| | | FREE WRITING PROSPECTUS |
| | | FILED PURSUANT TO RULE 433 |
| | | REGISTRATION FILE NO.: 333-255934-03 |
| | | |
| Dated September 9, 2022 | | BMO 2022-C3 |
Collateral Term Sheet |
BMO 2022-C3 Mortgage Trust |
$726,702,946 (Approximate Mortgage Pool Balance) |
| |
$[ ] (Approximate Offered Certificates) |
| |
BMO Commercial Mortgage Securities LLC Depositor |
| |
Commercial Mortgage Pass-Through Certificates, Series 2022-C3 |
| |
|
Bank of Montreal Citi Real Estate Funding Inc. UBS AG Starwood Mortgage Capital LLC LMF Commercial, LLC ReadyCap Commercial, LLC Sutherland Asset I, LLC 3650 Real Estate Investment Trust 2 LLC Sabal Capital II, LLC Mortgage Loan Sellers |
BMO Capital Markets | UBS Securities LLC | Citigroup |
| Co-Lead Managers and Joint Bookrunners |
Regions Securities LLC
Co-Manager | Bancroft Capital, LLC Co-Manager | Drexel Hamilton, LLC
Co-Manager |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | | |
| Dated September 9, 2022 | | BMO 2022-C3 |
This material is for your information, and none of BMO Capital Markets Corp., Citigroup Global Markets Inc., UBS Securities LLC, Regions Securities LLC, Bancroft Capital, LLC and Drexel Hamilton, LLC (the “Underwriters”) are soliciting any action based upon it. This material 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 depositor has filed a registration statement (including the prospectus) with the Securities and Exchange Commission (File No. 333-255934) 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 Securities and Exchange Commission for more complete information about the depositor, the issuing entity and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the depositor or BMO Capital Markets Corp., any other underwriter, or any dealer participating in this offering will arrange to send you the prospectus if you request it by calling 1-866-864-7760. The Offered Certificates referred to in these materials, and the asset pool backing them, are subject to modification or revision (including the possibility that one or more Classes of Certificates may be split, combined or eliminated at any time prior to issuance or availability of a final prospectus) and are offered on a “when, as and if issued” basis. You understand that, when you are considering the purchase of these Certificates, a contract of sale will come into being no sooner than the date on which the relevant Class has been priced and we have verified the allocation of Certificates to be made to you; any “indications of interest” expressed by you, and any “soft circles” generated by us, will not create binding contractual obligations for you or us.
Neither this document nor anything contained in this document shall form the basis for any contract or commitment whatsoever. The information contained in this document is preliminary as of the date of this document, supersedes any previous such information delivered to you and will be superseded by any such information subsequently delivered prior to the time of sale. These materials are subject to change, completion or amendment from time to time. The information should be reviewed only in conjunction with the entire offering document relating to the Commercial Mortgage Pass-Through Certificates, Series 2022-C3 (the “Offering Document”). All of the information contained herein is subject to the same limitations and qualifications contained in the Offering Document. The information contained herein does not contain all relevant information relating to the underlying mortgage loans or mortgaged properties. Such information is described elsewhere in the Offering Document. The information contained herein will be more fully described elsewhere in the Offering Document. The information contained herein should not be viewed as projections, forecasts, predictions or opinions with respect to value. Prior to making any investment decision, prospective investors are strongly urged to read the Offering Document its entirety. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this free writing prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
This document has been prepared by the Underwriters for information purposes only and does not constitute, in whole or in part, a prospectus for the purposes of Regulation (EU) 2017/1129 (as amended or superseded) and/or Part VI of the Financial Services and Markets Act 2000 (as amended) or other offering document.
The attached information contains certain tables and other statistical analyses (the “Computational Materials”) which have been prepared in reliance upon information furnished by the Mortgage Loan Sellers. Numerous assumptions were used in preparing the Computational Materials, which may or may not be reflected herein. As such, no assurance can be given as to the Computational Materials’ accuracy, appropriateness or completeness in any particular context; or as to whether the Computational Materials and/or the assumptions upon which they are based reflect present market conditions or future market performance. The Computational Materials should not be construed as either projections or predictions or as legal, tax, financial or accounting advice. You should consult your own counsel, accountant and other advisors as to the legal, tax, business, financial and related aspects of a purchase of these securities. Any weighted average lives, yields and principal payment periods shown in the Computational Materials are based on prepayment and/or loss assumptions, and changes in such prepayment and/or loss assumptions may dramatically affect such weighted average lives, yields and principal payment periods. In addition, it is possible that prepayments or losses on the underlying assets will occur at rates higher or lower than the rates shown in the attached Computational Materials. The specific characteristics of the securities may differ from those shown in the Computational Materials due to differences between the final underlying assets and the preliminary underlying assets used in preparing the Computational Materials. The principal amount and designation of any security described in the Computational Materials are subject to change prior to issuance. None of the Underwriters or any of their respective affiliates make any representation or warranty as to the actual rate or timing of payments or losses on any of the underlying assets or the payments or yield on the securities. The information in this presentation is based upon management forecasts and reflects prevailing conditions and management’s views as of this date, all of which are subject to change. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us by or on behalf of the Mortgage Loan Sellers or which was otherwise reviewed by us.
This document contains forward-looking statements. If and when included in this document, the words “expects”, “intends”, “anticipates”, “estimates” and analogous expressions and all statements that are not historical facts, including statements about our beliefs or expectations, are intended to identify forward-looking statements. Any forward-looking statements are made subject to risks and uncertainties which could cause actual results to differ materially from those stated. Those risks and uncertainties include, among other things, declines in general economic and business conditions, increased competition, changes in demographics, changes in political and social conditions, regulatory initiatives and changes in consumer preferences, many of which are beyond our control and the control of any other person or entity related to this offering. The forward-looking statements made in this document are made as of the date hereof. We have no obligation to update or revise any forward-looking statement.
BMO Capital Markets is a trade name used by BMO Financial Group for the wholesale banking businesses of Bank of Montreal, BMO Harris Bank N.A. (member FDIC), Bank of Montreal Europe p.l.c, and Bank of Montreal (China) Co. Ltd, the institutional broker dealer business of BMO Capital Markets Corp. (Member FINRA and SIPC) and the agency broker dealer business of Clearpool Execution Services, LLC (Member FINRA and SIPC) in the U.S., and the institutional broker dealer businesses of BMO Nesbitt Burns Inc. (Member Investment Industry Regulatory Organization of Canada and Member Canadian Investor Protection Fund) in Canada and Asia, Bank of Montreal Europe p.l.c. (authorized and regulated by the Central Bank of Ireland) in Europe and BMO Capital Markets Limited (authorized and regulated by the Financial Conduct Authority) in the UK and Australia.
IMPORTANT NOTICE RELATING TO AUTOMATICALLY-GENERATED EMAIL DISCLAIMERS
Any legends, disclaimers or other notices that may appear at the bottom of any email communication to which this document is attached relating to (1) these materials not constituting an offer (or a solicitation of an offer), (2) no representation that these materials are accurate or complete and may not be updated or (3) these materials possibly being confidential, are 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.
THE CERTIFICATES REFERRED TO IN THESE MATERIALS ARE SUBJECT TO MODIFICATION OR REVISION (INCLUDING THE POSSIBILITY THAT ONE OR MORE CLASSES OF CERTIFICATES MAY BE SPLIT, COMBINED OR ELIMINATED AT ANY TIME PRIOR TO ISSUANCE OR AVAILABILITY OF A FINAL PROSPECTUS) AND ARE OFFERED ON A “WHEN, AS AND IF ISSUED” BASIS.
THE UNDERWRITERS MAY FROM TIME TO TIME PERFORM INVESTMENT BANKING SERVICES FOR, OR SOLICIT INVESTMENT BANKING BUSINESS FROM, ANY COMPANY NAMED IN THESE MATERIALS. THE UNDERWRITERS AND/OR THEIR AFFILIATES OR RESPECTIVE EMPLOYEES MAY FROM TIME TO TIME HAVE A LONG OR SHORT POSITION IN ANY CERTIFICATE OR CONTRACT DISCUSSED IN THESE MATERIALS.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 2 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| Collateral Characteristics |
Mortgage Loan Seller | Number of Mortgage Loans | Number of Mortgaged Properties | Aggregate
Cut-off Date Balance | | Roll-up Aggregate Cut-off Date Balance | Roll-up Aggregate % of Cut-off Date Balance |
| BMO | 13 | 22 | $223,911,085 | 30.8% | $228,911,085 | 31.5% |
| CREFI | 4 | 6 | $103,800,000 | 14.3% | $103,800,000 | 14.3% |
| 3650 REIT | 6 | 18 | $83,898,574 | 11.5% | $83,898,574 | 11.5% |
| LMF | 4 | 4 | $77,666,340 | 10.7% | $77,666,340 | 10.7% |
| SMC | 2 | 8 | $37,985,415 | 5.2% | $70,485,415 | 9.7% |
| UBS AG | 2 | 6 | $67,000,000 | 9.2% | $67,000,000 | 9.2% |
| Sabal | 8 | 16 | $47,970,000 | 6.6% | $47,970,000 | 6.6% |
| ReadyCap | 8 | 8 | $46,971,532 | 6.5% | $46,971,532 | 6.5% |
| BMO, SMC | 1 | 1 | $37,500,000 | 5.2% | - | - |
| Total: | 48 | 89 | $726,702,946 | 100.0% | $726,702,946 | 100.0% |
| Loan Pool | |
| | Initial Pool Balance (“IPB”): | $726,702,946 |
| | Number of Mortgage Loans: | 48 |
| | Number of Mortgaged Properties: | 89 |
| | Average Cut-off Date Balance per Mortgage Loan: | $15,139,645 |
| | Weighted Average Current Mortgage Rate: | 5.35217% |
| | 10 Largest Mortgage Loans as % of IPB: | 46.7% |
| | Weighted Average Remaining Term to Maturity: | 108 months |
| | Weighted Average Seasoning: | 3 months |
| Credit Statistics | |
| | Weighted Average UW NCF DSCR: | 1.88x |
| | Weighted Average UW NOI Debt Yield: | 10.8% |
| | Weighted Average Cut-off Date Loan-to-Value Ratio (“LTV”): | 53.7% |
| | Weighted Average Maturity Date/ARD LTV: | 51.9% |
| Other Statistics | |
| | % of Mortgage Loans with Additional Debt: | 11.6% |
| | % of Mortgage Loans with Single Tenants: | 11.9% |
| % of Mortgage Loans secured by Multiple Properties: | 29.4% |
| Amortization | |
| | Weighted Average Original Amortization Term: | 353 months |
| | Weighted Average Remaining Amortization Term: | 352 months |
| | % of Mortgage Loans with Interest-Only: | 73.2% |
| | % of Mortgage Loans with Amortizing Balloon: | 13.8% |
| | % of Mortgage Loans with Partial Interest-Only followed by Amortizing Balloon: | 12.9% |
| Lockboxes | |
| | % of Mortgage Loans with Hard Lockboxes: | 41.9% |
| | % of Mortgage Loans with Springing Lockboxes: | 35.7% |
| | % of Mortgage Loans with Soft (Residential); Hard (Commercial) Lockboxes: | 13.4% |
| | % of Mortgage Loans with Soft Springing Lockboxes: | 5.2% |
| | % of Mortgage Loans with No Lockboxes: | 2.1% |
| | % of Mortgage Loans with Soft Lockboxes: | 1.8% |
| Reserves | |
| | % of Mortgage Loans Requiring Monthly Tax Reserves: | 85.7% |
| | % of Mortgage Loans Requiring Monthly Insurance Reserves: | 38.3% |
| | % of Mortgage Loans Requiring Monthly CapEx Reserves: | 70.3% |
| | % of Mortgage Loans Requiring Monthly TI/LC Reserves: | 51.2% |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | | |
| | 3 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| Collateral Characteristics |
| Ten Largest Mortgage Loans |
| |
| No. | Loan Name | City, State | Mortgage Loan Seller | No.
of Prop. | Cut-off Date Balance | % of IPB | Square Feet / Rooms / Units | Property Type | UW
NCF DSCR | UW NOI Debt Yield | Cut-off Date LTV | Maturity Date/ARD LTV |
| 1 | Park West Village | New York, NY | BMO, SMC | 1 | $37,500,000 | 5.2% | 850 | Multifamily | 2.60x | 12.3% | 32.6% | 32.6% |
| 2 | Kingston Square Apartments | Indianapolis, IN | BMO | 1 | $37,000,000 | 5.1% | 523 | Multifamily | 1.53x | 9.2% | 59.5% | 59.5% |
| 3 | Yorkshire & Lexington Towers | New York, NY | BMO | 2 | $37,000,000 | 5.1% | 808 | Multifamily | 3.61x | 11.1% | 33.3% | 33.3% |
| 4 | Phoenix Industrial Portfolio IX | Various, Various | UBS AG | 5 | $37,000,000 | 5.1% | 3,760,303 | Industrial | 1.48x | 10.6% | 41.2% | 41.2% |
| 5 | 50 Tice Corporate Center | Woodcliff Lake, NJ | LMF | 1 | $36,500,000 | 5.0% | 256,459 | Office | 1.68x | 12.3% | 56.8% | 53.0% |
| 6 | Center Pointe Plaza I | Newark, DE | LMF | 1 | $34,966,340 | 4.8% | 238,348 | Retail | 1.27x | 9.6% | 66.2% | 56.5% |
| 7 | Bayou City Portfolio | Various, TX | SMC | 3 | $32,191,295 | 4.4% | 633 | Multifamily | 1.21x | 10.0% | 50.9% | 42.7% |
| 8 | 469 7th Avenue | New York, NY | UBS AG | 1 | $30,000,000 | 4.1% | 269,233 | Office | 1.41x | 9.4% | 52.4% | 52.4% |
| 9 | Wells Fargo Center Tampa | Tampa, FL | CREFI | 1 | $30,000,000 | 4.1% | 389,624 | Office | 1.60x | 10.2% | 59.4% | 59.4% |
| 10 | Saks Fulfillment Center | Wilkes Barre, PA | BMO | 1 | $27,500,000 | 3.8% | 822,771 | Industrial | 1.71x | 10.7% | 53.1% | 53.1% |
| | | | | | | | | | | | | |
| | Top 3 Total/Weighted Average | �� | 4 | $111,500,000 | 15.3% | | | 2.58x | 10.9% | 41.8% | 41.8% |
| | Top 5 Total/Weighted Average | | 10 | $185,000,000 | 25.5% | | | 2.18x | 11.1% | 44.6% | 43.9% |
| | Top 10 Total/Weighted Average | | 17 | $339,657,635 | 46.7% | | | 1.84x | 10.6% | 50.1% | 47.9% |
| | Non-Top 10 Total/Weighted Average | | 72 | $387,045,312 | 53.3% | | | 1.92x | 11.0% | 56.8% | 55.4% |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 4 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| Collateral Characteristics |
| Pari Passu Companion Loan Summary |
| |
No. | Loan Name | | Trust Cut-off Date Balance | Aggregate Pari Passu Loan Cut-off Date Balance | Controlling Pooling/Trust & Servicing Agreement | Master Servicer | Special Servicer | Related Pari Passu Loan(s) Securitizations | Related Pari Passu Loan(s) Original Balance |
| 1 | Park West Village | BMO, SMC | $37,500,000 | $150,000,000 | BBCMS 2022-C17 | KeyBank | KeyBank | BBCMS 2022-C17 Future Securitization(s) | $47,500,000 $102,500,000 |
| 2 | Kingston Square Apartments | BMO | $37,000,000 | $14000,000 | BMO 2022-C3 | Midland | Midland | Future Securitization(s) | $14,000,000 |
| 3 | Yorkshire & Lexington Towers | BMO | $37,000,000 | $281,000,000 | CGCMT 2022-GC48 | Midland | Rialto | BBCMS 2022-C16 BMO 2022-C2 CGCMT 2022-GC48 BBCMS 2022-C17 Future Securitization(s) | $65,000,000 $70,000,000 $60,000,000 $20,000,000 $66,000,000 |
| 4 | Phoenix Industrial Portfolio IX | UBS AG | $37,000,000 | $38,000,000 | BMO 2022-C3 | Midland | Midland | Future Securitizations(s) | $38,000,000 |
| 8 | 469 7th Avenue | UBS AG | $30,000,000 | $68,000,000 | BMO 2022-C3 | Midland | Midland | Future Securitizations(s) | $68,000,000 |
| 9 | Wells Fargo Center Tampa | CREFI | $30,000,000 | $43,000,000 | BMO 2022-C3 | Midland | Midland | Future Securitizations(s) | $43,000,000 |
| 10 | Saks Fulfillment Center | BMO | $27,500,000 | $32,500,000 | BMO 2022-C3 | Midland | Midland | BBCMS 2022-C17 Future Securitizations(s) | $22,500,000 $10,000,000 |
| 16 | La Habra Marketplace | 3650 REIT | $20,000,000 | $75,000,000 | BMO 2022-C3 | Midland | Midland | Future Securitizations(s) | $75,000,000 |
| 17 | Central States Industrial Portfolio | 3650 REIT | $20,000,000 | $39,900,000 | BMO 2022-C3 | Midland | Midland | Future Securitizations(s) | $39,900,000 |
| 19 | Icon One Daytona | 3650 REIT | $15,000,000 | $35,000,000 | 3650R 2021-PF1 | Midland | 3650 REIT | 3650 2021-PF1 Future Securitizations(s) | $25,000,000 $15,000,000 |
| 20 | Lakeshore Marketplace | 3650 REIT | $11,848,574 | $9,656,588 | BMO 2022-C3 | Midland | Midland | Future Securitizations(s) | $9,656,588 |
| 22 | Bell Works | BMO | $10,000,000 | $200,000,000 | BMARK 2022-B35 | KeyBank | KeyBank | BMARK 2022-B35 BBCMS 2022-C16 CGCMT 2022-GC48 BBCMS 2022-C17 Future Securitization(s) | $50,000,000 $40,000,000 $40,000,000 $25,000,000 $15,000,000 |
| 23 | 111 River Street | BMO | $10,000,000 | $67,500,000 | BMO 2022-C1 | KeyBank | KeyBank | BMO 2022-C1 BMO 2022-C2 CGCMT 2022-GC48 | $37,500,000 $22,000,000 $8,000,000 |
| 24 | Art Ovation Hotel | 3650 REIT | $10,000,000 | $47,500,000 | BMO 2022-C3 | Midland | Midland | Future Securitizations(s) | $47,500,000 |
| 25 | 3455 Veterans Hwy | BMO | $10,000,000 | $20,000,000 | BMO 2022-C3 | Midland | Midland | Future Securitizations(s) | $20,000,000 |
| 30 | A&R Hospitality Portfolio | BMO | $7,250,000 | $55,750,000 | BBCMS 2022-C17 | KeyBank | Argentic | BBCMS 2022-C17 Future Securitizations(s) | $40,000,000 $15,750,000 |
| | | | | | | | | | |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 5 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| Collateral Characteristics |
| Mortgaged Properties by Type |
| | | | | | Weighted Average |
| Property Type | Property Subtype | Number of Properties | Cut-off Date Principal Balance | % of IPB | UW
NCF DSCR | UW
NOI Debt Yield | Cut-off Date LTV | Maturity Date/ARD LTV |
| Multifamily | Garden | 14 | $110,147,594 | 15.2% | 1.53x | 9.2% | 58.0% | 54.5% |
| | High Rise | 3 | 74,500,000 | 10.3 | 3.10x | 11.7% | 32.9% | 32.9% |
| | Age Restricted | 1 | 5,450,000 | 0.7 | 2.28x | 9.3% | 64.9% | 64.9% |
| | Townhomes | 1 | 3,251,125 | 0.4 | 1.22x | 7.8% | 68.4% | 63.4% |
| | Mid Rise | 1 | 1,644,107 | 0.2 | 1.54x | 8.7% | 60.9% | 60.9% |
| | Subtotal: | 20 | $194,992,827 | 26.8% | 2.14x | 10.1% | 48.8% | 46.7% |
| Office | CBD | 3 | $70,000,000 | 9.6% | 2.02x | 10.8% | 52.5% | 52.5% |
| | Suburban | 4 | 64,400,000 | 8.9 | 1.64x | 11.0% | 59.0% | 55.9% |
| | Medical | 1 | 27,000,000 | 3.7 | 1.57x | 10.2% | 56.3% | 56.3% |
| | Subtotal: | 8 | $161,400,000 | 22.2% | 1.79x | 10.8% | 55.7% | 54.5% |
| Industrial | Warehouse/Distribution | 14 | $42,333,161 | 5.8% | 1.58x | 10.5% | 49.1% | 49.1% |
| | Flex | 3 | 28,831,653 | 4.0 | 1.56x | 10.1% | 50.1% | 49.4% |
| | Warehouse | 1 | 27,500,000 | 3.8 | 1.71x | 10.7% | 53.1% | 53.1% |
| | Manufacturing | 4 | 26,041,998 | 3.6 | 1.43x | 10.8% | 40.2% | 36.5% |
| | Cold Storage | 1 | 4,570,952 | 0.6 | 1.59x | 9.4% | 68.1% | 68.1% |
| | Manufacturing/Warehouse/Distribution | 1 | 1,282,137 | 0.2 | 1.59x | 9.4% | 68.1% | 68.1% |
| | Subtotal: | 24 | $130,559,900 | 18.0% | 1.57x | 10.5% | 49.2% | 48.4% |
| Retail | Anchored | 5 | $89,749,914 | 12.4% | 1.66x | 10.1% | 65.0% | 60.1% |
| | Single Tenant | 3 | 31,320,100 | 4.3 | 2.21x | 11.5% | 51.2% | 51.2% |
| | Unanchored | 1 | 6,500,000 | 0.9 | 2.06x | 11.9% | 54.2% | 54.2% |
| | Subtotal: | 9 | $127,570,014 | 17.6% | 1.82x | 10.5% | 61.0% | 57.6% |
| Hospitality | Limited Service | 8 | $23,583,319 | 3.2% | 2.21x | 16.1% | 57.3% | 52.7% |
| | Extended Stay | 4 | 15,857,766 | 2.2 | 2.54x | 16.6% | 50.8% | 50.2% |
| | Full Service | 1 | 10,000,000 | 1.4 | 1.45x | 14.7% | 50.8% | 56.8% |
| | Subtotal: | 13 | $49,441,085 | 6.8% | 2.16x | 16.0% | 53.9% | 52.7% |
| Mixed Use | Multifamily/Retail | 3 | $28,720,000 | 4.0% | 1.38x | 9.0% | 66.2% | 66.2% |
| | Subtotal: | 3 | $28,720,000 | 4.0% | 1.38x | 9.0% | 66.2% | 66.2% |
| Self Storage | Self Storage | 7 | $28,225,000 | 3.9% | 2.34x | 10.3% | 50.0% | 50.0% |
| Manufactured Housing | Manufactured Housing | 5 | $5,794,120 | 0.8% | 1.63x | 11.8% | 50.8% | 43.0% |
| Total / Weighted Average: | 89 | $726,702,946 | 100.0% | 1.88x | 10.8% | 53.7% | 51.9% |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 6 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 1 – Park West Village |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 7 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 1 – Park West Village |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 8 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 1 – Park West Village |
| Mortgage Loan Information | | Property Information |
| Mortgage Loan Seller: | BMO, SMC | | Single Asset / Portfolio: | Single Asset |
| Original Principal Balance(1): | $37,500,000 | | Title: | Fee |
| Cut-off Date Principal Balance(1): | $37,500,000 | | Property Type – Subtype: | Multifamily – High Rise |
| % of IPB: | 5.2% | | Net Rentable Area (Units): | 850 |
| Loan Purpose: | Refinance | | Location: | New York, NY |
| Borrowers: | CF PWV LLC and SM PWV LLC | | Year Built / Renovated: | 1950, 1958, 1963 / 2014 |
| Borrower Sponsors: | Meyer Chetrit and | | Occupancy: | 94.7% |
| | Amended and Restated 2013 | | Occupancy Date: | 7/22/2022 |
| | LG Revocable Trust | | 4th Most Recent NOI (As of): | $16,725,571 (12/31/2019) |
| Interest Rate: | 4.65000% | | 3rd Most Recent NOI (As of): | $14,592,031 (12/31/2020) |
| Note Date: | 8/3/2022 | | 2nd Most Recent NOI (As of): | $13,357,008 (12/31/2021) |
| Maturity Date: | 8/6/2027 | | Most Recent NOI (As of)(5): | $15,491,417 (TTM 5/31/2022) |
| Interest-only Period: | 60 months | | UW Economic Occupancy: | 91.3% |
| Original Term: | 60 months | | UW Revenues: | $32,787,176 |
| Original Amortization Term: | None | | UW Expenses: | $9,786,898 |
| Amortization Type: | Interest Only | | UW NOI(5): | $23,000,278 |
| Call Protection(2): | L(26),D(29),O(5) | | UW NCF(5): | $23,000,278 |
| Lockbox / Cash Management: | Soft (Residential); Hard | | Appraised Value / Per Unit: | $575,000,000 / $676,471 |
| | (Commercial) / In Place | | Appraisal Date: | 1/20/2022 |
| Additional Debt(1): | Yes | | | |
| Additional Debt Balance(1)(3): | $150,000,000 / $177,500,000 | | | |
| Additional Debt Type(1)(3): | Pari Passu / Subordinate | | | |
| | | | | |
| Escrows and Reserves(4) | | Financial Information(1) |
| | Initial | Monthly | Initial Cap | | | Senior Loan | Whole Loan |
| Taxes: | $919,476 | $459,738 | N/A | | Cut-off Date Loan / Unit: | $220,588 | $429,412 |
| Insurance: | $0 | Springing | N/A | | Maturity Date Loan / Unit: | $220,588 | $429,412 |
| Replacement Reserves: | $850,000 | $0 | N/A | | Cut-off Date LTV: | 32.6% | 63.5% |
| Other Reserves: | $12,778,500 | Springing | N/A | | Maturity Date LTV: | 32.6% | 63.5% |
| | | | | | UW NCF DSCR(5): | 2.60x | 1.34x |
| | | | | | UW NOI Debt Yield(5): | 12.3% | 6.3% |
| | | | | | | | |
| Sources and Uses |
| Sources | Proceeds | % of Tot | al | | Uses | Proceeds | % of Tot | al |
| Senior Loan | $187,500,000 | 49.2 | % | | Existing Loan Payoff | $321,864,741 | 84.5 | % |
| Subordinate Notes | 177,500,000 | 46.6 | | | Closing Costs | 44,400,316 | 11.7 | |
| Sponsor Equity | 15,813,033 | 4.2 | | | Upfront Reserves | 14,547,976 | 3.8 | |
| Total Sources | $380,813,033 | 100.0 | % | | Total Uses | $380,813,033 | 100.0 | % |
| (1) | The Park West Village Senior Loan (as defined below), with an original aggregate principal balance of $187,500,000, is part of the Park West Village Whole Loan (as defined below). The Financial Information in the chart above reflects the Park West Village Senior Loan and the Park West Village Whole Loan. For additional information, see “The Loan” below. |
| (2) | Defeasance of the Park West Village Whole Loan is permitted at any time after the earlier to occur of (a) the end of the two-year period commencing on the closing date of the securitization of the last promissory note representing a portion of the Park West Village Whole Loan to be securitized and (b) September 6, 2025. The assumed defeasance lockout period of 26 payments is based on the closing date of this transaction in October 2022. The actual lockout period may be longer. |
| (3) | The subordinate notes consist of (i) the B-A Note with an original principal balance of $66,500,000 and (ii) the B-B note with an original principal balance of $111,000,000, which is junior to the B-A Note in right of payment. The B-A note was contributed to the BBCMS 2022-C17 trust and backs only the related loan-specific certificates issued by the BBCMS 2022-C17 trust. For additional information, see “The Loan” below. |
| (4) | For a full description of Escrows and Reserves, please refer to “Escrows and Reserves” below. |
| (5) | UW NOI is greater than Most Recent NOI due in part to the borrower sponsors recently renovating 29 units, which has increased rents at the Park West Village Property (as defined below). Additionally, the UW NOI and UW NCF include disbursements from a Supplemental Income Reserve (as defined below) of $4,920,000. The Park West Village Senior Loan UW NCF DSCR and Park West Village Whole Loan UW NCF DSCR excluding credit for the upfront Supplemental Income Reserve are 2.05x and 1.05x respectively. The Park West Village Senior Loan UW NOI Debt Yield and Park West Village Whole Loan UW NOI Debt Yield excluding credit for the upfront Supplemental Income Reserve are 9.6% and 5.0%, respectively. Please refer to “Escrows and Reserves” below. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 9 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 1 – Park West Village |
The Loan. The Park West Village mortgage loan (the “Park West Village Mortgage Loan”) is part of a whole loan (the “Park West Village Whole Loan”) that is evidenced by 12 pari passu senior promissory notes in the aggregate original principal amount of $187,500,000 (collectively, the “Park West Village Senior Loan”), one subordinate promissory Note B-A in the original principal amount of $66,500,000 (the “Park West Village Note B-A” or the “Park West Village Note B-A Subordinate Companion Loan”) and one further subordinate promissory Note B-B in the original principal amount of $111,000,000 (the “Park West Village Note B-B” or the “Park West Village Note B-B Subordinate Companion Loan” and together with the Park West Village Note B-A, the “Park West Village Subordinate Companion Notes” or “Park West Village Subordinate Companion Loans”). The Park West Village Senior Loan was co-originated on August 3, 2022 by Bank of Montreal (“BMO”), Starwood Mortgage Capital LLC (“SMC”) and Citi Real Estate Funding Inc. (“CREFI”). The Park West Village Note B-A Subordinate Companion Loan was originated on August 3, 2022 by BMO. The Park West Village Note B-B Subordinate Companion Loan was originated on August 3, 2022 by Park West Village Grand Avenue Partners, LLC, an affiliate of Oaktree Capital Management (“PWV Grand Avenue”). The Park West Village Whole Loan is secured by a first lien mortgage on the borrowers’ fee simple interest in three, 16-story multifamily buildings consisting of 850 residential units and one commercial unit located in the Upper West Side neighborhood of New York, New York (collectively, the “Park West Village Property”).
The Park West Village Mortgage Loan is evidenced by the non-controlling Notes A-4, A-9 and A-10, with an aggregate principal balance as of the Cut-off Date of $37,500,000. The remaining Park West Village pari passu senior promissory notes and the Park West Village Note B-A were contributed to or are expected to be contributed to other securitization trusts, as set forth in the table below, and the Park West Village Note B-B is currently held by PWV Grand Avenue. The Park West Village Senior Loan is senior in right of payment to the Park West Village Subordinate Companion Loans, and the Park West Village Note B-A Subordinate Companion Loan is senior in right of payment to the Park West Village Note B-B Subordinate Companion Loan. The Park West Village Note B-B will be the initial controlling note and PWV Grand Avenue, as the holder of such initial controlling note, will be entitled to exercise certain control rights with respect to the Park West Village Whole Loan under the related co-lender agreement. The Park West Village Note B-A will become the controlling note if the Note B-B Control Appraisal Period (as defined in the related co-lender agreement) has occurred and is continuing, and the Note A-1 will become the controlling note if both the Note B-B Control Appraisal Period and the Note B-A Control Appraisal Period (as defined in the related co-lender agreement) have occurred and are continuing, as further described in the table below. The Park West Village Whole Loan will be serviced pursuant to the pooling and servicing agreement for the BBCMS 2022-C17 securitization into which the Note A-1, which is the lead note, was contributed. For additional information, see “Subordinate Debt” below. The relationship between the holders of the Park West Village Whole Loan is governed by a co-lender agreement as described under “Description of the Mortgage Pool—The Whole Loans—The Park West Village Pari Passu-AB Whole Loan” in the Preliminary Prospectus.
| Whole Loan Summary |
| Note | Original Balance | Cut-off Date Balance | | Note Holder | Controlling
Piece |
| A-1(1) | $17,500,000 | $17,500,000 | | BBCMS 2022-C17 | Yes |
| A-2(2) | $32,500,000 | $32,500,000 | | BMO | No |
| A-3(2) | $7,500,000 | $7,500,000 | | BMO | No |
| A-4 | $5,000,000 | $5,000,000 | | BMO 2022-C3 | No |
| A-5(2) | $17,500,000 | $17,500,000 | | CREFI | No |
| A-6(2) | $15,000,000 | $15,000,000 | | CREFI | No |
| A-7(2) | $15,000,000 | $15,000,000 | | CREFI | No |
| A-8(2) | $15,000,000 | $15,000,000 | | CREFI | No |
| A-9 | $17,500,000 | $17,500,000 | | BMO 2022-C3 | No |
| A-10 | $15,000,000 | $15,000,000 | | BMO 2022-C3 | No |
| A-11 | $15,000,000 | $15,000,000 | | BBCMS 2022-C17 | No |
| A-12 | $15,000,000 | $15,000,000 | | BBCMS 2022-C17 | No |
| Total Senior Loan | $187,500,000 | $187,500,000 | | | |
| B-A(1) | $66,500,000 | $66,500,000 | | BBCMS 2022-C17 (Loan Specific) | Yes |
| B-B(1) | $111,000,000 | $111,000,000 | | PWV Grand Avenue | Yes |
| Whole Loan | $365,000,000 | $365,000,000 | | | |
| (1) | The initial controlling note is Note B-B, but if a Note B-B Control Appraisal Period (as defined in the related co-lender agreement), for the Park West Village Whole Loan is continuing, the controlling note will be Note B-A. If a Note B-A Control Appraisal Period and a Note B-B Control Appraisal Period (each, as defined in the related co-lender agreement) are continuing, the controlling note will be Note A-1. Note B-A was contributed to the BBCMS 2022-C17 securitization trust and backs only the related loan-specific certificates issued by the BBCMS 2022-C17 securitization trust. The loan-specific controlling class representative designated pursuant to the pooling and servicing agreement for the BBCMS 2022-C17 securitization will be entitled to exercise the rights of the controlling note if Note B-A becomes the controlling note, and the directing certificateholder for the pooled certificates issued by the BBCMS 2022-C17 securitization trust will be entitled to exercise the rights of the controlling note if Note |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 10 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 1 – Park West Village |
A-1 becomes the controlling note, in each case to the extent provided in the related co-lender agreement and the pooling and servicing agreement for the BBCMS 2022-C17 securitization. See “Description of the Mortgage Pool—The Whole Loans—The Park West Village Pari Passu-AB Whole Loan” in the Preliminary Prospectus.
| (2) | Expected to be contributed to one or more future securitization(s). |
The Property. The Park West Village Property consists of three, 16-story multifamily buildings comprised of 850 residential units totaling 643,708 square feet and one commercial unit totaling 1,039 square feet. The commercial tenant at the Park West Village Property has a remaining weighted average lease term of approximately 0.8 years. The Park West Village Property is located in the Upper West Side neighborhood and is situated approximately 0.5 miles from the 96th Street and 103rd Street subway stations with access to the A, B, and C subway lines. The Park West Village Property was built in 1950, 1958, and 1963 and renovated in 2014, and features a range of studio, one-bedroom, two-bedroom, three-bedroom, and four-bedroom residential units. Of the 850 residential units, 418 of the units are rent-stabilized. The Park West Village Property units all feature hardwood flooring, nearly nine-foot ceiling heights, full kitchen appliances, and certain units include a private balcony. Renovated units feature granite or marble countertop kitchens, stainless steel appliances including a refrigerator, dishwasher, microwave, and gas-fired stove and oven, and washer and dryer. Community spaces include an outdoor children’s playground, dog run, valet services, and onsite surface parking.
The sole commercial tenant, Carol Maryan Architect, P.C. (“Carol Maryan Architect”), occupies 1,039 square feet (100.0% of the commercial NRA and 0.2% of the total NRA, 100.0% of the underwritten commercial base rent and 0.3% of the total underwritten base rent) with a lease expiration of July 31, 2023. Carol Maryan Architect is a boutique architectural firm founded by Carol Maryan in 1983. Carol Maryan Architect provides architectural and interior designs to an array of clients, including private individuals, corporations, developers, creative services firms, and public entities.
Borrower Sponsors’ Renovation Plan. The information set forth below regarding the borrower sponsors’ renovation plans reflects forward-looking statements and certain projections provided by the borrower sponsors, assuming, among other things, that the borrowers will complete certain projected renovations by December 1, 2024 and that all of the newly renovated and currently unoccupied units will be leased at current market rate rent and all of the currently occupied units will continue to be leased at the current contractual rental rates. We cannot assure you that such assumptions and projections provided by the borrower sponsors will materialize in the future as expected or at all.
The borrower sponsors have identified 325 units that will be renovated, which consist of 270 units that are projected to receive a light renovation and 55 units that are projected to receive a major renovation. The 55 major renovation units will be combined into 27 units post-renovation. Of the 55 units projected to receive major renovations, 28 units are rent-stabilized, all of which are currently vacant. Major renovations will feature the combination of two or three units into one larger unit or a significant floor plan alteration and are expected to take approximately four to six months to complete. Light renovation units will feature aesthetic and systems upgrades, such as new appliances, countertops, lighting upgrades and removal of carpeting. At origination, the borrowers deposited $7,858,500 into a unit upgrade reserve with the lender, to be disbursed to pay or reimburse the borrowers for unit renovation costs pursuant to the Park West Village Whole Loan documents. See “Escrows and Reserves” below.
The major renovation units are projected to receive an average renovation of approximately $48,109 per unit and are anticipated to increase rent from $46.18 per square foot in-place to $81.00 per square foot. The borrower sponsors have completed 12 major renovations to date, which have been combined into a total of seven units. These major renovations have achieved average annual rent increases from $29.39 per square foot to $72.82 per square foot.
The light renovation units are projected to receive an average renovation of $19,306 per unit and are anticipated to increase rent from $65.31 per square foot in-place to $81.00 per square foot. The borrower sponsors have completed 17 light renovations to date. These light renovations have achieved average annual rent increases from $38.24 per square foot to $85.59 per square foot.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 11 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 1 – Park West Village |
The following table presents detailed information with respect to the current market rate units at the Park West Village Property:
| As Is Market Rate Unit Summary |
| Unit Type | No. of Units(1) | % of Total | Average Unit Size (SF)(1) | Average Monthly Rental Rate(1) | Average Monthly Rental Rate per SF(1) | Average Monthly Market Rental Rate(2) | Average Monthly Market Rental Rate per SF(2) |
| Studio | 166 | 38.4 | % | 464 | $2,869 | $6.19 | $3,243 | $5.85 |
| 1 Bedroom | 164 | 38.0 | | 836 | $4,505 | $5.39 | $4,768 | $5.08 |
| 2 Bedroom | 89 | 20.6 | | 918 | $5,140 | $5.62 | $5,355 | $5.39 |
| 3 Bedroom | 12 | 2.8 | | 1,264 | $7,708 | $6.05 | $8,977 | $5.74 |
| 4 Bedroom | 1 | 0.2 | | 1,832 | $7,500 | $4.09 | $7,500 | $4.09 |
| Total/Wtd. Avg. | 432 | 100.0 | % | 724 | $4,091 | $5.67 | $4,477 | $5.37 |
| (1) | Based on the underwritten rent roll as of July 22, 2022. |
The following table presents detailed information with respect to the current rent-stabilized units at the Park West Village Property:
| As Is Rent-Stabilized Unit Summary |
| Unit Type | No. of Units(1) | % of Total | Average Unit Size (SF)(1) | Average Monthly Rental Rate(1) | Average Monthly Rental Rate per SF(1) | Average Monthly Market Rental Rate(2) | Average Monthly Market Rental Rate per SF(2) |
| Studio | 115 | 27.5 | % | 469 | $1,175 | $2.52 | $1,318 | $2.49 |
| 1 Bedroom | 225 | 53.8 | | 842 | $1,337 | $1.58 | $1,417 | $1.60 |
| 2 Bedroom | 77 | 18.4 | | 1,119 | $1,779 | $1.58 | $1,843 | $1.51 |
| 3 Bedroom | 1 | 0.2 | | 1,153 | $3,000 | $2.60 | $3,000 | $2.60 |
| Total/Wtd. Avg. | 418 | 100.0 | % | 791 | $1,378 | $1.73 | $1,473 | $1.72 |
| (1) | Based on the underwritten rent roll as of July 22, 2022. |
The following table presents detailed information with respect to the projected post-renovation market rate units at the Park West Village Property:
| Projected Post-Renovation Market Rate Unit Summary |
| Unit Type | No. of Units(1) | % of Total | Average Unit Size (SF)(1) | Average Monthly Rental Rate(1) | Average Monthly Rental Rate per SF(1) | Average Monthly Market Rental Rate(2) | Average Monthly Market Rental Rate per SF(2) |
| Studio | 155 | 38.3 | % | 464 | $3,085 | $6.66 | $3,243 | $5.85 |
| 1 Bedroom | 153 | 37.8 | | 837 | $5,450 | $6.51 | $4,768 | $5.08 |
| 2 Bedroom | 85 | 21.0 | | 910 | $6,108 | $6.71 | $5,355 | $5.39 |
| 3 Bedroom | 11 | 2.7 | | 1,298 | $8,835 | $6.80 | $8,977 | $5.74 |
| 4 Bedroom | 1 | 0.2 | | 1,832 | $12,366 | $6.75 | $7,500 | $4.09 |
| 5 Bedroom | NAP | NAP | NAP | NAP | NAP | NAP | NAP |
| Total/Wtd. Avg. | 405 | 100.0 | % | 724 | $4,792 | $6.62 | $4,477 | $5.37 |
| (1) | Based on the underwritten rent roll as of July 22, 2022. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 12 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 1 – Park West Village |
The following table presents detailed information with respect to the projected post-renovation rent-stabilized units at the Park West Village Property:
| Projected Post-Renovation Rent-Stabilized Unit Summary |
| Unit Type | No. of Units(1) | % of Total | Average Unit Size (SF)(1) | Average Monthly Rental Rate(1) | Average Monthly Rental Rate per SF(1) | Average Monthly Market Rental Rate(2) | Average Monthly Market Rental Rate per SF(2) |
| Studio | 105 | 25.2 | % | 465 | $1,292 | $2.78 | $1,318 | $2.49 |
| 1 Bedroom | 212 | 50.8 | | 847 | $1,468 | $1.73 | $1,417 | $1.60 |
| 2 Bedroom | 88 | 21.1 | | 1,163 | $3,241 | $2.79 | $1,843 | $1.51 |
| 3 Bedroom | 10 | 2.4 | | 1,529 | $9,872 | $6.46 | $3,000 | $2.60 |
| 4 Bedroom | 1 | 0.2 | | 1,700 | $11,473 | $6.75 | NAP | NAP |
| 5 Bedroom | 1 | 0.2 | | 2,642 | $17,831 | $6.75 | NAP | NAP |
| Total/Wtd. Avg. | 417 | 100.0 | % | 840 | $2,063 | $2.46 | $1,473 | $1.72 |
| (1) | Based on the underwritten rent roll as of July 22, 2022. |
COVID-19 Update. As of July 22, 2022, the Park West Village Property is open and operating. As of the date of this term sheet, the Park West Village Whole Loan is not subject to any forbearance, modification or debt service relief request. The first payment date of the Park West Village Whole Loan was September 6, 2022.
Environmental. According to the Phase I report dated January 20, 2022, there was no evidence of any recognized environmental conditions at the Park West Village Property. The Phase I environmental assessment, however, identified historical recognized environmental conditions at the Park West Village Property.
The following table presents certain information relating to the historical and current occupancy of the Park West Village Property:
| Historical and Current Multifamily Occupancy(1) |
| 2019 | 2020 | 2021 | Current(2) |
| 94.2% | 91.2% | 87.9% | 94.7% |
| (1) | Historical occupancies are as of July 31 of each respective year. |
| (2) | Current occupancy is as of July 22, 2022. |
| Operating History and Underwritten Net Cash Flow |
| | 2019 | 2020 | 2021 | TTM(1) | Underwritten | Per Unit | % | (2) |
| Residential Base Rent | $24,956,720 | $22,792,744 | $22,129,703 | $24,536,542 | $28,419,283 | $33,434 | 83.9 | % |
| Commercial Base Rent | 71,777 | 70,353 | 75,268 | 74,908 | 79,852 | 94 | 0.2 | |
| Gross Potential Rent | $25,028,497 | $22,863,097 | $22,204,971 | $24,611,451 | $28,499,136 | $33,528 | 84.2 | % |
| Total Reimbursements | 2,945 | 17,850 | 0 | 0 | 11,355 | 13 | 0.0 | |
| Supplemental Income Reserve(3) | 0 | 0 | 0 | 0 | 4,919,913 | 5,788 | 14.5 | |
| Total Other Income | 567,004 | 760,807 | 477,438 | 424,187 | 424,187 | 499 | 1.3 | |
| Net Rental Income | $25,598,446 | $23,641,754 | $22,682,409 | $25,035,638 | $33,854,591 | $39,829 | 100.0 | % |
| (Vacancy/Credit Loss) | (2,062) | (2,942) | 0 | 0 | (1,067,415) | (1,256) | (3.2) | |
| Effective Gross Income | $25,596,385 | $23,638,812 | $22,682,409 | $25,035,638 | $32,787,176 | $38,573 | 96.8 | % |
| Total Expenses | $8,870,813 | $9,046,781 | $9,325,401 | $9,544,221 | $9,786,898 | $11,514 | 29.8 | % |
| Net Operating Income(3) | $16,725,571 | $14,592,031 | $13,357,008 | $15,491,417 | $23,000,278 | $27,059 | 70.2 | % |
| Total Capex/RR(4) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
| Net Cash Flow | $16,725,571 | $14,592,031 | $13,357,008 | $15,491,417 | $23,000,278 | $27,059 | 70.2 | % |
| (1) | TTM represents the trailing 12 months ending May 2022. |
| (2) | % column represents percent of Net Rental Income for all revenue lines and represents percent of Effective Gross Income for the remainder of the fields. |
| (3) | The Underwritten Net Operating Income is greater than the TTM Net Operating Income due in part to (i) the borrower sponsors recently renovating 29 units, which has increased rents at the Park West Village Property and (ii) disbursements from the Supplemental Income Reserve. Please refer to “Escrows and Reserves” below. |
| (4) | The borrower sponsors funded five years’ worth of Capex/RR at origination. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 13 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 1 – Park West Village |
The Market. The Park West Village Property is located in New York, New York, within the New York, NY-NJ-PA Metropolitan Statistical Area. According to the appraisal, the unemployment rate from 2011 through 2021 in New York City increased at an average annual rate of 0.3% and is expected to decrease at an average annual rate of 4.7% between 2022 and 2026. The estimated 2021 median annual household income in New York City was $68,261. The leading industries in New York City are education and health, professional and business, government, and trade, transportation and utilities. The largest employer in New York City is Northwell Health, which employs 68,088 people. The Park West Village Property is located on the blocks bound by Columbus Avenue, Amsterdam Avenue, West 97th Street and West 100th Street. The buildings at 784 Columbus Avenue and 792 Columbus Avenue have street frontage on West 97th and 100th Streets, respectively. The building at 788 Columbus Avenue does not have street frontage; however, all three of the Park West Village Property buildings are accessible from Columbus Avenue via a breezeway through the development to the east of the subject buildings, which comprises the entire blockfront of Columbus Avenue from West 97th Street to West 100th Street. The Upper West Side is primarily residential in nature, with adequate retail to support the area. Manhattan’s central business district is located to the southeast of the Upper West Side. Immediately to the south is the Clinton area, which is characterized by a wide range of uses including residential, office buildings and the Theater District. The neighborhood bordering the Upper West Side to the north is known as Morningside Heights, which is primarily residential and home to Columbia University. The Park West Village Property benefits from its proximity to Columbus Avenue, as well as Broadway, which is dense with prime retail and commercial space.
The Park West Village Property is situated in the Upper West Side multifamily submarket. According to CoStar, as of February 2022, the Upper West Side multifamily submarket had an overall vacancy rate of 2.2%, with net absorption totaling 11 units. The vacancy rate decreased 1.7% over the past 12 months. Rental rates increased by 5.9% for the past 12 months and ended at $4,760 per unit per month. A total of 336 units are still under construction at the end of the first quarter of 2022.
According to the appraisal, the 2021 population for New York City was approximately 8,305,600 and is forecasted to grow to approximately 8,317,700 in 2022, and approximately 8,335,900 in 2026.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 14 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 1 – Park West Village |
The following table presents certain information relating to comparable multifamily rental property to the Park West Village Property:
| Comparable Rental Summary(1) |
| Property / Location | Year Built | Occupancy | # of Units | Unit Mix | Average SF per Unit | Average Rent per SF | Average Rent per Unit |
| Park West Village(2) | 1950, 1958, 1963 | 94.7% | 850 | Studio | 466 | $4.79 | $2,226 |
| 784, 788 and 792 Columbus Avenue | 1 Bed | 840 | $3.22 | $2,711 |
| New York, NY | 2 Bed | 1,011 | $3.63 | $3,663 |
| | 3 Bed | 1,255 | $5.79 | $7,316 |
| | 4 Bed | 1,832 | $4.09 | $7,500 |
| West 96th Apartments | 1987 | 95.2% | 207 | 1 Bed | 733 | $6.28 | $4,606 |
| 750 Columbus Avenue | | | | 2 Bed | 1,006 | $6.25 | $6,287 |
| New York, NY | | | | 3 Bed | 1,421 | $6.23 | $8,853 |
| The Westmont Apartments | 1986 | 100.0% | 163 | Studio | 610 | $5.75 | $3,509 |
| 730 Columbus Avenue | | | | 1 Bed | 802 | $5.59 | $4,479 |
| New York, NY | | | | 2 Bed | 1095 | $5.81 | $6,360 |
| | | | | 3 Bed | 1,403 | $5.67 | $7,951 |
| Stonehenge Village | 1930 | 94.5% | 414 | Studio | 515 | $5.92 | $3,050 |
| 160 West 97th Street | | | | 1 Bed | 686 | $6.41 | $4,400 |
| New York, NY | | | | 2 Bed | 951 | $5.96 | $5,667 |
| | | | | 3 Bed | 1,123 | $5.79 | $6,500 |
| The Greystone | 1923 | 98.6% | 366 | Studio | 321 | $9.14 | $2,938 |
| 212 West 91st Street | | | | 1 Bed | 583 | $6.53 | $3,809 |
| New York, NY | | | | 2 Bed | 955 | $6.13 | $5,850 |
| Columbus Square | 2009 | 93.7% | 710 | Studio | 445 | $8.13 | $3,616 |
| 808 Columbus Avenue | | | | 1 Bed | 649 | $7.67 | $4,979 |
| New York, NY | | | | 2 Bed | 970 | $7.46 | $7,235 |
| | | | | 3 Bed | 1,376 | $6.28 | $8,640 |
| The Paris New York | 1931 | 98.9% | 176 | Studio | 516 | $6.19 | $3,195 |
| 752 West End Avenue | | | | 1 Bed | 501 | $6.13 | $3,070 |
| New York, NY | | | | 2 Bed | 1,065 | $5.97 | $6,362 |
| | | | | 3 Bed | 1,894 | $5.33 | $10,095 |
| The Lyric | 1996 | 98.6% | 285 | Studio | 527 | $6.86 | $3,618 |
| 255 West 94th Street | | | | 1 Bed | 677 | $6.95 | $4,701 |
| New York, NY | | | | 2 Bed | 1,077 | $6.80 | $7,320 |
| (1) | Source: Appraisal, unless otherwise indicated. |
| (2) | Based on underwritten rent roll dated as of July 22, 2022. Average Rent per SF and Average Rent per Unit reflect average monthly in-place rent for occupied units. |
The Borrowers. The borrowers under the Park West Village Whole Loan are CF PWV LLC and SM PWV LLC, as tenants-in-common, each a single-purpose Delaware limited liability company with two independent directors. Legal counsel to the borrowers delivered a non-consolidation opinion in connection with the origination of the Park West Village Whole Loan.
The Borrower Sponsors. The borrower sponsors and non-recourse carveout guarantors are Meyer Chetrit and Amended and Restated 2013 LG Revocable Trust, a trust established by Laurance Gluck. Meyer Chetrit is one of the controllers of The Chetrit Group. The Chetrit Group is an experienced, privately held New York City real estate development firm controlled by two brothers: Joseph and Meyer Chetrit. The Chetrit Group, which is headquartered in Manhattan, has ownership interests in over 14 million square feet of commercial and residential real estate across the United States, including New York, Chicago, Miami, and Los Angeles, as well as internationally.
Laurence Gluck is the founder of Stellar Management, a real estate development and management firm founded in 1985. Based in New York City, Stellar Management owns and manages a portfolio of over 13,000 apartments in 100 buildings located across New York City and over three million square feet of office space. Prior to founding Stellar Management, Laurence Gluck served as a real estate attorney at Proskauer, Rose, Goetz & Mendelsohn and later as a partner at Dreyer & Traub. Laurence Gluck also formerly served as a member of the Board of Governors of the Real Estate Board of New York.
Property Management. The Park West Village Property is managed by PWV Management LLC, an affiliate of the borrowers.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 15 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 1 – Park West Village |
Escrows and Reserves. At origination of the Park West Village Whole Loan, the borrowers deposited approximately (i) $919,476 into a real estate tax reserve account, (ii) $850,000 into a replacement reserve account, (iii) $7,858,500 into a unit upgrade reserve account and (iv) $4,920,000 into a supplemental income reserve account.
Tax Escrows – The borrowers are required to deposit into a real estate tax reserve, on a monthly basis, 1/12th of the taxes that the lender estimates will be payable over the next-ensuing 12-month period (initially estimated to be approximately $459,738).
Insurance Escrows – The borrowers are required to deposit into an insurance reserve, on a monthly basis, 1/12th of the amount which will be sufficient to pay the insurance premiums due for the renewal of coverage afforded by such policies; provided, however, such insurance reserve has been conditionally waived so long as (i) no event of default under the Park West Village Whole Loan is continuing and (ii) the borrowers maintain a blanket policy meeting the requirements of the Park West Village Whole Loan documents. The borrowers are currently maintaining a blanket policy.
Supplemental Income Reserve – The borrowers deposited $4,920,000 into a supplemental income reserve account (the “Supplemental Income Reserve”) at origination of the Park West Village Whole Loan. Unless and until the Park West Village Property (excluding the amount on deposit in the Supplemental Income Reserve) achieves a 6.25% “transient” Park West Village Whole Loan debt yield (calculated on the basis of annualized net cash flow for a three-month period ending with the most recently completed month), the lender may require the borrowers to make additional Supplemental Income Reserve deposits if and to the extent the lender determines, in its reasonable discretion on a quarterly basis after July 6, 2023 during the Park West Village Whole Loan term, that additional supplemental income reserve deposits are required in order to achieves (when the additional deposit and all other deposits in the Supplemental Income Reserve account are added to net cash flow for the Park West Village Property) a 6.25% transient Park West Village Whole Loan debt yield for the following 12, 9, 6 or 3 months (such applicable 12-, 9-, 6- or 3- month period depending on the quarter with respect to which such determination by the lender is made). The guarantors provided a related carry guaranty of certain carry costs, including real estate taxes, insurance premiums, debt service and operating expenses, for any period until the Park West Village Property achieves a 6.25% transient Park West Village Whole Loan debt yield (excluding the amount on deposit in the Supplemental Income Reserve). The obligations of the guarantors under such carry guaranty are limited to the additional Supplemental Income Reserve deposit amounts as and when due.
So long as no event of default under the Park West Village Whole Loan is continuing, on each payment date, the lender is required to transfer the Monthly Supplemental Income Reserve Disbursement Amount (as defined below) from the Supplemental Income Reserve to the cash management account. Such funds deposited into the cash management account will be required to be applied with all other funds then on deposit in the cash management account in the order of priority set forth in the Park West Village Whole Loan documents, as described under “Lockbox / Cash Management” below. So long as no event of default under the Park West Village Whole Loan is continuing, upon such time as the lender has reasonably determined that the Park West Village Property (excluding the amount on deposit in the Supplemental Income Reserve) has achieved a 6.25% or higher for one calendar quarter “transient” Park West Village Whole Loan debt yield (calculated on the basis of annualized net cash flow for a three-month period ending with the most recently completed month), then upon the borrowers’ written request, all of the funds in the Supplemental Income Reserve will be required to be disbursed to the borrowers; provided, however, if a Cash Trap Period (as defined below) is then continuing, then such funds will not be disbursed to the borrowers, and such funds will instead be deposited into the excess cash reserve account, to be applied in accordance with the terms of the Park West Village Whole Loan documents.
“Monthly Supplemental Income Reserve Disbursement Amount” means 1/12th of (x) the initial Supplemental Income Reserve deposit with respect to the first 12 payment dates occurring during the term of the Park West Village Whole Loan, and (y) each Supplemental Income Reserve additional deposit amount with respect to the 12 payment dates following the date that the borrowers are required to deposit such Supplemental Income Reserve additional deposit amount pursuant to the terms of the Park West Village Whole Loan documents; provided that, if at any time the lender reassesses the Supplemental Income Reserve additional deposit amount in accordance with the terms of the Park West Village Whole Loan documents, the Monthly Supplemental Income Reserve Disbursement Amount will be adjusted so that all of funds in the Supplemental Income Reserve will be disbursed in equal monthly installments ending on such Supplemental Income Reserve reassessment date (i.e., so that there will be no funds in the Supplemental Income Reserve on deposit on such Supplemental Income Reserve reassessment date).
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 16 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 1 – Park West Village |
Lockbox / Cash Management. The Park West Village Whole Loan is structured with a hard lockbox for commercial tenants and a soft lockbox for residential tenants, and in place cash management. The borrowers are required to deposit all rents collected from residential tenants into the lockbox account within three days of receipt. The borrowers are required to deliver a tenant direction letter to commercial tenants to deposit all rents directly to the lockbox account. The borrowers are required to cause all amounts deposited into the lockbox account to be transferred on each business day to a cash management account controlled by the lender. Absent an event of default under the Park West Village Whole Loan documents, funds on deposit in the cash management account are applied on each monthly payment date in amounts and in the order of priority set forth in the Park West Village Whole Loan Documents, including any required tax and insurance reserve deposits, deposit account bank fees, monthly debt service on the Park West Village Whole Loan, other amounts payable to the lender under the Park West Village Whole Loan, operating expenses and extraordinary expenses reflected in the annual budget or otherwise approved by lender, with the remaining funds in the cash management account to be disbursed to the borrowers unless a Cash Trap Period is then continuing, in which event the remaining funds will be deposited into an excess cash reserve account under the lender’s control, and released to the borrower when the Cash Trap Period ends. Upon an event of default under the Park West Village Whole Loan documents, the lender will apply funds in such priority as it may determine.
A “Cash Trap Period” means a period commencing upon the earliest to occur of (i) an event of default; (ii) any bankruptcy action of the borrowers, principal, guarantor or manager has occurred; and (iii) the failure by the borrowers, after stabilization (i.e. until a Park West Village Whole Loan debt yield of at least 6.25% has been achieved (without taking into account any disbursement of Supplemental Income Reserve funds) for one calendar quarter, provided no event of default then exists), to maintain a Park West Village Whole Loan debt service coverage ratio of at least 1.20x and will be cured upon (a) with respect to clause (i) above, the lender accepts a cure of the event of default; (b) in the case of a bankruptcy action by or against manager only, the borrowers replace the manager with a qualified replacement as defined in the Park West Village Whole Loan documents; or (c) with respect to clause (iii) above, the Park West Village Whole Loan debt service coverage ratio is equal to or greater than 1.25x for one calendar quarter.
Subordinate Debt. The Park West Village Property also secures the Park West Village Note B-A Subordinate Companion Loan, which has a Cut-off Date principal balance of $66,500,000 and the Park West Village Note B-B Subordinate Companion Loan, which has a Cut-off Date principal balance of $111,000,000. The Park West Village Subordinate Companion Loans accrue interest at 4.65000% per annum. The Park West Village Senior Loan is senior in right of payment to the Park West Village Note B-A Subordinate Companion Loan and the Park West Village Note B-B Subordinate Companion Loan, and the Park West Village Note B-A Subordinate Companion Loan is senior in right of payment to the Park West Village Note B-B Subordinate Companion Loan.
| Whole Loan Metrics |
| | % of Whole Loan | Cumulative Cut-off Date LTV | Cumulative UW NOI Debt Yield(1) | Cumulative UW NCF DSCR(1) |
| A Notes | 51.4% | 32.6% | 12.3% | 2.60x |
| B-A Note | 18.2% | 44.2% | 9.1% | 1.92x |
| B-B Note | 30.4% | 63.5% | 6.3% | 1.34x |
| (1) | The UW NOI and UW NCF includes disbursements from a Supplemental Income Reserve of $4,920,000. Please refer to “Escrows and Reserves” above. |
Mezzanine Debt. None.
Partial Release. Not permitted.
Ground Lease. None.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 17 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 2 – Kingston Square Apartments |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 18 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 2 – Kingston Square Apartments |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 19 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 2 – Kingston Square Apartments |
| Mortgage Loan Information | | Property Information |
| Mortgage Loan Seller: | BMO | | Single Asset / Portfolio: | Single Asset |
| Original Principal Balance(1): | $37,000,000 | | Title: | Fee |
| Cut-off Date Principal Balance(1): | $37,000,000 | | Property Type – Subtype: | Multifamily – Garden |
| % of IPB: | 5.1% | | Net Rentable Area (Units): | 523 |
| Loan Purpose: | Recapitalization | | Location: | Indianapolis, IN |
| Borrower: | Kingston Property Owner LLC | | Year Built / Renovated: | 1963, 1992, 1995 / 2020-2022 |
| Borrower Sponsor: | Joel Werzberger | | Occupancy: | 96.9% |
| Interest Rate: | 5.82000% | | Occupancy Date: | 8/18/2022 |
| Note Date: | 8/25/2022 | | 4th Most Recent NOI (As of): | $3,413,361 (12/31/2019) |
| Maturity Date: | 9/6/2032 | | 3rd Most Recent NOI (As of): | $3,414,143 (12/31/2020) |
| Interest-only Period: | 120 months | | 2nd Most Recent NOI (As of): | $4,206,794 (12/31/2021) |
| Original Term: | 120 months | | Most Recent NOI (As of): | $4,433,434 (TTM 7/31/2022) |
| Original Amortization Term: | None | | UW Economic Occupancy: | 95.0% |
| Amortization Type: | Interest Only | | UW Revenues: | $6,548,668 |
| Call Protection(2): | L(25),D(91),O(4) | | UW Expenses: | $1,853,250 |
| Lockbox / Cash Management: | Springing / Springing | | UW NOI: | $4,695,418 |
| Additional Debt(1): | Yes | | UW NCF: | $4,590,818 |
| Additional Debt Balance(1): | $14,000,000 | | Appraised Value / Per Unit: | $85,700,000 / $163,862 |
| Additional Debt Type(1): | Pari Passu | | Appraisal Date: | 8/1/2022 |
| | | | | |
| Escrows and Reserves(3) | | Financial Information(1) |
| | Initial | Monthly | Initial Cap | | Cut-off Date Loan / Unit: | $97,514 |
| Taxes: | $154,550 | $25,069 | N/A | | Maturity Date Loan / Unit: | $97,514 |
| Insurance: | $0 | Springing | N/A | | Cut-off Date LTV: | 59.5% |
| Replacement Reserves: | $0 | $8,717 | N/A | | Maturity Date LTV: | 59.5% |
| Deferred Maintenance: | $110,375 | $0 | N/A | | UW NCF DSCR: | 1.53x |
| | | | | | UW NOI Debt Yield: | 9.2% |
| | | | | | | |
| Sources and Uses |
| Sources | Proceeds | % of Total | | Uses | Proceeds | % of Tot | al |
| Mortgage Loan | $51,000,000 | 77.3 | % | | Loan Payoff | $35,230,067 | 53.4 | % |
| Borrower Sponsor Equity(4) | 15,000,000 | 22.7 | | | Partnership Buyout(4) | 15,000,000 | 22.7 | |
| | | | | Principal Equity Distribution | 14,898,788 | 22.6 | |
| | | | | Closing Costs | 606,220 | 0.9 | |
| | | | | Upfront Reserves | 264,925 | 0.4 | |
| Total Sources | $66,000,000 | 100.0 | % | | Total Uses | $66,000,000 | 100.0 | % |
| (1) | The Kingston Square Apartments Mortgage Loan (as defined below) is part of a whole loan evidenced by four pari passu notes with an aggregate original principal balance of $51,000,000. Financial Information in the chart above reflects the Cut-off Date balance of the Kingston Square Apartments Whole Loan (as defined below). For additional information, see “The Loan” below. |
| (2) | Defeasance of the Kingston Square Apartments Whole Loan is permitted at any time after the earlier to occur of (a) the end of the two-year period commencing on the closing date of the securitization of the last promissory note representing a portion of the Kingston Square Apartments Whole Loan to be securitized and (b) August 25, 2026. The assumed defeasance lockout period of 25 payments is based on the closing date of this transaction in October 2022. The actual lockout period may be longer. |
| (3) | For a full description of Escrows and Reserves, please refer to “Escrows and Reserves” below. |
| (4) | Borrower Sponsor Equity contributed in order to effectuate a recapitalization of the borrower by buying out a 50% owner. |
The Loan. The second largest mortgage loan (the “Kingston Square Apartments Mortgage Loan”) is part of a whole loan (the “Kingston Square Apartments Whole Loan”) that is secured by the borrower’s fee interest in a 523-unit, garden-style multifamily property located in Indianapolis, Indiana (the “Kingston Square Apartments Property”). The Kingston Square Apartments Whole Loan is comprised of four pari passu notes, with an aggregate outstanding principal balance as of the Cut-off Date of $51,000,000. The Kingston Square Apartments Mortgage Loan is evidenced by the controlling Note A-1 and the non-controlling note A-3 with an aggregate outstanding principal balance as of the Cut-off Date of $37,000,000 and represents approximately 5.1% of the Initial Pool Balance.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 20 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 2 – Kingston Square Apartments |
The Kingston Square Apartments Whole Loan will be serviced pursuant to the pooling and servicing agreement for the BMO 2022-C3 securitization. The Kingston Square Apartments Whole Loan was originated on August 25, 2022 by Bank of Montreal (“BMO”) and accrues interest at a fixed rate of 5.82000% per annum. The Kingston Square Apartments Whole Loan has an initial term of 120 months, a remaining term of 119 months and is interest-only for the full term. The scheduled maturity date of the Kingston Square Apartments Whole Loan is the due date that occurs in September 2032. The proceeds of the Kingston Square Apartments Whole Loan were used to recapitalize the Kingston Square Apartments Property, pay origination costs, fund upfront reserves and return equity to the borrower sponsors.
The table below summarizes the promissory notes that comprise the Kingston Square Apartments Whole Loan. The relationship between the holders of the Kingston Square Apartments Whole Loan is governed by a co-lender agreement as described under “Description of the Mortgage Pool—The Whole Loans—The Serviced Pari Passu Whole Loans” in the Preliminary Prospectus.
| Whole Loan Summary |
| Note | Original Balance | Cut-off Date Balance | | Note Holder | Controlling Piece |
| A-1 | $30,000,000 | $30,000,000 | | BMO 2022-C3 | Yes |
| A-2(1) | $10,000,000 | $10,000,000 | | BMO | No |
| A-3 | $7,000,000 | $7,000,000 | | BMO 2022-C3 | No |
| A-4(1) | $4,000,000 | $4,000,000 | | BMO | No |
| Whole Loan | $51,000,000 | $51,000,000 | | | |
| (1) | Expected to be contributed to one or more future securitization(s). |
The Property. The Kingston Square Apartments Property consists of 25, two-story multifamily buildings, totaling 523 residential units and four, one-to-two-story non-residential buildings. The Kingston Square Apartments Property is located in Indianapolis, Indiana and is situated approximately one mile from Interstate 465, approximately three miles from Interstate 70, approximately five miles from U.S. Route 40, and approximately eight miles from Interstates 74 and 65. The Kingston Square Apartments Property was built in 1963, 1992, and 1995, and features a range of studio, one-bedroom, two-bedroom, and three-bedroom residential units. The Kingston Square Apartments Property units all feature faux-wood vinyl, vinyl tile and carpet flooring, air conditioning, full kitchen appliances, laminate countertops and certain units include a private balcony or patio. Community spaces include a barbecue/picnic area, business center, clubhouse, fitness center, playground, and pool. The Kingston Square Apartments Property consists of 753 parking spaces resulting in a ratio of approximately 1.4 parking spaces per unit.
The following table presents detailed information with respect to the unit mix at the Kingston Square Apartments Property:
| Unit Mix Summary(1) |
| Unit Type | No. of Units | % of Total | Average Unit Size (SF) | Average Monthly Rental Rate | Average Monthly Rental Rate per SF | Average Monthly Market Rental Rate | Average Monthly Market Rental Rate per SF |
| Studio Standard | 68 | 13.0 | % | 650 | $786 | $1.21 | $788 | $1.21 |
| Studio Lavish | 4 | 0.8 | | 650 | $773 | $1.19 | $799 | $1.23 |
| 1 Bedroom Standard | 212 | 40.5 | | 700 | $859 | $1.23 | $876 | $1.25 |
| 1 Bedroom Lavish | 4 | 0.8 | | 700 | $931 | $1.33 | $876 | $1.25 |
| 2 Bedroom Standard | 140 | 26.8 | | 800 | $996 | $1.24 | $1,016 | $1.27 |
| 2 Bedroom Lavish | 4 | 0.8 | | 800 | $1,041 | $1.30 | $1,240 | $1.55 |
| 2 Bedroom Townhome | 28 | 5.4 | | 950 | $1,215 | $1.28 | $1,240 | $1.30 |
| 3 Bedroom Lavish | 63 | 12.0 | | 1,050 | $1,301 | $1.24 | $1,326 | $1.26 |
| Total/Wtd. Avg. | 523 | 100.0 | % | 776 | $963 | $1.24 | $978 | $1.26 |
| (1) | Based on the underwritten rent roll as of August 18, 2022. Average Monthly Rental Rate and Average Monthly Rental Rate per SF reflect average monthly in-place rent for occupied units. |
COVID-19 Update. As of August 15, 2022, the Kingston Square Apartments Property was open and operating. As of the date of this term sheet, the Kingston Square Apartments Whole Loan is not subject to any forbearance, modification or debt service relief request. The first payment date of the Kingston Square Apartments Whole Loan was September 6, 2022.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 21 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 2 – Kingston Square Apartments |
Environmental. According to the Phase I report dated August 4, 2022, there was no evidence of any recognized environmental conditions at the Kingston Square Apartments Property.
The following table presents certain information relating to the historical and current occupancy of the Kingston Square Apartments Property:
| Historical and Current Multifamily Occupancy(1) |
| 2019(2) | 2020 | 2021 | Current(3) |
| NAV | 97.0% | 96.0% | 96.9% |
| (1) | Historical occupancies are as of December 31 of each respective year. |
| (2) | 2019 occupancy is not available as the Kingston Square Apartments Property was acquired in 2019. |
| (3) | Current occupancy is as of August 18, 2022. |
| Operating History and Underwritten Net Cash Flow |
| | 2019 | 2020 | 2021 | TTM(1) | Underwritten | Per Unit | %(2) |
| Gross Potential Rent | $4,404,264 | $4,273,258 | $5,250,707 | $6,016,824 | $6,138,573 | $11,737 | 100.0 | % |
| (Vacancy) | 0 | 0 | 0 | (430,196) | (306,929) | (587) | (5.0) | |
| Net Rental Income | $4,404,264 | $4,273,258 | $5,250,707 | $5,586,628 | $5,831,644 | $11,150 | 95.0 | % |
| Other Income(3) | 592,690 | 668,064 | 661,533 | 689,603 | 717,024 | 1,371 | 11.7 | |
| Effective Gross Income | $4,996,954 | $4,941,322 | $5,912,240 | $6,276,231 | $6,548,668 | $12,521 | 106.7 | % |
| | | | | | | | |
| Total Expenses | $1,583,593 | $1,527,179 | $1,705,446 | $1,842,797 | $1,853,250 | $3,543 | 28.3 | % |
| | | | | | | | |
| Net Operating Income | $3,413,361 | $3,414,143 | $4,206,794 | $4,433,434 | $4,695,418 | $8,978 | 71.7 | % |
| | | | | | | | |
| Replacement Reserve | 0 | 0 | 0 | 0 | 104,600 | 200 | 1.6 | |
| | | | | | | | |
| Net Cash Flow | $3,413,361 | $3,414,143 | $4,206,794 | $4,433,434 | $4,590,818 | $8,778 | 70.1 | % |
| (1) | TTM reflects the trailing 12 months ending July 31, 2022. |
| (2) | % column represents percent of Gross Potential Rent for revenue fields and represents percent of Effective Gross Income for the remainder of fields. |
| (3) | Other Income includes trailing one month annualized utility reimbursements and trailing 12 months other income and pet income. |
The Market. The Kingston Square Apartments Property is located in Indianapolis, Indiana, within the Indianapolis-Carmel-Anderson, IN Metropolitan Statistical Area. According to the appraisal, the employment rate from 2011 through 2021 in Indiana increased at an average annual rate of 1.1% and the unemployment rate decreased by 3.6% between 2020 and 2021. The leading industries in Indianapolis are education, healthcare and social assistance, manufacturing, government, wholesale and trade, and transportation and warehousing. The largest employer in Indianapolis is Indiana University Health, which employs 23,187 people. The Kingston Square Apartments Property is located on East Twin Oaks Drive with approximately 65 feet of frontage. Transportation within proximity to the Kingston Square Apartments Property, including Interstate 465 and Interstate 70, provides linkage to the surrounding area. The local area is primarily occupied by industrial use land, with retail space to support the area.
The Kingston Square Apartments Property is situated in the East Indianapolis apartment submarket. According to the appraisal, as of the second quarter of 2022, the East Indianapolis apartment submarket had an overall vacancy rate of 4.3%, with net absorption totaling 18 units. The vacancy rate decreased 1.1% over the past 12 months. Rental rates increased by $58 since the fourth quarter of 2021 and ended at $938 per unit per month.
According to the appraisal, the 2021 population within a one-, three-, and five-mile radius of the Kingston Square Apartments Property was 7,795, 91,583, and 224,265, respectively. According to the appraisal, the 2021 median household income within a one-, three-, and five-mile radius of the Kingston Square Apartments Property was $33,089, $34,056, and $39,868, respectively.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 22 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 2 – Kingston Square Apartments |
The following table presents certain information relating to comparable multifamily rental property to the Kingston Square Apartments Property:
| Comparable Rental Summary(1) |
| Property / Location | Year Built / Renovated | Occupancy | # of Units | Unit Mix | Average SF per Unit | Average Rent per SF | Average Rent per Unit |
| Kingston Square Apartments(2) | 1963, 1992, 1995 / 2020-2022 | 96.9% | 68 | Studio Standard | 650 | $1.21 | $786 |
| 7171 East Twin Oaks Drive | 4 | Studio Lavish | 650 | $1.19 | $773 |
| Indianapolis, IN | 212 | 1 Standard | 700 | $1.23 | $859 |
| | 4 | 1 Lavish | 700 | $1.33 | $931 |
| | 140 | 2 Standard | 800 | $1.24 | $996 |
| | 4 | 2 Lavish | 800 | $1.30 | $1,041 |
| | 28 | 2 Townhome | 950 | $1.28 | $1,215 |
| | 63 | 3 Lavish | 1,050 | $1.24 | $1,301 |
| Lawrence Landing | 1972 / 2002 | 97.0% | 108 | 1 Bed | 847 | $1.23 | $1,039 |
| Indianapolis, IN | | | 246 | 2 Bed | 1,047 | $1.20 | $1,255 |
| 6875 Faris Avenue | | | | | | | |
| Harrison Point Apartments | 1974 / NAP | 95.6% | 6 | Studio | 550 | $1.73 | $952 |
| Indianapolis, IN | | | 79 | 1 Bed | 750 | $1.25 | $934 |
| 9093 Bourbon Street | | | 229 | 2 Bed | 850 | $1.47 | $1,247 |
| | | | 28 | 3 Bed | 1,150 | $0.85 | $977 |
| The M Club | 1979 / NAP | 96.0% | 40 | Studio | 550 | $1.48 | $815 |
| Indianapolis, IN | | | 196 | 1 Bed | 729 | $1.28 | $931 |
| 7007 Courthouse Drive | | | 152 | 2 Bed | 931 | $1.44 | $1,344 |
| Waterstone Place Apartments | 1974 / 2013 | 97.0% | 96 | 1 Bed | 759 | $1.28 | $972 |
| Indianapolis, IN | | | 93 | 2 Bed | 1,025 | $1.23 | $1,259 |
| 2755 Merlin Lake Drive | | | 3 | 3 Bed | 1,006 | $1.23 | $1,236 |
| Serenity Park | 1967 / 2003 | 94.1% | 121 | 1 Bed | 631 | $1.34 | $846 |
| Indianapolis, IN | | | 239 | 2 Bed | 991 | $0.76 | $749 |
| 9060 East 39th Street | | | 1 | 3 Bed | 1,200 | $0.83 | $991 |
| Residences on 56th Street | 1969 / 2020 | 94.1% | 186 | 1 Bed | 695 | $1.31 | $912 |
| Indianapolis, IN | | | 471 | 2 Bed | 1,380 | $0.80 | $1,105 |
| 6800 Brendon Way West | | | 98 | 3 Bed | 1,915 | $0.96 | $1,838 |
| (1) | Source: Appraisal, unless otherwise indicated. |
| (2) | Based on underwritten rent roll dated as of August 18, 2022. Average Rent per SF and Average Rent per Unit reflect average monthly in-place rent for occupied units. |
The Borrower. The borrower under the Kingston Square Apartments Whole Loan is Kingston Property Owner LLC, a single-purpose Delaware limited liability company with one independent director. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Kingston Square Apartments Whole Loan.
The Borrower Sponsor. The borrower sponsor and non-recourse carveout guarantor is Joel Werzberger. Joel Werzberger has nearly 20 years of experience in real estate and currently owns over 34 properties consisting of more than 4,369 Units. The Sponsor owns assets throughout the country with concentrations in New York, Indiana, Virginia, North Carolina, Florida and Ohio. In addition, the Sponsor owns four properties in Indiana consisting of 2,027 units.
Property Management. The Kingston Square Apartments Property is managed by A1 Management Realty LLC, an affiliate of the borrower.
Escrows and Reserves. At origination of the Kingston Square Apartments Whole Loan, the borrower deposited (i) approximately $154,550 into a real estate tax reserve account and (ii) $110,375 into an immediate repair reserve account.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 23 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 2 – Kingston Square Apartments |
Tax Escrows – The borrower is required to deposit into a real estate tax reserve, on a monthly basis, 1/12th of the taxes that the lender estimates will be payable over the next-ensuing 12-month period (initially estimated to be approximately $25,069).
Insurance Escrows – The borrower is required to deposit into an insurance reserve, on a monthly basis, 1/12th of the amount which will be sufficient to pay the insurance premiums due for the renewal of coverage afforded by such policies; provided, however, such insurance reserve has been conditionally waived so long as (i) no event of default is continuing and (ii) the borrower maintains a blanket policy meeting the requirements of the Kingston Square Apartments Whole Loan documents. The borrower is currently maintaining a blanket policy.
Replacement Reserve – The borrower is required to deposit into a replacement reserve, on a monthly basis, $200 per unit per annum (approximately $8,717).
Lockbox / Cash Management. The Kingston Square Apartments Whole Loan is structured with a springing lockbox and springing cash management. Upon the occurrence and continuance of a Trigger Period (as defined below), the borrower is required to cause all revenues relating to the Kingston Square Apartments Property to be deposited into a lender-controlled lockbox account within two business days of receipt. On each business day during the continuance of a Trigger Period, all amounts in the lockbox account are required to be remitted to a lender-controlled cash management account. On each business day that no Trigger Period is continuing, all funds in the lockbox account are required to be swept into a borrower-controlled operating account.
A “Trigger Period” means a period commencing upon the earliest to occur of (i) an event of default; and (ii) the Kingston Square Apartments Whole Loan debt service coverage ratio falls below 1.30x and will be cured upon (a) with respect to clause (i) above, the lender accepts a cure of the event of default; or (b) with respect to clause (ii) above, the Kingston Square Apartments Whole Loan debt service coverage ratio is equal to or greater than 1.30x for two consecutive calendar quarters.
Subordinate Debt. None.
Mezzanine Debt. None.
Partial Release. Not permitted.
Ground Lease. None.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 24 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 3 – Yorkshire & Lexington Towers |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 25 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 3 – Yorkshire & Lexington Towers |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 26 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 3 – Yorkshire & Lexington Towers |
| Mortgage Loan Information | | Property Information |
| Mortgage Loan Seller: | BMO | | Single Asset / Portfolio: | Portfolio |
| Original Principal Balance(1): | $37,000,000 | | Title: | Fee |
| Cut-off Date Principal Balance(1): | $37,000,000 | | Property Type – Subtype: | Multifamily – High Rise |
| % of IPB: | 5.1% | | Net Rentable Area (Units): | 808 |
| Loan Purpose: | Refinance | | Location: | New York, NY |
| Borrowers(2): | Various | | Year Built / Renovated: | Various / Various |
| Borrower Sponsors: | Meyer Chetrit and The Gluck | | Occupancy: | 96.4% |
| | Family Trust U/A/D July 16, | | Occupancy Date: | 3/1/2022 |
| | 2009 | | 4th Most Recent NOI (As of): | $27,343,815 (12/31/2019) |
| Interest Rate: | 3.04000% | | 3rd Most Recent NOI (As of): | $25,617,949 (12/31/2020) |
| Note Date: | 5/12/2022 | | 2nd Most Recent NOI (As of): | $24,254,281 (12/31/2021) |
| Maturity Date: | 6/6/2027 | | Most Recent NOI (As of)(5): | $25,322,439 (TTM 2/28/2022) |
| Interest-only Period: | 60 months | | UW Economic Occupancy: | 97.2% |
| Original Term: | 60 months | | UW Revenues: | $51,394,888 |
| Original Amortization Term: | None | | UW Expenses: | $16,019,126 |
| Amortization Type: | Interest Only | | UW NOI(5): | $35,375,762 |
| Call Protection(3): | L(28),D(27),O(5) | | UW NCF(5): | $35,375,762 |
| Lockbox / Cash Management: | Soft (Residential); Hard (Commercial) / In Place | | Appraised Value / Per Unit: | $954,000,000 / $1,180,693 |
| Additional Debt(1): | Yes | | Appraisal Date: | 1/20/2022 |
| Additional Debt Balance(1): | $281,000,000 / $221,500,000 / $174,500,000 | | | |
| Additional Debt Type(1): | Pari Passu / Subordinate / Mezzanine | | | |
| | | | | |
| Escrows and Reserves(4) | | Financial Information(1) |
| | Initial | Monthly | Initial Cap | | | Senior Loan | Whole Loan | Total Debt |
| Taxes: | $5,390,917 | $898,486 | N/A | | Cut-off Date Loan / Unit: | $393,564 | $667,698 | $883,663 |
| Insurance: | $367,868 | Springing | N/A | | Maturity Date Loan / Unit: | $393,564 | $667,698 | $883,663 |
| Replacement Reserves: | $1,100,000 | $0 | N/A | | Cut-off Date LTV: | 33.3% | 56.6% | 74.8% |
| TI / LC Reserve: | $1,000,000 | $0 | N/A | | Maturity Date LTV: | 33.3% | 56.6% | 74.8% |
| Other Reserve: | $12,400,000 | Springing | N/A | | UW NCF DSCR(5): | 3.61x | 2.13x | 1.20x |
| | | | | | UW NOI Debt Yield(5): | 11.1% | 6.6% | 5.0% |
| | | | | | | | | |
| Sources and Uses |
| Sources | Proceeds | % of Tot | al | | Uses | Proceeds | % of Tot | al |
| Senior Loan | $318,000,000 | 44.5 | % | | Loan Payoff | $545,268,671 | 76.4 | % |
| Subordinate Notes | 221,500,000 | 31.0 | | | Closing Costs | 93,214,219 | 13.1 | |
| Mezzanine Loans | 174,500,000 | 24.4 | | | Principal Equity Distribution | 55,258,325 | 7.7 | |
| | | | | Upfront Reserves | 20,258,785 | 2.8 | |
| Total Sources | $714,000,000 | 100.0 | % | | Total Uses | $714,000,000 | 100.0 | % |
| (1) | The Yorkshire & Lexington Towers Senior Loan (as defined below), with an original aggregate principal balance of $318,000,000, is part of the Yorkshire & Lexington Towers Whole Loan (as defined below). The Financial Information in the chart above reflects the Yorkshire & Lexington Towers Senior Loan, the Yorkshire & Lexington Towers Whole Loan and the Yorkshire & Lexington Towers Total Debt (as defined below). For additional information, see “The Loan” below. |
| (2) | The borrowers under the Yorkshire & Lexington Towers Whole Loan are CF E 88 LLC, SM E 88 LLC, CF E 86 LLC, SM E 86 LLC and LSG E 86 LLC. |
| (3) | Defeasance of the Yorkshire & Lexington Towers Whole Loan is permitted at any time after the earlier to occur of (a) the end of the two-year period commencing on the closing date of the securitization of the last promissory note representing a portion of the Yorkshire & Lexington Towers Whole Loan to be securitized and (b) July 6, 2025. The assumed defeasance lockout period of 28 payments is based on the closing date of this transaction in October 2022. The actual lockout period may be longer. |
| (4) | For a full description of Escrows and Reserves, please refer to “Escrows and Reserves” below. |
| (5) | UW NOI is greater than Most Recent NOI due in part to (i) the borrower sponsors recently renovating 57 units, which has increased rents at the Yorkshire & Lexington Towers Properties (as defined below) and (ii) underwritten straight-lined rent for CVS Pharmacy. Additionally, the UW NOI and UW NCF include disbursements from a Supplemental Income Reserve (as defined below) of $5,226,004. The Yorkshire & Lexington Towers Senior Loan UW NCF DSCR, Yorkshire & Lexington Towers Whole Loan UW NCF DSCR, and Yorkshire & Lexington Towers Total Debt UW NCF DSCR excluding credit for the upfront Supplemental Income Reserve are 3.08x, 1.81x and 1.02x, respectively. The Yorkshire & Lexington Towers Senior Loan UW NOI Debt Yield, Yorkshire & Lexington Towers Whole Loan UW NOI Debt Yield, and Yorkshire & Lexington Towers Total Debt UW NOI Debt Yield excluding credit for the upfront Supplemental Income Reserve are 9.5%, 5.6% and 4.2%, respectively. Please refer to “Escrows and Reserves” below. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 27 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 3 – Yorkshire & Lexington Towers |
The Loan. The third largest mortgage loan (the “Yorkshire & Lexington Towers Mortgage Loan”) is part of a whole loan (the “Yorkshire & Lexington Towers Whole Loan”) that is evidenced by eighteen pari passu senior promissory notes in the aggregate original principal amount of $318,000,000 (collectively, the “Yorkshire & Lexington Towers Senior Loan”) and two pari passu subordinate promissory notes in the aggregate original principal amount of $221,500,000 (collectively, the “Yorkshire & Lexington Towers Subordinate Companion Loan”). The Yorkshire & Lexington Towers Whole Loan was co-originated on May 12, 2022 by Bank of Montreal (“BMO”), Starwood Mortgage Capital LLC (“SMC”) and Citi Real Estate Funding Inc. (“CREFI”). The Yorkshire & Lexington Towers Whole Loan is secured by a first priority mortgage on the borrowers’ fee simple interest in two, high-rise multifamily properties totaling 808 units located in the Upper East Side neighborhood of New York, New York (the “Yorkshire & Lexington Towers Properties”). The Yorkshire & Lexington Towers Mortgage Loan is evidenced by the non-controlling promissory Notes A-1 and A-16, with an aggregate principal balance as of the Cut-off Date of $37,000,000. The remaining notes were contributed, or are expected to be contributed, to other securitization trusts, as set forth in the table below. The Yorkshire & Lexington Towers Whole Loan will be serviced pursuant to the pooling and servicing agreement for the CGCMT 2022-GC48 securitization. The “Yorkshire & Lexington Towers Total Debt” consists of the Yorkshire & Lexington Towers Whole Loan and four mezzanine loans with an aggregate Cut-off Date balance of $174,500,000. For additional information, see “Subordinate Debt and Mezzanine Debt” below. The relationship between the holders of the Yorkshire & Lexington Towers Whole Loan is governed by a co-lender agreement as described under “Description of the Mortgage Pool—The Whole Loans—The Yorkshire & Lexington Towers Pari Passu-AB Whole Loan” in the Preliminary Prospectus.
| Whole Loan Summary |
| Note | Original Balance | Cut-off Date Balance | | Note Holder | Controlling
Piece |
| A-1 | $25,000,000 | $25,000,000 | | BMO 2022-C3 | No |
| A-2 | $25,000,000 | $25,000,000 | | BBCMS 2022-C16 | No |
| A-3 | $25,000,000 | $25,000,000 | | Benchmark 2022-B36 | No |
| A-4(1) | $20,000,000 | $20,000,000 | | CGCMT 2022-GC48 | Yes |
| A-5 | $20,000,000 | $20,000,000 | | BBCMS 2022-C16 | No |
| A-6 | $20,000,000 | $20,000,000 | | BMO 2022-C2 | No |
| A-7 | $20,000,000 | $20,000,000 | | BMO 2022-C2 | No |
| A-8 | $20,000,000 | $20,000,000 | | BBCMS 2022-C16 | No |
| A-9 | $20,000,000 | $20,000,000 | | CGCMT 2022-GC48 | No |
| A-10 | $20,000,000 | $20,000,000 | | BBCMS 2022-C17 | No |
| A-11 | $20,000,000 | $20,000,000 | | CGCMT 2022-GC48 | No |
| A-12 | $20,000,000 | $20,000,000 | | Benchmark 2022-B36 | No |
| A-13 | $10,000,000 | $10,000,000 | | BMO 2022-C2 | No |
| A-14 | $10,000,000 | $10,000,000 | | BMO 2022-C2 | No |
| A-15 | $10,000,000 | $10,000,000 | | Benchmark 2022-B36 | No |
| A-16 | $12,000,000 | $12,000,000 | | BMO 2022-C3 | No |
| A-17 | $10,000,000 | $10,000,000 | | BMO 2022-C2 | No |
| A-18 | $11,000,000 | $11,000,000 | | Benchmark 2022-B36 | No |
| Total Senior Loan | $318,000,000 | $318,000,000 | | | |
| B-1(1) | $147,666,667 | $147,666,667 | | CGCMT 2022-GC48 (Loan Specific) | Yes |
| B-2(1) | $73,833,333 | $73,833,333 | | CGCMT 2022-GC48 (Loan Specific) | Yes |
| Whole Loan | $539,500,000 | $539,500,000 | | | |
| (1) | The initial controlling note is Note B-1, but if any interest in Note B-1 is held by a borrower restricted party (as defined in the related co-lender agreement), the controlling note will be Note B-2. Following a Yorkshire & Lexington Towers Control Appraisal Period (as defined in the related co-lender agreement), the controlling note will be Note A-4, which is also the lead note. See “Description of the Mortgage Pool—The Whole Loans—The Yorkshire & Lexington Towers Pari Passu-AB Whole Loan” in the Preliminary Prospectus. |
The Properties. The Yorkshire & Lexington Towers Properties consist of (i) a multifamily building comprised of 681 residential units totaling 615,641 square feet, a 33,000 square foot parking garage with 168 parking spaces and six commercial and retail units totaling 29,451 square feet (the “Yorkshire Towers Property”) and (ii) a multifamily building comprised of 127 residential units totaling 115,188 square feet, a 8,886 square foot parking garage with 36 parking spaces and six commercial and retail units totaling 9,998 square feet (the “Lexington Towers Property”). The Yorkshire & Lexington Towers Properties have 808 residential units totaling 730,829 square feet, 204 parking spaces totaling 41,886 square feet, and 12 commercial and retail units totaling 39,449 square feet. The commercial tenants (excluding City Parking) at the Yorkshire & Lexington Towers Properties have a remaining weighted average lease term of 8.7 years excluding parking leases. The Yorkshire Towers Property is located in the Upper East Side neighborhood, proximate to the Second Avenue subway station with access to the Q subway line. The Lexington Towers Property is located in the Upper East Side
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 28 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 3 – Yorkshire & Lexington Towers |
neighborhood, proximate to the Lexington Avenue/East 86th Street subway station with access to the 4, 5, and 6 subway lines.
The Yorkshire & Lexington Towers Properties were built in 1963 and 1964 and the residential portion of the Yorkshire & Lexington Towers Properties feature a range of studio, one bedroom, two bedroom, three bedroom, and four bedroom units. Of the 808 residential units, 305 of the units are rent-stabilized. The Yorkshire & Lexington Towers Properties’ residential units all feature hardwood flooring, full kitchen appliances, and many units include a private balcony. Bathrooms feature marble flooring in the renovated units and vinyl tile in the unrenovated units. Renovated units feature marble countertop kitchens, stainless steel appliances, including a refrigerator, dishwasher, microwave, and gas-fired stove and oven, and washer and dryer. Community spaces include 24-hour attended lobby lounge, health club and fitness center, children’s playroom, and outdoor seating area.
The largest tenant by underwritten base rent, CVS Pharmacy (“CVS”), occupies 15,813 square feet (19.4% of the commercial NRA, 58.1% of the underwritten commercial base rent) with a lease expiration of January 31, 2033. CVS is a consumer retail and health solutions company with over 9,900 locations in 49 states, the District of Columbia and Puerto Rico. CVS has approximately 300,000 employees in the United States. The remaining 65,522 square feet of commercial space is 98.3% occupied by ten tenants.
The following table presents certain information relating to the Yorkshire & Lexington Towers Properties:
| Portfolio Summary |
| Property Name | City | Year Built / Renovated | Units | % of Units | Allocated
Cut-off Date Whole Loan Amount (“ALA”) | % of ALA | Appraised Value | % of Appraised Value |
| Yorkshire Towers | New York | 1964 / 2014, 2022 | 681 | 84.3 | % | $464,286,688 | 86.1 | % | $821,000,000 | 86.1 | % |
| Lexington Towers | New York | 1963 / 2014 | 127 | 15.7 | | 75,213,312 | 13.9 | | 133,000,000 | 13.9 | |
| | | | 808 | 100.0 | % | $539,500,000 | 100.0 | % | $954,000,000 | 100.0 | % |
Borrower Sponsors’ Renovation Plan. The information set forth below regarding the borrower sponsors’ renovation plans reflects forward-looking statements and certain projections provided by the borrower sponsors, assuming, among other things, that the borrowers will complete certain projected renovations by December 1, 2024 and that all of the newly renovated and currently unoccupied units will be leased at current market rate rent and all of the currently occupied units will continue to be leased at the current contractual rent. We cannot assure you that such assumptions and projections provided by the borrower sponsors will materialize in the future as expected or at all.
The borrower sponsors have identified 311 units that will be renovated, which consist of 283 units that are projected to receive a light renovation and 28 units that are projected to receive a major renovation. The 28 major renovation units will be combined into 13 units post-renovation. Of the 28 units projected to receive major renovations, 17 units are rent stabilized, all of which are currently vacant. Major renovations will feature the combination of two or three units into one larger unit or a significant floor plan alteration and are expected to take approximately four to six months to complete. Light renovation units will feature aesthetic and systems upgrades, such as new appliances, countertops, removal of carpeting and lighting upgrades. The borrowers deposited $6,500,000 into a unit upgrade reserve with the lender at origination of the Yorkshire & Lexington Towers Whole Loan, to be disbursed to pay or reimburse the borrowers for unit renovation costs pursuant to the Yorkshire & Lexington Towers Whole Loan documents. See “Escrows and Reserves” below.
The major renovation units are projected to receive an average renovation of approximately $37,143 per unit and are anticipated to increase rent from $53.20 per square foot in-place to $82.67 per square foot. The borrower sponsors have executed 41 major renovations to date, which have been combined into a total of 23 units. These major renovations have achieved average annual rent increases from $32.93 per square foot to $75.37 per square foot.
The light renovation units are projected to receive an average renovation of $19,382 per unit and are anticipated to increase rent from $62.01 per square foot in-place to $82.79 per square foot. The borrower sponsors have executed 16 light renovations to date. These light renovations have achieved average annual rent increases from $50.33 per square foot to $82.04 per square foot.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 29 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 3 – Yorkshire & Lexington Towers |
The following table presents detailed information with respect to the current market rate units at the Yorkshire Towers Property:
| As Is Market Rate Unit Summary |
| Unit Type | No. of Units(1) | % of Total | Average Unit Size (SF)(1) | Average Monthly Rental Rate(1) | Average Monthly Rental Rate per SF(1) | Average Monthly Market Rental Rate(2) | Average Monthly Market Rental Rate per SF(2) |
| Studio | 63 | 14.3 | % | 547 | $3,100 | $5.67 | $3,121 | $5.52 |
| 1 Bedroom | 244 | 55.2 | | 778 | $4,301 | $5.53 | $4,319 | $5.50 |
| 2 Bedroom | 81 | 18.3 | | 1,152 | $6,122 | $5.31 | $6,355 | $5.31 |
| 3 Bedroom | 53 | 12.0 | | 1,299 | $7,707 | $5.93 | $7,682 | $5.91 |
| 4 Bedroom | 1 | 0.2 | | 2,087 | $12,995 | $6.23 | $12,995 | $6.23 |
| Total/Wtd. Avg. | 442 | 100.0 | % | 879 | $4,891 | $5.56 | $4,941 | $5.54 |
| (1) | Based on the underwritten rent roll dated March 1, 2022. |
The following table presents detailed information with respect to the current market rate units at the Lexington Towers Property:
| As Is Market Rate Unit Summary |
| Unit Type | No. of Units(1) | % of Total | Average Unit Size (SF)(1) | Average Monthly Rental Rate(1) | Average Monthly Rental Rate per SF(1) | Average Monthly Market Rental Rate(2) | Average Monthly Market Rental Rate per SF(2) |
| Studio | 10 | 16.4 | % | 619 | $3,270 | $5.29 | $3,270 | $5.29 |
| 1 Bedroom | 33 | 54.1 | | 776 | $4,306 | $5.55 | $4,286 | $5.53 |
| 2 Bedroom | 10 | 16.4 | | 1,045 | $6,339 | $6.06 | $6,287 | $6.01 |
| 3 Bedroom | 6 | 9.8 | | 1,392 | $8,823 | $6.34 | $8,823 | $6.34 |
| 4 Bedroom | 2 | 3.3 | | 1,889 | $13,123 | $6.95 | $12,935 | $6.85 |
| Total/Wtd. Avg. | 61 | 100.0 | % | 892 | $5,203 | $5.83 | $5,192 | $5.81 |
| (1) | Based on the underwritten rent roll dated March 1, 2022. |
The following table presents detailed information with respect to the current rent stabilized units at the Yorkshire Towers Property:
| As Is Rent Stabilized Unit Summary |
| Unit Type | No. of Units(1) | % of Total | Average Unit Size (SF)(1) | Average Monthly Rental Rate(1) | Average Monthly Rental Rate per SF(1) | Average Monthly Market Rental Rate(2) | Average Monthly Market Rental Rate per SF(2) |
| Studio | 31 | 13.0 | % | 545 | $1,915 | $3.51 | $2,370 | $3.52 |
| 1 Bedroom | 116 | 48.5 | | 792 | $1,980 | $2.50 | $2,182 | $2.49 |
| 2 Bedroom | 81 | 33.9 | | 1,230 | $2,916 | $2.37 | $2,989 | $2.36 |
| 3 Bedroom | 8 | 3.3 | | 1,638 | $3,714 | $2.27 | $3,714 | $2.27 |
| 4 Bedroom | 3 | 1.3 | | 1,859 | $12,167 | $6.55 | $12,167 | $6.55 |
| Total/Wtd. Avg. | 239 | 100.0 | % | 950 | $2,475 | $2.60 | $2,710 | $2.59 |
| (1) | Based on the underwritten rent roll dated March 1, 2022. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 30 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 3 – Yorkshire & Lexington Towers |
The following table presents detailed information with respect to the current rent stabilized units at the Lexington Towers Property:
| As Is Rent Stabilized Unit Summary |
| Unit Type | No. of Units(1) | % of Total | Average Unit Size (SF)(1) | Average Monthly Rental Rate(1) | Average Monthly Rental Rate per SF(1) | Average Monthly Market Rental Rate(2) | Average Monthly Market Rental Rate per SF(2) |
| Studio | 19 | 28.8 | % | 660 | $1,923 | $2.91 | $2,056 | $2.97 |
| 1 Bedroom | 31 | 47.0 | | 830 | $2,033 | $2.45 | $2,014 | $2.43 |
| 2 Bedroom | 11 | 16.7 | | 1,254 | $3,591 | $2.86 | $3,589 | $2.86 |
| 3 Bedroom | 3 | 4.5 | | 1,536 | $9,564 | $6.23 | $3,128 | $2.32 |
| 4 Bedroom | 2 | 3.0 | | 2,055 | $19,750 | $9.61 | NAV | NAV |
| Total/Wtd. Avg. | 66 | 100.0 | % | 921 | $3,140 | $3.41 | $2,500 | $2.66 |
| (1) | Based on the underwritten rent roll dated March 1, 2022. |
The following table presents detailed information with respect to the projected post-renovation market rate units at the Yorkshire Towers Property:
| Projected Post-Renovation Market Rate Unit Summary |
| Unit Type | No. of Units(1) | % of Total | Average Unit Size (SF)(1) | Average Monthly Rental Rate(1) | Average Monthly Rental Rate per SF(1) | Average Monthly Market Rental Rate(2) | Average Monthly Market Rental Rate per SF(2) |
| Studio | 61 | 14.1 | % | 547 | $3,489 | $6.38 | $3,121 | $5.52 |
| 1 Bedroom | 240 | 55.6 | | 778 | $5,108 | $6.57 | $4,319 | $5.50 |
| 2 Bedroom | 77 | 17.8 | | 1,148 | $7,784 | $6.78 | $6,355 | $5.31 |
| 3 Bedroom | 53 | 12.3 | | 1,299 | $8,582 | $6.60 | $7,682 | $5.91 |
| 4 Bedroom | 1 | 0.2 | | 2,087 | $12,995 | $6.23 | $12,995 | $6.23 |
| Total/Wtd. Avg. | 432 | 100.0 | % | 878 | $5,801 | $6.61 | $4,941 | $5.54 |
| (1) | Based on the underwritten rent roll dated March 1, 2022. |
The following table presents detailed information with respect to the projected post-renovation market rate units at the Lexington Towers Property:
| Projected Post-Renovation Market Rate Unit Summary |
| Unit Type | No. of Units(1) | % of Total | Average Unit Size (SF)(1) | Average Monthly Rental Rate(1) | Average Monthly Rental Rate per SF(1) | Average Monthly Market Rental Rate(2) | Average Monthly Market Rental Rate per SF(2) |
| Studio | 10 | 16.7 | % | 619 | $4,309 | $6.97 | $3,270 | $5.29 |
| 1 Bedroom | 32 | 53.3 | | 775 | $5,347 | $6.90 | $4,286 | $5.53 |
| 2 Bedroom | 10 | 16.7 | | 1,045 | $7,072 | $6.77 | $6,287 | $6.01 |
| 3 Bedroom | 6 | 10.0 | | 1,392 | $9,101 | $6.54 | $8,823 | $6.34 |
| 4 Bedroom | 2 | 3.3 | | 1,889 | $12,935 | $6.85 | $12,935 | $6.85 |
| Total/Wtd. Avg. | 60 | 100.0 | % | 893 | $6,090 | $6.82 | $5,192 | $5.81 |
| (1) | Based on the underwritten rent roll dated March 1, 2022. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 31 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 3 – Yorkshire & Lexington Towers |
The following table presents detailed information with respect to the projected post-renovation rent stabilized units at the Yorkshire Towers Property:
| Projected Post-Renovation Rent Stabilized Unit Summary |
| Unit Type | No. of Units(1) | % of Total | Average Unit Size (SF)(1) | Average Monthly Rental Rate(1) | Average Monthly Rental Rate per SF(1) | Average Monthly Market Rental Rate(2) | Average Monthly Market Rental Rate per SF(2) |
| Studio | 27 | 11.5 | % | 544 | $1,925 | $3.54 | $2,370 | $3.52 |
| 1 Bedroom | 106 | 45.1 | | 793 | $1,976 | $2.49 | $2,182 | $2.49 |
| 2 Bedroom | 85 | 36.2 | | 1,246 | $3,371 | $2.71 | $2,989 | $2.36 |
| 3 Bedroom | 12 | 5.1 | | 1,729 | $6,858 | $3.97 | $3,714 | $2.27 |
| 4 Bedroom | 5 | 2.1 | | 2,167 | $14,531 | $6.71 | $12,167 | $6.55 |
| Total/Wtd. Avg. | 235 | 100.0 | % | 1005 | $2,991 | $2.97 | $2,710 | $2.59 |
| (1) | Based on the underwritten rent roll dated March 1, 2022. |
The following table presents detailed information with respect to the projected post-renovation rent stabilized units at the Lexington Towers Property:
| Projected Post-Renovation Rent Stabilized Unit Summary |
| Unit Type | No. of Units(1) | % of Total | Average Unit Size (SF)(1) | Average Monthly Rental Rate(1) | Average Monthly Rental Rate per SF(1) | Average Monthly Market Rental Rate(2) | Average Monthly Market Rental Rate per SF(2) |
| Studio | 18 | 27.3 | % | 655 | $1,898 | $2.90 | $2,056 | $2.97 |
| 1 Bedroom | 31 | 47.0 | | 830 | $2,014 | $2.42 | $2,014 | $2.43 |
| 2 Bedroom | 12 | 18.2 | | 1,281 | $4,225 | $3.30 | $3,589 | $2.86 |
| 3 Bedroom | 3 | 4.5 | | 1,536 | $8,828 | $5.75 | $3,128 | $2.32 |
| 4 Bedroom | 2 | 3.0 | | 2,055 | $14,728 | $7.17 | NAV | NAV |
| Total/Wtd. Avg. | 66 | 100.0 | % | 934 | $3,079 | $3.30 | $2,500 | $2.66 |
| (1) | Based on the underwritten rent roll dated March 1, 2022. |
COVID-19 Update. As of September 6, 2022, the Yorkshire & Lexington Towers Properties are open and operating. As of the date of this term sheet, the Yorkshire & Lexington Towers Whole Loan is not subject to any forbearance, modification or debt service relief request. The first payment date of the Yorkshire & Lexington Towers Whole Loan was July 6, 2022.
Environmental. According to the Phase I reports dated February 3, 2022 and January 19, 2022, there was no evidence of any recognized environmental conditions at the Yorkshire & Lexington Towers Properties. The Phase I environmental assessment, however, did acknowledge historical recognized environmental conditions at the Yorkshire Towers Property.
The following table presents certain information relating to the historical and current occupancy of the Yorkshire & Lexington Towers Properties:
| Historical and Current Multifamily Occupancy(1) |
| 2019 | 2020 | 2021 | Current(2) |
| 94.7% | 81.2% | 94.7% | 96.4% |
| (1) | Historical occupancies are as of December 31 of each respective year. |
| (2) | Current occupancy is as of March 1, 2022. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 32 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 3 – Yorkshire & Lexington Towers |
| Operating History and Underwritten Net Cash Flow |
| | 2019 | 2020 | 2021 | TTM(1) | Underwritten | Per Unit | %(2) |
| Residential Base Rent | $34,429,262 | $32,908,021 | $33,023,336 | $34,184,092 | $39,497,416 | $48,883 | 74.9 | % |
| Commercial Base Rent | 6,197,568 | 5,981,339 | 5,764,022 | 5,810,592 | 6,984,828 | 8,645 | 13.3 | |
| Gross Potential Rent | $40,626,830 | $38,889,360 | $38,787,358 | $39,994,684 | $46,482,244 | $57,528 | 88.2 | % |
| Total Reimbursements | 297,713 | 410,419 | 284,498 | 324,797 | 327,568 | 405 | 0.6 | |
| Supplemental Income Reserve(3) | 0 | 0 | 0 | 0 | 5,226,004 | 6,468 | 9.9 | |
| Total Other Income | 702,657 | 863,978 | 694,304 | 675,664 | 675,664 | 836 | 1.3 | |
| Net Rental Income | $41,627,200 | $40,163,756 | $39,766,160 | $40,995,144 | $52,711,480 | $65,237 | 100.0 | % |
| (Vacancy/Credit Loss) | (99,272) | (35,705) | 0 | 0 | (1,316,592) | (1,629) | (2.5) | |
| Effective Gross Income | $41,527,928 | $40,128,052 | $39,766,160 | $40,995,144 | $51,394,888 | $63,608 | 97.5 | % |
| Total Expenses | $14,184,113 | $14,510,102 | $15,511,878 | $15,672,705 | $16,019,126 | $19,826 | 31.2 | % |
| Net Operating Income(3) | $27,343,815 | $25,617,949 | $24,254,281 | $25,322,439 | $35,375,762 | $43,782 | 68.8 | % |
| Total TI/LC, Capex/RR(4) | 0 | 0 | 0 | 0 | 0 | 0 | 0.0 | |
| Net Cash Flow | $27,343,815 | $25,617,949 | $24,254,281 | $25,322,439 | $35,375,762 | $43,782 | 68.8 | % |
| (1) | TTM represents the trailing 12 months ending February 2022. |
| (2) | % column represents percent of Net Rental Income for all revenue lines and represents percent of Effective Gross Income for the remainder of the fields. |
| (3) | The Underwritten Net Operating Income is greater than the TTM Net Operating Income due in part to (i) the borrower sponsors recently renovating 57 units, which has increased rents at the Yorkshire & Lexington Towers Properties, (ii) underwritten straight-lined rent for CVS and (iii) disbursements from the Supplemental Income Reserve. Please refer to “Escrows and Reserves” below. |
| (4) | The borrower sponsors funded five years’ worth of TI/LC, Capex/RR at origination. |
The Market. The Yorkshire & Lexington Towers Properties are located in New York, New York, within the New York, NY-NJ-PA Metropolitan Statistical Area. According to the appraisal, the unemployment rate from 2011 through 2021 in New York City increased at an annual rate of 0.3% and is expected to decrease at an average annual rate of 4.7% between 2022 and 2026. The estimated 2021 median annual household income in New York City was $68,261. The leading industries are education and health, professional and business, government, and trade, transportation and utilities. The largest employer in New York City is Northwell Health, which employs 68,088 people. The Yorkshire Towers Property is located on the northeast corner of Second Avenue and East 86th Street. The Lexington Towers Property is located on the southeast corner of Lexington Avenue and East 88th Street. The Upper East Side is generally considered the area that extends from East 59th to East 110th Streets, east of Central Park and Fifth Avenue to the East River. The Upper East Side is known for its many art galleries such as the Metropolitan Museum of Art, and Hunter College of the City University of New York which occupies several modern high-rise buildings at 68th Street and Lexington Avenue. The largest institutions of higher learning on the East Side are along York Avenue and the FDR Drive, including Rockefeller University and the Cornell Medical Center. The Yorkshire & Lexington Towers Properties benefit from their proximity to Fifth Avenue, which forms the eastern border of Central Park, as well as Madison Avenue, which is dense with prime retail and commercial space.
The Yorkshire & Lexington Towers Properties are situated in the Upper East Side multifamily submarket. According to CoStar, as of February 2022, the Upper East Side multifamily submarket had an overall vacancy rate of 2.0%, with net absorption totaling 17 units. The vacancy rate decreased 2.2% over the past 12 months. Rental rates increased by 3.1% for the past 12 months and ended at $4,096 per unit per month. A total of 46 units are still under construction at the end of the quarter.
According to the appraisal, the 2021 population for New York City was approximately 8,305,600 and is forecasted to grow to approximately 8,317,700 in 2022, and approximately 8,335,900 in 2026.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 33 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 3 – Yorkshire & Lexington Towers |
The following table presents certain information relating to comparable retail leases for the Yorkshire & Lexington Towers Properties:
| Comparable Retail Leases(1) |
| Property / Location | Tenant SF | Year Built / Renovated | Tenant | Rent PSF | Commencement Date | Lease Term (Mos.) | Lease Type |
Yorkshire Towers New York, NY | 15,813(2) | 1964 / 2014, 2022 | CVS Pharmacy | $252.37(2) | May 2017(2) | 189(2) | Triple Net |
201 East 86th Street New York, NY | 6,565 | 1987 / NAV | Lululemon | $240.00 | Q4 2021 | 120 | Triple Net |
1523 Second Avenue New York, NY | 4,488 | NAV / NAV | NY Allergy and Asthma | $100.00 | Q4 2021 | 144 | Triple Net |
1503 Third Avenue New York, NY | 3,200 | NAV / NAV | Cohen’s Fashion Optical | $175.00 | Q3 2021 | 120 | Triple Net |
1592 Third Avenue New York, NY | 400 | NAV / NAV | Marathon Coffee | $90.00 | Q3 2021 | 120 | Triple Net |
207 East 84th Street New York, NY | 1,340 | NAV / NAV | Glosslab | $116.00 | Q2 2021 | 120 | Triple Net |
| (2) | Based on underwritten rent roll dated as of March 1, 2022. |
The following table presents certain information relating to comparable multifamily rental properties to the Yorkshire & Lexington Towers Properties:
| Comparable Rental Summary(1) |
| Property Address | Year Built | Occupancy | # of Units | Unit Mix | Average SF per Unit | Average Rent per SF | Average Rent per Unit |
Yorkshire & Lexington Towers(2) 160 East 88th Street; 305 East 86th Street New York, NY | 1963, 1964 | 96.4% | 808 | Studio 1 Bed 2 Bed 3 Bed 4 Bed | 570 786 1,187 1,356 1,944 | $55.65 $53.55 $46.68 $65.75 $88.93 | $2,642 $3,505 $4,617 $7,430 $14,405 |
| The Serrano | 1986 | 92.6% | 263 | 1 Bed | 650 | $83.10 | $4,501 |
| 1735 York Avenue | | | | 2 Bed | NAV | NAV | $7,201 |
| New York, NY | | | | 3 Bed | NAV | NAV | $8,878 |
| Ventura | 1999 | 98.4% | 246 | Studio | 508 | $88.20 | $3,734 |
| 240 East 86th Street | | | | 1 Bed | 751 | $74.38 | $4,652 |
| New York, NY | | | | 2 Bed | 967 | $79.15 | $6,380 |
| | | | | 3 Bed | 1,293 | $82.79 | $8,921 |
| The Lucerne | 1989 | 98.6% | 219 | 1 Bed | 659 | $84.07 | $4,617 |
| 350 East 79th Street | | | | 2 Bed | 906 | $94.49 | $7,134 |
| New York, NY | | | | 3 Bed | NAV | NAV | $11,878 |
| | | | | 4 Bed | NAV | NAV | $17,975 |
| The Colorado | 1987 | 99.6% | 173 | Studio | 547 | $86.69 | $3,953 |
| 201 East 86th Street | | | | 1 Bed | 667 | $82.70 | $4,595 |
| New York, NY | | | | 2 Bed | 937 | $85.51 | $6,675 |
| | | | | 3 Bed | 1,254 | $95.10 | $9,938 |
| | | | | 4 Bed | 1,940 | $95.71 | $15,473 |
| The Strathmore | 1996 | 99.2% | 179 | 1 Bed | 714 | $70.05 | $4,168 |
| 400 East 84th Street | | | | 2 Bed | 1,166 | $71.28 | $6,926 |
| New York, NY | | | | 3 Bed | 1,611 | $83.55 | $11,217 |
| | | | | 4 Bed | NAV | NAV | $17,520 |
| One Carnegie Hill | 2005 | 99.6% | 455 | Studio | 484 | $83.18 | $3,355 |
| 215 East 96th Street | | | | 1 Bed | 636 | $78.13 | $4,141 |
| New York, NY | | | | 2 Bed | 879 | $85.30 | $6,248 |
| | | | | 3 Bed | 1,239 | $80.56 | $8,318 |
| | | | | 4 Bed | 1,350 | $94.44 | $10,625 |
| CONVIVIUM | 2020 | 98.6% | 140 | Studio | 638 | $80.88 | $4,300 |
| 515 East 86th Street | | | | 1 Bed | 741 | $88.67 | $5,474 |
| New York, NY | | | | 2 Bed | 1,138 | $79.33 | $7,523 |
| | | | | 3 Bed | 1,369 | $85.50 | $9,750 |
| (1) | Source: Appraisal, unless otherwise indicated. Comparables include a mix of affordable and market rate units. |
| (2) | Based on underwritten rent roll dated as of March 1, 2022. Average Rent per SF and Average Rent per Unit reflect average monthly in-place rent for occupied units. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 34 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 3 – Yorkshire & Lexington Towers |
The Borrowers. The borrowers under the Yorkshire & Lexington Towers Whole Loan are CF E 88 LLC, SM E 88 LLC, CF E 86 LLC, SM E 86 LLC and LSG E 86 LLC, as tenants in common (the first two as tenants in common for the Lexington Towers Property, and the last three as tenants in common for the Yorkshire Towers Property), each a single-purpose Delaware limited liability company with two independent directors. Legal counsel to the borrowers delivered a non-consolidation opinion in connection with the origination the Yorkshire & Lexington Towers Whole Loan.
The Borrower Sponsors. The borrower sponsors and non-recourse carveout guarantors are Meyer Chetrit and The Gluck Family Trust U/A/D July 16, 2009. Meyer Chetrit is one of the controllers of The Chetrit Group. The Chetrit Group is an experienced, privately held New York City real estate development firm controlled by two brothers: Joseph and Meyer Chetrit. The Chetrit Group, which is headquartered in Manhattan, has ownership interests in over 14 million square feet of commercial and residential real estate across the United States, including New York, Chicago, Miami, and Los Angeles, as well as internationally. Laurence Gluck is the founder of Stellar Management, a real estate development and management firm founded in 1985. Based in New York City, Stellar Management owns and manages a portfolio of over 12,000 apartments in 100 buildings located across New York City and over two million square feet of office space. Prior to founding Stellar Management, Laurence Gluck served as a real estate attorney at Proskauer, Rose, Goetz & Mendelsohn and later as a partner at Dreyer & Traub. Laurence Gluck also formerly served as a member of the Board of Governors of the Real Estate Board of New York.
Property Management. The Yorkshire & Lexington Towers Properties are managed by Jumeaux Management LLC, an affiliate of the borrowers.
Escrows and Reserves. At origination of the Yorkshire & Lexington Towers Whole Loan, the borrowers deposited approximately (i) $5,390,917 into a real estate tax reserve account, (ii) $367,868 into an insurance premiums reserve account, (iii) $1,100,000 into a replacement reserve account, (iv) $1,000,000 into a tenant improvement and leasing commissions reserve account, (v) $6,500,000 into a unit upgrade reserve account and (vi) $5,900,000 into a supplemental income reserve account.
Tax Escrows – The borrowers are required to deposit into a real estate tax reserve, on a monthly basis, 1/12th of the taxes that the lender estimates will be payable over the next-ensuing 12-month period (initially estimated to be approximately $898,486).
Insurance Escrows – The borrowers are required to deposit into an insurance reserve, on a monthly basis, 1/12th of the amount which will be sufficient to pay the insurance premiums due for the renewal of coverage afforded by such policies; provided, however, such insurance reserve has been conditionally waived so long as (i) no event of default is continuing and (ii) the borrowers maintain a blanket policy meeting the requirements of the Yorkshire & Lexington Towers Whole Loan documents. The borrowers are currently maintaining a blanket policy.
Supplemental Income Reserve – The Yorkshire & Lexington Towers Properties are currently undergoing certain renovations, and the borrowers deposited $5,900,000 into a supplemental income reserve account (the “Supplemental Income Reserve”) at origination of the Yorkshire & Lexington Towers Whole Loan. Unless and until the Yorkshire & Lexington Towers Properties (excluding the amount on deposit in the Supplemental Income Reserve) achieve a 5.0% “transient” Yorkshire & Lexington Towers Total Debt debt yield (calculated on the basis of annualized net cash flow for a three month period ending with the most recently completed month), the lender may require the borrowers to make additional Supplemental Income Reserve deposits if and to the extent the lender determines, in its reasonable discretion on a quarterly basis after May 6, 2023 during the Yorkshire & Lexington Towers Whole Loan term, that additional supplemental income reserve deposits are required in order to achieve (when the additional deposit and all other deposits in the Supplemental Income Reserve account are added to net cash flow for the Yorkshire & Lexington Towers Properties) a 5.0% transient Yorkshire & Lexington Towers Total Debt debt yield for the following 12, 9, 6 or 3 months (such applicable 12-, 9-, 6- or 3- month period depending on the quarter with respect to which such determination by the lender is made). The guarantors provided a related carry guaranty of certain carry costs, including real estate taxes, insurance premiums, debt service and operating expenses, for any period until the Yorkshire & Lexington Towers Properties achieve a 5.0% transient Yorkshire & Lexington Towers Total Debt debt yield (excluding the amount on deposit in the Supplemental Income Reserve). The obligations of the guarantors under such carry guaranty are limited to the additional Supplemental Income Reserve deposit amount as and when due.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 35 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 3 – Yorkshire & Lexington Towers |
So long as no event of default under the Yorkshire & Lexington Towers Whole Loan is continuing, on each payment date, the lender is required to transfer the Monthly Supplemental Income Reserve Disbursement Amount (as defined below) from the Supplemental Income Reserve to the cash management account. Such funds deposited into the cash management account will be required to be applied with all other funds then on deposit in the cash management account in the order of priority set forth in the Yorkshire & Lexington Towers Whole Loan documents, as described under “Lockbox / Cash Management” below. So long as no event of default under the Yorkshire & Lexington Towers Whole Loan is continuing, upon such time as the lender has reasonably determined that the Yorkshire & Lexington Towers Properties (excluding the amount on deposit in the Supplemental Income Reserve) have achieved a 5.0% “transient” Yorkshire & Lexington Towers Total Debt debt yield (calculated on the basis of annualized net cash flow for a three month period ending with the most recently completed month), then upon the borrowers’ written request, all of the funds in the Supplemental Income Reserve will be required to be disbursed to the borrowers; provided, however, if a Cash Trap Period (as defined below) is then continuing, then such funds will not be disbursed to the borrowers, and such funds will instead be deposited into the excess cash reserve account, to be applied in accordance with the terms of the Yorkshire & Lexington Towers Whole Loan documents.
“Monthly Supplemental Income Reserve Disbursement Amount” means 1/12th of (x) the initial Supplemental Income Reserve deposit with respect to the first 12 payment dates occurring during the term of the Yorkshire & Lexington Towers Whole Loan, and (y) each Supplemental Income Reserve additional deposit amount with respect to the 12 payment dates following the date that the borrowers are required to deposit such Supplemental Income Reserve additional deposit amount pursuant to the terms of the Yorkshire & Lexington Towers Whole Loan documents; provided that, if at any time the lender reassesses the Supplemental Income Reserve additional deposit amount in accordance with the terms of the Yorkshire & Lexington Towers Whole Loan documents, the Monthly Supplemental Income Reserve Disbursement Amount will be adjusted so that all of funds in the Supplemental Income Reserve will be disbursed in equal monthly installments ending on such Supplemental Income Reserve reassessment date (i.e., so that there will be no funds in the Supplemental Income Reserve on deposit on such Supplemental Income Reserve reassessment date).
Lockbox / Cash Management. The Yorkshire & Lexington Towers Whole Loan is structured with a hard lockbox for commercial tenants and a soft lockbox for residential tenants, and in place cash management. The borrowers are required to deposit all rents collected from residential tenants into the lockbox account within three days of receipt. The borrowers are required to deliver a tenant direction letter to commercial tenants to deposit all rents directly to the lockbox account. The borrowers are required to cause all amounts deposited into the lockbox account to be transferred on each business day to a cash management account controlled by the lender. Absent an event of default under the Yorkshire & Lexington Towers Whole Loan documents, funds on deposit in the cash management account are applied on each monthly payment date in amounts and in the order of priority set forth in the Yorkshire & Lexington Towers Whole Loan Documents, including any required tax and insurance reserve deposits, deposit account bank fees, monthly debt service on the Yorkshire & Lexington Towers Whole Loan, other amounts payable to the lender under the Yorkshire & Lexington Towers Whole Loan, operating expenses reflected in the annual budget or otherwise approved by lender, and debt service under the mezzanine loans, with the remaining funds in the cash management account to be disbursed to the borrowers unless a Cash Trap Period is then continuing, in which event the remaining funds will be deposited into an excess cash reserve account under the lender’s control, and released to the borrower when the Cash Trap Period ends. Upon an event of default under the Yorkshire & Lexington Towers Whole Loan documents, the lender will apply funds in such priority as it may determine.
A “Cash Trap Period” means a period commencing upon the earliest to occur of (i) an event of default; (ii) any bankruptcy action of the borrowers, principal, guarantor or manager has occurred; (iii) the failure by the borrowers, after stabilization (i.e. until a Yorkshire & Lexington Towers Total Debt debt yield of at least 5.0% has been achieved (without taking into account any disbursement of Supplemental Income Reserve funds) for one calendar quarter, provided no event of default then exists), to maintain a Yorkshire & Lexington Towers Total Debt debt yield of at least 4.25%; or (iv) a Yorkshire & Lexington Towers Mezzanine Loan (as defined below) event of default and will be cured upon (a) with respect to clause (i) above, the lender accepts a cure of the event of default; (b) in the case of a bankruptcy action by or against manager only, the borrowers replace the manager with a qualified replacement as defined in the Yorkshire & Lexington Towers Whole Loan documents; (c) with respect to clause (iii) above, the Yorkshire & Lexington Towers Total Debt debt yield is equal to or greater than 4.75% for one calendar quarter; or (d) with respect to clause (iv) above, the applicable Yorkshire & Lexington Towers Mezzanine Loan lender accepts a cure of such Yorkshire & Lexington Towers Mezzanine Loan event of default.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 36 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 3 – Yorkshire & Lexington Towers |
Subordinate and Mezzanine Debt. The Yorkshire & Lexington Towers Properties also secure the Yorkshire & Lexington Towers Subordinate Companion Loan, which has an aggregate Cut-off Date principal balance of $221,500,000. The Yorkshire & Lexington Towers Subordinate Companion Loan accrues interest at 3.04000% per annum. The Yorkshire & Lexington Towers Senior Loan is senior in right of payment to the Yorkshire & Lexington Towers Subordinate Companion Loan.
Concurrently with the funding of the Yorkshire & Lexington Towers Whole Loan, BMO and Citigroup Global Markets Realty Corp. (“CGMRC”) co-originated a mezzanine A loan in the amount of $80,000,000 to be secured by the mezzanine A borrower’s interests in the borrower, as collateral for the mezzanine A loan (the “Mezzanine A Loan”). The Mezzanine A Loan is coterminous with the Yorkshire & Lexington Towers Whole Loan. The Mezzanine A Loan accrues interest at a rate of 5.80000% per annum and requires interest-only payments until its maturity date.
Concurrently with the funding of the Yorkshire & Lexington Towers Whole Loan, BMO and CGMRC co-originated a mezzanine B loan in the amount of $23,100,000 to be secured by the mezzanine B borrower’s interests in the mezzanine A borrower, as collateral for the mezzanine B loan (the “Mezzanine B Loan”). The Mezzanine B Loan is coterminous with the Yorkshire & Lexington Towers Whole Loan. The Mezzanine B Loan accrues interest at a rate of 7.14000% per annum and requires interest-only payments until its maturity date.
Concurrently with the funding of the Yorkshire & Lexington Towers Whole Loan, BMO and CGMRC co-originated a mezzanine C loan in the amount of $25,000,000 to be secured by the mezzanine C borrower’s interests in the mezzanine B borrower, as collateral for the mezzanine C loan (the “Mezzanine C Loan”). The Mezzanine C Loan is coterminous with the Yorkshire & Lexington Towers Whole Loan. The Mezzanine C Loan accrues interest at a rate of 8.00000% per annum and requires interest-only payments until its maturity date.
Concurrently with the funding of the Yorkshire & Lexington Towers Whole Loan, BMO and CGMRC co-originated a mezzanine D loan in the amount of $46,400,000 to be secured by the mezzanine D borrower’s interests in the mezzanine C borrower, as collateral for the mezzanine D loan (the “Mezzanine D Loan”, collectively with the Mezzanine A Loan, the Mezzanine B Loan and the Mezzanine C Loan, the “Yorkshire & Lexington Towers Mezzanine Loans”). The Mezzanine D Loan is coterminous with the Yorkshire & Lexington Towers Whole Loan. The Mezzanine D Loan accrues interest at a rate of 9.46185345% per annum and requires interest-only payments until its maturity date.
| Total Loan Metrics |
| | % of Total Loan | Cut-off Date LTV | UW NOI Debt Yield(1) | UW NCF DSCR(1) |
| A Notes | 44.5% | 33.3% | 11.1% | 3.61x |
| B Notes | 31.0% | 56.6% | 6.6% | 2.13x |
| Mezzanine Loans | 24.4% | 74.8% | 5.0% | 1.20x |
| (1) | The UW NOI and UW NCF includes disbursements from a Supplemental Income Reserve of $5,226,004. Please refer to “Escrows and Reserves” above. |
Partial Release. Not permitted.
Ground Lease. None.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 37 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 4 – Phoenix Industrial Portfolio IX |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 38 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 4 – Phoenix Industrial Portfolio IX |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 39 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 4 – Phoenix Industrial Portfolio IX |
Mortgage Loan Information | | Property Information |
| Mortgage Loan Seller: | UBS AG | | Single Asset / Portfolio: | Portfolio |
| Original Principal Balance(1): | $37,000,000 | | Title: | Fee |
| Cut-off Date Principal Balance(1): | $37,000,000 | | Property Type – Subtype: | Industrial – Various |
| % of IPB: | 5.1% | | Net Rentable Area (SF): | 3,760,303 |
| Loan Purpose: | Refinance | | Location: | Various |
| Borrowers(2): | Various | | Year Built / Renovated: | Various / Various |
| Borrower Sponsor: | Phoenix Investors | | Occupancy: | 71.9% |
| Interest Rate: | 6.11700% | | Occupancy Date: | 9/6/2022 |
| Note Date: | 9/8/2022 | | 4th Most Recent NOI (As of)(4): | NAV |
| Maturity Date: | 10/6/2032 | | 3rd Most Recent NOI (As of)(4): | NAV |
| Interest-only Period: | 120 months | | 2nd Most Recent NOI (As of)(4): | NAV |
| Original Term: | 120 months | | Most Recent NOI (As of)(5)(6): | $1,619,979 (Various) |
| Original Amortization Term: | None | | UW Economic Occupancy: | 71.9% |
| Amortization Type: | Interest Only | | UW Revenues: | $10,984,549 |
| Call Protection(3): | L(24),D(90),O(6) | | UW Expenses: | $3,597,682 |
| Lockbox / Cash Management: | Hard / Springing | | UW NOI(6): | $7,386,867 |
| Additional Debt(1): | Yes | | UW NCF: | $6,865,446 |
| Additional Debt Balance(1): | $38,000,000 | | Appraised Value / Per SF(7): | $182,200,000 / $48 |
| Additional Debt Type(1): | Pari Passu | | Appraisal Date: | Various |
| | | | | |
| Escrows and Reserves(8) | | Financial Information(1) |
| | Initial | Monthly | Initial Cap | | Cut-off Date Loan / SF: | $20 |
| Taxes: | $257,137 | $56,408 | N/A | | Maturity Date Loan / SF: | $20 |
| Insurance: | $0 | Springing | N/A | | Cut-off Date LTV(7): | 41.2% |
| Replacement Reserves: | $0 | $31,336 | $1,130,000 | | Maturity Date LTV(7): | 41.2% |
| TI / LC Reserve: | $3,000,000 | Springing | $1,500,000 | | UW NCF DSCR: | 1.48x |
| Earn-out Reserve: | $5,000,000 | $0 | N/A | | UW NOI Debt Yield(9): | 10.6% |
| Other: | $1,671,741 | $0 | N/A | | | |
| | | | | | | |
| Sources and Uses |
| Sources | Proceeds | % of Total | | Uses | Proceeds | % of Total |
| Whole Loan | $75,000,000 | 100.0 | % | | Loan Payoff | $53,813,642 | 71.8 | % |
| | | | | Upfront Reserves | 9,928,878 | 13.2 | |
| | | | | Return of Equity | 5,815,441 | 7.8 | |
| | | | | Partnership Buyout | 4,349,545 | 5.8 | |
| | | | | Closing Costs | 1,092,493 | 1.5 | |
| Total Sources | $75,000,000 | 100.0 | % | | Total Uses | $75,000,000 | 100.0 | % |
| (1) | The Phoenix Industrial Portfolio IX Mortgage Loan (as defined below) is part of a whole loan evidenced by six pari passu notes with an aggregate outstanding principal balance as of the Cut-off Date of $75.0 million (the “Phoenix Industrial Portfolio IX Whole Loan”). The financial information in the chart above is based on the $75.0 million Phoenix Industrial Portfolio IX Whole Loan. |
| (2) | See “The Borrowers” below for more information. |
| (3) | Defeasance of the Phoenix Industrial Portfolio IX Whole Loan is permitted at any time after the date that is two years after the closing date of the securitization that includes the last note to be securitized. The assumed defeasance lockout period of 24 payments is based on the anticipated closing date of the BMO 2022-C3 securitization trust in October 2022. The actual lockout period may be longer. |
| (4) | 4th Most Recent NOI, 3rd Most Recent NOI and 2nd Most Recent NOI are unavailable as the borrower sponsor acquired the Phoenix Industrial Portfolio IX Properties (as defined below) between 2019 and 2021 with full year 2020 and 2021 operating statements not available. |
| (5) | The Most Recent NOI represents the trailing 10 months ending April 2022 for the Iowa City, IA property and the trailing 12 months ending April 2022 for the remaining properties. The Most Recent NOI only includes partial year information for the Iowa City, IA property as it was 100.0% vacant. |
| (6) | The increase from the Most Recent NOI to UW NOI is primarily attributable to (i) leasing totaling an additional approximately $4.1 million in base rent, (ii) $335,509 in rent steps through October 2023, (iii) $21,103 in straight-lined rent for investment-grade tenant, Amazon, and (iv) an additional approximately $1.1 million in recoveries. Additionally, the utilities expense was underwritten $671,666 less than trailing 12 months utilities expenses due to (i) the elimination of excess use charges and installation of high efficiency LED lighting at the Versailles, KY property and (ii) Amazon, the largest tenant at the Rockford, IL property, being separately metered and paying gas bills directly to the utility company. |
| (7) | The Cut-off Date LTV Ratio presented above is calculated based on the full outstanding principal balance of the Phoenix Industrial Portfolio IX Whole Loan (without netting the Earn-out Reserve (as defined below)) and the aggregate “as is” appraised value. The Cut-off Date LTV Ratio based on the Phoenix Industrial Portfolio IX Whole Loan net of the $5,000,000 Earn-out Reserve and the aggregate “as is” appraised value is 38.4%. The Maturity Date LTV presented above is calculated based on the full outstanding principal balance of the Phoenix Industrial Portfolio IX Whole Loan (without netting the Earn-out Reserve) and the “as is” appraised value of $182,200,000. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 40 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 4 – Phoenix Industrial Portfolio IX |
The Maturity Date LTV based on the full outstanding principal balance of the Phoenix Industrial Portfolio IX Whole Loan (without netting the Earn-out Reserve) and the aggregate “as stabilized” appraised value of $191,100,000 is 39.2%.
| (8) | For a full description of Escrows and Reserves, including the Earn-out Reserve, see “Escrows and Reserves” below. |
| (9) | The UW NOI Debt Yield presented above is calculated based on the Phoenix Industrial Portfolio IX Whole Loan net of the $5,000,000 Earn-out Reserve. The UW NOI Debt Yield based on the full outstanding principal balance of the Phoenix Industrial Portfolio IV Whole Loan (without netting the Earn-out Reserve) is 9.8%. |
The Loan. The fourth largest mortgage loan (the “Phoenix Industrial Portfolio IX Mortgage Loan”) is part of a fixed rate whole loan secured by the borrowers’ fee interest in a 3,760,303 square foot portfolio of five industrial properties located in Tennessee, Alabama, Illinois, Iowa and Kentucky (each, a “Phoenix Industrial Portfolio IX Property”, and collectively, the “Phoenix Industrial Portfolio IX Properties”). The Phoenix Industrial Portfolio IX Whole Loan consists of six pari passu notes and accrues interest at a rate of 6.11700% per annum. The Phoenix Industrial Portfolio IX Whole Loan has a 10-year term and is interest only for the entire term. The controlling Note A-1, with an original principal balance of $37,000,000, will be included in the BMO 2022-C3 securitization trust. The remaining notes are expected to be contributed to other securitization trusts. The relationship between the holders of the Phoenix Industrial Portfolio IX Whole Loan will be governed by a co-lender agreement as described under “Description of the Mortgage Pool—The Whole Loans—The Serviced Pari Passu Whole Loans” in the Preliminary Prospectus.
| Whole Loan Summary |
| Note | Original Balance | Cut-off Date Balance | | Note Holder | Controlling Piece |
| A-1 | $37,000,000 | $37,000,000 | | BMO 2022-C3 | Yes |
| A-2 | $20,000,000 | $20,000,000 | | UBS AG(1) | No |
| A-3 | $10,000,000 | $10,000,000 | | UBS AG(1) | No |
| A-4 | $4,000,000 | $4,000,000 | | UBS AG(1) | No |
| A-5 | $2,000,000 | $2,000,000 | | UBS AG(1) | No |
| A-6 | $2,000,000 | $2,000,000 | | UBS AG(1) | No |
| Whole Loan | $75,000,000 | $75,000,000 | | | |
| (1) | The subject notes are expected to be contributed to one or more future securitization trust(s). |
The Properties. The Phoenix Industrial Portfolio IX Whole Loan is secured by five industrial properties totaling 3,760,303 square feet located in Tennessee (one property, 36.6% of NRA), Alabama (one property, 19.6% of NRA), Illinois (one property, 13.8% of NRA), Iowa (one property, 9.1% of NRA) and Kentucky (one property, 21.0% of NRA). The Phoenix Industrial Portfolio IX Properties were 71.9% occupied by 12 tenants as of September 6, 2022. The borrower sponsor acquired the Phoenix Industrial Portfolio IX Properties between 2019 and 2021 for an aggregate purchase price of approximately $26.2 million. Since acquisition, the borrower sponsor has invested approximately $23.1 million in capital improvements at the Phoenix Industrial Portfolio IX Properties.
Memphis, TN (36.6% of NRA; 37.7% of Whole Loan Allocated Loan Amount (“ALA”)): The Memphis, TN property is a 1,374,972 square foot industrial warehouse/distribution building located in Memphis, Tennessee. The improvements were constructed in 1973, renovated in 2020 and include approximately 4.0% of office space. The Memphis, TN property is situated on an approximately 69.2-acre site with 332 surface parking spaces (0.2 per 1,000 square feet). The Memphis, TN property has a total of 218 dock-high doors and clear heights of 23.5 feet to 31.1 feet. As of September 6, 2022, the Memphis, TN property was 65.9% occupied by three tenants. Since acquisition of the Memphis, TN property in December 2020, the borrower sponsor has invested approximately $7.9 million in capital improvements.
Wetumpka, AL (19.6% of NRA; 31.3% of ALA): The Wetumpka, AL property is a 735,231 square foot industrial manufacturing building located in Wetumpka, Alabama. The improvements were constructed in 1997 and include approximately 2.0% of office space. The Wetumpka, AL property is situated on an approximately 101.6-acre site with 482 surface parking spaces (0.7 per 1,000 square feet). The Wetumpka, AL property has a total of 29 dock-high doors, three drive-in doors and clear heights of 21 feet to 41 feet. As of September 6, 2022, the Wetumpka, AL property was 67.9% occupied by two tenants. Since acquisition of the Wetumpka, AL property in December 2020, the borrower sponsor has invested approximately $8.6 million in capital improvements.
Rockford, IL (13.8% of NRA; 16.0% of ALA): The Rockford, IL property is a 517,574 square foot industrial warehouse/distribution building located in Rockford, Illinois. The improvements were constructed in 1980, renovated in 2019 and include approximately 5.0% of office space. The Rockford, IL property is situated on an approximately 20.8-acre site with 219 surface parking spaces (0.4 per 1,000 square feet). The Rockford, IL property has a total of 82 dock-high doors, two drive-in doors and clear heights of 20 feet to 26 feet. As of September 6, 2022, the Rockford, IL property was 55.1% occupied by three tenants. Since acquisition of the Rockford, IL property in January 2019, the borrower sponsor has invested approximately $2.6 million in capital improvements.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 41 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 4 – Phoenix Industrial Portfolio IX |
Iowa City, IA (9.1% of NRA; 10.2% of ALA): The Iowa City, IA property is comprised of two industrial warehouse/distribution buildings totaling 341,491 square feet located in Iowa City, Iowa. The improvements were constructed in 1964, renovated in 2022 and include approximately 3.0% of office space. The Iowa City, IA property is situated on an approximately 20.3-acre site with 470 surface parking spaces (1.4 per 1,000 square feet). The Iowa City, IA property has a total of 22 dock-high doors, five drive-in doors and clear heights of 18 feet to 25 feet. As of September 6, 2022, the Iowa City, IA property was 93.0% occupied by HNI Corporation. Since acquisition of the Iowa City, IA property in June 2021, the borrower sponsor has invested approximately $2.7 million in capital improvements.
Versailles, KY (21.0% of NRA; 4.8% of ALA): The Versailles, KY property is comprised of five industrial warehouse/distribution buildings totaling 791,035 square feet located in Versailles, Kentucky. The improvements were constructed in 1964, renovated in 2011 and include approximately 5.0% of office space. The Versailles, KY property is situated on an approximately 60.6-acre site with 650 surface parking spaces (0.8 per 1,000 square feet). The Versailles, KY property has a total of 27 dock-high doors, 13 drive-in doors and clear heights of 16 feet to 33 feet. As of September 6, 2022, the Versailles, KY property was 87.8% occupied by three tenants. Since acquisition of the Versailles, KY property in June 2020, the borrower sponsor has invested approximately $1.3 million in capital improvements.
The following table presents certain information relating to the Phoenix Industrial Portfolio IX Properties:
| Portfolio Summary(1) |
| Property | State | Subtype | Net Rentable Area (SF)(2) | Year Built/ Renovated | % UW NOI | ALA | % of ALA | “As-Is” Appraised Value | % Office | Clear Heights (ft.) | Dock Doors | Drive-In Doors |
| Memphis, TN | TN | Warehouse / Distribution | 1,374,972 | 1973 / 2020 | 20.4 | % | $28,250,000 | 37.7 | % | $60,000,000 | 4.0% | 23'6 - 31'1 | 218 | 0 |
| Wetumpka, AL | AL | Manufacturing | 735,231 | 1997 / NAP | 22.2 | | 23,500,000 | 31.3 | | 48,500,000 | 2.0% | 21 - 41 | 29 | 3 |
| Rockford, IL | IL | Warehouse / Distribution | 517,574 | 1980 / 2019 | 11.3 | | 12,000,000 | 16.0 | | 23,300,000 | 5.0% | 20 - 26 | 82 | 2 |
| Iowa City, IA | IA | Warehouse / Distribution | 341,491 | 1964 / 2022 | 17.6 | | 7,650,000 | 10.2 | | 19,700,000 | 3.0% | 18 - 25 | 22 | 5 |
| Versailles, KY | KY | Warehouse / Distribution | 791,035 | 1964 / 2011 | 28.6 | | 3,600,000 | 4.8 | | 30,700,000 | 5.0% | 16 - 33 | 27 | 13 |
| Total/Wtd. Avg. | 3,760,303 | | 100.0 | % | $75,000,000 | 100.0 | % | $182,200,000 | | | 378 | 23 |
| (2) | Based on the underwritten rent rolls dated September 6, 2022. |
COVID-19 Update. As of the date of this term sheet, all the Phoenix Industrial Portfolio IX Properties were open and operating. The first payment date of the Phoenix Industrial Portfolio IX Whole Loan is October 6, 2022. The Phoenix Industrial Portfolio IX Borrowers have reported that no tenant deferments were requested or granted, nor were there any lease modification requests as of September 1, 2022.
Environmental. According to Phase I environmental assessments dated June 21, 2022, there was no evidence of any recognized environmental conditions at the Phoenix Industrial Portfolio IX Properties. The Phase I environmental assessments, however, did acknowledge controlled recognized environmental conditions at the Iowa City, IA property and the Versailles, KY property.
Based on the historical use of the Iowa City, IA property as a manufacturing facility, confirmed VOC contamination, and continued groundwater monitoring under regulatory oversight, the historic use of the Iowa City, IA property is considered a controlled recognized environmental condition. The Phase I environmental assessment recommends continued groundwater monitoring and coordination with the Iowa Department of Natural Resources to obtain final regulatory closure.
The Versailles, KY property is listed in multiple databases related to industrial activities conducted by former tenants at the Versailles, KY property. Regulatory data indicates that lead-contaminated glass was located throughout the Versailles, KY property. As a result, an environmental covenant was issued on February 1, 2008, restricting residential use of portions of the Versailles, KY property due to potential elevated lead concentrations and leachate potential. Based on the regulatory status, implemented soil cover, and environmental covenant, historical lead impacts are considered a controlled recognized environmental condition.
The following table presents certain information relating to the historical and current occupancy of the Phoenix Industrial Portfolio IX Properties:
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 42 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 4 – Phoenix Industrial Portfolio IX |
| Historical and Current Occupancy |
| 2019(1) | 2020(1) | 2021(1) | Current(2) |
| NAV | NAV | NAV | 71.9% |
| (1) | The borrower sponsor acquired the Phoenix Industrial Portfolio IX Properties between 2019 and 2021. As such, historical occupancy is unavailable. |
| (2) | Current occupancy is as of September 6, 2022. |
The following table presents certain information relating to the largest tenants by underwritten base rent of the Phoenix Industrial Portfolio IX Properties:
| Top Tenant Summary(1) |
| Tenant | Property | Ratings
Moody’s/S&P/ Fitch(2) | Net Rentable Area (SF) | % of
Total NRA | UW Base Rent PSF(3) | UW Base Rent(3) | % of Total
UW Base Rent(3) | Lease
Expiration Date |
| Viterra | Memphis, TN | NR/NR/NR | 569,688 | 15.2 | % | $1.74 | $991,257 | 11.9 | % | 8/31/2029 |
| Ledvance, LLC(4) | Versailles, KY | NR/NR/NR | 376,298 | 10.0 | | $3.04 | 1,145,791 | 13.8 | | Various(5) |
| Bella + Canvas, LLC | Wetumpka, AL | NR/NR/NR | 371,734 | 9.9 | | $3.94 | 1,463,216 | 17.6 | | 2/28/2029 |
| HNI Corporation | Iowa City, IA | NR/NR/NR | 317,518 | 8.4 | | $4.12 | 1,308,174 | 15.8 | | 6/30/2025 |
| McLane Company, Inc. | Versailles, KY | NR/NR/NR | 303,728 | 8.1 | | $3.28 | 996,228 | 12.0 | | 1/31/2026 |
| Fedex(6) | Memphis, TN | Baa2/BBB/NR | 235,747 | 6.3 | | $2.72 | 641,232 | 7.7 | | 11/30/2026 |
| Amazon(7) | Rockford, IL | A1/AA/AA- | 138,400 | 3.7 | | $3.49 | 483,495 | 5.8 | | 3/31/2027 |
| Wynn Grain Spice | Wetumpka, AL | NR/NR/NR | 127,286 | 3.4 | | $2.17 | 276,211 | 3.3 | | 4/30/2032 |
| USPS | Memphis, TN | Aaa/NR/NR | 101,162 | 2.7 | | $3.59 | 362,916 | 4.4 | | 5/31/2023 |
| Total Major Tenants | | 2,541,561 | 67.6 | % | $3.02 | $7,668,520 | 92.4 | % | |
| | | | | | | | |
| Other Tenants | | 160,831 | 4.3 | % | $3.94 | $634,170 | 7.6 | % | |
| | | | | | | | |
| Occupied Collateral Total / Wtd. Avg. | 2,702,392 | 71.9 | % | $3.07 | $8,302,690 | 100.0 | % | |
| Vacant Space | | 1,057,911 | 28.1 | % | | | | |
| | | | | | | | |
| Collateral Total | | 3,760,303 | 100.0 | % | | | | |
| | | | | | | | |
| (1) | Based on the underwritten rent rolls dated September 6, 2022. |
| (2) | In certain instances, ratings provided are those of the parent company of the entity shown, whether or not the parent company guarantees the lease. |
| (3) | UW Base Rent PSF, UW Base Rent and % of Total UW Base Rent are inclusive of approximately $335,509 of contractual rent steps through October 2023. |
| (4) | Ledvance, LLC may terminate on or after November 1, 2022 so long as (i) Ledvance, LLC delivers written notice of irrevocable intent to terminate at least 60 days prior to the termination date, (ii) Ledvance, LLC specifies in the notice which premises section is to be terminated and (iii) Ledvance, LLC is not in default on the termination date specified in its termination notice. |
| (5) | Levdance, LLC leases 188,554 square feet at the Versailles, KY property expiring on April 30, 2023 and 187,744 square feet at the Versailles, KY property expiring on April 30, 2027. |
| (6) | Fedex may terminate on 30 days' notice if the employees of another tenant become subject to a collective bargaining unit. |
| (7) | Amazon has a lease expiration of November 30, 2026. Since the expiration is between October 1 and March 30, the lease term will extend through March 31, 2027, unless Amazon opts out of the optional holiday extension by providing 270 days’ notice. In addition, Amazon may terminate on 30 days’ notice if a material interference with Amazon’s business occurs due to lack of access or interruption of utilities caused by the landlord or the landlord’s agents and such material interference continues for 180 days, but the exercised termination option will be void if such material interference is cured within the 30 days following receipt of notice from Amazon of its intent to terminate its lease. If a material interference continues for 270 days (regardless of whether such material interference is due to the landlord or the landlord’s agents), Amazon may terminate on 30 days’ notice after such 270 day period, but the exercised termination option will be void if the material interference is cured within the 30 days following receipt of notice from Amazon of its intent to terminate its lease. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 43 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 4 – Phoenix Industrial Portfolio IX |
The following table presents certain information relating to the tenant lease expirations of the Phoenix Industrial Portfolio IX Properties:
| Lease Rollover Schedule(1)(2) |
| Year | Number of Leases Expiring | Net Rentable Area Expiring | % of NRA Expiring | UW Base Rent Expiring(3) | % of UW Base Rent Expiring(3) | Cumulative Net Rentable Area Expiring | Cumulative % of NRA Expiring | Cumulative UW Base Rent Expiring(3) | Cumulative % of UW Base Rent Expiring |
| Vacant | NAP | 1,057,911 | 28.1% | NAP | NAP | 1,057,911 | 28.1% | NAP | NAP |
| 2022 & MTM | 0 | 0 | 0.0 | $0 | 0.0% | 1,057,911 | 28.1% | $0 | 0.0% |
| 2023 | 3 | 303,951 | 8.1 | 985,803 | 11.9 | 1,361,862 | 36.2% | $985,803 | 11.9% |
| 2024 | 1 | 52,917 | 1.4 | 194,735 | 2.3 | 1,414,779 | 37.6% | $1,180,537 | 14.2% |
| 2025 | 1 | 317,518 | 8.4 | 1,308,174 | 15.8 | 1,732,297 | 46.1% | $2,488,711 | 30.0% |
| 2026 | 2 | 539,475 | 14.3 | 1,637,460 | 19.7 | 2,271,772 | 60.4% | $4,126,171 | 49.7% |
| 2027 | 2 | 326,144 | 8.7 | 1,063,624 | 12.8 | 2,597,916 | 69.1% | $5,189,796 | 62.5% |
| 2028 | 1 | 93,679 | 2.5 | 382,210 | 4.6 | 2,691,595 | 71.6% | $5,572,006 | 67.1% |
| 2029 | 2 | 941,422 | 25.0 | 2,454,473 | 29.6 | 3,633,017 | 96.6% | $8,026,479 | 96.7% |
| 2030 | 0 | 0 | 0.0 | 0 | 0.0 | 3,633,017 | 96.6% | $8,026,479 | 96.7% |
| 2031 | 0 | 0 | 0.0 | 0 | 0.0 | 3,633,017 | 96.6% | $8,026,479 | 96.7% |
| 2032 | 1 | 127,286 | 3.4 | 276,211 | 3.3 | 3,760,303 | 100.0% | $8,302,690 | 100.0% |
| 2033 & Beyond | 0 | 0 | 0.0 | 0 | 0.0 | 3,760,303 | 100.0% | $8,302,690 | 100.0% |
| Total | 13 | 3,760,303 | 100.0% | $8,302,690 | 100.0% | | | | |
| (1) | Based on the underwritten rent rolls dated September 6, 2022. |
| (2) | Certain leases may have termination options that are exercisable prior to the originally stated expiration date of the lease and are not considered in this Lease Rollover Schedule. |
| (3) | UW Base Rent Expiring, % of UW Base Rent Expiring and Cumulative UW Base Rent Expiring are inclusive of approximately $335,509 of contractual rent steps through October 2023. |
The following table presents certain information relating to the operating history and underwritten cash flows of the Phoenix Industrial Portfolio IX Properties:
| Operating History and Underwritten Net Cash Flow |
| | TTM(1) | Underwritten | Per Square Foot | %(2) |
| Base Rent(3) | $3,842,384 | $7,967,181 | $2.12 | 52.2 | % |
| Rent Steps(4) | 0 | 335,509 | 0.09 | 2.2 | |
| Straight Line Rent(5) | 0 | 21,103 | 0.01 | 0.1 | |
| Vacant Income | 0 | 3,332,953 | 0.89 | 21.8 | |
| Gross Potential Rent | $3,842,384 | $11,656,746 | $3.10 | 76.3 | % |
| Total Reimbursements | 1,571,231 | 3,581,293 | 0.95 | 23.4 | |
| Total Other Income | 4,200 | 34,200 | 0.01 | 0.2 | |
| Net Rental Income | $5,417,815 | $15,272,239 | $4.06 | 100.0 | % |
| (Vacancy/Credit Loss) | 0 | (4,287,690) | (1.14) | (39.0 | ) |
| Effective Gross Income | $5,417,815 | $10,984,549 | $2.92 | 71.9 | % |
| Total Expenses | 3,797,836 | 3,597,682 | 0.96 | 32.8 | |
| Net Operating Income(6) | $1,619,979 | $7,386,867 | $1.96 | 67.2 | % |
| Total TI / LC, Capex/RR | 0 | 521,421 | 0.14 | 4.7 | |
| Net Cash Flow | $1,619,979 | $6,865,446 | $1.83 | 62.5 | % |
| (1) | TTM represents the trailing 10 months ending April 2022 for the Iowa City, IA property and the trailing 12 months ending April 2022 for the remaining properties. |
| (2) | % column represents percent of Net Rental Income for all revenue lines and represents percent of Effective Gross Income for the remainder of the fields. |
| (3) | Base Rent is based on the underwritten rent rolls dated September 6, 2022. |
| (4) | Rent Steps totaling $335,509 are taken through October 2023. |
| (5) | Straight Line Rent underwritten for investment-grade tenant, Amazon’s, average rent for the remainder of the Phoenix Industrial Portfolio IX Whole Loan term at the Rockford, IL property. |
| (6) | The increase from the TTM Net Operating Income to Underwritten Net Operating Income is primarily attributable to (i) leasing totaling an additional approximately $4.1 million in base rent, (ii) $335,509 in rent steps through October 2023, (iii) $21,103 in straight-lined rent for investment-grade tenant, Amazon, and (iv) an additional approximately $1.1 million in recoveries. The Most Recent NOI only includes the trailing 10 months ending April 2022 for the Iowa City, IA property as it was 100.0% vacant. Additionally, the utilities expense was underwritten $671,666 less than TTM due to (i) the elimination of excess use charges and installation of high efficiency LED lighting at the Versailles, KY property and (ii) Amazon, the largest tenant at the Rockford, IL property, being separately metered and paying gas bills directly to the utility company. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 44 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 4 – Phoenix Industrial Portfolio IX |
The Market. The Phoenix Industrial Portfolio IX Properties are located in Tennessee (37.7% of ALA), Alabama (31.3% of ALA), Illinois (16.0% of ALA), Iowa (10.2% of ALA) and Kentucky (4.8% of ALA).
Memphis (37.7% of ALA): The Memphis, TN property is in Shelby County, Tennessee located approximately 7.2 miles northwest of downtown Memphis and approximately 10.5 miles north of the Memphis International Airport. Primary access to the area is provided by Interstate 40, approximately 0.9 miles north of the Memphis, TN property and Interstate 69. According to a third-party market research report, the Memphis, TN property is located in the Northwest industrial submarket, which had approximately 29.7 million square feet of inventory, a vacancy rate of 4.1% and asking rent of $3.24 PSF as of the second quarter of 2022.
Wetumpka (31.3% of ALA): The Wetumpka, AL property is in Elmore County, Alabama located approximately 3.9 miles east of downtown Wetumpka and approximately 17.8 miles north of Montgomery. Primary access to the area is provided by State Route 14 with regional access provided by US Route 82, US Route 231 and Interstate 65. According to a third-party market research report, the Wetumpka, AL property is located in the outlying Elmore County industrial submarket, which had approximately 2.1 million square feet of inventory, a vacancy rate of 19.8% and asking rent of $4.85 PSF as of the second quarter of 2022.
Rockford (16.0% of ALA): The Rockford, IL property is in Winnebago County, Illinois located approximately 4.7 miles north of downtown Rockford, approximately 73.6 miles northwest of O’Hare International Airport and approximately 93.6 miles northwest of Chicago. Primary access to the area is provided by Route 20, which intersects with Interstate 90 approximately 7.0 miles southeast of the Rockford, IL property. According to a third-party market research report, the Rockford, IL property is located in the I-39 Corridor/Winnebago industrial submarket, which had approximately 34.8 million square feet of inventory, a vacancy rate of 7.7% and asking rent of $4.89 PSF as of the second quarter of 2022.
Iowa City (10.2% of ALA): The Iowa City, IA property is in Johnson County, Iowa located approximately 3.2 miles southeast of downtown Iowa City, approximately 30.1 miles south of Cedar Rapids, and approximately 32.1 miles from the Iowa-Mississippi border. Primary access to the area is provided by Route 6 and Route 1, which intersects with Interstate 80 approximately 3.5 miles north of the Iowa City, IA property. According to a third-party market research report, the Iowa City, IA property is located in the Iowa City industrial market, which had approximately 11.3 million square feet of inventory, a vacancy rate of 1.4% and asking rent of $6.49 PSF as of the second quarter of 2022.
Versailles (4.8% of ALA): The Versailles, KY property is in Woodford County, Kentucky located approximately 1.4 miles west of downtown Versailles, approximately 14.6 miles west of Lexington, approximately 37.3 miles west of the Winchester property and approximately 63.4 miles southeast of Louisville. Primary access to the area is provided by Interstate 64 and Interstate 75, as well as via US Highway 60, which runs from Western Lexington to Frankfurt. According to a third-party market research report, the Versailles, KY property is located in the Woodford County industrial submarket, which had approximately 3.6 million square feet of inventory, a vacancy rate of 1.6% and asking rent of $7.39 PSF as of the second quarter of 2022.
The following table presents certain market information with respect to the Phoenix Industrial Portfolio IX Properties:
| Market Overview(1) |
| Property | Year Built / Renovated | Net Rentable Area (SF)(2) | Submarket | Property Vacancy(2) | Submarket Vacancy | Appraisal Concluded Vacancy | Submarket Inventory (SF) | UW Base Rent PSF(2)(3) | Submarket Rent PSF |
| Memphis, TN | 1973 / 2020 | 1,374,972 | Northwest | 34.1% | 4.1% | 7.0% | 29,737,746 | $2.20 | $3.24 |
| Wetumpka, AL | 1997 / NAP | 735,231 | Outlying Elmore County | 32.1% | 19.8% | 4.0% | 2,130,773 | $3.49 | $4.85 |
| Rockford, IL | 1980 / 2019 | 517,574 | I-39 Corridor/Winnebago | 44.9% | 7.7% | 6.0% | 34,785,201 | $3.72 | $4.89 |
| Iowa City, IA(4) | 1964 / 2022 | 341,491 | Iowa City | 7.0% | 1.4% | 0.0% | 11,334,705 | $4.12 | $6.49 |
| Versailles, KY | 1964 / 2011 | 791,035 | Woodford County | 12.2% | 1.6% | 4.0% | 3,579,554 | $3.17 | $7.39 |
| Total/Wtd. Avg. | 3,760,303 | | 28.1% | 6.9% | 5.0% | 81,567,979 | $3.07 | $4.95 |
| (1) | Source: Third-party market research reports. |
| (2) | Based on the underwritten rent rolls dated September 6, 2022. |
| (3) | UW Base Rent PSF excludes underwritten vacant space and is inclusive of approximately $335,509 of contractual rent steps through October 2023. |
| (4) | No submarket data for the Iowa City, IA property was available. Market information is presented in the table above.
|
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 45 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 4 – Phoenix Industrial Portfolio IX |
The following table presents certain demographic information with respect to the Phoenix Industrial Portfolio IX Properties:
| Demographics Overview |
| Property | Net Rentable Area (SF)(1) | ALA | % of ALA | UW NCF | % of UW NCF | Estimated 2022 Population (5-mile Radius)(2) | Estimated 2022 Average Household Income (5-mile Radius)(2) |
| Memphis, TN | 1,374,972 | $28,250,000 | 37.7 | % | $1,350,064 | 19.7 | % | 216,737 | $73,950 |
| Wetumpka, AL | 735,231 | 23,500,000 | 31.3 | | 1,546,995 | 22.5 | | 15,595 | $81,749 |
| Rockford, IL | 517,574 | 12,000,000 | 16.0 | | 762,062 | 11.1 | | 131,254 | $77,732 |
| Iowa City, IA | 341,491 | 7,650,000 | 10.2 | | 1,215,216 | 17.7 | | 86,086 | $86,659 |
| Versailles, KY | 791,035 | 3,600,000 | 4.8 | | 1,991,110 | 29.0 | | 21,477 | $88,341 |
| Total/Wtd. Avg. | 3,760,303 | $75,000,000 | 100.0 | % | $6,865,446 | 100.0 | % | 112,702 | $80,177 |
| (1) | Based on the underwritten rent rolls dated September 6, 2022. |
| (2) | Information obtained from third-party market research reports. |
The Borrowers. The borrowers are Phoenix Memphis Industrial Investors LLC, Phoenix Wetumkpa Industrial Investors LLC, Phoenix Rockford Industrial Investors LLC, Phoenix Diablo Iowa City LLC and Phoenix Versailles Industrial Investors LLC (collectively, the “Phoenix Industrial Portfolio IX Borrowers”), each a Delaware limited liability company and single purpose entity with one independent director. Each Phoenix Industrial Portfolio IX Borrower owns one individual Phoenix Industrial Portfolio IX Property. Legal counsel to the Phoenix Industrial Portfolio IX Borrowers delivered a non-consolidation opinion in connection with the origination of the Phoenix Industrial Portfolio IX Whole Loan.
The Borrower Sponsor. The borrower sponsor is Phoenix Investors, which is the affiliated management company for the guarantors’ investments. Phoenix Investors is a national commercial real estate firm based in Milwaukee, Wisconsin that redevelops former manufacturing facilities throughout the United States. Phoenix Investors’ affiliated companies hold interests in approximately 52 million square feet of industrial, retail, office and single tenant net-leased properties across 29 states. Phoenix Investors engages in the renovation and repositioning of large, former single tenant industrial facilities throughout the United States that were previously owned by corporate entities, real estate investment trusts or financial institutions.
The non-recourse carveout guarantors of the Phoenix Industrial Portfolio IX Whole Loan are Irrevocable Children's Trust dated 7/22/91 and Irrevocable Children's Trust No. 2 dated 7/22/91. The non-recourse carveout guarantors have previously had ownership interests in entities that were subject to foreclosures and bankruptcies. See “Description of the Mortgage Pool—Default History, Bankruptcy Issues and Other Proceedings” in the Preliminary Prospectus.
Property Management. The Phoenix Industrial Portfolio IX Properties are managed by the borrower sponsor.
Escrows and Reserves. At origination, the Phoenix Industrial Portfolio IX Borrowers deposited (i) approximately $257,137 for real estate taxes, (ii) $3,000,000 for tenant improvements and leasing commissions, (iii) $1,290,083 for unfunded obligations with respect to the Bella + Canvas, LLC lease ($400,000), the Wynn Grain Spice lease ($200,000), the Amazon lease ($475,435), the Timber Industries lease ($10,000) and the HNI Corporation lease ($104,648), (iv) $319,158 for deferred maintenance, (v) $62,500 for an environmental reserve and (vi) $5,000,000 for an Earn-out Reserve (as detailed below).
Tax Escrows – On a monthly basis, the Phoenix Industrial Portfolio IX Borrowers are required to deposit 1/12th of an amount which would be sufficient to pay taxes for the next ensuing 12 months (currently equivalent to approximately $56,408 a month).
Insurance Escrows – On a monthly basis, the Phoenix Industrial Portfolio IX Borrowers are required to deposit 1/12th of an amount which would be sufficient to pay insurance premiums for the renewal of coverages; provided, such monthly deposits will be waived so long as the Phoenix Industrial Portfolio IX Borrowers maintain a blanket insurance policy acceptable to the lender.
Replacement Reserve – On a monthly basis, the Phoenix Industrial Portfolio IX Borrowers are required to deposit approximately $31,336 for replacement reserves subject to a cap of $1,130,000.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 46 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 4 – Phoenix Industrial Portfolio IX |
Rollover Reserve – On a monthly basis, the Phoenix Industrial Portfolio IX Borrowers are required to deposit approximately $47,004 for rollover reserves if at any time the balance of the reserve falls below $250,000, until such time as the reserve is restored to a cap of $1,500,000.
Earn-out Reserve – The Phoenix Industrial Portfolio IX Whole Loan documents require an upfront Earn-out reserve (the “Earn-out Reserve”) of $5,000,000. All funds on deposit in the Earn-out Reserve will be (i) during the continuation of a Cash Management Trigger Event (as defined below), transferred to the cash management account, or (ii) in the absence of a Cash Management Trigger Event, returned to the Phoenix Industrial Portfolio IX Borrowers; provided, however, that the following conditions have been fully satisfied by the Phoenix Industrial Portfolio IX Borrowers: (i) the Phoenix Industrial Portfolio IX Borrowers have submitted a written request to the lender at least 15 business days prior to the requested release, (ii) on the date such request is made, no default, event of default or Cash Sweep Trigger Event (as defined below) has occurred and is then continuing, (iii) the Phoenix Industrial Portfolio IX Borrowers have provided written evidence that the debt service coverage ratio based on the full outstanding principal balance of the Phoenix Industrial Portfolio IX Whole Loan is at least 1.47x, (iv) the Phoenix Industrial Portfolio IX Borrowers have delivered written evidence that the debt yield based on the full outstanding principal balance of the Phoenix Industrial Portfolio IX Whole Loan is not less than 9.8% and (v) an amount equal to the total estimated cost to perform or satisfy all then outstanding landlord obligations (for tenant improvements, landlord work, tenant allowances and/or leasing commissions) for all of the Phoenix Industrial Portfolio IX Properties, if any, will be on deposit in the rollover reserve account. The release of the Earn-out Reserve will be tied to the lease-up of the Memphis, TN and Wetumpka, AL properties only, such that the funds are only released once Phoenix Industrial Portfolio IX Properties achieves an underwritten net cash flow debt yield of 9.8% on the Phoenix Industrial Portfolio IX Whole Loan amount, assuming the lower of (i) the in-place cash flow at securitization or (ii) the actual in-place cash flow for all Phoenix Industrial Portfolio IX Properties other than the Memphis, TN and Wetumpka, AL properties, and the leased up net cash flow for Memphis, TN and Wetumpka, AL properties.
Notwithstanding the above, if the Phoenix Industrial Portfolio IX Borrowers fail to obtain the release of the Earn-out Reserve funds prior to the date that is three years from the date of the final securitization of the Phoenix Industrial Portfolio IX Whole Loan, the Phoenix Industrial Portfolio IX Borrowers will partially defease the Phoenix Industrial Portfolio IX Whole Loan in an amount equal to the then remaining balance in the Earn-out Reserve account (such partial defeasance, the “Earn-out Reserve Partial Defeasance”), plus (x) all interest which would have accrued on the amount of the Phoenix Industrial Portfolio IX Whole Loan to be prepaid through and including the last day of the interest period related to the monthly payment date following the Earn-out Reserve Partial Defeasance, (y) all reasonable out-of-pocket, third party costs and expenses actually incurred by the lender in connection with such Earn-out Reserve Partial Defeasance and (z) all other sums due and payable under the Phoenix Industrial Portfolio IX Whole Loan documents. To the extent that any portion of the Earn-out Reserve remains after the Earn-out Reserve Partial Defeasance, the remaining amount will be applied as follows: (a) if a Cash Management Trigger Event has occurred and is continuing, to the cash management account or (y) if no Cash Management Trigger Event has occurred and is continuing, to the Phoenix Industrial Portfolio IX Borrowers.
Notwithstanding the above, if the Phoenix Industrial Portfolio IX Borrowers fail to obtain the release of the Earn-out Reserve funds prior to April 6, 2032 (the “Open Prepayment Commencement Date”), the Phoenix Industrial Portfolio IX Borrowers will partially prepay the Phoenix Industrial Portfolio IX Whole Loan in an amount equal to the then remaining balance in the Earn-out Reserve account on the Open Prepayment Commencement Date.
Lockbox / Cash Management. The Phoenix Industrial Portfolio IX Whole Loan is structured with a hard lockbox and springing cash management upon the occurrence and continuance of a Cash Management Trigger Event. Revenues from the Phoenix Industrial Portfolio IX Properties are required to be deposited directly into the lockbox account or, if received by the Phoenix Industrial Portfolio IX Borrowers or the property manager, deposited within three business days of receipt. During the continuance of a Cash Management Trigger Event, all funds in the lockbox account are required to be swept each business day to a lender-controlled cash management account and disbursed in accordance with the Phoenix Industrial Portfolio IX Whole Loan documents, and all excess funds on deposit in the cash management account (after payment of required monthly reserve deposits, debt service payment on the Phoenix Industrial Portfolio IX Whole Loan, operating expenses and cash management bank fees) will be applied as follows: (a) if a Material Tenant Trigger Event (as defined below) has occurred and is continuing, to a Material Tenant (as defined below) rollover reserve, (b) if a Cash Sweep Trigger Event (as defined below) has occurred and is continuing (but not a Material Tenant Trigger Event), to the lender-controlled excess cash flow account or (c) if no Material Tenant Trigger Event or Cash Sweep Trigger Event has occurred and is continuing, to the Phoenix Industrial Portfolio IX Borrowers.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 47 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 4 – Phoenix Industrial Portfolio IX |
A “Cash Management Trigger Event” means a period commencing upon the occurrence of (i) an event of default under the Phoenix Industrial Portfolio IX Whole Loan documents, (ii) any bankruptcy action involving any of the Phoenix Industrial Portfolio IX Borrowers, the guarantors, the key principal or the property manager, (iii) the trailing 12-month period debt service coverage ratio falling below 1.30x, (iv) the indictment for fraud or misappropriation of funds by any of the Phoenix Industrial Portfolio IX Borrowers, the guarantors, the key principal or an affiliated or third-party property manager (provided that, in the case of the third-party property manager, such fraud or misappropriation is related to any of the Phoenix Industrial Portfolio IX Properties), or any director or officer of the aforementioned or (v) a Material Tenant Trigger Event, and expiring upon (a) with respect to clause (i) above, the cure of such event of default, (b) with respect to clause (ii) above, the filing being discharged, stayed or dismissed within 45 days for the Phoenix Industrial Portfolio IX Borrowers, the guarantors or the key principal, or within 120 days for the property manager, and the lender’s determination that such filing does not materially affect the Phoenix Industrial Portfolio IX Borrowers’, the guarantors’, the key principal’s or the property manager’s monetary obligations, (c) with respect to clause (iii) above, the trailing 12-month debt service coverage ratio being at least 1.35x for two consecutive calendar quarters, (d) with respect to clause (iv) above, the dismissal of the applicable indictment with prejudice or acquittal of the applicable person, or the replacement of the property manager with a third-party property manager that constitutes a qualified property manager under the Phoenix Industrial Portfolio IX Whole Loan documents or (e) with respect to clause (v) above, the cure of such Material Tenant Trigger Event.
A “Cash Sweep Trigger Event” means a period commencing upon the occurrence of (i) an event of default under the Phoenix Industrial Portfolio IX Whole Loan documents, (ii) any bankruptcy action involving any of the Phoenix Industrial Portfolio IX Borrowers, the guarantors, the key principal or the property manager or (iii) the trailing 12-month period debt service coverage ratio falling below 1.30x, and expiring upon (a) with respect to clause (i) above, the cure of such event of default, (b) with respect to clause (ii) above, as to an involuntary filing, the filing being discharged, stayed or dismissed within 45 days for any of the Phoenix Industrial Portfolio IX Borrowers, the guarantors or the key principal, or within 120 days for the property manager, and the lender’s determination that such filing does not materially affect the Phoenix Industrial Portfolio IX Borrowers’, the guarantors’, the key principal’s or the property manager’s monetary obligations or (c) with respect to clause (iii) above, the trailing 12-month debt service coverage ratio is at least 1.35x for two consecutive calendar quarters.
A “Material Tenant Trigger Event” means a period commencing upon the occurrence of (i) a Material Tenant giving notice of its intention to terminate or cancel or not to extend or renew its lease, (ii) on or prior to the then applicable expiration date under the applicable Material Tenant lease, if the Material Tenant does not extend or renew such Material Tenant lease, (iii) on or prior to the date a Material Tenant is required under its Material Tenant lease to notify the Phoenix Industrial Portfolio IX Borrowers of its election to extend or renew its lease, if such Material Tenant does not give notice, (iv) an event of default under a Material Tenant lease occurring and continuing beyond any applicable notice and/or cure period, (v) a bankruptcy action of a Material Tenant or a lease guarantor of any Material Tenant lease occurring, (vi) a Material Tenant lease being terminated in whole or in part; provided that, with respect to any partial termination of a Material Tenant lease, such partial termination relates to no less than 20% of the total net rentable square footage at the applicable property or (vii) a Material Tenant “going dark”, vacating, ceasing to occupy or ceasing to conduct business in the ordinary course at the applicable property or a portion thereof constituting no less than 20% of the total net rentable square footage at the applicable property (other than temporary cessation of operations in connection with remodeling, renovation or restoration of its leased premises) and expiring upon (a) with respect to clause (i) above, the date that (1) the applicable Material Tenant revokes or rescinds all termination or cancellation notices, (2) the applicable Material Tenant lease is extended on terms satisfying the requirements of the Phoenix Industrial Portfolio IX Whole Loan documents or (3) all or substantially all of the applicable Material Tenant space is leased to a replacement tenant, (b) with respect to clause (ii) above, the date that (1) the applicable Material Tenant lease is extended on terms satisfying the requirements of the Phoenix Industrial Portfolio IX Whole Loan documents or (2) all or substantially all of the applicable Material Tenant space is leased to a replacement tenant, (c) with respect to clause (iii) above, the date that (1) the applicable Material Tenant lease is extended on terms satisfying the requirements of the Phoenix Industrial Portfolio IX Whole Loan documents or (2) all or substantially all of the applicable Material Tenant space is leased to a replacement tenant, (d) with respect to clause (iv) above, a cure of the applicable event of default, (e) with respect to clause (v) above, the affirmation of the Material Tenant lease in the applicable bankruptcy proceeding and confirmation that the Material Tenant is actually paying all rents and other amounts under its lease (or, if applicable, the discharge or dismissal of the applicable Material Tenant lease guarantor from the applicable bankruptcy proceeding; provided that such bankruptcy (after dismissal or discharge) does not have an adverse effect on such Material Tenant lease guarantor’s ability to perform its obligations under its lease guaranty), (f) with respect to clause (vi) above, all or substantially all of the applicable Material Tenant space being leased to a replacement tenant or (g) with
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 48 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 4 – Phoenix Industrial Portfolio IX |
respect to clause (vii) above, the Material Tenant re-commencing its normal business operations at the applicable property or a portion thereof constituting more than 20% of the total net rentable square footage at the applicable property.
A “Material Tenant” means any tenant at the Phoenix Industrial Portfolio IX Properties that, together with its affiliates, either (a) leases no less than 21% of the total rentable square footage of the Phoenix Industrial Portfolio IX Properties or (b) accounts for (or would account for) no less than 21% of the total in-place base rent at the Phoenix Industrial Portfolio IX Properties.
Subordinate Debt. None.
Mezzanine Debt. The borrowers are permitted a one-time right to incur a future mezzanine loan, subject to the satisfaction of the requirements set forth in the Phoenix Industrial Portfolio IX Whole Loan documents, which include, but are not limited to: (i) no event of default under the Phoenix Industrial Portfolio IX Whole Loan documents is continuing, (ii) the aggregate loan-to-value ratio based on the Phoenix Industrial Portfolio IX Whole Loan and the mezzanine loan is no greater than 41.2%, (iii) the actual combined debt service coverage ratio based on the Phoenix Industrial Portfolio IX Whole Loan and the mezzanine loan is no less than 1.47x, (iv) the actual combined net cash flow debt yield based on the Phoenix Industrial Portfolio IX Whole Loan and the mezzanine loan is no less than 9.8%, (v) the execution of an intercreditor agreement acceptable to the lender and satisfactory to the rating agencies and (vi) receipt of a rating agency confirmation.
Partial Release. Not permitted.
Ground Lease. None.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 49 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 5 – 50 Tice Corporate Center |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 50 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 5 – 50 Tice Corporate Center |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 51 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 5 – 50 Tice Corporate Center |
| Mortgage Loan Information | | Property Information |
| Mortgage Loan Seller: | LMF | | Single Asset / Portfolio: | Single Asset |
| Original Principal Balance: | $36,500,000 | | Title: | Fee |
| Cut-off Date Principal Balance: | $36,500,000 | | Property Type – Subtype: | Office – Suburban |
| % of IPB: | 5.0% | | Net Rentable Area (SF): | 256,459 |
| Loan Purpose: | Refinance | | Location: | Woodcliff Lake, NJ |
| Borrower: | Capstone Tice Blvd LLC | | Year Built / Renovated: | 1984 / 2020 |
| Borrower Sponsors: | Mitchell Adelstein, Robert Friedberg and Brad Gillman | | Occupancy(1): | 89.8% |
| Interest Rate: | 5.88000% | | Occupancy Date: | 8/31/2022 |
| Note Date: | 9/2/2022 | | 4th Most Recent NOI (As of): | NAV |
| Maturity Date: | 9/6/2032 | | 3rd Most Recent NOI (As of): | $3,012,034 (12/31/2020) |
| Interest-only Period: | 60 months | | 2nd Most Recent NOI (As of): | $2,906,494 (12/31/2021) |
| Original Term: | 120 months | | Most Recent NOI (As of)(2): | $3,208,873 (TTM 6/30/2022) |
| Original Amortization Term: | 360 months | | UW Economic Occupancy: | 91.0% |
| Amortization Type: | Interest Only, Amortizing Balloon | | UW Revenues: | $6,802,586 |
| Call Protection: | L(25),D(91),O(4) | | UW Expenses: | $2,317,771 |
| Lockbox / Cash Management: | Hard / Springing | | UW NOI(2): | $4,484,814 |
| Additional Debt: | No | | UW NCF: | $4,356,585 |
| Additional Debt Balance: | N/A | | Appraised Value / Per SF: | $64,300,000 / $251 |
| Additional Debt Type: | N/A | | Appraisal Date: | 8/10/2022 |
| | | | | |
| Escrows and Reserves(3) | | Financial Information |
| | Initial | Monthly | Initial Cap | | Cut-off Date Loan / SF: | $142 |
| Taxes: | $0 | $74,353 | N/A | | Maturity Date Loan / SF: | $133 |
| Insurance: | $11,798 | Springing | N/A | | Cut-off Date LTV: | 56.8% |
| Replacement Reserves: | $153,875 | Springing | $153,875 | | Maturity Date LTV: | 53.0% |
| TI / LC: | $3,000,000 | Springing | $3,000,000 | | UW NCF DSCR: | 1.68x |
| Other(1): | $1,722,456 | $0 | N/A | | UW NOI Debt Yield: | 12.3% |
| | | | | | | |
| Sources and Uses |
| Sources | Proceeds | % of Tot | al | | Uses | Proceeds | % of Total | |
| Mortgage Loan | $36,500,000 | 100.0 | % | | Loan Payoff | $29,410,494 | 80.6 | % |
| | | | | Upfront Reserves | 4,888,130 | 13.4 | |
| | | | | Return of Equity | 1,255,285 | 3.4 | |
| | | | | Closing Costs | 946,090 | 2.6 | |
| Total Sources | $36,500,000 | 100.0 | % | | Total Uses | $36,500,000 | 100.0 | % |
| (1) | Occupancy includes HDR (as defined below) (10.2% of net rentable area and 11.3% of underwritten base rent) and International Planning Alliance (“IPA”) (2.9% of net rentable area and 3.2% of underwritten base rent). HDR is in the process of completing its buildout and is expected to take occupancy on October 1, 2022. IPA is in the process of completing its buildout and is expected to take occupancy on November 1, 2022. At origination, the lender escrowed approximately (a) $1.3 million for HDR which includes $970,000 for outstanding tenant improvements and $288,011 for five months of rent concessions and (b) $464,445 for IPA, which includes $367,150 for outstanding tenant improvements and $97,295 for six months of rent concessions. |
| (2) | The increase in Most Recent NOI and UW NOI is primarily attributed to the increase in occupancy and recent leasing at the 50 Tice Corporate Center Property (as defined below). Since August 2022, the borrower sponsors have leased approximately 39,347 square feet (15.3% of net rentable area and 17.1% of underwritten base rent) of space at the 50 Tice Corporate Center Property. |
| (3) | For a full description of Escrows and Reserves, please refer to “Escrows and Reserves” below. |
The Loan. The 50 Tice Corporate Center mortgage loan is secured by a first lien mortgage on the borrower’s fee interest in a 256,459 square foot office property located in Woodcliff Lake, New Jersey (the “50 Tice Corporate Center Property”). The 50 Tice Corporate Center mortgage loan was originated by LMF and has an outstanding principal balance as of the Cut-off Date of $36.5 million (the “50 Tice Corporate Center Mortgage Loan”). The 50 Tice Corporate Center Mortgage Loan has a 10-year term and is interest only for the first 60 months of the loan followed by monthly payments of interest and principal sufficient to amortize the loan over a 30-year amortization schedule.
The Property. The 50 Tice Corporate Center Property is a 256,459 square feet Class A, three-story suburban office building in Woodcliff Lake, New Jersey. Situated on 20.0 acres, the 50 Tice Corporate Center Property was built in 1984 and most
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 52 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 5 – 50 Tice Corporate Center |
recently renovated in 2020. Since acquisition, the borrower has invested approximately $12.3 million in capital improvements which included a new HVAC system, a new full height atrium lobby with coffee bar, exposed elevators and lounge seating, upgrades to the common areas and hallways, bathrooms, conference system and fitness center. The 50 Tice Corporate Center Property also offers outdoor patio seating and a full-service cafeteria. The 50 Tice Corporate Center Property has a total of 938 parking spaces (approximately 3.7 parking spaces per 1,000 square feet of net rentable area), which is comprised of 882 surface spaces and 56 garage spaces. As of August 31, 2022, the 50 Tice Corporate Center Property was 89.8% occupied by 38 national, regional and local tenants.
COVID-19 Update. As of September 6, 2022, the 50 Tice Corporate Center Property is open and operating. As of the date of this term sheet, the 50 Tice Corporate Center Mortgage Loan is not subject to any modification or forbearance requests. The first payment date of the 50 Tice Corporate Center Mortgage Loan is scheduled for October 6, 2022.
Major Tenants. The three largest tenants based on underwritten base rent are Eagle Pharmaceuticals, HDR and Ford.
Eagle Pharmaceuticals (27,093 square feet; 10.6% of NRA; 13.0% of underwritten base rent). Eagle Pharmaceuticals is a specialty pharmaceutical company working to advance safe and efficient injectable treatments for patients across oncology, critical care, and orphan diseases. Eagle Pharmaceuticals along with its collaborators have the capability to take a molecule from preclinical research through regulatory approval and into the marketplace, including development, manufacturing and commercialization of the products and products candidates. The 50 Tice Corporate Center Property serves as the company’s headquarters. Eagle Pharmaceuticals has been a tenant at the 50 Tice Corporate Center Property since 2013 under a lease that expires in June 2025, with one, five-year renewal option remaining. Eagle Pharmaceuticals has the right to terminate its lease at any time after March 31, 2024 with a 270 day notice period, which has to be delivered no earlier than July 1, 2023.
HDR (26,084 square feet; 10.2% of NRA; 11.3% of underwritten base rent). HDR Engineering (“HDR”) is an employee-owned design firm headquartered in Omaha, Nebraska which specializes in engineering, architecture, environmental and construction services. The company has a presence in the United States, Canada, Europe, Asia Pacific and the Middle East with more than 11,000 employees spread across over 200 locations globally. In 2022, HDR ranked #3 in Top 300 Architecture Firms and #3 in the Top 100 Global Architecture Practices. HDR is in the process of completing the build out of its space at the 50 Tice Corporate Center Property and is expected to take occupancy on October 1, 2022. HDR has five months of free rent, which was escrowed at origination. HDR has a lease expiration date of February 28, 2033 with two, five-year renewal options. HDR has the right to terminate its lease at any time on or after February 28, 2029 with the payment of a termination fee equal to the unamortized cost of (i) all of the landlord’s work, (ii) all broker’s fees, and (iii) any abated or free rent, all of which will be amortized with a 6.0% interest rate per annum. HDR also has a right of first refusal (“ROFR”) to lease a portion of Suite 280 (7,343 square feet), which is contiguous to HDR’s space.
Ford (19,358 square feet; 7.5% of NRA; 8.4% of underwritten base rent Moody’s/S&P/Fitch: Ba2/BB+/BB+). Founded in 1919 in Delaware, Ford Motor Company (“Ford”) is a global company which designs, manufactures, markets, and services a full line of Ford trucks, utility vehicles, and cars (increasingly including electrified versions), as well as Lincoln luxury vehicles. Ford employs approximately 183,000 people globally. The 50 Tice Corporate Center Property serves as a Central Hub office that serves the east coast dealership network by providing services to dealerships in the Tristate area, New England area, and Washington D.C. Services provided include marketing and advertising, financing, sales, parts and services. Ford has been a tenant at the 50 Tice Corporate Center Property since 2019 under a lease with an expiration date of August 31, 2026 with two, five-year renewal options remaining. Ford has a right of first offer (“ROFO”) to lease the contiguous space on the second floor of the 50 Tice Corporate Center Property.
Environmental. According to the Phase I environmental assessment dated August 19, 2022, there was no evidence of any recognized environmental conditions at the 50 Tice Corporate Center Property.
The following table presents certain information relating to the historical and current occupancy of the 50 Tice Corporate Center Property. During the renovation process, the borrower sponsors converted the former second floor Syncsort space into a multi-tenant use and executed 6 new leases totaling 67,161 square feet. Also, the borrower sponsors executed various new first floor, third floor, and atrium leases and expansions totaling an additional 43,000 square feet resulting in a current occupancy of 89.8%. The approximate 110,000 square feet of new leasing activities generated approximately $3 million in additional annual revenue.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 53 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 5 – 50 Tice Corporate Center |
| Historical and Current Occupancy |
| 2020(1) | 2021(1) | Current(2) |
| 68.8% | 71.9% | 89.8% |
| (1) | Historical Occupancies are as of December 31 of each respective year. |
| (2) | Current Occupancy is as of August 31, 2022. Includes two tenants (HDR and IPA) that are in the process of completing buildouts and are expected to take occupancy on October 1, 2022 and November 1, 2022, respectively. |
The following table presents certain information relating to the largest tenants based on underwritten base rent of the 50 Tice Corporate Center Property:
| Top Tenant Summary(1) |
| Tenant | Ratings
Moody’s/S&P/Fitch(2) | Net Rentable Area (SF) | % of
Total NRA | UW Base Rent PSF(3) | UW Base Rent(3) | % of Total
UW Base Rent | Lease
Expiration Date |
| Eagle Pharmaceuticals(4) | NR/NR/NR | 27,093 | 10.6 | % | $30.00 | $812,790 | 13.0 | % | 6/30/2025 |
| HDR(5) | NR/NR/NR | 26,084 | 10.2 | | $27.00 | 704,268 | 11.3 | | 2/28/2033 |
| Ford | Ba2/BB+/BB+ | 19,358 | 7.5 | | $27.00 | 522,666 | 8.4 | | 8/31/2026 |
| HQ Global Workplaces(6) | NR/NR/NR | 15,523 | 6.1 | | $15.60 | 242,159 | 3.9 | | 9/30/2023 |
| Price Meese Shulman(7) | NR/NR/NR | 13,095 | 5.1 | | $27.00 | 353,565 | 5.7 | | 4/30/2026 |
| Catalogic Software, Inc. | NR/NR/NR | 10,614 | 4.1 | | $29.00 | 307,806 | 4.9 | | 10/31/2023 |
| Ascensus(8) | NR/NR/NR | 10,203 | 4.0 | | $29.00 | 295,887 | 4.7 | | 1/31/2024 |
| Major Tenants | | 121,970 | 47.6 | % | $26.56 | $3,239,141 | 51.8 | % | |
| Other Tenants | | 108,433 | 42.3 | % | $27.83 | $3,017,540 | 48.2 | % | |
| Occupied Collateral Total / Wtd. Avg. | | 230,403 | 89.8 | % | $27.16 | $6,256,681 | 100.0 | % | |
| | | | | | | | |
| Vacant Space | | 26,056 | 10.2 | % | | | | |
| | | | | | | | |
| Collateral Total | | 256,459 | 100.0 | % | | | | |
| | | | | | | | |
| (1) | Based on the underwritten rent roll dated August 31, 2022. |
| (2) | In certain instances, ratings provided are those of the parent company of the entity shown, whether or not the parent company guarantees the lease. |
| (3) | UW Base Rent PSF and UW Base Rent includes rent steps totaling $99,663 taken through September 1, 2023. |
| (4) | Eagle Pharmaceuticals has the right to terminate its lease at any time after March 31, 2024 with a 270 day notice period, which has to be delivered no earlier than July 1, 2023. |
| (5) | HDR is currently in the process of completing the buildout of its space and is expected to take occupancy on October 1, 2022. HDR has five months of rent concessions, which was escrowed at origination. HDR may terminate its lease at any time on or after February 28, 2029 with the payment of a termination fee equal to the unamortized cost of (i) all of the landlord’s work, (ii) all broker’s fees, (iii) any abated or free rent, all of which will be amortized with a 6.0% interest rate per annum. HDR also has a ROFR to lease a portion of Suite 280 (7,343 square feet), which is contiguous to HDR’s space. |
| (6) | HQ Global Workplaces has two, five-year renewal options remaining. HQ Global Workplaces has a ROFO to lease the contiguous space on the third floor of the 50 Tice Corporate Center Property at the expiration of the existing space lease. |
| (7) | Price Meese Shulman has one, five-year renewal option remaining. Price Meese Shulman has the right to terminate its lease at any time on or prior to December 31, 2023. |
| (8) | Ascensus has one, three-year renewal option remaining. Ascensus has a ROFO to lease the contiguous space on the first floor of the 50 Tice Corporate Center Property at the expiration of the existing space lease. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 54 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 5 – 50 Tice Corporate Center |
The following table presents certain information relating to the tenant lease expirations of the 50 Tice Corporate Center Property:
Lease Rollover Schedule(1)(2) |
| Year | Number of Leases Expiring | Net Rentable Area Expiring | % of NRA Expiring | UW Base Rent Expiring(3) | % of UW Base Rent Expiring(3) | Cumulative Net Rentable Area Expiring | Cumulative % of NRA Expiring | Cumulative UW Base Rent Expiring(3) | Cumulative % of UW Base Rent Expiring(3) |
| Vacant | NAP | 26,056 | 10.2 | % | NAP | NAP | 26,056 | 10.2% | NAP | NAP |
| 2022 & MTM(4) | 2 | 553 | 0.2 | | 14,498 | 0.2 | % | 26,609 | 10.4% | $14,498 | 0.2% |
| 2023(4) | 9 | 57,030 | 22.2 | | 1,237,499 | 19.8 | | 83,639 | 32.6% | $1,251,998 | 20.0% |
| 2024 | 8 | 27,815 | 10.8 | | 896,473 | 14.3 | | 111,454 | 43.5% | $2,148,470 | 34.3% |
| 2025 | 4 | 33,050 | 12.9 | | 988,961 | 15.8 | | 144,504 | 56.3% | $3,137,431 | 50.1% |
| 2026 | 6 | 49,252 | 19.2 | | 1,359,056 | 21.7 | | 193,756 | 75.6% | $4,496,487 | 71.9% |
| 2027 | 2 | 9,625 | 3.8 | | 273,174 | 4.4 | | 203,381 | 79.3% | $4,769,662 | 76.2% |
| 2028 | 2 | 5,679 | 2.2 | | 200,869 | 3.2 | | 209,060 | 81.5% | $4,970,531 | 79.4% |
| 2029 | 2 | 9,427 | 3.7 | | 258,452 | 4.1 | | 218,487 | 85.2% | $5,228,982 | 83.6% |
| 2030 | 0 | 0 | 0.0 | | 0 | 0.0 | | 218,487 | 85.2% | $5,228,982 | 83.6% |
| 2031 | 0 | 0 | 0.0 | | 0 | 0.0 | | 218,487 | 85.2% | $5,228,982 | 83.6% |
| 2032 | 1 | 4,545 | 1.8 | | 125,169 | 2.0 | | 223,032 | 87.0% | $5,354,152 | 85.6% |
| 2033 & Beyond | 2 | 33,427 | 13.0 | | 902,529 | 14.4 | | 256,459 | 100.0% | $6,256,681 | 100.0% |
| Total | 38 | 256,459 | 100.0 | % | $6,256,681 | 100.0 | % | | | | |
| (1) | Based on the underwritten rent roll dated August 31, 2022. |
| (2) | Certain leases may have termination options that are exercisable prior to the originally stated expiration date of the lease and that are not considered in this Lease Rollover Schedule. |
| (3) | UW Base Rent Expiring, % of UW Base Rent Expiring, Cumulative UW Base Rent Expiring and Cumulative % of UW Base Rent Expiring include rent steps totaling $99,663 taken through September 1, 2023. |
| (4) | The following spaces are included in 2022 & MTM or 2023 Net Rentable Area Expiring and have no associated UW rents: Café, Health & Wellness Center, Conference Center, Recycling, and Occupied Storage. |
The following table presents certain information relating to the underwritten cash flows of the 50 Tice Corporate Center Property:
| Operating History and Underwriting Net Cash Flow |
| | 2020 | 2021 | TTM(1) | Underwritten | Per Square Foot | %(2) |
| Rents in Place | $4,628,421 | $4,558,666 | $4,953,138 | $6,157,017 | $24.01 | 83.1 | % |
| Vacant Income | 0 | 0 | 0 | 670,143 | $2.61 | 9.0 | |
| Contractual Rent Steps | 0 | 0 | 0 | 99,663 | $0.39 | 1.3 | |
| Gross Potential Rent | $4,628,421 | $4,558,666 | $4,953,138 | $6,926,823 | $27.01 | 93.5 | % |
| Total Reimbursements | 487,700 | 466,416 | 471,952 | 478,179 | $1.86 | 6.5 | |
| Net Rental Income | $5,116,121 | $5,025,081 | $5,425,091 | $7,405,002 | $28.87 | 100.0 | % |
| Other Income | 63,251 | 64,349 | 67,726 | 67,726 | $0.26 | 0.9 | |
| (Vacancy/Credit Loss)(3) | 0 | 0 | 0 | (670,143) | ($2.61) | (9.0) | |
| Effective Gross Income | $5,179,372 | $5,089,430 | $5,492,816 | $6,802,586 | $26.53 | 91.9 | % |
| Total Expenses | $2,167,338 | $2,182,936 | $2,283,943 | 2,317,771 | $9.04 | 34.1 | |
| Net Operating Income(4) | $3,012,034 | $2,906,494 | $3,208,873 | $4,484,814 | $17.49 | 65.9 | % |
| Capital Expenditures | 0 | 0 | 0 | 51,292 | $0.20 | 0.8 | |
| TI/LC | 0 | 0 | 0 | 76,938 | $0.30 | 1.1 | |
| Net Cash Flow | $3,012,034 | $2,906,494 | $3,208,873 | $4,356,585 | $16.99 | 64.0 | % |
| (1) | TTM reflects the trailing 12-month period ending June 30, 2022. |
| (2) | % column represents percent of Net Rental Income for all revenue lines and represents percent of Effective Gross Income for the remainder of fields. |
| (3) | Underwritten Vacancy/Credit Loss represents the economic vacancy of 9.0%. |
| (4) | The increase in Underwritten Net Operating Income from TTM Net Operating income is primarily attributed to the increase in occupancy and recent leasing at the 50 Tice Corporate Center Property. Since August 2022, the borrower sponsors have leased approximately 39,347 square feet (15.3% of net rentable area and 17.1% of underwritten base rent) of space at the 50 Tice Corporate Center Property. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 55 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 5 – 50 Tice Corporate Center |
The Market. The 50 Tice Corporate Center Property is located in Woodcliff Lake, New Jersey, within the New York-Newark-Jersey City, NY-NJ-PA Metropolitan Statistical Area (the “New York MSA”) in Bergen County. Bergen County is in the northeastern portion of New Jersey, bordered by Rockland County to the north, the Hudson River to the east, Hudson and Essex counties to the south, and Passaic County to the west. Bergen County’s largest industries include healthcare/social assistance, professional/scientific/technical services, and educational services. Major employers within Bergen County include Hackensack University Medical Center, Valley Health Systems, Inc., Bio-Reference Laboratories, Inc. and Express Scripts. Bergen County also serves as the corporate headquarters for Sharp Corporation and Benjamin Moore, with additional corporate offices for BMW, Ingersoll Rand, Pentax and KPMG.
The 50 Tice Corporate Center Property is located within the borough of Woodcliff Lake in the northern portion of Bergen County, approximately 11 miles north of Hackensack and 28 miles north of New York. Access is to the 50 Tice Corporate Center Property is provided via Interstates 80, Interstate 287, U.S. Route 202 and the New Jersey Turnpike. The immediate area surrounding the 50 Tice Corporate Center Property consists mainly of office, retail and industrial uses. Tice Corner Marketplace is located less than a mile from the 50 Tice Corporate Center Property. Tice Corner Marketplace is a lifestyle center featuring Apple, Anthropology, Pottery Barn, J. Crew, Williams-Sonoma and Panera Bread. North Market is a new mixed use district located approximately 1.8 miles northeast of the 50 Tice Corporate Center Property. North Market consists of five buildings, which include approximately 68,000 square feet of retail space, 308 apartments, a boutique hotel and approximately 90,000 square feet of Class A office space. According to a third-party market research report, the 2021 population within a one-, three- and five-mile radius of the 50 Tice Corporate Center Property was 3,234, 54,755 and 214,410, respectively. Additionally, for the same period, the average household income within the same radii was $207,953, $191,060 and $172,709, respectively.
According to the appraisal, the 50 Tice Corporate Center Property is located within the Northern New Jersey office market and the Upper Parkway office submarket. As of the second quarter of 2022, the Northern New Jersey office market contained approximately 382.9 million square feet of office space with a vacancy rate of 11.4% and an average quoted rental rate of $27.70 per square foot. As of the second quarter of 2022, the Northern New Jersey office market reported negative net absorption of 523,855 square feet and 125,200 square feet of completions. The Upper Parkway office submarket contained approximately 4.6 million square feet of office space with a vacancy rate of 18.0% and an average rental rate of $26.45 per square foot as of the second quarter of 2022. The Upper Parkway office submarket reported positive net absorption of 20,887 square feet and no new completions.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 56 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 5 – 50 Tice Corporate Center |
The following table presents certain information relating to comparable office leases for the 50 Tice Corporate Center Property:
| Comparable Office Rental Summary(1) |
| Property Name/Location | Year Built | Occ. | Size (SF) | Tenant | Suite Size (SF) | Rent PSF | Commencement | Lease Type | Lease Term (Months) |
50 Tice Corporate Center 50 Tice Boulevard Woodcliff Lake, NJ | 1984 | 89.8%(2) | 256,459 | Various | Various | $27.16(2) | Various | Mod Gross | Various |
17-17 Route 208 17-17 Route 208 Fair Lawn, NJ | 1987 | 100.0% | 150,022 | Summit Health | 70,549 | $25.25 | Jul-22 | Mod Gross | 60 |
155 Chestnut Ridge Road 155 Chestnut Ridge Road Montvale, NJ | 1976 | 91.5% | 94,172 | Confidential | 6,505 | $26.00 | Jun-21 | Mod Gross | 72 |
Overpeck Corporate Center 65 Challenger Road Ridgefield Park, NJ | 1987 | 92.0% | 185,050 | Korean Reinsurance | 2,480 | $27.50 | Jun-22 | Mod Gross | 72 |
Glenpointe Centre 300 Frank W. Burr Boulevard Teaneck, NJ | 1984 | 95.0% | 650,000 | Cognizant Technologies Solutions, Corp. | 36,577 | $37.50 | Feb-21 | Mod Gross | 120 |
Nexus 17 South 15 East Midland Avenue Paramus, NJ | 1988 | 90.5% | 272,176 | Hall Booth Law Firm | 23,339 | $34.00 | Mar-22 | Mod Gross | 156 |
| (2) | Based on the underwritten rent roll dated August 31, 2022. Occupancy includes two tenants (HDR and IPA) that are in the process of completing its buildout and are expected to take occupancy on October 1, 2022 and November 1, 2022, respectively. Rent PSF is inclusive of rent steps. |
The following table presents certain information relating to comparable sales for the 50 Tice Corporate Center Property:
| Comparable Sales(1) |
| Property Location | Sale Date | Total NRA (SF) | Total Occupancy | Sale Price | Sale Price PSF | Adjusted Sales Price PSF |
50 Tice Corporate Center 50 Tice Boulevard Woodcliff Lake, NJ | NAP | 256,459(2) | 89.8 | %(2) | NAP | NAP | NAP |
222 Bruce Reynolds Boulevard 222 Bruce Reynolds Boulevard Fort Lee, NJ | Feb-2022 | 108,365 | 67.0 | % | $31,000,000 | $286 | $246 |
180 Park Avenue 180 Park Avenue Florham Park, NJ | Oct-2022 | 228,350 | 75.0 | % | $35,600,000 | $156 | $211 |
Executive Plaza 10 Parsonage Road Edison, NJ | Jan-2020 | 115,200 | 98.8 | % | $33,000,000 | $286 | $255 |
One Bridge Plaza 1 Bridge Plaza North Fort Lee, NJ | Mar-2020 | 206,500 | 69.0 | % | $36,750,000 | $178 | $224 |
85 Challenger Road 85 Challenger Road Ridgefield Park, NJ | Oct-2020 | 233,505 | 97.0 | % | $59,700,000 | $256 | $266 |
Metropark Corporate Campus 194 Wood Street South Iselin, NJ | Aug-2020 | 470,692 | 100.0 | % | $140,000,000 | $297 | $263 |
| (2) | Based on the underwritten rent roll dated August 31, 2022. Total Occupancy includes two tenants (HDR and IPA) that are in the process of completing buildouts and are expected to take occupancy on October 1, 2022 and November 1, 2022, respectively. |
The Borrower. The borrowing entity for the 50 Tice Corporate Center Mortgage Loan is Capstone Tice Blvd LLC, a single purpose entity whose sole member/manager is an SPE which is required to have at least one independent director. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the 50 Tice Corporate Center Mortgage Loan.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 57 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 5 – 50 Tice Corporate Center |
The Borrower Sponsors. The borrower sponsors and non-recourse carveout guarantors for the 50 Tice Corporate Center Mortgage Loan are Mitchell Adelstein, Robert Friedberg and Brad Gillman. Mr. Adelstein is a founder and managing partner of Capstone Realty Group USA (“Capstone”), and Mr. Friedberg and Mr. Gillman are each managing partners of Capstone. Capstone is a commercial real estate investment and development company focused on acquiring multifamily, self-storage, office and retail properties. Capstone’s expertise includes acquisitions, valuations, debt financing, private equity syndication, real estate management and design and development. Additionally, Capstone provides in-house asset management, construction management, property management and capital advisory services.
Property Management. The 50 Tice Corporate Center Property is managed by Capstone Realty Group LLC, and affiliate of the borrower sponsors and G&E Real Estate Management Services, Inc.
Escrows and Reserves. At origination, the borrower deposited into escrow approximately $11,798 for insurance reserves, $153,875 for replacement reserves, $3,000,000 for TI/LCs, $970,000 for outstanding tenant improvements for HDR, $367,150 for outstanding tenant improvements for IPA, $288,011 for a rent concession reserve for HDR and approximately $97,295 for a rent concession reserve for IPA.
Tax Escrows – On a monthly basis, the borrower is required to escrow 1/12th of the annual estimated tax payments, which currently equates to approximately $74,353.
Insurance Escrows – On a monthly basis, the borrower is required to escrow 1/12th of the annual estimated insurance payments, which amount is currently waived. The requirement for the borrower to make monthly deposits to the insurance escrow is waived so long as (i) the 50 Tice Corporate Center Property is insured under a blanket insurance policy in accordance with the 50 Tice Corporate Center Mortgage Loan documents and (ii) the borrower provides the lender with satisfactory written evidence of the payment of the applicable insurance premiums at least 15 days prior to the expiration of any acceptable blanket policy.
Replacement Reserves – On a monthly basis, the borrower is required to escrow approximately $4,274 for replacement reserves, subject to a cap of $153,875.
TI/LC Reserves – On a monthly basis, the borrower is required to escrow $42,753 for tenant improvement and leasing commission reserves, subject to a cap of $3,000,000. In addition, the borrower is required to deposit in the TI/LC reserve any amounts paid to the borrower in connection with a termination, cancellation, surrender, modification, sale or other disposition of any lease (or portion of the lease) other than amounts paid for rent and other charges in respect of periods prior to the date of such termination, cancellation, surrender, modification, sale or other disposition. Provided no event of default is existing, the borrower has the right to deliver to the lender a letter of credit in an amount equal to the amount (excluding any deposits to cover the letter of credit transfer fees) then required to be held in the tenant improvement and leasing commission subaccount, subject to terms of the 50 Tice Corporate Center Mortgage Loan documents.
Lockbox / Cash Management. The 50 Tice Corporate Center Mortgage Loan is structured with a hard lockbox and springing cash management. The borrower or the property managers are required to deliver to each tenant at the 50 Tice Corporate Center Property a tenant direction letter instructing each tenant to deposit rents directly into the lender-controlled lockbox account. If any of the borrower or the property managers receive any rents or other charges related to the 50 Tice Corporate Center Property, the borrower or the property managers are required to deposit such amounts into the lender-controlled lockbox within one business day of receipt. All amounts in the lockbox account are remitted on each business day to the borrower at any time other than during the continuance of a Cash Management Trigger Event (as defined below). Upon the occurrence and during the continuance of a Cash Management Trigger Event, all amounts are required to be remitted to a lender-controlled cash management account to be applied and disbursed in accordance with the 50 Tice Corporate Center Mortgage Loan documents. During the occurrence of a Cash Sweep Event, all excess cash flow funds will be held by the lender in an excess cash flow reserve account as additional collateral for the 50 Tice Corporate Center Mortgage Loan.
A “Cash Management Trigger Event” means the occurrence of (i) an event of default, (ii) a bankruptcy action of the borrower, guarantors or property managers, provided, however; if two of the guarantors are not subject to a bankruptcy action and their combined net worth and liquidity satisfy the financial covenants as stated in the 50 Tice Corporate Center Mortgage Loan documents, then such bankruptcy action of one guarantor will not constitute a Cash Management Trigger Event or (iii) a Cash Management DSCR Trigger Event (as defined below). A Cash Management Trigger Event will end (a) with respect to clause (i) above, if a cure of such event of default has been accepted or the event of default has been waived
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 58 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 5 – 50 Tice Corporate Center |
by the lender, (b) with respect to clause (ii) above, when such bankruptcy action petition has been discharged, stayed, or dismissed within 90 days of such filing among other conditions with respect to the borrower and the guarantor and within 120 days for the property managers, or, with respect to the property managers, the borrower replacing the property managers with a qualified manager acceptable to the lender and (c) with respect to clause (iii) above, the date the amortizing debt service coverage ratio based on the trailing 12-month period immediately preceding the date of such determination is greater than 1.15x for two consecutive quarters.
A “Cash Management DSCR Trigger Event” will occur on any day the debt service coverage ratio, based on the trailing 12-month period immediately preceding the date of determination, is less than 1.15x.
A “Cash Sweep Event” means the occurrence of (i) an event of default, (ii) a bankruptcy action of the borrower, guarantors or property managers, provided, however; if two guarantors are not subject to a bankruptcy action and collectively satisfy the financial covenants as stated within the 50 Tice Corporate Center Mortgage Loan documents, then such bankruptcy action of one guarantor will not constitute a Cash Sweep Event or, or (iii) a Cash Sweep DSCR Trigger Event. A Cash Sweep Event will end (a) with respect to clause (i) above, a cure of such event of default has been accepted or the event of default has been waived by the lender, (b) with respect to clause (ii) above, when such bankruptcy action petition has been discharged, stayed, or dismissed within 90 days of such filing among other conditions with respect to the borrower and the guarantor and within 120 days for the property managers, or, with respect to the managers, the borrower replacing the property managers with a qualified manager acceptable to the lender and (c) with respect to clause (iii) above, the date the amortizing debt service coverage ratio based on the trailing 12-month period immediately preceding the date of such determination is greater than 1.15x for two consecutive quarters.
A “Cash Sweep DSCR Trigger Event” will occur on any day the debt service coverage ratio, based on the trailing 12-month period immediately preceding the date of determination, is less than 1.15x.
Subordinate Debt. None.
Mezzanine Debt. The borrower is permitted to incur a future mezzanine loan subject to the satisfaction of the requirements as set forth in the 50 Tice Corporate Center Mortgage Loan documents, including but not limited to: (i) no event of default is continuing, (ii) the combined loan-to-value ratio based on the 50 Tice Corporate Center Mortgage Loan and the future mezzanine loan is no greater than 56.8%, (iii) the combined debt service coverage ratio based on the 50 Tice Corporate Center Mortgage Loan and the future mezzanine loan is equal to or greater than 1.68x, (iv) the execution of an intercreditor agreement acceptable to the lender and (v) receipt of a rating agency confirmation from each of Fitch, KBRA and S&P that the mezzanine financing will not result in a downgrade, withdrawal or qualification of the respective ratings assigned to the BMO 2022-C3 certificates.
Partial Release. Not permitted.
Ground Lease. None.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 59 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 6 – Center Pointe Plaza I |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 60 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 6 – Center Pointe Plaza I |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 61 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 6 – Center Pointe Plaza I |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 62 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 6 – Center Pointe Plaza I |
| Mortgage Loan Information | | Property Information |
| Mortgage Loan Seller: | LMF | | Single Asset / Portfolio: | Single Asset |
| Original Principal Balance: | $35,000,000 | | Title: | Fee |
| Cut-off Date Principal Balance: | $34,966,340 | | Property Type – Subtype: | Retail - Anchored |
| % of IPB: | 4.8% | | Net Rentable Area (SF): | 238,348 |
| Loan Purpose: | Refinance | | Location: | Newark, DE |
| Borrower: | Centercap Holding LLC | | Year Built / Renovated: | 1997 / NAP |
| Borrower Sponsor: | Joanne M. Capano | | Occupancy: | 89.7% |
| Interest Rate: | 6.18000% | | Occupancy Date: | 8/1/2022 |
| Note Date: | 9/7/2022 | | 4th Most Recent NOI (As of): | NAV |
| Maturity Date: | 9/6/2032 | | 3rd Most Recent NOI (As of): | $2,965,985 (12/31/2020) |
| Interest-only Period: | None | | 2nd Most Recent NOI (As of): | $2,854,196 (12/31/2021) |
| Original Term: | 120 months | | Most Recent NOI (As of): | $2,737,310 (TTM 6/30/2022) |
| Original Amortization Term: | 360 months | | UW Economic Occupancy: | 89.2% |
| Amortization Type: | Amortizing Balloon | | UW Revenues: | $4,144,219 |
| Call Protection: | L(25),D(91),O(4) | | UW Expenses: | $786,260 |
| Lockbox / Cash Management: | Springing | | UW NOI: | $3,357,960 |
| Additional Debt: | No | | UW NCF: | $3,250,703 |
| Additional Debt Balance: | N/A | | Appraised Value / Per SF: | $52,800,000 / $222 |
| Additional Debt Type: | N/A | | Appraisal Date: | 7/22/2022 |
| | | | | |
| Escrows and Reserves(1) | | Financial Information |
| | Initial | Monthly | Initial Cap | | Cut-off Date Loan / SF: | $147 |
| Taxes: | $38,007 | $36,197 | N/A | | Maturity Date Loan / SF: | $125 |
| Insurance: | $41,369 | $3,940 | N/A | | Cut-off Date LTV: | 66.2% |
| Replacement Reserves: | $0 | $2,979 | N/A | | Maturity Date LTV: | 56.5% |
| TI/LC: | $250,000 | $5,956 | $500,000 | | UW NCF DSCR: | 1.27x |
| Deferred Maintenance: | $26,778 | $0 | N/A | | UW NOI Debt Yield: | 9.6% |
| Other Reserves(1): | $557,012 | $0 | N/A | | | |
| | | | | | | |
| Sources and Uses |
| Sources | Proceeds | % of Total | | Uses | Proceeds | % of Total |
| Mortgage Loan | $35,000,000 | 100.0 | % | | Loan Payoff | $32,267,907 | 92.2 | % |
| | | | | Upfront Reserves | $913,166 | 2.6 | |
| | | | | Closing Costs | $827,316 | 2.4 | |
| | | | | Return of Equity | $991,612 | 2.8 | |
| Total Sources | $35,000,000 | 100.0 | % | | Total Uses | $35,000,000 | 100.0 | % |
| (1) | For a full description of Escrows and Reserves, please refer to “Escrows and Reserve” below. |
The Loan. The Center Pointe Plaza I mortgage loan is secured by a first lien mortgage on the borrower’s fee interest in a 238,348 square foot anchored retail property located in Newark, Delaware (the “Center Pointe Plaza I Property”). The Center Pointe Plaza I mortgage loan was originated by LMF and has an outstanding principal balance as of the Cut-off Date of approximately $35.0 million (the “Center Pointe Plaza I Mortgage Loan”). The Center Pointe Plaza I Mortgage Loan has a 10-year term and amortizes on a 30-year amortization schedule.
The Property. The Center Pointe Plaza I Property is an anchored retail center comprised of five, one-story retail buildings, totaling 238,348 square feet on an approximately 38.8-acre site in Newark, Delaware. Built in 1997, the Center Pointe Plaza I Property provides parking via 1,393 surface parking spaces, resulting in a parking ratio of 5.8 spaces per 1,000 square feet of net rentable area. The Center Pointe Plaza I Property is anchored by The Home Depot and junior anchored by TJ Maxx, Ross Dress for Less, Boot Barn, Sai Farmer’s Market and Dollar Tree. There is one pad ground leased to Cheddar’s Casual Café. The Center Pointe Plaza I Property sits adjacent to non-collateral Center Pointe Plaza II, which is unaffiliated with the Center Pointe Plaza I Property. Since 2018, the borrower sponsor invested approximately $3.7 million in capital improvements, including demising and fitting out the former Babies R Us (current Ross Dress for Less space), as well as installing multiple new roofs, electrical systems, and HVAC units. As of August 1, 2022, the Center Pointe Plaza I Property
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 63 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 6 – Center Pointe Plaza I |
was 89.7% occupied by ten national, regional and local tenants. Occupancy excludes the temporary tenant Spirit Halloween (7,997 square feet; 3.4% of NRA) for approximately $21.00 per square foot from August 2022 through November 2022.
COVID-19 Update. As of September 6, 2022, the Center Pointe Plaza I Property is open and operating. As of the date of this term sheet, the Center Pointe Plaza I Mortgage Loan is not subject to any modification or forbearance requests. The first payment date of the Center Pointe Plaza I Mortgage Loan is October 6, 2022.
Major Tenants. The three largest tenants based on underwritten base rent are Home Depot U.S.A., Inc., TJ Maxx and Ross Dress for less.
Home Depot U.S.A., Inc. (109,738 square feet; 46.0% of NRA, 43.7% of Base Rent, Moody’s/S&P/Fitch: A2/A/A): Founded in 1977 and headquartered in Atlanta, Georgia, Home Depot U.S.A., Inc. (“Home Depot”) is a home improvement specialty retailer with approximately 2,200 retail stores in all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, Canada and Mexico. Home Depot is the anchor tenant at the Center Pointe Plaza I Property and has been a tenant at the Center Pointe Plaza I Property since 1995 under a lease expiring in June 2031, with four, five-year renewal options remaining.
TJ Maxx (29,900 square feet; 12.5% of NRA, 15.2% of Base Rent, Moody’s/S&P/Fitch: A2/A/NR): Founded in 1976 and headquartered in Framingham, Massachusetts, TJ Maxx is the leading off-price retailer of apparel and home fashions in the United States and worldwide. TJ Maxx operates four major divisions including Marmaxx, HomeGoods, TJX Canada and TJX International across nine countries in three continents, as well as five e-commerce businesses. TJ Maxx has been a tenant at the Center Pointe Plaza I Property since 1997 under a lease expiring in January 2033, with two, five-year renewal options remaining.
Ross Dress for Less (22,000 square feet; 9.2% of NRA, 7.9% of Base Rent, Moody’s/S&P/Fitch: A2/BBB+/NR): Founded in 1982 and headquartered in Dublin, California, Ross Dress for Less (“Ross”) is an off-price retail chain. Ross operates two major brands including Ross Dress for Less and dd’s Discounts. Ross operates approximately 1,669 stores in 40 states, the District of Columbia and Guam, while dd’s Discounts operates 311 stores in 21 states. Ross has been a tenant at the Center Pointe Plaza I Property since 2020 under a lease expiring in January 2031, with four, five-year renewal options remaining.
Environmental. According to the Phase I environmental assessment dated August 2, 2022, there was no evidence of any recognized environmental conditions at the Center Pointe Plaza I Property.
The following table presents certain information relating to the historical occupancy of the Center Pointe Plaza I Property:
| Historical and Current Occupancy |
| 2020(1) | 2021(1) | Current(2) |
| 80.0% | 81.5% | 89.7% |
| (1) | Historical Occupancies are as of December 31 of each respective year. |
| (2) | Current Occupancy is as of August 1, 2022. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 64 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 6 – Center Pointe Plaza I |
The following table presents certain information relating to the largest tenants based on underwritten base rent of the Center Pointe Plaza I Property:
| Top Tenant Summary(1) |
| Tenant | Ratings
Moody’s/S&P/Fitch(2) | Net Rentable Area (SF) | % of
Total NRA | UW Base Rent PSF(3) | UW Base Rent(3) | % of Total
UW Base Rent(3) | Sales PSF(4) | Occ. Costs | Lease
Exp. Date |
| Home Depot U.S.A., Inc. | A2/A/A | 109,738 | 46.0 | % | $13.91 | $1,526,023 | 43.7 | % | $570 | 2.9% | 6/30/2031(5) |
| TJ Maxx | A2/A/NR | 29,900 | 12.5 | | $17.75 | 530,725 | 15.2 | | $332 | 6.1% | 1/31/2033(6) |
| Ross Dress for Less | A2/BBB+/NR | 22,000 | 9.2 | | $12.50 | 275,000 | 7.9 | | NAP | NAP | 1/31/2031(7) |
| Boot Barn(8) | NR/NR/NR | 14,715 | 6.2 | | $15.75 | 231,761 | 6.6 | | NAP | NAP | 2/29/2032 |
| Sai Farmer’s Market | NR/NR/NR | 13,500 | 5.7 | | $16.00 | 216,000 | 6.2 | | NAP | NAP | 7/31/2029 |
| Dollar Tree | Baa2/BBB/NR | 11,100 | 4.7 | | $13.35 | 148,185 | 4.2 | | NAP | NAP | 1/31/2031 |
| Major Tenants | | 200,953 | 84.3 | % | $14.57 | $2,927,694 | 83.8 | % | | | |
| Other Tenants(9) | | 12,851 | 5.4 | % | $44.15 | $567,320 | 16.2 | % | | | |
| Occupied Collateral Total / Wtd. Avg. | | 213,804 | 89.7 | % | $16.35 | $3,495,014 | 100.0 | % | | | |
| | | | | | | | | | |
| Vacant Space (10) | | 24,544 | 10.3 | % | | | | | | |
| | | | | | | | | | |
| Collateral Total | | 238,348 | 100.0 | % | | | | | | |
| | | | | | | | | | |
| (1) | Based on the underwritten rent roll dated August 1, 2022. |
| (2) | In certain instances, ratings provided are those of the parent company of the entity shown, whether or not the parent company guarantees the lease. |
| (3) | UW Base Rent PSF, UW Base Rent and % of Total UW Base Rent includes straight line rent of $43,831. |
| (4) | Sales PSF are as of the trailing 12-month period ending December 31, 2021 as provided by the borrower. |
| (5) | Home Depot has four, five-year renewal options remaining. |
| (6) | TJ Maxx has two, five-year renewal options remaining. |
| (7) | Ross Dress for Less has four, five-year renewal options remaining. |
| (8) | Boot Barn may terminate its lease with 180 days’ notice if sales during year 5 (March 2026 through February 2027) are $2.1 million or less with a 180 days’ notice period. Boot Barn has three, five-year renewal options remaining. |
| (9) | Other Tenants includes Cheddar’s Casual Café, which operates under an approximate 11-year ground lease with a lease expiration date of February 28, 2033. Cheddar’s Casual Café is not included in Net Rentable Area (SF) and % of Total NRA but the U/W Base Rent of $210,000 is included. The borrower sponsor deposited $78,912 for rent concession reserve and $110,250 for leasing commission reserve for Cheddar’s Casual Café. The % of Total UW Base Rent, UW Base Rent and UW Base Rent PSF for Other Tenants Total include the UW Base Rent associated with the Cheddar’s Casual Café pad site. |
| (10) | Vacant Space includes one temporary tenant being underwritten as vacant: Spirit Halloween has been a tenant at the Center Pointe Plaza I Property since August 2022 under an approximate 4-month lease expiring November 2022. Spirit Halloween currently occupies 7,997 square feet at the Center Pointe Plaza I Property. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 65 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 6 – Center Pointe Plaza I |
The following table presents certain information relating to the tenant lease expirations at the Center Pointe Plaza I Property:
| Lease Rollover Schedule(1)(2) |
| Year | Number of Leases Expiring | Net Rentable Area Expiring | % of NRA Expiring | UW Base Rent Expiring(3) | % of UW Base Rent Expiring | Cumulative Net Rentable Area Expiring | Cumulative % of NRA Expiring | Cumulative UW Base Rent Expiring(3) | Cumulative % of UW Base Rent Expiring(3) |
| Vacant(4) | NAP | 24,544 | 10.3 | % | NAP | NA | P | 24,544 | 10.3% | NAP | NAP |
| 2022 & MTM | 0 | 0 | 0.0 | | 0 | 0.0 | % | 24,544 | 10.3% | $0 | 0.0% |
| 2023 | 0 | 0 | 0.0 | | 0 | 0.0 | | 24,544 | 10.3% | $0 | 0.0% |
| 2024 | 0 | 0 | 0.0 | | 0 | 0.0 | | 24,544 | 10.3% | $0 | 0.0% |
| 2025 | 0 | 0 | 0.0 | | 0 | 0.0 | | 24,544 | 10.3% | $0 | 0.0% |
| 2026 | 0 | 0 | 0.0 | | 0 | 0.0 | | 24,544 | 10.3% | $0 | 0.0% |
| 2027 | 2 | 10,100 | 4.2 | | 302,320 | 8.7 | | 34,644 | 14.5% | $302,320 | 8.7% |
| 2028 | 0 | 0 | 0.0 | | 0 | 0.0 | | 34,644 | 14.5% | $302,320 | 8.7% |
| 2029 | 1 | 13,500 | 5.7 | | 216,000 | 6.2 | | 48,144 | 20.2% | $518,320 | 14.8% |
| 2030 | 0 | 0 | 0.0 | | 0 | 0.0 | | 48,144 | 20.2% | $518,320 | 14.8% |
| 2031 | 3 | 142,838 | 59.9 | | 1,949,208 | 55.8 | | 190,982 | 80.1% | $2,467,528 | 70.6% |
| 2032 & Beyond | 4 | 47,366 | 19.9 | | 1,027,486 | 29.4 | | 238,348 | 100.0% | $3,495,014 | 100.0% |
| Total | 10 | 238,348 | 100.0 | % | $3,495,014 | 100.0 | % | | | | |
| (1) | Based on the underwritten rent roll dated August 1, 2022. |
| (2) | Certain leases may have termination options that are exercisable prior to the originally stated expiration date of the lease and that are not considered in this Lease Rollover Schedule. |
| (3) | UW Base Rent Expiring, % of UW Base Rent Expiring, Cumulative UW Base Rent Expiring and Cumulative % of UW Base Rent Expiring includes straight line rent of $43,831. |
| (4) | Vacant Space includes one temporary tenant being underwritten as vacant: Spirit Halloween has been a tenant at the Center Pointe Plaza I Property since August 2022 under an initial approximate 4-month lease expiring November 2022. Spirit Halloween currently occupies 7,997 square feet at the Center Pointe Plaza I Property. |
The following table presents certain information relating to the underwritten cash flows of the Center Pointe Plaza I Property:
| Operating History and Underwriting Net Cash Flow |
| | 2020 | 2021 | TTM(1) | Underwritten | Per Square Foot | %(2) |
| Rents in Place | $3,401,248 | $3,236,853 | $3,116,290 | $3,495,014 | $14.66 | 75.4 | % |
| Vacant Income | 0 | 0 | 0 | 449,236 | $1.88 | 9.7 | |
| Straight Line Rent | 0 | 0 | 0 | 43,831 | $0.18 | 0.9 | |
| Gross Potential Rent | $3,401,248 | $3,236,853 | $3,116,290 | $3,988,082 | $16.73 | 86.0 | % |
| Total Reimbursements | 429,461 | 488,861 | 451,629 | 597,156 | $2.51 | 12.9 | |
| Other Income(3) | 0 | 2,771 | 2,771 | 52,771 | $0.22 | 1.1 | |
| Net Rental Income | $3,830,709 | $3,728,485 | $3,570,690 | $4,638,009 | $19.46 | 100.0 | % |
| (Vacancy/Credit Loss)(4) | 0 | 0 | 0 | (493,790) | ($2.07) | (10.6) | |
| Effective Gross Income | $3,830,709 | $3,728,485 | $3,570,690 | $4,144,219 | $17.39 | 89.4 | % |
| Total Expenses | 864,724 | 874,289 | 833,380 | 786,260 | $3.30 | 19.0 | |
| Net Operating Income | $2,965,985 | $2,854,196 | $2,737,310 | $3,357,960 | $14.09 | 81.0 | % |
| Capital Expenditures | 0 | 0 | 0 | 35,752 | $0.15 | 0.9 | |
| TI/LC | 0 | 0 | 0 | 71,504 | $0.30 | 1.7 | |
| Net Cash Flow | $2,965,985 | $2,854,196 | $2,737,310 | $3,250,703 | $13.64 | 78.4 | % |
| (1) | TTM reflects the trailing 12-month period ending June 30, 2022. |
| (2) | % column represents percent of Net Rental Income for all revenue lines and represents percent of Effective Gross Income for the remainder of fields. |
| (3) | Other income is underwritten to the trailing-12 actual and incBlack 1.5pt doubleludes $50,000 in gross rent for Spirit Halloween, which is a temporary tenant. |
| (4) | The underwritten economic vacancy is 10.8%. The Center PBlack 1.5pt doubleointe Plaza I Property was 89.7% physically occupied as of August 1, 2022. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 66 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 6 – Center Pointe Plaza I |
The Market. The Center Pointe Plaza I Property is located in Newark, Delaware, within the Philadelphia metropolitan statistical area (the “Philadelphia MSA”) in New Castle County, Delaware. The Philadelphia MSA economy is driven by the trade, transportation and utilities, professional and business services, education and health services, government and leisure and hospitality sectors. As of 2021, the Philadelphia MSA was home to 13 Fortune 500 companies, including but not limited to AmerisourceBergen, Comcast Corporation, DuPont, Lincoln National Corporation and Corteva. Other major employers within the Philadelphia MSA include Aramark, Crown Holdings, Universal Health Services, Campbell Soup Company and Toll Brothers.
The Center Pointe Plaza I Property is located approximately five miles east of downtown Newark and the University of Delaware. Primary access to the Center Pointe Plaza I Property is provided by State Route 4, State Route 7, State Route 58 and Interstate 95 (“I-95”). State Route 4 provides access from the north and provides access to the Atlantic City Expressway West which connects to I-95, leading to Atlantic City to the southeast. State Route 7 provides access from the south and provides access to Dover, Delaware to the south. State Route 58 provides access from the east and provides access to Wilmington, Delaware to the Northeast. I-95 provides access from the northwest and northeast and provides access to Philadelphia, Pennsylvania and Trenton, New Jersey to the Northeast and Baltimore Maryland and Washington D.C. to the southwest. The neighborhood surrounding the Center Pointe Plaza I Property is mainly comprised of commercial development. According to the appraisal, the estimated 2022 population within a one-, three- and five-mile radius of the Center Pointe Plaza I Property was 792, 72,397 and 210,283, respectively. Additionally, for the same period, the average household income within the same radii was $112,200, $96,788 and $103,056, respectively.
According to the appraisal, the Center Pointe Plaza I Property is located within the Philadelphia retail market and the South New Castle County retail submarket. As of the second quarter 2022, the Philadelphia retail market contained approximately 334.5 million square feet of retail space inventory with a vacancy rate of 4.6% and an average asking rental rate of $21.11 per square foot. As of the second quarter 2022, the Philadelphia retail market reported net negative completions of 26,551 square feet and positive net absorption of 577,350 square feet. The South New Castle County retail submarket contained approximately 17.6 million square feet of retail space with a vacancy rate of 6.4% and an average asking rental rate of $24.38 per square foot as of second quarter 2022. The South New Castle County retail submarket reported no square feet completed and positive net absorption of 68,511 square feet.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 67 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 6 – Center Pointe Plaza I |
The following table presents certain information relating to comparable retail rentals to the Center Pointe Plaza I Property:
| Comparable Retail Rental Summary(1) |
| Property Name/Location | Year Bult/Renovated | NRA (SF) | Tenant | Lease Size (SF) | Rent PSF | Commencement | Lease Term (Years) | Lease Type |
Center Pointe Plaza I 1301 - 1325 Churchmans Road Newark, DE | 1997/NAP | 238,348(2) | Various | Various(2) | $16.35(2) | Various(2) | Various(2) | Various |
| Anchor Tenants | | | | | | | | |
9900 SE Washington Street Portland, OR | NAP | NAP | Home Depot (renewal) | 134,722 | $16.08 | 2022 | 5.0 | NNN |
2600 41st Avenue Soquel, CA | NAP | NAP | Home Depot (renewal) | 96,800 | $26.00 | 2022 | 10.0 | NNN |
493 North Milwaukee Avenue Vernon Hills, IL | NAP | NAP | Home Depot (renewal) | 113,963 | $7.51 | 2019 | 5.0 | NNN |
8210-8282 Park Lane Dallas, TX | NAP | NAP | Costco | 152,035 | $8.88 | 2019 | 20.0 | NNN |
| Junior Anchor Tenants | | | | | | | | |
Eden Square SC Bear, DE | NAP | NAP | Giant LA Fitness | 64,885 34,010 | $16.24 $20.00 | 2024 2018 | 5.0 15.0 | NNN NNN |
1851 Deptford Center Road Deptford, NJ | NAP | NAP | Best Buy | 60,750 | $16.25 | 2022 | 10.0 | NNN |
East Gate Square Moorestown, NJ | NAP | NAP | Best Buy | 46,812 | $15.50 | 2021 | 8.0 | NNN |
Christiana Town Center Christiana, DE | NAP | NAP | Aldi | 20,055 | $18.00 | 2021 | 10.0 | NNN |
Center Pointe Plaza I (Not Collateral) Newark, DE | NAP | NAP | Golf Galaxy (renewal) | 15,000 | $20.00 | 2020 | 5.0 | NNN |
The Shoppes at Garden State Park Cherry Hill, NJ | NAP | NAP | Home Goods | 24,000 | $22.50 | 2020 | 10.0 | NNN |
| In-Line Tenants | | | | | | | | |
2201 Silverside Road Wilmington, DE | NAP | NAP | Confidential | 1,600 | $21.50 | 2022 | 3.0 | NNN |
Bronmar Plaza Wilmington, DE | NAP | NAP | Great Clips | 2,000 | $21.00 | 2021 | 5.0 | NNN |
Prices Corner Wilmington, DE | NAP | NAP | Tropical Smoothie Two Claws | 1,750 6,798 | $24.50 $21.00 | 2021 2021 | 10.3 10.8 | NNN NNN |
Fairfax Shopping Center Wilmington, DE | NAP | NAP | Go Health Urgent Care | 3,000 | $24.50 | 2020 | 10.0 | NNN |
Eden Square Shopping Center Bear, DE | NAP | NAP | Golden Dragon Restaurant Capriotti’s (renewal) | 1,600 1,600 | $22.00 $19.95 | 2020 2019 | 5.0 3.0 | NNN NNN |
Newtown Square Bear, DE | NAP | NAP | Family Dentistry | 3,463 | $20.00 | 2018 | 5.0 | NNN |
| Pad Rentals | | | | | | | | |
Towamencin Shopping Village Lansdale, PA | NAP | NAP | Chipotle Mattress Warehouse | 2,380 4,000 | $50.42 $30.50 | 2022 2022 | 10.0 10.0 | NNN NNN |
Collegetown Shopping Center Glassboro, NJ | NAP | NAP | Chase Bank | 3,743 | $36.07 | 2021 | 15.0 | NNN |
Eden Square SC Bear, DE | NAP | NAP | Starbucks PNC Bank | 2,500 4,324 | $38.00 $21.51 | 2021 2019 | 10.0 5.0 | NNN NNN |
Newark Shopping Center Newark, DE | NAP | NAP | Chase Bank | 4,200 | $35.71 | 2020 | 15.0 | NNN |
The Shoppes at Brinton Lake Glen Mills, PA | NAP | NAP | White Dog Café | 6,359 | $36.00 | 2020 | 10.0 | NNN |
10 South Dupont Highway Dover, DE | NAP | NAP | Red Robin | 5,231 | $26.76 | 2019 | 20.0 | NNN |
| (2) | Based on the underwritten rent roll dated August 1, 2022. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 68 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 6 – Center Pointe Plaza I |
The following table presents certain information relating to comparable retail center sales for the Center Pointe Plaza I Property:
| Comparable Sales(1) |
| Property Name/Location | Sale Date | Total NRA (SF) | Total Occupancy | Sale Price | Sale Price PSF | Adjusted Sales Price PSF |
Center Pointe Plaza I 1301 – 1325 Churchmans Road Newark, DE | NAP | 238,348(2) | 89.7%(2) | NAP | NAP | NAP |
North Dover Shopping Center 1001 North Dupont Highway Dover, DE | May-2022 | 191,973 | 97.0% | $28,750,000 | $149.76 | $149,76 |
Langhorne Plaza 1501 E Lincoln Highway Levittown, PA | Dec-2021 | 107,693 | 100.0% | $23,450,000 | $217.75 | $217.75 |
Warrington Plaza Shopping Center 644 Easton Road Warrington, PA | Dec-2021 | 87,581 | 100.0% | $22,500,000 | $256.91 | $256.91 |
Lawnside Commons 310 North White Horse Pike Lawnside, NJ | Mar-2020 | 151,076 | 100.0% | $31,550,000 | $208.84 | $208.84 |
Columbus Crossing 1851 South Columbus Boulevard Philadelphia, PA | Jul-2020 | 140,418 | 100.0% | $37,450,000 | $266.70 | $266.70 |
| (2) | Based on the underwritten rent roll dated August 1, 2022. |
The Borrower. The borrowing entity for the Center Pointe Plaza I Loan is Centercap Holding LLC, a single purpose entity with one independent director. Legal counsel to the Center Pointe Plaza I borrower delivered a non-consolidation opinion in connection with the origination of the Center Pointe Plaza I Mortgage Loan.
The Borrower Sponsor. The borrower sponsor and non-recourse carveout guarantor is Joanne M. Capano. Joanne M. Capano is the principal of JMC Properties, Inc., a privately held commercial real estate firm based in Wilmington, Delaware.
Property Management. The Center Pointe Plaza I Property is managed by JMC Property Management, Inc., an affiliate of the Center Pointe Plaza I borrower.
Escrows and Reserves. At origination, the Center Pointe Plaza I borrower was required to deposit into escrow approximately $38,006.86 for tax reserves, $41,369.16 for insurance reserves, $26,777.50 for immediate repairs, $250,000 for TI/LC obligation reserves, $367,850 for tenant improvement reserve for Boot Barn, $78,912 for rent concession reserve for Cheddars Casual Café and $110,250 for leasing commission reserve for Cheddars Casual Café.
Tax Escrows – On a monthly basis, the Center Pointe Plaza I borrower is required to escrow 1/12th of the annual estimated tax payments, which currently equates to approximately $36,197.
Insurance Escrows – On a monthly basis, the Center Pointe Plaza I borrower is required to escrow 1/12th of the estimated insurance payments, which currently equates to approximately $3,940.
Replacement Reserves – On a monthly basis, the Center Pointe Plaza I borrower is required to escrow $2,979 for replacement reserves.
TI/LC Reserves – On a monthly basis, the Center Pointe Plaza I borrower is required to escrow $5,959 for tenant improvement and leasing commissions reserves, capped at $500,000. In addition, the borrower is required to deposit in the TI/LC reserve any amounts paid to the borrower in connection with a termination, cancellation, surrender, modification, sale or other disposition of any lease (or portion of the lease) other than amounts paid for rent and other charges in respect of periods prior to the date of such termination, cancellation, surrender, modification, sale or other disposition.
Lockbox / Cash Management. The Center Pointe Plaza I Mortgage Loan is structured with a springing lockbox and springing cash management. Upon the occurrence and continuance of a Cash Management Trigger Event (as defined below), (i) the Center Pointe Plaza I borrower is required to (A) establish a lender-controlled lockbox account and, within five calendar days of the Cash Management Trigger Event, (B) instruct all tenants to deposit rents into such lockbox account,
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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| No. 6 – Center Pointe Plaza I |
(ii) with respect to any other amounts collected, the Center Pointe Plaza I borrower or the property manager is required to deposit any such amounts received into the lockbox account within one business day of receipt. Pursuant to the Center Pointe Plaza I Mortgage Loan documents, all excess funds on deposit in the cash management account (after payment of monthly amounts due under the Center Pointe Plaza I Mortgage Loan documents) are required to be applied as follows (a) if a Cash Sweep Event (as defined below) is not in effect, to the Center Pointe Plaza I borrower; and (b) if a Cash Sweep Event is in effect, to an excess cash flow account controlled by the lender, to be held by the lender as additional security for the Center Pointe Plaza I Mortgage Loan (except if a Critical Tenant Trigger Event exists, in which case sums will be deposited into a Critical Tenant reserve).
A “Cash Management Trigger Event” means the occurrence of (i) an event of default, (ii) a bankruptcy action of the Center Pointe Plaza I borrower, guarantor or property manager, (iii) a Cash Management DSCR Trigger Event (as defined below) or (iv) a Critical Tenant Trigger Event (as defined below). A Cash Management Trigger Event will end (a) with respect to the matters describe in clause (i) above, when a cure of such event of default has been accepted, or the event of default has been waived by the lender, (b) with respect to the matters described in clause (ii) above, when such bankruptcy action petition has been discharged, stayed, or dismissed within 60 days of such filing among other conditions with respect to the Center Pointe Plaza I borrower or guarantor and within 120 days with respect to the property manager or in the case of the property manager, the Center Pointe Plaza I borrower has replaced the property manager with a qualified manager acceptable to the lender, (c) with respect to matters described in clause (iii) above, the date the debt service coverage ratio based on the trailing 12-month period immediately preceding the date of such determination is greater than 1.25x for two consecutive quarters and (d) with respect to matters described in clause (iv) above, the date on which the Critical Tenant Trigger Event Cure (as defined below) occurs.
A “Cash Management DSCR Trigger Event” will occur on any date where the debt service coverage ratio, based on the trailing 12-month period immediately preceding the date of determination, is less than 1.20x.
A “Cash Sweep Event” means the occurrence of (i) an event of default, (ii) a bankruptcy action of the Center Pointe Plaza I borrower, guarantor or property manager, (iii) a Cash Sweep DSCR Trigger Event or (iv) a Critical Tenant Trigger Event. A Cash Sweep Event will end (a) with respect to the matters describe in clause (i) above, when the cure of such event of default has been accepted, or the event of default has been waived by the lender, (b) with respect to the matters describe in clause (ii) above, when such bankruptcy action petition has been discharged, stayed, or dismissed within 60 days of such filing among other conditions with respect to the Center Pointe Plaza I borrower or guarantor, or within 120 days with respect to the property manager or in the case of the property manager, the Center Pointe Plaza I borrower have replaced the property manager with a qualified manager acceptable to the lender, or with respect to matters described in clause (iii) above, the date the debt service coverage ratio based on the trailing 12-month period immediately preceding the date of such determination is greater than 1.20x for two consecutive quarters and (d) with respect to matters described in clause (iv) above, the date on which the Critical Tenant Trigger Event Cure occurs.
A “Cash Sweep DSCR Trigger Event” will occur on any date where the debt service coverage ratio, based on the trailing 12-month period immediately preceding the date of determination, is less than 1.15x.
A “Critical Tenant Trigger Event” will occur (i) if Home Depot, TJ Maxx or any other tenant occupying the spaces currently occupied by such tenants (each such tenant, a “Critical Tenant” and each related lease, a “Critical Tenant Lease”) gives notice of its intention to not extend or renew its lease or to terminate its lease or the applicable Critical Tenant Lease is otherwise terminated, (ii) on the date that is twelve months prior to the related lease expiration date if the Critical Tenant has failed to give notice of its election to renew its lease, (iii) on or prior to the date on which the Critical Tenant is required under its lease to notify the Center Pointe Plaza I borrower of its election to renew its lease, and the Critical Tenant fails to give such notice, (iv) an event of default under the Critical Tenant Lease occurs or is continuing, (v) if a bankruptcy action with respect to the Critical Tenant or guarantor of any Critical Tenant occurs, (vi) if the Critical Tenant elects to pay reduced rent (including, without limitation, percentage rent in lieu of fixed rent) pursuant to any right or remedy contained in the applicable Critical Tenant Lease, or (vii) if the Critical Tenant discontinues its normal business operations at its leased premises (other than a temporary cessation of business operations for permitted renovations or necessary repairs).
A “Critical Tenant Trigger Event Cure” will occur upon (a) with respect to clause (i), (ii) or (iii) the date that (1) the Critical Tenant Lease extension is executed and delivered to the lender by the borrower and the related tenant improvement costs, leasing commissions and other material costs and expenses have been satisfied or an amount sufficient to cover any costs and expenses as reasonably determined by the lender has been deposited into the Critical Tenant TI/LC account, or (2) a Critical Tenant Space Re-Tenanting Event (as defined below) has occurred, (b) with respect to clause (iv) above, after a
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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| Structural and Collateral Term Sheet | | BMO 2022-C3 |
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| No. 6 – Center Pointe Plaza I |
cure of the applicable event of default, (c) with respect to clause (v) above, after an affirmation that the Critical Tenant is actually paying all rents and other amounts under the lease, (d) with respect to clause (vi) above, the related Critical Tenant re-commences the payment of full unabated rent, (e) with respect to clause (vii) above, the related Critical Tenant re-commences its normal business operations at its leased premises or a Critical Tenant Space Re-tenanting Event has occurred.
A “Critical Tenant Space Re-Tenanting Event” will occur on the date each of the following conditions has been satisfied: (i) the related Critical Tenant space is leased to one or more replacement tenants for a term of at least five years and on terms and conditions that are acceptable to the lender; (ii) all tenant improvement costs, leasing commissions and other material costs and expenses relating to the re-letting of the related Critical Tenant Space have been paid in full; and (iii) the replacement tenant(s) are conducting normal business operations at the related Critical Tenant space.
Subordinate Debt. None.
Mezzanine Debt. None.
Partial Release. Not permitted.
Ground Lease. None.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 71 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 7 – Bayou City Portfolio |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 72 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 7 – Bayou City Portfolio |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 73 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 7 – Bayou City Portfolio |
| Mortgage Loan Information | | Property Information |
| Mortgage Loan Seller: | SMC | | Single Asset / Portfolio: | Portfolio |
| Original Principal Balance: | $32,250,000 | | Title: | Fee |
| Cut-off Date Principal Balance: | $32,191,295 | | Property Type – Subtype: | Multifamily – Garden |
| % of IPB: | 4.4% | | Net Rentable Area (Units): | 633 |
| Loan Purpose: | Refinance | | Location: | Various, TX |
| Borrowers: | APTOG, LLC, APTSC, LLC and APTCS, LLC | | Year Built / Renovated: | Various / Various |
| Borrower Sponsor: | Gary W. Gates, Jr. | | Occupancy: | 97.2% |
| Interest Rate: | 6.02000% | | Occupancy Date: | 7/11/2022 |
| Note Date: | 7/21/2022 | | 4th Most Recent NOI (As of): | $2,991,757 (12/31/2019) |
| Maturity Date: | 8/6/2032 | | 3rd Most Recent NOI (As of): | $2,955,769 (12/31/2020) |
| Interest-only Period: | None | | 2nd Most Recent NOI (As of): | $3,079,257 (12/31/2021) |
| Original Term: | 120 months | | Most Recent NOI (As of): | $3,135,051 (TTM 5/31/2022) |
| Original Amortization Term: | 360 months | | UW Economic Occupancy: | 91.6% |
| Amortization Type: | Amortizing Balloon | | UW Revenues: | $5,450,459 |
| Call Protection: | L(24),YM1(92),O(4) | | UW Expenses: | $2,480,066 |
| Lockbox / Cash Management: | Springing | | UW NOI: | $2,970,393 |
| Additional Debt: | No | | UW NCF: | $2,810,921 |
| Additional Debt Balance: | N/A | | Appraised Value / Per Unit: | $58,300,000 / $92,101 |
| Additional Debt Type: | N/A | | Appraisal Date: | 6/17/2022 |
| | | | | |
| | | | | |
| Escrows and Reserves(1) | | Financial Information |
| | Initial | Monthly | Initial Cap | | Cut-off Date Loan / Unit: | $50,855 |
| Taxes: | $355,900 | $44,488 | N/A | | Maturity Date Loan / Unit: | $43,239 |
| Insurance: | $109,993 | $20,845 | N/A | | Cut-off Date LTV(2): | 50.9% |
| Replacement Reserve: | $0 | $13,293 | N/A | | Maturity Date LTV(2): | 42.7% |
| Economic Holdback(2): | $2,500,000 | $0 | N/A | | UW NCF DSCR: | 1.21x |
| Deferred Maintenance: | $122,375 | $0 | N/A | | UW NOI Debt Yield(2): | 10.0% |
| | | | | | | |
| Sources and Uses |
| Sources | Proceeds | % of Total | | | Uses | Proceeds | % of Tot | al |
| Mortgage Loan | $32,250,000 | 100.0 | % | | Payoff Existing Debt | $19,012,170 | 59.0 | % |
| | | | | Return of Equity | 8,843,247 | 27.4 | |
| | | | | Reserves | 3,088,268 | 9.6 | |
| | | | | Closing Costs | 1,306,315 | 4.1 | |
| Total Sources | $32,250,000 | 100.0 | % | | Total Uses | $32,250,000 | 100.0 | % |
| (1) | For a full description of Escrows and Reserves, see “Escrows and Reserves” below. |
| (2) | At origination of the Bayou City Portfolio Mortgage Loan (as defined below), the borrowers deposited $2,500,000 into an economic holdback reserve, to be released to the borrower upon the net operating income debt yield at the Bayou City Portfolio Properties (as defined below) being at least 9.8% based on a trailing 12-month period. Notwithstanding the foregoing, no disbursement from the economic holdback reserve is permitted prior to the payment date in June 2023. Cut-off Date LTV, Maturity Date LTV and UW NOI Debt Yield calculations are based on an assumed Bayou City Portfolio Mortgage Loan Cut-off Date Balance of approximately $29,691,295, which is net of the $2,500,000 economic holdback reserve. Assuming the gross Bayou City Portfolio Mortgage Loan Cut-off Date Balance of approximately $32,191,295, the Cut-off Date LTV, Maturity Date LTV and UW NOI Debt Yield calculations are 55.2%, 46.9% and 9.2%, respectively. |
The Loan. The Bayou City Portfolio mortgage loan has an outstanding principal balance as of the Cut-off Date of $32,191,295 (the “Bayou City Portfolio Mortgage Loan”) and is secured by a first lien mortgage on the borrowers’ fee interest in three garden-style multifamily properties located in Baytown and Houston, Texas (the “Bayou City Portfolio Properties”). The Bayou City Portfolio Mortgage Loan has a 10-year term and amortizes on a 30-year schedule.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 74 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 7 – Bayou City Portfolio |
The Properties. The Bayou City Portfolio Properties are comprised of three garden-style multifamily properties built between 1974 and 1978, and subsequently renovated between 2017 and 2019.
The following table presents certain information relating to the Bayou City Portfolio Properties:
| Portfolio Summary |
| Property Name | Year Built / Renovated | Units | Occupancy % | Allocated
Cut-off Date Loan Amount (“ALA”)(1) | % of ALA | Appraised Value | % of Appraised Value | UW NOI | % of UW NOI |
| Creekside Apartments | 1978 / 2017 | 250 | 94.8% | $13,307,208 | 41.3 | % | $24,100,000 | 41.3 | % | $1,215,404 | 40.9 | % |
| Oak Glen Apartments | 1974 / 2017-2019 | 240 | 99.6% | 10,932,893 | 34.0 | | 19,800,000 | 34.0 | | 998,598 | 33.6 | |
| Sterling Crossing Apartments | 1976 / 2018 | 143 | 97.2% | 7,951,195 | 24.7 | | 14,400,000 | 24.7 | | 756,390 | 25.5 | |
| Total/Wtd. Avg. | | 633 | 97.2% | $32,191,295 | 100.0 | % | $58,300,000 | 100.0 | % | $2,970,393 | 100.0 | % |
| (1) | The Bayou City Portfolio Mortgage Loan documents do not permit the release of any of the Bayou City Portfolio Properties. |
Creekside Apartments. As of July 11, 2022, the Creekside Apartments property was 94.8% occupied. The Creekside Apartments property is located at 3120 Decker Drive, approximately 24 miles east of downtown Houston. The 12.62-acre parcel is improved with 32 two-story apartment buildings and one leasing office. The improvements are masonry construction. The Creekside Apartments property features one-, two- and three-bedroom layouts ranging in size from 650 to 1,483 square feet. Market rents range from approximately $675 to $1,050 per month, with an average market rent of approximately $800 and an average unit size of 992 square feet. Unit features include high speed internet access, washer/dryer hookup, heating, smoke detectors, dishwasher, trash disposal and balcony. Community amenities include laundry facilities, surface parking lot and a pool.
The borrower sponsor acquired the Creekside Apartments property in 2012 for a purchase price of approximately $3.0 million. Since the acquisition, the borrower sponsor has invested approximately $4.975 million in capital improvements, which include unit upgrades, roof replacement, plumbing and electrical repairs, new HVAC units, exterior siding replacement, new appliances and ceramic tile.
| Creekside Apartments Unit Mix |
| Unit Type | Collateral Units(1) | % of Collateral Units(1) | Occupied Collateral Units(1) | % of Units Occupied(1) | Total Collateral SF(1) | Average Collateral SF(1) | Market Rent Per Unit(2) | Market Rent Per SF(2) | Average Rent Per Unit(1) | Average Rent Per SF(1) |
| 1 BR / 1 BA | 28 | 11.2 | % | 27 | 96.4% | 18,200 | 650 | $675 | $1.04 | $674 | $1.04 |
| 1 BR / 1 BA | 22 | 8.8 | | 21 | 95.5% | 15,400 | 700 | $690 | $0.99 | $700 | $1.00 |
| 1 BR / 1 BA | 8 | 3.2 | | 8 | 100.0% | 6,640 | 830 | $700 | $0.84 | $711 | $0.86 |
| 1 BR / 1 BA | 16 | 6.4 | | 15 | 93.8% | 13,648 | 853 | $700 | $0.82 | $698 | $0.82 |
| 2 BR / 1 BA | 22 | 8.8 | | 22 | 100.0% | 19,800 | 900 | $735 | $0.82 | $755 | $0.84 |
| 2 BR / 1 BA | 34 | 13.6 | | 32 | 94.1% | 31,076 | 914 | $735 | $0.80 | $755 | $0.83 |
| 2 BR / 2 BA | 16 | 6.4 | | 16 | 100.0% | 14,624 | 914 | $765 | $0.84 | $791 | $0.87 |
| 2 BR / 2 BA | 18 | 7.2 | | 18 | 100.0% | 16,452 | 914 | $765 | $0.84 | $767 | $0.84 |
| 2 BR / 2 BA | 11 | 4.4 | | 10 | 90.9% | 13,629 | 1,239 | $895 | $0.72 | $949 | $0.77 |
| 2 BR / 2.5 BA TH | 6 | 2.4 | | 5 | 83.3% | 7,452 | 1,242 | $915 | $0.74 | $924 | $0.74 |
| 2 BR / 2 BA | 20 | 8.0 | | 19 | 95.0% | 25,740 | 1,287 | $980 | $0.76 | $965 | $0.75 |
| 2 BR / 2.5 BA TH | 16 | 6.4 | | 14 | 87.5% | 20,800 | 1,300 | $905 | $0.70 | $928 | $0.71 |
| 3 BR / 2 BA | 23 | 9.2 | | 21 | 91.3% | 30,015 | 1,305 | $960 | $0.74 | $957 | $0.73 |
| 3 BR / 2.5 BA TH | 4 | 1.6 | | 4 | 100.0% | 5,728 | 1,432 | $1,050 | $0.73 | $1,009 | $0.70 |
| 3 BR / 2.5 BA TH | 6 | 2.4 | | 5 | 83.3% | 8,898 | 1,483 | $1,050 | $0.71 | $1,014 | $0.68 |
| Total/Wtd. Avg. | 250 | 100.0 | % | 237 | 94.8% | 248,102 | 992 | $800 | $0.81 | $806 | $0.81 |
| (1) | As provided by the borrowers as of July 11, 2022. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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| Structural and Collateral Term Sheet | | BMO 2022-C3 |
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| No. 7 – Bayou City Portfolio |
Oak Glen Apartments. As of July 11, 2022, the Oak Glen Apartments property was 99.6% occupied. The Oak Glen Apartments property is located at 5500 Antoine Drive, approximately 12 miles northwest of downtown Houston. The 7.98-acre parcel is improved with 36 two-story apartment buildings and one two-story leasing office. The improvements are masonry construction. The Oak Glen Apartments property features efficiency, one-, two- and three-bedroom layouts ranging in size from 425 to 1,440 square feet. Market rents range from approximately $525 to $925 per month, with an average market rent of $701 and an average unit size of 868 square feet. Unit features include high speed internet access, washer/dryer hookup, heating, smoke detectors, dishwasher and trash disposal. Community amenities include laundry facilities, surface parking lot and a courtyard.
The borrower sponsor has owned the Oak Glen Apartments property for approximately 24 years. Since 2017, the borrower sponsor has invested approximately $1.3 million in capital improvements, which include unit upgrades, plumbing and electrical repairs, new HVAC units, exterior siding replacement, new appliances and ceramic tile.
| Oak Glen Apartments Unit Mix |
| Unit Type | Collateral Units(1) | % of Collateral Units(1) | Occupied Collateral Units(1) | % of Units Occupied(1) | Total Collateral SF(1) | Average Collateral SF(1) | Market Rent Per Unit(2) | Market Rent Per SF(2) | Average Rent Per Unit(1) | Average Rent Per SF(1) |
| Efficiency | 16 | 6.7 | % | 16 | 100.0% | 6,800 | 425 | $525 | $1.24 | $518 | $1.22 |
| Efficiency | 8 | 3.3 | | 8 | 100.0% | 3,904 | 488 | $530 | $1.09 | $524 | $1.07 |
| 1 BR / 1 BA | 16 | 6.7 | | 16 | 100.0% | 9,920 | 620 | $615 | $0.99 | $610 | $0.98 |
| 1 BR / 1 BA | 32 | 13.3 | | 32 | 100.0% | 20,480 | 640 | $615 | $0.96 | $609 | $0.95 |
| 1 BR / 1 BA | 4 | 1.7 | | 4 | 100.0% | 2,688 | 672 | $615 | $0.92 | $624 | $0.93 |
| 1 BR / 1 BA | 12 | 5.0 | | 12 | 100.0% | 8,640 | 720 | $615 | $0.85 | $615 | $0.85 |
| 1 BR / 1 BA TH | 4 | 1.7 | | 4 | 100.0% | 2,900 | 725 | $665 | $0.92 | $659 | $0.91 |
| 1 BR / 1 BA | 24 | 10.0 | | 24 | 100.0% | 17,664 | 736 | $620 | $0.84 | $615 | $0.84 |
| 1 BR / 1 BA | 4 | 1.7 | | 4 | 100.0% | 3,136 | 784 | $650 | $0.83 | $631 | $0.80 |
| 2 BR / 1 BA | 8 | 3.3 | | 8 | 100.0% | 6,720 | 840 | $705 | $0.84 | $668 | $0.80 |
| 2 BR / 1 BA | 8 | 3.3 | | 8 | 100.0% | 7,168 | 896 | $735 | $0.82 | $732 | $0.82 |
| 2 BR / 1 BA | 4 | 1.7 | | 4 | 100.0% | 3,840 | 960 | $745 | $0.78 | $755 | $0.79 |
| 2 BR / 2 BA | 4 | 1.7 | | 4 | 100.0% | 4,000 | 1,000 | $750 | $0.75 | $748 | $0.75 |
| 2 BR / 2 BA | 16 | 6.7 | | 16 | 100.0% | 16,320 | 1,020 | $750 | $0.74 | $757 | $0.74 |
| 2 BR / 2 BA | 12 | 5.0 | | 12 | 100.0% | 13,056 | 1,088 | $785 | $0.72 | $766 | $0.70 |
| 2 BR / 1.5 BA TH | 44 | 18.3 | | 44 | 100.0% | 50,688 | 1,152 | $810 | $0.70 | $804 | $0.70 |
| 3 BR / 2 BA | 4 | 1.7 | | 3 | 75.0% | 4,920 | 1,230 | $885 | $0.72 | $789 | $0.64 |
| 3 BR / 2 BA | 16 | 6.7 | | 16 | 100.0% | 19,712 | 1,232 | $900 | $0.73 | $883 | $0.72 |
| 3 BR / 2.5 BA TH | 4 | 1.7 | | 4 | 100.0% | 5,760 | 1,440 | $925 | $0.64 | $926 | $0.64 |
| Total/Wtd. Avg. | 240 | 100.0 | % | 239 | 99.6% | 208,316 | 868 | $701 | $0.81 | $693 | $0.80 |
| (1) | As provided by the borrowers as of July 11, 2022. |
Sterling Crossing Apartments. As of July 11, 2022, the Sterling Crossing Apartments property was 97.2% occupied. The Sterling Crossing Apartments property is located at 4503 South Kirkwood Road, approximately 16 miles west of downtown Houston. The 5.01-acre parcel is improved with nine two-story apartment buildings. The improvements are masonry construction. The Sterling Crossing Apartments property features one- and two-bedroom layouts ranging in size from 676 to 1,254 square feet. Market rents range from approximately $690 to $1,015 per month, with an average market rent of $822 and an average unit size of 948 square feet. Unit features include high speed internet access, washer/dryer hookup, heating, smoke detectors, dishwasher and trash disposal. Community amenities include laundry facilities, surface parking lot and a courtyard.
The borrower sponsor acquired the Sterling Crossing Apartments property in 2013 for a purchase price of approximately $3.76 million. Since the acquisition, the borrower sponsor has invested approximately $1.375 million in capital improvements, which include unit upgrades, plumbing and electrical repairs, new HVAC units, exterior siding replacement, new appliances and ceramic tile.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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| Structural and Collateral Term Sheet | | BMO 2022-C3 |
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| No. 7 – Bayou City Portfolio |
| Sterling Crossing Apartments Unit Mix |
| Unit Type | Collateral Units(1) | % of Collateral Units(1) | Occupied Collateral Units(1) | % of Units Occupied(1) | Total Collateral SF(1) | Average Collateral SF(1) | Market Rent Per Unit(2) | Market Rent Per SF(2) | Average Rent Per Unit(1) | Average Rent Per SF(1) |
| 1 BR / 1 BA | 21 | 14.7 | % | 21 | 100.0% | 14,196 | 676 | $690 | $1.02 | $694 | $1.03 |
| 1 BR / 1 BA | 14 | 9.8 | | 14 | 100.0% | 9,800 | 700 | $715 | $1.02 | $666 | $0.95 |
| 1 BR / 1 BA | 10 | 7.0 | | 9 | 90.0% | 7,530 | 753 | $720 | $0.96 | $718 | $0.95 |
| 2 BR / 1 BA | 52 | 36.4 | | 52 | 100.0% | 53,300 | 1,025 | $840 | $0.82 | $840 | $0.82 |
| 2 BR / 1 BA | 12 | 8.4 | | 12 | 100.0% | 12,600 | 1,050 | $860 | $0.82 | $852 | $0.81 |
| 1 BR / 1 BA | 8 | 5.6 | | 8 | 100.0% | 9,024 | 1,128 | $875 | $0.78 | $889 | $0.79 |
| 1 BR / 1 BA TH | 12 | 8.4 | | 10 | 83.3% | 12,144 | 1,012 | $900 | $0.89 | $865 | $0.85 |
| 1 BR / 1 BA | 4 | 2.8 | | 4 | 100.0% | 4,396 | 1,099 | $965 | $0.88 | $983 | $0.89 |
| 3 BR / 2.5 BA TH | 10 | 7.0 | | 9 | 90.0% | 12,540 | 1,254 | $1,015 | $0.81 | $970 | $0.77 |
| Total/Wtd. Avg. | 143 | 100.0 | % | 139 | 97.2% | 135,530 | 948 | $822 | $0.87 | $811 | $0.86 |
| (1) | As provided by the borrowers as of July 11, 2022. |
COVID-19 Update. As of July 22, 2022, the Bayou City Portfolio Properties were open and operating. As of the date of this term sheet, the Bayou City Portfolio Mortgage Loan is not subject to any forbearance, modification or debt service relief requests. The first payment date of the Bayou City Portfolio Mortgage Loan was September 6, 2022.
Environmental. According to the Phase I reports dated July 1, 2022, there was no evidence of any recognized environmental conditions at the Bayou City Portfolio Properties.
The Markets. According to the appraisal, the Creekside Apartments property is located in the Houston Area multifamily market. As of June 2022, the Houston Area multifamily market average monthly asking rent per square foot was $1.40 and vacancy was 8.6%. According to the appraisal, the Creekside Apartments property is located in the Baytown multifamily submarket. As of June 2022, the Baytown multifamily submarket average monthly asking rent per square foot was $1.20 and vacancy was 9.5%.
According to the appraisal, the estimated 2022 population within a one-, three- and five-mile radius of the Creekside Apartments property is 8,591, 58,307 and 105,046, respectively. The estimated 2022 median household income within the same radii is $60,961, $57,330 and $65,656, respectively.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 77 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
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| No. 7 – Bayou City Portfolio |
The following table presents certain information relating to comparable multifamily rental properties to the Creekside Apartments property:
| Comparable Rental Summary(1) |
| Property Address | Year Built | Occupancy | # Units | Unit Mix | Average SF per Unit | Average Rent per SF | Average Rent per Unit |
Creekside Apartments(2) 3120 Decker Drive Baytown, TX | 1978 / 2017 | 94.8% | 250 | 1BR / 1BA 1BR / 1BA 1BR / 1BA 1BR / 1BA 2BR / 1BA 2BR / 1BA 2BR / 2BA 2BR / 2BA 2BR / 2BA 2BR / 2.5BA TH 2BR / 2BA 2BR / 2.5BA TH 3BR / 2BA 3BR / 2.5BA TH 3BR / 2.5BA TH | 650 700 830 853 900 914 914 914 1,239 1,242 1,287 1,300 1,305 1,432 1,438 | $1.04 $1.00 $0.86 $0.82 $0.84 $0.83 $0.87 $0.84 $0.77 $0.74 $0.75 $0.71 $0.73 $0.70 $0.68 | $674 $700 $711 $698 $755 $755 $791 $767 $949 $924 $965 $928 $957 $1,009 $1,014 |
Avalon Bay 925 Northwood Baytown, TX | 1982 / NAV | 98.0% | 220 | 1BR / 1BA 1BR / 1BA 1BR / 1BA 2BR / 2BA 2BR / 1.5BA 2BR / 1.5BA | 654 700 622 925 887 830 | $0.94 $0.94 $0.96 $0.89 $0.90 $0.90 | $615 $655 $595 $825 $795 $745 |
Oaks of Baytown Apartments 2011 Ward Baytown, TX | 1967 / 2011 | 91.0% | 248 | 1BR / 1BA 1BR / 1BA 1BR / 1BA 2BR / 1.5BA 2BR / 1.5BA 2BR / 1.5BA 2BR / 1.5BA TH 2BR / 1.5BA 2BR / 1.5BA TH 2BR / 2BA 3BR / 2BA 3BR / 2BA | 715 773 713 1,037 1,037 1,051 1,152 979 1,172 1,192 1,428 1,293 | $0.85 $0.86 $0.97 $0.67 $0.71 $0.71 $0.76 $0.77 $0.83 $1.00 $0.84 $0.89 | $605 $665 $690 $695 $735 $750 $870 $750 $970 $1,195 $1,195 $1,150 |
Bay Oaks Apartments 1700 Bob Smith Road Baytown, TX | 1978 / 2020 | 94.0% | 146 | 1BR / 1BA 1BR / 1BA 2BR / 1BA 2BR / 2BA 3BR / 2BA 3BR / 2BA | 625 700 815 900 1,297 1,112 | $1.09 $1.13 $1.08 $1.09 $0.93 $1.08 | $680 $790 $880 $980 $1,200 $1,200 |
The Ranch at Rollingbrook 3403 Garth Road Baytown, TX | 1983 / NAV | 96.0% | 219 | 1BR / 1BA 1BR / 1BA 2BR / 2BA 2BR / 2BA | 656 504 920 866 | $1.22 $1.41 $1.06 $1.10 | $799 $710 $974 $949 |
Providence at Baytown 1711 James Bowie Drive Baytown, TX | 1969 / 2020 | 99.0% | 184 | 1BR / 1BA 1BR / 1BA 2BR / 1.5BA 2BR / 1.5BA 2BR / 1BA 2BR / 1.5BA 3BR / 2BA | 715 725 1,048 1,003 885 950 1,380 | $1.03 $1.06 $0.97 $1.01 $1.06 $1.06 $0.92 | $735 $765 $1,020 $1,015 $935 $1,010 $1,265 |
| (1) | Source: Appraisal, unless otherwise indicated. |
| (2) | As provided by the borrowers as of July 11, 2022. |
According to the appraisal, the Oak Glen Apartments property is located in the Houston Area multifamily market. As of June 2022, the Houston Area multifamily market average monthly asking rent per square foot was $1.40 and vacancy was 8.6%. According to the appraisal, the Oak Glen Apartments property is located in the Brookhollow/Northwest Crossing multifamily submarket. As of June 2022, the Brookhollow/Northwest Crossing multifamily submarket average monthly asking rent per square foot was $1.26 and vacancy was 8.8%.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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| Structural and Collateral Term Sheet | | BMO 2022-C3 |
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| No. 7 – Bayou City Portfolio |
According to the appraisal, the estimated 2022 population within a one-, three- and five-mile radius of the Oak Glen Apartments property is 21,827, 134,376 and 354,890, respectively. The estimated 2022 median household income within the same radii is $41,492, $49,672 and $56,969, respectively.
The following table presents certain information relating to comparable multifamily rental properties to the Oak Glen Apartments property:
| Comparable Rental Summary(1) |
| Property Address | Year Built | Occupancy | # Units | Unit Mix | Average SF per Unit | Average Rent per SF | Average Rent per Unit |
Oak Glen Apartments(2) 5500 Antoine Drive Houston, TX | 1974 / 2017-2019 | 99.6% | 240 | Efficiency Efficiency 1BR / 1BA 1BR / 1BA 1BR / 1BA 1BR / 1BA 1BR / 1BA TH 1BR / 1BA 1BR / 1BA 2BR / 1BA 2BR / 1BA 2BR / 1BA 2BR / 2BA 2BR / 2BA 2BR / 2BA 2BR / 1.5BA TH 3BR / 2BA 3BR / 2BA 3BR / 2.5BA TH | 425 488 620 640 672 720 725 736 784 840 896 960 1,000 1,020 1,088 1,152 1,230 1,232 1,440 | $1.22 $1.07 $0.98 $0.95 $0.93 $0.85 $0.91 $0.84 $0.80 $0.80 $0.82 $0.79 $0.75 $0.74 $0.70 $0.70 $0.64 $0.72 $0.64 | $518 $524 $610 $609 $624 $615 $659 $615 $631 $668 $732 $755 $748 $757 $766 $804 $789 $883 $926 |
Casa Rosa 555 Antoine Houston, TX | 1971 / NAV | 97.0% | 168 | 1BR / 1BA 2BR / 2BA 2BR / 1BA 3BR / 2BA | 715 1,027 917 1,179 | $0.99 $0.84 $0.86 $0.87 | $710 $865 $785 $1,025 |
Casa Grande 5700 Thousand Oaks Circle Houston, TX | 1975 / 2018 | 98.0% | 319 | 1BR / 1BA 2BR / 2BA 2BR / 2BA 2BR / 1BA 2BR / 2BA 2BR / 1BA 3BR / 2BA 3BR / 2BA 3BR / 2BA | 725 1,140 1,120 1,060 1,025 936 1,360 1,421 1,400 | $0.99 $0.79 $0.80 $0.83 $0.85 $0.88 $0.79 $0.79 $0.84 | $715 $895 $895 $875 $875 $825 $1,075 $1,125 $1,175 |
Diamond Ridge 6407 Antoine Drive Houston, TX | 1982 / 2018 | 96.0% | 500 | 1BR / 1BA Den 1BR / 1BA 1BR / 1BA 1BR / 1BA 2BR / 1.5BA 2BR / 2BA 3BR / 2BA | 850 735 680 535 975 1,045 1,190 | $1.03 $1.07 $1.13 $1.36 $1.04 $1.07 $1.04 | $875 $790 $765 $725 $1,015 $1,115 $1,235 |
Aspen 6150 West Tidwell Houston, TX | 1973 / 2022 | 93.0% | 209 | 1BR / 1BA 1BR / 1BA 1BR / 1BA 2BR / 1.5BA 2BR / 1.5BA 2BR / 2BA | 736 648 723 1,296 1,134 995 | $1.18 $1.21 $1.21 $0.89 $1.00 $1.09 | $865 $785 $875 $1,150 $1,130 $1,085 |
| (1) | Source: Appraisal, unless otherwise indicated. |
| (2) | As provided by the borrowers as of July 11, 2022. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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| Structural and Collateral Term Sheet | | BMO 2022-C3 |
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| No. 7 – Bayou City Portfolio |
| Comparable Rental Summary (cont’d)(1) |
| Property Address | Year Built | Occupancy | # Units | Unit Mix | Average SF per Unit | Average Rent per SF | Average Rent per Unit |
Oak Glen Apartments(2) 5500 Antoine Drive Houston, TX | 1974 / 2017-2019 | 99.6% | 240 | Efficiency Efficiency 1BR / 1BA 1BR / 1BA 1BR / 1BA 1BR / 1BA 1BR / 1BA TH 1BR / 1BA 1BR / 1BA 2BR / 1BA 2BR / 1BA 2BR / 1BA 2BR / 2BA 2BR / 2BA 2BR / 2BA 2BR / 1.5BA TH 3BR / 2BA 3BR / 2BA 3BR / 2.5BA TH | 425 488 620 640 672 720 725 736 784 840 896 960 1,000 1,020 1,088 1,152 1,230 1,232 1,440 | $1.22 $1.07 $0.98 $0.95 $0.93 $0.85 $0.91 $0.84 $0.80 $0.80 $0.82 $0.79 $0.75 $0.74 $0.70 $0.70 $0.64 $0.72 $0.64 | $518 $524 $610 $609 $624 $615 $659 $615 $631 $668 $732 $755 $748 $757 $766 $804 $789 $883 $926 |
Reserve at White Oak 6240 Antoine Drive Houston, TX | 1973 / 2011 | 97.0% | 339 | 1BR / 1BA 1BR / 1BA 1BR / 1BA 1BR / 1BA 2BR / 1.5BA 2BR / 2BA 2BR / 1BA 2BR / 1BA 2BR / 1BA 3BR / 2BA | 846 822 742 656 1,331 1,200 1,088 1,024 890 1,484 | $0.99 $1.02 $1.07 $1.21 $0.86 $0.88 $0.90 $1.01 $1.10 $0.91 | $840 $835 $795 $795 $1,150 $1,050 $980 $1,035 $975 $1,350 |
Kingswood Village 3233 Magnum Houston, TX | 1970 / 2017 | 94.0% | 392 | 1BR / 1BA 1BR / 1BA 1BR / 1BA 2BR / 1.5BA 2BR / 1.5BA 2BR / 1.5BA 2BR / 2BA 2BR / 2BA | 680 650 755 1,156 950 955 975 975 | $1.09 $1.11 $1.13 $0.94 $1.01 $1.02 $1.03 $1.09 | $740 $719 $850 $1,090 $960 $975 $1,000 $1,065 |
| (1) | Source: Appraisal, unless otherwise indicated. |
| (2) | As provided by the borrowers as of July 11, 2022. |
According to the appraisal, the Sterling Crossing Apartments property is located in the Houston Area multifamily market. As of June 2022, the Houston Area multifamily market average monthly asking rent per square foot was $1.40 and vacancy was 8.6%. According to the appraisal, the Sterling Crossing Apartments property is located in the Alief multifamily submarket. As of June 2022, the Alief multifamily submarket average monthly asking rent per square foot was $1.17 and vacancy was 7.1%.
According to the appraisal, the estimated 2022 population within a one-, three- and five-mile radius of the Sterling Crossing Apartments property is 19,223, 234,028 and 538,791, respectively. The estimated 2022 median household income within the same radii is $46,429, $46,564 and $53,854, respectively.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 7 – Bayou City Portfolio |
The following table presents certain information relating to comparable multifamily rental properties to the Sterling Crossing Apartments property:
| Comparable Rental Summary(1) |
| Property Address | Year Built | Occupancy | # Units | Unit Mix | Average SF per Unit | Average Rent per SF | Average Rent per Unit |
Sterling Crossing Apartments(2) 4503 South Kirkwood Road Houston, TX | 1976 / 2018 | 97.2% | 143 | 1BR / 1BA 1BR / 1BA 1BR / 1BA 2BR / 1BA 2BR / 1BA 2BR / 1BA 2BR / 1.5BA 2BR / 2BA 2BR / 2BA | 676 700 753 1,025 1,050 1,128 1,012 1,099 1,254 | $1.03 $0.95 $0.95 $0.82 $0.81 $0.79 $0.85 $0.89 $0.77 | $694 $666 $718 $840 $852 $889 $865 $983 $970 |
Leawood Plaza Apartments 11402 Beechnut Street Houston, TX | 1970 / NAV | 97.0% | 79 | 1BR / 1BA 2BR / 1BA 2BR / 2BA | 663 875 900 | $0.94 $0.87 $0.87 | $625 $760 $785 |
Claridge 10027 Spice Lane Houston, TX | 1983 / 2008 | 97.0% | 173 | 2BR / 2.5BA 2BR / 2BA 2BR / 2BA 2BR / 2BA 2BR / 2BA 2BR / 1BA | 1,550 1,335 1,235 1,135 1,096 960 | $0.82 $0.87 $0.91 $0.93 $0.94 $1.02 | $1,275 $1,165 $1,130 $1,060 $1,035 $980 |
Glenwood Apartments 9255 West Sam Houston Parkway Houston, TX | 1981 / NAV | 97.0% | 60 | 1BR / 1.5BA 1BR / 1BA 2BR / 2.5BA 2BR / 2BA | 1,052 750 1,300 1,140 | $0.86 $1.07 $0.86 $0.89 | $907 $805 $1,121 $1,009 |
Whispering Oaks 10010 Greenfork Drive Houston, TX | 1978 / 2016 | 96.0% | 180 | 1BR / 1BA 1BR / 1BA 2BR / 1BA | 602 644 812 | $0.92 $0.95 $0.90 | $555 $610 $730 |
SunBlossom Woods 4545 Cook Road Houston, TX | 1983 / NAV | 97.0% | 200 | 2BR / 2BA Loft TH 2BR / 2BA Loft TH 2BR / 2BA 2BR / 2BA 2BR / 1BA | 1,178 1,160 970 850 816 | $0.94 $0.96 $1.14 $1.23 $1.24 | $1,113 $1,113 $1,104 $1,043 $1,011 |
Alief Square 7500 Cook Road Houston, TX | 1970 / NAV | 96.0% | 240 | 1BR / 1BA 2BR / 1BA 2BR / 2BA | 700 900 1,000 | $1.21 $1.00 $1.00 | $850 $900 $1,000 |
| (1) | Source: Appraisal, unless otherwise indicated. |
| (2) | As provided by the borrowers as of July 11, 2022. |
The following table presents certain information relating to the historical and current occupancy of the Bayou City Portfolio Properties:
| Historical and Current Occupancy(1) |
| 2019 | 2020 | 2021 | Current(2) |
| 96.2% | 95.9% | 95.4% | 97.2% |
| (1) | Historical occupancy is as of December 31 of each respective year. |
| (2) | Current Occupancy is as of July 11, 2022. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 81 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 7 – Bayou City Portfolio |
| Operating History and Underwritten Net Cash Flow |
| | 2019 | 2020 | 2021 | TTM(1) | Underwritten | Per Unit | %(2) |
| Gross Potential Rent | $4,911,164 | $5,038,720 | $5,207,121 | $5,271,277 | $5,818,320 | $9,192 | 100.0 | % |
| Net Rental Income | $4,911,164 | $5,038,720 | $5,207,121 | $5,271,277 | $5,818,320 | $9,192 | 100.0 | % |
| (Vacancy/Credit Loss) | 0 | 0 | 0 | 0 | (489,229) | (773) | (8.4 | %) |
| Other Income | 117,258 | 66,202 | 96,510 | 121,368 | 121,368 | 192 | 2.1 | % |
| Effective Gross Income | $5,028,422 | $5,104,922 | $5,303,631 | $5,392,645 | $5,450,459 | $8,611 | 93.7 | % |
| | | | | | | | |
| Total Expenses | $2,036,665 | $2,149,153 | $2,224,374 | $2,257,594 | $2,480,066 | $3,918 | 45.5 | % |
| | | | | | | | |
| Net Operating Income | $2,991,757 | $2,955,769 | $3,079,257 | $3,135,051 | $2,970,393 | $4,693 | 54.5 | % |
| | | | | | | | |
| Total TI/LC, Capex/RR | 0 | 0 | 0 | 0 | 159,472 | 252 | 2.9 | % |
| | | | | | | | |
| Net Cash Flow | $2,991,757 | $2,955,769 | $3,079,257 | $3,135,051 | $2,810,921 | $4,441 | 51.6 | % |
| (1) | TTM reflects the trailing 12 months ending May 31, 2022. |
| (2) | % column represents percent of Gross Potential Rent for revenue fields and represents percent of Effective Gross Income for the remainder of fields. |
The Borrowers. The borrowers are APTOG, LLC, APTSC, LLC and APTCS, LLC, each a Delaware limited liability company and special purpose entity with one independent director for each borrower entity. Legal counsel to the borrowers provided a non-consolidation opinion in connection with the origination of the Bayou City Portfolio Mortgage Loan.
The Borrower Sponsor. The borrower sponsor and guarantor is Gary W. Gates, Jr. Mr. Gates owns and manages 46 multifamily properties totaling approximately 9,700 units primarily in the Houston, Texas area.
Additionally, the borrowers and the borrower sponsor are personally liable for a portion of the Bayou City Portfolio Mortgage Loan in an amount equal to 20% of the original principal balance of Bayou City Portfolio Mortgage Loan ($6,450,000).
Property Management. The Bayou City Portfolio Properties are managed by Gatesco, Inc., an affiliate of the borrowers.
Escrows and Reserves. At origination, the borrowers were required to deposit into escrow (i) approximately $355,900 for real estate taxes, (ii) approximately $109,993 for insurance premiums, (iii) $122,375 for deferred maintenance and (iv) $2,500,000 for an economic holdback.
Tax Escrows – On a monthly basis, the borrowers were required to escrow 1/12th of the annual estimated tax payments, which currently equates to approximately $44,488.
Insurance Escrows – On a monthly basis, the borrowers were required to escrow 1/12th of the annual estimated insurance payments, which currently equates to approximately $20,845.
Replacement Reserves – On a monthly basis, the borrowers were required to escrow $13,293 for replacement reserves (approximately $252 per unit annually).
Economic Holdback – At any point from and after June 6, 2023, provided (i) no Bayou City Portfolio Sweep Event Period (as defined below) has occurred and is continuing, and (ii) the Bayou City Portfolio Properties have achieved a debt yield of at least 9.8% based on the trailing 12 months, as determined by the lender, the lender will direct the servicer to release the economic performance reserve funds to the borrowers.
Lockbox / Cash Management. The Bayou City Portfolio Mortgage Loan is structured with a springing lockbox and springing cash management. The Bayou City Portfolio Mortgage Loan requires that during the continuance of a Bayou City Portfolio Sweep Event Period, the borrowers or property managers, as applicable, direct tenants to pay all rents directly into the lockbox account. Upon the occurrence and during the continuance of a Bayou City Portfolio Sweep Event Period, all funds in the lockbox account are required to be swept daily to a cash management account under the control of the lender to be applied and disbursed in accordance with the Bayou City Portfolio Mortgage Loan documents, and all excess cash flow funds remaining in the cash management account after the application of such funds in accordance with the Bayou City Portfolio Mortgage Loan documents are required to be held by the lender in an excess cash flow reserve account as additional collateral for the Bayou City Portfolio Mortgage Loan. To the extent that no Bayou City Portfolio Sweep Event Period is continuing, all excess cash flow funds are required to be disbursed to the borrowers.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 82 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 7 – Bayou City Portfolio |
A “Bayou City Portfolio Sweep Event Period” will commence upon the earliest of the following: (i) the occurrence of an event of default under the Bayou City Portfolio Mortgage Loan documents or (ii) the date on which the debt service coverage ratio is less than 1.15x based on the trailing 12 months.
A Bayou City Portfolio Sweep Event Period will end: (a) with regard to clause (i), upon the cure of such event of default and the lender’s acceptance of such cure in its sole and absolute discretion and (b) with regard to clause (ii), upon the debt service coverage ratio based on the trailing 12-month period being at least 1.20x for two consecutive calendar quarters.
Subordinate Debt. None.
Mezzanine Debt. None.
Partial Release. Not permitted.
Ground Lease. None.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 83 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 8 – 469 7th Avenue |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 84 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 8 – 469 7th Avenue |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 85 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 8 – 469 7th Avenue |
| Mortgage Loan Information | | Property Information |
| Mortgage Loan Seller: | UBS AG | | Single Asset / Portfolio: | Single Asset |
| Original Principal Balance(1): | $30,000,000 | | Title: | Fee |
| Cut-off Date Principal Balance(1): | $30,000,000 | | Property Type – Subtype: | Office – CBD |
| % of IPB: | 4.1% | | Net Rentable Area (SF): | 269,233 |
| Loan Purpose: | Refinance | | Location: | New York, NY |
| Borrower: | 469 Holdings LLC | | Year Built / Renovated: | 1921 / 2012 |
| Borrower Sponsor: | Martin Meyer | | Occupancy: | 87.4% |
| Interest Rate: | 6.03000% | | Occupancy Date: | 6/23/2022 |
| Note Date: | 8/30/2022 | | 4th Most Recent NOI (As of): | $10,675,574 (12/31/2019) |
| Maturity Date: | 9/6/2032 | | 3rd Most Recent NOI (As of): | $10,851,545 (12/31/2020) |
| Interest-only Period: | 120 months | | 2nd Most Recent NOI (As of)(3): | $8,788,527 (12/31/2021) |
| Original Term: | 120 months | | Most Recent NOI (As of)(3): | $9,060,785 (TTM 5/31/2022) |
| Original Amortization Term: | None | | UW Economic Occupancy: | 87.5% |
| Amortization Type: | Interest Only | | UW Revenues: | $15,659,792 |
| Call Protection(2): | L(25),D(89),O(6) | | UW Expenses: | $6,447,392 |
| Lockbox / Cash Management: | Hard / Springing | | UW NOI(3): | $9,212,401 |
| Additional Debt(1): | Yes | | UW NCF: | $8,459,229 |
| Additional Debt Balance(1): | $68,000,000 | | Appraised Value / Per SF: | $187,000,000 / $695 |
| Additional Debt Type(1): | Pari Passu | | Appraisal Date: | 7/1/2022 |
| | | | | |
| Escrows and Reserves(4) | | Financial Information(1) |
| | Initial | Monthly | Initial Cap | | Cut-off Date Loan / SF: | $364 |
| Taxes: | $1,080,225 | $270,056 | N/A | | Maturity Date Loan / SF: | $364 |
| Insurance: | $0 | Springing | N/A | | Cut-off Date LTV: | 52.4% |
| Replacement Reserves: | $0 | $4,487 | $100,000 | | Maturity Date LTV: | 52.4% |
| TI / LC Reserve: | $0 | $22,436 | $1,346,165 | | UW NCF DSCR: | 1.41x |
| Specified Tenant Reserve: | $0 | Springing | $11,800,000 | | UW NOI Debt Yield: | 9.4% |
| | | | | | | |
| Sources and Uses |
| Sources | Proceeds | % of Total | | Uses | Proceeds | % of Total |
| Whole Loan | $98,000,000 | 96.0 | % | | Loan Payoff | $99,766,998 | 97.7 | % |
| Sponsor Equity | 4,085,912 | 4.0 | | | Closing Costs | 1,238,689 | 1.2 | |
| | | | | Upfront Reserves | 1,080,225 | 1.1 | |
| Total Sources | $102,085,912 | 100.0 | % | | Total Uses | $102,085,912 | 100.0 | % |
| (1) | The 469 7th Avenue Mortgage Loan (as defined below) is part of a whole loan evidenced by six pari passu notes with an aggregate outstanding principal balance as of the Cut-off Date of $98.0 million (the “469 7th Avenue Whole Loan”). The financial information in the chart above reflects the Cut-off Date Balance of the 469 7th Avenue Whole Loan. |
| (2) | Defeasance of the 469 7th Avenue Whole Loan is permitted at any time after the earlier to occur of (a) the end of the two-year period commencing on the closing date of the securitization of the last promissory note representing a portion of the 469 7th Avenue Whole Loan to be securitized and (b) August 30, 2026. The assumed defeasance lockout period of 25 payments is based on the anticipated closing date of the BMO 2022-C3 securitization trust in October 2022. The actual lockout period may be longer. |
| (3) | UW NOI is greater than Most Recent NOI and 2nd Most Recent NOI due in part to approximately $849,437 comprised of (i) straight-line averaging rent over the lease term for investment grade tenants, The City of New York and TD Bank, N.A., plus (ii) contractual rent steps through August 1, 2023. |
| (4) | For a full description of Escrows and Reserves, please refer to “Escrows and Reserves” below. |
The Loan. The 469 7th Avenue mortgage loan (the “469 7th Avenue Mortgage Loan”) is part of a fixed rate whole loan secured by the borrower’s fee interest in a 269,233 square foot office property located in New York, New York (the “469 7th Avenue Property”). The 469 7th Avenue Whole Loan was co-originated by UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (“UBS AG”) and Citi Real Estate Funding Inc. (“CREFI”). The 469 7th Avenue Whole Loan consists of six pari passu notes and accrues at an interest rate of 6.03000% per annum. The 469 7th Avenue Whole Loan has a 10-year term, is interest-only for the full term of the loan and accrues interest on an Actual/360 basis. The 469 7th Avenue Mortgage Loan is evidenced by the non-controlling Note A-2, with an outstanding principal balance as of the Cut-off Date of $30,000,000. The remaining notes are currently held by UBS AG and CREFI and are expected to be contributed to one or more future securitization trust(s). The 469 7th Avenue Whole Loan will be serviced pursuant to the pooling and servicing agreement for the BMO 2022-C3 securitization trust until the controlling Note A-1 is
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 86 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 8 – 469 7th Avenue |
securitized, whereupon the 469 7th Avenue Whole Loan will be serviced pursuant to the pooling and servicing agreement for such future securitization trust. See “Description of the Mortgage Pool—The Whole Loans—The Serviced Pari Passu Whole Loans” and “Pooling and Servicing Agreement” in the Preliminary Prospectus.
| Whole Loan Summary |
| Note | Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece |
| A-1 | $20,000,000 | $20,000,000 | CREFI(1) | Yes |
| A-2 | $30,000,000 | $30,000,000 | BMO 2022-C3 | No |
| A-3 | $20,000,000 | $20,000,000 | CREFI(1) | No |
| A-4 | $14,000,000 | $14,000,000 | UBS AG(1) | No |
| A-5 | $9,000,000 | $9,000,000 | CREFI(1) | No |
| A-6 | $5,000,000 | $5,000,000 | UBS AG(1) | No |
| Whole Loan | $98,000,000 | $98,000,000 | | |
| (1) | The subject notes are expected to be contributed to one or more future securitization trust(s). |
The Property. The 469 7th Avenue Property is a 16-story office building with a total of 269,233 square feet, which consists of 255,800 square feet of office space, 12,588 square feet of retail space and 845 square feet of storage space, located on the southeast corner of West 36th Street and 7th Avenue in New York, New York. The 469 7th Avenue Property, which sits on an approximately 0.3-acre parcel of land, was built in 1921 and renovated in 2012. The renovation featured a newly restored façade, new elevator cabs, and window replacement throughout the entire building. The 469 7th Avenue Property features an average floor plate size of 17,000 square feet, 24-hour controlled access, lobby concierge service, eight-passenger elevators, on-site property management, and an on-site conferencing facility. The 469 7th Avenue Property features 99 feet of frontage on 7th Avenue and 140 feet of frontage along West 36th Street. Two of the tenants (or their parent entity), collectively comprising 26.7% NRA and 34.4% of underwritten base rent, are investment-grade rated. As of June 23, 2022, the 469 7th Avenue Property was 87.4% leased to nine office tenants, four retail tenants and one storage tenant. The retail space within the 469 7th Avenue Property is currently 100.0% leased to TD Bank, N.A. (5,000 square feet), Shindo USA, Inc. (3,300 square feet), GFG 7th Avenue, LLC (2,288 square feet) and The City of New York (2,000 square feet), which collectively account for 4.7% of NRA.
COVID-19 Update. As of September 1, 2022, the 469 7th Avenue Property is open and operational and there were no outstanding rent relief requests. Severud Associates Consulting Engineers, P.C., EONY LLC and Penn Station Chiropractic LLC have received ongoing rent reductions due to the pandemic. The lenders underwrote the reduced rent. The first payment date of the 469 7th Avenue Mortgage Loan is October 6, 2022. See “Risk Factors—Special Risks—The Coronavirus Pandemic Has Adversely Affected the Global Economy and May Adversely Affect the Performance of the Mortgage Loans” in the Preliminary Prospectus.
Major Tenants. The three largest tenants based on underwritten base rent are The City of New York, In Touch Group, LLC (“In Touch Group”) and E-Lo Sportswear, LLC (“E-Lo Sportswear”).
The City of New York (67,000 square feet; 24.9% of NRA; 26.2% of underwritten base rent). The City of New York (rated Aa2/AA/AA- by Moody’s/S&P/Fitch) has been at the 469 7th Avenue Property since 2014 and currently occupies 67,000 square feet across the ground floor (2,000 square feet), second floor (17,000 square feet), third floor (17,000 square feet), fourth floor (17,000 square feet) and part of the sixth floor (14,000 square feet). The City of New York’s lease expires on October 14, 2029 and has one, 10-year renewal option. The City of New York may terminate its lease for the entire premises, the sixth floor or the fourth and sixth floors any time after October 15, 2024 upon at least 12 months’ notice and payment of a termination fee in an amount equal to the sum of (i) the tenant work costs based on a straight-line amortization over the first 15 years of the lease term and (ii) the tenant broker fee based on a straight-line amortization over the first 15 years of the lease term. The 469 7th Avenue Property is being utilized by The New York City Police Department.
In Touch Group (51,000 square feet; 18.9% of NRA; 21.7% of underwritten base rent). In Touch Group is a privately held full-service agency network, providing creative and media services, enterprise solutions and data analytics globally through ten affiliates in eight offices, collectively employing more than 1,400 people. In Touch Group was acquired in December 2021 by Eversana Life Science Services, LLC, a provider of global services to the life sciences industry serving more than 500 organizations, including start ups and established pharmaceutical companies. In Touch Group has been at the 469 7th Avenue Property since 2015 and leases the seventh floor (which is not fully utilized), eighth floor and tenth floor (each 17,000 square feet). In Touch Group’s lease expires on September 30, 2031. In Touch Group may terminate its lease for all three floors on September 30, 2028 upon at least 15 months’ notice, without payment of any termination fee.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 87 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 8 – 469 7th Avenue |
E-Lo Sportswear (34,000 square feet; 12.6% of NRA; 14.6% of underwritten base rent). E-Lo Sportswear is a multi-category fashion house, which manufactures, designs and markets to a consumer base throughout the United States. E-Lo Sportswear has been at the 469 7th Avenue Property since 2017 and currently occupies the 15th and 16th floors (each 17,000 square feet). E-Lo Sportswear’s lease expires on August 31, 2027. E-Lo Sportswear has no renewal options and no termination options.
Environmental. According to a Phase I environmental assessment dated June 29, 2022, there was no evidence of any recognized environmental conditions at the 469 7th Avenue Property.
The following table presents certain information relating to the historical and current occupancy of the 469 7th Avenue Property:
| Historical and Current Occupancy(1) |
| 2019 | 2020 | 2021 | Current(2) |
| 99.3% | 99.3% | 93.8% | 87.4% |
| (1) | Historical Occupancies are as of December 31 of each respective year. |
| (2) | Current Occupancy is as of June 23, 2022. |
The following table presents certain information relating to the largest tenants based on underwritten base rent of the 469 7th Avenue Property:
| Top Tenant Summary(1) |
| Tenant | Ratings Moody’s/S&P/Fitch(2) | Net Rentable Area (SF) | % of
Total
NRA | UW Base Rent PSF(3) | UW Base Rent(3) | % of Total UW Base Rent(3) | Lease Expiration Date |
| The City of New York(4)(5) | Aa2/AA/AA- | 67,000 | 24.9 | % | $53.43 | $3,579,888 | 26.2 | % | 10/14/2029 |
| In Touch Group(6) | NR/NR/NR | 51,000 | 18.9 | | $58.31 | 2,973,690 | 21.7 | | 9/30/2031 |
| E-Lo Sportswear | NR/NR/NR | 34,000 | 12.6 | | $58.83 | 2,000,330 | 14.6 | | 8/31/2027 |
| Situation Marketing, LLC | NR/NR/NR | 17,000 | 6.3 | | $64.90 | 1,103,305 | 8.1 | | 5/31/2026 |
| Severud Associates Consulting Engineers, P.C. | NR/NR/NR | 17,000 | 6.3 | | $53.16 | 903,751 | 6.6 | | 12/31/2032 |
| Eony, LLC | NR/NR/NR | 17,000 | 6.3 | | $35.00 | 595,000 | 4.4 | | 9/30/2029 |
| Benchmark Builders, LLC | NR/NR/NR | 14,300 | 5.3 | | $44.97 | 643,134 | 4.7 | | 7/31/2031 |
| TD Bank, N.A.(7) | Aa2/NR/NR | 5,000 | 1.9 | | $226.32 | 1,131,583 | 8.3 | | 2/28/2030 |
| Penn Station Chiropractic LLC | NR/NR/NR | 3,500 | 1.3 | | $34.28 | 119,976 | 0.9 | | 8/31/2028 |
| Shindo USA, Inc.(8) | NR/NR/NR | 3,300 | 1.2 | | $68.52 | 226,116 | 1.7 | | 5/31/2031 |
| Top Tenants | | 229,100 | 85.1 | % | $57.95 | $13,276,774 | 97.1 | % | |
| Remaining Tenants | | 6,133 | 2.3 | | $65.28 | 400,354 | 2.9 | | |
| Occupied Collateral Total / Wtd. Avg. | 235,233 | 87.4 | % | $58.14 | $13,677,128 | 100.0 | % | |
| Vacant Space | | 34,000 | 12.6 | | | | | |
| Collateral Total | | 269,233 | 100.0 | % | | | | |
| (1) | Based on underwritten rent roll dated June 23, 2022. |
| (2) | In certain instances, ratings provided are those of the parent company of the entity shown, whether or not the parent company guarantees the lease. |
| (3) | UW Base Rent, UW Base Rent PSF and % of Total UW Base Rent are inclusive of approximately $849,437 comprised of (i) straight-line averaging rent over the lease term for investment grade tenants, The City of New York and TD Bank, N.A., plus (ii) contractual rent steps through August 1, 2023. |
| (4) | The City of New York may terminate its lease for the entire premises, the sixth floor or the fourth and sixth floors any time after October 15, 2024 upon at least 12 months’ notice and payment of a termination fee in an amount equal to the sum of (i) the tenant work costs based on a straight-line amortization over the first 15 years of the lease term and (ii) the tenant broker fee based on a straight-line amortization over the first 15 years of the lease term. |
| (5) | The City of New York occupies 2,000 square feet of retail space on the ground floor, representing 15.9% of the retail space at the 469 7th Avenue Property. |
| (6) | In Touch Group may terminate its lease for all three floors on September 30, 2028 upon at least 15 months’ notice and no termination fee. In Touch Group is not fully utilizing its seventh floor space. |
| (7) | TD Bank, N.A. occupies 39.7% of the ground floor retail space. |
| (8) | Shindo USA, Inc. occupies 26.2% of the ground floor retail space. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 88 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 8 – 469 7th Avenue |
The following table presents certain information relating to the tenant lease expirations of the 469 7th Avenue Property:
| Lease Rollover Schedule(1)(2) |
| Year | Number of Leases Expiring | NRA
Expiring | % of NRA
Expiring | UW Base
Rent
Expiring(3) | % of UW
Base Rent Expiring(3) | Cumulative
Net Rentable Area Expiring | Cumulative
% of NRA Expiring | Cumulative UW Base Rent Expiring(3) | Cumulative% of UW Base Rent Expiring(3) |
| Vacant | NAP | 34,000 | 12.6 | % | NAP | NA | P | 34,000 | 12.6% | NAP | NAP |
| 2022 & MTM | 1 | 845 | 0.3 | | $15,000 | 0.1 | % | 34,845 | 12.9% | $15,000 | 0.1% |
| 2023 | 0 | 0 | 0.0 | | 0 | 0.0 | | 34845 | 12.9% | $15,000 | 0.1% |
| 2024 | 0 | 0 | 0.0 | | 0 | 0.0 | | 34,845 | 12.9% | $15,000 | 0.1% |
| 2025 | 0 | 0 | 0.0 | | 0 | 0.0 | | 34,845 | 12.9% | $15,000 | 0.1% |
| 2026 | 3 | 17,000 | 6.3 | | 1,103,305 | 8.1 | | 51,845 | 19.3% | $1,118,305 | 8.2% |
| 2027 | 3 | 37,000 | 13.7 | | 2,194,722 | 16.0 | | 88,845 | 33.0% | $3,313,028 | 24.2% |
| 2028 | 1 | 3,500 | 1.3 | | 119,976 | 0.9 | | 92,345 | 34.3% | $3,433,004 | 25.1% |
| 2029 | 6 | 84,000 | 31.2 | | 4,174,888 | 30.5 | | 176,345 | 65.5% | $7,607,892 | 55.6% |
| 2030 | 2 | 7,288 | 2.7 | | 1,322,545 | 9.7 | | 183,633 | 68.2% | $8,930,437 | 65.3% |
| 2031 | 5 | 68,600 | 25.5 | | 3,842,940 | 28.1 | | 252,233 | 93.7% | $12,773,377 | 93.4% |
| 2032 | 1 | 17,000 | 6.3 | | 903,751 | 6.6 | | 269,233 | 100.0% | $13,677,128 | 100.0% |
| 2033 & Beyond | 0 | 0 | 0.0 | | 0 | 0.0 | | 269,233 | 100.0% | $13,677,128 | 100.0% |
| Total | 22 | 269,233 | 100.0 | % | $13,677,128 | 100.0 | % | | | | |
| (1) | Based on the underwritten rent roll dated June 23, 2022. |
| (2) | Certain leases may have termination options that are exercisable prior to the originally stated expiration date of the lease and that are not considered in this Lease Rollover Schedule. |
| (3) | UW Base Rent Expiring, % of UW Base Rent Expiring, Cumulative UW Base Rent Expiring and Cumulative % of UW Base Rent Expiring are inclusive of approximately $849,437 comprised of (i) straight-line rent averaging over the lease term for investment grade tenants, The City of New York and TD Bank, N.A., plus (ii) contractual rent steps through August 1, 2023. |
The following table presents certain information relating to the underwritten cash flows of the 469 7th Avenue Property:
| Operating History and Underwritten Net Cash Flow(1) |
| | 2019 | 2020 | 2021 | TTM | Underwritten | Per
Square Foot | %(2) |
| Base Rent | $14,334,178 | $14,449,534 | $12,556,145 | $12,879,163 | $12,827,691 | $47.65 | | 78.4 | % |
| Rent Steps(3) | 0 | 0 | 0 | 0 | 849,437 | 3.16 | | 5.2 | |
| Vacant Income | 0 | 0 | 0 | 0 | 2,040,000 | 7.58 | | 12.5 | |
| Gross Potential Rent | $14,334,178 | $14,449,534 | $12,556,145 | $12,879,163 | $15,717,128 | $58.38 | | 96.1 | % |
| Total Reimbursements | 905,083 | 1,090,191 | 945,331 | 550,642 | 644,099 | 2.39 | | 3.9 | |
| Net Rental Income | $15,239,261 | $15,539,725 | $13,501,476 | $13,429,805 | $16,361,227 | $60.77 | | 100.0 | % |
| Vacancy | 0 | 0 | 0 | 0 | (2,040,000) | (7.58 | ) | (12.5 | ) |
| Other Income(4) | 1,422,281 | 1,440,573 | 1,365,072 | 1,349,467 | 1,338,565 | 4.97 | | 8.2 | |
| Effective Gross Income | $16,661,542 | $16,980,298 | $14,866,548 | $14,779,272 | $15,659,792 | $58.16 | | 95.7 | % |
| Total Expenses | $5,985,968 | $6,128,753 | $6,078,021 | $5,718,487 | $6,447,392 | $23.95 | | 41.2 | % |
| Net Operating Income(5) | $10,675,574 | $10,851,545 | $8,788,527 | $9,060,785 | $9,212,401 | $34.22 | | 58.8 | % |
| Cap Ex, Total TI / LC | 0 | 0 | 0 | 0 | 753,172 | 2.80 | | 4.8 | |
| Net Cash Flow | $10,675,574 | $10,851,545 | $8,788,527 | $9,060,785 | $8,459,229 | $31.42 | | 54.0 | % |
| (1) | Based on the underwritten rent roll dated June 23, 2022. |
| (2) | % column represents percent of Net Rental Income for all revenue lines and represents percent of Effective Gross Income for the remainder of the fields. |
| (3) | Rent Steps include approximately $849,437 comprised of (i) straight-line rent averaging for investment grade tenants, The City of New York and TD Bank, N.A., plus (ii) contractual rent steps through August 1, 2023. |
| (4) | Other Income includes electricity reimbursements, cleaning reimbursements and miscellaneous income. |
| (5) | Underwritten Net Operating Income is greater than TTM and 2021 Net Operating Income due in part to approximately $849,437 comprised of (i) straight-line averaging rent over the lease term for investment grade tenants, The City of New York and TD Bank, N.A., plus (ii) contractual rent steps through August 1, 2023. |
The Market. The 469 7th Avenue Property is situated in the Garment District neighborhood of New York, New York, which neighborhood is bordered by 40th Street to the north, 34th Street to the south, Avenue of the Americas to the east and Ninth Avenue to the west. The 469 7th Avenue Property is located two blocks north of the 34th Street subway and PATH stations,
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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which services the B, D, F, M, N, Q, R and W subway lines and the PATH Train to New Jersey as well as Penn Station, which services the 1, 2, 3, A, C and E subway lines, NJ Transit and the Long Island Railroad. The recently redeveloped Moynihan Train Station is located three blocks southwest of the 469 7th Avenue Property, was completed in early 2021, and is currently open to the public. The redevelopment featured a $1.6 billion investment into the Farley Post Office and has expanded Penn Station to the west and created a brand-new transit-oriented development that comprises over 1.0 million square feet. In addition, the 469 7th Avenue Property is located just north of 34th Street, which serves as the main retail corridor within this area of Manhattan. Currently, there are over 175 retailers located within the district primarily along West 34th Street between Fifth and Ninth Avenues. The entire northern blockfront of West 34th Street between Broadway and Seventh Avenues is home to Macy’s flagship store. In addition, other major tenants include H&M, Banana Republic, Old Navy, Victoria’s Secret, Uniqlo, Zara, Aldo, Amazon, Footlocker, Desigual, Urban Outfitters, Express, Forever 21, American Eagle Outfitters, Build-A-Bear and other mid-level retailers.
According to a third-party market research report, the 469 7th Avenue Property is located in the Penn Plaza/Garment office submarket of the New York City market. As of June 2022, the Penn Plaza/Garment office submarket reported total inventory of approximately 84.6 million SF with an 11.5% vacancy rate and average asking rent of $66.94 PSF. The appraiser concluded to a market rent for the office space at the 469 7th Avenue Property of $58.00 PSF for floors 2 to 10 and $60.00 PSF for floors 11 to 16, both on a modified gross basis.
The following table presents certain information relating to the appraisal’s market rent conclusions for the 469 7th Avenue Property:
| Market Rent Summary(1) |
| | Office Floors 2-10 | Office Floors 11-16 | Retail Corner | Retail Seventh Avenue | Retail Side Street | Retail Mezzanine | Storage Lower Level |
| Market Rent (PSF) | $58.00 | $60.00 | $225.00 | $150.00 | $100.00 | $25.00 | $20.00 |
| Lease Term (Years) | 10 | 10 | 10 | 10 | 10 | 10 | 10 |
| Lease Type | MG | MG | MG | MG | MG | MG | Gross |
The following table presents information relating to comparable office property sales for the 469 7th Avenue Property:
| Comparable Sales Summary(1) |
| Property Name/Location | Sale Date | Year Built/ Renovated | Total NRA (SF) | Occupancy | Sale Price | Sale Price PSF |
469 7th Avenue New York, NY | N/A | 1921/2012 | 269,233(2) | 87.4%(2) | NAP | NAP |
475 Fifth Avenue New York, NY | May-2022 | 1965/2017 | 276,000 | 97.0% | $290,000,000 | $1,050.72 |
110 East 42nd Street New York, NY | Jan-2022 | 1876/NAP | 222,968 | 83.0% | $117,075,000 | $525.08 |
498 Seventh Avenue New York, NY | Dec-2021 | 1920/2015 | 956,069 | 90.0% | $680,000,000 | $711.25 |
One Park Avenue New York, NY | July-2021 | 1926/2000 | 947,894 | 99.0% | $875,000,000 | $923.10 |
345 Seventh Avenue New York, NY | Sept-2021 | 1928/NAP | 212,197 | 50.0% | $107,000,000 | $504.25 |
15 West 47th Street New York, NY | Dec-2020 | 1926/NAP | 133,139 | 86.0% | $110,000,000 | $826.20 |
522 Fifth Avenue New York, NY | Sept-2020 | 1919/1995 | 536,520 | 100.0% | $350,000,000 | $652.35 |
1375 Broadway New York, NY | July-2020 | 1927/NAP | 518,578 | 100.0% | $435,000,000 | $838.83 |
| (2) | Based on the underwritten rent roll dated June 23, 2022. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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The following table presents information relating to comparable office properties for the 469 7th Avenue Property:
| Comparable Office Properties Summary(1) |
| Property Name/Location | Office Area | Year Built/ Renovated | Stories | Sublease SF Available | % Occupied (Direct) | Average Asking Rent |
469 7th Avenue New York, NY | 269,233 (2) | 1921/2012 | 16 | NAP | 87.4%(2) | $58.14(2)(3) |
950 Sixth Avenue New York, NY | 369,000 | 1909/NAP | 12 | 29,018 | 100.0% | NAP |
1001 Sixth Avenue New York, NY | 250,000 | 1926/NAP | 25 | 7,447 | 82.1% | $58.00 |
10 West 33rd Street New York, NY | 453,600 | 1914/NAP | 12 | NAP | 92.3% | $43.00 |
111 West 33rd Street New York, NY | 744,237 | 1954/NAP | 26 | 197,705 | 98.7% | $65.00 |
7 West 34th Street New York, NY | 477,000 | 1901/NAP | 12 | NAP | 100.0% | NAP |
330 West 34th Street New York, NY | 722,000 | 1926/NAP | 18 | 74,346 | 97.7% | $90.00 |
333 West 34th Street New York, NY | 346,728 | 1953/NAP | 10 | 274,810 | 100.0% | NAP |
114 West 41st Street New York, NY | 350,000 | 1915/NAP | 22 | 15,931 | 81.5% | $65.00 |
11 West 42nd Street New York NY | 955,559 | 1927/NAP | 32 | 19,427 | 99.3% | $67.00 |
1250 Broadway New York NY | 777,825 | 1968/NAP | 39 | 57,332 | 97.2% | $70.00 |
| (2) | Based on the underwritten rent roll dated June 23, 2022. |
| (3) | Represents Underwritten Base Rent per SF, which includes approximately $849,437 of straight-line rent averaging for investment grade tenants, The City of New York and TD Bank, N.A., plus contractual rent steps through August 1, 2023. |
The Borrower. The borrower is 469 Holdings LLC, a Delaware limited liability company. The borrower is structured to be a single purpose bankruptcy-remote 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 469 7th Avenue Whole Loan.
The Borrower Sponsor. The borrower sponsor and nonrecourse carveout guarantor is Martin Meyer. Martin Meyer is a principal of Meyer Equities LLC, a privately owned real estate investment entity with ownership interests in (i) four commercial properties in Manhattan, New York and (ii) a national shopping center portfolio as well as limited partnership investments and membership shares of 17 commercial properties in New York, New York.
Property Management. The 469 7th Avenue Property is managed by Meyer Equities LLC, an affiliate of the borrower sponsor.
Escrows and Reserves. At origination of the 469 7th Avenue Whole Loan, the borrower deposited approximately $1,080,225 into a real estate tax reserve account.
Tax Escrows – The borrower is required to deposit into a real estate tax reserve, on a monthly basis, 1/12 of the taxes that the lenders reasonably estimate will be payable over the next-ensuing 12-month period (initially estimated to be approximately $270,056).
Insurance Escrows – The borrower is required to deposit into an insurance reserve, on a monthly basis, 1/12 of the amount that will be sufficient to pay the insurance premiums due for the renewal of coverage afforded by such policies; provided, however, such insurance reserve has been conditionally waived so long as the borrower maintains a blanket policy meeting the requirements of the 469 7th Avenue Whole Loan documents.
TI / LC Reserve – The borrower is required to deposit into a tenant improvement and leasing commissions reserve, on a monthly basis, an amount equal to approximately $22,436, subject to a cap of $1,346,165.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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Replacement Reserve – The borrower is required to deposit into a replacement reserve, on a monthly basis, an amount equal to approximately $4,487, subject to a cap of $100,000.
Specified Tenant Reserve – During the continuance of a Specified Tenant Trigger Period (as defined below), the borrower is required to deposit (a) $558,000 with respect to The City of New York lease and (b) with respect to or relating to any other Specified Tenant (as defined below), an amount equal to all Specified Tenant excess cash flow for the interest accrual period immediately prior to the applicable monthly payment date, for tenant improvements and leasing commissions that may be incurred with respect to future leases of all or any portion of the related Specified Tenant space, provided, however, such amount on deposit will not exceed $100 per square foot of the applicable Specified Tenant space.
Lockbox / Cash Management. The 469 7th Avenue Whole Loan is structured with a hard lockbox and springing cash management. At origination of the 469 7th Avenue Whole Loan, the borrower was required to deliver a notice to each tenant directing each tenant to remit all payments under the applicable lease directly to the lender-controlled lockbox. All funds received by the borrower or the property manager are required to be deposited in a lockbox account immediately following receipt. All funds deposited into the lockbox are required to be released to the borrower on each business day unless a Trigger Period (as defined below) exists. Upon the occurrence and during the continuance of a Trigger Period, all funds in the lockbox account are required to be swept on each business day to a lender-controlled cash management account to be applied and disbursed in accordance with the 469 7th Avenue Whole Loan documents, and all excess cash flow funds remaining in the cash management account after the application of such funds in accordance with the 469 7th Avenue Whole Loan documents (i) if a Sweep Period (as defined below) exists, are required to be held by the lenders in an excess cash flow reserve account as additional collateral for the 469 7th Avenue Whole Loan and (ii) if no Sweep Period exists, are required to be returned to the borrower. Upon the cure of the applicable Trigger Period, so long as no other Trigger Period exists, the lenders are required to return any amounts remaining on deposit in the excess cash flow reserve account to the borrower. Upon an event of default under the 469 7th Avenue Whole Loan documents, the lenders have the right to apply funds to the debt in such priority as it may determine.
A “Trigger Period” means a period (A) commencing upon (i) the occurrence of an event of default under the 469 7th Avenue Whole Loan documents, (ii) the debt service coverage ratio falling below 1.35x for one calendar quarter, (iii) the occurrence and continuance of a Specified Tenant Trigger Period, (iv) a conviction for fraud or misappropriation of funds by (a) the borrower, the guarantor, the borrower sponsor or an affiliated manager or (b) any director or officer of the borrower, the guarantor, the borrower sponsor or an affiliated manager (unless, in the case of this clause (b), such director or officer has been terminated and no longer has any ownership interest in the borrower or any involvement with or role in the management, administration or operation of the borrower or the 469 7th Avenue Property) or (v) a property manager other than the affiliated manager becoming the debtor in or subject of any case or proceeding (whether voluntary or involuntary) under the bankruptcy code or makes any assignment for the benefit of creditors under the bankruptcy code or other creditors’ rights laws and (B) expiring upon (v) with regard to clause (i), the cure of such event of default, (w) with regard to clause (ii), the debt service coverage ratio being equal to or greater than 1.35x for one calendar quarter or the Collateral Cure Conditions (as defined below) are satisfied and remain satisfied, (x) with regard to clause (iii), a Specified Tenant Trigger Period ceasing to exist, (y) with regard to clause (iv), the payment or defeasance in full of all principal and interest on the 469 7th Avenue Whole Loan and all other amounts payable under the 469 7th Avenue Whole Loan documents or (z) with regard to clause (v), upon either (A) the replacement of such property manager with a new property manager pursuant to a new management agreement, or (B) if such Trigger Period is solely as a result of the filing of an involuntary petition, case or proceeding against the property manager where neither the property manager or any affiliate of the property manager solicited or caused to be solicited petitioning creditors or consented to or otherwise acquiesced in writing or joined in such involuntary petition, case or proceeding, upon the same being discharged or dismissed within 120 days of such filing, provided that, in the lenders’ reasonable opinion, such filing (after discharge or dismissal) does not materially and adversely affect the property manager's ability to perform its obligations under the management agreement or any of the 469 7th Avenue Whole Loan documents to which it is a party.
A “Specified Tenant Trigger Period” means a period (A) commencing upon the occurrence of a Specified Tenant Trigger Event, and (B) expiring upon the first to occur of (i) the monthly payment date following the applicable Specified Tenant Trigger Event Cure (as defined below), or (ii) the payment or defeasance in full of the 469 7th Avenue Whole Loan.
A “Specified Tenant Trigger Event” means (i) a Specified Tenant giving notice of its intention to terminate, cancel or not to extend or renew its lease, (ii) on or prior to the date that is 12 months prior to the earlier of (x) the 469 7th Avenue Whole Loan maturity date and (y) then applicable expiration date under the applicable Specified Tenant lease, if the Specified Tenant does not extend or renew such Specified Tenant lease, (iii) if, on or prior to the date a Specified Tenant is required
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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to notify the borrower of its election to extend or renew its lease, such Specified Tenant does not give notice, (iv) if a monetary default or material non-monetary default under a Specified Tenant lease occurs and continues beyond any applicable notice and/or cure period under such Specified Tenant lease, (v) a bankruptcy action of a Specified Tenant or guarantor of any Specified Tenant lease occurring, (vi) a Specified Tenant lease being terminated or no longer being in full force and effect, (vii) if a Specified Tenant “goes dark” (unless the sole reason the applicable Specified Tenant is not open for business is permitted in accordance with the 469 7th Avenue Whole Loan documents with respect to such Specified Tenant), vacates, ceases to occupy or ceases to conduct business in the ordinary course at the Specified Tenant space or a portion thereof, provided, however, that (A) “going dark” will not include a temporary cessation of operations in connection with remodeling, renovation or restoration of its leased premises, (B) the Specified Tenant entering into a sublease for all or a portion of its Specified Tenant space will not, in and of itself, constitute a "go dark" event as to the Specified Tenant, provided that such sublease was entered into in accordance with the applicable terms of the Specified Tenant lease and the 469 7th Avenue Whole Loan documents, and provided further, that the applicable subtenant takes (and remains in) possession of, and does not “go dark” at all or any portion of, the space demised pursuant to such sublease and (viii) a Specified Tenant that is a governmental authority (A) fails to timely appropriate or procure sufficient funds to satisfy its obligations under its lease or the applicable lease guaranty or (B) states or acknowledges in a public forum, otherwise admits in writing or gives notice to the borrower that it does not have sufficient funds to timely satisfy its obligations under its lease or the applicable lease guaranty.
A “Specified Tenant Trigger Event Cure” means (i) with respect to clause (i) of Specified Tenant Trigger Event, the date that (x) the applicable Specified Tenant revokes or rescinds all termination or cancellation notices, (y) the applicable Specified Tenant lease is extended on terms satisfying the requirements of the 469 7th Avenue Whole Loan documents or (z) all or substantially all of the applicable Specified Tenant space is leased to a replacement tenant in accordance with the requirements of the 469 7th Avenue Whole Loan documents, (ii) with respect to clause (ii) of Specified Tenant Trigger Event, the date that (x) the applicable Specified Tenant lease is extended on terms satisfying the requirements of the 469 7th Avenue Whole Loan documents or (y) all or substantially all of the applicable Specified Tenant space is leased to a replacement tenant, (iii) with respect to clause (iii) of Specified Tenant Trigger Event, the date that (x) the applicable Specified Tenant lease is extended on terms satisfying the requirements of the 469 7th Avenue Whole Loan documents or (y) all or substantially all of the applicable Specified Tenant space is leased to a replacement tenant, (iv) with respect to clause (iv) of Specified Tenant Trigger Event, a cure of the applicable event of default, (v) with respect to clause (v) of Specified Tenant Trigger Event, the affirmation of the Specified Tenant lease in the applicable bankruptcy proceeding and confirmation that the Specified Tenant is actually paying all rents and other amounts under its lease (or, if applicable, the discharge or dismissal of the applicable Specified Tenant lease guarantor from the applicable bankruptcy proceeding; provided that such bankruptcy (after dismissal or discharge) does not have an adverse effect on such Specified Tenant lease guarantor’s ability to perform its obligations under its lease guaranty), (vi) with respect to clause (vi) of Specified Tenant Trigger Event, all or substantially all of the applicable Specified Tenant space is leased to a replacement tenant, (vii) with respect to clause (vii) of Specified Tenant Trigger Event, the Specified Tenant re-commencing its normal business operations at its Specified Tenant space or a portion thereof and (viii) with respect to clause (viii) of Specified Tenant Trigger Event, the appropriation or procurement by the applicable Specified Tenant or the applicable lease guarantor, as the case may be, of sufficient funds to timely satisfy its obligations under the related Specified Tenant lease or the related lease guaranty.
A “Specified Tenant” means, as applicable, (i) The City of New York, (ii) In Touch Group (unless and until In Touch Group is no longer deemed a Specified Tenant in accordance with the requirements of the 469 7th Avenue Whole Loan documents) and (iii) any tenant at the 469 7th Avenue Property that, together with its affiliates, either (a) leases no less than 20% of the total rentable square footage of the 469 7th Avenue Property or (b) accounts for (or would account for) no less than 20% of the total in-place base rent at the 469 7th Avenue Property.
The “Collateral Cure Conditions” means the borrower will deposit cash into the excess cash flow account or will deliver to the lenders a letter of credit which, in either case, will serve as additional collateral for the 469 7th Avenue Whole Loan, in an amount equal to the Collateral Deposit Amount (as defined below) (such deposit, a “Collateral Cure Deposit”). A Collateral Cure Deposit will be sufficient to suspend a Trigger Period and/or a Sweep Period, but in each case only to the extent arising pursuant to clause (A)(ii) of the definition thereof, for a period of one year from the date of such Collateral Cure Deposit. Thereafter, for so long as the borrower elects to satisfy the Collateral Cure Conditions in order to suspend a Trigger Period and/or Sweep Period arising pursuant to clause (A)(ii) of the definition thereof, the Collateral Cure Conditions will continue to be satisfied only if the borrower deposits additional cash collateral in the amount of the Collateral Deposit Amount or increases the amount of the letter of credit previously delivered as a Collateral Cure Deposit by an
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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amount equal to the Collateral Deposit Amount (as applicable) on or before the date that is 30 days prior to each one year anniversary of the date the debt service coverage ratio first having fallen below a debt service coverage ratio of 1.35x.
A “Collateral Deposit Amount” means the difference between (i) the underwritten cash flow necessary to achieve a debt service coverage ratio of 1.35x over a 12-month period and (ii) the underwritten cash flow necessary to achieve a debt service coverage ratio of 1.00x over a 12-month period.
A “Sweep Period” means a period (A) commencing upon the earliest of (i) the occurrence and continuance of an event of default or (ii) the debt service coverage ratio falling below 1.30x for one calendar quarter and (B) expiring upon (x) with regard to any Sweep Period commenced in connection with clause (i) above, the cure (if applicable) of such event of default, and (y) with regard to any Sweep 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 one calendar quarter or the Collateral Cure Conditions are satisfied and remain satisfied.
Subordinate Debt. None.
Mezzanine Debt. None.
Partial Release. Not Permitted.
Ground Lease. None.
Temporary Certificate of Occupancy. In New York City, a permanent or temporary certificate of occupancy is required for the lawful occupancy of a building that was built or significantly altered after 1938, including the 469 7th Avenue Property. A permanent certificate of occupancy had been issued by the City of New York Department of Buildings for the 469 7th Avenue Property, most recently in 1988. According to the borrower’s architect, that permanent certificate of occupancy remains in effect for the originally approved uses of the 469 7th Avenue Property. A temporary certificate of occupancy was issued on October 1, 2014, in connection with work at the 469 7th Avenue Property required under the lease with the City of New York. The temporary certificate of occupancy reflecting the alterations was not renewed when it lapsed in January 2015. Were enforcement action to be taken, the second floor of the 469 7th Avenue Property (which is a portion of the space leased to the City of New York, for occupancy by the New York City Police Department) could not be lawfully occupied until issuance of a valid temporary certificate of occupancy. The borrower has represented that (A) in connection with certain renovations to the 469 7th Avenue Property, a temporary certificate of occupancy is in the process of being issued with respect to the 469 7th Avenue Property (such temporary certificate of occupancy, together with any renewal thereof in accordance with all applicable legal requirements (including, without limitation, covering all then current uses of the 469 7th Avenue Property), as applicable, the “TCO”), and (B) it has satisfied, in all material respects, all outstanding conditions that are necessary for the legal occupancy of the 469 7th Avenue Property (other than ministerial and/or document filing conditions), has submitted evidence thereof to the New York City Department of Buildings, and has no present actual knowledge of any conditions which would result in (i) the TCO not being issued, (ii) after its issuance, of a revocation of the TCO (other than ministerial and/or document filing conditions), (iii) a non-renewal of the TCO (other than ministerial and/or document filing conditions), or (iv) non-issuance of a permanent certificate of occupancy (other than ministerial and/or document filing conditions) for the 469 7th Avenue Property. Furthermore, the borrower has covenanted to (a) use its commercially reasonable efforts and diligently and in good faith cause the TCO to be issued as promptly as possible, (b) once the TCO is issued, maintain the TCO and to cause the TCO to be continuously renewed at all times until a permanent certificate of occupancy is issued, and (c) diligently and in good faith pursue completion of all of the conditions thereto required under applicable legal requirements including, without limitation, causing any violations with respect to the 469 7th Avenue Property to be removed of record. An August 23, 2022 letter from the borrower’s architect states that an inspection of the 469 7th Avenue Property on August 15, 2022 identified three items that the borrower was required to correct before the TCO is issued, and the architect’s letter states that all such items were corrected.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | | |
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| No. 9 – Wells Fargo Center Tampa |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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| No. 9 – Wells Fargo Center Tampa |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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| No. 9 – Wells Fargo Center Tampa |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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| No. 9 – Wells Fargo Center Tampa |
| Mortgage Loan Information | | Property Information |
| Mortgage Loan Seller: | CREFI | | Single Asset / Portfolio: | Single Asset |
| Original Principal Balance(1): | $30,000,000 | | Title: | Fee |
| Cut-off Date Principal Balance(1): | $30,000,000 | | Property Type – Subtype: | Office – CBD |
| % of IPB: | 4.1% | | Net Rentable Area (SF): | 389,624 |
| Loan Purpose: | Acquisition | | Location: | Tampa, FL |
| Borrowers(2): | Ashley Drive Associates LLC, | | Year Built / Renovated: | 1985 / 2022 |
| | Ashley Drive I Associates LLC, | | Occupancy: | 88.3% |
| | Ashley Drive II Associates LLC and | | Occupancy Date: | 6/30/2022 |
| | 100 South Ashley LLC | | 4th Most Recent NOI (As of): | $5,578,315 (12/31/2019) |
| Borrower Sponsors: | Jeffrey J. Feil and Abraham (Axel) | | 3rd Most Recent NOI (As of): | $5,460,306 (12/31/2020) |
| | Stawski | | 2nd Most Recent NOI (As of): | $5,168,658 (12/31/2021) |
| Interest Rate: | 5.72000% | | Most Recent NOI (As of): | $5,609,722 (TTM 6/30/2022) |
| Note Date: | 8/10/2022 | | UW Economic Occupancy: | 87.9% |
| Maturity Date: | 9/6/2032 | | UW Revenues: | $12,277,699 |
| Interest-only Period: | 120 months | | UW Expenses: | $4,842,520 |
| Original Term: | 120 months | | UW NOI: | $7,435,179 |
| Original Amortization Term: | None | | UW NCF: | $6,771,656 |
| Amortization Type: | Interest Only | | Appraised Value / Per SF: | $122,850,000 / $315 |
| Call Protection(3): | L(25),D(89),O(6) | | Appraisal Date: | 7/8/2022 |
| Lockbox / Cash Management: | Hard / Springing | | | |
| Additional Debt(1): | Yes | | | |
| Additional Debt Balance(1): | $43,000,000 | | | |
| Additional Debt Type(1): | Pari Passu | | | |
| | | | | |
| | | | | |
| Escrows and Reserves(4) | | Financial Information(1) |
| | Initial | Monthly | Initial Cap | | Cut-off Date Loan / SF: | $187 |
| Taxes: | $1,557,182 | $141,562 | N/A | | Maturity Date Loan / SF: | $187 |
| Insurance: | $0 | Springing | N/A | | Cut-off Date LTV: | 59.4% |
| Replacement Reserve: | $0 | $6,494 | N/A | | Maturity Date LTV: | 59.4% |
TI / LC: | $1,000,000 | $48,703 | N/A | | UW NCF DSCR: | 1.60x |
| Other: | $857,573 | $0 | N/A | | UW NOI Debt Yield: | 10.2% |
| | | | | | | |
| Sources and Uses |
| Sources | Proceeds | % of Tot | al | | Uses | Proceeds | % of Total | |
| Whole Loan(1) | $73,000,000 | 58.1 | % | | Purchase Price | $120,000,000 | 95.6 | % |
| Principal’s New Cash Contribution | 49,333,167 | 39.3 | | | Upfront Reserves | 3,414,755 | 2.7 | |
| Other Sources | 3,238,840 | 2.6 | | | Closing Costs | 2,157,253 | 1.7 | |
| Total Sources | $125,572,008 | 100.0 | % | | Total Uses | $125,572,008 | 100.0 | % |
| (1) | The Wells Fargo Center Tampa Mortgage Loan (as defined below) is part of the Wells Fargo Center Tampa Whole Loan (as defined below), which is comprised of two pari passu promissory notes with an aggregate original balance of $73,000,000. The Wells Fargo Center Tampa Whole Loan was originated by Citi Real Estate Funding Inc. (“CREFI”). For additional information, see “The Loan” below. Financial information calculated based on the aggregate outstanding principal balance as of the Cut-off Date of the Wells Fargo Center Tampa Whole Loan. |
| (2) | The four entities collectively identified above as the Borrowers hold title to the Wells Fargo Center Tampa Property as tenants-in-common. |
| (3) | The lockout period will be at least 25 payment dates beginning with and including the first payment date in October 2022. Defeasance of the Wells Fargo Center Tampa Whole Loan is permitted at any time after the earlier to occur of (i) two years after the closing date of the securitization that includes the last promissory note to be securitized and (ii) August 10, 2025. The assumed lockout period of 25 payments is based on the expected BMO 2022-C3 securitization closing date in October 2022. The actual lockout period may be longer. |
| (4) | For full description of Escrows and Reserves, see “Escrows and Reserves” below. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 98 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 9 – Wells Fargo Center Tampa |
The Loan. The ninth largest mortgage loan is part of a whole loan evidenced by two pari passu promissory notes in the aggregate original principal amount of $73,000,000 (the “Wells Fargo Center Tampa Whole Loan”) secured by a first lien mortgage on the borrowers’ fee simple interest in a 389,624 square feet office property located in Tampa, Florida (the “Wells Fargo Center Tampa Property”). The Wells Fargo Center Tampa Whole Loan was originated on August 10, 2022 by CREFI and accrues interest at a fixed rate of 5.72000% per annum. The Wells Fargo Center Tampa Whole Loan has an initial term of 120 months, a remaining term of 119 months and is interest only for the full term. The scheduled maturity date of the Wells Fargo Center Tampa Whole Loan is the due date that occurs September 6, 2032. The non-controlling Note A-2 (the “Wells Fargo Center Tampa Mortgage Loan”), with a cut-off date balance of $30,000,000, will be included in the BMO 2022-C3 securitization trust. The Wells Fargo Center Tampa Mortgage Loan will be serviced pursuant to the pooling and servicing agreement for the BMO 2022-C3 securitization until the securitization of the controlling Note A-1, after which point it will be serviced pursuant to the pooling and servicing agreement for such securitization. The table below summarizes the promissory notes that comprise the Wells Fargo Center Tampa Whole Loan. See “Description of the Mortgage Pool—The Whole Loans—The Serviced Pari Passu Whole Loans” in the Preliminary Prospectus.
| Whole Loan Summary |
| Note | Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece |
| A-1(1) | $43,000,000 | $43,000,000 | CREFI | Yes |
| A-2 | $30,000,000 | $30,000,000 | BMO 2022-C3 | No |
| Whole Loan | $73,000,000 | $73,000,000 | | |
| (1) | Expected to be contributed to one or more future securitization transactions. |
The Property. The Wells Fargo Center Tampa Property is a 389,624 SF, 22-story office building located in Tampa, Florida. The Wells Fargo Center Tampa Property was constructed in 1985, renovated in 2022, and is situated on a 1.48-acre site. The Wells Fargo Center Tampa Property includes an adjacent 9-story parking garage with 519 covered and uncovered parking spaces resulting in a parking ratio of 1.33 spaces per 1,000 square feet of net rentable area. Since 2009, the Wells Fargo Center Tampa Property has received $8,400,000 in capital improvements, including a roof replacement, elevator modernizations, lobby and common area upgrades, parking garage improvements, exterior improvements and recent enhancements to the HVAC equipment. The Wells Fargo Center Tampa Property amenities include a first-class fitness center, a full menu café and tenant lounge with Wi-Fi, a state-of-the art conference center, courtesy shuttle service, and a full-service bank branch. As of June 30, 2022, the Wells Fargo Center Tampa Property was 88.3% leased to 50 tenants with no tenant accounting for more than 13.7% of the underwritten base rent and 11.4% of net rentable area.
COVID-19 Update. As of August 10, 2022, the Wells Fargo Center Tampa Property is open and operational and there were no outstanding rent relief requests. The first payment date of the Wells Fargo Center Tampa Mortgage Loan is October 6, 2022.
Major Tenants. The three largest tenants based on underwritten base rent are Wells Fargo Bank, Phelps Dunbar, LLP and Wicker, Smith, O'Hara, McCoy & Ford, PA.
The largest tenant based on underwritten base rent at the Wells Fargo Center Tampa Property is Wells Fargo Bank (44,566 square feet, 11.4% of NRA; 13.7% of underwritten base rent). Founded in 1852, and headquartered in San Francisco, Wells Fargo Bank provides banking, investment and mortgage products and services, as well as consumer and commercial finance through more than 7,200 locations, more than 13,000 ATMs, the internet, and mobile banking and has offices in 31 countries and territories to support customers who conduct business in the global economy. Wells Fargo Bank has two, five-year renewal options and the option to partially terminate its lease and give back either the entire ninth floor (20,367 square feet) or tenth floor (20,147 square feet) effective on July 31, 2025 with notice no later than August 31, 2023 and payment of a contraction fee. Wells Fargo Bank has occupied space at the Wells Fargo Center Tampa Property since 1994 and serves as the brand anchor tenant of the Wells Fargo Center Tampa Property.
The second largest tenant based on underwritten base rent at the Wells Fargo Center Tampa Property is Phelps Dunbar, LLP (30,311 square feet, 7.8% of NRA; 8.3% of underwritten base rent). Phelps Dunbar, LLP is a law firm with 11 office locations in the United States and London focusing on six core areas which are labor, employment, litigation, business, admiralty, insurance coverage and healthcare. Phelps Dunbar, LLP has occupied space at the Wells Fargo Center Tampa Property since 2017. Phelps Dunbar, LLP has two, five-year renewal options and the right to terminate its lease on October 31, 2024 with a written notice no later than October 31, 2023 and the payment of a termination fee.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 99 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 9 – Wells Fargo Center Tampa |
The third largest tenant based on underwritten base rent at the Wells Fargo Center Tampa Property is Wicker, Smith, O'Hara, McCoy & Ford, PA (20,632 square feet, 5.3% of NRA; 6.4% of underwritten base rent). Wicker, Smith, O'Hara, McCoy & Ford, PA is a law firm established in 1952 and has over 260 attorneys across 16 offices with 12 Florida locations. Wicker, Smith, O'Hara, McCoy & Ford, PA represents professionals and multinational corporations in litigation, as well as business and transactional law. Wicker, Smith, O'Hara, McCoy & Ford, PA has occupied space at the Wells Fargo Center Tampa Property since 2021.
Environmental. According to the Phase I environmental report dated May 3, 2022, there are no recognized environmental conditions or recommendations for further action at the Wells Fargo Center Tampa Property. An Asbestos O&M Plan was provided at loan origination.
The following table presents certain information relating to the historical and current occupancy of the Wells Fargo Center Tampa Property:
| Historical and Current Occupancy(1) |
| 2019 | 2020 | 2021 | Current(2) |
| 83.3% | 84.0% | 81.8% | 88.3% |
| (1) | Historical occupancies are the annual average physical occupancy of each respective year. |
| (2) | Current occupancy is as of June 30, 2022. |
The following table presents certain information relating to the largest tenants based on underwritten base rent of the Wells Fargo Center Tampa Property:
| Top Tenant Summary(1) |
| Tenant | Ratings Moody’s/S&P/Fitch(2) | Net Rentable Area (SF) | % of Total NRA | UW Base Rent PSF(3) | UW Base Rent(3) | % of Total UW Base Rent(3) | Lease Expiration Date(4)(5) |
| Wells Fargo Bank(4) | A1/BBB+/NR | 44,566 | 11.4 | % | $33.01 | $1,470,945 | 13.7 | % | 7/31/2027 |
| Phelps Dunbar, LLP(5) | NR/NR/NR | 30,311 | 7.8 | | $29.42 | 891,647 | 8.3 | | 6/30/2028 |
| Wicker, Smith, O'Hara, McCoy & Ford, PA | NR/NR/NR | 20,632 | 5.3 | | $33.48 | 690,673 | 6.4 | | 7/31/2029 |
| Valet Living, LLC | NR/NR/NR | 20,601 | 5.3 | | $30.77 | 633,893 | 5.9 | | 8/31/2028 |
| Datis HR Cloud, Inc | NR/NR/NR | 19,618 | 5.0 | | $31.14 | 610,999 | 5.7 | | 8/31/2031 |
| Hinshaw & Culbertson LLP | NR/NR/NR | 13,284 | 3.4 | | $31.52 | 418,712 | 3.9 | | 1/31/2023 |
| Carlton Fields, P.A.(6) | NR/NR/NR | 14,510 | 3.7 | | $28.00 | 406,280 | 3.8 | | 10/31/2029 |
| RGN-Tampa V, LLC (Regus) | NR/NR/NR | 12,907 | 3.3 | | $26.43 | 341,132 | 3.2 | | 11/30/2025 |
| Bush, Graziano, Rice & Platter, P.A. | NR/NR/NR | 10,138 | 2.6 | | $30.45 | 308,685 | 2.9 | | 8/31/2024 |
| Anthony & Partners, LLC | NR/NR/NR | 10,001 | 2.6 | | $30.60 | 306,031 | 2.8 | | 5/31/2031 |
| Largest Tenants | | 196,568 | 50.5 | % | $30.93 | 6,078,997 | 56.5 | % | |
| Remaining Tenants | | 147,573 | 37.9 | | $31.72 | 4,681,085 | 43.5 | % | |
| Total Occupied | | 344,141 | 88.3 | % | $31.27 | $10,760,081 | 100.0 | % | |
| Vacant Space | | 45,483 | 11.7 | | | | | |
| Total / Wtd. Avg. | | 389,624 | 100.0 | % | | | | |
| (1) | Based on underwritten rent roll dated as of June 30, 2022. |
| (2) | In certain instances, ratings are those of the parent company whether or not the parent guarantees the lease. |
| (3) | UW Base Rent, % of Total UW Base Rent and UW Base Rent $ PSF include contractual rent steps of $344,859 underwritten for various tenants through August 1, 2023. |
| (4) | Wells Fargo Bank has the option to partially terminate its lease and give back either the entire ninth floor (20,367 square feet) or tenth floor (20,147 square feet) effective on July 31, 2025 with notice no later than August 31, 2023 and payment of a contraction fee. |
| (5) | Phelps Dunbar, LLP has the right to terminate its lease on October 31, 2024 with a written notice no later than October 31, 2023 and the payment of a termination fee. |
| (6) | Carlton Fields, P.A. has the right to terminate its lease on October 31, 2026 with a written notice no later than October 31, 2025 and the payment of a termination fee. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 100 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 9 – Wells Fargo Center Tampa |
The following table presents certain information relating to the tenant lease expirations of the Wells Fargo Center Tampa Property:
| Lease Rollover Schedule(1)(2) |
Year | Number of Leases Expiring | Net Rentable Area Expiring | % of Net Rental Area Expiring | UW Base Rent Expiring(3) | % of UW Base Rent Expiring | Cumulative Net Rentable Area Expiring | Cumulative % of NRA Expiring | Cumulative UW Base Rent Expiring(3) | Cumulative % of UW Base Rent Expiring |
| Vacant | NAP | 45,483 | 11.7 | % | NAP | NAP | | 45,483 | 11.7% | NAP | NAP |
| MTM | 0 | 0 | 0.0 | % | $0 | 0.0 | % | 45,483 | 11.7% | $0 | 0.0% |
| 2022 | 1 | 1,853 | 0.5 | | 61,757 | 0.6 | | 47,336 | 12.1% | $61,757 | 0.6% |
| 2023 | 8 | 37,950 | 9.7 | | 1,191,408 | 11.1 | | 85,286 | 21.9% | $1,253,166 | 11.6% |
| 2024 | 8 | 28,861 | 7.4 | | 907,222 | 8.4 | | 114,147 | 29.3% | $2,160,387 | 20.1% |
| 2025 | 7 | 32,920 | 8.4 | | 997,955 | 9.3 | | 147,067 | 37.7% | $3,158,343 | 29.4% |
| 2026 | 8 | 25,411 | 6.5 | | 805,413 | 7.5 | | 172,478 | 44.3% | $3,963,756 | 36.8% |
| 2027 | 7 | 65,728 | 16.9 | | 2,191,471 | 20.4 | | 238,206 | 61.1% | $6,155,227 | 57.2% |
| 2028 | 3 | 60,309 | 15.5 | | 1,772,682 | 16.5 | | 298,515 | 76.6% | $7,927,909 | 73.7% |
| 2029 | 4 | 46,473 | 11.9 | | 1,421,039 | 13.2 | | 344,988 | 88.5% | $9,348,948 | 86.9% |
| 2030 | 0 | 0 | 0.0 | | 0 | 0.0 | | 344,988 | 88.5% | $9,348,948 | 86.9% |
| 2031 | 3 | 35,564 | 9.1 | | 1,107,448 | 10.3 | | 380,552 | 97.7% | $10,456,396 | 97.2% |
| 2032 & Beyond | 1 | 9,072 | 2.3 | | 303,685 | 2.8 | | 389,624 | 100.0% | $10,760,081 | 100.0% |
| Total | 50 | 389,624 | 100.0 | % | $10,760,081 | 100.0 | % | | | | |
| (1) | Based on the underwritten rent roll dated June 30, 2022. |
| (2) | Certain leases may have termination options that are exercisable prior to the originally stated expiration date of the lease and that are not considered in this Lease Rollover Schedule. |
| (3) | UW Base Rent Expiring and Cumulative UW Base Rent Expiring include contractual rent steps of $344,859 underwritten for various tenants through August 1, 2023. |
The following table presents certain information relating to the underwritten cash flows of the Wells Fargo Center Tampa Property:
| Operating History and Underwritten Net Cash Flow |
| | 2019 | 2020 | 2021 | TTM(1) | Underwritten | Per Square Foot | %(2) |
| Rents in Place(3) | $8,419,217 | $8,160,568 | $8,210,474 | $8,706,908 | $10,415,223 | $26.73 | 82.6 | % |
| Contractual Rent Steps(4) | 0 | 0 | 0 | 0 | 344,859 | 0.89 | 2.7 | % |
| Gross Potential Rent | $8,419,217 | $8,160,568 | $8,210,474 | $8,706,908 | $10,760,081 | $27.62 | 85.3 | % |
| Potential Income from | 0 | 0 | 0 | 0 | 1,520,099 | 3.90 | 12.1 | % |
| Vacant Space | | | | | | 0.00 | |
| Total Reimbursements | 517,458 | 528,005 | 308,607 | 406,044 | 328,451 | 0.84 | 2.6 | % |
| Net Rental Income | $8,936,675 | $8,688,573 | $8,519,081 | 9,112,952 | $12,608,631 | $32.36 | 100.0 | % |
| (Vacancy/Credit Loss) | 0 | 0 | 0 | 0 | (1,520,099) | (3.90) | (12.1 | %) |
| Other Income(5) | 1,021,465 | 1,038,899 | 1,020,773 | 1,189,167 | 1,189,167 | 3.05 | 9.4 | % |
| Effective Gross Income | $9,958,140 | $9,727,472 | $9,539,855 | $10,302,119 | $12,277,699 | $31.51 | 97.4 | % |
| Total Expenses | $4,379,825 | $4,267,166 | $4,371,197 | $4,692,397 | $4,842,520 | $12.43 | 39.4 | % |
| Net Operating Income(6) | $5,578,315 | $5,460,306 | $5,168,658 | $5,609,722 | $7,435,179 | $19.08 | 60.6 | % |
| Total TI/LC, Cap Ex / RR | 0 | 0 | 0 | 0 | 663,523 | $1.70 | 5.4 | % |
| Net Cash Flow | $5,578,315 | $5,460,306 | $5,168,658 | $5,609,722 | $6,771,656 | $17.38 | 55.2 | % |
| (1) | TTM reflects the trailing 12 months ending June 30, 2022. |
| (2) | % column represents percent of Net Rental Income for all revenue fields and represents percent of Effective Gross Income for the remainder of fields. |
| (3) | Based on the underwritten rent roll dated as of June 30, 2022. |
| (4) | Contractual Rent Steps totaling $334,859 are underwritten through August 2023. |
| (5) | Other Income includes directly reimbursed expenses such as utilities and parking. |
| (6) | The increase from TTM Net Operating Income to Underwritten Net Operating Income is primarily attributable to potential income from vacant space and contractual rent steps. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 101 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 9 – Wells Fargo Center Tampa |
The Market. The Wells Fargo Center Tampa Property is located in the Downtown Tampa submarket in Tampa, Florida, specifically near major transportation linkages such as the Selmon Expressway, Interstate 275, and Kennedy Boulevard. The Wells Fargo Center Tampa Property is located within the Central Business District of Tampa with Ashley Drive to the north, Selmon Expressway to the south, Florida Avenue to the east and Kennedy Boulevard to the west. Other local landmarks include Water Street Tampa, Tampa Riverwalk, Tampa Convention Center, Curtis Hixon Waterfront Park, Amalie Arena, and The Florida Aquarium. Tampa is part of the metropolitan area referred to as the Tampa Bay Area and is bordered by two bodies of water, Old Tampa Bay and Hillsborough Bay, both of which flow to form Tampa Bay, which in turn flows into the Gulf of Mexico. Tampa is an attractive location with a moderate climate and below-average cost of living. The Downtown Tampa submarket contains roughly 11.4 million square feet of office space and the Tampa office market has a vacancy rate of 9.0% with an average $33.33 per square feet market rent. Rents in the Downtown Tampa submarket posted a gain of 3.1% over the past 12 months. According to a third-party report there is an office inventory of approximately 18.9 million square feet, with an average vacancy rate of 6.1% and an average asking rental rate of $34.36 per square feet within a three-mile radius of the Wells Fargo Center Tampa Property as of the second quarter of 2022. The submarket exhibits a positive net absorption of 244,541 square feet as of the second quarter of 2022. Approximately 41,229 square feet in two projects are currently under construction within the vicinity of the Wells Fargo Center Tampa Property.
According to a third-party report, the estimated 2021 population within a one-, three- and five-mile radius of the Wells Fargo Center Tampa Property was 18,490, 103,900 and 235,709, respectively and the estimated 2021 average household income within the same radii was approximately $124,056, $99,208 and $96,082, respectively.
The following table presents certain information relating to the appraisal’s market rent conclusion for the Wells Fargo Center Tampa Property.
| Market Rent Summary(1) |
| | Office Floors 1-5 | Office Floors 6-13 | Office Floors 14-20 | Office Floors 21-22 |
| Market Rent (Per Square Feet) | $32.50 | $33.50 | $33.50 / $34.00 | $35.00 |
| Lease Term (Years) | 5 | 5 | 5 | 5 |
| Lease Type (Reimbursements) | Base Year Stop | Base Year Stop | Base Year Stop | Base Year Stop |
| Contract Rent Increase Projection | 3.00% | 3.00% | 3.00% | 3.00% |
The following table presents certain information relating to comparable office sales for the Wells Fargo Center Tampa Property:
| Comparable Office Sales(1) |
Property Name / Location | NRA | Year Built / Renovated | Occupancy | Sale Date | Sale Price | Price PSF |
| Wells Fargo Center Tampa,Tampa, FL | 389,624 | (2) | 1985 / 2022 | 88.3% | (2) | | | |
| Miami Tower, Miami, FL | 632,147 | | 1987 / NAP | 69.0% | | Jun-2022 | $162,500,000 | $257.06 |
| Wells Fargo Office Center, Tampa, FL | 389,624 | | 1985 / NAP | 89.0% | | May-2022 | $120,000,000 | $307.99 |
| Airport Executive Center, Tampa, FL | 238,325 | | 1985 / NAP | 84.0% | | Oct-2021 | $55,750,000 | $233.92 |
| Highwoods Preserve VII ,Tampa, FL | 115,230 | | 2007 / NAP | 100.0% | | Jun-2021 | $43,000,000 | $373.17 |
| Two Harbour Place, Tampa, FL | 187,666 | | 1998 / NAP | 92.0% | | Jun-2021 | $56,350,000 | $300.27 |
| (2) | Based on the underwritten rent roll dated as of June 30, 2022. |
The Borrowers. The borrowers comprise four tenants in common, Ashley Drive Associates LLC, Ashley Drive I Associates LLC, Ashley Drive II Associates LLC and 100 South Ashley LLC, each a Delaware limited liability company and single purpose entity with one independent director. The four entities collectively identified as the Borrowers hold title to the Wells Fargo Center Tampa Property as tenants-in-common. Legal counsel to the borrowers delivered a non-consolidation opinion in connection with the origination of the Wells Fargo Center Tampa Whole Loan.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 102 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
| |
| No. 9 – Wells Fargo Center Tampa |
The Borrower Sponsors. The borrowers’ sponsors and non-recourse carveout guarantors are Jeffrey J. Feil and Abraham (Axel) Stawski. The Feil Organization has sponsored other loans originated by CREFI and is led by Jeffrey J. Feil, is an established family-owned investment, development and management firm based in New York City. The firm was founded by Louis Feil in the 1950s and manages 24 million SF of retail, commercial, and industrial property, 5,000 residential rental units, and thousands of acres of undeveloped land across the United States. Axel Stawski is the founder of Stawski Partners, a family-owned real estate manager and developer focusing on boutique properties and floor plans that allow resident customization and potential expansion.
Property Management. The Wells Fargo Center Tampa Property is currently managed by Jeffrey Management Corp., an affiliate of the borrower sponsors.
Escrows and Reserves. At origination of the Wells Fargo Center Tampa Whole Loan, the borrowers deposited approximately (i) $1,557,182 into a real estate tax reserve account, (ii) $1,000,000 into a tenant improvement and leasing commissions account, (iii) $622,047 into an unfunded obligation reserve account, and (iv) $235,526 into a gap rent reserve account.
Tax Escrows – The borrowers are required to deposit into a real estate tax reserve, on a monthly basis, 1/12 of the taxes that the lender reasonably estimates will be payable over the next-ensuing 12-month period (initially estimated to be approximately $141,562).
Insurance Escrows – The borrowers are required to deposit into an insurance reserve, on a monthly basis, 1/12 of the amount which will be sufficient to pay the insurance premiums due for the renewal of coverage afforded by such policies; provided, however, such insurance reserve has been conditionally waived so long as the borrowers maintain a blanket policy meeting the requirements of the Wells Fargo Center Tampa Whole Loan documents.
TI / LC Reserve – The borrowers are required to deposit into a tenant improvement and leasing commissions reserve, on a monthly basis, an amount equal to approximately $48,703.
Replacement Reserve – The borrowers are required to deposit into a replacement reserve, on a monthly basis, an amount equal to approximately $6,494.
Lockbox / Cash Management. The Wells Fargo Center Tampa Whole Loan is structured with a hard lockbox and springing cash management. At origination of the Wells Fargo Center Tampa Whole Loan, the borrowers were required to deliver a notice to each tenant directing such tenant to remit all payments under its lease directly to the lender-controlled lockbox. All funds received by the borrowers or the property manager are required to be deposited in a lockbox account promptly upon receipt. All funds deposited into the lockbox are required to be released to the borrowers on each business day unless a Trigger Period (as defined below) exists. Upon the occurrence and during the continuance of a Trigger Period, all funds in the lockbox account are required to be transferred on each business day to a lender-controlled cash management account to be applied and disbursed in accordance with the Wells Fargo Center Tampa Whole Loan documents, and all excess cash flow funds remaining in the cash management account after the application of such funds in accordance with the Wells Fargo Center Tampa Whole Loan documents are required to be held by the lender in an excess cash flow reserve account as additional collateral for the Wells Fargo Center Tampa Whole Loan. Upon the cure of the applicable Trigger Period, so long as no other Trigger Period exists, the lender is required to return any amounts remaining on deposit in the excess cash flow reserve account to the borrowers. Upon an event of default under the Wells Fargo Center Tampa Whole Loan documents, the lender will apply funds to the debt in such priority as it may determine.
A “Trigger Period” means a period (A) commencing upon (i) the occurrence and continuance of an event of default (subject to any applicable notice and cure period), (ii) the debt service coverage ratio falling below 1.25x (provided that a Trigger Period pursuant to this clause (ii) will not be deemed to exist to the extent that and for so long as the Collateral Cure Conditions (defined below) are satisfied), or (iii) the occurrence of a Specified Tenant Trigger Period (defined below); and (B) terminating upon, as applicable (i) the cure of the applicable event of default, (ii) the debt service coverage ratio remaining at or above 1.25x for two consecutive calendar quarters (calculated on an interest only basis), and (iii) a Specified Tenant Trigger Period ceasing to exist.
“Collateral Cure Conditions” mean the borrowers have deposited cash into an account with the lender or delivered a letter of credit which, in either case, serves as additional collateral for the Wells Fargo Center Tampa Whole Loan, in an amount equal to $1,043,900 (the “Collateral Deposit Amount”) and, thereafter, for so long as the borrowers elect to satisfy the Collateral Cure Conditions in order to avoid a Trigger Period, on each one year anniversary of the date the borrowers made
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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| No. 9 – Wells Fargo Center Tampa |
said deposit (or delivered said letter of credit), the borrowers deposit additional cash collateral in the amount of the Collateral Deposit Amount or shall increase the amount of the letter of credit by an amount equal to the Collateral Deposit Amount. The collateral referenced in this definition will be returned to the borrowers, provided that no event of default is ongoing under the Wells Fargo Center Tampa Whole Loan documents, upon the full repayment of the debt or at such time as the Trigger Period that the Collateral Cure Conditions relate to would have been cured had the borrowers not satisfied the Collateral Cure Conditions (i.e. at such time as the debt service coverage ratio (without taking into account the cash deposit and/or letter of credit) equals or is greater than 1.30x for two consecutive calendar quarters).
A “Specified Tenant Trigger Period” means a period (A) commencing upon the first to occur of (i) an event of default under the applicable Specified Tenant (defined below) lease has occurred beyond all applicable notice, cure and grace periods, (ii) Specified Tenant failing to be in actual, physical possession of the Specified Tenant Space (as defined below) (or applicable portion thereof), failing to be open to the public for business during customary hours and/or “going dark” in the Specified Tenant Space (a “Go Dark Trigger”), it being acknowledged that Specified Tenant will not be deemed to fail to be in occupancy or open for business solely as a result of (x) any company-wide work from home policy of any Specified Tenant implemented at the Wells Fargo Center Tampa Property due to the COVID-19 pandemic or any similar public health emergency or any governmental edict, action, declarations, quarantines, regulation or circumstance, (y) the repair, restoration or improvements of the Wells Fargo Center Tampa Property or the Specified Tenant Space, or (z) work from home flexibility consistent with other similarly situated tenants, (iii) Specified Tenant giving notice that it is terminating its lease for all or more than 30% of the Specified Tenant Space (or applicable portion thereof), (iv) any termination or cancellation of any Specified Tenant’s lease (including, without limitation, rejection in any bankruptcy or similar insolvency proceeding) and/or any Specified Tenant’s lease failing to otherwise be in full force and effect, (v) any bankruptcy or similar insolvency of Specified Tenant and (vi) Specified Tenant failing to extend or renew the applicable Specified Tenant’s lease on or prior to the date occurring on the earlier of (a) 12 months prior to the expiration of the then applicable term of the applicable Specified Tenant lease and (b) the notice period required under the applicable Specified Tenant’s lease in accordance with the applicable terms and conditions thereof for a term of five years; and (B) expiring upon the first to occur of the lender’s receipt of evidence reasonably acceptable to the lender (which such evidence may include, without limitation, a duly executed estoppel certificate from the applicable Specified Tenant in form and substance reasonably acceptable to the lender) of (1) the satisfaction of the Specified Tenant Cure Conditions (defined below) or (2) the borrowers leasing the entire Specified Tenant Space (or applicable portion thereof) in accordance with the applicable terms and conditions of the Wells Fargo Center Tampa Whole Loan documents for a minimum term of five years, the applicable tenant under such lease being in actual, physical occupancy of, and open to the public for business in, the space demised under its lease and paying the full amount of the rent due under its lease (or the borrowers have deposited any free rent with the lender).
A “Specified Tenant” means, as applicable, any tenant which, individually or when aggregated with all other leases at the Wells Fargo Center Tampa Property with the same tenant or its affiliate, either (A) accounts for 11% or more of the total rental income for the Wells Fargo Center Tampa Property, or (B) demises 11% or more of the Wells Fargo Center Tampa Property’s gross leasable area. As of August 10, 2022, Wells Fargo Bank is the sole Specified Tenant at the Wells Fargo Center Tampa Property.
“Specified Tenant Space” means the portion of the Wells Fargo Center Tampa Property demised as of the date of origination of the Wells Fargo Center Tampa Whole Loan to the initial Specified Tenant pursuant to the initial Specified Tenant’s lease.
“Specified Tenant Cure Conditions” means (i) the applicable Specified Tenant has cured all defaults under the applicable Specified Tenant lease, (ii) the applicable Specified Tenant is in actual, physical possession of the Specified Tenant Space (or applicable portion thereof), open to the public for business during customary hours and not “dark” in the Specified Tenant Space (or applicable portion thereof), (iii) the applicable Specified Tenant has revoked or rescinded all termination or cancellation notices with respect to the applicable Specified Tenant lease and has re-affirmed the applicable Specified Tenant lease as being in full force and effect, (iv) in the event the Specified Tenant Trigger Period is due to the applicable Specified Tenant’s failure to extend or renew the applicable Specified Tenant Lease, the applicable Specified Tenant has renewed or extended the applicable Specified Tenant lease in accordance with the terms of such lease and of the Wells Fargo Center Tampa Whole Loan documents for the a minimum term of 5 years, (v) with respect to any applicable bankruptcy or insolvency proceedings involving the applicable Specified Tenant and/or the applicable Specified Tenant lease, the applicable Specified Tenant is no longer insolvent or subject to any bankruptcy or insolvency proceedings or the applicable Specified Tenant lease has been assumed or affirmed pursuant to a final, non-appealable order of a court of competent jurisdiction, (vi) the applicable Specified Tenant is paying full, unabated rent under the applicable Specified Tenant lease (or any free rent is deposited with lender), (vii) the applicable Specified Tenant Space has been re-let for a
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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| No. 9 – Wells Fargo Center Tampa |
minimum of five years and (viii) in the event the Specified Tenant Trigger Period is due to a Go Dark Trigger, the applicable Specified Tenant with respect to which such Go Dark Trigger occurred satisfies the Excess Cash Flow Cure Condition (defined below).
“Excess Cash Flow Cure Condition” means that the following conditions are satisfied: (i) a Trigger Period has occurred and is continuing solely as the result of the occurrence of a Go Dark Trigger and no other Trigger Period exists, and (ii) either (a) the amount of funds on deposit in the excess cash flow account equals or exceeds an amount equal to the next one year of full, unabated rent payments from the applicable Specified Tenant or (b) the borrowers have deposited cash or a letter of credit into the excess cash flow account in an amount which equals or exceeds an amount equal to the next one year of full, unabated rent payments from the applicable Specified Tenant.
Partial Release. Not Permitted.
Subordinate Debt. None.
Mezzanine Debt. None.
Ground Lease. None.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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| | 105 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
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| No. 10 – Saks Fulfillment Center |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 106 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
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| No. 10 – Saks Fulfillment Center |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
| | 107 | |
| Structural and Collateral Term Sheet | | BMO 2022-C3 |
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| No. 10 – Saks Fulfillment Center |
| Mortgage Loan Information | | Property Information |
| Mortgage Loan Seller: | BMO | | Single Asset / Portfolio: | Single Asset |
| Original Principal Balance(1): | $27,500,000 | | Title: | Fee |
| Cut-off Date Principal Balance(1): | $27,500,000 | | Property Type - Subtype: | Industrial – Warehouse |
| % of IPB: | 3.8% | | Net Rentable Area (SF): | 822,771 |
| Loan Purpose: | Acquisition | | Location: | Wilkes Barre, PA |
| Borrower: | Wilkes Barre Owner LLC | | Year Built / Renovated: | 1990 / NAP |
| Borrower Sponsors: | Lee Neibart and William Mack | | Occupancy: | 100.0% |
| Interest Rate: | 6.17000% | | Occupancy Date: | 8/2/2022 |
| Note Date: | 8/2/2022 | | 4th Most Recent NOI (As of)(3): | NAV |
| Maturity Date: | 8/6/2032 | | 3rd Most Recent NOI (As of)(3): | NAV |
| Interest-only Period: | 120 months | | 2nd Most Recent NOI (As of)(3): | NAV |
| Original Term: | 120 months | | Most Recent NOI (As of)(3): | NAV |
| Original Amortization Term: | None | | UW Economic Occupancy: | 95.0% |
| Amortization Type: | Interest Only | | UW Revenues: | $6,426,750 |
| Call Protection(2): | L(26),D(90),O(4) | | UW Expenses: | $0 |
| Lockbox / Cash Management: | Hard / Springing | | UW NOI: | $6,426,750 |
| Additional Debt(1): | Yes | | UW NCF: | $6,426,750 |
| Additional Debt Balance(1): | $32,500,000 | | Appraised Value / Per SF: | $112,900,000 / $137 |
| Additional Debt Type(1): | Pari Passu | | Appraisal Date: | 8/1/2022 |
| | | | | |
| Escrows and Reserves(4) | | Financial Information(1) |
| | Initial | Monthly | Initial Cap | | Cut-off Date Loan / SF: | $73 |
| Taxes: | $117,913 | Springing | N/A | | Maturity Date Loan / SF: | $73 |
| Insurance: | $61,924 | Springing | N/A | | Cut-off Date LTV: | 53.1% |
| Replacement Reserves: | $0 | Springing | N/A | | Maturity Date LTV: | 53.1% |
| TI / LC: | $0 | Springing | N/A | | UW NCF DSCR: | 1.71x |
| | | | | | UW NOI Debt Yield: | 10.7% |
| | | | | | | |
| Sources and Uses |
| Sources | Proceeds | % of Tot | al | | Uses | Proceeds | % of Total | |
| Whole Loan(1) | $60,000,000 | 53.5 | % | | Purchase Price | $110,000,000 | 98.0 | % |
| Borrower Sponsor Equity | 47,228,686 | 42.1 | | | Closing Costs | 2,048,849 | 1.8 | |
| Preferred Equity | 5,000,000 | 4.5 | | | Upfront Reserves | 179,837 | 0.2 | |
| Total Sources | $112,228,686 | 100.0 | % | | Total Uses | $112,228,686 | 100.0 | % |
| (1) | The Saks Fulfillment Center Mortgage Loan (as defined below) is part of the Saks Fulfillment Center Whole Loan (as defined below) evidenced by five pari passu notes with an aggregate outstanding principal balance as of the Cut-off Date of $60,000,000. The Financial Information presented above is calculated based on the outstanding balance of the Saks Fulfillment Center Whole Loan. |
| (2) | Defeasance of the Saks Fulfillment Center Whole Loan is permitted at any time after the earlier to occur of (a) the end of the two-year period commencing on the closing date of the securitization of the last promissory note representing a portion of the Saks Fulfillment Center Whole Loan to be securitized and (b) August 2, 2025. The assumed defeasance lockout period of 26 payments is based on the closing date of this transaction in October 2022. The actual lockout period may be longer. |
| (3) | The Saks Fulfillment Center Property (as defined below) does not have any operating history as the borrower recently acquired the property from the prior owner and leased it back to such prior owner in a sale-leaseback transaction, and the related lease commenced on August 2, 2022. |
| (4) | For a full description of Escrows and Reserves, please refer to “Escrows and Reserves” below. |
The Loan. The tenth largest mortgage loan (the “Saks Fulfillment Center Mortgage Loan”) is part of a whole loan (the “Saks Fulfillment Center Whole Loan”) that is secured by the borrower’s fee interest in an 822,771 square foot industrial property located in Wilkes Barre, Pennsylvania (the “Saks Fulfillment Center Property”). The Saks Fulfillment Center Whole Loan is comprised of five pari passu notes, with an aggregate outstanding principal balance as of the Cut-off Date of $60,000,000. The Saks Fulfillment Center Mortgage Loan is evidenced by the controlling Note A-1 and the non-controlling Note A-4 with an aggregate outstanding principal balance as of the Cut-off Date of $27,500,000 and represents approximately 3.8% of the Initial Pool Balance.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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| No. 10 – Saks Fulfillment Center |
The Saks Fulfillment Center Whole Loan will be serviced pursuant to the pooling and servicing agreement for the BBCMS 2022-C17 securitization (into which Note A-2 and Note A-5 were contributed) until the closing date of the BMO 2022-C3 securitization. On or after the closing date of the BMO 2022-C3 securitization, the Saks Fulfillment Center Whole Loan will be serviced pursuant to the pooling and servicing agreement for the BMO 2022-C3 securitization. The Saks Fulfillment Center Whole Loan was originated on August 2, 2022 by Bank of Montreal and accrues interest at a fixed rate of 6.17000% per annum. The Saks Fulfillment Center Whole Loan has an initial term of 120 months, a remaining term of 118 months and is interest only for the full term. The scheduled maturity date of the Saks Fulfillment Center Whole Loan is the due date that occurs in August 2032. The proceeds of the Saks Fulfillment Center Whole Loan were used to acquire the Saks Fulfillment Center Property, pay origination costs and fund upfront reserves.
The table below summarizes the promissory notes that comprise the Saks Fulfillment Center Whole Loan. The relationship between the holders of the Saks Fulfillment Center Whole Loan is governed by a co-lender agreement as described under “Description of the Mortgage Pool—The Whole Loans—The Serviced Pari Passu Whole Loans” in the Preliminary Prospectus.
| Whole Loan Summary(1) |
| Note | Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece |
| A-1 | $20,000,000 | $20,000,000 | BMO 2022-C3 | Yes |
| A-2 | $17,500,000 | $17,500,000 | BBCMS 2022-C17 | No |
| A-3(2) | $10,000,000 | $10,000,000 | BMO | No |
| A-4 | $7,500,000 | $7,500,000 | BMO 2022-C3 | No |
| A-5 | $5,000,000 | $5,000,000 | BBCMS 2022-C17 | No |
| Whole Loan | $60,000,000 | $60,000,000 | | |
| (1) | The Saks Fulfillment Center Whole Loan will be serviced pursuant to the pooling and servicing agreement for the BBCMS 2022-C17 until the closing date of the BMO 2022-C3 securitization. On or after the closing date of the BMO 2022-C3 securitization, the Saks Fulfillment Center Whole Loan will be serviced pursuant to the pooling and servicing agreement for the BMO 2022-C3 securitization. |
| (2) | Expected to be contributed to one or more future securitization(s). |
The Property. The Saks Fulfillment Center Property consists of an 822,771 square foot industrial warehouse situated on 61.22 acres in Wilkes Barre, Pennsylvania. The Saks Fulfillment Center Property was developed in 1990 and is comprised of one, three-story warehouse building occupied by a single tenant. The Saks Fulfillment Center Property has a total of 1,528 surface parking spaces, resulting in a ratio of approximately 1.86 spaces per 1,000 square feet. On August 2, 2022, the borrower acquired the Saks Fulfillment Center Property from The Saks Fifth Avenue Fulfillment Center (HBC) (“Saks Fifth Avenue Fulfillment Center”) and leased 100% of the property to Saks Fifth Avenue Fulfillment Center in a sale-leaseback transaction.
The Saks Fulfillment Center Property is located approximately one mile southeast of the Susquehanna River in between US Highway 81 and State Highway 11, approximately 1.1 miles from the urban core of Wilkes Barre, Pennsylvania. The immediate surroundings of the Saks Fulfillment Center Property are heavily concentrated with primarily retail and medical space. The Saks Fulfillment Center Property is located nearby the Wyoming Valley Mall and Wilkes Barre Commons which help to frame the area as a commercial center within Wilkes Barre.
COVID-19 Update. As of August 2, 2022, the Saks Fulfillment Center Property was open and operating. As of the date of this term sheet, the Saks Fulfillment Center Whole Loan is not subject to any forbearance, modification, or debt service relief requests. The first payment date of the Saks Fulfillment Center Whole Loan was September 6, 2022.
Major Tenant.
Saks Fifth Avenue Fulfillment Center (822,771 square feet; 100.0% of the NRA; 100.0% of underwritten base rent): Saks Fifth Avenue Fulfillment Center is the primary national distribution center for Saks Fifth Avenue and Saks Off Fifth. In 2021, Hudson Bay Company partnered with Insight Partners to establish Saks Fifth Avenue’s ecommerce business as a standalone company known as Saks. Saks Fifth Avenue is a luxury apparel retailer through ecommerce and 41 physical locations. Saks Fifth Avenue Fulfillment Center sold the Saks Fulfillment Center Property to the borrower and leased it back from the borrower under a triple net lease with a commencement date of August 2, 2022 and a scheduled expiration date of August 1, 2047. The tenant under the Saks Fifth Avenue Fulfillment Center lease has three, 10-year renewal options. Saks Fifth Avenue Fulfillment Center’s lease contains no early termination or contraction options.
Environmental. According to the Phase I environmental assessment dated June 23, 2022, there was no evidence of any recognized environmental conditions at the Saks Fulfillment Center Property.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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The following table presents certain information relating to the historical and current occupancy of the Saks Fulfillment Center Property:
| Historical and Current Occupancy(1) |
| 2019 | 2020 | 2021 | Current(2) |
| NAV | NAV | NAV | 100.0% |
| (1) | The historical occupancy is not available as the borrower recently acquired the property from the current sole tenant and leased it back to such tenant in a sale-leaseback transaction under a lease that commenced on August 2, 2022. |
| (2) | Current Occupancy is as of August 2, 2022. |
The following table presents certain information relating to the sole tenant for the Saks Fulfillment Center Property:
| Tenant Summary(1) |
| Tenant | Ratings
Moody’s/S&P/Fitch | Net Rentable Area (SF) | % of
Total NRA | UW Base Rent PSF | UW Base Rent | % of Total
UW Base Rent | Lease
Exp. Date |
| Saks Fifth Avenue Fulfillment Center | NR/NR/NR | 822,771 | 100.0% | $8.02 | $6,600,000 | 100.0% | 8/1/2047 |
| Occupied Collateral Total / Wtd. Avg. | | 822,771 | 100.0% | $8.02 | $6,600,000 | 100.0% | |
| | | | | | | | |
| Vacant Space | | 0 | 0.0% | | | | |
| | | | | | | | |
| Collateral Total | | 822,771 | 100.0% | | | | |
| | | | | | | | |
| (1) | Based on the underwritten rent roll dated August 2, 2022. The first rent payment date under the related lease was August 2, 2022. |
The following table presents certain information relating to the tenant lease expiration dates of the Saks Fulfillment Center Property:
| Lease Rollover Schedule(1) |
| Year | Number of Leases Expiring | Net Rentable Area Expiring | % of NRA Expiring | UW Base Rent Expiring | % of UW Base Rent Expiring | Cumulative Net Rentable Area Expiring | Cumulative % of NRA Expiring | Cumulative UW Base Rent Expiring | Cumulative % of UW Base Rent Expiring |
| Vacant | NAP | 0 | 0.0 | % | NAP | NA | P | 0 | 0.0% | NAP | NAP |
| 2022 & MTM | 0 | 0 | 0.0 | | $0 | 0.0 | % | 0 | 0.0% | $0 | 0.0% |
| 2023 | 0 | 0 | 0.0 | | 0 | 0.0 | | 0 | 0.0% | $0 | 0.0% |
| 2024 | 0 | 0 | 0.0 | | 0 | 0.0 | | 0 | 0.0% | $0 | 0.0% |
| 2025 | 0 | 0 | 0.0 | | 0 | 0.0 | | 0 | 0.0% | $0 | 0.0% |
| 2026 | 0 | 0 | 0.0 | | 0 | 0.0 | | 0 | 0.0% | $0 | 0.0% |
| 2027 | 0 | 0 | 0.0 | | 0 | 0.0 | | 0 | 0.0% | $0 | 0.0% |
| 2028 | 0 | 0 | 0.0 | | 0 | 0.0 | | 0 | 0.0% | $0 | 0.0% |
| 2029 | 0 | 0 | 0.0 | | 0 | 0.0 | | 0 | 0.0% | $0 | 0.0% |
| 2030 | 0 | 0 | 0.0 | | 0 | 0.0 | | 0 | 0.0% | $0 | 0.0% |
| 2031 | 0 | 0 | 0.0 | | 0 | 0.0 | | 0 | 0.0% | $0 | 0.0% |
| 2032 | 0 | 0 | 0.0 | | 0 | 0.0 | | 0 | 0.0% | $0 | 0.0% |
| 2033 & Beyond | 1 | 822,771 | 100.0 | | 6,600,000 | 100.0 | | 822,771 | 100.0% | $6,600,000 | 100.0% |
| Total | 1 | 822,771 | 100.0 | % | $6,600,000 | 100.0 | % | | | | |
| (1) | Based on the underwritten rent roll dated August 2, 2022. |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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| No. 10 – Saks Fulfillment Center |
| Underwritten Net Cash Flow |
| | Underwritten | Per Square Foot | %(1) |
| Rents in Place | $6,600,000 | $8.02 | 97.6 | % |
| Rent Steps(2) | 165,000 | 0.20 | 2.4 | |
| Gross Potential Rent | $6,765,000 | $8.22 | 100.0 | % |
| Other Income | 0 | 0.00 | 0.0 | |
| Net Rental Income | $6,765,000 | $8.22 | 100.0 | % |
| (Vacancy) | (338,250) | (0.41) | (5.0 | ) |
| Effective Gross Income | $6,426,750 | $7.81 | 95.0 | % |
| | | | | |
| Total Expenses(3) | 0 | 0.0 | 0.0 | |
| | | | | |
| Net Operating Income | $6,426,750 | $7.81 | 100.0 | % |
| | | | | |
| Capital Expenditures(3) | 0 | 0.00 | 0.0 | |
| TI / LC(3) | 0 | 0.00 | 0.0 | |
| | | | | |
| Net Cash Flow | $6,426,750 | $7.81 | 100.0 | % |
| (1) | % column represents percent of Net Rental Income for all revenue lines and represents percent of Effective Gross Income for the remainder of fields. |
| (2) | Rent Steps include rent steps through August 2, 2023. |
| (3) | The borrower acquired the Saks Fulfillment Center Property from, and leased it back to, Saks Fifth Avenue Fulfillment Center under a triple net lease that commenced on August 2, 2022 in a sale-leaseback transaction. |
The Market. The Saks Fulfillment Center Property is located in Wilkes Barre, Luzerne County, Pennsylvania, within the Scranton-Wilkes-Barre metropolitan statistical area (“Scranton MSA”). According to the appraisal, the Scranton MSA is roughly defined as the geographic region known as the Wyoming Valley, which lies in the northeast region of Pennsylvania between the Moosic and West mountain ranges. The Scranton MSA is approximately 117 miles northwest of New York City and 132 miles north of Philadelphia. The Scranton MSA is a region historically known for its iron production and anthracite coal mining in the nineteenth century, with its peak coal production reached in the mid-20th century. Today, the area is home to major manufacturing, distribution, and back-office centers. The Scranton MSA is also home to several colleges and universities, two of the largest include the University of Scranton and The Commonwealth Medical College, both located in the city of Scranton. According to the appraisal, the estimated 2022 population within a one-mile, three-mile and five-mile radius of the Saks Fulfillment Center Property totaled 5,916, 63,495 and 110,409 people, respectively, and estimated 2022 median household income for the same radii was $37,553, $47,889 and $50,926, respectively.
According to the appraisal, the Saks Fulfillment Center Property is situated within the I-81 Corridor Industrial submarket. As of the first quarter of 2022, the I-81 Corridor Industrial submarket contained total inventory of approximately 64.2 million square feet with a 6.0% vacancy rate and average annual NNN rental rates of $4.51 per square foot.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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The following table presents certain information relating to comparable industrial leases to the Saks Fulfillment Center Property:
| Comparable Industrial Leases(1) |
| Property Location | Year Built | NRA (SF) | Tenant | Lease Size (SF) | Rent PSF | Commencement | Lease Term (Years) | Lease Type |
250 Highland Park Boulevard Wilkes Barre, PA | 1990 | 822,771(2) | Saks Fifth Avenue Fulfillment Center(2) | 822,771(2) | $8.02(2) | Jul-2022(2) | 25.0(2) | Triple Net |
8449 Congdon Hill Drive Alburtis, PA | 2021 | NAV | NAV | 925,910 | $7.50 | Aug-2021 | 5.0 | Triple Net |
3585 South Church Street Whitehall, PA | 2021 | NAV | NAV | 504,900 | $7.25 | Sep-2021 | 5.2 | Triple Net |
250 Radar Road Northampton, PA | 2020 | NAV | NAV | 290,788 | $7.20 | July-2021 | 5.0 | Triple Net |
4275 Fritch Drive Bethlehem, PA | 2012 | NAV | NAV | 228,000 | $8.90 | May-2022 | 3.0 | Triple Net |
323 Logistics Drive Hamburg, PA | 2022/2023 | NAV | NAV | 214,563 | $7.65 | Dec-2023 | 7.2 | Triple Net |
2258 Howertown Road Northampton, PA | 2021 | NAV | NAV | 953,336 | $8.00 | Dec-2021 | 7.3 | Triple Net |
125 Stonewood Road York, PA | 2021 | NAV | NAV | 221,621 | $7.50 | Dec-2021 | 3.1 | Triple Net |
| (2) | Based on the underwritten rent roll dated August 2, 2022. |
The Borrower. The borrower is Wilkes Barre 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 the origination of the Saks Fulfillment Center Whole Loan.
The Borrower Sponsors. The borrower sponsors for the Saks Fulfillment Center Whole Loan are Lee Neibart and William Mack. The non-recourse carveout guarantor for the Saks Fulfillment Center Whole Loan is WRS Advisors IV LLC, which is controlled by the two sons of William Mack. Mr. Neibart is currently a director of Hudson Bay Company. Mr. Neibart previously served as Senior Partner and Chairman of the Real Estate Group of Ares Management LLC from 1993 to 2013 while previously acting as Global CEO of AREA Property Partners. Mr. Mack started his career in a development role within his family business which eventually became Mack-Cali. In 1993 Mr. Mack co-founded Apollo Real Estate Advisors which was eventually sold in 2013. Since then, Mr. Mack has continued his involved in the commercial real estate space through his role as co-founder of the Mack Real Estate Group. Certain affiliates and indirect equity owners of the Saks Fulfillment Center Whole Loan borrower are the borrowers and lenders of certain intercompany loans, as further described under “Intercompany Notes” below.
Property Management. The Saks Fulfillment Center Property is self-managed.
Escrows and Reserves. At loan origination, the borrower deposited approximately (i) $117,913 into a tax reserve and (ii) $61,924 into an insurance reserve.
Tax Reserve – On each due date, the borrower will be required to deposit an amount equal to 1/12th of the real estate taxes that the lender estimates will be payable during the next ensuing 12-months, provided such tax reserve will be conditionally waived so long as (i) no event of default has occurred and is continuing, (ii) the borrower or the tenant under a Lease Sweep Lease (as defined below) pays all real estate property taxes when due and payable with respect to the Saks Fulfillment Center Property directly to the applicable governmental taxing authority and the borrower delivers to the lender evidence thereof no later than 10 business days prior to the applicable due date thereof and (iii) there is on deposit in the tax account with respect to real estate property taxes an amount not less than $117,912.50.
Insurance Reserve – On each due date, the borrower will be required to deposit an amount equal to 1/12th of the annual insurance premiums that the lender estimates will be payable for the renewal of coverage if the borrower does not maintain an approved blanket or umbrella policy, provided such insurance reserve will be conditionally waived so long as (i) no event of default has occurred and is continuing, (ii) the borrower pays all insurance premiums when due and payable and the borrower delivers to the lender evidence thereof no later than 10 business days prior to the applicable due date thereof and
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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(iii) there is on deposit in the insurance premium account with respect to insurance premiums an amount not less than $61,924.25.
Replacement Reserve – On a monthly basis during the continuance of a Trigger Period (as defined below), the borrower is required to escrow an amount equal to approximately $6,856 for capital expenditures.
TI / LC Reserve — On a monthly basis during the continuance of a Trigger Period, the borrower is required to escrow an amount equal to approximately $27,426 for tenant improvement and leasing costs.
Lockbox / Cash Management. The Saks Fulfillment Center Whole Loan is structured with a hard lockbox and springing cash management. The borrower is required to cause all rents to be deposited directly into the lender-controlled lockbox account. The Saks Fulfillment Center Whole Loan documents also require that all rents received by the borrower or property manager be deposited into the lockbox account within two business days of receipt. During the continuance of a Trigger Period, funds on deposit in the lockbox account are required to be swept each business day into a lender-controlled cash management account and applied on each payment date (i) to make deposits into the tax and insurance reserves, (ii) to pay debt service on the Saks Fulfillment Center Whole Loan, (iii) to make deposits into the replacement reserves and TI / LC reserves, (iv) to pay any other amounts then due and payable under the Saks Fulfillment Center Whole Loan documents (including, without limitation, to the cash management bank and servicer for fees and expenses incurred in connection with the Saks Fulfillment Center Whole Loan documents), and (v) funds in an amount equal to the monthly operating expense budgeted amount and any then-current lender-approved extraordinary expenses, if any, with any excess cash after such application required to be deposited (A) if a Lease Sweep Period (as defined below) is continuing, into a lease sweep reserve to be applied to pay the costs of re-tenanting the applicable space, or (B) if no Lease Sweep Period is continuing, and any other Trigger Period is continuing, into a lender-controlled account to be held as additional collateral for the Saks Fulfillment Center Whole Loan during such Trigger Period.
A “Trigger Period” will commence upon (i) the occurrence of an event of default under the Saks Fulfillment Center Whole Loan, (ii) the debt yield is less than 8.5% based on the Saks Fulfillment Center Whole Loan documents or (iii) the commencement of a Lease Sweep Period, and will end, if (A) with respect to a Trigger Period continuing pursuant to clause (i), the event of default commencing the Trigger Period has been cured and such cure has been accepted by the lender, (B) with respect to a Trigger Period continuing due to clause (ii), the date that the debt yield is at least 8.5% for two consecutive calendar quarters, or (C) with respect to a Trigger Period continuing due to clause (iii), termination of the Lease Sweep Period.
A “Lease Sweep Period” will commence on the first due date following the occurrence of any of the following: (i) the date that a Lease Sweep Lease (or any material portion thereof) is surrendered, cancelled or terminated prior to its then current expiration date or the receipt by the borrower or property manager of notice from any tenant under a Lease Sweep Lease of its intent to surrender, cancel or terminate the Lease Sweep Lease (or any material portion thereof) prior to its then current expiration date; (ii) the receipt by the borrower or property manager of notice from any tenant under a Lease Sweep Lease exercising any right to terminate its Lease Sweep Lease; (iii) the date that any tenant under a Lease Sweep Lease (x) discontinues its business (i.e., “goes dark”) in its Lease Sweep Space (as defined below) at the Saks Fulfillment Center Property (or any material portion thereof) for a period in excess of 90 consecutive days or (y) vacates or ceases occupying its Lease Sweep Space at the Saks Fulfillment Center Property (or any material portion thereof) for a period in excess of 90 consecutive days; provided, however, that a Lease Sweep Period will not be triggered as a result of this clause (y) for so long as the Lease Sweep Vacate Conditions (as defined below) are met; (iv) upon a default under a Lease Sweep Lease by the tenant thereunder that continues beyond any applicable notice and cure period; or (v) upon a bankruptcy or insolvency proceeding of any tenant under a Lease Sweep Lease or its parent.
A Lease Sweep Period will end (A) in the case of clauses (i), (ii), (iii) and (v) above, upon the occurrence of an Acceptable Lease Sweep Lease Event (as defined below); (B) in the case of clause (i) and (ii) above, if such termination option is not validly exercised by the tenant under the applicable Lease Sweep Lease by the latest exercise date specified in such Lease Sweep Lease or is otherwise validly and irrevocably waived in writing by the related tenant; (C) in the case of clause (iii) above, the applicable tenant under the Lease Sweep Lease has re-commenced operations at its Lease Sweep Space at the Saks Fulfillment Center Property during normal business hours, in accordance with the terms of its Lease Sweep Lease, for a period of two consecutive months following such cure; (D) in the case of clause (iv) above, the date on which the subject default has been cured, and no other default under such Lease Sweep Lease occurs for a period of two consecutive months following such cure; and (E) in the case of clause (v) above, either (a) the applicable bankruptcy or insolvency
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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proceeding of any tenant under a Lease Sweep Lease or its parent has terminated and the applicable Lease Sweep Lease has been affirmed, assumed or assigned in a manner reasonably satisfactory to the lender or (b) the applicable Lease Sweep Lease has been assumed and assigned to a third party in a manner reasonably satisfactory to the lender.
An “Acceptable Lease Sweep Lease Event” means at least 80% of the gross leasable area of the Saks Fulfillment Center Property is leased pursuant to one or more Qualified Leases (as defined below) that provide, in the aggregate, rent payable by the tenant(s) thereunder that equal or exceed the full unabated rental payments under the Saks Lease (as defined below) and each of the following conditions shall have been satisfied: the borrower has delivered to the lender (A) an officer’s certificate attaching a complete copy of such Qualified Lease(s) and confirming the same to be a true, correct and complete copy thereof, and confirming that: (1) the applicable tenant(s) have accepted possession of the premises demised under such Qualified Lease(s), (2) the applicable tenant(s) are in occupancy of all of the space demised under such Qualified Lease(s) and are open for business and paying regularly scheduled payments of base rent in accordance with the Qualified Lease(s) without right of abatement, offset or credit and any free rent periods, if any, have expired, (3) the applicable tenant(s) (or its corporate parent(s)) is/are not the subject of a bankruptcy action, and (4) all leasing commissions payable in connection with any such Qualified Lease(s) have been paid in full and all tenant improvement obligations, or allowances, concessions or rebates or other landlord obligations of an inducement nature have been completed and paid in full; and (B) at the lender’s option, a tenant estoppel certificate from the applicable tenant(s) in the form prescribed by the applicable Qualified Lease or otherwise in form and substance reasonably satisfactory to the lender and substantially consistent with the tenant estoppel certificate delivered by Saks & Company LLC in connection with the origination of the Sake Fulfillment Center Whole Loan confirming the conditions set forth in clauses (1) through and including (4) above have been satisfied.
A ”Qualified Leases” means either: (A) the original Lease Sweep Lease or a modification of the Lease Sweep Lease approved or deemed approved by the lender, such approval not to be unreasonably withheld, conditioned or delayed so long as no event of default under the Saks Fulfillment Center Whole Loan documents is continuing, or (B) a replacement lease (i) with a tenant that is creditworthy in the lender’s reasonable discretion, (ii) with a term that extends at least three years beyond the end of the term of the Saks Fulfillment Center Whole Loan and with an initial term of at least 10 years, (iii) entered into in accordance with the Saks Fulfillment Center Whole Loan documents and (iv) on market terms with respect to, among other things, base rent, additional rent and recoveries and tenant improvement allowances.
A “Saks Lease” means that certain industrial lease, dated as of August 2, 2022, between the borrower, as successor landlord, and Saks & Company LLC, as tenant, as the same may be amended, modified, supplemented, restated, assigned or replaced from time to time in accordance with the Saks Fulfillment Center Whole Loan documents.
A “Lease Sweep Lease” means (i) the Saks Lease or (ii) any renewal or replacement lease with respect to all or a portion of the Lease Sweep Space.
A “Lease Sweep Space” means the space demised under the applicable Lease Sweep Lease.
A “Lease Sweep Vacate Conditions” means the satisfaction of all of the following: (a) the applicable tenant under the Lease Sweep Lease vacates or ceases to occupy its Lease Sweep Space at the Saks Fulfillment Center Property in connection with the restoration of the improvements (situated on the Saks Fulfillment Center Property) owned or leased by such tenant as a result of a casualty, which such restoration is performed in accordance with the terms of the Lease Sweep Lease and, in the lender’s reasonable judgment, there are sufficient insurance proceeds to fully complete such restoration (excluding the deductible), (b) in the lender’s reasonable judgment, the applicable tenant has commenced and is diligently pursuing completion of such restoration and (c) the lender is satisfied that such discontinuance of business does not exceed a period of 120 days.
Subordinate Debt. None.
Mezzanine Debt. None.
Preferred Equity. On the Saks Fulfillment Center Whole Loan origination date, HBC Wilkes-Barre LLC, an affiliate of Hudson’s Bay Company, which is also an affiliate of Saks Fifth Avenue Fulfillment Center, the sole tenant at the Saks Fulfillment Center Property, made a preferred equity investment of $5,000,000 (the “Preferred Equity Investment”) into a direct member of the borrower. The Preferred Equity Investment has a required outside redemption date that is 15 years
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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after the Saks Fulfillment Center Whole Loan origination date. Such preferred equity investor is not under control (or common control) with the borrower sponsors and does not own any common equity in the borrower. All returns and/or repayments of the Preferred Equity Investment will be made solely to the extent of available excess cash flow after payment of all of the obligations of the borrower then due and payable under the Saks Fulfillment Center Whole Loan documents. For the first 95 months of the Preferred Equity Investment term, the preferred equity investor will be entitled to a priority return at a current pay rate of 3.0%, and, starting in month 96 and for the remainder of the Preferred Equity Investment term, the Preferred Equity Investment will also be amortized down using all available excess cash flow. The Preferred Equity Investment is not evidenced by any promissory note or secured by any assets of the borrower. The preferred equity investor has no contractual remedies under the limited liability company agreement of the borrower (including, without limitation, any forced change in control of the borrower) as a result of its failure to receive any preferred return or repayment of the Preferred Equity Investment during the term of the Saks Fulfillment Center Whole Loan.
Partial Release. Not permitted.
Ground Lease. None.
Intercompany Notes. An indirect member of the borrower is the obligor on (i) an unsecured intercompany loan with an original outstanding principal balance of $7,275,569 in favor of another affiliate of the borrower that is scheduled to mature on January 1, 2033, and (ii) 43 separate unsecured intercompany loans with an aggregate original outstanding principal balance of $60,403,899 in favor of various indirect equity owners of the borrower that are scheduled to mature on January 1, 2051 and are junior in priority to the intercompany loan described clause (i). Each intercompany loan lender has agreed with the Saks Fulfillment Center Whole Loan lender pursuant to a subordination and standstill agreement that, for so long as the Saks Fulfillment Center Whole Loan is outstanding, among other things, (i) it will not exercise remedies or commence any legal, equitable, or other proceedings against the related intercompany loan borrower in connection with the related intercompany loans, (ii) it will not amend or modify any of the related intercompany loan documents without the Saks Fulfillment Center Whole Loan lender’s consent, and (iii) subject to the following sentence, its rights are subject and subordinate in all respects to the Saks Fulfillment Center Whole Loan lender’s rights under the Saks Fulfillment Center Whole Loan documents. Pursuant to each such subordination and standstill agreement, (a) the related intercompany loan lenders are permitted to receive from the related intercompany loan borrower regular monthly interest payments and a principal paydown of the related intercompany loan in a maximum amount equal to the then-available excess cash from the Saks Fulfillment Center Property (after payment of all monthly Whole Loan debt service, reserves, and property-related expenses then due under the Saks Fulfillment Center Whole Loan documents), (b) the related intercompany loan lenders are permitted to allow certain limited transfers of the related intercompany loans in connection with the estate planning and/or death of an intercompany lender subject to, among other things, the Saks Fulfillment Center Whole Loan borrower sponsors (or Richard Mack and Stephen Mack, the two sons of William Mack (one of the borrower sponsors), the “Permitted Controlling Family Members”) continuing to own equity in and control the Saks Fulfillment Center Whole Loan borrower, and (c) the lenders of the subordinate intercompany loans described in clause (ii) above are permitted to convert all or any portion of the related intercompany loans to a corresponding equity interest in the related intercompany loan borrower at any point subject to, among other things, the Permitted Controlling Family Members continuing to own equity in and control the Saks Fulfillment Center Whole Loan borrower, the Saks Fulfillment Center Whole Loan borrower delivering an updated organizational chart confirming that the previous intercompany loan lenders continue to be direct and indirect owners of the borrower following such conversion, and the Saks Fulfillment Center Whole Loan borrower delivering evidence to the Saks Fulfillment Center Whole Loan lender that such conversion will not result in any transfer tax payable by the Saks Fulfillment Center Whole Loan borrower pursuant to applicable law. The non-recourse guarantor of the Saks Fulfillment Center Whole Loan has agreed to indemnify the Saks Fulfillment Center Whole Loan lender for any losses incurred by it in connection with transfer taxes payable as a result of such conversion of the subordinate intercompany loans into the equity interests in the related intercompany loan borrowers.
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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| Contacts |
| BMO Capital Markets CMBS Capital Markets & Banking |
| Contact | E-mail | Phone Number |
| Paul Vanderslice | paul.vanderslice@bmo.com | (203) 451-4151 |
| Managing Director | | |
| | | |
| David Schell | david.schell@bmo.com | (201) 723-4872 |
| Managing Director | | |
| | | |
| Ravish Kamath | ravish.kamath@bmo.com | (860) 771-0788 |
| Director | | |
| | | |
| BMO Capital Markets CMBS Trading & Structuring |
| Contact | E-Mail | Phone Number |
| Andrew Noonan | andrew.noonan@bmo.com | (646) 658-3932 |
| Managing Director | | |
| | | |
| Mary Kunka | mary.kunka@bmo.com | (201) 247-4182 |
| Managing Director | | |
| | | |
| Kiran Manda | kiran.manda@bmo.com | (347) 831-4776 |
| Managing Director | | |
| | | |
| Michael Chen | lei4.chen@bmo.com | (718) 869-0700 |
| Director | | |
| | | |
| BMO Capital Markets Securitized Products Syndicate |
| Contact | E-Mail | Phone Number |
| Alex Smith-Constantine | alex.smithconstantine@bmo.com | (212) 702-1866 |
| Managing Director | | |
| | | |
| Trinian Donohoe | trinian.donohoe@bmo.com | (212) 702-1866 |
| Vice President | | |
| | | |
| UBS CMBS Capital Markets and Banking |
| Contact | E-Mail | Phone Number |
| Nicholas Galeone | nicholas.galeone@ubs.com | (212) 891-5702 |
| Managing Director | | |
| | | |
| Siho Ham | siho.ham@ubs.com | (212) 713-1278 |
| Executive Director | | |
| | | |
| Michael Barbieri | michael.barbieri@ubs.com | (212) 713-1181 |
| Executive Director | | |
| | | |
| UBS CMBS Trading and Syndicate |
| Contact | E-Mail | Phone Number |
| Stephen Gargiulo | stephen.gargiulo@ubs.com | (212) 713-6189 |
| Managing Director | | |
| | | |
| Citigroup CMBS Capital Markets and Securitization |
| Contact | E-Mail | Phone Number |
| Rick Simpson | richard.simpson@citi.com | (212) 816-5343 |
| Managing Director | | |
| | | |
| Jason Mercandetti | jason.mercandetti@citi.com | (212) 816-6384 |
| Director | | |
| | | |
| Citigroup Structuring, Trading & Syndicate |
| Contact | E-Mail | Phone Number |
| Raul Orozco | raul.d.orozco@citi.com | (212) 723-1295 |
| Managing Director | | |
| | | |
| Mattison Perry | mattison.perry@citi.com | (212) 723-1295 |
| Director | | |
| | |
| THE INFORMATION IN THIS STRUCTURAL AND COLLATERAL TERM SHEET IS NOT COMPLETE AND MAY BE AMENDED PRIOR TO THE TIME OF SALE. THIS TERM SHEET IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. |
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