| FREE WRITING PROSPECTUS | ||
| FILED PURSUANT TO RULE 433 | ||
| REGISTRATION FILE NO.: 333-255934-08 | ||
| Dated October 16, 2023 | BMO 2023-5C2 |
| Structural and Collateral Term Sheet | |||||
BMO 2023-5C2 Mortgage Trust | |||||
$777,045,598 (Approximate Mortgage Pool Balance) | |||||
$686,605,000 (Approximate Offered Certificates) | |||||
BMO Commercial Mortgage Securities LLC Depositor | |||||
Commercial Mortgage Pass-Through Certificates, Series 2023-5C2 | |||||
Bank of Montreal Goldman Sachs Mortgage Company Citi Real Estate Funding Inc. Societe Generale Financial Corporation LMF Commercial, LLC German American Capital Corporation Starwood Mortgage Capital LLC UBS AG Sponsors and Mortgage Loan Sellers
| |||||
| BMO Capital Markets | Citigroup | Société Générale | Deutsche Bank Securities | UBS Securities LLC | Goldman Sachs & Co. LLC |
| Co-Lead Managers and Joint Bookrunners | |||||
| Academy Securities Co-Manager | Bancroft Capital, LLC Co-Manager | Drexel Hamilton | |||
| 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 October 16, 2023 | BMO 2023-5C2 |
This material is for your information, and none of BMO Capital Markets Corp., Goldman Sachs & Co. LLC, Citigroup Global Markets Inc., SG Americas Securities, LLC, Deutsche Bank Securities Inc., UBS Securities LLC, Academy Securities, Inc., Bancroft Capital, LLC and Drexel Hamilton, LLC (collectively, 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 2023-5C2 (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 Certificates. 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 Certificates 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 Certificates. 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.
Securities and investment banking activities in the United States are performed by Deutsche Bank Securities Inc., a member of NYSE, FINRA and SIPC, and its broker-dealer affiliates. Lending and other commercial banking activities in the United States are performed by Deutsche Bank AG and its banking affiliates.
| 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 | ||
| Dated October 16, 2023 | BMO 2023-5C2 |
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. | ||
| 3 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| Indicative Capital Structure | ||
| Offered Certificates | ||||||||
Classes of Certificates | Expected Ratings (Fitch/KBRA/Moody’s)(1) | Approximate Initial Certificate Balance or Notional Amount(2) | Approximate Initial Credit Support(3) | Initial | Pass-Through | Expected Weighted Avg. Life (yrs.)(5) | Expected Principal Window(5) | |
| Class A-1 | AAAsf/AAA(sf)/Aaa(sf) | $600,000 | 30.000% | % | (6) | 2.34 | 12/23-3/28 | |
| Class A-2 | AAAsf/AAA(sf)/Aaa(sf) | (7) | 30.000% | % | (6) | (7) | (7) | |
| Class A-3 | AAAsf/AAA(sf)/Aaa(sf) | (7) | 30.000% | % | (6) | (7) | (7) | |
| Class X-A | AAAsf/AAA(sf)/Aaa(sf) | $528,157,000 | (8) | N/A | % | Variable IO(9) | N/A | N/A |
| Class X-B | A-sf/AAA(sf)/NR | $158,448,000 | (8) | N/A | % | Variable IO(9) | N/A | N/A |
| Class A-S | AAAsf/AAA(sf)/Aa3(sf) | $99,030,000 | 16.875% | % | (6) | 4.96 | 10/28-11/28 | |
| Class B | AA-sf/AA-(sf)/NR | $33,010,000 | 12.500% | % | (6) | 5.02 | 11/28-11/28 | |
| Class C | A-sf/A-(sf)/NR | $26,408,000 | 9.000% | % | (6) | 5.02 | 11/28-11/28 | |
| Non-Offered Certificates(10) | ||||||||
Classes of Certificates | Expected Ratings (Fitch/KBRA/Moody’s)(1) | Approximate Initial Certificate Balance or Notional Amount(2) | Approximate Initial Credit Support(3) | Initial Pass- | Pass-Through Rate Description | Expected Weighted Avg. Life (yrs.)(5) | Expected Principal Window(5) | |
| Class X-D | BBBsf/BBB(sf)/NR | $15,090,000 | (8) | N/A | % | Variable IO(9) | N/A | N/A |
| Class X-E | BBB-sf/BBB-(sf)/NR | $7,545,000 | (8) | N/A | % | Variable IO(9) | N/A | N/A |
| Class X-F | BBsf/BB(sf)/NR | $10,375,000 | (8) | N/A | % | Variable IO(9) | N/A | N/A |
| Class D | BBBsf/BBB(sf)/NR | $15,090,000 | 7.000% | % | (6) | 5.02 | 11/28-11/28 | |
| Class E | BBB-sf/BBB-(sf)/NR | $7,545,000 | 6.000% | % | (6) | 5.02 | 11/28-11/28 | |
| Class F | BBsf/BB(sf)/NR | $10,375,000 | 4.625% | % | (6) | 5.02 | 11/28-11/28 | |
| Class G-RR(11) | B-sf/B-(sf)/NR | $12,260,000 | 3.000% | % | (6) | 5.02 | 11/28-11/28 | |
| Class J-RR(11) | NR/NR/NR | $22,636,275 | 0.000% | % | (6) | 5.02 | 11/28-11/28 | |
| Class R(12) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |
_
| Non-Offered Vertical Risk Retention Interest(10)(13) | |||||||
Non-Offered Eligible Vertical Interest | Expected Ratings (Fitch/KBRA/Moody’s)(1) | Approximate Initial Combined VRR Interest Balance(2) | Approximate Initial Credit Support(3) | Initial Effective Interest Rate (4) | Effective Interest Rate Description | Expected Weighted Avg. Life (yrs.)(5) | Expected Principal Window(5) |
| Combined VRR Interest(13) | NR/NR/NR | $22,534,323(14) | N/A(15) | %(16) | (16) | 4.89 | 12/23-11/28 |
| (1) | It is a condition of issuance that the offered certificates and certain classes of non-offered certificates receive the ratings set forth above. The anticipated ratings shown are those of Fitch Ratings, Inc. (“Fitch”), Kroll Bond Rating Agency, LLC (“KBRA”) and Moody’s Investors Services, Inc. (“Moody’s”), as indicated. Subject to the discussion under “Ratings” in the Preliminary Prospectus, the ratings on the certificates address the likelihood of the timely receipt by holders of all payments of interest to which they are entitled on each distribution date and, except in the case of the interest only certificates, the ultimate receipt by holders of all payments of principal to which they are entitled on or before the applicable rated final distribution date. Certain nationally recognized statistical rating organizations, as defined in Section 3(a)(62) of the Securities Exchange Act of 1934, as amended, that were not hired by the depositor may use information they receive pursuant to Rule 17g-5 under the Securities Exchange Act of 1934, as amended, or otherwise to rate the offered certificates. We cannot assure you as to what ratings a non-hired nationally recognized statistical rating organization would assign. See “Risk Factors—Other Risks Relating to the Certificates—Nationally Recognized Statistical Rating Organizations May Assign Different Ratings to the Certificates; Ratings of the Certificates Reflect Only the Views of the Applicable Rating Agencies as of the Dates Such Ratings Were Issued; Ratings May Affect ERISA Eligibility; Ratings May Be Downgraded” in the Preliminary Prospectus. Fitch, KBRA and Moody’s have informed us that the “sf” designation in the ratings represents an identifier of structured finance product ratings. For additional information about this identifier, prospective investors can go to the related rating agency’s website. The depositor and the underwriters have not verified, do not adopt and do not accept responsibility for any statements made by the rating agencies on those websites. Credit ratings referenced throughout this Term Sheet are forward-looking opinions about credit risk and express a rating agency’s opinion about the willingness and ability of an issuer of securities to meet its financial obligations in full and on time. Ratings are not indications of investment merit and are not buy, sell or hold recommendations, a measure of asset value or an indication of the suitability of an investment. |
| (2) | Approximate, subject to a variance of plus or minus 5% and further subject to any additional variances described in the footnotes below. In addition, the notional amounts of the Class X-A, Class X-B, Class X-D, Class X-E and Class X-F certificates (collectively, the “Class X certificates”) may vary depending upon the final pricing of the classes of non-vertically retained principal balance certificates (as defined in footnote (6) below) whose certificate balances comprise such notional amounts, and, if as a result of such pricing (a) the pass-through rate of any class of Class X certificates would be equal to zero at all times, such class of certificates will not be issued on the closing date of this securitization or (b) the pass-through rate of any class of principal balance certificates whose certificate balance comprises such notional amount is at all times equal to the weighted average of the net interest rates on the mortgage loans (in each case, adjusted, if necessary, to accrue on the basis of a 360-day year consisting of twelve 30-day months) as in effect from time to time, the certificate balance of such class of principal balance certificates may not be part of, and there would be a corresponding reduction in, such notional amount of the related class of Class X certificates. |
| (3) | "Approximate Initial Credit Support" means, with respect to any class of non-vertically retained principal balance certificates, the quotient, expressed as a percentage, of (i) the aggregate of the initial certificate balances of all classes of non-vertically retained principal balance certificates, if any, junior to the subject class of non-vertically retained principal balance certificates, divided by (ii) the aggregate of the initial certificate balances of all classes of non-vertically retained principal balance certificates. The approximate initial credit support percentages set forth for the Class A-1, Class A-2 and Class A-3 certificates are represented in the aggregate. The approximate initial credit support percentages shown in the table above with respect to the non-vertically retained principal balance certificates do not take into account the Combined VRR Interest (as defined in footnote (13) below). |
| (4) | Approximate per annum rate as of the closing date. |
| (5) | Determined assuming no prepayments prior to the maturity date or any anticipated repayment date, as applicable, for any mortgage loan and based on the modeling assumptions described under “Yield, Prepayment and Maturity Considerations” in the Preliminary Prospectus. |
| 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 2023-5C2 | |
| Indicative Capital Structure | ||
| (6) | For any distribution date, the pass-through rate for each class of the Class A-1, Class A-2, Class A-3, Class A-S, Class B, Class C, Class D, Class E, Class F, Class G-RR and Class J-RR certificates (collectively, the “non-vertically retained principal balance certificates”, and collectively with the Class X certificates and the Class R certificates, the “non-vertically retained certificates”) will generally be equal to one of (i) a fixed per annum rate, (ii) the weighted average of the net interest rates on the mortgage loans (in each case, adjusted, if necessary, to accrue on the basis of a 360-day year consisting of twelve 30-day months) as in effect from time to time, (iii) a rate equal to the lesser of a specified per annum rate and the weighted average rate described in clause (ii), or (iv) the weighted average rate described in clause (ii) less a specified percentage, but no less than 0.000%. See “Description of the Certificates—Distributions—Pass-Through Rates” in the Preliminary Prospectus |
| (7) | The exact initial certificate balances of the Class A-2 and Class A-3 certificates are unknown and will be determined based on the final pricing of those classes of certificates. However, the respective initial certificate balances, weighted average lives and principal windows of the Class A-2 and Class A-3 certificates are expected to be within the applicable ranges reflected in the following chart. The aggregate initial certificate balance of the Class A-2 and Class A-3 certificates is expected to be approximately $527,557,000 subject to a variance of plus or minus 5%. |
Class of Certificates | Expected Range of Initial Certificate Balances | Expected Range of Weighted Avg. Lives (Yrs) | Expected Range of Principal Windows |
| Class A-2 | $0 - $250,000,000 | N/A – 4.77 | N/A – 3/28-9/28 |
| Class A-3 | $277,557,000 - $527,557,000 | 4.85 – 4.93 | 9/28-10/28 –3/28-10/28 |
| (8) | The Class X certificates will not have certificate balances and will not be entitled to receive distributions of principal. Interest will accrue on each class of Class X certificates at the related pass-through rate based upon the related notional amount. The notional amount of each class of the Class X certificates will be equal to the certificate balance or the aggregate of the certificate balances, as applicable, from time to time of the class or classes of the non-vertically retained principal balance certificates identified in the same row as such class of Class X certificates in the chart below (as to such class of Class X certificates, the “corresponding principal balance certificates”): |
| Class of Class X Certificates | Class(es) of Corresponding Principal Balance Certificates |
| Class X-A | Class A-1, Class A-2 and Class A-3 |
| Class X-B | Class A-S, Class B and Class C |
| Class X-D | Class D |
| Class X-E | Class E |
| Class X-F | Class F |
| (9) | The pass-through rate for each class of Class X certificates will generally be a per annum rate equal to the excess, if any, of (i) the weighted average of the net interest rates on the mortgage loans (in each case, adjusted, if necessary, to accrue on the basis of a 360-day year consisting of twelve 30-day months) as in effect from time to time, over (ii) the pass-through rate (or, if applicable, the weighted average of the pass-through rates) of the class or classes of corresponding principal balance certificates as in effect from time to time, as described in the Preliminary Prospectus. |
| (10) | The classes of certificates and uncertificated interests set forth below “Non-Offered Certificates” and “Non-Offered Vertical Risk Retention Interest” in the table are not offered hereby. |
| (11) | In partial satisfaction of Bank of Montreal’s risk retention obligations as retaining sponsor for this securitization transaction, all of the Class G-RR and Class J-RR certificates (collectively, the “HRR Certificates”), with an aggregate fair value expected to represent at least 2.1000% of the fair value, as of the closing date, of all of the “ABS interests” (i.e. all of the certificates (other than the Class R certificates) and the Uncertificated VRR Interest) issued by the issuing entity, will collectively constitute an “eligible horizontal residual interest” that is to be purchased and retained by LD III Sub XIV, LLC, a Delaware limited liability company, or its affiliate in accordance with the credit risk retention rules applicable to this securitization transaction. “Retaining sponsor,” “ABS interests” and “eligible horizontal residual interest” have the meanings given to such terms in Regulation RR. See “Credit Risk Retention” in the Preliminary Prospectus. |
| (12) | The Class R certificates will not have a certificate balance, notional amount, pass-through rate, rating or rated final distribution date. The Class R certificates will represent the residual interests in each of two separate REMICs, as further described in the Preliminary Prospectus. The Class R certificates will not be entitled to distributions of principal or interest. |
| (13) | In satisfaction of Bank of Montreal’s remaining risk retention obligations as retaining sponsor for this securitization transaction, Bank of Montreal is expected to acquire from the depositor, on the closing date for this transaction, an “eligible vertical interest” in the form of a “single vertical security” with an initial principal balance of approximately $22,534,323 (the “Combined VRR Interest”), which is expected to represent approximately 2.9000% of the aggregate principal balance of all the “ABS interests” (i.e., the sum of the aggregate initial certificate balance of all of the certificates (other than the Class R certificates) and the initial principal balance of the Uncertificated VRR Interest) issued by the issuing entity on the closing date for this transaction, subject to any variation in the initial principal balance of the Combined VRR Interest following calculation of the actual fair value of the HRR Certificates, all of the other classes of certificates (other than the Class R certificates) and the Uncertificated VRR Interest, as described under “Credit Risk Retention” in the Preliminary Prospectus. The Combined VRR Interest will consist of the “Uncertificated VRR Interest” (as defined under “Credit Risk Retention” in the Preliminary Prospectus). The Combined VRR Interest will be retained by the retaining sponsor in accordance with the credit risk retention rules applicable to this securitization transaction. “Eligible vertical interest” and “single vertical security” will have the meanings given to such terms in Regulation RR. See “Credit Risk Retention” in the Preliminary Prospectus. The Combined VRR Interest is not offered hereby. |
| (14) | Constitutes the Combined VRR Interest Balance, which consists of the principal balance of the Uncertificated VRR Interest. |
| (15) | Although the approximate initial credit support percentages shown in the table above with respect to the non-vertically retained principal balance certificates do not take into account the Combined VRR Interest, losses incurred on the mortgage loans will be allocated between the Combined VRR Interest, on the one hand, and the non-vertically retained principal balance certificates, on the other hand, pro rata in accordance with the principal balance of the Combined VRR Interest and the aggregate outstanding certificate balance of the non-vertically retained principal balance certificates. See “Credit Risk Retention” and “Description of the Certificates” in the Preliminary Prospectus. The non-vertically retained principal balance certificates are also collectively referred to as the “principal balance certificates”, and the non-vertically retained certificates are also collectively referred to as the “Certificates”. |
| (16) | Although it does not have a specified pass-through rate (other than for tax reporting purposes), the effective interest rate for the Combined VRR Interest will be the weighted average of the net mortgage interest rates on the mortgage loans (in each case, adjusted, if necessary, to accrue on the basis of a 360-day year consisting of twelve 30-day months) as in effect from time to time. |
| 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 2023-5C2 | |
| Summary of Transaction Terms | ||
| Publicly Offered Certificates: | $686,605,000 monthly pay, multi-class, commercial mortgage REMIC Pass-Through Certificates. |
| Co-Lead Managers and Joint Bookrunners: | BMO Capital Markets Corp., Goldman Sachs & Co. LLC, Citigroup Global Markets Inc., SG Americas Securities, LLC, Deutsche Bank Securities Inc. and UBS Securities LLC |
| Co-Managers: | Academy Securities, Inc., Bancroft Capital, LLC and Drexel Hamilton, LLC |
| Mortgage Loan Sellers: | Goldman Sachs Mortgage Company (“GSMC”) (25.4%); Bank of Montreal (“BMO”) (16.2%); Citi Real Estate Funding Inc. (“CREFI”) (15.3%); Societe Generale Financial Corporation (“SGFC”) (12.6%); LMF Commercial, LLC (“LMF”) (9.8%); German American Capital Corporation (“GACC”) (9.4%); Starwood Mortgage Capital LLC (“SMC”) (6.0%); and UBS AG (“UBS”) (5.3%). |
| Master Servicer: | KeyBank National Association |
| Special Servicer: | Greystone Servicing Company LLC |
| Directing Holder/Controlling Class Representative: | LD III Sub XIV, LLC |
| Trustee: | Wilmington Trust, National Association |
| Certificate Administrator: | Computershare Trust Company, National Association |
| Operating Advisor: | BellOak, LLC |
| Asset Representations Reviewer: | BellOak, LLC |
| Rating Agencies: | Fitch Ratings, Inc. (“Fitch”), Kroll Bond Rating Agency, LLC (“KBRA”) and Moody’s Investors Service, Inc. (“Moody’s”). |
| U.S. Credit Risk Retention: | For a discussion on the manner in which BMO, as retaining sponsor, intends to satisfy the U.S. credit risk retention requirements, see “Credit Risk Retention” in the Preliminary Prospectus. |
| EU Credit Risk Retention: | The transaction is not structured to satisfy the EU risk retention and due diligence requirements. |
| Closing Date: | On or about November 9, 2023. |
| Cut-off Date: | With respect to each mortgage loan, the related due date in November 2023, or in the case of any mortgage loan that has its first due date after November 2023, the date that would have been its due date in November 2023 under the terms of that mortgage loan if a monthly debt service payment were scheduled to be due in that month. |
| Distribution Date: | The 4th business day after the Determination Date in each month, commencing in December 2023. |
| Determination Date: | 11th day of each month, or if the 11th day is not a business day, the next succeeding business day, commencing in December 2023. |
| Assumed Final Distribution Date: | The Distribution Date in November 2028 which is the latest anticipated repayment date of the Certificates. |
| Rated Final Distribution Date: | The Distribution Date in November 2056. |
| Tax Treatment: | The Publicly Offered Certificates are expected to be treated as REMIC “regular interests” for U.S. federal income tax purposes. |
| Form of Offering: | The Class A-1, Class A-2, Class A-3, Class X-A, Class X-B, Class A-S, Class B and Class C Certificates (the “Publicly Offered Certificates”) will be offered publicly. The Class X-D, Class X-E, Class X-F, Class D, Class E, Class F, Class G-RR, Class J-RR and Class R Certificates (the “Privately Offered Certificates”) will be offered domestically to Qualified Institutional Buyers and to Institutional Accredited Investors (other than the Class R Certificates) and to institutions that are not U.S. Persons pursuant to Regulation S (other than the Class R Certificates). |
| SMMEA Status: | The Certificates will not constitute “mortgage related securities” for purposes of SMMEA. |
| ERISA: | The Publicly Offered Certificates are expected to be ERISA eligible. |
| Optional Termination: | On any Distribution Date on which the aggregate principal balance of the pool of mortgage loans is less than 1% of the aggregate principal balance of the mortgage loans as of the cut-off date, certain entities specified in the Preliminary Prospectus will have the option to purchase all of the remaining mortgage loans (and all property acquired through exercise of remedies in respect of any mortgage loan) at the price specified in the Preliminary Prospectus. Refer to “Pooling and Servicing Agreement—Termination; Retirement of Certificates” in the Preliminary Prospectus. |
| Minimum Denominations: | The Publicly Offered Certificates (other than the Class X-A and Class X-B Certificates) will be issued in minimum denominations of $10,000 and integral multiples of $1 in excess of $10,000. The Class X-A and Class X-B will be issued in minimum denominations of $1,000,000 and in integral multiples of $1 in excess of $1,000,000. |
| Settlement Terms: | DTC, Euroclear and Clearstream Banking. |
| Analytics: | The transaction is expected to be modeled by Bloomberg, L.P., Trepp, LLC, Intex Solutions, Inc., BlackRock Financial Management, Inc., CMBS.com, Inc., Moody’s Analytics, Markit Group Limited, RealINSIGHT, Thompson Reuters Corporation, Intercontinental Exchange | ICE Data Services, KBRA Analytics, LLC and DealView Technologies Ltd. |
| Risk Factors: | THE CERTIFICATES INVOLVE CERTAIN RISKS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. REFER TO THE “SUMMARY OF RISK FACTORS” AND “RISK FACTORS” SECTIONS OF THE PRELIMINARY PROSPECTUS. |
| 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 2023-5C2 | |
| Collateral Characteristics | ||
Mortgage Loan Seller | Number of | Number of Mortgaged | Aggregate | % of IPB | Roll-up | Roll-up |
| GSMC | 7 | 20 | $197,131,250 | 25.4% | $197,131,250 | 25.4% |
| BMO | 2 | 2 | $41,500,000 | 5.3% | $126,166,666 | 16.2% |
| CREFI | 4 | 8 | $89,850,000 | 11.6% | $118,850,000 | 15.3% |
| SGFC | 3 | 3 | $97,900,000 | 12.6% | $97,900,000 | 12.6% |
| LMF | 3 | 3 | $70,175,000 | 9.0% | $75,841,667 | 9.8% |
| GACC | 5 | 14 | $72,779,000 | 9.4% | $72,779,000 | 9.4% |
| SMC | 5 | 5 | $26,938,474 | 3.5% | $46,938,474 | 6.0% |
| UBS AG | 3 | 3 | $41,438,541 | 5.3% | $41,438,541 | 5.3% |
BMO, SMC | 1 | 1 | $62,500,000 | 8.0% | - | - |
CREFI, BMO | 1 | 2 | $58,000,000 | 7.5% | - | - |
| BMO, LMF | 1 | 1 | $18,833,333 | 2.4% | - | - |
| Total: | 35 | 62 | $777,045,598 | 100.0% | $777,045,598 | 100.0% |
| Loan Pool | ||
| Initial Pool Balance (“IPB”): | $777,045,598 | |
| Number of Mortgage Loans: | 35 | |
| Number of Mortgaged Properties: | 62 | |
| Average Cut-off Date Balance per Mortgage Loan: | $22,201,303 | |
| Weighted Average Current Mortgage Rate: | 7.26213% | |
| 10 Largest Mortgage Loans as % of IPB: | 62.5% | |
| Weighted Average Remaining Term to Maturity: | 59 months | |
| Weighted Average Seasoning: | 1 month | |
| Credit Statistics | ||
| Weighted Average UW NCF DSCR(1)(2): | 1.71x | |
| Weighted Average UW NOI Debt Yield(1): | 12.9% | |
| Weighted Average Cut-off Date Loan-to-Value Ratio (“LTV”)(1)(3): | 51.9% | |
| Weighted Average Maturity Date/ARD LTV(1)(3): | 51.9% | |
| Other Statistics | ||
| % of Mortgage Loans with Additional Debt: | 19.5% | |
| % of Mortgage Loans with Single Tenants(4): | 12.0% | |
| % of Mortgage Loans secured by Multiple Properties: | 23.6% | |
| Amortization | ||
| Weighted Average Original Amortization Term(5): | 338 months | |
| Weighted Average Remaining Amortization Term(5): | 335 months | |
| % of Mortgage Loans with Interest-Only: | 98.4% | |
| % of Mortgage Loans with Amortizing Balloon: | 1.6% | |
| Lockboxes(6) | ||
| % of Mortgage Loans with Hard Lockboxes: | 68.3% | |
| % of Mortgage Loans with Springing Lockboxes: | 17.4% | |
| % of Mortgage Loans with Soft (Residential); Hard (Commercial) Lockboxes: | 9.7% | |
| % of Mortgage Loans with Soft Lockboxes: | 3.2% | |
| % of Mortgage Loans with no Lockboxes: | 1.4% | |
| Reserves | ||
| % of Mortgage Loans Requiring Monthly Tax Reserves: | 74.4% | |
| % of Mortgage Loans Requiring Monthly Insurance Reserves: | 51.6% | |
| % of Mortgage Loans Requiring Monthly CapEx Reserves: | 68.9% | |
| % of Mortgage Loans Requiring Monthly TI/LC Reserves(7): | 31.7% | |
(See footnotes on following page)
| 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 2023-5C2 | |
| Collateral Characteristics | ||
| (1) | In the case of Loan Nos. 1, 2, 4, 5, 6, 7, 8, 9, 14, 15, 17, 18, 20 and 23, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date Loan-to-Value Ratio and Maturity Date/ARD Loan-to-Value Ratio calculations include the related Pari Passu Companion Loan(s). In the case of Loan Nos. 1, 8, 15, 17 and 23, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date Loan-to-Value Ratio and Maturity Date/ARD Loan-to-Value Ratio calculations exclude the related mezzanine loans. |
| (2) | For the mortgage loans that are interest-only for the entire term and accrue interest on an Actual/360 basis, the Monthly Debt Service Amount ($) was calculated as 1/12th of the product of (i) the Original Balance ($), (ii) the Interest Rate % and (iii) 365/360. |
| (3) | In the case of Loan No. 8, the Cut-off Date LTV and Maturity/ARD LTV are calculated by using an appraised value based on a “prospective market value upon stabilization” assumption. In the case of Loan Nos. 11 and 14, the Cut-off Date LTV and Maturity/ARD LTV are calculated by using an appraised value based on an “as portfolio” assumption. In the case of Loan No. 18, the Cut-off Date LTV and Maturity/ARD LTV are calculated by using an appraised value based on an “as is (extraordinary assumption)”. Refer to the definition of “Appraised Value” under “Description of the Mortgage Pool—Certain Calculations and Definitions” in the Preliminary Prospectus for additional details. |
| (4) | Excludes mortgage loans that are secured by multiple properties with multiple tenants but includes one mortgage loan that is secured by multiple properties and partially secured by single tenant. |
| (5) | Excludes 33 mortgage loans that are interest-only for the entire term or until the anticipated repayment date. |
| (6) | For a more detailed description of lockboxes, refer to “Description of the Mortgage Pool—Certain Calculations and Definitions” and “—Certain Terms of the Mortgage Loans—Mortgaged Property Accounts” in the Preliminary Prospectus. |
| (7) | Calculated only with respect to the Cut-off Date Balance of mortgage loans secured or partially secured by office, industrial, retail, hospitality (with commercial tenants) and mixed use 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. | ||
| 8 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| 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(1)(2) | UW NOI Debt Yield(1) | Cut-off Date LTV(1)(3) | Maturity Date/ARD LTV(1)(3) |
| 1 | Piazza Alta | Philadelphia, PA | SGFC | 1 | $75,000,000 | 9.7% | 695 | Multifamily | 2.46x | 11.8% | 39.5% | 39.5% |
| 2 | Westfarms | West Hartford, CT | GSMC | 1 | $65,000,000 | 8.4% | 501,990 | Retail | 1.76x | 14.4% | 44.2% | 44.2% |
| 3 | Shadow Lake Towne Center | Papillion, NE | LMF | 1 | $62,500,000 | 8.0% | 531,557 | Retail | 1.48x | 9.7% | 67.4% | 67.4% |
| 4 | Arcola Corporate Campus | Collegeville, PA | BMO, SMC | 1 | $62,500,000 | 8.0% | 1,853,053 | Mixed Use | 2.01x | 16.3% | 48.7% | 48.7% |
| 5 | 369 Lexington Avenue & 2 West 46th Street | New York, NY | CREFI, BMO | 2 | $58,000,000 | 7.5% | 302,093 | Office | 1.30x | 11.2% | 59.3% | 59.3% |
| 6 | Lake Merritt Plaza | Oakland, CA | GSMC | 1 | $45,000,000 | 5.8% | 489,777 | Office | 2.39x | 20.6% | 33.0% | 33.0% |
| 7 | Hilton Garden Inn Atlanta Downtown | Atlanta, GA | BMO | 1 | $31,500,000 | 4.1% | 242 | Hospitality | 1.55x | 15.2% | 51.8% | 51.8% |
| 8 | Scottsdale Gilbert Retail Portfolio | Various, AZ | CREFI | 2 | $30,000,000 | 3.9% | 432,068 | Retail | 1.30x | 10.8% | 56.5% | 56.5% |
| 9 | River Centre | Red Bank, NJ | UBS AG | 1 | $30,000,000 | 3.9% | 553,039 | Office | 1.79x | 14.7% | 48.2% | 48.2% |
| 10 | Lacey Market Square | Lacey, WA | CREFI | 1 | $26,100,000 | 3.4% | 276,499 | Retail | 1.32x | 11.5% | 57.5% | 57.5% |
| Top 3 Total/Weighted Average | 3 | $202,500,000 | 26.1% | 1.93x | 12.0% | 49.6% | 49.6% | |||||
| Top 5 Total/Weighted Average | 6 | $323,000,000 | 41.6% | 1.83x | 12.7% | 51.2% | 51.2% | |||||
| Top 10 Total/Weighted Average | 12 | $485,600,000 | 62.5% | 1.80x | 13.5% | 50.0% | 50.0% | |||||
| Non-Top 10 Total/Weighted Average(2) | 50 | $291,445,598 | 37.5% | 1.55x | 12.0% | 55.1% | 54.9% | |||||
| (1) | In the case of Loan Nos. 1, 2, 4, 5, 6, 7, 8, 9, 14, 15, 17, 18, 20 and 23, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date/ARD LTV calculations include the related Pari Passu Companion Loan(s). In the case of Loan Nos. 1, 8, 15, 17 and 23, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date/ARD LTV calculations exclude the related mezzanine loans. |
| (2) | For the mortgage loans that are interest-only for the entire term and accrue interest on an Actual/360 basis, the Monthly Debt Service Amount ($) was calculated as 1/12th of the product of (i) the Original Balance ($), (ii) the Interest Rate % and (iii) 365/360. |
| (3) | In the case of Loan No. 8, the Cut-off Date LTV and Maturity/ARD LTV are calculated by using an appraised value based on a “prospective market value upon stabilization” assumption. In the case of Loan Nos. 11 and 14, the Cut-off Date LTV and Maturity/ARD LTV are calculated by using an appraised value based on an “as portfolio” assumption. In the case of Loan No. 18, the Cut-off Date LTV and Maturity/ARD LTV are calculated by using an appraised value based on an “as is (extraordinary assumption)”. Refer to the definition of “Appraised Value” under “Description of the Mortgage Pool—Certain Calculations and Definitions” in the Preliminary Prospectus for additional details. |
| 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 2023-5C2 | |
| Collateral Characteristics | ||
| Pari Passu Companion Loan Summary |
No. | Loan Name | Mortgage Loan Seller | Trust Cut-off Date Balance | Aggregate Pari Passu Loan Cut-off Date Balance(1) | Controlling Pooling/Trust & Servicing Agreement | Master Servicer | Special Servicer | Related Pari Passu Loan(s) Securitizations | Related Pari Passu Loan(s) Original Balance(1) |
| 1 | Piazza Alta | SGFC | $75,000,000 | $110,900,000 | BMO 2023-5C2 | KeyBank | Greystone | Future Securitization(s) | $110,900,000 |
| 2 | Westfarms | GSMC | $65,000,000 | $177,000,000 | BMO 2023-5C2 | KeyBank | Greystone | BANK5 2023-5YR3 Future Securitization(s) | $45,000,000 $132,000,000 |
| 4 | Arcola Corporate Campus | BMO, SMC | $62,500,000 | $32,500,000 | BMO 2023-5C2 | KeyBank | Greystone | Future Securitization(s) | $32,500,000 |
| 5 | 369 Lexington Avenue & 2 West 46th Street | CREFI, BMO | $58,000,000 | $43,450,000 | BMO 2023-5C2 | KeyBank | Greystone | Future Securitization(s) | $43,450,000 |
| 6 | Lake Merritt Plaza | GSMC | $45,000,000 | $35,000,000 | BMO 2023-5C2 | KeyBank | Greystone | Future Securitization(s) | $35,000,000 |
| 7 | Hilton Garden Inn Atlanta Downtown | BMO | $31,500,000 | $8,000,000 | BMO 2023-5C2 | KeyBank | Greystone | Future Securitization(s) | $8,000,000 |
| 8 | Scottsdale Gilbert Retail Portfolio | CREFI | $30,000,000 | $51,000,000 | BMO 2023-5C2(2) | KeyBank(2) | Greystone(2) | Future Securitization(s) | $51,000,000 |
| 9 | River Centre | UBS AG | $30,000,000 | $25,000,000 | BMO 2023-5C2 | KeyBank | Greystone | Future Securitization(s) | $25,000,000 |
| 14 | Merit Hill Self Storage | GSMC | $20,000,000 | $65,000,000 | BMO 2023-5C2(2) | KeyBank(2) | Greystone(2) | Future Securitization(s) | $65,000,000 |
| 15 | 11 West 42nd Street | BMO, LMF | $18,833,333 | $255,166,667 | BANK5 2023-5YR3 | Wells Fargo | Greystone | BMO 2023-5C1 BMO 2023-C6 BANK5 2023-5YR3 BBCMS 2023-C21 Future Securitization(s) | $62,500,000 $25,000,000 $75,000,000 $15,000,000 $77,666,667 |
| 17 | California High Tech Logistics | SGFC | $18,000,000 | $52,000,000 | BMO 2023-5C1 | KeyBank | 3650 REIT | BMO 2023-5C1 | $52,000,000 |
| 18 | Short Pump Town Center | GSMC | $17,500,000 | $162,500,000 | BANK5 2023-5YR3 | Wells Fargo | Greystone | BMO 2023-5C1 BANK5 2023-5YR3 Future Securitization(s) | $62,500,000 $80,000,000 $20,000,000 |
| 20 | Overlook at Ballantyne | GACC | $15,000,000 | $79,000,000 | BMO 2023-5C2(2) | KeyBank(2) | Greystone(2) | Future Securitization(s) | $79,000,000 |
| 23 | Harborside 2-3 | BMO | $10,000,000 | $215,000,000 | BMARK 2023-V2 | Midland | 3650 REIT | BMO 2023-C5 BMO 2023-5C1 BMARK 2023-B39 BMARK 2023-V2 BMARK 2023-V3 BANK5 2023-5YR3 Future Securitization(s) | $30,000,000 $30,000,000 $25,000,000 $65,000,000 $27,500,000 $20,000,000 $17,500,000 |
| (1) | In the case of Loan Nos. 1, 8, 15, 17 and 23, the Aggregate Pari Passu Loan Cut-off Date Balance and Related Pari Passu Loan(s) Original Balance exclude the related mezzanine loan(s). |
| (2) | In the case of Loan Nos. 8, 14 and 20, until the securitization of the related controlling pari passu companion loan, the related whole loan will be serviced and administered pursuant to the pooling and servicing agreement for the BMO 2023-5C2 securitization transaction by the parties thereto. Upon the securitization of the related controlling pari passu companion loan, servicing of the related whole loan will shift to the servicers under the servicing agreement with respect to such future securitization transaction, which servicing agreement will become the Controlling Pooling/Trust & Servicing Agreement. |
| 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 2023-5C2 | |
| Collateral Characteristics | ||
| Additional Debt Summary |
No. | Loan Name | Trust | Pari Passu Loan(s) Cut-off Date Balance | Subordinate Debt Cut-off Date Balance(1) | Total Debt Cut-off Date Balance | Mortgage Loan UW NCF DSCR(2) | Total Debt UW NCF DSCR | Mortgage Loan | Total Debt Cut-off Date LTV(3) | Mortgage Loan UW NOI Debt Yield(2) | Total Debt UW NOI Debt Yield |
| 1 | Piazza Alta | $75,000,000 | $110,900,000 | $126,100,000 | $312,000,000 | 2.46x | 1.10x | 39.5% | 66.3% | 11.8% | 7.0% |
| 8 | Scottsdale Gilbert Retail Portfolio | $30,000,000 | $51,000,000 | $7,000,000 | $88,000,000 | 1.30x | 1.14x | 56.5% | 61.3% | 10.8% | 9.9% |
| 15 | 11 West 42nd Street | $18,833,333 | $255,166,667 | $56,000,000 | $330,000,000 | 1.39x | 1.00x | 49.4% | 59.5% | 11.6% | 9.6% |
| 17 | California High Tech Logistics | $18,000,000 | $52,000,000 | $10,000,000 | $80,000,000 | 1.33x | 1.13x | 43.4% | 49.6% | 11.2% | 9.8% |
| 23 | Harborside 2-3 | $10,000,000 | $215,000,000 | $55,000,000 | $280,000,000 | 2.36x | 1.64x | 56.8% | 70.7% | 14.7% | 11.8% |
| (1) | In the case of Loan Nos. 1, 8, 15, 17 and 23, subordinate debt represents one subordinate mezzanine loan. |
| (2) | Mortgage Loan UW NCF DSCR, Mortgage Loan Cut-off Date LTV and Mortgage Loan UW NOI Debt Yield calculations include any related Pari Passu Companion Loans (if applicable), but exclude the related one or more mezzanine loans. |
| (3) | In the case of Loan No. 8, the Cut-off Date LTV and Maturity/ARD LTV are calculated by using an appraised value based on a “prospective market value upon stabilization” assumption. |
| 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 2023-5C2 | |
| Collateral Characteristics | ||
| Mortgaged Properties by Type(1) |
Weighted Average | |||||||||
| Property Type | Property Subtype | Number of Properties | Cut-off Date Principal Balance | % of IPB | UW NCF DSCR(2)(3) | UW NOI DY(2) | Cut-off Date LTV(2)(4) | Maturity Date/ARD LTV(2)(4) | |
| Retail | Anchored | 4 | $118,600,000 | 15.3 | % | 1.40x | 10.4% | 62.5% | 62.5% |
| Super Regional Mall | 1 | 65,000,000 | 8.4 | 1.76x | 14.4% | 44.2% | 44.2% | ||
| Open-Air Lifestyle Center | 1 | 17,500,000 | 2.3 | 1.61x | 14.3% | 47.6% | 47.6% | ||
| Unanchored | 1 | 9,840,000 | 1.3 | 1.30x | 10.9% | 41.2% | 41.2% | ||
| Subtotal: | 7 | $210,940,000 | 27.1 | % | 1.52x | 12.0% | 54.6% | 54.6% | |
| Office | CBD | 5 | $131,833,333 | 17.0 | % | 1.77x | 14.7% | 48.7% | 48.7% |
| Suburban | 3 | 53,989,000 | 6.9 | 1.65x | 13.5% | 53.2% | 53.2% | ||
| Medical | 1 | 15,300,000 | 2.0 | 1.32x | 11.0% | 56.5% | 56.5% | ||
| Subtotal: | 9 | $201,122,333 | 25.9 | % | 1.70x | 14.1% | 50.5% | 50.5% | |
| Multifamily | Luxury High Rise | 1 | $75,000,000 | 9.7 | % | 2.46x | 11.8% | 39.5% | 39.5% |
| Low Rise | 12 | 39,425,000 | 5.1 | 1.36x | 9.8% | 65.0% | 65.0% | ||
| Garden | 2 | 12,900,000 | 1.7 | 1.52x | 13.6% | 46.4% | 46.4% | ||
| Mid Rise | 1 | 5,250,000 | 0.7 | 1.28x | 9.7% | 66.5% | 66.5% | ||
| Subtotal: | 16 | $132,575,000 | 17.1 | % | 1.99x | 11.3% | 48.8% | 48.8% | |
| Industrial | Warehouse/Distribution | 3 | $36,136,250 | 4.7 | % | 1.66x | 12.5% | 46.4% | 46.4% |
| Warehouse | 3 | 23,838,000 | 3.1 | 1.45x | 11.9% | 63.5% | 63.5% | ||
| Manufacturing/Warehouse | 1 | 20,520,000 | 2.6 | 2.60x | 16.6% | 39.5% | 39.5% | ||
| Manufacturing | 1 | 8,322,000 | 1.1 | 1.28x | 11.1% | 58.2% | 58.2% | ||
| Flex | 1 | 7,988,541 | 1.0 | 1.33x | 11.2% | 56.1% | 53.2% | ||
| Subtotal: | 9 | $96,804,791 | 12.5 | % | 1.75x | 13.0% | 51.0% | 50.7% | |
| Mixed Use | Office/Lab | 1 | $62,500,000 | 8.0 | % | 2.01x | 16.3% | 48.7% | 48.7% |
| Multifamily/Retail | 2 | 7,675,000 | 1.0 | 1.21x | 9.3% | 74.5% | 74.5% | ||
| Retail/Multifamily | 1 | 1,590,000 | 0.2 | 1.28x | 11.1% | 58.2% | 58.2% | ||
| Subtotal: | 4 | $71,765,000 | 9.2 | % | 1.91x | 15.4% | 51.7% | 51.7% | |
| Hospitality | Full Service | 1 | $31,500,000 | 4.1 | % | 1.55x | 15.2% | 51.8% | 51.8% |
| Limited Service | 2 | 8,888,474 | 1.1 | 1.76x | 17.4% | 55.8% | 54.2% | ||
| Subtotal: | 3 | $40,388,474 | 5.2 | % | 1.60x | 15.7% | 52.7% | 52.3% | |
| Self Storage | Self Storage | 13 | $20,000,000 | 2.6 | % | 1.20x | 8.6% | 59.9% | 59.9% |
| Manufactured Housing | Manufactured Housing | 1 | $3,450,000 | 0.4 | % | 1.25x | 9.6% | 63.3% | 63.3% |
| Total / Weighted Average: | 62 | $777,045,598 | 100.0 | % | 1.71x | 12.9% | 51.9% | 51.9% | |
| (1) | Because this table presents information relating to the mortgaged properties and not mortgage loans, the information for mortgage loans secured by more than one mortgaged property is based on allocated loan amounts, individual appraised values, net cash flow or net operating income with respect to such individual mortgaged properties, as applicable. |
| (2) | In the case of Loan Nos. 1, 2, 4, 5, 6, 7, 8, 9, 14, 15, 17, 18, 20 and 23, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date/ARD LTV calculations include the related Pari Passu Companion Loan(s). In the case of Loan Nos. 1, 8, 15, 17 and 23, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date/ARD LTV calculations exclude the related mezzanine loans. |
| (3) | For the mortgage loans that are interest-only for the entire term or until the anticipated repayment date and accrue interest on an Actual/360 basis, the Monthly Debt Service Amount ($) was calculated as 1/12th of the product of (i) the Original Balance ($), (ii) the Interest Rate % and (iii) 365/360. |
| (4) | In the case of Loan No. 8, the Cut-off Date LTV and Maturity/ARD LTV are calculated by using an appraised value based on a “prospective market value upon stabilization” assumption. In the case of Loan Nos. 11 and 14, the Cut-off Date LTV and Maturity/ARD LTV are calculated by using an appraised value based on an “as portfolio” assumption. In the case of Loan No. 18, the Cut-off Date LTV and Maturity/ARD LTV are calculated by using an appraised value based on an “as is (extraordinary assumption)”. Refer to the definition of “Appraised Value” under “Description of the Mortgage Pool—Certain Calculations and Definitions” in the Preliminary Prospectus for additional details. |
| 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 2023-5C2 | |
| Collateral Characteristics | ||
| Mortgaged Properties by Location(1) |
Weighted Average | |||||||
State | Number of Properties | Cut-off Date Principal Balance | % of IPB | UW NCF DSCR(2)(3) | UW NOI Debt Yield(2) | Cut-off Date LTV(2)(4) | Maturity Date/ARD LTV(2)(4) |
| Pennsylvania | 2 | $137,500,000 | 17.7% | 2.26x | 13.8% | 43.7% | 43.7% |
| California | 7 | 115,967,365 | 14.9 | 1.96x | 15.7% | 42.5% | 42.3% |
| New York | 9 | 100,348,333 | 12.9 | 1.34x | 11.0% | 59.5% | 59.5% |
| New Jersey | 7 | 81,149,000 | 10.4 | 1.69x | 13.5% | 55.5% | 55.5% |
| Connecticut | 1 | 65,000,000 | 8.4 | 1.76x | 14.4% | 44.2% | 44.2% |
| Nebraska | 1 | 62,500,000 | 8.0 | 1.48x | 9.7% | 67.4% | 67.4% |
| Georgia | 2 | 36,188,474 | 4.7 | 1.58x | 15.8% | 51.4% | 51.0% |
| Arizona | 2 | 30,000,000 | 3.9 | 1.30x | 10.8% | 56.5% | 56.5% |
| Washington | 1 | 26,100,000 | 3.4 | 1.32x | 11.5% | 57.5% | 57.5% |
| Nevada | 2 | 18,467,300 | 2.4 | 1.62x | 12.2% | 45.0% | 45.0% |
| Virginia | 1 | 17,500,000 | 2.3 | 1.61x | 14.3% | 47.6% | 47.6% |
| North Carolina | 1 | 15,000,000 | 1.9 | 1.39x | 10.6% | 62.4% | 62.4% |
| Arkansas | 6 | 11,981,000 | 1.5 | 1.41x | 11.1% | 61.7% | 61.7% |
| Missouri | 4 | 11,669,000 | 1.5 | 1.41x | 11.1% | 61.7% | 61.7% |
| Illinois | 1 | 10,975,000 | 1.4 | 1.17x | 8.0% | 70.8% | 70.8% |
| Maryland | 3 | 10,822,832 | 1.4 | 1.89x | 13.1% | 50.7% | 50.7% |
| Texas | 7 | 8,598,353 | 1.1 | 1.20x | 8.6% | 59.9% | 59.9% |
| Florida | 1 | 8,000,000 | 1.0 | 1.62x | 15.1% | 39.8% | 39.8% |
| Colorado | 2 | 3,792,000 | 0.5 | 1.20x | 8.6% | 59.9% | 59.9% |
| Indiana | 1 | 3,450,000 | 0.4 | 1.25x | 9.6% | 63.3% | 63.3% |
| Massachusetts | 1 | 2,036,941 | 0.3 | 1.20x | 8.6% | 59.9% | 59.9% |
| Total / Weighted Average: | 62 | $777,045,598 | 100.0% | 1.71x | 12.9% | 51.9% | 51.9% |
| (1) | Because this table presents information relating to the mortgaged properties and not mortgage loans, the information for mortgage loans secured by more than one mortgaged property is based on allocated loan amounts, individual appraised values, net cash flow or net operating income with respect to such individual mortgaged properties, as applicable. |
| (2) | In the case of Loan Nos. 1, 2, 4, 5, 6, 7, 8, 9, 14, 15, 17, 18, 20 and 23, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date/ARD LTV calculations include the related Pari Passu Companion Loan(s). In the case of Loan Nos. 1, 8, 15, 17 and 23, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date/ARD LTV calculations exclude the related mezzanine loans. |
| (3) | For the mortgage loans that are interest-only for the entire term or until the anticipated repayment date and accrue interest on an Actual/360 basis, the Monthly Debt Service Amount ($) was calculated as 1/12th of the product of (i) the Original Balance ($), (ii) the Interest Rate % and (iii) 365/360. |
| (4) | In the case of Loan No. 8, the Cut-off Date LTV and Maturity/ARD LTV are calculated by using an appraised value based on a “prospective market value upon stabilization” assumption. In the case of Loan Nos. 11 and 14, the Cut-off Date LTV and Maturity/ARD LTV are calculated by using an appraised value based on an “as portfolio” assumption. In the case of Loan No. 18, the Cut-off Date LTV and Maturity/ARD LTV are calculated by using an appraised value based on an “as is (extraordinary assumption)”. Refer to the definition of “Appraised Value” under “Description of the Mortgage Pool—Certain Calculations and Definitions” in the Preliminary Prospectus for additional details. |
| 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 2023-5C2 | |
| Collateral Characteristics | ||
| Cut-off Date Principal Balance |
Weighted Average | |||||||||||||
| Range of Cut-off Date Principal Balances | Number of Loans | Cut-off Date Principal Balance | % of IPB | Mortgage Rate | Remaining Loan Term | UW NCF DSCR(1)(2) | UW NOI DY(1) | Cut-off Date LTV(1)(3) | Maturity Date/ARD LTV(1)(3) | ||||
| $2,025,000 | - | $4,999,999 | 6 | $24,063,474 | 3.1 | % | 7.44306% | 58 | 1.51x | 12.4% | 61.1% | 60.5% | |
| $5,000,000 | - | $9,999,999 | 6 | 45,717,541 | 5.9 | 7.76265% | 58 | 1.41x | 12.0% | 53.2% | 52.7% | ||
| $10,000,000 | - | $19,999,999 | 9 | 136,494,583 | 17.6 | 7.45699% | 57 | 1.52x | 11.9% | 53.7% | 53.7% | ||
| $20,000,000 | - | $29,999,999 | 5 | 111,270,000 | 14.3 | 7.33886% | 59 | 1.58x | 11.9% | 56.8% | 56.8% | ||
| $30,000,000 | - | $39,999,999 | 3 | 91,500,000 | 11.8 | 8.08016% | 59 | 1.55x | 13.6% | 52.2% | 52.2% | ||
| $40,000,000 | - | $75,000,000 | 6 | 368,000,000 | 47.4 | 6.88924% | 59 | 1.90x | 13.6% | 49.0% | 49.0% | ||
| Total / Weighted Average: | 35 | $777,045,598 | 100.0 | % | 7.26213% | 59 | 1.71x | 12.9% | 51.9% | 51.9% | |||
| Mortgage Interest Rates |
Weighted Average | ||||||||||||
| Range of Mortgage Interest Rates | Number of Loans | Cut-off Date Principal Balance | % of IPB | Mortgage Rate | Remaining Loan Term | UW NCF DSCR(1)(2) | UW NOI DY(1) | Cut-off Date LTV(1)(3) | Maturity Date/ARD LTV(1)(3) | |||
| 4.67614% | - | 4.99999% | 2 | 79,800,000 | 10.3 | % | 4.68690% | 59 | 2.40x | 11.5% | 41.2% | 41.2% |
| 5.00000% | - | 5.99999% | 1 | 10,000,000 | 1.3 | 5.84000% | 53 | 2.36x | 14.7% | 56.8% | 56.8% | |
| 6.00000% | - | 6.49999% | 3 | 101,156,250 | 13.0 | 6.35697% | 59 | 1.80x | 11.8% | 58.5% | 58.5% | |
| 6.50000% | - | 6.99999% | 1 | 10,975,000 | 1.4 | 6.75000% | 57 | 1.17x | 8.0% | 70.8% | 70.8% | |
| 7.00000% | - | 7.49999% | 9 | 162,321,874 | 20.9 | 7.29627% | 58 | 1.59x | 12.7% | 55.5% | 55.3% | |
| 7.50000% | - | 7.99999% | 9 | 235,214,000 | 30.3 | 7.88158% | 59 | 1.52x | 12.6% | 53.5% | 53.5% | |
| 8.00000% | - | 8.55500% | 10 | 177,578,474 | 22.9 | 8.19502% | 59 | 1.69x | 15.1% | 46.1% | 46.1% | |
| Total / Weighted Average: | 35 | $777,045,598 | 100.0 | % | 7.26213% | 59 | 1.71x | 12.9% | 51.9% | 51.9% | ||
| Original Term to Maturity in Months |
Weighted Average | ||||||||||
| Original Term to Maturity in Months | Number of Loans | Cut-off Date Principal Balance | % of IPB | Mortgage Rate | Remaining Loan Term | UW NCF DSCR(1)(2) | UW NOI DY(1) | Cut-off Date LTV(1)(3) | Maturity Date/ARD LTV(1)(3) | |
| 56 | 1 | $15,000,000 | 1.9 | % | 7.38750% | 55 | 1.39x | 10.6% | 62.4% | 62.4% |
| 60 | 34 | 762,045,598 | 98.1 | 7.25966% | 59 | 1.71x | 13.0% | 51.7% | 51.7% | |
| Total / Weighted Average: | 35 | $777,045,598 | 100.0 | % | 7.26213% | 59 | 1.71x | 12.9% | 51.9% | 51.9% |
| Remaining Term to Maturity in Months |
| Weighted Average | |||||||||||
| Range of Remaining Term to Maturity in Months | Number of Loans | Cut-off Date Principal Balance | % of IPB | Mortgage Rate | Remaining Loan Term | UW NCF DSCR(1)(2) | UW NOI DY(1) | Cut-off Date LTV(1)(3) | Maturity Date/ARD LTV(1)(3) | ||
| 53 | - | 60 | 35 | $777,045,598 | 100.0% | 7.26213% | 59 | 1.71x | 12.9% | 51.9% | 51.9% |
| Total / Weighted Average: | 35 | $777,045,598 | 100.0% | 7.26213% | 59 | 1.71x | 12.9% | 51.9% | 51.9% | ||
| (1) | In the case of Loan Nos. 1, 2, 4, 5, 6, 7, 8, 9, 14, 15, 17, 18, 20 and 23, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date/ARD LTV calculations include the related Pari Passu Companion Loan(s). In the case of Loan Nos. 1, 8, 15, 17 and 23, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date/ARD LTV calculations exclude the related mezzanine loans. |
| (2) | For the mortgage loans that are interest-only for the entire term or until the anticipated repayment date and accrue interest on an Actual/360 basis, the Monthly Debt Service Amount ($) was calculated as 1/12th of the product of (i) the Original Balance ($), (ii) the Interest Rate % and (iii) 365/360. |
| (3) | In the case of Loan No. 8, the Cut-off Date LTV and Maturity/ARD LTV are calculated by using an appraised value based on a “prospective market value upon stabilization” assumption. In the case of Loan Nos. 11 and 14, the Cut-off Date LTV and Maturity/ARD LTV are calculated by using an appraised value based on an “as portfolio” assumption. In the case of Loan No. 18, the Cut-off Date LTV and Maturity/ARD LTV are calculated by using an appraised value based on an “as is (extraordinary assumption)”. Refer to “Description of the Mortgage Pool—Certain Calculations and Definitions—Appraised Value” in the Preliminary Prospectus for additional details. |
| 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 2023-5C2 | |
| Collateral Characteristics | ||
Original Amortization Term in Months |
| Weighted Average | ||||||||||
| Original Amortization Term in Months | Number of Loans | Cut-off Date Principal Balance | % of IPB | Mortgage Rate | Remaining Loan Term | UW NCF DSCR(1)(2) | UW NOI DY(1) | Cut-off Date LTV(1)(3) | Maturity Date/ARD LTV(1)(3) | |
| Interest Only | 33 | $764,368,583 | 98.4 | % | 7.25675% | 59 | 1.71x | 12.9% | 51.9% | 51.9% |
| 300 | 1 | 4,688,474 | 0.6 | 8.50000% | 57 | 1.82x | 19.9% | 48.8% | 45.8% | |
| 360 | 1 | 7,988,541 | 1.0 | 7.05000% | 58 | 1.33x | 11.2% | 56.1% | 53.2% | |
| Total / Weighted Average: | 35 | $777,045,598 | 100.0 | % | 7.26213% | 59 | 1.71x | 12.9% | 51.9% | 51.9% |
| Remaining Amortization Term in Months |
| Weighted Average | ||||||||||||
| Range of Remaining Amortization Term in Months | Number of Loans | Cut-off Date Principal Balance | % of IPB | Mortgage Rate | Remaining Loan Term | UW NCF DSCR(1)(2) | UW NOI DY(1) | Cut-off Date LTV(1)(3) | Maturity Date/ARD LTV(1)(3) | |||
| Interest Only | 33 | $764,368,583 | 98.4 | % | 7.25675% | 59 | 1.71x | 12.9% | 51.9% | 51.9% | ||
| 297 | - | 358 | 2 | 12,677,015 | 1.6 | 7.58627% | 58 | 1.51x | 14.4% | 53.4% | 50.5% | |
| Total / Weighted Average: | 35 | $777,045,598 | 100.0 | % | 7.26213% | 59 | 1.71x | 12.9% | 51.9% | 51.9% | ||
| Amortization Types |
Weighted Average | ||||||||||
| Amortization Types | Number of Loans | Cut-off Date Principal Balance | % of IPB | Mortgage Rate | Remaining Loan Term | UW NCF DSCR(1)(2) | UW NOI DY(1) | Cut-off Date LTV(1)(3) | Maturity Date/ARD LTV(1)(3) | |
| Interest Only | 33 | $764,368,583 | 98.4 | % | 7.25675% | 59 | 1.71x | 12.9% | 51.9% | 51.9% |
| Amortizing Balloon | 2 | 12,677,015 | 1.6 | 7.58627% | 58 | 1.51x | 14.4% | 53.4% | 50.5% | |
| Total / Weighted Average: | 35 | $777,045,598 | 100.0 | % | 7.26213% | 59 | 1.71x | 12.9% | 51.9% | 51.9% |
| Underwritten Net Cash Flow Debt Service Coverage Ratios(1)(2) |
| Weighted Average | ||||||||||||
| Range of Underwritten Net Cash Flow Debt Service Coverage Ratios | Number of Loans | Cut-off Date Principal Balance | % of IPB | Mortgage Rate | Remaining Loan Term | UW NCF DSCR(1)(2) | UW NOI DY(1) | Cut-off Date LTV(1)(3) | Maturity Date/ARD LTV(1)(3) | |||
| 1.17x | - | 1.49x | 20 | $371,211,874 | 47.8 | % | 7.48896% | 58 | 1.35x | 10.6% | 59.7% | 59.6% |
| 1.50x | - | 1.59x | 2 | 36,300,000 | 4.7 | 7.92256% | 60 | 1.54x | 14.2% | 53.9% | 53.9% | |
| 1.60x | - | 1.69x | 3 | 34,489,000 | 4.4 | 8.26597% | 57 | 1.62x | 14.5% | 47.7% | 47.7% | |
| 1.70x | - | 1.79x | 3 | 99,200,000 | 12.8 | 7.88464% | 58 | 1.77x | 14.5% | 46.2% | 46.2% | |
| 1.80x | - | 1.89x | 1 | 4,688,474 | 0.6 | 8.50000% | 57 | 1.82x | 19.9% | 48.8% | 45.8% | |
| 1.90x | - | 1.99x | 1 | 18,136,250 | 2.3 | 6.47320% | 60 | 1.98x | 13.7% | 49.4% | 49.4% | |
| 2.00x | - | 2.60x | 5 | 213,020,000 | 27.4 | 6.34181% | 59 | 2.32x | 15.6% | 41.6% | 41.6% | |
| Total / Weighted Average: | 35 | $777,045,598 | 100.0 | % | 7.26213% | 59 | 1.71x | 12.9% | 51.9% | 51.9% | ||
| (1) | In the case of Loan Nos. 1, 2, 4, 5, 6, 7, 8, 9, 14, 15, 17, 18, 20 and 23, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date/ARD LTV calculations include the related Pari Passu Companion Loan(s). In the case of Loan Nos. 1, 8, 15, 17 and 23, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date/ARD LTV calculations exclude the related mezzanine loans. |
| (2) | For the mortgage loans that are interest-only for the entire term or until the anticipated repayment date and accrue interest on an Actual/360 basis, the Monthly Debt Service Amount ($) was calculated as 1/12th of the product of (i) the Original Balance ($), (ii) the Interest Rate % and (iii) 365/360. |
| (3) | In the case of Loan No. 8, the Cut-off Date LTV and Maturity/ARD LTV are calculated by using an appraised value based on a “prospective market value upon stabilization” assumption. In the case of Loan Nos. 11 and 14, the Cut-off Date LTV and Maturity/ARD LTV are calculated by using an appraised value based on an “as portfolio” assumption. In the case of Loan No. 18, the Cut-off Date LTV and Maturity/ARD LTV are calculated by using an appraised value based on an “as is (extraordinary assumption)”. Refer to “Description of the Mortgage Pool—Certain Calculations and Definitions—Appraised Value” in the Preliminary Prospectus for additional details. |
| 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 2023-5C2 | |
| Collateral Characteristics | ||
| LTV Ratios as of the Cut-off Date(1)(3) |
| Weighted Average | ||||||||||||
| Range of Cut-off Date LTVs | Number of Loans | Cut-off Date Principal Balance | % of IPB | Mortgage Rate | Remaining Loan Term | UW NCF DSCR(1)(2) | UW NOI DY(1) | Cut-off Date LTV(1)(3) | Maturity Date/ARD LTV(1)(3) | |||
| 33.0% | - | 49.9% | 13 | $393,018,057 | 50.6 | % | 7.06000% | 58 | 2.00x | 14.7% | 43.3% | 43.3% |
| 50.0% | - | 59.9% | 11 | 225,527,541 | 29.0 | 7.81591% | 59 | 1.39x | 11.8% | 57.0% | 56.9% | |
| 60.0% | - | 64.9% | 5 | 67,300,000 | 8.7 | 7.61105% | 58 | 1.43x | 11.4% | 62.8% | 62.8% | |
| 65.0% | - | 69.9% | 3 | 72,550,000 | 9.3 | 6.36689% | 59 | 1.47x | 9.6% | 67.3% | 67.3% | |
| 70.0% | - | 75.0% | 3 | 18,650,000 | 2.4 | 7.04840% | 57 | 1.19x | 8.5% | 72.3% | 72.3% | |
| Total / Weighted Average: | 35 | $777,045,598 | 100.0 | % | 7.26213% | 59 | 1.71x | 12.9% | 51.9% | 51.9% | ||
| LTV Ratios as of the Maturity Date(1)(3) |
Weighted Average | ||||||||||||
| Range of Maturity Date LTVs | Number of Loans | Cut-off Date Principal Balance | % of IPB | Mortgage Rate | Remaining Loan Term | UW NCF DSCR(1)(2) | UW NOI DY(1) | Cut-off Date LTV(1)(3) | Maturity Date/ARD LTV(1)(3) | |||
| 33.0% | - | 49.9% | 13 | $393,018,057 | 50.6 | % | 7.06000% | 58 | 2.00x | 14.7% | 43.3% | 43.3% |
| 50.0% | - | 59.9% | 11 | 225,527,541 | 29.0 | 7.81591% | 59 | 1.39x | 11.8% | 57.0% | 56.9% | |
| 60.0% | - | 64.9% | 5 | 67,300,000 | 8.7 | 7.61105% | 58 | 1.43x | 11.4% | 62.8% | 62.8% | |
| 65.0% | - | 69.9% | 3 | 72,550,000 | 9.3 | 6.36689% | 59 | 1.47x | 9.6% | 67.3% | 67.3% | |
| 70.0% | - | 75.0% | 3 | 18,650,000 | 2.4 | 7.04840% | 57 | 1.19x | 8.5% | 72.3% | 72.3% | |
| Total / Weighted Average: | 35 | $777,045,598 | 100.0 | % | 7.26213% | 59 | 1.71x | 12.9% | 51.9% | 51.9% | ||
| Prepayment Protection |
Weighted Average | ||||||||||
| Prepayment Protection | Number of Loans | Cut-off Date Principal Balance | % of IPB | Mortgage Rate | Remaining Loan Term | UW NCF DSCR(1)(2) | UW NOI DY(1) | Cut-off Date LTV(1)(3) | Maturity Date/ARD LTV(1)(3) | |
| Defeasance | 24 | $616,692,474 | 79.4 | % | 7.23473% | 59 | 1.73x | 13.0% | 52.0% | 52.0% |
| Yield Maintenance or Defeasance | 5 | 92,489,583 | 11.9 | 6.86110% | 58 | 1.73x | 12.3% | 51.6% | 51.6% | |
| Yield Maintenance | 6 | 67,863,541 | 8.7 | 8.05763% | 58 | 1.43x | 12.9% | 51.7% | 51.4% | |
| Total / Weighted Average: | 35 | $777,045,598 | 100.0 | % | 7.26213% | 59 | 1.71x | 12.9% | 51.9% | 51.9% |
| Loan Purpose |
Weighted Average | ||||||||||
| Loan Purpose | Number of Loans | Cut-off Date Principal Balance | % of IPB | Mortgage Rate | Remaining Loan Term | UW NCF DSCR(1)(2) | UW NOI DY(1) | Cut-off Date LTV(1)(3) | Maturity Date/ARD LTV(1)(3) | |
| Refinance | 28 | $594,900,807 | 76.6 | % | 7.26653% | 59 | 1.59x | 11.9% | 54.3% | 54.3% |
| Recapitalization | 4 | 91,644,791 | 11.8 | 7.20080% | 60 | 2.26x | 17.5% | 39.7% | 39.5% | |
| Acquisition | 3 | 90,500,000 | 11.6 | 7.29526% | 56 | 1.91x | 15.1% | 48.5% | 48.5% | |
| Total / Weighted Average: | 35 | $777,045,598 | 100.0 | % | 7.26213% | 59 | 1.71x | 12.9% | 51.9% | 51.9% |
| (1) | In the case of Loan Nos. 1, 2, 4, 5, 6, 7, 8, 9, 14, 15, 17, 18, 20 and 23, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date/ARD LTV calculations include the related Pari Passu Companion Loan(s). In the case of Loan Nos. 1, 8, 15, 17 and 23, the UW NCF DSCR, UW NOI Debt Yield, Cut-off Date LTV and Maturity Date/ARD LTV calculations exclude the related mezzanine loans. |
| (2) | For the mortgage loans that are interest-only for the entire term or until the anticipated repayment date and accrue interest on an Actual/360 basis, the Monthly Debt Service Amount ($) was calculated as 1/12th of the product of (i) the Original Balance ($), (ii) the Interest Rate % and (iii) 365/360. |
| (3) | In the case of Loan No. 8, the Cut-off Date LTV and Maturity/ARD LTV are calculated by using an appraised value based on a “prospective market value upon stabilization” assumption. In the case of Loan Nos. 11 and 14, the Cut-off Date LTV and Maturity/ARD LTV are calculated by using an appraised value based on an “as portfolio” assumption. In the case of Loan No. 18, the Cut-off Date LTV and Maturity/ARD LTV are calculated by using an appraised value based on an “as is (extraordinary assumption)”. Refer to “Description of the Mortgage Pool—Certain Calculations and Definitions—Appraised Value” in the Preliminary Prospectus for additional details. |
| 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 2023-5C2 | |
| Collateral Characteristics | ||
| Previous Securitization History(1) |
| No. | Mortgage Loan Seller | Loan/Property Name | Location | Property Type | Cut-off Date Principal Balance | % of IPB | Previous Securitization |
| 5.01 | CREFI, BMO | 369 Lexington Avenue | New York, NY | Office | $31,586,989 | 4.1% | JPMBB 2013-C15 |
| 5.02 | CREFI, BMO | 2 West 46th Street | New York, NY | Office | $26,413,011 | 3.4% | JPMBB 2013-C15 |
| 7 | BMO | Hilton Garden Inn Atlanta Downtown | Atlanta, GA | Hospitality | $31,500,000 | 4.1% | JPMCC 2013-C16 |
| 10 | CREFI | Lacey Market Square | Lacey, WA | Retail | $26,100,000 | 3.4% | WFRBS 2014-C20 |
| 14.02 | GSMC | Parkglenn Self-Storage | Parker, CO | Self Storage | $2,132,941 | 0.3% | WFRBS 2014-C19, MERIT 2020-HILL |
| 14.06 | GSMC | 3803 N Navarro St | Victoria, TX | Self Storage | $1,476,235 | 0.2% | CSAIL 2015-C1 |
| 14.07 | GSMC | 2102 NW Stallings Dr | Nacogdoches, TX | Self Storage | $1,180,941 | 0.2% | CSAIL 2015-C1 |
| 14.08 | GSMC | 2005 W Wheeler Ave | Aransas Pass, TX | Self Storage | $1,129,176 | 0.1% | CSAIL 2015-C1 |
| 14.09 | GSMC | 3817 Gulf Freeway | Dickinson, TX | Self Storage | $1,048,000 | 0.1% | CSAIL 2015-C1 |
| 14.1 | GSMC | 1600 E General Cavazos Blvd | Kingsville, TX | Self Storage | $1,003,765 | 0.1% | CSAIL 2015-C1 |
| 15 | BMO, LMF | 11 West 42nd Street | New York, NY | Office | $18,833,333 | 2.4% | GSMS 2013-GC13, GSMS 2013-GC14 |
| 19 | GACC | 601 Hawaii St | El Segundo, CA | Office | $15,300,000 | 2.0% | COMM 2014-LC17 |
| 33 | SMC | Hotel Condor | Brooklyn, NY | Hospitality | $4,200,000 | 0.5% | COMM 2013-CR11 |
| (1) | The table above represents the properties for which the previously existing debt was most recently securitized, based on information provided by the related borrower or obtained through searches of a third-party database. |
| 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 2023-5C2 | |
| Structural Overview | ||
| ■ Certificates: | The “Certificates” will consist of the Class A-1, Class A-2, Class A-3, Class X-A, Class X-B, Class X-D, Class X-E, Class X-F, Class A-S, Class B, Class C, Class D, Class E, Class F, Class G-RR, Class J-RR and Class R certificates. The Certificates are also referred to as the “Non-Vertically Retained Certificates”. The Non-Vertically Retained Certificates other than the Class R Certificates are referred to as the “Non-Vertically Retained Regular Certificates”. The Class A-1, Class A-2, Class A-3, Class A-S, Class B, Class C, Class D, Class E, Class F, Class G-RR and Class J-RR certificates are collectively referred to as the “Principal Balance Certificates” or the “Non-Vertically Retained Principal Balance Certificates”. The Class X-A, Class X-B, Class X-D, Class X-E and Class X-F certificates are collectively referred to as the “Class X Certificates”. | |
| ■ Accrual: | Each Class of Certificates (other than the Class R Certificates) will accrue interest on a 30/360 basis. The Class R Certificates will not accrue interest. | |
| ■ Allocation Between Combined VRR Interest and Non-Vertically Retained Certificates: | The aggregate amount available for distribution to holders of the Non-Vertically Retained Certificates and the Combined VRR Interest on each distribution date will be: (i) the gross amount of interest, principal, yield maintenance charges and prepayment premiums collected with respect to the mortgage loans in the applicable one-month collection period, net of specified expenses of the issuing entity, including fees payable therefrom to, and losses, liabilities, advances (with interest thereon), costs and expenses reimbursable or indemnifiable therefrom to, the master servicer, the special servicer, the certificate administrator, the trustee, the operating advisor, the asset representations reviewer and CREFC®; and (ii) allocated to amounts available for distribution to the holders of the Combined VRR Interest, on the one hand, and amounts available for distribution to the holders of the Non-Vertically Retained Certificates (exclusive of the Class R certificates), on the other hand. On each distribution date, the portion of such aggregate available funds allocable to: (a) the Combined VRR Interest will be the product of such aggregate available funds multiplied by the Vertically Retained Percentage; and (b) the Non-Vertically Retained Certificates (exclusive of the Class R certificates) will at all times be the product of such aggregate available funds multiplied by the Non-Vertically Retained Percentage. See “Credit Risk Retention” and “Description of the Certificates” in the Preliminary Prospectus. The “Vertically Retained Percentage” is a fraction, expressed as a percentage, the numerator of which is the initial principal balance of the Combined VRR Interest, and the denominator of which is the sum of (x) the aggregate initial certificate balance of all classes of Non-Vertically Retained Principal Balance Certificates and (y) the initial principal balance of the Combined VRR Interest. The “Non-Vertically Retained Percentage” is the difference between 100% and the Vertically Retained Percentage. | |
| ■ Distributions: | On each Distribution Date, funds available for distribution to holders of the Non-Vertically Retained Certificates (exclusive of any portion thereof that represents the Non-Vertically Retained Percentage of (i) any yield maintenance charges and prepayment premiums collected on the mortgage loans and/or (ii) any excess interest accrued after the related anticipated repayment date on any mortgage loan with an anticipated repayment date) (“Non-Vertically Retained Available Funds”) will be distributed in the following amounts and order of priority (in each case to the extent of remaining available funds): 1. Class A-1, Class A-2, Class A-3, Class X-A, Class X-B, Class X-D, Class X-E and Class X-F certificates: to interest on the Class A-1, Class A-2, Class A-3, Class X-A, Class X-B, Class X-D, Class X-E and Class X-F certificates, up to, and pro rata in accordance with, their respective interest entitlements. 2. Class A-1, Class A-2 and Class A-3 certificates: to the extent of Non-Vertically Retained Available Funds allocable to principal received or advanced on the mortgage loans, (i) to principal on the Class A-1 certificates until their certificate balance is reduced to zero, then (ii) to principal on the Class A-2 certificates until their certificate balance is reduced to zero, all funds available for distribution of principal remaining after the distributions to the Class A-1 certificates in clause (i) above, then (iii) to principal on the Class A-3 certificates until their certificate balance is reduced to zero, all funds available for distribution of principal remaining after the distributions to the Class A-2 certificates in clause (iii) above. However, if the certificate balances of each and every class of the Class A-S, Class B, Class C, Class D, Class E, Class F, Class G-RR and Class J-RR certificates have been reduced to zero as a result of the allocation of mortgage loan losses and other unanticipated expenses to those certificates, then Non-Vertically Retained Available Funds allocable to principal will be distributed to the Class A-1, Class A-2 and Class A-3 certificates, pro rata, based on their respective certificate balances. 3. Class A-1, Class A-2 and Class A-3 certificates: to reimburse the Class A-1, Class A-2 and Class A-3 certificates, pro rata, for any unreimbursed losses on the mortgage loans that were previously |
| 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 2023-5C2 | |
| Structural Overview | ||
allocated to reduce the certificate balances of those classes, together with interest at their respective pass-through rates. 4. Class A-S certificates: (i) first, to interest on the Class A-S certificates in the amount of their interest entitlement; (ii) next, to the extent of Non-Vertically Retained Available Funds allocable to principal remaining after distributions in respect of principal to each class of Non-Vertically Retained Principal Balance Certificates with a higher principal payment priority (in this case, the Class A-1, Class A-2 and Class A-3 certificates), to principal on the Class A-S certificates until their certificate balance is reduced to zero; and (iii) next, to reimburse the Class A-S certificates for any unreimbursed losses on the mortgage loans that were previously allocated to reduce the certificate balance of that class, together with interest at its pass-through rate. 5. Class B certificates: (i) first, to interest on the Class B certificates in the amount of their interest entitlement; (ii) next, to the extent of Non-Vertically Retained Available Funds allocable to principal remaining after distributions in respect of principal to each class of Non-Vertically Retained Principal Balance Certificates with a higher principal payment priority (in this case, the Class A-1, Class A-2, Class A-3 and Class A-S certificates), to principal on the Class B certificates until their certificate balance is reduced to zero; and (iii) next, to reimburse Class B certificates for any unreimbursed losses on the mortgage loans that were previously allocated to reduce the certificate balance of that class, together with interest at its pass-through rate. 6. Class C certificates: (i) first, to interest on the Class C certificates in the amount of their interest entitlement; (ii) next, to the extent of Non-Vertically Retained Available Funds allocable to principal remaining after distributions in respect of principal to each class of Non-Vertically Retained Principal Balance Certificates with a higher principal payment priority (in this case, the Class A-1, Class A-2, Class A-3, Class A-S and Class B certificates), to principal on the Class C certificates until their certificate balance is reduced to zero; and (iii) next, to reimburse the Class C certificates for any unreimbursed losses on the mortgage loans that were previously allocated to reduce the certificate balance of that class, together with interest at its pass-through rate. 7. After the Class A-1, Class A-2, Class A-3, Class X-A, Class X-B, Class X-D, Class X-E, Class X-F, Class A-S, Class B and Class C certificates are paid all amounts to which they are entitled on such Distribution Date, the remaining Non-Vertically Retained Available Funds will be used to pay interest to the Class D, Class E, Class F, Class G-RR and Class J-RR certificates, and to pay principal to, and to reimburse (with interest) any unreimbursed losses to, the Class D, Class E, Class F, Class G-RR and Class J-RR certificates, sequentially in order, and with respect to each such class of Non-Vertically Retained Principal Balance Certificates, in a manner analogous to the Class C certificates pursuant to clause 6 above. | ||
■ Realized Losses:
| The certificate balances of the Non-Vertically Retained Principal Balance Certificates will each be reduced without distribution on any Distribution Date as a write-off to the extent of any loss realized on the mortgage loans allocated to the related class on such Distribution Date. On each Distribution Date, the Non-Vertically Retained Percentage of any such losses will be applied to the respective classes of Non-Vertically Retained Principal Balance Certificates in the following order, in each case until the related certificate balance is reduced to zero: first to the Class J-RR certificates; second, to the Class G-RR certificates; third, to the Class F certificates; fourth, to the Class E certificates; fifth, to the Class D certificates; sixth, to the Class C certificates; seventh, to the Class B certificates; eighth, to the Class A-S certificates; and, finally pro rata, to the Class A-1, Class A-2 and Class A-3 certificates, based on their then current respective certificate balances. The notional amount of each class of Class X Certificates will be reduced to reflect reductions in the certificate balance(s) of the class (or classes, as applicable) of Corresponding Principal Balance Certificates as a result of allocations of losses realized on the mortgage loans to such class(es) of Non-Vertically Retained Principal Balance Certificates. | |
| 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 2023-5C2 | |
| Structural Overview | ||
| ■ Prepayment Premiums and Yield Maintenance Charges: | On each Distribution Date, until the notional amounts of the Class X-A, Class X-B, Class X-D and Class X-E certificates and the certificate balances of the Class A-1, Class A-2, Class A-3, Class A-S, Class B, Class C, Class D and Class E certificates have been reduced to zero, the Non-Vertically Retained Percentage of each yield maintenance charge collected on the mortgage loans during the related one-month collection period (or, in the case of an outside serviced mortgage loan, that accompanied a principal prepayment included in the aggregate available funds for such Distribution Date) is required to be distributed to holders of the Non-Vertically Retained Regular Certificates (excluding holders of the Class X-F, Class F, Class G-RR and Class J-RR certificates) as follows: (a) first the Non-Vertically Retained Percentage of such yield maintenance charge will be allocated between (i) the group (the “YM Group A”) of the Class A-1, Class A-2, Class A-3 and Class X-A certificates, (ii) the group (the “YM Group A-S/B/C”) comprised of the Class A-S, Class B, Class C and Class X-B certificates, (iii) the group (the “YM Group D”) comprised of the Class X-D and Class D certificates, and (iv) the group (the “YM Group E”, and the YM Group A, the YM Group A-S/B/C, the YM Group D and the YM Group E, together, the “YM Groups”) comprised of the Class X-E and Class E certificates, pro rata, based upon the aggregate amount of principal distributed to the class or classes of Non-Vertically Retained Principal Balance Certificates in each YM Group on such Distribution Date, and (b) then the portion of such yield maintenance charge allocated to each YM Group will be further allocated as among the classes of Non-Vertically Retained Regular Certificates in such YM Group, in the following manner: (i) each class of Non-Vertically Retained Principal Balance Certificates in such YM Group will entitle the applicable certificateholders to receive on the applicable Distribution Date that portion of such yield maintenance charge equal to the product of (X) a fraction whose numerator is the amount of principal distributed to such class of Non-Vertically Retained Principal Balance Certificates on such Distribution Date and whose denominator is the total amount of principal distributed to all of the Non-Vertically Retained Principal Balance Certificates in that YM Group on such Distribution Date, (Y) except in the case of any YM Group comprised solely of one or more classes of Non-Vertically Retained Principal Balance Certificates, the Base Interest Fraction (as defined in the Preliminary Prospectus) for the related principal prepayment and such class of Non-Vertically Retained Principal Balance Certificates, and (Z) the portion of such yield maintenance charge allocated to such YM Group, and (ii) the portion of such yield maintenance charge allocated to such YM Group and remaining after such distributions with respect to the Non-Vertically Retained Principal Balance Certificates in such YM Group will be distributed to the class of Class X Certificates (if any) in such YM Group. If there is more than one class of Non-Vertically Retained Principal Balance Certificates in any YM Group entitled to distributions of principal on any particular Distribution Date on which yield maintenance charges are distributable to such classes, the aggregate portion of such yield maintenance charges allocated to such YM Group will be allocated among all such classes of Non-Vertically Retained Principal Balance Certificates up to, and on a pro rata basis in accordance with, their respective entitlements in those yield maintenance charges in accordance with the prior sentence of this paragraph. If a prepayment premium (calculated as a percentage of the amount prepaid) is imposed in connection with a prepayment rather than a yield maintenance charge, then the prepayment premium so collected will be allocated as described above. For this purpose, the discount rate used to calculate the Base Interest Fraction will be the discount rate used to determine the yield maintenance charge for mortgage loans that require payment at the greater of a yield maintenance charge or a minimum amount equal to a fixed percentage of the principal balance of the mortgage loan or, for mortgage loans that only have a prepayment premium based on a fixed percentage of the principal balance of the mortgage loan, such other discount rate as may be specified in the related loan documents. After the notional amounts of the Class X-A, Class X-B, Class X-D and Class X-E certificates and the certificate balances of the Class A-1, Class A-2, Class A-3, Class A-S, Class B, Class C, Class D and Class E certificates have been reduced to zero, the Non-Vertically Retained Percentage of all prepayment premiums and yield maintenance charges with respect to the mortgage loans will be allocated among the holders of the Class F, Class G-RR and Class J-RR certificates as provided in the BMO 2023-5C2 pooling and servicing agreement. No yield maintenance charges or prepayment premiums will be distributed to the holders of the Class X-F and Class R certificates. For a description of prepayment premiums and yield maintenance charges required on the mortgage loans, see Annex A to the Preliminary Prospectus. See also “Certain Legal Aspects of the Mortgage Loans—Default Interest and Limitations on Prepayments” in the Preliminary Prospectus. | |
| ■ Advances: | The master servicer and, if it fails to do so, the trustee, will be obligated to make P&I advances with respect to each mortgage loan in the issuing entity and, with respect to all of the mortgage loans serviced under the BMO 2023-5C2 pooling and servicing agreement, servicing advances, including paying delinquent property taxes, condominium assessments, insurance premiums and ground lease rents, but only to the extent that those advances are not deemed non-recoverable from collections on the related mortgage loan and, in the case of servicing advances, any related companion loans as described below. P&I advances are subject to reduction in connection with any appraisal reductions that may occur. The special servicer will have no obligation to make any advances, provided that, in an urgent or emergency situation requiring the making of a property protection advance, the special |
| 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 2023-5C2 | |
| Structural Overview | ||
| servicer may, in its sole discretion, make a property protection advance and will be entitled to reimbursement from the master servicer for such advance. The master servicer, the special servicer and the trustee will each be entitled to receive interest on advances they make at the prime rate (and, solely in the case of the master servicer, subject to a floor of 2.0% per annum), compounded annually. | ||
■ Serviced Mortgage Loans/Outside Serviced Mortgage Loans: | One or more whole loans may each constitute an “outside serviced whole loan”, in which case (as identified under “Collateral Characteristics—Pari Passu Companion Loan Summary” above), the BMO 2023-5C2 pooling and servicing agreement is not the Controlling PSA, and each related mortgage loan constitutes an “outside serviced mortgage loan,” each related companion loan constitutes an “outside serviced companion loan,” and each related Controlling PSA constitutes an “outside servicing agreement.” One or more whole loans may be identified in the Preliminary Prospectus as a “servicing shift whole loan”, in which case the related mortgage loan constitutes a “servicing shift mortgage loan” and each related companion loan constitutes a “servicing shift companion loan”. Any servicing shift whole loan will initially be serviced pursuant to the BMO 2023-5C2 pooling and servicing agreement during which time such mortgage loan, such whole loan and each related companion loan will be a serviced mortgage loan, a serviced whole loan and a serviced companion loan (each as defined below), respectively. However, upon the inclusion of the related controlling pari passu companion loan in a future securitization transaction, the servicing of such mortgage loan will shift to the servicing agreement governing such securitization transaction, and such mortgage loan, such whole loan and each related companion loan will be an outside serviced mortgage loan, an outside serviced whole loan and an outside serviced companion loan, respectively. All of the mortgage loans transferred to the issuing entity (other than any outside serviced mortgage loan) are sometimes referred to in this Term Sheet as the “serviced mortgage loans” and, together with any related companion loans, as the “serviced loans” (which signifies that they are being serviced by the master servicer and the special servicer under the BMO 2023-5C2 pooling and servicing agreement); each related whole loan constitutes a “serviced whole loan”; and each related companion loan constitutes a “serviced companion loan.” See “Description of the Mortgage Pool—The Whole Loans” in the Preliminary Prospectus. | |
| ■ Appraisal Reduction Amounts: | An Appraisal Reduction Amount generally will be created with respect to a required appraisal loan (which is a serviced loan as to which certain defaults, modifications or insolvency events have occurred (as further described in the Preliminary Prospectus)) in the amount, if any, by which the principal balance of such required appraisal loan, plus other amounts overdue or advanced in connection with such required appraisal loan, exceeds 90% of the appraised value of the related mortgaged property (subject to certain downward adjustments permitted under the BMO 2023-5C2 pooling and servicing agreement) plus certain escrows and reserves (including letters of credit) held with respect to such required appraisal loan; provided that, if so provided in the related co-lender agreement, the holder of a subordinate companion loan may be permitted to post cash or a letter of credit to offset some or all of an Appraisal Reduction Amount. In the case of an outside serviced mortgage loan, any Appraisal Reduction Amounts will be calculated pursuant to, and by a party to, the related outside servicing agreement. In general, any Appraisal Reduction Amount calculated with respect to a whole loan will be allocated first, to any related subordinate companion loan(s) (up to the outstanding principal balance(s) thereof), and then, to the related mortgage loan and any related pari passu companion loan(s) on a pro rata basis in accordance with their respective outstanding principal balances. As a result of an Appraisal Reduction Amount being calculated for and/or allocated to a given mortgage loan, the interest portion of any P&I advance for such mortgage loan will be reduced, which (to the extent of the Non-Vertically Retained Percentage of the reduction in such P&I advance) will have the effect of reducing the amount of interest available to the most subordinate class(es) of Certificates then outstanding (i.e., first, to the Class J-RR certificates, then, to the Class G-RR certificates, then, to the Class F certificates, then, to the Class E certificates, then, to the Class D certificates, then, to the Class C certificates, then, to the Class B certificates, then, to the Class A-S certificates, and then, pro rata based on interest entitlements, to the Class A-1, Class A-2, Class A-3, Class X-A, Class X-B, Class X-D, Class X-E and Class X-F certificates). In general, a serviced loan will cease to be a required appraisal loan, and no longer be subject to an Appraisal Reduction Amount, when the same has ceased to be a specially serviced loan (if applicable), has been brought current for at least three consecutive months and no other circumstances exist that would cause such serviced loan to be a required appraisal loan. For various purposes under the BMO 2023-5C2 pooling and servicing agreement (including, with respect to the Non-Vertically Retained Principal Balance Certificates, for purposes of determining the Non-Reduced Certificates and the Controlling Class, as well as the occurrence of a Control Termination Event and an Operating Advisor Consultation Trigger Event), the Vertically Retained Percentage of any Appraisal Reduction Amounts in respect of or allocated to the |
| 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 2023-5C2 | |
| Structural Overview | ||
mortgage loans will be allocated to notionally reduce the certificate balance of the Combined VRR Interest, and the Non-Vertically Retained Percentage of any Appraisal Reduction Amounts in respect of or allocated to the mortgage loans will be allocated to notionally reduce the certificate balances of the Non-Vertically Retained Principal Balance Certificates as follows: first, to the Class J-RR, Class G-RR, Class F, Class E, Class D, Class C, Class B and Class A-S certificates, in that order, in each case until the related certificate balance is notionally reduced to zero; and then to the Class A-1, Class A-2 and Class A-3 certificates, pro rata based on certificate balance. | ||
■ Cumulative Appraisal Reduction Amounts: | A “Cumulative Appraisal Reduction Amount”, as of any date of determination, is equal to the sum of (i) all Appraisal Reduction Amounts then in effect, and (ii) with respect to any AB Modified Loans, any Collateral Deficiency Amount then in effect. “Collateral Deficiency Amount” means, with respect to any AB Modified Loan as of any date of determination, the excess of (i) the stated principal balance of such AB Modified Loan (taking into account the related junior note(s) included therein), over (ii) the sum of (in the case of a whole loan, solely to the extent allocable to the subject mortgage loan) (x) the most recent appraised value for the related mortgaged property or mortgaged properties, plus (y) solely to the extent not reflected or taken into account in such appraised value and to the extent on deposit with, or otherwise under the control of, the lender as of the date of such determination, any capital or additional collateral contributed by the related borrower at the time the mortgage loan became (and as part of the modification related to) such AB Modified Loan for the benefit of the related mortgaged property or mortgaged properties (provided, that in the case of an outside serviced mortgage loan, the amounts set forth in this clause (y) will be taken into account solely to the extent relevant information is received), plus (z) any other escrows or reserves (in addition to any amounts set forth in the immediately preceding clause (y)) held by the lender in respect of such AB Modified Loan as of the date of such determination. For purposes of determining the identity of the Controlling Class and the existence of a Control Termination Event and an Operating Advisor Consultation Trigger Event, the Non-Vertically Retained Percentage of Collateral Deficiency Amounts will be allocable to the respective classes of Control Eligible Certificates (as defined below), in reverse alphabetical order of class designation, in a manner similar to the allocation of Appraisal Reduction Amounts to such classes. “AB Modified Loan” means any corrected mortgage loan (1) that became a corrected mortgage loan (which includes for purposes of this definition any outside serviced mortgage loan that became a “corrected” mortgage loan (or any term substantially similar thereto) pursuant to the related outside servicing agreement) due to a modification thereto that resulted in the creation of an A/B note structure (or similar structure) and as to which the new junior note(s) did not previously exist or the principal amount of the new junior note(s) was previously part of either an A note held by the trust or the original unmodified mortgage loan and (2) as to which an Appraisal Reduction Amount is not in effect. | |
| ■ Age of Appraisals: | Appraisals (which can be an update of a prior appraisal) with respect to a serviced loan are required to be no older than 9 months for purposes of determining appraisal reductions (other than the annual re-appraisal), market value, and other calculations as described in the Preliminary Prospectus. | |
| ■ Sale of Defaulted Loans: | There will be no “Fair Market Value Purchase Option”. Instead, defaulted mortgage loans will be sold in a process similar to the sale process for REO property. With respect to an outside serviced whole loan, the party acting as special servicer with respect to such outside serviced whole loan pursuant to the related outside servicing agreement (the “outside special servicer”) may offer to sell to any person (or may offer to purchase) for cash such outside serviced whole loan in accordance with the terms of the related outside servicing agreement during such time as such outside serviced whole loan constitutes a defaulted mortgage loan qualifying for sale thereunder and, in connection with any such sale, the related outside special servicer is required to sell both the applicable outside serviced mortgage loan and the related outside serviced pari passu companion loan(s) and, if so provided in the related co-lender agreement or the Controlling PSA, any related subordinate companion loan(s), together as one defaulted loan. | |
| ■ Directing Holder: |
| The “Directing Holder” with respect to any mortgage loan or whole loan serviced under the BMO 2023-5C2 pooling and servicing agreement will be: ● except (i) with respect to an excluded mortgage loan, (ii) with respect to a serviced whole loan as to which the Controlling Note is held outside the issuing entity (sometimes referred to in this Term Sheet as a “serviced outside controlled whole loan”), and (iii) during any period that a Control Termination Event has occurred and is continuing, the Controlling Class Representative; and ● with respect to any serviced outside controlled whole loan (which may include a servicing shift whole loan or any other serviced whole loan with a controlling companion loan held outside the issuing entity), if and for so long as such holder is entitled under the related co-lender agreement to exercise consent rights similar to those entitled to be exercised by the Controlling Class Representative, the holder of the related Controlling Note (during any such period, the “outside controlling note holder”). |
| 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 2023-5C2 | |
| Structural Overview | ||
| The applicable directing holder (or equivalent party) with respect to any outside serviced mortgage loan will be, in general, (i) in the event the related Controlling Note is included in the subject outside securitization transaction, the controlling class representative (or equivalent entity) under the related outside servicing agreement, and (ii) in all other cases, the third party holder of the related Controlling Note or its representative (which may be a controlling class representative (or equivalent entity) under a separate securitization transaction to which such note has been transferred (if any)), as provided in the related co-lender agreement. An “excluded mortgage loan” is, if the Controlling Class Representative is the Directing Holder with respect to the subject mortgage loan, a mortgage loan or related whole loan with respect to which the Controlling Class Representative or the holder(s) of more than 50% of the Controlling Class (by certificate balance) is (or are) a Borrower Party (as defined in the Preliminary Prospectus). | |
| ■ Controlling Class Representative: | The “Controlling Class Representative” will be the controlling class certificateholder or other representative designated by at least a majority of the controlling class certificateholders by certificate balance. The “Controlling Class” is, as of any time of determination, the most subordinate class of the Control Eligible Certificates that has an outstanding certificate balance as notionally reduced by any Cumulative Appraisal Reduction Amount allocable to such class, at least equal to 25% of the initial certificate balance of that class of certificates; provided that (except under the circumstances set forth in the next proviso) if no such class meets the preceding requirement, then the Class F certificates will be the controlling class; provided, further, however, that if, at any time, the aggregate outstanding certificate balance of the classes of Non-Vertically Retained Principal Balance Certificates senior to the Control Eligible Certificates has been reduced to zero (without regard to the allocation of any Cumulative Appraisal Reduction Amounts), then the “Controlling Class” will be the most subordinate class of Control Eligible Certificates with an outstanding certificate balance greater than zero (without regard to the allocation of any Cumulative Appraisal Reduction Amounts). The “Control Eligible Certificates” consist of the Class F, Class G-RR, and Class J-RR certificates. See “The Pooling and Servicing Agreement—Directing Holder” in the Preliminary Prospectus. No other class of certificates will be eligible to act as the controlling class or appoint a Controlling Class Representative. No person may exercise any of the rights and powers of the Controlling Class Representative with respect to an excluded mortgage loan. On the Closing Date, LD III Sub XIV, LLC, is expected to (i) purchase the HRR Certificates and (ii) to appoint itself (or an affiliate) as the initial Controlling Class Representative. LD III Sub XIV, LLC or an affiliate may acquire additional Certificates | |
■ Control Termination Event: | A “Control Termination Event” will: with respect to any mortgage loan either (a) occur when none of the classes of the Control Eligible Certificates has an outstanding certificate balance (as notionally reduced by any Cumulative Appraisal Reduction Amount then allocable to such class) that is at least equal to 25% of the initial certificate balance of that class of certificates or (b) be deemed to occur as described below; provided, however, that a Control Termination Event will in no event exist at any time that the certificate balance of each class of the Non-Vertically Retained Principal Balance Certificates senior to the Control Eligible Certificates (without regard to the allocation of Cumulative Appraisal Reduction Amounts) has been reduced to zero. With respect to excluded mortgage loans as to which the Controlling Class Representative would otherwise be the Directing Holder, a Control Termination Event will be deemed to exist. The holders of Certificates representing the majority of the certificate balance of the most senior class of Control Eligible Certificates whose certificate balance is notionally reduced to less than 25% of the initial certificate balance of that class as a result of an allocation of an Appraisal Reduction Amount or a Collateral Deficiency Amount, as applicable, to such class will have the right to challenge the Special Servicer’s Appraisal Reduction Amount determination or a Collateral Deficiency Amount determination, as applicable, and, at their sole expense, obtain a second appraisal for any serviced loan for which an Appraisal Reduction Event has occurred or as to which there exists a Collateral Deficiency Amount, under the circumstances described in the Preliminary Prospectus. | |
■ Consultation Termination Event: | A “Consultation Termination Event” with respect to any mortgage loan, (a) when none of the classes of Control Eligible Certificates has an outstanding certificate balance, without regard to the allocation of any Cumulative Appraisal Reduction Amount, that is equal to or greater than 25% of the initial certificate balance of that class of certificates or (b) be deemed to occur as described below; provided, however, that a Consultation Termination Event will in no event exist at any time that the certificate balance of each class of the Non-Vertically Retained Principal Balance Certificates senior to the Control Eligible Certificates (without regard to the allocation of Cumulative Appraisal Reduction Amounts) has been reduced to zero. With respect to excluded mortgage loans as to which the Controlling Class Representative would otherwise be a Consulting Party, a Consultation Termination Event will be deemed to exist. |
| 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 2023-5C2 | |
| Structural Overview | ||
■ Control/Consultation Rights: | With respect to any Serviced Loan, the applicable Directing Holder will be entitled to have consent and/or consultation rights under the BMO 2023-5C2 pooling and servicing agreement with respect to certain major decisions (including with respect to assumptions, waivers, certain loan modifications and workouts) and other matters with respect to each serviced loan. After the occurrence and during the continuance of a Control Termination Event, the consent rights of the Controlling Class Representative will terminate, and the Controlling Class Representative will retain non-binding consultation rights under the BMO 2023-5C2 pooling and servicing agreement with respect to certain major decisions and other matters with respect to the serviced mortgage loans, other than (i) any excluded mortgage loan and (ii) any serviced outside controlled whole loan. After the occurrence and during the continuance of a Consultation Termination Event, all of these rights of the Controlling Class Representative with respect to the applicable serviced loans will terminate. With respect to any serviced outside controlled whole loan (including any servicing shift whole loan for so long as it is serviced under the BMO 2023-5C2 pooling and servicing agreement), the holder of the related Controlling Note or its representative (which holder or representative will not be the Controlling Class Representative) will instead be entitled to exercise the above-described consent and consultation rights, to the extent provided under the related co-lender agreement. With respect to each outside serviced whole loan, the applicable outside controlling class representative or other related controlling noteholder pursuant to, and subject to the limitations set forth in, the related outside servicing agreement and the related co-lender agreement will have consent, consultation, approval and direction rights with respect to certain major decisions (including with respect to assumptions, waivers, loan modifications and workouts) regarding such outside serviced whole loan, as provided for in the related co-lender agreement and in the related outside servicing agreement. To the extent permitted under the related co-lender agreement, the Controlling Class Representative (so long as a Consultation Termination Event does not exist) may have certain consultation rights with respect to each outside serviced whole loan. See “Description of the Mortgage Pool—The Whole Loans” in the Preliminary Prospectus. | |
| ■ Risk Retention Consultation Party: | The “risk retention consultation party”, with respect to any serviced mortgage loan or, if applicable, serviced whole loan will be the party selected by Bank of Montreal. The risk retention consultation party will have certain non-binding consultation rights in certain circumstances, (i) for so long as no Consultation Termination Event is continuing, with respect to any specially serviced loan (other than any outside serviced mortgage loan), and (ii) during the continuance of a Consultation Termination Event, with respect to any mortgage loan (other than any outside serviced mortgage loan), as further described in the Preliminary Prospectus. Notwithstanding the foregoing, the risk retention consultation party will not have any consultation rights with respect to any mortgage loan that is an excluded RRCP mortgage loan with respect to such party. Bank of Montreal is expected to be appointed as the initial risk retention consultation party. With respect to any risk retention consultation party, an “excluded RRCP mortgage loan” is a mortgage loan or whole loan with respect to which such risk retention consultation party, or the person(s) entitled to appoint such risk retention consultation party, is a Borrower Party.
|
| 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 2023-5C2 | |
| Structural Overview | ||
| ■ Termination of Special Servicer: | At any time, the special servicer (but not any outside special servicer for any outside serviced whole loan) may be removed and replaced by the applicable Directing Holder, if any, with or without cause upon satisfaction of certain conditions specified in the BMO 2023-5C2 pooling and servicing agreement. After the occurrence and during the continuance of a Control Termination Event, the holders of at least 25% of the voting rights of the Certificates (without regard to the application of any Appraisal Reduction Amounts) may request a vote to replace the special servicer (with respect to all of the serviced loans other than any serviced outside controlled whole loan). The subsequent vote may result in the termination and replacement of the special servicer if, within 180 days of the initial request for that vote, the holders of (a) at least 66-2/3% of the voting rights allocable to the Certificates of those holders that voted on the matter (provided that holders representing the applicable Certificateholder Quorum voted on the matter), or (b) more than 50% of the voting rights of each class of Certificates that are Non-Reduced Certificates vote affirmatively to so replace. “Non-Reduced Certificates” means each class of Principal Balance Certificates that has an outstanding certificate balance as may be notionally reduced by any Appraisal Reduction Amounts allocated to that class, equal to or greater than 25% of an amount equal to the initial certificate balance of that class of certificates minus all principal payments made on such class of certificates. Notwithstanding the foregoing, but subject to the discussion in the next paragraph, solely with respect to a serviced outside controlled whole loan (including any servicing shift whole loan, for so long as it is serviced pursuant to the BMO 2023-5C2 pooling and servicing agreement), only the holder of the related Controlling Note or its representative may terminate the special servicer without cause (solely with respect to the related whole loan) and appoint a replacement special servicer for that whole loan. If the operating advisor determines, in its sole discretion exercised in good faith, that (1) the special servicer has failed to comply with the servicing standard and (2) a replacement of the special servicer would be in the best interest of the certificateholders (as a collective whole), the operating advisor will have the right to recommend the replacement of the special servicer with respect to the serviced loans, resulting in a solicitation of a certificateholder vote. The subsequent vote may result in the termination and replacement of the special servicer if, within 180 days of the initial request for that vote, the holders of at least a majority of the aggregate outstanding principal balance of the Certificates of those holders that voted on the matter (provided that holders representing the applicable Certificateholder Quorum vote on the matter) vote affirmatively to so replace. “Certificateholder Quorum” means a quorum that: (a) for purposes of a vote to terminate and replace the special servicer or the asset representations reviewer at the request of the holders of Certificates evidencing not less than 25% of the voting rights (without regard to the application of any Appraisal Reduction Amounts), consists of the holders of Certificates evidencing at least 50% of the voting rights (taking into account the allocation of any Appraisal Reduction Amounts to notionally reduce the certificate balances of the respective classes of Non-Vertically Retained Principal Balance Certificates) of all of the Certificates, on an aggregate basis; and (b) for purposes of a vote to terminate and replace the special servicer based on a recommendation of the operating advisor, consists of the holders of Certificates evidencing at least 20% of the aggregate of the outstanding principal balances of all Certificates, with such quorum including at least (3) holders and/or beneficial owners of Certificates that are not “affiliated” (as defined in Regulation RR) with each other. The related outside special servicer under each outside servicing agreement generally may be (or, if the applicable outside servicing agreement has not yet been executed, it is anticipated that such outside special servicer may be) replaced by the related outside controlling class representative (or an equivalent party), or the vote of the requisite holders of certificates issued, under the applicable outside servicing agreement (depending on whether or not the equivalent of a control termination event or a consultation termination event exists under that outside servicing agreement) or by any applicable other controlling noteholder under the related co-lender agreement in a manner generally similar to the manner in which the special servicer may be replaced under the BMO 2023-5C2 pooling and servicing agreement as described above in this “Termination of Special Servicer” section (although there will be differences, in particular as regards certificateholder votes and the timing of when an outside special servicer may be terminated based on the recommendation of an operating advisor). If the special servicer, to its knowledge, becomes a Borrower Party with respect to a mortgage loan, the special servicer will not be permitted to act as special servicer with respect to that mortgage loan. Subject to certain limitations described in the Preliminary Prospectus, any applicable Directing Holder will be entitled to appoint a replacement special servicer for that mortgage loan. If there is no applicable Directing Holder or if the applicable Directing Holder does not take action to appoint 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 2023-5C2 | |
| Structural Overview | ||
replacement special servicer within the requisite time period, a replacement special servicer will be appointed in the manner specified in the BMO 2023-5C2 pooling and servicing agreement. |
| ■ Voting Rights: | At all times during the term of the BMO 2023-5C2 pooling and servicing agreement, the voting rights for the Certificates (the “voting rights”) will be allocated among the respective classes of certificateholders in the following percentages: (1) 1% in the aggregate in the case of the respective classes of the Class X Certificates, allocated pro rata based upon their respective notional amounts as of the date of determination (for so long as the notional amount of at least one class of the Class X Certificates is greater than zero), and (2) in the case of any class of Non-Vertically Retained Principal Balance Certificates, a percentage equal to the product of 99% (or, if the notional amounts of all classes of the Class X Certificates have been reduced to zero, 100%) and a fraction, the numerator of which is equal to the certificate balance of such class of Non-Vertically Retained Principal Balance Certificates as of the date of determination, and the denominator of which is equal to the aggregate of the certificate balances of all classes of the Non-Vertically Retained Principal Balance Certificates, in each case, as of the date of determination, provided, that in certain circumstances described under “The Pooling and Servicing Agreement” in the Preliminary Prospectus, voting rights will only be exercisable by holders of Certificates that are Non-Reduced Certificates and/or may otherwise be exercisable or allocated in a manner that takes into account the allocation of Appraisal Reduction Amounts. The voting rights of any class of certificates are required to be allocated among certificateholders of such class in proportion to their respective percentage interests. The Class R certificates and the Uncertificated VRR Interest will not be entitled to any voting rights. | |
| ■ Servicing Compensation: | Modification Fees: Certain fees resulting from modifications, amendments, waivers or other changes to the terms of the loan documents, as more fully described in the Preliminary Prospectus, will be used to offset expenses on the related serviced mortgage loan (i.e. reimburse the trust for certain expenses, including unreimbursed advances and interest on unreimbursed advances previously incurred (other than special servicing fees, workout fees and liquidation fees) on the related serviced mortgage loan but not yet reimbursed to the trust or servicers or to pay expenses (other than special servicing fees, workout fees and liquidation fees) that are still outstanding in each case unless as part of the written modification the related borrower is required to pay these amounts on a going forward basis or in the future). Any excess modification fees not so applied to offset expenses will be available as compensation to the master servicer and/or special servicer. Within any prior 12-month period, all such excess modification fees earned by the master servicer or by the special servicer (after taking into account the offset described below applied during such 12-month period) with respect to any serviced mortgage loan will be subject to a cap equal to the greater of (i) 1% of the outstanding principal balance of such mortgage loan after giving effect to such transaction and (ii) $25,000. All excess modification fees earned by the special servicer will be required to offset any future workout fees or liquidation fees payable with respect to the related serviced mortgage loan or related REO property; provided, that if the serviced mortgage loan ceases being a corrected loan, and is subject to a subsequent modification, any excess modification fees earned by the special servicer prior to such serviced mortgage loan ceasing to be a corrected loan will no longer be offset against future liquidation fees and workout fees unless such serviced mortgage loan ceased to be a corrected loan within 18 months of it becoming a modified mortgage loan. Penalty Fees: All late fees and default interest will first be used to reimburse certain expenses previously incurred with respect to the related mortgage loan (including special servicing fees, workout fees and liquidation fees) but not yet reimbursed to the trust, the master servicer or the special servicer or to pay certain expenses (including special servicing fees, workout fees and liquidation fees) that are still outstanding on the related mortgage loan, and any excess received with respect to a serviced loan will be paid to the master servicer (for penalty fees accrued while a non-specially serviced loan) and the special servicer (for penalty fees accrued while a specially serviced loan). To the extent any amounts reimbursed out of penalty charges are subsequently recovered on a related serviced loan, they will be paid to the master servicer or special servicer who would have been entitled to the related penalty charges that were previously used to reimburse such expense. Liquidation / Workout Fees: Liquidation fees will be calculated at the lesser of (a) 1.0% or (b) with respect to any serviced mortgage loan (or related serviced whole loan, if applicable) or related REO Property, such lesser rate as would result in a liquidation fee of $1,000,000, for each serviced loan that is a specially serviced loan and any REO property, subject in any case to a minimum liquidation |
| 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 2023-5C2 | |
| Structural Overview | ||
fee of $25,000. For any serviced loan that is a corrected loan, workout fees will be calculated at the lesser of (a) 1.0% and (b) such lower rate as would result in a workout fee of $1,000,000 when applied to each expected payment of principal and interest (other than (i) default interest and (ii) any “excess interest” accrued after the related anticipated repayment date on any mortgage loan with an anticipated repayment date) on the related serviced loan (or related serviced whole loan, if applicable) from the date such serviced loan becomes a corrected loan through and including the then related maturity date, subject in any case to a minimum workout fee of $25,000. Notwithstanding the foregoing, in connection with a maturity default, no liquidation or workout fee will be payable in connection with a payoff or refinancing of the related serviced loan within 90 days of the maturity default, but the special servicer may collect and retain appropriate fees from the related borrower in connection with the subject liquidation or workout. In the case of an outside serviced whole loan, calculation of the foregoing amounts payable to the related outside servicer or outside special servicer may be different than as described above. For example, the extent to which modification fees and penalty fees are applied to offset expenses may be different and liquidation fees and workout fees may be subject to different caps or no caps. | ||
| ■ Operating Advisor: | The operating advisor will, in general and under certain circumstances described in the Preliminary Prospectus, have the following rights and responsibilities with respect to the serviced mortgage loans: ● are viewing the actions of the special servicer with respect to specially serviced loans and with respect to certain major decisions regarding non-specially serviced loans as to which the operating advisor has consultation rights; ● reviewing reports provided by the special servicer to the extent set forth in the BMO 2023-5C2 pooling and servicing agreement; ● reviewing for accuracy certain calculations made by the special servicer; ● issuing an annual report generally setting forth, among other things, its assessment of whether the special servicer is performing its duties in compliance with the servicing standard and the BMO 2023-5C2 pooling and servicing agreement and identifying any material deviations therefrom; ● recommending the replacement of the special servicer if the operating advisor determines, in its sole discretion exercised in good faith, that (1) the special servicer has failed to comply with the servicing standard and (2) a replacement of the special servicer would be in the best interest of the certificateholders and the owners of the Uncertificated VRR Interest (as a collective whole); and ● after the occurrence and during the continuance of an Operating Advisor Consultation Trigger Event, consulting on a non-binding basis with the special servicer with respect to certain major decisions (and such other matters as are set forth in the BMO 2023-5C2 pooling and servicing agreement) in respect of the applicable serviced mortgage loan(s) and/or related companion loan(s). An “Operating Advisor Consultation Trigger Event” will occur when the aggregate outstanding certificate balance of the HRR Certificates (as notionally reduced by any Cumulative Appraisal Reduction Amounts then allocable to the HRR Certificates) is 25% or less of the initial aggregate certificate balance of the HRR Certificates. With respect to excluded mortgage loans, an Operating Advisor Consultation Trigger Event will be deemed to exist. Notwithstanding the foregoing, the operating advisor will generally have no obligations or consultation rights as operating advisor under the BMO 2023-5C2 pooling and servicing agreement with respect to any outside serviced mortgage loan or any related REO property. The operating advisor will be subject to termination and replacement if the holders of at least 15% of the voting rights of Non-Reduced Certificates vote to terminate and replace the operating advisor and such termination and replacement is affirmatively voted for by the holders of more than 50% of the voting rights allocable to the Non-Reduced Certificates of those holders that exercise their right to vote (provided that holders entitled to exercise at least 50% of the voting rights allocable to the Non-Reduced Certificates exercise their right to vote within 180 days of the initial request for a vote). The holders initiating such vote will be responsible for the fees and expenses in connection with the vote and replacement. See “The Pooling and Servicing Agreement—Operating Advisor” in the Preliminary Prospectus. |
| THE 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 2023-5C2 | |
| Structural Overview | ||
| ■ Asset Representations Reviewer: | The asset representations reviewer will be required to review certain delinquent mortgage loans after a specified delinquency threshold has been exceeded and the required percentage of certificateholders vote to direct a review of such delinquent mortgage loans. An asset review will occur when either (1) mortgage loans with an aggregate outstanding principal balance of 30% or more of the aggregate outstanding principal balance of all of the mortgage loans (including any REO mortgage loans) held by the issuing entity as of the end of the applicable collection period are at least 60 days delinquent in respect of their related monthly payments or balloon payment, if any (for purposes of this paragraph, “delinquent loans”) or (2) at least 15 mortgage loans are delinquent loans as of the end of the applicable collection period and the aggregate outstanding principal balance of such delinquent loans constitutes at least 20% of the aggregate outstanding principal balance of all of the mortgage loans (including any REO mortgage loans) held by the issuing entity as of the end of the applicable collection period. The asset representations reviewer may be terminated and replaced without cause. Upon (i) the written direction of certificateholders evidencing not less than 25% of the voting rights requesting a vote to terminate and replace the asset representations reviewer with a proposed successor asset representations reviewer that is an eligible asset representations reviewer, and (ii) payment by such holders to the certificate administrator of the reasonable fees and expenses to be incurred by the certificate administrator in connection with administering such vote, the certificate administrator will promptly provide notice of such request to all certificateholders and the asset representations reviewer by posting such notice on its internet website, and by mailing such notice to all certificateholders and the asset representations reviewer. Upon the affirmative vote of certificateholders evidencing at least 75% of the voting rights allocable to those holders that exercise their right to vote (provided that holders representing the applicable Certificateholder Quorum exercise their right to vote within 180 days of the initial request for a vote), the trustee will be required to terminate all of the rights and obligations of the asset representations reviewer under the BMO 2023-5C2 pooling and servicing agreement by written notice to the asset representations reviewer, and the proposed successor asset representations reviewer will be appointed. See “The Pooling and Servicing Agreement—The Asset Representations Reviewer” in the Preliminary Prospectus. | |
| ■ Dispute Resolution Provisions: | The mortgage loan sellers will be subject to the dispute resolution provisions set forth in the BMO 2023-5C2 pooling and servicing agreement to the extent those provisions are triggered with respect to any mortgage loan sold to the depositor by a mortgage loan seller and such mortgage loan seller will be obligated under the related mortgage loan purchase agreement to comply with all applicable provisions and to take part in any mediation or arbitration proceedings that may result. Generally, in the event that a Repurchase Request (as defined in the Preliminary Prospectus) with respect to a mortgage loan is not “Resolved” (as defined below) within 180 days after the related mortgage loan seller receives such Repurchase Request, then the enforcing servicer will be required to send a notice to the “Initial Requesting Certificateholder” (if any) indicating the enforcing servicer’s intended course of action with respect to the Repurchase Request. If (a) the enforcing servicer’s intended course of action with respect to the Repurchase Request does not involve pursuing further action to exercise rights against the applicable mortgage loan seller with respect to the Repurchase Request and the Initial Requesting Certificateholder, if any, or any other certificateholder or certificate owner of Certificates wishes to exercise its right to refer the matter to mediation (including nonbinding arbitration) or arbitration, or (b) the enforcing servicer’s intended course of action is to pursue further action to exercise rights against the related mortgage loan seller with respect to the Repurchase Request but the Initial Requesting Certificateholder, if any, or any other certificateholder or certificate owner of Certificates does not agree with the dispute resolution method selected by the enforcing servicer, then the Initial Requesting Certificateholder, if any, or such other certificateholder or certificate owner may deliver a written notice to the enforcing servicer indicating its intent to exercise its right to refer the matter to either mediation or arbitration. In addition, any other certificateholder or certificate owner of Certificates may deliver, within the time frame provided in the BMO 2023-5C2 pooling and servicing agreement, a written notice requesting the right to participate in any dispute resolution consultation that is conducted by the enforcing servicer following the enforcing servicer’s receipt of the notice described in the preceding sentence. “Resolved” means, with respect to a Repurchase Request, (i) that any material breach of representations and warranties or a material document defect has been cured, (ii) the related mortgage loan has been repurchased in accordance with the related mortgage loan purchase agreement, (iii) a mortgage loan has been substituted for the related mortgage loan in accordance with the related mortgage loan purchase agreement, (iv) the applicable mortgage loan seller has made a “loss of value payment”, (v) a contractually binding agreement has been entered into between the enforcing servicer, on behalf of the issuing entity, and the related mortgage loan seller that settles the related mortgage loan seller’s obligations under the related mortgage loan purchase agreement, or (vi) the related mortgage loan is no longer property of the issuing entity as a result of a sale or other |
| 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 2023-5C2 | |
| Structural Overview | ||
disposition in accordance with the BMO 2023-5C2 pooling and servicing agreement. See “The Pooling and Servicing Agreement—Dispute Resolution Provisions” in the Preliminary Prospectus. | ||
| ■ Liquidated Loan Waterfall: | Upon liquidation of any mortgage loan, all net liquidation proceeds related to the mortgage loan (but not any related companion loan) will be applied (after allocation to offset certain advances and expenses) so that amounts allocated as a recovery of accrued and unpaid interest will not, in the first instance, include any delinquent interest that was not advanced as a result of Appraisal Reduction Amounts or interest that accrued on any junior note(s) if such mortgage loan is an AB Modified Loan. After the adjusted interest amount is so allocated, any remaining liquidation proceeds will be allocated to pay principal on the mortgage loan until the unpaid principal amount of the mortgage loan has been reduced to zero. Any remaining liquidation proceeds will then be allocated to pay delinquent interest that was not advanced as a result of Appraisal Reduction Amounts and any interest that accrued on any junior note(s) if such mortgage loan is an AB Modified Loan. | |
| ■ Credit Risk Retention: | This securitization transaction will be subject to the credit risk retention rules of Section 15G of the Securities Exchange Act of 1934, as amended. An economic interest in the credit risk of the mortgage loans in this transaction is expected to be retained pursuant to risk retention regulations (as codified at 12 CFR Part 244) promulgated under Section 15G (“Regulation RR”), as a combination of (A) an “eligible vertical interest” in the form of the Combined VRR Interest and (B) an “eligible horizontal residual interest” in the form of the HRR Certificates. Bank of Montreal will act as retaining sponsor under Regulation RR for this securitization transaction and is expected, on the Closing Date, to partially satisfy its risk retention obligation through the purchase by a third party purchaser of the HRR Certificates. For a further discussion of the manner in which the credit risk retention requirements are expected to be satisfied by Bank of Montreal, as retaining sponsor for this securitization transaction, see “Credit Risk Retention” in the Preliminary Prospectus. | |
| ■ The Combined VRR Interest Prepayment Premiums and Yield Maintenance Charges: | On each Distribution Date, the Vertically Retained Percentage of each yield maintenance charge and prepayment premium collected on the mortgage loans during the related collection period (or, in the case of an outside serviced mortgage loan, that accompanied a principal prepayment included in the aggregate available funds for such Distribution Date) will be required to be distributed to the holders of the Combined VRR Interest. | |
| ■ Appraisal Reduction Amounts: | On each Distribution Date, the Vertically Retained Percentage of any Appraisal Reduction Amounts will be allocated to the Combined VRR Interest to notionally reduce (to not less than zero) the principal balance thereof. | |
| ■ Investor Communications: | The certificate administrator is required to include on any Form 10–D any request received from a certificateholder to communicate with other certificateholders related to certificateholders exercising their rights under the terms of the BMO 2023-5C2 pooling and servicing agreement. Any certificateholder wishing to communicate with other certificateholders regarding the exercise of its rights under the terms of the BMO 2023-5C2 pooling and servicing agreement will be able to deliver a written request signed by an authorized representative of the requesting investor to the certificate administrator. | |
| ■ Deal Website: | The certificate administrator will maintain a deal website including, but not limited to: ● all special notices delivered. ● summaries of final asset status reports. ● all appraisals in connection with an appraisal reduction plus any subsequent appraisal updates. ● an “Investor Q&A Forum” and a voluntary investor registry. | |
| ■ Cleanup Call: | On any Distribution Date on which the aggregate unpaid principal balance of the mortgage loans (including mortgage loans as to which the related mortgaged properties have become REO properties) remaining in the issuing entity is less than 1% of the aggregate principal balance of the pool of mortgage loans as of the Cut-off Date (excluding for the purposes of this calculation, the unpaid principal balance of any mortgage loan with an anticipated repayment date, but in such case only if the option described above is exercised after the Distribution Date related to the collection period in which the corresponding anticipated repayment date occurs), certain specified persons will have the option to purchase all of the remaining mortgage loans (and all property acquired through exercise of remedies in respect of any mortgage loan) at the price specified in the Preliminary Prospectus. Exercise of the option will terminate the issuing entity and retire the then outstanding certificates. If the aggregate certificate balances of the Class A-1, Class A-2, Class A-3, Class A-S, Class B, Class C, Class D and Class E certificates and the notional amounts of the Class X-A, Class X-B, Class X-D and Class X-E certificates have been reduced to zero and if the master servicer has received from the remaining certificateholders the payment specified in the BMO 2023-5C2 pooling and servicing agreement, the issuing entity could also be terminated in connection with an exchange of all the then- |
| 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 2023-5C2 | |
| Structural Overview | ||
outstanding certificates (excluding the Class R certificates) and the Uncertificated VRR Interest for the mortgage loans remaining in the issuing entity, as further described under “The Pooling and Servicing Agreement—Optional Termination; Optional Mortgage Loan Purchase” in the Preliminary Prospectus. |
The Offered Certificates involve certain risks and may not be suitable for all investors. For information regarding certain risks associated with an investment in the Offered Certificates, see “Summary of Risk Factors” and “Risk Factors” in the Preliminary Prospectus. Capitalized terms used but not otherwise defined in this Term Sheet have the respective meanings assigned to those terms in the Preliminary Prospectus.
| THE 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 2023-5C2 | |
| No. 1 – Piazza Alta | ||
| 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 2023-5C2 | |
| No. 1 – Piazza Alta | ||
| 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 2023-5C2 | |
| No. 1 – Piazza Alta | ||
| Mortgage Loan Information | Property Information | |||
| Mortgage Loan Seller: | SGFC | Single Asset / Portfolio: | Single Asset | |
| Original Principal Balance(1): | $75,000,000 | Title: | Fee | |
| Cut-off Date Principal Balance(1): | $75,000,000 | Property Type – Subtype: | Multifamily – Luxury High Rise | |
| % of IPB: | 9.7% | Net Rentable Area (Units)(7): | 695 | |
| Loan Purpose: | Refinance | Location: | Philadelphia, PA | |
| Borrower: | Terminal Property Owner LLC | Year Built / Renovated: | 2022-2023 / NAP | |
| Borrower Sponsors: | Matthew Pestronk and Michael Pestronk | Occupancy: | 91.9% | |
| Interest Rate: | 4.67614% | Occupancy Date: | 8/3/2023 | |
| Note Date: | 9/21/2023 | 4th Most Recent NOI (As of)(8): | NAV | |
| Maturity Date: | 10/8/2028 | 3rd Most Recent NOI (As of)(8): | NAV | |
| Interest-Only Period: | 60 months | 2nd Most Recent NOI (As of)(8): | NAV | |
| Original Term: | 60 months | Most Recent NOI (As of)(8): | NAV | |
| Original Amortization Term: | None | UW Economic Occupancy: | 95.0% | |
| Amortization Type: | Interest Only | UW Revenues: | $25,836,537 | |
| Call Protection(2): | L(25),D(31),O(4) | UW Expenses: | $3,971,583 | |
| Lockbox / Cash Management | Soft (Residential); Hard (Commercial) / In Place | UW NOI: | $21,864,954 | |
| Additional Debt(1): | Yes | UW NCF: | $21,649,143 | |
| Additional Debt Balance(1): | $110,900,000 / $126,100,000 | Appraised Value / Per Unit: | $470,600,000 / $677,122 | |
| Additional Debt Type(1)(3): | Pari Passu / Mezzanine | Appraised Date: | 6/27/2023 | |
| Escrows and Reserves(4) | Financial Information(1) | ||||||
| Initial | Monthly | Initial Cap | Whole Loan | Total Debt | |||
| Taxes(5): | $260,924 | $19,042 | N/A | Cut-off Date Loan / Unit: | $267,482 | $448,921 | |
| Insurance: | $144,517 | Springing | N/A | Maturity Date Loan / Unit: | $267,482 | $448,921 | |
| Replacement Reserves: | $0 | Springing | N/A | Cut-off Date LTV: | 39.5% | 66.3% | |
| TI/LC Reserve: | $11,304,598 | Springing | N/A | Maturity Date LTV: | 39.5% | 66.3% | |
| Other Reserve(6): | $1,911,036 | $3,250 | N/A | UW NCF DSCR: | 2.46x | 1.10x | |
| UW NOI Debt Yield: | 11.8% | 7.0% | |||||
| Sources and Uses | ||||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |||
| Mortgage Loan | $185,900,000 | 56.0 | % | Loan Payoff | $294,834,291 | 88.8 | % | |
| Mezzanine Loan(3) | 126,100,000 | 38.0 | Reserves | 13,621,075 | 4.1 | |||
| Sponsor Equity | 20,203,569 | 6.0 | Closing Costs | 23,748,203 | 7.1 | |||
| Total Sources | $332,203,569 | 100.0 | % | Total Uses | $332,203,569 | 100.0 | % | |
| (1) | The Piazza Alta Mortgage Loan (as defined below) is part of a whole loan evidenced by five pari passu promissory notes with an aggregate original principal balance as of the Cut-off Date of $185,900,000 (the “Piazza Alta Whole Loan”). The financial information presented in the chart above reflects the Cut-off Date Balance of the Piazza Alta Whole Loan and the total debt inclusive of a $126,100,000 mezzanine loan. |
| (2) | Defeasance of the Piazza Alta Whole Loan is permitted at any time after the earlier to occur of (i) two years from the closing date of the securitization that includes the last note to be securitized and (ii) September 21, 2026. The assumed lockout period of 25 months is based on the anticipated closing date of the BMO 2023-5C2 securitization trust in November 2023. The actual lockout period may be longer. |
| (3) | For a full description, see “Subordinate and Mezzanine Debt” below. |
| (4) | For a full description of Escrows and Reserves, please refer to “Escrows and Reserves” below. |
| (5) | On a monthly basis, the borrower is required to escrow 1/12th of the taxes that the lender estimates will be payable during the next 12 months in order to accumulate sufficient funds to pay all such taxes attributable to the Unit 1 (as defined below) tax parcel totaling $19,042. Such monthly tax escrows do not include Unit 2 (as defined below) which is part of a shared tax lot with the Piazza Alta Property (as defined below). |
| (6) | Other Reserve includes a free rent reserve of $1,021,685 and a residential concession reserve of $889,351. The Monthly Other Reserves is for the common charges which are currently estimated at $39,000 per year or $3,250 per month. |
| (7) | The Piazza Alta Property consists of a 695-unit multifamily complex with 35,111 square feet of ground floor retail space and a six-story parking garage. |
| (8) | Historical NOIs are not available as the Piazza Alta Property was built in several stages from 2022 to 2023. |
| 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 2023-5C2 | |
| No. 1 – Piazza Alta | ||
The Loan. The mortgage loan (the “Piazza Alta Mortgage Loan”) is part of a fixed rate whole loan secured by a borrower’s fee simple interest in a 695-unit, Class A luxury high rise multifamily property located in Philadelphia, Pennsylvania (the “Piazza Alta Property”). The Piazza Alta Whole Loan consists of five pari passu notes and accrues interest at 4.67614% per annum. The Piazza Alta Whole Loan has a five-year term and is interest only for the term of the loan. The controlling Note A-1, with an original principal balance of $75,000,000 will be included in the BMO 2023-5C2 securitization trust. The remaining non-controlling Notes A-2, A-3, A-4 and A-5, with an aggregate original principal balance of $110,900,000, are expected to be contributed to one or more securitization trusts. The Piazza Alta Whole Loan will be serviced pursuant to the pooling and servicing agreement for the BMO 2023-5C2 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.
The table below summarizes the promissory notes that comprise the Piazza Alta Whole Loan.
| Whole Loan Summary | ||||
| Note | Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece |
| A-1 | $75,000,000 | $75,000,000 | BMO 2023-5C2 | Yes |
| A-2(1) | $50,000,000 | $50,000,000 | SGFC | No |
| A-3(1) | $45,000,000 | $45,000,000 | SGFC | No |
| A-4(1) | $10,000,000 | $10,000,000 | SGFC | No |
| A-5(1) | $5,900,000 | $5,900,000 | SGFC | No |
| Total | $185,900,000 | $185,900,000 | ||
| (1) | Expected to be contributed to one or more securitizations. |
The Property. The Piazza Alta Property is a newly developed, Class A, 695-unit luxury high rise multifamily complex with 35,111 square feet of ground floor retail space and a six-story parking garage situated on approximately 4.3 acres located in Philadelphia, Pennsylvania. Phase I of the Piazza Alta Property development was built in several stages between 2022 and 2023, and includes two connected buildings, identified as buildings A – F, that consist of 321 studio units, 132 one-bedroom “junior” units, 150 one-bedroom units, 66 two-bedroom units, 19 three-bedroom units, seven four-bedroom units, 35,111 square feet of ground floor retail space and a six-story parking garage. The Piazza Alta Property represents the borrower sponsors’ most recently delivered and largest ground-up development. The Piazza Alta Property is currently in Phase I of a two phase development plan. Phase II is expected to include a 434-unit multifamily component to be constructed on an adjacent parcel that will not be part of the collateral. The six-story parking garage has 445-spaces, resulting in a parking ratio of 0.6 spaces per unit. The Piazza Alta Property is subject to a two-unit condominium regime comprised of the collateral Phase I property (“Unit 1”) and the non-collateral Phase II property (“Unit 2”) as described under “Description of the Mortgage Pool—Statistical Characteristics of the Mortgage Loans—Condominium Interests and Other Shared Interests” in the Preliminary Prospectus.
The units living areas feature either a traditional, sleek or Scandinavian style. The traditional style units feature shaker white cabinetry, stainless steel appliances, travertine porcelain bathroom tile, champagne bronze bathroom features and solid marble-inspired backsplashes. The sleek style units feature a darker, modern scheme with charcoal cabinets, black stainless steel appliances, dark stone backsplashes, grey marble inspired porcelain bathroom tile and matte black fixtures throughout. The Scandinavian style unit offers a minimalist look featuring slim-profile cabinetry with stainless steel appliances, solid white marble inspired backsplash and brushed nickel metal accents on fixtures. Each unit at the Piazza Alta Property is equipped with a washer and dryer and the bathrooms feature rainfall shower heads with high-pressure body jets and some units feature soaking tubs. The common area amenities feature a state-of-the-art fitness center featuring Peloton bikes, life-size ski-machine simulators, a Zen yoga studio and a spin studio. Additionally, the Piazza Alta Property offers a spa featuring saunas, steam rooms, hydromassage beds and treatment rooms that are available for massages and facials. The rooftop terrace features a connected lap and lounge pool, hot tub and kids splash pad, built-in fire pits and dedicated kitchen and dining areas. The Piazza Alta Property also offers a co-working space and lounge area on the second floor. The lounge area is furnished with various seating option and includes an entertaining kitchen with an island for serving and gathering. The co-working space has a separated workstation, balancing the benefits of communal workspace with privacy and social distancing. Residents at the Piazza Alta Property also have access to a professional-grade golf simulator on an amenity floor.
The City of Philadelphia maintains a tax abatement program to promote development of new housing. Under this program, the real estate taxes attributable to newly constructed or rehabilitated improvements are abated for a period of ten years. The tax abatement applicable to the improvements at the Piazza Alta Property will terminate in December 2033. As such, 2034 will be the first year that the full, unabated real estate taxes will be due at the Piazza Alta Property. According to the Piazza Alta Property’s real estate tax schedule, the unabated taxes would be approximately $1,499,586 for 2024 compared to the abated taxes of $239,766. Additionally, the Piazza Alta Property is subject to the Northern Liberties business improvement district taxes of $22,659. Based on the lender’s underwriting, real estate taxes were underwritten to $262,425. See “Description of the Mortgage Pool—Real Estate and Other Tax Considerations” in the Preliminary Prospectus.
| 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 2023-5C2 | |
| No. 1 – Piazza Alta | ||
The following table presents detailed information with respect to the unit mix of the Piazza Alta Property:
| Multifamily Unit Mix(1) | |||||||||
| Unit Type | # of Units | % of Units | Occupied Units | % Occupied | Average SF | Avg. Monthly Rent Per Unit(2) | |||
| Studio | 321(3) | 46.2 | % | 285 | 88.8% | 477 | $1,908 | ||
| One Bedroom | 150(4) | 21.6 | 144 | 96.0% | 637 | $2,581 | |||
| One Bedroom Junior | 132 | 19.0 | 132 | 100.0% | 853 | $2,963 | |||
| Two Bedroom | 66 | 9.5 | 61 | 92.4% | 1,270 | $4,722 | |||
| Three Bedroom | 19 | 2.7 | 17 | 89.5% | 1,494 | $5,600 | |||
| Four Bedroom | 7 | 1.0 | 0 | 0.0% | 2,046 | $0 | |||
| Collateral Total/Wtd. Avg. | 695 | 100.0 | % | 639 | 91.9% | 702 | $2,644 | ||
| (1) | Based on the rent roll dated August 3, 2023. |
| (2) | Avg. Monthly Rent Per Unit is calculated using the in-place rent of the Occupied Units. |
| (3) | The Studio units include four management units. |
| (4) | The One Bedroom units include one management unit. |
Environmental. According to the Phase I environmental assessment dated June 21, 2023, there is no evidence of any recognized environmental conditions at the Piazza Alta Property. However, the Phase I environmental assessment did identify a controlled recognized environmental condition and historical recognized environmental condition relating to past uses at the Piazza Alta Property as described under “Description of the Mortgage Pool—Environmental Considerations.”
The following table presents certain information relating to the historical and current occupancy of the Piazza Alta Property:
| Historical and Current Occupancy(1) | |||
| 2020 | 2021 | 2022 | Current(2) |
| NAV | NAV | NAV | 91.9% |
| (1) | Historical Occupancy is not available as the Piazza Alta Property was built in several stages from 2022 to 2023. |
| (2) | Current Occupancy is as of August 3, 2023. |
The following table presents certain information relating to the operating history and underwritten cash flows of the Piazza Alta Property:
| Underwritten Net Cash Flow | ||||||
| Underwritten | Per Unit | %(1) | ||||
| Gross Rental Income | $22,495,357 | $32,367 | 81.5 | % | ||
| Commercial Revenue | 2,457,770 | 3,536 | 8.9 | |||
| Parking Income | 1,804,800 | 2,597 | 6.5 | |||
| Gross Potential Rent | $26,757,927 | $38,501 | 97.0 | % | ||
| RUBS Income | 429,510 | 618 | 1.6 | |||
| Other Income(2) | 412,000 | 593 | 1.5 | |||
| Total Gross Potential Income | $27,599,437 | $39,711 | 100.0 | % | ||
| (Vacancy/Credit Loss)(3) | (1,740,640) | (2,505) | (6.3 | ) | ||
| Concessions | (22,260) | (32) | (0.1 | ) | ||
| Effective Gross Income | $25,836,537 | $37,175 | 93.6 | % | ||
| Total Expenses | $3,971,583 | $5,715 | 15.4 | % | ||
| Net Operating Income | $21,864,954 | $31,460 | 84.6 | % | ||
| Capital Expenditures | 180,700 | 260 | 0.7 | |||
| TI/LC | 35,111 | 51 | 0.1 | |||
| Net Cash Flow | $21,649,143 | $31,150 | 83.8 | % | ||
| (1) | % column represents percent of Total Gross Potential Income for all revenue lines and represents percent of Effective Gross Income for the remainder of fields. |
| (2) | Other Income is based on the appraisal and includes month-to-month fees, late fees, application fees, damages and cleaning fees, lease cancellation fees, administrative fees, pet premiums, amenities fees, commercial tenant reimbursements, and any other miscellaneous income items. |
| (3) | Underwritten Vacancy/Credit Loss represents the economic vacancy of 5.0% for the residential portion of the Piazza Alta 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. | ||
| 35 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 1 – Piazza Alta | ||
The Market. The Piazza Alta Property is located within the Northern Liberties neighborhood of Philadelphia’s Center City district which spans from the Art Museum steps to the Riverfront to the east and South Street to the south. The Northern Liberties neighborhood is a revitalized area with art galleries, boutiques and several restaurants. Philadelphia’s squares and newest civic spaces are minutes away from the Piazza Alta Property and offer outdoor living spaces for its residents. Located southwest of the Piazza Alta Property are the Rittenhouse Square neighborhood and Washington Square West neighborhoods. Rittenhouse Row is a shopping destination featuring locally owned boutiques, high-end stores, small galleries, specialty shops, spas and salons, and restaurants and cafes. Other uses adjacent to the Piazza Alta Property include the Academy of Music and Kimmel Center to the south, The Franklin Institute to the west and Rivers Casino to the east.
The city of Philadelphia is an economic center in Pennsylvania and home to thirteen Fortune 500 companies. Philadelphia's economy is driven by life sciences, financial services, technology and advanced manufacturing. Major employers include: University of Pennsylvania, Virtua Health, Comcast, Aramark, Johnson & Johnson, Dupont Merck, Rite Aid and AmerisourceBergen. Comcast Center is located less than three miles from the Piazza Alta Property. Comcast Center features a three-building urban campus, a Four Seasons Hotel and the 60-story Comcast Technology Center. The Comcast Center is the Comcast Corporation’s headquarters and is home to 8,000 employees. The city is one of the largest health education and research centers in the United States, featuring a number of higher-level educational facilities, including Temple University, Drexel University, West Chester University of Pennsylvania, University of Pennsylvania and Villanova University.
Public transportation is available near the Piazza Alta Property with the immediate area being served by the Southeastern Pennsylvania Transportation Authority with bus stops on North 2nd Street and West Girard Avenue. Subway service is provided at the Girard Station (Market-Frankford Line). Major traffic arteries located within five miles of the Piazza Alta Property include Interstate 76, Interstate 676, Interstate 95, US Route 13 and US Route 30.
Per the appraisal, as of first quarter 2023, the Center City Philadelphia submarket reported total inventory of 44,177 units and a vacancy rate of 5.7%.
| Submarket Multifamily Statistics(1) | |||
| Date | Inventory | Rent Per Unit | Occupancy |
| 2018 | 38,181 | $2,183 | 94.2% |
| 2019 | 39,498 | $2,351 | 95.2% |
| 2020 | 40,234 | $2,126 | 92.5% |
| 2021 | 41,529 | $2,352 | 95.8% |
| 2022 | 43,862 | $2,457 | 94.2% |
| 1st Qtr. 2023 | 44,177 | $2,433 | 94.3% |
| (1) | Source: Appraisal. |
| 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 2023-5C2 | |
| No. 1 – Piazza Alta | ||
The appraisal identified six comparable rental properties for the Piazza Alta Property. The comparable leases indicate a rent range of $1,655 per month to $8,250 per month, averaging $3,093 per month. The properties were built between 2007 and 2022 and range from 183 to 316 units. The occupancy of the comparables range from 90.0% to 99.0%. The average unit size of the comparable range from 701 square feet to 1,319 square feet with an average of 941 square feet.
| Multifamily Rent Comparables(1) | |||||||
| Property | Distance from Subject (miles) | Year Built/Year Renovated | Occupancy | No. Units | Avg. Unit Size (SF) | Avg. Rent Per Unit | Amenities |
Piazza Alta 1099 Germantown Avenue Philadelphia, PA | - | 2022-2023/NAP | 91.9%(2) | 695(2) | 702(2) | $2,644(2) | Fitness Center, Sauna, Steam Room, Swimming Pools, Fit-Pit Area, Co-working Spaces, Indoor/Outdoor Lounge Areas, Concierge Services, Parking Garage |
The Alexander 300 Alexander Court Philadelphia, PA | 1.6 | 2018/NAP | 95.0% | 277 | 701 | $2,589 | Elevators, Fitness Center, Swimming Pool |
Dwell 1321 N American Street Philadelphia, PA | 0.3 | 2020/NAP | 90.0% | 198 | 827 | $2,470 | Business Center, Dog Park, Fitness Center, Swimming Pool |
St. James 200 West Washington Square Philadelphia, PA | 1.6 | 2022/NAP | 96.0% | 304 | 1,319 | $3,677 | Business Center, Concierge/Doorman, Elevators, Exterior Lighting, Fitness Center, Game Room, Guest Parking, On-Site Manager, Pet Policy |
The Harper 112 South 19th Street Philadelphia, PA | 2.1 | 2019/NAP | 99.0% | 183 | 1,049 | $4,646 | Business Center, Fitness Center, Game Room, Sport Court, Swimming Pool |
The Piazza 1001 N 2nd Street Philadelphia, PA | 0.1 | 2007/NAP | 94.7% | 316 | 902 | $2,751 | Fitness Center, Swimming Pool |
The Poplar 901 North 9th Street Philadelphia, PA | 0.7 | 2021/NAP | 96.4% | 285 | 850 | $2,426 | Business Center, Concierge/Doorman, Elevators, Fitness Center, Spa/Sauna, Swimming Pool |
| Average(3) | 95.2% | 261 | 941 | $3,093 | |||
| (1) | Source: Appraisal. |
| (2) | Based on the underwritten rent roll dated August 3, 2023. |
| (3) | Calculated excluding the Piazza Alta Property. |
The Borrower. The borrowing entity for the Piazza Alta Whole Loan is Terminal Property 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 Piazza Alta Whole Loan.
The Borrower Sponsors. The borrower sponsors and nonrecourse carve-out guarantors of the Piazza Alta Whole Loan are Michael Pestronk and Matthew Pestronk, the founders of Post Brothers LLC (“Post Brothers”). Post Brothers is a developer, owner and manager generally focused on the development and creation of Class A apartment buildings in the greater Philadelphia metropolitan area. Post Brothers is a vertically-integrated company, with approximately 200 employees, providing in-house expertise in design, construction, leasing and management. Since the company’s founding in 2006, Post Brothers has developed or acquired more than 30 properties totaling approximately 8,000 apartments and 700,000 square feet of complimentary office and retail space, with a focus in the greater Philadelphia area and New Jersey.
Property Management. The Piazza Alta Property is managed by Post Commercial Real Estate, LLC, an affiliate of the borrower sponsors. Post Commercial Real Estate, LLC is a full-service multifamily property manager and developer with a current portfolio under management of 8,000 units across 30 residential properties.
Escrows and Reserves. At origination, the borrower deposited in escrow: (i) $260,924 for real estate taxes, (ii) $144,517 for insurance reserves, (iii) $11,304,598 for tenant improvement allowance and leasing commission reserves, (iv) $889,351 for residential concession reserves and (v) $1,021,685 for free rent reserves.
Tax Escrows – On a monthly basis, the borrower is required to escrow 1/12th of the taxes that the lender estimates will be payable during the next 12 months in order to accumulate sufficient funds to pay all such taxes (including, until the occurrence of a Tax Parcel Event (as defined below), taxes attributable the non-collateral Unit 2 described under “The Property,” above, that is part of a shared tax lot with the Piazza Alta Property at least 30 days prior to their respective due dates. Currently, the borrower is required to pay $19,042 for taxes attributed to Unit 1 of the condominium regime. As of the date of origination, the borrower has represented to the lender that it has taken the necessary steps (including filing the paperwork and the payment of all fees) with the appropriate governmental authorities for the Tax Parcel Event to occur no later than 30 days from origination. The borrower is required to (i) periodically update the lender with respect to
| 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 2023-5C2 | |
| No. 1 – Piazza Alta | ||
any progress made towards achieving the Tax Parcel Event, (ii) promptly provide the lender with any correspondence relating to the Tax Parcel Event and (iii) immediately notify the lender upon the occurrence of the Tax Parcel Event and deliver to the lender evidence in form and substance satisfactory to the lender of the occurrence of the Tax Parcel Event. A “Tax Parcel Event” will occur upon (i) Unit 2 being a separate tax lot and not a part of any tax lot of the Piazza Alta Property and not included in the tax bills for the Piazza Alta Property and (ii) the Piazza Alta Property being comprised of one or more parcels with separate tax lots and not being comprised of a portion of any other tax lot that is not a part of the Piazza Alta Property.
Insurance Escrows – On a monthly basis, the borrower is required to escrow 1/12th of the insurance premiums that the lender estimates will be payable for the renewal of coverage afforded by the polices upon the expiration in order to accumulate with the lender sufficient funds to pay all such insurance premiums at least 30 days prior to the expiration. The borrower will not be required to make monthly insurance deposits so long as (i) no event of default has occurred and is continuing, (ii) the borrower provides the lender evidence of renewal of the policies, (iii) the borrower provides the lender with paid receipts evidencing payment of the insurance premiums by no later than 10 business days prior to the expiration dates of the policies, and (iv) there is on deposit in the tax and insurance subaccount with respect to insurance premiums an amount equal to not less than the Static Insurance Reserve Amount (as defined below) (the foregoing clauses (i) through (iv) are collectively referred to as the “Insurance Premium Waiver Conditions”). In the event the Insurance Premium Waiver Conditions are no longer satisfied, the borrower will commence making all monthly insurance deposits as required pursuant to the Piazza Alta Whole Loan documents. Additionally, so long as the Piazza Alta Property is insured under a blanket insurance policy the borrower will not be required to make monthly insurance deposits into the tax and insurance subaccount. As of the date of origination, the Piazza Alta Property is insured under a blanket insurance policy. Notwithstanding the above, in the event that such blanket insurance policy is no longer in effect, the borrower will be required to escrow $144,517 (the “Static Insurance Reserve Amount”), which was reserved at origination. In accordance with the Piazza Alta Whole Loan documents, the lender may from time to time, upon written notice to the borrower, increase the Static Insurance Reserve Amount required to reflect any increases in the insurance premiums for the coverages afforded by the policies on a stand-alone basis, such that the Static Insurance Reserve Amount is not less than three months of the insurance premiums that the lender reasonably estimates will be payable for the renewal of coverage afforded by the policies on a stand-alone basis.
Replacement Reserves – Commencing on the payment date occurring in November 2025 and continuing for each payment thereafter, the borrower is required to escrow $15,058 for replacement reserves.
TI/LC Reserves – Commencing on the payment date occurring in November 2025 and continuing on each payment date thereafter, the borrower is required to escrow $2,926 for tenant improvement and leasing costs. Additionally, the borrower is required to pay any lease termination payments received from non-residential tenants to the lender for transfer into the tenant improvement and leasing subaccount.
Common Charges Reserves – On each monthly payment date, the borrower will deposit an amount equal to the monthly amount (currently estimated at $39,000 per year or $3,250 per month) as set forth in the approved operating budget for common charges payable on such payment date (plus any other amounts that may be due for common charges which are not included in the approved operating budget) in order to accumulate with the lender sufficient funds to pay all common charges during the next three months prior to their respective due dates.
Lockbox / Cash Management. The Piazza Alta Whole Loan is structured with a soft (for residential tenants) and hard (for commercial tenants) lockbox and in-place cash management. At origination, the Piazza Alta borrower was required to notify each non-residential tenant of the Piazza Alta Property to remit all amounts due with respect to the Piazza Alta Property directly to the lockbox account. Following the addition of any Additional Real Estate (as defined below) to the condominium in accordance with the Piazza Alta Whole Loan Documents, the borrower will deliver any rents received by the condominium association, including rents from the garage unit into the lockbox account. All rents received by the borrower or property manager (including, rents received from residential tenants, non-residential tenants, payments received from residential tenants in connection with the early termination or cancellation of residential leases and any rents pertaining to the garage unit) are required to be deposited within two business days of receipt into the lockbox account. All funds in the lockbox account are required to be swept each business day into the lender-controlled cash management account and applied and disbursed in accordance with the Piazza Alta Whole Loan documents. During the continuance of a Cash Trap Period (as defined below), any excess cash flow will be deposited into the cash collateral reserve subaccount. As long as no Cash Trap Period is in effect, any excess cash flow is required to transferred to the borrower.
A “Cash Trap Period” will commence upon: (i) the occurrence of an event of default; (ii) as of the origination date and any other payment date, the failure to maintain a debt service coverage ratio of at least 1.10x (it being acknowledged that a Cash Trap Period commenced as of the origination date as a result of this clause); or (iii) the occurrence of any mezzanine loan default; and will end, as applicable when (1) the Piazza Alta Whole Loan and all other obligations under the Piazza Alta Whole Loan Documents have been repaid in full or (2) with respect to clause (i) above only, such event of default has been cured and no other event of default has occurred and is continuing, or (3) with respect to clause (ii) above only, for two consecutive calendar quarters since the commencement of the existing Cash Trap Period (A) no monetary default, material non-monetary default or event of default has occurred and is continuing, (B) no event that could trigger another Cash Trap Period has occurred, (C) the debt service coverage ratio is at least equal to 1.10x as of the applicable payment dates following the end of each of two consecutive calendar quarters, and (D) the receipt of notice to the lender from the mezzanine lender that all monthly current mezzanine debt service payments (accrual component) (including, without limitation, any outstanding aggregate accrual component) under the Piazza Alta Mezzanine Loan (as defined below) has been paid current (and no other Cash Trap Period 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. | ||
| 38 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 1 – Piazza Alta | ||
then continuing), or (4) with respect to clause (iii) above only, receipt by the lender of a notice from the mezzanine lender, that all mezzanine loan defaults under the Piazza Alta Mezzanine Loan have either been cured or waived (and no other Cash Trap Period is then continuing.
Acquisition of Additional Real Estate. Pursuant to the Piazza Alta Whole Loan documents, the borrower has the right to acquire the Additional Real Estate as a general common element (each, an “Acquisition”), subject to the condominium declaration and subject to certain conditions set forth in the Piazza Alta Whole Loan documents, including that: (i) no acceleration of the Piazza Alta Whole Loan and no event of default has occurred, (ii) the proposed Acquisition will not be permitted within thirty (30) days prior to or following a securitization and (iii) receipt of rating agency confirmations. The “Additional Real Estate” consists of two parcels: (i) a vacant strip of land which was formerly known as Germantown Avenue and (ii) a parking garage located at 145 Widley Street (which exists beneath the roof amenity unit/pool which is already a general common element of the Piazza Alta condominium).
Subordinate and Mezzanine Debt. Concurrently with the origination of the Piazza Alta Whole Loan, a $126,100,000 mezzanine loan was funded (the “Piazza Alta Mezzanine Loan” and together with the Piazza Alta Whole Loan, the “Piazza Alta Total Debt”), which is secured by the direct equity interests in the borrower. The Piazza Alta Mezzanine Loan accrues interest at a rate of 10.50000% per annum and is coterminous with the Piazza Alta Whole Loan.
With respect to the Piazza Alta Mezzanine Loan, on each payment date, the mezzanine borrower is required to pay an amount equal to the monthly debt service, based on the current pay rate of 8.50000% per annum. In addition, (1) if any additional amount derived from the Piazza Alta Property is then available pursuant to the Piazza Alta Whole Loan documents, then such amount will be applied to the monthly debt service (accrual component) (2.0000% per annum), and then (2) if any additional amount derived from the Pizza Alta Property is then available pursuant to the Piazza Alta Whole Loan documents, then such amount will be applied to the aggregate accrual component (any monthly debt service (accrual component) that has not been paid due to insufficient cash flow and added to the Piazza Alta Mezzanine Loan) then outstanding. To the extent the aggregate accrual component is remaining unpaid at the maturity date of the Piazza Alta Whole Loan, the aggregate accrual component will be due and payable in full at the maturity date. Based on Piazza Alta Total Debt, the Cut-off Date LTV, UW NCF DSCR and UW NOI Debt Yield are 66.3%, 1.10x and 7.0%, respectively.
Partial Release. 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. | ||
| 39 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 2 – Westfarms | ||
| 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 2023-5C2 | |
| No. 2 – Westfarms | ||
| 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 2023-5C2 | |
| No. 2 – Westfarms | ||
| 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 2023-5C2 | |
| No. 2 – Westfarms | ||
| 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 2023-5C2 | |
| No. 2 – Westfarms | ||
| Mortgage Loan Information | Property Information | |||
| Mortgage Loan Seller: | GSMC | Single Asset / Portfolio: | Single Asset | |
| Original Principal Balance(1): | $65,000,000 | Title: | Fee | |
| Cut-off Date Principal Balance(1): | $65,000,000 | Property Type – Subtype: | Retail – Super Regional Mall | |
| % of IPB: | 8.4% | Net Rentable Area (SF)(5): | 501,990 | |
| Loan Purpose: | Refinance | Location: | West Hartford, CT | |
| Borrower: | West Farms Mall, LLC | Year Built / Renovated: | 1974 / 2013 | |
| Borrower Sponsor: | The Taubman Realty Group LLC | Occupancy: | 95.9% | |
| Interest Rate: | 7.7950% | Occupancy Date: | 8/25/2023 | |
| Note Date: | 8/31/2023 | 4th Most Recent NOI (As of): | $26,506,171 (12/31/2020) | |
| Maturity Date: | 9/6/2028 | 3rd Most Recent NOI (As of): | $29,775,349 (12/31/2021) | |
| Interest-only Period: | 60 months | 2nd Most Recent NOI (As of): | $28,924,568 (12/31/2022) | |
| Original Term: | 60 months | Most Recent NOI (As of): | $30,911,416 (TTM 6/30/2023) | |
| Original Amortization Term: | None | UW Economic Occupancy: | 96.4% | |
| Amortization Type: | Interest Only | UW Revenues: | $51,139,577 | |
| Call Protection(2): | L(26),D(27),O(7) | UW Expenses: | $16,217,012 | |
| Lockbox / Cash Management: | Hard / Springing | UW NOI: | $34,922,565 | |
| Additional Debt(1): | Yes | UW NCF: | $33,648,313 | |
| Additional Debt Balance(1): | $177,000,000 | Appraised Value / SF: | $547,800,000 / $1,091 | |
| Additional Debt Type(1): | Pari Passu | Appraisal Date: | 7/6/2023 | |
| Escrows and Reserves(3) | Financial Information(1) | |||||
| Initial | Monthly | Initial Cap | Cut-off Date Loan / SF: | $482 | ||
| Taxes: | $0 | Springing | N/A | Maturity Date Loan / SF: | $482 | |
| Insurance: | $0 | Springing | N/A | Cut-off Date LTV: | 44.2% | |
| Replacement Reserves: | $0 | $20,916 | N/A | Maturity Date LTV: | 44.2% | |
| TI / LC: | $0 | $41,833 | N/A | UW NCF DSCR: | 1.76x | |
| Other(4): | $3,402,016 | $0 | N/A | UW NOI Debt Yield: | 14.4% | |
| Sources and Uses | ||||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |||
| Whole Loan(1) | $242,000,000 | 98.6 | % | Loan Payoff | $240,789,383 | 98.2 | % | |
| Equity Contribution | 3,317,606 | 1.4 | Reserves | 3,402,016 | 1.4 | |||
| Closing Costs | 1,126,207 | 0.5 | ||||||
| Total Sources | $245,317,606 | 100.0 | % | Total Uses | $245,317,606 | 100.0 | % | |
| (1) | The Westfarms Mortgage Loan (as defined below) is part of the Westfarms Whole Loan (as defined below), which is evidenced by nine pari passu promissory notes with an aggregate principal balance of $242,000,000. The Cut-off Date Loan / SF, Maturity Date Loan / SF, Cut-off Date LTV, Maturity Date LTV, UW NCF DSCR and UW NOI Debt Yield numbers presented above are based on the aggregate principal balance of the promissory notes comprising the Westfarms Whole Loan. |
| (2) | The lockout period will be at least 26 payment dates beginning with and including the first payment date on October 6, 2023. Defeasance of the Westfarms Whole Loan in full is permitted at any time after the earlier to occur of (i) August 31, 2026 or (ii) the date that is two years from the closing date of the securitization that includes the last pari passu note of the Westfarms Whole Loan to be securitized. The assumed lockout period of 26 payments is based on the expected BMO 2023-5C2 securitization closing date in November 2023. The actual lockout period may be longer. |
| (3) | See “Escrows and Reserves” below for further discussion of reserve information. |
| (4) | Other Reserves is comprised of approximately $3,103,791 for outstanding TI/LC reserves, and $298,225.34 for gap and free rent. |
| (5) | The Westfarms Property (as defined below) is part of a larger mall which consists of 501,990 square feet of owned improvements, 560,820 square feet of leased fee improvements, and a 208,790 square foot non-collateral Macy’s. |
The Loan. The second largest mortgage loan Westfarms mortgage loan (the “Westfarms Mortgage Loan”) is part of a whole loan (the “Westfarms Whole Loan”) secured by the borrower’s fee interest in a shopping center situated on a 111.0-acre site located in West Hartford, Connecticut. The Westfarms Mortgage Loan is evidenced by the controlling note A-1 and the non-controlling notes A-3 and A-7, which have an aggregate original and outstanding principal balance as of the Cut-off Date of $65,000,000 and represents approximately 8.4% of the Initial Pool Balance.
The Westfarms Whole Loan was co-originated on August 31, 2023 by Goldman Sachs Bank USA (“GSBI”) and Wells Fargo Bank, National Association (“WFB”). The “Westfarms Property” consists of 501,990 square feet of retail space enclosed within the 1.27 million square feet of total GLA at the Westfarms mall. Major tenants include American Eagle Outfitters, Victoria’s Secret and Forever 21. The
| 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 2023-5C2 | |
| No. 2 – Westfarms | ||
Westfarms Whole Loan proceeds were used to refinance the existing debt on the Westfarms Property and pay origination costs. The Westfarms Whole Loan accrues interest at a fixed rate of 7.7950% per annum.
The Westfarms Whole Loan had an original term of 60 months and has a remaining term of 58 months as of the Cut-off Date. The Westfarms Whole Loan requires interest-only payments during the full term. The scheduled maturity date of the Westfarms Whole Loan is the payment date in September 2028.
Voluntary prepayment of the Westfarms Whole Loan is permitted in whole (but not in part) on or after the monthly payment date in March 2028 without the payment of any prepayment premium. Defeasance of the Westfarms Whole Loan in whole (but not in part) is permitted after the earlier to occur of the date that is two years from the closing date of the securitization that includes the last pari passu note of the Westfarms Whole Loan to be securitized and August 31, 2026.
The table below summarizes the promissory notes that comprise the Westfarms Whole Loan. The relationship between the holders of the Westfarms 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” and “The Pooling and Servicing Agreement” in the Prospectus.
| Whole Loan Summary | ||||
| Note | Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece |
| A-1 | $40,000,000 | $40,000,000 | BMO 2023-5C2 | Yes |
| A-2-1 | $45,000,000 | $45,000,000 | BANK5 2023-5YR3 | No |
| A-2-2 | $50,000,000 | $50,000,000 | WFB(1) | No |
| A-2-3 | $26,000,000 | $26,000,000 | WFB(1) | No |
| A-3 | $20,000,000 | $20,000,000 | BMO 2023-5C2 | No |
| A-4 | $30,000,000 | $30,000,000 | UBS AG(1) | No |
| A-5 | $16,000,000 | $16,000,000 | GSBI(1) | No |
| A-6 | $10,000,000 | $10,000,000 | UBS AG(1) | No |
| A-7 | $5,000,000 | $5,000,000 | BMO 2023-5C2 | No |
| Whole Loan | $242,000,000 | $242,000,000 | ||
| (1) | Expected to be contributed to one or more future securitization trusts. |
The Property.
The Westfarms Property is part of a two-story, Class A super regional mall located in West Hartford, Connecticut. The Westfarms Property portion of the super regional mall totals 501,990 owned square feet. The mall as a whole, which includes the Westfarms Property, totals 1,271,600 SF, and is anchored by JC Penney, Lord & Taylor (subleased by Jordan’s Furniture), Macy’s, Macy’s Men’s and Furniture, and Nordstrom. Macy’s owns its own store (208,790 SF) and underlying land and is not part of the collateral. The remaining anchors own their stores and ground lease the land from the borrower. The Westfarms Property is an enclosed mall with multiple wings and entrances, containing a food court and the leased fee department store anchors. Built in 1974 and most recently renovated in 2013, the entire mall is situated on a 111.0-acre parcel and contains 6,555 parking spaces (5.2/1,000 square feet, based on the total mall SF of approximately 1.27 million). The collateral tenancy, outside of the anchors, is granular with no tenant making up more than 4.5% of the owned SF.
Year-end 2022 in-line sales PSF are $888 PSF, representing a 13.1% and 19.1% increase since 2021 and 2019, respectively. Excluding Apple, 2022 in-line sales PSF are $713 PSF, representing a 11.7% and 19.8% increase since 2021 and 2019, respectively. As of year-end 2022, the in-line occupancy cost ratio is 11.5% including Apple and 14.2% excluding Apple. The table below provides an overview of the sales by tenancy type.
Tenant Sales by Tenancy Type(1) | ||||||||
Tenancy Type | 2019 Sales | 2019 PSF | 2020 Sales | 2020 PSF | 2021 Sales | 2021 PSF | 2022 Sales | 2022 PSF |
| Inline (< 10,000 SF) | $247,469,700 | $746 | $161,469,160 | $509 | $250,393,896 | $786 | $265,663,994 | $888 |
| Occupancy Cost | 14.9% | 18.6% | 12.2% | 11.5% | ||||
| Inline (< 10,000 SF) excluding Apple | $193,280,891 | $595 | $128,259,329 | $413 | $199,111,246 | $638 | $208,344,455 | $713 |
| Occupancy Cost | 18.7% | 22.7% | 14.9% | 14.2% | ||||
| (1) | Based on tenant sales reported to the sponsor . |
| 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 2023-5C2 | |
| No. 2 – Westfarms | ||
Major Tenants. The three largest tenants based on underwritten base rent are American Eagle Outfitters, Victoria’s Secret and Forever 21.
American Eagle Outfitters (9,331 SF, 1.9% of net rentable area (“NRA”), 2.9% of underwritten base rent) American Eagle Outfitters is a clothing and accessories retailer operating stores in the United States, Canada, Mexico and Hong Kong. Founded in 1977, the company ships to eight countries worldwide through its websites. The company achieved revenue of $5 billion for the fiscal year ending 2022. American Eagle Outfitters occupies approximately 9,331 SF on a lease that expires in January 2026 with no renewal options nor termination options. American Eagle Outfitters currently pays $85.00 per SF with no scheduled rent increases.
Victoria’s Secret (9,819 SF, 2.0% of NRA, 2.6% of underwritten base rent) Founded in 1977, Victoria’s Secret is a Fortune 500 specialty retailer of modern, fashion-inspired collections including underwear, lingerie, casual sleepwear, athleisure and swim, as well as fragrances and body care. Victoria’s Secret is owned by the parent company Victoria’s Secret & Co., which comprises two brands — Victoria’s Secret and PINK — and has a global footprint of 1,360 retail stores in approximately 70 countries and is headquartered in Columbus, Ohio. Victoria’s Secret occupies two separate spaces, a 9,019 SF in-line retail store and an 800 SF storage space, both with leases that expire January 31, 2025 with no renewal options nor termination options. Victoria’s Secret currently pays $72.96 per SF across both leases with no scheduled rent increases.
Forever 21 (22,512 SF, 4.5% of NRA, 2.5% of underwritten base rent) Forever 21 is a fast fashion retailer specializing in the latest trends. Today, the company operates in more than 540 locations globally. Forever 21 has been a tenant since August 2013. Forever 21’s lease expired in January 31, 2023 and it is currently operating on a month to month basis. Forever 21 is currently in negotiations to execute a new lease. However, we cannot assure you when or if Forever 21 will enter into a new lease. Additionally, the tenant is paying percentage rent in lieu of base rent of 13.5% of its trailing twelve-month sales, which equates to $31.13 PSF in rent.
Environmental. The Phase I environmental assessment of the Westfarms Property dated July 17, 2023 identified no recognized environmental conditions, controlled environmental conditions or significant data gaps with the property. See “Description of the Mortgage Pool—Environmental Considerations” in the Prospectus.
The following table presents certain information relating to the historical occupancy of the Westfarms Property:
| Historical and Current Occupancy(1)(2) | |||
| 2021 | 2022 | 6/30/2023 | Current(3) |
| 93.3% | 95.2% | 93.1% | 95.9% |
| (1) | Historical Occupancies are as of December 31 of each respective year, unless otherwise specified. |
| (2) | Represents occupancy for the collateral and excludes the leased fee tenants. |
| (3) | Based on the underwritten rent roll dated August 25, 2023. |
| 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 2023-5C2 | |
| No. 2 – Westfarms | ||
The following table presents certain information relating to the major tenants (of which, certain tenants may have co-tenancy provisions) at the Westfarms Property:
| Top Tenant Summary | |||||||
| Tenant Name | Credit Rating (Fitch/Moody's/ S&P)(1) | Net Rentable Area (SF) | % of Total NRA | UW Base Rent PSF(2)(3) | UW Base Rent(2)(3) | % of Total UW Base Rent(4) | Lease Exp. Date |
| Anchor Tenants (leased fee)(5) | |||||||
| Lord & Taylor(6) | NR/NR/NR | 114,700 | NAP | $1.77 | $202,735 | 43.3% | 2/3/2034 |
| Nordstrom | BB+/Ba1/BB+ | 175,415 | NAP | 0.80 | 140,000 | 29.9 | 2/1/2025 |
| JC Penney | NR/NR/NR | 190,713 | NAP | 0.66 | 125,000 | 26.7 | 9/30/2032 |
| Macy’s Mens and Furniture Gallery | BBB-/Ba1/BB+ | 79,992 | NAP | 0.00 | 0 | 0.0 | 5/31/2025 |
| Total/Wtd. Avg. | 560,820 | NAP | $0.83 | $467,735 | 100.0% | ||
| Major Tenants | |||||||
| American Eagle Outfitters | NR/NR/NR | 9,331 | 1.9% | 85.00 | $793,135 | 2.9% | 1/31/2026 |
| Victoria’s Secret(7) | NR/Ba3/BB- | 9,819 | 2.0 | 72.96 | 716,425 | 2.6 | 1/31/2025 |
| Forever 21(8) | NR/NR/NR | 22,512 | 4.5 | 31.13 | 700,785 | 2.5 | 1/31/2023 |
| Talbots | NR/NR/CCC- | 9,769 | 1.9 | 70.55 | 689,211 | 2.5 | 1/31/2024 |
| Banana Republic | NR/Ba3/BB | 8,534 | 1.7 | 76.17 | 650,000 | 2.3 | 1/31/2024 |
| Urban Outfitters | NR/NR/NR | 10,958 | 2.2 | 59.32 | 650,000 | 2.3 | 1/31/2027 |
| Arhaus(9) | NR/NR/NR | 11,155 | 2.2 | 56.00 | 624,680 | 2.2 | 9/30/2033 |
| Sephora | NR/NR/NR | 5,843 | 1.2 | 106.83 | 624,195 | 2.2 | 1/31/2027 |
| Apple Inc(10) | NR/Aaa/AA+ | 9,503 | 1.9 | 65.16 | 619,197 | 2.2 | 1/31/2024 |
| Foot Locker | NR/Ba2/BB | 11,122 | 2.2 | 53.20 | 591,690 | 2.1 | 6/30/2025 |
| Ten Largest Owned Tenants | 108,546 | 21.6% | $61.35 | $6,659,318 | 24.0% | ||
| Remaining Owned Tenants(11) | 372,656 | 74.2 | 56.73 | 21,142,533 | 76.0 | ||
| Occupied Total Collateral(12) | 481,202 | 95.9% | $57.78 | 27,801,851 | 100.0% | ||
| Vacant Space (Owned) | 20,788 | 4.1 | |||||
| Totals/ Wtd. Avg. All Owned Tenants | 501,990 | 100% | |||||
| (1) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
| (2) | UW Base Rent PSF and UW Base Rent includes percentage in-lieu of rents totaling $1,536,455. |
| (3) | UW Base Rent PSF and UW Base Rent includes $506,056 of rent steps through September 2024. |
| (4) | % of Total UW Base Rent for the Anchor Tenants is calculated based on the total UW Base Rent for Anchor Tenants. % of Total UW Base Rent for the Owned Tenants is calculated based on the total UW Base Rent for Owned Tenants. |
| (5) | The anchor tenants own their own improvements and ground lease the land from the borrower. The square footage of the leased fee improvements is not included in the owned SF total. The non-collateral 208,790 square foot Macy’s anchor box is excluded. |
| (6) | Jordan’s Furniture is subleasing the former Lord & Taylor store and is expected to open in February 2024. Gap rent for the tenant was reserved upfront. The tenant will have two, 10-year options to extend, followed by six, 5-year options. |
| (7) | Victoria’s Secret’s UW Base Rent includes $40,000 of rent for an 800 SF storage parcel leased through January 31, 2025. |
| (8) | Forever 21’s UW Base Rent PSF and UW Base Rent represent percentage in-lieu of rent based on the tenant’s TTM sales. |
| (9) | Arhaus has a lease start date of October 1, 2023. |
| (10) | Apple’s UW Base Rent includes $65,000 of rent for a 2,761 SF storage parcel leased through January 31, 2024. |
| (11) | Non-Major Tenants includes two tenants, Francesca’s Collection and Alo Yoga, totaling 6,998 SF (1.4% of owned SF) with lease start dates in November 2023 and September 2023, respectively. |
| (12) | Occupied Total Collateral does not include the square feet or underwritten rent from the leased fee anchor tenants. |
| The following table presents a summary of sales and occupancy costs for certain tenants at the Westfarms Property. |
| Sales and Occupancy Cost Summary(1) | ||||
| 2020 Sales (PSF) | 2021 Sales (PSF) | 2022 Sales (PSF) | 2022 Occupancy Cost | |
| Forever 21 | $170 | $317 | $255 | 13.9% |
| HM | $227 | $372 | $365 | 8.5% |
| Pottery Barn | $252 | $375 | $442 | 17.5% |
| Gap Gap Kids | $69 | $192 | $191 | 35.8% |
| Anthropologie | $76 | $225 | $257 | 9.4% |
| Arhaus(2) | NAV | NAV | NAV | NAV |
| Foot Locker | $512 | $620 | $677 | 16.6% |
| Urban Outfitters | $207 | $335 | $306 | 19.4% |
| Brooks Brothers | $47 | $187 | $239 | 12.0% |
| (1) | Information obtained from the borrower. |
| (2) | Arhaus lease begins October 1, 2023. |
| 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 2023-5C2 | |
| No. 2 – Westfarms | ||
The following table presents certain information relating to the lease rollover schedule at the Westfarms Property:
| Lease Rollover Schedule(1)(2)(3) | ||||||||||||
| 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 | 14 | 20,788 | 4.1 | % | NAP | NAP | 20,788 | 4.1% | NAP | NAP | ||
| 2023 & MTM | 7 | 41,613 | 8.3 | $1,621,978 | 5.8 | % | 62,401 | 12.4% | $1,621,978 | 5.8% | ||
| 2024 | 50 | 119,908 | 23.9 | 7,758,635 | 27.9 | 182,309 | 36.3% | $9,380,613 | 33.7% | |||
| 2025 | 20 | 77,670 | 15.5 | 4,436,677 | 16.0 | 259,979 | 51.8% | $13,817,291 | 49.7% | |||
| 2026 | 12 | 31,740 | 6.3 | 2,526,862 | 9.1 | 291,719 | 58.1% | $16,344,153 | 58.8% | |||
| 2027 | 13 | 68,411 | 13.6 | 3,473,652 | 12.5 | 360,130 | 71.7% | $19,817,804 | 71.3% | |||
| 2028 | 12 | 45,166 | 9.0 | 2,576,028 | 9.3 | 405,296 | 80.7% | $22,393,833 | 80.5% | |||
| 2029 | 11 | 40,569 | 8.1 | 2,555,772 | 9.2 | 445,865 | 88.8% | $24,949,605 | 89.7% | |||
| 2030 | 10 | 23,348 | 4.7 | 1,365,972 | 4.9 | 469,213 | 93.5% | $26,315,576 | 94.7% | |||
| 2031 | 1 | 1,626 | 0.3 | 123,202 | 0.4 | 470,839 | 93.8% | $26,438,779 | 95.1% | |||
| 2032 | 2 | 16,296 | 3.2 | 528,000 | 1.9 | 487,135 | 97.0% | $26,966,779 | 97.0% | |||
| 2033 | 2 | 11,826 | 2.4 | 682,769 | 2.5 | 498,961 | 99.4% | $27,649,548 | 99.5% | |||
| 2034 & Beyond | 2 | 3,029 | 0.6 | 152,303 | 0.5 | 501,990 | 100.0% | $27,801,851 | 100.0% | |||
| Total | 156 | 501,990 | 100.0 | % | $27,801,851 | 100.0 | % | |||||
| (1) | Information is based on the underwritten rent roll dated August 25, 2023. |
| (2) | Certain tenants may have lease termination options that are exercisable prior to the stated expiration date of the subject lease or leases which are not considered in the Lease Rollover Schedule. |
| (3) | The Lease Rollover Schedule excludes the square footage and underwritten rent from the leased fee anchor tenants. |
The following table presents certain information relating to the underwritten cash flows of the Westfarms Property:
| Operating History and Underwritten Net Cash Flow | ||||||||
| 2020 | 2021 | 2022 | TTM June 2023 | Underwritten | Per Square Foot(1) | % | ||
| Rents in Place | $22,983,686 | $23,234,186 | $24,713,923 | $25,823,273 | $28,269,586(2)(3) | $26.60 | 55.3 | % |
| Overage/Percentage Rent | 394,858 | 2,874,076 | 2,662,752 | 2,728,906 | 2,365,780 | 2.23 | 4.6 | |
| Market Revenue from Vacant Units | 0 | 0 | 0 | 0 | 1,902,406 | 1.79 | 3.7 | |
| Commercial Reimbursement Revenue | 19,963,668 | 16,709,550 | 16,693,640 | 16,871,476 | 17,392,956 | 16.37 | 34.0 | |
| Gross Potential Rent | $43,342,212 | $42,817,812 | $44,070,315 | $45,423,655 | $49,930,728 | $46.98 | 97.6 | % |
| Commercial Credit Loss | (3,406,378) | 2,090,563 | (20,141) | (8,386) | 0 | 0.00 | 0.0 | |
| Net Rental Income | $39,935,834 | $44,908,375 | $44,050,174 | $45,415,269 | $49,930,728 | $46.98 | 97.6 | % |
| Other Income(4) | 2,523,603 | 2,726,733 | 3,089,676 | 3,113,628 | 3,111,255 | 2.93 | 6.1 | |
| (Vacancy/Credit Loss) | 0 | 0 | 0 | 0 | (1,902,406) | (1.79) | (3.7 | ) |
| Effective Gross Income | $42,459,436 | $47,635,108 | $47,139,850 | $48,528,897 | $51,139,577 | $48.12 | 100.0 | % |
| Total Expenses | 15,953,265 | 17,859,759 | 18,215,282 | 17,617,481 | 16,217,012 | 15.26 | 31.7 | |
| Net Operating Income | $26,506,171 | $29,775,349 | $28,924,568 | $30,911,416(5) | $34,922,565(5) | $32.86 | 68.3 | % |
| Total TI/LC, Capex/RR | 0 | 0 | 0 | 0 | 1,274,252 | 1.20 | 2.5 | |
| Net Cash Flow | $26,506,171 | $29,775,349 | $28,924,568 | $30,911,416 | $33,648,313 | $31.66 | 65.8 | % |
| (1) | Per Square Foot is based on the total collateral square feet of 1,062,810. |
| (2) | Rents in Place includes percentage in-lieu of rents totaling $1,536,455 and includes $506,056 of rent steps through September 2024. |
| (3) | Rents in Place includes $467,735 of underwritten rent attributed to the four leased fee tenants. |
| (4) | Other Income includes rental revenue from kiosks/temporary/specialty and temporary tenant revenue. |
| (5) | The increase from the TTM June 30, 2023 NOI to the UW NOI is driven by 11 leases being signed in 2023 totaling 29,630 SF (5.9% of owned SF), and 6.8% of underwritten rent. Additional drivers include rent steps of $506,056, and a decrease in both the management fee and real estate taxes. |
The Market. The Westfarms Property is located in West Hartford, Connecticut. The property straddles the Farmington and West Hartford town lines. The Westfarms Property benefits from close access to major thoroughfares, including Route 4, Route 173/218, Interstate 84 and Interstate 91. Major employers in the Hartford Metropolitan Statistical Area (“Hartford MSA”) include Arch Parent, Inc., Mount Sinai Rehabilitation Hospital, Inc. and Pratt & Whitney Engine Services, Inc. The average annual household income in the Hartford MSA is $109,559.
| 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 2023-5C2 | |
| No. 2 – Westfarms | ||
Within a 5-, 10- and 15-mile radius of the Westfarms Property, the 2022 average household income was approximately $90,496, $99,948, and $103,767, respectively; and within the same radii, the 2022 estimated population was 252,943, 606,771, and 944,379, respectively.
According to a third-party market research report, the Westfarms Property is situated within the Farmington retail submarket. As of August 2023, the submarket reported total inventory of approximately 2.29 million square feet with a 1.0% vacancy rate and average rents of $20.31 per square foot.
The following table presents select comparable recent anchored retail property leases for the Westfarms Property:
Summary of Comparable Anchor Retail Leases(1)
Property Name | Location | Year Built / Renovated or Expanded | Total Building SF | Total Occupancy | Distance to Subject | Sales Per SF | Anchor Tenants |
| Westfarms | West Hartford, CT | 1974 / 2013 | 1,265,019 | 99% | -- | $759.30 | JC Penney Jordan’s Furniture Macy’s Men’s & Furniture Macy’s Nordstrom |
| The Shoppes at Buckland Hills | Manchester, CT | 1990 / 2003 | 1,048,198 | 96% | 12.0 miles Northeast | $433.00 | JC Penney Macy’s |
| Meriden Mall | Meriden, CT | 1971 / 1999 | 893,052 | 70% | 12.0 miles South | $265.00 | Best Buy Dick’s Sporting Goods Boscov’s |
| Brass Mill Center | Waterbury, CT | 1997 | 1,179,405 | 86% | 18.0 miles Southwest | $386.00 | JC Penney Burlington |
| Holyoke Mall at Ingleside | Holyoke, MA | 1979 / 1995 | 1,557,138 | 92% | 31.0 miles North | $845.00 | JC Penney Macy’s Target Best Buy Burlington Christmas Tree Shop |
| (1) | Source: Appraisal, unless stated otherwise. |
The following table presents information relating to the appraisal’s market rent conclusion for the Westfarms Property:
| Market Rent Summary(1) | ||||
| Market Rent (PSF) | Lease Term (Yrs) | New Tenant Allowance PSF | Rent Increase Projection | |
| Shops/Inline 0-1,000 SF | $115.00 | 7 | $35.00 | 2.5% |
| Shops/Inline 1,001-2,000 SF | $62.00 | 7 | $35.00 | 2.5% |
| Shops/Inline 2,001-3,500 SF | $70.00 | 7 | $35.00 | 2.5% |
| Shops/Inline 3,501-5,000 SF | $54.00 | 7 | $35.00 | 2.5% |
| Shops/Inline 5,001-10,000SF | $53.00 | 7 | $35.00 | 2.5% |
| 10,000 SF+ | $25.00 | 7 | $35.00 | 2.5% |
| Restaurant | $33.00 | 7 | $50.00 | 2.5% |
| Jewelry | $120.00 | 7 | $35.00 | 2.5% |
| Kiosk | $600.00 | 5 | $0.00 | Flat |
| (1) | Source: Appraisal. |
The Borrower and Borrower Sponsor. The borrower is West Farms Mall, LLC, a Delaware limited liability company with two independent managers. The borrower is a joint venture between The Taubman Realty Group LLC (78.9%) and Victor J. Dowling Jr. (20.9%). The borrower sponsor and non-recourse carveout guarantor of the Westfarms Whole Loan is The Taubman Realty Group LLC. So long as the guarantor is a key principal or affiliate of a key principal (initially defined as any of Simon Property Group, Inc., Simon Property Group, L.P. or The Taubman Realty Group LLC), the liability under the guaranty (which includes environmental matters) is capped at 20% of the outstanding principal balance of the Westfarms Whole Loan at such time (including for matters identified in the Westfarms Mortgage Loan documents as being full recourse), plus reasonable out-of-pocket costs and expenses in enforcing the guaranty.
The Taubman Company was founded in 1950 and has developed enclosed regional malls across the United States and Asia and the company has a portfolio of 24 of regional, super-regional, and outlet shopping malls located in major markets.
| 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 2023-5C2 | |
| No. 2 – Westfarms | ||
Property Management. The Westfarms Property is managed by The Taubman Company LLC, an affiliate of the borrower sponsor.
Escrows and Reserves.
Tax Escrows – During a Lockbox Event Period (as defined below), or at any time (x) any property taxes are not paid by the borrower prior to the assessment of a penalty, or (y) upon request of the lender the borrower fails to promptly provide evidence that property taxes have been paid prior to a penalty, the Westfarms Whole Loan documents require the borrower to make monthly payments into the real estate tax reserve in an amount equal to 1/12th of the property taxes that the lender reasonably estimates will be payable during the ensuing 12 months.
Insurance Escrows – During the Lockbox Event Period, if the borrower has not provided satisfactory evidence to the lender that the property is covered by policies that are being maintained as part of a reasonably acceptable blanket insurance policy, the Westfarms Whole Loan documents require the borrower to make ongoing monthly deposits in an amount equal to 1/12th of the insurance premiums that the lender reasonably estimates will be payable for the renewal of the coverage afforded by the policy in order to accumulate sufficient funds to pay the premiums at least 30 days prior to expiration.
Replacement Reserves – The Westfarms Whole Loan documents require ongoing monthly deposits of $20,916 for replacement reserves.
TI/LC Reserve – The Westfarms Whole Loan documents require ongoing monthly deposits of $41,833 for tenant improvements and leasing commissions reserves.
Gap Rent/Free Rent Reserve – The Westfarms Whole Loan documents require an upfront deposit of $298,225.34 for gap and free rent related to Lord & Taylor (subleased by Jordan’s Furniture), Francesca’s Collection, Alo Yoga, and Arhaus.
Outstanding TILC Reserve – The Westfarms Whole Loan documents require an upfront deposit of $3,103,791 for outstanding tenant improvements and leasing commissions related to 11 tenants.
Lockbox / Cash Management. The Westfarms Whole Loan is structured with a hard lockbox and springing cash management. The borrower is required to deposit all rents into a lender-controlled lockbox account within two business days of receipt, and to direct all tenants to make direct rent deposits into the lockbox account. As long as a Lockbox Event Period is not in effect, all funds in the lockbox account are required to be distributed to the borrower. During the continuance of a Lockbox Event Period, all funds in the lockbox will be transferred to a lender-controlled cash management account to be disbursed in accordance with the cash management waterfall set forth in the Westfarms Whole Loan documents, with any excess funds required to be held as additional security in an excess cash flow subaccount controlled by the lender for so long as the Lockbox Event Period continues.
A “Lockbox Event Period” will commence upon the earlier of the following:
| (i) | the occurrence of an event of default; |
| (ii) | any bankruptcy action of the borrower; |
| (iii) | a bankruptcy action of the manager if the manager is an affiliate of the borrower, and provided the manager is not replaced within 60 days; or |
| (iv) | the net operating income debt yield, based on the trailing four calendar quarter period, is below 10.5%, for two consecutive quarters. |
A “Lockbox Event Period” will end upon the occurrence of the following:
| (A) | with regard to clause (i), the cure of such event of default; |
| (B) | with regard to clauses (ii) and (iii), the borrower replaces the manager with a qualified manager under a replacement management agreement within 60 days, or the bankruptcy proceeding is discharged or dismissed within 90 days without any adverse consequences to the Westfarms Property or Westfarms Mortgage Loan; or |
| (C) | with regard to clause (iv), the net operating income debt yield, based on the trailing four calendar quarter period, is 10.5% or greater, for two consecutive quarters. |
Subordinate and Mezzanine Debt. None.
Partial Release. Not permitted.
Ground Lease. None.
Terrorism Insurance. The loan documents require that the “all risk” insurance policy required to be maintained by the borrower provides coverage for terrorism in an amount equal to the full replacement cost of the Westfarms Property, as well as business interruption insurance covering no less than the 18-month period following the occurrence of a casualty event, together with a 12-month extended period of indemnity (provided that if TRIPRA or a similar statute is not in effect, the borrower will not be obligated to pay terrorism insurance premiums in excess of two times the annual premium for the Westfarms Property and business interruption/rental loss insurance coverage). See “Risk Factors—Risks Relating to the Mortgage Loans—Terrorism Insurance May Not Be Available for All Mortgaged Properties” in the prospectus.
| 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 2023-5C2 | |
| No. 3 – Shadow Lake Towne 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 2023-5C2 | |
| No. 3 – Shadow Lake Towne 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. | ||
| 52 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 3 – Shadow Lake Towne 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. | ||
| 53 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 3 – Shadow Lake Towne Center | ||
| Mortgage Loan Information | Property Information | |||
| Mortgage Loan Seller: | LMF | Single Asset / Portfolio: | Single Asset | |
| Original Principal Balance: | $62,500,000 | Title: | Fee | |
| Cut-off Date Principal Balance: | $62,500,000 | Property Type – Subtype: | Retail – Anchored | |
| % of IPB: | 8.0% | Net Rentable Area (SF): | 531,557 | |
| Loan Purpose: | Refinance | Location: | Papillion, NE | |
| Borrower: | PPG Shadow Real Estate LLC | Year Built / Renovated: | 2007 / NAP | |
| Borrower Sponsor: | PREP Property Group LLC | Occupancy: | 79.3% | |
| Interest Rate: | 6.40000% | Occupancy Date: | 5/9/2023 | |
| Note Date: | 9/15/2023 | 4th Most Recent NOI (As of): | $5,096,465 (12/31/2020) | |
| Maturity Date: | 10/6/2028 | 3rd Most Recent NOI (As of): | $5,079,237 (12/31/2021) | |
| Interest-only Period: | 60 months | 2nd Most Recent NOI (As of): | $5,330,968 (12/31/2022) | |
| Original Term: | 60 months | Most Recent NOI (As of): | $5,541,067 (TTM 6/30/2023) | |
| Original Amortization Term: | None | UW Economic Occupancy: | 77.0% | |
| Amortization Type: | Interest Only | UW Revenues: | $10,370,619 | |
| Call Protection: | L(25),D(28),O(7) | UW Expenses: | $4,289,944 | |
| Lockbox / Cash Management: | Hard / Springing | UW NOI: | $6,080,674 | |
| Additional Debt: | No | UW NCF: | $6,016,888 | |
| Additional Debt Balance: | NAP | Appraised Value / Per SF: | $92,700,000 / $174 | |
| Additional Debt Type: | NAP | Appraisal Date: | 3/2/2023 | |
| Escrows and Reserves(1) | Financial Information | |||||
| Initial | Monthly | Initial Cap | Cut-off Date Loan / SF: | $118 | ||
| Taxes: | $443,871 | $140,912 | N/A | Maturity Date Loan / SF: | $118 | |
| Insurance: | $146,948 | $12,723 | N/A | Cut-off Date LTV: | 67.4% | |
| Replacement Reserve: | $0 | $5,316 | N/A | Maturity Date LTV: | 67.4% | |
| Rollover Reserve: | $3,500,000 | Springing | $1,500,000 | UW NCF DSCR: | 1.48x | |
| Holdback Reserve: | $5,000,000 | $0 | N/A | UW NOI Debt Yield: | 9.7% | |
| Unfunded Obligations: | $1,232,779 | $0 | N/A | |||
| Free Rent Reserve: | $116,093 | $0 | N/A
| |||
| Sources and Uses | |||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | ||
| Mortgage Loan | $62,500,000 | 100.0% | Loan Payoff | $39,048,885 | 62.5 | % | |
| Upfront Reserves | 10,439,691 | 16.7 | |||||
| Return of Equity | 7,263,665 | 11.6 | |||||
| Closing Costs | 5,747,760 | 9.2 | |||||
| Total Sources | $62,500,000 | 100.0% | Total Uses | $62,500,000 | 100.0 | % | |
| (1) | For a full description of Escrows and Reserves, including the holdback reserve, please refer to the “Escrows and Reserves” section below. |
The Loan. The third largest mortgage loan (the “Shadow Lake Towne Center Mortgage Loan”) was originated by LMF Commercial, LLC, has an outstanding principal balance as of the Cut-off Date of $62,500,000 and is secured by a first lien mortgage on the borrower’s fee interest in a 531,557 square foot anchored and grocery shadow-anchored retail property located in Papillion, Nebraska (the “Shadow Lake Towne Center Property”). The Shadow Lake Towne Center Mortgage Loan accrues interest at a rate of 6.40000% per annum. The Shadow Lake Towne Center Mortgage Loan has a 5-year term and is interest only for the entire loan.
The Property. The Shadow Lake Towne Center Property, located in Papillion, Nebraska was built in 2007 and consists of multiple stand-alone restaurant buildings and multiple-tenant retail strip center buildings situated on an 86.1-acre parcel. The Shadow Lake Towne Center Property is part of a larger shopping center and is shadow-anchored by grocery tenant Hy-Vee (not part of the collateral). The Shadow Lake Towne Center Property is anchored by Dick’s Sporting Goods, Burlington Coat Factory, T.J. Maxx, Ross, Wall to Wall Wine & Spirits, Michael’s, HomeGoods, and JC Penney. JC Penney owns its own improvements and is subject to a ground lease from the borrower; JC Penney’s square footage is not included in the underwritten overall square footage of the Shadow Lake Towne Center Property. A total of 3,232 onsite surface parking spaces are available, resulting in a parking ratio of 6.08 spaces per 1,000 square feet of rentable area. As of May 9, 2023, the Shadow Lake Towne Center Property was 79.3% occupied.
| 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 2023-5C2 | |
| No. 3 – Shadow Lake Towne Center | ||
Major Tenants.
Dick’s Sporting Goods (50,000 square feet, 9.4% of NRA; Baa3/BBB/NR by Moody’s/S&P/Fitch): Founded in 1948 and headquartered in Coraopolis, Pennsylvania, Dick’s Sporting Goods (“Dick’s”) is a retailer of sporting goods. Dick’s also owns and operates Golf Galaxy, Field & Steam specialty stores, Going, Going, Gone! discount stores, Public Lands outdoor specialty stores and GameChanger, a youth sports mobile app for scheduling, communications, live scorekeeping and video streaming. Dick’s currently operates more than 800 retail stores and 5 distribution centers. Dick’s has been a tenant at the Shadow Lake Towne Center Property since 2007 under an initial ten-year lease which was renewed in 2017 and again in 2022. Dick’s has no termination option (other than as set forth below) and two, five-year renewal options remaining. Dick’s has a co-tenancy option which requires that at least 70% of the Shadow Lake Towne Center Property must be open for business by (i) a national occupant operating a minimum of 50 high quality retail stores of the types found in first class shopping centers or (ii) a regional occupant operating a minimum of 20 high quality retail stores of the type found in a first-class shopping center. If a co-tenancy violation occurs, Dick’s lease permits Dick’s to pay percentage rent of 3% of gross sales in lieu of rent. Dick’s may terminate its lease if the co-tenancy violation continues beyond one year. Additionally, in the event a Trigger Date (as defined below) occurs, Dick’s lease provides that the borrower will be prohibited from leasing to any tenant engaged in the business of the sale, rental and/or distribution, of health, fitness and/or exercise equipment, sporting goods, sporting equipment and/or athletic footwear. If an exclusive use violation occurs past the notice and cure period, Dick’s lease permits the tenant to either pay percentage rent of 2% of gross sales in lieu of rent or terminate the lease. The “Trigger Date” means the date on which either (i) the borrower grants or (ii) any other owner of non-collateral property at the shopping center grants, in each case, to any tenant that occupies more than 10,000 square feet (other than Hy-Vee) or any restaurant tenant the exclusive right to engage in any line of business at the Shadow Lake Towne Center Property or the entire shopping center, respectively.
Burlington (36,766 square feet, 6.9% of NRA; NR/BB+/NR by Moody’s/S&P/Fitch): Founded in 1972 and headquartered in Burlington, New Jersey, Burlington is a nationally recognized off-price retailer. Burlington operates approximately 927 stores as of January 28, 2023, primarily under the name Burlington Stores. Burlington stores offer an extensive selection of in-season, fashion-focused merchandise at up to 60% off other retailers' prices, including women’s ready-to-wear apparel, menswear, youth apparel, baby apparel, beauty, footwear, accessories, home, toys, gifts and coats. Burlington has been a tenant at the Shadow Lake Towne Center Property since 2019 under an initial ten-year lease expiring on February 28, 2030. Burlington has no termination option (other than as set forth below) and four, five-year renewal options. Burlington has a co-tenancy option which requires that at least 70% of the Shadow Lake Towne Center Property be open for business. If a co-tenancy violation occurs and continues for 180 days, Burlington’s lease permits Burlington to pay 50% of the then current rent. Burlington may terminate its lease if the co-tenancy violation continues for another 12 months beyond the initial 180 days.
T.J. Maxx (32,652 square feet, 6.1% of NRA; A2/A/NR by Moody’s/S&P/Fitch): Founded in 1976 and headquartered in Framingham, Massachusetts, T.J. Maxx is an off-price apparel and home fashions retailer in the United States and worldwide, with four global home offices, seven brands and approximately 4,700 stores in nine countries and five distinctive branded e-commerce sites. The brands under the T.J. Maxx umbrella include T.J. Maxx, Marshalls, HomeGoods, Sierra, Winners, HomeSense and TK Maxx. T.J. Maxx has been a tenant at the Shadow Lake Towne Center Property since 2007 under an initial ten-year lease. T.J. Maxx has extended its lease twice, most recently, in February 2023, and the current term expires on January 31, 2028. T.J. Maxx has no termination option (other than as set forth below) and three, five-year renewal options. T.J. Maxx has a co-tenancy option which requires that (1) Hy-Vee be open for business in at least 80,000 square feet, (2) JC Penney be open for business in at least 90,000 square feet and (3) at least four of Barnes & Nobles, Best Buy, DSW, BBB/Linens, Cost Plus, Pier 1, Old Navy, Petsmart or Office Max be open for business. If a co-tenancy violation occurs and continues for 180 days, T.J. Maxx’s lease permits the tenant to pay the lesser of percentage rent of 2% of gross sales in lieu of rent or minimum rent (currently $359,172 per year). T.J. Maxx may terminate its lease no later than 12 months after the initial 180 days.
| 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 2023-5C2 | |
| No. 3 – Shadow Lake Towne Center | ||
Environmental. According to a Phase I environmental assessment dated March 27, 2023, there was no evidence of any recognized environmental conditions at the Shadow Lake Towne Center Property.
| Historical and Current Occupancy | |||
| 2020(1) | 2021(1) | 2022(1) | Current(2) |
| 80.8% | 80.6% | 79.6% | 79.3% |
| (1) | Historical Occupancy is as of December 31 of each respective year. |
| (2) | Current Occupancy is as of May 9, 2023. |
The following table presents certain information relating to the largest tenants based on net rentable area at the Shadow Lake Towne Center Property:
| 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 Exp. Date | ||
| Dick’s Sporting Goods | Baa3/BBB/NR | 50,000 | 9.4 | % | $13.50 | $675,000 | 9.8 | % | 1/31/2028 |
| Burlington | NR/BB+/NR | 36,766 | 6.9 | $8.33 | 306,261 | 4.5 | 2/28/2030 | ||
| T.J. Maxx(4) | A2/A/NR | 32,652 | 6.1 | $11.00 | 359,172 | 5.2 | 1/31/2028 | ||
| Wall to Wall Wine & Spirits | NR/NR/NR | 29,998 | 5.6 | $10.00 | 299,980 | 4.4 | 10/31/2031 | ||
| Michaels | NR/A+/A+ | 21,830 | 4.1 | $11.00 | 240,130 | 3.5 | 9/30/2024 | ||
| HomeGoods, Inc. | A2/A/NR | 21,804 | 4.1 | $11.50 | 250,746 | 3.6 | 4/30/2033 | ||
| PetSmart | B1/B+/NR | 20,087 | 3.8 | $16.25 | 326,414 | 4.8 | 5/31/2032 | ||
| J.C. Penney | NR/NR/NR | 1(5) | 0.0 | (5) | $191,598 | 191,598 | 2.8 | 3/31/2027 | |
| Largest Tenants | 213,138 | 40.1 | % | $12.43 | $2,649,301 | 38.6 | % | ||
| Other Tenants | 208,216(6) | 39.2 | (6) | $20.27 | 4,221,475 | 61.4 | |||
| Occupied Collateral Total / Wtd. Avg. | 421,354 | 79.3 | % | $16.31 | $6,870,776 | 100.0 | % | ||
| Vacant Space | 110,203 | 20.7 | % | ||||||
| Collateral Total | 531,557 | 100.0 | % | ||||||
| (1) | Based on the underwritten rent roll dated May 9, 2023. |
| (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 contractual rent steps totaling $33,233 through August 2024. |
| (4) | T.J. Maxx pays percentage rent equal to 2% of the amount by which gross sales exceed the natural breakpoint (currently $17,958,600). |
| (5) | J.C. Penney operates under a 20-year ground lease and its overall square footage was not accounted for in the Shadow Lake Towne Center Property’s overall square footage; instead 1 square foot was assigned to J.C. Penney to underwrite the rent. |
| (6) | Red Robin operates under a ground lease and its overall square footage was not accounted for in the Shadow Lake Towne Center Property’s overall square footage, instead 1 square foot was assigned to Red Robin to underwrite the rent. |
The following table contains tenant sales history for the Shadow Lake Towne Center Property:
Tenant Sales(1) | |||||||
Tenancy Type | 2021 Sales | 2021 PSF | 2022 Sales | 2022 PSF | TTM Sales(2) |
TTM PSF(2) | Occupancy Costs(3) |
| T.J. Maxx | $7,455,543 | $228 | $11,221,654 | $344 | NAV | NAV | NAV |
| Old Navy | $3,229,805 | $207 | $2,863,463 | $184 | $2,824,621 | $181 | 13.1% |
| Inline (< 10,000 SF.) | $33,390,614 | $217 | $32,291,091 | $209 | $32,537,278 | $211 | 8.6% |
| (1) | Tenant sales are provided by the borrower. |
| (2) | TTM Sales and TTM PSF are for the trailing 12-month period ending March 2023. |
| (3) | Occupancy Costs is based on TTM Sales, underwritten base rent and underwritten reimbursements. |
| 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 2023-5C2 | |
| No. 3 – Shadow Lake Towne Center | ||
The following table presents certain information relating to tenant lease expirations at the Shadow Lake Towne 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 | 110,203 | 20.7 | % | NAP | NAP | 110,203 | 20.7% | NAP | NAP | |||
| 2023 & MTM | 4 | 6,925 | 1.3 | $191,354 | 2.8% | 117,128 | 22.0% | $191,354 | 2.8% | ||||
| 2024 | 9 | 50,736 | 9.5 | 934,997 | 13.6 | 167,864 | 31.6% | $1,126,351 | 16.4% | ||||
| 2025 | 4 | 15,518 | 2.9 | 328,155 | 4.8 | 183,382 | 34.5% | $1,454,506 | 21.2% | ||||
| 2026 | 7 | 17,683 | 3.3 | 475,494 | 6.9 | 201,065 | 37.8% | $1,930,000 | 28.1% | ||||
| 2027 | 10 | 53,682 | 10.1 | 1,374,646 | 20.0 | 254,747 | 47.9% | $3,304,646 | 48.1% | ||||
| 2028 | 5 | 102,353 | 19.3 | 1,372,190 | 20.0 | 357,100 | 67.2% | $4,676,836 | 68.1% | ||||
| 2029 | 0 | 0 | 0.0 | 0 | 0.0 | 357,100 | 67.2% | $4,676,836 | 68.1% | ||||
| 2030 | 4 | 52,706 | 9.9 | 590,696 | 8.6 | 409,806 | 77.1% | $5,267,532 | 76.7% | ||||
| 2031 | 4 | 39,421 | 7.4 | 499,486 | 7.3 | 449,227 | 84.5% | $5,767,018 | 83.9% | ||||
| 2032 | 4 | 26,186 | 4.9 | 469,432 | 6.8 | 475,413 | 89.4% | $6,236,450 | 90.8% | ||||
| 2033 & Beyond | 4 | 56,144 | 10.6 | 634,326 | 9.2 | 531,557 | 100.0% | $6,870,776 | 100.0% | ||||
| Total | 55 | 531,557(4) | 100.0 | % | $6,870,776(4) | 100.0% | |||||||
| (1) | Based on the underwritten rent roll dated May 9, 2023. |
| (2) | The schedule excludes non-owned spaces. |
| (3) | UW Base Rent Expiring, % of UW Base Rent Expiring, Cumulative UW Base Rent Expiring and Cumulative % of UW Base Rent Expiring includes contractual rent steps totaling $33,233 through August 2024. |
| (4) | Net Rentable Area Expiring include 1 square foot assigned to J.C. Penny and 1 square foot assigned to Red Robin, and UW Base Rent Expiring include ground lease rents for J.C. Penny and Red Robin. |
The following table presents certain information relating to operating history and underwritten cash flows at the Shadow Lake Towne Center Property:
| Underwritten Net Cash Flow | ||||||||
| 2020 | 2021 | 2022 | TTM | Underwritten | Per Square Foot | %(1) | ||
| Rents in Place | $6,345,035 | $6,340,182 | $6,400,302 | $6,478,365 | $6,837,543 | $12.86 | 51.7 | % |
| Vacancy Gross Up | 0 | 0 | 0 | 0 | 2,319,845 | 4.36 | 17.5 | |
| Percentage Rent | 1,290 | 4,736 | 37,787 | 38,128 | 39,237 | 0.07 | 0.3 | |
| Rent Steps | 0 | 0 | 0 | 0 | 33,233 | 0.06 | 0.3 | |
| Gross Potential Rent | $6,346,325 | $6,344,918 | $6,438,089 | $6,516,493 | $9,229,858 | $17.36 | 69.8 | % |
| Total Reimbursements | 2,855,330 | 2,800,954 | 3,008,282 | 3,255,571 | 3,997,592 | 7.52 | 30.2 | |
| Net Rental Income | $9,201,654 | $9,145,872 | $9,446,370 | $9,772,064 | $13,227,450 | $24.88 | 100.0 | % |
| (Vacancy / Credit Loss) | (218,229) | 6,336 | 49,532 | 0 | (3,040,601) | (5.72) | (23.0 | ) |
| Other Income(2) | 174,885 | 168,627 | 192,508 | 209,654 | 183,770 | 0.35 | 1.4 | |
| Effective Gross Income | $9,158,310 | $9,320,835 | $9,688,410 | $9,981,718 | $10,370,619 | $19.51 | 78.4 | % |
| Total Expenses | 4,061,845 | 4,241,598 | 4,357,442 | 4,440,651 | 4,289,944 | 8.07 | 41.4 | |
| Net Operating Income(3) | $5,096,465 | $5,079,237 | $5,330,968 | $5,541,067 | $6,080,674 | $11.44 | 58.6 | % |
| Capital Expenditures | 0 | 0 | 0 | 0 | 63,787 | 0.12 | 0.6 | |
| TI / LC | 0 | 0 | 0 | 0 | 0 | 0.00 | 0.0 | |
| Net Cash Flow | $5,096,465 | $5,079,237 | $5,330,968 | $5,541,067 | $6,016,888 | $11.32 | 58.0 | % |
| (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) | Other income includes metered water, temporary rent, late charges and miscellaneous income. |
| (3) | Increase in Underwritten Net Operating Income is primarily attributed to the inclusion of Vacancy Gross Up totaling $2,319,845 and Rent Steps totaling $33,233. |
| 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 2023-5C2 | |
| No. 3 – Shadow Lake Towne Center | ||
The Market. The Shadow Lake Towne Center Property is in Papillion, Nebraska approximately 15 miles southwest of Omaha, Nebraska. Primary regional access to the area is provided via State Route 370, 84th Street and 72nd Street. State Route 370 is a four-lane highway in Sarpy County and is the primary east-west thoroughfare in the area extending from Gretna, Nebraska to the West and Bellevue, Nebraska to the East. 84th Street and 72nd Street are the major north-south thoroughfares in the immediate area. The immediate area surrounding the Shadow Lake Towne Center Property is considered suburban. The Shadow Lake Towne Center Property is in Sarpy County, Nebraska, which is part of the Omaha, Nebraska metropolitan area and home to the cities of Bellevue, Papillion, La Vista and Springfield. Sarpy County has benefited from significant economic investment from Google, which broke ground on a $600-million data center located in Papillion, Nebraska in 2019 and during 2022 announced a second data center would be constructed in Papillion, Nebraska. The second data center facility will cost around $750 million and contain more than 1.4 million square feet. According to the appraisal, the 2022 population within a one-, three- and five-mile radius of the Shadow Lake Towne Center Property was 8,891, 44,919 and 125,963, respectively. The 2022 average household income within the same radii was $117,788, $130,950 and $109,677, respectively.
According to the appraisal, the Shadow Lake Towne Center Property is in the Omaha/Council Bluffs retail market. As of the fourth quarter of 2022, the Omaha/Council Bluffs market reported retail inventory of approximately 64.5 million square feet with an overall vacancy rate of 4.6% and an average annual asking rent of $13.90 per square foot. As of the fourth quarter of 2022, the Omaha/Council Bluffs retail market reported positive absorption of 985,105 square feet and 378,861 square feet of new construction.
According to the appraisal, the Shadow Lake Towne Center Property is in the Sarpy East retail submarket. As of the fourth quarter of 2022, the Sarpy East submarket reported retail inventory of approximately 7.1 million square feet with an overall vacancy rate of 5.1% and an average annual asking rent of $12.80 per square foot. As of the fourth quarter of 2022, the Sarpy East retail submarket reported positive absorption of 73,365 square feet and 56,070 square feet of new construction.
| 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 2023-5C2 | |
| No. 3 – Shadow Lake Towne Center | ||
The following table presents certain information relating to the comparable retail leases for the Shadow Lake Towne Center Property:
| Comparable Retail Rental Summary(1) | |||||||
| Property Name/Location | Year Built / Renovated | Size (SF) | Tenant | Suite Size (SF) | Rent PSF | Commencement | Lease Term (Months) |
Shadow Lake Towne Center 7775 Olson Drive Papillion, NE | 2007 / NAP | 10,340(2) | Skechers(2) | 10,340(2) | $12.00(2) | Jun-23(2) | 120(2) |
Coventry Strip Center 5405-5501 South 204th Street Omaha, NE | 2022 / NAP | 10,000 | Rusty Taco | 3,000 | $27.79 | Jan-23 | 60 |
Dodge Street and Capitol Avenue Retail 1000 Dodge Street and 1009 Capitol Avenue Omaha, NE | 1919 / 2006 | 28,713 | Nosh Wine LLC | 3,554 | $23.67 | Jan-21 | 60 |
Spring Ridge 17810 Pierce Plaza Omaha, NE | 2017 / NAP | 4,684 | Smoothie King | 1,484 | $24.00 | Nov-19 | 84 |
Dodge Condominiums 902 Dodge Street Omaha, NE | NAV / NAV | 35,220 | Lula B’s | 5,870 | $25.00 | Jun-21 | 60 |
Wolf Creek Plaza 10511-10525 South 15th Street Bellevue, NE | 2005 / NAP | 93,849 | Omaha Bakery Supply | 4,800 | $18.00 | Nov-21 | 84 |
800 Q Street 800 Q Street Lincoln, NE | 1900 / 2014 | 17,742 | Napoli’s Italian Restaurant | 4,670 | $15.00 | Dec-20 | 36 |
Applewood Centre 9765 Q Street Omaha, NE | 1989 / 2014 | 112,005 | Ecothrift | 12,505 | $12.00 | Jun-22 | 120 |
Pavilions at Hartman Heritage 19850 East Jackson Drive Independence, MO | 2003 / NAP | 223,477 | Party City Corporation | 20,000 | $8.00 | Oct-21 | 54 |
Hillcrest Plaza 603 North Belt Highway Saint Joseph, MO | 1975 / NAP | 93,888 | Dollar Tree | 11,750 | $11.00 | Aug-20 | 120 |
Best Buy Eagan 1235 Town Center Drive Eagan, MN | 2006 / NAP | 45,386 | Best Buy | 45,386 | $12.50 | Nov-22 | 60 |
Pinnacle Village 12040 Blue Valley Parkway Overland Park, KS | 1995 / NAP | 108,729 | DSW | 26,444 | $13.50 | Nov-21 | 132 |
Hi-Lake Shopping Center 2100-2218 East Lake Street Minneapolis, MN | 1973 / 2007 | 137,983 | Burlington | 32,400 | $10.50 | Apr-21 | 120 |
Maplewood Town Center – Best Buy 1795 County Road D Maplewood, MN | 2007 / NAP | 44,983 | Best Buy | 44,983 | $15.50 | Jan-22 | 60 |
| (1) | Source: Appraisal |
| (2) | Based on the underwritten rent roll dated May 9, 2023. |
| 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 2023-5C2 | |
| No. 3 – Shadow Lake Towne Center | ||
The following table presents certain information relating to the comparable retail sales for the Shadow Lake Towne Center Property:
| Comparable Retail Sales(1) | ||||||
| Property / Location |
Net Rentable Area (SF) |
Year Built / Renovated |
Occupancy |
Sale Date |
Sale Price |
Price PSF |
Shadow Lake Towne Center 7775 Olson Drive Papillion, NE | 531,557(2) | 2007 / NAP | 79.3%(2) | NAP | NAP | NAP |
Lakeport Commons Center 5500 Antioch Road, 8915 Johnson Drive, 5925 Ikea Way and 5930 Ikea Way Merriam, KS | 363,026 | 1999 / NAP | 97.0% | Dec-2022 | $53,200,000 | $146.55 |
The Orchard Town Center 14425-14647 Delaware Street Westminster, CO | 685,852 | 2006 / NAP | 84.0% | Dec-2021 | $103,000,000 | $150.18 |
Belmar 355 South Teller Street Lakewood, CO | 768,190 | 2004 / NAP | 78.0% | Jun-2021 | $113,000,000 | $147.10 |
The Shoppes at Cross Keys 13901-13995 New Halls Ferry Road Florissant, MO | 339,464 | 2003 / NAP | 93.0% | Apr-2021 | $38,000,000 | $111.94 |
Evanston Plaza 1926-1968 Dempster Street Evanston, IL | 212,759 | 1987 / 2015 | 97.0% | Apr-2021 | $36,180,000 | $170.05 |
| (1) | Source: Appraisal |
| (2) | Based on the underwritten rent roll dated May 9, 2023. |
The Borrower. The borrower for the Shadow Lake Towne Center Mortgage Loan is PPG Shadow Real Estate LLC, a special purpose, Delaware limited liability company with two independent directors. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Shadow Lake Towne Center Mortgage Loan.
The Borrower Sponsor. The borrower sponsor is PREP Property Group LLC (“PREP”), a vertically integrated real estate company. Founded in Park City, Utah by Michael C. Phillips in 2015, PREP specializes in retail real estate management and acquisitions, net lease income fund acquisitions, strategic investment fund acquisitions and development services. Michael C. Phillips currently serves as the Partner and CEO of PREP and has served as a principal of Phillip Edison & Company since 1991.
Property Management. The Shadow Lake Towne Center Property is managed by PREP Co., LLC, an affiliate of the borrower.
Escrows and Reserves. At origination, the borrower deposited into escrow approximately $443,871 for real estate taxes, $146,948 for insurance premiums, $3,500,000 for rollover reserves, $5,000,000 for the Holdback Reserve (as detailed below), $116,093 for free rent reserves ($54,155 for Dogtopia, $49,068 for Sketchers and $12,870 for Skin Experts) and $1,232,779 for unfunded obligations.
Tax Escrows – On each monthly payment date, the borrower is required to escrow 1/12th of the annual estimated tax payments, which currently equates to approximately $140,912.
Insurance Escrows – On each monthly payment date, the borrower is required to escrow 1/12th of the annual estimated insurance payments, which currently equates to approximately $12,723.
Replacement Reserve – On each monthly payment date, the borrower is required to escrow an amount totaling $5,316 for replacement reserves.
Rollover Escrows – On each monthly payment date, the borrower is required to deposit $44,296; provided, however, so long as the sum of (i) the balance in the rollover account plus (ii) the sum of the undrawn amount of any Rollover Letter of Credit (as defined below) exceeds $1,500,000, no monthly deposit will be required. The Shadow Lake Towne Center Mortgage Loan documents provide that the borrower may deliver to the lender a letter of credit in an amount equal to the then-remaining balance in the rollover account (the “Rollover Account Balance Amount”) (any such letter of credit and any substitute letter of credit delivered to the lender in accordance with the terms of the Shadow Lake Towne Center Mortgage Loan documents referred to as the “Rollover Letter of Credit”). Upon receipt of the Rollover Letter of Credit, the lender will disburse the rollover funds remaining in the rollover account to the borrower; provided, that the borrower may, from time to time, in lieu of a cash disbursement from the rollover account, reduce the Rollover Letter of Credit then being held by the lender by the amount of the rollover disbursement requested amount so long as the borrower (1) can demonstrate to the lender that the borrower expended such rollover disbursement requested amount on approved leasing expenses from such cash flow generated by the Shadow Lake Towne Center Property that is not in violation of the Shadow Lake Towne Center Mortgage Loan documents and/or equity contributions made to the borrower and (2) has otherwise satisfied the requirements for disbursement of rollover funds (the “Rollover Letter of Credit Reduction Amount”), and in such event, the borrower will deliver to the lender a substitute letter of credit in an amount equal to (x) the amount of the Rollover Letter of Credit then being held by the lender less (y) the Rollover Letter of Credit Reduction Amount.
| 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 2023-5C2 | |
| No. 3 – Shadow Lake Towne Center | ||
Holdback Reserve – The Shadow Lake Towne Center Mortgage Loan documents required an upfront holdback reserve of $5,000,000 (the “Holdback Reserve”). Amounts in the Holdback Reserve will be disbursed to the borrower following lender’s determination that the Holdback Reserve Funds Release Conditions (as defined below) have been satisfied and subject to the satisfaction of certain conditions including but not limited to: (i) no event of default has occurred or is continuing following the borrower’s written request (such request will be made no more than once per quarter) and (ii) such request is for an amount of no less than $1,000,000 (or, if the total amount of the Holdback Reserve funds remaining on deposit is less than $1,000,000, then the lesser amount) and accompanied by supporting financial statements.
“Holdback Reserve Funds Release Conditions” means, as of any date (i) the lender determines no event of default has occurred and is continuing and (ii) the lender has received evidence in form and substance reasonably satisfactory to the lender that the holdback debt yield pursuant to the Shadow Lake Towne Center Mortgage Loan documents equals or exceeds 9.5%.
Following the lender’s determination that the Holdback Reserve Funds Release Conditions have been satisfied in connection with the related disbursement request, the lender will disburse the available Holdback Reserve funds to the borrower (or, during the continuance of a Cash Management Trigger Event (as defined below), to the cash management account to be applied in accordance with the terms of the Shadow Lake Towne Center Mortgage Loan documents) in an amount equal to the amount of the Holdback Reserve funds that have been requested by the borrower; provided, however, if the borrower is unable to satisfy the Holdback Reserve Funds Release Conditions solely due to the holdback debt yield being less than 9.5%, the lender will disburse to the borrower the portion of the Holdback Reserve funds which have been requested by the borrower that would result in the holdback debt yield being equal to or greater than 9.5%, provided such amount equals or exceeds $1,000,000 (or, if the total amount of the Holdback Reserve funds remaining on deposit is less than $1,000,000, then the lesser amount).
Notwithstanding the above, if the borrower fails to obtain the release of the Holdback Reserve funds prior to September 15, 2025 (the “Holdback Disbursement Deadline”) (such Holdback Reserve funds remaining on deposit, the “Undisbursed Holdback Funds”), then the borrower may elect to either (x) prepay the Shadow Lake Towne Center Mortgage Loan on or prior to the date occurring 30 days after the Holdback Disbursement Deadline, in the principal amount equal to the Undisbursed Holdback Funds and together with such prepayment (i) the yield maintenance premium, (ii) all interest on the Shadow Lake Towne Center Mortgage Loan to be prepaid through and including the last day of the interest period related to the monthly payment date following the date of prepayment and (iii) all other sums then due and payable under the Shadow Lake Towne Center Mortgage Loan documents (the sum of clauses (i), (ii) and (iii), the “Additional Holdback Prepayment Amount”) or (y) have the Undisbursed Holdback Funds retained in the Holdback Reserve account for the balance of the term of the Shadow Lake Towne Center Mortgage Loan, in which case, the borrower will no longer have any right to disbursement of all or any portion of the Undisbursed Holdback Funds (including, without limitation, any right to cause a prepayment of the Shadow Lake Towne Center Mortgage Loan in accordance with clause (x) above). If the borrower fails to elect either of the foregoing options on or prior to the Holdback Disbursement Deadline, the borrower will be deemed to have elected to have the Undisbursed Holdback Funds retained in the Holdback Reserve account in accordance with clause (y) above. If the borrower elects to partially prepay the Shadow Lake Towne Center Mortgage Loan in accordance with clause (x) above, the Undisbursed Holdback Funds available in the Holdback Reserve account will be applied by the lender towards the principal sum required to be prepaid by the borrower, provided the borrower has timely paid to the lender the entire Additional Holdback Prepayment Amount.
Lockbox / Cash Management. The Shadow Lake Towne Center Mortgage Loan documents require a hard lockbox and springing cash management. The Shadow Lake Towne Center Mortgage Loan documents require the borrower or the property manager to deliver to each tenant at the Shadow Lake Towne Center Property a tenant direction letter instructing each tenant to deposit rents directly into the lender-controlled lockbox account. All rents or other amounts received by the borrower or the property manager are required to be deposited into the lender-controlled lockbox within two business day of receipt. During the continuance of a Cash Management Trigger Event, all funds in the lockbox account will be swept on each business day to a lender-controlled cash management account and disbursed in accordance with the Shadow Lake Towne Center Mortgage Loan documents. During the continuance of a Cash Sweep Event (as defined below), all excess cash flow funds will be held by the lender in an excess cash flow reserve account as additional collateral for the Shadow Lake Towne Center Mortgage Loan.
A “Cash Management Trigger Event” will commence upon any of (i) an event of default, (ii) a bankruptcy action of the borrower, guarantor, or property manager, to the extent that any management agreement is in place, (iii) a Cash Management DSCR Trigger Event (as defined below) at any time during the Reduced Holdback Reserve Period (as defined below), (iv) the occurrence of a Critical Tenant Trigger Event (as defined below), or (v) the borrower has obtained a subordinate mezzanine loan. A Cash Management Trigger Event will end (a) with respect to clause (i) above, if the event of default has been cured and no other event of default has occurred and is continuing, (b) with respect to 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 borrower or guarantor, or within 120 days with respect to the property manager or in the case of the property manager, the borrower has replaced the property manager with a qualified manager acceptable to the lender, (c) with respect to clause (iii) above, the debt service coverage ratio is greater than 1.20x for two consecutive calendar quarters and (d) with respect to clause (iv) above, the date on which the Critical Tenant Trigger Event Cure (as defined below) has occurred.
| 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 2023-5C2 | |
| No. 3 – Shadow Lake Towne Center | ||
A “Cash Management DSCR Trigger Event” will occur on any date during the Reduced Holdback Reserve Period (as defined below), if 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” will commence upon any of (i) an event of default, (ii) a bankruptcy action of the borrower, guarantor, or property manager, to the extent that any management agreement is in place, (iii) a Cash Sweep DSCR Trigger Event (as defined below) at any time during the Reduced Holdback Reserve Period or (iv) the occurrence of a Critical Tenant Trigger Event. A Cash Management Trigger Event will end (a) with respect to clause (i) above, if the event of default has been cured and no other event of default has occurred and is continuing, (b) with respect to 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 borrower or guarantor, or within 120 days with respect to the property manager or in the case of the property manager, the borrower has replaced the property manager with a qualified manager acceptable to the lender, (c) with respect to clause (iii) above, the debt service coverage ratio is greater than 1.15x for two consecutive calendar quarters, and (d) with respect to clause (iv) above, the date on which the Critical Tenant Trigger Event Cure (as defined below) has occurred.
A “Cash Sweep DSCR Trigger Event” will occur on any date during the Reduced Holdback Reserve Period, if the debt service coverage ratio, based on the trailing 12-month period immediately preceding the date of determination, is less than 1.15x.
A “Reduced Holdback Reserve Period” means any time when the balance in the Holdback Reserve Account is less than $5,000,000.
A “Critical Tenant Trigger Event” will occur upon (i) the date that JC Penny, Dick’s, Burlington, T.J. Maxx or any other tenant occupying 50% or more of the respective spaces occupied by such tenants (each such tenant, a “Critical Tenant” and each related lease, a “Critical Tenant Lease”) gives notice of its intention to terminate its Critical Tenant Lease or the applicable Critical Tenant Lease is otherwise terminated, (ii) (a) on or prior to the date that is twelve months prior to the related Critical Tenant Lease expiration date if the related Critical Tenant (other than Burlington) has failed to give notice of its election to renew its lease and (b) with respect to Burlington, on or prior to the date that is six months prior to the related lease expiration date if Burlington has failed to give notice of its election to renew its lease, (iii) on or prior to the date by which the related Critical Tenant is required under its lease to notify the landlord of its election to renew its lease, such Critical Tenant fails to give such notice, (iv) (A) a monetary default occurs and is continuing under a Critical Tenant Lease for more than 45 days after the applicable notice and cure periods under such Critical Tenant Lease, subject to any ongoing reconciliation process, or (B) a material non-monetary default occurs and is continuing under such Critical Tenant Lease for more than 60 days beyond the applicable notice and cure periods under a Critical Tenant Lease, (v) a bankruptcy action of the related Critical Tenant or any guarantor of such Critical Tenant Lease occurs, (vi) the related 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) the related Critical Tenant discontinues its normal business operations at its leased premises (other than a temporary cessation of business operations due to force majeure or for permitted renovations or necessary repairs).
A “Critical Tenant Trigger Event Cure” will occur (a) with respect to clause (i), (ii) or (iii) above, on 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, a cure of the applicable event of default, (c) with respect to clause (v) above, after an affirmation in the applicable bankruptcy proceeding, provided that the Critical Tenant is paying all rents and other amounts due under the lease, (d) with respect to clause (vi) above, the Critical Tenant re-commences the payment of full unabated rent, (e) with respect to clause (vii) above, the Critical Tenant re-commences its normal business operations at its leased premises or a Critical Tenant Space Re-tenanting Event (as defined below) has occurred and no tenant has a right to cease operations, reduce any portion of its rent, terminate its lease or exercise any other rights or remedies based on co-tenancy or similar provision of its lease as a result of such Critical Tenant Space Re-tenanting Event.
A “Critical Tenant Space Re-tenanting Event” will occur on the date each of the following conditions have been satisfied: (i) no less than 60% of the related Critical Tenant space has been leased to one or more replacement tenants for a term of at least five years and the aggregate annual rent payable under such replacement lease(s) is at least equal to 100% of the aggregate annual rent payable during the last year of the term of the Critical Tenant Lease being replaced with respect to the entire Critical Tenant space with similar contractual reimbursements, (ii) all tenant improvement costs, leasing commissions and other material costs and expenses relating to the re-letting of the related Critical Tenant space shall have been paid in full or an amount sufficient to cover any such costs and expenses as reasonably determined by the lender will have been deposited into the critical tenant TI/LC account and (iii) the replacement tenant(s) are conducting normal business operations at the related Critical Tenant 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. | ||
| 62 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 3 – Shadow Lake Towne Center | ||
Subordinate and Mezzanine Debt. Provided no event of default has occurred or is continuing, the Shadow Lake Towne Center Mortgage Loan documents permit an affiliate of the borrower to incur a future mezzanine loan subject to certain conditions, including but not limited to: (i) the combined loan-to-value ratio based on the Shadow Lake Towne Center Mortgage Loan and the future mezzanine loan is not greater than 57.9%, (ii) the combined debt service coverage ratio based on the Shadow Lake Towne Center Mortgage Loan and the future mezzanine loan is equal to or greater than 1.27x, (iii) the execution of an intercreditor agreement acceptable to the lender and (iv) receipt of a rating agency confirmation that the mezzanine financing will not result in a downgrade, withdrawal or qualification of the respective ratings assigned to the BMO 2023-5C2 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. | ||
| 63 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 4 – Arcola Corporate Campus | ||
| 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 2023-5C2 | |
| No. 4 – Arcola Corporate Campus | ||
| 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 2023-5C2 | |
| No. 4 – Arcola Corporate Campus | ||
| Mortgage Loan Information | Property Information | |||
| Mortgage Loan Seller: | BMO, SMC | Single Asset / Portfolio: | Single Asset | |
| Original Principal Balance(1): | $62,500,000 | Title: | Fee | |
| Cut-off Date Principal Balance(1): | $62,500,000 | Property Type – Subtype: | Mixed Use – Office/Lab | |
| % of IPB: | 8.0% | Net Rentable Area (SF): | 1,853,053 | |
| Loan Purpose: | Acquisition | Location: | Collegeville, PA | |
| Borrower: | Collegeville Holdings LLC | Year Built / Renovated: | 1900,1992, 2003, 2007 / NAP | |
| Borrower Sponsor: | David Werner | Occupancy: | 86.6% | |
| Interest Rate: | 7.29000% | Occupancy Date: | 8/1/2023 | |
| Note Date: | 8/15/2023 | 4th Most Recent NOI (As of)(4): | NAV | |
| Maturity Date: | 9/6/2028 | 3rd Most Recent NOI (As of)(4): | NAV | |
| Interest-only Period: | 60 months | 2nd Most Recent NOI (As of)(4): | NAV | |
| Original Term: | 60 months | Most Recent NOI (As of)(4): | NAV | |
| Original Amortization Term: | None | UW Economic Occupancy: | 92.6% | |
| Amortization Type: | Interest Only | UW Revenues: | $37,055,156 | |
| Call Protection(2): | L(26),D(29),O(5) | UW Expenses: | $21,577,456 | |
| Lockbox / Cash Management: | Hard / Springing | UW NOI: | $15,477,699 | |
| Additional Debt(1): | Yes | UW NCF: | $14,124,970 | |
| Additional Debt Balance(1): | $32,500,000 | Appraised Value / Per SF: | $195,000,000 / $105 | |
| Additional Debt Type(1): | Pari Passu | Appraisal Date: | 3/14/2023 | |
| Escrows and Reserves(3) | Financial Information(1) | |||||||
| Initial | Monthly | Initial Cap | Cut-off Date Loan / SF: | $51 | ||||
| Taxes: | $454,721 | $606,182 | N/A | Maturity Date Loan / SF: | $51 | |||
| Insurance: | $103,636 | $51,818 | N/A | Cut-off Date LTV: | 48.7% | |||
| Replacement Reserves: | $0 | $35,517 | N/A | Maturity Date LTV: | 48.7% | |||
| Deferred Maintenance: | $22,550 | $0 | N/A | UW NCF DSCR: | 2.01x | |||
| Major Tenant Reserve: | $0 | Springing | N/A | UW NOI Debt Yield: | 16.3% | |||
| Sources and Uses | |||||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | ||||
| Whole Loan(1) | $95,000,000 | 51.4 | % | Purchase Price | $171,299,601 | 92.6 | % | ||
| Borrower Sponsor Equity | 90,000,000 | 48.6 | Closing Costs(5) | 13,119,492 | 7.1 | ||||
| Reserves | 580,907 | 0.3 | |||||||
| Total Sources | $185,000,000 | 100.0 | % | Total Uses | $185,000,000 | 100.0 | % | ||
| (1) | The Arcola Corporate Campus Mortgage Loan (as defined below) is part of the Arcola Corporate Campus Whole Loan (as defined below) which is comprised of 12 pari passu promissory notes with an aggregate original principal balance of $95,000,000. The Arcola Corporate Campus Whole Loan was co-originated by Bank of Montreal (“BMO”) and Starwood Mortgage Capital LLC (“SMC”). The Financial Information in the chart above reflects the Arcola Corporate Campus Whole Loan. |
| (2) | Defeasance of the Arcola Corporate Campus 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 Arcola Corporate Campus Whole Loan to be securitized and (b) August 15, 2026. The assumed defeasance lockout period of 26 payments is based on the anticipated closing date of the BMO 2023-5C2 securitization trust in November 2023. The actual lockout period may be longer. |
| (3) | For a full description of Escrows and Reserves, please refer to “Escrows and Reserves” below. |
| (4) | Historical financial information is not available because the Arcola Corporate Campus Property (as defined below) was acquired by the borrower in August 2023. |
| (5) | Closing costs includes a rate buy-down credit of $1,425,000. |
The Loan. The fourth largest mortgage loan (the “Arcola Corporate Campus Mortgage Loan”) is part of a whole loan (the “Arcola Corporate Campus Whole Loan”) that is evidenced by 12 pari passu promissory notes in the aggregate original principal amount of $95,000,000 and secured by a first priority mortgage on the borrower’s fee interests (including condominium interests) in a 1,853,053 SF mixed-use, laboratory and office property comprised of 12 buildings located in Collegeville, Pennsylvania (the “Arcola Corporate Campus Property”). The Arcola Corporate Campus Property was acquired by the borrower from Wyeth Pharmaceuticals and a portion of the Arcola Corporate Campus Property was leased back to Wyeth Pharmaceuticals in August 2023. The Arcola Corporate Campus Whole Loan was co-originated by BMO and SMC. The Arcola Corporate Campus Mortgage Loan, with an aggregate original principal amount of $62,500,000, is evidenced by the controlling Note A-1 and the non-controlling Notes A-2, A-4, A-6, A-8, and A-12. The Arcola Corporate Campus Whole Loan will be serviced pursuant to the pooling and servicing agreement for the BMO 2023-5C2. The relationship
| 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 2023-5C2 | |
| No. 4 – Arcola Corporate Campus | ||
between the holders of the Arcola Corporate Campus 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 Prospectus.
The Arcola Corporate Campus Whole Loan has a five-year interest-only term with a maturity date of September 6, 2028, is interest-only for the full term of the loan and accrues interest at a rate of 7.29000% per annum on an actual/360 basis. The Arcola Corporate Campus Whole Loan will be serviced under the BMO 2023-5C2 pooling and servicing agreement. See “Description of the Mortgage Pool—The Whole Loans—The Serviced Pari Passu Whole Loans” in the Preliminary Prospectus.
The table below summarizes the promissory notes that comprise the Arcola Corporate Campus Whole Loan.
| Whole Loan Summary | ||||
| Note | Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece |
| A-1 | $20,000,000 | $20,000,000 | BMO 2023-5C2 | Yes |
| A-2 | $20,000,000 | $20,000,000 | BMO 2023-5C2 | No |
| A-3(1) | $10,000,000 | $10,000,000 | Starwood Mortgage Funding VII, LLC | No |
| A-4 | $10,000,000 | $10,000,000 | BMO 2023-5C2 | No |
| A-5(1) | $5,000,000 | $5,000,000 | Starwood Mortgage Funding VII, LLC | No |
| A-6 | $5,000,000 | $5,000,000 | BMO 2023-5C2 | No |
| A-7(1) | $5,000,000 | $5,000,000 | Starwood Mortgage Funding VII, LLC | No |
| A-8 | $5,000,000 | $5,000,000 | BMO 2023-5C2 | No |
| A-9(1) | $5,000,000 | $5,000,000 | Starwood Mortgage Funding VII, LLC | No |
| A-10(1) | $5,000,000 | $5,000,000 | BMO | No |
| A-11(1) | $2,500,000 | $2,500,000 | Starwood Mortgage Funding VII, LLC | No |
| A-12 | $2,500,000 | $2,500,000 | BMO 2023-5C2 | No |
| Whole Loan | $95,000,000 | $95,000,000 | ||
| (1) | Expected to be contributed to one or more securitization trust(s). |
The Property. The Arcola Corporate Campus Property consists of a 12-building, Class A, mixed-use, life science, research and development campus located in Collegeville, Pennsylvania on a 333.14-acre site. The Arcola Corporate Campus Property includes on-site amenities such as two full-service cafeterias, a company store, fitness center, conference centers, tennis courts, softball fields, a heliport, and on-site walking trails. The Arcola Corporate Campus Property is currently occupied by two tenants, Dow Chemical and Wyeth Pharmaceuticals. The Arcola Corporate Campus Property has 4,145 parking spots resulting in a ratio of approximately 2.24 parking spaces per 1,000 square feet of net rentable area.
Major Tenants.
Dow Chemical (927,828 square feet, 50.1% of NRA, 68.1% of underwritten base rent): Dow Chemical is a leading producer of plastics, chemicals, and hydrocarbons and is one of the largest material and chemical companies in the US and the world. Dow Chemical uses hydrocarbon-based raw materials to make some 6,100 finished chemical products at nearly 110 sites in more than 30 countries. Dow Chemical’s products are used in industries such as automotive, transportation, consumer goods, industrial equipment, building and construction, and energy. Dow Chemical’s lease (the “Dow Chemical Lease”) commenced on July 1, 2012 and expires on December 31, 2028. The Dow Chemical Lease has six, six-year renewal options and no early termination options. The leased space consists of approximately 796,633 square feet of chemistry lab space (approximately 43.0% of the total net rentable area at the Arcola Corporate Campus Property). On June 30, 2020, Dow Chemical subleased 20,642 square feet to Keller Williams for $17.00 per square foot. The Keller Williams sublease terminates on June 30, 2028. Dow Chemical is currently marketing for sublease an additional 110,553 square feet of office space on its lease.
Wyeth Pharmaceuticals (677,311 square feet, 36.6% of NRA, 31.9% of underwritten base rent): Wyeth Pharmaceuticals is a wholly owned subsidiary of Pfizer Inc. (“Pfizer”). Pfizer is one of the world’s largest research-based pharmaceutical companies, producing medicines for cardiovascular health, metabolism, oncology, inflammation and immunology, and other areas. Pfizer works across developed and emerging markets to advance wellness, prevention, treatments and cures that challenge diseases. Pfizer collaborates with healthcare providers, governments and local communities to support and expand access to reliable, affordable healthcare around the world. Pfizer’s lease (the “Wyeth Pharmaceutical Lease”) commenced on August 15, 2023 as part of the sale-leaseback, and is set to expire on August 15, 2028 with three, one-year renewal options and no early termination options.
| 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 2023-5C2 | |
| No. 4 – Arcola Corporate Campus | ||
The following table presents certain information relating to the historical and current occupancy of the Arcola Corporate Campus Property:
| Historical and Current Occupancy(1) | ||||
| 2019 | 2020 | 2021 | 2022 | Current(2) |
| NAV | NAV | NAV | NAV | 86.6% |
| (1) | Historical occupancies are not applicable because the Arcola Corporate Campus Property was acquired by the borrower in August 2023. |
| (2) | Current Occupancy is based on the underwritten rent roll dated as of August 1, 2023. |
The following table presents certain information relating to the two tenants at the Arcola Corporate Campus Property:
| Tenant Summary(1) | ||||||||||
| Tenant | Ratings Moody’s/S&P/Fitch(2) | Net Rentable Area (SF) | % of Total NRA | UW Base Rent PSF | UW Base Rent | % of Total UW Base Rent | Lease Expiration Date | |||
| Dow Chemical(3) | NR/NR/BBB+ | 927,828 | 50.1 | % | $13.72 | $12,733,794 | 68.1 | % | 12/31/2028 | |
| Wyeth Pharmaceuticals | A1/A+/A | 677,311 | 36.6 | $8.81 | 5,968,803 | 31.9 | 8/15/2028 | |||
| Total Occupied | 1,605,139 | 86.6 | % | $11.65 | $18,702,598 | 100.0 | % | |||
| Vacant Space | 247,914 | 13.4 | ||||||||
| Total / Wtd. Avg. | 1,853,053 | 100.0 | % | |||||||
| (1) | Based on the underwritten rent roll dated August 1, 2023. |
| (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) | Dow Chemical subleases 20,642 square feet to Keller Williams for $17.00 per square foot. The Keller Williams sublease will terminate on June 30, 2028. Dow Chemical is currently marketing for sublease an additional 110,553 square feet of office space on 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. | ||
| 68 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 4 – Arcola Corporate Campus | ||
The following table presents certain information relating to tenant lease expirations at the Arcola Corporate Campus 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 | 247,914 | 13.4 | % | NAP | NA | P | 247,914 | 13.4% | NAP | NAP | |||||
| 2023 & MTM | 0 | 0 | 0.0 | $0 | 0.0 | % | 247,914 | 13.4% | $0 | 0.0% | ||||||
| 2024 | 0 | 0 | 0.0 | 0 | 0.0 | 247,914 | 13.4% | $0 | 0.0% | |||||||
| 2025 | 0 | 0 | 0.0 | 0 | 0.0 | 247,914 | 13.4% | $0 | 0.0% | |||||||
| 2026 | 0 | 0 | 0.0 | 0 | 0.0 | 247,914 | 13.4% | $0 | 0.0% | |||||||
| 2027 | 0 | 0 | 0.0 | 0 | 0.0 | 247,914 | 13.4% | $0 | 0.0% | |||||||
| 2028 | 2 | 1,605,139 | 86.6 | 18,702,598 | 100.0 | 1,853,053 | 100.0% | $18,702,598 | 100.0% | |||||||
| 2029 | 0 | 0 | 0.0 | 0 | 0.0 | 1,853,053 | 100.0% | $18,702,598 | 100.0% | |||||||
| 2030 | 0 | 0 | 0.0 | 0 | 0.0 | 1,853,053 | 100.0% | $18,702,598 | 100.0% | |||||||
| 2031 | 0 | 0 | 0.0 | 0 | 0.0 | 1,853,053 | 100.0% | $18,702,598 | 100.0% | |||||||
| 2032 | 0 | 0 | 0.0 | 0 | 0.0 | 1,853,053 | 100.0% | $18,702,598 | 100.0% | |||||||
| 2033 | 0 | 0 | 0.0 | 0 | 0.0 | 1,853,053 | 100.0% | $18,702,598 | 100.0% | |||||||
| 2034 & Beyond | 0 | 0 | 0.0 | 0 | 0.0 | 1,853,053 | 100.0% | $18,702,598 | 100.0% | |||||||
| Total | 2 | 1,853,053 | 100.0 | % | $18,702,598 | 100.0 | % | |||||||||
| (1) | Based on the underwritten rent roll dated August 1, 2023. |
The following table presents certain information relating to operating history and underwritten cash flows at the Arcola Corporate Campus Property:
| Operating History and Underwritten Net Cash Flow(1) | ||||
| Underwritten | Per Square Foot | %(2) | ||
| Gross Potential Rent(3) | $21,677,566 | $11.70 | 54.2 | % |
| Expense Recoveries | 18,352,558 | 9.90 | 45.8 | |
| Net Rental Income | $40,030,124 | $21.60 | 100.0 | % |
| (Vacancy/Credit Loss) | (2,974,968) | (1.61) | (7.4 | ) |
| Effective Gross Income | $37,055,156 | $20.00 | 92.6 | % |
| Real Estate Taxes | 6,779,962 | 3.66 | 18.3 | |
| Insurance | 621,816 | 0.34 | 1.7 | |
| Management Fee | 1,111,655 | 0.60 | 3.0 | |
| Other Operating Expenses | 13,064,024 | 7.05 | 35.3 | |
| Total Expenses | $21,577,456 | $11.64 | 58.2 | % |
| Net Operating Income | $15,477,699 | $8.35 | 41.8 | % |
| Replacement Reserves | 426,202 | 0.23 | 1.2 | |
| TI/LC | 926,527 | 0.50 | 2.5 | |
| Net Cash Flow | $14,124,970 | $7.62 | 38.1 | % |
| (1) | Historical financial information is not available because the Arcola Corporate Campus Property was acquired by the borrower in August 2023. |
| (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) | Based on the in-place rent roll dated August 1, 2023 for contractual leases. |
Environmental. According to the Phase I environmental assessment dated March 17, 2023, there was no evidence of any recognized environmental conditions at the Arcola Corporate Campus Property.
The Market. The Arcola Corporate Campus Property is located in Collegeville, PA within the Philadelphia Office market, northwest of Philadelphia. Collegeville was incorporated in 1896 and is home to Ursinus College and several local businesses. Outside the borough, Pfizer's pharmaceutical division and Dow Chemical share a global research and development campus. There is also a GlaxoSmithKline research and development facility. Located right outside of Collegeville is Providence Town Center, an open-air shopping and restaurant mall.
| 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. | ||
| 69 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 4 – Arcola Corporate Campus | ||
The Arcola Corporate Campus Property is located within the Norristown/Valley Forge office submarket. According to the appraisal, as of the fourth quarter of 2022, the Philadelphia Office market had a vacancy rate of 10.34%, an average rental rate of $27.10 per square foot per year and an inventory of approximately 324 million square feet. According to the appraisal, as of the fourth quarter of 2022, the Norristown/Valley Forge office market had a vacancy rate of 12.10%, an average rental rate of $23.78 per square foot per year and an inventory of 7,837,408 square feet.
The following table presents certain information relating to comparable laboratory leases in the Greater Philadelphia area:
| Comparable Laboratory Leases(1) | ||||||||
| Property | Year Built |
Tenant Name | Lease Start Date | Term (yrs.) | Lease Type | Tenant Size (SF) | Occupancy | Base Rent PSF |
Arcola Corporate Campus Collegeville, PA | 1900, 1992, 2003, 2007 | Dow Chemical | Jun-12(2) | 16.5(2) | NNN | 796,633(2)(3) | 86.6%(2) | $13.72(2) |
727 Norristown Road Spring House, PA | 1974 | Merck | Jun-22 | 10.1 | NNN | 77,705 | 100.0% | $36.47 |
300 Rouse Boulevard Philadelphia, PA | 2019 | Iovance | Dec-21 | 20.0 | NNN | 135,000 | 100.0% | $31.76 |
411 Swedeland Road King of Prussia, PA | 1986 | Penn Cell & Gene Therapy | Aug-21 | 0.8 | NNN | 153,000 | 100.0% | $45.00 |
466 Devon Park Drive Wayne, PA | 1975 | Charles River Laboratories | Jul-21 | 15.0 | NNN | 155,200 | 100.0% | $18.36 |
225 & 235 Presidential Way Woburn, MA | 2000 | Raytheon | Jul-21 | 10.0 | NNN | 440,130 | 100.0% | $16.60 |
| (1) | Source: Appraisal |
| (2) | Information is based on the underwritten rent roll dated August 1, 2023. |
| (3) | Based only on laboratory space occupied by Dow Chemical. |
| 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. | ||
| 70 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 4 – Arcola Corporate Campus | ||
The following table presents certain information relating to comparable office leases in the Greater Philadelphia area:
| Comparable Office Leases(1) | ||||||||
| Property | Year Built |
Tenant Name | Lease Start Date | Term (yrs.) | Lease Type | Tenant Size (SF) | Occupancy | Base Rent PSF |
Arcola Corporate Campus Collegeville, PA | 1900, 1992, 2003, 2007 | Wyeth Pharmaceuticals | Aug-23(2) | 5.0(2) | NNN | 677,311(2) | 86.6%(2) | $8.81(2) |
1400 Pennbrook Parkway Landsdale, PA | 2001 | Confidential | Oct-22 | 10.0 | NNN | 40,452 | 100.0% | $16.65 |
2200 Renaissance Boulevard King of Prussia, PA | 1985 | IKEA | Aug-22 | 5.0 | Mod. Gross | 39,372 | 81.0% | $27.50 |
300 Welsh Road Ambler, PA | 1985 | Confidential | Jun-22 | 10.0 | NNN | 10,712 | 60.0% | $16.00 |
700 Dresher Road Horsham, PA | 1987 | Cerner Enviza | Feb-22 | 10.0 | NNN | 45,707 | 100.0% | $16.00 |
9450 Seward Road Fairfield, OH | 1992 | Confidential | Feb-23 | 10.0 | NNN | 270,506 | 100.0% | $9.90 |
36455 Corporate Drive Farmington Hills, MI | 2002 | Comerica Bank | Sep-22 | 10.0 | Mod. Gross | 340,000 | 100.0% | $24.95 |
6000 Feldwood Road Atlanta, GA | 1986 | Bank of America | Jun-22 | 5.3 | NNN | 230,241 | 100.0% | $11.25 |
2915 Jorie Boulevard Oak Brook, IL | 1988 | ACE Hardware Corp | May-22 | 20.0 | Mod. Gross | 297,127 | 100.0% | $24.00 |
| (1) | Source: Appraisal |
| (2) | Information is based on the underwritten rent roll dated August 1, 2023. |
The Borrower. The borrowing entity for the Arcola Corporate Campus Whole Loan is Collegeville Holdings LLC, a Delaware limited liability company and single purpose entity with two independent directors. Legal counsel to the borrower delivered a non-consolidation opinion at origination.
The Borrower Sponsor. The borrower sponsor and non-recourse carveout guarantor is David Werner.
Property Management. The Arcola Corporate Campus Property is managed by Cushman & Wakefield U.S., Inc., a third-party property management company.
Asset Management. The borrower entered into an asset management agreement with Greenbarn Management, LLC, a third party asset management company (“Asset Manager”), pursuant to which Asset Manager is required to provide, among other things, certain property maintenance and repair services and leasing and financing services. All fees due to Asset Manager under the Asset Management Agreement are subordinate to debt service payments on the Arcola Corporate Campus Whole Loan, and such fees (other than the leasing services fees) are payable only out of excess cash flow from the Arcola Corporate Campus Property, so long as no event of default is continuing.
Escrows and Reserves. At origination, the borrower was required to deposit into escrow (i) $454,721 for the real estate tax reserve, (ii) $103,636 for the insurance reserve, and (iii) $22,550 for deferred maintenance.
Tax Escrows – The borrower is required to deposit into a real estate tax reserve, on a monthly basis, 1/12th of the estimated annual real estate taxes (currently estimated to be approximately $606,182).
Insurance Escrows – The borrower is required to deposit into an insurance reserve, on a monthly basis, 1/12th of estimated annual insurance premiums (currently estimated to be approximately $51,818).
Replacement Reserve – The borrower is required to deposit $35,517 into a replacement reserve on a monthly basis.
Major Tenant Reserve – During the continuance of a Major Tenant Trigger Period (as defined below), the borrower is required to deposit, on a monthly basis, $703,000 in connection with expenses incurred by a Major Tenant Replacement Lease (as defined below), a Major Tenant New Lease (as defined below) or a Major Tenant Approved Lease Extension (as defined 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. | ||
| 71 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 4 – Arcola Corporate Campus | ||
A “Major Tenant Trigger Period” will occur upon the date that is the earliest of:
| (i) | the earlier to occur of (x) December 6, 2026, or (y) the date required under any Major Lease (as defined below) by which the applicable Major Tenant (as defined below) is required to give notice of its exercise of a renewal, whether such Major Lease is in its initial term or an extension term, unless, in either case, a Major Tenant Approved Lease Extension has occurred with respect to the applicable Major Lease; provided, however, that the foregoing clause (i)(x) will not apply if (a) the lender determines that borrower has previously entered into Replacement Dow Chemical Lease (as defined below) in accordance with the Arcola Corporate Campus Whole Loan documents, (b) the Replacement Dow Chemical Lease is not subject to any other “Major Tenant Trigger Period” as of December 6, 2026, and (c) after giving effect to the Replacement Dow Chemical Lease the debt yield is no less than 11%; |
| (ii) | the earlier to occur of the date on which (x) any Major Lease is surrendered, cancelled or terminated prior to its then-current expiration date, (y) any Major Tenant provides written notice of such Major Tenant’s intention to do any of the acts set forth in the foregoing clause (x); |
| (iii) | the occurrence of any event of default by a Major Tenant under the applicable Major Lease beyond any applicable notice and/or cure thereunder; |
| (iv) | the earlier to occur of the date on which any Major Tenant (x) vacates, surrenders or otherwise ceases to conduct normal business operating in all or substantially all of the premises demised to such Major Tenant or otherwise “goes dark” or (y) provides written notice of such Major Tenant’s intention to do any of the acts set forth in the foregoing clause (x) if and for so long as the senior unsecured credit rating of the applicable Major Tenant is at least “BBB-” by S&P and “Baa3” by Moody’s; |
| (v) | the earlier to occur of the date on which when any Major Tenant (x) sublets all or any material portion of the premises demised under the applicable Major Lease or (y) provides written notice of such Major Tenant’s intention to do any of the acts set forth in the foregoing clause (x) if and for so long as the senior unsecured credit rating of the applicable Major Tenant is at least “BBB-” by S&P and “Baa3” by Moody’s; or |
| (vi) | commencing upon a bankruptcy action by a Major Tenant. |
A Major Tenant Trigger Period will end upon:
| (A) | if triggered in the case of clause (i) above, the date on which (1) either (a) a Major Tenant Approved Lease Extension has occurred with respect to the applicable Major Lease, (b) the applicable Major Tenant signs a new lease (a “Major Tenant New Lease”), or (c) all of the premises demised under the applicable Major Lease is demised pursuant to one or more replacement leases (a “Major Tenant Replacement Lease”), (2) borrower sponsor delivers (a) a copy of the applicable lease documentation per the foregoing clause (1) and (b) an acceptable tenant estoppel certificate from the applicable Major Tenant, (3) the borrower has paid all leasing brokerage commissions in connection with such Major Tenant Approved Extension, Major Tenant New Lease or Major Tenant Replacement Lease and provided a paid invoice reflecting the foregoing to the lender, (4) after giving effect to the Major Tenant Approved Lease Extension, Major Tenant New Lease or the Major Tenant Replacement Leases, the debt yield is no less than 11%; |
| (B) | if triggered in the case of clause (ii), (iii) or (iv) above, the date on (a) either (x) the applicable Major Tenant signs a Major Tenant New Lease or (y) all or substantially all of the premises demised under the applicable Major Lease is demised pursuant to one or more Major Tenant Replacement Leases; (b) the borrower has paid all leasing brokerage commissions in connection with such Major Tenant New Lease or Major Tenant Replacement Lease and provided a paid invoice reflecting the foregoing to the lender; and (c) after giving effect to the Major Tenant New Lease or the Major Tenant Replacement Leases, the debt yield is no less than 11%; |
| (C) | if triggered in the case of clause (ii) above, the date on which (x) the Major Tenant rescinds in writing the exercise of its notice exercising its early termination, cancellation or surrender right or option and (y) borrower delivers to the lender evidence of such recission; |
| (D) | if triggered in the case of clause (iii) above, the date on which (x) the subject default has been cured and no other event of default exists and is continuing thereunder and (y) borrower delivers to the lender evidence of the foregoing; |
| (E) | if triggered in the case of clause (iv) above, the date on which (x) the applicable Major Tenant has (i) resumed operations at the Arcola Corporate Campus Property in all or substantially all of the premises demised under the applicable Major Lease for a period of two consecutive calendar quarters, or (ii) rescinded its intention to vacation, surrender or cease to conduct its normal business, and (y) borrower delivers to the lender evidence of the foregoing; |
| (F) | if triggered in the case of clause (v) above, solely with respect to clause (y) thereunder, the date on which (i) the applicable Major Tenant has rescinded its intention to so sublet all or any material portion of the premises demised under the applicable Major Lease, and (ii) borrower delivers to the lender evidence of the foregoing; or |
| (G) | if triggered in the case of clause (vi) above, the date on which (x) the bankruptcy action by the applicable Major Tenant has been dismissed and the applicable Major Lease is affirmed, and (y) borrower delivers to the lender evidence of the foregoing. |
A “Major Lease” means (a) the Dow Chemical Lease, (b) the Wyeth Pharmaceutical Lease and (c) any other lease which, either individually, or when taken together with any other lease with the same tenant or its affiliates, demises more than 200,000 square feet at the Arcola Corporate Campus Property.
A “Major Tenant” means any tenant under a Major 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. | ||
| 72 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 4 – Arcola Corporate Campus | ||
A “Major Tenant Approved Lease Extension” means (i) a Major Tenant has exercised its extension option for an additional term of no less than five years (or such shorter period as may be approved by lender in writing) following the then-current expiration date of such Major Lease and (ii) borrower has delivered evidence of the foregoing to the lender.
Lockbox / Cash Management. The Arcola Corporate Campus Whole Loan is structured with a hard lockbox and springing cash management. All rents are required to be deposited directly into a lender-controlled lockbox account. During a Sweep Event Period (as defined below), funds on deposit in the lockbox account are required to be swept on a daily basis into a lender-controlled cash management account.
A ”Sweep Event Period” will commence upon the earlier of (i) an event of default, (ii) commencing on the monthly payment date in August, 2024, the debt service coverage ratio on any payment date based on the trailing twelve month period is less than 1.50x, or (iii) the occurrence of a Major Tenant Trigger Period, and such Sweep Event Period will cure upon (a) in connection with clause (i) above, upon the cure of such event of default, (b) in connection with clause (ii) above, the debt service coverage ratio on any payment date based on the trailing twelve month period is equal to or greater than 1.60x for two consecutive calendar quarters, or (c) in connection with clause (iii) above, the termination of the applicable Major Tenant Trigger Period.
A “Replacement Dow Chemical Lease” means a new replacement lease with the Dow Chemical Tenant, which satisfies the following:
| (a) | such replacement lease is on the same form of lease as the Dow Chemical Lease, subject to the following permitted changes: (i) a minimum term of 11 years, and a maximum term of 25 years; (ii) a minimum base rent of $11,500,000 (net) per year, with not less than 1.5% annual increases; (iii) four, six-year options or five, five-year options with continued 1.5% minimum annual rent increases; and (iv) the demised premises remain the same as the original Dow Lease except that the premises currently demised to Dow Chemical Tenant in “Building A” may be excluded from the demised premises. |
| (b) | borrower delivers to the lender a copy of the fully executed Replacement Dow Chemical Lease; |
| (c) | borrower delivers to the lender an acceptable tenant estoppel from Dow Chemical Tenant with respect to the Replacement Dow Chemical Lease; |
| (d) | Dow Chemical executes and delivers the lender’s standard form of subordination, non-disturbance and attornment agreement, with such commercially reasonable changes as may be requested by Dow Chemical Tenant and which are acceptable to the lender, including an absolute subordination of any purchase or acquisition rights afforded to Dow Chemical under the Replacement Dow Chemical Lease, to be coordinated at Borrower’s sole cost and expense; and |
| (e) | if the Replacement Dow Chemical Lease contains any obligation of borrower to (i) complete any work to be performed in connection with the construction of the premises demised under the Replacement Dow Chemical Lease, (ii) pay to Dow Chemical Tenant any tenant improvement allowances, or (iii) pay any broker’s commissions, then all such amounts are deposited with the lender into the Major Tenant Reserve Account. |
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. | ||
| 73 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 5 – 369 Lexington Avenue & 2 West 46th Street | ||
| 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 2023-5C2 | |
| No. 5 – 369 Lexington Avenue & 2 West 46th Street | ||
| 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. | ||
| 75 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 5 – 369 Lexington Avenue & 2 West 46th Street | ||
| Mortgage Loan Information | Property Information | |||
| Mortgage Loan Seller(1): | CREFI, BMO | Single Asset / Portfolio: | Portfolio | |
| Original Principal Balance(1): | $58,000,000 | Title: | Fee | |
| Cut-off Date Principal Balance(1): | $58,000,000 | Property Type – Subtype: | Office – CBD | |
| % of IPB: | 7.5% | Net Rentable Area (SF): | 302,093 | |
| Loan Purpose: | Refinance | Location: | New York, NY | |
| Borrowers: | 369 Lexington Borrower LLC, 369 Lexington Borrower II LLC, 2 West 46 Borrower LLC and 2 West 46 Borrower II LLC | Year Built / Renovated(4): | Various / Various | |
| Borrowers’ Sponsors: | Faraj Srour and Joseph Stavrach | Occupancy: | 93.8% | |
| Interest Rate: | 7.96000% | Occupancy Date: | 9/1/2023 | |
| Note Date: | 9/28/2023 | 4th Most Recent NOI (As of): | $11,376,610 (12/31/2020) | |
| Maturity Date: | 10/1/2028 | 3rd Most Recent NOI (As of): | $10,736,628 (12/31/2021) | |
| Interest-only Period: | 60 months | 2nd Most Recent NOI (As of): | $10,192,060 (12/31/2022) | |
| Original Term: | 60 months | Most Recent NOI (As of): | $10,855,233 (TTM 7/31/2023) | |
| Original Amortization Term: | None | UW Economic Occupancy: | 92.2% | |
| Amortization Type: | Interest Only | UW Revenues: | $18,446,425 | |
| Call Protection(2): | L(25),D(28),O(7) | UW Expenses: | $7,103,097 | |
| Lockbox / Cash Management: | Hard / Springing | UW NOI: | $11,343,328 | |
| Additional Debt(1): | Yes | UW NCF: | $10,642,855 | |
| Additional Debt Balance(1): | $43,450,000 | Appraised Value / Per SF: | $171,000,000 / $566 | |
| Additional Debt Type(1): | Pari Passu | Appraisal Date: | 7/19/2023 | |
| Escrows and Reserves(3) | Financial Information(1) | ||||||
| Initial | Monthly | Initial Cap | Cut-off Date Loan / SF: | $336 | |||
| Taxes: | $1,532,209 | $383,052 | N/A | Maturity Date Loan / SF: | $336 | ||
| Insurance: | $185,941 | $20,549 | N/A | Cut-off Date LTV: | 59.3% | ||
| Replacement Reserves: | $0 | $9,147 | N/A | Maturity Date LTV: | 59.3% | ||
| TI / LC: | $2,500,000 | Springing | $2,500,000 | UW NCF DSCR: | 1.30x | ||
| Deferred Maintenance: | $7,920 | $0 | N/A | UW NOI Debt Yield: | 11.2% | ||
| Sources and Uses | ||||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Tot | al | ||
| Whole Loan(1) | $101,450,000 | 99.9 | % | Loan Payoff(5) | $93,560,335 | 92.1 | % | |
| Borrower Sponsor Equity | 100,000 | 0.1 | Upfront Reserves | 4,226,070 | 4.2 | |||
| Closing Costs | 3,763,595 | 3.7 | ||||||
| Total Sources | $101,550,000 | 100.0 | % | Total Uses | $101,550,000 | 100.0 | % | |
| (1) | The 369 Lexington Avenue & 2 West 46th Street Mortgage Loan (as defined below) is part of the 369 Lexington Avenue & 2 West 46th Street Whole Loan (as defined below) which is comprised of nine pari passu promissory notes with an aggregate original principal balance of $101,450,000. The 369 Lexington Avenue & 2 West 46th Street Whole Loan was co-originated by Citi Real Estate Funding Inc. (“CREFI”) and Bank of Montreal (“BMO”). The Financial Information in the chart above is based on the aggregate outstanding principal balance as of the Cut-off Date of the 369 Lexington Avenue & 2 West 46th Street Whole Loan. |
| (2) | Defeasance of the 369 Lexington Avenue & 2 West 46th Street Whole Loan is permitted at any time after the earlier to occur of (i) 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 369 Lexington Avenue & 2 West 46th Street Whole Loan to be securitized and (ii) September 28, 2027. The assumed defeasance lockout period of 25 payments is based on the anticipated closing date of the BMO 2023-5C2 securitization trust in November 2023. The actual lockout period may be longer. |
| (3) | For a full description of Escrows and Reserves, please refer to “Escrows and Reserves” below. |
| (4) | See the “Portfolio Summary” chart below. |
| (5) | Loan Payoff includes payoff of the previous mortgage loan securitized in JPMBB 2013-C15 of $61,945,003, payoff of subordinate debt of $31,131,921 and payoff of an SBA loan of $483,411. |
| 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. | ||
| 76 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 5 – 369 Lexington Avenue & 2 West 46th Street | ||
The Loan. The fifth largest mortgage loan (the “369 Lexington Avenue & 2 West 46th Street Mortgage Loan”) is part of a whole loan (the “369 Lexington Avenue & 2 West 46th Street Whole Loan”) secured by the borrowers’ fee interest in two office properties totaling 302,093 square feet located in New York, New York (the “369 Lexington Avenue & 2 West 46th Street Properties”). The 369 Lexington Avenue & 2 West 46th Street Whole Loan is comprised of nine pari passu notes, with an aggregate outstanding principal balance as of the Cut-off Date of $101,450,000. The 369 Lexington Avenue & 2 West 46th Street Whole Loan was co-originated on September 28, 2023 by CREFI and BMO and accrues interest at a fixed rate of 7.96000% per annum. The 369 Lexington Avenue & 2 West 46th Street Whole Loan has an initial term of five-years and is interest-only for the full term. The scheduled maturity date of the 369 Lexington Avenue & 2 West 46th Street Whole Loan is the payment date that occurs on October 1, 2028. The 369 Lexington Avenue & 2 West 46th Street Mortgage Loan is evidenced by the controlling Note A-1-1 and the non-controlling Notes A-4 and A-6-1 with an aggregate outstanding principal balance as of the Cut-off Date of $58,000,000. The remaining notes are currently held by CREFI and BMO and are expected to be contributed to one or more future securitization trust(s). The relationship between the holders of the 369 Lexington Avenue & 2 West 46th Street Whole Loan is governed by a co-lender agreement as described under “Description of the Mortgage Pool—The Whole Loans—The Outside Serviced Pari Passu Whole Loans”. The 369 Lexington Avenue & 2 West 46th Street Whole Loan will be serviced pursuant to the pooling and servicing agreement for the BMO 2023-5C2 securitization trust. See “The Pooling and Servicing Agreement” in the Preliminary Prospectus.
The table below summarizes the promissory notes that comprise the 369 Lexington Avenue & 2 West 46th Street Whole Loan.
| Whole Loan Summary | ||||
| Note | Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece |
| A-1-1 | $29,000,000 | $29,000,000 | BMO 2023-5C2 | Yes |
| A-1-2(1) | $1,000,000 | $1,000,000 | CREFI | No |
| A-2(1) | $10,725,000 | $10,725,000 | CREFI | No |
| A-3(1) | $10,000,000 | $10,000,000 | CREFI | No |
| A-4 | $20,000,000 | $20,000,000 | BMO 2023-5C2 | No |
| A-5(1) | $15,000,000 | $15,000,000 | BMO | No |
| A-6-1 | $9,000,000 | $9,000,000 | BMO 2023-5C2 | No |
| A-6-2(1) | $1,000,000 | $1,000,000 | BMO | No |
| A-7(1) | $5,725,000 | $5,725,000 | BMO | No |
| Whole Loan | $101,450,000 | $101,450,000 | ||
| (1) | Expected to be contributed to one or more securitization trust(s). |
| 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 2023-5C2 | |
| No. 5 – 369 Lexington Avenue & 2 West 46th Street | ||
The Properties. The 369 Lexington Avenue & 2 West 46th Street Properties are comprised of a 157,122 square foot office property located at 369 Lexington Avenue in New York, New York (the “369 Lexington Avenue Property”) and a 144,971 square foot office property located at 2 West 46th Street in New York, New York (the “2 West 46th Street Property”).
The following table presents certain information relating to the 369 Lexington Avenue & 2 West 46th Street Properties:
| Portfolio Summary | ||||||||
| Property Name | Year Built / Renovated(1) | Sq. Ft.(2) | Allocated Whole Loan Cut-off Date Balance | % of Allocated Whole Loan Cut-off Date Balance | Appraised Value(1) | % of Appraised Value | U/W NOI | % of U/W NOI |
| 369 Lexington Avenue | 1937 / 2018 | 157,122 | $55,250,000 | 54.5% | $97,000,000 | 56.7% | $6,067,488 | 53.5% |
| 2 West 46th Street | 1926 / 2011 | 144,971 | 46,200,000 | 45.5% | 74,000,000 | 43.3% | $5,275,840 | 46.5% |
| Total | 302,093 | $101,450,000 | 100.0% | $171,000,000 | 100.0% | $11,343,328 | 100.00% | |
| (1) | Source: Appraisals |
| (2) | Based on the underwritten rent rolls dated September 1, 2023. |
369 Lexington Avenue Property
The 369 Lexington Avenue Property is comprised of three interconnected office buildings that feature 3-, 5- and 18-stories of office space totaling 157,122 square feet located at 369 Lexington Avenue in the Grand Central submarket of Manhattan, New York. The 369 Lexington Avenue Property was originally constructed in 1937 and subsequently renovated in 2018. The 369 Lexington Avenue Property is located on the corner of Lexington Avenue and East 41st Street, approximately one block southeast of Grand Central Station which provides access to the 4, 5, 6, 7 and S subway lines and three blocks east of Bryant Park which provides access to the B, D, F, M and 7 subway lines. As of September 1, 2023, the 369 Lexington Avenue Property was 92.0% occupied by 30 unique tenants with the largest tenant accounting for 12.1% of net rentable area.
2 West 46th Street Property
The 2 West 46th Street Property features 17-stories of office space totaling 144,971 square feet located at 2 West 46th Street directly adjacent to the Diamond District submarket of Manhattan, New York. The 2 West 46th Street Property was originally constructed in 1926 and subsequently renovated in 2011. The 2 West 46th Street Property is located on West 46th Street, approximately three blocks south of the Rockefeller Center with access to the B, D, F and M lines. As of September 1, 2023, the 2 West 46th Street Property was 95.8% occupied by 108 unique tenants with the largest tenant accounting for 12.8% of net rentable area.
Major Tenants. The three largest tenants based on underwritten base rent are Café Con Tutti Corp (“Café Con Tutti”), Jay Suites II, LLC (“Jay Suites”) and Royal Chain, Inc. (“Royal Chain”).
Café Con Tutti (14,039 square feet; 4.6% of NRA; 5.8% of underwritten base rent): Café Con Tutti is a ground floor café at the 369 Lexington Avenue Property that operates as Everyday Gourmet and offers deli-style cuisine 24-hours a day. Café Con Tutti’s lease at the 369 Lexington Avenue Property commenced in November 2009 and has a current lease term through November 2028 followed by one, five-year extension option. The Café Con Tutti lease does not have any termination options.
Jay Suites (18,982 square feet; 6.3% of NRA; 5.3% of underwritten base rent): Jay Suites, occupies 18,982 square feet of office space at the 369 Lexington Avenue Property. Jay Suites is a co-working company offering flexible office suites, virtual office plans and on-demand conference rooms. Jay Suites currently operates eight locations across Manhattan. Jay Suites has been at the 369 Lexington Avenue Property since January 2009 and has a current lease term through December 2031 with no termination or renewal options.
Royal Chain (18,546 square feet; 6.1% of NRA; 4.6% of underwritten base rent): Royal Chain was founded in 1978 and is a family owned and operated supplier of gold jewelry with over 40 years of experience. Royal Chain’s portfolio includes karat gold, sterling silver, chain, fashion jewelry and nationally recognized brands. Royal Chain has been a tenant at the 2 West 46th Street Property since April 1999 and expanded their space in June 2015. Royal Chain has a current lease term though December 2024 with no termination or renewal options.
Environmental. According to the Phase I environmental assessments dated July 27, 2023, there was no evidence of any recognized environmental conditions at the 369 Lexington Avenue & 2 West 46th Street 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. | ||
| 78 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 5 – 369 Lexington Avenue & 2 West 46th Street | ||
The following table presents certain information relating to the historical and current occupancy of the 369 Lexington Avenue & 2 West 46th Street Properties:
| Historical and Current Occupancy(1) | ||||
| 2019 | 2020 | 2021 | 2022 | Current(2) |
| 96.6% | 91.1% | 89.4% | 95.9% | 93.8% |
| (1) | Historical Occupancies are the annual average physical occupancy of each respective year. |
| (2) | Based on the underwritten rent rolls dated September 1, 2023. |
The following table presents certain information relating to the largest tenants based on underwritten base rent at the 369 Lexington Avenue & 2 West 46th Street 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 | ||||
| Cafe Con Tutti Corp | 369 Lexington Avenue | NR/NR/NR | 14,039 | 4.6 | % | $72.65 | $1,020,000 | 5.8 | % | 11/30/2028 | ||
| Jay Suites II, LLC | 369 Lexington Avenue | NR/NR/NR | 18,982 | 6.3 | $48.51 | 920,845 | 5.3 | 12/31/2031 | ||||
| Royal Chain, Inc. | 2 West 46th Street | NR/NR/NR | 18,546 | 6.1 | $43.57 | 808,014 | 4.6 | 12/31/2024 | ||||
| 5th Ave Dollar LLC | 2 West 46th Street | NR/NR/NR | 11,990 | 4.0 | $60.98 | 731,164 | 4.2 | 3/31/2027 | ||||
| Body Sculpt of Long Island LLC | 369 Lexington Avenue | NR/NR/NR | 8,928 | 3.0 | $65.27 | 582,734 | 3.3 | 3/31/2027 | ||||
| Manuela Matos | 369 Lexington Avenue | NR/NR/NR | 3,744 | 1.2 | $142.11 | 532,043 | 3.0 | 1/31/2028 | ||||
| Government of Morocco(4) | 369 Lexington Avenue | Ba1/BB+/BB+ | 8,500 | 2.8 | $57.68 | 490,280 | 2.8 | 12/31/2032 | ||||
| Mingxue Yang Medical P.C(4) | 369 Lexington Avenue | NR/NR/NR | 8,655 | 2.9 | $56.51 | 489,090 | 2.8 | 10/31/2029 | ||||
| Oaempire Inc(4) | Various | NR/NR/NR | 2,450 | 0.8 | $195.72 | 479,520 | 2.7 | Various | ||||
| California Cryobank, Inc. | 369 Lexington Avenue | NR/NR/NR | 7,500 | 2.5 | $60.82 | 456,160 | 2.6 | 9/30/2025 | ||||
| Major Tenants | 103,334 | 34.2 | % | $63.00 | $6,509,850 | 37.3 | % | |||||
| Other Tenants | 179,975 | 59.6 | $60.86 | $10,952,620 | 62.7 | |||||||
| Total Occupied | 283,309 | 93.8 | % | $61.64 | $17,462,470 | 100.0 | % | |||||
| Vacant Space | 18,784 | 6.2 | ||||||||||
| Total / Wtd. Avg. | 302,093 | 100.0 | % | |||||||||
| (1) | Based on the underwritten rent rolls dated September 1, 2023. |
| (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 include contractual rent steps through August 2024 totaling $429,484. |
| (4) | Government of Morocco has the ongoing right to terminate its lease upon not less than 180 days’ written notice of its intention to accelerate the termination date. In no event shall the accelerated termination date be a date prior to September 1, 2025. If the tenant accelerates the expiration date to September 1, 2025, the tenant will forfeit its security deposit and pay a termination fee of $1,150,000. After September 1, 2025, the termination fee is reduced by $14,743.58 each month. Mingxue Yang Medical P.C has the ongoing right to terminate its lease upon not less than 180 days’ written notice of. In no event shall the accelerated termination date be a date prior to July 1, 2026. If the tenant accelerates the expiration date to July 1, 2026, the tenant must pay a termination fee of $600,000. After July 1, 2026, the fee is reduced by $14,285.71 each month. Oaempire Inc. leases 2,100 square feet of space at the 369 Lexington Avenue Property expiring on April 30, 2033 and 350 square feet of space at the 2 West 46th Street Property expiring on February 14, 2033. |
| 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. | ||
| 79 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 5 – 369 Lexington Avenue & 2 West 46th Street | ||
The following table presents certain information relating to tenant lease expirations at the 369 Lexington Avenue & 2 West 46th Street 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(3) | |||||
| Vacant | NAP | 18,784 | 6.2 | % | NAP | NAP | 18,784 | 6.2% | NAP | NAP | ||||
| 2023 & MTM(4) | 2 | 2,924 | 1.0 | $192,349 | 1.1 | % | 21,708 | 7.2% | $192,349 | 1.1% | ||||
| 2024 | 35 | 53,710 | 17.8 | 2,781,407 | 15.9 | 75,418 | 25.0% | $2,973,756 | 17.0% | |||||
| 2025 | 35 | 53,596 | 17.7 | 3,110,193 | 17.8 | 129,014 | 42.7% | $6,083,948 | 34.8% | |||||
| 2026 | 27 | 30,373 | 10.1 | 2,066,539 | 11.8 | 159,387 | 52.8% | $8,150,488 | 46.7% | |||||
| 2027 | 18 | 49,565 | 16.4 | 3,124,316 | 17.9 | 208,952 | 69.2% | $11,274,804 | 64.6% | |||||
| 2028(5) | 10 | 25,564 | 8.5 | 2,068,238 | 11.8 | 234,516 | 77.6% | $13,343,042 | 76.4% | |||||
| 2029 | 3 | 15,312 | 5.1 | 879,632 | 5.0 | 249,828 | 82.7% | $14,222,674 | 81.4% | |||||
| 2030 | 1 | 1,840 | 0.6 | 108,836 | 0.6 | 251,668 | 83.3% | $14,331,510 | 82.1% | |||||
| 2031 | 4 | 30,174 | 10.0 | 1,570,345 | 9.0 | 281,842 | 93.3% | $15,901,855 | 91.1% | |||||
| 2032 | 1 | 8,500 | 2.8 | 490,280 | 2.8 | 290,342 | 96.1% | $16,392,135 | 93.9% | |||||
| 2033 | 5 | 8,957 | 3.0 | 861,607 | 4.9 | 299,299 | 99.1% | $17,253,742 | 98.8% | |||||
| 2034 & Beyond | 1 | 2,794 | 0.9 | 208,728 | 1.2 | 302,093 | 100.0% | $17,462,470 | 100.0% | |||||
| Total | 142 | 302,093 | 100.0 | % | $17,462,470 | 100.0 | % | |||||||
| (1) | Based on the underwritten rent rolls dated September 1, 2023. |
| (2) | Certain tenants have more than one lease. Certain tenants may have lease termination or contraction options that are exercisable prior to the originally stated expiration date of the subject lease and that are not considered in the 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 contractual rent steps through August 2024 totaling $429,484. |
| (4) | 2023 & MTM includes one tenant that is on a month-to-month lease and one tenant with a lease expiration date of December 2023. |
| (5) | 2028 includes a satellite lease to Dish at the 2 West 46th Street Property. The Dish lease accounts for $37,080 of UW Base Rent and has no square footage attributable to it. |
| 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. | ||
| 80 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 5 – 369 Lexington Avenue & 2 West 46th Street | ||
The following table presents certain information relating to operating history and underwritten cash flows at the 369 Lexington Avenue & 2 West 46th Street Properties:
| Operating History and Underwriting Net Cash Flow | |||||||||
| 2019 | 2020 | 2021 | 2022 | TTM July 2023(1) | Underwritten | Per Square Foot | %(2) | ||
| In-Place Rent | $16,576,119 | $16,367,882 | $15,795,753 | $15,650,857 | $16,446,413 | $17,032,986 | $56.38 | 85.5 | % |
| Commercial Rent Steps(3) | 0 | 0 | 0 | 0 | 0 | 429,484 | 1.42 | 2.2 | |
| Potential Income from Vacant Space | 0 | 0 | 0 | 0 | 0 | 1,089,472 | 3.61 | 5.5 | |
| Gross Potential Rent | $16,576,119 | $16,367,882 | $15,795,753 | $15,650,857 | $16,446,413 | $18,551,942 | $61.41 | 93.1 | % |
| Total Reimbursements | 1,949,112 | 1,885,478 | 1,795,453 | 1,283,819 | 1,122,561 | 1,369,237 | 4.53 | 6.9 | |
| Total Gross Income | $18,525,231 | $18,253,360 | $17,591,206 | $16,934,676 | $17,568,974 | $19,921,180 | $65.94 | 100.0 | % |
| Other Income(4) | 82,509 | 57,373 | 79,181 | 45,859 | 72,818 | 72,818 | 0.24 | 0.4 | |
| (Vacancy/Credit Loss) | 0 | 0 | 0 | 0 | 0 | (1,547,573) | (5.12) | (7.8 | ) |
| Effective Gross Income | $18,607,740 | $18,310,733 | $17,670,387 | $16,980,535 | $17,641,792 | 18,446,425 | $61.06 | 92.6 | % |
| Management Fee | 558,727 | 522,014 | 500,002 | 503,425 | 530,806 | 553,393 | 1.83 | 3.0 | |
| Real Estate Taxes | 4,296,120 | 4,490,066 | 4,415,777 | 4,160,500 | 4,154,751 | 4,432,385 | 14.67 | 24.0 | |
| Insurance | 219,300 | 210,952 | 229,785 | 224,531 | 218,529 | 234,845 | 0.78 | 1.3 | |
| Other Expenses(5) | 2,183,312 | 1,711,092 | 1,788,194 | 1,900,019 | 1,882,474 | 1,882,474 | 6.23 | 10.2 | |
| Total Expenses | $7,257,460 | $6,934,124 | $6,933,759 | $6,788,475 | $6,786,560 | $7,103,097 | $23.51 | 38.5 | % |
| Net Operating Income | $11,350,280 | $11,376,610 | $10,736,628 | $10,192,060 | $10,855,233 | $11,343,328 | $37.55 | 61.5 | % |
| Capital Expenditures | 0 | 0 | 0 | 0 | 0 | 109,765 | 0.36 | 0.6 | |
| TI / LC | 0 | 0 | 0 | 0 | 0 | 590,707 | 1.96 | 3.2 | |
| Net Cash Flow | $11,350,280 | $11,376,610 | $10,736,628 | $10,192,060 | $10,855,233 | $10,642,855 | $35.23 | 57.7 | % |
| (1) | TTM reflects the trailing 12-month period ending July 31, 2023. |
| (2) | % column represents percent of Total Gross Income for all revenue lines and represents percent of Effective Gross Income for the remainder of fields. |
| (3) | Underwritten Contractual Rent Steps include contractual rent steps through August 2024 totaling $429,484. |
| (4) | Other Income includes late fees and other miscellaneous fees. |
| (5) | Other Expenses consist of payroll and benefits, repairs and maintenance, utilities and general and administrative expenses. |
The Market. The 369 Lexington Avenue & 2 West 46th Street Properties are located within the Grand Central submarket of Midtown Manhattan.
The 2 West 46th Street Property is located between New York City’s Fifth and Sixth Avenues and is directly adjacent to Manhattan’s Diamond District which runs from West 46th Street to West 48th Street between Fifth and Sixth Avenue. According to the appraisal, as of the first quarter of 2023, the Diamond District Office Market had inventory of 7,364,270 square feet, a vacancy rate of 10.90% and direct base rent of $59.90 per square foot.
The 369 Lexington Avenue Property is located at the corner of Lexington Avenue and East 41st Street within the Grand Central office submarket. According to the appraisal, as of the first quarter of 2023, the submarket had inventory of 48,900,000 square feet, a vacancy rate of 12.5% and average asking rent of $68.61 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. | ||
| 81 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 5 – 369 Lexington Avenue & 2 West 46th Street | ||
The following table presents certain information relating to comparable office sales to the 2 West 46th Street Property:
| Comparable Office Rental Summary(1) | |||||
| Property Name / Address | Tenant | Suite Size (SF) | Commencement | Lease Term (mos.) | Rent (PSF) |
| 2 West 46th Street | Various | Various | Various | Various | $56.45(2) |
| 60 East 42nd Street | VantageScore | 2,188 SF | July 2022 | 26 mos. | $62.00 |
| 11 West 42nd Street | Burberry Limited | 43,781 SF | March 2022 | 180 mos. | $64.00 |
| 11 East 44th Street | Journey Capital Real Estate Partners LLC | 1,783 SF | September 2022 | 38 mos. | $48.00 |
| 9 East 40th Street | Duco Technology, Inc | 5,516 SF | December 2022 | 66 mos. | $52.00 |
| 25 West 45th Street | Kleinknecht Electric Company, Inc. | 7,035 SF | August 2022 | 90 mos. | $47.00 |
| (1) | Source: Appraisal. |
| (2) | Based on the underwritten rent roll dated September 1, 2023. |
The following table presents certain information relating to comparable office sales to the 369 Lexington Avenue Property:
| Comparable Office Rental Summary(1) | |||||
| Property Name / Address | Tenant | Suite Size (SF) | Commencement | Lease Term (mos.) | Rent (PSF) |
| 369 Lexington Avenue | Various | Various | Various | Various | $66.62(2) |
| 420 Lexington Avenue | Entertainment Software Association | 10,799 SF | March 2023 | 120 mos. | $66.00 |
| 10 East 40th Street | Hart Howerton Partners, Ltd. | 27,111 SF | February 2023 | 162 mos. | $70.00 |
| 60 East 42nd Street | American Lebanese Syrian Associated Charities, Inc | 7,642 SF | February 2023 | 89 mos. | $59.00 |
| 125 Park Avenue | TD Securities | 25,171 SF | January 2023 | 132 mos. | $64.00 |
| 300 East 42nd Street | CannonDesign | 16,983 SF | June 2022 | 120 mos. | $60.00 |
| (1) | Source: Appraisal. |
| (2) | Based on the underwritten rent roll dated September 1, 2023. |
The Borrowers. The borrowers are 369 Lexington Borrower LLC and 369 Lexington Borrower II LLC, as tenants in common with respect to the 369 Lexington Avenue Property, and 2 West 46 Borrower LLC and 2 West 46 Borrower II LLC, as tenants in common with respect to the 2 West 46th Street Property. Each borrower is a Delaware limited liability company and single-purpose entity having at least one independent director in its organizational structure. Legal counsel to the borrowers delivered a non-consolidation opinion in connection with the origination of the 369 Lexington Avenue & 2 West 46th Street Whole Loan.
The Borrowers’ Sponsors. The borrowers’ sponsors and non-recourse carveout guarantors are Faraj Srour and Joseph Stavrach. Faraj Srour and Joseph Starvrach are both members of Triangle Assets, a New York-based real estate investment firm which has been owned and operated by the Stavrach family for over 30 years. Joseph Starvach is the founder of Triangle Assets and currently serves as the CEO with Faraj Srour as the CFO.
Property Management. The 369 Lexington Avenue & 2 West 46th Street Properties are managed by (i) 369 Lex Manager Corp., with respect to the 369 Lexington Avenue Property, and (ii) 2 West 46th Street Management Corp., with respect to the 2 West 46th Street Property, which are each borrower-affiliated management companies.
Escrows and Reserves. At origination of the 369 Lexington Avenue & 2 West 46th Street Whole Loan, the borrowers deposited approximately (i) $1,532,209 into a reserve account for real estate taxes, (ii) $185,941 into a reserve account for insurance premiums, (iii) $2,500,000 into a reserve account for tenant improvements and leasing commissions, and (iv) $7,920 into a deferred maintenance reserve account.
Tax Reserve – The borrowers are required to deposit into a real estate tax reserve, on a monthly basis, 1/12 of the taxes that the lender estimates will be payable over the next-ensuing 12-month period (initially estimated to be approximately $383,052).
| 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 2023-5C2 | |
| No. 5 – 369 Lexington Avenue & 2 West 46th Street | ||
Insurance Reserve – 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 (initially estimated to be approximately $20,549).
Replacement Reserve – The borrowers are required to deposit into a replacement reserve, on a monthly basis, $9,147.
TI / LC Reserve – On each monthly payment date that the amount in the tenant improvements and leasing commissions reserve account is less than $2,000,000 the borrowers are required to deposit $50,348 into such account, subject to a cap of $2,500,000.
Lockbox / Cash Management. The 369 Lexington Avenue & 2 West 46th Street Whole Loan is structured with a hard lockbox and springing cash management. Within ten days of the origination of the 369 Lexington Avenue & 2 West 46th Street Whole Loan, the borrowers were required to deliver a notice to each tenant directing them to remit all payments under the applicable lease directly to the lender-controlled lockbox account. All revenue received by the borrowers, or the property manager, are required to be deposited in the lockbox account immediately following receipt. All funds deposited into the lockbox are required to be transferred on each business day to or at the direction of the borrower unless a Trigger Period (as defined below) exists and the lender elects (in its sole and absolute discretion) to deliver a restricted account notice, whereby the lender instructs the institution maintaining the lockbox account to transfer all funds on deposit in the lockbox account on each business day to the cash management account. Upon the occurrence and during the continuance of a Trigger Period, if lender elects to deliver a restricted account notice, 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 369 Lexington Avenue & 2 West 46th Street Whole Loan documents, and all excess cash flow funds remaining in the cash management account after the application of such funds may be held by the lender in an excess cash flow reserve account as additional collateral for the 369 Lexington Avenue & 2 West 46th Street Whole Loan.
A “Trigger Period” means a period (A) commencing upon the earliest of (i) the occurrence and continuance of an event of default, (ii) the debt service coverage ratio being less than 1.20x, and (iii) the occurrence of a Specified Tenant Trigger Period (as defined below), and (B) expiring upon (x) with regard to clause (i) above, the cure (if applicable) of such event of default, (y) with regard to clause (ii) above, the date that the debt service coverage ratio is equal to or greater than 1.20x for two consecutive calendar quarters, and (z) with regard to clause (iii) above, a Specified Tenant Trigger Period ceasing to exist.
A “Specified Tenant” means as to each individual 369 Lexington Avenue Property and 2 West 46th Street Property, any tenant under a lease which, individually or when aggregated with all other leases at the applicable 369 Lexington Avenue & 2 West 46th Street Property with the same tenant or its affiliate, and assuming the exercise of all expansion rights and all preferential rights to lease additional space contained in such lease, either (A) accounts for 15% or more of the total rental income for the applicable 369 Lexington Avenue & 2 West 46th Street Property, or (B) demises 15% or more of the applicable 369 Lexington Avenue & 2 West 46th Street Property’s rentable square feet.
A “Specified Tenant Trigger Period” means a period (A) commencing upon the first to occur of (i) Specified Tenant being in default under the applicable Specified Tenant lease beyond any applicable notice and cure periods, (ii) Specified Tenant failing to be in actual, physical possession of the Specified Tenant space (or applicable portion thereof), (iii) Specified Tenant failing to be open for business during customary hours and/or “going dark” in the Specified Tenant space (or applicable portion thereof), (iv) Specified Tenant giving notice that it is terminating its lease for all or any portion of the Specified Tenant space (or applicable portion thereof), (v) any termination or cancellation of any Specified Tenant lease (including, without limitation, rejection in any bankruptcy or similar insolvency proceeding) and/or any Specified Tenant lease failing to otherwise be in full force and effect, (vi) any bankruptcy or similar insolvency of Specified Tenant, and (vii) the Specified Tenant failing to extend or renew the applicable Specified Tenant lease for the applicable Specified Tenant renewal term on or prior to the earlier to occur of (1) the applicable Specified Tenant extension deadline and (2) the date required under a Specified Tenant lease by which the tenant thereunder is required to give notice of its exercise of a renewal option thereunder, in each case, in accordance with the applicable terms and conditions thereof and the 369 Lexington Avenue & 2 West 46th Street Whole Loan documents, and (B) expiring upon the first to occur of the lender’s receipt of evidence reasonably acceptable to the lender of (1) the satisfaction of the applicable Specified Tenant Cure Conditions (as defined below), or (2) the borrowers leasing the entire Specified Tenant space (or applicable portion thereof) pursuant to one or more leases in accordance with the applicable terms and conditions of the 369 Lexington Avenue & 2 West 46th Street Whole Loan documents, the applicable tenant(s) under such lease(s) being in actual, physical occupancy of the space demised under its lease, all contingencies to effectiveness of such lease have expired or been satisfied, each such lease has commenced and a rent commencement date has been established and, in the lender’s judgment, the applicable Specified Tenant excess cash flow condition is satisfied in connection therewith.
“Specified Tenant Cure Conditions” means each of the following, as applicable (i) the Specified Tenant has cured all defaults under the applicable Specified Tenant lease and no other default under such Specified Tenant lease occurs for a period of three consecutive months following such cure, (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 in accordance with clause (vii) of the definition of “Specified Tenant Trigger Period”, the applicable
| 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 2023-5C2 | |
| No. 5 – 369 Lexington Avenue & 2 West 46th Street | ||
Specified Tenant has renewed or extended the applicable Specified Tenant lease in accordance with the terms thereof and the 369 Lexington Avenue & 2 West 46th Street Whole Loan documents for the Specified Tenant renewal term and, in lender’s judgment, the applicable Specified Tenant excess cash flow condition is satisfied in connection therewith, (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 and has affirmed the applicable Specified Tenant lease pursuant to final, non-appealable order of a court of competent jurisdiction, and (vi) the applicable Specified Tenant is paying full, unabated rent under the applicable Specified Tenant lease.
Subordinate Debt. None.
Mezzanine Debt. None.
Partial Release. Provided that no event of default has occurred is continuing, the borrowers have the right, (I) at any time after April 1, 2028 (such period, the “Open Prepayment Period”), partially prepay the 369 Lexington Avenue & 2 West 46th Street Whole Loan and obtain the release of any single one of the 369 Lexington Avenue & 2 West 46th Street Properties, and (II) at any time after (x) the earlier of (a) September 28, 2027, and (b) 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 369 Lexington Avenue & 2 West 46th Street Whole Loan to be securitized, but prior to (y) the Open Prepayment Period, deliver defeasance collateral and obtain release of any single 369 Lexington Avenue & 2 West 46th Street Property, in each case, provided that, among other conditions, (i) the defeasance collateral or partial prepayment, as applicable, is in an amount equal to the greater of (a) 125% of the allocated loan amount with respect to such individual 369 Lexington Avenue & 2 West 46th Street Property, and (b) the applicable net sales proceeds, (ii) the borrower delivers a REMIC opinion, (iii) the borrower delivers (in the case of a partial prepayment, if requested by the lender) a rating agency confirmation, (iv) as of the date of notice of the partial release and the consummation of the partial release (whether by partial prepayment or partial defeasance), after giving effect to the release, the debt service coverage ratio with respect to the remaining 369 Lexington Avenue & 2 West 46th Street Property is equal to or greater than the greater of (a) the debt service coverage ratio for all of the 369 Lexington Avenue & 2 West 46th Street Properties immediately prior to the date of notice of the partial release or the consummation of the partial release, as applicable, and (b) 1.30x, (v) as of the date of notice of the partial release and the consummation of the partial release (whether by partial prepayment or partial defeasance), after giving effect to the release, the debt yield with respect to the remaining 369 Lexington Avenue & 2 West 46th Street Property is equal to or greater than the greater of (a) 10.40% and (b) the debt yield for all of the 369 Lexington Avenue & 2 West 46th Street Properties immediately prior to the date of notice of the partial release or the consummation of the partial release, as applicable, and (vi) as of the date of notice of the partial release and the consummation of the partial release (whether by partial prepayment or partial defeasance), after giving effect to the release, the loan-to-value ratio with respect to the remaining 369 Lexington Avenue & 2 West 46th Street Property is no greater than the lesser of (a) 60.0% and (b) the loan-to-value ratio for all of the 369 Lexington Avenue & 2 West 46th Street Properties immediately prior to the date of notice of the partial release or the consummation of the partial release, as applicable.
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. | ||
| 84 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 6 – Lake Merritt Plaza | ||
| 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 2023-5C2 | |
| No. 6 – Lake Merritt Plaza | ||
| 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 2023-5C2 | |
| No. 6 – Lake Merritt Plaza | ||
| 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 2023-5C2 | |
| No. 6 – Lake Merritt Plaza | ||
| Mortgage Loan Information | Property Information | |||
| Mortgage Loan Seller: | GSMC | Single Asset / Portfolio: | Single Asset | |
| Original Principal Balance(1): | $45,000,000 | Title: | Fee | |
| Cut-off Date Principal Balance(1): | $45,000,000 | Property Type – Subtype: | Office – CBD | |
| % of IPB: | 5.8% | Net Rentable Area (SF): | 489,777 | |
| Loan Purpose: | Recapitalization | Location: | Oakland, CA | |
| Borrower: | BCAL LMP Harrison Property LLC | Year Built / Renovated: | 1985 / 2015 | |
| Borrower Sponsor: | BCP LMP Harrison Equity LLC | Occupancy: | 82.6% | |
| Interest Rate: | 8.01220% | Occupancy Date: | 9/25/2023 | |
| Note Date: | 10/12/2023 | 4th Most Recent NOI (As of): | NAV | |
| Maturity Date: | 11/6/2028 | 3rd Most Recent NOI (As of): | $16,813,630 (12/31/2021) | |
| Interest-only Period: | 60 months | 2nd Most Recent NOI (As of): | $16,207,841 (12/31/2022) | |
| Original Term: | 60 months | Most Recent NOI (As of): | $16,404,377 (TTM 7/31/2023) | |
| Original Amortization Term: | None | UW Economic Occupancy: | 83.7% | |
| Amortization Type: | Interest Only | UW Revenues: | $30,556,308 | |
| Call Protection(2): | L(24),D(29),O(7) | UW Expenses: | $14,081,611 | |
| Lockbox / Cash Management: | Hard / Springing | UW NOI: | $16,474,697 | |
| Additional Debt(1): | Yes | UW NCF: | $15,545,673 | |
| Additional Debt Balance(1): | $35,000,000 | Appraised Value / Per SF: | $242,500,000 / $495 | |
| Additional Debt Type(1): | Pari Passu | Appraisal Date: | 7/11/2023 | |
| Escrows and Reserves(3) | Financial Information(1) | |||||
| Initial | Monthly | Initial Cap | Cut-off Date Loan / SF: | $163 | ||
| Taxes: | $2,088,863 | $298,409 | N/A | Maturity Date Loan / SF: | $163 | |
| Insurance: | $0 | Springing | N/A | Cut-off Date LTV: | 33.0% | |
| Replacement Reserves: | $0 | $10,230 | $368,250 | Maturity Date LTV: | 33.0% | |
| TI/LC: | $5,000,000 | Springing | $5,000,000 | UW NCF DSCR: | 2.39x | |
| Other Reserves(4) | $2,620,671 | $0 | N/A | UW NOI Debt Yield: | 20.6% | |
| Sources and Uses | |||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | ||
| Whole Loan Amount(1) | $80,000,000 | 100.0% | Recapitalization | $68,933,151 | 86.2 | % | |
| Reserves | 9,709,535 | 12.1 | |||||
| Closing Costs | 1,357,314 | 1.7 | |||||
| Total Sources | $80,000,000 | 100.0% | Total Uses | $80,000,000 | 100.0 | % | |
| (1) | The Lake Merritt Plaza Mortgage Loan (as defined below) is part of the Lake Merritt Plaza Whole Loan (as defined below), which is evidenced by two pari passu promissory notes with an aggregate principal balance of $80,000,000. The Cut-off Date Loan / SF, Maturity Date Loan/SF, UW NOI Debt Yield, UW NCF DSCR, Cut-off Date LTV and Maturity Date LTV numbers presented above are based on the aggregate principal balance of the promissory notes comprising the Lake Merritt Plaza Whole Loan. |
| (2) | Defeasance of the Lake Merritt Plaza 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 portion of the Lake Merritt Plaza Whole Loan to be securitized, or (b) October 12, 2026. |
| (3) | See “Escrows and Reserves” below for further discussion of reserve information. |
| (4) | Other Reserves consists of approximately $332,910 of Unfunded LC Obligation, $12,492 of Unfunded Landlord Work; $783,141 of Free Rent Reserves; and $1,492,128 of Unfunded TI Obligations. |
The Loan. The sixth largest mortgage loan (the “Lake Merritt Plaza Mortgage Loan”) is part of a whole loan (the “Lake Merritt Plaza Whole Loan”) secured by the borrower’s fee interest in an office building located in Oakland, California. The Lake Merritt Plaza Mortgage Loan is evidenced by the controlling Note A-1, which has an original and outstanding principal balance as of the Cut-off Date of $45,000,000 and represents approximately 5.8% of the Initial Pool Balance.
The Lake Merritt Plaza Whole Loan was originated on October 12, 2023 by Goldman Sachs Bank USA (“GSBI”). The “Lake Merritt Plaza Property” consists of a LEED Gold certified, Class-A office tower featuring 489,777 SF across 27 stories, of which includes 10,548 SF of ground-floor retail space. Major tenants include LaunchDarkly, Dentons US LLP and Simpson Gumpertz. The Lake Merritt Plaza Whole Loan proceeds were used to recapitalize the Lake Merritt Plaza Property (the Lake Merritt Plaza Property was previously on a subline with CalSTRS (as defined below) that has since been paid off) and pay origination costs. The Lake Merritt Plaza Whole Loan accrues interest at a fixed rate of 8.01220% per annum.
| 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 2023-5C2 | |
| No. 6 – Lake Merritt Plaza | ||
The Lake Merritt Plaza Whole Loan had an original term of 60 months and has a remaining term of 60 months as of the Cut-off Date. The Lake Merritt Plaza Whole Loan requires interest-only payments during the full term. The scheduled maturity date of the Lake Merritt Plaza Whole Loan is the payment date in November 2028.
Voluntary prepayment of the Lake Merritt Plaza Whole Loan is permitted in whole (but not in part) on or after the monthly payment date in May 2028 without the payment of any prepayment premium. Defeasance of the Lake Merritt Plaza Whole Loan in whole (but not in part) is permitted after the earlier to occur of the date that is two years from the closing date of the securitization that includes the last pari passu note of the Lake Merritt Plaza Whole Loan to be securitized and October 12, 2026.
The relationship between the holders of the Lake Merritt Plaza 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” and “The Pooling and Servicing Agreement” in the Prospectus. See “The Pooling and Servicing Agreement” in the Prospectus.
The table below summarizes the promissory notes that comprise the Lake Merritt Plaza Whole Loan.
| Whole Loan Summary | ||||
| Note | Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece |
| A-1 | $45,000,000 | $45,000,000 | BMO 2023-5C2 | Yes |
| A-2 | $35,000,000 | $35,000,000 | GSBI(1) | No |
| Whole Loan | $80,000,000 | $80,000,000 | ||
| (1) | Expected to be contributed to one or more future securitization trusts. |
The Property.
The Lake Merritt Plaza Property is a 489,777 SF 27-story multitenant office property located in downtown Oakland, California. The Lake Merritt Plaza Property was built in 1985, was renovated in 2015 and has access to three major East Bay freeway systems: I-980, I-880 and I-580.
The Lake Merritt Plaza Property has a granular rent roll with no single tenant occupying more than 6.9% of total rentable SF or contributing greater than 9.3% of total underwritten base rent. The top 10 tenants at the Lake Merritt Plaza Property represent 42.3% of total rentable SF and generate 49.7% of total underwritten base rent. The Lake Merritt Property was 82.6% occupied as of September 25, 2023 by over 51 unique tenants.
The Lake Merritt Plaza Property offers an on-site amenity package including 401 on-site parking stalls, 24-hour security and a bike room with showers and lockers. The property has flexible floorplates that are greater than 20,000 SF, with the exception of the 27th floor. In the 2015 renovation of the Lake Merritt Plaza Property, the borrower sponsors implemented common area improvements including lobby upgrades and a destination dispatch elevator system with renovated cabs.
Major Tenants. The three largest tenants based on underwritten base rent are LaunchDarkly, Dentons US LLP and Simpson Gumpertz.
LaunchDarkly (33,710 square feet; 6.9% of net rentable area; 9.3% of underwritten base rent) is a privately held American feature management platform that allows software development teams to deliver to their customers. Founded in 2014, the company supports over 4,000 customers, including Square, AMC and Intuit, amongst others. Today, the company has more than 500 employees with a headquarters office in Oakland, CA.
Dentons US LLP (28,396 square feet; 5.8% of net rentable area; 6.6% of underwritten base rent) is a multinational law firm that operates in over 80 countries. It was founded in 2013 when Salans, Fraser Milner Casgrain and SNR Denton combined and has grown continuously since by combining with numerous other law firms operating across the world.
Simpson Gumpertz (20,775 square feet; 4.2% of net rentable area; 5.7% of underwritten base rent) is a privately held American engineering firm that designs, investigates and rehabilitates structures and building enclosures. Founded in 1956, the company has participated in the construction of several American landmarks, such as the John Hancock Tower, the Griffith Observatory and the New York State Capitol Building. Today, the company has more than 600 employees located across eight offices.
Environmental. The Phase I environmental assessment of the Lake Merritt Plaza Property dated August 22, 2023 identified no recognized environmental conditions, controlled environmental conditions or significant data gaps with the property. See “Description of the Mortgage Pool—Environmental Considerations” in the Prospectus.
| 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. | ||
| 89 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 6 – Lake Merritt Plaza | ||
The following table presents certain information relating to the historical occupancy of the Lake Merritt Plaza Property:
| Historical and Current Occupancy(1) | ||
| 2021 | 2022 | Current(2) |
| 88.4% | 85.0% | 82.6% |
| (1) | Historical Occupancies are as of December 31 of each respective year, unless otherwise specified. |
| (2) | Based on the underwritten rent roll dated September 25, 2023. |
The following table presents certain information relating to the major tenants (of which, certain tenants may have co-tenancy provisions) at the Lake Merritt Plaza Property:
| Top Tenant Summary(1) | ||||||||||
| Tenant | Ratings Moody’s/S&P/Fitch(2) | Net Rentable Area (SF) | % of Total NRA | UW Base Rent PSF | UW Base Rent | % of Total UW Base Rent | Lease Exp. Date | |||
| LaunchDarkly | NR/NR/NR | 33,710 | 6.9 | % | $72.23 | $2,434,746 | 9.3 | % | 3/31/2026 | |
| Dentons US LLP | NR/NR/NR | 28,396 | 5.8 | $60.80 | 1,726,477 | 6.6 | 10/31/2024 | |||
| Simpson Gumpertz | NR/NR/NR | 20,775 | 4.2 | $71.58 | 1,487,075 | 5.7 | 11/30/2028 | |||
| Meyers Nave Riback | NR/NR/NR | 20,542 | 4.2 | $70.91 | 1,456,633 | 5.6 | 11/30/2026 | |||
| Tetra Tech Inc | NR/NR/NR | 14,919 | 3.0 | $69.70 | 1,039,854 | 4.0 | 4/30/2024 | |||
| Donahue Fitzgerald LLP | NR/NR/NR | 14,499 | 3.0 | $70.81 | 1,026,674 | 3.9 | 4/30/2028 | |||
| Premier Workspaces | NR/NR/NR | 20,977 | 4.3 | $48.05 | 1,008,000 | 3.9 | 11/30/2024 | |||
| Morgan Stanley | A1/A-/NR | 20,484 | 4.2 | $48.54 | 994,293 | 3.8 | 4/30/2025 | |||
| Big Fish Games, Inc(3) | NR/NR/NR | 20,977 | 4.3 | $46.47 | 974,821 | 3.7 | 3/31/2025 | |||
| Colliers Parish Inter. | NR/NR/NR | 12,137 | 2.5 | $68.96 | 836,968 | 3.2 | 9/30/2025 | |||
| Ten Largest Owned Tenants | 207,416 | 42.3 | % | $62.61 | $12,985,540 | 49.7 | % | |||
| Remaining Owned Tenants(4) | 197,338 | 40.3 | $66.62 | 13,145,751 | 50.3 | |||||
| Total Occupied | 404,754 | 82.6 | % | $64.56 | $26,131,292 | 100.0 | % | |||
| Vacant Spaces (Owned Space) | 85,023 | 17.4 | ||||||||
| Totals/ Wtd. Avg. All Owned Tenants | 489,777 | 100.0 | % | |||||||
| (1) | Based on the underwritten rent roll dated September 25, 2023, inclusive of rent steps through October 2024. |
| (2) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
| (3) | Big Fish Games, Inc. subleases its space to East Bay Energy for $45.12 PSF, increasing to $46.47 PSF in August 2024. The sublease expiration date is coterminous with the lease expiration date, however, East Bay Energy executed a seven-year, seven-month direct lease for the same suite, which will commence on April 1, 2025 at an initial base rent of $64.00 psf. Underwritten base rent is based on the contractual sublease rate, inclusive of rent steps through October 2024. |
| (4) | Remaining Owned Tenants includes Building Management Office, Janitorial Closet, Janitorial storage closet and Fitness Center spaces, which collectively occupy 4,530 SF but have no UW Base Rent. |
| 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. | ||
| 90 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 6 – Lake Merritt Plaza | ||
The following table presents certain information relating to the lease rollover schedule at the Lake Merritt Plaza Property:
| Lease Rollover Schedule(1)(2) | ||||||||||||
| Year | Number of Leases Expiring(3) | Net Rentable Area Expiring(3) | % of NRA Expiring(3) | 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 | 85,023 | 17.4 | % | NAP | NAP | 85,023 | 17.4% | NAP | NAP | ||
| 2023 | 0 | 0 | 0.0 | $0 | 0.0 | % | 85,023 | 17.4% | $0 | 0.0% | ||
| 2024 | 11 | 111,202 | 22.7 | 7,095,163 | 27.2 | 196,225 | 40.1% | $7,095,163 | 27.2% | |||
| 2025 | 11 | 75,240 | 15.4 | 4,267,127 | 16.3 | 271,465 | 55.4% | $11,362,291 | 43.5% | |||
| 2026 | 7 | 75,538 | 15.4 | 5,320,830 | 20.4 | 347,003 | 70.8% | $16,683,120 | 63.8% | |||
| 2027 | 6 | 25,531 | 5.2 | 1,701,791 | 6.5 | 372,534 | 76.1% | $18,384,911 | 70.4% | |||
| 2028 | 10 | 68,536 | 14.0 | 4,784,012 | 18.3 | 441,070 | 90.1% | $23,168,924 | 88.7% | |||
| 2029 | 1 | 7,499 | 1.5 | 542,478 | 2.1 | 448,569 | 91.6% | $23,711,401 | 90.7% | |||
| 2030 | 8 | 39,965 | 8.2 | 2,419,890 | 9.3 | 488,534 | 99.7% | $26,131,292 | 100.0% | |||
| 2031 | 1 | 0 | 0.0 | 0 | 0.0 | 488,534 | 99.7% | $26,131,292 | 100.0% | |||
| 2032 | 0 | 0 | 0.0 | 0 | 0.0 | 488,534 | 99.7% | $26,131,292 | 100.0% | |||
| 2033 | 0 | 0 | 0.0 | 0 | 0.0 | 488,534 | 99.7% | $26,131,292 | 100.0% | |||
| 2034 & Beyond | 1 | 1,243 | 0.3 | 0 | 0.0 | 489,777 | 100.0% | $26,131,292 | 100.0% | |||
| Total | 56 | 489,777 | 100.00 | % | $26,131,292 | 100.0 | % | |||||
| (1) | Based on the underwritten rent roll dated September 25, 2023, inclusive of rent steps through October 2024. |
| (2) | Certain tenants may have lease termination options that are exercisable prior to the originally stated expiration date of the related lease and are not considered in the rollover schedule. |
| (3) | Includes Building Management Office, Janitorial Closet, Janitorial storage closet and Fitness Center spaces, which collectively occupy 4,530 SF but have no UW Base Rent, as well as Zayo Group, Century Link Communications LLC and Halo Das, LLC, which do not occupy any SF and do not pay rent. |
The following table presents certain information relating to the underwritten cash flows of the Lake Merritt Plaza Property:
| Operating History and Underwritten Net Cash Flow | ||||||||
| 2021 | 2022 | TTM July 2023 | Underwritten | Per Square Foot | %(1) | |||
| Rents in Place(2) | $25,452,780 | $25,442,504 | $26,306,921 | $26,131,292 | $53.35 | 75.4 | % | |
| Credit Rent | 0 | 0 | 0 | 124,895 | 0.26 | 0.4 | ||
| Vacant Income | 0 | 0 | 0 | 5,934,499 | 12.12 | 17.1 | ||
| Gross Potential Rent | $25,452,780 | $25,442,504 | $26,306,921 | $32,190,686 | $65.73 | 92.9 | % | |
| Total Reimbursements | 1,359,264 | 2,084,440 | 1,934,713 | 2,455,274 | 5.01 | 7.1 | ||
| Net Rental Income | $26,812,044 | $27,526,944 | $28,241,634 | $34,645,960 | $70.74 | 100.0 | % | |
| Other Income(3) | 1,996,402 | 1,502,262 | 2,026,024 | 1,844,847 | 3.77 | 5.3 | ||
| (Vacancy/Credit Loss) | 0 | 0 | (611,814) | (5,934,499) | (12.12) | (17.1 | ) | |
| Effective Gross Income | $28,808,446 | $29,029,206 | $29,655,844 | $30,556,308 | $62.39 | 88.2 | % | |
| Total Expenses(4) | $11,994,816 | $12,821,365 | $13,251,467 | $14,081,611 | $28.75 | 46.1 | % | |
| Net Operating Income | $16,813,630 | $16,207,841 | $16,404,377 | $16,474,697 | $33.64 | 53.9 | % | |
| Total TI/LC, Capex/RR | 0 | 0 | 0 | 929,025 | 1.90 | 3.0 | ||
| Net Cash Flow | $16,813,630 | $16,207,841 | $16,404,377 | $15,545,673 | $31.74 | 50.9 | % | |
| (1) | Revenue-related figures are calculated as a % of Net Rental Income. Total Expenses, Net Operating Income, Total TI/LC, Capex/RR and Net Cash Flow are calculated as a % of Effective Gross Income. |
| (2) | Underwritten Rents in Place is based on the underwritten rent roll dated September 25, 2023, inclusive of rent steps through October 2024. |
| (3) | Underwritten Other Income includes parking income, retail income, storage, utility, engineering, cleaning, service, telecom and supplemental income |
| (4) | Underwritten Total Expenses includes Real Estate Taxes of approximately $4,002,451 and Insurance expense of approximately $2,080,379. |
The Market. The Lake Merritt Plaza Property is located in downtown Oakland, California, and serves a trade area of approximately 170,217 households encompassing approximately 442,019 residents with an average household income of over $140,000. Oakland is the third largest city overall in the Bay Area and the eighth most populated city in California. Located 1.4 miles southwest of the subject property, The Port of Oakland is the busiest port in Northern California and the fifth busiest in the United States.
The top employers in Oakland are the University of California (more than 10,000 employees), Western Digital (more than 10,000 employees) and Chevron Corp. (more than 10,000 employees). As of January 2023, the unemployment rate for the Oakland-Hayward-Berkeley metropolitan statistical area is 3.7%.
| 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. | ||
| 91 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 6 – Lake Merritt Plaza | ||
According to the 2023 population within a 1-, 3- and 5-mile radius of the Lake Merritt Plaza Property was 64,967, 294,896 and 533,241, respectively. The 2023 average household income within the same radii was $124,433, $151,630 and $153,492, respectively.
The Borrower. The borrower is BCAL LMP Harrison Property LLC, a Delaware limited liability company with two independent directors. The borrower is a joint venture between Beacon Capital Partners LLC (“Beacon”) and California State Teachers’ Retirement System (“CalSTRS”). There is no separate environmental indemnitor for the Lake Merritt Plaza Whole Loan, other than the borrower.
Property Management. The Lake Merritt Plaza Property, other than the parking garage, is managed by LMP Harrison Property Manager LLC, an affiliate and direct subsidiary of the borrower sponsor. The parking garage is managed by ABM Industry Groups, LLC, an independent third-party.
Escrows and Reserves. At origination, the borrower deposited approximately (i) $2,088,863 into a real estate tax reserve, (ii) $5,000,000 into a tenant improvement and leasing commission reserve and (iii) $2,620,671 into other reserves for leasing commissions ($332,910), landlord work ($783,141), free rent ($783,141), and reduced rent ($1,492,128).
Tax Escrows – The borrower is required to deposit into a real estate tax reserve, on a monthly basis, 1/12 of the reasonably estimated taxes.
Insurance Escrows – The borrower is required to deposit into an insurance reserve, on a monthly basis, 1/12 of the reasonably estimated insurance premiums unless the borrower maintains a blanket policy in accordance with the Lake Merritt Plaza Whole Loan documents and no event of default is continuing.
TI/LC Reserve –The borrower is required to deposit into a tenant improvement and leasing commission reserve, on a monthly basis, an amount equal to $81,833 if the balance of the TI/LC reserve account is less than $2,500,000, until the amounts on deposit in the TI/LC reserve account are equal to or greater than $5,000,000 (excluding amounts deposited in the TI/LC reserve account in respect of any termination fees exceeding $350,000 (or any termination fees with respect to a Major Lease) received in connection with the termination of any leases entered into by the borrower) and no Trigger Period (as defined below) is continuing. During the continuance of a Trigger Period, monthly deposits are required in the amount of $81,833 without any cap or floor.
Capital Expenditures Reserve – The borrower is required to deposit into a capital expenditures reserve, on a monthly basis, an amount equal to $10,230; provided that if there is no Trigger Period then continuing, the borrower is not required to deposit any amounts that would cause the amounts on deposit in the capital expenditures reserve account to exceed $368,250.
Lockbox / Cash Management. The Lake Merritt Plaza Whole Loan is structured with a hard lockbox and springing cash management. The borrower is required to deposit all revenues, exclusive of security deposits and lease termination fees exceeding $350,000 (or any termination fees with respect to a Major Lease) (which are required to be remitted to the lender for deposit to the TI/LC reserve account) from the Lake Merritt Plaza Property into a lender-controlled lockbox account, and to direct all tenants to make direct deposits of payments due under leases, exclusive of security deposits and lease termination fees exceeding $350,000, into the lockbox account. Notwithstanding the foregoing, revenues from the parking garage at the Lake Merritt Plaza Property may be collected by the property manager and deposited first into an account of the borrower or such property manager and then delivered to the borrower, net of amounts to which such property manager is entitled, all as provided in the related property management agreement, after which the borrower is required to deposit, or cause to be deposited, such net amounts into the lockbox account. As long as a Trigger Period is not in effect, all funds in the lockbox account are required to be distributed to the borrower. During the continuance of a Trigger Period, all funds in the lockbox will be transferred to a lender-controlled cash management account to be disbursed in accordance with the cash management waterfall set forth in the Lake Merritt Plaza Whole Loan documents, with any excess funds required to be held as additional security in an excess cash flow subaccount controlled by the lender for so long as the Trigger Period continues, subject to release to the borrower for Excess Cash Flow Permitted Uses (as defined below) so long as there is no Event of Default, subject to conditions precedent, disbursement mechanisms and other terms and conditions for Excess Cash Flow Permitted Uses set forth in such excess cash flow reserve provisions.
“Trigger Period” means any period from (a) the last day of the second of any two (2) consecutive fiscal quarters during which the debt yield (as calculated under the Lake Merritt Plaza Whole Loan documents) for each such fiscal quarter is less than 17.0%, to (b) the last day of the second of any two consecutive fiscal quarters thereafter during which the debt yield for each such fiscal quarter is equal to or greater than 17.0% (and if the annual, quarterly or monthly financial reports under Lake Merritt Plaza Whole Loan documents are not delivered to the lender as and when required thereunder and such failure continues for an additional ten (10) business days following the borrower’s receipt of written notice of such failure from the lender, a Trigger Period will be deemed to have commenced and be ongoing, unless and until such reports are delivered and they indicate that, in fact, no Trigger Period is ongoing). The borrower may avoid or terminate a Trigger Period by delivering to the lender cash or a letter of credit in such amount that, if applied to the reduction of the outstanding principal balance of the Lake Merritt Plaza Whole Loan, would result in a debt yield that would otherwise result in the termination of a Trigger Period (and, (x) upon the termination of a Trigger Period, provided no event of default or other Trigger Period is continuing, any letter of credit or cash theretofore delivered to the lender will be returned to the borrower and such letter of credit may be terminated by the borrower so long as the debt yield, determined as of such date of termination of such Trigger Period, is equal to or greater than 17.0% without reference to such letter of credit or cash, and (y) with respect to any such letter of credit or cash, commencing on the date which is two (2) years following the date that the same was delivered to the lender, the debt yield for purposes of determining
| 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. | ||
| 92 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 6 – Lake Merritt Plaza | ||
whether a Trigger Period exists will be determined as of such date and thereafter without reference to such letter of credit or cash, provided that the lender may retain such letter of credit or cash as additional collateral for the Lake Merritt Plaza Whole Loan (except that such cash will be disbursed to the borrower for Excess Cash Flow Permitted Uses (as defined below), and the borrower may reduce the amount of any such letter of credit by the amount of Excess Cash Flow Permitted Uses incurred by the borrower (in which case any such reduction will be treated as a “disbursement” for purposes of the conditions under the excess cash flow reserve provisions in the related loan agreement), subject to conditions precedent, disbursement mechanisms and other terms and conditions for Excess Cash Flow Permitted Uses set forth in such excess cash flow reserve provisions, and, upon the termination of a Trigger Period, provided no event of default or other Trigger Period is continuing, any such letter of credit or cash will be returned to the borrower and such letter of credit may be terminated by the borrower so long as the debt yield, determined as of such date of termination of such Trigger Period, is equal to or greater than 17.0% without reference to such letter of credit or cash)).
“Excess Cash Flow Permitted Uses” means, with respect to any disbursement from the excess cash flow reserve account, (i) debt service payable under the related loan agreement or the promissory notes to the extent not paid pursuant to the provisions in the related loan agreement regarding distributions from the cash management account, (ii) capital expenditures made pursuant to the approved annual budget or any other capital expenditure approved by the lender in writing in its reasonable discretion (to the extent sufficient funds are not available from the capital expenditure reserve account to pay for the same), (iii) tenant improvement costs and leasing commissions and, if applicable, other leasing costs incurred by the borrower in connection with leases approved by the lender (to the extent such approval is required under the related loan agreement) and entered into in accordance with the related loan agreement and/or (iv) such other purposes (including capital expenditures, leasing commissions and tenant improvement costs and other leasing costs incurred in connection with new leases) related to the Lake Merritt Plaza Property, to the extent approved by the lender in its reasonable discretion.
Subordinate and Mezzanine Debt. None.
Partial Release. Not permitted.
Ground Lease. None.
Terrorism Insurance. The loan documents require that the “all risk” insurance policy required to be maintained by the borrower provides coverage for terrorism in an amount equal to the full replacement cost of the Lake Merritt Plaza Property, as well as business interruption insurance covering no less than the 18-month period following the occurrence of a casualty event, together with a 12-month extended period of indemnity (provided that if TRIPRA or a similar statute is not in effect, the borrower will not be obligated to pay terrorism insurance premiums in excess of two times the annual premium for the Lake Merritt Plaza Property and business interruption/rental loss insurance coverage). See “Risk Factors—Risks Relating to the Mortgage Loans—Terrorism Insurance May Not Be Available for All Mortgaged Properties” in the prospectus.
| 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. | ||
| 93 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 7 – Hilton Garden Inn Atlanta Downtown | ||
| 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. | ||
| 94 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 7 – Hilton Garden Inn Atlanta Downtown | ||
| 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. | ||
| 95 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 7 – Hilton Garden Inn Atlanta Downtown | ||
| Mortgage Loan Information | Property Information | |||
| Whole Loan Seller: | BMO | Single Asset / Portfolio: | Single Asset | |
| Original Principal Balance(1): | $31,500,000 | Title: | Fee | |
| Cut-off Date Principal Balance(1): | $31,500,000 | Property Type - Subtype: | Hospitality – Full Service | |
| % of Pool by IPB: | 4.1% | Net Rentable Area (Rooms): | 242 | |
| Loan Purpose: | Refinance | Location: | Atlanta, GA | |
| Borrower: | Legacy Pavilion Hotel, LLC | Year Built / Renovated: | 2008 / 2019 | |
| Borrower Sponsor: | David D. Marvin | Occupancy / ADR / RevPAR: | 73.0% / $200.40 / $146.22 | |
| Interest Rate: | 8.39000% | Occupancy / ADR / RevPAR Date: | 8/31/2023 | |
| Note Date: | 10/10/2023 | 4th Most Recent NOI (As of): | $2,080,827 (12/31/2020) | |
| Maturity Date: | 11/6/2028 | 3rd Most Recent NOI (As of): | $4,578,591 (12/31/2021) | |
| Interest-only Period: | 60 months | 2nd Most Recent NOI (As of): | $5,554,905 (12/31/2022) | |
| Original Term: | 60 months | Most Recent NOI (As of): | $5,657,210 (TTM 8/31/2023) | |
| Original Amortization Term: | None | UW Occupancy / ADR / RevPAR: | 73.0% / $200.40 / $146.22 | |
| Amortization Type: | Interest Only | UW Revenues: | $20,279,498 | |
| Call Protection(2): | L(24),YM1(32),O(4) | UW Expenses: | $14,258,935 | |
| Lockbox / Cash Management: | Hard / Springing | UW NOI: | $6,020,563 | |
| Additional Debt(1): | Yes | UW NCF: | $5,218,463 | |
| Additional Debt Balance(1): | $8,000,000 | Appraised Value / Per Room: | $76,300,000 / $315,289 | |
| Additional Debt Type(1): | Pari Passu | Appraisal Date: | 9/15/2023 | |
| Escrows and Reserves(3) | Financial Information(1) | |||||
| Initial | Monthly | Initial Cap | Cut-off Date Loan / Room: | $163,223 | ||
| Taxes: | $58,012 | $58,012 | N/A | Maturity Date Loan / Room: | $163,223 | |
| Insurance: | $0 | Springing | N/A | Cut-off Date LTV: | 51.8% | |
| Replacement Reserve: | $0 | $485 | $30,000 | Maturity Date LTV: | 51.8% | |
| FF&E Reserve(4): | $0 | $0 | N/A | UW NCF DSCR: | 1.55x | |
| TI/LC: | $0 | $2,422 | $75,000 | UW NOI Debt Yield: | 15.2% | |
| Other Reserve(5): | $6,157,060 | Springing | $60,000(6) | |||
| Sources and Uses | ||||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |||
| Whole Loan(1) | $39,500,000 | 88.8 | % | Loan Payoff | $35,750,387 | 80.3 | % | |
| Borrower Sponsor Equity | 4,997,119 | 11.2 | Upfront Reserves | 6,215,072 | 14.0 | |||
| Closing Costs | 2,531,660 | 5.7 | ||||||
| Total Sources | $44,497,119 | 100.0 | % | Total Uses | $44,497,119 | 100.0 | % | |
| (1) | The Hilton Garden Inn Atlanta Downtown Mortgage Loan (as defined below) is part of the Hilton Garden Inn Atlanta Downtown Whole Loan (as defined below) which is comprised of two pari passu promissory notes with an aggregate original principal balance of $39,500,000. The Financial Information in the chart above is based on the aggregate outstanding principal balance of the Hilton Garden Inn Atlanta Downtown Whole Loan. |
| (2) | The borrower has the option to prepay the Hilton Garden Inn Atlanta Downtown Whole Loan (as defined below) in whole but not in part (i) on or after the payment date occurring in August 2028 without the payment of any prepayment premium or (ii) beginning on the payment date in December 2025 with the payment of a yield maintenance premium. |
| (3) | For full description of Escrows and Reserves, see “Escrows and Reserves” below. |
| (4) | For a description of the FF&E reserve, please see “FF&E Reserve” below. |
| (5) | Other Reserves include an initial seasonality reserve of $60,000, an initial PIP reserve of $5,500,000, and an initial unfunded obligations reserve of $597,060. See “Escrows and Reserves” below. |
| (6) | The Initial Cap of $60,000 is for the seasonality reserve. For a description of the seasonality reserve, please see “Seasonality Reserve” below. |
The Loan. The seventh largest mortgage loan (the “Hilton Garden Inn Atlanta Downtown Mortgage Loan”) is part of a whole loan (the “Hilton Garden Inn Atlanta Downtown Whole Loan”) secured by a first lien mortgage on the borrower’s fee simple interest in a 242-room full-service hospitality property consisting of a hotel condominium unit and four retail condominium units located in Atlanta, Georgia (the “Hilton Garden Inn Atlanta Downtown Property”). The Hilton Garden Inn Atlanta Downtown Whole Loan was originated on October 10, 2023 by BMO and has a five-year term that accrues interest at a fixed rate of 8.39000% per annum. The scheduled maturity date of the Hilton Garden Inn Atlanta Downtown Whole Loan is the payment date that occurs on November 6, 2028. The Hilton Garden Inn Atlanta Downtown Whole Loan will be serviced pursuant to the pooling and servicing agreement for the BMO 2023-5C2 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.
| 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. | ||
| 96 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 7 – Hilton Garden Inn Atlanta Downtown | ||
The table below summarizes the promissory notes that comprise the Hilton Garden Inn Atlanta Downtown Whole Loan.
| Whole Loan Summary | |||||
| Note | Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece | |
| A-1 | $31,500,000 | $31,500,000 | BMO 2023-5C2 | Yes | |
| A-2(1) | $8,000,000 | $8,000,000 | BMO | No | |
| Total | $39,500,000 | $39,500,000 | |||
| (1) | Expected to be contributed to one or more securitizations. |
The Property. The Hilton Garden Inn Atlanta Downtown Property consists of a 15-story, 242-room, full-service hotel and 29,066 square feet of retail and restaurant space located in downtown Atlanta, Georgia. The Hilton Garden Inn Atlanta Downtown Property was originally constructed in 2008 and recently underwent renovations in 2018 and 2019. The Hilton Garden Inn Atlanta Downtown Property is adjacent to Centennial Olympic Park and the Georgia Aquarium. Hartsfield-Jackson Atlanta International Airport is located approximately ten miles south of the subject property down Interstate 75 and Interstate 85. According to the appraisal, the estimated demand segmentation for the Hilton Garden Inn Atlanta Downtown Property consisted of 30.0% group, 60.0% leisure, and 10.0% commercial.
The Hilton Garden Inn Atlanta Downtown Property has 74 standard king, 140 queen, 18 king suite rooms, seven accessible designed queen and 3 accessible designed king rooms. The Hilton Garden Inn Atlanta Downtown Property includes amenities such as the City View Room breakfast restaurant, Dos Bocas restaurant and bar, indoor pool, outdoor pool, business center, fitness center, guest self-laundry, sundry shop, helipad, and 17,725 square feet of meeting and event space. The Hilton Garden Inn Atlanta Downtown Property has 180 parking spaces and connects to a 670-space parking structure. The main entrance to the hotel is located along Baker Street Northwest. The ground floor features the registration desk, pantry and business center as well as a lower level for a restaurant, Dos Bocas, which is accessible just off the lobby area.
The Hilton Garden Inn Atlanta Downtown Property has 29,066 square feet of ground floor and mezzanine retail and restaurant condominium space with 10 leases which accounts for approximately 5.4% of the underwritten gross revenue. The Hilton Garden Inn Atlanta Downtown Property is subject to two condominiums regimes called the “Park Pavilion Master Condominium” and the “Centennial Park West Condominium”. The Park Pavilion Master Condominium has eight total units, and the borrower owns the following five condominium units: the hotel unit (the “Park Pavilion Hotel Unit”), and four retail units (collectively, the “Park Pavilion Retail Units”). The Park Pavilion Hotel Unit and the Park Pavilion Retail Units constitute an undivided 93.5% ownership percentage in the Park Pavilion Master Condominium common elements as set forth in Park Pavilion Master Condominium documents. The Centennial Park West Condominium consist of: (i) four commercial condominium units, which are owned by the borrower and part of the collateral (collectively, the “Centennial Park West Retail Units”) and (ii) 94 residential condominium units, which are not owned by the borrower and are not part of the collateral. The Centennial Park West Retail Units constitute an undivided 10.4% ownership percentage in the Centennial Park West common elements as set forth in the Centennial Park West Condominium documents.
The franchise agreement between the borrower and Hilton Inns, Inc., a Delaware limited liability company (“Hilton”), commenced on March 2, 2006 and expires on September 1, 2028. Among other things, the franchise agreement requires the borrower to pay Hilton, on a monthly basis, a program fee of 4.3% of gross room revenue, and a royalty fee of 5.0% of gross room revenue from year four through the end of the term. The borrower sponsor is currently working with Hilton on the relicensing of the Hilton Garden Inn Atlanta Downtown Property as per a countersigned term sheet from Hilton dated August 28, 2023. The proposed term of the new franchise agreement will be for an additional 20-year term following the current expiration term.
The following table presents certain information relating to the 2022 demand analysis with respect to the Hilton Garden Inn Atlanta Downtown Property based on market segmentation:
| Demand Segmentation(1) | |||||
| Property | Rooms | Group | Leisure | Commercial | |
| Hilton Garden Inn Atlanta Downtown | 242 | 30.0% | 60.0% | 10.0% | |
| (1) | Source: Appraisal. |
| 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. | ||
| 97 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 7 – Hilton Garden Inn Atlanta Downtown | ||
The following tables present certain information relating to the current and historical occupancy, ADR and RevPAR at the Hilton Garden Inn Atlanta Downtown Property and its competitors:
| Historical Occupancy, ADR, RevPAR(1) | |||||||||
| Competitive Set(2) | Hilton Garden Inn Atlanta Downtown | Penetration Factor | |||||||
| Year | Occupancy | ADR | RevPAR | Occupancy | ADR | RevPAR | Occupancy | ADR | RevPAR |
| 2021(3) | 42.0% | $124.17 | $52.12 | 61.6% | $132.10 | $81.34 | 146.7% | 106.4% | 156.1% |
| 2022(3) | 60.6% | $172.64 | $104.70 | 66.7% | $193.17 | $128.92 | 110.1% | 111.9% | 123.1% |
| TTM(4) | 66.8% | $185.74 | $124.07 | 72.4% | $200.05 | $144.87 | 108.4% | 107.7% | 116.8% |
| (1) | Based on data provided by a third-party hospitality research report.. |
| (2) | Competitive Set includes Hyatt Place Atlanta/Downtown, AC Hotel Atlanta Downtown, Hampton Inn Atlanta-Georgia Tech-Downtown, Hampton Inn & Suites Atlanta-Downtown, The American Hotel Atlanta Downtown, a DoubleTree by Hilton, Glenn Hotel, Autograph Collection and Hyatt House Atlanta/Downtown. |
| (3) | 2021 and 2022 values represent the trailing 12-month period ending July 31 for each respective year. |
| (4) | TTM represents the trailing 12-month period ending July 31, 2023. |
Environmental. According to the Phase I environmental assessment dated September 27, 2023, there was no evidence of any recognized environmental conditions at the Hilton Garden Inn Atlanta Downtown Property.
The following table presents certain information relating to the operating history and underwritten cash flows of the Hilton Garden Inn Atlanta Downtown Property:
| Operating History and Underwritten Net Cash Flow | ||||||||
| 2020 | 2021 | 2022 | TTM(1) | Underwritten | Per Room(2) | %(3) | ||
| Occupancy | 50.3% | 64.5% | 70.4% | 73.0% | 73.0% | |||
| ADR | $141.24 | $159.60 | $193.68 | $200.40 | $200.40 | |||
| RevPAR | $71.10 | $102.92 | $136.26 | $146.22 | $146.22 | |||
| Room Revenue | $6,297,357 | $9,091,258 | $12,036,250 | $12,915,183 | $12,915,183 | $53,369 | 63.7 | % |
| Food & Beverage Revenue | 1,887,567 | 3,535,441 | 4,625,838 | 5,551,141 | 5,551,141 | 22,939 | 27.4 | |
| Commercial Revenue(4) | 678,688 | 709,504 | 745,617 | 623,466 | 1,098,977 | 4,541 | 5.4 | |
| Other Revenue(5) | 660,032 | 948,791 | 755,095 | 714,197 | 714,197 | 2,951 | 3.5 | |
| Total Revenue | $9,523,644 | $14,284,994 | $18,162,800 | $19,803,987 | $20,279,498 | $83,800 | 100.0 | % |
| Room Expense | 1,215,614 | 1,898,453 | 2,715,871 | 2,898,308 | 2,898,308 | 11,976 | 22.4 | |
| Food & Beverage Expense | 2,010,778 | 2,591,312 | 3,847,116 | 4,749,966 | 4,749,966 | 19,628 | 85.6 | |
| Other Commercial Expense(6) | 319,457 | 377,098 | 350,396 | 397,168 | 397,168 | 1,641 | 36.1 | |
| Other Departmental Expenses | 350,514 | 427,176 | 321,189 | 326,704 | 326,704 | 1,350 | 45.7 | |
| Departmental Expenses | $3,896,363 | $5,294,039 | $7,234,573 | $8,372,146 | $8,372,146 | $34,596 | 41.3 | % |
| Departmental Profit | $5,627,282 | $8,990,955 | $10,928,227 | $11,431,841 | $11,907,352 | $49,204 | 58.7 | % |
| Management Fee(7) | 266,696 | 414,791 | 550,789 | 618,128 | 645,766 | 2,668 | 3.2 | |
| Marketing and Franchise Fee | 1,081,833 | 1,606,188 | 2,138,250 | 2,294,919 | 2,297,062 | 9,492 | 11.3 | |
| Other Undistributed Expenses(8) | 1,416,746 | 1,740,755 | 2,053,310 | 2,183,637 | 2,183,637 | 9,023 | 10.8 | |
| Total Undistributed Expenses | $2,765,275 | $3,761,734 | $4,742,349 | $5,096,684 | $5,126,465 | $21,184 | 25.3 | % |
| Total Fixed Expenses | $781,180 | $650,630 | $630,973 | $677,946 | $760,323 | $3,142 | 3.7 | % |
| Net Operating Income | $2,080,827 | $4,578,591 | $5,554,905 | $5,657,210 | $6,020,563 | $24,878 | 29.7 | % |
| FF&E | 353,222 | 543,331 | 696,812 | 767,355 | 773,034 | 3,194 | 3.8 | |
| TI/LC | 0 | 0 | 0 | 0 | 29,066 | 120 | 0.1 | |
| Net Cash Flow | $1,727,605 | $4,035,260 | $4,858,093 | $4,889,855 | $5,218,463 | $21,564 | 25.7 | % |
| (1) | TTM represents the trailing 12-month period ending August 31, 2023. |
| (2) | Per Room values are based on 242 rooms. |
| (3) | % column represents percent of Total Revenue except for Room Expense, Food & Beverage Expense, Other Commercial Expense and Other Departmental Expenses which are based on their corresponding revenue line items. |
| (4) | Commercial Revenue includes 29,066 of retail space leased to 10 tenants, the largest of which by underwritten rent include Park 27 (6,379 square feet, 20.3% of underwritten Commercial Revenue) with the lease scheduled to expire on December 31, 2033, Peri Peri Grill (4,829 square feet, 13.6% of underwritten Commercial Revenue) with the lease scheduled to expire on December 31, 2029 and Johnny Rockets (2,179 square feet, 11.3% of underwritten Commercial Revenue) with the lease scheduled to expire on August 31, 2028. |
| (5) | Other Revenue is based on the trailing-twelve month rentals and other income per occupied room. |
| (6) | Other commercial expense includes the retail and restaurant management fees. |
| (7) | Management Fee is based on the hotel management fee equal to 2.50% of Total Revenue and the restaurant management fee equal to 5.0% of Food & Beverage Revenue. |
| (8) | Other Undistributed Expenses consists of property operations and maintenance, general and administrative, and utilities. |
The Market. The Hilton Garden Inn Atlanta Downtown Property is located adjacent to the Georgia Aquarium and Centennial Park in downtown Atlanta, Georgia and is part of the Atlanta metropolitan statistical area (the “Atlanta MSA”). The neighborhood is anchored by
| 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. 7 – Hilton Garden Inn Atlanta Downtown | ||
the Georgia Aquarium, Centennial Olympic Park, and the Georgia World Congress Center with other nearby tourist attractions such as the College Football Hall of Fame, the World of Coca-Cola, Mercedes-Benz Stadium, State Farm Arena, and the Center for Civil and Human Rights. Leading employment sectors in the Atlanta MSA include professional and business services, education and health services, government, retail trade and leisure and hospitality services. Fortune 500 companies in Atlanta include The Home Depot, UPS, The Coca-Cola Company, Delta Air Lines, The Southern Company, SunTrust Bank (now Truist), and NCR Corporation.
The following table presents certain information relating to the primary competition for the Hilton Garden Inn Atlanta Downtown Property:
| Competitive Set(1) | |||||
| Property | Number of Rooms | Year Built | 2022 Occupancy | 2022 ADR | 2022 RevPAR |
| Hilton Garden Inn Atlanta Downtown(2) | 242 | 2008 | 73.0% | $200.40 | $146.22 |
| Hyatt Place Atlanta/Downtown | 95 | 1977 | 65.0% - 70.0% | $165.00 - $175.00 | $105.00 - $115.00 |
| AC Hotel Atlanta Downtown | 255 | 1985 | 60.0% - 65.0% | $175.00 - $185.00 | $105.00 - $115.00 |
| Hampton Inn Atlanta-Georgia Tech-Downtown | 106 | 1997 | 70.0% - 75.0% | $150.00 - $160.00 | $110.00 - $120.00 |
| Hampton Inn & Suites Atlanta-Downtown | 119 | 1999 | 60.0% - 65.0% | $160.00 - $170.00 | $95.00 - $105.00 |
| The American Hotel Atlanta Downtown, a DoubleTree by Hilton | 315 | 1962 | 60.0% - 65.0% | $165.00 - $175.00 | $95.00 - $105.00 |
| Glenn Hotel, Autograph Collection | 110 | 1923 | 65.0% - 70.0% | $205.00 - $215.00 | $130.00 - $140.00 |
| Hyatt House Atlanta/Downtown | 150 | 2015 | 75.0% - 80.0% | $180.00 - $190.00 | $135.00 - $145.00 |
| Total Avg. Competitive Set(3) | 65.0% | $179.13 | $117.15 | ||
| (1) | Source: Appraisal unless otherwise indicated. |
| (2) | Occupancy, ADR and RevPAR are based on the underwriting for the trailing-twelve month period ending August 31, 2023. |
| (3) | Excludes the Hilton Garden Inn Atlanta Downtown Property. |
The Borrower. The borrower is Legacy Pavilion Hotel, LLC, a Georgia limited liability company and single purpose entity with two independent directors in its organizational structure. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Hilton Garden Inn Atlanta Downtown Whole Loan.
The Borrower Sponsor. The borrower sponsor and the non-recourse carveout guarantor is David D. Marvin.
Property Management. The Park Pavilion Hotel Unit portion of the Hilton Garden Inn Atlanta Downtown Property is currently managed by LHP HGI1, LLC, an affiliate of the borrower sponsors. The Centennial Park West Retail Units are currently managed by Legacy Property Group, LLC., an affiliate of the borrower sponsor. The Park Pavilion Retail Units portion of the Hilton Garden Inn Atlanta Downtown Property is managed under an agreement by and between Park Pavilion Master Condominium Association, Inc., and Legacy Property Group, LLC. The restaurant portion of the Hilton Garden Inn Atlanta Downtown Property is currently managed by LRP Pavilion, LLC, an affiliate of the borrower sponsor. The maximum aggregate management fee payable under all of the management agreements and the asset management agreement is 3.2% of gross income from operations at the Hilton Garden Inn Atlanta Downtown Property (“Management Fee Cap”). Any management fees over the Management Fee Cap may only be paid by the borrower out of excess cash flow.
Asset Management. The borrower entered into an asset management agreement with Legacy Property Group, LLC, a borrower sponsor-affiliated management company (“Asset Manager”), pursuant to which Asset Manager is required to provide, among other things, certain property maintenance and repair services and leasing and financing services.
Escrows and Reserves. At origination of the Hilton Garden Inn Atlanta Downtown Whole Loan, the borrower deposited approximately (i) $58,012 into a real estate tax reserve account, (ii) $60,000 into a seasonality reserve account, (iii) $5,500,000 into a PIP reserve account and (iv) $597,060 into an unfunded obligations reserve fund.
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 reasonably estimates will be payable over the next-ensuing 12-month period (initially estimated to be approximately $58,012).
Insurance Reserve – The borrower is required to deposit into an insurance reserve, on a monthly basis, 1/12th of the amount which would 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 Hilton Garden Inn Atlanta Downtown Whole Loan documents. At origination of the Hilton Garden Inn Atlanta Downtown Whole Loan, an acceptable blanket policy was in place.
FF&E Reserve – The borrower is required to deposit into a furniture, fixtures and equipment (“FF&E”) reserve, on a monthly basis, subject to any minimum amount then required by the franchisor under the franchise agreement, (i) up to and including May 6, 2025, an amount equal to the greater of (A) 4.0% of the average gross revenues for the hotel related operations at the Park Pavilion Hotel Unit for the two calendar months immediately preceding such monthly payment date, as reasonably determined by the lender and (B) $100,000, (ii) after May 6, 2025, an amount equal to 4% of the average gross revenues for the hotel related operations at the Park Pavilion Hotel Unit for
| 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. 7 – Hilton Garden Inn Atlanta Downtown | ||
the two calendar months immediately preceding such monthly payment date, as reasonably determined by the lender, and (iii) the amount required by the franchisor on account of FF&E under the franchise agreement.
Replacement Reserve – The borrower is required to deposit into a replacement reserve, on a monthly basis, an amount equal to $485. The borrower will cease monthly deposits when funds on deposit in the replacement reserve are greater than or equal to $30,000.
PIP Reserve – The borrower is required to deposit into a property improvement plan (“PIP”) reserve, (i) $5,500,000 for the scheduled PIP, and (ii) the applicable PIP Deposit (as defined below) (A) in the case of any existing or renewal franchise agreement, prior to the required commencement date of any PIP imposed thereunder and (B) in the case of any new franchise agreement, on or prior to the date such new franchise agreement is executed and delivered.
TI/LC Reserve – The borrower is required to deposit into a rollover reserve, on a monthly basis, $2,422. The borrower will cease monthly deposits when funds on deposit in the rollover reserve are greater than or equal to $75,000.
“PIP Deposit” means, with respect to any PIP, an amount equal to 110% of the costs of the related work that is the subject of such PIP, as estimated by the lender in its reasonable discretion (provided, however, if any costs of the related PIP is inclusive of a 10% contingency, then the deposit related to those such costs will be required to be an amount equal to 100% of the same), excluding (x) the cost of any duplicative of any approved FF&E and (y) in connection with the existing franchise agreement and any renewal, extension or replacement of the existing franchise agreement contemplated by the letter of intent, the amount of outstanding FF&E funds to be collected by the lender attributable to duplicative FF&E through, and including, the May 6, 2025.
Seasonality Reserve – The borrower is required to deposit into a seasonality reserve, (i) on each Seasonality Payment Date (as defined below), an amount equal to $6,000 (“the “Seasonality Reserve Monthly Deposit”). The borrower will not be required to make the Seasonality Reserve Monthly Deposit if at any time the balance of the seasonality reserve funds on deposit in the Seasonality Reserve Account equal or exceeds the $60,000 (the “Seasonality Reserve Threshold”).
“Seasonality Payment Date” means any monthly payment date occurring in February, March, April, May, June, July, August, September, October or November.
Lockbox / Cash Management. The Hilton Garden Inn Atlanta Downtown Whole Loan is structured with a hard lockbox and springing cash management. The borrower is required to deliver direction letters to each of the credit card companies with which borrower has entered into a merchant’s or other credit card agreement directing them to pay to the lender-controlled lockbox account all payments which would otherwise be paid to borrower under the applicable credit card processing agreement. The borrower is also required to deliver direction letters to each commercial tenant directing them to pay to the lender-controlled lockbox account all payments which would otherwise be paid to borrower. The borrower is required to (or cause the property manager to) immediately deposit all revenue generated by the Hilton Garden Inn Atlanta Downtown Property into the lender-controlled lockbox account within five days of receipt. All funds deposited into the lockbox are required to be transferred on each business day to or at the direction of the borrower 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 cash management account under the control of the lender to be applied and disbursed in accordance with the Hilton Garden Inn Atlanta Downtown 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 Hilton Garden Inn Atlanta Downtown Whole Loan documents may be held by the lender in an excess cash flow reserve account as additional collateral for the Hilton Garden Inn Atlanta Downtown Whole Loan.
A ”Trigger Period” means a period of time (A) commencing upon the earliest of (i) the occurrence of an event of default, (ii) the debt service coverage ratio being less than 1.30x; (iii) the occurrence of a Franchise Agreement Trigger Period (as defined below); (iv) the occurrence of a Franchise Renewal Trigger Event (as defined below) and (v) the occurrence of a Seasonality Trigger Period (as defined below); and (B) expiring upon (1) with regard to any Trigger Period commenced in connection with clause (i) above, the cure of such event of default; (2) with regard to any Trigger Period commenced in connection with clause (ii) above, the date that the debt service coverage ratio is equal to or greater than 1.30x for two consecutive calendar quarters; (3) with regard to any Trigger Period commenced in connection with clause (iii) above, a Franchise Agreement Trigger Period ceasing to exist in accordance with the terms hereof; (4) with regard to any Trigger Period commenced in connection with clause (iv) above, the occurrence of a Franchise Renewal Event (as defined below); and (5) with regard to any Trigger Period commenced in connection with clause (v) above, a Seasonality Trigger Period ceasing to exist.
“Franchise Agreement Trigger Period” means a period (A) commencing upon the first to occur of (i) the borrower being in default under the franchise agreement, (ii) the borrower or franchisor giving notice that it is terminating the franchise agreement, (iii) any termination or cancellation of the franchise agreement (including, without limitation, rejection in any bankruptcy or similar insolvency proceeding of franchisor) and/or the franchise agreement expiring or otherwise failing to otherwise be in full force and effect, (iv) any bankruptcy or similar insolvency of franchisor, (v) the Hilton Garden Inn Atlanta Downtown Property failing to be operated, “flagged” and/or branded pursuant to the franchise agreement, (vi) any permit applicable to the franchise agreement ceasing to be in full force in effect and (vii) franchisor giving notice that a PIP is required; and (B) expiring upon (i) with regard to any Franchise Agreement Trigger Period commenced in connection with clause (A)(i), (ii), (iii), (iv), (v) and/or (vi) above, lender’s receipt of evidence of (1) (a) the satisfaction of the Franchise Agreement Cure Conditions (as defined below) or (b) the branding, “flagging” and operation of the Hilton Garden Inn Atlanta Downtown Property pursuant to a replacement qualified franchise agreement and (2) to the extent a PIP is required in connection 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. | ||
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| No. 7 – Hilton Garden Inn Atlanta Downtown | ||
the foregoing, the deposit of the corresponding PIP Deposit; and (ii) with regard to any Franchise Agreement Trigger Period commenced in connection with clause (A)(vii), the deposit of the corresponding PIP Deposit. As of the closing date of the Hilton Garden Inn Atlanta Downtown Whole Loan, a Franchise Agreement Trigger Period existed pursuant to clause (A)(vii) of this definition, and the full amount of the corresponding PIP Deposit ($7.3 million) has not been deposited into the applicable reserve account to end such Franchise Agreement Trigger Period. However, the lender agreed in the Hilton Garden Inn Atlanta Downtown Whole Loan agreement that the commencement of such Franchise Agreement Trigger Period will be suspended through, and including, the payment date occurring in May, 2025.
“Franchise Agreement Cure Event” means (i) the borrower has cured any defaults under the franchise agreement, (ii) borrower and the applicable franchisor have re-affirmed the franchise agreement as being in effect, (iii) the bankruptcy or insolvency proceedings involving the applicable franchisor and/or franchise agreement, such Franchisor is no longer insolvent or subject to any bankruptcy or insolvency proceedings, (iv) the Hilton Garden Inn Atlanta Downtown Property continues to be operated, “flagged” and branded pursuant to the franchise agreement and (v) all permits applicable to the related franchise agreement are in full force and effect.
"Franchise Renewal Event” means (i) the related Franchise Agreement has been extended or a replacement franchise agreement has been entered into for a term expiring no earlier than three years after November 6, 2028, (ii) such extended franchise agreement or replacement franchise agreement, as applicable, is in full force and effect with no defaults thereunder and (iii) to the extent a PIP is required, the corresponding PIP Deposit has been deposited.
A ”Franchise Renewal Trigger Event” means an event which will have occurred if a Franchise Renewal Event does not occur on or before the date which is 12 months prior to the expiration of the then applicable term of the franchise agreement.
“Seasonality Trigger Period” means a period (A) commencing upon the borrower’s failure to pay any Seasonality Reserve Monthly Deposit when the funds in the seasonality reserve are less than the Seasonality Reserve Threshold; and (B) expiring upon when funds in the seasonality reserve are equal to or greater than the Seasonality Reserve Threshold.
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. | ||
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| No. 8 – Scottsdale Gilbert Retail 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. | ||
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| No. 8 – Scottsdale Gilbert Retail 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. | ||
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| No. 8 – Scottsdale Gilbert Retail 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. | ||
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| No. 8 – Scottsdale Gilbert Retail Portfolio | ||
| Mortgage Loan Information | Property Information | |||
| Mortgage Loan Seller: | CREFI | Single Asset / Portfolio: | Portfolio | |
| Original Principal Balance(1): | $30,000,000 | Title: | Fee | |
| Cut-off Date Principal Balance(1): | $30,000,000 | Property Type – Subtype: | Retail – Anchored | |
| % of IPB: | 3.9% | Net Rentable Area (SF): | 432,068 | |
| Loan Purpose: | Refinance | Location(4): | Various, AZ | |
| Borrower: | Gilbert Gateway Towne Center Holdings LLC and Imagine Scottsdale Towne Center, LLC | Year Built / Renovated(4): | Various / Various | |
| Borrower Sponsor: | Karim Kanjiyani, Saleem Kanjiyani and Yasmin Daredia | Occupancy(5): | 97.3% | |
| Interest Rate: | 7.85000% | Occupancy Date: | 7/1/2023 | |
| Note Date: | 10/4/2023 | 4th Most Recent NOI (As of)(6): | NAV | |
| Maturity Date: | 10/6/2028 | 3rd Most Recent NOI (As of)(6): | NAV | |
| Interest-only Period: | 60 months | 2nd Most Recent NOI (As of): | $7,025,360 (12/31/2022) | |
| Original Term: | 60 months | Most Recent NOI (As of)(7): | $7,243,383 (TTM 6/30/2023) | |
| Original Amortization Term: | None | UW Economic Occupancy: | 95.0% | |
| Amortization Type: | Interest Only | UW Revenues: | $11,841,358 | |
| Call Protection: | L(25),D(28),O(7) | UW Expenses: | $3,087,027 | |
| Lockbox / Cash Management: | Hard / Springing | UW NOI(7): | $8,754,331 | |
| Additional Debt(1): | Yes | UW NCF: | $8,365,470 | |
| Additional Debt Balance(1): | $51,000,000 / $7,000,000 | Appraised Value / Per SF(8): | $143,450,000 / $332 | |
| Additional Debt Type(1): | Pari Passu / Mezzanine | Appraisal Date(8): | Various | |
| Escrows and Reserves(2) | Financial Information(1) | ||||||
| Initial | Monthly | Initial Cap | Whole Loan | Total Debt(8) | |||
| Taxes: | $222,032 | $74,011 | N/A | Cut-off Date Loan / SF: | $187 | $204 | |
| Insurance: | $92,009 | $11,501 | N/A | Maturity Date Loan / SF: | $187 | $204 | |
| Replacement Reserves: | $0 | $5,401 | $64,810 | Cut-off Date LTV: | 56.5% | 61.3% | |
| TI/LC: | $1,250,000 | Springing | $648,102 | Maturity Date LTV: | 56.5% | 61.3% | |
| Deferred Maintenance: | $5,688 | N/A | N/A | UW NCF DSCR: | 1.30x | 1.14x | |
| Other(3): | $3,326,843 | N/A | N/A | UW NOI Debt Yield: | 10.8% | 9.9% | |
| Sources and Uses | ||||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |||
| Whole Loan(1) | $81,000,000 | 92.0 | % | Existing Loan Payoff | $56,431,784 | 64.1 | % | |
| Mezzanine Loan(9) | 7,000,000 | 8.0 | Borrower Sponsor Equity | 23,504,956 | 26.7 | |||
| Upfront Reserves | 4,896,572 | 5.6 | ||||||
| Closing Costs | 3,166,688 | 3.6 | ||||||
| Total Sources | $88,000,000 | 100.0 | % | Total Uses | $88,000,000 | 100.0 | % | |
| (1) | The Scottsdale Gilbert Retail Portfolio Mortgage Loan (as defined below) is part of the Scottsdale Gilbert Retail Portfolio Whole Loan (as defined below) which is comprised of two pari passu promissory notes with an aggregate original principal balance of $81,000,000. The Scottsdale Gilbert Retail Portfolio Whole Loan was originated by Citi Real Estate Funding Inc. (“CREFI”). The Financial Information in the chart above is based on the aggregate outstanding principal balance as of the Cut-off Date of the Scottsdale Gilbert Retail Portfolio Whole Loan and the Scottsdale Gilbert Retail Portfolio Total Debt (as defined below). |
| (2) | See “Escrows and Reserves” below. |
| (3) | Other initial reserves include (i) an unfunded obligations reserve of $2,767,600, (ii) a free and gap rent reserve of $466,613 and (iii) a tenant improvement work reserve of $92,630. |
| (4) | See the “Portfolio Summary” chart below. |
| (5) | Occupancy includes Mountainside Fitness which has not yet taken occupancy and has a lease that is expected to commence on April 1, 2024 and The Great Greek Mediterranean and Einstein Bros Bagels which have not yet taken occupancy and have leases that are expected to commence on December 1, 2023. Gap rent for the tenants was reserved upfront. |
| (6) | 4th Most Recent and 3rd Most Recent NOI are not available because the sponsor acquired the Scottsdale Gilbert Retail Portfolio Properties (as defined below) in 2021. |
| (7) | The increase from Most Recent NOI to UW NOI is primarily attributable to seven new leases commencing in 2023/2024 that account for $1,555,535 of underwritten base rent. This includes leases executed by Mountainside Fitness, The Great Greek Mediterranean and Einstein Bros Bagels, which have not yet taken occupancy. |
| (8) | The Appraised Value of $143,450,000 represents the prospective market value upon stabilization of both the Gilbert Gateway Towne Center Property and the Scottsdale Towne Center Property based on the assumptions that, with respect to the Gilbert Gateway Towne Center Property, Einstein Bros Bagels and The Great Greek Mediterranean complete tenant improvements by December 2023 and begin rent payments January 1, 2024 pursuant to such tenants’ respective leases and, with respect to the Scottsdale Town Center Property, all leasing and tenant improvement costs are paid for Mountainside Fitness and operations are stabilized by November 1, 2024. Based on the "as-is" value of $133,590,000, the Cut-off Date LTV and Maturity Date LTV are 60.6%. |
| 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. 8 – Scottsdale Gilbert Retail Portfolio | ||
| (9) | Within twenty (20) days following the origination of the Scottsdale Gilbert Retail Portfolio Whole Loan, the borrowers have the right to obtain a mezzanine loan in the amount of $7,000,000 from QFP II, LP (the “Scottsdale Gilbert Retail Portfolio Mezzanine Loan” and together with the Scottsdale Gilbert Retail Portfolio Whole Loan, the “Scottsdale Gilbert Retail Portfolio Total Debt”). The Scottsdale Gilbert Retail Portfolio Mezzanine Loan is anticipated to accrue interest at a rate of 13.0000% per annum to be paid as part of each monthly debt service payment amount. The Scottsdale Gilbert Retail Portfolio Mezzanine Loan is anticipated to have a final maturity date of October 6, 2028. The Scottsdale Gilbert Retail Portfolio Whole Loan documents require that an intercreditor agreement between the lender under the Scottsdale Gilbert Retail Portfolio Whole Loan and the lender under the Scottsdale Gilbert Retail Portfolio Mezzanine Loan be delivered simultaneously with the origination of the Scottsdale Gilbert Retail Portfolio Mezzanine Loan. See “Mezzanine Debt” below. |
The Loan. The eighth largest mortgage loan (the “Scottsdale Gilbert Retail Portfolio Mortgage Loan”) is part of a whole loan (the “Scottsdale Gilbert Retail Portfolio Whole Loan”) secured by the borrowers’ fee interests in two anchored retail properties totaling 432,068 square feet located in Arizona (the “Scottsdale Gilbert Retail Portfolio Properties”). The Scottsdale Gilbert Retail Portfolio Whole Loan is comprised of two pari passu notes, with an aggregate outstanding principal balance as of the Cut-off Date of $81,000,000. The Scottsdale Gilbert Retail Portfolio Whole Loan was originated on October 4, 2023 by CREFI and accrues interest at a fixed rate of 7.85000% per annum. The Scottsdale Gilbert Retail Portfolio Whole Loan has an initial term of five-years and is interest-only for the full term. The scheduled maturity date of the Scottsdale Gilbert Retail Portfolio Whole Loan is the payment date that occurs on October 6, 2028. The Scottsdale Gilbert Retail Portfolio 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 note is currently held by CREFI and are expected to be contributed to one or more future securitization trust(s). The Scottsdale Gilbert Retail Portfolio Total Debt consists of the Scottsdale Gilbert Retail Portfolio Whole Loan and the Scottsdale Gilbert Retail Portfolio Mezzanine Loan. For additional information, see “Mezzanine Debt” below.
The table below summarizes the promissory notes that comprise the Scottsdale Gilbert Retail Portfolio Whole Loan. The relationship between the holders of the Scottsdale Gilbert Retail Portfolio 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 | $51,000,000 | $51,000,000 | CREFI(1) | Yes |
| A-2 | $30,000,000 | $30,000,000 | BMO 2023-5C2 | No |
| Whole Loan | $81,000,000 | $81,000,000 | ||
| (1) | Expected to be contributed to one or more future securitization trusts. |
The Properties. The Scottsdale Gilbert Retail Portfolio Properties are comprised of a 263,978 square foot anchored retail property located at what is commonly known as 4684-5114 South Power Road in Gilbert, Arizona (the “Gilbert Gateway Towne Center Property”) and a 168,090 square foot anchored retail property located at 15454-15784 North Frank Lloyd Wright Boulevard in Scottsdale, Arizona (the “Scottsdale Towne Center Property” and together with the Gilbert Gateway Towne Center Property, the Scottsdale Gilbert Retail Portfolio Properties).
The following table presents certain information relating to the Scottsdale Gilbert Retail Portfolio Properties:
| Portfolio Summary | |||||||||
| Property Name | City, State | Year Built / Renovated | Sq. Ft.(1) | Occupancy(1) | Allocated Whole Loan Cut-off Date Balance | % of Allocated Whole Loan Cut-off Date Balance | Appraised Value(2)(3) | U/W NOI(1) | % of U/W NOI |
| Gilbert Gateway Towne Center | Gilbert, AZ | 2005 / 2010 | 263,978 | 96.0% | $46,500,000 | 57.4% | $80,410,000 | $5,146,840 | 58.8% |
| Scottsdale Towne Center | Scottsdale, AZ | 1995 / NAP | 168,090 | 99.2% | 34,500,000 | 42.6 | 63,040,000 | 3,607,491 | 41.2 |
| Total | 432,068 | 97.3% | $81,000,000 | 100.0% | $143,450,000 | $8,754,331 | 100.0% | ||
| (1) | Based on the underwritten rent rolls dated July 1, 2023. |
| (2) | Source: Appraisals. |
| (3) | The Appraised Value of $143,450,000 represents the prospective market value upon stabilization of both the Gilbert Gateway Towne Center Property and the Scottsdale Towne Center Property based on the assumptions that, with respect to the Gilbert Gateway Towne Center Property, Einstein Bros Bagels and The Great Greek Mediterranean complete tenant improvements by December 2023 and begin rent payments January 1, 2024 pursuant to such tenants’ respective leases and, with respect to the Scottsdale Town Center Property, all leasing and tenant improvement costs are paid for Mountainside Fitness and operations are stabilized by November 1, 2024. Based on the "as-is" value of $133,590,000, the Cut-off Date LTV and Maturity Date LTV are 60.6%. |
Gilbert Gateway Towne Center
The Gilbert Gateway Towne Center Property is a 263,978 square foot anchored retail center located at what is commonly known as 4684-5114 South Power Road in Gilbert, Arizona. The Gilbert Gateway Towne Center was built in 2005, renovated in 2010, and is situated on an approximately 35.5-acre site that contains 1,355 parking spaces, resulting in a parking ratio of approximately 5.13 spaces per 1,000 square feet. The Gilbert Gateway Towne Center Property was 96.0% occupied by 44 unique tenants as of July 1, 2023. The largest tenants at the Gilbert Gateway Towne Center Property are Ross Dress for Less, Inc., Mega Furniture and Michaels.
| 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. 8 – Scottsdale Gilbert Retail Portfolio | ||
Scottsdale Towne Center
The Scottsdale Towne Center Property is a 168,090 square foot anchored retail center located at 15454-15784 North Frank Lloyd Wright Boulevard in Scottsdale, Arizona. The Scottsdale Towne Center was built in 1995 and is situated on an approximately 16.7-acre site that contains 840 parking spaces, resulting in a parking ratio of approximately 5.00 spaces per 1,000 square feet. The Scottsdale Towne Center Property was 99.2% occupied by 29 unique tenants as of July 1, 2023. The largest tenants at the Scottsdale Towne Center Property are Mountainside Fitness, TJ Maxx and Ross Dress for Less, Inc.
Major Tenants. The three largest tenants based on underwritten base rent are Mountainside Fitness, Ross Dress for Less, Inc. and TJ Maxx.
Mountainside Fitness (50,320 square feet; 11.6% of net rentable area (“NRA”); 12.2% of underwritten base rent). Mountainside Fitness is an Arizona-based fitness center with 20 locations. Their gyms feature amenities that include group exercise classes, saunas, steam rooms, cycle studios, and premium workout equipment. Their staff also offers personal training and stretch therapy services. Mountainside Fitness has not yet taken occupancy at the Scottsdale Towne Center Property. The Mountainside Fitness lease is expected to commence in April 2024 and have a lease term through December 2038 followed by three, five-year renewal options and no termination options.
Ross Dress for Less, Inc. (“Ross”) (56,558 square feet; 13.1% of NRA; 8.1% of underwritten base rent). Founded in 1982, Ross is an off-price apparel and fashion chain in the United States. Ross has 1,722 locations across 41 states, the District of Columbia and Guam. Ross also operates 339 dd’s DISCOUNTS stores in 22 states. Ross has been a tenant at both the Gilbert Gateway Towne Center Property and the Scottsdale Towne Center Property since they were built in 2005 and 1995, respectively. Ross has a current lease term at the Gilbert Gateway Towne Center Property through January 2026 followed by one, five-year renewal option and no termination options. Ross also has a current lease term at the Scottsdale Towne Center Property through January 2032 followed by two, five-year renewal options and no termination options.
TJ Maxx (31,000 square feet; 7.2% of NRA; 4.4% of underwritten base rent). Founded in 1976, TJ Maxx is an American department store chain that specializes in selling off-priced goods. TJ Maxx operates nearly 1,300 locations across the United States. TJ Maxx has been a tenant at the Scottsdale Towne Center Property since September 1995 and has a current lease term through January 2026 followed by two, five-year extension options and no termination options.
The following table presents certain information relating to the historical occupancy of the Scottsdale Gilbert Retail Portfolio Properties:
| Historical and Current Occupancy(1) | |||
| 2020 | 2021 | 2022 | Current(2) |
| NAV | NAV | 92.1% | 97.3% |
| (1) | Historical Occupancies are not available because the borrower sponsor acquired the Scottsdale Gilbert Retail Portfolio in 2021. |
| (2) | Based on the underwritten rent roll dated July 1, 2023. |
| 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. 8 – Scottsdale Gilbert Retail Portfolio | ||
The following table presents certain information relating to the major tenants (of which, certain tenants may have co-tenancy provisions) at the Scottsdale Gilbert Retail Portfolio 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 | UW Base Rent | % of Total UW Base Rent | Lease Expiration Date | ||
| Mountainside Fitness(3) | Scottsdale Towne Center | NR/NR/NR | 50,320 | 11.6 | % | $21.15 | $1,064,268 | 12.2 | % | 12/31/2038 |
| Ross Dress for Less, Inc.(4) | Various | A2/BBB+/NR | 56,558 | 13.1 | $12.50 | 706,999 | 8.1 | Various | ||
| TJ Maxx | Scottsdale Towne Center | A2/A/NR | 31,000 | 7.2 | $12.50 | 387,500 | 4.4 | 1/31/2026 | ||
| Mega Furniture(5) | Gilbert Gateway Towne Center | NR/NR/NR | 28,428 | 6.6 | $12.00 | 341,136 | 3.9 | 5/31/2032 | ||
| Michaels | Gilbert Gateway Towne Center | NR/NR/NR | 23,690 | 5.5 | $13.50 | 319,815 | 3.7 | 3/31/2025 | ||
| Petsmart | Gilbert Gateway Towne Center | B1/B+/NR | 19,107 | 4.4 | $16.40 | 313,355 | 3.6 | 1/31/2026 | ||
| Cost Plus | Gilbert Gateway Towne Center | NR/NR/NR | 18,300 | 4.2 | $12.00 | 219,600 | 2.5 | 1/31/2026 | ||
| Bank Of America | Gilbert Gateway Towne Center | A1/A-/NR | 5,000 | 1.2 | $43.55 | 217,764 | 2.5 | 10/21/2024 | ||
| Walk-On Sports Bistreaux | Gilbert Gateway Towne Center | NR/NR/NR | 8,000 | 1.9 | $25.00 | 200,000 | 2.3 | 3/31/2037 | ||
| Texas Roadhouse | Gilbert Gateway Towne Center | NR/NR/NR | 8,000 | 1.9 | $22.46 | 179,685 | 2.1 | 7/31/2028 | ||
| Largest Tenants | 248,403 | 57.5 | % | $15.90 | $3,950,122 | 45.2 | % | |||
| Remaining Tenants(6) | 171,927 | 39.8 | $27.89 | 4,795,374 | 54.8 | |||||
| Total Occupied | 420,330 | 97.3 | % | $20.81 | $8,745,495 | 100.0 | % | |||
| Vacant Space | 11,738 | 2.7 | ||||||||
| Total / Wtd. Avg. | 432,068 | 100.0 | % | |||||||
| (1) | Based on the underwritten rent roll dated July 1, 2023. See “Description of the Mortgage Pool—Lease Expirations and Terminations—Terminations” in the Preliminary Prospectus for a description of co-tenancy provisions applicable to TJ Maxx, Ross Dress for Less, Inc., Mega Furniture, Michaels, Petsmart and Cost Plus. Other tenants also have co-tenancy provisions. |
| (2) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
| (3) | Mountainside Fitness has not yet taken occupancy but is expected to in April 2024. |
| (4) | Ross Dress for Less, Inc. occupies 29,788 square feet of space at the Gilbert Gateway Towne Center Property with a lease expiration of January 2026 and 26,770 square feet of space at the Scottsdale Towne Center Property with a lease expiration of January 2032 |
| (5) | Mega Furniture has the one-time right to terminate its lease within 180 days after May 2026 in the event the tenant did not equal or exceed $4,000,000 in gross sales between June 2024 and May 2025 with the payment of a $100,000 termination fee to the landlord. |
| (6) | The Great Greek Mediterranean (2,400 square feet; 0.6% of NRA; 1.0% of underwritten rent) and Einstein Bros Bagels (1,500 square feet; 0.3% of NRA; 0.7% of underwritten rent) have not yet taken occupancy at the Gilbert Gateway Property and are expected to do so in December 2023. |
| 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 lease rollover schedule at the Scottsdale Gilbert Retail Portfolio Properties:
| Lease Rollover Schedule(1)(2) | |||||||||
| 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 | 0 | 11,738 | 2.7% | NAP | NAP | 11,738 | 2.7% | NAP | NAP |
| 2023 | 2 | 3,000 | 0.7 | 95,293 | 1.1% | 14,738 | 3.4% | $95,293 | 1.1% |
| 2024 | 6 | 19,024 | 4.4 | 526,607 | 6.0 | 33,762 | 7.8% | $621,900 | 7.1% |
| 2025 | 20 | 76,524 | 17.7 | 1,801,295 | 20.6 | 110,286 | 25.5% | $2,423,195 | 27.7% |
| 2026 | 16 | 135,368 | 31.3 | 2,319,962 | 26.5 | 245,654 | 56.9% | $4,743,157 | 54.2% |
| 2027 | 3 | 5,400 | 1.2 | 162,396 | 1.9 | 251,054 | 58.1% | $4,905,553 | 56.1% |
| 2028 | 8 | 22,148 | 5.1 | 635,031 | 7.3 | 273,202 | 63.2% | $5,540,584 | 63.4% |
| 2029 | 1 | 3,300 | 0.8 | 80,522 | 0.9 | 276,502 | 64.0% | $5,621,107 | 64.3% |
| 2030 | 3 | 5,167 | 1.2 | 156,249 | 1.8 | 281,669 | 65.2% | $5,777,356 | 66.1% |
| 2031 | 3 | 10,828 | 2.5 | 215,971 | 2.5 | 292,497 | 67.7% | $5,993,327 | 68.5% |
| 2032 | 4 | 65,151 | 15.1 | 958,950 | 11.0 | 357,648 | 82.8% | $6,952,277 | 79.5% |
| 2033 | 3 | 7,700 | 1.8 | 281,950 | 3.2 | 365,348 | 84.6% | $7,234,227 | 82.7% |
| 2034 & Beyond | 4 | 66,720 | 15.4 | 1,511,268 | 17.3 | 432,068 | 100.0% | $8,745,495 | 100.0% |
| Total | 73 | 432,068 | 100.0% | $8,745,495 | 100.0% | ||||
| (1) | Based on the underwritten rent roll dated July 1, 2023. |
| (2) | Certain tenants may have termination options that are exercisable prior to the originally stated expiration date of the subject lease and that are not considered in the Lease Rollover 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. | ||
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| No. 8 – Scottsdale Gilbert Retail Portfolio | ||
The following table presents certain information relating to the underwritten cash flows of the Scottsdale Gilbert Retail Portfolio Properties:
| Operating History and Underwriting Net Cash Flow(1) | |||||||
| 2022 | T12 June 2023(2)(3) | Underwritten(2) | Per Square Foot | %(4) | |||
| In Place Rent(5) | $6,758,508 | $7,163,796 | $8,654,496 | $20.03 | 70.6 | % | |
| Commercial Rent Steps(6) | 0 | 0 | 90,999 | 0.21 | 0.7 | ||
| Potential Income from Vacant Space | 0 | 0 | 392,298 | 0.91 | 3.2 | ||
| Gross Potential Rent | $6,758,508 | $7,163,796 | $9,137,793 | $21.15 | 74.5 | % | |
| Total Reimbursements | 2,756,510 | 2,900,781 | 3,126,967 | 7.24 | 25.5 | ||
| Total Gross Income | $9,515,018 | $10,064,576 | $12,264,760 | $28.39 | 100.0 | % | |
| Other Income(7) | 147,817 | 192,153 | 189,836 | 0.44 | 1.5 | ||
| (Vacancy / Credit Loss) | 0 | 0 | (613,238) | (1.42) | (5.0 | ) | |
| Effective Gross Income | $9,662,834 | $10,256,730 | 11,841,358 | $27.41 | 96.5 | % | |
| Management Fee | 271,445 | 290,585 | 355,241 | 0.82 | 3.0 | ||
| Real Estate Taxes | 668,656 | 932,804 | 935,400 | 2.16 | 7.9 | ||
| Insurance | 70,026 | 125,014 | 131,442 | 0.30 | 1.1 | ||
| Other Expenses(8) | 1,627,348 | 1,664,944 | 1,664,944 | 3.85 | 14.1 | ||
| Total Expenses | $2,637,475 | $3,013,347 | $3,087,027 | $7.14 | 26.1 | % | |
| Net Operating Income | $7,025,360 | $7,243,383 | $8,754,331 | $20.26 | 73.9 | % | |
| Capital Expenditures | 0 | 0 | 64,810 | 0.15 | 0.5 | ||
| TI / LC | 0 | 0 | 324,051 | 0.75 | 2.7 | ||
| Net Cash Flow | $7,025,360 | $7,243,383 | $8,365,470 | $19.36 | 70.6 | % | |
| (1) | Historical Financial Information is not available because the borrower sponsor acquired the Scottsdale Gilbert Retail Portfolio in 2021. |
| (2) | The increase from Most Recent NOI to UW NOI is primarily attributable to seven new leases commencing in 2023/2024 that account for $1,555,535 of underwritten base rent. This includes leases executed by Mountainside Fitness, The Great Greek Mediterranean and Einstein Bros Bagels, which have not yet taken occupancy. |
| (3) | T12 June 2023 reflects the trailing 12-month period ending June 30, 2023. |
| (4) | % column represents percent of Total Gross Income for all revenue lines and represents percent of Effective Gross Income for the remainder of fields. |
| (5) | In Place Base Rent includes rent attributed to Mountainside Fitness which is scheduled to take occupancy in April 2024, The Great Greek Mediterranean which is expected to take occupancy in December 2023, and Einstein Bros Bagels which is expected to take occupancy December 2023. Gap rent for the tenants was reserved upfront. |
| (6) | Underwritten Contractual Rent Steps include straight line rent of $34,144 and contractual rent steps through September 2024 totaling $56,855. |
| (7) | Other Income includes signage, advertising and percentage rent attributable to certain tenants. |
| (8) | Other Expenses include CAM Expenses and general and administrative expenses. |
Environmental. According to the Phase I environmental reports, dated July 25, 2023, there was no evidence of any recognized environmental conditions at the Scottsdale Gilbert Retail Portfolio Properties.
The Market. The Scottsdale Gilbert Retail Portfolio Properties consist of two anchored retail centers located in Gilbert, Arizona and Scottsdale, Arizona within the Phoenix MSA. According to the appraisal, as of the second quarter of 2023, the Phoenix MSA had inventory of 240,858,811, a vacancy rate of 4.7% and average asking rent of $17.33 per square foot.
The Gilbert Gateway Towne Center is located at what is commonly known as 4684-5114 South Power Road in Gilbert, Arizona and is within the Gilbert Retail Submarket of the Phoenix MSA. According to the appraisal, as of the second quarter of 2023, the Gilbert Retail Submarket had inventory of 17,127,133, a vacancy rate of 2.9% and average asking rent of $20.78 per square foot.
The Scottsdale Towne Center is located at 15454-15784 North Frank Lloyd Wright Boulevard in Scottsdale, Arizona and is within the North Scottsdale Retail Submarket of the Phoenix MSA. According to the appraisal, as of the second quarter of 2023, the North Scottsdale Retail Submarket had inventory of 13,967,906, a vacancy rate of 3.9% and average asking rent of $23.42 per square foot.
The following tables presents certain information relating to the demographics of the Scottsdale Gilbert Retail Portfolio Properties:
| Demographics Summary(1) | ||||||||
| Property Name | City, State | Allocated Whole Loan Cut-off Date Balance | 1-mile Population | 3-mile Population | 5-mile Population | 1-mile Avg Household Income | 3-mile Avg Household Income | 5-mile Avg Household Income |
| Gilbert Gateway Towne Center | Gilbert, AZ | $46,500,000 | 8,593 | 83,983 | 260,874 | $119,319 | $141,550 | $136,790 |
| Scottsdale Towne Center | Scottsdale, AZ | 34,500,000 | 8,004 | 67,623 | 155,533 | $119,554 | $168,940 | $172,514 |
| Total / Wtd. Avg(2) | $81,000,000 | 8,342 | 77,015 | 216,007 | $119,419 | $153,216 | $152,006 | |
| (1) | Source: Appraisals. |
| (2) | Total / Wtd. Avg is based on the allocated whole loan amount of each Scottsdale Gilbert Retail Portfolio 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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| No. 8 – Scottsdale Gilbert Retail Portfolio | ||
The Borrowers. The borrowers are Gilbert Gateway Towne Center Holdings LLC and Imagine Scottsdale Towne Center, LLC, each a Delaware limited liability company and single purpose entity having at least one independent director in its organizational structure. Legal counsel to the borrowers delivered a non-consolidation opinion in connection with the origination of the Scottsdale Gilbert Retail Portfolio Whole Loan.
The Borrower Sponsors. The borrowers’ sponsors and non-recourse carveout guarantors are Karim Kanjiyani, Saleem Kanjiyani, and Yasmin Daredia. Karim Kanjiyani and Saleem Kanjiyani are brothers, and each of the three sponsors is a real estate investor with approximately 25 years of experience in acquiring, repositioning, and operating anchored shopping centers.
Property Management. The Scottsdale Gilbert Retail Portfolio Properties are managed by Vestar Properties, Inc., a third-party property management company.
Escrows and Reserves. At origination of the Scottsdale Gilbert Retail Portfolio Whole Loan, the borrowers deposited approximately (i) $222,032 into a reserve account for real estate taxes, (ii) $92,009 into a reserve account for insurance premiums, (iii) $1,250,000 into a reserve account for tenant improvements and leasing commissions, (iv) $2,767,600 into a reserve account for unfunded obligations, (v) $466,613 into a reserve account for free and gap rent, (vi) $92,630 into a reserve account for outstanding tenant improvement work and (vii) $5,688 into a deferred maintenance account.
Tax Reserve – The borrowers are required to deposit into a real estate tax reserve, on a monthly basis, 1/12 of the taxes that the lender estimates will be payable over the next-ensuing 12-month period (initially estimated to be approximately $74,011) in each case, taking into account the amount payable by the applicable tenant that satisfies the Reserve Waiver Conditions. “Reserve Waiver Conditions” means each of the following: (i) no Trigger Period (as defined below) has occurred and is continuing, (ii) the applicable lease is in full force and effect with no defaults thereunder, (iii) the applicable premises leased under the applicable lease comprises of the entire tax parcel and the tenant under such lease is obligated to pay the entire tax bill for such tax parcel (iv) the applicable tenant continues to make the payments and perform the obligations required under the applicable lease, in each case, relating to the obligations and liabilities for which the real estate tax account was established (directly to the applicable taxing authority) and the borrowers deliver to the lender evidence of the same by no later than the dates required under the Scottsdale Gilbert Retail Portfolio Whole Loan documents or the date the same were due, as applicable.
Insurance Reserve – 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 (initially estimated to be approximately $11,501).
Replacement Reserve – On each monthly payment date, the borrowers are required to deposit $5,401 into a replacement reserve, capped at $64,810.
TI / LC Reserve – On each monthly payment date beginning on the monthly payment date occurring in November 2024, the borrowers are required to deposit approximately $27,004 into a TI / LC reserve, subject to a cap of $648,102.
Lockbox / Cash Management. The Scottsdale Gilbert Retail Portfolio Whole Loan is structured with a hard lockbox and springing cash management. Upon the origination of the Scottsdale Gilbert Retail Portfolio Whole Loan, the borrowers were required to deliver a notice to each tenant directing them to remit all payments under the applicable lease directly to the lender-controlled lockbox account. All revenue received by the borrowers, or the property manager, is required to be deposited in the lockbox account immediately following receipt. All funds deposited into the lockbox are required to be transferred on each business day to or at the direction of the borrowers unless a Trigger Period exists and the lender elects (in its sole and absolute discretion) to deliver a restricted account notice, whereby the lender instructs the institution maintaining the lockbox account to transfer all funds on deposit in the lockbox account on each business day to a lender-controlled cash management account. Upon the occurrence and during the continuance of a Trigger Period, if lender elects to deliver a restricted account notice, 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 Scottsdale Gilbert Retail Portfolio Whole Loan documents, and all excess cash flow funds remaining in the cash management account after the application of such funds (i) to the extent that a Trigger Period has occurred and is continuing (other than due solely to the existence of a Mezzanine Loan Trigger Period), may be held by the lender in an excess cash flow reserve account as additional collateral for the Scottsdale Gilbert Retail Portfolio Whole Loan and (ii) to the extent that a Trigger Period due solely to the existence of a Mezzanine Loan Trigger Period has occurred and is continuing, be deposited into a reserve account for the payment of amounts owed under the Scottsdale Gilbert Retail Portfolio Mezzanine Loan agreement. 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; provided, however, that any excess cash flow required to satisfy the Specified Tenant excess cash flow condition (if applicable) will be retained by the lender in the excess cash flow account until such time as the applicable Specified Tenant stabilization conditions have been satisfied.
A “Trigger Period” means a period (A) commencing upon the earliest of (i) the occurrence and continuance of an event of default, (ii) the debt service coverage ratio on the Scottsdale Gilbert Retail Portfolio Total Loan being less than 1.10x, (iii) the occurrence of a Specified Tenant Trigger Period (as defined below), and (iv) the occurrence of a Mezzanine Loan Trigger Period (as defined below) 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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(B) expiring upon (w) with regard to clause (i) above, the cure (if applicable) of such event of default, (x) with regard to clause (ii) above, the date that the debt service coverage ratio is equal to or greater than 1.15x for two consecutive calendar quarters, (y) with regard to clause (iii) above, a Specified Tenant Trigger Period ceasing to exist, and (z) in regards to clause (iv) above, a Mezzanine Loan Trigger Period ceasing to exist. Notwithstanding the foregoing, in the event of a Trigger Period due solely to a DSCR Cash Sweep Trigger Event (as defined below), such DSCR Cash Sweep Trigger Event will be conditionally waived if, within five days of the start of such Trigger Period, the borrowers post cash or a letter of credit acceptable to the lender in an amount that would need to be added to the underwritten net cash flow in order to achieve a debt service coverage ratio of 1.15x. A “DSCR Cash Sweep Trigger Event” means any date on which the debt service coverage ratio is less than 1.10x.
A “Specified Tenant” means as applicable, (i) Mega Furniture, (ii) Mountainside Fitness Centers of Scottsdale Towne Center, L.L.C., (iii) any other lessee(s) of the Specified Tenant space (or any portion thereof) and (iv) any guarantor(s) of the applicable related Specified Tenant lease(s) including, without limitation, Mountainside Fitness Acquisitions, LLC, Saleem Kanjiyani, Karim Kanjiyani and Yasmin Daredia.
A “Specified Tenant Trigger Period” means a period (A) commencing upon the first to occur of (i) Specified Tenant being in default under the applicable Specified Tenant lease beyond any applicable notice and cure periods, (ii) Specified Tenant failing to be in actual, physical possession of the Specified Tenant space (or applicable portion thereof), (iii) Specified Tenant failing to be open for business during customary hours for ten consecutive business days and/or “going dark” in the Specified Tenant space (or applicable portion thereof), other than in connection with a permitted go dark event, (iv) Specified Tenant giving notice that it is terminating its lease for all or any portion of the Specified Tenant space (or applicable portion thereof), (v) any termination or cancellation of any Specified Tenant lease (including, without limitation, rejection in any bankruptcy or similar insolvency proceeding) and/or any Specified Tenant lease failing to otherwise be in full force and effect, (vi) any bankruptcy or similar insolvency of Specified Tenant not vacated or dismissed within sixty days, and (vii) Specified Tenant failing to extend or renew the applicable Specified Tenant lease for the applicable Specified Tenant renewal term on or prior to the earlier to occur of (1) the applicable Specified Tenant extension deadline and (2) the date required under a Specified Tenant lease by which the tenant thereunder is required to give notice of its exercise of a renewal option thereunder, in each case, in accordance with the applicable terms and conditions thereof and the Scottsdale Gilbert Retail Portfolio Whole Loan documents, and (B) expiring upon the first to occur of the lender’s receipt of evidence reasonably acceptable to the lender of (1) the satisfaction of the applicable Specified Tenant Cure Conditions (as defined below), or (2) the borrowers leasing the entire Specified Tenant space (or applicable portion thereof) pursuant to one or more leases in accordance with the applicable terms and conditions of the Scottsdale Gilbert Retail Portfolio Whole Loan documents, the applicable tenant(s) under such lease(s) being in actual, physical occupancy of the space demised under its lease, all contingencies to effectiveness of such lease have expired or been satisfied, each such lease has commenced and a rent commencement date has been established and, in the lender’s judgment, the applicable Specified Tenant excess cash flow condition is satisfied in connection therewith.
“Specified Tenant Cure Conditions” means each of the following, as applicable (i) the 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 in accordance with clause (vii) of the definition of “Specified Tenant Trigger Period”, the applicable Specified Tenant has renewed or extended the applicable Specified Tenant lease in accordance with the terms thereof and the Scottsdale Gilbert Retail Portfolio Whole Loan documents for the Specified Tenant renewal term and, in lender’s judgment, the applicable Specified Tenant excess cash flow condition is satisfied in connection therewith, (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 and has affirmed the applicable Specified Tenant lease pursuant to final, non-appealable order of a court of competent jurisdiction, and (vi) the applicable Specified Tenant is paying full, unabated rent under the applicable Specified Tenant lease.
“Mezzanine Loan Trigger Period” means any period, from and after the origination of the Scottsdale Gilbert Retail Portfolio Mezzanine Loan, (A) commencing upon the earliest of (i) the date that mezzanine lender delivers written notice to lender that a mezzanine loan event of default exists, and (ii) the debt service coverage ratio being less than 1.10x, and (B) expiring upon (x) with regard to clause (i) above, the date that mezzanine lender delivers written notice to lender that a mezzanine loan event of default no longer exists, and (y) with regard to clause (ii) above, the date that the debt service coverage ratio is equal to or greater than 1.15x for two consecutive calendar quarters. Notwithstanding the foregoing, a Mezzanine Loan Trigger Period shall not be deemed to expire in the event that a Mezzanine Loan Trigger Period then exists for any other reason.
Subordinate Debt. None.
Mezzanine Debt. Within 20 days following the origination of the Scottsdale Gilbert Retail Portfolio Whole Loan, the borrowers have the right to obtain a mezzanine loan in the amount of $7,000,000 from QFP II, LP. The Scottsdale Gilbert Retail Portfolio Mezzanine Loan is anticipated to accrue interest at a rate of 13.0000% per annum to be paid as part of each monthly debt service payment amount. The Scottsdale Gilbert Retail Portfolio Mezzanine Loan is anticipated to have a final maturity date of October 6, 2028. The Scottsdale Gilbert
| 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. 8 – Scottsdale Gilbert Retail Portfolio | ||
Retail Portfolio Whole Loan documents require that an intercreditor agreement between the lender under the Scottsdale Gilbert Retail Portfolio Whole Loan and the lender under the Scottsdale Gilbert Retail Portfolio Mezzanine Loan be delivered simultaneously with the origination of the Scottsdale Gilbert Retail Portfolio Mezzanine Loan.
Partial Release. 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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| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 9 – River Centre | ||
| 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 – River Centre | ||
| 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 2023-5C2 | |
| No. 9 – River Centre | ||
| 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 - Suburban | |
| % of IPB: | 3.9% | Net Rentable Area (SF): | 553,039 | |
| Loan Purpose: | Refinance | Location: | Red Bank, NJ | |
| Borrowers: | Exit 109 1 LLC, Exit 109 2 LLC, Exit 109 3 LLC and Exit 109 4 LLC | Year Built / Renovated: | 1984-1985, 1990 / 2021 | |
| Borrower Sponsors: | Richard Chera and Maurice Zekaria | Occupancy: | 84.0% | |
| Interest Rate: | 7.98500% | Occupancy Date: | 10/6/2023 | |
| Note Date: | 10/11/2023 | 4th Most Recent NOI (As of)(3): | NAV | |
| Maturity Date: | 10/6/2028 | 3rd Most Recent NOI (As of)(3): | $4,423,637 (12/31/2021) | |
| Interest-only Period: | 60 months | 2nd Most Recent NOI (As of): | $6,125,292 (12/31/2022) | |
| Original Term: | 60 months | Most Recent NOI (As of): | $6,349,529 (TTM 8/31/2023) | |
| Original Amortization Term: | None | UW Economic Occupancy: | 82.9% | |
| Amortization Type: | Interest Only | UW Revenues: | $13,584,111 | |
| Call Protection(2): | L(25),D(28),O(7) | UW Expenses: | $5,503,947 | |
| Lockbox / Cash Management: | Hard / Springing | UW NOI: | $8,080,165 | |
| Additional Debt(1): | Yes | UW NCF: | $7,969,557 | |
| Additional Debt Balance(1): | $25,000,000 | Appraised Value / Per SF: | $114,100,000 / $206 | |
| Additional Debt Type(1): | Pari Passu | Appraisal Date: | 9/22/2023 | |
| Escrows and Reserves(4) | Financial Information(1) | |||||
| Initial | Monthly | Initial Cap | Cut-off Date Loan / SF: | $99 | ||
| Taxes: | $102,854 | $102,854 | N/A | Maturity Date Loan / SF: | $99 | |
| Insurance: | $0 | $19,240 | N/A | Cut-off Date LTV: | 48.2% | |
| Replacement Reserves: | $0 | $9,217 | $221,216 | Maturity Date LTV: | 48.2% | |
| TI/LC Reserve: | $7,000,000 | Springing | N/A | UW NCF DSCR: | 1.79x | |
| Other Reserves(5): | $10,506,835 | $0 | N/A | UW NOI Debt Yield: | 14.7% | |
| Sources and Uses | ||||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |||
| Mortgage Loan | $55,000,000 | 97.8 | % | Loan Payoff | $35,000,000 | 62.3 | % | |
| Borrower Equity | 1,208,852 | 2.2 | Reserves | 17,609,689 | 31.3 | |||
| Closing Costs | 3,599,163 | 6.4 | ||||||
| Total Sources | $56,208,852 | 100.0 | % | Total Uses | $56,208,852 | 100.0 | % | |
| (1) | The River Centre Mortgage Loan (as defined below) is part of a whole loan evidenced by five pari passu notes with an aggregate original principal balance as of the Cut-off Date of $55.0 million (the “River Centre Whole Loan”). The Financial Information in the chart above is based on the aggregate outstanding principal balance of the River Centre Whole Loan. |
| (2) | Defeasance of the River Centre 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 25 payments is based on the anticipated closing date of the BMO 2023-5C2 securitization trust in November 2023. The actual lockout period may be longer. |
| (3) | The River Centre Property (as defined below) was purchased in June 2021 and the seller did not provide historical information. As such, 4th Most Recent NOI was unavailable. 3rd Most Recent NOI is a partial year statement. |
| (4) | For a full description of Escrows and Reserves, see “Escrows and Reserves” below. |
| (5) | Other Reserves include approximately (i) $8,332,477 in outstanding tenant allowances, tenant improvements and leasing commissions (“TA TI/LC”) and (ii) $2,174,358 in rent concessions. |
The Loan. The ninth largest mortgage loan (the “River Centre Mortgage Loan”) is part of a fixed rate whole loan secured by the borrowers’ fee interest in a suburban office property totaling 553,039 square feet located in Red Bank, New Jersey (the “River Centre Property”). The River Centre Whole Loan consists of five pari passu notes and accrues interest at a rate of 7.98500% per annum. The River Centre Whole Loan has a five-year term and is interest-only for the entire term of the loan. The controlling Note A-1 will be included in the BMO 2023-5C2 securitization trust. The remaining notes are expected to be contributed to one or more securitization trust(s). The River Centre Whole Loan will be serviced pursuant to the pooling and servicing agreement for the BMO 2023-5C2 securitization trust. See “Description of the Mortgage Pool—The Whole Loans—The Serviced Pari Passu Whole Loans” in the Preliminary Prospectus.
| 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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| Whole Loan Summary | ||||||
| Note | Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece | ||
| A-1 | $30,000,000 | $30,000,000 | BMO 2023-5C2 | Yes | ||
| A-2 | $10,000,000 | $10,000,000 | UBS AG(1) | No | ||
| A-3 | $5,000,000 | $5,000,000 | UBS AG(1) | No | ||
| A-4 | $5,000,000 | $5,000,000 | UBS AG(1) | No | ||
| A-5 | $5,000,000 | $5,000,000 | UBS AG(1) | No | ||
| Whole Loan | $55,000,000 | $55,000,000 | ||||
| (1) | The subject notes are expected to be contributed to one or more future securitization trust(s). |
The Property. The River Centre Property consists of a five-building Class A office campus totaling 553,039 square feet located at 200 Schultz Drive and 331 Newman Springs Road in Red Bank, New Jersey. The five, two-, three- and four-story buildings were constructed in 1984, 1985 and 1990 and renovated in 2021. The River Centre Property is situated on an approximately 40.88-acre site located within the River Centre office campus. The River Centre Property includes an amenity center totaling 20,072 square feet, which consists of a cafeteria, a lounge area and a fitness center. The River Centre Property contains 1,845 parking spaces or 3.34 spaces per 1,000 square feet. Within the River Centre office campus and adjacent to the River Centre Property, is a 103,000 square foot office building located at 100 Schultz Drive, which is also owned by the borrower sponsors, but not included within the collateral.
The River Centre Property was 84.0% leased to 43 unique tenants as of October 6, 2023. The five largest tenants at the River Centre Property, Sycamore Medical (d/b/a Advanced Reconstructive Surgery Alliance) (“Sycamore Medical”), Life Time Fitness (Office) (d/b/a Life Time Work) (“Life Time”), Wells Fargo, McGraw-Hill, and Perspecta Labs, account for 32.2% of NRA and 38.7% of underwritten base rent. No other tenant accounts for more than 4.6% of NRA or 5.4% of underwritten base rent. Since acquiring the River Centre Property in June 2021 for approximately $71.0 million, the borrower sponsors have since (x) invested approximately $14.0 million in capital expenditures and leasing costs including mechanicals, parking lot paving, landscaping, and spec space, among other improvements and (y) signed 32 new and renewal leases totaling 312,729 square feet (56.5% of NRA; 69.0% of underwritten base rent), with lease commencement dates in November 2021 or later. At origination, the borrower sponsors reserved $7.0 million in leasing costs in a TI/LC reserve.
In 2024, Life Time Fitness is expected to complete construction on a new 125,000 square foot athletic club across from 100 Schultz Drive and 200 Schultz Drive, which is not part of the collateral. The cost to construct the new Life Time Fitness facility is reportedly approximately $40 million, and will include swimming pools, athletic courts, saunas, cardio and weight training equipment, fitness studios, kids spaces, a café and a spa. The pool is expected to occupy 50,000 square feet of space with an outdoor beach club, a bistro, lap pools and a whirlpool. Life Time will occupy 40,212 square feet of space as office space at the River Centre Property through May 31, 2039, as an addition to its main 125,000 square foot facility. The borrower sponsors plan to add a drive-thru Starbucks on a 0.50-acre free release parcel (the “Starbucks Parcel”) as well as a parking garage, which will be constructed as part of the sale of the Avalon Parcel (as defined below), providing tenants access to covered parking.
Major Tenants.
Sycamore Medical (41,925 square feet; 7.6% of NRA; 9.4% of underwritten base rent) is doing business as the Advanced Reconstructive Surgery Alliance (“ARSA”). ARSA is a growth-oriented business platform that brings strategic, operational, and management expertise to the physicians they partner with. ARSA was designed specifically for specialist cosmetic and reconstructive surgery practices. ARSA services include, but are not limited to, back-office administration, marketing, insurance coordination, human resourcing, purchasing, and support. Sycamore Medical currently occupies 41,925 square feet across one suite at 331 Newman Springs Road and one suite at 200 Schultz Drive. Sycamore Medical initially leased 25,000 square feet with a lease expiration date of May 31, 2034. Sycamore Medical subsequently executed a lease for an additional 16,925 square feet with an estimated rent commencement date of March 1, 2024, and a lease expiration date of December 31, 2036. Both suites have a current base rental rate of $29.75 per square foot. Sycamore Medical has two, five-year renewal options remaining and no termination options.
Life Time (40,212 square feet; 7.3% of NRA; 7.4% of underwritten base rent; Caa1/B/B+; Moody’s/S&P/Fitch) (NYSE: LTH) is a lifestyle brand offering health, fitness and wellness experiences to a community of nearly 1.4 million individual members, who together comprise more than 776,000 memberships, as of December 31, 2022. Life Time delivers high-quality experiences through its omni-channel physical and digital ecosystem that includes more than 160 distinctive, resort-like athletic country club destinations across 29 states in the U.S. and one province in Canada. In 2018, Life Time launched Life Time Work, a branded co-working model, which offers premium work spaces in close proximity to its athletic country clubs and integrates ergonomic furnishings and promotes a healthy working environment. As of December 31, 2022, Life Time had 11 Life Time Work locations in operation, with plans to open more in the coming years, including the 40,212 square foot suite at the River Centre Property. In 2022, Life Time generated $1.823 billion of revenue and $282 million in Adjusted EBITDA.
Life Time leases a 40,212 square foot space with an estimated rent commencement date of November 1, 2023 and a lease expiration date of May 31, 2029. Life Time has a current base rental rate of $24.50 per square foot modified gross, which is estimated to increase
| 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 $26.95 per square foot on June 1, 2029 and $29.64 per square foot on June 1, 2034. Life Time will also pay percentage rent associated with its co-work office space calculated as 28% of all membership revenue above a breakpoint, initially equal to approximately $3.52 million. Life Time has three, five-year renewal options remaining and no termination options in its lease.
Wells Fargo (37,520 square feet; 6.8% of NRA; 7.8% of underwritten base rent; A1/BBB+; Moody’s/S&P) (NYSE: WFC) is a leading financial services company that provides a diversified set of banking, investment and mortgage products and services, as well as consumer and commercial finance, through banking locations and offices, the internet and other distribution channels to individuals, businesses and institutions in all 50 states, the District of Columbia and in countries outside the U.S. Wells Fargo provides consumer financial products and services including checking and savings accounts, credit and debit cards, and auto, mortgage and home equity, and small business lending. In addition, Wells Fargo offers financial planning, private banking, investment management and fiduciary services. Wells Fargo also provides financial solutions to businesses through products and services including traditional commercial loans and lines of credit, letters of credit, asset-based lending, trade financing, treasury management and investment banking services. As of December 31, 2022, Wells Fargo had assets of approximately $1.9 trillion, loans of $955.9 billion, deposits of $1.4 trillion and stockholders’ equity of $180 billion.
Wells Fargo currently occupies 37,520 square feet across three suites. Two suites totaling 25,762 square feet at 331 Newman Springs Road are leased by Wells Fargo Advisors LLC and one 11,758 square foot suite at 200 Schultz Drive is leased by Wells Fargo Bank N.A. Wells Fargo Advisors LLC’s 25,762 square feet of space at 331 Newman Springs Road has a lease expiration date of August 31, 2029, and a current base rental rate of $27.00 per square feet. Wells Fargo Bank N.A.’s 11,758 square feet of space at 200 Schultz Drive has a lease expiration date of November 30, 2027, and a current base rental rate of $29.00 per square feet. Wells Fargo has two, five-year renewal options remaining. Wells Fargo Advisors LLC has a one-time right to terminate its lease effective August 31, 2027, upon 12 months’ prior written notice to the landlord and payment of a termination fee equal to $290,283. Wells Fargo Bank N.A. has a one-time right to (x) terminate its lease or (y) surrender 4,881 square feet effective August 31, 2025, upon 12 months’ prior written notice to the landlord and payment of a termination fee equal to (x) $159,744 in the event the lease is terminated or (y) $66,313 in the event only 4,881 square feet is surrendered.
Environmental. According to the Phase I environmental assessment dated April 14, 2023, there was no evidence of any recognized environmental conditions at the River Centre Property.
The following table presents certain information relating to the historical and current occupancy of the River Centre Property:
| Historical and Current Occupancy | ||
| 2021(1) | 2022(1) | Current(2) |
| 79.3% | 74.7% | 84.0% |
| (1) | Historical occupancies are an average of each respective year. |
| (2) | Current occupancy is as of October 6, 2023. |
| 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 top tenants based on square footage at of the River Centre Property:
| Tenant Summary(1) | |||||||||
| Tenant | Ratings Moody’s/S&P/Fitch(2) | Net Rentable Area (SF) | % of Total NRA | UW Base Rent PSF | UW Base Rent | % of Total UW Base Rent | Lease Expiration Date | ||
| Sycamore Medical | NR/NR/NR | 41,925 | 7.6 | % | $29.75 | $1,247,269 | 9.4 | % | Various(3) |
| Life Time | Caa1/B/B+ | 40,212 | 7.3 | $24.50 | 985,194 | 7.4 | 5/31/2039 | ||
| Wells Fargo(4) | A1/BBB+/NR | 37,520 | 6.8 | $27.63 | 1,036,556 | 7.8 | Various(5) | ||
| McGraw-Hill | B3/B-/B | 30,800 | 5.6 | $33.56 | 1,033,648 | 7.8 | 8/31/2029 | ||
| Perspecta Labs | NR/NR/NR | 27,635 | 5.0 | $29.50 | 815,233 | 6.2 | 10/31/2028 | ||
| Major Tenants | 178,092 | 32.2 | % | $28.74 | $5,117,899 | 38.7 | % | ||
| Other Tenants(6) | 286,282 | 51.8 | $28.37 | 8,121,991 | 61.3 | ||||
| Occupied Collateral Total / Wtd. Avg. | 464,374 | 84.0 | % | $28.51 | $13,239,890 | 100.0 | % | ||
| Vacant Space | 88,665 | 16.0 | |||||||
| Collateral Total | 553,039 | 100.0 | % | ||||||
| (1) | Information is based on the underwritten rent roll dated October 6, 2023 and is inclusive of rent steps totaling $163,649 through October 2024. |
| (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) | Sycamore Medical leases 25,000 square feet expiring on May 31, 2034 and 16,925 square feet expiring on December 31, 2036. |
| (4) | Wells Fargo has a one-time right to terminate its lease for 25,762 square feet at 331 Newman Springs Road effective August 31, 2027, upon 12 months’ prior written notice to the landlord and payment of a termination fee equal to $290,283. Wells Fargo also has a one-time right to (x) terminate its lease or (y) surrender 4,881 square feet at 200 Schultz Drive effective August 31, 2025, upon 12 months’ prior written notice to the landlord and payment of a termination fee equal to (x) $159,744 in the event the lease is terminated or (y) $66,313 in the event only 4,881 square feet is surrendered. |
| (5) | Wells Fargo leases 25,762 square feet expiring on August 31, 2029 and 11,758 square feet expiring on November 30, 2027. |
| (6) | Other Tenants is inclusive of (i) amenity and storage space totaling 20,072 square feet for which no rent is associated or underwritten, (ii) a management office totaling 1,299 square feet for which no rent is associated or underwritten and (iii) six leases totaling 46,395 square feet with rent commencement dates after the Cut-off Date. There can be no assurance that the tenants with leases with rent commencement dates after the Cut-off Date will: (x) take occupancy of their respective leased spaces at the River Centre Property (or in the case of Woolston Consulting, take occupancy of its expansion space at the River Centre Property); or (y) begin paying rent on their respective leased spaces, in each case as expected or at all. |
The following table presents certain information relating to the tenant lease expirations of the River Centre 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 | 88,665 | 16.0 | % | NAP | NA | P | 88,665 | 16.0% | NAP | NAP | ||||
| 2023 & MTM(2) | 4 | 21,339 | 3.9 | $38,998 | 0.3 | % | 110,004 | 19.9% | $38,998 | 0.3% | |||||
| 2024 | 8 | 38,049 | 6.9 | 1,192,264 | 9.0 | 148,053 | 26.8% | $1,231,262 | 9.3% | ||||||
| 2025 | 4 | 19,805 | 3.6 | 655,041 | 4.9 | 167,858 | 30.4% | $1,886,303 | 14.2% | ||||||
| 2026 | 4 | 42,205 | 7.6 | 1,218,438 | 9.2 | 210,063 | 38.0% | $3,104,742 | 23.4% | ||||||
| 2027 | 4 | 20,566 | 3.7 | 624,611 | 4.7 | 230,629 | 41.7% | $3,729,353 | 28.2% | ||||||
| 2028 | 4 | 48,827 | 8.8 | 1,489,092 | 11.2 | 279,456 | 50.5% | $5,218,446 | 39.4% | ||||||
| 2029 | 8 | 77,276 | 14.0 | 2,399,049 | 18.1 | 356,732 | 64.5% | $7,617,494 | 57.5% | ||||||
| 2030 | 4 | 20,160 | 3.6 | 614,562 | 4.6 | 376,892 | 68.1% | $8,232,056 | 62.2% | ||||||
| 2031 | 2 | 25,483 | 4.6 | 753,099 | 5.7 | 402,375 | 72.8% | $8,985,155 | 67.9% | ||||||
| 2032 | 1 | 13,131 | 2.4 | 409,819 | 3.1 | 415,506 | 75.1% | $9,394,974 | 71.0% | ||||||
| 2033 | 2 | 15,925 | 2.9 | 459,338 | 3.5 | 431,431 | 78.0% | $9,854,312 | 74.4% | ||||||
| 2034 & Beyond(3) | 9 | 121,608 | 22.0 | 3,385,579 | 25.6 | 553,039 | 100.0% | $13,239,890 | 100.0% | ||||||
| Total | 54 | 553,039 | 100.0 | % | $13,239,890 | 100.0 | % | ||||||||
| (1) | Based on the underwritten rent roll dated October 6, 2023 and is inclusive of rent steps totaling $163,649 through October 2024. |
| (2) | 2023 & MTM is inclusive of amenity and storage space totaling 20,072 square feet for which no rent is associated or underwritten. |
| (3) | 2034 & Beyond is inclusive of a management office totaling 1,299 square feet for which no rent is associated or underwritten. |
| 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 underwritten cash flows of the River Centre Property:
| Operating History and Underwriting Net Cash Flow | |||||||
| 2021(1) | 2022 | TTM(2) | Underwritten | Per Square Foot | %(3) | ||
| In Place Rent | $6,673,641 | $11,178,396 | $11,246,287 | $13,076,241 | $23.64 | 80.2 | % |
| Gross Up of Vacant Space | 0 | 0 | 0 | 2,792,948 | 5.05 | 17.1 | |
| Rent Steps | 0 | 0 | 0 | 163,649 | 0.30 | 1.0 | |
| Straight Line Rent(4) | 0 | 0 | 0 | 11,501 | 0.02 | 0.1 | |
| Gross Potential Rent | $6,673,641 | $11,178,396 | $11,246,287 | $16,044,339 | $29.01 | 98.4 | % |
| Total Reimbursements | 244,756 | 397,060 | 311,484 | 264,141 | 0.48 | 1.6 | |
| Total Gross Income | $6,918,396 | $11,575,456 | $11,557,771 | $16,308,480 | $29.49 | 100.0 | % |
| (Vacancy/Credit Loss) | 0 | 0 | 0 | (2,792,948) | (5.05) | (17.1 | ) |
| Other Income | 51,627 | 84,291 | 68,579 | 68,579 | 0.12 | 0.4 | |
| Effective Gross Income | $6,970,024 | $11,659,746 | $11,626,350 | $13,584,111 | $24.56 | 83.3 | % |
| Total Expenses | $2,546,386 | $5,534,454 | $5,276,821 | $5,503,947 | $9.95 | 40.5 | % |
| Net Operating Income | $4,423,637 | $6,125,292 | $6,349,529 | $8,080,165 | $14.61 | 59.5 | % |
| Capital Expenditures | 0 | 0 | 0 | 110,608 | 0.20 | 0.8 | |
| TI/LC | 0 | 0 | 0 | 0 | 0.00 | 0.0 | |
| Net Cash Flow | $4,423,637 | $6,125,292 | $6,349,529 | $7,969,557 | $14.41 | 58.7 | % |
| (1) | The River Centre Property was purchased in June 2021. As such, 2021 operating history is a partial year statement. |
| (2) | TTM reflects the trailing 12 months ending August 31, 2023. |
| (3) | % column represents percent of Total Gross Income for all revenue lines and represents percent of Effective Gross Income for the remainder of fields. |
| (4) | Includes straight-lined rent for investment-grade tenants or their affiliates averaged to earlier of lease expiration or loan maturity. |
The Market. The River Centre Property is located in Red Bank, Monmouth County, New Jersey, approximately 2.4 miles southwest of downtown Red Bank, approximately 47.4 miles south of New York City and approximately 36.7 miles south of Newark Liberty International Airport. Access to the River Centre Property is provided by immediate accessibility to exit 109 of the Garden State Parkway, State Highway 35, approximately 1.7 miles west, State Highways 18 and 36, approximately 4.8 miles north, US Highway 9, approximately 14.9 miles southeast, and the New Jersey Turnpike, approximately 19.5 miles southeast. Public transportation is available near the River Centre Property including NJ Transit Train service provided by the Red Bank Station, approximately 1.8 miles east and Little Silver Station approximately 3.9 miles southeast. In addition, the Seastreak Ferry - Atlantic Highlands is approximately 8.4 miles northeast of the River Centre Property, a fast passenger ferry providing service to points in Manhattan and central New Jersey, among others.
The River Centre Property is part of the New York-Newark-Jersey City, NY-NJ-PA Metropolitan Statistical Area (“New York MSA”). Specifically, the River Centre Property is located within the Eastern Monmouth office submarket of the Northern New Jersey office market. According to the appraisal, as of 2022, the New York MSA had an estimated population of approximately 19.8 million and experienced an annual growth rate of approximately 0.6% since 2020. According to a third-party market research report, in the first quarter of 2023, the submarket reported an inventory of approximately 17.5 million square feet, with an average asking rent of $28.84 and an overall vacancy rate of 6.0%. The estimated 2023 population and average household income within a five-mile radius of the River Centre Property was 107,993 and $189,241, 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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| No. 9 – River Centre | ||
The following table presents certain information relating to comparable office leases to the River Centre Property:
| Competitive Building Summary(1) | |||||||
Property Name | Year Built / Renovated | Size (SF) | Tenant | Tenant Size (SF) | Rent PSF | Commencement | Lease Term (Years) |
River Centre Property Red Bank, NJ | 1984-1985, 1990 / 2021 | 553,039(2) | Life Time | 40,212(2) | $24.50(2) | Nov-23(2) | 15.6(2) |
One Tower Center Boulevard East Brunswick, NJ | 1986 / 2020 | 417,534 | HCL | 40,732 | $31.50 | Aug-2023 | 15.0 |
200 Monmouth Street Red Bank, NJ | 2019 / NAP | 45,200 | Axis Insurance | 7,985 | $29.50 | Oct-2022 | 5.0 |
485 Route 1 South Woodbridge, NJ | 1980 / 2019 | 112,449 | Fortegra | 112,449 | $31.00 | Oct-2022 | 10.0 |
141 West Front Street Red Bank, NJ | 2007 / 2020 | 92,878 | Confidential | 5,710 | $36.00 | Jan-2023 | 7.0 |
1030 Broad Street Shrewsbury, NJ | 1984 / NAP | 52,025 | Mitre | 13,578 | $26.00 | Aug-2022 | 5.0 |
90 Matawan Road Matawan, NJ | 2001 / NAP | 221,966 | Ocean Computer Group | 21,152 | $27.00 | Sep-2022 | 7.0 |
| (1) | Source: Appraisal. |
| (2) | Information is based on the underwritten rent roll dated October 6, 2023. |
The Borrowers. The borrowers are Exit 109 1 LLC, Exit 109 2 LLC, Exit 109 3 LLC and Exit 109 4 LLC, each a Delaware limited liability company and single purpose entity with one independent director in its organizational structure. Legal counsel to the borrowers delivered a non-consolidation opinion in connection with the origination of the River Centre Whole Loan.
The Borrower Sponsors. The borrower sponsors and non-recourse carveout guarantors for the River Centre Whole Loan are Richard Chera and Maurice Zekaria. Richard Chera is a co-founder and serves as senior managing director of Crown Acquisitions Inc., a New York based full-service real estate firm, and has acquired and developed billions of dollars of high profile commercial real estate assets. Maurice Zekaria is president and CEO of Paramount Realty. Paramount Realty is a commercial real estate company with over 150 properties and 15 million square feet spanning 10 states across the Northeast and Mid-Atlantic region of the United States.
Property Management. The River Centre Property is managed by Paramount Newco Realty Limited Liability Company, an affiliate of the borrower sponsors.
Escrows and Reserves. At origination, the borrowers deposited into escrow (i) approximately $102,854 for real estate taxes, (ii) $7,000,000 for TI/LCs, (iii) approximately $2,174,358 for rent concessions and (iv) approximately $8,332,477 for outstanding TA TI/LC reserves.
Tax Escrows – On a monthly basis, the borrowers are required to escrow 1/12th of the annual estimated tax payments to the tax reserve, which currently equates to approximately $102,854.
Insurance Escrows – On a monthly basis, the borrowers are required to escrow 1/12th of the annual estimated insurance premiums to the insurance reserve, which currently equates to approximately $19,240.
Replacement Reserves – On a monthly basis, the borrowers are required to escrow approximately $9,217 for replacement reserves subject to a cap of approximately $221,216.
TI/LC Reserve – On a monthly basis, the borrowers will be required to deposit approximately $64,521 into a TI/LC reserve when the balance in the TI/LC reserve account is $2,000,000 or less.
Lockbox / Cash Management. The River Centre Whole Loan is structured with a hard lockbox and springing cash management. The borrowers and property manager are required to direct the tenants to pay rent directly into the lockbox account, and to deposit any rents otherwise received in such account within one business day after receipt. During the continuance of a Cash Management Trigger Event (as defined below), 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 River Centre Whole Loan documents, and all excess funds on deposit in the cash management account (after payment of required monthly reserve deposits, the debt service payment on the River Centre Whole Loan, operating expenses and cash management bank fees) are required to 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 account, (b) if a Cash Sweep Trigger Event (as defined below) other than a Material Tenant Trigger Event has occurred and is continuing, 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 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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A “Cash Management Trigger Event” means a period commencing upon the occurrence of (i) an event of default, (ii) any bankruptcy action involving the borrowers, the guarantors, the key principals or the affiliated property manager, (iii) the trailing 12-month period debt service coverage ratio falling below 1.40x, (iv) the indictment for fraud or misappropriation of funds of the borrowers, the guarantors, the key principals 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 the River Centre Property) or (v) a Material Tenant Trigger Event, and expiring upon (a) with respect to clause (i) above, the cure of such event of default and the acceptance of such cure by the lender, (b) with respect to clause (ii) above, the filing being discharged or dismissed within 60 days for the borrowers, the guarantors or the key principals, or within 45 days for the property manager, and the lender’s determination that such filing does not materially increase the borrowers’, the guarantors’ or the key principals’ monetary obligations, or materially and adversely affect the key principals’, the guarantors’ or the property manager’s ability to carry out their obligations under the River Centre Whole Loan documents, as applicable, or, in the case of the property manager, the replacement of the property manager with a third-party property manager that constitutes a qualified property manager under the River Centre Whole Loan documents, (c) with respect to clause (iii) above, the trailing 12-month period debt service coverage ratio being at least 1.40x for one consecutive calendar quarter or the borrowers depositing with the lender cash or a letter of credit in an amount (such amount, the “DSCR Cure Deposit”) that, if applied to reduce the then outstanding principal balance would result in a 12-month period debt service coverage ratio being at least 1.40x for one calendar quarter, (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 River Centre 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, (ii) any bankruptcy action involving the borrowers, the guarantors, the key principals or an affiliated property manager or (iii) the 12-month period debt service coverage ratio falling below 1.40x, and expiring upon (a) with respect to clause (i) above, the cure of such event of default and the acceptance of such cure by the lender, (b) with respect to clause (ii) above, the filing being discharged or dismissed within 60 days, and the lender’s determination that such filing does not materially increase the borrowers’, the guarantors’ or the key principals’ monetary obligations, or materially and adversely affect the key principals’, the guarantors’ or the property manager’s ability to carry out their obligations under the River Centre Whole Loan documents, as applicable, or, in the case of the property manager, the replacement of the property manager with a third-party property manager that constitutes a qualified property manager under the River Centre Whole Loan documents or (c) with respect to clause (iii) above, the 12-month period debt service coverage ratio being at least 1.40x for one consecutive calendar quarter or the borrowers depositing with the lender a DSCR Cure Deposit that, if applied to reduce the then outstanding principal balance would result in a 12-month period debt service coverage ratio being at least 1.40x for one calendar quarter.
A “Material Tenant Trigger Event” means a period commencing upon the occurrence of (i) a Material 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 then-applicable expiration date under its respective Material Tenant lease, if the applicable Material Tenant does not extend or renew such Material Tenant lease, (iii) on or prior to the date by which a Material Tenant is required under its Material Tenant lease to notify the borrowers of its election to extend such Material Tenant lease, if the Material Tenant does not extend or renew such Material Tenant lease, (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 guarantor of any Material Tenant lease occurring, (vi) a Material Tenant lease being terminated or no longer being in full force and effect or (vii) a Material Tenant “going dark”, vacating, ceasing to occupy or ceasing to conduct business in the ordinary course at all or a portion of its Material Tenant space and expiring upon (a) with respect to clause (i), (ii), (iii), (vi) or (vii) above, the date that (x) the applicable Material Tenant lease is extended on terms satisfying the requirements of the River Centre Whole Loan documents or (y) all or substantially all of the applicable Material Tenant space is leased to a replacement tenant satisfying the requirements of the River Centre Whole Loan documents, (b) with respect to solely clause (i) above, the date that the applicable Material Tenant revokes or rescinds all termination or cancellation notices, (c) with respect to solely clause (iv) above, a cure of the applicable event of default, (d) with respect to solely 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) or (e) with respect to solely clause (vii) above, the Material Tenant re-commencing its normal business operations at its Material Tenant space or the applicable portion thereof at the River Centre Property.
A “Material Tenant” means any tenant at the River Centre Property that, together with its affiliates, either (a) leases 20% or more of the total rentable square footage at the River Centre Property or (b) accounts for (or would account for) 20% or more of the total in-place base rent at the River Centre Property.
Subordinate and Mezzanine Debt. None.
Partial Release. The borrowers will have the right to obtain the release of a portion of the River Centre Property consisting of non-income producing land, paved parking, and an amenity building, which collectively represent in the aggregate approximately 5.9 acres (the “Avalon Parcel”) from the lien of the related River Centre Whole Loan without payment of any release amount, penalty or premium, subject to complying with terms and conditions set forth in the River Centre Whole Loan documents, including but not limited to: (i) the release is in connection with the sale of the Avalon Parcel to Avalon or wholly owned affiliate of Avalon, (ii) delivery of written evidence
| 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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reasonably acceptable to the lender that (a) any construction, development, and/or work contemplated for the Avalon Parcel will not materially disrupt any business operations of tenants at the remaining River Centre Property, (b) the Avalon Parcel has been legally subdivided, (c) the remaining River Centre Property and the Avalon Parcel will each constitute one or more separate tax lots and each will comply with all legal requirements, and (d) the remaining River Centre Property separately conforms to all zoning, building, land use, and parking requirements, (iii) completion of all work related to construction of replacement amenities and (iv) (x) the borrowers reserving with the lender 125% of the estimated cost for the construction a promenade and river walk (see below for more information) pursuant to the lender’s review and approval of a detailed budget or (y) delivery of a payment and performance guaranty covering all such work from the related guarantors. Per an executed purchase and sale agreement, the borrowers intend to release the Avalon Parcel from the lien of the River Centre Whole Loan and subsequently sell the Avalon Parcel to Avalon or an affiliate thereof, which is expected to develop a residential project named Avalon Middletown that is anticipated to include a parking garage after appropriate easements have been put in place to satisfy parking requirements. As a condition of the sale of the Avalon Parcel to Avalon, the borrowers will be required to construct a promenade and a riverwalk at the River Centre Property, which is estimated to cost $6.0 million.
In addition to the Avalon Parcel, the borrowers will have the right to obtain the release of a portion of the River Centre Property consisting of non-income producing paved parking and landscaping of approximately 0.5 acres in size (the “Starbucks Parcel”) from the lien of the River Centre Whole Loan without payment of any release amount, penalty or premium, subject to the satisfaction of conditions set forth in the River Centre Whole Loan documents, including, but not limited to: (i) delivery of a fully executed lease between an affiliate of the borrowers and Starbucks for a to-be constructed Starbucks store on the Starbucks Parcel, (ii) the Starbucks Parcel being conveyed to an affiliate of the guarantors, (iii) a use restriction agreement and easement being recorded against the Starbucks Parcel, which will prohibit the use of the Starbucks Parcel for anything other than a coffee shop and grant a perpetual access easement benefitting the remaining River Centre Property, (iv) written evidence that (a) the Starbucks Parcel is not necessary for the borrowers’ operation or use of the remaining River Centre Property, (b) any construction, development, and/or work contemplated for the Starbucks Parcel will not materially disrupt any business operations of the tenants or occupants of the remaining River Centre Property, (c) the Starbucks Parcel has been legally subdivided, (d) the remaining River Centre Property and the Starbucks Parcel will each constitute one or more separate tax lots and each will comply with all legal requirements, and (e) the Starbucks Parcel is not necessary for the remaining River Centre Property to comply with all zoning, building, land use, parking or other applicable legal requirements, or, to the extent necessary, a reciprocal easement has been executed or recorded against the Starbucks Parcel. The stand-alone building is anticipated to house a drive-thru Starbucks. The current letter of intent states the addition will be 2,365 square feet, with the tenant paying rent of $150,000 annually for the first five years of its lease and increasing to $165,000 annually for years 6-10 of its lease. The term of the lease will be 10 years, with four, five-year renewal options. There can be no assurance that Starbucks will (x) take occupancy at the Starbucks Parcel or (y) begin paying rent, in each case as expected or at all.
No value was attributed to either the Avalon Parcel or the Starbucks Parcel in underwriting the River Centre Whole Loan.
PILOT Program. The River Centre Whole Loan documents permit the borrower sponsors to enter into PILOT agreements for the redevelopment of the River Centre Property, which, if entered into, would cap future real estate taxes related to the River Centre Property. There can be no assurance that the borrower sponsors for the River Centre Whole Loan will enter into PILOT agreements for the redevelopment of the River Centre Property. In the event the borrower sponsors are able to enter into PILOT agreements for the redevelopment of the River Centre Property, there can be no assurance of the extent to which real estate taxes attributable to the River Centre Property would be limited, if at all.
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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| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 10 – Lacey Market Square | ||
| 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 2023-5C2 | |
| No. 10 – Lacey Market Square | ||
| 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 2023-5C2 | |
| No. 10 – Lacey Market Square | ||
| 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 2023-5C2 | |
| No. 10 – Lacey Market Square | ||
| Loan Information | Property Information | |||
| Loan Seller: | CREFI | Single Asset / Portfolio: | Single Asset | |
| Original Principal Balance: | $26,100,000 | Title(4): | Fee | |
| Cut-off Date Principal Balance: | $26,100,000 | Property Type – Subtype: | Retail – Anchored | |
| % of IPB: | 3.4% | Net Rentable Area (SF): | 276,499 | |
| Loan Purpose: | Refinance | Location: | Lacey, WA | |
| Borrower: | Lacey Marketsquare I, LLC and Lacey Marketsquare II, LLC | Year Built / Renovated: | 1978, 1989, 1990, 1991, 1992 / 2000 | |
| Borrower Sponsors: | L&R Towers, Rubin-Pachulski Properties L.P. and Rubin-Pachulski Properties, 36, LLC | Occupancy: | 96.1% | |
| Interest Rate: | 8.06000% | Occupancy Date: | 6/30/2023 | |
| Note Date: | 10/11/2023 | 4th Most Recent NOI (As of): | $2,614,549 (12/31/2020) | |
| Maturity Date: | 11/6/2028 | 3rd Most Recent NOI (As of): | $2,659,753 (12/31/2021) | |
| Interest-only Period: | 60 months | 2nd Most Recent NOI (As of): | $2,796,602 (12/31/2022) | |
| Original Term: | 60 months | Most Recent NOI (As of): | $2,872,578 (TTM 4/30/2023) | |
| Original Amortization Term: | None | UW Economic Occupancy: | 92.4% | |
| Amortization Type: | Interest Only | UW Revenues: | $4,036,636 | |
| Call Protection: | L(24),D(32),O(4) | UW Expenses: | $1,031,445 | |
| Lockbox / Cash Management: | Springing / Springing | UW NOI: | $3,005,192 | |
| Additional Debt(3): | No | UW NCF: | $2,811,784 | |
| Additional Debt Balance: | N/A | Appraised Value / Per SF: | $45,360,000 / $164 | |
| Additional Debt Type: | N/A | Appraisal Date: | 3/7/2023 | |
| Escrows and Reserves(1) | Financial Information(1) | ||||||
| Initial | Monthly | Initial Cap | Cut-off Date Loan / SF: | $94 | |||
| Taxes: | $59,210 | $29,605 | N/A | Maturity Date Loan / SF: | $94 | ||
| Insurance: | $0 | Springing | N/A | Cut-off Date LTV: | 57.5% | ||
| Replacement Reserves: | $0 | $4,518 | N/A | Maturity Date LTV: | 57.5% | ||
| TI/LC: | $0 | $11,509 | $500,000 | UW NCF DSCR: | 1.32x | ||
| Deferred Maintenance: | $57,463 | $0 | N/A | UW NOI Debt Yield: | 11.5% | ||
| Other(2): | $184,844 | Springing | N/A | ||||
| Sources and Uses | |||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | ||
| Mortgage Loan | $26,100,000 | 100.0% | Loan Payoff | $23,965,923 | 91.8 | % | |
| Closing Costs | 1,247,801 | 4.8 | |||||
| Sponsor Equity Repatriation | 584,760 | 2.2 | |||||
| Upfront Reserves | 301,516 | 1.2 | |||||
| Total Sources | $26,100,000 | 100.0% | Total Uses | $26,100,000 | 100.0 | % | |
| (1) | See “Escrows and Reserves” below. |
| (2) | Other reserves include (i) an initial unfunded obligations reserve of $173,759, (ii) an initial gap rent reserve of $11,085 and (iii) a springing monthly fixed deposit reserve of $52,141. |
| (3) | See “Subordinate Debt” below. |
| (4) | See “The Borrowers” below. |
The Loan. The tenth largest Loan (the “Lacey Market Square Loan”) is secured by the fee interest in a 276,499 square foot anchored retail property located in Lacey, Washington (the “Lacey Market Square Property”). See “Subordinate Debt” below. The Lacey Market Square Loan was originated on October 11, 2023 by Citi Real Estate Funding Inc. (“CREFI”) and accrues interest at a fixed rate of 8.06000% per annum. The Lacey Market Square Loan has an initial term of five-years and is interest-only for the full term. The scheduled maturity date of the Lacey Market Square Loan is the payment date that occurs on November 6, 2028.
| 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 2023-5C2 | |
| No. 10 – Lacey Market Square | ||
The Property. The Lacey Market Square Property consists of a 276,499 square foot anchored retail center comprised of five single story buildings located at 700 Sleater Kinney Road Southeast in Lacey, Washington. The Lacey Market Square Property was built in phases in 1978, 1989, 1990, 1991, 1992 and renovated in 2000 and is situated on an approximately 20.0-acre site. The Lacey Market Square Property has 1,175 parking spaces, resulting in a parking ratio of approximately 4.25 spaces per 1,000 square feet. The Lacey Market Square Property was 96.1% occupied by 32 unique tenants as of June 30, 2023. The largest tenants at the Lacey Market Square Property are Fred Meyer Stores, Inc., PFWA Lacey, LLC dba Planet Fitness (“Planet Fitness”) and JP Morgan Chase Bank.
Major Tenants. The three largest tenants based on underwritten base rent are Fred Meyer Stores, Inc. (“Fred Meyer”), Planet Fitness and JP Morgan Chase Bank (“JP Morgan”).
Fred Meyer (196,996 square feet; 71.2% of net rentable area (“NRA”); 52.3% of underwritten base rent). Founded in Portland, Oregon in 1922, Fred Meyer is a chain of grocery stores with 132 locations located across Washington, Oregon, Idaho and Alaska. Through a merger with The Kroger Co. (“Kroger”) in 1999, Fred Meyer is a wholly owned subsidiary of Kroger. Fred Meyer has been a tenant at the Lacey Market Square Property since November 1989 and has a current lease term through January 2030 followed by one, ten-year and two, five-year extension options and no termination options.
Planet Fitness (20,413 square feet; 7.4% of NRA; 7.9% of underwritten base rent). Founded in 1992, Planet Fitness is a franchisor and operator of fitness centers across the Unites States with over 2,400 locations in 50 states, the District of Columbia, Puerto Rico, Canada, Panama, Mexico and Australia. Planet Fitness has been a tenant at the Lacey Market Square Property since April 2016 and has a current lease term through March 2028 followed by four, five-year extension options and no termination options.
JP Morgan (3,300 square feet; 1.2% of NRA; 4.1% of underwritten base rent). JP Morgan is a global financial services firm headquartered out of New York City that offers services in investment banking, financial services for consumers and small business, commercial banking, financial transactions processing and asset management. JP Morgan has been a tenant at the Lacey Market Square Property since June 1992 and has a current lease term through June 2027 followed by two, five-year extension options and no termination options.
The following table presents certain information relating to the historical occupancy of the Lacey Market Square Property:
| Historical and Current Occupancy(1) | |||
| 2020 | 2021 | 2022 | Current(2) |
| 93.7% | 94.7% | 96.1% | 96.1% |
| (1) | Historical Occupancies are the annual average physical occupancy of each respective year. |
| (2) | Based on the underwritten rent roll dated June 30, 2023. |
| 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 – Lacey Market Square | ||
The following table presents certain information relating to the major tenants (of which, certain tenants may have co-tenancy provisions) at the Lacey Market Square Property:
| Tenant Summary(1) | |||||||||
| Tenant | Ratings Moody’s/S&P/Fitch(2) | Net Rentable Area (SF) | % of Total NRA | UW Base Rent PSF | UW Base Rent | % of Total UW Base Rent | Lease Expiration Date | ||
| Fred Meyer | Baa1/BBB/NR | 196,996 | 71.2 | % | $8.25 | $1,625,217 | 52.3 | % | 1/31/2030 |
| Planet Fitness | NR/NR/NR | 20,413 | 7.4 | $12.10 | 246,996 | 7.9 | 3/31/2028 | ||
| JP Morgan | A1/A-/NR | 3,300 | 1.2 | $38.50 | 127,050 | 4.1 | 6/7/2027 | ||
| Department of Children, Youth and Families | NR/NR/NR | 4,396 | 1.6 | $20.75 | 91,217 | 2.9 | 6/30/2028 | ||
| Minh Dang (Fresh Pho) | NR/NR/NR | 2,911 | 1.1 | $30.00 | 87,330 | 2.8 | 9/30/2035 | ||
| Jerry Ki Duk Choi and Deanna C. Choi | NR/NR/NR | 3,082 | 1.1 | $26.50 | 81,667 | 2.6 | 8/31/2028 | ||
| Rent-A-Center(3) | NR/NR/NR | 3,993 | 1.4 | $20.40 | 81,457 | 2.6 | 2/28/2027 | ||
| Sound Sewing & Vacuum | NR/NR/NR | 2,000 | 0.7 | $30.00 | 60,000 | 1.9 | 5/31/2028 | ||
| For Your Nails | NR/NR/NR | 1,450 | 0.5 | $29.65 | 42,995 | 1.4 | 10/31/2030 | ||
| Carol Luong DMD PLLC | NR/NR/NR | 1,600 | 0.6 | $26.27 | 42,025 | 1.4 | 11/30/2026 | ||
| Major Tenants | 240,141 | 86.9 | % | $10.35 | $2,485,953 | 80.0 | % | ||
| Other Tenants | 25,579 | 9.3 | $24.31 | $621,762 | 20.0 | ||||
| Occupied Collateral Total / Wtd. Avg. | 265,720 | 96.1 | % | $11.70 | $3,107,715 | 100.0 | % | ||
| Vacant Space | 10,779 | 3.9 | |||||||
| Collateral Total | 276,499 | 100.0 | % | ||||||
| (1) | Based on the underwritten rent roll dated June 30, 2023. |
| (2) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
| (3) | Rent-A-Center has a co-tenancy provision with Fred Meyer. If Fred Meyer vacates or ceases conducting business at the Lacey Market Square Property, Rent-A-Center may (i) terminate the lease anytime 180 days after a co-tenancy violation has existed and (ii) beginning 180 days after the existence of a co-tenancy violation, receive an abatement of 50% of minimum annual rent commencing the month after business has ceased and throughout the term of the 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. | ||
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| No. 10 – Lacey Market Square | ||
The following table presents certain information relating to the lease rollover schedule at the Lacey Market Square Property:
| Lease Rollover Schedule(1)(2) | |||||||||
| 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 | 10,779 | 3.9% | NAP | NAP | 10,779 | 3.9% | NAP | NAP |
| 2023 & MTM | 5 | 5,186 | 1.9 | $97,974 | 3.2% | 15,965 | 5.8% | $97,974 | 3.2% |
| 2024 | 2 | 2153 | 0.8 | 47,778 | 1.5 | 18,118 | 6.6% | $145,752 | 4.7% |
| 2025 | 2 | 2,305 | 0.8 | 57,614 | 1.9 | 20,423 | 7.4% | $203,366 | 6.5% |
| 2026 | 3 | 4,643 | 1.7 | 113,435 | 3.7 | 25,066 | 9.1% | $316,801 | 10.2% |
| 2027 | 5 | 11,225 | 4.1 | 319,009 | 10.3 | 36,291 | 13.1% | $635,810 | 20.5% |
| 2028 | 9 | 34,777 | 12.6 | 616,462 | 19.8 | 71,068 | 25.7% | $1,252,273 | 40.3% |
| 2029 | 1 | 2,084 | 0.8 | 38,554 | 1.2 | 73,152 | 26.5% | $1,290,827 | 41.5% |
| 2030 | 2 | 198,446 | 71.8 | 1,668,212 | 53.7 | 271,598 | 98.2% | $2,959,038 | 95.2% |
| 2031 | 0 | 0 | 0.0 | 0 | 0.0 | 271,598 | 98.2% | $2,959,038 | 95.2% |
| 2032 | 2 | 1,990 | 0.7 | 61,347 | 2.0 | 273,588 | 98.9% | $3,020,385 | 97.2% |
| 2033 | 0 | 0 | 0.0 | 0 | 0.0 | 273,588 | 98.9% | $3,020,385 | 97.2% |
| 2034 & Beyond | 1 | 2,911 | 1.1 | 87,330 | 2.8 | 276,499 | 100.0% | $3,107,715 | 100.0% |
| Total | 32 | 276,499 | 100.0% | $3,107,715 | 100.0% | ||||
| (1) | Based on the underwritten rent roll dated June 30, 2023. |
| (2) | Certain tenants may have termination options that are exercisable prior to the originally stated expiration date of the subject lease and that are not considered in the Lease Rollover Schedule. |
The following table presents certain information relating to the underwritten cash flows of the Lacey Market Square Property:
| Operating History and Underwriting Net Cash Flow | ||||||||
| 2020 | 2021 | 2022 | T12 April 2023(1) | Underwritten | Per Square Foot | %(2) | ||
| In Place Rent | $3,130,118 | $2,861,711 | $2,915,460 | $2,950,144 | $3,066,122 | $11.09 | 70.2 | % |
| Contractual Rent Steps | 0 | 0 | 0 | 0 | 41,593 | 0.15 | 1.0 | |
| Potential Income from Vacant Space | 0 | 0 | 0 | 0 | 331,243 | 1.20 | 7.6 | |
| Gross Potential Rent | $3,130,118 | $2,861,711 | $2,915,460 | $2,950,144 | $3,438,958 | $12.44 | 78.7 | % |
| Total Reimbursements | 412,192 | 792,672 | 889,451 | 888,529 | 928,921 | 3.36 | 21.3 | |
| Total Gross Income | $3,542,310 | $3,654,384 | $3,804,911 | $3,838,673 | $4,367,879 | $15.80 | 100.0 | % |
| (Vacancy/Credit Loss) | 0 | 0 | 0 | 0 | (331,243) | (1.20) | (7.6 | ) |
| Effective Gross Income | $3,542,310 | $3,654,384 | $3,804,911 | $3,838,673 | $4,036,636 | $14.60 | 92.4 | % |
| Management Fee | 159,723 | 172,363 | 156,000 | 160,175 | 120,000 | 0.43 | 3.0 | |
| Real Estate Taxes | 443,741 | 445,188 | 467,447 | 416,835 | 487,145 | 1.76 | 12.1 | |
| Insurance | 67,035 | 78,190 | 56,542 | 34,881 | 70,096 | 0.25 | 1.7 | |
| Other Expenses(3) | 257,263 | 298,890 | 328,319 | 354,204 | 354,204 | 1.28 | 8.8 | |
| Total Expenses | $927,762 | $994,631 | $1,008,309 | $966,095 | $1,031,445 | $3.73 | 25.6 | % |
| Net Operating Income | $2,614,549 | $2,659,753 | $2,796,602 | $2,872,578 | $3,005,192 | $10.87 | 74.4 | % |
| Capital Expenditures | 0 | 0 | 0 | 0 | 55,300 | 0.20 | 1.4 | |
| TI/LC | 0 | 0 | 0 | 0 | 138,108 | 0.50 | 3.4 | |
| Net Cash Flow | $2,614,549 | $2,659,753 | $2,796,602 | $2,872,578 | $2,811,784 | $10.17 | 69.7 | % |
| (1) | T12 April 2023 reflects the trailing 12-month period ending April 30, 2023. |
| (2) | % column represents percent of Total Gross Income for all revenue lines and represents percent of Effective Gross Income for the remainder of fields. |
| (3) | Other Expenses include CAM expenses, utilities and general and administrative expenses. |
| 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 – Lacey Market Square | ||
Environmental. The Phase I environmental report, dated March 21, 2023, identifies a recognized environmental condition at the Lacey Market Square Property associated with impacts to soil and groundwater along the southern portion of the Lacey Market Square Property, which are migrating onsite from an offsite, adjacent property that formerly operated as a dry cleaning facility. A premises environmental liability environmental insurance policy, issued by SiriusPoint Specialty Insurance Corporation with Citi Real Estate Funding Inc. and its successors and/or assigns as the named insured and the borrowers as an additional named insured, was in place at the time of origination of the Lacey Market Square Mortgage Loan. The policy term is eight years with a limit of liability of $3,800,000 (per claim and in the aggregate) and with a deductible of $25,000. See “Description of the Mortgage Pool—Environmental Considerations” in the Preliminary Prospectus.
The Market. The Lacey Market Square Property is located at 700 Sleater Kinney Road Southeast in Lacey, Washington, within Thurston County. Lacey is located approximately 20 miles southwest of Tacoma and 50 miles southwest of Seattle, Washington. According to the 2020 census, Lacey had a population of 53,526. Access to the Lacey Market Square is provided by Interstate 5, a major north-south Interstate Highway that has average daily traffic counts of over 100,00 vehicles and runs less than a mile from the Lacey Market Square Property.
According to the Appraisal, the Lacey Market Square Property is located within the Lacey Retail submarket of the Olympia Retail Market. As of December 31, 2022, the Lacey Retail submarket had inventory of 4,821,991 square feet, a vacancy rate of 0.9% and average asking rent of $30.24 per square foot with no new deliveries in 2022.
According to the Appraisal, the 2022 population within a 1-, 3- and 5-mile radius of the Lacey Market Square Property was 8,293, 74,432 and 170,681, respectively. The 2022 average household income within the same radii was $57,636, $86,785 and $94,164, respectively.
The following table presents information relating to the appraisal’s comparable sales for the Lacey Market Square Property:
| Comparable Sales Summary (1) | |||||
| Comparable Property | Location | Sale Date | Purchase Price |
SF | Purchase Price per SF |
| Lacey Market Square | Lacey, WA | NAP | NAP | 276,499 | NAP |
| Sunset Square Shopping Center | Bellingham, WA | 1/19/2022 | $53,000,000 | 369,999 | $143 |
| Olympia Square North | Olympia, WA | 4/1/2022 | $22,920,000 | 98,263 | $233 |
| Fred Meyer Shopping Center | Lynnwood, WA | 4/28/2021 | $32,408,548 | 198,706 | $163 |
| Tall Firs Shopping Center | Bonney Lake, WA | 4/28/2021 | $32,777,886 | 170,717 | $192 |
| Fred Meyer Shopping Center | Everett, WA | 4/28/2021 | $26,277,512 | 182,203 | $144 |
| Fred Meyer Shopping Center | Bellingham, WA | 4/28/2021 | $26,243,460 | 164,935 | $159 |
| (1) | Source: Appraisal. |
The Borrowers. The borrowers are Lacey Marketsquare I, LLC and Lacey Marketsquare II, LLC, each a Delaware limited liability company and single purpose entity having at least one independent director in its organizational structure. The borrowers do not hold a fee or leasehold interest in the Lacey Market Square Property. In 2014, the borrowers conveyed the Lacey Market Square Property to LR Lacey Market Square-II LLC and LR Lacey Market Square LLC (collectively the “Lacey Grantors”), as tenants-in-common, subject to the then-existing mortgage loan financing, and in connection with such transfer the borrowers made the Subordinate Loan (as defined below) to the Lacey Grantors and in connection with such transfer, the borrowers granted the Subordinate Loan, as tenants-in-common, to the Lacey Grantors. See “Subordinate Debt”, below. Legal counsel to the borrowers and Lacey Grantors delivered a non-consolidation opinion in connection with the origination of the Lacey Market Square Loan.
The Borrower Sponsors. The borrower sponsors and non-recourse carveout guarantors are L&R Towers, and additionally, as to certain non-recourse carveouts, Rubin-Pachulski Properties L.P. and Rubin-Pachulski Properties 36, LLC. Rubin-Pachulski Properties is a private real estate investment company that was founded in 1992 and is headquartered in California. Rubin-Pachulski Properties, through its affiliates, has purchased, managed and sold over 50 commercial properties, with a focus on retail and mixed-use properties ranging in size from 100,000 square feet to 600,000 square feet.
Property Management. The Lacey Market Square Property is managed by LR Property Management, LLC, a borrower affiliated property management company.
Escrows and Reserves. At origination of the Lacey Market Square Loan, the borrowers deposited approximately (i) $59,210 into a reserve account for real estate taxes, (ii) $173,759 into a reserve account for unfunded obligations, (iii) $11,085 into a reserve account for gap rent, and (iv) $57,463 into a deferred maintenance 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. 10 – Lacey Market Square | ||
Tax Reserve – 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 $29,605).
Insurance Reserve – The borrowers are required to deposit into an insurance reserve, on a monthly basis, 1/12th of an amount which would be sufficient to pay insurance premiums due for the renewal of coverage, unless an acceptable blanket policy is in place. An acceptable blanket policy was in place at origination of the Lacey Market Square Loan.
Replacement Reserve – On each monthly payment date, the borrowers are required to deposit $4,518 into a replacement reserve.
TI / LC Reserve – On each monthly payment date, the borrowers are required to deposit approximately $11,509 into a TI / LC reserve, subject to a cap of $500,000.
Fixed Deposit Reserve – On each monthly payment date, beginning with the payment date occurring in May 2028, the borrowers are required to deposit approximately $52,141 into a fixed deposit reserve; provided, however, if the Fred Meyer Renewal Condition has been satisfied, then no further deposits to the fixed deposit reserve account will be required. In lieu of ongoing deposits to the fixed deposit reserve, the borrowers may elect at any time to deliver a letter of credit in the amount of $312,884, and, subsequent to delivery of the letter of credit, any funds then on deposit in the fixed deposit reserve will be released to the borrowers provided no Trigger Period then exists. The “Fred Meyer Renewal Condition” means each of the following conditions: (a) the exercise by Fred Meyer of its option to extend the term of Fred Meyer’s lease to at least January 31, 2035 in accordance with such lease, (b) Fred Meyer (or its parent company) maintains an investment-grade rating, and (c) there is no default (beyond applicable notice and cure period) under Fred Meyer’s lease.
Lockbox / Cash Management. The Lacey Market Square Loan is structured with a springing lockbox and springing cash management. The Lacey Grantors are required upon the first occurrence of a Trigger Period (as defined below) to cause revenue received by the Lacey Grantors or the property manager to be deposited into such lockbox within one business day after receipt, and within five business days after the occurrence of a Trigger Period, to deliver a notice to each tenant directing them to remit all payments under the applicable lease directly to the lender-controlled lockbox account. All funds deposited into the lockbox are required to be transferred on each business day to or at the direction of the Lacey Grantors unless a Trigger Period exists and the lender elects (in its sole and absolute discretion) to deliver a restricted account notice to the institution maintaining the lockbox account. Upon the occurrence and during the continuance of a Trigger Period, if lender elects to deliver a restricted account notice, 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 Lacey Market Square Loan documents and all excess cash flow funds remaining in the cash management account after the application of such funds in accordance with the Lacey Market Square Loan documents are required to be held by the lender in an excess cash flow reserve account as additional collateral for the Lacey Market Square 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 Lacey Market Square Loan documents, the lender may apply funds to the debt in such priority as it may determine.
A “Trigger Period” means a period (A) commencing upon the earliest of (i) the occurrence and continuance of an event of default, (ii) the debt service coverage ratio being less than 1.10x, and (iii) the occurrence of a Specified Tenant Trigger Period (as defined below) and (B) expiring upon (w) with regard to any Trigger Period commenced in connection with clause (i) above, the cure (if applicable) of such event of default, (x) with regard to any Trigger Period commenced in connection with clause (ii) above, the date that the debt service coverage ratio is equal to or greater than 1.15x for two consecutive calendar quarters, (y) with regard to any Trigger Period commenced in connection with clause (iii) above, a Specified Tenant Trigger Period ceasing to exist.
A “Specified Tenant” means as applicable, Fred Meyer or any other lessee(s) of the Specified Tenant space (or any portion thereof) and any guarantor(s) of the applicable related Specified Tenant lease(s).
A “Specified Tenant Trigger Period” means a period (A) commencing upon the first to occur of (i) Specified Tenant being in default under the applicable Specified Tenant lease beyond any applicable notice and cure periods, (ii) Specified Tenant failing to be in actual, physical possession of the Specified Tenant space (or applicable portion thereof), (iii) Specified Tenant failing to be open for business during customary hours and/or “going dark” in ten percent or more of the Specified Tenant space (or applicable portion thereof), (iv) a Specified Tenant giving notice that it is terminating its lease for all or any portion of the Specified Tenant space (or applicable portion thereof) or the Specified Tenant space being added to a “store closure list” issued by Specified Tenant, The Kroger Company, or an affiliate of either of the foregoing, and which store closure shall be effective within 12 months of the date of such issuance, (v) any termination or cancellation of any Specified Tenant lease (including, without limitation, rejection in any bankruptcy or similar insolvency proceeding) and/or any Specified Tenant lease failing to otherwise be in full force and effect, (vi) any bankruptcy or similar insolvency of Specified Tenant, (vii) Specified Tenant failing to extend or renew the applicable Specified Tenant lease for the applicable Specified Tenant renewal term on or prior to the earlier to occur of (1) the applicable Specified Tenant extension deadline and (2) the date required under a Specified Tenant lease by which the tenant thereunder is required to give notice of its exercise of a renewal option thereunder, in each case, in accordance with the applicable terms and conditions thereof and the Lacey Market Square Loan documents, and (viii) Specified Tenant ceasing to satisfy the Credit Rating Condition (as defined below) (any such occurrence, a “Credit Rating Trigger”), and (B) expiring upon the first to occur of the lender’s receipt of evidence reasonably acceptable to the lender of (1) the satisfaction of the applicable Specified Tenant Cure Conditions (as defined below), or (2) the Lacey Grantors leasing the entire Specified Tenant space (or
| 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 – Lacey Market Square | ||
applicable portion thereof) pursuant to one or more leases in accordance with the applicable terms and conditions of the Lacey Market Square Loan documents, the applicable tenant(s) under such lease(s) being in actual, physical occupancy of the space demised under its lease, all contingencies to effectiveness of such lease have expired or been satisfied, each such lease has commenced and a rent commencement date has been established and, in the lender’s judgment, the applicable Specified Tenant Excess Cash Flow Condition (as defined below) is satisfied in connection therewith.
“Specified Tenant Cure Conditions” means each of the following, as applicable (i) the Specified Tenant has cured all defaults under the applicable Specified Tenant lease and no other default under such Specified Tenant Lease occurs for a period of three consecutive months following such cure, (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 in accordance with clause (vii) of the definition of “Specified Tenant Trigger Period”, the applicable Specified Tenant has renewed or extended the applicable Specified Tenant lease in accordance with the terms thereof and the Lacey Market Square Loan documents for the applicable renewal term and, in lender’s judgment, the applicable Specified Tenant Excess Cash Flow Condition is satisfied in connection therewith, (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 and has affirmed the applicable Specified Tenant lease pursuant to 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 and (vii) in the event the Specified Tenant Trigger Period is due to a Credit Rating Trigger (as defined below), the applicable Specified Tenant with respect to which such Credit Rating Trigger occurred satisfies the Credit Rating Cure Condition (as defined below).
“Specified Tenant Excess Cash Flow Condition” means with respect to curing any Specified Tenant Trigger Period by re-tenanting the
applicable Specified Tenant space, sufficient Specified Tenant excess cash flow funds exist to cover all anticipated leasing commissions, tenant improvement costs, tenant allowances, free rent periods, and/or rent abatement periods to be incurred in connection with any such re-tenanting; and (b) with respect to curing any Specified Tenant Trigger Period by renewal/extension of any Specified Tenant lease, sufficient Specified Tenant excess cash flow funds exist to cover all anticipated leasing commissions, tenant improvement costs, tenant allowances, free rent periods, and/or rent abatement periods to be incurred in connection with any such renewal/extension. I no event will any excess cash flow funds which are being utilized to satisfy the Specified Tenant Excess Cash Flow Condition with respect to the cure of any Specified Tenant Trigger Period be available, credited, or otherwise taken into account in satisfying the Specified Tenant Excess Cash Flow Condition with respect to any other Specified Tenant Trigger Period.
A “Credit Rating Trigger Period” shall mean the Specified Tenant failing to maintain to the extent that, as of the applicable determination, a long-term unsecured debt rating of not less than investment grade (the “Credit Rating Condition”).
A “Credit Rating Cure Condition” shall mean the Specified Tenant as of the applicable date of determination, maintains (and has maintained for at least two consecutive calendar quarters) a long-term unsecured debt rating of at least equivalent to BBB by S&P or Baa1 by Moody’s.
Subordinate Debt. Loan proceeds were used, in part, to refinance a mortgage loan secured by the Lacey Market Square Property that was originated in 2014 (the “Original Loan”). Subsequent to the origination of such mortgage loan, the borrowers conveyed the Lacey Market Square Property to the Lacey Grantors subject to the lien of the Original Loan, and in connection with such transfer, the borrowers granted a mortgage loan to the Lacey Grantors, as borrowers in an amount not to exceed $26,400,000 (the “Subordinate Loan”). The Subordinate Loan, as of the date of origination of the Lacey Market Square Loan, is evidenced by two amended and restated wraparound promissory notes, each dated October 11, 2023, in the aggregate principal amount of $26,400,000 in favor of the borrowers and secured by a wraparound mortgage against the Lacey Market Square Property in favor of the borrowers as tenants-in-common. In connection with the origination of the Lacey Market Square Loan, the mortgage granted in connection with the Original Loan was assigned to the lender and thereafter amended and restated by the borrowers (which remained obligated thereunder, since they were not released from liability for the Original Loan upon the sale of the Lacey Market Square Property to the Lacey Grantors). As the Lacey Grantors are the fee owners of the Lacey Market Square Property, the Lacey Grantors executed certain of the Lacey Market Square Loan documents, including the lender’s mortgage, for the purpose of ratifying and consenting to the execution, delivery and recordation of such Lacey Market Square Loan documents, as applicable, and, with respect to the lender’s mortgage, for the purpose of agreeing that the Lacey Market Square Property will be bound thereby as if the Lacey Grantors had executed and delivered such mortgage. Pursuant to a subordination and standstill agreement (the “Subordination Agreement”), the borrowers have agreed that each of the wraparound mortgage, wraparound promissory notes and all documents executed in connection therewith are subordinate in priority and payment to each of the Lacey Market Square Loan documents. Further, pursuant to the Subordination Agreement, the borrowers have agreed that they will not accept any prepayment of principal or interest with respect to the Subordinate Loan, accept any payment of principal, interest and/or other amounts that may from time to time be due under any Subordinate Loan documents, declare a default under any of the Subordinate Loan documents, accelerate all or any part of the Subordinate Loan indebtedness, accept any new or additional collateral or security for all or any part of the subordinate loan indebtedness, or take any enforcement action, in any such case until one year and one day following the payment following the payment in full of the Lacey Market Square 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. | ||
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| No. 10 – Lacey Market Square | ||
Mezzanine Debt. None.
Partial Release. 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. | ||
| 134 | ||
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| No. 11 – Dels Multifamily Portfolio | ||
| Mortgage Loan Information | Property Information | |||
| Mortgage Loan Seller: | GACC | Single Asset / Portfolio: | Portfolio | |
| Original Principal Balance: | $23,650,000 | Title: | Fee | |
| Cut-off Date Principal Balance: | $23,650,000 | Property Type – Subtype: | Multifamily – Low Rise | |
| % of IPB: | 3.0% | Net Rentable Area (Units): | 523 | |
| Loan Purpose: | Refinance | Location(1): | Various, Various | |
| Borrower: | Dels Armo LLC | Year Built / Renovated(1): | Various / Various | |
| Borrower Sponsor: | Mark J. Bertel, Jr. | Occupancy(1): | 98.1% | |
| Interest Rate: | 7.41400% | Occupancy Date: | 8/17/2023 | |
| Note Date: | 9/27/2023 | 4th Most Recent NOI (As of)(2): | NAV | |
| Maturity Date: | 10/6/2028 | 3rd Most Recent NOI (As of)(2): | NAV | |
| Interest-only Period: | 60 months | 2nd Most Recent NOI (As of)(2): | NAV | |
| Original Term: | 60 months | Most Recent NOI (As of): | $2,916,211 (T-3 6/30/2023) | |
| Original Amortization Term: | None | UW Economic Occupancy: | 95.0% | |
| Amortization Type: | Interest Only | UW Revenues: | $4,401,027 | |
| Call Protection: | L(25),D(28),O(7) | UW Expenses: | $1,767,032 | |
| Lockbox / Cash Management: | Springing / Springing | UW NOI: | $2,633,995 | |
| Additional Debt: | No | UW NCF: | $2,503,245 | |
| Additional Debt Balance: | N/A | Appraised Value / Per Unit(3): | $38,300,000 / $73,231 | |
| Additional Debt Type: | N/A | Appraisal Date: | 7/7/2023 | |
| Escrows and Reserves | Financial Information | |||||
| Initial | Monthly | Initial Cap | Cut-off Date Loan / Unit: | $45,220 | ||
| Taxes: | $82,708 | Springing | N/A | Maturity Date Loan / Unit: | $45,220 | |
| Insurance: | $184,810 | Springing | N/A | Cut-off Date LTV: | 61.7% | |
| Replacement Reserves: | $130,750 | Springing | N/A | Maturity Date LTV: | 61.7% | |
| UW NCF DSCR: | 1.41x | |||||
| UW NOI Debt Yield: | 11.1% | |||||
| Sources and Uses | |||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | ||
| Mortgage Loan | $23,650,000 | 100.0% | Loan Payoff | $13,331,649 | 56.4 | % | |
| Return of Equity | 8,701,118 | 36.8 | |||||
| Closing Costs | 1,218,965 | 5.2 | |||||
| Upfront Reserves | 398,268 | 1.7 | |||||
| Total Sources | $23,650,000 | 100.0% | Total Uses | $23,650,000 | 100.0 | % | |
| (1) | See below for full details in the Property Overview chart. |
| (2) | Historical cash flows are unavailable due to renovations and lease up in the majority of the properties in the last few years. |
| (3) | The Appraised Value represents the “as portfolio” value which includes a portfolio premium to the Dels Multifamily Portfolio Properties if sold together on a bulk basis. The sum of the “as-is” appraised values on a stand-alone basis is $37,220,000. The Cut-off Date LTV Ratio and Maturity Date LTV Ratio based on the aggregate stand-alone appraised “as-is” values are 63.5% and 63.5%, respectively. |
The Loan. The eleventh largest mortgage loan (the “Dels Multifamily Portfolio Mortgage Loan”) is secured by a first lien mortgage on the borrower’s fee simple interest in ten, low rise multifamily properties located in Arkansas and Missouri, (each, a “Dels Multifamily Portfolio Property”, and collectively, the “Dels Multifamily Portfolio Properties”). The Dels Multifamily Portfolio Mortgage Loan accrues interest at an interest rate of 7.41400% per annum. The Dels Multifamily Portfolio Mortgage Loan has an original term of 60 months, has a remaining term of 59 months and is interest-only for the entire term. The scheduled maturity date of the Dels Multifamily Portfolio Mortgage Loan is October 6, 2028.
The Properties. The Dels Multifamily Portfolio Properties consist of ten multifamily properties comprised of solely studio apartment units located across southern Missouri and northern Arkansas. Each Dels Multifamily Portfolio Property is a former motel/hotel that has since been converted to traditional multifamily use with primarily 12-month leases. The sponsor purchased the majority of the Dels Multifamily Portfolio Properties between 2021-2022 for $7.4 million and invested approximately $26.3 million into the Dels Multifamily Portfolio Properties to reposition the assets. The Dels Multifamily Portfolio Properties range from 10 to 117 units, with an average unit size of 409
| 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. | ||
| 135 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 11 – Dels Multifamily Portfolio | ||
square feet. As of August 17, the Dels Multifamily Portfolio is 98.1% occupied with only 10 vacancies across all 523 units of the Dels Multifamily Portfolio.
Please find a summary of each of the three largest Properties below, for further detail please refer to the Portfolio overview.
The “West End Social Property” is a 100-unit apartment complex located in Mountain Home, Arkansas. The West End Social Property was originally constructed in 1968 and was operated as a motel until it was acquired by the Sponsor in June 2022. The sponsor subsequently invested $6.1 million to renovate and reposition the asset to a multifamily property. Renovations occurred between June 2022 and November 2022 and the West End Social Property reached stabilization February 2023. The average unit size is 411 square feet and each unit features vinyl plank flooring, wet bar with sink and garbage disposal, euro stove, refrigerator, and HVAC. The West End Social Property also offers on-site laundry facilities and features an on-site restaurant (Cadillac Jack’s), which leases space for $6,000/month. The West End Social Property is currently 99.0% leased as of August 17, 2023 at an average rental rate of $778/unit/month with no concessions offered. As of August 17th, there is a waitlist of approximately 37 potential tenants. Note that all leases include full utilities (electricity, water, and wifi) in the rent. The property reached stabilization in February 2023 and demand has been strong since applicants were accepted.
The “Heights Property” is a 117-unit apartment complex located in West Plains, Missouri, the county seat of Howell County. The Heights Property was originally constructed in 1964 and was operated as a motel until it was acquired by the Sponsor in January 2021. The Sponsor subsequently invested $4.5 million to renovate and reposition the asset to a multifamily property with standard 12-month leases. Renovations were completed in phases with the final phase completed in September 2021. The Heights Property reached stabilization in December 2021. The average unit size is 450 square feet and each unit features vinyl plank flooring, wet bar with sink and garbage disposal, refrigerator, and HVAC. The Heights Property also features on-site laundry facilities. The Heights Property is currently 98.3% leased as of August 17, 2023 at an average rental rate of $590/unit/month with no concessions offered. There is a current waitlist of 42 potential tenants. Note that all leases include full utilities (electricity, water, and wifi) in the rent.
The “OZ+MO Commons” is a 66-unit apartment complex located in Branson West, Missouri. The OZ+MO Commons Property was originally constructed in 1977 and was operated as a motel until it was acquired by the Sponsor in December 2021. The Sponsor subsequently invested $3.2 million to renovate and reposition the asset to a multifamily property with standard 12-month leases. Renovations occurred between January 2022 and March 2022 and the OZ+MO Commons Property reached stabilization in July 2022. The average unit size is 450 square feet and each unit features vinyl plank flooring, wet bar with sink and garbage disposal, euro stove, refrigerator, and window unit HVAC. The OZ+MO Commons Property also features on-site laundry facilities. The OZ+MO Commons Property is currently 97.0% leased as of August 17, 2023 at an average rental rate of $753/unit/month with no concessions offered. There is a current waitlist of approximately 53 potential tenants. Note that all leases include full utilities (electricity, water, and wifi) in the rent.
The following is a summary of the property locations comprising the Dels Multifamily Portfolio Properties:
| Portfolio Overview | ||||||||
| Property Name | Address(1) | Allocated Loan Amount | Year Built(1) | Year Renovated(1) | Units(2) | Occupancy(2) | Average Monthly Rental Rate(2) | Average Monthly Market Rental Rate(1) |
| West End Social | 1350 Highway 62 East Mountain Home, AR 72653 | $5,553,000 | 1968 | 2022 | 100 | 99.0% | $778 | $800 |
| The Heights | 2105 Hubert Redburn Drive West Plains, MO 65775 | $3,939,000 | 1964 | 2021 | 117 | 98.3% | $590 | $600 |
| OZ+MO Commons | 17483 Business 13 Branson West, MO 65737 | $3,026,000 | 1977 | 2022 | 66 | 97.0% | $753 | $750 |
| Wyota Commons | 1221 Millcreek Road Lebanon, MO 65536 | $2,432,000 | 1967 | 2022 | 50 | 96.0% | $769 | $750 |
| Sylamore Studios | 428 Sylamore Avenue Mountain View, AR 72560 | $2,362,000 | 1980 | 2022 | 55 | 98.2% | $652 | $660 |
| Montauk Studios | 209 South Highway 63 Licking, MO 65542 | $2,272,000 | 2000 | 2022 | 52 | 98.1% | $694 | $695 |
| The Dels | 145 South Main Street Mountain Home, AR 72653 | $1,979,000 | 1960-1970 | 2021 | 43 | 100.0% | $629 | $675 |
| Bull Shoals | 1104 Bull Shoals Dam Boulevard Bull Shoals, AR 72619 | $702,000 | 1953 | 2022 | 16 | 93.8% | $683 | $750 |
| Center City Commons | 548 Highway 62 East Mountain Home, AR 72653 | $696,000 | 1960 | 2022 | 14 | 100.0% | $828 | $850 |
| North Village | 715 Highway 5 North Mountain Home, AR 72653 | $689,000 | 2020 | NAP | 10 | 100.0% | $1,026 | $1,050 |
| Total/Wtd. Avg. | 523 | 98.1% | $701 | $713 | ||||
| (1) | Source: Appraisal. |
| (2) | Source: Underwritten Rent Roll dated August 17, 2023. |
| 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. | ||
| 136 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 11 – Dels Multifamily Portfolio | ||
The following table presents certain information relating to the operating history and underwritten cash flows of the Dels Multifamily Portfolio Properties:
| Operating History and Underwritten Net Cash Flow | ||||||
| TTM(1) | T-3(2) | Underwritten | Per Unit | %(3) | ||
| Gross Potential Rent | $4,107,815 | $4,584,420 | $4,384,260 | $8,383 | 94.9 | % |
| Total Other Income(4) | 0 | 0 | 235,980 | 451 | 5.1 | |
| Net Rental Income | $4,107,815 | $4,584,420 | $4,620,240 | 8,834 | 100.0 | % |
| (Vacancy/Credit Loss) | (0) | (0) | (219,213) | (419) | (4.7 | ) |
| Effective Gross Income | $4,107,815 | $4,584,420 | $4,401,027 | $8,415 | 95.3 | % |
| Total Expenses | 1,114,296 | 1,136,844 | 1,767,032 | 3,379 | 40.2 | |
| Net Operating Income | $2,993,519 | $3,447,576 | $2,633,995 | $5,036 | 59.8 | % |
| Total Capex/RR | 0 | 0 | 130,750 | 250 | 3.0 | |
| Net Cash Flow | $2,993,519 | $3,447,576 | $2,503,245 | $4,786 | 56.9 | % |
| (1) | TTM represents the trailing 12 months ending June 2023. |
| (2) | T-3 represents the trailing 3 months ending June 2023 annualized. |
| (3) | % column represents percent of Net Rental Income for all revenue lines and represents percent of Effective Gross Income for the remainder of the fields. |
| (4) | Total Other Income is inclusive of commercial income. |
The Market. Due to the limited supply throughout the northern Arkansas and southern Missouri region, the ten Dels Multifamily Portfolio Properties fall outside of markets that are directly covered by third party market research firms. However, the portfolio is centrally located between each of the surrounding metropolitan regions including Springfield and Little Rock. Each of the Dels Multifamily Portfolio Properties are located within approximately 10 miles or less of one of the Springfield and Little Rock metropolitan areas.
According to a third-party market research report, Springfield’s population has grown by approximately 21,000 people over the last five years, an increase of 4.5%, outpacing growth across the rest of the country. The number of households has risen by 6.7% over the last five years. Vacancy has been under 5% in the submarket for the last three years but has noticed a small uptick from 2022, 3.6%, to 4.7% year to date as of the third-party market research report dated October 5, 2023. According to the report, Springfield remains a relatively affordable market with rents averaging $876/month year to date across all multifamily categories. The growth in Springfield’s population is connected to the region’s concentration of logistics employment and the overall affordability of the market. The logistics industry was a leading job creator in the aftermath of the pandemic and throughout 2021. The presence of Missouri State University also adds stability to the region through a steady source of income, spending, and workforce.
According to a third-party market research report, the Little Rock multifamily market currently has a vacancy rate of 8.8% with rents averaging $961/month year to date as of the third-party market research report dated 10/5/2023. According to the report, recent job gains were concentrated in the public sector and logistics space with the labor force still recovering from pre-pandemic levels. The major employers within the region include the University of Arkansas, Baptist Health, the Little Rock Air Force Base, Arkansas Children’s Hospital, and Central Arkansas Veterans Healthcare System.
| 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. | ||
| 137 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 12 – Keyport Industrial Portfolio | ||
| Mortgage Loan Information | Property Information | |||
| Mortgage Loan Seller: | CREFI | Single Asset / Portfolio: | Portfolio | |
| Original Principal Balance: | $21,000,000 | Title: | Fee | |
| Cut-off Date Principal Balance: | $21,000,000 | Property Type – Subtype: | Industrial – Warehouse | |
| % of IPB: | 2.7% | Net Rentable Area (SF): | 196,671 | |
| Loan Purpose: | Refinance | Location: | Keyport, NJ | |
| Borrowers: | AP Cass Street DE LLC, C H A B Port LLC, AP Francis Street DE LLC and C H A B Port LLC | Year Built / Renovated(3): | Various / Various | |
| Borrower Sponsors: | Avrohom Schlaff and Chanie Ann Bierman | Occupancy(4): | 93.4% | |
| Interest Rate: | 7.84000% | Occupancy Date: | 6/23/2023 | |
| Note Date: | 9/29/2023 | 4th Most Recent NOI (As of): | $718,797 (12/31/2020) | |
| Maturity Date: | 10/6/2028 | 3rd Most Recent NOI (As of): | $734,449 (12/31/2021) | |
| Interest-only Period: | 60 months | 2nd Most Recent NOI (As of): | $1,116,651 (12/31/2022) | |
| Original Term: | 60 months | Most Recent NOI (As of): | $1,337,664 (TTM 6/30/2023) | |
| Original Amortization Term: | None | UW Economic Occupancy: | 93.4% | |
| Amortization Type: | Interest Only | UW Revenues: | $3,024,424 | |
| Call Protection: | L(25),D(32),O(3) | UW Expenses: | $504,545 | |
| Lockbox / Cash Management: | Springing / Springing | UW NOI: | $2,519,879 | |
| Additional Debt: | No | UW NCF: | $2,460,076 | |
| Additional Debt Balance: | NAP | Appraised Value / Per SF: | $32,700,000 / $166 | |
| Additional Debt Type: | NAP | Appraisal Date: | 7/10/2023 | |
| Escrows and Reserves | Financial Information | ||||||
| Initial | Monthly | Initial Cap | Cut-off Date Loan / SF: | $107 | |||
| Taxes: | $30,462 | $15,231 | N/A | Maturity Date Loan / SF: | $107 | ||
| Insurance: | $49,172 | $9,834 | N/A | Cut-off Date LTV: | 64.2% | ||
| Replacement Reserves: | $359,843 | $0 | N/A | Maturity Date LTV: | 64.2% | ||
| TI/LC(1): | $150,000 | Springing | $150,000 | UW NCF DSCR: | 1.47x | ||
| Deferred Maintenance: | $66,800 | $0 | N/A | UW NOI Debt Yield: | 12.0% | ||
| Other(2): | $538,003 | $0 | N/A | ||||
| Sources and Uses | ||||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |||
| Mortgage Loan | $21,000,000 | 99.7 | % | Loan Payoff | $18,788,500 | 89.2 | % | |
| Borrower Sponsor Equity | 72,153 | 0.3 | Upfront Reserves | 1,194,280 | 5.7 | |||
| Closing Costs | 1,089,373 | 5.2 | ||||||
| Total Sources | $21,072,153 | 100.0 | % | Total Uses | $21,072,153 | 100.0 | % | |
| (1) | On each monthly payment date when the sum on deposit in the TI/LC reserve is less than $150,000, the borrowers are required to deposit $8,194.63 into the TI/LC reserve account, which account is subject to a cap in an amount equal to $150,000. |
| (2) | Other initial reserves include (i) an unfunded obligations reserve of $350,000, (ii) a free rent reserve of $100,618 and (iii) a gap rent reserve of $87,385. |
| (3) | See the “Portfolio Summary” chart below. |
| (4) | Occupancy includes Secret Box Distribution Corp. which has not yet taken occupancy as their tenant improvements are being completed. |
The Loan. The twelfth largest mortgage loan (the “Keyport Industrial Portfolio Mortgage Loan”) has an outstanding balance as of the Cut-off Date of $21,000,000, which is secured by a first mortgage encumbering the borrowers’ fee interest in two industrial warehouse facilities totaling 196,671 square feet in Keyport, New Jersey (the “Keyport Industrial Portfolio Properties”). The Keyport Industrial Portfolio Mortgage Loan was originated by Citi Real Estate Funding Inc. (“CREFI”) on September 29, 2023. The Keyport Industrial Portfolio Mortgage Loan has a five-year, interest-only term and accrues interest at a rate of 7.84000% per annum.
The proceeds of the Keyport Industrial Portfolio Mortgage Loan were primarily used to refinance the existing debt on the Keyport Industrial Portfolio Properties, return equity to the sponsor, pay closing costs and fund upfront reserves.
The Properties. The Keyport Industrial Portfolio Properties are comprised of a 121,395 square foot industrial warehouse property located at 3 Cass Street in Keyport, New Jersey (the “3 Cass Street Property”) and a 75,276 square foot industrial warehouse property located at 120 Francis Street in Keyport, New Jersey (the “120 Francis Street 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. | ||
| 138 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 12 – Keyport Industrial Portfolio | ||
The following table presents certain information relating to the Keyport Industrial Portfolio Properties:
| Portfolio Summary | |||||||||
| Property Name | City, State(1) | Year Built / Renovated(1) | Sq. Ft.(2) | Occupancy(2) | Allocated Cut-off Date Balance | % of Cut-off Date Balance | Appraised Value(1) | U/W NOI(2) | % of U/W NOI |
| 3 Cass Street | Keyport, NJ | 1920 / 1980 | 121,395 | 89.3% | $14,700,000 | 70.0% | $21,800,000 | $1,732,120 | 68.7% |
| 120 Francis Street | Keyport, NJ | 1900 / 2020 | 75,276 | 100.0% | 6,300,000 | 30.0% | 10,900,000 | $787,759 | 31.3% |
| Total | 196,671 | 93.4% | $21,000,000 | 100.0% | $32,700,000 | $2,519,879 | 100.0% | ||
| (1) | Source: Appraisals |
| (2) | Based on the underwritten rent rolls dated June 23, 2023. |
3 Cass Street Property
The 3 Cass Street Property is a 121,395 square foot industrial warehouse facility located at 3 Cass Street in Keyport, New Jersey. The 3 Cass Street Property was built in 1920, renovated in 1980, and is situated on an approximately 8.4-acre site. The 3 Cass Street Property features 16-foot clear heights, 6 dock-high doors, and 10 drive-in doors. The 3 Cass Street Property was 89.3% occupied by 8 unique tenants as of June 23, 2023. The three largest tenants by underwritten base rent at the 3 Cass Street Property are Automoby LLC, BTNJ Keyport and Secret Box Distribution Corp.
120 Francis Street Property
The 120 Francis Street Property is a 75,276 square foot industrial warehouse facility located at 120 Francis Street in Keyport, New Jersey. The 120 Francis Street Property was built in 1900, renovated in 2020 and is situated on an approximately 8.9-acre site. The 120 Francis Street Property features 16-foot clear heights, 5 dock-high doors, and 18 drive-in doors. The 120 Francis Street Property was 100.0% occupied by 14 unique tenants as of June 23, 2023. The three largest tenants by underwritten base rent at the 120 Francis Street Property are Method Associates, Keyport Borough and Ariston Chimney LLC.
Major Tenants. The three largest tenants based on underwritten base rent are Automoby LLC (“Automoby”), BTNJ Keyport (“Best Tile Keyport”) and Secret Box Distribution Corp. (“Secret Box Distribution”).
Automoby (30,000 square feet; 15.3% of net rentable area (“NRA”); 30.2% of underwritten base rent). Automoby is a New Jersey based automobile company that specializes in the sale and purchase of used cars, auto parts, and mechanical parts. Automoby recently executed a new ten-year lease that has a lease term through January 2033 with no renewal options or termination options. Automoby’s lease at the 3 Cass Street Property is for 30,000 square feet of indoor space, which includes warehouse distribution and office space in the front, plus approximately two acres of outdoor space that is used for the storage of cars. The underwritten rent attributable to Automoby includes both the 30,000 square feet of indoor space and two acres of outdoor space.
Best Tile Keyport (40,001 square feet; 20.3% of NRA; 19.3% of underwritten base rent). Founded in 1956, Best Tile Keyport is a construction services firm that is based in New Jersey and offers services in tile design, latest tile fashion, virtual selection services and expert installation advice. Best Tile Keyport has been at the 3 Cass Street Property since 1980 and has a current lease term through June 2029 with no renewal or termination options.
Secret Box Distribution (25,000 square feet; 12.7% of NRA; 13.0% of underwritten base rent). Founded in 2020, Secret Box Distribution is a food distributor and supplier based in New Jersey that offers services to grocery retailers in product sourcing and deliveries. Secret Box Distribution has not yet taken occupancy at the 3 Cass Street Property as its tenant improvements are being completed. Secret Box Distribution has a current lease term through May, 2033 with no renewal or termination options.
The following table presents certain information relating to the historical and current occupancy of the Keyport Industrial Portfolio Properties:
| Historical and Current Occupancy(1) | |||
| 2020 | 2021 | 2022 | Current(2) |
| NAV | NAV | NAV | 93.4% |
| (1) | Historical Occupancies are not available because the borrower sponsor acquired the Keyport Industrial Portfolio Properties in 2022. |
| (2) | Based on the underwritten rent roll dated June 23, 2023. |
| 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. | ||
| 139 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 12 – Keyport Industrial Portfolio | ||
The following table presents certain information relating to the largest tenants based on underwritten base rent of the Keyport Industrial Portfolio 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 | UW Base Rent | % of Total UW Base Rent | Lease Expiration Date |
| Automoby LLC | 3 Cass Street | NR/NR/NR | 30,000 | 15.3% | $29.25 | $877,368 | 30.2% | 1/31/2033 |
| BTNJ Keyport | 3 Cass Street | NR/NR/NR | 40,001 | 20.3 | 14.03 | 561,345 | 19.3 | 6/30/2029 |
| Secret Box Distribution Corp(3) | 3 Cass Street | NR/NR/NR | 25,000 | 12.7 | 15.11 | 377,787 | 13.0 | 5/31/2033 |
| Method Associates(4) | 120 Francis Street | NR/NR/NR | 25,520 | 13.0 | 12.07 | 308,089 | 10.6 | 10/31/2027 |
| Key Port Borough | 120 Francis Street | NR/NR/NR | 6,954 | 3.5 | 14.67 | 102,000 | 3.5 | 7/31/2026 |
| Ariston Chimney LLC | 120 Francis Street | NR/NR/NR | 7,400 | 3.8 | 13.23 | 97,865 | 3.4 | 8/31/2028 |
| Fort Lauderdale Millwork Inc dba FTLA Millwork(5) | 120 Francis Street | NR/NR/NR | 6,500 | 3.3 | 14.24 | 92,560 | 3.2 | 12/31/2033 |
| Kastle Fundraising | 3 Cass Street | NR/NR/NR | 4,500 | 2.3 | 13.73 | 61,800 | 2.1 | 8/31/2028 |
| Legacy Auto Customs and Graphics LLC | 120 Francis Street | NR/NR/NR | 3,800 | 1.9 | 16.00 | 60,800 | 2.1 | 8/31/2028 |
| Retro Productions | 120 Francis Street | NR/NR/NR | 8,764 | 4.5 | 6.57 | 57,600 | 2.0 | 7/31/2024 |
| Largest Tenants | 158,439 | 80.6% | $16.39 | $2,597,215 | 89.4% | |||
| Remaining Tenants | 25,232 | 12.8 | 12.24 | 308,866 | 10.6 | |||
| Total Occupied | 183,671 | 93.4% | $15.82 | $2,906,081 | 100.0% | |||
| Vacant Space | 13,000 | 6.6 | ||||||
| Total / Wtd. Avg. | 196,671 | 100.0% | ||||||
| (1) | Based on the underwritten rent rolls dated June 23, 2023. |
| (2) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
| (3) | The third largest tenant, Secret Box Distribution Corp, has not yet taken occupancy as it is building out its space. |
| (4) | Method Associates has a one-time right to terminate its lease with respect to 19,975 square feet of space effective October 31, 2025 subject to the tenant providing notice to the landlord on or prior to April 31, 2025. |
| (5) | Fort Lauderdale Millwork Inc dba FTLA Millwork has the one-time right to terminate its lease effective December 31, 2028 subject to the tenant providing notice to the landlord on or prior to June 30, 2028. |
| 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. | ||
| 140 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 12 – Keyport Industrial Portfolio | ||
The following table presents certain information relating to the tenant lease expirations at the Keyport Industrial Portfolio Properties:
| Lease Rollover Schedule(1)(2) | |||||||||
| 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 | 13,000 | 6.6% | NAP | NAP | 13,000 | 6.6% | NAP | NAP |
| 2023 | 0 | 0 | 0.0 | $0 | 0.0% | 13,000 | 6.6% | $0 | 0.0% |
| 2024 | 2 | 12,465 | 6.3 | 80,379 | 2.8 | 25,465 | 12.9% | $80,379 | 2.8% |
| 2025 | 6 | 13,110 | 6.7 | 167,243 | 5.8 | 38,575 | 19.6% | $247,622 | 8.5% |
| 2026 | 3 | 9,106 | 4.6 | 131,148 | 4.5 | 47,681 | 24.2% | $378,770 | 13.0% |
| 2027 | 3 | 29,032 | 14.8 | 354,105 | 12.2 | 76,713 | 39.0% | $732,876 | 25.2% |
| 2028 | 4 | 18,457 | 9.4 | 264,145 | 9.1 | 95,170 | 48.4% | $997,021 | 34.3% |
| 2029 | 1 | 40,001 | 20.3 | 561,345 | 19.3 | 135,171 | 68.7% | $1,558,366 | 53.6% |
| 2030 | 0 | 0 | 0.0 | 0 | 0.0 | 135,171 | 68.7% | $1,558,366 | 53.6% |
| 2031 | 0 | 0 | 0.0 | 0 | 0.0 | 135,171 | 68.7% | $1,558,366 | 53.6% |
| 2032 | 0 | 0 | 0.0 | 0 | 0.0 | 135,171 | 68.7% | $1,558,366 | 53.6% |
| 2033 | 3 | 61,500 | 31.3 | 1,347,715 | 46.4 | 196,671 | 100.0% | $2,906,081 | 100.0% |
| 2034 & Beyond | 0 | 0 | 0.0 | 0 | 0.0 | 196,671 | 100.0% | $2,906,081 | 100.0% |
| Total | 22 | 196,671 | 100.0% | $2,906,081 | 100.0% | ||||
| (1) | Based on the underwritten rent rolls dated June 23, 2023. |
| (2) | Certain tenants may have termination options that are exercisable prior to the originally stated expiration date of the subject lease and that are not considered in the Lease Rollover Schedule. |
The following table presents certain information relating to the operating history and underwritten cash flows of the Keyport Industrial Portfolio Properties:
| Operating History and Underwriting Net Cash Flow | ||||||||
| 2020 | 2021 | 2022 | T12 June 2023(1) | Underwritten | Per Square Foot | %(2) | ||
| In Place Rent(3) | $1,091,144 | $1,134,657 | $1,445,044 | $1,688,439 | $2,564,275 | $13.04 | 79.9% | |
| Commercial Rent Steps(4) | 0 | 0 | 0 | 0 | 341,806 | 1.74 | 10.7 | |
| Potential Income from Vacant Space | 0 | 0 | 0 | 0 | 159,545 | 0.81 | 5.0 | |
| Gross Potential Rent | $1,091,144 | $1,134,657 | $1,445,044 | $1,688,439 | $3,065,626 | $15.59 | 95.5% | |
| Total Reimbursements | 0 | 0 | 86,939 | 122,785 | 143,232 | 0.73 | 4.5 | |
| Total Gross Income | $1,091,144 | $1,134,657 | $1,531,983 | $1,811,224 | $3,208,858 | $16.32 | 100.0% | |
| Parking Income | 0 | 0 | 0 | 0 | 26,886 | 0.14 | 0.8 | |
| (Vacancy/Credit Loss) | 0 | 0 | 0 | 0 | (211,320) | (1.07) | (6.6) | |
| Effective Gross Income | $1,091,144 | $1,134,657 | $1,531,983 | $1,811,224 | $3,024,424 | $15.38 | 94.3% | |
| Management Fee | 32,734 | 34,040 | 45,960 | 54,337 | 90,733 | 0.46 | 3.0 | |
| Real Estate Taxes | 181,157 | 175,373 | 181,676 | 171,301 | 170,256 | 0.87 | 5.6 | |
| Insurance | 54,683 | 79,874 | 112,941 | 116,760 | 112,393 | 0.57 | 3.7 | |
| Other Expenses(5) | 103,773 | 110,921 | 74,756 | 131,163 | 131,163 | 0.67 | 4.3 | |
| Total Expenses | $372,347 | $400,209 | $415,332 | $473,560 | $504,545 | $2.57 | 16.7% | |
| Net Operating Income | $718,797 | $734,449 | $1,116,651 | $1,337,664 | $2,519,879 | $12.81 | 83.3% | |
| Capital Expenditures | 0 | 0 | 0 | 0 | 0 | 0.00 | 0.0 | |
| TI/LC | 0 | 0 | 0 | 0 | 59,804 | 0.30 | 2.0 | |
| Net Cash Flow | $718,797 | $734,449 | $1,116,651 | $1,337,664 | $2,460,076 | $12.51 | 81.3% | |
| (1) | T12 June 2023 reflects the trailing 12-month period ending June 30, 2023. |
| (2) | % column represents percent of Total Gross Income for all revenue lines and represents percent of Effective Gross Income for the remainder of fields. |
| (3) | Underwritten In Place Base Rent includes rent attributed to Secret Box Distribution Corp which has not yet taken occupancy. |
| (4) | Underwritten Commercial Rent Steps include contractual rent steps through August 1, 2024 totaling $341,806. |
| (5) | Other Expenses include repairs and maintenance expenses. |
The Market. The Keyport Industrial Portfolio Properties are located in Keyport, New Jersey within the Monmouth County Warehouse/Distribution submarket of the Central New Jersey market. Through the first quarter of 2023, the Central New Jersey Warehouse/Distribution market had leasing activity of approximately 4.3 million square feet and overall net absorption of approximately 2.1 million square feet.
According to the appraisal, as of the first quarter of 2023, the Central New Jersey market had inventory of 294,963,749 square feet, a vacancy rate of 3.3% and direct weighted average rent of $15.53 per square foot. According to the appraisal, as of the first quarter of 2023, the Monmouth County Warehouse/Distribution submarket has inventory of 9,601,616 square feet, a vacancy rate of 15.6% and direct weighted average rent of $13.02 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. | ||
| 141 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 13 – New Mountain – Cathay Industries | ||
| Mortgage Loan Information | Property Information | |||
| Mortgage Loan Seller: | GSMC | Single Asset / Portfolio: | Single Asset | |
| Original Principal Balance: | $20,520,000 | Title: | Fee | |
| Cut-off Date Principal Balance: | $20,520,000 | Property Type – Subtype: | Industrial – Manufacturing/Warehouse | |
| % of IPB: | 2.6% | Net Rentable Area (SF): | 218,000 | |
| Loan Purpose: | Recapitalization | Location: | Los Angeles, CA | |
| Borrower: | NM VNTR, L.P. | Year Built / Renovated: | 1924 / 1999 | |
| Borrower Sponsors: | New Mountain Net Lease Partners II Corporation | Occupancy: | 100.0% | |
| Interest Rate: | 6.12320% | Occupancy Date: | 10/10/2023 | |
| Note Date: | 10/10/2023 | 4th Most Recent NOI (As of)(1): | NAV | |
| Maturity Date: | 11/6/2028 | 3rd Most Recent NOI (As of)(1): | NAV | |
| Interest-only Period: | 60 months | 2nd Most Recent NOI (As of)(1): | NAV | |
| Original Term: | 60 months | Most Recent NOI (As of)(1): | NAV | |
| Original Amortization Term: | None | UW Economic Occupancy: | 95.0% | |
| Amortization Type: | Interest Only | UW Revenues: | $4,260,240 | |
| Call Protection: | L(23),YM1(1), DorYM1(31),O(5) | UW Expenses: | $852,048 | |
| Lockbox / Cash Management: | Hard / Springing | UW NOI: | $3,408,192 | |
| Additional Debt: | No | UW NCF: | $3,310,092 | |
| Additional Debt Balance: | N/A | Appraised Value / Per SF: | $51,900,000 / $238 | |
| Additional Debt Type: | N/A | Appraisal Date: | 8/3/2023 | |
| Escrows and Reserves | Financial Information | ||||||
| Initial | Monthly | Initial Cap | Cut-off Date Loan / SF: | $94 | |||
| Taxes: | $0 | Springing | N/A | Maturity Date Loan / SF: | $94 | ||
| Insurance: | $0 | Springing | N/A | Cut-off Date LTV: | 39.5% | ||
| Replacement Reserves: | $0 | Springing | $65,400 | Maturity Date LTV: | 39.5% | ||
| TI / LC Reserve: | $0 | Springing | $327,000 | UW NCF DSCR: | 2.60x | ||
| UW NOI Debt Yield: | 16.6% | ||||||
| Sources and Uses | |||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | ||
| Mortgage Loan | $20,520,000 | 100.0% | Recapitalization | $19,272,928 | 93.9 | % | |
| Closing Costs | 1,247,072 | 6.1 | |||||
| Total Sources | $20,520,000 | 100.0% | Total Uses | $20,520,000 | 100.0 | % | |
| (1) | Historical financial information is not available due to the acquisition of the New Mountain – Cathay Industries Property (as defined below) in a sale-leaseback transaction. |
The Loan. The thirteenth largest mortgage loan (the “New Mountain – Cathay Industries Mortgage Loan”) is secured by a first lien mortgage on the borrower’s fee interest in a 218,000 square foot, industrial manufacturing/warehouse facility located in Los Angeles, California (the “New Mountain – Cathay Industries Property”). The New Mountain – Cathay Industries Mortgage Loan was originated by Goldman Sachs Bank USA (“GSBI”) on October 10, 2023 and has a 5-year interest-only term and accrues interest at a rate of 6.12320% per annum. The proceeds of the New Mountain – Cathay Industries Mortgage Loan were used to recapitalize the borrower sponsor’s existing debt on the property, buydown the existing interest rate and pay closing costs.
The Property. The New Mountain – Cathay Industries Property is a 218,000 square foot industrial facility solely occupied by Cathay Industries (“Cathay”), a leading global chemical company that develops and manufactures titanium dioxide pigments and performance additives. The improvements were constructed in 1924 and renovated in 1999 and are situated on a 6.20-acre site in Los Angeles, California. The New Mountain – Cathay Industries Property is a single-story industrial building featuring four drive-in doors, 11 dock doors, 22 parking spaces and clear heights up to 26’.
As of October 10, 2023, the New Mountain – Cathay Industries Property was 100.0% occupied.
| 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. | ||
| 142 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 13 – New Mountain – Cathay Industries | ||
Sole Tenant. The sole tenant at the New Mountain – Cathay Industries Property is Cathay Industries (218,000 square feet; 100.0% of NRA; 100.0% of underwritten base rent). Venator specializes in developing pigments and additives with a primary focus on titanium dioxide and performance additives. Headquartered in Wynyard, United Kingdom, Venator employs approximately 2,800 associates worldwide and sells its products in more than 109 countries. In April 2023, Cathay Industries (“Cathay”), a leading global iron oxide pigment manufacturer, acquired Venator’s iron oxide pigments division for $140 million and assumed Venator’s lease at the New Mountain – Cathay Industries Property as part of the acquisition. Upon purchasing the New Mountain – Cathay Industries Property, the Borrower Sponsor executed an absolute NNN unitary master lease with Venator Americas LLC. The lease is through October 2037 with one 10-year extension option and one nine-year and 11 months extension option and no termination options.
Cathay is a global and sustainable manufacturer of complete color solutions with facilities and divisional offices spanning America, Asia, Australasia, Europe and Africa.
The following table presents certain information relating to the current occupancy of the New Mountain – Cathay Industries Property:
| Current Occupancy(1)(2) |
| Current |
| 100.0% |
| (1) | Current occupancy is based on the underwritten rent roll as of October 10, 2023. |
| (2) | Historical occupancy is not available due to the acquisition of the New Mountain – Cathay Industries Property in a sale-leaseback transaction. In addition, in October 2022 a lease over the New Mountain – Cathay Industries Property was executed with a 15-year initial term and an absolute triple-net (“NNN”) structure. |
The following table presents certain information relating to the sole tenant at the New Mountain – Cathay Industries Property:
| Tenant Summary(1) | |||||||
| Tenant | Ratings Moody’s/S&P/Fitch(2) | Net Rentable Area (SF) | % of Total NRA | UW Base Rent PSF | UW Base Rent | % of Total UW Base Rent | Lease Expiration Date |
| Cathay Industries(3) | NR/NR/NR | 218,000 | 100.0% | $16.18 | $3,526,617 | 100.0% | 10/31/2037 |
| Total Occupied | 218,000 | 100.0% | $16.18 | $3,526,617 | 100.0% | ||
| Vacant Space | 0 | 0.0 | |||||
| Total / Wtd. Avg. | 218,000 | 100.0% | |||||
| (1) | Based on the underwritten rent roll as of October 10, 2023. |
| (2) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
| (3) | In April 2023, Cathay Industries acquired Venator’s iron oxide pigments division for $140 million and assumed Venator’s lease at the New Mountain – Cathay Industries Property as part of the acquisition. |
| 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. | ||
| 143 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 13 – New Mountain – Cathay Industries | ||
The following table presents certain information relating to the tenant lease expiration date at the New Mountain – Cathay Industries Property:
| Lease Rollover Schedule(1) | ||||||||||||||
Year |
Number of Leases Expiring |
Net Rentable Area Expiring |
% of Net Rental Area 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 | NAP | 0 | 0.0% | NAP | NAP | ||||
| 2023 & MTM | 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 | 0 | 0 | 0.0 | 0 | 0.0 | 0 | 0.0% | $0 | 0.0% | |||||
| 2034 & Beyond | 1 | 218,000 | 100.0 | 3,526,617 | 100.0 | 218,000 | 100.0% | $3,526,617 | 100.0% | |||||
| Total | 1 | 218,000 | 100.0 | % | $3,526,617 | 100.0 | % | |||||||
| (1) | Based on the underwritten rent roll as of October 10, 2023. |
The following table presents certain information relating to the underwritten cash flows of the New Mountain – Cathay Industries Property:
| Underwritten Net Cash Flow(1)(2) | ||||
| Underwritten | Per Square Foot | %(3) | ||
| Rents in Place | $3,526,617 | $16.18 | 78.6 | % |
| Contractual Rent Steps(4) | 105,799 | 0.49 | 2.4 | |
| Gross Potential Rent | $3,632,416 | $16.66 | 81.0 | % |
| Recoveries | 852,048 | 3.91 | 19.0 | |
| Net Rental Income | $4,484,464 | $20.57 | 100.0 | % |
| (Vacancy/Credit Loss) | (224,223) | (1.03) | (5.0 | ) |
| Effective Gross Income | $4,260,240 | $19.54 | 95.0 | % |
| Management Fee | 127,807 | 0.59 | 3.0 | |
| Other Operating Expenses | 724,241 | 3.32 | 17.0 | |
| Total Expenses | $852,048 | $3.91 | 20.0 | % |
| Net Operating Income | $3,408,192 | $15.63 | 80.0 | % |
| TI/LC | 65,400 | 0.30 | 1.5 | |
| Replacement Reserves | 32,700 | 0.15 | 0.8 | |
| Net Cash Flow | $3,310,092 | $15.18 | 77.7 | % |
| (1) | Based on the underwritten rent roll as of October 10, 2023. |
| (2) | Historical financial information is not available due to the acquisition of the New Mountain – Cathay Industries Property in a sale-leaseback transaction. In addition, in October 2022 a lease of the New Mountain – Cathay Industries Property was executed with a 15-year initial term and an absolute NNN structure. |
| (3) | The “%” column represents percent of Net Rental Income for all revenue lines and represents percent of Effective Gross Income for the remainder of the fields. |
| (4) | Based on 3.0% rent steps through year one of the lease. |
The Market. The New Mountain – Cathay Industries Property is located in Los Angeles, California. Primary access to the New Mountain – Cathay Industries Property is provided by the Santa Ana Freeway, which has an interchange approximately 2 blocks north of property. The Long Beach Freeway runs in a north/south direction east of the property with an interchange via the Santa Ana Freeway less than one mile and a half from the property. According to the appraisal, the 2023 population within a 1-, 3- and 5-mile radius of the property are
| 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. | ||
| 144 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 13 – New Mountain – Cathay Industries | ||
30,783, 278,176 and 929,570, respectively. In addition, within those same radii, the 2023 median household income is $51,688, $55,293 and $55,863, respectively.
Further, according to the appraisal, the New Mountain – Cathay Industries Property is located within the Vernon submarket of the Los Angeles – CA market. As of December 31, 2022, the Vernon submarket had an inventory of 83,118,945 square feet, a vacancy rate of 4.0% and average asking rent of $16.10 (NNN) 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. | ||
| 145 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 14 – Merit Hill Self Storage | ||
| Mortgage Loan Information | Property Information | |||
| Mortgage Loan Seller: | GSMC | Single Asset / Portfolio: | Portfolio | |
| Original Principal Balance(1): | $20,000,000 | Title: | Fee | |
| Cut-off Date Principal Balance(1): | $20,000,000 | Property Type – Subtype: | Self Storage – Self Storage | |
| % of IPB: | 2.6% | Net Rentable Area (SF): | 832,976 | |
| Loan Purpose: | Refinance | Location(4): | Various | |
| Borrowers(2): | Various | Year Built / Renovated(5): | Various / Various | |
| Borrower Sponsors: | Centerbridge Partners Real Estate Fund, L.P. and CCP III AIV III, L.P. | Occupancy: | 92.6% | |
| Interest Rate: | 7.03000% | Occupancy Date: | 7/31/2023 | |
| Note Date: | 9/22/2023 | 4th Most Recent NOI (As of): | $4,289,044 (12/31/2020) | |
| Maturity Date: | 10/6/2028 | 3rd Most Recent NOI (As of): | $5,690,557 (12/31/2021) | |
| Interest-only Period: | 60 months | 2nd Most Recent NOI (As of): | $7,026,170 (12/31/2022) | |
| Original Term: | 60 months | Most Recent NOI (As of): | $7,244,868 (TTM 7/31/2023) | |
| Original Amortization Term: | None | UW Economic Occupancy: | 100.0% | |
| Amortization Type: | Interest Only | UW Revenues: | $12,172,844 | |
| Call Protection(3): | L(23),YM1(2),DorYM1(28),O(7) | UW Expenses: | $4,830,213 | |
| Lockbox / Cash Management: | Soft / Springing | UW NOI: | $7,342,631 | |
| Additional Debt(1): | Yes | UW NCF: | $7,259,334 | |
| Additional Debt Balance(1): | $65,000,000 | Appraised Value / Per SF(6): | $142,000,000 / $170 | |
| Additional Debt Type(1): | Pari Passu | Appraisal Date(6): | Various | |
| Escrows and Reserves | Financial Information(1) | ||||||
| Initial | Monthly | Initial Cap | Cut-off Date Loan / SF: | $102 | |||
| Taxes: | $0 | Springing | N/A | Maturity Date Loan / SF: | $102 | ||
| Insurance: | $0 | Springing | N/A | Cut-off Date LTV(1): | 59.9% | ||
| Replacement Reserves: | $0 | $6,941 | $249,893 | Maturity Date LTV(1): | 59.9% | ||
| Engineering Reserves | $61,270 | $0 | N/A | UW NCF DSCR: | 1.20x | ||
| UW NOI Debt Yield: | 8.6% | ||||||
| Sources and Uses | ||||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |||
| Whole Loan | $85,000,000 | 99.8 | % | Loan Payoff | $67,545,410 | 79.3 | % | |
| Principal Contribution | 150,000 | 0.2 | Closing Costs | 17,543,320 | 20.6 | |||
| Upfront Reserves | 61,270 | 0.1 | ||||||
| Total Sources | $85,150,000 | 100.0 | % | Total Uses | $85,150,000 | 100.0 | % | |
| (1) | The Merit Hill Self Storage Mortgage Loan (as defined below) is part of a whole loan evidenced by four pari passu note with an outstanding original principal balance as of the Cut-off Date of $85,000,000. The Financial Information presented in the chart above is based on the Merit Hill Self Storage Whole Loan (as defined below). The Cut-off Date Principal Balance of $20,000,000 represents the non-controlling note A-2. |
| (2) | The borrower entities are MHC 50 (Texas Portfolio) LLC, MHC 74 (Colorado Portfolio CO) LLC, MHC 142 (Bourne MA) LLC, MHC 148 (North Main Baytown TX) LLC, MHC 139 (Spring TX) LLC, MHC 120 (Oakland CA) LLC and MHC 140 (Waldorf MD) LLC. |
| (3) | Borrower may release a property or properties from the loan after the expiration of the lockout period by defeasing or prepaying (as applicable), in either case pursuant to the terms of the loan documents, a portion of the Merit Hill Self Storage Whole Loan in an amount equal to 110% of the applicable allocated loan amount for the first 20% of the Merit Hill Self Storage Whole Loan and 115% of the applicable allocated loan amount thereafter, provided that the aggregate portfolio debt yield after giving effect to such release is at least the greater of (x) 8.55% and (y) the aggregate portfolio debt yield immediately prior to such release. |
| (4) | The Merit Hill Self Storage Portfolio is spread across five states: Texas (7 properties), California (1 property), Colorado (2 properties), Massachusetts (1 property) and Maryland (2 properties). |
| (5) | The Merit Hill Self Storage Portfolio properties were built between 1975 and 2017, with renovations at the portfolio properties spanning between 2004 and 2022. |
| (6) | The Appraised Value is based on the “As Is Portfolio” value, inclusive of a 4.8% portfolio premium. The sum of the individual appraised values is $135,490,000, which equates to a Cut-off Date LTV and Maturity Date LTV of 62.7%. |
The Loan. The fourteenth largest mortgage loan (the “Merit Hill Self Storage Mortgage Loan”) is part of a whole loan (the “Merit Hill Self Storage Whole Loan”) evidenced by four pari passu promissory notes in the aggregate original principal amount of $85,000,000, secured by a first lien mortgage on the borrower’s fee interest in a 832,976 square foot, self storage portfolio consisting of 13 individual properties (each a “Merit Hill Self Storage Property”) located across five states, (collectively, the “Merit Hill Self Storage Portfolio”). The Merit Hill Self Storage Whole Loan was co-originated by Goldman Sachs Bank USA (“GSBI”) and Wells Fargo Bank, National Association. (“WFB”) on September 22, 2023 and has a 5-year interest-only term and accrues interest at a rate of 7.0300% per annum.
| 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. | ||
| 146 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 14 – Merit Hill Self Storage | ||
The proceeds of the Merit Hill Self Storage Whole Loan were used to refinance existing debt on the Merit Hill Self Storage Portfolio, distribute equity to the borrower sponsor, pay closing costs and fund upfront reserves. The Merit Hill Self Storage Mortgage Loan is evidenced by the non-controlling Note A-2, with an outstanding principal balance as of the Cut-off Date of $20,000,000. The Merit Hill Self Storage Whole Loan will be serviced pursuant to the pooling and servicing agreement for the future transaction that includes the controlling Note A-1.
The table below summarizes the promissory notes that comprise the Merit Hill Self Storage Whole Loan. The relationship between the holders of the Merit Hill Self Storage Whole Loan will be governed by a co-lender agreement as described under “Description of the Mortgage Pool— The Whole Loans—The Outside 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) | $30,000,000 | $30,000,000 | GSBI | Yes |
| A-2 | $20,000,000 | $20,000,000 | BMO 2023-5C2 | No |
| A-3(1) | $13,750,000 | $13,750,000 | GSBI | No |
| A-4(1) | $21,250,000 | $21,250,000 | WFB | No |
| Whole Loan | $85,000,000 | $85,000,000 | ||
| (1) | Expected to be contributed to one or more securitizations. |
The Property. The Merit Hill Self Storage Portfolio is comprised of 13 properties totaling 6,667 units and 832,976 SF, and 213 parking units, located across five states. The Merit Hill Self Storage Portfolio has a weighted average year built of 2003 and no property accounts for more than 20.5% of UW NOI or 13.8% of units across the portfolio. The Merit Hill Self Storage Portfolio was purchased from non-institutional owners in seven separate transactions between September 2019 and December 2021 for an aggregate purchase price of $100.7 million. Consistent with Merit Hill’s typical business plan, the sponsor implemented approximately $2 million of value-add capex and engaged institutional third-party management, thereby significantly increasing cash flows and creating material value. On a same store basis, Merit Hill increased Portfolio NOI by 27.3% between 2021 and the July TTM period.
The following table presents certain information relating to the historical and current occupancy of the Merit Hill Self Storage Portfolio:
| Historical and Current Occupancy(1) | |||
| 2021 | 2022 | TTM July 2023 | Current(2) |
| 89.0% | 87.1% | 88.9% | 92.6% |
| (1) | Based on the underwritten rent roll as of July 31, 2023. |
| (2) | Current occupancy is based on the underwritten rent roll as of July 31, 2023. |
The following table presents certain information relating to the Merit Hill Self Storage Portfolio:
| Portfolio Summary(1) | ||||||||||||
| Property | City, State | Year Built / Renovated | Net Rentable Area (SF)(2) | Occupancy %(2) | Allocated Whole Loan Amount | % of Allocated Whole Loan Amount | Appraised Value | UW NCF(2) | % of UW NCF(2) | |||
| 2615 East 12th Street | Oakland, CA | 1975 / 2004 | 88,480 | 96.2% | 18,100,000 | 21.3 | % | $28,850,000 | $1,495,168 | 20.6 | % | |
| Parkglenn Self-Storage | Parker, CO | 2008 / NAP | 75,527 | 95.5% | 9,065,000 | 10.7 | 14,450,000 | 722,761 | 10.0 | |||
| 630 Macarthur Boulevard & 59 Jonathan Bourne Drive | Bourne, MA | 1984, 2002 / NAP | 51,157 | 86.9% | 8,657,000 | 10.2 | 13,800,000 | 741,529 | 10.2 | |||
| 30690 Aldine Westfield Rd | Spring, TX | 2017 / NAP | 109,300 | 89.5% | 8,532,000 | 10.0 | 13,600,000 | 738,952 | 10.2 | |||
| 13404 E Broncos Pkwy | Englewood, CO | 2016 / NAP | 64,460 | 98.2% | 7,051,000 | 8.3 | 11,240,000 | 479,967 | 6.6 | |||
| 3803 N Navarro St | Victoria, TX | 1998 / NAP | 81,250 | 85.8% | 6,274,000 | 7.4 | 10,000,000 | 558,772 | 7.7 | |||
| 2102 NW Stallings Dr | Nacogdoches, TX | 1998 / NAP | 57,100 | 97.0% | 5,019,000 | 5.9 | 8,000,000 | 488,085 | 6.7 | |||
| 2005 W Wheeler Ave | Aransas Pass, TX | 1998 / NAP | 56,950 | 95.3% | 4,799,000 | 5.6 | 7,650,000 | 461,359 | 6.4 | |||
| 3817 Gulf Freeway | Dickinson, TX | 2003 / NAP | 71,925 | 91.8% | 4,454,000 | 5.2 | 7,100,000 | 370,346 | 5.1 | |||
| 1600 E General Cavazos Blvd | Kingsville, TX | 2000 / NAP | 56,550 | 93.5% | 4,266,000 | 5.0 | 6,800,000 | 402,679 | 5.5 | |||
| 11615 Rubina Pl | Waldorf, MD | 2011 / NAP | 32,700 | 91.4% | 3,388,000 | 4.0 | 5,400,000 | 302,131 | 4.2 | |||
| 4222 N Main St | Baytown, TX | 1986 / 2022 | 66,250 | 94.0% | 3,199,000 | 3.8 | 5,100,000 | 255,374 | 3.5 | |||
| 12 Irongate Drive | Waldorf, MD | 1984 / NAP | 21,327 | 84.3% | 2,196,000 | 2.6 | 3,500,000 | 242,209 | 3.3 | |||
| Total | 832,976 | 92.6% | 85,000,000 | 100.0 | % | $142,000,000 | (3) | $7,259,334 | 100.0 | % | ||
| (1) | Source: Appraisals. |
| (2) | Based on the underwritten rent roll as of July 31, 2023. |
| (3) | Inclusive of a 4.8% portfolio premium. The sum of the individual appraised values is $135,490,000. |
| 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. | ||
| 147 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 14 – Merit Hill Self Storage | ||
The following table presents certain information relating to unit mix at the Merit Hill Self Storage Portfolio:
| Unit Mix(1) | |||||||||
| Unit | Net Rentable Area | % of Net Rental Area | # of Units | Current Occupancy(2) | UW Rent Per Unit | ||||
| Billboard | 0 | 0.0% | 1 | 100.0% | $16,800 | ||||
| Climate Controlled | 217,095 | 26.1% | 1,958 | 96.8% | $1,801 | ||||
| Dehumidified Only | 5,200 | 0.6% | 46 | 93.5% | $3,202 | ||||
| Evaporated Only | 5,128 | 0.6% | 28 | 85.7% | $2,607 | ||||
| Non-Climate Controlled | 547,065 | 65.7% | 4,414 | 92.2% | $1,883 | ||||
| Office | 25,988 | 3.1% | 146 | 87.7% | $3,346 | ||||
| Parking | 0 | 0.0% | 213 | 77.0% | $1,469 | ||||
| Wine | 32,500 | 3.9% | 74 | 77.0% | $1,966 | ||||
| Total | 832,976 | 100.0% | 6,880 | 92.8% | $1,892 | ||||
| (1) | Based on the underwritten rent roll as of July 31, 2023. |
| (2) | Current occupancy is calculated based on # of Units. |
The following table presents certain information relating to the underwritten cash flows of the Merit Hill Self Storage Portfolio:
| Operating History and Underwritten Net Cash Flow | ||||||||
| 2020 | 2021 | 2022 | TTM July 2023 | Underwritten | Per Square Foot | %(1) | ||
| Net Storage Revenue | $7,209,775 | $9,247,732 | $10,782,425 | $11,320,027 | $11,433,640 | $13.73 | 93.9 | % |
| Other Miscellaneous Revenue | 546,199 | 690,022 | 637,923 | 693,037 | 739,204 | 0.89 | 6.1 | |
| Effective Gross Income | $7,755,974 | $9,937,754 | $11,420,348 | $12,013,064 | $12,172,844 | $14.61 | 100.0 | % |
| Management Fee | 410,925 | 500,927 | 575,326 | 590,661 | 592,459 | 0.71 | 4.9 | |
| Other Operating Expenses | 3,056,005 | 3,746,270 | 3,818,851 | 4,177,535 | 4,237,753 | 5.09 | 34.8 | |
| Total Expenses | $3,466,930 | $4,247,197 | $4,394,178 | $4,768,196 | $4,830,213 | $5.80 | 39.7 | % |
| Net Operating Income | $4,289,044 | $5,690,557 | $7,026,170 | $7,244,868 | $7,342,631 | $8.81 | 60.3 | % |
| Replacement Reserves | 0 | 0 | 0 | 0 | 83,298 | 0.10 | 0.7 | |
| Net Cash Flow | $4,289,044 | $5,690,557 | $7,026,170 | $7,244,868 | $7,259,334 | $8.71 | 59.6 | % |
| (1) | The “%” column represents percent of Effective Gross Income. |
The Market. The self-storage industry is considered stable compared to other commercial real estate sub-sectors, and has experienced strong performance growth, particularly in recent years. Self-storage REITs reported year-over-year same store revenue and NOI growth of approximately 5% in Q2 2023 driven by rent increases on existing customers. The industry also continues to benefit from the continued increase in household usage of self-storage (up to 11.1% of households in 2023 from 10.6% in 2020 per the 2023 Self-Storage Demand Study conducted by the Self-Storage Association), an increase in length of stay seen in the industry and the slowdown in new supply.
| 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. | ||
| 148 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 15 – 11 West 42nd Street | ||
| Mortgage Loan Information | Property Information | |||
| Mortgage Loan Seller: | BMO, LMF | Single Asset / Portfolio: | Single Asset | |
| Original Principal Balance(1): | $18,833,333 | Title: | Fee | |
| Cut-off Date Principal Balance(1): | $18,833,333 | Property Type – Subtype: | Office - CBD | |
| % of IPB: | 2.4% | Net Rentable Area (SF): | 960,568 | |
| Loan Purpose: | Refinance | Location: | New York, NY | |
| Borrower: | 11 West 42 Realty Investors, L.L.C. | Year Built / Renovated: | 1927 / 2018 | |
| Borrower Sponsors(2): | Tishman Speyer Properties, L.P. and Silverstein Properties, LLC | Occupancy: | 98.6% | |
| Interest Rate: | 7.44000% | Occupancy Date: | 5/1/2023 | |
| Note Date: | 6/30/2023 | 4th Most Recent NOI (As of): | $27,010,956 (12/31/2020) | |
| Maturity Date: | 7/6/2028 | 3rd Most Recent NOI (As of): | $26,436,280 (12/31/2021) | |
| Interest-only Period: | 60 months | 2nd Most Recent NOI (As of): | $26,673,211 (12/31/2022) | |
| Original Term: | 60 months | Most Recent NOI (As of)(5): | $26,697,022 (TTM 3/31/2023) | |
| Original Amortization Term: | None | UW Economic Occupancy: | 95.0% | |
| Amortization Type: | Interest Only | UW Revenues: | $70,904,067 | |
| Call Protection(3): | L(23),YM1(5),DorYM1(25),O(7) | UW Expenses: | $39,203,449 | |
| Lockbox / Cash Management: | Hard / Springing | UW NOI(5): | $31,700,618 | |
| Additional Debt(1): | Yes | UW NCF: | $28,626,800 | |
| Additional Debt Balance(1): | $255,166,667 / $56,000,000 | Appraised Value / Per SF: | $555,000,000 / $578 | |
| Additional Debt Type(1)(4): | Pari Passu / Mezzanine | Appraisal Date: | 4/19/2023 | |
| Escrows and Reserves | Financial Information(6) | ||||||
| Initial | Monthly | Initial Cap | Whole Loan | Total Debt | |||
| Taxes: | $0 | Springing | N/A | Cut-off Date Loan / SF: | $285 | $344 | |
| Insurance: | $0 | Springing | N/A | Maturity Date Loan / SF: | $285 | $344 | |
| Replacement Reserves: | $0 | Springing | $288,170 | Cut-off Date LTV: | 49.4% | 59.5% | |
| TI/LC Reserve: | $10,000,000 | $240,142 | N/A | Maturity Date LTV: | 49.4% | 59.5% | |
| Free Rent Reserve: | $5,685,544 | $0 | N/A | UW NCF DSCR: | 1.39x | 1.00x | |
| Landlord Obligation Reserve: | $13,479,707 | $0 | N/A | UW NOI Debt Yield: | 11.6% | 9.6% | |
| Sources and Uses | ||||||||
| Sources | Proceeds | % of Total | Uses | Proceeds | % of Total | |||
| Whole Loan | $274,000,000 | 79.7 | % | Loan Payoff | $301,013,950 | 87.5 | % | |
| Mezzanine Loan | 56,000,000 | 16.3 | Reserves | 29,165,251 | 8.5 | |||
| Borrower Sponsor Equity | 13,988,916 | 4.1 | Closing Costs | 13,809,715 | 4.0 | |||
| Total Sources | $343,988,916 | 100.0 | % | Total Uses | $343,988,916 | 100.0 | % | |
| (1) | The 11 West 42nd Street Mortgage Loan (as defined below) is part of a whole loan evidenced by 24 pari passu notes with an aggregate original principal balance as of the Cut-off Date of $274.0 million (the “11 West 42nd Street Whole Loan”). Concurrently with the funding of the 11 West 42nd Street Whole Loan, BANA (as defined below) originated a mezzanine loan in the amount of $56.0 million (the “11 West 42nd Street Mezzanine Loan”). The 11 West 42nd Street Mezzanine Loan is secured by the direct equity interests in the borrower and is coterminous with the 11 West 42nd Street Whole Loan. The 11 West 42nd Street Mezzanine Loan accrues interest at a rate of 14.00000% per annum. A mezzanine intercreditor agreement was executed at loan origination. Subsequent to loan origination, the mezzanine loan was sold by BANA to an affiliate of Taconic Capital. |
| (2) | There is no non-recourse carveout guarantor or environmental indemnitor for the 11 West 42nd Street Whole Loan separate from the borrower. |
| (3) | The borrower has the option to prepay the 11 West 42nd Street Whole Loan in whole but not in part (i) on or after the payment date occurring in January 2028 without the payment of any prepayment premium or (ii) beginning on the payment date in July 2025 with the payment of a yield maintenance premium. Defeasance of the 11 West 42nd Street Whole Loan in whole but not in part is permitted after the date that is the earlier of (i) two years from the closing date of the securitization that includes the last note of the 11 West 42nd Street Whole Loan to be securitized and (ii) August 6, 2026. The assumed defeasance lockout period of 28 payments is based on the anticipated closing date of the BMO 2023-5C2 securitization trust in November 2023. The actual lockout period may be longer. |
| (4) | There is no subordinate debt; however, the borrower will be permitted to enter into (x) a single “property-assessed clean energy loan” or (y) any other indebtedness, without regard to the name given to such indebtedness, which is (i) incurred for improvements to the 11 West 42nd Street Property (as defined below) for the purpose of increasing energy efficiency, increasing use of renewable energy sources, resource conservation, or a combination of the foregoing, and (ii) repaid through multi-year tax assessments against the 11 West 42nd Street Property in an amount not to exceed $10,000,000, subject to the lender’s prior written approval of the terms and structure (which approval may be conditioned upon receipt of a rating agency confirmation). See “Description of the Mortgage Pool—Additional Indebtedness” in the Preliminary Prospectus. |
| (5) | The increased UW NOI compared to the Most Recent NOI is mainly due to recent leasing activities. |
| (6) | The information presented under the Financial Information chart above reflects for the Whole Loan column, the Cut-off Date balance of the 11 West 42nd Street Whole Loan and for the Total Debt column, the aggregate of the Cut-off Date balances of the 11 West 42nd Street Whole Loan and the 11 West 42nd Street Mezzanine 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. | ||
| 149 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 15 – 11 West 42nd Street | ||
The Loan. The fifteenth largest mortgage loan (the “11 West 42nd Street Mortgage Loan”) is part of a fixed rate whole loan secured by the borrower’s fee interest in a 960,568 square foot office property located in New York, New York (the “11 West 42nd Street Property”). The 11 West 42nd Street Whole Loan consists of 24 pari passu notes and accrues interest at a rate of 7.44000% per annum. The 11 West 42nd Street Whole Loan has a five-year term and is interest-only for the term of the loan. The 11 West 42nd Street Whole Loan was co-originated on June 30, 2023 by Bank of America, N.A. (“BANA”), UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (“UBS AG”) and LMF Commercial, LLC (“LMF”). On July 7, 2023, LMF transferred Notes A-3-2, A-3-4, A-3-6 and A-3-8, in the aggregate original principal amount of $45,666,666, to Bank of Montreal (“BMO”). The non-controlling Notes A-3-4, A-3-7 and A-3-8 will be included in the BMO 2023-5C2 securitization trust. The remaining notes that have not been deposited into a securitization trust are currently held by BMO, BANA and UBS AG or their respective affiliates and are expected to be contributed to one or more securitization trust(s). The 11 West 42nd Street Whole Loan is serviced pursuant to the pooling and servicing agreement for the BANK5 2023-5YR3 securitization trust. See “Description of the Mortgage Pool—The Whole Loans—The Non-Serviced Pari Passu Whole Loans” in the Preliminary Prospectus.
The table below summarizes the promissory notes that comprise the 11 West 42nd Street Whole Loan:
| Whole Loan Summary | ||||||
| Note | Original Balance | Cut-off Date Balance | Note Holder | Controlling Piece | ||
| A-1-1 | $30,000,000 | $30,000,000 | BANK5 2023-5YR3 | Yes | ||
| A-1-2 | $25,000,000 | $25,000,000 | BANK5 2023-5YR3 | No | ||
| A-1-3 | $20,000,000 | $20,000,000 | BANK5 2023-5YR3 | No | ||
| A-1-4(1) | $11,333,334 | $11,333,334 | BANA | No | ||
| A-1-5(1) | $5,000,000 | $5,000,000 | BANA | No | ||
| A-2-1(1) | $6,333,333 | $6,333,333 | UBS AG | No | ||
| A-2-2 | $20,000,000 | $20,000,000 | BMO 2023-C6 | No | ||
| A-2-3 | $10,000,000 | $10,000,000 | BBCMS 2023-C21 | No | ||
| A-2-4(1) | $10,000,000 | $10,000,000 | UBS AG | No | ||
| A-2-5(1) | $10,000,000 | $10,000,000 | UBS AG | No | ||
| A-2-6(1) | $10,000,000 | $10,000,000 | UBS AG | No | ||
| A-2-7 | $5,000,000 | $5,000,000 | BBCMS 2023-C21 | No | ||
| A-2-8(1) | $5,000,000 | $5,000,000 | UBS AG | No | ||
| A-2-9(1) | $5,000,000 | $5,000,000 | UBS AG | No | ||
| A-2-10(1) | $5,000,000 | $5,000,000 | UBS AG | No | ||
| A-2-11(1) | $5,000,000 | $5,000,000 | UBS AG | No | ||
| A-3-1 | $25,000,000 | $25,000,000 | BMO 2023-5C1 | No | ||
| A-3-2 | $27,500,000 | $27,500,000 | BMO 2023-5C1 | No | ||
| A-3-3 | $10,000,000 | $10,000,000 | BMO 2023-5C1 | No | ||
| A-3-4 | $7,500,000 | $7,500,000 | BMO 2023-5C2 | No | ||
| A-3-5 | $5,000,000 | $5,000,000 | BMO 2023-C6 | No | ||
| A-3-6(1) | $5,000,000 | $5,000,000 | BMO | No | ||
| A-3-7 | $5,666,667 | $5,666,667 | BMO 2023-5C2 | No | ||
| A-3-8 | $5,666,666 | $5,666,666 | BMO 2023-5C2 | No | ||
| Whole Loan | $274,000,000 | $274,000,000 | ||||
| (1) | Expected to be contributed to one or more securitizations. |
| 11 West 42nd Street Mezzanine Loan Summary | ||||||||
| Original Principal Balance | Interest Rate | Original Term (mos) | Original Amortization Term (mos) | Original IO Term (mos) | Total Debt UW NCF DSCR(1) | Total Debt UW NOI Debt Yield(1) | Total Debt Cut-off Date LTV(1) | |
| 11 West 42nd Street Mezzanine Loan | $56,000,000 | 14.0000% | 60 | 0 | 60 | 1.00x | 9.6% | 59.5% |
| (1) | Total Debt UW NCF DSCR, Total Debt UW NOI Debt Yield and Total Debt Cut-off Date LTV reflect the aggregate of the Cut-off Date balance of the 11 West 42nd Street Whole Loan and the 11 West 42nd Street Mezzanine Loan. |
The Property. The 11 West 42nd Street Property is a 32-story, LEED Gold certified, Class A- office tower located in New York, New York totaling 960,568 square feet. Originally constructed in 1927, the 11 West 42nd Street Property is located two blocks west of Grand Central Terminal and overlooks the New York Public Library and Bryant Park. The 11 West 42nd Street Property features a unique H-shaped layout, which allows for eight corner offices per floor and an abundance of natural light. Since 2018, the borrower sponsors have spent
| 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. | ||
| 150 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 15 – 11 West 42nd Street | ||
approximately $38.2 million in renovations, which include improvements to the lobby, elevators, entrances and windows. Since 2021, the borrower sponsors have executed a total of 325,590 square feet in lease renewals, extensions and new leases. The 11 West 42nd Street Property is 98.6% leased as of May 1, 2023 to a diverse roster of tenants and has a weighted average remaining lease term of over six years.
The 11 West 42nd Street Property consists of 891,270 square feet of office space, 20,866 square feet of retail space, 39,498 square feet of co-working space, and 8,934 square feet of storage space. Most of the retail tenants at the 11 West 42nd Street Property are fast casual food chains. In May 2021, the borrower sponsors began their offering of the Studio by Tishman co-working space (the “Studio”) at the 11 West 42nd Street Property (4.1% of NRA). The Studio is a flexible and modern co-working space that caters to both individual professionals and corporate clients. Owned and operated by Tishman, the Studio offers a wide range of options for its members, including private offices, customized suites and hot desks. The Studio has 14 different locations with approximately 400 desks, which were 87.7% occupied as of April 2023, with 98% of occupied desks belonging to corporate clients, according to the borrower sponsor.
The 11 West 42nd Street Property has maintained strong occupancy levels over the past five years, averaging 93.4% occupancy. Investment-grade rated tenants or their affiliates occupy 64.3% of NRA at the 11 West 42nd Street Property and contribute 65.5% of underwritten base rent. Major tenants at the 11 West 42nd Street Property include Michael Kors (USA), Inc. (“Michael Kors”), First-Citizens Bank & Trust Company (“First-Citizens Bank”) and New York University (“NYU”). In addition, several tenants use the 11 West 42nd Street Property as headquarters space and have made significant investments in their spaces. The 11 West 42nd Street Property is the corporate headquarters for Michael Kors, Kohn Pedersen Fox Associates, P.C. (“KPF”), Avenue Capital Management II, LP (“Avenue Capital”), Oscar De La Renta LLC and Capitolis, Inc. (“Capitolis”).
Major Tenants.
Michael Kors (USA), Inc (254,485 square feet; 26.5% of NRA; 27.4% of underwritten base rent; Ba1/BBB-/BBB-; Moody’s/S&P/Fitch) is a luxury fashion brand founded by designer Michael Kors in 1981. The Michael Kors brand has a global reach, with a strong presence in major fashion markets around the world and is popular among celebrities and fashion-conscious consumers. The 11 West 42nd Street Property serves as the worldwide headquarters for Michael Kors. The Michael Kors lease is guaranteed by the publicly traded parent company, Capri Holdings Limited, which also manages other brands such as Versace and Jimmy Choo. As of October 2023, Capri Holdings Limited had an equity market capitalization of approximately $5.9 billion.
Michael Kors currently occupies 252,072 square feet of office and 2,413 square feet of storage space. Michael Kors first leased space at the 11 West 42nd Street Property in 2003 and since has expanded into 16 suites. The tenant has no non-standard termination options, outstanding allowances or free rent. Michael Kors has 236,974 square feet expiring on March 31, 2026, 10,745 square feet expiring on September 30, 2029, 6,436 square feet expiring on March 31, 2025 and 330 square feet expiring on November 30, 2023. The tenant has two, five-year options or one, 10-year renewal option on all non-basement suites, with a notice of renewal required no later than 20 months prior to March 31, 2037 varying across suites. Michael Kors currently subleases three spaces (totaling 28,107 square feet, 11.0% of Michael Kors’ NRA) to Aston Martin Lagonda of North America, Inc., ExpandEd Schools, Inc. and National Public Radio, Inc. (“NPR”). According to the borrower sponsors, if a proposed lease amendment between the borrower and NPR is executed, NPR will directly lease at least an additional 4,888 square feet of the Michael Kors subleased space and add it to their existing leased premises (13,580 square feet), all with a lease expiration of December 2031. We cannot assure you that this amendment will be signed as expected or at all.
According to the borrower sponsors, Michael Kors is currently renovating its space at the tenant’s sole cost and is in discussions with the borrower sponsors for an early renewal of a portion of its leased premises and the modification of certain terms of its lease. If this proposed lease amendment (the “Pre-Approved Lease Amendment”) is executed, Michael Kors would renew 204,481 square feet of its expiring space (202,068 square feet of office and 2,413 square feet of storage set to expire March 31, 2026), terminate the non-subleased portion of its lease on the 22nd floor (19,238 square feet), vacate 14,924 square feet on the third floor in March 2026, vacate 6,436 square feet on the 19th floor in March 2025 (at least 4,888 square feet of the 6,436 square feet will switch to a direct lease to NPR), and vacate 9,406 square feet of subleased space on the 22nd floor, effective in March 2026. If the Pre-Approved Lease Amendment is executed, the tenant will have 12 months of free rent commencing April 1, 2026 and will receive a $5 per square foot annual rent reduction on 202,649 square feet until the Pre-Approved Lease Amendment takes effect on April 1, 2026. We cannot assure you that this amendment will be signed as expected or at all.
First-Citizens Bank & Trust Company (153,680 square feet; 16.0% of NRA; 16.0% of underwritten base rent; Baa2/BBB/NR; Moody’s/S&P/Fitch) is a financial institution that provides a wide range of banking and financial services to individuals, businesses and organizations. Founded in 1898, First-Citizens Bank is a full-service bank that offers a variety of products and services. First-Citizens Bank has a strong presence in the southeastern United States, with branches located in North Carolina, South Carolina, Virginia, Tennessee and Georgia, as well as 18 other states. As of October 2023, First-Citizens Bank had an equity market capitalization of approximately $19.4 billion.
First-Citizens Bank currently occupies 151,537 square feet of office and 2,143 square feet of storage space, with a lease expiration date of May 31, 2034 and two, five-year renewal options (or one 10-year renewal option) on all of its suites with a 16-month notice period. First-Citizens Bank first leased space at the 11 West 42nd Street Property in 2006 and since has expanded into five suites. The tenant has no non-standard termination options, outstanding allowances or free rent.
| 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. | ||
| 151 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 15 – 11 West 42nd Street | ||
New York University (117,382 square feet; 12.2% of NRA; 11.4% of underwritten base rent; Aa2/AA-/NR; Moody’s/S&P/Fitch) was established in 1831 and is one of the largest and most prestigious universities in the United States, with a student body of over 65,000 students and an endowment of over $5.3 billion as of August 2022. The NYU Midtown Center, located at the 11 West 42nd Street Property, is home to many graduate programs within the School of Professional Studies. The 11 West 42nd Street Property provides access for NYU students, faculty and staff to the Jack Brause Library, one of NYU’s most coveted libraries, a computer science lab, design labs and classrooms for its students. Additionally, NYU added its own entrance on the 43rd Street side of the 11 West 42nd Street Property to help regulate ingress and egress of the student base.
NYU currently occupies 115,785 square feet of office and 1,597 square feet of retail space, with a lease expiration of June 30, 2027 and one, five-year renewal option on all of its suites with a 22-month notice period at 2% rent increases per annum. NYU has leased space at the 11 West 42nd Street Property since the 1970s and has renewed multiple times. NYU is currently occupying four suites, and most recently renewed its lease in October 2021. The tenant has no non-standard termination options. NYU has approximately $1.65 million in outstanding landlord obligations and two months of free rent totaling approximately $1,125,423 ($557,140 in December 2023 and $568,283 in December 2024). All outstanding landlord obligations and free rent were reserved at origination.
See “Description of the Mortgage Pool—Tenant Issues” in the Preliminary Prospectus.
Environmental. According to the Phase I environmental assessment dated April 24, 2023, there was no evidence of any recognized environmental conditions at the 11 West 42nd Street Property.
The following table presents certain information relating to the historical and current occupancy of the 11 West 42nd Street Property:
| Historical and Current Occupancy | |||
| 2020(1) | 2021(1) | 2022(1) | Current(2) |
| 88.0% | 89.6% | 98.9% | 98.6% |
| (1) | Historical occupancies are as of December 31 of each respective year. |
| (2) | Current occupancy is as of May 1, 2023. |
The following table presents certain information relating to the largest tenants at of the 11 West 42nd Street Property:
| Tenant Summary(1) | |||||||||
| Tenant | Ratings Moody’s/S&P/Fitch(2) | Net Rentable Area (SF) | % of Total NRA | UW Base Rent PSF | UW Base Rent | % of Total UW Base Rent | Lease Expiration Date | ||
| Michael Kors (USA), Inc(3) | Ba1/BBB-/BBB- | 254,485 | 26.5 | % | $62.89 | $16,003,389 | 27.4 | % | Various(3) |
| First-Citizens Bank & Trust Company | Baa2/BBB/NR | 153,680 | 16.0 | $60.80 | 9,343,789 | 16.0 | 5/31/2034 | ||
| New York University | Aa2/AA-/NR | 117,382 | 12.2 | $56.95 | 6,685,426 | 11.4 | 6/30/2027 | ||
| Kohn Pedersen Fox Associates, P.C.(4) | NR/NR/NR | 92,788 | 9.7 | $61.13 | 5,672,095 | 9.7 | Various(4) | ||
| Burberry (Wholesale) Limited(5) | Baa2/NR/NR | 45,509 | 4.7 | $62.78 | 2,857,280 | 4.9 | 8/31/2037 | ||
| Major Tenants | 663,844 | 69.1 | % | $61.10 | $40,561,979 | 69.3 | % | ||
| Other Tenants(6) | 283,752 | 29.5 | $63.20 | 17,932,301 | 30.7 | ||||
| Occupied Collateral Total / Wtd. Avg. | 947,596 | 98.6 | % | $61.73 | $58,494,280 | 100.0 | % | ||
| Vacant Space | 12,972 | 1.4 | |||||||
| Collateral Total | 960,568 | 100.0 | % | ||||||
| (1) | Information is based on the underwritten rent roll dated May 1, 2023 and is inclusive of rent steps through August 2024. |
| (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) | Michael Kors leases 236,974 square feet expiring on March 31, 2026, 10,745 square feet expiring on September 30, 2029, 6,436 square feet expiring on March 31, 2025 and 330 square feet expiring on November 30, 2023. Michael Kors currently subleases three spaces (totaling 28,107 square feet) to Aston Martin Lagonda of North America, Inc., ExpandEd Schools, Inc. and NPR. According to the borrower sponsors, Michael Kors is currently renovating its space at the tenant's sole cost and is in discussions with the borrower sponsors for an early renewal of a portion of its lease. See "Major Tenants" above. |
| (4) | KPF leases 77,388 square feet expiring on May 31, 2038 and 15,400 square feet expiring on April 30, 2027. |
| (5) | Burberry (Wholesale) Limited has the option to terminate its lease on December 31, 2033, upon 20 months’ notice and payment of a termination fee. |
| (6) | Other Tenants is inclusive of 39,498 square feet of space operated by Tishman as the Studio and 297 square feet of office space (IT room and bike room) for which no rent is associated or underwritten. |
| 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. | ||
| 152 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 15 – 11 West 42nd Street | ||
The following table presents certain information relating to the tenant lease expirations of the 11 West 42nd Street Property:
| Lease Rollover Schedule(1)(2) | |||||||||||||||
| Year | Number of Leases Expiring(3) | Net Rentable Area Expiring(3) | % 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 | 12,972 | 1.4 | % | NAP | NAP | 12,972 | 1.4% | NAP | NAP | |||||
| 2023 & MTM | 3 | 11,508 | 1.2 | $980,400 | 1.7 | % | 24,480 | 2.5% | $980,400 | 1.7% | |||||
| 2024 | 0 | 0 | 0.0 | 0 | 0.0 | 24,480 | 2.5% | $980,400 | 1.7% | ||||||
| 2025 | 2 | 6,696 | 0.7 | 434,430 | 0.7 | 31,176 | 3.2% | $1,414,830 | 2.4% | ||||||
| 2026 | 18 | 290,728 | 30.3 | 19,008,777 | 32.5 | 321,904 | 33.5% | $20,423,607 | 34.9% | ||||||
| 2027 | 9 | 169,812 | 17.7 | 9,621,168 | 16.4 | 491,716 | 51.2% | $30,044,775 | 51.4% | ||||||
| 2028 | 1 | 5,389 | 0.6 | 1,141,927 | 2.0 | 497,105 | 51.8% | $31,186,702 | 53.3% | ||||||
| 2029 | 2 | 37,334 | 3.9 | 2,268,817 | 3.9 | 534,439 | 55.6% | $33,455,519 | 57.2% | ||||||
| 2030 | 3 | 43,621 | 4.5 | 4,016,068 | 6.9 | 578,060 | 60.2% | $37,471,587 | 64.1% | ||||||
| 2031 | 1 | 13,580 | 1.4 | 570,360 | 1.0 | 591,640 | 61.6% | $38,041,947 | 65.0% | ||||||
| 2032 | 4 | 43,771 | 4.6 | 2,556,130 | 4.4 | 635,411 | 66.1% | $40,598,077 | 69.4% | ||||||
| 2033 | 1 | 2,279 | 0.2 | 414,299 | 0.7 | 637,690 | 66.4% | $41,012,376 | 70.1% | ||||||
| 2034 & Beyond | 18 | 322,878 | 33.6 | 17,481,904 | 29.9 | 960,568 | 100.0% | $58,494,280 | 100.0% | ||||||
| Total | 62 | 960,568 | 100.0 | % | $58,494,280 | 100.0 | % | ||||||||
| (1) | Based on the underwritten rent roll dated May 1, 2023. |
| (2) | The 11 West 42nd Property has 24 tenants in total, and certain tenants are subject to more than one lease. Certain tenants may have lease termination options that are exercisable prior to the originally stated expiration date of the subject lease and that are not considered in the lease rollover schedule. |
| (3) | Number of Leases Expiring and Net Rentable Area Expiring includes 39,498 square feet of space operated by Tishman as the Studio, 4,636 square feet of storage space and 2,034 square feet of retail (NYU entrance and Small and Mighty Krupa, Inc.) and office space (IT room), all for which no rent is associated or underwritten. |
The following table presents certain information relating to the underwritten cash flows of the 11 West 42nd Street Property:
| Operating History and Underwriting Net Cash Flow | |||||||||
| 2019 | 2020 | 2021 | 2022 | T12 March 2023 | Underwritten | Per Square Foot | %(1) | ||
| In Place Rent(2) | $45,151,694 | $51,735,865 | $49,799,980 | $50,036,067 | $50,307,751 | $58,494,280 | $60.90 | 86.3 | % |
| Vacancy Gross Up | 0 | 0 | 0 | 0 | 0 | 928,565 | 0.97 | 1.4 | |
| Straight Line Rent(3) | 0 | 0 | 0 | 0 | 0 | 291,133 | 0.30 | 0.4 | |
| Percentage Rent | 0 | 0 | 0 | 0 | 0 | 12,675 | 0.01 | 0.0 | |
| Gross Potential Rent | $45,151,694 | $51,735,865 | $49,799,980 | $50,036,067 | $50,307,751 | $59,726,653 | $62.18 | 88.1 | % |
| Total Reimbursements | 6,811,606 | 9,169,515 | 7,612,544 | 5,612,853 | 6,247,574 | 8,092,259 | 8.42 | 11.9 | |
| Total Gross Income | $51,963,300 | $60,905,380 | $57,412,524 | $55,648,921 | $56,555,325 | $67,818,913 | $70.60 | 100.0 | % |
| Other Income(4) | 4,035,185 | 2,906,507 | 3,547,401 | 5,519,818 | 6,127,949 | 6,476,088(5) | 6.74 | 9.5 | |
| (Vacancy/Credit Loss) | 0 | 0 | 0 | 0 | 0 | (3,390,934) | (3.53) | (5.0 | ) |
| Effective Gross Income | $55,998,485 | $63,811,888 | $60,959,925 | $61,168,739 | $62,683,274 | $70,904,067 | $73.81 | 104.5 | % |
| Total Expenses | $32,041,491 | $36,800,932 | $34,523,645 | $34,495,528 | $35,986,252 | $39,203,449 | $40.81 | 55.3 | % |
| Net Operating Income | $23,956,994 | $27,010,956 | $26,436,280 | $26,673,211 | $26,697,022 | $31,700,618 | $33.00 | 44.7 | % |
| Capital Expenditures | 0 | 0 | 0 | 0 | 0 | 192,114 | 0.20 | 0.3 | |
| TI/LC | 0 | 0 | 0 | 0 | 0 | 2,881,704 | 3.00 | 4.1 | |
| Net Cash Flow | $23,956,994 | $27,010,956 | $26,436,280 | $26,673,211 | $26,697,022 | $28,626,800 | $29.80 | 40.4 | % |
| (1) | % column represents percent of Total Gross Income for all revenue lines and represents percent of Effective Gross Income for the remainder of fields. |
| (2) | Underwritten In Place Rent includes rent steps through August 1, 2024. |
| (3) | Includes straight-lined rent for investment-grade tenants or their affiliates averaged to earlier of lease expiration or loan maturity. |
(4) Other Income includes income and fees from various sources such as concierge, licensing, HVAC, amenity space, cleaning, special events, tenant water and condenser, etc.
| (5) | Underwritten Other Income includes $3,424,954 of income from the Studio that is based on the borrower sponsors’ budget. The Studio is a Tishman owned co-working space that was incorporated in 2021. The Studio has approximately 400 desks, which were 87.7% occupied as of April 2023, with 98.0% of occupied desks belonging to corporate tenants, according to the borrower sponsor. The remainder of the Underwritten Other Income includes income and fees from various sources such as concierge, licensing, HVAC, amenity space, cleaning, special events, tenant water and condenser, etc. |
| 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. | ||
| 153 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 15 – 11 West 42nd Street | ||
The Market. The 11 West 42nd Street Property is situated on the north side of West 42nd Street between Fifth Avenue and Avenue of the Americas, in the Grand Central office submarket of Midtown Manhattan. The 11 West 42nd Street Property is located across from the New York Public Library and Bryant Park and has accessibility to a large transportation network comprised of subways, railroads and buses. Bryant Park is accessible from several major Manhattan commuter transportation hubs. Nearby subway stations include the Bryant Park station that provides access to five different subway lines (7, B, D, F, and M trains), the Times Square/42nd Street/Eighth Avenue station that provides access to 12 different subway lines (1, 2, 3, 7, A, C, E, N, Q, R, S and W trains) and Grand Central Terminal that provides access to five different subway lines (4, 5, 6, 7 and S trains), providing for accessible commutes from all five boroughs. Metro North railroad at Grand Central Terminal also provides access to New York suburbs and Connecticut.
According to the appraisal, leasing activity has been strong in the Grand Central office submarket and properties near regional transportation nodes have experienced an increase in demand and positive leasing. The 11 West 42nd Street Property presents a lower-cost alternative to other Class A space in the Grand Central office submarket. As of the first quarter of 2023, the Grand Central office submarket had 81.7% of Class A space, with an inventory of 37,423,446 square feet, a vacancy rate of 17.6% and weighted average rental rate of $75.87 per square foot.
The 11 West 42nd Street Property benefits from the area’s population density. According to the appraisal, the estimated 2022 population in New York City was approximately 8,130,800. The estimated 2022 average household income in New York City was $110,634.
The following table presents certain information relating to comparable office properties to the 11 West 42nd Street Property:
| Competitive Building Summary(1) | ||||||
Property Name | Year Built / Renovated | Rentable Area (SF) | Stories | Occupancy | Asking Rent Low PSF | Asking Rent High PSF |
| 11 West 42nd Street | 1927 / 2018 | 960,568(2) | 32 | 98.6%(2) | $42.00(2)(3) | $90.00(2)(3) |
| 4 Bryant Park | 1920 / NAP | 150,000 | 12 | 100.0% | NAV | NAV |
| 1065 Avenue of the Americas | 1958 / NAP | 536,524 | 34 | 75.2% | $72.00 | $105.00 |
| 1120 Avenue of the Americas | 1951 / 2005 | 400,000 | 21 | 98.1% | NAV | NAV |
| 500 Fifth Avenue | 1938 / NAP | 721,702 | 59 | 85.8% | $79.00 | $92.00 |
| 125 Park Avenue | 1923 / 2004 | 445,437 | 26 | 99.2% | NAV | NAV |
| 420 Lexington Avenue | 1927 / 1999 | 1,112,424 | 31 | 78.5% | $62.00 | $65.00 |
| (1) | Source: Appraisal. |
| (2) | Information is based on the underwritten rent roll dated May 1, 2023. |
| (3) | Asking Rent Low PSF and Asking Rent High PSF are based on the underwritten rent per square foot range for office tenants at the 11 West 42nd Street Property. |
The following table presents certain information relating to comparable office rental properties for the 11 West 42nd Street Property:
| Comparable Office Rental Summary(1) | |||||||||
| Property Name/Location | Year Built / Renovated | Rentable Area (SF) | Tenant | Lease Type | Suite Size (SF) | Commencement | Rent (PSF) | TIs (PSF) / Free Rent (Months) | Escalations |
11 West 42nd Street New York, NY | 1927/2018 | 960,568(2) | Burberry (Wholesale) Limited(2) | Modified Gross | 45,509(2) | Sep-22(2) | $62.78(2) | $140 / 15(3) | $5 Every 5 Years(3) |
10 East 40th Street New York, NY | 1929/2008 | 347,000 | Alpha Square Group | Modified Gross | 8,770 | Apr-23 | $71.00 | $0 / 8.5 | Flat |
10 East 40th Street New York, NY | 1929/2008 | 347,000 | Hart Howerton | Modified Gross | 27,211 | Feb-23 | $70.00 | $120 / 18 | $75 PSF in year 7 |
60 East 42nd Street New York, NY | 1929/NAP | 1,110,005 | Morici & Morici LLP | Modified Gross | 5,717 | Jul-22 | $71.00 | $135 / 5 | Flat |
530 Fifth Avenue New York, NY | 1957/NAP | 484,152 | APFM, Inc. | Modified Gross | 7,803 | Jan-23 | $79.00 | $150 / 6 | N/A |
535 Fifth Avenue New York, NY | 1926/2014 | 255,455 | Prima Gems USA | Modified Gross | 4,848 | Jan-23 | $60.00 | $40 / 6 | $1.50 / year |
340 Madison Avenue New York, NY | 1920/NAP | 714,869 | Carlyle Group | Modified Gross | 40,542 | Sep-22 | $66.00 | $152 / 9 | $71 PSF in year 6 |
521 Fifth Avenue New York, NY | 1929/NAP | 339,901 | Genpact | Modified Gross | 17,796 | Sep-22 | $74.00 | $150 / 8 | $79 PSF in year 7 |
292 Madison Avenue New York, NY | 1923/NAP | 178,097 | Lightbox OOH Video Network | Modified Gross | 11,113 | Jul-22 | $65.00 | $110 / 1 | $70 PSF in year 5 |
| (1) | Source: Appraisal. |
| (2) | Based on the underwritten rent roll dated May 1, 2023. |
| (3) | Information is provided by the borrower sponsors. |
| 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. | ||
| 154 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 15 – 11 West 42nd Street | ||
The following table presents certain information relating to comparable retail rental properties for the 11 West 42nd Street Property:
| Comparable Retail Rental Summary(1) | |||||||
| Property Name/Location | Year Built / Renovated | Size (SF) | Tenant | Suite Size (SF) | Rent PSF | Commencement | Lease Term (Months) |
11 West 42nd Street New York, NY | 1927/2018 | 960,568(2) | M&T Bank(2) | 5,389(2) | $211.90(2) | Dec-07(2) | 246(2) |
445 Fifth Avenue New York, NY | NAV | NAV | Caffe Italia | 1,100 | $202.00 | Feb-23 | 120 |
1 Vanderbilt Avenue New York, NY | NAV | NAV | Watches of Switzerland | 2,875 | $260.00 | Feb-23 | 120 |
130 West 42nd Street New York, NY | NAV | NAV | NY Gifts | 4,180 | $159.00 | Jan-23 | 84 |
1166 Avenue of the Americas New York, NY | NAV | NAV | Citibank | 3,637 | $375.00 | Sep-22 | 60 |
475 Fifth Avenue New York, NY | NAV | NAV | Penske Media Corporation | 3,375 | $296.00 | May-22 | 143 |
| (1) | Source: Appraisal. |
| (2) | Based on the underwritten rent roll dated May 1, 2023. |
The following table presents certain information relating to the appraisal’s market rent conclusion for the 11 West 42nd Street Property:
| Market Rent Summary(1) | ||||
| Type (Floors) | Market Rent PSF | Lease Term (Years) | Rent Increase Projection | Lease Type |
| Major Office (2-7): | $59.00 | 15 plus free rent | 10.0% every 5 years | Modified Gross |
| Minor Office (2-7): | $59.00 | 10 plus free rent | 10.0% every 5 years | Modified Gross |
| Major Office (8-12): | $61.00 | 15 plus free rent | 10.0% every 5 years | Modified Gross |
| Minor Office (8-12): | $61.00 | 10 plus free rent | 10.0% every 5 years | Modified Gross |
| Major Office (13-19): | $65.00 | 15 plus free rent | 10.0% every 5 years | Modified Gross |
| Minor Office (13-19): | $65.00 | 10 plus free rent | 10.0% every 5 years | Modified Gross |
| Major Office (20-26): | $69.00 | 15 plus free rent | 10.0% every 5 years | Modified Gross |
| Minor Office (20-26): | $69.00 | 10 plus free rent | 10.0% every 5 years | Modified Gross |
| Major Office (27-30): | $71.00 | 15 plus free rent | 10.0% every 5 years | Modified Gross |
| Minor Office (27-30): | $71.00 | 10 plus free rent | 10.0% every 5 years | Modified Gross |
| Major Office (31-32): | $62.00 | 15 plus free rent | 10.0% every 5 years | Modified Gross |
| Minor Office (31-32): | $62.00 | 10 plus free rent | 10.0% every 5 years | Modified Gross |
| (1) | Source: Appraisal. |
| 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. | ||
| 155 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| No. 15 – 11 West 42nd Street | ||
The following table presents certain information relating to comparable sales for the 11 West 42nd Street Property:
| Comparable Sales(1) | ||||||
| Name / Property Location | Sale Date | Total NRA (SF) | Total Occupancy | Sale Price | Sale Price PSF | Adjusted Sales Price PSF |
11 West 42nd Street 11 West 42nd Street New York, NY | NAP | 960,568(2) | 98.6%(2) | NAP | NAP | NAP |
Tower 56 126 East 56th Street New York, NY | Apr-2023 | 186,884 | 80.0% | $113,000,000 | $604.65 | $634.89 |
1330 Sixth Avenue 1330 Avenue of the Americas New York, NY | Nov-2022 | 534,203 | 81.0% | $310,278,784 | $580.83 | $667.95 |
830 3rd Avenue 830 3rd Avenue New York, NY | Sep-2022 | 147,068 | 33.0% | $72,000,000 | $489.57 | $550.77 |
Farmers Loan & Trust Co. Building 475 Fifth Avenue New York, NY | May-2022 | 276,078 | 94.0% | $291,000,000 | $1,054.05 | $592.90 |
110 East 42nd Street 110 East 42nd Street New York, NY | Dec-2021 | 222,935 | 89.0% | $117,075,000 | $525.15 | $578.98 |
Springs Building 104 West 40th Street New York, NY | Aug-2021 | 210,428 | 72.0% | $127,500,000 | $605.91 | $640.75 |
| (1) | Source: Appraisal. |
| (2) | Based on the underwritten rent roll dated May 1, 2023. |
| 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 2023-5C2 | |
| Contacts | ||
| BMO Capital Markets CMBS Capital Markets & Banking | ||
| Contact | Phone Number | |
| Paul Vanderslice | paul.vanderslice@bmo.com | (917) 996-4514 |
| Managing Director | ||
| David Schell | david.schell@bmo.com | (347) 996-0721 |
| Managing Director | ||
| Ravish Kamath | ravish.kamath@bmo.com | (347) 668-1507 |
| Director | ||
| BMO Capital Markets CMBS Trading & Structuring | ||
| Contact | Phone Number | |
| Andrew Noonan | andrew.noonan@bmo.com | (347) 466-3147 |
| Managing Director | ||
| Mary Kunka | mary.kunka@bmo.com | (347) 956-1226 |
| Managing Director | ||
| Kiran Manda | kiran.manda@bmo.com | (347) 831-4776 |
| Managing Director | ||
| Michael Chen | lei4.chen@bmo.com | (646) 265-0023 |
| Director | ||
| BMO Capital Markets Securitized Products Syndicate | ||
| Contact | 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 | ||
| Goldman Sachs Real Estate Financing Group - Securitization | ||
| Contact | Contact | Contact |
| Scott Epperson | scott.epperson@gs.com | (212) 934-2882 |
| Managing Director | ||
| Justin Peterson | justin.peterson@gs.com | (212) 902-4283 |
| Vice President | ||
| Raymond Todd | raymond.todd@gs.com | (972) 501-3979 |
| Vice President | ||
| Goldman Sachs Real Estate Financing Group - Capital Markets | ||
| Contact | Contact | Contact |
| Nitin Jagga | nitin.jagga@gs.com | (212) 855-9035 |
| Vice President | ||
| Rebecca Bayard | rebecca.bayard@gs.com | (212) 934-0848 |
| Vice President | ||
| 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. | ||
| 157 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| Contacts | ||
| Goldman Sachs Syndicate & Structuring | ||
| Contact | Contact | Contact |
| Scott Walter | scott.walter@gs.com | (212) 357-8910 |
| Managing Director | ||
| Lisa Schexnayder | lisa.schexnayder@gs.com | (212) 902-2330 |
| Vice President | ||
| Wenfei Liu | wenfei.liu@gs.com | (212) 357-0433 |
| Vice President | ||
| Citigroup CMBS Capital Markets and Securitization | ||
| Contact | Contact | Contact |
| 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 | Phone Number | |
| Raul Orozco | raul.d.orozco@citi.com | (212) 723-1295 |
| Managing Director | ||
| Matt Perry | mattison.perry@citi.com | (212) 723-1295 |
| Director | ||
| Societe Generale CRE Capital Markets and Banking | ||
| Contact | Phone Number | |
| Jim Barnard | jim.barnard@sgcib.com | (212) 278-6263 |
| Director | ||
| Justin Cappuccino | justin.cappuccino@sgcib.com | (212) 278-6393 |
| Director | ||
| Russell Yu | russell.yu@sgcib.com | (212) 278-5467 |
| Vice President | ||
| Societe Generale Syndicate, Structuring and Trading | ||
| Contact | Phone Number | |
| Mark Lacerenza | mark.lacerenza@sgcib.com | (212) 278-5243 |
| Managing Director | ||
| Claire Weiss | claire.weiss@sgcib.com | (212) 278-6570 |
| Director | ||
| John D'Elisa | john.delisa@sgcib.com | (212) 278-4608 |
| Director | ||
| Philip Yenikomshian | philip.yenikomshian@sgcib.com | (212) 278-5155 |
| Director | ||
| Kevin Lu | Kevin.Lu@sgcib.com | (212) 278-5692 |
| Vice President | ||
| 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. | ||
| 158 | ||
| Structural and Collateral Term Sheet | BMO 2023-5C2 | |
| Contacts | ||
| Deutsche Bank Securities Banking | ||
| Contact | Phone Number | |
| Lainie Kaye | lainie.kaye@db.com | (212) 250-5270 |
| Managing Director | ||
| Michael Miller | michael.miller@db.com | (212) 250-0099 |
| Vice President | ||
| Sam Lockwood | sam.lockwood@db.com | (212) 250-4569 |
| Vice President | ||
| Deutsche Bank Securities Trading & Structuring | ||
| Contact | Phone Number | |
| Shaishav Agarwal | shaishav.agarwal@db.com | (212) 250-6290 |
| Managing Director | ||
| Dan Penn | daniel.penn@db.com | (212) 250-5149 |
| Managing Director | ||
| Tiffany Putnam | tiffany.putman@db.com | (972) 363-4086 |
| Director | ||
| Ryan Horvath | ryan.horvath@db.com | (212) 250-5149 |
| Director | ||
| UBS CMBS Capital Markets and Banking | ||
| Contact | Phone Number | |
| Nicholas Galeone | nicholas.galeone@ubs.com | (212) 713-8832 |
| Managing Director | ||
| Siho Ham | siho.ham@ubs.com | (212) 713-1278 |
| Managing Director | ||
| Michael Barbieri | michael.barbieri@ubs.com | (212) 713-1181 |
| Executive Director | ||
| UBS CMBS Trading and Syndicate | ||
| Contact | Phone Number | |
| Jared Randall | jared.randall@ubs.com | (212) 713-8568 |
| Executive Director | ||
| Racquel Small | racquel.small@ubs.com | (212) 713-4021 |
| Executive Director | ||
| Naja Armstrong | naja.armstrong@ubs.com | (212) 713-2066 |
| Executive 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. | ||
| 159 | ||