| FREE WRITING PROSPECTUS | ||
| FILED PURSUANT TO RULE 433 | ||
| REGISTRATION FILE NO.: 333-207132-15 | ||
October 16, 2017
Free Writing Prospectus
Structural and Collateral Term Sheet
$977,059,894
(Approximate Initial Mortgage Pool Balance)
$842,714,000
(Offered Certificates)
Citigroup Commercial Mortgage Trust 2017-C4
As Issuing Entity
Citigroup Commercial Mortgage Securities Inc.
As Depositor
Commercial Mortgage Pass-Through Certificates, Series 2017-C4
Citi Real Estate Funding Inc.
Cantor Commercial Real Estate Lending, L.P.
Ladder Capital Finance LLC
German American Capital Corporation
Rialto Mortgage Finance, LLC
As Sponsors and Mortgage Loan Sellers
STATEMENT REGARDING THIS FREE WRITING PROSPECTUS
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Cantor Fitzgerald & Co., Academy Securities, Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
IMPORTANT NOTICE RELATING TO AUTOMATICALLY GENERATED EMAIL DISCLAIMERS
Any legends, disclaimers or other notices that may appear at the bottom of the email communication to which this free writing prospectus is attached relating to (1) these materials not constituting an offer (or a solicitation of an offer), (2) no representation being made that these materials are accurate or complete and that these materials may not be updated or (3) these materials possibly being confidential, are, in each case, not applicable to these materials and should be disregarded. Such legends, disclaimers or other notices have been automatically generated as a result of these materials having been sent via Bloomberg or another system.
| Citigroup | Cantor Fitzgerald & Co. | Deutsche Bank Securities |
| Co-Lead Managers and Joint Bookrunners | |
| Academy Securities | |
| Co-Manager | |
| CERTIFICATE SUMMARY |
The securities offered by this structural and collateral term sheet (this “Term Sheet”) are described in greater detail in the preliminary prospectus, dated on or about October 16, 2017, included as part of our registration statement (SEC File No. 333-207132) (the “Preliminary Prospectus”). The Preliminary Prospectus contains material information that is not contained in this Term Sheet (including, without limitation, a detailed discussion of risks associated with an investment in the offered securities under the heading“Risk Factors” in the Preliminary Prospectus). The Preliminary Prospectus is available upon request from Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Cantor Fitzgerald & Co. or Academy Securities, Inc. This Term Sheet is subject to change.
For information regarding certain risks associated with an investment in this transaction, refer to “Risk Factors” in the Preliminary Prospectus. Capitalized terms used but not otherwise defined in this Term Sheet have the respective meanings assigned to those terms in the Preliminary Prospectus.
The Securities May Not Be a Suitable Investment for You
The securities offered by this Term Sheet are not suitable investments for all investors. In particular, you should not purchase any class of securities unless you understand and are able to bear the prepayment, credit, liquidity and market risks associated with that class of securities. For those reasons and for the reasons set forth under the heading “Risk Factors” in the Preliminary Prospectus, the yield to maturity of, the aggregate amount and timing of distributions on and the market value of the offered securities are subject to material variability from period to period and give rise to the potential for significant loss over the life of those securities. The interaction of these 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 securities involves substantial risks and uncertainties and should be considered only by sophisticated institutional investors with substantial investment experience with similar types of securities and who have conducted appropriate due diligence on the mortgage loans and the securities. Potential investors are advised and encouraged to review the Preliminary Prospectus in full and to consult with their legal, tax, accounting and other advisors prior to making any investment in the offered securities described in this Term Sheet.
The securities offered by these materials are being offered when, as and if issued. This Term Sheet is not to be construed as an offer to sell or the solicitation of any offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. The information contained in this Term Sheet may not pertain to any securities that will actually be sold. The information contained in this Term Sheet may be based on assumptions regarding market conditions and other matters as reflected in this Term Sheet. We make no representations regarding the reasonableness of such assumptions or the likelihood that any of such assumptions will coincide with actual market conditions or events, and this Term Sheet should not be relied upon for such purposes. We and our affiliates, officers, directors, partners and employees, including persons involved in the preparation or issuance of this Term Sheet may, from time to time, have long or short positions in, and buy or sell, the securities mentioned in this Term Sheet or derivatives thereof (including options). Information contained in this Term Sheet is current as of the date appearing on this Term Sheet only. Information in this Term Sheet regarding the securities and the mortgage loans backing any securities discussed in this Term Sheet supersedes all prior information regarding such securities and mortgage loans. None ofCitigroup Global Markets Inc., Deutsche Bank Securities Inc., Cantor Fitzgerald & Co. or Academy Securities, Inc.provides accounting, tax or legal advice.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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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 “Risk Factors—Legal and Regulatory Provisions Affecting Investors Could Adversely Affect the Liquidity and Other Aspects of the Offered Certificates” in the Preliminary Prospectus). See also “Legal Investment” in the Preliminary Prospectus.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| CERTIFICATE SUMMARY |
| OFFERED CERTIFICATES | |||||||||||||||
| Offered Classes | Expected Ratings (Moody’s / Fitch / KBRA)(1) | Approximate Initial Certificate Balance or Notional Amount(2) | Approximate Initial Credit Support(3) | Initial Pass- Through Rate(4) | Pass-Through Rate Description | Expected Wtd. Avg. Life (Yrs)(5) | Expected Principal Window(5) | ||||||||
| Class A-1 | Aaa(sf) / AAAsf / AAA(sf) | $27,750,000 | 30.000% | % | (6) | 2.69 | 11/17 - 8/22 | ||||||||
| Class A-2 | Aaa(sf) / AAAsf / AAA(sf) | $103,900,000 | 30.000% | % | (6) | 4.93 | 8/22 - 10/22 | ||||||||
| Class A-3 | Aaa(sf) / AAAsf / AAA(sf) | $240,000,000 | 30.000% | % | (6) | 9.67 | 3/27 - 8/27 | ||||||||
| Class A-4 | Aaa(sf) / AAAsf / AAA(sf) | $271,691,000 | 30.000% | % | (6) | 9.85 | 8/27 - 9/27 | ||||||||
| Class A-AB | Aaa(sf) / AAAsf / AAA(sf) | $40,600,000 | 30.000% | % | (6) | 7.41 | 10/22 - 6/27 | ||||||||
| Class X-A | Aa1(sf) / AAAsf / AAA(sf) | $757,221,000 | (7) | N/A | % | Variable IO(8) | N/A | N/A | |||||||
| Class X-B | NR / A-sf / AAA(sf) | $85,493,000 | (7) | N/A | % | Variable IO(8) | N/A | N/A | |||||||
| Class A-S | Aa3(sf) / AAAsf / AAA(sf) | $73,280,000 | 22.500% | % | (6) | 9.87 | 9/27 - 9/27 | ||||||||
| Class B | NR / AA-sf / AA(sf) | $45,189,000 | 17.875% | % | (6) | 9.87 | 9/27 - 10/27 | ||||||||
| Class C | NR / A-sf / A-(sf) | $40,304,000 | 13.750% | % | (6) | 9.95 | 10/27 - 10/27 | ||||||||
| NON-OFFERED CERTIFICATES | |||||||||||||||
| Non-Offered Classes | Expected Ratings (Moody’s / Fitch / KBRA)(1) | Approximate Initial Certificate Balance or Notional Amount(2) | Approximate Initial Credit Support(3) | Initial Pass- Through Rate(4) | Pass-Through Rate Description | Expected Wtd. Avg. Life (Yrs)(5) | Expected Principal Window(5) | ||||||||
| Class X-D | NR / BBB-sf / BBB(sf) | $31,754,000 | (7) | N/A | % | Variable IO(8) | N/A | N/A | |||||||
| Class D | NR / BBB-sf / BBB(sf) | $31,754,000 | (9) | 10.500% | % | (6) | 9.95 | 10/27 - 10/27 | |||||||
| Class E-RR(10) | NR / BBB-sf / BBB-(sf) | $19,541,000 | (9) | 8.500% | % | (6) | 9.95 | 10/27 - 10/27 | |||||||
| Class F-RR(10) | NR / BB+sf / BBB-(sf) | $12,214,000 | 7.250% | % | (6) | 9.95 | 10/27 - 10/27 | ||||||||
| Class G-RR(10) | NR / BB-sf / BB(sf) | $12,213,000 | 6.000% | % | (6) | 9.95 | 10/27 - 10/27 | ||||||||
| Class H-RR(10) | NR / B-sf /B+(sf) | $9,770,000 | 5.000% | % | (6) | 9.96 | 10/27 - 11/27 | ||||||||
| Class J-RR(10) | NR / NR / NR | $48,853,893 | 0.000% | % | (6) | 10.03 | 11/27 - 11/27 | ||||||||
| Class S(11) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||
| Class R(11) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||
| (1) | It is a condition of issuance that the offered certificates and certain classes of non-offered certificates receive the ratings set forth above. The anticipated ratings shown are those of Moody’s Investors Service, Inc. (“Moody’s”), Fitch Ratings, Inc. (“Fitch”) and Kroll Bond Rating Agency, Inc. (“KBRA”). Subject to the discussion under “Ratings” in the Preliminary Prospectus, the ratings on the certificates address the likelihood of the timely receipt by holders of all payments of interest to which they are entitled on each distribution date and, except in the case of the interest only certificates, the ultimate receipt by holders of all payments of principal to which they are entitled on or before the applicable rated final distribution date. Certain nationally recognized statistical rating organizations, as defined in Section 3(a)(62) of the Securities Exchange Act of 1934, as amended, that were not hired by the depositor may use information they receive pursuant to Rule 17g-5 under the Securities Exchange Act of 1934, as amended, or otherwise to rate the offered certificates. We cannot assure you as to what ratings a non-hired nationally recognized statistical rating organization would assign. See “Risk Factors—Nationally Recognized Statistical Rating Organizations May Assign Different Ratings to the Certificates; Ratings of the Certificates Reflect Only the Views of the Applicable Rating Agencies as of the Dates Such Ratings Were Issued; Ratings May Affect ERISA Eligibility; Ratings May Be Downgraded” in the Preliminary Prospectus. Moody’s, Fitch and KBRA have informed us that the “sf” designation in the ratings represents an identifier of structured finance product ratings. For additional information about this identifier, prospective investors can go to the related rating agency’s website. The depositor and the underwriters have not verified, do not adopt and do not accept responsibility for any statements made by the rating agencies on those websites. Credit ratings referenced throughout this Term Sheet are forward-looking opinions about credit risk and express a rating agency’s opinion about the willingness and ability of an issuer of securities to meet its financial obligations in full and on time. Ratings are not indications of investment merit and are not buy, sell or hold recommendations, a measure of asset value or an indication of the suitability of an investment. |
| (2) | Approximate, subject to a variance of plus or minus 5% and any variation in the certificate balances of the Class D certificates and the RR Certificates (as defined in footnote (10) below), including as described in footnote (9) below, following calculation of the actual fair value of all of the “ABS interests” (as such term is defined in Regulation RR) issued by the issuing entity, as described under “Credit Risk Retention” in the Preliminary Prospectus. In addition, the notional amounts of the Class X-A, Class X-B and Class X-D certificates may vary depending upon the final pricing of the classes of Principal Balance Certificates (as defined in footnote (6) below) whose certificate balances comprise such notional amounts, and, if as a result of such pricing the pass-through rate of any class of the Class X-A, Class X-B or Class X-D certificates, as applicable, would be equal to zero at all times, such class of certificates will not be issued on the closing date of this securitization. |
| (3) | The approximate initial credit support percentages set forth for the Class A-1, Class A-2, Class A-3, Class A-4 and Class A-AB certificates are represented in the aggregate. |
| (4) | Approximateper annum rate as of the Closing Date. |
| (5) | Determined assuming no prepayments prior to the maturity date or any anticipated repayment date, as applicable, for anymortgageloan and based on the modeling assumptions describedunder “Yield, Prepayment and Maturity Considerations” in the Preliminary Prospectus. |
| (6) | For any distribution date, the pass-through rate for each class of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-AB, Class A-S, Class B, Class C, Class D, Class E-RR, Class F-RR, Class G-RR, Class H-RR and Class J-RR certificates (collectively, the “Principal Balance Certificates”) will generally be equal to one of (i) a fixedper annum rate, (ii) the weighted average of the net 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 in effect from time to time, (iii) a rate equal to the lesser of a specifiedper annum rate and the weighted average rate described in clause (ii), or (iv) the weighted average rate described in clause (ii) less a specified percentage, but no less than 0.000%, as describedunder“Description of the Certificates—Distributions—Pass-Through Rates” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| (7) | The Class X-A, Class X-B and Class X-D certificates (collectively, the “Class X Certificates”) will not have certificate balances and will not be entitled to receive distributions of principal. Interest will accrue on each class of Class X Certificates at the related pass-through rate based upon the related notional amount. The notional amount of each class of the Class X Certificates will be equal to the certificate balance or the aggregate of the certificate balances, as applicable, from time to time of the class or classes of the Principal Balance Certificates identified in the same row as such class of Class X Certificates in the chart below (as to such class of Class X Certificates, the “Corresponding Principal Balance Certificates”): |
| Class of Class X Certificates | Class(es) of Corresponding Principal Balance Certificates |
| Class X-A | Class A-1, Class A-2, Class A-3, Class A-4, Class A-AB and Class A-S |
| Class X-B | Class B and Class C |
| Class X-D | Class D |
| (8) | The pass-through rate for each class of Class X Certificates will generally be aper annumrate equal to the excess, if any, of (i) the weighted average of the net 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 in effect from time to time, over (ii) the pass-through rate (or, if applicable, the weighted average of the pass-through rates) of the class or classes of Corresponding Principal Balance Certificates as in effect from time to time, as described in the Preliminary Prospectus. |
| (9) | The approximate initial certificate balances of the Class D and Class E-RR certificates are estimated based in part on the estimated ranges of certificate balances and estimated fair values described in “Credit Risk Retention” in the Preliminary Prospectus. The initial certificate balance of the Class D certificates is expected to fall within a range of $27,455,000 and $31,754,000, and the initial certificate balance of the Class E-RR certificates is expected to fall within a range of $19,541,000 and $23,840,000, with the ultimate initial certificate balances of the Class D and Class E-RR certificates determined such that, upon initial issuance, the aggregate fair value of the RR Certificates will equal at least 5% of the estimated fair value of all ABS interests issued by the issuing entity. |
| (10) | In satisfaction of the risk retention obligations of Citi Real Estate Funding Inc. (as retaining sponsor) with respect to this transaction, all of the Class E-RR, Class F-RR, Class G-RR, Class H-RR and Class J-RR certificates (collectively, the “RR Certificates”), in the aggregate initial certificate balance of approximately $102,591,893, and with a fair value expected to represent at least 5.0% of the fair value, as of the closing date for this transaction, of all ABS interests issued by the issuing entity, will constitute an “eligible horizontal residual interest” (as such term is defined in Regulation RR) that is to be purchased and retained by KKR Real Estate Credit Opportunity Partners Aggregator I L.P. in accordance with the credit risk retention rules applicable to this securitization transaction. See “Credit Risk Retention” in the Preliminary Prospectus. |
| (11) | Neither the Class S certificates nor the Class R certificates will have a certificate balance, notional amount, pass-through rate, rating or rated final distribution date.Excess interest accruing after the related anticipated repayment date on any mortgage loan with an anticipated repayment date will, to the extent collected, be allocated to the Class S certificates as set forth in “Description of the Certificates—Distributions—Excess Interest” in the Preliminary Prospectus.The Class R certificates will represent the residual interests in each of two separate REMICs, as further described in the Preliminary Prospectus. The Class R certificates will not be entitled to distributions of principal or interest. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
5
| MORTGAGE POOL CHARACTERISTICS |
| Mortgage Pool Characteristics(1) | |
| Initial Pool Balance(2) | $977,059,894 |
| Number of Mortgage Loans | 57 |
| Number of Mortgaged Properties | 95 |
| Average Cut-off Date Balance | $17,141,402 |
| Weighted Average Mortgage Rate | 4.46836% |
| Weighted Average Remaining Term to Maturity/ARD (months)(3) | 112 |
| Weighted Average Remaining Amortization Term (months)(4) | 353 |
| Weighted Average Cut-off Date LTV Ratio(5) | 59.1% |
| Weighted Average Maturity Date/ARD LTV Ratio(3)(5) | 54.4% |
| Weighted Average UW NCF DSCR(6) | 1.89x |
| Weighted Average Debt Yield on Underwritten NOI(7) | 10.9% |
| % of Initial Pool Balance of Mortgage Loans that are Amortizing Balloon | 25.9% |
| % of Initial Pool Balance of Mortgage Loans that are Interest Only then Amortizing Balloon | 32.2% |
| % of Initial Pool Balance of Mortgage Loans that are Interest Only | 41.9% |
| % of Initial Pool Balance of Mortgaged Properties with Single Tenants | 16.3% |
| % of Initial Pool Balance of Mortgage Loans with Mezzanine Debt | 10.2% |
| % of Initial Pool Balance of Mortgage Loans with Subordinate Debt | 4.9% |
| (1) | The Cut-off Date LTV Ratio, Maturity Date/ARD LTV Ratio, UW NCF DSCR, Debt Yield on Underwritten NOI and Cut-off Date Balance Per SF / Rooms information for each mortgage loan is presented in this Term Sheet (i) if such mortgage loan is part of a loan combination (as defined under “Collateral Overview—Loan Combination Summary” below), based on both that mortgage loan and any related pari passu companion loan(s) but, unless otherwise specifically indicated, without regard to any related subordinate companion loan(s), and (ii) unless otherwise specifically indicated, without regard to any other indebtedness (whether or not secured by the related mortgaged property, ownership interests in the related borrower or otherwise) that currently exists or that may be incurred by the related borrower or its owners in the future. |
| (2) | Subject to a permitted variance of plus or minus 5%. |
| (3) | Unless otherwise indicated, mortgage loans with anticipated repayment dates are presented as if they were to mature on the anticipated repayment date. |
| (4) | Excludes mortgage loans that are interest-only for the entire term. |
| (5) | The Cut-off Date LTV Ratios and Maturity Date/ARD LTV Ratios presented in this Term Sheet are generally based on the “as-is” appraised values of the related mortgaged properties (as set forth on Annex A to the Preliminary Prospectus), provided that such LTV ratios may be calculated (i) based on “as-stabilized” or similar values in certain cases where the completion of certain hypothetical conditions or other events at the property are assumed and/or where reserves have been established at origination to satisfy the applicable condition or event that is expected to occur or (ii) based on an “as-is portfolio value”, which represents the appraised value for a portfolio of mortgaged properties as a whole and not the sum of the appraised values for each of the individual mortgaged properties, in each case as further described in the definitions of “Appraised Value”, “Cut-off Date LTV Ratio” and “Maturity Date/ARD LTV Ratio” under “Certain Definitions” in this Term Sheet and under “Description of the Mortgage Pool—Certain Calculations and Definitions” in the Preliminary Prospectus. |
| (6) | The UW NCF DSCR for each mortgage loan is generally calculated by dividing the UW NCF for the related mortgaged property or mortgaged properties by the annual debt service for such mortgage loan, as adjusted in the case of mortgage loans with a partial interest only period by using the first 12 amortizing payments due instead of the actual interest only payment due. |
| (7) | The Debt Yield on Underwritten NOI for each mortgage loan is generally calculated as the related mortgaged property’s Underwritten NOI divided by the Cut-off Date Balance of such mortgage loan, and the Debt Yield on Underwritten NCF for each mortgage loan is generally calculated as the related mortgaged property’s Underwritten NCF divided by the Cut-off Date Balance of such mortgage loan. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| KEY FEATURES OF THE CERTIFICATES |
| Co-Lead Managers and Joint Bookrunners: | Citigroup Global Markets Inc. Deutsche Bank Securities Inc. Cantor Fitzgerald & Co. | |
| Co-Manager: | Academy Securities, Inc. | |
| Depositor: | Citigroup Commercial Mortgage Securities Inc. | |
| Initial Pool Balance: | $977,059,894 | |
| Master Servicer: | Midland Loan Services, a Division of PNC Bank, National Association | |
| Special Servicer: | Midland Loan Services, a Division of PNC Bank, National Association | |
| Certificate Administrator: | Citibank, N.A. | |
Trustee: | Wilmington Trust, National Association | |
| Operating Advisor: | Park Bridge Lender Services LLC | |
| Asset Representations Reviewer: | Park Bridge Lender Services LLC | |
| Credit Risk Retention: | For a discussion on the manner in which the U.S. credit risk retention requirements are being satisfied by Citi Real Estate Funding Inc., as retaining sponsor, see “Credit Risk Retention” in the Preliminary Prospectus. Note that this securitization transaction is not structured to satisfy the EU risk retention and due diligence requirements. | |
| Closing Date: | On or about October 31, 2017 | |
| Cut-off Date: | With respect to each mortgage loan, the due date in October 2017 for that mortgage loan (or, in the case of any mortgage loan that has its first due date subsequent to October 2017, the date that would have been its due date in October 2017 under the terms of that mortgage loan if a monthly payment were scheduled to be due in that month) | |
| Determination Date: | The 8th day of each month or next business day, commencing in November 2017 | |
| Distribution Date: | The 4th business day after the Determination Date, commencing in November 2017 | |
| Interest Accrual: | Preceding calendar month | |
| ERISA Eligible: | The offered certificates are expected to be ERISA eligible, subject to the exemption conditions described in the Preliminary Prospectus | |
| SMMEA Eligible: | No | |
| Payment Structure: | Sequential Pay | |
| Day Count: | 30/360 | |
| Tax Structure: | REMIC | |
| Rated Final Distribution Date: | October 2050 | |
| Cleanup Call: | 1.0% | |
| Minimum Denominations: | $10,000 minimum for the offered certificates (other than the Class X-A and Class X-B certificates); $1,000,000 minimum for the Class X-A and Class X-B certificates; and integral multiples of $1 thereafter for all the offered certificates | |
| Delivery: | Book-entry through DTC | |
| Bond Information: | Cash flows are expected to be modeled by TREPP, INTEX and BLOOMBERG |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| TRANSACTION HIGHLIGHTS |
| ■ | $977,059,894 (Approximate) New-Issue Multi-Borrower CMBS: |
| — | Overview:The mortgage pool consists of 57 fixed-rate commercial mortgage loans that have an aggregate Cut-off Date Balance of $977,059,894 (the “Initial Pool Balance”), have an average mortgage loan Cut-off Date Balance of $17,141,402 and are secured by 95 mortgaged properties located throughout 30 states and the District of Columbia. |
| — | LTV:59.1% weighted average Cut-off Date LTV Ratio |
| — | DSCR:1.89x weighted average Underwritten Debt Service Coverage Ratio |
| — | Debt Yield: 10.9% weighted average Debt Yield on Underwritten NOI |
| — | Credit Support: 30.000% credit support to Class A-1 / A-2 / A-3 / A-4 / A-AB |
| ■ | Loan Structural Features: |
| — | Amortization:58.1% of the mortgage loans by Initial Pool Balance have scheduled amortization: |
| – | 25.9% of the mortgage loans by Initial Pool Balance have amortization for the entire term with a balloon payment due at maturity |
| – | 32.2% of the mortgage loans by Initial Pool Balance have scheduled amortization following a partial interest only period with a balloon payment due at maturity |
| — | Hard Lockboxes: 71.0% of the mortgage loans by Initial Pool Balance have a Hard Lockbox in place |
| — | Cash Traps: 97.3% of the mortgage loans by Initial Pool Balance have cash traps triggered by certain declines in cash flow, all at levels equal to or greater than a 1.05x coverage, that fund an excess cash flow reserve |
| — | Reserves:The mortgage loans require amounts to be escrowed for reserves as follows: |
| – | Real Estate Taxes: 46 mortgage loans representing 69.9% of the Initial Pool Balance |
| – | Insurance: 38 mortgage loans representing 49.8% of the Initial Pool Balance |
| – | Replacement Reserves (Including FF&E Reserves): 44 mortgage loans representing 71.6% of the Initial Pool Balance |
| – | Tenant Improvements / Leasing Commissions: 26 mortgage loans representing 64.0% of the portion of the Initial Pool Balance that is secured by office, retail, mixed use and industrial properties as well as one hospitality property and one multifamily property each with commercial tenants |
| — | Predominantly Defeasance Mortgage Loans: 79.2% of the mortgage loans by Initial Pool Balance permit defeasance only after an initial lockout period |
| ■ | Multiple-Asset Types > 5.0% of the Initial Pool Balance: |
| — | Office:27.8% of the mortgaged properties by allocated Initial Pool Balance are office properties |
| — | Retail:25.0% of the mortgaged properties by allocated Initial Pool Balance are retail properties (19.1% are anchored retail properties) |
| — | Hospitality:18.8% of the mortgaged properties by allocated Initial Pool Balance are hospitality properties |
| — | Mixed Use: 13.8% of the mortgaged properties by allocated Initial Pool Balance are mixed use properties |
| — | Multifamily:7.1% of the mortgaged properties by allocated Initial Pool Balance are multifamily properties |
| ■ | Geographic Diversity: The 95 mortgaged properties are located throughout 30 states and the District of Columbia, with only three states having greater than 10.0% of the allocated Initial Pool Balance: California (20.6%), New York (11.3%) and Massachusetts (10.2%) |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
8
| COLLATERAL OVERVIEW |
Mortgage Loans by Loan Seller
Mortgage Loan Seller | Mortgage Loans | Mortgaged Properties | Aggregate Cut-off Date Balance | % of Initial Pool Balance | ||||||||
| Citi Real Estate Funding Inc. | 11 | 28 | $333,258,262 | 34.1 | % | |||||||
| Cantor Commercial Real Estate Lending, L.P. | 18 | 30 | 246,280,124 | 25.2 | ||||||||
| Ladder Capital Finance LLC | 14 | 15 | 173,669,500 | 17.8 | ||||||||
| German American Capital Corporation | 7 | 14 | 152,187,982 | 15.6 | ||||||||
| Rialto Mortgage Finance, LLC | 7 | 8 | 71,664,025 | 7.3 | ||||||||
| Total | 57 | 95 | $977,059,894 | 100.0 | % | |||||||
Ten Largest Mortgage Loans(1)(2)
# | Mortgage Loan Name | Cut-off Date | % of | Property Type | Property | Cut-off Date | UW NCF | UW | Cut-off | ||||||||||||||||
| 1 | South Station | $75,000,000 | 7.7 | % | Mixed Use | 200,775 | $374 | 1.72 | x | 8.5 | % | 58.8 | % | ||||||||||||
| 2 | Station Place III | 50,000,000 | 5.1 | Office | 517,653 | $367 | 3.00 | x | 11.9 | % | 47.6 | % | |||||||||||||
| 3 | Godfrey Hotel | 47,500,000 | 4.9 | Hospitality | 221 | $214,932 | 2.11 | x | 15.5 | % | 46.8 | % | |||||||||||||
| 4 | Pleasant Prairie Premium Outlets | 41,000,000 | 4.2 | Retail | 402,615 | $360 | 2.66 | x | 11.2 | % | 50.0 | % | |||||||||||||
| 5 | Stryker Corporation | 39,900,000 | 4.1 | Office | 191,276 | $209 | 1.99 | x | 11.6 | % | 65.4 | % | |||||||||||||
| 6 | Marriott LAX | 39,689,333 | 4.1 | Hospitality | 1,004 | $144,734 | 1.72 | x | 13.8 | % | 48.3 | % | |||||||||||||
| 7 | Hyatt Regency Louisville | 38,540,000 | 3.9 | Hospitality | 393 | $98,066 | 2.14 | x | 15.2 | % | 54.7 | % | |||||||||||||
| 8 | Corporate Woods Portfolio | 35,577,660 | 3.6 | Office/Retail | 2,033,179 | $109 | 1.48 | x | 10.2 | % | 73.9 | % | |||||||||||||
| 9 | 50 Varick Street | 35,000,000 | 3.6 | Office | 158,574 | $491 | 2.01 | x | 8.7 | % | 55.6 | % | |||||||||||||
| 10 | Mall of Louisiana | 28,000,000 | 2.9 | Retail | 776,789 | $418 | 1.85 | x | 11.1 | % | 57.0 | % | |||||||||||||
| Top 10 Total / Wtd. Avg. | $430,206,992 | 44.0 | % | 2.08 | x | 11.6 | % | 55.5 | % | ||||||||||||||||
| Remaining Total / Wtd. Avg. | 546,852,902 | 56.0 | 1.75 | x | 10.3 | % | 61.9 | % | |||||||||||||||||
| Total / Wtd. Avg. | $977,059,894 | 100.0 | % | 1.89 | x | 10.9 | % | 59.1 | % | ||||||||||||||||
| (1) | See footnotes to table entitled“Mortgage Pool Characteristics” above. |
| (2) | With respect to each mortgage loan that is part of a loan combination (as identified under “Collateral Overview—Loan Combination Summary” below), the UW NCF DSCR, UW NOI Debt Yield and Cut-off Date LTV Ratio are calculated based on both that mortgage loan and any related pari passu companion loan(s), but without regard to any related subordinate companion loan(s) or other indebtedness. |
| (3) | With respect to certain of the mortgage loans identified above, the Cut-off Date LTV Ratios have been calculated using “as-stabilized”, “portfolio premium” or similar hypothetical values. Such mortgage loans are identified under the definition of “Appraised Value” set forth under “Description of the Mortgage Pool—Certain Calculations and Definitions” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
9
| COLLATERAL OVERVIEW (continued) |
Loan Combination Summary
Mortgaged Property Name(1) | Mortgage Loan Cut-off Date Balance | Mortgage Loan as Approx. % of Initial Pool Balance | Aggregate Pari Passu Companion Loan Cut-off Date Balance | Loan Combination Cut-off Date Balance | Controlling Pooling/Trust and Servicing Agreement (“Controlling PSA”)(2) | Master Servicer / Outside Servicer | Special Servicer / Outside Special Servicer | |||||||||
| Station Place III | $50,000,000 | 5.1% | $140,000,000 | $190,000,000 | JPMDB 2017-C7(3) | Midland(3) | Midland(3) | |||||||||
| Pleasant Prairie Premium Outlets | $41,000,000 | 4.2% | $104,000,000 | $145,000,000 | CGCMT 2017-P8 | Wells Fargo | KeyBank | |||||||||
| Marriott LAX | $39,689,333 | 4.1% | $105,623,236 | $145,312,569 | CGCMT 2017-C4 | Midland | Midland | |||||||||
| Corporate Woods Portfolio | $35,577,660 | 3.6% | $185,378,331 | $220,955,991 | CGCMT 2017-P8 | Wells Fargo | KeyBank | |||||||||
| 50 Varick Street | $35,000,000 | 3.6% | $42,890,000 | $77,890,000 | UBS 2017-C4(4) | Wells Fargo(4) | Rialto(4) | |||||||||
| Mall of Louisiana | $28,000,000 | 2.9% | $297,000,000 | $325,000,000 | BANK 2017-BNK7 | Wells Fargo | Rialto | |||||||||
| IGT Reno | $25,000,000 | 2.6% | $55,000,000 | $80,000,000 | CD 2017-CD5 | Wells Fargo | Rialto | |||||||||
| Chelsea Multifamily Portfolio | $25,000,000 | 2.6% | $50,000,000 | $75,000,000 | CGCMT 2017-C4(5)(6) | Midland(5) | Midland(5) | |||||||||
| Westin Crystal City | $24,000,000 | 2.5% | $24,000,000 | $48,000,000 | CGCMT 2017-C4(5)(6) | Midland(5) | Midland(5) | |||||||||
| Capital Centers II & III | $21,443,357 | 2.2% | $26,928,867 | $48,372,224 | JPMDB 2017-C7(3) | Midland(3) | Midland(3) | |||||||||
| Walgreens Witkoff Portfolio | $16,150,000 | 1.7% | $32,000,000 | $48,150,000 | JPMDB 2017-C7(3) | Midland(3) | Midland(3) | |||||||||
| Bank of America Office Campus Building 600 | $9,935,000 | 1.0% | $20,000,000 | $29,935,000 | UBS 2017-C4(7) | Wells Fargo(6) | Rialto(6) | |||||||||
| (1) | Each of the mortgage loans included in the issuing entity that is secured by a mortgaged property or portfolio of mortgaged properties identified in the table above, together with the related companion loan(s) (none of which is included in the issuing entity), is referred to in this Term Sheet as a “loan combination”. See “Description of the Mortgage Pool—The Loan Combinations” in the Preliminary Prospectus. |
| (2) | Each loan combination will be serviced under the related Controlling PSA, and the controlling class representative (or an equivalent entity), if any, under the related Controlling PSA (or such other party as is designated under the related Controlling PSA) will be entitled to exercise the rights of controlling note holder for the subject loan combination, except as otherwise discussed in footnotes (4) and (5) below. |
| (3) | Each of the Station Place III controlling pari passu companion loan (currently held by JP Morgan Chase Bank, National Association), the Capital Centers II & III controlling pari passu companion loan (currently held by Deutsche Bank AG, acting through its New York Branch) and the Walgreens Witkoff Portfolio controlling pari passu companion loan (currently held by Deutsche Bank AG, acting through its New York Branch) is expected to be contributed to the JPMDB 2017-C7 securitization transaction. Although the JPMDB 2017-C7 securitization transaction has not yet closed, the Station Place III loan combination, the Capital Centers II & III loan combination and the Walgreens Witkoff Portfolio loan combination are presented throughout this Term Sheet as outside serviced loan combinations (given that, based on a publicly available preliminary prospectus for the JPMDB 2017-C7 securitization transaction, the anticipated closing date for the JPMDB 2017-C7 securitization transaction is the same as the anticipated closing date for this securitization transaction). Accordingly, each of the Station Place III loan combination, the Capital Center II & III loan combination and the Walgreens Witkoff Portfolio loan combination is expected to be (and information presented in the foregoing table is based on the assumption that each such loan combination will be) serviced and administered pursuant to the JPMDB 2017-C7 pooling and servicing agreement. |
| (4) | The 50 Varick Street loan combination is expected to initially be serviced pursuant to the UBS 2017-C4 pooling and servicing agreement (which will be the initial Controlling PSA for such loan combination), by the outside servicer and outside special servicer set forth in the table above. The information in the preceding sentence and the foregoing table for the 50 Varick Street loan combination is, in part, based on a publicly available preliminary prospectus for the UBS 2017-C4 securitization transaction. Notwithstanding the foregoing, upon the inclusion of the related controlling pari passu companion loan, which is currently held by Ladder Capital Finance LLC or an affiliate, in a future securitization transaction, such loan combination will be serviced under the pooling and servicing agreement entered into in connection with that future securitization, which will then be the applicable Controlling PSA for such loan combination. Although the UBS 2017-C4 pooling and servicing agreement will initially be the Controlling PSA for the 50 Varick Street loan combination, the holder of the related controlling pari passu companion loan for such loan combination will be the directing holder for such loan combination while it is serviced under the UBS 2017-C4 pooling and servicing agreement and, solely as to such loan combination, will exercise all rights normally exercised by the UBS 2017-C4 directing certificateholder with respect to most other mortgage loans serviced under the UBS 2017-C4 pooling and servicing agreement. |
| (5) | Each of the Chelsea Multifamily Portfolio loan combination and the Westin Crystal City loan combination will initially be serviced by the master servicer and the special servicer pursuant to the CGCMT 2017-C4 pooling and servicing agreement. In the case of each such loan combination, upon the inclusion of the related controlling pari passu companion loan in a future securitization transaction, the subject loan combination will be serviced under the pooling and servicing agreement entered into in connection with that future securitization, which will then be the applicable Controlling PSA for such loan combination. Although the CGCMT 2017-C4 pooling and servicing agreement will initially be the Controlling PSA for each of the Chelsea Multifamily Portfolio loan combination and the Westin Crystal City loan combination, the holder of the related controlling companion loan for each such loan combination will be the Directing Holder of the subject loan combination while it is serviced under the CGCMT 2017-C4 pooling and servicing agreement and, solely as to the subject loan combination, will exercise all rights normally exercised by the CGCMT 2017-C4 controlling class representative with respect to other loan combinations for which the CGCMT 2017-C4 pooling and servicing agreement is the Controlling PSA. |
| (6) | The Bank of America Office Campus Building 600 controlling pari passu companion loan is currently held by Ladder Capital Finance LLC or an affiliate, but is expected to be contributed to the UBS 2017-C4 securitization transaction. Although the UBS 2017-C4 securitization transaction has not yet closed, the Bank of America Office Campus Building 600 loan combination is presented throughout this Term Sheet as an outside serviced loan combination (given that, based on a publicly available preliminary prospectus for the UBS 2017-C4 securitization transaction, the anticipated closing date for the UBS 2017-C4 securitization transaction is prior to the anticipated closing date for this securitization transaction). Accordingly, the Bank of America Office Campus Building 600 loan combination is expected to be (and information presented in the foregoing table is based on the assumption that such loan combination will be) serviced and administered pursuant to the UBS 2017-C4 pooling and servicing agreement. |
Mortgage Loans with Existing Mezzanine Debt or Subordinate Debt(1)
Mortgaged Property Name | Mortgage Loan Cut-off Date Balance | Aggregate Pari Passu Companion Loan Cut-off Date Balance | Mezzanine Debt Cut-off Date Balance | Other Subordinate Debt Cut-off Date Balance | Cut-off Date Total Debt Balance(2) | Wtd. Avg Cut-off Date Total Debt Interest Rate(2) | Cut-off Date Mortgage Loan LTV(3) | Cut-off Date Total Debt LTV(2) | Cut-off Date Mortgage Loan UW NCF DSCR(3) | Cut-off Date Total Debt UW NCF DSCR(2) | ||||||||||
| South Station | $75,000,000 | — | $20,000,000 | — | $95,000,000 | 4.96997% | 58.8% | 74.5% | 1.72x | 1.23x | ||||||||||
| Godfrey Hotel(4) | $47,500,000 | — | — | $25,000,000 | (4) | (4) | 46.8% | (4) | 2.11x | (4) | ||||||||||
| IGT Reno | $25,000,000 | $55,000,000 | $17,500,000 | — | $97,500,000 | 5.11000% | 50.9% | 62.0% | 2.05x | 1.53x |
| (1) | See footnotes to table entitled “Mortgage Pool Characteristics” above. |
| (2) | All “Total Debt” calculations set forth in the table above include any related pari passu companion loan(s), any related subordinate companion loan(s) and any related mezzanine debt. |
| (3) | “Cut-off Date Mortgage Loan LTV” and “Cut-off Date Mortgage Loan UW NCF DSCR” calculations include any related pari passu companion loan(s). |
| (4) | The related borrower’s subordinate debt is comprised of (1) a loan with an outstanding balance of $24,875,000 secured by a junior mortgage on the related mortgaged property and (2) an unsecured bridge loan with an outstanding balance of $125,000. See “—Permitted Unsecured Debt and Other Debt” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
10
| COLLATERAL OVERVIEW (continued) |
Loan Combination Controlling Notes and Non-Controlling Notes
Mortgaged Property Name / | Controlling Note(1)(2) | Current Holder of | Current or Anticipated Holder of Securitized Note(4) | Aggregate Cut-off Date Balance | ||||||||
| Station Place III | ||||||||||||
| Note A-1 | Yes | JPMorgan Chase Bank, National Association | JPMDB 2017-C7(5) | $64,000,000 | ||||||||
| Notes A-2 and A-3 | No | JPMorgan Chase Bank, National Association | Not Identified | $50,000,000 | ||||||||
| Note A-4 | No | CREFI | CGCMT 2017-C4 | $50,000,000 | ||||||||
| Note A-5 | No | CREFI | Not Identified | $26,000,000 | ||||||||
| Pleasant Prairie Premium Outlets | ||||||||||||
| Note A-1 | Yes | — | CGCMT 2017-P8 | $34,000,000 | ||||||||
| Note A-2 | No | CREFI | CGCMT 2017-C4 | $41,000,000 | ||||||||
| Note A-3 | No | Wells Fargo Bank, National Association | Not Identified | $45,000,000 | ||||||||
| Note A-4 | No | Wells Fargo Bank, National Association | WFCM 2017-C40(6) | $25,000,000 | ||||||||
| Marriott LAX | ||||||||||||
| Note A-1-A | Yes | LCF or an affiliate | CGCMT 2017-C4 | $39,689,333 | ||||||||
| Note A-2 | No | — | LCCM 2017-LC26 | $61,518,465 | ||||||||
| Note A-3-A | No | LCF or an affiliate | Not Identified | $44,104,771 | ||||||||
| Corporate Woods Portfolio | ||||||||||||
| Notes A-1-A and A-3 | Yes (Note A-1-A) | — | CGCMT 2017-P8 | $49,933,557 | ||||||||
| Note A-1-B | No | CREFI | Not Identified | $24,966,779 | ||||||||
| Note A-2 | No | CREFI | CGCMT 2017-C4 | $35,577,660 | ||||||||
| Note A-4 | No | — | BANK 2017-BNK7 | $70,531,150 | ||||||||
| Note A-5 | No | Morgan Stanley Bank, N.A. | MSBAM 2017-C34(7) | $39,946,846 | ||||||||
| 50 Varick Street | ||||||||||||
| Note A-1 | No | LCF or an affiliate | CGCMT 2017-C4 | $35,000,000 | ||||||||
| Note A-2-A | No | LCF or an affiliate | UBS 2017-C4(8) | $25,500,000 | ||||||||
| Note A-3-A | Yes | LCF or an affiliate | Not Identified | $17,390,000 | ||||||||
| Mall of Louisiana | ||||||||||||
| Note A-1 | Yes | — | BANK 2017-BNK7 | $65,000,000 | ||||||||
| Note A-2 | No | Bank of America, National Association | MSBAM 2017-C34(7) | $44,000,000 | ||||||||
| Notes A-3-1 and A-5-2 | No | — | CGCMT 2017-P8 | $47,000,000 | ||||||||
| Note A-3-2 | No | CREFI | CGCMT 2017-C4 | $28,000,000 | ||||||||
| Note A-4 | No | — | COMM 2017-COR2 | $50,000,000 | ||||||||
| Note A-5-1 | No | Barclays Bank PLC | Not Identified | $41,000,000 | ||||||||
| Notes A-6 and A-7 | No | Barclays Bank PLC | WFCM 2017-C40(6) | $50,000,000 | ||||||||
| IGT Reno | ||||||||||||
| Note A-1-A | Yes | — | CD 2017-CD5 | $30,000,000 | ||||||||
| Note A-1-B | No | — | CGCMT 2017-B1 | $10,000,000 | ||||||||
| Note A-2-A | No | CCRE Lending | CGCMT 2017-C4 | $25,000,000 | ||||||||
| Note A-2-B | No | CCRE Lending | Not Identified | $15,000,000 | ||||||||
| Chelsea Multifamily Portfolio | ||||||||||||
| Note A-1 | Yes | CCRE Lending | Not Identified | $50,000,000 | ||||||||
| Note A-2 | No | CCRE Lending | CGCMT 2017-C4 | $25,000,000 | ||||||||
| Westin Crystal City | ||||||||||||
| Note A-1 | Yes | CCRE Lending | Not Identified | $24,000,000 | ||||||||
| Note A-2 | No | CCRE Lending | CGCMT 2017-C4 | $24,000,000 | ||||||||
| Capital Centers II & III | ||||||||||||
| Note A-1 | Yes | DBNY | JPMDB 2017-C7(5) | $26,928,867 | ||||||||
| Note A-2 | No | DBNY | CGCMT 2017-C4 | $21,443,357 | ||||||||
| Walgreens Witkoff Portfolio | ||||||||||||
| Note A-1 | Yes | DBNY | JPMDB 2017-C7(5) | $32,000,000 | ||||||||
| Note A-2 | No | DBNY | CGCMT 2017-C4 | $16,150,000 | ||||||||
| Bank of America Office Campus Building 600 | ||||||||||||
| Note A-1 | Yes | LCF or an affiliate | UBS 2017-C4(8) | $20,000,000 | ||||||||
| Note A-2 | No | LCF or an affiliate | CGCMT 2017-C4 | $9,935,000 | ||||||||
| (1) | The holder(s) of one or more specified controlling notes (collectively, the “Controlling Note”) will be the “controlling note holder(s)” entitled (directly or through a representative) to (a) approve or, in some cases, direct material servicing decisions involving the related loan combination (while the remaining such holder(s) generally are only entitled to non-binding consultation rights in such regard), and (b) in some cases, replace the applicable special servicer with respect to such loan combination with or without cause. See “Description of the Mortgage Pool—The Loan Combinations” and “The Pooling and Servicing Agreement—Directing Holder” in the Preliminary Prospectus. |
| (2) | The holder(s) of the note(s) other than the Controlling Note (each, a “Non-Controlling Note”) will be the “non-controlling note holder(s)” generally entitled (directly or through a representative) to certain non-binding consultation rights with respect to any decisions as to which the holder of the Controlling Note has consent rights involving the related loan combination, subject to certain exceptions, including that in certain cases where the related Controlling Note is a B-note such consultation rights will not be afforded to the holder(s) of the Non-Controlling Notes until after a control trigger event has occurred with respect to either such Controlling Note or certain certificates backed thereby, in each case as set forth in the related co-lender agreement. See “Description of the Mortgage Pool—The Loan Combinations” in the Preliminary Prospectus. |
| (3) | Unless otherwise specified, with respect to each loan combination, any related unsecuritized Controlling Note and/or Non-Controlling Note may be further split, modified, combined and/or reissued (prior to its inclusion in a securitization transaction) as one or multiple Controlling Notes or Non-Controlling Notes, as the case may be, subject to the terms of the related co-lender agreement (including that the aggregate principal balance, weighted average interest rate and certain other material terms cannot be changed). In connection with the foregoing, any such split, modified or combined Controlling Note or Non-Controlling Note, as the case may be, may be transferred to one or multiple parties (not identified in the table above) prior to its inclusion in a future commercial mortgage securitization transaction. |
| (4) | Unless otherwise specified, with respect to each loan combination, each related unsecuritized pari passu companion loan (both controlling and non-controlling) is expected to be contributed to one or more future commercial mortgage securitization transactions. Under the column “Current or Anticipated Holder of Securitized Note”, (i) the identification of a securitization trust means we have identified an outside securitization that has closed or as to which a preliminary prospectus or final prospectus has printed that has included or is expected to include the subject Controlling Note or Non-Controlling Note, as the case may be, (ii) “Not Identified” means no preliminary prospectus or final prospectus has printed that identifies the future outside securitization that is expected to include the subject Controlling Note or Non-Controlling Note, and (iii) “Not Applicable” means the subject Controlling Note or Non-Controlling Note is not intended to be contributed to a future commercial mortgage securitization transaction. Under the column “Current Holder of Unsecuritized Note”, “—” means the subjectControlling Note or Non-Controlling Note is not an unsecuritized note and is currently held by the securitization trust referenced under the “Current or Anticipated Holder of Securitized Note” column. |
| (5) | The JPMDB 2017-C7 securitization transaction is scheduled to close on or about October 31, 2017. |
| (6) | The WFCM 2017-C40 securitization transaction is scheduled to close on or about October 17, 2017. |
| (7) | The MSBAM 2017-C34 securitization transaction is scheduled to close on or about October 19, 2017. |
| (8) | The UBS 2017-C4 securitization transaction is scheduled to close on or about October 18, 2017. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
11
| COLLATERAL OVERVIEW (continued) |
Previously Securitized Mortgaged Properties(1)
Mortgaged Property Name | Mortgage Loan Seller | City | State | Property Type | Cut-off Date Balance / Allocated Cut-off Date Balance | % of Initial Pool Balance | Previous Securitization | ||||||||
| Station Place III | CREFI | Washington | District of Columbia | Office | $50,000,000 | 5.1% | MSC 2011-C1 | ||||||||
| Pleasant Prairie Premium Outlets | CREFI | Pleasant Prairie | Wisconsin | Retail | $41,000,000 | 4.2% | Various(2) | ||||||||
| Corporate Woods Portfolio(3) | CREFI | Overland Park | Kansas | Various | $35,577,660 | 3.6% | CGCC 2014-FL1 | ||||||||
| Mall of Louisiana | CREFI | Baton Rouge | Louisiana | Retail | $28,000,000 | 2.9% | MLMT 2006-C1 | ||||||||
| Torrey Executive Centre | CCRE | San Diego | California | Office | $25,200,000 | 2.6% | WBCMT 2007-C33 | ||||||||
| 2100 West Loop | GACC | Houston | Texas | Office | $22,400,000 | 2.3% | MSC 2007-IQ14 | ||||||||
| Capital Center II | GACC | Rancho Cordova | California | Office | $12,114,392 | 1.2% | BSCMS 2006-PW13 | ||||||||
| Capital Center III | GACC | Rancho Cordova | California | Office | $9,328,966 | 1.0% | BSCMS 2006-PW13 | ||||||||
| Worcester | GACC | Worcester | Massachusetts | Retail | $2,980,529 | 0.3% | LBUBS 2008-C1 | ||||||||
| New Bedford | GACC | New Bedford | Massachusetts | Retail | $2,455,325 | 0.3% | LBUBS 2008-C1 | ||||||||
| Staten Island | GACC | Staten Island | New York | Retail | $2,389,675 | 0.2% | LBUBS 2008-C1 | ||||||||
| Windham | GACC | Windham | Maine | Retail | $2,205,854 | 0.2% | LBUBS 2008-C1 | ||||||||
| Yarmouth | GACC | South Yarmouth | Massachusetts | Retail | $2,166,463 | 0.2% | LBUBS 2008-C1 | ||||||||
| Hampstead | GACC | East Hampstead | New Hampshire | Retail | $1,982,642 | 0.2% | LBUBS 2008-C1 | ||||||||
| Woodbury | GACC | Woodbury | New Jersey | Retail | $1,969,512 | 0.2% | LBUBS 2008-C1 | ||||||||
| Old Orchard Center | CCRE | Valencia | California | Retail | $14,383,072 | 1.5% | COMM 2012-CR4 | ||||||||
| Mills Pointe Shopping Center | CCRE | Carrollton | Texas | Retail | $9,700,000 | 1.0% | GCCFC 2005-GG3 | ||||||||
| Hickory Village | CREFI | Fort Collins | Colorado | Manufactured Housing | $8,139,268 | 0.8% | MSC 2007-IQ16 | ||||||||
| Carolina Center Business Park | CREFI | West Columbia | South Carolina | Industrial | $6,741,335 | 0.7% | BACM 2008-1 | ||||||||
| West End Commons | CCRE | Cartersville | Georgia | Mixed Use | $5,224,813 | 0.5% | LBCMT 2007-C3 | ||||||||
| Vail Ranch Towne Square | CCRE | Temecula | California | Mixed Use | $5,000,000 | 0.5% | CGCMT 2007-C6 | ||||||||
| (1) | The table above includes mortgaged properties securing mortgage loans for which the most recent prior financing of all or a significant portion of such mortgaged properties was included in a securitization. Information under “Previous Securitization” represents the most recent such securitization with respect to each of those mortgaged properties. The information in the above table is based solely on information provided by the related borrower or obtained through searches of a third-party database, and has not otherwise been confirmed by the mortgage loan sellers. |
| (2) | The Pleasant Prairie Premium Outlets mortgaged property was previously securitized in the JPMCC 2007-CB18, WBCMT 2006-C25 and WBCMT 2006-C23 transactions. |
| (3) | All 16 of the Corporate Woods Portfolio mortgaged properties were previously securitized in the CGCC 2014-FL1 transaction. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
12
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The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
13
| COLLATERAL OVERVIEW (continued) |
Property Types
| Property Type / Detail | Number of Mortgaged Properties | Aggregate Cut-off Date Balance(1) | % of Initial Pool Balance(1) | Wtd. Avg. Underwritten NCF DSCR(2)(3) | Wtd. Avg. Cut-off Date LTV Ratio(2)(3) | Wtd. Avg. Debt Yield on Underwritten NOI(2)(3) | ||||||||||||
| Office | 26 | $271,586,389 | 27.8 | % | 1.98 | x | 62.3 | % | 10.6 | % | ||||||||
| Suburban | 23 | 170,986,389 | 17.5 | 1.72 | x | 67.0 | % | 10.7 | % | |||||||||
| CBD | 3 | 100,600,000 | 10.3 | 2.43 | x | 54.4 | % | 10.6 | % | |||||||||
| Retail | 26 | $244,628,644 | 25.0 | % | 1.77 | x | 61.8 | % | 9.8 | % | ||||||||
| Anchored | 9 | 117,529,697 | 12.0 | 1.54 | x | 66.0 | % | 9.7 | % | |||||||||
| Outlet Center | 1 | 41,000,000 | 4.2 | 2.66 | x | 50.0 | % | 11.2 | % | |||||||||
| Single Tenant Retail | 8 | 37,674,146 | 3.9 | 1.65 | x | 62.0 | % | 7.8 | % | |||||||||
| Super Regional Mall | 1 | 28,000,000 | 2.9 | 1.85 | x | 57.0 | % | 11.1 | % | |||||||||
| Unanchored | 5 | 14,174,800 | 1.5 | 1.38 | x | 70.1 | % | 9.6 | % | |||||||||
| Shadow Anchored | 2 | 6,250,000 | 0.6 | 1.52 | x | 63.0 | % | 10.4 | % | |||||||||
| Hospitality | 8 | $183,232,278 | 18.8 | % | 2.06 | x | 52.2 | % | 14.7 | % | ||||||||
| Full Service | 5 | 161,943,253 | 16.6 | 2.06 | x | 51.4 | % | 14.6 | % | |||||||||
| Limited Service | 2 | 11,750,000 | 1.2 | 2.02 | x | 58.3 | % | 15.9 | % | |||||||||
| Select Service | 1 | 9,539,025 | 1.0 | 2.12 | x | 58.2 | % | 15.5 | % | |||||||||
| Mixed Use | 5 | $135,224,813 | 13.8 | % | 1.96 | x | 55.2 | % | 9.7 | % | ||||||||
| Office/Retail | 3 | 85,224,813 | 8.7 | 1.71 | x | 59.1 | % | 8.9 | % | |||||||||
| Office/Industrial | 1 | 25,000,000 | 2.6 | 2.05 | x | 50.9 | % | 13.3 | % | |||||||||
| Retail/Office/Parking | 1 | 25,000,000 | 2.6 | 2.71 | x | 46.3 | % | 9.0 | % | |||||||||
| Multifamily | 17 | $69,359,887 | 7.1 | % | 1.54 | x | 59.3 | % | 7.8 | % | ||||||||
| Mid Rise | 14 | 44,500,000 | 4.6 | 1.48 | x | 57.6 | % | 7.1 | % | |||||||||
| Garden | 3 | 24,859,887 | 2.5 | 1.65 | x | 62.4 | % | 9.1 | % | |||||||||
| Manufactured Housing | 6 | $33,156,872 | 3.4 | % | 1.57 | x | 61.9 | % | 10.1 | % | ||||||||
| Industrial | 3 | $21,041,335 | 2.2 | % | 2.20 | x | 62.5 | % | 12.8 | % | ||||||||
| Flex | 2 | 14,300,000 | 1.5 | 2.57 | x | 60.6 | % | 14.0 | % | |||||||||
| Flex/Warehouse | 1 | 6,741,335 | 0.7 | 1.43 | x | 66.7 | % | 10.3 | % | |||||||||
| Self Storage | 2 | $9,204,677 | 0.9 | % | 1.39 | x | 70.9 | % | 9.0 | % | ||||||||
| Other | 1 | $6,000,000 | 0.6 | % | 1.96 | x | 47.5 | % | 10.6 | % | ||||||||
| Land | 1 | $3,625,000 | 0.4 | % | 1.97 | x | 58.0 | % | 8.3 | % | ||||||||
| Total | 95 | $977,059,894 | 100.0 | % | 1.89 | x | 59.1 | % | 10.9 | % | ||||||||
| (1) | Calculated based on the mortgaged property’s allocated loan amount for mortgage loans secured by more than one mortgaged property. |
| (2) | Weighted average based on the mortgaged property’s allocated loan amount for mortgage loans secured by more than one mortgaged property. |
| (3) | See footnotes to the table entitled “Mortgage Pool Characteristics” above. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
14
| COLLATERAL OVERVIEW (continued) |
Geographic Distribution
Property Location | Number of Mortgaged Properties | Aggregate Cut-off Date Balance(1) | % of Initial Pool Balance(1) | Aggregate Appraised Value(2) | % of Total Appraised Value | Underwritten | % of Total Underwritten NOI | ||||||||||||||
| California | 12 | $201,754,682 | 20.6 | % | $605,120,000 | 16.8 | % | $41,130,291 | 18.2 | % | |||||||||||
| New York | 17 | 110,139,675 | 11.3 | 375,900,000 | 10.4 | 15,993,659 | 7.1 | ||||||||||||||
| Massachusetts | 5 | 100,077,317 | 10.2 | 184,400,000 | 5.1 | 9,510,207 | 4.2 | ||||||||||||||
| Nevada | 4 | 52,000,000 | 5.3 | 195,980,000 | 5.4 | 13,298,635 | 5.9 | ||||||||||||||
| District of Columbia | 1 | 50,000,000 | 5.1 | 399,000,000 | 11.1 | 22,529,370 | 10.0 | ||||||||||||||
| Illinois | 1 | 47,500,000 | 4.9 | 101,400,000 | 2.8 | 7,383,517 | 3.3 | ||||||||||||||
| Georgia | 9 | 47,128,838 | 4.8 | 75,760,000 | 2.1 | 5,740,676 | 2.5 | ||||||||||||||
| Wisconsin | 1 | 41,000,000 | 4.2 | 290,000,000 | 8.1 | 16,273,310 | 7.2 | ||||||||||||||
| Kentucky | 1 | 38,540,000 | 3.9 | 70,500,000 | 2.0 | 5,840,507 | 2.6 | ||||||||||||||
| Kansas | 16 | 35,577,660 | 3.6 | 295,500,000 | 8.2 | 22,612,063 | 10.0 | ||||||||||||||
| Florida | 3 | 34,147,000 | 3.5 | 77,300,000 | 2.1 | 4,732,214 | 2.1 | ||||||||||||||
| Pennsylvania | 2 | 32,990,015 | 3.4 | 53,360,000 | 1.5 | 2,991,080 | 1.3 | ||||||||||||||
| Texas | 2 | 32,100,000 | 3.3 | 46,080,000 | 1.3 | 3,499,230 | 1.5 | ||||||||||||||
| Louisiana | 1 | 28,000,000 | 2.9 | 570,000,000 | 15.8 | 36,062,923 | 16.0 | ||||||||||||||
| Colorado | 4 | 24,956,872 | 2.6 | 41,510,000 | 1.2 | 2,579,578 | 1.1 | ||||||||||||||
| Virginia | 1 | 24,000,000 | 2.5 | 84,500,000 | 2.3 | 6,414,594 | 2.8 | ||||||||||||||
| Delaware | 1 | 15,600,000 | 1.6 | 21,300,000 | 0.6 | 1,666,353 | 0.7 | ||||||||||||||
| North Carolina | 1 | 9,620,000 | 1.0 | 13,200,000 | 0.4 | 1,031,892 | 0.5 | ||||||||||||||
| Washington | 1 | 8,000,000 | 0.8 | 13,000,000 | 0.4 | 1,134,392 | 0.5 | ||||||||||||||
| South Carolina | 1 | 6,741,335 | 0.7 | 10,100,000 | 0.3 | 694,016 | 0.3 | ||||||||||||||
| Missouri | 1 | 6,000,000 | 0.6 | 12,620,000 | 0.4 | 635,650 | 0.3 | ||||||||||||||
| Utah | 1 | 5,992,677 | 0.6 | 8,600,000 | 0.2 | 562,109 | 0.2 | ||||||||||||||
| West Virginia | 1 | 5,239,625 | 0.5 | 9,975,000 | 0.3 | 871,918 | 0.4 | ||||||||||||||
| Michigan | 1 | 3,650,000 | 0.4 | 5,600,000 | 0.2 | 331,402 | 0.1 | ||||||||||||||
| Maryland | 1 | 3,625,000 | 0.4 | 6,250,000 | 0.2 | 300,006 | 1.3 | ||||||||||||||
| Ohio | 1 | 3,146,319 | 0.3 | 4,450,000 | 0.1 | 308,537 | 0.1 | ||||||||||||||
| Connecticut | 1 | 2,394,872 | 0.2 | 4,120,000 | 0.1 | 301,714 | 0.1 | ||||||||||||||
| Maine | 1 | 2,205,854 | 0.2 | 8,400,000 | 0.2 | 468,251 | 0.2 | ||||||||||||||
| New Hampshire | 1 | 1,982,642 | 0.2 | 7,550,000 | 0.2 | 420,868 | 0.2 | ||||||||||||||
| New Jersey | 1 | 1,969,512 | 0.2 | 7,500,000 | 0.2 | 418,081 | 0.2 | ||||||||||||||
| Iowa | 1 | 980,000 | 0.1 | 1,400,000 | 0.0 | 88,060 | 0.0 | ||||||||||||||
| Total | 95 | $977,059,894 | 100.0 | % | $3,600,375,000 | 100.0 | % | $225,825,101 | 100.0 | % | |||||||||||
| (1) | Calculated based on the mortgaged property’s allocated loan amount for mortgage loans secured by more than one mortgaged property. |
| (2) | Aggregate Appraised Values and Underwritten NOI reflect the aggregate values without any reduction for the pari passu companion loan(s). |
| (3) | The Capital Centers II & III and Walgreens Witkoff Portfolio mortgage loans are mortgage loans secured by multiple properties, however these mortgage loans were underwritten as a portfolio as a whole. With respect to states containing mortgaged properties secured by these mortgage loans, the information in the above table allocates Underwritten NOI based upon each respective mortgaged property’s allocated loan amount as set forth on Annex A. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
15
COLLATERAL OVERVIEW (continued)
| Distribution of Cut-off Date Balances | |||||||||||
| Range of Cut-off Date Balances ($) | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
| 980,000- 4,999,999 | 11 | $33,690,810 | 3.4 | % | |||||||
| 5,000,000 - 9,999,999 | 17 | 125,646,743 | 12.9 | ||||||||
| 10,000,000 - 19,999,999 | 8 | 120,721,992 | 12.4 | ||||||||
| 20,000,000 - 29,999,999 | 12 | 294,793,357 | 30.2 | ||||||||
| 30,000,000 - 39,999,999 | 5 | 188,706,992 | 19.3 | ||||||||
| 40,000,000 - 49,999,999 | 2 | 88,500,000 | 9.1 | ||||||||
| 50,000,000 - 59,999,999 | 1 | 50,000,000 | 5.1 | ||||||||
| 60,000,000 - 75,000,000 | 1 | 75,000,000 | 7.7 | ||||||||
| Total | 57 | $977,059,894 | 100.0 | % | |||||||
| Distribution of UW NCF DSCRs(1) | |||||||||||
| Range of UW DSCR (x) | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
| 1.10 - 1.20 | 1 | $16,150,000 | 1.7 | % | |||||||
| 1.21 - 1.50 | 15 | 208,932,345 | 21.4 | ||||||||
| 1.51 – 2.00 | 26 | 414,468,898 | 42.4 | ||||||||
| 2.01 – 2.50 | 10 | 190,408,651 | 19.5 | ||||||||
| 2.51 – 3.00 | 4 | 140,000,000 | 14.3 | ||||||||
| 3.01 – 3.45 | 1 | 7,100,000 | 0.7 | ||||||||
| Total | 57 | $977,059,894 | 100.0 | % | |||||||
| (1) See footnotes (1) and (6) to the table entitled “Mortgage Pool Characteristics” above. | |||||||||||
| Distribution of Amortization Types(1) | |||||||||||
| Amortization Type | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
| Interest Only | 17 | $398,290,000 | 40.8 | % | |||||||
| Interest Only, Then Amortizing(2) | 18 | 298,897,000 | 30.6 | ||||||||
| Amortizing (30 Years) | 15 | 223,604,349 | 22.9 | ||||||||
| Amortizing (25 Years) | 4 | 29,203,545 | 3.0 | ||||||||
| Interest Only, Then Amortizing – ARD(2) | 1 | 16,150,000 | 1.7 | ||||||||
| Interest Only – ARD | 2 | 10,915,000 | 1.1 | ||||||||
| Total | 57 | $977,059,894 | 100.0 | % | |||||||
| (1) All of the mortgage loans will have balloon payments at maturity date or have an anticipated repayment date, as applicable. | |||||||||||
| (2) Original partial interest only periods range from 12 to 84 months. | |||||||||||
| Distribution of Lockboxes | |||||||||||
| Lockbox Type | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
| Hard | 29 | $693,709,614 | 71.0 | % | |||||||
| Springing | 27 | 258,350,280 | 26.4 | ||||||||
| Soft | 1 | 25,000,000 | 2.6 | ||||||||
| Total | 57 | $977,059,894 | 100.0 | % | |||||||
| Distribution of Cut-off Date LTV Ratios(1) | |||||||||||
| Range of Cut-off Date LTV (%) | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
| 39.7 - 50.0 | 7 | $214,689,333 | 22.0 | % | |||||||
| 50.1 - 60.0 | 21 | 371,752,443 | 38.0 | ||||||||
| 60.1 - 70.0 | 23 | 307,312,140 | 31.5 | ||||||||
| 70.1 - 75.0 | 5 | 67,155,978 | 6.9 | ||||||||
| 75.1 - 78.3 | 1 | 16,150,000 | 1.7 | ||||||||
| Total | 57 | $977,059,894 | 100.0 | % | |||||||
| (1) See footnotes (1) and (5) to the table entitled “Mortgage Pool Characteristics” above. | |||||||||||
| Distribution of Maturity Date/ARD LTV Ratios(1) | |||||||||||
| Range of Maturity Date/ARD LTV (%) | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
| 37.7 - 49.9 | 14 | $267,826,775 | 27.4 | % | |||||||
| 50.0 - 54.9 | 14 | 194,838,019 | 19.9 | ||||||||
| 55.0 - 59.9 | 17 | 372,608,099 | 38.1 | ||||||||
| 60.0 - 64.9 | 4 | 49,895,000 | 5.1 | ||||||||
| 65.0 - 69.9 | 6 | 74,762,000 | 7.7 | ||||||||
| 70.0 - 73.6 | 2 | 17,130,000 | 1.8 | ||||||||
| Total | 57 | $977,059,894 | 100.0 | % | |||||||
| (1) See footnotes (1), (3) and (5) to the table entitled “Mortgage Pool Characteristics” above. | |||||||||||
| Distribution of Loan Purpose | |||||||||||
| Loan Purpose | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
| Refinance | 28 | $415,285,362 | 42.5 | % | |||||||
| Acquisition | 23 | 392,674,531 | 40.2 | ||||||||
| Recapitalization | 4 | 133,900,000 | 13.7 | ||||||||
| Acquisition/Refinance | 2 | 35,200,000 | 3.6 | ||||||||
| Total | 57 | $977,059,894 | 100.0 | % | |||||||
| Distribution of Mortgage Rates | |||||||||||
| Range of Mortgage Rates (%) | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
| 3.250 - 4.000 | 5 | $149,239,625 | 15.3 | % | |||||||
| 4.001 - 4.500 | 15 | 390,990,284 | 40.0 | ||||||||
| 4.501 - 5.000 | 22 | 287,758,428 | 29.5 | ||||||||
| 5.001 - 5.500 | 13 | 131,867,621 | 13.5 | ||||||||
| 5.501 - 5.600 | 2 | 17,203,935 | 1.8 | ||||||||
| Total | 57 | $977,059,894 | 100.0 | % | |||||||
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
16
COLLATERAL OVERVIEW (continued)
| Distribution of Debt Yield on Underwritten NOI(1) | |||||||||||
| Range of Debt Yields on Underwritten NOI (%) | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
| 6.2 - 7.9 | 3 | $62,150,000 | 6.4 | % | |||||||
| 8.0 - 8.9 | 9 | 209,901,268 | 21.5 | ||||||||
| 9.0 - 9.9 | 12 | 139,792,083 | 14.3 | ||||||||
| 10.0 - 10.9 | 10 | 99,306,411 | 10.2 | ||||||||
| 11.0 - 19.6 | 23 | 465,910,132 | 47.7 | ||||||||
| Total | 57 | $977,059,894 | 100.0 | % | |||||||
| (1) See footnotes (1) and (7) to the table entitled “Mortgage Pool Characteristics” above. | |||||||||||
| Distribution of Debt Yield on Underwritten NCF(1) | |||||||||||
| Range of Debt Yields on Underwritten NCF (%) | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
| 6.2 - 7.9 | 4 | $137,150,000 | 14.0 | % | |||||||
| 8.0 - 8.9 | 16 | 227,160,690 | 23.2 | ||||||||
| 9.0 - 9.9 | 11 | 152,396,468 | 15.6 | ||||||||
| 10.0 - 10.9 | 10 | 131,310,961 | 13.4 | ||||||||
| 11.0 - 17.7 | 16 | 329,041,775 | 33.7 | ||||||||
| Total | 57 | $977,059,894 | 100.0 | % | |||||||
| (1) See footnotes (1) and (7) to the table entitled “Mortgage Pool Characteristics” above. | |||||||||||
| Mortgage Loans with Original Partial Interest Only Periods | |||||||||||
| Original Partial Interest Only Period (months) | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
| 12 | 3 | $39,912,000 | 4.1 | % | |||||||
| 18 | 1 | $7,200,000 | 0.7 | % | |||||||
| 24 | 5 | $45,970,000 | 4.7 | % | |||||||
| 36 | 3 | $66,775,000 | 6.8 | % | |||||||
| 42 | 1 | $2,600,000 | 0.3 | % | |||||||
| 60 | 4 | $97,900,000 | 10.0 | % | |||||||
| 72 | 1 | $16,150,000 | 1.7 | % | |||||||
| 84 | 1 | $38,540,000 | 3.9 | % | |||||||
| Distribution of Original Terms to Maturity/ARD(1) | |||||||||||
| Original Term to Maturity/ARD (months) | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
| 60 | 7 | $109,385,087 | 11.2 | % | |||||||
| 120 | 48 | 807,739,807 | 82.7 | ||||||||
| 121 | 1 | 50,000,000 | 5.1 | ||||||||
| 123 | 1 | 9,935,000 | 1.0 | ||||||||
| Total | 57 | $977,059,894 | 100.0 | % | |||||||
| (1) See footnote (3) to the table entitled “Mortgage Pool Characteristics” above. | |||||||||||
| Distribution of Remaining Terms to Maturity/ARD(1) | |||||||||||
| Range of Remaining Terms to Maturity/ARD (months) | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
| 58 – 60 | 7 | $109,385,087 | 11.2 | % | |||||||
| 113 - 120 | 49 | 817,674,807 | 83.7 | ||||||||
| 121 | 1 | 50,000,000 | 5.1 | ||||||||
| Total | 57 | $977,059,894 | 100.0 | % | |||||||
| (1) See footnote (3) to the table entitled “Mortgage Pool Characteristics” above. | |||||||||||
| Distribution of Original Amortization Terms(1) | |||||||||||
| Original Amortization Term (months) | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
| Interest Only | 19 | $409,205,000 | 41.9 | % | |||||||
| 300 | 5 | 56,203,545 | 5.8 | ||||||||
| 360 | 33 | 511,651,349 | 52.4 | ||||||||
| Total | 57 | $977,059,894 | 100.0 | % | |||||||
| (1) All of the mortgage loans will have balloon payments at maturity or have an anticipated repayment date, as applicable. | |||||||||||
| Distribution of Remaining Amortization Terms(1) | |||||||||||
| Range of Remaining Amortization Terms (months) | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
| Interest Only | 19 | $409,205,000 | 41.9 | % | |||||||
| 298 - 300 | 5 | 56,203,545 | 5.8 | ||||||||
| 353 - 360 | 33 | 511,651,349 | 52.4 | ||||||||
| Total | 57 | $977,059,894 | 100.0 | % | |||||||
| (1) All of the mortgage loans will have balloon payments at maturity or have an anticipated repayment date, as applicable. | |||||||||||
| Distribution of Prepayment Provisions | |||||||||||
| Prepayment Provision | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
| Defeasance | 47 | $773,890,269 | 79.2 | % | |||||||
| Yield Maintenance | 7 | 142,254,625 | 14.6 | ||||||||
| Defeasance or Yield Maintenance | 3 | 60,915,000 | 6.2 | ||||||||
| Total | 57 | $977,059,894 | 100.0 | % | |||||||
| Distribution of Escrow Types | |||||||||||
| Escrow Type | Number of Mortgage Loans | Cut-off Date Balance | % of Initial Pool Balance | ||||||||
| Real Estate Tax | 46 | $682,695,561 | 69.9 | % | |||||||
| Replacement Reserves(1) | 44 | $699,250,936 | 71.6 | % | |||||||
| Insurance | 38 | $486,464,544 | 49.8 | % | |||||||
| TI/LC(2) | 26 | $450,625,475 | 64.0 | % | |||||||
| (1) Includes mortgage loans with FF&E reserves. | |||||||||||
| (2) Percentage of the portion of the Initial Pool Balance secured by office, retail, mixed use and industrial properties as well as one hospitality property and one multifamily property each with commercial tenants. | |||||||||||
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
17
SHORT TERM CERTIFICATE PRINCIPAL PAY DOWN SCHEDULE
Class A-2 Principal Pay Down(1)(2)
| Mortgage Loan Name | Property Type | Cut-off Date Balance | % of Initial Pool Balance | Remaining Loan Term | Underwritten NCF DSCR | Debt Yield on Underwritten NOI | Cut-off Date LTV Ratio | |||||||
| Godfrey Hotel | Hospitality | $47,500,000 | 4.9% | 60 | 2.11x | 15.5% | 46.8% | |||||||
| 2100 West Loop | Office | $22,400,000 | 2.3% | 60 | 1.62x | 11.1% | 69.8% | |||||||
| Old Orchard Center | Retail | $14,383,072 | 1.5% | 59 | 1.35x | 9.5% | 62.8% | |||||||
| Mills Pointe Shopping Center | Retail | $9,700,000 | 1.0% | 60 | 1.39x | 10.4% | 69.4% | |||||||
| Phoenix Business Park | Industrial | $7,200,000 | 0.7% | 60 | 1.70x | 11.8% | 67.9% | |||||||
| Quail Acres Apartments | Multifamily | $4,990,015 | 0.5% | 58 | 1.25x | 9.1% | 64.3% | |||||||
| Harbor Storage Vero Beach | Self Storage | $3,212,000 | 0.3% | 60 | 1.29x | 8.3% | 73.0% |
| (1) | The table above presents the mortgage loans whose balloon payments would be applied to pay down the certificate balance of the Class A-2 certificates assuming no prepayments prior to the maturity date or any anticipated repayment date, as applicable, for any mortgage loan and applying the modeling assumptions described under “Yield, Prepayment and Maturity Considerations” in the Preliminary Prospectus, including the assumptions that (i) no mortgage loan in the pool experiences prepayments prior to its stated maturity date or anticipated repayment date, as applicable, or defaults or losses; (ii) there are no extensions of the maturity date of any mortgage loan in the pool; and (iii) each mortgage loan in the pool is paid in full on its stated maturity date or, if applicable, anticipated repayment date. Each class of certificates, including the Class A-2 certificates, evidences undivided ownership interests in the entire pool of mortgage loans. Debt service coverage ratio, debt yield and loan-to-value ratio information does not take into account any subordinate debt (whether or not secured by the mortgaged property) that currently exists or is allowed under the terms of any mortgage loan. See Annex A to the Preliminary Prospectus. See the footnotes to the table entitled “Mortgage Pool Characteristics” above. |
| (2) | See footnotes to the table entitled “Mortgage Pool Characteristics” above. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| STRUCTURAL OVERVIEW |
| Distributions | The aggregate amount available for distribution to holders of the certificates on each distribution date will be the gross amount of interest, principal, yield maintenance charges and prepayment premiums collected with respect to the mortgage loans in the applicable one-month collection period, net of specified expenses of the issuing entity, including fees payable therefrom to, and losses, liabilities, advances, costs and expenses reimbursable or indemnifiable therefrom to, the master servicer, the special servicer, the certificate administrator, the trustee, the operating advisor, the asset representations reviewer and CREFC®. |
| On each Distribution Date, funds available for distribution to holders of the Certificates (exclusive of any portion thereof that represents (i) any yield maintenance charges and prepayment premiums and/or (ii) any excess interest accrued after the related anticipated repayment date on any mortgage loan with an anticipated repayment date) (“Available Funds”) will be distributed in the following amounts and order of priority (in each case to the extent of remaining available funds): |
| 1. | Class A-1, A-2, A-3, A-4, A-AB, X-A, X-B and X-D certificates: to interest on the Class A-1, Class A-2, Class A-3, Class A-4, Class A-AB, Class X-A, Class X-B and Class X-D certificates, up to, andpro rata in accordance with, their respective interest entitlements. |
| 2. | Class A-1, A-2, A-3, A-4 and A-AB certificates: to the extent of Available Funds allocable to principal received or advanced on the mortgage loans, (i) to principal on the Class A-AB certificates until their certificate balance is reduced to the Class A-AB scheduled principal balance set forth in Annex F to the Preliminary Prospectus for the relevant Distribution Date, then (ii) to principal on the Class A-1 certificates until their certificate balance is reduced to zero, all funds available for distribution of principal remaining after the distributions to the Class A-AB certificates in clause (i) above, then (iii) to principal on the Class A-2 certificates until their certificate balance is reduced to zero, all funds available for distribution of principal remaining after the distributions to the Class A-1 certificates in clause (ii) above, then (iv) to principal on the Class A-3 certificates until their certificate balance is reduced to zero, all funds available for distribution of principal remaining after the distributions to the Class A-2 certificates in clause (iii) above, then (v) to principal on the Class A-4 certificates until their certificate balance is reduced to zero, all funds available for distribution of principal remaining after the distributions to the Class A-3 certificates in clause (iv) above and then (vi) to principal on the Class A-AB certificates until their certificate balance is reduced to zero, all funds available for distribution of principal remaining after the distributions to the Class A-4 certificates in clause (v) above. However, if the certificate balances of each and every class of the Class A-S, Class B, Class C, Class D, Class E-RR, Class F-RR, Class G-RR, Class H-RR and Class J-RR certificates have been reduced to zero as a result of the allocation of mortgage loan losses and other unanticipated expenses to those certificates, then Available Funds allocable to principal will be distributed to the Class A-1, Class A-2, Class A-3, Class A-4 and Class A-AB certificates,pro rata, based on their respective certificate balances (and the schedule for the Class A-AB principal distributions will be disregarded). |
| 3. | Class A-1, A-2, A-3, A-4 and A-AB certificates: to reimburse the Class A-1, Class A-2, Class A-3, Class A-4 and Class A-AB certificates,pro rata, for any unreimbursed losses on the mortgage loans that were previously allocated to reduce the certificate balances of those classes, together with interest at their respective pass-through rates. |
| 4. | Class A-S certificates: (i) first, to interest on the Class A-S certificates in the amount of their interest entitlement; (ii) next, to the extent of Available Funds allocable to principal remaining after distributions in respect of principal to each class of Principal Balance Certificates with a higher principal payment priority (in this case, the Class A-1, Class A-2, Class A-3, Class A-4 and Class A-AB certificates), to principal on the Class A-S certificates until their certificate balance is reduced to zero; and (iii) next, to reimburse the Class A-S certificates for any unreimbursed losses on the mortgage loans that were previously allocated to reduce the certificate balance of that class, together with interest at its pass-through rate. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| STRUCTURAL OVERVIEW (continued) |
Distributions
| (continued) | 5. | Class B certificates: (i) first, to interest on the Class B certificates in the amount of their interest entitlement; (ii) next, to the extent of Available Funds allocable to principal remaining after distributions in respect of principal to each class of Principal Balance Certificates with a higher principal payment priority (in this case, the Class A-1, Class A-2, Class A-3, Class A-4, Class A-AB and Class A-S certificates), to principal on the Class B certificates until their certificate balance is reduced to zero; and (iii) next, to reimburse Class B certificates for any unreimbursed losses on the mortgage loans that were previously allocated to reduce the certificate balance of that class, together with interest at its pass-through rate. |
| 6. | Class C certificates: (i) first, to interest on the Class C certificates in the amount of their interest entitlement; (ii) next, to the extent of Available Funds allocable to principal remaining after distributions in respect of principal to each class of Principal Balance Certificates with a higher principal payment priority (in this case, the Class A-1, Class A-2, Class A-3, Class A-4, Class A-AB, Class A-S and Class B certificates), to principal on the Class C certificates until their certificate balance is reduced to zero; and (iii) next, to reimburse the Class C certificates for any unreimbursed losses on the mortgage loans that were previously allocated to reduce the certificate balance of that class, together with interest at its pass-through rate. |
| 7. | After the Class A-1, Class A-2, Class A-3, Class A-4, Class A-AB, Class X-A, Class X-B, Class X-D, Class A-S, Class B and Class C certificates are paid all amounts to which they are entitled on such Distribution Date, the remaining Available Funds will be used to pay interest and principal and to reimburse (with interest) any unreimbursed losses to the Class D, Class E-RR, Class F-RR, Class G-RR, Class H-RR and Class J-RR certificates, sequentially in that order and in a manner analogous to the Class C certificates pursuant to clause 6 above. |
| Realized Losses | The certificate balances of the Principal Balance Certificates will each be reduced without distribution on any Distribution Date as a write-off to the extent of any loss realized on the mortgage loans allocated to such class on such Distribution Date. On each Distribution Date, any such losses will be applied to the respective classes of Principal Balance Certificates in the following order, in each case until the related certificate balance is reduced to zero: first, to the Class J-RR certificates; second, to the Class H-RR certificates; third, to the Class G-RR certificates; fourth, to the Class F-RR certificates; fifth, to the Class E-RR certificates; sixth, to the Class D certificates; seventh, to the Class C certificates; eighth, to the Class B certificates; ninth, to the Class A-S certificates; and, finallypro rata, to the Class A-1, Class A-2, Class A-3, Class A-4 and Class A-AB certificates, based on their then current respective certificate balances. The notional amount of each class of Class X Certificates will be reduced to reflect reductions in the certificate balance(s) of the class (or classes, as applicable) of Corresponding Principal Balance Certificates as a result of allocations of losses realized on the mortgage loans to such class(es) of Principal Balance Certificates. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| STRUCTURAL OVERVIEW (continued) |
Prepayment Premiums
and Yield Maintenance
| Charges | On each Distribution Date, until the notional amounts of the Class X-A, Class X-B and Class X-D certificates and the certificate balances of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-AB, Class A-S, Class B, Class C and Class D certificates have been reduced to zero, each yield maintenance charge collected on the mortgage loans during the related one-month collection period (or, in the case of an outside serviced mortgage loan, that accompanied a principal prepayment included in the Available Funds for such Distribution Date) is required to be distributed to certificateholders (excluding holders of the Class E-RR, Class F-RR, Class G-RR, Class H-RR, Class J-RR, Class S and Class R certificates) as follows: (a) first such yield maintenance charge will be allocated between (i) the group (the “YM Group A”) of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-AB, Class X-A and Class A-S certificates, (ii) the group (the “YM Group BC”) of the Class X-B, Class B and Class C certificates and (iii) the group (the “YM Group D” and, together with the YM Group A and the YM Group BC, the “YM Groups”) of the Class X-D and Class D certificates,pro rata, based upon the aggregate amount of principal distributed to the class or classes of Principal Balance Certificates in each YM Group on such Distribution Date, and (b) then the portion of such yield maintenance charge allocated to each YM Group will be further allocated as among the classes of certificates in such YM Group, in the following manner: (i) each class of Principal Balance Certificates in such YM Group will entitle the applicable certificateholders to receive on the applicable Distribution Date that portion of such yield maintenance charge equal to the product of (X) a fraction whose numerator is the amount of principal distributed to such class of Principal Balance Certificates on such Distribution Date and whose denominator is the total amount of principal distributed to all of the Principal Balance Certificates in that YM Group on such Distribution Date, (Y) the Base Interest Fraction for the related principal prepayment and such class of Principal Balance Certificates, and (Z) the portion of such yield maintenance charge allocated to such YM Group, and (ii) the portion of such yield maintenance charge allocated to such YM Group and remaining after such distributions with respect to the Principal Balance Certificates in such YM Group will be distributed to the class of Class X Certificates in such YM Group. If there is more than one class of Principal Balance Certificates in any YM Group entitled to distributions of principal on any particular Distribution Date on which yield maintenance charges are distributable to such classes, the aggregate portion of such yield maintenance charges allocated to such YM Group will be allocated among all such classes of Principal Balance Certificates up to, and on apro rata basis in accordance with, their respective entitlements in those yield maintenance charges in accordance with the prior sentence of this paragraph. |
| The “Base Interest Fraction” with respect to any principal prepayment on any mortgage loan and with respect to any class of Class A-1, Class A-2, Class A-3, Class A-4, Class A-AB, Class A-S, Class B, Class C and Class D certificates is a fraction (a) whose numerator is the amount, if any, by which (i) the pass-through rate on such class of certificates exceeds (ii) the discount rate used in accordance with the related loan documents in calculating the yield maintenance charge with respect to such principal prepayment and (b) whose denominator is the amount, if any, by which (i) the mortgage loan rate on such mortgage loan exceeds (ii) the discount rate used in accordance with the related loan documents in calculating the yield maintenance charge with respect to such principal prepayment; provided, however, that under no circumstances will the Base Interest Fraction be greater than one. However, if such discount rate is greater than or equal to both of (x) the mortgage loan rate on the prepaid mortgage loan and (y) the pass-through rate described in the preceding sentence, then the Base Interest Fraction will equal zero, and if such discount rate is greater than or equal to the mortgage loan rate described in the preceding sentence, but less than the pass-through rate, the Base Interest Fraction will be one. |
| If a prepayment premium (calculated as a percentage of the amount prepaid) is imposed in connection with a prepayment rather than a yield maintenance charge, then the prepayment premium so collected will be allocated as described above. For this purpose, the discount rate used to calculate the Base Interest Fraction will be the discount rate used to determine the yield maintenance charge for mortgage loans that require payment at the greater of a yield maintenance charge or a minimum amount equal to a fixed percentage of the principal balance of the mortgage loan or, for mortgage loans that only have a prepayment premium based on a fixed percentage of the principal balance of the mortgage loan, such other discount rate as may be specified in the related loan documents. |
| After the notional amounts of the Class X-A, Class X-B and Class X-D certificates and the certificate balances of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-AB, Class A-S, Class B, Class C and Class D certificates have been reduced to zero, all prepayment premiums and yield maintenance charges with respect to the mortgage loans will be allocated to the holders of the Class E-RR, Class F-RR, Class G-RR, Class H-RR and Class J-RR certificates (collectively), allocable between such classes as provided in the CGCMT 2017-C4 pooling and servicing agreement. No yield maintenance charges or prepayment premiums will be distributed to the holders of the Class S or Class R certificates. For a description of prepayment premiums and yield maintenance charges required on the mortgage loans, see Annex A to the Preliminary Prospectus. See also “Certain Legal Aspects of the Mortgage Loans—Default Interest and Limitations on Prepayments” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| STRUCTURAL OVERVIEW (continued) |
| Advances | The master servicer and, if it fails to do so, the trustee, will be obligated to make P&I advances with respect to each mortgage loan in the issuing entity and, with respect to all of the mortgage loans serviced under the pooling and servicing agreement for this transaction, servicing advances, including paying delinquent property taxes, condominium assessments, insurance premiums and ground lease rents, but only to the extent that those advances are not deemed non-recoverable from collections on the related mortgage loan and, in the case of servicing advances, any related companion loans as described below. P&I advances are subject to reduction in connection with any appraisal reductions that may occur. The special servicer will have no obligation to make any advances, provided that, in an urgent or emergency situation requiring the making of a property protection advance, the special servicer may, in its sole discretion, make a property protection advance and will be entitled to reimbursement from the master servicer for such advance. |
Serviced Mortgage
Loans/Outside Serviced
| Mortgage Loans | Each of (i) the Station Place III loan combination, (ii) the Pleasant Prairie Premium Outlets loan combination, (iii) the Corporate Woods Portfolio loan combination, (iv) the 50 Varick Street loan combination, (v) the Mall of Louisiana loan combination, (vi) the IGT Reno loan combination, (vii) the Capital Centers II & III loan combination, (viii) the Walgreens Witkoff Portfolio loan combination and (ix) the Bank of America Office Campus Building 600 loan combination constitutes an “outside serviced loan combination,” each related mortgage loan constitutes an “outside serviced mortgage loan” and each related companion loan constitutes an “outside serviced companion loan.” Each outside serviced mortgage loan and each related outside serviced companion loan will be serviced under a servicing agreement other than the CGCMT 2017-C4 pooling and servicing agreement (such other servicing agreement, an “outside servicing agreement”) as reflected in the “Loan Combination Summary” table above. |
| Each of (i) the Chelsea Multifamily Portfolio loan combination and (ii) the Westin Crystal City loan combination constitutes a “servicing shift loan combination”, the related mortgage loan constitutes a “servicing shift mortgage loan” and each related companion loan constitutes a “servicing shift companion loan”. A servicing shift loan combination will initially be serviced pursuant to the CGCMT 2017-C4 pooling and servicing agreement and, upon the inclusion of the related controlling pari passu companion loan in a future securitization transaction, the servicing of such loan combination will shift to the outside servicing agreement governing that future securitization. Accordingly, in the case of each of the Chelsea Multifamily Portfolio mortgage loan and the Westin Crystal City mortgage loan, that mortgage loan, the (or, if applicable, each) related companion loan and the related loan combination will be: (i) a serviced mortgage loan, a serviced companion loan and a serviced loan combination (each as defined below), respectively, prior to any such shift in servicing; and (ii) an outside serviced mortgage loan, an outside serviced companion loan and an outside serviced loan combination, respectively, after the shift in servicing occurs. |
| All of the mortgage loans transferred to the issuing entity (other than any outside serviced mortgage loan) are sometimes referred to in this Term Sheet as the “serviced mortgage loans” and, together with any related companion loans, as the “serviced loans” (which signifies that they are being serviced by the master servicer and the special servicer under the CGCMT 2017-C4 pooling and servicing agreement). Any loan combination serviced under the CGCMT 2017-C4 pooling and servicing agreement is sometimes referred to in this Term Sheet as a “serviced loan combination” and any companion loan serviced under the CGCMT 2017-C4 pooling and servicing agreement is sometimes referred to in this Term Sheet as a “serviced companion loan.” See“—Loan Combinations” below. |
Appraisal Reduction
| Amounts | An Appraisal Reduction Amount generally will be created with respect to a required appraisal loan (which is a serviced loan as to which certain defaults, modifications or insolvency events have occurred (as further described in the Preliminary Prospectus)) in the amount, if any, by which the principal balance of such required appraisal loan, plus other amounts overdue or advanced in connection with such required appraisal loan, exceeds 90% of the appraised value of the related mortgaged property plus certain escrows and reserves (including letters of credit) held with respect to such required appraisal loan. In the case of an outside serviced mortgage loan, any Appraisal Reduction Amounts will be calculated pursuant to, and by a party to, the related outside servicing agreement. In general, any Appraisal Reduction Amount calculated with respect to a loan combination will be allocatedfirst, to any related subordinate companion loan(s) (up to the outstanding principal balance(s) thereof), andthen,to the related mortgage loan and any related pari passu companion loan(s) on apro rata basis in accordance with their respective outstanding principal balances. As a result of an Appraisal Reduction Amount being calculated for and/or allocated to a given mortgage loan, the interest portion of any P&I advance for such mortgage loan will be reduced, which will have the effect of reducing the amount of interest available for distribution to the most subordinate class(es) of Certificates (exclusive of the Class S and Class R certificates) then outstanding (i.e., first, to the Class J-RR certificates, then, to the Class H-RR certificates, then, to the Class G-RR certificates, then, to the Class F-RR certificates, then, to the Class E-RR certificates, then, to the Class D certificates, then, to the Class C certificates, then, to the Class B certificates, then, to the Class A-S certificates, and then,pro rata based on interest entitlements, to the Class A-1, Class A-2, Class A-3, Class A-4, Class A-AB, Class X-A, Class X-B and Class X-D certificates). In general, a serviced loan will cease to be a required appraisal loan, and no longer be subject to an Appraisal Reduction Amount, when the same has ceased to be a specially serviced loan (if applicable), has been brought current for at least three consecutive months and no other circumstances exist that would cause such serviced loan to be a required appraisal loan. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| STRUCTURAL OVERVIEW (continued) |
Appraisal Reduction
| Amounts (continued) | For purposes of determining the identity of the Controlling Class and the existence of a Control Termination Event, as well as the allocation and/or exercise of voting rights for certain purposes, any Appraisal Reduction Amounts will be allocated to notionally reduce the certificate balances of the Principal Balance Certificates as follows: first, to the Class J-RR, Class H-RR, Class G-RR, Class F-RR, Class E-RR, Class D, Class C, Class B and Class A-S certificates, in that order, in each case until the related certificate balance is notionally reduced to zero; and then to the Class A-1, Class A-2, Class A-3, Class A-4 and Class A-AB certificates,pro rata based on certificate balance. |
Cumulative Appraisal
| Reduction Amounts | A “Cumulative Appraisal Reduction Amount”, as of any date of determination, is equal to the sum of (i) all Appraisal Reduction Amounts then in effect, and (ii) with respect to any AB Modified Loans, any Collateral Deficiency Amounts then in effect. |
| “Collateral Deficiency Amount” means, with respect to any AB Modified Loan as of any date of determination, the excess of (i) the stated principal balance of such AB Modified Loan (taking into account the related junior note(s) included therein), over (ii) the sum of (in the case of a loan combination, solely to the extent allocable to the subject mortgage loan) (x) the most recent appraised value for the related mortgaged property or mortgaged properties, plus (y) solely to the extent not reflected or taken into account in such appraised value and to the extent on deposit with, or otherwise under the control of, the lender as of the date of such determination, any capital or additional collateral contributed by the related borrower at the time the mortgage loan became (and as part of the modification related to) such AB Modified Loan for the benefit of the related mortgaged property or mortgaged properties (provided, that in the case of an outside serviced mortgage loan, the amounts set forth in this clause (y) will be taken into account solely to the extent relevant information is received), plus (z) any other escrows or reserves (in addition to any amounts set forth in the immediately preceding clause (y)) held by the lender in respect of such AB Modified Loan as of the date of such determination. For purposes of determining the identity of the Controlling Class and the existence of a Control Termination Event, the Collateral Deficiency Amounts will be allocable to the respective Classes of Control Eligible Certificates (as defined below), in reverse alphabetical order of class designation, in a manner similar to the allocation of Appraisal Reduction Amounts to such classes. |
| “AB Modified Loan” means any corrected mortgage loan that became a corrected mortgage loan (which includes for purposes of this definition any outside serviced mortgage loan that became a “corrected” mortgage loan (or any term substantially similar thereto) pursuant to the related outside servicing agreement) due to a modification thereto that resulted in the creation of an A/B note structure (or similar structure) and as to which the new junior note(s) did not previously exist or the principal amount of the new junior note(s) was previously part of either an A note held by the trust or the original unmodified mortgage loan. |
| Age of Appraisals | Appraisals (which can be an update of a prior appraisal) with respect to a serviced loan are required to be no older than 9 months for purposes of determining appraisal reductions (other than the annual re-appraisal), market value, and other calculations as described in the Preliminary Prospectus. |
| Sale of Defaulted Loans | There will be no “Fair Market Value Purchase Option”. Instead defaulted mortgage loans will be sold in a process similar to the sale process for REO property. With respect to an outside serviced loan combination, the party acting as special servicer with respect to such outside serviced loan combination (as discussed under “—Loan Combinations” below) pursuant to the related outside servicing agreement (the “outside special servicer”) may offer to sell to any person (or may offer to purchase) for cash such outside serviced loan combination in accordance with the terms of the related outside servicing agreement during such time as such outside serviced loan combination constitutes a sufficiently defaulted mortgage loan thereunder and, in connection with any such sale, the related outside special servicer is required to sell both the applicable outside serviced mortgage loan and the related outside serviced companion loan(s) as one loan combination. |
| Directing Holder | The “Directing Holder” with respect to any mortgage loan or loan combination serviced under the CGCMT 2017-C4 pooling and servicing agreement will be: |
| ● | in the case of a servicing shift loan combination, the holder of the related controlling pari passu companion loan; and |
| ● | in the case of any other serviced mortgage loan or serviced loan combination, the Controlling Class Representative. |
| The applicable directing holder (or equivalent party) with respect to any outside serviced mortgage loan will be (or, if the applicable outside servicing agreement has not yet been executed, is anticipated to be) the controlling class representative (or equivalent entity), if any, under, or such other party as may be designated in, the related outside servicing agreement; provided that, in the case of the 50 Varick Street mortgage loan, until the securitization of the related controlling pari passu companion loan, the applicable directing holder will be the holder of such controlling pari passu companion loan. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| STRUCTURAL OVERVIEW (continued) |
Controlling Class
| Representative | The “Controlling Class Representative” will be the controlling class certificateholder or other representative designated by at least a majority of the controlling class certificateholders, by certificate balance. The “Controlling Class” is, as of any time of determination, the most subordinate class of the Control Eligible Certificates that has an aggregate outstanding certificate balance as notionally reduced by any Cumulative Appraisal Reduction Amount allocable to such class, at least equal to 25% of the initial certificate balance of that class of certificates, or if no such class meets the preceding requirement, then the Class E-RR certificates will be the controlling class;provided,however, that (at any time that the aggregate certificate balance of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-AB, Class A-S, Class B, Class C and Class D certificates has been reduced to zero without regard to the allocation of Appraisal Reduction Amounts) (A) in the case of any class of Control Eligible Certificates to which the designation of “controlling class” would otherwise shift by operation of this definition, where the certificate balance of such class of Control Eligible Certificates has been reduced to zero (without regard to the allocation of Cumulative Appraisal Reduction Amounts) prior to such shift, then designation of “controlling class” will not shift and will remain with the class of Control Eligible Certificates currently designated as the controlling class, and (B) in the case of any class of Control Eligible Certificates which is then designated the “controlling class”, if the certificate balance of such class of Control Eligible Certificates is reduced to zero (without regard to the allocation of any Cumulative Appraisal Reduction Amount), then the designation of “controlling class” will shift to the class of Control Eligible Certificates that is the most subordinate and that also has a remaining certificate balance. The “Control Eligible Certificates” consist of the Class E-RR, Class F-RR, Class G-RR, Class H-RR and Class J-RR certificates. See “The Pooling and Servicing Agreement—Directing Holder” in the Preliminary Prospectus. No other class of certificates will be eligible to act as the controlling class or appoint a Controlling Class Representative. No person may exercise any of the rights and powers of the Controlling Class Representative with respect to an excluded mortgage loan. |
| On the Closing Date, KKR Real Estate Credit Opportunity Partners Aggregator I L.P. (or an affiliate) (i) is expected to purchase the Class E-RR, Class F-RR, Class G-RR, Class H-RR and Class J-RR certificates and will also receive the Class S certificates, and (ii) is expected to be appointed the initial Controlling Class Representative. |
Control Termination
| Event | A “Control Termination Event” will either (a) occur when no class of the Control Eligible Certificates has an outstanding certificate balance (as notionally reduced by any Cumulative Appraisal Reduction Amount then allocable to such class) that is equal to or greater than 25% of the initial certificate balance of that class of certificates or (b) be deemed to occur as described below under “Control/Consultation Rights” and in the Preliminary Prospectus;provided,however, that a Control Termination Event will in no event exist at any time that the certificate balance of each class of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-AB, Class A-S, Class B, Class C and Class D certificates (without regard to the allocation of Appraisal Reduction Amounts) has been reduced to zero. With respect to excluded mortgage loans, a Control Termination Event will be deemed to exist. |
| The holders of Certificates representing the majority of the certificate balance of the most senior class of Control Eligible Certificates whose certificate balance is notionally reduced to less than 25% of the initial certificate balance of that class as a result of an allocation of an Appraisal Reduction Amount or a Collateral Deficiency Amount, as applicable, to such class will have the right to challenge the Special Servicer’s Appraisal Reduction Amount determination or a Collateral Deficiency Amount determination, as applicable, and, at their sole expense, obtain a second appraisal of any serviced loan for which an Appraisal Reduction Event has occurred or as to which there exists a Collateral Deficiency Amount, under the circumstances described in the Preliminary Prospectus. |
Consultation Termination
| Event | A “Consultation Termination Event” will either (a) occur when no class of Control Eligible Certificates has an outstanding certificate balance, without regard to the allocation of any Cumulative Appraisal Reduction Amount, that is equal to or greater than 25% of the initial certificate balance of that class of certificates or (b) be deemed to occur as described below under “Control/Consultation Rights” and in the Preliminary Prospectus;provided,however, that a Consultation Termination Event will in no event exist at any time that the certificate balance of each class of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-AB, Class A-S, Class B, Class C and Class D certificates (without regard to the allocation of Appraisal Reduction Amounts) has been reduced to zero. With respect to excluded mortgage loans, a Consultation Termination Event will be deemed to exist. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| STRUCTURAL OVERVIEW (continued) |
Control/Consultation
| Rights | So long as a Control Termination Event does not exist, the Controlling Class Representative will be entitled to have consent and/or consultation rights under the CGCMT 2017-C4 pooling and servicing agreement with respect to certain major decisions (including with respect to assumptions, waivers, loan modifications and workouts) and other matters with respect to each serviced mortgage loan, except with respect to (i) any serviced mortgage loan as to which the Controlling Class Representative or a holder of more than 50% of the Controlling Class (by certificate balance) is a Borrower Party (any such mortgage loan, an “excluded mortgage loan”) and (ii) any servicing shift mortgage loan. |
| A “Borrower Party” means either (i) a borrower or mortgagor under a mortgage loan or loan combination or a manager of a related mortgaged property or any affiliate of any of the foregoing, or (ii) a holder or beneficial owner (or an affiliate of any holder or beneficial owner) of any accelerated mezzanine loan. Solely for the purposes of the definition of “Borrower Party”, the term “affiliate” means, with respect to any specified person, (i) any other person controlling or controlled by or under common control with such specified person or (ii) any other person that owns, directly or indirectly, 25% or more of the beneficial interests in such specified person. |
| After the occurrence and during the continuance of a Control Termination Event, the consent rights of the Controlling Class Representative will terminate, and the Controlling Class Representative will retain consultation rights under the CGCMT 2017-C4 pooling and servicing agreement with respect to certain major decisions and other matters with respect to the serviced mortgage loans, other than (i) any excluded mortgage loan and (ii) any servicing shift mortgage loan. |
| After the occurrence and during the continuance of a Consultation Termination Event, all of these rights of the Controlling Class Representative with respect to the serviced mortgage loans will terminate. |
| In the event of a change in the Controlling Class, the certificate administrator will be required to promptly contact the current holder(s) of the Controlling Class (or any designee(s) thereof) or (if known to the certificate administrator) one of its affiliates, or, if applicable, any successor Controlling Class Representative or controlling class certificateholder(s), and determine whether any such entity is the holder (or beneficial owner) of at least a majority of the Controlling Class (in effect after such change in Controlling Class) by certificate balance. If at any time the current holder of the Controlling Class (or its designee) or (if known to the certificate administrator) one of its affiliates, or any successor Controlling Class Representative or controlling class certificateholder(s) is no longer the holder (or beneficial owner) of at least a majority of the Controlling Class by certificate balance and the certificate administrator has neither (i) received notice of the then-current holders (or, in the case of book-entry certificates, beneficial owners) of at least a majority of the Controlling Class by certificate balance nor (ii) received notice of a replacement Controlling Class Representative pursuant to the CGCMT 2017-C4 pooling and servicing agreement, then a Control Termination Event and a Consultation Termination Event will be deemed to have occurred and will be deemed to continue until such time as the certificate administrator receives either such notice. |
| For so long as the Class E-RR certificates are the Controlling Class, a holder of a majority of the Class E-RR certificates (by principal balance) may waive its right to act as or appoint, and to exercise any of the rights of, a Controlling Class Representative, in which case a Control Termination Event and a Consultation Termination Event will be deemed to exist until the Class E-RR certificates cease to be the Controlling Class or another party becomes the holder of a majority of the Class E-RR certificates (by principal balance). |
| With respect to each servicing shift loan combination (for so long as it is serviced under the CGCMT 2017-C4 pooling and servicing agreement), the holder of the related Controlling Note identified above (which will not be the Controlling Class Representative) will instead be entitled to exercise the above-described consent rights. See the table entitled “Loan Combination Controlling Notes and Non-Controlling Notes” under “Collateral Overview” above. To the extent permitted under the related co-lender agreement, prior to a Consultation Termination Event, the Controlling Class Representative will be entitled to exercise the above-described consultation rights with respect to each such servicing shift loan combination. |
| With respect to each outside serviced loan combination, the applicable outside controlling class representative or other related controlling noteholder pursuant to, and subject to the limitations set forth in, the related outside servicing agreement and the related co-lender agreement will have consent, consultation, approval and direction rights with respect to certain major decisions (including with respect to assumptions, waivers, loan modifications and workouts) regarding such outside serviced loan combination, as provided for in the related co-lender agreement and in the related outside servicing agreement, and as described under “Description of the Mortgage Pool—The Loan Combinations” in the Preliminary Prospectus. To the extent permitted under the related co-lender agreement, the Controlling Class Representative (so long as a Consultation Termination Event does not exist) may have certain consultation rights with respect to each outside serviced loan combination. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| STRUCTURAL OVERVIEW (continued) |
Termination of
| Special Servicer | At any time, prior to the occurrence and continuance of a Control Termination Event, the special servicer (but not any outside special servicer for any outside serviced loan combination) may be removed and replaced by the Controlling Class Representative (except with respect to any excluded mortgage loan) with or without cause upon satisfaction of certain conditions specified in the CGCMT 2017-C4 pooling and servicing agreement. |
| After the occurrence and during the continuance of a Control Termination Event, the holders of at least 25% of the voting rights of the certificates (other than the Class S and Class R certificates) may request a vote to replace the special servicer (but not any outside special servicer for any outside serviced loan combination). The subsequent vote may result in the termination and replacement of the special servicer if, within 180 days of the initial request for that vote, the holders of (a) at least 66-2/3% of the voting rights allocable to the certificates of those holders that voted on the matter (provided that holders representing the applicable Certificateholder Quorum voted on the matter), or (b) more than 50% of the voting rights of each class of Non-Reduced Certificates (as defined under “Certain Definitions” below) vote affirmatively to so replace. |
| Notwithstanding the foregoing, but subject to the discussion in the next paragraph, solely with respect to a servicing shift loan combination, while it is serviced pursuant to the CGCMT 2017-C4 pooling and servicing agreement, only the holder of the related controlling pari passu companion loan may terminate the special servicer without cause. |
| At any time, if the operating advisor determines, in its sole discretion exercised in good faith, that (1) the special servicer has failed to comply with the servicing standard and (2) a replacement of the special servicer would be in the best interest of the certificateholders (as a collective whole), the operating advisor will have the right to recommend the replacement of the special servicer with respect to the serviced mortgage loans (but not any outside special servicer for any outside serviced loan combination), resulting in a solicitation of a certificateholder vote. The subsequent vote may result in the termination and replacement of the special servicer if, within 180 days of the initial request for that vote, the holders of at least a majority of the aggregate outstanding principal balance of the certificates of those holders that voted on the matter (provided that holders representing the applicable Certificateholder Quorum vote on the matter) vote affirmatively to so replace. |
| “Certificateholder Quorum” means a quorum that, (a) for purposes of a vote to terminate and replace the special servicer or the asset representations reviewer at the request of the holders of certificates evidencing not less than 25% of the voting rights (without regard to the application of any Appraisal Reduction Amounts), consists of the holders of certificates evidencing at least 50% of the aggregate voting rights (taking into account the allocation of any Appraisal Reduction Amounts to notionally reduce the certificate balances of the respective classes of Principal Balance Certificates) of all certificates (other than the Class S and Class R certificates), on an aggregate basis, and (b) for purposes of a vote to terminate and replace the special servicer based on a recommendation of the operating advisor, consists of the holders of certificates evidencing at least 20% of the aggregate of the outstanding principal balances of all certificates, with such quorum including at least three (3) holders that are not affiliated with each other. |
| The related outside special servicer under each outside servicing agreement generally may be (or, if the applicable outside servicing agreement has not yet been executed, it is anticipated that such outside special servicer may be) replaced by the related outside controlling class representative (or an equivalent party), or the vote of the requisite holders of certificates issued, under the applicable outside servicing agreement (depending on whether or not the equivalent of a control termination event or a consultation termination event exists under that outside servicing agreement) or by any applicable other controlling noteholder in a manner generally similar to the manner in which the special servicer may be replaced under the CGCMT 2017-C4 pooling and servicing agreement as described in the five preceding paragraphs (although there will be differences, in particular as regards certificateholder votes and the timing of when an outside special servicer may be terminated based on the recommendation of an operating advisor). |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| STRUCTURAL OVERVIEW (continued) |
Termination of
Special Servicer
| (continued) | If the special servicer, to its knowledge, becomes a Borrower Party with respect to a mortgage loan, the special servicer will not be permitted to act as special servicer with respect to that mortgage loan. Subject to certain limitations described in the Preliminary Prospectus, the Directing Holder (so long as it is not itself a Borrower Party with respect to the applicable mortgage loan and, if the Directing Holder is the Controlling Class Representative, so long as no Control Termination Event shall have occurred and be continuing) will be entitled to appoint a replacement special servicer for that mortgage loan. If the Directing Holder is precluded from appointing a replacement special servicer or, if not so precluded, does not take action to appoint a replacement special servicer, a replacement special servicer will be appointed in the manner specified in the CGCMT 2017-C4 pooling and servicing agreement. |
| Servicing Standard | Each of the serviced loans will be serviced and administered by the master servicer and the special servicer pursuant to the terms of the CGCMT 2017-C4 pooling and servicing agreement. In all circumstances, each of the master servicer and the special servicer is obligated to act in the best interests of the certificateholders and the holders of the serviced companion loans as a collective whole as if such certificateholders and holders of the serviced companion loans constituted a single lender. The special servicer is required to determine the effect on net present value of various courses of action (including workout or foreclosure), using the Calculation Rate as the discount rate, and pursue the course of action that it determines would maximize recovery on a net present value basis. |
| “Calculation Rate” means, for principal and interest payments on a mortgage loan or proceeds from the sale of a defaulted loan, the highest of (i) the rate determined by the master servicer or the special servicer, as applicable, that approximates the market rate that would be obtainable by borrowers on similar debt of the borrowers as of such date of determination, (ii) the mortgage loan rate and (iii) the yield on 10-year US treasuries; and for all other cash flows, including property cash flow, the “discount rate” set forth in the most recent appraisal (or update of such appraisal). |
| Voting Rights | At all times during the term of the CGCMT 2017-C4 pooling and servicing agreement, the voting rights for the certificates will be allocated among the respective classes of certificateholders as follows: |
| (1) | 1% in the aggregate in the case of the respective classes of the Class X Certificates, allocatedpro rata based upon their respective notional amounts as of the date of determination (for so long as the notional amount of at least one class of the Class X Certificates is greater than zero), and |
| (2) | in the case of any class of Principal Balance Certificates, a percentage equal to the product of 99% (or, if the notional amounts of all classes of the Class X Certificates have been reduced to zero, 100%) and a fraction, the numerator of which is equal to the certificate balance of such class of Principal Balance Certificates as of the date of determination, and the denominator of which is equal to the aggregate of the certificate balances of all classes of the Principal Balance Certificates, in each case, as of the date of determination, |
| provided, that in certain circumstances described under “The Pooling and ServicingAgreement” in the Preliminary Prospectus, voting rights will only be exercisable by holders of the Non-Reduced Certificates and/or may otherwise be exercisable or allocated in a manner that takes into account the allocation of Appraisal Reduction Amounts. |
| The voting rights of any class of certificates are required to be allocated among certificateholders of such class in proportion to their respective percentage interests. |
| The Class S and Class R certificates will not be entitled to any voting rights. |
Servicing
| Compensation | Modification Fees: Certain fees resulting from modifications, amendments, waivers or other changes to the terms of the loan documents, as more fully described in the Preliminary Prospectus, will be used to offset expenses on the related serviced mortgage loan (i.e. reimburse the trust for certain expenses including unreimbursed advances and interest on unreimbursed advances previously incurred (other than special servicing fees, workout fees and liquidation fees) on the related serviced mortgage loan but not yet reimbursed to the trust or servicers or to pay expenses (other than special servicing fees, workout fees and liquidation fees) that are still outstanding in each case unless as part of the written modification the related borrower is required to pay these amounts on a going forward basis or in the future). Any excess modification fees not so applied to offset expenses will be available as compensation to the master servicer and/or special servicer. Within any prior 12 month period, all such excess modification fees earned by the master servicer or by the special servicer (after taking into account the offset described below applied during such 12-month period) with respect to any serviced mortgage loan will be subject to a cap equal to the greater of (i) 1% of the outstanding principal balance of such mortgage loan after giving effect to such transaction and (ii) $25,000. |
| All excess modification fees earned by the special servicer will be required to offset any future workout fees or liquidation fees payable with respect to the related serviced mortgage loan or related REO property; provided, that if the serviced mortgage loan ceases being a corrected loan, and is subject to a subsequent modification, any excess modification fees earned by the special servicer prior to such serviced mortgage loan ceasing to be a corrected loan will no longer be offset against future liquidation fees and workout fees unless such serviced mortgage loan ceased to be a corrected loan within 18 months of it becoming a modified mortgage loan. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| STRUCTURAL OVERVIEW (continued) |
Servicing
| Compensation | Penalty Fees: All late fees and default interest will first be used to reimburse certain expenses previously incurred with respect to the related mortgage loan (other than special servicing fees, workout fees and liquidation fees) but not yet reimbursed to the trust, the master servicer or the special servicer or to pay certain expenses (other than special servicing fees, workout fees and liquidation fees) that are still outstanding on the related mortgage loan, and any excess received with respect to a serviced loan will be paid to the master servicer (for penalty fees accrued while a non-specially serviced loan) and the special servicer (for penalty fees accrued while a specially serviced loan). To the extent any amounts reimbursed out of penalty charges are subsequently recovered on a related serviced loan, they will be paid to the master servicer or special servicer who would have been entitled to the related penalty charges that were previously used to reimburse such expense. |
| Liquidation / Workout Fees: Liquidation fees will be calculated at the lesser of (a) 1.0% and (b) such rate as would result in a liquidation fee of $1,000,000, for each serviced loan that is a specially serviced loan and any REO property, subject in any case to a minimum liquidation fee of $25,000. For any serviced loan that is a corrected loan, workout fees will be calculated at the lesser of (a) 1.0% and (b) such rate as would result in a workout fee of $1,000,000 when applied to each expected payment of principal and interest (other than default interest and excess interest) on the related serviced loan from the date such serviced loan becomes a corrected mortgage loan through and including the then related maturity date, subject in any case to a minimum workout fee of $25,000. |
| Notwithstanding the foregoing, in connection with a maturity default, no liquidation or workout fee will be payable in connection with a payoff or refinancing of the related serviced loan within 90 days of the maturity default, but the special servicer may collect and retain appropriate fees from the related borrower in connection with the subject liquidation or workout. |
| In the case of an outside serviced loan combination, calculation of the foregoing amounts payable to the related outside servicer or outside special servicer may be different than as described above. For example, the extent to which modification fees and penalty fees are applied to offset expenses may be different and liquidation fees and workout fees may be subject to different caps or no caps. |
| Operating Advisor | The operating advisor will, in general and under certain circumstances described in the Preliminary Prospectus, have the following rights and responsibilities with respect to the serviced mortgage loans: |
| ● | reviewing the actions of the special servicer with respect to specially serviced loans and with respect to certain major decisions regarding non-specially serviced loans as to which the operating advisor has consultation rights; |
| ● | reviewingreports provided by the special servicer to the extent set forth in the CGCMT 2017-C4 pooling and servicing agreement; |
| ● | reviewing foraccuracy certain calculations made by the special servicer; |
| ● | issuing anannual report generally setting forth, among other things, its assessment of whether the special servicer is performing its duties in compliance with the servicing standard and the CGCMT 2017-C4 pooling and servicing agreement and identifying any material deviations therefrom; |
| ● | recommending the replacement of the special servicer if the operating advisor determines, in its sole discretion exercised in good faith, that (1) the special servicer has failed to comply with the servicing standard and (2) a replacement of the special servicer would be in the best interest of the certificateholders (as a collective whole); and |
| ● | after theoccurrence and during the continuance of an Operating Advisor Consultation Trigger Event, consulting on a non-binding basis with the special servicer with respect to certain major decisions (and such other matters as are set forth in the CGCMT 2017-C4 pooling and servicing agreement) in respect of the applicable serviced mortgage loan(s) and/or related companion loan(s). |
| An “Operating Advisor Consultation Trigger Event” will occur when the aggregate outstanding certificate balance of the RR Certificates (as notionally reduced by any Cumulative Appraisal Reduction Amount then allocable to the RR Certificates) is 25% or less of the initial aggregate certificate balance of the RR Certificates. With respect to excluded mortgage loans, an Operating Advisor Consultation Trigger Event will be deemed to exist. |
| Notwithstanding the foregoing, the operating advisor will generally have no obligations or consultation rights as operating advisor under the CGCMT 2017-C4 pooling and servicing agreement with respect to any outside serviced mortgage loan or any related REO property. |
| The operating advisor will be subject to termination and replacement if the holders of at least 15% of the voting rights of Non-Reduced Certificates vote to terminate and replace the operating advisor and such termination and replacement is affirmatively voted for by the holders of more than 50% of the voting rights allocable to the Non-Reduced Certificates of those holders that exercise their right to vote (provided that holders entitled to exercise at least 50% of the voting rights allocable to the Non-Reduced Certificates exercise their right to vote within 180 days of the initial request for a vote). The holders initiating such vote will be responsible for the fees and expenses in connection with the vote and replacement. |
| See “The Pooling and Servicing Agreement—Operating Advisor”in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| STRUCTURAL OVERVIEW (continued) |
Asset Representations
| Reviewer | The asset representations reviewer will be required to review certain delinquent mortgage loans after a specified delinquency threshold has been exceeded and the required percentage of certificateholders vote to direct a review of such delinquent mortgage loans. An asset review will occur when either (1) mortgage loans with an aggregate outstanding principal balance of 25% or more of the aggregate outstanding principal balance of all of the mortgage loans (including any REO loans) held by the issuing entity as of the end of the applicable collection period are at least 60 days delinquent in respect of their related monthly payments or balloon payment, if any (for purposes of this paragraph, “delinquent loans”) or (2) at least 15 mortgage loans are delinquent loans as of the end of the applicable collection period and the aggregate outstanding principal balance of such delinquent loans constitutes at least 20% of the aggregate outstanding principal balance of all of the mortgage loans (including any REO loans) held by the issuing entity as of the end of the applicable collection period. |
| The asset representations reviewer may be terminated and replaced without cause. Upon (i) the written direction of certificateholders evidencing not less than 25% of the voting rights requesting a vote to terminate and replace the asset representations reviewer with a proposed successor asset representations reviewer that is an eligible asset representations reviewer, 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 promptly provide notice of such request to all certificateholders and the asset representations reviewer by posting such notice on its internet website, and by mailing such notice to all certificateholders and the asset representations reviewer. Upon the affirmative vote of certificateholders evidencing at least 75% of the voting rights allocable to those holders that exercise their right to vote (provided that holders representing the applicable Certificateholder Quorum exercise their right to vote within 180 days of the initial request for a vote), the trustee will be required to terminate all of the rights and obligations of the asset representations reviewer under the CGCMT 2017-C4 pooling and servicing agreement by written notice to the asset representations reviewer, and the proposed successor asset representations reviewer will be appointed. See “The Pooling and Servicing Agreement—The Asset Representations Reviewer” in the Preliminary Prospectus. |
Dispute Resolution
| Provisions | The mortgage loan sellers will be subject to the dispute resolution provisions set forth in the CGCMT 2017-C4 pooling and servicing agreement to the extent those provisions are triggered with respect to any mortgage loan sold to the depositor by a mortgage loan seller and such mortgage loan seller will be obligated under the related mortgage loan purchase agreement to comply with all applicable provisions and to take part in any mediation or arbitration proceedings that may result. |
| Generally, in the event that a Repurchase Request (as defined in the Preliminary Prospectus) is not “Resolved” (as defined below) within 180 days after the related mortgage loan seller receives such Repurchase Request, then the enforcing servicer will be required to send a notice to the “Initial Requesting Certificateholder” (if any) indicating the enforcing servicer’s intended course of action with respect to the Repurchase Request. If (a) the enforcing servicer’s intended course of action with respect to the Repurchase Request does not involve pursuing further action to exercise rights against the applicable mortgage loan seller with respect to the Repurchase Request and the Initial Requesting Certificateholder, if any, or any other certificateholder or certificate owner wishes to exercise its right to refer the matter to mediation (including nonbinding arbitration) or arbitration, or (b) the enforcing servicer’s intended course of action is to pursue further action to exercise rights against the related mortgage loan seller with respect to the Repurchase Request but the Initial Requesting Certificateholder, if any, or any other certificateholder or certificate owner does not agree with the dispute resolution method selected by the enforcing servicer, then the Initial Requesting Certificateholder, if any, or such other certificateholder or certificate owner may deliver a written notice to the enforcing servicer indicating its intent to exercise its right to refer the matter to either mediation or arbitration. In addition, any other certificateholder or certificate owner may deliver, within the time frame provided in the CGCMT 2017-C4 pooling and servicing agreement, a written notice requesting the right to participate in any dispute resolution consultation that is conducted by the enforcing servicer following the enforcing servicer’s receipt of the notice described in the preceding sentence. |
| “Resolved” means, with respect to a Repurchase Request, (i) that any material breach of representations and warranties or a material document defect has been cured, (ii) the related mortgage loan has been repurchased in accordance with the related mortgage loan purchase agreement, (iii) a mortgage loan has been substituted for the related mortgage loan in accordance with the related mortgage loan purchase agreement, (iv) the applicable mortgage loan seller has made a “loss of value payment”, (v) a contractually binding agreement has been entered into between the enforcing servicer, on behalf of the issuing entity, and the related mortgage loan seller that settles the related mortgage loan seller’s obligations under the related mortgage loan purchase agreement, or (vi) the related mortgage loan is no longer property of the issuing entity as a result of a sale or other disposition in accordance with the CGCMT 2017-C4 pooling and servicing agreement. See “The Pooling and Servicing Agreement—Dispute Resolution Provisions” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
29
| STRUCTURAL OVERVIEW (continued) |
| Credit Risk Retention | This securitization transaction will be subject to the credit risk retention rules of Section 15G of the Securities Exchange Act of 1934, as amended. An economic interest in the credit risk of the mortgage loans in this transaction is expected to be retained pursuant to Regulation RR (17 CFR § 246.1et seq) promulgated under Section 15G (“Regulation RR”), as an “eligible horizontal residual interest” in the form of the RR Certificates. Citi Real Estate Funding Inc. will act as retaining sponsor under Regulation RR and is expected, on the Closing Date, to satisfy its risk retention requirements through the purchase by a third party purchaser of the RR Certificates. For a further discussion of the manner in which the credit risk retention requirements are expected to be satisfied by Citi Real Estate Funding Inc. as retaining sponsor, see “Credit Risk Retention” in the Preliminary Prospectus. |
| Investor Communications | The certificate administrator is required to include on any Form 10–D any request received from a certificateholder to communicate with other certificateholders related to certificateholders exercising their rights under the terms of the CGCMT 2017-C4 pooling and servicing agreement. Any certificateholder wishing to communicate with other certificateholders regarding the exercise of its rights under the terms of the CGCMT 2017-C4 pooling and servicing agreement will be able to deliver a written request signed by an authorized representative of the requesting investor to the certificate administrator. |
| Deal Website | The certificate administrator will maintain a deal website including, but not limited to: |
| —all special notices delivered. |
| —summaries of final asset status reports. |
| —all appraisals in connection with an appraisal reduction plus any subsequent appraisal updates. |
| —an “Investor Q&A Forum” and a voluntary investor registry. |
| Cleanup Call | On any Distribution Date on which the aggregate unpaid principal balance of the mortgage loans remaining in the issuing entity is less than 1% of the aggregate principal balance of the pool of mortgage loans as of the Cut-off Date, certain specified persons will have the option to purchase all of the remaining mortgage loans (and all property acquired through exercise of remedies in respect of any mortgage loan) at the price specified in the Preliminary Prospectus. Exercise of the option will terminate the issuing entity and retire the then outstanding certificates. |
| If the aggregate certificate balances of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-AB, Class A-S, Class B, Class C and Class D certificates and the notional amounts of the Class X-A, Class X-B and Class X-D certificates have been reduced to zero and if the master servicer has received from the remaining certificateholders the payment specified in the CGCMT 2017-C4 pooling and servicing agreement, the issuing entity could also be terminated in connection with an exchange of all the then-outstanding certificates (excluding the Class S and Class R certificates) for the mortgage loans remaining in the issuing entity, as further described under “The Pooling and Servicing Agreement—Optional Termination; Optional Mortgage Loan Purchase” in the Preliminary Prospectus. |
The Certificates involve certain risks and may not be suitable for all investors. For information regarding certain risks associated with an investment in the Certificates, see “Risk Factors” in the Preliminary Prospectus. Capitalized terms used but not otherwise defined in this Term Sheet have the respective meanings assigned to those terms in the Preliminary Prospectus.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
30
| CERTAIN DEFINITIONS |
■ | “ADR”: For any hospitality property, average daily rate. |
| ■ | “Appraised Value”: With respect to each mortgaged property and any date of determination, the most current appraised value of such mortgaged property as determined by an appraisal of the mortgaged property and in accordance with MAI standards made not more than 6 months prior to the origination date of the related mortgage loan. The Appraised Value for each mortgaged property is an “as-is” appraised value, except as set forth under the definition of “Appraised Value” in, and/or in the footnotes to Annex A to, the Preliminary Prospectus. |
| ■ | “Borrower Sponsor”: The indirect owner, or one of the indirect owners, of the related borrower (in whole or in part) that may or may not have control of the related borrower. The Borrower Sponsor may be, but is not necessarily, the entity that acts as the guarantor of the non-recourse carveouts. |
| ■ | “Cut-off Date LTV Ratio”: With respect to each mortgage loan, the ratio, expressed as a percentage of (1) the Cut-off Date Balance of that mortgage loan (together with the Cut-off Date Balance of any related pari passu companion loan(s) in the case of a loan combination, but without regard to any subordinate companion loan(s)) divided by (2) the Appraised Value of the related mortgaged property or portfolio of mortgaged properties, except as set forth under the definition of “Cut-off Date LTV Ratio” in, and in the footnotes to Annex A to, the Preliminary Prospectus, including, without limitation, that for certain mortgage loans, the Cut-off Date LTV Ratio may have been calculated using (i) an “as-stabilized” or similar value for the related mortgaged property or mortgaged properties or (ii) an “as-is portfolio value”, which represents the appraised value for a portfolio of mortgaged properties as a whole and not the sum of the appraised values for each of the individual mortgaged properties. |
| ■ | “FF&E”: Furniture, fixtures and equipment. |
| ■ | “GLA”: Gross leasable area. |
| ■ | “Hard Lockbox”: An account into which either (i) the related borrower is required to direct the tenants to pay rents directly to a lockbox account controlled by the lender, or (ii) in the case of hospitality, mixed use, multifamily and manufactured housing community properties, all credit card receivables, cash, checks and “over the counter” receipts are required to be deposited into a lockbox account controlled by the lender either directly (in the case of credit card receivables for certain properties) or by an unaffiliated property manager; provided, that in the case of certain flagged hospitality properties, such unaffiliated property manager may instead be required to deposit only the portion of such revenue that is payable to the borrower, which may be net of hotel reserves, management fees and operating expenses that are payable to the property manager. |
| ■ | “Maturity Date/ARD LTV Ratio”: With respect to each mortgage loan, the ratio, expressed as a percentage of (1) the Balloon Balance of that mortgage loan (together with the Balloon Balance of any related pari passu companion loan(s) in the case of a loan combination, but without regard to any subordinate companion loan(s)), divided by (2) the Appraised Value of the related mortgaged property or portfolio of mortgaged properties, except as set forth under the definition of “Maturity Date/ARD LTV Ratio” in, and in the footnotes to Annex A to, the Preliminary Prospectus, including, without limitation, that for certain mortgage loans, the Maturity Date/ARD LTV Ratio may have been calculated using (i) an “as-stabilized” or similar value for the related mortgaged property or mortgaged properties or (ii) an “as-is portfolio value”, which represents the appraised value for a portfolio of mortgaged properties as a whole and not the sum of the appraised values for each of the individual mortgaged properties. |
| ■ | “MSA”: Metropolitan statistical area. |
| ■ | “Non-owned Anchor(s)”: Tenants that occupy space equal to or greater than 30,000 SF at the related mortgaged property, which occupied space is not owned by the related borrower and is not part of the collateral for the related mortgage loan. |
| ■ | “Non-owned Junior Anchor(s)”: Tenants that occupy space equal to or greater than 10,000 SF at the related mortgaged property and less than 30,000 SF at the related mortgaged property, which occupied space is not owned by the related borrower and is not part of the collateral for the related mortgage loan. |
| ■ | “Non-owned Outparcel(s)”: Freestanding tenants that occupy space at the property that is separated from the rest of the tenants at the applicable mortgaged property which space occupied by those freestanding tenants is not owned by the related borrower and is not part of the collateral for the related mortgage loan. |
| ■ | “Non-Reduced Certificates”: Each class of Principal Balance Certificates that has an outstanding certificate balance as may be notionally reduced by any appraisal reduction amounts allocated to that class, equal to or greater than 25% of an amount equal to the initial certificate balance of that class of certificates minus all principal payments made on such class of certificates. |
| ■ | “Occupancy Cost”:With respect to any mortgaged property, total rental revenues divided by total sales. |
| ■ | “Owned Anchor(s)”: Tenants that lease space equal to or greater than 30,000 SF at the related mortgaged property, which leased space is owned by the related borrower and is part of the collateral for the related mortgage loan. |
| ■ | “Owned GLA”: With respect to any particular mortgaged property, the GLA of the space that is owned by the related borrower and is part of the collateral for the related mortgage loan. |
| ■ | “Owned Junior Anchor(s)”: Tenants that lease space equal to or greater than 10,000 SF and less than 30,000 SF at the related mortgaged property, which leased space is owned by the related borrower and is part of the collateral for the related mortgage loan. |
| ■ | “Owned Occupancy”: With respect to any particular mortgaged property, as of a certain date (or, in the case of a hospitality property, for a trailing 12-month period ending on a certain date), the percentage of net rentable square footage, available rooms, units or beds that are leased or rented (as applicable), solely with respect to the aggregate leased space, available rooms, units or beds in the property that is owned by the related borrower. In some cases Owned Occupancy was based on assumptions regarding occupancy, such as assumptions that a certain tenant at the mortgaged property that has executed a lease, but has not yet taken occupancy and/or has not yet commenced paying rent, will take occupancy on a future date generally expected to occur within twelve months after the Cut-off Date; assumptions regarding the renewal of particular leases and/or the re-leasing of certain space at the related mortgaged property; in some cases, assumptions regarding leases under negotiation being executed; in some cases, assumptions regarding tenants taking additional space in the future if currently committed to do so or, in some cases, the exclusion of dark tenants, tenants with material aged receivables, tenants that may have already given notice to vacate their space, bankrupt tenants that have not yet affirmed their lease and certain additional leasing assumptions. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
31
| CERTAIN DEFINITIONS (continued) |
| ■ | “Owned Outparcel(s)”: Freestanding tenants that occupy space at the mortgaged property that is separated from the rest of the tenants at the applicable mortgaged property which space occupied by those freestanding tenants is owned by the related borrower and is part of the collateral for the related mortgage loan. |
| ■ | “Owned Tenant(s)”: Tenants whose leased space at the related mortgaged property is owned by the related borrower and is part of the collateral for the related mortgage loan. |
| ■ | “Rating Agency Confirmation”: With respect to any matter, confirmation in writing (which may be in electronic form) by each applicable rating agency engaged by the depositor 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 by that rating agency to any class of certificates. However, such confirmation will be deemed received or not required in certain circumstances as further described in the Preliminary Prospectus. See “The Pooling and Servicing Agreement—Rating Agency Confirmations”in the Preliminary Prospectus. |
| ■ | “RevPAR”: With respect to any hospitality property, revenues per available room. |
| ■ | “SF”: Square feet. |
| ■ | “Soft Lockbox”: An account into which either (i) the related borrower is required to deposit, or cause the property manager to deposit, all rents collected into a lockbox account (rather than tenants directly depositing such amounts), or (ii) in the case of hospitality, mixed use, multifamily and manufactured housing community properties, all credit card receivables, cash, checks and “over the counter” receipts are deposited into a lockbox account by the borrower or an affiliated property manager (rather than credit card companies directly depositing credit card receivables); provided, that in the case of certain flagged hospitality properties, such affiliated property manager may instead be required to deposit only the portion of such revenue that is payable to the borrower, which may be net of hotel reserves, management fees and operating expenses that are payable to the property manager. |
| ■ | “Soft Springing Lockbox”: An account initially established as a Soft Lockbox; provided, that upon the occurrence of an event of default or one or more specified trigger events under the related loan documents, the lockbox account converts to a Hard Lockbox. |
| ■ | “Springing Lockbox”: An account that is not currently in place, but the related loan documents require the imposition of a lockbox account upon the occurrence of an event of default or one or more specified trigger events under the related loan documents. |
| ■ | “Total Occupancy”: With respect to any particular mortgaged property, as of a certain date (or, in the case of a hospitality property, for a trailing 12-month period ending on a certain date), the percentage of net rentable square footage, available rooms, units or beds that are leased or rented (as applicable), for the aggregate leased space, available rooms, units or beds at the mortgaged property, including any space that is owned by the related borrower and is part of the collateral in addition to any space that is owned by the applicable tenant and not part of the collateral for the related mortgage loan. In some cases Total Occupancy was calculated based on assumptions regarding occupancy, such as the assumption that a certain tenant at the mortgaged property that has executed a lease, but has not yet taken occupancy and/or has not yet commenced paying rent, will take occupancy on a future date generally expected to occur within twelve months after the Cut-off Date; assumptions regarding the renewal of particular leases and/or the re-leasing of certain space at the related mortgaged property; in some cases, assumptions regarding leases under negotiation being executed; in some cases, assumptions regarding tenants taking additional space in the future if currently committed to do so or, in some cases, the exclusion of dark tenants, tenants with material aged receivables, tenants that may have already given notice to vacate their space, bankrupt tenants that have not yet affirmed their lease and certain additional leasing assumptions. |
| ■ | “TRIPRA”: Terrorism Risk Insurance Program Reauthorization Act of 2015. |
| ■ | “TTM”: Trailing twelve months. |
| ■ | “Underwritten Expenses”: With respect to any mortgage loan or mortgaged property, an estimate of operating expenses, as determined by the related sponsor and generally derived from historical expenses at the mortgaged property(-ies), the borrower’s budget or appraiser’s estimate, in some cases adjusted for significant occupancy increases and a market-rate management fee. We cannot assure you that the assumptions made with respect to any mortgaged property will, in fact, be consistent with that mortgaged property’s actual performance. |
| ■ | “Underwritten NCF”: With respect to any mortgage loan or mortgaged property, cash flow available for debt service, generally equal to the Underwritten NOI decreased by an amount that the related sponsor has determined for tenant improvements and leasing commissions and / or replacement reserves for capital items. Underwritten NCF does not reflect debt service or non-cash items such as depreciation or amortization. With respect to each of the Station Place III, Stryker Corporation and Capital Centers II & III mortgage loans, in the case of certain investment grade-rated or institutional tenants at the related mortgaged property, Underwritten NCF is based on the “straight line” rent of those tenants generally over the lesser of the term of the related lease and the term of the related mortgage loan. Underwritten NCF for other mortgage loans may also include straight line rent for certain tenants. The Underwritten NCF for each mortgaged property is calculated based on the basis of numerous assumptions and subjective judgments (including, but not limited to, with respect to future occupancy and rental rates), which, if ultimately proved erroneous, could cause the actual net cash flow for the mortgaged property to differ materially from the Underwritten NCF set forth in this Term Sheet. In some cases, historical net cash flow for a particular mortgaged property, and/or the net cash flow assumed by the applicable appraiser in determining the Appraised Value of the mortgaged property, may be less (and, perhaps, materially less) than the Underwritten NCF shown in this Term Sheet for such mortgaged property. No representation is made as to the future cash flows of the mortgaged properties, nor are the Underwritten NCFs set forth in the Preliminary Prospectus intended to represent such future cash flows. See “Risk Factors—Underwritten Net Cash Flow Could Be Based on Incorrect or Failed Assumptions” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
32
| CERTAIN DEFINITIONS (continued) |
| ■ | “Underwritten NOI”: With respect to any mortgage loan or mortgaged property, Underwritten Revenues less Underwritten Expenses, as both are determined by the related sponsor, based in part upon borrower supplied information (including but not limited to a rent roll, leases, operating statements and budget) for a recent period which is generally the 12 months prior to the origination date or acquisition date of the mortgage loan (or loan combination, if applicable), adjusted for specific property, tenant and market considerations. Historical operating statements may not be available for newly constructed mortgaged properties, mortgaged properties with triple net leases, mortgaged properties that have recently undergone substantial renovations and/or newly acquired mortgaged properties. The Underwritten NOI for each mortgaged property is calculated based on the basis of numerous assumptions and subjective judgments (including, but not limited to, with respect to future occupancy and rental rates), which, if ultimately proved erroneous, could cause the actual net operating income for the mortgaged property to differ materially from the Underwritten NOI set forth in this Term Sheet. In some cases, historical net operating income for a particular mortgaged property, and/or the net operating income assumed by the applicable appraiser in determining the Appraised Value of the mortgaged property, may be less (and, perhaps, materially less) than the Underwritten NOI shown in this Term Sheet for such mortgaged property. With respect to each of the Station Place III, Stryker Corporation and Capital Centers II & III mortgage loans, in the case of certain investment grade-rated or institutional tenants at the related mortgaged property, Underwritten NOI is based on the “straight line” rent of those tenants over the lesser of the term of the related lease and the term of the related mortgage loan. Underwritten NOI for other mortgage loans may also include straight line rent for certain tenants. No representation is made as to the future cash flows of the mortgaged properties, nor are the Underwritten NOIs set forth in this Term Sheet intended to represent such future cash flows. |
| ■ | “Underwritten Revenues”: With respect to any mortgage loan or mortgaged property, an estimate of operating revenues, as determined by the related sponsor and generally derived from the rental revenue (which may include rental revenue related to reimbursement of tenant improvements and leasing commissions) based on leases in place, leases that have been executed but the tenant is not yet paying rent, month-to-month leases (based on current rent roll and annualized), leases that are being negotiated and expected to be signed, additional space that a tenant has committed to take as described under “Description of the Mortgage Pool—Tenant Issues” in the Preliminary Prospectus to the extent material, and in certain cases contractual rent steps generally within 10 months following the Cut-off Date, in certain cases certain appraiser estimates of rental income, and in some cases adjusted downward to market rates, with vacancy rates equal to the mortgaged property’s historical rate, current rate, market rate or an assumed vacancy as determined by the related sponsor; plus any additional recurring revenue fees. Additionally, in determining rental revenue for multifamily rental, manufactured housing community and self storage properties, the related sponsor either reviewed rental revenue shown on the certified rolling 12-month operating statements or annualized the rental revenue and reimbursement of expenses shown on rent rolls or recent partial year operating statements with respect to the prior one- to 12-month period or in some cases may have relied on information provided in the appraisal for market rental rates and vacancy. In certain cases, with respect to mortgaged properties with leases with rent increases or rent decreases during the term of the related mortgage loan, Underwritten Revenues were based on the average rent over the term of the mortgage loan. In some cases, the related sponsor included revenue otherwise payable by a tenant but for the existence of an initial “free rent” period or a permitted rent abatement while the leased space is built out. We cannot assure you that the assumptions made with respect to any mortgaged property will, in fact, be consistent with that mortgaged property’s actual performance. See “Description of the Mortgage Pool—Tenant Issues” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
33
LOAN #1: SOUTH STATION
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
34
LOAN #1: SOUTH STATION
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
35
LOAN #1: SOUTH STATION
| Mortgaged Property Information | Mortgage Loan Information | ||||
| Number of Mortgaged Properties | 1 | Loan Seller | CREFI | ||
| Location (City/State) | Boston, Massachusetts | Cut-off Date Balance | $75,000,000 | ||
| Property Type | Mixed Use | Cut-off Date Balance per SF | $373.55 | ||
| Size (SF) | 200,775 | Percentage of Initial Pool Balance | 7.7% | ||
| Total Occupancy as of 8/31/2017 | 98.6% | Number of Related Mortgage Loans | None | ||
| Owned Occupancy as of 8/31/2017 | 98.6% | Type of Security | Leasehold | ||
| Year Built / Latest Renovation | 1899 / 1988 | Mortgage Rate | 4.49530% | ||
| Appraised Value | $127,450,000 | Original Term to Maturity (Months) | 120 | ||
| Appraisal Date | 7/25/2017 | Original Amortization Term (Months) | NAP | ||
| Borrower Sponsors | Ben Ashkenazy | Original Interest Only Period (Months) | 120 | ||
| Property Management | Jones Lang LaSalle Americas, Inc. | First Payment Date | 10/6/2017 | ||
| Maturity Date | 9/6/2027 | ||||
| Underwritten Revenues | $13,756,339 | ||||
| Underwritten Expenses | $7,369,235 | Escrows(1) | |||
| Underwritten Net Operating Income (NOI) | $6,387,104 | Upfront | Monthly | ||
| Underwritten Net Cash Flow (NCF) | $5,896,335 | Taxes | $443,368 | $147,789 | |
| Cut-off Date LTV Ratio | 58.8% | Insurance | $0 | $0 | |
| Maturity Date LTV Ratio | 58.8% | Replacement Reserve(2) | $0 | $0 | |
| DSCR Based on Underwritten NOI / NCF | 1.87x / 1.72x | TI/LC(3) | $0 | $20,833 | |
| Debt Yield Based on Underwritten NOI / NCF | 8.5% / 7.9% | Other(4) | $128,732 | $86,765 | |
| Sources and Uses | ||||||
| Sources | $ | % | Uses | $ | % | |
| Mortgage Loan Amount | $75,000,000 | 59.8% | Purchase Price(5) | $123,226,261 | 98.2% | |
| Principal’s New Cash Contribution | 29,630,682 | 23.6 | Closing Costs | 1,306,535 | 1.0 | |
| Mezzanine Loan Amount | 20,000,000 | 15.9 | Reserves | 572,100 | 0.5 | |
| Other Sources | 826,672 | 0.7 | Other Uses | 352,458 | 0.3 | |
| Total Sources | $125,457,354 | 100.0% | Total Uses | $125,457,354 | 100.0% | |
| (1) | See “—Escrows” below. |
| (2) | The ongoing Replacement Reserve of $3,432 is waived provided there is no default under the ground lease and the borrower is making the $3,432 monthly capital reserve funds payments required under the ground lease. |
| (3) | The TI/LC reserve is subject to a cap of $1,250,000. |
| (4) | Upfront Other reserves consist of a (i) $83,333 ground rent reserve, (ii) $27,457 for capital reserve funds required under the ground lease and (iii) $17,942 for unfunded obligations related to free rent and tenant improvements and leasing commissions. Ongoing Other reserves consist of $83,333 monthly for ground rent and $3,432 monthly for capital reserve funds required under the ground lease. |
| (5) | Purchase Price includes a $4,226,261 transfer fee paid by the borrower for transfer of the ground lease. |
| ■ | The Mortgage Loan. The mortgage loan (the “South Station Loan”) is evidenced by twopari passunotes in the aggregate original principal amount of $75,000,000 that are together secured by a first mortgage encumbering the borrower’s leasehold interest in a five-story mixed use building located in Boston, Massachusetts (the “South Station Property”). The South Station Loan was originated by Citigroup Real Estate Finance Inc. on August 21, 2017 and represents approximately 7.7% of the Initial Pool Balance. The South Station Loan is evidenced by notes A-1 and A-2 with an aggregate outstanding principal balance as of the Cut-off Date of $75,000,000 and an interest rate of 4.49530%per annum. The proceeds of the South Station Loan were primarily used to acquire the South Station Property, pay origination costs and fund reserves. |
The South Station Loan had an initial term of 120 months and has a remaining term of 119 months as of the Cut-off Date. The South Station Loan requires monthly payments of interest only for the entire term of the loan. The scheduled maturity date of the South Station Loan is the due date in September 2027. At any time after the second anniversary of the securitization Closing Date, the South Station Loan may be defeased with certain direct full faith and credit obligations of the United States of America or other obligations which are “government securities” permitted under the South Station Loan documents. Voluntary prepayment of the South Station Loan is permitted on or after the due date occurring in July 2027 without payment of any prepayment premium.
| ■ | The Mortgaged Property.The South Station Property is a 200,775 SF five-story mixed use building located on an approximately 3.4 acre site in Boston, Massachusetts. The 200,775 SF of space is comprised of 134,046 SF of office space with the remaining 66,729 SF being predominantly retail space. The Massachusetts Bay Transportation Authority (“MBTA”) is the ground lessor of the South Station Property on a ground lease which expires in June 2115. The ground lease commenced in June 2016 at a base rent of $1,000,000 annually, with 3.5% rent escalations every five years of the lease. The South Station Property was originally built in 1899, and most recently renovated in 1988. MBTA operates the South Station train terminal, located adjacent to the South Station Property, which services Amtrak trains, the MBTA red and silver lines and the MBTA regional commuter rail network that provides access to downtown Boston from communities to the west and south. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
36
LOAN #1: SOUTH STATION
The South Station Property was 98.6% leased as of August 31, 2017 to a mix of retail and office tenants. The retail layout at the South Station Property includes a CVS Pharmacy, in-line restaurants, a food court area and 30 open format kiosk style retailers. Retail tenants at the South Station Property cater to the commuters traveling through the South Station train terminal and include national retailers such as CVS Pharmacy, Cosi, McDonald’s, Au Bon Pain and Pret A Manger. During 2015, South Station was the sixth busiest Amtrak train station in the United States and serviced more than 1.5 million Amtrak passengers in addition to the passengers riding the MBTA commuter network. The office space at the South Station Property benefits from its location being directly adjacent to the South Station train terminal, having office ceiling heights ranging from 13 feet to 28 feet, oversized windows and exposed brick. Office tenants at the South Station Property include Amtrak, the Commonwealth of Massachusetts (Department of Public Utilities), Aegis Media Americas and Rakuten USA.
The following table presents certain information relating to the major tenants at the South Station Property:
Ten Largest Owned Tenants Based on Underwritten Base Rent
Tenant Name | Credit Rating (Fitch/MIS/S&P)(1) | Tenant GLA | % of GLA | UW Base Rent | % of Total | UW Base | Lease Expiration | Renewal / Extension | ||||||||
| CVS Pharmacy(2) | NR / Baa1 / BBB+ | 29,121 | 14.5% | $2,159,327 | 21.1% | $74.15 | 7/31/2034 | 4, 5-year options | ||||||||
| Commonwealth of Massachusetts | AA+ / Aa1 / AA | 41,042 | 20.4 | 1,549,955 | 15.1 | $37.77 | 1/9/2021 | NAP | ||||||||
| Aegis Media Americas | NR / NR / NR | 34,424 | 17.1 | 1,414,038 | 13.8 | $41.08 | 1/31/2021 | 1, 5-year option | ||||||||
| Amtrak(3) | NR / A1 / A- | 50,971 | 25.4 | 1,324,900 | 12.9 | $46.84 | 9/30/2018 | 1, 6-year option | ||||||||
| Rakuten USA | NR / NR / NR | 10,325 | 5.1 | 614,260 | 6.0 | $59.49 | 3/31/2019 | NAP | ||||||||
| Cosi | NR / NR / NR | 1,259 | 0.6 | 312,816 | 3.1 | $248.46 | 5/31/2027 | 1, 5-year option | ||||||||
| McDonald’s | BBB / Baa1 / BBB+ | 2,170 | 1.1 | 278,929 | 2.7 | $128.54 | 12/31/2024 | NAP | ||||||||
| Au Bon Pain | NR / NR / NR | 2,071 | 1.0 | 270,000 | 2.6 | $130.37 | 12/31/2024 | NAP | ||||||||
| M.G. News of Boston, Inc. | NR / NR / NR | 892 | 0.4 | 220,920 | 2.2 | $247.67 | 12/31/2021 | NAP | ||||||||
| MBTA | NR / Aa3 / NR | 3,141 | 1.6 | 177,467 | 1.7 | $56.50 | 6/30/2026 | NAP | ||||||||
| Ten Largest Owned Tenants | 175,416 | 87.4% | $8,322,612 | 81.3% | $47.44 | |||||||||||
| Remaining Tenants | 22,579 | 11.2 | 1,909,366 | 18.7 | $84.56 | |||||||||||
| Vacant | 2,780 | 1.4 | 0 | 0.0 | $0.00 | |||||||||||
| Total / Wtd. Avg. All Tenants | 200,775 | 100.0% | $10,231,977 | 100.0% | $51.68 |
| (1) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
| (2) | CVS Pharmacy may terminate its lease if the South Station Property is closed as a transportation center for 24 months. |
| (3) | Amtrak occupies 28,286 SF on a lease that expires on September 30, 2018 and the remaining 22,685 SF on a lease that expires on December 31, 2024. Amtrak pays base rent of $1,324,900 on the 28,286 SF which expires on September 30, 2018, however Amtrak does not pay a fixed base rent for the 22,685 SF that expires on December 31, 2024. Amtrak is only required to pay reimbursements of allocable expenses for the 22,685 SF of space. UW Base Rent $ per SF for Amtrak in the table above is calculated based on only the 28,286 SF for which Amtrak is obligated to pay base rent. |
The following table presents certain information relating to the lease rollover schedule at the South Station Property, based on the initial lease expiration date:
Lease Expiration Schedule(1)(2)
Year Ending December 31 | Expiring Owned GLA | % of Owned GLA | Cumulative % of Owned GLA | UW Base Rent | % of Total UW | UW Base Rent $ | # of Expiring Tenants | |||||||
| MTM | 245 | 0.1% | 0.1% | $30,000 | 0.3% | $122.45 | 4 | |||||||
| 2017 | 0 | 0.0 | 0.1% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2018 | 28,848 | 14.4 | 14.5% | 1,343,420 | 13.1 | 46.57 | 3 | |||||||
| 2019 | 13,213 | 6.6 | 21.1% | 791,311 | 7.7 | 59.89 | 3 | |||||||
| 2020 | 80 | 0.0 | 21.1% | 49,440 | 0.5 | 618.00 | 1 | |||||||
| 2021 | 77,073 | 38.4 | 59.5% | 3,441,586 | 33.6 | 44.65 | 8 | |||||||
| 2022 | 2,373 | 1.2 | 60.7% | 316,457 | 3.1 | 133.36 | 4 | |||||||
| 2023 | 1,575 | 0.8 | 61.5% | 224,500 | 2.2 | 142.54 | 2 | |||||||
| 2024 | 29,647 | 14.8 | 76.2% | 739,874 | 7.2 | 106.27 | 6 | |||||||
| 2025 | 4,421 | 2.2 | 78.4% | 391,740 | 3.8 | 88.61 | 4 | |||||||
| 2026 | 3,614 | 1.8 | 80.2% | 251,166 | 2.5 | 69.50 | 2 | |||||||
| 2027 | 2,924 | 1.5 | 81.7% | 493,156 | 4.8 | 168.66 | 3 | |||||||
| 2028 & Thereafter | 33,982 | 16.9 | 98.6% | 2,159,327 | 21.1 | 63.54 | 6 | |||||||
| Vacant | 2,780 | 1.4 | 100.0% | 0 | 0.0 | 0.00 | 0 | |||||||
| Total / Wtd. Avg. | 200,775 | 100.0% | $10,231,977 | 100.0% | $51.68 | 46 |
| (1) | Calculated based on the approximate square footage occupied by each collateral tenant. |
| (2) | Certain tenants may have lease termination options that are exercisable prior to the stated expiration date of the subject lease or leases which are not considered in the above Lease Expiration Schedule. |
| (3) | Amtrak occupies 22,685 SF on a lease that expires on December 31, 2024. Amtrak does not pay a fixed base rent for the 22,685 SF that expires on December 31, 2024 and is only required to pay reimbursements of allocable expenses for the 22,685 SF of space. UW Base Rent $ per SF for 2024 in the table above is calculated excluding the 22,685 SF for which Amtrak is not paying base rent. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #1: SOUTH STATION
The following table presents certain information relating to historical leasing at the South Station Property:
Historical Leased %(1)
2014 | 2015 | 2016 | As of 8/31/2017 | |||||
| Owned Space | 96.0% | 97.7% | 98.0% | 98.6% |
| (1) | As provided by the borrower and which represents occupancy as of December 31 for the indicated year unless otherwise specified. |
| ■ | Operating History and Underwritten Net Cash Flow. The following table presents certain information relating to the historical operating performance and the Underwritten Net Cash Flow at the South Station Property: |
Cash Flow Analysis(1)
2014 | 2015 | 2016 | TTM 6/30/2017 | Underwritten | Underwritten $ per SF | |||||||
| Base Rent | $7,622,272 | $8,958,656 | $9,292,062 | $9,317,707 | $9,624,940 | $47.94 | ||||||
| Contractual Rent Steps | 0 | 0 | 0 | 0 | 607,037 | 3.02 | ||||||
| Gross Up Vacancy | 0 | 0 | 0 | 0 | 135,920 | 0.68 | ||||||
| Total Reimbursement Revenue | 2,525,723 | 3,672,563 | 2,827,566 | 2,810,268 | 2,425,380 | 12.08 | ||||||
| Other Income(2) | 1,279,326 | 1,764,673 | 1,777,611 | 1,426,803 | 1,603,851 | 7.99 | ||||||
| Vacancy & Credit Loss | (61,044) | (64,861) | (83,537) | (213,697) | (640,789) | (3.19) | ||||||
| Effective Gross Income | $11,366,277 | $14,331,032 | $13,813,702 | $13,341,081 | $13,756,339 | $68.52 | ||||||
| Real Estate Taxes | $1,310,098 | $1,714,112 | $1,686,281 | $1,756,588 | $1,765,744 | $8.79 | ||||||
| Insurance | 45,033 | 43,098 | 38,148 | 29,797 | 44,831 | 0.22 | ||||||
| Management Fee | 0 | 0 | 0 | 0 | 412,690 | 2.06 | ||||||
| Ground Rent(3) | 330,000 | 330,000 | 709,667 | 1,000,000 | 1,000,000 | 4.98 | ||||||
| Other Operating Expenses | 4,838,553 | 4,865,058 | 4,806,807 | 4,899,978 | 4,145,969 | 20.65 | ||||||
| Total Operating Expenses | $6,523,684 | $6,952,268 | $7,240,903 | $7,686,363 | $7,369,235 | $36.70 | ||||||
| Net Operating Income | $4,842,593 | $7,378,764 | $6,572,800 | $5,654,718 | $6,387,104 | $31.81 | ||||||
| TI/LC | 0 | 0 | 0 | 0 | 449,586 | 2.24 | ||||||
| Capital Expenditures | 0 | 0 | 0 | 0 | 41,183 | 0.21 | ||||||
| Net Cash Flow | $4,842,593 | $7,378,764 | $6,572,800 | $5,654,718 | $5,896,335 | $29.37 | ||||||
| Occupancy | 96.0% | 97.7% | 98.0% | 98.1% | 95.0% | |||||||
| NOI Debt Yield | 6.5% | 9.8% | 8.8% | 7.5% | 8.5% | |||||||
| NCF DSCR | 1.42x | 2.16x | 1.92x | 1.65x | 1.72x |
| (1) | Certain items such as straight line rent, interest expense, interest income, lease cancellation income, depreciation, amortization, debt service payments and any other non-recurring or non-operating items were excluded from the historical presentation and are not considered for the underwritten cash flow. |
| (2) | Other Income consists mainly of advertising leases, antenna income, percentage rent and other miscellaneous income. |
| (3) | The Massachusetts Bay Transportation Authority (“MBTA”) is the ground lessor of the South Station Property on a ground lease which expires in June 2115. The ground lease commenced in June 2016 at a base rent of $1,000,000 annually, with 3.5% rent escalations every fifth year of the lease. There is no market oriented reset clause under the ground lease. |
| ■ | Appraisal.According to the appraisal, the South Station Property had an “as is” appraised value of $127,450,000 as of July 25, 2017. |
Appraisal Approach | Value | Discount | Capitalization | |||
| Direct Capitalization Approach | $129,050,000 | N/A | 5.00% | |||
| Discounted Cash Flow Approach | $127,450,000 | 7.50% | 6.00%(1) |
| (1) | Represents the terminal capitalization rate. |
| ■ | Environmental Matters. Based on the Phase I environmental report dated August 4, 2017, the environmental consultant did not identify evidence of any recognized environmental conditions or recommendations for further action at the South Station Property other than the continued implementation of an asbestos O&M plan. |
| ■ | Market Overview and Competition. The South Station Property is located in downtown Boston, Massachusetts at the intersection of Summer Street and Atlantic Avenue. The South Station Property is located adjacent to the South Station train terminal which acts as the northern most stop of Amtrak’s Northeast Corridor line, the 457-mile railroad which carries more than 750,000 passengers daily and connects Washington, D.C. to Boston, Massachusetts via cities such as New York, Baltimore and Philadelphia. During 2015, the South Station train terminal was the sixth busiest Amtrak station in the United States and serviced approximately 1.5 million passengers via Amtrak trains |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
38
LOAN #1: SOUTH STATION
alone. The South Station train terminal also services the MBTA red and silver lines and the MBTA regional commuter rail network that provides access to downtown Boston from communities to the west and south.
The appraisal identified the South Station Property as being located within the Boston Central Business District office submarket and the Boston Financial District retail submarket. According to the appraisal as of the first quarter of 2017, the Boston Central Business District submarket exhibited an office vacancy rate of 8.5% and average asking gross rent of $55.82 per SF. The average in-place office gross rent at the South Station Property is $46.32 per SF, which is below the aforementioned average asking gross rent for the Boston Central Business District submarket of $55.82. The most recent office lease executed at the South Station Property was Rakuten USA’s renewal for its space on the 4th floor of the South Station Property at a gross rental rate of $60.00 per SF. According to the appraisal, the Boston Financial District general retail submarket exhibited an occupancy rate of 97.4% as of the first quarter of 2017. According to the appraisal, the 2017 estimated population within a one-, three- and five-mile radius of the South Station Property was 58,662, 395,451 and 924,060, respectively, and 2017 estimated average household income within a one-, three- and five-mile radius of the South Station Property was $131,325, $99,758 and $94,022, respectively.
| ■ | The Borrower. The borrower is AAC South Station Property LLC, a single purpose Delaware limited liability company. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the South Station Loan. The borrower sponsor and carveout guarantor for the South Station Loan is Ben Ashkenazy. |
Ben Ashkenazy is the CEO of Ashkenazy Acquisition Corporation, a private real estate investment firm focusing on retail, hotel and office assets. Ashkenazy Acquisition Corporation has acquired over 15 million SF of retail, hospitality, office and residential properties located throughout the United States, Canada and England. Ashkenazy Acquisition Corporation has a current portfolio containing more than 100 buildings valued at approximately $12.0 billion. Ashkenazy Acquisition Corporation has prior experience owning mixed-use transit hubs, as it currently also owns Union Station in Washington D.C.
| ■ | Escrows.On the origination date of the South Station Loan, the borrower funded aggregate reserves of $572,100 consisting of (i) $443,368 for real estate taxes, (ii) $83,333 for ground rent, (iii) $27,457 for capital reserve funds required under the ground lease and (iv) $17,942 for unfunded obligations related to tenant improvements and leasing commissions and free rent. |
On each due date, the borrower will be required to fund (i) one-twelfth of the taxes that the lender estimates will be payable over the then-succeeding 12-month period, initially estimated to be $147,789, (ii) one-twelfth of the amount that the lender estimates will be necessary to pay insurance premiums over the then-succeeding 12-month period, provided that insurance is not covered under an acceptable blanket or umbrella policy (initially waived as the South Station Property is covered under an acceptable blanket or umbrella policy), (iii) a replacement reserve in the amount of $3,432 (provided that the foregoing replacement reserve deposits are waived so long as there is no default under the ground lease and the borrower is making the ground lease capital reserve deposits described in clause (vi) below), (iv) a tenant improvements and leasing commissions reserve in the amount of $20,833, subject to a cap of $1,250,000, (v) a ground rent reserve in the amount equal to one-twelfth of the ground rent estimated to be needed to pay all ground rent over the then-succeeding 12-month period, initially $83,333 and (vi) a ground lease capital reserve in the amount equal to one-twelfth of the amount estimated to be required to be deposited under the ground lease over the then-succeeding 12-month period, initially $3,432.
| ■ | Lockbox and Cash Management. The South Station Loan documents require a hard lockbox with in-place cash management. The South Station Loan documents require tenants, pursuant to tenant direction letters, to pay rent directly to the lockbox account and require that all other money received by the borrower with respect to the South Station Property be immediately deposited into such lockbox account. All amounts in the lockbox account are required to be swept to a lender-controlled cash management account on each business day and, provided no event of default under the South Station Loan documents is continuing, applied to payment of debt service, payment of operating expenses, and funding of required reserves, with the remainder (i) if a South Station Trigger Period (as defined below) is continuing, to be held by the lender in an excess cash reserve account and (ii) if no South Station Trigger Period is continuing, to be disbursed into the borrower’s operating account. Upon the occurrence and during the continuance of an event of default under the South Station Loan documents, the lender may apply any funds in the cash management account to amounts payable under the South Station Loan (and/or toward the payment of expenses of the South Station Property), in such order of priority as the lender may determine. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #1: SOUTH STATION
A“South Station Trigger Period” will commence upon the earlier of (i) the occurrence of an event of default under the South Station Loan documents or South Station Mezzanine Loan (as defined below) documents and continuing until the cure of such event of default; (ii) the occurrence of the aggregate debt service coverage ratio of the South Station Loan and South Station Mezzanine Loan (as defined below) being less than 1.15x, and continuing until such debt service coverage ratio is equal to or greater than 1.20x for two consecutive calendar quarters; (iii) the occurrence of the debt service coverage ratio of the South Station Loan being less than 1.61x, and continuing until such debt service coverage ratio is equal to or greater than 1.68x for two consecutive calendar quarters; and (iv) the occurrence of a South Station Specified Tenant Trigger Period (as defined below) and continuing until the South Station Specified Tenant Trigger Period ceases to exist in accordance with the terms of the South Station Loan documents.
A “South Station Specified Tenant Trigger Period” means a period (A) commencing upon the first to occur of: (i) any South Station Specified Tenant (as defined below) being in monetary or material non-monetary continuing default under its applicable lease; (ii) any South Station Specified Tenant failing to be in actual, physical possession of at least 80% of its leased space or failing to be open to the public for business during customary hours and/or “going dark” in more than 20% of the leased space; (iii) any South Station Specified Tenant giving notice that it is terminating 20% or more of its leased space; (iv) any termination or cancellation of at least 20% of the applicable South Station Specified Tenant lease (including, without limitation, rejection in any bankruptcy or similar insolvency proceeding) and/or any applicable South Station Specified Tenant lease failing to otherwise be in full force and effect; (v) any bankruptcy or similar insolvency of a South Station Specified Tenant; and (vi) the failure of a South Station Specified Tenant to provide written notice to the borrower of renewal with respect to a least 20% of the South Station Specified Tenant’s lease for a minimum term of five years upon the earlier to occur of (x) the date one year prior to its then-current lease expiration or (y) the date required to exercise a renewal under such South Station Specified Tenant’s lease and (B) expiring upon the lender’s receipt of reasonably acceptable evidence demonstrating the cure of the applicable event giving rise to the South Station Specified Tenant Trigger Period in accordance with the South Station Loan documents.
A “South Station Specified Tenant” means each of (i) CVS Pharmacy and an affiliate providing credit support or a guaranty under its respective lease, (ii) Amtrak and an affiliate providing credit support or a guaranty under its respective lease, or (iii) any other tenant whose lease accounts for (a) 20% or more of the total rental income for the South Station Property or (b) 20% or more of the total gross rentable square footage of the South Station Property.
| ■ | Property Management. The South Station Property is currently managed by Jones Lang LaSalle Americas, Inc. The borrower may not replace the property manager or consent to the assignment of the property manager’s rights under the management agreement without the prior consent of the lender. The lender has the right to require that the borrower terminate the management agreement and replace the property manager if (a) an event of default occurs under the South Station Loan documents, (b) the property manager becomes insolvent or a debtor in (i) any involuntary bankruptcy or insolvency proceeding that is not dismissed within 90 days of the filing thereof, or (ii) any voluntary bankruptcy or insolvency proceeding (c) the property manager has engaged in gross negligence, fraud, willful misconduct or misappropriation of funds or (d) there exists a default by the property manager beyond all applicable notice and cure periods under the management agreement. |
| ■ | Mezzanine or Secured Subordinate Indebtedness. Citigroup Global Markets Realty Corp. originated a mezzanine loan (the “South Station Mezzanine Loan”) in the original principal amount of $20,000,000 and subsequently assigned its interest in the South Station Mezzanine Loan to Senior Real Estate Finance Account (N), L.P. The South Station Mezzanine Loan is secured by the membership interests in the borrower under the South Station Loan. The South Station Mezzanine Loan is coterminous with the South Station Loan with a term of 120 months and a scheduled maturity date in September 2027. The South Station Mezzanine Loan requires monthly payments of interest only through the entire loan term. |
| ■ | Release of Collateral. Not permitted. |
| ■ | Terrorism Insurance. The borrower is required to maintain an “all-risk” insurance policy with no deductible in excess of $100,000 that provides coverage for terrorism in an amount equal to the full replacement cost of the South Station Property (plus 18 months of rental loss and/or business interruption coverage plus an additional period of indemnity covering up to the earlier of (i) 365 days following restoration or (ii) the period of time until such income returns to the same level it was prior to the loss, whichever occurs first). See “Risk Factors—Terrorism Insurance May Not Be Available for All Mortgaged Properties” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
40
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The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
41
LOAN #2: station place III |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
42
LOAN #2: station place III |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
43
LOAN #2: station place III |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
44
LOAN #2: station place III |
| Mortgaged Property Information | Mortgage Loan Information | |||||
| Number of Mortgaged Property | 1 | Loan Seller | CREFI | |||
| Location (City/State) | Washington, District of Columbia | Cut-off Date Balance(3) | $50,000,000 | |||
| Property Type | Office | Cut-off Date Balance per SF(2) | $367.04 | |||
| Size (SF) | 517,653 | Percentage of Initial Pool Balance | 5.1% | |||
| Total Occupancy as of 9/1/2017 | 98.6% | Number of Related Mortgage Loans | None | |||
| Owned Occupancy as of 9/1/2017 | 98.6% | Type of Security | Fee Simple | |||
| Year Built / Latest Renovation | 2009 / NAP | Mortgage Rate | 3.60000% | |||
| Appraised Value | $399,000,000 | Original Term to Maturity (Months)(4) | 121 | |||
| Appraisal Date | 8/22/2017 | Original Amortization Term (Months) | NAP | |||
| Borrower Sponsor(1) | Seven Hundred 2nd Street Holdings Mezz LLC | Original Interest Only Period (Months)(4) | 121 | |||
| Property Management | Property Group Partners LLC | First Payment Date(4) | 11/1/2017 | |||
| Maturity Date(4) | 11/1/2027 | |||||
| Underwritten Revenues | $35,992,988 | |||||
| Underwritten Expenses | $13,463,618 | Escrows(5) | ||||
| Underwritten Net Operating Income (NOI) | $22,529,370 | Upfront | Monthly | |||
| Underwritten Net Cash Flow (NCF) | $20,806,621 | Taxes | $0 | $0 | ||
| Cut-off Date LTV Ratio(2) | 47.6% | Insurance | $0 | $0 | ||
| Maturity Date LTV Ratio(2) | 47.6% | Replacement Reserve(6) | $8,628 | $8,628 | ||
| DSCR Based on Underwritten NOI / NCF(2) | 3.25x / 3.00x | TI/LC | $0 | $0 | ||
| Debt Yield Based on Underwritten NOI / NCF(2) | 11.9% / 11.0% | Other(7) | $415,973 | $0 | ||
| Sources and Uses | ||||||
| Sources | $ | % | Uses | $ | % | |
| Loan Combination Amount | $190,000,000 | 100.0% | Loan Payoff | $176,682,741 | 93.0% | |
| Principal Equity Distribution | 11,202,829 | 5.9 | ||||
| Closing Costs | 1,689,829 | 0.9 | ||||
| Reserves | 424,600 | 0.2 | ||||
| Total Sources | $190,000,000 | 100.0% | Total Uses | $190,000,000 | 100.0% | |
| (1) | There is no non-recourse carveout guarantor or environmental indemnitor other than the borrower. |
| (2) | Calculated based on the aggregate outstanding principal balance of the Station Place III Loan Combination (as defined below). |
| (3) | The Station Place III Loan (as defined below) has a Cut-off Date Balance of $50,000,000 and represents the non-controlling note A-4 of the $190,000,000 Station Place III Loan Combination, which is evidenced by fivepari passu notes and was co-originated by Citi Real Estate Funding Inc. (“CREFI”) and JPMorgan Chase Bank, National Association (“JPMCB”). The related companion loans are evidenced by (i) the controlling note A-1 ($64,000,000), which is currently held by JPMCB and is expected to be contributed to the JPMDB 2017-C7 securitization transaction, (ii) the non-controlling notes A-2 ($40,000,000) and A-3 ($10,000,000), which are currently held by JPMCB and are expected to be contributed to one or more future commercial mortgage securitization transactions, and (iii) the non-controlling note A-5 ($26,000,000), which is currently held by CREFI and is expected to be contributed to one or more future commercial mortgage securitization transactions. See“—The Mortgage Loan” below. |
| (4) | The first payment date under the Station Place III Loan Combination documents is December 1, 2017. On the closing date, CREFI will deposit funds sufficient to pay the interest due for the November 2017 payment date of the CGCMT 2017-C4 commercial mortgage trust. The Original Term to Maturity and Original Interest Only Period presented in the Mortgage Loan Information above are inclusive of the additional November 2017 interest payment to be deposited by CREFI. |
| (5) | See “—Escrows” below. |
| (6) | Replacement Reserves are capped at $310,592. |
| (7) | Upfront Other reserve includes (i) $115,973 for outstanding tenant improvements and free rent and (ii) $300,000 for service reserve funds related to the tri-party agreement among the lender, borrower and the SEC (as defined below). |
| ■ | The Mortgage Loan. The mortgage loan (the“Station Place III Loan”) is part of a loan combination (the“Station Place III Loan Combination”) evidenced by fivepari passu notes that are together secured by a first mortgage encumbering the borrower’s fee simple interest in a Class A office building in Washington, D.C (the“Station Place III Property”). The Station Place III Loan, which is evidenced by the non-controlling note A-4, had an original principal balance of $50,000,000, has a Cut-off Date Balance of $50,000,000 and represents approximately 5.1% of the Initial Pool Balance. The related companion loans are evidenced by (i) the controlling note A-1, which had an original principal balance of $64,000,000, has an outstanding principal balance as of the Cut-off Date of $64,000,000, is currently held by JPMCB and is expected to be contributed to the JPMDB 2017-C7 securitization transaction, (ii) the non-controlling notes A-2 and A-3, which had an aggregate original principal balance of $50,000,000, have an aggregate outstanding principal balance as of the Cut-off Date of $50,000,000, are currently held by JPMCB and are expected to be contributed to one or more future commercial mortgage securitization transactions and (iii) the non-controlling note A-5, which had an original principal balance of $26,000,000, has an outstanding principal balance as of the Cut-off Date of $26,000,000, is currently held by CREFI and is expected to be contributed to one or more future commercial mortgage securitization transactions. The Station Place III Loan Combination, which accrues interest at an interest rate of 3.60000%per annum, was co-originated by CREFI and JPMCB on October 3, 2017, had an original principal balance of $190,000,000 and has an outstanding principal balance as of the Cut-off Date of $190,000,000. The proceeds of the Station Place III Loan Combination were primarily used to refinance the existing debt on the Station Place III Property, return equity to the borrower, pay origination costs and fund reserves. |
Inclusive of the interest to be deposited by CREFI for the November 2017 payment date, the Station Place III Loan Combination had an initial term of 121 months and has a remaining term of 121 months as of the Cut-off Date. The Station Place III Loan Combination requires monthly payments of interest only for the term of the Station Place III Loan Combination. The scheduled maturity date of the Station Place III Loan Combination is the due date in November 2027. At any time after the earlier of (i) December 1, 2021 and (ii) the second anniversary of the
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #2: station place III |
securitization of the last note of the Station Place III Loan Combination to be securitized, the Station Place III Loan Combination may be defeased with certain direct full faith and credit obligations of the United States of America or other obligations which are “government securities” permitted under the Station Place III Loan Combination documents. The borrower is also permitted to prepay the Station Place III Loan Combination on or after December 1, 2019 with the payment of a yield maintenance premium. Voluntary prepayment of the Station Place III Loan Combination is permitted on or after the due date occurring in August 2027 without payment of any prepayment premium.
Note Summary
| Note(s) | Current or Anticipated Holder of Securitized Note | Aggregate Cut-off Date Balance |
Station Place III Loan
| ||
| A-4 | CGCMT 2017-C4 | $50,000,000 |
Station Place III Pari Passu Companion Loans
| ||
| A-1 | JPMDB 2017-C7(1) | $64,000,000 |
| A-2 | JPMCB(2) | $40,000,000 |
| A-3 | JPMCB(2) | $10,000,000 |
| A-5 | CREFI(2) | $26,000,000 |
| (1) | Expected to be contributed to the related securitization transaction upon closing of such securitization transaction. |
| (2) | Expected to be contributed to one or more future securitization transactions. |
| ■ | The Mortgaged Property.The Station Place III Property is a 10-story, 517,653 SF, Class A office building constructed in 2009 and located in the NoMa (north of Massachusetts Avenue) neighborhood of Washington, D.C. Together with Station Place I and Station Place II, the Station Place III Property is part of the Station Place complex, Washington D.C.’s largest private office development that is comprised of approximately 1.5 million SF of Class A office space situated on approximately 5.5 acres in Washington, D.C.’s NoMa submarket. The Station Place III Property is connected with through-access to Station Place I and II on lower and upper floors and offers direct covered secure access to Union Station, a multimodal transportation hub with access to the Metro, Amtrak and Marc train systems. The Station Place III Property is LEED Silver Certification Energy certified. The Station Place III Property features a subterranean parking garage with 308 parking spaces, resulting in a parking ratio of approximately 0.60 spaces per 1,000 SF of net rentable area. To meet the requirements of current tenant leases for an aggregate of 451 parking spaces, the borrower has leased an additional 178 spaces from an affiliate in the Station Place II parking garage. |
As of September 1, 2017, the Station Place III Property was 98.6% leased to four tenants. The largest tenant, the U.S. Securities and Exchange Commission (“SEC”), leases 209,530 SF (40.5% of the net rentable area) through February 2021, with no renewal options, and has been a tenant at the Station Place III Property since March 2011. The SEC accounts for approximately 33.4% of the underwritten base rent at the Station Place III Property. The SEC is an agency of the United States federal government that regulates and supervises the securities industry. The SEC has six departments and approximately 590 employees at the Station Place III Property. The SEC also leases space at Station Place I and Station Place II and the combined complex serves as the SEC’s headquarters. In total, the SEC leases approximately 1.6 million SF across all three buildings. According to the property manager, the SEC has invested $14.3 million ($68 per SF) into its space at the Station Place III Property and approximately $66.2 million ($52 per SF) across the entire complex. In July, the SEC issued a request for proposal to lease 1,274,000 SF of space with offers due in November 2017. Provisions in the request for proposal include, but are not limited to, a requirement for the site to be within 2,640 walkable feet of a Metrorail station, rent of $50.00 gross and delivery of the space by December 31, 2022. The second largest tenant, Kaiser Foundation Health Plan of the Mid-Atlantic States, Inc. (“Kaiser Permanente”) leases 206,875 SF (40.0% of the net rentable area) through June 2024, with two, five-year renewal options. Kaiser Permanente has been a tenant at the Station Place III Property since July 2009. Founded in 1945, Kaiser Permanente is an American health care provider headquartered in Oakland, California and offers not-for-profit health plans. The company currently serves approximately 11.8 million members in eight states and the District of Columbia. Kaiser Permanente accounts for approximately 41.2% of the underwritten base rent at the Station Place III Property and its lease is guaranteed by Kaiser Foundation Health Plan, Inc. Kaiser Permanente, which utilizes most of the space for medical offices, has invested $78.1 million ($377 per SF) for the overall
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #2: station place III |
improvement of their space as well as for specialized equipment. The third largest tenant, the American Chemistry Council (“ACC”), leases 93,168 SF (18.0% of the net rentable area) through December 2025, with one, five-year extension option (which may be exercised by the tenant only if it occupies at least 70% of its leased premises on the date it delivers notice of the extension) and has leased space at the Station Place III Property since December 2008. Originally founded in 1872, the ACC represents companies engaged in the business of chemistry. The ACC accounts for approximately 25.3% of the underwritten base rent at the Station Place III Property.
Thefollowingtable presents certain information relating to the major tenants at the Station Place III Property:
Largest Owned Tenants Based on Underwritten Base Rent
Tenant Name | Credit Rating (Fitch/MIS/S&P)(1) | Tenant GLA | % of GLA | UW Base Rent(2) | % of Total UW Base Rent(2) | UW Base Rent | Lease Expiration | Renewal / Extension Options | ||||||||
| Kaiser Permanente | NA / NA / AA- | 206,875 | 40.0% | $10,115,815 | 39.1% | $48.90 | 6/30/2024 | 2, 5-year options | ||||||||
| U.S. Securities and Exchange Commission(3) | AAA / Aaa / AA+ | 209,530 | 40.5 | 9,482,832 | 36.7 | $45.26 | 2/28/2021 | NAP | ||||||||
| American Chemistry Council(4) | NA / NA / NA | 93,168 | 18.0 | 6,219,695 | 24.1 | $66.76 | 12/31/2025 | 1, 5-year option | ||||||||
| Pritchard Industries, Inc. | NA / NA / NA | 833 | 0.2 | 22,987 | 0.1 | $27.60 | 12/31/2018 | NAP | ||||||||
| Largest Tenants | 510,406 | 98.6% | $25,841,329 | 100.0% | $50.63 | |||||||||||
| Vacant | 7,247 | 1.4 | 0 | 0.0 | $0.00 | |||||||||||
| Total / Wtd. Avg. All Owned Tenants | 517,653 | 100.0% | $25,841,329 | 100.0% | $50.63 | |||||||||||
| (1) | Certain ratings are those of the parent company or the U.S. federal government whether or not the parent or the U.S. federal government, as applicable, guarantees the lease. |
| (2) | UW Base Rent, % of Total UW Base Rent and UW Base Rent $ per SF are based on the underwritten rent roll dated September 1, 2017. Rents for the SEC and Kaiser Permanente leases were straight lined over the remainder of the lease term based on contractual rent steps. The current in-place rent for the SEC and Kaiser Permanente tenants is $38.27 and $43.70, respectively. |
| (3) | UW Base Rent, % of Total UW Base Rent and UW Base Rent $ per SF include $1,262,026 of annual additional triple net rent paid by the SEC. The SEC elected to utilize an additional allowance pursuant to its lease for the improvement of their space, amortizing such amount as additional triple net rent over the 10 year lease term expiring in February 2021. |
| (4) | The American Chemistry Council leases its space on a modified gross basis. |
The following table presents the lease rollover schedule at the Station Place III Property, based on initial lease expiration dates:
Lease Expiration Schedule(1)(2)
Year Ending December 31 | Expiring Owned GLA | % of Owned GLA | Cumulative % of Owned GLA | UW Base Rent(3) | % of Total UW Base Rent(3) | UW Base Rent $ per SF(3)(4) | # of Expiring Tenants | |||||||
| MTM | 0 | 0.0% | 0.0% | $0 | 0.0% | $0.00 | 0 | |||||||
| 2017 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2018 | 833 | 0.2 | 0.2% | 22,987 | 0.1 | 27.60 | 1 | |||||||
| 2019 | 0 | 0.0 | 0.2% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2020 | 0 | 0.0 | 0.2% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2021 | 209,530 | 40.5 | 40.6% | 9,482,832 | 36.7 | 45.26 | 1 | |||||||
| 2022 | 0 | 0.0 | 40.6% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2023 | 0 | 0.0 | 40.6% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2024 | 206,875 | 40.0 | 80.6% | 10,115,815 | 39.1 | 48.90 | 1 | |||||||
| 2025 | 93,168 | 18.0 | 98.6% | 6,219,695 | 24.1 | 66.76 | 1 | |||||||
| 2026 | 0 | 0.0 | 98.6% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2027 | 0 | 0.0 | 98.6% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2028 & Thereafter | 0 | 0.0 | 98.6% | 0 | 0.0 | 0.00 | 0 | |||||||
| Vacant | 7,247 | 1.4 | 100.0% | 0 | 0.0 | 0.00 | 0 | |||||||
| Total / Wtd. Avg. | 517,653 | 100.0% | $25,841,329 | 100.0% | $50.63 | 4 |
| (1) | Calculated based on the approximate square footage occupied by each collateral tenant. |
| (2) | Certain tenants may have lease termination options that are exercisable prior to the originally stated expiration date of the subject lease and that are not considered in the Lease Expiration Schedule. |
| (3) | UW Base Rent, % of Total UW Base Rent and UW Base Rent $ per SF are based on the underwritten rent roll dated September 1, 2017. Rents for the SEC and Kaiser Permanente leases were straight lined over the remainder of the lease term based on contractual rent steps.The current in-place rent for the SEC and Kaiser Permanente tenants is $38.27 and $43.70, respectively. |
| (4) | Wtd. Avg. annual UW Base Rent $ per SF excludes vacant space. |
The following table presents certain information relating to historical leasing at the Station Place III Property:
Historical Leased %(1)
2014 | 2015 | 2016 | As of 9/1/2017 | |
| Owned Space | 98.6% | 98.6% | 98.6% | 98.6% |
| (1) | As provided by the borrower and which represents occupancy as of December 31 for the indicated year unless otherwise specified. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #2: station place III |
| ■ | Operating History and Underwritten Net Cash Flow. The following table presents certain information relating to the historical operating performance and the Underwritten Net Cash Flow at the Station Place III Property: |
Cash Flow Analysis
2014 | 2015 | 2016 | TTM 7/31/2017 | Underwritten(1)(2) | Underwritten $ per SF | ||||||
| Base Rent | $22,205,311 | $22,889,017 | $23,517,574 | $23,840,688 | $25,841,329(3) | $49.92 | |||||
| Gross Up Vacancy | 0 | 0 | 0 | 0 | 144,940 | 0.28 | |||||
| Reimbursements | 10,250,909 | 11,135,446 | 10,797,352 | 11,105,091 | 11,778,506 | 22.75 | |||||
| Other Income | 73,799 | 106,810 | 178,763 | 133,734 | 116,451 | 0.22 | |||||
| Vacancy & Credit Loss | 0 | 0 | 0 | 0 | (1,888,239) | (3.65) | |||||
| Effective Gross Income | $32,530,019 | $34,131,273 | $34,493,689 | $35,079,513 | $35,992,988 | $69.53 | |||||
| Real Estate Taxes | $5,869,670 | $5,958,023 | $5,698,505 | $5,907,283 | $6,165,030 | $11.91 | |||||
| Insurance | 145,887 | 147,244 | 145,460 | 139,160 | 153,980 | 0.30 | |||||
| Management Fee | 582,700 | 582,700 | 590,800 | 596,517 | 1,000,000 | 1.93 | |||||
| Other Operating Expenses | 4,763,045 | 5,372,058 | 5,729,838 | 6,067,372 | 6,144,608 | 11.87 | |||||
| Total Operating Expenses | $11,361,302 | $12,060,025 | $12,164,603 | $12,710,332 | $13,463,618 | $26.01 | |||||
| Net Operating Income | $21,168,717 | $22,071,248 | $22,329,086 | $22,369,181 | $22,529,370 | $43.52 | |||||
| TI/LC | 0 | 0 | 0 | 0 | 1,619,218 | 3.13 | |||||
| Capital Expenditures | 0 | 0 | 0 | 0 | 103,531 | 0.20 | |||||
| Net Cash Flow | $21,168,717 | $22,071,248 | $22,329,086 | $22,369,181 | $20,806,621 | $40.19 | |||||
| Occupancy | 98.6% | 98.6% | 98.6% | 98.6% | 95.0%(4) | ||||||
| NOI Debt Yield(5) | 11.1% | 11.6% | 11.8% | 11.8% | 11.9% | ||||||
| NCF DSCR(5) | 3.05x | 3.18x | 3.22x | 3.23x | 3.00x |
| (1) | Underwritten Base Rent is based on the annualized contractual base rent for occupied tenants as per the underwritten rent roll dated September 1, 2017. Rents for the SEC and Kaiser Permanente leases were straight lined over the remainder of their respective lease terms based on contractual rent steps. |
| (2) | Pursuant to the terms of the SEC lease, the tenant elected to utilize its additional allowance for the improvement of its space, amortizing such amount as additional triple net rent over the 10-year firm lease term expiring February 2021. |
| (3) | Includes underwritten rent steps which equate to (i) for non-investment grade tenants, base rent steps through July 2018 (an aggregate of $152,261 for American Chemistry Council and Pritchard Industries, Inc.), and (ii) for investment grade tenants, the average base rent over the remainder of the lease term (an aggregate of $1,473,855 for SEC and Kaiser Permanente). |
| (4) | Represents the underwritten economic vacancy of 5.0%. |
| (5) | Calculated based on the aggregate outstanding principal balance of the Station Place III Loan Combination. |
| ■ | Appraisal.According to the appraisal, the Station Place III Property had an “as-is” appraised value of $399,000,000 as of an effective date of August 22, 2017. |
Appraisal Approach | “As-Is” Value | Discount Rate | Capitalization Rate |
| Direct Capitalization Approach | $401,000,000 | N/A | 5.25% |
| Discounted Cash Flow Approach | $399,000,000 | 6.00%(1) | 5.75%(2) |
| (1) | Represents the internal rate of return (cash flow). |
| (2) | Represents the terminal capitalization rate. |
| ■ | Environmental Matters. According to the Phase I environmental report dated September 5, 2017, the environmental consultant did not recommend any further action at the Station Place III Property. In lieu of providing an environmental indemnity by an acceptable guarantor in accordance with the Station Place III Loan Combination documents, the Station Place III Property and related lender were added to an environmental collateral protection and liability environmental insurance policy also covering non-collateral property. The insurance was issued by Ironshore Specialty Insurance Company and includes a $50,000 deductible with an aggregate policy limit of $10,000,000. |
| ■ | Market Overview and Competition. The Station Place III Property is located at the convergence of the Capitol Hill and NoMa submarkets in Washington, D.C. The Station Place III Property is located on 2nd Street Northeast, just south of H Street and East of the Amtrak train tracks. The neighborhood’s primary roadways include Massachusetts Avenue, Florida Avenue, New York Avenue, North Capitol Street, Fourth Street and Fifth Street. Both Pennsylvania and Massachusetts Avenues are northwest to southeast roads, with the former providing direct access to the United States Capitol and the latter providing access to Union Station. New York Avenue (U.S. Route 50) is a southwest to northeast roadway, which is a major commuter route into the city from Maryland. North Capital, Fourth Street and Fifth Street are the main north to south right of ways, with North Capitol Street being the dominant traffic artery. The Station Place III Property is approximately 0.25 miles north of the Union Station train and Metrorail station, approximately |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #2: station place III |
one-third mile northeast of the Judiciary Square Metrorail station, and approximately 0.5 miles southwest of the New York Avenue-Florida Avenue-Gallaudet University Metrorail station. According to the appraisal, the 2017 estimated population within a one-, three- and five-mile radius of the Station Place III Property was 54,620, 352,114 and 768,257, respectively, and the estimated average household income within a one-, three- and five-mile radius of the Station Place III Property was $136,876, $117,455 and $109,461, respectively.
According to the appraisal, the Station Place III Property is located in the NoMA office submarket of the greater District of Columbia office market. The NoMA office submarket consisted of approximately 11.0 million SF of office space with an overall vacancy rate of approximately 9.8% as of the second quarter of 2017. The appraisal identified six properties as directly competitive with the Station Place III Property with a weighted average vacancy of approximately 12.3%. The appraisal identified 13 comparable office leases in the NoMA office submarket in six buildings ranging in size from approximately 200,000 SF to 839,000 SF. Asking gross rents for the comparable leases ranged from $48.00 per SF to $69.00 per SF. The appraiser’s concluded gross market rent for office space is $68.00 per SF, which is in-line with the underwritten gross rent at the Station Place III Property of $69.63 per SF.
The following table presents certain information relating to the primary competition for the Station Place III Property:
Office Lease Comparables(1)
Property Name | Address | Year Built | Occupancy | Total GLA (SF) | Tenant Name | Lease Start Date | Lease Area (SF) | Base Rent PSF |
| Station Place III (Subject) | 700 2nd Street, NE, Washington D.C. | 2009 | 98.6%(2) | 517,653(2) | - | - | - | - |
| Republic Square | 25 Massachusetts Avenue, NW, Washington D.C. | 2006 | 66.0% | 380,912 | American Medical Association | Oct-2016 | 31,590 | $41.52(3) |
| Barr Pharmaceuticals | Aug-2016 | 8,232 | $43.00(3) | |||||
| Republic Square II | 660 North Capitol Street, NW, Washington D.C. | 2016 | 60.0%(4) | 200,000 | National League of Cities/National Association of Counties | Nov-2015 | 77,000 | $65.00 |
| Hall of States Building | 400-440 North Capitol Street, NW, Washington D.C. | 1976 | 98.0% | 570,729 | Marine Engineers Benefits Assoc. | May-2016 | 6,900 | $60.00 |
| Liberty Mutual | Apr-2016 | 4,300 | $58.00 | |||||
| 601 New Jersey Avenue | 601 New Jersey Avenue, | 2001 | 71.0% | 258,710 | General Pharma | Oct-2017 | 16,515 | $61.00 |
| NW, Washington D.C. | US Telecom | Jul-2017 | 11,992 | $64.50 | ||||
| PSEG | Jun-2017 | 2,331 | $63.00 | |||||
| Carpi & Clay | May-2017 | 2,643 | $65.00 | |||||
| Sentinel Square II | 1050 1st Street, NE, Washington D.C. | 2013 | 94.0% | 289,524 | D.C. Government | Dec-2016 | 168,101 | $48.85 |
| GSA - FEC | Dec-2016 | 99,677 | $48.00 | |||||
| Three & Four Constitution Square | 175 N Street and 150 M Street, NE, Washington D.C. | 2014 | 100.0% | 839,000 | GSA - DOJ | Oct-2015 | 839,000 | $49.00 |
| (1) | Source: Appraisal. |
| (2) | Based on borrower rent roll dated September 1, 2017. |
| (3) | The leases for American Medical Association and Barr Pharmaceuticals are triple net. The full-service equivalent Base Rent PSF for these tenants is $67.52 and $69.00, respectively. |
| (4) | Republic Square II was delivered in 2016 and is currently in the process of leasing up space. |
| ■ | The Borrower. The borrowing entity for the Station Place III Loan Combination is Seven Hundred 2nd Street Holdings LLC, a Delaware limited liability company and special purpose entity with two independent directors in its organizational structure. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Station Place III Loan Combination. |
The Station Place III Loan sponsor is Seven Hundred 2nd Street Holdings Mezz LLC (“700 SSH Mezz”). 700 SSH Mezz has two managing members, 700 Second Street Associates LP (“SSA”) and Fisher Brothers Washington LLC (“Fisher Brothers”) and an administrative member LD Residual V LLC. There is no separate nonrecourse carveout guarantor, and the borrower is the sole party to the environmental indemnity. The Station Place III Loan Combination documents require the borrower to maintain an environmental insurance policy with aggregate and individual limits of $2,000,000. In addition, the environmental report recommended no further investigation of the Station Place III Property. SSA is majority owned by Morgan Stanley Prime Property Fund (“PPF”).
PPF is a diversified core real estate fund managed by Morgan Stanley Real Estate. PPF’s assets include office, retail, multifamily, industrial, self-storage and hotel properties that are located in major real estate markets throughout the United States. PPF now stands at approximately $18.0 billion, the fourth largest open end fund in the United States. Founded in 1915, Fisher Brothers is a real estate investment company headquartered in New York, New York. Fisher Brothers has built, owned and managed more than 10.0 million SF of Class A commercial space with a geographic focus on urban markets along the east coast.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #2: station place III |
| ■ | Escrows.On the origination date of the Station Place III Loan Combination, the borrower funded reserves of (i) $8,628 for replacement reserves, (ii) $115,973 for outstanding tenant improvements and free rent and (iii) $300,000 for service reserve funds related to the tri-party agreement among the lender, borrower and SEC, required to be on deposit with the lender pursuant to the lease between the borrower and the SEC. |
The borrower is required to deposit $8,628 for replacement reserves on each monthly payment date, subject to a cap of $310,592.
During a Station Place III Trigger Period (as defined below), the borrower will be required to fund on each monthly payment date (i) one-twelfth of the taxes that the lender estimates will be payable over the then-succeeding 12-month period, (ii) at the option of the lender, one-twelfth of the amount that the lender estimates will be necessary to pay insurance premiums over the then-succeeding 12-month period, provided that insurance is not covered under an acceptable blanket policy. During a Station Place III Trigger Period caused solely by a Kaiser Permanente Trigger Event (as defined below) and/or an SEC Trigger Event (as defined below), the borrower is required to pay to the lender on each payment date thereafter for tenant improvements and leasing commissions incurred, all excess cash flow after the payment of all required monthly debt service payments, required reserves and operating expenses. This reserve is subject to a cap of (i) with respect to a Kaiser Permanente Trigger Event, $60.00 per SF of the unrenewed, “dark”, vacated or abandoned space currently leased by Kaiser Permanente (the“Kaiser Permanente Cap”), and (ii) with respect to a SEC Trigger Event, $60.00 per SF of the unrenewed, “dark”, vacated or abandoned space currently leased by SEC (the“SEC Cap”). The Kaiser Permanente Cap currently equals $12,412,500 (approximately $23.98 per SF). The SEC Cap currently equals $12,571,800 (approximately $24.29 per SF).
| ■ | Lockbox and Cash Management. The Station Place III Loan Combination is structured with a hard lockbox and springing cash management. The borrower is required under the Station Place III Loan Combination documents to send tenant direction letters to all tenants within 15 days of origination of the Station Place III Loan instructing them to deposit all rents and other payments into the clearing account controlled by the lender, and any funds received by the borrower or the property manager are required to be deposited in the lockbox within two business days of receipt. During a Station Place III Trigger Period (as defined below), all funds in the clearing account are required to be transferred on a daily basis into a deposit account established and maintained by the lender, and applied to all required payments and reserves as set forth in the Station Place III Loan Combination documents. Provided no Station Place III Trigger Period is continuing, excess cash in the clearing account is required to be disbursed to the borrower in accordance with the Station Place III Loan Combination documents. Upon the occurrence of an event of default under the Station Place III Loan Combination documents, funds may be applied in such order of priority as the lender may determine. |
A “Station Place III Trigger Period” will commence upon the occurrence of (i) an event of default, (ii) the debt service coverage ratio, as of any calculation date, falling below 1.50x based on the trailing three-month period immediately preceding the date of such determination, (iii) an SEC Trigger Event, (iv) a Kaiser Permanente Trigger Event or (v) any bankruptcy action of the borrower and will end upon (a) with respect to clause (i) above, the date on which such event of default is cured (if applicable, and in no event more than four times), (b) with respect to clause (ii) above, the date on which the debt service coverage ratio is at least 1.50x for two consecutive calendar quarters based on the trailing three-month period immediately preceding the date of such determination, (c) with respect to clause (iii) above, the occurrence of an SEC Trigger Event Cure (as defined below) and (d) with respect to clause (iv) above, the occurrence of a Kaiser Permanente Trigger Event Cure (as defined below). With respect to clause (v) above, in no event will the borrower have the right to cure a Station Place III Trigger Period caused by any bankruptcy action of the borrower.
A “Kaiser Permanente Trigger Event” means (i) if Kaiser Permanente does not either (a) exercise its renewal option or (b) enter into a new lease or amend the existing Kaiser Permanente lease on substantially the same terms as those set forth in the renewal provisions in the current Kaiser Permanente lease, in each case before the date that is 24 months prior to the expiration date of the Kaiser Permanente lease or (ii) if Kaiser Permanente “goes dark”, vacates or abandons 75% or more of its premises.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
50
LOAN #2: station place III |
A “Kaiser Permanente Trigger Event Cure” means either (i) the subsequent extension of the Kaiser Permanente lease or the entering into of a new lease with Kaiser Permanente, or amendment of the existing Kaiser Permanente lease, that is on substantially the same terms as those set forth in the renewal provisions in the current Kaiser Permanente lease, (ii) the replacement of Kaiser Permanente with a tenant reasonably acceptable to the lender pursuant to a lease reasonably approved by the lender and such tenant being in occupancy of its premises and delivery of a tenant estoppel acceptable to the lender, or (iii) deposits in the Kaiser rollover reserve equal or exceed $60.00 per SF of the unrenewed, “dark”, vacated or abandoned space currently leased by Kaiser Permanente.
An “SEC Trigger Event” means (i) if the SEC does not either (a) exercise its renewal option or (b) enter into a new lease, or amend the existing SEC lease, that is on substantially the same terms as those set forth in the renewal provisions in the current SEC lease, in each case before the date that is 12 months prior to the expiration date of the SEC lease or (ii) if the SEC “goes dark”, vacates or abandons 75.0% or more of its premises.
An “SEC Trigger Event Cure” means either (i) the subsequent extension of the SEC lease, the entering into of a new lease with the SEC or the amendment of the existing SEC lease on substantially the same terms as those set forth in the renewal provisions in the current SEC lease, (ii) the replacement of the SEC with a tenant reasonably acceptable to the lender pursuant to a lease reasonably acceptable to the lender, with such tenant being in occupancy and delivery of a “statement of lease” in form substantially similar to the “statement of lease” currently attached to the SEC lease, or (iii) deposits into the SEC rollover reserve equal or exceed $60.00 per SF of the unrenewed, “dark”, vacated or abandoned space currently leased by the SEC.
| ■ | Property Management.The Station Place III Property is currently managed by Property Group Partners LLC, a Delaware limited liability company, as successor-in-interest to Louis Dreyfus Properties, LLC and an affiliate of LD Residual V LLC. The lender has the right to require that the borrower terminate the management agreement and replace the property manager if (a) the property manager becomes subject to a bankruptcy action; (b) there exists an event of default under the Station Place III Loan Combination documents; or (c) there exists a default beyond all applicable notice and cure periods under the management agreement. |
| ■ | Future Mezzanine or Secured Subordinate Indebtedness.An entity meeting the requirements of the Station Place III Loan Combination documents and owning 100% of the equity interests in the borrower is permitted to obtain a mezzanine loan secured by the equity interests in the borrower upon satisfaction of the following conditions, among others: (i) no event of default is continuing under the Station Place III Loan Combination documents; (ii) the loan-to-value ratio (including the mezzanine loan) does not exceed 47.6%; (iii) the projected debt service coverage ratio (as calculated in the loan documents and including the mezzanine loan) for the 12-month period following the origination date of the mezzanine loan is not less than 2.79x; and (iv) the mezzanine lender enters into a market intercreditor agreement in form and substance acceptable to the lender in its reasonable discretion. |
| ■ | Release of Collateral. Not permitted. |
| ■ | Terrorism Insurance. The borrower is required to maintain an “all-risk” insurance policy that provides coverage for terrorism in an amount equal to 100% of the full replacement cost of the Station Place III Property, plus a business interruption insurance policy that provides 24 months of business interruption coverage (plus up to six months of extended indemnity, with no deductible in excess of $25,000 (provided, however, that deductibles for damage caused by earth movement and wind may not exceed 5% of the total insurable value of the applicable individual property). If TRIPRA is not in effect, the borrower is required to carry the maximum terrorism coverage afforded for two times the cost of the issuance premium payable at the time with respect to the Station Place III Property and business interruption/rental loss insurance. See“Risk Factors—Terrorism Insurance May Not Be Available for All Mortgaged Property” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
51
| LOAN #3: GODFREY HOTEL |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
52
| LOAN #3: GODFREY HOTEL |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
53
| LOAN #3: GODFREY HOTEL |
| Mortgaged Property Information | Mortgage Loan Information | ||||
| Number of Mortgaged Properties | 1 | Loan Seller | CREFI | ||
| Location (City/State) | Chicago, Illinois | Cut-off Date Balance | $47,500,000 | ||
| Property Type | Hospitality | Cut-off Date Balance per Room | $214,932.13 | ||
| Size (Rooms) | 221 | Percentage of Initial Pool Balance | 4.9% | ||
| Total TTM Occupancy as of 2/28/2017 | 95.0% | Number of Related Mortgage Loans | None | ||
| Owned TTM Occupancy as of 2/28/2017 | 95.0% | Type of Security | Fee Simple | ||
| Year Built / Latest Renovation | 2014 / NAP | Mortgage Rate | 4.96000% | ||
| Appraised Value | $101,400,000 | Original Term to Maturity (Months) | 60 | ||
| Appraisal Date | 3/28/2017 | Original Amortization Term (Months) | 360 | ||
| Borrower Sponsor | John W. Rutledge | Original Interest Only Period (Months) | NAP | ||
| Property Management | Oxford Hotels and Resorts, LLC | First Payment Date | 11/6/2017 | ||
| Maturity Date | 10/6/2022 | ||||
| Underwritten Revenues | $23,665,236 | ||||
| Underwritten Expenses | $16,281,719 | Escrows(1) | |||
| Underwritten Net Operating Income (NOI) | $7,383,517 | ||||
| Underwritten Net Cash Flow (NCF) | $6,436,907 | Upfront | Monthly | ||
| Cut-off Date LTV Ratio | 46.8% | Taxes | $225,249 | $112,624 | |
| Maturity Date LTV Ratio | 43.2% | Insurance | $73,879 | $10,554 | |
| DSCR Based on Underwritten NOI / NCF | 2.42x / 2.11x | FF&E(2) | $0 | $78,884 | |
| Debt Yield Based on Underwritten NOI / NCF | 15.5% / 13.6% | Other(3) | $3,240,000 | $0 | |
| Sources and Uses | ||||||||
| Sources | $ | % | Uses | $ | % | |||
| Loan Amount | $47,500,000 | 55.7 | % | Loan Payoff(4) | $80,278,257 | 94.1 | % | |
| Other Sources(4) | 37,778,257 | 44.3 | Reserves | 3,539,127 | 4.1 | |||
| Principal’s New Cash Contribution | 43,459 | 0.1 | Closing Costs | 1,504,332 | 1.8 | |||
| Total Sources | $85,321,716 | 100.0 | % | Total Uses | $85,321,716 | 100.0 | % | |
| (1) | See “—Escrows” below. |
| (2) | The Godfrey Hotel Loan documents require monthly deposits into the FF&E reserve equal to 4% of the greater of (x) monthly gross revenue for the corresponding month in the prior year and (y) projected gross revenue for the then current month (initially $78,884). |
| (3) | Other upfront reserve represents $2,500,000 for EB-5 reimbursements and a seasonality reserve of $740,000. The borrower is also required to deposit a seasonality reserve beginning in 2018 and continuing until loan maturity on each monthly payment date between April and November annually, equal to the excess cash flow up to 110% of the greater of (i) the total budgeted shortfall amount in all negative cash flow periods within the same fiscal year or (ii) the actual total shortfall amount in all negative cash flow periods for the preceding calendar year based on the monthly operating statements for the Godfrey Hotel Property for the 12 month period to date of determination. |
| (4) | The prior mortgage loan in the original principal amount of up to $80,000,000 (“Prior Senior Loan”), with an outstanding principal balance plus accrued interest of $69,114,601 at the origination of the Godfrey Hotel Loan and secured by the Godfrey Hotel Property, was originated by an affiliate of the borrower and was partially paid off with the Godfrey Hotel Loan proceeds, The remaining balance ($37,653,257) of the Prior Senior Loan was converted into an unsecured loan obligating the sole member of the borrower and held by Quadrum (defined below). The borrower was released of all liability in connection with the Prior Senior Loan, the mortgage against the Godfrey Hotel Property securing the Prior Senior Loan was released at origination of the Godfrey Hotel Loan, and the note evidencing the Prior Senior Loan was marked cancelled. The Bridge Loan (defined below) in the original principal amount of up to $36,000,000, with an outstanding principal balance plus accrued interest of $11,163,656 at the origination of the Godfrey Hotel Loan, was also partially paid off with the Godfrey Hotel Loan proceeds. The remaining balance of the Bridge Loan is $125,000. |
| ■ | The Mortgage Loan.The mortgage loan (the “Godfrey Hotel Loan”) is evidenced by a note in the original principal amount of $47,500,000 and is secured by a first mortgage encumbering the borrower’s fee simple interest in a 221-room full service hotel located in Chicago, Illinois (the“Godfrey Hotel Property”). The Godfrey Hotel Loan was originated by Citi Real Estate Funding Inc. on September 21, 2017 and represents approximately 4.9% of the Initial Pool Balance. The note evidencing the Godfrey Hotel Loan had an original principal balance of $47,500,000, has an outstanding principal balance as of the Cut-off Date of $47,500,000 and accrues interest at an interest rate of 4.96000%per annum. The proceeds of the Godfrey Hotel Loan were used to refinance the existing debt on the Godfrey Hotel Property, fund reserves and pay origination costs. |
TheGodfrey Hotel Loan had an initial term of 60 months and has a remaining term of 60 months as of the Cut-off Date. TheGodfrey Hotel Loan requires monthly payments of approximately $253,830, which payments include interest and principal based on a 30-year amortization schedule. The scheduled maturity date of theGodfrey Hotel Loan is the due date in October 2022. Provided that no event of default has occurred and is continuing under the Godfrey Hotel Loan documents, at any time after the second anniversary of the securitization Closing Date, the Godfrey Hotel Loan may be defeased with certain direct full faith and credit obligations of the United States of America or other obligations which are “government securities” permitted under the Godfrey Hotel Loan documents. Provided that no event of default has occurred and is continuing under the Godfrey Hotel Loan documents, voluntary prepayment of the Godfrey Hotel Loan without a prepayment premium or yield maintenance charge is permitted on or after the due date in July 2022.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
54
| LOAN #3: GODFREY HOTEL |
| ■ | The Mortgaged Property. TheGodfrey Hotel Property is a 16-story, 221-room, full service hotel located at the southeast corner of West Huron Street and North LaSalle Street in the River North submarket of Chicago, Illinois. The Godfrey Hotel Property was constructed in 2014 and features a fitness center, full service spa and two food and beverage facilities. Dolce Italian is a 144 seat restaurant located on the ground floor of the Godfrey Hotel Property. Dolce Italian has additional locations in Miami and Atlanta and is affiliated with LDV Hospitality, the group behind restaurants such as American Cut and Scarpetta. IO Rooftop Lounge is a 15,000 SF indoor and outdoor rooftop lounge featuring panoramic skyline views and a retractable roof.The guestroom unit mix is composed of 132 rooms with a king size bed, 41 rooms with two queen size beds, 11 rooms with a single queen size bed, 11 executive king bed rooms and 26 studio suites. There is a total of 1,867 SF of meeting and banquet space at the Godfrey Hotel Property. The Godfrey Hotel Property is one of two current Godfrey hotels in the United States, with the other current location being in Boston and an approximately 200 room Godfrey hotel is planned to open in Hollywood, California in 2018.Per the December 2016 travel research report, since year end 2014, the Godfrey Hotel Property has ranked first out of the seven properties in its competitive set for year-end trailing twelve month occupancy. |
The following table presents certain information relating to historical Occupancy, ADR and RevPAR at the Godfrey Hotel Property and its competitive set, as provided in a market report:
Historical Statistics(1)
Godfrey Hotel Property | Competitive Set | Penetration | ||||||||||||||||||||||
12/31/2014 | 12/31/2015 | 12/31/2016 | TTM 5/31/2017 | 12/31/2014 | 12/31/2015 | 12/31/2016 | TTM 5/31/2017 | 12/31/2014 | 12/31/2015 | 12/31/2016 | TTM 5/31/2017 | |||||||||||||
| Occupancy | 89.6% | 93.5% | 95.5% | 95.6% | 77.2% | 79.0% | 78.9% | 79.1% | 116.1% | 118.5% | 121.1% | 121.0% | ||||||||||||
| ADR | $170.46 | $165.55 | $163.09 | $162.10 | $206.55 | $212.65 | $206.78 | $205.83 | 82.5% | 77.8% | 78.9% | 78.8% | ||||||||||||
| RevPAR | $152.81 | $154.82 | $155.80 | $155.04 | $159.53 | $167.89 | $163.13 | $162.75 | 95.8% | 92.2% | 95.5% | 95.3% | ||||||||||||
| (1) | Source: Travel Research Report. |
The following table presents certain information relating to the 2016 demand analysis with respect to the Godfrey Hotel Property based on market segmentation, as provided in the appraisal for the Godfrey Hotel Property:
2016 Accommodated Room Night Demand(1)
Commercial | Meeting and Group | Leisure | ||
| 60.0% | 15.0% | 25.0% |
| (1) | Source: Appraisal. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
55
| LOAN #3: GODFREY HOTEL |
| ■ | Operating History and Underwritten Net Cash Flow. The following table presents certain information relating to the historical operating performance and the Underwritten Net Cash Flow, on an aggregate basis and per room, at the Godfrey Hotel Property: |
Cash Flow Analysis(1)
| 2014 | 2015 | 2016 | TTM 2/28/2017 | Underwritten | Underwritten $ per Room | |||||||||||||
| Room Revenue | $10,542,054 | $12,457,727 | $12,551,833 | $12,496,261 | $12,496,261 | 56,544.17 | ||||||||||||
| Food & Beverage Revenue | 8,844,247 | 10,430,253 | 10,396,030 | 10,401,103 | 10,247,280 | 46,367.78 | ||||||||||||
| Other Revenue(2) | 931,901 | 1,170,210 | 1,066,191 | 1,060,517 | 921,695 | 4,170.57 | ||||||||||||
| Total Revenue | $20,318,202 | $24,058,190 | $24,014,054 | $23,957,881 | $23,665,236 | $107,082.52 | ||||||||||||
| Room Expense | 2,942,313 | 3,434,976 | 3,616,227 | 3,628,518 | 3,433,551 | 15,536.43 | ||||||||||||
| Food & Beverage Expense | 4,489,898 | 6,310,083 | 6,694,565 | 6,722,452 | 6,631,762 | 30,007.97 | ||||||||||||
| Other Expense | 518,902 | 505,086 | 501,463 | 490,238 | 446,818 | 2,021.80 | ||||||||||||
| Total Departmental Expense | $7,951,113 | $10,250,145 | $10,812,255 | $10,841,208 | $10,512,130 | $47,566.20 | ||||||||||||
| Total Undistributed Expense | 3,908,378 | 4,385,660 | 4,393,500 | 4,402,302 | 4,361,836 | 19,736.82 | ||||||||||||
| Total Fixed Charges | 228,949 | 1,308,370 | 1,374,459 | 1,387,853 | 1,407,753 | 6,369.92 | ||||||||||||
| Total Operating Expenses | $4,137,327 | $5,694,030 | $5,767,959 | $5,790,155 | $5,769,589 | $26,106.74 | ||||||||||||
| Net Operating Income | $8,229,762 | $8,114,016 | $7,433,840 | $7,326,518 | $7,383,517 | $33,409.58 | ||||||||||||
| FF&E | 812,728 | 962,328 | 960,562 | 958,315 | 946,609 | 4,283.30 | ||||||||||||
| Net Cash Flow | $7,417,034 | $7,151,688 | $6,473,278 | $6,368,203 | $6,436,907 | $29,126.28 | ||||||||||||
| Occupancy | 89.6% | (3) | 93.5% | (3) | 95.5% | (3) | 95.0% | 78.5% | ||||||||||
| NOI Debt Yield | 17.3% | 17.1% | 15.7% | 15.4% | 15.5% | |||||||||||||
| NCF DSCR | 2.44x | 2.35x | 2.13x | 2.09x | 2.11x | |||||||||||||
| (1) | Certain items such as interest expense, interest income, depreciation, amortization, debt service payments and any other non-recurring or non-operating items were excluded from the historical presentation and are not considered for the underwritten cash flow. |
| (2) | Other Revenue consists of overnight parking fees for hotel guests and valet parking for restaurant, lounge and hotel guests as well as other miscellaneous sources of revenue. |
| (3) | Source: Industry travel research report. |
| ■ | Appraisal.According to the appraisal, the Godfrey Hotel Property had an “as-is” appraised value of $101,400,000 as of March 28, 2017: |
Appraisal Approach(1) | Value | Discount Rate | Capitalization Rate | |||
| Income Capitalization Approach | $101,400,000 | 8.95% | 7.30% |
| (1) | Source: Appraisal. |
| ■ | Environmental Matters. According to the Phase I environmental report, dated April 6, 2017, there were no recognized environmental conditions or recommendations for further action at the Godfrey Hotel Property. |
| ■ | Market Overview and Competition. The Godfrey Hotel Property is located in Chicago, Illinois within the River North submarket. High-rise office buildings, upscale residential developments and hotels fill the densely developed River North neighborhood with street level space predominantly used for retail and restaurants. According to the appraisal, the 2017 estimated population within a one-, three- and five-mile radius of the Godfrey Hotel Property was 100,534, 362,001 and 803,542, respectively. According to the appraisal, 2017 estimated average household income within a one-, three- and five-mile radius of the Godfrey Hotel Property was $134,747, $123,455 and $103,426, respectively. Demand generators located within a 3-mile radius of the Godfrey Hotel Property include The Magnificent Mile, Navy Pier, The Shedd Aquarium, Millennium Park and Grant Park. As of the fourth quarter of 2016, the River North submarket had the second lowest vacancy rate in the Chicago office market. The River North submarket had a 7.3% vacancy rate compared to the 17.8% vacancy rate for the entire Chicago office market as of the fourth quarter of 2016. McCormick Place, the nation’s largest convention center, with a total of 2.6 million SF of exhibition space is located within 4 miles of the Godfrey Hotel Property. During 2015, McCormick Place hosted 63 conventions and generated 1,171,339 room nights for the Chicago hotel market. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
56
| LOAN #3: GODFREY HOTEL |
The appraiser identified five properties which are considered primary competitors to the Godfrey Hotel Property. The following table presents certain information related to the competitive properties identified in the appraisal for the Godfrey Hotel Property:
Godfrey Hotel Property Competitive Set(1)
Property | Year Opened | Number | Distance (in miles) | Commercial Demand | Meeting & Group Demand | Leisure | Appraiser’s Estimated 2016 Occupancy | Appraiser’s Estimated 2016 ADR | Appraiser’s Estimated 2016 RevPAR | |||||||||
| Godfrey Hotel Property | 2014 | 221 | — | 60% | 15% | 25% | 95.5% | $163.01 | $155.60 | |||||||||
| Kinzie Hotel | 2003 | 221 | 0.4 | 45% | 20% | 35% | 85.0% –90.0% | $180.00 – $190.00 | $150.00 – $160.00 | |||||||||
| Dana Hotel | 2008 | 216 | 0.2 | 50% | 30% | 20% | 70.0% –75.0% | $190.00 – $200.00 | $140.00 – $150.00 | |||||||||
| James Hotel Chicago | 1985 | 294 | 0.3 | 45% | 20% | 35% | 80.0% –85.0% | $200.00 – $210.00 | $160.00 – $170.00 | |||||||||
| Acme Chicago | 1980 | 130 | 0.3 | 50% | 20% | 30% | 70.0% –75.0% | $190.00 – $200.00 | $140.00 – $150.00 | |||||||||
Hotel Felix | 2009 | 225 | 0.0 | 60% | 10% | 30% | 85.0% –90.0% | $140.00 – $150.00 | $125.00 – $130.00 | |||||||||
| Total / Wtd. Avg. | 1,086 | 52% | 19% | 30% | 84.2% | $179.60 | $151.14 |
| (1) | Source: Appraisal. |
| (2) | Total Number of Rooms excludes rooms at the Godfrey Hotel Property. |
| ■ | The Borrower. The borrower is Oxford 127 Huron Hotel Venture Property Company, LLC, a single-purpose, single-asset Delaware limited liability company. Legal counsel to the borrower delivered two non-consolidation opinions in connection with the origination of the Godfrey Hotel Loan, one with respect to the domestic entities in the borrower’s organizational structure and one with respect to the foreign entities in the borrower’s organizational structure. The borrower sponsor and non-recourse carveout guarantor is John W. Rutledge. John W. Rutledge is the founder, president and CEO of Oxford Capital Group, LLC. Oxford Capital Group, LLC is a national real estate investment, development, management and branding firm that focuses on large-scale acquisitions, developments, and redevelopments. The Godfrey Hotel Property’s manager, Oxford Hotels and Resorts, LLC, is Oxford Capital Group LLC’s wholly-owned hotel-operating affiliate. Oxford Capital Group, LLC, its affiliates and principals have been involved in approximately $2.5 billion of real estate and private equity investments, including approximately 13,000 hotel rooms and more than 2,000 senior housing units. |
| ■ | Escrows.On the origination date, the borrower funded reserves of (i) $225,249 for real estate tax expenses, (ii) $73,879 for insurance premiums, (iii) $2,500,000 for funds with respect to the investments of five EB-5 investors whose visa petitions have not yet been approved by all applicable government authorities and (iv) $740,000 for a seasonality reserve with respect to the Godfrey Hotel Property. With respect to the $2,500,000 EB-5 loan reserve, if any such outstanding petition is denied, the applicable investor is entitled to receive back its $500,000 investment, which will be paid from the EB-5 loan reserve. |
On each monthly payment date, the borrower is required to fund (i) a tax reserve in an amount equal to one-twelfth of the amount the lender estimates will be necessary to pay taxes over the then succeeding 12-month period, initially estimated to be $112,624, (ii) an insurance reserve in an amount equal to one-twelfth of the amount the lender estimates will be necessary to pay insurance premiums for the renewal of the coverage for over the then succeeding 12-month period, initially estimated to be $10,554, provided that the monthly insurance reserve deposit is waived if the borrower is maintaining blanket or umbrella insurance policies in accordance with the Godfrey Hotel Loan documents, (iii) the Godfrey FF&E Reserve (as defined below), initially estimated to be $78,884 and (iv) beginning in 2018, on each due date in April through and including the due date in November each year for the remainder of the term of the Godfrey Hotel Loan, all excess cash flow up to the Seasonality Reserve Cap (as defined below).
The “Godfrey FF&E Reserve” means, with respect to the monthly payment date, an amount equal to the greater of (a) any amount required by any licensor under any license agreement with respect to FF&E, and (b) an amount equal to 4% of the greater of (x) the monthly gross revenues for the hotel related operations at the Godfrey Hotel Property for the corresponding month in the immediately preceding calendar year as reasonably determined by the lender and (y) the projected monthly gross revenues for the hotel related operations at the Godfrey Hotel Property for the applicable month in which the due date occurs in the current calendar year as set forth in the approved annual budget; provided that, if, as of any applicable date of determination, no approved annual budget exists for the applicable calendar year, the amount payable under clause (b) is determined by the lender in its reasonable discretion.
The “Seasonality Reserve Cap” means, for each calendar year, an amount equal to 110% of the greater of (A) the sum of the Negative Monthly Amounts (as defined below) for the preceding calendar year, based on the monthly
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| LOAN #3: GODFREY HOTEL |
operating statements of the Godfrey Hotel Property for the twelve month period to date of determination and (B) the sum of the Negative Monthly Amounts for such calendar year, as determined by the approved annual budget for such year.
A “Negative Monthly Amount” means with respect to any monthly payment date, the amount that (a) operating expenses, debt service, deposits to the tax account, insurance account and the FF&E reserve account required on such monthly payment date pursuant to the terms of the Godfrey Hotel Loan agreement, exceeds (b) operating income and other gross revenues for the Godfrey Hotel Property for the calendar months relating to such monthly payment date, in each case as shown in the approved annual budget; provided, that, until an approved annual budget is approved in accordance with the terms of the Godfrey Hotel Loan agreement, “Negative Monthly Amounts” will be determined by the lender in its reasonable discretion.
| ■ | Lockbox and Cash Management. The Godfrey Hotel Loan is structured with a hard lockbox in place at origination and springing cash management. The borrower is required to deliver notices to all credit card companies (and tenants, if any) directing them to deposit all sums payable to the borrower into the lender-controlled lockbox account. The property manager is required to deposit all funds payable to the borrower into the lender-controlled lockbox account. All sums on deposit in the lockbox account are required to be swept on each business day to the borrower or at the borrower’s direction, unless a Godfrey Hotel Trigger Period (as defined below) is continuing, in which case all funds in the lender-controlled lockbox will be swept on each business day into the cash management account for the payment of, among other things, debt service and property operating expenses, for the funding of monthly escrows, with any excess cash flow (i) to the extent a Godfrey Hotel Trigger Period does not exist, to be (A) deposited into the PIP reserve account in an amount sufficient such that amounts on deposit in the PIP reserve account equal 125% of the cost of the PIP work (if any) as estimated by the lender (which such cost shall be exclusive of duplicative FF&E) and (B) to the extent there are any excess funds remaining after such deposit described in (A) above, returned to the borrower and (ii) to the extent a Godfrey Hotel Trigger Period is continuing, to be held as additional collateral by the lender. After an event of default under the Godfrey Hotel Loan documents, the lender may apply funds in such priority as it may determine. |
A “Godfrey Hotel Trigger Period” means a period (a) commencing upon the occurrence of an event of default under the Godfrey Hotel Loan documents and continuing until the cure or the lender’s waiver of such event of default, if applicable, (b) commencing upon the occurrence of the debt service coverage ratio being less than 1.30x, and continuing until the debt service coverage ratio is equal to or greater than 1.35x for two consecutive calendar quarters, (c) commencing upon the occurrence of a Godfrey Hotel License Agreement Trigger Event (as defined below) and continuing until the occurrence of a Godfrey Hotel License Agreement Cure Event (as defined below) or (d) commencing upon the failure of a Godfrey Hotel License Renewal Event (as defined below) to occur on or before the date which is one year prior to the expiration of the then-applicable term of the license agreement and continuing until the occurrence of a License Renewal Event.
A“Godfrey Hotel License Agreement Trigger Event” means (i) the borrower being in default under any license agreement beyond any applicable notice and cure periods, (ii) the borrower or any licensor on giving notice that it is terminating the license agreement (except in the event such license agreement has been replaced in accordance with the terms of the Godfrey Hotel Loan documents), (iii) any termination or cancellation of any license agreement (including, without limitation, rejection in any bankruptcy or similar insolvency proceeding of any licensor) and/or any license agreement expiring or otherwise failing to otherwise be in full force and effect, (iv) any bankruptcy or similar insolvency of any licensor, (v) the Godfrey Hotel Property failing to be operated, “flagged” and/or branded pursuant to any license agreement (except in the event such license agreement has been replaced in accordance with the terms of the Godfrey Hotel Loan documents) and (vi) any permit applicable to any license agreement ceasing to be in full force in effect, unless replaced with a permit of substantially the same efficacy.
A“Godfrey Hotel License Agreement Cure Event” means the lender’s receipt of evidence reasonably acceptable to the lender of (1) (a) the satisfaction of certain license agreement cure conditions or (b) the branding, “flagging” and operation of the Godfrey Hotel Property pursuant to a replacement qualified franchise agreement entered into in accordance with the terms of the Godfrey Hotel Loan documents (which qualified franchise agreement is in full force and effect with no defaults thereunder) and delivery to the lender of a comfort letter in form and substance reasonably acceptable to the lender and (2) to the extent a PIP is required in connection with the foregoing, (A) the deposit of the corresponding PIP deposit into a PIP reserve account in accordance with the Godfrey Hotel Loan documents or (B) the sum of the PIP excess cash amount and amounts on deposit in the PIP reserve account is equal to or greater
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| LOAN #3: GODFREY HOTEL |
than 125% of the costs of the related PIP work as estimated by the lender (but without giving effect to any duplicative FF&E).
A “License Renewal Event” means, an event which shall occur upon the lender’s receipt of evidence reasonably acceptable to the lender (which such evidence includes, without limitation, delivery of a duly executed estoppel certificate from the applicable licensor) that (i) the related license agreement has been extended or a replacement (or new, as applicable) license agreement has been entered into, in each case, for a term reasonably acceptable to the lender and otherwise in accordance with the applicable terms and conditions of the Godfrey Hotel Loan documents, (ii) such license agreement (as so extended) or such replacement license agreement (or new, as applicable), as applicable, is in full force and effect with no defaults thereunder, (iii) to the extent a PIP is required in connection with the foregoing, (a) the deposit of the corresponding PIP deposit into the PIP reserve account in accordance with the Godfrey Hotel Loan documents or (b) the sum of the PIP excess cash amount and amounts on deposit in the PIP reserve account is equal to or greater than 125% of the costs of the related PIP work as reasonably estimated by the lender (but without giving effect to any duplicative FF&E) and (iv) a comfort letter has been delivered in form and substance reasonably acceptable to the lender from the applicable licensor. For the purposes of the foregoing, the applicable license agreement will not fail to be deemed “entered into” and “in full force and effect” to the extent the same has been duly executed and delivered but provides that it is only effective after the expiration of the then-current license agreement.
| ■ | Property Management. The Godfrey Hotel Property is currently managed by Oxford Hotels And Resorts, LLC, an affiliate of the borrower. The lender has the right to direct the borrower to terminate the property management agreement and replace the property manager if at any time: (i) the property manager becomes insolvent or a debtor in (y) any involuntary bankruptcy or insolvency proceeding that is not dismissed within ninety days of the filing thereof, or (z) any voluntary bankruptcy or insolvency proceeding; (ii) an event of default exists under the Godfrey Hotel Loan documents; or (iii) there exists a default by property manager beyond all applicable notice and cure periods under the property management agreement. The borrower is not permitted to replace the property manager unless, among other conditions, (i) the borrower has received the lender’s prior written consent, not to be unreasonably withheld, conditioned or delayed; (ii) no event of default has occurred and is continuing under the Godfrey Hotel Loan documents unless the lender has expressly consented; (iii) the lender receives at least thirty days prior written notice of the same; (iv) after giving effect to the same (a) the new manager is engaged pursuant to a qualified management agreement pursuant to the Godfrey Hotel Loan documents or (b) the property will be “flagged”, operated and branded pursuant to a qualified franchise agreement, in each case acceptable to the lender and is otherwise in accordance with the applicable terms and conditions of the Godfrey Hotel Loan documents, (v) to the extent a PIP is required in connection with the management/license agreement or qualified franchise agreement, as applicable, the corresponding PIP has been approved and PIP deposit has been deposited in the PIP reserve account in accordance with the Godfrey Hotel Loan documents; (vi) (a) in the case of a management/license agreement, the new manager and the new borrower execute an assignment of management agreement; and (b) in the case of a qualified franchise agreement, (1) a comfort letter has been delivered in form and substance reasonably acceptable to the lender from the applicable franchisor and (2) all other conditions to engagement of a new franchisor under the Godfrey Hotel Loan documents have been satisfied; (vii) all the other conditions relating to a termination of the management agreement and replacement of the manager set forth in the assignment of management agreement are satisfied and (viii) at the lender’s option, the lender receives a rating agency confirmation. The “Godfrey” name and related trademarks are owned by Oxford Capital Group, LLC (“OCG”), the sole member of the current property manager. In connection with the origination of the Godfrey Hotel Loan, OCG and property manager entered into a Trademark License Agreement evidencing the license granted by OCG to the property manager to use the “Godfrey” name and related trademarks. OCG is a party to the assignment of management agreement for the Godfrey Hotel Loan with respect to (i) estoppel certifications relating to the Trademark License Agreement and (i) transitional services related to the lender’s right to use the “Godfrey” name and related trademarks after the termination of the Hotel Management Agreement pursuant to the related assignment of management agreement. |
| ■ | Mezzanine or Subordinate Indebtedness. The Godfrey Hotel Property is encumbered by a mortgage (“EB-5 Mortgage”) securing an EB-5 program (Immigrant Investor Program) loan (“EB-5 Loan”) in the maximum principal amount of $25,000,000 from an affiliate of the borrower (“EB-5 Lender”), as lender, and the borrower, as borrower. The EB-5 Mortgage is subordinate to the mortgage securing the Godfrey Hotel Loan and a subordination and standstill agreement was executed by EB-5 Lender and the borrower in connection with the closing of the Godfrey Hotel Loan which, among other things, prohibits the EB-5 Lender from declaring a default under the EB-5 Mortgage, accelerating the indebtedness secured by the EB-5 Mortgage, commencing any action to foreclose the EB-5 Mortgage or taking any other enforcement action as a result of a default under the EB-5 Loan. Pursuant to the subordination and standstill agreement, the EB-5 Loan is only payable from excess cash flow and is non-accruing. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| LOAN #3: GODFREY HOTEL |
The current outstanding balance of the EB-5 Loan is $24,875,000, which amount will be increased by $25,000 as each of the five EB-5 investors with outstanding EB-5 petitions is approved, or which amount will be decreased by $475,000 in connection with the return of funds to the investor (see “Escrows” above”) as any of the five EB-5 investors with outstanding EB-5 petitions is denied, and the Bridge Loan (described below) will be decreased by $25,000 as the outstanding EB-5 petitions are adjudicated (whether such petitions are approved or denied).
A prior mortgage loan with an original principal balance up to $36,000,000 by the borrower in favor of an affiliate of the borrower (“Quadrum”) (“the Bridge Loan”), with an outstanding balance as of the origination date of the Godfrey Hotel Loan of $11,163,656, was secured by the Godfrey Hotel Property and partially paid off with the Godfrey Hotel Loan proceeds, with a remaining balance of $125,000. The mortgage securing the Bridge Loan was released at the origination of the Godfrey Hotel Loan. A subordination and standstill agreement was executed by Quadrum in connection with the closing of the Godfrey Hotel Loan which, among other things, prohibits Quadrum from declaring a default under the Bridge Loan, accelerating the indebtedness of the Bridge Loan and requires that the Bridge Loan only be payable from excess cash flow and is non-accruing. The Bridge Loan will be decreased by $25,000 as each of the five remaining EB-5 investors with outstanding EB-5 petitions are adjudicated and the EB-5 Loan will be increased by such $25,000 amount in connection with each adjudicated EB-5 petition (as described above).
| ■ | Release of Collateral. Not permitted. |
| ■ | Terrorism Insurance.The borrower is required to maintain an “all-risk” insurance policy that provides coverage for terrorism in an amount equal to the full replacement cost of the Godfrey Hotel Property (plus 18 months of rental loss and/or business interruption coverage and an additional period of indemnity covering the 360 days following restoration). The “all-risk” policy containing terrorism insurance is required to contain a deductible no larger than $10,000. See “Risk Factors—Terrorism Insurance May Not Be Available for All Mortgaged Properties” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| LOAN #4: PLEASANT PRAIRIE PREMIUM OUTLETS |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| LOAN #4: PLEASANT PRAIRIE PREMIUM OUTLETS |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| LOAN #4: PLEASANT PRAIRIE PREMIUM OUTLETS |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| LOAN #4: PLEASANT PRAIRIE PREMIUM OUTLETS |
| Mortgaged Property Information | Mortgage Loan Information | |||||
| Number of Mortgaged Properties | 1 | Loan Seller | CREFI | |||
| Location (City/State) | Pleasant Prairie, Wisconsin | Cut-off Date Balance(3) | $41,000,000 | |||
| Property Type | Retail | Cut-off Date Balance per SF(2) | $360.15 | |||
| Size (SF) | 402,615 | Percentage of Initial Pool Balance | 4.2% | |||
| Total Occupancy as of 7/26/2017 | 93.0% | Number of Related Mortgage Loans | None | |||
| Owned Occupancy as of 7/26/2017 | 93.0% | Type of Security | Fee Simple | |||
| Year Built / Latest Renovation(1) | Various / NAP | Mortgage Rate | 3.99500% | |||
| Appraised Value | $290,000,000 | Original Term to Maturity (Months) | 120 | |||
| Appraisal Date | 7/20/2017 | Original Amortization Term (Months) | NAP | |||
| Borrower Sponsors | Simon Property Group, L.P. | Original Interest Only Period (Months) | 120 | |||
| Property Management | Simon Management Associates, LLC | First Payment Date | 10/1/2017 | |||
| Maturity Date | 9/1/2027 | |||||
| Underwritten Revenues | $22,589,594 | |||||
| Underwritten Expenses | $6,316,284 | Escrows | ||||
| Underwritten Net Operating Income (NOI) | $16,273,310 | Upfront | Monthly | |||
| Underwritten Net Cash Flow (NCF) | $15,604,536 | Taxes | $0 | $0 | ||
| Cut-off Date LTV Ratio(2) | 50.0% | Insurance | $0 | $0 | ||
| Maturity Date LTV Ratio(2) | 50.0% | Replacement Reserve | $0 | $0 | ||
| DSCR Based on Underwritten NOI / NCF(2) | 2.77x / 2.66x | TI/LC | $0 | $0 | ||
| Debt Yield Based on Underwritten NOI / NCF(2) | 11.2% / 10.8% | Other(4) | $0 | $0 | ||
| Sources and Uses | ||||||
| Sources | $ | % | Uses | $ | % | |
| Loan Combination Amount | $145,000,000 | 100.0% | Principal Equity Distribution(5) | $144,317,359 | 99.5% | |
| Closing Costs | 682,641 | 0.5 | ||||
| Total Sources | $145,000,000 | 100.0% | Total Uses | $145,000,000 | 100.0% | |
| (1) | The Pleasant Prairie Premium Outlets Property was built in phases, beginning in 1987 with other portions being completed in 1989 and 2006. |
| (2) | Calculated based on the aggregate outstanding principal balance of the Pleasant Prairie Premium Outlets Loan Combination (as defined below). |
| (3) | The Pleasant Prairie Premium Outlets Loan has an outstanding principal balance as of the Cut-off Date of $41,000,000 and represents the non-controlling note A-2 of the $145,000,000 Pleasant Prairie Premium Outlets Loan Combination, which is evidenced by fourpari passu notes and was co-originated by Citi Real Estate Funding Inc. and Wells Fargo Bank, National Association (“WFB”). The related companion loans are evidenced by (i) the controlling note A-1 ($34,000,000), which was contributed to the CGCMT 2017-P8 securitization transaction, (ii) the non-controlling note A-4 ($25,000,000), which is currently held by WFB and is expected to be contributed to the WFCM 2017-C40 securitization transaction, and (iii) the non-controlling note A-3 ($45,000,000), which is currently held by WFB and is expected to be contributed to one or more future commercial mortgage securitization transactions. |
| (4) | The borrower sponsor delivered a guaranty in lieu of depositing a cash reserve for $416,575 of outstanding tenant allowances. |
| (5) | The purpose of the Pleasant Prairie Premium Outlets Loan Combination was to return equity to the borrower, encumber the Pleasant Prairie Premium Outlets Property which was not subject to any prior debt, and cover closing costs. |
| ■ | The Mortgage Loan. The mortgage loan (the “Pleasant Prairie Premium Outlets Loan”) is part of a loan combination (the “Pleasant Prairie Premium Outlets Loan Combination”) evidenced by fourpari passu notes that are collectively secured by a first mortgage encumbering the borrower’s fee interest in a retail outlet center located in Pleasant Prairie, Wisconsin (the “Pleasant Prairie Premium Outlets Property”). The Pleasant Prairie Premium Outlets Loan, which is evidenced by the non-controlling note A-2, had an original principal balance of $41,000,000, has an outstanding principal balance as of the Cut-off Date of $41,000,000 and represents approximately 4.2% of the Initial Pool Balance. The related companion loans had an aggregate original principal balance of $104,000,000, have an aggregate outstanding principal balance as of the Cut-off Date of $104,000,000 and are evidenced by (i) the controlling note A-1, which has an outstanding principal balance as of the Cut-off Date of $34,000,000 and was contributed to the CGCMT 2017-P8 securitization transaction, (ii) the non-controlling note A-4, which has an outstanding principal balance as of the Cut-off Date of $25,000,000, is currently held by Wells Fargo Bank, National Association (“WFB”) and is expected to be contributed to the WFCM 2017-C40 securitization transaction and (iii) the non-controlling note A-3, which has an outstanding principal balance as of the Cut-off Date of $45,000,000, is currently held by WFB and is expected to be contributed to one or more future commercial mortgage securitization transactions. Each note evidencing the Pleasant Prairie Premium Outlets Loan Combination accrues interest at an interest rate of 3.99500%per annum. The proceeds of the Pleasant Prairie Premium Outlets Loan Combination were primarily used to encumber the Pleasant Prairie Premium Outlets Property and pay closing costs. The Pleasant Prairie Premium Outlets Loan Combination was originated on August 16, 2017. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| LOAN #4: PLEASANT PRAIRIE PREMIUM OUTLETS |
Note Summary
| Note | Current or Anticipated Holder of Securitized Note | Aggregate Cut-off Date Balance |
Pleasant Prairie Premium Outlets Loan
| ||
| A-2 | CGCMT 2017-C4 | $41,000,000 |
Pleasant Prairie Premium Outlets Pari Passu Companion Loans
| ||
| A-1 | CGCMT 2017-P8 | $34,000,000 |
| A-3 | WFB(1) | $45,000,000 |
| A-4 | WFCM 2017-C40(2) | $25,000,000 |
| (1) | Expected to be contributed to one or more future securitization transactions. |
| (2) | Expected to be contributed to the related securitization transaction upon closing of such securitization transaction. |
The Pleasant Prairie Premium Outlets Loan Combination has an initial term of 120 months and has a remaining term of 119 months as of the Cut-off Date. The Pleasant Prairie Premium Outlets Loan Combination requires interest only payments for the full term of the Pleasant Prairie Premium Outlets Loan Combination. The scheduled maturity date of the Pleasant Prairie Premium Outlets Loan Combination is the due date in September 2027. Provided that no event of default has occurred and is continuing under the Pleasant Prairie Premium Outlets Loan Combination documents, at any time after the earlier of October 1, 2020 and the second anniversary of the securitization of the last portion of the Pleasant Prairie Premium Outlets Loan Combination, the Pleasant Prairie Premium Outlets Loan Combination may be defeased with certain direct full faith and credit obligations of the United States of America or other obligations which are “government securities” permitted under the Pleasant Prairie Premium Outlets Loan Combination documents. Voluntary prepayment of the Pleasant Prairie Premium Outlets Loan Combination is permitted (in whole, but not in part) without penalty after the due date in February 2027.
| ■ | The Mortgaged Property. The Pleasant Prairie Premium Outlets Property is a 402,615 SF outlet center located in Pleasant Prairie, Wisconsin, approximately 12.3 miles north of Chicago’s northern suburbs and 38.6 miles south of Milwaukee. The Pleasant Prairie Premium Outlets Property was built in three phases in 1987, 1989 and 2006. The five largest tenants by SF are Nike Factory Store, Old Navy, Under Armour, GAP Outlet, Adidas/Rockport; and additional tenants include Brooks Brothers, Hugo Boss, Kate Spade, Lacoste, Michael Kors, Polo Ralph Lauren and Tumi. The Pleasant Prairie Premium Outlets Property is positioned along the east side of Interstate-94 (which runs south from Wisconsin to Indiana and through downtown Chicago) and benefits from the local sales tax rate of 5.50% compared to Chicago’s sales tax rate of 10.25%. For the trailing 12-month period ending June 30, 2017, the Pleasant Prairie Premium Outlets Property reported overall sales of $509 per SF, which equates to an 11.7% underwritten occupancy cost. The Pleasant Prairie Premium Outlets Property has 2,134 surface parking spaces, resulting in a parking ratio of 5.3 spaces per 1,000 SF. As of July 26, 2017, the Pleasant Prairie Premium Outlets Property was 93.0% occupied by 85 tenants. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| LOAN #4: PLEASANT PRAIRIE PREMIUM OUTLETS |
The following table presents certain information relating to the major tenants (of which certain tenants may have co-tenancy provisions) at the Pleasant Prairie Premium Outlets Property:
Ten Largest Owned Tenants Based on Underwritten Base Rent(1)
Tenant Name | Credit Rating (Fitch/MIS/S&P)(2) | Tenant | % of | UW Base Rent(3) | % of Total UW Base Rent | UW Base Rent $ per SF(3) | Lease Expiration | Tenant Sales $ per SF(4) | Occupancy Cost(5) | |||||||||
| The North Face | NR/A3/A | 6,500 | 1.6% | $675,481 | 4.6% | $103.92 | 9/30/2026 | $1,604.15 | 8.6% | |||||||||
| Nike Factory Store | NR/A1/AA- | 20,200 | 5.0 | 582,495 | 4.0 | 28.84 | 1/31/2028 | $892.73 | 5.5% | |||||||||
| GAP Outlet | BB+/Baa2/BB+ | 11,000 | 2.7 | 575,460 | 3.9 | 52.31 | 1/31/2022 | $450.69 | 11.7% | |||||||||
| Under Armour | NR/Baa2/BB+ | 11,250 | 2.8 | 565,051 | 3.9 | 50.23 | 9/30/2025 | $751.29 | 9.9% | |||||||||
| Banana Republic Factory | BB+/Baa2/BB+ | 7,800 | 1.9 | 445,517 | 3.0 | 57.12 | 3/31/2021 | $466.14 | 16.5% | |||||||||
| Old Navy | BB+/Baa2/BB+ | 16,115 | 4.0 | 425,436 | 2.9 | 26.40 | 1/31/2022 | $487.43 | 9.4% | |||||||||
| Michael Kors | NR/NR/NR | 5,500 | 1.4 | 420,116 | 2.9 | 76.38 | 9/30/2025 | $1,298.96 | 8.0% | |||||||||
| Adidas/Rockport | NR/NR/NR | 10,000 | 2.5 | 319,300 | 2.2 | 31.93 | 1/31/2027 | $654.45 | 8.5% | |||||||||
| Columbia Sportswear Company | NR/NR/NR | 7,500 | 1.9 | 313,125 | 2.1 | 41.75 | 1/31/2019 | $706.29 | 8.8% | |||||||||
| Dress Barn | NR/NR/NR | 8,000 | 2.0 | 303,280 | 2.1 | 37.91 | 6/30/2021 | $159.72 | 29.4% | |||||||||
| Ten Largest Owned Tenants | 103,865 | 25.8% | $4,625,261 | 31.5% | $44.53 | |||||||||||||
| Other | 270,651 | 67.2 | 10,048,260 | 68.5 | 37.13 | |||||||||||||
| Vacant | 28,099 | 7.0 | 0 | 0.0 | 0.00 | |||||||||||||
| Total / Wtd. Avg. All Owned Tenants | 402,615 | 100.0% | $14,673,520 | 100.0% | $39.18 | |||||||||||||
| (1) | Based on the underwritten rent roll dated July 26, 2017. |
| (2) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
| (3) | UW Base Rent and UW Base Rent $ per SF includes $589,092, which represents the present value of rent steps for credit tenants and $217,393 for contractual rent steps through September 2018 for other tenants. |
| (4) | Based on sales for the trailing 12-month period ending June 30, 2017 and each respective tenant’s SF as of the rent roll dated July 26, 2017. Some tenants may have expanded, contracted or relocated their space within the trailing-12 month period in which sales were reported. |
| (5) | Individual occupancy costs represent the underwritten in-place occupancy costs at the Pleasant Prairie Premium Outlets Property. |
The following table presents certain information relating to the lease rollover schedule at the Pleasant Prairie Premium Outlets Property, based on initial lease expiration dates:
Lease Expiration Schedule(1)(2)
Year Ending | Expiring | % of Owned GLA | Cumulative % of Owned GLA | UW Base Rent(3) | % of Total UW Base Rent(3) | UW Base Rent $ | # of Expiring | |||||||
| MTM(5) | 13,926 | 3.5% | 3.5% | $548,214 | 3.7% | $39.37 | 6 | |||||||
| 2017 | 10,176 | 2.5 | 6.0% | 264,091 | 1.8 | 25.95 | 2 | |||||||
| 2018 | 31,472 | 7.8 | 13.8% | 1,063,371 | 7.2 | 33.79 | 6 | |||||||
| 2019 | 40,200 | 10.0 | 23.8% | 1,463,976 | 10.0 | 36.42 | 12 | |||||||
| 2020 | 16,385 | 4.1 | 27.9% | 539,781 | 3.7 | 32.94 | 5 | |||||||
| 2021 | 82,892 | 20.6 | 48.4% | 3,270,185 | 22.3 | 39.45 | 20 | |||||||
| 2022 | 54,211 | 13.5 | 61.9% | 1,938,839 | 13.2 | 35.76 | 8 | |||||||
| 2023 | 29,081 | 7.2 | 69.1% | 1,168,923 | 8.0 | 40.20 | 6 | |||||||
| 2024 | 0 | 0.0 | 69.1% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2025 | 16,750 | 4.2 | 73.3% | 985,167 | 6.7 | 58.82 | 2 | |||||||
| 2026 | 26,693 | 6.6 | 79.9% | 1,624,204 | 11.1 | 60.85 | 7 | |||||||
| 2027 | 32,530 | 8.1 | 88.0% | 1,224,274 | 8.3 | 37.64 | 10 | |||||||
| 2028 & Thereafter | 20,200 | 5.0 | 93.0% | 582,495 | 4.0 | 28.84 | 1 | |||||||
| Vacant | 28,099 | 7.0 | 100.0% | 0 | 0.0 | 0.00 | 0 | |||||||
| Total / Wtd. Avg.(4) | 402,615 | 100.0% | $14,673,520 | 100.0% | $39.18 | 85 | ||||||||
| (1) | Calculated based on the approximate square footage occupied by each Owned Tenant. |
| (2) | Certain tenants may have lease termination options that are exercisable prior to the originally stated expiration date of the subject lease and that are not considered in the Lease Expiration Schedule. |
| (3) | UW Base Rent and UW Base Rent $ per SF includes $589,092, which represents the present value of rent steps for credit tenants and $217,393 for contractual rent steps through September 2018 for other tenants. |
| (4) | Wtd. Avg. UW Base Rent $ per SF excludes vacant space. |
| (5) | MTM tenants include Bath & Body Works Outlet, Sunglass Hut, Fossil, Le Creuset Outlet, Perfumania and Coach. Each tenant is in occupancy, paying rent and currently has a lease out for signature or is negotiating a lease with the borrower sponsor. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| LOAN #4: PLEASANT PRAIRIE PREMIUM OUTLETS |
The following table presents certain information relating to historical leasing at the Pleasant Prairie Premium Outlets Property:
Historical Leased %(1)
2014 | 2015 | 2016 | As of 7/26/2017(2) | |||||
| Owned Space | 97.0% | 95.8% | 94.0% | 93.0% |
| (1) | As provided by the borrower and which represents occupancy as of December 31 for the indicated year unless otherwise specified. |
| (2) | Based on the underwritten rent roll dated July 26, 2017. |
| ■ | Operating History and Underwritten Net Cash Flow. The following table presents certain information relating to the historical operating performance and the Underwritten Net Cash Flow at the Pleasant Prairie Premium Outlets Property: |
Cash Flow Analysis(1)
2014 | 2015 | 2016 | TTM 6/30/2017 | Underwritten | Underwritten | |||||||
| Base Rent | $12,212,614 | $12,488,959 | $13,535,045 | $13,825,230 | $13,867,036 | $34.44 | ||||||
| Contractual Rent Steps(2) | 0 | 0 | 0 | 0 | 806,485 | 2.00 | ||||||
| Gross Up Vacancy | 0 | 0 | 0 | 0 | 669,946 | 1.66 | ||||||
| Reimbursements | 6,543,670 | 6,659,008 | 6,720,028 | 6,837,527 | 7,320,293 | 18.18 | ||||||
| Percentage Rent | 1,222,636 | 1,378,887 | 645,234 | 685,673 | 533,877 | 1.33 | ||||||
| Other Income(3) | 301,921 | 296,661 | 335,867 | 446,774 | 433,881 | 1.08 | ||||||
| Vacancy & Credit Loss | (3,279) | 12,646 | (88,773) | (126,881) | (1,041,923) | (2.59) | ||||||
| Effective Gross Income | $20,277,562 | $20,836,161 | $21,147,401 | $21,668,323 | $22,589,594 | $56.11 | ||||||
| Real Estate Taxes | $2,795,521 | $2,893,594 | $2,656,064 | $2,585,913 | $2,792,689 | $6.94 | ||||||
| Insurance | 120,102 | 124,521 | 126,761 | 126,083 | 125,987 | 0.31 | ||||||
| Management Fee | 530,013 | 529,240 | 542,975 | 566,528 | 677,688 | 1.68 | ||||||
| Other Operating Expenses | 2,911,308 | 2,699,704 | 2,664,213 | 2,563,232 | 2,719,920 | 6.76 | ||||||
| Total Operating Expenses | $6,356,944 | $6,247,059 | $5,990,013 | $5,841,756 | $6,316,284 | $15.69 | ||||||
| Net Operating Income | $13,920,618 | $14,589,102 | $15,157,388 | $15,826,567 | $16,273,310 | $40.42 | ||||||
| TI/LC | 0 | 0 | 0 | 0 | 588,251 | 1.46 | ||||||
| Capital Expenditures | 0 | 0 | 0 | 0 | 80,523 | 0.20 | ||||||
| Net Cash Flow | $13,920,618 | $14,589,102 | $15,157,388 | $15,826,567 | $15,604,536 | $38.76 | ||||||
| Occupancy | 97.0% | 95.8% | 94.0% | 93.0%(4) | 95.5%(5) | |||||||
| NOI Debt Yield(6) | 9.6% | 10.1% | 10.5% | 10.9% | 11.2% | |||||||
| NCF DSCR(6) | 2.37x | 2.48x | 2.58x | 2.69x | 2.66x |
| (1) | Certain items such as straight line rent, interest expense, interest income, lease cancellation income, depreciation, amortization, debt service payments and any other non-recurring or non-operating items were excluded from the historical presentation and are not considered for the underwritten cash flow. |
| (2) | Contractual Rent Steps of $806,485 includes $589,092, which represents the present value of rent steps for credit tenants and $217,393 for contractual rent steps through September 2018 for other tenants. |
| (3) | Other Income includes temporary tenant income, ATM minimum rents, beverage case rent, storage space income, beverage sponsorship, tower signage fees, local media and miscellaneous income. |
| (4) | Based on the underwritten rent roll dated July 26, 2017. |
| (5) | Represents an underwritten economic vacancy of 4.5%. |
| (6) | Calculated based on the outstanding principal balance of the Pleasant Prairie Premium Outlets Loan Combination. |
| ■ | Appraisal.According to the appraisal, the Pleasant Prairie Premium Outlets Property had an “as-is” appraised value of $290,000,000 as of July 20, 2017. |
Appraisal Approach | Value | Discount Rate | Capitalization Rate | |||
| Direct Capitalization Approach | $290,000,000 | N/A | 5.75% | |||
| Discounted Cash Flow Approach | $290,000,000 | 7.25% | 6.25%(1) |
| (1) | Represents the terminal capitalization rate. |
| ■ | Environmental Matters. According to the Phase I environmental report dated July 28, 2017, there was no evidence of any recognized environmental conditions or recommendations for further action at the Pleasant Prairie Premium Outlets Property. |
| ■ | Market Overview and Competition.The Pleasant Prairie Premium Outlets Property is located in Pleasant Prairie, Wisconsin, within Kenosha County. Kenosha County’s economy is primarily driven by the healthcare and |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| LOAN #4: PLEASANT PRAIRIE PREMIUM OUTLETS |
| manufacturing industries, and according to the appraisal, notable employers include United Hospital System, Aurora Health Care, Snap-on, and Birchwood Foods. Recently there has been significant development occurring in Kenosha County that is enhancing the local economy. Amazon recently completed construction on a 1.5 million SF distribution center located approximately 6.7 miles north of the Pleasant Prairie Premium Outlets Property along Interstate-94 at a total cost of approximately $250.0 million. Amazon has hired more than 1,000 new full- and part-time employees for this distribution center. Meijer also recently completed a large distribution center as it expands operations into Wisconsin. |
The 2017 population and average household income within a five-mile radius of the Pleasant Prairie Premium Outlets Property is 29,255 and $103,225, respectively. Additionally, the Pleasant Prairie Premium Outlets Property benefits from its location near Chicago, which has a population of approximately 9.7 million people, and Milwaukee, which has a population of approximately 1.6 million people. The Pleasant Prairie Premium Outlets Property is located approximately 38.6 miles south of Milwaukee, 12.3 miles north of Chicago’s northern suburbs and 50.9 miles north of downtown Chicago. The Pleasant Prairie Premium Outlets Property also benefits from its location near the border of Illinois as the sales tax rate of 5.5% in Wisconsin is significantly lower than the sales tax rate of 10.25% in Chicago, which is a positive demand driver for shoppers to travel from Illinois to Wisconsin. The Pleasant Prairie Premium Outlets Property is adjacent to Interstate-94, which runs south from Wisconsin to Indiana and through downtown Chicago and has an average daily traffic count of 96,300 vehicles near the Pleasant Prairie Premium Outlets Property. The Pleasant Prairie Premium Outlets Property also has multiple access points from the east, north and west.
According to the appraisal, the Pleasant Prairie Premium Outlets Property is located within the Kenosha East retail submarket. As of the second quarter of 2017, the submarket reported total inventory of approximately 9.9 million SF with a 4.6% vacancy rate. The appraiser concluded to market rents for the Pleasant Prairie Premium Outlets Property ranging from $38.00 to $100.00 per SF.
The following table presents certain information relating to comparable properties to the Pleasant Prairie Premium Outlets Premium Outlets Property:
Competitive Properties(1)
Pleasant Prairie Premium Outlets (Subject) | Outlet at the Dells | Johnson Creek Premium Outlets | The Outlet Shoppes at Oshkosh | Chicago Premium Outlets | Lighthouse Premium Outlets | |
| Location | Pleasant Prairie, WI | Baraboo, WI | Johnson Creek, WI | Oshkosh, WI | Aurora, IL | Michigan City, IN |
| Distance from Subject | -- | 141 miles | 72 miles | 119 miles | 70 miles | 113 miles |
| Year Built/Renovated | Various/NAP | 2006 | 1998 | 1970 | 2004 | 1987/1997 |
| Major Tenants | The North Face, Nike Factory Store, Gap Outlet, Under Armour | Nike, Levi’s, J. Crew, GAP | GAP, Nike, Ann Taylor, Columbia | GAP, Nike, Famous Footwear, The North Face | GAP, J. Crew, Lands’ End, Levi’s, Nike | GAP, Levi’s, Nike, The North Face |
| Total GLA (SF)(1) | 402,615 | 264,929 | 277,585 | 271,007 | 911,765 | 456,466 |
| Total Occupancy(1) | 93.0% | 96.8% | 97.5% | 98.7% | 97.9% | 100.0% |
| (1) | Information obtained from the appraisal and the underwritten rent roll. |
| ■ | The Borrower. The borrower is Pleasant Prairie Premium Outlets, LLC, a Delaware limited liability company and single purpose entity with two independent directors. Pleasant Prairie Premium Outlets, LLC, is 100.0% directly owned by Simon Property Group, L.P. (“Simon”). Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Pleasant Prairie Premium Outlets Loan Combination. Simon is the guarantor of certain nonrecourse carveouts under the Pleasant Prairie Premium Outlets Loan Combination. Simon’s obligations under the guaranty are capped at $29 million; however, the liability cap does not apply to a replacement guarantor. |
The borrower sponsor is Simon, a self-administered and self-managed real estate investment trust. Simon owns, develops, and manages retail real estate properties, which consist primarily of malls, Premium Outlets and The Mills. As of December 31, 2016, Simon owned or held an interest in 206 income-producing properties in the United States, which consisted of 108 malls, 67 premium outlets, 14 mills, four lifestyle centers, and 13 other retail properties in 37 states and Puerto Rico.
| ■ | Escrows.At origination, in lieu of depositing reserves, the borrower provided a guaranty for outstanding tenant improvements and leasing commissions related to tenants DXL Men’s Outlet ($177,000), ASICS ($105,600), Starbucks Coffee Company ($79,975) and Fila ($54,000). |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| LOAN #4: PLEASANT PRAIRIE PREMIUM OUTLETS |
During a Pleasant Prairie Premium Outlets Reserve Event Period (as defined below) or at any time taxes become delinquent or the borrower fails to provide the lender with evidence that taxes have been paid prior to the date they become delinquent, the borrower is required to deposit with the lender on each payment date one-twelfth of the taxes reasonably estimated to be payable for the Pleasant Prairie Premium Outlets Property over the next twelve months. During a Pleasant Prairie Premium Outlets Reserve Event Period, if the borrower has not provided the lender with evidence that the insurance policies are being maintained as part of a reasonably acceptable blanket insurance policy in accordance with the Pleasant Prairie Premium Outlets Loan Combination documents, the borrower is required to deposit with the lender on each payment date one-twelfth of the insurance premiums estimated to be payable for the renewal of coverage afforded by the policies upon the expiration thereof. On each due date during a Pleasant Prairie Premium Outlets Reserve Event Period or during the continuance of an event of default under the Pleasant Prairie Premium Outlets Loan Combination documents, the borrower is required to deposit $6,710 for replacement reserves and $41,939 as lease rollover reserves.
A“Pleasant Prairie Premium Outlets Reserve Event Period” means the period commencing when the debt service coverage ratio based on the trailing four calendar quarter period immediately preceding the date of such determination is less than 1.95x for two consecutive calendar quarters and continuing until the debt service coverage ratio is 1.95x for two consecutive calendar quarters based on the trailing four calendar quarter period immediately preceding the date of such determination.
| ■ | Lockbox and Cash Management. The Pleasant Prairie Premium Outlets Loan Combination requires a lender-controlled hard lockbox, which is already in place, and that the borrower direct all tenants to deposit all rents directly into such lockbox account. The Pleasant Prairie Premium Outlets Loan Combination documents also require that all rents received by the borrower or the property manager be deposited into the lockbox account within two business days of receipt. Prior to the occurrence of a Pleasant Prairie Premium Outlets Lockbox Event Period (as defined below), all funds are required to be distributed to the borrower. During a Pleasant Prairie Premium Outlets Lockbox Event Period, all rents are required to be swept to a lender-controlled cash management account. During an event of default under the Pleasant Prairie Premium Outlets Loan Combination documents, the lender may apply funds in the cash management account in such order as it may determine. |
A“Pleasant Prairie Premium Outlets Lockbox Event Period” means the occurrence of (i) an event of default, (ii) the trailing four calendar quarter debt service coverage ratio falling below 1.70x for two consecutive calendar quarters, or (iii) any bankruptcy or similar action of the borrower (or manager, if the manager is an affiliate of the borrower and not replaced within sixty days in accordance with the Pleasant Prairie Premium Outlets Loan Combination documents). A Pleasant Prairie Premium Outlets Lockbox Event Period will end, with respect to clause (i), upon the cure of such event of default, if applicable; with respect to clause (ii), upon the trailing four calendar quarter debt service coverage ratio remaining equal to or greater than 1.70x for two consecutive calendar quarters; and with respect to clause (iii), upon the replacement of the property manager in accordance with the Pleasant Prairie Premium Outlets Loan Combination documents. A bankruptcy by the borrower is not subject to cure. No Pleasant Prairie Premium Outlets Lockbox Event Period may be cured more than five times.
| ■ | Property Management. The Pleasant Prairie Premium Outlets Property is managed by Simon Management Associates, LLC. The lender can instruct the borrower to replace the property manager in the event (i) the manager becomes insolvent or a debtor in a bankruptcy action or related proceeding, (ii) an event of default has occurred and is continuing under the Pleasant Prairie Premium Outlets Loan Combination documents, or (iii) a default by the property manager is continuing under the management agreement beyond all notice and cure periods. The borrower has the right to replace the manager without the lender’s consent with a property manager who is an affiliate of the existing property manager or (A) certain specified affiliates, (B) a reputable and experienced professional management organization which (i) is not subject to a bankruptcy, insolvency or similar proceeding, (ii) manages, together with its affiliates, (I) at least seven “shopping centers” and (II) retail properties and shopping centers other than the Pleasant Prairie Premium Outlets Property totaling at least in the aggregate 3,000,000 SF of gross leasable area (a “shopping center” or “retail property” means a retail property containing at least 400,000 SF of gross leasable area, including tenant and/or anchor space constituting a portion of the shopping center regardless of whether such space is owned by the owner of such shopping center), or (C) a manager approved by the lender, which approval cannot be unreasonably withheld, conditioned or delayed and for which the lender has received a rating agency confirmation. |
| ■ | Additional Subordinate and Mezzanine Indebtedness.Not permitted. |
| ■ | Release of Collateral. Not permitted. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| LOAN #4: PLEASANT PRAIRIE PREMIUM OUTLETS |
| ■ | Terrorism Insurance.The loan documents require that the “all risk” insurance policy required to be maintained by the borrower provide coverage for terrorism in an amount equal to the full replacement cost of the Pleasant Prairie Premium Outlets Property, (provided that the borrower is not required to pay more than two times the annual insurance premiums (excluding the wind, flood and earthquake components of such insurance premiums) for such coverage and shall purchase the maximum coverage available for such amount), with no deductible in excess of $5,000,000, as well as business interruption insurance covering no less than an amount equal to 100% of the projected gross income from the Pleasant Prairie Premium Outlets Property on an actual loss sustained basis for a period beginning on the date of business interruption and continuing until the restoration of the Pleasant Prairie Premium Outlets Property is completed, or the 18-month period following the occurrence of a casualty event, together with a 12-month extended period of indemnity. See “Risk Factors—Terrorism Insurance May Not Be Available for All Mortgaged Property” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #5:stryker corporation |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
72
LOAN #5:stryker corporation |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #5:stryker corporation |
| Mortgaged Property Information | Mortgage Loan Information | ||||
| Number of Mortgaged Properties | 1 | Loan Seller | GACC | ||
| Location (City/State) | San Jose, California | Cut-off Date Balance | $39,900,000 | ||
| Property Type | Office | Cut-off Date Balance per SF | $208.60 | ||
| Size (SF) | 191,276 | Percentage of Initial Pool Balance | 4.1% | ||
| Total Occupancy as of 10/6/2017 | 100.0% | Number of Related Mortgage Loans | 2 | ||
| Owned Occupancy as of 10/6/2017 | 100.0% | Type of Security | Fee Simple | ||
| Year Built / Latest Renovation | 2002 / NAP | Mortgage Rate | 4.16000% | ||
| Appraised Value | $61,000,000 | Original Term to Maturity (Months) | 120 | ||
| Appraisal Date | 7/20/2017 | Original Amortization Term (Months) | 360 | ||
| Borrower Sponsors | AG Net Lease III Corp. and AG Net Lease III (SO) Corp. | Original Interest Only Term (Months) | 60 | ||
| Property Management | Self Managed | First Payment Date | 11/6/2017 | ||
| Maturity Date | 10/6/2027 | ||||
| Underwritten Revenues | $4,800,597 | ||||
| Underwritten Expenses | $168,021 | Escrows(1) | |||
| Underwritten Net Operating Income (NOI) | $4,632,576 | Upfront | Monthly | ||
| Underwritten Net Cash Flow (NCF) | $4,632,576 | Taxes | $0 | $0 | |
| Cut-off Date LTV Ratio | 65.4% | Insurance | $0 | $0 | |
| Maturity Date LTV Ratio | 59.5% | Replacement Reserve | $761,501 | $0 | |
| DSCR Based on Underwritten NOI / NCF | 1.99x / 1.99x | TI/LC | $354,432 | $0 | |
| Debt Yield Based on Underwritten NOI / NCF | 11.6% / 11.6% | Other(2) | $1,210,000 | $0 | |
| Sources and Uses | |||||||
| Sources | $ | % | Uses | $ | % | ||
| Loan Amount | $39,900,000 | 62.4 | % | Purchase Price(3) | $61,000,000 | 95.4% | |
| Sponsor Equity(3) | 24,068,378 | 37.6 | Reserves | 2,325,933 | 3.6 | ||
| Closing Costs | 642,444 | 1.0 | |||||
| Total Sources | $63,968,378 | 100.0 | % | Total Uses | $63,968,378 | 100.0% | |
| (1) | See“—Escrows” below. |
| (2) | The Other reserve is a reserve to remediate moisture intrusion. |
| (3) | The borrower sponsors purchased the Stryker Corporation Property in an all cash transaction on April 3, 2017 for $61,000,000 and recapitalized a portion of the purchase price with the proceeds of the Stryker Corporation Loan. At origination in September 2017, the loan proceeds were used to recapitalize $36,981,622 of the purchase price paid in April 2017. The Sponsor Equity of $24,068,378 accounts for the net cash equity remaining after the recapitalization. |
| ■ | The Mortgage Loan. The mortgage loan (the “Stryker Corporation Loan”) is secured by a first mortgage encumbering the borrower’s fee interest in a 191,276 SF single-tenant, office and research and development (“R&D”) industrial building located in San Jose, California (the “Stryker Corporation Property”). The Stryker Corporation Loan had an original principal balance of $39,900,000, has an outstanding principal balance as of the Cut-off Date of $39,900,000 and represents 4.1% of the Initial Pool Balance. The Stryker Corporation Loan was originated by Deutsche Bank AG, acting through its New York Branch (“DBNY”) (an affiliate of German American Capital Corporation) on September 22, 2017. The Stryker Corporation Loan has an interest rate of 4.16000%per annum. The proceeds of the Stryker Corporation Loan were used to recapitalize the borrower sponsors for the acquisition of the Stryker Corporation property for $61,000,000 in April 2017, fund upfront reserves of $2,325,933 and fund closing costs of $642,444. |
The Stryker Corporation Loan had an initial term of 120 months and has a remaining term of 120 months as of the Cut-off Date. The Stryker Corporation Loan requires monthly payments of interest only through the due date in October 2022, after which it requires monthly payments of interest and principal based on a 30-year amortization schedule. The scheduled maturity date of the Stryker Corporation Loan is the due date in October 2027. Provided that no event of default has occurred and is continuing under the Stryker Corporation Loan documents, at any time on or after the date that is the second anniversary after the closing date of the CGCMT 2017-C4 securitization transaction and prior to the due date in May 2027, the Stryker Corporation Loan may be prepaid, in whole only, together with interest accrued to the date of prepayment (or if prepayment is not made on a due date, interest accrued for the full interest period in which the prepayment date falls), together with a prepayment fee equal to the greater of (x) 1.00% of the unpaid principal balance and (y) a yield maintenance premium. Provided that no event of default has occurred and is continuing under the Stryker Corporation Loan documents, voluntary prepayment of the Stryker Corporation Loan, in whole only, together with accrued interest as described above, but without a prepayment premium or yield maintenance charge, is permitted on or after the due date in May 2027.
| ■ | The Mortgaged Property. The Stryker Corporation Property is comprised of a 191,276 SF single-tenant, office and R&D industrial building located at 5900 Optical Court, San Jose, California within the Silicon Valley submarket. The Stryker Corporation Property is 100.0% leased as of October 6, 2017, to Stryker Corporation on a 12-year double-net lease with 3% annual rent escalations through March 2028, with two five-year extension options and no early termination rights, other than in connection with a condemnation or casualty. Under the double-net lease, Stryker |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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Corporation is responsible for the payment of taxes, insurance, utilities, maintenance and repair while the landlord is responsible for replacement of structural elements only.
The Stryker Corporation Property was built to suit for the Stryker Corporation in 2002, for use as the U.S. Endoscopy segment headquarters, as the sole location for R&D production and distribution of the tenant’s endoscopy products. Since 2015, according to the borrower sponsor, Stryker Corporation invested approximately $13.0 million in property improvements. Capital expenditures since 2015 include upgrades to the lobby, cafeteria and production areas, as well as expansion of the net rentable area by 6,276 SF, which is planned for completion by end of October 2017. The expansion is in part to accommodate the growing workforce, which, according to the tenant, grew from approximately 400 to 600 employees since inception. The borrower sponsor purchased the Stryker Corporation Property for $61,000,000 in April 2017 in an all-cash transaction.
The Stryker Corporation Property is a two-story building comprised of 105,600 SF (55.2% of NRA) of office space, 54,000 SF (28.2% of NRA) of light manufacturing/R&D space, 26,000 SF (13.6% of NRA) of warehouse and distribution space, and the remaining 5,676 SF (3.0%) is used as flex space. The office space is concentrated on approximately one-third of the ground floor and the second floor above this office area. The other two-thirds of the ground floor space consists of high-bay up to the roof space, and is used for light manufacturing/R&D and warehouse. The high-bay portions of the building have a clear height of approximately 27 feet and five loading docks. The Stryker Corporation Property also features a new customer experience center showroom that opened in April 2017 and includes a glass-enclosed “Operating Room of the Future” display using a self-contained holographic computer.
| ■ | The Tenant. Founded in 1946, Stryker Corporation (NYSE: SYK) is a medical technology Fortune 500 company with approximately $11.3 billion in net sales for fiscal year 2016, which is up 13.9% since the prior year. Stryker Corporation offers a variety of products and services in orthopedics, medical and surgical and neurotechnology and spine and is rated A by S&P and Baa1 by Moody’s. |
The company is diversified with no single business in any segment representing more than 14% of Stryker Corporation’s net sales. The U.S. Endoscopy segment is headquartered at the Stryker Corporation Property and generated approximately $1.5 billion in sales for the full year ended December 31, 2016, which represents approximately 13% of Stryker Corporation’s net sales.
The following table presents certain information relating to the sole tenant at the Stryker Corporation Property:
Largest Owned Tenant Based on Underwritten Base Rent
Tenant Name | Credit Rating (Fitch/MIS/S&P)(1) | Tenant | % of GLA | UW Base | % of Total | UW Base | Lease Expiration | Renewal / Extension Options | ||||||||
| Stryker Corporation | NR / Baa1 / A | 191,276 | 100.0% | $4,137,300 | 100.0% | $21.63 | 3/31/2028 | 2, 5-year options | ||||||||
| Largest Tenant | 191,276 | 100.0% | $4,137,300 | 100.0% | $21.63 | |||||||||||
| Vacant | 0 | 0.0 | 0 | 0.0 | 0.00 | |||||||||||
Total / Wtd. Avg. All Tenant | 191,276 | 100.0% | $4,137,300 | 100.0% | $21.63 |
| (1) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
| (2) | UW Base Rent and UW Base Rent $ per SF exclude $747,939 ($3.91 per SF) in underwritten straight-line average rent steps through the term of the Stryker Corporation Loan, which are included in Underwritten Net Operating Income and Underwritten Net Cash Flow. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The following table presents certain information relating to the lease rollover schedule at the Stryker Corporation Property, based on initial lease expiration dates:
Lease Expiration Schedule
Year Ending | Expiring Owned | % of Owned | Cumulative % of | UW | % of Total UW | UW Base Rent | # of Expiring | |||||||
| MTM | 0 | 0.0% | 0.0% | $0 | 0.0% | $0.00 | 0 | |||||||
| 2017 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2018 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2019 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2020 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2021 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2022 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2023 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2024 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2025 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2026 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2027 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2028 & Thereafter | 191,276 | 100.0 | 100.0% | 4,137,300 | 100.0 | 21.63 | 1 | |||||||
| Vacant | 0 | 0.0 | 100.0% | 0 | 0.0 | 0.00 | 0 | |||||||
| Total / Wtd. Avg. | 191,276 | 100.0% | $4,137,300 | 100.0% | $21.63 | 1 |
| (1) | UW Base Rent and UW Base Rent $ per SF exclude $747,939 ($3.91 per SF) in underwritten straight-line average rent steps through the term of the Stryker Corporation Loan, which are included in Underwritten Net Operating Income and Underwritten Net Cash Flow. |
| ■ | Underwritten Net Cash Flow. The following table presents certain information relating to the Underwritten Net Cash Flow at the Stryker Corporation Property: |
Cash Flow Analysis(1)
Underwritten | Underwritten | |||
| Base Rent | $4,137,300 | $21.63 | ||
| Credit Tenant Rent Steps(2) | 747,939 | 3.91 | ||
| Potential Income from Vacant Space | 0 | 0.00 | ||
| Total Rent | $4,885,239 | $25.54 | ||
| Reimbursements | 168,021 | 0.88 | ||
| Vacancy | (252,663) | (1.32) | ||
| Effective Gross Income | $4,800,597 | $25.10 | ||
| Management Fee | 168,021 | 0.88 | ||
| Total Operating Expenses(3) | $168,021 | $0.88 | ||
| Net Operating Income | $4,632,576 | $24.22 | ||
| TI/LC Reserves | 0 | 0.00 | ||
| Replacement Reserves | 0 | 0.00 | ||
| Net Cash Flow | $4,632,576 | $24.22 | ||
| Occupancy | 100.0% | |||
| NOI Debt Yield | 11.6% | |||
| NCF DSCR | 1.99x |
| (1) | The Stryker Corporation Property was operated by the tenant prior to the borrower’s purchase in April 2017 (and continues to be operated by the tenant); accordingly historical operating information is not available. |
| (2) | Credit Tenant Rent Steps represent the straight-line average of Stryker Corporation contractual step rent through loan expiration. |
| (3) | Operating expenses, other than a management fee, were not underwritten, in-line with the double-net nature of theStryker Corporation lease. |
| ■ | Appraisal.According to the appraisal, the Stryker Corporation Property had an “as-is” appraised value of $61,000,000 as of July 20, 2017. |
Appraisal Approach | Value | Discount | Capitalization Rate | |||
| Direct Capitalization Approach | $61,000,000 | N/A | 6.25% |
| ■ | Environmental Matters. Based on a Phase I environmental report dated December 14, 2016, there are no recognized environmental conditions or recommendations for further action at the Stryker Corporation Property. |
| ■ | Market Overview and Competition. The Stryker Corporation Property is located within the Greater Silicon Valley submarket in California. The Stryker Corporation Property is situated within the Edenvale Technology Park, which includes approximately 12.0 million SF of built out R&D and office space, 300 employers, and 13,400 employees. The |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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Edenvale Technology Park benefits from proximity to Highway 101 and Highway 85 (each within a 1.0 mile radius), which makes the Stryker Corporation Property accessible from throughout Silicon Valley. Additionally, the Blossom Hill Caltrain station is located approximately 1.6 miles away on the east side of Highway 101 and the Cottle Road VTA Light Rail Station is approximately 2.0 miles away. According to the appraisal, the Stryker Corporation Property benefits from access to engineers and the power and electric infrastructure of the Silicon Valley market as well as shorter commute times to residential communities.
Office Submarket. The Stryker Corporation Property is located within the South San Jose class B office submarket. According to an industry market report, the South San Jose Class B office submarket had approximately 2.4 million SF across 99 buildings, a reported vacancy rate of 5.0% and a market rent of $27.83 per SF as of mid-year 2017. Additionally, the South San Jose office submarket cluster has reported new construction activity of 568,867 SF across four buildings, which is 19.0% pre-leased according to an industry market report.
Industrial (R&D) Submarket. The Stryker Corporation Property is located within the South San Jose industrial flex submarket. According to an industry market report, the South San Jose flex submarket had approximately 8.3 million SF across 125 buildings, a reported vacancy rate of 15.6% and a submarket rent of $16.52 PSF as of mid-year 2017. Additionally, the South San Jose industrial submarket has reported new construction activity of 200,000 SF within one building, which is 100.0% pre-leased according to an industry market report.
The following table presents certain information relating to lease comparables for the Stryker Corporation Property:
Office Lease Comparables(1)
Property Name | Property Location | Tenant Name | Lease | GLA | Lease | Base Rent | Lease Type | |||||||
| Stryker Corporation Property | San Jose, CA | Stryker Corporation(2) | Apr-16(2) | 191,276(2) | 12.0(2) | $21.63(2) | NN | |||||||
| 5225 Hellyer Avenue | San Jose, CA | Granite Rock Construction | Sep-16 | 21,584 | 10.0 | $15.00 | NNN | |||||||
| 845 Embedded Way | San Jose, CA | Diagnostics for the Real World | Aug-16 | 24,222 | 5.4 | $15.60 | NNN | |||||||
| 130 Baytech Drive | San Jose, CA | GigPeak | Aug-16 | 32,805 | 5.3 | $21.00 | NNN | |||||||
| 170 Baytech Drive | San Jose, CA | Boston Scientific | Mar-16 | 76,802 | 10.3 | $22.20 | NNN | |||||||
| 180 Baytech Drive | San Jose, CA | Prysm | Mar-16 | 74,012 | 5.4 | $22.32 | NNN | |||||||
| 5225 Hellyer Avenue | San Jose, CA | Tabuchi Electric | Mar-16 | 41,493 | 7.0 | $15.00 | NNN | |||||||
| 150 Baytech Drive | San Jose, CA | Boston Scientific | Sep-15 | 150,000 | 10.0 | $21.00 | NNN | |||||||
| 3050 Zanker Road | San Jose, CA | Ultratech | Jul-15 | 97,910 | 5.0 | $24.00 | NNN | |||||||
| 6311 & 6331 San Ignacio Avenue | San Jose, CA | BAE Systems | Apr-15 | 161,718 | 10.5 | $14.52 | NNN | |||||||
| 5215 Hellyer Avenue | San Jose, CA | Ampro Adlink Technology | Mar-15 | 37,301 | 5.0 | $16.32 | NNN | |||||||
| 5300 Hellyer Avenue | San Jose, CA | Cobham | Jun-12 | 160,000 | 10.0 | $18.84 | NNN |
| (1) | Source: market broker report. |
| (2) | Based on the borrower rent roll dated July 18, 2017. |
| ■ | The Borrower. The borrower is AGNL Trauma, L.P., a single-purpose, single-asset entity. The non-recourse carveout guarantors are AG Net Lease III Corp. and AG Net Lease III (SO) Corp., on a several but not joint basis, in accordance with percentage interests set forth in the non-recourse carve-out guaranty and environmental indemnity. AG Net Lease III Corp. and AG Net Lease III (SO) Corp. are real estate investment funds managed by Angelo Gordon & Co. (“AG”). Founded in 1988, Angelo Gordon is a privately-held registered investment advisor. The borrower sponsors are entities of Angelo Gordon’s third net lease fund, which focuses on sale-leaseback transactions for single-tenant properties pursuant to leases covering at least 10-20 years located primarily in the United States. A non-consolidation opinion has been delivered in connection with the origination of the Stryker Corporation Loan. |
| ■ | Escrows.In connection with the origination of the Stryker Corporation Loan, the borrower funded reserves of (i) $354,432 for TI/LC reserves, (ii) $761,501 for capital improvements to be used for future capital improvements in accordance with the terms of the Stryker Corporation lease and (iii) $1,210,000 for a moisture intrusion reserve, representing 105% of the amount quoted for the remediation of moisture intrusion at the Stryker Corporation Property. |
The requirement for the borrower to fund ongoing tax and insurance reserves is waived so long as, among other things, (i) the Stryker Corporation lease or a replacement lease is in full force and effect and no monetary event of default is continuing and (ii) Stryker Corporation or the replacement tenant is obligated under its lease to pay all taxes and insurance directly to the applicable government authority or insurer. In the event the Stryker Corporation lease or a replacement lease is no longer in place or Stryker Corporation or the replacement tenant is no longer making tax
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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and insurance payments, the borrower will be required to deposit on each due date an amount equal to one-twelfth of (i) the taxes that the lender reasonably estimates will be payable during the next ensuing 12 months, and (ii) the insurance premiums that the lender reasonably estimates will be payable for renewal of the coverage afforded by the policies upon their expiration (unless an acceptable blanket policy is in effect, in which case insurance reserve deposits are waived). In addition, if Stryker Corporation or a replacement tenant is no longer required under its lease to perform all capital expenditure work at the Stryker Corporation Property or is not paying for such capital expenditure work, monthly deposits of approximately $3,347 will be required to be made into a capital expenditures reserve. In addition, during a Stryker Corporation Lease Sweep Period (as defined below) or an event of default under the Stryker Corporation Loan, the borrower will be required to make monthly deposits of approximately $17,457 into a tenant improvements and leasing commissions reserve.
The borrower is permitted to replace all funds deposited into the upfront or any ongoing tenant improvements and leasing commissions reserve, the upfront or any ongoing capital expenditures reserve and the moisture remediation reserve with letters of credit.
| ■ | Lockbox and Cash Management. The Stryker Corporation Loan documents require a hard lockbox with springing cash management.TheStryker Corporation Loandocuments require the borrower to direct tenants to pay rent directly to a lender-controlled lockbox account and require that all other money received by the borrower with respect to the Stryker Corporation Property be promptly deposited into such lockbox account following receipt. Unless a Stryker Corporation Trigger Period (as defined below) exists, all amounts on deposit in the lockbox account are required to be swept on each business day into the borrower’s operating account. During a Stryker Corporation Trigger Period, all amounts in the lockbox account are required to be swept to a lender-controlled cash management account on each business day and applied on each payment date, provided no event of default is continuing under the Stryker Corporation Loan, to the payment of debt service, the funding of required reserves, budgeted monthly operating expenses, approved extraordinary expenses and to pay debt service on any Approved Mezzanine Loan (see “Mezzanine or Subordinate Indebtedness” below), and all remaining cash flow is required to be disbursed (i) during a Stryker Corporation Lease Sweep Period, or if a mezzanine loan event of default is continuing, to an account (the“Stryker Corporation Lease Sweep Account”) to be used for Approved Retenanting Expenses (as defined below), (ii) during a Stryker Corporation Trigger Period caused solely by a Stryker Corporation Mezzanine Trigger Period (as defined below), and provided that no mezzanine loan event of default is continuing, to the mezzanine lender, to be applied in accordance with the mezzanine loan documents, and (iii) otherwise to be deposited into an account to be held as additional security for the Stryker Corporation Loan during the continuance of such Stryker Corporation Trigger Period. |
A“Stryker Corporation Trigger Period” will commence upon the occurrence of (i) an event of default under the Stryker Corporation Loan, (ii) a Stryker Corporation Low Debt Service Period (as defined below), (iii) a Stryker Corporation Mezzanine Trigger Period (as defined below) or (iv) a Stryker Corporation Lease Sweep Period (as defined below) and will end upon (a) with respect to clause (i), the date on which such event of default is cured and such cure has been accepted by the lender, (b) with respect to clause (ii), the Stryker Corporation Low Debt Service Period has ended as set forth in the definition of such term, (c) with respect to clause (iii), the date on which the Stryker Corporation Mezzanine Trigger Period has ended in accordance with the terms of the loan documents and (d) with respect to clause (iv), such Stryker Corporation Lease Sweep Period has ended as set forth in the definition of such term.
A“Stryker Corporation Low Debt Service Period” will commence if the amortizing debt service coverage ratio (based on the Stryker Corporation Loan balance and the balance of any Approved Mezzanine Loan then in place) falls below 1.20x for any calendar quarter and will end if the amortizing debt service coverage ratio (calculated on the same basis) is at least 1.20x for one calendar quarter.
A“Stryker Corporation Mezzanine Trigger Period” will commence and continue so long as any Approved Mezzanine Loan is outstanding.
A“Stryker Corporation Lease Sweep Period” will commence on the first due date following any of (a) the earlier of (i) six months prior to the stated maturity date or (ii) the date required under a Stryker Corporation Sweep Lease (as defined below) by which the Stryker Corporation Sweep Tenant (as defined below) is required to give notice of its exercise of a renewal option thereunder (and such renewal has not been so exercised); (b) upon the early termination, early cancellation or early surrender of a Stryker Corporation Sweep Lease (or any portion thereof exceeding 75% of the total leasable square feet under such lease) by a Stryker Corporation Sweep Tenant; or (c) upon a bankruptcy or
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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insolvency proceeding or similar event of a Stryker Corporation Sweep Tenant or its parent company and will end upon, with respect to clause (a) and (b) above, when the entirety of the space under the Stryker Corporation Sweep Lease (or applicable portion thereof) is leased under an extension of the original Stryker Corporation Sweep Lease in accordance with its terms or other terms approved by the lender or under a replacement lease entered into in accordance with the loan documents, and, in the lender’s judgment, sufficient funds have been accumulated in the Stryker Corporation Lease Sweep Account to cover all anticipated approved Stryker Corporation Sweep Lease leasing expenses, free rent periods under such lease, and/or rent abatement periods and any shortfalls in required payments under the Stryker Corporation Loan or operating expenses as a result of any anticipated down time prior to the commencement of payments under such lease (the foregoing funds, collectively,“Approved Retenanting Expenses”) and with respect to clause (c) above either (i) the applicable bankruptcy, insolvency or similar proceeding has terminated and the applicable Stryker Corporation Sweep Lease has been affirmed, assumed or assigned in a manner reasonably satisfactory to the lender, or (ii) the applicable Stryker Corporation Sweep Lease has been assumed and assigned to a third party in a manner reasonably satisfactory to the lender.
Remaining funds in the Stryker Corporation Lease Sweep Account are required to be released to the borrower once certain retenanting conditions are met, or in the case of a Stryker Corporation Lease Sweep Period caused by a bankruptcy or insolvency event, once such event is cured.
A“Stryker Corporation Sweep Lease” means the lease agreement between the borrower, as landlord and Stryker Corporation, as tenant and any replacement lease covering a majority of the space currently demised under such lease.
A“Stryker Corporation Sweep Tenant” means any tenant under a Stryker Corporation Sweep Lease or its direct or indirect parent company (if any).
| ■ | Property Management. The Stryker Corporation Property is managed by Stryker Corporation, the tenant. |
| ■ | Current Mezzanine or Subordinate Indebtedness. None. |
| ■ | Mezzanine or Subordinate Indebtedness. The borrower is permitted to obtain mezzanine financing secured by the direct or indirect ownership interest interests in the borrower, provided that: (i) the mezzanine loan shall be in an amount not to exceed $6,000,000 and that when added to the Stryker Corporation Loan will result in (A) a combined “as is” loan-to-value ratio of not more than 65.4%, (B) a combined amortizing debt service coverage ratio not less than 1.72x, and (C) a combined debt yield not less than 10.1%; (ii) the mezzanine loan is interest only and coterminous with the Stryker Corporation Loan; (iii) the mezzanine loan and organizational structure of the mezzanine borrower will otherwise be on terms and conditions and subject to documentation reasonably acceptable to the lender and in accordance with rating agency requirements; (iv) the mezzanine lender has entered into an intercreditor agreement reasonably acceptable to the mortgage lender; and (v) the lender has received a rating agency confirmation (such mezzanine loan meeting the preceding requirements, an“Approved Mezzanine Loan”). |
| ■ | Release of Collateral. Not permitted. |
| ■ | Terrorism Insurance. The Stryker Corporation Loan documents require that the “all risk” insurance policy required to be maintained by the borrower provide coverage for terrorism in an amount equal to the full replacement cost of the Stryker Corporation Property. Any such insurance may be provided through a blanket insurance policy, provided that such policy is required to provide the same protection that a separate policy insuring only the Stryker Corporation Property would provide, as determined by the lender. For so long as TRIPRA is in effect and continues to cover both foreign and domestic acts, the lender is required to accept terrorism insurance with coverage against acts which are “certified” within the meaning of TRIPRA. See “Risk Factors—Terrorism Insurance May Not Be Available for All Mortgaged Properties” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| LOAN #6: MARRIOTT LAX |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
80
| LOAN #6: MARRIOTT LAX |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| LOAN #6: MARRIOTT LAX |
| Mortgaged Property Information | Mortgage Loan Information | ||||
| Number of Mortgaged Properties | 1 | Loan Seller | LCF | ||
| Location (City/State) | Los Angeles, California | Cut-off Date Balance(3) | $39,689,333 | ||
| Property Type | Hospitality | Cut-off Date Balance per Room(2) | $144,733.63 | ||
| Size (Rooms) | 1,004 | Percentage of Initial Pool Balance | 4.1% | ||
| Total TTM Occupancy as of 12/31/2016 | 84.6% | Number of Related Mortgage Loans | None | ||
| Type of Security | Fee Simple | ||||
| Year Built / Latest Renovation | 1973 / 2017 | Mortgage Rate | 5.11400% | ||
| Appraised Value(1) | $300,800,000 | Original Term to Maturity (Months) | 120 | ||
| Appraisal Date(1) | 2/1/2018 | Original Amortization Term (Months) | 360 | ||
| Borrower Sponsor | XLD Group N.A. Real Estate | Original Interest Only Period (Months) | NAP | ||
| Development, Inc. | First Payment Date | 4/6/2017 | |||
| Property Management | Marriott Hotel Services, Inc. | Maturity Date | 3/6/2027 | ||
| Underwritten Revenues | $72,058,354 | ||||
| Underwritten Expenses | $51,979,491 | Escrows(4) | |||
| Underwritten Net Operating Income (NOI) | $20,078,862 | ||||
| Underwritten Net Cash Flow (NCF) | $16,475,945 | Upfront | Monthly | ||
| Cut-off Date LTV Ratio(1)(2) | 48.3% | Taxes | $0 | $0 | |
| Maturity Date LTV Ratio(1)(2) | 40.2% | Insurance | $0 | $0 | |
| DSCR Based on Underwritten NOI / NCF(2) | 2.10x / 1.72x | FF&E | $0 | $0 | |
| Debt Yield Based on Underwritten NOI / NCF(2) | 13.8% / 11.3% | Other | $13,025,832 | $0 | |
| Sources and Uses | ||||||
| Sources | $ | % | Uses | $ | % | |
| Loan Combination Amount | $146,450,000 | 100.0% | Loan Payoff | $82,184,809 | 56.1% | |
| Principal Equity Distribution | 47,091,443 | 32.2 | ||||
| Reserves | 13,025,832 | 8.9 | ||||
| Closing Costs | 4,147,916 | 2.8 | ||||
| Total Sources | $146,450,000 | 100.0% | Total Uses | $146,450,000 | 100.0% | |
| (1) | The Appraised Value represents the “as-complete” appraised value of $300,800,000 as of February 1, 2018 which assumes the completion of a PIP that was required in connection with the refinance of the Marriott LAX Property. The Cut-off Date LTV Ratio and Maturity Date LTV Ratio for the Marriott LAX Loan are calculated using the “as-complete” appraised value. The “as-is” appraised value for the Marriott LAX Property was $257,000,000 as of February 1, 2017. The Cut-off Date LTV Ratio and Maturity Date LTV Ratio calculated using the “as-is” appraised value are 56.5% and 47.0%, respectively. |
| (2) | The Cut-off Date Balance per Room, Debt Yield Based on Underwritten NOI / NCF, DSCR Based on Underwritten NOI / NCF, Cut-off Date LTV Ratio, and Maturity Date LTV Ratio calculations presented above are based on the aggregate principal balance notes comprising the Marriott LAX Loan Combination. |
| (3) | The Cut-off Date Balance of $39,689,333 represents the controlling note A-1-A, which note is part of a loan combination evidenced by threepari passu promissory notes with an aggregate outstanding principal balance as of the Cut-off Date of $145,312,569. The related companion loans are evidenced by (i) the non-controlling note A-2, which has an outstanding principal balance as of the Cut-off Date of $61,518,465 and was contributed to the LCCM 2017-LC26 securitization transaction, and (ii) the non-controlling note A-3-A, which has an outstanding principal balance as of the Cut-off Date of $44,104,771, is currently held by Ladder Capital Finance LLC (“LCF”) and is expected to be contributed to one or more future securitization transactions. See“—The Mortgage Loan” below. |
| (4) | See “—Escrows” below. |
| ■ | The Mortgage Loan.The mortgage loan (the “Marriott LAX Loan”) is part of a loan combination (the “Marriott LAX Loan Combination”) evidenced by threepari passu notes with a combined outstanding principal balance as of the Cut-off Date of $145,312,569. The Marriott LAX Loan Combination is secured by the borrower’s fee simple interest in a 1,004 room hotel located in Los Angeles, California (the “Marriott LAX Property”). The Marriott LAX Loan, which is evidenced by the controlling note A-1-A, had an original principal balance of $40,000,000, has an outstanding principal balance as of the Cut-off Date of $39,689,333 and represents approximately 4.1% of the Initial Pool Balance. The related companion loans have an aggregate outstanding principal balance as of the Cut-off Date of $105,623,236 and are evidenced by (i) the non-controlling note A-2, which has an outstanding principal balance as of the Cut-off Date of $61,518,465 and was contributed to the LCCM 2017-LC26 securitization transaction, and (ii) the non-controlling note A-3-A, which has an outstanding principal balance as of the Cut-off Date of $44,104,771, is currently held by Ladder Capital Finance LLC or one of its affiliates (“LCF”) and is expected to be contributed to one or more future securitization transactions. The Marriott LAX Loan Combination was originated by LCF on March 6, 2017. Eachpari passunote evidencing the Marriott LAX Loan Combination has an interest rate of 5.11400%per annum. The borrower utilized the proceeds of the Marriott LAX Loan Combination to payoff the existing debt on the Marriott LAX Property, fund reserves, pay closing costs and return equity to the borrower sponsor. See “Description of the Mortgage Pool—The Loan Combinations—The Serviced Pari Passu Loan Combinations” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| LOAN #6: MARRIOTT LAX |
Note Summary
| Note | Current or Anticipated Holder of Securitized Note | Cut-off Date Balance |
Marriott LAX Loan
| ||
| Note A-1-A(1) | CGCMT 2017-C4 | $39,689,333 |
Marriott LAX Pari Passu Companion Loans | ||
| Note A-2 | LCCM 2017-LC26 | $61,518,465 |
| Note A-3-A | LCF(2) | $44,104,771 |
| Total | $145,312,569 | |
(1) Note A-1-A is the controlling note in the trust.
(2) Expected to be contributed to a future securitization transaction.
| ■ | The Mortgaged Property. The Marriott LAX Property is a full service hotel comprising 1,004 rooms located on West Century Boulevard in Los Angeles, California. The Marriott LAX Property is situated on an approximately 10.6-acre parcel located approximately 0.4 miles east of the Los Angeles International Airport (“LAX Airport”). The Marriott LAX Property was built in 1973 and comprises three structures totaling 665,000 SF. The Marriott LAX Property is currently undergoing an approximately $46.5 million property improvement plan (“PIP”) that is expected to be completed in October 2017. The Marriott LAX Property features three restaurants, a bar, a lobby lounge, concierge club, gift shop, outdoor pool and spa, fitness center, FedEx business center, Starbucks, Hertz Rental Car and 49,000 SF of meeting space. The Marriott LAX Property contains 356 standard king rooms, 429 double/double rooms, 121 king suites, 46 standard queens, 33 king ADA, 14 double/double ADA and 5 hospitality suites. The Marriott LAX Property offers shuttle service to and from all LAX Airport terminals and offers nightly and weekly parking with 1,314 surface and subterranean garage parking spaces, accounting for a parking ratio of 1.3 spaces per room. According to the appraisal, the demand segmentation for the Marriott LAX Property is 59% transient, 25% contract, and 17% meeting & group. The Marriott LAX operates under a hotel operating agreement with Marriott International, Inc. which expires on September 28, 2040 with two, 10-year extension options. The management agreement automatically renews after the expiration for two periods of 10 years each. |
| ■ | Marriott LAX PIP Budget. The following table identifies the budgeted amounts associated with certain aspects of the PIP renovation for the Marriott LAX Property: |
PIP Budget(1)
| Line Item | Total Cost | Cost Per Room | ||
| Guestrooms | $28,306,000 | $28,193 | ||
| M Club Lounge | $1,500,000 | $1,494 | ||
| Lobby/Great Room | $6,708,000 | $6,681 | ||
| LCD TV Purchase | $1,523,000 | $1,517 | ||
| Miscellaneous Items | $4,444,000 | $4,426 | ||
| Additional Projects | $3,996,000 | $3,980 | ||
| Total Costs | $46,477,000 | $46,292 |
| (1) | As of September 21, 2017, the PIP renovation was approximately 81.1% complete. According to the borrower, the remaining portion of the PIP renovation is expected to be completed in 2017. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| LOAN #6: MARRIOTT LAX |
The following table presents certain information relating to historical Occupancy, ADR and RevPAR at the Marriott LAX Property and its competitive set, as provided in a market report:
Historical Statistics(1)
Marriott LAX Property | Competitive Set | Penetration | ||||||||||
12/31/2014 | 12/31/2015 | 12/31/2016 | TTM 6/30/2017 | 12/31/2014 | 12/31/2015 | 12/31/2016 | TTM 6/30/2017 | 12/31/2014 | 12/31/2015 | 12/31/2016 | TTM | |
| Occupancy | 88.7% | 86.8% | 84.6% | 74.8% | 89.5% | 85.8% | 83.6% | 89.1% | 99.1% | 101.2% | 101.3% | 84.0% |
| ADR | $130.38 | $147.85 | $159.54 | $159.38 | $115.47 | $131.64 | $149.00 | $151.51 | 112.9% | 112.3% | 107.1% | 105.2% |
| RevPAR | $115.67 | $128.33 | $135.04 | $119.29 | $103.40 | $112.94 | $124.54 | $135.04 | 111.9% | 113.6% | 108.4% | 88.3% |
| (1) | Source: Travel Research Report. |
The following table presents certain information relating to the 2016 demand analysis with respect to the Marriott LAX Property based on market segmentation, as provided in the appraisal for the Marriott LAX Property:
2016 Accommodated Room Night Demand(1)
Transient | Meeting and Group | Contract |
| 58.6% | 16.8% | 24.5% |
| (1) | Source: Appraisal. |
| ■ | Operating History and Underwritten Net Cash Flow. The following table presents certain information relating to the historical operating performance and the Underwritten Net Cash Flow, on an aggregate basis and per room, at the Marriott LAX Property: |
Cash Flow Analysis
2014 | 2015 | 2016 | Underwritten | Underwritten | ||||||
| Room Revenue | $42,389,282 | $47,029,458 | $49,621,295 | $49,485,718 | $49,289 | |||||
| Food & Beverage Revenue | 18,153,656 | 16,660,724 | 17,382,768 | 17,335,274 | 17,266 | |||||
| Other Revenue(1) | 6,082,666 | 5,301,256 | 5,251,710 | 5,237,362 | 5,216 | |||||
| Total Revenue | $66,625,604 | $68,991,437 | $72,255,774 | $72,058,354 | $71,771 | |||||
| Room Expense | $14,359,102 | $14,399,814 | $14,319,477 | $14,280,352 | $14,223 | |||||
| Food & Beverage Expense | 14,862,333 | 14,630,663 | 15,378,160 | 15,336,143 | 15,275 | |||||
| Other Expense | 3,582,334 | 2,653,172 | 1,959,821 | 1,954,466 | 1,947 | |||||
| Total Departmental Expense | $32,803,770 | $31,683,648 | $31,657,458 | $31,570,962 | $31,445 | |||||
| Total Undistributed Expense | 15,948,430 | 16,207,792 | 17,783,601 | 17,735,012 | 17,664 | |||||
| Total Fixed Charges | 2,867,903 | 2,577,946 | 2,613,120 | 2,673,518 | 2,663 | |||||
| Total Operating Expenses | $51,620,102 | $50,469,387 | $52,054,178 | $51,979,491 | $51,772 | |||||
| Net Operating Income | $15,005,502 | $18,522,050 | $20,201,595 | $20,078,862 | $19,999 | |||||
| FF&E | 0 | 0 | 0 | 3,602,918 | 3,589 | |||||
| Net Cash Flow | $15,005,502 | $18,522,050 | $20,201,595 | $16,475,945 | $16,410 | |||||
| Occupancy | 88.7% | 86.8% | 84.6% | 84.6% | ||||||
| NOI Debt Yield(2) | 10.3% | 12.7% | 13.9% | 13.8% | ||||||
| NCF DSCR(2) | 1.57x | 1.94x | 2.11x | 1.72x |
| (1) | Other Revenue includes gift shop income, parking income, guest transportation services, and many other miscellaneous fees. |
| (2) | NOI Debt Yield and NCF DSCR are based on the Marriott LAX Loan Combination balance. |
| ■ | Appraisal. According to the appraisal, the Marriott LAX Property has an “as-complete” appraised value of $300,800,000, which represents the appraised value of the Marriot LAX Property as of February 1, 2018 assuming completion of the property improvement plan. In addition, the appraiser concluded to an “as-is” appraised value of $257,000,000 as of February 1, 2017. |
| ■ | Environmental Matters. According to a Phase I environmental report dated February 14, 2017, the following recognized environmental condition exists at the Marriott LAX Property: the existence of soil and groundwater contamination (likely from an off-site source) with the potential for vapor intrusion at the hotel. At loan closing, the borrower covenanted to either (i) conduct a vapor intrusion study and, if necessary based on the results, install a vapor mitigation system or (ii) not conduct a study and install a vapor mitigation system to address a worst-case |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| LOAN #6: MARRIOTT LAX |
scenario. In addition, the borrower deposited an upfront escrow of $50,000 to cover the cost of such work and provided lender with a secured creditor environmental insurance policy from Steadfast Insurance Company with a $3,000,000 limit, $25,000 deductible and 10-year term with a 3-year reporting tail.
The Marriott LAX Loan Combination documents do not require earthquake insurance. The seismic report indicated a probable maximum loss of 18.0%.
| ■ | Market Overview and Competition. The Marriott LAX Property is located in Los Angeles, California, at the northeast corner of Century Boulevard and Airport Boulevard, located 0.4 miles east of the LAX Airport. The LAX Airport reported 80,921,527 passengers in 2016, which was an approximately 8% increase year over year and ranks 5th in the world and 4th in the United States in terms of passengers accommodated. In addition, the LAX Airport handles 71% of the passengers, 75% of the air cargo and 95% of the international passengers and cargo traffic in the six-county southern California region. The LAX Airport is undergoing an approximately $14 billion renovation and rebuild project of the entire airport to be completed by 2023 while over 20 projects in development include terminal improvements and upgrades, roadway improvements, runway and taxiway rehabilitation and improvement, and utilities and infrastructure components. The immediate area is characterized by airport-related uses including hotels, car rental facilities, airline reservation centers, distribution warehouses, air freight cargo, and commercial and office properties. |
The Marriott LAX Property is located approximately 1.0 mile west of the San Diego Freeway (I-405) and approximately 2.9 miles southwest of Inglewood which is where the Los Angeles Rams and Los Angeles Chargers of the National Football League are building their new stadium. According to a third party market report, the estimated 2016 population within a one-, three- and five-mile radius of the Marriott LAX Property was 15,644, 240,748 and 649,549, respectively; the estimated 2016 average household income within a one-, three- and five-mile radius was $55,087, $77,365 and $88,223, respectively. A third party hospitality research report identified 5 other hotels within the Marriott LAX Property’s competitive set. Average daily rate for the competitive set has improved from $115.47 for the trailing twelve month period ending December 2014 to $149.00 for the trailing twelve month period ending December 2016, while occupancy dipped slightly, from 89.5% to 83.6% over the same period. As a result, revenue per available room (“RevPAR”) for the competitive set has improved from $103.40 to $124.54 over the same period.
The following table presents certain information related to the competitive properties identified in the appraisal for the Marriott LAX Property:
Marriott LAX Property Competitive Set(1)
Property | Year | Number of Rooms(2) | Distance (in miles) | Appraiser’s Estimated 2016 Occupancy | Appraiser’s Estimated 2016 ADR | Appraiser’s Estimated 2016 RevPAR | ||||||
| Marriott LAX Property | 1973 | 1,004 | — | 84.6% | $159.54 | $135.04 | ||||||
| Hilton LAX | 1983 | 1,234 | 0.0 | 90.0% | $149.00 | $134.10 | ||||||
| Westin LAX | 1986 | 740 | 0.6 | 95.0% | $152.00 | $144.40 | ||||||
| Sheraton Gateway LAX | 1981 | 803 | 0.4 | 78.0% | $163.00 | $127.14 | ||||||
Hyatt Regency LAX | 1975 | 580 | 1.5 | 52.0% | $142.00 | $73.84 | ||||||
| Total / Wtd. Avg. | 3,357 | 81.7% | $151.80 | $124.29 |
| (1) | Source: Appraisal. |
| (2) | Total Number of Rooms excludes rooms at the Marriott LAX Property. |
| ■ | The Borrower. The borrower is XLD LAX Owner, LLC, a Delaware limited liability company and single purpose entity with two independent directors. Legal counsel to the borrower delivered a non-consolidation opinion in connection with origination of the Marriott LAX Loan Combination. XLD Group N.A. Real Estate Development, Inc. (“XLD Group”) is the guarantor of certain non-recourse carveouts under the Marriott LAX Loan Combination. |
XLD Group was founded by Zhang Jun in 1997. Mr. Jun has been the CEO/COO since inception and is also CEO of Shanghai Yudu Real Estate Development Co., LTD. The XLD Group is involved in various industries including real estate investment, property development, eco-tourism, home improvement and construction projects, forestry and consulting services. The XLD Group also owns the Torrance Marriott Redondo Beach, which they acquired for approximately $74 million in November 2013. The Torrance Marriott Redondo Beach was its first investment outside of China.
| ■ | Escrows.At loan closing, $12,975,832 was deposited by the borrower into the Marriott LAX FF&E Reserve (defined below) to fully fund the expected costs of the ongoing PIP and $50,000 was deposited by the borrower into an environmental reserve with the lender related to potential vapor intrusion. The Marriott LAX Loan Combination |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| LOAN #6: MARRIOTT LAX |
documents do not require ongoing monthly deposits for tax and insurance reserves as long as the Marriott LAX Property continues to pay taxes and insurance directly. The Marriott LAX Loan Combination documents do not require ongoing deposits for FF&E reserves as long as the Marriott LAX Property continues to maintain a reserve with Marriott LAX Manager (defined below) for performance of FF&E work. In the event at any time deposits in the Marriott LAX FF&E Reserve are insufficient to pay in full the estimated cost of any required PIP work, the borrower is required to deposit with lender an amount equal to (i) 115% of the estimated cost to complete such PIP work, less (ii) the amounts allocated in the Marriott LAX FF&E Reserve to complete such work. The Marriott LAX FF&E Reserve is held by Marriott LAX Manager under its management agreement with the borrower. The lender has a security interest in the Marriott LAX FF&E Reserve which it may foreclose upon if the management agreement is no longer in effect.
Throughout the term of the Marriott LAX Loan Combination, the borrower is required to make monthly deposits in the seasonality reserve in an amount equal to the lesser of the excess cash flow available after debt service or 20% of the seasonality cap of $475,000. If on the October payment date of each calendar year the seasonality reserve balance is less than $475,000, all excess cash flow will thereafter be swept monthly into that account until the required $475,000 balance is achieved. The borrower may request a redetermination of the need for a seasonality reserve up to one time per calendar year and if the lender determines that a shortfall to pay monthly debt service did not exist during the preceding 12 months, remaining funds in the seasonality reserve will be released to the borrower and no further monthly deposits shall be required.
| ■ | Lockbox and Cash Management. The Marriott LAX Loan Combination requires a lender-controlled hard lockbox account (the “Marriott LAX Loan Combination Lockbox”) which is already in place. Marriott Hotel Services, Inc. (the “Marriott LAX Manager”), under its management agreement with the borrower, collects all revenues generated by the Marriott LAX Property and pays all property expenses, makes deposits into a reserve held by the Marriott LAX Manager (the “Marriott LAX FF&E Reserve”) for FF&E and any property improvement plan (including the current PIP) and pays various fees payable to the Marriott LAX Manager and its affiliates. All excess cash flow after making such payments is required to be directed by the Marriott LAX Manager to the Marriott LAX Loan Combination Lockbox. Prior to the occurrence of a Marriott LAX Cash Trap Event Period, all excess cash flow in the Marriott LAX Loan Combination Lockbox after payment of all sums due and payable under the Marriott Lax Loan Combination documents will be remitted to the borrower. During a Marriott LAX Cash Trap Event Period, all excess cash flow in the Marriott LAX Loan Combination Lockbox after payment of all sums due and payable under the Marriott LAX Loan Combination documents will be retained by the lender as additional collateral. |
A“Marriott LAX Cash Sweep Event Period” will commence upon the earlier of (i) the occurrence and continuance of an event of default; (ii) the net cash flow debt service coverage ratio falling below 1.40x, (iii) the delivery of notice by the Marriott LAX Manager of any breach or default by the borrower that, with the passage of time and/or delivery of notice, permits the Marriott LAX Manager to terminate or cancel the hotel management agreement or (iv) the occurrence of an event of default by the borrower or the Marriott LAX Manager under the hotel operating agreement. A Marriott LAX Cash Trap Event Period will end, with regard to clause (i), upon the cure of such event of default; with regard to clause (ii), upon the net cash flow debt service coverage ratio being at least 1.40x for two consecutive calendar quarters, with regard to clause (iii), upon receipt of satisfactory evidence that the borrower has cured the default under the hotel management agreement or entered into a replacement hotel management agreement and with regard to clause (iv), the date on which lender has received satisfactory evidence that the hotel management agreement is in full force and effect with no default thereunder or borrower has entered into a replacement hotel management agreement.
| ■ | Property Management. The Marriott LAX Property is managed by Marriott International, Inc. |
| ■ | Mezzanine or Subordinate Indebtedness. Not permitted. |
| ■ | Release of Collateral. Not permitted. |
| ■ | Terrorism Insurance.The Marriott LAX Loan Combination documents require that the “all risk” insurance policy required to be maintained by the borrower provide coverage for terrorism in an amount equal to 100% of the full replacement cost of the Marriott LAX Property. The Marriott Lax Loan Combination documents also require business interruption insurance covering no less than the 24-month period following the occurrence of a casualty event, together with a 12-month extended period of indemnity. See “Risk Factors—Terrorism Insurance May Not Be Available for All Mortgaged Properties” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #7: Hyatt regency louisville |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #7: Hyatt regency louisville |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #7: Hyatt regency louisville |
| Mortgaged Property Information | Mortgage Loan Information | ||||
| Number of Mortgaged Properties | 1 | Loan Seller | GACC | ||
| Location (City/State) | Louisville, Kentucky | Cut-off Date Balance | $38,540,000 | ||
| Property Type | Hospitality | Cut-off Date Balance per Room | $98,066.16 | ||
| Size (Rooms) | 393 | Percentage of Initial Pool Balance | 3.9% | ||
| Total TTM Occupancy as of 3/31/2017 | 68.6% | Number of Related Mortgage Loans | None | ||
| Owned TTM Occupancy as of 3/31/2017 | 68.6% | Type of Security | Fee Simple | ||
| Year Built / Latest Renovation | 1978 / 2016 | Mortgage Rate | 4.04000% | ||
| Appraised Value(1) | $70,500,000 | Original Term to Maturity (Months) | 120 | ||
| Appraisal Date | 5/1/2018 | Original Amortization Term (Months) | 360 | ||
| Borrower Sponsor | Pios Grande Holdings LLC | Original Interest Only Period (Months) | 84 | ||
| Property Management | Aimbridge Hospitality, LLC | First Payment Date | 8/6/2017 | ||
| Maturity Date | 7/6/2027 | ||||
| Underwritten Revenues | $22,016,115 | ||||
| Underwritten Expenses | $16,175,608 | ||||
| Underwritten Net Operating Income (NOI) | $5,840,507 | Escrows(2) | |||
| Underwritten Net Cash Flow (NCF) | $4,739,701 | Upfront | Monthly | ||
| Cut-off Date LTV Ratio(1) | 54.7% | Taxes | $390,781 | $48,848 | |
| Maturity Date LTV Ratio(1) | 51.8% | Insurance | $0 | $0 | |
| DSCR Based on Underwritten NOI / NCF | 2.63x / 2.14x | FF&E(3) | $0 | $90,694 | |
| Debt Yield Based on Underwritten NOI / NCF | 15.2% / 12.3% | Other(4) | $3,047,794 | $0 | |
| Sources and Uses | ||||||
| Sources | $ | % | Uses | $ | % | |
| Loan Amount | $38,540,000 | 55.1% | Purchase Price | $65,750,000 | 94.1% | |
| Principal’s New Cash Distribution | $31,366,905 | 44.9 | Reserves | 3,438,575 | 4.9 | |
| Closing Costs | 718,329 | 1.0 | ||||
| Total Sources | $69,906,905 | 100.0% | Total Uses | $69,906,905 | 100.0% | |
| (1) | The Appraised Value represents the “as-complete” appraised value, as of May 1, 2018, which assumes the completion of the approximately $3.0 million PIP. The “as-is” appraised value for the Hyatt Regency Louisville Property is $66,500,000 as of May 1, 2017. Based on the “as-is” appraised value, the Cut-off Date LTV Ratio and Maturity Date LTV Ratio are 58.0% and 54.9%, respectively. In addition, the appraiser provided an “as-stabilized” appraised value of $73,000,000, as of May 1, 2019, which assumes a stabilized occupancy and ADR of 72.0% and $178.36, respectively. Based on the “as-stabilized” appraised value, the Maturity Date LTV Ratio is 50.0%. |
| (2) | See “—Escrows” below. |
| (3) | The Hyatt Regency Louisville Loan documents require deposits into the FF&E Reserve on each monthly payment date in an amount equal to the greatest of (i) 5.0% of the projected rents for the prior month as set forth in the most recent approved annual budget, (ii) the then-current amount required by the hotel management agreement or (iii) the then-current amount required by the franchise agreement for approved capital expenditures and the repair and replacement of furniture, fixtures and equipment (“FF&E”) (initially $90,694, based on the borrower’s budget). |
| (4) | Other upfront escrows include $3,008,794 upfront for a property improvement plan (“PIP”) and $39,000 for deferred maintenance, which represents 120% of the recommended amount from the property condition report. |
| ■ | The Mortgage Loan.The mortgage loan (the “Hyatt Regency Louisville Loan”) is secured by a first mortgage encumbering the borrower’s fee simple interest in a 393-room full service hotel located in Louisville, Kentucky (the “Hyatt Regency Louisville Property”). The Hyatt Regency Louisville Loan had an original principal balance of $38,540,000, has an outstanding balance as of the Cut-off Date of $38,540,000 and represents 3.9% of the Initial Pool Balance. The Hyatt Regency Louisville Loan, which has an interest rate of 4.04000%per annum, was originated by Deutsche Bank AG, acting through its New York Branch (“DBNY”) (an affiliate of German American Capital Corporation) on June 29, 2017. The proceeds of the Hyatt Regency Louisville Loan, along with approximately $31.37 million of equity contributed by the sponsor, were used to acquire the Hyatt Regency Louisville Property for $65.75 million, fund reserves and pay origination costs. |
The Hyatt Regency Louisville Loan had an initial term of 120 months, has a remaining term of 117 months as of the Cut-off Date and requires monthly payments of interest only through the due date in July 2024, after which it requires monthly payments of principal and interest based on a 30-year amortization schedule. The scheduled maturity date of the Hyatt Regency Louisville Loan is the due date in July 2027. On or after the due date in August 2019 and prior to the due date in March 2027, the Hyatt Regency Louisville Loan may be prepaid in whole only, together with all unpaid interest accrued to the date of prepayment (or if prepayment is not made on a due date, interest accrued for the full interest period in which the prepayment date falls), and a prepayment fee equal to the greater of (x) 1.00% of the amount being prepaid and (y) a yield maintenance premium. In addition, voluntary prepayment of the Hyatt Regency Louisville Loan, in whole only, together with accrued interest as described above, but without a prepayment premium or yield maintenance charge, is permitted on or after the due date in March 2027.
| ■ | The Mortgaged Property. The Hyatt Regency Louisville Property is a full service hotel containing 393 rooms located in Louisville, Kentucky. The 19-story hotel building is situated on a 0.85 acre site along South 4th Street in Downtown Louisville. The Hyatt Regency Louisville Property operates under a Hyatt Franchising, L.L.C. (“Hyatt”) franchise agreement that expires in June 2037. The Hyatt Regency Louisville Property is the only full service Hyatt branded hotel in Louisville, Kentucky. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #7: Hyatt regency louisville |
The Hyatt Regency Louisville Property was built in 1978 and recently underwent a major renovation under the previous owner, Hyatt, totaling approximately $17.9 million ($45,590 per room) that started in 2014 and extended through 2016. The renovation consisted of a complete guestroom remodel and upgrades to the building’s systems. Prior to 2014, the Hyatt Regency Louisville Property had approximately $13.3 million of capital improvements completed to update the ballroom, meeting rooms, 4th Street entrance, lobby and the restaurant.
| Recent Capital Expenditures | |||
| Year | Amount $ | Per Room | Scope of Renovation |
| 2008 | $1,529,000 | $3,891 | Retail Renovation |
| 2009 | $1,543,000 | $3,926 | Ballroom |
| 2010 | $1,959,000 | $4,985 | Meeting Rooms |
| 2011 | $2,776,000 | $7,064 | 4th Street Entrance |
| 2012 | $4,199,000 | $10,684 | Lobby & Restaurant |
| 2013 | $1,274,000 | $3,242 | 4th Street Entrance |
| 2014 | $1,730,000 | $4,402 | Engineering |
| 2015 | $9,921,000 | $25,244 | Guest Rooms |
| 2016 | $6,266,000 | $15,944 | Guest Rooms |
| Total | $31,197,000 | $79,382 | |
In addition, there is a Hyatt PIP in place requiring investment of an additional approximately $3.0 million primarily to further renovate the meeting spaces, with additional updates to the lobby restrooms, modernization of the parking elevator garages, resurfacing the tennis court and installing motion sensor lighting in the guestrooms. The PIP is generally required to be completed within 12-24 months after the loan origination date. Upon completion of the PIP, a total of approximately $34.2 million ($87,038 per room) will have been spent renovating the Hyatt Regency Louisville Property since 2008.
| Property Improvement Plan | |
| Scope of PIP | Amount $ |
| Public Restrooms | $40,000 |
| Guest / Public Elevators | $250,000 |
| Dining | $1,000 |
| Meeting & Event Space | $1,900,000 |
| Activities & Services | $15,000 |
| Guestroom Experience | $160,000 |
| Miscellaneous | $642,794 |
| Total | $3,008,794 |
The Hyatt Regency Louisville Property features 393 guestrooms comprised of 194 king guestrooms, 189 double/queen guestrooms and 10 suites. The standard guestrooms average approximately 365 SF. All standard guestrooms and suites feature a work desk and chair, one or two nightstands, 65-inch flat screen televisions, a sofa chair, an iron/ironing board, an in-room coffee/tea maker and a temperature control system. Property amenities include the Sway Restaurant & Lounge, a Chipotle, a Starbucks (expected to open by year-end), an indoor pool, outdoor tennis courts, a fitness center, a business center, and 25,528 SF of meeting and event space across 15 rooms, the largest of which is 9,280 SF. In addition, there is a rotating rooftop meeting space, Spire, that can accommodate up to 150 guests. The Hyatt Regency Louisville Property offers 615 parking spaces available for valet and self-parking in the adjacent parking garage. The parking garage is owned by the Kentucky State Fair Board and is leased to the borrower under a parking lease through 2028 with one 20-year extension option remaining. The Hyatt Regency Louisville Property also includes a skybridge connecting it to the Kentucky International Convention Center, which is currently undergoing a renovation estimated to cost approximately $207 million.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #7: Hyatt regency louisville |
The following table presents certain information relating to the 2016 demand analysis with respect to the Hyatt Regency Louisville Property based on market segmentation, as provided in the appraisal for the Hyatt Regency Louisville Property:
2016 Accommodated Room Night Demand(1)
| Property | Commercial | Meeting and Group | Leisure |
| Hyatt Regency Louisville Property | 25% | 55% | 20% |
| Seelbach Hilton Louisville | 40% | 45% | 15% |
| The Brown Hotel | 35% | 40% | 25% |
| The Galt House | 25% | 55% | 20% |
| Louisville Marriott Downtown | 30% | 55% | 15% |
| Embassy Suites Louisville Downtown | 40% | 45% | 15% |
| Hilton Garden Inn Louisville Downtown | 40% | 45% | 15% |
| (1) | Source: Appraisal. |
| ■ | Operating History and Underwritten Net Cash Flow. The following table presents certain information relating to the historical operating performance and the Underwritten Net Cash Flow, on an aggregate basis and per room, at the Hyatt Regency Louisville Property: |
Cash Flow Analysis(1)
2014 | 2015(2) | 2016(2) | TTM 3/31/2017(2) | Underwritten | Underwritten | |||||||
| Room Revenue | $15,784,581 | $14,979,462 | $15,423,709 | $15,454,164 | $15,454,164 | $39,324 | ||||||
| Food & Beverage Revenue | 6,485,269 | 5,890,661 | 5,468,600 | 5,594,202 | 5,594,202 | 14,235 | ||||||
| Other Revenue | 824,573 | 795,577 | 851,547 | 866,602 | 967,749 | 2,462 | ||||||
| Total Revenue | $23,094,423 | $21,665,700 | $21,743,856 | $21,914,968 | $22,016,115 | $56,021 | ||||||
| Room Expense | $3,854,819 | $3,539,291 | $3,644,824 | $3,609,060 | $3,609,060 | $9,183 | ||||||
| Food & Beverage Expense | 4,368,859 | 4,105,149 | 4,018,373 | 3,914,510 | 3,914,510 | 9,961 | ||||||
| Other Expense | 538,009 | 487,643 | 489,386 | 501,526 | 512,259 | 1,303 | ||||||
| Total Departmental Expense | 8,761,687 | 8,132,083 | 8,152,583 | 8,025,096 | 8,035,829 | 20,447 | ||||||
| Total Undistributed Expense | 6,696,914 | 6,553,873 | 6,625,936 | 6,652,049 | 7,452,897 | 18,964 | ||||||
| Total Fixed Charges | 764,327 | 766,404 | 767,423 | 765,397 | 686,882 | 1,748 | ||||||
| Total Operating Expenses | $16,222,928 | $15,452,360 | $15,545,942 | $15,442,541 | $16,175,608 | $41,159 | ||||||
| Net Operating Income | $6,871,495 | $6,213,340 | $6,197,914 | $6,472,427 | $5,840,507 | $14,861 | ||||||
| FF&E | 923,777 | 866,628 | 869,754 | 876,599 | 1,100,806 | 2,801 | ||||||
| Net Cash Flow | $5,947,718 | $5,346,712 | $5,328,160 | $5,595,827 | $4,739,701 | $12,060 | ||||||
| Occupancy | 76.4% | 67.1% | 67.6% | 68.6% | 68.6% | |||||||
| NOI Debt Yield | 17.8% | 16.1% | 16.1% | 16.8% | 15.2% | |||||||
| NCF DSCR | 2.68x | 2.41x | 2.40x | 2.52x | 2.14x |
| (1) | Certain items such as interest expense, interest income, depreciation, amortization, debt service payments and any other non-recurring or non-operating items were excluded from the historical presentation and are not considered for the underwritten cash flow. |
| (2) | The Hyatt Regency Louisville Property was undergoing a renovation from October 2015 until March 2016, which caused some room displacement. In addition, the Kentucky International Convention Center, connected to the hotel via a skybridge, began its renovation in August 2016. |
| ■ | Appraisal.According to the appraisal, the Hyatt Regency Louisville Property had an “as-is” appraised value of $66,500,000 as of May 1, 2017. The “as complete” appraised value is $70,500,000 as of May 1, 2018. The “as complete” value assumes the completion of the approximately $3.0 million PIP, which was reserved in full at origination. In addition, the appraiser provided an “as-stabilized” appraised value of $73,000,000, as of May 1, 2019, which assumes a stabilized occupancy and ADR of 72.0% and $178.36, respectively. |
| Appraisal Approach | Value | Discount Rate | Terminal Capitalization Rate | |||
| Discounted Cash Flow Approach(1) | $66,300,000 | 11.00% | 9.96% | |||
| Discounted Cash Flow Approach(2) | $70,600,000 | 11.00% | 9.97% | |||
| Discounted Cash Flow Approach(3) | $73,000,000 | 11.00% | 9.99% |
| (1) | Based on the “as-is” appraised value assumptions. |
| (2) | Based on the “as complete” appraised value assumptions. |
| (3) | Based on the “as stabilized” appraised value assumptions. |
| ■ | Environmental Matters. The Phase I environmental report, dated June 26, 2017, recommended the implementation of an asbestos O&M plan, which is currently in place. In addition, a limited Phase II investigation was conducted with |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #7: Hyatt regency louisville |
respect to a dry cleaner formerly located at the Hyatt Regency Louisville Property. Three soil samples were collected in April 2017 in the area of the former dry cleaner that showed acetone and tetrachloroethylene at levels above detection limits in soil. However, the samples did not exceed respective regional screening levels for resident and composite workers. Based on the results of the soil gas and indoor air sampling, the environmental site assessment did not identify the former dry cleaner as a recognized environmental condition and recommended no further action. The Phase II environmental report, dated May 3, 2017, also recommended no further action. |
| ■ | Market Overview and Competition. The Hyatt Regency Louisville Property is located in downtown Louisville adjacent to the Kentucky International Convention Center and the immediate area surrounding the Hyatt Regency Louisville Property includes Fourth Street Live!, a 350,000 SF entertainment and retail complex, KFC Yum! Center, a multi-purpose sports arena that is home to the University of Louisville’s basketball teams, Churchill Downs, home of the Kentucky Derby, Louisville Slugger Field, and the Louisville Zoo. The Louisville International Airport is located approximately five miles from the Hyatt Regency Louisville Property. |
The overall segmentation of the Hyatt Regency Louisville Property is 25.0% commercial, 55.0% meeting and group and 20.0% leisure as reflected in the “2016 Accommodated Room Night Demand” table above. According to the appraisal, the hotel demand in the market is split between transient guests and group/corporate business. The Hyatt Regency Louisville Property is surrounded by numerous office towers with notable tenants such as Humana, JPMorgan Chase, UPS, BB&T, Republic Bank & Trust, and Norton Healthcare.
The Kentucky International Convention Center, connected to the Hyatt Regency Louisville Property via skybridge, is a multi-purpose facility that consists of 140,000 SF of flexible, divisible exhibit space, including 30,000 SF of ballroom space, 51 meeting rooms, and a 175-person conference theatre. The Kentucky International Convention Center closed in August 2016 to undergo an approximately $207 million renovation with plans to finish by the summer of 2018. The renovation is anticipated to increase exhibit space by more than one-third, to over 200,000 SF. Additionally, the Kentucky Exposition Center is located in Louisville adjacent to the Louisville International Airport and is the nation’s sixth largest convention center. The center consists of approximately 1.2 million SF of indoor space including 54 flexible meeting rooms ranging in size from 590 SF to a maximum of 25,000 SF, Freedom Hall which has a capacity of 19,169 people, and Broadbent Arena which has a capacity of 6,600 people. The Kentucky Exposition Center has approximately 19,000 lighted parking spaces and approximately 13,000 hotel rooms within a close vicinity.
The appraiser identified two hotel projects, totaling 927 rooms, which are under construction that are directly competitive with the Hyatt Regency Louisville Property. A 30-story, 612-room Omni Hotel is under construction at 400 2nd Street, less than a half mile east of the Hyatt Regency Louisville Property with an estimated completion date in April 2018. In addition, a dual branded Westin/Moxy Hotel is proposed for a site at 101 West Main Street. The hotel is expected to consist of a 110-room Moxy Hotel and a 205-room Westin Hotel with separate entrances and has an estimated completion date in 2019. The Omni Hotel and Westin/Moxy Hotel are expected to operate at higher average daily rates than the Hyatt Regency Louisville Property. The appraiser also identified six non-competitive hotel projects, totaling 657 rooms, which either recently opened or are currently under construction. Given the differences in product-type, amenities, facilities and ADR-positioning, the appraiser did not anticipate these hotels to be directly competitive with the Hyatt Regency Louisville Property.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #7: Hyatt regency louisville |
The following table presents certain information relating to historical occupancy, ADR and RevPAR at the Hyatt Regency Louisville Property and its competitive set, as provided in a market research report for the Hyatt Regency Louisville Property:
Historical Statistics
Hyatt Regency Louisville | Competitive Set | Penetration | ||||||||||||||||
2015(1) | 2016(1) | TTM | 2015(1) | 2016(1) | TTM | 2015(1) | 2016(1) | TTM | ||||||||||
| Occupancy | 67.1% | 67.6% | 66.9% | 65.8% | 65.8% | 62.6% | 101.9% | 102.8% | 106.9% | |||||||||
| ADR | $155.66 | $158.67 | $157.63 | $153.90 | $154.99 | $159.07 | 101.1% | 102.4% | 99.1% | |||||||||
| RevPAR | $104.43 | $107.23 | $105.48 | $101.34 | $101.92 | $99.55 | 103.0% | 105.2% | 106.0% | |||||||||
| (1) | Source: December 2016 travel research report. The competitive set contains the following properties: Seelbach Hilton Louisville, The Brown Hotel, The Galt House and the Louisville Marriott Downtown. |
| (2) | Source: July 2017 travel research report. The competitive set contains the following properties: Seelbach Hilton Louisville, The Brown Hotel, The Galt House, Louisville Marriott Downtown, Embassy Suites Louisville Downtown and Hilton Garden Inn Louisville Downtown. |
Hyatt Regency Louisville Property Competitive Set(1)
| Property | Number of Rooms | Year Built | ||
| Hyatt Regency Louisville | 393 | 1978 | ||
| Seelbach Hilton Louisville | 321 | 1905 | ||
| The Brown Hotel | 293 | 1920 | ||
| The Galt House | 1,239 | 1985 | ||
| Louisville Marriott Downtown | 616 | 2005 | ||
| Embassy Suites Louisville Downtown | 304 | 2015 | ||
| Hilton Garden Inn Louisville Downtown | 162 | 2014 | ||
| Total(2) | 2,935 |
| (1) | Source: July 2017 travel research report. |
| (2) | Total excludes the Hyatt Regency Louisville Property. |
| ■ | The Borrower. The borrower is Pios Grande Louisville HR LLC, a single purpose, single asset entity with two independent directors. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Hyatt Regency Louisville Loan. The non-recourse carve-out guarantor is Pios Grande Holdings LLC, a company involved in the investment, management and development of commercial real estate for approximately 30 years. Pios Grande Holdings LLC is managed by Rocco A. Abessinio, founder and CEO of Roch Capital Inc. Roch Capital Inc. is a Philadelphia based private investment firm that invests in hospitality, office, medical, apartments, student housing, and land for development. They currently own and manage approximately 707,000 SF of office space in Delaware, Florida, and Pennsylvania, as well as 823 rooms of hospitality space, not including the Hyatt Regency Louisville Property, across two hotels in Florida and Maryland. |
| ■ | Escrows.On the origination date, the borrower funded reserves of (i) $390,781 into a tax reserve account, (ii) $3,008,794 into a PIP reserve account and (iii) $39,000 into a deferred maintenance reserve account. |
On each due date, the borrower is required to fund (i) a tax reserve in an amount equal to one-twelfth of the amount lender estimates will be necessary to pay taxes over the then succeeding 12-month period (initially $48,848), (ii) an insurance reserve in an amount equal to one-twelfth of the amount the lender estimates will be necessary to pay insurance premiums over the then succeeding 12-month period, however, the monthly insurance reserve deposit is waived if the borrower is maintaining blanket insurance policies in accordance with the Hyatt Regency Louisville Loan documents and (iii) a reserve for FF&E, in an amount equal to the greatest of (a) 5.0% of the projected rents for the prior month as set forth in the most recent approved annual budget, (b) the then-current amount required by the hotel management agreement or (c) the then-current amount required by the franchise agreement for approved capital expenditures and the repair and replacement of FF&E.
| ■ | Lockbox and Cash Management. The Hyatt Regency Louisville Loan is structured with a hard lockbox and springing cash management. All credit card receipts are required to be transmitted directly by the tenant or credit card issuer into a lender-controlled lockbox account and all other money received by the borrower with respect to the Hyatt Regency Louisville Property is required to be deposited into such lockbox account within one business day following receipt. Unless a Hyatt Regency Louisville Trigger Period (as defined below) is continuing, all amounts on deposit in the lockbox account are required to be swept daily into the borrower’s operating account. During the continuance of a Hyatt Regency Louisville Trigger Period, all amounts on deposit in the lockbox account are required to be swept daily into an account controlled by the lender and applied, provided that no event of default is continuing under the Hyatt |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #7: Hyatt regency louisville |
Regency Louisville Loan, to the payment of debt service, the funding of required reserves, and budgeted monthly operating expenses, approved extraordinary expenses and all remaining cash flow is required to be deposited into an account to be held as additional security for the Hyatt Regency Louisville Loan during the continuance of such Hyatt Regency Louisville Trigger Period.
A “Hyatt Regency Louisville Trigger Period” will commence upon the occurrence of (i) an event of default or (ii) a Hyatt Regency Louisville Low Debt Service Period (as defined below) and will continue until, (a) in the case of clause (i), a cure of such event of default has been accepted by the lender and (b) in the case of clause (ii), the Hyatt Regency Louisville Low Debt Service Period has ended.
A “Hyatt Regency Louisville Low Debt Service Period” occurs if the amortizing net cash flow debt service coverage ratio is less than 1.25x for any calendar quarter, until such time that the debt service coverage ratio is at least 1.30x for two consecutive calendar quarters.
| ■ | Property Management.The Hyatt Regency Louisville Property is subject to a hotel management agreement with Aimbridge Hospitality, LLC. |
| ■ | Mezzanine or Subordinate Indebtedness. Not permitted. |
| ■ | Release of Collateral. Not Permitted. |
| ■ | Terrorism Insurance. The borrower is required to maintain an “all-risk” insurance policy that provides coverage for terrorism in an amount equal to the full replacement cost of the Hyatt Regency Louisville Property. For so long as TRIPRA is in effect and continues to cover both foreign and domestic acts, the lender is required to accept terrorism insurance with coverage against acts which are “certified” within the meaning of TRIPRA. See “Risk Factors—Terrorism Insurance May Not Be Available for All Mortgaged Properties” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #8: CORPORATE WOODS PORTFOLIO
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #8: CORPORATE WOODS PORTFOLIO
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #8: CORPORATE WOODS PORTFOLIO
| Mortgaged Property Information | Mortgage Loan Information | ||||
| Number of Mortgaged Properties | 16 | Loan Seller | CREFI | ||
| Location (City/State) | Overland Park, Kansas | Cut-off Date Balance(3) | $35,577,660 | ||
| Property Type | Various | Cut-off Date Balance per SF(2) | $108.68 | ||
| Size (SF) | 2,033,179 | Percentage of Initial Pool Balance | 3.6% | ||
| Total Occupancy as of 5/31/2017 | 92.7% | Number of Related Mortgage Loans | None | ||
| Owned Occupancy as of 5/31/2017 | 92.7% | Type of Security | Fee Simple | ||
| Year Built / Latest Renovation | Various | Mortgage Rate | 4.45000% | ||
| Appraised Value(1) | $299,100,000 | Original Term to Maturity (Months) | 120 | ||
| Appraisal Date(1) | 6/15/2017 | Original Amortization Term (Months) | 360 | ||
| Borrower Sponsor | Raymond Massa | Original Interest Only Period (Months) | NAP | ||
| Property Management | Block Real Estate Services, LLC | First Payment Date | 10/6/2017 | ||
| Maturity Date | 9/6/2027 | ||||
| Underwritten Revenues | $45,713,777 | ||||
| Underwritten Expenses | $23,101,714 | Escrows(4) | |||
| Underwritten Net Operating Income (NOI) | $22,612,063 | Upfront | Monthly | ||
| Underwritten Net Cash Flow (NCF) | $19,853,093 | Taxes | $6,258,114 | $625,811 | |
| Cut-off Date LTV Ratio(1)(2) | 73.9% | Insurance | $0 | $0 | |
| Maturity Date LTV Ratio(1)(2) | 59.7% | Replacement Reserve | $0 | $38,258 | |
| DSCR Based on Underwritten NOI / NCF(2) | 1.69x / 1.48x | TI/LC(5) | $7,500,000 | $0 | |
| Debt Yield Based on Underwritten NOI / NCF(2) | 10.2% / 9.0% | Other(6) | $2,101,654 | $0 | |
| Sources and Uses | ||||||||
| Sources | $ | % | Uses | $ | % | |||
| Loan Combination Amount | $221,250,000 | 73.8% | Purchase Price | $280,000,000 | 93.5% | |||
| Principal’s New Cash Contribution | 69,445,915 | 23.2 | Reserves | 15,859,767 | 5.3 | |||
| Other Sources(7) | 8,908,267 | 3.0 | Closing Costs | 3,193,771 | 1.1 | |||
| Other Uses | 550,644 | 0.2 | ||||||
| Total Sources | $299,604,182 | 100.0% | Total Uses | $299,604,182 | 100.0% | |||
| (1) | The Appraised Value represents the “As Portfolio” bulk appraised value as of June 15, 2017, which is inclusive of a $3,600,000 portfolio premium. The Cut-off Date LTV Ratio and Maturity Date LTV Ratio are calculated based upon the Appraised Value of $299,100,000. The Cut-off Date LTV Ratio and Maturity Date LTV Ratio based on the sum of the individual “as-is” appraised values of the Corporate Woods Portfolio Properties (as defined below) of $295,500,000, which excludes the portfolio premium, are 74.8% and 60.4%, respectively. |
| (2) | Calculated based on the aggregate outstanding principal balance of the Corporate Woods Portfolio Loan Combination (as defined below). |
| (3) | The Cut-off Date Balance of $35,577,660 represents the non-controlling note A-2 of the $221,250,000 Corporate Woods Portfolio Loan Combination, which is evidenced by sixpari passu notes and was co-originated by Citi Real Estate Funding Inc. (“CREFI”) and Morgan Stanley Bank, N.A. (“MSBNA”). The related companion loans are evidenced by (i) the controlling note A-1-A and non-controlling note A-3, which have an aggregate outstanding principal balance as of the Cut-off Date of $49,933,557 and were contributed to the CGCMT 2017-P8 securitization transaction, (ii) the non-controlling note A-1-B, which has an outstanding principal balance as of the Cut-off Date of $24,966,779, is currently held by CREFI and is expected to be contributed to one or more future commercial mortgage securitization transactions, (iii) the non-controlling note A-4, which has an outstanding principal balance as of the Cut-off Date of $70,531,150 and was contributed to the BANK 2017-BNK7 securitization transaction and (iv) the non-controlling note A-5, which has an outstanding principal balance as of the Cut-off Date of $39,946,846, is currently held by MSBNA and is expected to be contributed to the MSBAM 2017-C34 securitization transaction. See“—The Mortgage Loan” below. |
| (4) | See“—Escrows” below. |
| (5) | The TI/LC reserve is capped at $7,500,000. The borrower is not required to make an ongoing TI/LC reserve deposit unless the TI/LC reserve account balance falls below the TI/LC minimum balance of $5,000,000, after which, on each monthly payment date, the borrower must make an ongoing TI/LC reserve deposit equal to $169,428 until the TI/LC reserve balance equals or exceeds the TI/LC Cap of $7,500,000. |
| (6) | Upfront Other reserves include a reserve for unfunded tenant obligations ($1,481,165) and deferred maintenance ($620,488). |
| (7) | Other Sources are comprised of real estate tax prorations ($4,255,153), prepaid rent ($2,791,756), security deposits ($1,711,995) and various other credits ($149,363) that were transferred to the purchaser on the origination date of the Corporate Woods Portfolio Loan Combination (as defined below). |
| ■ | The Mortgage Loan. The mortgage loan (the“Corporate Woods Portfolio Loan”) is part of a loan combination (the“Corporate Woods Portfolio Loan Combination”) evidenced by sixpari passu notes that are together secured by a first mortgage encumbering the borrower’s fee simple interest in 15 office buildings and one retail building, located in an office complex, totaling 2,033,179 SF located in Overland Park, Kansas (the“Corporate Woods Portfolio Properties”). The Corporate Woods Portfolio Loan, which is evidenced by the non-controlling note A-2, had an original principal balance of $35,625,000, has an outstanding principal balance as of the Cut-off Date of $35,577,660 and represents approximately 3.6% of the Initial Pool Balance. The related companion loans are evidenced by (i) the controlling note A-1-A and non-controlling note A-3, which have an aggregate outstanding principal balance as of the Cut-off Date of $49,933,557 and were contributed to the CGCMT 2017-P8 securitization transaction, (ii) the non-controlling note A-1-B, which has an outstanding principal balance as of the Cut-off Date of $24,966,779, is currently held by CREFI and is expected to be contributed to one or more future commercial mortgage securitization transactions, (iii) the non-controlling note A-4, which has an outstanding principal balance as of the Cut-off Date of $70,531,150 and was contributed to the BANK 2017-BNK7 securitization transaction and (iv) the non-controlling note A-5, which has an outstanding principal balance as of the Cut-off Date of $39,946,846, is currently held by MSBNA and is expected to be contributed to the MSBAM 2017-C34 securitization transaction. The Corporate Woods Portfolio Loan Combination, which accrues interest at an interest rate of 4.45000%per annum, was co-originated by CREFI and MSBNA on August 9, 2017, had an original principal balance of $221,250,000 and has an outstanding principal balance as of the Cut-off Date of $220,955,991. The proceeds of the Corporate Woods Portfolio Loan Combination were primarily used to acquire the Corporate Woods Portfolio Properties, fund reserves and pay origination costs. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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Note Summary
| Note(s) | Current or Anticipated Holder of Securitized Note | Aggregate Cut-off Date Balance |
Corporate Woods Portfolio Loan | ||
| A-2 | CGCMT 2017-C4 | $35,577,660 |
Corporate Woods Portfolio Pari Passu Companion Loans | ||
| A-1-A and A-3 | CGCMT 2017-P8 | $49,933,557 |
| A-1-B | CREFI(1) | $24,966,779 |
| A-4 | BANK 2017-BNK7 | $70,531,150 |
| A-5 | MSBAM 2017-C34(2) | $39,946,846 |
| (1) | Expected to be contributed to one or more future securitization transactions. |
| (2) | Expected to be contributed to the related securitization transaction upon closing of such securitization transaction. |
The Corporate Woods Portfolio Loan Combination had an initial term of 120 months and has a remaining term of 119 months as of the Cut-off Date. The Corporate Woods Portfolio Loan Combination requires monthly payments of principal and interest for the term of the Corporate Woods Portfolio Loan Combination. The scheduled maturity date of the Corporate Woods Portfolio Loan Combination is the due date in September 2027. At any time after the earlier of August 9, 2020 and the second anniversary of the securitization of the last portion of the Corporate Woods Portfolio Loan Combination, the Corporate Woods Portfolio Loan Combination may be defeased with certain direct full faith and credit obligations of the United States of America or other obligations which are “government securities” permitted under the Corporate Woods Portfolio Loan Combination documents. Voluntary prepayment of the Corporate Woods Portfolio Loan Combination is permitted on or after the due date occurring in April 2027 without payment of any prepayment premium. In the event the lender applies casualty or condemnation proceeds exceeding 30% of the allocated loan amount with respect to a Corporate Woods Portfolio Property, the borrower has the right to prepay a portion of the Corporate Woods Portfolio Loan Combination and obtain the release of the applicable property in accordance with the provisions of the Corporate Woods Portfolio Loan Combination documents.
| ■ | The Mortgaged Properties.The Corporate Woods Portfolio Properties are comprised of 16 buildings located within Corporate Woods, a 29-building master-planned, suburban office park and retail environment in Overland Park, Kansas, located approximately 15 miles southwest of the Kansas City central business district (“CBD”). Of the 16 buildings serving as collateral for the Corporate Woods Portfolio Loan Combination, 15 are Class A or Class B office buildings totaling 2,004,567 SF and one is a 28,612 SF retail shopping center building. A DoubleTree Hotel and six other office buildings are part of Corporate Woods, but are not collateral for the Corporate Woods Portfolio Loan Combination. The Corporate Woods Portfolio Properties were constructed in stages between 1977 and 2001 and prior owners have invested capital into the Corporate Woods Portfolio Properties on an ongoing basis. The Corporate Woods Portfolio Properties are positioned at the southeast corner of Interstate 435 and U.S. Highway 69, are situated on a 160.8-acre site and provide for 7,708 parking spaces, which equates to a ratio of 3.8 spaces per 1,000 SF. As of May 31, 2017, the Corporate Woods Portfolio Properties were 92.7% leased to approximately 280 tenants. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The following table presents certain information related to the individual Corporate Woods Portfolio Properties:
Corporate Woods Portfolio Building Summary
Building | Year Built | Building GLA | Building Occupancy as of 5/31/2017 | Allocated Loan Combination Original Balance | % Allocated Loan Combination Original Balance | Appraised Value | % Appraised Value | Replacement Cost | Appraisal Market Rent $ per SF(1) | UW |
| 82 | 2001 | 245,413 | 98.2% | $34,441,624 | 15.6% | $46,000,000 | 15.6% | $53,145,129 | $27.00 | $27.02 |
| 40 | 1981 | 300,043 | 96.8% | 32,420,051 | 14.7 | 43,300,000 | 14.7 | 47,059,741 | $24.00 | $22.82 |
| 84 | 1998 | 241,573 | 83.1% | 31,596,447 | 14.3 | 42,200,000 | 14.3 | 53,145,129 | $27.00 | $25.33 |
| 32 | 1985 | 208,244 | 98.5% | 23,809,645 | 10.8 | 31,800,000 | 10.8 | 32,034,249 | $24.00 | $21.92 |
| 34 | 1978 | 97,023 | 100.0% | 11,530,457 | 5.2 | 15,400,000 | 5.2 | 14,568,965 | $23.00 | $22.73 |
| 14 | 1981 | 120,385 | 96.7% | 10,781,726 | 4.9 | 14,400,000 | 4.9 | 18,974,570 | $21.50 | $19.79 |
| 70 | 1987 | 100,809 | 94.6% | 10,257,614 | 4.6 | 13,700,000 | 4.6 | 15,137,471 | $23.00 | $24.92 |
| 9 | 1984 | 99,400 | 92.7% | 9,583,756 | 4.3 | 12,800,000 | 4.3 | 15,722,193 | $22.00 | $21.56 |
| 6 | 1979 | 108,395 | 83.8% | 9,508,883 | 4.3 | 12,700,000 | 4.3 | 16,821,364 | $21.00 | $20.39 |
| 12 | 1986 | 98,648 | 80.6% | 9,359,137 | 4.2 | 12,500,000 | 4.2 | 17,470,510 | $23.00 | $22.23 |
| 27 | 1978 | 96,518 | 95.2% | 9,134,518 | 4.1 | 12,200,000 | 4.1 | 14,975,598 | $22.00 | $21.89 |
| 51 | 1977 | 89,789 | 94.2% | 7,861,675 | 3.6 | 10,500,000 | 3.6 | 13,482,708 | $21.25 | $20.53 |
| 55 | 1977 | 89,221 | 88.4% | 7,711,929 | 3.5 | 10,300,000 | 3.5 | 13,397,418 | $22.25 | $21.03 |
| 65 | 1982 | 28,612 | 100.0% | 4,941,624 | 2.2 | 6,600,000 | 2.2 | 2,464,918 | $20.00 | $19.01 |
| 3 | 1979 | 60,950 | 81.2% | 4,941,624 | 2.2 | 6,600,000 | 2.2 | 9,336,100 | $21.00 | $20.51 |
| 75 | 1980 | 48,156 | 88.9% | 3,369,289 | 1.5 | 4,500,000 | 1.5 | 7,664,564 | $20.00 | $19.21 |
| Total / Wtd. Avg. | 2,033,179 | 92.7% | $221,250,000 | 100.0% | $295,500,000 | 100.0% | $345,400,627 | $23.63 | $22.80 |
| (1) | Appraisal Market Rent $ per SF is quoted on a modified gross basis for all buildings except Building 65, which is quoted on a triple net basis. |
Corporate Woods Portfolio Largest Tenants by Building
Building | Building GLA | Building Occupancy as of 5/31/2017 | Building Largest Tenant | Largest Tenant GLA | Largest Tenant % Building GLA | Largest Tenant Lease Expiration |
| 3 | 60,950 | 81.2% | DeMars Pension Consulting Services, Inc. | 10,247 | 16.8% | 9/30/2021 |
| 6 | 108,395 | 83.8% | National Crop Insurance Services, Inc. | 18,522 | 17.1% | 9/30/2019 |
| 9 | 99,400 | 92.7% | University of Kansas Hospital Authority | 16,785 | 16.9% | 8/31/2018 |
| 12 | 98,648 | 80.6% | Lansing Trade Group, LLC | 44,496 | 45.1% | 1/31/2018 |
| 14 | 120,385 | 96.7% | Propharma Group, Inc. | 16,218 | 13.5% | 2/28/2021 |
| 27 | 96,518 | 95.2% | CSC Covansys Corporation | 16,550 | 17.1% | 3/31/2022 |
| 32 | 208,244 | 98.5% | Amerigroup Corp. & Amerigroup Kansas, Inc. | 39,056 | 18.8% | 12/31/2020 |
| 34 | 97,023 | 100.0% | TMFS Holdings, LLC | 33,100 | 34.1% | 3/1/2027 |
| 40 | 300,043 | 96.8% | Coventry Health Care of Kansas, Inc. | 69,640 | 23.2% | 12/31/2023 |
| 51 | 89,789 | 94.2% | RGN-Overland Park I, LLC | 15,796 | 17.6% | 5/31/2020 |
| 55 | 89,221 | 88.4% | Emerson Electric Co. | 10,073 | 11.3% | 3/31/2020 |
| 65 | 28,612 | 100.0% | Garozzo’s III, Inc. | 5,575 | 19.5% | 9/30/2021 |
| 70 | 100,809 | 94.6% | Compass Minerals International, Inc. | 60,699 | 60.2% | 2/29/2020 |
| 75 | 48,156 | 88.9% | Multi Service Technology Solutions, Inc. | 12,182 | 25.3% | 11/30/2017 |
| 82 | 245,413 | 98.2% | PNC Bank National Association | 159,270 | 64.9% | 10/31/2019 |
| 84 | 241,573 | 83.1% | Scoular Company | 37,432 | 15.5% | 8/31/2020 |
| Total / Wtd. Avg. | 2,033,179 | 92.7% | 565,641 | 27.8% |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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Ten Largest Owned Tenants Based on Underwritten Base Rent
Tenant Name | Credit Rating (Fitch/MIS/S&P)(1) | Tenant | % of | UW Base | % of Total | UW Base | Lease Expiration | Renewal / Extension Options | ||||||||
| PNC Bank National Association | A+ / A3 / A- | 159,270 | 7.8% | $4,665,105 | 10.6% | $29.29 | 10/31/2019(3) | 2, 5-year options | ||||||||
| Coventry Health Care of Kansas, Inc. | A- / Baa2 / NR | 69,640 | 3.4 | 1,532,080 | 3.5 | $22.00 | 12/31/2023 | 1, 5-year option | ||||||||
| Compass Minerals International, Inc. | NR / B1 / BB | 60,699 | 3.0 | 1,504,728 | 3.4 | $24.79 | 2/29/2020 | 1, 5-year option | ||||||||
| Lathrop & Gage, LLP | NR / NR / NR | 39,993 | 2.0 | 1,081,091 | 2.5 | $27.03 | 1/31/2018(4) | 1, 5-year option | ||||||||
| Lansing Trade Group, LLC | NR / NR / NR | 44,496 | 2.2 | 981,171 | 2.2 | $22.05 | 1/31/2018 | NAP | ||||||||
| Scoular Company | NR / NR / NR | 37,432 | 1.8 | 950,773 | 2.2 | $25.40 | 8/31/2020 | NAP | ||||||||
| QC Holdings, Inc. | NR / NR / NR | 39,022 | 1.9 | 838,973 | 1.9 | $21.50 | 10/31/2017 | 1, 5-year option | ||||||||
| Amerigroup Corp. & Amerigroup Kansas, Inc. | NR / Baa2 / NR | 39,056 | 1.9 | 829,940 | 1.9 | $21.25 | 12/31/2020 | 1, 1-year option | ||||||||
| TMFS Holdings, LLC | NR / NR / NR | 33,100 | 1.6 | 719,925 | 1.6 | $21.75 | 3/1/2027 | 1, 5-year option | ||||||||
| Vendor Credentialing Service LLC dba symplr | NR / NR / NR | 30,823 | 1.5 | 708,929 | 1.6 | $23.00 | 8/31/2024 | 1, 5-year option | ||||||||
| Ten Largest Tenants | 553,531 | 27.2% | $13,812,714 | 31.4% | $24.95 | |||||||||||
| Remaining Owned Tenants | 1,331,180 | 65.5 | 30,142,376 | 68.6 | $22.64 | |||||||||||
| Vacant | 148,468 | 7.3 | 0 | 0.0 | $0.00 | |||||||||||
| Total / Wtd. Avg. All Owned Tenants | 2,033,179 | 100.0% | $43,955,091 | 100.0% | $23.32 | |||||||||||
| (1) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
| (2) | UW Base Rent, % of Total UW Base Rent and UW Base Rent $ per SF include contractual rent steps ($577,892) through July 2018 and the present value of rent steps for credit tenants ($376,234). |
| (3) | PNC Bank National Association has executed a letter of intent to extend their lease to October 31, 2029 pursuant to the following terms: 146,450 SF leased at $15.00 per SF triple net with $0.50 per SF annual rent increases. We cannot assure you that PNC Bank National Association will execute a lease pursuant to the aforementioned terms. |
| (4) | Lathrop & Gage, LLP leases 13,497 SF that expires on January 31, 2018 and 26,496 SF that expires on January 31, 2023. |
The following table presents the lease rollover schedule at the Corporate Woods Portfolio Properties, based on initial lease expiration dates:
Lease Expiration Schedule(1)(2)
| Year Ending December 31 | Expiring Owned GLA | % of Owned GLA | Cumulative % of Owned GLA | UW Base Rent(3) | % of Total UW Base Rent(3) | UW Base Rent $ per SF(3)(4) | # of Expiring Tenants | ||||||||||||
| MTM | 1,885 | 0.1 | % | 0.1 | % | $103,177 | 0.2 | % | $23.79 | (5) | 4 | ||||||||
| 2017 | 67,965 | 3.3 | 3.4 | % | 1,430,918 | 3.3 | 21.05 | 11 | |||||||||||
| 2018 | 316,500 | 15.6 | 19.0 | % | 7,063,187 | 16.1 | 22.32 | 49 | |||||||||||
| 2019 | 465,746 | 22.9 | 41.9 | % | 11,634,141 | 26.5 | 24.98 | 69 | |||||||||||
| 2020 | 405,813 | 20.0 | 61.9 | % | 9,205,093 | 20.9 | 22.68 | 60 | |||||||||||
| 2021 | 171,096 | 8.4 | 70.3 | % | 3,926,071 | 8.9 | 22.95 | 35 | |||||||||||
| 2022 | 183,823 | 9.0 | 79.3 | % | 4,145,160 | 9.4 | 22.55 | 33 | |||||||||||
| 2023 | 144,131 | 7.1 | 86.4 | % | 3,386,284 | 7.7 | 23.49 | 7 | |||||||||||
| 2024 | 61,082 | 3.0 | 89.4 | % | 1,457,728 | 3.3 | 23.87 | 6 | |||||||||||
| 2025 | 27,547 | 1.4 | 90.8 | % | 750,901 | 1.7 | 27.26 | 3 | |||||||||||
| 2026 | 0 | 0.0 | 90.8 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||
| 2027 | 39,123 | 1.9 | 92.7 | % | 852,431 | 1.9 | 21.79 | 2 | |||||||||||
| 2028 & Thereafter | 0 | 0.0 | 92.7 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||
| Vacant | 148,468 | 7.3 | 100.0 | % | 0 | 0.0 | 0.00 | 0 | |||||||||||
| Total / Wtd. Avg. | 2,033,179 | 100.0 | % | $43,955,091 | 100.0 | % | $23.32 | 279 | |||||||||||
| (1) | Calculated based on the approximate square footage occupied by each Owned Tenant. |
| (2) | Certain tenants may have lease termination options that are exercisable prior to the originally stated expiration date of the subject lease and that are not considered in the Lease Expiration Schedule. |
| (3) | UW Base Rent, % of Total UW Base Rent and UW Base Rent $ per SF include contractual rent steps ($577,892) through July 2018 and the present value of rent steps for credit tenants ($376,234). |
| (4) | Total / Wtd. Avg. UW Base Rent $ per SF excludes vacant space. |
| (5) | UW Base Rent $ per SF for MTM tenants is calculated based on the $44,843 of UW Base Rent associated with 1,885 SF of conference room space. The remaining UW Base Rent of $58,334 is associated with antenna space, mail boxes and other miscellaneous tenants which have 0 SF attributed to them. |
The following table presents certain information relating to historical leasing at the Corporate Woods Portfolio Properties:
Historical Leased %(1)
2013 | 2014 | 2015 | 2016 | As of 5/31/2017(2) | ||||||
| Owned Space | 87.4% | 92.0% | 91.8% | 89.5% | 92.7% |
| (1) | As provided by the borrower and which represents occupancy as of December 31 for the indicated year unless otherwise specified. |
| (2) | Based on the underwritten rent roll dated May 31, 2017. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| ■ | Operating History and Underwritten Net Cash Flow. The following table presents certain information relating to the historical operating performance and the Underwritten Net Cash Flow at the Corporate Woods Portfolio Properties: |
Cash Flow Analysis
| 2014 | 2015 | 2016 | TTM 6/30/2017 | Underwritten(1) | Underwritten $ per SF(2) | |||||||||||||||||||
| Base Rent | $40,743,337 | $40,641,844 | $40,285,194 | $41,587,085 | $43,000,965 | $21.15 | ||||||||||||||||||
| Contractual Rent Steps | 0 | 0 | 0 | 0 | 954,126 | 0.47 | ||||||||||||||||||
| Gross Up Vacancy | 0 | 0 | 0 | 0 | 3,494,670 | 1.72 | ||||||||||||||||||
| Reimbursements | 952,901 | 1,912,725 | 2,243,749 | 2,653,606 | 3,080,143 | 1.51 | ||||||||||||||||||
| Other Income | 184,342 | 317,945 | 206,088 | 236,942 | 236,942 | 0.12 | ||||||||||||||||||
| Gross Revenue | $41,880,581 | $42,872,514 | $42,735,030 | $44,477,632 | $50,766,845 | $24.97 | ||||||||||||||||||
| Vacancy & Credit Loss | (685,338 | ) | (638,017 | ) | (953,455 | ) | (1,237,930 | ) | (5,053,068 | ) | (2.49 | ) | ||||||||||||
| Effective Gross Income | $41,195,243 | $42,234,497 | $41,781,575 | $43,239,702 | $45,713,777 | $22.48 | ||||||||||||||||||
| Real Estate Taxes | $6,306,567 | $6,895,024 | $7,152,862 | $7,328,805 | $7,389,621 | $3.63 | ||||||||||||||||||
| Insurance | 302,946 | 296,902 | 328,068 | 330,164 | 330,164 | 0.16 | ||||||||||||||||||
| Management Fee | 611,060 | 627,055 | 622,794 | 648,685 | 1,142,844 | 0.56 | ||||||||||||||||||
| Other Operating Expenses | 12,795,399 | 13,234,241 | 13,798,380 | 14,239,084 | 14,239,084 | 7.00 | ||||||||||||||||||
| Total Operating Expenses | $20,015,972 | $21,053,221 | $21,902,104 | $22,546,739 | $23,101,714 | $11.36 | ||||||||||||||||||
| Net Operating Income | $21,179,271 | $21,181,276 | $19,879,471 | $20,692,963 | $22,612,063 | $11.12 | ||||||||||||||||||
| TI/LC | 0 | 0 | 0 | 0 | 2,299,877 | 1.13 | ||||||||||||||||||
| Capital Expenditures | 0 | 0 | 0 | 0 | 459,093 | 0.23 | ||||||||||||||||||
| Net Cash Flow | $21,179,271 | $21,181,276 | $19,879,471 | $20,692,963 | $19,853,093 | $9.76 | ||||||||||||||||||
| Occupancy(3) | 92.0% | 91.8% | 89.5% | 92.7% | 90.0% | |||||||||||||||||||
| NOI Debt Yield(4) | 9.6% | 9.6% | 9.0% | 9.4% | 10.2% | |||||||||||||||||||
| NCF DSCR(4) | 1.58x | 1.58x | 1.49x | 1.55x | 1.48x | |||||||||||||||||||
| (1) | Underwritten Base Rent includes contractual rent steps through July 2018. |
| (2) | Underwritten $ per SF is based on the owned space at the Corporate Woods Portfolio Properties. |
| (3) | TTM 6/30/2017 Occupancy of 92.7% is based on the rent roll dated May 31, 2017 and Underwritten Occupancy represents the underwritten economic vacancy of 10.0%. |
| (4) | Calculated based on the outstanding principal balance as of the Cut-off Date of the Corporate Woods Portfolio Loan Combination. |
| ■ | Appraisal.According to the appraisal, the Corporate Woods Portfolio Properties had an “As Portfolio” bulk appraised value of $299,100,000 as of an effective date of June 15, 2017, which includes a portfolio premium of $3,600,000. The sum of the individual “as-is” appraised values of the Corporate Woods Portfolio Properties is $295,500,000. |
| Appraisal Approach | As-Is Value | Discount Rate | Capitalization Rate | |||||
| Direct Capitalization Approach | $295,800,000 | N/A | 7.50 | % | ||||
| Discounted Cash Flow Approach | $299,100,000 | 8.25 | %(1) | 7.75 | %(2) | |||
| (1) | Represents the internal rate of return (cash flow). |
| (2) | Represents the terminal capitalization rate. |
| ■ | Environmental Matters.According to the Phase I environmental reports, dated August 9, 2017, there are no recognized environmental conditions or recommendations for further action for the Corporate Woods Portfolio Properties. |
| ■ | Market Overview and Competition. The Corporate Woods Portfolio Properties are located in Overland Park, Kansas, which is situated in southwest Johnson County, about 15 miles southwest of the Kansas City CBD. Major employers within the area include: HCA Midwest Health System, Sprint Corporation, Saint Luke’s Health System, Cerner Corporation, Children’s Mercy Hospitals & Clinics, DST Systems, Inc., Truman Medical Center, and Black & Veatch Corporation, among others. |
The Corporate Woods Portfolio Properties are located in the city of Overland Park which is the second-most populous city in Kansas and the largest suburb in the Kansas City metropolitan area. The Corporate Woods Portfolio Properties are located approximately 15 miles from Kansas City’s CBD and 34 miles from the Kansas City International Airport. Additionally, an extensive interstate network runs directly through Overland Park, servicing residents and employees that live in the area. The 2016 population within a one-, three- and five-mile radius of the Corporate Woods Portfolio Properties was 9,145, 97,171 and 248,477, respectively. The 2016 estimated average household income within a one-, three- and five-mile radius of the Corporate Woods Portfolio Properties was $87,815, $93,240 and $104,793, respectively. Overland Park has certain attractions such as a 300-acre arboretum and
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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botanical garden, a bi-weekly farmers’ market and a new 12-field soccer complex which hosts local, regional and national tournaments.
The Corporate Woods Portfolio Properties are part of the Kansas City Metropolitan Statistical Area (“MSA”) office market and the South Johnson County/College Boulevard office submarket. Based on the appraisal, the submarket is characteristically a higher-performing submarket in terms of effective rental rates achieved by the landlords. According to a market report, as of the first quarter of 2017, the Kansas City MSA office market consisted of 136.8 million SF with an average occupancy rate of 92.1% and an average rent of $18.26 per SF. As of the first quarter of 2017, the College Boulevard office submarket consisted of 20.5 million SF with an average vacancy rate of 8.5% and an average rent of $21.65 per SF. The appraisal identified a subset of six comparable properties, located within the College Boulevard office submarket and within three miles of the Corporate Woods Portfolio Properties. The table below is based on the information available to the appraiser in connection with such comparable properties, which had gross rents ranging from $20.75 per SF to $26.00 per SF (see chart below).
The following table presents certain information relating to the primary competition for the Corporate Woods Portfolio Properties:
Office Lease Comparables(1)
Corporate Woods Portfolio Properties | Lighton Plaza I & II / Tower | 7101 Tower | Commerce Plaza I & II | South Creek Office Park | Financial Plaza II & III | Renaissance / Del Sarto | |
| Year Built | 1977-2001 | 1989 | 1986 | 1986 | 1995 | 1985 | 1986 |
| Total GLA | 2,033,179 | 476,278 | 228,040 | 285,465 | 898,488 | 254,336 | 545,218 |
| Total Occupancy | 92.7%(2) | 92.8% | 93.9% | 97.4% | 89.5% | 87.7% | 90.3% |
| Quoted Rent Rate per SF | $22.00-24.25 | $22.00-26.00 | $23.50 | $23.50 | $20.75-22.25 | $21.50-23.00 | $21.50-23.00 |
| Expense Basis | FSG | FSG | FSG | FSG | FSG | FSG | FSG |
| (1) | Source: Appraisal. |
| (2) | Based on the borrower rent roll dated May 31, 2017. |
| ■ | The Borrower. The borrower is Corporate Woods Kansas Realty LP, a single-purpose, single-asset entity that is 0.50% owned by its general partner, Corporate Woods Kansas Realty Management LLC and 99.5% owned by Corporate Woods Kansas LP. Corporate Woods Kansas LP is 0.5% owned by its general partner, Corporate Woods Kansas Management LLC and 99.5% owned by various limited partners. A non-consolidation opinion has been delivered in connection with the origination of the Corporate Woods Portfolio Loan Combination. Raymond Massa is the non-recourse carveout guarantor of the Corporate Woods Portfolio Loan Combination. |
Corporate Woods Kansas Realty Management LLC and Corporate Woods Kansas Management LLC are controlled by Group RMC Management Inc. (“Group RMC”). Group RMC is a real estate management company headquartered in New York City targeting investments in office assets throughout the United States. Group RMC is currently invested in 19 office properties totaling approximately 6.5 million SF across more than 80 buildings throughout the United States and Canada valued at approximately $621.5 million.
| ■ | Escrows.On the origination date of the Corporate Woods Portfolio Loan Combination, the borrower funded reserves of (i) $6,258,114 for real estate taxes, (ii) $7,500,000 for tenant improvements and leasing commissions, (iii) $620,488 for deferred maintenance and (iv) $1,481,165 for unfunded tenant obligations. |
On each due date, the borrower will be required to fund (i) one-twelfth of the taxes that the lender estimates will be payable over the then-succeeding 12-month period (annual taxes are initially estimated to be $6,258,114), (ii) at the option of the lender, one-twelfth of the amount that the lender estimates will be necessary to pay insurance premiums over the then-succeeding 12-month period, provided that insurance is not covered under an acceptable blanket policy, (iii) $38,258 for replacement reserves and (iv) if at any time the tenant improvements and leasing commissions reserve is less than $5,000,000, a monthly payment of $169,428 up to a cap of $7,500,000.
| ■ | Lockbox and Cash Management. The Corporate Woods Portfolio Loan Combination is structured with a hard lockbox and springing cash management. The borrower was required to send tenant direction letters to all tenants instructing them to deposit all rents and other payments into the clearing account controlled by the lender, and any funds received by the borrower or the property manager are required to be deposited in the lockbox within two business days of receipt. During a Corporate Woods Portfolio Trigger Period (as defined below), all funds in the clearing account are required to be transferred on a daily basis into a deposit account established and maintained by the lender, and applied to all required payments and reserves as set forth in the Corporate Woods Portfolio Loan Combination documents. Provided no Corporate Woods Portfolio Trigger Period is continuing, excess cash in the |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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deposit account is required to be disbursed to the borrower in accordance with the Corporate Woods Portfolio Loan Combination documents. Upon the occurrence of an event of default under the Corporate Woods Portfolio Loan Combination documents, funds may be applied in such order of priority as the lender may determine.
A“Corporate Woods Portfolio Trigger Period” will commence upon the earliest to occur of (i) an event of default, (ii) the debt service coverage ratio, as of any calculation date, falling below 1.20x for one calendar quarter or (iii) a Corporate Woods Portfolio Specified Tenant Trigger Period (as defined below) and will end upon (a) with respect to clause (i) above, the date on which such event of default is cured, (b) with respect to clause (ii) above, the debt service coverage ratio being at least 1.25x for two consecutive calendar quarters and (c) with respect to clause (iii) above, the Corporate Woods Portfolio Specified Tenant Trigger Period ceasing to exist.
A“Corporate Woods Portfolio Specified Tenant Trigger Period” means a period (A) commencing upon the first to occur of (i) the Corporate Woods Portfolio Specified Tenant (as defined below) being in default under the applicable lease beyond any applicable notice and/or cure periods, (ii) the Corporate Woods Portfolio Specified Tenant failing to be in actual, physical possession of at least 80% of its space, (iii) the Corporate Woods Portfolio Specified Tenant giving notice that it is terminating its lease with respect to 15% or more of its space, (iv) any termination or cancellation of any Corporate Woods Portfolio Specified Tenant lease (including, without limitation, rejection in any bankruptcy or similar insolvency proceeding) and/or any Corporate Woods Portfolio Specified Tenant lease failing to otherwise be in full force and effect, (v) any bankruptcy or similar insolvency of the Corporate Woods Portfolio Specified Tenant and (vi) the Corporate Woods Portfolio Specified Tenant failing to extend or renew the applicable Corporate Woods Portfolio Specified Tenant lease on or prior to the earlier of (y) 12 months prior to the expiration of the then applicable term of the applicable Corporate Woods Portfolio Specified Tenant lease and (z) the renewal period required under the applicable Corporate Woods Portfolio Specified Tenant lease; and (B) expiring upon the earlier of (x) the cure of any conditions above in accordance with the Corporate Woods Portfolio Loan Combination documents or (y) the borrower leasing the applicable Corporate Woods Portfolio Specified Tenant space for a term of at least 5 years and the applicable tenant under such lease being in actual, physical occupancy of the space demised under its lease and paying full rent.
A“Corporate Woods Portfolio Specified Tenant” means any tenant that at such time, together with any affiliates, leases space at the Corporate Woods Portfolio Properties that comprises more than 20% or more of either (1) the Corporate Woods Portfolio Properties’ aggregate gross leasable area, or (2) the total rental income (in the aggregate) for the Corporate Woods Portfolio Properties.
| ■ | Property Management.The Corporate Woods Portfolio Properties are currently managed by Block Real Estate Services, LLC, an independent third-party manager. The lender has the right to, or to direct the borrower to, terminate the property management agreement and replace the property manager if: (i) the property manager becomes insolvent or a debtor in an involuntary bankruptcy action or proceeding that is not dismissed within 90 days or any voluntary bankruptcy proceeding; (ii) a Corporate Woods Portfolio Trigger Period has occurred and is continuing under the Corporate Woods Portfolio LoanCombinationdocuments; (iii) the property manager has engaged in gross negligence, fraud, willful misconduct or misappropriation of funds; or (iv) a default by the property manager has occurred and is continuing under the property management agreement after the expiration of all applicable notice and cure periods. The borrower has the right to replace the property manager, provided no event of default is continuing under the Corporate Woods Portfolio LoanCombinationdocuments, with (x) a reputable management company (i) having at least seven years’ experience in the management of office properties with similar scope and class as the Corporate Woods Portfolio Properties located in geographic areas with characteristics similar to the geographic area in which the Corporate Woods Portfolio Properties is located, (ii) which has, for at least seven years preceding the applicable date of determination, managed at least seven comparable properties (exclusive of the Corporate Woods Portfolio Properties) each being of approximately the same size as the Corporate Woods Portfolio Properties, (iii) managing comparable properties (exclusive of the Corporate Woods Portfolio Properties) with at least 1,000,000 leasable SF (in the aggregate) and (iv) which is not the subject of any proceeding under any applicable creditors rights laws, or (y) a property manager approved by the lender in writing (which may be conditioned upon receipt of a rating agency confirmation). |
| ■ | Mezzanine or Secured Subordinate Indebtedness.Not permitted. |
| ■ | Release of Collateral. Provided that no event of default is then continuing under the Corporate Woods Portfolio Loan Combination, the Corporate Woods Portfolio Loan Combination documents permit a partial release of one or more of the individual Corporate Woods Portfolio Properties at any time after the earlier of August 9, 2020 and the second anniversary of the securitization of the last piece of the Corporate Woods Portfolio Loan Combination, subject to certain conditions, including, without limitation, the following: (i) if the partial release occurs on or after the due date in |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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April 2027, the borrower must prepay, or if the partial release occurs prior to the due date in April 2027, the borrower must deliver the partial defeasance collateral with respect to the Corporate Woods Portfolio Property in accordance with the Corporate Woods Portfolio Loan Combination documents, in each case in an amount equal to the greater of (A) 120% of the allocated loan amount for the individual Corporate Woods Portfolio Property to be released and (B) 95% of the net sales proceeds applicable to such property, (ii) as of the release date, after giving effect to the release, the debt service coverage ratio for the remaining individual Corporate Woods Portfolio Properties is equal to or greater than the greater of (a) the debt service coverage ratio for all individual Corporate Woods Portfolio Properties securing the Corporate Woods Portfolio Loan Combination immediately prior to the release and (b) 1.40x, (iii) as of the release date, after giving effect to such release, the debt yield for the remaining individual Corporate Woods Portfolio Properties is equal to or greater than the greater of (a) the debt yield for all individual Corporate Woods Portfolio Properties securing the Corporate Woods Portfolio Loan immediately prior to the release date, as applicable and (b) 9.0%, (iv) as of the release date, after giving effect to the release, the loan-to-value ratio for the remaining individual Corporate Woods Portfolio Properties is no greater than the lesser of (a) 74.0% and (b) the loan-to-value ratio for the individual Corporate Woods Portfolio Properties securing the Corporate Woods Portfolio Loan Combination immediately prior to the release date, as applicable, and (v) delivery to lender of a REMIC opinion.
| ■ | Terrorism Insurance. The borrower is required to maintain an “all-risk” insurance policy that provides coverage for terrorism in an amount equal to 100% of the full replacement cost of the Corporate Woods Portfolio Properties, plus a business interruption insurance policy that provides 18 months of business interruption coverage with an additional 6-month extended period of indemnity, with no deductible in excess of $10,000 (provided, however, that higher deductibles for damage caused by flood, earth movement, wind or terrorism are permitted so long as such higher deductibles are commercially reasonable but not to exceed $100,000 with respect to terrorism and 5% of the total insurable value of the applicable individual property with respect to flood, earth movement or wind). See“Risk Factors—Terrorism Insurance May Not Be Available for All Mortgaged Properties”in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #9: 50 varick street
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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| Mortgaged Property Information | Mortgage Loan Information | ||||
| Number of Mortgaged Properties | 1 | Loan Seller | LCF | ||
| Location (City/State) | New York, New York | Cut-off Date Balance(3) | $35,000,000 | ||
| Property Type | Office | Cut-off Date Balance per SF(2) | $491.19 | ||
| Size (SF)(1) | 158,574 | Percentage of Initial Pool Balance | 3.6% | ||
| Total Occupancy as of 7/1/2017 | 100.0% | Number of Related Mortgage Loans | None | ||
| Owned Occupancy as of 7/1/2017 | 100.0% | Type of Security | Fee Simple | ||
| Year Built / Latest Renovation | 1960 / 2013 | Mortgage Rate | 4.15000% | ||
| Appraised Value | $140,000,000 | Original Term to Maturity (Months) | 120 | ||
| Appraisal Date | 7/7/2017 | Original Amortization Term (Months) | NAP | ||
| Borrower Sponsor | Alessandro Cajrati Crivelli | Original Interest Only Period (Months) | 120 | ||
| Property Management | Smith Murdock Company, LLC | First Payment Date | 10/6/2017 | ||
| Maturity Date | 9/6/2027 | ||||
| Underwritten Revenues | $8,514,769 | ||||
| Underwritten Expenses | $1,759,376 | Escrows(4) | |||
| Underwritten Net Operating Income (NOI) | $6,755,393 | Upfront | Monthly | ||
| Underwritten Net Cash Flow (NCF) | $6,596,819 | Taxes | $219,873 | $54,968 | |
| Cut-off Date LTV Ratio(2) | 55.6% | Insurance | $12,654 | $6,327 | |
| Maturity Date LTV Ratio(2) | 55.6% | Replacement Reserve | $0 | $1,982 | |
| DSCR Based on Underwritten NOI / NCF(2) | 2.06x / 2.01x | TI/LC | $0 | $11,232 | |
| Debt Yield Based on Underwritten NOI / NCF(2) | 8.7% / 8.5% | Deferred Maintenance | $28,125 | $0 | |
| Other(5) | $4,855,995 | $45,778 | |||
| Sources and Uses | |||||||||||||||
| Sources | $ | % | Uses | $ | % | ||||||||||
| Loan Combination Amount | $77,890,000 | 54.1% | Purchase Price | $135,000,000 | 93.7% | ||||||||||
| Borrower Equity | 66,151,443 | 45.9 | Reserves | 5,116,648 | 3.6 | ||||||||||
| Closing Costs | 3,924,795 | 2.7 | |||||||||||||
| Total Sources | $144,041,443 | 100.0% | Total Uses | $144,041,443 | 100.0% | ||||||||||
| (1) | Size (SF) includes 136,563 SF of office space and 22,011 SF of rooftop space. |
| (2) | The Cut-off Date LTV Ratio, Maturity Date LTV Ratio, DSCR Based on Underwritten NOI / NCF DSCR, Debt Yield Based on Underwritten NOI / NCF and Cut-off Date Balance per SF calculations presented above are based on the aggregate principal balance of the promissory notes comprising the 50 Varick Street Loan Combination. |
| (3) | The Cut-off Date Balance of $35,000,000 represents the non-controlling note A-1, which note is part of a loan combination evidenced by threepari passupromissory notes with an aggregate outstanding principal balance as of the Cut-off Date of $77,890,000. The related companion loans are evidenced by (i) the non-controlling note A-2-A, which has an outstanding principal balance as of the Cut-off Date of $25,500,000, is currently held by Ladder Capital Finance LLC (“LCF”) and is expected to be contributed to the UBS 2017-C4 securitization transaction, and (ii) the controlling note A-3-A, which has an outstanding principal balance as of the Cut-off Date of $17,390,000, is currently held by LCF and is expected to be contributed to one or more future securitization transactions. See“—The Mortgage Loan” below. |
| (4) | See “—Escrows”below for further discussion of reserve information. |
| (5) | Other Escrow includes Security Deposit ($2,965,935), Free Rent Reserve ($1,844,282) and Condominium Common Charges Reserve ($45,778). |
| ■ | The Mortgage Loan.The mortgage loan (the “50 Varick Street Loan”) is part of a loan combination (the “50 Varick Street Loan Combination”) evidenced by threepari passu notes with a combined outstanding principal balance as of the Cut-off Date of $77,890,000. The 50 Varick Street Loan Combination is secured by the borrower’s fee simple interest in a Class A office building located in New York, New York (the “50 Varick Street Property”). The 50 Varick Street Loan, which is evidenced by the non-controlling note A-1, has an outstanding principal balance as of the Cut-off Date of $35,000,000 and represents approximately 3.6% of the Initial Pool Balance. The related companion loans have an aggregate outstanding principal balance as of the Cut-off Date of $42,890,000 and are evidenced by (i) the non-controlling note A-2-A, which has an outstanding principal balance as of the Cut-off Date of $25,500,000, is currently held by Ladder Capital Finance LLC or an affiliate (“LCF”) and is expected to be contributed to the UBS 2017-C4 securitization transaction and (ii) the controlling note A-3-A, which has an outstanding principal balance as of the Cut-off Date of $17,390,000, is currently held by LCF and is expected to be contributed to one or more future securitization transactions. The 50 Varick Street Loan Combination was originated by LCF on August 7, 2017. Eachpari passu note evidencing the 50 Varick Street Loan Combination has an interest rate of 4.15000%per annum. The borrowers utilized the proceeds of the 50 Varick Street Loan Combination along with approximately $66.15 million to acquire the 50 Varick Street Property, fund reserves and pay closing costs. See “Description of the Mortgage Pool—The Loan Combinations—The Outside Serviced Pari Passu Loan Combinations”in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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Note Summary
| Note | Current or Anticipated Holder of Securitized Note | Cut-off Date Balance |
50 Varick Street Loan Combination | ||
| Note A-1 | CGCMT 2017-C4 | $35,000,000 |
| 50 Varick Street Pari Passu Companion Loans | ||
| Note A-2-A | UBS 2017-C4(1) | $25,500,000 |
| Note A-3-A | LCF(2) | $17,390,000 |
| Total | $77,890,000 | |
| (1) | Expected to be contributed to the related securitization transaction upon closing of such securitization transaction. |
| (2) | Expected to be contributed to a future securitization transaction. |
The 50 Varick Street Loan Combination has an initial term of 120 months and has a remaining term of 119 months as of the Cut-off Date. The 50 Varick Street Loan Combination requires interest-only payments until the scheduled maturity date, which is the due date in September 2027. Voluntary prepayment of the 50 Varick Street Loan Combination is not permitted until on or after the payment date in July 2027. Defeasance of the 50 Varick Street Loan Combination with direct, non-callable obligations of the United States of America or other obligations which are “government securities” is permitted at any time after the earlier of August 7, 2021 or the second anniversary of the securitization of the last portion of the 50 Varick Street Loan Combination.
| ■ | The Mortgaged Property. The 50 Varick Street Property is comprised of a 158,574 SF, 8-story, mid-rise office building that is located within the Tribeca neighborhood in New York. The net rentable area includes 136,563 SF of interior spaces on floors one, two, five, six, and seven, and includes a 22,011 SF terrace on the roof, which serves as an outdoor function area. The 50 Varick Street Property is located along Varick Street and St. Johns Lane with access to public transportation including the MTA subway, 1, 2, 3, A, C, and E lines as well as access to the Holland Tunnel. The 1, 2, and 3 trains have a station half of a block east of the 50 Varick Street Property and the A, C and E trains are located half of a block north of the 50 Varick Street Property. In addition the 4, 5, 6, J, and Z trains are only four and a half blocks southeast of the 50 Varick Street Property. |
The 50 Varick Street Property is currently 100.0% occupied by two tenants. The 50 Varick Street Property has maintained 100.0% occupancy over the past three years. The largest tenant at the 50 Varick Street Property is Spring Studios New York LLC (“Spring Studios”) which occupies 84,044 SF (53.0% of GLA) and pays 52.4% of underwritten base rent, and the second largest tenant is Spring Place New York (“Spring Place”) which occupies 74,530 SF (47.0% of GLA) and pays 47.6% of underwritten base rent.
The 50 Varick Street Property is located on an approximately 0.77-acre site. The 50 Varick Street Property is a multitenant office property with flexible space in terms of the possible configuration. The Spring Studios space is used for events ranging from small film screenings to large corporate events, such as the 2017 Goldman Sachs Technology Conference and product releases for Google, and is the main location and home for New York Fashion Week.
The following table presents certain information relating to historical leasing at the 50 Varick Street Property:
Historical Leased %(1)
2014 | 2015 | 2016 | As of 7/1/2017 | |||||
| Owned Space | 100.0% | 100.0% | 100.0% | 100.0% | ||||
| (1) | As provided by the borrower rent roll and the Spring Studios lease agreement and which represents occupancy as of December 31 for the indicated year unless otherwise specified. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The following table presents certain information relating to the major tenants at the 50 Varick Street Property:
Largest Owned Tenants Based on Underwritten Base Rent(1)
Tenant Name | Credit Rating (Fitch/MIS/S&P) | Tenant GLA | % of GLA | UW Base | % of Total | UW Base | Lease | Renewal / Extension Options | |||||||||||||
| Spring Studios New York LLC | NR / NR / NR | 84,044 | 53.0 | % | $4,064,055 | 52.4 | % | $48.36 | 12/31/2029 | 1, 15-year option | |||||||||||
| Spring Place New York | NR / NR / NR | 74,530 | (2) | 47.0 | 3,691,953 | 47.6 | $49.54 | 12/31/2029 | 1, 15-year option | ||||||||||||
| Largest Owned Tenants | 158,574 | 100.0 | % | $7,756,007 | 100.0 | % | $48.91 | ||||||||||||||
| Vacant | 0 | 0.0 | 0 | 0.0 | 0.00 | ||||||||||||||||
| Total / Wtd. Avg. All Tenants | 158,574 | 100.0 | % | $7,756,007 | 100.0 | % | $48.91 | ||||||||||||||
| (1) | Information is based on the underwritten rent roll dated July 1, 2017. |
| (2) | Includes 22,011 SF of rooftop space. |
The following table presents the lease rollover schedule at the 50 Varick Street Property, based on initial lease expiration dates:
Lease Expiration Schedule(1)
Year Ending | Expiring Owned | % of Owned | Cumulative % of Owned GLA | UW | % of Total UW | UW Base Rent | # of Expiring | |||||||||||||||
| 2017 | 0 | 0.0 | % | 0.0 | % | $0 | 0.0 | % | $0.00 | 0 | ||||||||||||
| 2018 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||||
| 2019 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||||
| 2020 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||||
| 2021 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||||
| 2022 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||||
| 2023 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||||
| 2024 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||||
| 2025 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||||
| 2026 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||||
| 2027 | 0 | 0.0 | 0.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||||
| 2028 & Thereafter | 158,574 | 100.0 | 100.0 | % | 7,756,007 | 100.0 | 48.91 | 2 | ||||||||||||||
| Vacant | 0 | 0.0 | 100.0 | % | 0 | 0.0 | 0.00 | 0 | ||||||||||||||
| Total / Wtd. Avg. | 158,574 | 100.0 | % | $7,756,007 | 100.0 | % | $48.91 | 2 | ||||||||||||||
| (1) | Information is based on the underwritten rent roll. |
Major Tenants
Spring Studios New York LLC (84,044 SF, 53.0% of GLA, 52.4% of underwritten base rent). Spring Studios is a London based, private design house founded in 1997 that offers photo and motion production facilities and related event services for creative industries including, fashion, beauty, luxury retail, marketing, advertising, cultural, and literary. Clients include Proctor & Gamble, Michael Kors, Mulberry, Nexxus, Tom Ford, Vogue, Canali, Coty, Diesel, and Estée Lauder. The facility offers 11 studios, nine green rooms, a signature restaurant, a bar, an art gallery, a cinema, a library, offices, a green roof deck, lighting and equipment rental and event spaces. The building design incorporates the original dramatic industrial architectural features of the existing seven-story building, with modern insertions of hot rolled steel, steel “warehouse” glazing, concrete, wood flooring, and gallery level finishes throughout. The venue has hosted several fashion events including Francisco Costa’s 10-year anniversary show, Calvin Klein’s runway show and after party, the Phillip Lim for Target launch, Gap’s spring 2014 presentation, the CFDA/Vogue Fashion Fund Finalists Celebration and the God’s Love We Deliver Golden Heart Awards.
Spring Place New York (74,530 SF, 47.0% of GLA, 47.6% of underwritten base rent). Spring Place (owned by an affiliate of the borrower sponsor) is a member’s only collaborative workspace and social club, which opened in June 2016 at the 50 Varick Street Property. The 5th and 6th floors of the building provide the social space of Spring Place including a dining room, a bar, a lounge, a sunken lounge, a music room, a private dining room seating 24 and another private dining room seating 14, as well as an approximately 22,011 SF rooftop for various events. Spring Place is also in the process of completing the build out of the 11,200 SF 7th floor space, which will be an expansion of the collaborative workspace environment. There is 3,400 SF of collaborative office space including collectible furniture and art, communal tables and workspace, a client meeting room (Anteroom), three conference rooms (seating 6, 8 and 8) with designer furniture, four cabinet rooms with more modest furniture seating 4-6 people, a spacious board
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #9: 50 varick street
room, and an executive suite seating 18 for large scale meetings. All office space tenants are given access to the social aspects of Spring Place for a discounted rate.
| ■ | Operating History and Underwritten Net Cash Flow. The following table presents certain information relating to the historical operating performance and the Underwritten Net Cash Flow at the 50 Varick Street Property: |
Cash Flow Analysis(1)(2)
2014 | 2015 | 2016 | TTM 5/31/2017 | Underwritten | Underwritten $ per SF | |||||||||
| Base Rent | $5,941,333 | $7,257,733 | $7,525,805 | $7,322,344 | $7,756,007 | $48.91 | ||||||||
| Reimbursements | 109,996 | 675,338 | 791,044 | 820,558 | 1,206,907 | 7.61 | ||||||||
| Gross Revenue | $6,051,328 | $7,933,071 | $8,316,850 | $8,142,902 | $8,962,914 | $56.52 | ||||||||
| Vacancy & Credit Loss | 0 | 0 | 0 | 0 | (448,146 | ) | (2.83 | ) | ||||||
| Effective Gross Income | $6,051,328 | $7,933,071 | $8,316,850 | $8,142,902 | $8,514,769 | $53.70 | ||||||||
| Real Estate Taxes | $387,275 | $417,397 | $426,016 | $475,717 | $857,571 | 5.41 | ||||||||
| Insurance | 115,734 | 86,122 | 53,913 | 66,703 | 74,983 | 0.47 | ||||||||
| Management Fee | 0 | 0 | 0 | 0 | 255,443 | 1.61 | ||||||||
| Other Operating Expenses | 362,094 | 560,043 | 526,912 | 571,379 | 571,379 | 3.60 | ||||||||
| Total Operating Expenses | $865,102 | $1,063,563 | $1,006,841 | $1,113,799 | $1,759,376 | $11.09 | ||||||||
| Net Operating Income | $5,186,226 | $6,869,508 | $7,310,009 | $7,029,103 | $6,755,393 | $42.60 | ||||||||
| TI/LC | 0 | 0 | 0 | 0 | 134,788 | 0.85 | ||||||||
| Capital Expenditures | 0 | 0 | 0 | 0 | 23,786 | 0.15 | ||||||||
| Net Cash Flow | $5,186,226 | $6,869,508 | $7,310,009 | $7,029,103 | $6,596,819 | $41.60 | ||||||||
| Occupancy | 100.0% | 100.0% | 100.0% | 100.0% | 95.0% | |||||||||
| NOI Debt Yield(3) | 6.7% | 8.8% | 9.4% | 9.0% | 8.7% | |||||||||
| NCF DSCR(3) | 1.58x | 2.10x | 2.23x | 2.14x | 2.01x | |||||||||
| (1) | Underwritten Base Rent is based on leases executed at closing of the 50 Varick Street Loan Combination. |
| (2) | The 50 Varick Street Property is currently subject to a 10-Year ICAP tax abatement. The ICAP was established for the 2014/2015 property tax year and burns off in 2024/2025. Under the abatement for the first 5 tax years the abatement is approximately $600,000 per annum, and the amount of the abatement will reduce by 20.0% per property tax year thereafter. |
| (3) | NOI Debt Yield and NCF DSCR calculations are based on the 50 Varick Street Loan Combination. |
| ■ | Appraisal.According to the appraisal, the 50 Varick Street Property has an “as-is” appraised value of $140,000,000 as of July 7, 2017. |
Appraisal Approach(1) | “As-Is Appraised Value” | Discount Rate | Capitalization Rate(2) |
| Income Capitalization Approach | $140,000,000 | N/A | 5.0% |
| (1) | Based on the “as-is” appraised value. |
| (2) | Represents the terminal capitalization rate. |
| ■ | Environmental Matters. Based on a Phase I environmental report dated June 2, 2017, the environmental consultant did not identify evidence of any recognized environmental conditions or recommendations for further action at the 50 Varick Street Property. |
| ■ | Market Overview and Competition. According to the appraisal, the 50 Varick Street Property is located in the 50 Varick Street Condominium in Manhattan, New York City within the New York-Jersey City-White Plains NY-NJ Metropolitan Statistical Area (“New York MSA”). New York City is predominantly a service-oriented economy, with approximately 95.0% of the current employment within the services producing sector. With 151,678 full-time employees in 2014, the City of New York is the area’s top employer. New York Department of Education is the second largest employer in the area with 119,618 employees, and the third is the US government with 80,900 employees. Overall employment increased year over year by 2.2%. Educational & Health Services is the largest sector in New York City, it has grown by 3.9% when compared to the same time in the previous year, and accounts for 20.3% of total employment. |
Transportation has been a major factor in the development of New York City. The city has a well-integrated network of highways with a well-developed mass transportation system which facilitates access for commuters as well as the distribution of goods and services through the region. Two of the area airports, LaGuardia and JFK International Airports are both located within Queens. Automobile is the primary mode of transportation surrounding New York City. Primary access in Manhattan is provided by mass transportation, specifically the subway system. The Long Island Expressway, the Grand Central Parkway, and Belt Parkway facilitate vehicular access to the area. The Triborough
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #9: 50 varick street
Bridge, Queensboro Bridge, Brooklyn Bridge, Williamsburg Bridge, Manhattan Bridge, Midtown Tunnel and Brooklyn-Battery Tunnel provide access to Manhattan.
According to a third party market report, the 50 Varick Street Property is located within the Midtown South office market and the Tribeca/Hudson Square office submarket. As of first quarter 2017, the Midtown South office market had an average asking rent of $74.49 per SF with a vacancy rate of 6.51%. The leasing activity for the first quarter 2017 was 1,318,898 SF and the net absorption was negative at 1,072,290 SF.
As of first quarter 2017, the Tribeca/Hudson Square office submarket had an average asking rent of $79.97 per SF with a vacancy rate of 8.0%. The leasing activity for the quarter was 341,961 SF and the net absorption was negative at 147,658 SF.
The following table presents certain information relating to lease comparable for the 50 Varick Street Property:
Office Lease Comparables(1)
50 Varick Street Property (Subject) | 205 Hudson Street | 225 Varick Street | 395 Hudson Street | 315 Hudson Street | ||
| Distance of subject | -- | 0.2 miles | 0.5 miles | 0.6 miles | 0.4 miles | |
| Year Built / Renovated | 1960/2013 | 1928 | 1926 | 1921 | 1907 | |
| Building SF | 158,574 | 401,000 | 377,000 | 600,000 | 485,000 | |
| Total Occupancy | 100.0%(2) | 98.0% | 93.8% | 100.0% | 93.3% | |
| Tenant | -- | WeWork | Optomen Productions | SY Partners | One Kings Lane | |
| Lease SF | 158,574 | 94,740 | 227,009 | 18,849 | 51,576 | |
| Base Rent | $48.91 | $56.00 | $47.03 | $47.98 | $59.48 | |
315 Hudson Street | 325 Hudson Street | 180 Varick Street | 435 Hudson Street | |
| Distance of subject | 0.4 miles | 0.4 miles | 0.4 miles | 0.7 miles |
| Year Built / Renovated | 1907 | 1965/1999 | 1930 | 1937 |
| Building SF | 485,000 | 223,000 | 329,000 | 289,000 |
| Total Occupancy | 93.3% | 85.9% | 85.0% | 86.0% |
| Tenant | Galvanize | Pilot Fiber | 2X4 | Baron & Baron, Inc. |
| Lease SF | 54,590 | 19,421 | 10,083 | 15,215 |
| Base Rent | $62.00 | $52.53 | $59.90 | $66.72 |
| (1) | Source: Appraisal. |
| (2) | Per underwritten rent roll dated July 1, 2017. |
| ■ | The Borrowers. The borrowers are Varick 3 LLC and Varick 4 LLC (collectively, the “50 Varick Street Borrower”), two tenants-in-common, each indirectly owned and directly controlled by the borrower sponsor and guarantor Alessandro Cajrati Crivelli. In June 2017, Mr. Crivelli provided a net worth letter confirming a net worth in excess of $100.0 million. Legal counsel to the borrower delivered a non-consolidation opinion has been delivered in connection with the origination of the 50 Varick Street Loan Combination. |
Mr. Crivelli founded Est4te Four, an international investment and development group known for creating innovative workspaces dedicated to the global fashion, art and design industries. The firm has been led by Mr. Crivelli for over 18 years and has focused its investments in Milan, London, and New York. Est4te Four also has several projects in Los Angeles and has an office in West Hollywood, California.
| ■ | Escrows. On the origination date of the 50 Varick Street Loan Combination, the 50 Varick Street Borrower funded a reserve of (i) $219,873 for real estate taxes, (ii) $12,654 for insurance, (iii) $28,125 for a deferred maintenance reserve, (iv) approximately $2,965,935 into a security deposit escrow, (v) $1,844,282 for a free rent reserve and (vi) $45,778 for a condominium common charges reserve. |
Additionally, on each payment date, the 50 Varick Street Borrower is required to fund the following reserves with respect to the 50 Varick Street Property: (i) an amount equal to one-twelfth of the amount that the lender estimates will be necessary to pay taxes over the then succeeding 12-month period, which is initially estimated to be $54,968, (ii) an amount equal to one-twelfth of the amount that the lender estimates will be necessary to pay insurance premiums over the then succeeding 12-month period, which is initially estimated to be $6,327, (iii) an amount equal to $1,982 to pay for capex improvements, (iv) an amount equal to $11,232 to fund future tenant improvements and leasing commissions and (v) monthly deposits for condominium charges for common charges, maintenance fees, and other assessments pursuant to the condominium documents, including, without limitation, water rates and sewer rates.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #9: 50 varick street
| ■ | Lockbox and Cash Management. The 50 Varick Street Loan Combination is structured with a hard lockbox and in place cash management. Except during a 50 Varick Street Trigger Period (as defined below), all sums in the cash management account in excess of amounts necessary to pay debt service and required reserves are remitted to the 50 Varick Street Borrower. During the continuance of a 50 Varick Street Trigger Period, provided no event of default under the 50 Varick Street Loan Combination documents is continuing, all sums in the cash management account in excess of the amount necessary to pay debt service, required reserves and operating expenses are required to be deposited into an excess cash flow reserve. Provided no event of default under the 50 Varick Street Loan Combination documents is continuing, funds in the excess cash flow reserve are required to be held by the lender as additional collateral for the 50 Varick Street Loan Combination. Upon the occurrence and during the continuance of an event of default under the 50 Varick Street Loan Combination documents, the lender may apply any funds in the cash management account to amounts payable under the 50 Varick Street Loan Combination (and/or toward the payment of expenses of the 50 Varick Street Property), in such order of priority as the lender may determine. |
A“50 Varick Street Trigger Period” means a period commencing upon the earliest of (i) an event of default occurring under the 50 Varick Street Loan Combination or the property management agreement, (ii) the debt service coverage ratio being less than 1.25x, (iii) the occurrence of a 50 Varick Street Significant Tenant Trigger Period (as defined below), and (iv) any damage to the 50 Varick Street Property which cannot be reconstructed to same size, configuration or use, and expiring upon (w) with regard to any 50 Varick Street Trigger Period commenced in connection with clause (i) above, the cure of such event of default, (x) with regard to any 50 Varick Street Trigger Period commenced in connection with clause (ii) above, the date that the debt service coverage ratio is equal to or greater than 1.35x for six consecutive calendar months,(y) with regard to any 50 Varick Street Trigger Period commenced in connection with clause (iii) above, a 50 Varick Street Significant Tenant Trigger Period ceasing to exist in accordance with the 50 Varick Street Loan Combination documents, and (z) with regard to any 50 Varick Street Trigger Period commenced in connection with clause (iv) above, the date on which the 50 Varick Street Property is legally reconstructed to its condition or substantial equivalent prior to such damage.
A “50 Varick Street Significant Tenant Trigger Period” means a period commencing upon the first to occur of (i) 50 Varick Street Significant Tenant (as defined below) ceasing the conduct, or giving notice of its intent to cease the conduct, of its normal business operations at substantially all of its leased premises (including subleasing substantially all of its leased premises other than a sublease expressly permitted pursuant to an unilateral right of such a Specified Tenant) and (ii) any 50 Varick Street Significant Tenant (or such tenant’s parent, if applicable) becomes insolvent or becomes a debtor in a bankruptcy action.
A“50 Varick Street Significant Tenant” means, as applicable, (i) any tenant occupying more than 25% of the 50 Varick Street Property (either physical or economic occupancy), with Spring Studios and Spring Place each acting as a 50 Varick Street Significant Tenant at the closing of the 50 Varick Street Loan Combination. The Spring Place lease is guaranteed by Spring Place One, LTD, the parent of the tenant (the “Spring Place Guarantor”).
| ■ | Property Management. The 50 Varick Street Property is managed by Smith Murdock Company, LLC. |
| ■ | Mezzanine or Secured Subordinate Indebtedness. Not permitted. |
| ■ | Release of Collateral. Not permitted. |
| ■ | Terrorism Insurance. The 50 Varick Street Borrower is required to obtain and maintain property insurance against loss or damage by fire, wind (including named storms), lightning and such other perils as are included in a standard “all risk” or “special form” policy, including riot and civil commotion, vandalism, terrorist acts, malicious mischief, burglary and theft, in an amount equal to 100% of the “full replacement cost” of the 50 Varick Street Property and improvements and betterments of 50 Varick Street Borrower’s unit. In addition, the 50 Varick Street Borrower is required to obtain and maintain commercial general liability insurance and business income or rental loss insurance. See “Risk factors—Terrorism Insurance May Not Be Available for All Mortgaged Properties” in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
113
LOAN #10: MALL OF LOUISIANA |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
114
LOAN #10: MALL OF LOUISIANA |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
115
LOAN #10: MALL OF LOUISIANA |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
116
LOAN #10: MALL OF LOUISIANA |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
117
LOAN #10: MALL OF LOUISIANA |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
118
LOAN #10: MALL OF LOUISIANA |
| Mortgaged Property Information | Mortgage Loan Information | ||||
| Number of Mortgaged Properties | 1 | Loan Seller(3) | CREFI | ||
| Location (City/State) | Baton Rouge, Louisiana | Cut-off Date Balance(4) | $28,000,000 | ||
| Property Type | Retail | Cut-off Date Balance per SF(2) | $418.39 | ||
| Size (SF) | 776,789 | Percentage of Initial Pool Balance | 2.9% | ||
| Total Occupancy as of 6/30/2017(1) | 91.8% | Number of Related Mortgage Loans | None | ||
| Owned Occupancy as of 6/30/2017(1) | 91.8% | Type of Security | Fee Simple | ||
| Year Built / Latest Renovation | 1997 / 2008 | Mortgage Rate | 3.98400% | ||
| Appraised Value | $570,000,000 | Original Term to Maturity (Months) | 120 | ||
| Appraisal Date | 6/23/2017 | Original Amortization Term (Months) | 360 | ||
| Borrower Sponsor | GGP Real Estate Holding I, Inc. | Original Interest Only Period (Months) | 36 | ||
| Property Management | Self Managed | First Payment Date | 9/1/2017 | ||
| Maturity Date | 8/1/2027 | ||||
| Underwritten Revenues | $43,215,234 | ||||
| Underwritten Expenses | $7,152,311 | Escrows(5) | |||
| Underwritten Net Operating Income (NOI) | $36,062,923 | Upfront | Monthly | ||
| Underwritten Net Cash Flow (NCF) | $34,433,637 | Taxes | $0 | $0 | |
| Cut-off Date LTV Ratio(2) | 57.0% | Insurance | $0 | $0 | |
| Maturity Date LTV Ratio(2) | 49.3% | Replacement Reserve | $0 | $0 | |
| DSCR Based on Underwritten NOI / NCF(2) | 1.94x / 1.85x | TI/LC | $0 | $0 | |
| Debt Yield Based on Underwritten NOI / NCF(2) | 11.1% / 10.6% | Other | $0 | $0 | |
| Sources and Uses | ||||||
| Sources | $ | % | Uses | $ | % | |
| Loan Combination Amount | $325,000,000 | 100.0% | Principal Equity Distribution(6) | $323,588,541 | 99.6% | |
| Closing Costs | 1,411,459 | 0.4 | ||||
| Total Sources | $325,000,000 | 100.0% | Total Uses | $325,000,000 | 100.0% | |
| (1) | Total Occupancy and Owned Occupancy include the third largest tenant, Main Event, which has a signed lease but is not expected to take physical occupancy and commence paying rent until August 2018, and exclude temporary tenants. |
| (2) | Calculated based on the aggregate outstanding principal balance of the Mall of Louisiana Loan Combination (as defined below). |
| (3) | The Mall of Louisiana Loan Combination was co-originated by Bank of America, N.A. (“BANA”), Citi Real Estate Funding Inc. (“CREFI”) and Barclays Bank PLC (“Barclays”). |
| (4) | The Cut-off Date Balance of $28,000,000 represents the non-controlling note A-3-2, which note is part of a loan combination evidenced by ninepari passu notes having an aggregate outstanding principal balance as of the Cut-off Date of $325,000,000. The related companion loans are evidenced by (i) the controlling note A-1 ($65,000,000), which was contributed to the BANK 2017-BNK7 securitization transaction, (ii) the non-controlling note A-2 ($44,000,000), which is currently held by BANA and is expected to be contributed to the MSBAM 2017-C34 securitization transaction, (iii) the non-controlling notes A-3-1 and A-5-2 ($47,000,000), which were contributed to the CGCMT 2017-P8 securitization transaction, (iv) the non-controlling note A-4 ($50,000,000), which was contributed to the COMM 2017-COR2 securitization transaction, (v) the non-controlling notes A-6 and A-7 ($50,000,000), which are currently held by Barclays and are expected to be contributed to the WFCM 2017-C40 securitization transaction and (vi) the non-controlling note A-5-1 ($41,000,000), which is currently held by Barclays or an affiliate, and is expected to be contributed to one or more future securitization transactions. See “—The Mortgage Loan” below. |
| (5) | GGP Real Estate Holding I, Inc., as guarantor, has delivered a Main Event guaranty with respect to (i) completion of certain required work by the borrowers under the Main Event lease and (ii) rent obligations in lieu of posting an upfront cash reserve for the obligations. See “—Escrows” below. |
| (6) | The borrower sponsor acquired the Mall of Louisiana Property for approximately $265 million in 2004 and, inclusive of the $100 million spent on the 2008 property expansion, maintains a cost basis of approximately $413 million. The Mall of Louisiana Property was not encumbered by any prior existing debt. |
| ■ | The Mortgage Loan. The mortgage loan (the “Mall of Louisiana Loan”) is part of a loan combination (the “Mall of Louisiana Loan Combination”) evidenced by ninepari passu notes that are collectively secured by a first mortgage encumbering the borrowers’ fee interest in a super-regional mall located in Baton Rouge, Louisiana (the “Mall of Louisiana Property”). The Mall of Louisiana Loan, which is evidenced by the non-controlling note A-3-2, had an original principal balance of $28,000,000, has an outstanding principal balance as of the Cut-off Date of $28,000,000 and represents approximately 2.9% of the Initial Pool Balance. The related companion loans had an aggregate original principal balance of $297,000,000, have an aggregate outstanding principal balance as of the Cut-off Date of $297,000,000 and are evidenced by (i) the controlling note A-1, which has an outstanding principal balance as of the Cut-off Date of $65,000,000 and was contributed to the BANK 2017-BNK7 securitization transaction, (ii) the non-controlling note A-2, which has an outstanding principal balance as of the Cut-off Date of $44,000,000, is currently held by BANA and is expected to be contributed to the MSBAM 2017-C34 securitization transaction, (iii) the non-controlling notes A-3-1 and A-5-2, which have an aggregate outstanding principal balance as of the Cut-off Date of $47,000,000, and were contributed to the CGCMT 2017-P8 securitization transaction, (iv) the non-controlling note A-4, which has an outstanding principal balance as of the Cut-off Date of $50,000,000 and was contributed to the COMM 2017-COR2 securitization transaction, (v) the non-controlling notes A-6 and A-7, which have an aggregate outstanding principal balance as of the Cut-off Date of $50,000,000, are currently held by Barclays and are expected to be contributed to the WFCM 2017-C40 securitization transaction and (vi) the non-controlling note A-5-1, which has an outstanding principal balance as of the Cut-off Date of $41,000,000, is currently held by Barclays and is expected to be contributed to one or more future securitization transactions. The Mall of Louisiana Loan Combination was co-originated by BANA, CREFI and Barclays on July 26, 2017, had an original principal balance of $325,000,000 and has an outstanding principal balance as of the Cut-off Date of $325,000,000. Each note evidencing the Mall of Louisiana Loan Combination accrues interest at an interest rate of 3.98400%per annum. The proceeds of the Mall of Louisiana Loan Combination were primarily used to encumber the Mall of Louisiana Property and pay origination costs. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #10: MALL OF LOUISIANA |
Note Summary
| Note(s) | Current or Anticipated Holder of Securitized Note | Aggregate Cut-off Date Balance |
Mall of Louisiana Loan
| ||
| A-3-2 | CGCMT 2017-C4 | $28,000,000 |
Mall of Louisiana Pari Passu Companion Loans
| ||
| A-1 | BANK 2017-BNK7 | $65,000,000 |
| A-2 | MSBAM 2017-C34(1) | $44,000,000 |
| A-3-1 and A-5-2 | CGCMT 2017-P8 | $47,000,000 |
| A-4 | COMM 2017-COR2 | $50,000,000 |
| A-5-1 | Barclays(2) | $41,000,000 |
| A-6 and A-7 | WFCM 2017-C40(1) | $50,000,000 |
| (1) | Expected to be contributed to the related securitization transaction upon closing of such securitization transaction. |
| (2) | Expected to be contributed to one or more future securitization transactions. |
The Mall of Louisiana Loan Combination has an initial term of 120 months and has a remaining term of 118 months as of the Cut-off Date. The Mall of Louisiana Loan Combination requires interest only payments for the initial 36 months, followed by payments of principal and interest sufficient to amortize the Mall of Louisiana Loan Combination over a 30-year amortization schedule. The scheduled maturity date of the Mall of Louisiana Loan Combination is the due date in August 2027. Provided that no event of default has occurred and is continuing under the Mall of Louisiana Loan Combination documents, at any time after the earlier of August 1, 2020 and the second anniversary of the securitization of the last portion of the Mall of Louisiana Loan Combination, the Mall of Louisiana Loan Combination may be defeased with certain direct full faith and credit obligations of the United States of America or other obligations which are “government securities” permitted under the Mall of Louisiana Loan Combination documents. Voluntary prepayment of the Mall of Louisiana Loan Combination is permitted (in whole, but not in part) without penalty on or after the due date in May 2027.
| ■ | The Mortgaged Property. The Mall of Louisiana Property is part of a two-story enclosed super-regional mall known as the Mall of Louisiana, which contains a total of 1,593,545 SF and is anchored by non-collateral anchors Dillard’s, Dillard’s Men’s & Home, JC Penney, Macy’s and Sears. The 776,789 SF portion of the Mall of Louisiana that serves as collateral for the Mall of Louisiana Loan Combination was 91.8% occupied as of June 30, 2017 by 135 retail and restaurant tenants. The largest tenants by size are AMC Theatres (9.6% of GLA, 5.9% of underwritten base rent, expiring July 2026), Dick’s Sporting Goods (9.5% of GLA, 3.3% of underwritten base rent, expiring January 2019), Nordstrom Rack (3.9% of GLA, 2.0% of underwritten base rent, expiring September 2025) and Forever 21 (3.5% of GLA, 5.1% of underwritten base rent, expiring January 2019). Main Event (6.0% of GLA, 4.0% of underwritten base rent, expiring June 2028) has a signed lease but is not expected to take occupancy and commence paying rent until August 2018. The Mall of Louisiana Loan Combination guarantor has provided a guaranty for all outstanding borrower obligations and fifteen months of gap rent with respect to the Main Event lease. |
Aside from the tenants mentioned above, no tenant represents more than 1.9% of GLA or 2.6% of underwritten rent. Other notable tenants at the Mall of Louisiana Property include: Apple, DSW, Lush Fresh Handmade Cosmetics, Michael Kors, Pandora, Pottery Barn and Williams Sonoma. The Mall of Louisiana Property features an 11-bay food court and nine full service restaurants. Inline sales at the Mall of Louisiana Property as of the trailing 12-month period ending May 31, 2017 were approximately $183 million with an average of $585 per SF ($496 per SF excluding Apple), resulting in an occupancy cost of 13.6% (16.1% excluding Apple).
The Mall of Louisiana Property was built in 1997 and renovated in 2008 with a $100 million expansion project which added over 330,000 SF, comprised of a 125,000 SF lifestyle component, a 140,000 SF power center and 15-screen stadium seating cinema with IMAX – 3D. The Mall of Louisiana features the only Sears within 40 miles and the only Macy’s, Dick’s Sporting Goods and Nordstrom Rack within approximately 60 miles. The Mall of Louisiana Property includes 8,404 surface parking spaces (approximately 5.27 per 1,000 SF).
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #10: MALL OF LOUISIANA |
Non-Collateral Anchor Sales Summary
| Tenant Name | Credit Rating (Fitch/MIS/S&P)(1) | Tenant GLA(2) | Sales per SF(3) | |||
| Dillard’s / Dillard’s Men’s & Home | BBB-/Baa3/BBB- | 370,655 | $148 | |||
| Macy’s | BBB/Baa3/BBB- | 204,890 | $166 | |||
| JC Penney | B+/B1/B+ | 116,568 | $309 | |||
| Sears | CC/Caa2/CCC+ | 113,517 | $123 |
| (1) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
| (2) | Source: Appraisal. |
| (3) | Sales per SF for the non-collateral anchor tenants are as of 2016 as reported in the appraisal. |
The following table presents certain information relating to the major tenants (of which certain tenants may have co-tenancy provisions) at the Mall of Louisiana Property:
Ten Largest Owned Tenants Based on Underwritten Base Rent(1)
Tenant Name | Credit Rating | Tenant GLA | % of Owned GLA | UW Base Rent | % of Total UW Base Rent | UW Base Rent $ per SF(3) | Lease Expiration | Tenant Sales $ per SF/Screen(4) | Occupancy Cost(4) | Renewal / Extension Options | ||||||||||
| AMC Theatres | B/B1/B+ | 74,400 | 9.6% | $1,739,472 | 5.9% | $23.38 | 7/21/2026 | $560,583(5) | 22.6% | 4, 5-year options | ||||||||||
| Forever 21 | NR/NR/NR | 26,885 | 3.5 | 1,483,980 | 5.1 | $55.20 | 1/31/2019 | $183 | 28.6% | NA | ||||||||||
| Main Event(6) | NR/NR/NR | 46,900 | 6.0 | 1,172,500 | 4.0 | $25.00 | 6/30/2028 | NA | NA | 3, 5-year options | ||||||||||
| Dick’s Sporting Goods | NR/NR/NR | 74,061 | 9.5 | 962,793 | 3.3 | $13.00 | 1/31/2019 | $131 | 11.9% | 4, 5-year options | ||||||||||
| Gap/Gapkids | BB+/Baa2/BB+ | 9,761 | 1.3 | 758,019 | 2.6 | $77.66 | 12/31/2017 | $245 | 31.9% | NA | ||||||||||
| Victoria’s Secret | BB+/Ba1/BB+ | 13,472 | 1.7 | 648,138 | 2.2 | $48.11 | 1/31/2023 | $847 | 11.9% | NA | ||||||||||
| Express | NR/NR/NR | 9,769 | 1.3 | 601,673 | 2.1 | $61.59 | 1/31/2020 | $309 | 37.6% | NA | ||||||||||
| Nordstrom Rack(7) | BBB+/Baa1/BBB+ | 30,002 | 3.9 | 577,500 | 2.0 | $19.25 | 9/30/2025 | NA | NA | 4, 5-year options | ||||||||||
| Champs Sports(8) | NR/Ba2/BB+ | 6,293 | 0.8 | 500,734 | 1.7 | $79.57 | 7/31/2026 | $479 | 16.0% | NA | ||||||||||
| House of Hoops By Foot Locker(8) | NR/Ba2/BB+ | 6,459 | 0.8 | 500,443 | 1.7 | $77.48 | 1/31/2021 | $838 | 10.8% | NA | ||||||||||
| Ten Largest Owned Tenants | 298,002 | 38.4% | $8,945,251 | 30.5% | $30.02 | |||||||||||||||
| Other | 415,132 | 53.4 | 20,369,579 | 69.5 | $49.07 | |||||||||||||||
| Vacant | 63,655 | 8.2 | 0 | 0.0 | $0.00 | |||||||||||||||
| Total / Wtd. Avg. All Owned Tenants | 776,789 | 100.0% | $29,314,830 | 100.0% | $41.11 | |||||||||||||||
| (1) | Based on the underwritten rent roll dated June 30, 2017. |
| (2) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
| (3) | Total / Wtd. Avg. UW Base Rent $ per SF is calculated excluding vacant SF. |
| (4) | Sales information is for the trailing 12-month period ending May 31, 2017. |
| (5) | Tenant Sales $ per SF/Screen are shown per screen (15 screens). |
| (6) | Main Event has an executed lease but is not expected to take occupancy and commence paying rent until August 2018. The Mall of Louisiana Loan Combination guarantor has provided a guaranty for all outstanding borrower obligations and 15 months of gap rent specific to Main Event. |
| (7) | Nordstrom Rack is not required to report sales at the Mall of Louisiana Property. |
| (8) | Both tenants are affiliated subsidiaries of Foot Locker, Inc. |
The following table presents certain information relating to the comparable in-line sales at the Mall of Louisiana Property:
Tenant Sales (per SF) and Occupancy Costs(1)
Total In-Line | TTM 5/31/2017 | TTM 5/31/2017 Occupancy Cost | ||
| Comparable Sales per SF w/Apple | $585 | 13.6% | ||
| Comparable Sales per SF w/o Apple | $496 | 16.1% |
| (1) | Information as provided by the borrower sponsor. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #10: MALL OF LOUISIANA |
The following table presents certain information relating to the lease rollover schedule at the Mall of Louisiana Property, based on initial lease expiration dates:
Lease Expiration Schedule(1)(2)
Year Ending December 31 | Expiring Owned GLA | % of Owned GLA | Cumulative % of Owned GLA | UW Base Rent | % of Total UW Base Rent | UW Base Rent $ per SF(3) | # of Expiring Leases | |||||||
| MTM | 802 | 0.1% | 0.1% | $64,802 | 0.2% | $80.80 | 1 | |||||||
| 2017 | 27,165 | 3.5 | 3.6% | 2,265,955 | 7.7 | 83.41 | 10 | |||||||
| 2018 | 82,248 | 10.6 | 14.2% | 3,354,434 | 11.4 | 40.78 | 23 | |||||||
| 2019 | 165,390 | 21.3 | 35.5% | 4,979,391 | 17.0 | 30.11 | 17 | |||||||
| 2020 | 43,189 | 5.6 | 41.0% | 2,581,653 | 8.8 | 59.78 | 14 | |||||||
| 2021 | 60,190 | 7.7 | 48.8% | 2,840,401 | 9.7 | 47.19 | 16 | |||||||
| 2022 | 32,000 | 4.1 | 52.9% | 1,317,420 | 4.5 | 41.17 | 10 | |||||||
| 2023 | 39,863 | 5.1 | 58.0% | 2,544,415 | 8.7 | 63.83 | 11 | |||||||
| 2024 | 32,366 | 4.2 | 62.2% | 1,357,288 | 4.6 | 41.94 | 7 | |||||||
| 2025 | 58,878 | 7.6 | 69.8% | 1,792,374 | 6.1 | 30.44 | 9 | |||||||
| 2026 | 88,514 | 11.4 | 81.2% | 2,885,732 | 9.8 | 32.60 | 6 | |||||||
| 2027 | 11,360 | 1.5 | 82.6% | 1,081,295 | 3.7 | 95.18 | 6 | |||||||
| 2028 & Thereafter | 71,169 | 9.2 | 91.8% | 2,249,670 | 7.7 | 31.61 | 5 | |||||||
| Vacant | 63,655 | 8.2 | 100.0% | 0 | 0.0 | 0.00 | 0 | |||||||
| Total / Wtd. Avg. | 776,789 | 100.0% | $29,314,830 | 100.0% | $41.11 | 135 |
| (1) | Calculated based on the approximate square footage occupied by each Owned Tenant. |
| (2) | Certain tenants may have lease termination options that are exercisable prior to the originally stated expiration date of the subject lease and that are not considered in the Lease Expiration Schedule. |
| (3) | Wtd. Avg. UW Base Rent $ per SF excludes vacant space. |
The following table presents certain information relating to historical leasing at the Mall of Louisiana Property:
Historical Leased %(1)(2)
| 2014 | 2015 | 2016 | As of 6/30/2017(3) | |||||
| Owned Space | 94.3% | 93.8% | 92.5% | 91.8% |
| (1) | As provided by the borrowers and which represents occupancy as of December 31 for the indicated year unless otherwise specified. |
| (2) | Excludes temporary tenants. |
| (3) | Based on the underwritten rent roll dated June 30, 2017. |
| ■ | Operating History and Underwritten Net Cash Flow. The following table presents certain information relating to the historical operating performance and the Underwritten Net Cash Flow at the Mall of Louisiana Property: |
Cash Flow Analysis(1)
| 2014 | 2015 | 2016 | TTM 4/30/2017 | Underwritten | Underwritten $ per SF | |||||||
| Base Rent | $26,449,228 | $27,324,563 | $27,877,011 | $28,049,808 | $29,420,920 | $37.88 | ||||||
| Potential Income from Vacant Space | 0 | 0 | 0 | 0 | 3,395,375 | 4.37 | ||||||
| Percentage Rent | 559,072 | 516,649 | 571,657 | 591,865 | 581,929 | 0.75 | ||||||
| Total Reimbursement Revenue | 10,554,704 | 10,707,373 | 10,410,615 | 10,242,969 | 10,408,010 | 13.40 | ||||||
| Specialty Leasing Income | 3,089,790 | 3,046,453 | 3,044,110 | 2,921,431 | 2,956,431 | 3.81 | ||||||
| Other Income(2) | 402,762 | 384,936 | 331,822 | 399,049 | 384,049 | 0.49 | ||||||
| Vacancy and Credit Loss | 0 | 0 | 0 | 0 | (3,931,479) | (5.06) | ||||||
| Effective Gross Income | $41,055,555 | $41,979,974 | $42,235,214 | $42,205,123 | $43,215,234 | $55.63 | ||||||
| Total Operating Expenses | $7,514,389 | $7,399,438 | $7,196,737 | $7,209,498 | $7,152,311 | $9.21 | ||||||
| Net Operating Income | $33,541,166 | $34,580,536 | $35,038,477 | $34,995,624 | $36,062,923 | $46.43 | ||||||
| TI/LC | 0 | 0 | 0 | 0 | 1,473,928 | 1.90 | ||||||
| Capital Expenditures | 0 | 0 | 0 | 0 | 155,358 | 0.20 | ||||||
| Net Cash Flow | $33,541,166 | $34,580,536 | $35,038,477 | $34,995,624 | $34,433,637 | $44.33 | ||||||
| Occupancy | 94.3% | (3) | 93.8% | (3) | 92.5% | (3) | 91.8% | (3)(4) | 91.0% | (5) | ||
| NOI Debt Yield(6) | 10.3% | 10.6% | 10.8% | 10.8% | 11.1% | |||||||
| NCF DSCR(6) | 1.80x | 1.86x | 1.89x | 1.88x | 1.85x | |||||||
| (1) | Certain items such as straight line rent, interest expense, interest income, lease cancellation income, depreciation, amortization, debt service payments and any other non-recurring or non-operating items were excluded from the historical presentation and are not considered for the underwritten cash flow. |
| (2) | Other Income includes carousel revenue, rebates and miscellaneous non-rental income. |
| (3) | Occupancy excludes temporary tenants at the Mall of Louisiana Property. |
| (4) | Based on the June 30, 2017 rent roll. |
| (5) | Underwritten Occupancy represents the underwritten economic occupancy at the Mall of Louisiana Property. |
| (6) | NOI Debt Yield and NCF DSCR are based on the amortizing payments due on the outstanding principal balance of the Mall of Louisiana Loan Combination. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #10: MALL OF LOUISIANA |
| ■ | Appraisal.According to the appraisal, the Mall of Louisiana Property had an “as-is” appraised value of $570,000,000 as of June 23, 2017. |
Appraisal Approach | Value | Discount Rate | Capitalization Rate | |||
| Direct Capitalization Approach | $567,500,000 | N/A | 6.00% | |||
| Discounted Cash Flow Approach | $571,000,000 | 7.50% | 6.50%(1) |
| (1) | Represents the terminal capitalization rate. |
| ■ | Environmental Matters. According to the Phase I environmental report dated July 24, 2017, there was no evidence of any recognized environmental conditions or recommendations for further action at the Mall of Louisiana Property. |
| ■ | Market Overview and Competition. The Mall of Louisiana Property is located in East Baton Rouge Parish within the greater Baton Rouge metropolitan statistical area (“MSA”) of Louisiana. The Mall of Louisiana Property is located approximately 6.0 miles southeast of the Baton Rouge central business district, immediately south of Interstate 10, which connects to Interstate 12 approximately 2 miles north and connects to the New Orleans metropolitan area to the southeast. East Baton Rouge Parish includes the city of Baton Rouge and other established neighborhoods including Mid-City, the Garden District and Spanish Town and is the capital of Louisiana and the location of Louisiana State University, Southern University and Baton Rouge Community College. There are two hospitals located within two miles of the Mall of Louisiana Property: Baton Rouge General Medical Center and Our Lady of the Lake Regional Medical Center. East Baton Rouge Parish’s top employers include Turner Industries Group (9,875 employees), LSU System (6,250 employees), Performance Contractors (5,500 employees), Our Lady of the Lake Regional Medical Center (4,500 employees) and ExxonMobil Corporation (4,214 employees). IBM recently developed a $55 million office and residential building in downtown Baton Rouge and has committed to maintain 800 new jobs through 2023 in downtown Baton Rouge. The Baton Rouge MSA had a 2016 unemployment rate of 5.2%, which unemployment rate has seen a year over year decline since 2011. |
According to the appraisal, the primary trade area for the Mall of Louisiana Property encompasses an approximately fifteen-mile radius. The estimated 2016 population within a five-, ten- and fifteen-mile radius around the Mall of Louisiana Property was 169,831, 406,664 and 603,052, respectively. The estimated 2016 average household income within the same radii was $90,572, $76,294 and $74,587, respectively. The 2016 fifteen-mile radius population and average household income reflect a compound annual growth rate from 2000 to 2016 of 1.0% and 2.41%, respectively. The estimated 2016 average retail sales per household within a fifteen-mile radius of the Mall of Louisiana Property were $48,449.
The Mall of Louisiana Property is located in the Baton Rouge retail market which had 2017 first quarter-end average asking rents of $11.32 per SF and a vacancy rate of 4.5% (representing a 1.3% decrease from the first quarter end 2016), with only 11,581 SF of vacant retail space in the market. With respect to the malls within the Baton Rouge retail market, there are currently six lifestyle centers, power centers and regional malls with 2017 first quarter-end average asking rents of $19.61 per SF and a vacancy rate of 8.6% (representing a 1.7% decrease from the first quarter end 2016), with 74,739 SF of positive absorption.
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
123
LOAN #10: MALL OF LOUISIANA |
The following table presents certain information relating to the primary competition for the Mall of Louisiana Property:
Competitive Set(1)
Mall of Louisiana (Subject) | Perkins Rowe | Town Center at Cedar Lodge | Siegen Lane | Cortana Mall | ||||||
| Distance from Subject | - | 1.5 miles | 5.0 miles | 3.0 miles | 6.5 miles | |||||
| Property Type | Super Regional Mall | Lifestyle Center | Lifestyle Center | Power Center | Super Regional Mall | |||||
| Year Built / Renovated | 1997 / 2008 | 2006 / NAP | 2007 / NAP | 1994 / 2002 | 1976 / 2010 | |||||
| Total GLA | 776,789 | 749,300 | 410,000 | 462,150 | 1,360,000 | |||||
| Total Occupancy | 91.8%(2) | 85.0% | 98.0% | 100.0% | 30.0%(3) | |||||
| Estimated Sales per SF(4) | $585(5) | $420 | $400 | NAP | $250 | |||||
| Anchors | Dillard’s (non-collateral), Dillard’s Men’s (non-collateral), JC Penney (non-collateral), Macy’s (non-collateral), Sears (non-collateral), AMC Theatres | Cinemark, LA Fitness, Barnes & Noble, Fresh Market
| Whole Foods, Books A Million, LOFT, Gap | Walmart, Lowes, Bed Bath Beyond, TJ Maxx | Dillard’s, JC Penney |
| (1) | Source: Appraisal unless otherwise indicated. |
| (2) | Per underwritten rent roll. Occupancy includes the third largest tenant, Main Event, which has a signed lease but is not expected to take physical occupancy and commence paying rent until August 2018. The Mall of Louisiana Loan Combination guarantor has provided a guaranty for all outstanding borrower obligations and 15 months of gap rent specific to Main Event. |
| (3) | Cortana Mall is the only other enclosed shopping mall in Baton Rouge. Only two of the six anchor units at Cortana Mall are currently occupied and approximately 45 of 110 inline stores are occupied. |
| (4) | Not all inline tenants may be required to report sales. |
| (5) | Comparable inline sales shown as of May 31, 2017. Comparable inline sales excluding Apple for that period were $496 per SF. |
| ■ | The Borrowers. The borrowers are Mall of Louisiana, LLC and Mall of Louisiana Land, LLC (individually and collectively, the “Mall of Louisiana Borrower”), each a single-purpose Delaware limited liability company, with at least two independent directors. Legal counsel to the Mall of Louisiana Borrower delivered a non-consolidation opinion in connection with the origination of the Mall of Louisiana Loan Combination. The borrower sponsor and non-recourse carveout guarantor is GGP Real Estate Holding I, Inc., wholly owned by GGP Inc. (“General Growth”). |
General Growth is an S&P 500 company focused exclusively on owning, managing, leasing and redeveloping retail properties throughout the United States. General Growth’s portfolio as of March 2017 included 127 properties (121 million SF) in 40 states with an enterprise value of approximately $39 billion.
In addition to the recourse carveout guaranty and environmental indemnity, GGP Real Estate Holding I, Inc. has provided a guaranty for payment of unfunded tenant allowances equal to $3,986,500, landlord work equal to $3,067,797 and an additional $1,465,625, which is equal to 15 months of gap rent, all related to the Main Event lease. GGP Real Estate Holding I, Inc. also provided a guaranty for unfunded obligations related to several other tenants at the Mall of Louisiana Property equal to $1,726,914.
| ■ | Escrows.During a Mall of Louisiana Trigger Period (as defined below), unless there are sufficient funds in the lockbox account to make the deposits, the Mall of Louisiana Borrower is required on each monthly payment date to deposit (i) 1/12th of the estimated annual real estate taxes and 1/12th of the estimated annual insurance premiums (unless the Mall of Louisiana Property is covered by a blanket insurance policy and the premiums for the blanket insurance policy are prepaid for at least one year in advance), (ii) $12,931 to a replacement reserve subject to a cap of $155,169, and (iii) $129,308 to a tenant improvements and leasing commissions reserve subject to a cap of $1,551,690. |
| ■ | Lockbox and Cash Management. The Mall of Louisiana Loan Combination documents require a hard lockbox with springing cash management. Funds deposited to the lockbox are required to be swept daily to the Mall of Louisiana Borrower’s operating account unless a Mall of Louisiana Trigger Period exists. During a Mall of Louisiana Trigger Period, funds in the lockbox are required to be transferred daily to a cash management account under the sole control of the lender for the payment of, among other things, debt service, monthly escrows and operating expenses with all excess cash being deposited to an excess cash reserve to be held as additional collateral for the Mall of Louisiana Loan Combination. |
A “Mall of Louisiana Trigger Period” will commence upon the earlier of (i) an event of default and (ii) the debt service coverage ratio being less than 1.15x. A Mall of Louisiana Trigger Period will cease upon (a) with respect to clause (i), the cure or waiver of the event of default and (b) with respect to clause (ii), the debt service coverage ratio being equal to or greater than 1.15x.
| ■ | Property Management. The Mall of Louisiana Property is currently self-managed and may be managed by (i) General Growth Management, Inc., (ii) General Growth Services, Inc., (iii) General Growth, (iv) any other affiliate of the Mall of Louisiana Loan Combination guarantor entirely owned (directly or indirectly) by the Mall of Louisiana Loan |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #10: MALL OF LOUISIANA |
Combination guarantor, or (v) any Mall of Louisiana Qualifying Manager (as defined below) according to the Mall of Louisiana Loan Combination documents. So long as no event of default is continuing under the Mall of Louisiana Loan Combination documents, the Mall of Louisiana Borrower may, without the lender’s prior written consent, enter into a management agreement with a Mall of Louisiana Qualifying Manager, provided that: (i) such management agreement is on an arms’ length basis and under which the fees payable thereunder must not exceed 3% of income from gross operations, subject to commercially reasonable adjustments pursuant to then applicable market standards as reasonably approved by the lender, (ii) if such Mall of Louisiana Qualifying Manager is an affiliated property manager, the Mall of Louisiana Borrower delivers a non-consolidation opinion with respect to such manager, and (iii) such Mall of Louisiana Qualifying Manager and the Mall of Louisiana Borrower execute a subordination of management agreement. With respect to a new manager other than a Mall of Louisiana Qualifying Manager, the consent of the lender to the identity of the manager may be conditioned upon the Mall of Louisiana Borrower delivering a rating agency confirmation as to such new manager and management agreement. Upon and during the continuance of an event of default under the Mall of Louisiana Loan Combination documents, the lender has the right to require the Mall of Louisiana Borrower to replace the property manager with a Mall of Louisiana Qualifying Manager, chosen by the Mall of Louisiana Borrower and approved by the lender.
A “Mall of Louisiana Qualifying Manager” means (i) the property manager or (ii) a reputable and experienced management organization possessing experience in managing properties similar in size, scope and value to the Mall of Louisiana Property, provided that with respect to clause (ii) above, the Mall of Louisiana Borrower has obtained the prior written consent of the lender for such entity (such consent not to be unreasonably withheld or delayed, but may be based on receipt of a rating agency confirmation).
| ■ | Mezzanine or Secured Subordinate Indebtedness.Not permitted. |
| ■ | Release, Substitution or Expansion of Collateral. The Mall of Louisiana Borrower may acquire one or more Expansion Parcels (whereupon any such Expansion Parcel will become an “Acquired Expansion Parcel”), provided, among other conditions, that the following are satisfied: (i) no event of default has occurred and is continuing under the Mall of Louisiana Loan Combination documents; (ii) the related borrower acquires the fee simple or leasehold interest in the Expansion Parcel and spreads the Mall of Louisiana Loan Combination documents to include the Expansion Parcel as collateral; (iii) certain diligence is performed, including receipt of a title policy or endorsement, confirmation that the Expansion Parcel is its own tax lot and, except under the circumstances provided for in the Mall of Louisiana Loan Combination documents, receipt of a Phase I environmental report or property condition report with respect to the Expansion Parcel; and (iv) at the request of the lender, the related borrower delivers a REMIC opinion. Acquired Expansion Parcels may be released as described below. |
An “Expansion Parcel” is any parcel of land, together with any improvements thereon located, (a) constituting an integral part of, or adjoining to, or proximately located near, the shopping center of which the Mall of Louisiana Property is a part, (b) is not owned by the related borrower at origination of the Mall of Louisiana Loan Combination and (c) is not a parcel acquired in connection with a substitution described in the next paragraph.
The Mall of Louisiana Borrower may obtain the release of (i) any vacant, unimproved, non-income producing parcel (including “air rights” parcels) or outlot, (ii) any Acquired Expansion Parcel or (iii) the portion of the Mall of Louisiana Property subject to the extension and/or widening of Picardy Street by the City of Baton Rouge (the “Picardy Street Extension Parcel”), in each case, in connection with a transfer to a person other than a person owned or controlled by the Mall of Louisiana Borrower, provided, among other conditions, that the following are satisfied: (1) no event of default has occurred and is continuing under the Mall of Louisiana Loan Combination documents; (2) as it relates to any parcel release other than an Acquired Expansion Parcel release, the lender receives (a) evidence that the parcel is not necessary for the operation or use of the Mall of Louisiana Property and that such parcel may be readily separated from the Mall of Louisiana Property without material diminution of the value of the Mall of Louisiana Property and (b) a rating agency confirmation; (3) as it relates to the release of an Acquired Expansion Parcel, the lender receives from the Mall of Louisiana Borrower an officer’s certificate to the effect that (a) during the time that the Acquired Expansion Parcel was a part of the Mall of Louisiana Property, any tenants that were relocated to the Acquired Expansion Parcel from other areas of the Mall of Louisiana Property have been replaced with tenants of comparable credit quality and paying equal or better rent than the relocated tenants, and (b) to the extent existing tenants are proposed to be relocated to the Acquired Expansion Parcel after its release, the Mall of Louisiana Borrower has entered into fully executed replacement leases with replacement tenants of comparable credit quality and on rental terms equal or better than the existing tenant, and (c) the release of the Acquired Expansion Parcel does not have a material adverse effect on the use or value of the Mall of Louisiana Property, the enforcement of the Mall of Louisiana Loan Combination documents, or the Mall of Louisiana Borrower’s ability to repay the Mall of Louisiana Loan Combination; (4) the loan-to-value ratio for the remaining Mall of Louisiana Property is less than or
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #10: MALL OF LOUISIANA |
equal to 125%, provided that the Mall of Louisiana Borrower may prepay the Mall of Louisiana Loan Combination and pay the associated yield maintenance premium in order to meet the required loan-to-value ratio; and (5) at the request of the lender, a REMIC opinion is delivered.
In addition, with respect to the Mall of Louisiana Property, the Mall of Louisiana Borrower may obtain the release of a vacant, unimproved, non-income producing parcel in connection with a transfer to a person other than the Mall of Louisiana Borrower, provided, among other conditions, that the following are satisfied: (i) no event of default has occurred and is continuing under the Mall of Louisiana Loan Combination documents; (ii) simultaneous with the release, the Mall of Louisiana Borrower acquires, and encumbers as collateral for the Mall of Louisiana Loan Combination, a substitute parcel at or adjacent to the Mall of Louisiana Property of reasonably equivalent value to the release parcel; (iii) a rating agency confirmation is obtained; (iv) certain diligence is performed, including receipt of a title policy or endorsement, confirmation that the release parcel and the substitute parcel are each its own tax lot and, except under the circumstances provided for in the Mall of Louisiana Loan Combination documents, receipt of a Phase I environmental report or property condition report with respect to the substitute parcel; and (v) the loan-to-value ratio immediately after the substitution is less than or equal to 125%, provided that the Mall of Louisiana Borrower may prepay the Mall of Louisiana Loan Combination and pay the associated yield maintenance premium in order to meet the required loan-to-value ratio.
| ■ | Terrorism Insurance. The Mall of Louisiana Loan Combination documents require that the “all risk” insurance policy required to be maintained by the Mall of Louisiana Borrower provide coverage for terrorism in an amount equal to the full replacement cost of the Mall of Louisiana Property, as well as business interruption insurance covering no less than the 18-month period following the occurrence of a casualty event, together with a 12-month extended period of indemnity; provided that so long as TRIPRA is in effect, and covers both domestic and foreign acts of terrorism, the lender is required to accept terrorism insurance with coverage against acts which are “certified” within the meaning of TRIPRA in satisfaction of the foregoing requirements. If TRIPRA or a similar or subsequent statute is not in effect, provided that terrorism insurance coverage is commercially available, the Mall of Louisiana Borrower is required to carry terrorism insurance coverage as described above, or so much as may be purchased for no more than two times the insurance premium then payable for the Mall of Louisiana Property and business interruption coverage required under the Mall of Louisiana Loan Combination (without giving effect to the cost of terrorism components of such coverage). See“Risk Factors—Terrorism Insurance May Not Be Available for All Mortgaged Properties”in the Preliminary Prospectus. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #11: The Shoppes at flowers mill
| Mortgaged Property Information | Mortgage Loan Information | |||||||
| Number of Mortgaged Properties | 1 | Loan Seller | RMF | |||||
| Location (City/State) | Langhorne, Pennsylvania | Cut-off Date Principal Balance | $28,000,000 | |||||
| Property Type | Retail | Cut-off Date Principal Balance per SF | $178.56 | |||||
| Size (SF) | 156,812 | Percentage of Initial Pool Balance | 2.9% | |||||
| Total Occupancy as of 9/20/2017 | 99.1% | Number of Related Mortgage Loans | None | |||||
| Owned Occupancy as of 9/20/2017 | 99.1% | Type of Security | Fee Simple | |||||
| Year Built / Latest Renovation | 1997 / NAP | Mortgage Rate | 4.70000% | |||||
| Appraised Value | $45,600,000 | Original Term to Maturity (Months) | 120 | |||||
| Appraised Date | 8/4/2017 | Original Amortization Term (Months) | 360 | |||||
| Borrower Sponsor(3) | James J. McCaffrey, III | Original Interest Only Period (Months) | 60 | |||||
| Property Management | RC Commercial Realty, L.L.C. | First Payment Date | 11/6/2017 | |||||
| Maturity Date | 10/6/2027 | |||||||
| Underwritten Revenues | $3,756,516 | |||||||
| Underwritten Expenses | $1,218,813 | Escrows | ||||||
| Underwritten Net Operating Income (NOI) | $2,537,703 | Upfront | Monthly | |||||
| Underwritten Net Cash Flow (NCF) | $2,390,300 | Taxes | $238,420 | $56,767 | ||||
| Cut-off Date LTV Ratio | 61.4% | Insurance | $34,222 | $4,074 | ||||
| Maturity Date LTV Ratio | 56.4% | Replacement Reserves | $0 | $1,960 | ||||
| DSCR Based on Underwritten NOI / NCF | 1.46x / 1.37x | TI/LC(1) | $350,000 | $0 | ||||
| Debt Yield Based on Underwritten NOI / NCF | 9.1% / 8.5% | Other(2) | $837,130 | $0 | ||||
| Sources and Uses | |||||||
| Sources | $ | % | Uses | $ | % | ||
| Mortgage Loan Amount | $28,000,000 | 99.8% | Loan Payoff | $21,691,802 | 77.3% | ||
| Other Sources | 60,000 | 0.2 | Principal Equity Distribution | 4,331,524 | 15.4 | ||
| Reserves | 1,459,773 | 5.2 | |||||
| Closing Costs | 576,902 | 2.1 | |||||
| Total Sources | $28,060,000 | 100.0% | Total Uses | $28,060,000 | 100.0% | ||
| (1) | Subject to a $350,000 cap. |
| (2) | Consists of $87,130 for an environmental reserve related to a prior on-site dry cleaner and $750,000 for a pledge note reserve. |
| (3) | James J. McCaffrey, III is the non-recourse carveout guarantor with respect to The Shoppes at Flowers Mill Loan. |
The following table presents certain information relating to the major tenants (of which, certain tenants may have co-tenancy provisions) at The Shoppes at Flowers Mill Property:
Ten Largest Owned Tenants Based On Underwritten Base Rent(1)
Tenant Name | Credit Rating (Fitch/MIS/S&P)(2) | Tenant | % of | UW Base Rent(3) | % of | UW Base | Lease Expiration | Tenant Sales | Occupancy Cost(4) | Renewal / | ||||||||||||
| Giant Foods Stores | BBB / Baa2 / BBB | 62,365 | 39.8 | % | $623,650 | 22.6 | % | $10.00 | 9/30/2029 | NAV | NAV | 4, 5-year options | ||||||||||
| Rite Aid (Eckerd Corp) | B / B3 / B | 15,000 | 9.6 | 310,000 | 11.2 | $20.67 | 6/30/2019 | $658 | 4.1% | 4, 5-year options | ||||||||||||
| Talbot’s | NR / NR / NR | 8,600 | 5.5 | 210,700 | 7.6 | $24.50 | 1/31/2025 | $274 | 11.2% | None | ||||||||||||
| Santander Bank | NR / Baa2 / BBB+ | 2,500 | 1.6 | 185,000 | 6.7 | $74.00 | 12/31/2029 | $599 | 13.7% | 1, 6-year option | ||||||||||||
| Jos. A. Banks | NR / NR / NR | 4,500 | 2.9 | 144,000 | 5.2 | $32.00 | 9/30/2018 | $382 | 10.2% | 2, 5-year options | ||||||||||||
| Dawson’s (James Lukens) | NR / NR / NR | 8,500 | 5.4 | 121,550 | 4.4 | $14.30 | 12/31/2023 | NAV | NAV | 1, 4-year 11-month option | ||||||||||||
| Chico’s FAS, Inc. | NR / NR / NR | 3,546 | 2.3 | 95,742 | 3.5 | $27.00 | 11/30/2021 | NAV | NAV | 2, 5-year options | ||||||||||||
| PA-LCB | NR / Aa3 / AA- | 6,000 | 3.8 | 90,000 | 3.3 | $15.00 | 4/30/2022 | NAV | NAV | None | ||||||||||||
| BB&T Bank | A+ / A2 / A- | 3,450 | 2.2 | 82,500 | 3.0 | $23.91 | 6/30/2021 | NAV | NAV | 1, 5-year option | ||||||||||||
| Orange Theory (Ram Fitness) | NR / NR / NR | 3,280 | 2.1 | 78,720 | 2.8 | $24.00 | 1/31/2026 | $196 | 16.2% | 2, 5-year options | ||||||||||||
| Ten Largest Owned Tenants | 117,741 | 75.1 | % | $1,941,862 | 70.3 | % | $16.49 | |||||||||||||||
| Remaining Owned Tenants | 37,671 | 24.0 | 820,686 | 29.7 | $21.79 | |||||||||||||||||
| Vacant Spaces (Owned Space) | 1,400 | 0.9 | 0 | 0 | $0.00 | |||||||||||||||||
| Total / Wtd. Avg. All Owned Tenants | 156,812 | 100.0 | % | $2,762,548 | 100.0 | % | $17.78 | |||||||||||||||
| (1) | Based on the underwritten rent roll dated September 20, 2017. |
| (2) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
| (3) | UW Base Rent and UW Base Rent $ per SF include contractual rent steps through October 2017, totaling $4,427. |
| (4) | Tenant Sales $ per SF and Occupancy Cost were provided by the borrower for 2016. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #11: The Shoppes at flowers mill
The following table presents certain information relating to the lease rollover schedule at The Shoppes at Flowers Mill Property, based on the initial lease expiration dates:
Lease Expiration Schedule(1)
Year Ending December 31 | Expiring Owned GLA | % of Owned GLA | Cumulative % of Owned GLA | UW | % of Total UW Base Rent | UW Base Rent $ per SF | # of Expiring Tenants | |||||||||||||
| MTM | 0 | 0.0 | % | 0.0% | $0 | 0.0 | % | $0.00 | 0 | |||||||||||
| 2017 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 | |||||||||||||
| 2018 | 8,039 | 5.1 | 5.1% | 225,519 | 8.2 | 28.05 | 4 | |||||||||||||
| 2019 | 15,000 | 9.6 | 14.7% | 310,000 | 11.2 | 20.67 | 1 | |||||||||||||
| 2020 | 9,298 | 5.9 | 20.6% | 210,935 | 7.6 | 22.69 | 4 | |||||||||||||
| 2021 | 10,596 | 6.8 | 27.4% | 266,562 | 9.6 | 25.16 | 4 | |||||||||||||
| 2022 | 10,840 | 6.9 | 34.3% | 202,880 | 7.3 | 18.72 | 4 | |||||||||||||
| 2023 | 11,565 | 7.4 | 41.7% | 196,643 | 7.1 | 17.00 | 2 | |||||||||||||
| 2024 | 7,320 | 4.7 | 46.3% | 161,940 | 5.9 | 22.12 | 3 | |||||||||||||
| 2025 | 13,109 | 8.4 | 54.7% | 270,700 | 9.8 | 20.65 | 2 | |||||||||||||
| 2026 | 3,280 | 2.1 | 56.8% | 78,720 | 2.8 | 24.00 | 1 | |||||||||||||
| 2027 | 1,500 | 1.0 | 57.7% | 30,000 | 1.1 | 20.00 | 1 | |||||||||||||
| 2028 & Thereafter | 64,865 | 41.4 | 99.1% | 808,650 | 29.3 | 12.47 | 2 | |||||||||||||
| Vacant | 1,400 | 0.9 | 100.0% | 0 | 0.0 | 0.00 | 0 | |||||||||||||
| Total / Wtd. Avg. | 156,812 | 100.0 | % | $2,762,548 | 100.0 | % | $17.78 | 28 | ||||||||||||
| (1) | Calculated based on approximate square footage occupied by each tenant. |
The following table presents certain information relating to historical leasing at The Shoppes at Flowers Mill Property:
Historical Leased %(1)
2014 | 2015 | 2016 | As of 9/20/2017(2) | |||||
| Owned Space | 94.0% | 97.0% | 100.0% | 99.1% |
| (1) | As provided by the borrower which reflects average occupancy as of December 31 for the indicated year unless otherwise specified. |
| (2) | Based on the underwritten rent roll dated September 20, 2017. |
| ■ | Operating History and Underwritten Net Cash Flow. The following table presents certain information relating to the historical operating performance and the Underwritten Net Cash Flow at The Shoppes at Flowers Mill Property: |
Cash Flow Analysis(1)
2014 | 2015 | 2016 | TTM 7/31/2017 | Underwritten(2) | Underwritten | |||||||||||||
| Base Rent | $2,706,117 | $2,679,339 | $2,675,491 | $2,785,455 | $2,758,121 | $17.59 | ||||||||||||
| Contractual Rent Steps | 0 | 0 | 0 | 0 | 4,427 | 0.03 | ||||||||||||
| Overage Rent | 0 | 0 | 0 | 0 | 0 | 0.00 | ||||||||||||
| Gross Up Vacancy | 0 | 0 | 0 | 0 | 32,200 | 0.21 | ||||||||||||
| Total Rent | $2,706,117 | $2,679,339 | $2,675,491 | $2,785,455 | $2,794,748 | $17.82 | ||||||||||||
| Total Reimbursables | 912,057 | 1,069,857 | 1,088,277 | 870,301 | 1,075,623 | 6.86 | ||||||||||||
| Other Income(3) | 17,738 | 0 | 0 | 80,900 | 80,900 | 0.52 | ||||||||||||
| Less Vacancy & Credit Loss | 0 | 0 | 0 | 0 | (194,756) | (1.24) | ||||||||||||
| Effective Gross Income | $3,635,912 | $3,749,196 | $3,763,768 | $3,736,657 | $3,756,516 | $23.96 | ||||||||||||
| Total Operating Expenses | $1,279,422 | $1,223,083 | $1,264,590 | $1,138,751 | $1,218,813 | $7.77 | ||||||||||||
| Net Operating Income | $2,356,490 | $2,526,113 | $2,499,178 | $2,597,905 | $2,537,703 | $16.18 | ||||||||||||
| TI/LC | 0 | 0 | 0 | 0 | 117,609 | 0.75 | ||||||||||||
| Capital Expenditures | 0 | 0 | 0 | 0 | 29,794 | 0.19 | ||||||||||||
| Net Cash Flow | $2,356,490 | $2,526,113 | $2,499,178 | $2,597,905 | $2,390,300 | $15.24 | ||||||||||||
| (1) | Certain items such as straight line rent, interest expense, interest income, lease cancellation income, depreciation, amortization, debt service payments and any other non-recurring or non-operating items were excluded from the historical presentation and are not considered for the underwritten cash flow. |
| (2) | Underwritten cash flow based on contractual rents as of 9/20/2017 and rent steps through 10/1/2017. |
| (3) | Other income includes signage income, roof rent and other miscellaneous items. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
129
LOAN #12: las vegas retail portfolio
| Mortgaged Property Information | Mortgage Loan Information | ||||
| Number of Mortgaged Properties | 3 | Loan Seller | CREFI | ||
| Location (City/State) | Las Vegas, Nevada | Cut-off Date Balance | $27,000,000 | ||
| Property Type | Retail | Cut-off Date Balance per SF | $183.14 | ||
| Size (SF) | 147,429 | Percentage of Initial Pool Balance | 2.8% | ||
| Total Occupancy as of 8/1/2017(1) | 95.3% | Number of Related Mortgage Loans | None | ||
| Owned Occupancy as of 8/1/2017(1) | 95.3% | Type of Security | Fee Simple | ||
| Year Built / Latest Renovation(2) | Various / NAP | Mortgage Rate | 4.40000% | ||
| Appraised Value | $38,750,000 | Original Term to Maturity (Months) | 120 | ||
| Appraisal Date | 5/2/2017 | Original Amortization Term (Months) | 300 | ||
| Borrower Sponsor(3) | Bradley J. Kloss | Original Interest Only Period (Months) | 12 | ||
| Property Management | Nevada Capital Asset Management LLC | First Payment Date | 10/6/2017 | ||
| Maturity Date | 9/6/2027 | ||||
| Underwritten Revenues | $3,467,539 | ||||
| Underwritten Expenses | $801,546 | Escrows | |||
| Underwritten Net Operating Income (NOI) | $2,665,992 | Upfront | Monthly | ||
| Underwritten Net Cash Flow (NCF) | $2,455,765 | Taxes | $48,693 | $17,309 | |
| Cut-off Date LTV Ratio | 69.7% | Insurance | $3,054 | $3,054 | |
| Maturity Date LTV Ratio | 53.2% | Replacement Reserve | $0 | $1,790 | |
| DSCR Based on Underwritten NOI / NCF | 1.50x / 1.38x | TI/LC(4) | $135,000 | $14,866 | |
| Debt Yield Based on Underwritten NOI / NCF | 9.9% / 9.1% | Other(5) | $62,976 | $0 | |
| Sources and Uses(6) | |||||
| Sources | $ | % | Uses | $ | % |
| Loan Amount | $27,000,000 | 83.2% | Purchase Price | $25,800,000 | 79.5% |
| Principal’s New Cash Contribution | 5,336,661 | 16.4 | Loan Payoff | 5,794,599 | 17.9 |
| Other Sources | 122,918 | 0.4 | Closing Costs | 605,773 | 1.9 |
| Reserves | 249,724 | 0.8 | |||
| Other Uses | 9,485 | 0.0 | |||
| Total Sources | $32,459,579 | 100.0% | Total Uses | $32,459,579 | 100.0% |
| (1) | Total Occupancy and Owned Occupancy are based on the underwritten rent roll dated August 1, 2017 for The Village at Craig Road (“Craig Road”) and Shops at Boca Park (“Boca Park”) Properties. Total Occupancy and Owned Occupancy are based on the underwritten rent roll dated August 4, 2017 for the Shops & Gym at Durango Arby Plaza (“Durango”) Property. |
| (2) | The Durango, Craig Road and Boca Park Properties were built in 2015, 2008 and 2003, respectively. |
| (3) | Bradley J. Kloss is the non-recourse carveout guarantor under the Las Vegas Retail Portfolio Loan. |
| (4) | The TI/LC reserve is capped at $650,000. |
| (5) | Other Upfront reserves consist of $62,976 for free rent. |
| (6) | The Las Vegas Retail Portfolio loan was used to retire existing debt on the Craig Road Property and to acquire the Durango and the Boca Park Properties for a purchase price of $18,000,000 and $7,800,000, respectively. |
The following table presents certain information relating to the individual Las Vegas Retail Portfolio Properties:
Las Vegas Retail Portfolio Summary
Property Name | Year Built | Building GLA | Building Occupancy | Occupancy Date | Allocated Cut-off Date Balance | % Allocated Cut-off Date Balance | Appraised Value | % Appraised Value | UW NCF |
| Shops & Gym at Durango Arby Plaza | 2015 | 60,250 | 100.0% | 8/4/2017 | $14,062,500 | 52.1% | $18,750,000 | 48.4% | $1,147,247 |
| The Village at Craig Road | 2008 | 73,179 | 90.5% | 8/1/2017 | 7,009,500 | 26.0 | 12,200,000 | 31.5 | 830,531 |
| Shops at Boca Park | 2003 | 14,000 | 100.0% | 8/1/2017 | 5,928,000 | 22.0 | 7,800,000 | 20.1 | 477,987 |
| Total / Wtd. Avg. | 147,429 | 95.3% | $27,000,000 | 100.0% | $38,750,000 | 100.0% | $2,455,765 |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #12: las vegas retail portfolio
The following table presents certain information relating to the major tenants (of which certain tenants may have co-tenancy provisions) at the Las Vegas Retail Portfolio Properties:
Ten Largest Owned Tenants Based on Underwritten Base Rent(1)
Property Name | Tenant Name(2) | Credit Rating (Fitch/MIS/S&P)(3) | Tenant GLA | % of Owned GLA | UW Base Rent(4) | % of Total UW Base Rent(4) | UW Base Rent $ per SF(4) | Lease Expiration | Renewal / Extension Options | ||||||||||
| Durango | EOS Fitness | NR / NR / NR | 34,610 | 23.5% | $551,000 | 18.2 | % | $15.92 | 4/30/2031 | 3, 5-year options | |||||||||
| Craig Road | State of Nevada Division of Welfare and Supportive Services | NR / NR / NR | 18,500 | 12.5 | 430,680 | 14.2 | $23.28 | 6/30/2024 | NAP | ||||||||||
| Boca Park | Men’s Wearhouse | NR / B3 / B | 6,280 | 4.3 | 207,240 | 6.9 | $33.00 | 2/28/2021 | 2, 5-year options | ||||||||||
| Boca Park | Massage Envy | NR / NR / NR | 3,000 | 2.0 | 154,970 | 5.1 | $51.66 | 11/8/2019 | 1, 5-year option | ||||||||||
| Boca Park | Mattress Firm | NR / Baa3 / NR | 3,000 | 2.0 | 132,000 | 4.4 | $44.00 | 6/30/2021 | 1, 5-year option | ||||||||||
| Durango | Wag N Wash | NR / NR / NR | 4,170 | 2.8 | 128,472 | 4.2 | $30.81 | 10/31/2020 | 2, 5-year options | ||||||||||
| Durango | Sweet Poke Management, Inc. | NR / NR / NR | 3,499 | 2.4 | 104,970 | 3.5 | $30.00 | 7/31/2028 | 2, 5-year options | ||||||||||
| Craig Road | Cosmetology Institute of Las Vegas | NR / NR / NR | 5,906 | 4.0 | 99,221 | 3.3 | $16.80 | 2/29/2020 | 2, 5-year options | ||||||||||
| Durango | The Pier 215 | NR / NR / NR | 3,332 | 2.3 | 98,840 | 3.3 | $29.66 | 4/30/2027 | 2, 5-year options | ||||||||||
| Craig Road | ATI Physical Therapy | NR / NR / NR | 5,558 | 3.8 | 96,602 | 3.2 | $17.38 | 7/31/2023 | 2, 5-year options | ||||||||||
| Ten Largest Owned Tenants | 87,855 | 59.6% | $2,003,995 | 66.3 | % | $22.81 | |||||||||||||
| Other | 52,616 | 35.7 | 1,019,121 | 33.7 | $19.37 | ||||||||||||||
| Vacant | 6,958 | 4.7 | 0 | 0.0 | $0.00 | ||||||||||||||
| Total / Wtd. Avg. All Owned Tenants | 147,429 | 100.0% | $3,023,116 | 100.0 | % | $21.52 | |||||||||||||
| (1) | Based on the underwritten rent rolls dated August 1, 2017 and August 4, 2017. |
| (2) | No tenant is required to report sales at any of the Las Vegas Retail Portfolio Properties. |
| (3) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
| (4) | UW Base Rent, % of Total UW Base Rent and UW Base Rent per SF include $56,053 of contractual rents steps taken through August 2018. |
The following table presents certain information relating to the lease rollover schedule at the Las Vegas Retail Portfolio Properties, based on initial lease expiration dates:
Lease Expiration Schedule(1)(2)
Year Ending December 31 | Expiring | % of Owned GLA | Cumulative % of | UW Base Rent(3) | % of Total UW | UW Base Rent $ | # of Expiring | ||||||||||||||
| MTM(4) | 1,295 | 0.9 | % | 0.9% | $16,981 | 0.6 | % | $13.11 | 1 | ||||||||||||
| 2017 | 0 | 0.0 | 0.9% | 0 | 0.0 | 0.00 | 0 | ||||||||||||||
| 2018 | 0 | 0.0 | 0.9% | 0 | 0.0 | 0.00 | 0 | ||||||||||||||
| 2019 | 5,157 | 3.5 | 4.4% | 218,255 | 7.2 | 42.32 | 2 | ||||||||||||||
| 2020 | 11,116 | 7.5 | 11.9% | 242,140 | 8.0 | 21.78 | 3 | ||||||||||||||
| 2021 | 31,588 | 21.4 | 33.3% | 758,931 | 25.1 | 24.03 | 13 | ||||||||||||||
| 2022 | 12,183 | 8.3 | 41.6% | 283,071 | 9.4 | 23.23 | 7 | ||||||||||||||
| 2023 | 5,558 | 3.8 | 45.4% | 96,602 | 3.2 | 17.38 | 1 | ||||||||||||||
| 2024 | 28,083 | 19.0 | 64.4% | 545,163 | 18.0 | 19.41 | 3 | ||||||||||||||
| 2025 | 1,846 | 1.3 | 65.7% | 38,544 | 1.3 | 20.88 | 1 | ||||||||||||||
| 2026 | 0 | 0.0 | 65.7% | 0 | 0.0 | 0.00 | 0 | ||||||||||||||
| 2027 | 5,536 | 3.8 | 69.4% | 167,459 | 5.5 | 30.25 | 2 | ||||||||||||||
| 2028 & Thereafter | 38,109 | 25.8 | 95.3% | 655,970 | 21.7 | 17.21 | 2 | ||||||||||||||
| Vacant | 6,958 |
| 4.7 | 100.0% | 0 |
| 0.0 |
| 0.00 |
| 0 |
| |||||||||
| Total / Wtd. Avg. | 147,429 | 100.0 | % | $3,023,116 | 100.0 | % | $21.52 | 35 | |||||||||||||
| (1) | Calculated based on the approximate square footage occupied by each collateral tenant. |
| (2) | Certain tenants may have lease termination options that are exercisable prior to the originally stated expiration date of the subject lease and that are not considered in the Lease Expiration Schedule. |
| (3) | UW Base Rent, % of Total UW Base Rent and UW Base Rent $ per SF include $56,053 of contractual rents steps taken through August 2018. |
| (4) | Wtd. Avg. UW Base Rent $ per SF excludes vacant space. |
The following table presents certain information relating to historical leasing at the Las Vegas Retail Portfolio Properties:
Historical Leased %(1)
Property Name | 2015 | 2016 | As of 8/1/2017(2) |
| Shops & Gym at Durango Arby Plaza | NAV | 100.0% | 100.0% |
| The Village at Craig Road(3) | 48.0% | 68.0% | 90.5% |
| Shops at Boca Park | 100.0% | 100.0% | 100.0% |
| (1) | As provided by the borrower and which represents occupancy as of December 31 for the indicated year unless otherwise specified. |
| (2) | Occupancy is based on the underwritten rent roll dated August 1, 2017 for the Craig Road Property and Boca Park Properties. Occupancy is based on the underwritten rent roll dated August 4, 2017 for the Durango Property. |
| (3) | The Craig Road Property was acquired in April 2015 by the borrower sponsor and has since been leased up to its 90.5% occupancy as of August 1, 2017. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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LOAN #12: las vegas retail portfolio
| ■ | Operating History and Underwritten Net Cash Flow. The following table presents certain information relating to the historical operating performance and the Underwritten Net Cash Flow at the Las Vegas Retail Portfolio Properties: |
Cash Flow Analysis(1)
2016(2) | TTM 7/31/2017(2) | Underwritten | Underwritten $ per SF | |||||||||
| Base Rent | $2,236,321 | $2,803,793 | $2,967,063 | $20.13 | ||||||||
| Contractual Rent Steps(3) | 0 | 0 | 56,053 | 0.38 | ||||||||
| Gross Up Vacancy | 0 | 0 | 141,921 | 0.96 | ||||||||
| Reimbursements | 358,793 | 471,757 | 566,715 | 3.84 | ||||||||
| Other Income(4) | 4,798 | 5,303 | 21,250 | 0.14 | ||||||||
| Vacancy & Credit Loss | (36,054) | (31,003) | (285,464) | (1.94) | ||||||||
| Effective Gross Income | $2,563,858 | $3,249,851 | $3,467,539 | $23.52 | ||||||||
| Real Estate Taxes | $156,739 | $167,686 | $196,951 | $1.34 | ||||||||
| Insurance | 37,888 | 64,148 | 34,908 | 0.24 | ||||||||
| Management Fee | 113,212 | 133,516 | 142,543 | 0.97 | ||||||||
| Other Operating Expenses | 382,182 | 417,925 | 427,144 | 2.90 | ||||||||
| Total Operating Expenses | $690,021 | $783,274 | $801,546 | $5.44 | ||||||||
| Net Operating Income | $1,873,837 | $2,466,577 | $2,665,992 | $18.08 | ||||||||
| TI/LC | 0 | 0 | 188,746 | 1.28 | ||||||||
| Capital Expenditures | 0 | 0 | 21,482 | 0.15 | ||||||||
| Net Cash Flow | $1,873,837 | $2,466,577 | $2,455,765 | $16.66 | ||||||||
| Occupancy | 84.1% | 95.3%(5) | 92.4%(6) | |||||||||
| NOI Debt Yield | 6.9% | 9.1% | 9.9% | |||||||||
| NCF DSCR | 1.05x | 1.38x | 1.38x | |||||||||
| (1) | Historical cash flow information for the Las Vegas Retail Portfolio is not presented on a portfolio basis due to the construction of the Shops & Gym at Durango Arby Plaza Property in 2015. |
| (2) | The increase from 2016 Net Operating Income to TTM 7/31/2017 Net Operating Income is mainly driven by the increase in occupancy at the Craig Road Property. The Craig Road Property was acquired in April 2015 by the borrower sponsor and has since increased occupancy from 48.0% to its current occupancy of 90.5% as of August 1, 2017. |
| (3) | Contractual Rent Steps of $56,053 are underwritten for various tenants through August 2018. |
| (4) | Other Income includes rental income from a 3-slot car wash outparcel located at the Durango Property and late fees, nonsufficient funds fees and credit card fees associated with the Craig Road Property. |
| (5) | Occupancy is based on the underwritten rent roll dated August 1, 2017 for the Craig Road Property and Boca Park Properties. Occupancy is based on the underwritten rent roll dated August 4, 2017 for the Durango Property. |
| (6) | Represents an underwritten economic vacancy of 7.6%. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
133
LOAN #13: torrey executive centre
| Mortgaged Property Information | Mortgage Loan Information | |||||
| Number of Mortgaged Properties | 1 | Loan Seller | CCRE | |||
| Location (City/State) | San Diego, California | Cut-off Date Balance | $25,200,000 | |||
| Property Type | Office | Cut-off Date Balance per SF | $418.06 | |||
| Size (SF) | 60,278 | Percentage of Initial Pool Balance | 2.6% | |||
| Total Occupancy as of 10/3/2017(1) | 100.0% | Number of Related Mortgage Loans | None | |||
| Owned Occupancy as of 10/3/2017(1) | 100.0% | Type of Security | Fee Simple | |||
| Year Built / Latest Renovation | 1977 / NAP | Mortgage Rate | 4.55000% | |||
| Appraised Value(2)(3) | $37,900,000 | Original Term to Maturity (Months) | 120 | |||
| Appraisal Date | 6/20/2017 | Original Amortization Term (Months) | 360 | |||
| Borrower Sponsor(4) | Douglas F. Manchester | Original Interest Only Period (Months) | 36 | |||
| Property Management | Manchester Financial Group, Inc. | First Payment Date(5) | 11/3/2017 | |||
| Maturity Date | 10/6/2027 | |||||
| Underwritten Revenues | $2,480,713 | |||||
| Underwritten Expenses | $395,452 | Escrows(3) | ||||
| Underwritten Net Operating Income (NOI) | $2,085,260 | Upfront | Monthly | |||
| Underwritten Net Cash Flow (NCF) | $2,073,205 | Taxes | $153,750 | $17,083 | ||
| Cut-off Date LTV Ratio(2) | 66.5% | Insurance | $7,363 | $1,227 | ||
| Maturity Date LTV Ratio(2) | 58.3% | Replacement Reserve | $0 | $1,005 | ||
| DSCR Based on Underwritten NOI / NCF | 1.35x / 1.35x | TI/LC | $1,506,950 | $0 | ||
| Debt Yield Based on Underwritten NOI / NCF | 8.3% / 8.2% | Other(6) | $318,150 | $0 | ||
| Sources and Uses | ||||||||||
| Sources | $ | % | Uses | $ | % | |||||
| Loan Amount | $25,200,000 | 100.0% | Loan Payoff | $17,605,703 | 69.9% | |||||
| Principal Equity Distribution | 4,458,421 | 17.7 | ||||||||
| Reserves | 1,986,213 | 7.9 | ||||||||
| Closing Costs | 1,149,664 | 4.6 | ||||||||
| Total Sources | $25,200,000 | 100.0% | Total Uses | $25,200,000 | 100.0% | |||||
| (1) | The Torrey Executive Centre Property is 100.0% occupied by The Scripps Research Institute (“TSRI”) as of October 3, 2017. |
| (2) | Appraised Value represents the “as-stabilized” value, which assumes that lease-up costs (tenant improvements, free rent and roof repairs) associated with TSRI have been incurred by the borrower sponsor or reserved for under the Torrey Executive Centre Mortgage Loan. |
| (3) | On the closing date of the Torrey Executive Centre Loan, the borrower reserved $200,100 into the Deferred Maintenance account, $1,506,950 into the Tenant Improvements and Leasing Commissions account and $118,050 into the First Payment Reserve. Because all assumptions for the “as stabilized” appraised value in the related appraisal have been met, the appraised value of $37,900,000 is treated as the “as is” appraised value for the related Mortgaged Property. Provided that TSRI is not in default under its lease during the calendar month of October during each of the seven years from 2019 to 2025, base rent payable in October of each such year is abated. Commencing in November 2018 until September 2025, the borrower is required to deposit on each monthly payment date 1/11th of the upcoming base rent due in October. |
| (4) | Douglas F. Manchester, as Trustee of the Papa Doug Trust (the “Trust”), and any successor Trustee of the Trust is the non-recourse carveout guarantor under the Torrey Executive Centre Loan. If the Trust is revoked, Douglas F. Manchester will automatically be added as an additional non-recourse carveout guarantor and as an indemnitor under the environmental indemnity agreement. |
| (5) | The Torrey Executive Centre Mortgage Loan has a three day payment default grace period with respect to monthly debt service and monthly reserve payments only. The monthly payment date occurs on the 3rd of each month. |
| (6) | Upfront other reserve represents the $118,050 in the First Payment Reserve and $200,100 in the Deferred Maintenance Reserve. |
The following table presents certain information relating to the major tenants at the Torrey Executive Centre Property:
Owned Tenant Based on Underwritten Base Rent(1)
Tenant Name | Credit Rating (Fitch/MIS/S&P)(2) | Tenant GLA | % of GLA | UW Base | % of | UW | Lease | Renewal / | ||||||||
| The Scripps Research Institute | A+ / A1 / NR | 60,278 | 100.0% | $2,342,775 | 100.0% | $38.87 | 9/30/2029 | 1, 5-year option | ||||||||
| Largest Owned Tenants | 60,278 | 100.0% | $2,342,775 | 100.0% | $38.87 | |||||||||||
| Vacant | 0 | 0.0 | 0 | 0.0 | 0.00 | |||||||||||
| Total / Wtd. Avg. All Tenants | 60,278 | 100.0% | $2,342,775 | 100.0% | $38.87 |
| (1) | Based on the underwritten rent roll. |
| (2) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
| (3) | UW Base Rent was underwritten per average contractual rent during the loan term, assuming the rent is adjusted to the floor of $38.40 per SF in October 2023, and net of the free rent received each October between 2019 and 2025 with total value of $1,570,385. In-place base rent is currently $25.57 per SF and will increase to $40.80 in 2019. . |
| (4) | The original lease term was scheduled to expire September 30, 2019. The borrower and TSRI amended the lease, extending the term through September 2029. Pursuant to the new lease, TSRI may terminate the lease effective no earlier than October 1, 2027. In the event that the tenant exercises its termination right, the tenant is required to pay to borrower an amount equal to the sum of (x) the unamortized portion of brokerage commissions, (y) the unamortized portion of the approximately $1.5 million tenant improvement allowance, and (z) the unamortized portion of the rent abatement granted to the tenant. In the event TSRI exercises this termination right, the borrower is required to deliver to lender a cash collateral deposit in the amount of $3.0 million (or an acceptable letter of credit in such amount). |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
134
LOAN #13: torrey executive centre
The following table presents the lease rollover schedule at the Torrey Executive Centre Property, based on initial lease expiration dates:
Lease Expiration Schedule(1)
Year Ending December 31 | Expiring Owned GLA | % of Owned GLA | Cumulative % of Owned GLA | UW | % of Total UW | UW Base Rent | # of Expiring Tenants | |||||||||
| 2017 | 0 | 0.0 | % | 0.0% | $0 | 0.0 | % | $0.00 | 0 | |||||||
| 2018 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 | |||||||||
| 2019 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 | |||||||||
| 2020 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 | |||||||||
| 2021 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 | |||||||||
| 2022 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 | |||||||||
| 2023 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 | |||||||||
| 2024 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 | |||||||||
| 2025 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 | |||||||||
| 2026 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 | |||||||||
| 2027 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 | |||||||||
| 2028 & Thereafter | 60,278 | 100.0 | 100.0% | 2,342,775 | 100.0 | 38.87 | 1 | |||||||||
| Vacant | 0 | 0.0 | 100.0% | 0 | 0.0 | 0.00 | 0 | |||||||||
| Total / Wtd. Avg. | 60,278 | 100.0 | % | $2,342,775 | 100.0 | % | $38.87 | 1 | ||||||||
| (1) | Pursuant to the new lease, TSRI may terminate the lease effective no earlier than 10/1/2027. In the event that the tenant exercises its termination right, the tenant is required to pay to borrower an amount equal to the sum of (x) the unamortized portion of brokerage commissions, (y) the unamortized portion of the approximately $1.5 million tenant improvement allowance, and (z) the unamortized portion of the rent abatement granted to the tenant. In the event TSRI exercises this termination right, the borrower is required to deliver to lender a cash collateral deposit in the amount of $3.0 million (or an acceptable letter of credit in such amount). |
The following table presents certain information relating to historical leasing at the Torrey Executive Centre Property:
Historical Leased %(1)(2)
2014 | 2015 | 2016 | As of 10/3/2017(3) | |||||
| Owned Space | 100.0% | 100.0% | 100.0% | 100.0% |
| (1) | As provided by the borrower and which represents occupancy as of December 31 for the indicated year unless otherwise specified. |
| (2) | The Scripps Research Institute has been a tenant at the Torrey Executive Centre Property since 1997. |
| (3) | Based on the underwritten rent roll. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
135
LOAN #13: torrey executive centre
| ■ | Operating History and Underwritten Net Cash Flow. The following table presents certain information relating to the Underwritten Net Cash Flow at the Torrey Executive Centre Property: |
Cash Flow Analysis(1)
2014 | 2015 | 2016 | TTM | Underwritten | Underwritten | |||||||||||||
| Base Rent(2)(3) | $1,504,285 | $1,421,084 | $1,463,716 | $1,492,773 | $2,244,705 | $37.24 | ||||||||||||
| Reimbursements | 210,003 | 198,616 | 217,199 | 208,521 | 312,731 | 5.19 | ||||||||||||
| Other Income | 0 | 0 | 0 | 0 | 0 | 0.00 | ||||||||||||
| Gross Revenue | $1,714,288 | $1,619,700 | $1,680,915 | $1,701,294 | $2,557,436 | $42.43 | ||||||||||||
| Vacancy & Credit Loss | 0 | 0 | 0 | 0 | (76,723 | ) | (1.27 | ) | ||||||||||
| Effective Gross Income | $1,714,288 | $1,619,700 | $1,680,915 | $1,701,294 | $2,480,713 | $41.15 | ||||||||||||
| Real Estate Taxes | $196,244 | $197,961 | $201,279 | $203,014 | $296,456 | $4.92 | ||||||||||||
| Insurance | 13,759 | 16,575 | 2,343 | 21,435 | 16,275 | 0.27 | ||||||||||||
| Management Fee(4) | 34,289 | 32,395 | 33,616 | 33,561 | 74,421 | 1.23 | ||||||||||||
| General and Administrative | 2,875 | 4,985 | 3,200 | 6,588 | 8,300 | 0.14 | ||||||||||||
| Total Operating Expenses | $247,167 | $251,915 | $240,438 | $264,598 | $395,452 | $6.56 | ||||||||||||
| Net Operating Income | $1,467,121 | $1,367,784 | $1,440,477 | $1,436,696 | $2,085,260 | $34.59 | ||||||||||||
| TI/LC | 0 | 0 | 0 | 0 | 0 | 0.00 | ||||||||||||
| Capital Expenditures | 0 | 0 | 0 | 0 | 12,056 | 0.20 | ||||||||||||
| Net Cash Flow | $1,467,121 | $1,367,784 | $1,440,477 | $1,436,696 | $2,073,205 | $34.39 | ||||||||||||
| Occupancy | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 97.0 | % | ||||||||
| NOI Debt Yield | 5.8 | % | 5.4 | % | 5.7 | % | 5.7 | % | 8.3 | % | ||||||||
| NCF DSCR(5) | 0.95 | x | 0.89 | x | 0.93 | x | 0.93 | x | 1.35 | x | ||||||||
| (1) | Certain items such as straight line rent, interest expense, interest income, lease cancellation income, depreciation, amortization, debt service payments and any other non-recurring or non-operating items were excluded from the historical presentation and are not considered for the underwritten cash flow. |
| (2) | Base Rent was underwritten per average contractual rent during the loan term, assuming the rent is adjusted to the floor of $38.40 per SF in October 2023, and net of the free rent received each October between 2019 and 2025 with total value of $1,570,385. |
| (3) | In-place base rent is $25.57 per SF. On August 1, 2017, The Scripps Research Institute executed a new ten (10) year extension, which commences October 1, 2019 at a base rent of $40.80 per SF, which is in line with the appraiser’s concluded market rent of $40.00 per SF. |
| (4) | The management agreement executed on September 8, 2017 has a contractual management fee of 3.0% of gross revenues at the Torrey Executive Center Property. |
| (5) | The debt service coverage ratio based on the current interest-only payments, in-place rent and underwritten expenses is 1.21x. The Torrey Executive Centre Loan requires interest only monthly payments for the first three years of the loan term, after which it requires monthly payments of principal and interest based on a 30-year amortization schedule. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
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The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
137
| LOAN #14: IGT RENO |
| Mortgaged Property Information | Mortgage Loan Information | |||||||||||||||||||
| Number of Mortgaged Properties | 1 | Loan Seller | CCRE | |||||||||||||||||
| Location (City/State) | Reno, Nevada | Cut-off Date Balance(4) | $25,000,000 | |||||||||||||||||
| Property Type | Mixed Use | Cut-off Date Balance per SF(3) | $63.94 | |||||||||||||||||
| Size (SF) | 1,251,179 | Percentage of Initial Pool Balance | 2.6% | |||||||||||||||||
| Total Occupancy as of 10/6/2017(1) | 100.0% | Number of Related Mortgage Loans | 2 | |||||||||||||||||
| Owned Occupancy as of 10/6/2017(1) | 100.0% | Type of Security | Fee Simple | |||||||||||||||||
| Year Built / Latest Renovation | 1996 / 2001, 2003, 2005 | Mortgage Rate | 4.25906% | |||||||||||||||||
| Appraised Value | $157,230,000 | Original Term to Maturity (Months) | 120 | |||||||||||||||||
| Appraisal Date | 3/29/2017 | Original Amortization Term (Months) | 360 | |||||||||||||||||
| Borrower Sponsors(2) | AG Net Lease III Corp. and AG Net Lease III (SO) Corp. | Original Interest Only Period (Months) | 60 | |||||||||||||||||
| Property Management | Self Managed | First Payment Date | 8/6/2017 | |||||||||||||||||
| Maturity Date | 7/6/2027 | |||||||||||||||||||
| Underwritten Revenues | $10,961,487 | |||||||||||||||||||
| Underwritten Expenses | $328,845 | Escrows | ||||||||||||||||||
| Underwritten Net Operating Income (NOI) | $10,632,642 | Upfront | Monthly | |||||||||||||||||
| Underwritten Net Cash Flow (NCF) | $9,700,013 | Taxes | $0 | $0(5) | ||||||||||||||||
| Cut-off Date LTV Ratio(3) | 50.9% | Insurance | $0 | $0(5) | ||||||||||||||||
| Maturity Date LTV Ratio(3) | 46.4% | Replacement Reserve | $0 | $0(5) | ||||||||||||||||
| DSCR Based on Underwritten NOI / NCF(3) | 2.25x / 2.05x | TI/LC | $0 | $0 | ||||||||||||||||
| Debt Yield Based on Underwritten NOI / NCF(3) | 13.3% / 12.1% | Other | $0 | $0 | ||||||||||||||||
| Sources and Uses | ||||||||||||||||||||
| Sources | $ | % | Uses | $ | % | |||||||||||||||
| Loan Combination Amount | $80,000,000 | 51.0% | Purchase Price | $156,000,000 | 99.4 | |||||||||||||||
| Principal’s New Cash Contribution | 59,383,028 | 37.9 | Closing Costs | 883,028 | 0.6 | |||||||||||||||
| Mezzanine Debt | 17,500,000 | 11.2 | ||||||||||||||||||
| Total Sources | $156,883,028 | 100.0% | Total Uses | $156,883,028 | 100.0% | |||||||||||||||
| (1) | The IGT Reno Property is currently 100% occupied by the sole tenant and is expected to remain 100% occupied as of October 6, 2017 (the Cut-off Date of the IGT Reno Loan). |
| (2) | AG Net Lease III Corp. and AG Net Lease III (SO) Corp. are the guarantors of the non-recourse carveouts under the IGT Reno Loan. |
| (3) | Calculated based on the aggregate outstanding principal balance of the IGT Reno Loan Combination (as defined below). |
| (4) | The Cut-off Date Balance of $25,000,000 is evidenced by the non-controlling note A-2-1, which is part of a $80,000,000 loan combination (the“IGT Reno Loan Combination”) evidenced by four promissory notes. The related companion loans are evidenced by (i) the controlling note A-1-A, which has an outstanding principal balance as of the Cut-off Date of $30,000,000 and was contributed to the CD 2017-CD5 securitization transaction, (ii) the non-controlling note A-1-B, which has an outstanding principal balance as of the Cut-off Date of $10,000,000 and was contributed to the CGCMT 2017-B1 securitization transaction, and (iii) the non-controlling note A-2-B, which has an outstanding principal balance as of the Cut-off Date of $15,000,000, is currently held by Cantor Commercial Real Estate Lending L.P. or an affiliate, and is expected to be contributed to one or more future securitization transactions. |
| (5) | During a period when certain triggers have occurred under the IGT Reno Loan Combination documents and neither the borrower nor the sole tenant has made certain required replacements, tax payments, or insurance payments, as applicable, under the IGT Reno Loan Combination documents, the borrower is required to deposit (i) for replacement reserves, $45,154, up to a cap of $2,709,255, (ii) for taxes, one-twelfth of an amount which would be sufficient to pay the taxes payable, or estimated by the lender to be payable, during the next ensuing 12 months assuming that said taxes are to be paid in full, and (iii) one-twelfth of an amount which would be sufficient to pay the insurance premiums due for the renewal of the coverage afforded by the policies upon the expiration thereof. |
The following table presents certain information relating to the major tenants at the IGT Reno Property:
Owned Tenant Based on Underwritten Base Rent(1)
Tenant Name | Credit Rating (Fitch/MIS/S&P) | Tenant GLA(2) | % of GLA | UW Base Rent | % of Total UW Base Rent | UW Base Rent | Lease Expiration | Renewal / Extension Options |
| International Game Technology | NR / NR / NR | 1,251,179 | 100.0% | $11,000,400 | 100.0% | $8.79 | 9/30/2032 | 3, 5-year options |
| Ten Largest Owned Tenants | 1,251,179 | 100.0% | $11,000,400 | 100.0% | $8.79 | |||
| Vacant | 0 | 0.0 | 0 | 0.0 | 0.00 | |||
| Total / Wtd. Avg. All Tenants | 1,251,179 | 100.0% | $11,000,400 | 100.0% | $8.79 | |||
| (1) | Based on the underwritten rent roll. |
| (2) | The IGT Reno Property is comprised of 660,162 SF of office space, 574,718 SF of warehouse space and 16,299 SF of day care space. The allocated rents per SF are $13.24, $3.64, and $10.39, respectively. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
138
| LOAN #14: IGT RENO |
The following table presents the lease rollover schedule at the IGT Reno Property, based on initial lease expiration dates:
Lease Expiration Schedule(1)(2)
Year Ending December 31 | Expiring Owned GLA | % of Owned GLA | Cumulative % of Owned GLA | UW | % of Total UW | UW Base Rent | # of Expiring Tenants |
| 2017 | 0 | 0.0% | 0.0% | $0 | 0.0% | $0.00 | 0 |
| 2018 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 |
| 2019 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 |
| 2020 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 |
| 2021 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 |
| 2022 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 |
| 2023 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 |
| 2024 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 |
| 2025 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 |
| 2026 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 |
| 2027 | 0 | 0.0 | 0.0% | 0 | 0.0 | 0.00 | 0 |
| 2028 & Thereafter | 1,251,179 | 100.0 | 100.0% | 11,000,400 | 100.0 | 8.79 | 1 |
| Vacant | 0 | 0.0 | 100.0% | 0 | 0.0 | 0.00 | 0 |
| Total / Wtd. Avg. | 1,251,179 | 100.0% | $11,000,400 | 100.0% | $8.79 | 1 | |
| (1) | Calculated based on approximate square footage occupied by each Owned Tenant unless otherwise specified. |
| (2) | Certain tenants may have lease termination options that are exercisable prior to the originally stated expiration date of the subject lease and that are not considered in the Lease Expiration Schedule. |
The following table presents certain information relating to historical leasing at the IGT Reno Property:
Historical Leased %(1)(2)
As of 10/6/2017 | |
| Owned Space | 100.0% |
| (1) | The IGT Reno Property is currently 100% occupied by the sole tenant and is expected to remain 100% occupied as of October 6, 2017 (the Cut-off Date of the IGT Reno Loan). |
| (2) | Due to the recent acquisition of the IGT Reno Property, historical occupancy information is not available. |
| ■ | Operating History and Underwritten Net Cash Flow. The following table presents certain information relating to the Underwritten Net Cash Flow at the IGT Reno Property: |
Cash Flow Analysis(1)(2)
Underwritten(3) | Underwritten | ||
| Base Rent | $11,000,400 | $8.79 | |
| Gross Up Vacancy | 0 | 0.00 | |
| Reimbursements | 538,007 | 0.43 | |
| Other Income | 0 | 0.00 | |
| Gross Revenue | $11,538,407 | $9.22 | |
| Vacancy & Credit Loss | (576,920) | (0.46) | |
| Effective Gross Income | $10,961,487 | $8.76 | |
| Real Estate Taxes | $0 | $0.00 | |
| Insurance | 0 | 0.00 | |
| Management Fee | 328,845 | 0.26 | |
| Total Operating Expenses | $328,845 | $0.26 | |
| Net Operating Income | $10,632,642 | $8.50 | |
| TI/LC | 394,622 | 0.32 | |
| Capital Expenditures | 538,007 | 0.43 | |
| Net Cash Flow | $9,700,013 | $7.75 | |
| Occupancy | 100.0% | ||
| NOI Debt Yield(4) | 13.3% | ||
| NCF DSCR(4) | 2.05x |
| (1) | Certain items such as straight line rent, interest expense, interest income, lease cancellation income, depreciation, amortization, debt service payments and any other non-recurring or non-operating items were excluded from the historical presentation and are not considered for the underwritten cash flow. |
| (2) | Due to the recent acquisition of the IGT Reno Property on March 29, 2017, historical cash flow information is not available. |
| (3) | Contractual Rent Steps are underwritten based upon the actual scheduled rent increases through April 1, 2018. |
| (4) | Calculated based on the aggregate outstanding principal balance of the IGT Reno Loan Combination. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
139
LOAN #15: Carnegie Park
| Mortgaged Property Information | Mortgage Loan Information | |||||
| Number of Mortgaged Properties | 1 | Loan Seller | CCRE | |||
| Location (City/State) | New York, New York | Cut-off Date Balance | $25,000,000 | |||
| Property Type | Mixed Use | Cut-off Date Balance per SF | $525.76 | |||
| Size (SF)(1) | 47,550 | Percentage of Initial Pool Balance | 2.6% | |||
| Total Occupancy as of 4/13//2017 | 100.0% | Number of Related Mortgage Loans | None | |||
| Owned Occupancy as of 4/13/2017 | 100.0% | Type of Security | Fee Simple | |||
| Year Built / Latest Renovation | 1985 / 2015 | Mortgage Rate | 3.25000% | |||
| Appraised Value | $54,000,000 | Original Term to Maturity (Months) | 120 | |||
| Appraisal Date | 4/25/2017 | Original Amortization Term (Months) | NAP | |||
| Borrower Sponsors(2)(3) | Stephen M. Ross, Jeff T. Blau and Bruce A. Beal, Jr. | Original Interest Only Period (Months) | 120 | |||
| Property Management | Related Management Company, L.P. | First Payment Date | 7/6/2017 | |||
| Maturity Date | 6/6/2027 | |||||
| Underwritten Revenues | $2,965,640 | |||||
| Underwritten Expenses | $713,316 | Escrows | ||||
| Underwritten Net Operating Income (NOI) | $2,252,324 | Upfront | Monthly | |||
| Underwritten Net Cash Flow (NCF) | $2,234,270 | Taxes | $0 | $40,500 | ||
| Cut-off Date LTV Ratio | 46.3% | Insurance | $1,409 | $0 | ||
| Maturity Date LTV Ratio | 46.3% | Replacement Reserve | $0 | $594 | ||
| DSCR Based on Underwritten NOI / NCF | 2.73x / 2.71x | Environmental | $62,500 | $0 | ||
| Debt Yield Based on Underwritten NOI / NCF | 9.0% / 8.9% | Other | $0 | $7,022(4) | ||
Sources and Uses
| Sources | $ | % | Uses | $ | % | |
| Loan Amount | $25,000,000 | 100.0% | Principal Equity Distribution(5) | $23,704,418 | 94.8% | |
| Closing Costs | 1,231,673 | 4.9 | ||||
| Reserves | 63,909 | 0.3 | ||||
| Total Sources | $25,000,000 | 100.0% | Total Uses | $25,000,000 | 100.0% |
| (1) | The Carnegie Park Property is subject to a condominium regime consisting of a 23,188 SF parking unit, a 24,017 SF commercial unit (occupied by two commercial tenants) and a telecom unit (collectively, the Carnegie Park Property) and 277 residential units (non-collateral). |
| (2) | The Related Companies, Inc. is the non-recourse carveout guarantor under the Carnegie Park Loan. |
| (3) | Pursuant to the condominium declaration, the borrower is permitted to designate two of the five member votes on the condominium board and has a 10.8938% interest in the common areas. The three remaining members on the condominium board are elected by the residential unit owners and non-residential unit owners based on their common interests. |
| (4) | The Other monthly reserve is comprised of a condo common charge, which represents one-twelfth of an amount of the annual condo common charges. |
| (5) | The Carnegie Park Property was previously unencumbered and therefore, the Carnegie Park Loan represents a recapitalization. |
The following table presents certain information relating to the major tenants at the Carnegie Park Property:
Largest Owned Tenants Based on Underwritten Base Rent(1)
| Tenant Name | Credit Rating (Fitch/MIS/S&P)(2) | Tenant GLA | % of GLA | UW Base Rent | % of Total UW Base Rent | UW Base Rent $ per SF | Lease Expiration | Renewal / Extension Options | ||||||||
| Duane Reade | BBB / Baa2 / BBB | 13,096 | 27.5% | $1,418,286 | 61.0% | $108.30 | 3/31/2031 | None | ||||||||
| Yorkville Endoscopy | NR / NR / NR | 10,921 | 23.0 | 774,443 | 33.3 | 70.91 | 1/31/2028 | 2, 5-year options | ||||||||
| Verizon (Antenna) | A- / Baa1 / BBB+ | 345 | 0.7 | 131,131 | 5.6 | 380.09 | 4/30/2021 | 2, 5-year options | ||||||||
| Parking(3) | NR / NR / NR | 23,188 | 48.8 | 0 | 0.0 | 0.00 | NAP | NAP | ||||||||
| Largest Owned Tenants | 47,550 | 100.0% | $2,323,860 | 100.0% | $48.87 | |||||||||||
| Vacant | 0 | 0.0 | 0 | 0.0 | 0.00 | |||||||||||
| Total / Wtd. Avg. All Tenants | 47,550 | 100.0% | $2,323,860 | 100.0% | $48.87 |
| (1) | Based on the underwritten rent roll. |
| (2) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
| (3) | The parking unit tenant (iPark) does not pay rent but collects an annual $24,000 management fee. The tenant is required to pay all expenses directly, excluding taxes and then passes the net operating income from the garage directly to the borrower for its payment of pro rata share of taxes. UW revenue associated with the parking tenant is $613,482, which is in line with the TTM. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
140
LOAN #15: Carnegie Park
The following table presents the lease rollover schedule at the Carnegie Park Property, based on initial lease expiration dates:
Lease Expiration Schedule(1)(2)
| Year Ending December 31 | Expiring Owned GLA | % of Owned GLA | Cumulative% of Owned GLA | UW Base Rent | % of Total UW Base Rent | UW Base Rent $ per SF | # of Expiring Tenants | |||||||
| MTM(3) | 23,188 | 48.8% | 48.8% | $0 | 0.0% | $0.00 | 1 | |||||||
| 2017 | 0 | 0.0 | 48.8% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2018 | 0 | 0.0 | 48.8% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2019 | 0 | 0.0 | 48.8% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2020 | 0 | 0.0 | 48.8% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2021 | 345 | 0.7 | 49.5% | 131,131 | 5.6 | 380.09 | 1 | |||||||
| 2022 | 0 | 0.0 | 49.5% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2023 | 0 | 0.0 | 49.5% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2024 | 0 | 0.0 | 49.5% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2025 | 0 | 0.0 | 49.5% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2026 | 0 | 0.0 | 49.5% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2027 | 0 | 0.0 | 49.5% | 0 | 0.0 | 0.00 | 0 | |||||||
| 2028 & Thereafter | 24,017 | 50.5 | 100.0% | 2,192,729 | 94.4 | 91.30 | 2 | |||||||
| Vacant | 0 | 0.0 | 100.0% | 0 | 0.0 | 0.00 | 0 | |||||||
| Total / Wtd. Avg. | 47,550 | 100.0% | $2,323,860 | 100.0% | $48.87 | 4 |
| (1) | Calculated based on approximate square footage occupied by each Owned Tenant unless otherwise specified. |
| (2) | Certain tenants may have lease termination options that are exercisable prior to the originally stated expiration date of the subject lease and that are not considered in the Lease Expiration Schedule. |
| (3) | The parking tenant does not pay rent, but pays all expenses directly, excluding taxes, collects a $24,000 management fee and then passes the net operating income from the garage directly to the borrower. UW revenue associated with the parking tenant is $613,482, which is in line with the TTM. |
The following table presents certain information relating to historical leasing at the Carnegie Park Property:
Historical Leased %(1)
| 2012 | 2013 | 2014 | 2015 | 2016 | As of 4/13/2017(2) | |||||||
| Owned Space | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% |
(1) | As provided by the borrower and which represents occupancy as of December 31 for the indicated year unless otherwise specified. |
| (2) | Based on the underwritten rent roll dated April 13, 2017. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
141
LOAN #15: Carnegie Park
| ■ | Operating History and Underwritten Net Cash Flow. The following table presents certain information relating to the Underwritten Net Cash Flow at the Carnegie Park Property: |
Cash Flow Analysis(1)(2)
| 2016 | TTM 3/31/2017 | Underwritten | Underwritten $per SF | |||||
| Base Rent(3) | $2,119,271 | $2,154,532 | $2,323,835 | $48.87 | ||||
| Contractual Rent Steps | 0 | 0 | 25 | 0.00 | ||||
| Gross Up Vacancy | 0 | 0 | 0 | 0.00 | ||||
| Reimbursements | 43,527 | 44,762 | 105,757 | 2.22 | ||||
| Other Income(4) | 585,681 | 620,085 | 613,482 | 12.90 | ||||
| Gross Revenue | $2,748,479 | $2,819,379 | $3,043,099 | $64.00 | ||||
| Vacancy & Credit Loss | 0 | 0 | (77,459) | (1.63) | ||||
| Effective Gross Income | $2,748,479 | $2,819,379 | $2,965,640 | $62.37 | ||||
| Real Estate Taxes | $238,060 | $331,266 | $485,230 | $10.20 | ||||
| Insurance | 11,517 | 12,033 | 4,227 | 0.09 | ||||
| Management Fee | 82,454 | 84,582 | 88,969 | 1.87 | ||||
| Other Operating Expenses | 174,450 | 164,021 | 134,890 | 2.84 | ||||
| Total Operating Expenses | $506,482 | $591,902 | $713,316 | $15.00 | ||||
| Net Operating Income | $2,241,997 | $2,227,477 | $2,252,324 | $47.37 | ||||
| TI/LC | 0 | 0 | 10,921 | 0.23 | ||||
| Capital Expenditures | 0 | 0 | 7,133 | 0.15 | ||||
| Net Cash Flow | $2,241,997 | $2,227,477 | $2,234,270 | $46.99 | ||||
| Occupancy | 100.0% | 100.0% | 100.0% | |||||
| NOI Debt Yield(4) | 9.0% | 8.9% | 9.0% | |||||
| NCF DSCR(4) | 2.72x | 2.70x | 2.71x |
| (1) | Certain items such as straight line rent, interest expense, interest income, lease cancellation income, depreciation, amortization, debt service payments and any other non-recurring or non-operating items were excluded from the historical presentation and are not considered for the underwritten cash flow. |
| (2) | The Carnegie Park Property is 100% occupied by four tenants. |
| (3) | GPR Base Rent considers average rent for Duane Reade (rated BBB / Baa2 / BBB by Fitch/MIS/S&P) and for the Verizon antenna lease (rated A- / Baa1 / BBB+ by Fitch/MIS/S&P) over the term of the respective leases. |
| (4) | Other income consists of parking income. The parking tenant does not pay rent, but pays all expenses directly, excluding taxes, collects a $24,000 management fee and then passes the net operating income from the garage directly to the borrower. UW revenue associated with the parking tenant is $613,482, which is in line with the TTM. |
The depositor has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) (SEC File No. 333-207132) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or Citigroup Global Markets Inc., Deutsche Bank Securities Inc. or any other underwriter or dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-831-9146.
142