest Submarket was $15.47 compared to $18.51 for the Austin area. |
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2015 Manhattan Beach Boulevard Redondo Beach, CA 90278 | Collateral Asset Summary – Loan 18 Wedgewood Building | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $18,978,686 67.3% 1.27x 8.5% |
Mortgage Loan Information | |
Loan Seller: | JLC |
Loan Purpose: | Refinance |
Sponsors: | Gregory L. Geiser; David R. Wehrly; Darin Puhl |
Borrower(1): | WWW 90278, LLC |
Original Balance: | $19,000,000 |
Cut-off Date Balance: | $18,978,686 |
% by Initial UPB: | 2.0% |
Interest Rate: | 4.7670% |
Payment Date: | 6thof each month |
First Payment Date: | November 6, 2015 |
Maturity Date: | October 6, 2025 |
Amortization: | 360 months |
Additional Debt: | None |
Call Protection: | L(25), D(91), O(4) |
Lockbox / Cash Management(2): | Springing Hard / Springing |
Reserves | ||
Initial | Monthly | |
Taxes: | $145,000 | $17,600 |
Insurance: | $4,100 | $1,900 |
Replacement: | $0 | $1,107 |
TI/LC(3): | $0 | $7,055 |
Special Rollover Reserve(4): | NAP | Springing |
Financial Information | ||
Cut-off Date Balance / Sq. Ft.: | $229 | |
Balloon Balance / Sq. Ft.: | $187 | |
Cut-off Date LTV: | 67.3% | |
Balloon LTV: | 55.0% | |
Underwritten NOI DSCR: | 1.35x | |
Underwritten NCF DSCR: | 1.27x | |
Underwritten NOI Debt Yield: | 8.5% | |
Underwritten NCF Debt Yield: | 8.0% |
Property Information | |
Single Asset / Portfolio: | Single Asset |
Property Type: | CBD Office |
Collateral: | Fee Simple |
Location: | Redondo Beach, CA |
Year Built / Renovated: | 1986 / 2014 |
Total Sq. Ft.: | 83,005 |
Property Management: | Kearny Property Services, Inc. |
Underwritten NOI: | $1,609,412 |
Underwritten NCF: | $1,511,612 |
Appraised Value: | $28,200,000 |
Appraisal Date: | August 17, 2015 |
Historical NOI(5) | |
2014 NOI: | NAP |
2013 NOI: | NAP |
2012 NOI: | NAP |
Historical Occupancy(5) | |
Most Recent Occupancy: | 100.0% (September 1, 2015) |
2014 Occupancy: | NAP |
2013 Occupancy: | NAP |
2012 Occupancy: | NAP |
(1) | The following tenants are affiliates of the borrower: Wedgewood (approximately 29.3% NRA), Maxim Properties (approximately 13.7% NRA), Greenhedge Escrow (approximately 7.6% of NRA), HMC Assets (approximately 5.8% NRA) and Civic Financial (approximately 5.2% NRA). Wedgewood Enterprises, Maxim Properties and Greenhedge Escrow executed joint and several lease guarantees for each of the five borrower-affiliated leases. |
(2) | Cash management and a hard lockbox will be triggered upon (i) an event of default, (ii) a breach of guaranty covenants, or (iii) the commencement of a Lease Sweep Period. “A Lease Sweep Period” will commence (i) 12 months prior to the end of the term of any “Major Lease”, (ii) if any Major Lease is terminated or (iii) if any tenant under a Major Lease “goes dark” or files for bankruptcy. “Major Lease” means the Wedgewood lease, the T-Mobile lease, any lease entered into with a tenant who is an affiliate of the borrower and any other lease which covers 12,000 or more sq. ft. |
(3) | The TI/LC reserve is subject to a cap of $300,000. |
(4) | On each payment date occurring during the continuance of a Lease Sweep Period, provided no cash management period is then continuing (other than as caused by the Lease Sweep Period), all available cash is required to be deposited into the Special Rollover reserve subaccount. |
(5) | The borrower purchased the property in 2012 and invested approximately $9.9 million ($119 PSF) to renovate and convert the property into a Class A, creative office building. Some of the renovations included demolition and reconfiguration of the first floor office space, adding solar panels to the rooftop of the building and carports, security upgrades, new signage, and upgraded audio video and network equipment. The renovations were completed in 2014 and the property is currently 100.0% occupied (including 61.6% of the NRA occupied by borrower affiliates). All of the leases are new with commencement dates ranging from April 2014 to November 2015. |
TRANSACTION HIGHLIGHTS |
■ | Property. Wedgewood Building is a two story, 83,005 sq. ft. Class A office building located on Manhattan Beach Boulevard on a 3.9 acre site in Redondo Beach, California. |
■ | Capital Improvements. The property was built in 1986 and underwent a $9.9 million ($119 PSF), two-year renovation completed in 2014 to convert the building from its previous use as a call center into a Class A creative office building. Improvements over the last several years included reconfiguring the ground floor tenant suites to larger open floor plates, installing 625 solar panels, replacing the windows and adding unique architectural features intended to appeal to creative office tenants. |
■ | Location.Wedgewood Building is located less than one mile from Interstate 405 and the Pacific Coast Highway, less than two miles from Manhattan Beach and less than five miles from LAX Airport. The property benefits from excellent access and visibility from Manhattan Beach Boulevard and is located adjacent to the Redondo Beach Performing Arts Center, South Bay’s largest retail, business and entertainment complex providing many amenities to tenants. |
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300 Kenhorst Plaza Kenhorst, PA 19607 | Collateral Asset Summary – Loan No. 19 Kenhorst Plaza | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $18,300,000 73.2% 1.25x 8.7% |
Mortgage Loan Information | |
Loan Seller: | LCF |
Loan Purpose: | Acquisition |
Sponsor: | Paul Sub |
Borrower: | 1895 New Holland Road LLC |
Original Balance: | $18,300,000 |
Cut-off Date Balance: | $18,300,000 |
% by Initial UPB: | 1.9% |
Interest Rate: | 5.1000% |
Payment Date: | 6thof each month |
First Payment Date: | November 6, 2015 |
Maturity Date: | October 6, 2025 |
Amortization: | Interest only for first 60 months; 360 months thereafter |
Additional Debt: | None |
Call Protection: | L(25), D(92), O(3) |
Lockbox / Cash Management | Hard / In-Place |
Reserves | ||
Initial | Monthly | |
Taxes: | $183,994 | $36,799 |
Insurance: | $26,997 | $2,454 |
Replacement: | $0 | $2,556 |
TI/LC(1): | $220,000 | Springing |
Required Repairs: | $29,338 | NAP |
Retro Fitness Reserve(2): | $810,000 | NAP |
Financial Information | ||
Cut-off Date Balance / Sq. Ft.: | $113 | |
Balloon Balance / Sq. Ft.: | $105 | |
Cut-off Date LTV: | 73.2% | |
Balloon LTV: | 67.6% | |
Underwritten NOI DSCR(3): | 1.33x | |
Underwritten NCF DSCR(3): | 1.25x | |
Underwritten NOI Debt Yield: | 8.7% | |
Underwritten NCF Debt Yield: | 8.2% |
Property Information | |
Single Asset / Portfolio: | Single Asset |
Property Type: | Anchored Retail |
Collateral: | Fee Simple |
Location: | Kenhorst, PA |
Year Built / Renovated: | 1990 / NAP |
Total Sq. Ft.: | 161,424 |
Property Management: | Winslow Property Management LLC |
Underwritten NOI: | $1,588,259 |
Underwritten NCF: | $1,492,638 |
Appraised Value: | $25,000,000 |
Appraisal Date: | July 21, 2015 |
Historical NOI(4) | |
Most Recent NOI: | $1,521,814 (T-12 June 30, 2015) |
2014 NOI: | $1,413,794 (December 31, 2014) |
2013 NOI: | $1,382,919 (December 31, 2013) |
2012 NOI: | NAV |
Historical Occupancy(4) | |
Most Recent Occupancy: | 92.2% (September 1, 2015) |
2014 Occupancy: | 90.8% (December 31, 2014) |
2013 Occupancy: | 86.0% (December 31, 2013) |
2012 Occupancy: | NAV |
(1) | The borrower will be required to make monthly deposits of $5,413 into a TI/LC reserve account if the TI/LC reserve falls below $90,000. |
(2) | At origination, the borrower deposited $810,000 into a Retro Fitness Reserve at closing. The $810,000 deposit represents the 12 months free rent per the new 10-year lease ($171,520), the difference in rent/CAM payments between Sears Hardware and Retro Fitness for the dates of closing through February 1, 2016 ($28,758), TI Allowance to be used by the Retro Fitness tenant ($500,000), landlord work to be done in premises prior to tenant work as a condition to the tenant’s obligation to take possession ($105,000), and the remainder to be used as a contingency ($4,722). |
(3) | Based on amortizing debt service payments. Based on the current interest only payments, Underwritten NOI DSCR and Underwritten NCF DSCR are 1.68x and 1.58x, respectively. |
(4) | The Kenhorst Plaza property was acquired in 2012; as such, 2012 NOI and 2012 Occupancy are not available. |
TRANSACTION HIGHLIGHTS |
■ | Property.TheKenhorst Plaza property is a 161,424 sq. ft. grocery-anchored retail property located in Kenhorst, Pennsylvania. The property is anchored by Redner’s Warehouse Markets (Redner’s Markets, Inc.) (“Redner’s Warehouse Markets”) (35.9% NRA, April 30, 2030 expiration). Redner’s Warehouse Markets reported sales of approximately $413 PSF for the full year 2014. The second largest tenant is expected to be Retro Fitness (13.3% NRA, February 28, 2026 expiration), which tenant has signed a 10-year lease and is expected to take occupancy March 1, 2016, replacing the current tenant, Sears Hardware (Sears, Roebuck & Co.) (“Sears Hardware”), which tenant has a lease expiration of February 3, 2016. |
■ | Market.TheKenhorst Plaza property is located in the Reading metropolitan statistical area. The Reading metropolitan retail market exhibits a current vacancy of 6.0% as of Q2 2015, while the rental comparables have a vacancy of 7.4%. As of Q2 2015, within a five mile radius of the property, there is a population of 182,396, with an average household income of $60,432, and an average home price of approximately $153,377. |
■ | Sponsorship.The sponsor, Paul Sub, contributed $8.2 million of equity in connection with the purchase of the Kenhorst Plaza property.Mr. Sub has been in the real estate management and development business for over 40 years. Mr. Sub’s current holdings include ownership in 10 commercial real estate properties. |
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3740-3850 Beltline Road Addison, TX 75001 | Collateral Asset Summary – Loan No. 20 Addison Town Center | Cut-off Date Balance: Cut-off Date LTV: U/W NCF DSCR: U/W NOI Debt Yield: | $16,231,741 72.3% 1.43x 9.8% |
Mortgage Loan Information | |
Loan Seller: | CCRE |
Loan Purpose: | Refinance |
Sponsor: | Herbert D. Weitzman |
Borrower: | Portfolio Addison Town Center Retail, L.P. |
Original Balance: | $16,250,000 |
Cut-off Date Balance: | $16,231,741 |
% by Initial UPB: | 1.7% |
Interest Rate: | 4.7600% |
Payment Date: | 6thof each month |
First Payment Date: | November 6, 2015 |
Maturity Date: | October 6, 2025 |
Amortization: | 360 months |
Additional Debt: | None |
Call Protection: | L(25), D(90), O(5) |
Lockbox / Cash Management(1): | Hard / Springing |
Reserves | ||
Initial | Monthly | |
Taxes: | $414,670 | $41,467 |
Insurance: | $30,123 | $3,012 |
Replacement(2): | $0 | $2,328 |
TI/LC(3): | $250,000 | $9,314 |
Required Repairs: | $3,025 | NAP |
Free Rent(4): | $199,884 | NAP |
Roof Repair: | $76,280 | NAP |
Financial Information | ||
Cut-off Date Balance / Sq. Ft.: | $87 | |
Balloon Balance / Sq. Ft.: | $71 | |
Cut-off Date LTV: | 72.3% | |
Balloon LTV: | 59.0% | |
Underwritten NOI DSCR: | 1.56x | |
Underwritten NCF DSCR: | 1.43x | |
Underwritten NOI Debt Yield: | 9.8% | |
Underwritten NCF Debt Yield: | 8.9% |
Property Information | |
Single Asset / Portfolio: | Single Asset |
Property Type: | Anchored Retail |
Collateral: | Fee Simple |
Location: | Addison, TX |
Year Built / Renovated: | 1993 – 1994 / 2003 |
Total Sq. Ft.: | 186,275 |
Property Management: | Weitzman Management Corporation |
Underwritten NOI: | $1,591,766 |
Underwritten NCF: | $1,452,604 |
Appraised Value: | $22,460,000 |
Appraisal Date: | July 13, 2015 |
Historical NOI | |
Most Recent NOI: | $1,560,805 (T-12 May 31, 2015) |
2014 NOI: | $1,674,901 (December 31, 2014) |
2013 NOI: | $1,685,576 (December 31, 2013) |
2012 NOI: | $1,449,627 (December 31, 2012) |
Historical Occupancy | |
Most Recent Occupancy: | 88.5% (September 2, 2015) |
2014 Occupancy: | 82.5% (December 31, 2014) |
2013 Occupancy: | 87.7% (December 31, 2013) |
2012 Occupancy: | 87.9% (December 31, 2012) |
(1) | Cash management will be triggered upon (i) an event of default, (ii) any bankruptcy action of the borrower, general partner of the borrower, guarantor or property manager or (iii) the failure by the borrower to maintain a DSCR of at least 1.10x for two consecutive calendar quarters. |
(2) | Replacement reserves are subject to a cap of $84,000. |
(3) | TI/LC reserves are subject to a cap of $300,000. |
(4) | The free rent reserve for the tenant DFW-Addison Fitness, LLC d/b/a Crunch Fitness is required to be disbursed to the borrower in equal sums on each of the initial six payment dates in the amount of $30,464 and on the seventh payment date in the amount of $17,100. |
TRANSACTION HIGHLIGHTS |
■ | Property.Addison Town Center is an 88.5% occupied (as of September 2, 2015) 186,275 sq. ft. anchored retail shopping center located in Addison, Texas, a small retail corridor in North Dallas. The property is anchored by Kroger Food Stores (50,540 sq. ft.), Office Depot (21,067 sq. ft.), Crunch Fitness (19,920 sq. ft.), PetSmart (19,551 sq. ft.) and Dollar Tree (6,225 sq. ft.). |
■ | Anchor Sales. According to the sponsor, Kroger reported sales of $428 PSF as of June 30, 2015 and have increased every year since 2006. |
■ | Market & Location.Addison Town Center is located in central Dallas County and is about 12 miles north of the Dallas Central Business District and 32 miles northeast of the Fort Worth Central Business District. The town has over 170 restaurants and 22 hotels as well as the Addison Airport which is one of the busiest general aviation airports in Texas. Many corporations such as Pizza Hut, Mary Kay Cosmetics, Fed Ex/Kinko’s, Tuesday Morning, Beckett, Carr and Tenet Healthcare and Comp USA have their headquarters in Addison. Primary access to the property is provided by the Dallas North Tollway which is a six-lane expressway that passes through or along the cities of Dallas, Highland Park, University Park, Farmer Branch, Plano and Frisco. |
■ | Sponsorship.The sponsor and non-recourse carve-out guarantor, Herbert D. Weitzman, is the executive chairman of The Weitzman Group and Cencor Realty Services. The Weitzman Group is a full-service commercial real estate brokerage firm and Cencor Realty Services is a shopping center management firm with a portfolio of more than 21.5 million sq. ft. under management. |
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ANNEX C
GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES
Except in limited circumstances, the globally offered COMM 2015-LC23 Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Class A-1, Class A-2, Class A-SB, Class A-3, Class A-4, Class XP-A, Class XS-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
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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 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
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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 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 Section 7701(a)(30) of the Code (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 classified as a corporation (or certain other entities) for U.S. federal income tax purposes 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):
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(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)—
(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.
C-4 |
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 |
· | 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.
C-5 |
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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 Percentage | 100% | 100% | 100% | 100% | 100% | |||||
November 2016 | 84% | 84% | 84% | 84% | 84% | |||||
November 2017 | 66% | 66% | 66% | 66% | 66% | |||||
November 2018 | 45% | 45% | 45% | 45% | 45% | |||||
November 2019 | 21% | 21% | 21% | 21% | 21% | |||||
November 2020 and thereafter | 0% | 0% | 0% | 0% | 0% | |||||
Weighted Average Life (years) | 2.67 | 2.65 | 2.64 | 2.64 | 2.64 |
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 Percentage | 100% | 100% | 100% | 100% | 100% | |||||
November 2016 | 100% | 100% | 100% | 100% | 100% | |||||
November 2017 | 100% | 100% | 100% | 100% | 100% | |||||
November 2018 | 100% | 100% | 100% | 100% | 100% | |||||
November 2019 | 100% | 100% | 100% | 100% | 100% | |||||
November 2020 and thereafter | 0% | 0% | 0% | 0% | 0% | |||||
Weighted Average Life (years) | 4.89 | 4.87 | 4.85 | 4.81 | 4.58 |
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 Percentage | 100% | 100% | 100% | 100% | 100% | |||||
November 2016 | 100% | 100% | 100% | 100% | 100% | |||||
November 2017 | 100% | 100% | 100% | 100% | 100% | |||||
November 2018 | 100% | 100% | 100% | 100% | 100% | |||||
November 2019 | 100% | 100% | 100% | 100% | 100% | |||||
November 2020 | 99% | 99% | 99% | 99% | 99% | |||||
November 2021 | 79% | 79% | 79% | 79% | 79% | |||||
November 2022 | 59% | 59% | 59% | 59% | 59% | |||||
November 2023 | 38% | 38% | 38% | 38% | 38% | |||||
November 2024 | 16% | 16% | 16% | 16% | 16% | |||||
November 2025 and thereafter | 0% | 0% | 0% | 0% | 0% | |||||
Weighted Average Life (years) | 7.40 | 7.40 | 7.40 | 7.40 | 7.40 |
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 Percentage | 100% | 100% | 100% | 100% | 100% | |||||
November 2016 | 100% | 100% | 100% | 100% | 100% | |||||
November 2017 | 100% | 100% | 100% | 100% | 100% | |||||
November 2018 | 100% | 100% | 100% | 100% | 100% | |||||
November 2019 | 100% | 100% | 100% | 100% | 100% | |||||
November 2020 | 100% | 100% | 100% | 100% | 100% | |||||
November 2021 | 100% | 100% | 100% | 100% | 100% | |||||
November 2022 | 100% | 100% | 100% | 100% | 100% | |||||
November 2023 | 100% | 100% | 100% | 100% | 100% | |||||
November 2024 | 100% | 100% | 100% | 100% | 100% | |||||
November 2025 and thereafter | 0% | 0% | 0% | 0% | 0% | |||||
Weighted Average Life (years) | 9.79 | 9.72 | 9.64 | 9.56 | 9.38 |
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 Percentage | 100% | 100% | 100% | 100% | 100% | |||||
November 2016 | 100% | 100% | 100% | 100% | 100% | |||||
November 2017 | 100% | 100% | 100% | 100% | 100% | |||||
November 2018 | 100% | 100% | 100% | 100% | 100% | |||||
November 2019 | 100% | 100% | 100% | 100% | 100% | |||||
November 2020 | 100% | 100% | 100% | 100% | 100% | |||||
November 2021 | 100% | 100% | 100% | 100% | 100% | |||||
November 2022 | 100% | 100% | 100% | 100% | 100% | |||||
November 2023 | 100% | 100% | 100% | 100% | 100% | |||||
November 2024 | 100% | 100% | 100% | 100% | 100% | |||||
November 2025 and thereafter | 0% | 0% | 0% | 0% | 0% | |||||
Weighted Average Life (years) | 9.85 | 9.84 | 9.83 | 9.79 | 9.59 |
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 Percentage | 100% | 100% | 100% | 100% | 100% | |||||
November 2016 | 100% | 100% | 100% | 100% | 100% | |||||
November 2017 | 100% | 100% | 100% | 100% | 100% | |||||
November 2018 | 100% | 100% | 100% | 100% | 100% | |||||
November 2019 | 100% | 100% | 100% | 100% | 100% | |||||
November 2020 | 100% | 100% | 100% | 100% | 100% | |||||
November 2021 | 100% | 100% | 100% | 100% | 100% | |||||
November 2022 | 100% | 100% | 100% | 100% | 100% | |||||
November 2023 | 100% | 100% | 100% | 100% | 100% | |||||
November 2024 | 100% | 100% | 100% | 100% | 100% | |||||
November 2025 and thereafter | 0% | 0% | 0% | 0% | 0% | |||||
Weighted Average Life (years) | 9.90 | 9.90 | 9.90 | 9.90 | 9.65 |
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 Percentage | 100% | 100% | 100% | 100% | 100% | |||||
November 2016 | 100% | 100% | 100% | 100% | 100% | |||||
November 2017 | 100% | 100% | 100% | 100% | 100% | |||||
November 2018 | 100% | 100% | 100% | 100% | 100% | |||||
November 2019 | 100% | 100% | 100% | 100% | 100% | |||||
November 2020 | 100% | 100% | 100% | 100% | 100% | |||||
November 2021 | 100% | 100% | 100% | 100% | 100% | |||||
November 2022 | 100% | 100% | 100% | 100% | 100% | |||||
November 2023 | 100% | 100% | 100% | 100% | 100% | |||||
November 2024 | 100% | 100% | 100% | 100% | 100% | |||||
November 2025 and thereafter | 0% | 0% | 0% | 0% | 0% | |||||
Weighted Average Life (years) | 9.90 | 9.90 | 9.90 | 9.90 | 9.65 |
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 Percentage | 100% | 100% | 100% | 100% | 100% | |||||
November 2016 | 100% | 100% | 100% | 100% | 100% | |||||
November 2017 | 100% | 100% | 100% | 100% | 100% | |||||
November 2018 | 100% | 100% | 100% | 100% | 100% | |||||
November 2019 | 100% | 100% | 100% | 100% | 100% | |||||
November 2020 | 100% | 100% | 100% | 100% | 100% | |||||
November 2021 | 100% | 100% | 100% | 100% | 100% | |||||
November 2022 | 100% | 100% | 100% | 100% | 100% | |||||
November 2023 | 100% | 100% | 100% | 100% | 100% | |||||
November 2024 | 100% | 100% | 100% | 100% | 100% | |||||
November 2025 and thereafter | 0% | 0% | 0% | 0% | 0% | |||||
Weighted Average Life (years) | 9.90 | 9.90 | 9.90 | 9.90 | 9.65 |
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 | |||||
99.5000% | 1.9956% | 1.9968% | 1.9971% | 1.9973% | 1.9973% | |||||
99.7500% | 1.8977% | 1.8982% | 1.8984% | 1.8985% | 1.8985% | |||||
100.0000% | 1.8002% | 1.8001% | 1.8001% | 1.8000% | 1.8000% | |||||
100.2500% | 1.7030% | 1.7023% | 1.7021% | 1.7020% | 1.7020% | |||||
100.5000% | 1.6062% | 1.6049% | 1.6045% | 1.6043% | 1.6043% | |||||
Weighted Average Life (years) | 2.67 | 2.65 | 2.64 | 2.64 | 2.64 |
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 | |||||
102.5000% | 2.6721% | 2.6705% | 2.6679% | 2.6641% | 2.6369% | |||||
102.7500% | 2.6177% | 2.6159% | 2.6131% | 2.6089% | 2.5792% | |||||
103.0000% | 2.5635% | 2.5615% | 2.5585% | 2.5539% | 2.5216% | |||||
103.2500% | 2.5094% | 2.5073% | 2.5040% | 2.4991% | 2.4642% | |||||
103.5000% | 2.4555% | 2.4532% | 2.4497% | 2.4444% | 2.4069% | |||||
Weighted Average Life (years) | 4.89 | 4.87 | 4.85 | 4.81 | 4.58 |
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 | |||||
102.5000% | 3.2246% | 3.2246% | 3.2246% | 3.2246% | 3.2246% | |||||
102.7500% | 3.1866% | 3.1866% | 3.1866% | 3.1866% | 3.1866% | |||||
103.0000% | 3.1487% | 3.1487% | 3.1487% | 3.1487% | 3.1487% | |||||
103.2500% | 3.1109% | 3.1109% | 3.1109% | 3.1109% | 3.1109% | |||||
103.5000% | 3.0732% | 3.0732% | 3.0732% | 3.0732% | 3.0732% | |||||
Weighted Average Life (years) | 7.40 | 7.40 | 7.40 | 7.40 | 7.40 |
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 | |||||
100.5000% | 3.4750% | 3.4746% | 3.4741% | 3.4735% | 3.4724% | |||||
100.7500% | 3.4446% | 3.4440% | 3.4432% | 3.4425% | 3.4409% | |||||
101.0000% | 3.4143% | 3.4135% | 3.4125% | 3.4115% | 3.4094% | |||||
101.2500% | 3.3841% | 3.3831% | 3.3818% | 3.3807% | 3.3781% | |||||
101.5000% | 3.3539% | 3.3528% | 3.3513% | 3.3499% | 3.3468% | |||||
Weighted Average Life (years) | 9.79 | 9.72 | 9.64 | 9.56 | 9.38 |
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 | |||||
102.5000% | 3.4879% | 3.4877% | 3.4874% | 3.4862% | 3.4808% | |||||
102.7500% | 3.4580% | 3.4577% | 3.4574% | 3.4561% | 3.4502% | |||||
103.0000% | 3.4282% | 3.4279% | 3.4275% | 3.4261% | 3.4197% | |||||
103.2500% | 3.3984% | 3.3981% | 3.3977% | 3.3961% | 3.3892% | |||||
103.5000% | 3.3687% | 3.3684% | 3.3679% | 3.3663% | 3.3589% | |||||
Weighted Average Life (years) | 9.85 | 9.84 | 9.83 | 9.79 | 9.59 |
Pre-Tax Yield to Maturity (CBE) for the Class XP-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 | |||||
2.8250% | 4.0153% | 4.0158% | 4.0162% | 4.0162% | 4.0162% | |||||
2.8375% | 3.8205% | 3.8210% | 3.8214% | 3.8214% | 3.8214% | |||||
2.8500% | 3.6274% | 3.6279% | 3.6283% | 3.6283% | 3.6283% | |||||
2.8625% | 3.4359% | 3.4364% | 3.4368% | 3.4368% | 3.4368% | |||||
2.8750% | 3.2460% | 3.2465% | 3.2469% | 3.2469% | 3.2469% |
Pre-Tax Yield to Maturity (CBE) for the Class XS-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 | |||||
3.8250% | 6.7386% | 6.6517% | 6.5444% | 6.3896% | 5.5540% | |||||
3.8375% | 6.6646% | 6.5776% | 6.4702% | 6.3153% | 5.4795% | |||||
3.8500% | 6.5908% | 6.5038% | 6.3964% | 6.2414% | 5.4054% | |||||
3.8625% | 6.5175% | 6.4304% | 6.3229% | 6.1678% | 5.3316% | |||||
3.8750% | 6.4444% | 6.3573% | 6.2497% | 6.0945% | 5.2582% |
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 | |||||
102.5000% | 3.8722% | 3.8722% | 3.8722% | 3.8722% | 3.8654% | |||||
102.7500% | 3.8418% | 3.8418% | 3.8418% | 3.8418% | 3.8344% | |||||
103.0000% | 3.8115% | 3.8115% | 3.8115% | 3.8115% | 3.8034% | |||||
103.2500% | 3.7812% | 3.7812% | 3.7812% | 3.7812% | 3.7726% | |||||
103.5000% | 3.7511% | 3.7511% | 3.7511% | 3.7511% | 3.7418% | |||||
Weighted Average Life (years) | 9.90 | 9.90 | 9.90 | 9.90 | 9.65 |
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 | |||||
102.5000% | 4.1728% | 4.1728% | 4.1728% | 4.1728% | 4.1660% | |||||
102.7500% | 4.1419% | 4.1419% | 4.1419% | 4.1419% | 4.1345% | |||||
103.0000% | 4.1112% | 4.1112% | 4.1112% | 4.1112% | 4.1031% | |||||
103.2500% | 4.0805% | 4.0805% | 4.0805% | 4.0805% | 4.0718% | |||||
103.5000% | 4.0499% | 4.0499% | 4.0499% | 4.0499% | 4.0406% | |||||
Weighted Average Life (years) | 9.90 | 9.90 | 9.90 | 9.90 | 9.65 |
E-2 |
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 | |||||
97.5000% | 5.0341% | 5.0345% | 5.0350% | 5.0358% | 5.0412% | |||||
97.7500% | 5.0009% | 5.0013% | 5.0018% | 5.0027% | 5.0073% | |||||
98.0000% | 4.9679% | 4.9683% | 4.9688% | 4.9696% | 4.9736% | |||||
98.2500% | 4.9349% | 4.9353% | 4.9358% | 4.9367% | 4.9400% | |||||
98.5000% | 4.9021% | 4.9025% | 4.9030% | 4.9038% | 4.9065% | |||||
Weighted Average Life (years) | 9.90 | 9.90 | 9.90 | 9.90 | 9.65 |
E-3 |
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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 thisprospectus supplement. Capitalized terms used but not otherwise defined in this Annex F will have the meanings set forth in this prospectus supplement or, if not defined in this prospectus supplement, 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.
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(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 October 21, 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 |
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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 by clause (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 Section 1001 of the Code, 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 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. |
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(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, the District of Columbia or the Commonwealth of Puerto Rico. Except with respect to any Crossed Mortgage Loan, no Mortgage Loan has a Borrower that is an Affiliate of another Borrower. (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 |
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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.
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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.
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ANNEX G-1
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES FOR
german american capital corporation MORTGAGE LOANS
Annex A-1
ID#
| Mortgage Loan | Representation | Exception |
1 | Equity Inns Portfolio | (1) Whole Loan; Ownership of Mortgage Loans | The Mortgage Loan is evidenced by a $48,000,000 original principal balance pari passu Note A-1-A, which is being contributed to the issuing entity by Ladder Capital Finance LLC, and a $32,000,000 original principal balance pari passu Note A-4-A, which is being contributed to the issuing entity by German American Capital Corporation. Each of Ladder Capital Finance LLC and German American Capital Corporation is making the representations above solely with respect to the note being contributed by it. The Mortgaged Property is also security for seven pari passu notes (Note A-1-B, Note A-2-A, Note A-2-B, Note A-3, Note A-4-B, Note A-5 and Note A-6) with an aggregate original principal balance of $152,000,000. |
35 | Walgreens VA Beach | (5) Lien; Valid Assignment and (6) Permitted Liens; Title Insurance | The sole tenant has a right of first refusal to purchase the Mortgaged Property. The sole tenant executed a subordination, non-disturbance and attornment agreement to lender, which provides that the right of first refusal shall not apply to a successor landlord through a foreclosure, deed-in-lieu of foreclosure or any other enforcement action under the Mortgage; provided, however, such right of first refusal shall apply to subsequent purchasers of the leased premises. Such right of first refusal will apply to any sale of the mortgaged property following a foreclosure or deed-in-lieu thereof. |
46 | Walgreens Frisco TX | (5) Lien; Valid Assignment and (6) Permitted Liens; Title | The sole tenant has a right of first refusal to purchase the Mortgaged |
Annex G-1-1 |
Insurance | Property. The sole tenant executed a subordination, non-disturbance and attornment agreement to lender, which provides that the right of first refusal shall not apply to a successor landlord through a foreclosure, deed-in-lieu of foreclosure or any other enforcement action under the Mortgage; provided, however, such right of first refusal shall apply to subsequent purchasers of the leased premises. Such right of first refusal will apply to any sale of the mortgaged property following a foreclosure or deed-in-lieu thereof. | ||
47 | Walgreens-Goodwill Missouri TX | (5) Lien; Valid Assignment and (6) Permitted Liens; Title Insurance | The sole tenant has a right of first refusal to purchase the Mortgaged Property. The sole tenant executed a subordination, non-disturbance and attornment agreement to lender, which provides that the right of first refusal shall not apply to a successor landlord through a foreclosure, deed-in-lieu of foreclosure or any other enforcement action under the Mortgage; provided, however, such right of first refusal shall apply to subsequent purchasers of the leased premises. Such right of first refusal will apply to any sale of the mortgaged property following a foreclosure or deed-in-lieu thereof. |
1 | Equity Inns Portfolio | (13) Actions Concerning Mortgage Loan | The non-recourse carve-out guarantor is American Realty Capital Hospitality Trust, Inc. Both the sponsor of the guarantor and the external advisor to the guarantor are 100% owned and controlled by AR Capital, LLC (“AR Capital”). The key principals and controlling parties of AR Capital are Nicholas S. Schorsch and William M. Kahane. Mr. Schorsch and certain family members are the majority owners of AR Capital. Mr. Schorsch previously served as the chairman of the board of directors of the guarantor. Mr. Kahane is currently the executive chairman of the board of directors of the guarantor. |
Annex G-1-2 |
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The mortgaged properties included in the Equity Inns Portfolio are subject to operating management agreements with wholly-owned subsidiaries of AR Capital (the “Operators”) pursuant to which the Operators are responsible for the management of the mortgaged properties. The Operators subcontract such management responsibilities under management agreements with four managers, one of which is Crestline Hotels & Resorts, which is 60% owned by AR Capital, and manages twelve of the 21 mortgaged properties. AR Capital also owns a less than 3.0% interest in each borrower.
AR Capital is the direct owner of the sponsor of 100% of American Realty Capital Hospitality Trust, Inc. and the indirect owner of 100% of the external manager of American Realty Capital Hospitality Trust, Inc. AR Capital or companies owned and controlled by AR Capital also previously externally managed American Realty Capital Properties Inc. (“ARCP”) until January 2014, when the company became self-managed. On October 29, 2014, ARCP, a real estate investment trust sponsored by AR Capital, and of which Mr. Schorsch was then the chairman, issued a press release announcing that, based on preliminary findings of ARCP’s audit committee, such committee concluded that previously issued financial statements and other financial information contained in ARCP’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and Quarterly Reports on Form 10-Q for the fiscal periods ended March 31, 2014 and June 30, 2014, and ARCP’s earnings releases and other financial communications for those periods should no longer be relied upon. The audit committee stated that it believed that ARCP incorrectly included certain amounts related to its non-controlling |
Annex G-1-3 |
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interests in the calculation of adjusted funds from operations (“AFFO”), a non-U.S. GAAP financial measure, and, as a result, overstated AFFO for certain periods. According to the press release, the audit committee believed that this error was identified but intentionally not corrected by the responsible individuals at ARCP, and other AFFO and financial statement errors were intentionally made, resulting in an overstatement of AFFO and an understatement of ARCP’s net loss for the three and six months ended June 30, 2014. As a result of these accounting irregularities, the chief financial officer and chief accounting officer resigned from ARCP. In addition, Mr. Schorsch resigned as chairman of ARCP in October 2014, and also resigned from the boards of certain other companies sponsored by AR Capital, including the guarantor.
On March 2, 2015, ARCP (which has changed its name to VEREIT, Inc.) filed amended financial statements. For year-end 2013, the net loss was increased and AFFO decreased by $0.20 per share. As part of the restatement, the audit committee identified certain payments made to ARC Properties Advisors, LLC and certain affiliates that were not appropriately documented totaling $8.5 million. Additionally, the investigation found that equity awards made to Mr. Schorsch and another former executive in connection with the transition to self-management of the company contained provisions that, as drafted, were more favorable than those approved by the Compensation Committee of the company’s Board of Directors, and also identified certain material weaknesses in the company’s internal controls over financial reporting and its disclosure controls.
ARCP has also disclosed that it is the subject of various regulatory |
Annex G-1-4 |
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investigations, including by the Securities and Exchange Commission and the U.S. Attorney’s office for the Southern District of New York. It has further been reported that ARCP is the subject of an investigation by the Federal Bureau of Investigation.
Between October 30, 2014 and January 20, 2015, ARCP, AR Capital, Mr. Schorsch, Mr. Kahane and certain other former officers and current and former directors of ARCP were named as defendants in ten securities class action complaints filed in the United States District Court for the Southern District of New York, which were subsequently consolidated under the caption In re American Realty Capital Properties, Inc. Litigation, No. 15-MC-00040 (AKH), which alleged various violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 in connection with the purchase or sale of ARCP’s securities. The complaint also included allegations of payment of inappropriate fees by ARCP to companies controlled by Mr. Schorsch. ARCP, AR Capital, their affiliates, as well as Mr. Schorsch and Mr. Kahane, have also been named in various other lawsuits related to regulatory findings and otherwise, including class actions, derivative actions and securities fraud actions. On October 27, 2015 an additional securities fraud action was filed by The Vanguard Funds against ARCP, AR Capital, and Mr. Schorsch, among other persons and entities. | |||
1 | Equity Inns Portfolio | (16) Insurance | The Mortgage Loan documents provide that if insurance is provided with multiple insurers, no less than 75% will maintain the rating of A or better by S&P (or its equivalent) with the remaining insurers maintaining no less than BBB+ by S&P (or its equivalent). |
Annex G-1-5 |
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2 | 32 Avenue of the Americas | (16) Insurance | If the Borrower elects to have the insurance policies issued by a syndicate of insurers, then, if such syndicate consists of 5 or more members, at least 60% of the insurance coverage (or 75% if such syndicate consists of 4 or fewer members) is required to be provided by insurance companies having the rating of “A” or better by S&P and each of the other rating agencies that rates the Certificates, to the extent the insurance companies are rated by such rating agencies, and the remaining 40% (or the remaining 25% if such syndicate consists of 4 or fewer members) is required to be provided by insurance companies having a claims paying ability rating of “BBB” or better by S&P and the equivalent by such other rating agencies to the extent the insurance companies are rated by such rating agencies. |
3 | 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 |
Annex G-1-6 |
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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. | |||
7 | Beach House Hilton Head | (16) Insurance | If the Borrower elects to have the insurance policies issued by a syndicate of insurers, then, if such syndicate consists of 5 or more members, at least 60% of the insurance coverage (or 75% if such syndicate consists of 4 or fewer members) is required to be provided by insurance companies having the rating of “A-” or better by S&P, and the remaining 40% (or the remaining 25% if such syndicate consists of 4 or fewer members) is required to be provided by insurance companies having a claims paying ability rating of “BBB” or better by S&P. |
35 | Walgreens VA Beach | (16) Insurance | If the sole tenant satisfies the insurance requirements under its lease, such that the insurance policies under the loan agreement are also being maintained, the Borrower’s obligation to maintain such policies is suspended unless a trigger period is in effect. In addition, the sole tenant is permitted to self-insure, provided, among other things, the tenant maintains a rating of at least “BBB+” or its equivalent by any rating agency rating the certificates, and if the sole tenant satisfies the requirements for self-insurance, the Borrower’s obligation to maintain the policies required under the loan documents is suspended. |
46 | Walgreens Frisco TX | (16) Insurance | The sole tenant may provide any insurance required to be maintained by the Borrower. The sole tenant is permitted to self-insure, provided, among other things, the tenant maintains a “BBB” rating by S&P (or an equivalent rating by another rating agency) and the sole tenant satisfies the net worth requirements under its lease (which is $100 |
Annex G-1-7 |
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million). | |||
47 | Walgreens-Goodwill Missouri TX | (16) Insurance | The sole tenant may provide any insurance required to be maintained by the Borrower. The sole tenant is permitted to self-insure, provided, among other things, the tenant maintains an “A” rating by S&P (which is the rating required under its lease for self-insurance) and the sole tenant satisfies the net worth requirements under its lease (which is $300 million). |
9 | 611 Cowper | (25) Licenses and Permits | A final certificate of occupancy has not been issued with respect to the Mortgaged Property. A temporary certificate of occupancy has been issued. |
1 | Equity Inns Portfolio | (26) Recourse Obligations | The related Loan Documents limit recourse for the borrower’s commission of material physical waste to the extent that (A) funds specifically identified to pay charges to prevent such waste were in the FF&E reserve account, the property improvement plan reserve account and/or the required repairs reserve account, as applicable, and the lender failed to pay (or make such funds available to pay) such charges unless the lender is restricted in any manner from making such funds available as a result of a legal impediment caused by any borrower or any affiliate of borrower or (B) gross revenue was insufficient to pay borrower’s operating expenses. In addition, to the extent removal or disposal of property after an event of default constitutes waste, the Loan Documents provide for recourse for such removal and disposal only if it is intentional and in violation of the loan documents. The existing guaranty provides for full recourse if the related Borrower files a voluntary bankruptcy petition. However, if the preferred equity holder exercises its remedies and takes over control of the Borrower, the replacement guaranty provides that the replacement guarantor’s liability for bankruptcy is capped at the product of (i) the original principal amount of the Mortgage Loan plus any interest accrued and |
Annex G-1-8 |
| |||
unpaid on the Mortgage Loan multiplied by (ii) 0.20. | |||
2 | 32 Avenue of the Americas | (26) Recourse Obligations | There is no guarantor and no environmental indemnitor (other than the borrower) under the Mortgage Loan.
|
3 | 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;
|
1 | Equity Inns Portfolio | (28) Financial Reporting and Rent Rolls | The related loan documents do not require the annual financial statements to include members’ capital and cash flows.
|
1 | Equity Inns Portfolio | (29) Acts of Terrorism Exclusion | The exception to representation 16 is also an exception to representation 29.
|
2 | 32 Avenue of the Americas | (29) Acts of Terrorism Exclusion | The exception to representation 16 is also an exception to representation 29.
|
3 | 11 Madison Avenue | (29) Acts of Terrorism Exclusion | The exception to representation 16 is also an exception to representation 29.
|
7 | Beach House Hilton Head | (29) Acts of Terrorism Exclusion | The exception to representation 16 is also an exception to representation 29.
|
35 | Walgreens VA Beach | (29) Acts of Terrorism | The exception to representation 16 is also an exception to |
Annex G-1-9 |
| |||
Exclusion | representation 29.
| ||
46 | Walgreens Frisco TX | (29) Acts of Terrorism Exclusion | The exception to representation 16 is also an exception to representation 29.
|
47 | Walgreens-Goodwill Missouri TX | (29) Acts of Terrorism Exclusion | The exception to representation 16 is also an exception to representation 29.
|
2 | 32 Avenue of the Americas | (31) Single-Purpose Entity | The Borrower owns 27,966 common shares of Level 3 Communications, Inc. which it acquired in connection with the bankruptcy of a prior tenant.
|
1 | Equity Inns Portfolio | (37) No Material Default; Payment Record | The borrower is in default under the franchise agreement relating to the Residence Inn-Jacksonville Mortgaged Property. The borrower and the franchisor have executed a Notice of Default and Continuing Forbearance Agreement dated October 20, 2015 pursuant to which the borrower acknowledged it was in default and the franchisor agreed to forbear from terminating the franchise agreement provided certain conditions were met. The forbearance agreement further provides that if certain conditions are not satisfied within the time periods specified therein, the franchisor may elect to terminate the franchise agreement. The loan documents provide that if any borrower defaults under any franchise agreement beyond any notice and/or cure periods thereunder, which default permits a franchisor to terminate or cancel such franchise agreement, an event of default will exist under the Mortgage Loan.
|
21 | A&H Olympic
| (39) Organization of Borrower
| The Borrowers under each Mortgage Loan are affiliates. |
Annex G-1-10 |
| |||
46
47 | Walgreens Frisco TX
Walgreens-Goodwill Missouri TX
| (39) Organization of Borrower
| The Borrowers under each Mortgage Loan are affiliates.
|
49
53
57 | Walton Shoppes
Ferndale Avenue Shoppes
Eureka Crossings
| (39) Organization of Borrower
| The Borrowers under each Mortgage Loan are affiliates.
|
1 | Equity Inns Portfolio | (43) Cross-Collateralization | The subject Mortgage Loan is cross-collateralized and cross-defaulted with Companion Loans that will be held outside the COMM 2015-LC23 commercial mortgage securitization trust.
|
2 | 32 Avenue of the Americas | (43) Cross-Collateralization | The subject Mortgage Loan is cross-collateralized and cross-defaulted with Companion Loans that will be held outside the COMM 2015-LC23 commercial mortgage securitization trust.
|
3 | 11 Madison Avenue | (43) Cross-Collateralization | The subject Mortgage Loan is cross-collateralized and cross-defaulted with Companion Loans that will be held outside the COMM 2015-LC23 commercial mortgage securitization trust.
|
Annex G-1-11 |
SCHEDULE G-1
german american capital corporation MORTGAGE
LOANS WITH EXISTING MEZZANINE DEBT
Annex A-1 ID# | Mortgage Loan | Existing Mezzanine Debt |
3 | 11 Madison Avenue | $325,000,000 |
Schedule G-1-1 |
SCHEDULE G-2
german american capital corporation MORTGAGE LOANS WITH RESPECT
TO WHICH MEZZANINE DEBT IS PERMITTED IN THE FUTURE
Annex A-1 ID# | Mortgage Loan |
2 | 32 Avenue of the Americas |
5 | Good Samaritan Medical Tower |
7 | Beach House Hilton Head |
Schedule G-2-1 |
SCHEDULE G-3
german american capital corporation CROSSED MORTGAGE LOANS
None.
Schedule G-3-1 |
ANNEX G-2
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES FOR
LADDER CAPITAL FINANCE LLC MORTGAGE LOANS
Annex A ID# | Mortgage Loan | Representation | Exception |
1 | Equity Inns Portfolio | (1) Whole Loan; Ownership of Mortgage Loans | The Mortgage Loan is evidenced by a $48,000,000 original principal balance pari passu Note A-1-A, which is being contributed to the issuing entity by Ladder Capital Finance LLC, and a $32,000,000 original principal balance pari passu Note A-4-A, which is being contributed to the issuing entity by German American Capital Corporation. Each of Ladder Capital Finance LLC and German American Capital Corporation is making the representations above solely with respect to the note being contributed by it. The Mortgaged Property is also security for seven pari passu notes (Note A-1-B, Note A-2-A, Note A-2-B, Note A-3, Note A-4-B, Note A-5 and Note A-6) with an aggregate original principal balance of $152,000,000. |
44 | 40 Wall Street | (5) Lien; Valid Assignment | The related borrower assigned to the related ground lessor all of its right, title and interest in and to the subleases and subrents thereunder. The foregoing assignment will be effective during an event of default under the related ground lease, subject to the rights of any lender to whom the related borrower has assigned such subleases and subrents so long as the lender is complying with the cure provisions of the ground lease to the extent that the event of default is susceptible of cure by the lender. After the effective date of the assignment of subleases and subrents to the related ground lessor, the related ground lessor will apply any net amounts collected by it from the subtenants to the rent or additional rent due under the ground lease. |
All Mortgage Loans transferred by LCF | (6) Permitted Liens; Title Insurance | The lien of real property taxes and assessments shall not be considered due and payable 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 is entitled to be taken by the related taxing authority. | |
1 | Equity Inns Portfolio | (6) Permitted Liens; Title Insurance | The related Mortgages secure the subject Mortgage Loan and the related Companion Loans on a pari passu basis. |
6 | Harvey Building Products Portfolio | (6) Permitted Liens; Title Insurance | The related Mortgages secure the subject Mortgage Loan and the related Companion Loans on a pari passu basis. |
Annex G-2-1 |
Annex A ID# | Mortgage Loan | Representation | Exception |
44 | 40 Wall Street | (6) Permitted Liens; Title Insurance | The related Mortgages secure the subject Mortgage Loan and the related Companion Loans on a pari passu basis. |
1 | Equity Inns Portfolio | (8) Assignment of Leases, Rents and Profits | The related Mortgages and any related assignments of leases secure the subject Mortgage Loan and the related Companion Loans on a pari passu basis. |
6 | Harvey Building Products Portfolio | (8) Assignment of Leases, Rents and Profits | The related Mortgages and any related assignments of leases secure the subject Mortgage Loan and the related Companion Loans on a pari passu basis. |
44 | 40 Wall Street | (8) Assignment of Leases, Rents and Profits | The related borrower assigned to the related ground lessor all of its right, title and interest in and to the subleases and subrents thereunder. The foregoing assignment will be effective during an event of default under the related ground lease, subject to the rights of any lender to whom the related borrower has assigned such subleases and subrents so long as the lender is complying with the cure provisions of the ground lease to the extent that the event of default is susceptible of cure by the lender. After the effective date of the assignment of subleases and subrents to the related ground lessor, the related ground lessor will apply any net amounts collected by it from the subtenants to the rent or additional rent due under the ground lease.
In addition, the related Mortgages and any related assignments of leases secure the subject Mortgage Loan and the related Companion Loans on a pari passu basis.
|
1 | Equity Inns Portfolio | (13) Actions Concerning Mortgage Loan | The non-recourse carve-out guarantor is American Realty Capital Hospitality Trust, Inc. Both the sponsor of the guarantor and the external advisor to the guarantor are 100% owned and controlled by AR Capital, LLC (“AR Capital”). The key principals and controlling parties of AR Capital are Nicholas S. Schorsch and William M. Kahane. Mr. Schorsch and certain family members are the majority owners of AR Capital. Mr. Schorsch previously served as the chairman of the board of directors of the guarantor. Mr. Kahane is currently the executive chairman of the board of directors of the guarantor.
The mortgaged properties included in the Equity Inns Portfolio are subject to operating management agreements with wholly-owned subsidiaries of AR |
Annex G-2-2 |
Annex A ID# | Mortgage Loan | Representation | Exception |
Capital (the “Operators”) pursuant to which the Operators are responsible for the management of the mortgaged properties. The Operators subcontract such management responsibilities under management agreements with four managers, one of which is Crestline Hotels & Resorts, which is 60% owned by AR Capital, and manages twelve of the 21 mortgaged properties. AR Capital also owns a less than 3.0% interest in each borrower.
AR Capital is the direct owner of 100% of the sponsor of American Realty Capital Hospitality Trust, Inc. and the indirect owner of 100% of the external manager of American Realty Capital Hospitality Trust, Inc. AR Capital or companies owned and controlled by AR Capital also previously externally managed American Realty Capital Properties Inc. (“ARCP”) until January 2014, when the company became self-managed. On October 29, 2014, ARCP, a real estate investment trust sponsored by AR Capital, and of which Mr. Schorsch was then the chairman, issued a press release announcing that, based on preliminary findings of ARCP’s audit committee, such committee concluded that previously issued financial statements and other financial information contained in ARCP’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and Quarterly Reports on Form 10-Q for the fiscal periods ended March 31, 2014 and June 30, 2014, and ARCP’s earnings releases and other financial communications for those periods should no longer be relied upon. The audit committee stated that it believed that ARCP incorrectly included certain amounts related to its non-controlling interests in the calculation of adjusted funds from operations (“AFFO”), a non-U.S. GAAP financial measure, and, as a result, overstated AFFO for certain periods. According to the press release, the audit committee believed that this error was identified but intentionally not corrected by the responsible individuals at ARCP, and other AFFO and financial statement errors were intentionally made, resulting in an overstatement of AFFO and an understatement of ARCP’s net loss for the three and six months ended June 30, 2014. As a result of these accounting irregularities, the chief financial officer and chief accounting officer resigned from ARCP. In addition, Mr. Schorsch resigned as chairman of ARCP in October 2014, and also resigned from the boards of certain other companies sponsored by AR Capital, including the
|
Annex G-2-3 |
Annex A ID# | Mortgage Loan | Representation | Exception |
guarantor.
| |||
On March 2, 2015, ARCP (which has changed its name to VEREIT, Inc.) filed amended financial statements. For year-end 2013, the net loss was increased and AFFO decreased by $0.20 per share. As part of the restatement, the audit committee identified certain payments made to ARC Properties Advisors, LLC and certain affiliates that were not appropriately documented totaling $8.5 million. Additionally, the investigation found that equity awards made to Mr. Schorsch and another former executive in connection with the transition to self-management of the company contained provisions that, as drafted, were more favorable than those approved by the Compensation Committee of the company’s Board of Directors, and also identified certain material weaknesses in the company’s internal controls over financial reporting and its disclosure controls.
ARCP has also disclosed that it is the subject of various regulatory investigations, including by the Securities and Exchange Commission and the U.S. Attorney’s office for the Southern District of New York. It has further been reported that ARCP is the subject of an investigation by the Federal Bureau of Investigation.
Between October 30, 2014 and January 20, 2015, ARCP, AR Capital, Mr. Schorsch, Mr. Kahane and certain other former officers and current and former directors of ARCP were named as defendants in ten securities class action complaints filed in the United States District Court for the Southern District of New York, which were subsequently consolidated under the caption In re American Realty Capital Properties, Inc. Litigation, No. 15-MC-00040 (AKH), which alleged various violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 in connection with the purchase or sale of ARCP’s securities. The complaint also included allegations of payment of inappropriate fees by ARCP to companies controlled by Mr. Schorsch. ARCP, AR Capital, their affiliates, as well as Mr. Schorsch and Mr. Kahane, have also been named in various other lawsuits related to regulatory findings and otherwise, including class actions, derivative actions and securities fraud actions. On October 27, 2015 an additional securities fraud action was filed by The Vanguard Funds against ARCP, AR Capital, and Mr. Schorsch, among other persons |
Annex G-2-4 |
Annex A ID# | Mortgage Loan | Representation | Exception |
and entities.
| |||
44 | 40 Wall Street | (13) Actions Concerning Mortgage Loan | The sponsor of the related borrower, Donald J. Trump, is subject to current litigation brought by multiple plaintiffs in New York and California who allege that he operated an unlicensed, illegal educational institution purporting to teach real estate strategies and techniques. The educational institution has ceased conducting business. |
All Mortgage Loans transferred by LCF | (16) Insurance | The exceptions to Representation and Warranty No. 29, relating to terrorism insurance, are also exceptions to Representation and Warranty No. 16. | |
1 | Equity Inns Portfolio | (16) Insurance | The Mortgage Loan documents provide that if insurance is provided with multiple insurers, no less than 75% will maintain the rating of A or better by S&P (or its equivalent) with the remaining insurers maintaining no less than BBB+ by S&P (or its equivalent). |
4 | 1209 DeKalb | (16) Insurance | For multi-layered policies, if four or fewer insurance companies issue the policies, then at least 75% of the insurance coverage represented by the policies must be provided by insurance companies with a claims paying ability rating of “A” or better by S&P, with no carrier below “BBB” or if five (5) or more insurance companies issue the policies, then at least sixty percent (60%) of the insurance coverage represented by the policies must be provided by insurance companies with a claims paying ability rating of “A” or better by S&P, with no carrier below “BBB.” |
6 | Harvey Building Products Portfolio | (16) Insurance | The Mortgage Loan documents require that any trustee appointed by the lender to hold and disburse insurance proceeds must be acceptable to the borrower and the single tenant, Harvey Industries.
The sole tenant at each related Mortgaged Property is permitted to self-insure.
|
24
58
59
60
61
| BJs Montgomeryville
Family Dollar - Rose Hill
Family Dollar – Moultrie
Family Dollar – Biscoe
Family Dollar – | (16) Insurance | The sole tenant at each Mortgaged Property is permitted to self-insure, provided, among other things, that the related tenant’s lease is in full force and effect and the related tenant is not entitled to a period of rent abatement. The borrower is required to maintain insurance required to be maintained pursuant to the related loan documents to the extent not maintained by such tenant. |
Annex G-2-5 |
Annex A ID# | Mortgage Loan | Representation | Exception |
62 | Rockingham
Dollar General - De Soto | ||
33 | Best Buy Boca Raton | (16) Insurance | The sole tenant at the related Mortgaged Property is permitted to self-insure, provided, among other things, that such tenant maintains a net worth of not less than $100,000,000.00. |
44 | 40 Wall Street | (16) Insurance | The exceptions to Representation and Warranty No. 34, relating to insurance proceeds, are also an exception to Representation and Warranty No. 16. |
6 | Harvey Building Products Portfolio | (24) Local Law Compliance | The Bethlehem Mortgaged Property is legal, non-conforming as to use. Following a casualty or condemnation, the Bethlehem Mortgaged Property may be rebuilt if the exterior structure is properly secured following the damage or destruction and reconstruction begins within 12 months of the date of such damage or destruction.
The Norwalk Mortgaged Property is legal, non-conforming as to use. If 50% or more of the Norwalk Mortgaged Property is destroyed, such Mortgaged Property could only be rebuilt with a special use permit.
The following Mortgage Properties are legal, non-conforming due to parking deficiencies. The related loan documents require the borrower to remedy such parking deficiencies within 180 days of the origination date of the Mortgage Loan, subject to additional time if a permit is required so long as the borrower is diligently pursuing such remedy.
· The Manchester, CT Mortgaged Property is deficient by 8 parking spaces.
· The New London Mortgaged Property is deficient by 26 parking spaces.
· The Auburn Mortgaged Property is deficient by 11 parking spaces.
· The Springfield Mortgaged Property is deficient by 7 parking spaces.
· The West Bridgewater Mortgaged Property is deficient by 1 parking space.
|
Annex G-2-6 |
Annex A ID# | Mortgage Loan | Representation | Exception |
· The Portland Mortgaged Property is deficient by 16 parking spaces.
· The Manchester, NH Mortgaged Property is deficient by 11 parking spaces.
· The Nashua Mortgaged Property is deficient by 14 parking spaces.
· The White River Junction Mortgaged Property is deficient by 5 parking spaces.
| |||
44 | 40 Wall Street | (24) Local Law Compliance | The related Mortgaged Property is legal nonconforming. The nonconforming characteristics are as follows: (i) the FAR exceeds the requirement by approximately 15.89; and (ii) the building appears to exceed the lot coverage above the maximum base height. Additionally, information was not available to determine compliance with the maximum horizontal dimension requirement or the minimum front setback requirement but if these items are determined to be deficient as well, the related Mortgaged Property will still be deemed to be legal nonconforming. If less than 75% of the total floor area of the building is destroyed, the related borrower may restore the building to its prior condition. |
52 | Monte & Wishing Well | (24) Local Law Compliance | The Wishing Well Mortgaged Property is legal, non-conforming as to use. If more than 50% of the mobile homes are destroyed, the tenant is not permitted to rebuild. However, the zoning report references email correspondence with the municipality confirming that if a mobile home is destroyed by more than 50%, the tenant will be permitted to either (i) rebuild with the mobile home manufacturer’s approval or (ii) replace the mobile home entirely. The Mortgaged Property would lose its right to operate as a mobile home park if the park discontinued operations for more than a year. The loan documents include a non-recourse carveout for losses related to the borrower’s inability to rebuild a mobile home to the same condition and character following a casualty or condemnation. |
55 | Bayonne MHP | (24) Local Law Compliance | The Mortgaged Property is legal non-conforming as to use. If more than 50% of the mobile homes are destroyed, a zoning variance would be required in order to rebuild. The loan documents include a non-recourse carveout for losses related to the borrower’s inability to rebuild following a casualty. |
Annex G-2-7 |
Annex A ID# | Mortgage Loan | Representation | Exception |
All Mortgage Loans transferred by LCF | (26) Recourse Obligations | The related Loan Documents may limit recourse for the related Borrower’s commission of material physical waste only to the extent that: (i) such waste was intentional; and/or (ii) there is sufficient cash flow from the related Mortgaged Property to make the requisite payments to prevent the waste. Also, misapplication (as opposed to misappropriation or conversion) of insurance proceeds, condemnation awards and/or rents following an event of default may not give rise to recourse. | |
1 | Equity Inns Portfolio | (26) Recourse Obligations | The related Loan Documents limit recourse for the borrower’s commission of material physical waste to the extent that (A) funds specifically identified to pay charges to prevent such waste were in the FF&E reserve account, the property improvement plan reserve account and/or the required repairs reserve account, as applicable, and the lender failed to pay (or make such funds available to pay) such charges unless the lender is restricted in any manner from making such funds available as a result of a legal impediment caused by any borrower or any affiliate of borrower or (B) gross revenue was insufficient to pay borrower’s operating expenses. In addition, to the extent removal or disposal of property after an event of default constitutes waste, the Loan Documents provide for recourse for such removal and disposal only if it is intentional and in violation of the loan documents.
The existing guaranty provides for full recourse if the related Borrower files a voluntary bankruptcy petition. However, if the preferred equity holder exercises its remedies and takes over control of the Borrower, the replacement guaranty provides that the replacement guarantor’s liability for bankruptcy is capped at the product of (i) the original principal amount of the Mortgage Loan plus any interest accrued and unpaid on the Mortgage Loan multiplied by (ii) 0.20.
|
All Mortgage Loans transferred by LCF | (27) Mortgage Releases | If the loan-to-value ratio of the related Mortgaged Property following a condemnation exceeds 125%, the related Borrower may be able to avoid having to pay down the subject Mortgage Loan if it delivers an opinion of counsel to the effect that the failure to make such pay down will not cause the REMIC holding the subject Mortgage Loan to fail to qualify as such. |
Annex G-2-8 |
Annex A ID# | Mortgage Loan | Representation | Exception |
44 | 40 Wall Street | (27) Mortgage Releases | With respect to the subject Mortgage Loan, under the related ground lease, condemnation proceeds must first be applied to restore the related Mortgaged Property before they can be used to pay down the subject Mortgage Loan; however, the related loan documents require that the related borrower, regardless of whether condemnation proceeds are available, pay down the subject Mortgage Loan in an amount as required by REMIC rules. |
All Mortgage Loans transferred by LCF | (28) Financial Reporting and Rent Rolls | The related Loan Documents, in each case, do not require the financial statements of the co-mortgagors to be combined. Also, mortgagor reporting obligations may be in the related loan agreement instead of the mortgage. | |
6 | Harvey Building Products Portfolio | (28) Financial Reporting | The loan documents do not require the borrower to provide annual operating statements. |
58
59
60
61
62 | Family Dollar - Rose Hill
Family Dollar – Moultrie
Family Dollar – Biscoe
Family Dollar – Rockingham
Dollar General - De Soto | (28) Financial Reporting and Rent Rolls | The related loan documents provide that, so long as the tenant’s lease is a triple-net tenant lease, the Borrower’s delivery of a certified rent roll is sufficient to satisfy the requirement to deliver annual operating statements and annual financial statements. |
1 | Equity Inns Portfolio | (28) Financial Reporting and Rent Rolls | The related loan documents do not require the annual financial statements to include members’ capital and cash flows. |
All Mortgage Loans transferred by LCF | (29) Acts of Terrorism Exclusion | Except with respect to Mortgage Loans where terrorism insurance is not required or where a tenant is permitted to self-insure, if any of the Policies (as defined in the related loan agreement) contain exclusions for loss, cost, damage or liability caused by “terrorism” or “terrorist acts” (“Acts of Terrorism”), the Borrower must obtain and maintain terrorism coverage to cover such exclusions from a Qualified Carrier (as defined in the related loan agreement) or, in the event that such terrorism coverage is not available from a Qualified Carrier, the related Borrower must obtain such terrorism coverage from the highest rated insurance company providing such terrorism coverage. In addition, subject to the other exceptions to the Representation and Warranty No. 29, even where |
Annex G-2-9 |
Annex A ID# | Mortgage Loan | Representation | Exception |
terrorism insurance is required, the related Borrower may not be required to pay more for terrorism insurance coverage than a specified percentage (at least equal to 200%) of the amount of the insurance premium for the property insurance policy required under the related Loan Documents (excluding such terrorism coverage and coverage for other catastrophe perils such as flood, windstorm and earthquake), and if the cost of such 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. | |||
1 | Equity Inns Portfolio | (29) Acts of Terrorism Exclusion | The exception to representation 16 is also an exception to representation 29. |
All Mortgage Loans transferred by LCF | (30) Due on Sale or Encumbrance | Any pledge of a direct or indirect equity interest in the related Borrower would be permitted if the transfer of such equity interest to the pledgee would be a permitted transfer under the terms of Representation and Warranty No. 30 or as contemplated by any other exception to Representation and Warranty No. 30 set forth herein. In addition, mergers, acquisitions and other business combinations involving a publicly traded company may be permitted; and, for certain Mortgage Loans, transfers, sales and pledges of direct or indirect equity interests in the related Borrower may be permitted if such equity interests are limited partnership interests, non-managing member interests in a limited liability company or other passive equity interests. | |
6 | Harvey Building Products Portfolio | (30) Due on Sale or Encumbrance | Direct or indirect interests in the guarantor may be pledged to secure corporate level financing, so long as the value of the Mortgaged Property is not, and is not intended at any time to be (including through operation of collateral release provisions), more than 25% of the value of all security for such corporate level financing.
Upper tier entity interests in the borrower may be sold to a transferee that has $300,000,000 of assets and a net worth of $100,000,000. |
58
59
60
| Family Dollar - Rose Hill
Family Dollar – Moultrie
Family Dollar – Biscoe
Family Dollar – | (30) Due on Sale or Encumbrance | The related loan documents permit transfers of direct or indirect interests in the Borrower to certain affiliates of Ladder Capital Finance Holdings LLLP without the consent of the lender. |
Annex G-2-10 |
Annex A ID# | Mortgage Loan | Representation | Exception |
61
62 | Rockingham
Dollar General - De Soto | ||
44 | 40 Wall Street | (34) Ground Leases | Under the related ground lease, insurance proceeds must be applied to restoration of the related Mortgaged Property, with any excess after such restoration being paid to the related borrower. Upon a total taking or a taking of substantially all of the demised premises, condemnation awards will be paid as follows: (i) first, to each of the parties on account of their respective reasonable costs of collection of the award; (ii) second, to the related landlord, the sum of $12,000,000, which sum will be increased (but not decreased) by the same percentage increase in the net annual, when determined on 1/1/33, 1/1/2058 and every 25 years thereafter; (iii) third, to the holders of all leasehold mortgages, in order of their seniority, the outstanding amount of their respective leasehold mortgages; (iv) fourth, to the related borrower to the extent that the then depreciated value of any improvements to the demised premises made by the related borrower exceeds the amount paid to the holders of leasehold mortgages; then, the balance is to be divided between the related landlord and tenant in accordance with the value attributed to their respective interests after giving effect to the sums paid to the landlord and the holders of all leasehold mortgages. If less than substantially all of the of the demised premises is taken, all of the awards collected by the landlord or the depositary will be held by the landlord or at the related borrower’s option, by the trustee, and applied toward the cost of restoration, substantially in the same manner and subject to the same conditions as those provided for a restoration after a casualty. Any balance remaining after the restoration will be retained by the landlord and the net rent adjusted.
All insurance proceeds and condemnations awards, will be held by the related ground lessor or, at the election of the related borrower, a “Qualified Bank,” i.e., a bank or trust company having a capital and surplus of not less than an amount equal to the product of $100,000,000 times a fraction, the numerator of which is the Index (i.e., the “Consumer Price Index Cities, All-Item Figures, For All Urban Consumers, N.Y., N.Y. – Northeastern, N.JU.” (1982-84=100), issued by the Bureau of Labor Statistics of the U.S. Department of Labor) in effect for the month immediately |
Annex G-2-11 |
Annex A ID# | Mortgage Loan | Representation | Exception |
preceding the month in which the funds are deposited with the Qualified Bank and the denominator of which is the Index in effect for the month of November 1995. The related borrower is required under the related loan documents to elect to have a Qualified Bank hold the proceeds or awards. | |||
There is no prohibition on the assignment of the ground lease so long as (a) all real estate taxes, water charges and sewer rents and all interest and penalties have been paid on or before the last date the same may be paid without interest or penalties, (b) tenant completed (i) the installation of existing replacement windows within 1 year after November 30, 1995 and (ii) elevator repairs within 2 years after November 30, 1995 to (x) 75% of the elevators existing on November 30, 1995 if tenant elects to renovate the building as an office building or (y) if tenant elects to renovate the building as a residential/commercial building, only those elevators deemed by tenant to be necessary to operate the building and (c) tenant discharged any mechanic’s, laborer’s or materialman’s lien existing against the demised premises as of November 30, 1995 until the earlier of (i) 2 years from such date or (ii) not later than 30 days prior to any scheduled foreclosure sale of the demised premises by reason of the obtaining of judgment by the holder of such lien. All of the items in clause (a) are current. The related loan documents contain a representation from the related borrower that the obligations set forth in clauses (b) and (c) have been completed. A ground lessor estoppel was delivered at origination of the subject Mortgage Loan certifying that to ground lessor’s knowledge there has been no default or event which, with the giving of notice or the passing of time or both, would constitute a default or event of default by the ground lessee under the ground lease. | |||
1 | Equity Inns Portfolio | (37) No Material Default; Payment Record | The borrower is in default under the franchise agreement relating to the Residence Inn-Jacksonville Mortgaged Property. The borrower and the franchisor have executed a Notice of Default and Continuing Forbearance Agreement dated October 20, 2015 pursuant to which the borrower acknowledged it was in default and the franchisor agreed to forbear from terminating the franchise agreement provided certain conditions were met. The forbearance agreement further provides that if certain conditions are not satisfied within the time periods specified therein, the |
Annex G-2-12 |
Annex A ID# | Mortgage Loan | Representation | Exception |
franchisor may elect to terminate the franchise agreement. The loan documents provide that if any borrower defaults under any franchise agreement beyond any notice and/or cure periods thereunder, which default permits a franchisor to terminate or cancel such franchise agreement, an event of default will exist under the Mortgage Loan. | |||
58
59
60
62 | Family Dollar - Rose Hill
Family Dollar – Moultrie
Family Dollar – Biscoe
Family Dollar – Rockingham
Dollar General - De Soto | (39) Organization of Borrower | The borrowers under these Mortgage Loans are affiliated. |
11
29
39
50
| Laguna Niguel Town Center
Ortega Village - Retail
High Country Plaza
Ortega Village – Pads | (39) Organization of Borrower | The borrowers under these Mortgage Loans are affiliated. |
1 | Equity Inns Portfolio | (43) Cross-Collateralization | The subject Mortgage Loan is cross-collateralized and cross-defaulted with Companion Loans that will be held outside the COMM 2015-LC23 commercial mortgage securitization trust. |
6 | Harvey Building Products Portfolio | (43) Cross-Collateralization | The subject Mortgage Loan is cross-collateralized and cross-defaulted with Companion Loans that will be held outside the COMM 2015-LC23 commercial mortgage securitization trust. |
44 | 40 Wall Street | (43) Cross-Collateralization | The subject Mortgage Loan is cross-collateralized and cross-defaulted with Companion Loans that will be held outside the COMM 2015-LC23 commercial mortgage securitization trust. |
Annex G-2-13 |
SCHEDULE G-1
LADDER CAPITAL FINANCE LLC MORTGAGE
LOANS WITH EXISTING MEZZANINE DEBT
Annex A-1 ID# | Mortgage Loan | Existing Mezzanine Debt |
4 | 1209 DeKalb | $8,500,000 |
Schedule G-1-1 |
SCHEDULE G-2
LADDER CAPITAL FINANCE LLC MORTGAGE LOANS WITH RESPECT
TO WHICH MEZZANINE DEBT IS PERMITTED IN THE FUTURE
Annex A-1 ID# | Mortgage Loan |
4 | 1209 DeKalb |
32 | 75 Executive Drive |
38 | Monument Creek |
58 | Family Dollar - Rose Hill |
59 | Family Dollar – Moultrie |
60 | Family Dollar – Biscoe |
61 | Family Dollar – Rockingham |
62 | Dollar General - De Soto |
Schedule G-2-1 |
SCHEDULE G-3
LADDER CAPITAL FINANCE LLC CROSSED MORTGAGE LOANS
None.
Schedule G-3-1 |
ANNEX G-3
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES FOR
CANTOR COMMERCIAL REAL ESTATE LENDING, L.P. MORTGAGE LOANS
Annex A ID# | Mortgage Loan | Representation | Exception |
10 | Springfield Mall | (6) Permitted Liens; Title Insurance | The Mortgaged Property is subject to an agreement pursuant to which a tenant (Macy’s) must consent to the Borrowers’ execution of any mortgage and be sent a copy of the mortgage at least 30 days prior to closing. The Borrowers executed the Mortgage without delivering a copy of the Mortgage to this tenant or obtaining tenant’s consent to the Mortgage. The Mortgage Loan is recourse to the Borrowers and Guarantors for losses associated with the failure to satisfy the consent requirement under the agreement.
The Mortgaged Property is subject to an agreement limiting its use to a retail shopping mall. |
28 | Biltmore Parks Apartments | (6) Permitted Liens; Title Insurance | The Mortgaged Property is subject to an agreement limiting its use to multifamily housing purposes. |
28 | Biltmore Parks Apartments | (24) Local Law Compliance | The Mortgaged Property is deficient by 30 parking spaces. If the Mortgaged Property is damaged in any manner to the extent of 50% of the replacement cost, it will need to be rebuilt to conform with the parking requirements. The Borrowers obtained Law and Ordinance coverage. |
10 | Springfield Mall | (26) Recourse Obligations | The Mortgage Loan is not recourse to the Guarantor or Borrower for losses resulting from material physical waste. |
28 | Biltmore Parks Apartments | (26) Recourse Obligations | The Mortgage Loan provides for recourse for misapplication or misappropriation of rents only during the existence of a monetary Event of Default (as defined in the Loan Documents) or following written notice of, and during the existence of, a non-monetary Event of Default or if such rents are paid more than one month in advance. In addition, the Mortgage Loan provides for recourse for material physical waste of the Mortgaged Property unless the failure to pay for repairs or replacements of the Mortgaged Property is solely due to the insufficiency of income from the then-current operation of the Mortgaged Property. |
Annex G-3-1 |
12 | Hacienda Gardens | (31) Single-Purpose Entity | The Borrower was not required to deliver a non-consolidation opinion in connection with the origination of the Mortgage Loan. |
54 | Courtyard Self Storage | (38) Organization of Borrower | The Borrower is a limited liability company organized under the laws of the United States Virgin Islands. |
10 | Springfield Mall | (43) Cross-Collateralization | The Mortgage Loan is evidenced by a $32,460,817 pari passu Note A-1. The Mortgaged Property is also security for a pari passu Note A-2. The notes are cross-collateralized and cross defaulted with each other. |
Annex G-3-2 |
SCHEDULE G-1
CANTOR COMMERCIAL REAL ESTATE LENDING, L.P.
MORTGAGE LOANS WITH EXISTING MEZZANINE DEBT
None.
Schedule G-1-1 |
SCHEDULE G-2
CANTOR COMMERCIAL REAL ESTATE LENDING, L.P. MORTGAGE LOANS WITH RESPECT
TO WHICH MEZZANINE DEBT IS PERMITTED IN THE FUTURE
None.
Schedule G-2-1 |
SCHEDULE G-3
CANTOR COMMERCIAL REAL ESTATE LENDING, L.P. CROSSED MORTGAGE LOANS
None.
Schedule G-3-1 |
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
ANNEX G-4
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES FOR
JEFFERIES LOANCORE LLC MORTGAGE LOANS
Annex A-1 ID# | Mortgage Loans | Representations | Exceptions |
51 | 691 14th Street Retail | (16) Insurance | The Mortgage Loan documents permit the Borrower to rely on insurance coverage provided by the Condominium Association (as defined in the Mortgage Loan documents) to satisfy the Borrower’s insurance requirements relating to the Building and the Common Elements (as defined in the Mortgage Loan documents) provided that the Borrower has provided satisfactory evidence that the Condominium Association is maintaining in full force and effect the insurance coverage required under the Mortgage Loan documents. However, the Condominium Association has the right to hold and disburse such proceeds and decide whether to apply the same to the repair or restoration of the Building and the Common Elements. |
8 | Whitehall Hotel | (31) Single-Purpose Entity | The Borrower is a recycled single-purpose entity that previously owned three adjacent parcels which were transferred to an affiliate of the Borrower prior to the origination of the Mortgage Loan. One of those parcels is listed on a leaking underground storage tank database (the “Database Parcel”). The owner of the Database Parcel has agreed to remediate such parcel in the event required under environmental laws and to indemnify the Borrower for any loss related to the related remediation. In addition, the Mortgage Loan is recourse to the guarantor for all costs related to the adjacent parcel being listed on the database and for any related cleanup not covered by the current owner of the Database Parcel. |
Annex G-4-1 |
SCHEDULE G-1
JEFFERIES LOANCORE LLC MORTGAGE
LOANS WITH EXISTING MEZZANINE DEBT
Annex A-1 ID# | Mortgage Loan | Original Principal Amount of Existing Mezzanine Debt |
22 | Brentwood Retail Center | $2,000,000 |
Schedule G-1-1 |
SCHEDULE G-2
JEFFERIES LOANCORE MORTGAGE LOANS WITH RESPECT
TO WHICH MEZZANINE DEBT IS PERMITTED IN THE FUTURE
None.
Schedule G-2-1 |
SCHEDULE G-3
JEFFERIES LOANCORE LLC CROSSED MORTGAGE LOANS
None.
Schedule G-3-1 |
ANNEX H
CLASS XP-A COMPONENT NOTIONAL AMOUNTS(1)
Period Ending(2) | Class A-1 | Class A-2 | Class A-SB | Class A-3 | Class A-4 | Class A-M | Total(3) | |||||||
11/17/2015 | $39,109,000.00 | $210,190,000.00 | $53,371,000.00 | $125,000,000.00 | $244,968,000.00 | $61,258,000.00 | $733,896,000.00 | |||||||
12/10/2015 | $29,502,000.00 | $210,190,000.00 | $53,371,000.00 | $125,000,000.00 | $244,968,000.00 | $61,258,000.00 | $724,289,000.00 | |||||||
1/10/2016 | $24,277,000.00 | $210,190,000.00 | $53,371,000.00 | $125,000,000.00 | $244,968,000.00 | $61,258,000.00 | $719,064,000.00 | |||||||
2/10/2016 | $19,088,000.00 | $210,190,000.00 | $53,371,000.00 | $125,000,000.00 | $244,968,000.00 | $61,258,000.00 | $713,875,000.00 | |||||||
3/10/2016 | $13,839,000.00 | $210,190,000.00 | $53,371,000.00 | $125,000,000.00 | $244,968,000.00 | $61,258,000.00 | $708,626,000.00 | |||||||
4/10/2016 | $8,723,000.00 | $210,190,000.00 | $53,371,000.00 | $125,000,000.00 | $244,968,000.00 | $61,258,000.00 | $703,510,000.00 | |||||||
5/10/2016 | $3,595,000.00 | $210,190,000.00 | $53,371,000.00 | $125,000,000.00 | $244,968,000.00 | $61,258,000.00 | $698,382,000.00 | |||||||
6/10/2016 | - | $208,740,000.00 | $53,371,000.00 | $125,000,000.00 | $244,968,000.00 | $61,258,000.00 | $693,337,000.00 | |||||||
7/10/2016 | - | $203,684,000.00 | $53,371,000.00 | $125,000,000.00 | $244,968,000.00 | $61,258,000.00 | $688,281,000.00 | |||||||
8/10/2016 | - | $198,709,000.00 | $53,371,000.00 | $125,000,000.00 | $244,968,000.00 | $61,258,000.00 | $683,306,000.00 | |||||||
9/10/2016 | - | $193,769,000.00 | $53,371,000.00 | $125,000,000.00 | $244,968,000.00 | $61,258,000.00 | $678,366,000.00 | |||||||
10/10/2016 | - | $149,261,000.00 | $53,371,000.00 | $125,000,000.00 | $244,968,000.00 | $61,258,000.00 | $633,858,000.00 | |||||||
11/10/2016 | - | $144,582,000.00 | $53,371,000.00 | $125,000,000.00 | $244,968,000.00 | $61,258,000.00 | $629,179,000.00 | |||||||
12/10/2016 | - | $139,892,000.00 | $53,371,000.00 | $125,000,000.00 | $244,968,000.00 | $61,258,000.00 | $624,489,000.00 | |||||||
1/10/2017 | - | $135,278,000.00 | $53,371,000.00 | $125,000,000.00 | $244,968,000.00 | $61,258,000.00 | $619,875,000.00 | |||||||
2/10/2017 | - | $130,697,000.00 | $53,371,000.00 | $125,000,000.00 | $244,968,000.00 | $61,258,000.00 | $615,294,000.00 | |||||||
3/10/2017 | - | $126,018,000.00 | $53,371,000.00 | $125,000,000.00 | $244,968,000.00 | $61,258,000.00 | $610,615,000.00 | |||||||
4/10/2017 | - | $121,501,000.00 | $53,371,000.00 | $125,000,000.00 | $244,968,000.00 | $61,258,000.00 | $606,098,000.00 | |||||||
5/10/2017 | - | $116,972,000.00 | $53,371,000.00 | $125,000,000.00 | $244,968,000.00 | $61,258,000.00 | $601,569,000.00 | |||||||
6/10/2017 | - | $112,518,000.00 | $53,371,000.00 | $125,000,000.00 | $244,968,000.00 | $61,258,000.00 | $597,115,000.00 | |||||||
7/10/2017 | - | $108,054,000.00 | $53,371,000.00 | $125,000,000.00 | $244,968,000.00 | $61,258,000.00 | $592,651,000.00 | |||||||
8/10/2017 | - | $103,662,000.00 | $53,371,000.00 | $125,000,000.00 | $244,968,000.00 | $61,258,000.00 | $588,259,000.00 | |||||||
9/10/2017 | - | $60,139,000.00 | $53,371,000.00 | $125,000,000.00 | $244,968,000.00 | $61,258,000.00 | $544,736,000.00 | |||||||
10/10/2017 | - | $56,011,000.00 | $53,371,000.00 | $125,000,000.00 | $244,968,000.00 | $61,258,000.00 | $540,608,000.00 | |||||||
11/10/2017 | - | $47,611,000.00 | $53,371,000.00 | $125,000,000.00 | $244,968,000.00 | $61,258,000.00 | $532,208,000.00 | |||||||
12/10/2017 | - | - | $53,371,000.00 | $62,265,000.00 | $244,968,000.00 | $61,258,000.00 | $421,862,000.00 | |||||||
1/10/2018 | - | - | $53,371,000.00 | $320,000.00 | $244,968,000.00 | $61,258,000.00 | $359,917,000.00 | |||||||
2/10/2018 | - | - | $53,371,000.00 | - | $242,081,000.00 | $61,258,000.00 | $356,710,000.00 | |||||||
3/10/2018 | - | - | $53,371,000.00 | - | $238,771,000.00 | $61,258,000.00 | $353,400,000.00 | |||||||
4/10/2018 | - | - | $53,371,000.00 | - | $235,609,000.00 | $61,258,000.00 | $350,238,000.00 | |||||||
5/10/2018 | - | - | $53,371,000.00 | - | $232,428,000.00 | $61,258,000.00 | $347,057,000.00 | |||||||
6/10/2018 | - | - | $53,371,000.00 | - | $229,311,000.00 | $61,258,000.00 | $343,940,000.00 | |||||||
7/10/2018 | - | - | $53,371,000.00 | - | $226,175,000.00 | $61,258,000.00 | $340,804,000.00 | |||||||
8/10/2018 | - | - | $53,371,000.00 | - | $223,101,000.00 | $61,258,000.00 | $337,730,000.00 | |||||||
9/10/2018 | - | - | $53,371,000.00 | - | $220,049,000.00 | $61,258,000.00 | $334,678,000.00 | |||||||
10/10/2018 | - | - | $53,371,000.00 | - | $216,960,000.00 | $61,258,000.00 | $331,589,000.00 | |||||||
11/10/2018 | - | - | $53,371,000.00 | - | $213,915,000.00 | $61,258,000.00 | $328,544,000.00 | |||||||
12/10/2018 | - | - | $53,371,000.00 | - | $210,847,000.00 | $61,258,000.00 | $325,476,000.00 | |||||||
1/10/2019 | - | - | $53,371,000.00 | - | $207,845,000.00 | $61,258,000.00 | $322,474,000.00 | |||||||
2/10/2019 | - | - | $53,371,000.00 | - | $204,863,000.00 | $61,258,000.00 | $319,492,000.00 | |||||||
3/10/2019 | - | - | $53,371,000.00 | - | $201,776,000.00 | $61,258,000.00 | $316,405,000.00 | |||||||
4/10/2019 | - | - | $53,371,000.00 | - | $198,836,000.00 | $61,258,000.00 | $313,465,000.00 | |||||||
5/10/2019 | - | - | $53,371,000.00 | - | $195,876,000.00 | $61,258,000.00 | $310,505,000.00 | |||||||
6/10/2019 | - | - | $53,371,000.00 | - | $192,978,000.00 | $61,258,000.00 | $307,607,000.00 | |||||||
7/10/2019 | - | - | $53,371,000.00 | - | $190,059,000.00 | $61,258,000.00 | $304,688,000.00 | |||||||
8/10/2019 | - | - | $53,371,000.00 | - | $187,202,000.00 | $61,258,000.00 | $301,831,000.00 | |||||||
9/10/2019 | - | - | $53,371,000.00 | - | $184,365,000.00 | $61,258,000.00 | $298,994,000.00 | |||||||
10/10/2019 | - | - | $53,371,000.00 | - | $181,508,000.00 | $61,258,000.00 | $296,137,000.00 | |||||||
11/10/2019 | - | - | $53,371,000.00 | - | $178,710,000.00 | $61,258,000.00 | $293,339,000.00 | |||||||
12/10/2019 | - | - | $53,371,000.00 | - | $175,893,000.00 | $61,258,000.00 | $290,522,000.00 | |||||||
1/10/2020 | - | - | $53,371,000.00 | - | $173,135,000.00 | $61,258,000.00 | $287,764,000.00 | |||||||
2/10/2020 | - | - | $53,371,000.00 | - | $170,397,000.00 | $61,258,000.00 | $285,026,000.00 | |||||||
3/10/2020 | - | - | $53,371,000.00 | - | $167,601,000.00 | $61,258,000.00 | $282,230,000.00 | |||||||
4/10/2020 | - | - | $53,371,000.00 | - | $133,073,000.00 | $61,258,000.00 | $247,702,000.00 | |||||||
5/10/2020 | - | - | $53,371,000.00 | - | $116,893,000.00 | $61,258,000.00 | $231,522,000.00 | |||||||
6/10/2020 | - | - | $53,371,000.00 | - | $112,106,000.00 | $61,258,000.00 | $226,735,000.00 | |||||||
7/10/2020 | - | - | $53,371,000.00 | - | $68,790,000.00 | $61,258,000.00 | $183,419,000.00 | |||||||
8/10/2020 | - | - | $53,371,000.00 | - | $66,652,000.00 | $61,258,000.00 | $181,281,000.00 | |||||||
9/10/2020 | - | - | $53,371,000.00 | - | $64,516,000.00 | $61,258,000.00 | $179,145,000.00 | |||||||
10/10/2020 | - | - | $53,370,000.00 | - | $62,344,000.00 | $61,258,000.00 | $176,972,000.00 | |||||||
11/10/2020 | - | - | $52,571,000.00 | - | $60,994,000.00 | $61,258,000.00 | $174,823,000.00 | |||||||
12/10/2020 | - | - | $51,704,000.00 | - | $59,691,000.00 | $61,258,000.00 | $172,653,000.00 | |||||||
1/10/2021 | - | - | $50,898,000.00 | - | $58,378,000.00 | $61,258,000.00 | $170,534,000.00 |
Annex H-1 |
Period Ending(2) | Class A-1 | Class A-2 | Class A-SB | Class A-3 | Class A-4 | Class A-M | Total(3) | |||||||
2/10/2021 | - | - | $50,088,000.00 | - | $57,084,000.00 | $61,258,000.00 | $168,430,000.00 | |||||||
3/10/2021 | - | - | $49,086,000.00 | - | $55,892,000.00 | $61,258,000.00 | $166,236,000.00 | |||||||
4/10/2021 | - | - | $48,269,000.00 | - | $54,635,000.00 | $61,258,000.00 | $164,162,000.00 | |||||||
5/10/2021 | - | - | $47,386,000.00 | - | $53,424,000.00 | $61,258,000.00 | $162,068,000.00 | |||||||
6/10/2021 | - | - | $46,562,000.00 | - | $52,203,000.00 | $61,258,000.00 | $160,023,000.00 | |||||||
7/10/2021 | - | - | $45,672,000.00 | - | $51,029,000.00 | $61,258,000.00 | $157,959,000.00 | |||||||
8/10/2021 | - | - | $44,841,000.00 | - | $49,844,000.00 | $61,258,000.00 | $155,943,000.00 | |||||||
9/10/2021 | - | - | $44,007,000.00 | - | $48,677,000.00 | $61,258,000.00 | $153,942,000.00 | |||||||
10/10/2021 | - | - | $43,107,000.00 | - | $47,556,000.00 | $61,258,000.00 | $151,921,000.00 | |||||||
11/10/2021 | - | - | $42,266,000.00 | - | $46,424,000.00 | $61,258,000.00 | $149,948,000.00 | |||||||
12/10/2021 | - | - | $41,359,000.00 | - | $45,340,000.00 | $61,258,000.00 | $147,957,000.00 | |||||||
1/10/2022 | - | - | $40,511,000.00 | - | $44,242,000.00 | $61,258,000.00 | $146,011,000.00 | |||||||
2/10/2022 | - | - | $39,660,000.00 | - | $43,163,000.00 | $61,258,000.00 | $144,081,000.00 | |||||||
3/10/2022 | - | - | $38,619,000.00 | - | $42,191,000.00 | $61,258,000.00 | $142,068,000.00 | |||||||
4/10/2022 | - | - | $37,760,000.00 | - | $41,146,000.00 | $61,258,000.00 | $140,164,000.00 | |||||||
5/10/2022 | - | - | $36,836,000.00 | - | $40,149,000.00 | $61,258,000.00 | $138,243,000.00 | |||||||
6/10/2022 | - | - | $35,969,000.00 | - | $39,139,000.00 | $61,258,000.00 | $136,366,000.00 | |||||||
7/10/2022 | - | - | $35,038,000.00 | - | $38,176,000.00 | $61,258,000.00 | $134,472,000.00 | |||||||
8/10/2022 | - | - | $34,165,000.00 | - | $37,199,000.00 | $61,258,000.00 | $132,622,000.00 | |||||||
9/10/2022 | - | - | $33,287,000.00 | - | $36,239,000.00 | $61,258,000.00 | $130,784,000.00 | |||||||
10/10/2022 | - | - | $32,346,000.00 | - | $14,637,000.00 | $61,258,000.00 | $108,241,000.00 | |||||||
11/10/2022 | - | - | $31,461,000.00 | - | $13,842,000.00 | $61,258,000.00 | $106,561,000.00 | |||||||
12/10/2022 | - | - | $30,512,000.00 | - | $13,097,000.00 | $61,258,000.00 | $104,867,000.00 | |||||||
1/10/2023 | - | - | $29,620,000.00 | - | $12,334,000.00 | $61,258,000.00 | $103,212,000.00 | |||||||
2/10/2023 | - | - | $28,725,000.00 | - | $11,586,000.00 | $61,258,000.00 | $101,569,000.00 | |||||||
3/10/2023 | - | - | $27,645,000.00 | - | $10,958,000.00 | $61,258,000.00 | $99,861,000.00 | |||||||
4/10/2023 | - | - | $26,741,000.00 | - | $10,241,000.00 | $61,258,000.00 | $98,240,000.00 | |||||||
5/10/2023 | - | - | $25,774,000.00 | - | $9,575,000.00 | $61,258,000.00 | $96,607,000.00 | |||||||
6/10/2023 | - | - | $24,863,000.00 | - | $8,889,000.00 | $61,258,000.00 | $95,010,000.00 | |||||||
7/10/2023 | - | - | $23,888,000.00 | - | $8,253,000.00 | $61,258,000.00 | $93,399,000.00 | |||||||
8/10/2023 | - | - | $22,969,000.00 | - | $7,597,000.00 | $61,258,000.00 | $91,824,000.00 | |||||||
9/10/2023 | - | - | $22,047,000.00 | - | $6,956,000.00 | $61,258,000.00 | $90,261,000.00 | |||||||
10/10/2023 | - | - | $21,061,000.00 | - | $6,366,000.00 | $61,258,000.00 | $88,685,000.00 | |||||||
11/10/2023 | - | - | $20,131,000.00 | - | $5,755,000.00 | $61,258,000.00 | $87,144,000.00 | |||||||
12/10/2023 | - | - | $19,138,000.00 | - | $5,194,000.00 | $61,258,000.00 | $85,590,000.00 | |||||||
1/10/2024 | - | - | $18,200,000.00 | - | $4,613,000.00 | $61,258,000.00 | $84,071,000.00 | |||||||
2/10/2024 | - | - | $17,259,000.00 | - | $4,046,000.00 | $61,258,000.00 | $82,563,000.00 | |||||||
3/10/2024 | - | - | $16,195,000.00 | - | $3,566,000.00 | $61,258,000.00 | $81,019,000.00 | |||||||
4/10/2024 | - | - | $15,246,000.00 | - | $3,029,000.00 | $61,258,000.00 | $79,533,000.00 | |||||||
5/10/2024 | - | - | $14,234,000.00 | - | $2,543,000.00 | $61,258,000.00 | $78,035,000.00 | |||||||
6/10/2024 | - | - | $13,276,000.00 | - | $2,034,000.00 | $61,258,000.00 | $76,568,000.00 | |||||||
7/10/2024 | - | - | $12,256,000.00 | - | $1,577,000.00 | $61,258,000.00 | $75,091,000.00 | |||||||
8/10/2024 | - | - | $11,290,000.00 | - | $1,098,000.00 | $61,258,000.00 | $73,646,000.00 | |||||||
9/10/2024 | - | - | $10,321,000.00 | - | $633,000.00 | $61,258,000.00 | $72,212,000.00 | |||||||
10/10/2024 | - | - | $9,289,000.00 | - | $218,000.00 | $61,258,000.00 | $70,765,000.00 | |||||||
11/10/2024 | - | - | $8,094,000.00 | - | - | $61,258,000.00 | $69,352,000.00 | |||||||
12/10/2024 | - | - | $6,669,000.00 | - | - | $61,258,000.00 | $67,927,000.00 | |||||||
1/10/2025 | - | - | $5,275,000.00 | - | - | $61,258,000.00 | $66,533,000.00 | |||||||
2/10/2025 | - | - | $3,891,000.00 | - | - | $61,258,000.00 | $65,149,000.00 | |||||||
3/10/2025 | - | - | - | - | - | $31,169,000.00 | $31,169,000.00 | |||||||
4/10/2025 | - | - | - | - | - | $28,383,000.00 | $28,383,000.00 | |||||||
5/10/2025 | - | - | - | - | - | $10,233,000.00 | $10,233,000.00 | |||||||
6/10/2025 and after | - | - | - | - | - | - | - |
footnotes to above table:
(1) | The total notional amount of the class XP-A certificates from time to time will equal the sum of the components thereof set forth in the table above. Each of those components of the total notional amount of the class XP-A certificates will relate to a particular class of series COMM 2015-LC23 certificates (i.e., classes A-1, A-2, A-SB, A-3, A-4 and A-M, respectively). At any particular time during each indicated period through and including the related distribution date on which such period ends, the component of the notional amount of the class XP-A certificates relating to each indicated class of series COMM 2015-LC23 certificates will equal the lesser of (a) the amount stated in the table above for that class and period and (b) the then actual total principal balance of that class. |
(2) | Assumes each distribution date always occurs on the 10th of the month. The initial period commences on the date of initial issuance of the series COMM 2015-LC23 certificates. Each subsequent period begins immediately following the end of the prior period. |
(3) | The total notional amount of the class XP-A certificates at any particular time may be less than the amount indicated in the table above, as described in footnote (1). |
Annex H-2 |
ANNEX I
CLASS XP-A REFERENCE RATES
Distribution Date* | Reference Rate | Distribution Date* | Reference Rate | Distribution Date* | Reference Rate | ||||||||
12/10/2015 | 4.396% | 4/10/2019 | 4.700% | 8/10/2022 | 4.614% | ||||||||
1/10/2016 | 4.588% | 5/10/2019 | 4.545% | 9/10/2022 | 4.614% | ||||||||
2/10/2016 | 4.450% | 6/10/2019 | 4.700% | 10/10/2022 | 4.462% | ||||||||
3/10/2016 | 4.469% | 7/10/2019 | 4.545% | 11/10/2022 | 4.595% | ||||||||
4/10/2016 | 4.648% | 8/10/2019 | 4.700% | 12/10/2022 | 4.443% | ||||||||
5/10/2016 | 4.507% | 9/10/2019 | 4.699% | 1/10/2023 | 4.443% | ||||||||
6/10/2016 | 4.689% | 10/10/2019 | 4.545% | 2/10/2023 | 4.443% | ||||||||
7/10/2016 | 4.544% | 11/10/2019 | 4.699% | 3/10/2023 | 4.443% | ||||||||
8/10/2016 | 4.700% | 12/10/2019 | 4.544% | 4/10/2023 | 4.594% | ||||||||
9/10/2016 | 4.700% | 1/10/2020 | 4.699% | 5/10/2023 | 4.442% | ||||||||
10/10/2016 | 4.546% | 2/10/2020 | 4.544% | 6/10/2023 | 4.594% | ||||||||
11/10/2016 | 4.700% | 3/10/2020 | 4.544% | 7/10/2023 | 4.442% | ||||||||
12/10/2016 | 4.546% | 4/10/2020 | 4.699% | 8/10/2023 | 4.593% | ||||||||
1/10/2017 | 4.546% | 5/10/2020 | 4.541% | 9/10/2023 | 4.593% | ||||||||
2/10/2017 | 4.546% | 6/10/2020 | 4.689% | 10/10/2023 | 4.442% | ||||||||
3/10/2017 | 4.546% | 7/10/2020 | 4.532% | 11/10/2023 | 4.593% | ||||||||
4/10/2017 | 4.700% | 8/10/2020 | 4.617% | 12/10/2023 | 4.441% | ||||||||
5/10/2017 | 4.545% | 9/10/2020 | 4.617% | 1/10/2024 | 4.593% | ||||||||
6/10/2017 | 4.700% | 10/10/2020 | 4.465% | 2/10/2024 | 4.441% | ||||||||
7/10/2017 | 4.545% | 11/10/2020 | 4.617% | 3/10/2024 | 4.441% | ||||||||
8/10/2017 | 4.700% | 12/10/2020 | 4.465% | 4/10/2024 | 4.592% | ||||||||
9/10/2017 | 4.700% | 1/10/2021 | 4.464% | 5/10/2024 | 4.441% | ||||||||
10/10/2017 | 4.545% | 2/10/2021 | 4.464% | 6/10/2024 | 4.592% | ||||||||
11/10/2017 | 4.700% | 3/10/2021 | 4.465% | 7/10/2024 | 4.440% | ||||||||
12/10/2017 | 4.545% | 4/10/2021 | 4.616% | 8/10/2024 | 4.591% | ||||||||
1/10/2018 | 4.545% | 5/10/2021 | 4.464% | 9/10/2024 | 4.591% | ||||||||
2/10/2018 | 4.545% | 6/10/2021 | 4.616% | 10/10/2024 | 4.440% | ||||||||
3/10/2018 | 4.546% | 7/10/2021 | 4.464% | 11/10/2024 | 4.591% | ||||||||
4/10/2018 | 4.700% | 8/10/2021 | 4.616% | 12/10/2024 | 4.439% | ||||||||
5/10/2018 | 4.545% | 9/10/2021 | 4.616% | 1/10/2025 | 4.439% | ||||||||
6/10/2018 | 4.700% | 10/10/2021 | 4.463% | 2/10/2025 | 4.439% | ||||||||
7/10/2018 | 4.545% | 11/10/2021 | 4.615% | 3/10/2025 | 4.440% | ||||||||
8/10/2018 | 4.700% | 12/10/2021 | 4.463% | 4/10/2025 | 4.717% | ||||||||
9/10/2018 | 4.700% | 1/10/2022 | 4.463% | 5/10/2025 | 4.566% | ||||||||
10/10/2018 | 4.545% | 2/10/2022 | 4.463% | 6/10/2025 | 4.734% | ||||||||
11/10/2018 | 4.700% | 3/10/2022 | 4.463% | 7/10/2025 | 4.642% | ||||||||
12/10/2018 | 4.545% | 4/10/2022 | 4.615% | 8/10/2025 | 4.777% | ||||||||
1/10/2019 | 4.545% | 5/10/2022 | 4.462% | 9/10/2025 and after | 0.000% | ||||||||
2/10/2019 | 4.545% | 6/10/2022 | 4.614% | ||||||||||
3/10/2019 | 4.545% | 7/10/2022 | 4.462% |
* | Assumes each distribution date occurs on the 10th of the month. |
Annex I-1 |
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
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 give any information or to represent anything not contained in this prospectus supplement. You must not rely on any unauthorized information or representations. This prospectus supplement and the accompanying 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 prospectus supplement is current only as of its date. | $828,786,000 (Approximate)
Deutsche Bank Securities
Cantor Fitzgerald & Co.
Jefferies
COMM 2015-LC23 Mortgage Trust
Commercial Mortgage
| |||||||
TABLE OF CONTENTS | ||||||||
PROSPECTUS SUPPLEMENT | ||||||||
EXECUTIVE SUMMARY | S-13 | |||||||
SUMMARY | S-16 | |||||||
RISK FACTORS | S-67 | |||||||
THE SPONSORS, MORTGAGE LOAN SELLERS AND | ||||||||
ORIGINATORS | S-166 | |||||||
THE DEPOSITOR | S-199 | |||||||
THE ISSUING ENTITY | S-199 | |||||||
THE SERVICERS | S-201 | |||||||
THE TRUSTEE | S-218 | |||||||
THE CERTIFICATE ADMINISTRATOR AND CUSTODIAN | S-221 | |||||||
PAYING AGENT, CERTIFICATE REGISTRAR, CUSTODIAN AND | ||||||||
AUTHENTICATING AGENT | S-224 | |||||||
THE OPERATING ADVISOR | S-224 | |||||||
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS | S-225 | |||||||
DESCRIPTION OF THE MORTGAGE POOL | S-228 | |||||||
DESCRIPTION OF THE OFFERED CERTIFICATES | S-280 | |||||||
YIELD AND MATURITY CONSIDERATIONS | S-314 | |||||||
THE POOLING AND SERVICING AGREEMENT | S-320 | |||||||
USE OF PROCEEDS | S-393 | |||||||
MATERIAL FEDERAL INCOME TAX CONSEQUENCES | S-393 | |||||||
CERTAIN STATE AND LOCAL TAX CONSIDERATIONS | S-397 | |||||||
ERISA CONSIDERATIONS | S-397 | |||||||
LEGAL INVESTMENT | S-399 | |||||||
METHOD OF DISTRIBUTION (UNDERWRITER CONFLICTS OF | ||||||||
INTEREST) | S-400 | |||||||
LEGAL MATTERS | S-402 | |||||||
RATINGS | S-402 | |||||||
LEGAL ASPECTS OF MORTGAGE LOANS IN CALIFORNIA AND | ||||||||
NEW YORK | S-403 | |||||||
INDEX OF DEFINED TERMS | S-405 | |||||||
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 | PROSPECTUS SUPPLEMENT | ||||||
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 – | CLASS XP-A COMPONENT NOTIONAL AMOUNTS | H-1 | ||||||
ANNEX I – | CLASS XP-A REFERENCE RATES | I-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 | November 16, 2015 | ||||||
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 | |||||||
Until the date that is 90 days from the date of this prospectus supplement, all dealers that buy, sell or trade the Offered Certificates, whether or not participating in this offering, may be required to deliver a prospectus supplement and the accompanying prospectus. This is in addition to the dealers’ obligation to deliver a prospectus supplement and the accompanying prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. | ||||||||
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