FREE WRITING PROSPECTUS | ||
FILED PURSUANT TO RULE 433 | ||
REGISTRATION FILE NO.: 333-195164-09 | ||
The information in this free writing prospectus is not complete and may be changed. This free writing prospectus is not an offer to sell these securities and it is not soliciting offers to buy these securities in any state where the offer or sale is not permitted.
THIS FREE WRITING PROSPECTUS, DATED JUNE 9, 2015, MAY BE AMENDED OR COMPLETED PRIOR TO TIME OF SALE (THIS FREE WRITING
PROSPECTUS ACCOMPANIES THE ATTACHED PROSPECTUS DATED JANUARY 28, 2015)
STATEMENT REGARDING THIS FREE WRITING PROSPECTUS
The depositor has filed a registration statement (including a prospectus) with the SEC (SEC File No. 333-195164) for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the depositor has filed with the SEC for more complete information about the depositor 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 any underwriter or any dealer participating in this offering will arrange to send you the prospectus if you request it by calling 1-800-745-2063 (8 a.m. –5 p.m. EST) or by emailing wfs.cmbs@wellsfargo.com.
$1,091,690,000 (Approximate)
WELLS FARGO COMMERCIAL MORTGAGE TRUST 2015-C29
as Issuing Entity
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2015-C29
Wells Fargo Commercial Mortgage Securities, Inc.
as Depositor
Wells Fargo Bank, National Association
Rialto Mortgage Finance, LLC
Silverpeak Real Estate Finance LLC
Walker & Dunlop Commercial Property Funding I WF, LLC
National Cooperative Bank, N.A.
as Sponsors and Mortgage Loan Sellers
We, Wells Fargo Commercial Mortgage Securities, Inc., are establishing a trust fund. The offered certificates are mortgage-backed securities issued by the trust fund. Only the classes of mortgage pass-through certificates listed in the table below are being offered by this free writing prospectus and the accompanying prospectus. The trust fund will consist primarily of a pool of 133 commercial, multifamily and manufactured housing community mortgage loans, which together have an aggregate outstanding principal balance of approximately $1,177,025,122 as of the cut-off date. The trust fund will issue twenty (20) classes of commercial mortgage pass-through certificates, twelve (12) of which are being offered by this free writing prospectus. The offered certificates will accrue interest from and including June 1, 2015. Each class of certificates will entitle its holders to receive monthly distributions of interest or principal and interest generally on the fourth business day after the 11th day (or, if such 11th day is not a business day, the next succeeding business day) of each month, commencing in July 2015. Credit enhancement will be provided by the subordination of certain classes of subordinate certificates to certain classes of senior certificates as described under “Description of the Offered Certificates—Distributions” and “—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses” in this free writing prospectus.
Proceeds of the assets of the trust fund are the sole source of distributions on the offered certificates. The offered certificates will not constitute interests in or obligations of, nor will they be insured or guaranteed by any of, the depositor, the sponsors, the mortgage loan sellers, the underwriters, either master servicer, either special servicer, the trust advisor, the certificate administrator, the trustee, the initial subordinate class representative or any of their respective affiliates and will not be insured or guaranteed by any governmental agency or instrumentality or any other person or entity.
Characteristics of the certificates offered to you include:
Class | Approximate Initial Principal Balance or Notional Amount(1) | Approximate Initial Pass- Through Rate | Pass-Through Rate Description | Assumed Final Distribution Date(3) | Rated Final Distribution Date(4) | Expected Ratings (Fitch/KBRA/Moody’s)(4) | |||||||||
Class A-1 | $ | 50,145,000 | % | (5) | December 2019 | June 2048 | AAAsf / AAA(sf) / Aaa(sf) | ||||||||
Class A-2 | $ | 30,508,000 | % | (5) | May 2020 | June 2048 | AAAsf / AAA(sf) / Aaa(sf) | ||||||||
Class A-3 | $ | 250,000,000 | % | (5) | May 2025 | June 2048 | AAAsf / AAA(sf) / Aaa(sf) | ||||||||
Class A-4 | $ | 396,065,000 | % | (5) | June 2025 | June 2048 | AAAsf / AAA(sf) / Aaa(sf) | ||||||||
Class A-SB | $ | 97,199,000 | % | (5) | January 2025 | June 2048 | AAAsf / AAA(sf)/ Aaa(sf) | ||||||||
Class A-S(7) | $ | 88,277,000 | (8) | % | (5) | June 2025 | June 2048 | AAAsf / AAA(sf) / Aa2(sf) | |||||||
Class X-A | $ | 912,194,000 | (9) | % | Variable(10) | NAP | June 2048 | AAAsf / AAA(sf) / NR | |||||||
Class X-B | $ | 120,645,000 | (11) | % | Variable(12) | NAP | June 2048 | NR / AAA(sf) / NR | |||||||
Class B(7) | $ | 70,621,000 | (8) | % | (5) | June 2025 | June 2048 | AA-sf / AA-(sf) / NR | |||||||
Class C(7) | $ | 50,024,000 | (8) | % | (5) | June 2025 | June 2048 | A-sf / A-(sf) / NR | |||||||
Class PEX(7) | $ | 208,922,000 | (8) | % | (13) | June 2025 | June 2048 | A-sf / A-(sf) / NR | |||||||
Class D | $ | 58,851,000 | % | (5) | June 2025 | June 2048 | BBB-sf / BBB-(sf) / NR |
(footnotes to table begin on page 1)
Investing in the offered certificates involves risks. You should carefully consider the risk factors beginning on page 70 of this free writing prospectus and page 8 of the prospectus. Neither the certificates nor the underlying mortgage loans are insured or guaranteed by any governmental agency or instrumentality or any other person or entity. The certificates will represent interests in the issuing entity only. They will not represent interests in or obligations of the depositor, any of its affiliates or any other entity. | The Securities and Exchange Commission and state regulators have not approved or disapproved of the offered certificates or passed upon the adequacy or accuracy of this free writing prospectus or the accompanying prospectus. Any representation to the contrary is a criminal offense. Neither Wells Fargo Commercial Mortgage Securities, Inc. nor anyone else will list the offered certificates on any securities exchange or on any automated quotation system of any securities association such as the Nasdaq Stock Market. The underwriters, Wells Fargo Securities, LLC, Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. will purchase the offered certificates from Wells Fargo Commercial Mortgage Securities, Inc. and will offer them to the public from time to time in negotiated transactions or otherwise at varying prices determined at the time of sale, plus, in certain cases, accrued interest. The underwriters expect to deliver the offered certificates to purchasers in book-entry form only through the facilities of The Depository Trust Company in the United States and Clearstream Banking, société anonyme and Euroclear Bank, as operator of the Euroclear System, in Europe, against payment in New York, New York on or about June 26, 2015. The Issuing Entity is relying on an exclusion or exemption from the definition of “investment company” under the Investment Company Act of 1940, as amended contained in Section 3(c)(5) or in Rule 3a-7, although there may be additional exclusions or exemptions available to the Issuing Entity. The Issuing Entity is being structured so as not to constitute a “covered fund” for purposes of the Volcker Rule under the Dodd-Frank Act (both as defined in this free writing prospectus). |
Wells Fargo Securities | ||
Citigroup | Deutsche Bank Securities | |
June , 2015 |
TABLE OF CONTENTS
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS FREE WRITING PROSPECTUS AND THE ACCOMPANYING PROSPECTUS | ix | |
IMPORTANT NOTICE REGARDING THE OFFERED CERTIFICATES | xi | |
FORWARD-LOOKING STATEMENTS | xiii | |
SUMMARY | 1 | |
RISK FACTORS | 70 | |
Risks Related to the Offered Certificates | 70 | |
The Certificates May Not Be a Suitable Investment for You | 70 | |
The Trust Fund’s Assets May Be Insufficient to Allow for Repayment in Full on Your Certificates | 70 | |
A Future Economic Downturn, a Downturn in Real Estate Markets or Credit Markets and/or Sovereign Debt Concerns May Increase Loan Defaults and/or Affect the Value and Liquidity of Your Investment | 71 | |
Market Considerations and Limited Liquidity | 73 | |
Subordination of the Class A-S, B and C Regular Interests and Class D Certificates Will Affect the Timing of Distributions and the Application of Losses on the Class A-S, B, C, PEX and D Certificates | 78 | |
The Yields to Maturity on the Offered Certificates Depend on a Number of Factors that Cannot Be Predicted with any Certainty | 78 | |
Incorrect Assumptions Regarding Principal Payments and Prepayments May Lead to a Lower than Expected Yield on Your Investment | 80 | |
Frequent and Early Occurrence of Borrower Delinquencies and Defaults May Adversely Affect Your Investment | 81 | |
The Payment of Expenses of the Trust Fund May Reduce the Amount of Distributions on Your Offered Certificates | 81 | |
You Will Have Limited Ability To Control the Servicing of the Mortgage Loans and the Parties with Control Over the Servicing of the Mortgage Loans May Have Interests that Conflict with Your Interests | 82 | |
You Will Have No Control Over the Servicing of the Brickyard Square Loan Combination and the Bella Luna / San Lucas Loan Combination | 83 | |
If any Master Servicer or any Special Servicer Purchases Certificates or Has Investments Related to a Borrower or Other Person, a Conflict of Interest May Arise Between Its Own Interests and Its Duties to the Trust Fund | 84 | |
Various Other Securitization-Level Conflicts of Interest May Have an Adverse Effect on Your Offered Certificates | 86 | |
Potential Conflicts of Interest of the Underwriters and Their Affiliates | 89 | |
Potential Conflicts of Interest of the Subordinate Class Representative | 92 | |
Potential Conflicts of Interest in the Selection of the Mortgage Loans | 93 | |
Ratings of the Certificates Have Substantial Limitations | 94 | |
The Special Servicers May Be Directed To Take Actions | 97 | |
There Are Risks Relating to the Exchangeable Certificates | 98 | |
You May Be Bound by the Actions of Other Certificateholders Even if You Do Not Agree with Those Actions | 99 | |
Because the Offered Certificates Are in Book-Entry Form, Your Rights Can Only Be Exercised Indirectly and There May Be Other Adverse Consequences | 99 | |
Material Federal Tax Considerations Regarding Original Issue Discount | 99 | |
State and Local Tax Considerations | 100 | |
Commencing Legal Proceedings Against Parties to the Pooling and Servicing Agreement May Be Difficult | 100 |
i |
Each of the Mortgage Loan Sellers, the Depositor and the Trust Fund Are Subject to Insolvency or Bankruptcy Laws That May Affect the Trust Fund’s Ownership of the Mortgage Loans | 100 | |
Risks Related to the Mortgage Loans | 102 | |
The Repayment of a Multifamily, Residential Cooperative, Manufactured Housing Community or Commercial Mortgage Loan is Dependent on the Cash Flow Produced by the Corresponding Mortgaged Property, Which Can Be Volatile and Insufficient To Allow Full and Timely Distributions on Your Offered Certificates | 102 | |
Property Value May Be Adversely Affected Even When There Is No Change in Current Operating Income | 104 | |
Concentrations of Mortgaged Property Types Subject the Trust Fund to Increased Risk of Decline in Particular Industries | 105 | |
Retail Properties Have Special Risks | 106 | |
Office Properties Have Special Risks | 110 | |
Multifamily Properties Have Special Risks | 110 | |
Residential Cooperative Properties Have Special Risks | 111 | |
Self-Storage Properties Have Special Risks | 117 | |
Hospitality Properties Have Special Risks | 118 | |
Industrial Properties Have Special Risks | 120 | |
Mixed Use Facilities Have Special Risks | 121 | |
Data Center Properties Have Special Risks | 122 | |
Parking Areas Have Special Risks | 122 | |
Manufactured Housing Community Properties Have Special Risks | 123 | |
Condominium Properties Have Special Risks | 125 | |
Various Limitations and Restrictions Imposed by Affordable Housing Covenants or Programs May Result in Losses on the Mortgage Loans | 126 | |
Renewal, Termination and Expiration of Leases and Reletting Entails Risks That May Adversely Affect Your Investment | 127 | |
Tenant Early Termination Options Entail Special Risks | 130 | |
Tenant Bankruptcies May Adversely Affect the Income Produced by the Mortgaged Properties and May Adversely Affect the Distributions on Your Certificates | 132 | |
Various Loan-Level Conflicts of Interest May Have an Adverse Effect on Your Certificates | 132 | |
A Concentration of Mortgaged Properties in One or More Geographic Areas Reduces Diversification and May Increase the Risk that Your Certificates May Not Be Paid in Full | 133 | |
The Concentration of Loans and Number of Loans with the Same or Related Borrowers Increases the Possibility of Loss on the Loans Which Could Reduce Distributions on Your Certificates | 134 | |
Tenant Concentration Increases the Risk That Cash Flow Will Be Interrupted, Which Could Reduce Distributions on Your Certificates | 134 | |
Limitations on the Enforceability of Multi-Borrower/Multi-Property and Multi-Borrower/Multiple Parcel Arrangements May Have an Adverse Effect on Recourse in the Event of a Default on a Mortgage Loan | 135 | |
Borrowers’ Recent Acquisition of the Mortgaged Properties Causes Uncertainty | 136 | |
Certain Mortgaged Properties May Have a Limited Operating History | 137 | |
Risks Related to Construction, Redevelopment and Renovation at the Mortgaged Properties | 137 | |
Risks of the Anticipated Repayment Date Loans | 138 | |
Converting Commercial Properties to Alternative Uses May Require Significant Expenses Which Could Reduce Distributions on Your Certificates; and |
ii |
Limited Adaptability for Other Uses May Substantially Lower the Liquidation Value of a Mortgaged Property | 138 | |
We Cannot Assure You That Any Upfront or Ongoing Deposits Made by a Borrower to Any Reserve in Respect of a Mortgaged Property Will Be Sufficient To Offset Any Cash Flow Shortfalls That May Occur at the Related Mortgaged Property | 140 | |
The Absence of Lockboxes Entails Risks That Could Adversely Affect Distributions on Your Certificates | 140 | |
If a Borrower is Unable To Repay Its Loan on Its Maturity Date or Anticipated Repayment Date, You May Experience a Loss or Delay in Distributions on Your Certificates | 140 | |
A Borrower’s Other Loans May Reduce the Cash Flow Available to the Mortgaged Property Which May Adversely Affect Distributions on Your Certificates; Mezzanine Financing Reduces a Principal’s Equity in, and Therefore Its Incentive to Support, a Mortgaged Property | 142 | |
Litigation Arising Out of Ordinary Business or Other Activities of the Borrowers, Borrower Principals, Sponsors and Managers Could Adversely Affect Distributions on Your Certificates | 144 | |
Bankruptcy Proceedings Relating to a Borrower Can Result in Dissolution of the Borrower and the Acceleration of the Related Mortgage Loan and Can Otherwise Impair Repayment of the Related Mortgage Loan | 145 | |
Mortgage Loans With Borrowers That Are Not Bankruptcy Remote Entities or That Do Not Have Non-Recourse Carveout Guarantees May Be More Likely To File Bankruptcy Petitions or Take Other Actions That May Adversely Affect Distributions on Your Certificates | 147 | |
Prior Bankruptcies or Other Proceedings May Be Relevant to Future Performance | 148 | |
The Performance of a Mortgage Loan and Its Related Mortgaged Property Depends in Part on Who Controls the Borrower and Mortgaged Property | 148 | |
Provisions Requiring Yield Maintenance Charges, Prepayment Premiums or Defeasance Provisions May Not Be Enforceable | 149 | |
Substitution of Mortgaged Properties and Debt Severance Provisions May Lead to Increased Risks | 149 | |
Inadequacy of Title Insurers May Adversely Affect Distributions on Your Certificates | 150 | |
Increases in Real Estate Taxes May Reduce Net Operating Income | 150 | |
Mortgaged Properties That Are Not in Compliance with Zoning and Building Code Requirements and Use Restrictions Could Adversely Affect Distributions on Your Certificates | 151 | |
Condemnations With Respect to Mortgaged Properties Could Adversely Affect Distributions on Your Certificates | 152 | |
The Absence of or Inadequacy of Insurance Coverage on the Property May Adversely Affect Distributions on Your Certificates | 152 | |
Environmental Conditions at the Mortgaged Properties May Subject the Trust Fund to Liability Under Federal and State Laws, Reducing the Value and Cash Flow of the Mortgaged Properties, Which May Result in Reduced Distributions on Your Offered Certificates | 155 | |
Property Inspections and Engineering Reports May Not Reflect All Conditions That Require Repair on a Mortgaged Property | 159 | |
Appraisals May Not Accurately Reflect the Value of the Mortgaged Properties | 159 | |
Debt Service Coverage Ratio and Net Cash Flow Information Is Based on Numerous Assumptions | 161 |
iii |
The Prospective Performance of the Commercial and Multifamily Mortgage Loans Included in the Trust Fund Should Be Evaluated Separately from the Performance of the Mortgage Loans in Any of the Depositor’s Other Trusts | 163 | |
No Party is Obligated to Review the Mortgage Loans To Determine Whether Representations and Warranties Are True; Mortgage Loan Sellers or Other Responsible Parties May Not Be Able To Make a Required Repurchase or Substitution of a Defective Mortgage Loan | 163 | |
Any Loss of Value Payment Made by a Mortgage Loan Seller May Prove to Be Insufficient to Cover All Losses on a Defective Mortgage Loan | 164 | |
The Operation of a Mortgaged Property Following Foreclosure May Affect the Tax Status of the Trust Fund and May Adversely Affect Distributions on Your Certificates | 164 | |
Tenant Leases May Have Provisions That Could Adversely Affect Distributions on Your Certificates | 165 | |
The Costs of Compliance with the Americans with Disabilities Act of 1990 and Fair Housing Laws May Adversely Affect a Borrower’s Ability To Repay Its Mortgage Loan | 166 | |
Loans Secured by Mortgages on a Leasehold Interest Will Subject Your Investment to a Risk of Loss Upon a Lease Default | 166 | |
The Borrower’s Form of Entity May Cause Special Risks | 167 | |
Tenancies in Common May Hinder Recovery | 168 | |
Changes to REMIC Restrictions on Loan Modifications and REMIC Rules on Partial Releases May Impact an Investment in the Certificates | 169 | |
Other Risks | 170 | |
Loan Combinations May Adversely Affect Net Cash Flow to Sponsors, Which May Reduce Sponsors’ Commitment to Effective Management of the Mortgaged Properties | 170 | |
Terrorist Attacks May Adversely Affect the Value of the Offered Certificates and Payments on the Underlying Mortgage Loans | 170 | |
Foreign Conflicts May Adversely Affect the Value of the Offered Certificates and Payments on the Underlying Mortgage Loans | 170 | |
Additional Risks | 170 | |
Combination or “Layering” of Multiple Risks May Significantly Increase Risk of Loss | 171 | |
CAPITALIZED TERMS USED IN THIS FREE WRITING PROSPECTUS | 171 | |
DESCRIPTION OF THE MORTGAGE POOL | 171 | |
General | 171 | |
Mortgage Loan History | 172 | |
Certain Characteristics of the Mortgage Pool | 172 | |
Concentration of Mortgage Loans and Borrowers | 172 | |
Multi-Property Mortgage Loans; Mortgage Loans with Affiliated Borrowers | 173 | |
Property Type Concentrations | 175 | |
Tenancies in Common; Delaware Statutory Trusts | 179 | |
Condominium Structures | 180 | |
Residential Cooperatives | 181 | |
Certain Terms of the Mortgage Loans | 181 | |
Voluntary Prepayment and Defeasance Provisions | 183 | |
Non-Recourse Obligations | 191 | |
“Due-on-Sale” and “Due-on-Encumbrance” Provisions | 192 | |
Encumbered Interests | 194 | |
ARD Loans | 194 | |
Loan Combinations | 195 | |
The Brickyard Square Loan Combination | 195 |
iv |
The Bella Luna / San Lucas Loan Combination | 199 | |
Subordinate and/or Other Financing | 203 | |
Additional Debt Financing For Mortgage Loans Secured by Residential Cooperatives | 205 | |
Other Additional Financing and Encumbrances | 209 | |
Net Cash Flow and Certain Underwriting Considerations | 211 | |
Cash Management Agreements/Lockboxes | 211 | |
Hazard Insurance | 213 | |
Litigation Considerations | 214 | |
Default History, Bankruptcy Issues and Other Proceedings | 216 | |
Tenant or Other Third Party Matters | 219 | |
Lease Terminations and Expirations | 220 | |
Other Matters | 222 | |
Assessments of Property Value and Condition | 224 | |
Appraisals | 224 | |
Environmental Assessments | 224 | |
Property Condition Assessments | 228 | |
Seismic Review Process and Earthquake Insurance | 228 | |
Zoning and Building Code Compliance | 228 | |
Environmental Insurance | 230 | |
Loan Purpose | 231 | |
Exceptions to Underwriting Guidelines | 232 | |
Assignment of the Mortgage Loans | 233 | |
Representations and Warranties | 236 | |
Cures, Repurchases and Substitutions | 237 | |
Changes in Mortgage Pool Characteristics | 240 | |
Finalized Pooling and Servicing Agreement and Other Material Agreements | 240 | |
TRANSACTION PARTIES | 240 | |
The Issuing Entity | 240 | |
The Depositor | 241 | |
The Sponsors, Mortgage Loan Sellers and Originators | 242 | |
Wells Fargo Bank, National Association | 242 | |
General | 242 | |
Wells Fargo Bank, National Association’s Commercial Mortgage Securitization Program | 242 | |
Wells Fargo Bank’s Commercial Mortgage Loan Underwriting | 243 | |
Review of Mortgage Loans for Which Wells Fargo Bank is the Sponsor | 248 | |
Compliance with Rule 15Ga-1 under the Exchange Act | 251 | |
Rialto Mortgage Finance, LLC | 254 | |
General | 254 | |
Rialto Mortgage’s Securitization Program | 254 | |
Rialto Mortgage’s Underwriting Standards and Loan Analysis | 255 | |
Review of Mortgage Loans for Which Rialto Mortgage is the Sponsor | 259 | |
Compliance with Rule 15Ga-1 under the Exchange Act | 261 | |
Silverpeak Real Estate Finance LLC | 261 | |
General | 261 | |
Silverpeak’s Securitization Program | 262 | |
Silverpeak’s Underwriting Standards and Processes | 262 | |
Review of Mortgage Loans for Which Silverpeak is the Sponsor | 268 | |
Compliance with Rule 15Ga-1 under the Exchange Act | 270 | |
Walker & Dunlop Commercial Property Funding I WF, LLC | 270 | |
General | 270 | |
WDCPF’s Securitization Program | 271 |
v |
Review of WDCPF I WF Mortgage Loans | 272 | |
WDCPF I WF’s Underwriting Standards | 273 | |
Exceptions | 278 | |
Servicing | 278 | |
Compliance with Rule 15Ga-1 under the Exchange Act | 278 | |
National Cooperative Bank, N.A | 278 | |
General | 278 | |
National Cooperative Bank, N.A.’s Securitization Program | 279 | |
National Cooperative Bank, N.A.’s Underwriting Standards and Processes | 279 | |
Review of Mortgage Loans for Which National Cooperative Bank, N.A. is the Sponsor | 284 | |
Compliance with Rule 15Ga-1 under the Exchange Act | 286 | |
Compensation of the Sponsors | 286 | |
The Trustee | 286 | |
The Certificate Administrator, Tax Administrator, Certificate Registrar and Custodian | 287 | |
The Master Servicers | 289 | |
Wells Fargo Bank, National Association | 289 | |
National Cooperative Bank, N.A | 292 | |
The Special Servicers | 296 | |
Midland Loan Services, a Division of PNC Bank, National Association | 296 | |
National Cooperative Bank, N.A | 298 | |
Affiliated Servicers | 301 | |
The Trust Advisor | 304 | |
Affiliations and Certain Relationships Among Certain Transaction Parties | 305 | |
DESCRIPTION OF THE OFFERED CERTIFICATES | 309 | |
General | 309 | |
Certificate Principal Balances and Certificate Notional Amounts | 310 | |
Exchanges of Exchangeable Certificates | 312 | |
Distribution Account | 313 | |
Interest Reserve Account | 315 | |
Distributions | 316 | |
Priority of Distributions | 328 | |
Treatment of REO Properties | 334 | |
Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses | 335 | |
Reductions of Interest Entitlements and the Principal Distribution Amount in Connection with Certain Trust Advisor Expenses | 339 | |
Advances of Delinquent Monthly Debt Service Payments | 341 | |
Fees and Expenses | 345 | |
Reports to Certificateholders; Available Information | 351 | |
Voting Rights | 360 | |
Delivery, Form and Denomination | 360 | |
Matters Regarding the Certificate Administrator and the Tax Administrator | 360 | |
Amendment of the Pooling and Servicing Agreement | 361 | |
Termination of the Pooling and Servicing Agreement | 363 | |
The Trustee | 365 | |
Eligibility Requirements | 365 | |
Duties of the Trustee | 365 | |
Matters Regarding the Trustee | 366 | |
Resignation and Removal of the Trustee | 367 | |
Suits, Actions and Proceedings by Certificateholders | 367 | |
YIELD AND MATURITY CONSIDERATIONS | 368 |
vi |
Yield Considerations | 368 | |
Weighted Average Life | 374 | |
Yield Sensitivity of the Class X-A and X-B Certificates | 379 | |
Pre-Tax Yield to Maturity Tables | 379 | |
SERVICING OF THE MORTGAGE LOANS AND ADMINISTRATION OF THE TRUST FUND | 385 | |
General | 385 | |
Servicing and Other Compensation and Payment of Expenses | 392 | |
Asset Status Reports | 407 | |
The Majority Subordinate Certificateholder and the Subordinate Class Representative | 410 | |
The Trust Advisor | 413 | |
Annual Reports and Meeting | 415 | |
Net Present Value Calculations | 419 | |
Review and Consultation With Respect to Calculations of Net Present Value and Appraisal Reduction Amounts | 419 | |
Replacement of the Special Servicers | 420 | |
Maintenance of Insurance | 423 | |
Enforcement of Due-on-Sale and Due-on-Encumbrance Provisions | 426 | |
Transfers of Interests in Borrowers | 427 | |
Modifications, Waivers, Amendments and Consents | 427 | |
Required Appraisals | 434 | |
Collection Accounts | 439 | |
Procedures With Respect to Defaulted Mortgage Loans and REO Properties | 441 | |
REO Account | 446 | |
Inspections; Collection of Operating Information | 447 | |
Rating Agency Confirmations | 448 | |
Servicer Termination Events | 451 | |
Rights Upon the Occurrence of a Servicer Termination Event | 453 | |
Termination, Discharge and Resignation of the Trust Advisor | 454 | |
Resignation of the Master Servicers and the Special Servicers | 456 | |
Certain Matters Regarding the Master Servicers, the Special Servicers, the Trust Advisor and the Depositor | 457 | |
Evidence as to Compliance | 460 | |
Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations | 461 | |
Governing Law; Waiver of Jury Trial; and Consent to Jurisdiction | 464 | |
CERTAIN LEGAL ASPECTS OF THE MORTGAGE LOANS | 464 | |
General | 464 | |
Other Aspects | 466 | |
MATERIAL FEDERAL INCOME TAX CONSEQUENCES | 466 | |
General | 466 | |
Characterization of Investments in Offered Certificates | 468 | |
Discount and Premium; Prepayment Consideration | 469 | |
Taxation of the Exchangeable Certificates | 471 | |
Further Information | 471 | |
STATE AND OTHER TAX CONSEQUENCES | 471 | |
ERISA CONSIDERATIONS | 471 | |
Plan Assets | 472 | |
Special Exemption Applicable to the Offered Certificates | 473 | |
Insurance Company General Accounts | 475 | |
Special Considerations Relating to Governmental Plans | 475 | |
General Investment Considerations | 476 | |
LEGAL INVESTMENT | 476 |
vii |
LEGAL MATTERS | 477 | |||
RATINGS | 477 | |||
INDEX OF DEFINED TERMS | 480 | |||
Annex A-1: | Certain Characteristics of the Mortgage Loans and Mortgaged Properties | A-1-1 | ||
Annex A-2: | Mortgage Pool Information (Tables) | A-2-1 | ||
Annex A-3: | Summaries of the Fifteen Largest Mortgage Loans | A-3-1 | ||
Annex B: | Additional Mortgage Loan Information/Definitions | B-1 | ||
Annex C-1: | Mortgage Loan Representations and Warranties | C-1-1 | ||
Annex C-2: | Exceptions to Mortgage Loan Representations and Warranties | C-2-1 | ||
Annex D: | Global Clearance, Settlement and Tax Documentation Procedures | D-1 | ||
Annex E-1: | Form of Trust Advisor Annual Report (Subordinate Control Period) | E-1-1 | ||
Annex E-2: | Form of Trust Advisor Annual Report (Collective Consultation Period and Senior Consultation Period) | E-2-1 | ||
Annex F: | Form of Distribution Date Statement | F-1 | ||
Annex G: | Class A-SB Planned Principal Balance Schedule | G-1 |
viii |
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS FREE WRITING
PROSPECTUS AND THE ACCOMPANYING PROSPECTUS
Information about the offered certificates is provided in two separate documents that progressively provide more detail:
· | the accompanying prospectus, which provides general information, some of which may not apply to a particular class of offered certificates, including your class; and |
· | this free writing prospectus, which describes the specific terms of your class of offered certificates. |
You should rely only on the information contained in this free writing prospectus and the accompanying prospectus. The depositor has not authorized anyone to provide you with information that is different from that contained in this free writing prospectus and the prospectus.
References in the accompanying prospectus to “prospectus supplement” should be treated as references to this free writing prospectus.
This free writing prospectus and the accompanying prospectus include cross references to sections in these materials where you can find further related discussions. The tables of contents in this free writing prospectus and the prospectus identify the pages where these sections are located.
Cross-references are included in this free writing prospectus and in the accompanying prospectus which direct you to more detailed descriptions of a particular topic. You can also find references to key topics in the table of contents in this free writing prospectus on page ii and the table of contents in the accompanying prospectus on page i. The capitalized terms used in this free writing prospectus are defined on the pages indicated under the caption “Index of Defined Terms” in this free writing prospectus. The definitions of certain capitalized terms used in the accompanying prospectus are included under the caption “Glossary” beginning on page 134 of the accompanying prospectus. In this free writing prospectus, the terms “depositor”, “we” and “us” refer to Wells Fargo Commercial Mortgage Securities, Inc.
EUROPEAN ECONOMIC AREA
THIS FREE WRITING PROSPECTUS AND THE ACCOMPANYING PROSPECTUS IS NOT A PROSPECTUS FOR THE PURPOSES OF THE EU PROSPECTUS DIRECTIVE AS IMPLEMENTED IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA (THE “EEA”) (EACH, A “RELEVANT MEMBER STATE”). THIS FREE WRITING PROSPECTUS AND THE ACCOMPANYING PROSPECTUS HAVE BEEN PREPARED ON THE BASIS THAT ALL OFFERS OF THE OFFERED CERTIFICATES WILL BE MADE PURSUANT TO AN EXEMPTION UNDER THE EU PROSPECTUS DIRECTIVE FROM THE REQUIREMENT TO PUBLISH A PROSPECTUS IN CONNECTION WITH OFFERS OF THE OFFERED CERTIFICATES. ACCORDINGLY, ANY PERSON MAKING OR INTENDING TO MAKE AN OFFER IN THAT RELEVANT MEMBER STATE OF OFFERED CERTIFICATES WHICH ARE THE SUBJECT OF THE OFFERING CONTEMPLATED IN THIS FREE WRITING PROSPECTUS SHOULD ONLY DO SO IN CIRCUMSTANCES IN WHICH NO OBLIGATION ARISES FOR THE DEPOSITOR, THE ISSUING ENTITY OR ANY OF THE UNDERWRITERS TO PUBLISH A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE EU PROSPECTUS DIRECTIVE FOR SUCH OFFERS. NONE OF THE DEPOSITOR, THE ISSUING ENTITY OR THE UNDERWRITERS HAVE AUTHORIZED, NOR DO THEY AUTHORIZE, THE MAKING OF ANY OFFER OF THE OFFERED CERTIFICATES IN WHICH AN OBLIGATION
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ARISES FOR THE DEPOSITOR, THE ISSUING ENTITY OR ANY OF THE UNDERWRITERS TO PUBLISH A PROSPECTUS FOR SUCH OFFERS. THE EXPRESSION “EU PROSPECTUS DIRECTIVE” MEANS DIRECTIVE 2003/71/EC (AS AMENDED, INCLUDING BY DIRECTIVE 2010/73/EU), AND INCLUDES ANY RELEVANT IMPLEMENTING MEASURE IN THE RELEVANT MEMBER STATE.
EUROPEAN ECONOMIC AREA SELLING RESTRICTIONS
IN RELATION TO EACH RELEVANT MEMBER STATE, EACH UNDERWRITER HAS REPRESENTED AND AGREED THAT IT HAS NOT MADE AND WILL NOT MAKE AN OFFER OF THE CERTIFICATES WHICH ARE THE SUBJECT OF THE OFFERING CONTEMPLATED BY THIS FREE WRITING PROSPECTUS AS COMPLETED BY THE ACCOMPANYING PROSPECTUS TO THE PUBLIC IN THAT RELEVANT MEMBER STATE OTHER THAN:
(a) TO ANY LEGAL ENTITY WHICH IS A “QUALIFIED INVESTOR” AS DEFINED IN THE EU PROSPECTUS DIRECTIVE;
(b) TO FEWER THAN 150 NATURAL OR LEGAL PERSONS (OTHER THAN “QUALIFIED INVESTORS” AS DEFINED IN THE EU PROSPECTUS DIRECTIVE) SUBJECT TO OBTAINING THE PRIOR CONSENT OF THE RELEVANT UNDERWRITER OR UNDERWRITERS NOMINATED BY THE ISSUING ENTITY FOR ANY SUCH OFFER; OR
(c) IN ANY OTHER CIRCUMSTANCES FALLING WITHIN ARTICLE 3(2) OF THE EU PROSPECTUS DIRECTIVE;
PROVIDED THAT NO SUCH OFFER OF THE OFFERED CERTIFICATES REFERRED TO IN CLAUSES (a) TO (c) ABOVE SHALL REQUIRE THE ISSUING ENTITY, THE DEPOSITOR OR ANY UNDERWRITER TO PUBLISH A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE EU PROSPECTUS DIRECTIVE.
FOR THE PURPOSES OF THE PRIOR PARAGRAPH, THE EXPRESSION AN “OFFER OF THE CERTIFICATES WHICH ARE THE SUBJECT OF THE OFFERING CONTEMPLATED BY THIS FREE WRITING PROSPECTUS TO THE PUBLIC” IN RELATION TO ANY OFFERED CERTIFICATES IN ANY RELEVANT MEMBER STATE MEANS THE COMMUNICATION IN ANY FORM AND BY ANY MEANS OF SUFFICIENT INFORMATION ON THE TERMS OF THE OFFER AND THE CERTIFICATES TO BE OFFERED SO AS TO ENABLE AN INVESTOR TO DECIDE TO PURCHASE OR SUBSCRIBE TO THE OFFERED CERTIFICATES, AS THE SAME MAY BE VARIED IN THAT MEMBER STATE BY ANY MEASURE IMPLEMENTING THE EU PROSPECTUS DIRECTIVE IN THAT MEMBER STATE.
NOTICE TO UNITED KINGDOM INVESTORS
THE DISTRIBUTION OF THIS FREE WRITING PROSPECTUS AND THE ACCOMPANYING PROSPECTUS IS BEING MADE ONLY TO, OR DIRECTED ONLY AT, PERSONS WHO (1) ARE OUTSIDE THE UNITED KINGDOM, OR (2) ARE INSIDE THE UNITED KINGDOM AND QUALIFY AS INVESTMENT PROFESSIONALS IN ACCORDANCE WITH ARTICLE 19(5) OR ARE PERSONS FALLING WITHIN ARTICLES 49(2)(A) THROUGH (D) (“HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.”) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS THE “RELEVANT PERSONS”). THIS FREE WRITING PROSPECTUS AND THE ACCOMPANYING PROSPECTUS MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS FREE WRITING PROSPECTUS AND THE ACCOMPANYING PROSPECTUS RELATES IS
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AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.
UNITED KINGDOM SELLING RESTRICTIONS
EACH UNDERWRITER HAS REPRESENTED AND AGREED, THAT IN THE UNITED KINGDOM:
(a) IT HAS ONLY COMMUNICATED OR CAUSED TO BE COMMUNICATED AN INVITATION OR INDUCEMENT TO ENGAGE IN INVESTMENT ACTIVITY (WITHIN THE MEANING OF SECTION 21 OF THE FINANCIAL SERVICES AND MARKETS ACT (THE “FSMA”) RECEIVED BY IT IN CONNECTION WITH THE ISSUE OR SALE OF ANY OFFERED CERTIFICATES IN CIRCUMSTANCES IN WHICH SECTION 21(1) OF THE FSMA DOES NOT APPLY TO EITHER THE ISSUING ENTITY OR THE DEPOSITOR; AND
(b) IT HAS COMPLIED AND WILL COMPLY WITH ALL APPLICABLE PROVISIONS OF THE FSMA WITH RESPECT TO ANYTHING DONE BY IT IN RELATION TO THE OFFERED CERTIFICATES IN, FROM OR OTHERWISE INVOLVING THE UNITED KINGDOM.
JAPAN
THE CERTIFICATES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE FINANCIAL INSTRUMENTS AND EXCHANGE LAW OF JAPAN (THE “FIEL”). ACCORDINGLY, EACH UNDERWRITER HAS REPRESENTED AND AGREED THAT IT HAS NOT, DIRECTLY OR INDIRECTLY, OFFERED OR SOLD AND WILL NOT, DIRECTLY OR INDIRECTLY, OFFER OR SELL ANY CERTIFICATES IN JAPAN OR TO, OR FOR THE BENEFIT OF, ANY RESIDENT OF JAPAN (WHICH TERM AS USED HEREIN MEANS ANY PERSON RESIDENT IN JAPAN, INCLUDING ANY CORPORATION OR OTHER ENTITY ORGANIZED UNDER THE LAWS OF JAPAN) OR TO OTHERS FOR RE-OFFERING OR RE-SALE, DIRECTLY OR INDIRECTLY, IN JAPAN OR TO, OR FOR THE BENEFIT OF, ANY RESIDENT OF JAPAN EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF, AND OTHERWISE IN COMPLIANCE WITH, THE FIEL AND OTHER RELEVANT LAWS AND REGULATIONS OF JAPAN.
IMPORTANT NOTICE REGARDING THE OFFERED CERTIFICATES
WE HAVE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, WITH RESPECT TO THE CERTIFICATES OFFERED IN THIS FREE WRITING PROSPECTUS. HOWEVER, THIS FREE WRITING PROSPECTUS DOES NOT CONTAIN ALL OF THE INFORMATION CONTAINED IN OUR REGISTRATION STATEMENT. FOR FURTHER INFORMATION REGARDING THE DOCUMENTS REFERRED TO IN THIS FREE WRITING PROSPECTUS, YOU SHOULD REFER TO OUR REGISTRATION STATEMENT AND THE EXHIBITS TO IT. OUR REGISTRATION STATEMENT AND THE EXHIBITS TO IT CAN BE INSPECTED AND COPIED AT PRESCRIBED RATES AT THE PUBLIC REFERENCE FACILITIES MAINTAINED BY THE SEC AT ITS PUBLIC REFERENCE ROOM, 100 F STREET, N.E., WASHINGTON, D.C. 20549. YOU MAY OBTAIN INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE ROOM BY CALLING THE SEC AT 1-800-SEC-0330. COPIES OF THESE MATERIALS CAN ALSO BE OBTAINED ELECTRONICALLY THROUGH THE SEC’S INTERNET WEBSITE (HTTP://WWW.SEC.GOV). THIS FREE WRITING PROSPECTUS DOES NOT CONTAIN ALL INFORMATION THAT IS REQUIRED TO BE INCLUDED IN A PROSPECTUS REQUIRED TO BE FILED AS PART OF A REGISTRATION STATEMENT.
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THIS FREE WRITING PROSPECTUS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY STATE OR OTHER JURISDICTION WHERE SUCH OFFER, SOLICITATION OR SALE IS NOT PERMITTED.
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. PROSPECTIVE INVESTORS SHOULD UNDERSTAND THAT, WHEN CONSIDERING THE PURCHASE OF THE OFFERED CERTIFICATES, A CONTRACT OF SALE WILL COME INTO BEING NO SOONER THAN THE DATE ON WHICH THE RELEVANT CLASS OF CERTIFICATES HAS BEEN PRICED AND THE UNDERWRITERS HAVE CONFIRMED THE ALLOCATION OF CERTIFICATES TO BE MADE TO INVESTORS; ANY “INDICATIONS OF INTEREST” EXPRESSED BY ANY PROSPECTIVE INVESTOR, AND ANY “SOFT CIRCLES” GENERATED BY THE UNDERWRITERS, WILL NOT CREATE BINDING CONTRACTUAL OBLIGATIONS FOR SUCH PROSPECTIVE INVESTORS, ON THE ONE HAND, OR THE UNDERWRITERS, THE DEPOSITOR OR ANY OF THEIR RESPECTIVE AGENTS OR AFFILIATES, ON THE OTHER HAND.
AS A RESULT OF THE FOREGOING, A PROSPECTIVE INVESTOR MAY COMMIT TO PURCHASE CERTIFICATES THAT HAVE CHARACTERISTICS THAT MAY CHANGE, AND EACH PROSPECTIVE INVESTOR IS ADVISED THAT ALL OR A PORTION OF THE CERTIFICATES REFERRED TO IN THESE MATERIALS MAY BE ISSUED WITHOUT ALL OR CERTAIN OF THE CHARACTERISTICS DESCRIBED IN THIS FREE WRITING PROSPECTUS OR MAY BE ISSUED WITH CHARACTERISTICS THAT DIFFER FROM THE CHARACTERISTICS DESCRIBED IN THESE MATERIALS. THE UNDERWRITERS’ OBLIGATION TO SELL CERTIFICATES TO ANY PROSPECTIVE INVESTOR IS CONDITIONED ON THE CERTIFICATES THAT ARE ACTUALLY ISSUED AND THE TRANSACTION HAVING THE CHARACTERISTICS DESCRIBED IN THESE MATERIALS. IF THE UNDERWRITERS DETERMINE THAT ONE OR MORE CONDITIONS ARE NOT SATISFIED IN ANY MATERIAL RESPECT, SUCH PROSPECTIVE INVESTOR WILL BE NOTIFIED, AND NEITHER THE DEPOSITOR NOR ANY UNDERWRITER WILL HAVE ANY OBLIGATION TO SUCH PROSPECTIVE INVESTOR TO DELIVER ANY PORTION OF THE CERTIFICATES THAT SUCH PROSPECTIVE INVESTOR HAS COMMITTED TO PURCHASE, AND THERE WILL BE NO LIABILITY BETWEEN THE UNDERWRITERS, THE DEPOSITOR OR ANY OF THEIR RESPECTIVE AGENTS OR AFFILIATES, ON THE ONE HAND, AND SUCH PROSPECTIVE INVESTOR, ON THE OTHER HAND, AS A CONSEQUENCE OF THE NON-DELIVERY.
EACH PROSPECTIVE INVESTOR HAS REQUESTED THAT THE UNDERWRITERS PROVIDE TO SUCH PROSPECTIVE INVESTOR INFORMATION IN CONNECTION WITH SUCH PROSPECTIVE INVESTOR’S CONSIDERATION OF THE PURCHASE OF CERTAIN OFFERED CERTIFICATES DESCRIBED IN THESE MATERIALS. THESE MATERIALS ARE BEING PROVIDED TO EACH PROSPECTIVE INVESTOR FOR INFORMATION PURPOSES ONLY IN RESPONSE TO SUCH PROSPECTIVE INVESTOR’S SPECIFIC REQUEST, THE UNDERWRITERS DESCRIBED IN THESE MATERIALS 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 RESPECTIVE EMPLOYEES MAY FROM TIME TO TIME HAVE A LONG OR SHORT POSITION IN ANY SECURITY OR CONTRACT DISCUSSED IN THESE MATERIALS.
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THE INFORMATION CONTAINED IN THIS FREE WRITING PROSPECTUS SUPERSEDES ANY PREVIOUS SUCH INFORMATION DELIVERED TO ANY PROSPECTIVE INVESTOR AND WILL BE SUPERSEDED BY INFORMATION DELIVERED TO SUCH PROSPECTIVE INVESTOR PRIOR TO THE TIME OF SALE.
THE OFFERED CERTIFICATES DO NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE DEPOSITOR, THE SPONSORS, THE MORTGAGE LOAN SELLERS, EITHER MASTER SERVICER, EITHER SPECIAL SERVICER, THE TRUSTEE, THE TRUST ADVISOR, THE CERTIFICATE ADMINISTRATOR, THE INITIAL SUBORDINATE CLASS REPRESENTATIVE, THE UNDERWRITERS OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THE OFFERED CERTIFICATES NOR THE MORTGAGE LOANS ARE INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY OR PRIVATE INSURER.
THERE IS CURRENTLY NO SECONDARY MARKET FOR THE OFFERED CERTIFICATES. WE CANNOT ASSURE YOU THAT A SECONDARY MARKET WILL DEVELOP OR, IF A SECONDARY MARKET DOES DEVELOP, THAT IT WILL PROVIDE HOLDERS OF THE OFFERED CERTIFICATES WITH LIQUIDITY OF INVESTMENT OR THAT IT WILL CONTINUE FOR THE TERM OF THE OFFERED CERTIFICATES. THE UNDERWRITERS CURRENTLY INTEND TO MAKE A MARKET IN THE OFFERED CERTIFICATES BUT ARE UNDER NO OBLIGATION TO DO SO. ACCORDINGLY, PURCHASERS MUST BE PREPARED TO BEAR THE RISKS OF THEIR INVESTMENTS FOR AN INDEFINITE PERIOD. SEE “RISK FACTORS—RISKS RELATED TO THE OFFERED CERTIFICATES—MARKET CONSIDERATIONS AND LIMITED LIQUIDITY” IN THIS FREE WRITING PROSPECTUS.
FORWARD-LOOKING STATEMENTS
This free writing prospectus and the accompanying prospectus contain certain forward-looking statements. If and when included in this free writing prospectus, the words “expects”, “intends”, “anticipates”, “estimates” and analogous expressions and all statements that are not historical facts, including statements about our beliefs or expectations, are intended to identify forward-looking statements. Any forward-looking statements are made subject to risks and uncertainties which could cause actual results to differ materially from those stated. Those risks and uncertainties include, among other things, declines in general economic and business conditions, increased competition, changes in demographics, changes in political and social conditions, regulatory initiatives and changes in customer preferences, many of which are beyond our control and the control of any other person or entity related to this offering. The forward-looking statements made in this free writing prospectus are made as of the date stated on the cover. We have no obligation to update or revise any forward-looking statement.
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 free writing prospectus 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.
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SUMMARY | ||
The following summary is a short description of the main terms of the offered certificates and the mortgage loans and is qualified in its entirety by reference to the more detailed information appearing elsewhere in this free writing prospectus and the accompanying prospectus. This summary does not contain all of the information that may be important to you. To fully understand the terms of the offered certificates and the mortgage loans, you will need to read both this free writing prospectus and the accompanying prospectus in their entirety. | ||
Overview of the Certificates | ||
The table below lists certain summary information concerning the Wells Fargo Commercial Mortgage Trust 2015-C29, Commercial Mortgage Pass-Through Certificates, Series 2015-C29. Each certificate represents an interest in the mortgage loans included in the trust fund. We are offering the Class A-1, A-2, A-3, A-4, A-SB, A-S, X-A, X-B, B, C, PEX and D certificates pursuant to this free writing prospectus. |
Class | Approx. Initial Principal Balance or Notional Amount(1) | Approx.% of Aggregate Cut-off Date Balance | Approx. Initial Credit Support(2) | Approx. Initial Pass- Through Rate | Pass- Through Rate Description | Weighted Average Life (Years)(3) | Expected Principal Window(3) | Expected Ratings (Fitch/KBRA/Moody’s)(4) | |||||||||||||||
Offered Certificates | |||||||||||||||||||||||
A-1 | $ | 50,145,000 | 4.260 | % | 30.000 | % | % | (5) | 2.59 | 07/15 - 12/19 | AAAsf / AAA(sf) / Aaa(sf) | ||||||||||||
A-2 | $ | 30,508,000 | 2.592 | % | 30.000 | % | % | (5) | 4.77 | 12/19 - 05/20 | AAAsf / AAA(sf) / Aaa(sf) | ||||||||||||
A-3 | $ | 250,000,000 | 21.240 | % | 30.000 | % | % | (5) | 9.78 | 01/25 - 05/25 | AAAsf / AAA(sf) / Aaa(sf) | ||||||||||||
A-4(6) | $ | 396,065,000 | 33.650 | % | 30.000 | % | % | (5) | 9.91 | 05/25 - 06/25 | AAAsf / AAA(sf) / Aaa(sf) | ||||||||||||
A-SB | $ | 97,199,000 | 8.258 | % | 30.000 | % | % | (5) | 7.29 | 05/20 - 01/25 | AAAsf / AAA(sf)/ Aaa(sf) | ||||||||||||
A-S(7) | $ | 88,277,000 | (8) | 7.500 | % | 22.500 | % | % | (5) | 9.97 | 06/25 - 06/25 | AAAsf / AAA(sf) / Aa2(sf) | |||||||||||
X-A | $ | 912,194,000 | (9) | NAP | NAP | % | Variable(10) | NAP | NAP | AAAsf / AAA(sf) / NR | |||||||||||||
X-B | $ | 120,645,000 | (11) | NAP | NAP | % | Variable(12) | NAP | NAP | NR / AAA(sf) / NR | |||||||||||||
B(7) | $ | 70,621,000 | (8) | 6.000 | % | 16.500 | % | % | (5) | 9.97 | 06/25 - 06/25 | AA-sf / AA-(sf) / NR | |||||||||||
C(7) | $ | 50,024,000 | (8) | 4.250 | % | 12.250 | % | % | (5) | 9.97 | 06/25 - 06/25 | A-sf / A-(sf) / NR | |||||||||||
PEX(7) | $ | 208,922,000 | (8) | 17.750 | % | 12.250 | % | % | (13) | 9.97 | 06/25 - 06/25 | A-sf / A-(sf) / NR | |||||||||||
D | $ | 58,851,000 | 5.000 | % | 7.250 | % | % | (5) | 9.97 | 06/25 - 06/25 | BBB-sf / BBB-(sf) / NR | ||||||||||||
Non-Offered Certificates | |||||||||||||||||||||||
LIBOR + | |||||||||||||||||||||||
A-4FL | $ | 396,065,000 | (14) | 33.650 | % | 30.000 | % | %(15) | Floating | 9.91 | 05/25 - 06/25 | AAAsf / AAA(sf) / Aaa(sf) | |||||||||||
A-4FX | $ | 0 | (14) | 0.000 | % | 30.000 | % | % | (5) | 9.91 | 05/25 - 06/25 | AAAsf / AAA(sf) / Aaa(sf) | |||||||||||
E | $ | 23,541,000 | 2.000 | % | 5.250 | % | % | (5) | 9.97 | 06/25 - 06/25 | BBsf / BB(sf) / NR | ||||||||||||
F | $ | 11,770,000 | 1.000 | % | 4.250 | % | % | (5) | 9.97 | 06/25 - 06/25 | Bsf / B(sf) / NR | ||||||||||||
G | $ | 50,024,121 | 4.250 | % | 0.000 | % | % | (5) | 9.97 | 06/25 - 06/25 | NR / NR / NR | ||||||||||||
V-1(16) | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NR / NR / NR | |||||||||||||||
V-2(17) | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NR / NR / NR | |||||||||||||||
R(18) | NAP | NAP | NAP | NAP | NAP | NAP | NAP | NR / NR / NR | |||||||||||||||
(footnotes to table on cover and table set forth above) |
(1) | The principal balances and notional amounts set forth in the table are approximate. The actual initial principal balances and notional amounts may be larger or smaller depending on the aggregate cut-off date principal balance of the mortgage loans definitively included in the pool of mortgage loans, which aggregate cut-off date principal balance may be as much as 5% larger or smaller than the amount presented in this free writing prospectus. | ||
(2) | The approximate initial credit support with respect to the Class A-1, A-2, A-3, A-4, A-4FL, A-4FX and A-SB certificates represents the approximate credit enhancement for the Class A-1, A-2, A-3, A-4, A-4FL, A-4FX and A-SB certificates in the aggregate. No class of certificates will provide any credit support to the Class A-4FL certificates for any failure by the swap counterparty to make the payment under the related swap contract. The percentage indicated under the column “Approximate Initial Credit Support” with respect to the Class C and PEX certificates represents the approximate credit support for the Class C regular interest, which will have an initial outstanding principal balance on the closing date of $50,024,000. | ||
(3) | Calculated based on a 0% CPR and the structuring assumptions described in Annex B to this free writing prospectus. | ||
(4) | The expected ratings presented are those of Fitch Ratings, Inc., Kroll Bond Rating Agency, Inc. and Moody’s Investors Service, Inc., which the depositor hired to rate the rated offered certificates. One or more other nationally recognized statistical rating organizations 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 or provide market reports and/or published commentary related to the offered certificates. We cannot assure you as to what ratings a non-hired nationally recognized statistical rating organization would assign or that its reports will not express differing, possibly negative, views of the mortgage loans and/or the offered certificates. To the extent described in this free writing prospectus, the ratings of each |
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class of offered certificates address the likelihood of the timely distribution of interest and, except in the case of the Class X-A and X-B certificates, the ultimate distribution of principal due on those classes on or before the date set forth in the table on the cover as the “Rated Final Distribution Date”. Fitch Ratings, Inc., Kroll Bond Rating Agency, Inc. and Moody’s Investors Service, Inc. have informed us that the “sf” designation in their ratings represents an identifier for 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 their internet websites. Credit ratings referenced throughout this document 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. See “Risk Factors—Risks Related to the Offered Certificates—Ratings of the Certificates Have Substantial Limitations” and “Ratings” in this free writing prospectus and “Ratings” in the accompanying prospectus. | |||
(5) | The pass-through rates for the Class A-1, A-2, A-3, A-4, A-4FX, A-SB, A-S, B, C, D, E, F and G certificates and the Class A-4FX, A-S, B and C regular interests, in each case, will be one of the following: (i) a fixed rateper annum, (ii) the weighted average of the net mortgage interest rates on the mortgage loans for the related distribution date, (iii) a variable rateper annum equal to the lesser of (a) a fixed rate and (b) the weighted average of the net mortgage interest rates on the mortgage loans for the related distribution date or (iv) a variable rateper annum equal to the weighted average of the net mortgage interest rates on the mortgage loans for the related distribution dateminus a specified percentage. For purposes of the calculation of the weighted average of the net mortgage interest rates on the mortgage loans for each distribution date, the mortgage interest rates will be adjusted as necessary to a 30/360 basis. | ||
(6) | Represents the maximum initial principal balance of the Class A-4 certificates that will be issued on the closing date. The aggregate initial principal balance of the Class A-4, A-4FL and A-4FX certificates will be $396,065,000. | ||
(7) | The Class A-S, B and C certificates may be exchanged for Class PEX certificates, and Class PEX certificates may be exchanged for the Class A-S, B and C certificates, in each case, only in the manner described under “Description of the Offered Certificates—Exchanges of Exchangeable Certificates” in this free writing prospectus. | ||
(8) | On the closing date, the trust fund will issue the Class A-S, B and C regular interests, which will have initial principal balances equal to the initial principal balances of the Class A-S, B and C certificates, respectively. The Class A-S, B, C and PEX certificates will, at all times, represent undivided beneficial ownership interests in a grantor trust that will hold such regular interests. Each of the Class A-S, B and C certificates will, at all times, represent a beneficial interest in a percentage of the outstanding principal balance of the Class A-S, B and C regular interests, respectively. The Class PEX certificates will, at all times, represent a beneficial interest in the remaining percentages of the outstanding principal balances of each of the Class A S, B and C regular interests. Following any exchange of Class A-S, B and C certificates for Class PEX certificates or any exchange of Class PEX certificates for Class A-S, B and C certificates as described herein, the percentage interest of the outstanding principal balances of the Class A-S, B and C regular interests that is represented by the Class A-S, B and C certificates on the one hand and the Class PEX certificates on the other hand will be increased or decreased accordingly. The initial principal balances of the Class A-S, B and C certificates represent the principal balances of such classes without giving effect to any exchange. The initial principal balance of the Class PEX certificates is equal to the aggregate of the initial principal balances of the Class A-S, B and C certificates and represents the maximum principal balance of the Class PEX certificates that could be issued in an exchange. The principal balance of each of the Class A-S, B and C regular interests will equal the aggregate of the applicable percentage interests of the Class A-S, B and C certificates, respectively, and of the related component of the Class PEX certificates. The principal balances of the Class A-S, B and C certificates to be issued on the closing date will be reduced, in required proportions, by an amount equal to the principal balance of the Class PEX certificates issued on the closing date. | ||
(9) | The Class X-A certificates are notional amount certificates. The notional amount of the Class X-A certificates will be equal to the aggregate principal balance of the Class A-1, A-2, A-3, A-4 and A-SB certificates and the Class A-4FX and A-S regular interests outstanding from time to time. The Class X-A certificates will not be entitled to distributions of principal. | ||
(10) | The pass-through rate for the Class X-A certificates for any distribution date will be aper annum rate equal to the excess, if any, of (a) the weighted average of the net mortgage interest rates on the mortgage loans for the related distribution date, over (b) the weighted average of the pass-through rates on the Class A-1, A-2, A-3, A-4 and A-SB certificates and the Class A-4FX and A-S regular interests for the related distribution date, weighted on the basis of their respective aggregate principal balances outstanding immediately prior to that distribution date. For purposes of the calculation of the weighted average of the net mortgage interest rates on the mortgage loans for each distribution date, the mortgage interest rates will be adjusted as necessary to a 30/360 basis. | ||
(11) | The Class X-B certificates are notional amount certificates. The notional amount of the Class X-B certificates will be equal to the aggregate principal balance of the Class B and C regular interests outstanding from time to time. The Class X-B certificates will not be entitled to distributions of principal. | ||
(12) | The pass-through rate for the Class X-B certificates for any distribution date will be aper annum rate equal to the excess, if any, of (a) the weighted average of the net mortgage interest rates on the mortgage loans for the related distribution date, over (b) the weighted average of the pass-through rates on the Class B and C regular interests for the related distribution date, weighted on the basis of their respective aggregate principal balances outstanding immediately prior to that distribution date. For purposes of the calculation of the weighted average of the net mortgage interest rates on the mortgage loans for each distribution date, the mortgage interest rates will be adjusted as necessary to a 30/360 basis. | ||
(13) | The Class PEX certificates will not have a pass-through rate but will be entitled to receive the sum of the interest distributable on the percentage interests of the Class A-S, B and C regular interests represented by the Class PEX certificates. | ||
(14) | Represents the maximum initial principal balance of the Class A-4FL certificates that will be issued on the closing date. The aggregate initial principal balance of the Class A-4, A-4FL and A-4FX certificates will be $396,065,000. The aggregate principal balance of the Class A-4FL and A-4FX certificates will at all times equal the principal balance of the Class A-4FX regular interest. The principal balance of the Class A-4FX certificates will initially be $0. The maximum initial principal balance of the Class A-4FX regular interest is $396,065,000. | ||
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(15) | The pass-through rate on the Class A-4FL certificates will be aper annum rate equal to LIBOR plus%;provided,however, that under certain circumstances, the pass-through rate on the Class A-4FL certificates may convert to the pass-through rate applicable to the Class A-4FX regular interest. The initial LIBOR rate will be determined two LIBOR Business Days prior to the Closing Date, and subsequent LIBOR rates for the Class A-4FL certificates will be determined two LIBOR Business Days before the start of the related interest accrual period. | ||
(16) | The Class V-1 certificates will not have a certificate principal balance, certificate notional amount, pass-through rate, rated final distribution date or rating. The Class V-1 certificates will only be entitled to distributions of excess interest accrued on the mortgage loan identified on Annex A-1 to this free writing prospectus as Walgreens – Milwaukee. See “Description of the Mortgage Pool—ARD Loans” in this free writing prospectus. | ||
(17) | The Class V-2 certificates will not have a certificate principal balance, certificate notional amount, pass-through rate, rated final distribution date or rating. The Class V-2 certificates will only be entitled to distributions of excess interest accrued on the mortgage loan identified on Annex A-1 to this free writing prospectus as Haggen Food & Pharmacy. See “Description of the Mortgage Pool—ARD Loans” in this free writing prospectus. | ||
(18) | The Class R certificates will not have a certificate principal balance, certificate notional amount, pass-through rate, rated final distribution date or rating. The Class R certificates represent the residual interest in each REMIC as further described in this free writing prospectus. The Class R certificates will not be entitled to distributions of principal or interest. | ||
The Class A-4FL, A-4FX, E, F, G, V-1, V-2 and R certificates are not offered by this free writing prospectus. Any information in this free writing prospectus concerning certificates other than the offered certificates is presented solely to enhance your understanding of the offered certificates. | ||
Transaction Overview | ||
On the closing date, each mortgage loan seller will sell its mortgage loans to the depositor, which will in turn deposit them into a common law trust created on the closing date. The trust, which will be the issuing entity, will be formed by a “pooling and servicing agreement”, to be dated as of June 1, 2015, among the depositor, the master servicers, the special servicers, the trust advisor, the certificate administrator, the tax administrator and the trustee. All the mortgage loans (other than any non-servicedpari passu mortgage loan described herein) will be serviced and administered under that agreement. Each master servicer will be required to provide, with respect to each of the mortgage loans that such master servicer is servicing pursuant to the pooling and servicing agreement, the information to the certificate administrator necessary for the certificate administrator to calculate distributions and other information regarding the certificates. You should refer to the accompanying prospectus, including the section captioned “Summary of Prospectus” for additional important information pertaining to the offered certificates. | ||
The transfers of the mortgage loans from the respective mortgage loan sellers to the depositor and from the depositor to the issuing entity in exchange for the certificates are illustrated below: | ||
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Relevant Parties | ||||
Title of Certificates | Wells Fargo Commercial Mortgage Trust 2015-C29, Commercial Mortgage Pass-Through Certificates, Series 2015-C29, which will be issued pursuant to the pooling and servicing agreement. | |||
Issuing Entity | Wells Fargo Commercial Mortgage Trust 2015-C29, a New York common law trust that we sometimes refer to as the “trust”, will issue the certificates. The assets in the trust will comprise the “trust fund”. See “Transaction Parties—The Issuing Entity” in this free writing prospectus. | |||
Depositor | Wells Fargo Commercial Mortgage Securities, Inc. is the depositor. As depositor, Wells Fargo Commercial Mortgage Securities, Inc. will acquire the mortgage loans from the mortgage loan sellers and deposit them into the trust fund. The depositor’s principal executive office is located at 301 South College Street, Charlotte, North Carolina 28288–0166 and its telephone number is (704) 374-6161. Neither we nor any of our affiliates have insured or guaranteed the offered certificates. See “Transaction Parties—The Depositor” and “—Affiliations and Certain Relationships Among Certain Transaction Parties” in this free writing prospectus and “The Depositor” in the accompanying prospectus. | |||
Sponsors, Mortgage Loan | ||||
Sellers and Originators | Wells Fargo Bank, National Association, a national banking association, Rialto Mortgage Finance, LLC, a Delaware limited liability company, Silverpeak Real Estate Finance LLC, a Delaware limited liability company, Walker & Dunlop Commercial Property Funding I WF, LLC, a Delaware limited liability company, and National Cooperative Bank, N.A., a national banking association, are the sponsors of this transaction. As sponsors, those entities have organized and initiated the transactions in which the certificates will be issued. As mortgage loan sellers, those entities will sell the mortgage loans to the depositor. Those entities and their affiliates originated or acquired the mortgage loans. See “Risk Factors—Risks Related to the Mortgage Loans—No Party is Obligated to Review the Mortgage Loans To Determine Whether Representations and Warranties Are True; Mortgage Loan Sellers or Other Responsible Parties May Not Be Able To Make a Required Repurchase or Substitution of a Defective Mortgage Loan”, “Transaction Parties—The Sponsors, Mortgage Loan Sellers and Originators” and “—Affiliations and Certain Relationships Among Certain Transaction Parties” in this free writing prospectus and “The Sponsor” in the accompanying prospectus. | |||
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The number and aggregate cut-off date principal balance of the mortgage loans that will be transferred to the depositor by the respective mortgage loan sellers are as follows: |
Originator | Mortgage Loan Seller | Number of Mortgage Loans | Number of Mortgaged Properties | Aggregate Cut-off Date Balance | % of Cut-off Date Pool Balance | |||||||||
Wells Fargo Bank, | Wells Fargo Bank, | |||||||||||||
National | National | |||||||||||||
Association | Association | 53 | 64 | $ | 578,987,789 | 49.2 | % | |||||||
Rialto Mortgage | Rialto Mortgage | |||||||||||||
Finance, LLC | Finance, LLC | 25 | 26 | 236,805,755 | 20.1 | |||||||||
Silverpeak Real | Silverpeak Real | |||||||||||||
Estate Finance | Estate Finance | |||||||||||||
LLC | LLC | 13 | 13 | 145,314,173 | 12.3 | |||||||||
Walker & Dunlop | Walker & Dunlop | |||||||||||||
Commercial | Commercial | |||||||||||||
Property Funding | Property Funding | |||||||||||||
I WF, LLC | I WF, LLC | 7 | 13 | 113,270,708 | 9.6 | |||||||||
National | National | |||||||||||||
Cooperative | Cooperative | |||||||||||||
Bank, N.A.(1) | Bank, N.A. | 35 | 35 | 102,646,698 | 8.7 | |||||||||
Total: | 133 | 151 | $ | 1,177,025,122 | 100.0 | % |
(1) | Twenty-three (23) of the thirty-five (35) mortgage loans for which National Cooperative Bank, N.A. is the mortgage loan seller were originated by its parent company, National Consumer Cooperative Bank, and transferred to National Cooperative Bank, N.A. |
Master Servicers | Wells Fargo Bank, National Association will act as the initial master servicer under the pooling and servicing agreement with respect to ninety-eight (98) of the mortgage loans, representing 91.3% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date. National Cooperative Bank, N.A. will act as the initial master servicer under the pooling and servicing agreement with respect to thirty-five (35) of the mortgage loans (namely, those mortgage loans that are expected to be sold to the depositor by National Cooperative Bank, N.A.), representing 8.7% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date. With respect to those mortgage loans for which it acts as master servicer, Wells Fargo Bank, National Association and National Cooperative Bank, N.A., will be primarily responsible for: | ||||
· | servicing and administering, directly or through sub-servicers (including primary servicers), the mortgage loans (other than any non-servicedpari passu mortgage loan) (a) as to which there is no default or reasonably foreseeable default that would give rise to a transfer of servicing to the applicable special servicer and (b) as to which any such default or reasonably foreseeable default has been corrected, including as part of a work-out; | ||||
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· | making servicing advances with respect to all mortgage loans (other than any non-servicedpari passu mortgage loan); and | ||||
· | making debt service advances with respect to all mortgage loans. | ||||
See also “Transaction Parties—The Master Servicers” and “—Affiliations and Certain Relationships Among Certain Transaction Parties” in this free writing prospectus. | |||||
Furthermore, thepari passu mortgage loans and relatedpari passu companion loans described under “The Trust Fund—Loan Combinations” below, together comprise loan combinations. See “Description of the Mortgage Pool—General” and “—Loan Combinations” in this free writing prospectus for more information on the loan combinations. | |||||
In addition, (i) the Brickyard Square loan combination will be serviced under, and for the compensation in, the pooling and servicing agreement entered into in connection with the WFCM 2015-C28 securitization (the “WFCM 2015-C28 pooling and servicing agreement”) by Wells Fargo Bank, National Association, as the master servicer under that pooling and servicing agreement (an “other master servicer” or the “WFCM 2015-C28 master servicer”) and (ii) the Bella Luna / San Lucas loan combination will be serviced under, and for the compensation in, the pooling and servicing agreement entered into in connection with the WFCM 2015-LC20 securitization (the “WFCM 2015-LC20 pooling and servicing agreement”) by Wells Fargo Bank, National Association, as the master servicer under that pooling and servicing agreement (an “other master servicer” or the “WFCM 2015-LC20 master servicer”). | |||||
See “Description of the Mortgage Pool—Loan Combinations”, “Servicing of the Mortgage Loans and Administration of the Trust Fund—Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations”, “Transaction Parties—The Master Servicers”, “—Affiliations and Certain Relationships Among Transaction Parties” and “Servicing of the Mortgage Loans and Administration of the Trust Fund—Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations” in this free writing prospectus. | |||||
Special Servicers | Midland Loan Services, a Division of PNC Bank, National Association, a national banking association, will act as the initial special servicer under the pooling and servicing agreement with respect to ninety-eight (98) of | ||||
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the mortgage loans, representing approximately 91.3% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date. National Cooperative Bank, N.A. will act as the initial special servicer under the pooling and servicing agreement with respect to thirty-five (35) of the mortgage loans (namely, those mortgage loans that are expected to be sold to the depositor by National Cooperative Bank, N.A. representing 8.7% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date. Midland Loan Services, a Division of PNC Bank, National Association, and National Cooperative Bank, N.A., in their respective capacities as special servicers, will be responsible for servicing each applicable mortgage loan (other than any non-servicedpari passu mortgage loan) following the occurrence of one or more specified events that cause that mortgage loan to become a specially serviced mortgage loan. Prior to any such event, with respect to non-specially serviced mortgage loans, Midland Loan Services, a Division of PNC Bank, National Association or National Cooperative Bank, N.A., as applicable, will be responsible for reviewing and evaluating certain borrower requests and the applicable master servicer’s written analysis with respect to specific servicing actions that require the consent of such special servicer. Midland Loan Services, a Division of PNC Bank, National Association was selected to be the special servicer with respect to ninety-eight (98) of the mortgage loans at the request of DoubleLine Capital LP or its affiliate, which (i) is anticipated to purchase the Class E, F and G certificates on the closing date and (ii) is expected to become the initial majority subordinate certificateholder and be appointed as the initial subordinate class representative. DoubleLine Capital LP or such affiliate also consented to the appointment of National Cooperative Bank, N.A. as special servicer with respect to the thirty-five (35) mortgage loans National Cooperative Bank, N.A. sold to the depositor, and may replace National Cooperative Bank, N.A. in such capacity pursuant to the terms of the pooling and servicing agreement. The principal servicing office of Midland Loan Services, a Division of PNC Bank, National Association, is located at 10851 Mastin Street, Building 82, Suite 300, Overland Park, Kansas 66210. | ||||
The Brickyard Square loan combination will be specially serviced (if necessary) under, and for the compensation in, the WFCM 2015-C28 pooling and servicing agreement by Midland Loan Services, a Division of PNC Bank, National Association, as the related special servicer under that pooling and servicing agreement (an “other special servicer” or the “WFCM 2015-C28 special servicer”). | ||||
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The Bella Luna / San Lucas loan combination will be specially serviced (if necessary) under, and for the compensation in, the WFCM 2015-LC20 pooling and servicing agreement by Rialto Capital Advisors, LLC, as the related special servicer under that pooling and servicing agreement (an “other special servicer” or the “WFCM 2015-LC20 special servicer”). | ||||
See “Description of the Mortgage Pool—Loan Combinations”, “Servicing of the Mortgage Loans and Administration of the Trust Fund”, “Transaction Parties—The Special Servicers”, “—Affiliations and Certain Relationships Among Transaction Parties” and “Servicing of the Mortgage Loans and Administration of the Trust Fund—Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations” in this free writing prospectus. | ||||
Certificate Administrator, | ||||
Tax Administrator, | ||||
Certificate Registrar | ||||
and Custodian | Wells Fargo Bank, National Association will act as certificate administrator, tax administrator, certificate registrar and custodian under the pooling and servicing agreement. The corporate trust offices of Wells Fargo Bank, National Association are located at 9062 Old Annapolis Road, Columbia, Maryland 21045, and for certificate transfer purposes are located at Sixth and Marquette Avenue, Minneapolis 55479-0113. The certificate administrator is required to make distributions of the available distribution amount on each distribution date to the certificateholders and to prepare reports detailing the distributions to certificateholders on each distribution date and the performance of the mortgage loans and mortgaged properties. See “Transaction Parties—The Certificate Administrator, Tax Administrator, Certificate Registrar and Custodian” and “—Affiliations and Certain Relationships Among Certain Transaction Parties” in this free writing prospectus. | |||
Trustee | Wilmington Trust, National Association, a national banking association, will act as trustee of the trust fund. The corporate trust offices of the trustee are located at 1100 North Market Street, Wilmington, Delaware 19890, Attention: WFCM 2015-C29. In its capacity as trustee, Wilmington Trust, National Association will be primarily responsible for back-up advancing if a master servicer fails to perform its advancing obligations and will become the holder of each mortgage loan upon its transfer to the trust fund. The trustee will also be the mortgagee of record and the trustee, or a custodian on its behalf, will hold the mortgage file with respect to each mortgage loan, in each case except as otherwise | |||
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described under “—Relevant Parties for the Loan Combinations” below with respect to the loan combinations. See “Description of the Mortgage Pool— Loan Combinations”, “Transaction Parties—The Trustee”, “—Affiliations and Certain Relationships Among Certain Transaction Parties” and “Servicing of the Mortgage Loans and Administration of the Trust Fund—Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations” in this free writing prospectus. | |||||
Underwriters | Wells Fargo Securities, LLC, Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. are the underwriters of the offered certificates. Wells Fargo Securities, LLC is acting as lead manager and bookrunner for this offering and is acting as sole bookrunning manager with respect to each class of offered certificates. Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. are acting as co-managers. | ||||
Trust Advisor | Trimont Real Estate Advisors, Inc., a Georgia corporation, will act as the initial trust advisor under the pooling and servicing agreement with respect to all of the mortgage loans (other than any non-servicedparipassu mortgage loan). | ||||
Some of the rights and duties of the trust advisor will be as follows: | |||||
· | The trust advisor will perform certain review duties on a platform-level basis that will generally include an annual review (in accordance with the requirements of the pooling and servicing agreement) of, and, if any mortgage loans in the mortgage pool were specially serviced by a special servicer in the preceding calendar year, the preparation of an annual report regarding, certain of that special servicer’s actions pursuant to the pooling and servicing agreement with respect to specially serviced mortgage loans. In the event multiple special servicers are required to service specially serviced mortgage loans during the preceding calendar year, the trust advisor will prepare a separate report regarding the actions of each special servicer that was acting as a special servicer as of December 31 in the preceding calendar year and is continuing in such capacity through the date of the applicable annual report. The review and report generally will be based on: (a) during a subordinate control period, each final asset status report delivered to the trust advisor by the applicable special servicer, (b) during a collective consultation period or senior consultation period, any asset status reports and additional information delivered to the |
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trust advisor by the applicable special servicer, (c) during a senior consultation period, in addition to the foregoing, a meeting with that special servicer to conduct a limited review of that special servicer’s operational practices on a platform-level basis in light of such special servicer’s obligations pursuant to the pooling and servicing agreement and the servicing standard, and (d) during any control or consultation period (as described in clauses (a) – (c) above), such other additional limited non-privileged information and documentation provided by that special servicer to the trust advisor that is required or permitted to be delivered to the trust advisor under the pooling and servicing agreement. Each special servicer will be entitled to review and provide comments on the applicable annual report before its finalization, but the content of any final annual report will nonetheless be determined solely by the trust advisor. | |||||
· | During any collective consultation period or senior consultation period, each special servicer will be required to consult with the trust advisor (in addition to the subordinate class representative, during a collective consultation period) in connection with certain material actions (regardless of whether such material actions are covered by an asset status report) for which it is the applicable special servicer. Under certain circumstances, but only during a senior consultation period, the trust advisor may recommend the replacement of a special servicer (other than the applicable special servicer with respect to any non-serviced loan combination), in which case the certificate administrator will deliver notice of such recommendation to the certificateholders, and certificateholders with specified percentages of the voting rights may direct the replacement of that special servicer at their expense. See “Transaction Parties—The Trust Advisor” and “Servicing of the Mortgage Loans and Administration of the Trust Fund—Asset Status Reports” and “—The Trust Advisor” in this free writing prospectus. | ||||
The trust advisor will be discharged from its duties under the pooling and servicing agreement when the aggregate certificate principal balance of the Class A-1, A-2, A-3, A-4, A-SB and D certificates and the Class A-4FX, A-S, B and C regular interests has been reduced to zero. See “Servicing of the Mortgage Loans and Administration of the Trust Fund—Termination, Discharge and Resignation of the Trust Advisor”. | |||||
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The obligations of the trust advisor under the pooling and servicing agreement are solely to provide analytical and reporting services. When we use the words “consult”, “recommend” or words of similar import in respect of the trust advisor and any servicing action or inaction, we are referring to the trust advisor’s analytical and reporting services, and not to a duty to make recommendations for or against any servicing action. Although the trust advisor must consider the servicing standard in its analysis, the trust advisor will not itself be bound by the servicing standard. The trust advisor will have no liability to any certificateholders, or any particular certificateholder, for actions taken or not taken under the pooling and servicing agreement. See “Servicing of the Mortgage Loans and Administration of the Trust Fund—The Trust Advisor” and “—Certain Matters Regarding the Master Servicers, the Special Servicers, the Trust Advisor and the Depositor” in this free writing prospectus. | ||||
In general, the trust advisor will have no duty to report to or respond to inquiries of the certificateholders. See “Description of the Offered Certificates—Reports to Certificateholders; Available Information” in this free writing prospectus. | ||||
The trust advisor will have certain rights to compensation (other than with respect to any non-servicedpari passu mortgage loan) and indemnification by the trust fund. See “Servicing of the Mortgage Loans and Administration of the Trust Fund—Servicing and Other Compensation and Payment of Expenses—Compensation of the Trust Advisor” and “—The Trust Advisor” in this free writing prospectus. | ||||
Notwithstanding any contrary provision described above, the trust advisor under the pooling and servicing agreement for this transaction will have no rights or duties in connection with the Brickyard Square mortgage loan or the Bella Luna / San Lucas mortgage loan. In that regard, each of the WFCM 2015-C28 pooling and servicing agreement and the WFCM 2015-LC20 pooling and servicing agreement provides for a trust advisor with rights and duties in connection with the servicing and administration of loans (including the Brickyard Square loan combination and the Bella Luna / San Lucas loan combination, respectively) under such pooling and servicing agreement that are substantially similar in all material respects (but not necessarily identical) to the rights and duties of the trust advisor under the pooling and servicing agreement for this transaction. | ||||
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Majority Subordinate Certificateholder | The majority subordinate certificateholder will be the holder(s) of a majority interest in (i) during a subordinate control period, the most subordinate class among the Class E, F and G certificates that has an aggregate principal balance, net of appraisal reduction amounts allocable thereto, that is at least equal to 25% of its total initial principal balance or (ii) during a collective consultation period, the most subordinate class among the Class E, F and G certificates that has an aggregate principal balance, without regard to appraisal reduction amounts, that is at least equal to 25% of its total initial principal balance. | |||
The majority subordinate certificateholder will have a continuing right to appoint, remove or replace the subordinate class representative in its sole discretion during certain periods of time. This right may be exercised at any time and from time to time. See “Servicing of the Mortgage Loans and Administration of the Trust Fund—The Majority Subordinate Certificateholder and the Subordinate Class Representative” in this free writing prospectus. During any subordinate control period, the majority subordinate certificateholder or the subordinate class representative on its behalf will have the right to terminate either special servicer with or without cause and appoint itself or an affiliate or another person as the successor special servicer with respect to the applicable mortgage loans (other than with respect to any excluded loan). It will be a condition to such appointment that (i) the hired rating agencies confirm that the appointment would not result in a qualification, downgrade or withdrawal of any of their then-current ratings of the certificates issued pursuant to the pooling and servicing agreement, (ii) any such successor satisfies the requirements of a qualified replacement special servicer as further described in “Servicing of the Mortgage Loans and Administration of the Trust Fund—Replacement of the Special Servicers” in this free writing prospectus and (iii) the successor special servicer delivers to the depositor any information regarding itself in its role as successor special servicer required in connection with a filing on Form 8-K in relation to such replacement. If the depositor fails to file any required notices on Form 8-K related to such replacement in a timely manner, such replacement will be voidab initio. It is anticipated that DoubleLine Capital LP or an affiliate (i) will purchase the Class E, F and G certificates on the closing date, and (ii) will become the initial majority subordinate certificateholder and be appointed as the initial subordinate class representative. See “Servicing of the Mortgage Loans and Administration of the Trust Fund— |
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The Majority Subordinate Certificateholder and the Subordinate Class Representative—The Majority Subordinate Certificateholder” in this free writing prospectus. | |||||
Notwithstanding anything to the contrary described herein, at any time when the holder of a majority interest in the Class E certificates is the majority subordinate certificateholder, the majority subordinate certificateholder may waive its right to appoint a subordinate class representative and to exercise any of the rights of the majority subordinate certificateholder or cause the exercise of any of the rights of the subordinate class representative set forth in the pooling and servicing agreement, by irrevocable written notice delivered to the depositor, trustee, certificate administrator, master servicers, special servicers and trust advisor. Any such waiver will remain effective with respect to such holder and such class until such time as the majority subordinate certificateholder has sold or transferred a majority of the Class E certificates to an unaffiliated third party or third parties. Following any such transfer the successor majority subordinate certificateholder will again have the rights of the majority subordinate certificateholder as described herein without regard to any prior waiver by the predecessor majority subordinate certificateholder. The successor majority subordinate certificateholder will also have the right to irrevocably waive its right to appoint a subordinate class representative and to exercise any of the rights of the majority subordinate certificateholder or cause the exercise of any of the rights of the subordinate class representative. No successor majority subordinate certificateholder described above will have any consent rights with respect to any mortgage loan that became a specially serviced mortgage loan prior to its acquisition of a majority of the Class E certificates that had not also become a corrected mortgage loan prior to such acquisition until such mortgage loan becomes a corrected mortgage loan. | |||||
Whenever such an “opt-out” by a majority subordinate certificateholder is in effect: | |||||
· | a senior consultation period will be in effect; and | ||||
· | the rights of the majority subordinate certificateholder to appoint a subordinate class representative and the rights of the subordinate class representative will not be operative (notwithstanding that a subordinate control period or collective consultation period is or would otherwise then be in effect). | ||||
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Notwithstanding any contrary provision described above, the majority subordinate certificateholder will have no rights in connection with the Brickyard Square mortgage loan or Bella Luna / San Lucas mortgage loan, other than (i) certain limited consultation rights with respect to actions of the applicable special servicer as set forth in the related intercreditor agreement and described in this free writing prospectus and (ii) the right to direct the termination of the other special servicer with respect to the related loan combination if a servicer termination event (as defined under the related other pooling and servicing agreement) on the part of the other special servicer occurs that affects this securitization. The related intercreditor agreement and/or the WFCM 2015-C28 pooling and servicing agreement or the WFCM 2015-LC20 pooling and servicing agreement, as applicable, grant substantially similar (but not necessarily identical) rights, in all material respects, to those granted to the majority subordinate certificateholder under the pooling and servicing agreement for this transaction to the majority holders of a designated controlling class of WFCM 2015-C28 certificates or their representative or WFCM 2015-LC20 certificates or their representative, as applicable, subject to any limitations imposed by the WFCM 2015-C28 pooling and servicing agreement or the WFCM 2015-LC20 pooling and servicing agreement, as applicable, or the related intercreditor agreement. | ||||
Subordinate Class Representative | The majority subordinate certificateholder will be entitled to appoint, remove and replace a subordinate class representative in its sole discretion to the extent described in this free writing prospectus. Subject to certain limitations described herein, this right may be exercised at any time and from time to time. If at any time the majority subordinate certificateholder has not appointed a subordinate class representative (unless the majority subordinate class representative has expressly waived its right to act as or appoint a subordinate class representative and to exercise any of the rights of the majority subordinate certificateholder), then the majority subordinate certificateholder will be deemed to be the subordinate class representative. See “Servicing of the Mortgage Loans and Administration of the Trust Fund—The Majority Subordinate Certificateholder and the Subordinate Class Representative—The Majority Subordinate Certificateholder” in this free writing prospectus. | |||
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The subordinate class representative generally will be— | |||||
· | during a subordinate control period, entitled to direct each of the special servicers with respect to various special servicing matters as to the mortgage loans it services, and replace either special servicer with or without cause; and | ||||
· | during a collective consultation period, entitled (in addition to the trust advisor) to consult with each of the special servicers regarding various special servicing matters as to the mortgage loans it services; | ||||
provided,however, that such rights of the subordinate class representative will not apply with respect to any excluded loan. | |||||
An “excluded loan” is a mortgage loan or loan combination with respect to which the majority subordinate certificateholder or the subordinate class representative is the related borrower, the manager of the related mortgaged property, an affiliate of the borrower or manager of the related mortgaged property, or an agent, principal, partner, member, joint venturer, limited partner, employee, representative, director, trustee, advisor or investor in or of an affiliate of the related borrower. | |||||
During a senior consultation period, no subordinate class representative will be recognized or have any rights to replace a special servicer or approve, direct or consult with respect to servicing matters. | |||||
Subordinate control period, collective consultation period and senior consultation period are described under “—Significant Dates and Periods” below. | |||||
The subordinate class representative generally will have no duty to holders of certificates other than holders of the Class E, F and G certificates. See “Servicing of the Mortgage Loans and Administration of the Trust Fund—The Majority Subordinate Certificateholder and the Subordinate Class Representative—No Liability to the Trust Fund and Certificateholders”. | |||||
With respect to the mortgage loans secured by the mortgaged properties identified on Annex A-1 to this free writing prospectus as Brickyard Square and Bella Luna / San Lucas, each of which also secures one relatedpari passu companion loan, the subordinate class representative’s consent and/or consultation rights with respect thereto will be subject to the consultation rights of the holders of the relatedpari passu companion loan, | |||||
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as provided for in the related intercreditor agreement and as described in this free writing prospectus. See “Description of the Mortgage Pool—Loan Combinations—The Brickyard Square Loan Combination” and “—The Bella Luna / San Lucas Loan Combination”. | ||||
Notwithstanding any contrary provision described above, the subordinate class representative will have no rights in connection with the Brickyard Square mortgage loan or the Bella Luna / San Lucas mortgage loan, other than (i) certain limited consultation rights with respect to actions of the applicable special servicer, as set forth in the related intercreditor agreement and described in this free writing prospectus and (ii) the right to direct the termination of the other special servicer with respect to the related loan combination if a servicer termination event (as described under the related other pooling and servicing agreement) on the part of the other special servicer occurs that affects this securitization. The related intercreditor agreement and/or the WFCM 2015-C28 pooling and servicing agreement or the WFCM 2015-LC20 pooling and servicing agreement, as applicable, grant rights substantially similar in all material respects (but not necessarily identical) to those granted to the subordinate class representative under the pooling and servicing agreement for this transaction, to the holders of a designated class or group of certificates issued in connection with, or other party associated with, that other securitization or the representative of those holders or that other party, as the case may be. | ||||
The subordinate class representative’s consent and/or consultation rights in respect of the sale of a loan combination will not apply to the extent that such loan combination is an excluded loan. | ||||
See “—Relevant Parties for the Loan Combinations” below. | ||||
Relevant Parties for the Loan Combinations | The mortgaged properties identified on Annex A-1 to this free writing prospectus as Brickyard Square and Bella Luna / San Lucas each secure both a mortgage loan and one relatedpari passu companion loan. Each of those mortgage loans and the relatedpari passu companion loan are collectively referred to as a “loan combination”. The Brickyard Square mortgage loan and the Bella Luna / San Lucas mortgage loan are each sometimes referred to as a “pari passu mortgage loan”. | |||
On the other hand, each of the Brickyard Square loan combination and the Bella Luna / San Lucas loan |
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combination is sometimes referred to herein as a “non-serviced loan combination”. Each of the Brickyard Square mortgage loan and the Bella Luna / San Lucas mortgage loan and its respective related companion loan are sometimes referred to herein as a “non-servicedpari passu mortgage loan” and a “non-servicedpari passu companion loan”, respectively. The Brickyard Squarepari passu companion loan has been included in the WFCM 2015-C28 securitization. The Bella Luna / San Lucaspari passu companion loan has been included in the WFCM 2015-LC20 securitization. | |||||
The Brickyard Square loan combination is serviced under the WFCM 2015-C28 pooling and servicing agreement, subject to the related intercreditor agreement, as follows: | |||||
· | The WFCM 2015-C28 master servicer will be primarily responsible for the primary servicing and administering, directly or through sub-servicers, of the Brickyard Square loan combination when such loan combination is not a specially serviced mortgage loan and for making servicing advances with respect to such loan combination. The applicable master servicer under the pooling and servicing agreement for this transaction will be primarily responsible for making debt service advances with respect to the related mortgage loan for the indirect benefit of the certificateholders under the pooling and servicing agreement for this transaction. The WFCM 2015-C28 master servicer will be primarily responsible for making debt service advances with respect to the relatedpari passu companion loan for the indirect benefit of the certificateholders under the WFCM 2015-C28 securitization. | ||||
· | The WFCM 2015-C28 special servicer will be responsible for servicing the Brickyard Square loan combination following the occurrence of one or more specified events that cause such loan combination to become a specially serviced mortgage loan. | ||||
· | The trustee of the WFCM 2015-C28 securitization, which is Wilmington Trust, National Association, will be primarily responsible for back-up advancing if the WFCM 2015-C28 master servicer fails to perform its obligations to make servicing advances with respect to the Brickyard Square loan combination and is the mortgagee of record with respect to such loan combination. | ||||
· | The WFCM 2015-C28 pooling and servicing agreement provides for a trust advisor with rights |
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and duties in connection with the servicing and administration of loans (including each related loan combination) under that agreement that are similar, but not necessarily identical, to the rights and duties of the trust advisor under the pooling and servicing agreement for this transaction. | |||||
· | The WFCM 2015-C28 pooling and servicing agreement grants to a designated majority subordinate certificateholder and a designated subordinate class representative various rights in connection with the servicing and administration of loans (including the Brickyard Square loan combination) under that agreement that are similar, but not identical, to those granted to the majority subordinate certificateholder and/or subordinate class representative, as applicable, under the pooling and servicing agreement for this transaction. | ||||
· | The custodian under the WFCM 2015-C28 pooling and servicing agreement will maintain custody of the mortgage loan documents for the related loan combination serviced thereunder (other than the related promissory note(s) evidencing the related mortgage loan, which will be delivered by the related mortgage loan seller to the custodian under the pooling and servicing agreement for this transaction). | ||||
The Bella Luna / San Lucas loan combination is serviced under the WFCM 2015-LC20 pooling and servicing agreement, subject to the related intercreditor agreement, as follows: | |||||
· | The WFCM 2015-LC20 master servicer will be primarily responsible for the primary servicing and administering, directly or through sub-servicers, of the Bella Luna / San Lucas loan combination when such loan combination is not a specially serviced mortgage loan and for making servicing advances with respect to such loan combination. The applicable master servicer under the pooling and servicing agreement for this transaction will be primarily responsible for making debt service advances with respect to the related mortgage loan for the indirect benefit of the certificateholders under the pooling and servicing agreement for this transaction. The WFCM 2015-LC20 master servicer will be primarily responsible for making debt service advances with respect to the relatedpari passu companion loan for the indirect benefit of the certificateholders under the WFCM 2015-LC20 securitization. | ||||
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· | The WFCM 2015-LC20 special servicer will be responsible for servicing the Bella Luna / San Lucas loan combination following the occurrence of one or more specified events that cause such loan combination to become a specially serviced mortgage loan. | ||||
· | The trustee of the WFCM 2015-LC20 securitization, which is Wilmington Trust, National Association, will be primarily responsible for back-up advancing if the WFCM 2015-LC20 master servicer fails to perform its obligations to make servicing advances with respect to the Bella Luna / San Lucas loan combination and is the mortgagee of record with respect to such loan combination. | ||||
· | The WFCM 2015-LC20 pooling and servicing agreement provides for a trust advisor with rights and duties in connection with the servicing and administration of loans (including each related loan combination) under that agreement that are similar, but not necessarily identical, to the rights and duties of the trust advisor under the pooling and servicing agreement for this transaction. | ||||
· | The WFCM 2015-LC20 pooling and servicing agreement grants to a designated majority subordinate certificateholder and a designated subordinate class representative various rights in connection with the servicing and administration of loans (including the Bella Luna / San Lucas loan combination) under that agreement that are similar, but not identical, to those granted to the majority subordinate certificateholder and/or subordinate class representative, as applicable, under the pooling and servicing agreement for this transaction. | ||||
· | The custodian under the WFCM 2015-LC20 pooling and servicing agreement will maintain custody of the mortgage loan documents for the related loan combination serviced thereunder (other than the related promissory note(s) evidencing the related mortgage loan, which will be delivered by the related mortgage loan seller to the custodian under the pooling and servicing agreement for this transaction). | ||||
See “Risk Factors—Other Risks—Loan Combinations May Adversely Affect Net Cash Flow to Sponsors, Which May Reduce Sponsors’ Commitment to Effective Management of the Mortgaged Properties”, “Description of the Mortgage Pool—Loan Combinations”, “Transaction Parties—Affiliations and Certain Relationships Among Certain Transaction Parties”, “Servicing of the Mortgage |
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Loans and Administration of the Trust Fund—The Majority Subordinate Certificateholder and the Subordinate Class Representative” in this free writing prospectus. | ||||
Affiliations and Certain Relationships Among Certain Transaction | ||||
Parties | Wells Fargo Bank, National Association, a sponsor, originator and mortgage loan seller, is also a master servicer, the swap counterparty, the certificate administrator, the tax administrator, the certificate registrar and the custodian under this securitization, and is an affiliate of Wells Fargo Commercial Mortgage Securities, Inc., the depositor, and of Wells Fargo Securities, LLC, one of the underwriters. In addition, Wells Fargo Bank, National Association is the master servicer, the certificate administrator, the custodian, the tax administrator and the certificate registrar under the WFCM 2015-C28 pooling and servicing agreement, which governs the servicing of the Brickyard Square mortgage loan; and Wells Fargo Bank, National Association is the master servicer, the certificate administrator, the custodian, the tax administrator and the certificate registrar under the WFCM 2015-LC20 pooling and servicing agreement, which governs the servicing of the Bella Luna / San Lucas mortgage loan. See “Description of the Mortgage Pool—Loan Combinations” in this free writing prospectus. | |||
Wells Fargo Bank, National Association is the purchaser under repurchase agreements with each of Rialto Mortgage Finance, LLC and Walker & Dunlop Commercial Property Funding I WF, LLC, respectively, or, in any such case, with a wholly-owned subsidiary or other affiliate of the subject mortgage loan seller, for the purpose of providing short-term warehousing of mortgage loans originated or acquired by Rialto Mortgage Finance, LLC and Walker & Dunlop Commercial Property Funding I WF, LLC, as applicable. Some or all of the respective mortgage loans that Rialto Mortgage Finance, LLC and Walker & Dunlop Commercial Property Funding I WF, LLC will transfer to the depositor are (or, as of the closing date for this securitization, are expected to be) subject to the repurchase facility such mortgage loan seller or its wholly-owned subsidiary or other affiliate has with Wells Fargo Bank, National Association, and proceeds received by Rialto Mortgage Finance, LLC and Walker & Dunlop Commercial Property Funding I WF, LLC, respectively, in connection with the transfer of the related mortgage loans to the depositor will be used, among other things, to reacquire all such warehoused mortgage loans, directly or indirectly through a | ||||
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wholly-owned subsidiary or other applicable affiliate, from Wells Fargo Bank, National Association in accordance with the terms of the related repurchase agreement, free and clear of any liens. | ||||
In addition, Wells Fargo Bank, National Association and Deutsche Bank AG, Cayman Islands Branch (an affiliate of Deutsche Bank Securities Inc., an underwriter) are each purchasers under separate repurchase agreements with Silverpeak Real Estate Finance LLC or with a wholly-owned subsidiary or other affiliate of the subject mortgage loan seller, for the purpose of providing short-term warehousing of mortgage loans originated or acquired by Silverpeak Real Estate Finance LLC. Some or all of the respective mortgage loans that Silverpeak Real Estate Finance LLC will transfer to the depositor are (or, as of the closing date for this securitization, are expected to be) subject to the repurchase facilities such mortgage loan seller or its wholly-owned subsidiary or other affiliate has with Wells Fargo Bank, National Association and Deutsche Bank AG, Cayman Islands Branch, and proceeds received by Silverpeak Real Estate Finance LLC in connection with the transfer of the related mortgage loans to the depositor will be used, among other things, to reacquire all such warehoused mortgage loans, directly or indirectly through a wholly-owned subsidiary or other applicable affiliate, from Wells Fargo Bank, National Association and Deutsche Bank AG, Cayman Islands Branch in accordance with the terms of the related repurchase agreement, free and clear of any liens. | ||||
Additionally, each of Walker & Dunlop Commercial Property Funding I WF, LLC and National Cooperative Bank, N.A., respectively, or, in certain cases, a wholly-owned subsidiary or other affiliate of the subject mortgage loan seller, is a party to an interest rate hedging arrangement with Wells Fargo Bank, National Association with respect to all of the mortgage loans that Walker & Dunlop Commercial Property Funding I WF, LLC will transfer to the depositor and with respect to certain of the mortgage loans that National Cooperative Bank, N.A. will transfer to the depositor. Those hedging arrangements will terminate in connection with the transfer of those mortgage loans pursuant to this securitization transaction. | ||||
Wells Fargo Bank, National Association is the interim custodian of the loan files for all of the mortgage loans that Rialto Mortgage Finance, LLC, LLC and Walker & Dunlop Commercial Property Funding I WF, LLC will transfer to the depositor. | ||||
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Pursuant to certain interim servicing agreements between Wells Fargo Bank, National Association and Rialto Mortgage Finance, LLC, each a sponsor, originator and mortgage loan seller, or certain affiliates of Rialto Mortgage Finance, LLC, Wells Fargo Bank, National Association acts as primary servicer with respect to certain mortgage loans owned by Rialto Mortgage Finance, LLC or such affiliates (subject, in some cases, to the repurchase facility described above in this section) from time to time, including, prior to their inclusion in the trust fund, some or all of the mortgage loans that Rialto Mortgage Finance, LLC will transfer to the depositor. | ||||
Rialto Mortgage Finance, LLC, a sponsor, mortgage loan seller and originator, is an affiliate of Rialto Capital Advisors, LLC, the special servicer under the WFCM 2015-LC20 pooling and servicing agreement, which governs the servicing of the Bella Luna / San Lucas loan combination. Rialto Mortgage Finance, LLC and Rialto Capital Advisors, LLC are also affiliates of the entity that is the initial majority subordinate certificateholder under the WFCM 2015-LC20 pooling and servicing agreement, and which was appointed as the initial subordinate class representative under the WFCM 2015-LC20 pooling and servicing agreement. | ||||
Pursuant to certain interim servicing agreements between Wells Fargo Bank, National Association and Silverpeak Real Estate Finance LLC, each a sponsor, originator and mortgage loan seller, or certain affiliates of Silverpeak Real Estate Finance LLC, Wells Fargo Bank, National Association acts as primary servicer with respect to certain mortgage loans owned by Silverpeak Real Estate Finance LLC or such affiliates of Silverpeak Real Estate Finance LLC (subject, in some cases, to the repurchase facilities described above) from time to time, including, prior to their inclusion in the trust fund, some or all of the mortgage loans to be transferred by Silverpeak Real Estate Finance LLC to the depositor. | ||||
Wells Fargo Bank, National Association, a master servicer, is expected to enter into a sub-servicing agreement with an affiliate of Walker & Dunlop Commercial Property Funding I WF, LLC pursuant to which such affiliate will be required to perform certain limited subservicing duties with respect to the mortgage loans that Walker & Dunlop Commercial Property Funding I WF, LLC will transfer to the depositor. | ||||
National Cooperative Bank, N.A., a sponsor, is one of the mortgage loan sellers, one of the master servicers and one of the special servicers. Wells Fargo Bank, National Association is the purchaser under a repurchase |
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agreement with a wholly-owned subsidiary of National Cooperative Bank, N.A. for the purpose of providing short-term warehousing of mortgage loans originated or acquired by National Cooperative Bank, N.A. None of the mortgage loans that National Cooperative Bank, N.A. will transfer to the depositor are subject to this repurchase agreement. Certain of the mortgage loans that National Cooperative Bank, N.A. will transfer to the depositor are subject to an interest rate hedging arrangement with Wells Fargo Bank, National Association. This interest rate hedging arrangement will terminate in connection with the transfer of those mortgage loans pursuant to this securitization transaction. | ||||
In addition, with respect to certain mortgage loans, the related mortgage loan seller, an affiliate thereof or another participant in this securitization holds a mezzanine or other similar loan secured by direct or indirect equity interests in the related mortgage borrower. See “Description of the Mortgage Pool—Subordinate and/or Other Financing”, “Transaction Parties—Affiliations and Certain Relationships Among Certain Transaction Parties” in this free writing prospectus. | ||||
In addition, pursuant to an interim servicing agreement between an affiliate of Walker & Dunlop Commercial Property I WF, LLC, on the one hand, and Midland Loan Services, a Division of PNC Bank, National Association, on the other hand, Midland Loan Services, a Division of PNC Bank, National Association acts as interim servicer with respect to certain mortgage loans, including, prior to their inclusion in the trust, certain of the mortgage loans to be contributed to this securitization by Walker & Dunlop Commercial Property I WF, LLC. | ||||
In addition, with respect to certain mortgage loans secured by residential cooperative properties, National Cooperative Bank, N.A. or an affiliate thereof may, now or in the future, hold one or more (1) loans to the related mortgage borrower that are secured, on a subordinated basis, by a mortgage lien upon a mortgaged property that also secures a mortgage loan included in the trust, (2) unsecured loans to the related mortgage borrower and/or (3) cooperative unit loans that are secured by direct equity interests in the related mortgage borrower. See “Description of the Mortgage Pool—Subordinate and/or Other Financing”, “—Additional Debt Financing for Mortgage Loans Secured by Residential Cooperatives” and “Transaction Parties—Affiliations and Certain Relationships Among Certain Transaction Parties” in this free writing prospectus. | ||||
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Wilmington Trust, National Association, the trustee under this securitization, is also the trustee under the WFCM 2015-C28 pooling and servicing agreement and the WFCM 2015-LC20 pooling and servicing agreement which govern the servicing of the Brickyard Square loan combination and the Bella Luna / San Lucas loan combination, respectively. | ||||
Trimont Real Estate Advisors, Inc., the trust advisor under this securitization, is also the trust advisor under the WFCM 2015-LC20 pooling and servicing agreement, which governs the servicing of the Bella Luna / San Lucas loan combination. | ||||
Midland Loan Services, a Division of PNC Bank, National Association, a special servicer under this securitization, is also the special servicer under the WFCM 2015-C28 pooling and servicing agreement, which governs the servicing of the Brickyard Square loan combination. | ||||
DoubleLine Capital LP, or an affiliate, engaged Midland Loan Services, a Division of PNC Bank, National Association, as an independent contractor to conduct due diligence with respect to the mortgage loans. | ||||
The roles and relationships described above may give rise to conflicts of interest. See “Risk Factors—Risks Related to the Offered Certificates—Various Other Securitization-Level Conflicts of Interest May Have an Adverse Effect on Your Offered Certificates”, “—Potential Conflicts of Interest of the Underwriters and Their Affiliates”, “—Potential Conflicts of Interest of the Subordinate Class Representative” and “—Potential Conflicts of Interest in the Selection of the Mortgage Loans” and “Transaction Parties—The Sponsors, Mortgage Loan Sellers and Originators” and “—Affiliations and Certain Relationships Among Certain Transaction Parties” in this free writing prospectus and see “The Depositor” and “The Sponsor” in the accompanying free writing prospectus. | ||||
Significant Dates and Periods | ||||
Cut-off Date | The mortgage loans will be considered part of the trust fund as of their respective cut-off dates. The cut-off date with respect to each mortgage loan is the due date for the monthly debt service payment that is due in June 2015 (or, in the case of any mortgage loan that has its first due date in July 2015, the date that would have been its due date in June 2015 under the terms of that mortgage loan if a monthly debt service payment were scheduled to be due in that month). |
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Closing Date | The date of initial issuance for the certificates will be on or about June 26, 2015. | ||||
Determination Date | The determination date will be the 11th day of each month, or, if that day is not a business day, the next succeeding business day, commencing in July 2015. The close of business on the determination date is the monthly cut-off date for information regarding the mortgage loans that must be reported to the holders of the certificates on the distribution date in that month. | ||||
Distribution Date | Distributions on the certificates are scheduled to occur monthly on the fourth business day following the related determination date, commencing in July 2015. The first distribution date is anticipated to be July 17, 2015. | ||||
Record Date | The record date for each monthly distribution on the certificates will be the last business day of the prior calendar month, except as may otherwise be described in this free writing prospectus with respect to final distributions. | ||||
Business Day | Under the pooling and servicing agreement, a business day will be any day other than a Saturday, a Sunday or a day on which banking institutions in California, Delaware, Georgia, Maryland, Minnesota, New York, North Carolina, Pennsylvania, Texas or any of the jurisdictions in which the respective primary servicing offices of either master servicer or either special servicer or the corporate trust offices of the certificate administrator or the trustee are located, or the New York Stock Exchange or the Federal Reserve System of the United States of America, are authorized or obligated by law or executive order to remain closed. | ||||
Collection Period | Amounts available for distribution on the certificates on any distribution date will depend in part on the payments and other collections received on or with respect to the mortgage loans during the related collection period, and any advances of payments due (without regard to grace periods) during that collection period. In general, each collection period— | ||||
· | will relate to a particular distribution date, | ||||
· | will be approximately one calendar month long, | ||||
· | will begin when the prior collection period ends or, in the case of the first collection period, will begin as of the respective cut-off dates for the mortgage loans, and | ||||
· | will end at the close of business on the determination date immediately preceding the related distribution |
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date (or, in the case of any non-servicedpari passu mortgage loan and solely for the purpose of determining the amount available for distribution on the certificates for any distribution date, one business day after such determination date). | ||||||||
Interest Accrual Period | The interest accrual period for each class of offered certificates for each distribution date will be the calendar month immediately preceding the month in which that distribution date occurs. Interest on the offered certificates will be calculated assuming that each month has 30 days and each year has 360 days. | |||||||
Assumed Final | ||||||||
Distribution Dates | Set forth in the table below is the month and year of the distribution date on which each class of offered certificates is expected to be paid in full, based upon structuring assumptions which include, without limitation, assuming 0% CPR and no delinquencies, losses, modifications, extensions of maturity dates, repurchases, sales or prepayments of the mortgage loans after the cut-off date, except that each mortgage loan with an anticipated repayment date is assumed to repay in full on its respective anticipated repayment date. See the definition of structuring assumptions in Annex B to this free writing prospectus. The actual final distribution date for each class of offered certificates may be earlier or later (and could be substantially earlier or later) than the assumed final distribution date for that class. | |||||||
Assumed Final Distribution | ||||||||
Class | Date* | |||||||
Class A-1 | December 2019 | |||||||
Class A-2 | May 2020 | |||||||
Class A-3 | May 2025 | |||||||
Class A-4 | June 2025 | |||||||
Class A-SB | January 2025 | |||||||
Class A-S | June 2025 | |||||||
Class X-A | NAP | |||||||
Class X-B | NAP | |||||||
Class B | June 2025 | |||||||
Class C | June 2025 | |||||||
Class PEX | June 2025 | |||||||
Class D | June 2025 | |||||||
* | Calculated based on a 0% CPR and the “structuring assumptions” described in Annex B to this free writing prospectus. | |||||||
Rated Final | ||||||||
Distribution Date | As to each class of offered certificates, the distribution date in June 2048. See “Ratings” in this free writing prospectus. | |||||||
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Control and Consultation Periods | The rights of various parties to replace either special servicer, and approve or consult with respect to certain material actions of either special servicer, will vary according to defined periods and other provisions, as summarized below. See “Servicing of the Mortgage Loans and Administration of the Trust Fund—The Majority Subordinate Certificateholder and the Subordinate Class Representative” in this free writing prospectus. | ||||
· | Subordinate Control Period. Unless a senior consultation period is deemed to occur and is continuing pursuant to clause (ii) in the second succeeding bullet, a “subordinate control period” will exist when the Class E certificates have an aggregate principal balance, net of any appraisal reduction amounts notionally allocated in reduction of the principal balance of that class, that is notless than 25% of its initial principal balance. In general, during a subordinate control period (other than with respect to any excluded loan), (i) the subordinate class representative will be entitled to grant or withhold approval of asset status reports prepared, and material servicing actions proposed, by either special servicer, and (ii) the subordinate class representative will be entitled to terminate and replace either special servicer with or without cause. The trust advisor will not have approval rights and generally will have no right to consult with respect to actions of either special servicer during a subordinate control period. | ||||
· | Collective Consultation Period. Unless a senior consultation period is deemed to occur and is continuing pursuant to clause (ii) in the succeeding bullet, a “collective consultation period” will exist when the Class E certificates have an aggregate principal balance that both (i) as notionally reduced by any appraisal reduction amounts allocable to that class, isless than 25% of its initial principal balance and (ii) without regard to any appraisal reduction amounts allocable to that class, is 25% or more of its initial principal balance. In general, during a collective consultation period, each special servicer will be required to consult with each of the subordinate class representative and the trust advisor (other than with respect to any excluded loan (in the case of the subordinate class representative only)) in connection with asset status reports and material actions with respect to the mortgage loans for which it is the applicable special servicer. The subordinate class representative will | ||||
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have no right to terminate and replace either special servicer during a collective consultation period. | |||||
· | Senior Consultation Period. A “senior consultation period” will exist when either (i) the Class E certificates have an aggregate principal balance, without regard to any appraisal reduction amounts allocable to that class, that isless than 25% of its initial principal balance or (ii) during such time as the Class E certificates are the most subordinate class of control-eligible certificates that have a then-outstanding principal balance, net of appraisal reduction amounts, at least equal to 25% of its initial principal balance, the then-majority subordinate certificateholder has irrevocably waived its right to appoint a subordinate class representative and to exercise any of the rights of the majority subordinate certificateholder or cause the exercise of the rights of the subordinate class representative and such rights have not been reinstated to a successor majority subordinate certificateholder as set forth in the pooling and servicing agreement. See “Servicing of the Mortgage Loans and Administration of the Trust Fund—The Majority Subordinate Certificateholder and the Subordinate Class Representative” in this free writing prospectus. In general, during a senior consultation period, each special servicer will be required to consult with the trust advisor in connection with asset status reports and material actions with respect to the mortgage loans for which it is the applicable special servicer. During any senior consultation period, no subordinate class representative will be recognized or have any right to replace either special servicer or approve or be consulted with respect to “asset status reports” or material actions with respect to the mortgage loans for which it is the applicable special servicer. | ||||
In addition, (i) during any collective consultation period or senior consultation period, either special servicer may (other than with respect to the Brickyard Square mortgage loan or the Bella Luna / San Lucas mortgage loan) be terminated and replaced without cause upon the affirmative direction of certificate owners holding notless than 75% of the appraisal-reduced voting rights of all certificates, following a proposal from certificate owners holding notless than 25% of the appraisal-reduced voting rights of all certificates, and (ii) during any senior consultation period, either special servicer may be terminated and replaced without cause upon the affirmative direction of certificate owners holding not less than a majority of the appraisal-reduced voting rights of all principal balance certificates, | |||||
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following the recommendation of termination from the trust advisor if it believes that such special servicer is not performing its duties under the pooling and servicing agreement in accordance with the servicing standard. | |||||
Notwithstanding any contrary provision described above: | |||||
· | The existence of a subordinate control period, collective consultation period or senior consultation period under the pooling and servicing agreement for this transaction will not limit the control and consultation rights of the holder of the Brickyard Squarepari passu companion loan or the Bella Luna / San Lucaspari passu companion loan as described in this free writing prospectus. | ||||
· | The trust advisor under the pooling and servicing agreement will have no right or duty to consult with respect to any matter with respect to the Brickyard Square loan combination or Bella Luna / San Lucas loan combination. | ||||
· | The WFCM 2015-C28 pooling and servicing agreement and the WFCM 2015-LC20 pooling and servicing agreement each set forth time periods and corresponding relative rights of the related subordinate class representative, majority subordinate certificateholder, trust advisor and certificateholders in connection with the servicing and administration of loans serviced under such pooling and servicing agreement that are substantially similar in all material respects (but not necessarily identical) to the time periods and corresponding relative rights of the subordinate class representative, majority subordinate certificateholder, trust advisor and certificateholders under the pooling and servicing agreement for this transaction, as generally described in this free writing prospectus (including, without limitation, with respect to the WFCM 2015-C28 pooling and servicing agreement, the Brickyard Square loan combination and, with respect to the WFCM 2015-LC20 pooling and servicing agreement, the Bella Luna / San Lucas loan combination). The relevant time periods under the pooling and servicing agreement for this transaction are, and the relevant time periods under the WFCM 2015-C28 pooling and servicing agreement and the WFCM 2015-LC20 pooling and servicing agreement are, defined by reference to the loans held (whether or not serviced) by the trust fund established and the securities issued under such pooling and servicing agreement. The existence or absence of a subordinate control period, collective consultation period or senior consultation period |
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under one pooling and servicing agreement will not by itself affect the existence or absence of a subordinate control period, collective consultation period or senior consultation period under another pooling and servicing agreement. | |||||
See “Servicing of the Mortgage Loans and Administration of the Trust Fund” and “Description of the Mortgage Pool—Loan Combinations” in this free writing prospectus. | |||||
The Trust Fund | |||||
Creation of the Trust Fund | We will use the net proceeds from the issuance and sale of the certificates as the consideration to purchase the mortgage loans that will back those certificates from the mortgage loan sellers. Promptly upon acquisition, we will transfer those mortgage loans to the trust fund in exchange for the certificates. | ||||
A. General Considerations | When reviewing the information that we have included in this free writing prospectus with respect to the mortgage loans, please note that— | ||||
· | All numerical information provided with respect to any individual mortgage loans, group of mortgage loans or the mortgage loans as a whole is provided on an approximate basis. | ||||
· | All weighted average information provided with respect to the mortgage loans or any sub-group of mortgage loans reflects a weighting based on their respective cut-off date principal balances. We will transfer the principal balance as of the cut-off date for each of the mortgage loans to the trust fund. | ||||
· | In presenting the principal balances of the mortgage loans as of the cut-off date, we have assumed that all scheduled payments of principal and/or interest due on the mortgage loans on or before the cut-off date are timely made, and no prepayments or other unscheduled collections of principal are received with respect to any of the mortgage loans during the period from June 1, 2015 up to and including the cut-off date. | ||||
· | In the case of the Brickyard Square mortgage loan and the Bella Luna / San Lucas mortgage loan, with respect to each of which the related mortgaged property also secures onepari passu companion loan, we generally present the loan-to-value ratio, debt service coverage ratio, debt yield and cut-off date balance per net rentable square foot or unit, as applicable, in this free writing prospectus in a | ||||
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manner that takes account of that mortgage loan and its relatedpari passu companion loan. | |||||
· | None of the mortgage loans in the trust fund will be cross-collateralized with any mortgage loan that is not in the trust fund (except as described in this free writing prospectus (i) with respect to the mortgage loans respectively secured by the mortgaged properties identified on Annex A-1 to this free writing prospectus as Brickyard Square and Bella Luna / San Lucas, each of which also secures one relatedpari passu companion loan that is not included in the trust fund and (ii) as to residential cooperative properties which are described in this free writing prospectus as being encumbered (or which may in the future be encumbered) by secured subordinate indebtedness which is not included in the trust fund). | ||||
· | Two (2) of the mortgage loans, representing approximately 0.6% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date, provide for an increase in the related interest rate after a certain date, referred to as the anticipated repayment date, if the related borrower has not repaid the mortgage loan in full on such date. See “Description of the Mortgage Pool—ARD Loans” in this free writing prospectus. | ||||
· | The information in this free writing prospectus for mortgage loans secured by more than one mortgaged property is generally based on allocated loan amounts as stated on Annex A-1 when information is presented relating to mortgaged properties and not mortgage loans. | ||||
· | Except as otherwise specifically stated, the loan-to-value ratio, debt service coverage ratio, debt yield and loan per net rentable square foot or unit statistics with respect to each mortgage loan are calculated and presented without regard to any indebtedness other than the mortgage loan, whether or not secured by the related mortgaged property, ownership interests in the related borrower or otherwise, that currently exists or that may be incurred by the related borrower or its owners in the future. | ||||
· | With respect to information regarding mortgage loans secured by residential cooperative properties investors should note that (a) the underwritten net cash flow presented herein for residential cooperative properties is not a measure of the actual cash flow generated by such property, but rather a measure of the projected net cash flow of such |
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property, reflected in an appraisal and determined assuming such property is operated as a multifamily rental property with rents and other income set at prevailing market rates (but taking into account the presence of existing rent regulated or rent-controlled rental tenants), reduced by underwritten property operating expenses, a market-rate vacancy assumption and projected replacement reserves, in each case as determined by the appraiser and (b) occupancy rates for the related mortgaged property as listed on Annex A-1 to this free writing prospectus are determined using the property vacancy assumption reflected in the related appraisal for purposes of determining the appraised value of the related mortgaged property as a multifamily rental property (i.e., the “Coop-Rental Value” reflected in Annex A-1 to this free writing prospectus); such vacancy assumption does not reflect actual occupancy. | |||||||
B.General Characteristics | As of the cut-off date, the mortgage loans are expected to have the following characteristics: | ||||||
Cut-off date pool balance | $1,177,025,122 | ||||||
Number of mortgage loans | 133 | ||||||
Number of mortgaged properties | 151 | ||||||
Percentage of multi-property mortgage | |||||||
loans | 9.4% | ||||||
Largest cut-off date principal balance | $100,000,000 | ||||||
Smallest cut-off date principal balance | $750,000 | ||||||
Average cut-off date principal balance | $8,849,813 | ||||||
Highest mortgage interest rate | 5.390% | ||||||
Lowest mortgage interest rate | 3.380% | ||||||
Weighted average mortgage interest | |||||||
rate | 4.266% | ||||||
Longest original term to maturity or | |||||||
anticipated repayment date | 120 months | ||||||
Shortest original term to maturity or | |||||||
anticipated repayment date | 60 months | ||||||
Weighted average original term | |||||||
to maturity or anticipated repayment | |||||||
date | 119 months | ||||||
Longest remaining term to maturity or | |||||||
anticipated repayment date | 120 months | ||||||
Shortest remaining term to maturity or | |||||||
anticipated repayment date | 54 months | ||||||
Weighted average remaining term to | |||||||
maturity or anticipated repayment | |||||||
date | 118 months | ||||||
Highest debt service coverage ratio, | |||||||
based on underwritten net cash | |||||||
flow(1)(2) | 21.73x | ||||||
Lowest debt service coverage ratio, | |||||||
based on underwritten net cash | |||||||
flow(1)(2) | 1.13x | ||||||
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Weighted average debt service coverage | ||||||||
ratio, based on underwritten net cash | ||||||||
flow(1)(2) | 1.98x | |||||||
Highest cut-off date loan-to-value | ||||||||
ratio(1)(2) | 75.0% | |||||||
Lowest cut-off date loan-to-value | ||||||||
ratio(1)(2) | 3.0% | |||||||
Weighted average cut-off date loan-to- | ||||||||
value ratio(1)(2) | 64.5% | |||||||
Highest maturity date loan-to-value | ||||||||
ratio or anticipated repayment date | ||||||||
loan-to-value ratio(1)(2) | 69.8% | |||||||
Lowest maturity date loan-to-value | ||||||||
ratio or anticipated repayment date | ||||||||
loan-to-value ratio(1)(2) | 2.4% | |||||||
Weighted average maturity date loan- | ||||||||
to-value ratio or anticipated | ||||||||
repayment date loan-to-value | ||||||||
ratio(1)(2) | 55.5% | |||||||
Highest underwritten NOI debt yield | ||||||||
ratio(1)(2) | 119.4% | |||||||
Lowest underwritten NOI debt yield | ||||||||
ratio(1)(2) | 7.5% | |||||||
Weighted average underwritten NOI | ||||||||
debt yield ratio(1)(2) | 11.8% | |||||||
Highest underwritten NCF debt yield | ||||||||
ratio(1)(2) | 119.4% | |||||||
Lowest underwritten NCF debt yield | ||||||||
ratio(1)(2) | 7.5% | |||||||
Weighted average underwritten NCF | ||||||||
debt yield ratio(1)(2) | 11.1% | |||||||
(1) | In the case of the Brickyard Square mortgage loan and the Bella Luna / San Lucas mortgage loan, with respect to each of which the related mortgaged property also secures onepari passu companion loan, the debt service coverage ratio, the loan-to-value ratio and debt yield information is generally presented in this free writing prospectus in a manner that takes account of that mortgage loan and its relatedpari passu companion loan. Other than as noted, the debt service coverage ratio, loan-to-value ratio and debt yield information for each mortgage loan is presented in this free writing prospectus without regard to any other indebtedness (whether or not secured by the related mortgaged property, ownership interests in the related borrower or otherwise) that currently exists or that may be incurred by the related borrower or its owners in the future, in order to present statistics for the related mortgage loan not in combination with the other indebtedness. See “Description of the Mortgage Pool—Certain Characteristics of the Mortgage Pool” and “Description of the Mortgage Pool—Subordinate and/or Other Financing” in this free writing prospectus for information regarding the combined loan-to-value ratios and debt service coverage ratios with respect to mortgage loans that have related subordinate secured indebtedness or mezzanine indebtedness outstanding or that may be permitted in the future. For mortgage loans having interest-only payments for their entire terms, 12 months of interest-only payments is used as the annual debt service for purposes of calculating the related debt service coverage ratios. | |||||||
(2) | See Annex B to this free writing prospectus, “Risk Factors—Risks Related to the Mortgage Loans—Debt Service Coverage Ratio and Net Cash Flow Information is Based on Numerous Assumptions”, “Description of the Mortgage Pool—Net Cash Flow and Certain Underwriting Considerations”, and the footnotes to Annex A-1 for important general and specific information regarding the manner of calculation of the underwritten debt service coverage ratios, loan-to-value ratios and underwritten debt yield ratios that are presented in this free writing prospectus, including (in some cases) taking into account reserves in such calculations and/or using an “as-stabilized” value, “as-renovated” value or “as-completed” value for the related mortgaged property in determining loan-to-value ratio. | |||||||
33 |
For residential cooperative mortgage loans, the debt service coverage ratio and debt yield information are calculated using underwritten net cash flow for the related residential cooperative property which is the projected net cash flow reflected in the most recent appraisal obtained by or otherwise in the possession of the related mortgage loan seller as of the cut-off date and, in general, equals the projected operating income at the related mortgaged property assuming such mortgaged property is operated as a rental property. The loan-to-value ratio information for residential cooperative mortgage loans is based upon the appraised value of the residential cooperative property reflected in the most recent appraisal obtained by or otherwise in the possession of the related mortgage loan seller as of the cut-off date determined as if such residential cooperative property is operated as a residential cooperative. See “Risk Factors—Risks Related to the Mortgage Loans—Residential Cooperative Properties Have Special Risks” in this free writing prospectus. | |||||||||||||||||
C. Loan Combinations | The mortgage loans secured by the mortgaged properties identified on Annex A-1 to this free writing prospectus as Brickyard Square and Bella Luna / San Lucas, representing approximately 1.0% and 0.4%, respectively, of the aggregate principal balance of the pool of mortgage loans as of the cut-off date, are part of loan combinations for which the same mortgage instrument also secures one note that ispari passu in right of payment with the respective mortgage loan and will not be included in the trust fund. | ||||||||||||||||
For convenience of reference, we refer to those mortgage loans and their related companion loans as the “loan combinations”. | |||||||||||||||||
The table below shows certain information with respect to the loan combinations: | |||||||||||||||||
Loan Combinations(1) | |||||||||||||||||
Mortgage Loan | Mortgage Loan Cut-off Date Loan Balance | Mortgage Loan as a % of Cut-off Date Pool Balance | Pari Passu Companion Loan(s) Balance as of Cut-off Date | Total Mortgage Debt Balance as of Cut-off Date | |||||||||||||
Brickyard Square | $11,450,000 | 1.0% | $25,000,000 | $36,450,000 | |||||||||||||
Bella Luna / | |||||||||||||||||
San Lucas | $ 4,957,123 | 0.4% | $15,367,079 | $20,324,202 | |||||||||||||
(1) | For more information regarding each loan combination, see “Description of the Mortgage Pool—Loan Combinations” in this free writing prospectus. | ||||||||||||||||
D. Property Types | The table below shows the number of mortgaged properties operated primarily for each indicated purpose, | ||||||||||||||||
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and the aggregate cut-off date balance of, and percentage of the aggregate principal balance of, mortgage loans as of the cut-off date secured by each such property type: | |||||||||||||||||||
Property Types | Number of Mortgaged Properties | Aggregate Cut-off Date Balance(1) | % of Cut-off Date Pool Balance(1) | ||||||||||||||||
Multifamily(2) | 53 | $ | 339,058,508 | 28.8 | % | ||||||||||||||
Retail | 44 | 313,808,559 | 26.7 | ||||||||||||||||
Office | 11 | 294,897,126 | 25.1 | ||||||||||||||||
Self Storage | 20 | 79,519,010 | 6.8 | ||||||||||||||||
Hospitality | 7 | 57,703,508 | 4.9 | ||||||||||||||||
Industrial | 10 | 32,318,421 | 2.7 | ||||||||||||||||
Mixed Use | 2 | 27,100,000 | 2.3 | ||||||||||||||||
Other | 2 | 24,173,905 | 2.1 | ||||||||||||||||
Manufactured | |||||||||||||||||||
Housing | |||||||||||||||||||
Community | 2 | 8,446,084 | 0.7 | ||||||||||||||||
Total: | 151 | $ | 1,177,025,122 | 100.0 | % | ||||||||||||||
(1) | Because this table presents information relating to mortgaged properties and not mortgage loans, the information for mortgage loans secured by more than one mortgaged property is based upon allocated loan amounts as set forth on Annex A-1 to this free writing prospectus. | ||||||||||||||||||
(2) | Includes twenty-eight (28) residential cooperative properties (including the residential cooperative property identified on Annex A-1 to this free writing prospectus as Baywoods of Annapolis, representing approximately 1.4% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date, which is operated, in part, as a residential cooperative property and, in part, as a residential healthcare facility), representing 7.0% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date by allocated loan amount. | ||||||||||||||||||
E. State Concentrations | The table below shows the states in which the mortgaged properties are located: |
State/Region | Number of Mortgaged Properties | Aggregate Cut-off Date Balance(1) | % of Cut-off Date Pool Balance(1) | |||||||||||||||
New York | 30 | $ | 182,319,607 | 15.5 | % | |||||||||||||
Texas | 19 | 171,494,880 | 14.6 | |||||||||||||||
Florida | 26 | 161,854,235 | 13.8 | |||||||||||||||
Virginia | 5 | 70,795,520 | 6.0 | |||||||||||||||
California | 11 | 56,968,197 | 4.8 | |||||||||||||||
Other(2) | 60 | 533,592,682 | 45.3 | |||||||||||||||
Total: | 151 | $ | 1,177,025,122 | 100.0 | % | |||||||||||||
(1) | Because this table presents information relating to mortgaged properties and not mortgage loans, the information for mortgage loans secured by more than one mortgaged property is based upon allocated loan amounts as set forth on Annex A-1 to this free writing prospectus. | |||||||||||||||||
(2) | Includes twenty-seven (27) other states. | |||||||||||||||||
F. Encumbered and | ||||||||||||||||||
Other Interests | The table below shows the number of mortgaged properties for which the encumbered interest is as indicated, and the aggregate cut-off date balance of, and percentage of the aggregate principal balance of, mortgage loans as of the cut-off date secured by such encumbered interests: | |||||||||||||||||
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Encumbered Interest | Number of Mortgaged Properties | Aggregate Cut-off Date Balance(1) | % of Cut-off Date Pool Balance(1) | ||||||||||||||
Fee(2) | 149 | $ | 1,172,528,701 | 99.6 | % | ||||||||||||
Leasehold | 2 | 4,496,421 | 0.4 | ||||||||||||||
Total: | 151 | $ | 1,177,025,122 | 100.0 | % | ||||||||||||
(1) | Because this table presents information relating to mortgaged properties and not mortgage loans, the information for mortgage loans secured by more than one mortgaged property is based upon allocated loan amounts as set forth on Annex A-1 to this free writing prospectus. | ||||||||||||||||
(2) | Includes leasehold interests where the fee interest completely overlaps the leasehold interest. | ||||||||||||||||
G. Amortization | |||||||||||||||||
Characteristics | The table below shows the amortization characteristics of the mortgage loans: |
Amortization Type | Number of Mortgage Loans | Aggregate Cut-off Date Balance | % of Cut-off Date Pool Balance | |||||||||||||
Interest-only, | ||||||||||||||||
Amortizing Balloon | 50 | $ | 625,323,500 | 53.1 | % | |||||||||||
Amortizing Balloon | 67 | 395,812,325 | 33.6 | |||||||||||||
Interest-only, Balloon | 14 | 149,405,000 | 12.7 | |||||||||||||
Amortizing, ARD | 2 | 6,484,296 | 0.6 | |||||||||||||
Total: | 133 | $ | 1,177,025,122 | 100.0 | % | |||||||||||
H. Prepayment Restrictions | The table below shows an overview of the prepayment restrictions under the terms of the mortgage loans: |
Prepayment Restriction(1)(2)(3) | Number of Mortgage Loans | Aggregate Cut-off Date Balance | % of Cut-off Date Pool Balance | |||||||||||||||
Lock-out/Defeasance/ Open | 94 | $ | 976,968,682 | 83.0 | % | |||||||||||||
Lock-out/Greater of Yield | ||||||||||||||||||
Maintenance or | ||||||||||||||||||
Prepayment | ||||||||||||||||||
Premium/Open | 10 | 124,968,000 | 10.6 | |||||||||||||||
Greater of Yield | ||||||||||||||||||
Maintenance or | ||||||||||||||||||
Prepayment Premium/ | ||||||||||||||||||
Prepayment | ||||||||||||||||||
Premium/Open | 27 | 65,694,607 | 5.6 | |||||||||||||||
Lock-out/Defeasance or | ||||||||||||||||||
Greater of Yield | ||||||||||||||||||
Maintenance or | ||||||||||||||||||
Prepayment | ||||||||||||||||||
Premium/Open | 1 | 7,000,000 | 0.6 | |||||||||||||||
Greater of Yield | ||||||||||||||||||
Maintenance or | ||||||||||||||||||
Prepayment | ||||||||||||||||||
Premium/Open | 1 | 2,393,832 | 0.2 | |||||||||||||||
Total: | 133 | $ | 1,177,025,122 | 100.0 | % | |||||||||||||
(1) | Prepayment restrictions for each mortgage loan reflect the entire life of the loan. See Annex A-1 to this free writing prospectus, including the footnotes thereto, for individual prepayment restrictions and seasoning applicable to each mortgage loan. | |||||||||||||||||
(2) | See Annex A-1 to this free writing prospectus for the type of provision that applies to each mortgage loan and the length of the relevant periods. | |||||||||||||||||
(3) | Exceptions apply to the restrictions in some circumstances. See “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans—Voluntary Prepayment and Defeasance Provisions” and “—Certain Terms of the Mortgage Loans—Voluntary Prepayment and Defeasance Provisions—Partial Release and/or Partial Defeasance and/or Substitution and/or Severance/Partial Assumption” in this free writing prospectus and Annex A-1, including the footnotes thereto, to this free writing prospectus. |
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The mortgage loans generally permit voluntary prepayment without payment of a yield maintenance charge or any prepayment premium during a limited “open period” immediately prior to and including the stated maturity date as follows: | ||||||||||||||||
Open Period (Payments) | Number of Mortgage Loans | Aggregate Cut-off Date Balance | % of Cut-off Date Pool Balance | |||||||||||||
1-3 | 6 | $ | 63,707,050 | 5.4 | % | |||||||||||
4-6 | 118 | 1,006,169,364 | 85.5 | |||||||||||||
7-13 | 9 | 107,148,708 | 9.1 | |||||||||||||
Total: | 133 | $ | 1,177,025,122 | 100.0 | % | |||||||||||
I. Other Mortgage Loan | ||||||||||||||||
Features | As of the cut-off date, the mortgage loans had the following characteristics: | |||||||||||||||
· | The most recent scheduled payment of principal and interest on any mortgage loan was not thirty days or more past due, and no mortgage loan has been thirty days or more past due in the past year. | |||||||||||||||
· | Ten (10) groups of mortgage loans, representing approximately 22.2% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date, were made to borrowers that are affiliated with one another through partial or complete direct or indirect common ownership. See “Description of the Mortgage Pool—Certain Characteristics of the Mortgage Pool—Multi-Property Mortgage Loans; Mortgage Loans with Affiliated Borrowers” and Annex A-1 to this free writing prospectus. | |||||||||||||||
· | Eleven (11) mortgaged properties, securing approximately 5.2% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date by allocated loan amount, are each either wholly owner-occupied or 100% leased to a single tenant. See Annex A-1 to this free writing prospectus and the charts entitled “Major Tenants” and “Lease Expiration Schedule” in “Summaries of the Fifteen Largest Mortgage Loans” attached as Annex A-3 to this free writing prospectus. | |||||||||||||||
· | The mortgage interest rate for each mortgage loan is fixed for the remaining term of the loan, except for (i) increases resulting from the application of the default interest rate following a default, (ii) in the case of each mortgage loan with an anticipated repayment date, any increase described herein that may occur if such mortgage loan is not repaid by the related anticipated repayment date and (iii) changes that result from any other loan-specific provisions | |||||||||||||||
37 |
that are described in the footnotes to Annex A-1 in this free writing prospectus. | ||||
· | No mortgage loan permits negative amortization or the deferral of accrued interest (except for excess interest that would accrue in the case of each mortgage loan having an anticipated repayment date after the related anticipated repayment date for such mortgage loan). | |||
J. Removal of Loans | ||||
from the Mortgage Pool | One or more of the mortgage loans may be removed from the trust fund pursuant to the purchase rights and obligations described below. | |||
K. Seller Repurchase and | ||||
Substitution | Each mortgage loan seller will make representations and warranties with respect to the mortgage loans sold by it. Those representations and warranties are set forth in Annex C-1 and will be subject to the exceptions set forth in Annex C-2. If a mortgage loan seller discovers or has been notified of a material breach of any of its representations and warranties or a material defect in the documentation of any mortgage loan as described under “Description of the Mortgage Pool—Representations and Warranties” in this free writing prospectus, then that mortgage loan seller (or, in the case of mortgage loans sold by Walker & Dunlop Commercial Property Funding I WF, LLC, that mortgage loan seller and Walker & Dunlop Commercial Property Funding, LLC) will be required either to cure the breach or defect, repurchase the affected mortgage loan from the trust fund, substitute the affected mortgage loan with another mortgage loan or make a loss of value payment based on such defect or breach. Any repurchase of a mortgage loan would have substantially the same effect on the offered certificates as a prepayment in full of such mortgage loan, except that the purchase will not be accompanied by any prepayment premium or yield maintenance charge. The applicable purchase price is generally not less than the sum of the outstanding principal balance of the mortgage loans together with accrued and unpaid interest, outstanding servicing advances and certain other costs or expenses (including liquidation fees in certain circumstances). In addition, no late charges or default interest will be paid. See “Description of the Mortgage Pool—Cures, Repurchases and Substitutions” in this free writing prospectus and “Description of the Pooling and Servicing Agreements—Representations and Warranties; Repurchases” in the accompanying prospectus. | |||
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L. Sale of Defaulted | ||||
Mortgage Loans | Subject to the discussion set forth below with respect to the Brickyard Square mortgage loan and the Bella Luna / San Lucas mortgage loan, pursuant to the pooling and servicing agreement (and subject to any applicable intercreditor agreement), the applicable special servicer may offer to sell to any person (or may offer to purchase) a mortgage loan if the applicable mortgage loan is a specially serviced mortgage loan and the applicable special servicer determines that no satisfactory arrangements can be made for collection of delinquent payments, or an REO property after its acquisition, and such a sale would be in the best economic interest of the trust on a net present value basis. In the event a special servicer sells a specially serviced mortgage loan or REO property, that special servicer is generally required to accept the highest offer received from any person as described more fully in “Servicing of the Mortgage Loans and Administration of the Trust Fund—Procedures With Respect to Defaulted Mortgage Loans and REO Properties” in this free writing prospectus and “Description of the Pooling and Servicing Agreements—Realization upon Defaulted Mortgage Loans” in the accompanying prospectus. | |||
Notwithstanding any contrary provision described above, with respect to the Brickyard Square mortgage loan, the WFCM 2015-C28 pooling and servicing agreement and, with respect to the Bella Luna / San Lucas mortgage loan, the WFCM 2015-LC20 pooling and servicing agreement authorizes the applicable other special servicer to offer to sell (or offer to purchase) for cash the related loan combination if the loan combination is a specially serviced mortgage loan and the other special servicer determines that no satisfactory arrangements can be made for collection of delinquent payments, and such a sale would be in the best economic interest of the related trust (as the holder of the relatedpari passu companion loan) and the trust fund for this transaction collectively, on a net present value basis. In connection with any such loan sale, the other special servicer will be required to sell both the mortgage loan and its relatedpari passu companion loan together as a whole loan. | ||||
M. Defaulted Loan | ||||
Purchase Options | Pursuant to the related intercreditor agreement, the holders of any mezzanine loan incurred by the owners of a borrower generally have an option to purchase the related mortgage loan from the trust fund following a material default. The applicable purchase price is generally not less than the sum of the outstanding principal balance of the mortgage loan together with accrued and unpaid interest, outstanding servicing | |||
39 |
advances and certain other costs or expenses (including liquidation fees in certain circumstances). The purchase price will generally not include any prepayment premium or yield maintenance charge. In addition, no late charges or default interest will be paid in connection with any purchase described above. See “Servicing of the Mortgage Loans and Administration of the Trust Fund—Procedures With Respect to Defaulted Mortgage Loans and REO Properties” in this free writing prospectus and “Description of the Pooling and Servicing Agreements—Realization upon Defaulted Mortgage Loans” in the accompanying prospectus. | ||||
Description of the Offered Certificates | ||||
General | The trust will issue 20 classes of the certificates with an approximate aggregate principal balance at initial issuance equal to $1,177,025,121. We are offering the Class A-1, A-2, A-3, A-4, A-SB, A-S, X-A, X-B, B, C, PEX and D certificates by this free writing prospectus. The trust will also issue the Class A-4FL, A-4FX, E, F, G, V-1, V-2 and R certificates, which are not offered hereby. | |||
Certificate Principal | ||||
Balances | The Class A-1, A-2, A-3, A-4, A-SB, A-S, B, C, PEX and D certificates will each have principal balances. When referring to the principal balance certificates collectively, we are referring to the Class A-1, A-2, A-3, A-4, A-4FL, A-4FX, A-SB, A-S, B, C, PEX, D, E, F and G certificates. The Class X-A and X-B certificates will not have principal balances and the holders of those classes will not be entitled to distributions of principal. For purposes of calculating the amount of accrued interest with respect to those certificates, however, the Class X-A certificates will have a notional amount equal to the aggregate principal balance of the Class A-1, A-2, A-3, A-4 and A-SB certificates and the Class A-4FX and A-S regular interests outstanding from time to time and the Class X-B certificates will have a notional amount equal to the aggregate principal balance of the Class B and C regular interests outstanding from time to time. | |||
Upon initial issuance, and subject to a permitted variance that depends on the mortgage loans deposited into the trust fund, each class of offered certificates will have the aggregate initial certificate principal balance set forth in the table below: | ||||
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Class | Approx. Initial Aggregate Certificate Principal Balance or Notional Amount | Approx. % of Cut-off Date Pool Balance | Approx. Initial Credit Support(1) | ||||||||||||
Class A-1 | $ | 50,145,000 | 4.260 | % | 30.000 | % | |||||||||
Class A-2 | $ | 30,508,000 | 2.592 | % | 30.000 | % | |||||||||
Class A-3 | $ | 250,000,000 | 21.240 | % | 30.000 | % | |||||||||
Class A-4 | $ | 396,065,000 | 33.650 | % | 30.000 | % | |||||||||
Class A-SB | $ | 97,199,000 | 8.258 | % | 30.000 | % | |||||||||
Class A-S | $ | 88,277,000 | (2) | 7.500 | % | 22.500 | % | ||||||||
Class X-A | $ | 912,194,000 | NAP | NAP | |||||||||||
Class X-B | $ | 120,645,000 | NAP | NAP | |||||||||||
Class B | $ | 70,621,000 | (2) | 6.000 | % | 16.500 | % | ||||||||
Class C | $ | 50,024,000 | (2) | 4.250 | % | 12.250 | % | ||||||||
Class PEX | $ | 208,922,000 | (2) | 17.750 | % | 12.250 | % | ||||||||
Class D | $ | 58,851,000 | 5.000 | % | 7.250 | % |
(1) | The approximate initial credit support with respect to the Class A-1, A-2, A-3, A-4 and A-SB certificates and the Class A-4FX regular interest (and, therefore, the Class A-4FL and A-4FX certificates) represents the approximate credit enhancement for the Class A-1, A-2, A-3, A-4 and A-SB certificates and the Class A-4FX regular interest in the aggregate. The percentage indicated under the column “Approximate Initial Credit Support” with respect to the Class C certificates and the Class PEX certificates represents the approximate credit support for the Class C regular interest, which will have an initial outstanding principal balance on the closing date of $50,024,000. | ||||
(2) | The initial principal balances of the Class A-S, B and C certificates represent the principal balances of such classes without giving effect to any exchange for Class PEX certificates. The initial principal balance of the Class PEX certificates is equal to the aggregate of the initial principal balances of the Class A-S, B and C certificates and represents the maximum principal balance of the Class PEX certificates that could be issued in an exchange. | ||||
The approximate initial credit support provided to each class of principal balance certificates at initial issuance is the aggregate initial certificate principal balance, expressed as a percentage of the aggregate principal balance of the pool of mortgage loans as of the cut-off date, of all classes of principal balance certificates that are subordinate to the indicated class with respect to rights to receive distributions of interest and principal and the allocation of realized losses. The level of credit enhancement available to any of the principal balance certificates will change over time as a result of (i) the allocation and distribution of principal payments on or in respect of the mortgage loans (including as a result of default, casualty, condemnation or liquidation) and proceeds of repurchases or sales of mortgage loans as described herein and (ii) the allocation of realized losses and additional trust fund expenses as described herein. | |||||
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Pass-Through Rates | The Class A-1, A-2, A-3, A-4, A-SB, A-S, X-A, X-B, B, C, PEX and D certificates will each bear interest. When referring to the interest-bearing certificates collectively, we are referring to the Class A-1, A-2, A-3, A-4, A-4FL, A-4FX, A-SB, X-A, X-B, A-S, B, C, PEX, D, E, F and G certificates. Each class of offered certificates (other than the Class PEX certificates) will accrue interest at a pass-through rate. The approximate initial pass-through rates of the offered certificates (other than the Class PEX certificates), the Class A-4FX certificates and the Class A-4FX regular interest are set forth in the following table: | |||||
Class | Approx. Initial Pass-Through Rate | |||||
Class A-1 | % | |||||
Class A-2 | % | |||||
Class A-3 | % | |||||
Class A-4 | % | |||||
Class A-4FX and Class A-4FX regular interest | % | |||||
Class A-SB | % | |||||
Class A-S and Class A-S regular interest | % | |||||
Class X-A | % | |||||
Class X-B | % | |||||
Class B and Class B regular interest | % | |||||
Class C and Class C regular interest | % | |||||
Class PEX | NAP | |||||
Class D | % | |||||
The pass-through rates for the Class A-1, A-2, A-3, A-4, A-SB and D certificates and the Class A-4FX, A-S, B and C regular interests, in each case, will be aper annum rate equal to one of the following: (i) a fixed rate, (ii) the weighted average of the net mortgage interest rates on the mortgage loans for the related distribution date, (iii) a variable rate equal to the lesser of (a) a fixed rate and (b) the weighted average of the net mortgage interest rates on the mortgage loans for the related distribution date or (iv) a variable rate equal to the weighted average of the net mortgage interest rates for the related distribution dateminus a specified percentage. The pass-through rate for the Class X-A certificates for any distribution date will be aper annum rate equal to the excess, if any, of (a) the weighted average of the net mortgage interest rates on the mortgage loans for the related distribution date, over (b) the weighted average of the pass-through rates on the Class A-1, A-2, A-3, A-4 and A-SB certificates and the Class A-4FX and A-S regular interests for the related distribution date, weighted on the basis of their respective aggregate principal balances outstanding | ||||||
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immediately prior to that distribution date. The pass-through rate for the Class X-B certificates for any distribution date will be aper annum rate equal to the excess, if any, of (a) the weighted average of the net mortgage interest rates on the mortgage loans for the related distribution date, over (b) the weighted average of the pass-through rates on the Class B and C regular interests for the related distribution date, weighted on the basis of their respective aggregate principal balances outstanding immediately prior to that distribution date. For purposes of the calculation of the weighted average of the net mortgage interest rates on the mortgage loans for each distribution date, the mortgage interest rates will be adjusted as necessary to a 30/360 basis. | ||||
The weighted average of the net mortgage interest rates on the mortgage loans for each distribution date will be calculated in the manner described under the heading “Description of the Offered Certificates—Distributions—Calculation of Pass-Through Rates” in this free writing prospectus. | ||||
The Class PEX certificates will not have a pass-through rate, but will be entitled to receive the sum of the interest distributable on the percentage interests of the Class A-S, B and C regular interests represented by the Class PEX certificates. | ||||
Exchanging Certificates through Combination and Recombination | If you own exchangeable certificates in an exchange proportion that we describe in this free writing prospectus, you will be able to exchange them for a proportionate interest in the related exchangeable certificates. You can exchange your exchangeable certificates by notifying the certificate administrator. If exchangeable certificates are outstanding and held by certificateholders, those certificates will receive principal and interest that would otherwise have been payable on the same proportion of certificates exchanged therefor if those certificates were outstanding and held by certificateholders. Any such allocations of principal and interest as between classes of exchangeable certificates will have no effect on the principal or interest entitlements of any other class of certificates. Exchanges will be subject to various conditions that we describe in this free writing prospectus. | |||
See “Description of the Offered Certificates—Exchanges of Exchangeable Certificates” in this free writing prospectus for a description of the exchangeable certificates and exchange procedures. See also “Risk Factors—Risks Related to the Offered Certificates—There | ||||
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Are Risks Relating to the Exchangeable Certificates” in this free writing prospectus. | |||||||
Distributions | |||||||
A. General | The certificate administrator will make distributions of interest and, if and when applicable, principal to the holders of the following classes of certificates entitled to those distributions, sequentially as follows: | ||||||
Distribution | |||||||
Order(1) | Class | ||||||
1st | A-1, A-2, A-3, A-4, A-SB, | ||||||
X-A(2) and X-B(2) and the Class A-4FX regular | |||||||
interest | |||||||
2nd | Class A-S regular interest | ||||||
3rd | Class B regular interest | ||||||
4th | Class C regular interest | ||||||
5th | Class D | ||||||
6th | Non-offered certificates (other than the | ||||||
Class A-4FL, A-4FX, V-1 and V-2 certificates) | |||||||
(1) | With respect to priority 1st, (a) distributions of interest among the Class A-1, A-2, A-3, A-4, A-SB, X-A and X-B certificates and the Class A-4FX regular interest will be made on apro rata basis in accordance with their respective interest entitlements and (b) distributions of principal, if and when applicable, generally will be made first to the Class A-SB certificates in an amount necessary to reduce the principal balance of such certificates to the Class A-SB planned principal balance identified on Annex G to this free writing prospectus, then sequentially in order of distribution priority as described under “—C. Distributions of Principal” below. | ||||||
(2) | The Class X-A and X-B certificates do not have principal balances and do not entitle their holders to distributions of principal. | ||||||
In general, the funds available for distribution to certificateholders on each distribution date will be the aggregate amount received, or advanced as delinquent monthly debt service payments, on or in respect of the mortgage loans during the related collection period, net of (1) all forms of compensation payable to (a) the parties to the pooling and servicing agreement for this transaction and (b) with respect to the Brickyard Square loan combination, the parties to the WFCM 2015-C28 pooling and servicing agreement and, with respect to the Bella Luna / San Lucas loan combination, the parties to the WFCM 2015-LC20 pooling and servicing agreement, in each case, to the extent provided for in the related intercreditor agreement or as otherwise described in this free writing prospectus, (2) reimbursements of prior servicing advances and advances of delinquent monthly debt service payments | |||||||
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and (3) reimbursements or payments of interest on servicing advances and debt service advances, indemnification expenses and other expenses of the trust fund. | |||||
See “Description of the Offered Certificates—Distributions—Priority of Distributions” and “Description of the Offered Certificates—Fees and Expenses” in this free writing prospectus and “Description of the Certificates—Distributions” in the accompanying prospectus. | |||||
B. Distributions of Interest | Each class of certificates (other than the Class A-4FL, R, V-1 and V-2 certificates) and the Class A-4FX, A-S, B and C regular interests will bear interest that will accrue during each interest accrual period based upon: | ||||
· | the pass-through rate for that class and interest accrual period; | ||||
· | the aggregate principal balance or notional amount, as the case may be, of that class outstanding immediately prior to the related distribution date; and | ||||
· | with respect to the Class A-4FX, A-S, B and C regular interests and each class of certificates (other than the Class A-4FL, R, V-1 and V-2 certificates), the assumption that each interest accrual period consists of 30 days and each year consists of 360 days. | ||||
A whole or partial prepayment on a mortgage loan, whether made by the related borrower or resulting from the application of insurance proceeds and/or condemnation proceeds, may not be accompanied by the amount of one full month’s interest on the prepayment. As and to the extent described under “Description of the Offered Certificates—Distributions—Interest Distributions” in this free writing prospectus, prepayment interest shortfalls may be allocated to reduce the amount of accrued interest otherwise distributable to the holders of all the principal balance certificates on apro rata basis. | |||||
In addition, the amount of interest otherwise distributable on the Class D certificates and the Class B and C regular interests (and, therefore, on the Class B and C certificates and/or the Class PEX certificates, as applicable) on any distribution date may be reduced by certain trust advisor expenses. | |||||
On each distribution date, subject to available funds and the allocation and distribution priorities described under “—A. General” above and, in the case of the Class D | |||||
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certificates and the Class B and C regular interests (and, therefore, the Class B and C certificates and/or the Class PEX certificates, as applicable), the allocation of certain trust advisor expenses as described in this free writing prospectus, you will be entitled to receive your proportionate share of all unpaid distributable interest accrued with respect to your class of offered certificates through the end of the related interest accrual period. | |||||
Interest distributions with respect to the Class A-1, A-2, A-3, A-4, A-SB, X-A and X-B certificates and the Class A-4FX regular interest will be made on apro rata basis in accordance with their respective interest entitlements. | |||||
See “Description of the Offered Certificates—Distributions—Interest Distributions” and “—Priority of Distributions” in this free writing prospectus and “Description of the Certificates—Distributions of Interest on the Certificates” in the accompanying prospectus. | |||||
C. Distributions of Principal | Subject to— | ||||
· | available funds, | ||||
· | the distribution priorities described under “—A. General” above, | ||||
· | the reductions of principal balances and other provisions described under “—Reductions of Certificate Principal Balances in Connection with Losses and Expenses” below, and | ||||
· | the reductions, allocations and provisions described under “—Reductions of Interest Entitlements and the Principal Distribution Amount in Connection with Certain Trust Advisor Expenses” below, | ||||
the holders of each class of principal balance certificates will be entitled to receive a total amount of principal over time equal to the aggregate principal balance of their particular class at initial issuance. | |||||
No principal will be distributed to the holders of the Class X-A and X-B certificates. | |||||
Except as described below, the certificate administrator must make principal distributions in a specified sequential order to ensure that: | |||||
· | no distributions of principal will be made on the Class E, F and G certificates until, in the case of each of those classes, the aggregate principal balance of the Class A-1, A-2, A-3, A-4, A-SB and D certificates, and the Class A-4FX, A-S, B and C regular interests | ||||
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(and, therefore, the Class A-4FL, A-4FX, A-S, B, C and PEX certificates) and all other classes with an alphabetical designation earlier than that of the subject class, is reduced to zero; | |||||
· | no distributions of principal will be made on the Class D certificates until the aggregate principal balance of the Class A-1, A-2, A-3, A-4 and A-SB certificates, and the Class A-4FX, A-S, B and C regular interests (and, therefore, the Class A-4FL, A-4FX, A-S, B, C and PEX certificates) is reduced to zero; | ||||
· | no principal distributions will be made on the Class C regular interest (and, therefore, on the Class C certificates and the Class C component of the Class PEX certificates) until the aggregate principal balance of each other class of offered certificates (other than the Class D, PEX and C certificates), and the Class A-4FX, A-S and B regular interests (and, therefore, the Class A-4FL, A-4FX, A-S and B certificates and the Class A-S and B components of the Class PEX certificates) is reduced to zero; | ||||
· | no principal distributions will be made on the Class B regular interest (and, therefore, on the Class B certificates and the Class B component of the Class PEX certificates) until the aggregate principal balance of each other class of offered certificates (other than the Class D, PEX, C and B certificates), and the Class A-4FX and A-S regular interests (and, therefore, the Class A-4FL, A-4FX and A-S certificates and the Class A-S component of the Class PEX certificates) is reduced to zero; | ||||
· | no principal distributions will be made on the Class A-S regular interest (and, therefore, on the Class A-S certificates and the Class A-S component of the Class PEX certificates) until the aggregate principal balance of each other class of offered certificates (other than the Class D, PEX, C, B and A-S certificates) and the Class A-4FX regular interest (and, therefore, the Class A-4FL and A-4FX certificates) is reduced to zero; | ||||
· | no principal distributions, other than the distribution of amounts required, if any, to reduce the outstanding principal balance of the Class A-SB certificates to the Class A-SB planned principal balance for the related distribution date as identified on Annex G to this free writing prospectus, will be made on the Class A-SB certificates until the aggregate principal balance of each other class of offered certificates (other than the Class D, PEX, C, B | ||||
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and A-S certificates) and the Class A-4FX regular interest (and, therefore, the Class A-4FL and A-4FX certificates) is reduced to zero; | |||||
· | no principal distributions will be made on the Class A-4 certificates or Class A-4FX regular interest (and, therefore, the Class A-4FL and A-4FX certificates) until the principal balance of the Class A-SB certificates is reduced to the related Class A-SB planned principal balance as identified on Annex G to this free writing prospectus and the aggregate principal balance of the Class A-1, A-2 and A-3 certificates is reduced to zero; | ||||
· | no principal distributions will be made on the Class A-3 certificates until the principal balance of the Class A-SB certificates is reduced to the related Class A-SB planned principal balance as identified on Annex G to this free writing prospectus and the aggregate principal balance of the Class A-1 and A-2 certificates is reduced to zero; | ||||
· | no principal distributions will be made on the Class A-2 certificates until the principal balance of the Class A-SB certificates is reduced to the related Class A-SB planned principal balance as identified on Annex G to this free writing prospectus and the principal balance of the Class A-1 certificates is reduced to zero; | ||||
· | no principal distributions will be made on the Class A-1 certificates until the principal balance of the Class A-SB certificates is reduced to the Class A-SB planned principal balance as identified on Annex G to this free writing prospectus; and | ||||
· | once the Class A-SB certificates are reduced to the Class A-SB planned principal balance as identified on Annex G to this free writing prospectus, no additional principal distributions will be made on the Class A-SB certificates until the aggregate principal balance of the Class A-1, A-2, A-3 and A-4 certificates and the Class A-4FX regular interest (and, therefore, the Class A-4FL and A-4FX certificates) is reduced to zero. | ||||
Because of losses on the mortgage loans, and/or default-related or other unanticipated expenses of the trust fund, the aggregate principal balance of the Class D, E, F and G certificates and the Class A-S, B and C regular interests (and, therefore, the Class A-S, B, C and PEX certificates) may be reduced to zero at a time when the Class A-1, A-2, A-3, A-4 and/or A-SB certificates and/or the Class A-4FX regular interest | |||||
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remain outstanding. Under such circumstances, and in any event on the final distribution date, available principal funds for each distribution date will be allocated on the Class A-1, A-2, A-3, A-4 and A-SB certificates and the Class A-4FX regular interestpro rata (in accordance with their respective aggregate principal balances immediately prior to that distribution date), until the aggregate principal balance of those classes and the Class A-4FX regular interest is reduced to zero. | |||||
The total distributions of principal to be made on the principal balance certificates collectively on each distribution date will, in general, be a function of— | |||||
· | the amount of scheduled payments of principal due or, in cases involving balloon loans that remain unpaid after their stated maturity dates and mortgage loans as to which the related mortgaged properties have been acquired on behalf of (or partially on behalf of) the trust fund, deemed due, on the mortgage loans during the collection period related to the subject distribution date, which payments are either received as of the end of the related collection period or advanced by the applicable master servicer or the trustee, as applicable, and | ||||
· | the amount of any prepayments and other unscheduled collections of previously unadvanced principal with respect to the mortgage loans that are received during the related collection period. | ||||
However, the amount of principal otherwise distributable on the certificates collectively on any distribution date will be reduced by the following amounts, to the extent those amounts are paid or reimbursed from collections or advances of principal on the mortgage loans: (1) advances determined to have become nonrecoverable, (2) advances that remain unreimbursed immediately following the modification of a mortgage loan and its return to performing status and (3) certain trust advisor expenses and other trust fund expenses. | |||||
See “Description of the Offered Certificates—Distributions—Principal Distributions” and “—Priority of Distributions” in this free writing prospectus and “Description of the Certificates—Distributions of Principal on the Certificates” in the accompanying prospectus. | |||||
Fees and Expenses | As described below, certain fees and expenses will be payable from amounts received on the mortgage loans in the trust fund, in general prior to any amounts being paid to the holders of the offered certificates. Certain of those fees and expenses are described below. | ||||
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Each master servicer will be entitled to the applicable master servicing fee, which will be payable monthly on a loan-by-loan basis from amounts received in respect of interest on each mortgage loan serviced by such master servicer (including each applicable specially serviced mortgage loan, each applicable mortgage loan as to which the corresponding mortgaged property has become an REO property and each applicable mortgage loan as to which defeasance has occurred), including any non-servicedpari passu mortgage loan. The master servicing fee for each applicable mortgage loan will accrue at the related master servicing fee rate and will be computed using the same interest accrual basis and principal amount respecting which any related interest payment due on the mortgage loan is computed. The weighted average master servicing fee rate will be approximately 0.0343%per annum as of the cut-off date. The master servicing fee for each mortgage loan will be payable monthly to the applicable master servicer from amounts received with respect to interest on that mortgage loan or, upon liquidation of the mortgage loan, to the extent such interest collections are not sufficient, from general collections on all the mortgage loans. | ||||
Certain of the mortgage loans will be sub-serviced by sub-servicers that will be entitled to a sub-servicing fee with respect to each such mortgage loan. The rate at which the sub-servicing fee for each such mortgage loan accrues is included in the applicable master servicing fee rate for each of those mortgage loans. | ||||
Other than with respect to any non-servicedpari passu mortgage loan, each special servicer will be entitled to the applicable special servicing fee, which will be payable monthly on (1) each specially serviced mortgage loan serviced by such special servicer, if any, and (2) each applicable mortgage loan, if any, as to which the corresponding mortgaged property has become an REO property. The special servicing fee will accrue for any specially serviced mortgage loan or REO mortgage loan at a rate equal to 0.25%per annum (or, in the case of the mortgage loans sold to the depositor by National Cooperative Bank, N.A only, a rate equal to the greater of (i) 0.25%per annum and (ii) aper annum rate that would result in a special servicing fee for each such mortgage loan of $1,000 for the related month) and will be computed on the same interest accrual basis and principal amount respecting which any related interest payment due on such specially serviced mortgage loan or REO mortgage loan, as the case may be, is paid. | ||||
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The special servicing fee will be payable monthly from related liquidation proceeds, insurance proceeds or condemnation proceeds (if any) and then from general collections on all the mortgage loans (other than any non-servicedpari passu mortgage loan) and any related REO properties that are on deposit in the collection accounts from time to time. | ||||
Each special servicer will generally be entitled to receive a workout fee with respect to each serviced mortgage loan worked out by that special servicer, for so long as that serviced mortgage loan remains a worked-out mortgage loan. The workout fee will be payable out of, and will be calculated by application of a workout fee rate of 1.00% to each payment of interest, other than default interest, and each payment of principal received on the related mortgage loan for so long as it remains a worked-out mortgage loan. | ||||
Each special servicer will also be entitled to receive a liquidation fee with respect to each specially serviced mortgage loan (other than any non-servicedpari passu mortgage loan) serviced by such special servicer for which a full, partial or discounted payoff is obtained from the related borrower. The applicable special servicer will also be entitled to receive a liquidation fee with respect to any specially serviced mortgage loan or REO property as to which any liquidation proceeds, insurance proceeds or condemnation proceeds are received, except as described in the next paragraph. In each case, except as described in the next paragraph, the liquidation fee will be payable from, and will be calculated by application of a liquidation fee rate of 1.00% to, the related payment or proceeds, exclusive of any portion of that payment or proceeds that represents a recovery of default interest and/or late payment charges. | ||||
In general, no liquidation fee will be payable based on, or out of, proceeds received in connection with the purchase or repurchase of any mortgage loan by the related mortgage loan seller from the trust fund or payment of any loss of value payments under the circumstances described below under “Servicing of the Mortgage Loans and Administration of the Trust Fund—Servicing and Other Compensation and Payment of Expenses—Principal Special Servicing Compensation—Liquidation Fee” in this free writing prospectus. | ||||
The certificate administrator will be entitled to a fee for each mortgage loan (including any non-servicedpari passu mortgage loan) and each REO mortgage loan for any distribution date equal to the product of the portion of the certificate administrator fee rate applicable to |
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such month, determined in the same manner as the applicable mortgage interest rate is determined for each mortgage loan for such month, and the principal balance of that mortgage loan. The certificate administrator fee rate is 0.0039%per annum. The trustee will be entitled to a monthly fee of $210 payable by the certificate administrator from the certificate administrator’s fee pursuant to the pooling and servicing agreement. | ||||
The trust advisor will be entitled to a fee for each mortgage loan (other than the Brickyard Square mortgage loan and the Bella Luna / San Lucas mortgage loan) for any distribution date equal to the product of the portion of the trust advisor fee rate applicable to such month, determined in the same manner as the applicable mortgage interest rate is determined for each mortgage loan for such month, and the principal balance of that mortgage loan. The trust advisor fee rate is 0.00231%per annum. | ||||
With respect to the Brickyard Square mortgage loan and the Bella Luna / San Lucas mortgage loan, the related other master servicer, the other special servicer and the trust advisor with respect to the related other securitization will be entitled to fees on terms and conditions that are substantially similar in all material respects (but not necessarily identical) to the respective fees described above, in each case pursuant to the related pooling and servicing agreement. See “Description of the Mortgage Pool—Loan Combinations”, “Description of the Offered Certificates—Fees and Expenses” and “Servicing of the Mortgage Loans and Administration of the Trust Fund—Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations” in this free writing prospectus. | ||||
The master servicers, special servicers, trustee, certificate administrator and trust advisor and, with respect to the Brickyard Square mortgage loan and the Bella Luna / San Lucas mortgage loan, the related other master servicer, the other special servicer, the trustee, the certificate administrator and the trust advisor under the related other pooling and servicing agreement are entitled to certain other additional fees and reimbursement of expenses. In general, those fees and reimbursements are payable or reimbursable from various amounts collected on the related mortgage loan or loan combination or in whole or in part from general collections on the mortgage pool for this transaction, in each case prior to distributions to the certificateholders. | ||||
Further information with respect to the fees and expenses payable from amounts otherwise distributable to certificateholders, including information regarding the |
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general purpose of and the source of payment for the fees and expenses and certain limitations on the payment of fees to affiliates, is set forth under “Description of the Offered Certificates—Fees and Expenses” and “Servicing of the Mortgage Loans and Administration of the Trust Fund—Servicing and Other Compensation and Payment of Expenses” in this free writing prospectus. | ||||
D. Distributions of Yield Maintenance Charges and Other Prepayment Premiums | Any yield maintenance charge or prepayment premium collected in respect of a mortgage loan generally will be distributed, in the proportions described in this free writing prospectus, to the holders of the Class X-A and/or X-B certificates and/or to the holders of any Class A-1, A-2, A-3, A-4, A-SB and/or D certificates, and/or the Class A-4FX, A-S, B and/or C regular interests (and, therefore, the Class A-4FL, A-4FX, A-S, B, C and/or PEX certificates, as applicable) then entitled to receive distributions of principal. See “Description of the Offered Certificates—Distributions—Priority of Distributions—Distributions of Yield Maintenance Charges and Prepayment Premiums” in this free writing prospectus and “Description of the Certificates—Distributions on the Certificates in Respect of Prepayment Premiums or in Respect of Equity Participations” in the accompanying prospectus. | |||
Reductions of Certificate Principal Balances in Connection with Losses and Expenses | Because of losses on the mortgage loans and/or default-related and other unanticipated expenses of the trust fund, the aggregate principal balance of the mortgage pool, net of advances of principal, may fall below the aggregate principal balance of the certificates. In general, if and to the extent that those losses and expenses cause such a deficit to exist following the distributions made on any distribution date, then the principal balances of the respective classes of principal balance certificates generally will be sequentially reduced (without accompanying principal distributions) in the following order, until that deficit is eliminated: | |||
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Reduction | ||||||
Order | Class | |||||
1st | Non-offered certificates (other than the Class A-4FL and A-4FX certificates) | |||||
2nd | Class D certificates | |||||
3rd | Class C regular interest (and, therefore, the Class C certificates and the Class C component of the Class PEX certificates) | |||||
4th | Class B regular interest (and, therefore, the Class B certificates and the Class B component of the Class PEX certificates) | |||||
5th | Class A-S regular interest (and, therefore, the Class A-S certificates and the Class A-S component of the Class PEX certificates) | |||||
6th | Class A-1, A-2, A-3, A-4 and A-SB certificates and the Class A-4FX regular interest (and, therefore, the Class A-4FL and A-4FX certificates) | |||||
Any reduction of the principal balances of the Class A-1, A-2, A-3, A-4 and A-SB certificates and the Class A-4FX regular interest (and, therefore, the Class A-4FL and A-4FX certificates) will be made on apro rata basis in accordance with the relative sizes of those principal balances at the time of the reduction. | ||||||
To the extent that unanticipated expenses of the trust fund consist of indemnification payments to the trust advisor or, with respect to any non-servicedpari passu mortgage loan, the trust advisor (or the equivalent) under the pooling and servicing agreement related to that non-servicedpari passu mortgage loan, then (i) if the expense arises in connection with legal actions pending or threatened against the trust advisor at the time of its discharge, the expense will be treated in substantially the same manner as other unanticipated expenses of the trust fund for purposes of the provisions described above, and (ii) under any other circumstances, the expense will be separately allocated and borne by certificateholders in the manner generally described under “—Reductions of Interest Entitlements and Certificate Principal Balances in Connection with Certain Trust Advisor Expenses” below. The pooling and servicing agreement will contain provisions for the identification and categorization of expenses for such purposes. | ||||||
See “Description of the Offered Certificates—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses” in this free writing prospectus and “Description of the | ||||||
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Certificates—Allocation of Losses and Shortfalls” in the accompanying prospectus. | ||||
Reductions of Interest Entitlements and Certificate Principal Balances In Connection with Certain Trust Advisor Expenses | The trust advisor will be entitled to indemnification in respect of its obligations under the pooling and servicing agreement as described in this free writing prospectus, and certain of those obligations may be triggered early as a result of a waiver by the majority subordinate certificateholder of its rights under the pooling and servicing agreement. In connection with any activities related to any non-serviced loan combination serviced under another securitization, the trust advisor (or equivalent party) with respect to such securitization may be entitled to indemnification from the trust fund for this transaction (on apro rata basis with the other trust fund and any other holders of relatedpari passu companion loans, based upon the respective principal balances of thepari passu mortgage loan and the relatedpari passu companion loans) in respect of its obligations under the pooling and servicing agreement pursuant to which each non-serviced loan combination is serviced, and certain of those obligations may be triggered early as a result of a waiver by the majority subordinate certificateholder (or the equivalent) under that securitization of its rights under that pooling and servicing agreement. Any expenses incurred by the trust advisor or, with respect to any non-servicedpari passu mortgage loan, the trust advisor (or the equivalent) under the pooling and servicing agreement pursuant to which the related non-serviced loan combination is serviced, that are indemnifiable under the pooling and servicing agreement will be reimbursable on each distribution date up to the sum of the interest otherwise distributable on the Class D certificates and the Class C and B regular interests (and, therefore, on the Class C and B certificates and/or the Class C and B components of the Class PEX certificates, as applicable) on that distribution date and the portion of the amount of principal distributable on the related distribution date that would otherwise be distributed on the Class A-1, A-2, A-3, A-4, A-SB and D certificates and the Class A-4FX, A-S, B and C regular interests (and, therefore, on the Class A-4FL, A-4FX, A-S, B, C and/or PEX certificates, as applicable) on that distribution date. | |||
Amounts so reimbursed will be allocated to reduce the amount of interest that (but for these allocations) would be distributed on the Class D certificates and the Class C | ||||
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and B regular interests, in that order, on that distribution date, and any remaining amount will be allocated to reduce such portion of such principal distributable on the related distribution date, with a corresponding write-off of the principal balance of the Class D certificates, the Class C, B and A-S regular interests, and the Class A-1, A-2, A-3, A-4 and A-SB certificates and the Class A-4FX regular interest (with any write-off of the Class A-1, A-2, A-3, A-4 and A-SB certificates and the Class A-4FX regular interest to be applied on apro rata basis between those classes in accordance with their respective aggregate principal balances immediately prior to that distribution date), in that order, in each case until the principal balance of that class has been reduced to zero. Any portion of such trust advisor expenses that remain unreimbursed after giving effect to allocations and distributions on that distribution date will not be reimbursed to the trust advisor or, with respect to any non-servicedpari passu mortgage loan, any trust advisor (or equivalent party) under the pooling and servicing agreement pursuant to which that non-serviced loan combination is serviced, on that distribution date and will be carried forward to and be reimbursable on succeeding distribution dates, subject to the same provisions, until the trust advisor is actually reimbursed for the relevant expense. However, the provisions described above will not apply to trust advisor expenses that arise from legal proceedings that are pending or threatened against the trust advisor at the time of its discharge or, with respect to any non-servicedpari passu mortgage loan, any related other trust advisor or operating advisor at the time of its discharge (see “—Relevant Parties—Trust Advisor” above). | ||||
See “Description of the Offered Certificates—Reductions of Interest Entitlements and the Principal Distribution Amount in Connection with Certain Trust Advisor Expenses” in this free writing prospectus. | ||||
Advances of Delinquent Monthly Debt Service Payments | Each master servicer will be required to make debt service advances with respect to any delinquent scheduled monthly payments of principal and/or interest on the mortgage loans (including any non-servicedpari passu mortgage loan but not anypari passu companion loan) serviced by that master servicer, other than balloon payments, default interest and excess interest, and to make advances of assumed monthly debt service payments for such mortgage loans that are balloon loans and become defaulted upon their maturity dates, on the same amortization schedule as if the maturity | |||
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date had not occurred, as well as for applicable REO mortgage loans. The trustee must make any of those advances that either master servicer is required, but fails, to make, subject to its own determination of non-recoverability. Any party that makes a debt service advance will be entitled to be reimbursed for that advance, together with interest at the prime lending rate described more fully in this free writing prospectus. However, interest will commence accruing on any monthly debt service advance made in respect of a scheduled monthly debt service payment only on the date on which any applicable grace period for that payment expires. | ||||
Notwithstanding the foregoing, none of the master servicers or the trustee will be required to make any debt service advance that it or the related special servicer determines, in its reasonable good faith judgment, will not be recoverable (together with interest on the advance) from proceeds of the related mortgage loan. Absent bad faith, the determination by any authorized person that a debt service advance constitutes a nonrecoverable advance as described above will be conclusive and binding. | ||||
In addition, each special servicer must generally obtain an appraisal or conduct an internal valuation of the mortgaged property securing any mortgage loan for which it has servicing responsibilities under the pooling and servicing agreement following a material default or the occurrence of certain other events described in this free writing prospectus. Based upon the results of such appraisal, or, in the case of the Brickyard Square mortgage loan or the Bella Luna / San Lucas mortgage loan, an appraisal obtained by the applicable special servicer under the WFCM 2015-C28 pooling and servicing agreement or the WFCM 2015-LC20 pooling and servicing agreement, respectively, the amount otherwise required to be advanced in respect of interest on the related mortgage loan may be reduced as described under the heading “Description of the Offered Certificates—Advances of Delinquent Monthly Debt Service Payments” in this free writing prospectus. Due to the distribution priorities described in this free writing prospectus, any reduction in advances will generally reduce the funds available to distribute interest on the respective classes of subordinate interest-bearing certificates sequentially in the reverse order of distribution priority (first, Class G, then Class F and so on, with the effects borne on apari passu basis as between those classes that arepari passu with each other in respect of interest distributions) up to the total amount of the reduction. | ||||
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See “Servicing of the Mortgage Loans and Administration of the Trust Fund—Required Appraisals” in this free writing prospectus and “Description of the Certificates—Advances in Respect of Delinquencies” in the accompanying prospectus. | ||||
Each of the Brickyard Square mortgage loan and the Bella Luna / San Lucas mortgage loan is subject to provisions in the related other pooling and servicing agreement under which it is serviced relating to appraisal reductions, and such provisions are substantially similar in all material respects (but not necessarily identical) to the provisions set forth above. The existence of an appraisal reduction in respect of the Brickyard Square mortgage loan or the Bella Luna / San Lucas mortgage loan will proportionally reduce the applicable master servicer’s or the trustee’s obligation to make the interest portion of advances on such mortgage loan under the pooling and servicing agreement for this transaction. See “Description of the Mortgage Pool—Loan Combinations” and “Servicing of the Mortgage Loans and Administration of the Trust Fund—Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations” in this free writing prospectus. | ||||
Delinquent scheduled monthly payments of principal and/or interest on apari passu companion loan will not be advanced by either master servicer or the trustee, but may be advanced by the applicable master servicer or trustee under the other securitization servicing agreement pursuant to which thatpari passu companion loan is securitized. | ||||
Subordination | The amount available for distribution will be applied in the order described in “Distributions—Distributions of Interest” and “—Distributions of Principal” above. | |||
The following chart generally depicts the general manner in which the payment rights of certain classes will be senior or subordinate, as the case may be, to the payment rights of other classes. The chart shows entitlement to receive interest and, if applicable, principal owed on any distribution date in order of payment priority (except that principal will generally be allocated and paidfirst, to the Class A-SB certificates up to the Class A-SB planned principal balance as identified on Annex G to this free writing prospectus for the applicable distribution date, and then, to the Class A-1 certificates, and then, to the Class A-2 certificates, and then, to the Class A-3 certificates, and then, on apro rata basis to the Class A-4 certificates and the Class A-4FX regular interest (and, therefore, the Class A-4FL and A-4FX certificates), and then, to the Class A-SB certificates without regard to the Class A-SB planned |
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principal balance, in that order). Payment rights of the various classes of certificates are more fully described in “Description of the Offered Certificates—Distributions” in this free writing prospectus. It also shows the manner in which mortgage loan losses are allocated, which will be in the reverse order of priority (beginning with certain classes of certificates that are not being offered by this free writing prospectus). Loss allocation and shortfall burdens of the various classes of certificates are more fully described in “Description of the Offered Certificates—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses” and “—Reductions of Interest Entitlements and the Principal Distribution Amount in Connection with Certain Trust Advisor Expenses” in this free writing prospectus. | |||||
(1) | The Class X-A and X-B certificates do not have a certificate principal balance and do not entitle their holders to distributions of principal. However, loan losses will generally reduce the respective notional amounts of the Class X-A and/or X-B certificates and, therefore, the amount of interest they accrue. | ||||
(2) | Other than the Class A-4FL, A-4FX, R, V-1 and V-2 certificates. | ||||
No other form of credit enhancement will be available for the benefit of the holders of the offered certificates. | |||||
See “Description of the Offered Certificates—Distributions” in this free writing prospectus. | |||||
Principal losses on the mortgage loans allocated to a class of certificates will reduce the related certificate | |||||
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principal balance of that class. No such losses will be allocated to the Class V-1, V-2, R, X-A or X-B certificates, although loan losses will reduce the notional amount of the Class X-A certificates (to the extent such losses are allocated to the Class A-1, A-2, A-3, A-4 or A-SB certificates or the Class A-4FX or A-S regular interest) or the Class X-B certificates (to the extent such losses are allocated to the Class B or C regular interests) and, therefore, the amount of interest they accrue. To the extent funds are available on a subsequent distribution date for distribution on your certificates, you will be reimbursed for any losses allocated to your certificates. | ||||
In addition to losses caused by mortgage loan defaults, shortfalls in payments to holders of certificates may occur as a result of the master servicers’, special servicers’ and trustee’s right to receive payments of interest on unreimbursed advances (to the extent not covered by default interest and late payment charges or certain other fees paid by the related borrower or other borrowers that are not paid to the master servicers or the special servicers as compensation), with respect to the Brickyard Square mortgage loan and the Bella Luna / San Lucas mortgage loan, the right of the other master servicer, other special servicer or trustee under the related pooling and servicing agreement to receive payments of interest on unreimbursed servicing advances related to the Brickyard Square loan combination or the Bella Luna / San Lucas loan combination, as applicable, the applicable special servicer’s or any other special servicer’s right to compensation with respect to mortgage loans which are or have been serviced by that special servicer, a modification of a mortgage loan’s interest rate or principal balance or as a result of other unanticipated trust expenses. These shortfalls, if they occur, would generally reduce distributions on the various classes of interest-bearing certificates, with the effect borne by classes with relatively lower payment priorities before classes with relatively higher payment priorities. To the extent funds are available on a subsequent distribution date for distribution on your certificates, you will be reimbursed for any such shortfall allocated to your certificates. | ||||
With respect to anypari passu mortgage loan, any losses or shortfalls that occur with respect to the related loan combination will be allocated between thepari passu mortgage loan and its relatedpari passu companion loan on apro rata basis in accordance with their respective principal balances. | ||||
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In addition, prepayment interest shortfalls that are not covered by certain compensating interest payments made by either master servicer are required to be allocated to the various classes of interest-bearing certificates (other than the Class X-A, X-B, A-4FL, A-4FX, A-S, B, C and PEX certificates) and the Class A-4FX, A-S, B and C regular interests, on apro rata basis according to accrued interest, to reduce the interest entitlements on such certificates or regular interests. You will never receive a reimbursement or other compensation for any prepayment interest shortfalls that are so allocated to your certificates. | |||||
To the extent that unanticipated expenses of the trust fund consist of indemnification payments to the trust advisor or, with respect to the WFCM 2015-C28 securitization or the WFCM 2015-LC20 securitization, as applicable, any other trust advisor or operating advisor, then (i) if the expense arises in connection with legal actions pending or threatened against that trust advisor at the time of its discharge, the expense will be treated in substantially the same manner as other unanticipated expenses of the trust fund for purposes of the provisions described above, and (ii) under any other circumstances, the expense will be separately allocated and borne by certificateholders in the manner generally described under “Description of the Offered Certificates—Reductions of Interest Entitlements and the Principal Distribution Amount in Connection with Certain Trust Advisor Expenses” in this free writing prospectus. | |||||
Information Available to | |||||
Certificateholders | On each distribution date, the certificate administrator will prepare and make available to each certificateholder a statement as to the distributions being made on that date. Additionally, under certain circumstances, certificateholders may be entitled to certain other information regarding the trust provided they agree to keep the information confidential. See “Description of the Offered Certificates—Reports to Certificateholders; Available Information” in this free writing prospectus and “Description of the Certificates—Reports to Certificateholders” in the accompanying prospectus. | ||||
Early Termination | The trust fund may be terminated and therefore the certificates may be retired early by certain designated entities when the total outstanding principal balance of the mortgage loans, net of advances of principal, is reduced to 1.0% or less of the aggregate principal balance of the pool of mortgage loans as of the cut-off date. See “Description of the Offered Certificates—Termination of the Pooling and Servicing Agreement” in this free writing prospectus and “Description of the | ||||
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Certificates—Termination” in the accompanying prospectus. | |||||
Denominations | We intend to deliver the Class A-1, A-2, A-3, A-4, A-SB, A-S, B, C, PEX and D certificates in minimum principal balance denominations of $10,000. We intend to deliver the Class X-A and X-B certificates in minimum notional amount denominations of $1,000,000. Investments may also be made in any whole dollar denomination in excess of the applicable minimum denomination. See “Description of the Offered Certificates—Delivery, Form and Denomination” in this free writing prospectus and “Description of the Certificates—General” in the accompanying prospectus. | ||||
Clearance and Settlement | You will hold your certificates through The Depository Trust Company (“DTC”), in the United States, or Clearstream Banking société anonyme (“Clearstream”) or Euroclear Bank as operator of The Euroclear System (“Euroclear”), in Europe. As a result, you will not receive a fully registered physical certificate representing your interest in any such certificate, except under limited circumstances. See “Description of the Offered Certificates—Delivery, Form and Denomination” in this free writing prospectus and “Description of the Certificates—Book-Entry Registration and Definitive Certificates” in the accompanying prospectus. | ||||
Deal Information/Analytics | Certain information concerning the mortgage loans and the certificates may be available to subscribers through the following services: | ||||
· | Bloomberg, L.P., Trepp, LLC, Intex Solutions, Inc., Interactive Data Corp., Markit Group Limited and BlackRock Financial Management, Inc., CMBS.com, Inc. and Thomson Reuters Corporation; and | ||||
· | the certificate administrator’s website initially located at www.ctslink.com. | ||||
Neither the certificate administrator nor any other party to the pooling and servicing agreement will be obligated to provide any analytical information or services regarding the mortgage loans or the certificates. The type and amount of analytical information concerning the mortgage loans or the certificates made available to you by a third-party service will be determined solely by such service and will depend on the type of subscription, if any, that you may have with such service. | |||||
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Additional Aspects of the Offered Certificates and the Trust Fund | |||||
Conflicts of Interest | The relationships between the parties to this transaction and the activities of those parties or their affiliates may give rise to certain conflicts of interest. These conflicts of interests may arise from, among other things, the following relationships and activities: | ||||
· | the ownership of any certificates by the depositor, sponsors, mortgage loan sellers, underwriters, master servicers, special servicers, trustee, certificate administrator, trust advisor or any of their affiliates or, with respect to the WFCM 2015-C28 securitization or the WFCM 2015-LC20 securitization by the other master servicer, the other special servicer, or the other trust advisor under the related pooling and servicing agreement or any of their respective affiliates; | ||||
· | the relationships, including the ownership of other mortgage debt (including thepari passu companion loans or securities backed thereby), non-mortgage debt and equity interests or other financial dealings, of the sponsors, mortgage loan sellers, master servicers, special servicers, trustee, certificate administrator, trust advisor or, with respect to the Brickyard Squarepari passu companion loan or the Bella Luna / San Lucaspari passu companion loan, the master servicer, special servicer, or trust advisor under the pooling and servicing agreement for the related securitization or any of their respective affiliates or any of their respective affiliates with each other, any borrower, any borrower sponsor or any of their affiliates; | ||||
· | any affiliation between the subordinate class representative and any borrower or property manager with respect to a mortgage loan, or any affiliate of the borrower or property manager, or any agent, principal, partner, member, joint venturer, limited partner, employee, representative, director, trustee, advisor or investor in or of an affiliate of the related borrower; | ||||
· | the obligation of either special servicer, or, with respect to the Brickyard Squarepari passu companion loan or the Bella Luna / San Lucaspari passu companion loan, the special servicer under the related pooling and servicing agreement or any of their respective affiliates to take actions at the direction or obtain the approval of the subordinate class representative, or the holder of the Brickyard Squarepari passu companion loan or its representative, or the holder of the Bella Luna / San |
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Lucaspari passu companion loan or its representative, as applicable; | |||||
· | the right of the majority subordinate certificateholder or the subordinate class representative on its behalf, or, with respect to the Brickyard Squarepari passu companion loan or the Bella Luna / San Lucaspari passu companion loan, the majority subordinate certificateholder, subordinate class representative or controlling class representative under the related pooling and servicing agreement, to replace either applicable special servicer, with or without cause (in any case other than with respect to an excluded loan), and any arrangements entered into between a special servicer and any such entity in consideration of such special servicer’s appointment (or continuance) as special servicer under such pooling and servicing agreement; | ||||
· | the broker-dealer activities of the underwriters and their affiliates, including taking long or short positions in the certificates or entering into credit derivative transactions with respect to the certificates; | ||||
· | the opportunity of the initial investor in the Class E, F and G certificates to request the removal or re-sizing of or other changes to the features of some or all of the mortgage loans or its imposition of additional monetary or other conditions on its acquisition of those certificates in order to allow certain mortgage loans to be included in this securitization; and | ||||
· | the activities of the master servicers, special servicers, trust advisor, sponsors, mortgage loan sellers, underwriters, trustee, or certificate administrator or, with respect to the Brickyard Squarepari passu companion loan or the Bella Luna / San Lucaspari passu companion loan, the activities of the master servicer, the special servicer, or the trust advisor under the related pooling and servicing agreement or any of their respective affiliates in connection with any other transaction. | ||||
See “Risk Factors—Risks Related to the Offered Certificates—If any Master Servicer or any Special Servicer Purchases Certificates or Has Investments Related to a Borrower or Other Person, a Conflict of Interest May Arise Between Its Own Interests and Its Duties to the Trust Fund”, “—You Will Have Limited Ability To Control the Servicing of the Mortgage Loans and the Parties with Control Over the Servicing of the Mortgage Loans May Have Interests that Conflict with |
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Your Interests”, “—Various Other Securitization-Level Conflicts of Interest May Have an Adverse Effect on Your Offered Certificates”, “—Potential Conflicts of Interest of the Underwriters and Their Affiliates”, “—Potential Conflicts of Interest of the Subordinate Class Representative” and “—Potential Conflicts of Interest in the Selection of the Mortgage Loans” in this free writing prospectus. | ||||
Federal Tax Status | Elections will be made to treat designated portions of the trust fund as three separate “real estate mortgage investment conduits” or “REMICs” under Sections 860A through 860G of the Internal Revenue Code of 1986, as amended. Those REMICs will exclude excess interest accrued on each mortgage loan with an anticipated repayment date. The Class A-4FX, A-S, B and C regular interests, together with any excess interest, and the swap contract and the related distribution account will be held in portions of a grantor trust and the Class A-4FL, A-4FX, A-S, B, C, PEX, V-1 and V-2 certificates will represent undivided beneficial interests in their respective portions of such grantor trust as further described under “Material Federal Income Tax Consequences” in this free writing prospectus. | |||
The offered certificates will evidence the ownership of “regular interests” in a REMIC, as further described under “Material Federal Income Tax Consequences” in this free writing prospectus. The offered certificates and the Class A-S, B and C regular interests generally will be treated as newly originated debt instruments for federal income tax purposes. The Class A-S, B, C and PEX certificates will represent undivided beneficial interests in the Class A-S, B and C regular interests. You will be required to report income on your certificates in accordance with the accrual method of accounting, regardless of your usual method of accounting. | ||||
The Class X-A and X-B certificates will evidence the ownership of multiple “interest-only” regular interests, with each such regular interest having a notional principal balance corresponding to one of the classes of offered certificates that has a principal balance or the Class A-4FX, A-S, B or C regular interests, as applicable. | ||||
We anticipate that the Class , , and certificates will be issued at a premium for federal income tax purposes and we anticipate that the Class and certificates will be issued with more than ade minimis amount of original issue discount for federal income tax purposes. When determining the rate of accrual of original issue discount, if any, and market discount and the amortization of premium, for federal income tax | ||||
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purposes, the prepayment assumption will be that, subsequent to the date of any determination— | |||||
● | each mortgage loan with an anticipated repayment date will repay in full on that date; | ||||
● | no mortgage loan will otherwise be prepaid prior to maturity; and | ||||
● | there will be no extension of the maturity of any mortgage loan. | ||||
No representation is made that the mortgage loans will in fact be repaid in accordance with this assumption or that the Internal Revenue Service will not challenge on audit the prepayment assumption used. | |||||
For a more detailed discussion of United States federal income tax aspects of investing in the offered certificates, see “Material Federal Income Tax Consequences” in this free writing prospectus and “Material Federal Income Tax Consequences” in the accompanying prospectus. | |||||
Yield Considerations | You should carefully consider the matters described under “Risk Factors—Risks Related to the Offered Certificates—The Yields to Maturity on the Offered Certificates Depend on a Number of Factors that Cannot Be Predicted with any Certainty” in this free writing prospectus, which may affect significantly the yield on your investment. In addition, see “Yield and Maturity Considerations” in this free writing prospectus and “Yield Considerations” in the accompanying prospectus. | ||||
ERISA | The offered certificates are generally eligible for purchase by employee benefit plans pursuant to the prohibited transaction exemption granted to Wells Fargo Securities, LLC, subject to certain considerations discussed in the sections titled “ERISA Considerations” in this free writing prospectus and “ERISA Considerations” in the accompanying prospectus. | ||||
You should refer to the sections in this free writing prospectus and the accompanying prospectus referenced above if you are a benefit plan fiduciary considering the purchase of any offered certificates. You should, among other things, consult with your counsel to determine whether all required conditions in the prohibited transaction exemption have been satisfied. | |||||
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Ratings | The offered certificates will not be issued unless each of the offered classes receives at least the following ratings from Fitch Ratings, Inc., Kroll Bond Rating Agency, Inc. and Moody’s Investors Service, Inc.: | ||||||||||
Class | Fitch | KBRA | Moody’s | ||||||||
Class A-1 | AAAsf | AAA(sf) | Aaa(sf) | ||||||||
Class A-2 | AAAsf | AAA(sf) | Aaa(sf) | ||||||||
Class A-3 | AAAsf | AAA(sf) | Aaa(sf) | ||||||||
Class A-4 | AAAsf | AAA(sf) | Aaa(sf) | ||||||||
Class A-SB | AAAsf | AAA(sf) | Aaa(sf) | ||||||||
Class A-S | AAAsf | AAA(sf) | Aa2(sf) | ||||||||
Class X-A | AAAsf | AAA(sf) | NR | ||||||||
Class X-B | NR | AAA(sf) | NR | ||||||||
Class B | AA-sf | AA-(sf) | NR | ||||||||
Class C | A-sf | A-(sf) | NR | ||||||||
Class PEX | A-sf | A-(sf) | NR | ||||||||
Class D | BBB-sf | BBB-(sf) | NR | ||||||||
The ratings address the likelihood of full and timely distribution to the certificateholders of all distributions of interest at the applicable pass-through rate on the offered certificates on each distribution date and, except in the case of the Class X-A and X-B certificates, the ultimate distribution in full of the certificate principal balance of each class of certificates not later than the distribution date in June 2048. Each security rating assigned to the offered certificates should be evaluated independently of any other security rating. Such ratings do not address the tax attributes of the certificates or the receipt of any default interest or prepayment premium or yield maintenance charge or constitute an assessment of the likelihood, timing or frequency of prepayments on the mortgage loans. | |||||||||||
A security rating is not a recommendation to buy, sell or hold securities and the assigning rating agency may revise or withdraw its rating at any time. | |||||||||||
The ratings of the offered certificates entail substantial risks and may be unreliable as an indication of the creditworthiness of your certificates. We hired Fitch Ratings, Inc., Kroll Bond Rating Agency, Inc. and Moody’s Investors Service, Inc. to rate certain classes of the offered certificates. Each of Fitch Ratings, Inc., Kroll Bond Rating Agency, Inc. and Moody’s Investors Service, Inc. may issue ratings on one or more classes of offered certificates that we did not hire them to rate. Had the depositor engaged each of the three (3) hired nationally recognized statistical rating organizations to rate all classes of certificates, the ratings of those classes of certificates that were not ultimately rated by one or more of those nationally recognized statistical rating organizations may have been different, and potentially lower, than the ratings ultimately assigned to |
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the certificates. In the case of Moody’s Investors Service, Inc., the depositor only requested ratings for certain classes of related certificates, due in part to the initial subordination levels provided by Moody’s Investors Service, Inc. If the depositor had selected Moody’s Investors Service, Inc. to rate those other classes of rated certificates not rated by it, its ratings of those other certificates may have been different, and potentially lower, than those ratings ultimately assigned to those certificates by Fitch Ratings, Inc. and Kroll Bond Rating Agency, Inc. In addition, the decision not to engage one or more of the three (3) hired nationally recognized statistical rating organizations to rate certain classes of certificates to be issued in connection with this transaction may negatively impact the liquidity, market value and regulatory characteristics of those classes of certificates. | ||||
Information regarding the mortgage loans and the trust fund will be available to other nationally recognized statistical rating organizations that may enable them to issue unsolicited credit ratings on one or more classes of offered certificates. If any such unsolicited ratings are lower than the ratings assigned by the hired rating agencies, that may have an adverse effect on the liquidity, market value and regulatory characteristics of the classes so rated. Neither the depositor nor any other person or entity will have any duty to notify you if any such other rating organization issues, or delivers notice of its intention to issue, unsolicited ratings on one or more classes of certificates after the date of this free writing prospectus. In no event will ratings confirmation from any such other rating organization (except insofar as the matter involves a loan combination and such other rating organization is hired to rate securities backed by one or more of the relatedpari passu companion loans) be a condition to any action, or the exercise of any right, power or privilege by any person or entity, under the pooling and servicing agreement. See “Risk Factors” and “Ratings” in this free writing prospectus and “Ratings” in the attached prospectus. The ratings of the offered certificates may be withdrawn or lowered, the offered certificates may receive an unsolicited rating, or the Securities and Exchange Commission may determine that any or all of Fitch Ratings, Inc., Kroll Bond Rating Agency, Inc. and Moody’s Investors Service, Inc. no longer qualifies as a “nationally recognized statistical rating organization” or is no longer qualified to rate the offered certificates, any one of which events may have an adverse effect on the liquidity, market value and regulatory characteristics of the offered certificates. | ||||
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Legal Investment | No class of the offered certificates will constitute “mortgage related securities” for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended. | |||
If your investment activities are subject to legal investment laws and regulations, regulatory capital requirements, or review by regulatory authorities, then you may be subject to restrictions on investment in the offered certificates. You should consult your own legal advisors for assistance in determining the suitability of and consequences to you of the purchase, ownership, and sale of the offered certificates. | ||||
As of the closing date, the issuing entity will not be required to register as an investment company under the Investment Company Act of 1940, as amended. The issuing entity will be relying upon an exclusion or exemption under the Investment Company Act of 1940, as amended contained in Section 3(c)(5) of the Investment Company Act of 1940, as amended or Rule 3a-7 under Investment Company Act of 1940, as amended, although there may be additional exclusions or exemptions available to the issuing entity. The issuing entity is being structured so as not to constitute a “covered fund” for purposes of the Volcker Rule under the Dodd-Frank Wall Street Reform and Consumer Protection Act. | ||||
See “Legal Investment” in this free writing prospectus and in the accompanying prospectus. | ||||
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RISK FACTORS
You should carefully consider the risks described below and those described in the accompanying prospectus under “Risk Factors” before making an investment decision. Your investment in the offered certificates will involve some degree of risk. If any of the following risks are realized, your investment could be materially and adversely affected. Distributions on the offered certificates will depend on payments received on, and other recoveries with respect to, the mortgage loans, and, therefore, you should carefully consider the risk factors relating to the mortgage loans and the mortgaged properties in assessing the risks related to the performance of the offered certificates.
The risks and uncertainties described below are not the only ones relating to your certificates. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair your investment. If any of the following events or circumstances identified as risks actually occur or materialize, your investment could be materially and adversely affected. This free writing prospectus also contains forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks described below and elsewhere in this free writing prospectus and the accompanying prospectus. In connection with the information presented in this free writing prospectus relating to risks that may relate to certain of the mortgage loans or the mortgage loans in general, examples are sometimes given with respect to a particular risk and a particular mortgage loan. However, the fact that examples are given should not be interpreted as meaning that such examples reflect all of the mortgage loans in the trust to which such risk is applicable.
Risks Related to the Offered Certificates
The Certificates May Not Be a Suitable Investment for You
The certificates are not suitable investments for all investors. In particular, you should not purchase any class of certificates unless you understand and are able to bear the prepayment, credit, liquidity and market risks associated with that class of certificates. For the reasons set forth in these “Risk Factors” and the “Risk Factors” described in the accompanying prospectus, the yield to maturity and the aggregate amount and timing of distributions on the certificates are subject to material variability from period to period and over the life of the certificates. The interaction of the foregoing factors and their effects are impossible to predict and are likely to change from time to time. As a result, an investment in the certificates involves substantial risks and uncertainties and should be considered only by sophisticated institutional investors with substantial investment experience with similar types of securities and who have conducted appropriate diligence on the mortgage loans and the certificates.
The Trust Fund’s Assets May Be Insufficient to Allow for Repayment in Full on Your Certificates
If the assets of the trust fund are insufficient to make distributions on the offered certificates, no other assets will be available for distribution of the deficiency. The offered certificates will represent interests in the trust fund only and will not be obligations of or represent interests in us, any of our affiliates or any other person or entity. The offered certificates have not been guaranteed or insured by any governmental agency or instrumentality or by any other person or entity.
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A Future Economic Downturn, a Downturn in Real Estate Markets or Credit Markets and/or Sovereign Debt Concerns May Increase Loan Defaults and/or Affect the Value and Liquidity of Your Investment
The global economy recently experienced a significant recession, as well as a severe, ongoing disruption in the credit markets, including the general absence of investor demand for and purchases of commercial mortgage-backed securities and other asset-backed securities and structured financial products. Although the United States economy, by some measurements, may be emerging from the recession, any recovery could be fragile and unsustainable, in which circumstances another, possibly more severe recession may ensue. The global recession and financial crisis resulted in increased vacancies, decreased rents and/or other declines in income from, or the value of, commercial real estate. Additionally, a contraction in the availability of commercial mortgage financing, together with higher mortgage rates and decreases in commercial real estate values, prevented many commercial mortgage borrowers from refinancing their maturing mortgage loans or selling their properties for proceeds sufficient to retire such loans. These circumstances significantly increased delinquency and default rates of securitized commercial mortgage loans for a period of time, with defaults occurring throughout the United States. In addition, the declines in commercial real estate values resulted in reduced borrower equity, which circumstances gave borrowers less incentive to cure delinquencies and avoid foreclosure. Those declines in value thus tended to result in lower recoveries and greater losses upon any foreclosure sale or other liquidation. Defaults, delinquencies and losses further decreased property values, thereby resulting in additional defaults by commercial mortgage borrowers, further credit constraints, further declines in property values and further adverse effects on the perception of the value of commercial mortgage-backed securities. Although commercial mortgage lenders have made financing more available in recent years, some commercial real estate markets continue to experience weakness, and further, financing availability remains limited in some respects and declines may occur in real estate values.
Furthermore, the global financial markets have recently experienced increased volatility due to uncertainty surrounding the level and sustainability of the sovereign debt of various countries. Much of this uncertainty has related to certain countries, including Greece, Ireland, Spain, Portugal and Italy, which participate in the European Monetary Union and whose sovereign debt is generally denominated in euros, the common currency shared by members of that union. In addition, some economists, observers and market participants have expressed concerns regarding the sustainability of the monetary union and the common currency in their current form. Concerns regarding sovereign debt may spread to other countries at any time. In particular, the pace of progress, or the lack of progress, of federal statutory debt limit, budget and deficit reduction talks in the United States—as well as any accompanying interruptions to government functions and services—may cause continued volatility. For example, the United States government has nearly reached its borrowing limit in the past and, if Congress had not increased the borrowing limit, the United States government might have had insufficient funding to meet its financial obligations. Failure of the United States government to resolve a similar situation in any future instance could have a significant negative effect on the economy and could lead to further downgrades of the United States’ sovereign debt rating. Furthermore, many state and local governments in the United States are experiencing, and are expected to continue to experience, severe budgetary strain. One or more states could default on their debt, or one or more significant local governments could default on their debt or seek relief from their debt under the U.S. bankruptcy code or by agreement with their creditors. For instance, the City of Detroit, Michigan was the subject of proceedings under chapter 9 of the U.S. bankruptcy code. Any or all of the circumstances described above may lead to further
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volatility in or disruption of the credit markets at any time. Moreover, other types of events may affect financial markets, such as war, revolt, insurrection, armed conflict, terrorism, political crisis, natural disasters and man-made disasters.
Investors should note that economic conditions, market conditions, and conditions in the commercial real estate and mortgage markets may adversely affect the performance of the mortgage loans and the performance of the certificates. You should be aware in particular that:
· | such circumstances may result in substantial delinquencies and defaults on the mortgage loans and adversely affect the amount of liquidation proceeds the trust fund would realize in the event of foreclosures and liquidations; |
· | defaults on the mortgage loans may occur in large concentrations over a period of time, which might result in rapid declines in the value of your certificates; |
· | notwithstanding that the mortgage loans were recently underwritten and originated, the values of the related mortgaged properties may have declined since the mortgage loans were originated and may decline following the issuance of the certificates and such declines may be substantial and occur in a relatively short period following the issuance of the certificates; and such declines may or may not occur for reasons largely unrelated to the circumstances of the particular property; |
· | if you determine to sell your certificates, you may be unable to do so or you may be able to do so only at a substantial discount from the price you paid; this may be the case for reasons unrelated to the then-current performance of the certificates or the mortgage loans; and this may be the case within a relatively short period following the issuance of the certificates; |
· | if the mortgage loans default, then the yield on your investment may be substantially reduced notwithstanding that liquidation proceeds may be sufficient to result in the repayment of the principal of and accrued interest on your certificates; an earlier than anticipated repayment of principal on any of the mortgage loans (even in the absence of losses) in the event of a default in advance of the related maturity date would tend to shorten the weighted average period during which you earn interest on your investment; and a later than anticipated repayment of principal on any of the mortgage loans (even in the absence of losses) in the event of a default upon the related maturity date would tend to delay your receipt of principal and the interest on your investment may be insufficient to compensate you for that delay; |
· | even if liquidation proceeds received on defaulted mortgage loans are sufficient to cover the principal and accrued interest on those mortgage loans, the trust fund may experience losses in the form of special servicing fees, liquidation fees and other expenses (including indemnities), and you may bear losses as a result, or your yield may be adversely affected by such losses; |
· | the time periods to resolve defaulted mortgage loans may be long, and those periods may be further extended because of borrower bankruptcies and related litigation; and this may be especially true in the case of mortgage loans made to borrowers that have, or whose affiliates have, substantial debts other than the mortgage loan, including related subordinate or mezzanine financing. See “—If any Master Servicer or any Special Servicer Purchases Certificates or Has Investments Related to a Borrower or Other Person, a Conflict of Interest May Arise Between Its Own Interests and Its Duties to the Trust Fund” in this free writing prospectus; |
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· | some participants in the commercial mortgage-backed securities markets have previously sought permission from the Internal Revenue Service (the “IRS”) to allow a purchaser of a mortgaged property acquired in respect of a mortgage loan held by a REMIC to assume the extinguished debt in connection with a purchase of that property; if such permission is ever granted and the applicable special servicer pursues such a resolution strategy, then the receipt of proceeds of a foreclosure property would be delayed for an extended period; and this may occur when it would be in your best interest for the property to be sold for cash, even at a lesser price, with the proceeds distributed to certificateholders; |
· | trading activity associated with indices of commercial mortgage-backed securities may also drive spreads on those indices wider than spreads on commercial mortgage-backed securities, thereby resulting in a decrease in value of such commercial mortgage-backed securities, including your certificates, and spreads on those indices may be affected by a variety of factors, and may or may not be affected for reasons involving the commercial real estate markets and may be affected for reasons that are unknown and cannot be discerned; and |
· | even if you intend to hold your certificates, depending on your circumstances, you may be required to report declines in the value of your certificates, and/or record losses, on your financial statements or regulatory or supervisory reports, and/or repay or post additional collateral for any secured financing, hedging arrangements or other financial transactions that you have entered into that are backed by or make reference to your certificates, in each case as if your certificates were to be sold immediately. |
Any future economic downturn may lead to increased vacancies, decreased rents or other declines in income from, or the value of, commercial, multifamily and manufactured housing community real estate, which would likely have an adverse effect on commercial mortgage-backed securities that are backed by loans secured by such commercial, multifamily and manufactured housing community real estate and thus affect the value and/or liquidity of such commercial mortgage-backed securities. We cannot assure you that future dislocations in the commercial mortgage-backed securities market will not occur. Any future economic downturn may adversely affect the financial resources of the related borrower under a mortgage loan and may result in the inability of the related borrower to make principal and interest payments on, or refinance, the outstanding debt when due or to sell the related mortgaged properties for an aggregate amount sufficient to pay off the outstanding debt when due. In the event of a default by a borrower under a mortgage loan, the trust may suffer a partial or total loss with respect to the certificates. Any delinquency or loss on the related mortgaged properties may have an adverse effect on the distributions of principal and interest received by holders of the certificates.
Even if commercial mortgage-backed securities are performing as anticipated, the value of such commercial mortgage-backed securities in the secondary market may nevertheless decline as a result of a deterioration in general market conditions for other asset-backed securities or structured products. Trading activity associated with commercial mortgage-backed securities indices may also drive spreads on those indices wider than spreads on commercial mortgage-backed securities, thereby resulting in a decrease in value of such commercial mortgage-backed securities.
Market Considerations and Limited Liquidity
Your certificates will not be listed on any national securities exchange or traded on any automated quotation systems of any registered securities association, and there is currently
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no secondary market for your certificates. While we have been advised by the underwriters that they currently intend to make a market in the certificates, the underwriters have no obligation to do so, any market-making may be discontinued at any time, and we cannot assure you that an active secondary market for the certificates will develop. Accordingly, you may not have an active or liquid secondary market for your certificates. Lack of liquidity could result in a substantial decrease in the market value of your certificates. The market value of your certificates also may be affected by many other factors, including the then-prevailing interest rates and market perceptions of risks associated with commercial mortgage lending. No representation is made by any person or entity as to what the market value of any certificate will be at any time. Furthermore, you should be aware that the market for securities of the same type as the certificates has in the past been volatile and offered very limited liquidity.
The market value of the certificates can decline even if those certificates and the mortgage loans are performing at or above your expectations. The market value of the certificates will be sensitive to fluctuations in current interest rates. However, a change in the market value of the certificates may be disproportionately impacted by upward or downward movement in current interest rates.
The market value of the certificates will also be influenced by the supply of and demand for commercial mortgage-backed securities generally. The supply of commercial mortgage-backed securities will depend on, among other things, the amount of commercial mortgage loans, whether newly originated or held in portfolio, that are available for securitization. A number of factors will affect investors’ demand for commercial mortgage-backed securities, including:
· | the availability of alternative investments that offer higher yields or are perceived as being a better credit risk, having a less volatile market value or being more liquid; |
· | legal and other requirements and restrictions that prohibit a particular entity from investing in commercial mortgage-backed securities, limit the amount or types of commercial mortgage-backed securities that it may acquire or require it to maintain increased capital or reserves as a result of its investment in commercial mortgage-backed securities; |
· | accounting standards that may affect an investor’s characterization or treatment of an investment in commercial mortgage-backed securities for financial reporting purposes; |
· | increased regulatory compliance burdens imposed on commercial mortgage-backed securities or securitizations generally, or on classes of securitizers, that may make securitization a less attractive financing option for commercial mortgage loans; |
· | investors’ perceptions regarding the commercial real estate markets, which may be adversely affected by, among other things, a decline in real estate values or an increase in defaults and foreclosures on mortgage loans secured by income producing properties; |
· | investors’ perceptions regarding the capital markets in general, which may be adversely affected by political, social and economic events completely unrelated to the commercial real estate markets; and |
· | the impact on demand generally for commercial mortgage-backed securities as a result of the existence or cancellation of government-sponsored economic programs. |
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We make no representations as to the proper characterization of the offered certificates for legal investment, financial institution regulatory, financial reporting or other purposes, as to the ability of particular investors to purchase the offered certificates under applicable legal investment or other restrictions or as to the consequences of an investment in the offered certificates for such purposes or under such restrictions. However, the following are examples of statutory and regulatory developments that may adversely affect the ability of particular investors to hold or acquire commercial mortgage-backed securities or the consequences to them of an investment in commercial mortgage-backed securities and, thus, the ability of investors in the offered certificates to resell their certificates in the secondary market:
· | Effective January 1, 2014, EU Regulation 575/2013 (the “CRR”) imposes on European Economic Area (“EEA”) credit institutions and investment firms (and their consolidated affiliates) (each an “Affected Investor”) investing in securitizations issued on or after January 1, 2011, or in securitizations issued prior to that date where new assets are added or substituted after December 31, 2014: (a) a requirement (the “Retention Requirement”) that the originator, sponsor or original lender of such securitization has explicitly disclosed that it will retain, on an ongoing basis, a material net economic interest which, in any event, shall not beless than 5% in the transaction; and (b) a requirement (the “Due Diligence Requirement”) that the Affected Investor has undertaken certain due diligence in respect of the securitization and the underlying exposures and has established procedures for monitoring them on an ongoing basis. National regulators in EEA member states impose penal risk weights on securitization investments in respect of which the Retention Requirement or the Due Diligence Requirement has not been satisfied in any material respect by reason of the negligence or omission of the Affected Investor. Requirements similar to the Retention Requirement and the Due Diligence Requirement (the “Similar Requirements”): (i) apply to investments in securitizations by investment funds managed by EEA investment managers subject to EU Directive 2011/61/EU (the Alternative Investment Fund Managers Directive) and by EEA insurance and reinsurance undertakings; and (ii) subject to the adoption of certain secondary legislation, will apply to investments in securitizations by EEA undertakings for collective investment in transferable securities. None of the originators, the sponsors, the depositor or the issuing entity intends to retain a material net economic interest in the securitization constituted by the issue of the certificates in accordance with Retention Requirement or to take any other action which may be required by prospective investors for the purposes of their compliance with Retention Requirement, the Due Diligence Requirement or Similar Requirements. Consequently, the certificates may not be a suitable investment for Affected Investors or the other types of EEA regulated investors mentioned above. As a result, the price and liquidity of the certificates in the secondary market may be adversely affected. This could adversely affect your ability to transfer certificates or the price you may receive upon your sale of certificates. |
· | Section 939A of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires the U.S. federal banking agencies to modify their existing regulations to remove any reliance on credit ratings. As a general rule, national banks are permitted to invest only in “investment grade” instruments, which under pre-existing regulations has been determined based on the credit ratings assigned to these instruments. These national bank investment-grade standards are incorporated into statutes and regulations governing the investing authority of most state banks, and thus most state banks are required to adhere to these same investment grade standards. In June 2012, the regulator of national banks (the Office of the |
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Comptroller of the Currency) revised its regulatory definition of “investment grade” to require a bank’s determination regarding whether “the issuer of a security has adequate capacity to meet financial commitments under the security for the projected life of the asset or exposure.” While national banks may continue to consider credit ratings, they may not rely exclusively on such ratings and must conduct separate due diligence to confirm the investment grade of the instruments. These changes became fully effective January 1, 2013. Likewise, in August 2012 the federal banking regulators adopted amendments to the market risk capital regulations to reflect the appropriate capital treatment of debt and securitization positions without reliance on the credit ratings assigned to those instruments; these amendments were also effective January 1, 2013 and may increase the costs or otherwise adversely affect the ability of banks, thrifts, and their holding companies and affiliates to invest in such instruments. |
· | Section 939A of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) requires that federal banking agencies amend their regulations to remove references to or reliance upon credit ratings including but not limited to those found in the federal banking agencies’ risk-based capital guidelines regulations. New regulations were issued by the banking regulators in July 2013 and began phasing in as early as January 1, 2014; these regulations implement the increased capital requirements established under the Basel Accord. These new capital regulations eliminate reliance on credit ratings and otherwise alter, and in most cases increase, the capital requirements imposed on depository institutions and their holding companies, including with respect to ownership of asset-backed securities such as commercial mortgage-backed securities. As a result of these new regulations, investments in commercial mortgage-backed securities by depository institutions and their holding companies may result in greater capital charges to these financial institutions, and these new regulations may otherwise adversely affect the treatment of commercial mortgage-backed securities for their regulatory capital purposes. |
· | The Issuing Entity will be relying on an exclusion or exemption under the Investment Company Act of 1940, as amended (the “Investment Company Act”) contained in Section 3(c)(5) of the Investment Company Act or Rule 3a-7 under the Investment Company Act, although there may be additional exclusions or exemptions available to the Issuing Entity. The Issuing Entity was structured so as not to constitute a “covered fund” for purposes of Section 619 of the Dodd-Frank Act (such statutory provision, the “Volcker Rule”). The Volcker Rule generally prohibits “banking entities” (which is broadly defined to include U.S. banks and bank holding companies and many non-U.S. banking entities, together with their respective subsidiaries and other affiliates) from (i) engaging in proprietary trading, (ii) acquiring or retaining an ownership interest in or sponsoring a “covered fund” and (iii) entering into certain relationships with such funds. The Volcker Rule became effective on July 21, 2012, and final regulations implementing the Volcker Rule were adopted on December 10, 2013. Conformance with the Volcker Rule and its implementing regulations is required by July 21, 2015 (or by July 21, 2016 in respect of investments in and relationships with “covered funds” that were in place prior to December 31, 2013, subject to the possibility of a one-year extension). In the interim, banking entities must make good-faith efforts to conform their activities and investments to the Volcker Rule. Under the Volcker Rule, unless otherwise jointly determined otherwise by specified federal regulators, a “covered fund” does not include an issuer that may rely on an exclusion or exemption from the definition of “investment company” under the Investment Company Act other than the exclusions contained in Section 3(c)(1) |
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and Section 3(c)(7) of the Investment Company Act. The general effects of the Volcker Rule remain uncertain. Any prospective investor in the certificates, including a U.S. or foreign bank or a subsidiary or other affiliate thereof, should consult its own legal advisors regarding such matters and other effects of the Volcker Rule. |
· | The Financial Accounting Standards Board has adopted changes to the accounting standards for structured products. These changes, or any future changes, may affect the accounting for entities such as the issuing entity, could under certain circumstances require an investor or its owner generally to consolidate the assets of the issuing entity in its financial statements and record third parties’ investments in the trust fund as liabilities of that investor or owner or could otherwise adversely affect the manner in which the investor or its owner must report an investment in commercial mortgage-backed securities for financial reporting purposes. |
· | For purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended, commonly known as SMMEA, no class of the offered certificates will constitute “mortgage related securities”. |
Accordingly, all prospective investors in the offered certificates should consider the possible effects of legal investment, regulatory capital, accounting and other restrictions and requirements on the liquidity and value of their certificates, whether or not those requirements and restrictions would apply in connection with their initial investments in the offered certificates. In any event, all prospective investors whose investment activities are subject to legal investment laws and regulations, regulatory capital requirements, or review by regulatory authorities should consult with their own legal, accounting and other advisors in determining whether, and to what extent, the offered certificates will constitute legal investments for them or are subject to investment or other restrictions, unfavorable accounting treatment, capital charges or reserve requirements.
If you decide to sell your certificates, your ability to sell those certificates will depend on, among other things, whether and to what extent a secondary market then exists for your certificates, and you may have to sell at a discount from the price you paid for reasons unrelated to the performance of your certificates or the mortgage loans. Pricing information regarding your certificates may not be generally available on an ongoing basis or on any particular date.
The primary source of ongoing information regarding the certificates, including information regarding the status of the mortgage loans and any credit support for the certificates, will be the periodic reports delivered to you. See “Description of the Offered Certificates—Reports to Certificateholders; Available Information” in this free writing prospectus and “Description of the Certificates—Reports to Certificateholders” in the accompanying prospectus. We cannot assure you that any additional ongoing information regarding the certificates will be available through any other source. The limited nature of the available information in respect of the certificates may adversely affect its liquidity, even if a secondary market for the certificates does develop.
We are not aware of any source through which pricing information regarding the certificates will be generally available on an ongoing basis or on any particular date.
In addition, you will generally have no redemption rights, and, except insofar as the certificates may be retired early as a result of prepayments or dispositions of mortgage loans, the certificates will be subject to early retirement only under certain specified circumstances described in this free writing prospectus. See “Description of the Offered Certificates—Termination of the Pooling and Servicing Agreement” in this free writing
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prospectus and “Description of the Certificates—Termination” in the accompanying prospectus.
Subordination of the Class A-S, B and C Regular Interests and Class D Certificates Will Affect the Timing of Distributions and the Application of Losses on the Class A-S, B, C, PEX and D Certificates
As described in this free writing prospectus, if your certificates are Class A-S, B, C, PEX or D certificates, your rights to receive distributions of amounts collected or advanced on or in respect of the mortgage loans will generally be subordinated to those of the holders of the Class A-1, A-2, A-3, A-4, A-SB, X-A and X-B certificates and the Class A-4FX regular interest (and, therefore, the Class A-4FL and A-4FX certificates and, if your certificates are Class B, C or D certificates, to those of the holders of the Class A-S certificates (and the holders of the Class PEX certificates as holders of the Class PEX component of the Class A-S regular interest) and, if your certificates are Class C or D certificates, to those of the holders of the Class B certificates (and the holders of the Class PEX certificates as holders of the Class PEX component of the Class B regular interest) and, if your certificates are Class D certificates, to those of the holders of the Class C certificates (and the holders of the Class PEX certificates as holders of the Class PEX component of the Class C regular interest). See “Description of the Offered Certificates” in this free writing prospectus. As a result, you will generally bear the effects of losses on the mortgage loans and unreimbursed expenses of the trust fund before the holders of those other classes of certificates. See “Description of the Offered Certificates—Distributions” in this free writing prospectus.
The Yields to Maturity on the Offered Certificates Depend on a Number of Factors that Cannot Be Predicted with any Certainty
The yield on your offered certificates will depend on, among other things—
· | the price you paid for your offered certificates, and |
· | the rate, timing and amount of distributions on your offered certificates. |
The rate, timing and amount of distributions on your offered certificates will depend on—
· | the pass-through rate for, and the other distribution terms of, your offered certificates, |
· | the rate and timing of payments and other collections of principal on the mortgage loans, which in turn will be affected by amortization schedules, the dates on which balloon payments are due, any incentives for a borrower to repay its mortgage loan by an anticipated repayment date and the rate and timing of principal prepayments and other unscheduled collections, including for this purpose, any prepayments occurring by application of earnout reserves or performance holdback amounts (see “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans—Voluntary Prepayment and Defeasance Provisions” and the footnotes to Annex A-1 to this free writing prospectus for more detail) if leasing criteria or other conditions are not satisfied, the exercise of a purchase option with respect to a mortgaged property or portion thereof by a tenant or other party or sales or other releases of a mortgaged property or a portion thereof (including an outparcel) that can result in prepayments of principal, collections made in connection with liquidations of mortgage loans due to defaults, casualties or condemnations affecting the mortgaged properties (including prepayment of the entire loan following significant casualties), or purchases, sales or other removals of mortgage loans from the trust fund, |
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· | the rate and timing of defaults, and the severity of losses, if any, on the mortgage loans, |
· | the rate and timing of reimbursements made to the applicable master servicer, the applicable special servicer or the trustee for nonrecoverable advances and/or for advances previously made in respect of a worked-out mortgage loan that are not repaid at the time of the workout, |
· | the rate, timing, severity and allocation of other shortfalls and expenses that reduce amounts available for distribution on the certificates, and |
· | servicing decisions with respect to the mortgage loans. |
Without limiting the generality of the statements made in the prior paragraphs, if your certificates are Class A-SB certificates, the rate and timing of principal distributions on your certificates will depend in part (i) on the Class A-SB planned principal balances and the extent to which they are achieved from time to time and, (ii) because such class is (subject to available funds and the distribution priorities) entitled to the entire principal distribution amount after the Class A-1, A-2, A-3 and A-4 certificates and the Class A-4FX regular interest are fully retired, on the period of time during which the Class A-1, A-2, A-3 and A-4 certificates and the Class A-4FX regular interest remain outstanding. In addition, the holders of the Class A-1, A-2, A-3 or A-4 certificates or the Class A-4FX regular interest (and, therefore, the holders of the Class A-4FL and A-4FX certificates) may receive principal distributions on a date when the Class A-SB certificates remain outstanding.
The Class X-A and X-B certificates will not be entitled to distributions of principal but instead will accrue interest on their notional amount. The yield to investors on the Class X-A certificates will be highly sensitive to the rate and timing of principal payments, including voluntary and involuntary prepayments, on the mortgage loans to the extent such payments are allocated to the Class A-1, A-2, A-3, A-4 or A-SB certificates or the Class A-4FX or A-S regular interests and the default and loss experience on the mortgage loans to the extent that losses reduce the principal balances of the Class A-1, A-2, A-3, A-4 or A-SB certificates or the Class A-4FX or A-S regular interests. The yield to investors on the Class X-B certificates will be highly sensitive to the rate and timing of principal payments, including voluntary and involuntary prepayments, on the mortgage loans to the extent such prepayments are allocated to the Class B and C regular interests and the default and loss experience of the mortgage loans to the extent that losses reduce the principal balances of the Class B and C regular interests. Investors in the Class X-A and X-B certificates should fully consider the associated risks, including the risk that a rapid rate of amortization, prepayment or other liquidation of the mortgage loans or principal losses on the mortgage loans could result in the failure of such investors to recoup fully their initial investments.
See “—Incorrect Assumptions Regarding Principal Payments and Prepayments May Lead to a Lower than Expected Yield on Your Investment”, “—Frequent and Early Occurrence of Borrower Delinquencies and Defaults May Adversely Affect Your Investment” and “Yield and Maturity Considerations” in this free writing prospectus and “Risk Factors—Optional Early Termination of the Trust Fund May Result in an Adverse Impact on Your Yield or May Result in a Loss” and “Yield Considerations” in the accompanying prospectus.
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Incorrect Assumptions Regarding Principal Payments and Prepayments May Lead to a Lower than Expected Yield on Your Investment
In deciding whether to purchase any offered certificates, you should make an independent decision as to the appropriate assumptions regarding principal payments and prepayments on the mortgage loans to be used.
If you purchase your offered certificates at a premium, and if payments and other collections of principal on the mortgage loans occur at a rate faster than you anticipated at the time of your purchase, then your actual yield to maturity may be lower than you had assumed at the time of your purchase. Conversely, if you purchase your certificates at a discount, and if payments and other collections of principal on the mortgage loans occur at a rate slower than you anticipated at the time of your purchase, then your actual yield to maturity may be lower than you had assumed at the time of your purchase. Insofar as the principal of your certificates is repaid, you may not be able to reinvest the amounts that you receive in an alternative investment with a yield comparable to the yield on your certificates. Conversely, insofar as the principal of your certificate remains outstanding, you will be unable to reinvest that amount in an alternative investment having a yield higher than the yield on your certificates.
Additionally, under certain circumstances, certain mortgage loans permit or require prepayments, in whole or in part, despite lock-out periods that may otherwise apply. See “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans—Voluntary Prepayment and Defeasance Provisions” and “—Certain Terms of the Mortgage Loans—Partial Release and/or Partial Defeasance and/or Substitution and/or Severance/Partial Assumption” and Annex A-1 (including the related footnotes) to this free writing prospectus for the prepayment restrictions and any such permitted prepayments for each mortgage loan. Generally no yield maintenance charge or prepayment premium is required for partial or full prepayments in connection with a casualty or condemnation (regardless of whether the source of such prepayment includes funds of the borrower in addition to the casualty or condemnation proceeds) unless, in the case of certain of the mortgage loans, an event of default has occurred and is continuing. See “Yield and Maturity Considerations” in this free writing prospectus.
Generally speaking, a borrower is less likely to prepay a mortgage loan if prevailing interest rates are at or above the interest rate borne by its mortgage loan. On the other hand, a borrower is more likely to prepay if prevailing rates fall significantly below the interest rate borne by its mortgage loan. Borrowers are less likely to prepay mortgage loans that provide for lock-out periods, prepayment premiums or yield maintenance charges, to the extent enforceable, than otherwise identical mortgage loans without these provisions, with shorter lock-out periods or with lower or no prepayment premiums and/or yield maintenance charges.
Additionally, we cannot assure you that each borrower will have the ability to repay the remaining principal amount of its mortgage loan on the related maturity date or anticipated repayment date or that any borrower with an interest-only period will have the ability to make amortizing payments following the expiration of the initial interest-only period. Failure to repay a mortgage loan on or before its anticipated repayment date, if any, would not constitute a default entitling the lender to accelerate the maturity of such mortgage loan. The inability to make the required payments of principal would have a similar economic effect as an extension of the related maturity date or anticipated repayment date. See “—Risks Related to the Mortgage Loans—If a Borrower is Unable To Repay Its Loan on Its Maturity Date, You May Experience a Loss or Delay in Distributions on Your Certificates” in this free writing prospectus and “Risk Factors—Optional Early Termination of the Trust
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Fund May Result in an Adverse Impact on Your Yield or May Result in a Loss” and “Yield Considerations” in the accompanying prospectus.
Frequent and Early Occurrence of Borrower Delinquencies and Defaults May Adversely Affect Your Investment
If you calculate the anticipated yield of your offered certificates based on a rate of default or amount of losses lower than that actually experienced on the mortgage loans and those additional losses result in a reduction of the total distributions on, or the principal balance of, your offered certificates, your actual yield to maturity will be lower than expected and could be negative under certain extreme scenarios. The timing of any loss on a liquidated mortgage loan that results in a reduction of the total distributions on or the principal balance of your offered certificates will also affect the actual yield to maturity of your offered certificates, even if the rate of defaults and severity of losses are consistent with your expectations. In general, the earlier a loss is borne by you, the greater the effect on your yield to maturity.
Delinquencies on the mortgage loans, if the delinquent amounts are not advanced, may result in shortfalls in distributions of interest and/or principal to the holders of the offered certificates for the current month. Furthermore, no interest will accrue on this shortfall during the period of time that the payment is delinquent. Additionally, in instances where the principal portion of any balloon payment scheduled with respect to a mortgage loan is collected by the applicable master servicer following the end of the related collection period, no portion of the principal received on such payment will be passed through for distribution to the certificateholders until the subsequent distribution date, which may result in shortfalls in distributions of interest to the holders of the offered certificates in the following month. Furthermore, in such instances no provision is made for the applicable master servicer or any other party to cover any such interest shortfalls which may occur as a result. In addition, if debt service advances and/or servicing advances are made with respect to a mortgage loan after a default and the related mortgage loan is thereafter worked out under terms that do not provide for the repayment of those advances in full at the time of the workout, then any reimbursements of those advances prior to the actual collection of the amount for which the advance was made may also result in shortfalls in distributions of principal to the holders of the offered certificates with principal balances for the current month. Even if losses on the mortgage loans are not allocated to a particular class of offered certificates with principal balances, the losses may affect the weighted average life and yield to maturity of that class of offered certificates. In the case of any material monetary or material non-monetary default, the applicable special servicer may accelerate the maturity of the related mortgage loan, which could result in an acceleration of principal distributions to the certificateholders. The applicable special servicer may also extend or modify a mortgage loan, which could result in a substantial delay in principal distributions to the certificateholders. In addition, losses on the mortgage loans, even if not allocated to a class of offered certificates with principal balances, may result in a higher percentage ownership interest evidenced by those offered certificates in the remaining mortgage loans than would otherwise have resulted absent the loss. The consequent effect on the weighted average life and yield to maturity of the offered certificates will depend upon the characteristics of those remaining mortgage loans in the trust fund.
The Payment of Expenses of the Trust Fund May Reduce the Amount of Distributions on Your Offered Certificates
As described in this free writing prospectus, various fees, out-of-pocket expenses and liabilities will constitute expenses of the trust fund for which the trust fund generally is not
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entitled to reimbursement from any person or entity, including without limitation special servicing fees, workout fees, liquidation fees, trust advisor expenses, interest on debt service advances and servicing advances and payments in respect of indemnification to which the parties to the pooling and servicing agreement are entitled. The payment of such amounts will result in shortfalls in available funds and losses to be borne by the certificateholders. In general, the various classes of certificates will bear those shortfalls and losses in reverse order of distribution priority (andpro rata as among the Class A-1, A-2, A-3, A-4 and A-SB certificates and the Class A-4FX regular interest (and, therefore, the Class A-4FL and A-4FX certificates) and, as to interest, among the Class A-1, A-2, A-3, A-4, A-SB, X-A and X-B certificates and the Class A-4FX regular interest (and, therefore, the Class A-4FL and A-4FX certificates)). However, as a result of allocating trust advisor expenses to reduce principal and/or interest, holders of the Class A-1, A-2, A-3, A-4, A-SB and D certificates, and the Class A-4FX, A-S, B and C regular interests (and, therefore, the Class A-4FL, A-4FX, A-S, B, C and/or PEX certificates, as applicable) may suffer a permanent loss of principal and/or, solely in the case of the Class D certificates and the Class B and C regular interests (and, therefore, the Class B, C and/or PEX certificates, as applicable), interest even though the aggregate principal balance of more subordinate class or classes of certificates has not been reduced to zero. See “Description of the Offered Certificates—Reductions of Interest Entitlements and the Principal Distribution Amount in Connection with Certain Trust Advisor Expenses” in this free writing prospectus and “Risk Factors—Additional Compensation and Certain Reimbursements to the Servicer Will Affect Your Right to Receive Distributions” in the accompanying prospectus.
You Will Have Limited Ability To Control the Servicing of the Mortgage Loans and the Parties with Control Over the Servicing of the Mortgage Loans May Have Interests that Conflict with Your Interests
Generally, as a holder of any of the offered certificates, you will not have any rights to participate in decisions with respect to the administration of the trust fund. Decisions relating to the administration of the trust fund will generally be made by other parties, whose decisions (even if they are made in the best interests of the certificateholders as a collective whole) may differ from the decisions that you would have made and may be contrary to your interests. Your offered certificates generally do not entitle you to vote on matters related to the servicing of the mortgage loans, except with respect to certain specified matters set forth in the pooling and servicing agreement, and you have no rights to vote on any servicing matters related to any non-servicedpari passu mortgage loan.
In addition, while there is a trust advisor with certain obligations in respect of reviewing the compliance of each special servicer with certain of its obligations under the pooling and servicing agreement, the trust advisor has no consultation rights with respect to actions by either special servicer during any subordinate control period, has no consent or control rights with respect to any mortgage loan or any non-serviced loan combination at any time, and, in the case of each non-serviced loan combination, has no consultation rights whatsoever. In addition, the trust advisor has only the limited obligations and duties set forth in the pooling and servicing agreement, and has no fiduciary or other duty to act on behalf of the certificateholders or the trust fund or in the best interest of any particular certificateholder. It is not intended that the trust advisor act as a surrogate for the certificateholders but only that it perform the services expressly provided for under the pooling and servicing agreement. Investors should not rely on the trust advisor to affect either special servicer’s actions under the pooling and servicing agreement or to monitor the actions of the subordinate class representative or either special servicer, other than to the limited extent specifically required in respect of certain actions of such special servicer at certain prescribed times under the pooling and servicing agreement. Investors may disagree
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with the trust advisor’s determination that no material violation of a special servicer’s compliance with its obligations under the pooling and servicing agreement has occurred but will have no recourse other than the limited rights with respect to the removal of the trust advisor and/or the applicable special servicer pursuant to the procedures outlined in the pooling and servicing agreement and described in this free writing prospectus. In addition, if the trust advisor is removed at the direction of investors or otherwise, the replacement trust advisor will not redetermine the applicable special servicer’s compliance with the pooling and servicing agreement with respect to actions already reviewed by the predecessor trust advisor.
In certain limited circumstances, certificateholders have the right to vote on matters affecting the trust. In some cases these votes are by certificateholders taken as a whole, and in others the vote is by class. In all cases, voting is based on the outstanding principal balance, which is reduced by realized losses and, under certain circumstances, appraisal reduction amounts. These voting provisions may limit your ability to protect your interests with respect to matters submitted to a vote of certificateholders. See “Description of the Offered Certificates—Voting Rights”, “Transaction Parties” and “Servicing of the Mortgage Loans and Administration of the Trust Fund” in this free writing prospectus.
You Will Have No Control Over the Servicing of the Brickyard Square Loan Combination and the Bella Luna / San Lucas Loan Combination
Each of the Brickyard Square mortgage loan and the Bella Luna / San Lucas mortgage loan is secured by a mortgaged property which also secures apari passu companion loan that is not an asset of the trust fund. The Brickyard Square loan combination will be serviced and administered by an other master servicer and, if applicable, specially serviced by an other special servicer, under the WFCM 2015-C28 pooling and servicing agreement. The Bella Luna / San Lucas loan combination will be serviced and administered by an other master servicer and, if applicable, specially serviced by an other special servicer, under the WFCM 2015-LC20 pooling and servicing agreement. The WFCM 2015-C28 pooling and servicing agreement and the WFCM 2015-LC20 pooling and servicing agreement each provide for a servicing arrangement that is substantially similar in all material respects (but not necessarily identical) to that under the pooling and servicing agreement relating to this securitization transaction, including the control and consultation rights granted to the related majority subordinate certificateholders and subordinate class representative (or their equivalents).
As a result, no holders of the certificates will have any control over any servicing of either the Brickyard Square mortgage loan or the Bella Luna / San Lucas mortgage loan except that the majority subordinate certificateholder under this securitization will have the right to consult with respect to certain matters, on a non-binding basis, with the related special servicer for the related pooling and servicing agreement, to the extent set forth in the related intercreditor agreement. In addition, no holder of the certificates will have any right to replace the related special servicer for any such other securitization, except that the majority subordinate certificateholder under this securitization will have the right to direct the termination of the related special servicer with respect to only the Brickyard Square loan combination or the Bella Luna / San Lucas loan combination, as applicable, if a servicer termination event (as defined under the related other pooling and servicing agreement) on the part of such special servicer occurs that affects this securitization. See “Description of the Mortgage Pool—Loan Combinations” and “Servicing of the Mortgage Loans and Administration of the Trust Fund—Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations” in this free writing prospectus.
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If any Master Servicer or any Special Servicer Purchases Certificates or Has Investments Related to a Borrower or Other Person, a Conflict of Interest May Arise Between Its Own Interests and Its Duties to the Trust Fund
The pooling and servicing agreement provides that the mortgage loans are required to be administered in accordance with the servicing standard without regard to ownership of any certificate by the applicable master servicer or the applicable special servicer or any of their respective affiliates. See “Servicing of the Mortgage Loans and Administration of the Trust Fund—General” and “Description of the Mortgage Pool—Loan Combinations” in this free writing prospectus. Each of the WFCM 2015-C28 pooling and servicing agreement and the WFCM 2015-LC20 pooling and servicing agreement provide that the Brickyard Square loan combination and the Bella Luna / San Lucas loan combination, respectively, will be administered, in accordance with a servicing standard that is substantially similar in all material respects (but not necessarily identical) to the servicing standard set forth in the pooling and servicing agreement for this transaction. See “Servicing of the Mortgage Loans and Administration of the Trust Fund—Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations” in this free writing prospectus.
Notwithstanding the foregoing, each master servicer, each subservicer, each special servicer, or any of their respective affiliates, and, as it relates to servicing and administration of any non-servicedpari passu mortgage loan, the master servicer (or related subservicer) and the special servicer with respect to any securitization of a non-servicedpari passu companion loan or any of their respective affiliates, may have interests when dealing with the mortgage loans that are in conflict with those of holders of the certificates, especially if any such party holds certificates issued pursuant to the related securitization or has financial interests in, or other financial dealings with, a borrower or a loan sponsor. Each of these relationships may create a conflict of interest.
For instance, the master servicers and the special servicers and their respective affiliates may purchase certificates. The purchase of certificates by a master servicer or a special servicer, or by an affiliate of that servicer, could cause a conflict between that servicer’s duties under the pooling and servicing agreement and the interests of that servicer (or its affiliate) as a holder of a certificate, especially to the extent that certain actions or events have a disproportionate effect on one or more classes of certificates. In addition, the master servicers, the special servicers and their respective affiliates may hold or acquirepari passu or mezzanine debt or other obligations of or interest in the borrowers under the mortgage loans, tenants or managers of the related properties or affiliates of those persons. Each of these relationships may create a conflict of interest. For instance, if a special servicer or its affiliate holds a non-offered class of certificates or mezzanine debt relating to a mortgage loan or an equity interest in a borrower under a mortgage loan, such special servicer might defer acceleration under the mortgage loan in an attempt to reduce the potential for losses allocable to its non-offered certificates, mezzanine debt or equity interest in hope of maximizing future proceeds. That action could result in less proceeds to the issuing entity than would be realized if earlier action had been taken.
National Cooperative Bank, N.A. is a mortgage loan seller and also will act as the master servicer and special servicer responsible for servicing the mortgage loans sold to the trust by National Cooperative Bank, N.A. Under these circumstances, because it is both a master servicer and special servicer and also a mortgage loan seller, National Cooperative Bank, N.A. may have interests that conflict with the interests of the holders of the certificates. However, the pooling and servicing agreement will provide that the mortgage loans are to be serviced in accordance with the servicing standard and without regard to any obligation of any mortgage loan seller to cure a breach of a representation or warranty or repurchase any mortgage loan.
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In addition, with respect to certain mortgage loans secured by residential cooperative properties, National Cooperative Bank, N.A. or an affiliate thereof may hold, now or in the future, one or more (1) loans to the related mortgage borrower that are secured, on a subordinated basis, by a mortgage lien upon a mortgaged property that also secures a mortgage loan included in the trust, (2) unsecured loans to the related mortgage borrower and/or (3) cooperative unit loans that are secured by direct equity interests in the related mortgage borrower. See “Description of the Mortgage Pool—Subordinate and/or Other Financing—Existing (Secured Financing and Mezzanine and Similar Financing)”, “—Additional Debt Financing for Mortgage Loans Secured by Residential Cooperatives” and “Transaction Parties—Affiliations and Certain Relationships Among Certain Transaction Parties” in this free writing prospectus and “Certain Legal Aspects of Mortgage Loans and Leases—Cooperative Loans” in the accompanying prospectus. Additionally, subject to the servicing standard and to the criteria described in “Servicing of the Mortgage Loans and Administration of the Trust Fund—Modifications, Waivers, Amendments and Consents” in this free writing prospectus, National Cooperative Bank, N.A. is also permitted to approve, without the consent of the subordinate class representative or any party to the pooling and servicing agreement, the incurrence of additional and / or other additional secured indebtedness by the borrowers under the residential cooperative mortgage loans, and if it so elects, to act as lender in such instances.
Furthermore, nothing in the pooling and servicing agreement or otherwise will prohibit National Cooperative Bank, N.A. from soliciting the refinance of any of the mortgage loans for which it is acting as master servicer or special servicer. In the event that National Cooperative Bank, N.A. refinances any of the mortgage loans included in the mortgage pool, an earlier than expected payoff of any such mortgage loan could occur, which would result in a prepayment, which such prepayment could have an adverse effect on the yield of the certificates. See “—The Yields to Maturity on the Offered Certificates Depend on a Number of Factors that Cannot Be Predicted with any Certainty” in this free writing prospectus.
Furthermore, the master servicers and the special servicers have each advised us that they intend to continue to service existing and new commercial, multifamily and manufactured housing community mortgage loans for their affiliates and for third parties, including portfolios of mortgage loans similar to the mortgage loans included in the trust fund. These other mortgage loans and the related mortgaged properties may be in the same markets as, or have owners, obligors or property managers in common with, one or more of the mortgage loans in the trust fund and the related mortgaged properties. As a result of the investments and activities described above, the interests of the master servicers, the special servicers and their respective affiliates and their other clients may differ from, and compete with, the interests of the trust fund. However, under the pooling and servicing agreement, each master servicer and each special servicer, as applicable, is required to service the mortgage loans for which it is responsible in accordance with the servicing standard, which requires such servicers to service the mortgage loans without regard to the ownership, servicing and/or management by such servicers of any other mortgage loans or real property.
Similarly, with respect to any non-servicedpari passu mortgage loan, conflicts of interest similar to those described above may arise with respect to any other master servicer, other special servicer or other subservicer with respect to the related other securitization, or any of their respective affiliates.
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Various Other Securitization-Level Conflicts of Interest May Have an Adverse Effect on Your Offered Certificates
Conflicts Between Various Classes of Certificateholders and Lenders. Pursuant to the provisions of the pooling and servicing agreement, in the case of each mortgage loan, (a) the applicable party that is responsible for performing special servicing duties with respect to that mortgage loan following a material default is given considerable latitude in determining when and how to liquidate or modify that mortgage loan, (b) one or more third parties or representatives on their behalf will be entitled (among other rights) to replace that applicable party and grant or withhold consent to proposed servicing actions involving that mortgage loan, (c) except in limited circumstances, those third parties may not include you and will consist of one or more of the holders of a class of subordinate certificates, and (d) other third parties or their representatives may also have consultation and/or approval rights with respect to various servicing matters. Those certificateholders or other parties and their respective representatives may have interests that differ, perhaps materially, from yours. For instance, a particular representative or similar party may believe that deferring enforcement of a defaulted mortgage loan will result in higher future proceeds than would earlier enforcement, whereas the interests of the trust fund may be better served by prompt action, since delay followed by a market downturn could result in less proceeds to the trust fund than would have been realized if earlier action had been taken. You should expect these certificateholders or other parties to exercise their rights and powers in a manner that they determine is appropriate in their respective sole discretion. None of them will have any liability for acting solely in its own interests. Similarly, with respect to each non-servicedpari passu mortgage loan, conflicts of interest similar to those described above may arise with respect to any other master servicer, other special servicer or other subservicer with respect to the related other securitization, or any of their respective affiliates.
Potential Conflicts of Interest of the Trust Advisor. In the normal course of its business, the trust advisor, Trimont Real Estate Advisors, Inc., and its affiliates have rendered services to, performed surveillance of, and negotiated with, numerous parties engaged in activities related to structured finance and commercial mortgage securitization. These parties may have included the depositor, the sponsors, the mortgage loan sellers, the originators, the master servicers, the special servicers, the certificate administrator, the trustee, the underwriters or the majority subordinate certificateholder or affiliates of any of those parties. Each of these relationships, to the extent they exist, may continue in the future and may involve a conflict of interest with respect to Trimont Real Estate Advisors, Inc.’s duties as trust advisor.
In addition, Trimont Real Estate Advisors, Inc. and its affiliates may in the future, in the ordinary course of their business, perform contract underwriting services and advisory services, as well as service or specially service existing and new commercial and multifamily mortgage loans for third parties, including portfolios of mortgage loans similar to the mortgage loans included in the issuing entity. The real properties securing these other mortgage loans may be in the same markets as, and compete with, the mortgaged properties securing certain of the mortgage loans that will be included in the issuing entity. Consequently, personnel of Trimont Real Estate Advisors, Inc. may perform services on behalf of the issuing entity with respect to the mortgage loans included in the issuing entity, at the same time as they are performing services on behalf of other persons with respect to other mortgage loans secured by properties that may compete with the mortgaged properties securing the mortgage loans included in the issuing entity. This may pose inherent conflicts of interest for Trimont Real Estate Advisors, Inc.
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We cannot assure you that the existence of any prior or current relationship or other relationships in the future will not impact the manner in which the trust advisor performs its duties under the pooling and servicing agreement. In addition, the trust advisor and its affiliates may have interests that are in conflict with those of certificateholders if the trust advisor or any of its affiliates holds certificates, or has financial interests in or financial dealings with a borrower or a parent of a borrower.
Although the trust advisor is required to consider the servicing standard in connection with its review of each special servicer’s activities under the pooling and servicing agreement, the trust advisor will not itself be bound by the servicing standard. In addition, although the pooling and servicing agreement will generally prohibit the trust advisor from making a principal investment in any class of certificates, that prohibition will not be construed to have been violated in connection with riskless principal transactions effected by a broker-dealer affiliate of the trust advisor pursuant to investments by an affiliate of the trust advisor if the trust advisor and such affiliate maintain policies and procedures designed to segregate personnel involved in the activities of the trust advisor under the pooling and servicing agreement from personnel involved in such affiliate’s investment activities and to prevent such affiliate and its personnel from gaining access to information regarding the trust fund and the trust advisor and its personnel from gaining access to such affiliate’s information regarding its investment activities. In addition, we cannot assure you that such policies and procedures will be effective for their intended purposes.
In connection with each non-servicedpari passu mortgage loan, the statements set forth above generally apply in a similar manner in relation to the trust advisor and its activities under the applicable other securitization servicing agreement.
Trimont Real Estate Advisors, Inc., the trust advisor, is also the trust advisor under the WFCM 2015-LC20 securitization, which governs the servicing of the Bella Luna / San Lucas loan combination.
Conflicts Between the Trust Fund and the Mortgage Loan Sellers and Their Affiliates. Conflicts of interest may arise between the trust fund, on the one hand, and the mortgage loan sellers and their affiliates that engage in the acquisition, development, operation, financing and disposition of real estate, on the other hand. Those conflicts may arise because a mortgage loan seller and its affiliates intend to continue to actively acquire, develop, operate, lease, finance and dispose of real estate-related assets in the ordinary course of their businesses. During the course of their business activities, the respective mortgage loan sellers and their affiliates may acquire, sell or lease properties, or finance or hedge loans secured by properties (or by ownership interests in the related borrower or other entities that own properties) that secure existing mortgage loans or properties that are in the same markets as the mortgaged properties. Such activities may include without limitation making or participating in any future mezzanine financing or, with respect to residential cooperative mortgage loans, other secured or unsecured financing, that is permitted under the terms of the mortgage loan documents or the pooling and servicing agreement under provisions that we described in this free writing prospectus. See “Description of the Mortgage Pool—Subordinate and/or Other Financing” and “—Additional Debt Financing For Mortgage Loans Secured by Residential Cooperatives” in this free writing prospectus and the “Summaries of the Fifteen Largest Mortgage Loans” attached as Annex A-3 to this free writing prospectus. Additionally, the proceeds of certain of the mortgage loans were used to refinance debt previously held by, or to acquire or refinance real estate for the benefit of, the related mortgage loan seller or an affiliate of a mortgage loan seller, and the mortgage loan sellers or their affiliates may have, may have had or may in the future acquire equity investments in the borrowers (or in the owners of the borrowers), tenants or mortgaged properties under or with respect to certain of the
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mortgage loans, or may be tenants at the related mortgaged properties. Such mortgage loans may contain certain terms that are more favorable to the subject borrower than would have been the case if the originating lender had not been an affiliate of the subject borrower. One or more of the mortgage loan sellers and their affiliates have had, presently have or in the future may have other business relationships with affiliates of the borrowers under the mortgage loans, such as preferential rights to make loans to or equity investments in those affiliates. In addition, with respect to certain mortgage loans, the related mortgage loan seller, an affiliate thereof or another participant in this securitization holds: (i) one or more companion loans secured by the same mortgage instrument(s) encumbering the same mortgaged property or portfolio of mortgaged properties as the related mortgage loan; and/or (ii) a mezzanine or other similar loan secured by direct or indirect equity interests in the related mortgage borrower or, with respect to certain mortgage loans secured by residential cooperative properties, National Cooperative Bank, N.A. or an affiliate thereof may, now or in the future, hold one or more (1) loans to the related mortgage borrower that are secured, on a subordinated basis, by a mortgage lien on a mortgaged property that also secures a mortgage loan included in the trust, (2) unsecured loans to the related borrower and/or (3) cooperative unit loans that are secured by direct equity interests in the related borrower. See “Description of the Mortgage Pool—Subordinate and/or Other Financing—Existing (Secured Financing and Mezzanine and Similar Financing)”, “—Loan Combinations” and “Transaction Parties—Affiliations and Certain Relationships Among Certain Transaction Parties” in this free writing prospectus and “Certain Legal Aspects of Mortgage Loans and Leases—Cooperative Loans” in the accompanying prospectus.
In addition, Rialto Mortgage Finance, LLC, a sponsor, mortgage loan seller and originator, is an affiliate of Rialto Capital Advisors, LLC, the other special servicer under the WFCM 2015-LC20 pooling and servicing agreement, which governs the servicing of the Bella Luna / San Lucas loan combination. Rialto Mortgage Finance, LLC and Rialto Capital Advisors, LLC are also affiliates of the entity that is the initial majority subordinate certificateholder under the WFCM 2015-LC20 pooling and servicing agreement and which was also appointed as the initial subordinate class representative under the WFCM 2015-LC20 pooling and servicing agreement.
In addition, it is possible that an affiliate of any of the mortgage loan sellers, each of which is a sponsor, may purchase a portion of the certificates at the time of issuance or at any time thereafter.
Under all the circumstances described above, the interests of those mortgage loan sellers and their affiliates may differ from, and compete with, the interests of the trust fund. Decisions made with respect to those interests or assets may adversely affect the amount and timing of distributions on the offered certificates.
Conflicts Between Certificateholders and Holders of Pari Passu Companion Loans. With respect to each of the Brickyard Square mortgage loan and the Bella Luna / San Lucas mortgage loan, the related mortgaged property also secures onepari passu companion loan.
With respect to the Brickyard Square mortgage loan, the related loan combination will be serviced pursuant to the pooling and servicing agreement related to the WFCM 2015-C28 securitization, and certain decisions to be made with respect to such mortgage loan may require the approval of the subordinate class representative under the WFCM 2015-C28 pooling and servicing agreement or such other party specified in the related intercreditor agreement or such other pooling and servicing agreement. As a result, you will have less control over the servicing of the Brickyard Square mortgage loan than you would have if
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such mortgage loan were being serviced by the master servicer and the special servicer pursuant to the terms of the pooling and servicing agreement for this transaction.
With respect to the Bella Luna / San Lucas mortgage loan, the related loan combination will be serviced pursuant to the pooling and servicing agreement related to the WFCM 2015-LC20 securitization, and certain decisions to be made with respect to such mortgage loan may require the approval of the subordinate class representative under the WFCM 2015-LC20 pooling and servicing agreement or such other party specified in the related intercreditor agreement or such other pooling and servicing agreement. As a result, you will have less control over the servicing of the Bella Luna / San Lucas mortgage loan than you would have if such mortgage loan was being serviced by the applicable master servicer and the applicable special servicer pursuant to the terms of the pooling and servicing agreement for this transaction.
Wilmington Trust, National Association, the trustee, is also the trustee under the WFCM 2015-LC20 securitization and the WFCM 2015-C28 securitization.
See “Description of the Mortgage Pool—Loan Combinations” and “Servicing of the Mortgage Loans and Administration of the Trust Fund—Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations” in this free writing prospectus. The interests of a holder of anypari passu companion loan related to any such mortgage loan (or its designee) entitled to exercise various rights with respect to the servicing of the related loan combination may conflict with the interests of the holders of one or more classes of offered certificates. No certificateholder may take any action against any holder of apari passu companion loan (or its designee) for having acted solely in its own interest.
Potential Conflicts of Interest of the Underwriters and Their Affiliates
The activities of the underwriters and their respective affiliates (including those acting as a mortgage loan seller, a sponsor, the custodian, the tax administrator, the certificate administrator, the swap counterparty or a master servicer in this securitization or as a similar party under the WFCM 2105-C28 pooling and servicing agreement or the WFCM 2015-LC20 pooling and servicing agreement) may result in certain conflicts of interest. The underwriters and their respective affiliates may retain, or own in the future, classes of certificates, and any voting rights of that class could be exercised by them in a manner that could adversely impact the certificates. Any underwriter or its affiliate may invest or take long or short positions in securities or instruments, including the certificates, that may be different from your position as an investor in the certificates. If that were to occur, that underwriter’s or its affiliate’s interests may not be aligned with your interests in certificates you acquire.
The underwriters and their respective affiliates include broker-dealers whose business includes executing securities and derivative transactions on their own behalf as principals and on behalf of clients. Accordingly, the underwriters and their respective affiliates and clients acting through them from time to time buy, sell or hold securities or other instruments, which may include one or more classes of the certificates, and do so without consideration of the fact that the underwriters acted as underwriters for the certificates. Such transactions may result in the underwriters and their respective affiliates and/or their clients having long or short positions in such instruments. Any such short positions will increase in value if the related securities or other instruments decrease in value. Further, underwriters and their respective affiliates may (on their own behalf as principals or for their clients) enter into credit derivative or other derivative transactions with other parties pursuant to which they sell or buy credit protection with respect to one or more of the certificates. The positions of the underwriters and their respective affiliates or their clients
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in such derivative transactions may increase in value if the certificates default or decrease in value. In conducting such activities, none of the underwriters or their respective affiliates will have any obligation to take into account the interests of the certificateholders or the holders of thepari passu companion loans or any possible effect that such activities could have on them. The underwriters and their respective affiliates and clients acting through them may execute such transactions, modify or terminate such derivative positions and otherwise act with respect to such transactions, and may exercise or enforce, or refrain from exercising or enforcing, any or all of their rights and powers in connection therewith, without regard to whether any such action might have an adverse effect on the certificates or the certificateholders or the holders of thepari passu companion loans. Additionally, none of the underwriters or their respective affiliates will have any obligation to disclose any of these securities or derivatives transaction to you in your capacity as a certificateholder.
In addition, none of the underwriters or their respective affiliates will have any obligation to monitor the performance of the certificates or the actions of the master servicers, the special servicers or the trustee or the certificate administrator (or of any party acting in these capacities under a pooling and servicing agreement entered into in connection with the securitization of a non-servicedpari passu companion loan) and will have no authority to advise any such party or to direct their actions.
Furthermore, the underwriters and their respective affiliates may have ongoing relationships with, render services to, and engage in transactions with the borrowers, the sponsors and their respective affiliates, which relationships and transactions may create conflicts of interest between the underwriters and their respective affiliates, on the one hand, and the issuing entity, on the other hand. See “—Various Other Securitization-Level Conflicts of Interest May Have an Adverse Effect on Your Offered Certificates—Conflicts Between the Trust Fund and the Mortgage Loan Sellers and Their Affiliates” above. Wells Fargo Bank, National Association and its affiliates are playing several roles in this transaction. Wells Fargo Securities, LLC, one of the underwriters, is an affiliate of Wells Fargo Commercial Mortgage Securities, Inc., the depositor, and Wells Fargo Bank, National Association, a sponsor, a mortgage loan seller, an originator, the swap counterparty, a master servicer, the certificate administrator, the tax administrator, the certificate registrar and the custodian under this securitization.
Furthermore, Wells Fargo Bank, National Association is the purchaser under repurchase agreements with each of Rialto Mortgage Finance, LLC, Silverpeak Real Estate Finance LLC, and Walker & Dunlop Commercial Property Funding I WF, LLC, respectively, or, in any such case, with a wholly-owned subsidiary or other affiliate of the subject mortgage loan seller, for the purpose of providing short-term warehousing of mortgage loans originated or acquired by each such mortgage loan seller and/or its respective affiliates. In addition, Wells Fargo Bank, National Association is the purchaser under a repurchase agreement with a wholly-owned subsidiary of National Cooperative Bank, N.A. for the purpose of providing short-term warehousing of mortgage loans originated or acquired by National Cooperative Bank, N.A.; however, none of the mortgage loans that National Cooperative Bank, N.A. will transfer to the depositor are subject to such repurchase agreement.
In the case of the repurchase facility provided to Rialto Mortgage Finance, LLC, Wells Fargo Bank, National Association has agreed to purchase mortgage loans from Rialto Mortgage Finance, LLC on a revolving basis. The dollar amount of the mortgage loans subject to the repurchase facility that will be sold by Rialto Mortgage Finance, LLC to the depositor in connection with this securitization transaction is projected to equal, as of the cut-off date, approximately $236,805,755. Proceeds received by Rialto Mortgage Finance, LLC in connection with this securitization transaction will be used, in part, to repurchase from Wells Fargo Bank, National Association each of the mortgage loans subject
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to that repurchase facility that are to be sold by Rialto Mortgage Finance, LLC to the depositor in connection with this securitization transaction, which mortgage loans will be transferred to the depositor free and clear of any liens.
In the case of the repurchase facility provided to Silverpeak Real Estate Finance LLC, Wells Fargo Bank, National Association has agreed to purchase mortgage loans from Silverpeak Real Estate Finance LLC on a revolving basis. The dollar amount of the mortgage loans subject to the repurchase facility that will be sold by Silverpeak Real Estate Finance LLC to the depositor in connection with this securitization transaction is projected to equal, as of the cut-off date, approximately $65,102,050. Proceeds received by Silverpeak Real Estate Finance LLC in connection with this securitization transaction will be used, in part, to repurchase from Wells Fargo Bank, National Association each of the mortgage loans subject to that repurchase facility that are to be sold by Silverpeak Real Estate Finance LLC to the depositor in connection with this securitization transaction, which mortgage loans will be transferred to the depositor free and clear of any liens.
In addition, in connection with the repurchase facility provided to Silverpeak Real Estate Finance LLC or a wholly-owned subsidiary or other affiliate of Silverpeak Real Estate Finance LLC, Deutsche Bank AG, Cayman Islands Branch has agreed to purchase mortgage loans from Silverpeak Real Estate Finance LLC on a revolving basis. The dollar amount of the mortgage loans subject to the repurchase facility that will be sold by Silverpeak Real Estate Finance LLC to the depositor in connection with this securitization transaction is projected to equal, as of the cut-off date, approximately $25,500,000. Proceeds received by Silverpeak Real Estate Finance LLC in connection with this securitization transaction will be used, in part, to repurchase from Deutsche Bank AG, Cayman Islands Branch each of the mortgage loans subject to that repurchase facility that are to be sold by Silverpeak Real Estate Finance LLC to the depositor in connection with this securitization transaction, which mortgage loans will be transferred to the depositor free and clear of any liens.
In the case of the repurchase facility provided to Walker & Dunlop Commercial Property Funding I WF, LLC, Wells Fargo Bank, National Association has agreed to purchase mortgage loans from Walker & Dunlop Commercial Property Funding I WF, LLC on a revolving basis. The principal balance of the mortgage loans subject to the repurchase facility that will be sold by Walker & Dunlop Commercial Property Funding I WF, LLC to the depositor in connection with this securitization transaction is projected to equal, as of the cut-off date, approximately $113,270,708. Proceeds received by Walker & Dunlop Commercial Property Funding I WF, LLC in connection with this securitization transaction will be used, in part, to repurchase from Wells Fargo Bank, National Association, each of the mortgage loans subject to that repurchase facility that are to be sold by Walker & Dunlop Commercial Property Funding I WF, LLC to the depositor in connection with this securitization transaction, which mortgage loans will be transferred to the depositor free and clear of any liens.
Additionally, each of National Cooperative Bank, N.A. and Walker & Dunlop Commercial Property Funding I WF, LLC, respectively, or, in any such case, the respective wholly-owned subsidiary or other affiliate of the subject mortgage loan seller, is party to an interest rate hedging arrangement with Wells Fargo Bank, National Association with respect to all of the mortgage loans that Walker & Dunlop Commercial Property Funding I WF, LLC will transfer to the depositor and with respect to certain of the mortgage loans that National Cooperative Bank, N.A. will transfer to the depositor. In each instance, those hedging arrangements will terminate in connection with the contribution of those mortgage loans to this securitization transaction.
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As a result of the matters discussed in the preceding paragraphs, this securitization transaction will substantially reduce the economic exposure of Wells Fargo Bank, National Association and Deutsche Bank Securities Inc. to the mortgage loans that are to be transferred by Rialto Mortgage Finance, LLC, Silverpeak Real Estate Finance LLC, Walker & Dunlop Commercial Property Funding I WF, LLC and National Cooperative Bank, N.A., respectively, to the depositor.
Wells Fargo Bank, National Association is the interim custodian of the loan files for all of the mortgage loans that Rialto Mortgage Finance, LLC and Walker & Dunlop Commercial Property Funding I WF, LLC will transfer to the depositor.
Pursuant to certain interim servicing agreements between Wells Fargo Bank, National Association and Rialto Mortgage Finance, LLC, each a sponsor, originator and mortgage loan seller, or certain affiliates of Rialto Mortgage Finance, LLC, Wells Fargo Bank, National Association acts as primary servicer with respect to certain mortgage loans owned by Rialto Mortgage Finance, LLC or such affiliates (subject, in some cases, to the repurchase facility described above) from time to time, including, prior to their inclusion in the trust fund, some or all of the mortgage loans that Rialto Mortgage Finance, LLC will transfer to the depositor.
Pursuant to certain interim servicing agreements between Wells Fargo Bank, National Association and Silverpeak Real Estate Finance LLC, each a sponsor, originator and mortgage loan seller, or certain affiliates of Silverpeak Real Estate Finance LLC, Wells Fargo Bank, National Association acts as primary servicer with respect to certain mortgage loans owned by Silverpeak Real Estate Finance LLC or such affiliates of Silverpeak Real Estate Finance LLC (subject, in some cases, to the repurchase facilities described above) from time to time, including, prior to their inclusion in the trust fund, some or all of the mortgage loans that Silverpeak Real Estate Finance LLC will transfer to the depositor.
In addition, Wells Fargo Bank, National Association, a master servicer, is expected to enter into a sub-servicing agreement with an affiliate of Walker & Dunlop Commercial Property Funding I WF, LLC pursuant to which such affiliate will be required to perform certain limited subservicing duties with respect to the mortgage loans that Walker & Dunlop Commercial Property Funding I WF, LLC will transfer to the depositor.
In addition, Wells Fargo Bank, National Association is a sponsor, a mortgage loan seller, an originator, the master servicer, the certificate administrator, the tax administrator, the certificate registrar and the custodian under each of the WFCM 2015-LC20 pooling and servicing agreement and the WFCM 2015-C28 pooling and servicing agreement.
See “Summary—Affiliations and Certain Relationships Among Certain Transaction Parties” and “Transaction Parties—Affiliations and Certain Relationships Among Certain Transaction Parties” in this free writing prospectus for a description of certain affiliations and relationships between the underwriters and other participants in this offering.
Each of the foregoing relationships should be considered carefully by you before you invest in any certificates.
Potential Conflicts of Interest of the Subordinate Class Representative
It is expected that DoubleLine Capital LP will be the initial subordinate class representative (other than with respect to any non-servicedpari passu mortgage loan). In connection with the servicing of the mortgage loans, the special servicer may, at the direction of the subordinate class representative, take actions with respect to the mortgage
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loans that could adversely affect the holders of some or all of the classes of certificates. The subordinate class representative will be appointed by the majority subordinate certificateholder, which will initially be DoubleLine Capital LP. The subordinate class representative may have interests in conflict with those of the other certificateholders. As a result, it is possible that the subordinate class representative may direct a special servicer to take actions that conflict with the interests of holders of certain classes of the certificates, notwithstanding that such special servicer is not permitted to take actions that are prohibited by law or violate the servicing standard or the terms of the mortgage loan documents. In addition, except as limited by certain conditions described under “Servicing of the Mortgage Loans and Administration of the Trust Fund—Replacement of the Special Servicers” in this free writing prospectus, during a subordinate control period, a special servicer may be removed without cause by the majority subordinate certificateholder or the subordinate class representative on its behalf. See “Servicing of the Mortgage Loans and Administration of the Trust Fund—The Majority Subordinate Certificateholder and the Subordinate Class Representative” and “—Replacement of the Special Servicers” in this free writing prospectus.
The subordinate class representative and its affiliates may have interests that are in conflict with those of certificateholders, especially if the subordinate class representative or any of its affiliates holds certificates, or has financial interests in or other financial dealings (as lender or otherwise) with a borrower or a parent of a borrower. Each of these relationships may create a conflict of interest.
Potential Conflicts of Interest in the Selection of the Mortgage Loans
The anticipated initial investor in the Class E, F and G certificates (which, as the anticipated purchaser of the foregoing classes of certificates, is the party under the pooling and servicing agreement with the right to appoint the subordinate class representative), or an investment manager or other representative thereof was given the opportunity by the sponsors to perform due diligence on the mortgage loans originally identified by the sponsors for inclusion in the mortgage pool, and to request the removal, re-sizing or changes in the characteristics of some or all of the mortgage loans. The mortgage pool and some of the mortgage loans as originally proposed by the sponsors were adjusted based on some of these requests. In addition, the anticipated initial investor may have imposed additional monetary or other conditions on its acquisition of its certificates in order to allow certain mortgage loans to be included in this securitization.
We cannot assure you that you or another investor would have made the same requests to modify the original mortgage pool as such anticipated initial investor or that the final mortgage pool as affected by requests made by such anticipated initial investor will not adversely affect the performance of your certificates and benefit the performance of the anticipated initial investor’s certificates. Because of the differing subordination levels, the anticipated initial investor has interests that, in some circumstances, are likely to differ from those of purchasers of other classes of certificates, and the anticipated initial investor may desire a mortgage pool composition that benefits the anticipated initial investor but that does not benefit other investors. In addition, the anticipated initial investor may enter into hedging or other transactions or otherwise have business objectives that also could cause its interests with respect to the mortgage pool to differ from those of other purchasers of the certificates. In any case, the anticipated initial investor performed due diligence solely for its own benefit, and its acceptance of its certificates does not constitute, and should not be construed as, an endorsement of the mortgage pool, any mortgage loan, the underwriting for any mortgage loan, any mortgage loan seller or any originator. Other
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investors are not entitled to rely on the anticipated initial investor’s acceptance of the mortgage pool or any mortgage loan to any extent.
In no event will the anticipated initial investor have any liability to any person or entity in connection with its review of the mortgage pool or any mortgage loan, any other due diligence conducted by the anticipated initial investor or otherwise in connection with the activities of the anticipated initial investor described in the preceding two paragraphs. The pooling and servicing agreement will provide that each certificateholder, by its acceptance of a certificate, waives any cause of action that it may otherwise have against the anticipated initial investor in respect of such activities.
The anticipated initial investor will initially appoint the subordinate class representative, which will generally have consent and consultation rights with respect to material servicing decisions involving the mortgage loans (other than (a) any non-servicedpari passu mortgage loans and (b) any excluded loan) and, during the subordinate control period, the right to replace each special servicer (other than with respect to any excluded loan) under some circumstances. In addition, the subordinate class representative will generally have consultation rights with regard to material servicing decisions involving any non-servicedpari passu mortgage loan (except to the extent that such mortgage loan is an excluded loan). See “Servicing of the Mortgage Loans and Administration of the Trust Fund—The Majority Subordinate Certificateholder and the Subordinate Class Representative” and “Description of the Mortgage Pool—Loan Combinations” in this free writing prospectus.
With respect to the right of the subordinate class representative to replace each special servicer under certain circumstances, investors should consider that National Cooperative Bank, N.A., the initial special servicer with respect to each of the mortgage loans included in the pool that are secured by residential cooperative properties, is experienced in acting as a lender and a servicer with respect to residential cooperative mortgage loans. Should the subordinate class representative elect to replace such special servicer, we cannot assure you that any successor special servicer selected pursuant to the terms of the pooling and servicing agreement would have the same familiarity or experience with the servicing of residential cooperative mortgage loans.
Because the incentives and actions of the anticipated initial investor, in some circumstances, are likely to differ from or be adverse to those of purchasers of other classes of certificates, you are advised and encouraged to make your own investment decision based on a careful review of the information set forth in this free writing prospectus and your own view of the mortgage loans.
Ratings of the Certificates Have Substantial Limitations
The ratings assigned to some or all classes of certificates by each of the three (3) nationally recognized statistical rating organizations engaged by the depositor are based on, among other things, the economic characteristics of the underlying mortgage loans, mortgaged properties and other relevant structural features of the transaction. The ratings assigned to the certificates reflect only the views of the respective rating agencies as of the date such ratings were issued. Future events could have an adverse impact on such ratings. The ratings may be reviewed, revised, suspended, downgraded, qualified or withdrawn entirely by the applicable rating agency as a result of changes in or unavailability of information. The ratings do not consider to what extent the certificates will be subject to prepayment or that the outstanding principal amount of any class of certificates will be prepaid.
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Furthermore, the amount, type and nature of credit support, if any, provided with respect to the certificates were determined on the basis of criteria established by each hired rating agency. These criteria are sometimes based upon analysis of the behavior of mortgage loans in a larger group. However, we cannot assure you that the historical data supporting that analysis will accurately reflect future experience, or that the data derived from a large pool of mortgage loans will accurately predict the delinquency, foreclosure or loss experience of the mortgage loans in the trust. As evidenced by the significant amount of downgrades, qualifications and withdrawals of ratings assigned to previously issued commercial mortgage-backed securities during the recent credit crisis, the assumptions by the rating agencies engaged by the depositor and other nationally recognized statistical rating organizations regarding the performance of the mortgage loans related to such commercial mortgage-backed securities were not, in all cases, correct.
Certain actions provided for in the mortgage loan agreements require, as a condition to taking such action, that a rating agency confirmation be obtained from each of the rating agencies engaged by the depositor. In certain circumstances, this condition may be deemed to have been met or waived without any such rating agency confirmation being obtained. In the event such an action is taken without a rating agency confirmation being obtained, we cannot assure you that the applicable rating agency will not downgrade, qualify or withdraw its ratings on the certificates as a result of the taking of such action. If you invest in the certificates, the terms of the pooling and servicing agreement will be binding on you, and as a result, you should be aware of the procedures relating to no downgrade confirmations described under the definition of “Rating Agency Confirmation” in “Servicing of the Mortgage Loans and Administration of the Trust Fund—Rating Agency Confirmations” in this free writing prospectus.
We are not obligated to maintain any particular rating with respect to any class of certificates, and the ratings initially assigned to the certificates by any or all of the rating agencies engaged by the depositor to rate the certificates could change adversely as a result of changes affecting, among other things, the underlying mortgage loans, the mortgaged properties, the sponsors, the certificate administrator, the trustee, the trust advisor, the master servicers or the special servicers, or as a result of changes to ratings criteria employed by any or all of the rating agencies engaged by the depositor to rate the certificates. Although these changes would not necessarily be, or result from, an event of default on any underlying mortgage loan, any adverse change to the ratings of the certificates would likely have an adverse effect on the market value, liquidity and/or regulatory characteristics of those certificates. A security rating does not represent an assessment of the yield to maturity that you may experience. See “Ratings” in each of this free writing prospectus and the accompanying prospectus.
Further, the rating of any class of certificates below an investment grade rating by any nationally recognized statistical rating organization, whether upon initial issuance of such class of certificates or as a result of a ratings downgrade, could adversely affect the ability of an employee benefit plan or other investor to purchase or retain those certificates. See “ERISA Considerations” and “Legal Investment” in each of this free writing prospectus and the accompanying prospectus.
The depositor has hired three (3) nationally recognized statistical rating organizations to rate certain classes of the certificates. We cannot assure you as to whether another nationally recognized statistical rating organization will rate any class of certificates or, if it were to rate any class of certificates, what rating would be assigned by it. Moreover, any of the three (3) nationally recognized statistical rating organizations that we have hired may issue unsolicited credit ratings on one or more classes of certificates that we did not hire it to rate. Additionally, other nationally recognized statistical rating organizations that we
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have not hired to rate the certificates may nevertheless issue unsolicited credit ratings on one or more classes of certificates on the basis of information they receive pursuant to Rule 17g-5 under the Securities Exchange Act of 1934, as amended, or otherwise. If any such unsolicited ratings are issued, we cannot assure you that those unsolicited ratings would be the same as, higher than or lower than the ratings assigned by the rating agencies engaged by the depositor. The issuance of unsolicited ratings on one or more classes of the certificates that are lower than the ratings assigned by the rating agencies engaged by the depositor may adversely affect the liquidity, market value and regulatory characteristics of those classes of certificates. As part of the process of obtaining ratings for the certificates, the depositor had initial discussions with and submitted certain materials to DBRS, Inc., Fitch Ratings, Inc., Kroll Bond Rating Agency, Inc., Moody’s Investors Service, Inc. and Morningstar Credit Ratings, LLC. Based on preliminary feedback from those five (5) nationally recognized statistical rating organizations at that time, the depositor selected three (3) of them to rate the certificates and did not select the other two (2) nationally recognized statistical rating organizations, in part due to those nationally recognized statistical rating organizations’ initial subordination levels for the various classes of certificates. Had the depositor selected such other nationally recognized statistical rating organizations to rate the certificates, we cannot assure you that the ratings such other nationally recognized statistical rating organizations would have assigned to the certificates would not have been lower than the ratings assigned by Fitch Ratings, Inc., Kroll Bond Rating Agency, Inc. and Moody’s Investors Service, Inc. In addition, had the depositor engaged each of Fitch Ratings, Inc., Kroll Bond Rating Agency, Inc. and Moody’s Investors Service, Inc. to rate all classes of certificates, the ratings of those classes of certificates that were not ultimately rated by one or more of those nationally recognized statistical rating organizations may have been different, and potentially lower, than the ratings ultimately assigned to the certificates. In the case of Moody’s Investors Service, Inc., the depositor only requested ratings for certain classes of rated certificates, due in part to the initial subordination levels provided by Moody’s Investors Service, Inc. for the classes of certificates. If the depositor had selected Moody’s Investors Service, Inc. to rate those other classes of rated certificates not rated by it, its ratings of those other certificates may have been different, and potentially lower, than those ratings ultimately assigned to those certificates by Fitch Ratings, Inc. and Kroll Bond Rating Agency, Inc. Although unsolicited ratings may be issued by any nationally organized statistical rating organization, a nationally recognized statistical rating organization might be more likely to issue an unsolicited rating if it was not selected after having provided preliminary feedback to the depositor. In addition, the decision not to engage one or more of the three (3) hired nationally recognized statistical rating organizations to rate certain classes of certificates to be issued in connection with this transaction may negatively impact the liquidity, market value and regulatory characteristics of those classes of certificates.
Under the rules and regulations of the Securities and Exchange Commission, information provided to a hired rating agency for the purpose of assigning or monitoring the ratings on the certificates is required to be made available to non-hired nationally recognized statistical rating organizations in order to make it possible for such nationally recognized statistical rating organizations to assign unsolicited ratings on the certificates. An unsolicited rating could be assigned at any time, including prior to the closing date. Neither the depositor nor any other person or entity will have any duty to notify you if any such other nationally recognized statistical rating organization issues, or delivers notice of its intention to issue, unsolicited ratings on one or more classes of certificates after the date of this free writing prospectus. Nationally recognized statistical rating organizations, including the hired rating agencies, have different methodologies, criteria, models and requirements. If any non-hired rating agency assigns an unsolicited rating on the certificates, we cannot assure you that such rating will be the same as, higher than or lower than the ratings assigned by
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the hired rating agencies; the assignment of unsolicited ratings by a rating agency could adversely affect the liquidity, market value and regulatory characteristics of your certificates. In addition, if the depositor or any sponsor fails to make available to the non-hired nationally recognized statistical rating organizations any information provided to any hired rating agency for the purpose of assigning or monitoring the ratings on the certificates, a hired rating agency could withdraw its ratings on the certificates, which could adversely affect the liquidity, market value and regulatory characteristics of your certificates. Potential investors in the certificates are urged to make their own evaluation of the creditworthiness of the mortgage loans and the applicable credit enhancement on the certificates, and not to rely solely on the ratings on the certificates. Furthermore, the Securities and Exchange Commission may determine that any one or more of the rating agencies engaged by the depositor no longer qualifies as a nationally recognized statistical rating organization, or is no longer qualified to rate the certificates. Any such determination may adversely affect the liquidity, market value and regulatory characteristics of your certificates.
Security ratings are not recommendations to buy, sell or hold the offered certificates. Rather, ratings are an assessment by the applicable rating agency of the likelihood that any interest on a class of offered certificates will be paid on a timely basis and that a class of offered certificates will be paid in full by its final scheduled payment date. Ratings do not consider to what extent the offered certificates will be subject to prepayment or that the principal of any class of offered certificates will be paid prior to the final scheduled payment date for that class of offered certificates, nor do the ratings consider the prices of the offered certificates or their suitability for a particular investor. A rating agency may revise or withdraw the ratings at any time in its sole discretion, including as a result of a failure by the depositor to comply with its obligation to post information provided to the hired rating agencies on a website that is accessible by a nationally recognized statistical rating organization that is not a hired rating agency. The ratings of any offered certificates may be lowered by a nationally recognized statistical rating organization (including the hired rating agencies) following the initial issuance of the offered certificates as a result of losses on the mortgage loans in excess of the levels contemplated by a nationally recognized statistical rating organization at the time of its initial rating analysis. Neither the depositor nor any sponsor nor any of their respective affiliates will have any obligation to replace or supplement any credit support, or to take any other action to maintain any ratings of the offered certificates.
Accordingly, we cannot assure you that the ratings assigned to any offered certificate on the date on which the offered certificate is originally issued will not be lowered or withdrawn by any rating agency at any time thereafter. If any rating with respect to an offered certificate is revised or withdrawn, the liquidity, market value and regulatory characteristics of that offered certificate may be adversely affected.
We note that a rating agency may have a conflict of interest where, as is the case with the ratings of the offered certificates by the hired rating agencies, the sponsor or the issuer of a security pays the fee charged by the rating agency for its rating services.
The Special Servicers May Be Directed To Take Actions
In connection with the servicing of the specially serviced mortgage loans, each special servicer may, at the direction or upon the advice of the subordinate class representative (other than with respect to any excluded loan, with respect to which the subordinate class representative will have no right to provide direction or advice), take actions with respect to the specially serviced mortgage loans serviced by it pursuant to the pooling and servicing agreement, which actions could adversely affect the holders of some or all of the classes of
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certificates. The subordinate class representative will be controlled by the Class E, F or G certificateholders and will initially be appointed by the anticipated initial investor in the Class E, F and G certificates. The subordinate class representative may have interests in conflict with those of the certificateholders. As a result, it is possible that the subordinate class representative may direct either special servicer to take actions that conflict with the interests of the holders of classes of the certificates that are the same or different from the class of certificateholders that appointed the subordinate class representative. Similarly, with respect to any non-servicedpari passu mortgage loan, the related special servicer thereunder may, at the direction or upon the advice of the related other subordinate class representative (or the equivalent), take actions with respect to such non-servicedpari passu mortgage loan that could adversely affect such non-servicedpari passu mortgage loan, and therefore, the holders of some or all of the classes of certificates. Such other subordinate class representative (or the equivalent) may have interests in conflict with those of the certificateholders. Although each special servicer will have contractually agreed not to take actions that, among other things, are prohibited by law or violate the servicing standard, the terms of any mortgage loan or the applicable pooling and servicing agreement, the servicing standard and other provisions of the applicable pooling and servicing agreement will generally protect each such special servicer from liability for errors in judgment. In addition, the servicing standard is a generalized standard of conduct that allows each special servicer discretion in determining its response to particular circumstances. In addition, except as limited by certain conditions described under “Servicing of the Mortgage Loans and Administration of the Trust Fund—Replacement of the Special Servicers”, the special servicers may be removed without cause by the majority subordinate certificateholder as described in this free writing prospectus and provided in the pooling and servicing agreement.
There Are Risks Relating to the Exchangeable Certificates
The characteristics of the Class PEX certificates will reflect, in the aggregate, the characteristics of the Class A-S, B and C certificates, which, together with the Class PEX certificates, are referred to as “exchangeable certificates” in this free writing prospectus. As a result, the Class PEX certificates will be subject to the same risks as the Class A-S, B and C certificates described in this free writing prospectus. Investors are encouraged to also consider a number of factors that will limit a certificateholder’s ability to exchange exchangeable certificates:
· | At the time of a proposed exchange, a certificateholder must own exchangeable certificates in the requisite exchange proportion to make the desired exchange. |
· | A certificateholder that does not own each class of the exchangeable certificates in the requisite exchange proportion may be unable to obtain the necessary exchangeable certificates because the holders of the needed certificates may be unwilling or unable to sell them or because the necessary certificates have been placed into other financial structures. |
· | Principal distributions will decrease the amounts available for exchange over time and once the principal balance of the Class A-S, B or C regular interest (and, correspondingly, the Class A-S, B or C certificates and, to the extent evidencing an interest in the Class A-S, B or C regular interests, the Class PEX certificates) has been reduced to zero as a result of the payment in full of all interest and principal on such Class, exchanges will no longer be permissible. |
· | Certificates may only be held in authorized denominations. |
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An administrative fee may be payable to DTC or any successor depository in connection with each exchange of certificates.
You May Be Bound by the Actions of Other Certificateholders Even if You Do Not Agree with Those Actions
In some circumstances, the holders of specified percentages of all the certificates, or specified percentages of each of one or more classes of certificates, will be entitled to direct, consent to or approve certain actions, including certain amendments to the pooling and servicing agreement and certain replacements of the trust advisor or a special servicer. In these cases, the direction, consent or approval of the requisite percentage(s) of certificateholders will be sufficient to bind all the certificateholders, regardless of whether you agree with that direction, consent or approval.
Because the Offered Certificates Are in Book-Entry Form, Your Rights Can Only Be Exercised Indirectly and There May Be Other Adverse Consequences
Your certificates will be initially represented by one or more certificates registered in the name of Cede & Co., as the nominee for DTC, and will not be registered in your name. As a result, you will not be recognized as a certificateholder, or holder of record of your certificates. As a consequence, investors may experience difficulties in identifying or communicating with other investors in the certificates for the purpose of exercising remedies, taking collective action or otherwise.
Since transactions in book-entry certificates generally can be effected only through DTC and its participating organizations: (i) the liquidity of book-entry certificates in any secondary trading market that may develop may be limited because investors may be unwilling to purchase certificates for which they cannot obtain physical certificates; (ii) your ability to pledge certificates to persons or entities that do not participate in the DTC system, or otherwise to take action in respect of the certificates, may be limited due to lack of a physical security representing the certificates; (iii) your access to information regarding the certificates may be limited since conveyance of notices and other communications by DTC to its participating organizations, and directly and indirectly through those participating organizations to you, will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect at that time; and (iv) you may experience some delay in receiving distributions of interest and principal on your certificates because distributions will be made by the certificate administrator to DTC and DTC will then be required to credit those distributions to the accounts of its participating organizations and only then will such distributions be credited to your account either directly or indirectly through DTC’s participating organizations.
See “Description of the Offered Certificates—Delivery, Form and Denomination” in this free writing prospectus and “Risk Factors—Book-Entry Registration May Hinder the Exercise of Investor Remedies” and “Description of the Certificates—Book-Entry Registration and Definitive Certificates” in the accompanying prospectus.
Material Federal Tax Considerations Regarding Original Issue Discount
One or more classes of certificates may be issued with “original issue discount” for federal income tax purposes, which generally would result in your recognizing taxable income in advance of the receipt of cash attributable to that income. Accordingly, investors must have sufficient sources of cash to pay any federal, state or local income taxes with respect to the original issue discount. In addition, such original issue discount will be required to be accrued and included in income based on the assumption that no defaults will
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occur or losses be incurred with respect to the mortgage loans. This could lead to the inclusion of amounts in ordinary income early in the term of the certificate that later prove uncollectible, giving rise to a bad debt deduction which the investor may be required to treat as a capital loss instead of a bad debt under Code Section 166. See “Material Federal Income Tax Consequences—Discount and Premium; Prepayment Consideration” in this free writing prospectus and “Material Federal Income Tax Consequences” in the accompanying prospectus.
State and Local Tax Considerations
In addition to the federal income tax consequences described under the heading “Material Federal Income Tax Consequences” in this free writing prospectus, potential purchasers should consider the state and local income tax consequences of the acquisition, ownership and disposition of the certificates. State and local income tax laws may differ substantially from federal income tax law. This free writing prospectus does not purport to describe any aspects of the income tax laws of any state or locality, whether one in which a mortgaged property is located or otherwise.
We cannot assure you that holders of certificates will not be subject to taxation in any particular state or local taxing jurisdiction. One or more state or local jurisdictions may attempt to tax nonresident holders of certificates solely by reason of the location in that jurisdiction of the depositor, the trustee, the related borrower or the mortgaged properties or on some other basis; require nonresident holders of certificates to file returns in such jurisdiction; or attempt to impose penalties for failure to file such returns. If such a jurisdiction ultimately succeeds in collecting such taxes or penalties from nonresident holders of certificates, neither the related borrower nor any party to the pooling and servicing agreement will be required to reimburse the amount of the tax or penalty to or for the benefit of any certificateholder.
Potential purchasers should consult their own tax advisors with respect to the various state and local tax consequences of an investment in the certificates. See “State and Other Tax Consequences” in each of this free writing prospectus and the accompanying prospectus.
Commencing Legal Proceedings Against Parties to the Pooling and Servicing Agreement May Be Difficult
The trustee may not be required to commence legal proceedings against third parties at the direction of any certificateholders unless, among other conditions, at least 25% of the voting rights (determined without notionally reducing the principal balances of the certificates by any appraisal reduction amounts) associated with the certificates join in the demand and offer indemnification reasonably satisfactory to the trustee. Those certificateholders may not commence legal proceedings themselves unless the trustee has refused to institute proceedings after the conditions described above have been satisfied. These provisions may limit the ability of an investor in the certificates to enforce or cause the enforcement of the provisions of any applicable pooling and servicing agreement.
Each of the Mortgage Loan Sellers, the Depositor and the Trust Fund Are Subject to Insolvency or Bankruptcy Laws That May Affect the Trust Fund’s Ownership of the Mortgage Loans
In the event of the insolvency or similar event of a mortgage loan seller or the depositor, it is possible the trust fund’s right to payment from or ownership of the mortgage
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loans could be challenged, and if such challenge were successful, delays or reductions in payments on the certificates could occur.
Each of the mortgage loan sellers intends that its transfer of its mortgage loans to the depositor constitutes a sale, rather than a pledge of the applicable mortgage loans to secure the indebtedness of the mortgage loan seller. The depositor intends that its transfer of the mortgage loans to the trustee on behalf of the certificateholders constitutes a sale, rather than a pledge of the receivables to secure indebtedness of the depositor.
The transfer of the mortgage loans by Wells Fargo Bank, National Association and by National Cooperative Bank, N.A., in each case as a mortgage loan seller, in connection with this offering is not expected to qualify for the securitization safe harbor adopted by the Federal Deposit Insurance Corporation (the “FDIC”) for securitizations sponsored by insured depository institutions (12 C.F.R. § 360.6). However, this safe harbor is non-exclusive and an opinion of counsel will be rendered on the closing date, based on certain facts and assumptions and subject to certain qualifications, to the effect that the transfer of the mortgage loans by Wells Fargo Bank, National Association or National Cooperative Bank, N.A., as applicable, would generally be respected in the event the FDIC were appointed as conservator or receiver of Wells Fargo Bank, National Association or National Cooperative Bank, N.A., as applicable. Nevertheless, we cannot assure you that the FDIC or another interested party would not attempt to assert that such transfer was not a sale. Even if a challenge were not successful, it is possible that payments on the certificates would be delayed while the claim is resolved.
If any other mortgage loan seller or the depositor were to become a debtor under the U.S. bankruptcy code, it is possible that a creditor or trustee in bankruptcy of the mortgage loan seller or the depositor, as debtor-in-possession, may argue that the sale of the mortgage loans by the mortgage loan seller or the depositor was a pledge of the applicable mortgage loans rather than a sale. An opinion of counsel will be rendered on the closing date, based on certain facts and assumptions and subject to certain qualifications, to the effect that the transfer of the applicable mortgage loans would generally be respected in the event a mortgage loan seller or the depositor were to become subject to a proceeding under the U.S. bankruptcy code. Nevertheless, we cannot assure you a bankruptcy trustee or another interested party would not attempt to assert that such transfer was not a sale. Even if a challenge were not successful, it is possible that payments on the certificates would be delayed while a court resolves the claim.
In addition, since the issuing entity is a common law trust, it may not be eligible for relief under the federal bankruptcy laws, unless it can be characterized as a “business trust” for purposes of the federal bankruptcy laws. Bankruptcy courts look at various considerations in making this determination, so it is not possible to predict with any certainty whether or not the issuing entity would be characterized as a “business trust”. Even if a bankruptcy court were to determine that the issuing entity was a “business trust”, it is possible that payments on the certificates would be delayed while the court resolved the issue.
Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act provides for an orderly liquidation authority under which the Federal Deposit Insurance Corporation can be appointed as receiver of certain systemically important non-bank financial companies and their direct or indirect subsidiaries in certain cases. We make no representation as to whether this would apply to any of the sponsors. In January 2011, the acting general counsel of the Federal Deposit Insurance Corporation issued a letter in which he expressed his view that, under then-existing regulations, the Federal Deposit Insurance Corporation, as receiver under the orderly liquidation authority, would not, in the exercise of its orderly
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liquidation authority repudiation powers, recover as property of a financial company assets transferred by the financial company;provided that the transfer satisfies the conditions for the exclusion of assets from the financial company’s estate under the bankruptcy code. The letter further noted that, while the Federal Deposit Insurance Corporation staff may be considering recommending further regulations under orderly liquidation authority, the acting general counsel would recommend that such regulations incorporate a 90 day transition period for any provisions affecting the Federal Deposit Insurance Corporation’s statutory power to disaffirm or repudiate contracts. If, however, the Federal Deposit Insurance Corporation were to adopt a different approach than that described in the acting general counsel’s letter, delays or reductions in payments on the offered certificates could occur. As such, we cannot assure you that a bankruptcy would not result in a delay or reduction in payments on the certificates.
Risks Related to the Mortgage Loans
The Repayment of a Multifamily, Residential Cooperative, Manufactured Housing Community or Commercial Mortgage Loan is Dependent on the Cash Flow Produced by the Corresponding Mortgaged Property, Which Can Be Volatile and Insufficient To Allow Full and Timely Distributions on Your Offered Certificates
The mortgage loans are secured by various types of income-producing properties, and there are certain risks that are generally applicable to loans secured by all of those property types. Commercial lending is generally thought to expose a lender to greater risk than one-to-four family residential lending because, among, other things, it typically involves larger loans.
The repayment of a commercial mortgage loan is typically dependent upon the ability of the applicable property to produce cash flow. Even the liquidation value of a multifamily, residential cooperative, manufactured housing community or commercial property is determined, in substantial part, by the amount of the property’s cash flow (or its potential to generate cash flow). However, net operating income and cash flow can be volatile and may be insufficient to cover debt service on the loan at any given time. See “Risk Factors—Future Cash Flow and Property Values Are Not Predictable” in the accompanying prospectus. All of the mortgage loans were originated within seven (7) months prior to the cut-off date and thus should generally be considered not to have long-standing payment histories. In some cases, the mortgage loans have little or no payment histories. See “Description of the Mortgage Pool—Mortgage Loan History” in this free writing prospectus.
With respect to commercial mortgage loans secured by residential cooperative properties, the repayment of such mortgage loans is typically dependent upon the payments received by the related cooperative corporation from its tenants/shareholders and/or the ability of the residential cooperative to refinance such mortgage loan. See “—Residential Cooperative Properties Have Special Risks” below.
The net operating income, cash flow and property value of the mortgaged properties may be adversely affected by any one or more of the following factors:
· | the age, design and construction quality of the property; |
· | perceptions regarding the safety, convenience and attractiveness of the property; |
· | the proximity and attractiveness of competing properties; |
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· | the adequacy and effectiveness of the property’s operations, management and maintenance; |
· | increases in operating expenses (including but not limited to real estate taxes and assessments and insurance premiums) at the property and in relation to competing properties; |
· | an increase in the capital expenditures needed to maintain the property or make improvements; |
· | the dependence upon a single tenant, or a concentration of tenants in a particular business or industry; |
· | a decline in the financial condition of a major tenant; |
· | an increase in vacancy rates; and |
· | a decline in rental rates as leases are renewed or entered into with new tenants. |
Other factors are more general in nature, such as:
· | national, regional or local economic conditions (including plant closings, military base closings, industry slowdowns and unemployment rates); |
· | local real estate conditions (such as an oversupply of competing properties, rental space or multifamily housing); |
· | demographic factors; |
· | decreases in consumer confidence; |
· | changes in prices for key commodities or products; |
· | changes in consumer tastes and preferences, including the effects of adverse publicity; and |
· | retroactive changes in building codes. |
The volatility of net operating income will be influenced by many of the foregoing factors, as well as by:
· | the length of tenant leases; |
· | the creditworthiness of tenants; |
· | the level of tenant defaults; |
· | the ability to convert an unsuccessful property to an alternative use; |
· | new construction in the same market as the mortgaged property; |
· | rent control laws or other laws impacting operating revenues or costs; |
· | the number and diversity of tenants; |
· | the availability of trained labor necessary for tenant operations; |
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· | with respect to residential cooperative loans, the discretion afforded to the cooperative board of directors to establish maintenance charges payable by tenant shareholders; |
· | the rate at which new rentals occur; and |
· | the property’s operating leverage (which is the percentage of total property expenses in relation to revenue), the ratio of fixed operating expenses to those that vary with revenues, and the level of capital expenditures required to maintain the property and to retain or replace tenants. See “—Renewal, Termination and Expiration of Leases and Reletting Entails Risks That May Adversely Affect Your Investment” in this free writing prospectus. |
Some of the mortgaged properties are located in areas that (i) based upon demographics, are considered secondary or tertiary markets or (ii) have high vacancy rates for the relevant property type.
A decline in the real estate market or in the financial condition of a major tenant will tend to have a more immediate effect on the net operating income of properties with short-term revenue sources (such as short-term or month-to-month leases) and may lead to higher rates of delinquency or defaults under mortgage loans secured by such properties.
Furthermore, if the debt service under a mortgage loan is scheduled to increase during the term of the mortgage loan pursuant to an increase in the mortgage interest rate, the expiration of an interest-only period or otherwise, we cannot assure you that the net cash flow at the related mortgaged property will be sufficient to pay the additional debt service and, even if it is sufficient, the requirement to pay the additional debt service may reduce the cash flow available to the borrower to operate and maintain the mortgaged property.
Property Value May Be Adversely Affected Even When There Is No Change in Current Operating Income
Various factors may adversely affect the value of the mortgaged properties without affecting the properties’ current net operating income. These factors include, among others:
· | changes in governmental regulations, fiscal policy, zoning or tax laws; |
· | potential environmental legislation or liabilities or other legal liabilities; |
· | proximity and attractiveness of competing properties; |
· | new construction of competing properties in the same market; |
· | convertibility of a mortgaged property to an alternative use; |
· | the deterioration of socio-economic conditions in the related community, including increases in criminal activity; |
· | the availability of refinancing; and |
· | changes in interest rate levels. |
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Concentrations of Mortgaged Property Types Subject the Trust Fund to Increased Risk of Decline in Particular Industries
A concentration of mortgaged property types can increase the risk that a decline in a particular industry or business would have a disproportionately large impact on a pool of mortgage loans. For example, if there is a decline in tourism, the hotel industry might be adversely affected, leading to increased losses on mortgage loans secured by hospitality properties as compared to the mortgage loans secured by other property types.
In that regard, by allocated loan amount:
· | multifamily properties represent approximately 28.8% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (which includes the residential cooperative properties that are separately identified below); |
· | retail properties represent approximately 26.7% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date; |
· | office properties represent approximately 25.1% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date; |
· | residential cooperative properties (including the residential cooperative property identified on Annex A-1 to this free writing prospectus as Baywoods of Annapolis, representing approximately 1.4% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date, which is operated, in part, as a residential cooperative property and, in part, as a residential healthcare facility) represent approximately 7.0% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date; |
· | self-storage properties represent approximately 6.8% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date; |
· | hospitality properties represent approximately 4.9% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date; |
· | industrial properties represent approximately 2.7% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date; |
· | mixed use facilities represent approximately 2.3% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date; |
· | other property types represent approximately 2.1% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date; and |
· | manufactured housing community properties represent approximately 0.7% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date. |
Mortgage loans that are secured by liens on the types of properties securing the mortgage loans are exposed to unique risks particular to those types of properties. For more information, you should refer to the following sections in the accompanying prospectus:
(1) | “Risk Factors”; and |
(2) | “Description of the Trust Funds—Mortgage Loans—Leases”. |
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Retail Properties Have Special Risks
Forty-four (44) of the mortgaged properties, collectively representing approximately 26.7% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date by allocated loan amount, are retail properties. The value of retail properties is significantly affected by the quality of the tenants as well as fundamental aspects of real estate, such as location and market demographics. The correlation between success of tenant businesses and a retail property’s value may be more direct with respect to retail properties than other types of commercial property because a component of the total rent paid by certain retail tenants is often tied to a percentage of gross sales.
Whether a retail property is “anchored”, “shadow anchored” or “unanchored” is also an important consideration. The presence or absence of an “anchor tenant” or a “shadow anchor tenant” in or near a retail property also can be important because anchors play a key role in generating customer traffic and making a center desirable for other tenants. An “anchor tenant” located on a related property is usually proportionately larger in size than most other tenants in the property and is vital in attracting customers to a retail property. A “shadow anchor tenant” is not located on the mortgaged property, is usually proportionally larger in size than most tenants in the property, is important in attracting customers to a retail property and is located sufficiently close and convenient to the property so as to influence and attract potential customers. The economic performance of an anchored or shadow anchored retail property will consequently be adversely affected by:
· | an anchor tenant’s or shadow anchor tenant’s failure to renew its lease; |
· | termination of an anchor tenant’s or shadow anchor tenant’s lease or, if the anchor tenant or shadow anchor tenant owns its own site, a decision to vacate; |
· | the bankruptcy or economic decline of an anchor tenant or shadow anchor tenant; or |
· | the cessation of the business of an anchor tenant (notwithstanding its continued payment of rent) or a shadow anchor tenant. |
Certain of the anchor tenants (or shadow anchor tenants) at retail mortgaged properties may be dark. We cannot assure you that if anchor tenants or shadow anchor tenants at a particular mortgaged property were to close or remain vacant, such anchor tenants or shadow anchor tenants, as applicable, would be replaced in a timely manner or, if part of the collateral for the related mortgage loan, without incurring material additional costs to the related borrower and resulting in adverse economic effects. With respect to shadow anchor tenants, the related borrower has no control over the replacement of such tenants and, as a result, may not be in a position to mitigate the effect of such tenants going dark on leases at the related mortgaged property. Similarly, if the shadow anchor tenant is physically connected to the mortgaged property, issues requiring common direction and cooperation between land owners, such as providing for insurance and rebuilding following casualty, may become more complicated, costly and time-consuming than they would be otherwise, and adversely affect property performance. See “Description of the Mortgage Pool—Certain Characteristics of the Mortgage Pool—Property Type Concentrations” and “—Other Matters” in this free writing prospectus.
In addition, many of the retail mortgaged properties have sole or anchor tenants whose leases expire or may be terminated during the term, or shortly after the scheduled maturity, of the related mortgage loan. See “—Renewal, Termination and Expiration of Leases and Reletting Entails Risks That May Adversely Affect Your Investment” and “Description of the Mortgage Pool—Tenant or Other Third Party Matters—Lease Terminations and Expirations”
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in this free writing prospectus. Furthermore, with respect to shadow anchored properties, the related borrower will not receive rental income from such shadow anchor tenant and is less likely to have contractual remedies if such shadow anchor tenant terminates its lease or ceases operations.
Retail properties that have anchor tenant-owned stores often have reciprocal easement agreements between the retail property owner and such anchor tenants containing certain operating and maintenance covenants. Anchor tenants that own their own improvements are generally required to pay a contribution toward common area maintenance and real estate taxes on the improvements and related real property, in addition to the rent attributable to the underlying land. With respect to shadow anchor tenants, they may make a contribution toward common area maintenance if the reciprocal easement agreement contemplates shared responsibilities among affected property owners, but they do not pay rent. Operating covenants affecting anchor tenants may be included in the anchor tenant lease or in the reciprocal easement agreement, if any. Tenants whose leases have no operating covenants or whose covenants have expired previously or will expire during the terms of the related mortgage loan are or will not be contractually obligated to operate their stores at the applicable mortgaged property. Tenant leases at the mortgaged properties may have co-tenancy clauses which permit such stores to abate the rent payable, cease operating and/or terminate their leases if certain other stores (in particular those of anchor tenants or shadow anchor tenants) or a specified percentage of the stores at the related mortgaged property are not occupied and operating and also have certain other termination rights related to sales targets. See “Description of the Mortgage Pool—Tenant or Other Third Party Matters—Lease Terminations and Expirations—Terminations” in this free writing prospectus.
Certain tenant estoppels, including those of certain anchor tenants, obtained in connection with the origination of the mortgage loans identify disputes between the related borrower and the applicable anchor tenant or other tenants, or alleged defaults or potential defaults by the applicable property owner under the lease or reciprocal easement agreement. In addition, in the case of certain mortgaged properties, leases contain restrictions with respect to the use of other spaces or parcels at or near the subject mortgaged property that are in conflict with other leases or for which there is no corresponding restrictive covenant of record, which have resulted or may in the future result in disputes. Such disputes, defaults or potential defaults, could lead to a termination or attempted termination of the applicable lease or reciprocal easement agreement by the affected anchor tenant or other tenants or to litigation against the related borrower. We cannot assure you that the identified tenant disputes will not have a material adverse effect on the ability of the related borrowers to repay their portion of the mortgage loan. In addition, we cannot assure you that the tenant estoppels obtained identify all potential disputes that may arise with anchor tenants or other tenants. See representation and warranty nos. 8 and 44 on Annex C-1 to this free writing prospectus and the exceptions thereto on Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus).
In addition, retail properties frequently rely on adjacent properties for parking, access or other operational aspects, which can create risk. The landlord/borrower may agree to conditions or covenants in a retail lease based on such adjacent property continuing to provide such services or based upon operations at, or the continued maintenance of, such adjacent property. Accordingly, defaults on the part of the landlord/borrower could occur under that retail lease as a result of circumstances over which the landlord/borrower does not have direct control. The landlord/borrower’s sole remedy would be under a reciprocal easement agreement (or comparable agreement), if any, with the adjacent property owner.
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Rental payments from tenants of retail properties typically comprise the largest portion of the net operating income of those mortgaged properties. Certain tenants at the retail mortgaged properties may be paying rent but are not yet in occupancy or have signed leases but have not yet started paying full unabated rent and/or are not yet in occupancy. See also Annex A-1, including the footnotes thereto, to this free writing prospectus. Risks applicable to anchor tenants (such as bankruptcy, failure to renew leases, early terminations of leases and vacancies) also apply to other tenants. See “—Renewal, Termination and Expiration of Leases and Reletting Entails Risks That May Adversely Affect Your Investment” below. See also “—Tenant Bankruptcies May Adversely Affect the Income Produced by the Mortgaged Properties and May Adversely Affect the Distributions on Your Certificates” below. We cannot assure you that the rate of occupancy at any mortgaged property will remain at the current levels or that the net operating income contributed by the mortgaged properties will remain at current or past levels. See “—Renewal, Termination and Expiration of Leases and Reletting Entails Risks That May Adversely Affect Your Investment” in this free writing prospectus. See representation and warranty no. 42 on Annex C-1 to this free writing prospectus and the exceptions thereto on Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus).
In addition, certain of the retail properties have specialty use tenants, such as movie theaters, health clubs, fitness centers, gas stations, automotive dealerships, educational facilities, dental or medical offices, restaurants, bakeries, dry cleaners with on-site processing facilities or parking garages, as part of the mortgaged property. These mortgaged properties and the related leased space may not be readily convertible (or convertible at all) to alternative uses if those properties were to become unprofitable or the leased spaces were to become vacant for any reason. For example, because of unique construction and/or equipment requirements of theaters and restaurants, any vacant space designed for such purposes would not easily be converted to other uses. In such cases, aspects of building site design and adaptability affect the value of properties with such tenants and other retailers at the mortgaged property. For example, the limited adaptability of certain shopping malls that have proven unprofitable has recently resulted in extremely high loss severities on mortgage loans secured by those shopping malls, which mortgage loans may have been owned by commercial mortgage-backed securitization trusts. In one particular case, a significant amount of advances made by the applicable servicer(s) of a mortgage loan secured by a shopping mall property, combined with low liquidation proceeds in respect of that property, resulted in a loss severity exceeding 100% of the outstanding principal balance of that mortgage loan. See “—Converting Commercial Properties to Alternative Uses May Require Significant Expenses Which Could Reduce Distributions on Your Certificates; and Limited Adaptability for Other Uses May Substantially Lower the Liquidation Value of a Mortgaged Property” below. In addition, decreasing patronage at a theater or restaurant tenant could adversely affect revenue of the tenant, which may, in turn, cause the tenant to experience financial difficulties, resulting in downgrades in their credit, lease defaults, and, in certain cases, bankruptcy filings. See “—Tenant Bankruptcies May Adversely Affect the Income Produced by the Mortgaged Properties and May Adversely Affect the Distributions on Your Certificates” below. Additionally, theater and restaurant receipts are also affected not only by objective factors but by subjective factors. For instance, restaurant receipts are affected by such varied influences as the current personal income levels in the community, an individual consumer’s preference for type of food, style of dining and restaurant atmosphere, the perceived popularity of the restaurant, food safety concerns related to personal health with the handling of food items at the restaurant or by food suppliers and the actions and/or behaviors of staff and management and level of service to the customers.
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Certain other tenants at the mortgaged properties, including health clubs, may have other unique risks associated with the type of business undertaken at their locations. Several factors may adversely affect the value and successful operation of a health club, including:
· | the physical attributes of the health club (e.g., its age, appearance and layout); |
· | the reputation, safety, convenience and attractiveness of the property to users; |
· | the quality and philosophy of management; |
· | management’s ability to control membership growth and attrition; |
· | competition in the tenant’s marketplace from other health clubs and alternatives to health clubs; or |
· | adverse changes in economic and social conditions and demographic changes (e.g., population decreases or changes in average age or income), which may result in decreased demand. |
In addition, there may be significant costs associated with changing consumer preferences (e.g., multi-purpose clubs from single-purpose clubs or varieties of equipment, classes, services and amenities). In addition, as with movie theaters, health clubs may not be readily convertible to alternative uses if those properties were to become unprofitable for any reason. The liquidation value of any such health club consequently may be less than would be the case of property readily adaptable to changing consumer preferences for other uses.
Certain of the retail properties may have significant tenants operating as medical office, urgent care, on-site patient care or other medical treatment service facilities. The performance of a medical office property may depend on (a) the proximity of such property to a hospital or other health care establishment and (b) reimbursements for patient fees from private or government-sponsored insurers. Issues related to reimbursement (ranging from nonpayment to delays in payment) from such insurers could adversely impact cash flow at such mortgaged property.
See “Description of the Mortgage Pool—Certain Characteristics of the Mortgage Pool—Property Type Concentrations” in this free writing prospectus.
Retail Bank Branches Have Special Risks. Certain of the mortgaged properties may include tenants that operate as bank branches. Six (6) mortgaged properties, collectively representing approximately 6.8% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date by allocated loan amount, each have a bank branch among the five (5) largest tenants at the related mortgaged property. For information regarding bank branch tenants at office properties that represent one or more of the five (5) largest tenants (by net rentable area leased), see Annex A-1 to this free writing prospectus. Bank branches are specialty-use properties that are outfitted with vaults, teller counters and other customary installations and equipment that require significant capital expenditures. The ability to lease these properties to entities other than financial institutions may be difficult due to the added cost and time of refitting the properties. Additionally, certain of these mortgaged properties may have been designated as historic or landmark buildings or may be located in areas designated as historic or landmark. Such properties may have restrictions related to renovations, construction or other restrictions and may not be permitted to be converted to alternative uses because of such restrictions.
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A concentration of leases to banks as to a related mortgage loan or an individual mortgaged property securing a related mortgage loan could have a negative effect on net operating income in the event of a downturn in the banking industry or a shift in the banking industry business model concerning retail branches. Individual banks, as well as the banking industry in general, may be adversely affected by negative economic and market conditions throughout the United States or in the local economies in which regional or community banks operate. In addition, changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System, may have an adverse impact on banks’ loan portfolios and allowances for loan losses. As a result, the mortgaged properties may experience higher rates of lease default or terminations in the event of a downturn in the banking industry than they would if the tenant base were more diversified. This, in turn, could cause losses on the mortgage loans and on your investment in the certificates offered hereby.
Office Properties Have Special Risks
Eleven (11) of the mortgaged properties, collectively representing approximately 25.1% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date by allocated loan amount, are office properties. See “Risk Factors—Special Risks of Mortgage Loans Secured by Office Properties” in the accompanying prospectus.
Certain of the office properties may be medical office properties or have significant tenants operating as medical office, urgent care, on-site patient care or other medical treatment service facilities. The performance of a medical office property may depend on (a) the proximity of such property to a hospital or other health care establishment and (b) reimbursements for patient fees from private or government-sponsored insurers. Issues related to reimbursement (ranging from nonpayment to delays in payment) from such insurers could adversely impact cash flow at such mortgaged property. See “Description of the Mortgage Pool—Certain Characteristics of the Mortgage Pool—Property Type Concentrations” in this free writing prospectus.
In addition, certain of the office properties include educational facilities as part of the collateral. Educational facilities present unique risks. See “Risk Factors—Risks Related to the Mortgage Loans—Retail Properties Have Special Risks” and “—Converting Commercial Properties to Alternative Uses May Require Significant Expenses Which Could Reduce Distributions on Your Certificates; and Limited Adaptability for Other Uses May Substantially Lower the Liquidation Value of a Mortgaged Property” and “Description of the Mortgage Pool—Property Type Concentrations” in this free writing prospectus.
Multifamily Properties Have Special Risks
Twenty-five (25) of the mortgaged properties, collectively representing approximately 21.8% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date by allocated loan amount, are multifamily properties (which are not residential cooperative properties. A large number of factors may adversely affect the value and successful operation of a multifamily rental property. We note in particular the following:
· | Certain of the multifamily rental properties have material tenant concentrations of students (and in certain cases, additional university housing may be planned in the area of the mortgaged property, which may reduce demand for units at the related mortgaged property). |
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· | Certain of the multifamily rental properties may have material concentrations of military personnel (and therefore may be materially adversely affected by the closing of, or a material reduction of personnel at, the local military base). |
· | Certain of the multifamily rental properties consist of senior housing, or are age-restricted senior independent living facilities for individuals 55-years-old or older, thus limiting the potential tenants. See “Risk Factors—Special Risks Associated with Residential Healthcare Facilities” and “—Special Risks of Mortgage Loans Secured by Healthcare-Related Properties” in the accompanying prospectus. |
· | Certain of the multifamily rental properties receive rent subsidies from the United States Department of Housing and Urban Development under its Section 8 program or otherwise or are otherwise intended to be utilized, in whole or in part, as affordable housing. |
· | Certain of the multifamily rental properties are subject to local rent control and rent stabilization laws. |
Certain states regulate the relationship of an owner of a multifamily property and its tenants. Commonly, these laws require a written lease, good cause for eviction, disclosure of fees, and notification to residents of changed land use, while prohibiting unreasonable rules, retaliatory evictions, and restrictions on a resident’s choice of unit vendors. Multifamily property owners have been the subject of suits under state “Unfair and Deceptive Practices Acts” and other general consumer protection statutes for coercive, abusive or unconscionable leasing and sales practices. A few states offer more significant protection. For example, in some states, there are provisions under law that limit the bases on which a landlord may terminate a tenancy or increase rent or prohibit a landlord from terminating a tenancy solely by reason of the sale of the owner’s building.
In addition to state regulation of the landlord-tenant relationship, numerous counties and municipalities impose rent control or rent stabilization on multifamily properties. These ordinances may limit rent increases to fixed percentages, to percentages of increases in the consumer price index, to increases set or approved by a governmental agency, or to increases determined through mediation or binding arbitration. Any limitations on a borrower’s ability to raise property rents may impair such borrower’s ability to repay its multifamily loan from its net operating income or the proceeds of a sale or refinancing of the related multifamily property or the lender’s proceeds of a sale of the property following foreclosure.
See “Description of the Mortgage Pool—Certain Characteristics of the Mortgage Pool—Property Type Concentrations” in this free writing prospectus and “Risk Factors—Special Risks of Mortgage Loans Secured by Multifamily Properties” in the accompanying prospectus.
Residential Cooperative Properties Have Special Risks
Twenty-eight (28) of the mortgaged properties (including the residential cooperative property identified on Annex A-1 to this free writing prospectus as Baywoods of Annapolis, representing approximately 1.4% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date, which is operated, in part, as a residential cooperative property and, in part, as a residential healthcare facility), collectively representing 7.0% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date by allocated loan amount, are residential cooperative properties. For purposes of this free writing prospectus, the residential cooperative property identified on Annex A-1 to this free writing
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prospectus as Baywoods of Annapolis, representing approximately 1.4% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date, is treated as a residential cooperative property notwithstanding that such mortgaged property is operated, in part, as a residential cooperative property and, in part, as a residential healthcare facility. Various factors may adversely affect the value and successful operation of a residential cooperative property, which could adversely affect payments on your certificates, including:
· | the ability of tenants to remain in a cooperative property after its conversion from a rental property, at below market rents and subject to applicable rent control and stabilization laws; |
· | the primary dependence of a borrower upon maintenance payments and any rental income from units or commercial areas to meet debt service obligations and the discretion afforded to the cooperative board of directors to establish maintenance charges payable by tenant-shareholders; |
· | the concentration of shares relating to units of the sponsor, owner or investor after conversion from rental housing, which may result in an inability to meet debt service obligations on the corporation’s mortgage loan if the sponsor, owner or investor is unable to make the required maintenance payments; |
· | the failure of a borrower to qualify for favorable tax treatment as a “cooperative housing corporation” in any one or more years, which may reduce the cash flow available to make payments on the related mortgage loan; and |
· | that, upon foreclosure, in the event a cooperative property becomes a rental property, all or certain units at that rental property could be subject to rent control, stabilization and tenants’ rights laws, at below market rents, which may affect rental income levels and the marketability and sale proceeds of the rental property as a whole; |
The value and successful operation of a residential cooperative property may also be impacted by the same factors which may impact the economic performance of a multifamily property; see “—Multifamily Properties Have Special Risks” in this free writing prospectus.
A residential cooperative building and the land under the building are owned or leased by a non-profit residential cooperative corporation. Its tenants own stock, shares or membership certificates in the corporation. This ownership entitles the tenant-stockholders to proprietary leases or occupancy agreements which confer exclusive rights to occupy specific units. Generally, the tenant-stockholders make monthly maintenance payments which represent their share of the cooperative corporation’s mortgage loan payments, real property taxes, maintenance, contributions to reserves and other expenses, less any income the corporation may receive. These payments are in addition to any payments of principal and interest the tenant-stockholder may be required to make on any loans secured by its shares in the cooperative.
With respect to the residential cooperative mortgage loans sold to the trust by National Cooperative Bank, N.A., due to attributes particular to residential housing cooperatives, certain information presented with respect to such mortgage loans differs from that presented for other mortgage loans included in the trust. Several of these differences are particularly relevant to your consideration of an investment in the offered certificates. In particular, the manner in which loan-to-value ratios, debt service coverage ratios and debt yields are calculated for the residential cooperative mortgage loans sold to the trust by National Cooperative Bank, N.A. differs from the manner in which such calculations are
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made for other mortgage loans included in the trust. For example, the appraised value of such a residential cooperative property used for purposes of determining the loan-to-value ratio for the related mortgage loan as of any date is the value estimate reflected in an appraisal of such residential cooperative property determined as if such residential cooperative property is operated as a residential cooperative and, in general, equals the sum of (i) the gross sellout value of all cooperative units in such residential cooperative property (applying a discount for units that are subject to existing rent-regulated or rent-controlled rental tenants as and if deemed appropriate by the appraiser), based in part on various comparable sales of cooperative apartment units in the market, plus (ii) the amount of the underlying debt encumbering such residential cooperative property. For any residential cooperative mortgage loans sold to the trust by National Cooperative Bank, N.A., this value, based upon the most recent appraisal as of the cut-off date, is reflected as the “Appraised Value” of a residential cooperative property on Annex A-1 to this free writing prospectus. With respect to the mortgage loan identified on Annex A-1 to this free writing prospectus as Baywoods of Annapolis, representing approximately 1.4% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date, the related mortgaged property is a continuing care retirement community comprised of (i) a portion of the mortgaged property operated as an age-restricted residential cooperative property with certain enhanced member services and (ii) a portion of the mortgaged property operated as a residential healthcare facility. The “Appraised Value” of the mortgaged property securing the mortgage loan identified on Annex A-1 to this free writing prospectus as Baywoods of Annapolis is equal to the sum of (i) the value of the portion of such mortgaged property operated as a residential cooperative property determined as if such residential cooperative property is operated as a residential cooperative and calculated as provided above,plus (ii) the value of the portion of such mortgaged property operated as a residential healthcare facility, in each case as set forth in the related appraisal. With respect to limited equity cooperatives (i.e., housing cooperatives in which eligible members purchase shares at below market prices and are subject to restrictions on the sale price for which units may be re-sold), the gross sellout value referenced above in this paragraph is calculated without regard to any applicable sale price restrictions. The comparable sales considered in the appraisers’ estimates of gross sellout values may have occurred at properties where the cooperative entity’s underlying mortgage debt per cooperative unit was substantially more or less than that at the applicable mortgaged property. The appraisers generally made no adjustments to comparable sales statistics to account for any such differences, although monthly unit maintenance obligations may have been considered. A residential cooperative property is also valued as a multifamily rental property to determine a “Coop-Rental Value” as set forth on Annex A-1 to this free writing prospectus. The value of a residential cooperative property as a multifamily rental property is the value estimate reflected in an appraisal of such residential cooperative property and, in general, is derived by applying an appropriate capitalization rate (as determined by the appraiser) to the underwritten net cash flow for such residential cooperative property. In addition, for purposes of determining the debt service coverage ratio and debt yield for a residential cooperative mortgage loan, the “underwritten net cash flow” for a residential cooperative property and the “underwritten net operating income” for a residential cooperative property is the projected net cash flow reflected in an appraisal of such residential cooperative property and, in general, equals projected operating income at the property assuming such property is operated as a rental property with rents and other income set at prevailing market rates (but taking into account the presence of existing rent-regulated or rent-controlled rental tenants), reduced by underwritten property operating expenses, a market-rate vacancy assumption and projected replacement reserves, in each case as determined by the appraiser. However, the projected net cash flow used in such determinations may differ materially from the scheduled monthly maintenance payments from the tenant-stockholders upon which residential cooperatives depend. In the case of the mortgage loan identified on
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Annex A-1 to this free writing prospectus as Baywoods of Annapolis, representing approximately 1.4% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date, the “underwritten net cash flow” and the “underwritten net operating income” for the related mortgaged property equals the sum of (i) the projected net cash flow for the portion of such mortgaged property operated as a residential cooperative property calculated as provided above,plus (ii) the projected net cash flow as calculated for the portion of such mortgaged property operated as a residential healthcare facility, in each case as set forth in the related appraisal. The loan-to-value ratios, debt service coverage ratios and debt yields presented herein with respect to a residential cooperative mortgage loan may differ from the loan-to-value ratios, debt service coverage ratios and debt yields that would have been determined for any such residential cooperative mortgage loan had a different methodology (including the methodology used for calculating such values with respect to the other mortgage loans sold to the depositor) been used.
With respect to information presented in Annex A-1 to this free writing prospectus with respect to mortgage loans secured by residential cooperative properties that have existing subordinate secured indebtedness, (1) the “Coop-Committed Secondary Debt” equals the balance of any subordinate line of credit mortgage loan, based on the full face amount of the subordinate line of credit mortgage loan, (2) the Whole Loan Cut-off Date Balance equals the sum of the cut-off date balance of the WFCM 2015-C29 trust mortgage loan plus the balance of each existing subordinate loan, assuming that such existing subordinate loan is fully advanced and the entire amount thereof is outstanding as of the cut-off date, except that (A) with respect to the mortgage loan secured by the mortgaged property identified on Annex A-1 to this free writing prospectus as 321 West 90th St. Owners Corp., representing approximately 0.2% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date, the Whole Loan Cut-off Date Balance also includes the cut-off date balance of the chattel mortgage encumbering such mortgaged property and (B) with respect to the 230 Garth loan, the existing chattel mortgage is assumed to have a cut-off date balance equal to the 230 Garth loan chattel mortgage OPB, (3) the Subordinate Secured Debt Original Balance is determined as if each existing subordinate loan amount is fully advanced on the date of closing of said subordinate loan, (4) the Subordinate Secured Debt Cut-off Date Balance with respect to the 230 Garth loan reflects the 230 Garth loan chattel mortgage OPB and (5) except with respect to the mortgage loan secured by the mortgaged property identified on Annex A-1 to this free writing prospectus as Baywoods of Annapolis, representing approximately 1.4% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date, the Whole Loan Debt Service, Whole Loan U/W NOI DSCR and Whole Loan U/W NCF DSCR are calculated assuming (A) that the subordinate secured indebtedness has been fully advanced and the entire amount thereof is outstanding as of the cut-off date (except, with respect to the 230 Garth loan, the subordinate secured indebtedness is assumed to have a cut-off date balance equal to the 230 Garth loan chattel mortgage OPB), (B) that the applicable interest rate for the subordinate secured indebtedness (other than for the subordinate secured indebtedness with respect to the 230 Garth loan and the subordinate secured indebtedness comprised of a chattel mortgage with respect to the mortgage loan secured by the mortgaged property identified on Annex A-1 to this free writing prospectus as 321 West 90th St. Owners Corp., representing approximately 0.2% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date, each of which is determined based upon the actual principal and/or interest payments in effect as of the cut-off date) is determined using 1-month LIBOR in effect as of the cut-off date and giving effect to any applicable interest rate floor and (C) that any initial interest-only period for such subordinate indebtedness has expired and the related borrower is required to make scheduled principal plus interest payments as set forth in the corresponding promissory note. With respect to the mortgage loan secured by the mortgaged property identified on Annex A-1 to this free writing prospectus as Baywoods of
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Annapolis, the Whole Loan Debt Service, Whole Loan U/W NOI DSCR and Whole Loan U/W NCF DSCR are calculated assuming (A) that the subordinate line of credit mortgage loan has been fully advanced and the entire amount thereof is outstanding as of the cut-off date, (B) that interest on the subordinate line of credit mortgage loan is accruing at a rate of 4.000%per annum on an actual/360 basis and (C) that any initial interest-only period on the subordinate line of credit mortgage loan has expired and the borrower is required to make payments of interest plus fixed payments of principal based on a 240-month straight-line amortization schedule. As used in this paragraph: “230 Garth loan” means the mortgage loan secured by the mortgaged property identified on Annex A-1 to this free writing prospectus as 230 Garth Road Owners, Inc., representing approximately 0.4% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date; and “230 Garth loan chattel mortgage OPB” means $265,650, which such amount is the outstanding principal balance of 230 Garth loan chattel mortgage as of March 19, 2015.
With respect to the mortgage loans secured by residential cooperative properties, each mortgaged property is owned by the borrower, which is a cooperative housing corporation. No individual or entity (other than the borrower) has recourse obligations with respect to the loans, including pursuant to any guaranty or environmental indemnity. Accordingly, no information is presented in the column labeled Sponsor in Annex A-1 to this free writing prospectus with respect to the residential cooperative mortgage loans sold to the depositor by National Cooperative Bank, N.A. for inclusion in the trust. In addition, with respect to information presented in Annex A-1 to this free writing prospectus with respect to mortgage loans secured by residential cooperative properties: (1) Coop – Sponsor Units refers to the number of units owned by the original sponsor responsible for the mortgaged property’s conversion into cooperative ownership; such sponsor may rent its units or opt to market them for sale (either individually or as a whole); (2) Coop – Investor Units refers to a bulk number of units owned by a non-tenant investor(s), who can rent or sell the units; (3) Coop – Coop Units refers to the number of units owned by the borrower, which is a cooperative corporation; In this capacity, the cooperative may manage its units as an investor would or use the units for the benefit of its cooperative members; (4) Coop – Unsold Percent refers to the ratio of the total number of units collectively owned by the original sponsor, a non-tenant investor or the cooperative corporation to the number of units with shares allocated; and (5) Coop – Sponsor/Investor Carry is the sponsor’s or the investor’s net cash flow calculated by subtracting maintenance charges on the sponsor or investor owned units from the actual rents payable on such units, to the extent available. In the case of the mortgage loan identified on Annex A-1 to this free writing prospectus as Baywoods of Annapolis, representing approximately 1.4% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date, all such unit calculations are limited to units which are operated as residential cooperative apartment units and exclude the rooms located in the portion of the related mortgaged property operated as a residential healthcare facility.
In addition, due to the specialized nature of residential housing cooperatives, certain information presented in and shown on Annex A-1 to this free writing prospectus with respect to mortgage loans (other than such residential cooperative mortgage loans) is not presented with respect to the residential cooperative mortgage loans sold to the depositor by National Cooperative Bank, N.A. for inclusion in the trust and is, instead, reflected as not applicable (NAP). See “—Appraisals May Not Accurately Reflect the Value of the Mortgaged Properties” below and “Certain Characteristics of Mortgage Loans Secured by Residential Cooperatives” in Annex B to this free writing prospectus.
In addition, mortgage loans secured by residential cooperative properties are uniquely structured and, in certain cases, permit the borrower to incur (1) one or more loans to the
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related mortgage borrower that are secured, on a subordinated basis, by a mortgage lien on a mortgaged property that also secures a mortgage loan included in the trust and (2) unsecured loans to the related borrower. National Cooperative Bank, N.A. commonly acts as the lender in such arrangements and is permitted pursuant to the pooling and servicing agreement to engage in such lending with respect to the residential cooperative mortgage loans included in the trust. Each of the mortgage loans secured by residential cooperative properties permit cooperative unit loans that are secured by direct equity interests in the related borrower. See “—Risks Related to the Offered Certificates—If any Master Servicer or any Special Servicer Purchases Certificates or Has Investments Related to a Borrower or Other Person, a Conflict of Interest May Arise Between Its Own Interests and Its Duties to the Trust Fund” and “—Various Other Securitization-Level Conflicts of Interest May Have an Adverse Effect on Your Offered Certificates—Conflicts Between the Trust Fund and the Mortgage Loan Sellers and Their Affiliates”, “Description of the Mortgage Pool—Subordinate and/or Other Financing—Existing (Secured Financing and Mezzanine and Similar Financing)” and “Transaction Parties—Affiliations and Certain Relationships Among Certain Transaction Parties” in this free writing prospectus and “Certain Legal Aspects of Mortgage Loans and Leases—Cooperative Loans” in the accompanying prospectus.
In certain instances, a residential cooperative borrower may not own the entire apartment building and the land under the building, but rather owns a condominium unit that is generally comprised of the residential portions of that apartment building. The other condominium units in that apartment building will generally comprise commercial space and will generally be owned by persons or entities other than the residential cooperative borrower. In instances where an apartment building has been converted to the condominium form of ownership, certain of the common areas in that building may be owned by the residential cooperative borrower and other common areas (often including the land under the building) may constitute common elements of the condominium, which common elements are owned in common by the residential cooperative borrower and the owners of the other condominium units. Where the apartment building is subject to the condominium form of ownership, each condominium unit owner will be directly responsible for the payment of real estate taxes on that owner’s unit. Certain specified maintenance and other obligations, including hazard and liability insurance premiums, may not be the direct responsibility of the residential cooperative borrower but rather will be the responsibility of the condominium board of managers. The ability of the condominium board of managers to pay certain expenses of the building will be dependent upon the payment by all condominium unit owners of common charges assessed by the condominium board of managers. As with other condominium structures, with respect to any such mortgage loan, the borrower may not control the appointment and voting of the condominium board or the condominium owners may be able to take actions or cause the condominium association to take actions that would affect the borrower’s unit without the borrower’s consent. Even if the borrower or its designated board members, either through control of the appointment and voting of sufficient members of the condominium board or by virtue of other provisions in the condominium documents, has consent rights over actions by the condominium associations or owners, we cannot assure you that the condominium board will not take actions that would materially adversely affect the borrower’s unit.
In the case of the residential cooperative properties included in the trust, information regarding the five (5) largest tenants has not been reflected on Annex A-1 to this free writing prospectus or otherwise reflected in the portions of this free writing prospectus that discuss characteristics of the five (5) largest tenants at each mortgaged property. Notwithstanding the exclusion of the residential cooperative properties from such discussion, certain residential cooperative properties are heavily dependent on income from
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commercial tenancies and may, in certain instances, have space that is devoted to specialty uses. These uses may include, without limitation, dental or medical offices, restaurants, and/or parking garages. The specialty use spaces may not be readily convertible (or convertible at all) to alternative uses if those uses were to become unprofitable, or the spaces were to become vacant, for any reason. See “—Converting Commercial Properties to Alternative Uses May Require Significant Expenses Which Could Reduce Distributions on Your Certificates; and Limited Adaptability for Other Uses May Substantially Lower the Liquidation Value of a Mortgaged Property” in this free writing prospectus.
In addition, certain of the residential cooperative properties are also subject to government rent control regulations which limit the rental payments payable by subtenants of unit owners and which would be applicable to the Mortgaged Property in whole or in part if the same were operated as a multifamily rental property. See “Description of the Mortgage Pool—Certain Characteristics of the Mortgage Pool—Property Type Concentrations” in this free writing prospectus.
Additionally, with respect to one (1) of the residential cooperative properties, identified on Annex A-1 to this free writing prospectus as Baywoods of Annapolis, representing approximately 1.4% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date, such mortgaged property is a continuing care retirement community comprised of (i) a portion of the mortgaged property operated as an age-restricted residential cooperative property with certain enhanced member services and (ii) a portion of the mortgaged property operated as a residential healthcare facility, which provides assisted living and nursing care to its residents. Residential healthcare properties are subject to risks unique to their business. See “Risk Factors—Special Risks Associated with Residential Healthcare Facilities” and “—Special Risks of Mortgage Loans Secured by Healthcare-Related Properties” in the accompanying prospectus. Notwithstanding that such mortgaged property is operated, in part, as a residential cooperative property and, in part, as a residential healthcare facility, the mortgaged property identified on Annex A-1 to this free writing prospectus as Baywoods of Annapolis is treated as a residential cooperative property for all purposes of this free writing prospectus.
Self-Storage Properties Have Special Risks
Twenty (20) of the mortgaged properties, collectively representing approximately 6.8% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date by allocated loan amount, are self-storage properties. See “Risk Factors—Special Risks of Mortgage Loans Secured by Warehouse and Self-Storage Facilities” in the accompanying prospectus.
Some of the self-storage mortgaged properties securing mortgage loans in the trust may lease a significant portion of the related mortgaged property to a single tenant. See “—Renewal, Termination and Expiration of Leases and Reletting Entails Risks That May Adversely Affect Your Investment” below. In addition, some of the self-storage mortgaged properties securing mortgage loans in the trust may have a material portion of the mortgaged property leased to tenants for the storage of recreational vehicles and/or boats or for use as office, retail or warehouse space or may derive income from sources unrelated to self-storage such as cell phone tower leases, truck rentals for self-moves, box sales, auction income and storage and servicing of rental vehicles. Tenants for such space tend to be more transient and the net cash flow for the related mortgaged property may be subject to greater fluctuations. See Annex A-1, including the footnotes thereto, to this free writing prospectus for information regarding the self-storage mortgaged properties that use a material portion of the mortgaged property for recreational vehicle leases.
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In addition, tenants at self-storage properties tend to require and receive privacy, anonymity and efficient access, each of which may heighten environmental and other risks related to such property as the borrower may be unaware of the contents in any self-storage unit. No environmental assessment of a mortgaged property included an inspection of the contents of the self-storage units at the self-storage mortgaged properties and there is no assurance that all of the units included in the self-storage mortgaged properties are free from hazardous substances or other pollutants or contaminants or will remain so in the future.
Furthermore, certain mortgage loans may be secured by self-storage properties that are affiliated with a franchise company through a franchise agreement. The performance of a self-storage property affiliated with a franchise company may be affected by the continued existence and financial strength of the franchisor, the public perception of a service mark, and the duration of the franchise agreement. The transferability of franchise license agreements is generally restricted. In the event of a foreclosure, the lender or its agent may not have the right to use the franchise license without the franchisor’s consent.
Hospitality Properties Have Special Risks
Seven (7) of the mortgaged properties, collectively representing approximately 4.9% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date by allocated loan amount, are hospitality properties, seven (7) of which are subject to a franchise agreement, license agreement, membership agreement or hotel management agreement. See “Risk Factors—Special Risks of Mortgage Loans Secured by Hospitality Properties” in the accompanying prospectus.
Certain of the hospitality properties pose unique risks with respect to the franchise agreements, license agreements or membership agreements under which, or the hotel management company with whom, they operate.
The performance of a hospitality property affiliated with a franchise or hotel management company depends in part on:
· | the continued existence and financial strength of the franchisor or hotel management company; |
· | the public perception of the franchise or hotel chain service mark; and |
· | the duration of the franchise, license, membership or management agreement, as applicable. |
The continuation of a franchise agreement, license agreement, membership agreement or management agreement is subject to specified operating standards, such as maintenance of quality assurance scores, and other terms and conditions set forth in such agreements. The failure of a borrower to maintain such standards or adhere to other applicable terms and conditions could result in the loss or cancellation of their rights under the franchise or hotel management company agreement, license agreement, membership agreement or management agreement. Any loss or cancellation of rights under a franchise agreement, license agreement or membership agreement could result in a disruption in reservation bookings at the related hotel property and could adversely impact the public perception of the hotel property. Certain of the borrowers may not be in compliance with all of their respective franchise agreement, license agreement, membership agreement or management agreement standards. See “Description of the Mortgage Pool—Other Matters” in this free writing prospectus. We cannot assure you that a replacement franchise, license,
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membership or hotel management agreement could be obtained in the event of termination. In addition, replacement franchisors, licensors and/or hotel managers may require significantly higher fees as well as an investment of capital to bring the hospitality property into compliance with the requirements of the replacement franchisor, licensor and/or hotel manager. Any provision in a franchise agreement, license agreement, membership agreement or management agreement providing for termination because of a bankruptcy of a franchisor or manager generally will not be enforceable.
The transferability of franchise, license, membership and hotel management agreements is restricted. In the event of a foreclosure, the lender generally will not have the right to use the franchise license without the franchisor’s consent. Conversely, in the case of certain mortgage loans, the lender may be unable to remove a franchisor, licensor or a hotel management company that it desires to replace prior to a foreclosure except in limited circumstances or following a foreclosure. In addition, a franchisor, licensor or hotel management company may have a right of first refusal to acquire the related hospitality property if it is proposed to be transferred (in particular, if it is proposed to be transferred to a competitor). If a franchisor, licensor or hotel management company cannot be terminated and the related franchise/management agreement imposes restrictions on transferees of the subject hospitality property, the liquidation value of that hospitality property could be materially impaired.
Certain of the hospitality properties are associated with hotel brands through franchise, membership or licensing agreements that, in the event of a foreclosure proceeding initiated on behalf of the trust, are not assignable or require franchisor consent for subsequent transfers. To the extent a hotel includes a franchise arrangement, the lender may have obtained a comfort letter from the licensor or franchisor stating that the trust will be permitted to enter into a new license or franchise agreement with the licensor or franchisor subject to the applicable terms and conditions thereof. To the extent that the related special servicer causes the trust or a single purpose entity owned by the trust to acquire a mortgaged property that has a franchise, membership or license agreement or that requires a successor or replacement franchisee, member or licensee to have a specified net worth, such special servicer will be required, to the extent consistent with the servicing standard, to take all actions reasonably necessary to permit the mortgaged property to maintain its franchise, membership interest or license with the same franchisor or licensor in place prior to such foreclosure. We cannot assure you that the trust or such single purpose entity owned by the trust will be able to maintain such license, membership interest or franchise at that time.
In addition, certain of the hospitality properties are subject to license, membership or franchise agreements which expire prior to the maturity of each of the respective mortgage loans. In those cases, the related mortgage loan documents generally require the applicable borrower to provide evidence prior to termination of the license, membership or franchise agreement that the license, membership or franchise agreement has been renewed or replaced in accordance with the terms of the mortgage loan documents. We cannot assure you that such agreements will be renewed. In the event the related borrower fails to deliver such evidence by the required date, the lender may hold all excess cash flow from the mortgaged property after payment of debt service, funding of reserves and certain other required expenditures, as cash collateral until such license, membership or franchise agreement is renewed or replaced in accordance with the terms of the mortgage loan documents or other remedies may apply, including personal liability to the related borrower or guarantors. See “Description of the Mortgage Pool—Certain Characteristics of the Mortgage Pool—Property Type Concentrations” in this free writing prospectus.
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In some cases where a hospitality property is subject to a license, membership or franchise agreement, the licensor or franchisor has required the completion of various repairs and/or renovations pursuant to a property improvement plan issued by the franchisor. Failure to complete such repairs and/or renovations in accordance with the plan could result in the hospitality property’s losing its license, membership interest or franchise. Annex A-1 sets forth the amount of reserves, if any, established under the related mortgage loans in connection with any such repairs and/or renovations. We cannot assure you that any such amount reserved will be sufficient to complete the repairs and/or renovations required with respect to any affected hospitality property. In addition, in some cases, that reserve will be maintained by the franchisor or property manager. Furthermore, the lender may not require a reserve for repairs and/or renovations in all instances.
In addition, there may be significant risk associated with hospitality properties that have not entered into or become a party to a franchise arrangement. Hospitality properties often enter into franchise, membership or license agreements in order to align the hospitality property with a certain public perception or to benefit from a centralized reservation system. We cannot assure you that hospitality properties that lack such benefits will be able to operate successfully on an independent basis. See “Description of the Mortgage Pool—Certain Characteristics of the Mortgage Pool—Property Type Concentrations” in this free writing prospectus.
Furthermore, certain of the hospitality properties have specialty use tenants, such as health clubs, fitness centers, restaurants or parking garages, as part of the mortgaged property. See “—Retail Properties Have Special Risks” above.
Industrial Properties Have Special Risks
Ten (10) of the mortgaged properties, collectively representing approximately 2.7% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date by allocated loan amount, are industrial properties. Significant factors determining the value of industrial properties include:
· | the quality of tenants; |
· | reduced demand for industrial space because of a decline in a particular industry segment; |
· | the property becoming functionally obsolete; |
· | unavailability of labor sources; |
· | changes in access, energy prices, strikes, relocation of highways, the construction of additional highways or other factors; |
· | changes in proximity of supply sources; |
· | the expenses of converting a previously adapted space to general use; |
· | building design and adaptability; and |
· | the location of the property. |
Concerns about the quality of tenants, particularly major tenants, are similar in both office properties and industrial properties, although industrial properties are more frequently
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dependent on a single tenant. In addition, properties used for many industrial purposes are more prone to environmental concerns than other property types.
Aspects of building site design and adaptability affect the value of an industrial property. Site characteristics which are valuable to an industrial property include clear heights, column spacing, zoning restrictions, number of bays and bay depths, divisibility, truck turning radius and overall functionality and accessibility. Location is also important because an industrial property requires the availability of labor sources, proximity to supply sources and customers and accessibility to rail lines, major roadways and other distribution channels.
Industrial properties may be adversely affected by reduced demand for industrial space occasioned by a decline in a particular industry segment (e.g., a decline in defense spending), and a particular industrial property that suited the needs of its original tenant may be difficult to relet to another tenant or may become functionally obsolete relative to newer properties. In addition, lease terms with respect to industrial properties are generally for shorter periods of time than other commercial properties and may result in a substantial percentage of leased space expiring in the same year at any particular industrial property.
In addition, because of unique construction requirements of many industrial properties, any vacant industrial property space may not be easily converted to other uses. Thus, if the operation of any of the industrial properties becomes unprofitable due to competition, age of the improvements or other factors such that the borrower becomes unable to meet its obligations on the related mortgage loan, the liquidation value of that industrial property may be substantially less, relative to the amount owing on the related mortgage loan, than would be the case if the industrial property were readily adaptable to other uses. Further, specialized equipment may make adaptations to such properties time-consuming and costly, which may adversely affect re-tenanting. See “Description of the Mortgage Pool—Other Matters” in this free writing prospectus.
Further, certain of the industrial properties have tenants that are subject to risks unique to their business. Because of seasonal use, leases at such facilities are customarily for shorter terms, making income potentially more volatile than for properties with longer term leases. In addition, such facilities require customized refrigeration design, rendering them less readily convertible to alternative uses.
See “Description of the Mortgage Pool—Certain Characteristics of the Mortgage Pool—Property Type Concentrations” in this free writing prospectus.
Mixed Use Facilities Have Special Risks
Two (2) mortgaged properties, collectively representing approximately 2.3% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date by allocated loan amount, are mixed use properties, which properties contain a mix of office, retail and industrial property. Accordingly, each such mortgaged property is subject to the risks described in “—Retail Properties Have Special Risks”, “—Office Properties Have Special Risks” and “—Multifamily Properties Have Special Risks” above. See Annex A-1 to this free writing prospectus for information regarding tenants that are among the five largest tenants at each mixed use property.
Mixed use properties may also be subject to additional risks, including the property manager’s inexperience in managing the different property types that comprise such mixed use property.
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Data Center Properties Have Special Risks
One (1) of the mortgaged properties, representing approximately 1.3% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date by allocated loan amount, is comprised exclusively of, or are substantially comprised of, a data center. The primary function of a data center is to provide a secure location for back-up data storage. Data centers are subject to similar risks as office buildings. The value of a data center will be affected by its telecommunications capacity, availability of sufficient power, and availability of support systems including environmental, temperature and hazard risk control, physical security, and redundant backup systems. As data centers contain sensitive and highly costly equipment and connections, they are subject to heightened risk in the event of fire, natural disaster or terrorism. In addition, data centers can be the subject of build-to-suit construction to specific user requirements. As such, if the lease with a data center user is terminated for any reason, the cost and time to adapt the space to other users may be considerable. Further, data center properties may not be readily convertible (or convertible at all) to alternative uses if those properties were to become unprofitable, or if the leased spaces were to become vacant, for any reason. See “—Converting Commercial Properties to Alternative Uses May Require Significant Expenses Which Could Reduce Distributions on Your Certificates; and Limited Adaptability for Other Uses May Substantially Lower the Liquidation Value of a Mortgaged Property” in this free writing prospectus and see “Summaries of the Fifteen Largest Mortgage Loans–Dulles North Corporate Parks” in Annex A-3 to this free writing prospectus.
Parking Areas Have Special Risks
One (1) of the mortgaged properties, securing approximately 0.8% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date, is comprised exclusively of a parking garage. The primary source of income for parking lots and garages is the fees charged for parking spaces. Factors affecting the success of a parking lot or garage include:
· | the number of rentable parking spaces and rates charged; |
· | the location of the lot or garage and, in particular, its proximity to places where large numbers of people work, shop or live; |
· | the amount of alternative parking spaces in the area; |
· | the availability of mass transit; and |
· | the perceptions of the safety, convenience and services of the lot or garage. |
Aspects of building site design and adaptability affect the value of a parking garage facility. Site characteristics that are valuable to a parking garage facility include location, clear ceiling heights, column spacing, zoning restrictions, number of spaces and overall functionality and accessibility.
In addition, because of the unique construction requirements of many parking garages and because a parking lot is often vacant paved land without any structure, a vacant parking garage facility or parking lot may not be easily converted to other uses.
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Manufactured Housing Community Properties Have Special Risks
Two (2) of the mortgaged properties, collectively representing approximately 0.7% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date by allocated loan amount, are manufactured housing community properties.
The successful operation of a manufactured housing community property may depend upon the number of other competing residential developments in the local market, such as:
· | other manufactured housing community properties; |
· | apartment buildings; and |
· | site-built single family homes. |
Other factors affecting the successful operation of a manufactured housing community property may also include:
· | the physical attributes of the community, including its age and appearance; |
· | the location of the manufactured housing community property; |
· | the ability of management to provide adequate maintenance and insurance; |
· | the types of services or amenities it provides; |
· | the property’s reputation; and |
· | state and local regulations, including rent control and rent stabilization as well as tenant association rights. |
Manufactured housing community properties are “special purpose” properties that generally cannot be readily converted to general residential, retail or office use. Thus, if the operation of any of the manufactured housing community properties becomes unprofitable due to competition, age of the improvements or other factors such that the related borrower becomes unable to meet its obligations on the related mortgage loan, the liquidation value of that manufactured housing community property may be substantially less, relative to the amount owing on the related mortgage loan, than would be the case if the manufactured housing community property were readily adaptable to other uses.
With respect to certain of the mortgage loans secured by manufactured housing community properties, the related mortgaged property may be subject to rent control and other laws regulating the relationship between a property owner and its residential tenants.
Additionally, certain of manufactured housing community properties securing mortgage loans in the trust may be age restricted to individuals who satisfy a minimum age requirement (generally 55 years old), whether by recorded covenants or for self-imposed marketing purposes. Such restrictions limit the related mortgaged properties’ potential residents and may affect property performance.
Some of the manufactured housing community mortgaged properties securing mortgage loans in the trust have limited or no amenities, which may also affect property performance.
Some of the manufactured housing community mortgaged properties securing mortgage loans in the issuing entity have a material number of recreational vehicle pads. Tenants for such pads tend to be more transient and the net cash flow for the related mortgaged
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property may be subject to greater fluctuations. Rentals of recreational vehicle pads may also be more seasonal in nature.
Some of the manufactured housing community mortgaged properties securing the mortgage loans in the issuing entity have a material number of leased homes that are currently owned by the related borrower or an affiliate thereof and rented by the respective tenants like apartments. In circumstances where the leased homes are owned by an affiliate of the borrower, the related pads may, in some cases, be subject to a master lease with that affiliate. In such cases, the tenants will tend to be more transient and less tied to the property than if they owned their own home. Such leased homes do not, in all (or, possibly, in any) such cases, constitute collateral for the related mortgage loan. Some of the leased homes that are not collateral for the related mortgage loan are rented on a lease-to-own basis. In some cases, the borrower itself owns, leases, sells and/or finances the sale of homes, although generally the related income therefrom will be excluded for loan underwriting purposes. See also representation and warranty no. 33 on Annex C-1 to this free writing prospectus and the exceptions thereto on Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus).
Some of the manufactured housing community mortgaged properties securing the mortgage loans are not connected to public water and/or sewer systems. In such cases, the borrower could incur a substantial expense if it were required to connect the property to such systems in the future. In addition, the use of well water and/or septic systems or private sewage treatment facilities enhances the likelihood that the property could be adversely affected by a recognized environmental condition that impacts soil and groundwater.
Some of the manufactured housing community mortgaged properties securing the mortgage loans in the issuing entity have tenants that may not have leases and, accordingly, that are not obligated to remain at the mortgaged property for any extended period.
Depending on the location of a manufactured housing community property, occupancy and collections may be highly seasonal. For example, a manufactured housing community in the southern portion of the United States might earn most of its income from late fall to early spring. In addition, under such circumstances, a large number of tenants may be in actual occupancy only during a portion of the calendar year and may prepay a substantial amount of their rent for the period that they are not actually living in the community. If a borrower defaults while holding those prepayments of rent, a lender may not be able to recover such amounts.
Because tenants at manufactured housing communities tend to be of modest income and means and sometimes unstable employment, they can be frequently late or delinquent on rent, even in cases where the tenant may ultimately pay all its rent due over time. Accordingly, a higher percentage of rental payments may be delinquent than in the case of other income producing properties.
In addition, a manufactured housing community mortgaged property whose use is legally non-conforming can create special zoning risks where, in particular, conformity to current zoning is required upon damage to a certain percentage of the units (as opposed to the pads themselves). Even if building ordinance or law insurance were obtained, a casualty necessitating compliance with current zoning could result in the use’s being discontinued, and available insurance proceeds being insufficient (because of the relatively insignificant value of insurable improvements) to pay off the related mortgage loan. See “—
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Mortgaged Properties That Are Not in Compliance with Zoning and Building Code Compliance and Use Restrictions Could Adversely Affect Distributions on Your Certificates” and “Description of the Mortgage Pool—Assessments of Property Value and Condition—Zoning and Building Code Compliance” in this free writing prospectus.
Some of the manufactured housing community mortgaged properties securing the mortgage loans in the issuing entity are located, in whole or in part, in a flood zone that requires the related borrower to maintain flood insurance if it owns any material structures located therein. In addition, even if there are no material borrower-owned structures located in that flood zone, the potential for flooding may be a deterrent to tenants. See “—The Absence of or Inadequacy of Insurance Coverage on the Property May Adversely Affect Distributions on Your Certificates” in this free writing prospectus. See also representation and warranty no. 18 on Annex C-1 to this free writing prospectus and the exceptions thereto on Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus).
For purposes of the statistical presentation in this free writing prospectus, the number of units shown for a manufactured housing community mortgaged property includes manufactured home pads and recreational vehicle pads and may also include manager apartments, rental apartments, stick-built homes or other rentable space that are ancillary to the operation of the mortgaged property.
See “Risk Factors—Special Risks Associated with Manufactured Housing Properties” in the accompanying prospectus.
Condominium Properties Have Special Risks
The management and operation of a condominium is generally controlled by a condominium board representing the owners of the individual condominium units, subject to the terms of the related condominium rules or by-laws. Generally, the consent of a majority of the board members is required for any actions of the condominium board and a unit owner’s ability to control decisions of the board are generally related to the number of units owned by such owner as a percentage of the total number of units in the condominium, although the condominium rules or by-laws may otherwise allocate the right to select board members. In certain cases, the related borrower does not have a majority of votes on the condominium board. See “Description of the Mortgage Pool—Certain Characteristics of the Mortgage Pool—Condominium Structures” in this free writing prospectus.
The condominium board is generally responsible for administration of the affairs of the condominium, including providing for maintenance and repair of common areas, adopting rules and regulations regarding common areas, and obtaining insurance and repairing and restoring the common areas of the property after a casualty. Notwithstanding the insurance and casualty provisions of the related mortgage loan documents, the condominium board may have the right to control the use of casualty proceeds. In addition, the condominium board generally has the right to assess individual unit owners for their share of expenses related to the operation and maintenance of the common elements. In the event that an owner of another unit fails to pay its allocated assessments, the related borrower may be required to pay such assessments in order to properly maintain and operate the common elements of the property. Although the condominium board generally may obtain a lien against any unit owner for common expenses that are not paid, such lien generally is extinguished if a lender takes possession pursuant to a foreclosure. Each unit owner is responsible for maintenance of its respective unit and retains essential operational control over its unit.
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Certain condominium declarations and/or local laws provide for the withdrawal of a property from a condominium structure under certain circumstances. For example, the New York Condominium Act provides for a withdrawal of the property from a condominium structure by vote of 80% of unit owners. If the condominium is terminated, the building will be subject to an action for partition by any unit owner or lienor as if owned in common. The New York Condominium Act also provides that in the event 75% or more of the common areas are subject to a condemnation and 75% of the unit owners (in number and common interest) do not promptly resolve to restore, then any unit owner can bring a partition action. A partition action could cause an early and unanticipated prepayment of the mortgage loan. We cannot assure you that the proceeds from partition will be sufficient to satisfy borrower’s obligations under the mortgage loan.
Due to the nature of condominiums and a borrower’s ownership interest therein, a default on a mortgage loan secured by the borrower’s interest in one or more condominium units may not allow the related lender the same flexibility in realizing upon the underlying real property as is generally available with respect to non-condominium properties. The rights of any other unit owners, the governing documents of the owners’ association and state and local laws applicable to condominiums must be considered and respected. Consequently, servicing and realizing upon such collateral could subject the issuing entity to greater expense and risk than servicing and realizing upon collateral for other mortgage loans that are not secured by condominium units.
Various Limitations and Restrictions Imposed by Affordable Housing Covenants or Programs May Result in Losses on the Mortgage Loans
Certain of the mortgage loans are or, in the future, may be secured by mortgaged properties that are subject to certain affordable housing covenants and other covenants and restrictions with respect to various tax credit, city, state and federal housing subsidies, rent stabilization or similar programs, in respect of various units within the mortgaged properties, or the mortgaged properties may benefit from government-sponsored tenant subsidy programs. The limitations and restrictions imposed by these programs could result in losses on the mortgage loans. In addition, in the event that the program is cancelled or the benefits thereunder are reduced, those circumstances could result in less income for the project. These programs may entail, among other restrictions:
· | rent limitations that would adversely affect the ability of a borrower to increase rents to maintain the condition of their mortgaged properties and satisfy operating expenses; |
· | tenant income restrictions that may reduce the number of eligible tenants in those mortgaged properties and result in a reduction in occupancy rates; and |
· | with respect to residential cooperative properties, restrictions on the sale price for which units may be re-sold. |
The difference in rents between subsidized or supported properties and other multifamily rental properties in the same area may not be a sufficient economic incentive for some eligible tenants to reside at a subsidized or supported property that may have fewer amenities or be less attractive as a residence. As a result, occupancy levels at a subsidized or supported property may decline, which may adversely affect the value and successful operation of such property. See “Description of the Mortgage Pool—Certain Characteristics of the Mortgage Pool—Property Type Concentrations” in this free writing prospectus.
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Renewal, Termination and Expiration of Leases and Reletting Entails Risks That May Adversely Affect Your Investment
Repayment of mortgage loans secured by retail, office and industrial properties will be affected by the expiration of leases and the ability of the related borrowers and property managers to renew the leases or to relet the space on comparable terms. In addition, there are other factors, including changes in zoning or tax laws, restrictive covenants, tenant exclusives and rights of first refusal or rights of first offer to lease or purchase, the availability of credit for refinancing and changes in interest rate levels that may adversely affect the value of a project and/or the borrower’s ability to sell or refinance without necessarily affecting the ability to generate current income. Certain mortgaged properties securing the mortgage loans may be leased in whole or in part to government-sponsored tenants whose ability to pay rent depends on appropriations and some of whom have the right to cancel their leases at any time because of lack of appropriations. In some of these cases, the government-sponsored tenant has the right to terminate its lease at any time for any reason. See Annex A-1 for an identification of any government-sponsored tenant that constitutes one of the five largest tenants (or, if applicable, the single tenant) at any such mortgaged property.
In addition, certain mortgaged properties may have significant tenants or groups of tenants, that are paying rent but are not in occupancy or may have material vacant space that is not leased, and in certain cases, the occupancy rate (calculated as described in Annex B to this free writing prospectus) isless than 80%. Certain mortgaged properties may have tenants who have executed leases but have not yet taken occupancy or commenced rent payments. Additionally, certain mortgaged properties may have a tenant that has taken possession of the space demised under its lease with the related borrower, but has not yet commenced payments of rent due under the lease. See Annex A-1, including the footnotes thereto, to this free writing prospectus for information regarding the occupancy rate for each of the mortgaged properties, as well as information with respect to the five (5) largest tenants at each retail, office, industrial and mixed use mortgaged property that are not fully occupying their leased space or fully paying rent. See “Description of the Mortgage Pool—Other Matters” in this free writing prospectus in Annex A-3 to this free writing prospectus. In addition, certain mortgaged properties may have leases out for signature with potential tenants and where indicated, occupancy figures may be presented with the expectation that such leases will be executed and that the related tenants will take, or have taken, occupancy. See Annex A-1, including the footnotes thereto, to this free writing prospectus. In addition, with respect to a residential cooperative mortgage loan, the occupancy rate for the related mortgaged property as listed on Annex A-1 to this free writing prospectus is determined using the property vacancy assumption reflected in the related appraisal for purposes of determining the appraised value of the related mortgaged property as a multifamily rental property (i.e., the “Coop-Rental Value” reflected in Annex A-1 to this free writing prospectus); such vacancy assumption does not reflect actual occupancy.
In addition, certain mortgaged properties have “dark” space where a tenant has vacated its premises. Any “dark” space may cause the mortgaged property to be less desirable to other potential tenants or the related tenant may be more likely to default in its obligations under the lease. Certain mortgaged properties may also have leased or unleased “dark” space or adjoin properties with “dark” spaces or “dark” shadow anchors. We cannot assure you that the tenants at those mortgaged properties will continue to fulfill their lease obligations or that the space will be relet. See “—Tenant Early Termination Options Entail Special Risks” below, “Description of the Mortgage Pool—Tenant or Other Third Party Matters—Lease Terminations and Expirations” in this free writing prospectus and Annex A-1
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to this free writing prospectus, including the footnotes thereto. Further, commercial tenants having multiple leases may experience adverse business conditions that result in their deciding to close under-performing stores.
Furthermore, commercial tenants having multiple leases may experience adverse business conditions that result in their deciding to close under-performing stores. In addition, we are aware that (i) on March 6, 2014, Staples, Inc. announced that its board of directors had approved the closure of up to 225 retail stores; (ii) on April 9, 2015, Walgreens Boots Alliance, Inc. announced its plan to close approximately 200 stores across the United States; (iii) on December 4, 2014, Sears Holdings Corporation, which owns K-Mart, announced that it had closed or announced for closure approximately 235 underperforming stores, the majority of which were K-Mart stores; (iv) in May 2014, Office Depot, Inc. announced that it will be closing 400 locations (approximately 21% of all stores) over the following two years; (v) on January 7, 2015, J.C. Penney Co. identified 39 stores that it plans to close by April 4, 2015 (none of which 39 stores is located at any of the mortgaged properties); and (vi) on January 8, 2015, Macy’s announced that it is closing 14 stores (none of which 14 stores is located at any of the mortgaged properties). While Walgreens Boots Alliance, Inc., Sears Holdings Corporation and Office Depot, Inc. have not identified specific stores slated to close, we cannot assure you that any such store closings will not have a material adverse effect on the mortgaged properties that have Staples, Walgreens, K-Mart, Sears, Sears Hometown Store or Office Depot, Inc. as a tenant or shadow anchor. In addition, we are aware that on February 5, 2015, RadioShack Corporation filed a bankruptcy petition under chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. RadioShack Corporation also announced its intention to sell between 1,500 and 2,400 stores and close the remainder of its stores as part of a restructuring process. RadioShack Corporation released a preliminary list of 1,784 stores slated for closure. We cannot assure you that any such store closings will not have a material adverse effect on the mortgaged properties that have RadioShack as a tenant or shadow anchor. See Annex A-1 to this free writing prospectus, including the footnotes thereto, for information concerning the five (5) largest tenants at each mortgaged property. See “Summaries of the Fifteen Largest Mortgage Loans—Parkway Crossing East Shopping Center” in Annex A-3 to this free writing prospectus.
In addition, with respect to certain of the mortgage loans, certain of the tenants at the related mortgaged property(ies) or other persons have rights of first refusal or offer and/or purchase options on a related mortgaged property or portions thereof in accordance with the terms of the related tenant leases or other recorded documents affecting such mortgaged property. In many cases such rights of first refusal or offer and/or purchase options of tenants or other persons are not subject to the related mortgage or remain applicable to the acceptance of a deed-in-lieu of foreclosure or a foreclosure sale or any subsequent sales of REO property by the applicable special servicer. As a result, we cannot assure you that the mortgagee’s ability to sell the related mortgaged property at or after foreclosure will not be impaired or that the foreclosure proceeds or sale proceeds in a post-foreclosure sale will not be adversely affected. See “Description of the Mortgage Pool—Tenant or Other Third Party Matters” in this free writing prospectus. See also representation and warranty no. 8 on Annex C-1 to this free writing prospectus and the exceptions thereto on Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus.
In addition, certain of the mortgaged properties, including mortgaged properties securing the fifteen largest mortgage loans, have material lease rollover risks involving the sole tenant or one of the five largest tenants, including (i) lease renewal or termination dates that occur prior to or shortly following the related loan maturity date, (ii) termination
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options that are exercisable prior to or shortly following the related loan maturity date, and/or (iii) leases that expire during a single calendar year or rolling 12-month period during the term of the mortgage loan. Prospective investors are encouraged to review the lease expirations for major tenants and the tenant rollover summary for certain of the top fifteen mortgage loans under the charts entitled “Major Tenants” and “Lease Expiration Schedule” in “Summaries of the Fifteen Largest Mortgage Loans—Hutchinson Metro Center I”, “—Cathedral Place”, “—150 Royall Street”, “—Queens’ MarketPlace”, “—Country Club Center”, “—Parkway Crossing East Shopping Center”, “—Hall Office Park”, “—Olmsted Plaza Shopping Center” and “—Dulles North Corporate Parks” in Annex A-3 to this free writing prospectus and to review the lease expiration dates and corresponding size of each of the five largest tenants at each of the retail, office, industrial and mixed use mortgaged properties on Annex A-1, including the footnotes thereto, to this free writing prospectus. We cannot assure you that (1) leases that expire can be renewed, (2) the space covered by leases that expire or are terminated can be re-leased in a timely manner at comparable rents or on comparable terms or (3) the related borrower will have the cash or be able to obtain the financing to fund any required tenant improvements. Further, lease provisions among tenants may conflict in certain instances, or leases may contain restrictions on the use of parcels near the related mortgaged property for which there is no corresponding restrictive covenant of record, in each case creating termination or other risks. Income from and the market value of the mortgaged properties securing the mortgage loans would be adversely affected if vacant space in the mortgaged properties could not be leased for a significant period of time, if tenants were unable to meet their lease obligations or if, for any other reason, rental payments could not be collected or if one or more tenants ceased operations at the mortgaged property. Upon the occurrence of an event of default by a tenant, delays and costs in enforcing the lessor’s rights could occur. If a significant portion of a mortgaged property is leased to a single tenant, the failure of the borrower to relet that portion of the subject mortgaged property if that tenant vacates or fails to perform its obligations will have a greater adverse effect on your investment than if the subject mortgaged property were leased to a greater number of tenants. Prospective investors are encouraged to see “Description of the Mortgage Pool—Tenant or Other Third Party Matters—Lease Terminations and Expirations” and “—Other Matters” in this free writing prospectus.
In addition, certain tenants at the mortgaged properties securing the mortgage loans may be entitled to terminate their leases or reduce their rents based upon negotiated lease provisions if, for example, an anchor, shadow anchor or other significant tenant ceases operations, or occupancy declines below a specified percentage, at the related mortgaged property. In these cases, we cannot assure you that the operation of these provisions will not allow a termination or rent reduction. See “—Tenant Early Termination Options Entail Special Risks” below and, with respect to the five (5) largest tenants for which certain co-tenancy related remedies may currently be (or in the near future likely may be) enforced, Annex A-1 to this free writing prospectus, including the footnotes thereto. A tenant’s lease may also be terminated or its terms otherwise adversely affected if a tenant becomes the subject of a bankruptcy proceeding.
If a significant portion of a mortgaged property is leased to a single tenant, the failure of the borrower to relet that portion of the subject mortgaged property if that tenant vacates or fails to perform its obligations will have a greater adverse effect on your investment than if the subject mortgaged property were leased to a greater number of tenants. Prospective investors are encouraged to see “Description of the Mortgage Pool—Tenant or Other Third Party Matters—Lease Terminations and Expirations” in this free writing prospectus, “Summaries of the Fifteen Largest Mortgage Loans—Cathedral Place”, “—150 Royall Street” and “—Dulles North Corporate Parks” in Annex A-3 to this free writing prospectus and to review the lease expirations for major tenants and a tenant rollover summary for certain of
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the top fifteen mortgage loans under the charts entitled “Major Tenants” and “Lease Expiration Schedule” in “Summaries of the Fifteen Largest Mortgage Loans” attached as Annex A-3 to this free writing prospectus and to review the lease expiration dates of mortgaged properties with single tenants on Annex A-1, including the footnotes thereto, to this free writing prospectus.
Even if vacated space is successfully relet, the costs associated with reletting, including tenant improvements and leasing commissions, could be substantial and could reduce cash flow from the related mortgaged properties. See “Description of the Mortgage Pool—Tenant or Other Third Party Matters—Lease Terminations and Expirations” and “—Other Matters” in this free writing prospectus for additional information on lease terminations and expirations at the mortgaged properties.
Fifty-five (55) of the mortgage loans that are secured, in whole or in part, by retail, office, industrial and mixed use properties, have either upfront, monthly and/or springing reserves for tenant improvements and leasing commissions which may serve to defray such costs. These mortgage loans represent approximately 91.4% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date secured, in whole or in part, by retail, office, industrial and/or mixed use properties. We cannot assure you, however, that the funds (if any) held in such reserves for tenant improvements and leasing commissions will be sufficient to cover any of the costs and expenses associated with tenant improvements or leasing commission obligations. In addition, if a tenant defaults in its obligations to a borrower, the borrower may incur substantial costs and experience significant delays associated with enforcing rights and protecting its investment, including costs incurred in renovating or reletting the property.
If a mortgaged property has multiple tenants, re-leasing costs and costs of enforcing remedies against defaulting tenants may be incurred more frequently than in the case of mortgaged properties with fewer tenants, thereby reducing the cash flow available for debt service payments. These costs may cause a borrower to default in its other obligations which could reduce cash flow available for debt service payments. Multi-tenanted mortgaged properties also may experience higher continuing vacancy rates and greater volatility in rental income and expenses.
Additionally, there may be several cases in which a particular entity is a tenant at more than one of the mortgaged properties, and although it may not be one of the five largest tenants at any of those properties, it is significant to the success of the properties, and therefore the mortgage loans, in the aggregate.
Tenant Early Termination Options Entail Special Risks
Retail leases often (and office leases may) give tenants the right to terminate the related lease or abate or reduce the related rent (i) if the borrower for the applicable mortgaged property allows uses at the mortgaged property in violation of use restrictions in current tenant leases, (ii) if the borrower, a prior landlord or any of their respective affiliates owns other properties within a certain radius of the mortgaged property and allows uses at those properties in violation of use restrictions, (iii) if the related borrower fails to provide a designated number of parking spaces, (iv) if there is construction at the related mortgaged property or an adjacent property (whether or not such adjacent property is owned or controlled by the borrower or any of its affiliates) that may interfere with visibility or a tenant’s use of the mortgaged property, (v) upon casualty or condemnation with respect to all or a portion of the mortgaged property that renders such mortgaged property unsuitable for a tenant’s use or if the borrower fails to rebuild such mortgaged property within a certain time, (vi) if a tenant’s use is not permitted by zoning or applicable law, (vii) if the
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landlord defaults on its obligations under the lease, (viii) if a tenant’s sales do not equal or exceed specified targets or other performance related conditions, including co-tenancy requirements, are not satisfied, or (ix) if the landlord cannot satisfy a tenant’s expansion option. In each identified instance the borrower may have interests adverse to the mortgagee, and we cannot assure you that the borrower will not take actions that may trigger a tenant’s right to terminate its lease if such borrower believes that such action may otherwise benefit it or its affiliates to do so, even where such action is to the detriment of the mortgaged property.
In addition, it is common for tenants at anchored or shadow-anchored retail centers to have the right to terminate their lease or abate or reduce rent if the anchor or shadow anchor tenant goes dark. Even if tenants do not have termination or rent abatement rights, because the anchor or shadow anchor tenant plays a key role in generating customer traffic and making a center desirable for other tenants, we cannot assure you that any loss of an anchor tenant will not have a material adverse impact on the non-anchor tenants’ ability to operate, which may in turn adversely impact the borrower’s ability to meet its obligations under the related mortgage loan documents. If an anchor tenant goes dark, generally the borrower’s only remedy is to terminate that lease after the anchor tenant has been dark for a specified amount of time.
Certain of the tenant leases for the mortgaged properties permit the related tenant to terminate its lease and/or abate or reduce rent if the tenant fails to meet certain sales targets or other business objectives for a specified period of time. We cannot assure you that all or any of these tenants will meet the sales targets or business objectives required to avoid any termination and/or abatement rights. Furthermore, certain of the tenant leases for the mortgaged properties permit the affected tenants to terminate their leases and/or abate or reduce rent if a specified percentage of the tenants (either by number or based on leased space) cease to operate at the applicable mortgaged property or if certain tenants at the applicable mortgaged property or at an adjacent or nearby property terminate their leases or go dark, or if a competitor commences operations at the subject mortgaged property or an adjacent or nearby property. For examples of certain tenant termination rights, including unilateral, tenant-based performance or live or imminent co-tenancy-based termination remedies among the five (5) largest tenants at each mortgaged property, see Annex A-1, including the footnotes thereto, and the “Lease Expiration Schedule”, including the footnotes thereto, in “Summaries of the Fifteen Largest Mortgage Loans” attached as Annex A-3 to this free writing prospectus.
In addition to termination options tied to certain triggers as set forth above that are common with respect to retail properties and may apply to certain office properties, certain tenant leases permit the related tenant to terminate its lease either unilaterally or on the occurrence of other triggers.
Any exercise of termination rights permitting a tenant to terminate its lease could result in vacant space at the related mortgaged property, renegotiation of the lease with the related tenant or re-letting of the space. We cannot assure you that any vacated space could or would be relet or the revenues replaced. Furthermore, we cannot assure you that the foregoing termination and/or abatement rights will not arise in the future or materially adversely affect the related borrower’s ability to meet its obligations under the related mortgage loan documents. See “Description of the Mortgage Pool—Tenant or Other Third Party Matters—Lease Terminations and Expirations” in this free writing prospectus for additional information regarding early termination options affecting the mortgaged properties.
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Tenant Bankruptcies May Adversely Affect the Income Produced by the Mortgaged Properties and May Adversely Affect the Distributions on Your Certificates
The bankruptcy or insolvency of a major tenant, or a number of smaller tenants, in retail, industrial and office properties, may adversely affect the income produced by the related mortgaged property. Under the U.S. bankruptcy code, a tenant/debtor has the option of assuming or rejecting or, subject to certain conditions, assuming and assigning to a third party, any unexpired lease. If the tenant rejects the lease, the landlord’s claim for breach of the lease would be a general unsecured claim against the tenant, absent collateral securing the claim. The claim would be limited to the unpaid rent under the lease for the periods prior to the bankruptcy petition, or earlier repossession or surrender of the leased premises, plus the rent under the lease for the greater of one year, or 15%, not to exceed three years, of the remaining term of such lease, and the actual amount of the recovery could be less than the amount of the claim. See “Description of the Mortgage Pool—Default History, Bankruptcy Issues and Other Proceedings” in this free writing prospectus.
Various Loan-Level Conflicts of Interest May Have an Adverse Effect on Your Certificates
Conflicts Between Managers and the Borrowers. Substantially all of the property managers for the mortgaged properties securing the mortgage loans or their affiliates manage additional properties, including properties that may compete with those mortgaged properties. Affiliates of the managers, and certain of the managers themselves, also may own other properties, including competing properties. The managers of the mortgaged properties securing the mortgage loans may accordingly experience conflicts of interest in the management of those mortgaged properties. There can be no assurance that a property manager will not divert potential tenants from a mortgaged property owned or managed by it and securing one of the mortgage loans in the issuing entity to a competing property that is owned or managed by it or an affiliate.
Conflicts Between Borrower Affiliates and the Issuing Entity. Affiliates of many of the borrowers under the mortgage loans own other properties and, in some cases, those other properties compete with the mortgaged property securing a mortgage loan held by the issuing entity. There can be no assurance that a borrower or an affiliate of a borrower will not divert potential tenants from a mortgaged property owned by such borrower and securing one of the mortgage loans in the issuing entity to a competing property that is owned by an affiliate of such borrower. Accordingly, a borrower sponsor may experience a conflict of interest when leasing a mortgaged property securing a mortgage loan by the issuing entity and a competing property in which the borrower sponsor holds an interest.
Mortgaged Properties Leased to Borrowers or Borrower-Affiliated Entities Also Have Risks. If a mortgaged property is leased in whole or substantial part to the borrower under the mortgage loan or to an affiliate of the borrower, there may be conflicts. For instance, a landlord may be more inclined to waive lease conditions for an affiliated tenant than it would for an unaffiliated tenant. One situation in which such a conflict may arise is in the case of certain manufactured housing community mortgaged properties. There may be a master lease with respect to the related pads between the borrower, as landlord, and an affiliate of the borrower, as tenant and owner of certain leased mobile homes.
We cannot assure you that the conflicts arising where a borrower is affiliated with a tenant at a mortgaged property will not adversely impact the value of the related mortgage loan. Insofar as a borrower affiliate leases space at a mortgaged property, a deterioration in the financial condition of the borrower or its affiliates can be particularly significant to the borrower’s ability to perform under the mortgage loan as it can directly interrupt the cash
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flow from the mortgaged property if the borrower’s or its affiliate’s financial condition worsens. These risks may be mitigated when mortgaged properties are entirely leased to unrelated third parties. See Annex A-1, including the footnotes thereto, to this free writing prospectus.
A Concentration of Mortgaged Properties in One or More Geographic Areas Reduces Diversification and May Increase the Risk that Your Certificates May Not Be Paid in Full
Mortgaged properties located in New York, Texas, Florida and Virginia represent security for approximately 15.5%, 14.6%, 13.8% and 6.0%, respectively, of the aggregate principal balance of the pool of mortgage loans as of the cut-off date by allocated loan amount, and collectively secure approximately 49.8% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date by allocated loan amount.
Repayments by borrowers and the market value of the related mortgaged properties could be affected by economic conditions generally or specific to geographic areas or the regions of the United States, and concentrations of mortgaged properties in particular geographic areas may increase the risk that adverse economic or other developments or natural or man-made disasters affecting a particular region of the country could increase the frequency and severity of losses on mortgage loans secured by those properties. In recent periods, several regions of the United States have experienced significant real estate downturns when others have not. Regional economic declines or conditions in regional real estate markets could adversely affect the income from, and market value of, the mortgaged properties. In addition, local or regional economies may be adversely affected to a greater degree than other areas of the country by developments affecting industries concentrated in such area. Certain mortgaged properties are located in areas whose economic well-being may be heavily dependent on one or a few particular employers, which may be from the public sector (including, but not limited to, military bases, federal or state governmental agencies and state universities) or the private sector (including a variety of private institutions and businesses). A decline in the general economic condition in the region in which mortgaged properties securing the related mortgage loans are located would result in a decrease in consumer demand in the region and the income from and market value of the mortgaged properties may be adversely affected.
Several mortgaged properties are located in areas that, based on low population density, poor economic demographics (such as higher than average unemployment rates, lower than average annual household income and/or overall loss of jobs) and/or negative trends in such regards, would be considered secondary or tertiary markets. Mortgage loans secured by mortgaged properties in these secondary or tertiary markets may be more susceptible to the impacts of risks disclosed herein.
Other regional factors—e.g., earthquakes, floods, forest fires or hurricanes or changes in governmental rules or fiscal policies—also may adversely affect the mortgaged properties. Mortgaged properties in certain regional areas may be more susceptible to certain hazards (such as earthquakes, widespread fires, hurricanes or floods) than properties in other parts of the country and properties located in coastal states may be more susceptible to hurricanes than properties in other parts of the country. As a result, areas affected by such events often experience disruptions in travel, transportation and tourism, loss of jobs and an overall decrease in consumer activity, and often a decline in real estate-related investments. There can be no assurance that the economies in such impacted areas will recover sufficiently to support income producing real estate at pre-event levels or that the costs of the related clean-up will not have a material adverse effect on the local or national economy. See “Description of the Mortgage Pool—Certain Characteristics of the Mortgage
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Pool—Property Type Concentrations” in this free writing prospectus. Furthermore, the mortgage loans do not all require flood insurance on the related mortgaged property unless they are in flood zones and flood insurance is available. We cannot assure you that any hurricane damage would be covered by insurance. See “Servicing of the Mortgage Loans and Administration of the Trust Fund—Maintenance of Insurance” and “Certain Legal Aspects of the Mortgage Loans” in this free writing prospectus and “Description of the Pooling and Servicing Agreements—Hazard Insurance Policies” in the accompanying prospectus.
The Concentration of Loans and Number of Loans with the Same or Related Borrowers Increases the Possibility of Loss on the Loans Which Could Reduce Distributions on Your Certificates
The effect of mortgage pool loan losses will be more severe:
· | if the pool is comprised of a small number of mortgage loans, each with a relatively large principal amount; or |
· | if the losses relate to loans that account for a disproportionately large percentage of the pool’s aggregate principal balance of all mortgage loans. |
The largest mortgage loan represents approximately 8.5% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date. The three, five and ten largest mortgage loans represent approximately 15.1%, 21.3% and 32.6%, respectively, of the aggregate principal balance of the pool of mortgage loans as of the cut-off date. See “Description of the Mortgage Pool—Certain Characteristics of the Mortgage Pool—Multi-Property Mortgage Loans; Mortgage Loans with Affiliated Borrowers” in this free writing prospectus and the “Summaries of the Fifteen Largest Mortgage Loans” attached as Annex A-3 to this free writing prospectus.
In addition, the mortgage pool includes some groups of mortgage loans where the mortgage loans in the particular group are not cross-collateralized or cross-defaulted but were made to borrowers related through common ownership of partnership or other equity interests and where, in general, the related mortgaged properties are commonly managed. See “Description of the Mortgage Pool—Certain Characteristics of the Mortgage Pool—Multi-Property Mortgage Loans; Mortgage Loans with Affiliated Borrowers”.
Tenant Concentration Increases the Risk That Cash Flow Will Be Interrupted, Which Could Reduce Distributions on Your Certificates
A deterioration in the financial condition of a tenant can be particularly significant if a mortgaged property is leased to a single or large tenant or a small number of tenants because rent interruptions by a tenant may cause the borrower to default on its obligations to the lender. Mortgaged properties leased to a single tenant or a small number of tenants also are more susceptible to interruptions of cash flow if a tenant fails to renew its lease or defaults under its lease. This is so because:
· | the financial effect of the absence of rental income may be severe; |
· | more time may be required to re-lease the space; and |
· | substantial capital costs may be incurred to make the space appropriate for replacement tenants. |
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A number of mortgaged properties securing the mortgage loans, including certain mortgage loans in the top fifteen mortgage loans included on Annex A-3 to this free writing prospectus have single tenant leases that expire during the term of the related mortgage loan or shortly thereafter or have a significant portion of the leases that expire or can be terminated in a particular year, or portion thereof, at the related mortgaged property.
Another factor that you should consider is that office, retail and industrial properties, and mixed use properties that are used for office, retail and/or industrial purposes, also may be adversely affected if there is a concentration of a particular tenant or of tenants in the same or similar business or industry. In these cases, a problem with a particular tenant could have a disproportionately large impact on the pool mortgage loans and adversely affect distributions to certificateholders. Similarly, an adverse economic impact with respect to a particular industry could also have a disproportionately large impact on one or more particular mortgage loans or on the pool of mortgage loans if various tenants are concentrated in a particular industry.
For further information with respect to tenant concentrations, prospective investors are encouraged to review the information with respect to the five (5) largest tenants at each mortgaged property on Annex A-1 to this free writing prospectus and “Summaries of the Fifteen Largest Mortgage Loans” attached as Annex A-3 to this free writing prospectus under the charts entitled “Major Tenants” and “Lease Expiration Schedules” therein.
Limitations on the Enforceability of Multi-Borrower/Multi-Property and Multi-Borrower/Multiple Parcel Arrangements May Have an Adverse Effect on Recourse in the Event of a Default on a Mortgage Loan
Five (5) of the mortgage loans, representing approximately 9.4% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date, represent the obligations of multiple borrowers that are liable on a joint and several basis for the repayment of the entire indebtedness evidenced by the related multi-property or multi-parcel mortgage loan.
Arrangements whereby multiple borrowers grant their respective mortgaged properties or parcels of individual mortgaged properties as security for a multi-property mortgage loan could be challenged as fraudulent conveyances by the creditors or the bankruptcy estate of any of the related borrowers. Under federal and most state fraudulent conveyance statutes, the incurring of an obligation or the transfer of a property interest, including the granting of a mortgage lien or a security interest, by a person may be voided under certain circumstances if:
· | the person did not receive fair consideration or reasonably equivalent value in exchange for the obligation or transfer; and |
· | the person: |
(1) was insolvent at the time of the incurrence of the obligation or transfer, or rendered insolvent by such obligations or transfer, or
(2) (was engaged in a business or a transaction or was about to engage in a business or a transaction, for which the person’s assets constituted an unreasonably small amount of capital after giving effect to the incurrence of the obligation or the transfer, or
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(3) intended to incur, or believed that it would incur, debts that would be beyond the person’s ability to pay as those debts matured.
Accordingly, a lien granted by a borrower could be avoided if a court were to determine that:
· | the borrower did not receive fair consideration or reasonably equivalent value when pledging its mortgaged property or parcel for the equal benefit of the other related borrowers; and |
· | the borrower was insolvent at the time of granting the lien, was rendered insolvent by the granting of the lien, was left with inadequate capital or was not able to pay its debts as they matured. |
We cannot assure you that a lien granted by a borrower on its mortgaged property or parcel to secure a multi-borrower/multi-property mortgage loan or a multi-borrower/multiple-parcel mortgage loan, or any payment thereon, would not be avoided as a fraudulent conveyance.
In addition, when multiple real properties or parcels secure a mortgage loan, the amount of the mortgage encumbering any particular one of those properties or parcels may be less than the full amount of the related aggregate mortgage loan indebtedness, to minimize recording tax. This mortgage amount is generally established at 100% to 150% of the appraised value or allocated loan amount for the mortgaged property or parcel and will limit the extent to which proceeds from the property or parcel will be available to offset declines in value of the other properties or parcels securing the same mortgage loan. See “Description of the Mortgage Pool—Certain Characteristics of the Mortgage Pool” in this free writing prospectus for more information regarding any multi-property mortgage loans or multiple-parcel mortgage loans in the trust fund.
Borrowers’ Recent Acquisition of the Mortgaged Properties Causes Uncertainty
The related borrowers or their sponsor or affiliates, as applicable, with respect to thirty-three (33) mortgage loans, representing approximately 26.0% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date, initially acquired all or part of their related mortgaged property or an interest in the owner thereof contemporaneously with or shortly prior to the origination of the related mortgage loan. Such borrowers, or others who acquired their related mortgaged property or an interest in the owner thereof within the past twelve (12) months, may have limited experience operating the particular mortgaged properties. The net operating income and cash flow of such mortgaged properties may, therefore, vary significantly from the operations, net operating income and cash flow generated by the related mortgaged properties under prior ownership and management. For certain of these mortgage loans, limited or no historical operating information is available with respect to the related mortgaged properties. Furthermore, a transfer of real estate in certain jurisdictions, including through the sale of interests in the owner thereof, may give rise to a reassessment for real estate tax purposes which may result in increased operating costs. As a result of these and other similar factors, you may find it difficult to analyze the historical performance of those mortgaged properties. See “—Certain Mortgaged Properties May Have a Limited Operating History” below, and Annex A-1 to this free writing prospectus.
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Certain Mortgaged Properties May Have a Limited Operating History
The mortgaged properties securing certain of the mortgage loans are newly constructed, recently opened, recently acquired and/or recently renovated to a substantial extent and, as such, have a limited operating history. We cannot assure you that any of the mortgaged properties, including the aforementioned mortgaged properties, will perform as anticipated. See “—Borrowers’ Recent Acquisition of the Mortgaged Properties Causes Uncertainty” and “Description of the Mortgage Pool—Other Matters” in this free writing prospectus. See also for loan purpose and certain historical operating information, Annex A-1, including the footnotes thereto, to this free writing prospectus, “Summaries of the Fifteen Largest Mortgage Loans—150 Royall Street” in Annex A-3 to this free writing prospectus, and representation and warranty no. 39 on Annex C-1 to this free writing prospectus and the exceptions thereto on Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus).
Risks Related to Construction, Redevelopment and Renovation at the Mortgaged Properties
Certain of the mortgaged properties are properties that are either completing initial construction, undergoing other renovation or redevelopment, or expected to undergo such renovation or redevelopment in the future, including, in the case of several hospitality properties, pursuant to property improvement plans required by the related franchisor. The existence of construction or renovation at a mortgaged property may make space unavailable to rent or may make the mortgaged property less attractive to tenants or their customers, and accordingly could have a negative effect on net operating income.
To the extent applicable, we cannot assure you that any escrow or reserve collected will be sufficient to complete any current renovation or be otherwise sufficient to satisfy any tenant improvement expenses at a mortgaged property. Failure to complete planned improvements may have a material adverse effect on the cash flow at the mortgaged property and the related borrower’s ability to meet its payment obligations under the mortgage loan documents. In addition, in the event the related borrower fails to pay the costs for work completed or material delivered in connection with such ongoing redevelopment or renovation, the portion of the mortgaged property on which there are renovations may be subject to mechanic’s or materialmen’s liens that may be senior to the lien of the related mortgage loan. Additionally, we cannot assure you that any current or planned redevelopment, renovation or expansion will be completed, that such redevelopment, renovation or expansion will be completed in the time frame contemplated, or that, when and if redevelopment, renovation or expansion is completed, such redevelopment, renovation or expansion will improve the operations at, or increase the value of, the subject property. Failure of any of the foregoing to occur could have a material negative impact on the related mortgage loan, which could affect the ability of the related borrower to repay amounts due under such mortgage loan. In the event the related borrower (or a tenant, if applicable) fails to pay the costs of work completed or material delivered in connection with ongoing redevelopment, renovation or expansion, the portion of the mortgaged property on which there is construction may be subject to mechanic’s or materialmen’s liens that may be senior to the lien of the related mortgage loan. The existence of construction at a mortgaged property may make such mortgaged property less attractive to tenants or their customers or, in the case of hospitality properties may require that a portion of the mortgaged property not be used during that renovation and, accordingly, could have a negative effect on net operating income. See “Description of the Mortgage Pool—Other Matters” in this free writing prospectus and “Summaries of the Fifteen Largest Mortgage Loans—Smiths Medical” in Annex A-3 to this free writing prospectus. See
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also Annex A-1 to this free writing prospectus and the accompanying footnotes for additional information.
If a special servicer forecloses on behalf of the trust fund on a mortgaged property that is being redeveloped, renovated or expanded, pursuant to the REMIC provisions, such special servicer will only be permitted to arrange for completion of the redevelopment, renovation or expansion if more than 10% of the costs of construction were incurred at the time the default on the related mortgage loan became imminent. As a result, the trust fund may not realize as much proceeds upon disposition of a foreclosure property as it would if it were permitted to complete construction. See “—The Operation of a Mortgaged Property Following Foreclosure May Affect the Tax Status of the Trust Fund and May Adversely Affect Distributions on Your Certificates” in this free writing prospectus.
Risks of the Anticipated Repayment Date Loans
Certain of the mortgage loans included in the mortgage pool are subject to mortgage loan documents which provide that, on or after a certain date (referred to as the “anticipated repayment date”), if the related borrower has not repaid the related mortgage loan in full, any principal outstanding after that anticipated repayment date will accrue interest at an increased interest rate rather than the stated mortgage loan rate. Generally, from and after the anticipated repayment date, cash flow in excess of that required for debt service, the funding of reserves and certain budgeted or reasonable expenses with respect to the related mortgaged property will be applied toward the payment of principal (without payment of a yield maintenance charge) of the related mortgage loan until its principal balance has been reduced to zero. Although these provisions may create an incentive for the related borrower to repay the related mortgage loan in full on its anticipated repayment date, a substantial payment would be required and the borrower has no obligation to make any such payment. While interest at the initial mortgage rate continues to accrue and be payable on a current basis on each such mortgage loan after its anticipated repayment date, the payment of excess interest may be deferred and will be required to be paid, with interest (to the extent permitted under applicable law and the related mortgage loan documents), only after the outstanding principal balance of the related mortgage loan has been paid in full. Pursuant to the pooling and servicing agreement, upon payment in full, any excess interest that has been deferred, to the extent actually collected, will be paid to the holders of the Class V-1 and V-2 certificates, which are not offered by this free writing prospectus. See “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans” in this free writing prospectus.
Converting Commercial Properties to Alternative Uses May Require Significant Expenses Which Could Reduce Distributions on Your Certificates; and Limited Adaptability for Other Uses May Substantially Lower the Liquidation Value of a Mortgaged Property
Some of the mortgaged properties securing mortgage loans in the trust may not be readily convertible to alternative uses if those properties were to become unprofitable for any reason. This is because:
· | converting commercial properties to alternate uses or converting single-tenant commercial properties to multi-tenant properties generally requires substantial capital expenditures; and |
· | zoning, land use or other restrictions also may prevent alternative uses. |
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For example, mortgaged properties that are part of a condominium regime may not be readily convertible due to use and other restrictive covenants imposed by the condominium declaration and other related documents, especially in a situation where such mortgaged property does not represent the entire condominium regime. Additionally, any vacancy with respect to movie theater space and data centers would not easily be converted to other uses due to their unique construction requirements. In addition, converting self-storage, cold storage, data center, restaurant or manufactured housing community properties, fitness centers and other facilities related to physical fitness, parking garages or other specialty use space to alternate uses generally requires substantial capital expenditures and could result in a significant adverse effect on, or interruption of, the revenues generated by such mortgaged properties. Furthermore, certain mortgaged properties may be subject to certain use restrictions and/or low-income housing restrictions in order to remain eligible for low-income housing tax credits or governmental subsidized rental payments that could prevent the conversion of the mortgaged property to alternative uses.
Condominium interests in buildings and/or other improvements in some cases constitute less than a majority of such voting rights and result in the related borrower not having control of the related condominium or owners association. The board of managers or directors of the related condominium generally has discretion to make decisions affecting the condominium, and we cannot assure you that the related borrower under a mortgage loan secured by one or more interests in that condominium will have any control over decisions made by the related board of managers or directors. Thus, decisions made by that board of managers or directors, including regarding assessments to be paid by the unit owners, insurance to be maintained on the condominium and many other decisions affecting the maintenance of that condominium, may have a significant impact on the related mortgage loans in the trust fund that are secured by mortgaged properties consisting of such condominium interests. We cannot assure you that the related board of managers or directors will always act in the best interests of the related borrower under the related mortgage loans. In addition, with respect to any such mortgage loan, there are certain circumstances when insurance proceeds must be used to repair and restore the related mortgaged property in accordance with the terms of the governing documents for the related condominium.
In addition, due to the nature of condominiums, a default on the part of the borrower with respect to such a mortgaged property will not allow the applicable special servicer the same flexibility in realizing on the collateral as is generally available with respect to commercial properties that are not condominium units. The rights of other unit or property owners, the documents governing the management of the condominium units and the state and local laws applicable to condominium units must be considered. In addition, in the event of a casualty with respect to a condominium, due to the possible existence of multiple loss payees on any insurance policy covering such property, there could be a delay in the allocation of related insurance proceeds, if any. Consequently, servicing and realizing upon the collateral described above could subject the certificateholders to a greater delay, expense and risk than with respect to a mortgage loan secured by a commercial property that is not a condominium unit. See “Description of the Mortgage Pool—Certain Characteristics of the Mortgage Pool—Condominium Structures” in this free writing prospectus.
Some of the mortgaged properties may have been designated as historic or landmark buildings or are located in areas designated as historic or landmark. Such properties may have restrictions related to renovations, construction or other restrictions and may not be permitted to be converted to alternative uses because of such restrictions. See “Description
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of the Mortgage Pool—Assessments of Property Value and Condition—Zoning and Building Code Compliance” in this free writing prospectus.
The liquidation value of a mortgaged property not readily convertible to an alternative use may be substantially less than would be the case if the mortgaged property were readily adaptable to other uses. If a mortgaged property of this type were liquidated and a lower liquidation value were obtained, less funds would be available for distributions on your certificates. See “Description of the Mortgage Pool—Certain Characteristics of the Mortgage Pool—Property Type Concentrations” in this free writing prospectus.
We Cannot Assure You That Any Upfront or Ongoing Deposits Made by a Borrower to Any Reserve in Respect of a Mortgaged Property Will Be Sufficient To Offset Any Cash Flow Shortfalls That May Occur at the Related Mortgaged Property
The borrowers under some of the mortgage loans made upfront deposits, and/or agreed to make ongoing deposits, to reserves for the payment of various anticipated or potential expenditures, such as (but not limited to) the costs of tenant improvements and leasing commissions and recommended immediate repairs. However, we cannot assure you that any such reserve will be sufficient for its intended purpose. We also cannot assure you that cash flow from the related mortgaged properties will be sufficient to fully fund any applicable ongoing monthly reserve requirements.
The Absence of Lockboxes Entails Risks That Could Adversely Affect Distributions on Your Certificates
Many of the mortgage loans do not require the related borrower presently to cause rent and other payments to be made into a lockbox account maintained on behalf of the mortgagee, although some of those mortgage loans do provide for a springing lockbox. If rental payments are not required to be made directly into a lockbox account, there is a risk that the borrower will divert such funds for other purposes.
If a Borrower is Unable To Repay Its Loan on Its Maturity Date or Anticipated Repayment Date, You May Experience a Loss or Delay in Distributions on Your Certificates
As described in this free writing prospectus, all of the mortgage loans (and any relatedpari passu companion loan) are balloon loans or ARD loans. All of the mortgage loans (other than loans that require interest-only payments for their entire term) have amortization schedules that are significantly longer than their respective terms and many of the mortgage loans require only payments of interest for part or all of their respective terms to maturity or anticipated repayment date, as applicable. See “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans—Amortization Characteristics” in this free writing prospectus. A longer amortization schedule or an interest-only provision in a mortgage loan will result in a higher amount of principal outstanding under the mortgage loan at any particular time, including at the maturity date or anticipated repayment date of the mortgage loan, than would have otherwise been the case had a shorter amortization schedule been used or had the mortgage loan had a shorter interest-only period or not included an interest-only provision at all. That higher principal amount outstanding could both (i) make it more difficult for the related borrower to make the required balloon payment or ARD payment at maturity or on the anticipated repayment date and (ii) lead to increased losses for the trust either during the loan term or at maturity or such anticipated repayment date if the mortgage loan becomes a defaulted mortgage loan. The ability of a borrower to make the required balloon or ARD payment at maturity or on the anticipated repayment date depends upon its ability either to refinance the related mortgage loan
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(including any relatedpari passu companion loan) or to sell the mortgaged property for an amount that is sufficient to repay the mortgage loan (including any relatedpari passu companion loan) in full with interest. A borrower’s ability to achieve either of these goals will be affected by a number of factors, including:
· | the availability of, and competition for, credit for commercial properties, which may fluctuate over time; |
· | prevailing interest rates; |
· | the fair market value of the related mortgaged property; |
· | the borrower’s equity in the related mortgaged property; |
· | the borrower’s financial condition; |
· | the operating history and occupancy level of the mortgaged property; |
· | tax laws; and |
· | prevailing general and regional economic conditions. |
See “Risk Factors—Balloon Payments on Mortgage Loans Result in Heightened Risk of Borrower Default” in the accompanying prospectus for additional risk factor considerations.
None of the mortgage loan sellers, any party to the pooling and servicing agreement or any other person will be under any obligation to refinance any mortgage loan. However, in order to maximize recoveries on defaulted mortgage loans, the pooling and servicing agreement permits the applicable special servicer to extend and modify mortgage loans (other than any non-servicedpari passu mortgage loan, each of which will be serviced pursuant to a separate pooling and servicing agreement) in a manner consistent with the servicing standard, subject to the limitations described under “Servicing of the Mortgage Loans and Administration of the Trust Fund—Modifications, Waivers, Amendments and Consents” in this free writing prospectus. We cannot assure you, however, that any extension or modification will increase the present value of recoveries in a given case. Any delay in collection of a balloon payment that would otherwise be distributable on your certificates, whether such delay is due to borrower default or to modification of the related mortgage loan, and any delay in collection of an ARD payment that would otherwise be distributable on your certificates, will likely extend the weighted average life of your certificates.
None of the master servicers or the special servicers will have the ability to extend or modify any non-servicedpari passu mortgage loan because each such non-servicedpari passu mortgage loan will be serviced by an other master servicer and an other special servicer pursuant to a separate pooling and servicing agreement which contains provisions that are substantially similar in all material respects, but not necessarily identical to, the provisions of the pooling and servicing agreement for this transaction. Any delay in collection of a balloon payment that would otherwise be distributable in respect of a class of certificates, whether such delay is due to a borrower default or to modification of the related non-servicedpari passu mortgage loan by the other special servicer servicing such non-servicedpari passu mortgage loan, will likely extend the weighted average life of such class of certificates.
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A Borrower’s Other Loans May Reduce the Cash Flow Available to the Mortgaged Property Which May Adversely Affect Distributions on Your Certificates; Mezzanine Financing Reduces a Principal’s Equity in, and Therefore Its Incentive to Support, a Mortgaged Property
The borrowers or their affiliates under some of the mortgage loans have incurred, or are permitted to incur in the future, other indebtedness that is secured by the related mortgaged properties or direct or indirect ownership interests in the borrower, including mezzanine indebtedness. In certain cases, the total additional debt on certain of the mortgage loans may not be supported by the underwritten cash flow from the mortgaged property. Additionally, with respect to the mortgage loans included in the trust that are secured by residential cooperative properties, the owners of the cooperative units underlying the cooperative properties are permitted to obtain loans secured by a pledge of such owner’s interest in the underlying borrower. In addition, certain of the mortgage loans permit certain affiliates of the borrower to advance funds to other affiliates on an unsecured basis. See “Description of the Mortgage Pool—Subordinate and/or Other Financing” in this free writing prospectus.
Furthermore, the mortgage loans generally do not prohibit indebtedness that is secured by equipment or other personal property located at the mortgaged property, trade payables or other obligations in the ordinary course of business relating to the mortgaged property. See “Description of the Mortgage Pool—Subordinate and/or Other Financing” and Annex A-1 to this free writing prospectus. Except as described in that section and Annex A-1, we make no representation with respect to the mortgage loans as to whether any subordinate financing currently encumbers any mortgaged property, whether any borrower has incurred, or is permitted to incur in the future, material unsecured debt or whether a third-party holds debt secured by a pledge of an equity interest in a related borrower.
Additionally, the terms of certain mortgage loans permit or require the borrowers to post letters of credit and/or surety bonds for the benefit of the related mortgage loan, which may constitute a contingent reimbursement obligation of the related borrower or an affiliate. The issuing bank or surety will not typically agree to subordination and standstill protection benefiting the mortgagee.
In addition, in general, those borrowers that have not agreed to certain special purpose covenants in the related mortgage loan documents are not prohibited from incurring additional debt. Such additional debt may be secured by other property owned by those borrowers. Certain of these borrowers may have already incurred additional debt. In addition, the owners of such borrowers generally are not prohibited from incurring mezzanine debt secured by pledges of their equity interests in those borrowers.
Further, so-called “preferred equity” structures, where a special limited partner or member receives a preferred return in exchange for an infusion of capital, can present risks that resemble additional debt, including dilution of the sponsor’s equity in the mortgaged property, stress on the cash flow in the form of a preferred return, and potential changes in the management of the mortgaged property.
When a mortgage loan borrower, or its constituent members, also has one or more other outstanding loans, even if the loans arepari passu or subordinated or are mezzanine loans or cooperative share loans such as those described above not directly secured by the mortgaged property or are unsecured loans or preferred equity obligations, the trust is subjected to additional risks. For example, the borrower may have difficulty servicing and repaying multiple loans or meeting its preferred equity obligations. Also, the existence of another loan or a preferred equity obligation generally will make it more difficult for the
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borrower to obtain refinancing of the mortgage loan or sell the related mortgaged property and may thus jeopardize the borrower’s ability to make any balloon payment due under the mortgage loan at maturity (or to repay an ARD loan on or near its anticipated repayment date). Moreover, the need to service additional debt may reduce the cash flow available to the borrower to operate and maintain the mortgaged property. Debt that is incurred by an equity owner of a borrower and is the subject of a guaranty of such borrower or is secured by a pledge of the equity ownership interests in such borrower or a preferred equity obligation effectively reduces the equity owners’ economic stake in the related mortgaged property. While the mezzanine lender has no security interest in or rights to the related mortgaged property, a default under the mezzanine loan could cause a change in control of the related borrower. The existence of such debt or a preferred equity obligation may reduce cash flow on the related borrower’s mortgaged property after the payment of debt service and may increase the likelihood that the owner of a borrower will permit the value or income producing potential of a mortgaged property to suffer by not making capital infusions to support the mortgaged property.
Additionally, if the borrower, or its constituent members, is obligated to another lender, actions taken by such other lenders such as a suit for collection, foreclosure or an involuntary petition for bankruptcy against the borrower could impair the security available to the trust fund. If a junior lender files an involuntary bankruptcy petition against the borrower, or the borrower files a voluntary bankruptcy petition to stay enforcement by a junior lender, the trust’s ability to foreclose on the mortgaged property will be automatically stayed, and principal and interest payments might not be made during the course of the bankruptcy case. The bankruptcy of a junior lender also may operate to stay foreclosure by the trust.
Further, if another loan secured by the mortgaged property is in default, the other lender may foreclose on the mortgaged property, absent an agreement to the contrary, thereby causing a delay in payments and/or an involuntary repayment of the mortgage loan prior to maturity. The trust may also be subject to the costs and administrative burdens of involvement in foreclosure proceedings or related litigation. For example, with respect to each of the mortgage loans included in the trust that is secured by a residential cooperative property, the related borrower has incurred and/or may incur additional indebtedness secured by the related mortgaged property. In these instances, while such additional secured indebtedness is expressly subordinate to the related cooperative mortgage loan included in the trust, the intercreditor agreements that govern the interaction between the mortgagee under the mortgage loan and the lender with respect to any such additional secured debt do not contain “standstill” provisions in favor of the mortgagee under the mortgage loan. As a result, the lender with respect to any such permitted additional secured debt could foreclose upon its lien and cause a default on the related mortgage loan, regardless of whether such mortgage loan was otherwise in default.
See “Description of the Mortgage Pool—Subordinate and/or Other Financing” and Annex A-1 to this free writing prospectus and see also representations and warranties no. 9 and no. 32 in Annex C-1 to this free writing prospectus and the exceptions thereto in Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus). See also “Summaries of the Fifteen Largest Mortgage Loans—Queens’ MarketPlace”, “—El Sol Brillante and Laguna Del Sol Apartments”, “—Coastal Village Apartments” and “—Hunterstone Apartments” in Annex A-3 to this free writing prospectus.
Additionally, with respect to certain mortgage loans secured by residential cooperative properties, National Cooperative Bank, N.A. or an affiliate thereof may be the lender, now or in the future, with respect to one or more (1) loans to the related mortgage borrower that
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are secured, on a subordinated basis, by a mortgage lien upon a mortgaged property that also secures a mortgage loan included in the trust, (2) unsecured loans to the related mortgage borrower and/or (3) cooperative unit loans that are secured by direct equity interests in the related mortgage borrower. See “Description of the Mortgage Pool—Subordinate and/or Other Financing—Existing (Secured Financing and Mezzanine and Similar Financing)”, “—Additional Debt Financing for Mortgage Loans Secured by Residential Cooperatives” and “Transaction Parties—Affiliations and Certain Relationships Among Certain Transaction Parties” in this free writing prospectus and “Certain Legal Aspects of Mortgage Loans and Leases—Cooperative Loans” in the accompanying prospectus. In addition to being the lender under such arrangements, subject to the servicing standard and to the criteria described in “Servicing of the Mortgage Loans and Administration of the Trust Fund—Modifications, Waivers, Amendments and Consents” in this free writing prospectus, National Cooperative Bank, N.A. is also permitted to approve, without the consent of the subordinate class representative or any party to the pooling and servicing agreement, the incurrence such additional secured and/or other indebtedness by the borrowers under the residential cooperative mortgage loans. See “—Risks Related to the Offered Certificates—If any Master Servicer or any Special Servicer Purchases Certificates or Has Investments Related to a Borrower or Other Person, a Conflict of Interest May Arise Between Its Own Interests and Its Duties to the Trust Fund” and “—Various Other Securitization-Level Conflicts of Interest May Have an Adverse Effect on Your Offered Certificates—Conflicts Between the Trust Fund and the Mortgage Loan Sellers and Their Affiliates” in this free writing prospectus.
In addition, with respect to the additional secured indebtedness related to mortgage loans secured by residential cooperative properties described above, except for the chattel mortgages, such additional secured indebtedness bears interest at a floating rate based on the London Interbank Offered Rate (commonly referred to as “LIBOR”). Similarly, future additional secured indebtedness related to mortgage loans secured by residential cooperative properties described above may also bear interest at a floating rate based on LIBOR. Accordingly, debt service for such additional secured indebtedness will generally increase as LIBOR rises and the debt service coverage ratio of such additional secured indebtedness may be adversely affected by rising interest rates, and the related borrower’s ability to make all payments due on their respective obligations, including those related to the mortgage loans included in the trust, may be adversely affected.
See “Description of the Mortgage Pool—Subordinate and/or Other Financing” and “—Additional Debt Financing For Mortgage Loans Secured by Residential Cooperatives” and Annex A-1 to this free writing prospectus and see representation and warranty no. 9 in Annex C-1 to this free writing prospectus and the exceptions thereto in Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus).
Litigation Arising Out of Ordinary Business or Other Activities of the Borrowers, Borrower Principals, Sponsors and Managers Could Adversely Affect Distributions on Your Certificates
There may be pending or threatened legal proceedings against the borrowers, the borrower principals, the sponsors and the managers of the mortgaged properties securing the mortgage loans and/or their respective affiliates arising out of their ordinary course of business. Some disputes may result in liability to a borrower which may have a negative impact on a borrower’s financial condition or ability to perform its obligations under the related mortgage loan documents or may distract executive management of a property manager and negatively impact their ability to effectively manage the related mortgaged
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property. We cannot assure you that any such litigation would not have a material adverse effect on your certificates.
Additionally there may be past, pending or threatened litigation against a borrower, borrower principal, sponsor or manager of a mortgaged property securing the mortgage loans and/or their respective affiliates due to activities unrelated to the mortgaged property.
We cannot assure you that such past, pending or future litigation or the related circumstances would not have a material adverse effect on your certificates.
See “Description of the Mortgage Pool—Litigation Considerations” in this free writing prospectus for additional information regarding certain litigation affecting the mortgaged properties and the related borrowers, sponsors, managers and their respective affiliates, and see also representation and warranty no. 15 in Annex C-1 to this free writing prospectus and the exceptions thereto in Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus).
Bankruptcy Proceedings Relating to a Borrower Can Result in Dissolution of the Borrower and the Acceleration of the Related Mortgage Loan and Can Otherwise Impair Repayment of the Related Mortgage Loan
Under the U.S. bankruptcy code, the filing of a bankruptcy petition by or against a borrower will stay the commencement or continuation of a foreclosure action or any deficiency judgment proceeding. In addition, if a court determines that the value of the mortgaged property is less than the principal balance of the mortgage loan it secures, the amount of secured indebtedness may be reduced to the then-current value of the mortgaged property. The lender would become a general unsecured creditor for the difference between the then-current value and the amount of its outstanding mortgage indebtedness. If it otherwise meets the criteria for confirmation established by the U.S. bankruptcy code, a plan of reorganization may:
· | permit a debtor to cure existing defaults and reinstate a mortgage loan; |
· | reduce monthly payments due under a mortgage loan; |
· | change the rate of interest due on a mortgage loan; or |
· | otherwise alter the mortgage loan’s repayment schedule. |
Additionally, the trustee of the borrower’s bankruptcy or the borrower, as debtor-in-possession, has special powers to avoid, subordinate or disallow certain debts, liens or other transfers. The claims of the mortgage lender may also be subordinated to financing obtained by a debtor-in-possession subsequent to its bankruptcy.
The filing of a bankruptcy petition will stay the lender from enforcing a borrower’s assignment of rents and leases. The U.S. bankruptcy code also may interfere with the trustee’s ability to enforce any lockbox requirements. The legal proceedings necessary to resolve these issues can be time consuming and costly and may significantly delay or reduce the lender’s receipt of rents. A bankruptcy court may also permit rents otherwise subject to an assignment and/or lockbox arrangement to be used by the borrower to maintain the mortgaged property or for other court authorized expenses.
In addition, the filing of a bankruptcy petition by or with respect to a third party may adversely affect a secured lender’s rights. For example, the filing of a petition by or on
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behalf of a junior mortgage lien holder may stay the senior mortgage lender from taking action to foreclose out such junior lien. At a minimum, the senior mortgage lender would suffer delay due to its need to seek bankruptcy court approval before taking any foreclosure or other action that could be deemed in violation of the automatic stay applicable to such junior mortgage lien holder. Also, the junior lender may vote in the bankruptcy case of the borrower in favor of borrower’s plan of reorganization modifying the rights of the senior lender. Therefore, the existence of a second mortgage on a mortgaged property may adversely affect the interests of the certificateholders in the event of the filing of a petition by or on behalf of a related borrower or a junior lender. See “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans—Voluntary Prepayment and Defeasance Provisions—Other Prepayment Provisions” in this free writing prospectus.
Certain mortgage loans have a borrower or borrower sponsors or affiliates of borrower sponsors that have previously availed themselves or are affiliated with entities that have previously availed themselves of their rights under applicable bankruptcy laws. We cannot assure you that such sponsors will not be more likely than other sponsors to utilize their rights in bankruptcy in the event of any threatened action by the mortgagee to enforce its rights under the related mortgage loan documents. See “Description of the Mortgage Pool—Default History, Bankruptcy Issues and Other Proceedings” in this free writing prospectus for additional information on certain mortgage loans in the trust. See also representation and warranty no. 42 on Annex C-1 to this free writing prospectus and the exceptions thereto on Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus).
As a result of the foregoing, the recovery with respect to borrowers in bankruptcy proceedings may be significantly delayed, and the aggregate amount ultimately collected may be substantially less than the amount owed.
The mortgage pool includes some groups of mortgage loans where the mortgage loans in the particular group are not cross-collateralized or cross-defaulted but were made to borrowers related through common ownership of partnership or other equity interests and where, in general, the related mortgaged properties are commonly managed. See “Description of the Mortgage Pool—Certain Characteristics of the Mortgage Pool—Multi-Property Mortgage Loans; Mortgage Loans with Affiliated Borrowers” in this free writing prospectus. The bankruptcy or insolvency of any such borrower or respective affiliate could have an adverse effect on the operation of all of the related mortgaged properties and on the ability of such related mortgaged properties to produce sufficient cash flow to make required payments on the related mortgage loans. For example, if a person that owns or controls several mortgaged properties experiences financial difficulty at one such property, it could defer maintenance at one or more other mortgaged properties in order to satisfy current expenses with respect to the mortgaged property experiencing financial difficulty, or it could attempt to avert foreclosure by filing a bankruptcy petition that might have the effect of interrupting monthly payments for an indefinite period on all the related mortgage loans.
As a result of the foregoing, the recovery with respect to borrowers in bankruptcy proceedings may be significantly delayed, and the aggregate amount ultimately collected may be substantially less than the amount owed.
A number of the borrowers under the mortgage loans are limited or general partnerships. Under some circumstances, the bankruptcy of a general partner of the partnership may result in the dissolution of that partnership. The dissolution of a borrower partnership, the winding up of its affairs and the distribution of its assets could result in an early repayment of the related mortgage loan.
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With respect to certain of the mortgage loans, the borrowers may own the related mortgaged property as tenants-in-common. The bankruptcy, dissolution or action for partition by one or more of the tenants-in-common could result in an early repayment of the related mortgage loan, significant delay in recovery against the tenant-in-common borrowers, a material impairment in property management and a substantial decrease in the amount recoverable upon the related mortgage loan. Not all tenants-in-common for all mortgage loans are special purpose entities. See “—Tenancies in Common May Hinder Recovery” and “Description of the Mortgage Pool—Certain Characteristics of the Mortgage Pool—Property Type Concentrations” and “—Tenancies in Common; Delaware Statutory Trusts” in this free writing prospectus.
Mortgage Loans With Borrowers That Are Not Bankruptcy Remote Entities or That Do Not Have Non-Recourse Carveout Guarantees May Be More Likely To File Bankruptcy Petitions or Take Other Actions That May Adversely Affect Distributions on Your Certificates
While many of the borrowers under the mortgage loans have agreed to certain special purpose covenants to limit the bankruptcy risk arising from activities unrelated to the operation of the mortgaged property, some borrowers under the mortgage loans (including each of the borrowers with respect to the residential cooperative loans included in the trust) are not special purpose entities. Additionally, most borrowers under the mortgage loans and their owners do not have an independent director whose consent would be required to file a bankruptcy petition on behalf of such borrower. One of the purposes of an independent director is to avoid a bankruptcy petition filing that is intended solely to benefit a borrower’s affiliate and is not justified by the borrower’s own economic circumstances.
Additionally, it is common for non-recourse mortgage loans to provide for certain carveouts to the non-recourse provisions, such as for fraud and other bad acts. Often, an individual or entity separate from the related borrower will provide a guaranty of payment with respect to the non-recourse carveouts. However, some mortgage loans included in the trust do not have separate guarantors for non-recourse carveouts or have separate guarantors only for very limited non-recourse carveouts. In addition, with respect to those mortgage loans with separate non-recourse carveout guarantors, many of such guarantors are also guarantors (and in some cases, non-recourse carveout guarantors) with respect to mortgage loans that are not included in the mortgage pool and some of such guarantors may have limited assets and/or liquidity relative to amounts due or potentially due under the related mortgage loan. In other cases, the recourse liability may be limited to an amount less (and in some instances significantly less) than the outstanding principal balance of the related mortgage loan. For information regarding such limitations with respect to the fifteen largest mortgage loans, see “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans—Non-Recourse Obligations” in this free writing prospectus. The residential cooperative loans included in the trust are generally fully recourse to the borrower and do not have separate guarantors for non-recourse carveouts. See representation and warranty no. 28 in Annex C-1 to this free writing prospectus and the exceptions thereto in Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus).
One of the purposes of having a separate guarantor for non-recourse carveouts that is liable in the event certain actions are taken with respect to a mortgage loan or the related mortgaged property by the related borrower or guarantor is to limit the likelihood the borrower or guarantor will inappropriately utilize bankruptcy petitions to avoid actions against the related mortgaged property. In addition, having a separate non-recourse
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carveout guarantor may also limit the likelihood of other bad acts (which may include fraud) by the borrower or guarantor.
Furthermore, non-consolidation opinions were generally not obtained in connection with the origination of mortgage loans with original principal balances of $30 million or less.
Prior Bankruptcies or Other Proceedings May Be Relevant to Future Performance
We cannot assure you that any borrower, or any principal of a borrower, has not been a party to bankruptcy proceedings, foreclosure proceedings or deed-in-lieu of foreclosure transactions, or other material proceedings, in the past or that certain principals have not been equity owners in other mortgaged properties that have been subject to foreclosure proceedings. In addition, with respect to certain mortgaged properties there have been pending or threatened foreclosure proceedings or other material proceedings of the borrowers, the borrower principals and the managers of the mortgaged properties securing the mortgage loans and/or their respective affiliates.
Certain principals of the borrowers under the mortgage loans have previously sponsored real estate projects that became the subject of foreclosure proceedings or a deed-in-lieu of foreclosure, and certain of the mortgage loans have refinanced a prior loan secured by the related mortgaged property which prior loan was the subject of a discounted payoff, short sale or other restructuring. If a borrower or a principal of a borrower has been a party to such a proceeding or transaction in the past, we cannot assure you that the borrower or principal will not be more likely than other borrowers or principals to avail itself or cause a borrower to avail itself of its legal rights, in bankruptcy or otherwise, in the event of an action or threatened action by the mortgagee or its servicer to enforce the related mortgage loan documents, or that the borrower or principal will otherwise conduct its operations in a manner that is in the best interests of the lender and/or the mortgaged property. We cannot assure you that any foreclosure proceedings or other material proceedings, if one were to occur, will not have a material adverse effect on your investment.
In addition, certain of the mortgage loans have sponsors that have previously filed bankruptcy, which in some cases may have involved the same mortgaged property that currently secures the mortgage loan. In each case, the related entity or person has emerged from bankruptcy. However, we cannot assure you that such sponsors will not be more likely than other sponsors to utilize their rights in bankruptcy in the event of any threatened action by the mortgagee to enforce its rights under the related mortgage loan documents.
See “Description of the Mortgage Pool—Default History, Bankruptcy Issues and Other Proceedings” in this free writing prospectus.
The Performance of a Mortgage Loan and Its Related Mortgaged Property Depends in Part on Who Controls the Borrower and Mortgaged Property
The operation and performance of a mortgage loan (or loan combination) will depend in part on the identity of the persons or entities who control the borrower and the mortgaged property. The performance of a mortgage loan (or loan combination) may be adversely affected if control of a borrower changes, which may occur, for example, by means of transfers of direct or indirect ownership interests in the borrower, or if the mortgage loan (or loan combination) is assigned to and assumed by another person or entity along with a transfer of the property to that person or entity.
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The mortgage loans generally contain a “due-on-sale” clause that, with certain exceptions, permits the holder of the mortgage to accelerate the maturity of the related mortgage loan if the borrower sells or otherwise transfers the related mortgaged property or that prohibits the borrower from doing so without the consent of the holder of the mortgage. However, the enforceability of such clauses may be limited under applicable law. In addition, many of the mortgage loans entitle the related borrower or direct or indirect equity holders of the related borrower to enter into assignments and assumptions or transfers of the related mortgaged property or such equity interests in the related borrower, subject to the satisfaction of specified conditions or the lender’s reasonable approval of the transferee. Each special servicer (or, in the case of a non-servicedpari passu mortgage loan serviced under another pooling and servicing agreement, the applicable master servicer or special servicer under such pooling and servicing agreement) generally will have authority to determine whether to waive any violation of a due-on-sale or due-on-encumbrance provision or to approve any borrower request for consent to an assignment and assumption of the mortgage loan or a transfer of interests in a borrower. In addition, the residential cooperative mortgage loans do not restrict the transfer or pledge of interests in the related cooperative borrower in connection with the transfer or financing of cooperative apartment units. For these reasons, we cannot assure you that the ownership of any of the borrowers would not change during the term of the related mortgage loan and result in a material adverse effect on your certificates.
Provisions Requiring Yield Maintenance Charges, Prepayment Premiums or Defeasance Provisions May Not Be Enforceable
Provisions in the mortgage loan documents requiring yield maintenance charges, prepayment premiums or lock-out periods may not be enforceable in some states and under federal bankruptcy law. Provisions in the mortgage loan documents requiring yield maintenance charges or prepayment premiums also may be interpreted as constituting the collection of interest for usury purposes. Accordingly, we cannot assure you that the obligation to pay any yield maintenance charge or prepayment premium under a mortgage loan will be enforceable. Also, we cannot assure you that foreclosure proceeds under a mortgage loan will be sufficient to pay an enforceable yield maintenance charge or prepayment premium.
Additionally, although the collateral substitution provisions in the mortgage loan documents related to defeasance do not have the same effect on the certificateholders as prepayment, we cannot assure you that a court would not interpret those provisions as requiring a yield maintenance charge. In certain jurisdictions, those collateral substitution provisions might be deemed unenforceable under applicable law or public policy, or usurious.
Further, certain loans may permit variations in the mechanics of defeasance transactions that create risk. With respect to certain of the mortgage loans, the related borrower may be permitted to deliver a certificate as to the adequacy of defeasance collateral from parties other than a recognized public accounting firm, and may not be required to obtain a rating agency confirmation in connection with the defeasance.
Substitution of Mortgaged Properties and Debt Severance Provisions May Lead to Increased Risks
Certain of the mortgage loans permit the related borrowers to substitute other similar properties in place of one or more of the mortgaged properties currently securing such mortgage loan. See “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans—Voluntary Prepayment and Defeasance Provisions—Partial Release and/or Partial
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Defeasance and/or Substitution and/or Severance/Partial Assumption” and “—Certain Characteristics of the Mortgage Pool—Multi-Property Mortgage Loans; Mortgage Loans with Affiliated Borrowers” in this free writing prospectus.
If a mortgage loan allows substitution of real estate collateral, the different characteristics of any substitute properties (such as location) may adversely affect the performance of the related mortgage loan, notwithstanding the substitution criteria that the replacement properties were required to satisfy at the dates of substitution. See “Summaries of the Fifteen Largest Mortgage Loans—WPC Self Storage Portfolio VII” in Annex A-3 to this free writing prospectus.
If a multi-property mortgage loan allows termination of the cross-collateralization provisions, the fully severed loans may not perform as well after the termination as the aggregate indebtedness might have performed had all the properties continued to secure the aggregate indebtedness, notwithstanding the criteria that the properties were required to satisfy as a condition to the termination.
Inadequacy of Title Insurers May Adversely Affect Distributions on Your Certificates
Title insurance for a mortgaged property generally insures a lender against risks relating to a lender not having a first lien with respect to a mortgaged property, and in some cases can insure a lender against specific other risks. The protection afforded by title insurance depends on the ability of the title insurer to pay claims made upon it. We cannot assure you that with respect to any mortgage loan:
· | a title insurer will have the ability to pay title insurance claims made upon it; |
· | the title insurer will maintain its present financial strength; or |
· | a title insurer will not contest claims made upon it. |
Certain of the mortgaged properties are either completing initial construction or undergoing renovation or redevelopment. Under such circumstances, there may be limitations to the amount of coverage or other exceptions to coverage that could adversely affect the Trust if losses are suffered. See “—Risks Related to Construction, Redevelopment and Renovation at the Mortgaged Properties” and “Description of the Mortgage Pool—Other Matters” in this free writing prospectus.
Increases in Real Estate Taxes May Reduce Net Operating Income
Certain of the mortgaged properties securing the mortgage loans have or may in the future have the benefit of reduced real estate taxes in connection with a local government program of “payment in lieu of taxes” programs or other tax abatement arrangements. Upon expiration of such program or if such programs were otherwise terminated, or if the benefits thereunder were reduced, the related borrower would be required to pay higher, and in some cases substantially higher, real estate taxes. An increase in real estate taxes may impact the ability of the borrower to pay debt service on the mortgage loan. See “Description of the Mortgage Pool—Other Matters” in this free writing prospectus.
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Mortgaged Properties That Are Not in Compliance with Zoning and Building Code Requirements and Use Restrictions Could Adversely Affect Distributions on Your Certificates
Noncompliance with zoning and building codes may cause the borrower with respect to any mortgage loan to experience cash flow delays and shortfalls that would reduce or delay the amount of proceeds available for distributions on your certificates. The mortgage loan sellers have taken steps to establish that the use and operation of the mortgaged properties securing the mortgage loans are in compliance in all material respects with all applicable zoning, land-use and building ordinances, rules, regulations, and orders. Evidence of this compliance may be in the form of legal opinions, zoning consultants’ reports, information set forth in the related appraisal, confirmations from government officials, title policy endorsements and/or representations by the related borrower in the related mortgage loan documents. These steps may not have revealed all possible violations.
Some violations of zoning, land use and building regulations may be known to exist at any particular mortgaged property, but the mortgage loan sellers generally do not consider those defects known to them to be material or have obtained title policy endorsements and/or law and ordinance insurance to mitigate the risks of loss associated with any material violation or noncompliance. In some cases, the use, operation and/or structure of a mortgaged property constitutes a permitted nonconforming use and/or structure as a result of changes in zoning laws after such mortgaged properties were constructed or for other reasons, and the structure may not be rebuilt to its current state or be used for its current purpose if a material casualty event occurs. Insurance proceeds may not be sufficient to pay the related mortgage loan in full if a material casualty event were to occur, or the mortgaged property, as rebuilt for a conforming use and/or structure, may not generate sufficient income to service the related mortgage loan and the value of the mortgaged property or its revenue producing potential may not be the same as it was before the casualty. Any potential loss in income will not be covered by law and ordinance insurance. See “Description of the Mortgage Pool—Assessments of Property Value and Condition—Zoning and Building Code Compliance” in this free writing prospectus. If a mortgaged property could not be rebuilt to its current state or its current use were no longer permitted due to building violations or changes in zoning or other regulations, then the borrower might experience cash flow delays and shortfalls or be subject to penalties that would reduce or delay the amount of proceeds available for distributions on your certificates.
In addition, certain mortgaged properties may be subject to zoning, land-use or building restrictions in the future. Mortgaged properties that do not conform to zoning laws may not be “legal non-conforming uses” or “legal non-conforming structures.” The failure of a mortgaged property to comply with zoning laws or to be a “legal non-conforming use” or “legal non-conforming structure” may adversely affect market value of the mortgaged property or the borrower’s ability to continue to use it in the manner it is currently being used or may necessitate material additional expenditures to remedy non-conformities. Further, uses currently permitted under a zoning ordinance may be subject to “sunset” provisions that either require future approval to be continued or prohibit the use altogether after a specified period of time. Typically, no compensation is available to the landowner either from the related jurisdiction or from any insurance proceeds when a use is discontinued in such a manner. See “Description of the Mortgage Pool—Assessments of Property Value and Condition—Zoning and Building Code Compliance” and “—Other Matters” in this free writing prospectus, and see also representation and warranty no. 26 in Annex C-1 to this free writing prospectus and the exceptions thereto in Annex C-2 to this
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free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus).
Additionally, certain mortgaged properties may have been designated as historic or landmark buildings or may be located in areas designated as historic or landmark or may be subject to conservation restrictions to protect local flora or fauna. Such properties may have restrictions related to renovations, construction or other restrictions. See “Description of the Mortgage Pool—Assessments of Property Value and Condition—Zoning and Building Code Compliance” in this free writing prospectus.
Certain mortgaged properties may be subject to use restrictions pursuant to reciprocal easement or operating agreements. Such use restrictions could include, for example, limitations on the character of the improvements or the properties, limitations affecting noise and parking requirements, signs and common area use, and limitations on the borrower’s right to certain types of facilities within a prescribed radius, among other things. These limitations could adversely affect the ability of the borrower to lease the mortgaged property on favorable terms, thus adversely affecting the borrower’s ability to fulfill its obligations under the related mortgage loans.
Condemnations With Respect to Mortgaged Properties Could Adversely Affect Distributions on Your Certificates
From time to time, there may be condemnations pending or threatened against one or more of the mortgaged properties securing the mortgage loans. We cannot assure you that the proceeds payable in connection with a total condemnation will be sufficient to restore the subject mortgaged property or to satisfy the remaining indebtedness of the related mortgage loan. The occurrence of a partial condemnation may have a material adverse effect on the continued use of the affected mortgaged property, or on an affected borrower’s ability to meet its obligations under the related mortgage loan. In addition, in some cases, particularly involving single-tenant mortgaged properties or mortgaged properties consisting of one or more (but less than all) of the condominium units in a building subject to a condominium declaration, if a condemnation award is not entirely applied to restore the related mortgaged property following a partial taking, or if there is a complete taking of the related mortgaged property, the resulting condemnation award may need to be shared between an affected tenant and the applicable borrower/landlord or among the condominium unit owners, thereby reducing the portion of such proceeds available to pay the related mortgage loan. Similarly, in some cases involving ground leases, if a condemnation award is not entirely applied to the related mortgaged property, the resulting condemnation award may need to be shared between the affected lessor and the borrower/lessee, thereby reducing the portion of such proceeds available to pay the related leasehold mortgage loan. Therefore, we cannot assure you that the occurrence of any condemnation will not have a negative impact upon the distributions on your certificates. See “Description of the Mortgage Pool—Other Matters” in this free writing prospectus.
The Absence of or Inadequacy of Insurance Coverage on the Property May Adversely Affect Distributions on Your Certificates
The mortgaged properties securing the mortgage loans may suffer casualty losses due to risks (including acts of terrorism) that are not covered by insurance or for which insurance coverage is not adequate or available at commercially reasonable rates or has otherwise been contractually limited by the related mortgage loan documents. Each borrower is required to maintain insurance coverage in respect of the related mortgaged property in amounts and from providers satisfying certain requirements, each as provided
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for in the related mortgage loan documents. Some of these policies may not cover any physical damage resulting from, among other things, war, revolution, or nuclear, biological or chemical materials. In addition, even if a type of loss is covered by the insurance policies required to be in place at the related mortgaged property, the mortgaged property may suffer losses for which the insurance coverage is inadequate. For example, in the case where terrorism coverage is included under a policy, if the terrorist attack is, for example, nuclear, biological or chemical in nature, the policy may include an exclusion that precludes coverage for such terrorist attack. Moreover, if reconstruction or major repairs are required following a casualty, changes in laws that have occurred since the time of original construction may materially impair the borrower’s ability to effect such reconstruction or major repairs or may materially increase the cost thereof.
Some of the mortgaged properties securing the mortgage loans are located in coastal areas (including southeastern coastal states), which areas have historically been at greater risk of acts of nature, including fire, earthquakes, hurricanes and floods. The mortgage loans generally do not expressly require borrowers to maintain insurance coverage for earthquakes, hurricanes or floods and we cannot assure you that borrowers will attempt or be able to obtain adequate insurance against such risks.
Following the September 11, 2001 terrorist attacks in the New York City area and Washington, D.C. area, many reinsurance companies (which assume some of the risk of policies sold by primary insurers) eliminated coverage for acts of terrorism from their reinsurance policies. Without that reinsurance coverage, primary insurance companies would have to assume that risk themselves, which may cause them to eliminate such coverage in their policies, increase the amount of the deductible for acts of terrorism or charge higher premiums for such coverage. In order to offset this risk, Congress passed the Terrorism Risk Insurance Act of 2002, which established the Terrorism Insurance Program. On December 26, 2007, the Terrorism Insurance Program was extended and amended by the Terrorism Risk Insurance Program Reauthorization Act of 2007 and was reauthorized and amended on January 12, 2015 until December 31, 2020 under the Terrorism Risk Insurance Program Reauthorization Act of 2015.
The Terrorism Insurance Program is administered by the Secretary of the Treasury and provides some financial assistance from the United States government to insurers in the event of another terrorist attack that results in an insurance claim. The program applies to United States risks only and to acts that are committed by an individual or individuals as an effort to influence or coerce United States civilians or the United States government. The Terrorism Risk Insurance Act of 2002, as amended by the Terrorism Risk Insurance Program Reauthorization Act of 2007 and the Terrorism Risk Insurance Program Reauthorization Act of 2015, requires an investigation by the Comptroller General to study the availability and affordability of insurance coverage for nuclear, biological, chemical and radiological attacks.
In addition, no compensation is payable under the Terrorism Insurance Program unless the aggregate industry losses relating to such act of terror exceed a specified threshold, which is $100 million in 2015, subject to annual $20 million increases until the threshold is equal to $200 million. As a result, unless the borrowers obtain separate coverage for events that do not meet these thresholds (which coverage may not be required by the respective mortgage loan documents and may not otherwise be obtainable), such events would not be covered.
Under the Terrorism Insurance Program, the federal share of compensation will be equal to 85% in 2015, subject to annual decreases of 1% until equal to 80%, of the portion of insured losses that exceeds an applicable insurer deductible required to be paid during each program year (which insurer deductible was fixed by the Terrorism Risk Insurance Program
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Reauthorization Act of 2007 at 20% of an insurer’s direct earned premium for any program year). The federal share in the aggregate in any program year may not exceed $100 billion (and the insurers will be liable for any amount that exceeds this cap). An insurer that has paid its deductible is not liable for the payment of any portion of total annual United States wide losses that exceed $100 billion, regardless of the terms of the individual insurance contracts.
Some of the mortgage loans do not require the related borrower to maintain terrorism insurance. In addition, most of the mortgage loans contain limitations on the related borrower’s obligation to obtain terrorism insurance, such as (i) waiving the requirement that such borrower maintain terrorism insurance if such insurance is not available at commercially reasonable rates, (ii) providing that the related borrower is not required to spend in excess of a specified dollar amount (or in some cases, a specified multiple of what is spent on other insurance) in order to obtain such terrorism insurance, (iii) requiring coverage only for as long as the Terrorism Risk Insurance Act of 2002, as amended by the Terrorism Risk Insurance Program Reauthorization Act of 2007 and the Terrorism Risk Insurance Program Reauthorization Act of 2015, is in effect, or (iv) requiring coverage only for losses arising from domestic acts of terrorism or from terrorist acts certified by the federal government as “acts of terrorism” under the Terrorism Risk Insurance Act of 2002, as amended by the Terrorism Risk Insurance Program Reauthorization Act of 2007 and the Terrorism Risk Insurance Program Reauthorization Act of 2015. See the “Summaries of the Fifteen Largest Mortgage Loans” attached as Annex A-3 to this free writing prospectus for a summary of the terrorism insurance requirements under each of the 10 largest mortgage loans. See also representation and warranty no. 31 in Annex C-1 and the exceptions thereto in Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus).
If the Terrorism Risk Insurance Program Reauthorization Act of 2015 is not renewed prior to its expiration, premiums for terrorism insurance coverage will likely increase and/or the terms of such insurance may be materially amended to increase stated exclusions or to otherwise effectively decrease the scope of coverage available (perhaps to the point where it is effectively not available). In addition, to the extent that any policies contain “sunset clauses” (i.e., clauses that void terrorism coverage if the federal insurance backstop program is not renewed), then such policies may cease to provide terrorism insurance. We cannot assure you that the Terrorism Insurance Program will create any long-term changes in the availability and cost of insuring terrorism risks. In addition, we cannot assure you that terrorism insurance or the Terrorism Insurance Program will be available or provide sufficient protection against risks of loss on the mortgaged properties resulting from acts of terrorism or that all of the mortgaged properties will be insured against the risks of terrorism and similar acts. Moreover, future legislation, including regulations expected to be adopted by the Treasury Department pursuant to the Terrorism Risk Insurance Program Reauthorization Act of 2015, may have a material effect on the availability of federal assistance in the terrorism insurance market. As a result of any of the foregoing, the amount available to make distributions on your certificates could be reduced.
Some of the mortgaged properties securing the mortgage loans are covered by blanket insurance policies which also cover other properties of the related borrower or its affiliates. If such policies are drawn on to cover losses on such other properties, the amount of insurance coverage available under such policies may thereby be reduced and could be insufficient to cover each mortgaged property’s insurable risks. In addition, with respect to some of the mortgaged properties, a tenant, an affiliate of the related borrower or other third party is permitted to satisfy the insurance requirements under the related mortgage loan documents or to self-insure. To the extent that insurance coverage relies on
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self-insurance, there is risk that the “insurer” will not be willing or have the financial ability to satisfy the claim when a loss occurs. Additionally, the risk of blanket or self-insurance can be aggravated if affiliated borrowers under multiple mortgage loans in the trust are covered under the same self-insurance or blanket policy. See also representation and warranty nos. 18 and 31 in Annex C-1 and the exceptions thereto in Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus).
Environmental Conditions at the Mortgaged Properties May Subject the Trust Fund to Liability Under Federal and State Laws, Reducing the Value and Cash Flow of the Mortgaged Properties, Which May Result in Reduced Distributions on Your Offered Certificates
The trust fund could become liable under certain circumstances for a material adverse environmental condition at any of the mortgaged properties securing the mortgage loans. Any potential environmental liability could reduce or delay distributions on the offered certificates.
Various environmental laws may make a current or previous owner or operator of real property liable for the costs of removal or remediation of hazardous or toxic substances on, under or adjacent to such property. Those laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of the hazardous or toxic substances. For example, certain laws impose liability for release of asbestos-containing materials into the air or require the removal or containment of asbestos-containing materials. In some states, contamination of a property may give rise to a lien on the property to assure payment of the costs of cleanup. In some states, this lien has priority over the lien of a pre-existing mortgage. Additionally, third parties may seek recovery from owners or operators of real properties for cleanup costs, property damage or personal injury associated with releases of, or other exposure to, hazardous substances related to the properties.
The owner’s liability for any required remediation generally is not limited by law and could, accordingly, exceed the value of the property and/or the aggregate assets of the owner. The presence of hazardous or toxic substances also may adversely affect the owner’s ability to refinance the property or to sell the property to a third party. The presence of, or strong potential for contamination by, hazardous substances consequently can have a materially adverse effect on the value of the property and a borrower’s ability to repay its mortgage loan.
In addition, under certain circumstances, a lender (such as the trust) could be liable for the costs of responding to an environmental hazard.
Each of the mortgaged properties securing any mortgage loan has been subject to a Phase I environmental site assessment by a third-party consultant, or in some cases an update of a previous assessment or transaction screen, in connection with the origination (or, if applicable, acquisition) of the mortgage loans or otherwise in connection with this offering. None of the environmental assessments of the mortgaged properties in the trust was more than fourteen (14) months old as of the cut-off date. In some cases, a Phase II environmental site assessment was also performed or recommended. In certain cases, gas stations operate or previously operated at Mortgaged Properties or on third-party properties adjacent to the Mortgaged Properties, and the related environmental site assessments concluded that such gas stations and their underground storage tanks are not significant concerns for reasons including but not limited to no identified past or present spills or other releases, regulatory closure achieved for past spills or releases, and direction of hydraulic
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gradient. In certain cases, these assessments revealed conditions that resulted in requirements that the related borrowers establish operations and maintenance plans, monitor the mortgaged property or nearby properties, abate or remediate the condition, and/or provide additional security such as letters of credit, reserves, a secured creditor impaired property policy, environmental insurance policy or pollution legal liability environmental impairment policy or environmental indemnification. In certain cases, recommended Phase II environmental site assessments were not performed and reserves or insurance policies were obtained in lieu thereof or the related lender otherwise determined not to have the Phase II environmental site assessment performed. Additionally, certain of the mortgaged properties have had recognized environmental conditions for which remediation has previously occurred or ongoing remediation or monitoring is still continuing.
In addition, with respect to certain of the mortgaged properties, the related environmental site assessment may have recommended no further action where (i) underground storage tanks had been removed with no contamination found, abandoned on-site in accordance with state and municipal regulations and/or were issued regulatory closure, (ii) former gas stations or dry cleaning facilities had resulted in soil and/or groundwater contamination that received regulatory closure based on completion of remediation or of a determination of low environmental risk, (iii) contaminants were determined to exist for other reasons, but regulatory closure was ultimately issued, or (iv) nearby third-party contamination sites were not likely to impact the mortgaged properties.
In certain cases where the environmental consultant recommended that action be taken in respect of a materially adverse or potentially material adverse environmental condition at the related mortgaged property, then:
· | an environmental consultant investigated those conditions and recommended no further investigations or remediation; or |
· | a responsible third party was identified as being responsible for the remediation; or |
· | the related originator of the mortgage loan generally required the related borrower: |
(a) | to take investigative and/or remedial action (which may have included obtaining a Phase II environmental assessment); or |
(b) | to carry out an operation and maintenance plan or other specific remedial measures post-closing and/or to establish an escrow reserve in an amount estimated to be sufficient for effecting that investigation, plan and/or the remediation; or |
(c) | to monitor the environmental condition and/or to carry out additional testing, in the manner and within the time frame specified in the related mortgage loan documents or by the environmental consultant; or |
(d) | to obtain or seek a letter from the applicable regulatory authority stating that no further action was required; or |
(e) | to obtain environmental insurance (in the form of a secured creditor impaired property policy or other form of environmental insurance) or provide an indemnity or guaranty from an individual or an entity (which may include the related loan sponsor). |
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In many cases, the environmental assessments described above identified the presence or likely presence of asbestos-containing materials, lead-based paint, mold, radon and/or other contaminants. Where certain levels of asbestos-containing materials, lead-based paint or mold were present above actionable levels, the environmental consultant generally recommended, and the related mortgage loan documents generally required the continuation or the establishment of an operation and maintenance plan to address the issue, or the implementation of a remediation or mitigation program to address the issue.
See “Description of the Mortgage Pool—Assessments of Property Value and Condition—Environmental Assessments” in this free writing prospectus and see also representation and warranty no. 43 in Annex C-1 to this free writing prospectus and the exceptions thereto in Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus) for additional information regarding certain environmental concerns impacting the mortgaged properties.
In general, different types of environmental liability insurance policies provide coverage with respect to a mortgage loan for one or more of the following losses, subject to the applicable coverage limits and deductibles, and further subject to each policy’s conditions and exclusions:
· | if during the term of some types of lender environmental policies, the borrower defaults under its mortgage loan and adverse environmental conditions exist at levels above legal limits on the related underlying real property, the insurer will indemnify the insured for an amount (in some cases capped at remediation costs) equal to the outstanding principal balance (or, in some cases, a lesser specified amount) of the related mortgage loan on the date of the default, together with accrued interest from the date of default (or, in some cases, the date that the default is reported to the insurer) until the date that the outstanding principal balance is paid; or |
· | if the insured becomes legally obligated to pay as a result of a claim first made against the insured and reported to the insurer during the term of a policy, for bodily injury, property damage or clean-up costs resulting from adverse environmental conditions on, under or emanating from the underlying real property, the insurer will pay the lesser of a specified amount and the amount of that claim; or |
· | if the insured enforces the related mortgage loan, the insurer will thereafter pay the lesser of a specified amount and the amount of the legally required clean-up costs for adverse environmental conditions at levels above legal limits which exist on or under the acquired underlying real property,provided that the appropriate party reported those conditions to the government in accordance with applicable law. |
Environmental liability insurance policies do not cover adverse environmental conditions that the insured first became aware of before the term of the policy unless those conditions were disclosed to the insurer before the policy was issued. In some cases, policies exclude coverage for known conditions even if disclosed.
Environmental liability policies may contain additional limitations and exclusions, including, but not limited to, exclusions from coverage for mold or other microbial contamination, asbestos and lead-based paint, coverages that are less than the related loan amount or policy durations which do not extend to or beyond the maturity of the related loan.
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Some borrowers under the mortgage loans may not have satisfied or may not satisfy all post-closing obligations required by the related mortgage loan documents with respect to environmental matters. We cannot assure you that recommended operations and maintenance plans have been implemented or will continue to be complied with.
In some cases, the environmental consultant did not recommend that any action be taken by the related borrower with respect to a potential adverse environmental condition at a mortgaged property because a responsible party, other than the related borrower, had been identified with respect to that condition. We cannot assure you, however, that such a responsible party will be willing or financially able to address the subject condition.
In addition, certain properties may be undergoing ongoing monitoring in connection with past remediation or low levels of contamination.
In some cases, there is no guarantor or indemnitor separate from the related borrower that is responsible for breaches of environmental covenants and/or representations.
We cannot assure you that the environmental assessments revealed all existing or potential environmental risks or that all adverse environmental conditions have been or will be completely abated or remediated or that any reserves, insurance or operations and maintenance plans will be sufficient to remediate the environmental conditions. Moreover, we cannot assure you that:
· | future laws, ordinances or regulations will not impose any material environmental liability; or |
· | the current environmental condition of the mortgaged properties will not be adversely affected by tenants or by the condition of land or operations in the vicinity of the mortgaged properties (such as underground storage tanks). |
Portions of some of the mortgaged properties securing the mortgage loans include tenants who operate, or in the past operated, on-site dry-cleaners, automotive service centers, gasoline stations or oil wells. These types of operations involve the use and storage of hazardous substances, leading to an increased risk of liability to the tenant, the landowner and, under certain circumstances, a lender (such as the trust) under environmental laws. Dry-cleaners, automotive service centers and gasoline station operators may be required to obtain various environmental permits and licenses in connection with their operations and activities and comply with various environmental laws, including those governing the use and storage of hazardous substances. These operations incur ongoing costs to comply with environmental laws governing, among other things, containment systems and underground storage tank systems. In addition, any liability to borrowers under environmental laws, including in connection with releases into the environment of gasoline, dry-cleaning solvents, crude oil or other hazardous substances from underground storage tank systems or otherwise, could adversely impact the related borrower’s ability to repay the related mortgage loan.
Problems associated with mold may pose risks to the real property and may also be the basis for personal injury claims against a borrower. Although the mortgaged properties are required to be inspected periodically, there is no set of generally accepted standards for the assessment of mold currently in place. If left unchecked, the growth of mold could result in the interruption of cash flow, litigation and remediation expenses which could adversely impact collections from a mortgaged property. In addition, many of the insurance policies presently covering the mortgaged properties may specifically exclude losses due to mold.
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Before the applicable special servicer acquires title to a mortgaged property on behalf of the trust, it must obtain an environmental assessment of such mortgaged property, or rely on a recent environmental assessment. This requirement will decrease the likelihood that the trust will become liable under any environmental law. However, this requirement may effectively preclude foreclosure until a satisfactory environmental assessment is obtained, or until any required remedial action is thereafter taken. There is accordingly some risk that the mortgaged property will decline in value while this assessment or remedial action is being obtained. Moreover, we cannot assure you that this requirement will effectively insulate the trust from potential liability under environmental laws. Any such potential liability could reduce or delay distributions to certificateholders.
Property Inspections and Engineering Reports May Not Reflect All Conditions That Require Repair on a Mortgaged Property
Licensed engineers or consultants generally inspected the related mortgaged properties (unless improvements are not part of the mortgaged property) and, in most cases, prepared engineering reports in connection with the origination of the mortgage loans or with this offering to assess items such as structure, exterior walls, roofing, interior construction, mechanical and electrical systems and general condition of the site, buildings and other improvements. However, we cannot assure you that all conditions requiring repair or replacement were identified. In those cases where a material condition was disclosed, such condition generally has been or is generally required to be remedied to the mortgagee’s satisfaction, or funds or a letter of credit as deemed necessary by the related mortgage loan seller or the related engineer or consultant have been reserved to remedy the material condition. Neither we nor any of the mortgage loan sellers conducted any additional property inspections in connection with the issuance of the certificates. An engineering report or site inspection represents only an analysis of the individual consultant, engineer or inspector at the time of such report and may not reveal all necessary or desirable repairs, maintenance or capital improvement items. See representation and warranty no. 12 in Annex C-1 to this free writing prospectus and the exceptions thereto in Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus).
Appraisals May Not Accurately Reflect the Value of the Mortgaged Properties
In general, in connection with the origination (or, if applicable, acquisition) of each mortgage loan or otherwise in connection with this offering, an appraisal was conducted in respect of the related mortgaged property by an independent appraiser that was state-certified and/or a member of the Appraisal Institute or an update of an existing appraisal was obtained. The resulting estimates of value are the basis of the cut-off date loan-to-value ratios referred to in this free writing prospectus. Those estimates represent the analysis and opinion of the person performing the appraisal or market analysis and are not guarantees of present or future values. The appraiser may have reached a different conclusion of value than the conclusion that would be reached by a different appraiser appraising the same property, or that would have been reached separately by the mortgage loan sellers based on their internal review of such appraisals. Moreover, the values of the mortgaged properties securing the mortgage loans may have changed significantly since the appraisal or market study was performed. In addition, appraisals seek to establish the amount a typically motivated buyer would pay a typically motivated seller. Such amount could be significantly higher than the amount obtained from the sale of a mortgaged property under a distress or liquidation sale. The estimates of value reflected in the appraisals and the related loan-to-value ratios are presented for illustrative purposes only on Annex A-1 and Annex A-2 to this free writing prospectus. In each case, the estimate
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presented is the one set forth in the most recent appraisal available to us as of the cut-off date, although we generally have not obtained updates to the appraisals. We cannot assure you that the appraised values indicated accurately reflect past, present or future market values of the mortgaged properties securing the mortgage loans. We cannot assure you that the information set forth in this free writing prospectus regarding appraised values or loan-to-value ratios accurately reflects past, present or future market values of the mortgaged properties. An appraisal represents only the analysis of the individual appraiser at the time of the appraisal report, and may not reveal all necessary or desirable repairs, maintenance and capital improvement items. If the related appraisal is not current, there is the additional risk that events or conditions subsequent to the date of the appraisal may adversely affect the market value of the mortgaged property. See representation and warranty no. 45 in Annex C-1 and the exceptions thereto in Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus) for additional information regarding the appraisals for the mortgaged properties.
In some cases, the appraisal obtained by the applicable originator presents both an “as-is” valuation and any of an “as-renovated”, “as-completed”, “hypothetical as-completed” or “as-stabilized” valuation, the latter three of which are based on the assumption that certain events will occur with respect to the construction, re-tenanting, renovation or other repositioning of such properties. All relevant loan-to-value information presented in this free writing prospectus (except (a) with respect to mortgage loans secured by residential cooperative properties, as to which the appraisal presents valuations based on the assumptions outlined in the following paragraphs and elsewhere in this free writing prospectus and (b) in the case of the mortgaged properties identified on Annex A-1 to this free writing prospectus as Jackson Square Apartments and 1321 Harbor Bay Parkway, securing approximately 1.1% and 0.6%, respectively, of the aggregate principal balance of the pool of mortgage loans as of the cut-off date by allocated loan amount, as to which the “as-completed” or “as-stabilized” valuation in the related appraisal has been used) is based on an “as-is” valuation. See the footnotes to Annex A-1 to this free writing prospectus and the definition of “Appraised Value” in Annex B to this free writing prospectus.
In addition, with respect to each mortgage loan secured by a residential cooperative property, the “Appraised Value” presented on Annex A-1 to this free writing prospectus is the appraised value of such property assuming such property is operated as a residential cooperative and, in general, equals the sum of (i) the gross sellout value of all cooperative units in such residential cooperative property (applying a discount for units that are subject to existing rent regulated or rent-controlled rental tenants as and if deemed appropriate by the appraiser), based in part on various comparable sales of cooperative apartment units in the market, plus (ii) the amount of the underlying debt encumbering such residential cooperative property. With respect to the mortgage loan identified on Annex A-1 to this free writing prospectus as Baywoods of Annapolis, representing approximately 1.4% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date, the related mortgaged property is a continuing care retirement community comprised of (i) a portion of the mortgaged property operated as an age-restricted residential cooperative property with certain enhanced member services and (ii) a portion of the mortgaged property operated as a residential healthcare facility. The “Appraised Value” of the mortgaged property securing the mortgage loan identified on Annex A-1 to this free writing prospectus as Baywoods of Annapolis is equal to the sum of (i) the value of the portion of such mortgaged property operated as a residential cooperative property determined as if such residential cooperative property is operated as a residential cooperative and calculated as provided above,plus (ii) the value of the portion of such mortgaged property operated as a residential healthcare facility, in each case as set forth in the related appraisal. With respect to limited equity
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cooperatives (i.e., housing cooperatives in which eligible members purchase shares at below market prices and are subject to restrictions on the sale price for which units may be re-sold), the gross sellout value referenced in the preceding sentence is calculated without regard to any applicable sale price restrictions. The comparable sales considered in the appraisers’ estimates of gross sellout values may have occurred at properties where the cooperative entity’s underlying mortgage debt per cooperative unit was substantially more or less than that at the applicable Mortgaged Property. The appraisers generally made no adjustments to comparable sales statistics to account for any such differences, although monthly unit maintenance obligations may have been considered. The “Coop-Rental Value” of a residential cooperative property presented on Annex A-1 to this free writing prospectus is the appraised value of such property assuming such property is operated as a multifamily rental property and, in general, is derived by applying an appropriate capitalization rate (as determined by the appraiser) to the underwritten net cash flow for such residential cooperative property. Such underwritten net cash flow is the projected net cash flow reflected in such appraisal and, in general, equals projected operating income at the property assuming such property is operated as a multifamily rental property with rents and other income set at prevailing market rates (but taking into account the presence of existing rent regulated or rent-controlled rental tenants), reduced by underwritten property operating expenses, a market-rate vacancy assumption and projected replacement reserves, in each case as determined by the appraiser. However, the projected net cash flow used in such determinations may differ materially from the scheduled monthly maintenance payments from the tenant-stockholders upon which residential cooperatives depend. In the case of the mortgage loan identified on Annex A-1 to this free writing prospectus as Baywoods of Annapolis, the underwritten net cash flow for the related mortgaged property equals the sum of (i) the projected net cash flow for the portion of such mortgaged property operated as a residential cooperative property calculated as provided above,plus (ii) the projected net cash flow as calculated for the portion of such mortgaged property operated as a residential healthcare facility, in each case as set forth in the related appraisal. Except where otherwise specified, all relevant loan-to-value information with respect to mortgage loans secured by residential cooperative properties is based on the “Appraisal Value” of such property as described above, and assumes that such property is operated as a residential cooperative. See the footnotes to Annex A-1 to this free writing prospectus and “—Residential Cooperative Properties Have Special Risks” above. See also “Certain Characteristics of Mortgage Loans Secured by Residential Cooperative” in Annex B to this free writing prospectus.
Debt Service Coverage Ratio and Net Cash Flow Information Is Based on Numerous Assumptions
As described in Annex B to this free writing prospectus, underwritten net cash flow means cash flow adjusted based on a number of assumptions used by the mortgage loan sellers. No representation is made that the underwritten net cash flow set forth in this free writing prospectus as of the cut-off date or any other date represents actual future net cash flows or the actual numbers utilized by the related mortgage loan sellers in the underwriting process at origination. Each investor should review the types of assumptions described below and in Annex B to this free writing prospectus and make its own determination of the appropriate assumptions to be used in determining underwritten net cash flow. In certain instances, co-tenancy provisions were assumed to be satisfied and vacant space was assumed to be occupied and space as to which a lease was due to expire (or was still under negotiation) was assumed to have been re-let, in each case at market rates that may have exceeded current rent.
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The underwritten net cash flow for each mortgaged property is calculated on the basis of numerous assumptions and subjective judgments, which, if ultimately proven erroneous, could cause the actual operating income for such mortgaged property to differ materially from the underwritten net cash flow set forth in this free writing prospectus. Some assumptions and subjective judgments related to future events, conditions and circumstances, including future expense levels, the re-leasing of occupied space, the retention of tenants and the completion of certain renovations and construction, which will be affected by a variety of complex factors over which none of the issuing entity, the depositor, the mortgage loan sellers, the master servicers, the special servicers, the certificate administrator or the trustee have control. In some cases, the underwritten net cash flow for any mortgaged property is higher or lower, and may be materially higher or lower, than the actual annual net operating income for that mortgaged property, based on historical operating statements. For example, see the Cash Flow Analysis chart and related footnotes presented in “Summaries of the Fifteen Largest Mortgage Loans” attached as Annex A-3 to this free writing prospectus. Also, see “Description of the Mortgage Pool—Subordinate and/or Other Financing” and “—Net Cash Flow and Certain Underwriting Considerations” and “—Other Matters” in this free writing prospectus for additional information regarding certain assumptions taken with respect to net cash flow by the mortgage loan seller with respect to the mortgage loans. In addition, with respect to certain mortgage loans, certain reserve and/or escrowed funds were included in the determination of available cash flow from the related mortgaged property. In addition, underwritten net cash flow for residential cooperative properties is not a measure of the actual cash flow generated by such property, but rather a measure of the projected net cash flow of such property, reflected in an appraisal and generally determined assuming such property is operated as a multifamily rental property with rents and other income set at prevailing market rates (but taking into account the presence of existing rent regulated or rent-controlled rental tenants), reduced by underwritten property operating expenses, a market-rate vacancy assumption and projected replacement reserves, in each case as determined by the appraiser. However, the projected net cash flow used in such determinations may differ materially from the scheduled monthly maintenance payments from the tenant-stockholders upon which residential cooperatives depend. See the footnotes to Annex A-1 to this free writing prospectus and “Certain Characteristics of Mortgage Loans Secured by Residential Cooperatives” in Annex B to this free writing prospectus. No guaranty can be given with respect to the accuracy of the information provided by any borrowers, or the adequacy of the procedures used by a mortgage loan seller in determining the relevant operating information.
The amounts representing net operating income, underwritten net operating income and underwritten net cash flow are not a substitute for or an improvement upon net income, as determined in accordance with generally accepted accounting principles, as a measure of the results of the mortgaged property’s operations or a substitute for cash flows from operating activities, as determined in accordance with generally accepted accounting principles, as a measure of liquidity. No representation is made as to the future cash flow of the mortgaged properties, nor are the net operating income, underwritten net operating income and underwritten net cash flow set forth in this free writing prospectus intended to represent actual future cash flow.
In addition, the debt service coverage ratios set forth in this free writing prospectus for the mortgage loans and the mortgaged properties vary, and may vary substantially, from the debt service coverage ratios for the mortgage loans and the mortgaged properties as calculated pursuant to the definition of such ratios as set forth in the related mortgage loan documents or the formulas or calculation used by the mortgage loan sellers for their own internal underwriting.
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The Prospective Performance of the Commercial and Multifamily Mortgage Loans Included in the Trust Fund Should Be Evaluated Separately from the Performance of the Mortgage Loans in Any of the Depositor’s Other Trusts
While there may be certain common factors affecting the performance and value of income-producing real properties in general, those factors do not apply equally to all income-producing real properties and, in many cases, there are unique factors that will affect the performance and/or value of a particular income-producing real property. Moreover, the effect of a given factor on a particular real property will depend on a number of variables, including but not limited to property type, geographic location, competition, sponsorship and other characteristics of the property and the related mortgage loan. Each income-producing real property represents a separate and distinct business venture; and, as a result, each of the multifamily and commercial mortgage loans included in one of the depositor’s trusts requires a unique underwriting analysis. Furthermore, economic and other conditions affecting real properties, whether worldwide, national, regional or local, vary over time. The performance of a pool of mortgage loans originated and outstanding under a given set of economic conditions may vary significantly from the performance of an otherwise comparable mortgage pool originated and outstanding under a different set of economic conditions. Accordingly, investors should evaluate the mortgage loans underlying the offered certificates independently from the performance of mortgage loans underlying any other series of certificates.
As a result of the distinct nature of each pool of commercial mortgage loans, and the separate mortgage loans within the pool, this free writing prospectus does not include disclosure concerning the delinquency and loss experience of static pools of periodic originations by the sponsors of assets of the type to be securitized (known as “static pool information”). Because of the highly heterogeneous nature of the assets in commercial mortgage-backed securities transactions, static pool information for prior securitized pools, even those involving the same asset types (e.g., hotels or office buildings), may be misleading, since the economics of the properties and terms of the loans may be materially different. In particular, static pool information showing a low level of delinquencies and defaults would not be indicative of the performance of this pool or any other pools of mortgage loans originated by the same sponsor or sponsors. Therefore, investors should evaluate this offering on the basis of the information set forth in this free writing prospectus with respect to the mortgage loans, and not on the basis of any successful performance of other pools of securitized commercial mortgage loans.
No Party is Obligated to Review the Mortgage Loans To Determine Whether Representations and Warranties Are True; Mortgage Loan Sellers or Other Responsible Parties May Not Be Able To Make a Required Repurchase or Substitution of a Defective Mortgage Loan
No party to the pooling and servicing agreement is under any duty or obligation to review the mortgage loans to determine whether the representations and warranties made by the related mortgage loan seller are true. Accordingly, any breach of a representation or warranty that exists as of the closing date may not be discovered, if at all, for an extended period of time following the closing date.
Furthermore, in connection with the mortgage loans sold by each mortgage loan seller to us for deposit into the trust fund, that mortgage loan seller is the sole person or entity (or, in the case of mortgage loans sold by Walker & Dunlop Commercial Property Funding I WF, LLC, that mortgage loan seller and Walker & Dunlop Commercial Property Funding, LLC are the sole persons) with the obligation to repurchase or substitute any such mortgage loan in connection with either a material breach of such mortgage loan seller’s
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representations and warranties or a material document defect. No other person or entity is obligated to perform such obligation to repurchase or substitute if that mortgage loan seller (or in the case of mortgage loans sold by Walker & Dunlop Commercial Property Funding I WF, LLC, that mortgage loan seller and Walker & Dunlop Commercial Property Funding, LLC) defaults on its obligation to do so. If any mortgage loan seller fails to fulfill such obligation, you could experience cash flow disruptions or losses on your certificates. See “Transaction Parties—The Sponsors, Mortgage Loan Sellers and Originators—Walker & Dunlop Commercial Property Funding I WF, LLC” in this free writing prospectus.
Each mortgage loan seller has (or, in the case of mortgage loans sold by Walker & Dunlop Commercial Property Funding I WF, LLC, that mortgage loan seller and Walker & Dunlop Commercial Property Funding, LLC have) only limited assets with which to fulfill any obligations on its part that may arise as a result of a material document defect or a material breach of any of the mortgage loan seller’s representations or warranties. We cannot assure you that a mortgage loan seller has or will have (or, in the case of mortgage loans sold by Walker & Dunlop Commercial Property Funding I WF, LLC, that mortgage loan seller and Walker & Dunlop Commercial Property Funding, LLC have or will have) sufficient assets with which to fulfill any obligations on its part that may arise, or that any such entity will maintain its existence. In addition, the mortgage loan sellers (or, in the case of mortgage loans sold by Walker & Dunlop Commercial Property Funding I WF, LLC, that mortgage loan seller and Walker & Dunlop Commercial Property Funding, LLC) may have various legal defenses available to them in connection with a repurchase or substitution obligation. See “Description of the Mortgage Pool—Cures, Repurchases and Substitutions” and “Transaction Parties—The Sponsors, Mortgage Loan Sellers and Originators” in this free writing prospectus.
Any Loss of Value Payment Made by a Mortgage Loan Seller May Prove to Be Insufficient to Cover All Losses on a Defective Mortgage Loan
In lieu of repurchasing or substituting a mortgage loan in connection with either a material breach of the mortgage loan seller’s representations and warranties or any material document defects (other than a material breach that is related to a mortgage loan not being a “qualified mortgage” within the meaning of Code Section 860G(a)(3)), the related mortgage loan seller (or, in the case of mortgage loans sold by Walker & Dunlop Commercial Property Funding I WF, LLC, that mortgage loan seller and Walker & Dunlop Commercial Property Funding, LLC) may make a payment to the trust to compensate it for the loss of value of the related mortgage loan. Upon its making such payment, the mortgage loan seller will be deemed to have cured the related material breach or material defect in all respects. Although such “loss of value payment” may only be made to the extent that the applicable special servicer and, during any subordinate control period or collective consultation period (other than with respect to any excluded loan), the subordinate class representative, deems such amount to be sufficient to compensate the trust fund for the related material breach or material document defect, we cannot assure you that such payment will fully compensate the trust fund for such material breach or material document defect in all respects. See “Description of the Mortgage Pool—Cures, Repurchases and Substitutions” in this free writing prospectus.
The Operation of a Mortgaged Property Following Foreclosure May Affect the Tax Status of the Trust Fund and May Adversely Affect Distributions on Your Certificates
If the trust fund acquires a mortgaged property as a result of a foreclosure or deed-in-lieu of foreclosure, a special servicer will generally retain an independent contractor
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to operate the property. Generally, the trust fund will be able to perform construction work through the independent contractor on any mortgaged property, other than repair and maintenance, only if such construction was more than 10% completed at the time a default on the related mortgage loan became imminent. In addition, (i) any net income from operations other than qualifying “rents from real property” within the meaning of Section 856(d) of the Code, (ii) any rental income based on the net profits of a tenant or sub-tenant or allocable to a non-customary service or (iii) rental income attributable to personal property leased in connection with a lease of real property if the rent attributable to personal property exceeds 15% of the total rent for the taxable year, will subject the trust fund to a federal tax on such income at the highest marginal corporate tax rate, which is currently 35%, and, in addition, possible state or local tax. In some circumstances, it is possible that the trust fund may receive income after a foreclosure that constitutes income from a “prohibited transaction”, and is subject to a 100% tax. In this event, the net proceeds available for distribution on your certificates may be reduced. A special servicer may permit the trust fund to earn such above described “net income from foreclosure property” or income from “prohibited transactions” but only if it determines that the net after-tax benefit to certificateholders is greater than under another method of operating or leasing the mortgaged property. See “Risk Factors—Foreclosure on Mortgaged Properties May Result in Adverse Tax Consequences” in the accompanying prospectus.
The REMIC provisions of the Code restrict a REMIC from becoming the owner of assets securing a mortgage loan other than real property on which the REMIC held a lien and tangible personal property incidental to such real property (within the meaning of Code Section 856(e)(1)). Therefore, upon the occurrence of a mortgage loan event of default, the interests of a borrower in non-real property assets, if they do not qualify under the REMIC provisions of the Code as described above, will not be permitted to be acquired by the trust. Rather than acquiring the ownership of such assets, the trust will be required to exercise other legal remedies available to it under applicable law including sale of such assets and application of the proceeds toward the repayment of the mortgage loan. Depending on market conditions, the proceeds from the sale of such assets could be less than the proceeds that would be received if the trust would have foreclosed on such interests and sold them at a later date.
Tenant Leases May Have Provisions That Could Adversely Affect Distributions on Your Certificates
In certain jurisdictions, if tenant leases are subordinate to the liens created by the mortgage and do not contain attornment provisions which require the tenant to recognize a successor owner, following foreclosure, as landlord under the lease, the leases may terminate upon the transfer of the property to a foreclosing lender or purchaser at foreclosure. Not all leases were reviewed to ascertain the existence of these provisions. Accordingly, if a mortgaged property is located in such a jurisdiction and is leased to one or more tenants under leases that are subordinate to the mortgage and do not contain attornment provisions, such mortgaged property could experience a further decline in value if such tenants’ leases were terminated. This is particularly likely if such tenants were paying above-market rents or could not be replaced.
Some of the leases at the mortgaged properties securing the mortgage loans included in the trust may not be subordinate to the related mortgage. If a lease is not subordinate to a mortgage, the trust will not possess the right to dispossess the tenant upon foreclosure of the mortgaged property unless it has otherwise agreed with the tenant. If the lease contains provisions inconsistent with the mortgage, for example, provisions relating to application of insurance proceeds or condemnation awards, prepayment restrictions (such
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as the tenant’s exercise of a purchase option during a lock-out period), or which could affect the enforcement of the lender’s rights (such as a right of first refusal or a right of first offer to purchase the property), the provisions of the lease will take precedence over the provisions of the mortgage.
The Costs of Compliance with the Americans with Disabilities Act of 1990 and Fair Housing Laws May Adversely Affect a Borrower’s Ability To Repay Its Mortgage Loan
Under the Americans with Disabilities Act of 1990, public accommodations are required to meet certain federal requirements related to access and use by disabled persons. Borrowers may incur costs complying with the Americans with Disabilities Act. In addition, noncompliance could result in the imposition of fines by the federal government or an award of damages to private litigants. If a borrower incurs such costs or fines, the amount available to make payments on the related mortgage loan would be reduced.
In addition, under the Federal Fair Housing Act, analogous statutes in some states and regulations and guidelines issued pursuant to those laws, any and all otherwise-available units in a multifamily apartment building must be made available to any disabled person who meets the financial criteria generally applied by the landlord, including implementing alterations and accommodations in certain circumstances. The costs of this compliance may be high and the penalties for noncompliance may be severe. Thus, these fair housing statutes, regulations and guidelines present a risk of increased operating costs to the borrowers under the mortgage loans secured by multifamily apartment buildings, which may reduce (perhaps significantly) amounts available for payment on the related mortgage loan.
Loans Secured by Mortgages on a Leasehold Interest Will Subject Your Investment to a Risk of Loss Upon a Lease Default
In the case of two (2) mortgaged properties, collectively representing approximately 0.4% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date by allocated loan amount, the related borrower’s interest consists solely, or in part, of a leasehold or sub-leasehold interest under a ground lease or a tenant-in-common interest in such leasehold or sub-leasehold interest.
Leasehold mortgage loans are subject to certain risks not associated with mortgage loans secured by a lien on the fee estate of the borrower. The most significant of these risks is that if the borrower’s leasehold were to be terminated upon a lease default, the lender (such as the trust) would lose its security. Generally, each related ground lease requires the ground lessor to give the lender notice of the ground lessee/borrower’s defaults under the ground lease and an opportunity to cure them, permits the leasehold interest to be assigned to the lender or the purchaser at a foreclosure sale, in some cases only upon the consent of the ground lessor, and contains certain other protective provisions typically included in a “mortgageable” ground lease.
Certain ground lease provisions or ownership structures are not standard and may expose investors to greater risks of default and loss than the typical ownership structures and the typical provisions in more standard ground leases or ground lease estoppels. See “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans—Encumbered Interests”.
Upon the bankruptcy of a lessor or a lessee under a ground lease, the debtor entity has the right to assume or reject the lease. If a debtor ground lessor rejects the lease, the
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ground lessee has the right to treat such lease as terminated by rejection or to remain in possession of its leased premises for the rent otherwise payable under the lease for the term of the lease (including renewals). If a debtor ground lessee/borrower rejects any or all of the leases, the leasehold lender could succeed to the ground lessee/borrower’s position under the lease only if the ground lease specifically grants the lender such right. If both the ground lessor and the ground lessee/borrower are involved in bankruptcy proceedings, the trustee may be unable to enforce the bankrupt ground lessee/borrower’s pre-petition agreement to refuse to treat a ground lease rejected by a bankrupt lessor as terminated. In such circumstances, a ground lease could be terminated notwithstanding lender protection provisions contained therein or in the mortgage.
Most of the ground leases securing the mortgaged properties provide that the ground rent payable thereunder increases during the term of the lease. These increases may adversely affect the cash flow and net income of the borrower from the mortgaged property.
For a description of ground leases at mortgaged properties subject to payment-in-lieu-of-taxes programs, see “Description of the Mortgage Pool—Other Matters” in this free writing prospectus.
The grant of a mortgage lien on its fee interest by a land owner/ground lessor to secure the debt of a borrower/ground lessee may be subject to challenge as a fraudulent conveyance. Among other things, a legal challenge to the granting of the liens may focus on the benefits realized by the land owner/ground lessor from the loan. If a court concluded that the granting of the mortgage lien was an avoidable fraudulent conveyance, it might take actions detrimental to the holders of the offered certificates, including, under certain circumstances, invalidating the mortgage lien on the fee interest of the land owner/ground lessor.
See “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans—Encumbered Interests” and see also representation and warranty no. 36 in Annex C-1 to this free writing prospectus and the exceptions thereto in Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus).
The Borrower’s Form of Entity May Cause Special Risks
The terms of the mortgage loans generally, but not in all cases, require that the borrowers covenant to be single-purpose entities, although in many cases the borrowers are not required to observe all covenants and conditions that typically are required in order for them to be viewed under standard rating agency criteria as “single-purpose entities” and may have been in existence for a substantial period in advance of the origination of the related mortgage loan. Also, although a borrower may currently be a single-purpose entity, in certain cases, that borrower was not originally a single-purpose entity, but at origination of the related mortgage loan its organizational documents were amended. That borrower may also have previously owned property other than the related mortgaged property or may be a so-called “recycled” single-purpose vehicle that previously had other business activities and liabilities. If a borrower has owned property other than the related mortgaged property, engaged in a business other than the operation of the related mortgaged property or even owned and/or operated the related mortgaged property for a material period in advance of the origination of the related mortgage loan, that borrower may be subject to liabilities arising out of its activities prior to the origination of the related mortgage loan, including liabilities that may be unrelated to the related mortgaged property. Some borrowers under the mortgage loans (including each of the borrowers with respect to the residential cooperative loans included in the trust) are not special purpose entities. See also
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representation and warranty no. 33 in Annex C-1 to this free writing prospectus and the exceptions thereto in Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus). For a discussion of certain risks associated with maintenance of “single-purpose entity” status, see “Risk Factors—The Borrower’s Form of Entity May Cause Special Risks” in the accompanying prospectus.
In addition, certain of the mortgage loans may be secured by a mortgaged property owned by a Delaware statutory trust, or by a borrower that has the ability to convert to a Delaware statutory trust. In certain instances where the borrowers under the mortgage loans use a Delaware statutory trust structure in order to gain certain tax free exchange treatment for property of like kind under Section 1031 of the Internal Revenue Code, these borrowers are restricted in their ability to actively operate a property, including with respect to loan workouts, leasing and re-leasing, making material improvements and other material actions affecting the related mortgaged property. In addition, in the case of a mortgaged property that is owned by a Delaware statutory trust, certain decisions may require the consent of the holders of the beneficial interests in the Delaware statutory trust and, in such event, there is a risk that obtaining such consent will be time consuming and cause delays in the event certain actions need to be taken by or on behalf of the borrower or with respect to the mortgaged property. While the beneficial ownership interests in a Delaware statutory trust may not presently be held by multiple parties, we cannot assure you that any beneficial interests will not subsequently be sold. See “Description of the Mortgage Pool—Certain Characteristics of the Mortgage Pool—Tenancies in Common; Delaware Statutory Trusts” in this free writing prospectus.
Tenancies in Common May Hinder Recovery
Six (6) mortgage loans, representing approximately 5.3% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date, have one or more borrowers that own all or a specified portion of the related mortgaged property as tenants-in-common. See “Description of the Mortgage Pool—Certain Characteristics of the Mortgage Pool—Tenancies in Common; Delaware Statutory Trusts” in this free writing prospectus for additional information on certain of the mortgage loans.
In general, with respect to a tenant-in-common ownership structure, each tenant-in-common owns an undivided share in the property and if such tenant-in-common desires to sell its interest in the property (and is unable to find a buyer or otherwise needs to force a partition), such tenant-in-common has the ability to request that a court order a sale of the property and distribute the proceeds to each tenant-in-common proportionally. As a result, if a tenant-in-common borrower exercises such right of partition, the related mortgage loan may be subject to prepayment. In addition, the tenant-in-common structure may cause delays in the enforcement of remedies because each time a tenant-in-common borrower files for bankruptcy, the bankruptcy court stay will be reinstated. In some cases, each related tenant-in-common borrower has waived its right to partition, reducing the risk of partition. However, we cannot assure you that, if challenged, this waiver would be enforceable. In addition, in some cases, the related mortgage loan documents provide for full recourse or personal liability for losses as to the related tenant-in-common borrowers and the guarantor or for the occurrence of an event of default under such pooled loan documents if a tenant-in-common files for partition. In some cases, a related tenant-in-common borrower is a special purpose entity (in some cases bankruptcy remote), reducing the risk of bankruptcy. We cannot assure you that a bankruptcy proceeding by a single tenant-in-common borrower will not delay enforcement of this mortgage loan. Additionally, in some cases, subject to the terms of the related mortgage loan documents, a
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borrower or a tenant-in-common borrower may assign its interests to one or more tenant-in-common borrowers. Such change to, or increase in, the number of tenant-in-common borrowers increases the risks related to this ownership structure. See “—Bankruptcy Proceedings Relating to a Borrower Can Result in Dissolution of the Borrower and the Acceleration of the Related Mortgage Loan and Can Otherwise Impair Repayment of the Related Mortgage Loan” above.
Changes to REMIC Restrictions on Loan Modifications and REMIC Rules on Partial Releases May Impact an Investment in the Certificates
Ordinarily, a REMIC that modifies a mortgage jeopardizes its tax status as a REMIC and risks having a 100% penalty tax being imposed on any income from the mortgage. A REMIC may avoid such consequences, however, if the mortgage is in default, the default of such mortgage is “reasonably foreseeable” or other special circumstances apply.
The IRS has issued Revenue Procedure 2009-45, easing the tax requirements for a servicer to modify a commercial mortgage loan held in a REMIC or a grantor trust by interpreting the circumstances when default is “reasonably foreseeable” to include those where the servicer reasonably believes that there is a “significant risk of default” with respect to the mortgage loan upon maturity of the loan or at an earlier date, and that by making such modification the risk of default is substantially reduced. Accordingly, if a master servicer or a special servicer determined that a mortgage loan was at significant risk of default and permitted one or more modifications otherwise consistent with the terms of the pooling and servicing agreement, any such modification may impact the timing of payments and ultimate recovery on that mortgage loan, and likewise on one or more classes of certificates.
The IRS has also issued Revenue Procedure 2010-30, describing circumstances in which it will not challenge the treatment of mortgage loans as “qualified mortgages” on the grounds that the mortgage loan is not “principally secured by real property”, that is, has a loan-to-value ratio greater than 125% following a release of liens on some or all of the real property securing such mortgage loan. The general rule is that a mortgage loan must continue to be “principally secured by real property” following any such lien release, unless the lien release is pursuant to a defeasance permitted in the original mortgage loan documents and occurs more than two years after the startup day of the REMIC, all in accordance with the REMIC provisions. Revenue Procedure 2010-30 also allows lien releases in certain transactions in which the release is part of a “qualified pay-down transaction” even if the mortgage loan after the transaction might not otherwise be treated as principally secured by a lien on real property. Such a release and prepayment may occur despite lock-out periods that may otherwise apply. If the value of the real property securing a mortgage loan were to decline, the need to comply with the rules of Revenue Procedure 2010-30 could restrict the servicers’ actions in negotiating the terms of a workout or in allowing minor lien releases in circumstances in which, after giving effect to the release, the mortgage loan would have a loan-to-value ratio greater than 125%.
These regulations and additional guidance could affect the timing of payments and ultimate recovery on the mortgage loans, and, in turn, on one or more classes of certificates. Prospective investors should consider the possible impact on their investment of any existing REMIC restrictions as well as any potential changes to the REMIC rules.
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Other Risks
Loan Combinations May Adversely Affect Net Cash Flow to Sponsors, Which May Reduce Sponsors’ Commitment to Effective Management of the Mortgaged Properties
With respect to each loan combination, although the relatedpari passu companion loan is not an asset of the trust fund, the related borrower is still obligated to make interest and principal payments on such other loan(s). As a result, the trust fund is subject to additional risks, including:
· | the risk that the necessary maintenance of the related mortgaged property could be deferred to allow the borrower to pay the required debt service on these other obligations and that the value of the mortgaged property may fall as a result; and |
· | the risk that it may be more difficult for the borrower to refinance the mortgage loan or to sell the mortgaged property for purposes of making any balloon payment on the entire balance of the loan combination upon the maturity of the mortgage loan. |
See “Description of the Mortgage Pool—Loan Combinations” in this free writing prospectus.
Terrorist Attacks May Adversely Affect the Value of the Offered Certificates and Payments on the Underlying Mortgage Loans
Terrorist attacks may occur at any time at any location in the world, including in the United States and at or near the mortgaged properties that secure the mortgage loans. It is impossible to predict when, how, why or where terrorist attacks may occur in the United States or elsewhere or the nature or extent of the effects of any terrorist attacks on world, national, regional or local economies, securities, financial or real estate markets or spending or travel habits. Perceptions that terrorist attacks may occur or be imminent may have the same or similar effects as actual terrorist attacks, even if terrorist attacks do not materialize. Terrorist attacks or perceptions regarding terrorist attacks may adversely affect the performance of the mortgage loans or the performance or value of the offered certificates.
Foreign Conflicts May Adversely Affect the Value of the Offered Certificates and Payments on the Underlying Mortgage Loans
The United States continues to maintain a military presence in Iraq and Afghanistan. It is uncertain what effect the activities of the United States in Iraq or Afghanistan or any future conflict with any other country or group will have on domestic and world financial markets, economies, real estate markets, insurance costs or business segments. Foreign or domestic conflict of any kind could have an adverse effect on the performance of the mortgage loans or the performance or value of the offered certificates.
Additional Risks
See “Risk Factors” in the accompanying prospectus for a description of other risks and special considerations that may be applicable to your offered certificates.
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Combination or “Layering” of Multiple Risks May Significantly Increase Risk of Loss
Although the various risks discussed in this free writing prospectus and the accompanying prospectus are generally described separately, you should consider the potential effects of the interplay of multiple risk factors. Where more than one significant risk factor is present, the risk of loss to an investor in the certificates may be significantly increased.
CAPITALIZED TERMS USED IN THIS FREE WRITING PROSPECTUS
From time to time we use capitalized terms in this free writing prospectus. The capitalized terms used in this free writing prospectus are defined on the pages indicated under the caption “Index of Defined Terms” in this free writing prospectus.
DESCRIPTION OF THE MORTGAGE POOL
General
The assets of the trust fund (the “Trust Fund”) created pursuant to the Pooling and Servicing Agreement will consist of a pool (the “Mortgage Pool”) of one hundred thirty-three (133) commercial, multifamily and manufactured housing community mortgage loans (the “Mortgage Loans”) with an aggregate principal balance (the “Cut-off Date Pool Balance” and the portion thereof attributable to each Mortgage Loan, the “Cut-off Date Principal Balance”) of $1,177,025,122 as of the respective due dates for such Mortgage Loans in June 2015 (or, in the case of any Mortgage Loan that has its first due date in July 2015, the date that would have been its due date in June 2015 under the terms of that Mortgage Loan if a monthly debt service payment were scheduled to be due in that month) (the “Cut-off Date”), in each case after application of all payments due on or before such date, whether or not received. The Cut-off Date Principal Balance of each Mortgage Loan is shown on Annex A-1 to this free writing prospectus. The Cut-off Date Principal Balances of the Mortgage Loans range from $750,000 to $100,000,000 and the average of those Cut-off Date Principal Balances is $8,849,813. As used herein, the term “Mortgage Loan” with respect to any of the Loan Combinations includes the note included in the Mortgage Pool, but does not include any related companion loan. See “—Loan Combinations” below.
Each of the Mortgage Loans is an obligation of the related borrower to repay a specified sum with interest. Each of the Mortgage Loans is evidenced by one or more promissory notes and secured by, among other things, a mortgage, deed of trust or other similar security instrument that creates a mortgage lien on the fee ownership and/or leasehold interest of the related borrower or another party in one or more commercial, multifamily or manufactured housing community real properties (each, a “Mortgaged Property”). That mortgage lien is, in all cases, a first priority lien, subject only to certain permitted encumbrances.
The Mortgage Loans secured by the Mortgaged Properties identified on Annex A-1 to this free writing prospectus as Brickyard Square and Bella Luna / San Lucas are each referred to as a “Pari Passu Mortgage Loan” in this free writing prospectus. Each Pari Passu Mortgage Loan has one companion mortgage loan, referred to as a “Pari Passu Companion Loan” in this free writing prospectus. Each Pari Passu Mortgage Loan together with the related Pari Passu Companion Loan is referred to in this free writing prospectus as a “Loan Combination”. Each Pari Passu Mortgage Loan ispari passu in right of payment to the
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related Pari Passu Companion Loan, but the related Pari Passu Companion Loans are not included in the Mortgage Pool.
The Brickyard Square Loan Combination will be serviced pursuant to, and by the master servicer and special servicer designated in, the pooling and servicing agreement entered into in connection the WFCM 2015-C28 securitization (the “WFCM 2015-C28 Pooling and Servicing Agreement”) and the related intercreditor agreement.
The Bella Luna / San Lucas Loan Combination will be serviced pursuant to, and by the master servicer and special servicer designated in, the pooling and servicing agreement entered into in connection the WFCM 2015-LC20 securitization (the “WFCM 2015-LC20 Pooling and Servicing Agreement”) and the related intercreditor agreement.
Each of the Brickyard Square Mortgage Loan and the Bella Luna / San Lucas Mortgage Loan is sometimes referred to as a “Non-Serviced Pari Passu Mortgage Loan”; the related Pari Passu Companion Loan is sometimes referred to as a “Non-Serviced Pari Passu Companion Loan”; and such Non-Serviced Pari Passu Mortgage Loan and the related Non-Serviced Pari Passu Companion Loan are sometimes, collectively, referred to as a “Non-Serviced Loan Combination”.
All information relating to loan-to-value ratios, debt service coverage ratios, debt yields or loan per net rentable square foot or unit, as applicable, presented in this free writing prospectus with respect to each Pari Passu Mortgage Loan is calculated including its related Pari Passu Companion Loan, unless otherwise indicated.
Mortgage Loan History
All of the Mortgage Loans will be acquired on the Closing Date by the Depositor from the Mortgage Loan Sellers, which either originated each such Mortgage Loan or acquired it in connection with their commercial and multifamily mortgage loan conduit programs. None of the Mortgage Loans was 30 days or more delinquent as of the Cut-off Date, and no Mortgage Loan has been 30 days or more delinquent during the 12 months preceding the Cut-off Date (or since the date of origination if such Mortgage Loan has been originated within the past 12 months).
All of the Mortgage Loans were originated within the seven (7) months prior to the Cut-off Date and thus should generally be considered not to have long-standing payment histories. See Annex A-1 to this free writing prospectus for the origination date of each of the Mortgage Loans.
The Mortgage Loans included in this transaction were selected for this transaction from mortgage loans specifically originated or acquired for securitizations of this type by the Mortgage Loan Sellers.
Certain Characteristics of the Mortgage Pool
Concentration of Mortgage Loans and Borrowers
Several of the Mortgage Loans have Cut-off Date Principal Balances that are substantially higher than the average Cut-off Date Principal Balance. The largest Mortgage Loan is the Hutchinson Metro Center I Mortgage Loan, which has a Cut-off Date Principal Balance of $100,000,000 and represents approximately 8.5% of the Cut-off Date Pool Balance. The three, five and ten largest Mortgage Loans have Cut-off Date Principal Balances, collectively representing approximately 15.1%, 21.3% and 32.6%, respectively,
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of the Cut-off Date Pool Balance. Each of the fifteen largest Mortgage Loans is described in Annex A-3 to this free writing prospectus.
Multi-Property Mortgage Loans; Mortgage Loans with Affiliated Borrowers
Five (5) individual Mortgage Loans, representing approximately 9.4% of the Cut-off Date Pool Balance, are secured by two or more properties. See the footnotes to the table below. In all cases, however, the amount of the mortgage lien encumbering a particular property or group of those properties may be less than the full amount of the related Mortgage Loan, generally to minimize recording tax. In such instances, the mortgage amount may equal a specified percentage (generally ranging from 100% to 150%, inclusive) of the appraised value or allocated loan amount for the particular property or group of properties. This would limit the extent to which proceeds from that property or group of properties would be available to offset declines in value of the other mortgaged properties securing the same Mortgage Loan.
The table below shows each individual Mortgage Loan that is secured by two or more Mortgaged Properties.
Multi-Property Mortgage Loans(1)
Mortgage Loan/Property Portfolio | Multi-Property Loan | Aggregate Cut-off | % of Cut-off |
WPC Self Storage Portfolio VII | Multi-Property | $ 37,245,000 | 3.2% |
El Sol Brillante and Laguna Del Sol Apartments | Multi-Property | 28,750,000 | 2.4 |
Dulles North Corporate Parks | Multi-Property | 24,956,509 | 2.1 |
Ozinus Realty Property Portfolio | Multi-Property | 11,510,000 | 1.0 |
IRG – Ellsworth Bailey Saratoga | Multi-Property | 7,700,000 | 0.7 |
Total: | $ 110,161,509 | 9.4% |
(1) | Total may not equal the sum of amounts listed due to rounding. |
In some cases, an individual Mortgaged Property may be comprised of two or more parcels that may not be contiguous or may be owned by separate borrowers.
Some groups of Mortgage Loans are not cross-collateralized or cross-defaulted but the loans were made to borrowers related through common ownership of partnership or other equity interests and where, in general, the related Mortgaged Properties are commonly managed. The table below shows each group of two or more Mortgage Loans that are not cross-collateralized or cross-defaulted, but have the same or affiliated borrowers/owners.
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Related Borrower Loans(1)
Mortgage Loan/Property Names | Number of | Aggregate Cut-off | % of Cut-off Date |
Group A | |||
WPC Self Storage Portfolio VII | 9 | $ 37,245,000 | 3.2% |
Smiths Medical | 1 | 22,250,000 | 1.9 |
Total: | 10 | $ 59,495,000 | 5.1% |
Group B | |||
Cathedral Place | 1 | $ 39,900,000 | 3.4% |
Cathedral Place – Parking | 1 | 9,200,000 | 0.8 |
Total: | 2 | $ 49,100,000 | 4.2% |
Group C | |||
Dos Santos Apartments | 1 | $ 11,100,000 | 0.9% |
San Mateo Apartments | 1 | 9,445,000 | 0.8 |
Athens Gate Apartments | 1 | 7,520,000 | 0.6 |
Sand Pebble Apartments | 1 | 7,490,000 | 0.6 |
Sedona Peak Apartments | 1 | 2,025,000 | 0.2 |
Total: | 5 | $ 37,580,000 | 3.2% |
Group D | |||
Hunterstone Apartments | 1 | $ 19,000,000 | 1.6% |
Riverchase Apartments | 1 | 12,000,000 | 1.0 |
Total: | 2 | $ 31,000,000 | 2.6% |
Group E | |||
Marquis Place | 1 | $ 15,000,000 | 1.3% |
Silver Bridge Plaza | 1 | 3,750,000 | 0.3 |
Moundsville Plaza | 1 | 2,225,000 | 0.2 |
Total: | 3 | $ 20,975,000 | 1.8% |
Group F | |||
Dunwoody Place | 1 | $ 13,000,000 | 1.1% |
Wickham Park Commons | 1 | 1,960,000 | 0.2 |
Total: | 2 | $ 14,960,000 | 1.3% |
Group G | |||
Trojan Storage of Oxnard | 1 | $ 7,425,000 | 0.6% |
Trojan Storage of Roseville | 1 | 5,418,226 | 0.5 |
Total: | 2 | $ 12,843,226 | 1.1% |
Group H | |||
Storaway Self Storage – Nashville | 1 | $ 4,975,000 | 0.4% |
Storaway Self Storage – Deltona II | 1 | 3,000,000 | 0.3 |
Storaway Self Storage – Palm Bay | 1 | 2,725,000 | 0.2 |
Storaway Self Storage – Deltona I | 1 | 2,100,000 | 0.2 |
Total: | 4 | $ 12,800,000 | 1.1% |
Group I | |||
Green Acres MHP | 1 | $ 5,300,000 | 0.5% |
Rivertown Center | 1 | 5,000,000 | 0.4 |
Shops of Orland Park | 1 | 1,550,000 | 0.1 |
Total: | 3 | $ 11,850,000 | 1.0% |
Group J | |||
Seacoast Self Storage | 1 | $ 4,874,287 | 0.4% |
East Haven Self Storage | 1 | 3,416,086 | 0.3 |
Folcroft Self Storage | 1 | 2,800,000 | 0.2 |
Total: | 3 | $ 11,090,374 | 0.9% |
(1) | Totals may not equal the sum of amounts listed due to rounding. |
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Property Type Concentrations
This table shows the property type concentrations of the Mortgaged Properties:
Property Type Distribution(1)
Property Type | Number of | Aggregate Cut-off | Approx. |
Multifamily(2) | 53 | $ 339,058,508 | 28.8% |
Retail | 44 | 313,808,559 | 26.7 |
Office | 11 | 294,897,126 | 25.1 |
Self Storage | 20 | 79,519,010 | 6.8 |
Hospitality | 7 | 57,703,508 | 4.9 |
Industrial | 10 | 32,318,421 | 2.7 |
Mixed Use | 2 | 27,100,000 | 2.3 |
Other | 2 | 24,173,905 | 2.1 |
Manufactured Housing Community | 2 | 8,446,084 | 0.7 |
Total: | 151 | $ 1,177,025,122 | 100.0% |
(1) | Because this table presents information relating to Mortgaged Properties and not Mortgage Loans, the information for any Mortgaged Property relating to a Mortgage Loan secured by more than one Mortgaged Property is based on allocated loan amounts as set forth on Annex A-1. |
(2) | Includes twenty-eight (28) residential cooperative properties (including the residential cooperative property identified on Annex A-1 to this free writing prospectus as Baywoods of Annapolis, representing approximately 1.4% of the Cut-off Date Pool Balance, which is operated, in part, as a residential cooperative property and, in part, as a residential healthcare facility), representing 7.0% of the Cut-off Date Pool Balance by allocated loan amount. |
With respect to the properties set forth in the above chart, we note in particular the following:
· | Twenty-five (25) of the Mortgaged Properties, collectively representing approximately 21.5% of the Cut-off Date Pool Balance in the aggregate by allocated loan amount, are retail properties with one or more anchor or shadow anchor tenants. See “Risk Factors—Risks Related to the Mortgage Loans—Retail Properties Have Special Risks” in this free writing prospectus. See “Certain Characteristics of the Mortgage Loans and Mortgaged Properties” attached as Annex A-1 to this free writing prospectus. |
· | Ten (10) of the Mortgaged Properties, identified on Annex A-1 to this free writing prospectus as Hutchinson Metro Center I, Dulles North Corporate Parks – Dulles North Corporate Park 2, Foothills Park Place, Norfolk Commerce Park, Ozinus Realty Property Portfolio – Towne Crest Village, Brickyard Square, Fahrens Park Plaza, Silver Bridge Plaza, De La Cruz Professional Center and Victorville Retail Center, collectively representing approximately 15.4% of the Cut-off Date Pool Balance in the aggregate by allocated loan amount, each have government-sponsored tenants among their five (5) largest tenants. See “Risk Factors—Renewal, Termination and Expiration of Leases and Reletting Entails Risks That May Adversely Affect Your Investment” in this free writing prospectus. |
· | Twenty-three (23) of the Mortgaged Properties, identified on Annex A-1 to this free writing prospectus as Queens’ MarketPlace, Foothills Park Place, Maricopa Fiesta, Dunwoody Place, Shops at Doral, Ozinus Realty Property Portfolio – Eagle Plaza, Oak |
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Tree Plaza, Austin Heights Shopping Center, Rivertown Center, Cooperstown Commons Shopping Center, Lake Lucina Shopping Center, Sycamore Terrace, Ramona Plaza Shopping Center, Lakewood Place Shopping Center, Shackelford Center, De La Cruz Professional Center, West Friendship Shopping Center, Wickham Park Commons, Crown Pointe Plaza, Kingstowne Shops, Shops of Orland Park, Big Lots Plaza and Hanna Shoppes, collectively representing approximately 12.8% of the Cut-off Date Pool Balance in the aggregate by allocated loan amount, have a restaurant among the five (5) largest tenants (by net rentable area leased) at the Mortgaged Property or, in the case of a hospitality property, have a restaurant on the property. Restaurants and bakeries present unique risks, see “Risk Factors—Risks Related to the Mortgage Loans—Converting Commercial Properties to Alternative Uses May Require Significant Expenses Which Could Reduce Distributions on Your Certificates; and Limited Adaptability for Other Uses May Substantially Lower the Liquidation Value of a Mortgaged Property” in this free writing prospectus. |
· | Five (5) of the Mortgaged Properties, identified on Annex A-1 to this free writing prospectus as Hutchinson Metro Center I, Norfolk Commerce Park, Riverside Technology Park A & B, Gilbert Crossing and Wickham Park Commons, collectively representing approximately 12.0% of the Cut-off Date Pool Balance in the aggregate by allocated loan amount, include educational facilities as part of the collateral. Educational facilities present unique risks. See “Risk Factors—Risks Related to the Mortgage Loans—Retail Properties Have Special Risks”, “—Office Properties Have Special Risks” and “—Converting Commercial Properties to Alternative Uses May Require Significant Expenses Which Could Reduce Distributions on Your Certificates; and Limited Adaptability for Other Uses May Substantially Lower the Liquidation Value of a Mortgaged Property” in this free writing prospectus. |
· | Six (6) of the Mortgaged Properties, identified on Annex A-1 to this free writing prospectus as Cathedral Place, Riverside Technology Park A & B, Shops at Doral, Gilbert Crossing, Cooperstown Commons Shopping Center and Crown Pointe Plaza, collectively securing approximately 6.8% of the Cut-off Date Pool Balance in the aggregate by allocated loan amount, each have a bank branch among the five (5) largest tenants at the related Mortgaged Property. See “Risk Factors— Risks Related to the Mortgage Loans—Retail Properties Have Special Risks—Retail Bank Branches Have Special Risks”, “Risk Factors— Risks Related to the Mortgage Loans—Mixed Use Facilities Have Special Risks” and “Risk Factors—Risks Related to the Mortgage Loans —Converting Commercial Properties to Alternative Uses May Require Significant Expenses Which Could Reduce Distributions on Your Certificates; and Limited Adaptability for Other Uses May Substantially Lower the Liquidation Value of a Mortgaged Property”“ in this free writing prospectus. |
· | Eleven (11) of the Mortgaged Properties, identified on Annex A-1 to this free writing prospectus as Maricopa Fiesta, Ozinus Realty Property Portfolio – Towne Crest Village, Nexus Town Center, Fahrens Park Plaza, Causeway Corporate Centre, Oak Tree Plaza, Lakeside Plaza, Cooperstown Commons Shopping Center, Sycamore Terrace, West Friendship Shopping Center and Market Place Village, collectively representing approximately 5.6% of the Cut-off Date Pool Balance in the aggregate by allocated loan amount, are each comprised of, or include among their five (5) largest tenants (by net rentable area leased), tenants operating as medical offices, veterinary offices, clinics, urgent care facilities or dental offices. Medical offices and urgent care facilities present unique risks. See “Risk Factors—Risks Related to the Mortgage Loans—Office Properties Have Special Risks” in this free writing prospectus. |
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· | Ten (10) of the Mortgaged Properties, identified on Annex A-1 to this free writing prospectus as Dunwoody Place, Ozinus Realty Property Portfolio – Eagle Plaza, Ozinus Realty Property Portfolio – Texas Star, Ozinus Realty Property Portfolio – Hamlin, Nexus Town Center, Fahrens Park Plaza, Gilbert Crossing, Lakeside Plaza, Rivertown Center and De La Cruz Professional Center, collectively representing approximately 4.7% of the Cut-off Date Pool Balance in the aggregate by allocated loan amount, have a gym, indoor trampoline park, martial arts center, physical therapy center, health club, fitness center or athletic related facility among the five (5) largest tenants (by net rentable area leased) at the related Mortgaged Property. Gyms, indoor trampoline parks, martial arts centers, physical therapy centers, health clubs, fitness centers and athletic related facilities present unique risks. See “Risk Factors—Risks Related to the Mortgage Loans—Converting Commercial Properties to Alternative Uses May Require Significant Expenses Which Could Reduce Distributions on Your Certificates; and Limited Adaptability for Other Uses May Substantially Lower the Liquidation Value of a Mortgaged Property” in this free writing prospectus. |
· | Six (6) of the Mortgaged Properties, identified on Annex A-1 to this free writing prospectus as Foothills Park Place, Ozinus Realty Property Portfolio – Texas Star, Ozinus Realty Property Portfolio – Palmetto, Ozinus Realty Property Portfolio – Hamlin, Austin Heights Shopping Center and West Friendship Shopping Center, collectively representing approximately 3.0% of the Cut-off Date Pool Balance in the aggregate by allocated loan amount, has an on-site gas filling station or automotive service center. See “Risk Factors—Risks Related to the Mortgage Loans—Retail Properties Have Special Risks” and “Risk Factors—Risks Related to the Mortgage Loans—Environmental Conditions at the Mortgaged Properties May Subject the Trust Fund to Liability Under Federal and State Laws, Reducing the Value and Cash Flow of the Mortgaged Properties, Which May Result in Reduced Distributions on Your Offered Certificates” in this free writing prospectus. |
· | Four (4) of the Mortgaged Properties, identified on Annex A-1 to this free writing prospectus as Dunwoody Place, Nexus Town Center, Gilbert Crossing and Shops of Orland Park, collectively representing approximately 2.6%, of the Cut-off Date Pool Balance in the aggregate by allocated loan amount, have a dry cleaners with an on-site processing operation. See “Risk Factors—Risks Related to the Mortgage Loans—Environmental Conditions at the Mortgaged Properties May Subject the Trust Fund to Liability Under Federal and State Laws, Reducing the Value and Cash Flow of the Mortgaged Properties, Which May Result in Reduced Distributions on Your Offered Certificates” in this free writing prospectus. |
· | One (1) of the Mortgaged Properties, identified on Annex A-1 to this free writing prospectus as Dulles North Corporate Park 5, securing approximately 1.3% of the Cut-off Date Pool Balance by allocated loan amount, includes a data center as part of the collateral. See “Risk Factors—Data Center Properties Have Special Risks” and “Risk Factors—Risks Related to the Mortgage Loans—Converting Commercial Properties to Alternative Uses May Require Significant Expenses Which Could Reduce Distributions on Your Certificates; and Limited Adaptability for Other Uses May Substantially Lower the Liquidation Value of a Mortgaged Property” in this free writing prospectus. |
· | One (1) of the Mortgaged Properties, identified on Annex A-1 to this free writing prospectus as Brickyard Square, securing approximately 1.0% of the Cut-off Date Pool Balance by allocated loan amount, has a movie theater and/or a bowling alley tenant among the five (5) largest tenants (by net rentable area leased) at the related Mortgaged Property. Movie theaters and bowling alleys present unique risks. |
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See “Risk Factors—Risks Related to the Mortgage Loans—Converting Commercial Properties to Alternative Uses May Require Significant Expenses Which Could Reduce Distributions on Your Certificates; and Limited Adaptability for Other Uses May Substantially Lower the Liquidation Value of a Mortgaged Property” in this free writing prospectus. |
· | One (1) of the Mortgaged Properties, identified on Annex A-1 to this free writing prospectus as Cathedral Place – Parking, securing approximately 0.8% of the Cut-off Date Pool Balance by allocated loan amount, has a parking garage as the collateral. See “Risk Factors—Converting Commercial Properties to Alternative Uses May Require Significant Expenses Which Could Reduce Distributions on Your Certificates; and Limited Adaptability for Other Uses May Substantially Lower the Liquidation Value of a Mortgaged Property” in this free writing prospectus. |
· | With respect to the residential cooperative properties included in the trust, information regarding the five (5) largest tenants has not been reflected on Annex A-1 to this free writing prospectus or in the preceding bullets. Notwithstanding the exclusion of the residential cooperative properties from the statistics presented in the preceding bullets, certain residential cooperative properties are heavily dependent on income from commercial tenancies and may, in certain instances, have space that is devoted to specialty uses. These uses may include, without limitation, dental or medical offices or clinics, data centers, restaurants, and/or parking garages. The specialty use spaces may not be readily convertible (or convertible at all) to alternative uses if those uses were to become unprofitable, or the spaces were to become vacant, for any reason. See “Risk Factors—Risks Related to the Mortgage Loans—Residential Cooperative Properties Have Special Risks” in this free writing prospectus. |
With respect to the hospitality properties set forth in the above chart, we note in particular the following:
· | All hospitality properties included in the Mortgage Pool are subject to a franchise agreement, license agreement or hotel management agreement. With respect to six (6) of those properties, which are identified on Annex A-1 to this free writing prospectus as Rock Hill Hampton Inn, Homewood Suites – Tallahassee, Courtyard by Marriott – Shawnee, Best Western Plus – Windsor Gardens, Staybridge Suites Indianapolis Airport and Comfort Suites – Near the Galleria, collectively representing approximately 4.2% of the Cut-off Date Pool Balance in the aggregate by allocated loan amount, the applicable franchise agreement or management agreement (including any extension options) either expires, or is unilaterally terminable by the franchisor without cause, during the term, or within twelve (12) months after the end of the term, of the related Mortgage Loan. See “Risk Factors—Risks Related to the Mortgage Loans—Hospitality Properties Have Special Risks” in this free writing prospectus. |
With respect to the multifamily and manufactured housing community properties set forth in the above chart, we note in particular the following:
· | With respect to the Mortgage Loans secured by the Mortgaged Properties identified on Annex A-1 to this free writing prospectus as Coastal Village Apartments and Indiana Village, collectively representing approximately 2.8% of the Cut-Off Date Pool Balance, each such Mortgaged Property is 20% or more occupied by student tenants. See “Risk Factors—Risks Related to the Mortgage Loans—Multifamily Properties Have Special Risks” in this free writing prospectus. |
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· | With respect to the Mortgage Loans secured by the Mortgaged Properties identified on Annex A-1 to this free writing prospectus as Baywoods of Annapolis and Villa Bella, collectively representing approximately 2.3% of the Cut-off Date Pool Balance, each such Mortgaged Properties is operated, in whole or in part, as an independent living facility or retirement community. See “Risk Factors—Risks Related to Mortgage Loans and Mortgaged Properties—Multifamily Properties Have Special Risks” and “—Risks Related to Mortgage Loans and Mortgaged Properties—Residential Cooperative Properties Have Special Risks” in this free writing prospectus and “Risk Factors—Special Risks Associated with Residential Healthcare Facilities” and “—Special Risks of Mortgage Loans Secured by Healthcare-Related Properties” in the accompanying prospectus. |
· | With respect to the multifamily properties identified on Annex A-1 to this free writing prospectus as Jackson Square Apartments and Brittany Bay II, collectively representing approximately 1.9% of the Cut-off Date Pool Balance in the aggregate by allocated loan amount, each such Mortgaged Property has some or all of its rents subsidized under the Section 8 tenant-based assistance program of the U.S. Department of Housing and Urban Development. We cannot assure you that such program will be continued in its present form or that the level of assistance provided will be sufficient to generate enough revenues for the related borrower to meet its obligations under the related Mortgage Loan. See “Risk Factors—Risks Related to the Mortgage Loans—Multifamily Properties Have Special Risks” and “—Various Limitations and Restrictions Imposed by Affordable Housing Covenants or Programs May Result in Losses on the Mortgage Loans” in this free writing prospectus and see “Risk Factors—Multifamily Properties Have Special Risks” and “—Mortgaged Properties That Are Not in Compliance with Zoning and Building Code Requirements and Use Restrictions Could Adversely Affect Distributions on Your Certificates” in the accompanying prospectus. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Brittany Bay II, securing approximately 0.8% of the Cut-off Date Pool Balance, the Mortgaged Property is subject to a land use restriction agreement in favor of the Florida Housing Finance Corporation made in connection with the allocation of federal low-income housing tax credits under Internal Revenue Code of 1986 Section 42. The agreement generally requires that (i) at least 85.0% of the units be reserved for tenants earning no more than 60.0% of the area median income and (ii) at least 15.0% of the units be reserved for tenants earning no more than 25.0% of the area median income, subject to rental restrictions in accordance with the terms of the agreement. Such agreement is scheduled to terminate in 2053. The regulatory agreement requires that an annual report be submitted to the Florida Housing Finance Corporation, whose remedies for noncompliance include specific performance and injunctive relief. |
· | In addition, certain of the residential cooperative properties are subject to government rent control regulations which limit the rental payments payable by subtenants of unit owners and which would be applicable to the Mortgaged Property in whole or in part if the same were operated as a multifamily rental property. See “Risk Factors—Risks Related to the Mortgage Loans—Residential Cooperative Properties Have Special Risks” in this free writing prospectus. |
Tenancies in Common; Delaware Statutory Trusts
Six (6) Mortgage Loans, secured by the Mortgaged Properties identified on Annex A-1 to this free writing prospectus as El Sol Brillante and Laguna Del Sol Apartments, Maricopa
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Fiesta, CVS – Lynn, MA, Green Acres MHP, Bella Luna / San Lucas and De La Cruz Professional Center, collectively representing approximately 5.3% of the Cut-off Date Pool Balance, have two or more borrowers that own the related Mortgaged Property as tenants-in-common (and the respective tenants-in-common have agreed to a waiver of their rights of partition). See “Risk Factors—Risks Related to the Mortgage Loans—Tenancies in Common May Hinder Recovery” in this free writing prospectus.
With respect to two (2) Mortgage Loans secured by the Mortgaged Properties identified on Annex A-1 to this free writing prospectus as Norfolk Commerce Park and Austin Heights Shopping Center, collectively representing approximately 2.0% of the Cut-off Date Pool Balance, the related borrower is organized as a Delaware statutory trust. See “Risk Factors—Risks Related to the Mortgage Loans—The Borrower’s Form of Entity May Cause Special Risks” in this free writing prospectus. See also “—Other Matters” in this free writing prospectus.
Condominium Structures
Five (5) Mortgage Loans secured by the Mortgaged Properties identified on Annex A-1 to this free writing prospectus as Cathedral Place, Brickyard Square, Cathedral Place – Parking, 1321 Harbor Bay Parkway and 30 Bond Street Owners Corp., collectively representing approximately 5.8% of the Cut-off Date Pool Balance, are each secured in whole or in part by the related borrower’s interest in one or more units in a condominium. With respect to such Mortgage Loans, we note in particular the following:
· | With respect to the Mortgage Loans secured by the Mortgaged Properties identified on Annex A-1 to this free writing prospectus as Cathedral Place and Cathedral Place – Parking, collectively representing approximately 4.2% of the Cut-off Date Pool Balance, the related Mortgaged Properties are part of a condominium regime. Cathedral Place consists of two of the four condominium units as well as the related borrower’s 41.53% interest in the common elements, while Cathedral Place – Parking consist of one of the four condominium units as well as the related borrower’s 48.00% interest in the common elements. The Cathedral Place borrower controls two of the four seats on the condominium board of directors and the Cathedral Place – Parking borrower controls one of the four seats on the condominium board of directors. Neither related borrower controls the related condominium, but each has blocking rights to amendments of the condominium’s declaration and by-laws. The loan agreements provide for loss recourse to each related borrower and the related guarantor in the event that the related borrower materially amends or terminates the condominium documents without the lender’s prior consent. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Brickyard Square, representing approximately 1.0% of the Cut-off Date Pool Balance, the Mortgaged Property consists of 1 unit in a 2-unit commercial condominium regime. The borrower holds 70% interest in the condominium regime and, as such, controls the condominium association. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as 1321 Harbor Bay Parkway, representing approximately 0.6% of the Cut-off Date Pool Balance, the Mortgaged Property consists of one unit in a land condominium. The borrower has a 10.5% voting-rights interest in the related owners’ association. Each unit owner has responsibility for maintenance and repairs of its own building and exclusive use easement areas. The |
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association’s duties are limited to landscaping, maintenance of private roads and the like. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as 30 Bond Street Owners Corp., representing approximately 0.1% of the Cut-off Date Pool Balance, the related Mortgaged Property consists of one (1) condominium unit in an apartment building that is comprised of two (2) condominium units. The residential condominium unit, which comprises the Mortgaged Property, consists of residential apartment units. The commercial condominium unit, which is owned separately and is not a part the Mortgaged Property, may be used for any legal use permitted by the related certificate of occupancy. Each condominium unit is taxed separately. The condominium board is comprised of five (5) board members, four (4) of which are elected by the borrower and one (1) by the owner of the commercial unit. Subject to limited exceptions, the vote of a majority of board members is necessary for the transaction of business and, accordingly, the borrower will generally have effective control over issues presented to the condominium board. |
Even if the borrower or its designated board members, either through control of the appointment and voting of sufficient members of the condominium board or by virtue of other provisions in the condominium documents, has consent rights over actions by the condominium associations or owners, we cannot assure you that the condominium board will not take actions that would materially adversely affect the borrower’s unit. See “Risk Factors—Risks Related to the Mortgage Loans—Converting Commercial Properties to Alternative Uses May Require Significant Expenses Which Could Reduce Distributions on Your Certificates; and Limited Adaptability for Other Uses May Substantially Lower the Liquidation Value of a Mortgaged Property” in this free writing prospectus. See also “Risk Factors—Restrictions on Certain of the Mortgaged Properties May Limit Their Use” in the accompanying prospectus. See also representation and warranty no. 8 in Annex C-1 and the exceptions thereto in Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus).
Residential Cooperatives
Twenty-eight (28) of the Mortgage Loans (including the residential cooperative property identified on Annex A-1 to this free writing prospectus as Baywoods of Annapolis, representing approximately 1.4% of the Cut-off Date Pool Balance, which is operated, in part, as a residential cooperative property and, in part, as a residential healthcare facility), collectively representing approximately 7.0% of the Cut-off Date Pool Balance, are secured by Mortgaged Properties structured as residential cooperatives. See “Risk Factors—Risks Related to the Mortgage Loans—Residential Cooperative Properties Have Special Risks” in this free writing prospectus.
Certain Terms of the Mortgage Loans
Due Dates. Subject, in some cases, to a next business day convention, all of the Mortgage Loans provide for scheduled payments of principal and/or interest to be due on or prior to the eleventh day of each month (each such date, a “Due Date”). The Mortgage Loans have various grace periods (which in certain cases may not end until a specified number of days after a notice of default has been provided to the related borrower) for purposes of late charges and events of default. As used in this free writing prospectus, “grace period” is the number of days before a payment default is an event of default under such Mortgage Loan. See Annex A-1, including the footnotes thereto, for information on the
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number of days before late payment charges are due under the Mortgage Loans. The information on Annex A-1 regarding the number of days before late payment charges are due under a Mortgage Loan is based on the express terms of that Mortgage Loan. However, some jurisdictions may impose a statutorily longer period. Based solely on the express terms of the related Mortgage Loan documents, in no case is the grace period for purposes of events of default more than ten (10) days after the Due Date and, with respect to balloon payments, in no event is the Due Date plus the longer of the grace period for late charges or the grace period for events of default later than the end of the collection period in the relevant month. We make no representation regarding the effect of grace periods on a borrower’s incentive to timely make its scheduled payments of principal and/or interest.
Mortgage Rates; Calculations of Interest. Each Mortgage Loan accrues interest at the annual rate specified with respect to that Mortgage Loan on Annex A-1 to this free writing prospectus. The mortgage interest rate for each Mortgage Loan is fixed for the remaining term of the loan, except for (i) increases resulting from the application of default interest rate following a default, (ii) in the case of any ARD Loan, any increase described below that may occur if the mortgage loan is not repaid on or before the related Anticipated Repayment Date and (iii) changes that result from any other loan-specific provisions that are described in the footnotes to Annex A-1 in this free writing prospectus.
All of the Mortgage Loans accrue interest based on the actual number of days elapsed during each one-month accrual period in a year assumed to consist of 360 days (“Actual/360 Basis”).
Amortization Characteristics. The Mortgage Loans have the following amortization characteristics:
· | Interest-only, Amortizing Balloon: Fifty (50) Mortgage Loans, representing approximately 53.1% of the Cut-off Date Pool Balance, provide for an initial interest-only period that expires between twelve (12) and sixty (60) months following the related origination date and thereafter require monthly payments of principal and interest based on amortization schedules significantly longer than the remaining term to stated maturity; |
· | Amortizing Balloon: Sixty-seven (67) Mortgage Loans, representing approximately 33.6% of the Cut-off Date Pool Balance, require monthly payments of interest and principal based on amortization schedules significantly longer than the remaining term to stated maturity; |
· | Interest-only, Balloon: Fourteen (14) Mortgage Loans, representing approximately 12.7% of the Cut-off Date Pool Balance, provide for interest-only payments for the entire term to stated maturity, with no scheduled amortization prior to that date; and |
· | Amortizing ARD: Two (2) Mortgage Loans, representing approximately 0.6% of the Cut-off Date Pool Balance, require monthly payments of interest and principal until a specified Anticipated Repayment Date. |
In all cases, the repayment of the Mortgage Loan in full on its stated maturity date or Anticipated Repayment Date would require a substantial payment of principal on that date, except to the extent that the Mortgage Loan is prepaid prior thereto.
Two (2) Mortgage Loans, representing approximately 0.6% of the Cut-off Date Pool Balance, provide that, after a certain date (the “Anticipated Repayment Date”), if the
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borrower has not prepaid such ARD Loan in full, any principal outstanding from time to time on or after that date will accrue interest at an increased interest rate (the “Revised Rate”) rather than the stated mortgage loan rate (the “Initial Rate”). See “—ARD Loans” below.
Information regarding the scheduled amortization characteristics of each Mortgage Loan is set forth on Annex A-1 to this free writing prospectus and the footnotes thereto. See also “Summaries of the Fifteen Largest Mortgage Loans” in Annex A-3 to this free writing prospectus.
Some of the Mortgage Loans provide for a recast of the amortization schedule and an adjustment of the monthly debt service payments on the Mortgage Loan upon application of specified amounts of condemnation proceeds or insurance proceeds to pay the related unpaid principal balance or upon application of specified earnout escrow or holdback amounts if certain property performance criteria are not satisfied. Some of the individual Mortgage Loans that are secured by multiple Mortgaged Properties or parcels and permit partial prepayments of the individual or aggregate indebtedness in connection with releases of individual properties or parcels also provide for a recast of the amortization and an adjustment of the monthly debt service payments on the Mortgage Loan(s) upon any such prepayment and release.
With respect to some of the Mortgage Loans, notwithstanding that they provide for the accrual of interest on an Actual/360 Basis, the amount of the fixed periodic payments was determined as if interest accrues based on a 360-day year consisting of twelve 30-day months (a “30/360 Basis”), which will result in a larger payment due at maturity than would otherwise have been the case.
Voluntary Prepayment and Defeasance Provisions
General
As of origination, the following prepayment restrictions and defeasance provisions applied to the Mortgage Loans:
· | Ninety-four (94) of the Mortgage Loans, representing approximately 83.0% of the Cut-off Date Pool Balance, each prohibit voluntary principal prepayments during a specified period of time (each, a “Lock-out Period”) but permit the related borrower (after an initial period of at least two years following the date of initial issuance of the Certificates) for a specified period to defease the related Mortgage Loan by pledging non-callable United States Treasury obligations and other non-callable government securities within the meaning of Section 2(a)(16) of the Investment Company Act, as amended (“Government Securities”) that provide for payment on or prior to each Due Date through and including the maturity date or Anticipated Repayment Date, as applicable (or, in some cases, such earlier Due Date on which the Mortgage Loan becomes freely prepayable), of amounts at least equal to the amounts that would have been payable on those dates under the terms of the subject Mortgage Loan and obtaining the release of the related Mortgaged Property from the lien of the related mortgage, and thereafter such Mortgage Loan is freely prepayable. |
· | With respect to the Mortgage Loans secured by the Mortgaged Properties identified on Annex A-1 to this free writing prospectus as Cathedral Place and Cathedral Place – Parking, collectively representing approximately 4.2% of the Cut-off Date Pool Balance, each related borrower is only permitted to defease the related Mortgage Loan if both Mortgage Loans are defeased simultaneously. |
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· | Ten (10) of the Mortgage Loans, representing approximately 10.6% of the Cut-off Date Pool Balance, each prohibit voluntary principal prepayments during a Lock-out Period, and following such Lock-out Period, for a specified period of time, permit the related borrower to make voluntary principal prepayments upon the payment of the greater of a Yield Maintenance Charge or Prepayment Premium, and thereafter such Mortgage Loan is freely prepayable. |
· | Twenty-seven (27) of the Mortgage Loans, representing approximately 5.6% of the Cut-off Date Pool Balance, each permit voluntary principal prepayments upon the payment of the greater of a Yield Maintenance Charge or a Prepayment Premium for a period and thereafter permit prepayment upon the payment of a Prepayment Premium and thereafter such Mortgage Loan is freely prepayable. |
· | One (1) of the Mortgage Loans, representing approximately 0.6% of the Cut-off Date Pool Balance, prohibits voluntary principal prepayments during a Lock-Out Period, then, after an initial period of at least two years following the date of initial issuance of the Certificates, for a specified period, permit the borrower to (i) make voluntary principal prepayments upon the payment of the greater of a Yield Maintenance Charge or Prepayment Premium or (ii) defease the related Mortgage Loan by pledging Government Securities that provide for payment on or prior to each Due Date through and including the maturity date or Anticipated Repayment Date, as applicable (or, in some cases, such earlier Due Date on which the Mortgage Loan becomes freely prepayable), of amounts at least equal to the amounts that would have been payable on those dates under the terms of the subject Mortgage Loan and obtaining the release of the related Mortgaged Property from the lien of the related mortgage, and thereafter such Mortgage Loan is freely prepayable. |
· | One (1) of the Mortgage Loans, representing approximately 0.2% of the Cut-off Date Pool Balance, permits voluntary principal prepayments upon the payment of the greater of a Yield Maintenance Charge or a Prepayment Premium for a period and thereafter such Mortgage Loan is freely prepayable. |
Notwithstanding the foregoing, the Mortgage Loans generally provide for open periods of various terms prior to and including the maturity date in which the related borrower may prepay the Mortgage Loan without Prepayment Premium, Yield Maintenance Charge or defeasance requirements. In addition, under certain circumstances, certain Mortgage Loans permit prepayments, in whole or in part, despite Lock-out Periods that may otherwise apply. See “—Partial Release and/or Partial Defeasance and/or Substitution and/or Severance/Partial Assumption” below. Also see Annex A-1 to this free writing prospectus, including the footnotes thereto, for the individual prepayment restrictions and seasoning applicable to each Mortgage Loan.
Other Prepayment Provisions
The loan documents for each of the related Mortgage Loans generally provide that voluntary prepayments made on a date other than a scheduled due date must include an interest payment representing interest for the remainder of the one-month accrual period in which the prepayment occurs. See “Certain Characteristics of the Mortgage Loans and Mortgaged Properties”, including the footnotes thereto, attached as Annex A-1 to this free writing prospectus.
In connection with the origination of certain Mortgage Loans, the related borrower was required to escrow funds or post a letter of credit related to obtaining certain performance objectives or other conditions and, in some of these cases, those performance objectives
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include achieving specified debt service coverage and/or debt yield levels or satisfying leasing criteria with respect to the property as a whole or particular portions thereof. Such funds will be released to the related borrower upon the satisfaction of the stated conditions. Additionally, such Mortgage Loans may allow or, in certain cases, may require that such escrowed funds be applied to reduce the principal balance of the related Mortgage Loan if such conditions are not met. If such conditions are not satisfied, and if the related mortgagee has the discretion to retain the cash or letter of credit as additional collateral, the applicable Master Servicer will generally be directed in the Pooling and Servicing Agreement to hold, when permitted, the escrows, letters of credit or proceeds of such letters of credit as additional collateral and not use such funds to reduce the principal balance of the related Mortgage Loan, unless holding such funds would otherwise be inconsistent with the Servicing Standard. If such funds are applied to reduce the principal balance of the Mortgage Loan, the Trust Fund would experience an early prepayment that may adversely affect the yield to maturity on your Certificates. In some cases, the related Mortgage Loan documents do not require payment of a Yield Maintenance Charge or Prepayment Premium in connection with such a prepayment. In addition, certain other Mortgage Loans have performance escrows or letters of credit and do not allow the lender to use such funds to reduce the principal balance of the related Mortgage Loan unless there is an event of default. See “Summaries of the Fifteen Largest Mortgage Loans” in Annex A-3 to this free writing prospectus.
For example, with respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Brickyard Square, representing approximately 1.0% of the Cut-off Date Pool Balance, the lender required that a $2,230,000 holdback be established at origination. Such holdback may be disbursed upon each of the Beach Plum restaurant tenant and the New Hampshire Liquor Commission having delivered an estoppel reasonably acceptable to lender confirming that it has taken occupancy of its space and is conducting normal business operations, is not the subject of a bankruptcy action, is paying full rent, and all tenant improvement costs, leasing commissions and other material costs and expenses payable or incurred by the related borrower with respect each lease have been paid in full. If by May 1, 2016, the build-out of the New Hampshire Liquor Commission space has not been completed and the New Hampshire Liquor Commission has not accepted possession of the premises, the lender may apply the proceeds to pay down the subject Mortgage Loan.
In addition, certain of the Mortgage Loans permit the related borrower to prepay the Mortgage Loan (in some cases, with no requirement to pay any related Yield Maintenance Charge or Prepayment Premium) in order to meet certain requirements necessary to permit a property release. See “—Partial Release and/or Partial Defeasance and/or Substitution and/or Severance/Partial Assumption” below in this free writing prospectus.
With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as 8211 Town Center Drive, representing approximately 0.5% of the Cut-off Date Pool Balance, if, following a casualty, proceeds are applied to pay down the balance of the Mortgage Loan rather than to the restoration of the Mortgaged Property, the borrower has the right to prepay the remaining Mortgage Loan balance in full without a prepayment premium, subject to certain conditions, including (i) the amount of net proceeds is not less than 30% of outstanding principal amount of the Mortgage Loan and (ii) the applicable interest shortfall payment is paid.
In other circumstances, tenants or other third parties may have purchase rights that are conditioned upon events that, if they occurred, would constitute events of default under the related Mortgage Loans. In such cases, the lender would have the right to exercise remedies available to it under the related Mortgage Loan documents prior to any
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prepayment occurring during the Lock-out Period, though we cannot assure you as to the timing of such remedies.
With respect to the residential cooperative properties which are described as being encumbered by subordinate mortgage liens under “—Additional Debt Financing For Mortgage Loans Secured by Residential Cooperatives”, each such Mortgage Loan is cross-defaulted with such subordinate mortgage lien(s) in the amounts described below under “—Additional Debt Financing For Mortgage Loans Secured by Residential Cooperatives”. In each case, the subordinate lender is subject to a subordination agreement, which generally subordinates the subordinate lender’s rights and remedies to those of the lender under the Mortgage Loan; however, the subordinate lender is not subject to a standstill agreement. We cannot assure you that the foregoing circumstances, including with respect to the subordinate lender’s right to independently pursue a foreclosure action, will not result in a prepayment of the Mortgage Loan at a time when the applicable Special Servicer might otherwise have elected to modify the related Mortgage Loan or take other action with respect to the Mortgage Loan. In addition, we cannot assure you that foreclosure by the subordinate lender will not result in a material reduction in the liquidation proceeds that otherwise might have been realized by the applicable Special Servicer if the applicable Special Servicer were able to elect a different course of action.
See “Summaries of the Fifteen Largest Mortgage Loans” attached as Annex A-3 to this free writing prospectus and the footnotes to Annex A-1 in this free writing prospectus.
Calculation of Yield Maintenance Charges
Under certain Mortgage Loans that provide for the payment of a Yield Maintenance Charge in connection with a voluntary principal prepayment, the amount of the charge is generally calculated so as to result in a payment to the lender that is equal to the difference (if such difference is greater than zero) between (a) the present value of the remaining scheduled principal and interest payments that would have become due through a certain date with respect to the prepaid portion of the Mortgage Loan had the prepayment not occurred discounted at the Yield Maintenance Discount Rate, and (b) the amount of the prepayment. In the case of other Mortgage Loans that provide for the payment of a Yield Maintenance Charge in connection with a voluntary principal prepayment, the amount of the charge is calculated so as to result in a payment to the lender that is equal to the present value of the monthly payments of interest which would be due on the principal amount of the loan being prepaid (in certain cases, taking into account future scheduled amortization) from the prepayment date through the maturity date or Anticipated Repayment Date, as applicable, of the loan or the date that the borrower could prepay the Mortgage Loan without a prepayment charge, and assuming an interest rateper annum equal to the difference (if such difference is greater than zero) between (y) the mortgage rate and (z) Yield Maintenance Discount Rate, and discounted at the Yield Maintenance Discount Rate (which may be different from the rate in clause (z) for the same loan). In the case of other Mortgage Loans that provide for the payment of a Yield Maintenance Charge in connection with a voluntary principal prepayment, the amount of the charge is generally calculated using a methodology expressed differently than the above methodologies, but which results in a Yield Maintenance Charge which does not substantially differ in amount from the Yield Maintenance Charges that would be calculated under the foregoing methodologies. In certain cases, the amount of the Yield Maintenance Charge is subject to a minimum amount that is equal to a fixed percentage of the amount of the principal prepayment or is calculated solely on the basis of a fixed percentage of the amount of the principal prepayment. The relevant Mortgage Loan may provide for the use of a spread in determining the Yield Maintenance Discount Rate, if any. With respect to certain Mortgage Loans, Yield Maintenance Charges are calculated for a yield maintenance period that ends
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prior to the related maturity date or Anticipated Repayment Date. Calculation of Yield Maintenance Charges by reference to a yield maintenance period that ends prior to the related maturity date will likely result in a Yield Maintenance Charge that is lower than the Yield Maintenance Charge that would have been calculated had the yield maintenance period ended on the maturity date of such Mortgage Loan.
The “Yield Maintenance Discount Rate” means a rate generally equal to or otherwise calculated based on the yield(s) to maturity on specified United States Treasury securities or other specified Government Securities with a maturity or maturities generally corresponding to or close to either (a) the maturity date, Anticipated Repayment Date or other date that corresponds to the end of a yield maintenance period, as applicable, of the Mortgage Loan or the first date on which the related borrower could prepay the Mortgage Loan without a prepayment charge or (b) the remaining weighted average life of the Mortgage Loan, determined on a date close to the date of the prepayment. Alternatively, the rate is sometimes equal to the rate which, when compounded monthly, is equal to the semi-annual yield of the corresponding securities described above. The rate will be subject to varying rounding conventions depending on the terms of the applicable Mortgage Loan documents and may be increased by an applicable spread.
Defeasance Conditions Generally
As described in this free writing prospectus, some of the Mortgage Loans permit the related borrower to defease the subject Mortgage Loan in whole or, in some cases, in part, during a period that commences no earlier than the second anniversary of the Closing Date, by pledging to the holder of the Mortgage Loan the requisite amount of defeasance collateral, and thereby obtain a release of the related Mortgaged Property or, if applicable, one or more of the related Mortgaged Properties. In general, the defeasance collateral must consist of Government Securities.
In general, the Government Securities that are to be delivered in connection with the defeasance of any Mortgage Loan, must provide for a series of payments that:
· | will be made on or prior, but as closely as possible, to all successive Due Dates through and including the maturity date or, in some instances, the expiration of the Lock-out Period; and |
· | will, in the case of each Due Date, be in a total amount equal to or greater than the scheduled debt service payment, including any applicable balloon payment or ARD payment, scheduled to be due or deemed due on that date, with any excess to be returned to the related borrower or a successor borrower. |
Notwithstanding the foregoing, in lieu of delivering the requisite amount of Government Securities, generally a borrower may instead deliver cash sufficient for the lender to purchase the requisite amount of Government Securities.
Each multi-property Mortgage Loan that allows for partial defeasance of the aggregate debt provides that in the event of a defeasance of less than the entire aggregate debt, one or more of the related Mortgaged Properties would be released from the lien of the related mortgage.
If fewer than all of the Mortgaged Properties securing any particular multi-property Mortgage Loan are permitted by the related Mortgage Loan documents to be released in connection with any defeasance, then the borrower generally must deliver one of the following: (a) Government Securities that provide, or an amount sufficient to purchase
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Government Securities that provide, payments equal to 100% to 125% of the scheduled principal and interest payments for the Mortgage Loan (or portion thereof) being defeased; or (b) Government Securities that provide, or an amount sufficient to purchase Government Securities that provide, payments equal to the lesser of (i) 100% to 125% of the scheduled principal and interest payments for the Mortgage Loan (or portion thereof) being defeased or (ii) the total of all remaining scheduled payments on, as applicable, the entire individual multi-property Mortgage Loan (assuming no defeasance has occurred). See “—Partial Release and/or Partial Defeasance and/or Substitution and/or Severance/Partial Assumption” below.
In connection with any delivery of defeasance collateral, the related borrower will be required to deliver a security agreement granting the Trust a first priority security interest in the collateral, together with an opinion of counsel confirming the first priority status of the security interest. In addition, a borrower will generally be required to deliver a certification from an independent accounting firm or provide other evidence reasonably acceptable to the lender to the effect that the defeasance collateral is sufficient to make all scheduled debt service payments under the related Mortgage Loan (or portion thereof to be defeased) through maturity or the Anticipated Repayment Date, as applicable, or, in some instances, the expiration of the Lock-out Period. Certain Mortgage Loans may permit variations in the mechanics of defeasance transactions that create risk. For example, the related borrower may be permitted to deliver a certificate as to the adequacy of defeasance collateral from parties other than a recognized public accounting firm, and/or may not be required to obtain Rating Agency Confirmation in connection with the defeasance under certain circumstances. See also representation and warranty no. 34 in Annex C-1 and the exceptions thereto in Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus).
Certificateholders will not be entitled to any defeasance fees or any additional amounts payable to the lender in respect of successor borrowers established for defeasance purposes.
Partial Release and/or Partial Defeasance and/or Substitution and/or Severance/Partial Assumption. Some of the Mortgage Loans that are secured by two or more Mortgaged Properties, and some of the Mortgage Loans that are secured by a Mortgaged Property that consists of multiple parcels, permit the borrower to obtain the release of the mortgage on one or more of the related Mortgaged Properties or parcels upon a partial prepayment or partial defeasance of the related Mortgage Loan or to substitute a like property for one or more parcels of the Mortgaged Property (subject to the satisfaction of various conditions) or otherwise permit the borrower and the related guarantor to be released upon the transfer of an individual property and a partial assumption of the related obligation by the transferee. The following paragraphs summarize the related provisions for releases in connection with partial prepayment, partial defeasance, substitution and severance and partial assumption.
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A- 1 to this free writing prospectus as WPC Self Storage Portfolio VII, representing approximately 3.2% of the Cut-off Date Pool Balance, the Mortgage Loan documents permit the partial release of any of the properties in connection with a partial defeasance following a defeasance lockout period, subject to certain conditions, including, among other things: (i) defeasance of a portion of the Mortgage Loan in an amount equal to 125% of the allocated loan amount for the release property; (ii) the post-release combined debt service coverage ratio for the remaining properties is equal to or greater than the greater of (A) the pre-release combined debt service coverage ratio for all the properties and (B) the combined debt service coverage ratio for all the properties at origination; (iii) the post-release |
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loan-to-value ratio for the remaining properties is equal to or less than the lesser of (A) the pre-release combined loan-to-value ratio for all the properties and (B) the combined loan-to-value ratio for all the properties at origination; (iv) if required by the lender, delivery of a Rating Agency Confirmation; and (v) delivery of an opinion of counsel that the REMIC trust will not fail to maintain its REMIC status due to the partial release. |
In addition, the Mortgage Loan documents permit the substitution of any individual property, subject to the satisfaction of certain conditions, including, among other things: (i) the borrower is not permitted to substitute the same individual property more than once during the loan term; (ii) the post-substitution combined debt service coverage ratio for the remaining properties is equal to or greater than the greater of (A) the pre-substitution combined debt service coverage ratio for all the properties and (B) the combined debt service coverage ratio for all the properties at origination; (iii) the substitute property must have an appraised value greater than the property being replaced; (iv) the post-substitution loan-to-value ratio for the remaining properties is equal to or less than the lesser of (A) the pre-substitution combined loan-to-value ratio for all the properties and (B) the combined loan-to-value ratio for all the properties at origination; (v) the substitute property must have a physical condition, use, quality and location (including factors such as submarket strength, population and access) that is equal to or better than the property being replaced, as determined by the lender in accordance with the prudent lender standard; (vi) delivery of a Rating Agency Confirmation; and (vii) delivery of an opinion of counsel that the REMIC trust will not fail to maintain its REMIC status due to the substitution.
Further, the Mortgage Loan documents provide that, following 12 months from the loan origination date, the lender must not unreasonably withhold consent to an individual property transfer and the assumption by such transferee of a portion of the Mortgage Loan equal to the applicable allocated loan amount, subject to certain conditions, including, among other things: (i) a single property sale may not occur more frequently than once per individual property and twice during the term of the Mortgage Loan; (ii) the debt service coverage ratio for (A) the transferred property and (B) the remaining properties must be greater than 1.40x; (iii) the loan-to-value ratio for (A) the transferred property and (B) the remaining properties must be no greater than 65%; (iv) if required by the lender, delivery of an Rating Agency Confirmation with respect to the sale, severance and partial assumption; and (v) delivery of an opinion of counsel that the REMIC trust will not fail to maintain its REMIC status due to the severance and partial assumption.
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Dulles North Corporate Parks, representing approximately 2.1% of the Cut-off Date Pool Balance, following the defeasance lockout period, the Mortgage Loan documents permit the partial release and related partial defeasance of either property, subject to certain conditions, including, among other things: (i) with respect to the partial release of the Dulles North Corporate Park 2 Building only, space in the Dulles North Corporate 5 Building currently occupied by its largest tenant must have been renewed or re-let on terms specified in the Mortgage Loan documents; (ii) defeasance of a portion of the Mortgage Loan in an amount equal to 125% of the allocated loan amount for the release property; (iii) the post-release debt service coverage ratio for the remaining property must be equal to or greater than the greater of (A) the pre-release combined debt service coverage ratio for all properties and (B) 1.60x; (iv) the post- |
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release assumed debt service coverage ratio (based on a 10% imputed interest rate and a 25-year amortization schedule) for the remaining property must be equal to or greater than the greater of (A) the pre-release combined assumed debt service coverage ratio for all properties and (B) 1.10x; (v) the post-release loan-to-value ratio for the remaining property must be equal to or less than the lesser of (A) the pre-release combined loan-to-value ratio for all properties and (B) 65%; (vi) delivery of a rating agency confirmation; and (vii) delivery of an opinion of counsel that the REMIC trust will not fail to maintain its REMIC status due to the partial release. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Shops at Doral, representing approximately 1.1% of the Cut-off Date Pool Balance, the Mortgage Loan documents permit the partial release of the portion of such Mortgaged Property referred to in such Mortgage Loan documents as the “Bank of America outparcel” in connection with the partial defeasance of 125% of the allocated loan amount, subject to certain conditions, including: (i) after release, (A) the debt service coverage ratio of the portion of the remaining Mortgaged Property is no less than the greater of (1) 1.50x and (2) the debt service coverage ratio immediately prior to the release; and (B) the loan-to-value ratio will not be greater than the lesser of (1) 67.0% and (2) the loan-to-value ratio immediately prior to the release; and (ii) delivery of a rating agency confirmation. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Ozinus Realty Property Portfolio, representing approximately 1.0% of the Cut-off Date Pool Balance, following the lockout period, as long as no event of default has occurred and is continuing, the related Mortgage Loan documents permit the release of an individual property (the “Release Property”) from the obligations under the guaranty and from the lien of the related mortgage (in connection with a prepayment and sale of the Release Property),provided that, among other conditions, (i) the borrower gives 60 days’ written notice; (ii) the borrower pays all reasonable fees and expenses incurred by the lender; (iii) the borrower makes a partial prepayment in the amount of 125% of the allocated loan amount as well as the related amount of accrued interest through the release date; (iv) the loan-to-value ratio of the remaining property immediately following the release is equal to or less than 50%; (v) after giving effect to the sale of the Release Property, the debt service coverage ratio is not less than the greater of (A) the debt service coverage ratio as of the loan origination and (B) the debt service coverage ratio of the Mortgaged Properties immediately prior to the sale; and (vi) satisfaction of any condition required by the lender to comply with the Internal Revenue Code of 1986, as amended, or any other legal requirement applicable to the REMIC trust. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Nexus Town Center, representing approximately 0.8% of the Cut-off Date Pool Balance, the Mortgage Loan documents permit, following the defeasance lockout period, the partial release and related partial defeasance of an improved out-parcel in connection with a bona fide sale of a release property to an unaffiliated third party, subject to certain conditions, including, among other things: (i) delivery of defeasance collateral in an amount equal to the greater of (A) the net sales proceeds for the release parcel; (B) 125% of allocated loan amount for the release property; (C) an amount that would result in the post-release combined debt service coverage ratio for the remaining property being not less than the greater of (1) the pre-release debt service coverage ratio and |
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(2) 1.60x; (D) an amount that would result in the post-release debt yield for the remaining property being not less than the greater of (1) the pre-release debt yield and (2) 11.0%; and (E) an amount that would result in the post-release loan-to-value ratio for the remaining property being not greater than the lesser of (1) the pre-release loan-to-value ratio and (2) 55%; (ii) confirmation that 25% of leasable square footage or income is not scheduled to terminate within 3 years of release; (iii) delivery of a Rating Agency Confirmation; and (iv) delivery of an opinion of counsel that the REMIC trust will not fail to maintain its REMIC status due to the partial release. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Cooperstown Commons Shopping Center, representing approximately 0.3% of the Cut-off Date Pool Balance, the Mortgage Loan documents permit the release of the outparcels leased to NBT Bank and McDonald’s,provided that, among other things, (i) the related borrower delivers defeasance collateral in an amount equal to 125% of the allocated loan amount for each such parcel to be released, (ii) after giving effect to such release, (A) the debt service coverage ratio with respect to the remaining Mortgaged Property is not less than the greater of (x) 1.60x and (y) the debt service coverage ratio immediately prior such release; and (B) the loan-to-value ratio for the remaining Mortgaged Property is no greater than the lesser of (x) 70%, and (y) the loan-to-value ratio as of the date immediately prior such release; (iii) the lender receives a rating agency confirmation with respect to such release; and (iv) the lender receives an opinion of counsel that the Trust will not fail to maintain its REMIC status as a result of the release. The allocated loan amounts are as follows: $840,000 for the NBT Bank parcel and $470,000 for the McDonald’s parcel. |
Furthermore, some of the Mortgage Loans permit the release or substitution of specified parcels of real estate or improvements that secure the Mortgage Loans but were not assigned any material value or considered a source of any material cash flow for purposes of determining the related Appraised Value or Underwritten Net Cash Flow or considered material to the use or operation of the property. Such real estate may be permitted to be released, subject to certain REMIC rules, without payment of a release price and consequent reduction of the principal balance of the subject Mortgage Loan or substitution of additional collateral if zoning and other conditions are satisfied.
See “Risk Factors—Risks Related to the Mortgage Loans—Changes to REMIC Restrictions on Loan Modifications and REMIC Rules on Partial Releases May Impact an Investment in the Certificates” in this free writing prospectus and “Summaries of the Fifteen Largest Mortgage Loans—WPC Self Storage Portfolio VII”, “—Queens’ MarketPlace” and “—Dulles North Corporate Parks” in Annex A-3 to this free writing prospectus.
Non-Recourse Obligations
The Mortgage Loans (other than the residential cooperative mortgage loans sold to the depositor by National Cooperative Bank, N.A., which are generally full recourse to the related borrower) are generally non-recourse obligations of the related borrowers and, upon any such borrower’s default in the payment of any amount due under the related Mortgage Loan, the holder thereof may look only to the related Mortgaged Property for satisfaction of the borrower’s obligations. While many mortgage loans contain non-recourse carveouts for liabilities such as a result of fraud by the borrower, certain voluntary insolvency proceedings or other matters, certain of the Mortgage Loans do not contain such carveouts or contain limitations to such carveouts.
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In those cases where the Mortgage Loan documents permit recourse to the borrower or a guarantor, we and the Mortgage Loan Sellers generally have not evaluated, and we make no statement regarding, the financial condition of any such person or entity or the likelihood that such person or entity will be able to perform any guaranty obligations, including nonrecourse carveout obligations or nonrecourse carveout guaranty obligations, that may arise in connection with the related Mortgage Loan. In many cases, the net worth and/or the liquid assets of the related nonrecourse carveout guarantor(s) are less (and perhaps substantially less) than the amount of the subject Mortgage Loan. Furthermore, some Mortgage Loans do not require any guarantor or indemnitor separate from the borrower to be liable for the non-recourse carveouts. Additionally, the borrowers under the mortgage loans are generally special purpose entities with limited or no other assets. Investors should thus consider all of the Mortgage Loans to be nonrecourse in all respects.
Generally, none of the Mortgage Loans are insured or guaranteed by any Mortgage Loan Seller or any of their affiliates, the United States or any foreign government, any government entity or instrumentality, any private mortgage insurer or any other person.
See “Risk Factors—Risks Related to the Mortgage Loans—Mortgage Loans With Borrowers That Are Not Bankruptcy Remote Entities or That Do Not Have Non-Recourse Carveout Guarantees May Be More Likely To File Bankruptcy Petitions or Take Other Actions That May Adversely Affect Distributions on Your Certificates” in this free writing prospectus. See also representation and warranty no. 28 in Annex C-1 to this free writing prospectus and the exceptions thereto in Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus).
“Due-on-Sale” and “Due-on-Encumbrance” Provisions
The Mortgage Loans generally contain “due-on-sale” and “due-on-encumbrance” clauses that permit the holder of the mortgage to accelerate the maturity of the related Mortgage Loan if the borrower sells or otherwise transfers or encumbers the related Mortgaged Property or that prohibit the borrower from doing so without the consent of the holder of the mortgage, in each case except to the extent the transfer is permitted under the Mortgage Loan documents.
All or substantially all of the Mortgage Loans (other than the residential cooperative mortgage loans) grant the related borrower a right, exercisable on multiple occasions and, in some cases, without limit on the number of such occasions, to assign the related Mortgaged Property to and cause an assumption of the Mortgage Loan by a third-party purchaser, subject to one or any combination of the following: (i) the condition that the transferee be a third-party purchaser that is reasonably acceptable to the lender; (ii) delivery of Rating Agency Confirmation by each of the Rating Agencies; (iii) payment of an assumption fee by the related borrower; and/or (iv) the original guarantor(s) and indemnitor(s) remain liable under the Mortgage Loan documents (unless the lender otherwise consents). Under the Pooling and Servicing Agreement, assumption fees may be waived by the applicable Master Servicer and/or the applicable Special Servicer, as the case may be, or, if collected, will be paid to the applicable Master Servicer and/or the applicable Special Servicer as additional servicing compensation.
In addition, with respect to the Mortgage Loans secured by the Mortgaged Properties identified on Annex A-1 to this free writing prospectus as Cathedral Place and Cathedral Place – Parking, collectively representing approximately 4.2% of the Cut-off Date Pool Balance, each related borrower is only permitted to assign the related Mortgaged Property
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to, and cause an assumption of the related Mortgage Loan by, a third-party purchaser if both Mortgage Loans are assigned and assumed simultaneously.
The Mortgage Loans generally also permit the borrower to transfer the related Mortgaged Property to an affiliate or subsidiary of the borrower, or an entity of which the borrower or an affiliate thereof is the controlling beneficial owner, upon the satisfaction of certain limited conditions set forth in the applicable Mortgage Loan documents and/or as determined by the applicable Master Servicer and/or the applicable Special Servicer or permit transfers in certain limited circumstances, including one or more of the following: (1) a transfer of the related Mortgaged Property or ownership interests in the borrower to a person that is affiliated with or otherwise related to the borrower or transferor; (2) transfers by the borrower of the Mortgaged Property, and/or transfers of ownership interests in the borrower, to specified individuals, entities or types of individuals or entities; (3) issuance by the borrower of new partnership or membership interests; (4) changes in ownership between existing shareholders, partners, members or other beneficial owners, as applicable, of the borrower; (5) a transfer of passive, minority (i.e.,less than 50%) or non-controlling ownership interests in the related borrower (or, with respect to Mortgage Loans as to which the borrower is a Delaware statutory trust or is comprised of tenants in common, transfers to new beneficial owners in the Delaware statutory trust or to new, or among existing, tenants in common); (6) transfers of interests in the related borrower for estate planning purposes or otherwise upon the death or incapacity of a principal; (7) a transfer of publicly-traded stock of a direct or indirect equity holder in the borrower; (8) transfers of interests in the related borrower approved by the lender, which approval may be subject to delivery of Rating Agency Confirmation from each of the Rating Agencies; (9) transfers to a mezzanine lender or other qualified transferee in accordance with the related intercreditor agreement; (10) in the case of residential cooperative mortgage loans, transfers or pledges of interests in the related cooperative borrower in connection with the transfer or financing of cooperative apartment units; (11) transfers of direct or indirect interests in a specified upstream entity; (12) transfers of shares or certificates of membership in a borrower organized as a cooperative; and (13) other transfers similar in nature to the foregoing. See also representation and warranty no. 32 in Annex C-1 and the exceptions thereto in Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus).
Furthermore, upon satisfaction of certain conditions set forth in the related Mortgage Loan documents, certain individual Mortgage Loans allow the borrower or its owners to incur secured secondary financing and/or mezzanine and similar financing that may otherwise be contrary to their “due-on-sale” or “due-on-encumbrance” provisions. In addition, with respect to the residential cooperative mortgage loans, the applicable master servicer will be permitted to waive the enforcement of “due-on-encumbrance” clauses to permit subordinate debt secured by the related mortgaged property subject to the satisfaction of various conditions and subject to certain parameters set forth in the Pooling and Servicing Agreement. See “—Subordinate and/or Other Financing” and “—Additional Debt Financing For Mortgage Loans Secured by Residential Cooperatives” below and see “Risk Factors—Risks Related to the Offered Certificates—If any Master Servicer or any Special Servicer Purchases Certificates or Has Investments Related to a Borrower or Other Person, a Conflict of Interest May Arise Between Its Own Interests and Its Duties to the Trust Fund” and “—Various Other Securitization-Level Conflicts of Interest May Have an Adverse Effect on Your Offered Certificates—Conflicts Between the Trust Fund and the Mortgage Loan Sellers and Their Affiliates” in this free writing prospectus.
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See “Servicing of the Mortgage Loans and Administration of the Trust Fund—Enforcement of Due-on-Sale and Due-on-Encumbrance Provisions” in this free writing prospectus.
Encumbered Interests
In the case of one-hundred forty-nine (149) of the Mortgaged Properties, collectively securing approximately 99.6% of the Cut-off Date Pool Balance in the aggregate by allocated loan amount, the borrower’s interest in the related Mortgaged Property consists solely of a fee interest in the related Mortgaged Property (and we consider the borrower’s interest in a Mortgaged Property to be a fee interest if the borrower’s fee interest completely overlaps any leasehold interests of the borrower).
In the case of two (2) of the Mortgaged Properties, identified on Annex A-1 to this free writing prospectus as Sycamore Terrace and Gillespie Field Business Park, collectively representing approximately 0.4% of the Cut-off Date Pool Balance in the aggregate by allocated loan amount, the borrower’s interest in the related Mortgaged Property consists solely of a leasehold interest in the related Mortgaged Property.
See “Risk Factors—Risks Related to the Mortgage Loans—Loans Secured by Mortgages on a Leasehold Interest Will Subject Your Investment to a Risk of Loss Upon a Lease Default” in this free writing prospectus.
ARD Loans
Two (2) of the Mortgage Loans (each, an “ARD Loan”), collectively representing approximately 0.6% of the Cut-off Date Pool Balance, provide that, after a certain date (the “Anticipated Repayment Date”) set forth on Annex A-1 to this free writing prospectus, if the related borrower has not repaid the related ARD Loan in full, any principal outstanding from time to time on or after that date will accrue interest at an increased interest rate (the “Revised Rate”) rather than the stated mortgage loan rate (the “Initial Rate”). After its Anticipated Repayment Date, each ARD Loan further requires that all cash flow available from the related Mortgaged Property after payment of the monthly debt service payments required under the terms of such ARD Loan documents and all escrows and property expenses required under such ARD Loan documents be used to accelerate amortization of principal (without payment of any Yield Maintenance Charge or Prepayment Premium). Notwithstanding the accrual of interest under each such ARD Loan at the Revised Rate after its Anticipated Repayment Date, the portion thereof accrued at the Initial Rate will continue to be payable monthly on a current basis; the obligation to pay the portion thereof accrued in excess of the Initial Rate (such interest so accrued, “Excess Interest”) will be deferred; and such Excess Interest will become due and payable only after the outstanding principal balance of such ARD Loan has been paid in full, and will accrue interest at the Revised Rate (to the extent permitted under applicable law and the loan documents). Interest accrued at the Revised Rate on previously accrued Excess Interest (whether such previously accrued Excess Interest has been added to the principal balance of the ARD Loans or is a separate deferred amount) will itself be Excess Interest that is treated in the same manner and is also not payable currently. To the extent actually collected, Excess Interest with respect to the Mortgage Loan identified on Annex A-1 to this free writing prospectus as Walgreens – Milwaukee or the Mortgage Loan identified on Annex A-1 to this free writing prospectus as Haggen Food & Pharmacy will be paid to the holders of the Class V-1 and V-2 Certificates, respectively.
Additionally, an account was established at the origination, or is required to be established upon the occurrence of the Anticipated Repayment Date, of any ARD Loan into
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which the tenant(s) are to be directed to deposit rents or into which other revenues from the Mortgaged Property must be deposited. The related borrower is entitled to receive remittances periodically subject to certain terms and conditions.
The amortization term for any ARD Loan is significantly longer than the period up to the Anticipated Repayment Date; consequently, the repayment of any ARD Loan in full on its Anticipated Repayment Date would require a substantial payment of principal on that date (except to the extent that such ARD Loan is repaid prior thereto). The ARD provisions described above, to the extent applicable, may result in an incentive for the borrower to repay an ARD Loan on or before its Anticipated Repayment Date but the borrower will have no obligation to do so. We make no statement regarding the likelihood that any ARD Loan will be repaid on its Anticipated Repayment Date.
Loan Combinations
The following table presents certain information regarding the Loan Combinations:
Loan | Cut-off Date | Cut-off Date Principal Balance of Pari Passu Companion Loan | Aggregate Cut-off Date Balance of Loan Combination | Cut-off Date LTV Ratio of Loan Combination | Pari Passu Mortgage Loan Interest Rate | Pari Passu Companion Loan Interest Rate | U/W Debt Service Coverage Ratio for Loan Combination |
Brickyard Square | $11,450,000 | $25,000,000 | $36,450,000 | 72.2% | 4.510% | 4.510% | 1.26x |
Bella Luna / San Lucas | $4,957,123 | $15,367,079 | $20,324,202 | 58.1% | 3.949% | 3.949% | 2.03x |
The Brickyard Square Loan Combination
General. With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Brickyard Square, representing approximately 1.0% of the Cut-off Date Pool Balance (the “Brickyard Square Mortgage Loan”), the related Mortgaged Property (the “Brickyard Square Mortgaged Property”) also secures another mortgage loan, which ispari passu in right of payment with the Brickyard Square Mortgage Loan (the “Brickyard Square Pari Passu Companion Loan” and, together with the Brickyard Square Mortgage Loan, the “Brickyard Square Loan Combination”). The Brickyard Square Pari Passu Companion Loan is currently held by the WFCM 2015-C28 Trust and has a principal balance as of the Cut-off Date of approximately $25,000,000. Only the Brickyard Square Mortgage Loan is included in the Trust Fund. The Brickyard Square Pari Passu Companion Loan is not an asset of the Trust Fund.
The holders of the Brickyard Square Loan Combination (the “Brickyard Square Noteholders”) have entered into an intercreditor agreement that sets forth the respective rights of each Brickyard Square Noteholder (the “Brickyard Square Intercreditor Agreement”).
Servicing. The Brickyard Square Loan Combination will be primary serviced by Wells Fargo Bank, National Association (the “WFCM 2015-C28 Master Servicer” or an “Other Master Servicer”), and specially serviced by Midland Loan Services, a Division of PNC Bank, National Association (the “WFCM 2015-C28 Special Servicer” or an “Other Special Servicer”), pursuant to the pooling and servicing agreement entered into among Wells Fargo Commercial Mortgage Securities, Inc., as depositor (the “WFCM 2015-C28 Depositor”), the WFCM 2015-C28 Master Servicer, as master servicer, the WFCM 2015-C28 Special Servicer,
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as special servicer, Wilmington Trust, National Association, as trustee (the “WFCM 2015-C28 Trustee” or an “Other Trustee”), Wells Fargo Bank, National Association, as certificate administrator and custodian (the “WFCM 2015-C28 Certificate Administrator” or an “Other Certificate Administrator”) and Pentalpha Surveillance LLC, as trust advisor (the “WFCM 2015-C28 Trust Advisor” or an “Other Trust Advisor”) in connection with the WFCM 2015-C28 securitization (into which the Brickyard Square Pari Passu Companion Loan has been deposited) (the “WFCM 2015-C28 Pooling and Servicing Agreement” or an “Other Pooling and Servicing Agreement”), and, subject to the terms of the Brickyard Square Intercreditor Agreement, all decisions, consents, waivers, approvals and other actions on the part of any Brickyard Square Noteholder will be effected in accordance with the WFCM 2015-C28 Pooling and Servicing Agreement and the Brickyard Square Intercreditor Agreement.
Advances. The applicable Master Servicer or the Trustee, as applicable, will be responsible for making advances of principal and interest on the Brickyard Square Mortgage Loan (but not on the Brickyard Square Pari Passu Companion Loan) pursuant to the Pooling and Servicing Agreement, unless the applicable Master Servicer, the Trustee or the applicable Special Servicer, as applicable, determines that such an advance would not be recoverable from collections on the Brickyard Square Mortgage Loan.
The WFCM 2015-C28 Master Servicer, the WFCM 2015-C28 Special Servicer (with respect to emergency servicing advances) or the WFCM 2015-C28 Trustee, as applicable, under the WFCM 2015-C28 Pooling and Servicing Agreement will be responsible for making (i) any required principal and interest advances on the Brickyard Square Pari Passu Companion Loan as required under the terms of the WFCM 2015-C28 Pooling and Servicing Agreement (but not on the Brickyard Square Mortgage Loan) and (ii) any required property advances with respect to the Brickyard Square Loan Combination, in each case unless a similar determination of nonrecoverability is made under the WFCM 2015-C28 Pooling and Servicing Agreement.
Distributions. The terms of the Brickyard Square Intercreditor Agreement set forth the respective rights of the Brickyard Square Noteholders with respect to distributions of funds received in respect of the Brickyard Square Loan Combination, and provide, in general, that:
· | the Brickyard Square Mortgage Loan and the Brickyard Square Pari Passu Companion Loan are of equal priority with each other and no portion of either of them will have priority or preference over any portion of the other or security therefor; |
· | all payments, proceeds and other recoveries on or in respect of the Brickyard Square Mortgage Loan and the Brickyard Square Pari Passu Companion Loan will be applied to the Brickyard Square Mortgage Loan and the Brickyard Square Pari Passu Companion Loan on apro rata andpari passu basis according to their respective outstanding principal balances (subject, in each case, to the payment and reimbursement rights of any master servicer, special servicer, trust advisor, certificate administrator or trustee under the applicable pooling and servicing agreement) in accordance with the terms of the Brickyard Square Intercreditor Agreement, the Pooling and Servicing Agreement and the WFCM 2015-C28 Pooling and Servicing Agreement governing any securitization of the Brickyard Square Pari Passu Companion Loan; and |
· | expenses, losses and shortfalls relating to the Brickyard Square Loan Combination will be allocated, on apro rata andpari passu basis, to the Brickyard Square Mortgage Loan and the Brickyard Square Companion Loan. |
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Consultation and Control. The controlling note holder under the Brickyard Square Intercreditor Agreement with respect to the Brickyard Square Loan Combination will be the WFCM 2015-C28 Trustee on behalf of the WFCM 2015-C28 trust,provided that unless a “senior consultation period” exists under the WFCM 2015-C28 Pooling and Servicing Agreement, the subordinate class representative under the WFCM 2015-C28 Pooling and Servicing Agreement will be entitled to exercise the rights of the Brickyard Square Controlling Note Holder (such party, the “Brickyard Square Controlling Note Holder”). Certain decisions to be made with respect to the Brickyard Square Loan Combination, including certain major decisions (which are substantially similar in all material respects, but not necessarily identical, to the Material Actions described herein under “Servicing of the Mortgage Loans and Administration of the Trust Fund—Modifications, Waivers, Amendments and Consents”) pursuant to the WFCM 2015-C28 Pooling and Servicing Agreement, will require the approval of the Brickyard Square Controlling Note Holder.
Pursuant to the terms of the Brickyard Square Intercreditor Agreement, and unless the Brickyard Square Loan Combination is an Excluded Loan, the Subordinate Class Representative, as a non-controlling noteholder (the “Brickyard Square Non-Controlling Note Holder”) will have the right (i) to receive copies of all notices, information and reports, in each case, with respect to any major decisions or the implementation of any recommended actions outlined in an asset status report relating to the Brickyard Square Loan Combination, that the WFCM 2015-C28 Master Servicer or the WFCM 2015-C28 Special Servicer, as applicable, under the WFCM 2015-C28 Pooling and Servicing Agreement is required to provide to the Brickyard Square Controlling Note Holder under the WFCM 2015-C28 Pooling and Servicing Agreement within the same time frame the WFCM 2015-C28 Master Servicer or the WFCM 2015-C28 Special Servicer, as applicable, is required to provide such notices, information and reports to the Brickyard Square Controlling Note Holder and (ii) to be consulted by the Brickyard Square Controlling Note Holder (or the WFCM 2015-C28 Master Servicer or the WFCM 2015-C28 Special Servicer, as applicable, acting on its behalf), on a strictly non-binding basis with respect to certain major decisions as set forth in the Brickyard Square Intercreditor Agreement and the implementation by the WFCM 2015-C28 Special Servicer of any recommended actions outlined in an asset status report. The consultation right of the Brickyard Square Non-Controlling Note Holder will expire 10 business days after the delivery by the Brickyard Square Controlling Note Holder (or the WFCM 2015-C28 Master Servicer or the WFCM 2015-C28 Special Servicer, as applicable, acting on its behalf) of notice and information relating to the matter subject to consultation;provided that if a new course of action is proposed that is materially different from the actions previously proposed, the 10 business-day consultation period will begin anew. Notwithstanding the Brickyard Square Non-Controlling Note Holder’s consultation rights described above, the Brickyard Square Controlling Note Holder (or the WFCM 2015-C28 Master Servicer or the WFCM 2015-C28 Special Servicer, as applicable, acting on its behalf) is permitted to implement any major decision or take any action set forth in an asset status report before the expiration of the aforementioned 10 business-day period if it determines that immediate action with respect to such decision is necessary to protect the interests of the holders of the Brickyard Square Mortgage Loan and the Brickyard Square Pari Passu Companion Loan. Generally, during a subordinate control period under the WFCM 2015-C28 Pooling and Servicing Agreement, if the Brickyard Square Controlling Note Holder fails to notify the WFCM 2015-C28 Special Servicer of its approval or disapproval of any such decisions or actions within 10 business days (or in connection with an acceptable insurance default, thirty (30) days) of the expiration of the time period described in the second preceding sentence of this paragraph (provided that such time period will be deemed to have commenced upon the WFCM 2015-C28 Special Servicer’s receipt of the WFCM 2015-C28’s written recommendations and analysis), such decisions or actions will be deemed approved. Pursuant to the terms of the
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WFCM 2015-C28 Pooling and Servicing Agreement, the Brickyard Square Controlling Note Holder will have certain consent and/or consultation rights with respect to the Brickyard Square Loan Combination for so long as it has consent and/or consultation rights with respect to each other Mortgage Loan included in the Issuing Entity (other than any Excluded Loan).
In addition to the consultation rights of the Brickyard Square Non-Controlling Note Holder described above, the Brickyard Square Non-Controlling Note Holder (unless the Brickyard Square Loan Combination is an Excluded Loan) will have the right to attend annual conference calls with the WFCM 2015-C28 Master Servicer or the WFCM 2015-C28 Special Servicer, as applicable, upon reasonable notice and at times reasonably acceptable to the WFCM 2015-C28 Master Servicer or the WFCM 2015-C28 Special Servicer, as applicable, in which servicing issues related to the Brickyard Square Loan Combination are discussed.
None of the applicable Master Servicer, the applicable Special Servicer or the WFCM 2015-C28 Master Servicer or the WFCM 2015-C28 Special Servicer may follow any advice or consultation that would require or cause such parties to violate any applicable law, including the REMIC provisions, be inconsistent with the Servicing Standard, require or cause such parties to violate provisions of the Brickyard Square Intercreditor Agreement, the Pooling and Servicing Agreement or the WFCM 2015-C28 Pooling and Servicing Agreement, require or cause such parties to violate the terms of the Brickyard Square Loan Combination, or materially expand the scope of any of such parties’ responsibilities under the Brickyard Square Intercreditor Agreement, the WFCM 2015-C28 Pooling and Servicing Agreement or the Pooling and Servicing Agreement.
Sale of Defaulted Mortgage Loan. Pursuant to the terms of the Brickyard Square Intercreditor Agreement, if the Brickyard Square Loan Combination becomes a “defaulted mortgage loan” pursuant to the terms of the Pooling and Servicing Agreement or the WFCM 2015-C28 Pooling and Servicing Agreement, as applicable, and thereafter the WFCM 2015-C28 Special Servicer determines, pursuant to the WFCM 2015-C28 Pooling and Servicing Agreement and the Brickyard Square Intercreditor Agreement, to pursue a sale of the Brickyard Square Mortgage Loan or the Brickyard Square Pari Passu Companion Loan, then the WFCM 2015-C28 Special Servicer will be required to sell the Brickyard Square Mortgage Loan together with the Brickyard Square Pari Passu Companion Loan as a single whole loan, subject to the satisfaction of certain notice and information delivery requirements and the WFCM 2015-C28 Trustee’s (or any third party hired by the WFCM 2015-C28 Trustee in accordance with the WFCM 2015-C28 Pooling and Servicing Agreement) obligation to review whether any offer received from an Interested Person for the Brickyard Square Mortgage Loan and the Brickyard Square Pari Passu Companion Loan constitutes a fair price. Unless the Brickyard Square Loan Combination is an Excluded Loan, the Brickyard Square Non-Controlling Note Holder will have consultation rights in connection with such sale, as described above. See “Servicing of the Mortgage Loans and Administration of the Trust Fund—Procedures With Respect to Defaulted Mortgage Loans and REO Properties” and “—Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations” in this free writing prospectus.
Replacement of Special Servicer. During any subordinate control period under the WFCM 2015-C28 Pooling and Servicing Agreement, the Brickyard Square Controlling Note Holder will have the right, with or without cause, to replace the special servicer then acting with respect to the Brickyard Square Loan Combination and appoint a replacement special servicer in lieu thereof as long as such replacement special servicer satisfies the conditions set forth in the WFCM 2015-C28 Pooling and Servicing Agreement. During any collective consultation period or senior consultation period under the WFCM 2015-C28 Pooling and
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Servicing Agreement, the special servicer then acting with respect to the Brickyard Square Loan Combination may be terminated by the holders of the WFCM 2015-C28 certificates under substantially similar, but not necessarily identical, circumstances as described under “Servicing of the Mortgage Loans and Administration of the Trust Fund—Replacement of the Special Servicers” in this free writing prospectus. In either case, the special servicer servicing the Brickyard Square Loan Combination can be terminated and replaced without the consent of, or consulting with, the Brickyard Square Non-Controlling Note Holder, the Trustee or any other party under this securitization. See “Servicing of the Mortgage Loans and Administration of the Trust Fund—Replacement of the Special Servicers” and “—Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations” in this free writing prospectus.
For additional information regarding the servicing of the Brickyard Square Loan Combination, see “Servicing of the Mortgage Loans and Administration of the Trust Fund—Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations” in this free writing prospectus.
The Bella Luna / San Lucas Loan Combination
General. With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Bella Luna / San Lucas, representing approximately 0.4% of the Cut-off Date Pool Balance (the “Bella Luna / San Lucas Mortgage Loan”), the related Mortgaged Property (the “Bella Luna / San Lucas Mortgaged Property”) also secures another mortgage loan, which ispari passu in right of payment with the Bella Luna / San Lucas Mortgage Loan (the “Bella Luna / San Lucas Pari Passu Companion Loan” and, together with the Bella Luna / San Lucas Mortgage Loan, the “Bella Luna / San Lucas Loan Combination”). The Bella Luna / San Lucas Pari Passu Companion Loan is currently held by the WFCM 2015-LC20 Trust and has a principal balance as of the Cut-off Date of approximately $15,367,079. Only the Bella Luna / San Lucas Mortgage Loan is included in the Trust Fund. The Bella Luna / San Lucas Pari Passu Companion Loan is not an asset of the Trust Fund.
The holders of the Bella Luna / San Lucas Loan Combination (the “Bella Luna / San Lucas Noteholders”) have entered into an intercreditor agreement that sets forth the respective rights of each Bella Luna / San Lucas Noteholder (the “Bella Luna / San Lucas Intercreditor Agreement”).
Servicing. The Bella Luna / San Lucas Loan Combination will be primary serviced by Wells Fargo Bank, National Association (the “WFCM 2015-LC20 Master Servicer” or an “Other Master Servicer”), and specially serviced by Rialto Capital Advisors, LLC (the “WFCM 2015-LC20 Special Servicer” or an “Other Special Servicer”), pursuant to the pooling and servicing agreement entered into among Wells Fargo Commercial Mortgage Securities, Inc., as depositor (the “WFCM 2015-LC20 Depositor”), the WFCM 2015-LC20 Master Servicer, as master servicer, the WFCM 2015-LC20 Special Servicer, as special servicer, Wilmington Trust, National Association, as trustee (the “WFCM 2015-LC20 Trustee” or an “Other Trustee”), Wells Fargo Bank, National Association, as certificate administrator and custodian (the “WFCM 2015-LC20 Certificate Administrator” or an “Other Certificate Administrator”) and Trimont Real Estate Advisors, Inc., as trust advisor (the “WFCM 2015-LC20 Trust Advisor” or an “Other Trust Advisor”) in connection with the WFCM 2015-LC20 securitization (into which the Bella Luna / San Lucas Pari Passu Companion Loan has been deposited) (the “WFCM 2015-LC20 Pooling and Servicing Agreement” or an “Other Pooling and Servicing Agreement”), and, subject to the terms of the Bella Luna / San Lucas Intercreditor Agreement, all decisions, consents, waivers, approvals and other actions on the part of any
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Bella Luna / San Lucas Noteholder will be effected in accordance with the WFCM 2015-LC20 Pooling and Servicing Agreement and the Bella Luna / San Lucas Intercreditor Agreement.
Advances. The applicable Master Servicer or the Trustee, as applicable, will be responsible for making advances of principal and interest on the Bella Luna / San Lucas Mortgage Loan (but not on the Bella Luna / San Lucas Pari Passu Companion Loan) pursuant to the Pooling and Servicing Agreement, unless the applicable Master Servicer, the Trustee or the applicable Special Servicer, as applicable, determines that such an advance would not be recoverable from collections on the Bella Luna / San Lucas Mortgage Loan.
The WFCM 2015-LC20 Master Servicer, the WFCM 2015-LC20 Special Servicer (with respect to servicing advances) or the WFCM 2015-LC20 Trustee, as applicable, under the WFCM 2015-LC20 Pooling and Servicing Agreement will be responsible for making (i) any required principal and interest advances on the Bella Luna / San Lucas Pari Passu Companion Loan as required under the terms of the WFCM 2015-LC20 Pooling and Servicing Agreement (but not on the Bella Luna / San Lucas Mortgage Loan) and (ii) any required servicing advances with respect to the Bella Luna / San Lucas Loan Combination, in each case unless a similar determination of nonrecoverability is made under the WFCM 2015-LC20 Pooling and Servicing Agreement.
Distributions. The terms of the Bella Luna / San Lucas Intercreditor Agreement set forth the respective rights of the Bella Luna / San Lucas Noteholders with respect to distributions of funds received in respect of the Bella Luna / San Lucas Loan Combination, and provide, in general, that:
· | the Bella Luna / San Lucas Mortgage Loan and the Bella Luna / San Lucas Pari Passu Companion Loan are of equal priority with each other and no portion of either of them will have priority or preference over any portion of the other or security therefor; and |
· | all payments, proceeds and other recoveries on or in respect of the Bella Luna / San Lucas Mortgage Loan and the Bella Luna / San Lucas Pari Passu Companion Loan will be applied to the Bella Luna / San Lucas Mortgage Loan and the Bella Luna / San Lucas Pari Passu Companion Loan on apro rata andpari passu basis according to their respective outstanding principal balances (subject, in each case, to the payment and reimbursement rights of any master servicer, special servicer, trust advisor, certificate administrator or trustee under the applicable pooling and servicing agreement) in accordance with the terms of the Bella Luna / San Lucas Intercreditor Agreement, the Pooling and Servicing Agreement and the WFCM 2015-LC20 Pooling and Servicing Agreement governing any securitization of the Bella Luna / San Lucas Pari Passu Companion Loan. |
Consultation and Control. The controlling note holder under the Bella Luna / San Lucas Intercreditor Agreement with respect to the Bella Luna / San Lucas Loan Combination will be the WFCM 2015-LC20 Trustee on behalf of the WFCM 2015-LC20 trust,provided that unless a “senior consultation period” exists under the WFCM 2015-LC20 Pooling and Servicing Agreement, the subordinate class representative under the WFCM 2015-LC20 Pooling and Servicing Agreement will be entitled to exercise the rights of the Bella Luna / San Lucas Square Controlling Note Holder (such party, the “Bella Luna / San Lucas Controlling Note Holder”). Certain decisions to be made with respect to the Bella Luna / San Lucas Loan Combination, including certain major decisions (which are substantially similar in all material respects, but not necessarily identical, to the Material Actions described herein under “Servicing of the Mortgage Loans and Administration of the Trust Fund—Modifications, Waivers, Amendments and Consents”) pursuant to the WFCM
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2015-LC20 Pooling and Servicing Agreement, will require the approval of the Bella Luna / San Lucas Controlling Note Holder.
Pursuant to the terms of the Bella Luna / San Lucas Intercreditor Agreement, and unless the Bella Luna / San Lucas Loan Combination is an Excluded Loan, the Subordinate Class Representative, as a non-controlling noteholder (the “Bella Luna / San Lucas Non-Controlling Note Holder”) will have the right (i) to receive copies of all notices, information and reports, in each case, with respect to any major decisions or the implementation of any recommended actions outlined in an asset status report relating to the Bella Luna / San Lucas Loan Combination, that the WFCM 2015-LC20 Master Servicer or the WFCM 2015-LC20 Special Servicer, as applicable, under the WFCM 2015-LC20 Pooling and Servicing Agreement is required to provide to the Bella Luna / San Lucas Controlling Note Holder under the WFCM 2015-LC20 Pooling and Servicing Agreement within the same time frame the WFCM 2015-LC20 Master Servicer or the WFCM 2015-LC20 Special Servicer, as applicable, is required to provide such notices, information and reports to the Bella Luna / San Lucas Controlling Note Holder and (ii) to be consulted by the WFCM 2015-LC20 Master Servicer or the WFCM 2015-LC20 Special Servicer on a strictly non-binding basis with respect to certain major decisions as set forth in the Bella Luna / San Lucas Intercreditor Agreement and the implementation by the WFCM 2015-LC20 Special Servicer of any recommended actions outlined in an asset status report. The consultation right of the Bella Luna / San Lucas Non-Controlling Note Holder will expire 10 business days after the delivery by the WFCM 2015-LC20 Master Servicer or the WFCM 2015-LC20 Special Servicer, as applicable, of notice and information relating to the matter subject to consultation;provided that if a new course of action is proposed that is materially different from the actions previously proposed, the 10 business-day consultation period will begin anew. Notwithstanding the Bella Luna / San Lucas Non-Controlling Note Holder’s consultation rights described above, the WFCM 2015-LC20 Master Servicer or the WFCM 2015-LC20 Special Servicer, as applicable, is permitted to implement any major decision or take any action set forth in an asset status report before the expiration of the aforementioned 10 business-day period if it determines that immediate action with respect to such decision is necessary to protect the interests of the holders of the Bella Luna / San Lucas Mortgage Loan and the Bella Luna / San Lucas Pari Passu Companion Loan. Generally, during a subordinate control period under the WFCM 2015-LC20 Pooling and Servicing Agreement, if the Bella Luna / San Lucas Controlling Note Holder fails to notify the WFCM 2015-LC20 Special Servicer of its approval or disapproval of any such decisions or actions within 10 business days (or in connection with an acceptable insurance default, thirty (30) days) of the expiration of the time period described in the second preceding sentence of this paragraph (provided that such time period will be deemed to have commenced upon the WFCM 2015-LC20 Special Servicer’s receipt of the WFCM 2015-LC20’s written recommendations and analysis), such decisions or actions will be deemed approved.
In addition to the consultation rights of the Bella Luna / San Lucas Non-Controlling Note Holder described above, the Bella Luna / San Lucas Non-Controlling Note Holder (unless the Bella Luna / San Lucas Loan Combination is an Excluded Loan) will have the right to attend annual meetings (which may be held telephonically) with the WFCM 2015-LC20 Master Servicer or the WFCM 2015-LC20 Special Servicer, as applicable, upon reasonable notice and at times reasonably acceptable to the WFCM 2015-LC20 Master Servicer or the WFCM 2015-LC20 Special Servicer, as applicable, in which servicing issues related to the Bella Luna / San Lucas Loan Combination are discussed.
None of the applicable Master Servicer, the applicable Special Servicer or the WFCM 2015-LC20 Master Servicer or the WFCM 2015-LC20 Special Servicer may follow any advice or consultation that would require or cause such parties to violate any applicable law,
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including the REMIC provisions, be inconsistent with the Servicing Standard, require or cause such parties to violate provisions of the Bella Luna / San Lucas Intercreditor Agreement, the Pooling and Servicing Agreement or the WFCM 2015-LC20 Pooling and Servicing Agreement, require or cause such parties to violate the terms of the Bella Luna / San Lucas Loan Combination, or materially expand the scope of any of such parties’ responsibilities under the Bella Luna / San Lucas Intercreditor Agreement, the WFCM 2015-LC20 Pooling and Servicing Agreement or the Pooling and Servicing Agreement.
Sale of Defaulted Mortgage Loan. Pursuant to the terms of the Bella Luna / San Lucas Intercreditor Agreement, if the Bella Luna / San Lucas Loan Combination becomes a “defaulted mortgage loan” pursuant to the terms of the Pooling and Servicing Agreement or the WFCM 2015-LC20 Pooling and Servicing Agreement, as applicable, and thereafter the WFCM 2015-LC20 Special Servicer determines to pursue a sale of the Bella Luna / San Lucas Mortgage Loan or the Bella Luna / San Lucas Pari Passu Companion Loan, then the WFCM 2015-LC20 Special Servicer will be required to sell the Bella Luna / San Lucas Mortgage Loan together with the Bella Luna / San Lucas Pari Passu Companion Loan as a single whole loan, subject to the satisfaction of certain notice and information delivery requirements and the WFCM 2015-LC20 Trustee’s (or any third party hired by the WFCM 2015-LC20 Trustee in accordance with the WFCM 2015-LC20 Pooling and Servicing Agreement) obligation to review any offer received for the Bella Luna / San Lucas Mortgage Loan and the Bella Luna / San Lucas Pari Passu Companion Loan. Unless the Bella Luna / San Lucas Loan Combination is an Excluded Loan, the Bella Luna / San Lucas Non-Controlling Note Holder will have consultation rights in connection with such sale, as described above. See “Servicing of the Mortgage Loans and Administration of the Trust Fund—Procedures With Respect to Defaulted Mortgage Loans and REO Properties” and “—Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations” in this free writing prospectus.
Replacement of Special Servicer. During any subordinate control period under the WFCM 2015-LC20 Pooling and Servicing Agreement, the Bella Luna / San Lucas Controlling Note Holder will have the right, with or without cause, to replace the special servicer then acting with respect to the Bella Luna / San Lucas Loan Combination and appoint a replacement special servicer in lieu thereof as long as such replacement special servicer satisfies the conditions set forth in the WFCM 2015-LC20 Pooling and Servicing Agreement. During any collective consultation period or senior consultation period under the WFCM 2015-LC20 Pooling and Servicing Agreement, the special servicer then acting with respect to the Bella Luna / San Lucas Loan Combination may be terminated by the holders of the WFCM 2015-LC20 certificates under substantially similar, but not necessarily identical, circumstances as described under “Servicing of the Mortgage Loans and Administration of the Trust Fund—Replacement of the Special Servicers” in this free writing prospectus. In either case, the special servicer servicing the Bella Luna / San Lucas Loan Combination can be terminated and replaced without the consent of, or consulting with, the Bella Luna / San Lucas Non-Controlling Note Holder, the Trustee or any other party under this securitization. See “Servicing of the Mortgage Loans and Administration of the Trust Fund—Replacement of the Special Servicers” and “—Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations” in this free writing prospectus.
For additional information regarding the servicing of the Bella Luna / San Lucas Loan Combination, see “Servicing of the Mortgage Loans and Administration of the Trust Fund—Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations” in this free writing prospectus.
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Subordinate and/or Other Financing
Existing (Secured Financing and Mezzanine and Similar Financing)
Except as described below under “—Additional Debt Financing For Mortgage Loans Secured by Residential Cooperatives”, the following paragraphs summarize information regarding existing secured financing and mezzanine and similar financing incurred by one or more owners of the borrower that is secured by the related Mortgaged Property or by a pledge of all or a portion of that owner’s direct or indirect equity interests in the borrower.
Other than as described below with respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Magnolia Marketplace, representing approximately 1.6% of the Cut-off Date Pool Balance, and other than certain Mortgage Loans secured by residential cooperative properties, none of the Mortgage Loans have related subordinate indebtedness that is secured by the related Mortgaged Property. For information regarding existing secured subordinate debt with respect to Mortgage Loans secured by residential cooperative properties, see “—Additional Debt Financing For Mortgage Loans Secured by Residential Cooperatives” below in this free writing prospectus.
With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Magnolia Marketplace, representing approximately 1.6% of the Cut-off Date Pool Balance, there is existing subordinate debt in the original principal amount of $892,920 secured by the Mortgaged Property. The subordinate loan was issued by the Housing Authority of New Orleans and has a 30-year term which expires on December 23, 2043. The subordinate note accrues interest at a fixed rate of 1.000%, which interest may be deferred until the maturity date. A subordination agreement provides that no enforcement action can be taken without consent of the lender.
The following tables set forth certain combined loan-to-value ratio and debt service coverage ratio information for the mortgage loans that have existing mezzanine indebtedness.
Existing Mezzanine Financing
Mortgage Loan/Property Portfolio Names | Mortgage Loan Cut-off Date Balance | % of Cut-off Date Pool Balance | Mezzanine Debt Cut-off Date Balance | Intercreditor or Similar Agreement | Combined Debt Service Coverage | Combined LTV |
Staybridge Suites Indianapolis Airport | $6,000,000 | 0.5% | $600,000 | Yes | 1.19x | 69.5% |
The mezzanine loan related to the Mortgage Loan referenced in the foregoing table is subject to an intercreditor agreement between the holder of the mezzanine loan and the lender under the related Mortgage Loan that sets forth the relative rights and priorities between the holders of the related Mortgage Loan and the mezzanine loan. The intercreditor agreement generally provides, among other things, that (a) the mezzanine loan lender will have certain rights to receive notice of and cure defaults under the related Mortgage Loan prior to any acceleration or enforcement of the related Mortgage Loan, (b) the mezzanine loan lender may amend or modify the mezzanine loan in certain respects without the consent of the related Mortgage Loan lender, (c) upon the occurrence of an event of default under the mezzanine loan documents, subject to certain conditions, the
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mezzanine loan lender may foreclose upon the pledged equity interests in the related Mortgage Loan borrower, which could result in a change of control with respect to the related Mortgage Loan borrower and a change in the management of the related Mortgaged Properties, and (d) if the related Mortgage Loan is accelerated, an enforcement action has been commenced and is continuing under the related Mortgage Loan, a bankruptcy proceeding has been commenced against the Mortgage Loan borrower, or the related Mortgage Loan becomes a specially serviced loan as a result of an event of default under the related Mortgage Loan, then the mezzanine loan lender has the right to purchase the related Mortgage Loan, in whole but not in part, for a price generally equal to the outstanding principal balance thereof, together with all accrued interest due thereon, plus any protective advances made by the related Mortgage Loan lender or its servicer and any interest thereon or on any monthly debt service advances, and plus certain fees and expenses payable to any servicer or trustee, but generally excluding any late charges, default interest, exit fees, spread maintenance, defeasance premiums or yield maintenance charges and prepayment premiums, and further excluding liquidation fees and/or workout fees if the purchase is effected within a specified period after the purchase option arises. In general, an event of default under the Mortgage Loan will trigger an event of default under the mezzanine loan. The holder of the mezzanine loan also has consent rights over certain modifications of the Mortgage Loan that adversely affect the mezzanine lender prior to an event of default under the related Mortgage Loan and certain limited consent rights over modifications of the related Mortgage Loan entered into in connection with a workout following an event of default under the related Mortgage Loan. The holder of the mezzanine loan may also have certain consent rights with respect to annual budgets, leases and alterations with respect to the related Mortgaged Property, the replacement of the property manager for the Mortgaged Property, and transfers and pledges of the Mortgage Loan to non-qualified entities. In addition, the Mortgage Loan lender may be prohibited under the intercreditor agreement from accepting a deed-in-lieu of foreclosure from the borrower until it has provided the mezzanine lender with prior written notice of such intention and given the mezzanine lender the opportunity to purchase the Mortgage Loan for a specified period of time prior to acceptance of such deed at the purchase price set forth in clause (d) of the second sentence of this paragraph. In some cases, upon completion of a foreclosure of the mezzanine loan, the non-recourse carveout guarantor and/or environmental indemnitor for the related Mortgage Loan may be released from liability under its related guaranty, and the foreclosing mezzanine lender may not be obligated to replace the guarantor and/or indemnitor with respect to some or all of its obligations. If the related mortgage borrower has a leasehold interest in the related Mortgaged Property, the mortgage lender may be required to provide certain additional notices to the mezzanine lender and to take certain actions to help preserve the leasehold interest, including cooperating with the mezzanine lender to effectuate a cure of a default on the part of the mortgage borrower under the related ground lease.
Permitted In Future (Secured Financing and Mezzanine and Similar Financing)
Except as described below under “—Additional Debt Financing For Mortgage Loans Secured by Residential Cooperatives”, all of the Mortgage Loans prohibit borrowers from incurring any additional mortgage indebtedness secured by the related Mortgaged Property without the consent of the lender. However, certain borrowers or their owners are permitted to incur mezzanine or similar financing secured by a pledge of all or a portion of an owner’s direct or indirect equity interests in the borrower in the future. The following table presents the principal conditions under which such financing may be incurred.
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Permitted Future Mezzanine Financing
Mortgage Loan/Property Portfolio Names | Mortgage Loan Cut-off Date Balance | % of Cut-off Date Pool Balance | Maximum Principal Amount Permitted | Other Lender Must Execute Intercreditor or Similar Agreement | Minimum Combined Debt Service Coverage Ratio of Mortgage Loan and | Maximum Combined LTV Ratio of Mortgage Loan and Other | Mortgage Lender Allowed to Require Rating Agency |
Queens’ MarketPlace(4) | $35,000,000 | 3.0% | N/A | Yes | N/A | 75.0% | Yes |
El Sol Brillante and Laguna Del Sol Apartments | $28,750,000 | 2.4% | N/A | Yes | 1.30x | 73.5% | Yes |
Coastal Village Apartments | $24,000,000 | 2.0% | N/A | Yes | 1.25x | 75.0% | Yes |
Hunterstone Apartments | $19,000,000 | 1.6% | N/A | Yes | 1.30x | 75.0% | Yes |
Nexus Town Center | $9,347,420 | 0.8% | N/A | Yes | 1.25x | 75.0% | Yes |
Gilbert Crossing | $7,033,000 | 0.6% | N/A | Yes | 1.10x | 85.0% | Yes |
1321 Harbor Bay Parkway(5) | $7,000,000 | 0.6% | N/A | Yes | 1.15x | 70.0% | Yes |
Staybridge Suites Indianapolis Airport(6) | $6,000,000 | 0.5% | $400,000 | No | 1.10x | N/A | No |
Bella Luna / San Lucas | $4,957,123 | 0.4% | N/A | Yes | 1.25x | 75.0% | Yes |
Comfort Suites – Near the Galleria | $4,332,758 | 0.4% | N/A | Yes | 1.66x | 65.0% | Yes |
Tieton Village(7) | $4,000,000 | 0.3% | N/A | Yes | 1.35x | 70.0% | Yes |
Big Lots Plaza(8) | $1,192,867 | 0.1% | N/A | N/A | N/A | N/A | N/A |
(1) | Indicates the maximum aggregate principal amount of the mortgage loan and the related mezzanine loan (if any) that is specifically stated in the Mortgage Loan documents and does not take account of any restrictions that may be imposed at any time by operation of any debt yield, debt service coverage ratio or loan-to-value ratio conditions. |
(2) | Debt service coverage ratios and loan-to-value ratios are to be calculated in accordance with definitions set forth in the related Mortgage Loan documents. Except as otherwise noted in connection with a Mortgage Loan, the determination of the loan-to-value ratio must be, or may be required by the lender to be, based on a recent appraisal. |
(3) | Indicates whether the conditions to the financing include (a) delivery of confirmation from the Rating Agencies that the proposed financing will not, in and of itself, result in the downgrade, withdrawal or qualification of the then-current rating assigned to any Class of Certificates and/or (b) acceptability of any related intercreditor or mezzanine loan documents to the Rating Agencies. |
(4) | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Queens’ MarketPlace, the loan documents provide that the lender may withhold its consent to any future mezzanine debt that results in, among other things, a combined debt yield of less than 7.5%. |
(5) | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as 1321 Harbor Bay Parkway, the loan documents provide that the lender may withhold its consent to any future mezzanine debt that results in, among other things, a combined debt yield of less than 8.0%. |
(6) | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Staybridge Suites Indianapolis Airport, the loan documents provide that the lender may withhold its consent to any future mezzanine debt that results in, among other things, a combined debt yield of less than 9.5%. |
(7) | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Tieton Village, the loan documents provide that the lender may withhold its consent to any future mezzanine debt that results in, among other things, a combined debt yield of less than 9.6%. |
(8) | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Big Lots Plaza, representing approximately 0.1% of the Cut-off Date Pool Balance, the Mortgage Loan documents permit a pledge of the sole member’s equity interest in the borrower subject to certain conditions, including: (i) the holder of the equity interest shall be an institutional lender regularly engaged in making such loans, (ii) the debt facility is secured by substantial amount of other collateral; and (iii) repayment of the debt facility is not specifically tied to the Mortgaged Property’s cash flow. |
Additional Debt Financing For Mortgage Loans Secured by Residential Cooperatives
With respect to mortgage loans secured by residential cooperative properties, many of the related borrowers have incurred additional indebtedness secured by the related Mortgaged Property. Such
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additional secured indebtedness in existence as of the Cut-offDate is expressly subordinate to the related cooperative Mortgage Loan included in the trust and is described on Annex A-1 to this free writing prospectus. The following table presents certain information with respect to existing subordinate mortgage indebtedness encumbering residential cooperative properties securing Mortgage Loans included in the trust.
Mortgage Loan Name | Mortgage Loan Cut-offDate Balance | Non-Trust Mortgage Loan Maximum Balance Allowed ($)(1) | Non-Trust Mortgage Loan | Total Cut-off Date Debt Balance ($)(3) | Total Maximum Debt Balance ($)(4) | Total Maximum Debt LTV Ratio (%)(4) | Mortgage Loan Interest Rate | Non-Trust Mortgage Loan Interest Rate | Total Maximum Debt U/W NCF DSCR(5) |
Baywoods of Annapolis | $16,500,000 | $5,000,000 | $0.00 | $16,500,000 | $21,500,000 | 37.7% | 4.700% | greater of 4.00% or 1MO LIBOR+2.75% until the Conversion Date, at which time the borrow has the option to continue to accrue interest at the variable rate or fix the rate at the 7 year UST plus 3.00% | 1.53x |
39-60 54th Street Owners, Inc. | $7,675,000 | $750,000 | $0.00 | $7,675,000 | $8,425,000 | 13.4% | 3.830% | greater of 3.90% or 1MO LIBOR+3.75% | 7.66x |
Mendicino Green Apartment Corp. | $5,295,400 | $250,000 | $0.00 | $5,295,400 | $5,545,400 | 26.0% | 3.470% | greater of 3.90% or 1MO LIBOR+3.75% | 4.12x |
230 Garth Road Owners, Inc. Chattel Mortgage(6) | $4,543,115 | $265,650 | $265,650 | $4,808,765 | $4,808,765 | 5.5% | 3.380% | 3.990% | 13.18x |
Karen Gardens Apartment Corp. | $3,650,000 | $500,000 | $0.00 | $3,650,000 | $4,150,000 | 27.1% | 3.570% | greater of 3.90% or 1MO LIBOR+3.75% | 3.10x |
Regency Park Owners Corp | $3,100,000 | $500,000 | $0.00 | $3,100,000 | $3,600,000 | 23.8% | 3.630% | greater of 3.90% or 1MO LIBOR+3.75% | 4.14x |
Nagle House, Inc. | $2,995,812 | $500,000 | $0.00 | $2,995,812 | $3,495,812 | 7.3% | 3.770% | greater of 4.00% or 1MO LIBOR+3.75% | 7.63x |
230 Tenants Corporation | $2,900,000 | $500,000 | $0.00 | $2,900,000 | $3,400,000 | 7.6% | 3.550% | greater of 3.90% or 1MO LIBOR+3.75% | 7.40x |
321 West 90th St. Owners Corp. – Aggregate(7) | $2,500,000 | $900,000 | $400,000 | $2,900,000 | $3,400,000 | 7.4% | 3.700% | greater of 3.90% or 1MO LIBOR+3.75%; 6.000% | 9.05x |
321 West 90th St. Owners Corp. – Second Priority LOC | $500,000 | $0.00 | greater of 3.90% or 1MO LIBOR+3.75% | ||||||
321 West 90th St. Owners Corp. – Chattel Mortgage | $400,000 | $400,000 | 6.000% | ||||||
Denn Owners Corporation | $2,236,684 | $250,000 | $0.00 | $2,236,684 | $2,486,684 | 22.3% | 3.880% | greater of 4.00% or 1MO LIBOR+3.75% | 3.43x |
Sea Breeze Town Houses Owners, Inc. | $2,000,000 | $100,000 | $0.00 | $2,000,000 | $2,100,000 | 29.3% | 3.730% | greater of 3.90% or 1MO LIBOR+3.75% | 4.15x |
Hartsdale Executive House, Inc. | $1,800,000 | $350,000 | $0.00 | $1,800,000 | $2,150,000 | 13.0% | 3.770% | greater of 3.90% or 1MO LIBOR+3.75% | 8.93x |
109-111 N. Broadway Apt. Corp. | $1,617,987 | $500,000 | $0.00 | $1,617,987 | $2,117,987 | 20.9% | 3.760% | greater of 4.00% or 1MO LIBOR+3.75% | 5.10x |
40 Prospect Park West Owners Corp. | $1,597,686 | $500,000 | $0.00 | $1,597,686 | $2,097,686 | 4.0% | 3.600% | greater of 3.90% or 1MO LIBOR+3.75% | 15.87x |
6 West 20th St. Tenants Corp. | $1,497,853 | $500,000 | $0.00 | $1,497,853 | $1,997,853 | 5.0% | 3.650% | greater of 4.00% or 1MO LIBOR+3.75% | 17.22x |
50-22 Owners Ltd. | $1,496,129 | $500,000 | $0.00 | $1,496,129 | $1,996,129 | 19.6% | 3.640% | greater of 3.90% or 1MO LIBOR+3.75% | 5.82x |
585 McLean Owners, Inc. | $1,400,000 | $500,000 | $0.00 | $1,400,000 | $1,900,000 | 36.4% | 3.630% | greater of 3.90% or 1MO LIBOR+3.75% | 3.27x |
12 West 17th St. Tenants' Corp. | $1,396,560 | $500,000 | $0.00 | $1,396,560 | $1,896,560 | 5.2% | 3.810% | greater of 3.90% or 1MO LIBOR+3.75% | 11.89x |
Waters at West End, Inc. | $1,221,493 | $500,000 | $0.00 | $1,221,493 | $1,721,493 | 22.6% | 3.840% | greater of 3.90% or 1MO | 5.67x |
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Mortgage Loan Name | Mortgage Loan Cut-offDate Balance | Non-Trust Mortgage Loan Maximum Balance Allowed ($)(1) | Non-Trust Mortgage Loan | Total Cut-off Date Debt Balance ($)(3) | Total Maximum Debt Balance ($)(4) | Total Maximum Debt LTV Ratio (%)(4) | Mortgage Loan Interest Rate | Non-Trust Mortgage Loan Interest Rate | Total Maximum Debt U/W NCF DSCR(5) |
166 West 76th Apartment Corp. | $1,096,839 | $500,000 | $0.00 | $1,096,839 | $1,596,839 | 6.2% | 3.820% | LIBOR+3.75% greater of 3.90% or 1MO LIBOR+3.75% | 11.24x |
Carroll Gardens Owners, Corp. | $1,000,000 | $250,000 | $0.00 | $1,000,000 | $1,250,000 | 20.4% | 3.800% | greater of 3.90% or 1MO LIBOR+3.75% | 3.78x |
170 East 92nd Street Owners, Inc. | $800,000 | $300,000 | $0.00 | $800,000 | $1,100,000 | 10.6% | 3.760% | greater of 3.90% or 1MO LIBOR+3.75% | 6.93x |
(1) Except for (A) the 230 Garth Road Owners, Inc. Chattel Mortgage and (B) the 321 West 90th St. Owners Corp. Chattel Mortgage, the Non-Trust Mortgage Loan Maximum Balance Allowed is calculated assuming that the non-trust mortgage loan has been fully advanced and the entire amount thereof is outstanding as of the Cut-off Date. For the 230 Garth Road Owners, Inc. Chattel Mortgage the Non-Trust Mortgage Loan Maximum Balance Allowed is the 230 Garth Road Owners, Inc. Chattel Mortgage’s outstanding principal balance of $265,650 as of March 19, 2015. For the 321 West 90th St. Owners Corp. Chattel Mortgage the Non-Trust Mortgage Loan Maximum Balance Allowed is the 321 West 90th St. Owners Corp. Chattel Mortgage’s outstanding principal balance of $400,000 as of the Cut-off Date.
(2) For the 230 Garth Road Owners, Inc. Chattel Mortgage the Non-Trust Mortgage Loan Balance is the 230 Garth Road Owners, Inc. Chattel Mortgage’s outstanding principal balance of $265,650 as of March 19, 2015.
(3) Except for the 230 Garth Road Owners, Inc. loan, the Total Cut-off Date Debt Balance is calculated using the Cut-off Date Principal Balance of the Mortgage Loan and the balance of the non-trust mortgage loan as of the Cut-off Date. For the 230 Garth Road Owners, Inc. loan, the Total Cut-off Date Debt Balance is calculated using the Cut-off Date Principal Balance of the Mortgage Loan and the 230 Garth Road Owners, Inc. Chattel Mortgage’s outstanding principal balance of $265,650 as of March 19, 2015.
(4) Except for the 230 Garth Road Owners, Inc. loan, the Total Maximum Debt Balance and the Total Maximum Debt LTV Ratio are calculated (i) using the Cut-off Date Principal Balance of the Mortgage Loan and (ii) assuming that the non-trust mortgage loan(s) has been fully advanced and the entire amount thereof is outstanding as of the Cut-off Date. For the 230 Garth Road Owners, Inc. loan, the Total Maximum Debt Balance and the Total Maximum Debt LTV Ratio are calculated (i) using the Cut-off Date Principal Balance of the Mortgage Loan and (ii) using the 230 Garth Road Owners, Inc. Chattel Mortgage’s outstanding principal balance of $265,650 as of March 19, 2015.
(5) Except for (A) the 230 Garth Road Owners, Inc. Chattel Mortgage, (B) the 321 West 90th St. Owners Corp. Chattel Mortgage and (C) Baywoods of Annapolis, the Total Maximum Debt U/W NCF DSCR is calculated (i) assuming that interest on the non-trust mortgage loan is accruing pursuant to the applicable loan document (with the applicable interest rate determined using LIBOR in effect as of June 1, 2015 and giving effect to any applicable interest rate floor), (ii) assuming that the non-trust mortgage loan has been fully advanced and the entire amount thereof is outstanding as of the Cut-off Date and (iii) assuming that any initial interest-only period for such non-trust mortgage loan has expired and the related borrower is required to make scheduled principal plus interest payments as set forth in the corresponding promissory note. For the 230 Garth Road Owners, Inc. Chattel Mortgage, the Total Maximum Debt U/W NCF DSCR is calculated based on the terms set forth in the loan documents pertaining to the 230 Garth Road Owners, Inc. Chattel Mortgage. For the 321 West 90th St. Owners Corp. Chattel Mortgage, the Total Maximum Debt U/W NCF DSCR is calculated based on the terms set forth in the loan documents pertaining to the 321 West 90th St. Owners Corp. Chattel Mortgage. For Baywoods of Annapolis the Total Maximum Debt U/W NCF DSCR is calculated (i) assuming that interest on the non-trust mortgage loan is accruing at a rate of 4.000% per annum on an actual/360 basis, (ii) assuming that the non-trust mortgage loan has been fully advanced and the entire amount thereof is outstanding as of the Cut-off Date and (iii) assuming that any initial interest-only period for such non-trust mortgage loan has expired and the related borrower is required to make payments of interest plus fixed payments of principal based on a 240 month straight-line amortization schedule.
(6) The Mortgaged Property securing the Mortgage loan identified on Annex A-1 to this free writing prospectus as the 230 Garth Road Owners, Inc. loan is subject to a subordinate chattel mortgage in the original principal amount of $750,000 (the “230 Garth Road Owners, Inc. Chattel Mortgage”). Simultaneously with the closing of the 230 Garth Road Owners, Inc. mortgage loan, the holder of the 230 Garth Road Owners, Inc. Chattel Mortgage (the “230 Chattel Mortgagee”) signed a Subordination and Estoppel Certificate pursuant to which, among other things, the 230 Chattel Mortgagee agreed that the 230 Garth Road Owners, Inc. Chattel Mortgage shall be subordinate in all respects to the 230 Garth Road Owners, Inc. mortgage loan.
(7) The Mortgaged Property securing the Mortgage loan identified on Annex A-1 to this free writing prospectus as the 321 West 90th St. Owners Corp. loan is subject to (A) a subordinate line of credit mortgage loan in the amount of $500,000 (the "321 West 90th St. Owners Corp. Second Priority LOC") and (B) a subordinate chattel mortgage in the original principal amount of $400,000 (the “321 West 90th St. Owners Corp. Chattel Mortgage”). Simultaneously with the closing of the 321 West 90th St. Owners Corp. mortgage loan, the holder of the 321 West 90th St. Owners Corp. Chattel Mortgage (the “321 Chattel Mortgagee”) signed a Subordination and Estoppel Certificate pursuant to which, among other things, the 321 Chattel Mortgagee agreed that the 321 West 90th St. Owners Corp. Chattel Mortgage shall be subordinate in all respects to the 321 West 90th St. Owners Corp. mortgage loan and 321 West 90th St. Owners Corp. Second Priority LOC.
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In addition, with respect to Mortgage Loans secured by residential cooperative properties, it is anticipated that additional subordinate indebtedness secured by the related Mortgaged Property may be incurred. For example:
· | The loan documents for the Mortgage Loans identified on Annex A-1 to this free writing prospectus as 230 Tenants Corporation, 6 West 20th St. Tenant Corp. and 12 West 17th St. Tenants’ Corp., collectively representing approximately 0.5% of the Cut-Off Date Pool Balance, permit the related borrower to incur additional future indebtedness secured by the related Mortgaged Property, subject to the satisfaction of various conditions, including that (a) the combined loan-to-value ratio of the Mortgage Loan included in the trust and the total of such additional secured indebtedness does not exceed the lesser of (x) twenty (20%) percent of the value of the Mortgaged Property as a residential cooperatively owned apartment building and (y) thirty-five (35%) percent of the value of the Mortgaged Property as a multi-family residential rental apartment building and (b) such additional secured indebtedness be expressly subordinate to the related cooperative Mortgage Loan included in the trust. |
In addition, with respect to each of the Mortgage Loans that are both sold to the Trust by National Cooperative Bank, N.A. and secured by residential cooperative properties, the Pooling and Servicing Agreement permits the applicable Master Servicer to grant consent to additional subordinate financing secured by the related cooperative property (even if such subordinate financing is prohibited by the terms of the related Mortgage Loan documents), subject to the satisfaction of certain conditions, including that (i) the maximum combined loan-to-value ratio not exceed 40% (based on the Value Co-op Basis of the related Mortgaged Property as set forth in an updated appraisal obtained in connection with the proposed indebtedness), (ii) the aggregate of proposed and existing subordinate financing secured by the related Mortgaged Property not exceed $7.5 million, (iii) the net proceeds of the subordinate debt be used principally for funding capital expenditures, major repairs or reserves, (iv) the subordinate mortgage loan is not permitted to have a stated maturity date that is prior to the maturity date of the related Mortgage Loan if the subordinate mortgage loan is not fully amortizing and (v) National Cooperative Bank, N.A. or any affiliate thereof that originates (in accordance with its underwriting standards for such loans) the subordinate mortgage loan, executes and delivers to the Custodian (on behalf of the Trustee) for inclusion in the mortgage file an intercreditor and subordination agreement with respect to such subordinate mortgage. “Value Co-op Basis” means, with respect to any residential cooperative property securing a Mortgage Loan, the value estimate reflected in the most recent appraisal obtained by or otherwise in the possession of the applicable Master Servicer determined as if the related Mortgaged Property is operated as a residential cooperative; in general, such value equals the gross sellout value of all cooperative units in the related Mortgaged Property (applying a discount as determined by the appraiser for rent regulated and rent controlled units), based in part on various comparable sales of cooperative apartment units in the market, plus the amount of the underlying debt encumbering the related Mortgaged Property. With respect to limited equity cooperatives (i.e., housing cooperatives in which eligible members purchase shares at below market prices and are subject to restrictions on the sale price for which units may be re-sold), the gross sellout value referenced in the preceding sentence is calculated without regard to any applicable sale price restrictions. The comparable sales considered in the appraisers’ estimates of gross sellout values may have occurred at properties where the cooperative entity’s underlying mortgage debt per cooperative unit was substantially more or less than that at the applicable Mortgaged Property. The appraisers generally made no adjustments to comparable sales statistics to account for any such differences, although monthly unit maintenance obligations may have been considered.
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However, the intercreditor agreements that in each instance govern the interaction between the mortgagee under the Mortgage Loan and the lender with respect to any such additional secured debt do not (as to existing additional subordinate debt) and are not likely to (as to future additional secured debt) contain “standstill” provisions in favor of the mortgagee under the Mortgage Loan. As a result, the lender under any such permitted additional debt could foreclose upon its lien and cause a default on the related Mortgage Loan, regardless of whether such Mortgage Loan was otherwise in default. See “Risk Factors—Risks Related to the Mortgage Loans—A Borrower’s Other Loans May Reduce the Cash Flow Available to the Mortgaged Property Which May Adversely Affect Distributions on Your Certificates; Mezzanine Financing Reduces a Principal’s Equity in, and Therefore Its Incentive to Support, a Mortgaged Property” in this free writing prospectus.
In each of the aforementioned cases, National Cooperative Bank, N.A. or one of its affiliates is likely to be the lender on such subordinate financing, although it is not obligated to provide such financing. In addition, the Mortgage Loans secured by residential cooperative properties do not restrict the pledge of direct equity interests in the related cooperative borrower in connection with the financing of cooperative apartment units. See “Risk Factors—Risks Related to the Offered Certificates—If any Master Servicer or any Special Servicer Purchases Certificates or Has Investments Related to a Borrower or Other Person, a Conflict of Interest May Arise Between Its Own Interests and Its Duties to the Trust Fund” and “—Various Other Securitization-Level Conflicts of Interest May Have an Adverse Effect on Your Offered Certificates—Conflicts Between the Trust Fund and the Mortgage Loan Sellers and Their Affiliates” in this free writing prospectus.
Other Additional Financing and Encumbrances
The Mortgage Loans generally permit a pledge of the same direct and indirect ownership interests in any borrower that could be transferred without lender consent. See “—Certain Terms of the Mortgage Loans—’Due-on-Sale’ and ‘Due-on-Encumbrance’ Provisions” above.
Some of the Mortgage Loans permit certain affiliates of the related borrower to pledge their indirect ownership interests in the borrower to an institutional lender providing a corporate line of credit or corporate credit facility as collateral for such corporate line of credit or corporate credit facility. The Mortgage Loan documents for such Mortgage Loans contain limitations on the amounts that such collateral may secure and prohibit foreclosure of such pledges unless such foreclosure would represent a transfer otherwise permitted under the Mortgage Loan documents but do not prohibit a change in control in the event of a permitted foreclosure. In particular, with respect to the fifteen largest Mortgage Loans:
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Country Club Center, representing approximately 2.3% of the Cut-off Date Pool Balance, the Mortgage Loan documents permit the pledge of direct or indirect, non-controlling ownership interest in any owner of borrower (other than the general partner of the borrower). |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Hall Office Park, representing approximately 2.2% of the Cut-off Date Pool Balance, the Mortgage Loan documents permit the guarantor (which has a 94% limited partnership interest in the borrower) to pledge up to 49% of its equity interest in the borrower as collateral for company financing, subject to certain conditions, including (i) the holder of such debt is an institutional lender; (ii) the debt secured by such pledge is also secured by substantial other collateral unrelated to the borrower or the Mortgaged Property; and |
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(iii) the repayment of the debt secured by such pledge is not specifically tied to the Mortgaged Property’s cash flow. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Dulles North Corporate Parks, representing approximately 2.1% of the Cut-off Date Pool Balance, the Mortgage Loan documents permit the pledge of indirect, non-controlling ownership interest in any owner of the borrower (but not a direct ownership interest in the borrower) to certain financial institutions,provided that the repayment of such loan or line of credit is not specifically tied solely to the subject property’s cash flow and that no such transfer will result in the change of control of the borrower, guarantor or property manager. |
In addition, the borrowers under some of the Mortgage Loans have incurred or are permitted to incur unsecured subordinate debt (in addition to trade payables, equipment financing and other debt incurred in the ordinary course) subject to the terms of the related Mortgage Loan documents. For example:
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Foothills Park Place, representing approximately 2.0% of the Cut-off Date Pool Balance, the Mortgage Loan documents permit future unsecured subordinate debt from affiliates up to $585,500. Such affiliated party loans are fully subordinate and payable only out of available excess cash flow.Subordination and standstill provisions were included with respect to the unsecured debt. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Baywoods of Annapolis, representing approximately 1.4% of the Cut-off Date Pool Balance, the related borrower has a revolving unsecured credit facility with National Cooperative Bank, N.A., in the amount of $1,000,000, the proceeds of which may be used by the related borrower to fund general operating and business expenses. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as 1321 Harbor Bay Parkway, representing approximately 0.6% of the Cut-off Date Pool Balance, the Mortgage Loan documents permit future unsecured subordinate debt from affiliates up to $70,000. Such affiliated party loans are fully subordinate and payable only out of available excess cash flow. Subordination and standstill provisions were included with respect to the unsecured debt. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Comfort Suites – Near the Galleria, representing approximately 0.4% of the Cut-off Date Pool Balance, the related franchisor gave the borrower $80,000 as a contribution toward the costs of improvements, which were completed prior to the loan closing. The borrower executed and delivered a promissory note to the franchisor obligating the borrower to pay $80,000 by January 23, 2020, plus interest equal to the prime rate plus 2%per annum. The note provides that no payment is due unless and until an event of default occurs under the related loan documents. The original principal amount is reduced by 20% on each anniversary of January 23, 2013,provided that no event of default occurs. If no event of default occurs, the remaining principal amount and all accrued interest will be waived and forgiven by the franchisor. On the date the loan |
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closed, the borrower deposited with the lender $101,000 to cover any amounts due under the note. |
Prospective investors should assume that all or substantially all of the Mortgage Loans permit their borrowers to incur a limited amount (generally in an amount not more than 5% of the original Mortgage Loan balance or an amount otherwise normal and reasonable under the circumstances) of trade payables, equipment financing and/or other unsecured indebtedness in the ordinary course of business or an unsecured credit line to be used for working capital purposes. In addition, certain of the Mortgage Loans allow the related borrower to receive unsecured loans from equity owners,provided that such loans are subject to and subordinate to the applicable Mortgage Loan.
Furthermore, direct and indirect preferred equity investments have been, or are permitted to be, made in the borrowers under certain of the Mortgage Loans. For example, with respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Norfolk Commerce Park, representing approximately 1.5% of the Cut-off Date Pool Balance, the sponsor of the related borrower reported that the related borrower issued a preferred equity investment entitling its holder, BJBL, LLC, to an internal rate of return of 18% on a preferred equity investment of approximately $6,200,000, and to the right, upon certain events of default, to take over control of the related borrower.
Net Cash Flow and Certain Underwriting Considerations
Underwritten Net Cash Flow generally includes cash flow (including any cash flow from master leases) adjusted based on a number of assumptions used by the Mortgage Loan Sellers. Each investor should review the assumptions described in Annex B to this free writing prospectus and make its own determination of the appropriateness of the assumptions used in determining Underwritten Net Cash Flow. See “Risk Factors—Risks Related to the Mortgage Loans—Debt Service Coverage Ratio and Net Cash Flow Information Is Based on Numerous Assumptions” and see “Summaries of the Fifteen Largest Mortgage Loans” in Annex A-3 to this free writing prospectus.
See “Certain Characteristics of the Mortgage Loans and Mortgaged Properties”, including the footnotes thereto, attached as Annex A-1 to this free writing prospectus for underwriting assumptions pertaining to lease income from tenants that were not paying rent or not in occupancy. See also “—Tenant or Other Third Party Matters” and “—Other Matters” in this free writing prospectus.For additional information related to calculation of Underwritten Net Cash Flow for Mortgage Loans secured by residential cooperative properties, see “Certain Characteristics of Mortgage Loans Secured by Residential Cooperatives” below.
Cash Management Agreements/Lockboxes
Eighty-three (83) of the Mortgage Loans, representing approximately 86.3% of the Cut-off Date Pool Balance, generally provide that rents, credit card receipts, accounts receivables payments and other income derived from the related Mortgaged Properties are (or, in the case of a springing arrangement, will be) subject to a cash management or lockbox arrangement.
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Annex A-1 to this free writing prospectus sets forth (among other things) the type of provisions (if any) for the establishment of a lockbox under the terms of each Mortgage Loan. The following is a description of each type of provision:
· | Hard/Upfront Cash Management. The related borrower is required to instruct the tenants and other payors (including any third party property managers) to pay all rents and other revenue directly to a lockbox account controlled by the applicable servicer on behalf of the Trust Fund. Funds are then swept into a cash management account controlled by the applicable servicer on behalf of the Trust and then applied by servicer in accordance with the related Mortgage Loan documents. This typically includes the payment of debt service and, in some cases, expenses at the related Mortgaged Property. Generally, excess funds may then be remitted to the related borrower. |
· | Hard/Springing Cash Management. The related borrower is required to instruct the tenants and other payors (including any third party property managers) to pay all rents and other revenue directly to a lockbox account controlled by the applicable servicer on behalf of the Trust Fund. Until the occurrence of a “trigger” event, which typically includes an event of default under the Mortgage Loan documents, such funds are forwarded to an account controlled by the related borrower or are otherwise made available to the related borrower. From and after the occurrence of such a “trigger” event, only the portion of such funds remaining after the payment of current debt service, the funding of reserves and, in some cases, expenses at the related Mortgaged Property are to be forwarded or otherwise made available to the related borrower or, in some cases, maintained in an account controlled by the servicer as additional collateral for the loan until the “trigger” event ends or terminates in accordance with the loan documentation. |
· | Soft/Upfront Cash Management. Revenue from the related Mortgaged Property is generally paid by the tenants and other payors to the related borrower or the property manager. The related borrower or property manager, as applicable, then forwards such funds to a lockbox account controlled by the applicable servicer on behalf of the Trust Fund. Funds are then swept into a cash management account controlled by the applicable servicer on behalf of the Trust and applied by the servicer in accordance with the related Mortgage Loan documents. This typically includes the payment of debt service and, in some cases, expenses at the related Mortgaged Property. Generally, excess funds may then be remitted to the related borrower. |
· | Soft/Springing Cash Management. Revenue from the related Mortgaged Property is generally paid by the tenants and other payors (including any third party property managers) to the related borrower or the property manager. The related borrower or property manager, as applicable, then forwards such funds to a lockbox account controlled by the applicable servicer on behalf of the Trust Fund. Until the occurrence of a “trigger” event, which typically includes an event of default under the Mortgage Loan documents, such funds are forwarded to an account controlled by the related borrower or is otherwise made available to the related borrower. In some cases, upon the occurrence of such a “trigger” event, the Mortgage Loan documents will require the related borrower to instruct tenants and/or other payors to pay directly into an account controlled by the applicable servicer on behalf of the Trust Fund. All funds held in such lockbox account controlled by the applicable servicer following such “trigger” event will be applied by the servicer in accordance with the related Mortgage Loan documents. From and after the occurrence of such a trigger event, only the portion of such funds remaining after the payment of current debt |
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service and, in some cases, expenses at the related Mortgaged Property are to be forwarded or otherwise made available to the related borrower. |
· | Springing (With Established Account). A lockbox account is established at origination. Revenue from the related Mortgaged Property is generally paid by the tenants and other payors to the related borrower or property manager. The Mortgage Loan documents provide that, upon the occurrence of a “trigger” event, which typically includes an event of default under the Mortgage Loan documents, the related borrower would be required to instruct tenants to pay directly into such lockbox account or, if tenants are directed to pay to the related borrower or the property manager, the related borrower or property manager, as applicable, would then forward such funds to a lockbox account controlled by the applicable servicer on behalf of the Trust Fund. Funds are then swept into a cash management account controlled by the servicer on behalf of the Trust and applied by the servicer in accordance with the related Mortgage Loan documents. This typically includes the payment of debt service and, in some cases, expenses at the related Mortgaged Property. Excess funds may then be remitted to the related borrower. |
· | Springing (Without Established Account). No lockbox account or agreement is established at origination. Revenue from the related Mortgaged Property is generally paid by the tenants and other payors to the related borrower or property manager. The Mortgage Loan documents provide that, upon the occurrence of a “trigger” event, which typically includes an event of default under the Mortgage Loan documents, a lockbox account controlled by the applicable servicer on behalf of the Trust Fund would be established and the related borrower would be required to instruct tenants to pay directly into such lockbox account or, if tenants are directed to pay to the related borrower or the property manager, the related borrower or property manager, as applicable, would then forward such funds to a lockbox account controlled by the applicable servicer on behalf of the Trust Fund. Funds are then swept into a cash management account controlled by the servicer on behalf of the Trust and applied by the servicer in accordance with the related Mortgage Loan documents. This typically includes the payment of debt service and, in some cases, expenses at the related Mortgaged Property. Excess funds may then be remitted to the related borrower. |
· | None. Revenue from the related Mortgaged Property is paid to the related borrower and is not subject to a lockbox account as of the Closing Date, and no lockbox account is required to be established during the term of the related Mortgage Loan. |
In connection with any hard lockbox, income deposited directly into the related lockbox account may not include amounts paid in cash and/or checks that are paid directly to the related property manager, notwithstanding requirements to the contrary. Furthermore, with respect to certain multifamily and hospitality properties considered to have a hard lockbox, cash, checks and “over-the-counter” receipts may be deposited into the lockbox account by the property manager. Mortgage Loans whose terms call for the establishment of a lockbox account require that the amounts paid to the property manager will be deposited into the applicable lockbox account on a regular basis. Lockbox accounts will not be assets of the Trust Fund. See the footnotes to Annex A-1 to this free writing prospectus for more information regarding lockbox provisions for the Mortgage Loans.
Hazard Insurance
Except to the extent that the insurance is to be maintained by a tenant or other third party or the borrower or a tenant is permitted to self-insure, each borrower under a
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Mortgage Loan is required to maintain all insurance required by the terms of the Mortgage Loan documents in the amounts set forth therein, which will be obtained from an insurer meeting the requirements of the Mortgage Loan documents. This includes a fire and hazard insurance policy with extended coverage. The coverage of each policy will generally be in an amount, subject to a deductible customary in the related geographic area, that is not less than the lesser of (a) the full replacement cost of the improvements that are security for the subject Mortgage Loan, with no deduction for depreciation, and (b) the outstanding principal balance owing on that Mortgage Loan, but in any event, in an amount sufficient to avoid the application of any coinsurance clause.
If, on the date of origination of a Mortgage Loan, a material portion of the borrower owned improvements on a Mortgaged Property was in an area identified in the Federal Register by the Federal Emergency Management Agency (“FEMA”) as having special flood hazards (and such flood insurance is required by FEMA and has been made available), the Mortgage Loan documents generally require flood insurance meeting the requirements of the current guidelines of the Federal Insurance Administration in an amount representing coverage of at least the lesser of (a) the outstanding principal balance of the Mortgage Loan and (b) the maximum amount of flood insurance available for the Mortgaged Property permitted by FEMA.
In some cases, the Mortgage Loans allow hazard insurance to be provided under a blanket insurance policy. Such a blanket insurance policy will also cover other real properties, some of which may not secure mortgage loans included in the Trust. As a result of total limits under any of those blanket policies, losses at other properties covered by the blanket insurance policy may reduce the amount of insurance coverage with respect to a property securing one of the loans in the Trust. In addition, certain Mortgage Loans provide that a significant or sole tenant (or, if applicable, a condominium association) may obtain third-party insurance with respect to the related Mortgaged Property or with respect to its building thereon or may self-insure and that such third-party insurance or self-insurance satisfies the insurance requirements of the related borrower.
See also representation and warranty nos. 18 and 31 in Annex C-1 and the exceptions thereto in Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus).
See “Servicing of the Mortgage Loans and Administration of the Trust Fund—Maintenance of Insurance” in this free writing prospectus for a description of the obligations of the Master Servicers and the Special Servicers with respect to the enforcement of the obligations of the borrowers under the Mortgage Loan documents and other matters related to the maintenance of insurance.
Litigation Considerations
There may be material pending or threatened legal proceedings against, or other past or present criminal or material adverse regulatory circumstances experienced by, the borrowers, their sponsors and managers of the Mortgaged Properties and their respective affiliates. In addition, the Mortgaged Property may be subject to ongoing litigation. For example:
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Hutchinson Metro Center I, representing approximately 8.5% of the Cut-off Date Pool Balance, one of the sponsors, Hutch Realty Partners, LLC (“Hutch”), is a named defendant in a personal injury case. The plaintiff was injured when he fell from a roof while installing aluminum wallboard for |
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a subcontractor at a construction site on a property other than the Mortgaged Property owned by Hutch. In December 2014, following a lengthy damages trial, the jury returned a verdict of $60,087 for past medical expenses and $62 million for past and future pain and suffering. The defendant, viewing the pain and suffering award as excessive in light of the injuries actually suffered, appealed, and was granted a stay of the judgment. During that process, the plaintiff made the initial settlement demand for $17 million, which is the amount of insurance available from the first layer of Hutch’s syndicated policy. The appeals court required a bond in that amount for Hutch to proceed with the appeal. The parties (Hutch’s insurer and the plaintiff’s counsel) are still engaged in settlement discussions. Hutch’s insurer has offered $5 million and the plaintiff’s latest counteroffer is $11 million, which is within insurance limits. The guarantor (Joseph Simone) has a stated net worth of $240 million and liquidity of $25 million. |
In addition, certain indirect, non-controlling owners (Michael Contillo and Joe Deglomini, Sr.), who are family members of the principals in the owner of the related borrower, pled guilty to falsifying business records in 1994, including payment of a $1,000,000 fine. Their aggregate ownership interest in the borrower is approximately 0.57%.
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Country Club Center, representing approximately 2.3% of the Cut-off Date Pool Balance, the loan sponsor (Jeffrey Soffer) was one of several co-defendants in a $100 million wrongful death action filed in Florida in January 2014 related to a 2012 helicopter crash in the Bahamas. The lawsuit sought to undo a previous insurance settlement, among other things, and no additional insurance coverage is available for further damages. The lawsuit was dismissed without prejudice in August 2014, however, the plaintiff has appealed the ruling. Further, Jeffrey Soffer is a co-defendant in one or more breach of contract actions related to unpaid commissions aggregating to approximately $12 million, related to various projects. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A 1 to this free writing prospectus as Summer Bend Apartments, representing approximately 1.5% of the Cut-off Date Pool Balance, the sponsor is currently subject to fraud related litigation in connection with a dispute over the alleged dilution of investment shares in an entity controlled by the sponsor. The sponsor and the plaintiff continue to engage in settlement discussions. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Brickyard Square, representing approximately 1.0% of the Cut-off Date Pool Balance, one of the two non-recourse carveout guarantors, Neal Shalom (“NS”), is a defendant in a civil litigation in New Jersey, which was filed in December 2013. El Sid Properties, LLC (“El Sid”) sued NS in connection with Doremus Newark, LLC (“Doremus Newark”), a joint venture between El Sid and Equity Industrial Partners Corp (“EIP”), an entity in which NS is a principal, alleging that EIP and certain other affiliates and principals (including NS) (i) caused the fraudulent and wrongful diversion of proceeds from a portfolio refinancing, cross collateralized by a property owned by Doremus Newark as well as other properties in which El Sid had no beneficial interest, (ii) misallocated liabilities, costs and expenses to the Doremus Newark entity, and (iii) engaged in acts of self-dealing at the expense of the Doremus Newark venture. The plaintiff is demanding, among other things, unspecified compensatory damages and punitive damages against all defendants, the appointment of a custodian to manage the affairs of |
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Doremus Newark and its parent, and a full accounting of the defendants’ assets. In February 2014, the defendants filed an answer denying any wrongdoing and filed a number of counterclaims against El Sid alleging, among other things, El Sid’s misconduct under the Doremus Newark organizational documents. In September 2014 a court appointed special fiscal agent produced a report finding that the vast majority of the proceeds received by Doremus Newark were properly accounted for but expressed no opinion on the allocation of debt and liabilities among the various entities as it was beyond the scope of the court appointed assignment. The Mortgage Loan documents contain a carveout for any losses resulting from the lawsuit. |
In addition, see also representation and warranty no. 15 in Annex C-1 to this free writing prospectus and the exceptions thereto in Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus). See also “—Default History, Bankruptcy Issues and Other Proceedings” below.
Default History, Bankruptcy Issues and Other Proceedings
Certain of the borrowers, principals of the borrowers and other entities under the control of such principals or single tenants at the related Mortgaged Properties or in certain cases a Mortgaged Property that secures a Mortgage Loan are, or previously have been, parties to bankruptcy proceedings, foreclosure proceedings, deed-in-lieu of foreclosure transactions and/or mortgage loan workouts resulting from mortgage loan defaults, which in some cases involved a Mortgaged Property that secures a Mortgage Loan to be included in the Trust Fund. For example:
· | With respect to thirty-seven (37) of the Mortgaged Properties identified on Annex A-1 to this free writing prospectus as Cathedral Place, Queens’ MarketPlace, Country Club Center, Hall Office Park, Norfolk Commerce Park, Summer Bend Apartments, Riverside Technology Park A & B, Shops at Doral, Brickyard Square, Dos Santos Apartments, Villa Bella, San Mateo Apartments, Brittany Bay II, Cathedral Place – Parking, Indiana Village, Athens Gate Apartments, Sand Pebble Apartments, Gilbert Crossing, 1321 Harbor Bay Parkway, Peppertree Lane Apartments, Staybridge Suites Indianapolis Airport, Green Acres MHP, Walgreens – Richmond Heights, Rivertown Center, Bella Luna / San Lucas, Seacoast Self Storage, Lake Lucina Shopping Center, East Haven Self Storage, Sycamore Terrace, Shackelford Center, De La Cruz Professional Center, Folcroft Self Storage, Sedona Peak Apartments, Wickham Park Commons, Shops of Orland Park, Gillespie Field Business Park and Hanna Shoppes, collectively representing approximately 30.0% of the Cut-off Date Pool Balance, (a) within the last ten (10) years, related borrowers, sponsors and/or key principals (or affiliates thereof) have previously (i) sponsored, been a key principal with respect to, or been a payment or non-recourse carveout guarantor on mortgage loans secured by, real estate projects (including in some such cases, the particular Mortgaged Property or Properties referenced above in this sentence) that became the subject of foreclosure proceedings or a deed-in-lieu of foreclosure or bankruptcy proceedings or directly or indirectly secured a real estate loan or a real estate-related mezzanine loan that was the subject of a discounted payoff, or (ii) been the subject of personal bankruptcy proceedings, (b) the Mortgage Loan refinanced a prior loan secured by, or a mezzanine loan secured by interests in the owner of, the related Mortgaged Property which prior loan was the subject of a maturity default, a maturity extension or a discounted payoff, short sale or other restructuring, (c) the related Mortgaged Property was acquired by the related |
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borrower or an affiliate thereof through foreclosure or a deed-in-lieu of foreclosure, as part of an REO transaction, at a foreclosure sale or out of receivership, or (d) the Mortgaged Property has been or currently is involved in a borrower, principal or tenant bankruptcy. |
See “Risk Factors—Risks Related to the Mortgage Loans—Prior Bankruptcies or Other Proceedings May Be Relevant to Future Performance” in this free writing prospectus.
In particular, with respect to the fifteen largest Mortgage Loans or related groups that, if aggregated, would be of comparable size:
· | With respect to the Mortgage Loans secured by the Mortgaged Properties identified on Annex A-1 to this free writing prospectus as Cathedral Place and Cathedral Place – Parking, collectively representing approximately 4.2% of the Cut-off Date Pool Balance, entities related to the sponsors of the related borrower were involved in loan defaults in two separate instances that resulted in a foreclosure or a receiver being appointed. |
· | With respect to the Mortgage Loans secured by the Mortgaged Properties identified on Annex A-1 to this free writing prospectus as Dos Santos Apartments, San Mateo Apartments, Athens Gate Apartments, Sand Pebble Apartments and Sedona Peak Apartments, collectively representing approximately 3.2% of the Cut-off Date Pool Balance in the aggregate, affiliates of the sponsor (Richard Aguilar) have been separately involved in Chapter 11 bankruptcy filings on behalf on behalf of three borrowers as described herein. A loan secured by a Dallas, Texas multifamily project suffered a maturity default in September 2008 resulting from leasing difficulties. The related lender filed to foreclose in July 2010, and the related borrower (managed by Richard Aguilar) filed Chapter 11 proceedings in September 2010. The reorganization plan was approved in February 2012, which provided for extension and $100,000 payment at time of sale for prior default interest claims. The property was sold in November 2012 and all claims were fully paid. A loan secured by a Houston, Texas multifamily project suffered a maturity default in August 2007 due to declining occupancy. The related lender filed to foreclose in November 2009, and the related borrower (managed by Richard Aguilar) filed Chapter 11 proceedings at that time. The reorganization plan was approved in June 2010, which provided for extension and additional principal payments in the second year of extension. The related lender agreed to a discounted payoff of the note to a third party in October 2012, and the related borrower purchased the note for $100,000 additional consideration in November 2012. Approximately $30,000 of outstanding claims remain to be paid in July 2015. A loan secured by a multifamily project in Ft. Worth, Texas matured in March 2008, but was successively extended with principal payments until March 2011. The loan was sold to a hedge fund, which filed to foreclose in August 2011. After litigation concerning an alleged deed-in-lieu and cash settlement, the hedge fund successfully foreclosed the property in February 2012 and sued the sponsors for the deficiency. The related borrower (managed by Richard Aguilar) filed Chapter 11 proceedings in April 2012 and filed a counterclaim against the hedge fund. The parties settled all claims in August 2013. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Queens’ MarketPlace, representing approximately 3.0% of the Cut-off Date Pool Balance, the related borrower was involved in a prior discounted payoff in connection with a $57 million construction loan at the related property in 2011 which resulted in a $24.1 million taxable debt forgiveness. In addition, affiliates of one carveout guarantor (Waikoloa Development |
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Co.) were involved in a 1992 construction loan default in connection with a Hawaii hotel project. Affiliates of another carveout guarantor (Seligman & Associates, Inc.) were involved in 4 loan maturity defaults between 2007 and 2012 which were ultimately modified with Seligman & Associates, Inc.’s agreeing to be added as a carveout guarantor as part of the modification. With respect to two of these loans, however, the related properties were ultimately the subject of a deeds-in-lieu. Further, an affiliate of the sponsors (Transcontinental Corporation and Bass Brothers) filed for bankruptcy in 2008 in connection with a Henderson, Nevada master planned community. In addition, a mortgage company affiliate of another sponsor (Seligman & Associates, Inc.) was the subject of an involuntary bankruptcy proceeding in 1980 that was converted to a Chapter 11 reorganization. The bankruptcy was closed in December 1984. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Country Club Center, representing approximately 2.3% of the Cut-off Date Pool Balance, affiliates of the loan sponsor (Jeffrey Soffer) filed for Chapter 11 bankruptcy protection in mid-2009 (later converted to a Chapter 7 bankruptcy at the end of 2009) from the failure of the Fontainebleau Las Vegas project. The project’s funding was disrupted by the Lehman bankruptcy in 2009. The bankruptcy court approved a comprehensive settlement in November 2013, but certain actions by the Chapter 7 trustee were excluded from the scope of the settlement. The Chapter 7 trustee’s lawsuits allege fraudulent conveyance, breach of fiduciary duty, mismanagement of the project and intentional misrepresentations. The Chapter 7 trustee reached a settlement with Mr. Soffer and his affiliates in December 2014 and the case was dismissed with prejudice in February 2015. The settlement included a bar of further pending lawsuits and payment by Mr. Soffer of approximately $83 million, a substantial portion of which is being paid by insurance policies. In addition, Jeffrey Soffer was also a co-defendant in an action to enforce a $40 million guaranty delivered in connection with a loan secured by the Town Square shopping center located in Las Vegas, Nevada, which loan went into default in March 2009. After the related lenders foreclosed on that property, they sought a deficiency judgment against Mr. Soffer. The court found that Mr. Soffer was obligated to the lenders under the guaranty but referred the matter to a special master to assess the amount of damages. The case was settled with the lender through a sale of the debt by an entity affiliated with Mr. Soffer. |
Further, four affiliates of the 50% owner in the borrower (Cabi Holdings, Inc.) were involved in mortgage loan defaults that resulted in the related borrower’s filing for Chapter 11 bankruptcy. The projects included (i) a residential and commercial condominium project in Miami, Florida where the lending syndicate’s refusal to restructure unit release prices prompted a 2009 bankruptcy filing that resulted in a negotiated settlement; (ii) a mixed use condominium tower in Miami, Florida where the inability to refinance the property at maturity prompted a 2010 bankruptcy filing that resulted in the debt being reorganized and a full repayment of the debt in December 2014; (iii) a commercial marina project in Fort Lauderdale, Florida where the inability to refinance the property at maturity prompted a 2010 bankruptcy filing that resulted in a settlement involving an agreed sale; and (iv) an office building in Miami Beach, Florida where the inability to refinance the property at maturity prompted a 2010 bankruptcy filing that resulted in a settlement involving an agreed sale.
In addition, the principals of Cabi Holdings, Inc. (“Cabi”) defaulted on a $1.5 billion real estate loan in 2008 that had been obtained to acquire a portfolio of 33 office
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properties in the Los Angeles, California area. Due to the economic downturn, the principals were unable to make scheduled principal payments that they had personally guaranteed, and control was eventually relinquished to one of the mezzanine lenders in lieu of foreclosure. The Cabi principals filed a lawsuit in 2008 alleging that the guarantees were loss guarantees rather than payment guarantees, but that litigation was resolved when the principals agreed to drop any claims against the lenders, and the lenders agreed not to pursue the guarantees.
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Hall Office Park, representing approximately 2.2% of the Cut-off Date Pool Balance, the sponsor (Craig Hall) and various affiliates filed for reorganization under Chapter 11 bankruptcy laws between during 1985-1993. In addition, affiliates of the sponsor (Craig Hall) were involved in prior mortgage loan defaults resulting in (i) two discounted payoffs in connection with two separate Michigan apartment complexes in February 2011 and April 2011, respectively, (ii) a deed in lieu in connection with a residential development project in Napa County, California in October 2010, and (iii) a workout in connection with an office building in August 2010, subsequent to which the related loan was paid in full in 2014. |
See also representation and warranty nos. 41 and 42 in Annex C-1 and the exceptions thereto in Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus).
Tenant or Other Third Party Matters
Described below is certain additional factual information regarding tenants among the five (5) largest tenants (by net rentable area leased) at the Mortgaged Properties securing the Mortgage Loans and certain other third parties. See also “Summaries of the Fifteen Largest Mortgage Loans” attached as Annex A-3 to this free writing prospectus.
· | Eleven (11) of the Mortgaged Properties, identified on Annex A-1 to this free writing prospectus as Dulles North Corporate Parks – Dulles North Corporate Park 5, IRG – Ellsworth Bailey Saratoga – Saratoga II, IRG – Ellsworth Bailey Saratoga – Saratoga I, CVS – Lynn, MA, 1321 Harbor Bay Parkway, 8211 Town Center Drive, Walgreens – Duncanville, TX, Walgreens – Richmond Heights, Walgreens – Milwaukee, Haggen Food & Pharmacy and Walgreens – Warrensburg, MO, collectively representing approximately 5.2% of the Cut-off Date Pool Balance in the aggregate by allocated loan amount, are each either wholly owner-occupied or 100% leased to a single tenant. See “Risk Factors—Risks Related to the Mortgage Loans—Tenant Concentration Increases the Risk That Cash Flow Will Be Interrupted, Which Could Reduce Distributions on Your Certificates” and “—Renewal, Termination and Expiration of Leases and Reletting Entails Risks That May Adversely Affect Your Investment” in this free writing prospectus, and Annex A-1 to this free writing prospectus. |
· | Ten (10) of the Mortgaged Properties, identified on Annex A-1 to this free writing prospectus as 150 Royall Street, Queens’ MarketPlace, Riverside Technology Park A&B, Brickyard Square, Causeway Corporate Centre, Lakeside Plaza, Rivertown Center, Cooperstown Commons Shopping Center, Shackelford Center and Wickham Park Commons, collectively representing approximately 10.8% of the Cut-off Date Pool Balance in the aggregate by allocated loan amount, have significant tenants that have renewed leases or have taken possession of the space demised under the related lease with the related borrower, but have not yet commenced payments of |
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rent under the related lease, or have tenants that have executed leases, but have not taken possession or commenced payment of rent, have tenants that are in a buildout phase and have not taken occupancy, have tenants that are expanding their space but have not commenced payment of the additional rent, have tenants that renewed leases that provide free rent and have not commenced payment of rent, or have subleases in place that can increase vacancy risks. In certain circumstances, an escrow reserve related to free rent periods and tenant improvement costs and leasing commissions due in connection with such leases was funded at closing. See Annex A-1 to this free writing prospectus and the accompanying footnotes for additional information with respect to these Mortgage Loans. |
· | Seven (7) of the Mortgaged Properties, identified on Annex A-1 to this free writing prospectus as Brickyard Square, IRG – Ellsworth Bailey Saratoga – Saratoga I, 8211 Town Center Drive, Walgreens – Duncanville, TX, Cooperstown Commons Shopping Center, Walgreens – Milwaukee and Walgreens – Warrensburg, MO, collectively representing approximately 3.0% of the Cut-off Date Pool Balance in the aggregate by allocated loan amount, have certain tenants at the related Mortgaged Properties, hotel franchisors, homeowner’s associations, other condominium unit owners or other third parties that hold purchase options, rights of first refusal or rights of first offer to purchase their related pad site or, in some cases, the related Mortgaged Property. See “Yield and Maturity Considerations” in this free writing prospectus. See also representation and warranty no. 8 in Annex C-1 and the exceptions thereto in Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus). |
Lease Terminations and Expirations
Expirations. See Annex A-1 to this free writing prospectus for tenant lease expiration dates for the five (5) largest tenants (by net rentable area leased) at each applicable Mortgaged Property and Annex A-3 for lease expirations for the five (5) largest tenants (by economic rent) among the top fifteen (15) Mortgage Loans. Whether or not any of the five (5) largest tenants at a particular Mortgaged Property have leases that expire before the maturity of the related Mortgage Loan, there may be a significant percentage of leases at a particular Mortgaged Property that expire in a single calendar year, a rolling 12-month period or prior to the maturity of a Mortgage Loan. Furthermore, some of the Mortgaged Properties have significant leases or a significant concentration of leases that expire before, or shortly following, the maturity of the related Mortgage Loan. In addition, certain other Mortgaged Properties may have a significant portion of the leases that expire or can be terminated in a particular year, or portion thereof, at the related Mortgaged Property. Prospective investors are encouraged to review the charts entitled “Major Tenants” and “Lease Expiration Schedules” for the fifteen largest Mortgage Loans presented on Annex A-3 to this free writing prospectus, in particular those related to the Mortgaged Properties identified on Annex A-1 to this free writing prospectus as Hutchinson Metro Center I, Cathedral Place, 150 Royall Street, Queens’ MarketPlace, Country Club Center, Parkway Crossing East Shopping Center, Olmsted Plaza Shopping Center, Hall Office Park, Dulles North Corporate Parks, Foothills Park Place and Smiths Medical.
Terminations. Leases often give tenants the right to terminate the related lease or abate or reduce the related rent for various reasons or upon various conditions, including (i) if the borrower for the applicable Mortgaged Property allows uses at the Mortgaged Property in violation of use restrictions in current tenant leases, (ii) if the borrower, a prior landlord or any of their respective affiliates owns other properties within a certain radius of the Mortgaged Property and allows uses at those properties in violation of use restrictions,
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(iii) if the related borrower fails to provide a designated number of parking spaces, (iv) if there is construction at the related Mortgaged Property or an adjacent property (whether or not such adjacent property is owned or controlled by the borrower or any of its affiliates) that may interfere with visibility or a tenant’s use of the Mortgaged Property, (v) upon casualty or condemnation with respect to all or a portion of the Mortgaged Property that renders such Mortgaged Property unsuitable for a tenant’s use or that occurs during a specified period prior to the end of the subject lease or if the borrower fails to rebuild such Mortgaged Property within a certain time, (vi) if a tenant’s use is not permitted by zoning or applicable law, (vii) if an anchor, shadow anchor or other significant tenant or a certain percentage of tenants at or near the applicable Mortgaged Property ceases operations, (viii) if the landlord cannot satisfy a tenant’s expansion option, or (ix) if the landlord defaults on its obligations under the lease.
In some cases, a lease may be unilaterally terminated by the related tenant for no particular reason. We cannot assure you that all or any of the borrowers will comply with their lease covenants or such third parties will act in a manner required to avoid any termination and/or abatement rights of the related tenant.
Identified below are certain other termination rights or situations in which the tenant may cease to occupy its leased space:
· | Certain tenants may have the right to terminate the related lease or abate or reduce the related rent if the related borrower violates covenants under the related lease or if third parties take certain actions that adversely affect such tenants’ business or operations. |
· | Certain leases may permit the affected tenants to terminate their leases or abate rent prior to the stated lease expiration date for no reason after a specified period of time following commencement of the lease and/or solely upon notice to the landlord. |
· | Certain of the Mortgaged Properties may have tenants that sublet a portion of their space or may intend to sublet out a portion of their space in the future. |
· | Certain of the tenant leases for the retail Mortgaged Properties permit the related tenant to terminate its leases and/or abate or reduce rent if the tenant fails to meet certain sales targets or other business objectives for a specified period of time. We cannot assure you that all or any of these tenants will meet the sales targets or business objectives required to avoid any termination and/or abatement rights. |
· | Several tenant leases for the retail Mortgaged Properties permit the related tenant to terminate its lease and/or abate or reduce rent if another specific tenant vacates its space or occupancy at the subject Mortgaged Property falls below a specified level. |
· | Further, certain of the tenant leases for the other retail Mortgaged Properties may permit affected tenants to terminate their leases if a tenant at an adjacent or nearby property terminates its lease or goes dark. |
· | Certain tenant leases permit the tenant to go dark and, in some cases, a Mortgaged Property has dark space that is no longer occupied by the tenant even though the tenant continues to pay rent. |
· | Certain Mortgaged Properties may be leased in whole or in part to government-sponsored tenants whose ability to pay rent depends on appropriations and some of whom have the right to cancel their leases at any time because of lack of appropriations. |
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See Annex A-1 to this free writing prospectus and the accompanying footnotes for information regarding certain termination options held by the five (5) largest tenants (by net rentable area leased) at each Mortgaged Property. Prospective investors are also encouraged to review the charts entitled “Major Tenants” and “Lease Expiration Schedules” for the fifteen largest Mortgage Loans presented on Annex A-3 to this free writing prospectus, in particular those related to the Mortgaged Properties identified on Annex A-1 to this free writing prospectus as Hutchinson Metro Center I, Cathedral Place, 150 Royall Street, Queens’ MarketPlace, Olmsted Plaza Shopping Center, Hall Office Park and Smiths Medical.
Other Matters
Described below is certain additional factual information regarding other matters at the Mortgaged Properties securing the Mortgage Loans:
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Hutchinson Metro Center I, representing approximately 8.5% of the Cut-off Date Pool Balance, the subject property has been granted a property tax subsidy and exemption pursuant to a New York Industrial & Commercial Incentive Program (“ICIP”) which commenced in 2015 and is scheduled to end in 2029. The ICIP provides real property tax benefits, a partial exemption from, or abatement of, real property taxes for varying periods, up to a maximum of 25 years, to eligible industrial or commercial buildings that are constructed, expanded, modernized, rehabilitated, or otherwise physically improved. The estimated unabated property tax expense for the 2015/2016 assessment year was $2,654,593. The underwritten property tax expense of $1,354,875 is based on the unabated tax expense for the 2015 calendar year, less the net present value of tax savings over the loan term. The taxes are projected to increase from the current level to $2,792,875 by the time the loan matures. According to the leases, most tax increases may be passed through to the tenants (over a base-year stop) at the related Mortgaged Property. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as El Sol Brillante and Laguna Del Sol Apartments, representing approximately 2.4% of the Cut-off Date Pool Balance, eight units in one of the 68 buildings at the Mortgaged Property were destroyed by fire prior to the loan closing date, and are not yet being rented out to tenants. Insurance is covering the cost of repair and rental loss. The property condition assessment estimates the cost of repair to be $683,756. The Mortgage Loan has been structured with a holdback in the amount of 125% of the cost estimate ($854,695) to complete the reconstruction of the eight units. Pursuant to the Mortgage Loan documents, repairs are to be completed within twelve months of the securitization closing date. The eight units were underwritten as vacant. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Smiths Medical, representing approximately 1.9% of the Cut-off Date Pool Balance, the largest tenant, Smith’s Medical ASD, Inc., entered into an agreement with the borrower to lease the space currently leased to the second largest tenant, Brocade Communications Systems, Inc., in January 2016. Brocade Communications Systems, Inc. agreed to terminate its lease on December 31, 2015 in exchange for the full gross abatement on its space for the remainder of the year. The borrower reserved the remaining abatement amount with the lender, which amount will be released to the borrower on a monthly basis. In addition, Smiths Medical ASD, Inc. is obligated to lease any |
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rentable space in the building as it becomes available during the course of its current lease term through January 31, 2028. Smith’s Medical ASD, Inc. has a one-time termination option on July 31, 2025 (3 months past loan maturity), requiring 12 months’ notice and a termination payment of up to $2.047 million. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Magnolia Marketplace, representing approximately 1.6% of the Cut-off Date Pool Balance, the Mortgaged Property is part of the Magnolia Economic Development District, pursuant to which bonds have been issued for the purpose of paying costs of certain capital improvements for the Mortgaged Property, the obligations of which will be reimbursed through sales taxes generated by the Mortgaged Property, and under which the borrower will be required to submit semi-annual reports with respect to the financial performance of the Mortgaged Property. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Norfolk Commerce Park, representing approximately 1.5% of the Cut-off Date Pool Balance, an entity owned by the sponsor of the related Delaware statutory trust borrower acts as master tenant under a master lease, which master lease requires the master tenant to pay 100% of all space rental income received by the master tenant under any space leases to the borrower. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Jackson Square Apartments, representing approximately 1.1% of the Cut-off Date Pool Balance, the related Mortgaged Property is expected to undergo renovations, which will include repaving the parking lot, repairing and painting the exterior of the Mortgaged Property and updating the common areas. On the origination date of the Mortgage Loan, the borrower reserved approximately $1,052,890 with respect to the planned renovations. See “Risk Factors—Risks Related to the Mortgage Loans—Risks Related to Construction, Redevelopment and Renovation at the Mortgaged Properties” and “—Appraisals May Not Accurately Reflect the Value of the Mortgaged Properties” in this free writing prospectus. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as TownePlace Suites St. George by Marriott, representing approximately 0.7% of the Cut-off Date Pool Balance, the fee owner borrower leased the related Mortgaged Property to an affiliate under an operating lease. The TownePlace Suites St. George by Marriott Mortgage Loan is secured by both the fee owner's and the operating lessee's interest in the related Mortgaged Property. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Austin Heights Shopping Center, representing approximately 0.5% of the Cut-off Date Pool Balance, the related Mortgaged Property is owned by a Delaware statutory trust. The borrower, as lessor, has master leased the entire Mortgaged Property to a wholly-owned affiliate, as lessee. The rent payable under the master lease is equal to the rents collected from the sub-tenants at the Mortgaged Property. The master lessee is a party to the related deed of trust and assignment of leases and rents for the purpose of encumbering its leasehold interest in the Mortgaged Property as security for such Mortgage Loan. |
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Assessments of Property Value and Condition
Appraisals
In connection with the origination or acquisition of each Mortgage Loan or otherwise in connection with this offering, an appraisal was conducted in respect of the related Mortgaged Property by an independent appraiser that was state-certified and/or a member of the Appraisal Institute or an update of an existing appraisal was obtained. In each case, the appraisal complied, or the appraiser certified that it complied, with the real estate appraisal regulations issued jointly by the federal bank regulatory agencies under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended. In general, those appraisals represent the analysis and opinion of the person performing the appraisal and are not guarantees of, and may not be indicative of, present or future value. We cannot assure you that another person would not have arrived at a different valuation, even if such person used the same general approach to and same method of valuing the property or that different valuations would not have been reached separately by the Mortgage Loan Sellers based on their internal review of such appraisals. The appraisals obtained as described above sought to establish the amount a typically motivated buyer would pay a typically motivated seller. Such amount could be significantly higher than the amount obtained from the sale of a Mortgaged Property under a distress or liquidation sale. Information regarding the values of the Mortgaged Properties as of the Cut-off Date is presented in this free writing prospectus for illustrative purposes only and, unless otherwise specified, reflects calculations based on the “as-is” appraised value (or, (i) in the case of residential cooperative mortgage loans, based upon the appraised value of such property assuming such property is operated as a residential cooperative, (ii) in the case of the Mortgaged Properties identified on Annex A-1 to this free writing prospectus as Jackson Square Apartments and 1321 Harbor Bay Parkway, securing approximately 1.1% and 0.6%, respectively, of the Cut-off Date Pool Balance by allocated loan amount, based upon the “as-completed” or “as-stabilized” valuation in the related appraisal, in each case. None of these appraisals are more than fifteen (15) months old as of the Cut-off Date. See “Risk Factors—Risks Related to the Mortgage Loans—Appraisals May Not Accurately Reflect the Value of the Mortgaged Properties” and “—Residential Cooperative Properties Have Special Risks” in this free writing prospectus. See also representation and warranty no. 45 in Annex C-1 and the exceptions thereto in Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus).
Environmental Assessments
Each of the Mortgaged Properties securing the Mortgage Loans was subject to a Phase I environmental site assessment by a third-party consultant, or in some cases an update of a previous assessment or transaction screen, in connection with the origination or acquisition of the Mortgage Loans or otherwise in connection with this offering. In some cases, a Phase II environmental site assessment was also performed. In certain cases, these environmental assessments revealed conditions that resulted in requirements that the related borrowers establish operations and maintenance plans, monitor the Mortgaged Property or nearby properties, abate or remediate the condition or provide additional security, such as letters of credit or reserves, or environmental indemnification. None of these environmental assessments are more than fifteen (15) months old as of the Cut-off Date. See “Risk Factors—Risks Related to the Mortgage Loans—Environmental Conditions at the Mortgaged Properties May Subject the Trust Fund to Liability Under Federal and State Laws, Reducing the Value and Cash Flow of the Mortgaged Properties, Which May Result in Reduced Distributions on Your Offered Certificates” in this free writing prospectus. See also
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representation and warranty no. 43 in Annex C-1 and the exceptions thereto in Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus).
Described below is certain additional information regarding environmental issues at the Mortgaged Properties securing the Mortgage Loans:
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Magnolia Marketplace, representing approximately 1.6% of the Cut-off Date Pool Balance, the related Phase I environmental site assessment (“ESA”) reported that the Mortgaged Property and nearby third-party properties previously had been used for gas stations, dry cleaners, and other activities involving hazardous materials. During redevelopment of a larger parcel after Hurricane Katrina, soil and groundwater impacts were identified. The larger parcel was remediated to achieve administrative closure pursuant to a state Voluntary Cleanup Program, but the Mortgaged Property was separated from that parcel. Subsequent investigation and remediation was performed at the Mortgaged Property and the ESA reported that the Louisiana Department of Environmental Quality (the “LDEQ”) indicated that administrative closure likely will be provided following certain required report clarifications. Additionally, the ESA notes that residual impacted soils used as backfill are in effect capped by paved parking surfaces at the Mortgaged Property. The ESA recommended no further action other than to continue cooperating with the LDEQ to obtain administrative closure and to appropriately manage any soils and/or groundwater that might be encountered during any future excavation or other disturbance at the Mortgaged Property. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Dunwoody Place, representing approximately 1.1% of the Cut-off Date Pool Balance, the Phase I environmental site assessment identified a recognized environmental condition associated with an on-site dry cleaners operating since 1996 and its long-term use of tetrachloroethylene (“PCE”). In lieu of obtaining a Phase II environmental site assessment, the lender obtained a $2 million lender environmental collateral protection and liability-type environmental insurance policy from Steadfast Insurance Company, a member company of Zurich North America, with a 10-year term (equivalent to loan term) and 3-year policy tail, and having a $50,000 deductible. The policy premium was pre-paid at closing, and a $50,000 environmental insurance policy deductible reserve was required at closing. Zurich North America has an S&P rating of “AA-”. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Lakeside Plaza, representing approximately 0.5% of the Cut-off Date Pool Balance, the Phase I environmental site assessment identified various environmental issues: (i) an underground storage tank used for diesel fuel was removed approximately 21 years ago without post-excavation testing or formal closure or sampling documentation, and a Phase II environmental site assessment was recommended; (ii) a dry cleaning business with on-site processing operated at the subject property between 1980 and 2003, and solvent releases were remediated pursuant to Illinois EPA oversight and a “no further action” letter issued (the Phase I ESA characterized this as a controlled recognized environmental condition due to groundwater use restrictions, and recommended no further action); and (iii) the subject property was a golf course between the 1940’s and the 1970’s, and was used as a landfill site for various landscape debris including grass clippings, trees, and similar wastes without a permit. In lieu of a Phase II |
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environmental site assessment, the lender obtained a $1 million lender environmental collateral protection and liability-type environmental insurance policy from Great American Insurance Co., with a 10-year term (equivalent to loan term) and 3-year policy tail, and having a $25,000 deductible. The policy premium was pre-paid at closing. Great American Insurance Co. has an S & P rating of “A+”. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Lake Lucina Shopping Center, representing approximately 0.3% of the Cut-off Date Pool Balance, the Phase I environmental site assessment indicated that historical research identified a dry cleaning facility that operated at the Mortgaged Property from the late 1960’s until the 1990’s. Documentation reviewed by Velocity Consulting, Inc. shows that the former dry cleaning operations have impacted the groundwater with perchloroethene (PCE) and its breakdown compounds. The contamination has migrated off-site to the northwest onto a neighboring property. The Mortgaged Property has been accepted into the Florida Dry Cleaning Solvent Program to address the groundwater impacts from the former dry cleaner. Acceptance into the Florida Dry Cleaning Solvent Program limits the liability of the Mortgaged Property owner/operator/lender for the contamination from the former dry cleaner, and provides funds to remediate the contamination. The Florida Dry Cleaning Solvent Program is administered by the Florida Department of Environmental Protection (“FDEP”) and is funded by revenue derived from gross receipts sales tax, a tax on PCE sold to or imported by a dry cleaning facility, and annual registration fees. Golder Associates was contracted by the FDEP to address impacted groundwater at the Mortgaged Property associated with the former dry cleaner. The cleanup activities at the Mortgaged Property are paid for by the Florida Dry Cleaning Solvent Program. A remedial action plan for the Mortgaged Property was approved by the FDEP in January 2013 and amended in May 2014. Annual remedial action system status reports for the cleanup activities will be issued to the FDEP. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Ramona Plaza Shopping Center, representing approximately 0.3% of the Cut-off Date Pool Balance, the Phase I environmental site assessment identified off-site, former gas station use (Texaco) as a recognized environmental condition given monitoring well results at the property that showed methyl tertiary-butyl ether and total petroleum hydrocarbon gasoline. Concentrations apparently is decreasing and site is under active regulatory oversight by San Diego County, California Department of Environmental Health. Ongoing review of regulatory files is recommended until regulatory closure. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Walgreens – Warrensburg, MO, representing approximately 0.3% of the Cut-off Date Pool Balance, the Phase I environmental site assessment identified the following recognized environmental conditions: (i) an on-site leaking underground storage tank (“LUST”) that has resulted in groundwater contamination at the Mortgaged Property and is the subject of active remediation; and (ii) an off-site LUST that has the potential for groundwater contamination at the Mortgaged Property and is also the subject of active monitoring and remediation. The on-site LUST is the subject of a Missouri Petroleum Storage Tank Insurance Fund claim. Approximately $130,000 has been paid in clean-up claims to date, and $1 million was initially earmarked for the site by the fund. Testing is ongoing, and future remediation could be intrusive to Walgreen’s. In the event that hazardous substances are identified at the Mortgaged |
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Property, the tenant has remedies including rent abatement for the duration of any interference or disruption and termination of the lease. The tenant has been notified of the environmental issue and discussion of a license to permit testing or remediation activities in the parking area has been suspended pending specific details about the areas affected and duration of such activity. Construction documents filed in connection with the LUST remediation indicate the improvements were constructed with a vapor barrier, which is expected to sufficiently mitigate vapor intrusion risks associated with groundwater contamination from the LUSTs. The Mortgage Loan documents provide for personal liability to the borrower and the guarantor if the Walgreen’s lease is terminated or cancelled or if the borrower fails to maintain the environmental insurance required in connection with the Mortgage Loan. The lender obtained a $2 million lender environmental collateral protection and liability-type environmental insurance policy from Steadfast Insurance Company, a member company of Zurich North America, with a 10-year term (equivalent to the term of the Mortgage Loan) and 3-year policy tail, and having a $50,000 deductible. The policy premium was pre-paid at closing. Zurich North America has an S & P rating of “AA-”. The guarantor’s stated net worth as of December 31, 2014 is $15.5 million. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Ozinus Realty Property Portfolio – Texas Star, representing approximately 0.2% of the Cut-off Date Pool Balance, the related Phase I ESA reported that a prior offsite release of chlorinated solvents and petroleum hydrocarbons that impacted soil and groundwater at the Mortgaged Property was addressed pursuant to a state Voluntary Cleanup Program (“VCP”) and the incident received a certificate of completion. Pursuant to the VCP, the Mortgaged Property is subject to an activity and use limitation prohibiting use of groundwater for potable purposes. The ESA did not recommend any further investigation or other action at this time for this matter. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Big Lots Plaza, representing approximately 0.1% of the Cut-off Date Pool Balance, the Phase I environmental site assessment identified a recognized environmental condition associated with former onsite dry cleaning operation that used PCE-based solvents. Numerous groundwater investigations were conducted between 2002-2015 to address prior PCE release, and the site is currently being monitored by Florida Department of Environmental Protection (FLDEP). The Phase I environmental site assessment consultant recommended that the property owner work with FLDEP to obtain regulatory closure. When FLDEP grants conditional regulatory closure for groundwater contamination or test data indicates that the plume is stable, testing for vapor intrusion is recommended, including potential mitigation measures. Costs of testing and vapor intrusion mitigation system (if required) were estimated at $117,000. The lender required an environmental reserve of $146,250 (125% of estimated cost) at loan origination to cover related expenses. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Waters at West End, Inc., representing approximately 0.1% of the Cut-off Date Pool Balance, the Phase I environmental site assessment report prepared by Velocity Consulting, Inc. (“Velocity”) identified a recognized environmental condition based on prior use of a neighboring property as a dry cleaning facility. The Phase I environmental site assessment report indicated that certain volatile organic compounds may have migrated from the neighboring |
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property onto the Mortgaged Property, but that the owner of the Mortgaged Property would not likely be deemed the party responsible for environmental remediation. Velocity recommended that the owner of the Mortgaged Property provide a written request to the New York State Department of Environmental Control (“NYSDEC”) requesting that the Mortgaged Property be included on the NYSDEC’s mailing list for updates on the remedial activities associated with the neighboring property and that the owner of the Mortgaged Property remain aware of the remedial activities until NYSDEC closure is granted. At the closing of the Mortgage Loan, the borrower adopted an operations and maintenance plan to implement Velocity’s recommendations concerning the above recognized environmental condition. |
For additional information regarding certain of the Mortgage Loans, see also “—Environmental Insurance” below.
Property Condition Assessments
In general, a licensed engineer, architect or consultant inspected the related Mortgaged Property, in connection with the origination or acquisition of each of the Mortgage Loans or otherwise in connection with this offering, to assess the condition of the structure, exterior walls, roofing, interior structure and mechanical and electrical systems. Engineering reports by licensed engineers, architects or consultants generally were prepared, except for newly constructed properties, certain manufactured housing community properties “and properties for which the borrower’s interest consists of a fee interest solely on the land and not any improvements, for the Mortgaged Properties in connection with the origination of the related Mortgage Loan or in connection with this offering. None of these engineering reports are more than sixteen (16) months old as of the Cut-off Date. In certain cases where material deficiencies were noted in such reports, the related borrower was required to establish reserves for replacement or repair or remediate the deficiency.
See also “Risk Factors—Risks Related to the Mortgage Loans—Property Inspections and Engineering Reports May Not Reflect All Conditions That Require Repair on a Mortgaged Property” in this free writing prospectus.
Seismic Review Process and Earthquake Insurance
In general, except for certain manufactured housing community properties, the underwriting guidelines applicable to the origination of the Mortgage Loans required that prospective borrowers seeking loans secured by properties located in California and areas of other states where seismic risk is deemed material obtain a seismic engineering report of the building and, based thereon and on certain statistical information, an estimate of damage based on the percentage of the replacement cost of the building in an earthquake scenario. This percentage of the replacement cost is expressed in terms of probable maximum loss (“PML”), probable loss (“PL”), or scenario expected loss (“SEL”). No such PML, PL or SEL exceeded 20%.
Zoning and Building Code Compliance
Each Mortgage Loan Seller took steps to establish that the use and operation of the Mortgaged Properties that represent security for its Mortgage Loans, at their respective dates of origination, were in compliance in all material respects with, or were legally existing non-conforming uses or structures under, applicable zoning, land-use and similar laws and ordinances, but we cannot assure you that such steps revealed all possible violations. Evidence of such compliance may have been in the form of legal opinions, zoning consultants’ reports, information set forth in the related appraisal, confirmations from
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government officials, title insurance endorsements, survey endorsements and/or representations by the related borrower contained in the related Mortgage Loan documents. In some cases, a certificate of occupancy may not be on record or may not have been issued, or there may be expired permits, with respect to a Mortgaged Property or a particular portion thereof. Other violations may be known to exist at any particular Mortgaged Property, but in each such instance the related Mortgage Loan Seller has informed us that it does not consider any such violations known to it to be material. In addition, certain of the Mortgaged Properties may comply with parking requirements through access to parking spaces granted pursuant to leases, licenses, easements or other private agreements. We cannot assure that such access will be retained in all instances.
In some cases the improvements at a Mortgaged Property may be encroaching over set-back lines established under the local zoning ordinance or easement and, with limited exception, an endorsement to the title insurance policy or a separate policy of law and ordinance insurance was obtained to cover losses arising from any required removal of such building(s). Where the property as currently operated is a permitted nonconforming use and/or structure, the related Mortgage Loan Seller generally conducted an analysis as to—
· | the likelihood that a material casualty would occur that would prevent the Mortgaged Property from being rebuilt in its current form, and |
· | whether existing replacement cost hazard insurance or, if necessary, supplemental “law and ordinance coverage” would, in the event of a material casualty, be sufficient to satisfy the entire Mortgage Loan or, taking into account the cost of repair, be sufficient to pay down that Mortgage Loan to a level such that the remaining collateral would be adequate security for the remaining loan amount. |
In addition, certain Mortgaged Properties may be (or may in the future become) subject to zoning, land use or building restrictions, or may be (or may in the future become) designated as historic or landmark properties. For example:
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Brittany Bay II, representing approximately 0.8% of the Cut-off Date Pool Balance, the Mortgaged Property is subject to a land use restriction agreement in favor of the Florida Housing Finance Corporation made in connection with the allocation of federal low-income housing tax credits under Internal Revenue Code of 1986 Section 42. The agreement generally requires that (i) at least 85% of the units be reserved for tenants earning no more than 60% of the area median income and (ii) at least 15% of the units be reserved for tenants earning no more than 25% of the area median income, subject to rental restrictions in accordance with the terms of the agreement. Such agreement is scheduled to terminate in 2053. The regulatory agreement requires that an annual report be submitted to the Florida Housing Finance Corporation, whose remedies for noncompliance include specific performance and injunctive relief. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Indiana Village, representing approximately 0.8% of the Cut-off Date Pool Balance, the related Mortgaged Property is subject to an affordable housing land use restriction agreement, which land use restriction will terminate upon the occurrence of, among other things, a casualty or foreclosure of the Mortgage Loan. Pursuant to the terms of the land use restriction agreement, 101 units, representing 35.0% of the units at the Mortgaged Property, must be leased to low income families, and 58 of those units must be |
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leased to very low income families. The land use restriction agreement will terminate in the event of the foreclosure by the lender. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as 30 Bond Street Owners Corp., representing approximately 0.1% of the Cut-off Date Pool Balance, the mortgaged property is located in The New York City NOHO Historic District and is therefore subject to certain oversight by the New York City Landmarks Preservation Commission with respect to physical changes to the property. |
See also representation and warranty no. 26 in Annex C-1 to this free writing prospectus and the exceptions thereto in Annex C-2 to this free writing prospectus (subject to the limitations and qualifications set forth in the preamble to Annex C-1 to this free writing prospectus).
Environmental Insurance
With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Dunwoody Place, representing approximately 1.1% of the Cut-off Date Pool Balance, the Phase I environmental site assessment identified a recognized environmental condition associated with an on-site dry cleaners operating since 1996 and its long-term use of PCE. In lieu of obtaining a Phase II environmental site assessment, the lender obtained a $2 million lender environmental collateral protection and liability-type environmental insurance policy from Steadfast Insurance Company, a member company of Zurich North America, with a 10-year term (equivalent to loan term) and 3-year policy tail, and having a $50,000 deductible. The policy premium was pre-paid at closing, and a $50,000 environmental insurance policy deductible reserve was required at closing. Zurich North America has an S&P rating of “AA-”.
With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Lakeside Plaza, representing approximately 0.5% of the Cut-off Date Pool Balance, the Phase I environmental site assessment identified various environmental issues: (i) an underground storage tank used for diesel fuel was removed approximately 21 years ago without post-excavation testing or formal closure or sampling documentation, and a Phase II environmental site assessment was recommended; (ii) a dry cleaning business with on-site processing operated at the subject property between 1980 and 2003, and solvent releases were remediated pursuant to Illinois EPA oversight and a “no further action” letter issued (the Phase I ESA characterized this as a controlled recognized environmental condition due to groundwater use restrictions, and recommended no further action); and (iii) the subject property was a golf course between the 1940’s and the 1970’s, and was used as a landfill site for various landscape debris including grass clippings, trees, and similar wastes without a permit. In lieu of a Phase II environmental site assessment, the lender obtained a $1 million lender environmental collateral protection and liability-type environmental insurance policy from Great American Insurance Co., with a 10-year term (equivalent to loan term) and 3-year policy tail, and having a $25,000 deductible. The policy premium was pre-paid at closing. Great American Insurance Co. has an S & P rating of “A+”.
With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Walgreens – Warrensburg, MO, representing approximately 0.3% of the Cut-off Date Pool Balance, the Phase I environmental site assessment identified the following recognized environmental conditions: (i) an on-site LUST that has resulted in groundwater contamination at the Mortgaged Property and is the subject of active remediation; and (ii) an off-site LUST that has the potential for
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groundwater contamination at the Mortgaged Property and is also the subject of active monitoring and remediation. The on-site LUST is the subject of a Missouri Petroleum Storage Tank Insurance Fund claim. Approximately $130,000 has been paid in clean-up claims to date, and $1 million was initially earmarked for the site by the fund. Testing is ongoing, and future remediation could be intrusive to Walgreen’s. In the event that hazardous substances are identified at the Mortgaged Property, the tenant has remedies including rent abatement for the duration of any interference or disruption and termination of the lease. The tenant has been notified of the environmental issue and discussion of a license to permit testing or remediation activities in the parking area has been suspended pending specific details about the areas affected and duration of such activity. Construction documents filed in connection with the LUST remediation indicate the improvements were constructed with a vapor barrier, which is expected to sufficiently mitigate vapor intrusion risks associated with groundwater contamination from the LUSTs. The Mortgage Loan documents provide for personal liability to the borrower and the guarantor if the Walgreen’s lease is terminated or cancelled or if the borrower fails to maintain the environmental insurance required in connection with the Mortgage Loan. The lender obtained a $2 million lender environmental collateral protection and liability-type environmental insurance policy from Steadfast Insurance Company, a member company of Zurich North America, with a 10-year term (equivalent to the term of the Mortgage Loan) and 3-year policy tail, and having a $50,000 deductible. The policy premium was pre-paid at closing. Zurich North America has an S & P rating of “AA-”. The guarantor’s stated net worth as of December 31, 2014 is $15.5 million.
In general, the applicable Master Servicer will be required to report any claims of which it is aware that arise under a secured credit impaired property, environmental liability insurance or pollution legal liability policy relating to a Mortgage Loan while that loan is not a Specially Serviced Mortgage Loan and the applicable Special Servicer will be required to report any claims of which it is aware that arise under the policy while that Mortgage Loan is a Specially Serviced Mortgage Loan or the related Mortgaged Property has become an REO Property.
Each insurance policy referred to above has been issued or, as of the Closing Date, will have been issued. We cannot assure you that any insurance policy referred to above will provide coverage or complete coverage for any costs or losses that might arise if contamination should be discovered at the related Mortgaged Property in the future.
For additional information regarding certain of the Mortgage Loans, see also “—Environmental Assessments” above.
Loan Purpose
Ninety-nine (99) of the Mortgage Loans, representing approximately 73.6% of the Cut-off Date Pool Balance, were originated in connection with the borrower’s refinancing of a previous mortgage loan.
Thirty-three (33) Mortgage Loans, representing approximately 26.0% of the Cut-off Date Pool Balance, were originated in connection with the borrower’s acquisition of the Mortgaged Property(ies) that secures such Mortgage Loan. In some cases, the acquisition price for a particular Mortgaged Property was lower than the Appraised Value for such Mortgaged Property shown on Annex A-1 to this free writing prospectus.
One (1) Mortgage Loan, representing approximately 0.4% of the Cut-off Date Pool Balance, was originated in connection with the borrower’s recapitalization.
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Exceptions to Underwriting Guidelines
The Mortgage Loan Sellers (other than Wells Fargo Bank, National Association) have not identified any material exceptions to the disclosed underwriting criteria set forth under “Transaction Parties—The Sponsors, Mortgage Loan Sellers and Originators” in this free writing prospectus.
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Country Club Center, representing approximately 2.3% of the Cut-off Date Pool Balance, the Mortgage Loan origination loan-to-value ratio (75.0%) is greater than 65.0%, the U/W NCF DSCR (1.29x) is less than 1.50x, and the Mortgage Loan documents do not require ongoing replacement reserves or tenant improvement & leasing commission (“TILC”) reserves, which represents an exception to the underwriting guidelines for Wells Fargo Bank, National Association. Wells Fargo Bank, National Association’s decision to include the Mortgage Loan notwithstanding this exception was supported by the following: (1) regarding the replacement reserve, (a) the Mortgaged Property is a class A office building that was constructed in 2004; (b) the property condition report noted that the Mortgaged Property was in “good” overall condition and identified minimal signs of deferred maintenance (totaling $3,000); and (c) monthly replacement reserves of $1,083 are required upon the occurrence and continuance of an event of default; and (2) regarding the TILC reserves (i) if any tenant over 3,248 square feet (5.0% of net rentable area) fails to renew its lease during the loan term, the borrower will be required to post cash or a letter of credit for re-tenanting costs equal to $25.00 per square foot for the applicable space, and if the borrower fails to post cash or a letter of credit as required, the guarantor will have a recourse obligation equal to $35.00 per square foot for the applicable space; (ii) the loan sponsors/guarantors have more than 20 years of commercial real estate experience; and (iii) the loan sponsors/guarantors have a combined net worth and liquidity in excess of $2.8 billion and $42.8 million, respectively. Certain characteristics of the Mortgage Loan can be found in Annex A-1 to this free writing prospectus. Based on the foregoing, Wells Fargo Bank, National Association approved inclusion of the Mortgage Loan into this transaction. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Parkway Crossing East Shopping Center, representing approximately 2.2% of the Cut-off Date Pool Balance, the Mortgage Loan origination loan-to-value ratio (75.0%) is greater than 65.0%, the U/W NCF DSCR (1.38x) is less than 1.50x, and the Mortgage Loan documents do not require ongoing real estate tax reserves, which represents an exception to the underwriting guidelines for Wells Fargo Bank, National Association. Wells Fargo Bank, National Association’s decision to include the Mortgage Loan notwithstanding this exception was supported by the following: (a) upon the occurrence of a trigger event (under the related loan documents) a monthly tax reserve will be required; (b) the Mortgaged Property is 98.1% occupied and 53.6% of the total annual underwritten base rent is generated by national anchor tenants; (c) Underwritten NCF can decrease by 12.9% before a 7.0% net cash flow debt yield is attained (one of the trigger events) and occupancy can decrease to 77.2% in order to maintain a breakeven net cash flow; (d) the loan guarantor has more than 20 years of commercial real estate experience and the borrower has owned the Mortgaged Property since 2004; and (e) the loan guarantor has a net worth and liquidity of approximately $73.9 million and $15.4 million, respectively. Certain characteristics of the Mortgage Loan can be found in Annex A-1 to this free writing prospectus. Based |
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on the foregoing, Wells Fargo Bank, National Association approved inclusion of the Mortgage Loan into this transaction. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Rock Hill Hampton Inn, representing approximately 1.4% of the Cut-off Date Pool Balance, the underwritten occupancy (81.8%) is greater than 80.0%, which represents an exception to the underwriting guidelines for Wells Fargo Bank, National Association. Wells Fargo Bank, National Association’s decision to include the Mortgage Loan notwithstanding this exception was supported by the following: (a) the Mortgage Loan has strong cash flow metrics with an U/W NOI Debt Yield and U/W NCF DSCR of 12.6% and 1.68x, respectively, as well as a conservative Cut-off Date LTV Ratio and balloon loan-to-value ratio of 65.8% and 52.2%, respectively; (b) if the underwritten occupancy is adjusted to 80.0%, the resulting U/W NOI Debt Yield and U/W NCF DSCR are 12.2% and 1.63x, respectively; (c) according to a third-party research report, compared to its competitive set, the Mortgaged Property had RevPAR penetration rates of 104.8%, 108.6% and 109.7%; and occupancy penetration rates of 101.1%, 102.7% and 104.4% for the trailing 12-month periods ending in December 2012, 2013 and 2014, respectively; (d) the sponsors own five hotels (three Hampton Inns, one Hilton Garden Inn and one Spring Hill Suites) and currently have a net worth and liquidity of approximately $13.2 million and $3.9 million, respectively; and (e) a $2.5 million property improvement plan was completed in 2009, and the Mortgaged Property has received 10 consecutive "outstanding" quality assurance evaluations from the franchisor, averaging 94.7% over the past five years. Certain characteristics of the Mortgage Loan can be found in Annex A-1 to this free writing prospectus. Based on the foregoing, Wells Fargo Bank, National Association approved inclusion of the Mortgage Loan into this transaction. |
· | With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Walgreens – Duncanville, TX, representing approximately 0.5% of the Cut-off Date Pool Balance, the Mortgage Loan U/W NCF DSCR (1.13x) is less than 1.20x, which represents an exception to the underwriting guidelines for Wells Fargo Bank, National Association. Wells Fargo Bank, National Association’s decision to include the Mortgage Loan notwithstanding this exception was supported by the following: (a) the Mortgaged Property is leased to a single tenant, Walgreens, who is rated investment grade (Baa2 and BBB by Moody’s and S&P, respectively) on a long term lease through 2089 (with its first termination option in 2034); (b) the Mortgage Loan represents acquisition financing with an $8.5 million purchase price, with 35.5% cash equity ahead of the loan; (c) at the first termination option, assuming the underwritten net cash flow, an 8.0% coupon and 30-year amortization schedule would result in a 1.68x refinance DSCR; and (d) the guarantor has a net worth of approximately $38.4 million. Certain characteristics of the Mortgage Loan can be found in Annex A-1 to this free writing prospectus. Based on the foregoing, Wells Fargo Bank, National Association approved inclusion of the Mortgage Loan into this transaction. |
Assignment of the Mortgage Loans
On or before the Closing Date, the Mortgage Loan Sellers will transfer to us those Mortgage Loans that are to be included in the Trust Fund, and we will transfer to the Trust Fund all of those Mortgage Loans. In each case, the transferor will assign the applicable Mortgage Loans, without recourse, to the Trustee, except as described below in this “—Assignment of the Mortgage Loans” section. See the section of the accompanying
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prospectus titled “Description of the Pooling and Servicing Agreements—Assignment of Mortgage Assets; Repurchases”.
The transfer by each Mortgage Loan Seller of its Mortgage Loans to the Depositor will be governed by a mortgage loan purchase agreement (a “Mortgage Loan Purchase Agreement”) between that Mortgage Loan Seller and the Depositor.
In connection with the transfer of each Mortgage Loan, the related Mortgage Loan Seller will be required to deliver to the Custodian on behalf of the Trustee, the following documents, among others:
· | either— |
1. | the original mortgage note(s) evidencing that Mortgage Loan, or |
2. | if any original mortgage note has been lost, a copy of that note, together with a lost note affidavit and indemnity; |
· | the original or a copy of the mortgage, together with originals or copies of any intervening assignments of the mortgage; |
· | the original or a copy of any separate assignment of leases and rents, together with originals or copies of any intervening assignments of that assignment of leases and rents; |
· | either— |
1. | an executed assignment of the mortgage in favor of the Trustee, in recordable form except for missing recording information relating to a mortgage that has not been returned from the applicable recording office, or |
2. | a certified copy of that assignment as sent or to be sent for recording; |
· | either— |
1. | an executed assignment of any separate assignment of leases and rents in favor of the Trustee, in recordable form except for missing recording information relating to an assignment of leases and rents that has not been returned from the applicable recording office, or |
2. | a certified copy of that assignment as sent or to be sent for recording; |
· | an original or copy of the related policy or certificate of lender’s title insurance policy, or if a title insurance policy has not yet been issued, a “marked-up” commitment for title insurance or a pro forma policy; |
· | if a material portion of the interest of the borrower in the related Mortgaged Property consists of a leasehold interest, the original or a copy of the related ground lease; |
· | a copy of any letter of credit relating to, evidencing or constituting additional collateral for that Mortgage Loan (with the original of such letter of credit to be delivered to the applicable Master Servicer); and |
· | if the related Mortgaged Property is a hospitality property that is subject to a franchise, management or similar arrangement, (a) an original or a copy of any franchise, management or similar agreement and (b) an estoppel certificate or |
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comfort letter delivered by the franchisor, manager or similar person, as applicable, for the benefit of the holder of the Mortgage Loan in connection with the Mortgage Loan Seller’s origination or acquisition of the Mortgage Loan, together, within such time frames as required by the related Mortgage Loan Purchase Agreement, with either (i) such instrument(s) of notice or transfer (if any) as are necessary to transfer or assign to the Trust or the Trustee the benefits of such estoppel certificate or comfort letter, or (ii) a new estoppel certificate or comfort letter (in substantially the same form and substance as the prior estoppel certificate or comfort letter) by the franchisor, manager or similar person, as applicable, for the benefit of the Trust or the Trustee (and, if a copy of a new estoppel certificate or comfort letter is delivered, then the original copy shall be included in the mortgage file promptly following receipt thereof by the related Mortgage Loan Seller). |
The Pooling and Servicing Agreement and/or the respective Mortgage Loan Purchase Agreements will specify the dates by which these documents and instruments must be delivered. All promissory notes must be in the possession of the Custodian on the Closing Date and other required Mortgage Loan documents may be delivered after the Closing Date. Each promissory note must be endorsed to the Trustee, in that capacity, for the registered holders of the Certificates or in blank. Each assignment of a mortgage, separate assignment of leases or other security agreement must be in favor of the Trustee, in that capacity, for the registered holders of the Certificates.
The Pooling and Servicing Agreement will designate the documents listed under thefirst,second,fourth,sixth,seventh,eighth andninth bullet points above as “Specially Designated Mortgage Loan Documents”.
Notwithstanding the foregoing, with respect to the Brickyard Square Mortgage Loan, the documents described above (other than the mortgage note evidencing the Brickyard Square Mortgage Loan included in this securitization) will be maintained by the custodian under the WFCM 2015-C28 securitization and, with respect to the Bella Luna / San Lucas Mortgage Loan, the documents described above (other than the mortgage note evidencing the Bella Luna / San Lucas Mortgage Loan included in this securitization) will be maintained by the custodian under the WFCM 2015-LC20 securitization.
The Custodian is required to hold all of the documents delivered to it with respect to the Mortgage Loans on behalf of the Trustee, in trust for the benefit of the Certificateholders. Within a specified period of time following that delivery, the Custodian will be further required to conduct a review of those documents. The scope of the Custodian’s review of those documents will, in general, be limited solely to confirming that they have been received. No party to the Pooling and Servicing Agreement is under any duty or obligation to inspect, review or examine any of the documents relating to the Mortgage Loans to determine whether the document is valid, effective, enforceable, in recordable form or otherwise appropriate for the represented purpose.
If—
· | any of the documents required to be delivered by a Mortgage Loan Seller to the Custodian is not delivered or is otherwise defective, and |
· | that omission or defect materially and adversely affects the value of the mortgage loan or the interests of the Certificateholders, or any of them, therein, including, but not limited to, a material and adverse effect on any of the distributions distributable with respect to any of the Certificates or on the value of those Certificates, |
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then the omission or defect will constitute a material document defect. The Pooling and Servicing Agreement will provide that the absence from the mortgage file of (i) the item listed in the first bullet point above under this “—Assignment of Mortgage Loans” on the Closing Date or (ii) any other Specially Designated Mortgage Loan Document by the first anniversary of the Closing Date, in each case without the presence of any factor that reasonably mitigates such absence, non-conformity or irregularity, and if the absence results from the related Mortgage Loan Seller’s failure to deliver such Specially Designated Mortgage Loan Document in accordance with the terms of the related Mortgage Loan Purchase Agreement, will be conclusively presumed to be a material document defect. The rights of the Certificateholders, or of the Trustee on their behalf, against the applicable Mortgage Loan Seller (or, in the case of Mortgage Loans sold by Walker & Dunlop Commercial Property Funding I WF, LLC, that Mortgage Loan Seller and Walker & Dunlop Commercial Property Funding, LLC) (such person, a “Responsible Repurchase Party”) with respect to any material document defect are described under “—Cures, Repurchases and Substitutions” below.
Furthermore, each Mortgage Loan Seller will agree in the related Mortgage Loan Purchase Agreement that, with respect to any Non-Serviced Pari Passu Mortgage Loan sold by such Mortgage Loan Seller, any document defect (as such term is defined in the related Other Pooling and Servicing Agreement) will constitute a document defect under such Mortgage Loan Purchase Agreement;provided,however, that the foregoing will not apply to any document defect related solely to the promissory note for any related Non-Serviced Pari Passu Companion Loan.
Additionally, in connection with the transfer of the Mortgage Loans to the Trust Fund, one or more of the Mortgage Loan Sellers may retain, either directly or through an affiliate, a portion of the Certificates issued at closing.
Representations and Warranties
As of the Closing Date, each Mortgage Loan Seller will make, with respect to each of the Mortgage Loans sold to us by that Mortgage Loan Seller, the representations and warranties set forth on Annex C-1 to this free writing prospectus, subject to the exceptions set forth on Annex C-2 to this free writing prospectus.
The representations and warranties made by each Mortgage Loan Seller as described on Annex C-1, subject to the exceptions set forth on Annex C-2 to this free writing prospectus, will be assigned by us to the Trustee under the Pooling and Servicing Agreement. If—
· | there exists a breach of any of the above-described representations and warranties made by a Mortgage Loan Seller, and |
· | that breach materially and adversely affects the value of the mortgage loan or the interests of the Certificateholders therein, |
then that breach will be a material breach of the representation and warranty. The rights of the Certificateholders, or of the Trustee on their behalf, against the applicable Responsible Repurchase Party with respect to any material breach are described under “—Cures, Repurchases and Substitutions” below.
Each Mortgage Loan Purchase Agreement, together with the related representations and warranties and the corresponding exceptions, serves to contractually allocate risk between the related Mortgage Loan Seller, on the one hand, and the Trust Fund, on the other. We present the related representations and warranties and any related exceptions herein in this
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free writing prospectus for the sole purpose of describing some of the terms and conditions of that risk allocation. The presentation of representations and warranties is not intended as statements regarding the actual characteristics of the Mortgage Loans, Mortgaged Properties or other matters. We cannot assure you that the Mortgage Loans actually conform to the statements made in the representations and warranties that we present in this free writing prospectus. Further, whether a particular Mortgage Loan Seller elects to take an exception to a representation and warranty is determined by the nature of its related Mortgage Loans, the Mortgage Loan Seller’s interpretation of the requirements of the related representation and warranties and the terms and conditions of the Mortgage Loans as well as the Mortgage Loan Seller’s risk tolerance. As a result, the fact that one Mortgage Loan Seller has elected not to take an exception to a particular representation or warranty where another Mortgage Loan Seller, or each other Mortgage Loan Seller, has elected to take an exception, should not imply anything about the specific characteristics of that Mortgage Loan Seller’s collateral.
No party to the Pooling and Servicing Agreement or any other person is under any duty or obligation to review the Mortgage Loans to determine whether the representations and warranties made by the related Mortgage Loan Seller are true.
Cures, Repurchases and Substitutions
If there exists a material breach (generally, a breach that materially and adversely affects the value of any Mortgage Loan or the interests of the Certificateholders therein) of any of the representations and warranties made by a Mortgage Loan Seller with respect to any of the Mortgage Loans sold to us by that Mortgage Loan Seller, as discussed under “—Representations and Warranties” above, or a material document defect (generally, a document defect that materially and adversely affects value of any Mortgage Loan or the interests of the Certificateholders, or any of them, therein) with respect to any of those Mortgage Loans, as discussed under “—Assignment of the Mortgage Loans” above, then the applicable Responsible Repurchase Party will be required to take one of the following courses of action:
· | cure the material breach or the material document defect in all material respects; |
· | repurchase the affected Mortgage Loan at the applicable Purchase Price; or |
· | prior to the second anniversary of the Closing Date, so long as it does not result in a qualification, downgrade or withdrawal of any rating assigned by the Rating Agencies to the Certificates, as confirmed in writing by each of the Rating Agencies (unless any such Rating Agency elects not to review the matter), replace the affected Mortgage Loan with a substitute Mortgage Loan that satisfies the terms of the related Mortgage Loan Purchase Agreement, including without limitation, that— |
1. | has comparable payment terms to those of the Mortgage Loan that is being replaced, and |
2. | is acceptable to the Subordinate Class Representative (during any Subordinate Control Period or Collective Consultation Period,provided that the affected Mortgage Loan is not an Excluded Loan). |
If the applicable Responsible Repurchase Party replaces one Mortgage Loan with another Mortgage Loan, as described above, such Responsible Repurchase Party will be required to pay into the Trust the amount, if any, by which—
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· | the Purchase Price, exceeds |
· | the Stated Principal Balance of the substitute mortgage loan as of the date it is added to the Trust. |
The time period within which the applicable Responsible Repurchase Party must complete the remedy, repurchase or substitution described above, will generally be limited to 90 days following the earlier of discovery by the applicable Mortgage Loan Seller or receipt of notice of the material breach or material document defect, as the case may be, from a party to the Pooling and Servicing Agreement. However, in most cases (but not all), if the applicable Responsible Repurchase Party is diligently attempting to correct the problem, then it will be entitled to an additional 90 days to complete that remedy, repurchase or substitution. Any remedy, repurchase or substitution with respect to a breach or defect that is related to a Mortgage Loan not being a “qualified mortgage” within the meaning of Code Section 860G(a)(3) must be completed within 90 days following any discovery by the applicable Mortgage Loan Seller or any party to the Pooling and Servicing Agreement.
“Purchase Price” means, with respect to any particular Mortgage Loan or REO Property being purchased from the Trust Fund, a price approximately equal to the sum of the following:
· | the outstanding principal balance of that Mortgage Loan less any Loss of Value Payment available to reduce the principal balance; |
· | all accrued and unpaid interest on that Mortgage Loan generally through the end of the mortgage loan accrual period ending in the collection period of purchase, other than Default Interest; |
· | all unreimbursed Servicing Advances with respect to that Mortgage Loan, together with any unpaid interest on those advances owing to the party or parties that made them; |
· | all Servicing Advances with respect to that Mortgage Loan that were reimbursed out of collections on or with respect to other Mortgage Loans in the Trust Fund; |
· | all accrued and unpaid interest on any monthly debt service advances made with respect to the subject Mortgage Loan; and |
· | in the case of a repurchase or substitution of a defective Mortgage Loan by a Responsible Repurchase Party, (1) all related special servicing fees and, to the extent not otherwise included, other related Additional Trust Fund Expenses (including without limitation any liquidation fee payable in connection with the applicable purchase or repurchase), and (2) to the extent not otherwise included, any costs and expenses incurred by the applicable Master Servicer, the applicable Special Servicer, the Certificate Administrator, the Custodian or the Trustee or an agent of any of them, on behalf of the Trust Fund, in enforcing any obligation of a Responsible Repurchase Party to repurchase or replace the Mortgage Loan. |
“Default Interest” means any interest that—
· | accrues on a Defaulted Mortgage Loan solely by reason of the subject default, and |
· | is in excess of all interest accrued on the Mortgage Loan at the related mortgage interest rate. |
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Default Interest and late payment charges will be applied in accordance with the related intercreditor agreement prior to being allocated in accordance with the Pooling and Servicing Agreement.
In lieu of a Responsible Repurchase Party repurchasing, substituting or curing a material breach or material document defect (or an allegation of a material breach or material document defect), to the extent that the Mortgage Loan Seller and the applicable Special Servicer on behalf of the Trust (with the consent of the Majority Subordinate Certificateholder to the extent a Subordinate Control Period or Collective Consultation Period is then in effect) are able to agree upon a cash payment payable by the Mortgage Loan Seller to such Special Servicer on behalf of the Trust that would be deemed sufficient to compensate the Trust for a material breach or material document defect (a “Loss of Value Payment”), the Mortgage Loan Seller may elect, in its sole discretion, to pay such Loss of Value Payment. Upon its making such payment, the Mortgage Loan Seller will be deemed to have cured the related material breach or material document defect in all respects. A Loss of Value Payment may not be made with respect to a material breach that is related to a Mortgage Loan not being a “qualified mortgage” within the meaning of Code Section 860G(a)(3).
“Adverse REMIC Event” means any event or circumstance that would cause any of REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC under the Code, or (except as permitted under the circumstances described under “Servicing of the Mortgage Loans and Administration of the Trust Fund—Procedures With Respect to Defaulted Mortgage Loans and REO Properties”) result in the imposition of any tax on prohibited transactions or contributions after the startup date of any of REMIC I, REMIC II or REMIC III under the Code.
“Adverse Grantor Trust Event” means any event or circumstance that would cause the Grantor Trust to fail to qualify as a grantor trust under the Code or result in the imposition of any tax upon the Grantor Trust.
The obligations of the applicable Responsible Repurchase Party to cure, repurchase, substitute or make a Loss of Value Payment as described above will constitute the sole remedy available to the Certificateholders in connection with a material breach of any of the representations and warranties made by that Responsible Repurchase Party (or, if applicable, its affiliated Mortgage Loan Seller) or a material document defect, in any event with respect to a Mortgage Loan transferred by that Responsible Repurchase Party (or, if applicable, its affiliated Mortgage Loan Seller) to the Trust Fund. However, if the breach of any representation or warranty of a Mortgage Loan Seller is based on whether a borrower is required to pay a specified expense under the terms of the related Mortgage Loan documents, then the payment of that expense by the applicable Responsible Repurchase Party will constitute the sole remedy for that breach.
No person other than the applicable Responsible Repurchase Party will be obligated to perform the obligations of that Responsible Repurchase Party if it fails to perform its cure, repurchase, substitution, payment or other remedial obligations.
A Responsible Repurchase Party may have only limited assets with which to fulfill any obligations on its part that may arise as a result of a material document defect or a material breach of any of the related Mortgage Loan Seller’s representations or warranties. We cannot assure you that a Responsible Repurchase Party will fulfill such obligations on its part that may arise with respect to any Mortgage Loan as a result of the discovery of a material document defect or a material breach. See “Transaction Parties—The Sponsors, Mortgage
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Loan Sellers and Originators” in this free writing prospectus and “The Sponsor” in the accompanying prospectus.
Expenses incurred by the Master Servicers, the Special Servicers, the Certificate Administrator and the Trustee with respect to enforcing any such obligation will be borne by the applicable Responsible Repurchase Party, or if not, will be reimbursable out of the Collection Accounts.
Changes in Mortgage Pool Characteristics
The descriptions in this free writing prospectus of the Mortgage Loans and the Mortgaged Properties are based upon the Mortgage Pool as it is expected to be constituted as of the close of business on the Closing Date, assuming that (i) all scheduled principal and interest payments due on or before the Cut-off Date will be made, and (ii) there will be no principal prepayments on or before the Cut-off Date. Prior to the issuance of the Certificates, Mortgage Loans may be removed from the Mortgage Pool as a result of prepayments, delinquencies, incomplete documentation or otherwise, if the Depositor or any Mortgage Loan Seller deems such removal necessary, appropriate or desirable. A limited number of other Mortgage Loans may be included in the Mortgage Pool prior to the issuance of the Certificates, unless including such Mortgage Loans would materially alter the characteristics of the Mortgage Pool as described in this free writing prospectus. The Depositor believes that the information set forth in this free writing prospectus will be representative of the characteristics of the Mortgage Pool as it will be constituted at the time the Certificates are issued, although the range of mortgage interest rates and maturities as well as other characteristics of the Mortgage Loans described in this free writing prospectus may vary.
A Current Report on Form 8–K describing any material changes to the composition of the Mortgage Pool will be available to purchasers of the Offered Certificates shortly after the Closing Date.
Finalized Pooling and Servicing Agreement and Other Material Agreements
We will have filed copies of the finalized Pooling and Servicing Agreement, and other material agreements relating to this offering, with the U.S. Securities and Exchange Commission (the “SEC”) on or before the date we file any prospectus supplement ultimately filed with the SEC, by filing a post-effective amendment to our registration statement or a Current Report on Form 8-K, or at such other date as the SEC by rule, regulation or staff interpretation may permit.
TRANSACTION PARTIES
The Issuing Entity
The “Issuing Entity” with respect to the Offered Certificates will be the Wells Fargo Commercial Mortgage Trust 2015-C29 (the “Trust”). The Trust is a New York common law trust that will be formed on the Closing Date pursuant to the Pooling and Servicing Agreement. The only activities that the Trust may perform are those set forth in the Pooling and Servicing Agreement, which are generally limited to owning and administering the Mortgage Loans and any REO Property, disposing of Defaulted Mortgage Loans and REO Property, issuing the Certificates, making distributions, providing reports to Certificateholders and engaging in any other activities described generally in this free writing prospectus. Accordingly, the Trust may not issue securities other than the
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Certificates, or invest in securities, other than investing of funds in each Collection Account and other accounts maintained under the Pooling and Servicing Agreement in certain short-term high-quality investments. The Trust may not lend or borrow money, except that the Master Servicers, the Special Servicers (with respect to Servicing Advances) and the Trustee may make advances of delinquent principal and interest payments and Servicing Advances to the Trust, but only to the extent the advancing party deems these advances to be recoverable from the related Mortgage Loan. These advances are intended to provide liquidity, rather than credit support. The Pooling and Servicing Agreement may be amended as set forth under “Description of the Offered Certificates—Amendment of the Pooling and Servicing Agreement” in this free writing prospectus. The Trust administers the Mortgage Loans through the Trustee, the Certificate Administrator, the tax administrator, the Master Servicers and the Special Servicers.
The only assets of the Trust other than the Mortgage Loans and any REO Properties (which includes, with respect to any Non-Serviced Loan Combination, the Trust’s interest in any REO property acquired with respect to such Non-Serviced Loan Combination pursuant to the related pooling and servicing agreement, but which does not include any Pari Passu Companion Loan’spro rata interest) are the Distribution Account, each Collection Account, the other accounts maintained pursuant to the Pooling and Servicing Agreement, the short-term investments in which funds in each Collection Account and other accounts are invested and any rights and benefits obtained in connection with the other activities described in this free writing prospectus. The Trust has no present liabilities, but has potential liability relating to ownership of the Mortgage Loans and any REO Properties including, with respect to any Non-Serviced Loan Combination, the Trust’s interest in any REO property acquired pursuant to the related pooling and servicing agreement, and the other activities described in this free writing prospectus, and indemnity obligations to the Trustee, the Certificate Administrator, the Master Servicers and the Special Servicers. The fiscal year of the Trust is the calendar year. The Trust has no executive officers or board of directors and acts through the Trustee, the Certificate Administrator, the Master Servicers and the Special Servicers.
Since the Trust is a common law trust, it may not be eligible for relief under the federal bankruptcy laws, unless it can be characterized as a “business trust” for purposes of the federal bankruptcy laws. Bankruptcy courts look at various considerations in making this determination, so predicting with any certainty whether or not the Trust would be characterized as a “business trust” is not possible.
The Depositor
Wells Fargo Commercial Mortgage Securities, Inc., a North Carolina corporation (the “Depositor”), is the depositor. The Depositor is a special purpose corporation incorporated in the State of North Carolina in 1988, for the purpose of engaging in the business, among other things, of acquiring and depositing Mortgage Loans in trust in exchange for Certificates evidencing interest in such trusts and selling or otherwise distributing such Certificates. The Depositor is a direct, wholly-owned subsidiary of Wells Fargo Bank, a Sponsor, an Originator, a Mortgage Loan Seller, a Master Servicer, the Certificate Administrator, the tax administrator, the Custodian and the certificate registrar and an affiliate of Wells Fargo Securities, LLC, one of the underwriters. See “—Affiliations and Certain Relationships Among Certain Transaction Parties” below.
The Depositor will have minimal ongoing duties with respect to the Offered Certificates and the Mortgage Loans. The Depositor’s duties will include, without limitation, (i) appointing a successor Trustee in the event of the resignation or removal of the Trustee, (ii) providing information in its possession with respect to the Certificates to the tax
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administrator to the extent necessary to perform REMIC and grantor trust tax administration, (iii) indemnifying the Trustee, the tax administrator and the Trust for any liability, assessment or costs arising from the Depositor’s bad faith, negligence or malfeasance in providing such information, (iv) indemnifying the Trustee and the tax administrator against certain securities laws liabilities, and (v) signing or contracting with the Master Servicers, signing any annual report on Form 10-K, including the certification therein required under the Sarbanes-Oxley Act, and any distribution reports on Form 10-D and Current Reports on Form 8-K required to be filed by the Trust. The Depositor is also required under the underwriting agreement to indemnify the underwriters for certain securities law liabilities.
The Sponsors, Mortgage Loan Sellers and Originators
Wells Fargo Bank, National Association, Rialto Mortgage Finance, LLC, Silverpeak Real Estate Finance LLC, Walker & Dunlop Commercial Property Funding I WF, LLC, National Cooperative Bank, N.A. and National Consumer Cooperative Bank, are referred to in this free writing prospectus as the “Originators”. The Depositor will acquire the Mortgage Loans from Wells Fargo Bank, National Association, Rialto Mortgage Finance, LLC, Silverpeak Real Estate Finance LLC, Walker & Dunlop Commercial Property Funding I WF, LLC and National Cooperative Bank, N.A. (collectively, the “Mortgage Loan Sellers” or the “Sponsors”) on or about June 26, 2015 (the “Closing Date”). Each Mortgage Loan Seller is a “sponsor” of the securitization transaction described in this free writing prospectus (in such capacity, a “Sponsor”). The Depositor will cause the Mortgage Loans in the Mortgage Pool to be assigned to the Trustee pursuant to the Pooling and Servicing Agreement.
Wells Fargo Bank, National Association
General
Wells Fargo Bank, National Association (“Wells Fargo Bank”), a national banking association, is a wholly-owned subsidiary of Wells Fargo & Company (NYSE: WFC). The principal office of Wells Fargo Bank’s commercial mortgage origination division is located at 45 Fremont Street, 9th Floor, San Francisco, California 94105, and its telephone number is (415) 396-7697. Wells Fargo Bank is engaged in a general consumer banking, commercial banking, and trust business, offering a wide range of commercial, corporate, international, financial market, retail and fiduciary banking services. Wells Fargo Bank is a national banking association chartered by the Office of the Comptroller of the Currency (the “OCC”) and is subject to the regulation, supervision and examination of the OCC. Wells Fargo Bank is also the successor by merger to Wachovia Bank, National Association (“Wachovia Bank”), which, together with Wells Fargo Securities, LLC (formerly known as Wachovia Capital Markets, LLC), was previously a subsidiary of Wachovia Corporation. On December 31, 2008, Wachovia Corporation merged with and into Wells Fargo & Company. As a result of this transaction, the Depositor, Wachovia Bank and Wells Fargo Securities, LLC became wholly-owned subsidiaries of Wells Fargo & Company, and affiliates of Wells Fargo Bank. On March 20, 2010, Wachovia Bank merged with and into Wells Fargo Bank.
Wells Fargo Bank, National Association’s Commercial Mortgage Securitization Program
Prior to its merger with Wachovia Bank, Wells Fargo Bank was an active participant in securitizations of commercial and multifamily mortgage loans as a mortgage loan seller and sponsor in securitizations for which unaffiliated entities acted as depositor. Between the inception of its commercial mortgage securitization program in 1995 and December 2007, Wells Fargo Bank originated approximately 5,360 fixed-rate commercial and multifamily
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mortgage loans with an aggregate original principal balance of approximately $32.4 billion, which were included in approximately 61 securitization transactions.
Prior to its merger into Wells Fargo Bank, one of Wachovia Bank’s primary business lines was the underwriting and origination of mortgage loans secured by commercial or multifamily properties. With its commercial mortgage lending affiliates and predecessors, Wachovia Bank began originating and securitizing commercial mortgage loans in 1995. The total amount of commercial mortgage loans originated and securitized by Wachovia Bank from 1995 through November 2007 was approximately $87.9 billion. Approximately $81.0 billion of such commercial mortgage loans were securitized by an affiliate of Wachovia Bank acting as depositor, and approximately $6.9 billion were securitized by an unaffiliated entity acting as depositor.
Since 2010, and following the merger of Wachovia Bank into Wells Fargo Bank, Wells Fargo Bank has resumed its active participation in the securitization of commercial and multifamily mortgage loans. Wells Fargo Bank originates commercial and multifamily mortgage loans and, together with other mortgage loan sellers and sponsors, participates in the securitization of such mortgage loans by transferring them to the Depositor or to an unaffiliated securitization depositor. In coordination with its affiliate, Wells Fargo Securities, LLC, and other underwriters, Wells Fargo Bank works with rating agencies, mortgage loan sellers, subordinated debt purchasers and master servicers in structuring securitizations in which it is a sponsor, mortgage loan seller and originator. For the twelve-month period ended December 31, 2014, Wells Fargo Bank securitized commercial and multifamily mortgage loans with an aggregate original principal balance of approximately $5.95 billion. Since the beginning of 2010, Wells Fargo Bank originated approximately 1,073 fixed-rate commercial and multifamily mortgage loans with an aggregate original principal balance of approximately $21.2 billion, which were included in 51 securitization transactions. The properties securing these loans include multifamily, office, retail, industrial, hospitality and self-storage properties. Wells Fargo Bank and certain of its affiliates also originate other commercial and multifamily mortgage loans that are not securitized, including subordinated and mezzanine loans.
In addition to commercial and multifamily mortgage loans, Wells Fargo Bank and its affiliates have originated and securitized residential mortgage loans, auto loans, home equity loans, credit card receivables and student loans. Wells Fargo Bank and its affiliates have also served as sponsors, issuers, master servicers, servicers, certificate administrators, custodians and trustees in a wide array of securitization transactions.
See “The Sponsor” in the accompanying prospectus.
Wells Fargo Bank’s Commercial Mortgage Loan Underwriting
General. Wells Fargo Bank’s commercial real estate finance group has the authority, with the approval from the appropriate credit authority, to originate fixed-rate, first lien commercial, multifamily or manufactured housing community mortgage loans for securitization. Wells Fargo Bank’s commercial real estate finance operation is staffed by real estate professionals. Wells Fargo Bank’s loan underwriting group is an integral component of the commercial real estate finance group which also includes groups responsible for loan origination and closing mortgage loans.
Upon receipt of an executed loan application, Wells Fargo Bank’s loan underwriters commence a review of the borrower’s financial condition and creditworthiness and the real property which will secure the loan.
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Notwithstanding the discussion below, given the unique nature of income-producing real properties, the underwriting and origination procedures and the credit analysis with respect to any particular multifamily or commercial mortgage loan may differ significantly from one asset to another, and will be driven by circumstances particular to that property, including, among others, its type, current use, physical quality, size, environmental condition, location, market conditions, capital reserve requirements and additional collateral, tenants and leases, borrower identity, borrower sponsorship and/or performance history, and certain other factors. Consequently, we cannot assure you that the underwriting of any particular multifamily or commercial mortgage loan will conform to each of the general procedures described in this “—Wells Fargo Bank’s Commercial Mortgage Loan Underwriting” section. For important information about the circumstances that have affected the underwriting of the mortgage loans in the mortgage pool, see the “Risk Factors” and “Description of the Mortgage Pool—Representations and Warranties” sections of this free writing prospectus and the other subsections of this “Transaction Parties” section.
If a mortgage loan exhibits any one of the following credit positive characteristics, variances from general underwriting/origination procedures described below may be considered acceptable under the circumstances indicated: (i) low loan-to-value ratio; (ii) high debt service coverage ratio; (iii) experienced sponsor(s)/guarantor(s) with financial wherewithal; and (iv) elements of recourse included in the loan.
Loan Analysis. Generally, Wells Fargo Bank performs both a credit analysis and collateral analysis with respect to a loan applicant and the real estate that will secure the loan. In general, credit analysis of the borrower and the real estate includes a review of historical financial statements (or, in the case of acquisitions, often only current financial statements), rent rolls, certain leases, third-party credit reports, judgments, liens, bankruptcy and pending litigation searches and, if applicable, the loan payment history of the borrower. Wells Fargo Bank typically performs a qualitative analysis which incorporates independent credit checks and published debt and equity information with respect to certain principals of the borrower as well as the borrower itself. Borrowers are generally required to be single-purpose entities. The collateral analysis typically includes an analysis of the following, to the extent available and applicable based on property type: historical property operating statements, rent rolls, operating budgets, a projection of future performance, and a review of certain tenant leases. Depending on the type of collateral property and other factors, the credit of key tenants may also be reviewed. Each mortgaged property is generally inspected by a Wells Fargo Bank underwriter or qualified designee. Wells Fargo Bank generally requires third-party appraisals, as well as environmental and property condition reports and, if determined by Wells Fargo Bank to be applicable, seismic reports. Each report is reviewed for acceptability by a staff member of Wells Fargo Bank or a third-party consultant. Generally, the results of these reviews are incorporated into the underwriting report. In some instances, one or more of the procedures were waived or modified by Wells Fargo Bank where it was determined not to adversely affect the mortgage loans originated by it in any material respect.
Loan Approval. Prior to loan closing, all mortgage loans to be originated by Wells Fargo Bank must be approved by one or more officers of Wells Fargo Bank (depending on loan size), who may approve a mortgage loan as recommended, request additional due diligence, modify the loan terms or decline a loan transaction.
DSC Ratios and LTV Ratios. Generally, the debt service coverage ratios for Wells Fargo Bank mortgage loans will be equal to or greater than 1.20x;provided,however, that variances may be made when consideration is given to circumstances particular to the mortgage loan, the related mortgaged property, loan-to-value ratio, reserves or other
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factors. For example, Wells Fargo Bank may originate a mortgage loan with a debt service coverage ratio below 1.20x based on, among other things, the amortization features of the mortgage loan (for example, if the mortgage loan provides for relatively rapid amortization), the type of tenants and leases at the mortgaged property, the taking of additional collateral such as reserves, letters of credit and/or guarantees, Wells Fargo Bank’s judgment of improved property and/or market performance in the future and/or other relevant factors.
Generally, the loan-to-value ratio for Wells Fargo Bank mortgage loans will be equal to orless than 80%;provided,however, variances may be made when consideration is given to circumstances particular to the mortgage loan, the related mortgaged property, debt service coverage, reserves or other factors. For example, Wells Fargo Bank may originate a mortgage loan with a loan-to-value ratio above 80% based on, among other things, the amortization features of the mortgage loan (for example, if the mortgage loan provides for relatively rapid amortization), the type of tenants and leases at the related mortgaged property, the taking of additional collateral such as reserves, letters of credit and/or guarantees, Wells Fargo Bank’s judgment of improved property and/or performance in the future and/or other relevant factors.
While the foregoing discussion generally reflects how calculations of debt service coverage ratios are made, it does not necessarily reflect the specific calculations made to determine the debt service coverage ratio disclosed in this free writing prospectus with respect to the mortgage loans to be sold to us by Wells Fargo Bank for deposit into the Trust Fund. For specific details on the calculations of debt service coverage ratios in this free writing prospectus, see Annex B to this free writing prospectus.
Additional Debt. When underwriting a multifamily or commercial mortgage loan, Wells Fargo Bank will take into account whether the mortgaged property and/or direct or indirect interest in a related borrower are encumbered by additional debt and will analyze the likely effect of that additional debt on repayment of the subject mortgage loan. It is possible that Wells Fargo Bank or an affiliate will be the lender on that additional debt, and may either sell such debt to an unaffiliated third party or hold it in inventory.
The combined debt service coverage ratios and loan-to-value ratios of a mortgage loan and the related additional debt may be significantly below 1.20x and significantly above 80%, notwithstanding that the mortgage loan by itself may satisfy such guidelines.
Assessments of Property Condition. As part of the underwriting process, Wells Fargo Bank will analyze the condition of the real property collateral for a prospective multifamily or commercial mortgage loan. To aid in that analysis, Wells Fargo Bank will typically inspect or retain a third party to inspect the property and will in most cases obtain the property assessments and reports described below.
Appraisals. Wells Fargo Bank will, in most cases, require that the real property collateral for a prospective multifamily or commercial mortgage loan be appraised by a state-certified appraiser, an appraiser belonging to the “Appraisal Institute”, a membership association of professional real estate appraisers, or an otherwise qualified appraiser. In addition, Wells Fargo Bank will generally require that those appraisals be conducted in accordance with the Uniform Standards of Professional Appraisal Practices developed by The Appraisal Foundation, a not-for-profit organization established by the appraisal profession. Furthermore, the appraisal report will usually include or be accompanied by a separate letter that includes a statement by the appraiser that the guidelines in Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 were followed in preparing the appraisal. In some cases, however, Wells Fargo Bank may establish the value
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of the subject real property collateral based on a cash flow analysis, a recent sales price or another method or benchmark of valuation.
Environmental Assessments. Wells Fargo Bank will, in most cases, require a Phase I environmental assessment with respect to the real property collateral for a prospective multifamily or commercial mortgage loan. However, when circumstances warrant, Wells Fargo Bank may utilize an update of a prior environmental assessment, a transaction screen or a desktop review. Alternatively, Wells Fargo Bank might forego an environmental assessment in limited circumstances, such as when it has obtained the benefits of an environmental insurance policy or an environmental guarantee. Furthermore, an environmental assessment conducted at any particular real property collateral will not necessarily cover all potential environmental issues. For example, an analysis for radon, lead-based paint and lead in drinking water will usually be conducted only at multifamily rental properties and only when Wells Fargo Bank or the environmental consultant believes that special circumstances warrant such an analysis.
Depending on the findings of the initial environmental assessment, Wells Fargo Bank may require additional record searches or environmental testing, such as a Phase II environmental assessment with respect to the real property collateral.
Engineering Assessments. In connection with the origination process, Wells Fargo Bank may require that an engineering firm inspect the real property collateral for any prospective multifamily or commercial mortgage loan to assess the structure, exterior walls, roofing, interior structure and/or mechanical and electrical systems. Based on the resulting report, Wells Fargo Bank will determine the appropriate response, if any, to any recommended repairs, corrections or replacements and any identified deferred maintenance.
Seismic Report. In general, prospective borrowers seeking loans secured by properties located in California or in seismic zones 3 or 4 obtain a seismic engineering report of the building and, based thereon and on certain statistical information, an estimate of damage based on the percentage of the replacement cost of the building in an earthquake scenario. This percentage of the replacement cost is expressed in terms of probable maximum loss (“PML”), probable loss (“PL”), or scenario expected loss (“SEL”). Generally, any of the mortgage loans as to which the property was estimated to have PML, PL or SEL in excess of 20% of the estimated replacement cost, would either be subject to a lower loan-to-value ratio limit at origination, be conditioned on seismic upgrading (or appropriate reserves or letter of credit for retrofitting), be conditioned on satisfactory earthquake insurance, or be structured with a degree of recourse to a guarantor.
Zoning and Building Code Compliance. In connection with the origination of a multifamily or commercial mortgage loan, Wells Fargo Bank will generally consider whether the use and occupancy of the related real property collateral is in material compliance with zoning, land-use, building rules, regulations and orders then applicable to that property. Evidence of this compliance may be in the form of one or more of the following: legal opinions; surveys; recorded documents; temporary or permanent certificates of occupancy; letters from government officials or agencies, including applicable land use and zoning regulations; title insurance endorsements; engineering or consulting reports; and/or representations by the related borrower.
Where a mortgaged property as currently operated is a permitted nonconforming use and/or the structure and the improvements may not be rebuilt to the same dimensions or used in the same manner in the event of a major casualty, Wells Fargo Bank will consider whether—
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· | any major casualty that would prevent rebuilding has a sufficiently remote likelihood of occurring; |
· | casualty insurance proceeds together with the value of any additional collateral would be available in an amount estimated by Wells Fargo Bank to be sufficient to pay off the related mortgage loan in full; |
· | the real property collateral, if permitted to be repaired or restored in conformity with current law, would in Wells Fargo Bank’s judgment constitute adequate security for the related mortgage loan; |
· | whether a variance or other similar change in applicable zoning restrictions is potentially available, or whether the applicable governing entity is likely to enforce the related limitations; and/or |
· | to require the related borrower to obtain law and ordinance insurance and/or alternative mitigant is in place. |
Escrow Requirements. Generally, Wells Fargo Bank requires most borrowers to fund various escrows for taxes and insurance, capital expenses and replacement reserves. Generally, the required escrows for mortgage loans originated by Wells Fargo Bank are as follows:
· | Taxes—Typically, an initial deposit and monthly escrow deposits equal to 1/12th of the annual property taxes (based on the most recent property assessment and the current millage rate) are required to provide Wells Fargo Bank with sufficient funds to satisfy all taxes and assessments. Tax escrows may not be required if a single tenant property and the tenant is required to pay taxes directly. Wells Fargo Bank may waive this escrow requirement under certain circumstances. |
· | Insurance—If the property is insured under an individual policy (i.e., the property is not covered by a blanket policy), typically an initial deposit and monthly escrow deposits equal to 1/12th of the annual property insurance premium are required to provide Wells Fargo Bank with sufficient funds to pay all insurance premiums. Insurance escrows may not be required if (i) the borrower maintains a blanket insurance policy, or (ii) a single tenant property (which may include ground leased tenants) and the tenant is required to maintain property insurance. Wells Fargo Bank may waive this escrow requirement under certain circumstances. |
· | Replacement Reserves—Replacement reserves are generally calculated in accordance with the expected useful life of the components of the property during the term of the mortgage loan. Annual replacement reserves are generally underwritten to the suggested replacement reserve amount from an independent, third-party property condition or engineering report, or to certain minimum requirements by property type. Replacement reserves may not be required if the related mortgaged property is a single tenant property and the related tenant is responsible for all repairs and maintenance, including those required with respect to the roof and improvement structure. Wells Fargo Bank may waive this escrow requirement under certain circumstances. |
· | Completion Repair/Environmental Remediation—Typically, a completion repair or remediation reserve is required where an environmental or engineering report suggests that such reserve is necessary. Upon funding of the mortgage loan, Wells Fargo Bank generally requires that at least 115% to 125% of the estimated costs of |
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repairs or replacements be reserved and generally requires that repairs or replacements be completed within a year after the funding of the applicable mortgage loan. Wells Fargo Bank may waive this escrow requirement or adjust the timing to complete repairs under certain circumstances.
· | Tenant Improvement/Lease Commissions—In most cases, various tenants have lease expirations within the mortgage loan term. To mitigate this risk, special reserves may be required to be funded either at closing of the mortgage loan and/or during the related mortgage loan term to cover certain anticipated leasing commissions or tenant improvement costs which might be associated with re-leasing the space occupied by such tenants. Tenant Improvement/Lease Commissions may not be required for single tenant properties with leases that extend beyond the loan term or where rent at the mortgaged property is considered below market. Wells Fargo Bank may waive this escrow requirement under certain circumstances. |
Furthermore, Wells Fargo Bank may accept an alternative to a cash escrow or reserve from a borrower, such as a letter of credit or a guarantee from the borrower or an affiliate of the borrower or periodic evidence that the items for which the escrow or reserve would have been established are being addressed. In some cases, Wells Fargo Bank may determine that establishing an escrow or reserve is not warranted in the event of the existence of one or more of the credit positive characteristics discussed above, or given the amounts that would be involved and Wells Fargo Bank’s evaluation of the ability of the mortgaged property, the borrower or a holder of direct or indirect ownership interests in the borrower to bear the subject expense or cost absent creation of an escrow or reserve.
Co-Originations. From time to time, Wells Fargo Bank originates mortgage loans together with other financial institutions. The resulting mortgage loans are evidenced by two or more promissory notes, at least one of which will reflect Wells Fargo Bank as the payee. Wells Fargo Bank has in the past and may in the future deposit such promissory notes for which it is named as payee with one or more securitization trusts, while its co-originators have in the past and may in the future deposit such promissory notes for which they are named payee into other securitization trusts. No Wells Fargo Bank Mortgage Loan to be included in the Trust Fund has been co-originated as described in this paragraph.
Exceptions. One or more of Wells Fargo Bank’s Mortgage Loans may vary from the specific Wells Fargo Bank’s underwriting guidelines described above when additional credit positive characteristics are present as discussed above. In addition, in the case of one or more of Wells Fargo Bank’s Mortgage Loans, Wells Fargo Bank or another originator may not have applied each of the specific underwriting guidelines described above as the result of case-by-case permitted flexibility based upon other compensating factors. For any material exceptions to Wells Fargo Bank’s underwriting guidelines described above in respect of the Wells Fargo Bank Mortgage Loans, see “Description of the Mortgage Pool—Exceptions to Underwriting Guidelines” in this free writing prospectus.
Review of Mortgage Loans for Which Wells Fargo Bank is the Sponsor
Overview. Wells Fargo Bank, in its capacity as the Sponsor of the Wells Fargo Bank Mortgage Loans, has conducted a review of the Wells Fargo Bank Mortgage Loans it is selling to the Depositor designed and effected to provide reasonable assurance that the disclosure related to the Wells Fargo Bank Mortgage Loans is accurate in all material respects. Wells Fargo Bank determined the nature, extent and timing of the review and the level of assistance provided by any third parties. The review of the Wells Fargo Bank Mortgage Loans was performed by a deal team comprised of real estate and securitization professionals who are employees of Wells Fargo Bank (collectively, the “Wells Fargo Bank
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Deal Team”) with the assistance of certain third parties. Wells Fargo Bank has ultimate authority and control over, and assumes all responsibility for and attributes to itself, the review of the Mortgage Loans that it is selling to the Depositor and the review’s findings and conclusions. The review procedures described below were employed with respect to all of the Wells Fargo Bank Mortgage Loans (rather than relying on sampling procedures), except that certain review procedures were solely relevant to the large loan disclosures in this free writing prospectus, as further described below.
Database. To prepare for securitization, members of the Wells Fargo Bank Deal Team created a database of loan-level and property-level information relating to each Wells Fargo Bank Mortgage Loan. The database was compiled from, among other sources, the related mortgage loan documents, third-party reports (appraisals, environmental site assessments, property condition reports, zoning reports and applicable seismic studies), insurance policies, borrower-supplied information (including, to the extent available, rent rolls, leases, operating statements and budgets) and information collected by Wells Fargo Bank during the underwriting process. Prior to securitization of each Wells Fargo Bank Mortgage Loan, the Wells Fargo Bank Deal Team may have updated the information in the database with respect to such Wells Fargo Bank Mortgage Loan based on current information provided by the related servicer relating to loan payment status and escrows, updated operating statements, rent rolls and leasing activity, and information otherwise brought to the attention of the Wells Fargo Bank Deal Team. Such updates were not intended to be, and do not serve as, a re-underwriting of any Mortgage Loan.
A data tape (the “Wells Fargo Bank Data Tape”) containing detailed information regarding each Wells Fargo Bank Mortgage Loan was created from the information in the database referred to in the prior paragraph. The Wells Fargo Bank Data Tape was used by the Wells Fargo Bank Deal Team to provide the numerical information regarding the Wells Fargo Bank Mortgage Loans in this free writing prospectus.
Data Comparisons and Recalculation. The Depositor, on behalf of Wells Fargo Bank, engaged a third-party accounting firm to perform certain data comparison and recalculation procedures which were designed or provided by Wells Fargo Bank relating to information in this free writing prospectus regarding the Wells Fargo Bank Mortgage Loans. These procedures included:
· | comparing the information in the Wells Fargo Bank Data Tape against various source documents provided by Wells Fargo Bank; |
· | comparing numerical information regarding the Wells Fargo Bank Mortgage Loans and the related Mortgaged Properties disclosed in this free writing prospectus against the information contained in the Wells Fargo Bank Data Tape; and |
· | recalculating certain percentages, ratios and other formulae relating to the Wells Fargo Bank Mortgage Loans disclosed in this free writing prospectus. |
Legal Review. In anticipation of the securitization of each Wells Fargo Bank Mortgage Loan, Mortgage Loan Seller counsel promulgated a form of legal summary to be completed by origination counsel that, among other things, set forth certain material terms and property diligence information, and elicited information concerning potentially outlying attributes of the mortgage loan as well as any related mitigating considerations. Mortgage Loan Seller’s counsel reviewed the legal summaries for each Wells Fargo Bank Mortgage Loan, together with pertinent parts of the Mortgage Loan documentation and property diligence materials, in connection with preparing or corroborating the accuracy of certain loan disclosure in this free writing prospectus. In addition, Mortgage Loan Seller counsel
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reviewed Wells Fargo Bank’s representations and warranties set forth on Annex C-1 to this free writing prospectus and, if applicable, identified exceptions to those representations and warranties.
Securitization counsel was also engaged to assist in the review of the Wells Fargo Bank Mortgage Loans. Such assistance included, among other things, a review of a due diligence questionnaire completed by the Wells Fargo Bank Deal Team. Securitization counsel also reviewed the property release provisions, if any, for each Wells Fargo Bank Mortgage Loan with multiple Mortgaged Properties for compliance with the REMIC provisions.
Mortgage Loan Seller’s counsel or securitization counsel also assisted in the preparation of the mortgage loan summaries set forth in Annex B to this free writing prospectus, based on their respective reviews of pertinent sections of the related mortgage loan documents and other loan information.
Other Review Procedures. Prior to securitization, Wells Fargo Bank confirmed with the related servicers for the Wells Fargo Bank Mortgage Loans that, to the best of such servicers’ knowledge and except as previously identified, material events concerning the related Mortgage Loan, the Mortgaged Property and the borrower and guarantor had not occurred since origination, including, but not limited to, (i) loan modifications or assumptions, or releases of the related borrower or Mortgaged Property; (ii) damage to the Mortgaged Property that materially and adversely affects its value as security for the Mortgage Loan; (iii) pending condemnation actions; (iv) litigation, regulatory or other proceedings against the Mortgaged Property, borrower or guarantor, or notice of non-compliance with environmental laws; (v) bankruptcies involving any borrower or guarantor, or any tenant occupying a single tenant property; and (vi) any existing or incipient material defaults.
The Wells Fargo Bank Deal Team also consulted with Wells Fargo Bank personnel responsible for the origination of the Wells Fargo Bank Mortgage Loans to confirm that the Wells Fargo Bank Mortgage Loans were originated in compliance with the origination and underwriting criteria described above under “—Wells Fargo Bank’s Commercial Mortgage Loan Underwriting,” as well as to identify any material deviations from those origination and underwriting criteria. See “Description of the Mortgage Pool—Exceptions to Underwriting Guidelines” in this free writing prospectus.
Findings and Conclusions. Wells Fargo Bank found and concluded with reasonable assurance that the disclosure regarding the Wells Fargo Bank Mortgage Loans in this free writing prospectus is accurate in all material respects. Wells Fargo Bank also found and concluded with reasonable assurance that the Wells Fargo Bank Mortgage Loans were originated in accordance with Wells Fargo Bank’s origination procedures and underwriting criteria, except as described above under “Description of the Mortgage Pool—Exceptions to Underwriting Guidelines”.
Review Procedures in the Event of a Mortgage Loan Substitution. Wells Fargo Bank will perform a review of any Wells Fargo Bank Mortgage Loan that it elects to substitute for a Wells Fargo Bank Mortgage Loan in the pool in connection with a material breach of a representation or warranty or a material document defect. Wells Fargo Bank, and if appropriate its legal counsel, will review the mortgage loan documents and servicing history of the substitute mortgage loan to confirm it meets each of the criteria required under the terms of the related Mortgage Loan Purchase Agreement and the Pooling and Servicing Agreement (the “Qualification Criteria”). Wells Fargo Bank may engage a third party accounting firm to compare the Qualification Criteria against the underlying source documentation to verify the accuracy of the review by Wells Fargo Bank and to confirm any
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numerical and/or statistical information to be disclosed in any required filings under the Exchange Act. Legal counsel will also be engaged by Wells Fargo Bank to render any tax opinion required in connection with the substitution.
Compliance with Rule 15Ga-1 under the Exchange Act
The transaction documents for certain prior transactions in which Wells Fargo Bank securitized commercial mortgage loans or participation interests (“CRE Loans”) contain covenants requiring the repurchase or replacement of an underlying CRE Loan for the breach of a related representation or warranty under various circumstances if the breach is not cured. The following table provides information regarding the demand, repurchase and replacement activity with respect to the mortgage loans securitized by Wells Fargo Bank (or a predecessor), which activity occurred during the period from April 1, 2012 to March 31, 2015 or is still outstanding. Unless otherwise indicated, the information in the table and the footnotes to the table is reflected as of the last day of the most recent calendar quarter for which a Form ABS-15G was filed by Wells Fargo Bank and Wells Fargo Commercial Mortgage Securities, Inc. as indicated immediately below the table and footnotes.
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Name of Issuing Entity(1) | Check if Regi- stered | Name of Originator | Total Assets in ABS by Originator(2) | Assets That Were Subject of Demand(3) | Assets That Were Repurchased or Replaced(3)(4) | Assets Pending Repurchase or Replacement (within cure period)(3)(5) | Demand in Dispute(3)(6) | Demand Withdrawn(3)(7) | Demand Rejected(3) | ||||||||||||||
# | $ | % of principal balance | # | $ | % of principal balance | # | $ | % of principal balance | # | $ | % of principal balance | # | $ | % of principal balance | # | $ | % of principal balance | # | $ | % of principal balance | |||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | (m) | (n) | (o) | (p) | (q) | (r) | (s) | (t) | (u) | (v) | (w) | (x) |
Asset Class – Commercial Mortgages(1) | |||||||||||||||||||||||
Wachovia Commercial Mortgage Securities, Inc., Commercial Mortgage Pass-Through Certificates Series 2006-C28 | X | Wachovia Bank, National Association | 113 | 2,502,246,884.83 | 69.60 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 |
CIK #: 1376448 | Nomura Credit & Capital, Inc. | 44 | 823,722,922.57 | 22.91 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | |
Artesia Mortgage Capital Corporation(8) | 50 | 269,226,893.21 | 7.49 | 1 | 13,775,604.00 | 0.63 | 0.00 | 0 | 0.00 | 0 | 0.00 | 0.00 | 1 | 13,775,604.00 | 0.63 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | ||
Issuing Entity Subtotal | 207 | 3,595,196,700.61 | 100.00 | 1 | 13,775,604.00 | 0.63 | 0.00 | 0 | 0.00 | 0 | 0.00 | 0.00 | 1 | 13,775,604.00 | 0.63 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | ||
Wachovia Commercial Mortgage Securities, Inc., Commercial Mortgage Pass-Through Certificates Series 2006-C24 | X | Wachovia Bank, National Association | 84 | 1,625,096,687.00 | 81.18 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 |
CIK #: 1354736 | Artesia Mortgage Capital Corporation (9) | 26 | 214,877,938.00 | 10.73 | 1 | 35,588,502.00 | 3.23 | 0.00 | 0 | 0.00 | 0 | 0.00 | 0.00 | 1 | 35,588,502.00 | 3.23 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | |
JPMorgan Chase Bank, National Association | 13 | 102,674,000.00 | 5.13 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | ||
Nomura Credit & Capital, Inc. | 9 | 59,275,000.00 | 2.96 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | ||
Issuing Entity Subtotal | 119 | 2,001,932,625.00 | 100.00 | 1 | 35,588,502.00 | 3.23 | 0.00 | 0 | 0.00 | 0 | 0.00 | 0.00 | 1 | 35,588,502.00 | 3.23 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | ||
Wachovia Commercial Mortgage Securities, Inc., Commercial Mortgage Pass-Through Certificates Series 2006-C33 | X | Wachovia Bank, National Association(10) | 88 | 2,043,814,381.00 | 56.74 | 1 | 87,928,158.00 | 2.98 | 0.00 | 0 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 1 | 87,928,158.00 | 2.98 |
CIK #: 1406873 | Barclays Capital Real Estate Inc. | 33 | 724,003,952.00 | 20.10 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | |
Nomura Credit & Capital, Inc. | 17 | 639,286,752.00 | 17.75 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | ||
Artesia Mortgage Capital Corporation | 28 | 195,018,502.00 | 5.41 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | ||
Issuing Entity Subtotal | 166 | 3,602,123,586.00 | 100.00 | 1 | 87,928,158.00 | 2.98 | 0.00 | 0 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 1 | 87,928,158.00 | 2.98 | ||
Commercial Mortgages Asset Class Total | 492 | 9,199,243,911.61 | 3 | 137,316,660.00 | 0.00 | 0 | 0 | 0.00 | 2 | 49,364,106.00 | 0 | 0.00 | 1 | 87,928,158.00 |
(1) | In connection with the preparation of this table, Wells Fargo Bank undertook the following steps to gather the information required by Rule 15Ga-1 (“Rule 15Ga-1”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”): (i) identifying all asset-backed securities transactions in which Wells Fargo Bank (or a predecessor) acted as a securitizer, (ii) performing a diligent search of the records of Wells Fargo Bank and the records of affiliates of Wells Fargo Bank that acted as securitizers in transactions of commercial mortgage loans for all relevant information, (iii) reviewing appropriate documentation from all relevant transactions to determine the parties responsible for enforcing representations and warranties, and any other parties who might have received repurchase requests (such parties, “Demand Entities”), and (iv) making written request of each Demand Entity to provide any information in its possession regarding |
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requests or demands to repurchase any loans for breach of a representation or warranty with respect to any relevant transaction. In this effort, Wells Fargo Bank made written requests of all trustees and unaffiliated co-sponsors of applicable commercial mortgage-backed securities transactions. Wells Fargo Bank followed up written requests made of Demand Entities as it deemed appropriate. In addition, Wells Fargo Bank requested information from master servicers, special servicers, trustees and other Demand Entities as to demands (from investors or others) that occurred prior to July 22, 2010. It is possible that this disclosure does not contain information about all investor demands upon those parties made prior to July 22, 2010.
The repurchase activity reported herein is described in terms of a particular loan’s status as of the end of the reporting period (for columns j-x).
(2) | “Originator” generally refers to the party identified in securities offering materials at the time of issuance for purposes of meeting applicable SEC disclosure requirements (for columns d-f). |
(3) | Includes only new demands received during the reporting period. (For columns g-i). |
In the event demands were received in prior reporting periods, such activity is being reported as assets pending repurchase or replacement within the cure period (columns m/n/o) or as demands in dispute (columns p/q/r), as applicable, until the earlier of the reporting of (i) the repurchase or replacement of such asset (columns j/k/l), (ii) the withdrawal of such demand (columns s/t/u), or (iii) the rejection of such demand (columns v/w/x), as applicable.
(4) | Includes assets for which a reimbursement payment is in process and where the asset has been otherwise liquidated by or on behalf of the issuing entity at the time of initiation of such reimbursement process. Where an underlying asset has paid off or otherwise been liquidated by or on behalf of the issuing entity (other than via a repurchase by the obligated party) during a reporting period, the corresponding principal balance utilized in calculating columns (g) through (x) will be zero. (For columns j-l) |
(5) | Includes assets which are subject to a demand and within the cure period, but where no decision has yet been made to accept or contest the demand. (For columns m-o) |
(6) | Includes assets pending repurchase or replacement outside of the cure period. (For columns p-r) |
(7) | Includes assets for which a reimbursement payment is in process, and where the asset has not been repurchased or replaced and remains in the transaction. Also includes assets for which the requesting party rescinds or retracts the demand in writing. (For columns s-u) |
(8) | U.S. Bank National Association (“U.S. Bank”), as Trustee for Registered Holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2006-28 v. Dexia Real Estate Capital Markets, Case No. 12 Civ 9412, filed in the United States District Court for the Southern District of New York. On September 29, 2011, Dexia Real Estate Capital Markets (“Dexia”) received a letter from CWCapital Asset Management LLC as special servicer for the issuing trust demanding that Dexia cure alleged defects in the documentation of Loan #58 Marketplace Retail and Office Center. By letter dated December 29, 2011, Dexia rejected the issuing trust’s demand. U.S. Bank, as trustee for the issuing trust, filed a complaint against Dexia (on or about December 27, 2012) arguing that Dexia had breached the terms of the mortgage loan purchase agreement in light of the determination in a Minnesota enforcement action against the guarantors of Loan #58 Marketplace Retail and Office Center that the form of the guaranty sold to U.S. Bank pursuant to the mortgage loan purchase agreement had not been signed by the guarantors. U.S. Bank, in its complaint, seeks a judgment requiring Dexia to repurchase Loan #58 Marketplace Retail and Office Center and also requests an award of damages alleged to total approximately $16.5 million. Dexia filed a Notice of Motion to Dismiss and a Memorandum in Support of its Motion to Dismiss on January 25, 2013. Judge Shira A. Scheindlin entered an order denying Dexia’s motion on June 6, 2013. After completion of discovery, U.S. Bank and Dexia filed cross-motions for summary judgment and on July 9, 2014 Judge Scheindlin entered an Opinion and Order granting the summary judgment motion of U.S. Bank and denying the summary judgment motion of Dexia. On September 12, 2014, Judge Scheindlin entered its judgment directing Dexia to repurchase the loan for $19,627,961.66. Dexia has appealed the judgment and the Opinion and Order because Dexia believes they should be reversed. The appeal has been fully briefed. |
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(9) | U.S. Bank, as successor-in-interest to Bank of America, National Association, as successor by merger to LaSalle Bank National Association, as Trustee for Registered Holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2006-C24, made demand on Dexia by letter dated April 3, 2013 (the “Demand Letter”) for repurchase of loan #12 made to Metroplaza Hotel, LLC. In the Demand Letter, U.S. Bank claimed that Dexia breached the representations and warranties made in the mortgage loan purchase agreement for Dexia’s failure to record a UCC financing statement against Inn at Woodbridge Inc. (“Woodbridge”), the tenant under a master lease and holder of a leasehold interest in a portion of the mortgaged property that secures loan #12. U.S. Bank claims that such failure to record a UCC financing statement against Woodbridge resulted in U.S. Bank not having a perfected security interest and enforceable lien in the personalty owned by Woodbridge and pledged as collateral for loan #12. Dexia responded to the Demand Letter on July 2, 2013 and rejected the repurchase demand. Dexia believes the demand was untimely, having been made beyond New York’s six-year statute of limitations for such claims. Dexia has received no further communication from U.S. Bank. |
(10) | The amounts in the table with respect to this loan are reflected as of September 30, 2013, which was the last day of the quarterly reporting period in which this loan repurchase request was rejected. The outstanding principal balance of this loan as of December 31, 2014 was approximately $87,085,982. |
The information for Wells Fargo Bank as a securitizer of CRE Loans required to be set forth in a Form ABS-15G for the quarterly reporting period from January 1, 2015 through March 31, 2015 was set forth in (i) a Form ABS-15G filed by Wells Fargo Bank with the SEC on May 14, 2015, if such information relates to asset-backed securities in the CRE Loan asset class in which Wells Fargo Bank (or a predecessor) was a sponsor but Wells Fargo Commercial Mortgage Securities, Inc. (or a predecessor) was not the depositor, and (ii) a Form ABS-15G filed by Wells Fargo Commercial Mortgage Securities, Inc. with the SEC on May 14, 2015, if such information relates to asset-backed securities in the CRE Loan asset class in which Wells Fargo Bank (or a predecessor) was a sponsor and Wells Fargo Commercial Mortgage Securities, Inc. (or a predecessor) was the depositor. Such Forms ABS-15G are available electronically through the SEC’s EDGAR system. The Central Index Key number of Wells Fargo Bank is 0000740906. The Central Index Key number of Wells Fargo Commercial Mortgage Securities, Inc. is 0000850779.
The information set forth under “—Wells Fargo Bank, National Association” has been provided by Wells Fargo Bank.
Rialto Mortgage Finance, LLC
General
Rialto Mortgage Finance, LLC, a Delaware limited liability company formed in April 2013 (“Rialto Mortgage”), is wholly-owned by Rialto Capital Management, LLC, a Delaware limited liability company that was formed in January 2009. The executive offices of Rialto Mortgage are located at 600 Madison Avenue, 12th Floor, New York, New York 10022.
Rialto Mortgage’s Securitization Program
As a sponsor and mortgage loan seller, Rialto Mortgage originates and acquires commercial real estate mortgage loans with a general focus on stabilized income-producing properties. All of the Mortgage Loans being sold to the Depositor by Rialto Mortgage (the “Rialto Mortgage Loans”) were originated or co-originated by Rialto Mortgage. This is the eighteenth commercial real estate debt investment securitization to which Rialto Mortgage is contributing commercial real estate debt investments. The commercial real estate debt investments originated and acquired by Rialto Mortgage may include mortgage loans,
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mezzanine loans, B notes, participation interests, rake bonds, subordinate mortgage loans and preferred equity investments. Rialto Mortgage securitized approximately $712 million and $1.49 billion of multifamily and commercial mortgage loans in public and private offerings during the calendar years 2013 and 2014, respectively.
Neither Rialto Mortgage nor any of its affiliates will insure or guarantee distributions on the Certificates. The Certificateholders will have no rights or remedies against Rialto Mortgage for any losses or other claims in connection with the Certificates or the Mortgage Loans except in respect of the repurchase and substitution obligations for material document defects or material breaches of representations and warranties made by Rialto Mortgage in the applicable Mortgage Loan Purchase Agreement as described under “Description of the Mortgage Pool—Cures, Repurchases and Substitutions” in this free writing prospectus.
Rialto Mortgage’s Underwriting Standards and Loan Analysis
Each of the Mortgage Loans originated by Rialto Mortgage was generally originated in accordance with the underwriting criteria described below. Each lending situation is unique, however, and the facts and circumstances surrounding a particular mortgage loan, such as the quality and location of the real estate collateral, the sponsorship of the borrower and the tenancy of the collateral, will impact the extent to which the general guidelines below are applied to that specific loan. These underwriting criteria are general, and we cannot assure you that every loan will comply in all respects with the guidelines.
Loan Analysis. Generally, Rialto Mortgage performs both a credit analysis and collateral analysis with respect to a loan applicant and the real estate that will secure a mortgage loan. In general, the analysis of a borrower includes a review of money laundering and background checks and the analysis of its sponsor includes a review of money laundering and background checks, third-party credit reports, bankruptcy and lien searches, general banking references and commercial mortgage related references. In general, the analysis of the collateral includes a site visit and a review of the property’s historical operating statements (if available), independent market research, an appraisal with an emphasis on rental and sales comparables, engineering and environmental reports, the property’s historic and current occupancy, financial strengths of tenants, the duration and terms of tenant leases and the use of the property. Each report is reviewed for acceptability by a real estate finance credit officer of Rialto Mortgage. The borrower’s and property manager’s experience and presence in the subject market are also reviewed. Consideration is also given to anticipated changes in cash flow that may result from changes in lease terms or market considerations.
Borrowers are generally required to be single-purpose entities although they are generally not required to be structured to limit the possibility of becoming insolvent or bankrupt unless the loan has a principal balance of greater than $30 million, in which case additional limitations including the requirement that the borrower have at least one independent director are required.
Loan Approval. All mortgage loans must be approved by a credit committee that includes two officers of Rialto Mortgage, two officers of Rialto Capital Management LLC and one officer of Lennar Corporation. If deemed appropriate, a member of the real estate team will visit the subject property. The credit committee may approve a mortgage loan as recommended, request additional due diligence, modify the loan terms or decline a loan transaction.
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Property Analysis. Prior to origination of a loan, Rialto Mortgage typically performs, or causes to be performed, site inspections at each property. Depending on the property type, such inspections generally include an evaluation of one or more of the following: functionality, design, attractiveness, visibility and accessibility of the property as well as proximity to major thoroughfares, transportation centers, employment sources, retail areas, educational facilities and recreational areas. Such inspections generally assess the submarket in which the property is located, which may include evaluating competitive or comparable properties.
Appraisal and Loan-to-Value Ratio. Rialto Mortgage typically obtains an appraisal that complies, or is certified by the appraiser to comply, with the real estate appraisal regulations issued jointly by the federal bank regulatory agencies under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended. The loan-to-value ratio of the mortgage loan is generally based on the “as-is” value set forth in the appraisal. In certain cases, an updated appraisal is obtained.
Debt Service Coverage Ratio. In connection with the origination of an asset, Rialto Mortgage will analyze whether cash flow expected to be derived from the related real property will be sufficient to make the required payments under that transaction over its expected term, taking into account, among other things, revenues and expenses for, and other debt currently secured directly or indirectly by, or that in the future may be secured directly or indirectly by, the related real property. The debt service coverage ratio is an important measure of the likelihood of default on a particular asset. In general, the debt service coverage ratio at any given time is the ratio of—
· | the amount of income, net of expenses and required reserves, derived or expected to be derived from the related real property for a given period, to |
· | the scheduled payments of principal and interest during that given period on the subject asset and any other loans that are secured by liens of senior or equal priority on, or otherwise have a senior or equal entitlement to be repaid from the income generated by, the related real property. |
However, the amount described in the first bullet of the preceding sentence is often a highly subjective number based on a variety of assumptions regarding, and adjustments to, revenues and expenses with respect to the related real property. Accordingly, based on such subjective assumptions and analysis, we cannot assure you that the underwriting analysis of any particular asset will conform to the foregoing in every respect or to any similar analysis which may be performed by other persons or entities. For example, when calculating the debt service coverage ratio for a particular asset, Rialto Mortgage may utilize net cash flow that was calculated based on assumptions regarding projected rental income, expenses and/or occupancy. There is no assurance that such assumptions made with respect to any asset or the related real property will, in fact, be consistent with actual property performance.
Generally, the debt service coverage ratio for assets originated by Rialto Mortgage, calculated as described above, will be subject to a minimum standard at origination (generally equal to or greater than 1.20x); however, exceptions may be made when consideration is given to circumstances particular to the asset, the related real property, the associated loan-to-value ratio (as described below), reserves or other factors. For example, Rialto Mortgage may originate an asset with a debt service coverage ratio below the minimum standard at origination based on, among other things, the amortization features of the overall debt structure, the type of tenants and leases at the related real property, the taking of additional collateral such as reserves, letters of credit and/or guarantees, the
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profile of the borrower and its owners, Rialto Mortgage’s judgment of improved property and/or market performance in the future and/or other relevant factors.
Loan-to-Value Ratio. Rialto Mortgage also looks at the loan-to-value ratio of a prospective investment related to multi-family or commercial real estate as one of the factors it takes into consideration in evaluating the likelihood of recovery if a property is liquidated following a default. In general, the loan-to-value ratio of an asset related to multi-family or commercial real estate at any given time is the ratio, expressed as a percentage, of:
· | the then-outstanding principal balance of the asset and any other loans that are secured (directly or indirectly) by liens of senior or equal priority on the related real property, to |
· | the estimated value of the related real property based on an appraisal, a cash flow analysis, a recent sales price or another method or benchmark of valuation. |
Generally, the loan-to-value ratio for assets originated by Rialto Mortgage, calculated as described above, will be subject to a maximum standard at origination (generallyless than or equal to 80%); however, exceptions may be made when consideration is given to circumstances particular to the asset, the related real property, debt service coverage, reserves or other factors. For example, Rialto Mortgage may originate a multifamily or commercial real estate loan with a loan-to-value ratio above the maximum standard at origination based on, among other things, the amortization features of the overall debt structure, the type of tenants and leases at the related real property, the taking of additional collateral such as reserves, letters of credit and/or guarantees, the profile of the borrower and its owners, Rialto Mortgage’s judgment of improved property and/or market performance in the future and/or other relevant factors.
Additional Debt. When underwriting an asset, Rialto Mortgage will take into account whether the related real property and/or direct or indirect interest in a related borrower are encumbered by additional debt and will analyze the likely effect of that additional debt on repayment of the subject asset. It is possible that Rialto Mortgage or an affiliate will be the lender on that additional debt, and may either sell such debt to an unaffiliated third party or hold it for investment or future sale.
The debt service coverage ratios at origination described above under “—Debt Service Coverage Ratio” and the loan-to-value ratios at origination described above under “—Loan-to-Value Ratio” may be significantly below the minimum standard and/or significantly above the maximum standard, respectively, when calculated taking into account the existence of additional debt secured directly or indirectly by equity interests in the related borrower.
Assessments of Property Condition. As part of the origination and underwriting process, Rialto Mortgage will analyze the condition of the real property for a prospective asset. To aid in that analysis, Rialto Mortgage may, subject to certain exceptions, inspect or retain a third party to inspect the property and will in most cases obtain the property reports described below.
Appraisal Report. Rialto Mortgage will in most cases obtain an appraisal or an update of an existing appraisal from an independent appraiser that is state-certified, belonging to the Appraisal Institute, a membership association of professional real estate appraisers, or an otherwise qualified appraiser. The appraisal reports are conducted in accordance with the Uniform Standards of Professional Appraisal Practices and the appraisal report (or a
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separate letter accompanying the report) will include a statement by the appraiser that the guidelines in Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended, were followed in preparing the appraisal report.
Environmental Report. Rialto Mortgage requires that an environmental consultant prepare a Phase I environmental report or that an update of a prior environmental report, a transaction screen or a desktop review is prepared with respect to the real property related to the asset. Alternatively, Rialto Mortgage may forego an environmental report in limited circumstances, such as when it has obtained the benefits of an environmental insurance policy or an environmental guarantee. Depending on the findings of the initial environmental report, Rialto Mortgage may require additional record searches or environmental testing, such as a Phase II environmental report with respect to the subject real property. In certain cases where an environmental report discloses the existence of, or potential for, adverse environmental conditions, including as a result of the activities of identified tenants, adjacent property owners or previous owners of the subject real property, the related borrower may be required to establish operations and maintenance plans, monitor the real property, abate or remediate the condition and/or provide additional security such as letters of credit, reserves or environmental insurance policies.
· | Engineering Report. Rialto Mortgage generally requires that an engineering firm inspect the real property related to the asset to assess and prepare a report regarding the structure, exterior walls, roofing, interior structure, mechanical systems and/or electrical systems. In some cases, engineering reports are based on, and limited to, information available through visual inspection. Rialto Mortgage will consider the engineering report in connection with determining whether to address any recommended repairs, corrections or replacements in connection with origination and whether any identified deferred maintenance should be addressed in connection with origination. In some cases, Rialto Mortgage uses conclusions in the engineering reports in connection with making a determination about the necessity for escrows related to repairs and the continued maintenance of the real property. |
Seismic Report. If the real property related to an asset consists of improvements located in seismic zones 3 or 4, Rialto Mortgage generally requires a seismic report from an engineering firm to establish the probable maximum or bounded loss for the improvements at the property as a result of an earthquake. Generally, if a seismic report concludes that the related real property is estimated to have a probably maximum loss or scenario expected loss in excess of 20%, Rialto Mortgage may require retrofitting of the improvements or that the borrower obtain earthquake insurance if available at a commercially reasonable price.
Zoning and Building Code Compliance. In connection with the origination of an asset related to multifamily or commercial real estate, Rialto Mortgage will generally obtain one or more of the following to consider whether the use and occupancy of the related real property is in material compliance with zoning, land use, building rules, regulations and orders then applicable to that property: zoning reports, legal opinions, surveys, recorded documents, temporary or permanent certificates of occupancy, letters from government officials or agencies, title insurance endorsements, engineering or consulting reports and/or representations by the related borrower. In cases where the real property constitutes a legal nonconforming use or structure, Rialto Mortgage may require an endorsement to the title insurance policy and/or the acquisition of law and ordinance insurance with respect to the particular non-conformity unless it determines that: (i) the non-conformity should not have a material adverse effect on the ability of the borrower to rebuild, (ii) the real property, if permitted to be repaired or restored in conformity with current law, would in Rialto Mortgage’s judgment constitute adequate security, (iii) any major casualty that would
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prevent rebuilding has a sufficiently remote likelihood of occurring, (iv) a variance or other similar change in applicable zoning restrictions is potentially available, or the applicable governing entity is unlikely to enforce the related limitations, (v) casualty insurance proceeds together with the value of any additional collateral are expected to be available in an amount estimated by Rialto Mortgage to be sufficient to pay off all relevant indebtedness in full, and/or (vi) a cash reserve, a letter of credit or an agreement imposing recourse liability from a principal of the borrower is provided to cover losses.
Escrow Requirements. Based on its analysis of the related real property, the borrower and the principals of the borrower, Rialto Mortgage may require a borrower to fund various escrows for taxes, insurance, capital expenses, replacement reserves, re-tenanting reserves, environmental remediation and/or other matters. Rialto Mortgage conducts a case-by-case analysis to determine the need for a particular escrow or reserve. Consequently, the underlying documents for some assets do not contain provisions requiring the establishment of escrows and reserves, or only require the establishment of escrows and reserves in limited amounts and/or circumstances. Furthermore, where escrows or reserves are required, Rialto Mortgage may accept an alternative to a cash escrow or reserve from a borrower, such as a letter of credit or a guarantee from the borrower or an affiliate of the borrower or periodic evidence that the items for which the escrow or reserve would have been established are being paid or addressed. In some cases, Rialto Mortgage may determine that establishing an escrow or reserve is not warranted given the amounts that would be involved and Rialto Mortgage’s evaluation of the ability of the real property, the borrower or a holder of direct or indirect ownership interests in the borrower to bear the subject expense or cost absent creation of an escrow or reserve.
Notwithstanding the foregoing discussion, Rialto Mortgage may originate or acquire, and may have originated or acquired, real estate related loans and other investments that vary from, or do not comply with, Rialto Mortgage’s underwriting guidelines as described herein and/or such underwriting guidelines may not have been in place or may have been in place in a modified version at the time Rialto Mortgage or its affiliates originated or acquired certain assets. In addition, in some cases, Rialto Mortgage may not have strictly applied these underwriting guidelines as the result of a case-by-case permitted exception based upon other compensating factors.
Exceptions. Notwithstanding the discussion under “—Rialto Mortgage’s Underwriting Standards and Loan Analysis” above, one or more of the Rialto Mortgage Loans may vary from, or not comply with, Rialto Mortgage’s underwriting policies and guidelines described above. In addition, in the case of one or more of the Rialto Mortgage Loans, Rialto Mortgage or another originator may not have strictly applied the underwriting policies and guidelines described above as the result of a case-by-case permitted exception based upon other compensating factors. None of the Rialto Mortgage Loans were originated with any material exceptions to Rialto Mortgage’s underwriting policies, guidelines and procedures described above.
Review of Mortgage Loans for Which Rialto Mortgage is the Sponsor
Overview. Rialto Mortgage has conducted a review of each of the Rialto Mortgage Loans. This review was performed by a team comprised of real estate and securitization professionals who are employees of Rialto Mortgage or one or more of its affiliates (the “Rialto Mortgage Review Team”). The review procedures described below were employed with respect to the Rialto Mortgage Loans. No sampling procedures were used in the review process. Rialto Mortgage is the Mortgage Loan Seller with respect to twenty-five (25) Mortgage Loans.
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Set forth below is a discussion of certain current general guidelines of Rialto Mortgage generally applicable with respect to Rialto Mortgage’s underwriting analysis of multi-family and commercial real estate properties which serve as the direct or indirect source of repayment for commercial real estate debt originated by Rialto Mortgage. All or a portion of the underwriting guidelines described below may not be applied exactly as described below at the time a particular asset is originated by Rialto Mortgage.
Database. To prepare for securitization, members of the Rialto Mortgage Review Team reviewed a database of loan-level and property-level information relating to the Rialto Mortgage Loans. The database was compiled from, among other sources, the related mortgage loan documents, appraisals, environmental assessment reports, property condition reports, zoning reports, insurance review summaries, borrower-supplied information (including, but not limited to, rent rolls, leases, operating statements and budgets) and information collected by the Rialto Mortgage Review Team during the underwriting process. Prior to securitization of the Rialto Mortgage Loans, the Rialto Mortgage Review Team may have updated the information in the database with respect to the Rialto Mortgage Loans based on updates provided by the related servicer which may include information relating to loan payment status and escrows, updated operating statements, rent rolls and leasing activity, and information otherwise brought to the attention of the Rialto Mortgage Review Team, to the extent such updates were provided to, and deemed material by, the Rialto Mortgage Review Team. Such updates, if any, were not intended to be, and do not serve as, a re-underwriting of the Rialto Mortgage Loans. A data tape (the “Rialto Mortgage Data Tape”) containing detailed information regarding the Rialto Mortgage Loans was created from the information in the database referred to above. The Rialto Mortgage Data Tape was used to provide the numerical information regarding the Rialto Mortgage Loans in this free writing prospectus.
Data Comparison and Recalculation. The Depositor, on behalf of Rialto Mortgage, engaged a third party accounting firm to perform certain data comparison and recalculation procedures designed or provided by Rialto Mortgage and relating to information in this free writing prospectus regarding the Rialto Mortgage Loans. These procedures included:
· | comparing the information in the Rialto Mortgage Data Tape against various source documents provided by Rialto Mortgage; |
· | comparing numerical information regarding the Rialto Mortgage Loans and the related Mortgaged Properties disclosed in this free writing prospectus against the information contained in the Rialto Mortgage Data Tape; and |
· | recalculating certain percentages, ratios and other formulae relating to the Rialto Mortgage Loans disclosed in this free writing prospectus. |
Legal Review. Rialto Mortgage engaged legal counsel to conduct certain legal reviews of the Rialto Mortgage Loans for disclosure in this free writing prospectus. In anticipation of the securitization described in this free writing prospectus, Rialto Mortgage’s origination counsel reviewed a form of securitization representations and warranties at origination and, if applicable, identified exceptions to those representations and warranties. Rialto Mortgage’s origination and underwriting staff also performed a review of the representations and warranties.
Legal counsel was also engaged in connection with this securitization to assist in the review of the Rialto Mortgage Loans. Such assistance included, among other things, (i) a review of certain of Rialto Mortgage’s asset summary reports, (ii) the review of the representations and warranties and exception reports referred to above relating to the
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Rialto Mortgage Loans prepared by origination counsel, (iii) the review of, and assistance in the completion by the Rialto Mortgage Review Team of, a due diligence questionnaire relating to the Rialto Mortgage Loans and (iv) the review of certain provisions in loan documents with respect to the Rialto Mortgage Loans.
Other Review Procedures. The Rialto Mortgage Review Team, with the assistance of counsel engaged in connection with this securitization, also reviewed each Rialto Mortgage Loan to determine whether it materially deviated from the underwriting guidelines set forth under “—Rialto Mortgage’s Underwriting Standards and Loan Analysis” above.
Findings and Conclusions. Based on the foregoing review procedures, Rialto Mortgage determined that the disclosure regarding the Rialto Mortgage Loans in this free writing prospectus is accurate in all material respects. Rialto Mortgage also determined that the Rialto Mortgage Loans were not originated with any material exceptions from Rialto Mortgage’s underwriting guidelines and procedures, except as described above under “—Rialto Mortgage’s Underwriting Standards and Loan Analysis—Exceptions” above. Rialto Mortgage attributes to itself all findings and conclusions resulting from the foregoing review procedures.
Review Procedures in the Event of a Mortgage Loan Substitution. Rialto Mortgage will perform a review of any Rialto Mortgage Loan that it elects to substitute for a Rialto Mortgage Loan in the pool in connection with material breach of a representation or warranty or a material document defect. Rialto Mortgage, and if appropriate its legal counsel, will review the mortgage loan documents and servicing history of the substitute mortgage loan to confirm it meets each of the criteria required under the terms of the related Mortgage Loan Purchase Agreement and the Pooling and Servicing Agreement (the “Qualification Criteria”). Rialto Mortgage will engage a third party accounting firm to compare the Qualification Criteria against the underlying source documentation to verify the accuracy of the review by Rialto Mortgage and to confirm any numerical and/or statistical information to be disclosed in any required filings under the Exchange Act. Legal counsel will also be engaged by Rialto Mortgage to render any tax opinion required in connection with the substitution.
Compliance with Rule 15Ga-1 under the Exchange Act
Rialto Mortgage most recently filed a Form ABS-15G on February 6, 2015. Rialto Mortgage’s Central Index Key number is 0001592182. With respect to the period from and including April 1, 2012 to and including March 31, 2015, Rialto Mortgage does not have any activity to report as required by Rule 15Ga-1 under the Exchange Act with respect to repurchase or replacement requests in connection with breaches of representations and warranties made by it as a sponsor of commercial mortgage securitizations.
The information set forth under “—Rialto Mortgage Finance, LLC” has been provided by Rialto Mortgage.
Silverpeak Real Estate Finance LLC
General
Silverpeak Real Estate Finance LLC (“Silverpeak”) is a sponsor of, and a seller of certain mortgage loans (the “Silverpeak Mortgage Loans”) into, the securitization described in this free writing prospectus. Silverpeak is a limited liability company organized under the laws of the State of Delaware. The primary offices of Silverpeak are located at 1330 Avenue of the Americas, Suite 1200, New York, New York 10019.
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Silverpeak’s Securitization Program
The participation by Silverpeak in this securitization will be the fourth securitization in which it has been involved. Silverpeak began originating and acquiring loans in 2014 and has not been involved in the securitization of any other types of financial assets.
Silverpeak originates and acquires from unaffiliated third party originators, commercial, multifamily and manufactured housing community mortgage loans throughout the United States. Since 2014, Silverpeak has securitized approximately 56 commercial, multifamily and manufactured housing community mortgage loans with an aggregate original principal balance of approximately $784,011,673.
In connection with this commercial mortgage securitization transaction, Silverpeak will transfer the Silverpeak Mortgage Loans to the depositor, who will then transfer the Silverpeak Mortgage Loans to the issuing entity for this securitization. In return for the transfer by the depositor to the issuing entity of the Silverpeak Mortgage Loans (together with the other mortgage loans being securitized), the issuing entity will issue commercial mortgage pass-through certificates that are, in whole or in part, backed by, and supported by the cash flows generated by, the mortgage loans being securitized. In coordination with underwriters or initial purchasers and the depositor, Silverpeak will work with rating agencies, the other loan sellers, servicers and investors and will participate in structuring the securitization transaction to maximize the overall value and capital structure, taking into account numerous factors, including without limitation geographic and property type diversity and rating agency criteria.
Pursuant to a Mortgage Loan Purchase Agreement, Silverpeak will make certain representations and warranties, subject to certain exceptions set forth therein, and undertake certain loan document delivery requirements with respect to the Silverpeak Mortgage Loans; and, in the event of an uncured material breach of any such representation and warranty or an uncured material document defect or omission, Silverpeak will generally be obligated to repurchase or replace the affected mortgage loan or, in some cases, pay an amount estimated to cover the approximate loss associated with such breach, defect or omission.
Silverpeak does not act as a servicer of the commercial, multifamily and manufactured housing community mortgage loans that Silverpeak originates or acquires and will not act as servicer in this commercial mortgage securitization transaction. Instead, Silverpeak sells the right to be appointed servicer of its securitized loans to unaffiliated third party servicers and utilizes unaffiliated third party servicers as interim servicers.
Silverpeak’s Underwriting Standards and Processes
Each of the Silverpeak Mortgage Loans was originated or acquired by Silverpeak. Set forth below is a discussion of certain general underwriting guidelines and processes with respect to commercial, multifamily and manufactured housing community mortgage loans originated or acquired by Silverpeak.
Notwithstanding the discussion below, given the unique nature of commercial, multifamily and manufactured housing community mortgaged properties, the underwriting and origination procedures and the credit analysis with respect to any particular commercial, multifamily or manufactured housing community mortgage loan may significantly differ from one asset to another, and will be driven by circumstances particular to that property, including, among others, its type, current use, size, location, market conditions, reserve requirements and additional collateral, tenants and leases, borrower
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identity, sponsorship, performance history and/or other factors. Consequently, the underwriting of certain commercial, multifamily or manufactured housing community mortgage loan originated or acquired by Silverpeak may not conform to the general guidelines and processes described below. For important information about the circumstances that have affected the underwriting of particular Silverpeak Mortgage Loans, see “—Silverpeak’s Underwriting Guidelines and Processes—Exceptions” below and “Annex C-2—Exceptions to Mortgage Loan Seller Representations and Warranties” in this free writing prospectus.
Loan Analysis. Generally both a credit analysis and a collateral analysis are conducted with respect to each commercial, multifamily and manufactured housing community mortgage loan. The credit analysis of the borrower generally includes a review of third party credit reports or judgment, lien, bankruptcy and pending litigation searches. The collateral analysis generally includes a review of, in each case to the extent available and applicable, the historical property operating statements, rent rolls and certain significant tenant leases. The credit underwriting also generally includes a review of third party appraisals, as well as environmental reports, engineering assessments and seismic reports, if applicable and obtained. Generally, Silverpeak also conducts or causes a third party to conduct a site inspection to ascertain the overall quality, functionality and competitiveness of the property, including its neighborhood and market, accessibility and visibility, and to assess the tenancy of the property. The submarket in which the property is located is assessed to evaluate competitive or comparable properties as well as market trends.
Loan Approval. Prior to commitment, each commercial, multifamily and manufactured housing community mortgage loan to be originated or acquired must be approved by a loan committee that includes senior personnel from Silverpeak. The committee may approve a mortgage loan as recommended, request additional due diligence, modify the loan terms or decline a loan transaction.
Debt Service Coverage Ratio and Loan-to-Value Ratio. The underwriting includes a calculation of the debt service coverage ratio and loan-to-value ratio. Silverpeak’s underwriting standards generally require, without regard to any other debt, a debt service coverage ratio of notless than 1.20x and a loan-to-value ratio of not more than 80.0%.
A debt service coverage ratio will generally be calculated based on the underwritten net cash flow from the property in question as determined by Silverpeak and payments on the loan based on actual (or, in some cases, assumed) principal and/or interest due on the loan. However, underwritten net cash flow is often a highly subjective number based on a variety of assumptions regarding, and adjustments to, revenues and expenses with respect to the related real property collateral. For example, when calculating the debt service coverage ratio for a commercial, multifamily or manufactured housing community mortgage loan, annual net cash flow that was calculated based on assumptions regarding projected future rental income, expenses and/or occupancy may be utilized. There is no assurance that the foregoing assumptions made with respect to any prospective commercial, multifamily or manufactured housing community mortgage loan will, in fact, be consistent with actual property performance. Such underwritten net cash flow may be higher than historical net cash flow reflected in recent financial statements. Additionally, certain mortgage loans may provide for only interest payments prior to maturity, or for an interest-only period during a portion of the term of the mortgage loan.
A loan-to-value ratio, in general, is the ratio, expressed as a percentage, of the then-outstanding principal balance of the mortgage loandivided by the estimated value of the related property based on an appraisal.
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Additional Debt. Certain mortgage loans may have or permit in the future certain subordinate debt, whether secured or unsecured, and/or mezzanine debt. It is possible that Silverpeak or an affiliate may be the lender on that subordinate debt and/or mezzanine debt.
The debt service coverage ratios described above will be lower based on the inclusion of the payments related to such additional debt and the loan-to-value ratios described above will be higher based on the inclusion of the amount of any such subordinate debt and/or mezzanine debt.
Assessment of Property Condition. As part of the underwriting process, the property assessments and reports described below will typically be obtained:
· | Appraisals. Independent appraisals or an update of an independent appraisal will generally be required in connection with the origination or acquisition of each mortgage loan that meets the requirements of the “Uniform Standards of Professional Appraisal Practice” as adopted by the Appraisal Standards Board of the Appraisal Foundation, or the guidelines in Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989. In some cases, however, the value of the subject real property collateral may be established based on a cash flow analysis, a recent sales price or another method or benchmark of valuation. |
· | Environmental Assessment. In most cases, a Phase I environmental assessment will be required with respect to the real property collateral for a prospective commercial, multifamily or manufactured housing community mortgage loan. However, when circumstances warrant, an update of a prior environmental assessment, a transaction screen or a desktop review may be utilized. Alternatively, in limited circumstances, an environmental assessment may not be required, such as when the benefits of an environmental insurance policy or an environmental guarantee have been obtained. It should be noted that an environmental assessment conducted at any particular real property collateral will not necessarily cover all potential environmental issues. For example, an analysis for radon, lead-based paint, mold and lead in drinking water will usually be conducted only at multifamily rental properties and only if it is believed that such an analysis is warranted under the circumstances. Depending on the findings of the initial environmental assessment, any of the following may be required: additional environmental testing, such as a Phase II environmental assessment with respect to the subject real property collateral; an environmental insurance policy; that the borrower conduct remediation activities or establish an operations and maintenance plan; and/or a guaranty or reserve with respect to environmental matters. |
· | Engineering Assessment. In connection with the origination/acquisition process, in most cases, it will be required that an engineering firm inspect the real property collateral for any prospective commercial, multifamily or manufactured housing community mortgage loan to assess the structure, exterior walls, roofing, interior structure and/or mechanical and electrical systems. Based on the resulting report, the appropriate response will be determined to any recommended repairs, corrections or replacements and any identified deferred maintenance. |
· | Seismic Report. Generally, a seismic report is required for all properties located in seismic zones 3 or 4. |
Title Insurance. The borrower is required to provide a title insurance policy for each property. The title insurance policies provided typically must meet the following
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requirements: (i) written by a title insurer licensed to do business in the jurisdiction where the mortgaged property is located, (ii) in an amount at least equal to the original principal balance of the mortgage loan, (iii) protection and benefits run to the mortgagee and its successors and assigns, (iv) written on an American Land Title Association form or equivalent policy promulgated in the jurisdiction where the mortgaged property is located and (v) if a survey was prepared, the legal description of the mortgaged property in the title policy conforms to that shown on the survey.
Casualty Insurance. Except in certain instances where sole or significant tenants (which may include ground tenants) are required to obtain insurance or may self-insure, Silverpeak typically requires that the related mortgaged property be insured by a hazard insurance policy with a customary deductible and in an amount at least equal to the lesser of the outstanding principal balance of the mortgage loan and 100% of the full insurable replacement cost of the improvements located on the property. If applicable, the policy must contain appropriate endorsements to avoid the application of coinsurance and not permit reduction in insurance proceeds for depreciation, except that the policy may permit a deduction for depreciation in connection with a cash settlement after a casualty if the insurance proceeds are not being applied to rebuild or repair the damaged improvements.
Flood insurance, if available, must be in effect for any mortgaged property that at the time of origination or acquisition included material improvements in any area identified in the Federal Register by the Federal Emergency Management Agency a special flood hazard area. The flood insurance policy must meet the requirements of the then-current guidelines of the Federal Insurance Administration, be provided by a generally acceptable insurance carrier and be in an amount representing coverage not less than the least of (i) the outstanding principal balance of the mortgage loan, (ii) the full insurable value of the property or, in cases where only a portion of the property is in the flood zone, the full insurable value of the portion of the property contained therein, and (iii) the maximum amount of insurance available under the National Flood Insurance Program Act of 1968, except in some cases where self-insurance was permitted.
The standard form of hazard insurance policy typically covers physical damage or destruction of the improvements on the mortgaged property caused by fire, lightning, explosion, smoke, windstorm and hail, riot or strike and civil commotion. The policies may contain some conditions and exclusions to coverage, including exclusions related to acts of terrorism. Generally, each of the mortgage loans requires that the related property have coverage for terrorism or terrorist acts, if such coverage is available at commercially reasonable rates. In all (or almost all) cases, there is a cap on the amount that the related borrower will be required to expend on terrorism insurance.
Each mortgage instrument typically also requires the borrower to maintain comprehensive general liability insurance against claims for personal and bodily injury, death or property damage occurring on, in or about the property in an amount customarily required by institutional lenders.
Each mortgage instrument typically further requires the related borrower to maintain business interruption or rent loss insurance in an amount notless than 100% of the projected rental income from the related property for not less than twelve months.
Although properties are typically not insured for earthquake risk, a borrower will be required to obtain earthquake insurance if the property has material improvements and the seismic report indicates that the PML or SEL is greater than 20%.
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Zoning and Building Code Compliance. In connection with the origination or acquisition of a commercial, multifamily or manufactured housing community mortgage loan, Silverpeak will generally examine whether the use and occupancy of the related real property collateral is in material compliance with zoning, land-use, building rules, regulations and orders then applicable to that property. Evidence of this compliance may be in the form of one or more of the following: legal opinions, surveys, recorded documents, temporary or permanent certificates of occupancy, letters from government officials or agencies, title insurance endorsements, engineering or consulting reports, zoning reports and/or representations by the related borrower.
In some cases, a mortgaged property may constitute a legal non-conforming use or structure. In such cases, Silverpeak may require an endorsement to the title insurance policy or the acquisition of law and ordinance insurance with respect to the particular non conformity unless it determines that: (i) the non-conformity should not have a material adverse effect on the ability of the borrower to rebuild; or (ii) if the improvements are rebuilt in accordance with currently applicable law, the value and performance of the property would be acceptable; or (iii) any major casualty that would prevent rebuilding has a sufficiently remote likelihood of occurring; or (iv) a cash reserve, a letter of credit or an agreement from a principal of the borrower is provided to cover losses.
If a material violation exists with respect to a mortgaged property, Silverpeak may require the borrower to remediate such violation and, subject to the discussion under “—Silverpeak’s Underwriting Guidelines and Processes—Escrow Requirements” below, to establish a reserve to cover the cost of such remediation, unless a cash reserve, a letter of credit or an agreement from a principal of the borrower is provided to cover losses.
Escrow Requirements. Based on Silverpeak’s analysis of the real property collateral, the borrower and the principals of the borrower, a borrower under a commercial, multifamily or manufactured housing community mortgage loan may be required to fund various escrows for taxes, insurance, replacement reserves, tenant improvements/leasing commissions, deferred maintenance and/or environmental remediation. A case-by-case analysis will be conducted to determine the need for a particular escrow or reserve. Consequently, the aforementioned escrows and reserves are not established for every commercial, multifamily and manufactured housing community mortgage loan. Furthermore, Silverpeak may accept an alternative to a cash escrow or reserve from a borrower, such as a letter of credit or a guarantee from the borrower or an affiliate of the borrower or periodic evidence that the items for which the escrow or reserve would have been established are being paid or addressed. In some cases, Silverpeak may determine that establishing an escrow or reserve is not warranted given the amounts that would be involved and Silverpeak’s evaluation of the ability of the property, the borrower or a holder of direct or indirect ownership interests in the borrower to bear the subject expense or cost absent creation of an escrow or reserve. In some cases, Silverpeak may determine that establishing an escrow or reserve is not warranted because a tenant or other third party has agreed to pay the subject cost or expense for which the escrow or reserve would otherwise have been established.
Generally, subject to the discussion in the prior paragraph, the required escrows for commercial, multifamily and manufactured housing community mortgage loans originated or acquired by Silverpeak are as follows:
· | Taxes—Monthly escrow deposits equal to 1/12th of the annual property taxes (based on the most recent property assessment and the current millage rate) are typically required to satisfy real estate taxes and assessments, except that such escrows are not required in certain circumstances, including, but not limited to, (i) if there is an |
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institutional property sponsor or high net worth individual property sponsor, or (ii) if and to the extent that a sole or major tenant (which may include a ground tenant) at the related mortgaged property is required to pay taxes directly.
· | Insurance—Monthly escrow deposits equal to 1/12th of the annual property insurance premium are typically required to pay insurance premiums, except that such escrows are not required in certain circumstances, including, but not limited to, (i) if there is an institutional property sponsor or high net worth individual property sponsor, (ii) if the related borrower maintains a blanket insurance policy, or (iii) if and to the extent that a sole or major tenant (which may include a ground tenant) at the related mortgaged property is obligated to maintain the insurance or is permitted to self-insure. |
· | Replacement Reserves—Replacement reserves are generally calculated in accordance with the expected useful life of the components of the property during the term of the mortgage loan. Annual replacement reserves are generally underwritten to the suggested replacement reserve amount from an independent, third-party property condition or engineering report, or to certain minimum requirements by property type, except that such escrows are not required in certain circumstances, including, but not limited to, (i) if a tenant (which may include a ground tenant) at the related mortgaged property or other third party is responsible for all repairs and maintenance, or (ii) if Silverpeak determines that establishing an escrow or reserve is not warranted given the amounts that would be involved and Silverpeak’s evaluation of the ability of the property, the borrower or a holder of direct or indirect ownership interests in the borrower to bear the cost of repairs and maintenance absent creation of an escrow or reserve. |
· | Tenant Improvements / Leasing Commissions—In the case of retail, office and industrial properties, a tenant improvements / leasing commissions reserve may be required to be funded either at loan origination and/or during the related mortgage loan term to cover certain anticipated leasing commissions or tenant improvement costs which might be associated with re-leasing the space occupied by significant tenants, except that such escrows are not required in certain circumstances, including, but not limited to, (i) if the related tenant’s lease extends beyond the loan term, (ii) if the rent for the space in question is considered below market, or (iii) if Silverpeak determines that establishing an escrow or reserve is not warranted given the amounts that would be involved and Silverpeak’s evaluation of the ability of the property, the borrower or a holder of direct or indirect ownership interests in the borrower to bear the anticipated leasing commissions or tenant improvement costs absent creation of an escrow or reserve. |
· | Deferred Maintenance—A deferred maintenance reserve may be required to be funded at loan origination or acquisition in an amount typically equal to 100% to 125% of the estimated cost of material immediate repairs or replacements identified in the property condition or engineering report, except that such escrows are not required in certain circumstances, including, but not limited to, (i) if the sponsor of the borrower delivers a guarantee to complete the immediate repairs in a specified amount of time, (ii) if the deferred maintenance amount does not materially impact the function, performance or value of the property, (iii) if a tenant (which may include a ground tenant) at the related mortgaged property or other third party is responsible for the repairs, or (iv) if Silverpeak determines that establishing an escrow or reserve is not warranted given the amounts that would be involved and Silverpeak’s evaluation of the ability of the property, the borrower or a holder of |
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direct or indirect ownership interests in the borrower to bear the cost of repairs absent creation of an escrow or reserve.
· | Environmental Remediation—An environmental remediation reserve may be required at loan origination or acquisition in an amount equal to 100% to 125% of the estimated remediation cost identified in the environmental report, except that such escrows are not required in certain circumstances, including, but not limited to, (i) if the sponsor of the borrower delivers a guarantee agreeing to take responsibility and pay for the identified environmental issues, (ii) if environmental insurance is obtained or already in place, (iii) if a third party unrelated to the borrower is identified as the responsible party or (iv) if Silverpeak determines that establishing an escrow or reserve is not warranted given the amounts that would be involved and Silverpeak’s evaluation of the ability of the property, the borrower or a holder of direct or indirect ownership interests in the borrower to bear the cost of remediation absent creation of an escrow or reserve. |
For a description of the escrows collected with respect to the Silverpeak Mortgage Loans, see Annex A-1 to this free writing prospectus.
Exceptions. Except as described under “Description of the Mortgage Pool—Exceptions to Underwriting Guidelines” in this free writing prospectus, the Silverpeak Mortgage Loans were originated in accordance with the underwriting standards set forth above.
Review of Mortgage Loans for Which Silverpeak is the Sponsor
Overview. Silverpeak has conducted a review of the Silverpeak Mortgage Loans in connection with the securitization described in this free writing prospectus. The review of the Silverpeak Mortgage Loans was performed by a team comprised of real estate and securitization professionals (the “Silverpeak Review Team”). The review procedures described below were employed with respect to all of the Silverpeak Mortgage Loans, except that certain review procedures may only be relevant to the large loan disclosures, if any, in this free writing prospectus. No sampling procedures were used in the review process.
Database. Members of the Silverpeak Review Team maintain a database of loan-level and property-level information, and prepared an asset summary report, relating to each Silverpeak Mortgage Loan. The database and the respective asset summary reports were compiled from, among other sources, the related mortgage loan documents, appraisals, environmental assessment reports, property condition reports, seismic studies, zoning reports, insurance review summaries, borrower-supplied information (including, but not limited to, rent rolls, leases, operating statements and budgets) and information collected by the Silverpeak Team during the underwriting process. After origination of each Silverpeak Mortgage Loan, the Silverpeak Review Team updated the information in the database and the related asset summary report with respect to such Silverpeak Mortgage Loan based on updates provided by the related servicer relating to loan payment status and escrows, updated operating statements, rent rolls and leasing activity, and information otherwise brought to the attention of the Silverpeak Review Team.
A data tape (the “Silverpeak Data Tape”) containing detailed information regarding each Silverpeak Mortgage Loan was created from the information in the database referred to in the prior paragraph. The Silverpeak Data Tape was used to provide the numerical information regarding the Silverpeak Mortgage Loans in this free writing prospectus.
Data Validation and Recalculation. The Depositor, on behalf of Silverpeak, engaged a third party accounting firm to perform certain data validation and recalculation procedures
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designed by Silverpeak, relating to information in this free writing prospectus regarding the Silverpeak Mortgage Loans. These procedures included:
· | comparing the information in the Silverpeak Data Tape against various source documents provided by Silverpeak that are described under “—Review of Silverpeak Mortgage Loans—Database” above; |
· | comparing numerical information regarding the Silverpeak Mortgage Loans and the related Mortgaged Properties disclosed in this free writing prospectus against the Silverpeak Data Tape; and |
· | recalculating certain percentages, ratios and other formulae relating to the Silverpeak Mortgage Loans disclosed in this free writing prospectus. |
Legal Review. Silverpeak engaged various law firms to conduct certain legal reviews of the Silverpeak Mortgage Loans for disclosure in this free writing prospectus. In anticipation of the securitization of each Silverpeak Mortgage Loan, Silverpeak’s origination counsel prepared a due diligence questionnaire that sets forth salient loan terms. In addition, such origination counsel for each Silverpeak Mortgage Loan reviewed Silverpeak’s representations and warranties set forth on Annex E-1 to this free writing prospectus and, if applicable, identified exceptions to those representations and warranties.
Legal counsel was also engaged in connection with this securitization to assist in the review of the Silverpeak Mortgage Loans. Such assistance included, among other things, (i) a review of Silverpeak’s asset summary report, and its origination counsel’s due diligence questionnaire, for each Silverpeak Mortgage Loan, (ii) a review of the representations and warranties and exception reports referred to above relating to the Silverpeak Mortgage Loans prepared by origination counsel, and (iii) the review of select provisions in certain loan documents with respect to certain of the Silverpeak Mortgage Loans.
Other Review Procedures. With respect to any material pending litigation on the underlying mortgaged properties of which Silverpeak was aware at the origination of any Silverpeak Mortgage Loan, the Silverpeak Review Team requested updates from the related borrower, origination counsel and/or borrower’s litigation counsel. Silverpeak conducted a search with respect to each borrower under the related Silverpeak Mortgage Loan to determine whether it filed for bankruptcy. If the Silverpeak Review Team became aware of a significant natural disaster in the vicinity of the Mortgaged Property securing any Silverpeak Mortgage Loan, the Silverpeak Review Team obtained information on the status of the Mortgaged Property from the related borrower to confirm no material damage to the Mortgaged Property.
The Silverpeak Review Team, with the assistance of counsel engaged in connection with this securitization, also reviewed the Silverpeak Mortgage Loans to determine whether any Silverpeak Mortgage Loan materially deviated from the underwriting guidelines set forth under “—Silverpeak’s Underwriting Guidelines and Processes” above. See “—Silverpeak’s Underwriting Guidelines and Processes—Exceptions” above.
Findings and Conclusions. Based on the foregoing review procedures, the Silverpeak Review Team determined that the disclosure regarding the Silverpeak Mortgage Loans in this free writing prospectus is accurate in all material respects. The Silverpeak Review Team also determined that the Silverpeak Mortgage Loans were originated in accordance with Silverpeak’s origination procedures and underwriting criteria, except as described under “Description of the Mortgage Pool—Exceptions to Underwriting Guidelines” in this free
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writing prospectus. Silverpeak attributes to itself all findings and conclusions resulting from the foregoing review procedures.
Review Procedures in the Event of a Mortgage Loan Substitution. SPREF will perform a review of any SPREF Mortgage Loan that it elects to substitute for a SPREF Mortgage Loan in the pool in connection with a material breach of a representation or warranty or a material document defect. SPREF, and if appropriate its legal counsel, will review the mortgage loan documents and servicing history of the substitute mortgage loan to confirm it meets each of the criteria required under the terms of the related Mortgage Loan Purchase Agreement and the Pooling and Servicing Agreement (the “Qualification Criteria”). SPREF may engage a third party accounting firm to compare the Qualification Criteria against the underlying source documentation to verify the accuracy of the review by SPREF and to confirm any numerical and/or statistical information to be disclosed in any required filings under the Exchange Act. Legal counsel will also be engaged by SPREF to render any tax opinion required in connection with the substitution.
Compliance with Rule 15Ga-1 under the Exchange Act
Silverpeak most recently filed a Form ABS-15G on February 9, 2015. Silverpeak’s Central Index Key is 0001624053. With respect to the period from and including January 1, 2012 to and including December 31, 2014, Silverpeak does not have any activity to report as required by Rule 15Ga-1 under the Exchange Act.
The information set forth under “—Silverpeak Real Estate Finance LLC” has been provided by Silverpeak Real Estate Finance LLC.
Walker & Dunlop Commercial Property Funding I WF, LLC
General
Walker & Dunlop Commercial Property Funding I WF, LLC (“WDCPF I WF”) is a limited liability company organized under the laws of the state of Delaware and an indirect, wholly-owned subsidiary of Walker & Dunlop Commercial Property Funding, LLC (together with its subsidiaries, including WDCPF I WF, “WDCPF”). WDCPF is affiliated with Walker & Dunlop, Inc., a commercial real estate finance company operating in the United States and specializing in multifamily lending, asset management, investing and servicing of loans and an affiliate of Fortress Investment Group LLC. WDCPF was formed to originate and invest in commercial real estate debt. The executive offices of WDCPF are located at 535 Madison Avenue, 12th Floor, New York, New York 10022. WDCPF also maintains offices in Charlotte, North Carolina and Dallas, Texas.
WDCPF I WF is a Sponsor of, and a seller of certain mortgage loans into, the securitization described in this free writing prospectus. In addition, Wells Fargo Bank, National Association (an affiliate of Wells Fargo Commercial Mortgage Securities, Inc., the Depositor, and Wells Fargo Securities, LLC, one of the underwriters) provides warehouse financing to WDCPF I WF through a repurchase facility. All of the WDCPF I WF Mortgage Loans that WDCPF I WF will transfer to the Depositor are (or are expected to be prior to the Closing Date) subject to that repurchase facility. If such is the case at the time the Certificates are issued, then WDCPF I WF will use the proceeds from its sale of the WDCPF I WF Mortgage Loans to the Depositor to, among other things, acquire the warehoused WDCPF I WF Mortgage Loans from Wells Fargo Bank, National Association free and clear of any liens. It is anticipated that prior to the Closing Date, Wells Fargo Bank, National Association will become the repurchase agreement counterparty with respect to all WDCPF I WF Mortgage Loans, with an aggregate Cut-off Date Principal Balance of $113,270,708,
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representing approximately 9.6% of the Cut-off Date Pool Balance;provided that the number and dollar amount of WDCPF I WF Mortgage Loans subject to such repurchase facilities may increase or decrease prior to the issuance of the Certificates.
In addition, WDCPF I WF is a party to a repurchase facility and an interest rate hedging arrangement with Wells Fargo Bank with respect to each of the WDCPF I WF Mortgage Loans. Wells Fargo Bank is also the interim custodian of the loan files for all of the WDCPF I WF Mortgage Loans. Wells Fargo Bank, a master servicer, is also expected to enter into a sub-servicing agreement with an affiliate of Walker & Dunlop Commercial Property Funding I WF, LLC pursuant to which such affiliate will be required to perform certain limited subservicing duties with respect to the mortgage loans that Walker & Dunlop Commercial Property Funding I WF, LLC will transfer to the depositor. See “—Affiliations and Certain Relationships Among Certain Transaction Parties” below.
WDCPF’s Securitization Program
This is the fourth commercial mortgage securitization into which WDCPF I WF is contributing commercial mortgage loans.
WDCPF originates, or acquires pursuant to table funding arrangements through third party origination platforms, commercial mortgage loans that are secured by retail shopping centers, office buildings, multifamily apartment complexes, hotels and mixed use, self-storage and industrial properties located in North America and Puerto Rico. WDCPF’s origination program generally originates fixed rate commercial mortgage loans having maturities between five and ten years. Additionally, WDCPF may from time to time originate bridge/transitional loans, mezzanine loans and preferred equity investments.
In connection with this commercial mortgage securitization transaction, WDCPF I WF will transfer the WDCPF I WF Mortgage Loans to the Depositor, who will then transfer the WDCPF I WF Mortgage Loans to the Issuing Entity. In return for the transfer by the Depositor to the Issuing Entity of the WDCPF I WF Mortgage Loans (together with the other mortgage loans being securitized), the Issuing Entity will issue commercial mortgage pass-through certificates that are, in whole or in part, backed by, and supported by the cash flows generated by, the mortgage loans being securitized. In coordination with underwriters and initial purchasers engaged by the securitization depositor, WDCPF I WF will work with rating agencies, investors, servicers and other mortgage loan sellers and will participate in structuring the securitization transaction to maximize the overall value and capital structure, taking into account numerous factors, including without limitation geographic and property type diversity and rating agency criteria.
Pursuant to a Mortgage Loan Purchase Agreement, WDCPF I WF will make certain representations and warranties, subject to certain exceptions set forth therein, and undertake certain loan document delivery requirements with respect to the WDCPF I WF Mortgage Loans. In the event of an uncured material breach of any such representation and warranty or an uncured material document defect or omission, WDCPF I WF and Walker & Dunlop Commercial Property Funding, LLC will generally be jointly and severally obligated to repurchase or replace the affected mortgage loan. We cannot assure you that either such entity will repurchase or replace a defective mortgage loan, and no affiliate of such entities will be responsible for doing so if such entities fail with respect to their obligations. In addition, WDCPF I WF and Walker & Dunlop Commercial Property Funding, LLC have agreed to jointly and severally indemnify the Depositor and the underwriters and certain of their respective affiliates with respect to certain liabilities arising in connection with the issuance and sale of the Offered Certificates.
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Review of WDCPF I WF Mortgage Loans
Overview. WDCPF I WF has conducted a review of the Mortgage Loans it is selling to the Depositor (the “WDCPF I WF Mortgage Loans”) in connection with the securitization described in this free writing prospectus. The review of the WDCPF I WF Mortgage Loans was performed by a team comprised of real estate and securitization professionals who are employees of WDCPF or one or more of its affiliates (the “WDCPF Review Team”). The review procedures described below were employed with respect to all of the WDCPF I WF Mortgage Loans. No sampling procedures were used in the review process.
Database. To prepare for securitization, members of the WDCPF Review Team created a database of loan-level and property-level information relating to each WDCPF I WF Mortgage Loan. Data for the database was compiled from, among other sources, the related mortgage loan documents, appraisals, environmental assessment reports, property condition reports, seismic studies, zoning reports, insurance review summaries, borrower-supplied information (including, but not limited to, rent rolls, leases, operating statements and budgets), information collected during the underwriting process, and information collected after each WDCPF I WF Mortgage Loan’s origination (including, but not limited to, servicing updates regarding payment and escrow status, updated operating statements, rent rolls and leasing reports, and information otherwise brought to the attention of the WDCPF Review Team).
A data tape (the “WDCPF I WF Data Tape”) containing detailed information regarding each WDCPF I WF Mortgage Loan was created from the information in the database referred to in the prior paragraph. The WDCPF I WF Data Tape was used to provide the numerical information regarding the WDCPF I WF Mortgage Loans in this free writing prospectus.
Data Validation and Recalculation. The Depositor, on behalf of WDCPF I WF, engaged a third party accounting firm to perform certain data validation and recalculation procedures designed by WDCPF I WF, relating to information in this free writing prospectus regarding the WDCPF I WF Mortgage Loans. These procedures included:
· | comparing the information in the WDCPF I WF Data Tape against various source documents provided by WDCPF I WF that are described above under “—Database”; |
· | comparing numerical information regarding the WDCPF I WF Mortgage Loans and the related Mortgaged Properties disclosed in this free writing prospectus against the WDCPF I WF Data Tape; and |
· | recalculating certain percentages, ratios and other formulae relating to the WDCPF I WF Mortgage Loans disclosed in this free writing prospectus. |
Legal Review. WDCPF engaged various law firms to conduct certain legal reviews of the WDCPF I WF Mortgage Loans for disclosure in this free writing prospectus. At the time each WDCPF I WF Mortgage Loan was originated, WDCPF’s origination counsel reviewed the related mortgage loan documents against the loan-level securitization representations and warranties of WDCPF I WF set forth on Annex C-1 to this free writing prospectus and, if applicable, identified any exceptions thereto.
WDCPF also engaged legal counsel to review, among other things, (i) WDCPF’s internal credit memorandum for each WDCPF I WF Mortgage Loan; (ii) a review of the representation and warranty exception reports referred to above relating to certain of the WDCPF I WF Mortgage Loans; (iii) WDCPF’s responses to a due diligence questionnaire
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relating to each WDCPF I WF Mortgage Loan; and (iv) certain loan documents with respect to certain of the WDCPF I WF Mortgage Loans.
Underwriting Review. At the time of loan origination, the WDCPF Review Team reviewed each WDCPF I WF Mortgage Loan and identified any material deviations from the underwriting guidelines set forth under “—WDCPF I WF’s Underwriting Standards” below. See “—WDCPF I WF’s Underwriting Standards—Exceptions” below.
Other Review Procedures. With respect to any material pending litigation of which WDCPF was aware at the origination of any WDCPF I WF Mortgage Loan, WDCPF requested updates from the related borrower, origination counsel and/or borrower’s litigation counsel.
Findings and Conclusions. Based on the foregoing review procedures, WDCPF determined that the disclosure regarding the WDCPF I WF Mortgage Loans in this free writing prospectus is accurate in all material respects. WDCPF also determined that the WDCPF I WF Mortgage Loans were originated in accordance with WDCPF’s origination procedures and underwriting criteria, except as described below under “—WDCPF I WF’s Underwriting Standards—Exceptions”. WDCPF I WF attributes to itself all findings and conclusions resulting from the foregoing review procedures.
Review Procedures in the Event of a Mortgage Loan Substitution. WDCPF will perform a review of any WDCPF I WF Mortgage Loan that it elects to substitute for a WDCPF I WF Mortgage Loan in the pool in connection with a material breach of a representation or warranty or a material document defect. WDCPF, and if appropriate its legal counsel, will review the mortgage loan documents and servicing history of the substitute mortgage loan to confirm it meets each of the criteria required under the terms of the related Mortgage Loan Purchase Agreement and the Pooling and Servicing Agreement (the “Qualification Criteria”). WDCPF will engage a third party accounting firm to compare the Qualification Criteria against the underlying source documentation to verify the accuracy of the review by WDCPF and to confirm any numerical and/or statistical information to be disclosed in any required filings under the Exchange Act. Legal counsel will also be engaged by WDCPF to render any tax opinion required in connection with the substitution.
WDCPF I WF’s Underwriting Standards
Overview. Set forth below is a description of certain general underwriting guidelines with respect to commercial mortgage loans originated or table funded by WDCPF I WF for securitization.
Notwithstanding the description below, given the unique nature of commercial mortgaged properties, the underwriting and origination procedures and the credit analysis with respect to any particular commercial mortgage loan may significantly differ from one asset to another, and will be driven by circumstances particular to that mortgaged property, including, among others, the property type, current use, size, location, market conditions, reserve requirements, additional collateral, tenant quality and lease terms, borrower identity, sponsorship, performance history and/or other factors. Therefore, this general description of WDCPF I WF’s origination procedures and underwriting criteria is not intended as a representation that every commercial mortgage loan originated by it complies entirely with all procedures and criteria set forth below. For important information about the circumstances that have affected the underwriting of certain WDCPF I WF Mortgage Loans, see “—Exceptions” below.
Members of the WDCPF Review Team and real estate professionals associated with any table-funded lenders focus on sourcing, structuring, underwriting and performing due
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diligence on their commercial mortgage loans. Structured finance professional work closely with real estate professionals to ensure that the loans are suitable for securitization and satisfy rating agency criteria. All of the WDCPF I WF Mortgage Loans, including those originated by table funded lenders must be approved by the credit committee described below under “—Loan Approval”.
With respect to certain mortgage loans, WDCPF I WF has delegated certain of its underwriting and origination functions to one or more table-funded lenders or other third-party service providers, subject to loan-to-loan oversight and ultimate review and approval by the WDCPF Review Team. These functions were all performed in substantial accordance with the mortgage loan approval procedures described in this free writing prospectus. In all cases, mortgage loans are documented on the approved documentation of WDCPF I WF.
If a mortgage loan exhibits any one or more of the following characteristics, variances from origination procedures and underwriting criteria described below may be considered acceptable under the circumstances: (i) low loan-to-value ratio; (ii) high debt service coverage ratio; (iii) experienced property sponsor(s)/guarantor(s) with financial wherewithal; (iv) additional springing reserves; (v) cash flow sweeps; and (vi) elements of recourse included in the mortgage loan.
Loan Analysis. Both a credit analysis and a collateral analysis are conducted with respect to each mortgage loan. The credit analysis of the borrower generally includes a review of third-party credit reports and/or judgment, lien, bankruptcy and pending litigation searches. The collateral analysis generally includes a review of, in each case to the extent provided by the related sponsor and/or borrower and applicable, the historical property operating statements, rent rolls and certain significant tenant leases. The credit underwriting also generally includes a review of third party reports including appraisals, environmental reports, engineering assessments, zoning reports and seismic reports, if applicable and obtained. Generally, a member of the mortgage loan underwriting team also conducts a site inspection to ascertain the overall quality, functionality and competitiveness of the property, including its neighborhood and market, accessibility and visibility, and to assess the tenancy of the property. The submarket in which the mortgaged property is located is assessed to evaluate competitive or comparable properties as well as market trends. Unless otherwise specified, all financial, occupancy and other information contained in this free writing prospectus is based on such information and we cannot assure you that such financial, occupancy and other information remains accurate.
Loan Approval. All mortgage loans originated or table funded by WDCPF I WF require approval by a loan credit committee, which includes senior executives of WDCPF. The committee may approve a mortgage loan as recommended, request that additional due diligence be completed prior to approval, approve subject to modifications of loan terms, or decline a mortgage loan.
Debt Service Coverage Ratio and Loan-to-Value Ratio. Generally, the debt service coverage ratio for a mortgage loan originated or table funded by WDCPF I WF is required to be equal to or greater than 1.20x, and the loan-to-value ratio for a mortgage loan originated or table funded by WDCPF I WF is required to be equal to orless than 80%;provided that the underwriting guidelines provide that exceptions may be made when consideration is given to circumstances particular to a mortgage loan, the related mortgaged property, loan-to-value ratio, reserves or other factors. For example, WDCPF I WF may originate a mortgage loan with a debt service coverage ratio below 1.20x based on, among other things, the amortization features of the mortgage loan (for example, if the mortgage loan provides for relatively rapid amortization), the type of tenants and leases at
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the mortgaged property, the taking of additional collateral such as reserves, letters of credit and/or guarantees, WDCPF I WF’s judgment of improved property and/or market performance and/or other relevant factors.
Additionally, with respect to certain mortgage loans originated or table funded by WDCPF I WF, there may exist subordinate debt secured by the related mortgaged property and/or mezzanine debt secured by direct or indirect ownership interests in the borrower. Such mortgage loans may have a lower debt service coverage ratio, and a higher loan-to-value ratio, if such subordinate or mezzanine debt is taken into account. Also, certain mortgage loans may provide for only-interest payments prior to maturity, or for an interest-only period during a portion of the term of the mortgage loan. The debt service coverage ratio guideline discussed above is calculated based on values determined at the origination of the mortgage loan.
Additional Debt. Certain mortgage loans originated or table funded by WDCPF I WF may have, or permit in the future, certain additional subordinate debt, whether secured or unsecured. It is possible that an affiliate of WDCPF I WF may be the lender on that additional debt.
The debt service coverage ratios described above will be lower based on the inclusion of the payments related to such additional debt, and the loan-to-value ratios described above will be higher based on the inclusion of the amount of any such additional debt.
Assessments of Property Condition. As part of WDCPF I WF’s underwriting process, the following third party assessments and reports will generally be obtained:
· | Appraisals. Independent appraisals or an update of an independent appraisal are required in connection with the origination of each mortgage loan. WDCPF I WF requires that the appraiser comply with and abide by Title XI of the Financial Institution Reform, Recovery and Enforcement Act of 1989 (although such statute is not applicable to WDCPF) and the Uniform Standards of Professional Appraisal Practice. |
· | Environmental Assessment. Phase I environmental assessments that conform to the American Society for Testing and Materials (ASTM) Standard E1527-13 entitled, “Standard Practice for Environmental Site Assessment: Phase I Environmental Site Assessment Process,” as may be amended from time to time, are performed on all real property collateral. However, when circumstances warrant, an update of a prior environmental assessment, a transaction screen or a desktop review may be utilized. Nevertheless, an environmental assessment conducted at any particular real property collateral will not necessarily cover all potential environmental issues. |
Depending on the findings of the initial environmental assessment, any of the following may be required: additional environmental testing, such as a Phase II environmental assessment with respect to the real property collateral; an environmental insurance policy; and/or a guaranty or reserves with respect to environmental matters.
· | Property Condition Assessments. Inspections or updates of previously conducted inspections are conducted by independent licensed engineers or architects or both for all properties in connection with the origination of a mortgage loan. The inspections are conducted to inspect the exterior walls, roofing, interior construction, mechanical and electrical systems and general condition of the site, buildings and other improvements located at a property. The resulting reports on some of the properties may indicate a variety of deferred maintenance items and recommended |
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capital expenditures. In some instances, repairs or maintenance are completed before closing or cash reserves are established to fund the deferred maintenance or replacement items or both.
· | Seismic Report. Generally, a seismic report is required for all properties located in seismic zones 3 or 4. |
· | Zoning and Building Code Compliance. With respect to each mortgage loan, WDCPF I WF will generally consider whether the use and occupancy of the related mortgaged property is in material compliance with zoning, land-use, building rules, regulations and orders then applicable to that property. Evidence of this compliance may be in the form of one or more of the following: legal opinions; surveys; recorded documents; temporary or permanent certificates of occupancy; letters from government officials or agencies; title insurance endorsements; engineering or consulting reports; and/or representations by the related borrower. |
However, the underwriting guidelines provide that WDCPF I WF may, on a case-by-case basis, consider a loan secured by real property that does not conform to current zoning regulations governing density, size, set-backs or parking for the property under certain circumstances including, but not limited to, when (i) legislation or the local zoning or housing authority permits the improvements to be rebuilt to pre-damage use, size and density in the event of partial or full destruction; and (ii) documentation of such permission is submitted in the form of legislation or a variance letter or certificate of rebuildability from the zoning authority.
Escrow Requirements. Generally, WDCPF I WF requires most borrowers to fund various escrows, such as (to the extent applicable):
· | Taxes. Typically, an initial deposit and monthly escrow deposits equal to 1/12 of the annual property taxes (based on the most recent property assessment and the current millage rate) are required to provide WDCPF I WF with sufficient funds to satisfy all taxes and assessments, except that such escrows are not required in certain circumstances, including, but not limited to, (i) if there is an institutional sponsor or high net worth individual sponsor; or (ii) if the related mortgaged property is a single tenant property in which the related tenant is required to pay taxes directly. |
· | Insurance. If the mortgaged property is insured under an individual policy (i.e., the mortgaged property is not covered by a blanket policy), typically an initial deposit and monthly escrow deposits equal to 1/12 of the annual property insurance premium are required to provide WDCPF I WF with sufficient funds to pay all insurance premiums, except that such escrows are not required in certain circumstances, including, but not limited to, (i) if the related borrower maintains a blanket insurance policy; or (ii) if the related mortgaged property is a single tenant property and the related tenant self-insures. |
· | Replacement Reserves. Replacement reserves are generally calculated in accordance with the expected useful life of the components of the mortgaged property during the term of the mortgage loan, except that such escrows are not required in certain circumstances, including, but not limited to, if the related mortgaged property is a single tenant property and the related tenant is responsible for all repairs and maintenance, including those required with respect to the roof and improvement structure. |
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· | Completion Repair/Environmental Remediation. Typically, a completion repair or remediation reserve is required where an environmental or engineering report suggests that such reserve is necessary. Upon funding of the applicable mortgage loan, WDCPF I WF generally requires that at least 125% of the estimated costs of repairs or replacements be reserved and generally requires that repairs or replacements be completed within a year after the funding of the applicable mortgage loan, except that such escrows are not required in certain circumstances, including, but not limited to, (i) if the sponsor of the borrower delivers a guarantee with respect to such matter; (ii) if the estimated cost of such repair or remediation does not materially impact the mortgaged property’s function, performance or value, or if the related mortgaged property is a single tenant property for which the tenant is responsible for such repair or remediation; or (iii) if environmental insurance is obtained or already in place. |
· | Tenant Improvement/Lease Commissions. In most cases, various tenants have lease expirations within the loan term. Special reserves may be required to be funded either at closing of the mortgage loan and/or during the related loan term to cover certain anticipated leasing commissions or tenant improvement costs which might be associated with re-leasing the space occupied by such tenants, except that such escrows are not required in certain circumstances, including, but not limited to, (i) if the related mortgaged property is a single tenant property and the related tenant’s lease extends beyond the loan term; or (ii) where rent at the related mortgaged property is considered below market. |
WDCPF I WF may accept an alternative to a cash escrow or reserve from a borrower, such as a letter of credit or a guarantee from the borrower or an affiliate of the borrower or periodic evidence that the items for which the escrow or reserve would have been established are being paid or addressed. In some cases, WDCPF I WF may determine that establishing an escrow or reserve is not warranted given the amounts that would be involved and WDCPF I WF’s evaluation of the ability of the mortgaged property, the borrower or a holder of direct or indirect ownership interests in the borrower to bear the subject expense or cost absent creation of an escrow or reserve.
For a description of the escrows collected with respect to the WDCPF I WF Mortgage Loans, please see Annex A-1 to this free writing prospectus.
Title Insurance Policy. The borrower is required to provide, and WDCPF I WF or its origination counsel typically will review, a title insurance policy for each mortgaged property. The title insurance policies provided typically must meet the following requirements: (a) written by a title insurer licensed to do business in the jurisdiction where the mortgaged property is located; (b) in an amount at least equal to the original principal balance of the mortgage loan; (c) protection and benefits run to the mortgagee and its successors and assigns; (d) written on an American Land Title Association form or equivalent policy promulgated in the jurisdiction where the mortgaged property is located; and (e) if a survey was prepared, the legal description of the mortgaged property in the title policy conforms to that shown on the survey.
Property Insurance. WDCPF typically requires the borrower to provide one or more of the following insurance policies: (1) commercial general liability insurance for bodily injury or death and property damage; (2) an “All Risk of Physical Loss” policy; (3) if applicable, boiler and machinery coverage; and (4) if the mortgaged property is located in a special flood hazard area where mandatory flood insurance purchase requirements apply, flood insurance. In some cases, a sole tenant is responsible for maintaining insurance and,
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subject to the satisfaction of rating conditions or net worth criteria, is allowed to self-insure against the risks.
Exceptions
The WDCPF I WF Mortgage Loans were originated in accordance with the underwriting criteria set forth above.
Servicing
Interim servicing for all loans originated or table funded by WDCPF I WF prior to securitization is typically performed by Walker & Dunlop, LLC, an affiliate of WDCPF. Generally, servicing responsibilities are transferred from the interim servicer to the applicable master servicer of the securitization trust at the closing of the securitization, but Walker & Dunlop, LLC is expected to retain certain sub-servicing responsibilities, including with respect to all of the WDCPF I WF Mortgage Loans.
Compliance with Rule 15Ga-1 under the Exchange Act
WDCPF I WF has no history as a securitizer prior to September 2014. WDCPF I WF filed its most recent Form ABS-15G with the SEC on February 6, 2015. Such Form ABS-15G is available electronically though the SEC’s EDGAR system. The Central Index Key number of WDCPF I WF is 0001617874. With respect to the period from and including July 1, 2014, to and including March 31, 2015, WDCPF I WF does not have any activity to report as required by Rule 15Ga-1 with respect to repurchase or replacement requests in connection with breaches of representations and warranties made by it as a sponsor of commercial mortgage securitizations.
National Cooperative Bank, N.A.
General
National Cooperative Bank, N.A. is a national banking association regulated by the Office of the Comptroller of the Currency. National Cooperative Bank, N.A. is wholly-owned by National Consumer Cooperative Bank, a federally chartered corporation. The executive offices of National Cooperative Bank, N.A. are located at 2011 Crystal Drive, Suite 800, Arlington, VA 22202. National Cooperative Bank, N.A. is engaged in a wide range of banking, financial and finance-related activities throughout the United States.
National Cooperative Bank, N.A. converted to a national bank charter from a federal thrift charter effective as of December 31, 2014. As a result of the conversion, its name changed from NCB, FSB to National Cooperative Bank, N.A. The conversion permits the bank to increase its commercial lending but does not otherwise impact its commercial real estate lending business or its servicing or deposit platforms. Similarly, the bank’s Board of Directors and senior management have not changed as a result of the conversion, and the Office of the Comptroller of the Currency continues to be the primary federal regulator of the bank.
In connection with providing the representations and warranties described above under “Description of the Mortgage Pool—Representations and Warranties”, National Cooperative Bank, N.A. will conduct its own due diligence review. In addition, mortgage loan seller’s counsel will prepare, among other things, initial exception lists to the representations and warranties. Counsel will also review certain loan documentation and perform due diligence procedures. If a cure, repurchase or substitution is required with respect to a mortgage loan sold by National Cooperative Bank, N.A. in the event of a material document defect or
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material breach of a representation or warranty with respect to such mortgage loan, National Cooperative Bank, N.A. will be the sole party responsible for any repurchase or substitution. See “Description of the Mortgage Pool—Cures, Repurchases and Substitutions” and “Risk Factors—Risks Related to the Mortgage Loans—No Party is Obligated to Review the Mortgage Loans to Determine Whether Representations and Warranties Are True; Mortgage Loan Sellers or Other Responsible Parties May Not Be Able To Make a Required Repurchase or Substitution of a Defective Mortgage Loan” in this free writing prospectus. In addition, National Cooperative Bank, N.A. has agreed to indemnify the Depositor and the underwriters and certain of their respective affiliates with respect to certain liabilities arising in connection with the issuance and sale of the Offered Certificates.
Neither National Cooperative Bank, N.A. nor any of its affiliates will insure or guarantee distributions on the Certificates. The Certificateholders will have no rights or remedies against National Cooperative Bank, N.A. for any losses or other claims in connection with the Certificates or the mortgage loans except in respect of the repurchase and substitution obligations for material document defects or the material breaches of representations and warranties made by National Cooperative Bank, N.A. in the related Mortgage Loan Purchase Agreement as described under “Description of the Mortgage Pool—Cures, Repurchases and Substitutions” in this free writing prospectus.
A wholly-owned subsidiary of National Cooperative Bank, N.A. is a party to a repurchase facility with Wells Fargo Bank, National Association. None of the Mortgage Loans that National Cooperative Bank, N.A. will transfer to the Depositor are subject to such repurchase agreement. National Cooperative Bank, N.A. is party to an interest rate hedging arrangement with Wells Fargo Bank, National Association with respect to twenty (20) of the National Cooperative Bank, N.A. Mortgage Loans, which have an aggregate Cut-off Date Principal Balance of $59,903,355, representing approximately 5.1% of the Cut-off Date Pool Balance, and such hedging arrangements will terminate with respect to such loans that National Cooperative Bank, N.A. will transfer to the Depositor in connection with the transfer of those Mortgage Loans pursuant to this securitization transaction. See “—Affiliations and Certain Relationships Among Certain Transaction Parties” below.
National Cooperative Bank, N.A.’s Securitization Program
National Cooperative Bank, N.A. has been an active participant in securitization of commercial and multifamily mortgage loans as a mortgage loan seller and sponsor since 2002. Its parent, National Consumer Cooperative Bank, has been an active participant in securitization of commercial and multifamily mortgage loans as a mortgage loan seller since 1992. This is the 40th commercial mortgage loan securitization to which National Cooperative Bank, N.A. and its affiliates are contributing loans. During the period commencing on January 1, 1992 and ending on April 30, 2015, National Cooperative Bank, N.A. and its affiliates sold approximately $4.8 billion of commercial and multifamily mortgage loans into commercial mortgage-backed securitization transactions. Since 1998, National Cooperative Bank, N.A. together with its parent National Consumer Cooperative Bank securitized approximately $3.2 billion of multifamily loans in agency mortgage security backed transactions.
In addition to commercial and multifamily mortgage loans, National Cooperative Bank, N.A. has securitized residential mortgage loans.
National Cooperative Bank, N.A.’s Underwriting Standards and Processes
General. All of the mortgage loans sold to the Depositor by National Cooperative Bank, N.A. were originated by National Cooperative Bank, N.A. or an affiliate of National
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Cooperative Bank, N.A., generally in accordance with the underwriting criteria described below. Twenty-three (23) of the thirty-five (35) Mortgage Loans that National Cooperative Bank, N.A. will transfer to the Depositor were originated by its parent company, National Consumer Cooperative Bank. National Cooperative Bank, N.A. has implemented general loan policies and guidelines establishing certain procedures with respect to underwriting its mortgage loans. The underwriting and origination procedures and the credit analysis with respect to any particular mortgage loan may significantly differ from one mortgage loan to another, and will be driven by circumstances particular to that mortgage loan and the related mortgaged real property, including, among others, its type, physical quality, size, environmental condition, location, market conditions, reserve requirements and other factors. Accordingly, there is no assurance that every loan will comply in all respects with National Cooperative Bank, N.A.’s general guidelines.
Loan Analysis. In connection with the origination of mortgage loans, National Cooperative Bank, N.A. conducts an extensive review of the related mortgaged real property, which includes an analysis of the appraisal, environmental report, property condition report, seismic reports (where applicable), historical operating statements, ground lease (where applicable), leases, maintenance schedules and rent rolls (where applicable), budgets, sources and uses and related information provided by the borrower. The credit of the borrower and, generally for loans other than those secured by residential cooperative properties, certain of its key principals, are examined for financial strength and character prior to origination of the mortgage loan, which may include a review of annual financial statements and judgment, lien, bankruptcy and outstanding litigation searches. As part of the underwriting process, a site inspection of each mortgaged real property is conducted by National Cooperative Bank, N.A., an affiliate or a third-party engineering firm.
Loan Approval. Prior to commitment, all mortgage loans must be approved by National Cooperative Bank, N.A.’s credit committee (the make-up of which varies by loan size and type) in accordance with its credit policies. The credit committee may approve a mortgage loan as recommended, request additional due diligence, modify the loan terms or decline a loan transaction.
Environmental Assessments. An environmental site assessment (generally a Phase I environmental site assessment) is performed on all mortgaged properties. The environmental assessments are performed during the 12-month period preceding origination of the related mortgage loan. Depending on the findings of the environmental site assessment, any of the following may be required: additional environmental testing, such as a Phase II environmental assessment on the subject mortgaged property; obligating the related borrower to perform remediation as a condition to the closing of such mortgage loan or within a period following the closing of such mortgage loan; and/or the posting of cash reserves, letters of credit or guaranties so secure the performance of any recommended remediation action. Additionally, all borrowers are required to provide customary environmental representations, warranties, covenants and indemnities relating to the existence and use of hazardous substances on the mortgaged properties.
Property Condition Assessments. Independent engineering firms conduct inspections with respect to each mortgaged real property generally within the twelve-month period preceding the origination of the related mortgage loan. The resulting reports on some of the properties may indicate a variety of deferred maintenance items and recommended capital expenditures. In some instances where deferred maintenance items are identified, repairs or maintenance are completed before closing or cash reserves, letters of credit or guaranties so secure the performance of the deferred maintenance items.
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Appraisals. An appraisal of each of the mortgaged properties is performed prior to the origination of each such loan. Independent MAI appraisers performed the appraisals. Such appraisals generally complied with (or the appraiser certified that such appraisal complied with) the appraisal guidelines of Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989.
Seismic Report. If the property consists of improvements located in seismic zone 3 or 4, National Cooperative Bank, N.A. typically requires a seismic report to establish the probable maximum or bounded loss for the improvements at the property as a result of an earthquake.
Title Insurance. The borrower is required to provide, and National Cooperative Bank, N.A.’s origination counsel reviews, a title insurance policy for each property. The title insurance policies provided typically must meet the following requirements: (i) written by a title insurer licensed to do business in the jurisdiction where the mortgaged property is located, (ii) in an amount at least equal to the original principal balance of the mortgage loan, (iii) protection and benefits run to the mortgagee and its successors and assigns, (iv) written on an American Land Title Association form or equivalent policy promulgated in the jurisdiction where the mortgaged property is located and (v) if a survey was prepared, the legal description of the mortgaged property in the title policy conforms to that shown on the survey.
Additional Debt. Certain of the residential cooperative mortgage loans may have or permit in the future certain additional subordinate debt, whether secured or unsecured. The mortgage loans that are other than residential cooperative mortgage loans will generally prohibit additional indebtedness secured by the related mortgaged property, but may have or permit additional unsecured indebtedness and trade payables. In many cases, National Cooperative Bank, N.A. or one of its affiliates is and/or will be the lender on that additional debt. The debt service coverage ratios described herein would be lower if the payments related to such additional debt were included in the calculation of such debt service coverage ratios and the loan-to-value ratios described herein would be higher if the amount of any such additional subordinate debt were included in the calculation of such loan-to-value ratios.
Debt Service Coverage Ratio and LTV Ratio. National Cooperative Bank, N.A. evaluates debt service coverage ratios and loan-to-value ratios when underwriting a mortgage loan. Generally, the debt service coverage ratio for mortgage loans (other than residential cooperative mortgage loans) originated or acquired by National Cooperative Bank, N.A. will be equal to or greater than 1.20x and the loan-to-value ratio for mortgage loans (other than residential cooperative mortgage loans) originated or acquired by National Cooperative Bank, N.A. will be equal to orless than 75%;provided,however, exceptions may be made when consideration is given to circumstances particular to the mortgage loan, the related property, loan-to-value ratio, reserves or other factors. Debt service coverage ratios are calculated based on Underwritten Net Cash Flow. Underwritten Net Cash Flow is often a highly subjective number based on a variety of assumptions regarding, and adjustments to, revenues and expenses with respect to the related real property collateral. For example, when calculating the debt service coverage ratio for a multifamily or commercial mortgage loan, annual net cash flow that was calculated based on assumptions regarding projected future rental income, expenses and/or occupancy, may be utilized. We cannot assure you that the foregoing assumptions made with respect to any prospective multifamily, manufactured housing community or commercial mortgage loan will, in fact, be consistent with actual property performance. Such underwritten net cash flow may be higher than historical net cash flow reflected in recent financial statements. In the case of a residential cooperative property, Underwritten Net Cash Flow is the projected net cash flow reflected in
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the most recent appraisal obtained by or otherwise in the possession of the related Mortgage Loan Seller as of the cut-off date and, in general, equals projected operating income at the property assuming such property is operated as a rental property with rents and other income set at prevailing market rates (but taking into account the presence of existing rent regulated or rent-controlled rental tenants), reduced by underwritten property operating expenses, a market-rate vacancy assumption and projected replacement reserves, in each case as determined by the appraiser. However, the projected net cash flow used in such determinations may differ materially from the scheduled monthly maintenance payments from the tenant-stockholders upon which residential cooperatives depend. The loan-to-value ratio with respect to each mortgage loan secured by a residential cooperative property is calculated using the value estimate reflected in the most recent appraisal obtained by or otherwise in the possession of the related Mortgage Loan Seller as of the cut-off date determined as if such residential cooperative property is operated as a residential cooperative. This value, in general, equals the sum of (i) the gross sellout value of all cooperative units in such residential cooperative property (applying a discount for units that are subject to existing rent regulated or rent-controlled rental tenants as and if deemed appropriate by the appraiser), based in part on various comparable sales of cooperative apartment units in the market, plus (ii) the amount of the underlying debt encumbering the related Mortgaged Property. With respect to limited equity cooperatives (i.e., housing cooperatives in which eligible members purchase shares at below market prices and are subject to restrictions on the sale price for which units may be re-sold), the gross sellout value referenced in the preceding sentence is calculated without regard to any applicable sale price restriction. The comparable sales considered in the appraisers’ estimates of gross sellout values may have occurred at properties where the cooperative entity’s underlying mortgage debt per cooperative unit was substantially more or less than that at the applicable Mortgaged Property. The appraisers generally made no adjustments to comparable sales statistics to account for any such differences, although monthly unit maintenance obligations may have been considered. In addition, National Cooperative Bank, N.A. will calculate a loan-to-value ratio for each residential cooperative mortgage loan based upon the value of such residential cooperative property as a multifamily rental property. The value of a residential cooperative property as a multifamily rental property is reflected in the most recent appraisal obtained by or otherwise in the possession of the related Mortgage Loan Seller as of the cut-off date and, in general, is derived by applying an appropriate capitalization rate (as determined by the appraiser) to the Underwritten Net Cash Flow for such residential cooperative property.
Zoning and Building Code Compliance. With respect to each mortgage loan, National Cooperative Bank, N.A. will generally consider whether the use and occupancy of the related real property collateral is in material compliance with zoning, land-use and building rules, regulations and orders then applicable to that property. Evidence of this compliance may be in the form of one or more of the following: legal opinions; surveys; recorded documents; temporary or permanent Certificates of occupancy; letters from governmental officials or agencies; title insurance endorsements; third party prepared zoning reports; information set forth in the appraisal of the related property; and/or representations by the related borrower. National Cooperative Bank, N.A. generally requires borrowers to obtain law and ordinance coverage. If a material violation exists with respect to a mortgaged property, National Cooperative Bank, N.A. may require the borrower to remediate such violation and/or to establish a reserve to cover the cost of such remediation.
Hazard, Liability and Other Insurance. The mortgage loans typically require that the related property be insured by a hazard insurance policy with a customary deductible and in an amount at least equal to the lesser of the outstanding principal balance of the mortgage loan or 100% of the full insurable replacement cost of the improvements located on the
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property. If applicable, the policy contains appropriate endorsements to avoid the application of coinsurance and does not permit reduction in insurance proceeds for depreciation. Flood insurance, if available, must be in effect for any property that at the time of origination included material improvements in any area identified by the Federal Emergency Management Agency as being situated in a Special Flood Hazard Area. The flood insurance policy must meet the requirements of the then-current guidelines of the Federal Insurance Administration and be provided by a generally acceptable insurance carrier in an amount not less than the least of (i) the outstanding principal balance of the mortgage loan, (ii) the full insurable value of the property, and (iii) the maximum amount of insurance available under the National Flood Insurance Program. The standard form of hazard insurance policy typically covers physical damage or destruction of improvements on the mortgaged property caused by fire, lighting, explosion, smoke, windstorm and hail, riot or strike and civil commotion. The policies may contain some conditions and exclusions of coverage, including exclusions related to acts of terrorism.
Each mortgage loan typically also requires the borrower to maintain comprehensive general liability insurance against claims for bodily injury or property damage occurring on, in or about the property in an amount that is generally consistent with currently prevailing capital market standards.
Each mortgage loan typically further requires the related borrower to maintain business interruption or loss of income insurance in an amount notless than 100% of the projected shareholder or unit owner maintenance income for the related property (in the case of a residential cooperative mortgage loan) or projected rental income (in the case of a mortgage loan other than a residential cooperative mortgage loan) for a period of not less than twelve months.
The properties are typically not insured for earthquake risk unless a seismic report indicates a PML of greater than 20%.
Escrow Requirements. National Cooperative Bank, N.A. may require a borrower to fund various escrows. Such escrows may include escrows for taxes and insurance premiums (to cover amounts due prior to their respective due dates), reserves to cover the cost of repairs recommended pursuant to a building condition report prepared for National Cooperative Bank, N.A. or an affiliate that originated the loan, and/or reserves to secure the performance of environmental or other remediation work. In the case of mortgage loans that are other than residential cooperative mortgage loans, such escrows may also include replacement reserves, reserves to cover the costs of tenant improvements, leasing commissions and other re-tenanting expenses and reserves to cure deficiencies in debt service coverage ratios. In some cases such reserves may only be required upon the occurrence of certain events. A case-by-case analysis will be conducted to determine the need for a particular escrow or reserve. National Cooperative Bank, N.A. may determine that establishing an escrow or reserve is not warranted given the amounts that would be involved and National Cooperative Bank, N.A.’s evaluation of the ability of the property, the borrower or a holder of direct or indirect ownership interests in the borrower to bear the subject expense or cost absent creation of an escrow or reserve.
Exceptions. Notwithstanding the discussion under “National Cooperative Bank, N.A.’s Underwriting Standards and Processes” above, one or more of National Cooperative Bank, N.A.’s mortgage loans may vary from, or not comply with, National Cooperative Bank, N.A.’s underwriting policies and guidelines described above. In addition, in the case of one or more of National Cooperative Bank, N.A.’s mortgage loans, National Cooperative Bank, N.A. or another originator may not have strictly applied the underwriting policies and guidelines described above as the result of a case-by-case permitted exception based upon
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other compensating factors. None of the National Cooperative Bank, N.A. Mortgage Loans were originated with any material exceptions to National Cooperative Bank, N.A.’s underwriting guidelines and procedures.
Review of Mortgage Loans for Which National Cooperative Bank, N.A. is the Sponsor
Overview. National Cooperative Bank, N.A., in its capacity as the Sponsor of the National Cooperative Bank, N.A. Mortgage Loans, has conducted a review of the National Cooperative Bank, N.A. Mortgage Loans it is selling to the Depositor designed and effected to provide reasonable assurance that the disclosure related to the National Cooperative Bank, N.A. Mortgage Loans is accurate in all material respects. National Cooperative Bank, N.A. determined the nature, extent and timing of the review and the level of assistance provided by any third parties. The review of the National Cooperative Bank, N.A. Mortgage Loans was performed by a deal team comprised of real estate and securitization professionals who are employees of National Cooperative Bank, N.A. (collectively, the “National Cooperative Bank, N.A. Deal Team”) with the assistance of certain third parties. National Cooperative Bank, N.A. has ultimate authority and control over, and assumes all responsibility for and attributes to itself, the review of the mortgage loans that it is selling to the Depositor and the review’s findings and conclusions. The review procedures described below were employed with respect to all of the National Cooperative Bank, N.A. Mortgage Loans (rather than relying on sampling procedures).
Database. To prepare for securitization, members of the National Cooperative Bank, N.A. Deal Team created a database of loan-level and property-level information relating to each National Cooperative Bank, N.A. Mortgage Loan. The database was compiled from, among other sources, the related mortgage loan documents, third party reports (appraisals, environmental site assessments and property condition reports, insurance policies, borrower-supplied information (including, to the extent available, maintenance schedules and rent rolls (if applicable), leases and financial or operating statements) and information collected by National Cooperative Bank, N.A. during the underwriting process. Prior to securitization of each National Cooperative Bank, N.A. Mortgage Loan, the National Cooperative Bank, N.A. Deal Team may have updated the information in the database with respect to such National Cooperative Bank, N.A. Mortgage Loan based on current information brought to the attention of the National Cooperative Bank, N.A. Deal Team relating to loan payment status and escrows, updated operating statements, maintenance schedules and rent rolls (if applicable), leasing activity, and other relevant information. Such updates were not intended to be, and do not serve as, a re-underwriting of any Mortgage Loan.
A data tape (the “National Cooperative Bank, N.A. Data Tape”) containing detailed information regarding each National Cooperative Bank, N.A. Mortgage Loan was created from, among other sources, the information in the database referred to in the prior paragraph. The National Cooperative Bank, N.A. Data Tape was used by the National Cooperative Bank, N.A. Deal Team to provide the numerical information regarding the National Cooperative Bank, N.A. Mortgage Loans in this free writing prospectus.
Data Comparisons and Recalculation. The Depositor, on behalf of National Cooperative Bank, N.A., engaged a third party accounting firm to perform certain data comparison and recalculation procedures which were designed or provided by National Cooperative Bank, N.A. relating to information in this free writing prospectus regarding the National Cooperative Bank, N.A. Mortgage Loans. These procedures included:
· | comparing the information in the National Cooperative Bank, N.A. Data Tape against various source documents provided by National Cooperative Bank, N.A.; |
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· | comparing numerical information regarding the National Cooperative Bank, N.A. Mortgage Loans and the related Mortgaged Properties disclosed in this free writing prospectus against the information contained in the National Cooperative Bank, N.A. Data Tape; and |
· | recalculating certain percentages, ratios and other formulae relating to the National Cooperative Bank, N.A. Mortgage Loans disclosed in this free writing prospectus. |
Legal Review. National Cooperative Bank, N.A. engaged counsel to conduct certain legal reviews of the National Cooperative Bank, N.A. Mortgage Loans for disclosure in this free writing prospectus. In anticipation of the securitization of each National Cooperative Bank, N.A. Mortgage Loan, counsel reviewed the principal loan documents for each mortgage loan to identify material deviations from National Cooperative Bank, N.A.’s standard form loan documents. In addition, counsel reviewed National Cooperative Bank, N.A.’s representations and warranties set forth on Annex C-1 to this free writing prospectus and, if applicable, identified exceptions to those representations and warranties.
Other Review Procedures. National Cooperative Bank, N.A. has serviced each National Cooperative Bank, N.A. mortgage loan since origination and has confirmed that it is not aware of any material events, except as previously identified, concerning the related Mortgage Loan, the Mortgaged Property and the borrower occurring since origination, including, but not limited to, (i) loan modifications or assumptions, or releases of the related borrower or Mortgaged Property; (ii) damage to the Mortgaged Property that materially and adversely affects its value as security for the Mortgage Loan; (iii) pending condemnation actions; (iv) litigation, regulatory or other proceedings against the Mortgaged Property or borrower, or notice of non-compliance with environmental laws; (iv) bankruptcies involving any borrower; and (v) any existing or incipient material defaults.
The National Cooperative Bank, N.A. Deal Team also reviewed the National Cooperative Bank, N.A. Mortgage Loans to confirm, with the assistance of counsel, whether any National Cooperative Bank, N.A. Mortgage Loan materially deviated from the underwriting guidelines set forth under “—National Cooperative Bank, N.A.’s Underwriting Standards and Processes” above. See “Description of the Mortgage Pool—Exceptions to Underwriting Guidelines” in this free writing prospectus.
Findings and Conclusions. National Cooperative Bank, N.A. found and concluded with reasonable assurance that the disclosure regarding the National Cooperative Bank, N.A. Mortgage Loans in this free writing prospectus is accurate in all material respects. National Cooperative Bank, N.A. also found and concluded with reasonable assurance that the National Cooperative Bank, N.A. Mortgage Loans were originated in accordance with National Cooperative Bank, N.A.’s origination policies, procedures and underwriting criteria set forth “under “—National Cooperative Bank, N.A.’s Underwriting Standards and Processes” above except as described above under “Description of the Mortgage Pool—Exceptions to Underwriting Guidelines” in this free writing prospectus.
Review Procedures in the Event of a Mortgage Loan Substitution. National Cooperative Bank, N.A. will perform a review of any National Cooperative Bank, N.A. Mortgage Loan that it elects to substitute for a National Cooperative Bank, N.A. Mortgage Loan in the pool in connection with a material breach of a representation or warranty or a material document defect. National Cooperative Bank, N.A., and if appropriate its legal counsel, will review the mortgage loan documents and servicing history of the substitute mortgage loan to confirm it meets each of the criteria required under the terms of the related Mortgage Loan Purchase Agreement and the Pooling and Servicing Agreement. National Cooperative Bank, N.A. may engage a third party accounting firm to compare the such criteria against the underlying
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source documentation to verify the accuracy of the review by National Cooperative Bank, N.A. and to confirm any numerical and/or statistical information to be disclosed in any required filings under the Exchange Act. Legal counsel will also be engaged by National Cooperative Bank, N.A. to render any tax opinion required in connection with the substitution.
Compliance with Rule 15Ga-1 under the Exchange Act
As of the date of this free writing prospectus, National Cooperative Bank, N.A. filed its most recent Form ABS-15G with the SEC on February 17, 2015. Such Form ABS-15G is available electronically though the SEC’s EDGAR system. The Central Index Key number of National Cooperative Bank, N.A. is 0001577313. With respect to the period from and including April 1, 2012, to and including March 31, 2015, National Cooperative Bank, N.A. does not have any activity to report as required by Rule 15Ga-1 with respect to repurchase or replacement requests in connection with breaches of representations and warranties made by it as a sponsor of commercial mortgage securitizations.
The information set forth under “—National Cooperative Bank, N.A.” has been provided by National Cooperative Bank, N.A.
Compensation of the Sponsors
In connection with the offering and sale of the Certificates contemplated by this free writing prospectus, the Sponsors (directly or through affiliates of the Sponsors) will be compensated for the sale of their respective Mortgage Loans in an amount generally equal to the excess, if any, of:
(a) the sum of any proceeds received or value of any interests retained from the sale of the Certificates to investors (whether or not in this offering) and the sale of servicing rights to Wells Fargo Bank, National Association for the servicing of the Mortgage Loans (other than Mortgage Loans sold by National Cooperative Bank, N.A. to the Depositor) (excluding primary servicing rights, if any, retained by a Sponsor or a third party primary servicer), over
(b) the sum of certain costs and expenses of originating or acquiring the Mortgage Loans and certain costs and expenses related to the issuance, offering and sale of the Certificates as generally described in this free writing prospectus.
In the case of the Mortgage Loans as to which Wells Fargo Bank, National Association is the Master Servicer, the applicable mortgage servicing rights (excluding primary servicing rights, if any, retained by a Sponsor or a third party primary servicer) will be sold to such Master Servicer for a price based on the value of the master servicing fees to be paid to such Master Servicer with respect to each such Mortgage Loan and the value of the right to earn income on investments on amounts held by such Master Servicer with respect to such Mortgage Loans.
The Trustee
Wilmington Trust, National Association (“WTNA”) (formerly called M & T Bank, National Association) will act as trustee (the “Trustee”) on behalf of the Certificateholders pursuant to the Pooling and Servicing Agreement. WTNA is a national banking association with trust powers incorporated in 1995. The Trustee’s principal place of business is located at 1100 North Market Street, Wilmington, Delaware 19890. WTNA is an affiliate of Wilmington Trust Company and both WTNA and Wilmington Trust Company are subsidiaries of Wilmington
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Trust Corporation. Since 1998, Wilmington Trust Company has served as trustee in numerous asset-backed securities transactions. As of December 31, 2014, WTNA served as trustee on over 1,500 mortgage-backed related securities transactions having an aggregate original principal balance of approximately $64 billion, of which approximately 77 transactions were commercial mortgage-backed securities transactions having an aggregate original principal balance of approximately $44 billion.
The transaction parties may maintain banking and other commercial relationships with WTNA and its affiliates. In its capacity as trustee on commercial mortgage securitizations, WTNA and its affiliates are generally required to make an advance if the related servicer or special servicer fails to make a required advance. In the past three years, WTNA and its affiliates have not been required to make an advance on a commercial mortgage-backed securities transaction.
WTNA is subject to various legal proceedings that arise from time to time in the ordinary course of business. WTNA does not believe that the ultimate resolution of any of these proceedings will have a material adverse effect on its services as trustee.
The information set forth under this sub-heading has been provided by WTNA. None of the Depositor, the underwriters or any other person, other than WTNA, makes any representation or warranty as to the accuracy or completeness of such information.
The Certificate Administrator, Tax Administrator, Certificate Registrar and Custodian
Wells Fargo Bank, National Association (“Wells Fargo Bank”) will act as certificate administrator, tax administrator, certificate registrar, and custodian under the Pooling and Servicing Agreement (the “Certificate Administrator”).
Wells Fargo Bank is a national banking association and a wholly-owned subsidiary of Wells Fargo & Company. A diversified financial services company, Wells Fargo & Company is a U.S. bank holding company with approximately $1.7 trillion in assets and approximately 265,000 employees as of December 31, 2014, which provides banking, insurance, trust, mortgage and consumer finance services throughout the United States and internationally. Wells Fargo Bank provides retail and commercial banking services and corporate trust, custody, securities lending, securities transfer, cash management, investment management and other financial and fiduciary services. The Depositor, the Sponsors, the Master Servicers, the Special Servicers, the Trustee, the Trust Advisor and the Mortgage Loan Sellers may maintain banking and other commercial relationships with Wells Fargo Bank and its affiliates. Wells Fargo Bank maintains principal corporate trust offices at 9062 Old Annapolis Road, Columbia, Maryland 21045-1951 (among other locations) and its office for certificate transfer services is located at Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479.
Under the terms of the Pooling and Servicing Agreement, Wells Fargo Bank is responsible for securities administration, which includes pool performance calculations, distribution calculations and the preparation of monthly distribution reports. As Certificate Administrator, Wells Fargo Bank is responsible for the preparation and filing of all REMIC and grantor trust tax returns on behalf of the trust REMICs and the preparation of monthly reports on Form 10-D, certain current reports on Form 8-K and annual reports on Form 10-K that are required to be filed with the SEC on behalf of the Issuing Entity. Wells Fargo Bank has been engaged in the business of securities administration since June 30, 1995, and in connection with commercial mortgage-backed securities since 1997. As of
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December 31, 2014, Wells Fargo Bank was acting as securities administrator with respect to more than $171 billion of outstanding commercial mortgage-backed securities.
Wells Fargo Bank is acting as custodian (the “Custodian”) of the mortgage files pursuant to and subject to the pooling and servicing agreement. In that capacity, Wells Fargo Bank is responsible to hold and safeguard the mortgage notes and other contents of the mortgage files on behalf of the Trustee for the benefit of the Certificateholders. Wells Fargo Bank maintains each mortgage file in a separate file folder marked with a unique bar code to assure loan-level file integrity and to assist in inventory management. Files are segregated by transaction or investor. Wells Fargo Bank has been engaged in the mortgage document custody business for more than 25 years. Wells Fargo Bank maintains its commercial document custody facilities in Minneapolis, Minnesota. As of December 31, 2014, Wells Fargo Bank was acting as custodian of more than 116,000 commercial mortgage files.
Wells Fargo Bank serves or may have served within the past two years as loan file custodian for various mortgage loans owned by a Sponsor or an affiliate of a Sponsor, and one or more of those mortgage loans may be included in the Trust. The terms of any custodial agreement under which those services are provided by Wells Fargo Bank are customary for the mortgage-backed securitization industry and provide for the delivery, receipt, review and safekeeping of mortgage loan files.
On June 18, 2014, a group of institutional investors filed a civil complaint in the Supreme Court of the State of New York, New York County, against Wells Fargo Bank, N.A., in its capacity as trustee under 276 residential mortgage backed securities (“RMBS”) trusts, which was later amended on July 18, 2014, to increase the number of trusts to 284 RMBS trusts. On November 24, 2014, the plaintiffs filed a motion to voluntarily dismiss the state court action without prejudice. That same day, a group of institutional investors filed a civil complaint in the United States District Court for the Southern District of New York against Wells Fargo Bank, N.A., alleging claims against the bank in its capacity as trustee for 274 residential mortgage-backed securities (“RMBS”) trusts (the “Complaint”). In December 2014, the plaintiffs’ motion to voluntarily dismiss their original state court action was granted. As with the prior state court action, the Complaint is one of six similar complaints filed contemporaneously against RMBS trustees (Deutsche Bank, Citibank, HSBC, The Bank of New York Mellon and U.S. Bank) by a group of institutional investor plaintiffs. The Complaint against Wells Fargo Bank, N.A. alleges that the trustee caused losses to investors and asserts causes of action based upon, among other things, the trustee’s alleged failure to (i) enforce repurchase obligations of mortgage loan sellers for purported breaches of representations and warranties, (ii) notify investors of alleged events of default purportedly caused by breaches by mortgage loan servicers, and (iii) abide by appropriate standards of care following alleged events of default. Relief sought includes money damages in an unspecified amount, reimbursement of expenses, and equitable relief. Other cases alleging similar causes of action have been filed against Wells Fargo Bank, N.A. and other trustees by RMBS investors in these and other transactions.
There can be no assurances as to the outcome of the litigation, or the possible impact of the litigation on the Wells Fargo Bank or the RMBS trusts. However, Wells Fargo Bank denies liability and believes that it has performed its obligations under the RMBS trusts in good faith, that its actions were not the cause of losses to investors and that it has meritorious defenses, and it intends to contest the plaintiffs’ claims vigorously.
The information set forth under this sub-heading has been provided by Wells Fargo Bank. None of the depositor, the underwriters or any other person, other than Wells Fargo
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Bank, makes any representation or warranty as to the accuracy or completeness of such information.
The Master Servicers
Wells Fargo Bank, National Association
Wells Fargo Bank will act as the master servicer under the Pooling and Servicing Agreement for all of the Mortgage Loans to be deposited into the Trust Fund other than the Mortgage Loans sold to the Depositor by National Cooperative Bank, N.A. (in such capacity, a “Master Servicer”). Wells Fargo Bank is a national banking association organized under the laws of the United States of America, and is a wholly-owned direct and indirect subsidiary of Wells Fargo & Company. On December 31, 2008, Wells Fargo & Company acquired Wachovia Corporation, the owner of Wachovia Bank, National Association (“Wachovia”), and Wachovia Corporation merged with and into Wells Fargo & Company. On March 20, 2010, Wachovia merged with and into Wells Fargo Bank. Like Wells Fargo Bank, Wachovia acted as master servicer of securitized commercial and multifamily mortgage loans and, following the merger of the holding companies, Wells Fargo Bank and Wachovia integrated their two servicing platforms under a senior management team that is a combination of both legacy Wells Fargo Bank managers and legacy Wachovia managers.
Wells Fargo Bank is also a Sponsor, an Originator, a Mortgage Loan Seller, the swap counterparty, the Certificate Administrator, the tax administrator, the custodian and the certificate registrar under this securitization and an affiliate of Wells Fargo Commercial Mortgage Securities, Inc., the Depositor, and of Wells Fargo Securities, LLC, an underwriter. In addition, Wells Fargo Bank is the master servicer, the certificate administrator, the custodian, the tax administrator and the certificate registrar under each of the WFCM 2015-C28 Pooling and Servicing Agreement and the WFCM 2015-LC20 Pooling and Servicing Agreement which govern the servicing of the Brickyard Square Mortgage Loan and the Bella Luna / San Lucas Mortgage Loan, respectively. Wells Fargo Bank is the purchaser under repurchase agreements with each of Rialto Mortgage, Silverpeak, National Cooperative Bank, N.A. and WDCPF I WF, respectively, or, in any such case, with a wholly-owned subsidiary or other affiliate of the subject Mortgage Loan Seller, for the purpose of providing short-term warehousing of mortgage loans originated or acquired by Rialto Mortgage, Silverpeak, National Cooperative Bank, N.A. or WDCPF I WF as applicable. Pursuant to certain interim servicing agreements between Wells Fargo Bank and Rialto Mortgage, a Sponsor, Originator and Mortgage Loan Seller, or certain affiliates of Rialto Mortgage, Wells Fargo Bank acts as primary servicer with respect to certain mortgage loans owned by Rialto Mortgage or such affiliates (subject, in some cases, to the repurchase facility described above in this paragraph) from time to time, including, prior to their inclusion in the Trust Fund, some or all of the Mortgage Loans that Rialto Mortgage will transfer to the Depositor. There are currently no outstanding servicing advances made by Wells Fargo Bank in regards to any Mortgage Loan being transferred by Rialto Mortgage that is serviced by Wells Fargo Bank prior to its inclusion in the Trust Fund. Pursuant to certain interim servicing agreements between Wells Fargo Bank and Silverpeak, a Sponsor, Originator and Mortgage Loan Seller, or certain affiliates of Silverpeak, Wells Fargo Bank acts as primary servicer with respect to certain mortgage loans owned by Silverpeak or such affiliates of Silverpeak (subject, in some cases, to the repurchase facility described above in this paragraph or the repurchase facility provided by Deutsche Bank AG, Cayman Islands Branch described below under "—Affiliations and Certain Relationships Among Certain Transaction Parties") from time to time, including, prior to their inclusion in the Trust Fund, some or all of the Mortgage Loans that Silverpeak will transfer to the Depositor. There are currently no outstanding servicing advances made by Wells Fargo Bank in regards to any Mortgage Loan
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being transferred by Silverpeak that is serviced by Wells Fargo Bank prior to its inclusion in the Trust Fund. Wells Fargo Bank acts as primary servicer with respect to certain mortgage loans it owns, including, prior to their inclusion in the Trust Fund, some or all of the Mortgage Loans transferred by Wells Fargo Bank. There are currently no outstanding servicing advances made by Wells Fargo Bank in regards to any Mortgage Loan being transferred by it that is serviced by Wells Fargo Bank prior to its inclusion in the Trust Fund. Wells Fargo Bank expects to enter into one or more agreements with the other Sponsors (other than National Cooperative Bank, N.A.) to purchase the servicing rights to the related Mortgage Loans and/or the right to be appointed as the Master Servicer with respect to such Mortgage Loans. See “—Affiliations and Certain Relationships Among Certain Transaction Parties” below.
The principal west coast commercial mortgage master servicing offices of Wells Fargo Bank are located at MAC A0227-020, 1901 Harrison Street, Oakland, California 94612. The principal east coast commercial mortgage master servicing offices of Wells Fargo Bank are located at MAC D1086-120, 550 South Tryon Street, Charlotte, North Carolina 28202.
Wells Fargo Bank has been master servicing securitized commercial and multifamily mortgage loans in excess of ten years. Wells Fargo Bank’s primary servicing system runs on McCracken Financial Solutions Corp.’s Strategy CS software. Wells Fargo Bank reports to trustees and certificate administrators in the CREFC® format. The following table sets forth information about Wells Fargo Bank’s portfolio of master or primary serviced commercial and multifamily mortgage loans (including loans in securitization transactions and loans owned by other investors) as of the dates indicated:
Commercial and Multifamily Mortgage Loans | As of | As of | As of 12/31/2014 | As of 3/31/2015 |
By Approximate Number: | 35,189 | 33,354 | 33,590 | 33,399 |
By Approximate Aggregate Unpaid Principal Balance (in billions): | $428.5 | $434.4 | $474.4 | $480.3 |
Within this portfolio, as of March 31, 2015, are approximately 24,503 commercial and multifamily mortgage loans with an unpaid principal balance of approximately $395.6 billion related to commercial mortgage-backed securities or commercial real estate collateralized debt obligation securities. In addition to servicing loans related to commercial mortgage-backed securities and commercial real estate collateralized debt obligation securities, Wells Fargo Bank also services whole loans for itself and a variety of investors. The properties securing loans in Wells Fargo Bank’s servicing portfolio, as of March 31, 2015, were located in all 50 states, the District of Columbia, Guam, Mexico, the Bahamas, the Virgin Islands and Puerto Rico and include retail, office, multifamily, industrial, hospitality and other types of income-producing properties.
In its master servicing and primary servicing activities, Wells Fargo Bank utilizes a mortgage-servicing technology platform with multiple capabilities and reporting functions. This platform allows Wells Fargo Bank to process mortgage servicing activities including, but not limited to: (i) performing account maintenance; (ii) tracking borrower communications; (iii) tracking real estate tax escrows and payments, insurance escrows and payments, replacement reserve escrows and operating statement data and rent rolls; (iv) entering and updating transaction data; and (v) generating various reports.
The following table sets forth information regarding principal and interest advances and servicing advances made by Wells Fargo Bank, as master servicer, on commercial and multifamily mortgage loans included in commercial mortgage-backed securitizations. The information set forth below is the average amount of such advances outstanding over the periods indicated (expressed as a dollar amount and as a percentage of Wells Fargo Bank’s
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portfolio, as of the end of each such period, of master serviced commercial and multifamily mortgage loans included in commercial mortgage-backed securitizations).
Period* | Approximate | Approximate | Approximate |
Calendar Year 2012 | $331,765,453,800 | $2,133,375,220 | 0.64% |
Calendar Year 2013 | $346,011,017,466 | $2,158,219,403 | 0.62% |
Calendar Year 2014 | $377,947,659,331 | $1,750,352,607 | 0.46% |
YTD March 31, 2015 | $382,854,235,509 | $1,782,705,503 | 0.47% |
* | “UPB” means unpaid principal balance, “P&I” means principal and interest advances. “PPA” means property protection advances and “YTD” means year-to-date. |
Wells Fargo Bank is rated by Fitch Ratings, Inc. (“Fitch”), Standard & Poor’s Ratings Services (“S&P”) and Morningstar Credit Ratings, LLC (“Morningstar”) as a primary servicer and a master servicer of commercial mortgage loans. Wells Fargo Bank’s servicer ratings by each of these agencies are outlined below:
Fitch | S&P | Morningstar | |
Primary Servicer: | CPS1- | Above Average | MOR CS1 |
Master Servicer: | CMS1- | Above Average | MOR CS1 |
The long-term deposits of Wells Fargo Bank are rated “AA-” by S&P, “Aa3” by Moody’s Investors Service, Inc. (“Moody’s”) and “AA-” by Fitch. The short-term deposits of Wells Fargo Bank are rated “A-1+” by S&P, “P-1” by Moody’s and “F1+” by Fitch.
Wells Fargo Bank has developed policies, procedures and controls relating to its servicing functions to maintain compliance with applicable servicing agreements and servicing standards, including procedures for handling delinquent loans during the period prior to the occurrence of a special servicing transfer event. Wells Fargo Bank’s master servicing policies and procedures are updated periodically to keep pace with the changes in the commercial mortgage-backed securities industry and have been generally consistent for the last three years in all material respects. The only significant changes in Wells Fargo Bank’s policies and procedures have come in response to changes in federal or state law or investor requirements, such as updates issued by the Federal National Mortgage Association or Federal Home Loan Mortgage Corporation.
Wells Fargo Bank may perform any of its obligations under the Pooling and Servicing Agreement through one or more third-party vendors, affiliates or subsidiaries. Notwithstanding the foregoing, Wells Fargo Bank, as a Master Servicer, will remain responsible for its duties under the Pooling and Servicing Agreement. Wells Fargo Bank may engage third-party vendors to provide technology or process efficiencies. Wells Fargo Bank monitors its third-party vendors in compliance with its internal procedures and applicable law. Wells Fargo Bank has entered into contracts with third-party vendors for the following functions:
· | provision of Strategy and Strategy CS software; |
· | tracking and reporting of flood zone changes; |
· | abstracting of leasing consent requirements contained in mortgage loan documents; |
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· | legal representation; |
· | assembly of data regarding buyer and seller (borrower) with respect to proposed loan assumptions and preparation of loan assumption package for review by Wells Fargo Bank; |
· | performance of property inspections; |
· | performance of tax parcel searches based on property legal description, monitoring and reporting of delinquent taxes, and collection and payment of taxes; and |
· | Uniform Commercial Code (“UCC”) searches and filings. |
Wells Fargo Bank may also enter into agreements with certain firms to act as a primary servicer and to provide cashiering or non-cashiering sub-servicing on the Mortgage Loans. Wells Fargo Bank monitors and reviews the performance of sub-servicers appointed by it. Generally, all amounts received by Wells Fargo Bank on the Mortgage Loans will initially be deposited into a common clearing account with collections on other mortgage loans serviced by Wells Fargo Bank and will then be allocated and transferred to the appropriate account as described in this free writing prospectus. On the day any amount is to be disbursed by Wells Fargo Bank, that amount is transferred to a common disbursement account prior to disbursement.
In its capacity as a Master Servicer, Wells Fargo Bank will not have primary responsibility for custody services of original documents evidencing the Mortgage Loans. On occasion, Wells Fargo Bank may have custody of certain of such documents as are necessary for enforcement actions involving the Mortgage Loans or otherwise. To the extent Wells Fargo Bank performs custodial functions as a servicer, documents will be maintained in a manner consistent with the Servicing Standard.
A Wells Fargo Bank proprietary website (www.wellsfargo.com/com/comintro) provides investors with access to investor reports for commercial mortgage-backed securitization transactions for which Wells Fargo Bank is master servicer, and also provides borrowers with access to current and historical loan and property information for these transactions.
Wells Fargo & Company files reports with the SEC as required under the Exchange Act. Such reports include information regarding Wells Fargo Bank and may be obtained at the website maintained by the SEC at www.sec.gov.
There are no legal proceedings pending against Wells Fargo Bank, or to which any property of Wells Fargo Bank is subject, that are material to the Certificateholders, nor does Wells Fargo Bank have actual knowledge of any proceedings of this type contemplated by governmental authorities.
The information set forth under this sub-heading regarding Wells Fargo Bank has been provided by Wells Fargo Bank.
National Cooperative Bank, N.A.
National Cooperative Bank, N.A., a national banking association regulated by the Office of the Comptroller of the Currency, will act as master servicer with respect to thirty-five (35) of the Mortgage Loans, representing 8.7% of Cut-off Date Pool Balance (in such capacity, a “Master Servicer”. National Cooperative Bank, N.A. is one of the Mortgage Loan Sellers and one of the Special Servicers. Its servicing offices are located at 2011 Crystal Drive, Suite 800, Arlington, VA 22202. National Cooperative Bank, N.A. has been servicing
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mortgage loans since 1990. As of April 30, 2015, National Cooperative Bank, N.A. was the primary or master servicer of a portfolio of multifamily and commercial mortgage loans in commercial mortgage-backed securities transactions and in agency mortgage-backed security and cash sale transactions in the United States totaling approximately $4.0 billion in aggregate outstanding principal balance. There are currently no outstanding servicing advances made by National Cooperative Bank, N.A. in regards to any Mortgage Loan being transferred by it for inclusion in the Trust Fund.
As of March 31, 2015, National Cooperative Bank, N.A. had total assets of $1,927.5 million (unaudited), a capital base in excess of regulatory requirements with a Tier 1 Capital to Total Assets ratio of 12.22%. For the quarter ended March 31, 2015, National Cooperative Bank, N.A. reported net income of $3.5 million (unaudited) for an annualized return on average assets of 0.74%. As of December 31, 2014, National Cooperative Bank, N.A. had total assets of $1,846.9 million, a capital base in excess of regulatory requirements with a Tier 1 Capital to Total Assets ratio of 12.40%. For the year ended December 31, 2014, National Cooperative Bank, N.A. reported net income of $17.3 million.
National Cooperative Bank, N.A. is rated by Fitch and S&P as master, primary and special commercial mortgage servicers. Current ratings are shown below:
Servicer Rating Type | Fitch | S&P |
Master Servicer | CMS2- | Average |
Primary Servicer | CPS1- | Above Average |
Special Servicer | CSS3+ | Average |
National Cooperative Bank, N.A. is also a Fannie Mae-approved multifamily loan servicer.
National Cooperative Bank, N.A.’s total portfolio of serviced commercial and multifamily mortgage loans by approximate number of loans and approximate unpaid principal balance is shown below:
Year-End | 2012(1) | 2013(1) | 2014(1) | 2015(2) |
By Approximate Number: | 4,327 | 4,040 | 3,945 | 3,908 |
By Approximate Aggregate Unpaid Principal Balance (in billions): | $5.9 billion | $5.8 billion | $5.7 billion | $5.7 billion |
(1) | As of the last day of the calendar year indicated. |
(2) | As of April 30, 2015. |
Within National Cooperative Bank, N.A.’s total portfolio of serviced commercial and multifamily mortgage loans, as of April 30, 2015, are approximately 1,472 commercial and multifamily mortgage loans with an unpaid principal balance of approximately $4.0 billion related to commercial mortgage-backed securities transactions (including agency mortgage-backed security and cash sale transactions). In addition to servicing loans related to commercial mortgage-backed securities transactions, National Cooperative Bank, N.A. also services whole loans for itself and a variety of investors. The properties securing loans in National Cooperative Bank, N.A.’s servicing portfolio, as of April 30, 2015, were located in 35 states and the District of Columbia and include retail, office, multifamily, industrial, hospitality and other types of income-producing properties.
National Cooperative Bank, N.A. has detailed operating policies and procedures for the performance of its master servicing obligations. National Cooperative Bank, N.A. servicing policies and procedures are updated periodically to keep pace with changes in the
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commercial mortgage-backed securities industry generally and have been generally consistent for the last three years in all material respects. The only significant changes in National Cooperative Bank, N.A.’s policies and procedures have come in response to changes in federal or state law or investor requirements, such as updates issued by Fannie Mae.
National Cooperative Bank, N.A. utilizes a multi-application mortgage-servicing technology platform, with multiple capabilities and reporting functions, to facilitate the processing of mortgage servicing activities. Among other functions, this platform performs account maintenance, tracks borrower communications, tracks escrow deposits, balances and withdrawals, tracks loan prepayments and payoffs, updates transaction data and generates various account reports. National Cooperative Bank, N.A.’s primary servicing system runs on McCracken Financial Solutions Corp. Strategy CS software. National Cooperative Bank, N.A. reports to trustees and certificate administrators in the CREFC® format. National Cooperative Bank, N.A. has a formal, documented disaster recovery and business continuity plan, including the use of off-site backup facilities, which is managed by its on-site staff.
The table below sets forth information regarding principal and interest advances and servicing advances made by National Cooperative Bank, N.A., as master servicer, on commercial and multifamily mortgage loans included in commercial mortgage-backed securitizations. The information set forth is the amount of such advances as of the last day of the period indicated (expressed as a dollar amount and as a percentage of National Cooperative Bank, N.A.’s portfolio, as of the end of each such period, of master serviced commercial and multifamily mortgage loans included in commercial mortgage-backed securitizations).
Period | Approximate | Approximate | Approximate |
Calendar Year 2012 | $1,994,945,814 | $6,060,444 | 0.30% |
Calendar Year 2013 | $1,717,374,349 | $7,688,745 | 0.45% |
Calendar Year 2014 | $1,650,576,224 | $7,200,000 | 0.44% |
Calendar Year 2015(1) | $1,539,766,000 | $4,158,080 | 0.27% |
(1) | As of April 30, 2015. |
* | “UPB” means unpaid principal balance, “P&I” means principal and interest advances and “PPA” means property protection advances. |
National Cooperative Bank, N.A. may perform any of its obligations under the Pooling and Servicing Agreement through one or more third-party vendors, affiliates or subsidiaries. Notwithstanding the foregoing, National Cooperative Bank, N.A., as a Master Servicer, will remain responsible for its duties under the Pooling and Servicing Agreement. National Cooperative Bank, N.A. may engage third-party vendors to provide technology or process efficiencies. National Cooperative Bank, N.A. monitors its third-party vendors in compliance with its internal vendor management procedures and applicable law. National Cooperative Bank, N.A. has entered into contracts with third party vendors for the following functions:
· | provision of loan servicing software – McCracken/Strategy CS; |
· | tracking and reporting of flood zone changes; |
· | legal representation; |
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· | performance of ongoing property inspections; |
· | performance of tax parcel searches based on property legal description, monitoring and reporting of delinquent taxes, and collection and payment of taxes; and |
· | Uniform Commercial Code searches and filings. |
Generally, all amounts received by National Cooperative Bank, N.A. on the mortgage loans will initially be deposited into a common clearing account with collections on other mortgage loans serviced by National Cooperative Bank, N.A. Funds are then transferred to segregated investor specific accounts pursuant to the servicing agreements.
Via a password-protected website, for commercial mortgage-backed securitization transactions for which National Cooperative Bank, N.A. is master servicer, National Cooperative Bank, N.A. provides its commercial mortgage-backed securities investors with access to data and reports.
There are no legal proceedings pending against National Cooperative Bank, N.A., or to which any property of National Cooperative Bank, N.A. is subject, that are material to the Certificateholders, nor does National Cooperative Bank, N.A. have actual knowledge of any such proceedings that are contemplated by governmental authorities.
No securitization transaction in which National Cooperative Bank, N.A. was acting as master servicer has experienced a servicer event of default under any applicable servicing agreement as a result of any action or inaction of National Cooperative Bank, N.A. as master servicer, including as a result of a failure by National Cooperative Bank, N.A. to comply with the applicable servicing criteria in connection with any securitization transaction. National Cooperative Bank, N.A. has not been terminated as master servicer in any securitization due to a servicing default. National Cooperative Bank, N.A. has made all advances required to be made by it under the servicing agreements related to the securitization transactions in which National Cooperative Bank, N.A. is acting as master servicer. No assessment of compliance with the servicing criteria set forth in Item 1122 of Regulation AB applicable to National Cooperative Bank, N.A. has disclosed any material noncompliance by National Cooperative Bank, N.A. with such applicable servicing criteria in connection with any securitization in which National Cooperative Bank, N.A. was acting as master servicer.
National Cooperative Bank, N.A., as a Master Servicer, will be required to pay all expenses incurred by it in connection with its responsibilities under the Pooling and Servicing Agreement (subject to reimbursement as described in this free writing prospectus), including all fees of any sub-servicers retained by it.
In its capacity as Master Servicer, National Cooperative Bank, N.A. will not have primary responsibility for custody services of original documents evidencing the Mortgage Loans. On occasion, National Cooperative Bank, N.A. may have custody of certain of such documents as are necessary for enforcement actions involving the Mortgage Loans or otherwise. To the extent National Cooperative Bank, N.A. performs custodial functions as a servicer, documents will be maintained in a manner consistent with the Servicing Standard.
National Cooperative Bank, N.A. converted to a national bank charter from a federal thrift charter effective as of December 31, 2014. As a result of the conversion, its name changed from NCB, FSB to National Cooperative Bank, N.A. The conversion permits the bank to increase its commercial lending but does not otherwise impact its commercial real estate lending business or its servicing or deposit platforms. Similarly, the bank’s Board of
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Directors and senior management have not changed as a result of the conversion, and the Office of the Comptroller of the Currency continues to be the primary federal regulator of the bank.
The information provided in this free writing prospectus concerning National Cooperative Bank, N.A. has been provided by it.
The Special Servicers
Midland Loan Services, a Division of PNC Bank, National Association
Midland Loan Services, a Division of PNC Bank, National Association (“Midland”), will initially be appointed to act as special servicer (a “Special Servicer”) with respect to ninety-eight (98) of the mortgage loans, representing 91.3% of the Cut-off Date Pool Balance and in this capacity will initially be responsible for the servicing and administration of such underlying mortgage loans that become Specially Serviced Mortgage Loans and any associated REO Properties (other than any REO Property with respect to any Non-Serviced Pari Passu Mortgage Loan) pursuant to the Pooling and Servicing Agreement and with respect to non-Specially Serviced Mortgage Loans, reviewing and evaluating certain borrower requests and the applicable Master Servicer’s written analysis. Midland’s principal servicing office is located at 10851 Mastin Street, Building 82, Suite 300, Overland Park, Kansas 66210.
Midland is a real estate financial services company that provides loan servicing, asset management and technology solutions for large pools of commercial and multifamily real estate assets. Midland is approved as a master servicer, special servicer and primary servicer for investment-grade commercial and multifamily mortgage-backed securities (“CMBS”) by S&P, Moody’s, Fitch and Morningstar. Midland has received the highest rankings as a master, primary and special servicer of real estate assets under U.S. CMBS transactions from S&P, Fitch and Morningstar. For each category, S&P ranks Midland as “Strong”, Fitch ranks Midland as “1”, and Morningstar ranks Midland as “CS1”. Midland is also a HUD/FHA-approved mortgagee and a Fannie Mae-approved multifamily loan servicer.
Midland has detailed operating procedures across the various servicing functions to maintain compliance with its servicing obligations and the servicing standards under Midland’s servicing agreements, including procedures for managing delinquent and specially serviced loans. The policies and procedures are reviewed annually and centrally managed. Furthermore Midland’s disaster recovery plan is reviewed annually.
Midland will not have primary responsibility for custody services of original documents evidencing the underlying mortgage loans. Midland may from time to time have custody of certain of such documents as necessary for enforcement actions involving particular mortgage loans or otherwise. To the extent that Midland has custody of any such documents for any such servicing purposes, such documents will be maintained in a manner consistent with the Servicing Standard.
No securitization transaction involving commercial or multifamily mortgage loans in which Midland was acting as master servicer, primary servicer or special servicer has experienced a servicer event of default as a result of any action or inaction of Midland as master servicer, primary servicer or special servicer, as applicable, including as a result of Midland’s failure to comply with the applicable servicing criteria in connection with any securitization transaction. Midland has made all advances required to be made by it under the servicing agreements on the commercial and multifamily mortgage loans serviced by Midland in securitization transactions.
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From time to time, Midland is a party to lawsuits and other legal proceedings as part of its duties as a loan servicer (e.g., enforcement of loan obligations) and/or arising in the ordinary course of business. Midland does not believe that any such lawsuits or legal proceedings would, individually or in the aggregate, have a material adverse effect on its business or its ability to service loans pursuant to the Pooling and Servicing Agreement.
Midland currently maintains an Internet-based investor reporting system, CMBS Investor Insight®, that contains performance information at the portfolio, loan and property levels on the various commercial mortgage-backed securities transactions that it services. Certificateholders, prospective transferees of the certificates and other appropriate parties may obtain access to CMBS Investor Insight through Midland’s website at www.pnc.com/midland. Midland may require registration and execution of an access agreement in connection with providing access to CMBS Investor Insight.
As of March 31, 2015, Midland was servicing approximately 29,779 commercial and multifamily mortgage loans with a principal balance of approximately $325 billion. The collateral for such loans is located in all 50 states, the District of Columbia, Puerto Rico, Guam and Canada. Approximately 11,890 of such loans, with a total principal balance of approximately $159 billion, pertain to commercial and multifamily mortgage-backed securities. The related loan pools include multifamily, office, retail, hospitality and other income producing properties. As of March 31, 2015, Midland was named the special servicer in approximately 170 commercial mortgage-backed securities transactions with an aggregate outstanding principal balance of approximately $93 billion. With respect to such transactions as of such date, Midland was administering approximately 106 assets with an outstanding principal balance of approximately $754 million.
Midland has been servicing mortgage loans in CMBS transactions since 1992. The table below contains information on the size of the portfolio of commercial and multifamily mortgage loans in CMBS and other servicing transactions for which Midland has acted as master and/or primary servicer from 2012 to 2014.
Calendar Year End | |||
Portfolio Size – Master/Primary | 2012 | 2013 | 2014 |
CMBS | $115 | $141 | $157 |
Other | $167 | $167 | $179 |
Total | $282 | $308 | $336 |
Midland has acted as a special servicer for commercial and multifamily mortgage loans in CMBS transactions since 1992. The table below contains information on the size of the portfolio of specially serviced commercial and multifamily mortgage loans and REO properties that have been referred to Midland as special servicer in CMBS transactions from 2012 to 2014.
Calendar Year End | |||
Portfolio Size – CMBS Special Servicing | 2012 | 2013 | 2014 |
Total | $82 | $70 | $85 |
Midland may enter into one or more arrangements with the Subordinate Class Representative, a Majority Subordinate Certificateholder, other Certificateholders (or an affiliate or a third-party representative of one or more of the preceding) or any other person
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with the right to appoint or remove and replace Midland as a Special Servicer to provide for a discount and/or revenue sharing with respect to certain of the special servicer compensation in consideration of, among other things, Midland’s appointment (or continuance) as a Special Servicer under the Pooling and Servicing Agreement, any related co-lender agreement and limitations on the right of such person to replace the Special Servicer. See “Risk Factors—Various Other Securitization-Level Conflicts of Interest May Have an Adverse Effect on Your Offered Certificates” in this free writing prospectus.
Pursuant to an interim servicing agreement between an affiliate of WDCPF I WF, on the one hand, and Midland, on the other hand, Midland acts as interim servicer with respect to certain mortgage loans, including, prior to their inclusion in the Trust Fund, certain of the WDCPF I WF Mortgage Loans.
DoubleLine Capital L.P., or one of its affiliates, which is expected to serve as the initial Subordinate Class Representative and Majority Subordinate Certificateholder, engaged Midland as an independent contractor to conduct due diligence with respect to the Mortgage Loans.
Midland is also the special servicer under the WFCM 2015-C28 Pooling and Servicing Agreement, which governs the servicing of the Brickyard Square Loan Combination.
The information regarding Midland set forth under this sub-heading “—Midland Loan Services, a Division of PNC Bank, National Association” has been provided by Midland.
National Cooperative Bank, N.A.
National Cooperative Bank, N.A., a national banking association regulated by the Office of the Comptroller of the Currency, with respect to thirty-five (35) of the Mortgage Loans, representing 8.7% of the Cut-off Date Pool Balance, initially be responsible for the servicing and administration of the Specially Serviced Mortgage Loans and REO Properties and, with respect to the applicable mortgage loans that are non-Specially Serviced Mortgage Loans, reviewing and evaluating certain borrower requests and applicable master servicer’s written analysis and recommendations. National Cooperative Bank, N.A. is one of the Mortgage Loan Sellers and one of the Master Servicers. Its servicing offices are located at 2011 Crystal Drive, Suite 800, Arlington, VA 22202. National Cooperative Bank, N.A. has been servicing mortgage loans since 1990.
As of March 31, 2015, National Cooperative Bank, N.A. had total assets of $1,927.5 million (unaudited), a capital base in excess of regulatory requirements with a Tier 1 Capital to Total Assets ratio of 12.22%. For the quarter ended March 31, 2015, National Cooperative Bank, N.A. reported net income of $3.5 million (unaudited) for an annualized return on average assets of 0.74%. As of December 31, 2014, National Cooperative Bank, N.A. had total assets of $1,846.9 million, a capital base in excess of regulatory requirements with a Tier 1 Capital to Total Assets ratio of 12.40%. For the year ended December 31, 2014, National Cooperative Bank, N.A. reported net income of $17.3 million.
National Cooperative Bank, N.A. is approved as a special servicer by Fitch and S&P and currently has a special servicer rating of “CSS3+” by Fitch and “Average” by S&P. National Cooperative Bank, N.A. is also a Fannie Mae-approved multifamily loan servicer.
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National Cooperative Bank, N.A.’s total portfolio of serviced commercial and multifamily mortgage loans by approximate number of loans and approximate unpaid principal balance is shown below:
Year-End | 2012(1) | 2013(1) | 2014(1) | 2015(2) |
By Approximate Number: | 4,327 | 4,040 | 3,945 | 3,908 |
By Approximate Aggregate Unpaid Principal Balance (in billions): | $5.9 billion | $5.8 billion | $5.7 billion | $5.7 billion |
(1) | As of the last day of the calendar year indicated. |
(2) | As of April 30, 2015. |
Within National Cooperative Bank, N.A.’s total portfolio of serviced commercial and multifamily mortgage loans, as of April 30, 2015, are approximately 1,472 commercial and multifamily mortgage loans with an unpaid principal balance of approximately $4.0 billion related to commercial mortgage-backed securities (including agency mortgage-backed security and cash sale transactions). In addition to servicing loans related to commercial mortgage-backed securities transactions, National Cooperative Bank, N.A. also services whole loans for itself and a variety of investors. The properties securing loans in National Cooperative Bank, N.A.’s servicing portfolio, as of April 30, 2015, were located in 35 states and the District of Columbia and include retail, office, multifamily, industrial, hospitality and other types of income-producing properties.
National Cooperative Bank, N.A. has been acting as a special servicer of mortgage loans in CMBS transactions since 2010. National Cooperative Bank, N.A.’s parent, National Consumer Cooperative Bank, has acted as a special servicer of mortgage loans in CMBS transactions since 1998. In 2010, National Consumer Cooperative Bank transferred its CMBS special servicing operations to National Cooperative Bank, N.A. As of April 30, 2015, National Cooperative Bank, N.A. was named the special servicer in approximately 31 commercial mortgage-backed securities transactions with an aggregate outstanding principal balance of approximately $1.4 billion. The table below contains information on the size of the portfolio of specially serviced commercial and multifamily mortgage loans and REO Properties that have been referred to National Cooperative Bank, N.A. as special servicer in CMBS transactions from 2010 to April 30, 2015.
Portfolio Size – | 2012(1) | 2013(1) | 2014(1) | 2015(2) |
Total | $47,478,196 | $41,180,052 | $37,525,431 | $59,259,400 |
(1) | Size of portfolio for which National Cooperative Bank, N.A. acted as special servicer as of the last day of the calendar year indicated. |
(2) | Size of portfolio for which National Cooperative Bank, N.A. acted as special servicer as of April 30, 2015. |
National Cooperative Bank, N.A. has detailed servicing policies and procedures across the various servicing functions to maintain compliance with its servicing obligations and the servicing standards under National Cooperative Bank, N.A.’s servicing agreements, including procedures for managing delinquent and specially serviced loans and loans subject to the bankruptcy of the borrower. These policies and procedures include, among other things, measures for notifying borrowers of payment delinquencies and other loan defaults and for working with borrowers to facilitate collections and performance. National Cooperative
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Bank, N.A. periodically updates its servicing policies and procedures to keep pace with changes in the commercial mortgage-backed securities industry generally and to comply with changes in federal or state law or investor requirements. These policies and procedures are, among other things, in compliance with the applicable servicing criteria set forth in Item 1122 of Regulation AB.
National Cooperative Bank, N.A.’s servicing personnel are highly skilled professionals that proactively manage specially serviced assets through the workout cycle from initiation of foreclosure, bankruptcy, real estate owned or modification. National Cooperative Bank, N.A. takes a disciplined approach to the management and resolution of specially serviced loans and evaluates all viable resolution strategies to determine the strategy that generates the highest net present value for the holder of such specially serviced loan. Default resolution strategies are determined in accordance with the respective pooling and servicing agreement and the terms of the related mortgage loan documents.
National Cooperative Bank, N.A. has not engaged and does not currently intend to engage any third party servicers to perform on its behalf any of its special servicing duties with respect to the trust mortgage loans for which National Cooperative Bank, N.A. acts as special servicer.
National Cooperative Bank, N.A. has a formal, documented disaster recovery and business continuity plan, including the use of off-site backup facilities, which is managed by its on-site staff.
There are no legal proceedings pending against National Cooperative Bank, N.A., or to which any property of National Cooperative Bank, N.A. is subject, that are material to the Certificateholders, nor does National Cooperative Bank, N.A. have actual knowledge of any such proceedings that are contemplated by governmental authorities.
No securitization transaction in which National Cooperative Bank, N.A. was acting as special servicer has experienced a servicer event of default under any applicable servicing agreement as a result of any action or inaction of National Cooperative Bank, N.A. as special servicer, including as a result of a failure by National Cooperative Bank, N.A. to comply with the applicable servicing criteria in connection with any securitization transaction. National Cooperative Bank, N.A. has not been terminated as special servicer in any securitization due to a servicing default. National Cooperative Bank, N.A. has made all advances required to be made by it under the servicing agreements related to the securitization transactions in which National Cooperative Bank, N.A. is acting as special servicer. No assessment of compliance with the servicing criteria set forth in Item 1122 of Regulation AB applicable to National Cooperative Bank, N.A. has disclosed any material noncompliance by National Cooperative Bank, N.A. with such applicable servicing criteria in connection with any securitization in which National Cooperative Bank, N.A. was acting as special servicer.
National Cooperative Bank, N.A., as a Special Servicer, will be required to pay all expenses incurred in connection with its responsibilities under the Pooling and Servicing Agreement (subject to reimbursement as described in this free writing prospectus), including all fees of any sub-servicers retained by it.
Although National Cooperative Bank, N.A. does not presently intend to enter into any such arrangement, National Cooperative Bank, N.A. may, in the future, enter into one or more arrangements with any party entitled to appoint or remove and replace a special servicer to provide for a discount and/or revenue sharing with respect to certain of the special servicer compensation in consideration of, among other things, National Cooperative Bank, N.A.’s appointment as special servicer under the Pooling and Servicing Agreement
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and limitations on such person’s right to replace National Cooperative Bank, N.A. as a special servicer.
National Cooperative Bank, N.A. converted to a national bank charter from a federal thrift charter effective as of December 31, 2014. As a result of the conversion, its name changed from NCB, FSB to National Cooperative Bank, N.A. The conversion permits the bank to increase its commercial lending but does not otherwise impact its commercial real estate lending business or its servicing or deposit platforms. Similarly, the bank’s Board of Directors and senior management have not changed as a result of the conversion, and the Office of the Comptroller of the Currency continues to be the primary federal regulator of the bank.
The information provided in this free writing prospectus concerning National Cooperative Bank, N.A. has been provided by it.
Affiliated Servicers
Rialto Capital Advisors, LLC, a Delaware limited liability company (“Rialto”), was appointed to act as the WFCM 2015-LC20 Special Servicer and in this capacity will initially be responsible for the servicing and administration of the Bella Luna / San Lucas Loan Combination (if it becomes a specially serviced mortgage loan) and any associated REO Property pursuant to the WFCM 2015-LC20 Pooling and Servicing Agreement. Rialto maintains its principal servicing office at 790 NW 107th Avenue, 4th Floor, Miami, Florida 33172.
Rialto has been engaged in the special servicing of commercial mortgage loans for commercial real estate securitizations since approximately May 2012. Rialto currently has a commercial mortgage-backed securities special servicer rating of “CSS2” by Fitch, a commercial loan special servicer ranking of “Above Average” by S&P and a commercial mortgage special servicer ranking of “MOR CS2” by Morningstar.
Rialto is a wholly-owned subsidiary of Rialto Capital Management, LLC, a Delaware limited liability company (“RCM”). RCM is a vertically integrated commercial real estate investment and asset manager and an indirect wholly-owned subsidiary of Lennar Corporation (“Lennar”) (NYSE: LEN and LEN.B). As of March 31, 2015, RCM was the sponsor of, and certain of its affiliates were investors in, four private equity funds (collectively, the “Funds”) with an aggregate of $2.6 billion of equity under management and RCM also advised one separately managed account with $400 million of committed capital. Two of such funds are focused on distressed and value-add real estate related investments, one of such funds is focused on investments in commercial mortgage-backed securities and the other fund and the separately managed account are focused on mezzanine debt. To date, RCM has acquired and/or is managing approximately $6.9 billion of non- and sub-performing real estate assets, representing over 10,000 loans. Included in this number are approximately $3 billion in structured transactions with the Federal Deposit Insurance Corporation (“FDIC”). RCM was also a sub-advisor and investor in an approximately $4.6 billion Public-Private Investment Fund with the U.S. Department of the Treasury which was liquidated in October of 2012.
In addition, RCM has underwritten and purchased, primarily for the Funds, over $3.3 billion in face value of subordinate, newly-originated commercial mortgage-backed securities bonds in 47 different securitizations totaling approximately $55.0 billion in overall transaction size. RCM has the right to appoint the special servicer for each of these transactions.
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RCM has over 385 employees and is headquartered in Miami with two other main offices located in New York City and Atlanta. In addition, the asset management platform utilizes seven satellite offices located in Las Vegas, Nevada, Phoenix, Arizona, Aliso Viejo, California, Denver, Colorado, Portland, Oregon, Charlotte, North Carolina and Tampa, Florida. It is also supported in local markets by the Lennar infrastructure which provides access to over 6,600 employees across the country’s largest real estate markets.
Rialto has detailed operating policies and procedures which are reviewed at least annually and updated as appropriate. These policies and procedures for the performance of its special servicing obligations are, among other things, in compliance with the applicable servicing criteria set forth in Item 1122 of Regulation AB under the Securities Act. Rialto has developed strategies and procedures for managing delinquent loans, loans subject to bankruptcies of the borrowers and other breaches by borrowers of the underlying mortgage loan documents that are designed to maximize value from the assets for the benefit of certificateholders. These strategies and procedures vary on a case by case basis, and include, but are not limited to, liquidation of the underlying collateral, note sales, discounted payoffs, and borrower negotiation or workout in accordance with the related servicing standard. The strategy pursued by Rialto for any particular property depends upon, among other things, the terms and provisions of the underlying mortgage loan documents, the jurisdiction where the underlying property is located and the condition and type of underlying property. Standardization and automation have been pursued, and continue to be pursued, wherever possible so as to provide for continued accuracy, efficiency, transparency, monitoring and controls.
Rialto is subject to external and internal audits and reviews. Rialto is subject to Lennar’s internal audit reviews, typically on a semi-annual basis, which focus on specific business areas such as finance, reporting, loan asset management and REO management. Rialto is also subject to external audits as part of the external audit of Lennar and stand-alone audits of the FDIC transactions and the Funds. As part of such external audits, auditors perform test work and review internal controls throughout the year. As a result of this process, Rialto has been determined to be Sarbanes-Oxley compliant.
Rialto maintains a web-based asset management system that contains performance information at the portfolio, loan and property levels on the various loan and REO assets that it services. Additionally, Rialto has a formal, documented disaster recovery and business continuity plan which is managed by Lennar’s on-site staff.
As of March 31, 2015, Rialto and its affiliates were actively special servicing approximately 2,400 portfolio loans with a principal balance of approximately $800 million and were responsible for approximately 1,400 portfolio REO assets with a principal balance of approximately $1.5 billion.
Rialto is also currently performing special servicing for 51 commercial real estate securitizations. With respect to such securitization transactions, Rialto is administering over 3,800 assets with a principal balance of approximately $56.8 billion. The asset pools specially serviced by Rialto include residential, multifamily/condo, office, retail, hotel, healthcare, industrial, manufactured housing and other income-producing properties as well as residential and commercial land.
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The table below sets forth information about Rialto’s portfolio of specially serviced commercial and multifamily mortgage loans and REO properties in commercial mortgage-backed securitization transactions as of the dates indicated:
CMBS Pools | As of | As of | As of | As of |
Number of CMBS Pools Named Special Servicer | 16 | 27 | 45 | 49 |
Approximate Aggregate Unpaid Principal Balance(1) | $18.9 billion | $32.4 billion | $49.2 billion | $53.3 billion |
Approximate Number of Specially Serviced Loans or REO Properties(2) | 19 | 27 | 28 | 32 |
Approximate Aggregate Unpaid Principal Balance of Specially Serviced Loans or REO Properties(2) | $21 million | $101 million | $126.9 million | $149 million |
(1) | Includes all commercial and multifamily mortgage loans and related REO properties in Rialto’s portfolio for which Rialto is the named special servicer, regardless of whether such mortgage loans and related REO properties are, as of the specified date, specially serviced by Rialto. |
(2) | Includes only those commercial and multifamily mortgage loans and related REO properties in Rialto’s portfolio for which Rialto is the named special servicer that are, as of the specified date, specially serviced by Rialto. Does not include any resolutions during the specified year. |
In its capacity as the WFCM 2015-LC20 Special Servicer, Rialto will not have primary responsibility for custody services of original documents evidencing the Bella Luna / San Lucas Loan Combination. Rialto may from time to time have custody of certain of such documents as necessary for enforcement actions involving the Bella Luna / San Lucas Loan Combination or otherwise. To the extent that Rialto has custody of any such documents for any such servicing purposes, such documents will be maintained in a manner consistent with the servicing standard under the WFCM 2015-LC20 Pooling and Servicing Agreement.
Rialto does not have any material advancing rights or obligations with respect to the commercial mortgage-backed securities pools as to which it acts as special servicer. In certain instances Rialto may have the right or be obligated to make property related servicing advances in emergency situations with respect to certain commercial mortgage-backed securities pools as to which it acts as special servicer.
There are, to the actual current knowledge of Rialto, no special or unique factors of a material nature involved in special servicing the particular types of assets included in this securitization transaction, as compared to the types of assets specially serviced by Rialto in other commercial mortgage-backed securitization pools generally, for which Rialto has developed processes and procedures which materially differ from the processes and procedures employed by Rialto in connection with its special servicing of commercial mortgage-backed securitization pools generally.
There have not been, during the past three years, any material changes to the policies or procedures of Rialto in the servicing function it will perform under the WFCM 2015-LC20 Pooling and Servicing Agreement for assets of the same type included in the WFCM 2015-LC20 securitization, including the Bella Luna / San Lucas Loan Combination. No securitization transaction in which Rialto was acting as special servicer has experienced a servicer event of default as a result of any action or inaction of Rialto as special servicer, including as a result of a failure by Rialto to comply with the applicable servicing criteria in connection with any securitization transaction. Rialto has not been terminated as special
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servicer in any securitization, either due to a servicing default or the application of a servicing performance test or trigger. Rialto has made all advances required to be made by it under the servicing agreements related to the securitization transactions in which Rialto is acting as special servicer. There has been no previous disclosure of material noncompliance with the applicable servicing criteria by Rialto in connection with any securitization in which Rialto was acting as special servicer. Rialto does not believe that its financial condition will have any adverse effect on the performance of its duties under the WFCM 2015-LC20 Pooling and Servicing Agreement and, accordingly, Rialto believes that its financial condition will not have any material impact on the performance of the Bella Luna / San Lucas Loan Combination or the performance of the Certificates.
From time to time Rialto is a party to lawsuits and other legal proceedings as part of its duties as a loan servicer (e.g., enforcement of loan obligations) and/or arising in the ordinary course of business. Rialto does not believe that any such lawsuits or legal proceedings would, individually or in the aggregate, have a material adverse effect on its business or its ability to service the Bella Luna / San Lucas Loan Combination pursuant to the WFCM 2015-LC20 Pooling and Servicing Agreement.
There are currently no legal proceedings pending, and no legal proceedings known to be contemplated by governmental authorities, against Rialto or of which any of its property is the subject, which are material to Certificateholders. Rialto occasionally engages consultants to perform property inspections and to provide surveillance on a property and its local market; it currently does not have any plans to engage sub-servicers to perform on its behalf any of its duties with respect to this transaction with the exception of some outsourced base servicing functions.
In the commercial mortgage-backed securitizations in which Rialto acts as special servicer, Rialto may enter into one or more arrangements with any party entitled to appoint or remove and replace the special servicer to provide for a discount and/or revenue sharing with respect to certain of the special servicer compensation in consideration of, among other things, Rialto’s appointment as special servicer under the applicable servicing agreement and limitations on such person’s right to replace Rialto as the special servicer.
Rialto is an affiliate of Rialto Mortgage Finance, LLC, a Sponsor, Mortgage Loan Seller and Originator. Rialto and Rialto Mortgage Finance, LLC are also affiliates of the entity that is the initial majority subordinate certificateholder under the WFCM 2015-LC20 Pooling and Servicing Agreement, and which was appointed as the initial subordinate class representative under the WFCM 2015-LC20 Pooling and Servicing Agreement.
The information set forth under this sub-heading “—The Special Servicers—Rialto Capital Advisors, LLC” regarding Rialto has been provided by Rialto.
The Trust Advisor
Trimont Real Estate Advisors, Inc. (“Trimont”) will act as trust advisor under the Pooling and Servicing Agreement (in such capacity, the “Trust Advisor”).
The principal office of Trimont is located at 3424 Peachtree Road NE, Suite 2200, Atlanta, Georgia 30326 and its telephone number is (404) 420-5600. Trimont also has offices located in Irvine, California, New York, New York, Hoevelaken, The Netherlands, and London, England.
Trimont provides services to real estate lenders and investors on both debt and equity investments. Its core services include asset management, loan servicing, asset servicing,
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due diligence, underwriting services and portfolio risk analysis. Trimont is rated by S&P as Commercial Mortgage Special Servicer (Strong) and Construction Loan Servicer (Strong), by Fitch as a Primary Servicer (CPS2+) and Special Servicer (CSS2) and by Kroll Bond Rating Agency, Inc. as Primary Servicer (Pass) and Special Servicer (Pass).
Trimont has been named operating advisor or trust advisor on over 35 commercial mortgage-backed securities transactions with an aggregate original principal loan balance of approximately $40 billion (not including the subject transaction). The collateral for the loans has included multifamily, office, retail, hospitality and other income-producing properties.
Trimont has operating procedures across the various servicing functions to maintain compliance with its servicing obligations and servicing standards under Trimont’s servicing agreements, including procedures for managing delinquent and specially serviced loans. There have been no material changes to Trimont’s policies or procedures in the past three years that would have a material effect on the current transaction. The policies and procedures are reviewed annually and centrally managed. Furthermore, Trimont’s disaster recovery plan is reviewed annually.
Trimont was special servicing approximately 350 loans and REO properties (securitized and non-securitized) with an aggregate outstanding principal balance of approximately $600 million as of December 31, 2014. Trimont has been named special servicer on 40 commercial mortgage-backed securities transactions with an aggregate original principal loan balance of approximately $36 billion. The collateral for the loans has included multifamily, office, retail, hospitality and other income-producing properties. Trimont was first named as a special servicer in a commercial mortgage-backed securities transaction in 1998.
No commercial mortgage-backed securities transaction involving commercial or multifamily mortgage loans in which Trimont was acting as primary servicer or special servicer has experienced a servicer event of default as a result of any action or inaction of Trimont as primary servicer or special servicer, including as a result of Trimont’s failure to comply with the applicable servicing criteria in connection with any commercial mortgage-backed securities transaction.
From time to time, Trimont is a party to lawsuits and other legal proceedings as part of its duties as a loan servicer (e.g., enforcement of loan obligations) and/or arising in the ordinary course of business. Trimont does not believe that any such lawsuits or legal proceedings, individually or in the aggregate, would be material to Certificateholders.
Trimont is not an affiliate of the Depositor, the underwriters, the Issuing Entity, the Master Servicers, the Special Servicers, the Trustee, the Certificate Administrator, or the Sponsors.
The information set forth in this subheading “—The Trust Advisor” concerning the Trust Advisor and its affiliates has been provided by Trimont.
Affiliations and Certain Relationships Among Certain Transaction Parties
In this section, we describe affiliations and relationships between a legal entity that is a party to this securitization transaction, on the one hand, and any separate legal entity that is a material party to this securitization transaction, on the other. Each of the entities described below may have conflicts of interest that arise from circumstances other than its affiliation with another party to the securitization. In this section, we do not describe all the
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conflicts of interest that a party to the securitization may have. For additional information regarding conflicts of interest, see the “Risk Factors” section of this free writing prospectus.
Wells Fargo Bank, a Sponsor, Originator and Mortgage Loan Seller, is also a Master Servicer, the Certificate Administrator, the tax administrator, the custodian, the certificate registrar and the swap counterparty under this securitization and an affiliate of Wells Fargo Commercial Mortgage Securities, Inc., the Depositor, and of Wells Fargo Securities, LLC, one of the underwriters. In addition, Wells Fargo Bank is the master servicer, the certificate administrator, the custodian, the tax administrator and the certificate registrar under each of the WFCM 2015-C28 Pooling and Servicing Agreement and the WFCM 2015-LC20 Pooling and Servicing Agreement which govern the servicing of the Brickyard Square Loan Combination and the Bella Luna / San Lucas Loan Combination, respectively.
In addition, Wells Fargo Bank is the purchaser under repurchase agreements with each of Rialto Mortgage and WDCPF I WF, respectively, or, in any such case, with a wholly-owned subsidiary or other affiliate of the subject Mortgage Loan Seller, for the purpose of providing short-term warehousing of mortgage loans originated or acquired by Rialto Mortgage, WDCPF I WF and their respective affiliates, as applicable.
In the case of the repurchase facility provided to Rialto Mortgage, Wells Fargo Bank has agreed to purchase mortgage loans from Rialto Mortgage on a revolving basis. The dollar amount of the Rialto Mortgage Loans expected to be subject to that repurchase facility is projected to equal, as of the Cut-off Date, approximately $236,805,755. Proceeds received by Rialto Mortgage in connection with this securitization transaction will be used, in part, to repurchase from Wells Fargo Bank the Rialto Mortgage Loans subject to that repurchase facility, which Mortgage Loans will be transferred to the Depositor free and clear of any liens.
In the case of the repurchase facility provided to WDCPF I WF, Wells Fargo Bank has agreed to purchase mortgage loans from WDCPF I WF on a revolving basis. The principal balance of the Mortgage Loans subject to the repurchase facility that will be sold by WDCPF I WF to the Depositor in connection with this securitization transaction is projected to equal, as of the Cut-off Date, approximately $113,270,708. Proceeds received by WDCPF I WF in connection with this securitization transaction will be used, in part, to repurchase from Wells Fargo Bank each of the Mortgage Loans subject to that repurchase facility that are to be sold by WDCPF I WF to the Depositor in connection with this securitization transaction, which Mortgage Loans will be transferred to the Depositor free and clear of any liens.
In addition, Wells Fargo Bank and Deutsche Bank AG, Cayman Islands Branch (an affiliate of Deutsche Bank Securities Inc., an underwriter) are purchasers under separate repurchase agreements with Silverpeak Real Estate Finance LLC or with a wholly-owned subsidiary or other affiliate of Silverpeak Real Estate Finance LLC for the purpose of providing short-term warehousing of mortgage loans originated or acquired by Silverpeak Real Estate Finance LLC and its affiliates. Pursuant to these repurchase facilities, Wells Fargo Bank and Deutsche Bank AG, Cayman Islands Branch have agreed to purchase mortgage loans from Silverpeak on a revolving basis. In connection with the repurchase facility with Wells Fargo Bank, the dollar amount of the Mortgage Loans subject to such repurchase facility that will be sold by Silverpeak to the Depositor in connection with this securitization transaction is projected to equal, as of the Cut-off Date, approximately $65,102,050. In connection with the repurchase facility with Deutsche Bank AG, Cayman Islands Branch, the dollar amount of the Mortgage Loans subject to such repurchase facility that will be sold by Silverpeak to the Depositor in connection with this securitization transaction is projected to equal, as of the Cut-off Date, approximately $25,500,000. Proceeds received by Silverpeak in connection with this securitization transaction will be
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used, in part, to repurchase from Wells Fargo Bank and Deutsche Bank AG, Cayman Islands Branch each of the Mortgage Loans subject to such repurchase facilities that are to be sold by Silverpeak to the depositor in connection with this securitization transaction, which Mortgage Loans will be transferred to the depositor free and clear of any liens.
Additionally, each of National Cooperative Bank, N.A. and WDCPF I WF, respectively, or, in any such case, the respective wholly-owned subsidiary or other affiliate of the subject Mortgage Loan Seller, is party to an interest rate hedging arrangement with Wells Fargo Bank with respect to all of the Mortgage Loans that WDCPF I WF will transfer to the depositor and with respect to certain of the Mortgage Loans that National Cooperative Bank, N.A., will transfer to the depositor. In each instance those hedging arrangements will terminate in connection with the contribution of those Mortgage Loans to this securitization transaction.
As a result of the matters discussed above, this securitization transaction will substantially reduce the economic exposure of Wells Fargo Bank and Deutsche Bank Securities Inc. to the Mortgage Loans that are to be transferred by Rialto Mortgage, Silverpeak, WDCPF I WF and National Cooperative Bank, N.A. Finance LLC, respectively, to the Depositor.
Wells Fargo Bank is the interim custodian of the loan files for all of the Rialto Mortgage Loans and WDCPF I WF Mortgage Loans.
While Wells Fargo Bank may have undertaken some evaluation of the Mortgage Loans originated or acquired by such Mortgage Loan Sellers, any such review was undertaken by it solely for the purpose of determining whether such Mortgage Loans were eligible for financing under the terms of the related warehouse financing and was unrelated to this offering. In addition, we cannot assure you that such review was undertaken and, if undertaken, any such review was limited in scope to that specific purpose. The related Mortgage Loan Sellers are solely responsible for the underwriting of their Mortgage Loans as well as the Mortgage Loan representations and warranties related thereto.
Pursuant to certain interim servicing agreements between Wells Fargo Bank and Rialto Mortgage, each a Sponsor, Originator and Mortgage Loan Seller, or certain affiliates of Rialto Mortgage, Wells Fargo Bank acts (from time to time) as primary servicer with respect to certain mortgage loans owned by Rialto Mortgage or such affiliates (subject, in some cases, to the repurchase facility described above), including, prior to their inclusion in the Trust Fund, some or all of the Rialto Mortgage Loans.
Pursuant to certain interim servicing agreements between Wells Fargo Bank and Silverpeak, each a Sponsor, Originator and Mortgage Loan Seller, or certain affiliates of Silverpeak, Wells Fargo Bank acts (from time to time) as primary servicer with respect to certain mortgage loans owned by Silverpeak or such affiliates of Silverpeak (subject, in some cases, to the repurchase facilities described above), including, prior to their inclusion in the Trust Fund, some or all of the Mortgage Loans to be transferred by Silverpeak to the Depositor.
Wells Fargo Bank, a Master Servicer, is expected to enter into a sub-servicing agreement with an affiliate of WDCPF I WF pursuant to which such affiliate will be required to perform certain limited subservicing duties with respect to the WDCPF I WF Mortgage Loans.
National Cooperative Bank, N.A., a Sponsor, is one of the Mortgage Loan Sellers, one of the Master Servicers and one of the Special Servicers. In addition, Wells Fargo Bank,
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National Association is the purchaser under a repurchase agreement with a wholly-owned subsidiary of National Cooperative Bank, N.A., for the purpose of providing short-term warehousing of mortgage loans originated or acquired by National Cooperative Bank, N.A. None of the Mortgage Loans that National Cooperative Bank, N.A. will transfer to the Depositor are subject to such repurchase agreement. National Cooperative Bank, N.A. is party to an interest rate hedging arrangement with Wells Fargo Bank, National Association with respect to twenty (20) of the National Cooperative Bank, N.A. Mortgage Loans, which have an aggregate Cut-off Date Principal Balance of $59,903,355, representing approximately 5.1% of the Cut-off Date Pool Balance and such hedging arrangements will terminate with respect to such Mortgage Loans that National Cooperative Bank, N.A. will transfer to the Depositor in connection with the transfer of those Mortgage Loans pursuant to this securitization transaction.
In the case of certain Mortgage Loans, a mezzanine loan secured by equity interests in the related borrower may be held by the related Mortgage Loan Seller or one of its affiliates.
Rialto Mortgage Finance, LLC, a Sponsor, Mortgage Loan Seller and Originator, and Rialto Capital Advisors, LLC, the special servicer under the WFCM 2015-LC20 Pooling and Servicing Agreement, which governs the servicing of the Bella Luna / San Lucas Loan Combination, are affiliated with each other. Rialto Mortgage Finance, LLC and Rialto Capital Advisors, LLC are also affiliates of the entity that is the initial majority subordinate certificateholder under the WFCM 2015-LC20 Pooling and Servicing Agreement, and which was appointed as the initial subordinate class representative under the WFCM 2015-LC20 Pooling and Servicing Agreement.
DoubleLine Capital LP, or an affiliate, which is expected to be the initial Majority Subordinate Certificateholder, in connection with its expected purchase of the Class E, F and G Certificates on the Closing Date, engaged Midland as an independent contractor to conduct due diligence with respect to the Mortgage Loans.
Pursuant to an interim servicing agreement between an affiliate of WDCPF I WF, on the one hand, and Midland, on the other hand, Midland acts as interim servicer with respect to certain mortgage loans, including, prior to their inclusion in the Trust Fund, certain of the WDCPF I WF Mortgage Loans.
Midland, a Special Servicer, is also the special servicer under the WFCM 2015-C28 Pooling and Servicing Agreement, which governs the servicing of the Brickyard Square Loan Combination.
Wilmington Trust, National Association, the Trustee, is also the trustee under the WFCM 2015-C28 pooling and servicing agreement and the WFCM 2015-LC20 pooling and servicing agreement which govern the servicing of the Brickyard Square Loan Combination and the Bella Luna / San Lucas Loan Combination, respectively.
Trimont Real Estate Advisors, Inc., the Trust Advisor, is also the trust advisor under the WFCM 2015-LC20 pooling and servicing agreement, which governs the servicing of the Bella Luna / San Lucas Loan Combination.
See “Transaction Parties—The Sponsors, Mortgage Loan Sellers and Originators” and “—The Master Servicers” and “—The Special Servicers” in this free writing prospectus and “The Depositor” and “The Sponsor” in the accompanying prospectus.
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DESCRIPTION OF THE OFFERED CERTIFICATES
General
The Certificates will be issued on the Closing Date pursuant to the Pooling and Servicing Agreement and will consist of 20 classes (each, a “Class”). Some of the provisions of the Offered Certificates and the Pooling and Servicing Agreement are described in this “Description of the Offered Certificates” section of this free writing prospectus. For additional detailed information regarding the terms of the Pooling and Servicing Agreement and the Offered Certificates, you should refer to the section in this free writing prospectus titled “Servicing of the Mortgage Loans and Administration of the Trust Fund” and to the sections in the accompanying prospectus titled “Description of the Certificates” and “Description of the Pooling and Servicing Agreements”.
The Certificates collectively will represent the entire beneficial ownership interest in a Trust Fund consisting primarily of:
· | the Mortgage Loans; |
· | any and all payments under and proceeds of the Mortgage Loans received after the Cut-off Date, in each case exclusive of payments of principal, interest and other amounts due on or before that date; |
· | the Mortgage Loan documents for the Mortgage Loans (insofar as they are required to be delivered to the Custodian on behalf of the Trustee); |
· | certain rights with respect to the Mortgage Loans granted to us under the Mortgage Loan Purchase Agreements; |
· | any Mortgaged Property that is acquired for the benefit of the registered holder of a Certificate (a “Certificateholder”) through foreclosure, deed-in-lieu of foreclosure or otherwise following a default on the corresponding Mortgage Loan (upon acquisition, each, an “REO Property”, which such REO Property includes with respect to any Non-Serviced Loan Combination, any interest in the related “REO Property” acquired with respect to such Non-Serviced Loan Combination pursuant to the applicable pooling and servicing agreement by or on behalf of the Trust Fund with respect to such Non-Serviced Loan Combination; and |
· | those funds or assets as from time to time are deposited in each Collection Account described under “Servicing of the Mortgage Loans and Administration of the Trust Fund—Collection Accounts” in this free writing prospectus, the REO Account as described under “Servicing of the Mortgage Loans and Administration of the Trust Fund—REO Account”, the Distribution Account described under “—Distribution Account” below or the Interest Reserve Account described under “—Interest Reserve Account” below. |
The Certificates will consist of the Class A-1, A-2, A-3, A-4, A-4FL, A-4FX, A-SB, X-A, X-B, A-S, B, C, PEX, D, E, F, G, V-1, V-2 and R Certificates (collectively, the “Certificates”):
· | the Class A-1, A-2, A-3, A-4, A-SB, A-S, X-A, X-B, B, C, PEX and D Certificates, which are the Classes of Certificates that are offered by this free writing prospectus (collectively, the “Offered Certificates”); and |
· | the Class A-4FL, A-4FX, E, F, G, V-1, V-2 and R Certificates, which are the Classes of Certificates that— |
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1. will be retained or privately placed by us, and
2. are not offered by this free writing prospectus.
· | On the Closing Date, the Trust will also issue uncertificated regular interests in REMIC III referred to in this free writing prospectus as the “Class A-4FX Regular Interest”, the “Class A-S Regular Interest”, the “Class B Regular Interest” and the “Class C Regular Interest”, and collectively, the “Regular Interests”. The Regular Interests are not offered by this free writing prospectus. |
None of the Class A-4FL, A-4FX, E, F, G, V-1, V-2 or R Certificates or the Class A-4FX, A-S, B or C Regular Interests are being offered by this free writing prospectus and any information presented in this free writing prospectus with respect to such Certificates or Regular Interest is provided solely to enhance a prospective purchaser’s understanding of the Offered Certificates.
Certificate Principal Balances and Certificate Notional Amounts
The Class A-1, A-2, A-3, A-4, A-4FL, A-4FX, A-SB, A-S, B, C, PEX, D, E, F and G Certificates are the only Certificates that will have principal balances and are sometimes referred to as the principal balance certificates (collectively, the “Principal Balance Certificates”). The aggregate principal balance of each Class of Principal Balance Certificates will represent the total distributions of principal to which the holders of that Class are entitled over time out of payments and other collections on the assets of the Trust Fund. Accordingly, on each distribution date, the principal balance of each of these Classes will be reduced by any principal distributions actually made with respect to that Certificate on that distribution date. See “—Distributions” below. On any particular distribution date, the principal balance of each of these Classes of Certificates may also be permanently reduced, without any corresponding distribution, in connection with losses on the Mortgage Loans and default-related and otherwise unanticipated Trust Fund expenses. Notwithstanding the provisions described above, the principal balance of a Class of Principal Balance Certificates (and therefore the notional amount of the Class X-A or X-B Certificates, as applicable) may be reinstated under limited circumstances in connection with a recovery of amounts that had previously been determined to constitute nonrecoverable advances. See “—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses” below.
The Class A-S, B and C Certificates may be exchanged for Class PEX Certificates, and Class PEX Certificates may be exchanged for Class A-S, B and C Certificates, in each case only in the manner described under “—Exchanges of Exchangeable Certificates” in this free writing prospectus. The Class A-S, B, C and PEX Certificates are sometimes collectively referred to herein as the “Exchangeable Certificates”.
The Class A-S, B and C Regular Interests will have principal balances equal to the initial principal balances of the Class A-S, B and C Certificates, respectively. The Class A-S, B, C and PEX Certificates will, at all times, represent undivided beneficial ownership interests in a grantor trust that will hold such Regular Interests. Each of the Class A-S, B and C Certificates will, at all times, represent a beneficial interest in a percentage of the outstanding principal balance of the Class A-S, B and C Regular Interests, respectively. The Class PEX Certificates will, at all times, represent a beneficial interest in the remaining percentages of the outstanding principal balances of the Class A-S, B and C Regular Interests. We sometimes refer to the Class PEX Certificates’ beneficial interests in the Class A-S, B and C Regular Interests as the “Class A-S component”, “Class B component” and “Class C component” of the Class PEX Certificates.
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Following any exchange of Class A-S, B and C Certificates for Class PEX Certificates or any exchange of Class PEX Certificates for Class A-S, B and C Certificates as described herein, the percentage interest of the outstanding principal balances of the Class A-S, B and C Regular Interests that is represented by the Class A-S, B and C Certificates, on the one hand, and the Class PEX Certificates, on the other hand, will be increased or decreased accordingly. The initial aggregate certificate principal balance of the Class A-S, B and C Certificates on the cover page represents the principal balance of such classes without giving effect to any exchange. The principal balance of the Class PEX Certificates on the cover page is equal to the aggregate of the principal balances of the Class A-S, B and C Certificates and represents the maximum principal balance of the Class PEX Certificates that could be issued in an exchange. The principal balance of each of the Class A-S, B and C Regular Interests will equal the aggregate of the applicable percentage interests of the Class A-S, B and C Certificates, respectively, and each of the related components of the Class PEX Certificates. The principal balances of the Class A-S, B and C Certificates to be issued on the Closing Date will be reduced, in required proportions, by an amount equal to the principal balance of the Class PEX Certificates issued on the Closing Date.
The respective notional amounts of the Class X-A and X-B Certificates will each be comprised of components that correspond to respective Classes of Principal Balance Certificates and the Class A-4FX, A-S, B and C Regular Interests, as applicable. The notional amount of the Class X-A Certificates will be comprised of seven (7) components corresponding to the Class A-1, A-2, A-3, A-4 and A-SB Certificates and the Class A-4FX and A-S Regular Interests. The notional amount of the Class X-B Certificates will be comprised of two (2) components corresponding to the Class B and C Regular Interests. Each component of the Class X-A or X-B Certificates will have a notional amount equal to the aggregate principal balance of its corresponding Class of Principal Balance Certificates or Regular Interests, as applicable, from time to time. Accordingly, for purposes of calculating the amount of accrued interest with respect to those Certificates, the Class X-A Certificates will have a notional amount equal to the aggregate principal balance of the Class A-1, A-2, A-3, A-4 and A-SB Certificates and the Class A-4FX and A-S Regular Interests outstanding from time to time and the Class X-B Certificates will have a notional amount equal to the aggregate principal balance of the Class B and C Regular Interests outstanding from time to time.
The Class R Certificates will not have a principal balance or notional amount. They will be residual interest Certificates. The holders of the Class R Certificates are not expected to receive any material payments.
Neither the Class V-1 nor the V-2 Certificates will have a principal balance or notional amount. The Class V-1 Certificates will only be entitled to receive Excess Interest on the Mortgage Loan identified on Annex A-1 to this free writing prospectus as Walgreens – Milwaukee and the Class V-2 Certificates will only be entitled to receive Excess Interest on the Mortgage Loan identified on Annex A-1 to this free writing prospectus as Haggen Food & Pharmacy.
In general, principal balances and notional amounts will be reported on a class-by-class basis. In order to determine the principal balance of any Principal Balance Certificate from time to time, you may multiply the original principal balance of that Certificate as of the Closing Date, as specified on the face of that Certificate, by the then-applicable certificate factor for the relevant Class. The certificate factor for any Class of Principal Balance Certificates, as of any date of determination, will equal a fraction, expressed as a percentage, the numerator of which will be the then-outstanding aggregate principal balance of that Class, and the denominator of which will be the original aggregate principal
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balance of that Class. Certificate factors will be reported monthly in the Certificate Administrator’s report.
“Excess Interest” with respect to any ARD Loan is the interest accrued on such Mortgage Loan after the Anticipated Repayment Date allocable to the difference between the Revised Rate and the sum of the Mortgage Pass-Through Rate and the Administrative Fee Rate, plus any compound interest thereon, to the extent permitted by law.
Exchanges of Exchangeable Certificates
Exchanges. Class A-S, B and C Certificates may be exchanged for Class PEX Certificates and vice versa, in whole or in part. This process may occur repeatedly. In the event that the principal balance of the Class A-S, B, C and/or PEX Certificates is reduced to zero as a result of such Class being paid all interest and principal in full, exchanges will no longer be permissible. With respect to any exchange, each of the Class A-S, B and C Certificates will be required in order to exchange such Certificates for Class PEX Certificates, using the initial principal balances of the individual Certificates being exchanged (rather than the outstanding principal balance), in each case, in the applicable Exchange Proportion (defined below). This Exchange Proportion is based on the initial principal balances of the Classes (rather than the outstanding principal balances). The aggregate principal balance of the Certificates (with each Class rounded to the nearest whole dollar) received in an exchange, immediately after the exchange, must equal the aggregate principal balance of the Certificates (with each Class rounded to the nearest whole dollar) surrendered for exchange immediately prior to such exchange.
An “Exchange Proportion” consists of Class A-S, B and C certificates with original certificate principal balances (regardless of current certificate principal balance) that represent approximately 42.3%, 33.8% and 23.9%, respectively, of the aggregate original certificate principal balances of all Class A-S, B and C certificates involved in the exchange.
The Class PEX Certificates will only receive distributions of interest, principal, Prepayment Premiums and Yield Maintenance Charges that are allocated to the Class A-S, B and C Certificates exchanged for such Class PEX Certificates. Any Realized Losses or other shortfalls, including as a result of the application of Appraisal Reduction Amounts, allocated to Class A-S, B and C Certificates that were exchanged for Class PEX Certificates will be borne by such Class PEX Certificates. See “—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses” below.
For a discussion of the federal income tax consequences of the acquisition, ownership and disposition of the Exchangeable Certificates, see “Material Federal Income Tax Consequences—Taxation of the Exchangeable Certificates”.
Procedures and Fees. If a Certificateholder wishes to exchange Class A-S, B and C Certificates for Class PEX Certificates, or Class PEX Certificates for Class A-S, B and C Certificates, such Certificateholder must notify the Certificate Administrator in writing or by e-mail at cts.cmbs.bond.admin@wellsfargo.com no later than 3 business days prior to the proposed date of such exchange (the “Exchange Date”). The Exchange Date can be any business day other than the first or last business day of the month, subject to satisfaction of the Certificate Administrator. In addition, the Certificateholder must provide notice on the Certificateholder’s letterhead, which notice must carry a medallion stamp guarantee and set forth the following information: the CUSIP numbers of the Class A-S, B and C Certificates to be exchanged and the Class PEX Certificates to be received (or vice versa), the principal balance of the Class A-S, B and C (or Class PEX) Certificates to be exchanged, the Certificateholder’s DTC participant number and the proposed Exchange Date. The
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Certificateholder and the Certificate Administrator will utilize the “deposit and withdrawal system” at DTC to exchange the Certificates.
The principal and interest entitlements of the Certificates received must equal the entitlements of the Certificates surrendered. The notice of exchange will become irrevocable on the 2nd business day before the proposed Exchange Date.
In connection with each exchange, the Certificateholder must pay any fees charged by DTC or any successor depository, and such fees must be received by the Certificate Administrator prior to the Exchange Date or such exchange will not be effected. The first distribution on Class A-S, B and C Certificates, or Class PEX Certificates, as applicable, will be made in the month following the month of exchange to the Certificateholder of record as of the applicable record date for such Certificate. Neither the Certificate Administrator nor the Depositor will have any obligation to ensure the availability of the applicable Certificates to accomplish any exchange.
Distribution Account
General. The Certificate Administrator must establish and maintain an account (the “Distribution Account”) in which it will hold funds pending their distribution on the Certificates and from which it will make those distributions. That Distribution Account is required to be maintained in the name of the Certificate Administrator on behalf of the Trustee for the benefit of the Certificateholders and in a manner and with a depository institution that satisfies the standards of each of the Rating Agencies for securitizations similar to the one involving the Offered Certificates. One or more subaccounts of the Distribution Account will be established to account separately for the deposits and distributions with respect to REMIC I, REMIC II, REMIC III, the portion of the Trust that holds the Class A-4FX, A-S, B and C Regular Interests and the portion of the Trust that holds the Excess Interest.
Deposits. On the business day prior to each distribution date, each Master Servicer will be required to remit to the Certificate Administrator for deposit in the Distribution Account the following funds:
· | All payments and other collections on the Mortgage Loans and any REO Properties in the Trust Fund for which that Master Servicer acts as Master Servicer, that are then on deposit in the related Collection Account, exclusive of any portion of those payments and other collections that represents one or more of the following: |
1. | monthly debt service payments due on a Due Date in a collection period subsequent to the collection period related to the subject distribution date; |
2. | payments and other collections received by or on behalf of the Trust Fund after the end of the related collection period; |
3. | Authorized Collection Account Withdrawals, including— |
(a) | amounts payable to either Master Servicer or either Special Servicer as indemnification or as compensation, including master servicing fees, special servicing fees, workout fees, liquidation fees, assumption fees, Modification Fees and, to the extent not otherwise applied to cover interest on advances, late payment charges and Default Interest, |
(b) | amounts payable in reimbursement of outstanding advances, together with interest on those advances, |
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(c) | amounts payable with respect to other Additional Trust Fund Expenses, |
(d) | amounts payable with respect to the Trust Advisor as trust advisor fees, |
(e) | amounts payable to any master servicer, special servicer, certificate administrator, trustee or trust advisor with respect to reimbursement for costs or expenses, servicing advances, compensation or indemnification related to any Non-Serviced Pari Passu Mortgage Loan, and |
(f) | amounts deposited in such Collection Account in error. |
· | Any advances of delinquent monthly debt service payments made by that Master Servicer with respect to those Mortgage Loans for that distribution date. |
· | Any payments made by that Master Servicer to cover Prepayment Interest Shortfalls incurred with respect to those Mortgage Loans during the related collection period. |
See “—Advances of Delinquent Monthly Debt Service Payments” below and “Servicing of the Mortgage Loans and Administration of the Trust Fund—Collection Accounts” and “—Servicing and Other Compensation and Payment of Expenses” in this free writing prospectus.
With respect to the distribution date that occurs in March of any calendar year (and if the final distribution date occurs in January (except in a leap year) or February of any year, with respect to the distribution date in such January or February), the Certificate Administrator will be required to transfer from the Interest Reserve Account, which we describe under “—Interest Reserve Account” below, to the Distribution Account the interest reserve amounts that are then being held in that Interest Reserve Account with respect to the Mortgage Loans that accrue interest on an Actual/360 Basis.
The Certificate Administrator may, at its own risk, invest funds held in the Distribution Account in Permitted Investments and will be entitled to the interest and other income earned on those funds and will be obligated to make up investment losses. Notwithstanding anything herein to the contrary, for so long as Wells Fargo Bank acts as the Certificate Administrator, all funds held in the Distribution Account and the excess liquidation proceeds account will remain uninvested.
“Permitted Investments” means United States government securities and other investment grade obligations specified in the Pooling and Servicing Agreement.
Withdrawals. The Certificate Administrator may from time to time make withdrawals from the Distribution Account for any of the following purposes (the order set forth below not constituting an order of priority for withdrawals):
· | to make distributions on the Certificates; |
· | to pay itself, the tax administrator, the Master Servicers, the Special Servicers, the Depositor and the Trustee monthly fees that are described under “—Matters Regarding the Certificate Administrator and the Tax Administrator”, “The Trustee—Matters Regarding the Trustee” and “—Reports to Certificateholders; Available Information” below; |
· | to pay any indemnities and reimbursements owed to itself (in each of its capacities), the Trustee and various related persons as described under “—Matters Regarding the Certificate Administrator and the Tax Administrator” below; |
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· | to pay for any opinions of counsel required to be obtained in connection with any amendments to the Pooling and Servicing Agreement; |
· | to pay any federal, state and local taxes imposed on the Trust Fund, its assets and/or transactions, together with all incidental costs and expenses, that are required to be borne by the Trust Fund as described under “Material Federal Income Tax Consequences—REMICs—Taxation of Owners of REMIC Residual Certificates—Prohibited Transactions Tax and Other Taxes” in the accompanying prospectus and “Servicing of the Mortgage Loans and Administration of the Trust Fund—REO Account” in this free writing prospectus; |
· | to pay itself net investment earnings earned on funds in the Distribution Account for each collection period; |
· | to pay for the cost of recording the Pooling and Servicing Agreement in a public recording office, if determined to be beneficial to the Certificateholders and the Subordinate Class Representative consents; |
· | with respect to each distribution date during February of any year and each distribution date during January of any year that is not a leap year, to transfer to the Interest Reserve Account the interest reserve amounts required to be so transferred in that month with respect to the Mortgage Loans that accrue interest on an Actual/360 Basis; |
· | to pay to the person entitled thereto any amounts deposited in the Distribution Account in error; and |
· | to clear and terminate the Distribution Account upon the termination of the Pooling and Servicing Agreement. |
Interest Reserve Account
The Certificate Administrator must maintain an account (which may be a sub-account of the Distribution Account) (the “Interest Reserve Account”) in which it will hold the interest reserve amounts described in the next paragraph with respect to the Mortgage Loans that accrue interest on an Actual/360 Basis. That Interest Reserve Account must be maintained by the Certificate Administrator in its name on behalf of the Trustee for the benefit of the Certificateholders and in a manner and with a depository institution that satisfies each Rating Agency’s standards for securitizations similar to the one involving the Offered Certificates. The Certificate Administrator may, at its own risk, invest funds held in the Interest Reserve Account in Permitted Investments, and will be entitled to the interest and other income earned on those funds and will be obligated to make up investment losses. Notwithstanding anything herein to the contrary, for so long as Wells Fargo Bank acts as the Certificate Administrator, all funds held in the Interest Reserve Account will remain uninvested.
During January, except in a leap year, and February of each calendar year, the Certificate Administrator must, on or before the distribution date in that month, withdraw from the Distribution Account and deposit in the Interest Reserve Account the interest reserve amount with respect to each of the Mortgage Loans that accrue interest on an Actual/360 Basis and for which the monthly debt service payment due in that month was either received or advanced. In general, that interest reserve amount for each of those Mortgage Loans will equal one day’s interest accrued at the related mortgage interest rate
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net of the Administrative Fee Rate, on the Stated Principal Balance of that Mortgage Loan as of the beginning of the related collection period.
In March of each calendar year (and if the final distribution date occurs in January (except in a leap year) or February of any year, in such January or February), the Certificate Administrator must, on or before the distribution date in that month, withdraw from the Interest Reserve Account and deposit in the Distribution Account any and all interest reserve amounts then on deposit in the Interest Reserve Account with respect to the Mortgage Loans that accrue interest on an Actual/360 Basis. All interest reserve amounts that are so transferred from the Interest Reserve Account to the Distribution Account will be included in the Available Distribution Amount for the distribution date during the month of transfer.
Distributions
General. On each distribution date, the Certificate Administrator will make all distributions required to be made on the Certificates on that distribution date to the holders of record as of the close of business on the related record date,provided that the final distribution of principal and/or interest to the registered holder of any Offered Certificate will not be made until presentation and surrender of that Certificate at the location to be specified in a notice of the pendency of that final distribution.
Distributions made to a Class of Certificateholders will be allocated,pro rata, among those Certificateholders in proportion to their respective percentage interests in that Class.
In order for a Certificateholder to receive distributions by wire transfer on and after any particular distribution date, that Certificateholder must provide the Certificate Administrator with written wiring instructions no later than five days prior to the last day of the calendar month preceding the month in which that distribution date occurs. Otherwise, that Certificateholder will receive its distributions by check mailed to it.
Cede & Co. will be the registered holder of your Offered Certificates, and you will receive distributions on your Offered Certificates through DTC and its participating organizations (together with Clearstream Banking, société anonyme (“Clearstream”) and Euroclear Bank, as operator of the Euroclear System (“Euroclear”) participating organizations, the “Participants”), until physical Certificates are issued, if ever. See “—Delivery, Form and Denomination” below and “Description of the Certificates—Book-Entry Registration and Definitive Certificates” in the accompanying prospectus.
If, in connection with any distribution date, the Certificate Administrator has reported the amount of an anticipated distribution to DTC based on the expected receipt of any monthly payment based on information set forth in a report, or any monthly payment expected to be paid on the last two business days preceding such distribution date, and the related borrower fails to make such payments at such time, the Certificate Administrator will use commercially reasonable efforts to cause DTC to make the revised distribution on a timely basis on such distribution date, but we cannot assure you that DTC will be able to do so. The Certificate Administrator, the Master Servicers, the Special Servicers and the Trustee will not be liable or held responsible for any resulting delay, or claims by DTC resulting therefrom, in the making of such distribution to the Certificateholders. In addition, if the Certificate Administrator incurs out-of-pocket expenses, despite reasonable efforts to avoid or mitigate such expenses, as a consequence of a borrower failing to make such payments, the Certificate Administrator will be entitled to reimbursement from the Trust. Any such reimbursement will constitute Additional Trust Fund Expenses.
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Interest Distributions. All of the Classes of the Certificates will bear interest, except for the Class R, V-1 and V-2 Certificates. The interest accrual period for each distribution date for the Offered Certificates will be the calendar month immediately preceding the month in which that distribution date occurs.
With respect to each interest-bearing Class of the Certificates (other than the Class PEX Certificates) and the Class A-4FX, A-S, B and C Regular Interests, interest will accrue during each interest accrual period based upon:
· | the pass-through rate for that Class and interest accrual period; |
· | the aggregate principal balance or notional amount, as the case may be, of that Class outstanding immediately prior to the related distribution date; |
· | with respect to the Class A-4FX, A-S, B and C Regular Interests and each Class of Certificates other than the Class A-4FL Certificates, the assumption that each interest accrual period consists of 30 days and each year consists of 360 days; and |
· | with respect to the Class A-4FL Certificates, the interest accrual period for any distribution date will be the period from and including the distribution date in the month preceding the month in which the related distribution date occurs (or, in the case of the first distribution date, the Closing Date) to, but excluding, the related distribution date. With respect to the Class A-4FL Certificates, interest will be calculated based upon the actual number of days in the related interest accrual period and a year consisting of 360 days;provided that if the pass-through rate for the Class A-4FL Certificates converts to a fixed rate, the interest calculation method and interest accrual period for the Class A-4FL Certificates will be the same as the Class A-4FX Regular Interest. |
The Class PEX Certificates do not have a pass-through rate, but receive distributions of interest equal to the sum of the interest that would be distributable to the Class A-S, B and C Certificates exchanged for such Class PEX Certificates.
On each distribution date, subject to the Available Distribution Amount for that date and the distribution priorities described under “—Priority of Distributions” below, the holders of each interest-bearing Class of the Certificates (other than the Class A-4FL, A-4FX, A-S, B, C and PEX Certificates) and each of the Class A-4FX, A-S, B and C Regular Interests (and, therefore, the Class A-4FL, A-4FX, A-S, B, C and/or PEX Certificates, as applicable), as described below will be entitled to receive the sum of—
· | an amount equal to: |
1. | the total amount of interest accrued during the related interest accrual period with respect to that Class, reduced by |
2. | the portion of any Net Aggregate Prepayment Interest Shortfall (if any) for that distribution date that is allocable to that Class as described further below, and |
· | any shortfall between that amount as calculated for the prior distribution date and the amount of interest actually distributed on that Class on the prior distribution date. |
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“Net Aggregate Prepayment Interest Shortfall” means, with respect to any distribution date, the excess, if any, of:
· | the total Prepayment Interest Shortfalls incurred with respect to the Mortgage Loans during the related collection period; over |
· | the sum of the total payments made by the Master Servicers to cover those Prepayment Interest Shortfalls. |
“Prepayment Interest Shortfall” means, with respect to any Mortgage Loan (including any Non-Serviced Pari Passu Mortgage Loan) that was subject to a principal prepayment in full or in part made (or, if resulting from the application of insurance proceeds or condemnation proceeds, any other early recovery of principal received) prior to the Due Date for that Mortgage Loan in any collection period, the amount of interest, to the extent not collected from the related borrower or otherwise (without regard to any Prepayment Premium or Yield Maintenance Charge that may have been collected), not received by the Trust, that would have accrued on the amount of such principal prepayment during the period from the date to which interest was paid by the related borrower to, but not including, the related Due Date immediately following the date of the subject principal prepayment (net of related master servicing fees (and, in the case of an ARD Loan after its Anticipated Repayment Date, net of any Excess Interest, and, in the case of any Non-Serviced Pari Passu Mortgage Loan, net of an additional rate payable to the Other Master Servicer or Other Trust Advisor), and, further, net of any portion of that interest that represents Default Interest and/or late payment charges).
“Prepayment Interest Excess” means, with respect to any Mortgage Loan (including any Non-Serviced Pari Passu Mortgage Loan) that was subject to a principal prepayment in full or in part made (or, if resulting from the application of insurance proceeds or condemnation proceeds, any other early recovery of principal received) after the Due Date for that Mortgage Loan in any collection period, any payment of interest (net of related master servicing fees and, further, net of any portion of that interest that represents Default Interest or Excess Interest, and, in the case of any Non-Serviced Pari Passu Mortgage Loan, net of an additional rate payable to the Other Master Servicer or Other Trust Advisor) actually collected from the related borrower or out of such insurance proceeds or condemnation proceeds, as the case may be, and intended to cover the period from and after the Due Date to, but not including, the date of prepayment (without regard to any Prepayment Premium or Yield Maintenance Charge that may have been collected).
Notwithstanding the foregoing, the amount otherwise distributable in respect of interest on a Class of Certificates on any distribution date will be adjusted in accordance with the provisions described below:
· | In the case of the Class B and C Regular Interests (and, therefore, the Class B and C Certificates and the Class B and C components of the Class PEX Certificates) and the Class D Certificates, the amount otherwise distributable in respect of interest on that distribution date will be reduced by the amount of Trust Advisor Expenses allocated to that Class as described under “—Reductions of Interest Entitlements and the Principal Distribution Amount in Connection with Certain Trust Advisor Expenses” below (which excludes Designated Trust Advisor Expenses); |
· | If and to the extent that any such Trust Advisor Expenses were previously allocated to reduce the interest distributable on the Class B and/or C Regular Interests (and, therefore, on the Class B and C Certificates and the Class B and C components of the Class PEX Certificates) or the Class D Certificates on a prior distribution date, the |
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amount otherwise distributable in respect of interest on the Class B and C Regular Interests (and, therefore, on the Class B and C Certificates and the Class B and C components of the Class PEX Certificates) and the Class D Certificates (in that order) will be increased (in each case, up to the amount of the Trust Advisor Expenses previously so allocated to that Class), and the amount otherwise distributable in respect of interest on the Class D Certificates and (if necessary) Class C Regular Interest (in that order) (and, therefore the Class C Certificates and the Class C component of the Class PEX Certificates) will be reduced (in each case, up to the amount of interest otherwise distributable on that Class on the current distribution date); |
· | If any such Trust Advisor Expenses were previously allocated to the Class B or C Regular Interests or the Class D Certificates, and the expenses are subsequently recovered from a source other than the borrowers under the Mortgage Loans or the related Mortgaged Properties, then, to the extent of any portion of such recovery remaining after application to reimburse the holders of any Principal Balance Certificates that suffered write-offs in connection with Trust Advisor Expenses (see “—Loss Reimbursement Amounts” below), the interest otherwise distributable on those Classes in the aggregate will be increased by the amount of that recovery, which aggregate increase will be allocated to the Class B and C Regular Interests (and therefore, the Class B and C Certificates and the Class B and C components of the Class PEX Certificates) and the Class D Certificates, in that order, in each case up to the aggregate unrecovered amount of such Trust Advisor Expenses previously allocated to that Class; and |
· | If any Class of Principal Balance Certificates (other than the Class A-4FL, A-4FX, A-S, B, C or PEX Certificates) or any of the Class A-4FX, A-S, B or C Regular Interests (and, therefore, the Class A-4FL, A-4FX, A-S, B, C and/or PEX Certificates, as applicable) experiences a reinstatement of its principal balance on any distribution date under the limited circumstances that we describe under “—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses” below, then that Class will also be entitled (also subject to the Available Distribution Amount for that distribution date and the distribution priorities described under “—Priority of Distributions” below) to the interest that would have accrued for certain prior interest accrual periods (from the date(s) at which the applicable dollar amount(s) being reinstated were most recently written down on that Class (whether such written down amount(s) were written down as a result of the Realized Loss whose recovery has resulted in the reinstatement or as a result of subsequent allocations of Realized Loss(es) unrelated to such Realized Loss whose recovery has resulted in the reinstatement), and at the applicable pass-through rate(s) for such prior interest accrual periods and interest will thereafter accrue on the principal balance of that Class (as calculated taking into account any such restorations and any reductions in such principal balance from time to time) at the pass-through rate for that Class in effect from time to time (such amounts of interest are referred to herein as “Recovered Interest Amounts”). |
No portion of any Net Aggregate Prepayment Interest Shortfall for any distribution date will be allocable to the Class X-A or X-B Certificates. The portion of any Net Aggregate Prepayment Interest Shortfall for any distribution date that is allocable to any particular Class of Principal Balance Certificates (other than the Class A-4FL, A-4FX, A-S, B, C and PEX Certificates), and the Class A-4FX, A-S, B and C Regular Interests (and, therefore, the Class A-4FL, A-4FX, A-S, B, C and/or PEX Certificates, as applicable) will equal the product of—
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· | the amount of that Net Aggregate Prepayment Interest Shortfall,multiplied by |
· | a fraction— |
1. | the numerator of which is the total amount of interest accrued during the related interest accrual period with respect to that Class of Certificates (other than the Class A-4FL, A-4FX, A-S, B, C and PEX Certificates) or Regular Interests, and |
2. | the denominator of which is the total amount of interest accrued during the related interest accrual period with respect to all of the Principal Balance Certificates (other than the Class A-4FL, A-4FX, A-S, B, C and PEX Certificates) and the Class A-4FX, A-S, B and C Regular Interests. |
With respect to each Class of interest-bearing Certificates and the Class A-4FX, A-S, B and C Regular Interests, the accrued interest for that Class, subject to all the above-described adjustments as described above and elsewhere in this free writing prospectus, is the interest entitlement for that Class and distribution date.
Calculation of Pass-Through Rates. The pass-through rate applicable to each interest-bearing Class of Certificates (other than the Class PEX Certificates) and the Class A-4FX, A-S, B and C Regular Interests for the initial interest accrual period is shown in the table and the related footnotes appearing under the caption “Summary—Description of the Offered Certificates” in this free writing prospectus.
The pass-through rates for the Class Certificates and for the Class Regular Interest for each subsequent interest accrual period will, in the case of each of those Classes, remain fixed at the pass-through rate applicable to that Class of Certificates for the initial interest accrual period.
The pass-through rate applicable to the Class Certificates for each interest accrual period will equal the WAC Rate for the distribution date that corresponds to that interest accrual period.
The pass-through rate applicable to the Class Certificates for each interest accrual period will be a variable rate equal to the WAC Rate for the distribution date that corresponds to that interest accrual periodminus a specified percentage.
The pass-through rates for the Class Certificates and the Class Regular Interests for each subsequent interest accrual period will, in the case of each of those Classes, equal to the lesser of:
· | the pass-through rate applicable to that Class of Certificates or Regular Interest for the initial interest accrual period, and |
· | the WAC Rate for the distribution date that corresponds to that subsequent interest accrual period. |
The pass-through rate on the Class A-4FX Regular Interest and the Class A-4FX Certificates will be aper annum rate equal to %.
The pass-through rate on the Class A-4FL Certificates will be aper annum rate equal to LIBOR plus %;provided,however, that under certain circumstances, the pass-through rate on the Class A-4FL Certificates may convert to the pass-through rate applicable to the Class A-4FX Regular Interest. The initial LIBOR rate will be determined two LIBOR Business Days prior to the Closing Date, and subsequent LIBOR rates for the Class A-4FL Certificates
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will be determined two LIBOR Business Days before the start of the related interest accrual period.
The Class PEX Certificates do not have a pass-through rate, but receive distributions of interest equal to the interest that would be distributable to the Class A-S, B and C Certificates exchanged for such Class PEX Certificates.
The pass-through rate applicable to the Class X-A Certificates for each interest accrual period will equal the excess, if any, of the WAC Rate for the distribution date that corresponds to that interest accrual period, over the weighted average of the pass-through rates applicable to the Class A-1, A-2, A-3, A-4 and A-SB Certificates and the Class A-4FX and A-S Regular Interests, weighted according to the respective aggregate outstanding principal balances of those Classes and such Regular Interests immediately prior to that distribution date. The pass-through rate applicable to the Class X-B Certificates for each interest accrual period will equal the excess, if any, of the WAC Rate for the distribution date that corresponds to that interest accrual period, over the weighted average of the pass-through rates applicable to the Class B and C Regular Interests, weighted according to the respective aggregate outstanding principal balances of such Class and those Regular Interests immediately prior to that distribution date.
The calculation of the WAC Rate will be unaffected by any change in the mortgage interest rate for any Mortgage Loan, including in connection with any bankruptcy or insolvency of the related borrower or any modification of that Mortgage Loan agreed to by the applicable Master Servicer or the applicable Special Servicer.
“WAC Rate” means, for each distribution date, the weighted average of the respective Mortgage Pass-Through Rates with respect to all of the Mortgage Loans for that distribution date, weighted on the basis of their respective Stated Principal Balances immediately prior to that determination date.
“Mortgage Pass-Through Rate” means, with respect to any Mortgage Loan for any distribution date, an annual rate generally equal to either:
· | in the case of a Mortgage Loan that accrues interest on a 30/360 Basis, a rateper annum equal to the mortgage interest rate for that Mortgage Loan under its contractual terms in effect as of the Closing Date,minus the Administrative Fee Rate for that Mortgage Loan; or |
· | in the case of a Mortgage Loan that accrues interest on an Actual/360 Basis, twelve times a fraction, expressed as a percentage— |
1. | the numerator of which fraction is, subject to adjustment as described below in this definition, an amount of interest equal to the product of (a) the number of days in the related interest accrual period,multiplied by (b) the Stated Principal Balance of that Mortgage Loan immediately preceding that determination date,multiplied by (c) 1/360,multiplied by (d) a rateper annum equal to the mortgage interest rate for that Mortgage Loan under its contractual terms in effect as of the Closing Date,minus the related Administrative Fee Rate for that Mortgage Loan, and |
2. | the denominator of which is the Stated Principal Balance of that Mortgage Loan immediately preceding that determination date. |
Notwithstanding the foregoing, if the subject distribution date occurs in any January (except in a leap year) or in any February, then the amount of interest referred to in the
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numerator of the fraction described in clause 1 of the second bullet in the preceding paragraph will be decreased to reflect any interest reserve amount with respect to the subject Mortgage Loan that is transferred from the Distribution Account to the Interest Reserve Account during that month. Furthermore, if the subject distribution date occurs in March of any year (or, if the subject distribution date is the final distribution date, in January (except in a leap year) or February of any year), then the amount of interest referred to in the numerator of the fraction described in clause 1 of the second bullet of the preceding paragraph will be increased to reflect any interest reserve amounts with respect to the subject Mortgage Loan that are transferred from the Interest Reserve Account to the Distribution Account during that month.
For purposes of calculating the pass-through rates of the Certificates, the Mortgage Pass-Through Rate of each Mortgage Loan will not reflect any modification, waiver or amendment of that Mortgage Loan occurring subsequent to the Closing Date (whether entered into by the applicable Master Servicer, the applicable Special Servicer or any other appropriate party or in connection with any bankruptcy, insolvency or other similar proceeding involving the related borrower), or any Default Interest.
The “Administrative Fee Rate” means, for each Mortgage Loan, the sum of (i) the certificate administrator fee rate, (ii) except with respect to any Non-Serviced Pari Passu Mortgage Loan, the trust advisor fee rate, (iii) the applicable master servicing fee rate (which is inclusive of any primary servicing or subservicing fee payable from the master servicing fee to the applicable primary servicer or subservicer) and (iv) the CREFC® Intellectual Property Royalty License Fee Rate.
“CREFC® Intellectual Property Royalty License Fee” with respect to each Mortgage Loan and REO Mortgage Loan and for any distribution date is the amount accrued during the related interest accrual period at the CREFC® Intellectual Property Royalty License Fee Rate on the Stated Principal Balance of such Mortgage Loan or REO Mortgage Loan as of the close of business on the immediately preceding distribution date;provided that such amounts will be computed for the same period and on the same interest accrual basis respecting which any related interest payment due or deemed due on the related Mortgage Loan or REO Mortgage Loan is computed and will be prorated for partial periods. Each Master Servicer, to the extent sufficient funds are on deposit in the related Collection Account, will remit payments to CREFC® of the CREFC® Intellectual Property Royalty License Fee on a monthly basis out of amounts on deposit in the related Collection Account.
“CREFC® Intellectual Property Royalty License Fee Rate” with respect to each Mortgage Loan is a rate equal to 0.0005%per annum.
“Principal Distribution Amount” means an amount equal to the total, without duplication, of the following—
1. | all payments of principal, including voluntary principal prepayments, received by or on behalf of the Trust Fund with respect to the Mortgage Loans during the related collection period, exclusive of any of those payments that represents a collection of principal for which an advance was previously made for a prior distribution date or that represents a monthly payment of principal due on or before the Cut-off Date for the related Mortgage Loan or on a Due Date for the related Mortgage Loan subsequent to the collection period for the subject distribution date, |
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2. | all monthly payments of principal that were received by or on behalf of the Trust Fund with respect to the Mortgage Loans prior to, but that are due (or deemed due) during, the related collection period, |
3. | all other collections, including liquidation proceeds, condemnation proceeds, insurance proceeds and repurchase proceeds, that were received by or on behalf of the Trust Fund with respect to any of the Mortgage Loans or any related REO Properties during the related collection period and that were identified and applied by the applicable Master Servicer as recoveries of principal of the subject Mortgage Loan(s), in each case net of any portion of the particular collection that represents a collection of principal for which an advance of principal was previously made for a prior distribution date or that represents a monthly payment of principal due on or before the Cut-off Date for the related Mortgage Loan, and |
4. | all advances of principal made with respect to the Mortgage Loans and any REO Mortgage Loans for that distribution date. |
Notwithstanding the foregoing, (A) if any insurance proceeds, condemnation proceeds and/or liquidation proceeds are received with respect to any Mortgage Loan, or if any Mortgage Loan is otherwise liquidated, including at a discount, in any event during the collection period for the subject distribution date, then that portion, if any, of the aggregate amount described in clauses 1 through 4 above that is attributable to that Mortgage Loan will be reduced – to notless than zero – by any workout fees or liquidation fees paid with respect to that Mortgage Loan from a source other than related Default Interest and late payment charges during the collection period for the subject distribution date; (B) the aggregate amount described in clauses 1 through 4 above will be further subject to reduction—to notless than zero—by any nonrecoverable advances (and interest thereon) that are reimbursed from the principal portion of debt service advances and payments and other collections of principal on the Mortgage Pool (see “Description of the Offered Certificates—Advances of Delinquent Monthly Debt Service Payments” and “Servicing of the Mortgage Loans and Administration of the Trust Fund—Servicing and Other Compensation and Payment of Expenses”) during the related collection period (although any of those amounts that were reimbursed from advances or collections of principal and are subsequently collected (notwithstanding the nonrecoverability determination) on the related Mortgage Loan will be added to the Principal Distribution Amount for the distribution date following the collection period in which the subsequent collection occurs); and (C) the aggregate amount described in clauses 1 through 4 above will be subject to further reduction – to notless than zero – by any advances (and interest thereon) with respect to a Defaulted Mortgage Loan that remained unreimbursed at the time of the loan’s modification while a Specially Serviced Mortgage Loan and are reimbursed from the principal portion of debt service advances and payments and other collections of principal on the Mortgage Pool (see “Description of the Offered Certificates—Advances of Delinquent Monthly Debt Service Payments” and “Servicing of the Mortgage Loans and Administration of the Trust Fund—Servicing and Other Compensation and Payment of Expenses”) during that collection period (although any of those amounts that were reimbursed from principal collections and are subsequently collected on the related Mortgage Loan will be added to the Principal Distribution Amount for the distribution date following the collection period in which the subsequent collection occurs).
“Defaulted Mortgage Loan” means a Mortgage Loan (other than a Non-Serviced Pari Passu Mortgage Loan) that is both (A) a Specially Serviced Mortgage Loan and (B) is either (i) delinquent 120 days or more with respect to any balloon payment or 60 days or more with respect to any other monthly payment, with such delinquency to be determined
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without giving effect to any grace period permitted by the related mortgage or promissory note and without regard to any acceleration of payments under the related mortgage and promissory note, or (ii) a Mortgage Loan as to which the amounts due thereunder have been accelerated following any other material default.
Furthermore, unless and until all Classes of Certificates other than the Control-Eligible Certificates have been retired, the Principal Distribution Amount (or any lesser portion thereof allocable to the Class A-1, A-2, A-3, A-4, A-SB or D Certificates or the Class A-4FX, A-S, B or C Regular Interests) for each distribution date will be reduced to the extent of any Trust Advisor Expenses (other than Designated Trust Advisor Expenses) that exceed the amount of interest otherwise payable on the Class B or C Regular Interests (and, therefore, the Class B and C Certificates and the Class B and C components of the Class PEX Certificates) or Class D Certificates on that distribution date. “Control-Eligible Certificates” means the Class E, F and G Certificates.
The Class A-S, B and C Certificates’ respective interest entitlements for any distribution date will equal their percentage interest of the interest entitlements of the Class A-S, B and C Regular Interests, respectively, on that distribution date. The Class PEX Certificates’ interest entitlement for any distribution date will equal their percentage interest of the interest entitlement of each of the Class A-S, B and C Regular Interests for that distribution date. The Class R, V-1 and V-2 Certificates are not interest-bearing Certificates and will not have pass-through rates.
Principal Distributions. Subject to the relevant Available Distribution Amount and the priority of distributions described under “—Priority of Distributions” below, the total amount of principal payable with respect to each Class of the Principal Balance Certificates and the Class A-4FX, A-S, B and C Regular Interests on each distribution date will equal that Class’s allocable share of the Principal Distribution Amount for that distribution date as described below.
In general, the Principal Distribution Amount for each distribution date will be allocated in the following amounts and order of priority:
· | to the holders of the Class A-SB Certificates in an amount equal to the lesser of— |
1. | the Principal Distribution Amount for that distribution date, and |
2. | the excess of (a) the principal balance of the Class A-SB Certificates immediately prior to that distribution date over (b) the Class A-SB Planned Principal Balance for that distribution date; |
· | to the holders of the Class A-1 Certificates in an amount equal to the lesser of— |
1. | the Principal Distribution Amount for that distribution date (net of any portion thereof that is distributable on that distribution date to the holders of the Class A-SB Certificates as described in the immediately preceding bullet point), and |
2. | the principal balance of the Class A-1 Certificates immediately prior to that distribution date; |
· | to the holders of the Class A-2 Certificates in an amount equal to the lesser of— |
1. | the portion of the Principal Distribution Amount for that distribution date (net of any portion thereof that is distributable on that distribution date to the holders of |
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the Class A-SB and Class A-1 Certificates as described in the preceding bullet points), and |
2. | the principal balance of the Class A-2 Certificates immediately prior to that distribution date; |
· | to the holders of the Class A-3 Certificates in an amount equal to the lesser of — |
1. | the portion of the Principal Distribution Amount for that distribution date (net of any portion thereof that is distributable on that distribution date to the holders of the Class A-SB, A-1 and A-2 Certificates as described in the preceding bullet points), and |
2. | the principal balance of the Class A-3 Certificates immediately prior to that distribution date; |
· | on apro rata basis, to the holders of the Class A-4 Certificates and to the Class A-4FX Regular interest (and, therefore, to the holders of the Class A-4FL and A-4FX Certificates) in an amount equal to the lesser of— |
1. | the portion of the Principal Distribution Amount for that distribution date (net of any portion thereof that is distributable on that distribution date to the holders of the Class A-SB, A-1, A-2 and A-3 Certificates as described in the preceding bullet points), and |
2. | the aggregate principal balances of the Class A-4 Certificates and the Class A-4FX Regular Interest immediately prior to that distribution date; |
· | to the holders of the Class A-SB Certificates in an amount equal to the lesser of— |
1. | the remaining portion of the Principal Distribution Amount for that distribution date (net of any portion thereof that is distributable on that distribution date to the holders of the Class A-SB, A-1, A-2, A-3 and A-4 Certificates and the Class A-4FX Regular Interest as described in the preceding bullet points), and |
2. | the principal balance of the Class A-SB Certificates following the distributions to the Class A-SB Certificates pursuant to the first bullet point above; |
· | to the holders of the Class A-S Regular Interest (and, therefore, to the Class A-S Certificates and the Class A-S component of the Class PEX Certificates) in an amount equal to the lesser of— |
1. | the portion of the Principal Distribution Amount for that distribution date (net of any portion thereof that is distributable on that distribution date to the holders of the Class A-SB, A-1, A-2, A-3 and A-4 Certificates and the Class A-4FX Regular Interest as described in the preceding bullet points), and |
2. | the principal balance of the Class A-S Regular Interest immediately prior to that distribution date; |
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· | to the holders of the Class B Regular Interest (and, therefore, to the Class B Certificates and the Class B component of the Class PEX Certificates) in an amount equal to the lesser of— |
1. | the portion of the Principal Distribution Amount for that distribution date (net of any portion thereof that is distributable on that distribution date to the holders of the Class A-SB, A-1, A-2, A-3 and A-4 Certificates and the Class A-4FX and A-S Regular Interests as described in the preceding bullet points), and |
2. | the principal balance of the Class B Regular Interest immediately prior to that distribution date; |
· | to the holders of the Class C Regular Interest (and, therefore, to the Class C Certificates and the Class C component of the Class PEX Certificates) in an amount equal to the lesser of— |
1. | the portion of the Principal Distribution Amount for that distribution date (net of any portion thereof that is distributable on that distribution date to the holders of the Class A-SB, A-1, A-2, A-3 and A-4 Certificates and the Class A-4FX, A-S and B Regular Interests as described in the preceding bullet points), and |
2. | the principal balance of the Class C Regular Interest immediately prior to that distribution date; |
· | to the holders of the Class D Certificates in an amount equal to the lesser of— |
1. | the remaining portion of the Principal Distribution Amount for that distribution date (net of any portion thereof that is distributable on that distribution date to the holders of the Class A-SB, A-1, A-2, A-3 and A-4 Certificates and the Class A-4FX, A-S, B and C Regular Interests as described in the preceding bullet points), and |
2. | the principal balance of the Class D Certificates immediately prior to that distribution date; |
· | to the holders of the Class E, F and G Certificates, in that order, in each case in an amount equal to the lesser of— |
1. | the remaining portion of the Principal Distribution Amount for that distribution date (net of any portion thereof that is distributable on that distribution date to the holders of the Classes of Certificates or Regular Interests with an earlier alphabetical designation as described in the preceding bullet points or in this bullet point), and |
2. | the principal balance of such Class of Certificates immediately prior to that distribution date. |
Notwithstanding the provision described in the foregoing paragraph, if any of the Class A-1, A-2, A-3, A-4 and/or A-SB Certificates or the Class A-4FX Regular Interest are outstanding at a time when the aggregate principal balance of the Class A-S, B and C Regular Interests (and therefore, the Class A-S, B, C and PEX Certificates) and the Class D, E, F and G Certificates has been reduced to zero as described under “—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses” below, or, in any event, as of the final distribution date for the Certificates, the Principal Distribution Amount for that distribution date and any distribution date thereafter
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will be allocated to the holders of the Class A-1, A-2, A-3, A-4 and A-SB Certificates and the Class A-4FX Regular Interest up to an aggregate amount equal to the lesser of (a) that Principal Distribution Amount and (b) the aggregate principal balance of those Classes outstanding immediately prior to that distribution date, which amount will be allocated between such Classes on apro rata basis in accordance with their respective aggregate principal balances immediately prior to that distribution date.
The Class A-S, B and C Certificates’ respective allocable share of the Principal Distribution Amount for any distribution date will equal their percentage interest of the Class A-S, B and C Regular Interests’ respective allocable shares of the Principal Distribution Amount on that distribution date. The Class PEX Certificates’ share of the Principal Distribution Amount for any distribution date will equal their percentage interest of each of the Class A-S, B and C Regular Interests’ allocable share of the Principal Distribution Amount for that distribution date.
“Class A-SB Planned Principal Balance” means, for any distribution date, the balance shown for such distribution date in the table set forth in Annex G to this free writing prospectus. Such balances were calculated using, among other things, a 0% CPR and the Structuring Assumptions. See “Yield and Maturity Considerations—Weighted Average Life” in this free writing prospectus. Based on such assumptions, the principal balance of the Class A-SB Certificates on each distribution date would be expected to be reduced to the balance indicated for such distribution date in the table set forth in Annex G to this free writing prospectus. There is no assurance, however, that the Mortgage Loans will perform in conformity with our assumptions. Therefore, we cannot assure you that the balance of the Class A-SB Certificates on any distribution date will be equal to the balance that is specified for such distribution date in the table.
To the extent that a Master Servicer, a Special Servicer or the Trustee is reimbursed for any nonrecoverable advance (including any interest accrued thereon), or for any advance (including any interest accrued thereon) with respect to a Mortgage Loan that remains unreimbursed following its modification while a Specially Serviced Mortgage Loan, during any collection period out of the principal portion of debt service advances and payments and other collection of principal on the Mortgage Pool, the Principal Distribution Amount for the related distribution date will be reduced by the amount of such reimbursement (although any such amount that is subsequently recovered will generally be added to the Principal Distribution Amount for the distribution date following the collection period in which the recovery occurs). See “—Advances of Delinquent Monthly Debt Service Payments”, “Servicing of the Mortgage Loans and Administration of the Trust Fund—Servicing and Other Compensation and Payment of Expenses” and the definition of “Principal Distribution Amount” under “Description of the Offered Certificates—Distributions” in this free writing prospectus.
Loss Reimbursement Amounts. As discussed under “—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses” below, the aggregate principal balance of any Class of Principal Balance Certificates (other than the Class A-4FL, A-4FX, A-S, B, C and PEX Certificates), and the Class A-4FX, A-S, B and C Regular Interests (and, therefore, the Class A-4FL, A-4FX, A-S, B, C and/or PEX Certificates, as applicable) may be reduced without a corresponding distribution of principal. If such a reduction occurs as described in that section with respect to any Class of Principal Balance Certificates (other than the Class A-4FL, A-4FX, A-S, B, C and PEX Certificates), and the Class A-4FX, A-S, B and C Regular Interests (and, therefore, the Class A-4FL, A-4FX, A-S, B, C and/or PEX Certificates, as applicable), then subject to the relevant Available Distribution Amount and the priority of distributions described under “—Priority of Distributions” below, the holder(s) of that Class will be entitled to be reimbursed for the
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amount of that reduction, without interest (and without duplication of any amount reflected in a reinstatement of the aggregate principal balance of that Class under the limited circumstances described in this free writing prospectus with respect to recoveries of amounts previously determined to have constituted nonrecoverable advances). Any such allocation of losses and/or reimbursement amounts allocated to the Class A-S, B and C Regular Interests will be allocated between the Class A-S, B and/or C Certificates, as applicable, on the one hand, and the Class PEX Certificates, on the other hand, based on their respective percentage interests in the related Regular Interests.
Priority of Distributions
On each distribution date, the Certificate Administrator will apply the Available Distribution Amount for that distribution date in the following amounts and order of priority, in each case to the extent of the remaining portion of the Available Distribution Amount for that distribution date:
· | first, to make distributions of interest to the holders of the Class A-1, A-2, A-3, A-4, A-SB, X-A and X-B Certificates and the Class A-4FX Regular Interest,pro rata according to the respective amounts of interest entitlements with respect to those Classes as described under “—Interest Distributions” above; |
· | second, to make distributions of principal to the holders of the Class A-1, A-2, A-3, A-4 and A-SB Certificates and the Class A-4FX Regular Interest according to the respective portions of the Principal Distribution Amount for that distribution date that are allocated to those Classes as their current entitlements to principal as described under “—Principal Distributions” above; |
· | third, to reimburse the holders of the Class A-1, A-2, A-3, A-4 and A-SB Certificates and the Class A-4FX Regular Interest for any Realized Losses and Additional Trust Fund Expenses previously allocated to those Classes (as described under “—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses” below and excluding Trust Advisor Expenses other than Designated Trust Advisor Expenses) and for which reimbursement has not previously been made, which distributions are required to be madepro rata in accordance with the respective entitlements of those Classes; |
· | fourth, sequentially to the holders of the Class A-S, B and C Regular Interests (and, therefore, the Class A-S, B, C and/or PEX Certificates, as applicable) and the Class D, E, F and G Certificates, in that order (with no distribution to be made on any such Class until all the distributions described in this clause have been made to all other such Classes with an earlier distribution priority (if any)), first, to make a distribution of interest up to the amount of interest entitlements on that Class for that distribution date as described above under “—Interest Distributions”; then, to make a distribution of principal up to the portion of the Principal Distribution Amount for that distribution date that is allocated to that Class as described above under “—Principal Distributions”; and, finally, to reimburse any Realized Losses and Additional Trust Fund Expenses previously allocated to that Class (as described under “—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses” below and excluding Trust Advisor Expenses other than Designated Trust Advisor Expenses) and for which reimbursement has not previously been made; |
· | fifth, to reimburse the holders of the Class A-1, A-2, A-3, A-4 and A-SB Certificates and the Class A-4FX Regular Interest (on apro rata basis in accordance with their |
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respective entitlements) and then the Class A-S, B and C Regular Interests and the Class D, E, F and G Certificates, in that order, for any other amounts that may previously have been allocated to those Classes in reduction of their certificate principal balances and for which reimbursement has not previously been made; and |
· | finally, to the holders of the Class R Certificates any remaining portion of the Available Distribution Amount for that distribution date. |
Notwithstanding any contrary provision described above, if the Available Distribution Amount includes any recoveries of Trust Advisor Expenses (other than Designated Trust Advisor Expenses) from a source other than the proceeds of the Mortgage Loan, those recoveries will, prior to the distributions described above, be distributed to the holders of any Principal Balance Certificates that suffered write-offs in connection with Trust Advisor Expenses. Those distributions will be made to the holders of the Class A-1, A-2, A-3, A-4 and A-SB Certificates and the Class A-4FX Regular Interest (on apro rata basis based on the write-offs previously experienced by such Classes in respect of Trust Advisor Expenses (other than Designated Trust Advisor Expenses)) and then the Class A-S, B and C Regular Interests (and, therefore, the Class A-S, B, C and/or PEX Certificates, as applicable) and Class D Certificates, in that order, in each case up to the amount of the write-offs previously experienced by that Class in respect of Trust Advisor Expenses (other than Designated Trust Advisor Expenses).
“Available Distribution Amount” means, with respect to any distribution date, in general, the sum of—
1. | the amounts remitted by the Master Servicers to the Certificate Administrator for such distribution date, as described under “Description of the Offered Certificates—Distribution Account—Deposits” in this free writing prospectus, exclusive of any portion thereof that represents one or more of the following: |
· | Prepayment Premiums, Yield Maintenance Charges and/or Excess Interest (which are separately distributable on the Certificates as described in this free writing prospectus); and |
· | any amounts that may be withdrawn from the Distribution Account, as described under “Description of the Offered Certificates—Distribution Account—Withdrawals” in this free writing prospectus, for any reason other than distributions on the Certificates, including if such distribution date occurs during January, other than a leap year, or February of any year, the interest reserve amounts with respect to the Mortgage Loans that accrue interest on an Actual/360 Basis, which are to be deposited into the Interest Reserve Account; plus |
2. | if such distribution date occurs in March of any year (or, if the distribution date is the final distribution date and occurs in January (except in a leap year) or February of any year), the aggregate of the interest reserve amounts then on deposit in the Interest Reserve Account in respect of each Mortgage Loan that accrues interest on an Actual/360 Basis, which are to be deposited into the Distribution Account. |
Any portion of the Available Distribution Amount distributed to the Class A-S, B and C Regular Interests will be allocated between the Class A-S, B and/or C Certificates, as applicable, on the one hand, and the Class PEX Certificates, on the other hand, based on their respective percentage interests in the related Regular Interests.
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The Certificate Administrator will apply the Available Distribution Amount as described under “Description of the Offered Certificates—Distributions” in this free writing prospectus to distribute principal and accrued interest on the Certificates on each distribution date.
Distributions of Yield Maintenance Charges and Prepayment Premiums. If any Yield Maintenance Charge or Prepayment Premium is collected during any particular collection period with respect to any Mortgage Loan, then on the distribution date corresponding to that collection period, the Certificate Administrator will pay that Yield Maintenance Charge or Prepayment Premium (net of liquidation fees payable therefrom) in the following manner: (1) to each of the Class A-1, A-2, A-3, A-4, A-SB and D Certificates and Class A-4FX, A-S, B and C Regular Interests, the product of (a) such Yield Maintenance Charge or Prepayment Premium, (b) the related Base Interest Fraction for such Class or Regular Interest, and (c) a fraction, the numerator of which is equal to the amount of principal distributed to such Class or Regular Interest for that distribution date, and the denominator of which is the total amount of principal distributed to all Principal Balance Certificates (other than the Class A-4FL, A-4FX, A-S, B, C and PEX Certificates) and Regular Interests for that distribution date, and (2) to the Class X-A Certificates, the excess, if any, of (a) the product of (i) such Yield Maintenance Charge or Prepayment Premium and (ii) a fraction, the numerator of which is equal to the amount of principal distributed to the Class A-1, A-2, A-3, A-4, A-SB Certificates and Class A-4FX and A-S Regular Interests for that distribution date, and the denominator of which is the total amount of principal distributed to all Principal Balance Certificates (other than the Class A-4FL, A-4FX, A-S, B, C and PEX Certificates) and Regular Interests for that distribution date, over (b) the amount of such Yield Maintenance Charge or Prepayment Premium distributed to the Class A-1, A-2, A-3, A-4, A-SB Certificates and Class A-4FX and A-S Regular Interests as described above, and (3) to the Class X-B Certificates, any remaining such Yield Maintenance Charge or Prepayment Premium not distributed as described above.
“Base Interest Fraction” means, with respect to any principal prepayment of any Mortgage Loan that provides for the payment of a Yield Maintenance Charge or Prepayment Premium, and with respect to any Class of Principal Balance Certificates (other than the Class A-4FL, A-4FX, A-S, B, C and PEX Certificates) and the Class A-4FX, A-S, B and C Regular Interests, a fraction (A) the numerator of which is the greater of (x) zero and (y) the difference between (i) the pass-through rate on that Class or Regular Interest, and (ii) the applicable Discount Rate and (B) the denominator of which is the difference between (i) the mortgage interest rate on the related Mortgage Loan and (ii) the applicable Discount Rate;provided,however, that:
· | under no circumstances will the Base Interest Fraction be greater than one; |
· | if the Discount Rate referred to above is greater than or equal to the mortgage interest rate on the related Mortgage Loan and is greater than or equal to the pass-through rate on that Class, then the Base Interest Fraction will equal zero; and |
· | if the Discount Rate referred to above is greater than or equal to the mortgage interest rate on the related Mortgage Loan and is less than the pass-through rate on that Class, then the Base Interest Fraction will be equal to 1.0. |
“Discount Rate” means, with respect to any principal prepayment of any Mortgage Loan that provides for the payment of a Yield Maintenance Charge or Prepayment Premium—
· | if a Discount Rate was used in the calculation of the applicable Yield Maintenance Charge or Prepayment Premium pursuant to the terms of the Mortgage Loan or REO |
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Mortgage Loan, that Discount Rate, converted (if necessary) to a monthly equivalent yield, or |
· | if a Discount Rate was not used in the calculation of the applicable Yield Maintenance Charge or Prepayment Premium pursuant to the terms of the Mortgage Loan, the yield calculated by the linear interpolation of the yields, as reported in Federal Reserve Statistical Release H.15 (519)—Selected Interest Rates under the heading “U.S. government securities/treasury constant maturities” for the week ending prior to the date of the relevant prepayment (or deemed prepayment), of U.S. Treasury constant maturities with a maturity date, one longer and one shorter, most nearly approximating the maturity date of that Mortgage Loan or REO Mortgage Loan, such interpolated treasury yield converted to a monthly equivalent yield. |
For purposes of the immediately preceding bullet, the Certificate Administrator or the applicable Master Servicer will select a comparable publication as the source of the applicable yields of U.S. Treasury constant maturities if Federal Reserve Statistical Release H.15 is no longer published.
“Prepayment Premium” means, with respect to any Mortgage Loan, any premium, fee or other additional amount (other than a Yield Maintenance Charge) paid or payable, as the context requires, by a borrower in connection with a principal prepayment on, or other early collection of principal of, that Mortgage Loan or any successor REO Mortgage Loan with respect thereto (including any payoff of a Mortgage Loan by a mezzanine lender on behalf of the subject borrower if and as set forth in the related intercreditor agreement).
“Yield Maintenance Charge” means, with respect to any Mortgage Loan, any premium, fee or other additional amount paid or payable, as the context requires, by a borrower in connection with a principal prepayment on, or other early collection of principal of, a Mortgage Loan, calculated, in whole or in part, pursuant to a yield maintenance formula or otherwise pursuant to a formula that reflects the lost interest, including any specified amount or specified percentage of the amount prepaid which constitutes the minimum amount that such Yield Maintenance Charge may be.
Any portions of Prepayment Premiums and/or Yield Maintenance Charges distributed to the Class A-S, B and C Regular Interests will be allocated between the Class A-S, B and/or C Certificates, as applicable, on the one hand, and the Class PEX Certificates, on the other hand, based on their respective percentage interests in the related Regular Interests.
No Prepayment Premiums or Yield Maintenance Charges will be distributed to the holders of the Class E, F, G, R, V-1 or V-2 Certificates.
See “Risk Factors—Risks Related to the Mortgage Loans—Provisions Requiring Yield Maintenance Charges, Prepayment Premiums or Defeasance Provisions May Not Be Enforceable” and “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans—Voluntary Prepayment and Defeasance Provisions” in this free writing prospectus and “Description of Certificates—Distributions on the Certificates in Respect of Prepayment Premiums or in Respect of Equity Participations” in the accompanying prospectus.
Application of Mortgage Loan Collections. The Available Distribution Amount and Principal Distribution Amount for each distribution date will depend in part on how collections on the Mortgage Loans are allocated.
The Pooling and Servicing Agreement further provides that all amounts received by the Trust Fund in respect of or allocable to any particular Mortgage Loan, including any
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payments from borrowers, insurance proceeds, condemnation proceeds or liquidation proceeds (including any such collections on or in respect of Corrected Mortgage Loans), together with any other cash recoveries on and proceeds of such Mortgage Loan will be applied to amounts due and owing under the related mortgage note and mortgage (including for principal and accrued and unpaid interest) in accordance with the express provisions of the related Mortgage Loan documents and, in the absence of such express provisions or if and to the extent that such terms authorize the lender to use its discretion, must be applied:
first, as a recovery of any related and unreimbursed Servicing Advances (together with, without duplication, any unliquidated advances in respect of prior Servicing Advances and any prior Servicing Advances theretofore determined to constitute nonrecoverable servicing advances) and, if applicable, unpaid liquidation expenses;
second, as a recovery of accrued and unpaid interest (together with, without duplication, any unliquidated advances in respect of prior debt service advances of such interest and any debt service advances of interest theretofore determined to constitute nonrecoverable debt service advances) on such Mortgage Loan to, but not including, the end of the mortgage loan accrual period ending in the collection period in which the collection occurred, exclusive, however, of any portion of such accrued and unpaid interest that constitutes Default Interest or Excess Interest;provided,however, that in no event will any portion of any liquidation proceeds be applied under this clause second to any interest that previously accrued on a Mortgage Loan and constitutes an Appraisal-Reduced Interest Amount;
third, as a recovery of principal (together with, without duplication, any unliquidated advances in respect of prior debt service advances of such principal and any prior debt service advances of such principal theretofore determined to constitute nonrecoverable debt service advances) of such Mortgage Loan then due and owing, including by reason of acceleration of such Mortgage Loan following a default thereunder (or, if a liquidation event has occurred in respect of such Mortgage Loan, as a recovery of principal to the extent of its entire remaining unpaid principal balance);
fourth, as a recovery of any Appraisal-Reduced Interest Amounts that have occurred and are then existing with respect to such Mortgage Loan;
fifth, unless a liquidation event has occurred in respect of such Mortgage Loan, as a recovery of amounts to be currently applied to the payment of, or escrowed for the future payment of, real estate taxes, assessments, insurance premiums, ground rents (if applicable) and similar items;
sixth, unless a liquidation event has occurred in respect of such Mortgage Loan, as a recovery of reserve funds to the extent then required to be held in escrow;
seventh, as a recovery of any Default Interest and late payment charges then due and owing under such Mortgage Loan;
eighth, as a recovery of any Prepayment Premium or Yield Maintenance Charge then due and owing under such Mortgage Loan;
ninth, as a recovery of any assumption fees and modification fees then due and owing under such Mortgage Loan;
tenth, as a recovery of any other amounts then due and owing under such Mortgage Loan other than remaining unpaid principal or Excess Interest (and if both (x) fees that constitute additional master servicing compensation or additional special servicing
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compensation and (y) trust advisor consulting fees are due and owing, first, allocated to fees that constitute additional master servicing compensation or additional special servicing compensation, and then allocated to trust advisor consulting fees);
eleventh, as a recovery of any remaining principal of such Mortgage Loan to the extent of its entire remaining unpaid principal balance; and
twelfth, in the case of each ARD Loan after its Anticipated Repayment Date, as a recovery of accrued and unpaid Excess Interest on such ARD Loan.
provided that, in connection with any Mortgage Loan, payments or proceeds received from the related borrower with respect to any partial release (including pursuant to a condemnation) of a Mortgaged Property at a time when the loan-to-value ratio of the related Mortgage Loan exceeds 125% (based solely on the value of the real property and excluding personal property and going concern value, if any, unless otherwise permitted under the applicable REMIC rules as evidenced by an opinion of counsel provided to the Trustee) must be applied to reduce the principal balance of such Mortgage Loan in the manner permitted by the REMIC provisions of the Code.
In connection with each REO Property or with respect to a Non-Serviced Loan Combination, any interest in an REO property acquired with respect to such Non-Serviced Loan Combination, the Pooling and Servicing Agreement requires that all amounts received by the Trust Fund, exclusive of amounts to be applied to the payment of the costs of operating, managing, maintaining and disposing of such REO Property (or with respect to a Non-Serviced Loan Combination, any interest in REO Property acquired with respect to such Non-Serviced Loan Combination), be treated:
first, as a recovery of any related and unreimbursed Servicing Advances (together with any unliquidated advances in respect of prior Servicing Advances and any prior Servicing Advances theretofore determined to constitute nonrecoverable servicing advances) and, if applicable, unpaid liquidation expenses;
second, as a recovery of accrued and unpaid interest (together with any unliquidated advances in respect of prior debt service advances of such interest and any debt service advances of interest theretofore determined to constitute nonrecoverable debt service advances) on the related REO Mortgage Loan to, but not including, the end of the mortgage loan accrual period ending in the collection period of receipt by or on behalf of the Trust Fund, exclusive, however, of any portion of such accrued and unpaid interest that constitutes Default Interest or Excess Interest;provided,however, that in no event will any portion of any liquidation proceeds be applied under this clause second to any interest that previously accrued on a Mortgage Loan and constitutes an Appraisal-Reduced Interest Amount;
third, as a recovery of principal (together with any unliquidated advances in respect of prior debt service advances of such principal and any debt service advances of principal theretofore determined to constitute nonrecoverable debt service advances) of the related REO Mortgage Loan to the extent of its entire unpaid principal balance;
fourth, as a recovery of any Appraisal-Reduced Interest Amounts that have occurred and are then existing with respect to such Mortgage Loan;
fifth, as a recovery of any Default Interest and late payment charges deemed to be due and owing in respect of the related REO Mortgage Loan;
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sixth, as a recovery of any Prepayment Premium or Yield Maintenance Charge deemed to be due and owing in respect of the related REO Mortgage Loan;
seventh, as a recovery of any other amounts deemed to be due and owing in respect of the related REO Mortgage Loan (other than any Excess Interest) (and if both (x) fees that constitute additional master servicing compensation or additional special servicing compensation and (y) trust advisor consulting fees are due and owing, first, allocated to fees that constitute additional master servicing compensation or additional special servicing compensation, and then allocated to trust advisor consulting fees); and
eighth, in the case of an REO Mortgage Loan that relates to an ARD Loan after its Anticipated Repayment Date, as a recovery of accrued and unpaid Excess Interest on such REO Mortgage Loan.
Any payments, collections and recoveries related to a Non-Serviced Loan Combination are required to be allocated in accordance with the terms and conditions of the applicable pooling and servicing agreement and/or the related intercreditor agreement. See “Servicing of the Mortgage Loans and Administration of the Trust Fund” in this free writing prospectus.
As of any date of determination, an “Appraisal-Reduced Interest Amount” with respect to a Mortgage Loan or REO Mortgage Loan is the amount of any reduction in a debt service advance on the related Mortgage Loan that results from an Appraisal Reduction Amount as described below under “—Advances of Delinquent Monthly Debt Service Payments”.
Excess Interest. On each distribution date, the Certificate Administrator is required to distribute any Excess Interest received with respect to the Mortgage Moan identified on Annex A-1 to this free writing prospectus as Walgreens – Milwaukee and the Mortgage Loan identified on Annex A-1 to this free writing prospectus as Haggen Food & Pharmacy during the one-month period ending on the related determination date to the holders of the Class V-1 and V-2 Certificates, respectively.
Treatment of REO Properties
Notwithstanding that any Mortgaged Property or an interest therein may be acquired as part of the Trust Fund through foreclosure, deed-in-lieu of foreclosure or otherwise, the related Mortgage Loan will be treated as having remained outstanding, until the REO Property is liquidated, for purposes of determining—
· | distributions on the Certificates, |
· | allocations of Realized Losses and Additional Trust Fund Expenses to the Certificates, and |
· | the amount of all fees payable to the applicable Master Servicer, the applicable Special Servicer, the Certificate Administrator and the Trustee under the Pooling and Servicing Agreement. |
In connection with the foregoing, the related Mortgage Loan will be taken into account when determining the WAC Rate and the Principal Distribution Amount for each distribution date.
Operating revenues and other proceeds from an REO Property will be applied—
· | first, to pay – or to reimburse the applicable Master Servicer, the applicable Special Servicer, the Certificate Administrator and/or the Trustee for the payment of – any |
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taxes, fees, costs and expenses incurred in connection with the operation and disposition of the REO Property, and
· | thereafter, as collections of principal, interest and other amounts that would have been due on the related Mortgage Loan. |
To the extent described under “—Advances of Delinquent Monthly Debt Service Payments” below, the applicable Master Servicer or the Trustee, as applicable, will be required to advance delinquent monthly debt service payments with respect to each Mortgage Loan as to which the corresponding Mortgaged Property has become an REO Property, in all cases as if the Mortgage Loan had remained outstanding.
Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses
As a result of Realized Losses and Additional Trust Fund Expenses, the total Stated Principal Balance of the Mortgage Loans may decline below the aggregate principal balance of the Certificates. If this occurs following the distributions made to the Certificateholders on any distribution date, then, except to the extent the resulting mismatch exists because of the reimbursement of advances on worked-out loans from advances and collections of principal on the Mortgage Pool (see “—Advances of Delinquent Monthly Debt Service Payments” below and “Servicing of the Mortgage Loans and Administration of the Trust Fund—Servicing and Other Compensation and Payment of Expenses”), the respective aggregate principal balances of the Principal Balance Certificates (other than the Class A-4FL, A-4FX, A-S, B, C and PEX Certificates), and the Class A-4FX, A-S, B and C Regular Interests (and, therefore, the Class A-4FL, A-4FX, A-S, B, C and PEX Certificates, as applicable) are to be sequentially reduced in the following order, until the aggregate principal balance of those Classes of Certificates equals the total Stated Principal Balance of the Mortgage Loans that will be outstanding immediately following that distribution date.
Order of Allocation | Class |
1st | G |
2nd | F |
3rd | E |
4th | D |
5th | Class C Regular Interest (and, therefore, the Class C Certificates and the Class C component of the Class PEX Certificates) |
6th | Class B Regular Interest (and, therefore, the Class B Certificates and the Class B component of the Class PEX Certificates) |
7th | Class A-S Regular Interest (and, therefore, the Class A-S Certificates and the Class A-S component of the Class PEX Certificates) |
8th | Class A-1, A-2, A-3, A-4 and A-SB Certificates and the Class A-4FX Regular Interest (and, therefore, the Class A-4FL and A-4FX Certificates), pro rata, based on their total outstanding principal balances |
Any reduction of the principal balances of the Class A-1, A-2, A-3, A-4 and A-SB Certificates and the Class A-4FX Regular Interest (and, therefore, the Class A-4FL and A-4FX Certificates) will be made on apro rata basis in accordance with the relative sizes of those principal balances at the time of the reduction. Any reduction of the principal balance
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of the Class A-4FX Regular Interest will be allocated between the Class A-4FL and A-4FX Certificates based on their respective percentage interests in the Class A-4FX Regular Interest. Any reduction of the principal balance of the Class A-S, B or C Regular Interest will be allocated between the Class A-S, B and/or C Certificates, as applicable, on the one hand, and the Class PEX Certificates, on the other hand, based on their respective percentage interests in the related Regular Interests.
The above-described reductions in the aggregate principal balances of the respective Classes of the Certificates identified in the foregoing table will represent an allocation of the Realized Losses and/or Additional Trust Fund Expenses that caused the particular mismatch in balances between the Mortgage Loans and those Classes. In general, certain Additional Trust Fund Expenses will result in a shortfall in the distribution of interest on one or more subordinate Classes of Certificates. However, unless and until collections of principal on the Mortgage Loans are diverted to cover that interest shortfall, such Additional Trust Fund Expense will not result in a mismatch in balances between the Mortgage Loans and the Certificates.
The Realized Loss, if any, in connection with the liquidation of a Defaulted Mortgage Loan, or related REO Property, held by the Trust Fund, will be an amount generally equal to the excess, if any, of:
· | the outstanding principal balance of the Mortgage Loan as of the commencement of the collection period in which the final recovery determination or final payment was made, plus, without duplication— |
1. | all accrued and unpaid interest on the Mortgage Loan (excluding any Default Interest and Excess Interest) to, but not including, the Due Date in such collection period, and |
2. | all related unreimbursed Servicing Advances and unpaid liquidation expenses and certain special servicing fees, liquidation fees and/or workout fees incurred on the Mortgage Loan not previously reflected as a Realized Loss, and interest on advances made in respect of the Mortgage Loan, over |
· | all payments and proceeds, if any, received by the trust in respect of that Mortgage Loan during such collection period. |
“Realized Losses” means losses on or with respect to the Mortgage Loans arising from the inability of the applicable Master Servicer and/or the applicable Special Servicer to collect all amounts due and owing under the Mortgage Loans, including by reason of the fraud or bankruptcy of a borrower or, to the extent not covered by insurance, a casualty of any nature at a Mortgaged Property, as and to the extent described above.
If any of the debt due under a Mortgage Loan is forgiven, whether in connection with a modification, waiver or amendment granted or agreed to by the applicable Master Servicer, the applicable Special Servicer or any other relevant party or in connection with the bankruptcy, insolvency or similar proceeding involving the related borrower, the amount forgiven, other than Default Interest, also will be treated as a Realized Loss (but the principal portion of the debt that is forgiven will generally be recognized as a Realized Loss on the distribution date that occurs after the collection period in which the forgiveness occurs and the interest portion of the debt that is forgiven will eventually be recognized as a Realized Loss over time).
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Any reimbursements of advances determined to be nonrecoverable and advance interest thereon, that are made in any collection period from the principal portion of debt service advances and collections or other receipts of principal on the Mortgage Pool that would otherwise be included in the Principal Distribution Amount for the related distribution date (see “—Advances of Delinquent Monthly Debt Service Payments” below and “Servicing of the Mortgage Loans and Administration of the Trust Fund—Servicing and Other Compensation and Payment of Expenses”) will create a deficit (or increase an otherwise-existing deficit) between the aggregate Stated Principal Balance of the Mortgage Pool and the aggregate principal balance of the Certificates on the succeeding distribution date. The related reimbursements and payments made during any collection period will therefore result in the allocation of those amounts as Realized Losses (in reverse sequential order in accordance with the loss allocation rules described above) to reduce principal balances of the Principal Balance Certificates (other than the Class A-4FL, A-4FX, A-S, B, C and PEX Certificates), and the Class A-4FX, A-S, B and C Regular Interests (and, therefore, the Class A-4FL, A-4FX, A-S, B, C and/or PEX Certificates, as applicable) on the distribution date for that collection period. However, if the Principal Distribution Amount for any distribution date includes any collections of amounts that (i) were previously determined to constitute nonrecoverable advances, (ii) were reimbursed to a Master Servicer or the Trustee from advances or collections in respect of principal thereby resulting in a deficit described above and (iii) were subsequently recovered, then the principal balances of the Certificates will, in general, be restored (in sequential order of distribution priority, with this restoration occurring on apro rata basis as between those Classes that arepari passu with each other in respect of loss allocations) to the extent of the lesser of such amount and the amount of Realized Losses previously allocated thereto.
The reimbursement of advances on worked-out loans from advances or collections of principal on the Mortgage Pool (see “—Advances of Delinquent Monthly Debt Service Payments” below and “Servicing of the Mortgage Loans and Administration of the Trust Fund—Servicing and Other Compensation and Payment of Expenses”) during any collection period will create a deficit (or increase an otherwise-existing deficit) between the aggregate Stated Principal Balance of the Mortgage Pool and the aggregate principal balance of the Certificates on the succeeding distribution date but there will not be any allocation of that deficit to reduce the principal balances of the Principal Balance Certificates on such distribution date (although an allocation may subsequently be made if the amount reimbursed to a Master Servicer, the applicable Special Servicer or the Trustee ultimately is deemed to be nonrecoverable from the proceeds of the Mortgage Loan).
With respect to any Non-Serviced Loan Combination, the related master servicer (the “Other Master Servicer”) will be obligated to make servicing advances with respect to such Non-Serviced Loan Combination and will be entitled to reimbursement for such servicing advances pursuant to provisions that are substantially similar, but not necessarily identical, to the provisions set forth above. In addition, if any such servicing advance is determined to be a nonrecoverable advance under the related pooling and servicing agreement, then the Other Master Servicer (or the trustee under such agreement), as applicable, will be entitled to reimbursement from general collections on the Mortgage Loans in this securitization for thepro rata portion of such nonrecoverable advances allocable to the related Non-Serviced Pari Passu Mortgage Loan pursuant to the terms of the related intercreditor agreement.
“Additional Trust Fund Expense” means an expense of the Trust Fund that—
· | arises out of a default on a Mortgage Loan or an otherwise unanticipated event, |
· | is not included in the calculation of a Realized Loss, |
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· | is not covered by a Servicing Advance or a corresponding collection from the related borrower, and |
· | is not covered by late payment charges or Default Interest collected on the Mortgage Loans (to the extent such coverage is provided for in the Pooling and Servicing Agreement). |
The following items are some examples (but not a complete list) of Additional Trust Fund Expenses:
· | any special servicing fees, workout fees and liquidation fees paid to the applicable Special Servicer that are not otherwise allocated as a Realized Loss; |
· | any interest paid to a Master Servicer, a Special Servicer or the Trustee with respect to unreimbursed advances (except to the extent that Default Interest and/or late payment charges are used to pay interest on advances as described under “—Advances of Delinquent Monthly Debt Service Payments” below and under “Servicing of the Mortgage Loans and Administration of the Trust Fund—Servicing and Other Compensation and Payment of Expenses—Payment of Servicing Expenses; Servicing Advances” in this free writing prospectus and “Description of the Pooling and Servicing Agreements—Servicing Compensation and Payment of Expenses” in the accompanying prospectus); |
· | the cost of various opinions of counsel required or permitted to be obtained in connection with the servicing of the Mortgage Loans and the administration of the other assets of the Trust Fund; |
· | any unanticipated, non-mortgage loan specific expenses of the Trust Fund, including— |
1. | any reimbursements and indemnification to the Certificate Administrator, the tax administrator, the certificate registrar, the Custodian, the Trustee and certain related persons, as described under “—The Trustee—Matters Regarding the Trustee” below and “Transaction Parties—The Certificate Administrator, Tax Administrator, Certificate Registrar and Custodian” above; |
2. | any reimbursements and indemnification to the Master Servicers, the Special Servicers, the Trust Advisor and us as described under “Servicing of the Mortgage Loans and Administration of the Trust Fund—Certain Matters Regarding the Master Servicers, the Special Servicers, the Trust Advisor and the Depositor” in this free writing prospectus, or to the Subordinate Class Representative as described under “Servicing of the Mortgage Loans and Administration of the Trust Fund—The Majority Subordinate Certificateholder and the Subordinate Class Representative” in this free writing prospectus; and |
3. | any federal, state and local taxes, and tax-related expenses payable out of assets of the Trust Fund, as described under “Material Federal Income Tax Consequences—REMICs—Taxation of Owners of REMIC Residual Certificates—Prohibited Transactions Tax and Other Taxes” in the accompanying prospectus; |
· | rating agency fees, other than on-going surveillance fees, and amounts paid as indemnities to the Rating Agencies for Rating Agency Confirmations, that cannot be recovered from the borrower and that are not paid by any party to the Pooling and |
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Servicing Agreement or by the related Mortgage Loan Seller pursuant to the Mortgage Loan Purchase Agreement to which it is a party; |
· | any amounts expended on behalf of the Trust Fund to remediate an adverse environmental condition at any Mortgaged Property securing a Mortgage Loan that comes into and continues in default and as to which no satisfactory arrangements can be made for collection of delinquent payments, as described under “Description of the Pooling and Servicing Agreements—Realization upon Defaulted Mortgage Loans” in the accompanying prospectus; and |
· | with respect to any Non-Serviced Pari Passu Mortgage Loan, any additional trust fund expenses of the issuing entity under the related pooling and servicing agreement will be paid out of collections on, and other proceeds of, such Non-Serviced Pari Passu Mortgage Loan and the related Non-Serviced Pari Passu Companion Loan, thereby potentially resulting in a loss to the Trust Fund in the same manner as the Additional Trust Fund Expenses described above. For further information relating to the allocation of expenses, losses and shortfalls relating to the Non-Serviced Loan Combinations, see “Description of the Mortgage Pool—Loan Combinations” in this free writing prospectus. |
Notwithstanding the provisions described above, any Realized Losses or Additional Trust Fund Expenses in the form of Trust Advisor Expenses, other than Designated Trust Advisor Expenses, will be allocated as described under “—Reductions of Interest Entitlements and the Principal Distribution Amount in Connection with Certain Trust Advisor Expenses” below. Designated Trust Advisor Expenses will be allocated and borne by the Certificateholders in generally the same manner as other Realized Losses or Additional Trust Fund Expenses.
Reductions of Interest Entitlements and the Principal Distribution Amount in Connection with Certain Trust Advisor Expenses
The Trust Advisor, and any applicable other trust advisor or operating advisor with respect to any Non-Serviced Pari Passu Mortgage Loan (each, an “Other Trust Advisor”), will be entitled to indemnification or reimbursement in respect of its obligations under the Pooling and Servicing Agreement as described under “Servicing of the Mortgage Loans and Administration of the Trust Fund—Certain Matters Regarding the Master Servicers, the Special Servicers, the Trust Advisor and the Depositor” in this free writing prospectus. We refer to expenses incurred by the Trust Advisor for which it is entitled to indemnification or reimbursement, or, with respect to any such Non-Serviced Pari Passu Mortgage Loan, the Trust Fund’spro rata share of any expenses incurred by the Other Trust Advisor for which it is entitled to indemnification or reimbursement under the applicable Other Pooling and Servicing Agreement as “Trust Advisor Expenses”. The Trust Advisor will be entitled to reimbursement of its indemnified expenses or reimbursement of certain expenses to the extent provided in the Pooling and Servicing Agreement on or about each distribution date, except that the amount reimbursed in respect of Trust Advisor Expenses, other than Designated Trust Advisor Expenses, on each distribution date must not exceed the sum of:
· | the interest otherwise distributable on the Class B and C Regular Interests (and, therefore, on the Class B, C and/or PEX Certificates, as applicable) and Class D Certificates on that distribution date, and |
· | and the portion of the Principal Distribution Amount that would otherwise be paid on the Class A-1, A-2, A-3, A-4, A-SB and D Certificates and the Class A-4FX, A-S, B and C Regular Interests (and, therefore, the Class A-4FL, A-4FX, A-S, B, C and PEX Certificates, as applicable) on that distribution date. |
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Immediately prior to the distributions to be made to the Certificateholders on each distribution date, the Certificate Administrator is required to allocate the Trust Advisor Expenses, other than Designated Trust Advisor Expenses, reimbursed on that date to reduce the interest otherwise distributable on such distribution date on the Class D Certificates and the Class C and B Regular Interests (and, therefore, on the Class C and B Certificates and the Class C and B components of the Class PEX Certificates, as applicable), in that order, in each case until the interest otherwise distributable on that Class on such distribution date has been reduced to zero. No such Trust Advisor Expenses will be allocated to reduce the interest distributable on the Class A-1, A-2, A-3, A-4, A-SB, X-A, X-B, F or G Certificates or the Class A-4FX or A-S Regular Interest (and, therefore, the Class A-4FL, A-4FX and A-S Certificates and the Class A-S component of the Class PEX Certificates, as applicable) on any distribution date. Any remaining unallocated portion of such Trust Advisor Expenses will constitute “Excess Trust Advisor Expenses”, which will be allocated to reduce the Principal Distribution Amount (or any lesser portion thereof equal to the aggregate outstanding principal balance of the Class A-1, A-2, A-3, A-4, A-SB and D Certificates, and the Class A-4FX, A-S, B and C Regular Interests (and, therefore, the Class A-4FL, A-4FX, A-S, B, C and PEX Certificates, as applicable)) for the applicable distribution date. Such reduction will also result in a write-off of the principal balances of the Class D Certificates and the Class C, B and A-S Regular Interests, in that order, in each case until the principal balance of that Class has been reduced to zero. Thereafter, the Certificate Administrator will be required to allocate any remaining amount of such Trust Advisor Expenses among the Class A-1, A-2, A-3, A-4 and A-SB Certificates and the Class A-4FX Regular Interest,pro rata (based upon their respective principal balances), until the aggregate principal balance of the Class A-1, A-2, A-3, A-4 and A-SB Certificates and the Class A-4FX Regular Interest has been reduced to zero.
Any Trust Advisor Expenses allocated to a Class of Certificates as described above will be allocated among the respective Certificates of such Class in proportion to the percentage interests evidenced by the respective Certificates.
Any Trust Advisor Expenses (other than Designated Trust Advisor Expenses) that remain unreimbursed after giving effect to reimbursement and allocation provisions described above on any distribution date will not be reimbursed to the Trust Advisor on that distribution date and will be carried forward to and be reimbursable on succeeding distribution dates, subject to the same provisions, until the Trust Advisor is reimbursed for those Trust Advisor Expenses.
Trust Advisor Expenses other than Designated Trust Advisor Expenses will not reduce the amount of any principal or interest distributable on the Control-Eligible Certificates.
“Designated Trust Advisor Expenses” consist of any Trust Advisor Expenses for which the Trust Advisor is indemnified under the Pooling and Servicing Agreement or for which the Other Trust Advisor with respect to a Non-Serviced Loan Combination is entitled to indemnification under the related intercreditor agreement (see “Servicing of the Mortgage Loans and Administration of the Trust Fund—Certain Matters Regarding the Master Servicers, the Special Servicers, the Trust Advisor and the Depositor” in this free writing prospectus) and arise from any legal action that is pending or threatened against the Trust Advisor at the time of its discharge, termination or resignation under the Pooling and Servicing Agreement (see “Servicing of the Mortgage Loans and Administration of the Trust Fund—Termination, Discharge and Resignation of the Trust Advisor” in this free writing prospectus).
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Advances of Delinquent Monthly Debt Service Payments
Each Master Servicer will be required to make, for each distribution date, a total amount of advances of principal and/or interest generally equal to all scheduled monthly debt service payments on the Mortgage Loans for which it acts as Master Servicer, other than balloon payments, Excess Interest and Default Interest, and assumed monthly debt service payments on Mortgage Loans (as described below), in each case net of master servicing fees and, with respect to any Non-Serviced Pari Passu Mortgage Loan, the master or similar servicing and administrative fees payable to the Other Master Servicer or other parties under the applicable Other Pooling and Servicing Agreement, that—
· | were due or deemed due, as the case may be, during the collection period related to the subject distribution date, and |
· | were not paid by or on behalf of the respective borrowers or otherwise collected as of the close of business on the last day of the related collection period. |
A monthly debt service payment will be assumed to be due with respect to each Mortgage Loan as to which:
· | the related Mortgage Loan is delinquent with respect to its balloon payment beyond the end of the collection period in which its maturity date occurs and as to which no arrangements have been agreed to for the collection of the delinquent amounts, including an extension of maturity; or |
· | the corresponding Mortgaged Property has become an REO Property. |
The assumed monthly debt service payment deemed due on any Mortgage Loan described in the prior sentence that is delinquent as to its balloon payment will equal, for its maturity date and for each successive Due Date that it remains outstanding and part of the Trust Fund, the monthly debt service payment that would have been due on the Mortgage Loan on the relevant date if the related balloon payment had not come due and the Mortgage Loan had, instead, continued to amortize (if amortization was required) and accrue interest according to its terms in effect prior to that maturity date. The assumed monthly debt service payment deemed due on any Mortgage Loan described in the second preceding sentence as to which the related Mortgaged Property has become an REO Property, will equal, for each Due Date that the REO Property or any portion thereof or interest therein remains part of the Trust Fund, the monthly debt service payment or, in the case of a Mortgage Loan delinquent with respect to its balloon payment, the assumed monthly debt service payment due or deemed due on the last Due Date prior to the acquisition of that REO Property. In addition, none of the Master Servicers or the Trustee will make any monthly debt service advance with respect to any amounts due to be paid by the swap counterparty for distribution to the Class A-4FL Certificates or any amounts due on a Pari Passu Companion Loan.
Notwithstanding the foregoing, if it is determined that an Appraisal Reduction Amount exists with respect to any Mortgage Loan, then the applicable Master Servicer will reduce the interest portion, but not the principal portion, of each monthly debt service advance that it must make with respect to that Mortgage Loan during the period that the Appraisal Reduction Amount exists. The interest portion of any monthly debt service advance required to be made with respect to any Mortgage Loan as to which there exists an Appraisal Reduction Amount, will equal the product of—
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· | the amount of the interest portion of that monthly debt service advance that would otherwise be required to be made for the subject distribution date without regard to this sentence and the prior sentence,multiplied by |
· | a fraction— |
1. | the numerator of which is equal to the Stated Principal Balance of the Mortgage Loan, net of the Appraisal Reduction Amount, and |
2. | the denominator of which is equal to the Stated Principal Balance of the Mortgage Loan. |
Each Non-Serviced Pari Passu Mortgage Loan will be subject to provisions in the applicable Other Pooling and Servicing Agreement relating to the calculation of appraisal reductions that are substantially similar, but not necessarily identical, to the provisions set forth above. The existence of an appraisal reduction in respect of a Non-Serviced Pari Passu Mortgage Loan will proportionately reduce the applicable Master Servicer’s or the Trustee’s, as the case may be, obligation to make monthly debt service advances on such Non-Serviced Pari Passu Mortgage Loan and will generally have the effect of reducing the amount otherwise available for current distributions to the holders of the most subordinate Class or Classes of Certificates. With respect to each Non-Serviced Pari Passu Mortgage Loan, it is expected that any appraisal reduction amount on the related Loan Combination will be allocated or deemed allocated,pro rata, to the holder of such Pari Passu Mortgage Loan and the holder of the related Pari Passu Companion Loan.
With respect to any distribution date, the applicable Master Servicer will be required to make monthly debt service advances either out of its own funds or, subject to replacement as and to the extent provided in the Pooling and Servicing Agreement, out of funds held in its Collection Account that are not required to be paid on the Certificates on that distribution date.
If the applicable Master Servicer fails to make a required monthly debt service advance and the Trustee has been notified of same, the Trustee will be obligated to make that advance, subject to a determination of recoverability.
The applicable Master Servicer and the Trustee will each be entitled to recover any monthly debt service advance made by it out of its own funds from collections on the Mortgage Loan as to which the advance was made. Neither the applicable Master Servicer nor the Trustee will be obligated to make any monthly debt service advance that it or the applicable Special Servicer determines, subject to the Servicing Standard, or, with respect to the Trustee, in its reasonable, good faith judgment, would not ultimately be recoverable (together with interest on the advance) out of collections on the related Mortgage Loan. If the applicable Master Servicer or the Trustee makes any monthly debt service advance that it or the applicable Special Servicer subsequently determines, subject to the Servicing Standard, or, with respect to the Trustee, in its reasonable, good faith judgment, will not be recoverable out of collections on the related Mortgage Loan, it may obtain reimbursement for that advance, together with interest accrued on the advance as described in the fourth succeeding paragraph, out of general collections on the Mortgage Loans and any REO Properties in the Trust Fund on deposit in the Collection Accounts from time to time. In making such recoverability determination, such person will be entitled to consider (among other things) the obligations of the borrower under the terms of the related Mortgage Loan as it may have been modified, to consider (among other things) the related Mortgaged Properties in their “as-is” or then-current conditions and occupancies, as modified by such party’s assumptions regarding the possibility and effects of future adverse change with
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respect to such Mortgaged Properties, to estimate and consider (among other things) future expenses and to estimate and consider (among other things) the timing of recoveries. In addition, any such person may update or change its recoverability determinations at any time and may obtain from the applicable Special Servicer any analysis, appraisals or market value estimates or other information in the possession of such Special Servicer for such purposes. The Trustee will be entitled to conclusively rely on any recoverability determination made by the applicable Master Servicer or the applicable Special Servicer. The applicable Master Servicer and the applicable Special Servicer will be entitled to conclusively rely on any determination of nonrecoverability that may have been made by the other such party with respect to a particular monthly debt service advance for any Mortgage Loan or REO Property. With respect to any Non-Serviced Pari Passu Mortgage Loan and the applicable Master Servicer’s and Trustee’s obligation to make monthly debt service advances, each of the applicable Master Servicer, the applicable Special Servicer and the Trustee may make its own independent determination as to nonrecoverability notwithstanding any determination of nonrecoverability by the Other Master Servicer or Other Trustee.
Any monthly debt service advance, with interest, that has been determined to be a nonrecoverable advance with respect to the Mortgage Pool will be reimbursable from the Collection Accounts in the collection period in which the nonrecoverability determination is made and in subsequent collection periods. Any reimbursement of a nonrecoverable monthly debt service advance, including interest accrued thereon, will be made first from the principal portion of current debt service advances and payments and other collections of principal on the Mortgage Pool (thereby reducing the Principal Distribution Amount otherwise distributable on the Principal Balance Certificates (other than the Class A-4FL, A-4FX, A-S, B, C and PEX Certificates) and the Class A-4FX, A-S, B and C Regular Interests (and, therefore, the Class A-4FL, A-4FX, A-S, B, C and PEX Certificates, as applicable) on the related distribution date) prior to the application of any other general collections on the Mortgage Pool against such reimbursement. To the extent that the amount representing principal is insufficient to fully reimburse the party entitled to the reimbursement, then, such party may elect at its sole option and in its sole discretion to defer the reimbursement of some or all of the portion that exceeds such amount allocable to principal (in which case interest will continue to accrue on the unreimbursed portion of the advance) for a time as required to reimburse the excess portion from principal for consecutive periods up to twelve months (provided that any such deferral exceeding six months will require, during the occurrence and continuance of any Subordinate Control Period, the consent of the Subordinate Class Representative) and any election to so defer will be deemed to be in accordance with the Servicing Standard;provided that no such deferral will occur at any time to the extent that amounts otherwise distributable as principal are available for such reimbursement. To the extent that the reimbursement is made from principal collections, the Principal Distribution Amount otherwise distributable on the Principal Balance Certificates (other than the Class A-4FL, A-4FX, A-S, B, C and PEX Certificates) and the Class A-4FX, A-S, B and C Regular Interests (and, therefore, the Class A-4FL, A-4FX, A-S, B, C and PEX Certificates, as applicable) on the related distribution date will be reduced and a Realized Loss will be allocated (in reverse sequential order in accordance with the loss allocation rules described above under “—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses”) to reduce the aggregate principal balance of the Certificates on that distribution date. To the extent that reimbursement is made from other collections, the funds available to make distributions to Certificateholders of their interest distribution amounts on the related distribution date may be reduced, causing a shortfall in interest distributions on the Offered Certificates. The applicable Master Servicer or the Trustee, as applicable, must give the Rating Agencies at least 15 days’ notice (in accordance with the procedures regarding Rule 17g-5 under the
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Exchange Act (“Rule 17g-5”) set forth in the Pooling and Servicing Agreement) prior to any reimbursement to it of nonrecoverable advances from amounts in any Collection Account or the Distribution Account, as applicable, allocable to interest on the Mortgage Loans unless (1) that party determines in its sole discretion that waiting 15 days after such a notice could jeopardize its ability to recover such nonrecoverable advances, (2) changed circumstances or new or different information becomes known to that party that could affect or cause a determination of whether any advance is a nonrecoverable advance or whether to defer reimbursement of a nonrecoverable advance or the determination in clause (1) above, or (3) in the case of a Master Servicer, it has not timely received from the Trustee information requested by such Master Servicer to consider in determining whether to defer reimbursement of a nonrecoverable advance. If any of the circumstances described in clause (1), clause (2) or clause (3) above apply, the applicable Master Servicer or Trustee, as applicable, must give each Rating Agency notice (in accordance with the procedures regarding Rule 17g-5 set forth in the Pooling and Servicing Agreement) of the anticipated reimbursement as soon as reasonably practicable.
Additionally, in the event that any monthly debt service advance (including any interest accrued thereon) with respect to a Mortgage Loan remains unreimbursed following the time that such Mortgage Loan is modified while a Specially Serviced Mortgage Loan, the applicable Master Servicer or the Trustee will be entitled to reimbursement for that advance (even though that advance has not been determined to be nonrecoverable), on a monthly basis, out of — but solely out of — the principal portion of debt service advances and payments and other collections of principal on all the Mortgage Loans after the application of those principal payments and collections to reimburse any party for nonrecoverable debt service advances (as described in the prior paragraph) and/or nonrecoverable servicing advances as described under “Servicing of the Mortgage Loans and Administration of the Trust Fund—Servicing and Other Compensation and Payment of Expenses” in this free writing prospectus (thereby reducing the Principal Distribution Amount otherwise distributable on the Principal Balance Certificates (other than the Class A-4FL, A-4FX, A-S, B, C and PEX Certificates) and the Class A-4FX, A-S, B and C Regular Interests on the related distribution date) or collections on the related Mortgage Loan intended as a reimbursement of such advance. If any such advance is not reimbursed in whole on any distribution date due to insufficient advances and collections of principal in respect of the related collection period, then the portion of that advance which remains unreimbursed will be carried over (with interest thereon continuing to accrue) for reimbursement on the following distribution date (to the extent of principal collections available for that purpose). If any such advance, or any portion of any such advance, is determined, at any time during this reimbursement process, to be ultimately nonrecoverable out of collections on the related Mortgage Loan, or is determined, at any time during the reimbursement process, to be ultimately nonrecoverable out of the principal portion of debt service advances and payments and other collections of principal on all the Mortgage Loans, then the applicable Master Servicer or the Trustee, as applicable, will be entitled to immediate reimbursement as a nonrecoverable advance in an amount equal to the portion of that advance that remains outstanding, plus accrued interest (under the provisions and subject to the conditions described in the preceding paragraph). The reimbursement of advances on worked-out loans from advances and collections of principal as described in the first sentence of this paragraph during any collection period will result in a reduction of the Principal Distribution Amount otherwise distributable on the Principal Balance Certificates (other than the Class A-4FL, A-4FX, A-S, B, C and PEX Certificates) and the Class A-4FX, A-S, B and C Regular Interests on the related distribution date but will not result in the allocation of a Realized Loss on such distribution date (although a Realized Loss may subsequently arise if the amount reimbursed to the applicable Master Servicer or the
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Trustee ultimately is deemed to be nonrecoverable from the proceeds of the Mortgage Loan).
The applicable Master Servicer and the Trustee will generally each be entitled to receive interest on monthly debt service advances made by that party out of its own funds. However, that interest will commence accruing on any monthly debt service advance made in respect of a scheduled monthly debt service payment only on the date on which any applicable grace period for that payment expires. Interest will accrue on the amount of each monthly debt service advance for so long as that advance is outstanding, at an annual rate equal to the prime rate as published in the “Money Rates” section ofThe Wall Street Journal, as that prime rate may change from time to time.
Interest accrued with respect to any monthly debt service advance will generally be payable at any time on or after the date when the advance is reimbursed, in which case the payment will be made out of general collections on the Mortgage Loans and any REO Properties on deposit in the Collection Accounts thereby reducing amounts available for distribution on the Certificates. Under some circumstances, Default Interest and/or late payment charges may be used to pay interest on advances prior to making payment from those general collections, but prospective investors should assume that the available amounts of Default Interest and late payment charges will bede minimis. See “Servicing of the Mortgage Loans and Administration of the Trust Fund—Servicing and Other Compensation and Payment of Expenses—Additional Servicing Compensation” in this free writing prospectus.
For information regarding procedures for reimbursement of Servicing Advances together with interest thereon, see “Servicing of the Mortgage Loans and Administration of the Trust Fund—Servicing and Other Compensation and Payment of Expenses—Payment of Servicing Expenses; Servicing Advances” below.
Fees and Expenses
The following table summarizes the related fees and expenses to be paid from the assets of the Trust Fund and the recipient, source and frequency of payments for those fees and expenses. Except as described in the column captioned “Source of Payment”, these fees and expenses will be generally distributed prior to any amounts being paid to the holders of the Offered Certificates. In each case where we describe the amount of an entitlement, we describe that amount without regard to any limitation on the sources of funds from which the entitlement may be paid. Refer to the column titled “source of payment” for such limitations.
Type | Recipient | Amount | Frequency | Source of Payment |
Fees | ||||
Master Servicing Fee | Master Servicers and sub-servicers | The product of (i) theper annum master servicing fee rate for the related Mortgage Loan, (ii) the Stated Principal Balance of that Mortgage Loan and (iii) a fraction, the numerator of which is either (a) 30 or (b) the actual number of days in the applicable interest accrual period, and the denominator of which is 360. The fraction described in clause (iii) of the | Monthly. | Interest payments on the related Mortgage Loan (including any related REO Mortgage Loan) and, with respect to unpaid master servicing fees (including any sub-servicing fees) in respect of any Mortgage Loan, out of the portion of any related insurance |
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Type | Recipient | Amount | Frequency | Source of Payment |
immediately preceding sentence will match the interest accrual basis of the subject Mortgage Loan. The master servicing fee rate will range, on a loan-by-loan basis, from 0.0100%per annum to 0.0900%per annum. With respect to each Mortgage Loan for which a primary servicer acts as primary servicer or a sub-servicer acts as sub-servicer, a portion of the master servicing fee is payable to that primary servicer or sub-servicer, as the case may be. | proceeds, condemnation proceeds or liquidation proceeds allocable as interest or general collections. | |||
Special Servicing Fee | Special Servicers | For any Specially Serviced Mortgage Loan, REO Mortgage Loan, the product of the portion of a rate equal to 0.25%per annum (or, in the case of the National Cooperative Bank, N.A. Mortgage Loans only, a rate equal to the greater of (i) 0.25%per annum and (ii) aper annum rate that would result in a special servicing fee for each such mortgage loan of $1,000 for the related month) determined in the same manner as the applicable mortgage rate is determined for such loan for such month, and the Stated Principal Balance of each such loan (in each case, excluding any Non-Serviced Pari Passu Mortgage Loan). | Monthly. | Any and all collections on the Mortgage Loans (including any related REO Mortgage Loan). |
Workout Fee | Special Servicers | 1.00% of each collection of principal and interest on each applicable worked-out Mortgage Loan for as long as it remains a worked-out Mortgage Loan;provided,however, that the amount of any workout fee may be reduced by certain Offsetting Modification Fees as described under “Servicing of the Mortgage Loans and Administration of the Trust Fund—Servicing and Other Compensation and Payment of Expenses—Principal Special Servicing Compensation—Workout Fee” in this free writing prospectus. | Monthly following a workout and before any redefault. | The related collections on such Mortgage Loan (including any related REO Mortgage Loan). |
Liquidation Fee | Special Servicers | (a) 1.00% of the liquidation proceeds received in | Upon receipt of liquidation | The related liquidation proceeds, |
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Type | Recipient | Amount | Frequency | Source of Payment |
connection with a final disposition of each applicable Specially Serviced Mortgage Loan or REO Property or portion thereof and any condemnation proceeds and insurance proceeds received by the Trust Fund (net of any Default Interest, late payment charges), other than (with certain exceptions) in connection with the purchase or repurchase of any Mortgage Loan (other than any Non-Serviced Pari Passu Mortgage Loan) from the Trust Fund by any person, or (b) if such rate in clause (a) above would result in an aggregate liquidation feeless than $25,000 then the Liquidation Fee Rate will be equal to the lesser of (i) 3.0% of the liquidation proceeds or (ii) such lower rate as would result in an aggregate liquidation fee equal to $25,000, in each case as calculated prior to the application of any Offsetting Modification Fees;provided,however, that the amount of any liquidation fee may be reduced by certain Offsetting Modification Fees as described under “Servicing of the Mortgage Loans and Administration of the Trust Fund—Servicing and Other Compensation and Payment of Expenses—Principal Special Servicing Compensation—Liquidation Fee” in this free writing prospectus. | proceeds, condemnation proceeds and insurance proceeds on a Specially Serviced Mortgage Loan (including any REO Mortgage Loan). | condemnation proceeds or insurance proceeds. | ||
Trustee Fee | Trustee | The fixed monthly fee of $210 payable to the Trustee by the Certificate Administrator from the Certificate Administrator’s fee pursuant to the Pooling and Servicing Agreement. | Monthly. | Any and all collections and monthly debt service advances on the Mortgage Loans in the pool, to the extent included in the amounts remitted by the applicable Master Servicer. |
Certificate Administrator Fee | Certificate Administrator | The product of the portion of a rate equal to 0.0039%per annum applicable to such month, determined in the same manner as the applicable mortgage rate is determined for each Mortgage Loan (including each Non-Serviced Pari Passu Mortgage Loan) for such month, and the | Monthly. | Any and all collections and monthly debt service advances on the Mortgage Loans (including each Non-Serviced Pari Passu Mortgage Loan) in the pool, to the extent included in the amounts remitted by the |
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Type | Recipient | Amount | Frequency | Source of Payment |
Stated Principal Balance of each Mortgage Loan. | applicable Master Servicer. | |||
Trust Advisor Fee | Trust Advisor | The product of the portion of a rate equal to 0.00231%per annum applicable to such month, determined in the same manner as the applicable mortgage rate is determined for each Mortgage Loan (other than each Non-Serviced Pari Passu Mortgage Loan) for such month, and the Stated Principal Balance of each Mortgage Loan. | Monthly. | Any and all collections and monthly debt service advances on the Mortgage Loans (other than each Non-Serviced Pari Passu Mortgage Loan), to the extent included in the amounts remitted by the applicable Master Servicer. |
Trust Advisor Consultation Fee | Trust Advisor | An amount equal to $10,000 in connection with each Material Action for which the Trust Advisor engages in consultation under the Pooling and Servicing Agreement. | Actual collections of the related fee from the related borrower. | |
Additional Servicing Compensation | Master Servicers/ Special Servicers | All defeasance fees, Modification Fees, Assumption Fees, Assumption Application Fees and consent fees.(1) | From time to time. | Actual collections of the related fees or investment income, as applicable. |
Late payment charges and Default Interest to the extent not used to offset interest on advances.(1) | ||||
Any and all amounts collected for checks returned for insufficient funds on the applicable Mortgage Loans;(1) | ||||
All or a portion of charges for beneficiary statements or demands and other loan processing fees actually paid by the borrowers under the applicable Mortgage Loans;(1) | ||||
Any Prepayment Interest Excesses arising from any principal prepayments on the applicable Mortgage Loans;(1) and | ||||
Interest or other income earned on deposits in the collection or other accounts maintained by the applicable Master Servicer or applicable Special Servicer (but only to the extent of the net investment earnings, if any, with respect to any such account for each collection period and, further, in the case of a servicing account or reserve account, only to the extent such interest or other income is not required to be paid to any borrower under |
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Type | Recipient | Amount | Frequency | Source of Payment |
applicable law or under the related Mortgage Loan).(1) | ||||
Expenses | ||||
Servicing Advances | Master Servicers and Trustee (and Special Servicers, if applicable) | The amount of any applicable Servicing Advances. | From time to time. | Recoveries on the related Mortgage Loan (other than any Non-Serviced Pari Passu Mortgage Loan), or to the extent that the party making the advance determines the advance is nonrecoverable, from any and all collections on the Mortgage Loans (including each Non-Serviced Pari Passu Mortgage Loan). |
Interest on Servicing Advances | Master Servicers and Trustee (and Special Servicers, if applicable) | Interest accrued from time to time on the amount of the applicable Servicing Advance at the prime lending rate as published in the “Money Rates” section ofThe Wall Street Journal. | When the advance is reimbursed. | First from late payment charges and Default Interest in excess of the regular interest rate on the related Mortgage Loan (other than any Non-Serviced Pari Passu Mortgage Loan), and then from any and all other collections on the Mortgage Loans (including each Non-Serviced Pari Passu Mortgage Loan). |
Monthly Debt Service Advances | Master Servicers and Trustee | The amount of any applicable monthly debt service advances. | From time to time. | Recoveries on the related Mortgage Loan, or to the extent that the party making the advance, or the applicable Special Servicer, determines it is nonrecoverable, from any and all other collections on the Mortgage Loans (including each Non-Serviced Pari Passu Mortgage Loan). |
Interest on Monthly Debt Service Advances | Master Servicers and Trustee | Interest accrued from time to time on the amount of the advance at the prime lending rate as published in the “Money Rates” section ofThe Wall Street Journal. | When the advance is reimbursed. | First from late payment charges and Default Interest in excess of the regular interest rate on the related Mortgage Loan, and then from any and all other collections on the Mortgage Loans (including each Non-Serviced Pari Passu Mortgage Loan). |
Indemnification Expenses | Trustee, Certificate | Losses, liabilities and expenses incurred by the | From time to time. | Any and all collections on the Mortgage Loans |
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Type | Recipient | Amount | Frequency | Source of Payment |
Administrator, Master Servicers and Special Servicers (and their directors, members, managers, officers, employees and agents) | Trustee, the Certificate Administrator, a Master Servicer or a Special Servicer in connection with any legal action or claim relating to the Pooling and Servicing Agreement or the Certificates (subject to applicable limitations under the Pooling and Servicing Agreement). | (including each Non-Serviced Pari Passu Mortgage Loan). | ||
Indemnification Expenses | Trust Advisor/the Other Trust Advisor with respect to a Non-Serviced Loan Combination | Losses, liabilities and expenses incurred by the Trust Advisor and, with respect to any Non-Serviced Pari Passu Mortgage Loan, the Other Trust Advisor, in connection with any legal action or claim relating to the Pooling and Servicing Agreement or the Certificates (subject to applicable limitations under the Pooling and Servicing Agreement or expenses incurred in connection with the replacement of a Special Servicer) or, with respect to the Other Trust Advisor, the applicable Non-Serviced Pari Passu Mortgage Loan. | From time to time. | Amounts that do not constitute Designated Trust Advisor Expenses will be reimbursed first from amounts otherwise distributable in respect of interest on the Class B and C Regular Interests (and therefore, the Class B and C Certificates) and the Class D Certificates, then from amounts otherwise distributable in respect of principal on all of the Certificates (other than the Control-Eligible Certificates); amounts constituting Designated Trust Advisor Expenses will be reimbursed from any and all collections on the Mortgage Loans. |
Additional Trust Fund Expenses not advanced | Third parties | Based on third party charges. See “—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses” above. | From time to time. | Any and all collections on the Mortgage Loans. |
CREFC® Intellectual Property Royalty License Fee | CREFC® | With respect to each distribution date, an amount equal to the product of 0.0005%per annummultiplied by the outstanding principal amount of each Mortgage Loan and based upon the same interest accrual basis as the related Mortgage Loan. | Monthly. | Any and all collections on the Mortgage Loans. |
(1) | Allocable between the applicable Master Servicer and the applicable Special Servicer as provided in the Pooling and Servicing Agreement and as described in “Servicing of the Mortgage Loans and Administration of the Trust Fund—Servicing and Other Compensation and Payment of Expenses” in this free writing prospectus. |
In general, with respect to any Pari Passu Mortgage Loan at such time as it constitutes a Non-Serviced Pari Passu Mortgage Loan, (a) references in the table to the Special Servicer and the Trust Advisor will mean the applicable Other Special Servicer and Other Trust
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Advisor, except that (i) the rights to compensation will be governed by the applicable Other Pooling and Servicing Agreement, and (ii) the applicable Other Trust Advisor (like the Trust Advisor) will have no entitlement to an ongoing fee with respect to such Pari Passu Mortgage Loan, (b) with respect to Servicing Advances on or in respect of the related Loan Combination, references in the table to the Master Servicer or the Special Servicer will mean the applicable Other Master Servicer or Other Special Servicer, respectively, and (c) neither Master Servicer will be entitled, and the applicable Other Master Servicer will be entitled, to a primary servicing fee accruing at a rate equal to 0.01%per annum.
See “Servicing of the Mortgage Loans and Administration of the Trust Fund—Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations” in this free writing prospectus.
Reports to Certificateholders; Available Information
Certificate Administrator Reports. Based on monthly reports prepared by the Master Servicers and the Special Servicers and delivered by the Master Servicers to the Certificate Administrator, the Certificate Administrator will be required to prepare and make available electronically or, upon written request from registered holders or from those parties that cannot receive such statement electronically, provide by first class mail, on each distribution date to each registered holder of a Certificate, the parties to the Pooling and Servicing Agreement and any other designee of the Depositor, a report substantially in the form attached to this free writing prospectus as Annex F (a “Distribution Date Statement”) setting forth, among other things specified in the Pooling and Servicing Agreement the following information:
1. | the amount of the distribution on the distribution date to the holders of each Class of Principal Balance Certificates and the Class A-4FX, A-S, B and C Regular Interests in reduction of the principal balance of the Certificates; |
2. | the amount of the distribution on the distribution date to the holders of each Class of interest-bearing Certificates and the Class A-4FX, A-S, B and C Regular Interests allocable to the interest distributable on that Class of Certificates or Regular Interest and, with respect to the Class A-4FL Certificates (i) information that the amount of interest distributed on such Class is the Class A-4FL Certificates’ allocable portion of the interest distributable with respect to the Class A-4FX Regular Interest, and (ii) whether a conversion event has occurred and is continuing with respect to the swap contract related to the Class A-4FL Certificates; |
3. | the aggregate amount of debt service advances made in respect of the Mortgage Pool for the distribution date; |
4. | the aggregate amount of compensation paid to the Certificate Administrator and the Trustee and servicing compensation paid to each Master Servicer and each Special Servicer during the related collection period; |
5. | the aggregate Stated Principal Balance of the Mortgage Pool outstanding immediately before and immediately after the distribution date; |
6. | the number, aggregate unpaid principal balance, weighted average remaining term to maturity and weighted average mortgage rate of the Mortgage Loans as of the end of the related collection period; |
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7. | the number and aggregate unpaid principal balance of Mortgage Loans (A) delinquent 30-59 days, (B) delinquent 60-89 days, (C) delinquent 90 days or more and (D) current but specially serviced or in foreclosure but not an REO Property; |
8. | the value of any REO Property included in the Trust Fund as of the end of the related collection period, on a loan-by-loan basis, based on the most recent appraisal or valuation; |
9. | the Available Distribution Amount for the distribution date and the amount of available funds with respect to (i) the Class A-4FL and A-4FX Certificates, (ii) the Class A-S Certificates and Class A-S component of the Class PEX Certificates, (iii) the Class B Certificates and Class B component of the Class PEX Certificates, and (iv) the Class C Certificates and Class C component of the Class PEX Certificates, in each case for the distribution date; |
10. | the amount of the distribution on the distribution date to the holders of any Class of Certificates and the Class A-4FX, A-S, B and C Regular Interests or the swap counterparty allocable to Yield Maintenance Charges and/or Prepayment Premiums; |
11. | the total interest distributable for each Class of interest-bearing Certificates and the Class A-4FX, A-S, B and C Regular Interests for the distribution date; |
12. | the pass-through rate in effect for each Class of interest-bearing Certificates for the interest accrual period related to the current distribution date; |
13. | the Principal Distribution Amount for the distribution date, separately setting forth the portion thereof that represents scheduled principal and the portion thereof representing prepayments and other unscheduled collections in respect of principal; |
14. | the total outstanding principal balance or notional amount, as the case may be, of each Class of Certificates immediately before and immediately after the distribution date, separately identifying any reduction in these amounts as a result of the allocation of Realized Losses and Additional Trust Fund Expenses; |
15. | the amount of any Appraisal Reduction Amounts effected in connection with the distribution date on a loan-by-loan basis and the aggregate amount of Appraisal Reduction Amounts as of the distribution date; |
16. | the number and related principal balances of any Mortgage Loans extended or modified during the related collection period on a loan-by-loan basis; |
17. | the amount of any remaining unpaid interest shortfalls for each Class of interest-bearing Certificates as of the close of business on the distribution date; |
18. | a loan-by-loan listing of each Mortgage Loan which was the subject of a principal prepayment during the related collection period and the amount of principal prepayment occurring; |
19. | the amount of the distribution on the distribution date to the holders of each Class of Certificates in reimbursement of Realized Losses and Additional Trust Fund Expenses previously allocated thereto; |
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20. | the aggregate unpaid principal balance of the Mortgage Loans outstanding as of the close of business on the related determination date; |
21. | with respect to any Mortgage Loan as to which a liquidation occurred during the related collection period (other than through a payment in full), (A) the loan number thereof, (B) the aggregate of all liquidation proceeds which are included in the Available Distribution Amount and other amounts received in connection with the liquidation (separately identifying the portion thereof allocable to distributions on the Certificates), and (C) the amount of any Realized Loss attributable to the liquidation; |
22. | with respect to any REO Property included in the Trust as to which the applicable Special Servicer determined that all payments or recoveries with respect to the Mortgaged Property have been ultimately recovered during the related collection period, (A) the loan number of the related Mortgage Loan, (B) the aggregate of all liquidation proceeds and other amounts received in connection with that determination (separately identifying the portion thereof allocable to distributions on the Certificates), and (C) the amount of any Realized Loss attributable to the related REO Mortgage Loan in connection with that determination; |
23. | the aggregate amount of interest on monthly debt service advances in respect of the Mortgage Loans paid to each Master Servicer and/or the Trustee since the prior distribution date; |
24. | the aggregate amount of interest on Servicing Advances in respect of the Mortgage Loans paid to each Master Servicer, each Special Servicer and/or the Trustee since the prior distribution date; |
25. | a loan by loan listing of any Mortgage Loan which was defeased during the related collection period; |
26. | a loan by loan listing of any material modification, extension or waiver of a Mortgage Loan; |
27. | a loan by loan listing of any material breach of the representations and warranties given with respect to Mortgage Loan by the applicable Mortgage Loan Seller, as provided by the applicable Master Servicer, the applicable Special Servicer or the Depositor; |
28. | the amounts of any excess liquidation proceeds held in the Certificate Administrator’s account designated for such excess liquidation proceeds; |
29. | the amount of the distribution on the distribution date to the holders of the Class R, V-1 and V-2 Certificates; |
30. | an itemized listing of any Disclosable Special Servicer Fees received by the applicable Special Servicer or any of its affiliates during the related collection period; |
31. | the amount of any (A) payment by the swap counterparty under the swap contract with respect to the Class A-4FL Certificates as a termination payment, (B) payment to any successor swap counterparty to acquire a replacement interest rate swap contract, and (C) collateral posted in connection with any rating agency trigger event; |
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32. | the amount of and identification of any payments on the Class A-4FL Certificates in addition to the amount of principal and interest due thereon; and |
33. | the Certificate Administrator’s determination of the LIBOR rate for the interest accrual period related to the current distribution date. |
On each distribution date, the Certificate Administrator will make available to the general public on the “Certificate Administrator’s Website” (initially www.ctslink.com) a copy of the Distribution Date Statement.
Book-Entry Certificates. See “Description of the Certificates—Book-Entry Registration and Definitive Certificates” in the accompanying prospectus for information regarding the ability of holders of Offered Certificates in book-entry form to obtain access to the reports of the Certificate Administrator.
Each Distribution Date Statement will be substantially in the form attached to this free writing prospectus as Annex F.
Information Available Electronically. The Certificate Administrator will be required to make available to any Privileged Person (except as described below, andprovided that the free writing prospectus, the Distribution Date Statements, the Pooling and Servicing Agreement and the SEC filings will be made available to the general public) the following items by means of the Certificate Administrator’s Website.
(A) The following documents, which must be made available under a tab or heading designated “deal documents”:
1. | the free writing prospectus that relates to the Offered Certificates; |
2. | the Pooling and Servicing Agreement, each Mortgage Loan Purchase Agreement and any amendments and exhibits thereto; |
3. | the CREFC® loan setup file prepared by, or delivered to, the Certificate Administrator; |
(B) The following documents, which must be made available under a tab or heading designated “SEC filings”:
1. | Any reports on Forms 10-D, 10-K and 8-K that have been filed by the Certificate Administrator with respect to the Trust through the EDGAR system; |
(C) The following documents, which must be made available under a tab or heading designated “periodic reports”:
1. | the Distribution Date Statements; |
2. | the CREFC® Reports (other than the CREFC® loan setup file) prepared by, or delivered to, the Certificate Administrator; |
3. | the annual reports prepared by the Trust Advisor; |
(D) The following documents, which must be made available under a tab or heading designated “additional documents”:
1. | summaries of Final Asset Status Reports; |
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2. | inspection reports; and |
3. | appraisals; |
(E) The following documents, which must be made available under a tab or heading designated “special notices”:
1. | notice of final payment on the Certificates; |
2. | notice of termination of a Master Servicer or a Special Servicer; |
3. | notice of a Servicer Termination Event with respect to a Master Servicer or a Special Servicer; |
4. | notice of the resignation of any party to the Pooling and Servicing Agreement and notice of the acceptance of appointment to such party, to the extent such notice is prepared or received by the Certificate Administrator; |
5. | officer’s certificates supporting the determination that any advance was (or, if made, would be) a nonrecoverable advance; |
6. | any “special notice” by a Certificateholder that wishes to communicate with others, pursuant to the Pooling and Servicing Agreement; |
7. | any Assessment of Compliance delivered to the Certificate Administrator; |
8. | any Attestation Reports delivered to the Certificate Administrator; |
9. | any reports delivered to the Certificate Administrator by the Trust Advisor in connection with its review of a Special Servicer’s net present value and Appraisal Reduction Amount calculations as described under “Servicing of the Mortgage Loans and Administration of the Trust Fund—Review and Consultation With Respect to Calculations of Net Present Value and Appraisal Reduction Amounts” in this free writing prospectus; |
10. | any recommendation received by the Certificate Administrator from the Trust Advisor for the termination of a Special Servicer during any period when the Trust Advisor is entitled to make such a recommendation, and any direction of the requisite percentage of the Certificateholders to terminate a Special Servicer in response to such recommendation; |
11. | any proposal received by the Certificate Administrator from a requisite percentage of Certificateholders for the termination of a Special Servicer during any period when such Certificateholders are entitled to make such a proposal, and any direction of the requisite percentage of the Certificateholders to terminate a Special Servicer in response to such proposal; and |
12. | any proposal received by the Certificate Administrator from a requisite percentage of Certificateholders for the termination of |
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Trust Advisor, and any direction of the requisite percentage of the Certificateholders to terminate the Trust Advisor in response to such proposal; |
(F) An investor question-and-answer forum (the “Investor Q&A Forum”), which must be made available as described more fully below; and
(G) An investor registry (the “Investor Registry”), which must be made available (solely to Certificateholders and beneficial owners) as described more fully below.
Notwithstanding the description set forth above, for purposes of obtaining information or access to the Certificate Administrator’s Website, to the extent that the Subordinate Class Representative or any holder of a certificate in the Subordinate Class is a Borrower Party in respect of any Excluded Loan, such person will be prohibited from obtaining any summary of a Final Asset Status Report in respect of such Excluded Loan.
Furthermore notwithstanding the description set forth above, the Certificate Administrator will be authorized to use such other headings and labels as it may reasonably determine from time to time.
The Rating Agencies and NRSROs will have access to the Investor Q&A Forum but will not have a means to submit questions on the Investor Q&A Forum. The Rating Agencies and NRSROs will not have access to the Investor Registry. As used herein, “NRSRO” means a nationally recognized statistical rating organization, as such term is defined in Section 3(a)(62) of the Exchange Act;provided that when referred to in connection with the Certificate Administrator’s Website or the Rule 17g-5 Information Provider’s Website, “NRSRO” means a nationally recognized statistical rating organization that has delivered an NRSRO Certification to the Certificate Administrator.
“Privileged Person” includes the Depositor and its designees, the underwriters, the Master Servicers, the Special Servicers, the Trustee, the Certificate Administrator, the Subordinate Class Representative, the Trust Advisor, any Mortgage Loan Seller, any person who provides the Certificate Administrator with an Investor Certification, any “master servicer” under any pooling and servicing agreement related to a Non-Serviced Pari Passu Companion Loan, and any Rating Agency or NRSRO that delivers an NRSRO Certification to the Certificate Administrator, which Investor Certification and NRSRO Certification may be submitted electronically by means of the Certificate Administrator’s Website;provided,however, that a Borrower Party and its affiliates will not be considered to be a Privileged Person with respect to certain information and will be entitled to only such information as is provided in the Pooling and Servicing Agreement.
The Certificate Administrator will make the Investor Q&A Forum available to Privileged Persons by means of the Certificate Administrator’s Website, where Certificateholders and beneficial owners of Certificates may submit inquiries to the Certificate Administrator relating to the Distribution Date Statement, and submit inquiries to the applicable Master Servicer or the applicable Special Servicer relating to servicing reports prepared by that party, the Mortgage Loans, or the Mortgaged Properties, and where Privileged Persons may view previously submitted inquiries and related answers. The Certificate Administrator will forward such inquiries to the appropriate person. The Certificate Administrator, the applicable Master Servicer or the applicable Special Servicer, as applicable, will be required to answer each inquiry, unless it determines that answering the inquiry would not be in the best interests of the Trust and/or the Certificateholders, would be in violation of applicable law or the Mortgage Loan documents, would materially increase the duties of, or result in
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significant additional cost or expense to, the Certificate Administrator, the applicable Master Servicer or the applicable Special Servicer, as applicable, or is otherwise not advisable to answer, in which case the Certificate Administrator will not post such inquiry on the Investor Q&A Forum. The Certificate Administrator will be required to post the inquiries and related answers on the Investor Q&A Forum, subject to the immediately preceding sentence and subject to and in accordance with the Pooling and Servicing Agreement. In addition, no party will post or otherwise disclose direct communications with the Subordinate Class Representative as part of its response to any inquiries. The Investor Q&A Forum may not reflect questions, answers, and other communications which are not submitted through the Certificate Administrator’s Website. Answers posted on the Investor Q&A Forum will be attributable only to the respondent, and will not be deemed to be answers from any other person, including the Depositor and the underwriters. None of the underwriters, Depositor, any of their respective affiliates or any other person will certify as to the accuracy of any of the information posted in the Investor Q&A Forum and no person other than the respondent will have any responsibility or liability for the content of any such information.
The Certificate Administrator will make the “Investor Registry” available to any Certificateholder and beneficial owner by means of the Certificate Administrator’s Website. Certificateholders and beneficial owners may register on a voluntary basis for the investor registry and obtain contact information for any other Certificateholder or beneficial owner that has also registered,provided that they comply with certain requirements as provided for in the Pooling and Servicing Agreement.
The Certificate Administrator’s Website will initially be located at www.ctslink.com. Access will be provided by the Certificate Administrator to Privileged Persons upon receipt by the Certificate Administrator from such person of an Investor Certification or NRSRO Certification in the form(s) attached to the Pooling and Servicing Agreement, which form(s) will also be located on and submitted electronically by means of the Certificate Administrator’s Website. The NRSRO Certification will state that such NRSRO is a Rating Agency or that (i) such NRSRO has provided the Depositor with the appropriate certifications under Exchange Act Rule 17g-5(e), (ii) such NRSRO has access to the Depositor’s 17g-5 website and, (iii) such NRSRO will keep the information obtained from the Depositor’s 17g-5 website confidential (an “NRSRO Certification”). Such NRSRO will be deemed to recertify to the foregoing each time it accesses the Certificate Administrator’s Website. An NRSRO Certification will be deemed to have been executed by an NRSRO if the Depositor so directs the Rule 17g-5 Information Provider.
The parties to the Pooling and Servicing Agreement will not be required to provide that certification. In connection with providing access to the Certificate Administrator’s Website, the Certificate Administrator may require registration and the acceptance of a disclaimer. The Certificate Administrator will not be liable for the dissemination of information in accordance with the terms of the Pooling and Servicing Agreement. The Certificate Administrator will make no representations or warranties as to the accuracy or completeness of such documents and will assume no responsibility for them. The Certificate Administrator will not be deemed to have knowledge of any information posted on its website solely by virtue of such posting. In addition, the Certificate Administrator may disclaim responsibility for any information for which it is not the original source. Assistance in using the Certificate Administrator’s Website can be obtained by calling its customer service desk at 866-846-4526.
The Rating Agencies and NRSROs will have access to the Investor Q&A Forum but will not have a means to submit questions on the Investor Q&A Forum. The Rating Agencies and NRSROs will not have access to the Investor Registry.
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The Rule 17g-5 Information Provider will be required to make certain information available, to Rating Agencies and NRSROs through the facilities of a website.
“Investor Certification” means a certificate representing that such person executing the certificate is a Certificateholder, a beneficial owner of a Certificate or a prospective purchaser of a Certificate or the Subordinate Class Representative and that either (a) such person is not a borrower, a manager of a Mortgaged Property, an affiliate of any borrower or manager of a Mortgaged Property, or an agent, principal, partner, member, joint venturer, limited partner, employee, representative, director, trustee, advisor or investor in or of an affiliate of any borrower (collectively, a “Borrower Party”), in which case such person will have access to all the reports and information made available to Certificateholders under the Pooling and Servicing Agreement, or (b) such person is a Borrower Party, in which case (1) if such person is the Subordinate Class Representative or a beneficial owner of a Certificate of the Subordinate Class, such person will have access to all the reports and information made available to Certificateholders under the Pooling and Servicing Agreement other than certain reports and information as set forth in the Pooling and Servicing Agreement, or (2) if such person is not the Subordinate Class Representative or a beneficial owner of a Certificate of the Subordinate Class, in which case such person will only receive access to the Distribution Date Statements prepared by the Certificate Administrator. The Investor Certification will be substantially in the form(s) provided for in the Pooling and Servicing Agreement, may be submitted electronically by means of the Certificate Administrator’s Website and, as a condition to an investor’s access to the Certificate Administrator’s Website or information made available by the applicable Master Servicer or the applicable Special Servicer, accompanied by an investor confidentiality agreement. The Certificate Administrator may require that Investor Certifications be re-submitted from time to time in accordance with its policies and procedures and will restrict access to the Certificate Administrator’s Website to a mezzanine lender upon notice from the applicable Special Servicer pursuant to the Pooling and Servicing Agreement that such mezzanine lender has commenced foreclosure proceedings against the equity collateral pledged to secure the related mezzanine loan.
“CREFC®” means the CRE Finance Council.
“CREFC® Reports” collectively refer to the following electronic files: (i) CREFC® bond level file, (ii) CREFC® collateral summary file, (iii) CREFC® property file, (iv) CREFC® loan periodic update file, (v) CREFC® loan setup file, (vi) CREFC® financial file, (vii) CREFC® special servicer loan file, (viii) CREFC® comparative financial status report, (ix) CREFC® delinquent loan status report, (x) CREFC® historical loan modification and corrected mortgage loan report, (xi) CREFC® operating statement analysis report, (xii) CREFC® NOI adjustment worksheet, (xiii) CREFC® REO status report, (xiv) CREFC® servicer watch list, (xv) CREFC® loan level reserve/LOC report, (xvi) CREFC® advance recovery report, (xvii) CREFC® reconciliation of funds report, and (xviii) solely with respect to the Loan Combinations, CREFC® total loan report.
Other Information. The Pooling and Servicing Agreement will require that the Certificate Administrator make available at its offices, during normal business hours, for review (by any Privileged Person that is not a Borrower Party, rating agency or an NRSRO), originals or copies of, among other things, the following items (to the extent such items are in its possession) (except to the extent not permitted by applicable law or under any of the related Mortgage Loan documents):
(A) | any and all notices and reports delivered to the Certificate Administrator with respect to any Mortgaged Property as to which the environmental testing revealed certain environmental issues; |
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(B) | the most recent annual (or more frequent, if available) operating statements, rent rolls, or, with respect to residential cooperative mortgage loans, maintenance schedules (to the extent such rent rolls or maintenance schedules have been made available by the related borrower) and/or lease summaries and retail “sales information”, if any, collected by or on behalf of the applicable Master Servicer or the applicable Special Servicer with respect to each Mortgaged Property; |
(C) | the mortgage files, including any and all modifications, waivers and amendments of the terms of a Mortgage Loan entered into or consented by the applicable Master Servicer and/or the applicable Special Servicer and delivered to the Certificate Administrator; |
(D) | any other information that may be necessary to satisfy the requirements of subsection (d)(4)(i) of Rule 144A under the Securities Act of 1933; and |
(E) | each of the documents made available by the Certificate Administrator via its website as described under “—Information Available Electronically” above. |
You should assume that the Trustee, the Certificate Administrator or any document Custodian, as the case may be, will be permitted to require payment of a sum sufficient to cover the reasonable out-of-pocket costs and expenses of providing the copies.
In connection with providing access to or copies of the items described above to Certificateholders, beneficial owners of Certificates and prospective purchasers of Certificates, the Trustee, the Master Servicers, the Special Servicers, the Certificate Administrator or any document Custodian, as the case may be, may require an Investor Certification executed by the requesting person or entity.
The Certificate Administrator will make available all distribution date statements, CREFC® reports and supplemental notices (provided that they are received by the Certificate Administrator) to certain modeling financial services (i.e., Bloomberg, L.P., Trepp, LLC, Intex Solutions, Inc., Interactive Data Corp., Markit Group Limited, BlackRock Financial Management, Inc. and CMBS.com, Inc.) in accordance with the provisions of the Pooling and Servicing Agreement.
The Trust will file distribution reports on Form 10-D, annual reports on Form 10-K and (if applicable) current reports on Form 8-K with the SEC regarding the Certificates, to the extent, and for such time, as it is required to do so under the Exchange Act. Such reports will be filed under the name of the issuing entity (File No. 333-195164). Members of the public may read and copy any materials filed with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549, on official business days between the hours of 10 a.m. and 3 p.m. Additional information regarding the Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330. The SEC also maintains a site on the World Wide Web at “http://www.sec.gov” at which you can view and download copies of reports, proxy and information statements and other information filed electronically through the Electronic Data Gathering, Analysis and Retrieval (“EDGAR”) system. The Depositor has filed the prospectus and the related registration statement, including all exhibits thereto, through the EDGAR system, so the materials should be available by logging onto the SEC’s website. The SEC maintains computer terminals providing access to the EDGAR system at the office referred to above.
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Voting Rights
The Certificates will be allocated voting rights for purposes of certain actions that may be taken pursuant to the Pooling and Servicing Agreement. 98% of the voting rights will be allocated to the holders of the Class A-1, A-2, A-3, A-4, A-4FL, A-4FX, A-SB, A-S, B, C, PEX, D, E, F and G Certificates, in proportion to the respective aggregate principal balances of those Classes (or, in connection with a proposed termination and replacement of a Special Servicer at the direction of the Certificateholders generally or following a recommendation of the Trust Advisor, each as described under “Servicing of the Mortgage Loans and Administration of the Trust Fund—Replacement of the Special Servicers” in this free writing prospectus, in proportion to the respective aggregate principal balances of those Classes as notionally reduced taking into account the application of any Appraisal Reduction Amounts in respect of the Mortgage Loans); 2% of the voting rights will be allocatedpro rata based upon the outstanding notional amount of the Class X-A and X-B Certificates among the holders of the Class X-A and/or X-B Certificates, whichever are outstanding from time to time; and 0% of the voting rights will be allocated to the holders of the Class V-1, V-2 or R Certificates. Voting rights allocated to a Class of Certificateholders will be allocated among those Certificateholders in proportion to their respective percentage interests in that Class. Notwithstanding the foregoing, solely in connection with Certificateholder proposals, or directions, to terminate and replace a Special Servicer or the Trust Advisor, Appraisal Reduction Amounts in respect of the Mortgage Loans will be allocated to notionally reduce the aggregate principal balances of the respective Classes of Principal Balance Certificates for purposes of allocating the voting rights.
Delivery, Form and Denomination
General. We intend to deliver the Class A-1, A-2, A-3, A-4, A-SB, A-S, B, C, PEX and D Certificates in minimum principal balance denominations of $10,000. We intend to deliver the Class X-A and X-B Certificates in minimum notional amount denominations of $1,000,000. Investments in excess of those minimum denominations may be made in multiples of $1.
You will receive your Offered Certificates in book-entry form through the facilities of DTC. See “Description of the Certificates—General” and “—Book-Entry Registration and Definitive Certificates” in the accompanying prospectus. For additional information regarding clearance and settlement procedures for the Offered Certificates and for information with respect to tax documentation procedures relating to the Offered Certificates, see Annex D to this free writing prospectus.
Matters Regarding the Certificate Administrator and the Tax Administrator
The Certificate Administrator will be entitled to a monthly fee for its services, a portion of which will be paid to the Trustee as the Trustee fee. The Certificate Administrator’s fee will accrue with respect to each and every Mortgage Loan at 0.0039%per annum on the Stated Principal Balance of the subject Mortgage Loan for the related distribution date and will be calculated based on the same interest accrual basis as the subject Mortgage Loan, which is either an Actual/360 Basis or a 30/360 Basis. The Certificate Administrator will be required to pay to the Trustee a monthly fee for its services as set forth in the Pooling and Servicing Agreement. The Certificate Administrator fee is payable out of general collections on the Mortgage Loans and any REO Properties in the Trust Fund. In addition, the Trustee and the Certificate Administrator will be entitled to recover from the Trust Fund all reasonable unanticipated expenses and disbursements incurred or made in accordance with any of the provisions of the Pooling and Servicing Agreement, but not including routine overhead expenses incurred in the ordinary course of performing its duties under the
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Pooling and Servicing Agreement, and not including any expense, disbursement or advance as may arise from its willful misfeasance, negligence or bad faith.
The holders of Certificates representing a majority of the total voting rights determined without notionally reducing the principal balances of the Certificates by any Appraisal Reduction Amounts) may remove any of the Certificate Administrator, the tax administrator or the Trustee, upon written notice to the Master Servicers, the Special Servicers, us and the Trustee.
The Trust Fund will indemnify the Certificate Administrator (in each of the capacities in which it serves under the Pooling and Servicing Agreement) and its directors, officers, employees, agents and affiliates against any and all losses, liabilities, damages, claims or expenses, including, without limitation, reasonable attorneys’ fees, arising with respect to the Pooling and Servicing Agreement, the Mortgage Loans or the Certificates, other than (i) those resulting from the breach of the Certificate Administrator’s representations and warranties or from willful misconduct, bad faith or negligence in the performance of, or negligent disregard of, its duties, (ii) the Certificate Administrator’s allocable overhead and (iii) any cost or expense expressly required to be borne by the Certificate Administrator.
All expenses incurred by the Certificate Administrator in connection with the transfer of the mortgage files to a successor certificate administrator, following the removal of the Certificate Administrator without cause are required to be reimbursed to such removed Certificate Administrator within thirty (30) days of demand therefor, such reimbursement to be made by the Certificateholders that terminated such Certificate Administrator.
None of the Certificate Administrator, the Custodian, the tax administrator or the Trustee will be personally liable for any action reasonably taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by the Pooling and Servicing Agreement. Neither the Trustee nor the Certificate Administrator will be liable for any failure or delay in the performance of its obligations under the Pooling and Servicing Agreement due to force majeure or acts of God;provided that any such failure or delay is not also a result of its own negligence, bad faith or willful misconduct. In addition in no event will the Trustee or the Certificate Administrator be liable for special, punitive, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Trustee or the Certificate Administrator has been advised of the likelihood of such loss or damage and regardless of the form of action. None of the Certificate Administrator, the tax administrator or the Trustee will be required to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties under the Pooling and Servicing Agreement or in the exercise of any of its rights or powers if, in the opinion of that entity, the repayment of those funds or adequate indemnity against that risk or liability is not reasonably assured to it.
With respect to any Non-Serviced Loan Combination, the related certificate administrator (each, an “Other Certificate Administrator”) will be entitled to indemnification with respect to amounts related to such Non-Serviced Loan Combination pursuant to provisions that are substantially similar in all material respects, but not necessarily identical, to those described above and will be entitled to reimbursement from the Trust Fund for the related Non-Serviced Pari Passu Mortgage Loan’spro rata share of any such amounts.
Amendment of the Pooling and Servicing Agreement
The Pooling and Servicing Agreement may be amended by the mutual agreement of the Depositor, the Master Servicers, the Special Servicers, the Trust Advisor, the Certificate
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Administrator and the Trustee, without the consent of any of the Certificateholders, or the consent of any holder of any Pari Passu Companion Loan, (i) to cure any ambiguity, (ii) to correct, modify or supplement any provision therein which may be inconsistent with any other provision therein or to correct any error, (iii) to conform the Pooling and Servicing Agreement to this free writing prospectus (or the private placement memorandum relating to certificates not offered hereby), (iv) to make any other provisions with respect to matters or questions arising under the Pooling and Servicing Agreement which will not be inconsistent with the then-existing provisions, (v) subject to the delivery of an opinion of counsel, to relax or eliminate (A) any requirement under the Pooling and Servicing Agreement imposed by the provisions of the federal income tax law relating to REMICs (if the provisions are amended or clarified such that any such requirement may be relaxed or eliminated) or (B) certain transfer restrictions imposed on the Certificates (if applicable law is amended or clarified such that certain transfer restrictions may be relaxed or eliminated), (vi) as evidenced by an opinion of counsel, either (X) to comply with any requirements imposed by the Code or any successor or amendatory statute or any temporary or final regulation, revenue ruling, revenue procedure or other written official announcement or interpretation relating to federal income tax laws or any such proposed action which, if made effective, would apply retroactively to any of REMIC I, REMIC II or REMIC III or the Grantor Trust at least from the effective date of such amendment, or (Y) to avoid the occurrence of a prohibited transaction or to reduce the incidence of any tax that would arise from any actions taken with respect to the operation of any of REMIC I, REMIC II or REMIC III or the Grantor Trust, (vii) to modify, add to or eliminate certain provisions of the Pooling and Servicing Agreement relating to transfers of Class R Certificates, (viii) to avoid the qualification, downgrade or withdrawal of the rating then assigned to any Class of Certificates to which a rating has been assigned by a Rating Agency at the request of the Depositor (or the placement of the Class on “negative credit watch” status in contemplation of any such action with respect thereto), or (ix) for the purpose of amending the duties and procedures by which the Rule 17g-5 Information Provider is bound;provided that, among other things,
(a) any such amendment for the specific purposes described in clause (iv), (vii) or (ix) above will not adversely affect in any material respect the interests of any Certificateholder or any third-party beneficiary of the Pooling and Servicing Agreement or of any provision thereof, as evidenced by an opinion of counsel to that effect; and
(b) no such amendment will materially adversely affect the rights, or increase the obligations, of any Mortgage Loan Seller under the Pooling and Servicing Agreement or under the related Mortgage Loan Purchase Agreement without the written consent of such Mortgage Loan Seller.
The Pooling and Servicing Agreement may also be amended by the parties thereto with the consent of the holders of Certificates entitled to notless than 66-2/3% of the voting rights allocated to each Class that is materially affected by the amendment for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Pooling and Servicing Agreement or modifying in any manner the rights of Certificateholders;provided that no such amendment may, among other things, (i) reduce in any manner the amount of, or delay the timing of, payments received on the Certificates without the consent of each affected Certificateholder, (ii) reduce the aforesaid percentage of aggregate principal balance or notional amount, as applicable, of each Class of Certificates which are required to consent to any such amendment, without the consent of all the holders of each Class of Certificates affected thereby, (iii) adversely affect the status of any of REMIC I, REMIC II or REMIC III as a REMIC or the Grantor Trust as a grantor trust under the Code, without the consent of 100% of the Certificateholders, (iv) amend any
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section of the Pooling and Servicing Agreement that relates to the amendment thereof without the consent of all the holders of all Certificates of the Class(es) affected thereby, (v) otherwise materially adversely affect any Class of Certificateholders without the consent of all of the Certificateholders of that Class, or (vi) materially adversely affect the rights or increase the obligations of any Mortgage Loan Seller under the Pooling and Servicing Agreement or the related Mortgage Loan Purchase Agreement without the written consent of such Mortgage Loan Seller.
In addition to other limitations described above, no amendment may be made to the Pooling and Servicing Agreement that would adversely affect the swap counterparty under the swap contract without the consent of the swap counterparty. For the avoidance of doubt, any exchange by a holder of a Class A-4FL Certificate of any portion of its aggregate outstanding certificate principal balance for an equal aggregate outstanding certificate principal balance of Class A-4FX Certificates will not be deemed to be an amendment.
In no event may the definition of the Servicing Standard be amended in a manner that would materially adversely affect Certificateholders without a Rating Agency Confirmation and an opinion of counsel delivered to the Trustee and the Certificate Administrator.
Furthermore, no amendment of the Pooling and Servicing Agreement may be consented to by any party to the Pooling and Servicing Agreement unless such party has obtained or received an opinion of counsel to the effect that the amendment is permitted under the Pooling and Servicing Agreement as described above.
Termination of the Pooling and Servicing Agreement
The obligations created by the Pooling and Servicing Agreement will terminate following the earliest of—
1. | the final payment or advance on, or other liquidation of, the last Mortgage Loan or related REO Property remaining in the Trust Fund, |
2. | the purchase of all of the Mortgage Loans and REO Properties remaining in the Trust Fund or held on behalf of the Trust Fund by any single Certificateholder or group of Certificateholders of the Class (if any) that is then entitled to appoint the Subordinate Class Representative, either Master Servicer or either Special Servicer, in that order of preference, and |
3. | the exchange by any single holder of all the Certificates for all of the Mortgage Loans and REO Properties remaining in the Trust Fund. |
Written notice of termination of the Pooling and Servicing Agreement will be given to each Certificateholder. The final distribution to the registered holder of each Certificate will be made only upon surrender and cancellation of that Certificate at the office of the Certificate Administrator or at any other location specified in the notice of termination.
The right of the Certificateholders of the Class (if any) that is then entitled to appoint the Subordinate Class Representative, either Master Servicer or either Special Servicer to purchase all of the Mortgage Loans and REO Properties remaining in the Trust Fund is subject to the conditions (among others) that—
· | the total Stated Principal Balance of the Mortgage Pool is 1.0% or less of the Cut-off Date Pool Balance, |
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· | within 30 days after notice of the election of that person to make the purchase is given, no person with a higher right of priority to make the purchase notifies the other parties to the Pooling and Servicing Agreement of its election to do so, and |
· | if more than one holder or group of Certificateholders of the Class (if any) that is then entitled to appoint the Subordinate Class Representative desire to make the purchase, preference will be given to the holder or group of holders with the largest percentage interest in the relevant Class. |
Any purchase by any single holder or group of Certificateholders of the Class (if any) that is then entitled to appoint the Subordinate Class Representative, either Master Servicer or either Special Servicer of all the Mortgage Loans and REO Properties remaining in the Trust Fund is required to be made at a price equal to:
· | the sum of— |
1. | the aggregate Purchase Price of all the Mortgage Loans remaining in the Trust Fund, other than any Mortgage Loans as to which the Mortgaged Properties have become REO Properties, and |
2. | the appraised value of all REO Properties then included in the Trust Fund, in each case as determined by an appraiser mutually agreed upon by the applicable Master Servicer, the applicable Special Servicer and the Trustee; minus |
· | solely in the case of a purchase by a Master Servicer or a Special Servicer, the total of all amounts payable or reimbursable to the purchaser under the Pooling and Servicing Agreement. |
If any party above, other than National Cooperative Bank, N.A. as the Master Servicer of the National Cooperative Bank, N.A. Mortgage Loans, exercises such purchase option, National Cooperative Bank, N.A., so long as National Cooperative Bank, N.A. is a Master Servicer or a Special Servicer under the Pooling and Servicing Agreement, will be entitled to purchase the remaining National Cooperative Bank, N.A. Mortgage Loans and any related REO Property, and if National Cooperative Bank, N.A. elects to purchase such Mortgage Loans and REO Properties that other party will then purchase only the remaining Mortgage Loans and REO Property that are not being purchased by National Cooperative Bank, N.A.
With respect to the foregoing options to purchase the Mortgage Loans and REO Properties, if both of the Master Servicers or Special Servicers wish to elect to exercise such rights, then the Master Servicer or Special Servicer servicing the greater principal balance of Mortgage Loans shall be entitled to exercise such right, subject to National Cooperative Bank, N.A.’s prior right to acquire the National Cooperative Bank, N.A. Mortgage Loans.
The purchase will result in early retirement of the then-outstanding Certificates. The termination price, exclusive of any portion of the termination price payable or reimbursable to any person other than the Certificateholders, will constitute part of the Available Distribution Amount for the final distribution date. Any person or entity making the purchase will be responsible for reimbursing the parties to the Pooling and Servicing Agreement for all reasonable out-of-pocket costs and expenses incurred by the parties in connection with the purchase.
An exchange by any single holder of all of the Certificates for all of the Mortgage Loans and REO Properties remaining in the Trust Fund may be made by giving written notice to each of the parties to the Pooling and Servicing Agreement no later than 60 days prior to
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the anticipated date of exchange. If an exchange is to occur as described above, then the holder of the Certificates, no later than the business day immediately preceding the distribution date on which the final distribution on the Certificates is to occur, must deposit in the applicable Collection Account amounts that are together equal to all amounts then due and owing to the applicable Master Servicer, the applicable Special Servicer, the Certificate Administrator, the tax administrator, the Trustee and their respective agents under the Pooling and Servicing Agreement. No such exchange may occur until the aggregate principal balance of the Class A-1, A-2, A-3, A-4, A-SB and D Certificates, and the Class A-4FX, A-S, B and C Regular Interests (and, therefore, the Class A-4FL, A-4FX, A-S, B, C and PEX Certificates) is reduced to zero.
The Trustee
Eligibility Requirements
The Trustee is at all times required to be, and will be required to resign if it fails to be, (i) a corporation, bank, trust company or association organized and doing business under the laws of the United States of America or any state thereof or the District of Columbia, authorized under such laws to exercise trust powers, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by federal or state authority or (ii) an institution that maintains the following minimum short-term and long-term unsecured debt ratings (or, in the case of any particular rating, such lower rating as is the subject of a Rating Agency Confirmation by such Rating Agency):
Fitch | Moody’s | KBRA | |
Short-Term Unsecured Debt Rating | “F-1” | “P-1”(1) | A rating equivalent to “P-1” by Moody’s (if rated by KBRA) |
Long-Term Unsecured Debt Rating | “A-” | “A2” if it has a short-term unsecured debt rating of at least “P-1”(1) | A rating equivalent to “A2” by Moody’s (if rated by KBRA) |
(1) | The Trustee may maintain a long-term unsecured debt rating of “Baa2” by Moody’s and a short-term unsecured debt rating of at least “P-2” by Moody’s (or such equivalent rating by Kroll Bond Rating Agency, Inc. (“KBRA“)) if Wells Fargo Bank, National Association, or any successor thereto, in its capacity as a Master Servicer (the “General Master Servicer”), maintains a long-term unsecured debt rating of at least “A2” by Moody’s (or such lower rating as is the subject of a Rating Agency Confirmation by Moody’s). This provision will not, however, impose any obligation on the General Master Servicer to maintain such rating. |
Duties of the Trustee
The Trustee will make no representations as to the validity or sufficiency of the Pooling and Servicing Agreement, the Certificates or any asset or related document and is not accountable for the use or application by the Depositor of any of the Certificates or any of the proceeds of the Certificates, or for the use or application by the Depositor of funds paid in consideration of the assignment of the Mortgage Loans to the Trust or deposited into any fund or account maintained with respect to the Certificates or any account maintained pursuant to the Pooling and Servicing Agreement or for investment of any such amounts. The Pooling and Servicing Agreement generally provides that (i) the Trustee, prior to the occurrence of an Servicer Termination Event and after the curing or waiver of all Servicer Termination Events which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in the Pooling and Servicing Agreement, (ii) if a Servicer Termination Event occurs and is continuing, the Trustee must exercise such of the rights and powers vested in it by the Pooling and Servicing Agreement, and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs, (iii) any permissive right of
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the Trustee contained in the Pooling and Servicing Agreement will not be construed as a duty and (iv) the Trustee will be liable in accordance with the Pooling and Servicing Agreement only to the extent of the obligations specifically imposed upon and undertaken by the Trustee. However, upon receipt of the various Certificates, reports or other instruments required to be furnished to it, the Trustee is required to examine the documents and to determine whether they conform on their face to the requirements of the Pooling and Servicing Agreement. The Certificate Administrator is required to notify Certificateholders of any termination of a Master Servicer or a Special Servicer or appointment of a successor to such Master Servicer or such Special Servicer. The Trustee will be obligated to make any advance required to be made, and not made, by the applicable Master Servicer or the applicable Special Servicer under the Pooling and Servicing Agreement,provided that the Trustee will not be obligated to make any advance that it deems to be a nonrecoverable advance. In addition, the Trustee will not be obligated to make any Servicing Advances with respect to any Non-Serviced Pari Passu Mortgage Loan. The Trustee will be entitled, but not obligated, to rely conclusively on any determination by the applicable Master Servicer or the applicable Special Servicer, that an advance, if made, would be a nonrecoverable advance. The Trustee will be entitled to reimbursement for each advance made by it in the same manner and to the same extent as, but prior to, the applicable Master Servicer. See “—Advances of Delinquent Monthly Debt Service Payments” in this free writing prospectus.
Matters Regarding the Trustee
The Trust Fund will indemnify the Trustee and its directors, officers, employees, agents and affiliates against any and all losses, liabilities, damages, claims or expenses, including, without limitation, reasonable attorneys’ fees, arising with respect to the Pooling and Servicing Agreement, the Mortgage Loans or the Certificates, other than (i) those resulting from the breach of the Trustee’s representations and warranties or from willful misconduct, fraud, bad faith or negligence in the performance of, or negligent disregard of, its duties, (ii) the Trustee’s allocable overhead and (iii) any cost or expense expressly required to be borne by the Trustee.
The Trustee will not be liable for any action reasonably taken, suffered or omitted by it in good faith and believed by it to be authorized by the Pooling and Servicing Agreement. The Trustee will not be required to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties under the Pooling and Servicing Agreement or in the exercise of any of its rights or powers if, in the opinion of that entity, the repayment of those funds or adequate indemnity against that risk or liability is not reasonably assured to it. Also see “—Matters Regarding the Certificate Administrator and the Tax Administrator” above in this free writing prospectus.
With respect to any Non-Serviced Loan Combination serviced pursuant to the another securitization, the related trustee (the “Other Trustee”) will be entitled to indemnification with respect to amounts related to such Non-Serviced Loan Combination pursuant to provisions that are similar to those described above and will be entitled to reimbursement from the Trust Fund for the related Non-Serviced Pari Passu Mortgage Loan’spro rata share of any such amounts.
Provisions similar to the provisions described under the sections of the accompanying prospectus entitled “Description of the Pooling and Servicing Agreements—Duties of the Trustee”, “—Certain Matters Regarding the Trustee” and “—Resignation and Removal of the Trustee” will apply to the Certificate Administrator and the tax administrator.
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Resignation and Removal of the Trustee
The Trustee may at any time resign from its obligations and duties under the Pooling and Servicing Agreement by giving written notice to the Depositor, the Certificate Administrator, the tax administrator, the Master Servicers, the Special Servicers, the Rule 17g-5 Information Provider (who will promptly post such notice to the Rule 17g-5 Information Provider’s Website), and all Certificateholders. Upon receiving the notice of resignation, the Depositor is required to promptly appoint a successor Trustee meeting the requirements set forth above. If no successor Trustee shall have been so appointed and have accepted appointment within 30 days after the giving of the notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee (i) ceases to be eligible to continue as Trustee under the Pooling and Servicing Agreement, or (ii) becomes incapable of acting, or is adjudged bankrupt or insolvent, or a receiver of the Trustee or of its property is appointed, or any public officer takes charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, or (iii) the continuation of the Trustee as such would result in a downgrade, qualification or withdrawal of the rating by the Rating Agencies of any Class of Certificates with a rating as evidenced in writing by the Rating Agencies, then the Depositor may (and, if it fails to do so within ten (10) business days, the requesting Master Servicer must as soon as practicable) remove the Trustee and appoint a successor Trustee meeting the eligibility requirements set forth above. Holders of the Certificates entitled to more than 50% of the voting rights (determined without notionally reducing the principal balances of the Certificates by any Appraisal Reduction Amounts) may, at their expense, at any time remove the Trustee without cause and appoint a successor Trustee.
Any resignation or removal of the Trustee and appointment of a successor trustee will not become effective until acceptance of appointment by the successor trustee meeting the eligibility requirements set forth above. Upon any succession of the Trustee, the predecessor trustee will be entitled to the payment of compensation and reimbursement agreed to under the Pooling and Servicing Agreement for services rendered and expenses incurred prior to the date of removal. The resigning Trustee will be required to pay all reasonable out-of-pocket costs and expenses of each party to the Pooling and Servicing Agreement, the Issuing Entity and each Rating Agency in connection with the resignation of the Trustee and the transfer of its duties (including, but not limited to, reasonable out-of-pocket costs and expenses associated with the engagement of a successor, transferring mortgage files (if applicable) and related information, records and reports to the successor).
All expenses incurred by the Trustee in connection with the transfer of its duties to a successor trustee following the removal of the Trustee without cause are required to be reimbursed to such removed Trustee within thirty (30) days of demand therefor, such reimbursement to be made by the Certificateholders that terminated such Trustee.
Suits, Actions and Proceedings by Certificateholders
No Certificateholder will have any right by virtue of any provision of the Pooling and Servicing Agreement or the Certificates to institute any suit, action or proceeding in equity or at law against any party to the Pooling and Servicing Agreement or the Certificates or any borrower, unless that Certificateholder has previously given to the Trustee a written notice of default, and unless also (except in the case of a default by the Trustee) the holders of Certificates entitled to at least 25% of the voting rights (determined without notionally
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reducing the principal balances of the Certificates by any Appraisal Reduction Amounts) have made written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee under the Pooling and Servicing Agreement and have offered to the Trustee such reasonable indemnity satisfactory to it against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee, for 60 days after its receipt of such notice, request and offer of indemnity, has neglected or refused to institute any such action, suit or proceeding. No one or more holders of Certificates will have any right in any manner whatsoever by virtue of any provision of the Pooling and Servicing Agreement or the Certificates to affect, disturb or prejudice the rights of any other holders of Certificates, or to obtain or seek to obtain priority over or preference to any other such holder (which priority or preference is not otherwise provided for herein), or to enforce any right under the Pooling and Servicing Agreement or the Certificates, except in the manner herein or therein provided and for the equal, ratable and common benefit of all Certificateholders. For the protection and enforcement of the provisions described above, each and every Certificateholder and the Trustee will be entitled to such relief as can be given either at law or in equity.
YIELD AND MATURITY CONSIDERATIONS
Yield Considerations
General. The yield on any Offered Certificate will depend on—
· | the price at which that Certificate is purchased by an investor, |
· | the rate, timing and amount of distributions on that Certificate, and |
· | any losses or shortfalls incurred on that Certificate. |
The rate, timing and amount of distributions on any Offered Certificate will in turn depend on, among other things:
· | the pass-through rate for that Certificate, |
· | the rate and timing of principal payments, including those arising from voluntary and involuntary prepayments, repurchases for material document defects or material breaches of representations, sales of defaulted mortgage loans and REO Properties, exercise of purchase options by holders of mezzanine loans, and other principal collections on the Mortgage Loans, and the extent to which those amounts are to be applied in reduction of the principal balance or notional amount, as applicable, of that Certificate, |
· | the rate and timing of reimbursements made to the applicable Master Servicer, the applicable Special Servicer or the Trustee for nonrecoverable advances and/or for advances previously made in respect of a worked-out Mortgage Loan that are not repaid at the time of the workout, |
· | the rate, timing and severity of Realized Losses and Additional Trust Fund Expenses, as well as Trust Advisor Expenses, and the extent to which those losses and expenses are allocable in reduction of the principal balance of that Certificate or result in reductions or shortfalls in interest distributable to that Certificate, and |
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· | the timing and severity of any Net Aggregate Prepayment Interest Shortfalls and the extent to which those shortfalls result in the reduction of the interest distributions of that Certificate. |
Rate and Timing of Principal Payments. The yield to maturity on the Offered Certificates purchased at a discount or a premium will be affected by the rate and timing of principal distributions on, or otherwise resulting in a reduction of the aggregate principal balances of, those Certificates. In turn, the rate and timing of distributions on, or otherwise resulting in a reduction of the aggregate principal balances of, those Certificates will be directly related to the rate and timing of principal payments on or with respect to the Mortgage Loans. Finally, the rate and timing of principal payments on or with respect to the Mortgage Loans will be affected by their amortization schedules, the dates on which balloon payments are due to occur, any incentives for a borrower to repay its mortgage loan by an anticipated repayment date and the rate and timing of principal prepayments and other unscheduled collections on them, including for this purpose, any prepayments occurring by application of earnout reserves or performance holdback amounts if leasing criteria or other conditions are not satisfied or by reason of sales or other releases of real properties and/or parcels, collections made in connection with liquidations of Mortgage Loans due to defaults, casualties or condemnations affecting the Mortgaged Properties, sales of Mortgage Loans following default or purchases or other removals of Mortgage Loans from the Trust Fund. In some cases, a Mortgage Loan’s amortization schedule will be recast upon the occurrence of certain events, including casualties, condemnations and prepayments in connection with property releases. See “Risk Factors—Risks Related to the Offered Certificates—The Yields to Maturity on the Offered Certificates Depend on a Number of Factors that Cannot Be Predicted with any Certainty” and “—Incorrect Assumptions Regarding Principal Payments and Prepayments May Lead to a Lower than Expected Yield on Your Investment” and “Description of the Mortgage Pool—Certain Terms of the Mortgage Loans—Voluntary Prepayment and Defeasance Provisions” for a discussion of certain of the Mortgage Loans with the above described characteristics.
With respect to any Class of Offered Certificates with a pass-through rate based upon, equal to or limited by the WAC Rate, the respective pass-through rate (and, accordingly, the yield) on those Classes of Offered Certificates could (or, in the case of the Class X-A and X-B Certificates and any other Class of Certificates with a pass-through rate based upon or equal to the WAC Rate, will) be adversely affected if Mortgage Loans with relatively high mortgage interest rates experienced a faster rate of principal payments than Mortgage Loans with relatively low mortgage interest rates.
Prepayments and other early liquidations of the Mortgage Loans will result in distributions on the Offered Certificates of amounts that would otherwise be paid over the remaining terms of those Mortgage Loans. This will tend to shorten the weighted average lives of the Offered Certificates. Defaults on the Mortgage Loans, particularly at or near their maturity dates, may result in significant delays in distributions of principal on the Mortgage Loans and, accordingly, on the Offered Certificates, while work-outs are negotiated or foreclosures are completed. These delays will tend to lengthen the weighted average lives of the Offered Certificates. See “Servicing of the Mortgage Loans and Administration of the Trust Fund—Modifications, Waivers, Amendments and Consents” in this free writing prospectus.
With respect to the Class A-SB Certificates, the extent to which the planned balances are achieved and the sensitivity of the Class A-SB Certificates to principal prepayments on the Mortgage Loans will depend in part on the period of time during which the Class A-1, A-2, A-3 and A-4 Certificates and the Class A-4FX Regular Interest remain outstanding. As such, the Class A-SB Certificates will become more sensitive to the rate of prepayments on the
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Mortgage Loans than they were when the Class A-1, A-2, A-3 and A-4 Certificates and/or the Class A-4FX Regular Interest were outstanding.
The extent to which the yield to maturity on any Offered Certificate may vary from the anticipated yield will depend upon the degree to which the Certificate is purchased at a discount or premium and when, and to what degree, payments of principal on the Mortgage Loans are in turn paid in a reduction of the principal balance of the Certificate. If you purchase your Offered Certificates at a discount, you should consider the risk that a slower than anticipated rate of principal payments on the Mortgage Loans could result in an actual yield to you that is lower than your anticipated yield. If you purchase Class X-A or X-B Certificates or otherwise purchase your Offered Certificates at a premium, you should consider the risk that a faster than anticipated rate of principal payments on the Mortgage Loans could result in an actual yield to you that is lower than your anticipated yield.
If you purchase Class X-A or X-B Certificates, your yield to maturity will be particularly sensitive to the rate and timing of principal payments on the Mortgage Loans. Each payment of principal in reduction of the aggregate principal balance of the Class A-1, A-2, A-3, A-4 or A-SB Certificates and the Class A-4FX or A-S Regular Interest will result in a reduction in the aggregate notional amount of the Class X-A Certificates, and each payment of principal in reduction of the aggregate principal balance of the Class B and C Regular Interests will result in a reduction in the notional amount of the Class X-B Certificates. Accordingly, if principal payments on the Mortgage Loans occur at a rate faster than that assumed at the time of purchase, then your actual yield to maturity with respect to the Class X-A Certificates will, and your actual yield to maturity with respect to the Class X-B Certificates may, be lower than that assumed at the time of purchase. Your yield to maturity would also be adversely affected by sales of Mortgage Loans following default, Mortgage Loan Seller repurchases of Mortgage Loans in connection with a material breach or representation or warranty or other removals of Mortgage Loans from the Trust Fund. Prior to investing in the Class X-A or X-B Certificates, you should fully consider the associated risks, including the risk that an extremely rapid rate of amortization, prepayment or other liquidation of the Mortgage Loans could result in your failure to fully recover your initial investment. The rating(s) on the Class X-A or X-B Certificates do not address whether a purchaser of those certificates would be able to recover its initial investment.
Because the rate of principal payments on or with respect to the Mortgage Loans will depend on future events and a variety of factors, we cannot assure you as to that rate or the rate of principal prepayments in particular.
Even if they are collected and payable on your Offered Certificates, Prepayment Premiums and Yield Maintenance Charges may not be sufficient to offset fully any loss in yield on your Offered Certificates attributable to the related prepayments of, the Mortgage Loans.
Delinquencies and Defaults on the Mortgage Loans. The rate and timing of delinquencies and defaults on the Mortgage Loans will affect—
· | the amount of distributions on your Offered Certificates, |
· | the yield to maturity of your Offered Certificates, |
· | if you are purchasing Principal Balance Certificates, the rate of principal distributions on your Offered Certificates, |
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· | if you are purchasing Class X-A or X-B Certificates, the rate of reductions in the notional amount of your Offered Certificates, and |
· | the weighted average life of your Offered Certificates. |
Delinquencies on the Mortgage Loans, unless covered by advances, may result in shortfalls in distributions of interest and/or principal on your Offered Certificates for the current month. Although any shortfalls in distributions of interest may be made up on future distribution dates, no interest would accrue on those shortfalls. Thus, any shortfalls in distributions of interest would adversely affect the yield to maturity of your Offered Certificates.
If—
· | you calculate the anticipated yield to maturity for your Offered Certificates based on an assumed rate of default on the Mortgage Loans and amount of losses on the Mortgage Loans that is lower than the default rate and amount of losses actually experienced, and |
· | the additional losses result in a reduction of the total distributions on, or the aggregate principal balance of your Offered Certificates, |
then your actual yield to maturity will be lower than you calculated and could, under some scenarios, be negative.
With respect to the Mortgage Loans secured by residential cooperative properties, certain of the Mortgage Loans have subordinate secured debt held by National Cooperative Bank, N.A. or its affiliates with interest rates that are based on LIBOR, which will result in higher debt service payments, and a correspondingly higher likelihood of default during times where LIBOR increases above a certain threshold. In addition, the related intercreditor agreements do not include “standstill” provisions and, as a result, in the event any subordinate secured debt defaults and the holder of such subordinate secured debt, which may be National Cooperative Bank, N.A., begins foreclosure proceedings, a default will occur with respect to the related Mortgage Loan which may result in a prepayment of such Mortgage Loan during a time in which it is otherwise locked out or at a time in which the Mortgage Loan was otherwise performing. See “Description of the Mortgage Pool—Additional Debt Financing For Mortgage Loans Secured by Residential Cooperatives” in this free writing prospectus.
The timing of any loss on a liquidated Mortgage Loan that results in a reduction of the total distributions on or the aggregate principal balance of your Offered Certificates will also affect your actual yield to maturity, even if the rate of defaults and severity of losses are consistent with your expectations. In general, the earlier your loss occurs, the greater the effect on your yield to maturity.
The yield on your Certificates will also depend on the extent to which losses and expenses experienced by the Trust Fund are allocated to reduce your certificate principal balance or otherwise reduce amounts distributable to you. The notional amount of the Class X-A and X-B Certificates will be reduced by any Realized Losses with respect to the Mortgage Loans or Additional Trust Fund Expenses allocated to reduce the classes of Principal Balance Certificates or Regular Interests on which that notional amount is based. Because the Control-Eligible Certificates do not provide credit support to other Classes of Certificates in respect of Trust Advisor Expenses other than Designated Trust Advisor Expenses, the yield on those other Classes of Certificates may be affected by losses arising
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from such Trust Advisor Expenses at a time when other losses would not have affected their yield.
Even if losses on the Mortgage Loans do not result in a reduction of the total distributions on, or the aggregate principal balance of your Offered Certificates, the losses may still affect the timing of distributions on, and the weighted average life and yield to maturity of your Offered Certificates.
In addition, if the applicable Master Servicer, the applicable Special Servicer or the Trustee is reimbursed for any advance made by it that has been determined to be nonrecoverable out of collections on the related Mortgage Loan, then that advance (together with accrued interest thereon) will, to the fullest extent permitted, be reimbursed first out of the principal portion of current debt service advances and payments and other collections of principal otherwise distributable on the Certificates, prior to being deemed reimbursed out of payments and other collections of interest on the Mortgage Pool otherwise distributable on the Certificates. Any such reimbursement from advances and collections of principal will reduce the amount of principal otherwise distributable on the Certificates on the related distribution date.
In the event that any advance (including any interest accrued thereon) with respect to a Mortgage Loan remains unreimbursed following the time that such Mortgage Loan is modified as a Specially Serviced Mortgage Loan, the applicable Master Servicer or the Trustee, as applicable, will be entitled to reimbursement for that advance (even though that advance has not been determined to be nonrecoverable from collections on the related Mortgage Loan), out of amounts in the Collection Accounts representing the principal portion of current debt service advances and payments and other collections of principal after the application of those advances and collections of principal to reimburse any party for nonrecoverable debt service advances and Servicing Advances as contemplated by the prior paragraph. Any such reimbursement payments will reduce the amount of principal otherwise distributable on the Certificates on the related distribution date.
Relevant Factors. The following factors, among others, will affect the rate and timing of principal payments and defaults and the severity of losses on or with respect to the Mortgage Loans:
· | prevailing interest rates; |
· | the terms of the Mortgage Loans, including— |
1. | provisions that impose prepayment Lock-out Periods or require Yield Maintenance Charges or Prepayment Premiums; |
2. | due-on-sale and due-on-encumbrance provisions; |
3. | provisions requiring that upon occurrence of certain events, funds held in escrow or proceeds from letters of credit be applied to principal; |
4. | the exercise of purchase options by tenants or others and other sales of real properties and/or parcels by borrowers that can result in prepayments of principal, including during a Lock-out Period for the Mortgage Loan; and |
5. | amortization terms; |
· | the demographics and relative economic vitality of the areas in which the Mortgaged Properties are located; |
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· | the general supply and demand for commercial, multifamily and manufactured housing community rental space of the type available at the Mortgaged Properties in the areas in which those properties are located; |
· | the quality of management of the Mortgaged Properties; |
· | the servicing of the Mortgage Loans; |
· | possible changes in tax laws; and |
· | other opportunities for investment. |
See “Risk Factors”, “Description of the Mortgage Pool”, “Servicing of the Mortgage Loans and Administration of the Trust Fund” in this free writing prospectus, the “Summaries of the Fifteen Largest Mortgage Loans” attached as Annex A-3 to this free writing prospectus, and “Risk Factors” and “Description of the Pooling and Servicing Agreements” in the accompanying prospectus.
The rate of prepayment on the Mortgage Loans is likely to be affected by prevailing market interest rates for Mortgage Loans of a comparable type, term and risk level. When the prevailing market interest rate is below the annual rate at which a Mortgage Loan accrues interest, the related borrower may have an increased incentive to refinance the Mortgage Loan. Conversely, to the extent prevailing market interest rates exceed the annual rate at which a Mortgage Loan accrues interest, the related borrower may be less likely to voluntarily prepay the Mortgage Loan.
Depending on prevailing market interest rates, the outlook for market interest rates and economic conditions generally, some underlying borrowers may sell their Mortgaged Properties in order to realize their equity in those properties, to meet cash flow needs or to make other investments. In addition, some underlying borrowers may be motivated by federal and state tax laws, which are subject to change, to sell their Mortgaged Properties.
A number of the underlying borrowers are partnerships. The bankruptcy of the general partner in a partnership may result in the dissolution of the partnership. The dissolution of a borrower partnership, the winding-up of its affairs and the distribution of its assets could result in an acceleration of its payment obligations under the related Mortgage Loan.
Neither we nor any of the underwriters makes any representation regarding:
· | the particular factors that will affect the rate and timing of prepayments and defaults on the Mortgage Loans; |
· | the relative importance of those factors; |
· | the percentage of the aggregate principal balance of the Mortgage Loans that will be prepaid or as to which a default will have occurred as of any particular date; or |
· | the overall rate of prepayment or default on the Mortgage Loans. |
Delay in Payment of Distributions. Because monthly distributions will not be made to Certificateholders until, at the earliest, the 15th day of the month following the month in which interest accrued on the Offered Certificates, the effective yield to the holders of the Offered Certificates will be lower than the yield that would otherwise be produced by the applicable pass-through rate and purchase prices, assuming the prices did not account for the delay.
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Weighted Average Life
For purposes of this free writing prospectus, the weighted average life of any Offered Certificate with a principal balance refers to the average amount of time that will elapse from the assumed settlement date of June 26, 2015 until each dollar to be applied in reduction of the aggregate principal balance of those Certificates is paid to the investor. For purposes of this “Yield and Maturity Considerations” section, the weighted average life of any Offered Certificate with a principal balance is determined by:
· | multiplying the amount of each principal distribution on the Offered Certificate by the number of years from the assumed settlement date to the related distribution date; |
· | summing the results; and |
· | dividing the sum by the total amount of the reductions in the principal balance of the Offered Certificate. |
Accordingly, the weighted average life of any Offered Certificate with a principal balance will be influenced by, among other things, the rate at which principal of the Mortgage Loans is paid or otherwise collected or advanced and the extent to which those payments, collections and/or advances of principal are in turn applied in reduction of the principal balance of that Certificate.
The tables set forth below show, with respect to each Class of Offered Certificates with principal balances,
· | the weighted average life of that Class, and |
· | the percentage of the initial aggregate principal balance of that Class that would be outstanding after each of the specified dates, |
based upon each of the indicated levels of CPR and the Structuring Assumptions.
The actual characteristics and performance of the Mortgage Loans will differ from the assumptions used in calculating the tables below. Neither we nor any of the underwriters makes any representation that the Mortgage Loans will behave in accordance with the Structuring Assumptions set forth in this free writing prospectus. The tables below are hypothetical in nature and are provided only to give a general sense of how the principal cash flows might behave under the assumed prepayment scenarios. Any difference between the assumptions used in calculating the tables below and the actual characteristics and performance of the Mortgage Loans, or actual prepayment experience, will affect the percentages of initial aggregate principal balances outstanding over time and the weighted average lives of the respective Classes of the Offered Certificates. You must make your own decisions as to the appropriate prepayment, liquidation and loss assumptions to be used in deciding whether to purchase any Offered Certificate.
Prepayments on Mortgage Loans are commonly measured relative to a prepayment standard or model. The prepayment model used in this free writing prospectus is the “constant prepayment rate” or “CPR” model, which represents an assumed constant rate of prepayment each month, which is expressed on aper annum basis, relative to the then-outstanding principal balance of a pool of loans (in this case, the Mortgage Loans) for the life of those loans. The CPR model does not purport to be either an historical description of the prepayment experience of any pool of loans or a prediction of the anticipated rate of prepayment of any pool of loans, including the Mortgage Pool. We do not make any representations about the appropriateness of the CPR model.
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Percentages of Initial Certificate Principal Balance Outstanding for the
Class A-1 Certificates at the Specified Percentages of CPR
0% CPR During Lock-out, Defeasance or Yield Maintenance and Prepayment Premium
– otherwise at indicated CPR
Distribution Date in | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR |
Closing Date | 100% | 100% | 100% | 100% | 100% |
June 2016 | 86% | 86% | 86% | 86% | 86% |
June 2017 | 68% | 68% | 68% | 68% | 68% |
June 2018 | 44% | 44% | 44% | 44% | 44% |
June 2019 | 13% | 13% | 13% | 13% | 13% |
June 2020 and thereafter | 0% | 0% | 0% | 0% | 0% |
Weighted average life (years) | 2.59 | 2.59 | 2.59 | 2.59 | 2.58 |
Percentages of Initial Certificate Principal Balance Outstanding for the
Class A-2 Certificates at the Specified Percentages of CPR
0% CPR During Lock-out, Defeasance or Yield Maintenance and Prepayment Premium
– otherwise at indicated CPR
Distribution Date in | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR |
Closing Date | 100% | 100% | 100% | 100% | 100% |
June 2016 | 100% | 100% | 100% | 100% | 100% |
June 2017 | 100% | 100% | 100% | 100% | 100% |
June 2018 | 100% | 100% | 100% | 100% | 100% |
June 2019 | 100% | 100% | 100% | 100% | 100% |
June 2020 and thereafter | 0% | 0% | 0% | 0% | 0% |
Weighted average life (years) | 4.77 | 4.75 | 4.73 | 4.69 | 4.50 |
Percentages of Initial Certificate Principal Balance Outstanding for the
Class A-3 Certificates at the Specified Percentages of CPR
0% CPR During Lock-out, Defeasance or Yield Maintenance and Prepayment Premium
– otherwise at indicated CPR
Distribution Date in | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR |
Closing Date | 100% | 100% | 100% | 100% | 100% |
June 2016 | 100% | 100% | 100% | 100% | 100% |
June 2017 | 100% | 100% | 100% | 100% | 100% |
June 2018 | 100% | 100% | 100% | 100% | 100% |
June 2019 | 100% | 100% | 100% | 100% | 100% |
June 2020 | 100% | 100% | 100% | 100% | 100% |
June 2021 | 100% | 100% | 100% | 100% | 100% |
June 2022 | 100% | 100% | 100% | 100% | 100% |
June 2023 | 100% | 100% | 100% | 100% | 100% |
June 2024 | 100% | 100% | 99% | 99% | 93% |
June 2025 and thereafter | 0% | 0% | 0% | 0% | 0% |
Weighted average life (years) | 9.78 | 9.73 | 9.68 | 9.62 | 9.43 |
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Percentages of Initial Certificate Principal Balance Outstanding for the
Class A-4 Certificates at the Specified Percentages of CPR
0% CPR During Lock-out, Defeasance or Yield Maintenance and Prepayment Premium
– otherwise at indicated CPR
Distribution Date in | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR |
Closing Date | 100% | 100% | 100% | 100% | 100% |
June 2016 | 100% | 100% | 100% | 100% | 100% |
June 2017 | 100% | 100% | 100% | 100% | 100% |
June 2018 | 100% | 100% | 100% | 100% | 100% |
June 2019 | 100% | 100% | 100% | 100% | 100% |
June 2020 | 100% | 100% | 100% | 100% | 100% |
June 2021 | 100% | 100% | 100% | 100% | 100% |
June 2022 | 100% | 100% | 100% | 100% | 100% |
June 2023 | 100% | 100% | 100% | 100% | 100% |
June 2024 | 100% | 100% | 100% | 100% | 100% |
June 2025 and thereafter | 0% | 0% | 0% | 0% | 0% |
Weighted average life (years) | 9.91 | 9.91 | 9.89 | 9.85 | 9.66 |
Percentages of Initial Certificate Principal Balance Outstanding for the
Class A-SB Certificates at the Specified Percentages of CPR
0% CPR During Lock-out, Defeasance or Yield Maintenance and Prepayment Premium
– otherwise at indicated CPR
Distribution Date in | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR |
Closing Date | 100% | 100% | 100% | 100% | 100% |
June 2016 | 100% | 100% | 100% | 100% | 100% |
June 2017 | 100% | 100% | 100% | 100% | 100% |
June 2018 | 100% | 100% | 100% | 100% | 100% |
June 2019 | 100% | 100% | 100% | 100% | 100% |
June 2020 | 99% | 99% | 99% | 99% | 99% |
June 2021 | 78% | 78% | 78% | 78% | 78% |
June 2022 | 56% | 56% | 57% | 57% | 57% |
June 2023 | 34% | 35% | 35% | 35% | 36% |
June 2024 | 12% | 12% | 12% | 12% | 12% |
June 2025 and thereafter | 0% | 0% | 0% | 0% | 0% |
Weighted average life (years) | 7.29 | 7.29 | 7.30 | 7.30 | 7.31 |
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Percentages of Initial Certificate Principal Balance Outstanding for the
Class A-S Certificates at the Specified Percentages of CPR
0% CPR During Lock-out, Defeasance or Yield Maintenance and Prepayment Premium
– otherwise at indicated CPR
Distribution Date in | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR |
Closing Date | 100% | 100% | 100% | 100% | 100% |
June 2016 | 100% | 100% | 100% | 100% | 100% |
June 2017 | 100% | 100% | 100% | 100% | 100% |
June 2018 | 100% | 100% | 100% | 100% | 100% |
June 2019 | 100% | 100% | 100% | 100% | 100% |
June 2020 | 100% | 100% | 100% | 100% | 100% |
June 2021 | 100% | 100% | 100% | 100% | 100% |
June 2022 | 100% | 100% | 100% | 100% | 100% |
June 2023 | 100% | 100% | 100% | 100% | 100% |
June 2024 | 100% | 100% | 100% | 100% | 100% |
June 2025 and thereafter | 0% | 0% | 0% | 0% | 0% |
Weighted average life (years) | 9.97 | 9.97 | 9.97 | 9.96 | 9.72 |
Percentages of Initial Certificate Principal Balance Outstanding for the
Class B Certificates at the Specified Percentages of CPR
0% CPR During Lock-out, Defeasance or Yield Maintenance and Prepayment Premium
– otherwise at indicated CPR
Distribution Date in | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR |
Closing Date | 100% | 100% | 100% | 100% | 100% |
June 2016 | 100% | 100% | 100% | 100% | 100% |
June 2017 | 100% | 100% | 100% | 100% | 100% |
June 2018 | 100% | 100% | 100% | 100% | 100% |
June 2019 | 100% | 100% | 100% | 100% | 100% |
June 2020 | 100% | 100% | 100% | 100% | 100% |
June 2021 | 100% | 100% | 100% | 100% | 100% |
June 2022 | 100% | 100% | 100% | 100% | 100% |
June 2023 | 100% | 100% | 100% | 100% | 100% |
June 2024 | 100% | 100% | 100% | 100% | 100% |
June 2025 and thereafter | 0% | 0% | 0% | 0% | 0% |
Weighted average life (years) | 9.97 | 9.97 | 9.97 | 9.97 | 9.72 |
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Percentages of Initial Certificate Principal Balance Outstanding for the
Class C Certificates at the Specified Percentages of CPR
0% CPR During Lock-out, Defeasance or Yield Maintenance and Prepayment Premium
– otherwise at indicated CPR
Distribution Date in | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR |
Closing Date | 100% | 100% | 100% | 100% | 100% |
June 2016 | 100% | 100% | 100% | 100% | 100% |
June 2017 | 100% | 100% | 100% | 100% | 100% |
June 2018 | 100% | 100% | 100% | 100% | 100% |
June 2019 | 100% | 100% | 100% | 100% | 100% |
June 2020 | 100% | 100% | 100% | 100% | 100% |
June 2021 | 100% | 100% | 100% | 100% | 100% |
June 2022 | 100% | 100% | 100% | 100% | 100% |
June 2023 | 100% | 100% | 100% | 100% | 100% |
June 2024 | 100% | 100% | 100% | 100% | 100% |
June 2025 and thereafter | 0% | 0% | 0% | 0% | 0% |
Weighted average life (years) | 9.97 | 9.97 | 9.97 | 9.97 | 9.72 |
Percentages of Initial Certificate Principal Balance Outstanding for the
Class PEX Certificates at the Specified Percentages of CPR
0% CPR During Lock-out, Defeasance or Yield Maintenance and Prepayment Premium
– otherwise at indicated CPR
Distribution Date in | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR |
Closing Date | 100% | 100% | 100% | 100% | 100% |
June 2016 | 100% | 100% | 100% | 100% | 100% |
June 2017 | 100% | 100% | 100% | 100% | 100% |
June 2018 | 100% | 100% | 100% | 100% | 100% |
June 2019 | 100% | 100% | 100% | 100% | 100% |
June 2020 | 100% | 100% | 100% | 100% | 100% |
June 2021 | 100% | 100% | 100% | 100% | 100% |
June 2022 | 100% | 100% | 100% | 100% | 100% |
June 2023 | 100% | 100% | 100% | 100% | 100% |
June 2024 | 100% | 100% | 100% | 100% | 100% |
June 2025 and thereafter | 0% | 0% | 0% | 0% | 0% |
Weighted average life (years) | 9.97 | 9.97 | 9.97 | 9.96 | 9.72 |
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Percentages of Initial Certificate Principal Balance Outstanding for the
Class D Certificates at the Specified Percentages of CPR
0% CPR During Lock-out, Defeasance or Yield Maintenance and Prepayment Premium
– otherwise at indicated CPR
Distribution Date in | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR |
Closing Date | 100% | 100% | 100% | 100% | 100% |
June 2016 | 100% | 100% | 100% | 100% | 100% |
June 2017 | 100% | 100% | 100% | 100% | 100% |
June 2018 | 100% | 100% | 100% | 100% | 100% |
June 2019 | 100% | 100% | 100% | 100% | 100% |
June 2020 | 100% | 100% | 100% | 100% | 100% |
June 2021 | 100% | 100% | 100% | 100% | 100% |
June 2022 | 100% | 100% | 100% | 100% | 100% |
June 2023 | 100% | 100% | 100% | 100% | 100% |
June 2024 | 100% | 100% | 100% | 100% | 100% |
June 2025 and thereafter | 0% | 0% | 0% | 0% | 0% |
Weighted average life (years) | 9.97 | 9.97 | 9.97 | 9.97 | 9.72 |
Yield Sensitivity of the Class X-A and X-B Certificates
The yield to investors on the Class X-A Certificates will be highly sensitive to the rate and timing of principal payments, including voluntary and involuntary prepayments, on the Mortgage Loans to the extent such prepayments are allocated to the Class A-1, A-2, A-3, A-4 or A-SB Certificates or the Class A-4FX or A-S Regular Interest and the default and loss experience on the Mortgage Loans to the extent that losses reduce the principal balances of the Class A-1, A-2, A-3, A-4 or A-SB Certificates or the Class A-4FX or A-S Regular Interest. The yield to investors on the Class X-B Certificates will be highly sensitive to the rate and timing of principal payments, including voluntary and involuntary prepayments, on the Mortgage Loans to the extent such prepayments are allocated to the Class B or C Regular Interests and the default and loss experience of the Mortgage Loans to the extent that losses reduce the principal balance of the Class B or C Regular Interests. If you are contemplating an investment in the Class X-A or X-B Certificates, you should fully consider the associated risks, including the risk that an extremely rapid rate of prepayment and/or liquidation of the Mortgage Loans could result in your failure to fully recover your initial investment. Prepayment Premiums and Yield Maintenance Charges may not be sufficient to offset the negative effects on yield caused by prepayments. In addition, no Prepayment Premiums or Yield Maintenance Charges are payable in connection with prepayments from casualty insurance proceeds and condemnation awards, certain repurchases for material document defects or material breaches of representations, the exercise of purchase options and the optional termination of the Trust.
Pre-Tax Yield to Maturity Tables
The tables set forth below show the pre-tax corporate bond equivalent yields to maturity with respect to each Class of Offered Certificates. We prepared these tables using the Structuring Assumptions (except as otherwise described herein), and further assuming (a) the specified purchase prices, and (b) the indicated prepayment scenarios. The assumed purchase prices are expressed as a percentage of the initial total notional amount or principal balance, as applicable, of the respective Class of Offered Certificates and are exclusive of accrued interest.
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The yields set forth in the tables were calculated by:
· | determining the monthly discount rate that, when applied to the assumed stream of cash flows to be paid on the respective Class of Offered Certificates, would cause the discounted present value of that assumed stream of cash flows to equal— |
1. | the related assumed purchase price, plus |
2. | accrued interest at the initial pass-through rate for the applicable Class of Offered Certificates from and including June 1, 2015 to but excluding the assumed settlement date; and |
· | converting those monthly discount rates to corporate bond equivalent rates. |
Those calculations do not take into account variations that may occur in the interest rates at which investors may be able to reinvest funds received by them as distributions on their Certificates. Consequently, they do not purport to reflect the return on any investment on a Class of offered when reinvestment rates are considered.
Pre-Tax Yield to Maturity (CBE) of the Class A-1 Certificates
at the Specified Percentages of CPR
0% CPR During Lock-out, Defeasance or Yield Maintenance and Prepayment Premium
– otherwise at indicated CPR
Assumed Price (in 32nds) | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR |
Pre-Tax Yield to Maturity (CBE) of the Class A-2 Certificates
at the Specified Percentages of CPR
0% CPR During Lock-out, Defeasance or Yield Maintenance and Prepayment Premium
– otherwise at indicated CPR
Assumed Price (in 32nds) | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR |
380 |
Pre-Tax Yield to Maturity (CBE) of the Class A-3 Certificates
at the Specified Percentages of CPR
0% CPR During Lock-out, Defeasance or Yield Maintenance and Prepayment Premium
– otherwise at indicated CPR
Assumed Price (in 32nds) | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR |
Pre-Tax Yield to Maturity (CBE) of the Class A-4 Certificates
at the Specified Percentages of CPR
0% CPR During Lock-out, Defeasance or Yield Maintenance and Prepayment Premium
– otherwise at indicated CPR
Assumed Price (in 32nds) | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR |
Pre-Tax Yield to Maturity (CBE) of the Class A-SB Certificates
at the Specified Percentages of CPR
0% CPR During Lock-out, Defeasance or Yield Maintenance and Prepayment Premium
– otherwise at indicated CPR
Assumed Price (in 32nds) | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR |
381 |
Pre-Tax Yield to Maturity (CBE) of the Class A-S Certificates
at the Specified Percentages of CPR
0% CPR During Lock-out, Defeasance or Yield Maintenance and Prepayment Premium
– otherwise at indicated CPR
Assumed Price (in 32nds) | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR |
Pre-Tax Yield to Maturity (CBE) of the Class X-A Certificates
at the Specified Percentages of CPR
0% CPR During Lock-out, Defeasance or Yield Maintenance and Prepayment Premium
– otherwise at indicated CPR
Assumed Price (in 32nds) | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR |
Pre-Tax Yield to Maturity (CBE) of the Class X-B Certificates
at the Specified Percentages of CPR
0% CPR During Lock-out, Defeasance or Yield Maintenance and Prepayment Premium
– otherwise at indicated CPR
Assumed Price (in 32nds) | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR |
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Pre-Tax Yield to Maturity (CBE) of the Class B Certificates
at the Specified Percentages of CPR
0% CPR During Lock-out, Defeasance or Yield Maintenance and Prepayment Premium
– otherwise at indicated CPR
Assumed Price (in 32nds) | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR |
Pre-Tax Yield to Maturity (CBE) of the Class C Certificates
at the Specified Percentages of CPR
0% CPR During Lock-out, Defeasance or Yield Maintenance and Prepayment Premium
– otherwise at indicated CPR
Assumed Price (in 32nds) | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR |
Pre-Tax Yield to Maturity (CBE) of the Class PEX Certificates
at the Specified Percentages of CPR
0% CPR During Lock-out, Defeasance or Yield Maintenance and Prepayment Premium
– otherwise at indicated CPR
Assumed Price (in 32nds) | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR |
383 |
Pre-Tax Yield to Maturity (CBE) of the Class D Certificates
at the Specified Percentages of CPR
0% CPR During Lock-out, Defeasance or Yield Maintenance and Prepayment Premium
– otherwise at indicated CPR
Assumed Price (in 32nds) | 0% CPR | 25% CPR | 50% CPR | 75% CPR | 100% CPR |
The characteristics of the Mortgage Loans will differ in some respects from those assumed in preparing the tables. The tables are presented for illustrative purposes only. Neither the Mortgage Pool nor any Mortgage Loan will prepay at any constant rate, and it is unlikely that the Mortgage Loans will prepay in a manner consistent with any designated scenario for the tables. In addition, we cannot assure you that—
· | the Mortgage Loans will prepay at any particular rate, |
· | the Mortgage Loans will not prepay, involuntarily or otherwise, during Lock-out Periods (including any contemporaneous periods when defeasance is permitted) or during any period when principal prepayments are required to be accompanied by a Prepayment Premium or Yield Maintenance Charge (including any contemporaneous period when defeasance is permitted), |
· | the Mortgage Loans will not default or that the Mortgage Loans will default at any particular rate, |
· | the actual pre-tax yields on, or any other distribution characteristics of, any Class of Offered Certificates will correspond to any of the information shown in the tables set forth above, or |
· | the total purchase prices of the Offered Certificates will be as assumed. |
For federal income tax information reporting, the prepayment assumption used in reporting original issue discount or the amortization of premium, if any, for an Offered Certificate will be that—
· | each ARD Loan is repaid in full on its Anticipated Repayment Date, |
· | no Mortgage Loan will otherwise be prepaid prior to maturity, and |
· | there will be no extension of the maturity of any Mortgage Loan. |
No representation is made that the Mortgage Loans will in fact be repaid in accordance with this assumption or that the IRS will not challenge on audit the prepayment assumption used. You must make your own decision as to the appropriate assumptions, including prepayment and default assumptions, to be used in deciding whether to purchase any Offered Certificates.
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SERVICING OF THE MORTGAGE LOANS AND ADMINISTRATION OF THE TRUST FUND
General
The servicing and administration of the Mortgage Loans (other than any Non-Serviced Pari Passu Mortgage Loan) and any REO Properties (other than any interest in REO Property acquired with respect to any Non-Serviced Loan Combination) will be governed by a Pooling and Servicing Agreement to be dated as of June 1, 2015 (the “Pooling and Servicing Agreement”), by and among the Depositor, the Master Servicers, the Special Servicers, the Trust Advisor, the Certificate Administrator and the Trustee. In this “Servicing of the Mortgage Loans and Administration of the Trust Fund” section, we describe some of the provisions of the Pooling and Servicing Agreement relating to the servicing and administration of such Mortgage Loans and REO Properties. You should refer to the accompanying prospectus, in particular the section captioned “Description of the Pooling and Servicing Agreements”, for additional important information regarding provisions of the Pooling and Servicing Agreement that relate to the rights and obligations of the Master Servicers and the Special Servicers.
As used herein, references to the Mortgage Loans, when discussing servicing activities of the Mortgage Loans do not include, unless otherwise specifically indicated, Non-Serviced Pari Passu Mortgage Loans. In certain instances references are made that specifically exclude Non-Serviced Pari Passu Mortgage Loans from the servicing provisions in this free writing prospectus by indicating actions are taken with respect to the Mortgage Loans “other than the Non-Serviced Pari Passu Mortgage Loans” or “except with respect to the Non-Serviced Pari Passu Mortgage Loans” or words of similar import. These exclusions are intended to highlight particular provisions to draw prospective investors’ attention to the fact that the Master Servicers, Special Servicers and Trustee are not responsible for the particular servicing or administrative activity and are not intended to imply that when other servicing actions are described in this free writing prospectus without such specific carveouts, that the Master Servicers, Special Servicers or Trustee are responsible for those duties with respect to each Non-Serviced Pari Passu Mortgage Loan. Servicing of the Brickyard Square Mortgage Loan will be handled under the WFCM 2015-C28 Pooling and Servicing Agreement and servicing of the Bella Luna / San Lucas Mortgage Loan will be handled under the WFCM 2015-LC20 Pooling and Servicing Agreement. While the WFCM 2015-C28 Pooling and Servicing Agreement and the WFCM 2015-LC20 Pooling and Servicing Agreement are each substantially similar in all material respects, but not necessarily identical, to the servicing provisions of the Pooling and Servicing Agreement discussed in this free writing prospectus, there may be differences and prospective investors are nonetheless encouraged to review “—Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations” in this free writing prospectus for a discussion of certain considerations related to the servicing of the Brickyard Square Mortgage Loan and the Bella Luna / San Lucas Mortgage Loan.
In general, subject to the more specific discussions in the other subsections of this “Servicing of the Mortgage Loans and Administration of the Trust Fund” section, each Master Servicer will be responsible for the servicing and administration of—
· | all Mortgage Loans (other than any Non-Serviced Pari Passu Mortgage Loans) for which it acts as Master Servicer and as to which no Servicing Transfer Event has occurred and is continuing, and |
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· | all worked-out Mortgage Loans (other than any Non-Serviced Pari Passu Mortgage Loans) which have become Corrected Mortgage Loans for which it acts as Master Servicer and as to which no new Servicing Transfer Event has occurred. |
Each Master Servicer and each Special Servicer will each be responsible for servicing and administering the Mortgage Loans (other than any Non-Serviced Pari Passu Mortgage Loans) and any REO Properties (other than any REO property acquired with respect to any Non-Serviced Loan Combination) for which it is responsible, directly or through sub-servicers (including primary servicers), in accordance with the “Servicing Standard”, which means:
· | in the best interests and for the benefit of the Certificateholders (as determined by the applicable Master Servicer or Special Servicer, as the case may be, in its good faith and reasonable judgment), as a collective whole, |
· | in accordance with any and all applicable laws, the terms of the Pooling and Servicing Agreement, the terms of the respective Mortgage Loans (provided that in the event a Master Servicer or a Special Servicer, as applicable, in its reasonably exercised judgment determines that following the terms of any Mortgage Loan document would or potentially would result in an Adverse REMIC Event (for which determination, such Master Servicer and such Special Servicer will be entitled to rely on advice of counsel, the cost of which will be reimbursed as a Trust expense), such Master Servicer or such Special Servicer, as applicable, must comply with the REMIC provisions of the Code to the extent necessary to avoid an Adverse REMIC Event), and |
· | to the extent consistent with the foregoing, in accordance with the following standards: |
· | with the same care, skill, prudence and diligence as it services and administers comparable mortgage loans and manages real properties on behalf of third parties or on behalf of itself, whichever is the higher standard with respect to mortgage loans and REO properties that are comparable to the Mortgage Loans and any REO Properties for which it is responsible under the Pooling and Servicing Agreement, giving due consideration to customary and usual standards of practice utilized by prudent institutional commercial mortgage loan servicers under comparable circumstances; |
· | with a view to— |
1. | in the case of the applicable Master Servicer, the timely collection of all scheduled payments of principal and interest (including any balloon payment) under those Mortgage Loans, |
2. | in the case of the applicable Master Servicer, the full collection of all Yield Maintenance Charges and Prepayment Premiums that may become payable under those Mortgage Loans, and |
3. | in the case of the applicable Special Servicer, if a Mortgage Loan comes into and continues in default and, in the good faith and reasonable judgment of such Special Servicer, no satisfactory arrangements can be made for the collection of the delinquent payments, including payments of Yield Maintenance Charges, Prepayment Premiums, Default Interest and late payment charges, or the related Mortgaged Property becomes an REO |
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Property, the maximization of the recovery of principal and interest on that Defaulted Mortgage Loan to the Certificateholders, as a collective whole, on a present value basis; and |
· | without regard to any potential conflict of interest arising from— |
1. | any known relationship that the applicable Master Servicer or the applicable Special Servicer, as the case may be, or any of its affiliates may have with any of the underlying borrowers, any of the Mortgage Loan Sellers or any other party to the Pooling and Servicing Agreement, |
2. | the ownership of any Certificate by the applicable Master Servicer or the applicable Special Servicer, or either of their respective affiliates, as the case may be, |
3. | the obligation of the applicable Master Servicer to make advances or otherwise to incur servicing expenses with respect to any Mortgage Loan or REO Property serviced or administered, respectively, under the Pooling and Servicing Agreement, |
4. | the obligation of the applicable Special Servicer to make, or to direct the applicable Master Servicer to make, Servicing Advances or otherwise to incur servicing expenses with respect to any Mortgage Loan or REO Property serviced or administered, respectively, under the Pooling and Servicing Agreement, |
5. | the right of the applicable Master Servicer or the applicable Special Servicer, as the case may be, or any of its affiliates to receive reimbursement of costs, or the sufficiency of any compensation payable to it, under the Pooling and Servicing Agreement or with respect to any particular transaction, |
6. | the ownership, servicing and/or management by the applicable Master Servicer or applicable Special Servicer, as the case may be, or any of their respective affiliates, of any other mortgage loans or real property, |
7. | the ownership by the applicable Master Servicer or the applicable Special Servicer, as the case may be, or any of their respective affiliates of any other debt owed by, or secured by ownership interests in, any of the borrowers or any affiliate of a borrower, and |
8. | the obligations of the applicable Master Servicer or the applicable Special Servicer, as the case may be, or any of their respective affiliates to repurchase any Mortgage Loan from the Trust Fund, or to indemnify the Trust Fund, in any event as a result of a material breach or a material document defect. |
For discussions of certain servicing-related issues concerning the Non-Serviced Loan Combinations, see “—Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations” below, as well as “Description of the Mortgage Pool—Loan Combinations” in this free writing prospectus.
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As used in this free writing prospectus, a “Specially Serviced Mortgage Loan” means any Mortgage Loan (other than any Non-Serviced Pari Passu Mortgage Loan), including any REO Mortgage Loan, for which any of the following events (each, a “Servicing Transfer Event”) has occurred:
1. | the related borrower fails to make when due any balloon payment, and the borrower has not delivered to the applicable Master Servicer or the applicable Special Servicer, on or before the Due Date of such balloon payment, a written and fully executed (subject only to customary final closing conditions) refinancing commitment from an acceptable lender and reasonably satisfactory in form and substance to the applicable Master Servicer or the applicable Special Servicer, as applicable, (and such Master Servicer or such Special Servicer, as applicable, will be required to promptly forward such commitment to the applicable Special Servicer or the applicable Master Servicer, as applicable) which provides that such refinancing will occur within 120 days after the date on which such balloon payment will become due (provided that if either such refinancing does not occur during that time or the applicable Master Servicer is required during that time to make any monthly debt service advance in respect of the Mortgage Loan, a Servicing Transfer Event will occur immediately); |
2. | the related borrower fails to make when due any monthly debt service payment (other than a balloon payment) or any other payment (other than a balloon payment) required under the related mortgage note or the related mortgage, which failure continues unremedied for 60 days; |
3. | the applicable Master Servicer determines (in accordance with the Servicing Standard) or receives from the applicable Special Servicer a written determination of such Special Servicer (which determination the applicable Special Servicer is required to make in accordance with the Servicing Standard and, to the extent a Subordinate Control Period is then in effect, with the consent or deemed consent of the Majority Subordinate Certificateholder (other than with respect to an Excluded Loan), and, to the extent a Collective Consultation Period is then in effect, in consultation with the Majority Subordinate Certificateholder (other than with respect to an Excluded Loan)) that a default in making any monthly debt service payment (other than a balloon payment) or any other material payment (other than a balloon payment) required under the related mortgage note or the related mortgage is likely to occur in the foreseeable future, and such default is likely to remain unremedied for at least sixty (60) days beyond the date on which the subject payment will become due; or the applicable Master Servicer determines (in accordance with the Servicing Standard) or receives from the applicable Special Servicer a written determination of such Special Servicer (which determination the applicable Special Servicer is required to make in accordance with the Servicing Standard and, to the extent a Subordinate Control Period is then in effect, with the consent or deemed consent of the Majority Subordinate Certificateholder (other than with respect to an Excluded Loan), and, to the extent a Collective Consultation Period is then in effect, in consultation with the Majority Subordinate Certificateholder (other than with respect to an Excluded Loan)) that a default in making a balloon payment is likely to occur in the foreseeable future, and such default is likely to remain unremedied for at least sixty (60) days beyond the date on which such balloon payment will become due (or, if the borrower has delivered a written and fully executed (subject only to customary final closing conditions) refinancing commitment from an acceptable lender and reasonably satisfactory in form and |
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substance to the applicable Master Servicer or the applicable Special Servicer (and such Master Servicer or such Special Servicer, as applicable, will be required to promptly forward such commitment to the applicable Special Servicer or the applicable Master Servicer, as applicable) which provides that such refinancing will occur within 120 days after the date on which such balloon payment will become due, the applicable Master Servicer determines (in accordance with the Servicing Standard) or receives from the applicable Special Servicer a written determination of such Special Servicer (which determination the applicable Special Servicer is required to make in accordance with the Servicing Standard and, to the extent a Subordinate Control Period is then in effect, with the consent or deemed consent of the Majority Subordinate Certificateholder (other than with respect to an Excluded Loan), and, to the extent a Collective Consultation Period is then in effect, in consultation with the Majority Subordinate Certificateholder (other than with respect to an Excluded Loan)) that (a) the borrower is likely not to make one or more assumed monthly debt service payments as described under “Description of the Offered Certificates—Advances of Delinquent Monthly Debt Service Payments” in this free writing prospectus prior to such a refinancing or (b) the refinancing is not likely to occur within 120 days following the date on which the balloon payment will become due); |
4. | there has occurred a default (including, in the applicable Master Servicer’s or the applicable Special Servicer’s judgment, the failure of the related borrower to maintain any insurance required to be maintained pursuant to the related Mortgage Loan documents, unless such default has been waived in accordance with the Pooling and Servicing Agreement) under the related Mortgage Loan documents, other than as described in clause (1) or (2) above, that may, in the good faith and reasonable judgment of the applicable Master Servicer or the applicable Special Servicer (and, in the case of the applicable Special Servicer and to the extent a Subordinate Control Period is then in effect, with the consent or deemed consent of the Majority Subordinate Certificateholder (other than with respect to an Excluded Loan), and, to the extent a Collective Consultation Period is then in effect, in consultation with the Majority Subordinate Certificateholder (other than with respect to an Excluded Loan)), materially impair the value of the related Mortgaged Property as security for such Mortgage Loan or otherwise materially and adversely affect the interests of Certificateholders, which default has continued unremedied for the applicable cure period under the terms of such Mortgage Loan (or, if no cure period is specified, sixty (60) days); |
5. | a decree or order of a court or agency or supervisory authority having jurisdiction in the premises in an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law or the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, has been entered against the related borrower and such decree or order has remained in force undischarged or unstayed for a period of sixty (60) days; |
6. | the related borrower has consented to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings of or relating to such borrower or of or relating to all or substantially all of its property; |
7. | the related borrower has admitted in writing its inability to pay its debts generally as they become due, filed a petition to take advantage of any applicable |
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insolvency or reorganization statute, made an assignment for the benefit of its creditors, or voluntarily suspended payment of its obligations; |
8. | the applicable Master Servicer or the applicable Special Servicer receives notice of the commencement of foreclosure or similar proceedings with respect to the corresponding Mortgaged Property; or |
9. | the applicable Master Servicer or the applicable Special Servicer (and in the case of the applicable Special Servicer, during a Subordinate Control Period, with the consent of the Subordinate Class Representative (other than with respect to any Excluded Loan)) determines that (i) a default (including, in the applicable Master Servicer’s or the applicable Special Servicer’s judgment, the failure of the related borrower to maintain any insurance required to be maintained pursuant to the related Mortgage Loan documents, unless such default has been waived in accordance with the Pooling and Servicing Agreement) under the Mortgage Loan documents (other than as described in clause 3 above) is imminent or reasonably foreseeable, (ii) such default will materially impair the value of the corresponding Mortgaged Property as security for the Mortgage Loan or otherwise materially and adversely affect the interests of Certificateholders and (iii) the default is likely to continue unremedied for the applicable cure period under the terms of the Mortgage Loan documents, or, if no cure period is specified and the default is capable of being cured, for sixty (60) days. |
A Mortgage Loan (other than a Non-Serviced Pari Passu Mortgage Loan) will become a “Corrected Mortgage Loan” when (other than by reason of a liquidation event occurring in respect of such Mortgage Loan or the related Mortgaged Property becoming an REO Property):
· | with respect to the circumstances described in clauses 1 and 2 immediately above, the related borrower makes three consecutive full and timely monthly debt service payments under the terms of such Mortgage Loan, as those terms may be changed or modified in connection with a bankruptcy or similar proceeding involving the related borrower or by reason of a modification, extension, waiver or amendment granted or agreed to by the applicable Master Servicer or the applicable Special Servicer; |
· | with respect to the circumstances described in clauses 3, 5, 6, 7 and 9 immediately above, those circumstances cease to exist in the good faith reasonable judgment, exercised in accordance with the Servicing Standard, of the applicable Special Servicer; |
· | with respect to the circumstances described in clause 4 immediately above, the default is cured in the good faith reasonable judgment, exercised in accordance with the Servicing Standard, of the applicable Special Servicer; and |
· | with respect to the circumstances described in clause 8 immediately above, the proceedings are terminated. |
A Special Servicer, on the other hand, will generally be responsible for the servicing and administration of each Mortgage Loan (other than any Non-Serviced Pari Passu Mortgage Loan) with respect to which it is engaged to act as Special Servicer as to which a Servicing Transfer Event has occurred and is continuing. Such Special Servicer will also be responsible for the administration of each REO Property (other than any interest in an REO
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Property acquired with respect to any Non-Serviced Loan Combination) related to each such Mortgage Loan.
Despite the foregoing, the Pooling and Servicing Agreement will require the applicable Master Servicer to make monthly debt service advances with respect to any Mortgage Loan that is a Specially Serviced Mortgage Loan and each successor REO Mortgage Loan in respect thereof, make Servicing Advances with respect to any Specially Serviced Mortgage Loan or REO Property (other than any REO Property acquired with respect to a Non-Serviced Loan Combination) and related REO Mortgage Loan, receive payments, collect information and deliver reports to the Certificate Administrator and the Trustee required under the Pooling and Servicing Agreement with respect to any Specially Serviced Mortgage Loans or REO Property (other than any REO Property acquired with respect to a Non-Serviced Loan Combination) and related REO Mortgage Loan, and render such incidental services with respect to any Specially Serviced Mortgage Loan or REO Property (other than any REO Property acquired with respect to a Non-Serviced Loan Combination) as and to the extent as may be specifically provided for in the Pooling and Servicing Agreement. In addition, the applicable Special Servicer will perform limited duties and have certain approval rights regarding servicing actions with respect to Mortgage Loans with respect to which it is engaged to act as Special Servicer that are not Specially Serviced Mortgage Loans.
The applicable Master Servicer will transfer servicing of a Mortgage Loan (other than any Non-Serviced Pari Passu Mortgage Loan) to the applicable Special Servicer upon the occurrence of a Servicing Transfer Event with respect to that Mortgage Loan. The applicable Special Servicer will return the servicing of that Mortgage Loan to the applicable Master Servicer, and that Mortgage Loan will be considered to have been worked-out, if and when all Servicing Transfer Events with respect to that Mortgage Loan cease to exist. Notwithstanding the transfer of the servicing of any Mortgage Loan to a Special Servicer, the applicable Master Servicer will continue to be responsible for providing various reports to the Certificate Administrator and/or the Trustee, making any required monthly debt service advances and (other than with respect to any Non-Serviced Loan Combination) making any required Servicing Advances with respect to any Specially Serviced Mortgage Loans and REO Properties.
None of the Master Servicers or the Special Servicers will have any responsibility for the performance or non-performance by any other Master Servicer or other Special Servicer with respect to any such party’s obligations and duties under the Pooling and Servicing Agreement, except in any instance where the same party acts in all or any two of such capacities.
Subject to the restrictions and limitations of the Pooling and Servicing Agreement, the Trust Advisor will generally conduct an annual review of each Special Servicer’s operational practices on a platform-level basis employed in servicing Specially Serviced Mortgage Loans to formulate an opinion as to whether or not those operational practices generally satisfy the Servicing Standard with respect to the resolution and/or liquidation of the Specially Serviced Mortgage Loans. In addition, during any Collective Consultation Period or Senior Consultation Period, the applicable Special Servicer may be required to consult with the Trust Advisor with regard to asset status reports and certain other matters in connection with the servicing of the Specially Serviced Mortgage Loans, as described more fully below.
The Trust Advisor will not review the activities of any other special servicer with respect to the securitization of any Non-Serviced Pari Passu Companion Loan, and as a result will not provide a review of any special servicing actions in respect of any Non-Serviced Pari Passu Mortgage Loan. The trust advisor (or equivalent party) with respect to such other securitization will have obligations that are substantially similar in all material respects, but
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not necessarily identical, to those of the Trust Advisor described in this free writing prospectus.
As used in this free writing prospectus, “REO Mortgage Loan” means the successor mortgage loan to a Mortgage Loan (which may be a Mortgage Loan included in a Loan Combination) deemed to be outstanding with respect to each related REO Property.
Servicing and Other Compensation and Payment of Expenses
The Master Servicing Fee. The principal compensation to be paid to each Master Servicer with respect to its master servicing activities will be the master servicing fee.
The master servicing fee for each Master Servicer:
· | will be earned with respect to each and every Mortgage Loan (including any Non-Serviced Pari Passu Mortgage Loan) for which it is acting as Master Servicer, including— |
1. | each such Mortgage Loan that is a Specially Serviced Mortgage Loan, |
2. | each such Mortgage Loan as to which the corresponding Mortgaged Property has become an REO Property, and |
3. | each such Mortgage Loan as to which defeasance has occurred; and |
· | in the case of each such Mortgage Loan, will— |
1. | be calculated on the same interest accrual basis as that Mortgage Loan, which will be a 30/360 Basis or an Actual/360 Basis, as applicable, |
2. | accrue at a master servicing fee rate, on a loan-by-loan basis, |
3. | accrue on the same principal amount as interest accrues or is deemed to accrue from time to time with respect to that Mortgage Loan, and |
4. | be payable monthly to the applicable Master Servicer from amounts received with respect to interest on that Mortgage Loan or, upon liquidation of the Mortgage Loan to the extent such interest collections on deposit in the applicable Collection Account, are not sufficient with respect to the Mortgage Loans, from general collections on all the Mortgage Loans. |
Certain of the Mortgage Loans will be primary serviced or sub-serviced by a primary servicer or sub-servicer that will be entitled to a primary servicing fee or sub-servicing fee with respect to each such Mortgage Loan. The rate at which the primary servicing fee or sub-servicing fee accrues for each such Mortgage Loan is included in the applicable master servicing fee rate for each of those Mortgage Loans. In the case of a Pari Passu Mortgage Loan, that primary servicing fee will be payable to the applicable Other Master Servicer during such time (if any) as such Mortgage Loan constitutes a Non-Serviced Pari Passu Mortgage Loan.
Each Master Servicer will be entitled to designate a portion of its master servicing fee accrued at a specified rateper annum, the right to which portion will be transferable by such Master Servicer to other parties. That specified rate will be subject to reduction at any time following any resignation of such Master Servicer or any termination of such Master Servicer for cause, in each case to the extent reasonably necessary for the Trustee to
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appoint a successor Master Servicer that satisfies the requirements of the Pooling and Servicing Agreement.
Prepayment Interest Shortfalls. The Pooling and Servicing Agreement will require each Master Servicer to make a non-reimbursable compensating interest payment on each distribution date in an amount equal to the lesser of (i) the aggregate amount of Prepayment Interest Shortfalls incurred in connection with voluntary principal prepayments received in respect of the Mortgage Loans for which it is acting as Master Servicer (other than Specially Serviced Mortgage Loans and Mortgage Loans on which the applicable Special Servicer allowed or consented to the applicable Master Servicer allowing a principal prepayment on a date other than the applicable Due Date and other than any Non-Serviced Pari Passu Mortgage Loan) during the related collection period, and (ii) the aggregate of (A) that portion of the master servicing fees earned by such Master Servicer for the related distribution date that is, in the case of each and every Mortgage Loan and successor REO Property thereto for which such master servicing fees are being paid in the related collection period, calculated for this purpose at 0.01%per annum, and (B) all Prepayment Interest Excesses received by such Master Servicer during the related collection period;provided that the applicable Master Servicer will pay (without regard to clause (ii) above) the amount of any Prepayment Interest Shortfall otherwise described in clause (i) above incurred in connection with any principal prepayment received in respect of a Mortgage Loan during the related collection period to the extent such Prepayment Interest Shortfall occurs as a result of the applicable Master Servicer allowing the related borrower to deviate from the terms of the related Mortgage Loan documents regarding principal prepayments (other than (w) subsequent to a default under the related Mortgage Loan documents, (x) pursuant to applicable law or a court order (including in connection with amounts collected as insurance proceeds or condemnation proceeds to the extent that such applicable law or court order limits the ability of the applicable Master Servicer to apply the proceeds in accordance with the related Mortgage Loan documents), (y) at the request or with the consent of the applicable Special Servicer or (z) during any Subordinate Control Period or Collective Consultation Period, at the request or with the consent of the Subordinate Class Representative (other than with respect to any Excluded Loan)). No Master Servicer will be required to make any compensating interest payments as a result of any prepayments on Mortgage Loans for which it does not act as Master Servicer.
Any payments made by a Master Servicer with respect to any distribution date to cover Prepayment Interest Shortfalls will be included in the Available Distribution Amount for that distribution date, as described under “Description of the Offered Certificates—Distributions” in this free writing prospectus. If the amount of Prepayment Interest Shortfalls incurred with respect to the Mortgage Loans during any collection period exceeds the total of any and all payments made by a Master Servicer with respect to the related distribution date to cover those Prepayment Interest Shortfalls with respect to the Mortgage Loans, then the resulting Net Aggregate Prepayment Interest Shortfall will be allocated among the respective Classes of the Principal Balance Certificates, in reduction of the interest distributable on those Certificates, on apro rata basis as and to the extent described under “Description of the Offered Certificates—Distributions—Interest Distributions” in this free writing prospectus.
Principal Special Servicing Compensation. The principal compensation to be paid to the applicable Special Servicer with respect to its special servicing activities for each Mortgage Loan for which it is acting as Special Servicer will be—
· | the special servicing fee, |
· | the workout fee, and |
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· | the liquidation fee. |
Special Servicing Fee. The special servicing fee:
· | will be earned with respect to— |
1. | each Specially Serviced Mortgage Loan, and |
2. | each Mortgage Loan (other than any Non-Serviced Pari Passu Mortgage Loan) as to which the corresponding Mortgaged Property has become an REO Property; |
· | in the case of each Mortgage Loan described in the foregoing bullet, will— |
1. | be calculated on the same interest accrual basis as that Mortgage Loan, which will be a 30/360 Basis or an Actual/360 Basis, as applicable, |
2. | accrue at a special servicing fee rate equal to 0.25%per annum (or, in the case of the National Cooperative Bank, N.A. Mortgage Loans only, a rate equal to the greater of (i) 0.25%per annum and (ii) aper annum rate that would result in a special servicing fee for each such mortgage loan of $1,000 for the related month), and |
3. | accrue on the same principal amount as interest accrues or is deemed to accrue from time to time with respect to that Mortgage Loan; and |
· | except as otherwise described in the next paragraph, will be payable monthly from related liquidation proceeds, insurance proceeds or condemnation proceeds (if any) in respect of such Mortgage Loan and then from general collections on all the Mortgage Loans and any related REO Properties that are on deposit in the Collection Accounts from time to time. |
Workout Fee. The applicable Special Servicer will, in general, be entitled to receive a workout fee with respect to each Mortgage Loan (other than any Non-Serviced Pari Passu Mortgage Loan) worked out by that Special Servicer. Except as otherwise described in the next sentence, the workout fee will be payable out of, and will be calculated by application of a workout fee rate of 1.00% to, each payment of interest, other than Default Interest and Excess Interest, if any, and each payment of principal received on the Mortgage Loan for so long as it remains a worked-out Mortgage Loan.
The workout fee with respect to any worked-out Mortgage Loan will cease to be payable if that worked-out Mortgage Loan again becomes a Specially Serviced Mortgage Loan or if the related Mortgaged Property becomes an REO Property. However, a new workout fee would become payable if the Mortgage Loan again became a worked-out mortgage loan after having again become a Specially Serviced Mortgage Loan.
In addition, the determination and payment of the workout fee with respect to any Corrected Mortgage Loan for which the amount of related Offsetting Modification Fees is greater than zero will be adjusted in the following manner: (i) the workout fee rate will bemultiplied by the aggregate amount of all the scheduled payments of principal and interest scheduled to become due under the terms of such Corrected Mortgage Loan during the period from the date when such Mortgage Loan becomes a Corrected Mortgage Loan to and including the maturity date of such Corrected Mortgage Loan, without discounting for present value (the resulting product, the “Workout Fee Projected Amount”); and (ii) either (a) if the amount of the Offsetting Modification Fees for such Corrected Mortgage Loan is
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greater than or equal to the Workout Fee Projected Amount for such Corrected Mortgage Loan, the applicable Special Servicer will not be entitled to any payments in respect of the workout fee with respect to such Corrected Mortgage Loan, or (b) if the amount of Offsetting Modification Fees for such Corrected Mortgage Loan is less than the Workout Fee Projected Amount, the applicable Special Servicer will be entitled to payments of the workout fee with respect to such Corrected Mortgage Loan, on the terms and conditions set forth in the Pooling and Servicing Agreement without regard to this sentence, until the cumulative amount of such payments is equal to the excess of the Workout Fee Projected Amount over the Offsetting Modification Fees, after which date the applicable Special Servicer will not be entitled to any further payments in respect of the workout fee for such Corrected Mortgage Loan.
If a Special Servicer is terminated or resigns, it will retain the right to receive any and all workout fees payable with respect to Mortgage Loans that were worked out by it (or, except in circumstances where that Special Servicer is terminated for cause, as to which the circumstances that constituted the applicable Servicing Transfer Event were resolved but for the making of three monthly debt service payments according to that work-out) and as to which no new Servicing Transfer Event had occurred as of the time of its termination or resignation. The successor to that Special Servicer will not be entitled to any portion of those workout fees.
Although workout fees are intended to provide a Special Servicer with an incentive to perform its duties better, the payment of any workout fee will reduce amounts distributable to the Certificateholders.
Liquidation Fee. The applicable Special Servicer will be entitled to receive a liquidation fee with respect to each Specially Serviced Mortgage Loan (other than any Non-Serviced Pari Passu Mortgage Loan) serviced by such Special Servicer for which a full, partial or discounted payoff is obtained from the related borrower. The applicable Special Servicer will also be entitled to receive a liquidation fee with respect to any Specially Serviced Mortgage Loan (other than any Non-Serviced Pari Passu Mortgage Loan) or REO Property (other than a REO Property acquired with respect to any Non-Serviced Loan Combination) as to which it receives any liquidation proceeds, insurance proceeds or condemnation proceeds, except as described in the next paragraph. In each case, except as described in the next paragraph, the liquidation fee will be payable from, and will be calculated by application of the Liquidation Fee Rate to the related payment or proceeds, exclusive of any portion of that payment or proceeds that represents a recovery of Default Interest and/or late payment charges. The “Liquidation Fee Rate” will be a rate equal to 1.00% or, if such rate would result in an aggregate liquidation feeless than $25,000, then the Liquidation Fee Rate will be equal to the lesser of (i) 3.0% and (ii) such lower rate as would result in an aggregate liquidation fee equal to $25,000, in each case as calculated prior to the application of any Offsetting Modification Fees.
In general, no liquidation fee will be payable based on, or out of, proceeds received in connection with the purchase or repurchase of any Mortgage Loan from the Trust Fund by (i) a Responsible Repurchase Party in connection with a material breach of representation or warranty or a material document defect in accordance with the related Mortgage Loan Purchase Agreement (if the purchase occurs prior to the end of the period, as the same may be extended, in which the Responsible Repurchase Party must cure, repurchase or substitute in respect of such circumstances), (ii) any person in connection with a termination of the Trust Fund or (iii) another creditor of the related borrower or its owners pursuant to any intercreditor or other similar agreement, if the purchase occurs within 90 days after the creditor’s purchase option first becomes exercisable. No liquidation fee will be payable in connection with the payment of any Loss of Value Payment by a
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Responsible Repurchase Party if the Loss of Value Payment is made within 90 days after the obligation to cure, repurchase or substitute the related Mortgage Loan arises.
In addition, if a liquidation fee otherwise becomes payable with respect to a Mortgage Loan, then such liquidation fee payable to the applicable Special Servicer with respect to such Mortgage Loan in the aggregate will be reduced by the amount of any Offsetting Modification Fees. Furthermore, if a Mortgage Loan becomes a Specially Serviced Mortgage Loan only because of an event described in clause (1) of the definition of “Specially Serviced Mortgage Loan” and the related proceeds are received within 90 days following the related stated maturity date in connection with the full and final payoff or refinancing of the related Mortgage Loan, in each case the related Special Servicer will not be entitled to collect a liquidation fee, but may collect and retain appropriate fees from the related borrower in connection with such liquidation.
Although liquidation fees are intended to provide a Special Servicer with an incentive to better perform its duties, the payment of any liquidation fee will reduce amounts distributable to the Certificateholders.
The Pooling and Servicing Agreement will provide that, with respect to each collection period during which any Disclosable Special Servicer Fees were received by a Special Servicer, such Special Servicer must deliver or cause to be delivered to the applicable Master Servicer within two (2) business days following the related determination date, and, if so delivered, the applicable Master Servicer must deliver or cause to be delivered to the Certificate Administrator within three (3) business days following the related determination date, in each case without charge, a report which discloses and contains an itemized listing of any Disclosable Special Servicer Fees received by such Special Servicer or any of its affiliates during the related collection period.
The total amount of workout fees, liquidation fees and Modification Fees that are received by the applicable Special Servicer with respect to the workout, liquidation (including partial liquidation), modification, extension, waiver or amendment of a Specially Serviced Mortgage Loan or REO Mortgage Loan will be subject to an aggregate cap equal to the greater of $1,000,000 and 1.00% of the Stated Principal Balance of the subject Specially Serviced Mortgage Loan or REO Mortgage Loan.
“Disclosable Special Servicer Fees” means, with respect to any Mortgage Loan (other than any Non-Serviced Pari Passu Mortgage Loan) or REO Property (other than any REO Property acquired with respect to any Non-Serviced Loan Combination), any compensation and other remuneration (including, without limitation, in the form of commissions, brokerage fees, rebates, or as a result of any other fee-sharing arrangement) received or retained by the applicable Special Servicer or any of its affiliates that is paid by any person (including, without limitation, the Issuing Entity, any borrower, any manager, any guarantor or indemnitor in respect of a Mortgage Loan (other than any Non-Serviced Pari Passu Mortgage Loan and any purchaser of any Mortgage Loan (other than any Non-Serviced Pari Passu Mortgage Loan or REO Property) in connection with the disposition, workout or foreclosure of any Mortgage Loan (other than any Non-Serviced Pari Passu Mortgage Loan), the management or disposition of any REO Property, and the performance by the applicable Special Servicer or any such affiliate of any other special servicing duties under the Pooling and Servicing Agreement, other than (1) any Permitted Special Servicer/Affiliate Fees (defined below) and (2) any Special Servicer compensation to which the applicable Special Servicer is entitled pursuant to the Pooling and Servicing Agreement.
“Permitted Special Servicer/Affiliate Fees” means any commercially reasonable treasury management fees, banking fees, title insurance and/or other insurance commissions or fees
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and appraisal fees received or retained by the applicable Special Servicer or any of its affiliates in connection with any services performed by such party with respect to any Mortgage Loan or any REO Property in accordance with the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement will provide that a Special Servicer and its affiliates will be prohibited from receiving or retaining any compensation or any other remuneration (including, without limitation, in the form of commissions, brokerage fees, rebates, or as a result of any other fee-sharing arrangement) from any person (including, without limitation, the Trust Fund, any borrower, any manager, any guarantor or indemnitor in respect of a Mortgage Loan and any purchaser of any Mortgage Loan or any REO Property) in connection with the disposition, workout or foreclosure of any Mortgage Loan, the management or disposition of any REO Property, or the performance of any other special servicing duties under the Pooling and Servicing Agreement, other than as expressly provided for in the Pooling and Servicing Agreement;provided that such prohibition will not apply to Permitted Special Servicer/Affiliate Fees.
Additional Servicing Compensation. Each Master Servicer will be entitled to the following items as additional master servicing compensation, in each case, related to a Mortgage Loan for which such Master Servicer acts as Master Servicer, or, in the case of penultimate bullet below, related to an investment account maintained by such Master Servicer, to the extent that such items are actually collected on the Mortgage Loans (other than with respect to any Non-Serviced Pari Passu Mortgage Loan):
· | 100% of any defeasance fees actually collected during the related collection period in connection with the defeasance of a Mortgage Loan (other than a Non-Serviced Pari Passu Mortgage Loan) (provided that for the avoidance of doubt, any such defeasance fee shall not include any modification fees or waiver fees in connection with a defeasance that the applicable Special Servicer is entitled to under the Pooling and Servicing Agreement); |
· | (x) 50% of Modification Fees actually collected during the related collection period with respect to Mortgage Loans that are not Specially Serviced Mortgage Loans and paid in connection with a consent, approval or other action that the applicable Master Servicer is not permitted to take in the absence of the consent or approval (or deemed consent or approval) of the applicable Special Servicer under the Pooling and Servicing Agreement and (y) 100% of Modification Fees actually collected during the related collection period with respect to Mortgage Loans that are not Specially Serviced Mortgage Loans and paid in connection with a consent, approval or other action that the applicable Master Servicer is permitted to take in the absence of the consent or approval (or deemed consent or approval) of the applicable Special Servicer under the Pooling and Servicing Agreement; |
· | (x) 100% of Assumption Fees collected during the related collection period with respect to Mortgage Loans that are not Specially Serviced Mortgage Loans in connection with a consent, approval or other action that the applicable Master Servicer is permitted to take in the absence of the consent or approval (or deemed consent or approval) of the applicable Special Servicer under the Pooling and Servicing Agreement, and (y) 50% of Assumption Fees collected during the related collection period with respect to Mortgage Loans that are not Specially Serviced Mortgage Loans in connection with a consent, approval or other action that the applicable Master Servicer is not permitted to take in the absence of the consent or approval (or deemed consent or approval) of the applicable Special Servicer under the Pooling and Servicing Agreement; |
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· | 100% of Assumption Application Fees collected during the related collection period with respect to Mortgage Loans that are not Specially Serviced Mortgage Loans; |
· | (x) 100% of consent fees on Mortgage Loans that are not Specially Serviced Mortgage Loans in connection with a consent that involves no modification, waiver or amendment of the terms of any Mortgage Loan and is paid in connection with a consent the applicable Master Servicer is permitted to grant in the absence of the consent or approval (or deemed consent or approval) of the applicable Special Servicer under the Pooling and Servicing Agreement, and (y) 50% of consent fees on Mortgage Loans that are not Specially Serviced Mortgage Loans in connection with a consent that involves no modification, waiver or amendment of the terms of any Mortgage Loan and is paid in connection with a consent that the applicable Master Servicer is not permitted to take in the absence of the consent or approval (or deemed consent or approval) of the applicable Special Servicer under the Pooling and Servicing Agreement; |
· | any and all amounts collected for checks returned for insufficient funds on all Mortgage Loans; |
· | 100% of charges for beneficiary statements or demands actually paid by the borrowers under the Mortgage Loans other than any Specially Serviced Mortgage Loan; |
· | (x) 100% of other loan processing fees actually paid by the borrowers under the Mortgage Loans that are not Specially Serviced Mortgage Loans to the extent that the consent of the applicable Special Servicer is not required in connection with the associated action and (y) 50% of other loan processing fees actually paid by the borrowers under the Mortgage Loans that are not Specially Serviced Mortgage Loans to the extent that the consent of the applicable Special Servicer is required in connection with the associated action; |
· | any Prepayment Interest Excesses arising from any principal prepayments on the Mortgage Loans; |
· | interest or other income earned on deposits in the collection or other accounts maintained by the applicable Master Servicer (but only to the extent of the net investment earnings, if any, with respect to any such account for each collection period and, further, in the case of a servicing account or reserve account, only to the extent such interest or other income is not required to be paid to any borrower under applicable law or under the related Mortgage Loan); and |
· | a portion of late payment charges and Default Interest. |
The applicable Special Servicer will be entitled to the following items as additional special servicing compensation, to the extent that such items are actually collected on the Mortgage Loans (other than with respect to any Non-Serviced Pari Passu Mortgage Loan) which it is responsible for servicing:
· | 100% of Modification Fees actually collected during the related collection period with respect to any Specially Serviced Mortgage Loans or successor REO Mortgage Loans; |
· | 50% of Modification Fees collected during the related collection period with respect to Mortgage Loans that are not Specially Serviced Mortgage Loans in connection with a consent, approval or other action that the applicable Master Servicer is not |
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permitted to take in the absence of the consent or approval (or deemed consent or approval) of such Special Servicer under the Pooling and Servicing Agreement; |
· | (x) 100% of Assumption Fees collected during the related collection period with respect to Mortgage Loans that are Specially Serviced Mortgage Loans, and (y) 50% of Assumption Fees collected during the related collection period with respect to Mortgage Loans that are not Specially Serviced Mortgage Loans in connection with a consent, approval or other action that the applicable Master Servicer is not permitted to take in the absence of the consent or approval (or deemed consent or approval) of such Special Servicer under the Pooling and Servicing Agreement; |
· | 100% of Assumption Application Fees collected during the related collection period with respect to Mortgage Loans that are Specially Serviced Mortgage Loans; |
· | (x) 100% of consent fees on Mortgage Loans that are Specially Serviced Mortgage Loans in connection with a consent that involves no modification, waiver or amendment of the terms of any Mortgage Loan, and (y) 50% of consent fees on Mortgage Loans that are not Specially Serviced Mortgage Loans in connection with a consent that involves no modification, waiver or amendment of the terms of any Mortgage Loan and is paid in connection with a consent that the applicable Master Servicer is not permitted to take in the absence of the consent or approval (or deemed consent or approval) of such Special Servicer under the Pooling and Servicing Agreement; |
· | 100% of charges for beneficiary statements or demands actually paid by the borrowers under the Specially Serviced Mortgage Loans; |
· | (x) 50% of the other loan processing fees actually paid by the borrowers under the Mortgage Loans that are not Specially Serviced Mortgage Loans to the extent that the consent of such Special Servicer is required in connection with the associated action, and (y) 100% of other loan processing fees actually paid by the borrowers under the Mortgage Loans that are Specially Serviced Mortgage Loans; |
· | interest or other income earned on deposits in the REO Account and the loss of value reserve account maintained by such Special Servicer (but only to the extent of the net investment earnings, if any, with respect to such REO Account for each collection period); and |
· | a portion of late payment charges and Default Interest. |
As used in this free writing prospectus, “Assumption Application Fees” means, with respect to any Mortgage Loan (other than a Non-Serviced Pari Passu Mortgage Loan), any and all assumption application fees actually paid by the related borrower and not prohibited from being charged by the lender under the Mortgage Loan documents, with respect to any application submitted to the applicable Master Servicer or the applicable Special Servicer for a proposed assumption or substitution transaction or proposed transfer of an interest in such borrower.
As used in this free writing prospectus, “Assumption Fees” means, with respect to any Mortgage Loan (other than a Non-Serviced Pari Passu Mortgage Loan), any and all assumption fees actually paid by the related borrower and not prohibited from being charged by the lender under the Mortgage Loan documents, with respect to any assumption or substitution agreement entered into by the applicable Master Servicer or the applicable
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Special Servicer or paid by the related borrower with respect to any transfer of an interest in such borrower.
As used in this free writing prospectus, “Modification Fees” means, with respect to any Mortgage Loan (other than a Non-Serviced Pari Passu Mortgage Loan), any and all fees with respect to a modification, restructure, extension, waiver or amendment that modifies, extends, amends or waives any term of the related Mortgage Loan documents (as evidenced by a signed writing) agreed to by the applicable Master Servicer or the applicable Special Servicer (as applicable), other than any Assumption Fees, Assumption Application Fees, consent fees and any defeasance fee;provided that (A) in connection with each modification, restructure, extension, waiver or amendment that constitutes a workout of a Specially Serviced Mortgage Loan, the Modification Fees collected from the related borrower will be subject to a cap of 1% of the outstanding principal balance of such Mortgage Loan immediately after giving effect to such transaction; (B) the preceding clause (A) will be construed only as a limitation on the amount of Modification Fees that may be collected in connection with each individual such transaction involving a Specially Serviced Mortgage Loan and not as a limitation on the cumulative amount of Modification Fees that may be collected in connection with multiple such transactions involving such Specially Serviced Mortgage Loan; and (C) for purposes of such preceding clauses (A) and (B), a Modification Fee will be deemed to have been collected in connection with a workout of a Specially Serviced Mortgage Loan if such fee arises substantially in consideration of or otherwise in connection with such workout, whether the related borrower must pay such fee upon the consummation of such workout and/or on one or more subsequent dates.
As used in this free writing prospectus, “Offsetting Modification Fees” means, for purposes of any workout fee or liquidation fee payable to the applicable Special Servicer in connection with any Mortgage Loan (other than a Non-Serviced Pari Passu Mortgage Loan), REO Mortgage Loan (other than with respect to any Non-Serviced Pari Passu Mortgage Loan), any and all Modification Fees collected by the applicable Special Servicer as additional special servicing compensation to the extent that (1) such Modification Fees were earned and collected by the applicable Special Servicer either (A) in connection with the workout or liquidation (including partial liquidation) of the Specially Serviced Mortgage Loan or REO Mortgage Loan (other than a Non-Serviced Pari Passu Mortgage Loan) as to which such workout fee or liquidation fee became payable or (B) in connection with the immediately prior workout of such Mortgage Loan while it was previously a Specially Serviced Mortgage Loan,provided that (in the case of this clause (B), the Servicing Transfer Event that resulted in its again becoming a Specially Serviced Mortgage Loan occurred within 12 months following the consummation of such prior workout, andprovided,further, that there will be deducted from the Offsetting Modification Fees otherwise described in this clause (1) an amount equal to that portion of such Modification Fees that were previously applied to actually reduce the payment of a workout fee or liquidation fee; and (2) such Modification Fees were earned in connection with a modification, extension, waiver or amendment of such Mortgage Loan at a time when such Mortgage Loan was a Specially Serviced Mortgage Loan.
Each Special Servicer has advised the Depositor that it may, and the Pooling and Servicing Agreement will authorize such Special Servicer to, enter into one or more arrangements with the Majority Subordinate Certificateholder and/or the Subordinate Class Representative, or any other person(s) that may be entitled to remove or replace such Special Servicer, to provide for the payment by such Special Servicer to such party or parties of certain of such Special Servicer’s compensation under the Pooling and Servicing Agreement, whether in consideration of such Special Servicer’s appointment or continuation of appointment as a Special Servicer in connection with the Pooling and Servicing
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Agreement or the related intercreditor agreement, limitations on such parties’ right to terminate or replace a Special Servicer in connection with the Pooling and Servicing Agreement or the related intercreditor agreement or otherwise. If a Special Servicer exercises the authority described in the preceding sentence, any and all obligations pursuant to any such agreement will constitute obligations solely of such Special Servicer and not of any other party hereto. If such Special Servicer enters into such an agreement and one or more other person(s) thereafter become the applicable Majority Subordinate Certificateholder and/or the Subordinate Class Representative, or becomes entitled to remove or replace such Special Servicer, as applicable, such agreement will not be binding on such other person(s), nor may it limit the rights that otherwise inure to the benefit of such other person(s) as the Majority Subordinate Certificateholder and/or the Subordinate Class Representative, as applicable, or as a party otherwise entitled to remove or replace such Special Servicer, in the absence of such other persons(s)’ express written consent, which may be granted or withheld in their sole discretion.
With respect to any Non-Serviced Loan Combination, the related Other Master Servicer and the related special servicer for the related other securitization (the “Other Special Servicer”) will be entitled to compensation with respect to the related Non-Serviced Pari Passu Mortgage Loan that is substantially similar in all material respects, but not necessarily identical, to or materially consistent with the provisions set forth above, although the compensation payable to an Other Master Servicer or Other Special Servicer may be greater, and modification fees, assumption fees, default interest, late payment charges and other charges and fees allocable to offset trust fund expenses may be less, than would be the case under the Pooling and Servicing Agreement. See “Description of the Offered Certificates—Fees and Expenses” and “—Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations” in this free writing prospectus.
Compensation of the Trust Advisor. The principal compensation to be paid to the Trust Advisor with respect to its advisory activities will be the trust advisor fee.
The trust advisor fee:
· | will be earned with respect to each and every Mortgage Loan (other than any Non-Serviced Pari Passu Mortgage Loan), including, without limitation— |
1. | each such Mortgage Loan, if any, that is a Specially Serviced Mortgage Loan, |
2. | each such Mortgage Loan, if any, as to which the corresponding Mortgaged Property has become an REO Property, and |
3. | each such Mortgage Loan as to which defeasance has occurred; and |
· | in the case of each such Mortgage Loan, will— |
1. | be calculated on the same interest accrual basis as that Mortgage Loan, which will be a 30/360 Basis or an Actual/360 Basis, as applicable, |
2. | accrue at the trust advisor fee rate, on a loan-by-loan basis, |
3. | accrue on the same principal amount as interest accrues or is deemed to accrue from time to time with respect to that Mortgage Loan, and |
4. | be payable monthly to the Trust Advisor from amounts received with respect to interest on that Mortgage Loan or, upon liquidation of the Mortgage Loan, |
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to the extent such interest collections are not sufficient, from general collections on all the Mortgage Loans. |
The Trust Advisor ongoing fee rate will be a fixed rate equal to 0.00231%per annum.
In addition, as additional compensation for its activities under the Pooling and Servicing Agreement, the Trust Advisor will be entitled to receive the trust advisor consulting fee. The trust advisor consulting fee will be payable, subject to the limitations set forth below, in an amount equal to $10,000 in connection with each Material Action for which the Trust Advisor engages in consultation under the Pooling and Servicing Agreement;provided,however, that (i) no such fee will be paid except to the extent such fee is actually paid by the related borrower (and in no event will such fee be paid from the Trust Fund); (ii) the Trust Advisor will be entitled to waive all or any portion of such fee in its sole discretion and (iii) the applicable Master Servicer or the applicable Special Servicer, as applicable, will be authorized to waive the borrower’s payment of such fee in whole or in part if the applicable Master Servicer or the applicable Special Servicer, as applicable, (A) determines that such waiver is consistent with the Servicing Standard and (B) consults with the Trust Advisor prior to effecting such waiver. In connection with each Material Action for which the Trust Advisor has consultation rights under the Pooling and Servicing Agreement, the applicable Master Servicer or the applicable Special Servicer, as applicable, must use commercially reasonable efforts consistent with the Servicing Standard to collect the applicable trust advisor consulting fee from the related borrower, in each case only to the extent that such collection is not prohibited by the related Mortgage Loan documents. In no event may a Master Servicer or a Special Servicer, as applicable, take any enforcement action in connection with the collection of such trust advisor consulting fee, except that such restrictions will not be construed to prohibit requests for payment of such trust advisor consulting fee.
In connection with the Brickyard Square Loan Combination, the Trust Advisor will have no duty to consult with the WFCM 2015-C28 Special Servicer and in connection with the Bella Luna / San Lucas Loan Combination, the Trust Advisor will have no duty to consult with the WFCM 2015-LC20 Special Servicer and, in each case, will not be entitled to any trust advisor ongoing fees or trust advisor consulting fees with respect to that mortgage loan. The trust advisor appointed under the WFCM 2015-C28 securitization and the trust advisor appointed under the WFCM 2015-LC20 securitization (each an “Other Trust Advisor”) will be entitled to compensation with respect to the related Non-Serviced Pari Passu Mortgage Loan that is substantially similar in all material respects, but not necessarily identical, to the compensation payable to the Trust Advisor under the Pooling and Servicing Agreement as described above. See “Description of the Offered Certificates—Fees and Expenses”, “Servicing of the Mortgage Loans and Administration of the Trust Fund—Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations” in this free writing prospectus.
Investment of Accounts. Each of the Master Servicers and the Special Servicers will be authorized to invest or direct the investment of funds held in any Collection Account, escrow and/or reserve account or REO Account maintained by it, in Permitted Investments. See “—Collection Accounts” below. A Master Servicer or a Special Servicer—
· | will be entitled to retain any interest or other income earned on those funds, and |
· | will be required to cover any losses of principal of those investments from its own funds, to the extent those losses are incurred with respect to investments made for the benefit of such Master Servicer or such Special Servicer, as applicable. |
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Neither the Master Servicers nor the Special Servicers will be obligated, however, to cover any losses resulting from the bankruptcy or insolvency of any depository institution or trust company holding any of those accounts.
Payment of Servicing Expenses; Servicing Advances. Each of the Master Servicers, the Special Servicers and the Trustee will be required to pay its overhead and any general and administrative expenses incurred by it in connection with its activities under the Pooling and Servicing Agreement. The Master Servicers, the Special Servicers and the Trustee will not be entitled to reimbursement for these expenses except as expressly provided in the Pooling and Servicing Agreement.
Any and all customary, reasonable and necessary out-of-pocket costs and expenses, including reasonable attorneys’ fees and expenses, incurred or to be incurred by a Master Servicer or a Special Servicer (or, if applicable, the Trustee) in connection with the servicing or administration of a Mortgage Loan and any related Mortgaged Property as to which a default, delinquency or other unanticipated event has occurred or is imminent, or in connection with the administration of any REO Property, will be advances (any such advances, “Servicing Advances”). The Pooling and Servicing Agreement may also designate certain other expenses as Servicing Advances. Subject to the limitations described below, the applicable Master Servicer will be required to make any Servicing Advances relating to any Mortgage Loan (other than any Non-Serviced Pari Passu Mortgage Loan) or REO Property (other than any REO Property acquired with respect to any Non-Serviced Loan Combination) for which it acts as Master Servicer. Servicing Advances will be reimbursable from future payments and other collections, including insurance proceeds, condemnation proceeds and liquidation proceeds, received in connection with the related Mortgage Loan or REO Property.
The applicable Special Servicer must notify the applicable Master Servicer whenever a Servicing Advance is required to be made with respect to any Specially Serviced Mortgage Loan or REO Property (other than any interest in REO Property acquired with respect to any Non-Serviced Loan Combination), and the applicable Master Servicer must make the Servicing Advance unless such Master Servicer determines such advance to be a nonrecoverable advance, except that the applicable Special Servicer must either (i) make any necessary emergency Servicing Advances on a Specially Serviced Mortgage Loan or REO Property (other than any interest in REO Property acquired with respect to any Non-Serviced Loan Combination) or (ii) notify the applicable Master Servicer no later than one (1) business day after such Special Servicer acquires actual knowledge of the need for such emergency Servicing Advance on a Specially Serviced Mortgage Loan and request such Master Servicer to make such emergency Servicing Advance. If the applicable Special Servicer makes an emergency Servicing Advance, the applicable Master Servicer must reimburse such Special Servicer for such emergency Servicing Advance (with interest on such advance) within five business days following the applicable Special Servicer’s request for reimbursement, upon which the applicable Master Servicer will be deemed to have made the Servicing Advance. Notwithstanding the foregoing, the applicable Master Servicer need not so reimburse an emergency Servicing Advance that it determines to be a nonrecoverable advance but such Servicing Advance, like other nonrecoverable advances, may be reimbursed to the applicable Special Servicer from amounts on deposit in the Collection Accounts.
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If a Master Servicer is required under the Pooling and Servicing Agreement to make a Servicing Advance, but does not do so within ten days after the Servicing Advance is required to be made, then the Trustee will be required:
· | if it has actual knowledge of the failure, to give the defaulting party notice of its failure, and |
· | if the failure continues for one more business day, to make the Servicing Advance. |
Except for the Master Servicers, the Special Servicers or the Trustee as described above, no person will be required to make any Servicing Advances with respect to any Mortgage Loan or any related Mortgaged Property or REO Property;provided that, in the case of any Non-Serviced Pari Passu Mortgage Loan, the Other Master Servicer, the Other Special Servicer or the Other Trustee under the Other Pooling and Servicing Agreement related to the securitization of such Non-Serviced Pari Passu Companion Loan will be required to make servicing advances with respect to such Non-Serviced Pari Passu Mortgage Loan pursuant to the Other Pooling and Servicing Agreement related to the securitization of such Non-Serviced Pari Passu Companion Loan.
Despite the foregoing discussion or anything else to the contrary in this free writing prospectus, none of the Master Servicers, the Special Servicers or the Trustee will be obligated to make Servicing Advances that it determines, subject to the Servicing Standard, or, with respect to the Trustee, in its reasonable, good faith judgment, would not be ultimately recoverable from expected collections on the related Mortgage Loan or any related REO Property. If the applicable Master Servicer, the applicable Special Servicer or the Trustee makes any Servicing Advance that it subsequently determines, subject to the Servicing Standard, or, with respect to the Trustee, in its reasonable, good faith judgment, is not recoverable from expected collections on the related Mortgage Loan or any related REO Property, it may obtain reimbursement for that advance, together with interest on that advance, out of general collections on the Mortgage Pool on deposit in the related Collection Account (or the other Collection Account as an Uncovered Amount) from time to time. The Trustee may conclusively rely on the determination of the applicable Master Servicer or the applicable Special Servicer regarding the nonrecoverability of any Servicing Advance. Absent bad faith, the determination by any authorized person that an advance constitutes a nonrecoverable advance as described above will be conclusive and binding. In addition, each Special Servicer may, at its option and in its sole discretion, make a determination, subject to the Servicing Standard, that any Servicing Advance previously made and any proposed Servicing Advance, if made, would not ultimately be recoverable, in which case such determination will be conclusive and binding on the applicable Master Servicer and the Trustee and such Servicing Advance will constitute a nonrecoverable Servicing Advance (but this statement will not be construed to entitle such Special Servicer to reverse any other authorized person’s determination or to prohibit any such other authorized person from making a determination that a Servicing Advance constitutes or would constitute a nonrecoverable advance).
Any Servicing Advance (with interest) that has been determined to be a nonrecoverable advance with respect to the Mortgage Pool will be reimbursable from the Collection Accounts in the collection period in which the nonrecoverability determination is made and in subsequent collection periods. Any reimbursement of a nonrecoverable servicing advance (including interest accrued thereon) will be made first from the principal portion of current debt service advances and payments and other collections of principal on the Mortgage Pool (thereby reducing the Principal Distribution Amount otherwise distributable on the Principal Balance Certificates on the related distribution date) prior to the application of any other general collections on the Mortgage Pool against such reimbursement. To the extent that
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the amount representing principal is insufficient to fully reimburse the party entitled to the reimbursement, then such party may elect at its sole option and in its sole discretion to defer the reimbursement of some or all of the portion that exceeds such amount (in which case interest will continue to accrue on the unreimbursed portion of the advance) for a time as required to reimburse the excess portion from principal for consecutive periods up to twelve months (provided that any such deferral exceeding six months will require, during the occurrence and continuance of any Subordinate Control Period, the consent of the Subordinate Class Representative) and any election to so defer will be deemed to be in accordance with the Servicing Standard or any duty under the Pooling and Servicing Agreement;provided that no such deferral will occur at any time to the extent that amounts otherwise distributable as principal are available for such reimbursement. To the extent that the reimbursement is made from principal collections, the Principal Distribution Amount otherwise distributable on the Principal Balance Certificates on the related distribution date will be reduced and a Realized Loss will be allocated (in reverse sequential order in accordance with the loss allocation rules described above under “Description of the Offered Certificates—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses”) to reduce the aggregate principal balance of the Certificates on that distribution date. To the extent that reimbursement is made from other collections, the funds available to make distributions to Certificateholders of their interest distribution amounts on the related distribution date may be reduced, causing a shortfall in interest distributions on the Offered Certificates. The applicable Master Servicer or the Trustee, as applicable, must give the Rating Agencies at least 15 days’ notice (in accordance with the procedures regarding Rule 17g-5 set forth in the Pooling and Servicing Agreement) prior to any reimbursement to it of nonrecoverable advances from amounts in the Collection Accounts or the Distribution Account, as applicable, allocable to interest on the Mortgage Loans unless (1) that party determines in its sole discretion that waiting 15 days after such a notice could jeopardize its ability to recover such nonrecoverable advances, (2) changed circumstances or new or different information becomes known to that party that could affect or cause a determination of whether any advance is a nonrecoverable advance or whether to defer reimbursement of a nonrecoverable advance or the determination in clause (1) above, or (3) in the case of the applicable Master Servicer, it has not timely received from the Trustee information requested by such Master Servicer to consider in determining whether to defer reimbursement of a nonrecoverable advance. If any of the circumstances described in clause (1), clause (2) or clause (3) above apply, the applicable Master Servicer or Trustee, as applicable, must give each Rating Agency notice (in accordance with the procedures regarding Rule 17g-5 set forth in the Pooling and Servicing Agreement) of the anticipated reimbursement as soon as reasonably practicable.
Additionally, in the event that any Servicing Advance (including any interest accrued thereon) with respect to a Mortgage Loan remains unreimbursed following the time that such Mortgage Loan is modified while a Specially Serviced Mortgage Loan, the applicable Master Servicer or the Trustee will be entitled to reimbursement for that advance (even though that advance has not been determined to be nonrecoverable), on a monthly basis, out of — but solely out of — the principal portion of current debt service advances and payments and other collections of principal on all the Mortgage Loans after the application of those principal advances and principal payments and collections to reimburse any party for nonrecoverable servicing advances (as described in the prior paragraph) and/or nonrecoverable debt service advances as described under “Description of the Offered Certificates—Advances of Delinquent Monthly Debt Service Payments” in this free writing prospectus (thereby reducing the Principal Distribution Amount otherwise distributable on the related distribution date) or collections on the related Mortgage Loan intended as a reimbursement of such advance. If any such advance is not reimbursed in whole in respect of any distribution date due to insufficient principal advances and principal collections during
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the related collection period, then the portion of that advance which remains unreimbursed will be carried over (with interest thereon continuing to accrue) for reimbursement on the following distribution date (to the extent of principal collections available for that purpose). If any such advance, or any portion of any such advance, is determined, at any time during this reimbursement process, to be ultimately nonrecoverable out of collections on the related Mortgage Loan or is determined, at any time during the reimbursement process, to be ultimately nonrecoverable out of the principal portion of debt service advances and payments and other collections of principal on all the Mortgage Loans, then the applicable Master Servicer or the Trustee, as applicable, will be entitled to immediate reimbursement as a nonrecoverable advance in an amount equal to the portion of that advance that remains outstanding, plus accrued interest (as described in the preceding paragraph). The reimbursement of advances on worked-out loans from principal advances and collections of principal as described in the first sentence of this paragraph during any collection period will result in a reduction of the Principal Distribution Amount otherwise distributable on the Principal Balance Certificates (other than the Class A-4FL, A-4FX, A-S, B, C and PEX Certificates), and the Class A-4FX, A-S, B and C Regular Interests (and, therefore, the Class A-4FL, A-4FX, A-S, B, C and PEX Certificates, as applicable) on the related distribution date but will not result in the allocation of a Realized Loss on such distribution date (although a Realized Loss may subsequently arise if the amount reimbursed to the applicable Master Servicer or the Trustee ultimately turns out to be nonrecoverable from the proceeds of the Mortgage Loan).
Insofar as a Special Servicer may make Servicing Advances, it will have the same rights described above as a Master Servicer and the Trustee.
The Pooling and Servicing Agreement will also permit the applicable Master Servicer, and require the applicable Master Servicer at the direction of the applicable Special Servicer if a Specially Serviced Mortgage Loan or REO Property (other than any interest in REO Property acquired with respect to any Non-Serviced Loan Combination) is involved, to pay directly out of the applicable Collection Account any servicing expense that, if advanced by the applicable Master Servicer or applicable Special Servicer, would not be recoverable (together with interest on the advance) from expected collections on the related Mortgage Loan or any related REO Property. This is only to be done, however, when a Master Servicer or a Special Servicer, as the case may be, has determined in accordance with the Servicing Standard that making the payment is in the best interests of the Certificateholders.
The Master Servicers, the Special Servicers and the Trustee will each be entitled to receive interest on Servicing Advances made by that entity. The interest will accrue on the amount of each Servicing Advance for so long as the Servicing Advance is outstanding, at a rateper annum equal to the prime rate as published in the “Money Rates” section ofThe Wall Street Journal, as that prime rate may change from time to time. Interest accrued with respect to any Servicing Advance will generally be payable at any time on or after the date when the advance is reimbursed, in which case the payment will be made out of general collections on the Mortgage Loans and any REO Properties on deposit in the Collection Accounts, thereby reducing amounts available for distribution on the Certificates. Under some circumstances, Default Interest and/or late payment charges may be used to pay interest on advances prior to making payment from those general collections, but prospective investors should assume that the available amounts of Default Interest and late payment charges will bede minimis.
With respect to any Non-Serviced Loan Combination, the related Other Master Servicer, the related Other Special Servicer and the related Other Trustee will be required to make servicing advances with respect to such Non-Serviced Loan Combination on terms
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substantially similar in all material respects, but not necessarily identical, to the terms of the Pooling and Servicing Agreement relating to servicing advances, and each of them will be entitled to receive interest on servicing advances made by those parties in accordance with the related pooling and servicing agreement, and any such advance, with interest thereon, will be reimbursablepro rata from payments allocable to such Pari Passu Mortgage Loan pursuant to the related intercreditor agreement. See “—Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations” in this free writing prospectus.
Trust Advisor Expenses. The Trust Advisor will be entitled to payments of indemnification amounts or certain Additional Trust Fund Expenses payable to the Trust Advisor pursuant to the Pooling and Servicing Agreement (other than the Trust Advisor ongoing fee and the trust advisor consulting fee), which we refer to as Trust Advisor Expenses. In general, the amount of Trust Advisor Expenses reimbursable to the Trust Advisor on each distribution date must not exceed the sum of (i) the portion of the Principal Distribution Amount for such distribution date otherwise distributable to the Principal Balance Certificates (other than the Class A-4FL, A-4FX, A-S, B, C and PEX Certificates), and the Class A-4FX, A-S, B and C Regular Interests (and, therefore, the Class A-4FL, A-4FX, A-S, B, C and/or PEX Certificates, as applicable) that are not Control-Eligible Certificates and (ii) the aggregate amount of distributable certificate interest (calculated without regard to the reduction by Trust Advisor Expenses for such distribution date, in each case, allocable to the Class D Certificates and the Class C, B and A-S Regular Interests for such distribution date. Amounts so reimbursed on each distribution date will be allocated and borne by the Certificateholders to the extent and in the manner described under “Description of the Offered Certificates—Distributions—Interest Distributions” and “—Reductions of Interest Entitlements and the Principal Distribution Amount in Connection with Certain Trust Advisor Expenses”. Any amount of Trust Advisor Expenses that are not reimbursed on a distribution date because of the limitations set forth in the immediately preceding sentence will be payable on the next distribution date to the extent funds are sufficient, in accordance with such limitations, to make such payments. Notwithstanding these provisions, Trust Advisor Expenses incurred in connection with legal proceedings that are pending or threatened against the Trust Advisor at the time of its discharge, termination or resignation will be Designated Trust Advisor Expenses and, as such, will not be subject to the limitations described above and will instead be treated in substantially the same manner as other unanticipated expenses of the Trust Fund for purposes of payment by the Trust Fund and allocation between the various Classes of Certificateholders.
Asset Status Reports
No later than 45 days after the occurrence of a Servicing Transfer Event with respect to any Specially Serviced Mortgage Loan (other than any Non-Serviced Pari Passu Mortgage Loan), the applicable Special Servicer with respect to such Specially Serviced Mortgage Loan must, in general, deliver to the Subordinate Class Representative (other than with respect to any Excluded Loan), among others, an asset status report with respect to that Mortgage Loan and the related Mortgaged Property or Properties. That asset status report is required to include the following information to the extent reasonably determinable:
· | a summary of the status of the subject Specially Serviced Mortgage Loan and any negotiations with the related borrower; |
· | a discussion of the general legal and environmental considerations reasonably known to such Special Servicer, consistent with the Servicing Standard, that are applicable to the exercise of remedies set forth in the Pooling and Servicing Agreement and to the enforcement of any related guaranties or other collateral for the related Specially Serviced Mortgage Loan and whether outside legal counsel has been retained; |
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· | the most current rent roll or maintenance schedule (as applicable) and income or operating statement available for the related Mortgaged Property or Properties; |
· | a summary of such Special Servicer’s recommended action with respect to the Specially Serviced Mortgage Loan; |
· | the appraised value of the related Mortgaged Property or Properties, together with the assumptions used in the calculation thereof; and |
· | such other information as such Special Servicer deems relevant in light of the Servicing Standard. |
Each asset status report will be required to be delivered to the Subordinate Class Representative (during a Subordinate Control Period or Collective Consultation Period (other than with respect to any Excluded Loan)), the Trust Advisor (during a Collective Consultation Period or Senior Consultation Period), the applicable Master Servicer, the Trustee, the Certificate Administrator (upon request) and the Rule 17g-5 Information Provider (which will be required to promptly post the report to the Rule 17g-5 Information Provider’s Website). During a Subordinate Control Period (other than with respect to any Excluded Loan), if the Subordinate Class Representative does not disapprove an asset status report within ten business days of receipt, the applicable Special Servicer will be required to implement the recommended action as outlined in the asset status report. In addition, during a Subordinate Control Period (other than with respect to any Excluded Loan), the Subordinate Class Representative may object to any asset status report within ten business days of receipt;provided that the applicable Special Servicer will be required to implement the recommended action as outlined in the asset status report if it makes a determination in accordance with the Servicing Standard that the objection is not in the best interest of all the Certificateholders (as a collective whole, as if they together constituted a single lender). If, during a Subordinate Control Period, the Subordinate Class Representative disapproves the asset status report (other than with respect to any Excluded Loan) and the applicable Special Servicer has not made the affirmative determination described above, the applicable Special Servicer will be required to revise the asset status report as soon as practicable thereafter, but in no event later than 30 days after the disapproval. During a Subordinate Control Period, the applicable Special Servicer will be required to revise the asset status report (other than with respect to any Excluded Loan) until the Subordinate Class Representative fails to disapprove the revised asset status report as described above, until the Subordinate Class Representative’s approval is no longer required or until the applicable Special Servicer makes a determination that the objection is not in the best interests of the Certificateholders (as a collective whole, as if they together constituted a single lender). If, during a Subordinate Control Period, the Subordinate Class Representative and the applicable Special Servicer have not agreed upon an asset status report (other than with respect to any Excluded Loan) within 90 days following the Subordinate Class Representative’s receipt of the initial asset status report, the applicable Special Servicer will implement the actions directed by the Subordinate Class Representative unless such directions would violate the Servicing Standard (in which case the applicable Special Servicer will implement the actions described in the most recent asset status report submitted by such Special Servicer). Notwithstanding the foregoing, if the applicable Special Servicer determines that emergency action is necessary to protect the related Mortgaged Property or the interests of the Certificateholders, or if a failure to take any such action at such time would be inconsistent with the Servicing Standard, the applicable Special Servicer may take actions with respect to the related Mortgaged Property before the expiration of the ten business day period referenced above and if such Special Servicer reasonably determines in accordance with the Servicing Standard that failure to take such actions before the expiration of such period would materially and adversely affect
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the interest of the Certificateholders and, except in the case of any Excluded Loan, the applicable Special Servicer has made commercially reasonable efforts, during a Subordinate Control Period, to contact the Subordinate Class Representative.
In addition, the applicable Special Servicer will be required to deliver a summary (as approved by the Subordinate Class Representative if a Subordinate Control Period is in effect (other than with respect to any Excluded Loan)) of each Final Asset Status Report to the Certificate Administrator. Upon receipt of such summary, the Certificate Administrator will be required to post such summary on its website.
A “Final Asset Status Report”, with respect to any Specially Serviced Mortgage Loan, means each related asset status report, together with such other data or supporting information provided by the applicable Special Servicer to the Subordinate Class Representative (other than with respect to any Excluded Loan), in each case prepared in connection with the workout or liquidation of such Specially Serviced Mortgage Loan and which, in any event, will not include any Privileged Information;provided that no asset status report will be considered to be a Final Asset Status Report unless, during a Subordinate Control Period, the Subordinate Class Representative (other than with respect to any Excluded Loan) has either finally approved of and consented to the actions proposed to be taken in connection therewith, or has exhausted all of its rights of approval or consent, or has been deemed to approve or consent to such action.
Each of the Subordinate Class Representative (during any Collective Consultation Period except with respect to any Excluded Loan) and the Trust Advisor (during any Collective Consultation Period and any Senior Consultation Period) will be entitled to consult on a non-binding basis with the applicable Special Servicer and propose possible alternative courses of action and provide other feedback in respect of any asset status report, and such Special Servicer will be obligated to consider such alternative courses of action and any other feedback provided by the Subordinate Class Representative (other than with respect to any Excluded Loan) and/or the Trust Advisor, as applicable. The applicable Special Servicer may revise the asset status reports as it deems reasonably necessary in accordance with the Servicing Standard to take into account any input and/or recommendations of the Subordinate Class Representative and/or the Trust Advisor. Consultation with the Trust Advisor will occur in the manner described under “—The Trust Advisor” below.
Also notwithstanding the provisions described above, in connection with any asset status report, the Subordinate Class Representative and the Trust Advisor may not direct or advise the applicable Special Servicer to act, and the applicable Special Servicer is to ignore any direction or advice for it to act, in any manner that would—
· | require or cause such Special Servicer to violate applicable law, the terms of any Mortgage Loan or any other provision of the Pooling and Servicing Agreement, including such Special Servicer’s obligation to act in accordance with the Servicing Standard and the REMIC provisions of the Code; |
· | result in an adverse tax consequence for the Trust Fund; |
· | expose the Trust, the parties to the Pooling and Servicing Agreement or any of their respective affiliates, members, managers, officers, directors, employees or agents, to any claim, suit or liability; or |
· | materially expand the scope of the Master Servicers’ or the Special Servicers’ responsibilities under the Pooling and Servicing Agreement. |
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During any Collective Consultation Period or Senior Consultation Period, a Special Servicer will be required to consult on a non-binding basis with the Trust Advisor with respect to Material Actions (regardless of whether such Material Action is covered by an asset status report);provided,however, that such Special Servicer will not consult with the Trust Advisor with respect to Material Actions related to collateral substitutions, assignments, insurance policies, borrower substitutions, lease modifications and amendments and other similar actions that such Special Servicer may perform under the Pooling and Servicing Agreement, to the extent such actions do not relate to the workout, restructuring, resolution, sale or liquidation of a Specially Serviced Mortgage Loan or REO Property.
The Majority Subordinate Certificateholder and the Subordinate Class Representative
The Majority Subordinate Certificateholder. The “Majority Subordinate Certificateholder” will be the holder(s) of a majority interest in (i) during a Subordinate Control Period, the most subordinate Class among the Control-Eligible Certificates that has an aggregate principal balance, net of Appraisal Reduction Amounts allocable thereto, that is at least equal to 25% of its total initial principal balance or (ii) during a Collective Consultation Period, the most subordinate Class among the Control-Eligible Certificates that has an aggregate principal balance, without regard to Appraisal Reduction Amounts, that is at least equal to 25% of its total initial principal balance (the Class determined pursuant to clause (i) or clause (ii), as applicable, the “Subordinate Class”). Notwithstanding anything to the contrary contained herein, at any time that the holder of a majority interest in the Class E Certificates is the Majority Subordinate Certificateholder, the Majority Subordinate Certificateholder may waive its right to appoint a Subordinate Class Representative and to exercise any of the rights of the Majority Subordinate Certificateholder set forth in the Pooling and Servicing Agreement by irrevocable written notice delivered to the Depositor, Trustee, Certificate Administrator, Master Servicers, Special Servicers and Trust Advisor. Any such waiver will remain effective with respect to such holder and such class until such time as the Majority Subordinate Certificateholder has sold or transferred, in the aggregate, a majority of the Class E Certificates to an unaffiliated third party or third parties. Following any such transfer the successor majority subordinate certificateholder will again have the rights of the Majority Subordinate Certificateholder without regard to any prior waiver by the predecessor majority subordinate certificateholder. The successor majority subordinate certificateholder will also have the right to irrevocably waive its right to appoint a Subordinate Class Representative and to exercise any of the rights of the Subordinate Class Representative. No successor majority subordinate certificateholder will have any consent rights with respect to any Mortgage Loan that became a Specially Serviced Mortgage Loan prior to its purchase of the Class E Certificates and had not become a Corrected Mortgage Loan prior to such purchase until such Mortgage Loan becomes a Corrected Mortgage Loan. Unless a Senior Consultation Period is deemed to occur and is continuing pursuant to clause (ii) of the definition of “Senior Consultation Period,” a “Subordinate Control Period” will exist when the aggregate principal balance of the Class E Certificates, net of any Appraisal Reduction Amounts allocable to that Class, is at least equal to 25% of the initial principal balance of the Class E Certificates.
During any Subordinate Control Period, the Majority Subordinate Certificateholder, or the Subordinate Class Representative on its behalf, will have the right to terminate the applicable Special Servicer, with or without cause (in each case, other than with respect to (i) any Excluded Loan or (ii) any Non-Serviced Pari Passu Mortgage Loan) and appoint itself or an affiliate or another person as the successor special servicer with respect to the applicable Mortgage Loans. See “Description of the Mortgage Pool—Loan Combinations” in
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this free writing prospectus. It will be a condition to such appointment that the successor special servicer be a Qualified Replacement Special Servicer and that each Rating Agency confirm that the appointment would not result in a qualification, downgrade or withdrawal of any of their then-current ratings of the Certificates. It is anticipated that DoubleLine Capital LP (i) will purchase the Class E, F and G Certificates on the Closing Date and (ii) will become the initial Majority Subordinate Certificateholder and be appointed as the initial Subordinate Class Representative.
Subordinate Class Representative. The Majority Subordinate Certificateholder will have a continuing right to appoint, remove or replace a subordinate class representative in its sole discretion (the “Subordinate Class Representative”). This right may be exercised at any time and from time to time. The Subordinate Class Representative may resign at any time. If at any time the Majority Subordinate Certificateholder has not appointed a Subordinate Class Representative (unless the Majority Subordinate Class Representative has expressly waived its right to act as or appoint a Subordinate Class Representative and to exercise any of the rights of the Majority Subordinate Certificateholder), then the Majority Subordinate Certificateholder will be deemed to be the Subordinate Class Representative. To the extent that the Majority Subordinate Certificateholder or the Subordinate Class Representative is a Borrower Party with respect any Mortgage Loan or Loan Combination, such Mortgage Loan or Loan Combination, as applicable, will constitute an “Excluded Loan”.
Rights and Powers of Subordinate Class Representative. During any Subordinate Control Period, (i) the Subordinate Class Representative generally will be entitled to approve or disapprove asset status reports (other than asset status reports related to (i) any Excluded Loan or (ii) any Non-Serviced Pari Passu Mortgage Loan) and (ii) the applicable Special Servicer generally will not be permitted to take or consent to the applicable Master Servicer taking any Material Action not otherwise covered by an approved asset status report, unless and until, except with respect to any Excluded Loan, such Special Servicer has notified the Subordinate Class Representative and the Subordinate Class Representative has consented (or failed to object) thereto in writing within 10 business days (or in connection with an Acceptable Insurance Default, 30 days) of having been notified thereof in writing and provided with all reasonably requested information by it. However, the applicable Special Servicer may take any Material Action (or consent to the applicable Master Servicer taking a Material Action) without waiting for the response of the Subordinate Class Representative if such Special Servicer determines that immediate action is necessary to protect the interests of the Certificateholders as a collective whole. Furthermore, during a Subordinate Control Period, the Subordinate Class Representative may, in general, direct a Special Servicer (other than with respect to (i) any Excluded Loan or (ii) any Non-Serviced Pari Passu Mortgage Loan) to take, or to refrain from taking, any actions as that representative may deem advisable with respect to the servicing and administration of Specially Serviced Mortgage Loans and REO Properties or as to which provision is otherwise made in the Pooling and Servicing Agreement. During a Subordinate Control Period, the Subordinate Class Representative will have the right to remove an existing Special Servicer, with or without cause, and appoint a successor to such Special Servicer as described under “—Replacement of the Special Servicers” below (in each case, other than with respect to (i) any Excluded Loan or (ii) any Non-Serviced Pari Passu Mortgage Loan). With respect to any Non-Serviced Pari Passu Mortgage Loan (unless such Mortgage Loan is an Excluded Loan), the Subordinate Class Representative will be permitted to request that the Other Special Servicer consult with it on a non-binding basis with respect to material actions under the pooling and servicing agreement for such securitization, which are substantially similar in all material respects, but not necessarily identical, to the Material Actions under the Pooling and Servicing Agreement, in accordance with the terms of the related intercreditor agreement.
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Unless a Senior Consultation Period is deemed to occur and is continuing pursuant to clause (ii) of the definition of “Senior Consultation Period”, a “Collective Consultation Period” will exist when both (i) the aggregate principal balance of the Class E Certificates, reduced by any Appraisal Reduction Amounts allocable to that Class, isless than 25% of the initial principal balance of the Class E Certificates and (ii) the aggregate principal balance of the Class E Certificates, without regard to any Appraisal Reduction Amounts allocable to that Class, is at least 25% of the initial principal balance of the Class E Certificates. A “Senior Consultation Period” will exist when either (i) the aggregate principal balance of the Class E Certificates, without regard to the allocation of any Appraisal Reduction Amounts to that Class, isless than 25% of the initial principal balance of the Class E Certificates or (ii) during such time as the Class E Certificates are the most subordinate class among the Class E, F and G Certificates that have a then-outstanding principal balance, net of Appraisal Reduction Amounts, at least equal to 25% of its initial principal balance, the then-Majority Subordinate Certificateholder has irrevocably waived its right to appoint a Subordinate Class Representative and to exercise any of the rights of the Majority Subordinate Certificateholder or cause the exercise of the rights of the Subordinate Class Representative until such rights are reinstated to a successor majority subordinate certificateholder pursuant to the terms of the Pooling and Servicing Agreement;provided,however, that with respect to any Non-Serviced Pari Passu Mortgage Loan, the existence of a senior consultation period with respect to the Subordinate Class Representative under this transaction is expected to have no effect on the rights of the subordinate class representative with respect to the related other securitization.
During any Collective Consultation Period, the Subordinate Class Representative will have consultation rights (in addition to those of the Trust Advisor) with respect to Material Actions not otherwise covered by an asset status report as to which the Subordinate Class Representative has been consulted (in each case, other than with respect to (i) any Excluded Loan or (ii) any Non-Serviced Pari Passu Mortgage Loan). During any Collective Consultation Period or Senior Consultation Period, the Majority Subordinate Certificateholder and the Subordinate Class Representative will have no right to remove an existing Special Servicer. With respect to any Non-Serviced Pari Passu Mortgage Loan, the occurrence and continuance of a Collective Consultation Period or Senior Consultation Period with respect to the Subordinate Class Representative under this transaction is expected to have no effect on the rights of the subordinate class representative with respect to such other securitization.
Notwithstanding the provisions described above, the Subordinate Class Representative may not direct or advise the applicable Special Servicer to act, and the applicable Special Servicer is to ignore any direction for it to act, in any manner that would—
· | require or cause such Special Servicer to violate applicable law, the terms of any Mortgage Loan or any other provision of the Pooling and Servicing Agreement or any intercreditor agreement, including that party’s obligation to act in accordance with the Servicing Standard and the REMIC provisions of the Code; |
· | result in an adverse tax consequence for the Trust Fund; |
· | expose the Trust, the parties to the Pooling and Servicing Agreement or any of their respective affiliates, members, managers, officers, directors, employees or agents, to any claim, suit or liability; or |
· | materially expand the scope of a Master Servicer’s or such Special Servicer’s responsibilities under the Pooling and Servicing Agreement. |
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When reviewing this “Servicing of the Mortgage Loans and Administration of the Trust Fund” section, it is important that you consider the effects that the rights and powers of the Subordinate Class Representative discussed above could have on the actions of the applicable Special Servicer.
With respect to any Non-Serviced Pari Passu Mortgage Loan, provisions that are substantially similar in all material respects (but not necessarily identical) will apply with respect to the subordinate class representative under each respective other securitization. See “—Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations” in this free writing prospectus.
Liability to Borrowers. In general, any and all expenses of the Subordinate Class Representative are to be borne by the holders of the appointing Class, in proportion to their respective percentage interests in that Class, and not by the Trust Fund. However, if a claim is made against the Subordinate Class Representative by a borrower with respect to the Pooling and Servicing Agreement or any particular Mortgage Loan and the Trust or a party to the Pooling and Servicing Agreement is also named in the relevant legal action, a Special Servicer will generally assume the defense of the claim on behalf of and at the expense of the Trust Fund,provided that such Special Servicer (in its sole judgment) determines that the Subordinate Class Representative acted in good faith, without negligence or willful misfeasance with regard to the particular matter at issue.
No Liability to the Trust Fund and Certificateholders. The Pooling and Servicing Agreement will provide that each Certificateholder, by its acceptance of its related Certificate, will be deemed to have acknowledged and agreed that (i) the Subordinate Class Representative may have special relationships and interests that conflict with those of holders and owners of one or more Classes of Certificates; (ii) the Subordinate Class Representative may act solely in the interests of the holders of the Class E, F and/or G Certificates; (iii) the Subordinate Class Representative does not have any duties to the Trust Fund or to the holders of any Class of Certificates; (iv) the Subordinate Class Representative may take actions that favor the interests of the holders of the Class E, F and/or G Certificates over the interests of the holders of one or more other Classes of Certificates; (v) the Subordinate Class Representative will have no liability whatsoever to the Trust Fund, the Certificateholders or any borrower for having acted as described in this paragraph, or in exercising its rights, powers and privileges, in taking any action or refraining from taking any action, or in giving any consent or failing to give any consent, in each case, pursuant to the Pooling and Servicing Agreement; and (vi) no Certificateholder may take any action whatsoever against the Subordinate Class Representative or any affiliate, director, officer, employee, shareholder, member, partner, agent or principal thereof as a result of the Subordinate Class Representative having acted in the manner described in this paragraph, or a result of the special relationships or interests described in this paragraph. With respect to any Non-Serviced Pari Passu Mortgage Loan, substantially similar but not necessarily identical provisions will apply with respect to the subordinate class representative under the related securitization. See “Description of the Mortgage Pool—Loan Combinations” and “Servicing of the Mortgage Loans and Administration of the Trust Fund—Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations” in this free writing prospectus.
The Trust Advisor
General. The Trust Advisor will agree in the Pooling and Servicing Agreement to perform specified services for the benefit of the Trustee on behalf of the Trust with respect to all Mortgage Loans (other than the Brickyard Square Mortgage Loan and the Bella Luna / San Lucas Mortgage Loan). The Trust Advisor will perform certain review duties on a
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platform-level basis that will generally include an annual review (in accordance with the requirements of the Pooling and Servicing Agreement) of, and (if any Mortgage Loans in the Mortgage Pool were Specially Serviced Mortgage Loans during the preceding calendar year) the preparation of an annual report regarding, certain actions by the applicable Special Servicer pursuant to the Pooling and Servicing Agreement with respect to Specially Serviced Mortgage Loans. The review and report generally will be based on: (a) during a Subordinate Control Period, any Final Asset Status Reports delivered to the Trust Advisor by the applicable Special Servicer, (b) during a Collective Consultation Period or Senior Consultation Period, any asset status report and certain additional information delivered to the Trust Advisor by the applicable Special Servicer, (c) during a Senior Consultation Period, in addition to the foregoing, a meeting with the applicable Special Servicer to conduct a limited review of such Special Servicer’s operational practices on a platform-level basis in light of such Special Servicer’s obligations under the Pooling and Servicing Agreement and the Servicing Standard, and (d) during any control or consultation period (as described in clauses (a) – (c) above), such other additional limited non-privileged information and documentation provided by the applicable Special Servicer to the Trust Advisor that is required or permitted to be delivered to the Trust Advisor under the Pooling and Servicing Agreement. In addition, during any Collective Consultation Period or Senior Consultation Period, the applicable Special Servicer will be required to consult with the Trust Advisor with regard to certain matters with respect to such Special Servicer’s servicing of the Specially Serviced Mortgage Loans to the extent described in this free writing prospectus and set forth in the Pooling and Servicing Agreement.
The obligations of the Trust Advisor under the Pooling and Servicing Agreement are primarily to provide analytical and reporting services. When we use the words “consult”, “recommend” or words of similar import in respect of the Trust Advisor and any servicing action or inaction, we are referring to the Trust Advisor’s analytical and reporting services, and not to a duty to make recommendations for or against any servicing action. Although the Trust Advisor must consider the Servicing Standard in its analysis, the Trust Advisor will not itself be bound by the Servicing Standard. The Trust Advisor will have no liability to any Certificateholders or any particular Certificateholder for actions taken or not taken under the Pooling and Servicing Agreement. No other party to the Pooling and Servicing Agreement, and no Subordinate Class Representative, will have any duty to monitor or supervise the performance by the Trust Advisor of its duties under the Pooling and Servicing Agreement. The Trust Advisor is not an “advisor” for any purpose other than as specifically set forth in the Pooling and Servicing Agreement and is not an advisor to any person, including, without limitation, any Certificateholder. See “Risk Factors—Risks Related to the Offered Certificates—You Will Have Limited Ability To Control the Servicing of the Mortgage Loans and the Parties with Control Over the Servicing of the Mortgage Loans May Have Interests that Conflict with Your Interests” in this free writing prospectus and “—Certain Matters Regarding the Master Servicers, the Special Servicers, the Trust Advisor and the Depositor” in this free writing prospectus below. For the avoidance of doubt, the Trust Advisor is not an “investment adviser” within the meaning of the Investment Company Act, and will not owe any fiduciary duty to any person in connection with the Pooling and Servicing Agreement.
The ability to perform the duties of the Trust Advisor and the quality and the depth of any annual report will be dependent upon the timely receipt of information required to be delivered to the Trust Advisor and the accuracy and the completeness of such information. In addition, it is possible that the lack of access to Privileged Information or a Special Servicer’s failure to schedule or attend an annual meeting or to provide appropriate staff at such meeting may limit or prohibit the Trust Advisor from performing its annual reporting
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duties under the Pooling and Servicing Agreement in which case any annual report will describe any resulting limitations or prohibitions.
With respect to any Non-Serviced Pari Passu Mortgage Loan, the Other Trust Advisor under the related other securitization will act as trust advisor with respect to the related Pari Passu Companion Loan pursuant to the pooling and servicing agreement related to the securitization of the Non-Serviced Pari Passu Companion Loans, and will have obligations that are substantially similar in all material respects, but not necessarily identical, to those of the Trust Advisor described in this section.
The Trust Advisor will have no rights or duties with respect to the Non-Serviced Pari Passu Mortgage Loans (which include the Brickyard Square Mortgage Loan and the Bella Luna / San Lucas Mortgage Loan), the Non-Serviced Pari Passu Companion Loans, or the assessment of the actions of any special servicer in this securitization or any other securitization taken with respect to any such mortgage loans.
Annual Reports and Meeting
Based on (a) the Trust Advisor’s review of (i) during any Subordinate Control Period, any previously identified Final Asset Status Reports delivered to the Trust Advisor by the applicable Special Servicer, (ii) during any Collective Consultation Period or Senior Consultation Period, any asset status reports and other information delivered to the Trust Advisor by the applicable Special Servicer and (iii) during any control or consultation period (as set forth in clauses (i) and (ii) above), such other additional limited non-privileged information and documentation provided by the applicable Special Servicer to the Trust Advisor that is required or permitted to be delivered to the Trust Advisor under the Pooling and Servicing Agreement, and (b) during a Senior Consultation Period, in addition to the foregoing review, the Trust Advisor’s meeting with the applicable Special Servicer as described below, the Trust Advisor will prepare an annual report to be delivered to the Certificate Administrator (and made available through the Certificate Administrator’s Website) setting forth its assessment of such Special Servicer’s overall performance of its duties under the Pooling and Servicing Agreement during the prior calendar year on a platform-level basis with respect to the workout, restructuring, resolution, sale and liquidation of Specially Serviced Mortgage Loans (or, during any Subordinate Control Period, with respect to the workout, restructuring, resolution, sale and liquidation of Specially Serviced Mortgage Loans with respect to which a Final Asset Status Report has been issued) and with respect to each Final Asset Status Report prepared during the prior calendar year. Solely as used in connection with the Trust Advisor’s annual report, the term “platform-level basis” refers to a Special Servicer’s performance of its duties as they relate to the workout, restructuring, resolution, sale and liquidation of Specially Serviced Mortgage Loans, taking into account such Special Servicer’s specific duties under the Pooling and Servicing Agreement as well as the extent to which those duties were performed in accordance with the Servicing Standard, with reasonable consideration by the Trust Advisor of the items required to be reviewed pursuant to the Pooling and Servicing Agreement. No annual report will be required from the Trust Advisor with respect to a Special Servicer if during the prior calendar year no asset status report was prepared by such Special Servicer (or, during a Subordinate Control Period, finalized by such Special Servicer) in connection with any Specially Serviced Mortgage Loan or REO Property that such Special Servicer was obligated to service. In addition, in the event a Special Servicer is replaced during the prior calendar year, the Trust Advisor’s annual report will only relate to the entity that was acting as such Special Servicer as of December 31 in the prior calendar year and is continuing in such capacity through the date of such annual report. The Trust Advisor will provide the applicable Special Servicer and the Subordinate Class Representative (during any Subordinate Control Period or Collective Consultation Period) with a copy of such annual
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report. The applicable Special Servicer and the Subordinate Class Representative must be given an opportunity to review any annual report required to be delivered to it by the Trust Advisor at least 10 days prior to the delivery thereof to the Certificate Administrator. In the event that the Trust Advisor has provided for review to the applicable Special Servicer a Trust Advisor annual report containing an assessment of the performance of the applicable Special Servicer that in the reasonable view of such Special Servicer presents a negative assessment of such Special Servicer’s performance, that Special Servicer will be permitted to provide to the Trust Advisor reasonably limited non-privileged information and documentation, in each case that is reasonably relevant to the facts upon which the Trust Advisor has based such assessment, and the Trust Advisor will undertake a reasonable review of such additional limited non-privileged information and documentation prior to finalizing its annual assessment. Notwithstanding the foregoing, the content of the Trust Advisor’s annual report will be determined solely by the Trust Advisor.
Forms of annual report are attached to this free writing prospectus as Annexes E-1 and E-2. In each annual report, the Trust Advisor will identify any material deviations of which it has actual knowledge by the applicable Special Servicer (i) from such Special Servicer’s obligation to comply with the Servicing Standard and (ii) from such Special Servicer’s obligations under the Pooling and Servicing Agreement with respect to the workout, restructuring, resolution, sale or liquidation of Specially Serviced Mortgage Loans. Each annual report will be required to comply with the confidentiality requirements described in this free writing prospectus regarding Privileged Information and set forth in the Pooling and Servicing Agreement.
As used in this free writing prospectus, “Privileged Information” means (i) any correspondence between the Subordinate Class Representative and the applicable Special Servicer related to any Specially Serviced Mortgage Loan or the exercise of the Subordinate Class Representative’s consent or consultation rights under the Pooling and Servicing Agreement, and (ii) any information that a Special Servicer has reasonably determined could compromise the Trust Fund’s position in any ongoing or future negotiations with a related borrower under a Specially Serviced Mortgage Loan or any other interested party or in litigation or in potential proceedings.
Within 60 days following the end of each calendar year during a Senior Consultation Period, the Trust Advisor will be required to meet with representatives of each Special Servicer that prepared (and delivered to the Trust Advisor) an asset status report with respect to a Specially Serviced Mortgage Loan or REO Property during such calendar year and, subject to the limitations described in this free writing prospectus or as otherwise set forth in the Pooling and Servicing Agreement, review certain operational activities related to Specially Serviced Mortgage Loans in the manner required under the Pooling and Servicing Agreement. During such annual meeting, the Trust Advisor will be required to discuss the Special Servicer’s operational practices on a platform-level basis in light of the Servicing Standard and such Special Servicer’s obligations under the Pooling and Servicing Agreement and will discuss such Special Servicer’s stated policies and procedures, operational controls and protocols, risk management systems, technological infrastructure (systems), intellectual resources, such Special Servicer’s reasoning for believing it is in compliance with the Pooling and Servicing Agreement and other pertinent information the Trust Advisor may consider relevant, in each case, insofar as such information relates to the workout, restructuring, resolution, sale or liquidation of Specially Serviced Mortgage Loans. The Trust Advisor will be required to provide such Special Servicer with at least 30 days prior written notice of the date proposed for an annual meeting. The Trust Advisor and the applicable Special Servicer will determine a mutually acceptable date for the annual meeting and the Trust Advisor will be required to deliver, at least 14 days prior to such annual meeting, a proposed written
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agenda to such Special Servicer, including the identity of the Final Asset Status Report(s), if any, that will be discussed during the annual meeting.
In connection with the annual meeting described in the preceding paragraph, the Trust Advisor and the applicable Special Servicer may discuss any of the asset status reports produced by such Special Servicer with respect to any Specially Serviced Mortgage Loan as part of the Trust Advisor’s annual assessment of such Special Servicer. The applicable Special Servicer will be required to make available servicing officers with relevant knowledge regarding the applicable Specially Serviced Mortgage Loans and the related platform level information for each annual meeting.
Subordinate Control Period. With respect to all Mortgage Loans (other than a Non-Serviced Pari Passu Mortgage Loan), during a Subordinate Control Period, the Trust Advisor’s obligations will be limited to the general reviews described in this free writing prospectus and as set forth in the Pooling and Servicing Agreement and generally will not involve an assessment of specific actions of either Special Servicer and, in any event, will be subject to limitations described in this free writing prospectus and as set forth in the Pooling and Servicing Agreement.
The Trust Advisor will not be required, in connection with its preparation of any annual report during a Subordinate Control Period, to consider any Specially Serviced Mortgage Loan or REO Property with respect to which a Final Asset Status Report was not issued during the most recently ended calendar year.
During any Subordinate Control Period, the applicable Special Servicer will deliver to the Trust Advisor each Final Asset Status Report. The Trust Advisor will be obligated to keep confidential, subject to the exceptions described in the following paragraph, any Privileged Information received from a Special Servicer or Subordinate Class Representative in connection with the Subordinate Class Representative’s exercise of any rights under the Pooling and Servicing Agreement (including, without limitation, in connection with any asset status report) or otherwise in connection with the Certificates.
The Trust Advisor, the Trust Advisor’s subcontractors and the Trust Advisor’s affiliates will not disclose such Privileged Information so received from a Special Servicer or Subordinate Class Representative to any other person (including any Certificateholders which are not then holders of the Control-Eligible Certificates), other than (A) to the other parties to the Pooling and Servicing Agreement, to the extent expressly required by the Pooling and Servicing Agreement and (B) under the circumstances described in the following sentence. If the Trust Advisor, its subcontractors or its affiliates, or any other party to the Pooling and Servicing Agreement (other than the Special Servicers), receives Privileged Information and has been advised that such information is Privileged Information, then such person will be prohibited from disclosing such information received by it to any other person (including in connection with preparing any responses to any investor-submitted inquiries posed on the Investor Q&A Forum), except to the extent that (a) the applicable Special Servicer and (unless such Privileged Information relates to an Excluded Loan) the Subordinate Class Representative have consented in writing to its disclosure, (b) such Privileged Information becomes generally available and known to the public, other than as a result of a disclosure directly or indirectly by such person, (c) it is reasonable and necessary for such person to do so in working with legal counsel, auditors, taxing authorities or other governmental agencies, (d) such Privileged Information was already known to such person and not otherwise subject to a confidentiality obligation, (e) such disclosure is expressly authorized or required under another provision of the Pooling and Servicing Agreement and/or (f) such disclosure is required by applicable law, rule, regulation, order, judgment or decree. Notwithstanding the foregoing, the Trust Advisor will be permitted to share
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Privileged Information with its affiliates and any subcontractors of the Trust Advisor to the extent necessary and for the sole purpose of permitting the Trust Advisor to perform its duties under the Pooling and Servicing Agreement, to the extent such parties agree in writing to be bound by the same confidentiality provisions applicable to the Trust Advisor.
In addition, during any Subordinate Control Period, the applicable Special Servicer will forward any Appraisal Reduction Amount calculations and net present value calculations used in such Special Servicer’s determination of what course of action to take in connection with the workout or liquidation of a Specially Serviced Mortgage Loan to the Trust Advisor after they have been finalized, and the Trust Advisor may review such calculations in support of its annual report on such Special Servicer’s activities but will not opine on, or otherwise call into question (whether in the annual report or otherwise), such Appraisal Reduction Amount calculations and/or net present value calculations.
Consultation Rights of the Trust Advisor During a Collective Consultation Period or Senior Consultation Period. During any Collective Consultation Period or Senior Consultation Period, the applicable Special Servicer will promptly deliver each asset status report prepared in connection with the workout, restructuring, resolution, sale or liquidation of a Specially Serviced Mortgage Loan to (i) the Trust Advisor and (ii) during a Collective Consultation Period (other than with respect to any Excluded Loan), the Subordinate Class Representative. The Trust Advisor will be required to provide any comments it may have to the applicable Special Servicer in respect of the asset status reports within 10 business days of receipt of the asset status report and any additional information reasonably requested by the Trust Advisor, and propose possible alternative courses of action to the extent it determines such alternatives may be in the best interest of the Certificateholders (including any holders of Control-Eligible Certificates) as a collective whole. In addition, during any Collective Consultation Period or Senior Consultation Period, the Trust Advisor will be required to consult on a non-binding basis with the applicable Special Servicer with respect to, and prior to, Material Actions (regardless of whether such Material Actions are covered by an asset status report) and will be required to provide any comments it may have within 10 business days of receipt of the request for consultation and any additional information reasonably requested by the Trust Advisor. Any such consultation during a Collective Consultation Period will be in addition to any consultation between the Subordinate Class Representative and the applicable Special Servicer. Notwithstanding the undertakings described in this paragraph or any other provision of the Pooling and Servicing Agreement to the contrary, the Trust Advisor will have no obligation to consult with respect to collateral substitutions, assignments, insurance policies, borrower substitutions, lease modifications and amendments and other similar actions that either Special Servicer may perform under the Pooling and Servicing Agreement to the extent such actions do not relate to the workout, restructuring, resolution, sale or liquidation of a Specially Serviced Mortgage Loan or REO Property.
Each Special Servicer will be obligated to consider such written alternative courses of action and any other feedback provided by the Trust Advisor and, during any Collective Consultation Period (other than with respect to any Excluded Loan), the Subordinate Class Representative. The applicable Special Servicer will revise the asset status reports as it deems necessary to take into account such input and/or comments, to the extent such Special Servicer determines that the Trust Advisor’s and/or (other than with respect to any Excluded Loan) Subordinate Class Representative’s input and/or recommendations are consistent with the Servicing Standard and in the best interest of the Certificateholders, taking into account the interests of all of the Certificateholders as a collective whole.
The applicable Special Servicer will not be required to take or to refrain from taking any action because of an objection or comment by the Trust Advisor or a recommendation of the
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Trust Advisor that would require or cause such Special Servicer to violate applicable law, the terms of any Mortgage Loan or any other provision of the Pooling and Servicing Agreement, including such Special Servicer’s obligation to act in accordance with the Servicing Standard and the REMIC provisions of the Code or result in an adverse tax consequence for the Trust Fund. For the avoidance of doubt, the applicable Special Servicer will not be required to take or to refrain from taking any action because of an objection or comment by the Trust Advisor or a recommendation of the Trust Advisor in any event.
Trust Advisor Ongoing Fees. The ongoing fee of the Trust Advisor will be payable monthly from amounts received in respect of each Mortgage Loan (other than a Non-Serviced Pari Passu Mortgage Loan) as described above under “—Servicing and Other Compensation and Payment of Expenses—Compensation of the Trust Advisor”. The trust advisor consulting fee will be payable in connection with Material Actions on which the Trust Advisor has consultation rights, subject to the limitations described under “—Servicing and Other Compensation and Payment of Expenses—Compensation of the Trust Advisor”.
Trust Advisor Indemnity. The Trust Advisor, its affiliates and any of its managers, members, directors, officers, employees or agents will be entitled to indemnification by the Trust Fund against any loss, liability or expense incurred in connection with any actual or threatened legal action or claim that relates to the Pooling and Servicing Agreement or the Certificates;provided that such indemnification will be subject to the limitations described under “Description of the Offered Certificates” in this free writing prospectus;provided,further, that such indemnification will not extend to any loss, liability or expense incurred by reason of the Trust Advisor’s willful misfeasance, bad faith or negligence in the performance of obligations or duties under the Pooling and Servicing Agreement or by reason of the Trust Advisor’s negligent disregard of such obligations or duties. See “—Certain Matters Regarding the Master Servicers, the Special Servicers, the Trust Advisor and the Depositor” below.
Net Present Value Calculations
The Pooling and Servicing Agreement will require that all net present value calculations and determinations with respect to any Mortgage Loan (other than a Non-Serviced Pari Passu Mortgage Loan) or any Mortgaged Property or any REO Property (other than any Mortgaged Property or REO Property relating to any Non-Serviced Loan Combination) (including for purposes of the definition of Servicing Standard) be made using a Discount Rate (a) for principal and interest payments on a Mortgage Loan (or Loan Combination, as applicable), or the sale of a Mortgage Loan (or Loan Combination, as applicable), equal to the higher of (x) the rate determined by the applicable Master Servicer or the applicable Special Servicer, as applicable, that approximates the market rate that would be obtainable by the borrower on similar non-defaulted debt of such borrower as of such date of determination and (y) the mortgage interest rate on the applicable Mortgage Loan based on its outstanding principal balance, and (b) for all other cash flows, including property cash flow, identical to the “discount rate” set forth in the most recent appraisal or appraisal update of the related Mortgaged Property or REO Property obtained under the Pooling and Servicing Agreement.
Review and Consultation With Respect to Calculations of Net Present Value and Appraisal Reduction Amounts
During any Collective Consultation Period or Senior Consultation Period, the applicable Special Servicer will forward any calculations of Appraisal Reduction Amount or net present value to the Trust Advisor and, during any Collective Consultation Period (other than with respect to any Excluded Loan), the Subordinate Class Representative, and (a) the Trust
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Advisor will be required (upon receipt of all information and supporting materials reasonably required to be provided to the Trust Advisor as described in the following sentence) to promptly recalculate and verify the accuracy of the mathematical calculations and the corresponding application of the applicable formulas required to be utilized in connection with any Appraisal Reduction Amount or net present value calculations used in the applicable Special Servicer’s determination of what course of action to take in connection with the workout or liquidation of a Specially Serviced Mortgage Loan prior to the utilization by such Special Servicer, and (b) insofar as the calculation and/or application by such Special Servicer under review as contemplated by clause (a) requires or depends upon the exercise of discretion by such Special Servicer, the Trust Advisor will be required to assess the reasonableness of the determination made by such Special Servicer in the exercise of such discretion. The applicable Special Servicer will be required to deliver the foregoing calculations, together with information and supporting materials (with respect to any Appraisal Reduction Amount calculations, once such information is received from the applicable Master Servicer) (including such additional information reasonably requested by the Trust Advisor to confirm the mathematical accuracy of such calculations, but not including any Privileged Information) to the Trust Advisor and, during any Collective Consultation Period (other than with respect to any Excluded Loan), the Subordinate Class Representative. If the Trust Advisor does not agree with (i) the mathematical calculations, (ii) the application of the applicable non-discretionary portions of the formula required to be utilized for such calculation or (iii) the reasonableness of any determination made by the applicable Special Servicer in the exercise of its discretion, the Trust Advisor and the applicable Special Servicer will consult in good faith with each other in order to resolve (x) any inaccuracy in the mathematical calculations or the application of the non-discretionary portions of the related formula in arriving at those mathematical calculations or (y) any disagreement over the reasonableness of a determination made by the applicable Special Servicer in the exercise of its discretion. During any Collective Consultation Period (other than with respect to any Excluded Loan), the applicable Special Servicer will also be required to send to the Subordinate Class Representative copies of the applicable Special Servicer’s calculations and the related information and supporting materials and to engage in consultation with the Subordinate Class Representative in connection with its calculations and determinations. During any Collective Consultation Period (other than with respect to any Excluded Loan), if the Trust Advisor and the Subordinate Class Representative agree on such matters and provide written notice of such agreement to the applicable Special Servicer, the applicable Special Servicer will be required to perform its calculations in accordance with such agreement. Otherwise, if the Trust Advisor and the Subordinate Class Representative do not reach agreement on such matters following the Trust Advisor’s calculation and verification procedures or, in the case of any Excluded Loan, the related Special Servicer will be required to proceed according to its determination, and the Trust Advisor will be required to promptly prepare a report on the matter, which report will set forth its and the applicable Special Servicer’s calculations (including material differences in assumptions used therein), and deliver such report to the Certificate Administrator, who will be required to post the report to the Certificate Administrator’s Website. No other action will be required in connection with such circumstances.
Replacement of the Special Servicers
During any Subordinate Control Period, the Majority Subordinate Certificateholder will have the right to terminate a Special Servicer (other than with respect to any Excluded Loan), with or without cause, and appoint itself or an affiliate or another person as the successor special servicer with respect to the applicable Mortgage Loans. It will be a condition to such appointment that (i) the Rating Agencies confirm that the appointment
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would not result in a qualification, downgrade or withdrawal of any of their then-current ratings of the Certificates, (ii) the successor special servicer is a Qualified Replacement Special Servicer and (iii) the successor special servicer delivers to the Depositor the information required pursuant to Item 6.02 of the Form 8-K Current Report regarding itself in its role as successor special servicer. Notwithstanding anything to the contrary, if the Depositor fails to file any required Form 8-K Current Report in connection with such appointment in a timely manner, such appointment will be voidab initio.
During any Collective Consultation Period or Senior Consultation Period, upon (i) the written direction of holders of Principal Balance Certificates evidencing notless than 25% of the aggregate voting rights (taking into account the allocation of Appraisal Reduction Amounts in respect of the Mortgage Loans to notionally reduce the principal balances of the Principal Balance Certificates) of all Certificates on an aggregate basis, requesting a vote to terminate a Special Servicer and appoint a successor special servicer, (ii) payment by such holders to the Certificate Administrator of the reasonable fees and expenses (including any fees and expenses of counsel or any Rating Agency) to be incurred by the Certificate Administrator in connection with administering such vote (which fees and expenses will not be paid from the Trust Fund) and (iii) delivery by such holders to the Certificate Administrator and the Trustee of a Rating Agency Confirmation from each of the Rating Agencies (to be obtained at the expenses solely of such Certificateholders), the Certificate Administrator will be required to post such request on the Certificate Administrator’s Website and conduct the solicitation of votes of all Certificates in such regard. Upon the written direction of holders of Principal Balance Certificates evidencing at least 75% of the aggregate voting rights (taking into account the allocation of Appraisal Reduction Amounts in respect of the Mortgage Loans to notionally reduce the principal balances of the Principal Balance Certificates) of all Principal Balance Certificates on an aggregate basis, the Trustee will be required to terminate all of the rights and obligations of a Special Servicer under the Pooling and Servicing Agreement and appoint the successor special servicer that was proposed by the Certificateholders requesting the vote. Such termination and replacement will be further conditioned, however, on such successor special servicer being a Qualified Replacement Special Servicer. Any such termination will also be subject to the terminated a Special Servicer’s rights to indemnification, payment of outstanding fees, reimbursement of advances, and other rights set forth in the Pooling and Servicing Agreement which survive termination. If a proposed termination and replacement of a Special Servicer by Certificateholders as described above is not consummated within 180 days following the initial request of the Certificateholders who requested a vote, then the proposed termination and replacement will have no further force or effect (except that the Certificate Administrator will be entitled to apply any amounts prepaid by such Certificateholders for expenses to pay any expenses incurred by the Certificate Administrator).
In addition, with respect to any Mortgage Loans (other than any Non-Serviced Pari Passu Mortgage Loan) during any Senior Consultation Period, if the Trust Advisor determines, in its sole discretion exercised in good faith, that a Special Servicer is not performing its duties under the Pooling and Servicing Agreement in accordance with the Servicing Standard, the Trust Advisor will have the right to recommend the replacement of such Special Servicer. In such event, the Trust Advisor will be required to deliver to the Trustee and the Certificate Administrator, with a copy to the applicable Special Servicer, a written recommendation (in electronic format) detailing the reasons supporting its position and recommending a suggested replacement special servicer. The Certificate Administrator will be required to post such recommendation on the Certificate Administrator’s Website and mail such recommendation to the registered Certificateholders. The Trust Advisor’s recommendation to replace a Special Servicer must be confirmed by an affirmative vote of Certificateholders having at least a majority of the aggregate voting rights (taking into
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account the allocation of any Appraisal Reduction Amounts in respect of the Mortgage Loans to notionally reduce the aggregate principal balances of the Certificates) of all Principal Balance Certificates on an aggregate basis. In the event the holders of such Principal Balance Certificates elect to remove and replace a Special Servicer, the Certificate Administrator will be required to request a Rating Agency Confirmation from each of the Rating Agencies at that time, unless such Certificateholders themselves deliver such Rating Agency Confirmation. In the event the Trustee and the Certificate Administrator receive a Rating Agency Confirmation from each of the Rating Agencies (and the successor special servicer agrees to be bound by the terms of the Pooling and Servicing Agreement), the Trustee will then be required to terminate all of the rights and obligations of the applicable Special Servicer under the Pooling and Servicing Agreement and to appoint the successor special servicer that has been approved by the Certificateholders and constitutes a Qualified Replacement Special Servicer. Any such termination will be subject to the terminated Special Servicer’s rights to indemnification, payment of outstanding fees, reimbursement of advances and other rights set forth in the Pooling and Servicing Agreement which survive termination. The reasonable costs and expenses associated with the Trust Advisor’s identification of a Qualified Replacement Special Servicer, and the Certificate Administrator’s obtaining such Rating Agency Confirmations and administering the vote of the Certificateholders will be an Additional Trust Fund Expense. If a proposed termination and replacement of a Special Servicer recommended by the Trust Advisor as described above is not consummated within 180 days following the initial recommendation of the Trust Advisor, then (i) the proposed termination and replacement will have no further force or effect, (ii) the Certificate Administrator will post such notice to the Certificate Administrator’s Website in accordance with the Pooling and Servicing Agreement and (iii) the Certificate Administrator will notify the Trustee and the then-current applicable Special Servicer. The costs and expenses of administering the notices, solicitation of votes and otherwise incurred by the Certificate Administrator, the Trustee or the Trust Advisor in connection with the proposed removal and replacement (including the costs and expenses associated with obtaining Rating Agency Confirmations and the applicable opinion of counsel) will constitute expenses of the Trust Fund to be paid by withdrawal from the Distribution Account. None of the Special Servicers, any Certificateholder or any other person will have any cause of action against the Trust Advisor or any other person based upon or arising from the Trust Advisor’s recommendation for replacement of, or determination not to recommend the replacement of, either such Special Servicer, or the result of the vote of the Certificateholders.
A “Qualified Replacement Special Servicer” is a person as to which all of the following conditions are satisfied at the relevant date of determination: (i)(a) all the representations and warranties of a Special Servicer set forth in the Pooling and Servicing Agreement are true and accurate as applied to such person (other than any change in the entity type or state or jurisdiction of formation), (b) no event or circumstances constitutes or would constitute, but for notice or the passage of time, a Servicer Termination Event with respect to such person, (c) such person is not the Trust Advisor or an affiliate of the Trust Advisor, and there exists no agreement as a result of which, whether or not subject to any condition or contingency, such person would become an affiliate of the Trust Advisor or merge or be consolidated with or into the Trust Advisor (regardless of the identity of the surviving person) or succeed to any portion of the business of the Trust Advisor that includes the Trust Advisor’s rights or duties under the Pooling and Servicing Agreement, (d) neither such person nor any affiliate thereof is obligated, whether by agreement or otherwise, and whether or not subject to any condition or contingency, to pay any fee to, or otherwise compensate or grant monetary or other consideration to, the Trust Advisor or any affiliate thereof pursuant to the Pooling and Servicing Agreement (1) in connection with the special servicing obligations that such person would assume under the Pooling and Servicing
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Agreement or the performance thereof or (2) in connection with the appointment of such person as, or any recommendation by the Trust Advisor for such person to become, the successor special servicer, (e) such person is not entitled to receive any compensation from the Trust Advisor in connection with its activities under the Pooling and Servicing Agreement and (f) such person is not entitled to receive from the Trust Advisor or any affiliate thereof any fee in connection with the appointment of such person as successor special servicer, unless, in the case of each of the foregoing clauses (a) through (f), the appointment of such person as successor special servicer has been expressly approved by 100% of the Certificateholders; and (ii) such person is not a prohibited party and has not been terminated in the capacity of Master Servicer or Special Servicer under the Pooling and Servicing Agreement in whole or in part as a result of an event described in clause (viii) of the definition of “Servicer Termination Event” that appears in “—Servicer Termination Events” below in this free writing prospectus, unless the appointment of such person as successor special servicer has been expressly approved by the Depositor acting in its reasonable discretion.
With respect to any Non-Serviced Pari Passu Mortgage Loan (unless with respect to the Brickyard Square Mortgage Loan, such Mortgage Loan is an “excluded loan” under the related Other Pooling and Servicing Agreement), during any “subordinate control period”, under the related Other Pooling and Servicing Agreement), the majority subordinate certificateholder under the related Other Pooling and Servicing Agreement, or the subordinate class representative under such agreement on its behalf, will have the right to terminate the related Other Special Servicer, with or without cause, and appoint itself or an affiliate or another person as the successor to such Other Special Servicer.
In addition, with respect to any Non-Serviced Pari Passu Mortgage Loan, during any “collective consultation period” or “senior consultation period” under the related Other Pooling and Servicing Agreement, at the written direction of holders of principal balance certificates under such agreement evidencing a certain percentage of the voting rights of such certificates, a vote to terminate the related Other Special Servicer may be requested, and a successor special servicer may be appointed, pursuant to terms expected to be substantially similar in all material respects, but not necessarily identical, to those in the Pooling and Servicing Agreement.
Maintenance of Insurance
In the case of each Mortgage Loan (including any Specially Serviced Mortgage Loan but excluding any Non-Serviced Pari Passu Mortgage Loan), the applicable Master Servicer will be required to use reasonable efforts consistent with the Servicing Standard to cause the related borrower to maintain (including identifying the extent to which a borrower is maintaining insurance coverage and, if the borrower does not so maintain, the applicable Master Servicer will be required, subject to certain limitations set forth in the Pooling and Servicing Agreement, to itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property:
· | a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is generally at least equal to the lesser of the full replacement cost of improvements securing the Mortgage Loan or the outstanding principal balance of the Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause; and |
· | all other insurance coverage as is required, or (subject to the Servicing Standard) that the holder of the Mortgage Loan is entitled to reasonably require, under the related Mortgage Loan documents. |
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Notwithstanding the foregoing, however:
· | a Master Servicer will not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless that insurance policy was in effect at the time of the origination of the related Mortgage Loan pursuant to the related Mortgage Loan documents and is available at commercially reasonable rates and the Trustee has an insurable interest; and |
· | a Master Servicer will not be required to cause the borrower to maintain, or itself obtain, insurance coverage that such Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located. |
Notwithstanding the provisions described in the prior bullet, if the borrower fails to maintain with respect to the related mortgaged real property specific insurance coverage (i) with respect to a casualty insurance policy providing “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) with respect to damages or casualties caused by terrorist or similar acts, a Master Servicer must cause the borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the applicable Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period (other than with respect to any Excluded Loan)) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period (other than with respect to any Excluded Loan)) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related mortgaged real property and located in or around the region in which such related mortgaged real property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or clause (b), an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than 30 days to respond to a Special Servicer’s request for such consent or consultation;provided that upon such Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow such Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, such Special Servicer will not be required to do so.
Each of the Master Servicers (at its own expense) and the Special Servicers (at the expense of the Trust Fund) will be entitled to rely on insurance consultants in making the insurance-related determinations described above.
With respect to each REO Property (other than any interest in REO Property acquired with respect to any Non-Serviced Loan Combination), the related Special Servicer will generally be required to use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount notless than $1 million per occurrence and (c) to the extent
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consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least 12 months (or at least 18 months in the case of any REO Property whose related REO Mortgage Loan had an initial principal balance greater than $35,000,000), in each case, if so required pursuant to the related Mortgage Loan documents.
Notwithstanding the foregoing, however:
· | a Special Servicer will not be required in any event to maintain or obtain the insurance coverage otherwise described above unless the Trustee has an insurable interest; and |
· | a Special Servicer will not be required to maintain or obtain the insurance coverage otherwise described above to the extent that the coverage is not available at commercially reasonable rates or that requiring or maintaining such insurance coverage would not be consistent with the Servicing Standard. |
If (1) either Master Servicer or either Special Servicer obtains and maintains, or causes to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans (other than any Non-Serviced Pari Passu Mortgage Loan) or REO Properties (other than any interest in REO Property acquired with respect to any Non-Serviced Loan Combination), as applicable, as to which it is the Master Servicer or the Special Servicer, as the case may be, then, to the extent such policy (a) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (b) provides protection equivalent to the individual policies otherwise required, or (2) such Master Servicer or such Special Servicer, as applicable, has long-term unsecured debt obligations or deposit accounts that are rated not lower than “A-“ by Fitch (or, if not rated by Fitch, an equivalent rating by (A) at least two NRSROs (which may include KBRA and/or Moody’s) or (B) one NRSRO (which may include KBRA and/or Moody’s) and A.M. Best Company), “A3” by Moody’s (or, if not rated by Moody’s, at least “A-“ by S&P (or, if not rated by S&P, an equivalent rating by (A) at least two NRSROs (which may include KBRA and/or Fitch) or (B) one NRSRO (which may include KBRA and/or Fitch) and A.M. Best Company)) and an equivalent rating by KBRA (if then rated by KBRA) or has received a Rating Agency Confirmation from each Rating Agency with respect to which such rating is not satisfied, and such Master Servicer or such Special Servicer, as applicable, self-insures for its obligation to maintain the individual policies otherwise required, then such Master Servicer or such Special Servicer, as the case may be, will conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the applicable Master Servicer or Special Servicer, as the case may be, whichever maintains such policy, must if there has not been maintained on any Mortgaged Property or REO Property thereunder a hazard insurance policy complying with the requirements described above, and there will have been one or more losses that would have been covered by such an individual policy, promptly deposit into the applicable Collection Account maintained by the related Master Servicer from its own funds, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). With respect to any Non-Serviced Pari Passu Mortgage Loan, the related Other Master Servicer or the related Other Special Servicer, as applicable, will service such Non-Serviced Pari Passu Mortgage Loan and any related REO property on terms that are substantially similar in all material respects, but not necessarily identical, to those
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described above. See “Description of the Mortgage Pool—Loan Combinations” in this free writing prospectus.
Subject to the foregoing discussion, see also “Description of Pooling and Servicing Agreements—Hazard Insurance Policies” in the accompanying prospectus.
“Qualified Insurer” means, with respect to any insurance policy, an insurance company or security or bonding company qualified to write the related insurance policy in the relevant jurisdiction.
“Required Claims-Paying Ratings”: With respect to (i) any insurance carrier providing coverage for a Mortgaged Property related to any Mortgage Loan, a claims-paying ability rating of at least “A-” by Fitch (or, if not rated by Fitch, an equivalent rating by (A) at least two NRSROs (which may include KBRA and/or Moody’s) or (B) one NRSRO (which may include KBRA and/or Moody’s) and A.M. Best Company), “A3” by Moody’s (or, if not rated by Moody’s, at least “A-“ by S&P (or, if not rated by S&P, an equivalent rating by (A) at least two NRSROs (which may include KBRA and/or Fitch) or (B) one NRSRO (which may include KBRA and/or Fitch) and A.M. Best Company)) and an equivalent rating by KBRA (if then rated by KBRA), and (ii) fidelity bond coverage or errors and omissions insurance, an insurance carrier with a claims-paying ability rating at least equal to any one of the following: (a) “A-” by S&P, (b) “A3” by Moody’s, (c) “A-” by Fitch or (d) “A:X” by A.M. Best Company;provided,however, that (A) an insurance carrier will be deemed to have the applicable claims-paying ability ratings set forth above if the obligations of such insurance carrier under the related insurance policy are guaranteed or backed in writing by an entity that has long-term unsecured debt obligations that are rated not lower than the ratings set forth above or claims-paying ability ratings that are not lower than the ratings set forth above; and (B) an insurance carrier will be deemed to have the applicable claims-paying ability ratings set forth above in this clause (ii) if a Rating Agency Confirmation is obtained from the Rating Agency whose rating requirement has not been satisfied.
Enforcement of Due-on-Sale and Due-on-Encumbrance Provisions
In connection with each Mortgage Loan (other than any Non-Serviced Pari Passu Mortgage Loan), the applicable Master Servicer (with respect to any such Mortgage Loan that is not a Specially Serviced Mortgage Loan) or the applicable Special Servicer (with respect to any such Mortgage Loan that is a Specially Serviced Mortgage Loan), will be required to determine whether to waive any violation of a due-on-sale or due-on-encumbrance provision or to approve any borrower request for consent to an assignment and assumption of the Mortgage Loan or a further encumbrance of the related Mortgaged Property. However, subject to the related Mortgage Loan documents, if the subject Mortgage Loan (either alone or, if applicable, with other related Mortgage Loans) exceeds specified size thresholds (either actual or relative) or fails to satisfy other applicable conditions imposed by the Rating Agencies, then neither the applicable Master Servicer nor the applicable Special Servicer may enter into such a waiver or approval, unless it has received Rating Agency Confirmation from any or all Rating Agencies, as applicable. Furthermore, except in limited circumstances, the applicable Master Servicer may not enter into such a waiver or approval without the consent of the applicable Special Servicer, and such Special Servicer will not be permitted to grant that consent or to itself enter into such a waiver or approval unless such Special Servicer has complied with any applicable provisions of the Pooling and Servicing Agreement described above under “—The Majority Subordinate Certificateholder and the Subordinate Class Representative—Rights and Powers of Subordinate Class Representative” and “—The Trust Advisor”. Notwithstanding the foregoing, with respect to the Mortgage Loans secured by residential cooperative properties, the related Master Servicer will be permitted to waive the enforcement of
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“due-on-encumbrance” clauses to permit subordinate debt secured by the related Mortgaged Property without the consent of the applicable Special Servicer or any other person, but subject to the satisfaction of various conditions set forth in the related Pooling and Servicing Agreement. See “Description of the Mortgage Pool—Subordinate and/or Other Financing” and “—Additional Debt Financing For Mortgage Loans Secured by Residential Cooperatives” above.
Transfers of Interests in Borrowers
The applicable Master Servicer will generally have the right to consent, without the approval of the applicable Special Servicer, to any transfers of an interest in a borrower under a Mortgage Loan (other than a Non-Serviced Pari Passu Mortgage Loan) that is not a Specially Serviced Mortgage Loan, to the extent the transfer is allowed under the terms of the related Mortgage Loan documents (without the exercise of any lender approval or discretion other than confirming the satisfaction of other specified conditions that do not include any other lender approval or discretion and does not involve incurring new mezzanine indebtedness), including any consent to transfer to any subsidiary or affiliate of a borrower or to a person acquiring less than a majority interest in the borrower. However, subject to the terms of the related Mortgage Loan documents and applicable law, if—
· | the subject Mortgage Loan (alone or together with all other Mortgage Loans that have the same or a known affiliated borrower) is one of the ten largest Mortgage Loans in the Trust Fund (according to Stated Principal Balance), has a Cut-off Date Principal Balance in excess of $20,000,000 or has a Stated Principal Balance at the time of such proposed transfer that is equal to or greater than 5% of the then-aggregate mortgage pool balance; and |
· | the transfer is of an interest in the borrower of greater than 49% or otherwise would result in a change in control of the borrower, |
then the applicable Master Servicer may not consent to the transfer unless it has received written confirmation from each of the Rating Agencies that this action would not result in the qualification, downgrade or withdrawal of any of the ratings then assigned by that Rating Agency to the Certificates. The Mortgage Loans secured by residential cooperative properties do not restrict the transfer or pledge of interests in the related cooperative borrower in connection with the transfer or financing of cooperative apartment units.
Modifications, Waivers, Amendments and Consents
The applicable Special Servicer (with respect to a Specially Serviced Mortgage Loan) or the applicable Master Servicer (with respect to any Mortgage Loan (other than a Non-Serviced Pari Passu Mortgage Loan) that is not a Specially Serviced Mortgage Loan) may, consistent with the Servicing Standard and the Pooling and Servicing Agreement, agree to:
· | modify, waive or amend any term of any Mortgage Loan; |
· | extend the maturity of any Mortgage Loan; |
· | defer or forgive the payment of interest (including Default Interest) on and principal of any Mortgage Loan; |
· | defer or forgive the payment of late payment charges on any Mortgage Loan; |
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· | defer or forgive Yield Maintenance Charges or Prepayment Premiums on any Mortgage Loan; |
· | permit the release, addition or substitution of collateral securing any Mortgage Loan; |
· | permit the release, addition or substitution of the borrower or any guarantor of any Mortgage Loan; or |
· | respond to or approve borrower requests for consent on the part of the mortgagee (including lease reviews and lease consents related thereto). |
The ability of a Special Servicer or a Master Servicer to agree to any of the foregoing, however, is subject to the discussions under “—The Majority Subordinate Certificateholder and the Subordinate Class Representative—Rights and Powers of Subordinate Class Representative”, “—The Trust Advisor” and “—Enforcement of Due-on-Sale and Due-on-Encumbrance Provisions” above in this free writing prospectus, and further, to each of the following limitations, conditions and restrictions:
· | Unless the applicable Master Servicer has obtained the consent of the applicable Special Servicer, such Master Servicer may not agree to, or consent to, a request to modify, waive or amend any term of, or take any of the other above-referenced actions with respect to, any Mortgage Loan in the Trust Fund, that would (1) affect the amount or timing of any related payment of principal, interest or other amount payable under that Mortgage Loan, (2) materially and adversely affect the security for that Mortgage Loan or (3) constitute a Material Action (including any Material Action in connection with a defeasance), except (a) for certain waivers of Default Interest and/or late payment charges and (b) with respect to certain routine matters. |
· | With limited exceptions generally involving the waiver of Default Interest and late payment charges, the applicable Special Servicer may not agree to, or consent to the applicable Master Servicer’s agreeing to, modify, waive or amend any term of, and may not take, or consent to such Master Servicer’s taking, any of the other above-referenced actions with respect to any Mortgage Loan, if doing so would— |
1. | affect the amount or timing of any related payment of principal, interest or other amount payable under the Mortgage Loan, or |
2. | in the judgment of the applicable Special Servicer, materially impair the security for the Mortgage Loan, |
unless a material default on the Mortgage Loan has occurred or, in the judgment of the applicable Special Servicer, a default with respect to payment on the Mortgage Loan at maturity or on an earlier date is reasonably foreseeable, or the applicable Special Servicer reasonably believes that there is a significant risk of such a default, and, in either case, the modification, waiver, amendment or other action is reasonably likely to produce an equal or a greater recovery to the Certificateholders (as a collective whole), on a present value basis than would liquidation.
· | Neither a Master Servicer nor a Special Servicer may extend the date on which any balloon payment is scheduled to be due on any Mortgage Loan, to a date beyond the earlier of— |
1. | five years prior to the Rated Final Distribution Date, and |
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2. | if the Mortgage Loan, is secured by a lien solely or primarily on the related borrower’s leasehold interest in the corresponding Mortgaged Property, 20 years or, to the extent consistent with the Servicing Standard, giving due consideration to the remaining term of the ground lease, ten years, prior to the end of the then-current term of the related ground lease, plus any unilateral options to extend. |
· | Neither a Master Servicer nor a Special Servicer may make or permit any modification, waiver or amendment of any term of, or take any of the other above-referenced actions with respect to, any Mortgage Loan, if doing so would result in an Adverse REMIC Event. |
· | Subject to applicable law, the related Mortgage Loan documents and the Servicing Standard, neither a Master Servicer nor a Special Servicer may permit any modification, waiver or amendment of any term of any Mortgage Loan that is not a Specially Serviced Mortgage Loan unless all related fees and expenses are paid by the borrower. |
· | A Special Servicer may not permit or consent to a Master Servicer’s permitting any borrower to add or substitute any real estate collateral for any Mortgage Loan, unless such Special Servicer has first— |
1. | determined, based upon an environmental assessment prepared by an independent person who regularly conducts environmental assessments, at the expense of the borrower, that— |
(a) | the additional or substitute collateral is in compliance with applicable environmental laws and regulations, and |
(b) | there are no circumstances or conditions present with respect to the new collateral relating to the use, management or disposal of any hazardous materials for which investigation, testing, monitoring, containment, clean-up or remediation would be required under any then applicable environmental laws or regulations; and |
2. | received, at the expense of the related borrower to the extent permitted to be charged by the holder of the Mortgage Loan under the related Mortgage Loan documents, a Rating Agency Confirmation with respect to the addition or substitution of real estate collateral. |
· | With limited exceptions generally involving the delivery of substitute collateral, the paydown of the subject Mortgage Loan or the release of non-material parcels, the applicable Special Servicer may not release or consent to the applicable Master Servicer’s releasing any material real property collateral securing a performing Mortgage Loan in the Trust Fund other than in accordance with the terms of, or upon satisfaction of, the Mortgage Loan. |
The foregoing limitations, conditions and restrictions will not apply to any of the acts referenced in this “—Modifications, Waivers, Amendments and Consents” section that occurs automatically, or that results from the exercise of a unilateral option by the related borrower (within the meaning of Treasury Regulations Section 1.1001-3(c)(3));provided,however, that in the case of transactions involving a release of a lien on real property that secures a Mortgage Loan, such a lien release will be permitted only if the related Mortgage Loan will continue to be “principally secured by real property” after the lien is released, or if
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it will not be, the release is part of a transaction that meets the requirements of a “qualified pay-down transaction” under Revenue Procedure 2010-30. Also, in no event will either the applicable Master Servicer or the applicable Special Servicer be required to oppose the confirmation of a plan in any bankruptcy or similar proceeding involving a borrower if, in its judgment, opposition would not ultimately prevent the confirmation of the plan or one substantially similar.
Notwithstanding the foregoing, a Master Servicer will not be required to seek the consent of, or provide prior notice to, the applicable Special Servicer or any Certificateholder or obtain any Rating Agency Confirmation in order to approve the following modifications, waivers or amendments of non-Specially Serviced Mortgage Loans: (i) waivers of minor covenant defaults (other than financial covenants), including late financial statements; (ii) releases of non-material parcels of a Mortgaged Property (including, without limitation, any such releases (A) to which the related Mortgage Loan documents expressly require the mortgagee thereunder to make such releases upon the satisfaction of certain conditions (and the conditions to the release that are set forth in the related Mortgage Loan documents do not include the approval of the lender or the exercise of lender discretion (other than confirming the satisfaction of the other conditions to the release set forth in the related Mortgage Loan documents that do not include any other approval or exercise)) and such release is made as required by the related Mortgage Loan documents or (B) that are related to any condemnation action that is pending, or threatened in writing, and would affect a non-material portion of the Mortgaged Property); (iii) grants of easements or rights of way that do not materially affect the use or value of a Mortgaged Property or the borrower’s ability to make any payments with respect to the related Mortgage Loan; (iv) granting other routine approvals, including the granting of subordination and non-disturbance and attornment agreements and consents involving routine leasing activities that (A) do not involve a ground lease or lease of an outparcel and (B) affectless than the lesser of (a) 30% of the net rentable area of the improvements at the Mortgaged Property and (b) 30,000 square feet of the improvements at the Mortgaged Property; (v) approvals of annual budgets to operate a residential cooperative Mortgaged Property; (vi) approvals of annual budgets to operate a Mortgaged Property (other than a residential cooperative Mortgaged Property), other than a budget with (1) a material (more than 15%) increase in operating expenses or (2) payments to entities actually known by the applicable Master Servicer to be affiliates of the related borrower (excluding payments to affiliated entities agreed to at the origination of the related Mortgage Loan or previously agreed by the applicable Special Servicer); (vii) approving a change of the property manager that does not otherwise constitute a Material Action pursuant to clause 10 of the definition thereof at the request of the related borrower (provided that (x) the related Mortgaged Property is not a hospitality property and either (A) the change occurs in connection with an assignment and assumption approved in accordance with the applicable provisions of the Pooling and Servicing Agreement or (B) the successor property manager is not affiliated with the borrower and is a nationally or regionally recognized manager of similar properties and the related Mortgage Loan does not have a Stated Principal Balance that is greater than or equal to $8,500,000 or 2% of the then-aggregate Stated Principal Balance of the Mortgage Pool, whichever is less or (y) the related Mortgaged Property is a residential cooperative property), (viii) (A) any releases or reductions of or withdrawals from (as applicable) any letters of credit, reserve funds or other additional collateral with respect to any Mortgaged Property securing a residential cooperative Mortgage Loan or (B) any releases or reductions of or withdrawals from (as applicable) any letters of credit, reserve funds or other additional collateral with respect to any Mortgaged Property securing a Mortgage Loan other than a residential cooperative Mortgage Loan where the release or reduction of or withdrawal from (as applicable) the applicable letter of credit, reserve funds or additional collateral is not conditioned on obtaining the consent of the lender and the conditions to the release,
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reduction or withdrawal (as applicable) that are set forth in the related Mortgage Loan documents do not include the approval of the lender or the exercise of lender discretion (other than confirming the satisfaction of the other conditions to the transaction set forth in the related Mortgage Loan documents that do not include any other approval or exercise), (ix) with respect to Mortgage Loans that are both sold to the Trust by National Cooperative Bank, N.A. and secured by residential cooperative properties, the related borrower incurring subordinate debt secured by the related property, subject to the satisfaction of various conditions set forth in the Pooling and Servicing Agreement, or (x) modifications to cure any ambiguity in, or to correct or supplement any provision of an intercreditor agreement to the extent permitted therein without obtaining any Rating Agency Confirmation, except that the Subordinate Class Representative’s consent will be required for any such modification of an intercreditor agreement (other than with respect to any Excluded Loan) during any Subordinate Control Period;provided that such modification, waiver, consent or amendment (A) would not constitute a “significant modification” of the subject Mortgage Loan pursuant to Treasury Regulations Section 1.860G-2(b), would not cause any Mortgage Loan to cease to be treated as “principally secured by real property” and would not otherwise constitute an Adverse REMIC Event with respect to REMIC I, REMIC II or REMIC III or constitute an Adverse Grantor Trust Event with respect to the Grantor Trust, and (B) would be consistent with the Servicing Standard.
In connection with (i) the release of any portion of a Mortgaged Property from the lien of the related Mortgage Loan or (ii) the taking of any portion of a Mortgaged Property by exercise of the power of eminent domain or condemnation, if the Mortgage Loan documents require the applicable Master Servicer or the applicable Special Servicer, as applicable, to calculate (or to approve the calculation of the related borrower of) the loan-to-value ratio of the remaining Mortgaged Property or Mortgaged Properties or the fair market value of the real property constituting the remaining Mortgaged Property or Mortgaged Properties, for purposes of REMIC qualification of the related Mortgage Loan, then such calculation of the value of the collateral will be solely based on the real property included therein.
All modifications, amendments, material waivers and other Material Actions entered into or taken and all consents with respect to the Mortgage Loans must be in writing. Each of the applicable Master Servicer and the applicable Special Servicer must deliver to the custodian for deposit in the related mortgage file, an original counterpart of the agreement relating to such modification, waiver, amendment or other action agreed to or taken by it, promptly following its execution.
In circumstances in which a Master Servicer is not permitted to enter into a modification, waiver, consent or amendment without the approval of the applicable Special Servicer, (A) such Master Servicer must promptly provide the applicable Special Servicer with written notice of any borrower request for such modification, waiver or amendment, such Master Servicer’s written recommendations and analysis, and with all information reasonably available to such Master Servicer that the applicable Special Servicer may reasonably request in order to withhold or grant any such consent, (B) the applicable Special Servicer will decide whether to withhold or grant such consent in accordance with the Servicing Standard (and subject to the other provisions of the Pooling and Servicing Agreement that require the applicable Special Servicer to obtain the approval of or engage in consultations with other parties), and (C) if any such consent has not been expressly denied within 15 business days (or, in connection with an Acceptable Insurance Default, 90 days) of the applicable Special Servicer’s receipt from such Master Servicer of such Master Servicer’s recommendations and analysis and all information reasonably requested thereby and reasonably available to such Master Servicer in order to make an informed decision (provided that such time period will be deemed to have commenced upon the applicable
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Special Servicer’s receipt from such Master Servicer of such Master Servicer’s recommendations and analysis and all information reasonably requested thereby and reasonably available to such Master Servicer in order to make an informed decision), such consent will be deemed to have been granted. If approval is granted or deemed to have been granted by the applicable Special Servicer, such Master Servicer will be responsible for entering into the relevant documentation.
“Material Action” means, for any Mortgage Loan (other than a Non-Serviced Pari Passu Mortgage Loan), any of the following actions:
1. | any proposed or actual foreclosure upon or comparable conversion (which will include acquisitions of any REO Property) of the ownership of the property or properties securing any Specially Serviced Mortgage Loan that comes into and continues in default; |
2. | any modification, consent to a modification or waiver of any monetary term (other than late fees and Default Interest) or material non-monetary term (including, without limitation, the timing of payments and acceptance of discounted payoffs) of a Mortgage Loan or any extension of the maturity date of a Mortgage Loan; |
3. | following a default or an event of default with respect to a Mortgage Loan, any exercise of remedies, including the acceleration of the Mortgage Loan or initiation of any proceedings, judicial or otherwise, under the related Mortgage Loan documents; |
4. | any sale of a Defaulted Mortgage Loan or REO Property for less than the applicable Purchase Price; |
5. | any determination to bring a Mortgaged Property or an REO Property into compliance with applicable environmental laws or to otherwise address any hazardous materials located at a Mortgaged Property or an REO Property; |
6. | any release of material collateral or any acceptance of substitute or additional collateral for a Mortgage Loan or any consent to either of the foregoing, other than if required pursuant to the specific terms of the related Mortgage Loan documents and for which there is no lender discretion; |
7. | any waiver of a “due-on-sale” or “due-on-encumbrance” clause with respect to a Mortgage Loan or any consent to such a waiver or consent to a transfer of a Mortgaged Property or interests in the borrower, other than the waiver of a “due-on-encumbrance” clause with respect to a mortgage loan secured by a residential cooperative property to permit subordinate debt secured by the related mortgaged property subject to the satisfaction of various conditions and subject to certain parameters set forth in the Pooling and Servicing Agreement and discussed under “Description of the Mortgage Pool—Subordinate and/or Other Financing” and “—Additional Debt Financing for Mortgage Loans Secured by Residential Cooperatives” in this free writing prospectus; |
8. | any incurrence of additional debt by a borrower or any mezzanine financing by any beneficial owner of a borrower (to the extent that the lender has consent rights pursuant to the related Mortgage Loan documents (for purposes of the determination whether a lender has such consent rights |
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pursuant to the related Mortgage Loan documents, any Mortgage Loan document provision that requires that an intercreditor agreement be reasonably or otherwise acceptable to the lender will constitute such consent rights)), other than the incurrence of additional indebtedness by a residential cooperative borrower (subject to the satisfaction of various conditions and subject to certain parameters set forth in the Pooling and Servicing Agreement and discussed under “Description of the Mortgage Pool—Subordinate and/or Other Financing” and “—Additional Debt Financing for Mortgage Loans Secured by Residential Cooperatives” in this free writing prospectus); |
9. | any material modification, waiver or amendment of an intercreditor agreement, co-lender agreement or similar agreement with any mezzanine lender or subordinate debt holder related to a Mortgage Loan, or any action to enforce rights (or decision not to enforce rights) with respect thereto, or any material modification, waiver or amendment thereof; |
10. | any property management company changes (with respect to a Mortgage Loan with a principal balance equal to or greater than $2,500,000 and other than with respect to residential cooperative properties), including, without limitation, approval of the termination of a manager and appointment of a new property manager, or franchise changes (with respect to a Mortgage Loan for which the lender is required to consent or approve such changes under the Mortgage Loan documents); |
11. | other than with respect to any Mortgaged Property securing a residential cooperative Mortgage Loan, releases of any material amounts from any escrow accounts, reserve funds or letters of credit held as performance escrows or reserves, other than those required pursuant to the specific terms of the related Mortgage Loan documents and for which there is no lender discretion; |
12. | any acceptance of an assumption agreement or any other agreement permitting a transfer of interests in a borrower, guarantor or other obligor releasing a borrower, guarantor or other obligor from liability under a Mortgage Loan other than pursuant to the specific terms of such Mortgage Loan and for which there is no lender discretion; |
13. | any determination of an Acceptable Insurance Default; |
14. | any determination by the applicable Master Servicer to transfer a Mortgage Loan or Loan Combination to the applicable Special Servicer under the circumstances described in paragraph 3 of the definition of “Servicing Transfer Event”; or |
15. | any modification, waiver or amendment of any lease, the execution of any new lease or the granting of a subordination and non-disturbance or attornment agreement in connection with any lease, at a Mortgaged Property if (a) the lease involves a ground lease or lease of an outparcel or affects an area greater than or equal to the lesser of (i) 30% of the net rentable area of the improvements at the Mortgaged Property and (ii) 30,000 square feet of the improvements at the Mortgaged Property and (b) such transaction either is not a routine leasing matter or such transaction relates to a Specially Serviced Mortgage Loan. |
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Required Appraisals
Within 60 days (or within such longer period as the applicable Special Servicer is (as certified thereby to the Trustee in writing) diligently using reasonable efforts to obtain the appraisal referred to below) following the occurrence of any Appraisal Trigger Event with respect to any of the Mortgage Loans (other than any Non-Serviced Pari Passu Mortgage Loan), the applicable Special Servicer will be required to obtain an appraisal of the related Mortgaged Property from an independent appraiser meeting the qualifications imposed in the Pooling and Servicing Agreement, unless—
· | an appraisal had previously been obtained within the prior nine months, and |
· | the applicable Special Servicer has no knowledge of changed circumstances that in the reasonable judgment of such Special Servicer would materially affect the value of the Mortgaged Property. |
Notwithstanding the foregoing, if the Stated Principal Balance of the subject Mortgage Loan isless than $2,000,000, then the applicable Special Servicer may, at its option, perform an internal valuation of the related Mortgaged Property rather than obtain an appraisal.
As a result of any appraisal or other valuation, it may be determined that an Appraisal Reduction Amount exists with respect to the subject Mortgage Loan. An Appraisal Reduction Amount is relevant to (i) the amount of any advances of delinquent interest required to be made with respect to the affected Mortgage Loan and (ii) the determination of whether a Subordinate Control Period is in effect as of any date of determination and, during a Subordinate Control Period, the identity of the Class of Certificateholders whose members are entitled to appoint the Subordinate Class Representative.
If an Appraisal Trigger Event occurs with respect to any Specially Serviced Mortgage Loan, then the applicable Special Servicer will have an ongoing obligation to obtain or perform, as the case may be, every nine months following the occurrence of that Appraisal Trigger Event, an update of the prior required appraisal or other valuation. Based upon that update, the applicable Special Servicer is required to redetermine (in consultation with the Subordinate Class Representative (other than with respect to any Excluded Loan) during any Subordinate Control Period, or in consultation with one or more of the Subordinate Class Representative (other than with respect to any Excluded Loan) and the Trust Advisor, under the procedures described under “—Review and Consultation With Respect to Calculations of Net Present Value and Appraisal Reduction Amounts” above, during any Collective Consultation Period or Senior Consultation Period), and report to the Certificate Administrator, the Trustee and the applicable Master Servicer the new Appraisal Reduction Amount, if any, with respect to the Mortgage Loan. This ongoing obligation will cease if and when—
· | any and all Servicing Transfer Events with respect to the Mortgage Loan have ceased, and |
· | no other Servicing Transfer Event or Appraisal Trigger Event has occurred with respect to the subject Mortgage Loan during the preceding 90 days. |
The cost of each required appraisal, and any update of that appraisal, will be advanced by the applicable Master Servicer, at the direction of the applicable Special Servicer, and will be reimbursable to the applicable Master Servicer as a Servicing Advance.
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Notwithstanding the foregoing, solely for purposes of determining whether a Subordinate Control Period is in effect (and the identity of the Class of Certificateholders entitled to appoint the Subordinate Class Representative), whenever the applicable Special Servicer obtains an appraisal or updated appraisal under the Pooling and Servicing Agreement, the Subordinate Class Representative will have the right, exercisable within ten business days after such Special Servicer’s report of the resulting Appraisal Reduction Amount, to direct such Special Servicer to hire a qualified appraiser reasonably satisfactory to the Subordinate Class Representative to prepare a second appraisal of the Mortgaged Property at the expense of the Subordinate Class Representative. The applicable Special Servicer must use reasonable efforts to cause the delivery of such second appraisal (in the case of any such second appraisal in respect of an Excluded Loan, to only such Special Servicer) within 30 days following the direction of the Subordinate Class Representative. Within ten business days following its receipt of such second appraisal, such Special Servicer will be required to determine, in accordance with the Servicing Standard, whether, based on its assessment of such second appraisal and receipt of information requested from the applicable Master Servicer reasonably required to perform such recalculation of the Appraisal Reduction Amount, any recalculation of the Appraisal Reduction Amount is warranted and, if so, will recalculate the applicable Appraisal Reduction Amount on the basis of such second appraisal. Solely for purposes of determining whether a Subordinate Control Period is in effect and the identity of the Class of Certificates whose members are entitled to appoint the Subordinate Class Representative:
· | the first appraisal will be disregarded and have no force or effect, and, if an Appraisal Reduction Amount is already then in effect, the Appraisal Reduction Amount for the related Mortgage Loan will be calculated on the basis of the most recent prior appraisal or updated appraisal obtained under the Pooling and Servicing Agreement (or, if no such appraisal exists, there will be no Appraisal Reduction Amount for purposes of determining whether a Subordinate Control Period is in effect and the identity of the Class of Certificates whose members are entitled to appoint the Subordinate Class Representative) unless and until (a) the Subordinate Class Representative fails to exercise its right to direct the applicable Special Servicer to obtain a second appraisal within the exercise period described above or (b) if the Subordinate Class Representative exercises its right to direct the applicable Special Servicer to obtain a second appraisal, and such second appraisal is not received by such Special Servicer (using efforts consistent with the Servicing Standard to obtain such appraisal) within 90 days following such direction, whichever occurs earlier (and, in such event, an Appraisal Reduction Amount calculated on the basis of such first appraisal, if any, will be effective); and |
· | if the Subordinate Class Representative exercises its right to direct the applicable Special Servicer to obtain a second appraisal and such second appraisal is received by such Special Servicer within 90 days following such direction, the Appraisal Reduction Amount (if any), calculated on the basis of the second appraisal (if such Special Servicer determines that a recalculation was warranted as described above) or (otherwise) on the basis of the first appraisal will be effective. |
In addition, if there is a material change with respect to any of the Mortgaged Properties related to a Mortgage Loan with respect to which an Appraisal Reduction Amount has been calculated, then (i) during any Subordinate Control Period, the holder (or group of holders) of Certificates representing a majority of the aggregate voting rights of the Classes of Principal Balance Certificates reduced by Appraisal Reduction Amounts allocated thereto to less than 25% of each such Class’s initial principal balance and (ii) during any Collective Consultation Period, the Majority Subordinate Certificateholder will have the right, at its sole
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cost and expense, to present to the applicable Special Servicer an additional appraisal prepared by a qualified appraiser on an “as-is” basis and acceptable to such Special Servicer in accordance with the Servicing Standard. Subject to the applicable Special Servicer’s confirmation, determined in accordance with the Servicing Standard, that there has been a change with respect to the related Mortgaged Property and such change was material, the applicable Special Servicer will be required to recalculate such Appraisal Reduction Amount based upon such additional appraisal and updated information. If required by any such recalculation, any applicable Class of Principal Balance Certificates notionally reduced by any Appraisal Reduction Amounts allocated to such class will have its related certificate principal balance notionally restored to the extent required by such recalculation, and there will be a redetermination of whether a Subordinate Control Period or a Collective Consultation Period is then in effect. With respect to each Class of Control-Eligible Certificates, the right to present the Special Servicers with any such additional appraisals as provided above will be limited to no more frequently than once in any twelve-month period for each Mortgage Loan with respect to which an Appraisal Reduction Amount has been calculated.
Except as otherwise described below, “Appraisal Reduction Amount” means for any Mortgage Loan (other than a Non-Serviced Pari Passu Mortgage Loan) as to which an Appraisal Trigger Event has occurred, an amount that:
· | will be determined shortly following the later of— |
1. | the date on which the relevant appraisal or other valuation is obtained or performed, as described under “—Required Appraisals” in this free writing prospectus; and |
2. | the date on which the relevant Appraisal Trigger Event occurred; and |
· | will generally equal the excess, if any, of “x” over “y” where— |
1. | “x” is equal to the sum of, without duplication: |
(a) | the Stated Principal Balance of that Mortgage Loan; |
(b) | to the extent not previously advanced by or on behalf of the applicable Master Servicer or the Trustee, all unpaid interest, other than any Default Interest and/or Excess Interest, accrued on that Mortgage Loan through the most recent Due Date prior to the date of determination; |
(c) | all accrued but unpaid special servicing fees with respect to that Mortgage Loan; |
(d) | all related unreimbursed advances made by or on behalf of the applicable Master Servicer, the applicable Special Servicer or the Trustee with respect to that Mortgage Loan, together with interest on those advances; |
(e) | any other outstanding Additional Trust Fund Expenses (other than certain Trust Advisor Expenses) with respect to that Mortgage Loan; and |
(f) | all currently due and unpaid real estate taxes and assessments, insurance premiums and, if applicable, ground rents and any unfunded improvement or other applicable reserves, with respect to the related |
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Mortgaged Property or REO Property, for which neither the applicable Master Servicer nor the applicable Special Servicer holds any escrow funds or reserve funds; and |
2. | “y” is equal to the sum of: |
(a) | the excess, if any, of 90% of the resulting appraised value of the related Mortgaged Property (determined in the case of a residential cooperative property, assuming such property is operated as a residential cooperative) or REO Property, over the amount of any obligations secured by liens on the property that are prior to the lien of that Mortgage Loan; |
(b) | the amount of escrow payments and reserve funds held by the related Master Servicer or the related Special Servicer with respect to the subject Mortgage Loan that— |
· | are not required to be applied to pay real estate taxes and assessments, insurance premiums or ground rents, |
· | are not otherwise scheduled to be applied (except to pay debt service on the Mortgage Loan) within the next 12 months, and |
· | may be applied toward the reduction of the principal balance of the Mortgage Loan; and |
(c) | the amount of any letter of credit that constitutes additional security for the Mortgage Loan that may be used to reduce the principal balance of the subject Mortgage Loan. |
If, however—
· | an Appraisal Trigger Event occurs with respect to any applicable Mortgage Loan, |
· | the appraisal or other valuation referred to in the first bullet of this definition is not obtained or performed with respect to the related Mortgaged Property or REO Property within 60 days of the Appraisal Trigger Event referred to in the first bullet of this definition, and |
either—
1. | no comparable appraisal or other valuation had been obtained or performed with respect to the related Mortgaged Property or REO Property, as the case may be, during the 9-month period prior to that Appraisal Trigger Event, or |
2. | there has been a material change in the circumstances surrounding the related Mortgaged Property or REO Property, as the case may be, subsequent to the earlier appraisal or other valuation that, in such Special Servicer’s judgment, materially affects the property’s value, |
then until the required appraisal or other valuation is obtained or performed, the Appraisal Reduction Amount for the subject Mortgage Loan will equal 25% of the Stated Principal Balance of the subject Mortgage Loan. After receipt of the required appraisal or other valuation with respect to the related Mortgaged Property or REO Property, the applicable
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Special Servicer will be required to determine the Appraisal Reduction Amount, if any, for the subject Mortgage Loan as described in the first sentence of this definition.
An Appraisal Reduction Amount as calculated above will be reduced to zero as of the date all Servicing Transfer Events have ceased to exist with respect to the related Mortgage Loan and at least 90 days have passed following the occurrence of the most recent Appraisal Trigger Event. No Appraisal Reduction Amount as calculated above will exist as to any Mortgage Loan after it has been paid in full, liquidated, repurchased or otherwise disposed of.
As used in this free writing prospectus, “Appraisal Trigger Event” means, with respect to any Mortgage Loan (other than a Non-Serviced Pari Passu Mortgage Loan), any of the following events:
· | the occurrence of a Servicing Transfer Event and the modification of the Mortgage Loan by the applicable Special Servicer in a manner that— |
1. | materially affects the amount or timing of any payment of principal or interest due thereon, other than, or in addition to, bringing monthly debt service payments current with respect to the Mortgage Loan; |
2. | except as expressly contemplated by the related Mortgage Loan documents, results in a release of the lien of the related mortgage instrument on any material portion of the related Mortgaged Property without a corresponding principal prepayment in an amount, or the delivery of substitute real property collateral with a fair market value (as-is), that is not less than the fair market value (as-is) of the property to be released, as determined by an appraisal delivered to such Special Servicer (at the expense of the related borrower and upon which the applicable Special Servicer may conclusively rely); or |
3. | in the reasonable judgment of the applicable Special Servicer, otherwise materially impairs the security for the Mortgage Loan or materially reduces the likelihood of timely payment of amounts due thereon; |
· | the Mortgaged Property securing the Mortgage Loan becomes an REO Property; |
· | the passage of 60 days after a receiver or similar official is appointed and continues in that capacity with respect to the Mortgaged Property securing the Mortgage Loan; |
· | the related borrower becomes the subject of (1) voluntary bankruptcy, insolvency or similar proceedings or (2) involuntary bankruptcy, insolvency or similar proceedings that remain undismissed for 60 days; |
· | the related borrower fails to make when due any monthly debt service payment (other than a balloon payment) or any other payment (other than a balloon payment) required under the related mortgage note or the related mortgage, which failure continues unremedied for 60 days; and |
· | the related borrower fails to make when due any balloon payment and the borrower does not deliver to the applicable Master Servicer or the applicable Special Servicer, on or before the Due Date of the balloon payment, a written and fully executed (subject only to customary final closing conditions) refinancing commitment from an acceptable lender and reasonably satisfactory in form and substance to the applicable Master Servicer (and such Master Servicer will be required to promptly forward such commitment to the applicable Special Servicer) which provides that |
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such refinancing will occur within 120 days after the date on which the balloon payment will become due (provided that if either such refinancing does not occur during that time or the applicable Master Servicer is required during that time to make any monthly debt service advance in respect of the Mortgage Loan, an Appraisal Trigger Event will occur immediately). |
With respect to any Non-Serviced Pari Passu Mortgage Loan, any applicable Appraisal Reduction Amount will be determined by the related Other Master Servicer or the related Other Special Servicer, as applicable, on terms that are substantially similar in all material respects, but not necessarily identical, to those described above (although the appraisal trigger events, the timing of obtaining the requisite appraisals and the exact calculation of the Appraisal Reduction Amount may vary). See “—Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations” in this free writing prospectus.
Collection Accounts
General. Each Master Servicer will be required to establish and maintain an account (each a “Collection Account”) for purposes of holding payments and other collections that it receives with respect to the Mortgage Loans it is obligated to service pursuant to the Pooling and Servicing Agreement. The Collection Accounts must be maintained in a manner and with a depository institution that satisfies each Rating Agency’s standards for securitizations similar to the one involving the Offered Certificates.
The funds held in each Collection Account may be held as cash or invested in Permitted Investments. See “—Servicing and Other Compensation and Payment of Expenses—Additional Servicing Compensation” above.
Deposits. Each Master Servicer must deposit or cause to be deposited in its Collection Account generally within two business days following receipt of properly identified funds by it, all payments on and proceeds of the Mortgage Loans that are received by or on behalf of such Master Servicer. These payments and proceeds include borrower payments, insurance and condemnation proceeds (other than amounts to be applied to the restoration of a property), amounts remitted monthly by the applicable Special Servicer from an REO Account, the proceeds of any escrow or reserve account that are applied to the indebtedness under the Mortgage Loans and the sales proceeds of any sale of any Mortgage Loan on behalf of the Trust Fund that may occur as otherwise described in this free writing prospectus. Notwithstanding the foregoing, a Master Servicer need not deposit into its Collection Account any amount that such Master Servicer would be authorized to withdraw immediately from that Collection Account as described under “—Withdrawals” below and will be entitled to instead pay that amount directly to the person(s) entitled thereto.
Withdrawals. Each Master Servicer may make withdrawals from the related Collection Account for any one or more of the following purposes (the order set forth below not constituting an order of priority for such withdrawals) (each an “Authorized Collection Account Withdrawal”):
1. | to remit to the Certificate Administrator for deposit in the Distribution Account described under “Description of the Offered Certificates—Distribution Account” in this free writing prospectus, on the business day preceding each distribution date, all payments and other collections on the Mortgage Loans and the Trust’s interest in any related REO Properties that are then on deposit in that Collection Account, exclusive of any portion of those payments and other collections that represents one or more of the following— |
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(a) | monthly debt service payments due on a Due Date subsequent to the collection period for the subject distribution date; |
(b) | payments and other collections received by or on behalf of the Trust Fund after the end of the related collection period; and |
(c) | amounts that are payable or reimbursable from that Collection Account to any person other than the Certificateholders in accordance with any of clauses 2 through 5 below; |
2. | to pay or reimburse one or more parties to the Pooling and Servicing Agreement for unreimbursed servicing and monthly debt service advances, master servicing compensation, special servicing compensation and indemnification payments or reimbursement to which they are entitled (subject to any limitations on the amount or source of funds that may be used to make such payment or reimbursement, including, in the case of Trust Advisor Expenses other than Designated Trust Advisor Expenses, the limitations described under “Description of the Offered Certificates—Reductions of Interest Entitlements and the Principal Distribution Amount in Connection with Certain Trust Advisor Expenses” in this free writing prospectus); |
3. | to pay or reimburse any other items that are payable or reimbursable out of such Collection Account or otherwise at the expense of the Trust Fund under the terms of the Pooling and Servicing Agreement (including interest that accrued on advances, costs associated with permitted environmental remediation, unpaid expenses incurred in connection with the sale or liquidation of a Mortgage Loan or REO Property, amounts owed by the Trust Fund to a third party pursuant to any intercreditor or other similar agreement, the costs of various opinions of counsel and tax-related advice and costs incurred in connection with various servicing actions and the CREFC® Intellectual Property Royalty License Fee); |
4. | in connection with a Non-Serviced Pari Passu Mortgage Loan, to pay, out of the Collection Account, to the related Other Master Servicer, Other Special Servicer or Other Trust Advisor and/or the holders of the related Non-Serviced Pari Passu Companion Loan, any amount reimbursable to such party by the holder of such Non-Serviced Pari Passu Mortgage Loan pursuant to the terms of the related intercreditor agreement; |
5. | to remit to any third party that is entitled thereto any Mortgage Loan payments that are not owned by the Trust Fund, such as any payments attributable to the period before the Cut-off Date and payments that are received after the sale or other removal of a Mortgage Loan from the Trust Fund; |
6. | to withdraw amounts deposited in such Collection Account in error; and |
7. | in accordance with the terms of the Pooling and Servicing Agreement, to pay or reimburse the applicable person for any Uncovered Amount in respect of any other Master Servicer’s Collection Account, any such person’s right to payment or reimbursement for any such Uncovered Amount being limited to any general funds in the subject Master Servicer’s Collection Account that are not otherwise to be applied to make any of the payments or reimbursements |
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contemplated to be made out of the subject Master Servicer’s Collection Account pursuant to any of clauses 1-6 above; and
8. | to clear and terminate such Collection Account upon the termination of the Pooling and Servicing Agreement. |
As used in clause 7 above, “Uncovered Amount” means, with respect to any Master Servicer’s Collection Account, any Additional Trust Fund Expense, nonrecoverable advance or other item that would be payable or reimbursable out of general funds (as opposed to a specific source of funds) in such Collection Account pursuant to the Pooling and Servicing Agreement, but which cannot be so paid or reimbursed because such general funds are insufficient to cover such payment or reimbursement;provided that any such Additional Trust Fund Expense, nonrecoverable advance or other item will be an Uncovered Amount only to the extent that such general funds are insufficient to cover the payment or reimbursement thereof.
The Pooling and Servicing Agreement will contain additional provisions with respect to the timing of the payments, reimbursements and remittances generally described above. The payments, reimbursements and remittances described above may result in shortfalls to the holders of the Offered Certificates in any particular month even if those shortfalls do not ultimately become Realized Losses for those holders.
Procedures With Respect to Defaulted Mortgage Loans and REO Properties
With respect to all Mortgage Loans (other than any Non-Serviced Pari Passu Mortgage Loan), promptly upon such Mortgage Loan becoming a Defaulted Mortgage Loan, and, if the applicable Special Servicer determines in accordance with the Servicing Standard that it would be in the best interests of the Certificateholders, as a collective whole, to attempt to sell such Defaulted Mortgage Loan, the Special Servicer will use reasonable efforts to solicit offers for such Defaulted Mortgage Loan on behalf of the Certificateholders in such manner as will be reasonably likely to realize a fair price. The applicable Special Servicer will be required to accept the first (and, if multiple offers are contemporaneously received, the highest) cash offer received from any person that constitutes a fair price for such Defaulted Mortgage Loan.
The applicable Special Servicer will be required to give the Trustee, the Certificate Administrator, the applicable Master Servicer, the Trust Advisor (at any time other than a Subordinate Control Period), the Subordinate Class Representative (at any time other than during a Senior Consultation Period (other than with respect to any Excluded Loan)) and the Majority Subordinate Certificateholder (at any time other than during a Senior Consultation Period (other than with respect to any Excluded Loan)), not less than three business days’ prior written notice of its intention to sell any Defaulted Mortgage Loan. No Interested Person will be obligated to submit an offer to purchase any Defaulted Mortgage Loan. In no event will the Trustee, in its individual capacity, offer for or purchase any Defaulted Mortgage Loan.
Whether any cash offer constitutes a fair price for any Defaulted Mortgage Loan will be determined by the applicable Special Servicer, if the highest offeror is a person other than an Interested Person, and by the Trustee, if the highest offeror is an Interested Person;provided,however, that no offer from an Interested Person will constitute a fair price unless (i) it is the highest offer received and (ii) at least two other offers are received from independent third parties. In determining whether any offer received from an Interested Person represents a fair price for any such Defaulted Mortgage Loan, the Trustee will be supplied with and will rely on the most recent appraisal or updated appraisal conducted in
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accordance with the Pooling and Servicing Agreement within the preceding 9-month period or, in the absence of any such appraisal, on a new appraisal. The appraiser conducting any such new appraisal will be an appraiser selected by (i) the applicable Special Servicer if no Interested Person is making an offer, or (ii) the Trustee if an Interested Person is so making an offer. The cost of any such appraisal will be covered by, and will be reimbursable as, a Servicing Advance. Notwithstanding the foregoing, in the event that an offer from an Interested Person is equal to or in excess of the Purchase Price for such Mortgage Loan, then the Trustee will not be required to make any such determination of fair price and such offer will be deemed to be a fair price (provided that such offer is also the highest cash offer received and at least two independent offers have been received). Where any Interested Person is among those submitting offers with respect to a Defaulted Mortgage Loan, the applicable Special Servicer will require that all offers be submitted to the Trustee in writing. In determining whether any such offer from a person other than an Interested Person constitutes a fair price for any such Defaulted Mortgage Loan, the applicable Special Servicer will take into account (in addition to the results of any appraisal, updated appraisal or narrative appraisal that it may have obtained pursuant to the Pooling and Servicing Agreement within the prior nine (9) months), and in determining whether any offer from an Interested Person constitutes a fair price for any such Defaulted Mortgage Loan, any appraiser will be instructed to take into account, as applicable, among other factors, the period and amount of any delinquency on the affected Mortgage Loan, the occupancy level and physical condition of the related Mortgaged Property and the state of the local economy. The Trustee may conclusively rely on the opinion of an independent appraiser or other independent expert in real estate matters retained by the Trustee at the expense of the Trust Fund in connection with making such determination. The Purchase Price for any Defaulted Mortgage Loan will in all cases be deemed a fair price (provided that such offer is also the highest cash offer received and at least two independent offers have been received).
In connection with the sale of any Defaulted Mortgage Loan (other than a Non-Serviced Pari Passu Mortgage Loan) under the provisions described above for less than the Purchase Price, the applicable Special Servicer will be required to obtain the approval of the Subordinate Class Representative (during any Subordinate Control Period (other than with respect to any Excluded Loan)) or consult with the Subordinate Class Representative (during any Collective Consultation Period (other than with respect to any Excluded Loan)) and the Trust Advisor (during any Collective Consultation Period or Senior Consultation Period), in each case subject to the applicable Special Servicer’s prevailing duty to comply with the Servicing Standard. In addition, in considering any such sale, the related Special Servicer will consider the interests of the Certificateholders as a collective whole. In connection with any consultation with the Trust Advisor contemplated above, the applicable Special Servicer will provide the Trust Advisor with any relevant information reasonably requested by the Trust Advisor in order to enable it to consult with the applicable Special Servicer.
Notwithstanding any of the foregoing, the applicable Special Servicer will not be obligated to accept the highest cash offer if such Special Servicer determines (in accordance with the Servicing Standard and, to the extent a Subordinate Control Period is then in effect, with the consent or deemed consent of the Subordinate Class Representative (other than with respect to any Excluded Loan) and, to the extent a Collective Consultation Period is then in effect, in consultation with the Subordinate Class Representative (other than with respect to any Excluded Loan) and the Trust Advisor and, to the extent a Senior Consultation Period is then in effect, in consultation with the Trust Advisor), that rejection of such offer would be in the best interests of the Certificateholders, and such Special Servicer may accept a lower cash offer (from any person other than itself or an Affiliate) if it determines, in accordance with the Servicing Standard, that acceptance of such offer would
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be in the best interests of the Certificateholders. In connection with any consultation with the Trust Advisor contemplated above, the applicable Special Servicer will provide the Trust Advisor with any relevant information reasonably requested by the Trust Advisor in order to enable it to consult with the applicable Special Servicer.
A Special Servicer will not be permitted to foreclose upon or otherwise cause the Trust to acquire ownership of any collateral other than a Mortgaged Property unless it receives an opinion of counsel that such acquisition will not cause any REMIC Pool to fail to qualify as a REMIC and will not subject any REMIC Pool to tax (other than “net income from foreclosure property,” within the meaning of the REMIC provisions).
The applicable Special Servicer will use its reasonable efforts, consistent with the Servicing Standard, to solicit cash offers for each REO Property (other than any interest in REO Property acquired with respect to a Non-Serviced Loan Combination) in such manner as will be reasonably likely to realize a fair price for any REO Property within a customary and normal time frame for the sale of comparable properties (and, in any event, within the time period by which the REMIC provisions require its sale). The applicable Special Servicer will accept the first (and, if multiple cash offers are received by a specified offer date, the highest) cash offer received from any person that constitutes a fair price for such REO Property. If the applicable Special Servicer reasonably believes that it will be unable to realize a fair price with respect to any REO Property within the time constraints imposed by the REMIC provisions, then the applicable Special Servicer will be required, consistent with the Servicing Standard, to dispose of such REO Property upon such terms and conditions as it deems necessary and desirable to maximize the recovery thereon under the circumstances.
No Mortgage Loan Seller, Certificateholder or any affiliate of any such person is obligated to submit an offer to purchase any REO Property, and the Trustee, in its individual capacity, may not offer for or purchase any REO Property.
Whether any cash offer constitutes a fair price for any REO Property will be determined by the applicable Special Servicer or, if such cash offer is from such Special Servicer or any affiliate of such Special Servicer, by the Trustee. In determining whether any offer received from the applicable Special Servicer or an affiliate of the applicable Special Servicer represents a fair price for any REO Property, the Trustee will be supplied with and will be entitled to rely on the most recent appraisal in the related servicing file conducted in accordance with the Pooling and Servicing Agreement within the preceding 9-month period (or, in the absence of any such appraisal or if there has been a material change at the subject property since any such appraisal, on a new appraisal to be obtained by the applicable Special Servicer, the cost of which will be covered by, and be reimbursable as, a Servicing Advance). The appraiser conducting any such new appraisal must be a qualified appraiser that is (i) selected by the applicable Special Servicer if neither the applicable Special Servicer nor any affiliate thereof is submitting an offer with respect to the subject REO Property and (ii) selected by the Trustee if either the applicable Special Servicer or any affiliate thereof is so submitting an offer. Notwithstanding the foregoing, but subject to the last sentence of this paragraph, in the event that an offer from the applicable Special Servicer or an affiliate thereof is equal to or in excess of the Purchase Price for such REO Property, then such offer will be deemed to be a fair price and the Trustee will not be required to make any such determination (provided that such offer is the highest cash offer received and at least two independent offers have been received). Where any Mortgage Loan Seller, any Certificateholder or any affiliate of any such person is among those submitting offers with respect to any REO Property, the applicable Special Servicer will require that all offers be submitted to it (or, if the applicable Special Servicer or an affiliate thereof is submitting an offer, be submitted to the Trustee) in writing and, if applicable,
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otherwise meet the requirements of the related intercreditor agreement. In determining whether any offer from a person other than any Mortgage Loan Seller, any Certificateholder or any affiliate of any such person constitutes a fair price for any REO Property, the applicable Special Servicer (or the Trustee, if applicable) will be required to take into account the results of any appraisal or updated appraisal that it or the applicable Master Servicer may have obtained in accordance with the Pooling and Servicing Agreement within the prior nine (9) months, as well as, among other factors, the occupancy level and physical condition of such REO Property, the state of the then-current local economy and commercial real estate market where such REO Property is located and the obligation to dispose of such REO Property within a customary and normal time frame for the sale of comparable properties (and, in any event, within the time period required under the REMIC provisions). The Trustee will be entitled to conclusively rely on the opinion of an independent appraiser or other independent expert in real estate matters retained by the Trustee at the expense of the Trust Fund in connection with making any such determination. The Purchase Price for any REO Property will in all cases be deemed a fair price. No cash offer from the applicable Special Servicer or any affiliate thereof will constitute a fair price for any REO Property unless such offer is the highest cash offer received and at least two independent offers (not including the offer of the applicable Special Servicer or any affiliate) have been received. In the event the offer of the applicable Special Servicer or any affiliate thereof is the only offer received or is the higher of only two offers received, then additional offers will be solicited. If an additional offer or offers, as the case may be, are received for any REO Property and the original offer of such Special Servicer or any affiliate thereof is the highest of all offers received, then the offer of such Special Servicer or such affiliate will be accepted,provided that the Trustee has otherwise determined that such offer constitutes a fair price for the subject REO Property. Any offer by the applicable Special Servicer for any REO Property will be unconditional; and, if accepted, the subject REO Property will be transferred to such Special Servicer without recourse, representation or warranty other than customary representations as to title given in connection with the sale of a real property.
Notwithstanding anything contained in the preceding paragraph to the contrary, and, if applicable, to the extent consistent with any related intercreditor agreement, if the Trustee is required to determine whether a cash offer by an Interested Person constitutes a fair price, the Trustee may (at its option and at the expense of the Trust Fund) designate an independent third party expert in real estate or commercial mortgage loan matters with at least 5 years’ experience in valuing loans similar to the subject Mortgage Loan, that has been selected with reasonable care by the Trustee to determine if such cash offer constitutes a fair price for such Mortgage Loan. If the Trustee designates such a third party to make such determination, the Trustee will be entitled to rely conclusively upon such third party’s determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value incurred by any such third party pursuant to this paragraph will be covered by, and will be reimbursable from, the offering Interested Person, and to the extent not collected from such Interested Person within 30 days of request therefor, from the applicable Collection Account;provided that the Trustee may not engage a third party expert whose fees exceed a commercially reasonable amount as determined by the Trustee.
Subject to the provisions described above, the applicable Special Servicer must act on behalf of the Trust in negotiating with independent third parties in connection with the sale of any Defaulted Mortgage Loan or REO Property and taking any other action necessary or appropriate in connection with the sale of any Defaulted Mortgage Loan or REO Property, and the collection of all amounts payable in connection therewith. In connection with the sale of any Defaulted Mortgage Loan or REO Property, the applicable Special Servicer may charge prospective offerors, and may retain, fees that approximate such Special Servicer’s actual costs in the preparation and delivery of information pertaining to such sales or
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evaluating offers without obligation to deposit such amounts into the related Collection Account. Any sale of a Defaulted Mortgage Loan or any REO Property will be final and without recourse to the Trustee or the Trust, and if such sale is consummated in accordance with the terms of the Pooling and Servicing Agreement, neither such Special Servicer nor the Trustee will have any liability to any Certificateholder with respect to the Purchase Price therefor accepted.
If title to any Mortgaged Property is acquired by a Special Servicer on behalf of the Trust Fund, then such Special Servicer will be required to sell that property not later than the end of the third calendar year following the year of acquisition, unless—
· | the IRS grants an extension of time to sell the property, or such an extension is deemed to have been granted under IRS regulations or administrative procedures or the IRS does not deny an application for an extension of time, or |
· | such Special Servicer obtains an opinion of independent counsel generally to the effect that the holding of the property subsequent to the end of the third calendar year following the year in which the acquisition occurred will not result in an Adverse REMIC Event. |
Regardless of whether a Special Servicer applies for or is granted an extension of time to sell the property as contemplated by the first bullet of the prior sentence or receives the opinion contemplated by the second bullet of the prior sentence, such Special Servicer must act in accordance with the Servicing Standard and the terms and conditions of the Pooling and Servicing Agreement to liquidate the property. If an extension is granted or opinion given, such Special Servicer must sell the REO Property within the period specified in the extension or opinion, as the case may be.
Any sale of any Defaulted Mortgage Loan or REO Property will be for cash only. A Special Servicer in that capacity will have no authority to provide financing to the purchaser.
A Special Servicer may, and, if required for the REO Property to continue to qualify as “foreclosure property” within the meaning of Code Section 860G(a)(8), will be required to, retain an independent contractor to operate and manage the REO Property. The retention of an independent contractor will not relieve such Special Servicer of its obligations with respect to the REO Property.
In general, a Special Servicer or an independent contractor employed by such Special Servicer at the expense of the Trust will be obligated to operate and manage any REO Property held by the Trust in a manner that:
· | maintains its status as foreclosure property under the REMIC provisions of the Code, and |
· | would, to the extent commercially reasonable and consistent with the preceding bullet, maximize net after-tax proceeds received from that property without materially impairing such Special Servicer’s ability to sell the REO Property promptly at a fair price. |
The applicable Special Servicer must review the operation of each prospective REO Property prior to acquisition of title by the Trust and consult with the tax administrator, to determine the Trust’s federal income tax reporting position with respect to the income it is anticipated that the Trust would derive from such property if the trust acquired it. The applicable Special Servicer could determine that it would not be commercially reasonable to manage and operate the property in a manner that would avoid the imposition of—
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· | a tax on net income from foreclosure property, within the meaning of Section 860G(c) of the Code, or |
· | a tax on prohibited transactions under Section 860F of the Code. |
To the extent that income the Trust receives from an REO Property is subject to—
· | a tax on net income from foreclosure property, that income would be subject to federal tax at the highest marginal corporate tax rate, which is currently 35%, or |
· | a tax on prohibited transactions, that income would be subject to federal tax at a 100% rate. |
The determination as to whether income from an REO Property held by the Trust would be subject to a tax will depend on the specific facts and circumstances relating to the management and operation of each REO Property. The risk of taxation being imposed on income derived from the operation of foreclosed real property is particularly present in the case of hospitality and healthcare properties. Generally, income from an REO Property that is directly operated by the applicable Special Servicer would be apportioned and classified as service or non-service income. The service portion of the income could be subject to federal tax either at the highest marginal corporate tax rate or at the 100% rate. The non-service portion of the income could be subject to federal tax at the highest marginal corporate tax rate or, although it appears unlikely, at the 100% rate. Any tax imposed on the Trust’s income from an REO Property would reduce the amount available for distribution to the Certificateholders.
An “Interested Person” is the Depositor, any Master Servicer, any Special Servicer, any borrower, any manager of a Mortgaged Property, any independent contractor engaged by a Special Servicer, the Trust Advisor, or, in connection with any individual Mortgage Loan, a holder of a related mezzanine loan, or any known affiliate of any such party.
REO Account
If an REO Property (other than any REO Property acquired with respect to a Non-Serviced Loan Combination) is acquired, the applicable Special Servicer will be required to establish and maintain an account for the retention of revenues and other proceeds derived from that REO Property (an “REO Account”). The funds held in each such REO Account may be held as cash or invested in Permitted Investments. Any interest or other income earned on funds in the REO Account maintained by the applicable Special Servicer will be payable to that Special Servicer, subject to the limitations described in the Pooling and Servicing Agreement.
The applicable Special Servicer will be required to withdraw from the REO Account maintained by that Special Servicer funds necessary for the proper operation, management, leasing, maintenance and disposition of any REO Property held by the Trust Fund, but only to the extent of amounts on deposit in the account relating to that particular REO Property. Promptly following the end of each collection period, the applicable Special Servicer will be required to withdraw from its REO Account and deposit, or deliver to the applicable Master Servicer for deposit, into the related Collection Account the total of all amounts received in respect of each REO Property held by the Trust Fund during that collection period, net of any withdrawals made out of those amounts, as described in the preceding sentence and any amounts as may be necessary to maintain a reserve of sufficient funds for the proper operation, management, leasing, maintenance and disposition of that property, including the creation of a reasonable reserve for (i) the payment of taxes, assessments, insurance
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premiums, other amounts necessary for the proper operation, management and maintenance of the applicable REO Properties and certain third-party expenses in accordance with the Pooling and Servicing Agreement (including expenses relating to any appraisal, property inspection and environmental assessment reports required by the Pooling and Servicing Agreement), (ii) the reimbursement of certain expenses in respect of the REO Properties and (iii) the payment of repairs, replacements, necessary capital improvements and other related expenses.
Inspections; Collection of Operating Information
The applicable Special Servicer will be required to perform or cause to be performed a physical inspection of a Mortgaged Property (other than any Mortgaged Property securing any Non-Serviced Pari Passu Mortgage Loan) securing a Specially Serviced Mortgage Loan as soon as practicable (but in any event not later than 60 days) after the loan becomes a Specially Serviced Mortgage Loan (and such Special Servicer must continue to perform or cause to be performed a physical inspection of the subject Mortgaged Property at least once per calendar year thereafter for so long as the subject Mortgage Loan remains a Specially Serviced Mortgage Loan or if such Mortgaged Property becomes an REO Property). The applicable Special Servicer will be entitled to reimbursement of the reasonable and direct out-of-pocket expenses incurred by it in connection with each such inspection, generally as Servicing Advances. Each Master Servicer must, at its own expense, inspect or cause to be inspected each Mortgaged Property (other than any Mortgaged Property securing any Non-Serviced Pari Passu Mortgage Loan) for which it is acting as Master Servicer every calendar year beginning in 2016, or every second calendar year beginning in 2017 if the unpaid principal balance of the related Mortgage Loan (or the portion thereof allocated to such Mortgaged Property) isless than $2,000,000. However, with respect to any Mortgage Loan (other than a Specially Serviced Mortgage Loan or any Non-Serviced Pari Passu Mortgage Loan) that has an unpaid principal balance ofless than $2,000,000 and has been placed on the CREFC® servicer watch list, the applicable Master Servicer must, at the request and expense of the Subordinate Class Representative, inspect or cause to be inspected the related Mortgaged Property (other than any Mortgaged Property securing an Excluded Loan) every calendar year beginning not earlier than 2016 so long as such Mortgage Loan continues to be on the CREFC® servicer watch list. Notwithstanding the provisions described above, the applicable Master Servicer will not be obligated to inspect any particular Mortgaged Property during any one-year or two-year, as applicable, period contemplated above in the two preceding sentences, if the applicable Special Servicer has already done so during that period pursuant to the provisions described in the first sentence of this paragraph or on any date when the Mortgage Loan is a Specially Serviced Mortgage Loan. Each of the applicable Master Servicer and the applicable Special Servicer will be required to prepare a written report of each such inspection performed by it or on its behalf and deliver the report (x) promptly following preparation, to the Certificate Administrator and the Trustee (and to the applicable Master Servicer, if done by the applicable Special Servicer, and to the applicable Special Servicer, if done by the applicable Master Servicer), (y) if there has been a material adverse change in the condition of the subject Mortgaged Property or REO Property, as applicable, promptly following preparation, to the Majority Subordinate Certificateholder (other than with respect to any Excluded Loan), the Subordinate Class Representative (other than with respect to any Excluded Loan), and the Rating Agencies (subject to the Pooling and Servicing Agreement) and (z) if there has been no material adverse change in the condition of the Mortgaged Property or REO Property, as applicable, upon request, to the Subordinate Class Representative (during any Subordinate Control Period and any Collective Consultation Period (other than with respect to any Excluded Loan)), the Majority Subordinate Certificateholder (during any Subordinate Control Period and any Collective Consultation Period (other than with respect to any Excluded
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Loan)), the Trust Advisor (during any Collective Consultation Period and any Senior Consultation Period), in each case within thirty (30) days following receipt of such request.
Commencing with respect to the calendar year ending December 31, 2015 (as to annual information) and the calendar quarter ending on September 30, 2015 (as to quarterly information), the applicable Special Servicer, in the case of any Specially Serviced Mortgage Loan, and the applicable Master Servicer, in the case of each non-Specially Serviced Mortgage Loan (other than any Non-Serviced Pari Passu Mortgage Loan), must make reasonable efforts to collect promptly from each related borrower quarterly and annual operating statements, budgets and/or rent rolls (as applicable) and, with respect to Mortgage Loans secured by residential cooperative properties, maintenance schedules, of the related Mortgaged Property, and quarterly and annual financial statements of such borrower, whether or not delivery of such items is required pursuant to the terms of the related Mortgage Loan documents;provided,however, that the applicable Special Servicer, in the case of any Specially Serviced Mortgage Loan, and the applicable Master Servicer, in the case of each non-Specially Serviced Mortgage Loan, are not required to use reasonable efforts to collect quarterly operating statements, budgets, rent rolls (if applicable), maintenance schedules (if applicable) and financial statements with respect to any residential cooperative mortgage loan. In addition, the applicable Special Servicer must cause quarterly and annual operating statements, budgets and rent rolls to be regularly prepared in respect of each REO Property (other than any REO Property acquired with respect to any Non-Serviced Loan Combination) and collect all such items promptly following their preparation. The applicable Master Servicer (in the case of all Mortgaged Properties securing Serviced Mortgage Loans) or applicable Special Servicer (in the case of REO Properties other than REO Properties related to any Non-Serviced Pari Passu Mortgage Loans), as applicable, will be required to prepare CREFC® operating statement analysis reports, CREFC® comparative financial status reports and annual CREFC® NOI adjustment worksheets on the basis of the information;provided,however, that any analysis or update of any CREFC® operating statement analysis report or CREFC® NOI adjustment worksheet with respect to each year and with respect to the first calendar quarter of each year will only be required to the extent provided in the then-current applicable CREFC® guidelines.
Rating Agency Confirmations
The Pooling and Servicing Agreement will contain a provision to the effect that:
· | if all the following conditions are satisfied— |
(a) | delivery of a Rating Agency Confirmation from each of the Rating Agencies is a condition precedent to any action under the Mortgage Loan documents related to a Mortgage Loan or the Pooling and Servicing Agreement, |
(b) | the party required to obtain such Rating Agency Confirmations as contemplated under the Pooling and Servicing Agreement (the “Requesting Party”) has made a request to any such Rating Agency for such Rating Agency Confirmation, and |
(c) | within 10 business days following the posting of such request to the Rule 17g-5 Information Provider’s Website, such Rating Agency (I) has not replied to such request or (II) has responded in a manner that indicates that such Rating Agency is neither reviewing such request nor waiving the requirement for Rating Agency Confirmation, |
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· | then all the following provisions will apply: |
(i) | in the case of (c)(I) above, such Requesting Party will be required to confirm that the applicable Rating Agency has received the Rating Agency Confirmation request, and, if it has, promptly request the related Rating Agency Confirmation again, |
(ii) | if there is no response to either such request for Rating Agency Confirmation within 5 business days following such second request as contemplated by clause (i) above (after seeking to confirm that the applicable Rating Agency received such second Rating Agency Confirmation request) or if the Requesting Party receives the response to the initial request described above in clause (c)(II), then (x) with respect to any condition in any Mortgage Loan document requiring such Rating Agency Confirmation or any other matter under the Pooling and Servicing Agreement relating to the servicing of the Mortgage Loans (other than as described in clause (y) or clause (z) below), the Requesting Party (or, if the Requesting Party is the related borrower, then the applicable Master Servicer (with respect to Mortgage Loans (other than any Non-Serviced Pari Passu Mortgage Loan) that are not Specially Serviced Mortgage Loans) or the applicable Special Servicer (with respect to Specially Serviced Mortgage Loans) will determine (with the consent of the Subordinate Class Representative, during any Subordinate Control Period (other than with respect to any Excluded Loan), which consent will be deemed given if the Subordinate Class Representative does not respond within 5 business days following receipt of a request to consent to the Requesting Party’s determination), in accordance with its duties under the Pooling and Servicing Agreement and in accordance with the Servicing Standard, whether or not to waive such condition for such particular action at such time (other than with respect to defeasance, release or substitution of any collateral, in which case such condition will be deemed to be satisfied), (y) with respect to a replacement or successor of a Master Servicer or a Special Servicer, such condition will be deemed to be satisfied if (i) the applicable replacement is rated at least “CMS3” (in the case of a Master Servicer) or “CSS3” (in the case of a Special Servicer), if Fitch is the nonresponding Rating Agency; (ii) KBRA has not cited servicing concerns with respect to the applicable replacement as the sole or material factor in any qualification, downgrade or withdrawal of the ratings (or placement on “watch status” in contemplation of a ratings downgrade or withdrawal) of securities in a commercial mortgage-backed securitization transaction serviced by the applicable servicer prior to the time of determination, if KBRA is the non-responding Rating Agency; or (iii) the applicable replacement is currently acting as master servicer or special servicer, as applicable, on a “deal-level” or “transaction-level” basis for all or a significant portion of the mortgage loans in other commercial mortgage-backed securities transactions and Moody’s has not cited servicing concerns with respect to the applicable replacement master servicer or special servicer as the sole or material factor in any qualification, downgrade or withdrawal of the ratings (or placement on “watch status” in contemplation of a ratings downgrade or withdrawal) of securities in any other commercial mortgage-backed securitization transaction serviced by the applicable servicer prior to the time of determination, if Moody’s is the non-responding Rating Agency; and (z) with respect to a replacement or successor Trust Advisor, such condition will be deemed to be waived with respect to any non-responding Rating Agency so long as such Rating Agency |
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has not cited concerns regarding the replacement trust advisor as the sole or material factor in any qualification, downgrade or withdrawal of the ratings (or placement on “watch status” in contemplation of a ratings downgrade or withdrawal) of securities in a commercial mortgage-backed securitization transaction with respect to which the replacement trust advisor acts as trust advisor or operating advisor prior to the time of determination;
(iii) | in connection with any determination made by the Requesting Party, as contemplated in clause (i) above, the applicable Special Servicer or the applicable Master Servicer, as applicable, will be required to (A) obtain the consent of the Subordinate Class Representative (during any Subordinate Control Period (other than with respect to any Excluded Loan)) or consult with the Subordinate Class Representative (during any Collective Consultation Period (other than with respect to any Excluded Loan)) and (B) consult with the Trust Advisor (during any Collective Consultation Period or Senior Consultation Period), with consent or approval deemed to be granted by the Subordinate Class Representative (during any Subordinate Control Period (other than with respect to any Excluded Loan)), if it does not respond within five business days of its receipt of a request for consideration from the applicable Special Servicer or the applicable Master Servicer, as applicable; and |
(iv) | promptly following the Requesting Party’s determination to take any action discussed above without receiving affirmative Rating Agency Confirmation from a Rating Agency, the Requesting Party (to the extent that the applicable information has been provided to the Requesting Party) will be required to provide notice, which may be transmitted by electronic mail to the Rule 17g-5 Information Provider (which will promptly post such notice to the Rule 17g-5 Information Provider’s Website pursuant to the Pooling and Servicing Agreement). |
“Rule 17g-5 Information Provider” means the Certificate Administrator acting in the capacity as “Rule 17g-5 Information Provider” under the Pooling and Servicing Agreement.
For all other matters or actions not specifically discussed above, including without limitation any amendment to the Pooling and Servicing Agreement, the applicable Requesting Party will be required to obtain an affirmative Rating Agency Confirmation from each of the Rating Agencies.
In the event an action otherwise requires a Rating Agency Confirmation from each of the Rating Agencies, in absence of such Rating Agency Confirmation, we cannot assure you that any Rating Agency will not downgrade, qualify or withdraw its ratings as a result of any such action taken by a Master Servicer or a Special Servicer in accordance with the procedures discussed above.
As used in this free writing prospectus “Rating Agency Confirmation” means, with respect to any matter, confirmation in writing by each applicable Rating Agency that a proposed action, failure to act or other event specified in this free writing prospectus will not in and of itself result in the downgrade, withdrawal or qualification of the then-current rating assigned to any Class of Certificates (if then rated by the Rating Agency), that a proposed action, failure to act or other event specified in this free writing prospectus will not in and of itself result in a downgrade, withdrawal or qualification of the then-current rating assigned to any class of such commercial mortgage-backed securities (if then rated by such rating agency);provided that if a Requesting Party receives a written waiver or acknowledgment
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from the relevant rating agency indicating its decision not to review the matter for which the Rating Agency Confirmation is sought, then the requirement to receive a Rating Agency Confirmation from such rating agency with respect to such matter will not apply. For the purposes of this definition, any confirmation, waiver, request, acknowledgment or approval which is required to be in writing may be in the form of electronic mail. Notwithstanding anything to the contrary set forth in the Pooling and Servicing Agreement, at any time during which the Certificates are no longer rated by a Rating Agency, then no Rating Agency Confirmation will be required under the Pooling and Servicing Agreement.
The Pooling and Servicing Agreement will provide that the Depositor, the Rule 17g-5 Information Provider, the Trustee, the Certificate Administrator, the Master Servicers, the Special Servicers and the Trust Advisor may amend the Pooling and Servicing Agreement to change the procedures regarding compliance with Rule 17g-5, without any Certificateholder consent;provided that such amendment does not materially increase the responsibilities of the Rule 17g-5 Information Provider;provided,further, that notice of any such amendment must be provided to the Rule 17g-5 Information Provider, who will post such notice to the Rule 17g-5 Information Provider’s Website, and within 2 business days following delivery to the Rule 17g-5 Information Provider, deliver the notice to the Rating Agencies; andprovided,further, that no amendment to such provisions may be made without the consent of the Depositor for any commercial mortgage-backed securities backed by a Non-Serviced Pari Passu Companion Loan. “Rule 17g-5 Information Provider’s Website” means www.ctslink.com, under the “NRSRO” tab for the related transaction.
Servicer Termination Events
“Servicer Termination Event” means, with respect to the applicable Master Servicer or the applicable Special Servicer, each of the following events, circumstances and conditions:
(i) | such Master Servicer or such Special Servicer, as the case may be, fails to deposit, or to remit to the appropriate party for deposit, into the related Collection Account or the REO Account, as applicable, any amount required to be so deposited or remitted, which failure continues unremedied for 1 business day following the date on which the deposit or remittance was required to be made; |
(ii) | any failure by such Master Servicer to remit to the Certificate Administrator for deposit in the Distribution Account any amount required to be so remitted, which failure continues unremedied beyond a specified time on the business day following the date on which the remittance was required to be made; |
(iii) | any failure by such Master Servicer or such Special Servicer, as the case may be, to timely make any Servicing Advance required to be made by that party under the Pooling and Servicing Agreement, which failure continues unremedied for five business days (or, in the case of an emergency Servicing Advance, three business days) following the date on which written notice of such failure has been given to such Master Servicer or such Special Servicer, as the case may be, by any other party to the Pooling and Servicing Agreement; |
(iv) | any failure by such Master Servicer or such Special Servicer, as the case may be, duly to observe or perform in any material respect any of its other covenants or agreements under the Pooling and Servicing Agreement, which failure continues unremedied for 30 days after written notice has been given to such Master Servicer or such Special Servicer, as the case may be, by any |
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other party to the Pooling and Servicing Agreement or by Certificateholders entitled to notless than 25% of the voting rights (determined without notionally reducing the principal balances of the Certificates by any Appraisal Reduction Amounts);provided,however, that, with respect to any such failure that is not curable within such 30-day period, such Master Servicer or such Special Servicer, as the case may be, will have an additional cure period of 60 days to effect such cure so long as such Master Servicer or such Special Servicer, as the case may be, has commenced to cure the failure within the initial 30-day period and has provided the Trustee with an officer’s certificate certifying that it has diligently pursued, and is continuing to pursue, a full cure;
(v) | any breach on the part of such Master Servicer or such Special Servicer, as the case may be, of any of its representations or warranties contained in the Pooling and Servicing Agreement that materially and adversely affects the interests of any Class of Certificateholders, which breach continues unremedied for 30 days after written notice of it has been given to such Master Servicer or such Special Servicer, as the case may be, by any other party to the Pooling and Servicing Agreement, by Certificateholders entitled to notless than 25% of the voting rights (determined without notionally reducing the principal balances of the Certificates by any Appraisal Reduction Amounts);provided,however, that, with respect to any such breach that is not curable within such 30-day period, such Master Servicer or such Special Servicer, as the case may be, will have an additional cure period of 60 days to effect such cure so long as such Master Servicer or such Special Servicer, as the case may be, has commenced to cure the failure within the initial 30-day period and has provided the Trustee with an officer’s certificate certifying that it has diligently pursued, and is continuing to pursue, a full cure; |
(vi) | the occurrence of any of various events of bankruptcy, insolvency, readjustment of debt, marshaling of assets and liabilities, or similar proceedings with respect to such Master Servicer or such Special Servicer, as the case may be, or the taking by such Master Servicer or such Special Servicer, as the case may be, of various actions indicating its bankruptcy, insolvency or inability to pay its obligations; |
(vii) | any of Fitch, KBRA or Moody’s has (i) qualified, downgraded or withdrawn its rating or ratings of one or more Classes of Certificates, or (ii) placed one or more Classes of Certificates on “watch status” in contemplation of rating downgrade or withdrawal (and such qualification, downgrade, withdrawal or “watch status” placement has not been withdrawn by Fitch, KBRA or Moody’s, as applicable, within 60 days of such event) and, in the case of either of clauses (i) or (ii), has publicly cited servicing concerns with such Master Servicer or such Special Servicer, as applicable, as the sole or a material factor in such rating action; or |
(viii) | any failure by such Master Servicer or such Special Servicer to deliver (a) any Exchange Act reporting items (other than items to be delivered by a Designated Sub-Servicer) required to be delivered by such Master Servicer or such Special Servicer, as applicable, to the Certificate Administrator under the Pooling and Servicing Agreement by the time required under the Pooling and Servicing Agreement after any applicable grace periods or (b) any Exchange Act reporting items that a sub-servicer or Servicing Function Participant (such a sub-servicer or Servicing Function Participant, the “Sub-Servicing Entity”) |
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retained by such Master Servicer or such Special Servicer, as applicable (other than a Designated Sub-Servicer), is required to deliver (any Sub-Servicing Entity that defaults in accordance with the provision of this clause (viii) will be terminated at the direction of the Depositor). |
When a single entity acts as two or more of the capacities of a Master Servicer and a Special Servicer, a Servicer Termination Event (other than an event described in clause (vii) above) in one capacity will constitute a Servicer Termination Event in both or all such capacities.
Rights Upon the Occurrence of a Servicer Termination Event
If a Servicer Termination Event occurs with respect to a Master Servicer or a Special Servicer and remains unremedied, the Trustee will be authorized, and at the direction of Certificateholders entitled to notless than 25% of the voting rights (determined without notionally reducing the principal balances of the Certificates by any Appraisal Reduction Amounts), or, in the case of such Special Servicer, at the direction of the Subordinate Class Representative during a Subordinate Control Period (except to the extent that the Servicer Termination Event relates to an Excluded Loan), the Trustee will be required, to terminate all of the obligations and rights of the defaulting party under the Pooling and Servicing Agreement accruing from and after receipt by the applicable defaulting party of such a notice of termination, other than any rights the defaulting party may have as a Certificateholder, entitlements to amounts payable to the terminated party at the time of termination and any entitlements of the terminated party that survive the termination.
Upon any termination, subject to the discussion in the next two paragraphs and under “—Replacement of the Special Servicers” above, the Trustee must either:
· | succeed to all of the responsibilities, duties and liabilities of the terminated Master Servicer or Special Servicer, as the case may be, under the Pooling and Servicing Agreement; or |
· | appoint an established mortgage loan servicing institution reasonably acceptable to the Subordinate Class Representative (provided that the replacement need not be reasonably acceptable to the Subordinate Class Representative as the successor related to any Excluded Loan) to act as successor to the terminated Master Servicer or Special Servicer, as the case may be. |
Upon a Servicer Termination Event, the holders of Certificates entitled to a majority of the voting rights (determined without notionally reducing the principal balances of the Certificates by any Appraisal Reduction Amounts) or, alternatively, if a Servicer Termination Event involving the applicable Special Servicer has occurred, the Subordinate Class Representative during a Subordinate Control Period (other than to the extent a Servicer Termination Event affects an Excluded Loan), may require the Trustee to appoint or petition a court to appoint an established mortgage loan servicing institution to act as successor Master Servicer or Special Servicer, as the case may be, rather than have the Trustee or its designee act as that successor;provided that (1) the successor is the subject of a Rating Agency Confirmation from each Rating Agency, and (2) if such successor (in the case of a successor to the resigning or terminated Master Servicer) does not have a master servicer rating from Fitch that is “CMS3” or above, such successor is reasonably acceptable to the Subordinate Class Representative and, if such successor has a master servicer rating from Fitch that is “CMS3” or above, the Subordinate Class Representative shall have been consulted with respect to the identity of (although it need not have approved) such successor.
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Notwithstanding the foregoing discussion in this “—Rights Upon the Occurrence of a Servicer Termination Event” section, if a Master Servicer receives a notice of termination because of the occurrence of any of the Servicer Termination Events described in clause (vii) under the definition of “Servicer Termination Event” that appears in this free writing prospectus, such Master Servicer will have the right, at its expense, to sell or cause to be sold its master servicing rights to a successor, and if it elects to do so, it will have the option to continue to serve as a Master Servicer for a period of up to 45 days.
The appointment of any entity as a successor to a terminated Master Servicer or Special Servicer as described in the second bullet of the second paragraph or in the third or fourth paragraph of this “—Rights Upon the Occurrence of an Servicer Termination Event” section may not occur unless each of the Rating Agencies have confirmed that the appointment of that entity will not result in a qualification, downgrade or withdrawal of any of the then-current ratings of the Certificates.
In general, Certificateholders entitled to at least 66-2/3% of the voting rights (determined without notionally reducing the principal balances of the Certificates by any Appraisal Reduction Amounts) allocated to each Class of Certificates affected by any Servicer Termination Event may waive the Servicer Termination Event, except that:
· | the Servicer Termination Events described in clauses (i), (ii) and (vii) under the definition of “Servicer Termination Event” may only be waived by all of the holders of the affected Classes of Certificates; |
· | the Depositor will be exclusively entitled to waive any Servicer Termination Event described in clause (viii) under the definition of Servicer Termination Event; and |
· | no waiver of any Servicer Termination Event by one or more persons will have any force or effect unless and until the party requesting the waiver at its own expense has reimbursed the Trustee and the Certificate Administrator for any monies spent by them in connection with such Servicer Termination Event, together with interest thereon from and including the date so spent to but excluding the date of reimbursement. |
Upon any waiver of a Servicer Termination Event, the Servicer Termination Event will cease to exist and will be deemed to have been remedied for every purpose under the Pooling and Servicing Agreement.
Termination, Discharge and Resignation of the Trust Advisor
The Trust Advisor may be removed upon (i) the written direction of holders of Certificates evidencing notless than 25% of the aggregate voting rights (taking into account the allocation of any Appraisal Reduction Amounts in respect of the Mortgage Loans to notionally reduce the Class principal balances of the Principal Balance Certificates to which such Appraisal Reduction Amounts are allocable) of all Certificates on an aggregate basis requesting a vote to replace the Trust Advisor with a replacement trust advisor selected by such Certificateholders (subject to certain criteria for the replacement Trust Advisor set forth in the Pooling and Servicing Agreement), (ii) payment by such requesting holders to the Certificate Administrator of all reasonable fees and expenses to be incurred by the Certificate Administrator in connection with administering such vote and (iii) delivery by such holders to the Certificate Administrator of Rating Agency Confirmation from each Rating Agency with respect to the appointment of such replacement trust advisor (which confirmations will be obtained at the expense of such holders). In addition, during any Subordinate Control Period, the identity of the proposed replacement trust advisor will be
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subject to the consent of the Subordinate Class Representative (such consent not to be unreasonably withheld),provided that such consent will be deemed to have been granted if no objection is made within ten business days following the Subordinate Class Representative’s receipt of the request for consent, and, if granted, such consent may not thereafter be revoked or withdrawn. Thereafter, the Certificate Administrator will be required to promptly provide written notice to all Certificateholders of such request by posting such notice on its internet website, and by mail, and conduct the solicitation of votes of all Certificates in such regard. Upon the vote or written direction of holders of at least 75% of the aggregate voting rights (taking into account the allocation of Appraisal Reduction Amounts in respect of the Mortgage Loans to notionally reduce the Class principal balances of the Principal Balance Certificates to which such Appraisal Reduction Amounts are allocable) of all Certificates on an aggregate basis, the Certificate Administrator will notify the Trustee, and the Trustee will immediately replace the Trust Advisor with the replacement trust advisor. If a proposed termination and replacement of the Trust Advisor as described above is not consummated within 180 days following the initial request of the Certificateholders who requested a vote, then the proposed termination and replacement will have no further force or effect.
In addition, in the event (i) the Trust Advisor fails to duly observe or perform in any material respect any of its duties, covenants or obligations under the Pooling and Servicing Agreement, which failure continues unremedied for a period of thirty (30) days after written notice has been given to the Trust Advisor, (ii) of the insolvency of the Trust Advisor, or (iii) the Trust Advisor acknowledges in writing its inability to perform its duties under the Pooling and Servicing Agreement, then either the Depositor or the Trustee may, and upon the written direction of the Certificateholders representing at least 51% of the voting rights (taking into account the application of any Appraisal Reduction Amounts to notionally reduce the principal balances of the Principal Balance Certificates), the Trustee will be required to, terminate the Trust Advisor. In the event that the Trust Advisor is terminated, the Trustee is required to select a replacement trust advisor pursuant to the terms of the Pooling and Servicing Agreement. In addition, during any Subordinate Control Period, the identity of the proposed replacement trust advisor will be subject to the consent of the Subordinate Class Representative (such consent not to be unreasonably withheld),provided that such consent will be deemed to have been granted if no objection is made within ten business days following the Subordinate Class Representative’s receipt of the request for consent, and, if granted, such consent may not thereafter be revoked or withdrawn. If the Trustee is unable to find a replacement trust advisor within thirty (30) days of the termination of the Trust Advisor, the Depositor will be permitted to find a replacement trust advisor. Unless and until a replacement trust advisor is appointed, no party may act as the Trust Advisor.
The Trust Advisor will be discharged from its duties under the Pooling and Servicing Agreement when the aggregate certificate principal balance of the Class A-1, A-2, A-3, A-4, A-SB and D Certificates and the Class A-4FX, A-S, B and C Regular Interests (and, therefore, the Class A-4FL, A-4FX, A-S, B, C and PEX Certificates) has been reduced to zero.
If the Trust Advisor is discharged, terminated or resigns, in all such circumstances, it will remain entitled to any accrued and unpaid fees, which will be payable in accordance with the priorities described in the Pooling and Servicing Agreement, and indemnification in respect of the period prior to its termination on the terms and conditions provided in the Pooling and Servicing Agreement.
The Trust Advisor may resign upon 30 days’ prior written notice if a replacement trust advisor meeting the eligibility requirements described in this free writing prospectus has accepted its appointment as the replacement trust advisor. The resigning Trust Advisor will be required to pay all reasonable out-of-pocket costs and expenses of each party to the
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Pooling and Servicing Agreement, the Issuing Entity and each Rating Agency in connection with the resignation of the Trust Advisor and the transfer of its duties (including, but not limited to, reasonable out-of-pocket costs and expenses associated with higher market fees of a successor, transferring related information, records and reports to the successor, and obtaining a Rating Agency Confirmation from each Rating Agency with respect to the appointment of a replacement trust advisor). During a Subordinate Control Period, the identity of the replacement trust advisor will be subject to the reasonable approval of the Subordinate Class Representative if the replacement Trust Advisor is a special servicer that (i) is rated or approved by an NRSRO and (ii) has not acted as a trust advisor or operating advisor in connection with a rated commercial mortgage-backed securitization transaction as of the Closing Date (otherwise no such approval will be required);provided that such approval will be deemed to have been granted if no objection is made within ten business days following the Subordinate Class Representative’s receipt of the request for such approval, and, if granted, such approval may not thereafter be revoked or withdrawn.
Any replacement trust advisor must (or the personnel responsible for supervising the obligations of the Trust Advisor must) meet the following criteria: (i) be regularly engaged in the business of analyzing and advising clients in commercial mortgage-backed securities matters and have at least 5 years of experience in collateral analysis and loss projections, and (ii) have at least 5 years of experience in commercial real estate asset management and experience in the workout and management of distressed commercial real estate assets.
Resignation of the Master Servicers and the Special Servicers
Any Master Servicer or Special Servicer may resign from the obligations and duties imposed on it under the Pooling and Servicing Agreement upon a determination that its duties are no longer permissible under applicable law or are in material conflict by reason of applicable law with any other activities carried on by it (the other activities of such Master Servicer or such Special Servicer, as the case may be, so causing such a conflict being of a type and nature carried on by such Master Servicer or such Special Servicer, as the case may be, at the date of the Pooling and Servicing Agreement). Any such determination requiring the resignation of a Master Servicer or a Special Servicer must be evidenced by an opinion of counsel to such effect. Unless applicable law requires the resignation of such Master Servicer or such Special Servicer (as the case may be) to be effective immediately, and the opinion of counsel so states, no such resignation will become effective until the Trustee or other successor has assumed the responsibilities and obligations of the resigning party in accordance with the Pooling and Servicing Agreement;provided that, if no successor to such Master Servicer or such Special Servicer (as the case may be) is so appointed and has accepted appointment within 90 days after such Master Servicer or such Special Servicer has given notice of such resignation, the resigning Master Servicer or Special Servicer (as the case may be) may petition any court of competent jurisdiction for the appointment of a successor.
In addition, each Master Servicer and Special Servicer will have the right to resign at any other time for any reason,provided that (i) a willing successor (including any such successor identified by the resigning party) has been found that is, solely in the case of a successor to a Special Servicer if it is a resigning Special Servicer, acceptable to the Subordinate Class Representative (during any Subordinate Control Period), (ii) solely in the case of a Special Servicer if it is the resigning party, the resigning party has consulted with the Subordinate Class Representative (during any Collective Consultation Period) and the Trust Advisor (during any Collective Consultation Period or Senior Consultation Period) with respect to the identity and quality of its proposed successor, (iii) the succession is the
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subject of a Rating Agency Confirmation from each Rating Agency, (iv) the successor accepts appointment in writing prior to the effectiveness of such resignation, and (v) the successor is not a “prohibited party” under the Pooling and Servicing Agreement at the time of such succession (unless the Depositor consents to such appointment);provided,further, that in the event a replacement special servicer is being appointed solely for any Excluded Loan, the Subordinate Class Representative will not have any consent or consultation rights in respect of designating that replacement special servicer.
A resigning Master Servicer or Special Servicer, as applicable, will be required to pay all reasonable out-of-pocket costs and expenses of each party to the Pooling and Servicing Agreement, the Issuing Entity and each Rating Agency in connection with the resignation of such party and the transfer of its duties (including, but not limited to, the costs of obtaining Rating Agency Confirmation and reasonable out-of-pocket costs and expenses associated with transferring servicing files to the successor).
No Master Servicer or Special Servicer will be permitted to resign except as described above.
Certain Matters Regarding the Master Servicers, the Special Servicers, the Trust Advisor and the Depositor
The Pooling and Servicing Agreement will require each of the Master Servicers and Special Servicers to maintain a fidelity bond and errors and omissions policy or their equivalent that provides coverage against losses that may be sustained as a result of an officer’s or employee’s misappropriation of funds or errors and omissions, subject to certain limitations as to amount of coverage, deductible amounts, conditions, exclusions and exceptions. That requirement is considered to be satisfied if an affiliate of the applicable Master Servicer or Special Servicer (as the case may be) maintains a fidelity bond and errors and omissions policy (or their equivalent) and the bond and policy each extends coverage to such Master Servicer or such Special Servicer, as the case may be. Each such policy must be issued by a Qualified Insurer with the Required Claims-Paying Rating. In addition, so long as the long-term unsecured debt obligations or deposit accounts of such Master Servicer or such Special Servicer, as the case may be, are rated not lower than “A-” by Fitch, “A3” by Moody’s and the equivalent rating by KBRA (if then rated by KBRA) or a Rating Agency Confirmation from such Rating Agency with respect to which such rating is not satisfied has been received, such Master Servicer or such Special Servicer, as the case may be, may self-insure with respect to the fidelity bond and errors and omissions coverage required as described above, in which case it will not be required to maintain an insurance policy with respect to such coverage.
In no event will the Depositor, the Trust Advisor, the Master Servicers, the Special Servicers or any of their respective members, managers, directors, officers, employees or agents be under any liability to the Trust, the Trustee or the Certificateholders for any action taken or not taken in good faith pursuant to the Pooling and Servicing Agreement or for errors in judgment. None of the Depositor, the Trust Advisor, the Master Servicers, the Special Servicers nor any of their respective members, managers, directors, officers, employees or agents will be protected, however, against any liability that would otherwise be imposed by reason of breach of representation or warranty made in the Pooling and Servicing Agreement, or against any expense or liability specifically required to be borne by such party without right of reimbursement pursuant to the terms of the Pooling and Servicing Agreement, or by reason of willful misfeasance, bad faith or negligence in the performance of obligations or duties under, the Pooling and Servicing Agreement or by reason of reckless disregard of those obligations and duties.
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Furthermore, the Pooling and Servicing Agreement will entitle the Depositor, the Trust Advisor, the Master Servicers, Special Servicers and their respective members, managers, directors, officers, employees and agents to indemnification out of the Trust Fund for any loss, liability, claim, damages, penalty, fine, cost or expense incurred in connection with any actual or threatened legal action or claim that relates to the Pooling and Servicing Agreement, the Certificates or the Trust. Such indemnification will not extend, however, to any such amount (i) specifically required to be borne by the relevant party, without right of reimbursement, pursuant to the terms of the Pooling and Servicing Agreement, (ii) incurred in connection with any legal action or claim against the relevant party resulting from any breach of a representation or warranty made by it in the Pooling and Servicing Agreement, or (iii) incurred in connection with any legal action or claim against the relevant party resulting from any willful misfeasance, bad faith or negligence in the performance of obligations and duties under the Pooling and Servicing Agreement or resulting from negligent disregard of such obligations and duties. For the purposes of indemnification of a Master Servicer or a Special Servicer and limitation of liability, a Master Servicer or a Special Servicer will be deemed not to have engaged in willful misfeasance or committed bad faith, fraud or negligence in the performance of its respective obligations or duties or acted in negligent disregard or other disregard of its respective obligations or duties under the Pooling and Servicing Agreement if a Master Servicer or a Special Servicer, as applicable, fails to follow the terms of the Mortgage Loan documents because such Master Servicer or such Special Servicer, as applicable, in its reasonably exercised judgment determines that following the terms of any Mortgage Loan document would or potentially would result in an Adverse REMIC Event (for which determination, such Master Servicer and such Special Servicer will be entitled to rely on advice of counsel, the cost of which will be reimbursed as a Trust expense), as such parties will be directed to do pursuant to the Pooling and Servicing Agreement. Any indemnification payments to which the Trust Advisor may become entitled will constitute Trust Advisor Expenses and be paid, and allocated to and borne by the Certificateholders, at the times and in the manner described under “Description of the Offered Certificates—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses” in this free writing prospectus. The Trust Advisor will not be entitled to reimbursement of expenses for its services except those for which it is entitled to indemnification as described above or otherwise specifically provided for under the Pooling and Servicing Agreement.
With respect to any Non-Serviced Loan Combination, the related depositor and any related Other Master Servicer or Other Special Servicer will be entitled to limitations on liability and indemnification with respect to amounts related to such Non-Serviced Loan Combination pursuant to provisions that are substantially similar in all material respects, but not necessarily identical, to those described above and will be entitled to reimbursement from the Trust Fund for the related Non-Serviced Pari Passu Mortgage Loan’spro rata share of any such amounts.
The Depositor, the Master Servicers, the Special Servicers and the Trust Advisor will be under no obligation to appear in, prosecute or defend any legal action unless such action is related to its respective duties under the Pooling and Servicing Agreement and, except in the case of a legal action the costs of which such party is specifically required to bear, in its opinion does not involve it in any ultimate expense or liability for which it would not be reimbursed;provided,however, that the Depositor, the Master Servicers, the Special Servicers or the Trust Advisor may in its discretion undertake any such action which it may reasonably deem necessary or desirable with respect to the enforcement and/or protection of the rights and duties of the parties to the Pooling and Servicing Agreement and the interests of the Certificateholders. In such event, the legal expenses and costs of such action, and any liability resulting therefrom, will be expenses, costs and liabilities of the
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Trust, and the Depositor, the Master Servicers, the Special Servicers or the Trust Advisor, as the case may be, will be entitled to be reimbursed therefor from the Collection Accounts or the Distribution Account.
Notwithstanding any other provisions of the Pooling and Servicing Agreement to the contrary, the parties thereto will agree, and the Certificateholders by their acceptance of their Certificates will be deemed to have agreed, that (i) there could be multiple strategies to resolve any Specially Serviced Mortgage Loan and that the goal of the Trust Advisor’s participation is to provide monitoring (subject to, and in accordance with, the provisions of the Pooling and Servicing Agreement) relating to a Special Servicer’s compliance with the Servicing Standard in making its determinations as to which strategy to execute, (ii) the Trust Advisor will have no liability to any Certificateholder for any actions taken or for refraining from taking any actions under the Pooling and Servicing Agreement, (iii) the agreements of the Trust Advisor set forth in the other provisions of the Pooling and Servicing Agreement will be construed solely as agreements to perform analytical and reporting services, (iv) the Trust Advisor will have no authority or duty to make a determination on behalf of the Trust Fund, nor have any responsibility for decisions made by or on behalf of the Trust Fund, (v) insofar as the words “consult”, “recommend” or words of similar import are used in the Pooling and Servicing Agreement in respect of the Trust Advisor and any servicing action or inaction, such words shall be construed to mean the performance of analysis and reporting services, which the applicable Special Servicer may determine not to accept, (vi) the absence of a response by the Trust Advisor to an “asset status report” or other matter in which the Pooling and Servicing Agreement contemplates consultation with the Trust Advisor will not be construed as an approval, endorsement, acquiescence or recommendation for or against any proposed action (but, in the event of such absence of a response, the applicable Special Servicer (x) will be deemed to have complied with the relevant provision that otherwise required consultation with the Trust Advisor and (y) will be entitled to proceed as if consultation with the Trust Advisor had not initially been required in connection with such “asset status report” or other matter), (vii) any provision of the Pooling and Servicing Agreement that otherwise purports, or that may be construed, to impose on the Trust Advisor a duty to consider the Servicing Standard or the interests of the Certificateholders will be construed as a requirement to use the Servicing Standard or such interests as the basis of measurement in its analysis and reporting and the basis of measurement in its evaluation of the performance of the applicable Special Servicer and its determination of whether an action, recommendation or report by such Special Servicer is in compliance with the Pooling and Servicing Agreement, and not to impose on the Trust Advisor a duty to itself comply with the Servicing Standard or itself act in the interests of the Certificateholders, and such measurement basis will be construed to refer to no particular Class of Certificates or particular Certificateholders, (viii) no other party to the Pooling and Servicing Agreement, and no Subordinate Class Representative, will have any duty to monitor or supervise the performance by the Trust Advisor of its services under the Pooling and Servicing Agreement, and (ix) the Trust Advisor is not an “investment adviser” within the meaning of the Investment Advisers Act of 1940, and will not owe any fiduciary duty to any person pursuant to the Pooling and Servicing Agreement.
With limited exception, any person into which the Depositor, the Trust Advisor, the Master Servicers or the Special Servicers may be merged or consolidated, or any person resulting from any merger or consolidation to which that person is a party, or any person succeeding to the business of that person, will be the successor of that person in the capacity in which that person was serving under the Pooling and Servicing Agreement.
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Evidence as to Compliance
Each of the Master Servicers, the Special Servicers, the Certificate Administrator and the Trustee (but only if the Trustee has made an advance during the applicable calendar year) is required, under the Pooling and Servicing Agreement (and each Additional Servicer will be required under its sub-servicing agreement) to deliver annually to the Certificate Administrator and the Depositor on or before the date specified in the Pooling and Servicing Agreement, an officer’s certificate stating that (i) a review of that party’s servicing activities during the preceding calendar year or portion of that year and of performance under the Pooling and Servicing Agreement, the applicable primary servicing agreement or the applicable sub-servicing or primary servicing agreement in the case of an Additional Servicer, as applicable, has been made under the officer’s supervision, and (ii) to the best of the officer’s knowledge, based on the review, such party has fulfilled all its obligations under the Pooling and Servicing Agreement, the applicable primary servicing agreement or the applicable sub-servicing servicing agreement in the case of an Additional Servicer, as applicable, in all material respects throughout the year or portion thereof, or, if there has been a failure to fulfill any such obligation in any material respect, specifying the failure known to the officer and the nature and status of the failure. In general, none of these parties will be responsible for the performance by any other such party of that other party’s duties described above.
“Additional Servicer” means each affiliate of any Master Servicer, any Mortgage Loan Seller, the Depositor, any master servicer or special servicer with respect to any securitization of a Non-Serviced Pari Passu Companion Loan or any of the underwriters that services any of the Mortgage Loans and each person that is not an affiliate of any Master Servicer, any Mortgage Loan Seller, the Depositor or any of the underwriters, other than the related Special Servicer, and that, in either case, services 10% or more of the Mortgage Loans based on the principal balance of the Mortgage Loans.
“Designated Sub-Servicer” means any sub-servicer or Additional Servicer to be engaged on the Closing Date by any Master Servicer at the direction of a Mortgage Loan Seller.
“Servicing Function Participant” means any person, other than the applicable Master Servicer, the applicable Special Servicer and the Trust Advisor, that, within the meaning of Item 1122 of Regulation AB, is primarily responsible for performing activities that address the servicing criteria set forth in Item 1122(d) of Regulation AB, unless such person’s activities relate only to 5% or less of the Mortgage Loans based on the principal balance of the Mortgage Loans or the applicable servicer takes responsibility for the activities of such person in accordance with Regulation AB.
In addition, each of the Master Servicers, the Special Servicers (regardless of whether the applicable Special Servicer has commenced special servicing of any Mortgage Loan), the Trust Advisor, the Certificate Administrator, the custodian, the Trustee and each Servicing Function Participant, at its own expense, is required to furnish, and each of the preceding parties, as applicable, shall (i) with respect to any Servicing Function Participant that is a Designated Sub-Servicer, use commercially reasonable efforts to cause, and (ii) with respect to any other Servicing Function Participant, cause each Servicing Function Participant (other than any party to the Pooling and Servicing Agreement) with which it has entered into a servicing relationship with respect to the Mortgage Loans, to furnish, each at its own expense), annually, to the Trustee, the Certificate Administrator, the Depositor and the Rule 17g-5 Information Provider, a report (an “Assessment of Compliance”) assessing compliance by that party with the servicing criteria set forth in Item 1122(d) of Regulation AB that contains the following:
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· | a statement of the party’s responsibility for assessing compliance with the servicing criteria set forth in Item 1122 of Regulation AB applicable to it; |
· | a statement that the party used the criteria in Item 1122(d) of Regulation AB to assess compliance with the applicable servicing criteria; |
· | the party’s assessment of compliance with the applicable servicing criteria during and as of the end of the prior fiscal year, setting forth any material instance of noncompliance identified by the party, a discussion of each such failure and the nature and status thereof; and |
· | a statement that a registered public accounting firm has issued an attestation report on the party’s assessment of compliance with the applicable servicing criteria during and as of the end of the prior fiscal year. |
Each party that is required to deliver an Assessment of Compliance will also be required to simultaneously deliver a report (an “Attestation Report”) of a registered public accounting firm, prepared in accordance with the standards for attestation engagements issued or adopted by the Public Company Accounting Oversight Board, that expresses an opinion, or states that an opinion cannot be expressed (and the reasons for this), concerning the party’s assessment of compliance with the applicable servicing criteria set forth in Item 1122(d) of Regulation AB.
“Regulation AB” means Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1125, as such rules may be amended from time to time, and subject to such clarification and interpretation as have been or may hereafter be from time to time provided by the SEC or by the staff of the SEC, in each case as effective from time to time as of the compliance dates specified therein.
Certain fees and expenses incurred by the Certificate Administrator in connection with any additional disclosure required under the Exchange Act as a result of the occurrence of certain unexpected events will be reimbursable to the Certificate Administrator as Additional Trust Fund Expenses.
Additional Matters Relating to the Servicing of the Non-Serviced Loan Combinations
Each of the Brickyard Square Mortgage Loan and the Bella Luna / San Lucas Mortgage Loan will be a Non-Serviced Pari Passu Mortgage Loan, and, in each case, the related Loan Combination and any related REO Property will be serviced under the WFCM 2015-C28 Pooling and Servicing Agreement (with respect to the Brickyard Square Mortgage Loan) or the WFCM 2015-LC20 Pooling and Servicing Agreement (with respect to the Bella Luna / San Lucas Mortgage Loan). With respect to any such Non-Serviced Pari Passu Mortgage Loan, the related Other Master Servicer under the related Other Pooling and Servicing Agreement generally is expected to make servicing advances on the related Loan Combination, subject to a non-recoverability determination, and remit collections on such Non-Serviced Pari Passu Mortgage Loan to or on behalf of the Trust Fund. The applicable Master Servicer will generally be obligated to compile reports that include information on the related Non-Serviced Pari Passu Mortgage Loan, and, to the extent required by the Servicing Standard, to enforce the rights of the Trust Fund as holder of such Non-Serviced Pari Passu Mortgage Loan under the terms of the related intercreditor agreement, and make monthly debt service advances with respect to such Non-Serviced Pari Passu Mortgage Loan, subject to a non-recoverability determination. The servicing arrangements under the WFCM 2015-C28 Pooling and Servicing Agreement and the WFCM 2015-LC20 Pooling and
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Servicing Agreement, and any other securitization servicing agreement may differ in certain respects from the servicing arrangements under the Pooling and Servicing Agreement.
Each of the WFCM 2015-C28 Pooling and Servicing Agreement and the WFCM 2015-LC20 Pooling and Servicing Agreement contains terms and conditions that are customary for securitization transactions involving assets similar to the related Non-Serviced Pari Passu Mortgage Loan and that are otherwise (i) required by the Code relating to the tax elections of the trust fund for the applicable Non-Serviced Pari Passu Companion Loan, (ii) required by law or changes in any law, rule or regulation or (iii) requested by the rating agencies rating the securitization of such Non-Serviced Pari Passu Companion Loan. Such terms include, without limitation:
· | The Other Master Servicer and Other Special Servicer must satisfy customary servicer rating criteria and the Other Master Servicer and the Other Special Servicer are subject to servicer termination events, in each case that are substantially similar in all material respects, but not necessarily identical, to those in the Pooling and Servicing Agreement. |
· | Each related Other Pooling and Servicing Agreement provides for a liquidation fee, special servicing fee and workout fee with respect to the related Non-Serviced Pari Passu Mortgage Loan that are payable to the related Other Special Servicer and that are substantially similar in all material respects, but not necessarily identical, to the corresponding fee payable to the Special Servicer under the Pooling and Servicing Agreement. |
· | During any senior consultation or similar period under the related Other Pooling and Servicing Agreement, if the related Other Trust Advisor determines that the related Other Special Servicer is not performing its duties under such agreement in accordance with the related servicing standard, such Other Trust Advisor has the right to recommend the replacement of such Other Special Servicer. |
In addition, with respect to the Non-Serviced Loan Combinations:
· | The applicable Master Servicer, the applicable Special Servicer, the Certificate Administrator and the Trustee under the Pooling and Servicing Agreement have no obligation or authority to (a) supervise any Other Master Servicer, Other Special Servicer, Other Certificate Administrator or Other Trustee or (b) make Servicing Advances with respect to such Loan Combination. The obligation of the applicable Master Servicer to provide information and collections and make monthly debt service advances to the Certificate Administrator for the benefit of the Certificateholders with respect to the related Non-Serviced Pari Passu Mortgage Loan is dependent on its receipt of the corresponding information and/or collections from the applicable Other Master Servicer or applicable Other Special Servicer, as applicable. |
· | The related Other Master Servicer is expected to be entitled to receive a primary servicing fee on such Non-Serviced Pari Passu Mortgage Loan. |
· | The applicable Master Servicer will be required to make monthly debt service advances with respect to the related Non-Serviced Pari Passu Mortgage Loan, unless (i) the applicable Master Servicer or the applicable Special Servicer has determined that such advance would not be recoverable from collections on such Non-Serviced Pari Passu Mortgage Loan or (ii) the related Other Master Servicer has made a |
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similar determination with respect to an advance on the related Non-Serviced Pari Passu Companion Loan.
· | The related Other Master Servicer will be obligated to make servicing advances with respect to the related Non-Serviced Loan Combination. If the applicable Other Master Servicer determines that a servicing advance it made with respect to such Non-Serviced Loan Combination or the related Mortgaged Property is nonrecoverable, it is expected to be entitled to be reimbursed first from collections on, and proceeds of, the related Non-Serviced Pari Passu Mortgage Loan and the related Non-Serviced Pari Passu Companion Loan, on apro rata basis (based on each such loan’s outstanding principal balance), and then from general collections on all the Mortgage Loans and from general collections of the trust established under the related Other Pooling and Servicing Agreement, on apro rata basis (based on each such loan’s outstanding principal balance). |
· | During any subordinate control period (or equivalent period) under the WFCM 2015-C28 Pooling and Servicing Agreement (with respect to the Brickyard Square Loan Combination) or the WFCM 2015-LC20 Pooling and Servicing Agreement (with respect to the Bella Luna / San Lucas Loan Combination), the majority subordinate certificateholder (or equivalent party) under such agreement, or the subordinate class representative (or equivalent party) on its behalf (unless, with respect to the Brickyard Square Loan Combination, the applicable Non-Serviced Loan Combination is an “excluded loan” as defined under the applicable Other Pooling and Servicing Agreement), will have the right to terminate the related Other Special Servicer, with or without cause, and appoint itself or an affiliate or another person as the successor special servicer. |
· | The WFCM 2015-C28 Pooling and Servicing Agreement (with respect to the Brickyard Square Loan Combination) or the WFCM 2015-LC20 Pooling and Servicing Agreement (with respect to the Bella Luna / San Lucas Loan Combination) governing the servicing of the related Loan Combination provides for a vote of certificateholders under such pooling and servicing agreement to terminate the related Other Special Servicer, and for the appointment of a successor special servicer, at the written direction of holders of certificates under such agreement evidencing a certain percentage of the voting rights of such certificates. |
· | The Other Special Servicer is required to take actions with respect to the related Non-Serviced Pari Passu Mortgage Loan if it becomes a Defaulted Mortgage Loan that are substantially similar in all material respects, but not necessarily identical, to or the actions described under “—Procedures With Respect to Defaulted Mortgage Loans and REO Properties” in this free writing prospectus. |
· | The servicing provisions of each related Other Pooling and Servicing Agreement relating to performing inspections and collecting operating information will be substantially similar in all material respects, but not necessarily identical, to those of the Pooling and Servicing Agreement. |
· | The general rights of indemnification granted to the Master Servicers, Special Servicers and other applicable parties under the Pooling and Servicing Agreement generally will extend to any loss, liability, claim, damages, penalty, fine, cost or expense incurred in connection with any actual or threatened legal action or claim arising from their activities relating to such Loan Combination (whether or not such Loan Combination is then being serviced under the Pooling and Servicing Agreement), but the relevant party is required to promptly notify the applicable |
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Master Servicer and the Other Master Servicer of any claim and, if any indemnification payment is made to such party from general collections on the Mortgage Pool on deposit in the Collection Account, the applicable Master Servicer will be required to use efforts in accordance with the Servicing Standard to exercise promptly the rights of the Trust Fund under the related intercreditor agreement to obtain reimbursement from the holder of the related Non-Serviced Pari Passu Companion Loans for that holder’s allocable share of the amount so paid.
· | Upon the occurrence of a servicer termination event under the WFCM 2015-C28 Pooling and Servicing Agreement (with respect to the Brickyard Square Loan Combination) or the WFCM 2015-LC20 Pooling and Servicing Agreement (with respect to the Bella Luna / San Lucas Loan Combination), the applicable party entitled to cause the termination and replacement of the applicable servicer as described in “—Rights Upon the Occurrence of a Servicer Termination Event” will have the right to require the appointment of a subservicer with respect to the applicable Non-Serviced Pari Passu Mortgage Loan or direct the Other Trustee to terminate the related Other Special Servicer and appoint a replacement therefor solely with respect to the related Non-Serviced Pari Passu Mortgage Loan. |
See “Description of the Mortgage Pool—Loan Combinations—The Brickyard Square Loan Combination” and “—The Bella Luna / San Lucas Loan Combination” in this free writing prospectus.
Governing Law; Waiver of Jury Trial; and Consent to Jurisdiction
The Pooling and Servicing Agreement and any claim, controversy or dispute arising under or related to or in connection with the Pooling and Servicing Agreement, the relationship of the parties, and/or the interpretation and enforcement of the rights and duties of the parties will be governed by the laws of the State of New York without regard to any conflicts of law principles other than Section 5-1401 of the New York General Obligations Law. Each party to the Pooling and Servicing Agreement will waive its respective right to a jury trial in any action, claim, suit, proceeding or counterclaim relating to or arising out of the Pooling and Servicing Agreement. Additionally, each party to the Pooling and Servicing Agreement will consent to the jurisdiction of any New York State and Federal courts sitting in New York City with respect to matters arising out of or related to the Pooling and Servicing Agreement, the relationship of the parties, and/or the interpretation and enforcement of the rights and duties of the parties.
CERTAIN LEGAL ASPECTS OF THE MORTGAGE LOANS
General
The following discussion contains summaries of certain legal aspects of the Mortgage Loans with respect to the Mortgaged Properties located in New York, Texas and Florida, representing approximately 15.5%, 14.6% and 13.8% respectively, of the Cut-off Date Pool Balance by allocated loan amount, which are general in nature. The following summaries and the discussion of in the accompanying prospectus do not purport to reflect all the laws applicable to the Mortgage Loans. The summaries are qualified in the entirety by reference to the applicable federal and state laws governing the Mortgage Loans.
New York. Mortgage loans in New York are generally secured by mortgages on the related real estate. Foreclosure of a mortgage is usually accomplished in judicial proceedings. After an action for foreclosure is commenced, and if the lender secures a
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ruling that is entitled to foreclosure ordinarily by motion for summary judgment, the court then appoints a referee to compute the amount owed together with certain costs and expenses of the action. The lender then moves to confirm the referee’s report and enter a final judgment of foreclosure and sale. Public notice of the foreclosure sale, including the amount of the judgment, is given for a statutory period of time, after which the mortgaged real estate is sold by a referee at public auction. There is no right of redemption after the foreclosure of sale. In certain circumstances, deficiency judgments may be obtained. Under mortgages containing a statutorily sanctioned covenant, the lender has a right to seek to have a receiver appointed without notice and without regard to the adequacy of the mortgaged real estate as security for the amount owned.
Texas. Commercial mortgage loans in Texas are generally secured by deeds of trust on the related real estate. Foreclosure of a deed of trust in Texas may be accomplished by either a non-judicial trustee’s sale under a specific power-of-sale provision set forth in the deed of trust or by judicial foreclosure. Due to the relatively short period of time involved in a non-judicial foreclosure, the judicial foreclosure process is rarely used in Texas. A judicial foreclosure action must be initiated, and a non-judicial foreclosure must be completed, within four (4) years from the date the cause of action accrues. The cause of action for the unpaid balance of the indebtedness accrues upon the maturity of the indebtedness (by acceleration or otherwise).
Unless expressly waived in the deed of trust, the lender must provide the debtor with a written demand for payment, a notice of intent to accelerate the indebtedness, and a notice of acceleration prior to commencing any foreclosure action. It is customary practice in Texas for the demand for payment to be combined with the notice of intent to accelerate the indebtedness. In addition, with respect to a non-judicial foreclosure sale and notwithstanding any waiver by debtor to the contrary, the lender is statutorily required to (i) provide each debtor obligated to pay the indebtedness a notice of foreclosure sale via certified mail, postage prepaid and addressed to each debtor at such debtor’s last known address at least twenty-one (21) days before the date of the foreclosure sale; (ii) post a notice of foreclosure sale at the courthouse of each county in which the property is located; and (iii) file a notice of foreclosure sale with the county clerk of each county in which the property is located. Such twenty-one (21) day period includes the entire calendar day on which the notice is deposited with the United States mail and excludes the entire calendar day of the foreclosure sale. The statutory foreclosure notice may be combined with the notice of acceleration of the indebtedness and must contain the location of the foreclosure sale and a statement of the earliest time at which the foreclosure sale will begin. To the extent the note or deed of trust contains additional notice requirements, the lender must comply with such requirements in addition to the statutory requirements set forth above.
The trustee’s sale must be performed pursuant to the terms of the deed of trust and must take place between the hours of 10 a.m. and 4 p.m. on the first Tuesday of the month, in the area designated for such sales by the county commissioners’ court of the county in which the property is located, and must begin at the time set forth in the notice of foreclosure sale or not later than three (3) hours after that time. If the property is located in multiple counties, the sale may occur in any county in which a portion of the property is located. Under Texas law, the debtor does not have the right to redeem the property after foreclosure. Any action for deficiency must be brought within two (2) years of the foreclosure sale. If the foreclosure sale price is less than the fair market value of the property, the debtor or any obligor (including any guarantor) may be entitled to an offset against the deficiency in the amount by which the fair market value of the property, less the amount of any claim, indebtedness, or obligation of any kind that is secured by a lien or
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encumbrance on the real property that was not extinguished by the foreclosure, exceeds the foreclosure sale price.
Florida. Loans involving real property in Florida are secured by mortgages, and foreclosures are accomplished by judicial foreclosure. There is no power of sale in Florida. After an action for foreclosure is commenced and the lender secures a final judgment, such judgment will provide that the property be sold at a public sale at the courthouse (or on-line depending on the county) if the full amount of the judgment is not paid prior to the scheduled sale. Fla Statute 45.031 requires that foreclosure sale be held no earlier than 20 (but not more than 35) days after the judgment is entered. However, given the backlog of foreclosure cases in many counties, it is not unusual for foreclosure sales to be held later than the 35 day period specified in the statute. After the foreclosure judgment is entered and prior to the foreclosure sale, a notice of sale must be published once a week for two (2) consecutive weeks in the county in which the property is located. There is no right of redemption after the filing of the clerk’s certificate at the conclusion of the foreclosure sale. However, a certificate of title transferring title to the foreclosed property is not issued until 10 days after the foreclosure sale, and challenges to the foreclosure sale are permitted within that 10-day period. Issuance of a certificate of title is sometimes delayed beyond the 10-day period due to a backlog of foreclosure cases. Florida does not have a “one action rule” or “anti-deficiency legislation,” and deficiency judgments are permitted to the extent not prohibited by the applicable loan documents. Subsequent to a foreclosure sale, however, a lender is generally required to prove the value of the property as of the date of foreclosure sale in order to recover a deficiency. Further, Florida law limits any deficiency judgment (if otherwise permitted) against a borrower following a judicial sale to the excess of the final judgment amount (which generally equals the amount of outstanding debt plus attorneys’ fees and other collection costs) over the fair market value of the property at the time of the judicial sale. In limited circumstances, the lender may have a receiver appointed during the pendency of the foreclosure action.
Other Aspects
The discussion under “Certain Legal Aspects of Mortgage Loans and Leases” in the accompanying prospectus presents other legal aspects of the Mortgage Loans that you should consider prior to making any investment in the Offered Certificates.
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
General
Upon the issuance of the Offered Certificates, Cadwalader, Wickersham & Taft LLP, our counsel, will deliver its opinion generally to the effect that, assuming compliance with the Pooling and Servicing Agreement, each Other Pooling and Servicing Agreement and any intercreditor agreement and any amendments thereto, and subject to any other assumptions set forth in the opinion, each of “REMIC I”, “REMIC II” and “REMIC III” (each, a “REMIC Pool”) will qualify as a REMIC under the Code.
In addition, on the Closing Date, Cadwalader, Wickersham & Taft LLP, special counsel to the Depositor, will deliver its opinion that the portions of the assets of the Trust Fund consisting of (i) the Excess Interest and the excess interest distribution account, (ii) the Class A-4FX Regular Interest, the Class A-4FX/A-4FL distribution account and the swap contract and (iii) the Class A-S, B and C Regular Interests will be treated as a grantor trust for federal income tax purposes under subpart E, part I of subchapter J of the Code (the “Grantor Trust”). Accordingly, (a) the Class V-1 and V-2 Certificates will evidence undivided
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beneficial interests in the portion of the Grantor Trust in clause (i) above, (b) the Class A-4FL Certificates will evidence undivided beneficial interests in the swap contract and their percentage interest in the Class A-4FX Regular Interest and the proceeds thereof in the related sub-account of the Class A-4FX/A-4FL distribution account, (c) the Class A-4FX Certificates will evidence undivided beneficial interests in their percentage interest in the Class A-4FX Regular Interest and proceeds thereof in the related sub-account of the Class A-4FX/A-4FL distribution account, and (d) the Exchangeable Certificates will evidence undivided beneficial interests in the applicable percentage interests in the Class A-S, B and C Regular Interests.
The assets of REMIC I will generally include—
· | the Mortgage Loans (exclusive of the Excess Interest), |
· | any REO Properties acquired on behalf of the Certificateholders, |
· | the Collection Account maintained by each Master Servicer, |
· | the REO Account maintained by each Special Servicer, and |
· | the Distribution Account and Interest Reserve Account. |
For federal income tax purposes,
· | the separate non-certificated regular interests in REMIC I will be the regular interests in REMIC I and will be the assets of REMIC II, |
· | the separate non-certificated regular interests in REMIC II will be the regular interests in REMIC II and will be the assets of REMIC III, |
· | the Class A-1, A-2, A-3, A-4, A-SB, D, E, F and G Certificates and the Class A-4FX, A-S, B and C Regular Interests will evidence the ownership of regular interests in, and will generally be treated as debt obligations of, REMIC III, |
· | the Class A-S, B, C and PEX Certificates will evidence the ownership of their respective percentage interests in the portion of the Grantor Trust consisting of the Class A-S, B and C Regular Interests, |
· | the Class X-A Certificates will evidence the ownership of eight regular interests in REMIC III, each one corresponding to one of the components of the Class X-A Certificates’ notional amount, and the Class X-A Certificates will generally be treated as debt obligations of, REMIC III, |
· | the Class X-B Certificates will evidence the ownership of three regular interests in REMIC III, each one corresponding to one of the components of the Class X-B Certificates’ notional amount, and the Class X-B Certificates will generally be treated as debt obligations of, REMIC III, |
· | the Class A-4FL Certificates will evidence the ownership of their respective percentage interests in the portion of the Grantor Trust consisting of the swap contract, the Class A-4FX Regular Interest and the proceeds thereof in the related sub-account of the Class A-4FX/A-4FL distribution account, |
· | the Class A-4FX Certificates will evidence the ownership of their respective percentage interests in the portion of the Grantor Trust consisting of the Class A-4FX |
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Regular Interest and the related sub-account of the Class A-4FX/A-4FL distribution account,
· | the Class V-1 and V-2 Certificates will evidence ownership in the portion of the Grantor Trust consisting of Excess Interest and the excess interest distribution account, and |
· | the Class R Certificates will evidence ownership of the sole Class of residual interests in each of REMIC I, REMIC II and REMIC III. |
If the Trust Fund fails to comply with the ongoing requirements of the Code for REMIC status, a REMIC Pool may lose its REMIC status. If so, the Trust Fund may become taxable as a corporation, and the Offered Certificates may not be given the tax treatment summarized below. Although the Code authorizes the Treasury Department to issue regulations providing relief in the event of an inadvertent termination of REMIC status, the Treasury Department has not done so. Any relief mentioned above, moreover, may be accompanied by sanctions. These sanctions could include the imposition of a corporate tax on all or a portion of the Trust’s income for the period in which the requirements for REMIC status are not satisfied. The Pooling and Servicing Agreement will include provisions designed to maintain the status of each REMIC Pool as a REMIC under the Code.
For purposes of the tax discussions below and for the avoidance of doubt, except as otherwise indicated, it is assumed that none of the REMICs making up the Trust Fund will fail to comply with the ongoing requirements of the Code for REMIC status.
Characterization of Investments in Offered Certificates
Except to the extent noted below, Offered Certificates held by a real estate investment trust (“REIT”) will be “real estate assets” within the meaning of section 856(c)(5)(B) of the Code in the same proportion that the assets of the Trust would be so treated. In addition, interest, including original issue discount, if any, on Offered Certificates held by a REIT will be interest described in section 856(c)(3)(B) of the Code to the extent that those Certificates are treated as “real estate assets” within the meaning of section 856(c)(5)(B) of the Code.
Most of the Mortgage Loans to be included in the Trust are not secured by real estate used for residential or other purposes prescribed in section 7701(a)(19)(C) of the Code. Consequently, in general, it appears that the Offered Certificates will be treated as assets qualifying under that section to only a limited extent. Accordingly, investment in the Offered Certificates may not be suitable for a thrift institution seeking to be treated as a “domestic building and loan association” under section 7701(a)(19)(C) of the Code. The Offered Certificates will be treated as “qualified mortgages” for another REMIC under section 860G(a)(3)(C) of the Code.
To the extent an Offered Certificate represents ownership of an interest in a mortgage loan that is secured in part by the related borrower’s interest in a bank account, that mortgage loan is not secured solely by real estate. Therefore:
· | a portion of that Certificate may not represent ownership of “loans secured by an interest in real property” or other assets described in section 7701(a)(19)(C) of the Code; |
· | a portion of that Certificate may not represent ownership of “real estate assets” under section 856(c)(5)(B) of the Code; and |
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· | the interest on that Certificate may not constitute “interest on obligations secured by mortgages on real property” within the meaning of section 856(c)(3)(B) of the Code. |
In addition, most of the Mortgage Loans that we intend to include in the Trust contain defeasance provisions under which the lender may release its lien on the collateral securing the Mortgage Loan in return for the borrower’s pledge of substitute collateral in the form of Government Securities. Generally, under the Treasury regulations, if a REMIC releases its lien on real property that secures a qualified mortgage, that mortgage ceases to be a qualified mortgage on the date the lien is released unless certain conditions are satisfied. In order for the Mortgage Loan to remain a qualified mortgage, the Treasury regulations require that—
(1) | the borrower pledges substitute collateral that consist solely of Government Securities; |
(2) | the Mortgage Loan documents allow that substitution; |
(3) | the lien is released to facilitate the disposition of the property or any other customary commercial transaction, and not as part of an arrangement to collateralize a REMIC offering with obligations that are not real estate mortgages; and |
(4) | the release is not within two years of the startup day of the REMIC. |
Following the defeasance of a Mortgage Loan, regardless of whether the foregoing conditions were satisfied, that Mortgage Loan would not be treated as a “loan secured by an interest in real property” or a “real estate asset” and interest on that loan would not constitute “interest on obligations secured by real property” for purposes of sections 7701(a)(19)(C), 856(c)(5)(B) and 856(c)(3)(B) of the Code, respectively.
Discount and Premium; Prepayment Consideration
The IRS and Treasury Department have issued regulations under sections 1271 through 1275 of the Code generally addressing the treatment of debt instruments issued with original issue discount. Section 1272(a)(6) of the Code provides for special rules applicable to the accrual of original issue discount on, among other things, REMIC regular interests. The IRS and Treasury Department have not issued regulations under that section. You should be aware, however, that the regulations issued under sections 1271 through 1275 of the Code do not adequately address all issues relevant to, or are not applicable to, prepayable securities such as the Offered Certificates. We recommend that you consult with your own tax advisor concerning the tax treatment of your Offered Certificates.
For federal income tax reporting purposes, we anticipate that the Class , , , and Certificates and the Class Regular Interest will be issued at a premium, and that the Class and Certificates and the Class and Regular Interests will be issued with more than ade minimis amount of original issue discount. Whether any holder of these Classes of Offered Certificates will be treated as holding a Certificate with amortizable bond premium will depend on the Certificateholder’s purchase price and the payments remaining to be made on the Certificate at the time of its acquisition by the Certificateholder. If you acquire an interest in any Class of Offered Certificates issued at a premium, you should consider consulting your own tax advisor regarding the possibility of making an election to amortize the premium. See “Material Federal Income Tax Consequences—REMICs—Taxation of Owners of REMIC Regular Certificates—Premium” in the accompanying prospectus.
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In addition, we anticipate that the Certificate Administrator will treat the Class X-A and X-B Certificates as having no qualified stated interest. Accordingly, such Classes will be considered to be issued with original issue discount in an amount equal to the excess of all distributions of interest expected to be received thereon over their issue price (including interest accrued prior to the Closing Date). Any “negative” amounts of original issue discount on either such Class attributable to rapid prepayments with respect to the Mortgage Loans will not be deductible currently. The holder of a Class X-A or X-B Certificate may be entitled to a loss (which loss may be a capital loss) to the extent it becomes certain that such Certificateholder will not recover a portion of its basis in such Class, assuming no further prepayments. In the alternative, it is possible that rules similar to the “noncontingent bond method” of the contingent interest rules of the OID Regulations may be promulgated with respect to such Classes. Unless and until required otherwise by applicable authority, it is not anticipated that the contingent interest rules will apply.
When determining the rate of accrual of original issue discount and market discount, if any, and the amortization of premium, if any, with respect to the Certificates for federal income tax purposes, the prepayment assumption used will be that following any date of determination:
· | no mortgage loan in the Trust will otherwise be prepaid prior to maturity except that each Mortgage Loan with an Anticipated Repayment Date is assumed to repay in full on that date, and |
· | there will be no extension of maturity for any Mortgage Loan in the Trust. |
For a more detailed discussion of the federal income tax aspects of investing in the Offered Certificates, see “Material Federal Income Tax Consequences” in the accompanying prospectus.
Prepayment Premiums and Yield Maintenance Charges actually collected on the Mortgage Loans will be paid on the Offered Certificates as and to the extent described in this free writing prospectus. It is not entirely clear under the Code when the amount of a Prepayment Premium or Yield Maintenance Charge should be taxed to the holder of a Class of Offered Certificates entitled to that amount. For federal income tax reporting purposes, the tax administrator will report Prepayment Premiums or Yield Maintenance Charges as income to the holders of a Class of Offered Certificates entitled thereto only after the applicable Master Servicer’s actual receipt of those amounts. The IRS may nevertheless seek to require that an assumed amount of Prepayment Premiums and Yield Maintenance Charges be included in payments projected to be made on the Offered Certificates and that the taxable income be reported based on the projected constant yield to maturity of the Offered Certificates. In that case, the projected Prepayment Premiums and Yield Maintenance Charges would be included prior to their actual receipt by holders of the Offered Certificates. If the projected Prepayment Premiums and Yield Maintenance Charges were not actually received, presumably the holder of an Offered Certificate would be allowed to claim a deduction or reduction in gross income at the time the unpaid Prepayment Premiums and Yield Maintenance Charges had been projected to be received. Moreover, it appears that Prepayment Premiums and Yield Maintenance Charges are to be treated as ordinary income rather than capital gain. However, the correct characterization of the income is not entirely clear. We recommend you consult your own tax advisors concerning the treatment of Prepayment Premiums and Yield Maintenance Charges.
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Taxation of the Exchangeable Certificates
Each Exchangeable Certificate (other than any Class PEX Certificate) will represent a beneficial ownership interest in a regular interest issued by REMIC III, and the income tax consequences to the holder of an Exchangeable Certificate (other than any Class PEX Certificate) with respect to the applicable underlying regular interest will be the same as the income tax consequences to a holder of any other Offered Certificate, as described herein.
The Class PEX Certificates will represent beneficial ownership interests in the Class A-S, B and C Regular Interests, but each such regular interest will be taxable as a separate regular interest for federal income tax purposes, and the holder of a Class PEX Certificate must account separately for its interest in each such regular interest. The income tax consequences of holding a Class PEX Certificate with respect to each of the Class A-S, B and C Regular Interests will therefore be the same as the income tax consequences to the holder of separate Class A-S, B and C Certificates, as described herein. A purchaser must allocate its basis in the Class PEX Certificates among the interests in each of the Class A-S, B and C Regular Interests in accordance with their relative fair market values as of the time of acquisition. Similarly, on the sale of such Class PEX Certificate, the holder must allocate the amount received on the sale among the interests in each such regular interest in accordance with their relative fair market values as of the time of sale. Prospective beneficial owners of the Class PEX Certificates should consult their tax advisors as to the appropriate method of accounting for their interest in the Class PEX Certificates.
The exchange of the requisite proportions of the Class A-S, B and C Certificates for the Class PEX Certificates, and the exchange of the Class PEX Certificates for the requisite proportions of the Class A-S, B and C Certificates, will not be taxable. See “Material Federal Income Tax Consequences—Tax Treatment of Exchangeable Certificates” in the accompanying prospectus.
Further Information
For further information regarding the federal income tax consequences of investing in the Offered Certificates, including consequences of purchase, ownership and disposition of Offered Certificates, see “Material Federal Income Tax Consequences—REMICs” in the accompanying prospectus.
STATE AND OTHER TAX CONSEQUENCES
In addition to the federal income tax consequences described in “Material Federal Income Tax Consequences” in this free writing prospectus, potential investors should consider the state, local and other income tax consequences of the acquisition, ownership, and disposition of the Offered Certificates. State, local and other income tax law may differ substantially from the corresponding federal law, and this discussion does not purport to describe any aspect of the income tax laws of any state or locality. Therefore, potential investors should consult their own tax advisors with respect to the various tax consequences of investments in the Offered Certificates. For further information regarding state and other tax consequences of investing in the Offered Certificates, see “State and Other Tax Consequences” in the accompanying prospectus.
ERISA CONSIDERATIONS
Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and Section 4975 of the Code impose requirements on any employee benefit plan, or other
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retirement plan, arrangement or account, that is subject to the fiduciary responsibility provisions of ERISA (“ERISA Plan”) or any other employee benefit or retirement plan, arrangement or account that is subject to Section 4975 of the Code, including any individual retirement account or Keogh plan (collectively, with an ERISA Plan, a “Plan”). ERISA imposes duties on persons who are fiduciaries of Plans subject to ERISA and prohibits certain transactions between a Plan and Parties in Interest with respect to such Plan. Under ERISA, any person who exercises any authority or control respecting the management or disposition of the assets of a Plan, and any person who provides investment advice with respect to such assets for a fee, is a fiduciary of such Plan. Governmental plans (as defined in Section 3(32) of ERISA) and certain church plans (as defined in Section 3(33) of ERISA) are not subject to the prohibited transactions restrictions of ERISA and Section 4975 of the Code. However, such plans may be subject to similar provisions of applicable federal, state or local law.
Plan Assets
The U.S. Department of Labor (“DOL”) has issued a final regulation (29 C.F.R. Section 2510.3-101) concerning what constitutes the assets of a Plan. That DOL regulation, as modified by Section 3(42) of ERISA, provides that, as a general rule, the underlying assets and properties of corporations, partnerships, trusts and certain other entities in which a Plan makes an “equity” investment will be deemed for purposes of ERISA to be assets of the investing Plan, unless certain exceptions apply. Under the terms of the regulation, if the assets of the Trust were deemed to constitute plan assets by reason of a Plan’s investment in Offered Certificates, such plan assets would include an undivided interest in the Mortgage Loans and any other assets of the Trust.
The Depositor, the underwriters, the Master Servicers, the Special Servicers, the Trust Advisor and certain of their respective affiliates might be considered or might become Parties in Interest with respect to investing Plans. Moreover, the Trustee, the Certificate Administrator, or any insurer, primary insurer or other issuer of a credit support instrument relating to the primary assets in the Trust, or certain of their respective affiliates, might be considered Parties in Interest with respect to investing Plans. In the absence of an applicable exemption, “prohibited transactions” within the meaning of ERISA and Section 4975 of the Code could arise if Offered Certificates were acquired by, or with “plan assets” of, a Plan with respect to which any such person is a “party in interest” as defined in Section 3(14) of ERISA or a “disqualified person” as defined in Section 4975 of the Code (a “Party in Interest”).
In addition, an insurance company proposing to acquire or hold Offered Certificates with assets of its general account should consider the extent to which such acquisition or holding would be subject to the requirements of ERISA and Section 4975 of the Code under John Hancock Mutual Life Insurance Co. v. Harris Trust and Savings Bank, 510 U.S. 86 (1993), and Section 401(c) of ERISA, as amended by the Small Business Job Protection Act of 1996, Public Law No. 104-188, and subsequent DOL and judicial guidance. See “—Insurance Company General Accounts” below.
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Special Exemption Applicable to the Offered Certificates
With respect to the acquisition and holding of the Offered Certificates, the DOL has granted an exemption to the predecessor of Wells Fargo Securities, LLC (the “Exemption”). The Exemption generally exempts from certain of the prohibited transaction rules of ERISA and Section 4975 of the Code transactions relating to:
· | the initial purchase, the holding, and the subsequent resale by Plans of Certificates evidencing interests in pass-through trusts; and |
· | transactions in connection with the servicing, management and operation of such trusts, |
provided that the assets of such trusts consist of certain secured receivables, loans and other obligations that meet the conditions and requirements of the Exemption. We expect that the Exemption generally will apply to the Offered Certificates.
The assets covered by the Exemption include mortgage loans such as the Mortgage Loans and fractional undivided interests in such loans.
The Exemption as applicable to the Offered Certificates sets forth the following five general conditions which must be satisfied for exemptive relief:
· | the acquisition of the Offered Certificates by a Plan must be on terms, including the price for the Certificates, that are at least as favorable to the Plan as they would be in an arm’s-length transaction with an unrelated party; |
· | the Offered Certificates acquired by the Plan must have received a rating at the time of such acquisition that is in one of the four highest generic rating categories from at least one NRSRO that meets the requirements of the Exemption (an “Exemption Rating Agency”); |
· | the Trustee must not be an affiliate of any other member of the Restricted Group, other than an underwriter; |
· | the sum of all payments made to and retained by the underwriters in connection with the distribution of the Offered Certificates must represent not more than reasonable compensation for underwriting the Certificates; the sum of all payments made to and retained by us in consideration of our assignment of the Mortgage Loans to the Trust Fund must represent not more than the fair market value of such Mortgage Loans; the sum of all payments made to and retained by the Certificate Administrator, tax administrator, the Trustee, the Master Servicers, the Special Servicers and any sub-servicer must represent not more than reasonable compensation for such person’s services under the Pooling and Servicing Agreement or other relevant servicing agreement and reimbursement of such person’s reasonable expenses in connection therewith; and |
· | the Plan investing in the Certificates must be an “accredited investor” as defined in Rule 501(a)(1) of Regulation D under the Securities Act. |
It is a condition of the issuance of the Offered Certificates that they receive the ratings as required by the Exemption, and we believe that each of the Rating Agencies meets the requirements to be an Exemption Rating Agency; consequently, the second general condition set forth above will be satisfied with respect to Offered Certificates as of the Closing Date. In addition, the third general condition set forth above will be satisfied with
473 |
respect to the Offered Certificates as of the Closing Date. We believe that the fourth general condition set forth above will be satisfied with respect to the Offered Certificates. A fiduciary of a Plan contemplating purchasing any of the Offered Certificates, whether in the initial issuance of the Offered Certificates or in the secondary market, must make its own determination that the first and fifth general conditions set forth above will be satisfied with respect to such Certificates. A fiduciary of a Plan contemplating purchasing any of the Offered Certificates in the secondary market must make its own determination that at the time of such acquisition, such Certificates continue to satisfy the second general condition set forth above.
Moreover, the Exemption provides relief from certain self-dealing/conflict of interest prohibited transactions, but only if, among other requirements:
· | the investing Plan fiduciary or its affiliates is an obligor with respect to five percent or less of the fair market value of the obligations contained in the Trust; |
· | the Plan’s investment in each Class of Certificates does not exceed 25% of all of the Certificates outstanding of that Class at the time of the acquisition; |
· | immediately after the acquisition, no more than 25% of the assets of the Plan are invested in Certificates representing an interest in one or more trusts containing assets sold or serviced by the same entity; |
· | in connection with the acquisition of Certificates in the initial offering, at least 50% of each Class of Certificates in which Plans invest and of the aggregate interests in the Trust are acquired by persons independent of the Restricted Group; and |
· | the Plan is not sponsored by a member of the Restricted Group. |
We believe that the conditions to the applicability of the Exemption will generally be met with respect to the Offered Certificates, other than those conditions which are dependent on facts unknown to us or which we cannot control, such as those relating to the circumstances of the Plan purchaser or the Plan fiduciary making the decision to purchase any such Offered Certificates.
Some of the relief provided by the Exemption does not apply to Plans sponsored by any member of the Restricted Group.
“Restricted Group” means, collectively, the following persons and entities—the Trustee, the Exemption-Favored Parties, us, the Master Servicers, the Special Servicers, any primary servicer, any sub-servicer, the swap counterparty, any other person considered a “sponsor” under the Exemption, each borrower, if any, with respect to Mortgage Loans constituting more than 5.0% of the Cut-off Date Pool Balance, and any and all affiliates of any of the aforementioned persons.
“Exemption” means PTE 96-22 issued to a predecessor of Wells Fargo Securities, LLC, as subsequently amended by PTE 97-34, PTE 2000-58, PTE 2002-41, PTE 2007-05 and PTE 2013-08 and as may be subsequently amended after the Closing Date.
“Exemption-Favored Party” means any of the following—
· | Wells Fargo Securities, LLC, |
· | any person directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with Wells Fargo Securities, LLC, and |
474 |
· | any member of the underwriting syndicate or selling group of which a person described in the prior two bullets is a manager or co-manager with respect to any particular Class of the Offered Certificates. |
“PTE” means prohibited transaction exemption.
Insurance Company General Accounts
Based on the reasoning of the United States Supreme Court in John Hancock Life Ins. Co. v. Harris Trust and Savings Bank, an insurance company’s general account may be deemed to include assets of the Plans investing in the general account (e.g., through the purchase of an annuity contract). Any investor that is an insurance company using the assets of an insurance company general account should note that under Section 401(c) of ERISA and regulations issued thereunder, assets of an insurance company general account will not be treated as “plan assets” for purposes of the fiduciary responsibility provisions of ERISA and Section 4975 of the Code to the extent such assets relate to contracts issued to employee benefit plans on or before December 31, 1998, if the insurer satisfies various conditions.
Any assets of an insurance company general account which support insurance policies or annuity contracts issued to Plans after December 31, 1998, or on or before that date for which the insurer does not comply with the 401(c) Regulations, may be treated as “plan assets” of such Plans. Because Section 401(c) does not relate to insurance company separate accounts, separate account assets continue to be treated as “plan assets” of any Plan that is invested in such separate account. Insurance companies contemplating the investment of general account assets in any Class of Certificates that is not rated at least “BBB-” (or the respective equivalent) by at least one Exemption Rating Agency at the time of purchase should consult with their legal counsel with respect to the applicability of Section 401(c).
Accordingly, any insurance company that acquires or holds any Offered Certificate with “plan assets” of a Plan will be deemed to have represented and warranted to us, the Trustee, the Certificate Administrator, the Master Servicers, the Special Servicers and the Trust Advisor that (1) such acquisition and holding are permissible under applicable law, satisfy the requirements of the Exemption or will not constitute or result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code, and will not subject us, the Trustee, the Certificate Administrator, the Master Servicers, the Special Servicers or the Trust Advisor to any obligation in addition to those undertaken in the Pooling and Servicing Agreement, or (2) the source of funds used to acquire and hold such Certificates is an “insurance company general account”, as defined in DOL Prohibited Transaction Class Exemption 95-60 (“PTCE 95-60”), and the applicable conditions set forth in Sections I and III of PTCE 95-60 have been satisfied.
Special Considerations Relating to Governmental Plans
Prospective investors in the Certificates should note that the California State Teachers’ Retirement System, which is a governmental plan, owns an equity interest in the borrower with respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Gilbert Crossing. Persons who have an ongoing relationship with this governmental plan should consult with counsel regarding whether such a relationship would affect their ability to purchase and hold the Offered Certificates.
475 |
General Investment Considerations
Prospective Plan investors should consult with their legal counsel concerning the impact of ERISA, Section 4975 of the Code or any corresponding provisions of applicable federal, state or local law, the applicability of the Exemption or other exemptive relief, and the potential consequences to their specific circumstances, prior to making an investment in the Offered Certificates. Moreover, each Plan fiduciary should determine whether, under the general fiduciary standards of ERISA regarding prudent investment procedure and diversification, an investment in the Offered Certificates is appropriate for the Plan, taking into account the overall investment policy of the Plan and the composition of the Plan’s investment portfolio. A fiduciary of a governmental plan or church plan not subject to ERISA or Section 4975 of the Code should make its own determination as to the need for and the availability of any exemptive relief under any applicable federal, state or local law.
Any sale of Offered Certificates to a plan does not constitute any representation or warranty by the Depositor, any borrower, the Trustee, the Certificate Administrator, the Special Servicers, the Master Servicers, any underwriter or the Trust that an investment in the Offered Certificates meets relevant legal requirements with respect to investments by plans generally or any particular plan, or that such investment is appropriate for plans generally or any particular plan.
LEGAL INVESTMENT
No Class of the Offered Certificates will constitute “mortgage related securities” for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended (“SMMEA”). The appropriate characterization of the Offered Certificates under various legal investment restrictions, and thus the ability of investors subject to these restrictions to purchase the Offered Certificates, are subject to significant interpretive uncertainties.
As of the closing date, the Issuing Entity will not be required to register as an investment company under the Investment Company Act. The Issuing Entity will be relying upon an exclusion or exemption under the Investment Company Act contained in Section 3(c)(5) of the Investment Company Act or Rule 3a-7 under the Investment Company Act, although there may be additional exclusions or exemptions available to the Issuing Entity. The issuing entity is being structured so as not to constitute a “covered fund” for purposes of the Volcker Rule.
No representations are made as to the proper characterization of the Offered Certificates for legal investment, financial institution regulatory or other purposes, or as to the ability of particular investors to purchase the Offered Certificates under applicable legal investment restrictions. Further, any rating of a Class of Offered Certificates below an “investment grade” rating (i.e., lower than the top four rating categories) by a Rating Agency or another NRSRO, whether initially or as a result of a ratings downgrade, may adversely affect the ability of an investor to purchase or retain, or otherwise impact the regulatory characteristics of, that Class. The uncertainties described above (and any unfavorable future determinations concerning the legal investment or financial institution regulatory characteristics of the Offered Certificates) may adversely affect the liquidity and market value of the Offered Certificates. See “Risk Factors—Risks Related to the Offered Certificates—Market Considerations and Limited Liquidity”.
Accordingly, all investors whose investment activities are subject to legal investment laws and regulations, regulatory capital requirements, or review by regulatory authorities
476 |
should consult with their own legal advisors in determining whether, and to what extent, the Offered Certificates will constitute legal investments for them or are subject to investment, capital or other regulatory restrictions.
See “Legal Investment” in the accompanying prospectus.
LEGAL MATTERS
The validity of the Offered Certificates and certain federal income tax matters will be passed upon for the Depositor by Cadwalader, Wickersham & Taft LLP, Charlotte, North Carolina, and certain other legal matters will be passed upon for the underwriters by Sidley Austin LLP, New York, New York.
RATINGS
It is a condition to their issuance that the respective Classes of Offered Certificates receive investment grade credit ratings from three NRSROs engaged by the Depositor to rate the offered certificates (each a “Rating Agency” and collectively, the “Rating Agencies”).
The ratings on the Offered Certificates address the likelihood of—
· | the timely receipt by their holders of all distributions of interest to which they are entitled on each distribution date, and |
· | except in the case of the Class X-A and X-B Certificates, the ultimate receipt by their holders of all distributions of principal to which they are entitled on or before the distribution date in June 2048. |
The ratings on the Offered Certificates take into consideration—
· | the credit quality of the Mortgage Loans, |
· | structural and legal aspects associated with the Offered Certificates, and |
· | the extent to which the payment stream from the Mortgage Loans is adequate to make distributions of interest and principal required under the Offered Certificates. |
The ratings on the respective Classes of Offered Certificates do not represent any assessment of—
· | the tax attributes of the Offered Certificates or of the Trust Fund, |
· | whether or to what extent prepayments of principal may be received on the Mortgage Loans, |
· | the likelihood, timing or frequency of prepayments of principal on the Mortgage Loans, |
· | the degree to which the amount or frequency of prepayments of principal on the Mortgage Loans might differ from those originally anticipated, |
· | whether or to what extent the interest distributable on any Class of Offered Certificates may be reduced in connection with Net Aggregate Prepayment Interest |
477 |
Shortfalls (or analogous amounts in connection with balloon payments) or whether any compensating interest payments will be made, and
· | whether and to what extent Default Interest will be received. |
A security rating does not represent any assessment of the yield to maturity that investors may experience in the event of rapid prepayments and/or other liquidations of the Mortgage Loans. In general, the ratings on the Offered Certificates address credit risk and not prepayment risk. In addition, the ratings do not represent an assessment of the yield to maturity that investors may experience or the possibility that the holders of the Class X-A or X-B Certificates might not fully recover their initial investments in the event of delinquencies or defaults or rapid prepayments on the Mortgage Loans (including both voluntary and involuntary prepayments) or the application of any Realized Losses. In the event that holders of such Certificates do not fully recover their investment as a result of rapid principal prepayments on the Mortgage Loans, all amounts “due” to such holders will nevertheless have been paid, and such result is consistent with the ratings assigned to such Certificates. The notional amounts of the Class X-A and X-B Certificates on which interest is calculated may be reduced by the allocation of realized losses and prepayments, whether voluntary or involuntary. The ratings do not address the timing or magnitude of reductions of such notional amounts, but only the obligation to distribute interest timely on such notional amounts as so reduced from time to time. Therefore, the ratings of the Class X-A and X-B Certificates should be evaluated independently from similar ratings on other types of securities.
Any of the three (3) nationally recognized statistical rating organizations that we hired may issue unsolicited credit ratings on one or more classes of certificates that we did not hire it to rate. Additionally, other NRSROs that we have not engaged to rate the Certificates may nevertheless issue unsolicited credit ratings on one or more Classes of Certificates relying on information they receive pursuant to Rule 17g-5 or otherwise. If any such unsolicited ratings are issued, we cannot assure you that they will not be different from those ratings assigned by the Rating Agencies. The issuance of unsolicited ratings of a Class of the Certificates that are lower than the ratings assigned by the Rating Agencies may adversely impact the liquidity, market value and regulatory characteristics of that Class. As part of the process of obtaining ratings for the Certificates, the Depositor had initial discussions with and submitted certain materials to DBRS, Inc., Fitch Ratings, Inc., KBRA, Moody’s and Morningstar Credit Ratings, LLC. Based on preliminary feedback from those five (5) NRSROs at that time, the Depositor hired the Rating Agencies to rate the Certificates and not the other two NRSROs due, in part, to those NRSROs’ initial subordination levels for the various Classes of Certificates. Had the Depositor selected such other NRSROs to rate the Certificates, we cannot assure you as to the ratings that such other NRSROs would ultimately have assigned to the Certificates. In the case of Moody’s, the Depositor only requested ratings for certain Classes of Certificates, due in part to the initial subordination levels provided by Moody’s for the Classes of Certificates. If the Depositor had selected Moody’s to rate those other Classes of Certificates not rated by it, its ratings of those other Certificates may have been different, and potentially lower, than those ratings ultimately assigned to those certificates by Fitch and KBRA. Although unsolicited ratings may be issued by any NRSRO, an NRSRO might be more likely to issue an unsolicited rating if it was not selected after having provided preliminary feedback to the Depositor.
Neither the Depositor nor any other person or entity will have any duty to notify you if any such other NRSRO issues, or delivers notice of its intention to issue, unsolicited ratings on one or more Classes of Certificates after the date of this free writing prospectus. In no event will ratings confirmation from any such other NRSRO (except insofar as the matter
478 |
involves a Mortgage Loan in a loan combination and such other rating organization is hired to rate the securities backed by the related Pari Passu Companion Loan) be a condition to any action, or the exercise of any right, power or privilege by any person or entity, under the Pooling and Servicing Agreement.
Furthermore, the SEC may determine that any or all of the Rating Agencies no longer qualifies as an NRSRO, or is no longer qualified to rate the Certificates, and that determination may have an adverse effect on the liquidity, market value and regulatory characteristics of the Certificates.
On or before the Closing Date, the Depositor will prepay fees for ongoing ratings surveillance to each of the Rating Agencies, and anticipates that they will perform ratings surveillance with respect to their ratings of the Offered Certificates for as long as the Offered Certificates remain outstanding. However, the Depositor has no obligation and no ability to ensure that any Rating Agency performs ratings surveillance. In addition, one or more of the Rating Agencies may cease to perform ratings surveillance on one or more Classes of Offered Certificates if the information furnished to that Rating Agency is insufficient to allow it to continue to perform ratings surveillance.
For additional information, please see “Ratings” in the accompanying prospectus.
479 |
INDEX OF DEFINED TERMS
2 | Bella Luna / San Lucas | |||||
Mortgaged Property | 199 | |||||
230 Chattel Mortgagee | 207 | Bella Luna / San Lucas | ||||
230 Garth Road Owners, Inc. | Non-Controlling Note Holder | 201 | ||||
Chattel Mortgage | 207 | Bella Luna / San Lucas | ||||
Noteholders | 199 | |||||
3 | Bella Luna / San Lucas Pari | |||||
Passu Companion Loan | 199 | |||||
30/360 Basis | 183 | Borrower Party | 358 | |||
321 Chattel Mortgagee | 207 | Brickyard Square Controlling | ||||
321 West 90th St. Owners | Note Holder | 197 | ||||
Corp. Chattel Mortgage | 207 | Brickyard Square | ||||
321 West 90th St. Owners | Intercreditor Agreement | 195 | ||||
Corp. Second Priority LOC | 207 | Brickyard Square Loan | ||||
Combination | 195 | |||||
A | Brickyard Square Mortgage | |||||
Loan | 195 | |||||
Acceptable Insurance Default | 424 | Brickyard Square Mortgaged | ||||
Actual/360 Basis | 182 | Property | 195 | |||
Additional Servicer | 460 | Brickyard Square | ||||
Additional Trust Fund Expense | 337 | Non-Controlling Note Holder | 197 | |||
Administrative Fee Rate | 322 | Brickyard Square Noteholders | 195 | |||
Adverse Grantor Trust Event | 239 | Brickyard Square Pari Passu | ||||
Adverse REMIC Event | 239 | Companion Loan | 195 | |||
Affected Investor | 75 | |||||
Anticipated Repayment Date | 194 | C | ||||
Appraisal Institute | 245 | |||||
Appraisal Reduction Amount | 436 | Cabi | 218 | |||
Appraisal Trigger Event | 438 | Certificate Administrator | 287 | |||
Appraisal-Reduced Interest | Certificate Administrator’s | |||||
Amount | 334 | Website | 354 | |||
ARD Loan | 194 | Certificateholder | 309 | |||
Assessment of Compliance | 460 | Certificates | 309 | |||
Assumption Application Fees | 399 | Class | 309 | |||
Assumption Fees | 399 | Class A-4FX Regular Interest | 310 | |||
Attestation Report | 461 | Class A-S component | 310 | |||
Authorized Collection Account | Class A-S Regular Interest | 310 | ||||
Withdrawal | 439 | Class A-SB Planned Principal | ||||
Available Distribution Amount | 329 | Balance | 327 | |||
Class B component | 310 | |||||
B | Class B Regular Interest | 310 | ||||
Class C component | 310 | |||||
Base Interest Fraction | 330 | Class C Regular Interest | 310 | |||
Bella Luna / San Lucas | Clearstream | 62, 316 | ||||
Controlling Note Holder | 200 | Closing Date | 242 | |||
Bella Luna / San Lucas | CMBS | 296 | ||||
Intercreditor Agreement | 199 | Collection Account | 439 | |||
Bella Luna / San Lucas Loan | Collective Consultation Period | 412 | ||||
Combination | 199 | Complaint | 288 | |||
Bella Luna / San Lucas | Control-Eligible Certificates | 324 | ||||
Mortgage Loan | 199 | Coop-Rental Value | 161 |
480 |
Corrected Mortgage Loan | 390 | Exchangeable Certificates | 310 | |||
CRE Loans | 251 | Excluded Loan | 411 | |||
CREFC® | 358 | Exemption | 474 | |||
CREFC® Intellectual Property | Exemption Rating Agency | 473 | ||||
Royalty License Fee | 322 | Exemption-Favored Party | 474 | |||
CREFC® Intellectual Property | ||||||
Royalty License Fee Rate | 322 | F | ||||
CREFC® Reports | 358 | |||||
CRR | 75 | FDEP | 226 | |||
Custodian | 288 | FDIC | 101, 301 | |||
Cut-off Date | 171 | FEMA | 214 | |||
Cut-off Date Pool Balance | 171 | FIEL | xi | |||
Cut-off Date Principal Balance | 171 | Final Asset Status Report | 409 | |||
Fitch | 291 | |||||
D | FSMA | xi | ||||
Funds | 301 | |||||
Default Interest | 238 | |||||
Defaulted Mortgage Loan | 323 | G | ||||
Demand Entities | 252 | |||||
Demand Letter | 254 | General Master Servicer | 365 | |||
Depositor | 241 | Government Securities | 183 | |||
Designated Sub-Servicer | 460 | Grantor Trust | 466 | |||
Designated Trust Advisor | ||||||
Expenses | 340 | H | ||||
Dexia | 253 | |||||
Disclosable Special Servicer | High Net Worth Companies, | |||||
Fees | 396 | Unincorporated | ||||
Discount Rate | 330 | Associations, Etc. | x | |||
Distribution Account | 313 | Hutch | 214 | |||
Distribution Date Statement | 351 | |||||
Dodd-Frank Act | 76 | I | ||||
DOL | 472 | |||||
Doremus Newark | 215 | ICIP | 222 | |||
DTC | 62 | Initial Rate | 194 | |||
Due Date | 181 | Insurance Rating | ||||
Due Diligence Requirement | 75 | Requirements | 7 | |||
Interest Reserve Account | 315 | |||||
E | Interested Person | 446 | ||||
Investment Company Act | 76 | |||||
EDGAR | 359 | Investor Certification | 358 | |||
EEA | ix, 75 | Investor Q&A Forum | 356 | |||
EIP | 215 | Investor Registry | 356 | |||
El Sid | 215 | IRS | 73 | |||
ERISA | 471 | Issuing Entity | 240 | |||
ERISA Plan | 472 | |||||
ESA | 225 | K | ||||
EU Prospectus Directive | x | |||||
Euroclear | 62, 316 | KBRA | 365 | |||
Excess Interest | 312 | |||||
Excess Trust Advisor | L | |||||
Expenses | 340 | |||||
Exchange Act | 252 | LDEQ | 225 | |||
Exchange Date | 312 | Lennar | 301 | |||
Exchange Proportion | 312 | LIBOR | 144 | |||
Liquidation Fee Rate | 395 | |||||
Loan Combination | 171 | |||||
Lock-out Period | 183 | |||||
Loss of Value Payment | 239 |
481 |
LUST | 226 | P | ||||
M | Pari Passu Companion Loan | 171 | ||||
Pari Passu Mortgage Loan | 171 | |||||
Majority Subordinate | Participants | 316 | ||||
Certificateholder | 410 | Party in Interest | 472 | |||
Master Servicer | 289, 292 | PCE | 225 | |||
Material Action | 432 | Permitted Investments | 314 | |||
Midland | 296 | Permitted Special | ||||
Modification Fees | 400 | Servicer/Affiliate Fees | 396 | |||
Moody’s | 291 | PL | 228 | |||
Morningstar | 291 | Plan | 472 | |||
Mortgage Loan | 171 | PML | 228 | |||
Mortgage Loan Purchase | Pooling and Servicing | |||||
Agreement | 234 | Agreement | 385 | |||
Mortgage Loan Sellers | 242 | PPA | 291 | |||
Mortgage Loans | 171 | Prepayment Interest Excess | 318 | |||
Mortgage Pass-Through Rate | 321 | Prepayment Interest Shortfall | 318 | |||
Mortgage Pool | 171 | Prepayment Premium | 331 | |||
Mortgaged Property | 171 | Principal Balance Certificates | 310 | |||
Principal Distribution Amount | 322 | |||||
N | Privileged Information | 416 | ||||
Privileged Person | 356 | |||||
National Cooperative | PTCE 95-60 | 475 | ||||
Bank, N.A. Data Tape | 284 | PTE | 475 | |||
National Cooperative | Purchase Price | 238 | ||||
Bank, N.A. Deal Team | 284 | |||||
Net Aggregate Prepayment | Q | |||||
Interest Shortfall | 318 | |||||
Non-Serviced Loan | Qualification Criteria | 250, 261, 273 | ||||
Combination | 172 | Qualified Insurer | 426 | |||
Non-Serviced Pari Passu | Qualified Replacement Special | |||||
Companion Loan | 172 | Servicer | 422 | |||
Non-Serviced Pari Passu | ||||||
Mortgage Loan | 172 | R | ||||
NRSRO | 356 | |||||
NRSRO Certification | 357 | Rating Agencies | 477 | |||
NS | 215 | Rating Agency | 477 | |||
NYSDEC | 228 | Rating Agency Confirmation | 450 | |||
RCM | 301 | |||||
O | Realized Losses | 336 | ||||
Recovered Interest Amounts | 319 | |||||
OCC | 242 | Regular Interests | 310 | |||
Offered Certificates | 309 | Regulation AB | 461 | |||
Offsetting Modification Fees | 400 | REIT | 468 | |||
Originator | 253 | Release Property | 190 | |||
Originators | 242 | Relevant Member State | ix | |||
Other Certificate | Relevant Persons | x | ||||
Administrator | 196, 199, 361 | REMIC Pool | 466 | |||
Other Master Servicer | 195, 199, 337 | REO Account | 446 | |||
Other Pooling and Servicing | REO Mortgage Loan | 392 | ||||
Agreement | 196, 199 | REO Property | 309 | |||
Other Special Servicer | 195, 199, 401 | Requesting Party | 448 | |||
Other Trust Advisor | 196, 199, 339 | Required Claims-Paying | ||||
Other Trustee | 196, 199, 366 | Ratings | 426 |
482 |
Responsible Repurchase Party | 236 | Trust Advisor Expenses | 339 | |||
Restricted Group | 474 | Trust Fund | 171 | |||
Retention Requirement | 75 | Trustee | 286 | |||
Revised Rate | 194 | |||||
Rialto | 301 | U | ||||
Rialto Mortgage | 254 | |||||
Rialto Mortgage Data Tape | 260 | U.S. Bank | 253 | |||
Rialto Mortgage Loans | 254 | UCC | 292 | |||
Rialto Mortgage Review Team | 259 | Uncovered Amount | 441 | |||
RMBS | 288 | UPB | 291 | |||
Rule 15Ga-1 | 252 | |||||
Rule 17g-5 | 344 | V | ||||
Rule 17g-5 Information | ||||||
Provider | 450 | Value Co-op Basis | 208 | |||
Rule 17g-5 Information | VCP | 227 | ||||
Provider’s Website | 451 | Velocity | 227 | |||
Volcker Rule | 76 | |||||
S | ||||||
W | ||||||
S&P | 291 | |||||
SEC | 240 | WAC Rate | 321 | |||
SEL | 228 | Wachovia | 289 | |||
Senior Consultation Period | 412 | Wachovia Bank | 242 | |||
Servicer Termination Event | 451 | WDCPF | 270 | |||
Servicing Advances | 403 | WDCPF I WF | 270 | |||
Servicing Function Participant | 460 | WDCPF I WF Data Tape | 272 | |||
Servicing Standard | 386 | WDCPF I WF Mortgage Loans | 272 | |||
Servicing Transfer Event | 388 | WDCPF Review Team | 272 | |||
Silverpeak | 261 | Wells Fargo Bank | 242 | |||
Silverpeak Data Tape | 268 | Wells Fargo Bank Data Tape | 249 | |||
Silverpeak Mortgage Loans | 261 | Wells Fargo Bank Deal Team | 249 | |||
Silverpeak Review Team | 268 | WFCM 2015-C28 Certificate | ||||
Similar Requirements | 75 | Administrator | 196 | |||
SMMEA | 476 | WFCM 2015-C28 Depositor | 195 | |||
Special Servicer | 296 | WFCM 2015-C28 Master | ||||
Specially Designated | Servicer | 195 | ||||
Mortgage Loan Documents | 235 | WFCM 2015-C28 Pooling and | ||||
Specially Serviced Mortgage | Servicing Agreement | 172 | ||||
Loan | 388 | WFCM 2015-C28 Special | ||||
Sponsor | 242 | Servicer | 195 | |||
Sponsors | 242 | WFCM 2015-C28 Trust | ||||
Standard Qualifications | 2 | Advisor | 196 | |||
Subordinate Class | 410 | WFCM 2015-C28 Trustee | 196 | |||
Subordinate Class | WFCM 2015-LC20 Certificate | |||||
Representative | 411 | Administrator | 199 | |||
Subordinate Control Period | 410 | WFCM 2015-LC20 Depositor | 199 | |||
Sub-Servicing Entity | 452 | WFCM 2015-LC20 Master | ||||
Servicer | 199 | |||||
T | WFCM 2015-LC20 Pooling and | |||||
Servicing Agreement | 172 | |||||
TILC | 232 | WFCM 2015-LC20 Special | ||||
Trimont | 304 | Servicer | 199 | |||
Trust | 240 | WFCM 2015-LC20 Trust | ||||
Trust Advisor | 304 | Advisor | 199 | |||
WFCM 2015-LC20 Trustee | 199 |
483 |
Woodbridge | 254 | Y | ||||
Workout Fee Projected | ||||||
Amount | 394 | Yield Maintenance Charge | 331 | |||
WTNA | 286 | Yield Maintenance Discount | ||||
Rate | 187 | |||||
YTD | 291 |
484 |
Annex A-1
Certain Characteristics of the Mortgage Loans
and Mortgaged Properties
[THIS PAGE INTENTIONALLY LEFT BLANK.]
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES | ||||||||||||||||||||||||||
Mortgage Loan Number | Property Name | Mortgage Loan Seller(1) | Cross Collateralized and Cross Defaulted Loan Flag | Address | City | State | Zip Code | General Property Type | Specific Property Type | Year Built | Year Renovated | Number of Units(2) | Unit of Measure | |||||||||||||
1 | Hutchinson Metro Center I | WFB | 1200 Waters Place | Bronx | NY | 10461 | Office | Suburban | 1974 | 2006 | 422,452 | Sq. Ft. | ||||||||||||||
2 | Cathedral Place | WDCPF | 555 & 535 East Wells Street | Milwaukee | WI | 53202 | Office | CBD | 2003 | 219,778 | Sq. Ft. | |||||||||||||||
3 | 150 Royall Street | WFB | 150 Royall Street | Canton | MA | 02021 | Office | Suburban | 1985 | 2007 | 259,341 | Sq. Ft. | ||||||||||||||
4 | WPC Self Storage Portfolio VII | WFB | Various | Various | Various | Various | Self Storage | Self Storage | Various | Various | 650,686 | Sq. Ft. | ||||||||||||||
4.01 | Extra Space Louisville KY | WFB | 11440 Blankenbaker Access Drive | Louisville | KY | 40299 | Self Storage | Self Storage | 1998 | 2008 | 103,497 | Sq. Ft. | ||||||||||||||
4.02 | Extra Space Las Vegas NV | WFB | 3250 North Buffalo Drive | Las Vegas | NV | 89129 | Self Storage | Self Storage | 1996 | 74,045 | Sq. Ft. | |||||||||||||||
4.03 | CubeSmart Joan Panama City Beach FL | WFB | 2529 Joan Avenue | Panama City Beach | FL | 32408 | Self Storage | Self Storage | 1996 | 86,426 | Sq. Ft. | |||||||||||||||
4.04 | CubeSmart Tallahassee FL | WFB | 7963 Apalachee Parkway | Tallahassee | FL | 32311 | Self Storage | Self Storage | 1999 | 118,780 | Sq. Ft. | |||||||||||||||
4.05 | Extra Space Lady Lake FL | WFB | 520 County Road 466 | Lady Lake | FL | 32159 | Self Storage | Self Storage | 2010 | 68,750 | Sq. Ft. | |||||||||||||||
4.06 | CubeSmart Crystal Lake IL | WFB | 7209 Teckler Boulevard | Crystal Lake | IL | 60014 | Self Storage | Self Storage | 1976 | 58,157 | Sq. Ft. | |||||||||||||||
4.07 | CubeSmart Hutchinson Panama City Beach FL | WFB | 11037 Hutchison Boulevard | Panama City Beach | FL | 32407 | Self Storage | Self Storage | 1997 | 42,301 | Sq. Ft. | |||||||||||||||
4.08 | Extra Space Lilburn GA | WFB | 4400 Lawrenceville Highway | Lilburn | GA | 30047 | Self Storage | Self Storage | 1988 | 66,372 | Sq. Ft. | |||||||||||||||
4.09 | Extra Space Stockbridge GA | WFB | 59 Banks Road | Stockbridge | GA | 30281 | Self Storage | Self Storage | 2003 | 32,358 | Sq. Ft. | |||||||||||||||
5 | Queens' MarketPlace | WFB | 69-201 Waikoloa Beach Drive | Waikoloa | HI | 96738 | Retail | Anchored | 2007 | 130,925 | Sq. Ft. | |||||||||||||||
6 | El Sol Brillante and Laguna Del Sol Apartments | RMF | Various | Houston | TX | 77083 | Multifamily | Garden | Various | 2015 | 792 | Units | ||||||||||||||
6.01 | Laguna Del Sol Apartments | RMF | 6301 Sierra Blanca Drive | Houston | TX | 77083 | Multifamily | Garden | 1983 | 2015 | 400 | Units | ||||||||||||||
6.02 | El Sol Brillante Apartments | RMF | 6403 Sierra Blanca Drive | Houston | TX | 77083 | Multifamily | Garden | 1981 | 2015 | 392 | Units | ||||||||||||||
7 | Country Club Center | WFB | 19950 West Country Club Drive | Aventura | FL | 33180 | Office | Suburban | 2004 | 2006 | 64,971 | Sq. Ft. | ||||||||||||||
8 | Parkway Crossing East Shopping Center | WFB | 2300-2485 Prince William Parkway | Woodbridge | VA | 22192 | Retail | Anchored | 2004 | 143,330 | Sq. Ft. | |||||||||||||||
9 | Olmsted Plaza Shopping Center | SPREF | 4650 Great Northern Boulevard | North Olmsted | OH | 44070 | Retail | Anchored | 1969 | 255,902 | Sq. Ft. | |||||||||||||||
10 | Hall Office Park | WFB | 2601 Network Boulevard | Frisco | TX | 75034 | Office | Suburban | 2000 | 142,761 | Sq. Ft. | |||||||||||||||
11 | Dulles North Corporate Parks | WFB | Various | Sterling | VA | 20166 | Various | Various | Various | Various | 159,601 | Sq. Ft. | ||||||||||||||
11.01 | Dulles North Corporate Park 5 | WFB | 22451 Shaw Road | Sterling | VA | 20166 | Other | Data Center | 2000 | 2006 | 80,391 | Sq. Ft. | ||||||||||||||
11.02 | Dulles North Corporate Park 2 | WFB | 22685 Holiday Park Drive | Sterling | VA | 20166 | Office | Suburban | 1999 | 79,210 | Sq. Ft. | |||||||||||||||
12 | Coastal Village Apartments | SPREF | 19401 Skidmore Way | Fort Myers | FL | 33967 | Multifamily | Student Housing | 2004 | 800 | Beds | |||||||||||||||
13 | Foothills Park Place | WFB | 4802, 4810, 4910, 4940, 5010, & 5030 East Ray Road | Phoenix | AZ | 85044 | Retail | Shadow Anchored | 1991 | 2009 | 132,496 | Sq. Ft. | ||||||||||||||
14 | Smiths Medical | RMF | 6000 Nathan Lane | Plymouth | MN | 55442 | Office | Suburban | 1999 | 182,250 | Sq. Ft. | |||||||||||||||
15 | Hunterstone Apartments | RMF | 1001 Hunterstone Drive | Leland | NC | 28451 | Multifamily | Garden | 2005 | 288 | Units | |||||||||||||||
16 | Magnolia Marketplace | WDCPF | 2900 South Claiborne Avenue | New Orleans | LA | 70115 | Retail | Anchored | 2015 | 97,267 | Sq. Ft. | |||||||||||||||
17 | Norfolk Commerce Park | WDCPF | 5425 Robin Hood Road | Norfolk | VA | 23513 | Mixed Use | Office/Industrial | 1983 | 331,966 | Sq. Ft. | |||||||||||||||
18 | Summer Bend Apartments | SPREF | 1301 Meadow Creek Drive | Irving | TX | 75038 | Multifamily | Garden | 1984 | 300 | Units | |||||||||||||||
19 | Baywoods of Annapolis | NCB | 7101 Bay Front Drive | Annapolis | MD | 21403 | Multifamily | Cooperative/Residential Healthcare Facility | 2000 | 147 | Units | |||||||||||||||
20 | Rock Hill Hampton Inn | WFB | 2111 Tabor Drive | Rock Hill | SC | 29730 | Hospitality | Limited Service | 1992 | 2008 | 163 | Rooms | ||||||||||||||
21 | Louisville Plaza | RMF | 1335, 1345, 1349, 1355, 1375, and 1387 East South Boulder Road | Louisville | CO | 80027 | Retail | Anchored | 1991 | 194,430 | Sq. Ft. | |||||||||||||||
22 | Marquis Place | SPREF | 1000 Marquis Place | Murrysville | PA | 15632 | Multifamily | Garden | 2014 | 118 | Units | |||||||||||||||
23 | Riverside Technology Park A & B | WFB | 8435 Progress Drive; 8445 Spires Way | Frederick | MD | 21701 | Industrial | Flex | 2005 | 165,480 | Sq. Ft. | |||||||||||||||
24 | Maricopa Fiesta | RMF | 20928-21164 North John Wayne Parkway | Maricopa | AZ | 85139 | Retail | Anchored | 2004 | 92,936 | Sq. Ft. | |||||||||||||||
25 | Dunwoody Place | WFB | 8725 Roswell Road | Sandy Springs | GA | 30350 | Retail | Anchored | 1995 | 103,053 | Sq. Ft. | |||||||||||||||
26 | Jackson Square Apartments | SPREF | 2199 North French Road | Getzville | NY | 14068 | Multifamily | Garden | 1978 | 160 | Units | |||||||||||||||
27 | Shops at Doral | RMF | 10720 Northwest 74th Street | Doral | FL | 33178 | Retail | Shadow Anchored | 2008 | 2012 | 27,839 | Sq. Ft. | ||||||||||||||
28 | Solano Apartments | SPREF | 535 West Nasa Road 1 | Webster | TX | 77598 | Multifamily | Garden | 1966 | 262 | Units | |||||||||||||||
29 | Riverchase Apartments | RMF | 2730 Riverchase Drive | Indianapolis | IN | 46214 | Multifamily | Garden | 2001 | 216 | Units | |||||||||||||||
30 | Old Mills | RMF | 10905 North Mill Court | Omaha | NE | 68154 | Multifamily | Garden | 1972 | 248 | Units | |||||||||||||||
31 | Ozinus Realty Property Portfolio | WDCPF | Various | Various | Various | Various | Various | Various | Various | Various | 406,436 | Sq. Ft. | ||||||||||||||
31.01 | Shiloh Crossing | WDCPF | 6205 & 6215 Shiloh Crossing | Alpharetta | GA | 30005 | Industrial | Flex | 2007 | 71,640 | Sq. Ft. | |||||||||||||||
31.02 | Texas Star | WDCPF | 1110, 1114, 1118 South Airport Circle, 1205 Texas Star Parkway | Euless | TX | 76040 | Industrial | Flex | 1984 | 78,423 | Sq. Ft. | |||||||||||||||
31.03 | Pitney Bowes | WDCPF | 12050 49th Street North | Pinellas Park | FL | 33762 | Industrial | Warehouse | 1998 | 92,659 | Sq. Ft. | |||||||||||||||
31.04 | Towne Crest Village | WDCPF | 2081 Jonesboro Road | McDonough | GA | 30253 | Retail | Unanchored | 2005 | 19,955 | Sq. Ft. | |||||||||||||||
31.05 | Eagle Plaza | WDCPF | 1900 Oak Grove Boulevard | Lutz | FL | 33559 | Retail | Unanchored | 2004 | 29,695 | Sq. Ft. | |||||||||||||||
31.06 | Palmetto | WDCPF | 2853-2861 Work Drive | Fort Myers | FL | 33916 | Industrial | Warehouse | 1971 | 63,164 | Sq. Ft. | |||||||||||||||
31.07 | Hamlin | WDCPF | 1408, 1424 Hamlin Avenue & 2013 Murcott Drive | Saint Cloud | FL | 34771 | Industrial | Flex | 2004 | 50,900 | Sq. Ft. | |||||||||||||||
32 | Brickyard Square | RMF | 24 Calef Highway | Epping | NH | 03042 | Retail | Anchored | 2011 | 173,756 | Sq. Ft. | |||||||||||||||
33 | Dos Santos Apartments | WFB | 3541 Peerless Place | El Paso | TX | 79925 | Multifamily | Garden | 1984 | 274 | Units | |||||||||||||||
34 | Villa Bella | RMF | 15894 19 Mile Road | Clinton Township | MI | 48038 | Multifamily | Independent Living | 2007 | 128 | Units | |||||||||||||||
35 | Bayview Office Building | WFB | 15550 Lightwave Drive | Clearwater | FL | 33760 | Office | Suburban | 1998 | 94,144 | Sq. Ft. | |||||||||||||||
36 | Casa Nube | RMF | 9700 Court Glen Drive | Houston | TX | 77099 | Multifamily | Garden | 1982 | 373 | Units | |||||||||||||||
37 | Homewood Suites - Tallahassee | WFB | 2987 Apalachee Parkway | Tallahassee | FL | 32301 | Hospitality | Limited Service | 2002 | 94 | Rooms | |||||||||||||||
38 | San Mateo Apartments | WFB | 9300 Viscount Boulevard | El Paso | TX | 79925 | Multifamily | Garden | 1973 | 248 | Units | |||||||||||||||
39 | Brittany Bay II | WDCPF | 14925 Lighthouse Road | Naples | FL | 34119 | Multifamily | Garden | 2003 | 208 | Units | |||||||||||||||
40 | Nexus Town Center | WFB | 3400, 3410, 3430, 3450, 3470-3490 La Sierra Avenue | Riverside | CA | 92503 | Retail | Anchored | 1988 | 2007 | 55,779 | Sq. Ft. | ||||||||||||||
41 | Cathedral Place - Parking | WDCPF | 520 East Mason Street | Milwaukee | WI | 53202 | Other | Parking Garage | 2003 | 941 | Spaces | |||||||||||||||
42 | Indiana Village | SPREF | 701 North Indiana Avenue | Lubbock | TX | 79415 | Multifamily | Garden | 1982 | 288 | Units | |||||||||||||||
43 | Fahrens Park Plaza | WFB | 3376 North State Highway 59 | Merced | CA | 95348 | Mixed Use | Office/Retail | 2008 | 87,735 | Sq. Ft. | |||||||||||||||
44 | Causeway Corporate Centre | RMF | 1800 Southeast 10th Avenue | Fort Lauderdale | FL | 33316 | Office | Suburban | 2003 | 46,116 | Sq. Ft. | |||||||||||||||
45 | TownePlace Suites St. George by Marriott | SPREF | 251 South 1470 East | Saint George | UT | 84790 | Hospitality | Extended Stay | 2008 | 2015 | 84 | Rooms | ||||||||||||||
46 | IRG - Ellsworth Bailey Saratoga | WFB | Various | Various | OH | Various | Industrial | Warehouse | Various | Various | 281,321 | Sq. Ft. | ||||||||||||||
46.01 | Saratoga II | WFB | 3021 Saratoga Avenue Southwest | Canton | OH | 44706 | Industrial | Warehouse | 2001 | 102,000 | Sq. Ft. | |||||||||||||||
46.02 | Saratoga I | WFB | 3026 Saratoga Avenue Southwest | Canton | OH | 44706 | Industrial | Warehouse | 2001 | 82,877 | Sq. Ft. | |||||||||||||||
46.03 | Ellsworth Bailey Lordstown | WFB | 1789 Ellsworth Bailey Road | Warren | OH | 44481 | Industrial | Warehouse | 1994 | 2012 | 96,444 | Sq. Ft. | ||||||||||||||
47 | 39-60 54th Street Owners, Inc. | NCB | 39-60 54th Street | Woodside | NY | 11377 | Multifamily | Cooperative | 1961 | 2010 | 222 | Units | ||||||||||||||
48 | Courtyard by Marriott - Shawnee | SPREF | 17250 Midland Drive | Shawnee | KS | 66217 | Hospitality | Full Service | 2004 | 2015 | 90 | Rooms | ||||||||||||||
49 | Athens Gate Apartments | WFB | 4554 Hercules Avenue | El Paso | TX | 79904 | Multifamily | Garden | 1977 | 233 | Units | |||||||||||||||
50 | Sand Pebble Apartments | WFB | 11280 Pebble Hills Boulevard | El Paso | TX | 79925 | Multifamily | Garden | 1983 | 208 | Units | |||||||||||||||
51 | Trojan Storage of Oxnard | WFB | 1801 Eastman Avenue | Oxnard | CA | 93030 | Self Storage | Self Storage | 2003 | 99,753 | Sq. Ft. | |||||||||||||||
52 | CVS - Lynn, MA | WFB | 65 Boston Street | Lynn | MA | 01904 | Retail | Single Tenant | 2014 | 12,900 | Sq. Ft. | |||||||||||||||
53 | Gilbert Crossing | WFB | 835-865 North Gilbert Road; 50 East Guadalupe Road | Gilbert | AZ | 85234 | Retail | Anchored | 2000 | 62,542 | Sq. Ft. | |||||||||||||||
54 | 1321 Harbor Bay Parkway | WFB | 1321 Harbor Bay Parkway | Alameda | CA | 94502 | Office | Suburban | 1984 | 2014 | 50,177 | Sq. Ft. | ||||||||||||||
55 | Casa Cruz | RMF | 6727 Telephone Road | Houston | TX | 77061 | Multifamily | Garden | 1972 | 262 | Units | |||||||||||||||
56 | Best Western Plus - Windsor Gardens | RMF | 11360 U.S. Highway 1 | Palm Beach Gardens | FL | 33408 | Hospitality | Limited Service | 1990 | 2014 | 83 | Rooms | ||||||||||||||
57 | Oak Tree Plaza | RMF | 3000 Danville Boulevard | Alamo | CA | 94507 | Retail | Unanchored | 1999 | 16,533 | Sq. Ft. | |||||||||||||||
58 | Peppertree Lane Apartments | WDCPF | 2800 University Boulevard South | Jacksonville | FL | 32216 | Multifamily | Garden | 1972 | 168 | Units | |||||||||||||||
59 | 8211 Town Center Drive | WFB | 8211 Town Center Drive | Nottingham | MD | 21236 | Office | Suburban | 1988 | 1998 | 69,401 | Sq. Ft. | ||||||||||||||
60 | Staybridge Suites Indianapolis Airport | RMF | 6295 Cambridge Way | Plainfield | IN | 46168 | Hospitality | Extended Stay | 2007 | 88 | Rooms | |||||||||||||||
61 | Austin Heights Shopping Center | NCB | 1533 Austin Highway | San Antonio | TX | 78218 | Retail | Unanchored | 1984 | 2004 | 59,932 | Sq. Ft. | ||||||||||||||
62 | Walgreens - Duncanville, TX | WFB | 750 West Wheatland Road | Duncanville | TX | 75116 | Retail | Single Tenant | 2014 | 14,490 | Sq. Ft. | |||||||||||||||
63 | Trojan Storage of Roseville | WFB | 1299 Baseline Road | Roseville | CA | 95747 | Self Storage | Self Storage | 2008 | 77,740 | Sq. Ft. | |||||||||||||||
64 | Lakeside Plaza | WFB | 501 Belt Line Road | Collinsville | IL | 62234 | Retail | Anchored | 1979 | 1996 | 127,701 | Sq. Ft. | ||||||||||||||
65 | Green Acres MHP | WFB | 800 State Route 212 | Michigan City | IN | 46360 | Manufactured Housing Community | Manufactured Housing Community | 1960 | 212 | Pads | |||||||||||||||
66 | Mendicino Green Apartment Corp. | NCB | 1570 & 1600 Grand Avenue | North Baldwin | NY | 11510 | Multifamily | Cooperative | 1960 | 2011 | 107 | Units | ||||||||||||||
67 | Walgreens - Richmond Heights | RMF | 751 Richmond Road | Richmond Heights | OH | 44143 | Retail | Single Tenant | 2004 | 13,216 | Sq. Ft. | |||||||||||||||
68 | Rivertown Center | WFB | 3845 Rivertown Parkway Southwest | Grandville | MI | 49418 | Retail | Anchored | 2000 | 60,876 | Sq. Ft. | |||||||||||||||
69 | Bristol House, Inc. | NCB | 10 Nosband Avenue | White Plains | NY | 10605 | Multifamily | Cooperative | 1930 | 2000 | 71 | Units | ||||||||||||||
70 | Storaway Self Storage - Nashville | WFB | 7141 Charlotte Pike | Nashville | TN | 37209 | Self Storage | Self Storage | 2000 | 80,380 | Sq. Ft. | |||||||||||||||
71 | Bella Luna / San Lucas | SPREF | 6111 & 6160 Glenmont Drive | Houston | TX | 77081 | Multifamily | Garden | 1969 | 780 | Units | |||||||||||||||
72 | Seacoast Self Storage | RMF | 233 Route 107 | Seabrook | NH | 03874 | Self Storage | Self Storage | 1983 | 55,270 | Sq. Ft. | |||||||||||||||
73 | 230 Garth Road Owners, Inc. | NCB | 230, 240, 250 & 260 Garth Road | Scarsdale | NY | 10583 | Multifamily | Cooperative | 1963 | 1995 | 343 | Units | ||||||||||||||
74 | Comfort Suites - Near the Galleria | RMF | 6221 Richmond Avenue | Houston | TX | 77057 | Hospitality | Limited Service | 1996 | 2014 | 62 | Rooms | ||||||||||||||
75 | Sandstone Apartments | RMF | 190 North Old Corry Field Road | Pensacola | FL | 32507 | Multifamily | Garden | 1966 | 2013 | 172 | Units | ||||||||||||||
76 | Tieton Village | WFB | 3700-3710 Tieton Drive | Yakima | WA | 98902 | Retail | Anchored | 1969 | 2008 | 61,225 | Sq. Ft. | ||||||||||||||
77 | Highland Terrace Housing Development Fund Corporation | NCB | 101 Highland Avenue | Yonkers | NY | 10705 | Multifamily | Cooperative | 1969 | 2010 | 96 | Units | ||||||||||||||
78 | Cooperstown Commons Shopping Center | RMF | 5 Commons Drive | Hartwick | NY | 13326 | Retail | Anchored | 1993 | 55,489 | Sq. Ft. | |||||||||||||||
79 | Lake Lucina Shopping Center | NCB | 6044 Merrill Road | Jacksonville | FL | 32277 | Retail | Anchored | 1961 | 2010 | 54,986 | Sq. Ft. | ||||||||||||||
80 | Silver Bridge Plaza | SPREF | 305-612 Silver Bridge Plaza | Gallipolis | OH | 45631 | Retail | Anchored | 1971 | 132,148 | Sq. Ft. | |||||||||||||||
81 | Karen Gardens Apartment Corp. | NCB | 86-05 60th Road | Elmhurst | NY | 11373 | Multifamily | Cooperative | 1961 | 2007 | 67 | Units | ||||||||||||||
82 | East Haven Self Storage | RMF | 625 Main Street | East Haven | CT | 06512 | Self Storage | Self Storage | 2001 | 33,600 | Sq. Ft. | |||||||||||||||
83 | Walgreens - Milwaukee | WFB | 6442 North 76th Street | Milwaukee | WI | 53223 | Retail | Single Tenant | 2004 | 14,490 | Sq. Ft. |
A-1-1 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES | ||||||||||||||||||||||||||
Mortgage Loan Number | Property Name | Mortgage Loan Seller(1) | Cross Collateralized and Cross Defaulted Loan Flag | Address | City | State | Zip Code | General Property Type | Specific Property Type | Year Built | Year Renovated | Number of Units(2) | Unit of Measure | |||||||||||||
84 | Haggen Food & Pharmacy | SPREF | 1128 North Miller Street | Wenatchee | WA | 98801 | Retail | Single Tenant | 1991 | 2015 | 42,630 | Sq. Ft. | ||||||||||||||
85 | Sycamore Terrace | RMF | 316 & 320 Sycamore Avenue | Vista | CA | 92803 | Retail | Shadow Anchored | 2006 | 10,543 | Sq. Ft. | |||||||||||||||
86 | Ramona Plaza Shopping Center | WFB | 1411 - 1453 Main Street | Ramona | CA | 92065 | Retail | Shadow Anchored | 1980 | 21,625 | Sq. Ft. | |||||||||||||||
87 | All A/C Self Storage | RMF | 2745 Lake Worth Road | Palm Springs | FL | 33461 | Self Storage | Self Storage | 1966 | 34,345 | Sq. Ft. | |||||||||||||||
88 | Pecue MHC | WFB | 7550 Pecue Lane | Baton Rouge | LA | 70809 | Manufactured Housing Community | Manufactured Housing Community | 1983 | 140 | Pads | |||||||||||||||
89 | Regency Park Owners Corp. | NCB | 25 Lake Street | White Plains | NY | 10603 | Multifamily | Cooperative | 1969 | 2000 | 65 | Units | ||||||||||||||
90 | Storaway Self Storage - Deltona II | WFB | 2969 Howland Boulevard | Deltona | FL | 32725 | Self Storage | Self Storage | 2003 | 70,125 | Sq. Ft. | |||||||||||||||
91 | Lakewood Place Shopping Center | WFB | 15000 Detroit Avenue | Lakewood | OH | 44107 | Retail | Unanchored | 1920 | 2008 | 12,993 | Sq. Ft. | ||||||||||||||
92 | Hacienda Heights Apartments | WFB | 14960 Clark Avenue | Hacienda Heights | CA | 91745 | Multifamily | Garden | 2004 | 25 | Units | |||||||||||||||
93 | Nagle House, Inc. | NCB | 240-250 Nagle Avenue | New York | NY | 10034 | Multifamily | Cooperative | 1961 | 1997 | 179 | Units | ||||||||||||||
94 | Walgreens - Warrensburg, MO | WFB | 621 North Maguire Street | Warrensburg | MO | 64093 | Retail | Single Tenant | 2004 | 14,490 | Sq. Ft. | |||||||||||||||
95 | 230 Tenants Corporation | NCB | 230 East 50th Street | New York | NY | 10022 | Multifamily | Cooperative | 1927 | 1995 | 43 | Units | ||||||||||||||
96 | Shackelford Center | WFB | 1092, 1150 & 1160 Shackelford Road | Florissant | MO | 63031 | Retail | Anchored | 1981 | 49,635 | Sq. Ft. | |||||||||||||||
97 | De La Cruz Professional Center | WFB | 3114 Lee Boulevard | Lehigh Acres | FL | 33971 | Retail | Unanchored | 2005 | 27,980 | Sq. Ft. | |||||||||||||||
98 | Folcroft Self Storage | RMF | 1601 Delmar Drive | Folcroft | PA | 19032 | Self Storage | Self Storage | 2008 | 45,350 | Sq. Ft. | |||||||||||||||
99 | Storaway Self Storage - Palm Bay | WFB | 6120 Minton Road | Palm Bay | FL | 32907 | Self Storage | Self Storage | 2001 | 68,350 | Sq. Ft. | |||||||||||||||
100 | Bowen Tower Apartments | NCB | 6140 Raytown Road | Raytown | MO | 64133 | Multifamily | High Rise | 1963 | 2010 | 91 | Units | ||||||||||||||
101 | 321 West 90th St. Owners Corp. | NCB | 321 West 90th Street | New York | NY | 10024 | Multifamily | Cooperative | 1929 | 2003 | 50 | Units | ||||||||||||||
102 | West Friendship Shopping Center | NCB | 12800 Frederick Road | West Friendship | MD | 21794 | Retail | Unanchored | 1980 | 1988 | 18,780 | Sq. Ft. | ||||||||||||||
103 | Crestview Self Storage | WFB | 12515 East Central Avenue | Wichita | KS | 67206 | Self Storage | Self Storage | 2007 | 2015 | 59,640 | Sq. Ft. | ||||||||||||||
104 | Denn Owners Corporation | NCB | 2835 Webb Avenue | Bronx | NY | 10468 | Multifamily | Cooperative | 1957 | 1994 | 73 | Units | ||||||||||||||
105 | Moundsville Plaza | SPREF | 303 Lafayette Avenue | Moundsville | WV | 26041 | Retail | Anchored | 1974 | 105,351 | Sq. Ft. | |||||||||||||||
106 | Storaway Self Storage- Deltona I | WFB | 1381 Howland Boulevard | Deltona | FL | 32738 | Self Storage | Self Storage | 2001 | 44,105 | Sq. Ft. | |||||||||||||||
107 | Sedona Peak Apartments | WFB | 1901 Brown Street | El Paso | TX | 79902 | Multifamily | Garden | 1973 | 76 | Units | |||||||||||||||
108 | Sea Breeze Town Houses Owners, Inc. | NCB | 165 East Broadway | Long Beach | NY | 11561 | Multifamily | Cooperative | 1986 | 2000 | 16 | Units | ||||||||||||||
109 | Willow Lake Shops | NCB | 2945 and 2951 Watson Boulevard | Warner Robins | GA | 31093 | Retail | Shadow Anchored | 2007 | 24,295 | Sq. Ft. | |||||||||||||||
110 | Wickham Park Commons | WFB | 3600 North Wickham Road | Melbourne | FL | 32935 | Retail | Unanchored | 2008 | 15,218 | Sq. Ft. | |||||||||||||||
111 | Crown Pointe Plaza | NCB | 7914 Culebra Road | San Antonio | TX | 78251 | Retail | Unanchored | 1985 | 2002 | 32,789 | Sq. Ft. | ||||||||||||||
112 | Hartsdale Executive House, Inc. | NCB | 45 East Hartsdale Avenue | Hartsdale | NY | 10530 | Multifamily | Cooperative | 1961 | 84 | Units | |||||||||||||||
113 | 25 Chapel Corp. | NCB | 25 Chapel Place | Great Neck | NY | 11021 | Multifamily | Cooperative | 1965 | 2003 | 40 | Units | ||||||||||||||
114 | Market Place Village | NCB | 1660-1674 Market Place Boulevard | Cumming | GA | 30041 | Retail | Unanchored | 2008 | 14,594 | Sq. Ft. | |||||||||||||||
115 | Kingstowne Shops | WFB | 11745 Jefferson Avenue | Newport News | VA | 23606 | Retail | Anchored | 1990 | 23,326 | Sq. Ft. | |||||||||||||||
116 | 109-111 N. Broadway Apt. Corp. | NCB | 109-111 North Broadway | White Plains | NY | 10603 | Multifamily | Cooperative | 1948 | 2000 | 51 | Units | ||||||||||||||
117 | 40 Prospect Park West Owners Corp. | NCB | 40 Prospect Park West | Brooklyn | NY | 11215 | Multifamily | Cooperative | 1942 | 2007 | 55 | Units | ||||||||||||||
118 | Shops of Orland Park | WFB | 11229-11255 West 143rd Street | Orland Park | IL | 60467 | Retail | Unanchored | 2003 | 15,887 | Sq. Ft. | |||||||||||||||
119 | Victorville Retail Center | WFB | 14190 Bear Valley Road | Victorville | CA | 92392 | Retail | Unanchored | 2003 | 11,615 | Sq. Ft. | |||||||||||||||
120 | 6 West 20th St. Tenants Corp. | NCB | 6 West 20th Street | New York | NY | 10011 | Multifamily | Cooperative | 1907 | 2000 | 14 | Units | ||||||||||||||
121 | 50-22 Owners Ltd. | NCB | 50-22 40th Street | Sunnyside | NY | 11104 | Multifamily | Cooperative | 1960 | 1994 | 47 | Units | ||||||||||||||
122 | 585 McLean Owners, Inc. | NCB | 585 McLean Avenue | Yonkers | NY | 10705 | Multifamily | Cooperative | 1953 | 1999 | 41 | Units | ||||||||||||||
123 | 12 West 17th St. Tenants' Corp. | NCB | 12 West 17th Street | New York | NY | 10011 | Multifamily | Cooperative | 1911 | 2008 | 11 | Units | ||||||||||||||
124 | Gillespie Field Business Park | WFB | 1965 Gillespie Way | El Cajon | CA | 92020 | Industrial | Flex | 2004 | 17,580 | Sq. Ft. | |||||||||||||||
125 | Waters at West End, Inc. | NCB | 116-118 West End Avenue | Freeport | NY | 11520 | Multifamily | Cooperative | 1984 | 2005 | 40 | Units | ||||||||||||||
126 | Jones St. Owners Corporation | NCB | 9 Jones Street | New York | NY | 10014 | Multifamily | Cooperative | 1902 | 1999 | 7 | Units | ||||||||||||||
127 | Big Lots Plaza | WFB | 911 Woodland Boulevard | DeLand | FL | 32720 | Retail | Anchored | 1970 | 36,389 | Sq. Ft. | |||||||||||||||
128 | 30 Bond Street Owners Corp. | NCB | 30 Bond Street | New York | NY | 10012 | Multifamily | Cooperative | 1892 | 1998 | 6 | Units | ||||||||||||||
129 | 166 West 76th Apartment Corp. | NCB | 166 West 76th Street | New York | NY | 10023 | Multifamily | Cooperative | 1951 | 2014 | 34 | Units | ||||||||||||||
130 | Hanna Shoppes | WFB | 3915 Madison Avenue | Indianapolis | IN | 46227 | Retail | Unanchored | 1997 | 16,168 | Sq. Ft. | |||||||||||||||
131 | Carroll Gardens Owners, Corp. | NCB | 510-512 Kappock Street | Bronx | NY | 10463 | Multifamily | Cooperative | 1948 | 2000 | 32 | Units | ||||||||||||||
132 | 170 East 92nd Street Owners, Inc. | NCB | 170 East 92nd Street | New York | NY | 10128 | Multifamily | Cooperative | 1889 | 2014 | 18 | Units | ||||||||||||||
133 | 17 Warren Street Tenants Corporation | NCB | 17 Warren Street | New York | NY | 10007 | Multifamily | Cooperative | 1890 | 2006 | 6 | Units |
A-1-2 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES | ||||||||||||||||||||||||||||||||||||
Mortgage Loan Number | Property Name | Cut-off Date Balance Per Unit/SF(3) | Original Balance ($)(3) | Cut-off Date Balance ($)(3) | % of Aggregate Cut-off Date Balance | Maturity Date or ARD Balloon Payment ($) | ARD Loan | Origination Date | First Pay Date | Last IO Pay Date | First P&I Pay Date | Maturity Date or Anticipated Repayment Date | ARD Loan Maturity Date | Gross Mortgage Rate | Trust Advisor Fee Rate | Certificate Administrator Fee Rate | Servicing Fee | CREFC® IP Royalty License Fee Rate | ||||||||||||||||||
1 | Hutchinson Metro Center I | 237 | 100,000,000 | 100,000,000 | 8.5% | 86,924,899 | N | 5/12/2015 | 7/11/2015 | 6/11/2018 | 7/11/2018 | 6/11/2025 | 4.20000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
2 | Cathedral Place | 182 | 39,900,000 | 39,900,000 | 3.4% | 33,732,316 | N | 2/10/2015 | 4/1/2015 | 3/1/2017 | 4/1/2017 | 3/1/2025 | 4.12500% | 0.00231% | 0.00390% | 0.06000% | 0.00050% | |||||||||||||||||||
3 | 150 Royall Street | 147 | 38,187,500 | 38,187,500 | 3.2% | 34,738,587 | N | 5/27/2015 | 7/11/2015 | 6/11/2020 | 7/11/2020 | 6/11/2025 | 4.14000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
4 | WPC Self Storage Portfolio VII | 57 | 37,245,000 | 37,245,000 | 3.2% | 37,245,000 | N | 5/27/2015 | 7/11/2015 | 6/11/2025 | 6/11/2025 | 4.30000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
4.01 | Extra Space Louisville KY | 6,607,250 | 6,607,250 | 0.6% | ||||||||||||||||||||||||||||||||
4.02 | Extra Space Las Vegas NV | 6,370,000 | 6,370,000 | 0.5% | ||||||||||||||||||||||||||||||||
4.03 | CubeSmart Joan Panama City Beach FL | 6,175,000 | 6,175,000 | 0.5% | ||||||||||||||||||||||||||||||||
4.04 | CubeSmart Tallahassee FL | 4,923,750 | 4,923,750 | 0.4% | ||||||||||||||||||||||||||||||||
4.05 | Extra Space Lady Lake FL | 3,948,750 | 3,948,750 | 0.3% | ||||||||||||||||||||||||||||||||
4.06 | CubeSmart Crystal Lake IL | 2,632,500 | 2,632,500 | 0.2% | ||||||||||||||||||||||||||||||||
4.07 | CubeSmart Hutchinson Panama City Beach FL | 2,622,750 | 2,622,750 | 0.2% | ||||||||||||||||||||||||||||||||
4.08 | Extra Space Lilburn GA | 2,340,000 | 2,340,000 | 0.2% | ||||||||||||||||||||||||||||||||
4.09 | Extra Space Stockbridge GA | 1,625,000 | 1,625,000 | 0.1% | ||||||||||||||||||||||||||||||||
5 | Queens' MarketPlace | 267 | 35,000,000 | 35,000,000 | 3.0% | 35,000,000 | N | 5/21/2015 | 7/11/2015 | 6/11/2025 | 6/11/2025 | 4.13000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
6 | El Sol Brillante and Laguna Del Sol Apartments | 36,301 | 28,750,000 | 28,750,000 | 2.4% | 26,223,697 | N | 4/30/2015 | 6/6/2015 | 5/6/2020 | 6/6/2020 | 5/6/2025 | 4.30000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
6.01 | Laguna Del Sol Apartments | 14,868,672 | 14,868,672 | 1.3% | ||||||||||||||||||||||||||||||||
6.02 | El Sol Brillante Apartments | 13,881,328 | 13,881,328 | 1.2% | ||||||||||||||||||||||||||||||||
7 | Country Club Center | 416 | 27,000,000 | 27,000,000 | 2.3% | 21,749,397 | N | 6/1/2015 | 7/11/2015 | 7/11/2015 | 6/11/2025 | 4.39000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
8 | Parkway Crossing East Shopping Center | 183 | 26,250,000 | 26,216,058 | 2.2% | 20,953,455 | N | 5/1/2015 | 6/11/2015 | 6/11/2015 | 5/11/2025 | 4.13000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
9 | Olmsted Plaza Shopping Center | 100 | 25,500,000 | 25,500,000 | 2.2% | 23,181,895 | N | 4/7/2015 | 6/6/2015 | 5/6/2020 | 6/6/2020 | 5/6/2025 | 4.10000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | |||||||||||||||||||
10 | Hall Office Park | 179 | 25,500,000 | 25,500,000 | 2.2% | 21,013,831 | N | 5/29/2015 | 7/11/2015 | 6/11/2016 | 7/11/2016 | 6/11/2025 | 4.20000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
11 | Dulles North Corporate Parks | 156 | 25,000,000 | 24,956,509 | 2.1% | 18,219,576 | N | 5/6/2015 | 6/11/2015 | 6/11/2015 | 5/11/2025 | 4.31000% | 0.00231% | 0.00390% | 0.01000% | 0.00050% | ||||||||||||||||||||
11.01 | Dulles North Corporate Park 5 | 15,000,000 | 14,973,905 | 1.3% | ||||||||||||||||||||||||||||||||
11.02 | Dulles North Corporate Park 2 | 10,000,000 | 9,982,604 | 0.8% | ||||||||||||||||||||||||||||||||
12 | Coastal Village Apartments | 30,000 | 24,000,000 | 24,000,000 | 2.0% | 20,401,193 | N | 1/29/2015 | 3/6/2015 | 2/6/2017 | 3/6/2017 | 2/6/2025 | 4.33000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
13 | Foothills Park Place | 174 | 23,000,000 | 23,000,000 | 2.0% | 23,000,000 | N | 4/3/2015 | 5/11/2015 | 4/11/2025 | 4/11/2025 | 4.13000% | 0.00231% | 0.00390% | 0.04000% | 0.00050% | ||||||||||||||||||||
14 | Smiths Medical | 122 | 22,250,000 | 22,250,000 | 1.9% | 20,352,819 | N | 5/8/2015 | 6/6/2015 | 5/6/2020 | 6/6/2020 | 5/6/2025 | 4.47500% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
15 | Hunterstone Apartments | 65,972 | 19,000,000 | 19,000,000 | 1.6% | 16,980,017 | N | 5/1/2015 | 6/6/2015 | 5/6/2019 | 6/6/2019 | 5/6/2025 | 4.38000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
16 | Magnolia Marketplace | 194 | 18,910,000 | 18,885,708 | 1.6% | 15,110,641 | N | 4/17/2015 | 6/1/2015 | 6/1/2015 | 5/1/2025 | 4.16000% | 0.00231% | 0.00390% | 0.06000% | 0.00050% | ||||||||||||||||||||
17 | Norfolk Commerce Park | 54 | 18,000,000 | 18,000,000 | 1.5% | 15,712,192 | N | 6/1/2015 | 7/1/2015 | 6/1/2018 | 7/1/2018 | 5/31/2025 | 4.37700% | 0.00231% | 0.00390% | 0.06000% | 0.00050% | |||||||||||||||||||
18 | Summer Bend Apartments | 58,333 | 17,500,000 | 17,500,000 | 1.5% | 15,384,543 | N | 5/19/2015 | 7/6/2015 | 6/6/2018 | 7/6/2018 | 6/6/2025 | 4.68500% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
19 | Baywoods of Annapolis | 112,245 | 16,500,000 | 16,500,000 | 1.4% | 13,433,254 | N | 5/28/2015 | 7/1/2015 | 7/1/2015 | 6/1/2025 | 4.70000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
20 | Rock Hill Hampton Inn | 98,160 | 16,000,000 | 16,000,000 | 1.4% | 12,680,535 | N | 5/28/2015 | 7/11/2015 | 6/11/2017 | 7/11/2017 | 6/11/2025 | 4.30000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
21 | Louisville Plaza | 80 | 15,500,000 | 15,500,000 | 1.3% | 15,500,000 | N | 5/7/2015 | 6/6/2015 | 5/6/2025 | 5/6/2025 | 4.33000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
22 | Marquis Place | 127,119 | 15,000,000 | 15,000,000 | 1.3% | 12,388,396 | N | 3/18/2015 | 5/6/2015 | 4/6/2016 | 5/6/2016 | 4/6/2025 | 4.27000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
23 | Riverside Technology Park A & B | 89 | 14,750,000 | 14,750,000 | 1.3% | 11,815,094 | N | 5/29/2015 | 7/11/2015 | 7/11/2015 | 6/11/2025 | 4.23000% | 0.00231% | 0.00390% | 0.05000% | 0.00050% | ||||||||||||||||||||
24 | Maricopa Fiesta | 149 | 13,825,000 | 13,825,000 | 1.2% | 12,048,917 | N | 4/3/2015 | 5/6/2015 | 4/6/2018 | 5/6/2018 | 4/6/2025 | 4.31000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
25 | Dunwoody Place | 126 | 13,000,000 | 13,000,000 | 1.1% | 11,013,300 | N | 5/11/2015 | 6/11/2015 | 5/11/2017 | 6/11/2017 | 5/11/2025 | 4.20000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
26 | Jackson Square Apartments | 79,219 | 12,675,000 | 12,675,000 | 1.1% | 9,365,498 | N | 5/21/2015 | 7/6/2015 | 7/6/2015 | 6/6/2025 | 4.67500% | 0.00231% | 0.00390% | 0.07000% | 0.00050% | ||||||||||||||||||||
27 | Shops at Doral | 449 | 12,500,000 | 12,500,000 | 1.1% | 11,431,400 | N | 5/6/2015 | 6/6/2015 | 5/6/2020 | 6/6/2020 | 5/6/2025 | 4.46000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
28 | Solano Apartments | 45,802 | 12,000,000 | 12,000,000 | 1.0% | 10,938,055 | N | 5/29/2015 | 7/6/2015 | 6/6/2020 | 7/6/2020 | 6/6/2025 | 4.26000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
29 | Riverchase Apartments | 55,556 | 12,000,000 | 12,000,000 | 1.0% | 11,212,712 | N | 5/1/2015 | 6/6/2015 | 5/6/2016 | 6/6/2016 | 5/6/2020 | 4.56000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
30 | Old Mills | 48,387 | 12,000,000 | 12,000,000 | 1.0% | 10,950,733 | N | 3/31/2015 | 5/6/2015 | 4/6/2020 | 5/6/2020 | 4/6/2025 | 4.33000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
31 | Ozinus Realty Property Portfolio | 28 | 11,510,000 | 11,510,000 | 1.0% | 11,510,000 | N | 6/1/2015 | 7/1/2015 | 6/1/2025 | 6/1/2025 | 5.14500% | 0.00231% | 0.00390% | 0.06000% | 0.00050% | ||||||||||||||||||||
31.01 | Shiloh Crossing | 2,810,000 | 2,810,000 | 0.2% | ||||||||||||||||||||||||||||||||
31.02 | Texas Star | 1,900,000 | 1,900,000 | 0.2% | ||||||||||||||||||||||||||||||||
31.03 | Pitney Bowes | 1,900,000 | 1,900,000 | 0.2% | ||||||||||||||||||||||||||||||||
31.04 | Towne Crest Village | 1,750,000 | 1,750,000 | 0.1% | ||||||||||||||||||||||||||||||||
31.05 | Eagle Plaza | 1,200,000 | 1,200,000 | 0.1% | ||||||||||||||||||||||||||||||||
31.06 | Palmetto | 1,100,000 | 1,100,000 | 0.1% | ||||||||||||||||||||||||||||||||
31.07 | Hamlin | 850,000 | 850,000 | 0.1% | ||||||||||||||||||||||||||||||||
32 | Brickyard Square | 210 | 11,450,000 | 11,450,000 | 1.0% | 10,026,081 | N | 4/14/2015 | 6/6/2015 | 5/6/2018 | 6/6/2018 | 5/6/2025 | 4.51000% | 0.00000% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
33 | Dos Santos Apartments | 40,511 | 11,100,000 | 11,100,000 | 0.9% | 8,859,808 | N | 6/1/2015 | 7/11/2015 | 7/11/2015 | 6/11/2025 | 4.13000% | 0.00231% | 0.00390% | 0.05000% | 0.00050% | ||||||||||||||||||||
34 | Villa Bella | 79,019 | 10,126,000 | 10,114,439 | 0.9% | 8,241,746 | N | 4/30/2015 | 6/6/2015 | 6/6/2015 | 5/6/2025 | 4.69000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
35 | Bayview Office Building | 105 | 9,900,000 | 9,887,773 | 0.8% | 7,961,371 | N | 5/5/2015 | 6/11/2015 | 6/11/2015 | 5/11/2025 | 4.34000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
36 | Casa Nube | 25,469 | 9,500,000 | 9,500,000 | 0.8% | 7,660,548 | N | 5/22/2015 | 7/6/2015 | 7/6/2015 | 6/6/2025 | 4.42000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
37 | Homewood Suites - Tallahassee | 100,890 | 9,500,000 | 9,483,700 | 0.8% | 6,944,737 | N | 5/1/2015 | 6/11/2015 | 6/11/2015 | 5/11/2025 | 4.39000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
38 | San Mateo Apartments | 38,085 | 9,445,000 | 9,445,000 | 0.8% | 7,552,263 | N | 6/1/2015 | 7/11/2015 | 7/11/2015 | 6/11/2025 | 4.18000% | 0.00231% | 0.00390% | 0.05000% | 0.00050% | ||||||||||||||||||||
39 | Brittany Bay II | 45,192 | 9,400,000 | 9,400,000 | 0.8% | 7,463,854 | N | 5/15/2015 | 7/1/2015 | 7/1/2015 | 6/1/2025 | 3.98500% | 0.00231% | 0.00390% | 0.06000% | 0.00050% | ||||||||||||||||||||
40 | Nexus Town Center | 168 | 9,360,000 | 9,347,420 | 0.8% | 7,423,053 | N | 4/30/2015 | 6/11/2015 | 6/11/2015 | 5/11/2025 | 3.95000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
41 | Cathedral Place - Parking | 9,777 | 9,200,000 | 9,200,000 | 0.8% | 7,777,877 | N | 2/10/2015 | 4/1/2015 | 3/1/2017 | 4/1/2017 | 3/1/2025 | 4.12500% | 0.00231% | 0.00390% | 0.06000% | 0.00050% | |||||||||||||||||||
42 | Indiana Village | 31,944 | 9,200,000 | 9,200,000 | 0.8% | 8,368,443 | N | 3/31/2015 | 5/6/2015 | 4/6/2020 | 5/6/2020 | 4/6/2025 | 4.13500% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
43 | Fahrens Park Plaza | 104 | 9,100,000 | 9,100,000 | 0.8% | 7,862,620 | N | 4/21/2015 | 6/11/2015 | 5/11/2018 | 6/11/2018 | 5/11/2025 | 3.95000% | 0.00231% | 0.00390% | 0.07000% | 0.00050% | |||||||||||||||||||
44 | Causeway Corporate Centre | 195 | 9,000,000 | 8,989,249 | 0.8% | 7,275,429 | N | 5/11/2015 | 6/6/2015 | 6/6/2015 | 5/6/2025 | 4.49000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
45 | TownePlace Suites St. George by Marriott | 91,989 | 7,750,000 | 7,727,050 | 0.7% | 6,005,157 | N | 3/30/2015 | 5/6/2015 | 5/6/2015 | 4/6/2025 | 4.49000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
46 | IRG - Ellsworth Bailey Saratoga | 27 | 7,700,000 | 7,700,000 | 0.7% | 5,565,686 | N | 5/29/2015 | 7/11/2015 | 7/11/2015 | 6/11/2025 | 4.10000% | 0.00231% | 0.00390% | 0.06000% | 0.00050% | ||||||||||||||||||||
46.01 | Saratoga II | 3,200,000 | 3,200,000 | 0.3% | ||||||||||||||||||||||||||||||||
46.02 | Saratoga I | 2,400,000 | 2,400,000 | 0.2% | ||||||||||||||||||||||||||||||||
46.03 | Ellsworth Bailey Lordstown | 2,100,000 | 2,100,000 | 0.2% | ||||||||||||||||||||||||||||||||
47 | 39-60 54th Street Owners, Inc. | 34,572 | 7,675,000 | 7,675,000 | 0.7% | 6,736,447 | N | 5/20/2015 | 7/1/2015 | 7/1/2015 | 6/1/2025 | 3.83000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
48 | Courtyard by Marriott - Shawnee | 84,222 | 7,580,000 | 7,580,000 | 0.6% | 6,396,947 | N | 5/28/2015 | 7/6/2015 | 12/6/2016 | 1/6/2017 | 6/6/2025 | 4.54000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
49 | Athens Gate Apartments | 32,275 | 7,520,000 | 7,520,000 | 0.6% | 6,023,696 | N | 6/1/2015 | 7/11/2015 | 7/11/2015 | 6/11/2025 | 4.23000% | 0.00231% | 0.00390% | 0.05000% | 0.00050% | ||||||||||||||||||||
50 | Sand Pebble Apartments | 36,010 | 7,490,000 | 7,490,000 | 0.6% | 5,989,037 | N | 6/1/2015 | 7/11/2015 | 7/11/2015 | 6/11/2025 | 4.18000% | 0.00231% | 0.00390% | 0.05000% | 0.00050% | ||||||||||||||||||||
51 | Trojan Storage of Oxnard | 74 | 7,425,000 | 7,425,000 | 0.6% | 5,962,292 | N | 5/15/2015 | 7/11/2015 | 7/11/2015 | 6/11/2025 | 4.30000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
52 | CVS - Lynn, MA | 558 | 7,200,000 | 7,200,000 | 0.6% | 7,200,000 | N | 5/29/2015 | 7/11/2015 | 6/11/2025 | 6/11/2025 | 4.29000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
53 | Gilbert Crossing | 112 | 7,033,000 | 7,033,000 | 0.6% | 5,933,322 | N | 4/21/2015 | 6/11/2015 | 5/11/2017 | 6/11/2017 | 5/11/2025 | 4.05000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
54 | 1321 Harbor Bay Parkway | 140 | 7,000,000 | 7,000,000 | 0.6% | 5,926,954 | N | 5/6/2015 | 6/11/2015 | 5/11/2017 | 6/11/2017 | 5/11/2025 | 4.18000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
55 | Casa Cruz | 26,336 | 6,900,000 | 6,900,000 | 0.6% | 5,883,963 | N | 5/11/2015 | 6/6/2015 | 5/6/2017 | 6/6/2017 | 5/6/2025 | 4.44000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
56 | Best Western Plus - Windsor Gardens | 79,277 | 6,580,000 | 6,580,000 | 0.6% | 5,159,869 | N | 4/30/2015 | 6/6/2015 | 11/6/2016 | 12/6/2016 | 5/6/2025 | 4.60000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
57 | Oak Tree Plaza | 393 | 6,500,000 | 6,500,000 | 0.6% | 5,785,528 | N | 4/8/2015 | 5/6/2015 | 4/6/2019 | 5/6/2019 | 4/6/2025 | 4.18000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
58 | Peppertree Lane Apartments | 37,946 | 6,375,000 | 6,375,000 | 0.5% | 5,543,845 | N | 5/8/2015 | 7/1/2015 | 6/1/2018 | 7/1/2018 | 6/1/2025 | 4.21800% | 0.00231% | 0.00390% | 0.06000% | 0.00050% | |||||||||||||||||||
59 | 8211 Town Center Drive | 89 | 6,200,000 | 6,200,000 | 0.5% | 4,530,274 | N | 5/29/2015 | 7/11/2015 | 7/11/2015 | 6/11/2025 | 4.38000% | 0.00231% | 0.00390% | 0.06000% | 0.00050% | ||||||||||||||||||||
60 | Staybridge Suites Indianapolis Airport | 68,182 | 6,000,000 | 6,000,000 | 0.5% | 4,613,420 | N | 4/16/2015 | 6/6/2015 | 5/6/2016 | 6/6/2016 | 5/6/2025 | 4.60000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
61 | Austin Heights Shopping Center | 100 | 6,000,000 | 6,000,000 | 0.5% | 5,112,108 | N | 5/29/2015 | 7/1/2015 | 6/1/2017 | 7/1/2017 | 6/1/2025 | 4.41000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | |||||||||||||||||||
62 | Walgreens - Duncanville, TX | 380 | 5,500,000 | 5,500,000 | 0.5% | 4,845,091 | N | 5/19/2015 | 7/11/2015 | 6/11/2020 | 7/11/2020 | 6/11/2025 | 4.43000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
63 | Trojan Storage of Roseville | 70 | 5,425,000 | 5,418,226 | 0.5% | 4,355,022 | N | 5/8/2015 | 6/11/2015 | 6/11/2015 | 5/11/2025 | 4.29000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
64 | Lakeside Plaza | 42 | 5,360,000 | 5,360,000 | 0.5% | 4,625,166 | N | 5/11/2015 | 6/11/2015 | 5/11/2017 | 6/11/2017 | 5/11/2025 | 4.89000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
65 | Green Acres MHP | 25,000 | 5,300,000 | 5,300,000 | 0.5% | 4,382,645 | N | 5/29/2015 | 7/11/2015 | 6/11/2016 | 7/11/2016 | 6/11/2025 | 4.31000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
66 | Mendicino Green Apartment Corp. | 49,490 | 5,300,000 | 5,295,400 | 0.4% | 4,598,823 | N | 4/28/2015 | 6/1/2015 | 6/1/2015 | 5/1/2025 | 3.47000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
67 | Walgreens - Richmond Heights | 381 | 5,040,000 | 5,040,000 | 0.4% | 4,385,231 | N | 4/10/2015 | 5/6/2015 | 4/6/2018 | 5/6/2018 | 4/6/2025 | 4.24000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
68 | Rivertown Center | 82 | 5,000,000 | 5,000,000 | 0.4% | 4,234,713 | N | 5/8/2015 | 6/11/2015 | 5/11/2017 | 6/11/2017 | 5/11/2025 | 4.19000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
69 | Bristol House, Inc. | 70,318 | 5,000,000 | 4,992,556 | 0.4% | 3,893,530 | N | 4/30/2015 | 6/1/2015 | 6/1/2015 | 5/1/2025 | 3.46000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
70 | Storaway Self Storage - Nashville | 62 | 4,975,000 | 4,975,000 | 0.4% | 4,975,000 | N | 5/22/2015 | 7/11/2015 | 6/11/2025 | 6/11/2025 | 4.12000% | 0.00231% | 0.00390% | 0.07000% | 0.00050% | ||||||||||||||||||||
71 | Bella Luna / San Lucas | 26,057 | 5,000,000 | 4,957,123 | 0.4% | 4,533,711 | N | 11/10/2014 | 1/6/2015 | 1/6/2015 | 12/6/2019 | 3.94900% | 0.00000% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
72 | Seacoast Self Storage | 88 | 4,880,000 | 4,874,287 | 0.4% | 3,957,106 | N | 4/17/2015 | 6/6/2015 | 6/6/2015 | 5/6/2025 | 4.58000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
73 | 230 Garth Road Owners, Inc. | 13,245 | 4,550,000 | 4,543,115 | 0.4% | 3,532,266 | N | 4/22/2015 | 6/1/2015 | 6/1/2015 | 5/1/2025 | 3.38000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
74 | Comfort Suites - Near the Galleria | 69,883 | 4,340,000 | 4,332,758 | 0.4% | 3,192,023 | N | 4/15/2015 | 6/6/2015 | 6/6/2015 | 5/6/2025 | 4.55000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
75 | Sandstone Apartments | 24,395 | 4,200,000 | 4,195,936 | 0.4% | 3,896,642 | N | 4/28/2015 | 6/6/2015 | 6/6/2015 | 5/6/2020 | 5.39000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
76 | Tieton Village | 65 | 4,000,000 | 4,000,000 | 0.3% | 3,632,686 | N | 5/4/2015 | 6/11/2015 | 5/11/2020 | 6/11/2020 | 5/11/2025 | 4.04000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
77 | Highland Terrace Housing Development Fund Corporation | 41,609 | 4,000,000 | 3,994,451 | 0.3% | 3,154,849 | N | 4/21/2015 | 6/1/2015 | 6/1/2015 | 5/1/2025 | 3.80000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
78 | Cooperstown Commons Shopping Center | 71 | 3,950,000 | 3,950,000 | 0.3% | 3,066,842 | N | 3/19/2015 | 5/6/2015 | 10/6/2016 | 11/6/2016 | 4/6/2025 | 4.28000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
79 | Lake Lucina Shopping Center | 68 | 3,787,500 | 3,762,984 | 0.3% | 3,065,311 | N | 12/11/2014 | 2/10/2015 | 2/10/2015 | 1/1/2025 | 4.53000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
80 | Silver Bridge Plaza | 28 | 3,750,000 | 3,750,000 | 0.3% | 2,873,589 | N | 3/19/2015 | 5/6/2015 | 4/6/2016 | 5/6/2016 | 4/6/2025 | 4.50000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
81 | Karen Gardens Apartment Corp. | 54,478 | 3,650,000 | 3,650,000 | 0.3% | 2,854,042 | N | 5/15/2015 | 7/1/2015 | 7/1/2015 | 6/1/2025 | 3.57000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
82 | East Haven Self Storage | 102 | 3,420,000 | 3,416,086 | 0.3% | 2,782,663 | N | 4/27/2015 | 6/6/2015 | 6/6/2015 | 5/6/2025 | 4.68000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
83 | Walgreens - Milwaukee | 227 | 3,290,000 | 3,284,296 | 0.3% | 2,399,543 | Y | 5/11/2015 | 6/11/2015 | 6/11/2015 | 5/11/2025 | 5/11/2040 | 4.33000% | 0.00231% | 0.00390% | 0.05000% | 0.00050% |
A-1-3 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES | ||||||||||||||||||||||||||||||||||||
Mortgage Loan Number | Property Name | Cut-off Date Balance Per Unit/SF(3) | Original Balance ($)(3) | Cut-off Date Balance ($)(3) | % of Aggregate Cut-off Date Balance | Maturity Date or ARD Balloon Payment ($) | ARD Loan | Origination Date | First Pay Date | Last IO Pay Date | First P&I Pay Date | Maturity Date or Anticipated Repayment Date | ARD Loan Maturity Date | Gross Mortgage Rate | Trust Advisor Fee Rate | Certificate Administrator Fee Rate | Servicing Fee | CREFC® IP Royalty License Fee Rate | ||||||||||||||||||
84 | Haggen Food & Pharmacy | 75 | 3,200,000 | 3,200,000 | 0.3% | 2,577,168 | Y | 5/22/2015 | 7/6/2015 | 7/6/2015 | 6/6/2025 | 6/6/2045 | 4.38400% | 0.00231% | 0.00390% | 0.06000% | 0.00050% | |||||||||||||||||||
85 | Sycamore Terrace | 302 | 3,188,000 | 3,188,000 | 0.3% | 2,928,003 | N | 4/30/2015 | 6/6/2015 | 5/6/2020 | 6/6/2020 | 5/6/2025 | 4.73000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
86 | Ramona Plaza Shopping Center | 147 | 3,185,000 | 3,185,000 | 0.3% | 2,556,663 | N | 5/28/2015 | 7/11/2015 | 7/11/2015 | 6/11/2025 | 4.29000% | 0.00231% | 0.00390% | 0.05000% | 0.00050% | ||||||||||||||||||||
87 | All A/C Self Storage | 92 | 3,150,000 | 3,150,000 | 0.3% | 2,628,834 | N | 5/29/2015 | 7/6/2015 | 6/6/2016 | 7/6/2016 | 6/6/2025 | 4.61000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
88 | Pecue MHC | 22,472 | 3,150,000 | 3,146,084 | 0.3% | 2,530,501 | N | 4/30/2015 | 6/11/2015 | 6/11/2015 | 5/11/2025 | 4.31000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
89 | Regency Park Owners Corp. | 47,692 | 3,100,000 | 3,100,000 | 0.3% | 2,429,462 | N | 5/28/2015 | 7/1/2015 | 7/1/2015 | 6/1/2025 | 3.63000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
90 | Storaway Self Storage - Deltona II | 43 | 3,000,000 | 3,000,000 | 0.3% | 3,000,000 | N | 5/22/2015 | 7/11/2015 | 6/11/2025 | 6/11/2025 | 4.12000% | 0.00231% | 0.00390% | 0.07000% | 0.00050% | ||||||||||||||||||||
91 | Lakewood Place Shopping Center | 231 | 3,000,000 | 3,000,000 | 0.3% | 2,555,363 | N | 5/28/2015 | 7/11/2015 | 6/11/2017 | 7/11/2017 | 6/11/2025 | 4.40000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
92 | Hacienda Heights Apartments | 119,845 | 3,000,000 | 2,996,129 | 0.3% | 2,395,536 | N | 5/5/2015 | 6/11/2015 | 6/11/2015 | 5/11/2025 | 4.14000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
93 | Nagle House, Inc. | 16,736 | 3,000,000 | 2,995,812 | 0.3% | 2,363,512 | N | 4/10/2015 | 6/1/2015 | 6/1/2015 | 5/1/2025 | 3.77000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
94 | Walgreens - Warrensburg, MO | 203 | 2,945,000 | 2,945,000 | 0.3% | 2,578,857 | N | 5/29/2015 | 7/11/2015 | 6/11/2020 | 7/11/2020 | 6/11/2025 | 4.10000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
95 | 230 Tenants Corporation | 67,442 | 2,900,000 | 2,900,000 | 0.2% | 2,900,000 | N | 6/1/2015 | 7/1/2015 | 6/1/2025 | 6/1/2025 | 3.55000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
96 | Shackelford Center | 57 | 2,840,000 | 2,836,288 | 0.2% | 2,262,907 | N | 4/30/2015 | 6/11/2015 | 6/11/2015 | 5/11/2025 | 4.08000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
97 | De La Cruz Professional Center | 101 | 2,835,000 | 2,831,476 | 0.2% | 2,586,692 | N | 5/11/2015 | 6/11/2015 | 6/11/2015 | 5/11/2020 | 4.31000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
98 | Folcroft Self Storage | 62 | 2,800,000 | 2,800,000 | 0.2% | 2,270,317 | N | 5/13/2015 | 7/6/2015 | 7/6/2015 | 6/6/2025 | 4.58000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
99 | Storaway Self Storage - Palm Bay | 40 | 2,725,000 | 2,725,000 | 0.2% | 2,725,000 | N | 5/22/2015 | 7/11/2015 | 6/11/2025 | 6/11/2025 | 4.12000% | 0.00231% | 0.00390% | 0.07000% | 0.00050% | ||||||||||||||||||||
100 | Bowen Tower Apartments | 29,893 | 2,737,500 | 2,720,274 | 0.2% | 2,226,853 | N | 12/5/2014 | 2/1/2015 | 2/1/2015 | 1/1/2025 | 4.68000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
101 | 321 West 90th St. Owners Corp. | 50,000 | 2,500,000 | 2,500,000 | 0.2% | 1,964,381 | N | 6/1/2015 | 7/1/2015 | 7/1/2015 | 6/1/2025 | 3.70000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
102 | West Friendship Shopping Center | 127 | 2,400,000 | 2,393,832 | 0.2% | 1,933,304 | N | 3/19/2015 | 5/1/2015 | 5/1/2015 | 4/1/2025 | 4.39000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
103 | Crestview Self Storage | 40 | 2,400,000 | 2,390,410 | 0.2% | 971,634 | N | 5/1/2015 | 6/11/2015 | 6/11/2015 | 5/11/2025 | 3.88000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
104 | Denn Owners Corporation | 30,640 | 2,250,000 | 2,236,684 | 0.2% | 1,779,443 | N | 1/14/2015 | 3/1/2015 | 3/1/2015 | 2/1/2025 | 3.88000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
105 | Moundsville Plaza | 21 | 2,225,000 | 2,225,000 | 0.2% | 1,718,114 | N | 3/17/2015 | 5/6/2015 | 4/6/2016 | 5/6/2016 | 4/6/2025 | 4.73000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
106 | Storaway Self Storage- Deltona I | 48 | 2,100,000 | 2,100,000 | 0.2% | 2,100,000 | N | 5/22/2015 | 7/11/2015 | 6/11/2025 | 6/11/2025 | 4.12000% | 0.00231% | 0.00390% | 0.07000% | 0.00050% | ||||||||||||||||||||
107 | Sedona Peak Apartments | 26,645 | 2,025,000 | 2,025,000 | 0.2% | 1,619,200 | N | 6/1/2015 | 7/11/2015 | 7/11/2015 | 6/11/2025 | 4.18000% | 0.00231% | 0.00390% | 0.07000% | 0.00050% | ||||||||||||||||||||
108 | Sea Breeze Town Houses Owners, Inc. | 125,000 | 2,000,000 | 2,000,000 | 0.2% | 2,000,000 | N | 5/21/2015 | 7/1/2015 | 6/1/2025 | 6/1/2025 | 3.73000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
109 | Willow Lake Shops | 82 | 2,000,000 | 2,000,000 | 0.2% | 1,667,106 | N | 3/9/2015 | 5/1/2015 | 4/1/2016 | 5/1/2016 | 4/1/2025 | 4.57000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | |||||||||||||||||||
110 | Wickham Park Commons | 129 | 1,960,000 | 1,960,000 | 0.2% | 1,669,052 | N | 5/27/2015 | 7/11/2015 | 6/11/2017 | 7/11/2017 | 6/11/2025 | 4.39000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
111 | Crown Pointe Plaza | 57 | 1,875,000 | 1,875,000 | 0.2% | 1,557,770 | N | 2/27/2015 | 4/1/2015 | 3/1/2016 | 4/1/2016 | 3/1/2025 | 4.46000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | |||||||||||||||||||
112 | Hartsdale Executive House, Inc. | 21,429 | 1,800,000 | 1,800,000 | 0.2% | 1,418,037 | N | 5/4/2015 | 7/1/2015 | 7/1/2015 | 6/1/2025 | 3.77000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
113 | 25 Chapel Corp. | 44,933 | 1,800,000 | 1,797,326 | 0.2% | 1,402,206 | N | 4/28/2015 | 6/1/2015 | 6/1/2015 | 5/1/2025 | 3.47000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
114 | Market Place Village | 116 | 1,700,000 | 1,700,000 | 0.1% | 1,404,092 | N | 2/4/2015 | 4/1/2015 | 3/1/2016 | 4/1/2016 | 3/1/2025 | 4.27000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | |||||||||||||||||||
115 | Kingstowne Shops | 70 | 1,625,000 | 1,622,953 | 0.1% | 1,302,662 | N | 4/28/2015 | 6/11/2015 | 6/11/2015 | 5/11/2025 | 4.25000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
116 | 109-111 N. Broadway Apt. Corp. | 31,725 | 1,625,000 | 1,617,987 | 0.1% | 1,279,775 | N | 2/26/2015 | 4/1/2015 | 4/1/2015 | 3/1/2025 | 3.76000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
117 | 40 Prospect Park West Owners Corp. | 29,049 | 1,600,000 | 1,597,686 | 0.1% | 1,252,561 | N | 4/30/2015 | 6/1/2015 | 6/1/2015 | 5/1/2025 | 3.60000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
118 | Shops of Orland Park | 98 | 1,550,000 | 1,550,000 | 0.1% | 1,324,890 | N | 5/21/2015 | 7/11/2015 | 6/11/2017 | 7/11/2017 | 6/11/2025 | 4.53000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | |||||||||||||||||||
119 | Victorville Retail Center | 129 | 1,500,000 | 1,500,000 | 0.1% | 1,500,000 | N | 4/9/2015 | 5/11/2015 | 4/11/2025 | 4/11/2025 | 4.13000% | 0.00231% | 0.00390% | 0.07000% | 0.00050% | ||||||||||||||||||||
120 | 6 West 20th St. Tenants Corp. | 106,989 | 1,500,000 | 1,497,853 | 0.1% | 1,176,485 | N | 4/16/2015 | 6/1/2015 | 6/1/2015 | 5/1/2025 | 3.65000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
121 | 50-22 Owners Ltd. | 31,833 | 1,500,000 | 1,496,129 | 0.1% | 1,308,758 | N | 2/2/2015 | 4/1/2015 | 4/1/2015 | 3/1/2025 | 3.64000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
122 | 585 McLean Owners, Inc. | 34,146 | 1,400,000 | 1,400,000 | 0.1% | 1,221,063 | N | 5/29/2015 | 7/1/2015 | 7/1/2015 | 6/1/2025 | 3.63000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
123 | 12 West 17th St. Tenants' Corp. | 126,960 | 1,400,000 | 1,396,560 | 0.1% | 1,228,091 | N | 2/27/2015 | 4/1/2015 | 4/1/2015 | 3/1/2025 | 3.81000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
124 | Gillespie Field Business Park | 74 | 1,310,000 | 1,308,421 | 0.1% | 1,057,516 | N | 5/11/2015 | 6/11/2015 | 6/11/2015 | 5/11/2025 | 4.45000% | 0.00231% | 0.00390% | 0.09000% | 0.00050% | ||||||||||||||||||||
125 | Waters at West End, Inc. | 30,537 | 1,225,000 | 1,221,493 | 0.1% | 967,558 | N | 3/30/2015 | 5/1/2015 | 5/1/2015 | 4/1/2025 | 3.84000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
126 | Jones St. Owners Corporation | 170,677 | 1,200,000 | 1,194,739 | 0.1% | 942,254 | N | 2/17/2015 | 4/1/2015 | 4/1/2015 | 3/1/2025 | 3.68000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
127 | Big Lots Plaza | 33 | 1,195,000 | 1,192,867 | 0.1% | 979,515 | N | 5/6/2015 | 6/11/2015 | 6/11/2015 | 5/11/2022 | 4.16000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
128 | 30 Bond Street Owners Corp. | 190,830 | 1,150,000 | 1,144,978 | 0.1% | 903,668 | N | 2/26/2015 | 4/1/2015 | 4/1/2015 | 3/1/2025 | 3.70000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
129 | 166 West 76th Apartment Corp. | 32,260 | 1,100,000 | 1,096,839 | 0.1% | 868,189 | N | 3/31/2015 | 5/1/2015 | 5/1/2015 | 4/1/2025 | 3.82000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
130 | Hanna Shoppes | 65 | 1,050,000 | 1,048,677 | 0.1% | 841,720 | N | 4/21/2015 | 6/11/2015 | 6/11/2015 | 5/11/2025 | 4.25000% | 0.00231% | 0.00390% | 0.02000% | 0.00050% | ||||||||||||||||||||
131 | Carroll Gardens Owners, Corp. | 31,250 | 1,000,000 | 1,000,000 | 0.1% | 788,673 | N | 5/26/2015 | 7/1/2015 | 7/1/2015 | 6/1/2025 | 3.80000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
132 | 170 East 92nd Street Owners, Inc. | 44,444 | 800,000 | 800,000 | 0.1% | 630,004 | N | 5/20/2015 | 7/1/2015 | 7/1/2015 | 6/1/2025 | 3.76000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% | ||||||||||||||||||||
133 | 17 Warren Street Tenants Corporation | 125,000 | 750,000 | 750,000 | 0.1% | 750,000 | N | 1/29/2015 | 3/1/2015 | 2/1/2025 | 2/1/2025 | 3.96000% | 0.00231% | 0.00390% | 0.08000% | 0.00050% |
A-1-4 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Mortgage Loan Number | Property Name | Net Mortgage Rate | Interest Accrual Method | Monthly P&I Payment ($) | Amortization Type | Interest Accrual Method During IO | Original Term to Maturity or ARD (Mos.) | Remaining Term to Maturity or ARD (Mos.) | Original IO Period (Mos.) | Remaining IO Period (Mos.) | Original Amort Term (Mos.) | Remaining Amort Term (Mos.) | Seasoning | Prepayment Provisions | Grace Period Default (Days) | Grace Period Late (Days)(4) | ||||||||||||||||
1 | Hutchinson Metro Center I | 4.17329% | Actual/360 | 489,017.17 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 120 | 36 | 36 | 360 | 360 | 0 | L(24),D(92),O(4) | 0 | 5 | ||||||||||||||||
2 | Cathedral Place | 4.05829% | Actual/360 | 193,375.24 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 117 | 24 | 21 | 360 | 360 | 3 | L(27),D(89),O(4) | 5 | 5 | ||||||||||||||||
3 | 150 Royall Street | 4.11329% | Actual/360 | 185,408.57 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 120 | 60 | 60 | 360 | 360 | 0 | L(24),D(92),O(4) | 0 | 5 | ||||||||||||||||
4 | WPC Self Storage Portfolio VII | 4.27329% | Actual/360 | 135,685.60 | Interest-only, Balloon | Actual/360 | 120 | 120 | 120 | 120 | 0 | 0 | 0 | L(24),D(92),O(4) | 0 | 5 | ||||||||||||||||
4.01 | Extra Space Louisville KY | |||||||||||||||||||||||||||||||
4.02 | Extra Space Las Vegas NV | |||||||||||||||||||||||||||||||
4.03 | CubeSmart Joan Panama City Beach FL | |||||||||||||||||||||||||||||||
4.04 | CubeSmart Tallahassee FL | |||||||||||||||||||||||||||||||
4.05 | Extra Space Lady Lake FL | |||||||||||||||||||||||||||||||
4.06 | CubeSmart Crystal Lake IL | |||||||||||||||||||||||||||||||
4.07 | CubeSmart Hutchinson Panama City Beach FL | |||||||||||||||||||||||||||||||
4.08 | Extra Space Lilburn GA | |||||||||||||||||||||||||||||||
4.09 | Extra Space Stockbridge GA | |||||||||||||||||||||||||||||||
5 | Queens' MarketPlace | 4.10329% | Actual/360 | 122,465.97 | Interest-only, Balloon | Actual/360 | 120 | 120 | 120 | 120 | 0 | 0 | 0 | L(24),D(91),O(5) | 0 | 5 | ||||||||||||||||
6 | El Sol Brillante and Laguna Del Sol Apartments | 4.27329% | Actual/360 | 142,275.54 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 119 | 60 | 59 | 360 | 360 | 1 | L(24),GRTR 1% or YM(92),O(4) | 0 | 0 | ||||||||||||||||
6.01 | Laguna Del Sol Apartments | |||||||||||||||||||||||||||||||
6.02 | El Sol Brillante Apartments | |||||||||||||||||||||||||||||||
7 | Country Club Center | 4.36329% | Actual/360 | 135,046.00 | Amortizing Balloon | 120 | 120 | 0 | 0 | 360 | 360 | 0 | L(24),D(92),O(4) | 0 | 5 | |||||||||||||||||
8 | Parkway Crossing East Shopping Center | 4.10329% | Actual/360 | 127,296.82 | Amortizing Balloon | 120 | 119 | 0 | 0 | 360 | 359 | 1 | L(25),D(91),O(4) | 0 | 5 | |||||||||||||||||
9 | Olmsted Plaza Shopping Center | 4.01329% | Actual/360 | 123,215.58 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 119 | 60 | 59 | 360 | 360 | 1 | L(25),D(91),O(4) | 0 | 0 | ||||||||||||||||
10 | Hall Office Park | 4.17329% | Actual/360 | 124,699.38 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 120 | 12 | 12 | 360 | 360 | 0 | L(24),D(92),O(4) | 0 | 5 | ||||||||||||||||
11 | Dulles North Corporate Parks | 4.29329% | Actual/360 | 136,275.81 | Amortizing Balloon | 120 | 119 | 0 | 0 | 300 | 299 | 1 | L(25),D(91),O(4) | 0 | 5 | |||||||||||||||||
11.01 | Dulles North Corporate Park 5 | |||||||||||||||||||||||||||||||
11.02 | Dulles North Corporate Park 2 | |||||||||||||||||||||||||||||||
12 | Coastal Village Apartments | 4.30329% | Actual/360 | 119,192.30 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 116 | 24 | 20 | 360 | 360 | 4 | L(28),D(89),O(3) | 0 | 0 | ||||||||||||||||
13 | Foothills Park Place | 4.08329% | Actual/360 | 80,477.64 | Interest-only, Balloon | Actual/360 | 120 | 118 | 120 | 118 | 0 | 0 | 2 | L(26),GRTR 1% or YM(90),O(4) | 0 | 5 | ||||||||||||||||
14 | Smiths Medical | 4.44829% | Actual/360 | 112,407.21 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 119 | 60 | 59 | 360 | 360 | 1 | L(25),D(88),O(7) | 0 | 0 | ||||||||||||||||
15 | Hunterstone Apartments | 4.35329% | Actual/360 | 94,920.24 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 119 | 48 | 47 | 360 | 360 | 1 | L(25),D(88),O(7) | 0 | 0 | ||||||||||||||||
16 | Magnolia Marketplace | 4.09329% | Actual/360 | 92,032.21 | Amortizing Balloon | 120 | 119 | 0 | 0 | 360 | 359 | 1 | L(25),D(82),O(13) | 5 | 0 | |||||||||||||||||
17 | Norfolk Commerce Park | 4.31029% | Actual/360 | 89,892.58 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 120 | 36 | 36 | 360 | 360 | 0 | L(24),D(92),O(4) | 5 | 5 | ||||||||||||||||
18 | Summer Bend Apartments | 4.65829% | Actual/360 | 90,603.91 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 120 | 36 | 36 | 360 | 360 | 0 | L(24),D(92),O(4) | 0 | 0 | ||||||||||||||||
19 | Baywoods of Annapolis | 4.61329% | Actual/360 | 85,575.24 | Amortizing Balloon | 120 | 120 | 0 | 0 | 360 | 360 | 0 | L(24),D(92),O(4) | 10 | 10 | |||||||||||||||||
20 | Rock Hill Hampton Inn | 4.27329% | Actual/360 | 87,126.66 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 120 | 24 | 24 | 300 | 300 | 0 | L(24),GRTR 1% or YM(92),O(4) | 0 | 5 | ||||||||||||||||
21 | Louisville Plaza | 4.30329% | Actual/360 | 56,861.32 | Interest-only, Balloon | Actual/360 | 120 | 119 | 120 | 119 | 0 | 0 | 1 | L(24),GRTR 1% or YM(92),O(4) | 0 | 0 | ||||||||||||||||
22 | Marquis Place | 4.24329% | Actual/360 | 73,966.72 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 118 | 12 | 10 | 360 | 360 | 2 | L(26),D(90),O(4) | 0 | 0 | ||||||||||||||||
23 | Riverside Technology Park A & B | 4.17329% | Actual/360 | 72,388.54 | Amortizing Balloon | 120 | 120 | 0 | 0 | 360 | 360 | 0 | L(24),D(92),O(4) | 0 | 5 | |||||||||||||||||
24 | Maricopa Fiesta | 4.28329% | Actual/360 | 68,497.18 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 118 | 36 | 34 | 360 | 360 | 2 | L(26),D(87),O(7) | 0 | 0 | ||||||||||||||||
25 | Dunwoody Place | 4.17329% | Actual/360 | 63,572.23 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 119 | 24 | 23 | 360 | 360 | 1 | L(25),D(91),O(4) | 0 | 5 | ||||||||||||||||
26 | Jackson Square Apartments | 4.59829% | Actual/360 | 71,716.68 | Amortizing Balloon | 120 | 120 | 0 | 0 | 300 | 300 | 0 | L(24),D(92),O(4) | 0 | 0 | |||||||||||||||||
27 | Shops at Doral | 4.43329% | Actual/360 | 63,038.92 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 119 | 60 | 59 | 360 | 360 | 1 | L(25),D(91),O(4) | 0 | 0 | ||||||||||||||||
28 | Solano Apartments | 4.23329% | Actual/360 | 59,103.06 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 120 | 60 | 60 | 360 | 360 | 0 | L(24),D(93),O(3) | 0 | 0 | ||||||||||||||||
29 | Riverchase Apartments | 4.53329% | Actual/360 | 61,230.79 | Interest-only, Amortizing Balloon | Actual/360 | 60 | 59 | 12 | 11 | 360 | 360 | 1 | L(25),D(28),O(7) | 0 | 0 | ||||||||||||||||
30 | Old Mills | 4.30329% | Actual/360 | 59,596.15 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 118 | 60 | 58 | 360 | 360 | 2 | L(23),GRTR 1% or YM(93),O(4) | 0 | 0 | ||||||||||||||||
31 | Ozinus Realty Property Portfolio | 5.07829% | Actual/360 | 50,171.61 | Interest-only, Balloon | Actual/360 | 120 | 120 | 120 | 120 | 0 | 0 | 0 | L(24),D(92),O(4) | 0 | 5 | ||||||||||||||||
31.01 | Shiloh Crossing | |||||||||||||||||||||||||||||||
31.02 | Texas Star | |||||||||||||||||||||||||||||||
31.03 | Pitney Bowes | |||||||||||||||||||||||||||||||
31.04 | Towne Crest Village | |||||||||||||||||||||||||||||||
31.05 | Eagle Plaza | |||||||||||||||||||||||||||||||
31.06 | Palmetto | |||||||||||||||||||||||||||||||
31.07 | Hamlin | |||||||||||||||||||||||||||||||
32 | Brickyard Square | 4.48560% | Actual/360 | 58,083.52 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 119 | 36 | 35 | 360 | 360 | 1 | L(25),D(91),O(4) | 0 | 0 | ||||||||||||||||
33 | Dos Santos Apartments | 4.07329% | Actual/360 | 53,828.37 | Amortizing Balloon | 120 | 120 | 0 | 0 | 360 | 360 | 0 | L(24),D(92),O(4) | 0 | 5 | |||||||||||||||||
34 | Villa Bella | 4.66329% | Actual/360 | 52,456.42 | Amortizing Balloon | 120 | 119 | 0 | 0 | 360 | 359 | 1 | L(25),D(91),O(4) | 0 | 0 | |||||||||||||||||
35 | Bayview Office Building | 4.31329% | Actual/360 | 49,225.08 | Amortizing Balloon | 120 | 119 | 0 | 0 | 360 | 359 | 1 | L(25),D(91),O(4) | 0 | 5 | |||||||||||||||||
36 | Casa Nube | 4.39329% | Actual/360 | 47,684.59 | Amortizing Balloon | 120 | 120 | 0 | 0 | 360 | 360 | 0 | L(24),D(89),O(7) | 0 | 0 | |||||||||||||||||
37 | Homewood Suites - Tallahassee | 4.36329% | Actual/360 | 52,212.70 | Amortizing Balloon | 120 | 119 | 0 | 0 | 300 | 299 | 1 | L(25),D(91),O(4) | 0 | 5 | |||||||||||||||||
38 | San Mateo Apartments | 4.12329% | Actual/360 | 46,077.49 | Amortizing Balloon | 120 | 120 | 0 | 0 | 360 | 360 | 0 | L(24),D(92),O(4) | 0 | 5 | |||||||||||||||||
39 | Brittany Bay II | 3.91829% | Actual/360 | 44,795.79 | Amortizing Balloon | 120 | 120 | 0 | 0 | 360 | 360 | 0 | L(24),D(92),O(4) | 0 | 5 | |||||||||||||||||
40 | Nexus Town Center | 3.92329% | Actual/360 | 44,416.69 | Amortizing Balloon | 120 | 119 | 0 | 0 | 360 | 359 | 1 | L(25),D(91),O(4) | 0 | 5 | |||||||||||||||||
41 | Cathedral Place - Parking | 4.05829% | Actual/360 | 44,587.78 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 117 | 24 | 21 | 360 | 360 | 3 | L(27),D(89),O(4) | 5 | 5 | ||||||||||||||||
42 | Indiana Village | 4.10829% | Actual/360 | 44,641.24 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 118 | 60 | 58 | 360 | 360 | 2 | L(26),D(92),O(2) | 0 | 0 | ||||||||||||||||
43 | Fahrens Park Plaza | 3.87329% | Actual/360 | 43,182.89 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 119 | 36 | 35 | 360 | 360 | 1 | L(25),GRTR 1% or YM(91),O(4) | 0 | 5 | ||||||||||||||||
44 | Causeway Corporate Centre | 4.46329% | Actual/360 | 45,548.22 | Amortizing Balloon | 120 | 119 | 0 | 0 | 360 | 359 | 1 | L(25),D(91),O(4) | 0 | 0 | |||||||||||||||||
45 | TownePlace Suites St. George by Marriott | 4.46329% | Actual/360 | 40,933.15 | Amortizing Balloon | 120 | 118 | 0 | 0 | 330 | 328 | 2 | L(26),D(91),O(3) | 0 | 0 | |||||||||||||||||
46 | IRG - Ellsworth Bailey Saratoga | 4.03329% | Actual/360 | 41,069.80 | Amortizing Balloon | 120 | 120 | 0 | 0 | 300 | 300 | 0 | L(24),GRTR 1% or YM(92),O(4) | 0 | 5 | |||||||||||||||||
46.01 | Saratoga II | |||||||||||||||||||||||||||||||
46.02 | Saratoga I | |||||||||||||||||||||||||||||||
46.03 | Ellsworth Bailey Lordstown | |||||||||||||||||||||||||||||||
47 | 39-60 54th Street Owners, Inc. | 3.74329% | Actual/360 | 31,270.11 | Amortizing Balloon | 120 | 120 | 0 | 0 | 480 | 480 | 0 | GRTR 1% or YM(113),1%(3),O(4) | 10 | 10 | |||||||||||||||||
48 | Courtyard by Marriott - Shawnee | 4.51329% | Actual/360 | 38,587.11 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 120 | 18 | 18 | 360 | 360 | 0 | L(24),D(93),O(3) | 0 | 0 | ||||||||||||||||
49 | Athens Gate Apartments | 4.17329% | Actual/360 | 36,905.88 | Amortizing Balloon | 120 | 120 | 0 | 0 | 360 | 360 | 0 | L(24),D(92),O(4) | 0 | 5 | |||||||||||||||||
50 | Sand Pebble Apartments | 4.12329% | Actual/360 | 36,540.01 | Amortizing Balloon | 120 | 120 | 0 | 0 | 360 | 360 | 0 | L(24),D(92),O(4) | 0 | 5 | |||||||||||||||||
51 | Trojan Storage of Oxnard | 4.27329% | Actual/360 | 36,744.20 | Amortizing Balloon | 120 | 120 | 0 | 0 | 360 | 360 | 0 | L(24),D(92),O(4) | 0 | 5 | |||||||||||||||||
52 | CVS - Lynn, MA | 4.26329% | Actual/360 | 26,169.00 | Interest-only, Balloon | Actual/360 | 120 | 120 | 120 | 120 | 0 | 0 | 0 | L(24),D(92),O(4) | 0 | 5 | ||||||||||||||||
53 | Gilbert Crossing | 4.02329% | Actual/360 | 33,779.66 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 119 | 24 | 23 | 360 | 360 | 1 | L(25),D(91),O(4) | 0 | 5 | ||||||||||||||||
54 | 1321 Harbor Bay Parkway | 4.15329% | Actual/360 | 34,149.54 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 119 | 24 | 23 | 360 | 360 | 1 | L(25),GRTR 1% or YM or D(88),O(7) | 0 | 5 | ||||||||||||||||
55 | Casa Cruz | 4.41329% | Actual/360 | 34,715.73 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 119 | 24 | 23 | 360 | 360 | 1 | L(25),D(91),O(4) | 0 | 0 | ||||||||||||||||
56 | Best Western Plus - Windsor Gardens | 4.57329% | Actual/360 | 36,948.26 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 119 | 18 | 17 | 300 | 300 | 1 | L(23),GRTR 1% or YM(93),O(4) | 0 | 0 | ||||||||||||||||
57 | Oak Tree Plaza | 4.15329% | Actual/360 | 31,710.29 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 118 | 48 | 46 | 360 | 360 | 2 | L(26),D(90),O(4) | 0 | 0 | ||||||||||||||||
58 | Peppertree Lane Apartments | 4.15129% | Actual/360 | 31,241.86 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 120 | 36 | 36 | 360 | 360 | 0 | L(24),D(92),O(4) | 0 | 5 | ||||||||||||||||
59 | 8211 Town Center Drive | 4.31329% | Actual/360 | 34,040.68 | Amortizing Balloon | 120 | 120 | 0 | 0 | 300 | 300 | 0 | L(24),D(92),O(4) | 0 | 5 | |||||||||||||||||
60 | Staybridge Suites Indianapolis Airport | 4.57329% | Actual/360 | 33,691.42 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 119 | 12 | 11 | 300 | 300 | 1 | L(25),D(91),O(4) | 0 | 0 | ||||||||||||||||
61 | Austin Heights Shopping Center | 4.32329% | Actual/360 | 30,081.11 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 120 | 24 | 24 | 360 | 360 | 0 | L(24),D(92),O(4) | 10 | 10 | ||||||||||||||||
62 | Walgreens - Duncanville, TX | 4.40329% | Actual/360 | 30,352.67 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 120 | 60 | 60 | 300 | 300 | 0 | L(24),D(92),O(4) | 0 | 5 | ||||||||||||||||
63 | Trojan Storage of Roseville | 4.26329% | Actual/360 | 26,814.93 | Amortizing Balloon | 120 | 119 | 0 | 0 | 360 | 359 | 1 | L(25),D(91),O(4) | 0 | 5 | |||||||||||||||||
64 | Lakeside Plaza | 4.86329% | Actual/360 | 28,414.38 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 119 | 24 | 23 | 360 | 360 | 1 | L(25),D(91),O(4) | 0 | 5 | ||||||||||||||||
65 | Green Acres MHP | 4.28329% | Actual/360 | 26,259.32 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 120 | 12 | 12 | 360 | 360 | 0 | L(24),D(92),O(4) | 0 | 5 | ||||||||||||||||
66 | Mendicino Green Apartment Corp. | 3.38329% | Actual/360 | 20,436.47 | Amortizing Balloon | 120 | 119 | 0 | 0 | 480 | 479 | 1 | GRTR 1% or YM(113),1%(3),O(4) | 10 | 10 | |||||||||||||||||
67 | Walgreens - Richmond Heights | 4.21329% | Actual/360 | 24,764.27 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 118 | 36 | 34 | 360 | 360 | 2 | L(26),D(90),O(4) | 0 | 0 | ||||||||||||||||
68 | Rivertown Center | 4.16329% | Actual/360 | 24,421.68 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 119 | 24 | 23 | 360 | 360 | 1 | L(25),D(91),O(4) | 0 | 5 | ||||||||||||||||
69 | Bristol House, Inc. | 3.37329% | Actual/360 | 22,340.74 | Amortizing Balloon | 120 | 119 | 0 | 0 | 360 | 359 | 1 | GRTR 1% or YM(113),1%(3),O(4) | 10 | 10 | |||||||||||||||||
70 | Storaway Self Storage - Nashville | 4.04329% | Actual/360 | 17,365.51 | Interest-only, Balloon | Actual/360 | 120 | 120 | 120 | 120 | 0 | 0 | 0 | L(24),D(92),O(4) | 0 | 5 | ||||||||||||||||
71 | Bella Luna / San Lucas | 3.92460% | Actual/360 | 23,723.99 | Amortizing Balloon | 60 | 54 | 0 | 0 | 360 | 354 | 6 | L(30),D(26),O(4) | 0 | 0 | |||||||||||||||||
72 | Seacoast Self Storage | 4.55329% | Actual/360 | 24,958.75 | Amortizing Balloon | 120 | 119 | 0 | 0 | 360 | 359 | 1 | L(25),D(91),O(4) | 0 | 0 | |||||||||||||||||
73 | 230 Garth Road Owners, Inc. | 3.29329% | Actual/360 | 20,127.97 | Amortizing Balloon | 120 | 119 | 0 | 0 | 360 | 359 | 1 | GRTR 1% or YM(113),1%(3),O(4) | 10 | 10 | |||||||||||||||||
74 | Comfort Suites - Near the Galleria | 4.52329% | Actual/360 | 24,246.46 | Amortizing Balloon | 120 | 119 | 0 | 0 | 300 | 299 | 1 | L(25),D(91),O(4) | 0 | 0 | |||||||||||||||||
75 | Sandstone Apartments | 5.36329% | Actual/360 | 23,558.08 | Amortizing Balloon | 60 | 59 | 0 | 0 | 360 | 359 | 1 | L(25),D(31),O(4) | 0 | 0 | |||||||||||||||||
76 | Tieton Village | 4.01329% | Actual/360 | 19,188.97 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 119 | 60 | 59 | 360 | 360 | 1 | L(25),D(91),O(4) | 0 | 5 | ||||||||||||||||
77 | Highland Terrace Housing Development Fund Corporation | 3.71329% | Actual/360 | 18,638.29 | Amortizing Balloon | 120 | 119 | 0 | 0 | 360 | 359 | 1 | GRTR 1% or YM(83),1%(33),O(4) | 10 | 10 | |||||||||||||||||
78 | Cooperstown Commons Shopping Center | 4.25329% | Actual/360 | 21,465.06 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 118 | 18 | 16 | 300 | 300 | 2 | L(26),D(90),O(4) | 0 | 0 | ||||||||||||||||
79 | Lake Lucina Shopping Center | 4.44329% | Actual/360 | 19,258.28 | Amortizing Balloon | 120 | 115 | 0 | 0 | 360 | 355 | 5 | L(29),D(87),O(4) | 0 | 10 | |||||||||||||||||
80 | Silver Bridge Plaza | 4.47329% | Actual/360 | 20,843.72 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 118 | 12 | 10 | 300 | 300 | 2 | L(26),D(90),O(4) | 0 | 0 | ||||||||||||||||
81 | Karen Gardens Apartment Corp. | 3.48329% | Actual/360 | 16,533.09 | Amortizing Balloon | 120 | 120 | 0 | 0 | 360 | 360 | 0 | GRTR 1% or YM(83),1%(33),O(4) | 10 | 10 | |||||||||||||||||
82 | East Haven Self Storage | 4.65329% | Actual/360 | 17,696.32 | Amortizing Balloon | 120 | 119 | 0 | 0 | 360 | 359 | 1 | L(25),D(91),O(4) | 0 | 0 | |||||||||||||||||
83 | Walgreens - Milwaukee | 4.27329% | Actual/360 | 17,970.88 | Amortizing ARD | 120 | 119 | 0 | 0 | 300 | 299 | 1 | L(25),D(91),O(4) | 0 | 5 |
A-1-5 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Mortgage Loan Number | Property Name | Net Mortgage Rate | Interest Accrual Method | Monthly P&I Payment ($) | Amortization Type | Interest Accrual Method During IO | Original Term to Maturity or ARD (Mos.) | Remaining Term to Maturity or ARD (Mos.) | Original IO Period (Mos.) | Remaining IO Period (Mos.) | Original Amort Term (Mos.) | Remaining Amort Term (Mos.) | Seasoning | Prepayment Provisions | Grace Period Default (Days) | Grace Period Late (Days)(4) | ||||||||||||||||
84 | Haggen Food & Pharmacy | 4.31729% | Actual/360 | 15,994.12 | Amortizing ARD | 120 | 120 | 0 | 0 | 360 | 360 | 0 | L(24),D(93),O(3) | 0 | 0 | |||||||||||||||||
85 | Sycamore Terrace | 4.70329% | Actual/360 | 16,591.71 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 119 | 60 | 59 | 360 | 360 | 1 | L(24),GRTR 1% or YM(89),O(7) | 0 | 10 | ||||||||||||||||
86 | Ramona Plaza Shopping Center | 4.23329% | Actual/360 | 15,742.96 | Amortizing Balloon | 120 | 120 | 0 | 0 | 360 | 360 | 0 | L(24),D(92),O(4) | 0 | 5 | |||||||||||||||||
87 | All A/C Self Storage | 4.58329% | Actual/360 | 16,167.13 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 120 | 12 | 12 | 360 | 360 | 0 | L(23),GRTR 1% or YM(93),O(4) | 0 | 0 | ||||||||||||||||
88 | Pecue MHC | 4.28329% | Actual/360 | 15,606.95 | Amortizing Balloon | 120 | 119 | 0 | 0 | 360 | 359 | 1 | L(25),D(91),O(4) | 0 | 5 | |||||||||||||||||
89 | Regency Park Owners Corp. | 3.54329% | Actual/360 | 14,146.32 | Amortizing Balloon | 120 | 120 | 0 | 0 | 360 | 360 | 0 | GRTR 1% or YM(83),1%(33),O(4) | 10 | 10 | |||||||||||||||||
90 | Storaway Self Storage - Deltona II | 4.04329% | Actual/360 | 10,471.67 | Interest-only, Balloon | Actual/360 | 120 | 120 | 120 | 120 | 0 | 0 | 0 | L(24),D(92),O(4) | 0 | 5 | ||||||||||||||||
91 | Lakewood Place Shopping Center | 4.37329% | Actual/360 | 15,022.83 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 120 | 24 | 24 | 360 | 360 | 0 | L(24),D(92),O(4) | 0 | 5 | ||||||||||||||||
92 | Hacienda Heights Apartments | 4.11329% | Actual/360 | 14,565.65 | Amortizing Balloon | 120 | 119 | 0 | 0 | 360 | 359 | 1 | L(25),D(91),O(4) | 0 | 5 | |||||||||||||||||
93 | Nagle House, Inc. | 3.68329% | Actual/360 | 13,927.54 | Amortizing Balloon | 120 | 119 | 0 | 0 | 360 | 359 | 1 | GRTR 1% or YM(113),1%(3),O(4) | 10 | 10 | |||||||||||||||||
94 | Walgreens - Warrensburg, MO | 4.07329% | Actual/360 | 15,707.86 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 120 | 60 | 60 | 300 | 300 | 0 | L(24),D(92),O(4) | 0 | 5 | ||||||||||||||||
95 | 230 Tenants Corporation | 3.46329% | Actual/360 | 8,722.15 | Interest-only, Balloon | Actual/360 | 120 | 120 | 120 | 120 | 0 | 0 | 0 | GRTR 1% or YM(113),1%(3),O(4) | 10 | 10 | ||||||||||||||||
96 | Shackelford Center | 4.05329% | Actual/360 | 13,689.90 | Amortizing Balloon | 120 | 119 | 0 | 0 | 360 | 359 | 1 | L(25),D(91),O(4) | 0 | 5 | |||||||||||||||||
97 | De La Cruz Professional Center | 4.28329% | Actual/360 | 14,046.26 | Amortizing Balloon | 60 | 59 | 0 | 0 | 360 | 359 | 1 | L(25),D(31),O(4) | 0 | 5 | |||||||||||||||||
98 | Folcroft Self Storage | 4.55329% | Actual/360 | 14,320.59 | Amortizing Balloon | 120 | 120 | 0 | 0 | 360 | 360 | 0 | L(24),D(92),O(4) | 0 | 0 | |||||||||||||||||
99 | Storaway Self Storage - Palm Bay | 4.04329% | Actual/360 | 9,511.76 | Interest-only, Balloon | Actual/360 | 120 | 120 | 120 | 120 | 0 | 0 | 0 | L(24),D(92),O(4) | 0 | 5 | ||||||||||||||||
100 | Bowen Tower Apartments | 4.59329% | Actual/360 | 14,164.82 | Amortizing Balloon | 120 | 115 | 0 | 0 | 360 | 355 | 5 | L(29),D(87),O(4) | 10 | 10 | |||||||||||||||||
101 | 321 West 90th St. Owners Corp. | 3.61329% | Actual/360 | 11,507.07 | Amortizing Balloon | 120 | 120 | 0 | 0 | 360 | 360 | 0 | GRTR 1% or YM(113),1%(3),O(4) | 10 | 10 | |||||||||||||||||
102 | West Friendship Shopping Center | 4.30329% | Actual/360 | 12,004.09 | Amortizing Balloon | 120 | 118 | 0 | 0 | 360 | 358 | 2 | GRTR 1% or YM(116),O(4) | 10 | 10 | |||||||||||||||||
103 | Crestview Self Storage | 3.85329% | Actual/360 | 17,608.53 | Amortizing Balloon | 120 | 119 | 0 | 0 | 180 | 179 | 1 | L(25),D(91),O(4) | 0 | 5 | |||||||||||||||||
104 | Denn Owners Corporation | 3.79329% | Actual/360 | 10,586.77 | Amortizing Balloon | 120 | 116 | 0 | 0 | 360 | 356 | 4 | GRTR 1% or YM(113),1%(3),O(4) | 10 | 10 | |||||||||||||||||
105 | Moundsville Plaza | 4.70329% | Actual/360 | 12,659.53 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 118 | 12 | 10 | 300 | 300 | 2 | L(26),D(90),O(4) | 0 | 0 | ||||||||||||||||
106 | Storaway Self Storage- Deltona I | 4.04329% | Actual/360 | 7,330.17 | Interest-only, Balloon | Actual/360 | 120 | 120 | 120 | 120 | 0 | 0 | 0 | L(24),D(92),O(4) | 0 | 5 | ||||||||||||||||
107 | Sedona Peak Apartments | 4.10329% | Actual/360 | 9,878.97 | Amortizing Balloon | 120 | 120 | 0 | 0 | 360 | 360 | 0 | L(24),D(92),O(4) | 0 | 5 | |||||||||||||||||
108 | Sea Breeze Town Houses Owners, Inc. | 3.64329% | Actual/360 | 6,320.28 | Interest-only, Balloon | Actual/360 | 120 | 120 | 120 | 120 | 0 | 0 | 0 | GRTR 1% or YM(113),1%(3),O(4) | 10 | 10 | ||||||||||||||||
109 | Willow Lake Shops | 4.48329% | Actual/360 | 10,217.06 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 118 | 12 | 10 | 360 | 360 | 2 | L(26),D(90),O(4) | 10 | 10 | ||||||||||||||||
110 | Wickham Park Commons | 4.36329% | Actual/360 | 9,803.34 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 120 | 24 | 24 | 360 | 360 | 0 | L(24),D(92),O(4) | 0 | 5 | ||||||||||||||||
111 | Crown Pointe Plaza | 4.37329% | Actual/360 | 9,455.84 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 117 | 12 | 9 | 360 | 360 | 3 | L(27),D(89),O(4) | 10 | 10 | ||||||||||||||||
112 | Hartsdale Executive House, Inc. | 3.68329% | Actual/360 | 8,356.52 | Amortizing Balloon | 120 | 120 | 0 | 0 | 360 | 360 | 0 | GRTR 1% or YM(113),1%(3),O(4) | 10 | 10 | |||||||||||||||||
113 | 25 Chapel Corp. | 3.38329% | Actual/360 | 8,052.69 | Amortizing Balloon | 120 | 119 | 0 | 0 | 360 | 359 | 1 | GRTR 1% or YM(113),1%(3),O(4) | 10 | 10 | |||||||||||||||||
114 | Market Place Village | 4.18329% | Actual/360 | 8,382.89 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 117 | 12 | 9 | 360 | 360 | 3 | L(27),D(89),O(4) | 10 | 10 | ||||||||||||||||
115 | Kingstowne Shops | 4.22329% | Actual/360 | 7,994.02 | Amortizing Balloon | 120 | 119 | 0 | 0 | 360 | 359 | 1 | L(25),D(91),O(4) | 0 | 5 | |||||||||||||||||
116 | 109-111 N. Broadway Apt. Corp. | 3.67329% | Actual/360 | 7,534.85 | Amortizing Balloon | 120 | 117 | 0 | 0 | 360 | 357 | 3 | GRTR 1% or YM(83),1%(33),O(4) | 10 | 10 | |||||||||||||||||
117 | 40 Prospect Park West Owners Corp. | 3.51329% | Actual/360 | 7,274.33 | Amortizing Balloon | 120 | 119 | 0 | 0 | 360 | 359 | 1 | GRTR 1% or YM(113),1%(3),O(4) | 10 | 10 | |||||||||||||||||
118 | Shops of Orland Park | 4.50329% | Actual/360 | 7,881.28 | Interest-only, Amortizing Balloon | Actual/360 | 120 | 120 | 24 | 24 | 360 | 360 | 0 | L(24),D(92),O(4) | 0 | 5 | ||||||||||||||||
119 | Victorville Retail Center | 4.05329% | Actual/360 | 5,248.54 | Interest-only, Balloon | Actual/360 | 120 | 118 | 120 | 118 | 0 | 0 | 2 | L(26),D(81),O(13) | 0 | 5 | ||||||||||||||||
120 | 6 West 20th St. Tenants Corp. | 3.56329% | Actual/360 | 6,861.89 | Amortizing Balloon | 120 | 119 | 0 | 0 | 360 | 359 | 1 | GRTR 1% or YM(113),1%(3),O(4) | 10 | 10 | |||||||||||||||||
121 | 50-22 Owners Ltd. | 3.55329% | Actual/360 | 5,937.48 | Amortizing Balloon | 120 | 117 | 0 | 0 | 480 | 477 | 3 | GRTR 1% or YM(113),1%(3),O(4) | 10 | 10 | |||||||||||||||||
122 | 585 McLean Owners, Inc. | 3.54329% | Actual/360 | 5,533.16 | Amortizing Balloon | 120 | 120 | 0 | 0 | 480 | 480 | 0 | GRTR 1% or YM(113),1%(3),O(4) | 10 | 10 | |||||||||||||||||
123 | 12 West 17th St. Tenants' Corp. | 3.72329% | Actual/360 | 5,686.80 | Amortizing Balloon | 120 | 117 | 0 | 0 | 480 | 477 | 3 | GRTR 1% or YM(113),1%(3),O(4) | 10 | 10 | |||||||||||||||||
124 | Gillespie Field Business Park | 4.35329% | Actual/360 | 6,598.72 | Amortizing Balloon | 120 | 119 | 0 | 0 | 360 | 359 | 1 | L(25),D(91),O(4) | 0 | 5 | |||||||||||||||||
125 | Waters at West End, Inc. | 3.75329% | Actual/360 | 5,735.91 | Amortizing Balloon | 120 | 118 | 0 | 0 | 360 | 358 | 2 | GRTR 1% or YM(113),1%(3),O(4) | 10 | 10 | |||||||||||||||||
126 | Jones St. Owners Corporation | 3.59329% | Actual/360 | 5,509.83 | Amortizing Balloon | 120 | 117 | 0 | 0 | 360 | 357 | 3 | GRTR 1% or YM(113),1%(3),O(4) | 10 | 10 | |||||||||||||||||
127 | Big Lots Plaza | 4.13329% | Actual/360 | 6,413.70 | Amortizing Balloon | 84 | 83 | 0 | 0 | 300 | 299 | 1 | L(25),D(55),O(4) | 0 | 5 | |||||||||||||||||
128 | 30 Bond Street Owners Corp. | 3.61329% | Actual/360 | 5,293.25 | Amortizing Balloon | 120 | 117 | 0 | 0 | 360 | 357 | 3 | GRTR 1% or YM(113),1%(3),O(4) | 10 | 10 | |||||||||||||||||
129 | 166 West 76th Apartment Corp. | 3.73329% | Actual/360 | 5,138.06 | Amortizing Balloon | 120 | 118 | 0 | 0 | 360 | 358 | 2 | GRTR 1% or YM(83),1%(33),O(4) | 10 | 10 | |||||||||||||||||
130 | Hanna Shoppes | 4.22329% | Actual/360 | 5,165.37 | Amortizing Balloon | 120 | 119 | 0 | 0 | 360 | 359 | 1 | L(25),D(91),O(4) | 0 | 5 | |||||||||||||||||
131 | Carroll Gardens Owners, Corp. | 3.71329% | Actual/360 | 4,659.57 | Amortizing Balloon | 120 | 120 | 0 | 0 | 360 | 360 | 0 | GRTR 1% or YM(113),1%(3),O(4) | 10 | 10 | |||||||||||||||||
132 | 170 East 92nd Street Owners, Inc. | 3.67329% | Actual/360 | 3,709.47 | Amortizing Balloon | 120 | 120 | 0 | 0 | 360 | 360 | 0 | GRTR 1% or YM(113),1%(3),O(4) | 10 | 10 | |||||||||||||||||
133 | 17 Warren Street Tenants Corporation | 3.87329% | Actual/360 | 2,516.25 | Interest-only, Balloon | Actual/360 | 120 | 116 | 120 | 116 | 0 | 0 | 4 | GRTR 1% or YM(113),1%(3),O(4) | 10 | 10 |
A-1-6 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Mortgage Loan Number | Property Name | Appraised Value ($)(5) | Appraisal Date | Coop -Rental Value | Coop - LTV as Rental | Coop - Unsold Percent | Coop - Sponsor Units | Coop - Investor Units | Coop - Coop Units | Coop - Sponsor Carry | Coop - Committed Secondary Debt | U/W NOI DSCR (x)(3) | U/W NCF DSCR (x)(3) | Cut-off Date LTV Ratio(3)(5) | LTV Ratio at Maturity or ARD(3)(5) | Cut-off Date U/W NOI Debt Yield(3) | Cut-off Date U/W NCF Debt Yield(3) | U/W Revenues ($) | ||||||||||||||||||
1 | Hutchinson Metro Center I | 142,000,000 | 4/1/2015 | 1.56 | 1.40 | 70.4% | 61.2% | 9.1% | 8.2% | 16,203,748 | ||||||||||||||||||||||||||
2 | Cathedral Place | 57,000,000 | 01/07/2015 | 1.55 | 1.41 | 70.0% | 59.2% | 9.0% | 8.2% | 6,150,769 | ||||||||||||||||||||||||||
3 | 150 Royall Street | 58,900,000 | 2/25/2015 | 1.61 | 1.41 | 64.8% | 59.0% | 9.4% | 8.2% | 6,382,931 | ||||||||||||||||||||||||||
4 | WPC Self Storage Portfolio VII | 57,350,000 | Various | 2.08 | 2.00 | 64.9% | 64.9% | 9.1% | 8.7% | 5,789,282 | ||||||||||||||||||||||||||
4.01 | Extra Space Louisville KY | 10,200,000 | 4/1/2015 | 1,057,233 | ||||||||||||||||||||||||||||||||
4.02 | Extra Space Las Vegas NV | 9,800,000 | 4/7/2015 | 822,121 | ||||||||||||||||||||||||||||||||
4.03 | CubeSmart Joan Panama City Beach FL | 9,500,000 | 4/25/2015 | 749,930 | ||||||||||||||||||||||||||||||||
4.04 | CubeSmart Tallahassee FL | 7,600,000 | 4/8/2015 | 806,991 | ||||||||||||||||||||||||||||||||
4.05 | Extra Space Lady Lake FL | 6,100,000 | 4/1/2015 | 646,246 | ||||||||||||||||||||||||||||||||
4.06 | CubeSmart Crystal Lake IL | 4,050,000 | 4/3/2015 | 510,945 | ||||||||||||||||||||||||||||||||
4.07 | CubeSmart Hutchinson Panama City Beach FL | 4,000,000 | 4/8/2015 | 438,405 | ||||||||||||||||||||||||||||||||
4.08 | Extra Space Lilburn GA | 3,600,000 | 4/2/2015 | 435,267 | ||||||||||||||||||||||||||||||||
4.09 | Extra Space Stockbridge GA | 2,500,000 | 4/2/2015 | 322,145 | ||||||||||||||||||||||||||||||||
5 | Queens' MarketPlace | 55,500,000 | 4/1/2015 | 2.25 | 2.10 | 63.1% | 63.1% | 9.4% | 8.8% | 7,144,696 | ||||||||||||||||||||||||||
6 | El Sol Brillante and Laguna Del Sol Apartments | 39,310,000 | 4/7/2015 | 1.80 | 1.68 | 73.1% | 66.7% | 10.7% | 10.0% | 6,319,448 | ||||||||||||||||||||||||||
6.01 | Laguna Del Sol Apartments | 20,330,000 | 4/7/2015 | 3,230,705 | ||||||||||||||||||||||||||||||||
6.02 | El Sol Brillante Apartments | 18,980,000 | 4/7/2015 | 3,088,743 | ||||||||||||||||||||||||||||||||
7 | Country Club Center | 36,000,000 | 3/23/2015 | 1.29 | 1.24 | 75.0% | 60.4% | 7.7% | 7.5% | 3,186,714 | ||||||||||||||||||||||||||
8 | Parkway Crossing East Shopping Center | 35,000,000 | 2/10/2015 | 1.48 | 1.38 | 74.9% | 59.9% | 8.6% | 8.0% | 2,962,282 | ||||||||||||||||||||||||||
9 | Olmsted Plaza Shopping Center | 35,370,000 | 2/11/2015 | 1.70 | 1.57 | 72.1% | 65.5% | 9.8% | 9.1% | 4,250,049 | ||||||||||||||||||||||||||
10 | Hall Office Park | 34,600,000 | 3/20/2015 | 1.49 | 1.35 | 73.7% | 60.7% | 8.8% | 7.9% | 3,845,173 | ||||||||||||||||||||||||||
11 | Dulles North Corporate Parks | 41,900,000 | Various | 1.65 | 1.50 | 59.6% | 43.5% | 10.8% | 9.8% | 3,603,745 | ||||||||||||||||||||||||||
11.01 | Dulles North Corporate Park 5 | 23,700,000 | 3/23/2015 | 2,037,937 | ||||||||||||||||||||||||||||||||
11.02 | Dulles North Corporate Park 2 | 18,200,000 | 3/26/2015 | 1,565,808 | ||||||||||||||||||||||||||||||||
12 | Coastal Village Apartments | 32,700,000 | 12/22/2014 | 1.49 | 1.40 | 73.4% | 62.4% | 8.9% | 8.3% | 4,815,207 | ||||||||||||||||||||||||||
13 | Foothills Park Place | 39,000,000 | 3/9/2015 | 2.63 | 2.40 | 59.0% | 59.0% | 11.1% | 10.1% | 3,388,274 | ||||||||||||||||||||||||||
14 | Smiths Medical | 35,400,000 | 4/1/2015 | 1.77 | 1.61 | 62.9% | 57.5% | 10.7% | 9.8% | 4,125,555 | ||||||||||||||||||||||||||
15 | Hunterstone Apartments | 25,375,000 | 4/8/2015 | 1.36 | 1.30 | 74.9% | 66.9% | 8.2% | 7.8% | 2,512,786 | ||||||||||||||||||||||||||
16 | Magnolia Marketplace | 25,400,000 | 03/06/2015 | 1.33 | 1.27 | 74.4% | 59.5% | 7.8% | 7.5% | 2,179,860 | ||||||||||||||||||||||||||
17 | Norfolk Commerce Park | 25,750,000 | 04/27/2015 | 2.18 | 1.84 | 69.9% | 61.0% | 13.1% | 11.0% | 3,731,793 | ||||||||||||||||||||||||||
18 | Summer Bend Apartments | 24,875,000 | 4/13/2015 | 1.58 | 1.50 | 70.4% | 61.8% | 9.8% | 9.3% | 3,060,400 | ||||||||||||||||||||||||||
19 | Baywoods of Annapolis | 57,000,000 | 4/20/2015 | 36,900,000 | 44.7% | 0.0% | 0 | 0 | 0 | 5,000,000 | 2.20 | 2.20 | 28.9% | 23.6% | 13.7% | 13.7% | 11,805,692 | |||||||||||||||||||
20 | Rock Hill Hampton Inn | 24,300,000 | 4/20/2015 | 1.93 | 1.68 | 65.8% | 52.2% | 12.6% | 11.0% | 5,147,607 | ||||||||||||||||||||||||||
21 | Louisville Plaza | 22,200,000 | 2/19/2015 | 2.01 | 1.82 | 69.8% | 69.8% | 8.8% | 8.0% | 2,031,270 | ||||||||||||||||||||||||||
22 | Marquis Place | 20,000,000 | 1/12/2015 | 1.38 | 1.36 | 75.0% | 61.9% | 8.2% | 8.0% | 1,787,761 | ||||||||||||||||||||||||||
23 | Riverside Technology Park A & B | 25,500,000 | 4/9/2015 | 1.86 | 1.63 | 57.8% | 46.3% | 11.0% | 9.6% | 2,105,905 | ||||||||||||||||||||||||||
24 | Maricopa Fiesta | 18,600,000 | 12/26/2014 | 1.43 | 1.31 | 74.3% | 64.8% | 8.5% | 7.8% | 1,823,708 | ||||||||||||||||||||||||||
25 | Dunwoody Place | 19,550,000 | 4/7/2015 | 1.49 | 1.40 | 66.5% | 56.3% | 8.8% | 8.2% | 1,704,523 | ||||||||||||||||||||||||||
26 | Jackson Square Apartments | 17,000,000 | 4/28/2016 | 1.35 | 1.32 | 74.6% | 55.1% | 9.2% | 8.9% | 1,803,094 | ||||||||||||||||||||||||||
27 | Shops at Doral | 18,500,000 | 3/23/2015 | 1.53 | 1.48 | 67.6% | 61.8% | 9.3% | 9.0% | 1,614,342 | ||||||||||||||||||||||||||
28 | Solano Apartments | 17,900,000 | 5/5/2015 | 1.82 | 1.73 | 67.0% | 61.1% | 10.7% | 10.2% | 2,789,257 | ||||||||||||||||||||||||||
29 | Riverchase Apartments | 16,600,000 | 3/25/2015 | 1.31 | 1.23 | 72.3% | 67.5% | 8.0% | 7.5% | 1,877,840 | ||||||||||||||||||||||||||
30 | Old Mills | 16,100,000 | 2/6/2015 | 1.53 | 1.45 | 74.5% | 68.0% | 9.1% | 8.6% | 1,995,378 | ||||||||||||||||||||||||||
31 | Ozinus Realty Property Portfolio | 23,800,000 | Various | 2.92 | 2.39 | 48.4% | 48.4% | 15.3% | 12.5% | 2,767,268 | ||||||||||||||||||||||||||
31.01 | Shiloh Crossing | 5,400,000 | 03/04/2015 | 568,967 | ||||||||||||||||||||||||||||||||
31.02 | Texas Star | 4,050,000 | 03/03/2015 | 474,488 | ||||||||||||||||||||||||||||||||
31.03 | Pitney Bowes | 4,000,000 | 03/05/2015 | 401,202 | ||||||||||||||||||||||||||||||||
31.04 | Towne Crest Village | 3,700,000 | 03/31/2015 | 403,197 | ||||||||||||||||||||||||||||||||
31.05 | Eagle Plaza | 2,650,000 | 03/06/2015 | 366,824 | ||||||||||||||||||||||||||||||||
31.06 | Palmetto | 2,300,000 | 03/04/2015 | 286,721 | ||||||||||||||||||||||||||||||||
31.07 | Hamlin | 1,700,000 | 03/06/2015 | 265,869 | ||||||||||||||||||||||||||||||||
32 | Brickyard Square | 50,500,000 | 1/28/2015 | 1.30 | 1.26 | 72.2% | 63.2% | 7.9% | 7.7% | 3,789,410 | ||||||||||||||||||||||||||
33 | Dos Santos Apartments | 14,800,000 | 4/28/2015 | 1.66 | 1.55 | 75.0% | 59.9% | 9.6% | 9.0% | 1,982,659 | ||||||||||||||||||||||||||
34 | Villa Bella | 15,200,000 | 3/23/2015 | 1.71 | 1.65 | 66.5% | 54.2% | 10.6% | 10.3% | 3,361,391 | ||||||||||||||||||||||||||
35 | Bayview Office Building | 14,200,000 | 3/9/2015 | 1.78 | 1.49 | 69.6% | 56.1% | 10.7% | 8.9% | 2,062,640 | ||||||||||||||||||||||||||
36 | Casa Nube | 13,800,000 | 3/18/2015 | 1.78 | 1.58 | 68.8% | 55.5% | 10.7% | 9.5% | 2,526,045 | ||||||||||||||||||||||||||
37 | Homewood Suites - Tallahassee | 16,100,000 | 3/3/2015 | 2.24 | 2.01 | 58.9% | 43.1% | 14.8% | 13.3% | 3,615,650 | ||||||||||||||||||||||||||
38 | San Mateo Apartments | 12,600,000 | 4/28/2015 | 1.65 | 1.54 | 75.0% | 59.9% | 9.7% | 9.0% | 1,886,935 | ||||||||||||||||||||||||||
39 | Brittany Bay II | 18,000,000 | 03/03/2015 | 2.16 | 2.05 | 52.2% | 41.5% | 12.4% | 11.7% | 2,113,758 | ||||||||||||||||||||||||||
40 | Nexus Town Center | 17,200,000 | 2/21/2015 | 1.99 | 1.85 | 54.3% | 43.2% | 11.4% | 10.6% | 1,506,214 | ||||||||||||||||||||||||||
41 | Cathedral Place - Parking | 13,200,000 | 01/07/2015 | 1.79 | 1.70 | 69.7% | 58.9% | 10.4% | 9.9% | 1,584,741 | ||||||||||||||||||||||||||
42 | Indiana Village | 12,300,000 | 2/5/2015 | 1.58 | 1.42 | 74.8% | 68.0% | 9.2% | 8.3% | 1,858,784 | ||||||||||||||||||||||||||
43 | Fahrens Park Plaza | 14,200,000 | 3/10/2015 | 1.84 | 1.69 | 64.1% | 55.4% | 10.5% | 9.6% | 1,234,706 | ||||||||||||||||||||||||||
44 | Causeway Corporate Centre | 12,000,000 | 2/17/2015 | 1.54 | 1.40 | 74.9% | 60.6% | 9.4% | 8.5% | 1,434,961 | ||||||||||||||||||||||||||
45 | TownePlace Suites St. George by Marriott | 11,100,000 | 1/23/2015 | 2.02 | 1.80 | 69.6% | 54.1% | 12.8% | 11.5% | 2,649,237 | ||||||||||||||||||||||||||
46 | IRG - Ellsworth Bailey Saratoga | 12,000,000 | 2/26/2015 | 1.87 | 1.64 | 64.2% | 46.4% | 12.0% | 10.5% | 1,473,326 | ||||||||||||||||||||||||||
46.01 | Saratoga II | 5,000,000 | 2/26/2015 | 583,142 | ||||||||||||||||||||||||||||||||
46.02 | Saratoga I | 3,700,000 | 2/26/2015 | 457,651 | ||||||||||||||||||||||||||||||||
46.03 | Ellsworth Bailey Lordstown | 3,300,000 | 2/26/2015 | 432,533 | ||||||||||||||||||||||||||||||||
47 | 39-60 54th Street Owners, Inc. | 62,659,906 | 4/9/2015 | 43,000,000 | 17.8% | 4.1% | 9 | 0 | 0 | 48,372 | 750,000 | 8.30 | 8.30 | 12.2% | 10.8% | 40.6% | 40.6% | 4,806,000 | ||||||||||||||||||
48 | Courtyard by Marriott - Shawnee | 12,800,000 | 4/30/2015 | 2.18 | 1.89 | 59.2% | 50.0% | 13.3% | 11.5% | 3,374,462 | ||||||||||||||||||||||||||
49 | Athens Gate Apartments | 10,110,000 | 4/28/2015 | 1.52 | 1.38 | 74.4% | 59.6% | 8.9% | 8.2% | 1,459,209 | ||||||||||||||||||||||||||
50 | Sand Pebble Apartments | 11,100,000 | 4/28/2015 | 1.66 | 1.54 | 67.5% | 54.0% | 9.7% | 9.0% | 1,774,386 | ||||||||||||||||||||||||||
51 | Trojan Storage of Oxnard | 11,000,000 | 3/25/2015 | 1.56 | 1.53 | 67.5% | 54.2% | 9.3% | 9.1% | 1,076,875 | ||||||||||||||||||||||||||
52 | CVS - Lynn, MA | 10,600,000 | 4/2/2015 | 1.78 | 1.78 | 67.9% | 67.9% | 7.8% | 7.7% | 564,853 | ||||||||||||||||||||||||||
53 | Gilbert Crossing | 9,500,000 | 3/2/2015 | 1.71 | 1.58 | 74.0% | 62.5% | 9.8% | 9.1% | 965,564 | ||||||||||||||||||||||||||
54 | 1321 Harbor Bay Parkway | 10,800,000 | 12/1/2014 | 1.77 | 1.62 | 64.8% | 54.9% | 10.4% | 9.5% | 978,468 | ||||||||||||||||||||||||||
55 | Casa Cruz | 9,540,000 | 3/24/2015 | 1.68 | 1.49 | 72.3% | 61.7% | 10.2% | 9.0% | 1,896,058 | ||||||||||||||||||||||||||
56 | Best Western Plus - Windsor Gardens | 9,500,000 | 3/17/2015 | 1.75 | 1.55 | 69.3% | 54.3% | 11.8% | 10.5% | 2,142,600 | ||||||||||||||||||||||||||
57 | Oak Tree Plaza | 10,990,000 | 2/20/2015 | 1.39 | 1.36 | 59.1% | 52.6% | 8.1% | 8.0% | 720,063 | ||||||||||||||||||||||||||
58 | Peppertree Lane Apartments | 8,600,000 | 04/07/2015 | 1.63 | 1.51 | 74.1% | 64.5% | 9.6% | 8.9% | 1,389,290 | ||||||||||||||||||||||||||
59 | 8211 Town Center Drive | 8,400,000 | 4/2/2015 | 1.40 | 1.26 | 73.8% | 53.9% | 9.2% | 8.3% | 830,715 | ||||||||||||||||||||||||||
60 | Staybridge Suites Indianapolis Airport | 9,500,000 | 3/10/2015 | 1.78 | 1.52 | 63.2% | 48.6% | 12.0% | 10.3% | 2,534,202 | ||||||||||||||||||||||||||
61 | Austin Heights Shopping Center | 9,190,000 | 12/22/2014 | 2.00 | 1.80 | 65.3% | 55.6% | 12.0% | 10.8% | 1,102,446 | ||||||||||||||||||||||||||
62 | Walgreens - Duncanville, TX | 8,570,000 | 3/25/2015 | 1.14 | 1.13 | 64.2% | 56.5% | 7.5% | 7.5% | 417,828 | ||||||||||||||||||||||||||
63 | Trojan Storage of Roseville | 7,980,000 | 3/26/2015 | 1.58 | 1.54 | 67.9% | 54.6% | 9.4% | 9.1% | 826,625 | ||||||||||||||||||||||||||
64 | Lakeside Plaza | 12,990,000 | 3/25/2015 | 2.19 | 1.91 | 41.3% | 35.6% | 13.9% | 12.1% | 1,143,019 | ||||||||||||||||||||||||||
65 | Green Acres MHP | 7,750,000 | 4/10/2015 | 1.65 | 1.62 | 68.4% | 56.6% | 9.8% | 9.6% | 875,831 | ||||||||||||||||||||||||||
66 | Mendicino Green Apartment Corp. | 21,300,000 | 3/16/2015 | 16,200,000 | 32.7% | 1.9% | 0 | 0 | 2 | 250,000 | 4.30 | 4.30 | 24.9% | 21.6% | 19.9% | 19.9% | 2,110,017 | |||||||||||||||||||
67 | Walgreens - Richmond Heights | 6,720,000 | 2/18/2015 | 1.36 | 1.36 | 75.0% | 65.3% | 8.0% | 8.0% | 415,800 | ||||||||||||||||||||||||||
68 | Rivertown Center | 7,325,000 | 3/25/2015 | 1.89 | 1.61 | 68.3% | 57.8% | 11.1% | 9.4% | 897,646 | ||||||||||||||||||||||||||
69 | Bristol House, Inc. | 16,750,000 | 3/25/2015 | 14,400,000 | 34.7% | 5.6% | 4 | 0 | 0 | 14,950 | 3.62 | 3.62 | 29.8% | 23.2% | 19.5% | 19.5% | 1,641,665 | |||||||||||||||||||
70 | Storaway Self Storage - Nashville | 10,040,000 | 4/7/2015 | 2.83 | 2.78 | 49.6% | 49.6% | 11.9% | 11.6% | 953,361 | ||||||||||||||||||||||||||
71 | Bella Luna / San Lucas | 35,000,000 | 8/27/2014 | 2.23 | 2.03 | 58.1% | 53.1% | 12.8% | 11.7% | 5,822,334 | ||||||||||||||||||||||||||
72 | Seacoast Self Storage | 6,670,000 | 3/13/2015 | 1.62 | 1.59 | 73.1% | 59.3% | 10.0% | 9.8% | 652,961 | ||||||||||||||||||||||||||
73 | 230 Garth Road Owners, Inc. | 86,700,000 | 2/27/2015 | 67,400,000 | 6.7% | 0.0% | 0 | 0 | 0 | 18.14 | 18.14 | 5.2% | 4.1% | 96.5% | 96.5% | 8,168,480 | ||||||||||||||||||||
74 | Comfort Suites - Near the Galleria | 6,700,000 | 1/14/2015 | 1.90 | 1.66 | 64.7% | 47.6% | 12.8% | 11.2% | 1,740,125 | ||||||||||||||||||||||||||
75 | Sandstone Apartments | 7,490,000 | 4/3/2015 | 1.80 | 1.62 | 56.0% | 52.0% | 12.1% | 10.9% | 1,154,303 | ||||||||||||||||||||||||||
76 | Tieton Village | 5,900,000 | 2/21/2015 | 1.98 | 1.78 | 67.8% | 61.6% | 11.4% | 10.3% | 572,489 | ||||||||||||||||||||||||||
77 | Highland Terrace Housing Development Fund Corporation | 13,910,000 | 2/24/2015 | 12,500,000 | 32.0% | 2.1% | 0 | 0 | 2 | 3.92 | 3.92 | 28.7% | 22.7% | 22.0% | 22.0% | 1,697,403 | ||||||||||||||||||||
78 | Cooperstown Commons Shopping Center | 5,700,000 | 2/11/2015 | 1.74 | 1.60 | 69.3% | 53.8% | 11.4% | 10.4% | 767,546 | ||||||||||||||||||||||||||
79 | Lake Lucina Shopping Center | 5,100,000 | 10/6/2014 | 1.85 | 1.58 | 73.8% | 60.1% | 11.4% | 9.7% | 608,083 | ||||||||||||||||||||||||||
80 | Silver Bridge Plaza | 5,000,000 | 1/19/2015 | 1.78 | 1.47 | 75.0% | 57.5% | 11.9% | 9.8% | 706,643 | ||||||||||||||||||||||||||
81 | Karen Gardens Apartment Corp. | 15,300,000 | 3/10/2015 | 9,700,000 | 37.6% | 0.0% | 0 | 0 | 0 | 500,000 | 3.43 | 3.43 | 23.9% | 18.7% | 18.6% | 18.6% | 1,257,686 | |||||||||||||||||||
82 | East Haven Self Storage | 4,600,000 | 2/24/2015 | 1.44 | 1.41 | 74.3% | 60.5% | 8.9% | 8.8% | 441,105 | ||||||||||||||||||||||||||
83 | Walgreens - Milwaukee | 4,850,000 | 2/20/2015 | 1.27 | 1.26 | 67.7% | 49.5% | 8.3% | 8.3% | 303,878 |
A-1-7 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Mortgage Loan Number | Property Name | Appraised Value ($)(5) | Appraisal Date | Coop -Rental Value | Coop - LTV as Rental | Coop - Unsold Percent | Coop - Sponsor Units | Coop - Investor Units | Coop - Coop Units | Coop - Sponsor Carry | Coop - Committed Secondary Debt | U/W NOI DSCR (x)(3) | U/W NCF DSCR (x)(3) | Cut-off Date LTV Ratio(3)(5) | LTV Ratio at Maturity or ARD(3)(5) | Cut-off Date U/W NOI Debt Yield(3) | Cut-off Date U/W NCF Debt Yield(3) | U/W Revenues ($) | ||||||||||||||||||
84 | Haggen Food & Pharmacy | 5,500,000 | 4/18/2015 | 1.65 | 1.49 | 58.2% | 46.9% | 9.9% | 9.0% | 326,080 | ||||||||||||||||||||||||||
85 | Sycamore Terrace | 4,300,000 | 4/7/2015 | 1.38 | 1.29 | 74.1% | 68.1% | 8.6% | 8.1% | 505,903 | ||||||||||||||||||||||||||
86 | Ramona Plaza Shopping Center | 4,550,000 | 4/18/2015 | 1.68 | 1.52 | 70.0% | 56.2% | 10.0% | 9.0% | 506,288 | ||||||||||||||||||||||||||
87 | All A/C Self Storage | 4,300,000 | 3/12/2015 | 1.41 | 1.38 | 73.3% | 61.1% | 8.7% | 8.5% | 461,783 | ||||||||||||||||||||||||||
88 | Pecue MHC | 4,200,000 | 3/5/2015 | 1.51 | 1.47 | 74.9% | 60.3% | 9.0% | 8.8% | 472,429 | ||||||||||||||||||||||||||
89 | Regency Park Owners Corp. | 15,100,000 | 4/3/2015 | 11,700,000 | 26.5% | 1.5% | 1 | 0 | 0 | 8,885 | 500,000 | 4.66 | 4.66 | 20.5% | 16.1% | 25.5% | 25.5% | 1,435,506 | ||||||||||||||||||
90 | Storaway Self Storage - Deltona II | 6,100,000 | 4/7/2015 | 2.85 | 2.77 | 49.2% | 49.2% | 11.9% | 11.6% | 672,447 | ||||||||||||||||||||||||||
91 | Lakewood Place Shopping Center | 4,000,000 | 4/10/2015 | 1.60 | 1.47 | 75.0% | 63.9% | 9.6% | 8.9% | 379,143 | ||||||||||||||||||||||||||
92 | Hacienda Heights Apartments | 6,195,000 | 3/26/2015 | 1.68 | 1.60 | 48.4% | 38.7% | 9.8% | 9.4% | 426,076 | ||||||||||||||||||||||||||
93 | Nagle House, Inc. | 48,190,000 | 4/21/2014 | 20,600,000 | 14.5% | 1.1% | 0 | 0 | 2 | 500,000 | 8.62 | 8.62 | 6.2% | 4.9% | 48.1% | 48.1% | 3,477,038 | |||||||||||||||||||
94 | Walgreens - Warrensburg, MO | 4,975,000 | 1/19/2015 | 1.52 | 1.51 | 59.2% | 51.8% | 9.7% | 9.7% | 289,060 | ||||||||||||||||||||||||||
95 | 230 Tenants Corporation | 44,500,000 | 4/16/2015 | 13,800,000 | 21.0% | 0.0% | 0 | 0 | 0 | 500,000 | 8.89 | 8.89 | 6.5% | 6.5% | 32.1% | 32.1% | 2,307,455 | |||||||||||||||||||
96 | Shackelford Center | 4,600,000 | 3/20/2015 | 1.95 | 1.72 | 61.7% | 49.2% | 11.3% | 10.0% | 530,879 | ||||||||||||||||||||||||||
97 | De La Cruz Professional Center | 3,850,000 | 4/16/2015 | 1.98 | 1.81 | 73.5% | 67.2% | 11.8% | 10.8% | 450,206 | ||||||||||||||||||||||||||
98 | Folcroft Self Storage | 4,000,000 | 2/19/2015 | 1.75 | 1.71 | 70.0% | 56.8% | 10.8% | 10.5% | 510,634 | ||||||||||||||||||||||||||
99 | Storaway Self Storage - Palm Bay | 5,750,000 | 4/7/2015 | 3.11 | 3.02 | 47.4% | 47.4% | 13.0% | 12.6% | 647,392 | ||||||||||||||||||||||||||
100 | Bowen Tower Apartments | 3,700,000 | 10/28/2014 | 1.87 | 1.61 | 73.5% | 60.2% | 11.7% | 10.1% | 735,844 | ||||||||||||||||||||||||||
101 | 321 West 90th St. Owners Corp. | 45,648,492 | 2/17/2015 | 24,600,000 | 10.2% | 18.0% | 9 | 0 | 0 | 57,605 | 500,000 | 12.03 | 12.03 | 5.5% | 4.3% | 66.5% | 66.5% | 2,268,508 | ||||||||||||||||||
102 | West Friendship Shopping Center | 3,200,000 | 10/10/2014 | 1.71 | 1.63 | 74.8% | 60.4% | 10.3% | 9.8% | 366,537 | ||||||||||||||||||||||||||
103 | Crestview Self Storage | 4,900,000 | 3/17/2015 | 1.45 | 1.41 | 48.8% | 19.8% | 12.8% | 12.4% | 569,055 | ||||||||||||||||||||||||||
104 | Denn Owners Corporation | 11,170,000 | 11/25/2014 | 7,300,000 | 30.6% | 34.2% | 25 | 0 | 0 | 62,121 | 250,000 | 3.73 | 3.73 | 20.0% | 15.9% | 21.2% | 21.2% | 1,132,523 | ||||||||||||||||||
105 | Moundsville Plaza | 3,300,000 | 1/13/2015 | 1.97 | 1.65 | 67.4% | 52.1% | 13.5% | 11.3% | 469,618 | ||||||||||||||||||||||||||
106 | Storaway Self Storage- Deltona I | 4,350,000 | 4/7/2015 | 2.95 | 2.87 | 48.3% | 48.3% | 12.3% | 12.0% | 459,433 | ||||||||||||||||||||||||||
107 | Sedona Peak Apartments | 4,070,000 | 4/28/2015 | 2.34 | 2.15 | 49.8% | 39.8% | 13.7% | 12.6% | 581,501 | ||||||||||||||||||||||||||
108 | Sea Breeze Town Houses Owners, Inc. | 7,170,000 | 3/24/2015 | 4,500,000 | 44.4% | 0.0% | 0 | 0 | 0 | 100,000 | 4.43 | 4.43 | 27.9% | 27.9% | 16.8% | 16.8% | 492,480 | |||||||||||||||||||
109 | Willow Lake Shops | 2,800,000 | 1/5/2015 | 1.66 | 1.51 | 71.4% | 59.5% | 10.2% | 9.3% | 260,626 | ||||||||||||||||||||||||||
110 | Wickham Park Commons | 2,800,000 | 3/27/2015 | 1.55 | 1.41 | 70.0% | 59.6% | 9.3% | 8.5% | 314,874 | ||||||||||||||||||||||||||
111 | Crown Pointe Plaza | 3,365,000 | 12/10/2014 | 2.44 | 2.09 | 55.7% | 46.3% | 14.7% | 12.6% | 465,753 | ||||||||||||||||||||||||||
112 | Hartsdale Executive House, Inc. | 16,500,000 | 2/27/2015 | 14,700,000 | 12.2% | 1.2% | 1 | 0 | 0 | 2,416 | 350,000 | 10.29 | 10.29 | 10.9% | 8.6% | 57.3% | 57.3% | 1,847,601 | ||||||||||||||||||
113 | 25 Chapel Corp. | 18,700,000 | 3/25/2015 | 11,500,000 | 15.6% | 2.5% | 1 | 0 | 0 | 5,860 | 8.35 | 8.35 | 9.6% | 7.5% | 44.9% | 44.9% | 1,322,047 | |||||||||||||||||||
114 | Market Place Village | 2,450,000 | 12/1/2014 | 2.01 | 1.85 | 69.4% | 57.3% | 11.9% | 10.9% | 267,433 | ||||||||||||||||||||||||||
115 | Kingstowne Shops | 2,750,000 | 3/2/2015 | 2.04 | 1.78 | 59.0% | 47.4% | 12.0% | 10.5% | 318,715 | ||||||||||||||||||||||||||
116 | 109-111 N. Broadway Apt. Corp. | 10,150,000 | 1/12/2015 | 8,450,000 | 19.1% | 0.0% | 0 | 0 | 0 | 500,000 | 6.31 | 6.31 | 15.9% | 12.6% | 35.3% | 35.3% | 1,175,530 | |||||||||||||||||||
117 | 40 Prospect Park West Owners Corp. | 52,650,000 | 4/15/2015 | 28,700,000 | 5.6% | 7.3% | 4 | 0 | 0 | 3,286 | 500,000 | 19.73 | 19.73 | 3.0% | 2.4% | 107.8% | 107.8% | 2,574,658 | ||||||||||||||||||
118 | Shops of Orland Park | 2,250,000 | 3/25/2015 | 2.04 | 1.79 | 68.9% | 58.9% | 12.4% | 10.9% | 338,658 | ||||||||||||||||||||||||||
119 | Victorville Retail Center | 6,140,000 | 3/10/2015 | 5.18 | 4.89 | 24.4% | 24.4% | 21.7% | 20.5% | 470,441 | ||||||||||||||||||||||||||
120 | 6 West 20th St. Tenants Corp. | 40,266,142 | 1/22/2015 | 26,100,000 | 5.7% | 0.0% | 0 | 0 | 0 | 500,000 | 21.73 | 21.73 | 3.7% | 2.9% | 119.4% | 119.4% | 2,368,242 | |||||||||||||||||||
121 | 50-22 Owners Ltd. | 10,178,940 | 12/12/2014 | 7,400,000 | 20.2% | 12.8% | 3 | 0 | 3 | 9,855 | 500,000 | 7.55 | 7.55 | 14.7% | 12.9% | 36.0% | 36.0% | 863,035 | ||||||||||||||||||
122 | 585 McLean Owners, Inc. | 5,220,000 | 3/11/2015 | 4,100,000 | 34.1% | 46.3% | 19 | 0 | 0 | 50,568 | 500,000 | 4.31 | 4.31 | 26.8% | 23.4% | 20.4% | 20.4% | 644,416 | ||||||||||||||||||
123 | 12 West 17th St. Tenants' Corp. | 36,540,000 | 12/15/2014 | 15,800,000 | 8.8% | 0.0% | 0 | 0 | 0 | 500,000 | 15.59 | 15.59 | 3.8% | 3.4% | 76.2% | 76.2% | 1,558,284 | |||||||||||||||||||
124 | Gillespie Field Business Park | 2,000,000 | 4/3/2015 | 1.57 | 1.42 | 65.4% | 52.9% | 9.5% | 8.6% | 222,642 | ||||||||||||||||||||||||||
125 | Waters at West End, Inc. | 7,630,000 | 1/30/2015 | 7,300,000 | 16.7% | 0.0% | 0 | 0 | 0 | 500,000 | 7.41 | 7.41 | 16.0% | 12.7% | 41.8% | 41.8% | 890,112 | |||||||||||||||||||
126 | Jones St. Owners Corporation | 17,350,000 | 10/28/2014 | 9,900,000 | 12.1% | 0.0% | 0 | 0 | 0 | 10.15 | 10.15 | 6.9% | 5.4% | 56.2% | 56.2% | 905,474 | ||||||||||||||||||||
127 | Big Lots Plaza | 2,450,000 | 12/29/2014 | 2.71 | 2.09 | 48.7% | 40.0% | 17.5% | 13.5% | 300,321 | ||||||||||||||||||||||||||
128 | 30 Bond Street Owners Corp. | 26,350,000 | 12/23/2014 | 9,900,000 | 11.6% | 0.0% | 0 | 0 | 0 | 10.49 | 10.49 | 4.3% | 3.4% | 58.2% | 58.2% | 779,532 | ||||||||||||||||||||
129 | 166 West 76th Apartment Corp. | 25,872,764 | 2/19/2015 | 13,800,000 | 7.9% | 0.0% | 0 | 0 | 0 | 500,000 | 15.10 | 15.10 | 4.2% | 3.4% | 84.9% | 84.9% | 1,400,262 | |||||||||||||||||||
130 | Hanna Shoppes | 1,600,000 | 3/3/2015 | 1.94 | 1.69 | 65.5% | 52.6% | 11.5% | 10.0% | 185,807 | ||||||||||||||||||||||||||
131 | Carroll Gardens Owners, Corp. | 6,120,000 | 3/30/2015 | 3,630,000 | 27.5% | 21.9% | 0 | 0 | 7 | 250,000 | 4.54 | 4.54 | 16.3% | 12.9% | 25.4% | 25.4% | 562,806 | |||||||||||||||||||
132 | 170 East 92nd Street Owners, Inc. | 10,397,000 | 4/1/2015 | 5,900,000 | 13.6% | 0.0% | 0 | 0 | 0 | 300,000 | 8.99 | 8.99 | 7.7% | 6.1% | 50.0% | 50.0% | 631,936 | |||||||||||||||||||
133 | 17 Warren Street Tenants Corporation | 10,453,968 | 12/17/2014 | 4,500,000 | 16.7% | 0.0% | 0 | 0 | 0 | 9.95 | 9.95 | 7.2% | 7.2% | 40.1% | 40.1% | 466,298 |
A-1-8 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Mortgage Loan Number | Property Name | U/W Expenses ($) | U/W Net Operating Income ($)(6) | U/W Replacement ($) | U/W TI/LC ($) | U/W Net Cash Flow ($)(6) | Occupancy Rate(2) | Occupancy as-of Date | U/W Hotel ADR | U/W Hotel RevPAR | Most Recent Period | Most Recent Revenues ($) | Most Recent Expenses ($) | Most Recent NOI ($) | Most Recent Capital Expenditures | Most Recent NCF ($) | Most Recent Hotel ADR | Most Recent Hotel RevPAR | ||||||||||||||||||
1 | Hutchinson Metro Center I | 7,070,708 | 9,133,039 | 105,613 | 798,975 | 8,228,451 | 100.0% | 4/1/2015 | Actual 2014 | 15,175,275 | 5,894,432 | 9,280,842 | 0 | 9,280,842 | ||||||||||||||||||||||
2 | Cathedral Place | 2,556,668 | 3,594,101 | 43,956 | 273,918 | 3,276,228 | 91.1% | 5/1/2015 | Actual 2014 | 6,170,237 | 2,746,872 | 3,423,365 | 0 | 3,423,365 | ||||||||||||||||||||||
3 | 150 Royall Street | 2,802,786 | 3,580,145 | 54,462 | 389,012 | 3,136,672 | 100.0% | 4/1/2015 | NAV | NAV | NAV | NAV | NAV | NAV | ||||||||||||||||||||||
4 | WPC Self Storage Portfolio VII | 2,407,887 | 3,381,395 | 132,314 | 0 | 3,249,081 | 88.3% | Various | Various | 5,793,377 | 2,032,503 | 3,760,875 | 0 | 3,760,875 | ||||||||||||||||||||||
4.01 | Extra Space Louisville KY | 384,862 | 672,371 | 23,804 | 0 | 648,567 | 97.8% | 3/31/2015 | TTM 3/31/2015 | 1,061,327 | 196,119 | 865,209 | 0 | 865,209 | ||||||||||||||||||||||
4.02 | Extra Space Las Vegas NV | 231,106 | 591,015 | 2,962 | 0 | 588,053 | 93.4% | 3/31/2015 | TTM 3/31/2015 | 822,121 | 230,066 | 592,055 | 0 | 592,055 | ||||||||||||||||||||||
4.03 | CubeSmart Joan Panama City Beach FL | 297,620 | 452,310 | 19,878 | 0 | 432,432 | 84.3% | 3/31/2015 | TTM 3/31/2015 | 749,930 | 335,390 | 414,540 | 0 | 414,540 | ||||||||||||||||||||||
4.04 | CubeSmart Tallahassee FL | 355,560 | 451,431 | 15,441 | 0 | 435,990 | 75.1% | 3/31/2015 | TTM 3/31/2015 | 806,991 | 309,016 | 497,975 | 0 | 497,975 | ||||||||||||||||||||||
4.05 | Extra Space Lady Lake FL | 308,978 | 337,268 | 27,500 | 0 | 309,768 | 88.6% | 3/31/2015 | TTM 1/31/2015 | 646,246 | 270,957 | 375,289 | 0 | 375,289 | ||||||||||||||||||||||
4.06 | CubeSmart Crystal Lake IL | 249,853 | 261,092 | 20,937 | 0 | 240,155 | 85.4% | 4/22/2015 | TTM 3/31/2015 | 510,945 | 205,809 | 305,136 | 0 | 305,136 | ||||||||||||||||||||||
4.07 | CubeSmart Hutchinson Panama City Beach FL | 195,190 | 243,215 | 10,575 | 0 | 232,640 | 97.9% | 3/31/2015 | TTM 2/28/2015 | 438,405 | 191,066 | 247,339 | 0 | 247,339 | ||||||||||||||||||||||
4.08 | Extra Space Lilburn GA | 214,098 | 221,169 | 8,628 | 0 | 212,541 | 90.8% | 3/31/2015 | TTM 3/31/2015 | 435,267 | 159,726 | 275,541 | 0 | 275,541 | ||||||||||||||||||||||
4.09 | Extra Space Stockbridge GA | 170,621 | 151,524 | 2,589 | 0 | 148,936 | 91.8% | 3/31/2015 | TTM 3/31/2015 | 322,145 | 134,354 | 187,791 | 0 | 187,791 | ||||||||||||||||||||||
5 | Queens' MarketPlace | 3,841,397 | 3,303,299 | 26,185 | 193,519 | 3,083,595 | 66.1% | 4/3/2015 | TTM 2/28/2015 | 7,040,689 | 3,884,034 | 3,156,655 | 0 | 3,156,655 | ||||||||||||||||||||||
6 | El Sol Brillante and Laguna Del Sol Apartments | 3,240,610 | 3,078,838 | 210,264 | 0 | 2,868,574 | 93.7% | Various | TTM 3/31/2015 | 5,980,915 | 2,737,511 | 3,243,404 | 0 | 3,243,404 | ||||||||||||||||||||||
6.01 | Laguna Del Sol Apartments | 1,548,360 | 1,682,345 | 105,600 | 0 | 1,576,745 | 91.8% | 4/22/2015 | TTM 3/31/2015 | 2,991,843 | 1,311,594 | 1,680,249 | 0 | 1,680,249 | ||||||||||||||||||||||
6.02 | El Sol Brillante Apartments | 1,692,250 | 1,396,493 | 104,664 | 0 | 1,291,829 | 95.7% | 4/23/2015 | TTM 3/31/2015 | 2,989,072 | 1,425,917 | 1,563,155 | 0 | 1,563,155 | ||||||||||||||||||||||
7 | Country Club Center | 1,100,060 | 2,086,654 | 12,994 | 58,284 | 2,015,376 | 100.0% | 2/1/2015 | Actual 2014 | 2,848,959 | 1,029,513 | 1,819,446 | 0 | 1,819,446 | ||||||||||||||||||||||
8 | Parkway Crossing East Shopping Center | 707,962 | 2,254,321 | 28,666 | 118,491 | 2,107,163 | 98.1% | 4/24/2015 | Actual 2014 | 2,701,732 | 736,437 | 1,965,295 | 0 | 1,965,295 | ||||||||||||||||||||||
9 | Olmsted Plaza Shopping Center | 1,743,501 | 2,506,548 | 51,180 | 127,951 | 2,327,417 | 93.6% | 4/6/2015 | Actual 2014 | 4,757,687 | 1,937,407 | 2,820,280 | 0 | 2,820,280 | ||||||||||||||||||||||
10 | Hall Office Park | 1,611,150 | 2,234,023 | 28,552 | 179,952 | 2,025,519 | 93.3% | 4/1/2015 | Actual 2014 | 3,606,776 | 1,585,187 | 2,021,589 | 0 | 2,021,589 | ||||||||||||||||||||||
11 | Dulles North Corporate Parks | 902,456 | 2,701,289 | 50,990 | 200,690 | 2,449,610 | 100.0% | Various | TTM 1/31/2015 | 3,949,963 | 894,842 | 3,055,121 | 0 | 3,055,121 | ||||||||||||||||||||||
11.01 | Dulles North Corporate Park 5 | 443,501 | 1,594,436 | 20,098 | 54,376 | 1,519,961 | 100.0% | 6/1/2015 | TTM 1/31/2015 | 2,029,885 | 420,599 | 1,609,286 | 0 | 1,609,286 | ||||||||||||||||||||||
11.02 | Dulles North Corporate Park 2 | 458,954 | 1,106,854 | 30,892 | 146,313 | 929,648 | 100.0% | 5/1/2015 | TTM 1/31/2015 | 1,920,078 | 474,243 | 1,445,835 | 0 | 1,445,835 | ||||||||||||||||||||||
12 | Coastal Village Apartments | 2,680,878 | 2,134,330 | 130,336 | 0 | 2,003,994 | 95.1% | 5/18/2015 | TTM 3/31/2015 | 4,717,525 | 2,622,963 | 2,094,562 | 0 | 2,094,562 | ||||||||||||||||||||||
13 | Foothills Park Place | 844,492 | 2,543,783 | 26,499 | 199,628 | 2,317,655 | 91.7% | 2/25/2015 | TTM 1/31/2015 | 2,949,497 | 783,709 | 2,165,788 | 0 | 2,165,788 | ||||||||||||||||||||||
14 | Smiths Medical | 1,735,379 | 2,390,177 | 36,450 | 182,250 | 2,171,477 | 100.0% | 3/1/2015 | TTM 2/28/2015 | 2,664,008 | 1,487,873 | 1,176,135 | 0 | 1,176,135 | ||||||||||||||||||||||
15 | Hunterstone Apartments | 963,627 | 1,549,159 | 72,000 | 0 | 1,477,159 | 91.3% | 4/13/2015 | TTM 3/31/2015 | 2,605,431 | 977,864 | 1,627,567 | 0 | 1,627,567 | ||||||||||||||||||||||
16 | Magnolia Marketplace | 712,672 | 1,467,188 | 9,727 | 49,470 | 1,407,992 | 100.0% | 4/1/2015 | ||||||||||||||||||||||||||||
17 | Norfolk Commerce Park | 1,376,729 | 2,355,064 | 66,393 | 303,936 | 1,984,735 | 82.8% | 4/30/2015 | Annualized 3 3/31/2015 | 3,626,215 | 1,047,645 | 2,578,570 | 0 | 2,578,570 | ||||||||||||||||||||||
18 | Summer Bend Apartments | 1,347,120 | 1,713,280 | 85,746 | 0 | 1,627,534 | 95.7% | 4/22/2015 | TTM 2/28/2015 | 2,978,495 | 1,338,506 | 1,639,989 | 0 | 1,639,989 | ||||||||||||||||||||||
19 | Baywoods of Annapolis | 9,545,497 | 2,260,195 | 57,600 | 0 | 2,260,195 | 95.0% | 4/20/2015 | ||||||||||||||||||||||||||||
20 | Rock Hill Hampton Inn | 3,132,942 | 2,014,664 | 257,380 | 0 | 1,757,284 | 83.2% | 3/31/2015 | 104 | 85 | TTM 3/31/2015 | 5,311,408 | 3,140,922 | 2,170,486 | 0 | 2,170,486 | 105 | 88 | ||||||||||||||||||
21 | Louisville Plaza | 659,927 | 1,371,343 | 29,165 | 102,859 | 1,239,320 | 95.6% | 4/30/2015 | TTM 3/31/2015 | 1,798,394 | 430,009 | 1,368,384 | 0 | 1,368,384 | ||||||||||||||||||||||
22 | Marquis Place | 561,417 | 1,226,344 | 19,942 | 0 | 1,206,402 | 97.5% | 4/22/2015 | NAV | NAV | NAV | NAV | NAV | NAV | ||||||||||||||||||||||
23 | Riverside Technology Park A & B | 486,259 | 1,619,646 | 32,956 | 168,170 | 1,418,521 | 82.4% | 3/20/2015 | TTM 3/31/2015 | 1,760,796 | 396,860 | 1,363,936 | 0 | 1,363,936 | ||||||||||||||||||||||
24 | Maricopa Fiesta | 649,584 | 1,174,124 | 21,375 | 77,034 | 1,075,714 | 90.6% | 3/17/2015 | TTM 2/28/2015 | 1,806,853 | 642,370 | 1,164,483 | 0 | 1,164,483 | ||||||||||||||||||||||
25 | Dunwoody Place | 566,719 | 1,137,804 | 20,611 | 51,527 | 1,065,667 | 96.5% | 5/5/2015 | Actual 2014 | 1,330,139 | 453,297 | 876,843 | 0 | 876,843 | ||||||||||||||||||||||
26 | Jackson Square Apartments | 640,294 | 1,162,800 | 29,120 | 0 | 1,133,680 | 98.8% | 4/17/2015 | Annualized 3 4/30/2015 | 1,890,376 | 594,940 | 1,295,436 | 0 | 1,295,436 | ||||||||||||||||||||||
27 | Shops at Doral | 454,131 | 1,160,211 | 4,176 | 34,500 | 1,121,535 | 100.0% | 4/17/2015 | TTM 2/28/2015 | 1,463,971 | 295,900 | 1,168,071 | 0 | 1,168,071 | ||||||||||||||||||||||
28 | Solano Apartments | 1,499,852 | 1,289,405 | 64,714 | 0 | 1,224,691 | 95.4% | 4/30/2015 | TTM 4/30/2015 | 2,634,421 | 1,420,781 | 1,213,639 | 64,714 | 1,148,925 | ||||||||||||||||||||||
29 | Riverchase Apartments | 918,222 | 959,618 | 54,000 | 0 | 905,618 | 95.4% | 4/9/2015 | TTM 3/31/2015 | 1,877,840 | 855,177 | 1,022,663 | 0 | 1,022,663 | ||||||||||||||||||||||
30 | Old Mills | 898,353 | 1,097,025 | 62,000 | 0 | 1,035,025 | 96.8% | 3/18/2015 | TTM 2/28/2015 | 2,012,771 | 833,168 | 1,179,603 | 0 | 1,179,603 | ||||||||||||||||||||||
31 | Ozinus Realty Property Portfolio | 1,011,471 | 1,755,798 | 68,927 | 248,077 | 1,438,793 | 99.6% | 05/01/2015 | Various | 2,502,606 | 833,249 | 1,669,357 | 0 | 1,669,357 | ||||||||||||||||||||||
31.01 | Shiloh Crossing | 155,161 | 413,807 | 9,313 | 33,579 | 370,914 | 100.0% | 05/01/2015 | Annualized 8 3/31/2015 | 559,095 | 93,233 | 465,862 | 0 | 465,862 | ||||||||||||||||||||||
31.02 | Texas Star | 156,824 | 317,664 | 18,822 | 69,434 | 229,409 | 100.0% | 05/01/2015 | Annualized 8 3/31/2015 | 475,317 | 161,848 | 313,469 | 0 | 313,469 | ||||||||||||||||||||||
31.03 | Pitney Bowes | 157,955 | 243,247 | 18,622 | 33,040 | 191,585 | 100.0% | 05/01/2015 | Annualized 9 3/31/2015 | 402,356 | 120,238 | 282,118 | 0 | 282,118 | ||||||||||||||||||||||
31.04 | Towne Crest Village | 119,155 | 284,043 | 3,392 | 23,705 | 256,945 | 100.0% | 05/01/2015 | Actual 2014 | 240,399 | 94,037 | 146,362 | 0 | 146,362 | ||||||||||||||||||||||
31.05 | Eagle Plaza | 147,496 | 219,328 | 7,127 | 25,685 | 186,516 | 100.0% | 05/01/2015 | Actual 2014 | 311,628 | 122,980 | 188,649 | 0 | 188,649 | ||||||||||||||||||||||
31.06 | Palmetto | 138,168 | 148,553 | 7,580 | 37,962 | 103,012 | 100.0% | 05/01/2015 | Actual 2014 | 264,010 | 116,735 | 147,275 | 0 | 147,275 | ||||||||||||||||||||||
31.07 | Hamlin | 136,712 | 129,157 | 4,072 | 24,673 | 100,412 | 97.1% | 05/01/2015 | Actual 2014 | 249,802 | 124,179 | 125,623 | 0 | 125,623 | ||||||||||||||||||||||
32 | Brickyard Square | 907,077 | 2,882,333 | 17,376 | 69,502 | 2,795,455 | 99.1% | 3/1/2015 | TTM 3/31/2015 | 3,488,039 | 963,449 | 2,524,590 | 0 | 2,524,590 | ||||||||||||||||||||||
33 | Dos Santos Apartments | 911,869 | 1,070,790 | 68,500 | 0 | 1,002,290 | 91.6% | 3/24/2015 | TTM 3/31/2015 | 1,982,659 | 881,699 | 1,100,960 | 0 | 1,100,960 | ||||||||||||||||||||||
34 | Villa Bella | 2,284,659 | 1,076,732 | 35,840 | 0 | 1,040,892 | 93.0% | 2/28/2015 | TTM 3/31/2015 | 3,259,250 | 2,148,053 | 1,111,197 | 0 | 1,111,197 | ||||||||||||||||||||||
35 | Bayview Office Building | 1,008,575 | 1,054,065 | 32,950 | 141,216 | 879,899 | 100.0% | 3/2/2015 | TTM 2/28/2015 | 1,995,556 | 962,781 | 1,032,775 | 0 | 1,032,775 | ||||||||||||||||||||||
36 | Casa Nube | 1,509,409 | 1,016,636 | 111,900 | 0 | 904,736 | 98.4% | 4/20/2015 | TTM 5/31/2015 | 2,458,563 | 1,172,191 | 1,286,372 | 0 | 1,286,372 | ||||||||||||||||||||||
37 | Homewood Suites - Tallahassee | 2,212,590 | 1,403,060 | 144,626 | 0 | 1,258,434 | 81.5% | 3/31/2015 | 128 | 100 | TTM 3/31/2015 | 3,615,650 | 2,272,223 | 1,343,427 | 0 | 1,343,427 | 123 | 100 | ||||||||||||||||||
38 | San Mateo Apartments | 973,942 | 912,992 | 62,000 | 0 | 850,992 | 95.2% | 3/24/2015 | TTM 3/31/2015 | 1,812,815 | 942,826 | 869,989 | 0 | 869,989 | ||||||||||||||||||||||
39 | Brittany Bay II | 951,557 | 1,162,201 | 62,400 | 0 | 1,099,801 | 98.6% | 3/18/2015 | Actual 2014 | 2,116,556 | 936,577 | 1,179,979 | 62,400 | 1,117,579 | ||||||||||||||||||||||
40 | Nexus Town Center | 443,832 | 1,062,382 | 16,654 | 59,008 | 986,720 | 96.6% | 4/1/2015 | Actual 2014 | 1,540,322 | 425,731 | 1,114,591 | 0 | 1,114,591 | ||||||||||||||||||||||
41 | Cathedral Place - Parking | 627,582 | 957,159 | 47,000 | 0 | 910,159 | 97.8% | 1/1/2015 | Annualized 11 11/30/2014 | 1,485,645 | 360,716 | 1,124,928 | 46,533 | 1,078,395 | ||||||||||||||||||||||
42 | Indiana Village | 1,011,719 | 847,065 | 86,688 | 0 | 760,377 | 96.5% | 3/11/2015 | TTM 2/28/2015 | 1,858,784 | 1,029,028 | 829,756 | 0 | 829,756 | ||||||||||||||||||||||
43 | Fahrens Park Plaza | 282,657 | 952,050 | 17,547 | 59,165 | 875,338 | 93.2% | 1/26/2015 | TTM 1/31/2015 | 1,176,553 | 252,408 | 924,145 | 0 | 924,145 | ||||||||||||||||||||||
44 | Causeway Corporate Centre | 593,674 | 841,287 | 9,223 | 65,118 | 766,947 | 92.4% | 5/1/2015 | TTM 3/31/2015 | 1,465,176 | 496,664 | 968,512 | 0 | 968,512 | ||||||||||||||||||||||
45 | TownePlace Suites St. George by Marriott | 1,658,145 | 991,092 | 105,969 | 0 | 885,122 | 78.8% | 2/28/2015 | 106 | 84 | TTM 2/28/2015 | 2,460,351 | 1,548,914 | 911,437 | 98,414 | 813,023 | 106 | 84 | ||||||||||||||||||
46 | IRG - Ellsworth Bailey Saratoga | 551,872 | 921,454 | 52,807 | 58,933 | 809,714 | 100.0% | Various | NAV | NAV | NAV | NAV | NAV | NAV | ||||||||||||||||||||||
46.01 | Saratoga II | 202,384 | 380,758 | 15,300 | 23,326 | 342,132 | 100.0% | 6/1/2015 | NAV | NAV | NAV | NAV | NAV | NAV | ||||||||||||||||||||||
46.02 | Saratoga I | 156,380 | 301,271 | 12,432 | 18,306 | 270,533 | 100.0% | 6/1/2015 | NAV | NAV | NAV | NAV | NAV | NAV | ||||||||||||||||||||||
46.03 | Ellsworth Bailey Lordstown | 193,107 | 239,426 | 25,075 | 17,301 | 197,049 | 100.0% | 4/1/2015 | NAV | NAV | NAV | NAV | NAV | NAV | ||||||||||||||||||||||
47 | 39-60 54th Street Owners, Inc. | 1,692,074 | 3,113,926 | 41,800 | 0 | 3,113,926 | 95.0% | 4/9/2015 | ||||||||||||||||||||||||||||
48 | Courtyard by Marriott - Shawnee | 2,366,495 | 1,007,967 | 134,978 | 0 | 872,988 | 76.6% | 10/31/2014 | 120 | 95 | TTM 4/29/2015 | 3,207,829 | 2,270,918 | 936,911 | 128,313 | 808,598 | 120 | 95 | ||||||||||||||||||
49 | Athens Gate Apartments | 787,883 | 671,326 | 58,250 | 0 | 613,076 | 90.6% | 3/24/2015 | TTM 3/31/2015 | 1,471,855 | 758,964 | 712,891 | 0 | 712,891 | ||||||||||||||||||||||
50 | Sand Pebble Apartments | 1,048,205 | 726,181 | 52,000 | 0 | 674,181 | 92.3% | 3/24/2015 | TTM 3/31/2015 | 1,725,996 | 1,019,103 | 706,893 | 0 | 706,893 | ||||||||||||||||||||||
51 | Trojan Storage of Oxnard | 389,276 | 687,599 | 12,113 | 0 | 675,486 | 97.0% | 4/22/2015 | TTM 3/31/2015 | 1,058,440 | 349,500 | 708,940 | 0 | 708,940 | ||||||||||||||||||||||
52 | CVS - Lynn, MA | 5,649 | 559,205 | 1,290 | 0 | 557,915 | 100.0% | 6/1/2015 | NAV | NAV | NAV | NAV | NAV | NAV | ||||||||||||||||||||||
53 | Gilbert Crossing | 273,576 | 691,988 | 12,509 | 38,327 | 641,152 | 90.0% | 1/31/2015 | Actual 2014 | 960,412 | 273,149 | 687,263 | 0 | 687,263 | ||||||||||||||||||||||
54 | 1321 Harbor Bay Parkway | 252,233 | 726,235 | 10,035 | 54,342 | 661,858 | 100.0% | 6/1/2015 | NAV | NAV | NAV | NAV | NAV | NAV | ||||||||||||||||||||||
55 | Casa Cruz | 1,195,491 | 700,567 | 78,600 | 0 | 621,967 | 90.5% | 3/1/2015 | TTM 2/28/2015 | 1,895,271 | 1,129,973 | 765,298 | 0 | 765,298 | ||||||||||||||||||||||
56 | Best Western Plus - Windsor Gardens | 1,367,980 | 774,619 | 85,704 | 0 | 688,915 | 61.9% | 2/28/2015 | 108 | 65 | TTM 2/28/2015 | 2,158,754 | 1,055,978 | 1,102,776 | 0 | 1,102,776 | 111 | 69 | ||||||||||||||||||
57 | Oak Tree Plaza | 191,754 | 528,309 | 2,976 | 8,266 | 517,067 | 100.0% | 1/1/2015 | TTM 2/28/2015 | 733,883 | 161,563 | 572,320 | 0 | 572,320 | ||||||||||||||||||||||
58 | Peppertree Lane Apartments | 777,643 | 611,648 | 46,200 | 0 | 565,448 | 97.6% | 4/28/2015 | TTM 2/28/2015 | 1,380,361 | 689,431 | 690,930 | 0 | 690,930 | ||||||||||||||||||||||
59 | 8211 Town Center Drive | 258,008 | 572,707 | 13,880 | 44,027 | 514,800 | 100.0% | 6/1/2015 | TTM 3/31/2015 | 531,959 | 281,303 | 250,656 | 0 | 250,656 | ||||||||||||||||||||||
60 | Staybridge Suites Indianapolis Airport | 1,816,523 | 717,679 | 101,368 | 0 | 616,311 | 85.8% | 1/31/2015 | 91 | 78 | TTM 1/31/2015 | 2,534,202 | 1,811,179 | 723,024 | 101,368 | 621,656 | 91 | 78 | ||||||||||||||||||
61 | Austin Heights Shopping Center | 379,673 | 722,774 | 11,986 | 61,131 | 649,656 | 100.0% | 4/30/2015 | Actual 2014 | 1,108,424 | 340,220 | 768,204 | 0 | 768,204 | ||||||||||||||||||||||
62 | Walgreens - Duncanville, TX | 4,178 | 413,649 | 1,449 | 0 | 412,200 | 100.0% | 6/1/2015 | NAV | NAV | NAV | NAV | NAV | NAV | ||||||||||||||||||||||
63 | Trojan Storage of Roseville | 319,564 | 507,061 | 11,661 | 0 | 495,400 | 96.0% | 4/22/2015 | TTM 3/31/2015 | 800,376 | 330,587 | 469,788 | 0 | 469,788 | ||||||||||||||||||||||
64 | Lakeside Plaza | 397,725 | 745,294 | 62,573 | 32,145 | 650,575 | 89.0% | 5/6/2015 | TTM 3/31/2015 | 1,092,582 | 386,195 | 706,386 | 0 | 706,386 | ||||||||||||||||||||||
65 | Green Acres MHP | 355,214 | 520,617 | 10,600 | 0 | 510,017 | 88.7% | 3/31/2015 | TTM 4/30/2015 | 828,874 | 263,554 | 565,320 | 0 | 565,320 | ||||||||||||||||||||||
66 | Mendicino Green Apartment Corp. | 1,054,298 | 1,055,719 | 21,100 | 0 | 1,055,719 | 95.0% | 3/16/2015 | ||||||||||||||||||||||||||||
67 | Walgreens - Richmond Heights | 12,474 | 403,326 | 0 | 0 | 403,326 | 100.0% | 6/1/2015 | TTM 2/28/2015 | 420,000 | 0 | 420,000 | 0 | 420,000 | ||||||||||||||||||||||
68 | Rivertown Center | 343,615 | 554,030 | 12,175 | 71,244 | 470,611 | 86.6% | 4/1/2015 | Actual 2014 | 743,099 | 322,039 | 421,060 | 0 | 421,060 | ||||||||||||||||||||||
69 | Bristol House, Inc. | 670,348 | 971,317 | 14,400 | 0 | 971,317 | 95.0% | 3/25/2015 | ||||||||||||||||||||||||||||
70 | Storaway Self Storage - Nashville | 362,953 | 590,407 | 12,057 | 0 | 578,350 | 96.9% | 3/31/2015 | TTM 3/31/2015 | 1,001,227 | 363,845 | 637,382 | 0 | 637,382 | ||||||||||||||||||||||
71 | Bella Luna / San Lucas | 3,218,017 | 2,604,317 | 230,880 | 0 | 2,373,437 | 94.1% | 1/13/2015 | Actual 2014 | 5,379,741 | 3,076,963 | 2,302,778 | 0 | 2,302,778 | ||||||||||||||||||||||
72 | Seacoast Self Storage | 166,998 | 485,962 | 8,291 | 0 | 477,672 | 98.4% | 3/2/2015 | TTM 3/31/2015 | 654,278 | 122,650 | 531,628 | 0 | 531,628 | ||||||||||||||||||||||
73 | 230 Garth Road Owners, Inc. | 3,786,269 | 4,382,211 | 51,750 | 0 | 4,382,211 | 95.0% | 2/27/2015 | ||||||||||||||||||||||||||||
74 | Comfort Suites - Near the Galleria | 1,186,773 | 553,351 | 69,605 | 0 | 483,746 | 73.4% | 2/28/2015 | 107 | 77 | TTM 2/28/2015 | 1,773,960 | 1,170,327 | 603,633 | 0 | 603,633 | 107 | 78 | ||||||||||||||||||
75 | Sandstone Apartments | 646,843 | 507,460 | 50,052 | 0 | 457,408 | 89.5% | 2/1/2015 | Actual 2014 | 1,031,853 | 615,796 | 416,057 | 0 | 416,057 | ||||||||||||||||||||||
76 | Tieton Village | 116,515 | 455,975 | 12,245 | 33,674 | 410,056 | 100.0% | 3/31/2015 | Actual 2014 | 557,472 | 92,229 | 465,243 | 0 | 465,243 | ||||||||||||||||||||||
77 | Highland Terrace Housing Development Fund Corporation | 819,700 | 877,703 | 26,400 | 0 | 877,703 | 95.0% | 2/24/2015 | ||||||||||||||||||||||||||||
78 | Cooperstown Commons Shopping Center | 319,156 | 448,390 | 8,362 | 27,874 | 412,154 | 97.6% | 3/17/2015 | TTM 1/31/2015 | 809,962 | 311,447 | 498,515 | 0 | 498,515 | ||||||||||||||||||||||
79 | Lake Lucina Shopping Center | 180,325 | 427,759 | 18,145 | 44,541 | 365,073 | 93.9% | 3/31/2015 | Actual 2013 | 618,870 | 197,108 | 421,762 | 0 | 421,762 | ||||||||||||||||||||||
80 | Silver Bridge Plaza | 261,284 | 445,359 | 38,435 | 40,379 | 366,545 | 87.8% | 4/21/2015 | Actual 2014 | 752,593 | 253,881 | 498,713 | 0 | 498,713 | ||||||||||||||||||||||
81 | Karen Gardens Apartment Corp. | 577,400 | 680,286 | 14,500 | 0 | 680,286 | 95.0% | 3/10/2015 | ||||||||||||||||||||||||||||
82 | East Haven Self Storage | 135,941 | 305,164 | 5,040 | 0 | 300,124 | 98.4% | 3/17/2015 | TTM 3/31/2015 | 440,724 | 113,886 | 326,838 | 0 | 326,838 | ||||||||||||||||||||||
83 | Walgreens - Milwaukee | 30,619 | 273,259 | 2,174 | 0 | 271,085 | 100.0% | 6/1/2015 | Actual 2014 | 312,024 | 21,503 | 290,521 | 0 | 290,521 |
A-1-9 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Mortgage Loan Number | Property Name | U/W Expenses ($) | U/W Net Operating Income ($)(6) | U/W Replacement ($) | U/W TI/LC ($) | U/W Net Cash Flow ($)(6) | Occupancy Rate(2) | Occupancy as-of Date | U/W Hotel ADR | U/W Hotel RevPAR | Most Recent Period | Most Recent Revenues ($) | Most Recent Expenses ($) | Most Recent NOI ($) | Most Recent Capital Expenditures | Most Recent NCF ($) | Most Recent Hotel ADR | Most Recent Hotel RevPAR | ||||||||||||||||||
84 | Haggen Food & Pharmacy | 9,782 | 316,298 | 8,526 | 21,315 | 286,457 | 100.0% | 6/1/2015 | NAV | NAV | NAV | NAV | NAV | NAV | ||||||||||||||||||||||
85 | Sycamore Terrace | 230,815 | 275,088 | 3,268 | 14,080 | 257,740 | 100.0% | 2/28/2015 | TTM 2/28/2015 | 481,095 | 229,792 | 251,303 | 0 | 251,303 | ||||||||||||||||||||||
86 | Ramona Plaza Shopping Center | 187,979 | 318,310 | 9,948 | 21,461 | 286,901 | 85.3% | 4/20/2015 | TTM 3/31/2015 | 516,659 | 180,338 | 336,321 | 0 | 336,321 | ||||||||||||||||||||||
87 | All A/C Self Storage | 188,029 | 273,754 | 5,302 | 0 | 268,452 | 97.0% | 5/13/2015 | TTM 4/30/2015 | 461,701 | 108,365 | 353,336 | 0 | 353,336 | ||||||||||||||||||||||
88 | Pecue MHC | 190,127 | 282,302 | 7,000 | 0 | 275,302 | 93.6% | 2/1/2015 | TTM 2/28/2015 | 461,851 | 222,753 | 239,098 | 0 | 239,098 | ||||||||||||||||||||||
89 | Regency Park Owners Corp. | 645,029 | 790,477 | 13,600 | 0 | 790,477 | 95.0% | 4/3/2015 | ||||||||||||||||||||||||||||
90 | Storaway Self Storage - Deltona II | 314,324 | 358,123 | 10,384 | 0 | 347,740 | 95.6% | 3/31/2015 | TTM 3/31/2015 | 672,308 | 291,557 | 380,751 | 0 | 380,751 | ||||||||||||||||||||||
91 | Lakewood Place Shopping Center | 90,957 | 288,187 | 5,068 | 17,369 | 265,750 | 100.0% | 4/17/2015 | TTM 3/31/2015 | 305,762 | 72,150 | 233,612 | 0 | 233,612 | ||||||||||||||||||||||
92 | Hacienda Heights Apartments | 132,371 | 293,705 | 13,425 | 0 | 280,280 | 100.0% | 4/3/2015 | TTM 3/31/2015 | 437,429 | 133,245 | 304,184 | 0 | 304,184 | ||||||||||||||||||||||
93 | Nagle House, Inc. | 2,037,000 | 1,440,038 | 47,000 | 0 | 1,440,038 | 95.0% | 4/21/2014 | ||||||||||||||||||||||||||||
94 | Walgreens - Warrensburg, MO | 2,891 | 286,169 | 1,449 | 0 | 284,720 | 100.0% | 6/1/2015 | Actual 2014 | 298,000 | 0 | 298,000 | 0 | 298,000 | ||||||||||||||||||||||
95 | 230 Tenants Corporation | 1,376,600 | 930,855 | 13,400 | 0 | 930,855 | 96.0% | 4/16/2015 | ||||||||||||||||||||||||||||
96 | Shackelford Center | 210,798 | 320,081 | 9,927 | 27,377 | 282,777 | 97.4% | 3/25/2015 | Actual 2014 | 465,177 | 111,658 | 353,519 | 0 | 353,519 | ||||||||||||||||||||||
97 | De La Cruz Professional Center | 116,579 | 333,627 | 5,596 | 23,180 | 304,851 | 100.0% | 4/22/2015 | TTM 4/28/2015 | 491,045 | 85,294 | 405,751 | 0 | 405,751 | ||||||||||||||||||||||
98 | Folcroft Self Storage | 209,249 | 301,385 | 6,803 | 0 | 294,582 | 95.3% | 3/23/2015 | TTM 3/31/2015 | 510,634 | 176,818 | 333,816 | 0 | 333,816 | ||||||||||||||||||||||
99 | Storaway Self Storage - Palm Bay | 292,725 | 354,667 | 10,253 | 0 | 344,414 | 95.3% | 3/31/2015 | TTM 3/31/2015 | 650,230 | 273,316 | 376,914 | 0 | 376,914 | ||||||||||||||||||||||
100 | Bowen Tower Apartments | 418,252 | 317,591 | 43,856 | 0 | 273,736 | 96.7% | 4/1/2015 | Annualized 8 8/27/2014 | 758,028 | 350,891 | 407,137 | 0 | 407,137 | ||||||||||||||||||||||
101 | 321 West 90th St. Owners Corp. | 606,900 | 1,661,608 | 11,700 | 0 | 1,661,608 | 95.0% | 2/17/2015 | ||||||||||||||||||||||||||||
102 | West Friendship Shopping Center | 119,533 | 247,004 | 3,343 | 9,166 | 234,496 | 95.2% | 5/15/2015 | Actual 2014 | 530,006 | 162,681 | 367,325 | 0 | 367,325 | ||||||||||||||||||||||
103 | Crestview Self Storage | 262,522 | 306,532 | 8,946 | 0 | 297,586 | 80.5% | 3/17/2015 | TTM 3/31/2015 | 564,875 | 216,073 | 348,801 | 0 | 348,801 | ||||||||||||||||||||||
104 | Denn Owners Corporation | 658,084 | 474,439 | 11,100 | 0 | 474,439 | 95.0% | 11/25/2014 | ||||||||||||||||||||||||||||
105 | Moundsville Plaza | 170,064 | 299,554 | 21,070 | 27,738 | 250,746 | 100.0% | 4/17/2015 | Actual 2014 | 462,897 | 175,827 | 287,070 | 0 | 287,070 | ||||||||||||||||||||||
106 | Storaway Self Storage- Deltona I | 200,202 | 259,231 | 6,616 | 0 | 252,615 | 95.4% | 3/31/2015 | TTM 3/31/2015 | 459,482 | 189,559 | 269,923 | 0 | 269,923 | ||||||||||||||||||||||
107 | Sedona Peak Apartments | 303,826 | 277,675 | 23,256 | 0 | 254,419 | 92.1% | 3/21/2015 | TTM 3/31/2015 | 581,501 | 294,101 | 287,400 | 0 | 287,400 | ||||||||||||||||||||||
108 | Sea Breeze Town Houses Owners, Inc. | 156,218 | 336,262 | 3,800 | 0 | 336,262 | 95.0% | 3/24/2015 | ||||||||||||||||||||||||||||
109 | Willow Lake Shops | 56,529 | 204,097 | 4,859 | 14,091 | 185,147 | 100.0% | 3/9/2015 | Annualized 10 10/31/2014 | 276,064 | 23,812 | 252,252 | 0 | 252,252 | ||||||||||||||||||||||
110 | Wickham Park Commons | 132,877 | 181,997 | 3,044 | 12,672 | 166,281 | 83.5% | 2/28/2015 | Actual 2014 | 223,806 | 133,952 | 89,854 | 0 | 89,854 | ||||||||||||||||||||||
111 | Crown Pointe Plaza | 189,258 | 276,495 | 10,492 | 29,182 | 236,821 | 93.6% | 3/31/2015 | Actual 2014 | 344,904 | 188,540 | 156,364 | 12,092 | 144,272 | ||||||||||||||||||||||
112 | Hartsdale Executive House, Inc. | 816,200 | 1,031,401 | 22,000 | 0 | 1,031,401 | 96.0% | 2/27/2015 | ||||||||||||||||||||||||||||
113 | 25 Chapel Corp. | 515,400 | 806,647 | 14,300 | 0 | 806,647 | 96.0% | 3/25/2015 | ||||||||||||||||||||||||||||
114 | Market Place Village | 65,292 | 202,141 | 2,189 | 13,864 | 186,087 | 91.4% | 12/31/2014 | Actual 2014 | 242,074 | 73,291 | 168,783 | 90,132 | 78,650 | ||||||||||||||||||||||
115 | Kingstowne Shops | 123,470 | 195,245 | 4,898 | 19,415 | 170,932 | 93.1% | 1/19/2015 | TTM 2/28/2015 | 307,801 | 126,123 | 181,678 | 0 | 181,678 | ||||||||||||||||||||||
116 | 109-111 N. Broadway Apt. Corp. | 605,053 | 570,477 | 10,400 | 0 | 570,477 | 95.0% | 1/12/2015 | ||||||||||||||||||||||||||||
117 | 40 Prospect Park West Owners Corp. | 852,514 | 1,722,144 | 8,400 | 0 | 1,722,144 | 95.0% | 4/15/2015 | ||||||||||||||||||||||||||||
118 | Shops of Orland Park | 145,976 | 192,683 | 7,149 | 16,580 | 168,954 | 90.5% | 4/1/2015 | TTM 2/28/2015 | 329,097 | 134,829 | 194,268 | 0 | 194,268 | ||||||||||||||||||||||
119 | Victorville Retail Center | 144,319 | 326,122 | 2,323 | 15,643 | 308,156 | 82.8% | 2/1/2015 | TTM 2/28/2015 | 525,409 | 138,713 | 386,696 | 0 | 386,696 | ||||||||||||||||||||||
120 | 6 West 20th St. Tenants Corp. | 579,285 | 1,788,957 | 11,350 | 0 | 1,788,957 | 93.8% | 1/22/2015 | ||||||||||||||||||||||||||||
121 | 50-22 Owners Ltd. | 325,150 | 537,885 | 7,440 | 0 | 537,885 | 95.0% | 12/12/2014 | ||||||||||||||||||||||||||||
122 | 585 McLean Owners, Inc. | 358,200 | 286,216 | 12,900 | 0 | 286,216 | 95.0% | 3/11/2015 | ||||||||||||||||||||||||||||
123 | 12 West 17th St. Tenants' Corp. | 494,500 | 1,063,784 | 7,600 | 0 | 1,063,784 | 94.9% | 12/15/2014 | ||||||||||||||||||||||||||||
124 | Gillespie Field Business Park | 97,973 | 124,669 | 3,340 | 8,790 | 112,539 | 100.0% | 5/1/2015 | TTM 3/31/2015 | 170,227 | 80,723 | 89,505 | 0 | 89,505 | ||||||||||||||||||||||
125 | Waters at West End, Inc. | 379,900 | 510,212 | 9,800 | 0 | 510,212 | 96.0% | 1/30/2015 | ||||||||||||||||||||||||||||
126 | Jones St. Owners Corporation | 234,500 | 670,974 | 4,000 | 0 | 670,974 | 94.7% | 10/28/2014 | ||||||||||||||||||||||||||||
127 | Big Lots Plaza | 91,839 | 208,483 | 14,878 | 32,875 | 160,730 | 97.8% | 4/23/2015 | Actual 2014 | 302,925 | 88,411 | 214,514 | 0 | 214,514 | ||||||||||||||||||||||
128 | 30 Bond Street Owners Corp. | 112,950 | 666,582 | 3,500 | 0 | 666,582 | 95.0% | 12/23/2014 | ||||||||||||||||||||||||||||
129 | 166 West 76th Apartment Corp. | 469,050 | 931,212 | 7,100 | 0 | 931,212 | 95.0% | 2/19/2015 | ||||||||||||||||||||||||||||
130 | Hanna Shoppes | 65,679 | 120,128 | 5,982 | 9,335 | 104,811 | 100.0% | 4/6/2015 | Actual 2013 | 199,285 | 64,621 | 134,664 | 0 | 134,664 | ||||||||||||||||||||||
131 | Carroll Gardens Owners, Corp. | 309,000 | 253,806 | 8,000 | 0 | 253,806 | 95.0% | 3/30/2015 | ||||||||||||||||||||||||||||
132 | 170 East 92nd Street Owners, Inc. | 231,750 | 400,186 | 3,900 | 0 | 400,186 | 97.0% | 4/1/2015 | ||||||||||||||||||||||||||||
133 | 17 Warren Street Tenants Corporation | 165,900 | 300,398 | 2,400 | 0 | 300,398 | 95.0% | 12/17/2014 |
A-1-10 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Mortgage Loan Number | Property Name | Second Most Recent Period | Second Most Recent Revenues ($) | Second Most Recent Expenses ($) | Second Most Recent NOI ($) | Second Most Recent Capital Expenditures | Second Most Recent NCF ($) | Second Most Recent Hotel ADR | Second Most Recent Hotel RevPAR | Third Most Recent Period | Third Most Recent Revenues ($) | Third Most Recent Expenses ($) | Third Most Recent NOI ($) | Third Most Recent Capital Expenditures | Third Most Recent NCF ($) | Third Most Recent Hotel ADR | Third Most Recent Hotel RevPAR | Master Lease (Y/N) | ||||||||||||||||||
1 | Hutchinson Metro Center I | Actual 2013 | 14,575,291 | 5,419,876 | 9,155,415 | 0 | 9,155,415 | Actual 2012 | 13,997,198 | 5,043,300 | 8,953,898 | 0 | 8,953,898 | N | ||||||||||||||||||||||
2 | Cathedral Place | Actual 2013 | 6,927,787 | 2,737,621 | 4,190,167 | 0 | 4,190,167 | Actual 2012 | 6,505,645 | 2,683,756 | 3,821,889 | 0 | 3,821,889 | N | ||||||||||||||||||||||
3 | 150 Royall Street | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | N | ||||||||||||||||||||||
4 | WPC Self Storage Portfolio VII | Actual 2014 | 5,648,201 | 2,034,865 | 3,613,336 | 0 | 3,613,336 | Various | 5,049,437 | 1,989,813 | 3,059,624 | 0 | 3,059,624 | N | ||||||||||||||||||||||
4.01 | Extra Space Louisville KY | Actual 2014 | 1,070,997 | 199,684 | 871,313 | 0 | 871,313 | Actual 2013 | 1,038,677 | 180,239 | 858,438 | 0 | 858,438 | N | ||||||||||||||||||||||
4.02 | Extra Space Las Vegas NV | Actual 2014 | 810,032 | 229,881 | 580,151 | 0 | 580,151 | Actual 2013 | 812,417 | 237,687 | 574,730 | 0 | 574,730 | N | ||||||||||||||||||||||
4.03 | CubeSmart Joan Panama City Beach FL | Actual 2014 | 694,122 | 318,979 | 375,143 | 0 | 375,143 | Actual 2013 | 502,183 | 293,588 | 208,595 | 0 | 208,595 | N | ||||||||||||||||||||||
4.04 | CubeSmart Tallahassee FL | Actual 2014 | 804,196 | 313,922 | 490,274 | 0 | 490,274 | TTM 4/30/2014 | 738,741 | 261,906 | 476,835 | 0 | 476,835 | N | ||||||||||||||||||||||
4.05 | Extra Space Lady Lake FL | Actual 2014 | 644,404 | 269,334 | 375,070 | 0 | 375,070 | Actual 2013 | 492,151 | 321,777 | 170,374 | 0 | 170,374 | N | ||||||||||||||||||||||
4.06 | CubeSmart Crystal Lake IL | Actual 2014 | 489,733 | 199,940 | 289,793 | 0 | 289,793 | Actual 2013 | 411,576 | 169,526 | 242,050 | 0 | 242,050 | N | ||||||||||||||||||||||
4.07 | CubeSmart Hutchinson Panama City Beach FL | Actual 2014 | 405,578 | 189,023 | 216,555 | 0 | 216,555 | Actual 2013 | 400,182 | 177,077 | 223,106 | 0 | 223,106 | N | ||||||||||||||||||||||
4.08 | Extra Space Lilburn GA | Actual 2014 | 419,345 | 155,654 | 263,691 | 0 | 263,691 | Actual 2013 | 377,588 | 199,596 | 177,992 | 0 | 177,992 | N | ||||||||||||||||||||||
4.09 | Extra Space Stockbridge GA | Actual 2014 | 309,795 | 158,448 | 151,347 | 0 | 151,347 | Actual 2013 | 275,922 | 148,417 | 127,505 | 0 | 127,505 | N | ||||||||||||||||||||||
5 | Queens' MarketPlace | Actual 2014 | 6,965,088 | 3,798,634 | 3,166,454 | 0 | 3,166,454 | Actual 2013 | 6,389,044 | 3,771,353 | 2,617,691 | 0 | 2,617,691 | N | ||||||||||||||||||||||
6 | El Sol Brillante and Laguna Del Sol Apartments | Actual 2014 | 5,614,881 | 2,796,427 | 2,818,454 | 0 | 2,818,454 | Actual 2013 | 3,907,266 | 2,945,829 | 961,437 | 0 | 961,437 | N | ||||||||||||||||||||||
6.01 | Laguna Del Sol Apartments | Actual 2014 | 2,756,723 | 1,329,514 | 1,427,209 | 0 | 1,427,209 | Actual 2013 | 1,944,174 | 1,341,518 | 602,656 | 0 | 602,656 | N | ||||||||||||||||||||||
6.02 | El Sol Brillante Apartments | Actual 2014 | 2,858,158 | 1,466,913 | 1,391,245 | 0 | 1,391,245 | Actual 2013 | 1,963,092 | 1,604,311 | 358,781 | 0 | 358,781 | N | ||||||||||||||||||||||
7 | Country Club Center | Actual 2013 | 2,868,541 | 1,067,255 | 1,801,286 | 0 | 1,801,286 | Actual 2012 | 2,978,310 | 1,014,284 | 1,964,026 | 0 | 1,964,026 | N | ||||||||||||||||||||||
8 | Parkway Crossing East Shopping Center | Actual 2013 | 2,655,687 | 656,226 | 1,999,461 | 0 | 1,999,461 | Actual 2012 | 2,758,921 | 680,210 | 2,078,711 | 0 | 2,078,711 | N | ||||||||||||||||||||||
9 | Olmsted Plaza Shopping Center | Actual 2013 | 4,198,846 | 1,472,934 | 2,725,912 | 0 | 2,725,912 | Actual 2012 | 4,378,847 | 1,418,578 | 2,960,269 | 0 | 2,960,269 | N | ||||||||||||||||||||||
10 | Hall Office Park | Actual 2013 | 3,172,555 | 1,457,041 | 1,715,514 | 0 | 1,715,514 | Actual 2012 | 2,749,175 | 1,375,807 | 1,373,368 | 0 | 1,373,368 | N | ||||||||||||||||||||||
11 | Dulles North Corporate Parks | Actual 2014 | 3,949,450 | 899,321 | 3,050,129 | 0 | 3,050,129 | Actual 2013 | 3,836,125 | 836,908 | 2,999,217 | 0 | 2,999,217 | N | ||||||||||||||||||||||
11.01 | Dulles North Corporate Park 5 | Actual 2014 | 2,027,530 | 422,847 | 1,604,683 | 0 | 1,604,683 | Actual 2013 | 1,923,572 | 380,022 | 1,543,550 | 0 | 1,543,550 | N | ||||||||||||||||||||||
11.02 | Dulles North Corporate Park 2 | Actual 2014 | 1,921,920 | 476,474 | 1,445,446 | 0 | 1,445,446 | Actual 2013 | 1,912,553 | 456,886 | 1,455,667 | 0 | 1,455,667 | N | ||||||||||||||||||||||
12 | Coastal Village Apartments | Actual 2014 | 4,748,292 | 2,561,463 | 2,186,829 | 0 | 2,186,829 | Actual 2013 | 4,465,826 | 2,266,606 | 2,199,220 | 0 | 2,199,220 | N | ||||||||||||||||||||||
13 | Foothills Park Place | Actual 2014 | 2,951,950 | 776,016 | 2,175,933 | 0 | 2,175,933 | Actual 2013 | 3,369,671 | 826,524 | 2,543,147 | 0 | 2,543,147 | N | ||||||||||||||||||||||
14 | Smiths Medical | Actual 2014 | 2,352,293 | 1,524,960 | 827,333 | 0 | 827,333 | Actual 2013 | 2,243,741 | 1,728,479 | 515,262 | 0 | 515,262 | N | ||||||||||||||||||||||
15 | Hunterstone Apartments | Actual 2014 | 2,581,622 | 956,225 | 1,625,397 | 0 | 1,625,397 | Actual 2013 | 2,503,966 | 947,436 | 1,556,530 | 0 | 1,556,530 | N | ||||||||||||||||||||||
16 | Magnolia Marketplace | N | ||||||||||||||||||||||||||||||||||
17 | Norfolk Commerce Park | Actual 2014 | 3,619,888 | 1,361,284 | 2,258,604 | 0 | 2,258,604 | Actual 2013 | 3,477,494 | 1,304,919 | 2,172,575 | 0 | 2,172,575 | Y | ||||||||||||||||||||||
18 | Summer Bend Apartments | Actual 2014 | 2,950,999 | 1,335,036 | 1,615,963 | 0 | 1,615,963 | Actual 2013 | 2,794,513 | 1,276,689 | 1,517,824 | 0 | 1,517,824 | N | ||||||||||||||||||||||
19 | Baywoods of Annapolis | N | ||||||||||||||||||||||||||||||||||
20 | Rock Hill Hampton Inn | Actual 2014 | 5,147,607 | 3,065,991 | 2,081,615 | 0 | 2,081,615 | 104 | 85 | Actual 2013 | 4,598,663 | 2,723,583 | 1,875,080 | 0 | 1,875,080 | 98 | 76 | N | ||||||||||||||||||
21 | Louisville Plaza | Actual 2014 | 1,804,409 | 624,290 | 1,180,119 | 0 | 1,180,119 | Actual 2013 | 1,653,461 | 721,019 | 932,442 | 0 | 932,442 | N | ||||||||||||||||||||||
22 | Marquis Place | N | ||||||||||||||||||||||||||||||||||
23 | Riverside Technology Park A & B | Actual 2014 | 1,836,031 | 394,800 | 1,441,231 | 0 | 1,441,231 | Actual 2013 | 622,350 | 348,093 | 274,257 | 0 | 274,257 | N | ||||||||||||||||||||||
24 | Maricopa Fiesta | Actual 2014 | 1,838,632 | 645,398 | 1,193,234 | 0 | 1,193,234 | Actual 2013 | 1,869,245 | 646,405 | 1,222,840 | 0 | 1,222,840 | N | ||||||||||||||||||||||
25 | Dunwoody Place | Actual 2013 | 1,626,534 | 526,945 | 1,099,589 | 0 | 1,099,589 | Actual 2012 | 1,231,817 | 296,172 | 935,645 | 0 | 935,645 | N | ||||||||||||||||||||||
26 | Jackson Square Apartments | Actual 2013 | 1,662,251 | 811,049 | 851,202 | 0 | 851,202 | Actual 2012 | 1,655,295 | 771,050 | 884,245 | 0 | 884,245 | N | ||||||||||||||||||||||
27 | Shops at Doral | Actual 2014 | 1,443,896 | 343,593 | 1,100,303 | 0 | 1,100,303 | Actual 2013 | 1,304,970 | 226,470 | 1,078,500 | 10,014 | 1,068,487 | N | ||||||||||||||||||||||
28 | Solano Apartments | Actual 2014 | 2,329,704 | 1,291,871 | 1,037,833 | 0 | 1,037,833 | Actual 2013 | 2,420,265 | 1,443,398 | 976,867 | 0 | 976,867 | N | ||||||||||||||||||||||
29 | Riverchase Apartments | Actual 2014 | 1,874,187 | 871,058 | 1,003,129 | 0 | 1,003,129 | Actual 2013 | 1,807,827 | 892,955 | 914,872 | 0 | 914,872 | N | ||||||||||||||||||||||
30 | Old Mills | Actual 2014 | 1,970,988 | 844,877 | 1,126,111 | 0 | 1,126,111 | Actual 2013 | 1,918,840 | 827,137 | 1,091,703 | 0 | 1,091,703 | N | ||||||||||||||||||||||
31 | Ozinus Realty Property Portfolio | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | N | ||||||||||||||||||||||
31.01 | Shiloh Crossing | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | N | ||||||||||||||||||||||
31.02 | Texas Star | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | N | ||||||||||||||||||||||
31.03 | Pitney Bowes | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | N | ||||||||||||||||||||||
31.04 | Towne Crest Village | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | N | ||||||||||||||||||||||
31.05 | Eagle Plaza | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | N | ||||||||||||||||||||||
31.06 | Palmetto | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | N | ||||||||||||||||||||||
31.07 | Hamlin | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | N | ||||||||||||||||||||||
32 | Brickyard Square | Actual 2014 | 3,447,520 | 865,439 | 2,582,081 | 0 | 2,582,081 | Actual 2013 | 2,561,361 | 790,925 | 1,770,435 | 0 | 1,770,435 | N | ||||||||||||||||||||||
33 | Dos Santos Apartments | Actual 2014 | 1,985,075 | 900,605 | 1,084,469 | 0 | 1,084,469 | Actual 2013 | 1,990,853 | 966,844 | 1,024,009 | 0 | 1,024,009 | N | ||||||||||||||||||||||
34 | Villa Bella | Actual 2014 | 3,195,968 | 2,158,191 | 1,037,777 | 0 | 1,037,777 | Actual 2013 | 3,033,349 | 2,243,508 | 789,841 | 0 | 789,841 | N | ||||||||||||||||||||||
35 | Bayview Office Building | Actual 2014 | 1,961,222 | 1,034,265 | 926,958 | 0 | 926,958 | Actual 2013 | 1,640,396 | 896,991 | 743,405 | 0 | 743,405 | N | ||||||||||||||||||||||
36 | Casa Nube | Actual 2014 | 2,385,458 | 1,168,084 | 1,217,374 | 0 | 1,217,374 | Actual 2013 | 1,818,691 | 1,278,729 | 539,961 | 0 | 539,961 | N | ||||||||||||||||||||||
37 | Homewood Suites - Tallahassee | Actual 2014 | 3,461,725 | 2,209,645 | 1,252,080 | 0 | 1,252,080 | 120 | 96 | Actual 2013 | 3,129,809 | 2,099,793 | 1,030,016 | 0 | 1,030,016 | 110 | 84 | N | ||||||||||||||||||
38 | San Mateo Apartments | Actual 2014 | 1,772,813 | 934,432 | 838,382 | 0 | 838,382 | Actual 2013 | 1,887,951 | 1,039,115 | 848,836 | 0 | 848,836 | N | ||||||||||||||||||||||
39 | Brittany Bay II | Actual 2013 | 2,009,174 | 841,421 | 1,167,753 | 62,400 | 1,105,353 | Actual 2012 | 1,899,564 | 909,719 | 989,845 | 62,400 | 927,445 | N | ||||||||||||||||||||||
40 | Nexus Town Center | Actual 2013 | 1,473,040 | 418,527 | 1,054,513 | 0 | 1,054,513 | Actual 2012 | 1,419,671 | 399,872 | 1,019,799 | 0 | 1,019,799 | N | ||||||||||||||||||||||
41 | Cathedral Place - Parking | Actual 2013 | 1,444,694 | 320,139 | 1,124,555 | 0 | 1,124,555 | Actual 2012 | 1,362,600 | 315,110 | 1,047,490 | 0 | 1,047,490 | N | ||||||||||||||||||||||
42 | Indiana Village | Actual 2014 | 1,786,859 | 1,010,225 | 776,634 | 0 | 776,634 | Actual 2013 | 1,609,240 | 991,001 | 618,239 | 0 | 618,239 | N | ||||||||||||||||||||||
43 | Fahrens Park Plaza | Actual 2014 | 1,149,775 | 248,129 | 901,646 | 0 | 901,646 | Actual 2013 | 1,010,526 | 231,350 | 779,176 | 0 | 779,176 | N | ||||||||||||||||||||||
44 | Causeway Corporate Centre | Actual 2013 | 1,445,911 | 520,004 | 925,907 | 0 | 925,907 | Actual 2012 | 1,388,020 | 533,115 | 854,905 | 0 | 854,905 | N | ||||||||||||||||||||||
45 | TownePlace Suites St. George by Marriott | Actual 2013 | 2,472,315 | 1,464,870 | 1,007,445 | 97,022 | 910,423 | 99 | 76 | Actual 2012 | 2,107,608 | 1,385,768 | 721,839 | 84,304 | 637,535 | 89 | 67 | N | ||||||||||||||||||
46 | IRG - Ellsworth Bailey Saratoga | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | N | ||||||||||||||||||||||
46.01 | Saratoga II | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | N | ||||||||||||||||||||||
46.02 | Saratoga I | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | N | ||||||||||||||||||||||
46.03 | Ellsworth Bailey Lordstown | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | N | ||||||||||||||||||||||
47 | 39-60 54th Street Owners, Inc. | N | ||||||||||||||||||||||||||||||||||
48 | Courtyard by Marriott - Shawnee | Actual 2014 | 3,235,321 | 2,229,566 | 1,005,755 | 129,413 | 876,342 | 119 | 91 | Actual 2013 | 2,857,923 | 2,021,614 | 836,309 | 104,420 | 731,889 | 119 | 79 | N | ||||||||||||||||||
49 | Athens Gate Apartments | Actual 2014 | 1,495,183 | 753,734 | 741,449 | 0 | 741,449 | Actual 2013 | 1,568,019 | 838,412 | 729,607 | 0 | 729,607 | N | ||||||||||||||||||||||
50 | Sand Pebble Apartments | Actual 2014 | 1,719,243 | 1,006,452 | 712,791 | 0 | 712,791 | Actual 2013 | 1,800,049 | 1,017,809 | 782,240 | 0 | 782,240 | N | ||||||||||||||||||||||
51 | Trojan Storage of Oxnard | Actual 2014 | 1,031,344 | 418,068 | 613,277 | 0 | 613,277 | Actual 2013 | 902,649 | 394,291 | 508,358 | 0 | 508,358 | N | ||||||||||||||||||||||
52 | CVS - Lynn, MA | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | N | ||||||||||||||||||||||
53 | Gilbert Crossing | Actual 2013 | 931,679 | 276,667 | 655,012 | 0 | 655,012 | NAV | NAV | NAV | NAV | NAV | NAV | N | ||||||||||||||||||||||
54 | 1321 Harbor Bay Parkway | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | N | ||||||||||||||||||||||
55 | Casa Cruz | Actual 2014 | 1,860,768 | 1,117,166 | 743,602 | 0 | 743,602 | Actual 2013 | 1,692,640 | 1,066,476 | 626,164 | 0 | 626,164 | N | ||||||||||||||||||||||
56 | Best Western Plus - Windsor Gardens | Actual 2014 | 2,028,126 | 1,016,966 | 1,011,160 | 0 | 1,011,160 | 106 | 65 | Actual 2013 | 1,058,878 | 807,211 | 251,667 | 0 | 251,667 | 88 | 34 | N | ||||||||||||||||||
57 | Oak Tree Plaza | Actual 2014 | 735,417 | 178,466 | 556,951 | 0 | 556,951 | Actual 2013 | 617,102 | 165,125 | 451,977 | 0 | 451,977 | N | ||||||||||||||||||||||
58 | Peppertree Lane Apartments | Actual 2014 | 1,370,831 | 684,490 | 686,341 | 0 | 686,341 | Actual 2013 | 1,337,711 | 692,574 | 645,137 | 0 | 645,137 | N | ||||||||||||||||||||||
59 | 8211 Town Center Drive | Actual 2014 | 333,493 | 274,440 | 59,053 | 0 | 59,053 | NAV | NAV | NAV | NAV | NAV | NAV | N | ||||||||||||||||||||||
60 | Staybridge Suites Indianapolis Airport | Actual 2014 | 2,535,248 | 1,819,291 | 715,956 | 101,410 | 614,546 | 91 | 78 | Actual 2013 | 2,306,833 | 1,733,238 | 573,596 | 92,273 | 481,323 | 89 | 71 | N | ||||||||||||||||||
61 | Austin Heights Shopping Center | Actual 2013 | 1,076,743 | 320,784 | 755,959 | 0 | 755,959 | Actual 2012 | 1,089,854 | 323,451 | 766,403 | 0 | 766,403 | Y | ||||||||||||||||||||||
62 | Walgreens - Duncanville, TX | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | N | ||||||||||||||||||||||
63 | Trojan Storage of Roseville | Actual 2014 | 761,634 | 336,582 | 425,052 | 0 | 425,052 | Actual 2013 | 657,608 | 322,988 | 334,621 | 0 | 334,621 | N | ||||||||||||||||||||||
64 | Lakeside Plaza | Actual 2014 | 1,346,172 | 407,007 | 939,165 | 0 | 939,165 | Actual 2013 | 1,161,183 | 385,356 | 775,827 | 0 | 775,827 | N | ||||||||||||||||||||||
65 | Green Acres MHP | Actual 2014 | 771,825 | 312,169 | 459,656 | 0 | 459,656 | Actual 2013 | 739,324 | 289,668 | 449,656 | 0 | 449,656 | N | ||||||||||||||||||||||
66 | Mendicino Green Apartment Corp. | N | ||||||||||||||||||||||||||||||||||
67 | Walgreens - Richmond Heights | Actual 2014 | 420,000 | 0 | 420,000 | 0 | 420,000 | Actual 2013 | 420,000 | 0 | 420,000 | 0 | 420,000 | N | ||||||||||||||||||||||
68 | Rivertown Center | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | N | ||||||||||||||||||||||
69 | Bristol House, Inc. | N | ||||||||||||||||||||||||||||||||||
70 | Storaway Self Storage - Nashville | Actual 2014 | 983,060 | 371,057 | 612,003 | 0 | 612,003 | Actual 2013 | 919,593 | 343,397 | 576,197 | 0 | 576,197 | N | ||||||||||||||||||||||
71 | Bella Luna / San Lucas | Actual 2013 | 3,368,214 | 2,442,850 | 925,364 | 0 | 925,364 | Annualized 9 12/31/2012 | 1,659,469 | 1,485,614 | 173,855 | 0 | 173,855 | N | ||||||||||||||||||||||
72 | Seacoast Self Storage | Actual 2014 | 643,294 | 126,703 | 516,591 | 0 | 516,591 | Actual 2013 | 625,314 | 117,235 | 508,079 | 0 | 508,079 | N | ||||||||||||||||||||||
73 | 230 Garth Road Owners, Inc. | N | ||||||||||||||||||||||||||||||||||
74 | Comfort Suites - Near the Galleria | Actual 2013 | 1,628,062 | 1,138,799 | 489,263 | 0 | 489,263 | 97 | 72 | Actual 2012 | 1,346,477 | 1,000,137 | 346,341 | 0 | 346,341 | 90 | 58 | N | ||||||||||||||||||
75 | Sandstone Apartments | Annualized 6 12/31/2013 | 771,814 | 520,488 | 251,326 | 0 | 251,326 | NAV | NAV | NAV | NAV | NAV | NAV | N | ||||||||||||||||||||||
76 | Tieton Village | Actual 2013 | 556,823 | 86,403 | 470,420 | 0 | 470,420 | Actual 2012 | 531,179 | 85,229 | 445,949 | 0 | 445,949 | N | ||||||||||||||||||||||
77 | Highland Terrace Housing Development Fund Corporation | N | ||||||||||||||||||||||||||||||||||
78 | Cooperstown Commons Shopping Center | Actual 2014 | 805,945 | 303,764 | 502,182 | 0 | 502,182 | Actual 2013 | 782,635 | 278,836 | 503,798 | 0 | 503,798 | N | ||||||||||||||||||||||
79 | Lake Lucina Shopping Center | Actual 2012 | 646,460 | 198,597 | 447,863 | 3,662 | 444,201 | Actual 2011 | 629,360 | 204,228 | 425,132 | 0 | 425,132 | N | ||||||||||||||||||||||
80 | Silver Bridge Plaza | Actual 2013 | 692,148 | 237,967 | 454,181 | 0 | 454,181 | Actual 2012 | 681,766 | 204,547 | 477,218 | 0 | 477,218 | N | ||||||||||||||||||||||
81 | Karen Gardens Apartment Corp. | N | ||||||||||||||||||||||||||||||||||
82 | East Haven Self Storage | Actual 2014 | 429,259 | 110,914 | 318,345 | 0 | 318,345 | Actual 2013 | 412,226 | 105,709 | 306,517 | 0 | 306,517 | N | ||||||||||||||||||||||
83 | Walgreens - Milwaukee | Actual 2013 | 319,429 | 11,270 | 308,159 | 0 | 308,159 | Actual 2012 | 336,752 | 0 | 336,752 | 0 | 336,752 | N |
A-1-11 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Mortgage Loan Number | Property Name | Second Most Recent Period | Second Most Recent Revenues ($) | Second Most Recent Expenses ($) | Second Most Recent NOI ($) | Second Most Recent Capital Expenditures | Second Most Recent NCF ($) | Second Most Recent Hotel ADR | Second Most Recent Hotel RevPAR | Third Most Recent Period | Third Most Recent Revenues ($) | Third Most Recent Expenses ($) | Third Most Recent NOI ($) | Third Most Recent Capital Expenditures | Third Most Recent NCF ($) | Third Most Recent Hotel ADR | Third Most Recent Hotel RevPAR | Master Lease (Y/N) | ||||||||||||||||||
84 | Haggen Food & Pharmacy | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | NAV | N | ||||||||||||||||||||||
85 | Sycamore Terrace | Actual 2014 | 477,298 | 228,373 | 248,924 | 0 | 248,924 | Actual 2013 | 511,044 | 238,082 | 272,961 | 0 | 272,961 | N | ||||||||||||||||||||||
86 | Ramona Plaza Shopping Center | Actual 2014 | 522,322 | 190,588 | 331,734 | 0 | 331,734 | Actual 2013 | 495,863 | 194,621 | 301,242 | 0 | 301,242 | N | ||||||||||||||||||||||
87 | All A/C Self Storage | Actual 2014 | 456,312 | 136,852 | 319,460 | 0 | 319,460 | Actual 2013 | 445,083 | 129,869 | 315,214 | 0 | 315,214 | N | ||||||||||||||||||||||
88 | Pecue MHC | Actual 2014 | 451,143 | 208,484 | 242,659 | 0 | 242,659 | Actual 2013 | 449,454 | 201,524 | 247,930 | 0 | 247,930 | N | ||||||||||||||||||||||
89 | Regency Park Owners Corp. | N | ||||||||||||||||||||||||||||||||||
90 | Storaway Self Storage - Deltona II | Actual 2014 | 641,797 | 288,176 | 353,620 | 0 | 353,620 | Actual 2013 | 587,648 | 311,456 | 276,192 | 0 | 276,192 | N | ||||||||||||||||||||||
91 | Lakewood Place Shopping Center | Actual 2014 | 313,496 | 66,325 | 247,171 | 0 | 247,171 | Actual 2013 | 378,732 | 60,209 | 318,523 | 0 | 318,523 | N | ||||||||||||||||||||||
92 | Hacienda Heights Apartments | Actual 2014 | 428,903 | 127,668 | 301,235 | 0 | 301,235 | Actual 2013 | 423,491 | 147,862 | 275,629 | 0 | 275,629 | N | ||||||||||||||||||||||
93 | Nagle House, Inc. | N | ||||||||||||||||||||||||||||||||||
94 | Walgreens - Warrensburg, MO | Actual 2013 | 298,000 | 0 | 298,000 | 0 | 298,000 | Actual 2012 | 298,000 | 0 | 298,000 | 0 | 298,000 | N | ||||||||||||||||||||||
95 | 230 Tenants Corporation | N | ||||||||||||||||||||||||||||||||||
96 | Shackelford Center | Actual 2013 | 437,862 | 103,154 | 334,708 | 0 | 334,708 | Actual 2012 | 400,646 | 84,010 | 316,636 | 0 | 316,636 | N | ||||||||||||||||||||||
97 | De La Cruz Professional Center | Actual 2014 | 491,045 | 82,199 | 408,846 | 0 | 408,846 | Actual 2013 | 457,256 | 63,787 | 393,469 | 0 | 393,469 | N | ||||||||||||||||||||||
98 | Folcroft Self Storage | Actual 2014 | 501,418 | 176,205 | 325,213 | 0 | 325,213 | Actual 2013 | 475,567 | 169,103 | 306,464 | 0 | 306,464 | N | ||||||||||||||||||||||
99 | Storaway Self Storage - Palm Bay | Actual 2014 | 636,057 | 275,483 | 360,575 | 0 | 360,575 | Actual 2013 | 601,723 | 268,640 | 333,084 | 0 | 333,084 | N | ||||||||||||||||||||||
100 | Bowen Tower Apartments | Actual 2013 | 741,567 | 364,452 | 377,115 | 0 | 377,115 | Actual 2012 | 678,953 | 354,581 | 324,372 | 0 | 324,372 | N | ||||||||||||||||||||||
101 | 321 West 90th St. Owners Corp. | N | ||||||||||||||||||||||||||||||||||
102 | West Friendship Shopping Center | Actual 2013 | 389,975 | 114,937 | 275,038 | 0 | 275,038 | Actual 2012 | 386,551 | 144,234 | 242,317 | 0 | 242,317 | N | ||||||||||||||||||||||
103 | Crestview Self Storage | Actual 2014 | 538,760 | 209,399 | 329,362 | 0 | 329,362 | Actual 2013 | 501,825 | 199,742 | 302,083 | 0 | 302,083 | N | ||||||||||||||||||||||
104 | Denn Owners Corporation | N | ||||||||||||||||||||||||||||||||||
105 | Moundsville Plaza | Actual 2013 | 437,013 | 173,224 | 263,788 | 0 | 263,788 | Actual 2012 | 443,115 | 154,125 | 288,990 | 0 | 288,990 | N | ||||||||||||||||||||||
106 | Storaway Self Storage- Deltona I | Actual 2014 | 442,611 | 192,137 | 250,474 | 0 | 250,474 | Actual 2013 | 424,596 | 196,809 | 227,787 | 0 | 227,787 | N | ||||||||||||||||||||||
107 | Sedona Peak Apartments | Actual 2014 | 574,664 | 296,142 | 278,522 | 0 | 278,522 | Actual 2013 | 587,132 | 321,995 | 265,137 | 0 | 265,137 | N | ||||||||||||||||||||||
108 | Sea Breeze Town Houses Owners, Inc. | N | ||||||||||||||||||||||||||||||||||
109 | Willow Lake Shops | Actual 2013 | 262,122 | 41,871 | 220,251 | 0 | 220,251 | Actual 2012 | 265,023 | 43,698 | 221,324 | 0 | 221,324 | N | ||||||||||||||||||||||
110 | Wickham Park Commons | Actual 2013 | 212,161 | 117,511 | 94,651 | 0 | 94,651 | NAV | NAV | NAV | NAV | NAV | NAV | N | ||||||||||||||||||||||
111 | Crown Pointe Plaza | Actual 2013 | 338,238 | 198,978 | 139,260 | 0 | 139,260 | Actual 2012 | 377,804 | 156,668 | 221,136 | 10,755 | 210,381 | N | ||||||||||||||||||||||
112 | Hartsdale Executive House, Inc. | N | ||||||||||||||||||||||||||||||||||
113 | 25 Chapel Corp. | N | ||||||||||||||||||||||||||||||||||
114 | Market Place Village | Actual 2013 | 234,238 | 51,401 | 182,837 | 15,535 | 167,302 | Actual 2012 | 185,878 | 45,183 | 140,696 | 15,230 | 125,465 | N | ||||||||||||||||||||||
115 | Kingstowne Shops | Actual 2014 | 306,837 | 126,857 | 179,980 | 0 | 179,980 | Actual 2013 | 324,661 | 120,898 | 203,763 | 0 | 203,763 | N | ||||||||||||||||||||||
116 | 109-111 N. Broadway Apt. Corp. | N | ||||||||||||||||||||||||||||||||||
117 | 40 Prospect Park West Owners Corp. | N | ||||||||||||||||||||||||||||||||||
118 | Shops of Orland Park | Actual 2014 | 330,667 | 137,770 | 192,897 | 0 | 192,897 | Actual 2013 | 351,297 | 137,985 | 213,312 | 0 | 213,312 | N | ||||||||||||||||||||||
119 | Victorville Retail Center | Actual 2014 | 553,703 | 141,445 | 412,258 | 0 | 412,258 | Actual 2013 | 624,608 | 129,296 | 495,312 | 0 | 495,312 | N | ||||||||||||||||||||||
120 | 6 West 20th St. Tenants Corp. | N | ||||||||||||||||||||||||||||||||||
121 | 50-22 Owners Ltd. | N | ||||||||||||||||||||||||||||||||||
122 | 585 McLean Owners, Inc. | N | ||||||||||||||||||||||||||||||||||
123 | 12 West 17th St. Tenants' Corp. | N | ||||||||||||||||||||||||||||||||||
124 | Gillespie Field Business Park | Actual 2014 | 159,344 | 86,152 | 73,193 | 0 | 73,193 | Actual 2013 | 280,209 | 90,094 | 190,116 | 0 | 190,116 | N | ||||||||||||||||||||||
125 | Waters at West End, Inc. | N | ||||||||||||||||||||||||||||||||||
126 | Jones St. Owners Corporation | N | ||||||||||||||||||||||||||||||||||
127 | Big Lots Plaza | Actual 2013 | 249,272 | 84,815 | 164,457 | 0 | 164,457 | Actual 2012 | 292,843 | 91,268 | 201,575 | 0 | 201,575 | N | ||||||||||||||||||||||
128 | 30 Bond Street Owners Corp. | N | ||||||||||||||||||||||||||||||||||
129 | 166 West 76th Apartment Corp. | N | ||||||||||||||||||||||||||||||||||
130 | Hanna Shoppes | Actual 2012 | 198,274 | 58,019 | 140,255 | 0 | 140,255 | NAV | NAV | NAV | NAV | NAV | NAV | N | ||||||||||||||||||||||
131 | Carroll Gardens Owners, Corp. | N | ||||||||||||||||||||||||||||||||||
132 | 170 East 92nd Street Owners, Inc. | N | ||||||||||||||||||||||||||||||||||
133 | 17 Warren Street Tenants Corporation | N |
A-1-12 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Mortgage Loan Number | Property Name | Largest Tenant Name(6)(7)(8) | Largest Tenant Sq. Ft. | Largest Tenant % of NRA | Largest Tenant Exp. Date | 2nd Largest Tenant Name(2)(6)(7)(9)(10) | 2nd Largest Tenant Sq. Ft. | 2nd Largest Tenant % of NRA | 2nd Largest Tenant Exp. Date | 3rd Largest Tenant Name(6)(7)(10) | 3rd Largest Tenant Sq. Ft. | 3rd Largest Tenant % of NRA | 3rd Largest Tenant Exp. Date | |||||||||||||
1 | Hutchinson Metro Center I | Mercy College | 125,522 | 29.7% | 2/27/2024 | Administration of Children Services | 63,462 | 15.0% | 3/31/2027 | NYC Housing Authority | 62,977 | 14.9% | 3/31/2026 | |||||||||||||
2 | Cathedral Place | Whyte Hirschboeck Dudek S.C. | 93,859 | 42.7% | 11/30/2020 | Executive Director, Inc. | 51,853 | 23.6% | 06/30/2030 | Deloitte & Touche USA, LLP | 37,476 | 17.1% | 10/31/2024 | |||||||||||||
3 | 150 Royall Street | CB&I | 188,857 | 72.8% | 1/31/2023 | OneBeacon | 41,185 | 15.9% | 3/31/2025 | Gray, Gray & Gray | 29,299 | 11.3% | 4/1/2030 | |||||||||||||
4 | WPC Self Storage Portfolio VII | |||||||||||||||||||||||||
4.01 | Extra Space Louisville KY | |||||||||||||||||||||||||
4.02 | Extra Space Las Vegas NV | |||||||||||||||||||||||||
4.03 | CubeSmart Joan Panama City Beach FL | |||||||||||||||||||||||||
4.04 | CubeSmart Tallahassee FL | |||||||||||||||||||||||||
4.05 | Extra Space Lady Lake FL | |||||||||||||||||||||||||
4.06 | CubeSmart Crystal Lake IL | |||||||||||||||||||||||||
4.07 | CubeSmart Hutchinson Panama City Beach FL | |||||||||||||||||||||||||
4.08 | Extra Space Lilburn GA | |||||||||||||||||||||||||
4.09 | Extra Space Stockbridge GA | |||||||||||||||||||||||||
5 | Queens' MarketPlace | Island Gourmet Markets | 23,627 | 18.0% | 4/30/2021 | Sansei Seafood | 6,263 | 4.8% | 4/30/2018 | Romano's Macaroni Grill | 6,196 | 4.7% | 11/30/2018 | |||||||||||||
6 | El Sol Brillante and Laguna Del Sol Apartments | |||||||||||||||||||||||||
6.01 | Laguna Del Sol Apartments | |||||||||||||||||||||||||
6.02 | El Sol Brillante Apartments | |||||||||||||||||||||||||
7 | Country Club Center | Wells Fargo Advisors | 15,460 | 23.8% | 11/30/2018 | Cabi Developers | 14,535 | 22.4% | 2/28/2030 | Turnberry Residential | 12,957 | 19.9% | 2/28/2030 | |||||||||||||
8 | Parkway Crossing East Shopping Center | Bed Bath & Beyond | 35,070 | 24.5% | 1/31/2020 | Babies R Us -- Leased Fee | 30,000 | 20.9% | 1/31/2020 | Michaels | 23,982 | 16.7% | 2/29/2020 | |||||||||||||
9 | Olmsted Plaza Shopping Center | Value City Furniture | 50,290 | 19.7% | 1/31/2026 | HHGREGG | 31,800 | 12.4% | 8/1/2021 | ALDI | 16,785 | 6.6% | 9/30/2024 | |||||||||||||
10 | Hall Office Park | FiServ Solutions, Inc. | 49,792 | 34.9% | 4/30/2019 | Levi Strauss & Co. | 17,457 | 12.2% | 3/31/2017 | Century Payments | 14,463 | 10.1% | 4/1/2018 | |||||||||||||
11 | Dulles North Corporate Parks | Various | Various | Various | Various | Various | Various | Various | Various | Various | Various | Various | Various | |||||||||||||
11.01 | Dulles North Corporate Park 5 | NTT Worldwide Telecommunications | 80,391 | 100.0% | 2/29/2020 | |||||||||||||||||||||
11.02 | Dulles North Corporate Park 2 | Asurion/National Electronics Warranty | 25,460 | 32.1% | 7/31/2016 | US Customs | 23,535 | 29.7% | 2/14/2017 | 1000 Sully Road, LLC | 20,056 | 25.3% | 5/31/2027 | |||||||||||||
12 | Coastal Village Apartments | |||||||||||||||||||||||||
13 | Foothills Park Place | Goodwill | 22,565 | 17.0% | 11/30/2029 | Peter Piper Pizza | 14,000 | 10.6% | 3/31/2018 | Fedex Kinko's | 7,000 | 5.3% | 9/30/2018 | |||||||||||||
14 | Smiths Medical | Smiths Medical ASD | 99,977 | 54.9% | 1/31/2028 | Brocade Communications | 44,846 | 24.6% | 12/31/2015 | Stanley Convergent | 37,427 | 20.5% | 5/31/2021 | |||||||||||||
15 | Hunterstone Apartments | |||||||||||||||||||||||||
16 | Magnolia Marketplace | TJ Maxx | 22,490 | 23.1% | 03/31/2025 | Ross Dress For Less | 22,001 | 22.6% | 1/31/2026 | Michaels | 19,754 | 20.3% | 03/31/2025 | |||||||||||||
17 | Norfolk Commerce Park | URS Federal Services, Inc. | 47,489 | 14.3% | 04/30/2020 | Federal Express Corp. | 42,000 | 12.7% | 05/31/2018 | ITT Education Services, Inc. | 39,828 | 12.0% | 09/30/2018 | |||||||||||||
18 | Summer Bend Apartments | |||||||||||||||||||||||||
19 | Baywoods of Annapolis | |||||||||||||||||||||||||
20 | Rock Hill Hampton Inn | |||||||||||||||||||||||||
21 | Louisville Plaza | King Soopers | 74,865 | 38.5% | 5/20/2017 | Hobby Lobby | 60,000 | 30.9% | 8/31/2018 | Arc Thrift Store | 31,565 | 16.2% | 10/31/2020 | |||||||||||||
22 | Marquis Place | |||||||||||||||||||||||||
23 | Riverside Technology Park A & B | Wells Fargo | 62,418 | 37.7% | 11/30/2019 | Frederick Classical Charter School | 39,120 | 23.6% | 6/30/2021 | AT&T Corp | 12,840 | 7.8% | 2/29/2016 | |||||||||||||
24 | Maricopa Fiesta | Bashas'-Post Petitio | 54,434 | 58.6% | 7/31/2026 | Native Grill | 5,491 | 5.9% | 7/31/2022 | Great Wall Chinese C | 2,730 | 2.9% | 9/30/2019 | |||||||||||||
25 | Dunwoody Place | Publix Super Markets Inc. | 56,763 | 55.1% | 4/30/2020 | YF Dunwoody Inc. | 12,320 | 12.0% | 12/31/2024 | Spring Communications Holding, Inc. | 4,200 | 4.1% | 1/31/2020 | |||||||||||||
26 | Jackson Square Apartments | |||||||||||||||||||||||||
27 | Shops at Doral | Bank of America | 4,515 | 16.2% | 7/1/2028 | Wine and Spirits Emporium | 2,800 | 10.1% | 10/31/2018 | La Fontana D'Orazio, LLC | 2,650 | 9.5% | 2/28/2018 | |||||||||||||
28 | Solano Apartments | |||||||||||||||||||||||||
29 | Riverchase Apartments | |||||||||||||||||||||||||
30 | Old Mills | |||||||||||||||||||||||||
31 | Ozinus Realty Property Portfolio | Various | Various | Various | Various | Various | Various | Various | Various | Various | Various | Various | Various | |||||||||||||
31.01 | Shiloh Crossing | CSA America, Inc. | 29,850 | 41.7% | 12/31/2021 | Select Sport America | 19,800 | 27.6% | 12/31/2017 | Dan Desnet & Associates | 9,950 | 13.9% | 12/31/2018 | |||||||||||||
31.02 | Texas Star | Top Prospects Academy of TX | 13,982 | 17.8% | 01/31/2018 | Empire Precision Machining | 11,969 | 15.3% | 9/30/2017 | NexCourt | 7,089 | 9.0% | 05/31/2015 | |||||||||||||
31.03 | Pitney Bowes | Pitney Bowes Inc. | 71,389 | 77.0% | 06/30/2016 | ProToyz Inc | 21,270 | 23.0% | 05/31/2016 | |||||||||||||||||
31.04 | Towne Crest Village | Staffing Connections, LLC | 3,765 | 18.9% | 04/30/2020 | Dr. Scott Brown Family Dentistry | 3,600 | 18.0% | 09/30/2015 | Dr. Dan Gerhardt | 2,051 | 10.3% | 09/30/2015 | |||||||||||||
31.05 | Eagle Plaza | Dunleavy Investments LLC | 3,420 | 11.5% | 04/30/2016 | Get A Grip Total Fitness, Inc. | 3,056 | 10.3% | 09/30/2015 | Zico Cheng Karate, LLC | 2,964 | 10.0% | 05/31/2018 | |||||||||||||
31.06 | Palmetto | Diamond Glass and Aluminum | 11,954 | 18.9% | 4/30/2017 | Hartshorn Custom Contracting South, LLC | 6,750 | 10.7% | 06/30/2015 | Angel Norniella | 4,560 | 7.2% | 5/30/2016 | |||||||||||||
31.07 | Hamlin | Mass Defense Martial Arts | 6,360 | 12.5% | 08/31/2015 | PCC Automotive Machine Shop | 3,000 | 5.9% | 11/30/2015 | RPM Auto Traders, Inc. | 3,000 | 5.9% | 11/30/2015 | |||||||||||||
32 | Brickyard Square | Epping Cinemas LLC, D/B/A O'Neil Cinemas | 29,577 | 17.0% | 11/30/2037 | Marshalls of MA, Inc. | 23,000 | 13.2% | 3/31/2022 | Michaels Stores Inc. | 16,832 | 9.7% | 2/28/2023 | |||||||||||||
33 | Dos Santos Apartments | |||||||||||||||||||||||||
34 | Villa Bella | |||||||||||||||||||||||||
35 | Bayview Office Building | UAMC, Inc | 41,178 | 43.7% | 7/31/2019 | Clarity Services | 32,603 | 34.6% | 8/31/2019 | Community Care Health Network | 20,363 | 21.6% | 8/31/2017 | |||||||||||||
36 | Casa Nube | |||||||||||||||||||||||||
37 | Homewood Suites - Tallahassee | |||||||||||||||||||||||||
38 | San Mateo Apartments | |||||||||||||||||||||||||
39 | Brittany Bay II | |||||||||||||||||||||||||
40 | Nexus Town Center | Fresenius Medical Center | 11,580 | 20.8% | 12/31/2017 | Fitness 19 | 8,600 | 15.4% | 3/31/2021 | Auto Zone | 4,510 | 8.1% | 2/28/2017 | |||||||||||||
41 | Cathedral Place - Parking | NML | 438 | 46.5% | 5/31/2018 | WHD | 217 | 23.1% | MTM | EDI | 123 | 13.1% | MTM | |||||||||||||
42 | Indiana Village | |||||||||||||||||||||||||
43 | Fahrens Park Plaza | Merced County CPS | 21,325 | 24.3% | 2/1/2017 | ASPIRAnet | 12,000 | 13.7% | 6/1/2019 | Fitness Evolution | 10,680 | 12.2% | 2/1/2020 | |||||||||||||
44 | Causeway Corporate Centre | Fraser Yachts Florida, Inc. | 11,921 | 25.9% | 7/31/2021 | Vitas Healthcare Corp of FL | 8,652 | 18.8% | 6/30/2016 | Marsh USA, Inc. | 4,197 | 9.1% | 1/31/2016 | |||||||||||||
45 | TownePlace Suites St. George by Marriott | |||||||||||||||||||||||||
46 | IRG - Ellsworth Bailey Saratoga | Various | Various | Various | Various | Various | Various | Various | Various | Various | Various | Various | Various | |||||||||||||
46.01 | Saratoga II | Saint-Gobain Ceramics | 102,000 | 100.0% | 12/31/2025 | |||||||||||||||||||||
46.02 | Saratoga I | A.R.M. OPCO, Inc. | 82,877 | 100.0% | 4/30/2022 | |||||||||||||||||||||
46.03 | Ellsworth Bailey Lordstown | Mellace Family Brands | 44,594 | 46.2% | 6/30/2017 | Hanes Companies, Inc. | 36,128 | 37.5% | 12/31/2017 | ThyssenKrupp Materials NA, Inc | 15,722 | 16.3% | 12/3/2020 | |||||||||||||
47 | 39-60 54th Street Owners, Inc. | |||||||||||||||||||||||||
48 | Courtyard by Marriott - Shawnee | |||||||||||||||||||||||||
49 | Athens Gate Apartments | |||||||||||||||||||||||||
50 | Sand Pebble Apartments | |||||||||||||||||||||||||
51 | Trojan Storage of Oxnard | |||||||||||||||||||||||||
52 | CVS - Lynn, MA | CVS | 12,900 | 100.0% | 1/31/2040 | |||||||||||||||||||||
53 | Gilbert Crossing | The Burgundy Group, LLC | 25,067 | 40.1% | 7/31/2018 | Meridian Bank | 5,114 | 8.2% | 2/28/2016 | Tots Unlimited Daycare & Preschool | 4,774 | 7.6% | 6/30/2017 | |||||||||||||
54 | 1321 Harbor Bay Parkway | Penumbra | 50,177 | 100.0% | 11/30/2029 | |||||||||||||||||||||
55 | Casa Cruz | |||||||||||||||||||||||||
56 | Best Western Plus - Windsor Gardens | |||||||||||||||||||||||||
57 | Oak Tree Plaza | Alamo Smiles | 2,922 | 17.7% | 1/23/2024 | Salon Prive | 2,020 | 12.2% | 11/30/2015 | UPS Store | 1,380 | 8.3% | 7/31/2021 | |||||||||||||
58 | Peppertree Lane Apartments | |||||||||||||||||||||||||
59 | 8211 Town Center Drive | Mariner Finance, LLC | 69,401 | 100.0% | 6/30/2026 | |||||||||||||||||||||
60 | Staybridge Suites Indianapolis Airport | |||||||||||||||||||||||||
61 | Austin Heights Shopping Center | Goodwill Industries | 16,560 | 27.6% | 11/30/2019 | Anna's Linens | 12,507 | 20.9% | 1/31/2019 | Bamboo Asian Buffet | 10,990 | 18.3% | 10/31/2019 | |||||||||||||
62 | Walgreens - Duncanville, TX | Walgreens | 14,490 | 100.0% | 10/31/2089 | |||||||||||||||||||||
63 | Trojan Storage of Roseville | |||||||||||||||||||||||||
64 | Lakeside Plaza | Schnucks | 58,076 | 45.5% | 4/30/2021 | Sears | 21,000 | 16.4% | 12/31/2016 | Club Fitness | 14,400 | 11.3% | 9/1/2018 | |||||||||||||
65 | Green Acres MHP | |||||||||||||||||||||||||
66 | Mendicino Green Apartment Corp. | |||||||||||||||||||||||||
67 | Walgreens - Richmond Heights | Walgreens | 13,216 | 100.0% | 6/30/2079 | |||||||||||||||||||||
68 | Rivertown Center | Planet Fitness | 24,108 | 39.6% | 12/31/2024 | Hallmark | 6,875 | 11.3% | 2/28/2017 | Platos Closet | 4,000 | 6.6% | 3/31/2020 | |||||||||||||
69 | Bristol House, Inc. | |||||||||||||||||||||||||
70 | Storaway Self Storage - Nashville | |||||||||||||||||||||||||
71 | Bella Luna / San Lucas | |||||||||||||||||||||||||
72 | Seacoast Self Storage | |||||||||||||||||||||||||
73 | 230 Garth Road Owners, Inc. | |||||||||||||||||||||||||
74 | Comfort Suites - Near the Galleria | |||||||||||||||||||||||||
75 | Sandstone Apartments | |||||||||||||||||||||||||
76 | Tieton Village | Jo-Ann Stores, Inc. | 22,500 | 36.7% | 1/31/2023 | Tacoma Goodwill Industries | 15,000 | 24.5% | 4/17/2017 | Hometown Ace Hardware | 14,040 | 22.9% | 11/14/2024 | |||||||||||||
77 | Highland Terrace Housing Development Fund Corporation | |||||||||||||||||||||||||
78 | Cooperstown Commons Shopping Center | Tops PT, LLC | 32,475 | 58.5% | 12/31/2024 | Family Dollar | 7,000 | 12.6% | 12/31/2018 | First Community Care of Bassett | 4,070 | 7.3% | 12/31/2018 | |||||||||||||
79 | Lake Lucina Shopping Center | Save-A-Lot | 17,761 | 32.3% | 2/28/2018 | Family Dollar | 7,100 | 12.9% | 6/30/2018 | AutoZone | 5,850 | 10.6% | 10/31/2019 | |||||||||||||
80 | Silver Bridge Plaza | Tractor Supply | 35,868 | 27.1% | 9/30/2023 | Big Lots | 27,104 | 20.5% | 1/31/2019 | Goodwill Industries | 14,000 | 10.6% | 6/30/2015 | |||||||||||||
81 | Karen Gardens Apartment Corp. | |||||||||||||||||||||||||
82 | East Haven Self Storage | |||||||||||||||||||||||||
83 | Walgreens - Milwaukee | Walgreens | 14,490 | 100.0% | 5/31/2079 |
A-1-13 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Mortgage Loan Number | Property Name | Largest Tenant Name(6)(7)(8) | Largest Tenant Sq. Ft. | Largest Tenant % of NRA | Largest Tenant Exp. Date | 2nd Largest Tenant Name(2)(6)(7)(9)(10) | 2nd Largest Tenant Sq. Ft. | 2nd Largest Tenant % of NRA | 2nd Largest Tenant Exp. Date | 3rd Largest Tenant Name(6)(7)(10) | 3rd Largest Tenant Sq. Ft. | 3rd Largest Tenant % of NRA | 3rd Largest Tenant Exp. Date | |||||||||||||
84 | Haggen Food & Pharmacy | Haggen OpCo North, LLC | 42,630 | 100.0% | 2/28/2040 | |||||||||||||||||||||
85 | Sycamore Terrace | Pacific Dental Services | 3,039 | 28.8% | 11/26/2016 | Panda Express, Inc. | 2,448 | 23.2% | 9/30/2026 | Brandon Watts, Travis Watts, & Ryan Watts DBA: Submarina | 1,215 | 11.5% | 12/31/2016 | |||||||||||||
86 | Ramona Plaza Shopping Center | Elam's Hallmark | 3,620 | 16.7% | 1/31/2020 | Nuevo Grill & Cantina | 2,720 | 12.6% | 8/31/2020 | Amici Pizza & Pasta | 2,700 | 12.5% | 5/31/2018 | |||||||||||||
87 | All A/C Self Storage | |||||||||||||||||||||||||
88 | Pecue MHC | |||||||||||||||||||||||||
89 | Regency Park Owners Corp. | |||||||||||||||||||||||||
90 | Storaway Self Storage - Deltona II | |||||||||||||||||||||||||
91 | Lakewood Place Shopping Center | 16 Bit | 3,461 | 26.6% | 10/31/2019 | Avalon | 1,900 | 14.6% | 12/31/2018 | Mobile | 1,826 | 14.1% | 4/30/2021 | |||||||||||||
92 | Hacienda Heights Apartments | |||||||||||||||||||||||||
93 | Nagle House, Inc. | |||||||||||||||||||||||||
94 | Walgreens - Warrensburg, MO | Walgreens | 14,490 | 100.0% | 9/30/2079 | |||||||||||||||||||||
95 | 230 Tenants Corporation | |||||||||||||||||||||||||
96 | Shackelford Center | Schnuck Markets, Inc. | 45,960 | 92.6% | 3/2/2022 | Nephew's Grille | 800 | 1.6% | 6/30/2017 | Edward D. Jones & Co | 800 | 1.6% | 9/30/2017 | |||||||||||||
97 | De La Cruz Professional Center | Max'D Out Fitness | 11,400 | 40.7% | 12/31/2018 | Lee County Tax Collector | 8,180 | 29.2% | 12/31/2016 | Beef O'Brady's | 3,600 | 12.9% | 5/31/2019 | |||||||||||||
98 | Folcroft Self Storage | |||||||||||||||||||||||||
99 | Storaway Self Storage - Palm Bay | |||||||||||||||||||||||||
100 | Bowen Tower Apartments | |||||||||||||||||||||||||
101 | 321 West 90th St. Owners Corp. | |||||||||||||||||||||||||
102 | West Friendship Shopping Center | Dunkin Donuts | 2,200 | 11.7% | 10/31/2029 | Dr. Thomas Sullivan | 2,200 | 11.7% | 10/31/2016 | Friendship Liquors | 2,200 | 11.7% | 8/31/2022 | |||||||||||||
103 | Crestview Self Storage | |||||||||||||||||||||||||
104 | Denn Owners Corporation | |||||||||||||||||||||||||
105 | Moundsville Plaza | Busy Beaver | 35,090 | 33.3% | 8/31/2019 | Goodwill | 22,800 | 21.6% | 8/31/2016 | Save-A-Lot Foods | 20,146 | 19.1% | 2/28/2018 | |||||||||||||
106 | Storaway Self Storage- Deltona I | |||||||||||||||||||||||||
107 | Sedona Peak Apartments | |||||||||||||||||||||||||
108 | Sea Breeze Town Houses Owners, Inc. | |||||||||||||||||||||||||
109 | Willow Lake Shops | Hancock Fabrics | 11,964 | 49.2% | 7/31/2020 | Mattress Firm | 8,131 | 33.5% | 6/30/2021 | Southern Flair | 1,400 | 5.8% | 1/31/2017 | |||||||||||||
110 | Wickham Park Commons | BugandBoo LLC | 3,000 | 19.7% | 8/8/2018 | Purecigs, LLC | 1,875 | 12.3% | 2/28/2019 | Starbucks Corporation | 1,838 | 12.1% | 7/31/2018 | |||||||||||||
111 | Crown Pointe Plaza | La Michoacana Meat Market | 12,260 | 37.4% | 7/31/2017 | Cecil Whittaker's Pizzeria | 3,000 | 9.1% | 5/30/2020 | The Frost National Bank | 2,771 | 8.5% | 12/31/2016 | |||||||||||||
112 | Hartsdale Executive House, Inc. | |||||||||||||||||||||||||
113 | 25 Chapel Corp. | |||||||||||||||||||||||||
114 | Market Place Village | HN Real Estate Group | 5,411 | 37.1% | 10/31/2017 | Sears Home Appliance Showroom | 4,993 | 34.2% | 10/31/2018 | LabCorp | 1,515 | 10.4% | 1/28/2019 | |||||||||||||
115 | Kingstowne Shops | IHOP | 4,640 | 19.9% | 9/30/2017 | Anand Bazaar | 4,018 | 17.2% | 1/31/2019 | John Scarborough, Inc. | 2,748 | 11.8% | 11/30/2015 | |||||||||||||
116 | 109-111 N. Broadway Apt. Corp. | |||||||||||||||||||||||||
117 | 40 Prospect Park West Owners Corp. | |||||||||||||||||||||||||
118 | Shops of Orland Park | Bloomfield Florist Inc. | 4,480 | 28.2% | 2/28/2017 | Rocco Vino's | 4,000 | 25.2% | 3/31/2020 | Lord & Hunt Jewelers | 1,633 | 10.3% | 7/31/2017 | |||||||||||||
119 | Victorville Retail Center | Dept. of the Army | 5,675 | 48.9% | 1/29/2019 | Sprint Spectrum, LP | 2,500 | 21.5% | 6/30/2020 | GameStop Inc. | 1,440 | 12.4% | 2/28/2018 | |||||||||||||
120 | 6 West 20th St. Tenants Corp. | |||||||||||||||||||||||||
121 | 50-22 Owners Ltd. | |||||||||||||||||||||||||
122 | 585 McLean Owners, Inc. | |||||||||||||||||||||||||
123 | 12 West 17th St. Tenants' Corp. | |||||||||||||||||||||||||
124 | Gillespie Field Business Park | ThyssenKrup Elevator | 9,001 | 51.2% | 6/30/2020 | Business Printing Co | 4,448 | 25.3% | 12/31/2021 | Woman's Health & Rehab | 4,131 | 23.5% | 5/14/2017 | |||||||||||||
125 | Waters at West End, Inc. | |||||||||||||||||||||||||
126 | Jones St. Owners Corporation | |||||||||||||||||||||||||
127 | Big Lots Plaza | Big Lots | 30,934 | 85.0% | 1/31/2019 | Fuji Sushi and Hibachi | 2,000 | 5.5% | 4/30/2024 | Pipe Dreams | 1,200 | 3.3% | 7/31/2018 | |||||||||||||
128 | 30 Bond Street Owners Corp. | |||||||||||||||||||||||||
129 | 166 West 76th Apartment Corp. | |||||||||||||||||||||||||
130 | Hanna Shoppes | China Buffet | 5,200 | 32.2% | 1/15/2020 | Laundry Bright | 3,168 | 19.6% | 11/30/2021 | Papa Johns | 1,625 | 10.1% | 4/30/2016 | |||||||||||||
131 | Carroll Gardens Owners, Corp. | |||||||||||||||||||||||||
132 | 170 East 92nd Street Owners, Inc. | |||||||||||||||||||||||||
133 | 17 Warren Street Tenants Corporation |
A-1-14 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Mortgage Loan Number | Property Name | 4th Largest Tenant Name(6)(7) | 4th Largest Tenant Sq. Ft. | 4th Largest Tenant % of NRA | 4th Largest Tenant Exp. Date | 5th Largest Tenant Name(2)(6)(7)(9) | 5th Largest Tenant Sq. Ft. | 5th Largest Tenant % of NRA | 5th Largest Tenant Exp. Date | Engineering Report Date | Environmental Report Date (Phase I) | Environmental Report Date (Phase II) | Seismic Report Date | Seismic PML % | ||||||||||||||
1 | Hutchinson Metro Center I | Visiting Nurse Service of NY | 55,859 | 13.2% | 11/30/2015 | Internal Revenue Service | 22,270 | 5.3% | 1/25/2016 | 4/2/2015 | 1/3/1900 | |||||||||||||||||
2 | Cathedral Place | First Merit Bank | 9,010 | 4.1% | 11/14/2024 | BW Holdings (d/b/a Wards) | 6,528 | 3.0% | 2/28/2018 | 01/09/2015 | 1/23/2015 | |||||||||||||||||
3 | 150 Royall Street | 2/25/2015 | 2/25/2015 | |||||||||||||||||||||||||
4 | WPC Self Storage Portfolio VII | Various | Various | |||||||||||||||||||||||||
4.01 | Extra Space Louisville KY | 3/17/2015 | 3/18/2015 | |||||||||||||||||||||||||
4.02 | Extra Space Las Vegas NV | 4/3/2015 | 4/3/2015 | |||||||||||||||||||||||||
4.03 | CubeSmart Joan Panama City Beach FL | 5/7/2015 | 5/13/2015 | |||||||||||||||||||||||||
4.04 | CubeSmart Tallahassee FL | 1/26/2015 | 1/14/2015 | |||||||||||||||||||||||||
4.05 | Extra Space Lady Lake FL | 1/5/2015 | 12/31/2014 | |||||||||||||||||||||||||
4.06 | CubeSmart Crystal Lake IL | 4/2/2015 | 4/17/2015 | |||||||||||||||||||||||||
4.07 | CubeSmart Hutchinson Panama City Beach FL | 2/4/2015 | 2/10/2015 | |||||||||||||||||||||||||
4.08 | Extra Space Lilburn GA | 3/6/2015 | 3/6/2015 | |||||||||||||||||||||||||
4.09 | Extra Space Stockbridge GA | 3/6/2015 | 3/6/2015 | |||||||||||||||||||||||||
5 | Queens’ MarketPlace | Quiksilver | 4,392 | 3.4% | 4/30/2021 | Pacific Sunwear | 4,000 | 3.1% | 4/30/2018 | 4/3/2015 | 4/3/2015 | 4/4/2015 | 6.0% | |||||||||||||||
6 | El Sol Brillante and Laguna Del Sol Apartments | Various | 4/20/2015 | |||||||||||||||||||||||||
6.01 | Laguna Del Sol Apartments | 4/16/2015 | 4/20/2015 | |||||||||||||||||||||||||
6.02 | El Sol Brillante Apartments | 4/14/2015 | 4/20/2015 | |||||||||||||||||||||||||
7 | Country Club Center | Trade Street Residential | 5,845 | 9.0% | 7/31/2016 | Trafalgar Capital Advisors | 5,065 | 7.8% | 1/31/2017 | 3/26/2015 | 3/27/2015 | �� | ||||||||||||||||
8 | Parkway Crossing East Shopping Center | Office Depot | 18,000 | 12.6% | 10/31/2019 | Thomasville Furniture | 10,403 | 7.3% | 3/31/2017 | 2/25/2015 | 2/24/2015 | |||||||||||||||||
9 | Olmsted Plaza Shopping Center | Harbor Freight and Tools | 16,000 | 6.3% | 10/31/2023 | Cort Furniture Rental | 10,737 | 4.2% | 1/31/2016 | 2/18/2015 | 2/19/2015 | |||||||||||||||||
10 | Hall Office Park | Subaru of America | 7,441 | 5.2% | 10/31/2018 | Harness Dickey | 6,891 | 4.8% | 4/30/2018 | 4/7/2015 | 4/8/2015 | |||||||||||||||||
11 | Dulles North Corporate Parks | Various | Various | Various | Various | Various | Various | Various | Various | 3/27/2015 | 3/27/2015 | |||||||||||||||||
11.01 | Dulles North Corporate Park 5 | 3/27/2015 | 3/27/2015 | |||||||||||||||||||||||||
11.02 | Dulles North Corporate Park 2 | PaeTec Communications | 10,079 | 12.7% | 5/31/2019 | MCI Metro Access Trans | 80 | 0.1% | 11/30/2019 | 3/27/2015 | 3/27/2015 | |||||||||||||||||
12 | Coastal Village Apartments | 1/13/2015 | 1/13/2015 | |||||||||||||||||||||||||
13 | Foothills Park Place | Native New Yorker | 6,498 | 4.9% | 1/31/2023 | Foothills Car Wash | 6,036 | 4.6% | 5/31/2023 | 3/6/2015 | 4/2/2015 | |||||||||||||||||
14 | Smiths Medical | 3/18/2015 | 11/21/2014 | |||||||||||||||||||||||||
15 | Hunterstone Apartments | 4/14/2015 | 4/14/2015 | |||||||||||||||||||||||||
16 | Magnolia Marketplace | PetSmart | 12,507 | 12.9% | 03/31/2025 | Shoe Carnival | 11,414 | 11.7% | 05/31/2025 | 03/25/2015 | 3/31/2015 | |||||||||||||||||
17 | Norfolk Commerce Park | Alion | 23,153 | 7.0% | 09/30/2019 | G.E. Power Systems | 20,315 | 6.1% | 09/30/2018 | 03/20/2015 | 4/20/2015 | |||||||||||||||||
18 | Summer Bend Apartments | 4/22/2015 | 4/23/2015 | |||||||||||||||||||||||||
19 | Baywoods of Annapolis | 5/20/2015 | 5/20/2015 | |||||||||||||||||||||||||
20 | Rock Hill Hampton Inn | 4/28/2015 | 4/28/2015 | |||||||||||||||||||||||||
21 | Louisville Plaza | Brass Monkey Inc | 3,600 | 1.9% | 12/20/2020 | Birds of Prey Foundation | 3,150 | 1.6% | 1/31/2016 | 2/25/2015 | 2/26/2015 | |||||||||||||||||
22 | Marquis Place | 1/26/2015 | 1/26/2015 | |||||||||||||||||||||||||
23 | Riverside Technology Park A & B | UTZ | 12,000 | 7.3% | 4/30/2023 | O Connor Plumbing & Heating | 9,300 | 5.6% | 7/31/2020 | 4/9/2015 | 4/9/2015 | |||||||||||||||||
24 | Maricopa Fiesta | Orbitel Communication | 2,091 | 2.2% | 1/31/2016 | Nationwide Vision | 2,037 | 2.2% | 6/30/2018 | 1/9/2015 | 1/9/2015 | |||||||||||||||||
25 | Dunwoody Place | Aladdin Restaurant of Roswell LLC | 3,120 | 3.0% | 8/31/2017 | Circle T Inc. | 2,520 | 2.4% | 8/31/2017 | 3/5/2015 | 3/5/2015 | |||||||||||||||||
26 | Jackson Square Apartments | 4/28/2015 | 4/30/2015 | |||||||||||||||||||||||||
27 | Shops at Doral | Savilia Enterprises, LLC | 1,537 | 5.5% | 10/31/2021 | Shawarma Mediterranean Grill, LLC | 1,400 | 5.0% | 3/31/2016 | 4/7/2015 | 4/7/2015 | |||||||||||||||||
28 | Solano Apartments | 5/8/2015 | 5/8/2015 | |||||||||||||||||||||||||
29 | Riverchase Apartments | 3/31/2015 | 3/31/2015 | |||||||||||||||||||||||||
30 | Old Mills | 2/11/2015 | 2/11/2015 | |||||||||||||||||||||||||
31 | Ozinus Realty Property Portfolio | Various | Various | Various | Various | Various | Various | Various | Various | Various | Various | |||||||||||||||||
31.01 | Shiloh Crossing | Irvine Access Floors | 7,960 | 11.1% | 12/31/2017 | InSciTech, Inc. | 4,080 | 5.7% | 5/1/2018 | 03/11/2015 | 04/15/2015 | |||||||||||||||||
31.02 | Texas Star | Zink Autohaus SP | 5,748 | 7.3% | 09/30/2017 | Fair Way Landscaping | 5,123 | 6.5% | 02/28/2017 | 03/11/2015 | 04/15/2015 | |||||||||||||||||
31.03 | Pitney Bowes | 03/11/2015 | 05/04/2015 | |||||||||||||||||||||||||
31.04 | Towne Crest Village | US Government Recruiting Offices | 2,000 | 10.0% | 07/31/2019 | Weight Loss Enterprices Inc. | 1,624 | 8.1% | 03/31/2020 | 04/09/2015 | 04/09/2015 | |||||||||||||||||
31.05 | Eagle Plaza | Grow Life Church, Inc | 2,537 | 8.5% | 01/31/2016 | Dance Arts Center | 2,280 | 7.7% | 12/31/2015 | 03/11/2015 | 04/15/2015 | |||||||||||||||||
31.06 | Palmetto | Cutting Edge Boat Tops | 4,560 | 7.2% | 04/30/2016 | Nasus Global Trade & Investment Inc. | 4,560 | 7.2% | 06/30/2016 | 03/11/2015 | 04/24/2015 | |||||||||||||||||
31.07 | Hamlin | ACG Installations, Inc | 3,000 | 5.9% | 12/31/2015 | Absolute Water Inc | 3,000 | 5.9% | 04/30/2016 | 03/11/2015 | 04/15/2015 | |||||||||||||||||
32 | Brickyard Square | Petsmart, Inc. | 12,712 | 7.3% | 6/30/2022 | The New Hampshire Liquor Commission | 12,000 | 6.9% | 12/1/2025 | 9/17/2014 | 9/18/2014 | |||||||||||||||||
33 | Dos Santos Apartments | 5/6/2015 | 5/6/2015 | |||||||||||||||||||||||||
34 | Villa Bella | 3/30/2015 | 3/31/2015 | |||||||||||||||||||||||||
35 | Bayview Office Building | 3/12/2015 | 3/12/2015 | |||||||||||||||||||||||||
36 | Casa Nube | 3/30/2015 | 3/31/2015 | |||||||||||||||||||||||||
37 | Homewood Suites - Tallahassee | 3/9/2015 | 3/9/2015 | |||||||||||||||||||||||||
38 | San Mateo Apartments | 5/6/2015 | 5/6/2015 | |||||||||||||||||||||||||
39 | Brittany Bay II | 03/09/2015 | 4/16/2015 | |||||||||||||||||||||||||
40 | Nexus Town Center | La Sierra Veterinary | 3,944 | 7.1% | 6/30/2019 | Sally Beauty | 3,200 | 5.7% | 2/28/2019 | 3/2/2015 | 3/3/2015 | 3/24/2015 | 3/2/2015 | 11.0% | ||||||||||||||
41 | Cathedral Place - Parking | Deloitte | 71 | 7.5% | MTM | First Merit | 14 | 1.5% | MTM | 01/09/2015 | 1/23/2015 | |||||||||||||||||
42 | Indiana Village | 2/13/2015 | 2/13/2015 | |||||||||||||||||||||||||
43 | Fahrens Park Plaza | Satellite Healthcare | 9,600 | 10.9% | 11/1/2019 | Merced County HSA | 7,247 | 8.3% | 4/1/2018 | 4/1/2015 | 3/26/2015 | 3/26/2015 | 5.0% | |||||||||||||||
44 | Causeway Corporate Centre | Global Marine Travel, LLC | 3,686 | 8.0% | 11/30/2016 | Deerpath Capital Managmnt LP | 2,875 | 6.2% | 12/31/2017 | 2/13/2015 | 2/16/2015 | |||||||||||||||||
45 | TownePlace Suites St. George by Marriott | 3/30/2015 | 1/30/2015 | |||||||||||||||||||||||||
46 | IRG - Ellsworth Bailey Saratoga | 3/6/2015 | Various | |||||||||||||||||||||||||
46.01 | Saratoga II | 3/6/2015 | 5/21/2015 | |||||||||||||||||||||||||
46.02 | Saratoga I | 3/6/2015 | 5/21/2015 | |||||||||||||||||||||||||
46.03 | Ellsworth Bailey Lordstown | 3/6/2015 | 3/1/2015 | |||||||||||||||||||||||||
47 | 39-60 54th Street Owners, Inc. | 4/20/2015 | 4/20/2015 | |||||||||||||||||||||||||
48 | Courtyard by Marriott - Shawnee | 2/10/2015 | 2/10/2015 | |||||||||||||||||||||||||
49 | Athens Gate Apartments | 5/6/2015 | 5/7/2015 | |||||||||||||||||||||||||
50 | Sand Pebble Apartments | 5/7/2015 | 5/6/2015 | |||||||||||||||||||||||||
51 | Trojan Storage of Oxnard | 4/7/2015 | 4/7/2015 | 4/7/2015 | 17.0% | |||||||||||||||||||||||
52 | CVS - Lynn, MA | 4/9/2015 | 4/9/2015 | |||||||||||||||||||||||||
53 | Gilbert Crossing | Global Bikes | 4,082 | 6.5% | 1/31/2018 | Desert Massage Gilbert Crossing, Inc. | 3,818 | 6.1% | 7/31/2015 | 3/12/2015 | 3/12/2015 | |||||||||||||||||
54 | 1321 Harbor Bay Parkway | 10/23/2014 | 10/23/2014 | 10/23/2014 | 19.0% | |||||||||||||||||||||||
55 | Casa Cruz | 3/26/2015 | 3/25/2015 | |||||||||||||||||||||||||
56 | Best Western Plus - Windsor Gardens | 3/23/2015 | 3/23/2015 | |||||||||||||||||||||||||
57 | Oak Tree Plaza | Papa Murphy’s | 1,339 | 8.1% | 12/11/2016 | Tans Plus | 1,321 | 8.0% | 8/27/2018 | 3/4/2014 | 3/4/2015 | 3/2/2015 | 8.0% | |||||||||||||||
58 | Peppertree Lane Apartments | 04/08/2015 | 4/8/2015 | |||||||||||||||||||||||||
59 | 8211 Town Center Drive | 11/20/2014 | 11/19/2014 | |||||||||||||||||||||||||
60 | Staybridge Suites Indianapolis Airport | 3/6/2015 | 3/6/2015 | |||||||||||||||||||||||||
61 | Austin Heights Shopping Center | Advance Auto Stores | 7,000 | 11.7% | 4/30/2019 | Western Finance | 2,000 | 3.3% | 1/31/2020 | 2/17/2015 | 2/11/2015 | |||||||||||||||||
62 | Walgreens - Duncanville, TX | 3/30/2015 | 3/30/2015 | |||||||||||||||||||||||||
63 | Trojan Storage of Roseville | 4/7/2015 | 4/7/2015 | 4/7/2015 | 2.0% | |||||||||||||||||||||||
64 | Lakeside Plaza | Magic Nails | 2,100 | 1.6% | 8/31/2019 | Memorial Medical | 1,965 | 1.5% | 12/31/2015 | 3/27/2015 | 4/2/2015 | |||||||||||||||||
65 | Green Acres MHP | 4/22/2015 | 2/4/2015 | |||||||||||||||||||||||||
66 | Mendicino Green Apartment Corp. | 3/25/2015 | 3/27/2015 | |||||||||||||||||||||||||
67 | Walgreens - Richmond Heights | 2/26/2015 | 2/26/2015 | |||||||||||||||||||||||||
68 | Rivertown Center | Chicago Title & Trust | 2,848 | 4.7% | 7/31/2020 | Noodles & Company | 2,735 | 4.5% | 12/31/2018 | 4/8/2015 | 2/17/2015 | |||||||||||||||||
69 | Bristol House, Inc. | 4/7/2015 | 4/7/2015 | |||||||||||||||||||||||||
70 | Storaway Self Storage - Nashville | 4/10/2015 | 4/10/2015 | |||||||||||||||||||||||||
71 | Bella Luna / San Lucas | 9/26/2014 | 9/26/2014 | |||||||||||||||||||||||||
72 | Seacoast Self Storage | 3/18/2015 | 3/18/2015 | |||||||||||||||||||||||||
73 | 230 Garth Road Owners, Inc. | 3/17/2015 | 3/12/2015 | |||||||||||||||||||||||||
74 | Comfort Suites - Near the Galleria | 1/30/2015 | 1/30/2015 | |||||||||||||||||||||||||
75 | Sandstone Apartments | 3/31/2015 | 3/31/2015 | |||||||||||||||||||||||||
76 | Tieton Village | Tieton Village Drugs | 9,685 | 15.8% | 11/30/2020 | 4/22/2015 | 1/22/2015 | |||||||||||||||||||||
77 | Highland Terrace Housing Development Fund Corporation | 3/4/2015 | 3/4/2015 | |||||||||||||||||||||||||
78 | Cooperstown Commons Shopping Center | NBT Bank | 2,400 | 4.3% | 6/30/2018 | Subway | 1,573 | 2.8% | 9/30/2016 | 2/23/2015 | 2/20/2015 | |||||||||||||||||
79 | Lake Lucina Shopping Center | Y & Y Beauty Supply, Inc. | 4,050 | 7.4% | 11/30/2019 | Andalous, LLC | 2,600 | 4.7% | 2/28/2018 | 11/21/2014 | 11/21/2014 | |||||||||||||||||
80 | Silver Bridge Plaza | Family Dollar | 7,874 | 6.0% | 12/31/2018 | Countryside Rentals | 6,750 | 5.1% | 9/30/2019 | 1/29/2015 | 1/26/2015 | |||||||||||||||||
81 | Karen Gardens Apartment Corp. | 3/25/2015 | 3/18/2015 | |||||||||||||||||||||||||
82 | East Haven Self Storage | 3/24/2015 | 3/24/2015 | |||||||||||||||||||||||||
83 | Walgreens - Milwaukee | 3/4/2015 | 3/6/2015 |
A-1-15 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Mortgage Loan Number | Property Name | 4th Largest Tenant Name(6)(7) | 4th Largest Tenant Sq. Ft. | 4th Largest Tenant % of NRA | 4th Largest Tenant Exp. Date | 5th Largest Tenant Name(2)(6)(7)(9) | 5th Largest Tenant Sq. Ft. | 5th Largest Tenant % of NRA | 5th Largest Tenant Exp. Date | Engineering Report Date | Environmental Report Date (Phase I) | Environmental Report Date (Phase II) | Seismic Report Date | Seismic PML % | ||||||||||||||
84 | Haggen Food & Pharmacy | 4/24/2015 | 4/24/2015 | |||||||||||||||||||||||||
85 | Sycamore Terrace | Alvaro Lua Valencia DBA: Chitos Taco Shop | 1,215 | 11.5% | 3/14/2016 | Fred Loya Insurance Agency | 898 | 8.5% | 10/31/2019 | 4/13/2015 | 10/28/2014 | 4/13/2015 | 6.0% | |||||||||||||||
86 | Ramona Plaza Shopping Center | Laboratory Corp of America | 1,220 | 5.6% | 5/4/2017 | Cold Stone Creamery | 1,200 | 5.5% | MTM | 4/23/2015 | 4/23/2015 | 4/23/2015 | 6.0% | |||||||||||||||
87 | All A/C Self Storage | 3/24/2015 | 3/25/2015 | |||||||||||||||||||||||||
88 | Pecue MHC | 4/15/2015 | 3/9/2015 | |||||||||||||||||||||||||
89 | Regency Park Owners Corp. | 4/24/2015 | 4/15/2015 | |||||||||||||||||||||||||
90 | Storaway Self Storage - Deltona II | 4/10/2015 | 4/10/2015 | |||||||||||||||||||||||||
91 | Lakewood Place Shopping Center | Yogurt | 1,800 | 13.9% | 8/31/2021 | Cerny | 1,682 | 12.9% | 4/30/2019 | 4/21/2015 | 4/21/2015 | |||||||||||||||||
92 | Hacienda Heights Apartments | 5/4/2015 | 5/4/2015 | 5/4/2015 | 9.0% | |||||||||||||||||||||||
93 | Nagle House, Inc. | 4/30/2014 | 4/30/2014 | |||||||||||||||||||||||||
94 | Walgreens - Warrensburg, MO | 1/26/2015 | 1/26/2015 | |||||||||||||||||||||||||
95 | 230 Tenants Corporation | 4/30/2015 | 4/27/2015 | |||||||||||||||||||||||||
96 | Shackelford Center | Via For Hair | 800 | 1.6% | 9/30/2019 | 3/24/2015 | 12/10/2014 | |||||||||||||||||||||
97 | De La Cruz Professional Center | Luxxor | 2,400 | 8.6% | 1/31/2018 | Schuman Insurance | 1,200 | 4.3% | 1/31/2018 | 5/6/2015 | 2/9/2015 | |||||||||||||||||
98 | Folcroft Self Storage | 3/31/2015 | 3/23/2015 | |||||||||||||||||||||||||
99 | Storaway Self Storage - Palm Bay | 4/13/2015 | 4/13/2015 | |||||||||||||||||||||||||
100 | Bowen Tower Apartments | 12/4/2014 | 12/4/2014 | |||||||||||||||||||||||||
101 | 321 West 90th St. Owners Corp. | 2/25/2015 | 2/25/2015 | |||||||||||||||||||||||||
102 | West Friendship Shopping Center | High’s | 2,067 | 11.0% | 1/31/2021 | Tony & Mona Gharfeh | 1,500 | 8.0% | 11/30/2016 | 2/4/2015 | 2/4/2015 | 12/22/2014 | ||||||||||||||||
103 | Crestview Self Storage | 3/31/2015 | 4/14/2015 | |||||||||||||||||||||||||
104 | Denn Owners Corporation | 12/12/2014 | 12/10/2014 | |||||||||||||||||||||||||
105 | Moundsville Plaza | Dollar Tree Stores | 17,955 | 17.0% | 5/31/2019 | Mattress Warehouse | 6,960 | 6.6% | 5/31/2018 | 3/4/2015 | 1/28/2015 | |||||||||||||||||
106 | Storaway Self Storage- Deltona I | 4/10/2015 | 4/10/2015 | |||||||||||||||||||||||||
107 | Sedona Peak Apartments | 5/6/2015 | 5/8/2015 | |||||||||||||||||||||||||
108 | Sea Breeze Town Houses Owners, Inc. | 4/8/2015 | 4/7/2015 | |||||||||||||||||||||||||
109 | Willow Lake Shops | USA Nails | 1,400 | 5.8% | 4/30/2016 | Sports Clips | 1,400 | 5.8% | 5/1/2018 | 1/15/2015 | 1/15/2015 | |||||||||||||||||
110 | Wickham Park Commons | Tech Nation Repairs LLC | 1,520 | 10.0% | 5/31/2020 | NDLB Tax Service, LLC | 1,500 | 9.9% | 3/31/2016 | 4/9/2015 | 4/9/2015 | |||||||||||||||||
111 | Crown Pointe Plaza | Pueblo de Dios Iglesia Christiana | 2,580 | 7.9% | 1/31/2016 | Iglesia Odres Nuevos | 2,500 | 7.6% | 5/31/2017 | 1/13/2015 | 1/7/2015 | |||||||||||||||||
112 | Hartsdale Executive House, Inc. | 3/5/2015 | 3/5/2015 | |||||||||||||||||||||||||
113 | 25 Chapel Corp. | 4/10/2015 | 4/6/2015 | |||||||||||||||||||||||||
114 | Market Place Village | Edward Jones | 1,425 | 9.8% | 6/30/2017 | 1/13/2015 | 1/13/2015 | |||||||||||||||||||||
115 | Kingstowne Shops | DC Gyros and Subs | 1,680 | 7.2% | 11/30/2016 | Africa Hair | 1,600 | 6.9% | 5/31/2015 | 3/12/2015 | 3/12/2015 | |||||||||||||||||
116 | 109-111 N. Broadway Apt. Corp. | 1/27/2015 | 1/29/2015 | |||||||||||||||||||||||||
117 | 40 Prospect Park West Owners Corp. | 4/24/2015 | 4/21/2015 | |||||||||||||||||||||||||
118 | Shops of Orland Park | E & S Cleaners | 1,600 | 10.1% | 7/31/2018 | Sprint | 1,460 | 9.2% | 2/28/2017 | 4/9/2015 | 2/5/2015 | 2/27/2015 | ||||||||||||||||
119 | Victorville Retail Center | 3/19/2015 | 3/19/2015 | 3/19/2015 | 7.0% | |||||||||||||||||||||||
120 | 6 West 20th St. Tenants Corp. | 2/3/2015 | 2/2/2015 | |||||||||||||||||||||||||
121 | 50-22 Owners Ltd. | 12/16/2014 | 12/22/2014 | |||||||||||||||||||||||||
122 | 585 McLean Owners, Inc. | 3/20/2015 | 3/18/2015 | |||||||||||||||||||||||||
123 | 12 West 17th St. Tenants’ Corp. | 12/17/2014 | 1/23/2015 | |||||||||||||||||||||||||
124 | Gillespie Field Business Park | 4/28/2015 | 4/15/2015 | 4/9/2015 | 10.0% | |||||||||||||||||||||||
125 | Waters at West End, Inc. | 2/11/2015 | 2/11/2015 | |||||||||||||||||||||||||
126 | Jones St. Owners Corporation | 11/10/2014 | 11/11/2014 | |||||||||||||||||||||||||
127 | Big Lots Plaza | Chinese Restaurant | 1,000 | 2.7% | 7/31/2020 | Barber Shop | 455 | 1.3% | 1/31/2018 | 12/31/2014 | 4/28/2015 | |||||||||||||||||
128 | 30 Bond Street Owners Corp. | 1/13/2015 | 1/22/2015 | |||||||||||||||||||||||||
129 | 166 West 76th Apartment Corp. | 3/3/2015 | 3/2/2015 | |||||||||||||||||||||||||
130 | Hanna Shoppes | 3 Chicanos Taqueria | 1,625 | 10.1% | 3/31/2017 | Ames Taping | 1,625 | 10.1% | 12/31/2017 | 1/27/2015 | 1/27/2015 | |||||||||||||||||
131 | Carroll Gardens Owners, Corp. | 4/9/2015 | 4/7/2015 | |||||||||||||||||||||||||
132 | 170 East 92nd Street Owners, Inc. | 4/13/2015 | 4/9/2015 | |||||||||||||||||||||||||
133 | 17 Warren Street Tenants Corporation | 12/29/2014 | 12/24/2014 |
A-1-16 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Mortgage Loan Number | Property Name | Seismic Insurance Required (Y/N) | Terrorism Insurance (Y/N) | Loan Purpose | Engineering Escrow / Deferred Maintenance ($) | Tax Escrow (Initial) | Monthly Tax Escrow ($)(11) | Tax Escrow - Cash or LoC | Tax Escrow - LoC Counterparty | Insurance Escrow (Initial)(12) | Monthly Insurance Escrow ($)(12) | Insurance Escrow - Cash or LoC | Insurance Escrow - LoC Counterparty | Upfront Replacement Reserve ($) | Monthly Replacement Reserve ($)(13) | |||||||||||||||
1 | Hutchinson Metro Center I | N | Y | Refinance | 49,688 | 229,840 | 42,338 | Cash | 0 | Springing | 0 | 8,801 | ||||||||||||||||||
2 | Cathedral Place | N | Y | Refinance | 0 | 271,791 | 90,597 | Cash | 19,469 | 4,867 | Cash | 0 | 3,663; Springing | |||||||||||||||||
3 | 150 Royall Street | N | Y | Acquisition | 0 | 125,155 | 62,578 | Cash | 0 | Springing | 0 | Springing | ||||||||||||||||||
4 | WPC Self Storage Portfolio VII | N | Y | Acquisition | 0 | 0 | Springing | 0 | Springing | 0 | Springing | |||||||||||||||||||
4.01 | Extra Space Louisville KY | N | Y | |||||||||||||||||||||||||||
4.02 | Extra Space Las Vegas NV | N | Y | |||||||||||||||||||||||||||
4.03 | CubeSmart Joan Panama City Beach FL | N | Y | |||||||||||||||||||||||||||
4.04 | CubeSmart Tallahassee FL | N | Y | |||||||||||||||||||||||||||
4.05 | Extra Space Lady Lake FL | N | Y | |||||||||||||||||||||||||||
4.06 | CubeSmart Crystal Lake IL | N | Y | |||||||||||||||||||||||||||
4.07 | CubeSmart Hutchinson Panama City Beach FL | N | Y | |||||||||||||||||||||||||||
4.08 | Extra Space Lilburn GA | N | Y | |||||||||||||||||||||||||||
4.09 | Extra Space Stockbridge GA | N | Y | |||||||||||||||||||||||||||
5 | Queens’ MarketPlace | N | Y | Refinance | 0 | 144,205 | 28,841 | Cash | 0 | Springing | 0 | 1,637 | ||||||||||||||||||
6 | El Sol Brillante and Laguna Del Sol Apartments | N | Y | Acquisition | 34,300 | 142,305 | 27,106 | Cash | 83,405 | 26,478 | Cash | 0 | 17,522 | |||||||||||||||||
6.01 | Laguna Del Sol Apartments | N | Y | |||||||||||||||||||||||||||
6.02 | El Sol Brillante Apartments | N | Y | |||||||||||||||||||||||||||
7 | Country Club Center | N | Y | Refinance | 0 | 205,376 | 25,672 | Cash | 0 | Springing | 0 | Springing | ||||||||||||||||||
8 | Parkway Crossing East Shopping Center | N | Y | Refinance | 0 | 0 | Springing | 0 | Springing | 0 | 2,747 | |||||||||||||||||||
9 | Olmsted Plaza Shopping Center | N | Y | Refinance | 0 | 319,454 | 63,891 | Cash | 74,310 | 6,193 | Cash | 4,287 | 4,287 | |||||||||||||||||
10 | Hall Office Park | N | Y | Refinance | 0 | 328,830 | 54,805 | Cash | 0 | Springing | 0 | 2,379 | ||||||||||||||||||
11 | Dulles North Corporate Parks | N | Y | Refinance | 0 | 197,864 | 34,626 | Cash | 0 | Springing | 0 | 4,457 | ||||||||||||||||||
11.01 | Dulles North Corporate Park 5 | N | Y | |||||||||||||||||||||||||||
11.02 | Dulles North Corporate Park 2 | N | Y | |||||||||||||||||||||||||||
12 | Coastal Village Apartments | N | Y | Acquisition | 90,000 | 101,631 | 33,875 | Cash | 20,614 | 21,800 | Cash | 500,000 | 10,861 | |||||||||||||||||
13 | Foothills Park Place | N | Y | Refinance | 0 | 21,089 | 21,089 | Cash | 28,677 | 2,607 | Cash | 0 | 0 | |||||||||||||||||
14 | Smiths Medical | N | Y | Acquisition | 0 | 0 | Springing | 0 | Springing | 0 | Springing | |||||||||||||||||||
15 | Hunterstone Apartments | N | Y | Acquisition | 0 | 50,135 | 9,549 | Cash | 0 | Springing | 0 | 6,000 | ||||||||||||||||||
16 | Magnolia Marketplace | N | Y | Refinance | 0 | 86,812 | 21,703 | Cash | 147,160 | 11,242 | Cash | 0 | Springing | |||||||||||||||||
17 | Norfolk Commerce Park | N | Y | Acquisition | 0 | 47,856 | 23,927 | Cash | 15,403 | 3,851 | Cash | 0 | 5,533 | |||||||||||||||||
18 | Summer Bend Apartments | N | Y | Refinance | 28,125 | 150,372 | 25,062 | Cash | 75,961 | 7,718 | Cash | 0 | 7,150 | |||||||||||||||||
19 | Baywoods of Annapolis | N | Y | Refinance | 0 | 314,071 | 52,345 | Cash | 15,870 | 15,870 | Cash | 0 | 7,239 | |||||||||||||||||
20 | Rock Hill Hampton Inn | N | Y | Refinance | 0 | 114,375 | 19,062 | Cash | 0 | Springing | 0 | 17,159 | ||||||||||||||||||
21 | Louisville Plaza | N | Y | Refinance | 0 | 0 | Springing | 0 | Springing | 0 | Springing | |||||||||||||||||||
22 | Marquis Place | N | Y | Refinance | 3,000 | 111,607 | 13,951 | Cash | 35,787 | 2,800 | Cash | 0 | 2,458 | |||||||||||||||||
23 | Riverside Technology Park A & B | N | Y | Refinance | 0 | 155,528 | 14,139 | Cash | 0 | Springing | 0 | 2,746 | ||||||||||||||||||
24 | Maricopa Fiesta | N | Y | Refinance | 11,000 | 30,680 | 29,219 | Cash | 6,228 | 1,186 | Cash | 0 | 1,781 | |||||||||||||||||
25 | Dunwoody Place | N | Y | Refinance | 0 | 123,842 | 15,481 | Cash | 0 | Springing | 1,718 | 1,718 | ||||||||||||||||||
26 | Jackson Square Apartments | N | Y | Refinance | 0 | 82,832 | 13,805 | Cash | 0 | 3,333 | Cash | 1,052,890 | Springing | |||||||||||||||||
27 | Shops at Doral | N | Y | Refinance | 0 | 17,305 | 5,494 | Cash | 14,026 | 1,908 | Cash | 0 | 348 | |||||||||||||||||
28 | Solano Apartments | N | Y | Refinance | 0 | 124,263 | 22,593 | Cash | 74,811 | 11,129 | Cash | 0 | 5,458 | |||||||||||||||||
29 | Riverchase Apartments | N | Y | Acquisition | 8,938 | 21,197 | 20,188 | Cash | 0 | Springing | 0 | 4,500 | ||||||||||||||||||
30 | Old Mills | N | Y | Refinance | 122,000 | 57,195 | 13,618 | Cash | 26,843 | 6,391 | Cash | 130,625 | 5,167 | |||||||||||||||||
31 | Ozinus Realty Property Portfolio | N | Y | Refinance | 254,933 | 165,262 | 25,667 | Cash | 72,680 | 18,170 | Cash | 0 | 5,764 | |||||||||||||||||
31.01 | Shiloh Crossing | N | Y | |||||||||||||||||||||||||||
31.02 | Texas Star | N | Y | |||||||||||||||||||||||||||
31.03 | Pitney Bowes | N | Y | |||||||||||||||||||||||||||
31.04 | Towne Crest Village | N | Y | |||||||||||||||||||||||||||
31.05 | Eagle Plaza | N | Y | |||||||||||||||||||||||||||
31.06 | Palmetto | N | Y | |||||||||||||||||||||||||||
31.07 | Hamlin | N | Y | |||||||||||||||||||||||||||
32 | Brickyard Square | N | Y | Refinance | 0 | 245,907 | 39,033 | Cash | 12,163 | 1,931 | Cash | 0 | 1,448 | |||||||||||||||||
33 | Dos Santos Apartments | N | Y | Refinance | 0 | 36,066 | 6,011 | Cash | 0 | Springing | 0 | 5,708; Springing | ||||||||||||||||||
34 | Villa Bella | N | Y | Refinance | 37,688 | 78,105 | 12,398 | Cash | 64,865 | 6,864 | Cash | 0 | 2,987 | |||||||||||||||||
35 | Bayview Office Building | N | Y | Acquisition | 0 | 102,298 | 14,614 | Cash | 6,859 | 6,859 | Cash | 0 | 2,746; Springing | |||||||||||||||||
36 | Casa Nube | N | Y | Refinance | 67,165 | 87,314 | 14,552 | Cash | 31,014 | 14,769 | Cash | 0 | 8,020 | |||||||||||||||||
37 | Homewood Suites - Tallahassee | N | Y | Refinance | 0 | 41,419 | 5,917 | Cash | 38,248 | 4,781 | Cash | 0 | 11,500 | |||||||||||||||||
38 | San Mateo Apartments | N | Y | Refinance | 17,978 | 97,776 | 16,296 | Cash | 0 | Springing | 0 | 5,167; Springing | ||||||||||||||||||
39 | Brittany Bay II | N | Y | Refinance | 39,875 | 34,923 | 11,641 | Cash | 9,791 | 4,895 | Cash | 0 | 5,200 | |||||||||||||||||
40 | Nexus Town Center | N | Y | Refinance | 0 | 27,612 | 9,204 | Cash | 14,584 | 1,823 | Cash | 0 | 1,388 | |||||||||||||||||
41 | Cathedral Place - Parking | N | Y | Refinance | 0 | 71,782 | 23,927 | Cash | 6,908 | 1,727 | Cash | 0 | 3,917 | |||||||||||||||||
42 | Indiana Village | N | Y | Refinance | 178,725 | 44,379 | 14,791 | Cash | 7,600 | 3,800 | Cash | 7,224 | 7,224 | |||||||||||||||||
43 | Fahrens Park Plaza | N | Y | Refinance | 0 | 10,330 | 5,165 | Cash | 11,820 | 1,182 | Cash | 0 | Springing | |||||||||||||||||
44 | Causeway Corporate Centre | N | Y | Refinance | 63,063 | 49,657 | 15,764 | Cash | 68,705 | 5,033 | Cash | 0 | 769 | |||||||||||||||||
45 | TownePlace Suites St. George by Marriott | N | Y | Refinance | 0 | 29,771 | 4,260 | Cash | 16,650 | 1,600 | Cash | 8,269 | 8,269 | |||||||||||||||||
46 | IRG - Ellsworth Bailey Saratoga | N | Y | Refinance | 0 | 5,696 | 14,472 | Cash | 2,781 | 926 | Cash | 0 | 3,985; Springing | |||||||||||||||||
46.01 | Saratoga II | N | Y | |||||||||||||||||||||||||||
46.02 | Saratoga I | N | Y | |||||||||||||||||||||||||||
46.03 | Ellsworth Bailey Lordstown | N | Y | |||||||||||||||||||||||||||
47 | 39-60 54th Street Owners, Inc. | N | Y | Refinance | 0 | 0 | Springing | 0 | Springing | 0 | 0 | |||||||||||||||||||
48 | Courtyard by Marriott - Shawnee | N | Y | Refinance | 0 | 30,844 | 10,281 | Cash | 5,902 | 1,967 | Cash | 0 | $8,020 initially; starting on the 13th Payment Date, monthly deposit will increase to greater of (i) 1/12 of 4% of the total gross revenues of the Property for the previous 12 month period, or (ii) the amount required under the Franchise Agreement | |||||||||||||||||
49 | Athens Gate Apartments | N | Y | Refinance | 17,174 | 51,030 | 8,505 | Cash | 0 | Springing | 0 | 4,854; Springing | ||||||||||||||||||
50 | Sand Pebble Apartments | N | Y | Refinance | 22,094 | 118,410 | 19,735 | Cash | 0 | Springing | 0 | 4,333; Springing | ||||||||||||||||||
51 | Trojan Storage of Oxnard | N | Y | Refinance | 0 | 12,174 | 6,087 | Cash | 0 | Springing | 0 | 1,009; Springing | ||||||||||||||||||
52 | CVS - Lynn, MA | N | N | Acquisition | 0 | 0 | Springing | 0 | Springing | 0 | Springing | |||||||||||||||||||
53 | Gilbert Crossing | N | Y | Refinance | 0 | 18,530 | 9,265 | Cash | 0 | Springing | 130,000 | 1,042 | ||||||||||||||||||
54 | 1321 Harbor Bay Parkway | N | Y | Refinance | 0 | 16,104 | 8,052 | Cash | 0 | Springing | 0 | 836; Springing | ||||||||||||||||||
55 | Casa Cruz | N | Y | Acquisition | 138,438 | 76,001 | 14,476 | Cash | 7,265 | 6,919 | Cash | 0 | 6,550 | |||||||||||||||||
56 | Best Western Plus - Windsor Gardens | N | Y | Acquisition | 16,750 | 22,915 | 7,275 | Cash | 23,288 | 11,089 | Cash | 0 | 7,142 | |||||||||||||||||
57 | Oak Tree Plaza | N | Y | Refinance | 0 | 5,976 | 5,976 | Cash | 10,034 | 1,062 | Cash | 29,759 | 248 | |||||||||||||||||
58 | Peppertree Lane Apartments | N | Y | Acquisition | 53,875 | 92,255 | 11,336 | Cash | 10,292 | 5,304 | Cash | 0 | 3,850 | |||||||||||||||||
59 | 8211 Town Center Drive | N | Y | Refinance | 0 | 51,501 | 5,723 | Cash | 7,398 | 673 | Cash | 0 | 1,446 | |||||||||||||||||
60 | Staybridge Suites Indianapolis Airport | N | Y | Refinance | 188 | 8,000 | 7,619 | Cash | 36,267 | 3,140 | Cash | 0 | 8,447 | |||||||||||||||||
61 | Austin Heights Shopping Center | N | Y | Refinance | 0 | 93,694 | 15,616 | Cash | 0 | 0 | 0 | 999 | ||||||||||||||||||
62 | Walgreens - Duncanville, TX | N | N | Acquisition | 0 | 0 | Springing | 0 | Springing | 0 | Springing | |||||||||||||||||||
63 | Trojan Storage of Roseville | N | Y | Acquisition | 0 | 4,225 | 4,225 | Cash | 0 | Springing | 0 | 972; Springing | ||||||||||||||||||
64 | Lakeside Plaza | N | Y | Refinance | 10,813 | 80,185 | 16,037 | Cash | 19,512 | 2,439 | Cash | 0 | 5,214 | |||||||||||||||||
65 | Green Acres MHP | N | Y | Acquisition | 22,313 | 10,050 | 5,025 | Cash | 3,200 | 1,600 | Cash | 50,000 | 883 | |||||||||||||||||
66 | Mendicino Green Apartment Corp. | N | Y | Refinance | 0 | 0 | Springing | 0 | Springing | 0 | 0 | |||||||||||||||||||
67 | Walgreens - Richmond Heights | N | N | Acquisition | 0 | 0 | Springing | 0 | Springing | 0 | Springing | |||||||||||||||||||
68 | Rivertown Center | N | Y | Acquisition | 0 | 107,227 | 12,053 | Cash | 0 | Springing | 0 | 1,015 | ||||||||||||||||||
69 | Bristol House, Inc. | N | Y | Refinance | 0 | 69,699 | 11,616 | Cash | 0 | 0 | 0 | 0 | ||||||||||||||||||
70 | Storaway Self Storage - Nashville | N | Y | Refinance | 0 | 35,550 | 7,110 | Cash | 0 | Springing | 36,171 | 1,005 | ||||||||||||||||||
71 | Bella Luna / San Lucas | N | Y | Refinance | 4,375 | 0 | 32,500 | Cash | 50,000 | 30,675 | Cash | 500,000 | 19,500 | |||||||||||||||||
72 | Seacoast Self Storage | N | Y | Acquisition | 30,265 | 13,680 | 2,606 | Cash | 809 | 736 | Cash | 0 | 691 | |||||||||||||||||
73 | 230 Garth Road Owners, Inc. | N | Y | Refinance | 0 | 0 | Springing | 0 | Springing | 0 | 0 | |||||||||||||||||||
74 | Comfort Suites - Near the Galleria | N | Y | Refinance | 18,785 | 31,137 | 7,414 | Cash | 31,564 | 2,733 | Cash | 0 | 5,800 | |||||||||||||||||
75 | Sandstone Apartments | N | Y | Recapitalization | 78,113 | 15,646 | 4,967 | Cash | 102,570 | 9,325 | Cash | 250,000 | 4,171 | |||||||||||||||||
76 | Tieton Village | N | Y | Acquisition | 0 | 9,580 | 4,790 | Cash | 0 | Springing | 0 | 1,020 | ||||||||||||||||||
77 | Highland Terrace Housing Development Fund Corporation | N | Y | Refinance | 0 | 19,257 | 6,364 | Cash | 0 | Springing | 0 | 0 | ||||||||||||||||||
78 | Cooperstown Commons Shopping Center | N | Y | Acquisition | 20,031 | 16,291 | 8,145 | Cash | 2,915 | 1,388 | Cash | 0 | 697 | |||||||||||||||||
79 | Lake Lucina Shopping Center | N | Y | Refinance | 0 | 4,299 | 4,299 | Cash | 13,821 | 1,382 | Cash | 0 | 1,512 | |||||||||||||||||
80 | Silver Bridge Plaza | N | Y | Refinance | 141,209 | 18,108 | 4,527 | Cash | 37,495 | 5,200 | Cash | 0 | 3,524 | |||||||||||||||||
81 | Karen Gardens Apartment Corp. | N | Y | Refinance | 0 | 16,670 | 16,670 | Cash | 0 | Springing | 0 | 0 | ||||||||||||||||||
82 | East Haven Self Storage | N | Y | Refinance | 0 | 3,267 | 3,112 | Cash | 10,885 | 864 | Cash | 0 | 420 | |||||||||||||||||
83 | Walgreens - Milwaukee | N | N | Acquisition | 0 | 0 | Springing | 0 | Springing | 0 | Springing |
A-1-17 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Mortgage Loan Number | Property Name | Seismic Insurance Required (Y/N) | Terrorism Insurance (Y/N) | Loan Purpose | Engineering Escrow / Deferred Maintenance ($) | Tax Escrow (Initial) | Monthly Tax Escrow ($)(11) | Tax Escrow - Cash or LoC | Tax Escrow - LoC Counterparty | Insurance Escrow (Initial)(12) | Monthly Insurance Escrow ($)(12) | Insurance Escrow - Cash or LoC | Insurance Escrow - LoC Counterparty | Upfront Replacement Reserve ($) | Monthly Replacement Reserve ($)(13) | |||||||||||||||
84 | Haggen Food & Pharmacy | N | Y | Acquisition | 0 | 0 | Springing | 0 | Springing | 0 | Springing | |||||||||||||||||||
85 | Sycamore Terrace | N | Y | Acquisition | 0 | 13,297 | 6,332 | Cash | 1,306 | 415 | Cash | 0 | 272 | |||||||||||||||||
86 | Ramona Plaza Shopping Center | N | Y | Refinance | 0 | 10,108 | 5,054 | Cash | 588 | 588 | Cash | 0 | 829 | |||||||||||||||||
87 | All A/C Self Storage | N | Y | Refinance | 37,000 | 3,456 | 3,292 | Cash | 9,595 | 3,046 | Cash | 0 | 442 | |||||||||||||||||
88 | Pecue MHC | N | Y | Acquisition | 0 | 1,944 | 324 | Cash | 20,181 | 2,561 | Cash | 0 | 583 | |||||||||||||||||
89 | Regency Park Owners Corp. | N | Y | Refinance | 0 | 0 | Springing | 0 | Springing | 0 | 0 | |||||||||||||||||||
90 | Storaway Self Storage - Deltona II | N | Y | Refinance | 18,918 | 32,440 | 4,055 | Cash | 0 | Springing | 31,152 | 865 | ||||||||||||||||||
91 | Lakewood Place Shopping Center | N | Y | Refinance | 0 | 2,220 | 2,220 | Cash | 0 | Springing | 0 | 422 | ||||||||||||||||||
92 | Hacienda Heights Apartments | N | Y | Refinance | 0 | 10,618 | 5,309 | Cash | 0 | Springing | 0 | Springing | ||||||||||||||||||
93 | Nagle House, Inc. | N | Y | Refinance | 0 | 36,000 | 9,000 | Cash | 0 | Springing | 0 | 0 | ||||||||||||||||||
94 | Walgreens - Warrensburg, MO | N | N | Refinance | 0 | 0 | Springing | 0 | Springing | 0 | Springing | |||||||||||||||||||
95 | 230 Tenants Corporation | N | Y | Refinance | 0 | 36,889 | 36,889 | Cash | 0 | Springing | 0 | 0 | ||||||||||||||||||
96 | Shackelford Center | N | Y | Acquisition | 47,007 | 0 | Springing | 0 | Springing | 0 | 827 | |||||||||||||||||||
97 | De La Cruz Professional Center | N | Y | Acquisition | 0 | 25,445 | 3,635 | Cash | 3,856 | 1,928 | Cash | 0 | 446 | |||||||||||||||||
98 | Folcroft Self Storage | N | Y | Acquisition | 0 | 48,640 | 6,618 | Cash | 5,479 | 580 | Cash | 0 | 567 | |||||||||||||||||
99 | Storaway Self Storage - Palm Bay | N | Y | Refinance | 0 | 26,880 | 3,360 | Cash | 0 | Springing | 30,759 | 854 | ||||||||||||||||||
100 | Bowen Tower Apartments | N | Y | Acquisition | 12,625 | 3,496 | 1,748 | Cash | 4,153 | 2,077 | Cash | 0 | 3,655 | |||||||||||||||||
101 | 321 West 90th St. Owners Corp. | N | Y | Refinance | 0 | 0 | Springing | 0 | Springing | 0 | 0 | |||||||||||||||||||
102 | West Friendship Shopping Center | N | Y | Refinance | 0 | 24,715 | 3,089 | Cash | 3,357 | 839 | Cash | 0 | 279 | |||||||||||||||||
103 | Crestview Self Storage | N | Y | Refinance | 0 | 0 | Springing | 0 | Springing | 0 | Springing | |||||||||||||||||||
104 | Denn Owners Corporation | N | Y | Refinance | 0 | 14,723 | 7,361 | Cash | 0 | Springing | 0 | 0 | ||||||||||||||||||
105 | Moundsville Plaza | N | Y | Refinance | 37,750 | 9,422 | 3,142 | Cash | 15,954 | 1,700 | Cash | 0 | 2,195 | |||||||||||||||||
106 | Storaway Self Storage- Deltona I | N | Y | Refinance | 0 | 32,488 | 4,061 | Cash | 0 | Springing | 19,848 | 551 | ||||||||||||||||||
107 | Sedona Peak Apartments | N | Y | Refinance | 0 | 20,472 | 3,412 | Cash | 0 | Springing | 0 | 1,938; Springing | ||||||||||||||||||
108 | Sea Breeze Town Houses Owners, Inc. | N | Y | Refinance | 0 | 0 | Springing | 0 | Springing | 0 | 0 | |||||||||||||||||||
109 | Willow Lake Shops | N | Y | Acquisition | 0 | 9,602 | 1,920 | Cash | 1,299 | 649 | Cash | 0 | 405 | |||||||||||||||||
110 | Wickham Park Commons | N | Y | Acquisition | 0 | 29,048 | 3,631 | Cash | 1,346 | 1,346 | Cash | 0 | 254 | |||||||||||||||||
111 | Crown Pointe Plaza | N | Y | Refinance | 0 | 32,046 | 5,341 | Cash | 7,488 | 681 | Cash | 0 | 874 | |||||||||||||||||
112 | Hartsdale Executive House, Inc. | N | Y | Refinance | 0 | 0 | Springing | 0 | Springing | 0 | 0 | |||||||||||||||||||
113 | 25 Chapel Corp. | N | Y | Refinance | 0 | 0 | Springing | 0 | Springing | 0 | 0 | |||||||||||||||||||
114 | Market Place Village | N | Y | Refinance | 0 | 5,394 | 1,079 | Cash | 2,161 | 270 | Cash | 0 | 182 | |||||||||||||||||
115 | Kingstowne Shops | N | Y | Refinance | 0 | 5,680 | 2,840 | Cash | 5,400 | 540 | Cash | 0 | 408 | |||||||||||||||||
116 | 109-111 N. Broadway Apt. Corp. | N | Y | Refinance | 0 | 0 | Springing | 0 | Springing | 0 | 0 | |||||||||||||||||||
117 | 40 Prospect Park West Owners Corp. | N | Y | Refinance | 0 | 0 | Springing | 0 | Springing | 0 | 0 | |||||||||||||||||||
118 | Shops of Orland Park | N | Y | Acquisition | 0 | 53,256 | 8,876 | Cash | 0 | Springing | 10,000 | 596 | ||||||||||||||||||
119 | Victorville Retail Center | N | Y | Refinance | 0 | 5,203 | 5,203 | Cash | 1,718 | 572 | Cash | 0 | Springing | |||||||||||||||||
120 | 6 West 20th St. Tenants Corp. | N | Y | Refinance | 0 | 0 | Springing | 0 | Springing | 0 | 0 | |||||||||||||||||||
121 | 50-22 Owners Ltd. | N | Y | Refinance | 0 | 0 | 5,638 | Cash | 0 | Springing | 0 | 0 | ||||||||||||||||||
122 | 585 McLean Owners, Inc. | N | Y | Refinance | 0 | 14,921 | 4,974 | Cash | 0 | Springing | 0 | 0 | ||||||||||||||||||
123 | 12 West 17th St. Tenants’ Corp. | N | Y | Refinance | 0 | 0 | Springing | 0 | Springing | 0 | 0 | |||||||||||||||||||
124 | Gillespie Field Business Park | N | Y | Refinance | 0 | 4,284 | 2,142 | Cash | 662 | 166 | Cash | 0 | 278 | |||||||||||||||||
125 | Waters at West End, Inc. | N | Y | Refinance | 0 | 0 | Springing | 0 | Springing | 0 | 0 | |||||||||||||||||||
126 | Jones St. Owners Corporation | N | Y | Refinance | 0 | 9,100 | 9,100 | Cash | 0 | Springing | 0 | 0 | ||||||||||||||||||
127 | Big Lots Plaza | N | Y | Refinance | 0 | 18,865 | 2,695 | Cash | 24,876 | 2,073 | Cash | 0 | 1,240 | |||||||||||||||||
128 | 30 Bond Street Owners Corp. | N | Y | Refinance | 0 | 4,500 | 4,500 | Cash | 0 | Springing | 0 | 0 | ||||||||||||||||||
129 | 166 West 76th Apartment Corp. | N | Y | Refinance | 0 | 0 | Springing | 0 | Springing | 0 | 0 | |||||||||||||||||||
130 | Hanna Shoppes | N | Y | Acquisition | 15,831 | 4,318 | 2,159 | Cash | 753 | 189 | Cash | 0 | 499 | |||||||||||||||||
131 | Carroll Gardens Owners, Corp. | N | Y | Refinance | 0 | 7,195 | 7,195 | Cash | 0 | Springing | 0 | 0 | ||||||||||||||||||
132 | 170 East 92nd Street Owners, Inc. | N | Y | Refinance | 0 | 0 | Springing | 0 | Springing | 0 | 0 | |||||||||||||||||||
133 | 17 Warren Street Tenants Corporation | N | Y | Refinance | 0 | 16,432 | 5,477 | Cash | 0 | Springing | 0 | 0 |
A-1-18 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Mortgage Loan Number | Property Name | Replacement Reserve Cap ($) | Replacement Reserve Escrow - Cash or LoC | Replacement Reserve Escrow - LoC Counterparty | Upfront TI/LC Reserve ($) | Monthly TI/LC Reserve ($)(14) | TI/LC Reserve Cap ($)(14) | TI/LC Escrow - Cash or LoC | TI/LC Escrow - LoC Counterparty | Debt Service Escrow (Initial) ($) | Debt Service Escrow (Monthly) ($) | Debt Service Escrow - Cash or LoC | Debt Service Escrow - LoC Counterparty | |||||||||||||
1 | Hutchinson Metro Center I | 0 | Cash | 0 | 49,286; Springing | 1,500,000 | Cash | 0 | 0 | |||||||||||||||||
2 | Cathedral Place | 205,000 | Cash | 0 | 22,826; Springing | 1,300,000 | Cash | 0 | 0 | |||||||||||||||||
3 | 150 Royall Street | 0 | 0 | 27,015 | 0 | Cash | 0 | 0 | ||||||||||||||||||
4 | WPC Self Storage Portfolio VII | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
4.01 | Extra Space Louisville KY | |||||||||||||||||||||||||
4.02 | Extra Space Las Vegas NV | |||||||||||||||||||||||||
4.03 | CubeSmart Joan Panama City Beach FL | |||||||||||||||||||||||||
4.04 | CubeSmart Tallahassee FL | |||||||||||||||||||||||||
4.05 | Extra Space Lady Lake FL | |||||||||||||||||||||||||
4.06 | CubeSmart Crystal Lake IL | |||||||||||||||||||||||||
4.07 | CubeSmart Hutchinson Panama City Beach FL | |||||||||||||||||||||||||
4.08 | Extra Space Lilburn GA | |||||||||||||||||||||||||
4.09 | Extra Space Stockbridge GA | |||||||||||||||||||||||||
5 | Queens’ MarketPlace | 0 | Cash | 0 | 9,275; Springing | 334,000 | Cash | 0 | 0 | |||||||||||||||||
6 | El Sol Brillante and Laguna Del Sol Apartments | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
6.01 | Laguna Del Sol Apartments | |||||||||||||||||||||||||
6.02 | El Sol Brillante Apartments | |||||||||||||||||||||||||
7 | Country Club Center | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
8 | Parkway Crossing East Shopping Center | 0 | Cash | 0 | 7,764 | 400,000 | Cash | 0 | 0 | |||||||||||||||||
9 | Olmsted Plaza Shopping Center | 100,000 | Cash | 10,717 | 10,717 | 200,000 | Cash | 0 | 0 | |||||||||||||||||
10 | Hall Office Park | 0 | Cash | 500,000 | 14,871; Springing | 725,000 | Cash | 0 | 0 | |||||||||||||||||
11 | Dulles North Corporate Parks | 0 | Cash | 0 | 12,500 | 300,000 | Cash | 0 | 0 | |||||||||||||||||
11.01 | Dulles North Corporate Park 5 | |||||||||||||||||||||||||
11.02 | Dulles North Corporate Park 2 | |||||||||||||||||||||||||
12 | Coastal Village Apartments | 1,000,000 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
13 | Foothills Park Place | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
14 | Smiths Medical | 0 | 0 | Springing | 0 | 0 | 0 | |||||||||||||||||||
15 | Hunterstone Apartments | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
16 | Magnolia Marketplace | 0 | Cash | 0 | Springing | 0 | Cash | 0 | 0 | �� | ||||||||||||||||
17 | Norfolk Commerce Park | 0 | Cash | 600,000 | 25,328 | 1,500,000 | Cash | 0 | 0 | |||||||||||||||||
18 | Summer Bend Apartments | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
19 | Baywoods of Annapolis | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
20 | Rock Hill Hampton Inn | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
21 | Louisville Plaza | 0 | 0 | Springing | 677,880 | 0 | 0 | |||||||||||||||||||
22 | Marquis Place | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
23 | Riverside Technology Park A & B | 98,856 | Cash | 0 | 11,000 | 0 | Cash | 0 | 0 | |||||||||||||||||
24 | Maricopa Fiesta | 0 | Cash | 0 | 6,420 | 150,000 | Cash | 0 | 0 | |||||||||||||||||
25 | Dunwoody Place | 0 | Cash | 6,441 | 6,441 | 0 | Cash | 0 | 0 | |||||||||||||||||
26 | Jackson Square Apartments | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
27 | Shops at Doral | 0 | Cash | 0 | 1,160 | 41,758 | Cash | 0 | 0 | |||||||||||||||||
28 | Solano Apartments | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
29 | Riverchase Apartments | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
30 | Old Mills | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
31 | Ozinus Realty Property Portfolio | 0 | Cash | 0 | 20,672 | 248,000 | Cash | 0 | 0 | |||||||||||||||||
31.01 | Shiloh Crossing | |||||||||||||||||||||||||
31.02 | Texas Star | |||||||||||||||||||||||||
31.03 | Pitney Bowes | |||||||||||||||||||||||||
31.04 | Towne Crest Village | |||||||||||||||||||||||||
31.05 | Eagle Plaza | |||||||||||||||||||||||||
31.06 | Palmetto | |||||||||||||||||||||||||
31.07 | Hamlin | |||||||||||||||||||||||||
32 | Brickyard Square | 0 | Cash | 0 | 5,792 | 0 | Cash | 0 | 0 | |||||||||||||||||
33 | Dos Santos Apartments | 205,488 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
34 | Villa Bella | 128,000 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
35 | Bayview Office Building | 60,000 | Cash | 218,218 | 13,726 | 1,200,000 | Cash | 0 | 0 | |||||||||||||||||
36 | Casa Nube | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
37 | Homewood Suites - Tallahassee | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
38 | San Mateo Apartments | 186,012 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
39 | Brittany Bay II | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
40 | Nexus Town Center | 25,000 | Cash | 0 | Springing | 0 | 0 | 0 | ||||||||||||||||||
41 | Cathedral Place - Parking | 235,250 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
42 | Indiana Village | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
43 | Fahrens Park Plaza | 0 | 200,000 | 6,597 | 200,000 | Cash | 0 | 0 | ||||||||||||||||||
44 | Causeway Corporate Centre | 0 | Cash | 0 | 4,167 | 250,000 | Cash | 0 | 0 | |||||||||||||||||
45 | TownePlace Suites St. George by Marriott | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
46 | IRG - Ellsworth Bailey Saratoga | 150,000 | Cash | 0 | 11,722 | 425,000 | Cash | 0 | 0 | |||||||||||||||||
46.01 | Saratoga II | |||||||||||||||||||||||||
46.02 | Saratoga I | |||||||||||||||||||||||||
46.03 | Ellsworth Bailey Lordstown | |||||||||||||||||||||||||
47 | 39-60 54th Street Owners, Inc. | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
48 | Courtyard by Marriott - Shawnee | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
49 | Athens Gate Apartments | 174,744 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
50 | Sand Pebble Apartments | 155,988 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
51 | Trojan Storage of Oxnard | 24,216 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
52 | CVS - Lynn, MA | 0 | 0 | Springing | 0 | 0 | 0 | |||||||||||||||||||
53 | Gilbert Crossing | 0 | Cash | 155,000 | 3,194; Springing | 155,000 | Cash | 0 | 0 | |||||||||||||||||
54 | 1321 Harbor Bay Parkway | 20,070 | Cash | 0 | Springing | 0 | 0 | 0 | ||||||||||||||||||
55 | Casa Cruz | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
56 | Best Western Plus - Windsor Gardens | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
57 | Oak Tree Plaza | 29,759 | Cash | 33,066 | 689 | 33,066 | Cash | 0 | 0 | |||||||||||||||||
58 | Peppertree Lane Apartments | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
59 | 8211 Town Center Drive | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
60 | Staybridge Suites Indianapolis Airport | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
61 | Austin Heights Shopping Center | 0 | Cash | 0 | 9,094 | 300,000 | Cash | 0 | 0 | |||||||||||||||||
62 | Walgreens - Duncanville, TX | 0 | 0 | Springing | 0 | 0 | 0 | |||||||||||||||||||
63 | Trojan Storage of Roseville | 23,322 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
64 | Lakeside Plaza | 0 | Cash | 300,000 | 17,917 | 500,000 | Cash | 0 | 0 | |||||||||||||||||
65 | Green Acres MHP | 50,000 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
66 | Mendicino Green Apartment Corp. | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
67 | Walgreens - Richmond Heights | 0 | 0 | Springing | 0 | 0 | 0 | |||||||||||||||||||
68 | Rivertown Center | 50,000 | Cash | 0 | 5,935; Springing | 125,000 | Cash | 0 | 0 | |||||||||||||||||
69 | Bristol House, Inc. | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
70 | Storaway Self Storage - Nashville | 36,171 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
71 | Bella Luna / San Lucas | 150,000 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
72 | Seacoast Self Storage | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
73 | 230 Garth Road Owners, Inc. | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
74 | Comfort Suites - Near the Galleria | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
75 | Sandstone Apartments | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
76 | Tieton Village | 0 | Cash | 0 | 2,806 | 101,022 | Cash | 0 | 0 | |||||||||||||||||
77 | Highland Terrace Housing Development Fund Corporation | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
78 | Cooperstown Commons Shopping Center | 0 | Cash | 50,000 | 2,323 | 200,000 | Cash | 0 | 0 | |||||||||||||||||
79 | Lake Lucina Shopping Center | 0 | Cash | 125,000 | 3,712 | 200,000 | Cash | 0 | 0 | |||||||||||||||||
80 | Silver Bridge Plaza | 0 | Cash | 0 | $13,193 until April 2016; $6,607 thereafter until maturity | 550,000 | Cash | 0 | 0 | |||||||||||||||||
81 | Karen Gardens Apartment Corp. | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
82 | East Haven Self Storage | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
83 | Walgreens - Milwaukee | 0 | 0 | Springing | 0 | 0 | 0 |
A-1-19 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Mortgage Loan Number | Property Name | Replacement Reserve Cap ($) | Replacement Reserve Escrow - Cash or LoC | Replacement Reserve Escrow - LoC Counterparty | Upfront TI/LC Reserve ($) | Monthly TI/LC Reserve ($)(14) | TI/LC Reserve Cap ($)(14) | TI/LC Escrow - Cash or LoC | TI/LC Escrow - LoC Counterparty | Debt Service Escrow (Initial) ($) | Debt Service Escrow (Monthly) ($) | Debt Service Escrow - Cash or LoC | Debt Service Escrow - LoC Counterparty | |||||||||||||
84 | Haggen Food & Pharmacy | 0 | 0 | Springing | 0 | 0 | 0 | |||||||||||||||||||
85 | Sycamore Terrace | 9,805 | Cash | 0 | 1,173 | 0 | Cash | 0 | 0 | |||||||||||||||||
86 | Ramona Plaza Shopping Center | 29,844 | Cash | 0 | 1,788 | 65,000 | Cash | 0 | 0 | |||||||||||||||||
87 | All A/C Self Storage | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
88 | Pecue MHC | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
89 | Regency Park Owners Corp. | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
90 | Storaway Self Storage - Deltona II | 31,152 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
91 | Lakewood Place Shopping Center | 0 | Cash | 0 | 1,455 | 69,800 | Cash | 0 | 0 | |||||||||||||||||
92 | Hacienda Heights Apartments | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
93 | Nagle House, Inc. | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
94 | Walgreens - Warrensburg, MO | 0 | 0 | Springing | 0 | 0 | 0 | |||||||||||||||||||
95 | 230 Tenants Corporation | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
96 | Shackelford Center | 19,854 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
97 | De La Cruz Professional Center | 16,788 | Cash | 0 | 1,865 | 67,152 | Cash | 0 | 0 | |||||||||||||||||
98 | Folcroft Self Storage | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
99 | Storaway Self Storage - Palm Bay | 30,759 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
100 | Bowen Tower Apartments | 0 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
101 | 321 West 90th St. Owners Corp. | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
102 | West Friendship Shopping Center | 0 | Cash | 25,000 | 764 | 0 | Cash | 0 | 0 | |||||||||||||||||
103 | Crestview Self Storage | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
104 | Denn Owners Corporation | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
105 | Moundsville Plaza | 0 | Cash | 0 | $7,525 until April 2016; $3,775 thereafter | 400,000 | Cash | 0 | 0 | |||||||||||||||||
106 | Storaway Self Storage- Deltona I | 19,848 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
107 | Sedona Peak Apartments | 69,768 | Cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
108 | Sea Breeze Town Houses Owners, Inc. | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
109 | Willow Lake Shops | 0 | Cash | 0 | 4,320 | 15,000 | Cash | 0 | 0 | |||||||||||||||||
110 | Wickham Park Commons | 15,000 | Cash | 10,000 | 1,027 | 0 | Cash | 0 | 0 | |||||||||||||||||
111 | Crown Pointe Plaza | 0 | Cash | 75,000 | 2,432 | 50,000 | Cash | 0 | 0 | |||||||||||||||||
112 | Hartsdale Executive House, Inc. | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
113 | 25 Chapel Corp. | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
114 | Market Place Village | 0 | Cash | 100,000 | 3,167 | 150,000 | Cash | 0 | 0 | |||||||||||||||||
115 | Kingstowne Shops | 25,000 | Cash | 50,000 | 1,576 | 100,000 | Cash | 0 | 0 | |||||||||||||||||
116 | 109-111 N. Broadway Apt. Corp. | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
117 | 40 Prospect Park West Owners Corp. | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
118 | Shops of Orland Park | 10,000 | Cash | 50,000 | 1,390; Springing | 50,000 | Cash | 0 | 0 | |||||||||||||||||
119 | Victorville Retail Center | 0 | 150,000 | 1,304 | 150,000 | Cash | 0 | 0 | ||||||||||||||||||
120 | 6 West 20th St. Tenants Corp. | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
121 | 50-22 Owners Ltd. | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
122 | 585 McLean Owners, Inc. | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
123 | 12 West 17th St. Tenants’ Corp. | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
124 | Gillespie Field Business Park | 0 | Cash | 0 | 733 | 0 | Cash | 0 | 0 | |||||||||||||||||
125 | Waters at West End, Inc. | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
126 | Jones St. Owners Corporation | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
127 | Big Lots Plaza | 0 | Cash | 0 | 4,549 | 218,334 | Cash | 0 | 0 | |||||||||||||||||
128 | 30 Bond Street Owners Corp. | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
129 | 166 West 76th Apartment Corp. | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
130 | Hanna Shoppes | 17,946 | Cash | 0 | 778 | 50,000 | Cash | 0 | 0 | |||||||||||||||||
131 | Carroll Gardens Owners, Corp. | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
132 | 170 East 92nd Street Owners, Inc. | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
133 | 17 Warren Street Tenants Corporation | 0 | 0 | 0 | 0 | 0 | 0 |
A-1-20 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Mortgage Loan Number | Property Name | Other Escrow I Reserve Description | Other Escrow I (Initial) ($)(6)(15) | Other Escrow I (Monthly) ($)(16) | Other Escrow I Cap ($) | Other Escrow I Escrow - Cash or LoC | Other Escrow I - LoC Counterparty | |||||||
1 | Hutchinson Metro Center I | Visiting Nurse Reserve | 2,000,000 | 0 | 0 | Cash | ||||||||
2 | Cathedral Place | Executive Director Office/First Merit Reserves (TI, Architectural Allowance, Free Rent) | Executive Director Office: $607,703; First Merit: $576,320 | 0 | 0 | Cash | ||||||||
3 | 150 Royall Street | Gray, Gray & Gray TILC Reserve | 187,253 | 0 | 0 | Cash | ||||||||
4 | WPC Self Storage Portfolio VII | Amortization Reserve | 0 | Springing | 0 | |||||||||
4.01 | Extra Space Louisville KY | |||||||||||||
4.02 | Extra Space Las Vegas NV | |||||||||||||
4.03 | CubeSmart Joan Panama City Beach FL | |||||||||||||
4.04 | CubeSmart Tallahassee FL | |||||||||||||
4.05 | Extra Space Lady Lake FL | |||||||||||||
4.06 | CubeSmart Crystal Lake IL | |||||||||||||
4.07 | CubeSmart Hutchinson Panama City Beach FL | |||||||||||||
4.08 | Extra Space Lilburn GA | |||||||||||||
4.09 | Extra Space Stockbridge GA | |||||||||||||
5 | Queens’ MarketPlace | Tenant Specific TILC Reserve | 688,807 | 0 | 0 | Cash | ||||||||
6 | El Sol Brillante and Laguna Del Sol Apartments | Existing Casualty Funds | 854,695 | 0 | 0 | Cash | ||||||||
6.01 | Laguna Del Sol Apartments | |||||||||||||
6.02 | El Sol Brillante Apartments | |||||||||||||
7 | Country Club Center | Non-Renewing Tenant TILC Reserve | 0 | Springing | 0 | |||||||||
8 | Parkway Crossing East Shopping Center | Office Depot Reserve | 200,000 | 0 | 0 | Cash | ||||||||
9 | Olmsted Plaza Shopping Center | 0 | 0 | 0 | ||||||||||
10 | Hall Office Park | 0 | 0 | 0 | ||||||||||
11 | Dulles North Corporate Parks | Asurion TILC Reserve | 381,900 | 0 | 0 | Cash | ||||||||
11.01 | Dulles North Corporate Park 5 | |||||||||||||
11.02 | Dulles North Corporate Park 2 | |||||||||||||
12 | Coastal Village Apartments | 0 | 0 | 0 | ||||||||||
13 | Foothills Park Place | Tenant Specific TILC Reserve | 257,827 | 0 | 0 | Cash | ||||||||
14 | Smiths Medical | Brocade Free Rent Funds (775,512); Stanley TI Allowance Funds(318,616.59); Parking Expansion Funds (245,037) | 1,339,166 | 0 | 0 | Cash | ||||||||
15 | Hunterstone Apartments | 0 | 0 | 0 | ||||||||||
16 | Magnolia Marketplace | 0 | 0 | 0 | ||||||||||
17 | Norfolk Commerce Park | Tenant TI/LC Reserves (ITT TI/LC: $600,000; Home Choice Partners TI: $17,050; Alion Science and Technology Corporation TI: $36,000.37) | 653,050 | 0 | 0 | Cash | ||||||||
18 | Summer Bend Apartments | 0 | 0 | 0 | ||||||||||
19 | Baywoods of Annapolis | 0 | 0 | 0 | ||||||||||
20 | Rock Hill Hampton Inn | PIP Reserve | 1,598,350 | Springing | 0 | Cash | ||||||||
21 | Louisville Plaza | 0 | 0 | 0 | ||||||||||
22 | Marquis Place | 0 | 0 | 0 | ||||||||||
23 | Riverside Technology Park A & B | Tenant Specific Reserve | 692,708 | 0 | 0 | Cash | ||||||||
24 | Maricopa Fiesta | Native Grill Funds | 100,000 | 0 | 0 | Cash | ||||||||
25 | Dunwoody Place | Roof Replacement Reserve | 235,000 | 0 | 0 | Cash | ||||||||
26 | Jackson Square Apartments | 0 | 0 | 0 | ||||||||||
27 | Shops at Doral | Critical Tenant TI/LC Funds | 0 | Springing | 0 | |||||||||
28 | Solano Apartments | Violations Work Reserve | 1,875 | 0 | 0 | Cash | ||||||||
29 | Riverchase Apartments | 0 | 0 | 0 | ||||||||||
30 | Old Mills | 0 | 0 | 0 | ||||||||||
31 | Ozinus Realty Property Portfolio | 0 | 0 | 0 | ||||||||||
31.01 | Shiloh Crossing | |||||||||||||
31.02 | Texas Star | |||||||||||||
31.03 | Pitney Bowes | |||||||||||||
31.04 | Towne Crest Village | |||||||||||||
31.05 | Eagle Plaza | |||||||||||||
31.06 | Palmetto | |||||||||||||
31.07 | Hamlin | |||||||||||||
32 | Brickyard Square | Outparcel Holdback Funds (2,230,000); Free Rent Funds (319,000) | 2,549,000 | 0 | 0 | Cash | ||||||||
33 | Dos Santos Apartments | 0 | 0 | 0 | ||||||||||
34 | Villa Bella | 0 | 0 | 0 | ||||||||||
35 | Bayview Office Building | 0 | 0 | 0 | ||||||||||
36 | Casa Nube | 0 | 0 | 0 | ||||||||||
37 | Homewood Suites - Tallahassee | PIP Reserve | 1,500,000 | Springing | 0 | Cash | ||||||||
38 | San Mateo Apartments | 0 | 0 | 0 | ||||||||||
39 | Brittany Bay II | 0 | 0 | 0 | ||||||||||
40 | Nexus Town Center | 0 | 0 | 0 | ||||||||||
41 | Cathedral Place - Parking | 0 | 0 | 0 | ||||||||||
42 | Indiana Village | 0 | 0 | 0 | ||||||||||
43 | Fahrens Park Plaza | Fitness Evolution Reserve | 20,000 | 0 | 0 | Cash | ||||||||
44 | Causeway Corporate Centre | Additional Tenant Reserves | 1,000,000 | 0 | 0 | Cash | ||||||||
45 | TownePlace Suites St. George by Marriott | PIP/Required Repairs Reserve | 25,000 | Springing | 0 | Cash | ||||||||
46 | IRG - Ellsworth Bailey Saratoga | Tenant Specific TILC Reserve | 268,155 | 0 | 0 | Cash | ||||||||
46.01 | Saratoga II | |||||||||||||
46.02 | Saratoga I | |||||||||||||
46.03 | Ellsworth Bailey Lordstown | |||||||||||||
47 | 39-60 54th Street Owners, Inc. | 0 | 0 | 0 | ||||||||||
48 | Courtyard by Marriott - Shawnee | Seasonality Reserve | 10,000 | 10,000 | 60,000 | Cash | ||||||||
49 | Athens Gate Apartments | 0 | 0 | 0 | ||||||||||
50 | Sand Pebble Apartments | 0 | 0 | 0 | ||||||||||
51 | Trojan Storage of Oxnard | 0 | 0 | 0 | ||||||||||
52 | CVS - Lynn, MA | 0 | 0 | 0 | ||||||||||
53 | Gilbert Crossing | 0 | 0 | 0 | ||||||||||
54 | 1321 Harbor Bay Parkway | 0 | 0 | 0 | ||||||||||
55 | Casa Cruz | 0 | 0 | 0 | ||||||||||
56 | Best Western Plus - Windsor Gardens | Franchise Membership Funds | 79,386 | 6,616; Springing | 0 | Cash | ||||||||
57 | Oak Tree Plaza | Critical Tenant TI/LC Funds | 0 | Springing | 0 | |||||||||
58 | Peppertree Lane Apartments | 0 | 0 | 0 | ||||||||||
59 | 8211 Town Center Drive | Mariner Finance Reserve | 221,357 | 0 | 0 | Cash | ||||||||
60 | Staybridge Suites Indianapolis Airport | PIP Reserve Funds | 0 | Springing | 0 | |||||||||
61 | Austin Heights Shopping Center | 0 | 0 | 0 | ||||||||||
62 | Walgreens - Duncanville, TX | 0 | 0 | 0 | ||||||||||
63 | Trojan Storage of Roseville | 0 | 0 | 0 | ||||||||||
64 | Lakeside Plaza | Rent Concession Reserve | 19,917 | 0 | 0 | Cash | ||||||||
65 | Green Acres MHP | 0 | 0 | 0 | ||||||||||
66 | Mendicino Green Apartment Corp. | 0 | 0 | 0 | ||||||||||
67 | Walgreens - Richmond Heights | Critical Tenant TI/LC Funds | 0 | Springing | 0 | |||||||||
68 | Rivertown Center | Massage Green Spa TILC Reserve | 273,000 | 0 | 0 | Cash | ||||||||
69 | Bristol House, Inc. | 0 | 0 | 0 | ||||||||||
70 | Storaway Self Storage - Nashville | 0 | 0 | 0 | ||||||||||
71 | Bella Luna / San Lucas | 0 | 0 | 0 | ||||||||||
72 | Seacoast Self Storage | 0 | 0 | 0 | ||||||||||
73 | 230 Garth Road Owners, Inc. | 0 | 0 | 0 | ||||||||||
74 | Comfort Suites - Near the Galleria | PIP Reserve Funds (200,000); Incentive Promissory Note Reserve Funds (101,000) | 301,000 | 0 | 0 | Cash | ||||||||
75 | Sandstone Apartments | 0 | 0 | 0 | ||||||||||
76 | Tieton Village | 0 | 0 | 0 | ||||||||||
77 | Highland Terrace Housing Development Fund Corporation | Collateral Security Agreement for Maintenance Arrears | 50,000 | 0 | 0 | Cash | ||||||||
78 | Cooperstown Commons Shopping Center | Critical Tenant TI/LC Funds | 0 | Springing | 97,425 | |||||||||
79 | Lake Lucina Shopping Center | 0 | 0 | 0 | ||||||||||
80 | Silver Bridge Plaza | 0 | 0 | 0 | ||||||||||
81 | Karen Gardens Apartment Corp. | Collateral Security Agreement for Litigation | 200,000 | 0 | 0 | Cash | ||||||||
82 | East Haven Self Storage | 0 | 0 | 0 | ||||||||||
83 | Walgreens - Milwaukee | 0 | 0 | 0 |
A-1-21 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Mortgage Loan Number | Property Name | Other Escrow I Reserve Description | Other Escrow I (Initial) ($)(6)(15) | Other Escrow I (Monthly) ($)(16) | Other Escrow I Cap ($) | Other Escrow I Escrow - Cash or LoC | Other Escrow I - LoC Counterparty | |||||||
84 | Haggen Food & Pharmacy | 0 | 0 | 0 | ||||||||||
85 | Sycamore Terrace | 0 | 0 | 0 | ||||||||||
86 | Ramona Plaza Shopping Center | 0 | 0 | 0 | ||||||||||
87 | All A/C Self Storage | 0 | 0 | 0 | ||||||||||
88 | Pecue MHC | 0 | 0 | 0 | ||||||||||
89 | Regency Park Owners Corp. | 0 | 0 | 0 | ||||||||||
90 | Storaway Self Storage - Deltona II | 0 | 0 | 0 | ||||||||||
91 | Lakewood Place Shopping Center | 0 | 0 | 0 | ||||||||||
92 | Hacienda Heights Apartments | 0 | 0 | 0 | ||||||||||
93 | Nagle House, Inc. | Collateral Security Agreement for Capital Improvements | 2,000,000 | 0 | 0 | Cash | ||||||||
94 | Walgreens - Warrensburg, MO | 0 | 0 | 0 | ||||||||||
95 | 230 Tenants Corporation | Collateral Security Agreement for Capital Improvements | 600,000 | 0 | 0 | Cash | ||||||||
96 | Shackelford Center | Schnuck Markets Reserve | 0 | Springing | 0 | |||||||||
97 | De La Cruz Professional Center | Lee County Reserve | 165,000 | Springing | 0 | Cash | ||||||||
98 | Folcroft Self Storage | 0 | 0 | 0 | ||||||||||
99 | Storaway Self Storage - Palm Bay | 0 | 0 | 0 | ||||||||||
100 | Bowen Tower Apartments | 0 | 0 | 0 | ||||||||||
101 | 321 West 90th St. Owners Corp. | 0 | 0 | 0 | ||||||||||
102 | West Friendship Shopping Center | Façade Work Reserve | 226,554 | 0 | 0 | Cash | ||||||||
103 | Crestview Self Storage | 0 | 0 | 0 | ||||||||||
104 | Denn Owners Corporation | 0 | 0 | 0 | ||||||||||
105 | Moundsville Plaza | 0 | 0 | 0 | ||||||||||
106 | Storaway Self Storage- Deltona I | 0 | 0 | 0 | ||||||||||
107 | Sedona Peak Apartments | 0 | 0 | 0 | ||||||||||
108 | Sea Breeze Town Houses Owners, Inc. | Collateral Security Agreement for Capital Improvements | 300,000 | 0 | 0 | Cash | ||||||||
109 | Willow Lake Shops | 0 | 0 | 0 | ||||||||||
110 | Wickham Park Commons | Tenant Specific Reserve | 176,073 | 0 | 0 | Cash | ||||||||
111 | Crown Pointe Plaza | 0 | 0 | 0 | ||||||||||
112 | Hartsdale Executive House, Inc. | 0 | 0 | 0 | ||||||||||
113 | 25 Chapel Corp. | 0 | 0 | 0 | ||||||||||
114 | Market Place Village | 0 | 0 | 0 | ||||||||||
115 | Kingstowne Shops | 0 | 0 | 0 | ||||||||||
116 | 109-111 N. Broadway Apt. Corp. | 0 | 0 | 0 | ||||||||||
117 | 40 Prospect Park West Owners Corp. | 0 | 0 | 0 | ||||||||||
118 | Shops of Orland Park | 0 | 0 | 0 | ||||||||||
119 | Victorville Retail Center | 0 | 0 | 0 | ||||||||||
120 | 6 West 20th St. Tenants Corp. | 0 | 0 | 0 | ||||||||||
121 | 50-22 Owners Ltd. | 0 | 0 | 0 | ||||||||||
122 | 585 McLean Owners, Inc. | 0 | 0 | 0 | ||||||||||
123 | 12 West 17th St. Tenants’ Corp. | 0 | 0 | 0 | ||||||||||
124 | Gillespie Field Business Park | Ground Rent Reserve | 2,609 | 2,609 | 0 | Cash | ||||||||
125 | Waters at West End, Inc. | 0 | 0 | 0 | ||||||||||
126 | Jones St. Owners Corporation | Collateral Security Agreement for Capital Improvements | 400,000 | 0 | 0 | Cash | ||||||||
127 | Big Lots Plaza | Big Lots Reserve | 0 | 5,227 | 25,000 | Cash | ||||||||
128 | 30 Bond Street Owners Corp. | 0 | 0 | 0 | ||||||||||
129 | 166 West 76th Apartment Corp. | 0 | 0 | 0 | ||||||||||
130 | Hanna Shoppes | 0 | 0 | 0 | ||||||||||
131 | Carroll Gardens Owners, Corp. | 0 | 0 | 0 | ||||||||||
132 | 170 East 92nd Street Owners, Inc. | 0 | 0 | 0 | ||||||||||
133 | 17 Warren Street Tenants Corporation | 0 | 0 | 0 |
A-1-22 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Mortgage Loan Number | Property Name | Other Escrow II Reserve Description | Other Escrow II (Initial) ($) | Other Escrow II (Monthly) ($) | Other Escrow II Cap ($) | Other Escrow II Escrow - Cash or LoC | Other Escrow II - LoC Counterparty | Holdback | Ownership Interest(17) | Ground Lease Initial Expiration Date | Annual Ground Rent Payment | |||||||||||
1 | Hutchinson Metro Center I | 0 | 0 | 0 | Fee | |||||||||||||||||
2 | Cathedral Place | Deloitte Office TI Reserve | 2,312,269 | 0 | 0 | Cash | Fee | |||||||||||||||
3 | 150 Royall Street | 0 | 0 | 0 | Fee | |||||||||||||||||
4 | WPC Self Storage Portfolio VII | 0 | 0 | 0 | Fee | |||||||||||||||||
4.01 | Extra Space Louisville KY | Fee | ||||||||||||||||||||
4.02 | Extra Space Las Vegas NV | Fee | ||||||||||||||||||||
4.03 | CubeSmart Joan Panama City Beach FL | Fee | ||||||||||||||||||||
4.04 | CubeSmart Tallahassee FL | Fee | ||||||||||||||||||||
4.05 | Extra Space Lady Lake FL | Fee | ||||||||||||||||||||
4.06 | CubeSmart Crystal Lake IL | Fee | ||||||||||||||||||||
4.07 | CubeSmart Hutchinson Panama City Beach FL | Fee | ||||||||||||||||||||
4.08 | Extra Space Lilburn GA | Fee | ||||||||||||||||||||
4.09 | Extra Space Stockbridge GA | Fee | ||||||||||||||||||||
5 | Queens’ MarketPlace | Rent Concession Reserve | 164,280 | 0 | 0 | Cash | Fee | |||||||||||||||
6 | El Sol Brillante and Laguna Del Sol Apartments | 0 | 0 | 0 | Fee | |||||||||||||||||
6.01 | Laguna Del Sol Apartments | Fee | ||||||||||||||||||||
6.02 | El Sol Brillante Apartments | Fee | ||||||||||||||||||||
7 | Country Club Center | 0 | 0 | 0 | Fee | |||||||||||||||||
8 | Parkway Crossing East Shopping Center | 0 | 0 | 0 | Fee | |||||||||||||||||
9 | Olmsted Plaza Shopping Center | 0 | 0 | 0 | Fee | |||||||||||||||||
10 | Hall Office Park | 0 | 0 | 0 | Fee | |||||||||||||||||
11 | Dulles North Corporate Parks | NTT Letter of Credit | 0 | Springing | 0 | Fee | ||||||||||||||||
11.01 | Dulles North Corporate Park 5 | Fee | ||||||||||||||||||||
11.02 | Dulles North Corporate Park 2 | Fee | ||||||||||||||||||||
12 | Coastal Village Apartments | 0 | 0 | 0 | Fee | |||||||||||||||||
13 | Foothills Park Place | Rent Concession Reserve | 49,724 | 0 | 0 | Cash | Fee | |||||||||||||||
14 | Smiths Medical | Critical Tenant TI/LC Funds | 0 | Springing | 0 | Fee | ||||||||||||||||
15 | Hunterstone Apartments | 0 | 0 | 0 | Fee | |||||||||||||||||
16 | Magnolia Marketplace | 0 | 0 | 0 | Fee | |||||||||||||||||
17 | Norfolk Commerce Park | Tenant Rent Reserves (ITT Rent: $1,000,000; GSA Rent Credit: $50,340) | 1,050,340 | 0 | 0 | Cash | Fee | |||||||||||||||
18 | Summer Bend Apartments | 0 | 0 | 0 | Fee | |||||||||||||||||
19 | Baywoods of Annapolis | 0 | 0 | 0 | Fee | |||||||||||||||||
20 | Rock Hill Hampton Inn | 0 | 0 | 0 | Fee | |||||||||||||||||
21 | Louisville Plaza | 0 | 0 | 0 | Fee | |||||||||||||||||
22 | Marquis Place | 0 | 0 | 0 | Fee | |||||||||||||||||
23 | Riverside Technology Park A & B | Rent Concession Reserve | 70,807 | 0 | 0 | Cash | Fee | |||||||||||||||
24 | Maricopa Fiesta | Critical Tenant TI/LC Funds | 0 | Springing | 0 | Fee | ||||||||||||||||
25 | Dunwoody Place | 0 | 0 | 0 | Fee | |||||||||||||||||
26 | Jackson Square Apartments | 0 | 0 | 0 | Fee | |||||||||||||||||
27 | Shops at Doral | 0 | 0 | 0 | Fee | |||||||||||||||||
28 | Solano Apartments | 0 | 0 | 0 | Fee | |||||||||||||||||
29 | Riverchase Apartments | 0 | 0 | 0 | Fee | |||||||||||||||||
30 | Old Mills | 0 | 0 | 0 | Fee | |||||||||||||||||
31 | Ozinus Realty Property Portfolio | 0 | 0 | 0 | Fee | |||||||||||||||||
31.01 | Shiloh Crossing | Fee | ||||||||||||||||||||
31.02 | Texas Star | Fee | ||||||||||||||||||||
31.03 | Pitney Bowes | Fee | ||||||||||||||||||||
31.04 | Towne Crest Village | Fee | ||||||||||||||||||||
31.05 | Eagle Plaza | Fee | ||||||||||||||||||||
31.06 | Palmetto | Fee | ||||||||||||||||||||
31.07 | Hamlin | Fee | ||||||||||||||||||||
32 | Brickyard Square | Critical Tenant TI/LC Funds | 0 | Springing | 0 | Fee | ||||||||||||||||
33 | Dos Santos Apartments | 0 | 0 | 0 | Fee | |||||||||||||||||
34 | Villa Bella | 0 | 0 | 0 | Fee | |||||||||||||||||
35 | Bayview Office Building | 0 | 0 | 0 | Fee | |||||||||||||||||
36 | Casa Nube | 0 | 0 | 0 | Fee | |||||||||||||||||
37 | Homewood Suites - Tallahassee | 0 | 0 | 0 | Fee | |||||||||||||||||
38 | San Mateo Apartments | 0 | 0 | 0 | Fee | |||||||||||||||||
39 | Brittany Bay II | 0 | 0 | 0 | Fee | |||||||||||||||||
40 | Nexus Town Center | 0 | 0 | 0 | Fee | |||||||||||||||||
41 | Cathedral Place - Parking | 0 | 0 | 0 | Fee | |||||||||||||||||
42 | Indiana Village | 0 | 0 | 0 | Fee | |||||||||||||||||
43 | Fahrens Park Plaza | 0 | 0 | 0 | Fee | |||||||||||||||||
44 | Causeway Corporate Centre | 0 | 0 | 0 | Fee | |||||||||||||||||
45 | TownePlace Suites St. George by Marriott | Seasonality Reserve | 62,000 | Springing | 0 | Cash | Fee | |||||||||||||||
46 | IRG - Ellsworth Bailey Saratoga | 0 | 0 | 0 | Fee | |||||||||||||||||
46.01 | Saratoga II | Fee | ||||||||||||||||||||
46.02 | Saratoga I | Fee | ||||||||||||||||||||
46.03 | Ellsworth Bailey Lordstown | Fee | ||||||||||||||||||||
47 | 39-60 54th Street Owners, Inc. | 0 | 0 | 0 | Fee | |||||||||||||||||
48 | Courtyard by Marriott - Shawnee | 0 | 0 | 0 | Fee | |||||||||||||||||
49 | Athens Gate Apartments | 0 | 0 | 0 | Fee | |||||||||||||||||
50 | Sand Pebble Apartments | 0 | 0 | 0 | Fee | |||||||||||||||||
51 | Trojan Storage of Oxnard | 0 | 0 | 0 | Fee | |||||||||||||||||
52 | CVS - Lynn, MA | 0 | 0 | 0 | Fee | |||||||||||||||||
53 | Gilbert Crossing | 0 | 0 | 0 | Fee | |||||||||||||||||
54 | 1321 Harbor Bay Parkway | 0 | 0 | 0 | Fee | |||||||||||||||||
55 | Casa Cruz | 0 | 0 | 0 | Fee | |||||||||||||||||
56 | Best Western Plus - Windsor Gardens | Seasonality Funds | 116,985 | Springing | 196,509 | Cash | Fee | |||||||||||||||
57 | Oak Tree Plaza | 0 | 0 | 0 | Fee | |||||||||||||||||
58 | Peppertree Lane Apartments | 0 | 0 | 0 | Fee | |||||||||||||||||
59 | 8211 Town Center Drive | 0 | 0 | 0 | Fee | |||||||||||||||||
60 | Staybridge Suites Indianapolis Airport | 0 | 0 | 0 | Fee | |||||||||||||||||
61 | Austin Heights Shopping Center | 0 | 0 | 0 | Fee | |||||||||||||||||
62 | Walgreens - Duncanville, TX | 0 | 0 | 0 | Fee | |||||||||||||||||
63 | Trojan Storage of Roseville | 0 | 0 | 0 | Fee | |||||||||||||||||
64 | Lakeside Plaza | 0 | 0 | 0 | Fee | |||||||||||||||||
65 | Green Acres MHP | 0 | 0 | 0 | Fee | |||||||||||||||||
66 | Mendicino Green Apartment Corp. | 0 | 0 | 0 | Fee | |||||||||||||||||
67 | Walgreens - Richmond Heights | 0 | 0 | 0 | Fee | |||||||||||||||||
68 | Rivertown Center | Chicago Title Free Rent Reserve | 11,392 | 0 | 0 | Cash | Fee | |||||||||||||||
69 | Bristol House, Inc. | 0 | 0 | 0 | Fee | |||||||||||||||||
70 | Storaway Self Storage - Nashville | 0 | 0 | 0 | Fee | |||||||||||||||||
71 | Bella Luna / San Lucas | 0 | 0 | 0 | Fee | |||||||||||||||||
72 | Seacoast Self Storage | 0 | 0 | 0 | Fee | |||||||||||||||||
73 | 230 Garth Road Owners, Inc. | 0 | 0 | 0 | Fee | |||||||||||||||||
74 | Comfort Suites - Near the Galleria | Contemplated Building Expansion Funds | 0 | Springing | 0 | Fee | ||||||||||||||||
75 | Sandstone Apartments | 0 | 0 | 0 | Fee | |||||||||||||||||
76 | Tieton Village | 0 | 0 | 0 | Fee | |||||||||||||||||
77 | Highland Terrace Housing Development Fund Corporation | 0 | 0 | 0 | Fee | |||||||||||||||||
78 | Cooperstown Commons Shopping Center | 0 | 0 | 0 | Fee | |||||||||||||||||
79 | Lake Lucina Shopping Center | 0 | 0 | 0 | Fee | |||||||||||||||||
80 | Silver Bridge Plaza | 0 | 0 | 0 | Fee | |||||||||||||||||
81 | Karen Gardens Apartment Corp. | Collateral Security Agreement for Maintenance Arrears | 50,000 | 0 | 0 | Cash | Fee | |||||||||||||||
82 | East Haven Self Storage | 0 | 0 | 0 | Fee | |||||||||||||||||
83 | Walgreens - Milwaukee | 0 | 0 | 0 | Fee |
A-1-23 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Mortgage Loan Number | Property Name | Other Escrow II Reserve Description | Other Escrow II (Initial) ($) | Other Escrow II (Monthly) ($) | Other Escrow II Cap ($) | Other Escrow II Escrow - Cash or LoC | Other Escrow II - LoC Counterparty | Holdback | Ownership Interest(17) | Ground Lease Initial Expiration Date | Annual Ground Rent Payment | |||||||||||
84 | Haggen Food & Pharmacy | 0 | 0 | 0 | Fee | |||||||||||||||||
85 | Sycamore Terrace | 0 | 0 | 0 | Leasehold | Shevchuk: 6/30/2105; Martin: 9/5/2105 | Shevchuk: $75,000; Martin: $10,528 | |||||||||||||||
86 | Ramona Plaza Shopping Center | 0 | 0 | 0 | Fee | |||||||||||||||||
87 | All A/C Self Storage | 0 | 0 | 0 | Fee | |||||||||||||||||
88 | Pecue MHC | 0 | 0 | 0 | Fee | |||||||||||||||||
89 | Regency Park Owners Corp. | 0 | 0 | 0 | Fee | |||||||||||||||||
90 | Storaway Self Storage - Deltona II | 0 | 0 | 0 | Fee | |||||||||||||||||
91 | Lakewood Place Shopping Center | 0 | 0 | 0 | Fee | |||||||||||||||||
92 | Hacienda Heights Apartments | 0 | 0 | 0 | Fee | |||||||||||||||||
93 | Nagle House, Inc. | 0 | 0 | 0 | Fee | |||||||||||||||||
94 | Walgreens - Warrensburg, MO | 0 | 0 | 0 | Fee | |||||||||||||||||
95 | 230 Tenants Corporation | 0 | 0 | 0 | Fee | |||||||||||||||||
96 | Shackelford Center | 0 | 0 | 0 | Fee | |||||||||||||||||
97 | De La Cruz Professional Center | Max’d Out Reserve | 0 | Springing | 0 | Fee | ||||||||||||||||
98 | Folcroft Self Storage | 0 | 0 | 0 | Fee | |||||||||||||||||
99 | Storaway Self Storage - Palm Bay | 0 | 0 | 0 | Fee | |||||||||||||||||
100 | Bowen Tower Apartments | 0 | 0 | 0 | Fee | |||||||||||||||||
101 | 321 West 90th St. Owners Corp. | 0 | 0 | 0 | Fee | |||||||||||||||||
102 | West Friendship Shopping Center | Collateral Security Agreement for Capital Improvements | 155,000 | 0 | 0 | Cash | Fee | |||||||||||||||
103 | Crestview Self Storage | 0 | 0 | 0 | Fee | |||||||||||||||||
104 | Denn Owners Corporation | 0 | 0 | 0 | Fee | |||||||||||||||||
105 | Moundsville Plaza | 0 | 0 | 0 | Fee | |||||||||||||||||
106 | Storaway Self Storage- Deltona I | 0 | 0 | 0 | Fee | |||||||||||||||||
107 | Sedona Peak Apartments | 0 | 0 | 0 | Fee | |||||||||||||||||
108 | Sea Breeze Town Houses Owners, Inc. | 0 | 0 | 0 | Fee | |||||||||||||||||
109 | Willow Lake Shops | 0 | 0 | 0 | Fee | |||||||||||||||||
110 | Wickham Park Commons | 0 | 0 | 0 | Fee | |||||||||||||||||
111 | Crown Pointe Plaza | 0 | 0 | 0 | Fee | |||||||||||||||||
112 | Hartsdale Executive House, Inc. | 0 | 0 | 0 | Fee | |||||||||||||||||
113 | 25 Chapel Corp. | 0 | 0 | 0 | Fee | |||||||||||||||||
114 | Market Place Village | 0 | 0 | 0 | Fee | |||||||||||||||||
115 | Kingstowne Shops | 0 | 0 | 0 | Fee | |||||||||||||||||
116 | 109-111 N. Broadway Apt. Corp. | 0 | 0 | 0 | Fee | |||||||||||||||||
117 | 40 Prospect Park West Owners Corp. | 0 | 0 | 0 | Fee | |||||||||||||||||
118 | Shops of Orland Park | 0 | 0 | 0 | Fee | |||||||||||||||||
119 | Victorville Retail Center | 0 | 0 | 0 | Fee | |||||||||||||||||
120 | 6 West 20th St. Tenants Corp. | 0 | 0 | 0 | Fee | |||||||||||||||||
121 | 50-22 Owners Ltd. | 0 | 0 | 0 | Fee | |||||||||||||||||
122 | 585 McLean Owners, Inc. | 0 | 0 | 0 | Fee | |||||||||||||||||
123 | 12 West 17th St. Tenants’ Corp. | 0 | 0 | 0 | Fee | |||||||||||||||||
124 | Gillespie Field Business Park | 0 | 0 | 0 | Leasehold | 7/22/2053 | $31,308 | |||||||||||||||
125 | Waters at West End, Inc. | 0 | 0 | 0 | Fee | |||||||||||||||||
126 | Jones St. Owners Corporation | 0 | 0 | 0 | Fee | |||||||||||||||||
127 | Big Lots Plaza | 0 | 0 | 0 | Fee | |||||||||||||||||
128 | 30 Bond Street Owners Corp. | 0 | 0 | 0 | Fee | |||||||||||||||||
129 | 166 West 76th Apartment Corp. | 0 | 0 | 0 | Fee | |||||||||||||||||
130 | Hanna Shoppes | 0 | 0 | 0 | Fee | |||||||||||||||||
131 | Carroll Gardens Owners, Corp. | 0 | 0 | 0 | Fee | |||||||||||||||||
132 | 170 East 92nd Street Owners, Inc. | 0 | 0 | 0 | Fee | |||||||||||||||||
133 | 17 Warren Street Tenants Corporation | 0 | 0 | 0 | Fee |
A-1-24 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Mortgage Loan Number | Property Name | Annual Ground Rent Increases | Lockbox | Whole Loan Cut-off Date Balance ($) | Whole Loan Debt Service ($) | Subordinate Secured Debt Original Balance ($) | Subordinate Secured Debt Cut-off Date Balance ($) | Whole Loan U/W NOI DSCR (x) | Whole Loan U/W NCF DSCR (x) | |||||||||
1 | Hutchinson Metro Center I | Hard/Upfront Cash Management | ||||||||||||||||
2 | Cathedral Place | Hard/Springing Cash Management | ||||||||||||||||
3 | 150 Royall Street | Soft/Springing Cash Management | ||||||||||||||||
4 | WPC Self Storage Portfolio VII | Springing (Without Established Account) | ||||||||||||||||
4.01 | Extra Space Louisville KY | |||||||||||||||||
4.02 | Extra Space Las Vegas NV | |||||||||||||||||
4.03 | CubeSmart Joan Panama City Beach FL | |||||||||||||||||
4.04 | CubeSmart Tallahassee FL | |||||||||||||||||
4.05 | Extra Space Lady Lake FL | |||||||||||||||||
4.06 | CubeSmart Crystal Lake IL | |||||||||||||||||
4.07 | CubeSmart Hutchinson Panama City Beach FL | |||||||||||||||||
4.08 | Extra Space Lilburn GA | |||||||||||||||||
4.09 | Extra Space Stockbridge GA | |||||||||||||||||
5 | Queens’ MarketPlace | Springing (Without Established Account) | ||||||||||||||||
6 | El Sol Brillante and Laguna Del Sol Apartments | Springing (Without Established Account) | ||||||||||||||||
6.01 | Laguna Del Sol Apartments | |||||||||||||||||
6.02 | El Sol Brillante Apartments | |||||||||||||||||
7 | Country Club Center | Soft/Springing Cash Management | ||||||||||||||||
8 | Parkway Crossing East Shopping Center | Springing (Without Established Account) | ||||||||||||||||
9 | Olmsted Plaza Shopping Center | Hard/Springing Cash Management | ||||||||||||||||
10 | Hall Office Park | Soft/Springing Cash Management | ||||||||||||||||
11 | Dulles North Corporate Parks | Hard/Springing Cash Management | ||||||||||||||||
11.01 | Dulles North Corporate Park 5 | |||||||||||||||||
11.02 | Dulles North Corporate Park 2 | |||||||||||||||||
12 | Coastal Village Apartments | Soft/Springing Cash Management | ||||||||||||||||
13 | Foothills Park Place | Springing (Without Established Account) | ||||||||||||||||
14 | Smiths Medical | Springing (Without Established Account) | ||||||||||||||||
15 | Hunterstone Apartments | Springing (Without Established Account) | ||||||||||||||||
16 | Magnolia Marketplace | Hard/Springing Cash Management | 19,778,628 | 92,789 | 892,920 | 892,920 | 1.32 | 1.26 | ||||||||||
17 | Norfolk Commerce Park | Soft/Springing Cash Management | ||||||||||||||||
18 | Summer Bend Apartments | Soft/Springing Cash Management | ||||||||||||||||
19 | Baywoods of Annapolis | None | 21,500,000 | 123,353 | 5,000,000 | 0 | 1.53 | 1.53 | ||||||||||
20 | Rock Hill Hampton Inn | Soft/Springing Cash Management | ||||||||||||||||
21 | Louisville Plaza | Springing (Without Established Account) | ||||||||||||||||
22 | Marquis Place | Springing (Without Established Account) | ||||||||||||||||
23 | Riverside Technology Park A & B | None | ||||||||||||||||
24 | Maricopa Fiesta | Springing (Without Established Account) | ||||||||||||||||
25 | Dunwoody Place | Soft/Springing Cash Management | ||||||||||||||||
26 | Jackson Square Apartments | Springing (Without Established Account) | ||||||||||||||||
27 | Shops at Doral | Springing (Without Established Account) | ||||||||||||||||
28 | Solano Apartments | Springing (Without Established Account) | ||||||||||||||||
29 | Riverchase Apartments | Springing (Without Established Account) | ||||||||||||||||
30 | Old Mills | Springing (Without Established Account) | ||||||||||||||||
31 | Ozinus Realty Property Portfolio | Hard/Springing Cash Management | ||||||||||||||||
31.01 | Shiloh Crossing | |||||||||||||||||
31.02 | Texas Star | |||||||||||||||||
31.03 | Pitney Bowes | |||||||||||||||||
31.04 | Towne Crest Village | |||||||||||||||||
31.05 | Eagle Plaza | |||||||||||||||||
31.06 | Palmetto | |||||||||||||||||
31.07 | Hamlin | |||||||||||||||||
32 | Brickyard Square | Hard/Springing Cash Management | ||||||||||||||||
33 | Dos Santos Apartments | Springing (Without Established Account) | ||||||||||||||||
34 | Villa Bella | Springing (Without Established Account) | ||||||||||||||||
35 | Bayview Office Building | Springing (Without Established Account) | ||||||||||||||||
36 | Casa Nube | Springing (Without Established Account) | ||||||||||||||||
37 | Homewood Suites - Tallahassee | Hard/Springing Cash Management | ||||||||||||||||
38 | San Mateo Apartments | Springing (Without Established Account) | ||||||||||||||||
39 | Brittany Bay II | Springing (Without Established Account) | ||||||||||||||||
40 | Nexus Town Center | Springing (Without Established Account) | ||||||||||||||||
41 | Cathedral Place - Parking | Soft/Springing Cash Management | ||||||||||||||||
42 | Indiana Village | Soft/Springing Cash Management | ||||||||||||||||
43 | Fahrens Park Plaza | Springing (Without Established Account) | ||||||||||||||||
44 | Causeway Corporate Centre | Springing (Without Established Account) | ||||||||||||||||
45 | TownePlace Suites St. George by Marriott | Springing (Without Established Account) | ||||||||||||||||
46 | IRG - Ellsworth Bailey Saratoga | Springing (Without Established Account) | ||||||||||||||||
46.01 | Saratoga II | |||||||||||||||||
46.02 | Saratoga I | |||||||||||||||||
46.03 | Ellsworth Bailey Lordstown | |||||||||||||||||
47 | 39-60 54th Street Owners, Inc. | None | 8,425,000 | 33,869 | 750,000 | 0 | 7.66 | 7.66 | ||||||||||
48 | Courtyard by Marriott - Shawnee | Springing (Without Established Account) | ||||||||||||||||
49 | Athens Gate Apartments | Springing (Without Established Account) | ||||||||||||||||
50 | Sand Pebble Apartments | Springing (Without Established Account) | ||||||||||||||||
51 | Trojan Storage of Oxnard | None | ||||||||||||||||
52 | CVS - Lynn, MA | Springing (Without Established Account) | ||||||||||||||||
53 | Gilbert Crossing | Soft/Springing Cash Management | ||||||||||||||||
54 | 1321 Harbor Bay Parkway | Springing (Without Established Account) | ||||||||||||||||
55 | Casa Cruz | Springing (Without Established Account) | ||||||||||||||||
56 | Best Western Plus - Windsor Gardens | Springing (Without Established Account) | ||||||||||||||||
57 | Oak Tree Plaza | Springing (Without Established Account) | ||||||||||||||||
58 | Peppertree Lane Apartments | Soft/Springing Cash Management | ||||||||||||||||
59 | 8211 Town Center Drive | Springing (Without Established Account) | ||||||||||||||||
60 | Staybridge Suites Indianapolis Airport | Hard/Springing Cash Management | ||||||||||||||||
61 | Austin Heights Shopping Center | Springing (Without Established Account) | ||||||||||||||||
62 | Walgreens - Duncanville, TX | Springing (Without Established Account) | ||||||||||||||||
63 | Trojan Storage of Roseville | None | ||||||||||||||||
64 | Lakeside Plaza | Soft/Springing Cash Management | ||||||||||||||||
65 | Green Acres MHP | None | ||||||||||||||||
66 | Mendicino Green Apartment Corp. | None | 5,545,400 | 21,370 | 250,000 | 0 | 4.12 | 4.12 | ||||||||||
67 | Walgreens - Richmond Heights | Springing (Without Established Account) | ||||||||||||||||
68 | Rivertown Center | Springing (Without Established Account) | ||||||||||||||||
69 | Bristol House, Inc. | None | ||||||||||||||||
70 | Storaway Self Storage - Nashville | None | ||||||||||||||||
71 | Bella Luna / San Lucas | Soft/Springing Cash Management | ||||||||||||||||
72 | Seacoast Self Storage | Springing (Without Established Account) | ||||||||||||||||
73 | 230 Garth Road Owners, Inc. | None | 4,808,765 | 27,718 | 750,000 | 265,650 | 13.18 | 13.18 | ||||||||||
74 | Comfort Suites - Near the Galleria | Springing (Without Established Account) | ||||||||||||||||
75 | Sandstone Apartments | Springing (Without Established Account) | ||||||||||||||||
76 | Tieton Village | Springing (Without Established Account) | ||||||||||||||||
77 | Highland Terrace Housing Development Fund Corporation | None | ||||||||||||||||
78 | Cooperstown Commons Shopping Center | Springing (Without Established Account) | ||||||||||||||||
79 | Lake Lucina Shopping Center | None | ||||||||||||||||
80 | Silver Bridge Plaza | Springing (Without Established Account) | ||||||||||||||||
81 | Karen Gardens Apartment Corp. | None | 4,150,000 | 18,299 | 500,000 | 0 | 3.10 | 3.10 | ||||||||||
82 | East Haven Self Storage | Springing (Without Established Account) | ||||||||||||||||
83 | Walgreens - Milwaukee | Springing (Without Established Account) |
A-1-25 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Mortgage Loan Number | Property Name | Annual Ground Rent Increases | Lockbox | Whole Loan Cut-off Date Balance ($) | Whole Loan Debt Service ($) | Subordinate Secured Debt Original Balance ($) | Subordinate Secured Debt Cut-off Date Balance ($) | Whole Loan U/W NOI DSCR (x) | Whole Loan U/W NCF DSCR (x) | |||||||||
84 | Haggen Food & Pharmacy | Springing (Without Established Account) | ||||||||||||||||
85 | Sycamore Terrace | 12% beginning on the 6th anniversary after the date of Lease Commencement and each fifth anniversary thereafter for the remainder of the term | Springing (Without Established Account) | |||||||||||||||
86 | Ramona Plaza Shopping Center | None | ||||||||||||||||
87 | All A/C Self Storage | Springing (Without Established Account) | ||||||||||||||||
88 | Pecue MHC | None | ||||||||||||||||
89 | Regency Park Owners Corp. | None | 3,600,000 | 15,912 | 500,000 | 0 | 4.14 | 4.14 | ||||||||||
90 | Storaway Self Storage - Deltona II | None | ||||||||||||||||
91 | Lakewood Place Shopping Center | Springing (Without Established Account) | ||||||||||||||||
92 | Hacienda Heights Apartments | None | ||||||||||||||||
93 | Nagle House, Inc. | None | 3,495,812 | 15,722 | 500,000 | 0 | 7.63 | 7.63 | ||||||||||
94 | Walgreens - Warrensburg, MO | Springing (Without Established Account) | ||||||||||||||||
95 | 230 Tenants Corporation | None | 3,400,000 | 10,488 | 500,000 | 0 | 7.40 | 7.40 | ||||||||||
96 | Shackelford Center | None | ||||||||||||||||
97 | De La Cruz Professional Center | Springing (Without Established Account) | ||||||||||||||||
98 | Folcroft Self Storage | Springing (Without Established Account) | ||||||||||||||||
99 | Storaway Self Storage - Palm Bay | None | ||||||||||||||||
100 | Bowen Tower Apartments | None | ||||||||||||||||
101 | 321 West 90th St. Owners Corp. | None | 3,400,000 | 15,306 | (A) 500,000; (B) 400,000 | (A) 0; (B) 400,000 | 9.05 | 9.05 | ||||||||||
102 | West Friendship Shopping Center | None | ||||||||||||||||
103 | Crestview Self Storage | None | ||||||||||||||||
104 | Denn Owners Corporation | None | 2,486,684 | 11,534 | 250,000 | 0 | 3.43 | 3.43 | ||||||||||
105 | Moundsville Plaza | Springing (Without Established Account) | ||||||||||||||||
106 | Storaway Self Storage- Deltona I | None | ||||||||||||||||
107 | Sedona Peak Apartments | Springing (Without Established Account) | ||||||||||||||||
108 | Sea Breeze Town Houses Owners, Inc. | None | 2,100,000 | 6,753 | 100,000 | 0 | 4.15 | 4.15 | ||||||||||
109 | Willow Lake Shops | None | ||||||||||||||||
110 | Wickham Park Commons | Springing (Without Established Account) | ||||||||||||||||
111 | Crown Pointe Plaza | None | ||||||||||||||||
112 | Hartsdale Executive House, Inc. | None | 2,150,000 | 9,623 | 350,000 | 0 | 8.93 | 8.93 | ||||||||||
113 | 25 Chapel Corp. | None | ||||||||||||||||
114 | Market Place Village | None | ||||||||||||||||
115 | Kingstowne Shops | None | ||||||||||||||||
116 | 109-111 N. Broadway Apt. Corp. | None | 2,117,987 | 9,329 | 500,000 | 0 | 5.10 | 5.10 | ||||||||||
117 | 40 Prospect Park West Owners Corp. | None | 2,097,686 | 9,040 | 500,000 | 0 | 15.87 | 15.87 | ||||||||||
118 | Shops of Orland Park | Springing (Without Established Account) | ||||||||||||||||
119 | Victorville Retail Center | None | ||||||||||||||||
120 | 6 West 20th St. Tenants Corp. | None | 1,997,853 | 8,656 | 500,000 | 0 | 17.22 | 17.22 | ||||||||||
121 | 50-22 Owners Ltd. | None | 1,996,129 | 7,704 | 500,000 | 0 | 5.82 | 5.82 | ||||||||||
122 | 585 McLean Owners, Inc. | None | 1,900,000 | 7,299 | 500,000 | 0 | 3.27 | 3.27 | ||||||||||
123 | 12 West 17th St. Tenants’ Corp. | None | 1,896,560 | 7,453 | 500,000 | 0 | 11.89 | 11.89 | ||||||||||
124 | Gillespie Field Business Park | Adjusted ever five years beginning 7/23/18 based on the inflation calculation in the lease | Springing (Without Established Account) | |||||||||||||||
125 | Waters at West End, Inc. | None | 1,721,493 | 7,502 | 500,000 | 0 | 5.67 | 5.67 | ||||||||||
126 | Jones St. Owners Corporation | None | ||||||||||||||||
127 | Big Lots Plaza | Springing (Without Established Account) | ||||||||||||||||
128 | 30 Bond Street Owners Corp. | None | ||||||||||||||||
129 | 166 West 76th Apartment Corp. | None | 1,596,839 | 6,904 | 500,000 | 0 | 11.24 | 11.24 | ||||||||||
130 | Hanna Shoppes | None | ||||||||||||||||
131 | Carroll Gardens Owners, Corp. | None | 1,250,000 | 5,593 | 250,000 | 0 | 3.78 | 3.78 | ||||||||||
132 | 170 East 92nd Street Owners, Inc. | None | 1,100,000 | 4,809 | 300,000 | 0 | 6.93 | 6.93 | ||||||||||
133 | 17 Warren Street Tenants Corporation | None |
A-1-26 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Mortgage Loan Number | Property Name | Whole Loan Cut-off Date LTV Ratio | Whole Loan Cut-off Date U/W NOI Debt Yield | Whole Loan Cut-off Date U/W NCF Debt Yield | Mezzanine Debt Cut-off Date Balance($) | Sponsor | Affiliated Sponsors | Mortgage Loan Number | ||||||||
1 | Hutchinson Metro Center I | Joseph Simone | 1 | |||||||||||||
2 | Cathedral Place | Joel Lee | Group 2 | 2 | ||||||||||||
3 | 150 Royall Street | Jay O. Hirsh; James S. Hughes | 3 | |||||||||||||
4 | WPC Self Storage Portfolio VII | Corporate Property Associates 18 - Global Incorporated | Group 1 | 4 | ||||||||||||
4.01 | Extra Space Louisville KY | 4.01 | ||||||||||||||
4.02 | Extra Space Las Vegas NV | 4.02 | ||||||||||||||
4.03 | CubeSmart Joan Panama City Beach FL | 4.03 | ||||||||||||||
4.04 | CubeSmart Tallahassee FL | 4.04 | ||||||||||||||
4.05 | Extra Space Lady Lake FL | 4.05 | ||||||||||||||
4.06 | CubeSmart Crystal Lake IL | 4.06 | ||||||||||||||
4.07 | CubeSmart Hutchinson Panama City Beach FL | 4.07 | ||||||||||||||
4.08 | Extra Space Lilburn GA | 4.08 | ||||||||||||||
4.09 | Extra Space Stockbridge GA | 4.09 | ||||||||||||||
5 | Queens’ MarketPlace | Waikoloa Development Co.; Seligman & Associates, Inc. | 5 | |||||||||||||
6 | El Sol Brillante and Laguna Del Sol Apartments | Arun Verma | 6 | |||||||||||||
6.01 | Laguna Del Sol Apartments | 6.01 | ||||||||||||||
6.02 | El Sol Brillante Apartments | 6.02 | ||||||||||||||
7 | Country Club Center | Jeffrey Soffer; Jacquelyn Soffer | 7 | |||||||||||||
8 | Parkway Crossing East Shopping Center | Thomas R. Green | 8 | |||||||||||||
9 | Olmsted Plaza Shopping Center | B&G Properties LP | 9 | |||||||||||||
10 | Hall Office Park | Craig Hall | 10 | |||||||||||||
11 | Dulles North Corporate Parks | B. F. Saul Real Estate Investment Trust | 11 | |||||||||||||
11.01 | Dulles North Corporate Park 5 | 11.01 | ||||||||||||||
11.02 | Dulles North Corporate Park 2 | 11.02 | ||||||||||||||
12 | Coastal Village Apartments | David Kirshenbaum; Chaim Munk; Shaul Kopelowitz | 12 | |||||||||||||
13 | Foothills Park Place | Ronald Hahn | 13 | |||||||||||||
14 | Smiths Medical | Corporate Property Associates 17 - Global Incorporated | Group 1 | 14 | ||||||||||||
15 | Hunterstone Apartments | Matthew A. Sharp; J. David Kelsey | Group 4 | 15 | ||||||||||||
16 | Magnolia Marketplace | 77.9% | 7.4% | 7.1% | Martin Mayer; George Townsend Underhill IV; Lewis W. Stirling III | 16 | ||||||||||
17 | Norfolk Commerce Park | Christopher K. Sadler; Stevens M. Sadler | 17 | |||||||||||||
18 | Summer Bend Apartments | Chowdary Yalamanchili | 18 | |||||||||||||
19 | Baywoods of Annapolis | 37.7% | 10.5% | 10.5% | 19 | |||||||||||
20 | Rock Hill Hampton Inn | Abbas K. Shikary; Fatema Shikary | 20 | |||||||||||||
21 | Louisville Plaza | E. Stanley Kroenke | 21 | |||||||||||||
22 | Marquis Place | Bryan E. Pivirotto; Bernard T. Reilly | Group 5 | 22 | ||||||||||||
23 | Riverside Technology Park A & B | Edward St. John, LLC | 23 | |||||||||||||
24 | Maricopa Fiesta | Edwin Joseph Parish | 24 | |||||||||||||
25 | Dunwoody Place | Mehmet A. Capin | Group 6 | 25 | ||||||||||||
26 | Jackson Square Apartments | Millennia Housing Development, Ltd. | 26 | |||||||||||||
27 | Shops at Doral | Albert J. Fraga | 27 | |||||||||||||
28 | Solano Apartments | Axiom Equity Investments | 28 | |||||||||||||
29 | Riverchase Apartments | Matthew A. Sharp; J. David Kelsey | Group 4 | 29 | ||||||||||||
30 | Old Mills | Ephraim Hasenfeld | 30 | |||||||||||||
31 | Ozinus Realty Property Portfolio | Ozinus Realty, LLC | 31 | |||||||||||||
31.01 | Shiloh Crossing | 31.01 | ||||||||||||||
31.02 | Texas Star | 31.02 | ||||||||||||||
31.03 | Pitney Bowes | 31.03 | ||||||||||||||
31.04 | Towne Crest Village | 31.04 | ||||||||||||||
31.05 | Eagle Plaza | 31.05 | ||||||||||||||
31.06 | Palmetto | 31.06 | ||||||||||||||
31.07 | Hamlin | 31.07 | ||||||||||||||
32 | Brickyard Square | Neal Shalom; Joshua Levy | 32 | |||||||||||||
33 | Dos Santos Apartments | Richard Aguilar | Group 3 | 33 | ||||||||||||
34 | Villa Bella | Angelo Grillo | 34 | |||||||||||||
35 | Bayview Office Building | Moshe Popack; Joseph Popack | 35 | |||||||||||||
36 | Casa Nube | Harry Shani; Jaikishin Bhagia | 36 | |||||||||||||
37 | Homewood Suites - Tallahassee | Richard J. Spillett; Jacqueline W. Spillett; Kelley D. Slay; Kelly S. Slay | 37 | |||||||||||||
38 | San Mateo Apartments | Richard Aguilar | Group 3 | 38 | ||||||||||||
39 | Brittany Bay II | Alan Ginsburg | 39 | |||||||||||||
40 | Nexus Town Center | Leonard Hortick | 40 | |||||||||||||
41 | Cathedral Place - Parking | Joel Lee | Group 2 | 41 | ||||||||||||
42 | Indiana Village | Harry Bookey; Michael Rubin | 42 | |||||||||||||
43 | Fahrens Park Plaza | Louis J. Steiner | 43 | |||||||||||||
44 | Causeway Corporate Centre | John C. Halliday III; Gerald T. Herrod | 44 | |||||||||||||
45 | TownePlace Suites St. George by Marriott | Kevin Ence | 45 | |||||||||||||
46 | IRG - Ellsworth Bailey Saratoga | Christopher Semarjian; Stuart Lichter | 46 | |||||||||||||
46.01 | Saratoga II | 46.01 | ||||||||||||||
46.02 | Saratoga I | 46.02 | ||||||||||||||
46.03 | Ellsworth Bailey Lordstown | 46.03 | ||||||||||||||
47 | 39-60 54th Street Owners, Inc. | 13.4% | 37.0% | 37.0% | 47 | |||||||||||
48 | Courtyard by Marriott - Shawnee | Jack Waters | 48 | |||||||||||||
49 | Athens Gate Apartments | Richard Aguilar | Group 3 | 49 | ||||||||||||
50 | Sand Pebble Apartments | Richard Aguilar | Group 3 | 50 | ||||||||||||
51 | Trojan Storage of Oxnard | Brett Henry; Scott Henry; John Koudsi | Group 7 | 51 | ||||||||||||
52 | CVS - Lynn, MA | SPC Associates, L.L.C. | 52 | |||||||||||||
53 | Gilbert Crossing | TriGate Property Partners, L.P. | 53 | |||||||||||||
54 | 1321 Harbor Bay Parkway | David B. Dollinger | 54 | |||||||||||||
55 | Casa Cruz | Ajay Gupta | 55 | |||||||||||||
56 | Best Western Plus - Windsor Gardens | Alex Fridzon; Daniel Berman; Arie Fridzon | 56 | |||||||||||||
57 | Oak Tree Plaza | Brent A. Tucker | 57 | |||||||||||||
58 | Peppertree Lane Apartments | Engel Realty Company, LLC | 58 | |||||||||||||
59 | 8211 Town Center Drive | Jonathan Ehrenfeld | 59 | |||||||||||||
60 | Staybridge Suites Indianapolis Airport | 600,000 | Lightning Trac VT, LLC; Robert W. Dora; Timothy J. Dora | 60 | ||||||||||||
61 | Austin Heights Shopping Center | Austin Heights Properties, LLC | 61 | |||||||||||||
62 | Walgreens - Duncanville, TX | Paul Celler | 62 | |||||||||||||
63 | Trojan Storage of Roseville | Brett Henry; Scott Henry; John Koudsi | Group 7 | 63 | ||||||||||||
64 | Lakeside Plaza | Terri R. Stomel; Mark Feldman; Cindy Jacoby | 64 | |||||||||||||
65 | Green Acres MHP | Laurence H. Weiner; David Worth; Ari Golson | Group 9 | 65 | ||||||||||||
66 | Mendicino Green Apartment Corp. | 26.0% | 19.0% | 19.0% | 66 | |||||||||||
67 | Walgreens - Richmond Heights | Stuart A. Roffman | 67 | |||||||||||||
68 | Rivertown Center | Laurence H. Weiner; Scott Gendell | Group 9 | 68 | ||||||||||||
69 | Bristol House, Inc. | 69 | ||||||||||||||
70 | Storaway Self Storage - Nashville | Fred D. Culbreath; Joe A. Hicks; Michael R. Hottinger | Group 8 | 70 | ||||||||||||
71 | Bella Luna / San Lucas | Mark Omid Bolour; Michael Cohan; Yakov Albaz | 71 | |||||||||||||
72 | Seacoast Self Storage | Robert Moser; Robert Morgan | Group 10 | 72 | ||||||||||||
73 | 230 Garth Road Owners, Inc. | 5.5% | 91.1% | 91.1% | 73 | |||||||||||
74 | Comfort Suites - Near the Galleria | Manish H. Parekh | 74 | |||||||||||||
75 | Sandstone Apartments | Alfons Melohn | 75 | |||||||||||||
76 | Tieton Village | Jonathan Lefferts; Stephen B. Jaeger | 76 | |||||||||||||
77 | Highland Terrace Housing Development Fund Corporation | 77 | ||||||||||||||
78 | Cooperstown Commons Shopping Center | Susannah Gold; John Montagna; Gregory Sobol | 78 | |||||||||||||
79 | Lake Lucina Shopping Center | William R. Cesery, Jr.; BHC Limited Partnership, LLLP | 79 | |||||||||||||
80 | Silver Bridge Plaza | Bernard T. Reilly; Bryan E. Pivirotto | Group 5 | 80 | ||||||||||||
81 | Karen Gardens Apartment Corp. | 27.1% | 16.4% | 16.4% | 81 | |||||||||||
82 | East Haven Self Storage | Robert Moser; Robert Morgan | Group 10 | 82 | ||||||||||||
83 | Walgreens - Milwaukee | Dale Dobroth | 83 |
A-1-27 |
ANNEX A-1 — CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Mortgage Loan Number | Property Name | Whole Loan Cut-off Date LTV Ratio | Whole Loan Cut-off Date U/W NOI Debt Yield | Whole Loan Cut-off Date U/W NCF Debt Yield | Mezzanine Debt Cut-off Date Balance($) | Sponsor | Affiliated Sponsors | Mortgage Loan Number | ||||||||
84 | Haggen Food & Pharmacy | Alta Home Properties LLC | 84 | |||||||||||||
85 | Sycamore Terrace | US Property Trust North America LLC | 85 | |||||||||||||
86 | Ramona Plaza Shopping Center | Wei Wu; Shirley Wu | 86 | |||||||||||||
87 | All A/C Self Storage | Genevieve Weinkle | 87 | |||||||||||||
88 | Pecue MHC | Bruce M. Simon | 88 | |||||||||||||
89 | Regency Park Owners Corp. | 23.8% | 22.0% | 22.0% | 89 | |||||||||||
90 | Storaway Self Storage - Deltona II | Fred D. Culbreath; Joe A. Hicks; Michael R. Hottinger | Group 8 | 90 | ||||||||||||
91 | Lakewood Place Shopping Center | Raji Sankar; Randhir Sethi | 91 | |||||||||||||
92 | Hacienda Heights Apartments | Jessica Y. Liu Palmer; Michael E. Palmer; Yule Liu | 92 | |||||||||||||
93 | Nagle House, Inc. | 7.3% | 41.2% | 41.2% | 93 | |||||||||||
94 | Walgreens - Warrensburg, MO | Judith Schwartz | 94 | |||||||||||||
95 | 230 Tenants Corporation | 7.6% | 27.4% | 27.4% | 95 | |||||||||||
96 | Shackelford Center | The Carrington Company | 96 | |||||||||||||
97 | De La Cruz Professional Center | Avi Nechemia; Ehud Nahum; David Gonen | 97 | |||||||||||||
98 | Folcroft Self Storage | Robert Moser; Robert Morgan | Group 10 | 98 | ||||||||||||
99 | Storaway Self Storage - Palm Bay | Fred D. Culbreath; Joe A. Hicks; Michael R. Hottinger | Group 8 | 99 | ||||||||||||
100 | Bowen Tower Apartments | CVC Equity Investors LLC; CVC Income Fund LLC; CVC Balanced Fund LLC | 100 | |||||||||||||
101 | 321 West 90th St. Owners Corp. | 7.4% | 48.9% | 48.9% | 101 | |||||||||||
102 | West Friendship Shopping Center | Ernest Rafailides; Hermes Rafailides Inter Vivos Trust Agreement; Trust Agreement of Thomas and Maria Rafailides | 102 | |||||||||||||
103 | Crestview Self Storage | Stephen L. Clark; Orlin E. Ard, Jr.; Stephen L. Clark Trust; Orlin E. Ard, Jr. Revocable Trust | 103 | |||||||||||||
104 | Denn Owners Corporation | 22.3% | 19.1% | 19.1% | 104 | |||||||||||
105 | Moundsville Plaza | Bernard T. Reilly; Bryan E. Pivirotto | Group 5 | 105 | ||||||||||||
106 | Storaway Self Storage- Deltona I | Fred D. Culbreath; Joe A. Hicks; Michael R. Hottinger | Group 8 | 106 | ||||||||||||
107 | Sedona Peak Apartments | Richard Aguilar | Group 3 | 107 | ||||||||||||
108 | Sea Breeze Town Houses Owners, Inc. | 29.3% | 16.0% | 16.0% | 108 | |||||||||||
109 | Willow Lake Shops | Capital Investments LLC | 109 | |||||||||||||
110 | Wickham Park Commons | Mehmet A. Capin | Group 6 | 110 | ||||||||||||
111 | Crown Pointe Plaza | Culebra Pointe I, LLC | 111 | |||||||||||||
112 | Hartsdale Executive House, Inc. | 13.0% | 48.0% | 48.0% | 112 | |||||||||||
113 | 25 Chapel Corp. | 113 | ||||||||||||||
114 | Market Place Village | James E. and Vicki S. Baker; Bruce R. Keller; Warren A. and MaryAnn Sackman; Gene O. Lee; Michael and Debra R. Marinelli; Dr. Larry Rudolph | 114 | |||||||||||||
115 | Kingstowne Shops | Union Investment Company of Newport News, VA. | 115 | |||||||||||||
116 | 109-111 N. Broadway Apt. Corp. | 20.9% | 26.9% | 26.9% | 116 | |||||||||||
117 | 40 Prospect Park West Owners Corp. | 4.0% | 82.1% | 82.1% | 117 | |||||||||||
118 | Shops of Orland Park | Scott Inbinder; Laurence H. Weiner | Group 9 | 118 | ||||||||||||
119 | Victorville Retail Center | Frank F. Helmonds; Doris E. Hijmans | 119 | |||||||||||||
120 | 6 West 20th St. Tenants Corp. | 5.0% | 89.5% | 89.5% | 120 | |||||||||||
121 | 50-22 Owners Ltd. | 19.6% | 26.9% | 26.9% | 121 | |||||||||||
122 | 585 McLean Owners, Inc. | 36.4% | 15.1% | 15.1% | 122 | |||||||||||
123 | 12 West 17th St. Tenants’ Corp. | 5.2% | 56.1% | 56.1% | 123 | |||||||||||
124 | Gillespie Field Business Park | Richard C. Dentt | 124 | |||||||||||||
125 | Waters at West End, Inc. | 22.6% | 29.6% | 29.6% | 125 | |||||||||||
126 | Jones St. Owners Corporation | 126 | ||||||||||||||
127 | Big Lots Plaza | Emerson J. Dobbs | 127 | |||||||||||||
128 | 30 Bond Street Owners Corp. | 128 | ||||||||||||||
129 | 166 West 76th Apartment Corp. | 6.2% | 58.3% | 58.3% | 129 | |||||||||||
130 | Hanna Shoppes | Robert Kantor; Bryan Becker | 130 | |||||||||||||
131 | Carroll Gardens Owners, Corp. | 20.4% | 20.3% | 20.3% | 131 | |||||||||||
132 | 170 East 92nd Street Owners, Inc. | 10.6% | 36.4% | 36.4% | 132 | |||||||||||
133 | 17 Warren Street Tenants Corporation | 133 |
A-1-28 |
FOOTNOTES TO ANNEX A-1 | |||
See “Annex B: Additional Mortgage Loan Information/Definitions” in the Free Writing Prospectus for additional information on all mortgage loans and “Annex A-3: Summaries of the Fifteen Largest Mortgage Loans” for additional information on the 15 largest mortgage loans. | |||
(1) | “WFB” denotes Wells Fargo Bank, National Association, “RMF” denotes Rialto Mortgage Finance, LLC, “SPREF” denotes Silverpeak Real Estate Finance LLC, “WDCPF” denotes Walker & Dunlop Commercial Property Funding I WF, LLC and “NCB” denotes National Cooperative Bank, N.A. | ||
(2) | For mortgage loan #2 (Cathedral Place), the total square footage is comprised of 199,612 square feet of office space, 16,399 square feet of retail space and 3,767 square feet of miscellaneous space. | ||
For mortgage loan #5 (Queens’ MarketPlace), a borrower affiliate leases 14,205 square feet, representing 10.8% of net rentable square feet, through April 2021. The space is unoccupied and has been underwritten as vacant. The Occupancy% including the unoccupied space is 77.0%. | |||
For mortgage loan #8 (Parkway Crossing East Shopping Center), the second largest tenant (30,000 square feet), representing 20.9% of net rentable square feet, leases the collateral pad site and the improvements built on the pad site are owned by the tenant. The Number of Units includes the second largest tenant’s improvements. | |||
For mortgage loan #17 (Norfolk Commons Park), the Number of Units includes 242,131 square feet of office space and 89,555 square feet of industrial space. | |||
For mortgage loan #19 (Baywoods of Annapolis), the related mortgaged property is a continuing care retirement community comprised of 147 residential cooperative apartment units serving independent living residents. In addition, the mortgaged property includes a healthcare center with 45 beds that can be used for assisted living and nursing care. All unit calculations are limited to units which are operated as residential cooperative apartment units and exclude the assisted living and nursing care beds located in the portion of such mortgaged property operated as a residential healthcare facility. | |||
For mortgage loan #32 (Brickyard Square), the fifth largest tenant (12,000 square feet), representing 6.9% of net rentable square feet, leases the collateral pad site and the improvements built on the pad site are owned by the tenant. The Number of Units includes the fifth largest tenant’s improvements. | |||
For mortgage loan #43 (Fahrens Park Plaza), the Number of Units includes 63,956 square feet of office space and 23,799 square feet of retail space. | |||
(3) | For mortgage loan #32 (Brickyard Square), the mortgage loan represents Note A-2 of two pari passu companion loans, which have a combined Cut-off Date principal balance of $36,450,000. Note A-1 is not included in the trust. All LTV, DSCR, Debt Yield and Cut-off Date Balance per Unit of Measure presented are based on Note A-1 and Note A-2 in the aggregate (“Brickyard Square Loan Combination”). The Note A-2 mortgage loan is the non-controlling interest in the Brickyard Square Loan Combination. | ||
For mortgage loan #71 (Bella Luna / San Lucas), the mortgage loan represents Note A-2 of two pari passu companion loans, which have a combined Cut-off Date principal balance of $20,324,202. Note A-1 is not included in the trust. All LTV, DSCR, Debt Yield and Cut-off Date Balance per Unit of Measure presented are based on Note A-1 and Note A-2 in the aggregate (“Bella Luna / San Lucas Loan Combination”). The Note A-2 mortgage loan is the non-controlling interest in the Bella Luna / San Lucas Loan Combination. |
A-1-29 |
(4) | For mortgage loan #4 (WPC Self Storage Portfolio VII), the borrower is not required to pay any late charge (i) with respect to the first two delinquent payments during any 12-month calendar period or (ii) with respect to the first two delinquent payments following any change by the lender to the Monthly Debt Service Payment Amount following notice of such change, however, the borrower is subject to default interest for any delinquent payments. |
For mortgage loan #14 (Smiths Medical), in any 12 consecutive month period, the borrower is permitted two late charge grace periods of three days each. | |
(5) | For mortgage loan #26 (Jackson Square Apartments), the Appraised Value assumes completion of planned renovation work by April 28, 2016. A reserve of $1,052,890 was established at origination to cover the cost of the planned renovation work. The appraised value assuming the renovation is not completed is $15,900,000. The Cut-off Date LTV Ratio and the LTV Ratio at Maturity or ARD based on the $15,900,000 appraised value are 79.7% and 58.9%, respectively. |
(6) | In certain cases, mortgage loans may have tenants that have executed leases, but may not be fully paying rent or occupying the related leased premises, that were included in the underwriting. |
For mortgage loan #1 (Hutchinson Metro Center I), the fourth largest tenant (55,859 square feet), representing 13.2% of net rentable square feet did not deliver notice of renewal prior to its notice date of November 30, 2014 and will likely vacate at lease expiration on November 30, 2015. | |
For mortgage loan #2 (Cathedral Place), the second largest tenant (51,853 square feet), representing 23.6% of the net rentable square feet recently executed a lease for 9,951 square feet of expansion space. The tenant is expected to take occupancy on June 6, 2015 and will commence rent payments on July 1, 2015. A reserve for free rent and TI/LC was established at closing. | |
For mortgage loan #3 (150 Royall Street), the largest tenant (188,857 square feet), representing 72.8% of net rentable square feet has 35,000 square feet of dark space. The third largest tenant (29,299 square feet), representing 11.3% of net rentable square feet, has abated rent through July 16, 2015. | |
For mortgage loan #9 (Olmsted Plaza Shopping Center), the largest tenant (50,290 square feet), representing 19.7% of net rentable square footage, subleases its entire space under a lease that expires January 31, 2016. The tenant has executed a 10-year direct lease which will commence on January 30, 2016; the direct lease has been underwritten. | |
For mortgage loan #32 (Brickyard Square), the fifth largest tenant (12,000 square feet), representing 6.9% of net rentable feet, has executed a lease for a pad site for which the borrower is responsible for completing the pad development and improvements. The borrower anticipates that the improvements will be completed and delivered to the tenant on or prior to November 1, 2015. Rent commencement will be the earlier of (i) 30 days after delivery of the completed building or (ii) the date the tenant opens for business. A free rent reserve of $171,000 was taken at closing. | |
For mortgage loan #64 (Lakeside Plaza), the largest tenant (58,076 square feet), representing 45.5% of net rentable square feet, has abated rent for June 2015. There is a reserve of $19,917 representing the outstanding rent abatement. | |
For mortgage loan #68 (Rivertown Center), the fifth largest tenant (2,735 square feet), representing 4.5% of net rentable square feet, is not fully open and not paying full rent. The tenant has free rent from May 2015 through June 2015. An $11,392 Rent Concession Reserve was taken at closing. | |
For mortgage loan #96 (Shackelford Center), the second largest tenant (800 square feet), representing 1.6% of net rentable square feet, is paying abated rent through June 12, 2015. The tenant space was underwritten as vacant. |
A-1-30 |
For mortgage loan #102 (West Friendship Shopping Center), the largest tenant (2,200 square feet), representing 11.7% of net rentable square feet, has executed a lease but is not paying rent or in occupancy of its space, which is under renovation. The largest tenant is required to begin paying rent on the earlier of August 27, 2016 (240 days from December 31, 2015) or 240 days following the date the landlord delivers the demised premises. Income from the demised premises has been included in U/W Revenues. | |
(7) | The tenant early termination options discussed in this footnote are not intended to be an exclusive list. In particular, termination options based on co-tenancy clauses are generally included only for top five tenants by net rentable square feet if the option is currently or imminently exercisable. |
For mortgage loan #1 (Hutchinson Metro Center I), the second largest tenant (63,462 square feet), representing 15.0% of net rentable square feet, may terminate its lease as of March 31, 2018 or March 31, 2022 upon providing 12 months’ prior written notice and payment of a termination fee equal to $3,005,560 or $1,882,283 for the 2018 or 2022 termination option, respectively. The third largest tenant (62,977 square feet), representing 14.9% of net rentable square feet, may terminate its lease as of November 30, 2020 upon providing 12 months’ written notice and payment of a termination fee equal to base rent for the 15th lease year. The fifth largest tenant (22,270 square feet), representing 5.3% of net rentable square feet, may terminate its lease at any time upon providing 120 days’ written notice. | |
For mortgage loan #2 (Cathedral Place), the second largest tenant (51,583 square feet), representing 23.6% of net rentable square feet, may terminate its lease on June 18, 2019 for 9,951 square feet, representing 4.5% of net rentable square feet, upon providing at least six months’ written notices. The third largest tenant (37,476 square feet), representing 17.1% of net rentable square feet, may terminate its lease on October 31, 2019 for 10,526 square feet, representing 4.8% of net rentable square feet, upon providing at least 12 months’ written notice and payment of a termination fee equal to approximately 28.1% of all unamortized tenant improvement and leasing commissions. The fourth largest tenant (9,010 square feet), representing 4.1% of the total square feet, may terminate its lease on November 14, 2019, upon providing at least nine months’ written notice and payment of all unamortized tenant improvements and leasing commissions. | |
For mortgage loan #3 (150 Royall Street), the largest tenant (188,857 square feet), representing 72.8% of net rentable square feet, may terminate its lease on June 31, 2018 upon providing 12 months’ written notice and a termination fee equal to six months’ base rent and all unamortized free rent, tenant improvements and leasing commissions. The third largest tenant (29,299 square feet), representing 11.3% of net rentable square feet, may terminate its lease as of July 31, 2025 upon providing 12 months’ written notice and payment of all unamortized free rent, tenant improvements and leasing commissions. | |
For mortgage loan #5 (Queens’ MarketPlace), the second largest tenant (6,263 square feet), representing 4.8% of net rentable square feet, may terminate its lease if calendar year sales are less than $3,000,000, adjusted for the consumer price index, upon providing 90 days’ written notice and payment of al unamortized tenant improvements. | |
For mortgage loan #7 (Country Club Center), the fourth largest tenant (5,845 square feet), representing 9.0% of net rentable square feet, may terminate its lease at any time upon providing four months’ written notice. | |
For mortgage loan #9 (Olmsted Plaza Shopping Center), the fourth largest tenant (16,000 square feet), representing 6.3% of net rentable square feet, has a one-time right to terminate its lease on the last day of the 66th full calendar month following the Rent Commencement Date upon providing at least 12 months’ notice and payment of a termination fee equal to $10,000 and the unamortized cost of tenant improvements and leasing commissions. | |
For mortgage loan #10 (Hall Office Park), the third largest tenant (14,463 square feet), representing 10.1% of net rentable square feet, may terminate its lease effective April 30, 2017 | |
A-1-31 |
upon providing written notice by July 31, 2016 and payment of a termination fee equal to two months’ base rent and all unamortized tenant improvements and leasing commissions. | |
For mortgage loan #14 (Smiths Medical), the largest tenant (99,977 square feet), representing 54.9% of net rentable square feet, may terminate its lease on July 31, 2025 with 12 months’ written notice and the payment of $2,046,940. | |
For mortgage loan #16 (Magnolia Marketplace), the fifth largest tenant (11,414 square feet), representing 11.7% of net rentable square feet, may terminate its lease effective on March 31, 2020 if gross sales do not exceed $210.00 per square foot during the 4th year. | |
For mortgage loan #17 (Norfolk Commerce Park), the largest tenant (47,489 square feet), representing 14.3% of net rentable square feet, may terminate its lease 40 months after the commencement date upon providing at least six months’ written notice and paying a termination fee equal to three months of base rent plus the unamortized portion of the sum of rental concessions, tenant improvement costs, design fees, and leasing commissions. The fifth largest tenant (20,315 square feet), representing 6.1% of net rentable square feet, may terminate its lease on October 31, 2016, upon providing at least nine months’ written notice and paying a termination fee of $196,429. | |
For mortgage loan #21 (Louisville Plaza), the second largest tenant (60,000 square feet), representing 30.9% of net rentable square feet, may terminate its lease anytime after November 30, 2015 with nine months’ written notice. | |
For mortgage loan #23 (Riverside Technology Park A & B), the largest tenant (62,418 square feet), representing 37.7% of net rentable square feet, may terminate its lease for all or a portion of its space on May 31, 2018, upon providing 6 months’ written notice and payment of all unamortized free rent, tenant improvement and leasing commissions. | |
For mortgage loan #31 (Ozinus Realty Property Portfolio), the largest tenant (71,389 square feet), representing 17.6% of net rentable square feet, can terminate its lease any time after June 30, 2014, the third anniversary of the extended lease term by providing the landlord at least 60 days’ notice. | |
For mortgage loan #43 (Fahrens Park Plaza), the largest tenant (21,325 square feet), representing 24.3% of net rentable square feet, may terminate its lease at any time upon providing 90 days’ written notice. The second largest tenant (12,000 square feet), representing 13.7% of net rentable square feet, may terminate its lease at any time if their program funding is eliminated. The fifth largest tenant (7,247 square feet), representing 8.3% of net rentable square feet, may terminate its lease at any time upon providing 90 days’ written notice. | |
For mortgage loan #44 (Causeway Corporate Centre), the largest tenant (11,921 square feet), representing 25.9% of net rentable square feet, may terminate its lease as of July 31, 2018 with 180 days’ written notice and a payment of 50% of rent due for the year in which the lease is terminated. | |
For mortgage loan #46 (IRG – Ellsworth Bailey Saratoga), the largest tenant at the Saratoga II mortgaged property (102,000 square feet), representing 36.3% of net rentable square feet of the mortgage loan, may terminate its lease on December 31, 2016 upon providing written notice on or before April 30, 2016 and payment of a termination fee equal to $600,000. The third largest tenant at the Ellsworth Bailey Lordstown mortgage property (15,722 square feet), representing 5.6% of net rentable square feet of the mortgage loan, may terminate its lease as of September 30, 2018 upon providing at least nine months’ written notice and payment of all unamortized tenant improvements and leasing commissions. | |
For mortgage loan #57 (Oak Tree Plaza), the largest tenant (2,922 square feet), representing 17.7% of net rentable square feet, may terminate its lease as of January 24, 2020 with 180 days’ written notice and a payment of $25,000. |
A-1-32 |
For mortgage loan #62 (Walgreens – Duncanville, TX) the only tenant (14,490 square feet), representing 100% of net rentable square feet, may terminate its lease on October 31, 2034, and every five years thereafter, upon providing at least 12 months’ written notice. | |
For mortgage loan #83 (Walgreens – Milwaukee) the only tenant (14,490 square feet), representing 100% of net rentable square feet, may terminate its lease on May 31, 2029, and every five years thereafter, upon providing at least 12 months’ written notice. | |
For mortgage loan #94 (Walgreens – Warrensburg, MO) the only tenant (14,490 square feet), representing 100% of net rentable square feet, may terminate its lease on September 30, 2029, and every five years thereafter, upon providing at least six months’ written notice. | |
For mortgage loan #96 (Shackelford Center), the third largest tenant (800 square feet), representing 1.6% of net rentable square feet, may terminate its lease at any time upon providing six months’ written notice. | |
For mortgage loan #97 (De La Cruz Professional Center), the second largest tenant (8,180 square feet), representing 29.2% of net rentable square feet, may terminate its lease at any time upon providing six months’ written notice. | |
For mortgage loan #109 (Willow Lake Shops), the second largest tenant (8,131 square feet), representing 33.5% of net rentable square feet, has a one-time right to terminate its lease between June 1, 2015 and May 31, 2016 if it fails to achieve a “gross rent factor” (more particularly defined in the related lease) of 9% or less. | |
For mortgage loan #110 (Wickham Park Commons), the second largest tenant (1,875 square feet), representing 12.3% of net rentable square feet, may terminate its lease within 30 days of August 30, 2016 if there is a regulatory change that disallows the tenant from conducting business. The third largest tenant (1,838 square feet), representing 12.1% of net rentable square feet, may terminate its lease on June 30th of each lease year upon providing written notice in the preceding January. | |
For mortgage loan #114 (Market Place Village), the fourth largest tenant (1,425 square feet), representing 9.8% of net rentable square feet, has a right to terminate its lease after month 38 of the term (i.e., June 30, 2015) upon 60 days’ notice. Upon such termination, the tenant is required to pay two months of rent and the cost of any unamortized tenant improvements. | |
For mortgage loan #119 (Victorville Retail Center), the largest tenant (5,675 square feet), representing 48.9% of net rentable square feet, may terminate its lease at any time after January 7, 2018 upon providing 90 days’ written notice. | |
For mortgage loan #130 (Hanna Shoppes) the fourth largest tenant (1,625 square feet), representing 10.1% of net rentable square feet, may terminate its lease effective September 30, 2015. | |
(8) | For mortgage loan #44 (Causeway Corporate Centre), the largest tenant (11,921 square feet), representing 25.9% of net rentable area, subleases 1,957 square feet of its space for an annual base rent of $49,825 ($25.46 per square foot, expiring July 31, 2016). |
(9) | For mortgage loan #23 (Riverside Technology Park A & B), the second largest tenant (39,120 square feet), representing 23.6% of net rentable square feet, has multiple lease expirations as follows: 28,620 square feet expiring June 30, 2021; and 10,500 square feet expiring July 31, 2021. |
For mortgage loan #102 (West Friendship Shopping Center), the 5th largest tenant (1,500 square feet), representing 8.0% of net rentable square feet, has multiple lease expirations as follows: 850 square feet expiring November 30, 2016; and 650 square feet expiring October 31, 2021. |
A-1-33 |
(10) | For mortgage loan #7 (Country Club Center), the second largest tenant (14,535 square feet) and the third largest tenant (12,957 square feet), representing 42.3% of net rentable square feet, are affiliated with the sponsor. |
For mortgage loan #11 (Dulles North Corporate Parks), the third largest tenant at the Dulles North Corporate Park 2 mortgaged property (20,056 square feet), representing 12.6% of net rentable square feet of the mortgage loan, is affiliated with the sponsor. | |
(11) | For mortgage loan 5 (Queens’ MarketPlace), the Monthly Tax Reserve will be suspended at any time the net cash flow debt yield is greater than 9.0%. |
(12) | For mortgage loan #19 (Baywoods of Annapolis), the borrower is required to deposit into an operating account (the “Insurance Account”) with the lender an amount equal to one-twelfth (1/12) of the borrower’s annual insurance premiums. Although nominally considered an insurance escrow account (with the funds therein anticipated to be utilized for the payment of insurance premiums), the borrower has unrestricted access to the Insurance Account and is permitted to use the funds in that account for operating expenses other than the payment of insurance premiums. |
(13) | For mortgage loan #20 (Rock Hill Hampton Inn), the Monthly Replacement Reserve will be adjusted to an amount equal the greater of: (i) the then-existing Monthly Replacement Reserve; and (ii) 1/12th of 4% of underwritten revenue for the prior fiscal year. |
For mortgage loan #37 (Homewood Suites - Tallahassee), the Monthly Replacement Reserve will be adjusted to an amount equal to 4% of total revenue for the prior calendar month. | |
For mortgage loan #48 (Courtyard by Marriot – Shawnee), the Monthly Replacement Reserve will be adjusted to an amount initially equal to the greater of 1/12th of (i) 3.0% of the total annual gross revenues, and commencing on the 13th payment date, 4.0% of the total annual gross revenues and (ii) the amount required to be reserved for capital expenses and FF&E expenses under the franchise agreements. | |
(14) | For mortgage loan #11 (Dulles North Corporate Parks), the Monthly TI/LC Reserve only applies to the Dulles North Corporate Park 2 mortgaged property. |
For mortgage loan #23 (Riverside Technology Park A & B), the TI/LC Reserve may be capped at $400,000 after January 2020 if the mortgaged property is at least 85% occupied. | |
For mortgage loan #61 (Austin Heights Shopping Center), commencing on the twenty-fifth (25th) payment date, Monthly TI/LC Reserve collections will be $5,094. If the balance of the TI/LC Reserve account falls below $300,000 after the cap is achieved, monthly TI/LC Reserve collections in the amount of $5,094 will be collected until the TI/LC Reserve account shall again equal $300,000. | |
For mortgage loan #64 (Lakeside Plaza), the Monthly TI/LC Reserve will decrease to $7,500 and will be capped at $500,000 if Sears, or any replacement tenant, renews or extends its lease on terms and conditions acceptable to the lender. | |
For mortgage loan #109 (Willow Lake Shops), commencing on the thirteenth (13th) payment date, Monthly TI/LC Reserve collections will be $1,170. Following the occurrence of the lease rollover satisfaction conditions (which conditions are based on certain lease-up and lease rollover items set forth in the loan documents), any funds then on deposit in the TI/LC Reserve account in excess of $15,000 will be returned to the borrower. If the balance of the TI/LC Reserve account falls below $15,000 thereafter, monthly TI/LC Reserve collections in the amount of $1,170 will be collected until the TI/LC Reserve account shall again equal $15,000. The TI/LC Reserve Cap does not take effect until the occurrence of the lease rollover satisfaction conditions. | |
For mortgage loan #111 (Crown Pointe Plaza), following the thirty-sixth (36th) payment date, any funds then on deposit in the TI/LC Reserve account in excess of $50,000 will be returned to the borrower. If the balance of the TI/LC Reserve account falls below $50,000 after the thirty-sixth |
A-1-34 |
(36th) payment date, Monthly TI/LC Reserve collections in the amount of $2,432 will be collected until the TI/LC Reserve account shall again equal $50,000. The TI/LC Reserve Cap does not take effect until April, 2018. | |
For mortgage loan #114 (Market Place Village), commencing on the thirteenth (13th) through the twenty-fourth (24th) payment dates of the mortgage loan, Monthly TI/LC Reserve collections will be $1,000 monthly. If the balance of the TI/LC Reserve account falls below $150,000 after the cap is achieved, Monthly TI/LC Reserve collections in the amount of $1,155 will be collected until the TI/LC Reserve account shall again equal $150,000. | |
For mortgage loan #127 (Big Lots Plaza), the Monthly TI/LC Reserve begins with the monthly payment date in July 2017 and the TI/LC Reserve Cap only applies if the largest tenant (30,934 square feet), representing 85.0% of net rentable square feet, exercises its lease extension option at a rental rate at least equal to the current rate. | |
(15) | For mortgage loan #24 (Maricopa Fiesta), the second largest tenant (5,491 square feet) is expected to undergo a compete store remodel in the near team. The borrower has agreed to reimburse the tenant for up to $100,000, which was deposited into an upfront reserve at closing. |
(16) | For mortgage loan #124 (Gillespie Field Business Park), the Other Escrow I (Monthly) Reserve will adjust based on the current ground lease rent schedule. |
(17) | For mortgage loan #45 (TownePlace Suites St. George by Marriott), the Mortgaged Property is master leased to Southern Utah Hospitality, Inc., who is the operator (manager). The TownePlace Suites St. George by Marriott Mortgage Loan was made to Desert Hills Lodging LC and Southern Utah Hospitality, Inc., individually and collectively. The day-to-day management of the hotel is governed by an operating lease between the property owner, Desert Hills Lodging LC, and Southern Utah Hospitality, Inc., as the operating lessee. The term of the operating lease commenced on the day of the TownePlace Suites St. George by Marriott loan closing and is for a term of 20 years with contractual annual payments of $600,000. The TownePlace Suites St. George by Marriott loan is secured by both the fee interest and the master lease interest and all revenue generated by the Mortgaged Property serves as collateral. |
A-1-35 |
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Annex A-2
Mortgage Pool Information
[THIS PAGE INTENTIONALLY LEFT BLANK.]
Wells Fargo Commercial Mortgage Trust 2015-C29
Annex A-2: Loan Pool Information
Mortgage Loans by Mortgage Loan Seller | |||||||||||||||||||||||||||||
Weighted Average | |||||||||||||||||||||||||||||
Percent by | |||||||||||||||||||||||||||||
Number of | Aggregate | Remaining | Remaining | U/W NOI | U/W NCF | ||||||||||||||||||||||||
Mortgage | Aggregate Cut-off | Cut-off Date | Mortgage | Term to Maturity | Amortization | U/W NCF | Debt | Debt | Cut-off Date | Balloon or ARD | |||||||||||||||||||
Loan Seller | Loans | Date Balance ($) | Pool Balance (%) | Rate (%) | or ARD (mos.) | Term (mos.) | DSCR (x) | Yield (%) | Yield (%) | LTV (%) | LTV (%) | ||||||||||||||||||
Wells Fargo Bank, National Association | 53 | $578,987,789 | 49.2 | % | 4.216 | % | 119 | 349 | 1.64 | x | 9.9 | % | 9.0 | % | 66.4 | % | 57.0 | % | |||||||||||
Rialto Mortgage Finance, LLC | 25 | 236,805,755 | 20.1 | 4.451 | 115 | 354 | 1.50 | 9.7 | 9.0 | 70.2 | 61.8 | ||||||||||||||||||
Silverpeak Real Estaste Finance LLC | 13 | 145,314,173 | 12.3 | 4.356 | 116 | 350 | 1.54 | 10.0 | 9.3 | 70.8 | 60.4 | ||||||||||||||||||
Walker & Dunlop Commercial Property Funding I WF, LLC | 7 | 113,270,708 | 9.6 | 4.268 | 119 | 360 | 1.64 | 10.5 | 9.4 | 67.3 | 57.2 | ||||||||||||||||||
National Cooperative Bank, N.A. | 35 | 102,646,698 | 8.7 | 3.988 | 119 | 380 | 6.00 | 32.1 | 31.8 | 28.3 | 23.4 | ||||||||||||||||||
Total/Weighted Average: | 133 | $1,177,025,122 | 100.0 | % | 4.266 | % | 118 | 354 | 1.98 | x | 11.8 | % | 11.1 | % | 64.5 | % | 55.5 | % |
A-2-1 |
Wells Fargo Commercial Mortgage Trust 2015-C29
Annex A-2: Loan Pool Information
Mortgaged Properties by Property Type(1)(2) | |||||||||||||||||||||||||||||
Weighted Average | |||||||||||||||||||||||||||||
Percent by | |||||||||||||||||||||||||||||
Number of | Aggregate | Remaining | Remaining | U/W NOI | U/W NCF | ||||||||||||||||||||||||
Mortgaged | Aggregate Cut-off | Cut-off Date | Mortgage | Term to Maturity | Amortization | U/W NCF | Debt | Debt | Cut-off Date | Balloon or ARD | |||||||||||||||||||
Property Type | Properties | Date Balance ($) | Pool Balance (%) | Rate (%) | or ARD (mos.) | Term (mos.) | DSCR (x) | Yield (%) | Yield (%) | LTV (%) | LTV (%) | ||||||||||||||||||
Multifamily | 53 | $339,058,508 | 28.8 | % | 4.242 | % | 115 | 364 | 2.87 | x | 16.4 | % | 15.9 | % | 58.1 | % | 49.7 | % | |||||||||||
Garden | 22 | 220,029,188 | 18.7 | 4.347 | 113 | 356 | 1.53 | 9.8 | 9.2 | 70.8 | 60.9 | ||||||||||||||||||
Cooperative | 27 | 65,694,607 | 5.6 | 3.658 | 119 | 393 | 8.29 | 43.0 | 43.0 | 15.5 | 12.8 | ||||||||||||||||||
Student Housing | 1 | 24,000,000 | 2.0 | 4.330 | 116 | 360 | 1.40 | 8.9 | 8.3 | 73.4 | 62.4 | ||||||||||||||||||
Cooperative/Residential Healthcare Facility | 1 | 16,500,000 | 1.4 | 4.700 | 120 | 360 | 2.20 | 13.7 | 13.7 | 28.9 | 23.6 | ||||||||||||||||||
Independent Living | 1 | 10,114,439 | 0.9 | 4.690 | 119 | 359 | 1.65 | 10.6 | 10.3 | 66.5 | 54.2 | ||||||||||||||||||
High Rise | 1 | 2,720,274 | 0.2 | 4.680 | 115 | 355 | 1.61 | 11.7 | 10.1 | 73.5 | 60.2 | ||||||||||||||||||
Retail | 44 | 313,808,559 | 26.7 | 4.253 | 118 | 354 | 1.67 | 9.7 | 9.0 | 67.2 | 59.5 | ||||||||||||||||||
Anchored | 20 | 209,457,278 | 17.8 | 4.213 | 119 | 355 | 1.61 | 9.5 | 8.8 | 68.7 | 60.2 | ||||||||||||||||||
Shadow Anchored | 5 | 43,873,000 | 3.7 | 4.299 | 119 | 360 | 1.95 | 10.3 | 9.5 | 63.9 | 60.3 | ||||||||||||||||||
Unanchored | 13 | 33,308,985 | 2.8 | 4.402 | 114 | 360 | 1.86 | 11.6 | 10.5 | 63.1 | 54.9 | ||||||||||||||||||
Single Tenant | 6 | 27,169,296 | 2.3 | 4.304 | 120 | 325 | 1.44 | 8.3 | 8.2 | 66.4 | 58.7 | ||||||||||||||||||
Office | 11 | 294,897,126 | 25.1 | 4.241 | 119 | 357 | 1.41 | 9.2 | 8.4 | 69.4 | 59.2 | ||||||||||||||||||
Suburban | 10 | 254,997,126 | 21.7 | 4.259 | 120 | 356 | 1.41 | 9.3 | 8.4 | 69.4 | 59.2 | ||||||||||||||||||
CBD | 1 | 39,900,000 | 3.4 | 4.125 | 117 | 360 | 1.41 | 9.0 | 8.2 | 70.0 | 59.2 | ||||||||||||||||||
Self Storage | 20 | 79,519,010 | 6.8 | 4.313 | 120 | 345 | 1.96 | 9.8 | 9.5 | 63.7 | 58.3 | ||||||||||||||||||
Self Storage | 20 | 79,519,010 | 6.8 | 4.313 | 120 | 345 | 1.96 | 9.8 | 9.5 | 63.7 | 58.3 | ||||||||||||||||||
Hospitality | 7 | 57,703,508 | 4.9 | 4.456 | 119 | 311 | 1.74 | 12.9 | 11.4 | 64.4 | 50.2 | ||||||||||||||||||
Limited Service | 4 | 36,396,458 | 3.1 | 4.407 | 119 | 300 | 1.74 | 13.1 | 11.5 | 64.5 | 49.7 | ||||||||||||||||||
Extended Stay | 2 | 13,727,050 | 1.2 | 4.538 | 118 | 316 | 1.68 | 12.5 | 11.0 | 66.8 | 51.7 | ||||||||||||||||||
Full Service | 1 | 7,580,000 | 0.6 | 4.540 | 120 | 360 | 1.89 | 13.3 | 11.5 | 59.2 | 50.0 | ||||||||||||||||||
Industrial | 10 | 32,318,421 | 2.7 | 4.450 | 120 | 340 | 1.83 | 12.3 | 10.5 | 57.1 | 47.1 | ||||||||||||||||||
Flex | 5 | 21,618,421 | 1.8 | 4.479 | 120 | 360 | 1.81 | 12.0 | 10.3 | 55.8 | 47.2 | ||||||||||||||||||
Warehouse | 5 | 10,700,000 | 0.9 | 4.393 | 120 | 300 | 1.85 | 12.9 | 11.1 | 59.8 | 47.0 | ||||||||||||||||||
Mixed Use | 2 | 27,100,000 | 2.3 | 4.234 | 120 | 360 | 1.79 | 12.2 | 10.5 | 68.0 | 59.1 | ||||||||||||||||||
Office/Industrial | 1 | 18,000,000 | 1.5 | 4.377 | 120 | 360 | 1.84 | 13.1 | 11.0 | 69.9 | 61.0 | ||||||||||||||||||
Office/Retail | 1 | 9,100,000 | 0.8 | 3.950 | 119 | 360 | 1.69 | 10.5 | 9.6 | 64.1 | 55.4 | ||||||||||||||||||
Other | 2 | 24,173,905 | 2.1 | 4.240 | 118 | 322 | 1.58 | 10.6 | 9.8 | 63.4 | 49.4 | ||||||||||||||||||
Data Center | 1 | 14,973,905 | 1.3 | 4.310 | 119 | 299 | 1.50 | 10.8 | 9.8 | 59.6 | 43.5 | ||||||||||||||||||
Parking Garage | 1 | 9,200,000 | 0.8 | 4.125 | 117 | 360 | 1.70 | 10.4 | 9.9 | 69.7 | 58.9 | ||||||||||||||||||
Manufactured Housing Community | 2 | 8,446,084 | 0.7 | 4.310 | 120 | 360 | 1.56 | 9.5 | 9.3 | 70.8 | 58.0 | ||||||||||||||||||
Manufactured Housing Community | 2 | 8,446,084 | 0.7 | 4.310 | 120 | 360 | 1.56 | 9.5 | 9.3 | 70.8 | 58.0 | ||||||||||||||||||
Total/Weighted Average: | 151 | $1,177,025,122 | 100.0 | % | 4.266 | % | 118 | 354 | 1.98 | x | 11.8 | % | 11.1 | % | 64.5 | % | 55.5 | % |
(1)A mortgaged property is classified as shadow anchored if it is located in close proximity to an anchored retail property.
(2)Because this table presents information relating to the mortgaged properties and not the mortgage loans, the information for mortgage loans secured by more than one mortgaged property is based on allocated amounts (allocating the mortgage loan principal balance to each of those properties according to the relative appraised values of the mortgaged properties or the allocated loan amounts or property-specific release prices set forth in the related mortgage loan documents or in such other manner as the related mortgage loan seller deemed appropriate).
A-2-2 |
Wells Fargo Commercial Mortgage Trust 2015-C29
Annex A-2: Loan Pool Information
Mortgaged Properties by Location(1)(2) | |||||||||||||||||||||||||||||
Weighted Average | |||||||||||||||||||||||||||||
Percent by | |||||||||||||||||||||||||||||
Number of | Aggregate | Remaining | Remaining | U/W NOI | U/W NCF | ||||||||||||||||||||||||
Mortgaged | Aggregate Cut-off | Cut-off Date | Mortgage | Term to Maturity | Amortization | U/W NCF | Debt | Debt | Cut-off Date | Balloon or ARD | |||||||||||||||||||
State | Properties | Date Balance ($) | Pool Balance (%) | Rate (%) | or ARD (mos.) | Term (mos.) | DSCR (x) | Yield (%) | Yield (%) | LTV (%) | LTV (%) | ||||||||||||||||||
New York | 30 | $182,319,607 | 15.5 | % | 4.039 | % | 120 | 366 | 3.88 | x | 21.4 | % | 20.8 | % | 50.9 | % | 43.2 | % | |||||||||||
Texas | 19 | 171,494,880 | 14.6 | 4.313 | 118 | 356 | 1.57 | 10.2 | 9.3 | 70.4 | 60.1 | ||||||||||||||||||
Florida | 26 | 161,854,235 | 13.8 | 4.398 | 116 | 352 | 1.66 | 10.2 | 9.4 | 67.3 | 57.6 | ||||||||||||||||||
Virginia | 5 | 70,795,520 | 6.0 | 4.259 | 119 | 338 | 1.55 | 10.6 | 9.5 | 67.9 | 54.1 | ||||||||||||||||||
California | 11 | 56,968,197 | 4.8 | 4.171 | 119 | 360 | 1.68 | 10.2 | 9.6 | 61.9 | 51.8 | ||||||||||||||||||
Southern | 7 | 28,949,971 | 2.5 | 4.215 | 119 | 360 | 1.78 | 10.7 | 10.1 | 59.9 | 49.2 | ||||||||||||||||||
Northern | 4 | 28,018,226 | 2.4 | 4.127 | 119 | 360 | 1.57 | 9.7 | 9.1 | 63.8 | 54.5 | ||||||||||||||||||
Wisconsin | 3 | 52,384,296 | 4.5 | 4.138 | 117 | 356 | 1.45 | 9.2 | 8.5 | 69.8 | 58.5 | ||||||||||||||||||
Massachusetts | 2 | 45,387,500 | 3.9 | 4.164 | 120 | 360 | 1.47 | 9.1 | 8.1 | 65.3 | 60.4 | ||||||||||||||||||
Ohio | 7 | 44,990,000 | 3.8 | 4.169 | 119 | 345 | 1.54 | 10.1 | 9.3 | 71.5 | 61.4 | ||||||||||||||||||
Arizona | 3 | 43,858,000 | 3.7 | 4.174 | 118 | 360 | 1.92 | 10.1 | 9.2 | 66.2 | 61.4 | ||||||||||||||||||
Maryland | 4 | 39,843,832 | 3.4 | 4.458 | 120 | 351 | 1.81 | 11.8 | 11.1 | 49.3 | 38.9 | ||||||||||||||||||
Hawaii | 1 | 35,000,000 | 3.0 | 4.130 | 120 | 0 | 2.10 | 9.4 | 8.8 | 63.1 | 63.1 | ||||||||||||||||||
Georgia | 7 | 25,225,000 | 2.1 | 4.421 | 119 | 360 | 1.71 | 10.3 | 9.3 | 63.6 | 56.5 | ||||||||||||||||||
Indiana | 4 | 24,348,677 | 2.1 | 4.502 | 90 | 345 | 1.41 | 9.5 | 8.8 | 68.9 | 59.8 | ||||||||||||||||||
Minnesota | 1 | 22,250,000 | 1.9 | 4.475 | 119 | 360 | 1.61 | 10.7 | 9.8 | 62.9 | 57.5 | ||||||||||||||||||
Louisiana | 2 | 22,031,792 | 1.9 | 4.181 | 119 | 359 | 1.30 | 8.0 | 7.7 | 74.5 | 59.6 | ||||||||||||||||||
North Carolina | 1 | 19,000,000 | 1.6 | 4.380 | 119 | 360 | 1.30 | 8.2 | 7.8 | 74.9 | 66.9 | ||||||||||||||||||
Pennsylvania | 2 | 17,800,000 | 1.5 | 4.319 | 118 | 360 | 1.42 | 8.6 | 8.4 | 74.2 | 61.1 | ||||||||||||||||||
New Hampshire | 2 | 16,324,287 | 1.4 | 4.531 | 119 | 360 | 1.36 | 8.5 | 8.3 | 72.5 | 62.0 | ||||||||||||||||||
South Carolina | 1 | 16,000,000 | 1.4 | 4.300 | 120 | 300 | 1.68 | 12.6 | 11.0 | 65.8 | 52.2 | ||||||||||||||||||
Colorado | 1 | 15,500,000 | 1.3 | 4.330 | 119 | 0 | 1.82 | 8.8 | 8.0 | 69.8 | 69.8 | ||||||||||||||||||
Michigan | 2 | 15,114,439 | 1.3 | 4.525 | 119 | 359 | 1.64 | 10.8 | 10.0 | 67.1 | 55.4 | ||||||||||||||||||
Nebraska | 1 | 12,000,000 | 1.0 | 4.330 | 118 | 360 | 1.45 | 9.1 | 8.6 | 74.5 | 68.0 | ||||||||||||||||||
Kansas | 2 | 9,970,410 | 0.8 | 4.382 | 120 | 317 | 1.77 | 13.2 | 11.7 | 56.7 | 42.8 | ||||||||||||||||||
Illinois | 3 | 9,542,500 | 0.8 | 4.669 | 119 | 360 | 1.92 | 12.3 | 11.0 | 52.3 | 47.5 | ||||||||||||||||||
Missouri | 3 | 8,501,562 | 0.7 | 4.279 | 118 | 337 | 1.61 | 10.9 | 9.9 | 64.6 | 53.6 | ||||||||||||||||||
Utah | 1 | 7,727,050 | 0.7 | 4.490 | 118 | 328 | 1.80 | 12.8 | 11.5 | 69.6 | 54.1 | ||||||||||||||||||
Washington | 2 | 7,200,000 | 0.6 | 4.193 | 119 | 360 | 1.65 | 10.7 | 9.7 | 63.5 | 55.1 | ||||||||||||||||||
Kentucky | 1 | 6,607,250 | 0.6 | 4.300 | 120 | 0 | 2.00 | 9.1 | 8.7 | 64.9 | 64.9 | ||||||||||||||||||
Nevada | 1 | 6,370,000 | 0.5 | 4.300 | 120 | 0 | 2.00 | 9.1 | 8.7 | 64.9 | 64.9 | ||||||||||||||||||
Tennessee | 1 | 4,975,000 | 0.4 | 4.120 | 120 | 0 | 2.78 | 11.9 | 11.6 | 49.6 | 49.6 | ||||||||||||||||||
Connecticut | 1 | 3,416,086 | 0.3 | 4.680 | 119 | 359 | 1.41 | 8.9 | 8.8 | 74.3 | 60.5 | ||||||||||||||||||
West Virginia | 1 | 2,225,000 | 0.2 | 4.730 | 118 | 300 | 1.65 | 13.5 | 11.3 | 67.4 | 52.1 | ||||||||||||||||||
Total/Weighted Average: | 151 | $1,177,025,122 | 100.0 | % | 4.266 | % | 118 | 354 | 1.98 | x | 11.8 | % | 11.1 | % | 64.5 | % | 55.5 | % |
(1)For purposes of determining whether a mortgaged property is in Northern California or Southern California, Northern California includes areas with zip codes above 93600 and Southern California includes areas with zip codes of 93600 and below.
(2)Because this table presents information relating to the mortgaged properties and not the mortgage loans, the information for mortgage loans secured by more than one mortgaged property is based on allocated amounts (allocating the mortgage loan principal balance to each of those properties according to the relative appraised values of the mortgaged properties or the allocated loan amounts or property-specific release prices set forth in the related mortgage loan documents or in such other manner as the related mortgage loan seller deemed appropriate).
A-2-3 |
Wells Fargo Commercial Mortgage Trust 2015-C29
Annex A-2: Loan Pool Information
Range of Cut-off Date Balances | |||||||||||||||||||||||||||||
Weighted Average | |||||||||||||||||||||||||||||
Percent by | |||||||||||||||||||||||||||||
Number of | Aggregate | Remaining | Remaining | U/W NOI | U/W NCF | ||||||||||||||||||||||||
Mortgage | Aggregate Cut-off | Cut-off Date | Mortgage | Term to Maturity | Amortization | U/W NCF | Debt | Debt | Cut-off Date | Balloon or ARD | |||||||||||||||||||
Range of Cut-off Date Balances ($) | Loans | Date Balance ($) | Pool Balance (%) | Rate (%) | or ARD (mos.) | Term (mos.) | DSCR (x) | Yield (%) | Yield (%) | LTV (%) | LTV (%) | ||||||||||||||||||
750,000 - 1,000,000 | 3 | $2,550,000 | 0.2 | % | 3.835 | % | 119 | 360 | 7.53 | x | 37.4 | % | 37.4 | % | 10.9 | % | 9.1 | % | |||||||||||
1,000,001 - 2,000,000 | 23 | 35,019,508 | 3.0 | 3.994 | 117 | 373 | 6.78 | 37.0 | 36.3 | 33.8 | 28.5 | ||||||||||||||||||
2,000,001 - 3,000,000 | 18 | 47,620,905 | 4.0 | 4.148 | 115 | 339 | 3.37 | 18.4 | 17.8 | 49.2 | 41.1 | ||||||||||||||||||
3,000,001 - 4,000,000 | 14 | 48,776,901 | 4.1 | 4.254 | 119 | 346 | 2.03 | 12.7 | 12.0 | 60.6 | 49.3 | ||||||||||||||||||
4,000,001 - 5,000,000 | 8 | 37,870,775 | 3.2 | 4.180 | 104 | 350 | 4.07 | 22.9 | 22.2 | 50.7 | 43.5 | ||||||||||||||||||
5,000,001 - 6,000,000 | 8 | 43,913,626 | 3.7 | 4.337 | 119 | 359 | 1.89 | 11.6 | 10.9 | 58.9 | 49.3 | ||||||||||||||||||
6,000,001 - 7,000,000 | 6 | 39,555,000 | 3.4 | 4.333 | 119 | 341 | 1.47 | 9.9 | 9.0 | 68.8 | 57.0 | ||||||||||||||||||
7,000,001 - 8,000,000 | 9 | 67,350,050 | 5.7 | 4.224 | 120 | 364 | 2.40 | 13.9 | 13.1 | 61.6 | 50.8 | ||||||||||||||||||
8,000,001 - 9,000,000 | 1 | 8,989,249 | 0.8 | 4.490 | 119 | 359 | 1.40 | 9.4 | 8.5 | 74.9 | 60.6 | ||||||||||||||||||
9,000,001 - 10,000,000 | 9 | 84,563,894 | 7.2 | 4.166 | 119 | 353 | 1.70 | 11.1 | 10.1 | 65.3 | 53.5 | ||||||||||||||||||
10,000,001 - 15,000,000 | 13 | 161,924,439 | 13.8 | 4.432 | 115 | 355 | 1.51 | 9.7 | 9.0 | 68.6 | 59.1 | ||||||||||||||||||
15,000,001 - 20,000,000 | 7 | 121,385,708 | 10.3 | 4.416 | 120 | 351 | 1.64 | 10.5 | 9.7 | 65.3 | 56.7 | ||||||||||||||||||
20,000,001 - 30,000,000 | 9 | 227,172,567 | 19.3 | 4.262 | 119 | 352 | 1.56 | 9.6 | 8.9 | 69.6 | 59.7 | ||||||||||||||||||
30,000,001 - 50,000,000 | 4 | 150,332,500 | 12.8 | 4.173 | 119 | 360 | 1.72 | 9.2 | 8.5 | 65.8 | 61.5 | ||||||||||||||||||
90,000,001 - 100,000,000 | 1 | 100,000,000 | 8.5 | 4.200 | 120 | 360 | 1.40 | 9.1 | 8.2 | 70.4 | 61.2 | ||||||||||||||||||
Total/Weighted Average: | 133 | $1,177,025,122 | 100.0 | % | 4.266 | % | 118 | 354 | 1.98 | x | 11.8 | % | 11.1 | % | 64.5 | % | 55.5 | % |
A-2-4 |
Wells Fargo Commercial Mortgage Trust 2015-C29
Annex A-2: Loan Pool Information
Range of Underwritten Net Cash Flow Debt Service Coverage Ratios | |||||||||||||||||||||||||||||
Weighted Average | |||||||||||||||||||||||||||||
Percent by | |||||||||||||||||||||||||||||
Number of | Aggregate | Remaining | Remaining | U/W NOI | U/W NCF | ||||||||||||||||||||||||
Mortgage | Aggregate Cut-off | Cut-off Date | Mortgage | Term to Maturity | Amortization | U/W NCF | Debt | Debt | Cut-off Date | Balloon or ARD | |||||||||||||||||||
Range of Underwritten NCF DSCRs (x) | Loans | Date Balance ($) | Pool Balance (%) | Rate (%) | or ARD (mos.) | Term (mos.) | DSCR (x) | Yield (%) | Yield (%) | LTV (%) | LTV (%) | ||||||||||||||||||
1.13 - 1.20 | 1 | $5,500,000 | 0.5 | % | 4.430 | % | 120 | 300 | 1.13 | x | 7.5 | % | 7.5 | % | 64.2 | % | 56.5 | % | |||||||||||
1.21 - 1.30 | 8 | 101,008,004 | 8.6 | 4.387 | 112 | 354 | 1.26 | 8.0 | 7.7 | 73.9 | 62.1 | ||||||||||||||||||
1.31 - 1.40 | 13 | 261,415,308 | 22.2 | 4.254 | 119 | 357 | 1.38 | 8.9 | 8.2 | 72.0 | 60.6 | ||||||||||||||||||
1.41 - 1.50 | 17 | 193,202,784 | 16.4 | 4.290 | 119 | 349 | 1.45 | 9.7 | 8.8 | 67.9 | 57.8 | ||||||||||||||||||
1.51 - 1.60 | 18 | 125,579,626 | 10.7 | 4.261 | 119 | 350 | 1.55 | 10.1 | 9.3 | 70.3 | 58.3 | ||||||||||||||||||
1.61 - 1.70 | 17 | 152,080,916 | 12.9 | 4.346 | 117 | 348 | 1.65 | 11.1 | 10.1 | 66.2 | 56.2 | ||||||||||||||||||
1.71 - 1.80 | 9 | 45,736,291 | 3.9 | 4.321 | 119 | 353 | 1.77 | 11.0 | 10.2 | 67.1 | 58.7 | ||||||||||||||||||
1.81 - 1.90 | 6 | 54,958,896 | 4.7 | 4.307 | 116 | 360 | 1.84 | 11.5 | 10.1 | 65.9 | 59.1 | ||||||||||||||||||
1.91 - 2.00 | 2 | 42,605,000 | 3.6 | 4.374 | 120 | 360 | 1.99 | 9.7 | 9.1 | 61.9 | 61.2 | ||||||||||||||||||
2.01 - 2.25 | 8 | 80,433,690 | 6.8 | 4.259 | 115 | 345 | 2.10 | 11.8 | 11.1 | 53.3 | 48.2 | ||||||||||||||||||
2.26 - 2.50 | 2 | 34,510,000 | 2.9 | 4.469 | 119 | 0 | 2.40 | 12.5 | 10.9 | 55.5 | 55.5 | ||||||||||||||||||
2.76 - 3.00 | 3 | 10,075,000 | 0.9 | 4.120 | 120 | 0 | 2.80 | 12.0 | 11.7 | 49.2 | 49.2 | ||||||||||||||||||
3.01 - 3.50 | 2 | 6,375,000 | 0.5 | 3.805 | 120 | 360 | 3.25 | 16.2 | 16.0 | 33.9 | 31.0 | ||||||||||||||||||
3.51 - 4.00 | 3 | 11,223,691 | 1.0 | 3.665 | 118 | 358 | 3.75 | 20.7 | 20.7 | 27.5 | 21.6 | ||||||||||||||||||
4.01 - 21.73 | 24 | 52,320,916 | 4.4 | 3.676 | 119 | 405 | 9.50 | 48.9 | 48.9 | 12.6 | 10.9 | ||||||||||||||||||
Total/Weighted Average: | 133 | $1,177,025,122 | 100.0 | % | 4.266 | % | 118 | 354 | 1.98 | x | 11.8 | % | 11.1 | % | 64.5 | % | 55.5 | % |
A-2-5 |
Wells Fargo Commercial Mortgage Trust 2015-C29
Annex A-2: Loan Pool Information
Range of Underwritten Net Operating Income Debt Yields | |||||||||||||||||||||||||||||
Weighted Average | |||||||||||||||||||||||||||||
Percent by | |||||||||||||||||||||||||||||
Number of | Aggregate | Remaining | Remaining | U/W NOI | U/W NCF | ||||||||||||||||||||||||
Mortgage | Aggregate Cut-off | Cut-off Date | Mortgage | Term to Maturity | Amortization | U/W NCF | Debt | Debt | Cut-off Date | Balloon or ARD | |||||||||||||||||||
Range of Underwritten NOI Debt Yields (%) | Loans | Date Balance ($) | Pool Balance (%) | Rate (%) | or ARD (mos.) | Term (mos.) | DSCR (x) | Yield (%) | Yield (%) | LTV (%) | LTV (%) | ||||||||||||||||||
7.5 - 8.0 | 7 | $87,075,708 | 7.4 | % | 4.365 | % | 111 | 356 | 1.29 | x | 7.8 | % | 7.6 | % | 72.9 | % | 62.2 | % | |||||||||||
8.1 - 9.0 | 16 | 222,145,525 | 18.9 | 4.253 | 118 | 359 | 1.40 | 8.7 | 8.1 | 72.2 | 61.4 | ||||||||||||||||||
9.1 - 10.0 | 28 | 398,051,813 | 33.8 | 4.256 | 120 | 356 | 1.56 | 9.4 | 8.7 | 69.1 | 61.0 | ||||||||||||||||||
10.1 - 11.0 | 15 | 171,602,553 | 14.6 | 4.329 | 119 | 351 | 1.62 | 10.7 | 9.8 | 66.2 | 56.0 | ||||||||||||||||||
11.1 - 12.0 | 19 | 99,825,072 | 8.5 | 4.245 | 117 | 335 | 1.93 | 11.6 | 10.4 | 63.0 | 54.2 | ||||||||||||||||||
12.1 - 13.0 | 10 | 55,378,276 | 4.7 | 4.316 | 109 | 322 | 1.89 | 12.6 | 11.4 | 60.3 | 48.8 | ||||||||||||||||||
13.1 - 14.0 | 6 | 51,690,000 | 4.4 | 4.565 | 120 | 357 | 1.97 | 13.4 | 12.1 | 51.4 | 43.6 | ||||||||||||||||||
14.1 - 15.0 | 2 | 11,358,700 | 1.0 | 4.402 | 119 | 309 | 2.02 | 14.8 | 13.2 | 58.4 | 43.6 | ||||||||||||||||||
15.1 - 16.0 | 1 | 11,510,000 | 1.0 | 5.145 | 120 | 0 | 2.39 | 15.3 | 12.5 | 48.4 | 48.4 | ||||||||||||||||||
16.1 - 17.0 | 1 | 2,000,000 | 0.2 | 3.730 | 120 | 0 | 4.43 | 16.8 | 16.8 | 27.9 | 27.9 | ||||||||||||||||||
17.1 - 18.0 | 1 | 1,192,867 | 0.1 | 4.160 | 83 | 299 | 2.09 | 17.5 | 13.5 | 48.7 | 40.0 | ||||||||||||||||||
18.1 - 19.0 | 1 | 3,650,000 | 0.3 | 3.570 | 120 | 360 | 3.43 | 18.6 | 18.6 | 23.9 | 18.7 | ||||||||||||||||||
19.1 - 20.0 | 2 | 10,287,957 | 0.9 | 3.465 | 119 | 421 | 3.97 | 19.7 | 19.7 | 27.3 | 22.4 | ||||||||||||||||||
20.1 - 119.4 | 24 | 51,256,651 | 4.4 | 3.714 | 119 | 390 | 9.55 | 49.8 | 49.8 | 12.3 | 10.3 | ||||||||||||||||||
Total/Weighted Average: | 133 | $1,177,025,122 | 100.0 | % | 4.266 | % | 118 | 354 | 1.98 | x | 11.8 | % | 11.1 | % | 64.5 | % | 55.5 | % |
A-2-6 |
Wells Fargo Commercial Mortgage Trust 2015-C29
Annex A-2: Loan Pool Information
Range of Underwritten Net Cash Flow Debt Yields | |||||||||||||||||||||||||||||
Weighted Average | |||||||||||||||||||||||||||||
Percent by | |||||||||||||||||||||||||||||
Number of | Aggregate | Remaining | Remaining | U/W NOI | U/W NCF | ||||||||||||||||||||||||
Mortgage | Aggregate Cut-off | Cut-off Date | Mortgage | Term to Maturity | Amortization | U/W NCF | Debt | Debt | Cut-off Date | Balloon or ARD | |||||||||||||||||||
Range of Underwritten NCF Debt Yields (%) | Loans | Date Balance ($) | Pool Balance (%) | Rate (%) | or ARD (mos.) | Term (mos.) | DSCR (x) | Yield (%) | Yield (%) | LTV (%) | LTV (%) | ||||||||||||||||||
7.5 - 8.0 | 14 | $208,616,766 | 17.7 | % | 4.298 | % | 116 | 358 | 1.36 | x | 8.2 | % | 7.8 | % | 73.0 | % | 62.6 | % | |||||||||||
8.1 - 9.0 | 30 | 436,452,410 | 37.1 | 4.252 | 119 | 356 | 1.52 | 9.2 | 8.5 | 69.6 | 60.8 | ||||||||||||||||||
9.1 - 10.0 | 24 | 225,289,933 | 19.1 | 4.300 | 119 | 351 | 1.59 | 10.4 | 9.6 | 67.2 | 57.1 | ||||||||||||||||||
10.1 - 11.0 | 19 | 140,112,498 | 11.9 | 4.343 | 116 | 339 | 1.83 | 11.7 | 10.5 | 64.8 | 55.5 | ||||||||||||||||||
11.1 - 12.0 | 9 | 46,296,930 | 3.9 | 4.274 | 112 | 341 | 2.09 | 12.7 | 11.6 | 58.1 | 49.0 | ||||||||||||||||||
12.1 - 13.0 | 6 | 25,885,410 | 2.2 | 4.742 | 119 | 323 | 2.23 | 14.4 | 12.4 | 47.5 | 42.2 | ||||||||||||||||||
13.1 - 14.0 | 3 | 27,176,567 | 2.3 | 4.568 | 118 | 336 | 2.13 | 14.3 | 13.6 | 40.2 | 31.1 | ||||||||||||||||||
16.1 - 17.0 | 1 | 2,000,000 | 0.2 | 3.730 | 120 | 0 | 4.43 | 16.8 | 16.8 | 27.9 | 27.9 | ||||||||||||||||||
18.1 - 19.0 | 1 | 3,650,000 | 0.3 | 3.570 | 120 | 360 | 3.43 | 18.6 | 18.6 | 23.9 | 18.7 | ||||||||||||||||||
19.1 - 20.0 | 2 | 10,287,957 | 0.9 | 3.465 | 119 | 421 | 3.97 | 19.7 | 19.7 | 27.3 | 22.4 | ||||||||||||||||||
20.1 - 119.4 | 24 | 51,256,651 | 4.4 | 3.714 | 119 | 390 | 9.55 | 49.8 | 49.8 | 12.3 | 10.3 | ||||||||||||||||||
Total/Weighted Average: | 133 | $1,177,025,122 | 100.0 | % | 4.266 | % | 118 | 354 | 1.98 | x | 11.8 | % | 11.1 | % | 64.5 | % | 55.5 | % |
A-2-7 |
Wells Fargo Commercial Mortgage Trust 2015-C29
Annex A-2: Loan Pool Information
Range of Loan-to-Value Ratios as of the Cut-off Date | |||||||||||||||||||||||||||||
Weighted Average | |||||||||||||||||||||||||||||
Percent by | |||||||||||||||||||||||||||||
Number of | Aggregate | Remaining | Remaining | U/W NOI | U/W NCF | ||||||||||||||||||||||||
Mortgage | Aggregate Cut-off | Cut-off Date | Mortgage | Term to Maturity | Amortization | U/W NCF | Debt | Debt | Cut-off Date | Balloon or ARD | |||||||||||||||||||
Range of Cut-off Date LTV Ratios (%) | Loans | Date Balance ($) | Pool Balance (%) | Rate (%) | or ARD (mos.) | Term (mos.) | DSCR (x) | Yield (%) | Yield (%) | LTV (%) | LTV (%) | ||||||||||||||||||
3.0 - 20.0 | 20 | $41,262,200 | 3.5 | % | 3.700 | % | 119 | 392 | 10.81 | x | 56.4 | % | 56.4 | % | 9.2 | % | 7.7 | % | |||||||||||
20.1 - 25.0 | 4 | 13,545,400 | 1.2 | 3.607 | 119 | 412 | 4.21 | 21.0 | 20.9 | 23.6 | 19.9 | ||||||||||||||||||
25.1 - 30.0 | 5 | 28,887,007 | 2.5 | 4.242 | 120 | 366 | 2.94 | 16.4 | 16.4 | 28.9 | 23.7 | ||||||||||||||||||
40.1 - 45.0 | 1 | 5,360,000 | 0.5 | 4.890 | 119 | 360 | 1.91 | 13.9 | 12.1 | 41.3 | 35.6 | ||||||||||||||||||
45.1 - 50.0 | 9 | 32,914,407 | 2.8 | 4.468 | 118 | 301 | 2.40 | 13.4 | 12.0 | 48.7 | 44.8 | ||||||||||||||||||
50.1 - 55.0 | 2 | 18,747,420 | 1.6 | 3.968 | 120 | 360 | 1.95 | 11.9 | 11.2 | 53.2 | 42.3 | ||||||||||||||||||
55.1 - 60.0 | 12 | 105,066,220 | 8.9 | 4.299 | 113 | 332 | 1.83 | 11.4 | 10.3 | 58.7 | 49.5 | ||||||||||||||||||
60.1 - 65.0 | 11 | 175,151,546 | 14.9 | 4.239 | 120 | 346 | 1.74 | 9.9 | 9.0 | 64.1 | 59.1 | ||||||||||||||||||
65.1 - 70.0 | 31 | 250,753,883 | 21.3 | 4.311 | 119 | 350 | 1.61 | 10.4 | 9.4 | 68.4 | 58.2 | ||||||||||||||||||
70.1 - 75.0 | 38 | 505,337,039 | 42.9 | 4.303 | 117 | 357 | 1.41 | 9.1 | 8.4 | 73.2 | 62.2 | ||||||||||||||||||
Total/Weighted Average: | 133 | $1,177,025,122 | 100.0 | % | 4.266 | % | 118 | 354 | 1.98 | x | 11.8 | % | 11.1 | % | 64.5 | % | 55.5 | % |
A-2-8 |
Wells Fargo Commercial Mortgage Trust 2015-C29
Annex A-2: Loan Pool Information
Range of Loan-to-Value Ratios as of the Maturity Date or ARD | |||||||||||||||||||||||||||||
Weighted Average | |||||||||||||||||||||||||||||
Percent by | |||||||||||||||||||||||||||||
Number of | Aggregate | Remaining | Remaining | U/W NOI | U/W NCF | ||||||||||||||||||||||||
Mortgage | Aggregate Cut-off | Cut-off Date | Mortgage | Term to Maturity | Amortization | U/W NCF | Debt | Debt | Cut-off Date | Balloon or ARD | |||||||||||||||||||
Range of Balloon or ARD LTV Ratios (%) | Loans | Date Balance ($) | Pool Balance (%) | Rate (%) | or ARD (mos.) | Term (mos.) | DSCR (x) | Yield (%) | Yield (%) | LTV (%) | LTV (%) | ||||||||||||||||||
2.4 - 20.0 | 23 | $50,402,610 | 4.3 | % | 3.694 | % | 119 | 377 | 9.45 | x | 49.7 | % | 49.7 | % | 12.8 | % | 9.5 | % | |||||||||||
20.1 - 25.0 | 6 | 33,682,407 | 2.9 | 4.146 | 119 | 385 | 3.15 | 17.2 | 17.1 | 28.1 | 23.1 | ||||||||||||||||||
25.1 - 30.0 | 1 | 2,000,000 | 0.2 | 3.730 | 120 | 0 | 4.43 | 16.8 | 16.8 | 27.9 | 27.9 | ||||||||||||||||||
35.1 - 40.0 | 4 | 11,573,996 | 1.0 | 4.496 | 115 | 353 | 1.89 | 13.2 | 11.6 | 45.4 | 37.6 | ||||||||||||||||||
40.1 - 45.0 | 4 | 53,187,629 | 4.5 | 4.204 | 119 | 320 | 1.75 | 11.9 | 10.9 | 57.2 | 43.0 | ||||||||||||||||||
45.1 - 50.0 | 15 | 77,491,295 | 6.6 | 4.423 | 120 | 336 | 1.96 | 12.3 | 10.9 | 57.1 | 47.9 | ||||||||||||||||||
50.1 - 55.0 | 17 | 101,084,871 | 8.6 | 4.385 | 114 | 335 | 1.60 | 10.9 | 10.0 | 65.9 | 53.5 | ||||||||||||||||||
55.1 - 60.0 | 27 | 303,486,327 | 25.8 | 4.238 | 119 | 355 | 1.54 | 9.7 | 8.8 | 68.8 | 58.3 | ||||||||||||||||||
60.1 - 65.0 | 25 | 403,906,510 | 34.3 | 4.301 | 119 | 360 | 1.55 | 9.3 | 8.6 | 70.5 | 62.0 | ||||||||||||||||||
65.1 - 69.8 | 11 | 140,209,476 | 11.9 | 4.299 | 113 | 360 | 1.54 | 9.2 | 8.7 | 72.8 | 67.2 | ||||||||||||||||||
Total/Weighted Average: | 133 | $1,177,025,122 | 100.0 | % | 4.266 | % | 118 | 354 | 1.98 | x | 11.8 | % | 11.1 | % | 64.5 | % | 55.5 | % |
A-2-9 |
Wells Fargo Commercial Mortgage Trust 2015-C29
Annex A-2: Loan Pool Information
Range of Mortgage Rates | |||||||||||||||||||||||||||||
Weighted Average | |||||||||||||||||||||||||||||
Percent by | |||||||||||||||||||||||||||||
Number of | Aggregate | Remaining | Remaining | U/W NOI | U/W NCF | ||||||||||||||||||||||||
Mortgage | Aggregate Cut-off | Cut-off Date | Mortgage | Term to Maturity | Amortization | U/W NCF | Debt | Debt | Cut-off Date | Balloon or ARD | |||||||||||||||||||
Range of Mortgage Rates (%) | Loans | Date Balance ($) | Pool Balance (%) | Rate (%) | or ARD (mos.) | Term (mos.) | DSCR (x) | Yield (%) | Yield (%) | LTV (%) | LTV (%) | ||||||||||||||||||
3.380 - 3.500 | 4 | $16,628,398 | 1.4 | % | 3.442 | % | 119 | 397 | 8.31 | x | 43.4 | % | 43.4 | % | 19.3 | % | 15.8 | % | |||||||||||
3.501 - 3.750 | 11 | 22,481,385 | 1.9 | 3.633 | 119 | 379 | 8.77 | 44.8 | 44.8 | 14.3 | 12.2 | ||||||||||||||||||
3.751 - 4.000 | 17 | 61,779,778 | 5.2 | 3.894 | 114 | 370 | 4.44 | 24.4 | 24.0 | 38.2 | 31.0 | ||||||||||||||||||
4.001 - 4.250 | 37 | 491,509,181 | 41.8 | 4.158 | 119 | 358 | 1.59 | 9.6 | 8.8 | 68.0 | 59.0 | ||||||||||||||||||
4.251 - 4.500 | 41 | 429,141,617 | 36.5 | 4.353 | 119 | 347 | 1.58 | 10.0 | 9.2 | 69.2 | 59.7 | ||||||||||||||||||
4.501 - 4.750 | 20 | 134,418,828 | 11.4 | 4.626 | 114 | 345 | 1.57 | 10.6 | 9.9 | 65.0 | 54.1 | ||||||||||||||||||
4.751 - 5.000 | 1 | 5,360,000 | 0.5 | 4.890 | 119 | 360 | 1.91 | 13.9 | 12.1 | 41.3 | 35.6 | ||||||||||||||||||
5.001 - 5.250 | 1 | 11,510,000 | 1.0 | 5.145 | 120 | 0 | 2.39 | 15.3 | 12.5 | 48.4 | 48.4 | ||||||||||||||||||
5.251 - 5.390 | 1 | 4,195,936 | 0.4 | 5.390 | 59 | 359 | 1.62 | 12.1 | 10.9 | 56.0 | 52.0 | ||||||||||||||||||
Total/Weighted Average: | 133 | $1,177,025,122 | 100.0 | % | 4.266 | % | 118 | 354 | 1.98 | x | 11.8 | % | 11.1 | % | 64.5 | % | 55.5 | % |
A-2-10 |
Wells Fargo Commercial Mortgage Trust 2015-C29
Annex A-2: Loan Pool Information
Range of Original Terms to Maturity or ARD | |||||||||||||||||||||||||||||
Weighted Average | |||||||||||||||||||||||||||||
Percent by | |||||||||||||||||||||||||||||
Number of | Aggregate | Remaining | Remaining | U/W NOI | U/W NCF | ||||||||||||||||||||||||
Mortgage | Aggregate Cut-off | Cut-off Date | Mortgage | Term to Maturity | Amortization | U/W NCF | Debt | Debt | Cut-off Date | Balloon or ARD | |||||||||||||||||||
Range of Original Terms to Maturity or ARD (mos.) | Loans | Date Balance ($) | Pool Balance (%) | Rate (%) | or ARD (mos.) | Term (mos.) | DSCR (x) | Yield (%) | Yield (%) | LTV (%) | LTV (%) | ||||||||||||||||||
60 | 4 | $23,984,534 | 2.0 | % | 4.549 | % | 58 | 358 | 1.53 | x | 10.2 | % | 9.4 | % | 66.7 | % | 61.8 | % | |||||||||||
61 - 84 | 1 | 1,192,867 | 0.1 | 4.160 | 83 | 299 | 2.09 | 17.5 | 13.5 | 48.7 | 40.0 | ||||||||||||||||||
85 - 120 | 128 | 1,151,847,721 | 97.9 | 4.260 | 119 | 354 | 1.99 | 11.9 | 11.1 | 64.4 | 55.4 | ||||||||||||||||||
Total/Weighted Average: | 133 | $1,177,025,122 | 100.0 | % | 4.266 | % | 118 | 354 | 1.98 | x | 11.8 | % | 11.1 | % | 64.5 | % | 55.5 | % |
A-2-11 |
Wells Fargo Commercial Mortgage Trust 2015-C29
Annex A-2: Loan Pool Information
Range of Remaining Terms to Maturity or ARD as of the Cut-off Date | |||||||||||||||||||||||||||||
Weighted Average | |||||||||||||||||||||||||||||
Percent by | |||||||||||||||||||||||||||||
Number of | Aggregate | Remaining | Remaining | U/W NOI | U/W NCF | ||||||||||||||||||||||||
Mortgage | Aggregate Cut-off | Cut-off Date | Mortgage | Term to Maturity | Amortization | U/W NCF | Debt | Debt | Cut-off Date | Balloon or ARD | |||||||||||||||||||
Range of Remaining Terms to Maturity or ARD (mos.) | Loans | Date Balance ($) | Pool Balance (%) | Rate (%) | or ARD (mos.) | Term (mos.) | DSCR (x) | Yield (%) | Yield (%) | LTV (%) | LTV (%) | ||||||||||||||||||
54 - 60 | 4 | $23,984,534 | 2.0 | % | 4.549 | % | 58 | 358 | 1.53 | x | 10.2 | % | 9.4 | % | 66.7 | % | 61.8 | % | |||||||||||
61 - 84 | 1 | 1,192,867 | 0.1 | 4.160 | 83 | 299 | 2.09 | 17.5 | 13.5 | 48.7 | 40.0 | ||||||||||||||||||
85 - 120 | 128 | 1,151,847,721 | 97.9 | 4.260 | 119 | 354 | 1.99 | 11.9 | 11.1 | 64.4 | 55.4 | ||||||||||||||||||
Total/Weighted Average: | 133 | $1,177,025,122 | 100.0 | % | 4.266 | % | 118 | 354 | 1.98 | x | 11.8 | % | 11.1 | % | 64.5 | % | 55.5 | % |
A-2-12 |
Wells Fargo Commercial Mortgage Trust 2015-C29
Annex A-2: Loan Pool Information
Range of Original Amortization Terms | |||||||||||||||||||||||||||||
Weighted Average | |||||||||||||||||||||||||||||
Percent by | |||||||||||||||||||||||||||||
Number of | Aggregate | Remaining | Remaining | U/W NOI | U/W NCF | ||||||||||||||||||||||||
Mortgage | Aggregate Cut-off | Cut-off Date | Mortgage | Term to Maturity | Amortization | U/W NCF | Debt | Debt | Cut-off Date | Balloon or ARD | |||||||||||||||||||
Range of Original Amortization Terms (mos.) | Loans | Date Balance ($) | Pool Balance (%) | Rate (%) | or ARD (mos.) | Term (mos.) | DSCR (x) | Yield (%) | Yield (%) | LTV (%) | LTV (%) | ||||||||||||||||||
Interest Only | 14 | $149,405,000 | 12.7 | % | 4.261 | % | 120 | 0 | 2.39 | x | 11.0 | % | 10.2 | % | 59.2 | % | 59.2 | % | |||||||||||
180 | 1 | 2,390,410 | 0.2 | 3.880 | 119 | 179 | 1.41 | 12.8 | 12.4 | 48.8 | 19.8 | ||||||||||||||||||
241 - 300 | 16 | 116,775,130 | 9.9 | 4.397 | 119 | 300 | 1.54 | 11.3 | 10.2 | 65.3 | 49.6 | ||||||||||||||||||
301 - 360 | 97 | 891,191,493 | 75.7 | 4.262 | 117 | 359 | 1.86 | 11.6 | 10.9 | 66.2 | 56.5 | ||||||||||||||||||
421 - 480 | 5 | 17,263,089 | 1.5 | 3.685 | 119 | 479 | 7.27 | 35.1 | 35.1 | 16.8 | 14.7 | ||||||||||||||||||
Total/Weighted Average: | 133 | $1,177,025,122 | 100.0 | % | 4.266 | % | 118 | 354 | 1.98 | x | 11.8 | % | 11.1 | % | 64.5 | % | 55.5 | % |
A-2-13 |
Wells Fargo Commercial Mortgage Trust 2015-C29
Annex A-2: Loan Pool Information
Range of Remaining Amortization Terms as of the Cut-off Date(1) | |||||||||||||||||||||||||||||
Weighted Average | |||||||||||||||||||||||||||||
Percent by | |||||||||||||||||||||||||||||
Number of | Aggregate | Remaining | Remaining | U/W NOI | U/W NCF | ||||||||||||||||||||||||
Mortgage | Aggregate Cut-off | Cut-off Date | Mortgage | Term to Maturity | Amortization | U/W NCF | Debt | Debt | Cut-off Date | Balloon or ARD | |||||||||||||||||||
Range of Remaining Amortization Terms (mos.) | Loans | Date Balance ($) | Pool Balance (%) | Rate (%) | or ARD (mos.) | Term (mos.) | DSCR (x) | Yield (%) | Yield (%) | LTV (%) | LTV (%) | ||||||||||||||||||
Interest Only | 14 | $149,405,000 | 12.7 | % | 4.261 | % | 120 | 0 | 2.39 | x | 11.0 | % | 10.2 | % | 59.2 | % | 59.2 | % | |||||||||||
179 - 180 | 1 | 2,390,410 | 0.2 | 3.880 | 119 | 179 | 1.41 | 12.8 | 12.4 | 48.8 | 19.8 | ||||||||||||||||||
241 - 300 | 16 | 116,775,130 | 9.9 | 4.397 | 119 | 300 | 1.54 | 11.3 | 10.2 | 65.3 | 49.6 | ||||||||||||||||||
301 - 360 | 97 | 891,191,493 | 75.7 | 4.262 | 117 | 359 | 1.86 | 11.6 | 10.9 | 66.2 | 56.5 | ||||||||||||||||||
421 - 480 | 5 | 17,263,089 | 1.5 | 3.685 | 119 | 479 | 7.27 | 35.1 | 35.1 | 16.8 | 14.7 | ||||||||||||||||||
Total/Weighted Average: | 133 | $1,177,025,122 | 100.0 | % | 4.266 | % | 118 | 354 | 1.98 | x | 11.8 | % | 11.1 | % | 64.5 | % | 55.5 | % |
(1) The remaining amortization term shown for any mortgage loan that is interest-only for part of its term does not include the number of months in its interest-only period and reflects only the number of months as of the commencement of amortization remaining from the end of such interest-only period.
A-2-14 |
Wells Fargo Commercial Mortgage Trust 2015-C29
Annex A-2: Loan Pool Information
Mortgage Loans by Amortization Type | |||||||||||||||||||||||||||||
Weighted Average | |||||||||||||||||||||||||||||
Percent by | |||||||||||||||||||||||||||||
Number of | Aggregate | Remaining | Remaining | U/W NOI | U/W NCF | ||||||||||||||||||||||||
Mortgage | Aggregate Cut-off | Cut-off Date | Mortgage | Term to Maturity | Amortization | U/W NCF | Debt | Debt | Cut-off Date | Balloon or ARD | |||||||||||||||||||
Amortization Type | Loans | Date Balance ($) | Pool Balance (%) | Rate (%) | or ARD (mos.) | Term (mos.) | DSCR (x) | Yield (%) | Yield (%) | LTV (%) | LTV (%) | ||||||||||||||||||
Interest-only, Amortizing Balloon | 50 | $625,323,500 | 53.1 | % | 4.289 | % | 118 | 355 | 1.49 | x | 9.7 | % | 8.9 | % | 69.6 | % | 60.5 | % | |||||||||||
Amortizing Balloon | 67 | 395,812,325 | 33.6 | 4.229 | 117 | 353 | 2.60 | 15.5 | 14.9 | 58.3 | 46.2 | ||||||||||||||||||
Interest-only, Balloon | 14 | 149,405,000 | 12.7 | 4.261 | 120 | 0 | 2.39 | 11.0 | 10.2 | 59.2 | 59.2 | ||||||||||||||||||
Amortizing ARD | 2 | 6,484,296 | 0.6 | 4.357 | 119 | 329 | 1.37 | 9.1 | 8.6 | 63.0 | 48.2 | ||||||||||||||||||
Total/Weighted Average: | 133 | $1,177,025,122 | 100.0 | % | 4.266 | % | 118 | 354 | 1.98 | x | 11.8 | % | 11.1 | % | 64.5 | % | 55.5 | % |
A-2-15 |
Wells Fargo Commercial Mortgage Trust 2015-C29
Annex A-2: Loan Pool Information
Mortgage Loans by Loan Purpose | |||||||||||||||||||||||||||||
Weighted Average | |||||||||||||||||||||||||||||
Percent by | |||||||||||||||||||||||||||||
Number of | Aggregate | Remaining | Remaining | U/W NOI | U/W NCF | ||||||||||||||||||||||||
Mortgage | Aggregate Cut-off | Cut-off Date | Mortgage | Term to Maturity | Amortization | U/W NCF | Debt | Debt | Cut-off Date | Balloon or ARD | |||||||||||||||||||
Loan Purpose | Loans | Date Balance ($) | Pool Balance (%) | Rate (%) | or ARD (mos.) | Term (mos.) | DSCR (x) | Yield (%) | Yield (%) | LTV (%) | LTV (%) | ||||||||||||||||||
Refinance | 99 | $866,806,304 | 73.6 | % | 4.235 | % | 119 | 354 | 2.12 | x | 12.6 | % | 11.8 | % | 62.9 | % | 53.4 | % | |||||||||||
Acquisition | 33 | 306,022,882 | 26.0 | 4.337 | 116 | 355 | 1.58 | 9.8 | 9.0 | 69.0 | 61.5 | ||||||||||||||||||
Recapitalization | 1 | 4,195,936 | 0.4 | 5.390 | 59 | 359 | 1.62 | 12.1 | 10.9 | 56.0 | 52.0 | ||||||||||||||||||
Total/Weighted Average: | 133 | $1,177,025,122 | 100.0 | % | 4.266 | % | 118 | 354 | 1.98 | x | 11.8 | % | 11.1 | % | 64.5 | % | 55.5 | % |
A-2-16 |
Wells Fargo Commercial Mortgage Trust 2015-C29
Annex A-2: Loan Pool Information
Mortgage Loans by Lockbox Type | |||||||||||||||||||||||||||||
Weighted Average | |||||||||||||||||||||||||||||
Percent by | |||||||||||||||||||||||||||||
Number of | Aggregate | Remaining | Remaining | U/W NOI | U/W NCF | ||||||||||||||||||||||||
Mortgage | Aggregate Cut-off | Cut-off Date | Mortgage | Term to Maturity | Amortization | U/W NCF | Debt | Debt | Cut-off Date | Balloon or ARD | |||||||||||||||||||
Type of Lockbox | Loans | Date Balance ($) | Pool Balance (%) | Rate (%) | or ARD (mos.) | Term (mos.) | DSCR (x) | Yield (%) | Yield (%) | LTV (%) | LTV (%) | ||||||||||||||||||
Springing (Without Established Account) | 60 | $546,961,117 | 46.5 | % | 4.320 | % | 117 | 351 | 1.65 | x | 9.9 | % | 9.2 | % | 68.2 | % | 59.6 | % | |||||||||||
Soft/Springing Cash Management | 14 | 221,312,623 | 18.8 | 4.288 | 118 | 356 | 1.49 | 9.8 | 8.9 | 69.5 | 59.4 | ||||||||||||||||||
None | 50 | 161,065,465 | 13.7 | 4.061 | 119 | 371 | 4.52 | 24.4 | 24.0 | 39.3 | 32.4 | ||||||||||||||||||
Hard/Springing Cash Management | 8 | 147,685,916 | 12.5 | 4.302 | 119 | 342 | 1.54 | 10.2 | 9.2 | 66.7 | 55.7 | ||||||||||||||||||
Hard/Upfront Cash Management | 1 | 100,000,000 | 8.5 | 4.200 | 120 | 360 | 1.40 | 9.1 | 8.2 | 70.4 | 61.2 | ||||||||||||||||||
Total/Weighted Average: | 133 | $1,177,025,122 | 100.0 | % | 4.266 | % | 118 | 354 | 1.98 | x | 11.8 | % | 11.1 | % | 64.5 | % | 55.5 | % |
A-2-17 |
Wells Fargo Commercial Mortgage Trust 2015-C29
Annex A-2: Loan Pool Information
Mortgage Loans by Escrow Type
Initial | Monthly | Springing | |||||||||||||||||
Percent by | Percent by | Percent by | |||||||||||||||||
Number of | Aggregate | Number of | Aggregate | Number of | Aggregate | ||||||||||||||
Mortgage | Aggregate Cut-off | Cut-off Date | Mortgage | Aggregate Cut-off | Cut-off Date | Mortgage | Aggregate Cut-off | Cut-off Date | |||||||||||
Type of Escrow | Loans | Date Balance ($) | Pool Balance (%) | Loans | Date Balance ($) | Pool Balance (%) | Loans | Date Balance ($) | Pool Balance (%) | ||||||||||
Tax Escrow | 104 | $999,025,559 | 84.9% | 106 | $1,005,478,811 | 85.4% | 27 | $171,546,311 | 14.6% | ||||||||||
Insurance Escrow | 63 | $539,852,097 | 45.9% | 64 | $552,527,097 | 46.9% | 67 | $613,505,468 | 52.1% | ||||||||||
Replacement Reserve | 17 | $146,438,108 | 12.4% | 88 | $873,431,471 | 74.2% | 28 | $329,810,043 | 28.0% | ||||||||||
TI/LC Reserve(1) | 18 | $140,195,542 | 20.5% | 44 | $523,909,300 | 76.7% | 18 | $314,135,424 | 46.0% |
(1) | The percentage of Cut-off Date Pool Balance for loans with TI/LC reserves is based on the aggregate principal balance of loans secured in whole or in part by office, retail, industrial and mixed-use properties. |
A-2-18 |
Wells Fargo Commercial Mortgage Trust 2015-C29
Annex A-2: Loan Pool Information
Percentage of Mortgage Pool by Prepayment Restriction(1)(2)
June | June | June | June | June | June | June | June | June | June | June | ||||||||||||||||||||||
Prepayment Restriction | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |||||||||||||||||||||
Locked Out | 94.22 | % | 94.27 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||
Defeasance | 0.00 | 0.00 | 82.98 | 82.98 | 82.94 | 82.55 | 82.52 | 82.46 | 82.43 | 80.70 | 0.00 | |||||||||||||||||||||
Yield Maintenance | 5.78 | 5.73 | 17.02 | 17.02 | 17.06 | 17.45 | 17.48 | 16.44 | 16.49 | 16.54 | 0.00 | |||||||||||||||||||||
Prepayment Premium | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1.10 | 1.09 | 1.08 | 0.00 | |||||||||||||||||||||
Open | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1.69 | 0.00 | |||||||||||||||||||||
Total: | 100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % | 0.00 | % |
Mortgage Pool Balance | ||||||||||||||||||||||
Outstanding (in millions) | $1,177.03 | $1,169.98 | $1,160.78 | $1,148.87 | $1,133.53 | $1,094.92 | $1,075.37 | $1,053.98 | $1,032.70 | $1,010.59 | $0.00 | |||||||||||
Percent of Aggregate | ||||||||||||||||||||||
Cut-off Date Pool Balance | 100.00% | 99.40% | 98.62% | 97.61% | 96.30% | 93.02% | 91.36% | 89.55% | 87.74% | 85.86% | 0.00% |
(1) | Prepayment provisions in effect as a percentage of outstanding Mortgage Loan balances as of the indicated date assuming no prepayments on the Mortgage Loans, if any. |
(2) | Assumes yield maintenance for each Mortgage Loan with the option to defease or pay yield maintenance. |
A-2-19 |
[THIS PAGE INTENTIONALLY LEFT BLANK.]
Annex A-3
Summaries of the Fifteen Largest Mortgage Loans
A-3-1 |
HUTCHINSON METRO CENTER I |
A-3-2 |
HUTCHINSON METRO CENTER I |
A-3-3 |
No. 1 – Hutchinson Metro Center I | |||||||
Loan Information | Property Information | ||||||
Mortgage Loan Seller: | Wells Fargo Bank, National Association | Single Asset/Portfolio: | Single Asset | ||||
Credit Assessment (Fitch/KBRA/Moody's): | NR/NR/NR | Property Type: | Office | ||||
Original Principal Balance: | $100,000,000 | Specific Property Type: | Suburban | ||||
Cut-off Date Principal Balance: | $100,000,000 | Location: | Bronx, NY | ||||
% of Initial Pool Balance: | 8.5% | Size: | 422,452 SF | ||||
Loan Purpose: | Refinance | Cut-off Date Principal Balance Per SF: | $236.71 | ||||
Borrower Name: | Hutch Metro Center I LLC | Year Built/Renovated: | 1974/2006 | ||||
Sponsor: | Joseph Simone | Title Vesting: | Fee | ||||
Mortgage Rate: | 4.200% | Property Manager: | Self-managed | ||||
Note Date: | May 12, 2015 | 3rd Most Recent Occupancy (As of): | 99.4% (12/31/2012) | ||||
Anticipated Repayment Date: | NAP | 2nd Most Recent Occupancy (As of): | 100.0% (12/31/2013) | ||||
Maturity Date: | June 11, 2025 | Most Recent Occupancy (As of): | 99.7% (12/31/2014) | ||||
IO Period: | 36 months | Current Occupancy (As of)(2): | 100.0% (4/1/2015) | ||||
Loan Term (Original): | 120 months | ||||||
Seasoning: | 0 months | Underwriting and Financial Information: | |||||
Amortization Term (Original): | 360 months | ||||||
Loan Amortization Type: | Interest-only, Amortizing Balloon | 3rdMost Recent NOI (As of): | $8,953,898 (12/31/2012) | ||||
Interest Accrual Method: | Actual/360 | 2ndMost Recent NOI (As of): | $9,155,415 (12/31/2013) | ||||
Call Protection: | L(24),D(92),O(4) | Most Recent NOI (As of): | $9,280,842 (12/31/2014) | ||||
Lockbox Type: | Hard/Upfront Cash Management | ||||||
Additional Debt: | None | ||||||
Additional Debt Type: | NAP | ||||||
U/W Revenues: | $16,203,748 | ||||||
U/W Expenses: | $7,070,708 | ||||||
U/W NOI: | $9,133,039 | ||||||
Escrows and Reserves(1): | U/W NCF: | $8,228,451 | |||||
U/W NOI DSCR: | 1.56x | ||||||
Type: | Initial | Monthly | Cap (If Any) | U/W NCF DSCR: | 1.40x | ||
Taxes | $229,840 | $42,338 | NAP | U/W NOI Debt Yield: | 9.1% | ||
Insurance | $0 | Springing | NAP | U/W NCF Debt Yield: | 8.2% | ||
Replacement Reserves | $0 | $8,801 | NAP | As-Is Appraised Value: | $142,000,000 | ||
TI/LC Reserve | $0 | $49,286 | $1,500,000 | As-Is Appraisal Valuation Date: | April 1, 2015 | ||
Deferred Maintenance | $49,688 | $0 | NAP | Cut-off Date LTV Ratio: | 70.4% | ||
Visiting Nurse Reserve | $2,000,000 | $0 | NAP | LTV Ratio at Maturity or ARD: | 61.2% | ||
(1) | See “Escrows” section. |
(2) | Current Occupancy includes the Visiting Nurse Service of NY space (55,859 square feet; 13.2% of net rentable area). Visiting Nurse Service of NY did not deliver notice of renewal prior to its notice date of November 30, 2014 and its lease is scheduled to expire on November 30, 2015. Current Occupancy excluding this tenant is 86.8%. See “Historical Occupancy” and “Cash Flow Analysis” sections. |
The Mortgage Loan.The mortgage loan (the “Hutchinson Metro Center I Mortgage Loan”) is evidenced by a single promissory note that is secured by a first mortgage encumbering an office building located in the Bronx, New York (the “Hutchinson Metro Center I Property”). The Hutchinson Metro Center I Mortgage Loan was originated on May 12, 2015 by Wells Fargo Bank, National Association. The Hutchinson Metro Center I Mortgage Loan had an original principal balance of $100,000,000, has an outstanding principal balance as of the Cut-off Date of $100,000,000 and accrues interest at an interest rate of 4.200%per annum. The Hutchinson Metro Center I Mortgage Loan had an initial term of 120 months, has a remaining term of 120 months as of the Cut-off Date and requires interest-only payments for the first 36 payments following origination and, thereafter, requires payments of principal and interest based on a 30-year amortization schedule. The Hutchinson Metro Center I Mortgage Loan matures on June 11, 2025.
Following the lockout period, the borrower has the right to defease the Hutchinson Metro Center I Mortgage Loan in whole, but not in part, on any date before March 11, 2025. In addition, the Hutchinson Metro Center I Mortgage Loan is prepayable without penalty on or after March 11, 2025.
A-3-4 |
HUTCHINSON METRO CENTER I |
Sources and Uses
Sources | Uses | |||||||
Original loan amount | $100,000,000 | 100.0% | Loan payoff(1) | $80,035,665 | 80.0% | |||
Reserves | 2,279,508 | 2.3 | ||||||
Closings costs | 1,260,620 | 1.3 | ||||||
Return of equity | 16,424,207 | 16.4 | ||||||
Total Sources | $100,000,000 | 100.0% | Total Uses | $100,000,000 | 100.0% |
(1) | The Hutchinson Metro Center I Property was previously securitized in the JPMCC 2005-LDP2 transaction. |
The Property.The Hutchinson Metro Center I Property is a four-story, class A office building totaling 422,452 square feet located in the Westchester Heights section of the Bronx, New York, approximately 9.4 miles northeast of Manhattan. The Hutchinson Metro Center I Property is part of the larger Hutchinson Metro Center Complex, a 42.0-acre suburban style campus comprised of four class A office buildings (including the Hutchinson Metro Center I Property) totaling approximately 1.3 million square feet that is approximately 100.0% leased. Built in 1974, the Hutchinson Metro Center I Property was extensively renovated from 2002 through 2006 at a cost of approximately $41.6 million. Amenities available to tenants at the Hutchinson Metro Center I Property include two fitness centers, two child care centers, a landscaped courtyard, a teleconference center, a sundry shop, restaurants, a cafeteria and convenient access to public transportation (including free shuttle service). Further, the Metropolitan Transit Authority is planning a new Metro North train station adjacent to the Hutchinson Metro Center I Property, which will provide direct access to Penn Station in Manhattan and to Connecticut. Parking for the Hutchinson Metro Center I Property is provided by 409 surface parking spaces on the Hutchinson Metro Center I Property, and additional parking for 1,432 vehicles is provided via two parking garages and multiple surface lots in the Hutchinson Metro Center Complex, equating to a parking ratio of 3.4 spaces per 1,000 square feet of rentable area.
The Hutchinson Metro Center I Property has averaged 98.3% occupancy since 2008, ranging from 96.6% in 2008 to 100.0% currently. The largest tenant, Mercy College, is a four-year private institution founded by the Sisters of Mercy with a total enrollment of approximately 11,272 students. The Bronx campus is the only location with a child care center and is the home of the popular physicians assistant program. As of April 1, 2015, the Hutchinson Metro Center I Property was 100.0% leased by 25 tenants (see “Historical Occupancy” and “Cash Flow Analysis” section). Visting Nurse Service of NY (55,859 square feet; 13.2% of net rentable area) did not deliver notice of renewal prior to its notice date of November 30, 2014 and its lease is scheduled to expire on November 30, 2015. Current Occupancy excluding Visiting Nurse Service of NY is 86.8%.
The following table presents certain information relating to the tenancy at the Hutchinson Metro Center I Property:
Major Tenants
Tenant Name | Credit Rating (Fitch/Moody’s/ S&P)(1) | Tenant NRSF | % of NRSF | Annual U/W Base Rent PSF(2) | Annual U/W Base Rent(2) | % of Total Annual U/W Base Rent | Lease Expiration Date |
Major Tenants | |||||||
Mercy College | NR/NR/A | 125,522 | 29.7% | $31.41 | $3,942,646 | 27.4% | 2/27/2024 |
Administration of Childrens Services | AA/Aa2/AA | 63,462 | 15.0% | $40.64(3) | $2,579,046(3) | 17.9% | 3/31/2027(4) |
NYC Housing Authority | AA/Aa2/AA | 62,977 | 14.9% | $30.39(5) | $1,913,842(5) | 13.3% | 3/31/2026(6) |
Visiting Nurse Service of NY | NR/NR/NR | 55,859 | 13.2% | $30.27 | $1,690,766 | 11.8% | 11/30/2015(7) |
University Diagnostic Medical Imaging, PC | NR/NR/NR | 20,000 | 4.7% | $37.20 | $744,000 | 5.2% | 6/30/2025 |
Total Major Tenants | 327,820 | 77.6% | $33.16 | $10,870,300 | 75.6% | ||
Non-Major Tenants | 94,632 | 22.4% | $37.07 | $3,507,760 | 24.4% | ||
Occupied Collateral Total | 422,452 | 100.0% | $34.03 | $14,378,060 | 100.0% | ||
Vacant Space | 0 | 0.0% | |||||
Collateral Total | 422,452 | 100.0% | |||||
(1) | Certain ratings are those of the parent company whether or not the parent company guarantees the lease. |
(2) | Annual U/W Base Rent PSF and Annual U/W Base Rent include contractual rent steps through May 2016 totaling $394,687. |
(3) | The Annual U/W Base Rent and Annual U/W Base Rent PSF for Administration of Childrens Services represent the tenant’s average rent over the loan term. The tenant’s current in-place annual rent is $2,319,536 ($36.55 per square foot). |
(4) | Administration of Childrens Services has the right to terminate its lease on March 15, 2018 by providing 12 months’ written notice with payment of a termination fee equal to $3,005,560 ($47.36 per square foot) and on March 15, 2020 by providing 12 months’ written notice with payment of a termination fee equal to $1,882,283 ($29.66 per square foot). |
(5) | The Annual U/W Base Rent and Annual U/W Base Rent PSF for NYC Housing Authority represent the tenant’s average rent over the loan term. The tenant’s current in-place annual rent is $1,826,333 ($29.00 per square foot). |
(6) | NYC Housing Authority has a one-time right to terminate its lease on November 30, 2020 by providing 12 months’ written notice with payment of a termination fee equal to $1,952,287 ($31.00 per square foot). |
(7) | Visiting Nurse Service of NY did not deliver notice of renewal prior to its notice date of November 30, 2014 and its lease is scheduled to expire on November 30, 2015. See “Cash Flow Analysis” section. |
A-3-5 |
HUTCHINSON METRO CENTER I |
The following table presents certain information relating to the lease rollover schedule at the Hutchinson Metro Center I Property:
Lease Expiration Schedule(1)(2)
Year Ending December 31, | No. of Leases Expiring | Expiring NRSF | % of Total NRSF | Cumulative Expiring NRSF | Cumulative % of Total NRSF | Annual U/W Base Rent | Annual U/W Base Rent PSF(3) |
MTM | 2 | 3,850 | 0.9% | 3,850 | 0.9% | $140,536 | $36.50 |
2015 | 6 | 61,185 | 14.5% | 65,035 | 15.4% | $1,892,978 | $30.94 |
2016 | 4 | 28,956 | 6.9% | 93,991 | 22.2% | $912,791 | $31.52 |
2017 | 0 | 0 | 0.0% | 93,991 | 22.2% | $0 | $0.00 |
2018 | 3 | 6,875 | 1.6% | 100,866 | 23.9% | $256,826 | $37.36 |
2019 | 5 | 9,564 | 2.3% | 110,430 | 26.1% | $382,799 | $40.02 |
2020 | 0 | 0 | 0.0% | 110,430 | 26.1% | $0 | $0.00 |
2021 | 2 | 6,500 | 1.5% | 116,930 | 27.7% | $260,195 | $40.03 |
2022 | 3 | 9,824 | 2.3% | 126,754 | 30.0% | $385,595 | $39.25 |
2023 | 0 | 0 | 0.0% | 126,754 | 30.0% | $0 | $0.00 |
2024 | 4 | 142,522 | 33.7% | 269,276 | 63.7% | $4,646,709 | $32.60 |
2025 | 3 | 26,737 | 6.3% | 296,013 | 70.1% | $1,006,743 | $37.65 |
Thereafter | 2 | 126,439 | 29.9% | 422,452 | 100.0% | $4,492,888 | $35.53 |
Vacant | 0 | 0 | 0.0% | 422,452 | 100.0% | $0 | $0.00 |
Total/Weighted Average | 34 | 422,452 | 100.0% | $14,378,060 | $34.03 |
(1) | Information obtained from the underwritten rent roll. |
(2) | Certain tenants may have lease termination options that are exercisable prior to the originally stated expiration date of the subject lease and that are not considered in the Lease Expiration Schedule. |
(3) | Weighted Average Annual U/W Base Rent PSF excludes vacant space. |
The following table presents historical occupancy percentages at the Hutchinson Metro Center I Property:
Historical Occupancy
12/31/2012(1) | 12/31/2013(1) | 12/31/2014(1) | 4/1/2015(2) |
99.4% | 100.0% | 99.7% | 100.0% |
(1) | Information obtained from the borrower. |
(2) | Information obtained from the underwritten rent roll. Current Occupancy includes the Visiting Nurse Service of NY space (55,859 square feet; 13.2% of net rentable area). Visiting Nurse Service of NY did not deliver notice of renewal prior to its notice date of November 30, 2014 and its lease is scheduled to expire on November 30, 2015. Current occupancy excluding this tenant is 86.8%. |
A-3-6 |
HUTCHINSON METRO CENTER I |
Operating History and Underwritten Net Cash Flow. The following table presents certain information relating to the historical operating performance and underwritten net cash flow at the Hutchinson Metro Center I Property:
Cash Flow Analysis
2012 | 2013 | 2014 | U/W(1) | % of U/W Effective Gross Income | U/W $ per SF | |
Base Rent | $12,756,516 | $13,433,672 | $13,786,657(2) | $14,378,060(2) | 88.7% | $34.03 |
Grossed Up Vacant Space | 0 | 0 | 0 | 0 | 0.0 | 0.00 |
Total Reimbursables | 1,211,037 | 1,107,213 | 1,322,401 | 2,478,374 | 15.3 | 5.87 |
Other Income | 29,645 | 34,407 | 66,217 | 66,217 | 0.4 | 0.16 |
Less Vacancy & Free Rent | 0 | 0 | 0 | (718,903)(3) | (4.4) | (1.70) |
Effective Gross Income | $13,997,198 | $14,575,291 | $15,175,275 | $16,203,748 | 100.0% | $38.36 |
Total Operating Expenses | $5,043,300 | $5,419,876 | $5,894,432 | $7,070,708(4) | 43.6% | $16.74 |
Net Operating Income | $8,953,898 | $9,155,415 | $9,280,842 | $9,133,039 | 56.4% | $21.62 |
TI/LC | 0 | 0 | 0 | 798,975 | 4.9 | 1.89 |
Capital Expenditures | 0 | 0 | 0 | 105,613 | 0.7 | 0.25 |
Net Cash Flow | $8,953,898 | $9,155,415 | $9,280,842 | $8,228,451 | 50.8% | $19.48 |
NOI DSCR | 1.53x | 1.56x | 1.58x | 1.56x | ||
NCF DSCR | 1.53x | 1.56x | 1.58x | 1.40x | ||
NOI DY | 9.0% | 9.2% | 9.3% | 9.1% | ||
NCF DY | 9.0% | 9.2% | 9.3% | 8.2% |
(1) | Visiting Nurse Service of NY did not deliver notice of renewal prior to its notice date of November 30, 2014 and its lease is scheduled to expire on November 30, 2015. Current occupancy excluding this tenant is 86.8%, the NOI DSCR and NCF DSCR are 1.36x and 1.21x, respectively, and the NOI DY and NCF DY are 8.0% and 7.1%, respectively. A $2.0 million reserve was taken for this space, which equates to $35.80 per square foot of Visiting Nurse Service of NY space, or approximately one year of current base rent and reimbursements. |
(2) | The increase from 2014 to U/W Base Rent is due to rent averaging for two investment-grade rated tenants and contractual rent steps through May 2016 totaling $394,687, along with contractual rent increases that occurred in late 2014 and early 2015.. |
(3) | The underwritten economic vacancy is 5.0%. The Hutchinson Metro Center I Property was 100.0% physically occupied as of April 1, 2015. |
(4) | The Hutchinson Metro Center I Property benefits from an Industrial and Commercial Incentive Program (“ICIP”), which results in a reduced property tax expense. The estimated unabated property tax expense for the 2015/2016 assessment year was $2,654,593. The ICIP expires in 2029 and is currently being phased out. The U/W property tax expense of $1,354,875 is based on the unabated tax expense for the 2015 calendar year, less the average benefit of the abatement over the Hutchinson Metro Center I Mortgage Loan term. The taxes are projected to increase from the current level to $2,792,875 by the time the Hutchinson Metro Center I Mortgage Loan matures. According to the leases, most tax increases may be passed through to the tenants (over a base-year stop) at the Hutchinson Metro Center I Property. |
Appraisal.As of the appraisal valuation date of April 1, 2015, the Hutchinson Metro Center I Property had an “as-is” appraised value of $142,000,000.
Environmental Matters.According to the Phase I environmental report dated April 2, 2015, there was no evidence of any recognized environmental conditions at the Hutchinson Metro Center I Property.
Market Overview and Competition. The Hutchinson Metro Center I Property is located in the Westchester Heights section of the Bronx, New York, approximately 9.4 miles northeast of Manhattan, along the Hutchinson River Parkway, a north-south parkway connecting the Bronx to Greenwich, Connecticut to the north. The Hutchinson Metro Center I Property is part of the larger Hutchinson Metro Center Complex, a 42.0-acre suburban style campus comprised of four class A office buildings (including the Hutchinson Metro Center I Property) totaling approximately 1.3 million square feet that is approximately 100.0% leased. The Hutchinson Metro Center Complex is comprised of (i) the Hutchinson Metro Center I Property, (ii) the 13-story, 284,979 square-foot multi-tenant 1250 Waters Place Tower One completed in 2008 and 100.0% leased, (iii) the 11-story, 278,133 square-foot 1250 Waters Place Tower Two, completed in 2014 and 100.0% leased to Montefiore Medical Center through September 2030, and (iv) the three-story, 360,000 square-foot mixed-use Hutch Metro Atrium, which features office and medical office space, along with an LA Fitness and restaurants. Further, a new 125-room Marriott Residence Inn Hotel opened in May 2015 within the Hutchinson Metro Center Complex. There are also a significant number of hospital and institutional health service uses within the Westchester Heights area, including Calvary Hospital, Albert Einstein Medical Center, Montefiore Medical Center, Jacobi Medical Center, and the Bronx Psychiatric Center, all located within five miles of the Hutchinson Metro Center I Property. The Hutchinson Metro Center I Property is serviced by the Number Six (Lexington Avenue/Pelham) subway line at Westchester Square (1.0 mile south), which is connected to Hutchinson Metro Center I Property by a free shuttle service and various bus lines. As of 2014, the estimated population within a three- and five-mile radius of the Hutchinson Metro Center I Property was 707,650 and 1,689,210, respectively and the average household income within the same radii was $48,925 and $49,817, respectively.
According to a third party market research report, the Hutchinson Metro Center I Property is located in the Bronx office submarket of the Westchester/Southen Connecticut office market. The Bronx office submarket contained approximately 10.2 million square feet of office space in 424 buildings exhibiting a direct vacancy rate of 11.3% as of first quarter 2015. According to the appraisal, the class A Bronx office submarket contained 2.4 million square feet (23.9% of the overall Bronx submarket), exhibiting a vacancy rate of 3.8% as of April 9, 2015 with a current quoted rental rate of $36.42 per square foot, gross. The appraiser concluded to gross rents of $40.00 per square foot for space less than 3,000 square feet, $38.00 per square foot for space greater than 3,000 square feet but less than 10,000 square feet and $36.00 per square foot for office space greater than 10,000 square feet.
A-3-7 |
HUTCHINSON METRO CENTER I |
The following table presents certain information relating to comparable office properties for the Hutchinson Metro Center I Property:
Competitive Set(1)
Hutchinson (Subject) | Concourse Plaza | 1776 Eastchester Road | Hutchinson Metro Center – Tower II | Hutchinson Metro Center – Tower I | Banknote Building | Fordham Plaza | |
Location | Bronx, NY | Bronx, NY | Bronx, NY | Bronx, NY | Bronx, NY | Bronx, NY | Bronx, NY |
Distance from Subject | -- | 5.3 miles | 0.8 miles | 0.1 miles | 0.1 miles | 4.3 miles | 3.6 miles |
Property Type | Office | Office | Office | Office | Office | Office | Office |
Year Built/Renovated | 1974/2006 | 2011/NAV | 2015/NAV | 2012/NAV | 2014/NAV | 1935/NAV | 1933/NAV |
Stories | 4 | 5 | 3 | 13 | 11 | 12 | 7 |
Total GLA | 422,452 SF | 76,710 SF | 258,859 SF | 284,000 SF | 280,000 SF | 410,194 SF | 550,000 SF |
Total Occupancy | 100%(2) | 96% | 100% | 100% | 100% | 91% | 100% |
(1) | Information obtained from the appraisal and a third party market research report. |
(2) | Current occupancy includes the Visiting Nurse Service of NY space (55,859 square feet; 13.2% of net rentable area). Visiting Nurse Service of NY did not deliver a notice of renewal prior to their notice date of November 30, 2014 and its lease is scheduled to expire on November 30, 2015. Current Occupancy excluding this tenant is 86.8%. |
The Borrower.The borrower is Hutch Metro Center I LLC, a Delaware limited liability company which is a single purpose entity with two independent directors. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Hutchinson Metro Center I Mortgage Loan. Joseph Simone is the guarantor of certain nonrecourse carveouts under the Hutchinson Metro Center I Mortgage Loan.
The Sponsor.Joseph Simone is the founder of Simone Development, a full-service, privately held commercial and residential real estate and management company. Mr. Simone owns and manages a portfolio of approximately 100 properties in the tri-state area including office, medical, industrial flex, and retail, totaling more than five million square feet. Mr. Simone is currently in the process of settling outstanding litigation, which will be covered by the sponsor’s insurance. See “Description of the Mortgage Pool—Litigation Considerations” in the Free Writing Prospectus.
Escrows.The loan documents provide for upfront reserves in the amount of $229,840 for taxes, $49,688 for deferred maintenance and $2,000,000 for renewal or re-leasing expenses related to the Visiting Nurse Service of NY space. Funds will be disbursed from the Visiting Nurse Service of NY reserve for qualified leasing costs in connection with the renewal of Visiting Nurse Service of NY (for no less than three years at then market rent) or the re-leasing of the Visiting Nurse Service of NY space to one or more acceptable replacement tenants for a term of no less than five years at then market rent. Funds will not be fully disbursed until all of the borrower’s work has been completed in connection with the replacement lease, the replacement tenant has taken possession of and is occupying the Visiting Nurse Service of NY space, open for business and paying regularly scheduled unabated base rent and the borrower has delivered to the lender an acceptable tenant estoppel.
Ongoing monthly reserves are required in an amount equal to $42,338 for taxes, $8,801 for replacement reserves and $49,286 for general tenant improvements and leasing commissions (subject to a cap of $1,500,000). The loan documents do not require monthly escrows for insurance, provided that (i) no event of default has occurred and is continuing; (ii) the Hutchinson Metro Center I Property is insured via an acceptable blanket insurance policy; and (iii) the borrower provides the lender with evidence of renewal of the insurance policies and timely proof of payment of the insurance premiums when due.
Lockbox and Cash Management.The Hutchinson Metro Center I Mortgage Loan requires a lender-controlled lockbox account, which is already in place, and that the borrower direct tenants to pay their rents directly into such lockbox account. The loan documents also require that all rents received by the borrowers or the property manager be deposited into the lockbox account within one business day of receipt. Prior to the occurrence of a Cash Trap Event Period (as defined below), all excess cash flow is distributed to the borrower. During a Cash Trap Event Period, all cash flow is swept to a lender-controlled cash management account.
A “Cash Trap Event Period” will commence upon the earlier of (i) the occurrence and continuance of an event of default; (ii) the amortizing net cash flow debt service coverage ratio being less than 1.10x; or (iii) the occurrence of a Mercy Cash Trap Event Period (as defined below). A Cash Trap Event Period will end, with regard to clause (i), upon the cure of such event of default; with regard to clause (ii), upon the amortizing net cash flow debt service coverage ratio being equal to or greater than 1.15x for two consecutive calendar quarters; and with regard to clause (iii), upon the termination of such Mercy Cash Trap Event Period.
A “Mercy Cash Trap Event Period” will commence upon the earlier of the following events (i) Mercy College goes dark in substantially all of their space, (ii) Mercy College gives notice of its intention to vacate, surrender its space or ceases to conduct business in substantially all of its space; (iii) the date the Mercy College lease expires or is otherwise terminated (provided that if Mercy College gives notice of its intention to terminate the lease more than 18 months prior to the stated expiration date of the Mercy Lease (February 27, 2024), a cash flow sweep will not commence until 18 months prior to the expiration of the lease); and (iv) Mercy College files bankruptcy or a similar insolvency proceeding. A Mercy Cash Trap Event Period will end, with regard to clause (i), (ii) and (iii), (a) when Mercy College resumes operations in their space, the Mercy College lease is in full force and effect and the borrower delivers an acceptable estoppel or (b) when the Mercy College space is re-leased to an acceptable replacement tenant (or tenants) for a term of no less than five years at then-market rent, the borrower’s work is completed in connection with the replacement lease, the replacement tenant takes possession, is in occupancy, is open for business and paying regularly scheduled unabated base rent in the Mercy College Space and the borrower delivers to the lender an acceptable tenant estoppel; and with regard to clause (iv), the earlier to occur of the following: (1) a Mercy College insolvency proceeding is terminated and the Mercy College lease is affirmed, assumed or assigned or (2) the Mercy College space is re-leased to an acceptable replacement tenant, as outlined in clause (b) directly above. Provided a Cash Trap Event Period has not occurred
A-3-8 |
HUTCHINSON METRO CENTER I |
and is not continuing, the amount collected as a result of a Mercy Cash Trap Event Period will be capped at one year of rent (after the date on which the particular trigger occurred) plus the tenant improvements and leasing commissions the lender estimates will be incurred in connection with the re-leasing of the space.
Property Management.The Hutchinson Metro Center I Property is managed by an affiliate of the borrower.
Assumption.The borrower has a two-time right to transfer the Hutchinson Metro Center I Property, provided that no event of default has occurred and is continuing and certain other conditions are satisfied, including (i) the lender's reasonable determination that the proposed transferee and guarantor satisfy the lender's credit review and underwriting standards, taking into consideration such transferee’s experience, financial strength and general business standing; (ii) execution of a recourse guaranty (which includes an environmental indemnity) by an affiliate of the transferee; and (iii) rating agency confirmation from Fitch, KBRA and Moody’s that the transfer will not result in a downgrade, withdrawal or qualification of the respective ratings assigned to the Series 2015-C29 Certificates.
Partial Release.Not permitted.
Real Estate Substitution.Not permitted.
Subordinate and Mezzanine Indebtedness. Not permitted.
Ground Lease.None.
Terrorism Insurance.The loan documents require that the “all risk” insurance policy required to be maintained by the borrower provide coverage for terrorism in an amount equal to the full replacement cost of the Hutchinson Metro Center I Property. The loan documents also require business interruption insurance covering no less than the 24-month period following the occurrence of a casualty event, together with a six-month extended period of indemnity.
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A-3-10 |
CATHEDRAL PLACE |
A-3-11 |
CATHEDRAL PLACE |
A-3-12 |
CATHEDRAL PLACE |
A-3-13 |
No. 2 Cathedral Place | ||||||
Loan Information | Property Information | |||||
Mortgage Loan Seller: | Walker & Dunlop Commercial Property Funding I WF, LLC | Single Asset/Portfolio: | Single Asset | |||
Credit Assessment (Fitch/KBRA/Moody’s): | NR/NR/NR | Property Type: | Office | |||
Original Principal Balance: | $39,900,000 | Specific Property Type: | CBD | |||
Cut-off Date Principal Balance: | $39,900,000 | Location: | Milwaukee, WI | |||
% of Initial Pool Balance: | 3.4% | Size: | 219,778 SF | |||
Loan Purpose: | Refinance | Cut-off Date Principal Balance Per SF: | $181.55 | |||
Borrower Name: | Cathedral Place, LLC | Year Built/Renovated: | 2003/NAP | |||
Sponsor: | Joel S. Lee | Title Vesting: | Fee | |||
Mortgage Rate: | 4.125% | Property Manager: | Self-managed | |||
Note Date: | February 10, 2015 | 3rd Most Recent Occupancy (As of)(2): | 98.5% (12/31/2012) | |||
Anticipated Repayment Date: | NAP | 2nd Most Recent Occupancy (As of)(2): | 99.3% (12/31/2013) | |||
Maturity Date: | March 1, 2025 | Most Recent Occupancy (As of)(2): | 92.2% (12/31/2014) | |||
IO Period: | 24 months | Current Occupancy (As of)(3): | 91.1% (5/1/2015) | |||
Loan Term (Original): | 120 months | |||||
Seasoning: | 3 months | Underwriting and Financial Information: | ||||
Amortization Term (Original): | 360 months | |||||
Loan Amortization Type: | Interest-only, Amortizing Balloon | 3rdMost Recent NOI (As of): | $3,821,889 (12/31/2012) | |||
Interest Accrual Method: | Actual/360 | 2ndMost Recent NOI (As of)(4): | $4,190,167 (12/31/2013) | |||
Call Protection: | L(27),D(89),O(4) | Most Recent NOI (As of)(4): | $3,423,365 (12/31/2014) | |||
Lockbox Type: | Hard/Springing Cash Management | |||||
Additional Debt: | None | |||||
Additional Debt Type: | NAP | |||||
U/W Revenue: | $6,150,769 | |||||
U/W Expenses: | $2,556,668 | |||||
U/W NOI: | $3,594,101 | |||||
Escrows and Reserves(1): | U/W NCF: | $3,276,228 | ||||
U/W NOI DSCR: | 1.55x | |||||
Type: | Initial | Monthly | Cap (If Any) | U/W NCF DSCR: | 1.41x | |
Taxes | $271,791 | $90,597 | NAP | U/W NOI Debt Yield: | 9.0% | |
Insurance | $19,469 | $4,867 | NAP | U/W NCF Debt Yield: | 8.2% | |
Replacement Reserve | $0 | $3,663 | $205,000 | As-Is Appraised Value: | $57,000,000 | |
TI/LC Reserve | $0 | $22,826 | $1,300,000 | As-Is Appraisal Valuation Date: | January 7, 2015 | |
Outstanding Tenant TI/LC Reserve | $3,354,587 | $0 | NAP | Cut off Date LTV Ratio | 70.0% | |
Free Rent | $141,706 | $0 | NAP | LTV Ratio at Maturity or ARD: | 59.2% | |
(1) | See “Escrows” section. |
(2) | Historical Occupancy is based on the simple average of the monthly occupancies for the applicable calendar year. Monthly occupancy is calculated as the weighted average of the office and retail occupancy, excluding storage and fitness center spaces. |
(3) | See “Historical Occupancy” section. |
(4) | See “Cash Flow Analysis” section. |
The Mortgage Loan. The mortgage loan (the “Cathedral Place Mortgage Loan”) is evidenced by a single promissory note that is secured by a first mortgage encumbering the fee interest in an office property located in Milwaukee, Wisconsin (the “Cathedral Place Property”). The Cathedral Place Mortgage Loan was originated on February 10, 2015 by Walker & Dunlop Commercial Property Funding I WF, LLC. The Cathedral Place Mortgage Loan had an original principal balance of $39,900,000, has an outstanding principal balance as of the Cut-off Date of $39,900,000 and accrues interest at an interest rate of 4.125%per annum. The Cathedral Place Mortgage Loan had an initial term of 120 months, has a remaining term of 117 months as of the Cut-off Date and requires interest-only payments for the first 24 payments following origination, and, thereafter, requires payments of principal and interest based on a 30-year amortization schedule. The Cathedral Place Mortgage Loan matures on March 1, 2025.
Following the lockout period, the borrower has the right to defease the Cathedral Place Mortgage Loan in whole, but not in part, onany date before December 1, 2024. In addition, the Cathedral Place Mortgage Loan is prepayable without penalty on or after December 1, 2024. Notwithstanding the foregoing, any defeasance or prepayment of the Cathedral Place Mortgage Loan must be simultaneous with the defeasance or prepayment of the mortgage loan identified on Annex A-1 to the Free Writing Prospectus as Cathedral Place – Parking (the “Cathedral Place – Parking Mortgage Loan”) with an outstanding principal balance as of the Cut-off Date of $9,200,000. The Cathedral Place – Parking Mortgage Loan is secured by a 10-story, 941-space parking deck that is located adjacent to the Cathedral Place Property.
A-3-14 |
CATHEDRAL PLACE |
Sources and Uses
Sources | Uses | |||||||
Original loan amount | $39,900,000 | 87.5% | Loan payoff(1) | $29,500,000 | 64.7% | |||
Sponsor new cash contribution | 5,680,073 | 12.5 | Line of credit payoff(2) | 10,829,185 | 23.8 | |||
Reserves | 3,787,553 | 8.3 | ||||||
Closing costs | 1,463,335 | 3.2 | ||||||
Total Sources | $45,580,073 | 100.0% | Total Uses | $45,580,073 | 100.0% |
(1) | The Cathedral Place Property was previously securitized in the BSCMS 2005-PWR9 transaction. |
(2) | Line of credit payoff represents a payoff of a line of credit to the Lee Family Limited Partnership. |
The Property. The Cathedral Place Property comprises two of the four condominium units (see “Condominium Structure” section) within an 18-story office building located in the central business district of Milwaukee, Wisconsin. The office condominium (“Unit 1”) is comprised of approximately 203,379 square feet (92.3% of net rentable area of the Cathedral Place Property), is situated on floors 11-18 of the Cathedral Place Property and includes 2,356 square feet of basement storage space and 1,411 square feet currently utilized as a fitness center. The ground-floor retail condominium (“Unit 2”) consists of approximately 16,887 square feet (7.7% of net rentable area of the Cathedral Place Property) and has frontage along Jackson, Mason, and Wells Streets. Currently, the only retail tenants are BW Holdings (doing business as Ward’s House of Prime) which leases 6,528 square feet and First Merit Bank which leases 1,200 square feet.
The Cathedral Place Property is situated adjacent to the Cathedral Place – Parking garage (“Unit 3”). The office and retail tenants will have access to the parking garage via a perpetual parking easement agreement, an option to lease parking stalls agreement, and memorandum of option to lease parking stalls under which the parking condominium unit (Unit 3) gives the office and retail tenants the right to lease 433 spaces (the current amount presently leased by the office and retail tenants) at market rates. A breach of the parking easement agreement or the option to lease parking stalls agreement will constitute an event of default and be subject to the loss carveout provisions of the Cathedral Place Mortgage Loan.
The office space has direct access to the Cathedral Place – Parking garage as well as 37 stalls within the 100-space underground parking garage shared with the 27 residential condominiums (“Unit 4”). Parking for the retail stores is provided by 15 spaces of allocated ground-floor parking, as well as the parking garage. Unit 4, which is not part of the collateral for the Cathedral Place Mortgage Loan, is situated on floors 2-10, and is accessible through a separate entrance on Wells Street.
Major tenants at the Cathedral Place Property include Whyte Hirschboeck Dudek S.C. (“WHD”), Executive Director, Inc. (“EDI”), and Deloitte & Touche, USA LLP (“Deloitte”). WHD is headquartered at the Cathedral Place Property and is a full-service law firm with offices in Milwaukee, Wisconsin, Madison, Wisconsin and Chicago, Illinois and has more than 150 professionals practicing in more than 50 industry and specialty areas. EDI provides professional services for national and international medical, certification, and scientific associations. Deloitte provides audit, tax, consulting, enterprise risk, and financial advisory services with over 200,000 professionals in 150 countries. The Cathedral Place Property was 91.1% physically occupied by five tenants as of May 1, 2015.
Condominium Structure. The Cathedral Place Office Property is comprised of two of the four condominium units: the office unit (Unit 1) and the retail unit (Unit 2) of the Cathedral Place Condominium Association, Inc. (together, the “Master Association”). The Master Association also includes a third condominium unit consisting of a 941 space parking garage, and a fourth condominium unit consisting of 27 residential condominium units. The borrower has a combined 47.0% voting interest in the Master Association and control of certain operational decisions, along with the right to vote or appoint directors on behalf of the office and retail units.
A-3-15 |
CATHEDRAL PLACE |
The following table presents certain information relating to the tenancy at the Cathedral Place Property:
Major Tenants
Tenant Name | Credit Rating (Fitch/ Moody’s/S&P)(1) | Tenant NRSF | % of NRSF | Annual U/W Base Rent PSF | Annual U/W Base Rent | % of Total Annual U/W Base Rent | Lease Expiration Date |
Major Tenants | |||||||
Whyte Hirschboeck Dudek S.C. | NR/NR/NR | 93,859 | 42.7% | $18.73 | $1,757,792 | 42.1% | 11/30/2020 |
Deloitte & Touche USA, LLP | NR/NR/NR | 37,476 | 17.1% | $28.41 | 1,064,693 | 25.5% | 10/31/2024(2) |
Executive Director, Inc.(3) | NR/NR/NR | 51,853 | 23.6% | $18.50 | 959,280 | 23.0% | 6/30/2030(4) |
First Merit Bank | NR/A3/BBB+ | 9,010 | 4.1% | $30.66 | 276,252 | 6.6% | 11/14/2024(5) |
BW Holdings | NR/NR/NR | 6,528 | 3.0% | $17.99 | 117,439 | 2.8% | 2/28/2018 |
Total Major Tenants | 198,726 | 90.4% | $21.01 | $4,175,456 | 100.0% | ||
Non-Major Tenant(6) | 1,411 | 0.6% | $0.00 | $0 | 0.0% | ||
Occupied Collateral Total | 200,137 | 91.1% | $21.01 | $4,175,456 | 100.0% | ||
Vacant Space | 19,641 | 8.9% | |||||
Collateral Total | 219,778 | 100.0% | |||||
(1) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
(2) | Deloitte has a one-time right to terminate one of its two leases (10,526 square feet; 4.8% of net rentable area) on October 31, 2019 with 12 months’ notice and a termination fee of $181,000. |
(3) | EDI recently executed a lease for 9,951 square feet of expansion space (4.5% of net rentable area). Executive Director, Inc. is expected to take occupancy on June 6, 2015 and will commence rent payments on July 1, 2015. A reserve for free rent and TI/LC was established at closing. |
(4) | EDI has a one-time right to terminate the lease for the expansion space (9,951 square feet; 4.5% of net rentable area) on June 15, 2020 with 180 days’ notice. |
(5) | First Merit Bank has a one-time right to terminate its leases (9,010 square feet; 4.1% of net rentable area) on December 31, 2020 with 270 days’ notice and a termination fee of $255,000. |
(6) | Represents the Fitness Center (1,411 square feet), which does not have a lease or any associated underwritten rent and is not included in total Annual U/W Base Rent. |
The following table presents certain information relating to the lease rollover schedule at the Cathedral Place Property:
Lease Expiration Schedule(1)(2)
Year Ending December 31, | No. of Leases Expiring | Expiring NRSF | % of Total NRSF | Cumulative Expiring NRSF | Cumulative % of Total NRSF | Annual U/W Base Rent | Annual U/W Base Rent PSF(3) |
MTM(4) | 1 | 1,411 | 0.6% | 1,411 | 0.6% | $0 | $0.00 |
2015 | 0 | 0 | 0.0% | 1,411 | 0.6% | $0 | $0.00 |
2016 | 0 | 0 | 0.0% | 1,411 | 0.6% | $0 | $0.00 |
2017 | 0 | 0 | 0.0% | 1,411 | 0.6% | $0 | $0.00 |
2018 | 1 | 6,528 | 3.0% | 7,939 | 3.6% | $117,439 | $17.99 |
2019 | 0 | 0 | 0.0% | 7,939 | 3.6% | $0 | $0.00 |
2020 | 7 | 93,859 | 42.7% | 101,798 | 46.3% | $1,757,792 | $18.73 |
2021 | 0 | 0 | 0.0% | 101,798 | 46.3% | $0 | $0.00 |
2022 | 0 | 0 | 0.0% | 101,798 | 46.3% | $0 | $0.00 |
2023 | 0 | 0 | 0.0% | 101,798 | 46.3% | $0 | $0.00 |
2024 | 5 | 46,486 | 21.2% | 148,284 | 67.5% | $1,340,945 | $28.85 |
2025 | 0 | 0 | 0.0% | 148,284 | 67.5% | $0 | $0.00 |
Thereafter | 3 | 51,853 | 23.6% | 200,137 | 91.1% | $959,281 | $18.50 |
Vacant | 0 | 19,641 | 8.9% | 219,778 | 100.0% | $0 | $0.00 |
Total/Weighted Average | 17 | 219,778 | 100.0% | $4,175,456 | $20.86 |
(1) | Information obtained from the underwritten rent roll. |
(2) | Certain tenants may have lease termination options that are exercisable prior to the originally stated expiration date of the subject lease and that are not considered in the Lease Expiration Schedule. |
(3) | Weighted Average Annual U/W Base Rent PSF excludes vacant space. |
(4) | Represents the Fitness Center (1,411 square feet), which does not have a lease or any associated underwritten rent and is not included in total Annual U/W Base Rent. |
A-3-16 |
CATHEDRAL PLACE |
The following table presents historical occupancy percentages at the Cathedral Place Property:
Historical Occupancy
12/31/2012(1) | 12/31/2013(1) | 12/31/2014(1) | 5/1/2015(2)(3) |
98.5% | 99.3% | 92.2% | 91.1% |
(1) | Information obtained from the borrower. |
(2) | Information obtained from the underwritten rent roll. |
(3) | Current Occupancy, per rent roll obtained from the borrower, as of May 1, 2015 includes the EDI expansion space of 9,951 square feet (4.5% of net rentable area). |
Underwritten Net Cash Flow.The following table presents certain information relating to the historical operating performance and underwritten net cash flow at the Cathedral Place Property:
Cash Flow Analysis
2012 | 2013(1) | 2014(1) | U/W | % of U/W Effective Gross Income | U/W $ per SF | |
Base Rent | $4,611,148 | $4,792,629 | $3,702,507 | $4,175,456 | 67.9% | $19.86 |
Grossed Up Vacant Space | 0 | 0 | 0 | 408,155 | 6.6 | 1.86 |
Total Reimbursables | 1,808,672 | 2,040,690 | 2,345,404 | 2,066,832 | 33.6 | 9.40 |
Other Income | 85,825 | 94,468 | 122,326 | 101,570 | 1.7 | 0.46 |
Less Vacancy & Credit Loss | 0 | 0 | 0 | (601,244) | (9.8) | 2.74 |
Effective Gross Income | $6,505,645 | $6,927,787 | $6,170,237 | $6,150,769 | 100.0% | $27.99 |
Total Operating Expenses | $2,683,756 | $2,737,621 | $2,746,872 | $2,556,668 | 41.6% | $11.63 |
Net Operating Income | $3,821,889 | $ 4,190,167 | $3,423,365 | $3,594,101 | 58.4% | $16.35 |
TI/LC | 0 | 0 | 0 | 273,918 | 4.5 | 1.25 |
Capital Expenditures | 0 | 0 | 0 | 43,956 | 0.7 | 0.20 |
Net Cash Flow | $3,821,889 | $4,190,167 | $3,423,365 | $3,276,228 | 53.3% | $14.91 |
NOI DSCR | 1.65x | 1.81x | 1.48x | 1.55x | ||
NCF DSCR | 1.65x | 1.81x | 1.48x | 1.41x | ||
NOI DY | 9.6% | 10.5% | 8.6% | 9.0% | ||
NCF DY | 9.6% | 10.5% | 8.6% | 8.2% |
(1) | Base Rent and Net Operating Income decreased from 2013 to 2014 due to Deloitte giving back a total of 33,115 square feet (15.1% of net rentable area) when its initial 10-year lease term expired. EDI took occupancy of 16,701 square feet (7.6% of net rentable area) and First Merit Bank took occupancy of 7,322 square feet (3.3% of net rentable area) that was vacated by Deloitte. |
Appraisal. As of the appraisal valuation date of January 7, 2015, the Cathedral Place Property had an “as-is” appraised value of $57,000,000.
Environmental Matters.The Phase I environmental site assessment dated January 23, 2015 revealed no evidence of recognized environmental conditions.
Market Overview and Competition.The Cathedral Place Property is located along East Wells Street in the central business district of Milwaukee, Wisconsin. The immediate neighborhood consists of a mix of class A and class B office buildings. Most land in the neighborhood is fully developed.
The Cathedral Place Property is located in an area that is also home to banks, law and accounting firms, and other large corporate tenants including the headquarters campus of Northwestern Mutual Life Insurance Company, which is located one block east of the Cathedral Place Property, and the U.S. Bank Center located three blocks to the southeast. The Cathedral Place Property is located four blocks north of the Interstate-794 on and off ramps, which provide immediate access to Interstate-94 (the major north-south interstate running to and from Chicago) and the entire Milwaukee metropolitan statistical area.
The estimated 2014 population within a half-, one-, and two-mile radius of the Cathedral Place Property was 7,748, 23,458, and 79,133, respectively, and the population within the same radii is expected to grow at an annual rate of 0.9%, 1.4% and 0.7%, respectively. The estimated 2014 median household income within the same half-, one-, and two-mile radii was $45,116, $44,026 and $27,597, respectively.
The Cathedral Place Property is located in the Milwaukee-Waukesha-West Allis metropolitan statistical area. The estimated 2014 population of the metropolitan statistical area was 1,571,200, a 0.1% increase from 2013. Total employment in 2014 in the Milwaukee Waukesha-West Allis metropolitan statistical area was at 839,400, a 1.6% increase from 2013 and the unemployment rate was at 6.2% as of October, 2014.
A-3-17 |
CATHEDRAL PLACE |
According to the appraisal, the education and health services sector contributes 18.4% of total employment in the Milwaukee-Waukesha-West Allis metropolitan statistical area, followed by the manufacturing sector (14.4%) and the professional and business services sector (14.3%). The top six employers in the Milwaukee-Waukesha-West Allis metropolitan statistical area are: Aurora Health Care Inc. (22,000 employees), Wheaton Franciscan Healthcare (12,000 employees), Froedtert and Community Health (8,900 employees), Roundy’s Inc. (8,400 employees), Kohl’s Department Stores Inc. (7,800 employees), and Northwestern Mutual Life Insurance Co. (5,000 employees).
According to the appraisal, the Cathedral Place Property is located within the Downtown East office submarket. The Downtown East office submarket is bounded by Interstate 794 to the south, the Milwaukee River to the west, Ogden Avenue to the north, and both Lincoln Memorial Drive and Lake Michigan to the east. According to the appraisal, as of the third quarter of 2014, the Downtown East office submarket had an inventory of 8.2 million square feet, exhibiting a vacancy rate of 13.8% with asking rents of $25.88 per square foot on a gross basis.
According to a third-party market research report, as of the first quarter of 2015, the Downtown East office submarket is the most desirable in the central business district and rents are 10% greater than comparable office buildings in the Downtown West office submarket. The third-party market research report indicated a vacancy rate of 8.8% for 4 & 5 star office properties in the Downtown East office submarket.
The following table presents certain information relating to comparable retail properties for the Cathedral Place Property:
Competitive Set(1)
Cathedral Place (Subject) | The Milwaukee Center | Chase Tower | 100 East Building | US Bank Center | 875 E Wisconsin Avenue | |
Location | Milwaukee, WI | Milwaukee, WI | Milwaukee, WI | Milwaukee, WI | Milwaukee, WI | Milwaukee, WI |
Distance from Subject | -- | 0.4 miles | 0.4 miles | 0.4 miles | 0.3 miles | 0.4 miles |
Property Type | Office | Office | Office | Office | Office | Office |
Year Built/Renovated | 2003/NAP | 1988/NAP | 1961/NAP | 1989/NAP | 1971/NAP | 2003/NAP |
Stories | 18 | 28 | 22 | 35 | 42 | 8 |
Total GLA | 219,778 SF | 373,489 SF | 485,153 SF | 423,723 SF | 1,079,021 SF | 209,209 SF |
Total Occupancy | 91% | 96% | 84% | 95% | 98% | 100% |
(1) | Information obtained from the appraisal and underwritten rent roll. |
The Borrower. The borrower is Cathedral Place, LLC, a Wisconsin limited liability company and a single purpose entity whose managing member has two independent directors. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Cathedral Place Mortgage Loan. Joel S. Lee is the guarantor of certain nonrecourse carveouts under the Cathedral Place Mortgage Loan.
The Sponsor. The sponsor is Joel S. Lee. Mr. Lee developed the Cathedral Place Property in 2003/2004. Mr. Lee is the owner and founder of Van Buren Management, Inc., which owns a portfolio of approximately 2.0 million square feet of primarily office space in downtown Milwaukee.
Escrows. The loan documents require upfront reserves of $271,791 for real estate taxes, $19,469 for insurance premiums, $141,706 for free rent ($76,706 for EDI with an anticipated rent commencement date of July 1, 2015, and $65,000 for First Merit Bank), and $3,354,588 for outstanding tenant improvements ($2,312,269 for Deloitte, $530,999 for EDI and $511,320 for First Merit Bank). The loan documents require monthly deposits into the reserve accounts of $90,597 for real estate taxes, $4,867 for insurance, $22,826 for tenant improvements and leasing commissions (capped at $1,300,000), and $3,663 for replacement reserves (capped at $205,000).
Lockbox and Cash Management. The Cathedral Place Mortgage Loan requires a lender-controlled lockbox account, which is already in place, and that the borrower direct tenants to pay their rents directly into such lockbox account. The loan documents also require that all rents received by the borrower or the property manager be deposited into the lockbox account within two business days of receipt. Funds are then swept into a cash management account controlled by the lender, and prior to the occurrence of a Cash Trap Event Period (as defined below), funds are distributed to the borrower’s operating account. During a Cash Trap Event Period, all excess cash flow is deposited into the excess cash reserve account and/or the Primary Lease reserve account. During a Primary Lease Termination/Extension Event, all excess cash flow is deposited into the primary lease reserve account.
A “Cash Trap Event Period” will commence upon the earlier of (i) the occurrence and continuance of an event of default, (ii) the amortizing debt service coverage ratio based on the trailing 12 calendar months falling below 1.15x, (iii) WHD (“Primary Tenant”) not extending the term of its lease on or before the period that is one year prior to the lease’s expiration for a term of at least the earlier of (a) ten years or (b) the date which is two years after loan maturity (a “Primary Lease Termination/Extension Event”), (iv) the Primary Tenant being (a) in monetary default under its lease, (b) going dark or subletting more than 50% of its space, (c) vacating or giving notice of its intent to vacate the leased space or (d) becoming a debtor in an insolvency proceeding which is not dismissed within 90 days, or (v) any other tenant that occupies over 20% of the net rentable area at the Cathedral Place Property (“Non-Primary Tenant”) (a) going dark or subletting more than 50% of its space or vacating, (b) giving notice of its intent to vacate the leased space or (c) becoming a debtor in an insolvency proceeding that is not dismissed within 90 days. A Cash Trap Event Period will end, with regard to clause (i), upon the cure of such event of default; with regard to clause (ii), upon the date the amortizing debt service coverage ratio is at least
A-3-18 |
CATHEDRAL PLACE |
1.15x for six consecutive months; with regard to clause (iii), upon the occurrence of a Primary Lease Termination/Extension Event Cure (as defined below); and with regard to clause (iv), upon the occurrence of a Primary Tenant Trigger Event Cure (as defined below) and with regard to clause (v), upon the occurrence of a Non-Primary Trigger Event Cure (as defined below).
“Primary Lease” refers to the lease with WHD. A “Primary Lease Termination/Extension Event Cure” means (i) either (1) (A) execution and delivery of an extension of the Primary Lease, in form and substance acceptable to the lender in its discretion, and (B) delivery of an executed estoppel certificate from the Primary Tenant with respect to the Primary Lease; or (2) (A) execution and delivery of a replacement lease or leases for the entirety of the Primary Lease space, which replacement lease or leases (x) have an expiration date that is at least two years after March 1, 2025, and (y) are in form and substance acceptable to the lender in its discretion, and (B) delivery of an executed estoppel certificate from the applicable replacement tenant or tenants under the replacement lease or leases set forth in subsection (2)(A) above and (ii) no Cash Trap Event Period has occurred and is then-continuing.
“Primary Tenant Trigger Event Cure” means the occurrence of any of the following, as applicable: (i) the execution and delivery of a replacement lease and estoppel certificate for the Primary Tenant’s leased space in form and substance reasonably acceptable to the lender, (ii) the Primary Tenant has cured all defaults and remains in good standing under its lease or (iii) the lease has been assumed by the applicable Primary Tenant in accordance with applicable law, such assumption has been approved by the appropriate bankruptcy court having jurisdiction over such matter and such Primary Tenant is no longer involved in any bankruptcy or insolvency proceeding.
“Non-Primary Trigger Event Cure” means the occurrence of any of the following, as applicable: (i) the execution and delivery of a replacement lease and estoppel certificate for the Non-Primary Tenant’s leased space in form and substance reasonably acceptable to the lender, (ii) the Non-Primary Tenant (a) has revoked its intention to vacate, (b) is occupying its leased premises and (c) has paid all amounts due under the lease or (iii) the Non-Primary Tenant lease has been assumed by the applicable Non-Primary Tenant in accordance with applicable law, such assumption has been approved by the appropriate bankruptcy court having jurisdiction over such matter and such Non-Primary Tenant is no longer involved in any bankruptcy or insolvency proceeding.
Property Management. The Cathedral Place Property is managed by an affiliate of the borrower.
Assumption.The borrower has the right to transfer the Cathedral Place Property, provided that certain conditions are satisfied, including (i) no event of default has occurred and is continuing; (ii) the proposed transferee and transferee’s principal have the creditworthiness, reputation, and qualifications to the lender’s satisfaction, as well as an aggregate net worth and liquidity reasonably acceptable to the lender; (iii) the lender has received confirmation from Fitch, KBRA and Moody’s that such assumption will not result in a downgrade, withdrawal or qualification of the respective ratings assigned to the Series 2015-C29 Certificates; and (iv) the Cathedral Place – Parking Mortgage Loan is assumed simultaneously.
Partial Release. Not permitted.
Real Estate Substitution. Not permitted.
Subordinate and Mezzanine Indebtedness. Not permitted.
Ground Lease. None
Terrorism Insurance.The loan documents require that the “all risk” insurance policy required to be maintained by the borrower provide coverage for terrorism in an amount equal to the full replacement cost of the Cathedral Place Property so long as the lender determines that either (i) prudent owners of real estate comparable to the Cathedral Place Property are maintaining the same level of coverage or (ii) prudent institutional lenders to such owners are requiring that such owners maintain such insurance. The loan documents also require business interruption insurance covering no less than the 18-month period following the occurrence of a casualty event, together with an extended period of indemnity that is unlimited as to the number of days.
A-3-19 |
150 ROYALL STREET |
A-3-20 |
150 ROYALL STREET |
A-3-21 |
No. 3 – 150 Royall Street |
Loan Information | Property Information | ||||||
Mortgage Loan Seller: | Wells Fargo Bank, National Association | Single Asset/Portfolio: | Single Asset | ||||
Credit Assessment (Fitch/KBRA/Moody’s): | NR/NR/NR | Property Type: | Office | ||||
Original Principal Balance: | $38,187,500 | Specific Property Type: | Suburban | ||||
Cut-off Date Principal Balance: | $38,187,500 | Location: | Canton, MA | ||||
% of Initial Pool Balance: | 3.2% | Size: | 259,341 SF | ||||
Loan Purpose: | Acquisition | Cut-off Date Principal Balance Per SF: | $147.25 | ||||
Borrower Name: | BAC Canton Holdings LLC | Year Built/Renovated: | 1985/2007 | ||||
Sponsors: | Jay O. Hirsh; James S. Hughes | Title Vesting: | Fee | ||||
Mortgage Rate: | 4.140% | Property Manager: | Self-managed | ||||
Note Date: | May 27, 2015 | 3rd Most Recent Occupancy(2): | NAV | ||||
Anticipated Repayment Date: | NAP | 2nd Most Recent Occupancy(2): | NAV | ||||
Maturity Date: | June 11, 2025 | Most Recent Occupancy(2): | NAV | ||||
IO Period: | 60 months | Current Occupancy (As of)(3): | 100.0% (4/1/2015) | ||||
Loan Term (Original): | 120 months | ||||||
Seasoning: | 0 months | Underwriting and Financial Information: | |||||
Amortization Term (Original): | 360 months | ||||||
Loan Amortization Type: | Interest-only, Amortizing Balloon | 3rd Most Recent NOI(2): | NAV | ||||
Interest Accrual Method: | Actual/360 | 2nd Most Recent NOI(2): | NAV | ||||
Call Protection: | L(24),D(92),O(4) | Most Recent NOI(2): | NAV | ||||
Lockbox Type: | Soft/Springing Cash Management | ||||||
Additional Debt: | None | ||||||
Additional Debt Type: | NAP | U/W Revenues: | $6,382,931 | ||||
U/W Expenses: | $2,802,786 | ||||||
U/W NOI: | $3,580,145 | ||||||
U/W NCF: | $3,136,672 | ||||||
Escrows and Reserves(1): | U/W NOI DSCR: | 1.61x | |||||
U/W NCF DSCR: | 1.41x | ||||||
Type: | Initial | Monthly | Cap (If Any) | U/W NOI Debt Yield: | 9.4% | ||
Taxes | $125,155 | $62,578 | NAP | U/W NCF Debt Yield: | 8.2% | ||
Insurance | $0 | Springing | NAP | As-Is Appraised Value: | $58,900,000 | ||
Replacement Reserves | $0 | Springing | NAP | As-Is Appraisal Valuation Date: | February 25, 2015 | ||
TI/LC Reserve | $0 | $27,015 | NAP | Cut-off Date LTV Ratio: | 64.8% | ||
Gray, Gray & Gray Reserve | $187,253 | $0 | NAP | LTV Ratio at Maturity or ARD: | 59.0% |
(1) | See “Escrows” section. |
(2) | Historical occupancy and financials are not available, as the borrower recently acquired the 150 Royall Street Property, which was previously owner-occupied. |
(3) | See “Historical Occupancy” section. |
The Mortgage Loan.The mortgage loan (the “150 Royall Street Mortgage Loan”) is evidenced by a single promissory note that is secured by a first mortgage encumbering the fee interest in an office building located in Canton, Massachusetts (the “150 Royall Street Property”). The 150 Royall Street Mortgage Loan was originated on May 27, 2015 by Wells Fargo Bank, National Association. The 150 Royall Street Mortgage Loan had an original principal balance of $38,187,500, has an outstanding principal balance as of the Cut-off Date of $38,187,500 and accrues interest at an interest rate of 4.140%per annum. The 150 Royall Street Mortgage Loan had an initial term of 120 months, has a remaining term of 120 months as of the Cut-off Date and requires interest-only payments for the first 60 payments following origination and, thereafter, requires payments of principal and interest based on a 30-year amortization schedule. The 150 Royall Street Mortgage Loan matures on June 11, 2025.
Following the lockout period, the borrower has the right to defease the 150 Royall Street Mortgage Loan in whole, but not in part, on any date before March 11, 2025. In addition, the 150 Royall Street Mortgage Loan is prepayable without penalty on or after March 11, 2025.
A-3-22 |
150 ROYALL STREET |
Sources and Uses
Sources | Uses | |||||||
Original loan amount | $38,187,500 | 64.0% | Purchase price | $58,000,000 | 97.3% | |||
Sponsor’s new cash contribution
| 21,437,751 | 36.0 | Reserves | 312,408 | 0.5 | |||
Closing costs | 1,312,843 | 2.2 | ||||||
Total Sources | $59,625,251 | 100.0% | Total Uses | $59,625,251 | 100.0% |
The Property.The 150 Royall Street Property is a two-story, class A suburban office building totaling 259,341 square feet located in Canton, Massachusetts, approximately 15.5 miles southwest of the Boston central business district. Built in 1985 and renovated in 2007, the 150 Royall Street Property is situated on a 20.2-acre parcel and its amenities include a landscaped indoor atrium, 7,900-square-foot fitness center with locker rooms, conference center, full-service cafeteria and shuttle service. The building’s main entrance has a full-time security guard and opens into the central atrium area. Tenant Gray, Gray & Gray has a private entrance that leads directly into its space. The 150 Royall Street Property comprises 1,080 surface parking spaces, resulting in a parking ratio of 4.2 spaces per 1,000 square feet of rentable area. As of April 1, 2015, the 150 Royall Street Property was 100.0% leased by three tenants.
The largest tenant at the 150 Royall Street Property is Chicago Bridge & Iron (“CB&I”; NYSE: CBI; market cap of approximately $6.0 billion as of June 4, 2015), which accounts for 72.8% of the net rentable area and 69.0% of the underwritten base rent. With 125 years of experience and approximately 54,000 employees, CB&I is one of the world’s largest engineering, procurement and construction companies focused on the global energy industry. CB&I offers a wide range of services including design, engineering, construction, fabrication, maintenance and environmental services.
The following table presents certain information relating to the tenancy at the 150 Royall Street Property:
Major Tenants
Tenant Name | Credit Rating (Fitch/Moody’s/ S&P)(1) | Tenant NRSF | % of NRSF | Annual U/W Base Rent PSF(2) | Annual U/W Base Rent(2) | % of Total Annual U/W Base Rent | Lease Expiration Date |
Major Tenants | |||||||
CB&I(3) | NR/NR/NR | 188,857 | 72.8% | $23.50 | $4,438,140 | 69.0% | 1/31/2023(4) |
OneBeacon | BBB+/NR/BBB- | 41,185 | 15.9% | $28.50 | $1,173,773 | 18.3% | 3/31/2025 |
Gray, Gray & Gray(5) | NR/NR/NR | 29,299(6) | 11.3% | $27.92 | $818,028 | 12.7% | 4/1/2030(7) |
Total Major Tenants | 259,341 | 100.0% | $24.79 | $6,429,940 | 100.0% | ||
Vacant Space | 0 | 0.0% | |||||
Collateral Total | 259,341 | 100.0% | |||||
(1) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
(2) | Annual U/W Base Rent PSF and Annual U/W Base Rent include contractual rent steps through December 2015 totaling $122,347. |
(3) | CB&I is currently not utilizing approximately 35,000 square feet of its space. |
(4) | CB&I has the right to terminate its lease on August 31, 2018 with 12 months’ written notice and payment of a termination fee equal to approximately $9.1 million. |
(5) | Gray, Gray & Gray is in a free rent period and will commence rent payments in July 2015. A reserve has been taken for this rent abatement. |
(6) | 3,480 square feet of Gray, Gray & Gray’s space is expansion space that is currently leased by OneBeacon. Gray, Gray & Gray is obligated by the terms of its lease to take over the expansion space no later than April 2020. Until Gray, Gray & Gray takes over its expansion space, OneBeacon is responsible for rent payments at Gray, Gray & Gray’s contractual rental rate. |
(7) | Gray, Gray & Gray has the right to terminate its lease on July 31, 2025 with 12 months’ written notice and payment of a termination fee equal to approximately $1.3 million. |
A-3-23 |
150 ROYALL STREET |
The following table presents certain information relating to the lease rollover schedule at the 150 Royall Street Property:
Lease Expiration Schedule(1)(2)
Year Ending December 31, | No. of Leases Expiring | Expiring NRSF | % of Total NRSF | Cumulative Expiring NRSF | Cumulative % of Total NRSF | Annual U/W Base Rent | Annual U/W Base Rent PSF |
MTM | 0 | 0 | 0.0% | 0 | 0.0% | $0 | $0.00 |
2015 | 0 | 0 | 0.0% | 0 | 0.0% | $0 | $0.00 |
2016 | 0 | 0 | 0.0% | 0 | 0.0% | $0 | $0.00 |
2017 | 0 | 0 | 0.0% | 0 | 0.0% | $0 | $0.00 |
2018 | 0 | 0 | 0.0% | 0 | 0.0% | $0 | $0.00 |
2019 | 0 | 0 | 0.0% | 0 | 0.0% | $0 | $0.00 |
2020 | 0 | 0 | 0.0% | 0 | 0.0% | $0 | $0.00 |
2021 | 0 | 0 | 0.0% | 0 | 0.0% | $0 | $0.00 |
2022 | 0 | 0 | 0.0% | 0 | 0.0% | $0 | $0.00 |
2023 | 1 | 188,857 | 72.8% | 188,857 | 72.8% | $4,438,140 | $23.50 |
2024 | 0 | 0 | 0.0% | 188,857 | 72.8% | $0 | $0.00 |
2025 | 1 | 41,185 | 15.9% | 230,042 | 88.7% | $1,173,773 | $28.50 |
Thereafter | 1 | 29,299 | 11.3% | 259,341 | 100.0% | $818,028 | $27.92 |
Vacant | 0 | 0 | 0.0% | 259,341 | 100.0% | $0 | $0.00 |
Total/Weighted Average | 3 | 259,341 | 100.0% | $6,429,940 | $24.79 |
(1) | Information obtained from the underwritten rent roll. |
(2) | Certain tenants may have lease termination options that are exercisable prior to the originally stated expiration date of the subject lease and that are not considered in the Lease Expiration Schedule. |
The following table presents historical occupancy percentages at the 150 Royall Street Property:
Historical Occupancy
12/31/2012(1) | 12/31/2013(1) | 12/31/2014(1) | 4/1/2015(2) |
NAV | NAV | NAV | 100.0% |
(1) | Historical occupancy is not available, as the borrower recently acquired the 150 Royall Street Property, which was previously owner-occupied. |
(2) | Information obtained from the underwritten rent roll. CB&I is currently not utilizing approximately 35,000 square feet of its space. Excluding this space, the physical occupancy was 86.5% as of April 1, 2015. |
Operating History and Underwritten Net Cash Flow. The following table presents certain information relating to the underwritten net cash flow at the 150 Royall Street Property:
Cash Flow Analysis(1)
U/W | % of U/W Effective Gross Income | U/W $ per SF | |
Base Rent | $6,429,940 | 100.7% | $24.79 |
Grossed Up Vacant Space | 0 | 0.0 | 0.00 |
Total Reimbursables | 403,087 | 6.3 | 1.55 |
Less Vacancy | (450,096)(2) | (7.1) | (1.74) |
Effective Gross Income | $6,382,931 | 100.0% | $24.61 |
Total Operating Expenses | $2,802,786 | 43.9% | $10.81 |
|
|
| |
Net Operating Income | $3,580,145 | 56.1% | $13.80 |
TI/LC | 389,012 | 6.1 | 1.50 |
Capital Expenditures | 54,462 | 0.9 | 0.21 |
Net Cash Flow | $3,136,672 | 49.1% | $12.09 |
NOI DSCR | 1.61x | ||
NCF DSCR | 1.41x | ||
NOI DY | 9.4% | ||
NCF DY | 8.2% |
(1) | Historical financials are not available, as the borrower recently acquired the 150 Royall Street Property, which was previously owner-occupied. |
(2) | The underwritten economic vacancy is 7.0%. The 150 Royall Street Property was 100.0% leased and 86.5% physically occupied as of April 1, 2015. |
A-3-24 |
150 ROYALL STREET |
Appraisal.As of the appraisal valuation date of February 25, 2015, the 150 Royall Street Property had an “as-is” appraised value of $58,900,000.
Environmental Matters. According to a Phase I environmental site assessment dated February 25, 2015, there was no evidence of any recognized environmental conditions at the 150 Royall Street Property.
Market Overview and Competition. The 150 Royall Street Property is located in Canton, Norfolk County, Massachusetts, approximately 15.5 miles southwest of the Boston central business district and 35.3 miles northeast of Providence, Rhode Island. The 150 Royall Street Property is situated along the south side of Royall Street, which runs parallel to Interstate 93, a major north/south artery. In addition to Interstate 93, primary access to the surrounding area is provided by Interstate 95, and secondary access is provided by Routes 1 and 138. In addition, the 150 Royall Street Property is located two miles northeast of the Canton Center Station of the local Massachusetts Bay Transportation Authority Commuter Rail line, which provides direct access to downtown Boston. The 150 Royall Street Property is situated within a commercial area that is home to the national headquarters of notable commercial tenants including Dunkin Brands and Reebok International. According to a third-party market research report, as of 2015, the estimated population within a three- and five-mile radius of the 150 Royall Street Property was 38,100 and 189,646, respectively, and the median household income within the same three- and five-mile radii was $86,415 and $76,329, respectively.
According to a third-party market research report, the 150 Royall Street Property is situated within the Route 1 South submarket of the Boston office market. As of the first quarter of 2015, the submarket reported a total inventory of 245 properties totaling approximately 8.0 million square feet with a 9.5% vacancy rate. The submarket reported a class A inventory comprising 18 properties totaling approximately 3.0 million square feet with a 7.7% vacancy rate. The appraiser concluded to a market rent for the 150 Royall Street Property of $27.50 per square foot, full service gross, which is approximately 10.9% above the average underwritten base rent.
The following table presents certain information relating to comparable properties to the 150 Royall Street Property:
Competitive Set(1)
150 Royall (Subject) | Dedham Executive Center | 45 Shawmut Road | Watermill Center | Hobbs Brook Office Park | Charles River Place | |
Location | Canton, MA | Dedham, MA | Canton, MA | Waltham, MA | Waltham, MA | Needham, MA |
Distance from Subject | -- | 8.6 miles | 4.8 miles | 15.6 miles | 19.4 miles | 11.3 miles |
Property Type | Office | Office | Office | Office | Office | Office |
Year Built/Renovated | 1985/2007 | 1974/2007 | 1998/NAP | 1984/NAP | 1989/2005 | 1995/1998 |
Stories | 2 | 3 | 3 | 6 | 4 | 2 |
Total GLA | 259,341 SF | 178,292 SF | 66,000 SF | 206,722 SF | 440,000 SF | 103,000 SF |
Total Occupancy | 100% | 93% | 100% | 93% | 92% | 100% |
(1) Information obtained from the appraisal and third-party market research reports.
The Borrower.The borrower is BAC Canton Holdings LLC, a Delaware limited liability company and single purpose entity with one independent director. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the 150 Royall Street Mortgage Loan. Jay O. Hirsh and James S. Hughes are the guarantors of certain nonrecourse carveouts under the 150 Royall Street Mortgage Loan.
The Sponsors.The sponsors are Jay O. Hirsh and James S. Hughes. Mr. Hirsh is the co-founder and managing partner of Jumbo Capital Management (“JCM”) and has extensive experience with real estate acquisitions, construction and renovation throughout the Boston metropolitan area. JCM has more than $75.0 million in equity under management with 17 properties totaling more than 1.0 million square feet. JCM’s portfolio comprises a variety of tenants including Oracle, Amphenol, Morgan Stanley, AT&T, Verizon, HUB International, Preferred Freezer Services and Waddington North America. Mr. Hughes is the founder and principal of Boston Andes Capital (“BAC”). BAC is a real estate investment, consulting, asset management and development firm headquartered in Boston. Since 2011, BAC has participated in a variety of real estate projects in the New England area, and assets currently under management include existing and new development office and apartment buildings.
Escrows.The loan documents provide for upfront reserves in the amount of $125,155 for real estate taxes and $187,253 for potential tenant improvements and leasing commissions (“TI/LCs”) related to the expansion space to be occupied by Gray, Gray & Gray. The loan documents also provide for ongoing monthly reserves of $62,578 for real estate taxes and $27,015 for general TI/LCs. The loan documents do not require monthly replacement reserves as long as (a) no event of default has occurred; and (b) the 150 Royall Street Property is being adequately maintained. The loan documents do not require monthly escrows for insurance, provided that (i) no event of default has occurred; (ii) the 150 Royall Street Property is insured via an acceptable blanket insurance policy; and (iii) the borrower provides the lender with evidence of renewal of the insurance policies and timely proof of payment of insurance premiums.
Lockbox and Cash Management.The 150 Royall Street Mortgage Loan requires a lender-controlled lockbox account, which is already in place, and that the borrower deposit all rents directly into such lockbox account. The loan documents also require that all rents received by the borrower or the property manager be deposited into the lockbox account within one business day of receipt. Prior to the occurrence of a Cash Trap Event Period (as defined below), all cash flow is distributed to the borrower. During a Cash Trap Event Period, all cash flow is swept to a lender-controlled cash management account.
A-3-25 |
150 ROYALL STREET |
A “Cash Trap Event Period” will commence upon the earlier of (i) the occurrence and continuance of an event of default; (ii) the amortizing debt service coverage ratio falling below 1.15x at the end of any calendar month; or (iii) the occurrence of a Tenant Trigger Event (as defined below). A Cash Trap Event Period will be cured, with regard to clause (i), upon the cure of such event of default; with regard to clause (ii), upon the amortizing debt service coverage ratio being equal to or greater than 1.25x for two consecutive calendar quarters; and with regard to clause (iii), upon the termination of such Tenant Trigger Event.
A “Tenant Trigger Event” will commence upon either CB&I or OneBeacon (or either tenant’s parent company, as applicable) (i) filing for bankruptcy or becoming insolvent; (ii) defaulting under its lease; (iii) receiving a rent reduction; (iv) indicating its intention to terminate its lease; (v) going dark; or (vi) failing to exercise its extension option at least (a) 18 months prior to its lease expiration date for CB&I and (b) 12 months prior to its lease expiration date for OneBeacon. A Tenant Trigger Event will be cured, with regard to clause (i), upon the applicable tenant having its lease affirmed in connection with a plan of reorganization and commencing the payment and performance of its obligations under such lease; and with respect to clauses (ii) through (vi), upon the applicable tenant resuming operations in accordance with the terms of its lease for a period of 60 days. In addition, a Tenant Trigger Event triggered by clauses (i) through (vi) will be cured upon the date on which the applicable tenant’s space has been leased to one or more replacement tenants acceptable to the lender; such replacement tenants are paying full, unabated rent, and are in occupancy of and utilizing their space; and all required tenant improvements required under such replacement tenant lease have been completed.
Property Management. The 150 Royall Street Property is managed by an affiliate of the borrower.
Assumption.The borrower has a two-time right to transfer the 150 Royall Street Property, provided that certain conditions are satisfied, including (i) no event of default has occurred and is continuing; (ii) the lender has reasonably determined that the proposed transferee and guarantor satisfy the lender’s credit review and underwriting standards, taking into consideration transferee’s experience, financial strength and general business standing; and (iii) the lender has received confirmation from Fitch, KBRA and Moody’s that such assumption will not result in a downgrade, withdrawal or qualification of the respective ratings assigned to the Series 2015-C29 Certificates.
Partial Release. Not permitted.
Real Estate Substitution.Not permitted.
Subordinate and Mezzanine Indebtedness.None.
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 150 Royall Street Property; provided however, if the Terrorism Risk Insurance Program Reauthorization Act is discontinued or not renewed, the borrower will not be required to pay annual premiums in excess of two times the amount of a standalone all-risk poicy. The loan documents also require business interruption insurance covering no less than the 18-month period following the occurrence of a casualty event, together with a six-month extended period of indemnity.
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A-3-27 |
WPC SELF STORAGE PORTFOLIO VII |
A-3-28 |
WPC SELF STORAGE PORTFOLIO VII |
A-3-29 |
No. 4 – WPC Self Storage Portfolio VII | ||||||||
Loan Information | Property Information | |||||||
Mortgage Loan Seller: | Wells Fargo Bank, National Association | Single Asset/Portfolio: | Portfolio | |||||
Credit Assessment (Fitch/KBRA/Moody’s): | NR/NR/NR | Property Type: | Self Storage | |||||
Original Principal Balance: | $37,245,000 | Specific Property Type: | Self Storage | |||||
Cut-off Date Principal Balance: | $37,245,000 | Location: | Various – See Table | |||||
% of Initial Pool Balance: | 3.2% | Size: | 650,686 SF | |||||
Loan Purpose: | Acquisition | Cut-off Date Principal Balance Per SF: | $57.24 | |||||
Borrower Names(1): | Various | Year Built/Renovated: | Various – See Table | |||||
Sponsor: | Corporate Property Associates 18 – Global Incorporated | Title Vesting: | Fee | |||||
Mortgage Rate: | 4.300% | Property Manager(3): | Various | |||||
Note Date: | May 27, 2015 | 3rdMost Recent Occupancy (As of)(4): | NAV (12/31/2012) | |||||
Anticipated Repayment Date: | NAP | 2ndMost Recent Occupancy (As of)(4): | 80.7% (12/31/2013) | |||||
Maturity Date: | June 11, 2025 | Most Recent Occupancy (As of)(4): | 84.0% (12/31/2014) | |||||
IO Period: | 120 months | Current Occupancy (As of)(4): | 88.3% (Various) | |||||
Loan Term (Original): | 120 months | |||||||
Seasoning: | 0 months | Underwriting and Financial Information: | ||||||
Amortization Term (Original): | NAP | |||||||
Loan Amortization Type: | Interest-only, Balloon | 3rdMost Recent NOI (As of)(5): | $3,059,624 (Various) | |||||
Interest Accrual Method: | Actual/360 | 2ndMost Recent NOI (As of): | $3,613,336 (12/31/2014) | |||||
Call Protection: | L(24),D(92),O(4) | Most Recent NOI (As of)(5): | $3,760,875 (Various) | |||||
Lockbox Type: | Springing (Without Established Account) | |||||||
Additional Debt: | None | U/W Revenues: | $5,789,282 | |||||
Additional Debt Type: | NAP | U/W Expenses: | $2,407,887 | |||||
U/W NOI: | $3,381,395 | |||||||
U/W NCF: | $3,249,081 | |||||||
U/W NOI DSCR: | 2.08x | |||||||
Escrows and Reserves(2): | U/W NCF DSCR: | 2.00x | ||||||
U/W NOI Debt Yield: | 9.1% | |||||||
Type: | Initial | Monthly | Cap (If Any) | U/W NCF Debt Yield: | 8.7% | |||
Taxes | $0 | Springing | NAP | As-Is Appraised Value: | $57,350,000 | |||
Insurance | $0 | Springing | NAP | As-Is Appraisal Valuation Date(6): | Various | |||
Replacement Reserves | $0 | Springing | NAP | Cut-off Date LTV Ratio: | 64.9% | |||
Amortization Reserves | $0 | Springing | NAP | LTV Ratio at Maturity or ARD: | 64.9% | |||
(1) | See “The Borrowers” section. |
(2) | See “Escrows” section. |
(3) | See “Property Management” section. |
(4) | See “Historical Occupancy” section. |
(5) | See “Cash Flow Analysis” section. |
(6) | See “Appraisal” section. |
The Mortgage Loan. The mortgage loan (the “WPC Self Storage Portfolio VII Mortgage Loan”) is evidenced by a single promissory note that is secured by first mortgages encumbering nine self storage properties located in five states (the “WPC Self Storage Portfolio VII Properties”). The WPC Self Storage Portfolio VII Mortgage Loan was originated on May 27, 2015 by Wells Fargo Bank, National Association. The WPC Self Storage Portfolio VII Mortgage Loan had an original principal balance of $37,245,000, has an outstanding principal balance as of the Cut-off Date of $37,245,000 and accrues interest at an interest rate of 4.300%per annum. The WPC Self Storage Portfolio VII Mortgage Loan had an initial term of 120 months, has a remaining term of 120 months as of the Cut-off Date and requires interest-only payments through the term of the WPC Self Storage Portfolio VII Mortgage Loan. The WPC Self Storage Portfolio VII Mortgage Loan matures on June 11, 2025.
Following the lockout period, the borrower has the right to defease the WPC Self Storage Portfolio VII Mortgage Loan in whole or in part (see “Partial Release” section), on any day before March 11, 2025. In addition, the WPC Self Storage Portfolio VII Mortgage Loan is prepayable without penalty on or after March 11, 2025.
A-3-30 |
WPC SELF STORAGE PORTFOLIO VII |
Sources and Uses
Sources | Uses | |||||||
Original loan amount | $37,245,000 | 64.5% | Purchase price | $57,300,000 | 99.2% | |||
Sponsor’s new cash contribution | 20,511,503 | 35.5% | Closing costs | 456,503 | 0.8 | |||
Total Sources | $57,756,503 | 100.0% | Total Uses | $57,756,503 | 100.0% |
The Properties.The WPC Self Storage Portfolio VII Mortgage Loan is secured by the fee interest in a portfolio of nine self storage properties totaling 650,686 rentable square feet or 5,487 units (including 311 RV spots) and located in five states: Florida (4), Georgia (2), Nevada (1), Kentucky (1), and Illinois (1). The WPC Self Storage Portfolio VII Properties range in size from 32,358 square feet to 118,780 square feet and as of dates ranging from March 31, 2015, to April 22, 2015, the WPC Self Storage Portfolio VII Properties were 88.3% occupied.
The following table presents certain information relating to the WPC Self Storage Portfolio VII Properties:
Property Name – Location | Allocated Cut-off Date Principal Balance | % of Portfolio Cut-off Date Principal Balance | Occupancy | Year Built/ Renovated | Net Rentable Area (SF) | Appraised Value | Allocated LTV |
Extra Space – Louisville, KY | $6,607,250 | 17.7% | 97.8% | 1998/2008 | 103,497 | $10,200,000 | 64.8% |
Extra Space – Las Vegas, NV | $6,370,000 | 17.1% | 93.4% | 1996/NAP | 74,045 | $9,800,000 | 65.0% |
CubeSmart – Panama City Beach, FL (Joan Avenue) | $6,175,000 | 16.6% | 84.3% | 1996/NAP | 86,426 | $9,500,000 | 65.0% |
CubeSmart – Tallahassee, FL | $4,923,750 | 13.2% | 75.1% | 1999/NAP | 118,780 | $7,600,000 | 64.8% |
Extra Space – Lady Lake, FL | $3,948,750 | 10.6% | 88.6% | 2010/NAP | 68,750 | $6,100,000 | 64.7% |
CubeSmart – Crystal Lake, IL | $2,632,500 | 7.1% | 85.4% | 1976/NAP | 58,157 | $4,050,000 | 65.0% |
CubeSmart – Panama City Beach, FL (Hutchinson Boulevard) | $2,622,750 | 7.0% | 97.9% | 1997/NAP | 42,301 | $4,000,000 | 65.6% |
Extra Space – Lilburn, GA | $2,340,000 | 6.3% | 90.8% | 1988/NAP | 66,372 | $3,600,000 | 65.0% |
Extra Space – Stockbridge, GA | $1,625,000 | 4.4% | 91.8% | 2003/NAP | 32,358 | $2,500,000 | 65.0% |
Total/Weighted Average | $37,245,000 | 100.0% | 88.3% | 650,686 | $57,350,000 | 64.9% |
The following table presents historical occupancy percentages at the WPC Self Storage Portfolio VII Properties:
Historical Occupancy
12/31/2012 | 12/31/2013(1) | 12/31/2014(1) | Various(2) |
NAV | 80.7% | 84.0% | 88.3% |
(1) | Information obtained from the borrower. |
(2) | Information obtained from the underwritten rent roll. Current Occupancy is based on dates ranging from March 31, 2015 to April 22, 2015. |
A-3-31 |
WPC SELF STORAGE PORTFOLIO VII |
Operating History and Underwritten Net Cash Flow. The following table presents certain information relating to the historical operating performance and the underwritten net cash flow at the WPC Self Storage Portfolio VII Properties:
Cash Flow Analysis
Various(1) | 2014 | Various(2) | U/W | % of U/W Effective Gross Income | U/W $ per SF | ||||||||
Base Rent | $4,815,783 | $5,315,809 | $5,444,327 | $5,886,837 | 101.7% | $9.05 | |||||||
Grossed Up Vacant Space | 0 | 0 | 0 | 819,612 | 14.1 | 1.26 | |||||||
Less Concessions | 0 | 0 | 0 | 0 | 0.0 | 0.00 | |||||||
Other Income | 233,654 | 332,393 | 349,050 | 349,050 | 6.0 | 0.54 | |||||||
Less Vacancy & Credit Loss | 0 | 0 | 0 | (1,266,217)(3) | (21.9) | (1.95) | |||||||
Effective Gross Income | $5,049,437 | $5,648,201 | $5,793,377 | $5,789,282 | 100.0% | $8.90 | |||||||
Total Operating Expenses | $1,989,813 | $2,034,865 | $2,032,503 | $2,407,887 | 41.6% | 3.70 | |||||||
Net Operating Income | $3,059,624 | $3,613,336 | $3,760,875 | $3,381,395 | 58.4% | $5.20 | |||||||
Capital Expenditures | 0 | 0 | 0 | 132,314 | 2.3 | 0.20 | |||||||
Net Cash Flow | $3,059,624 | $3,613,336 | $3,760,875 | $3,249,081 | 56.1% | $4.99 | |||||||
NOI DSCR | 1.88x | 2.22x | 2.31x | 2.08x | |||||||||
NCF DSCR | 1.88x | 2.22x | 2.31x | 2.00x | |||||||||
NOI DY | 8.2% | 9.7% | 10.1% | 9.1% | |||||||||
NCF DY | 8.2% | 9.7% | 10.1% | 8.7% |
(1) | The 2013 financials represent the year-end 2013 period for eight of the WPC Self Storage Portfolio VII Properties and the trailing 12-month period ending April 30, 2014 for one of the WPC Self Storage Portfolio VII Properties. |
(2) | The most recent financials represent the trailing 12-month period ending January 31, 2015 for one of the WPC Self Storage Portfolio VII Properties, February 28, 2015 for one of the WPC Self Storage Portfolio VII Properties and March 31, 2015 for seven of the WPC Self Storage Portfolio VII Properties. |
(3) | The underwritten economic vacancy is 18.9%. As of dates ranging from March 31, 2015 to April 22, 2015, the WPC Self Storage Portfolio VII Properties were 88.3% physically occupied. |
Appraisal. As of the appraisal valuation dates ranging from April 1, 2015 to April 25, 2015, the WPC Self Storage Portfolio VII Properties had an aggregate “as-is” appraised value of $57,350,000.
Environmental Matters. According to Phase I environmental assessments dated December 31, 2014 through May 13, 2015, there was no evidence of any recognized environmental conditions at any of the WPC Self Storage Portfolio VII Properties.
The Borrowers. The borrower structure comprises eight separate Delaware limited liability companies, each of which is a single purpose entity with one independent director. Legal counsel to the borrower provided a non-consolidation opinion in connection with the origination of the WPC Self Storage Portfolio VII Mortgage Loan. Corporate Property Associates 18 – Global Incorporated (“CPA 18”) is the guarantor of certain nonrecourse carveouts under the WPC Self Storage Portfolio VII Mortgage Loan.
The Sponsor. The sponsor is CPA 18, a non-traded real estate investment trust. CPA 18 is managed by W.P. Carey (NYSE:WPC), an investment management company that provides long-term sale-leaseback and build-to-suit financing for companies worldwide. As of March 31, 2015, W.P. Carey managed a global investment portfolio comprising 852 commercial properties totaling 89.2 million square feet with an average occupancy rate of 98.4%.
Escrows. The loan documents do not require monthly escrows for real estate taxes provided the following conditions are met: (i) no event of default has occurred and is continuing and (ii) the borrower has provided the lender with timely proof of full payment. The loan documents do not require monthly escrows for insurance provided the following conditions are met: (i) no event of default has occurred and is continuing; (ii) the WPC Self Storage Portfolio VII Properties are insured via an acceptable blanket insurance policy; and (iii) the borrower provides the lender with evidence of renewal of the policies and timely proof of payment of the insurance premiums. The loan documents do not require monthly reserves for replacement reserves except upon the occurrence and continuance of an event of default, when the borrower will be required to deposit $10,845 monthly into a replacement reserve escrow.
The WPC Self Storage Portfolio VII Mortgage Loan is also structured with an amortization reserve account. During an Amortization Deposit Period (as defined below), the borrower is required to make monthly deposits into the amortization reserve account, as outlined in the amortization schedule in the loan agreement. The scheduled payments outlined in the amortization schedule are equivalent to the hypothetical principal payments assuming the WPC Self Storage Portfolio VII Mortgage Loan had a 30-year amortization period (with the same 4.300%per annum interest rate).
An “Amortization Deposit Period” is defined as any period on or after July 11, 2020, commencing upon the net cash flow debt yield being less than 10.5% at the end of any calendar quarter and ending when the net cash flow debt yield is equal to or greater than 11.0% for one calendar quarter.
Lockbox and Cash Management.Upon the occurrence of a Cash Trap Event Period (as defined below), the borrower will be required to establish a lender-controlled lockbox account and direct all tenants to deposit all rents directly into such lockbox account. Additionally, all revenues and other monies received by the borrower or property manager relating to the WPC Self Storage Portfolio VII Properties will be deposited into the lockbox account. During a Cash Trap Event Period, all excess funds on deposit in the lockbox account are swept to a lender-controlled subaccount on a monthly basis.
A-3-32 |
WPC SELF STORAGE PORTFOLIO VII |
A “Cash Trap Event Period” will commence upon the earlier of (i) the occurrence and continuance of an event of default; and (ii) the amortizing debt service coverage ratio (based on a 30-year amortization period) for the trailing 12-month period falling below 1.20x at the end of any calendar month. A Cash Trap Event Period will expire, with regard to clause (i), upon the cure of such event of default; and with regard to clause (ii), upon the amortizing debt service coverage ratio being equal to or greater than 1.30x for two consecutive calendar quarters.
Property Management.The WPC Self Storage Portfolio VII Properties are managed by Extra Space Management, Inc. and CubeSmart Asset Management, LLC.
Assumption. The borrower has a two-time right to transfer the WPC Self Storage Portfolio VII Properties in whole, provided that no event of default has occurred and is continuing and certain other conditions are satisfied, including (i) the lender’s reasonable determination that the proposed transferee and guarantor satisfy the lender’s credit review and underwriting standards, taking into consideration transferee experience, financial strength and general business standing; (ii) execution of a recourse guaranty and an environmental indemnity by an affiliate of the transferee; and (iii) if requested by the lender, rating agency confirmation from Fitch, KBRA and Moody’s that the transfer will not result in a downgrade, withdrawal or qualification of the respective ratings assigned to the Series 2015-C29 Certificates.
The borrower also has a two-time right to transfer any individual property (provided that any given property can only be transferred once) along with the allocated loan amount of such a transferred property in the WPC Self Storage Portfolio VII Mortgage Loan (“Partial Assumption”), provided that no event of default has occurred and is continuing and certain other conditions are satisfied, including (i) the portion of the WPC Self Storage Portfolio VII Mortgage Loan relating to the transferred property shall no longer be cross-collateralized and/or cross-defaulted with the remaining properties of the WPC Self Storage Portfolio VII Mortgage Loan; (ii) the loan-to-value ratio of both the property proposed to be transferred and the properties that would be remaining if such transfer occurred must be no greater than 65.0%; (iii) the amortizing debt service coverage ratio of both the property proposed to be transferred and the properties that would be remaining if such transfer occurred must be greater than 1.40x; and clauses (i) through (iii) outlined in the paragraph above.
Partial Release.Following the lockout period, the borrower is permitted to partially release any constituent properties in connection with a partial defeasance, subject to certain conditions including (i) no event of default has occurred and is continuing; (ii) partial defeasance of 125% of the released property’s allocated loan balance; (iii) the loan-to-value with respect to the remaining properties will be no greater than the lesser of 64.9% and the loan-to-value immediately prior to the release; (iv) the amortizing debt service coverage ratio (based on a 30-year amortization period) with respect to the remaining properties will be no less than the greater of the debt service coverage ratio at loan closing and the amortizing debt service coverage ratio immediately prior to the release; and (v) if required by the lender, receipt of rating agency confirmation from Fitch, KBRA and Moody’s that the release will not result in a downgrade, withdrawal or qualification of the respective ratings assigned to the Series 2015-C29 Certificates.
Real Estate Substitution.The borrower may obtain a release of any individual WPC Self Storage Portfolio VII Properties from the lien of the mortgage in connection with a substitution of a different property subject to the satisfaction of certain conditions, including without limitation (i) no event of default has occurred and is continuing; (ii) the substituted property must have a current appraised value equal to or greater than that of the released property, and the loan-to-value of the properties remaining following the substitution must be no greater than the lesser of 64.9% and the loan-to-value immediately prior to the substitution; (iii) the substituted property shall be equal or superior to that of the release property as to physical condition, building use and quality, lease terms favorable to the borrower and market attributes as determined by the lender; (iv) the substituted property must have a debt service coverage ratio equal to or greater than the released property, and the trailing 12-month amortizing debt service coverage ratio for the properties remaining following the substitution must be no less than the greater of the debt service coverage ratio at loan closing and the debt service coverage ratio prior to the substitution; (v) the lender receives a legal opinion that the substitution satisfies REMIC requirements; and (vi) the lender receives rating agency confirmation from Fitch, KBRA and Moody’s that the substitution will not result in a downgrade, withdrawal or qualification of the respective ratings assigned to the Series 2015-C29 Certificates.
Subordinate and Mezzanine Indebtedness.Not permitted.
Ground Lease. None.
Terrorism Insurance. The loan documents require that the “all risk” insurance policy required to be maintained by the borrower provide coverage for terrorism in an amount equal to the full replacement cost of the WPC Self Storage Portfolio VII Properties, as well as business interruption insurance covering no less than the 18-month period following the occurrence of a casualty event, together with a six-month extended period of indemnity.
Windstorm Insurance.The loan documents require windstorm insurance covering the full replacement cost of the WPC Self Storage Portfolio VII Properties during the loan term. At the time of loan closing, the WPC Self Storage Portfolio Properties had insurance coverage for windstorm.
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A-3-34 |
QUEENS’ MARKETPLACE |
A-3-35 |
QUEENS’ MARKETPLACE |
A-3-36 |
QUEENS’ MARKETPLACE |
A-3-37 |
No. 5 – Queens’ MarketPlace | |||||||
Loan Information | Property Information | ||||||
Mortgage Loan Seller: | Wells Fargo Bank, National Association | Single Asset/Portfolio: | Single Asset | ||||
Credit Assessment (Fitch/KBRA/Moody’s): | NR/NR/NR | Property Type: | Retail | ||||
Original Principal Balance: | $35,000,000 | Specific Property Type: | Anchored | ||||
Cut-off Date Principal Balance: | $35,000,000 | Location: | Waikoloa, HI | ||||
% of Initial Pool Balance: | 3.0% | Size: | 130,925 SF | ||||
Loan Purpose: | Refinance | Cut-off Date Principal Balance Per SF: | $267.33 | ||||
Borrower Name: | Queens’ Market, LLC | Year Built/Renovated: | 2007/NAP | ||||
Sponsors: | Waikoloa Development Co.; Seligman & Associates, Inc. | Title Vesting: | Fee | ||||
Mortgage Rate: | 4.130% | Property Manager: | Self-managed | ||||
Note Date: | May 21, 2015 | 3rdMost Recent Occupancy (As of)(3): | 57.2% (12/31/2012) | ||||
Anticipated Repayment Date: | NAP | 2ndMost Recent Occupancy (As of)(3): | 62.3% (12/31/2013) | ||||
Maturity Date: | June 11, 2025 | Most Recent Occupancy (As of)(3): | 66.9% (12/31/2014) | ||||
IO Period: | 120 months | Current Occupancy (As of)(3): | 66.1% (4/3/2015) | ||||
Loan Term (Original): | 120 months | ||||||
Seasoning: | 0 months | Underwriting and Financial Information: | |||||
Amortization Term (Original): | NAP | ||||||
Loan Amortization Type: | Interest-only, Balloon | 3rdMost Recent NOI (As of)(4): | $2,617,691 (12/31/2013) | ||||
Interest Accrual Method: | Actual/360 | 2ndMost Recent NOI (As of)(4): | $3,166,454 (12/31/2014) | ||||
Call Protection: | L(24),D(91),O(5) | Most Recent NOI (As of): | $3,156,655 (TTM 2/28/2015) | ||||
Lockbox Type: | Springing (Without Established Account) | ||||||
Additional Debt(1): | Yes | U/W Revenues: | $7,144,696 | ||||
Additional Debt Type(1): | Future Mezzanine | U/W Expenses: | $3,841,397 | ||||
U/W NOI: | $3,303,299 | ||||||
Escrows and Reserves(2): | U/W NCF: | $3,083,595 | |||||
U/W NOI DSCR: | 2.25x | ||||||
Type: | Initial | Monthly | Cap (If Any) | U/W NCF DSCR: | 2.10x | ||
Taxes | $144,205(2) | $28,841(2) | NAP | U/W NOI Debt Yield: | 9.4% | ||
Insurance | $0 | Springing | NAP | U/W NCF Debt Yield: | 8.8% | ||
Replacement Reserves | $0 | $1,637 | NAP | As-Is Appraised Value: | $55,500,000 | ||
TI/LC Reserve | $0 | $9,275(2) | $334,000(2) | As-Is Appraisal Valuation Date: | April 1, 2015 | ||
Rent Concession Reserve | $164,280 | $0 | NAP | Cut-off Date LTV Ratio: | 63.1% | ||
Outstanding TI/LC Reserve | $688,807 | $0 | NAP | LTV Ratio at Maturity or ARD: | 63.1% | ||
(1) | See “Subordinate and Mezzanine Indebtedness” section. |
(2) | See “Escrows” section. |
(3) | Historical and Current Occupancy excludes 14,205 square feet (10.8% of net rentable area) leased to a borrower-related entity through April 2021, which is currently vacant. Inclusive of the borrower-related lease, Current Occupancy was 77.0% as of April 3, 2015. See “The Property” and “Cash Flow Analysis” sections. |
(4) | See “Cash Flow Analysis” section. |
The Mortgage Loan.The mortgage loan (the “Queens’ MarketPlace Mortgage Loan”) is evidenced by a single promissory note that is secured by a first mortgage encumbering an anchored retail center located in Waikoloa, Hawaii (the “Queens’ MarketPlace Property”). The Queens’ MarketPlace Mortgage Loan was originated on May 21, 2015 by Wells Fargo Bank, National Association. The Queens’ MarketPlace Mortgage Loan had an original principal balance of $35,000,000, has an outstanding principal balance as of the Cut-off Date of $35,000,000 and accrues interest at an interest rate of 4.130%per annum. The Queens’ MarketPlace Mortgage Loan had an initial term of 120 months, has a remaining term of 120 months as of the Cut-off Date and requires interest-only payments through the term of the Queens’ MarketPlace Mortgage Loan. The Queens’ MarketPlace Mortgage Loan matures on June 11, 2025.
Following the lockout period, the borrower has the right to defease the Queens’ MarketPlace Mortgage Loan in whole, but not in part, on any date before February 11, 2025. In addition, the Queens’ MarketPlace Mortgage Loan is prepayable without penalty on or after February 11, 2025.
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Sources and Uses
Sources | Uses | |||||||
Original loan amount | $35,000,000 | 100.0% | Loan payoff | $18,997,437 | 54.3% | |||
Reserves | 997,292 | 2.8 | ||||||
Closing costs | 223,202 | 0.6 | ||||||
Return of equity | 14,782,069 | 42.2 | ||||||
Total Sources | $35,000,000 | 100.0% | Total Uses | $35,000,000 | 100.0% |
The Property.The Queens’ MarketPlace Property comprises a two-story, open-air shopping center totaling 130,925 square feet of rentable area that was constructed in 2007 on 29.2-acres and is located in Waikoloa, Hawaii (on “The Big Island” of Hawaii). The Queens’ MarketPlace Property is located along the Kohala Coast on the west side of The Big Island, within the Waikoloa Beach Resort, approximately 18.0 miles northwest of the Kona International Airport. The Waikoloa Beach Resort is a 1,150-acre resort community that has over 3,400 hotel rooms and luxury residential units. The Queens’ MarketPlace Property features a plaza area with a gazebo, exterior dining patios, seating areas throughout, a Koi pond and fountain with a bridge, and tropical, landscaped areas. Further, the 10.8-acre, 5,000-seat, open-air Waikoloa Bowl amphitheater was completed in 2008 and is part of the collateral for the Queens’ MarketPlace Mortgage Loan (however no income or value was attributed to this parcel or improvements – see “Free Release” section). The Waikoloa Bowl presents local Hawaiian music concerts, hula shows and big name bands and artists that provide a significant draw to the Queens’ MarketPlace Property.
The Queens’ MarketPlace Property features 10 buildings and was originally developed by the borrower in 2007 at an estimated cost of $66.4 million. As a result of the economic downturn, a portion of the initial construction loan for the Queens’ MarketPlace Property was forgiven, resulting in a discounted payoff. See “Description of the Mortgage Pool – Default History, Bankruptcy Issues and Other Proceedings” in the Free Writing Prospectus. The Queens’ MarketPlace Property is anchored by Island Gourmet Markets (18.0% of net rentable area), a Hawaiian-based grocery store offering fresh local and organic produce, seafood and numerous other offerings. Island Gourmet Markets generated sales of approximately $22.2 million ($938 per square foot) as of the trailing 12-month period ending February 2015, a 4.2% increase over 2013 levels. The remainder of the in-line tenancy is comprised of three restaurants and national and local retailers. Reporting in-line tenants (totaling 41.7% of net rentable area) generated sales of approximately $32.4 million as of the trailing 12-month period ending February 2015, or $593 per square foot. Including Island Gourmet Markets, the Queens’ MarketPlace Property generated total sales of approximately $54.6 million, or $697 per square foot as of the trailing-twelve months February 2015. The Queens’ MarketPlace Property contains 553 surface parking spaces, resulting in a parking ratio of 4.2 spaces per 1,000 square feet of rentable area. The Queens’ MarketPlace Property features 14,205 square feet (10.8% of net rentable area) of space referred to as “The Studio”, which is leased to a borrower related entity through April 2021, and base rent and reimbursements are not required to be paid. The space was originally intended to be a museum/studio space for music, film and the cultural arts, but with the onset of the recession as construction at the Queens’ MarketPlace Property was completed, the space was never built out. The Studio is currently used for additional storage and as a staging area for special events. Underwriting does not include any rent or reimbursements for this space; however there is a letter of intent from a theater tenant to lease 9,761 square feet of The Studio space (see “Cash Flow Analysis” section). As of April 3, 2015, the Queens’ MarketPlace Property was 66.1% occupied (and 77.0% leased including The Studio) by 47 tenants.
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The following table presents certain information relating to the tenancy at the Queens’ MarketPlace Property:
Major Tenants
Tenant Name | Credit Rating (Fitch/ Moody’s/ S&P) | Tenant NRSF | % of NRSF | Annual U/W Base Rent PSF(1) | Annual U/W Base Rent(1) | % of Total Annual U/W Base Rent | Sales PSF | Occupancy Cost(2) | Lease Expiration Date | |
Anchor Tenant | ||||||||||
Island Gourmet Markets | NR/NR/NR | 23,627 | 18.0% | $33.38 | $788,761 | 19.9% | $938 | 7.8% | 4/30/2021(3) | |
Total Anchor Tenant | 23,627 | 18.0% | $33.38 | $788,761 | 19.9% | |||||
Major Tenants | ||||||||||
Sansei Seafood | NR/NR/NR | 6,263 | 4.8% | $72.60 | $454,694 | 11.4% | $572 | 13.0% | 4/30/2018(4) | |
Quiksilver | NR/NR/NR | 4,392 | 3.4% | $82.75 | $363,456 | 9.1% | $384 | 29.1% | 4/30/2021 | |
Romano’s Macaroni Grill | NR/NR/NR | 6,196 | 4.7% | $32.52 | $201,467 | 5.1% | $724 | 6.7% | 11/30/2018 | |
Daylight Mind Cafe(5) | NR/NR/NR | 3,079 | 2.4% | $48.00 | $147,792 | 3.7% | NAV | NAV | 12/31/2025 | |
Lemongrass Express Bistro | NR/NR/NR | 817 | 0.6% | $140.24 | $114,577 | 2.9% | $1,112 | 13.0% | 1/31/2018 | |
Total Major Tenants | 20,747 | 15.8% | $61.79 | $1,281,986 | 32.3% | |||||
Non-Major Tenants(6) | 42,231 | 32.3% | $45.05(6) | $1,902,707 | 47.9% | |||||
Occupied Collateral Total(6) | 86,605 | 66.1% | $45.88(6) | $3,973,454 | 100.0% | |||||
Vacant Space(7) | 44,320 | 33.9% | ||||||||
Collateral Total | 130,925 | 100.0% | ||||||||
(1) | Annual U/W Base Rent PSF and Annual U/W Base Rent include contractual rent bumps through January 2016 totaling $108,912. |
(2) | Sales PSF and Occupancy Cost are for the trailing 12-month period ending February 28, 2015. |
(3) | Island Gourmet Markets has one, 10-year lease renewal option. |
(4) | Sansei Seafood has the right to terminate its lease in the event gross sales are less than $3,000,000 during the 12-month period ending October 2016. Current gross sales for Sansei Seafood are $3.6 million. |
(5) | Daylight Mind Cafe is currently building out its space and is not yet in occupancy or paying rent. The estimated opening date and rent commencement date is October 2015. A reserve has been taken for all gap rent and outstanding tenant improvement and leasing commission obligations. |
(6) | The Non-Major Tenants and the Occupied Collateral Total square footage includes 7,780 square feet of occupied space for which no rent was underwritten, as three of the tenants pay percentage rent in-lieu of base rent and one space is utilized as storage space. Excluding this space, the Non-Major Tenant Annual U/W Base Rent PSF and Occupied Collateral Total Annual U/W Base Rent PSF are $52.23 and $50.41, respectively. |
(7) | Vacant space includes The Studio, a 14,205 square foot (10.8% of net rentable area) space leased to a borrower-related entity through April 2021, which is currently unoccupied. See “The Property” and “Cash Flow Analysis” sections. |
The following table presents certain information relating to the historical sales and occupancy costs at the Queens’ MarketPlace Property:
Historical Sales (PSF) and Occupancy Costs(1)
Tenant Name | 2013 | 2014 | TTM 2/28/2015 | Current Occupancy Cost |
Island Gourmet Markets | $901 | $940 | $938 | 7.8% |
Total Comparable In-line | $589 | $599 | $595 | 17.0% |
(1) | Historical Sales (PSF) and Occupancy Costs were provided by the borrower. Tenants who are not required to report sales or have not reported sales for all three reporting periods have been excluded from the chart above. Current Occupancy Cost is based on sales for the trailing 12-month period ending February 2015. |
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The following table presents certain information relating to the lease rollover schedule at the Queens’ MarketPlace Property:
Lease Expiration Schedule(1)(2)
Year Ending December 31, | No. of Leases Expiring | Expiring NRSF | % of Total NRSF | Cumulative Expiring NRSF | Cumulative % of Total NRSF | Annual U/W Base Rent | Annual U/W Base Rent PSF(3) |
MTM | 3 | 2,872 | 2.2% | 2,872 | 2.2% | $39,666 | $13.81 |
2015 | 2 | 1,840 | 1.4% | 4,712 | 3.6% | $87,360 | $47.48 |
2016 | 6 | 5,965 | 4.6% | 10,677 | 8.2% | $308,329 | $51.69 |
2017 | 17 | 14,791 | 11.3% | 25,468 | 19.5% | $985,717 | $66.64 |
2018 | 9(4) | 22,523 | 17.2% | 47,991 | 36.7% | $983,596 | $43.67 |
2019 | 3 | 2,114 | 1.6% | 50,105 | 38.3% | $121,964 | $57.69 |
2020 | 1 | 1,610 | 1.2% | 51,715 | 39.5% | $73,973 | $45.95 |
2021 | 3(4) | 29,233 | 22.3% | 80,948 | 61.8% | $1,225,057 | $41.91 |
2022 | 0 | 0 | 0.0% | 80,948 | 61.8% | $0 | $0.00 |
2023 | 1(4) | 1,213 | 0.9% | 82,161 | 62.8% | $0 | $0.00 |
2024 | 1(4) | 1,365 | 1.0% | 83,526 | 63.8% | $0 | $0.00 |
2025 | 1 | 3,079 | 2.4% | 86,605 | 66.1% | $147,792 | $48.00 |
Thereafter | 0 | 0 | 0.0% | 86,605 | 66.1% | $0 | $0.00 |
Vacant(5) | 0 | 44,320 | 33.9% | 130,925 | 100.0% | $0 | $0.00 |
Total/Weighted Average | 47 | 130,925 | 100.0% | $3,973,454 | $45.88(6) |
(1) | Information obtained from the underwritten rent roll. |
(2) | Certain tenants may have lease termination options that are exercisable prior to the originally stated expiration date of the subject lease and that are not considered in the Lease Expiration Schedule. |
(3) | Annual U/W Base Rent PSF excludes vacant space. |
(4) | Includes expiring tenants who pay percentage rent in-lieu of base rent. |
(5) | Vacant space includes The Studio, the 14,205 square feet (10.8% of net rentable area) space leased to the borrower through April 2021 but currently unoccupied. See “The Property” and “Cash Flow Analysis” sections. |
(6) | The Total/Weighted Average Annual U/W Base Rent PSF includes 7,780 square feet of occupied space for which no rent was underwritten, as three of the tenants pay percentage rent in-lieu of base rent and one is storage space. Excluding this space, the Total/Weighted Average Annual U/W Base Rent PSF is $50.41. |
The following table presents historical occupancy percentages at the Queens’ MarketPlace Property:
Historical Occupancy(1)
12/31/2012(2) | 12/31/2013(2) | 12/31/2014(2) | 4/3/2015(3) |
57.2% | 62.3% | 66.9% | 66.1% |
(1) | Historical and Current Occupancy excludes The Studio (14,205 square feet; 10.8% of net rentable area) leased to a borrower-related entity through April 2021, which is currently vacant. See “The Property” and “Cash Flow Analysis” sections. |
(2) | Information obtained from the borrower. |
(3) | Information obtained from the underwritten rent roll. The Queens’ MarketPlace Property was 77.0% leased including The Studio as of April 3, 2015. |
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Operating History and Underwritten Net Cash Flow.The following table presents certain information relating to the historical operating performance and underwritten net cash flow at the Queens’ MarketPlace Property:
Cash Flow Analysis
2012(1) | 2013(1) | 2014(1) | TTM 2/28/2015 | U/W(2) | % of U/W Effective Gross Income | U/W $ per SF | ||||||||
Base Rent | $3,301,326 | $3,427,253 | $3,834,955 | $3,884,622 | $3,973,454(3) | 55.6% | $30.35 | |||||||
Grossed Up Vacant Space | 0 | 0 | 0 | 0 | 1,377,897 | 19.3 | 10.52 | |||||||
Percentage Rent | 286,415 | 423,748 | 561,947 | 544,965 | 446,841 | 6.3 | 3.41 | |||||||
Total Reimbursables | 1,944,535 | 2,211,575 | 2,534,310 | 2,573,133 | 2,696,160 | 37.7 | 20.59 | |||||||
Other Income | 294,320 | 309,318 | 266,635 | 270,728 | 28,241 | 0.4 | 0.22 | |||||||
Less Vacancy & Credit Loss | 0 | 17,150 | (232,759)(4) | (232,759)(4) | (1,377,897)(5) | (19.3) | (10.52) | |||||||
Effective Gross Income | $5,826,596 | $6,389,044 | $6,965,088 | $7,040,689 | $7,144,696 | 100.0% | $54.57 | |||||||
Total Operating Expenses | $3,617,818 | $3,771,353 | $3,798,634 | $3,884,034 | $3,841,397 | 53.8% | $29.34 | |||||||
Net Operating Income | $2,208,778 | $2,617,691 | $3,166,454 | $3,156,655 | $3,303,299 | 46.2% | $25.23 | |||||||
TI/LC | 0 | 0 | 0 | 0 | 193,519 | 2.7 | 1.48 | |||||||
Capital Expenditures | 0 | 0 | 0 | 0 | 26,185 | 0.4 | 0.20 | |||||||
Net Cash Flow | $2,208,778 | $2,617,691 | $3,166,454 | $3,156,655 | $3,083,595 | 43.2% | $23.55 | |||||||
NOI DSCR | 1.50x | 1.78x | 2.15x | 2.15x | 2.25x | |||||||||
NCF DSCR | 1.50x | 1.78x | 2.15x | 2.15x | 2.10x | |||||||||
NOI DY | 6.3% | 7.5% | 9.0% | 9.0% | 9.4% | |||||||||
NCF DY | 6.3% | 7.5% | 9.0% | 9.0% | 8.8% |
(1) | The increase in Effective Gross Income and Net Operating Income from 2012 through 2014 was due to continued new leasing activity as the Queens’ MarketPlace Property stabilized after the recession. |
(2) | The Queens’ MarketPlace Property features 14,205 square feet (10.8% of net rentable area) of space referred to as “The Studio”, which is leased to a borrower-related entity through April 2021, and base rent and reimbursements are not required to be paid and, therefore, were not underwritten. There is an executed letter of intent (“LOI”) from a theater tenant to lease most of The Studio space (9,761 square feet; 7.4% of net rentable area). Also, there is an LOI from Long’s Drugs to lease 10,400 square feet (7.9% of net rentable area). If both of these LOIs ultimately become signed leases, occupancy will increase to 81.5% and the NCF DSCR and DY will increase to 2.64x and 11.1%, respectively. |
(3) | U/W Base Rent includes contractual rent steps through January 2016 totaling $108,912. |
(4) | Historical Vacancy and Credit Loss represents bad debt expenses related to two delinquent tenants that have been marked as vacant in the underwritten net cash flow. |
(5) | The underwritten economic vacancy is 25.7%. The Queens’ MarketPlace Property was 77.0% leased and 66.1% physically occupied as of April 3, 2015. |
Appraisal. As of the appraisal valuation date of April 1, 2015, the Queens’ MarketPlace Property had an “as-is” appraised value of $55,500,000. Also, the appraiser concluded to an “as-stabilized” value of $67,400,000 as of July 1, 2017 assuming a 94.0% occupancy.
Environmental Matters.According to a Phase I environmental assessment dated April 3, 2015, there was no evidence of any recognized environmental conditions at the Queens’ MarketPlace Property.
Market Overview and Competition.The Queens’ MarketPlace Property is located in Waikoloa, Hawaii, also known as “The Big Island”, along the Kohala Coast within the Waikoloa Beach Resort. The Queens’ MarketPlace Property is located approximately 18.0 miles northwest of the Kona International Airport, the only airport on The Big Island. The Waikoloa Beach Resort is a 1,150 acre resort community with over 3,400 hotel rooms and luxury residential units, including the Hilton Waikoloa Village and the Marriott Waikoloa Beach Resort & Spa, which make up 1,796 hotel rooms combined. The Waikoloa Beach Resort generated approximately 2.1 million annual visitor days in 2014. Amenities within the resort include 36 holes of championship golf, two full-service spas, a day spa, an interactive dolphin program, ocean sports and a variety of restaurants, boutiques and galleries. In addition to the Queens’ MarketPlace Property, the Waikoloa Beach Resort features the complimentary retail center King’s Shops (located directly northwest across Waikoloa Beach Drive), which offers a collection of luxury brand stores such as Louis Vuitton, Tiffany & Co., Coach, Tommy Bahama and Michael Kors along with high-end boutique stores, fine art galleries and a Macy’s. As of the trailing 12-month period ending July 2014, 28 in-line tenants at King’s Shops reported $35.1 million in sales ($750 per square foot), resulting in a weighted average occupancy cost of 13.8%. In addition to the Waikoloa Beach Resort, the Kohala Coast is home to several luxury resorts including The Fairmont Orchid, the Four Seasons Hualalai at Historic Ka’upulehu, Mauna Kea Beach Hotel and the Mauna Lani Bay Hotel within Mauna Lani Resort. Due to the lack of available developable sites, deed restrictions, high construction costs and the rugged terrain of the volcanic islands along the Kohala Coast, there are significant barriers to entry and limited opportunities for new development in the immediate area.
The Big Island was ranked fourth on a major travel publication’s list of World’s Best/Top Islands, and was ranked eighth on another travel publication’s “Destination on the Rise” in the United States. The Big Island attracts the third most tourists of the Hawaiian Islands, with an estimated 1.5 million visitors spending approximately $1.9 billion in 2014, a 5.6% increase over spending in 2013. The number of airline seats traveling to Kona also increased by 11.7% from 2013 to 686,553. According to a third-party market research report, the Queens’ MarketPlace Property is located within the Hawaii County submarket, which covers most of The Big Island, within the Hawaii retail market. As of fourth quarter 2014, the Hawaii county submarket reported a total inventory of 15.3 million square feet (10.8% of the total state inventory) with a 3.9% vacancy rate. The Hawaii County submarket has averaged a 3.9% vacancy rate since 2007. As of fourth quarter 2014, the Hawaii County submarket had an average asking rental rate of $25.32 per square foot, triple-net, up 11.6% from the prior year. The appraiser concluded to the following market rents for select spaces at the Queens’ MarketPlace Property, all on a triple-net basis: $39.00 per square foot for the grocery anchor; $48.00 per square foot for large restaurant space; $60.00 per square foot for shop space less than 1,000 square feet and $42.00 per square foot for shop space greater than 1,000 square feet.
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The following table presents certain information relating to some comparable retail properties for the Queens’ MarketPlace Property:
Competitive Set(1)
Queens’ (Subject) | The King’s Shops | Shops at Mauna Kani | Waikoloa Highlands | Waimea Center | Parker Ranch | |
Location | Waikoloa, HI | Waikoloa, HI | Mauna Lani, HI | Waikoloa Village, HI | Kamuela, HI | Kamuela, HI |
Distance from Subject | -- | 0.3 miles | 4.1 miles | 7.1 miles | 19.8 miles | 19.6 miles |
Property Type | Community Center | Neighborhood Center | Specialty Center | Neighborhood Center | Neighborhood Center | Neighborhood Center |
Year Built/Renovated | 2007/NAP | 1991/2001 | 2005-2007/NAP | 1990/NAP | 1989/NAP | 1968/2008 |
Significant Tenants | Island Gourmet Markets, Romano’s Macaroni Grill, Sansei Seafood | Macy’s, Roys | Foodland Farms, Tommy Bahamas, Ruth’s Chris Steakhouse | Waikoloa Village Market | KTA Superstore | Foodland |
Total GLA | 130,925 SF | 75,000 SF | 77,800 SF | 73,524 SF | 73,345 SF | 150,549 SF |
Total Occupancy | 66%(2) | 99% | 94% | 75% | 100% | 85% |
(1) | Information obtained from the appraisal. |
(2) | The Queens’ MarketPlace Property was 66.1% occupied (and 77.0% leased including The Studio) as of April 3, 2015. |
The Borrower.The borrower is Queens’ Market, LLC a Nevada limited liability company which is a single purpose entity with one independent director. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Queens’ MarketPlace Mortgage Loan. Waikoloa Development Co. and Seligman & Associates, Inc. are the guarantors of certain nonrecourse carveouts under the Queens’ MarketPlace Mortgage Loan.
The Sponsors.The sponsors are Waikoloa Development Co. and Seligman & Associates, Inc. Waikoloa Development Co. is the successor a partnership between Transcontinental Corporation of Santa Barbara and the Bass family, the original master developers of Waikoloa (including the Waikoloa Beach Resort). The four Bass brothers - Sid, Edward, Robert and Lee - control the family’s investments and Robert started an investment company called Oak Hill in the early 1990s, which now has more than $35.0 billion in assets under management. Transcontinental Corporation is a privately held company headquartered in Santa Barbara, California. Some of its better known projects include Lake Las Vegas, a 3,600-acre resort near Las Vegas, Nevada; McCormick Ranch, a 3,100-acre master-planned community in Scottsdale, Arizona; Lake Arrowhead, a large project near Los Angeles; and Las Campanas, a 4,700-acre community in Santa Fe, New Mexico. The Bass brothers and Transcontinental Corporation disclosed one prior bankruptcy, one loan default and one lawsuit with a prior lender. See “Description of the Mortgage Pool – Default History, Bankruptcy Issues and Other Proceedings” in the Free Writing Prospectus.
Scott Seligman is the chairman and chief executive officer of Seligman & Associates, Inc (“Seligman & Associates”), a real estate owner and operator of commercial and residential properties throughout the western United States, with a primary focus in Hawaii, Michigan, California, Nevada, Texas and Arizona. Currently, Seligman & Associates owns (directly or indirectly) 1.0 million square feet of retail, 2.0 million square feet of office and 817 multifamily units. Seligman & Associates also owns the adjacent King’s Shops and Queen Ka’ahumanu Center in Kahului on Maui, among other retail properties. Seligman & Associates and Scott Seligman disclosed two prior deed-in-lieu foreclosures, two prior loan modifications and one prior bankruptcy (over 30 years ago). See “Description of the Mortgage Pool – Default History, Bankruptcy Issues and Other Proceedings” in the Free Writing Prospectus.
Escrows.The loan documents provide for upfront reserves of $144,205 for taxes, $164,280 for rent concessions for Daylight Mind Cafe and $688,807 for outstanding tenant improvements and leasing commissions (“TI/LCs”) ($533,947 for Daylight Mind Cafe and $154,860 for Quiksilver). Ongoing monthly reserves are required in an amount equal to $28,841 for taxes (during any period in which the net cash flow debt yield is less than 9.0%), $1,637 for replacement reserves and $9,275 for general TI/LCs (subject to a cap of $334,000, with the following variations: (i) if the amortizing debt service coverage ratio (based on a hypothetical 30-year amortizing schedule) is between 1.20x and 1.75x, the monthly TI/LC deposit will increase to $16,365, provided that the amount then on deposit in the TI/LC reserve is less than a cap of $1.2 million and (ii) if the amortizing debt service coverage ratio is less than 1.20x, the monthly TI/LC deposit will be $16,365 with no cap). The loan documents do not require monthly escrows for insurance provided that (i) no event of default has occurred and is continuing; (ii) the Queens’ MarketPlace Property is insured via an acceptable blanket insurance policy; (iii) the borrower provides the lender with evidence of renewal of the insurance policies and timely proof of payment of the insurance premiums when due; and (iv) the net cash flow debt yield is greater than 9.0%.
Lockbox and Cash Management.Upon the occurrence of a Deposit Account Event Period (as defined below), the borrower will be required to establish a lender-controlled lockbox account and cause all rents to be deposited directly into such lockbox account. During a Deposit Account Event Period, and prior to a Cash Trap Event Period (as defined below), funds on deposit in the lockbox account are distributed to the borrower. During a Cash Trap Event Period, all excess funds on deposit in the lockbox account are swept to a lender-controlled subaccount on a monthly basis.
A “Deposit Account Event Period” will commence upon the earlier of (i) the occurrence and continuance of an event of default or (ii) the amortizing debt service coverage ratio falling below 1.15x at the end of any calendar month. A Deposit Account Event Period will expire with regard to clause (i), upon the cure of such event of default. There is no cure for a Deposit Account Event Period arising under clause (ii) above.
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A “Cash Trap Event Period” will commence upon the earlier of (i) the occurrence and continuance of an event of default or (ii) the amortizing debt service coverage ratio falling below 1.10x. A Cash Trap Event Period will expire with regard to clause (i), upon the cure of such event of default; and with regard to clause (ii), upon the date that the amortizing debt service coverage ratio is equal to or greater than 1.15x for two consecutive calendar quarters.
Property Management. The Queens’ MarketPlace Property is managed by an affiliate of the borrower.
Assumption.The borrower has a two-time right to transfer the Queens’ MarketPlace Property, provided that no event of default has occurred and is continuing and certain other conditions are satisfied, including, but not limited to the following: (i) the lender’s reasonable determination that the proposed transferee and guarantor satisfy the lender’s credit review and underwriting standards, taking into consideration such transferee’s experience, financial strength and general business standing; (ii) execution of a recourse guaranty and an environmental indemnity by an affiliate of the transferee; and (iii) if requested by the lender, rating agency confirmation from Fitch, KBRA and Moody’s that the transfer will not result in a downgrade, withdrawal or qualification of the respective ratings assigned to the Series 2015-C29 Certificates.
Partial Release.Not permitted.
Free Release.The borrower is permitted to obtain the release of the parcel improved with the Waikoloa Bowl from the lien of the mortgage, subject to the satisfaction of certain conditions contained in the loan agreement, including but not limited to (i) evidence that the release parcel has been legally subdivided and that the remaining Queens’ MarketPlace Property will constitute one or more separate legal tax lot(s); (ii) evidence that the remaining Queens’ MarketPlace Property will be in compliance with all applicable legal and zoning requirements; and (iii) the loan to value ratio for the remaining Queens’ MarketPlace is in compliance with all REMIC requirements. No value was attributed to this parcel in the appraisal.
Real Estate Substitution.Not permitted.
Subordinate and Mezzanine Indebtedness.Provided no event of default has occurred and is continuing, a direct or indirect owner of the borrower has the right to incur mezzanine financing subject to the satisfaction of certain conditions, including but not limited to (i) the execution of an intercreditor agreement in form and substance acceptable to the lender and each of Fitch, KBRA and Moody’s; (ii) the combined loan-to-value ratio is not greater than 75.0%; (iii) the combined net cash flow debt yield is not less than 7.5%; (iv) the borrower will establish a hard lockbox and direct all tenants to make rental payments directly into the lockbox account and (v) the lender receives rating agency confirmation from Fitch, KBRA and Moody’s that the mezzanine financing will not result in a downgrade, withdrawal or qualification of the respective ratings assigned to the Series 2015-C29 Certificates.
Ground Lease.None.
Terrorism Insurance.The loan documents require that the “all risk” insurance policy required to be maintained by the borrower provide coverage for terrorism in an amount equal to the full replacement cost of the Queens’ MarketPlace 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 six-month extended period of indemnity.
Earthquake Insurance.A seismic report dated April 4, 2015 determined that the probable maximum loss at the Queens’ MarketPlace Property was 6.0%. Earthquake insurance is not required.
Windstorm Insurance. The loan documents require windstorm insurance covering the full replacement cost of the Queens’ MarketPlace Property during the loan term. At the time of loan closing, the Queens’ MarketPlace Property had insurance coverage for windstorm.
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EL SOL BRILLANTE AND LAGUNA DEL SOL APARTMENTS |
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EL SOL BRILLANTE AND LAGUNA DEL SOL APARTMENTS |
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No. 6 – El Sol Brillante and Laguna Del Sol Apartments | ||||||||
Loan Information | Property Information | |||||||
Mortgage Loan Seller: | Rialto Mortgage Finance, LLC | Single Asset/Portfolio: | Portfolio | |||||
Credit Assessment (Fitch/KBRA/Moody’s): | NR/NR/NR | Property Type: | Multifamily | |||||
Original Principal Balance: | $28,750,000 | Specific Property Type: | Garden | |||||
Cut-off Date Principal Balance: | $28,750,000 | Location: | Houston, TX | |||||
% of Initial Pool Balance: | 2.4% | Size: | 792 Units | |||||
Loan Purpose: | Acquisition | Cut-off Date Principal Balance Per Unit: | $36,301 | |||||
Borrower Names(1): | Various | Year Built/Renovated: | Various – See Table | |||||
Sponsor: | Arun Verma | Title Vesting: | Fee | |||||
Mortgage Rate: | 4.300% | Property Manager: | Self-managed | |||||
Note Date: | April 30, 2015 | 3rdMost Recent Occupancy (As of)(4): | 46.9% (12/31/2012) | |||||
Anticipated Repayment Date: | NAP | 2ndMost Recent Occupancy (As of)(4): | 68.5% (12/31/2013) | |||||
Maturity Date: | May 6, 2025 | Most Recent Occupancy (As of)(4): | 88.2% (12/31/2014) | |||||
IO Period: | 60 months | Current Occupancy (As of)(5): | 93.7% Various | |||||
Loan Term (Original): | 120 months | |||||||
Seasoning: | 1 month | Underwriting and Financial Information: | ||||||
Amortization Term (Original): | 360 months | |||||||
Loan Amortization Type: | Interest-only, Amortizing Balloon | 3rd Most Recent NOI (As of)(6): | $961,437 (12/31/2013) | |||||
Interest Accrual Method: | Actual/360 | 2nd Most Recent NOI (As of)(6): | $2,818,454 (12/31/2014) | |||||
Call Protection: | L(24), GRTR 1% or YM(92), O(4) | Most Recent NOI (As of): | $3,243,404 (TTM 3/31/2015) | |||||
Lockbox Type: | Springing (Without Established Account) | |||||||
Additional Debt(2): | Yes | U/W Revenues: | $6,319,448 | |||||
Additional Debt Type(2): | Future Mezzanine | U/W Expenses: | $3,240,610 | |||||
U/W NOI: | $3,078,838 | |||||||
U/W NCF: | $2,868,574 | |||||||
Escrows and Reserves(3): | U/W NOI DSCR: | 1.80x | ||||||
U/W NCF DSCR: | 1.68x | |||||||
Type: | Initial | Monthly | Cap (If Any) | U/W NOI Debt Yield: | 10.7% | |||
Taxes | $142,305 | $27,106 | NAP | U/W NCF Debt Yield: | 10.0% | |||
Insurance | $83,405 | $26,478 | NAP | As-Is Appraised Value: | $39,310,000 | |||
Replacement Reserves | $0 | $17,522 | NAP | As-Is Appraisal Valuation Date: | April 7, 2015 | |||
Deferred Maintenance | $34,300 | $0 | NAP | Cut-off Date LTV Ratio: | 73.1% | |||
Existing Casualty Reserve | $854,695 | $0 | NAP | LTV Ratio at Maturity or ARD: | 66.7% | |||
(1) | See “Borrowers” section. |
(2) | See “Subordinate and Mezzanine Indebtedness” section. |
(3) | See “Escrows” section. |
(4) | See “Historical Occupancy” section. |
(5) | The Current Occupancy for the El Sol Brillante Property is as of April 23, 2015 and for the Laguna Del Sol Property is as of April 22, 2015. |
(6) | See “Cash Flow Analysis” section. |
The Mortgage Loan. The mortgage loan (the “El Sol Brillante and Laguna Del Sol Apartments Mortgage Loan”) is evidenced by a single promissory note that is secured by a first mortgage encumbering two garden-style multifamily properties located in Houston, Texas (the “El Sol Brillante and Laguna Del Sol Apartments Properties”). The El Sol Brillante and Laguna Del Sol Apartments Mortgage Loan was originated on April 30, 2015 by Rialto Mortgage Finance, LLC. The El Sol Brillante and Laguna Del Sol Apartments Mortgage Loan had an original principal balance of $28,750,000, has an outstanding principal balance as of the Cut-off Date of $28,750,000 and accrues interest at an interest rate of 4.300%per annum. The El Sol Brillante and Laguna Del Sol Apartments Mortgage Loan had an initial term of 120 months, has a remaining term of 119 months as of the Cut-off Date and requires interest-only payments for the first 60 payments following origination and, thereafter, requires payments of principal and interest based on a 30-year amortization schedule. The El Sol Brillante and Laguna Del Sol Apartments Mortgage Loan matures on May 6, 2025.
Following the lockout period, the borrowers have the right to prepay the El Sol Brillante and Laguna Del Sol Apartments Mortgage Loan in whole, but not in part, provided that the borrowers pay the greater of a yield maintenance premium or a prepayment premium equal to 1.0% of the principal amount being prepaid, on any date prior to February 6, 2025. In addition, the El Sol Brillante and Laguna Del Sol Apartments Mortgage Loan is prepayable without penalty on or after February 6, 2025.
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EL SOL BRILLANTE AND LAGUNA DEL SOL APARTMENTS |
Sources and Uses
Sources | Uses | |||||||
Original loan amount | $28,750,000 | 75.3% | Purchase price | $36,800,000 | 96.4% | |||
Sponsor's new cash contribution | $9,435,524 | 24.7 | Reserves | 1,114,705 | 2.9 | |||
Closing costs | 270,819 | 0.7 | ||||||
Total Sources | $38,185,524 | 100.0% | Total Uses | $38,185,524 | 100.0% |
The Property.The El Sol Brillante and Laguna Del Sol Apartments Properties consist of two garden-style multifamily properties (the “El Sol Brillante Property” and the “Laguna Del Sol Property”, respectively) totaling 792 units and situated on approximately 23.0 acres in Houston, Texas. The El Sol Brillante and Laguna Del Sol Apartments Properties are located adjacent to one another along Sierra Blanca Drive in Houston, Texas, approximately 20.1 miles west of the Houston central business district. As of April 2015, the El Sol Brillante and Laguna Del Sol Apartments Properties were 93.7% occupied.
The following table presents certain information relating to the El Sol Brillante and Laguna Del Sol Apartments Properties:
Property Name | Allocated Cut- off Date Principal Balance | % of Portfolio Cut-off Date Principal Balance | Occupancy | Year Built/ Renovated | Units | Appraised Value | Allocated LTV | |||||||
Laguna Del Sol Apartments | $14,868,672 | 51.7% | 91.8% | 1983/2015 | 400 | $20,330,000 | 73.1% | |||||||
El Sol Brillante Apartments | $13,881,328 | 48.3% | 95.7% | 1981/2015 | 392 | $18,980,000 | 73.1% | |||||||
Total / Weighted Average | $28,750,000 | 100.0% | 93.7% | 792 | $39,310,000 | 73.1% |
Laguna Del Sol Apartments
The Laguna Del Sol Property is a 400-unit, garden-style apartment complex consisting of 35, two and three-story residential buildings. The improvements were constructed in 1983, renovated in 2015, and are situated on 11.5 acres. The Laguna Del Sol Property amenities include two outdoor swimming pools, a picnic area, a playground, a dog-park, and two laundry facilities. Unit amenities include electric ranges/ovens with vent-hood, garbage disposal, dishwasher, formica countertops, and vinyl tile flooring in the kitchen. All units include washer/dryer connections and a private patio or balcony area with an exterior storage room. The Laguna Del Sol Property has 627 surface parking spaces, reflecting a parking ratio of 1.6 spaces per unit. As of April 22, 2015, the Laguna Del Sol Property was 91.8% occupied.
El Sol Brillante Apartments
The El Sol Brillante Property is a 392-unit, garden-style apartment complex consisting of 33, two- and three-story residential buildings. The improvements were constructed in 1981, renovated in 2015, and are situated on 11.5 acres. The El Sol Brillante Property amenities include three outdoor swimming pools, a picnic area, a playground, a dog-park, and three laundry facilities. Unit amenities include electric ranges/ovens with vent-hood, garbage disposal, dishwasher, formica countertops, and vinyl tile flooring in the kitchen. All units include washer/dryer connections and a private patio or balcony area with an exterior storage room. The El Sol Brillante Property has 627 surface parking spaces, reflecting a parking ratio of 1.6 spaces per unit. As of April 23, 2015, the El Sol Brillante Property was 95.7% occupied.
The following table presents certain information relating to the unit mix of the El Sol Brillante and Laguna Del Sol Apartments Properties:
Apartment Unit Summary(1)
Unit Type | No. of Units | % of Total Units | Average Unit Size (SF) | Average UW Monthly Rent per Unit | ||||
1 Bedroom/1 Bath (El Sol Brilliante) | 244 | 30.8% | 657 | $640 | ||||
2 Bedroom/1.5 Bath (El Sol Brillante) | 60 | 7.6% | 850 | $820 | ||||
2 Bedroom/2 Bath (El Sol Brillante) | 88 | 11.1% | 910 | $852 | ||||
1 Bedroom/1 Bath (Laguna Del Sol) | 184 | 23.2% | 643 | $629 | ||||
2 Bedroom/2 Bath (Laguna Del Sol) | 192 | 24.2% | 881 | $831 | ||||
3 Bedroom/2 Bath (Laguna Del Sol) | 24 | 3.0% | 1,133 | $1,093 | ||||
Total/Weighted Average | 792 | 100.0% | 765 | $735 |
(1) | Information obtained from the underwritten rent roll. |
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EL SOL BRILLANTE AND LAGUNA DEL SOL APARTMENTS |
The following table presents historical occupancy percentages at the El Sol Brillante and Laguna Del Sol Apartments Properties:
Historical Occupancy
12/31/2012(1)(2) | 12/31/2013(1)(2) | 12/31/2014(1)(2) | Various(3) |
46.9% | 68.5% | 88.2% | 93.7% |
(1) | Information obtained from the borrowers. |
(2) | The El Sol Brillante and Laguna Del Sol Apartments Properties were purchased out of foreclosure by the prior owners in 2011. At the time, the properties had significant deferred maintenance issues with approximately 126 down units and occupancy was below 50.0%. According to the borrowers, the prior owners spent approximately $9.5 million between July 2011 and March 2015 to renovate the properties and bring all down units back online. |
(3) | Information obtained from the underwritten rent roll. The Current Occupancy for the El Sol Brillante Property is as of April 23, 2015 and for the Laguna Del Sol Property is as of April 22, 2015. |
Operating History and Underwritten Net Cash Flow.The following table presents certain information relating to the historical operating performance and underwritten net cash flow at the El Sol Brillante and Laguna Del Sol Apartments Properties:
Cash Flow Analysis
2013(1) | 2014(1) | TTM 3/31/2015(1) | U/W | % of U/W Effective Gross Income | U/W $ per Unit | ||||||||||||||
Base Rent | $4,981,322 | $5,856,376 | $6,237,225 | $6,528,372 | 103.3 | % | $8,243 | ||||||||||||
Grossed Up Vacant Space | 0 | 0 | 0 | 483,048 | 7.6 | 610 | |||||||||||||
Concessions | (266,274 | ) | (161,441 | ) | (163,297 | ) | (183,762 | ) | (2.9 | ) | (232 | ) | |||||||
Other Income | 384,178 | 567,614 | 589,833 | 590,000 | 9.3 | 745 | |||||||||||||
Less Vacancy & Credit Loss | (1,191,960 | ) | (647,668 | ) | (682,846 | ) | (1,098,210 | )(2) | (17.4 | ) | (1,387 | ) | |||||||
Effective Gross Income | $3,907,266 | $5,614,881 | $5,980,915 | $6,319,449 | 100.0 | % | $7,979 | ||||||||||||
Total Operating Expenses | $2,945,829 | $2,796,427 | $2,737,511 | $3,240,610 | 51.3 | % | $4,092 | ||||||||||||
Net Operating Income | $961,437 | $2,818,454 | $3,243,404 | $3,078,838 | 48.7 | % | $3,887 | ||||||||||||
Capital Expenditures | 0 | 0 | 0 | 210,264 | 3.3 | 265 | |||||||||||||
Net Cash Flow | $961,437 | $2,818,454 | $3,243,404 | $2,868,574 | 45.4 | % | $3,622 | ||||||||||||
NOI DSCR | 0.56x | 1.65x | 1.90x | 1.80x | |||||||||||||||
NCF DSCR | 0.56x | 1.65x | 1.90x | 1.68x | |||||||||||||||
NOI DY | 3.3% | 9.8% | 11.3% | 10.7% | |||||||||||||||
NCF DY | 3.3% | 9.8% | 11.3% | 10.0% |
(1) | The El Sol Brillante and Laguna Del Sol Apartments Properties were purchased out of foreclosure by the prior owners in 2011. At the time, the properties had significant deferred maintenance issues with approximately 126 down units and occupancy was below 50.0%. According to the borrowers, the prior owners spent approximately $9.5 million between July 2011 and March 2015 to renovate the properties and bring all down units back online. |
(2) | The underwritten economic vacancy is 18.3%. The El Sol Brillante and Laguna Del Sol Apartments Properties were 93.7% occupied as of April 2015. |
Appraisal.As of the appraisal valuation date of April 7, 2015, the El Sol Brillante and Laguna Del Sol Apartments Properties had an aggregate “as-is” appraised value of $39,310,000.
Environmental Matters.According to a Phase I environmental assessment dated April 20, 2015, there was no evidence of any recognized environmental conditions at the El Sol Brillante and Laguna Del Sol Apartments Properties.
Market Overview and Competition.The El Sol Brillante and Laguna Del Sol Apartments Properties are located in Houston, Texas, approximately 20.1 miles west of the Houston central business district. Access is available from all parts of the Houston metropolitan area via the Sam Houston Tollway, the Katy Freeway, and the Westpark Tollway (located immediately north of the El Sol Brillante and Laguna Del Sol Apartments Properties). Westheimer Road, the primary local thoroughfare, is located north of Westpark Tollway, and essentially runs parallel to the Westpark Tollway, and the terminus is approximately 3.7 miles west of the El Sol Brillante and Laguna Del Sol Apartments Properties. There is a significant amount of retail development at the intersection of State Highway 6 and Bellaire Blvd, approximately half a mile southwest of the El Sol Brillante and Laguna Del Sol Apartments Properties, including H-E-B and Fiesta Mart supermarkets, Walgreens, NTB Tires & Battery, Chick-fil-A, Dollar General, and Family Dollar. Additionally, there is a Walmart Supercenter and a Home Depot approximately 1.5 miles north of the El Sol Brilliante-Laguna Del Sol Apartments Properties along State Highway 6. The West Houston Medical Center is located approximately 4.6 miles northeast of the El Sol Brillante and Laguna Del Sol Apartments Properties. The West Houston Medical Center has been providing healthcare to the West Houston community for 30 years, and the hospital recently added 95,000 square feet. George Bush Park is located approximately 5.8 miles northwest of the El Sol Brillante and Laguna Del Sol Apartments Properties. The George Bush Park is a 7,800-acre green space which includes recreational facilities such as a baseball field, dog-park, fishing areas, hiking and biking trail, picnic/barbecue areas, children’s playground, water features, soccer field, and wetland habitat. The 2015 estimated population within the one-, three- and five-mile radii of the El Sol Brillante and Laguna Del Sol Apartments Properties is 11,823, 171,381 and 380,922, respectively, and the estimated 2015 average household income within the same radii is $58,788, $67,388, and $73,692, respectively.
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EL SOL BRILLANTE AND LAGUNA DEL SOL APARTMENTS |
According to a third party market research report the El Sol Brillante and Laguna Del Sol Apartments Properties are located in the Houston multifamily market and the Alief submarket. As of April 2015, the Houston multifamily market contained 594,243 units, with an 8.9% vacancy rate, and average monthly asking rent of $1.07 per square foot. As of April 2015, the Alief submarket contained 27,276 units, with a 6.2% vacancy rate, and average monthly asking rent of $0.92 per square foot.
The following table presents certain information relating to some comparable multifamily properties for the El Sol Brillante and Laguna Del Sol Apartments Properties:
Competitive Set(1)
El Sol Brillante and Laguna Del Sol Apartments Properties (Subject) | Woodbridge Crossing | Cape Colony | Hawthorne | Fox Pointe | El Sol Del Rio | Windchase Hamlet | |
Location | Houston, TX | Houston, TX | Houston, TX | Houston, TX | Houston, TX | Houston, TX | Houston, TX |
Distance to Subject | NAP | 1.1 miles | 2.1 miles | 1.9 miles | 1.4 miles | 0.1 miles | 2.8 miles |
Property Type | Garden | Garden | Garden | Garden | Garden | Garden | Garden |
Number of Units | 792 | 384 | 132 | 312 | 488 | 424 | 200 |
Average Rent (per unit) | |||||||
1BR | $629-$640 | $590-$680 | $830-$990 | $745 | $625-$750 | $560-$750 | $659-$799 |
2BR | $820-$852 | $830-$870 | $1,010-$1,109 | $775-$900 | $885 | $810-$1,050 | $829-$1,020 |
3BR | $1,093 | $999-$1,099 | NAP | $935 | NAP | NAP | NAP |
Total Occupancy | 94% | 91% | 97% | 97% | 97% | 96% | 97% |
(1) | Information obtained from the appraisal and underwritten rent roll. |
The Borrowers.The borrowers - Rama Elite, LLC, Rama North, LLC, and Rama York, LLC, each a Delaware limited liability company - are tenant-in-common borrowers with each individual entity structured as a single purpose entity with one independent director. Arun Verma is the guarantor of certain nonrecourse carveouts under the El Sol Brillante and Laguna Del Sol Apartments Mortgage Loan.
The Sponsor.The sponsor, Arun Verma, serves as the manager of the borrowers and has 28 years of real estate acquisition, development, rehabilitation and management experience. Mr. Verma was the founder, chairman and CEO of BVM Real Estate, Inc. for six years and chairman and CEO of BVM Group for 23 years. According to Mr. Verma’s real estate investment schedule, he maintains partnership equity interests of approximately $209.8 million in 12 multifamily projects and approximately 192,500 square feet of office space.
Escrows.The loan documents provide for upfront escrows in the amount of$142,305 for real estate taxes, $83,405 for insurance and $34,300 for deferred maintenance. The loan documents also provide for ongoing monthly reserves in the amount of $27,106 for real estate taxes, $26,478 for insurance, and $17,522 for replacement reserves. Additionally, in February 2015, building 58 (8 units) of the Laguna Del Sol Property had extensive fire damage. CENA Builders provided an estimate of $683,756 for the cost of the building reconstruction, which includes cost of labor, materials, equipment, supervision, insurance, permits and taxes. $854,695 (125% of the estimated cost) was escrowed up front to complete the reconstruction of the 8 units.
Lockbox and Cash Management.Upon the occurrence and continuance of a Cash Management Trigger Event (as defined below) the borrowers are required to establish a lender-controlled lockbox account. The loan documents also require that all revenues received by the borrowers or the property manager, after a Cash Management Trigger Event, be deposited into the lockbox account within one business day of receipt. Other than during a Cash Sweep Event (as defined below), all excess funds on deposit are disbursed to the borrowers.
A “Cash Management Trigger Event” will commence upon the occurrence of (i) an event of default under the loan documents; or (ii) any bankruptcy action of any of the borrowers, the guarantor or the manager. A Cash Management Trigger Event will end with respect to clause (i), when such event of default has been cured, and with respect to clause (ii), when such bankruptcy petition has been discharged, stayed, or dismissed, among other conditions. With regards to a bankruptcy of the property manager, clause (ii) may also be cured by the borrowers replacing the manager with a qualified manager acceptable to the lender.
A “Cash Sweep Event” will commence upon the occurrence of (i) an event of default under the loan documents; or (ii) any bankruptcy action of any of the borrowers, the guarantor, or the manager. A Cash Sweep Event will end with respect to clause (i), when such event of default has been cured, and with respect to clause (ii), when such bankruptcy petition has been discharged, stayed, or dismissed, among other conditions. With regards to a bankruptcy of the property manager, clause (ii) may also be cured by the borrowers replacing the manager with a qualified manager acceptable to the lender.
Property Management.The El Sol Brillante and Laguna Del Sol Apartments Properties are managed by an affiliate of the borrowers.
Assumption.The borrowers have the right to transfer the El Sol Brillante and Laguna Del Sol Apartments Properties 12 months after the origination date, provided that no event of default has occurred and is continuing and certain other conditions are satisfied, including, but not limited to, (i) the lender’s reasonable determination that the proposed transferee and guarantor satisfy the lender’s credit review and underwriting standards, taking into consideration transferee’s experience, financial strength and general business standing; (ii) execution of a recourse guaranty and an environmental indemnity by an affiliate of the transferee; and (iii) if requested by the lender, rating agency confirmation from Fitch, KBRA and Moody’s that the transfer will not result in a downgrade, withdrawal or qualification of the respective ratings assigned to the Series 2015-C29 Certificates.
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Partial Release.Not permitted.
Real Estate Substitution.Not permitted.
Ground Lease.None
Subordinate and Mezzanine Indebtedness.Provided no event of default has occurred and is continuing, the borrowers have the right to incur mezzanine financing subject to the satisfaction of certain conditions, including but not limited to (i) the execution of an intercreditor agreement in form and substance acceptable to the lender and each of Fitch, KBRA and Moody’s; (ii) the combined loan-to-value is not greater than 73.5%; (iii) the combined amortizing debt service coverage ratio is not less than 1.30x (using a 30-year amortization schedule); and (iv) the lender receives rating agency confirmation from Fitch, KBRA and Moody’s that the mezzanine financing will not result in a downgrade, withdrawal or qualification of the respective ratings assigned to the Series 2015-C29 Certificates.
Terrorism Insurance.The loan documents require that the “all risk” insurance policy required to be maintained by the borrowers provides coverage for terrorism in an amount equal to the full replacement cost of the El Sol Brillante and Laguna Del Sol Apartments Properties, as well as business interruption insurance covering no less than the 12-month period following the occurrence of a casualty event, together with a 12-month extended period of indemnity.
Windstorm Insurance.The loan documents require windstorm insurance covering the full replacement cost of the El Sol Brillante and Laguna Del Sol Apartments Properties during the loan term. At the time of loan closing, the El Sol Brillante and Laguna Del Sol Apartments Properties had insurance coverage for windstorm.
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COUNTRY CLUB CENTER |
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COUNTRY CLUB CENTER |
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No. 7 – Country Club Center |
Loan Information | Property Information | ||||||
Mortgage Loan Seller: | Wells Fargo Bank, National Association | Single Asset/Portfolio: | Single Asset | ||||
Credit Assessment (Fitch/KBRA/Moody’s): | NR/NR/NR | Property Type: | Office | ||||
Original Principal Balance: | $27,000,000 | Specific Property Type: | Suburban | ||||
Cut-off Date Principal Balance: | $27,000,000 | Location: | Aventura, FL | ||||
% of Initial Pool Balance: | 2.3% | Size: | 64,971 SF | ||||
Loan Purpose: | Refinance | Cut-off Date Principal Balance Per SF: | $415.57 | ||||
Borrower Name: | Cabi Turnberry Aventura Offices, LP | Year Built/Renovated: | 2004/2006 | ||||
Sponsor: | Jeffrey Soffer; Jacquelyn Soffer | Title Vesting: | Fee | ||||
Mortgage Rate: | 4.390% | Property Manager: | Self-managed | ||||
Note Date: | June 1, 2015 | 3rd Most Recent Occupancy (As of): | 100.0% (12/31/2012) | ||||
Anticipated Repayment Date: | NAP | 2nd Most Recent Occupancy (As of): | 100.0% (12/31/2013) | ||||
Maturity Date: | June 11, 2025 | Most Recent Occupancy (As of): | 100.0% (12/31/2014) | ||||
IO Period: | 0 months | Current Occupancy (As of): | 100.0% (2/1/2015) | ||||
Loan Term (Original): | 120 months | ||||||
Seasoning: | 0 months | Underwriting and Financial Information: | |||||
Amortization Term (Original): | 360 months | ||||||
Loan Amortization Type: | Amortizing Balloon | 3rd Most Recent NOI (As of): | $1,964,026 (12/31/2012) | ||||
Interest Accrual Method: | Actual/360 | 2nd Most Recent NOI (As of): | $1,801,286 (12/31/2013) | ||||
Call Protection: | L(24),D(92),O(4) | Most Recent NOI (As of): | $1,819,446 (12/31/2014) | ||||
Lockbox Type: | Soft/Springing Cash Management | ||||||
Additional Debt: | None | ||||||
Additional Debt Type: | NAP | ||||||
U/W Revenues(2): | $3,186,714 | ||||||
U/W Expenses: | $1,100,060 | ||||||
U/W NOI: | $2,086,654 | ||||||
Escrows and Reserves(1): | U/W NCF: | $2,015,376 | |||||
U/W NOI DSCR: | 1.29x | ||||||
Type: | Initial | Monthly | Cap (If Any) | U/W NCF DSCR: | 1.24x | ||
Taxes | $205,376 | $25,672 | NAP | U/W NOI Debt Yield: | 7.7% | ||
Insurance | $0 | Springing | NAP | U/W NCF Debt Yield: | 7.5% | ||
Replacement Reserves | $0 | Springing | NAP | As-Is Appraised Value: | $36,000,000 | ||
TI/LC Reserve | $0 | $0 | NAP | As-Is Appraisal Valuation Date: | March 23, 2015 | ||
Major Tenant Reserve | $0 | Springing | NAP | Cut-off Date LTV Ratio: | 75.0% | ||
Non-Renewing Tenant Reserve | $0 | Springing | NAP | LTV Ratio at Maturity or ARD: | 60.4% | ||
(1) | See “Escrows” section. |
(2) | See “Cash Flow Analysis” section. |
The Mortgage Loan.The mortgage loan (the “Country Club Center Mortgage Loan”) is evidenced by a single promissory note that is secured by a first mortgage encumbering an office building located in Aventura, Florida (the “Country Club Center Property”). The Country Club Center Mortgage Loan was originated on June 1, 2015 by Wells Fargo Bank, National Association. The Country Club Center Mortgage Loan had an original principal balance of $27,000,000, has an outstanding principal balance as of the Cut-off Date of $27,000,000 and accrues interest at an interest rate of 4.390%per annum. The Country Club Center Mortgage Loan had an initial term of 120 months, has a remaining term of 120 months as of the Cut-off Date and requires payments of principal and interest based on a 30-year amortization schedule. The Country Club Center Mortgage Loan matures on June 11, 2025.
Following the lockout period, the borrower has the right to defease the Country Club Center in whole, but not in part, on any date before March 11, 2025. In addition, the Country Club Center Mortgage Loan is prepayable without penalty on or after March 11, 2025.
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Sources and Uses
Sources | Uses | |||||||||
Original loan amount | $27,000,000 | 100.0 | % | Loan payoff(1) | $16,726,150 | 61.9 | % | |||
Reserves | 205,376 | 0.8 | ||||||||
Closings costs | 186,215 | 0.7 | ||||||||
Return of equity | 9,882,259 | 36.6 | ||||||||
Total Sources | $27,000,000 | 100.0 | % | Total Uses | $27,000,000 | 100.0 | % |
(1) | The Country Club Center Property was previously securitized in the WBCMT 2005-C22 transaction. |
The Property.The Country Club Center Property is a 10-story, class A office building totaling 64,971 square feet located in Aventura, Florida, approximately 18.1 miles northeast of the Miami central business district. Built in 2004 and renovated in 2006, the Country Club Center Property is comprised of a parking garage on floors one through six and office space located on floors seven through ten. Upper floors feature small balconies and large glass windows allowing city views to the west and views of the Turnberry Golf Club and the Atlantic Ocean to the east. The Country Club Center Property is located less than one mile from the Turnberry Isle Miami Spa & Fitness Center, Residence Inn Miami Aventura Mall and the 2.7 million square foot Aventura Mall that has approximately 30.0 million visitors each year, per the appraisal. Parking for the Country Club Center Property is provided by a six-level parking structure that contains 216 garage spaces, equating to a parking ratio of 3.3 spaces per 1,000 square feet of rentable area. As of February 1, 2015, the Country Club Center Property was 100.0% occupied by 12 tenants.
The following table presents certain information relating to the tenancy at the Country Club Center Property:
Major Tenants
Tenant Name | Credit Rating (Fitch/Moody’s/ S&P)(1) | Tenant NRSF | % of NRSF | Annual U/W Base Rent PSF(2) | Annual U/W Base Rent(2) | % of Total Annual U/W Base Rent | Lease Expiration Date | |||||||
Major Tenants | ||||||||||||||
Cabi Developers(3)(4) | NR/NR/NR | 14,535 | 22.4% | $37.50 | $545,063 | 25.2% | 2/28/2030 | |||||||
Turnberry Residential(3)(5) | NR/NR/NR | 12,957 | 19.9% | $37.50 | $485,888 | 22.5% | 2/28/2030 | |||||||
Wells Fargo Advisors | AA-/A2/A+ | 15,460 | 23.8% | $30.44(6) | $470,631(6) | 21.7% | 11/30/2018 | |||||||
Trafalgar Capital Advisors | NR/NR/NR | 5,065 | 7.8% | $34.00 | $172,210 | 8.0% | 1/31/2017 | |||||||
Trade Street Residential | NR/NR/NR | 5,845 | 9.0% | $25.48 | $148,931 | 6.9% | 7/31/2016(7) | |||||||
Total Major Tenants | 53,862 | 82.9% | $33.84 | $1,822,722 | 84.2% | |||||||||
Non-Major Tenants(8) | 11,109 | 17.1% | $30.70 | $341,101 | 15.8% | |||||||||
Occupied Collateral Total | 64,971 | 100.0% | $33.30 | $2,163,823 | 100.0% | |||||||||
Vacant Space | 0 | 0.0% | ||||||||||||
Collateral Total | 64,971 | 100.0% | ||||||||||||
(1) | Certain ratings are those of the parent company whether or not the parent company guarantees the lease. |
(2) | Annual U/W Base Rent PSF and Annual U/W Base Rent include contractual rent steps through February 2016 totaling $17,061. |
(3) | Borrower-affiliated tenant. |
(4) | The lease for Cabi Developers is personally guaranteed by Cabi Holdings, Inc., who owns 49.5% of the borrower. |
(5) | The lease for Turnberry Residential is personally guaranteed by Jeffrey Soffer, one of the sponsors. |
(6) | The Annual U/W Base Rent and Annual U/W Base Rent PSF for Wells Fargo Advisors represent the tenant’s average rent through the remaining lease term. The current in-place rent for Wells Fargo Advisors is $28.96 per square foot. |
(7) | Trade Street Residential has the right to terminate its lease at any time with four months’ notice. |
(8) | Annual U/W Base Rent for Non-Major Tenants includes rental income from leases for cellular antennae and air rights that have no associated square footage. |
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The following table presents certain information relating to the lease rollover schedule at the Country Club Center Property:
Lease Expiration Schedule(1)(2)
Year Ending December 31, | No. of Leases Expiring | Expiring NRSF | % of Total NRSF | Cumulative Expiring NRSF | Cumulative % of Total NRSF | Annual U/W Base Rent | Annual U/W Base Rent PSF(3) | ||||||||
MTM | 0 | 0 | 0.0% | 0 | 0.0% | $0 | $0.00 | ||||||||
2015 | 0 | 0 | 0.0% | 0 | 0.0% | $0 | $0.00 | ||||||||
2016 | 4 | 11,469 | 17.7% | 11,469 | 17.7% | $296,135 | $25.82 | ||||||||
2017 | 2 | 9,170 | 14.1% | 20,639 | 31.8% | $288,751 | $31.49 | ||||||||
2018 | 2 | 16,840 | 25.9% | 37,479 | 57.7% | $504,786 | $29.98 | ||||||||
2019 | 2 | 0 | 0.0% | 37,479 | 57.7% | $43,200(4) | (4) | ||||||||
2020 | 0 | 0 | 0.0% | 37,479 | 57.7% | $0 | $0.00 | ||||||||
2021 | 0 | 0 | 0.0% | 37,479 | 57.7% | $0 | $0.00 | ||||||||
2022 | 0 | 0 | 0.0% | 37,479 | 57.7% | $0 | $0.00 | ||||||||
2023 | 0 | 0 | 0.0% | 37,479 | 57.7% | $0 | $0.00 | ||||||||
2024 | 0 | 0 | 0.0% | 37,479 | 57.7% | $0 | $0.00 | ||||||||
2025 | 0 | 0 | 0.0% | 37,479 | 57.7% | $0 | $0.00 | ||||||||
Thereafter | 2 | 27,492 | 42.3% | 64,971 | 100.0% | $1,030,950 | $37.50 | ||||||||
Vacant | 0 | 0 | 0.0% | 64,971 | 100.0% | $0 | $0.00 | ||||||||
Total/Weighted Average | 12 | 64,971 | 100.0% | $2,163,823 | $33.30 |
(1) | Information obtained from the underwritten rent roll. |
(2) | Certain tenants may have lease termination options that are exercisable prior to the originally stated expiration date of the subject lease and that are not considered in the Lease Expiration Schedule. |
(3) | Weighted Average Annual U/W Base Rent PSF excludes storage and vacant space. |
(4) | Annual U/W Base Rent and Annual U/W Base Rent PSF include rental income from leases for a cellular antennae and air rights that have no associated square footage. |
The following table presents historical occupancy percentages at the Country Club Center Property:
Historical Occupancy
12/31/2012(1) | 12/31/2013(1) | 12/31/2014(1) | 2/1/2015(2) | |||
100.0% | 100.0% | 100.0% | 100.0% |
(1) | Information obtained from the borrower. |
(2) | Information obtained from the underwritten rent roll. |
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Operating History and Underwritten Net Cash Flow. The following table presents certain information relating to the historical operating performance and underwritten net cash flow at the Country Club Center Property:
Cash Flow Analysis
2012 | 2013 | 2014 | U/W | % of U/W Effective Gross Income | U/W $ per SF | ||||||||
Base Rent | $1,845,076 | $1,794,782 | $1,768,453(1) | $2,163,823(1)(2) | 67.9% | $33.30 | |||||||
Grossed Up Vacant Space | 0 | 0 | 0 | 0 | 0.0 | 0.00 | |||||||
Total Reimbursables | 986,559 | 931,619 | 931,913 | 982,490 | 30.8 | 15.12 | |||||||
Parking Income | 125,915 | 121,190 | 126,307 | 126,307 | 4.0 | 1.94 | |||||||
Other Income | 20,760 | 20,950 | 22,286 | 22,286 | 0.7 | 0.34 | |||||||
Less Vacancy & Free Rent | 0 | 0 | 0 | (108,191)(3) | (3.4) | (1.67) | |||||||
Effective Gross Income | $2,978,310 | $2,868,541 | $2,848,959 | $3,186,714 | 100.0% | $49.05 | |||||||
Total Operating Expenses | $1,014,284 | $1,067,255 | $1,029,513 | $1,100,060 | 34.5% | $16.93 | |||||||
Net Operating Income | $1,964,026 | $1,801,286 | $1,819,446 | $2,086,654 | 65.5% | $32.12 | |||||||
TI/LC | 0 | 0 | 0 | 58,284 | 1.9 | 0.90 | |||||||
Capital Expenditures | 0 | 0 | 0 | 12,994 | 0.4 | 0.20 | |||||||
Net Cash Flow | $1,964,026 | $1,801,286 | $1,819,446 | $2,015,376 | 63.2% | $31.02 | |||||||
NOI DSCR | 1.21x | 1.11x | 1.12x | 1.29x | |||||||||
NCF DSCR | 1.21x | 1.11x | 1.12x | 1.24x | |||||||||
NOI DY | 7.3% | 6.7% | 6.7% | 7.7% | |||||||||
NCF DY | 7.3% | 6.7% | 6.7% | 7.5% |
(1) | The increase in the U/W Base Rent from 2014 is primarily due to new leases executed by Cabi Developers and Turnberry Residential at a higher rental rate for a total annual base rent increase of $371,142 that became effective in April 2015. |
(2) | U/W Base Rent includes contractual rent steps through February 2016 totaling $17,061. |
(3) | The underwritten economic vacancy is 5.0%. The Country Club Center Property was 100.0% physically occupied as of February 1, 2015. |
Appraisal.As of the appraisal valuation date of March 23, 2015, the Country Club Center Property had an “as-is” appraised value of $36,000,000.
Environmental Matters.According to the Phase I environmental report dated March 27, 2015, there was no evidence of any recognized environmental conditions at the Country Club Center Property.
Market Overview and Competition.The Country Club Center Property is located in Aventura, Florida, approximately one mile south of Broward County and approximately 18.1 miles northeast of the Miami central business district. Interstate 95 is the major north/south expressway providing direct access to the southeastern and northeastern areas of Miami-Dade County and is located approximately 2.1 miles west of the Country Club Center Property. The Miami International Airport is approximately 18.8 miles southwest of the Country Club Center Property. The City of Aventura provides a wide spectrum of land uses ranging from single-family homes and high-rise multifamily dwellings to the regional Aventura Mall and high-rise office buildings, as well as a variety of strip centers and free-standing retail along the major corridors. The 2.7 million square foot Aventura Mall is one of the largest shopping centers in the country, which is anchored by Nordstrom, Bloomingdale’s and Macy’s, plus luxury boutiques including Louis Vuitton, Cartier, Burberry, Red Valentino, Emilio Pucci, Sandro and Breitling. The estimated 2015 population within a one- and three-mile radius of the Country Club Center Property is 28,088 and 183,945, respectively, and the estimated average 2015 household income for the same radii is $82,591 and $67,478, respectively.
According to a third party research report, the Country Club Center Property is located in the Aventura office submarket which reported a total inventory of 52 buildings totaling 2.2 million square feet with a 7.9% vacancy rate as of the first quarter of 2015. The Aventura class A office submarket is comprised of 11 buildings totaling 1.0 million square feet and reported a 12.8% vacancy rate as of the first quarter of 2015. The appraiser concluded to a market rent for the Country Club Center Property of $34.00 per square foot, triple net, which is slightly higher than the weighted average underwritten base rent of $33.30 per square foot. The Aventura class A office submarket has experienced positive net absorption with vacancy declining from 17.2% at year end of 2014 to 12.8% as of the first quarter of 2015.
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COUNTRY CLUB CENTER |
The following table presents certain information relating to comparable office properties for the Country Club Center Property:
Competitive Set(1)
Country Club Center (Subject) | One Turnberry Place | Aventura Corp. Center I & II | Aventura Harbour Centre | Turnberry Plaza | ||||||
Location | Aventura, FL | Aventura, FL | Aventura, FL | Aventura, FL | Aventura, FL | |||||
Distance from Subject | -- | 0.5 miles | 0.0 miles | 0.8 miles | 0.7 miles | |||||
Property Type | Office | Office | Office | Office | Office | |||||
Year Built/Renovated | 2004/2006 | 1990/NAP | 1988/2003 | 2003/NAP | 1985/NAP | |||||
Stories | 10 | 9 | 5 | 11 | 10 | |||||
Total GLA | 64,971 SF | 136,411 SF | 164,000 SF | 217,056 SF | 106,000 SF | |||||
Total Occupancy | 100% | 100% | 89% | 96% | 100% |
(1) | Information obtained from the appraisal. |
The Borrower.The borrower is Cabi Turnberry Aventura Offices, LP, a Delaware limited partnership and a single purpose entity that is owned by Cabi Holdings, Inc. and Jeffrey Soffer. Jeffrey and Jacquelyn Soffer are the guarantors of certain nonrecourse carveouts under the Country Club Center Mortgage Loan.
The Sponsor.The sponsors are Jeffrey and Jacquelyn Soffer. Mr. Soffer is the chairman and CEO of Turnberry Associates, a real estate development and property management company. Turnberry Associates has developed more than $10.0 billion in commercial and residential properties including approximately 20.0 million square feet of retail space, more than 7,000 apartments and condominium units, 1.5 million square feet of class A office space and in excess of 3,000 hotel and resort rooms. Mr. Soffer was involved in various litigation matters involving claims resulting from the Fontainebleau Las Vegas project filing for Chapter 11 bankruptcy protection in mid-2009, as well as other matters. In addition, affiliates of Cabi Holdings, Inc. have filed Chapter 11 bankruptcy and were involved in a default on a $1.5 billion real estate loan in 2008. See “Description of the Mortgage Pool – Litigation Considerations” and “Description of the Mortgage Pool – Default History, Bankruptcy Issues and Other Proceedings” in the Free Writing Prospectus.
Escrows.The loan documents provide for an upfront reserve in the amount of $205,376 and monthly escrows in the amount of $25,672 for real estate taxes. The loan documents require monthly escrows in an amount of $1,083 for replacement reserves; however, monthly escrows are waived provided no event of default has occurred and is continuing and the property is being adequately maintained as reasonably determined by the lender based on annual site inspections. The loan documents do not require monthly escrows for insurance as long as (i) no event of default has occurred and is continuing; (ii) the Country Club Center Property is insured under an acceptable blanket insurance policy; and (iii) the borrower provides the lender with evidence of renewal of the required policies and timely proof of payment of the insurance premiums.
Upon the occurrence of any tenant that leases more than 5.0% of the net rentable area at the Country Club Center Property failing to extend its lease, the borrower must deposit or provide a letter of credit for an amount equal to $25.00 per square foot for the applicable tenant space for tenant improvements and leasing commissions related to re-tenanting the non-renewing tenant space. Upon the occurrence of a Major Tenant Event Period (as defined below in the Lockbox and Cash Management section), all excess cash flow must be deposited into a cash management subaccount to be used for tenant improvements and leasing commissions; however, the borrower may deposit $365,000 in lieu of an excess cash flow sweep.
Lockbox and Cash Management.The Country Club Center Mortgage Loan requires a lender-controlled lockbox account, which is already in place, and that the borrower and property manager deposit all rents received into such lockbox account within one business day after receipt. Prior to a Cash Trap Event Period (as defined below), all funds on deposit in the lockbox account are swept to a borrower account. During a Cash Trap Event, the borrower and property manager will cause all rents to be deposited directly into the lockbox account, and all funds on deposit in the lockbox account will be swept into a lender-controlled cash management account.
A “Cash Trap Event Period” will commence upon the earlier of (i) the occurrence of an event of default; (ii) the amortizing debt service coverage ratio falling below 1.05x at the end of any calendar quarter; or (iii) the occurrence of a Major Tenant Event Period. A Cash Trap Event Period will be cured, with regard to clause (i), upon the cure of such event of default; with regard to clause (ii), upon the amortizing debt service coverage ratio being equal to or greater than 1.10x for two consecutive calendar quarters; and with regard to clause (iii), upon the ending of the Major Tenant Event Period.
A “Major Tenant Event Period” will commence upon the earlier of Cabi Developers (i) filing bankruptcy or similar insolvency proceeding; or (ii) going dark, vacating or otherwise failing to occupy the property or giving notice of its intent to commence any of the foregoing. A Major Tenant Event Period will end, with regard to clause (i), upon the bankruptcy or insolvency proceeding being terminated and Cabi Developers’ lease being affirmed; with regard to clause (ii), upon Cabi Developers resuming normal business operations for two consecutive calendar quarters; or, with regard to clauses (i) and (ii), upon the borrower depositing $365,000 or the lender receiving satisfactory evidence that the Cabi Developers’ space has been leased to one or more satisfactory replacement tenants on terms acceptable to the lender, such replacement tenants have taken occupancy and are open for business and the amortizing debt service coverage ratio is equal to or greater than 1.10x.
Property Management.The Country Club Center Property is managed by an affiliate of the borrower.
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Assumption.The borrower has a two-time right to transfer the Country Club Center Property, provided that no event of default has occurred and is continuing and certain other conditions are satisfied, including (i) the lender's reasonable determination that the proposed transferee and guarantor satisfy the lender's credit review and underwriting standards, taking into consideration transferee experience, financial strength and general business standing; (ii) execution of a recourse guaranty (which includes an environmental indemnity) by an affiliate of the transferee; and (iii) rating agency confirmation from Fitch, KBRA and Moody’s that the transfer will not result in a downgrade, withdrawal or qualification of the respective ratings assigned to the Series 2015-C29 Certificates.
Partial Release.Not permitted.
Real Estate Substitution.Not permitted.
Subordinate and Mezzanine Indebtedness. Not permitted.
Additional Indebtedness. Jeffrey Soffer and certain affiliates are permitted to pledge their direct or indirect, non-controlling ownership of the borrower (other than the general partner of the borrower). See “Description of the Mortgage Pool-Subordinate and/or Other Financing” in the Free Writing Prospectus.
Ground Lease.None.
Terrorism Insurance. The loan documents require that the “all risk” insurance policy required to be maintained by the borrower provide coverage for terrorism in an amount equal to the full replacement cost of the Country Club Center Property. The loan documents also require business interruption insurance covering no less than the 12-month period following the occurrence of a casualty event, together with a 6-month extended period of indemnity.
Windstorm Insurance. The loan documents require windstorm insurance covering the full replacement cost of the Country Club Center Property during the loan term. At the time of loan closing, the Country Club Center Property had insurance coverage for windstorm.
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PARKWAY CROSSING EAST SHOPPING CENTER |
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PARKWAY CROSSING EAST SHOPPING CENTER |
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No. 8 – Parkway Crossing East Shopping Center | |||||||
Loan Information | Property Information | ||||||
Mortgage Loan Seller: | Wells Fargo Bank, National Association | Single Asset/Portfolio: | Single Asset | ||||
Credit Assessment (Fitch/KBRA/Moody’s): | NR/NR/NR | Property Type: | Retail | ||||
Original Principal Balance: | $26,250,000 | Specific Property Type: | Anchored | ||||
Cut-off Date Principal Balance: | $26,216,058 | Location: | Woodbridge, VA | ||||
% of Initial Pool Balance: | 2.2% | Size(2): | 143,330 SF | ||||
Loan Purpose: | Refinance | Cut-off Date Principal Balance Per SF: | $182.91 | ||||
Borrower Name: | Parkway Crossing East Shopping Center, L.P. | Year Built/Renovated: | 2004/NAP | ||||
Sponsor: | Thomas R. Green | Title Vesting: | Fee | ||||
Mortgage Rate: | 4.130% | Property Manager: | Self-managed | ||||
Note Date: | May 1, 2015 | 3rd Most Recent Occupancy (As of)(2): | 96.2% (12/31/2012) | ||||
Anticipated Repayment Date: | NAP | 2nd Most Recent Occupancy (As of)(2): | 96.2% (12/31/2013) | ||||
Maturity Date: | May 11, 2025 | Most Recent Occupancy (As of)(2): | 96.2% (12/31/2014) | ||||
IO Period: | 0 months | Current Occupancy (As of)(2): | 98.1% (4/24/2015) | ||||
Loan Term (Original): | 120 months | ||||||
Seasoning: | 1 month | Underwriting and Financial Information: | |||||
Amortization Term (Original): | 360 months | ||||||
Loan Amortization Type: | Amortizing Balloon | 3rd Most Recent NOI (As of): | $2,078,711 (12/31/2012) | ||||
Interest Accrual Method: | Actual/360 | 2nd Most Recent NOI (As of): | $1,999,461 (12/31/2013) | ||||
Call Protection: | L(25),D(91),O(4) | Most Recent NOI (As of)(3): | $1,965,295 (12/31/2014) | ||||
Lockbox Type: | Springing (Without Established Account) | ||||||
Additional Debt: | No | ||||||
Additional Debt Type: | NAP | U/W Revenues: | $2,962,282 | ||||
U/W Expenses: | $707,962 | ||||||
U/W NOI(3): | $2,254,321 | ||||||
U/W NCF: | $2,107,163 | ||||||
Escrows and Reserves(1): | U/W NOI DSCR | 1.48x | |||||
U/W NCF DSCR: | 1.38x | ||||||
Type: | Initial | Monthly | Cap (If Any) | U/W NOI Debt Yield: | 8.6% | ||
Taxes | $0 | Springing | NAP | U/W NCF Debt Yield: | 8.0% | ||
Insurance | $0 | Springing | NAP | As-Is Appraised Value: | $35,000,000 | ||
Replacement Reserves | $0 | $2,747 | NAP | As-Is Appraisal Valuation Date: | February 10, 2015 | ||
TI/LC Reserve | $0 | $7,764 | $400,000 | Cut-off Date LTV Ratio: | 74.9% | ||
Office Depot Reserve | $200,000 | $0 | NAP | LTV Ratio at Maturity or ARD: | 59.9% | ||
(1) | See “Escrows” section. |
(2) | Occupancy includes Babies “R” Us (30,000 square feet) which is on a ground lease and owns its own improvements. |
(3) | See “Cash Flow Analysis” section. |
The Mortgage Loan.The mortgage loan (the “Parkway Crossing East Shopping Center Mortgage Loan”) is evidenced by a single promissory note that is secured by a first mortgage encumbering an anchored retail center located in Woodbridge, Virginia (the “Parkway Crossing East Shopping Center Property”). The Parkway Crossing East Shopping Center Mortgage Loan was originated on May 1, 2015 by Wells Fargo Bank, National Association. The Parkway Crossing East Shopping Center Mortgage Loan had an original principal balance of $26,250,000, has an outstanding principal balance as of the Cut-off Date of $26,216,058 and accrues interest at an interest rate of 4.130%per annum. The Parkway Crossing East Shopping Center Mortgage Loan had an initial term of 120 months, has a remaining term of 119 months as of the Cut-off Date and requires payments of principal and interest based on a 30-year amortization schedule. The Parkway Crossing East Shopping Center Mortgage Loan matures on May 11, 2025.
Following the lockout period, the borrower has the right to defease the Parkway Crossing East Shopping Center Mortgage Loan in whole, but not in part, on any date before February 11, 2025. In addition, the Parkway Crossing East Shopping Center is prepayable without penalty on or after February 11, 2025.
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PARKWAY CROSSING EAST SHOPPING CENTER |
Sources and Uses
Sources | Uses | ||||||||
Original loan amount | $26,250,000 | 100.0% | Loan payoff(1) | $20,871,216 | 79.5 | % | |||
Reserves | 200,000 | 0.8 | |||||||
Closing costs | 178,919 | 0.7 | |||||||
Return of equity | 4,999,865 | 19.0 | |||||||
Total Sources | $26,250,000 | 100.0% | Total Uses | $26,250,000 | 100.0 | % |
(1) | The Parkway Crossing East Shopping Center Property was previously securitized in the MLMT 2005-CK11 transaction. |
The Property.The Parkway Crossing East Shopping Center Property is an anchored retail center located in Woodbridge, Virginia, approximately 24.3 miles southwest of Washington D.C. Built in 2004, the Parkway Crossing East Shopping Center Property is situated on a 21.3-acre parcel and is anchored by Michaels, Bed Bath & Beyond, Office Depot and Babies R Us, which is on a ground lease and owns its own improvements. The Parkway Crossing East Shopping Center Property consists of four buildings including three, multi-tenant retail strips and one pad site that is ground leased to Chick-Fil-A. The Parkway Crossing East Shopping Center Property contains 596 parking spaces, resulting in a parking ratio of 4.2 spaces per 1,000 square feet of rentable area. Since its construction in 2004, occupancy at the Parkway Crossing East Shopping Center Property has averaged 98.8%. As of April 24, 2015, the Parkway Crossing East Shopping Center Property was 98.1% occupied by 16 tenants.
The following table presents certain information relating to the tenancy at the Parkway Crossing East Shopping Center Property:
Major Tenants
Tenant Name | Credit Rating (Fitch/Moody’s/ S&P)(1) | Tenant NRSF | % of NRSF | Annual U/W Base Rent PSF(2) | Annual U/W Base Rent(2) | % of Total Annual U/W Base Rent | Sales PSF(3) | Occupancy Cost(3) | Lease Expiration Date | ||||||||||||
Anchor Tenants | |||||||||||||||||||||
Michaels | NR/NR/B+ | 23,982 | 16.7% | $16.87 | $404,600 | 16.4 | % | NAV | NAV | 2/29/2020(4) | |||||||||||
Bed Bath & Beyond | NR/Baa1/A- | 35,070 | 24.5% | $11.53 | $404,250 | 16.4 | % | NAV | NAV | 1/31/2020(5) | |||||||||||
Office Depot | NR/B2/B- | 18,000 | 12.6% | $15.00 | $270,000 | 10.9 | % | NAV | NAV | 10/31/2019(6) | |||||||||||
Babies “R” Us | CC/B3/B- | 30,000(7) | 20.9%(7) | $8.07(7) | $242,000 | 9.8 | % | NAV | NAV | 1/31/2020(8) | |||||||||||
Total Anchor Tenants | 107,052 | 74.7% | $12.34 | $1,320,850 | 53.6 | % | |||||||||||||||
Major Tenants | |||||||||||||||||||||
Thomasville Furniture | NR/NR/NR | 10,403 | 7.3% | $23.83 | $247,903 | 10.1 | % | NAV | NAV | 3/31/2017 | |||||||||||
Sleepy’s | NR/NR/NR | 3,644 | 2.5% | $41.59 | $151,554 | 6.1 | % | NAV | NAV | 11/30/2020 | |||||||||||
Total Major Tenants | 14,047 | 9.8% | $28.44 | $399,457 | 16.2 | % | |||||||||||||||
Non-Major Tenants | 19,528(9) | 13.6% | $38.20(9) | $745,993(9) | 30.2 | % | |||||||||||||||
Occupied Collateral Total | 140,627 | 98.1% | $17.54 | $2,466,300 | 100.0 | % | |||||||||||||||
Vacant Space | 2,703 | 1.9% | |||||||||||||||||||
Collateral Total | 143,330 | 100.0% | |||||||||||||||||||
(1) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
(2) | Annual U/W Base Rent PSF and Annual U/W Base Rent include contractual rent steps through January 2016 totaling $8,569. |
(3) | The majority of tenants at the Parkway Crossing East Shopping Center Property are not required to report sales. |
(4) | Michaels has four, 5-year lease renewal options. |
(5) | Bed Bath & Beyond has three, 5-year lease renewal options. |
(6) | Office Depot has two, 5-year lease renewal options. |
(7) | Babies “R” Us is on a ground lease and owns its own improvements. |
(8) | Babies “R” Us has seven, 5-year lease renewal options. |
(9) | The Annual U/W Base Rent PSF and Annual U/W Base Rent include ground rent from Chick-Fil-A ($115,719) but the square footage attributed to the Chick-Fil-A outparcel was excluded from the Non-Major Tenants NRSF since the tenant is on a ground lease and owns its own improvements. The Annual U/W Base Rent PSF excluding the Chick-Fil-A rent is $32.28. |
A-3-69 |
PARKWAY CROSSING EAST SHOPPING CENTER |
The following table presents certain information relating to the lease rollover schedule at the Parkway Crossing East Shopping Center Property:
Lease Expiration Schedule(1)(2)
Year Ending December 31, | No. of Leases Expiring | Expiring NRSF | % of Total NRSF | Cumulative Expiring NRSF | Cumulative % of Total NRSF | Annual U/W Base Rent | % of Annual U/W Base Rent | Annual U/W Base Rent PSF(3) | ||||||||||
MTM | 0 | 0 | 0.0% | 0 | 0.0% | $0 | 0.0% | $0.00 | ||||||||||
2015 | 0 | 0 | 0.0% | 0 | 0.0% | $0 | 0.0% | $0.00 | ||||||||||
2016 | 0 | 0 | 0.0% | 0 | 0.0% | $0 | 0.0% | $0.00 | ||||||||||
2017 | 4 | 17,513 | 12.2% | 17,513 | 12.2% | $473,778 | 19.2% | $27.05 | ||||||||||
2018 | 0 | 0 | 0.0% | 17,513 | 12.2% | $0 | 0.0% | $0.00 | ||||||||||
2019 | 1 | 18,000 | 12.6% | 35,513 | 24.8% | $270,000 | 10.9% | $15.00 | ||||||||||
2020 | 9 | (4) | 102,591(4) | 71.6%(4) | 138,104(4) | 96.4%(4) | $1,522,282 | 61.7% | $14.84 | (4) | ||||||||
2021 | 0 | 0 | 0.0% | 138,104 | 96.4% | $0 | 0.0% | $0.00 | ||||||||||
2022 | 1 | 2,523 | 1.8% | 140,627 | 98.1% | $84,521 | 3.4% | $33.50 | ||||||||||
2023 | 1 | (5) | 0(5) | 0.0%(5) | 140,627(5) | 98.1%(5) | $115,719 | (5) | 4.7% | (5) | ||||||||
2024 | 0 | 0 | 0.0% | 140,627 | 98.1% | $0 | 0.0% | $0.00 | ||||||||||
2025 | 0 | 0 | 0.0% | 140,627 | 98.1% | $0 | 0.0% | $0.00 | ||||||||||
Thereafter | 0 | 0 | 0.0% | 140,627 | 98.1% | $0 | 0.0% | $0.00 | ||||||||||
Vacant | 0 | 2,703 | 1.9% | 143,330 | 100.0% | $0 | 0.0% | $0.00 | ||||||||||
Total/Weighted Average | 16 | 143,330 | 100.0% | $2,466,300 | 100.0% | $17.54 |
(1) | Information obtained from the underwritten rent roll. |
(2) | Certain tenants may have lease termination options that are exercisable prior to the originally stated expiration date of the subject lease and that are not considered in the Lease Expiration Schedule. |
(3) | Weighted Average Annual U/W Base Rent PSF excludes vacant space. |
(4) | Babies “R” Us (30,000 square feet; 20.9% of NRSF) is on a ground lease and owns its own improvements. |
(5) | The square footage attributed to a Chick-Fil-A outparcel was excluded from the total NRSF since the tenant is on a ground lease and owns its own improvements. |
The following table presents historical occupancy percentages at the Parkway Crossing East Shopping Center Property:
Historical Occupancy
12/31/2012(1)(2) | 12/31/2013(1)(2) | 12/31/2014(1)(2) | 4/24/2015(1)(3) | |||
96.2% | 96.2% | 96.2% | 98.1% |
(1) | Occupancy includes Babies R US (30,000 square feet) which is on a ground lease and owns its own improvements. |
(2) | Information obtained from the borrower. |
(3) | Information obtained from the underwritten rent roll. |
A-3-70 |
PARKWAY CROSSING EAST SHOPPING CENTER |
Operating History and Underwritten Net Cash Flow. The following table presents certain information relating to the historical operating performance and the underwritten net cash flow at the Parkway Crossing East Shopping Center Property:
Cash Flow Analysis
2012 | 2013 | 2014 | U/W | % of U/W Effective Gross Income | U/W $ per SF(1) | ||||||||
Base Rent | $2,218,984 | $2,232,056 | $2,255,394 | $2,466,300(2) | 83.3% | $17.21 | |||||||
Grossed Up Vacant Space | 0 | 0 | 0 | 81,089 | 2.7 | 0.57 | |||||||
Total Reimbursables | 539,937 | 422,983 | 446,044 | 542,263 | 18.3 | 3.78 | |||||||
Other Income | 0 | 648 | 294 | 0 | 0.0 | 0.00 | |||||||
Less Vacancy & Credit Loss | 0 | 0 | 0 | (127,369)(3) | (4.3) | (0.89) | |||||||
Effective Gross Income | $2,758,921 | $2,655,687 | $2,701,732 | $2,962,282 | 100.0% | $20.67 | |||||||
Total Operating Expenses | $680,210 | $656,226 | $736,437 | $707,962 | 23.9% | 4.94 | |||||||
Net Operating Income | $2,078,711 | $1,999,461 | $1,965,295(4) | $2,254,321(4) | 76.1% | $15.73 | |||||||
TI/LC | 0 | 0 | 0 | 118,491 | 4.0 | 0.83 | |||||||
Capital Expenditures | 0 | 0 | 0 | 28,666 | 1.0 | 0.20 | |||||||
Net Cash Flow | $2,078,711 | $1,999,461 | $1,965,295 | $2,107,163 | 71.1% | $14.70 | |||||||
NOI DSCR | 1.36x | 1.31x | 1.29x | 1.48x | |||||||||
NCF DSCR | 1.36x | 1.31x | 1.29x | 1.38x | |||||||||
NOI DY | 7.9% | 7.6% | 7.5% | 8.6% | |||||||||
NCF DY | 7.9% | 7.6% | 7.5% | 8.0% |
(1) | Total square footage includes Babies R Us (30,000 square feet) which is on a ground lease and owns its own improvements. |
(2) | U/W Base Rent includes contractual rent increases occurring through January 2016 totaling $8,569. |
(3) | The underwritten economic vacancy is 5.0%. The Parkway Crossing East Shopping Center Property was 98.1% physically occupied as of April 24, 2015. |
(4) | U/W Net Operating Income is greater than 2014 due to contractual rent increases that occurred from January 2015 through May 2015 totaling $113,873 and contractual rent increases occurring through January 2016 totaling $8,569 being underwritten. |
Appraisal. As of the appraisal valuation date of February 10, 2015, the Parkway Crossing East Shopping Center Property had an “as-is” appraised value of $35,000,000.
Environmental Matters. According to a Phase I environmental site assessment dated February 24, 2015, there was no evidence of any recognized environmental conditions at the Parkway Crossing East Shopping Center Property.
Market Overview and Competition.The Parkway Crossing East Shopping Center Property is located on the east side of Prince William Parkway, at the intersection of Caton Hill Road and bounded by Interstate 95 to the east, in Woodbridge, Virginia. Woodbridge is located approximately 24.3 miles southwest of Washington D.C. and is bounded by the Potomac and Occoquan Rivers. Given the substantial presence of the government in the market, many of the largest private-sector employers in the Washington D.C. metro area are defense manufacturers, government contractors and law firms. There are 17 Fortune 500 companies that have headquarters located in the greater Washington D.C. metro area and Inova Health Systems is the largest private employer in the region with approximately 16,000 employees. The neighborhood surrounding the Parkway Crossing East Shopping Center Property offers a variety of amenities for residents including the 100.0% occupied Potomac Mills Mall, located approximately 1.7 miles southwest of the Parkway Crossing East Shopping Center Property, which is one of the largest shopping centers in Northern Virginia and is anchored by JC Penney, Bloomingdale’s, Costco, Neiman Marcus, Nordstrom Rack and Marshalls. As of 2014, the estimated population within a three- and five-mile radius of the Parkway Crossing East Shopping Center Property was 112,686 and 220,400, respectively, and the average 2015 household income within the same radii was $105,163 and $117,345, respectively.
According to a third party research report, the Parkway Crossing East Shopping Center Property is located in the Washington, D.C. retail market. As of the first quarter of 2015, the Washington D.C. retail market was comprised of 16,285 properties totaling 224.1 million square feet and reported an overall vacancy rate of 4.5%. Within the Washington D.C. retail market, the Parkway Crossing East Shopping Center Property is located in the Woodbridge/I-95 Corridor retail submarket which reported a total inventory of 402 properties totaling approximately 3.7 million square feet as of the first quarter of 2015. The Woodbridge/I-95 Corridor retail submarket reported a vacancy rate of 3.5% and an average asking rent of $20.45 per square foot full-service gross.
A-3-71 |
PARKWAY CROSSING EAST SHOPPING CENTER |
The following table presents certain information relating to comparable properties to the Parkway Crossing East Shopping Center Property:
Competitive Set(1)
Parkway Crossing East Shopping Center (Subject) | Parkway Crossing West | Smoketown Stations | Potomac Festival | Prince William Square | Rollingwood Shopping Center | |||||||
Location | Woodbridge, VA | Woodbridge, VA | Woodbridge, VA | Woodbridge, VA | Woodbridge, VA | Woodbridge, VA | ||||||
Distance from Subject | -- | 0.5 miles | 1.0 miles | 2.1 miles | 1.9 miles | 1.6 miles | ||||||
Property Type | Power Center | Power Center | Power Center | Community Center | Community Center | Community Center | ||||||
Year Built/Renovated | 2004/NAP | 1995/NAP | 1992/2009 | 1990/NAP | 1986/NAP | 1997/2005 | ||||||
Anchors | Michaels, Bed Bath & Beyond, Office Depot, Babies R Us | Target, Value City Furniture, Beauty 4U | Dick’s Sporting Goods, LA Fitness, Best Buy, Petsmart | Everest College, Savers, Staples, hhgregg | Jo-Ann Fabrics, Ashley Furniture, Ross Dress for Less, CW Price | Kohl’s, Global Foods, Home Depot (shadow anchor) | ||||||
Total GLA | 143,330 SF | 185,261 SF | 494,506 SF | 327,886 SF | 233,147 SF | 163,317 SF | ||||||
Total Occupancy | 98% | 100% | 97% | 96% | 86% | 100% |
(1) | Information obtained from the appraisal. |
The Borrower.The borrower is Parkway Crossing East Shopping Center, L.P., a Virginia limited partnership and single purpose entity with one independent director. Thomas R. Green is the guarantor of certain nonrecourse carveouts under the Parkway Crossing East Shopping Center Mortgage Loan.
The Sponsors.The sponsor is Thomas R. Green, who founded National Real Estate Management Corp (“NRE”) in the early 1960’s to develop and manage various family-controlled real estate holdings. Headquartered in St. Louis, Missouri, NRE has built a diverse real estate portfolio that includes over 3.5 million square feet of retail shopping centers, 1,000 manufactured housing rental pads, 600 apartment units and 300,000 square feet of office and industrial space located across 11 states and Puerto Rico.
Escrows.The loan documents provide for upfront reserves in the amount of $200,000 for re-leasing expenses related to the Office Depot space due to potential uncertainty in connection with the pending Staples, Inc. acquisition of Office Depot; the funds will be returned to the borrower in June 2017, provided that no event of default has occurred or is continuing and no Major Tenant Event Period (as defined below in the Lockbox and Cash Management section) has occurred or is continuing with respect to the Office Depot space. The loan documents require monthly deposits of $2,747 for replacement reserves and $7,764 for tenant improvements and leasing commissions (subject to a cap of $400,000). The loan documents do not require monthly escrows for real estate taxes, provided that (i) no event of default or Cash Trap Event Period (as defined below in the Lockbox and Cash Management section) has occurred and is continuing; (ii) the borrower pays all taxes at least seven calendar days prior to delinquency; and (iii) the borrower provides satisfactory evidence of payment of taxes at least seven days prior to delinquency. The loan documents also do not require monthly escrows for insurance, provided that (a) no event of default has occurred and is continuing; (b) the Parkway Crossing East Shopping Center Property is insured via an acceptable blanket insurance policy; and (c) the borrower provides the lender with evidence of renewal of the insurance policies and timely proof of payment of insurance premiums.
Lockbox and Cash Management.Upon the occurrence of a Cash Trap Event Period (as defined below), the borrower will be required to establish a lender-controlled lockbox account and direct tenants to deposit all rents directly into such lockbox account. During a Cash Trap Event Period, all excess funds on deposit in the lockbox account are swept to a lender-controlled cash flow sub-account.
A “Cash Trap Event Period” will commence upon the earlier of (i) the occurrence and continuance of an event of default; (ii) the net cash flow debt yield falling below 7.0%; or (iii) the occurrence of a Major Tenant Event Period (as defined below). A Cash Trap Event Period will be cured, with regard to clause (i), upon the cure of such event of default; with regard to clause (ii), upon the net cash flow debt yield being equal to or greater than 7.0% for two consecutive calendar quarters; and with regard to clause (iii), upon the end of a Major Tenant Event Period.
A “Major Tenant Event Period” will commence upon the earlier of Bed Bath & Beyond, Babies “R” Us, Michaels or Office Depot (individually or collectively, a “Major Tenant”) (i) going dark, vacating or otherwise failing to occupy its space; (ii) filing bankruptcy or similar insolvency; or (iii) terminating its lease, giving a termination notice or the lease otherwise failing to be in full force and effect. A Major Tenant Event Period will be cured, with regard to clause (i), upon the occurrence of a Major Tenant Re-Tenanting Event (as defined below) or the applicable Major Tenant resuming its normal business operations and being open for two consecutive calendar quarters; with respect to clause (ii), upon the occurrence of a Major Tenant Re-Tenanting Event or the bankruptcy or insolvency proceeding being terminated and the related Major Tenant’s lease being affirmed; with respect to clause (iii), upon the occurrence of a Major Tenant Re-Tenanting Event or any applicable default being cured and such Major Tenant’s lease being in full force and effect for two consecutive calendar quarters; and with respect to clauses (i), (ii) and (iii), in the event that such Major Tenant Event Period has occurred (x) with respect to only one Major Tenant that is not Office Depot, (y) no other Major Tenant Event Period has occurred with respect to a different Major Tenant and (z) no other tenant’s lease includes co-tenancy provisions with respect to such Major Tenant, the Major Tenant Event Period will end once the balance of funds in the excess cash flow sub-account is equal to or greater than $10.00 per square foot of the related Major Tenant’s space.
A-3-72 |
PARKWAY CROSSING EAST SHOPPING CENTER |
A “Major Tenant Re-Tenanting Event” will occur upon the lender receiving satisfactory evidence that the applicable Major Tenant’s space has been leased to one or more satisfactory replacement tenants and that such replacement tenant is in occupancy, open for business and paying full unabated rent.
Property Management. The Parkway Crossing East Shopping Center Property is managed by an affiliate of the borrower.
Assumption. The borrower has the two-time right to transfer the Parkway Crossing East Shopping Center Property, provided that certain conditions are satisfied, including (i) the lender has reasonably determined that the proposed transferees and guarantor satisfy the lender’s credit review and underwriting standards, taking into consideration transferee’s experience, financial strength and general business standing; (ii) execution of a recourse guaranty and environmental indemnity; and (iii) the lender has received confirmation from Fitch, KBRA and Moody’s that such assumption will not result in a downgrade, withdrawal or qualification of the respective ratings assigned to the Series 2015-C29 Certificates.
Partial Release. Not permitted.
Real Estate Substitution.Not permitted.
Subordinate and Mezzanine Indebtedness.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 Parkway Crossing East Shopping Center Property. The loan documents also require business interruption insurance covering no less than the 12-month period following the occurrence of a casualty event, together with a six-month extended period of indemnity.
A-3-73 |
OLMSTED PLAZA SHOPPING CENTER |
A-3-74 |
OLMSTED PLAZA SHOPPING CENTER |
A-3-75 |
No. 9 – Olmsted Plaza Shopping Center | |||||||
Loan Information | Property Information | ||||||
Mortgage Loan Seller: | Silverpeak Real Estate Finance LLC | Single Asset/Portfolio: | Single Asset | ||||
Credit Assessment (Fitch/KBRA/Moody’s): | NR/NR/NR | Property Type: | Retail | ||||
Original Principal Balance: | $25,500,000 | Specific Property Type: | Anchored | ||||
Cut-off Date Principal Balance: | $25,500,000 | Location: | North Olmsted, OH | ||||
% of Initial Pool Balance: | 2.2% | Size: | 255,902 SF | ||||
Loan Purpose: | Refinance | Cut-off Date Principal Balance Per SF: | $99.65 | ||||
Borrower Name: | B & G Properties Limited Partnership | Year Built/Renovated: | 1969/NAP | ||||
Sponsor: | B & G Properties LP | Title Vesting: | Fee | ||||
Mortgage Rate: | 4.100% | Property Manager: | Self-managed | ||||
Note Date: | April 7, 2015 | 3rd Most Recent Occupancy (As of): | 98.0% (12/31/2012) | ||||
Anticipated Repayment Date: | NAP | 2nd Most Recent Occupancy (As of): | 100.0% (12/31/2013) | ||||
Maturity Date: | May 6, 2025 | Most Recent Occupancy (As of): | 100.0% (12/31/2014) | ||||
IO Period: | 60 months | Current Occupancy (As of): | 93.6% (4/6/2015) | ||||
Loan Term (Original): | 120 months | ||||||
Seasoning: | 1 months | Underwriting and Financial Information: | |||||
Amortization Term (Original): | 360 months | ||||||
Loan Amortization Type: | Interest-only, Amortizing Balloon | 3rd Most Recent NOI (As of): | $2,960,269 (12/31/2012) | ||||
Interest Accrual Method: | Actual/360 | 2nd Most Recent NOI (As of): | $2,725,912 (12/31/2013) | ||||
Call Protection: | L(25),D(91),O(4) | Most Recent NOI (As of)(2): | $2,820,280 (12/31/2014) | ||||
Lockbox Type: | Hard/Springing Cash Management | ||||||
Additional Debt: | None | ||||||
Additional Debt Type: | NAP | ||||||
U/W Revenues: | $4,250,049 | ||||||
U/W Expenses: | $1,743,501 | ||||||
U/W NOI(2): | $2,506,548 | ||||||
U/W NCF: | $2,327,417 | ||||||
Escrows and Reserves(1): | U/W NOI DSCR: | 1.70x | |||||
U/W NCF DSCR: | 1.57x | ||||||
Type: | Initial | Monthly | Cap (If Any) | U/W NOI Debt Yield: | 9.8% | ||
Taxes | $319,454 | $63,891 | NAP | U/W NCF Debt Yield: | 9.1% | ||
Insurance | $74,310 | $6,193 | NAP | As-Is Appraised Value: | $35,370,000 | ||
Replacement Reserves | $4,287 | $4,287 | $100,000 | As-Is Appraisal Valuation Date: | February 11, 2015 | ||
TI/LC Reserve | $10,717 | $10,717 | $200,000 | Cut-off Date LTV Ratio: | 72.1% | ||
Special Rollover Reserve | NAP | Springing | NAP | LTV Ratio at Maturity or ARD: | 65.5% |
(1) | See “Escrows” section. |
(2) | See “Cash Flow Analysis” section. |
The Mortgage Loan. The mortgage loan (the “Olmsted Plaza Shopping Center Mortgage Loan”) is evidenced by a single promissory note that is secured by a first mortgage encumbering the fee interest in an anchored retail property located in North Olmsted, Ohio (the “Olmsted Plaza Shopping Center Property”). The Olmsted Plaza Shopping Center Mortgage Loan was originated on April 7, 2015 by Silverpeak Real Estate Finance LLC. The Olmsted Plaza Shopping Center Mortgage Loan had an original principal balance of $25,500,000, has an outstanding principal balance as of the Cut-off Date of $25,500,000 and accrues interest at an interest rate of 4.100%per annum. The Olmsted Plaza Shopping Center Mortgage Loan had an initial term of 120 months, has a remaining term of 119 months as of the Cut-off Date and requires interest-only payments for the first 60 payments following origination and, thereafter, requires payments of principal and interest based on a 30-year amortization schedule. The Olmsted Plaza Shopping Center Mortgage Loan matures on May 6, 2025.
Following the lockout period, the borrower has the right to defease the Olmsted Plaza Shopping Center Mortgage Loan in whole, but not in part, on any date before February 6, 2025. In addition, the Olmsted Plaza Shopping Center Mortgage Loan is prepayable without penalty on or after February 6, 2025.
A-3-76 |
OLMSTED PLAZA SHOPPING CENTER |
Sources and Uses
Sources | Uses | |||||||||
Original loan amount | $25,500,000 | 98.0 | % | Loan payoff(1) | $25,118,692 | 96.5 | % | |||
Sponsors’ new cash contribution | 516,315 | 2.0 | Reserves | 408,768 | 1.6 | |||||
Closing costs | 488,855 | 1.9 | ||||||||
Total Sources | $26,016,315 | 100.0 | % | Total Uses | $26,016,315 | 100.0 | % |
(1) | The Olmsted Plaza Shopping Center Property was previously securitized in the MLMT 2005-CIP1 transaction. |
The Property. The Olmsted Plaza Shopping Center Property is an anchored retail property comprising approximately 255,902 square feet of rentable area within nine one-story buildings located in North Olmsted, Ohio, approximately 15.9 miles southwest of Cleveland, Ohio. Built in 1969, the Olmsted Plaza Shopping Center Property is located on Great Northern Boulevard, bounded by Brookpark Road to the south and Lorain Road to the north. The Olmsted Plaza Shopping Center Property is anchored by Value City Furniture, Aldi, and hhgregg and other tenants include PNC Bank, FedEx, Sherwin-Williams, H&R Block and Wells Fargo. The Olmsted Plaza Shopping Center Property contains 1,030 parking spaces, resulting in a parking ratio of 4.0 spaces per 1,000 square feet of rentable area. As of April 6, 2015, the Olmsted Plaza Shopping Center Property was 93.6% occupied by 30 tenants.
The following table presents certain information relating to the tenancy at the Olmsted Plaza Shopping Center Property:
Major Tenants
Tenant Name | Credit Rating (Fitch/Moody’s/ S&P) (1) | Tenant NRSF | % of NRSF | Annual U/W Base Rent PSF(2) | Annual U/W Base Rent(2) | % of Total Annual U/W Base Rent | Sales PSF(3) | Occupancy Costs(3) | Lease Expiration Date | ||||||||||||
Major Tenants | |||||||||||||||||||||
Value City Furniture(4) | NR/NR/NR | 50,290 | 19.7% | $11.50 | $578,335 | 19.4% | NAV | NAV | 1/31/2026(5) | ||||||||||||
hhgregg | NR/NR/NR | 31,800 | 12.4% | $10.66 | $338,988 | 11.4% | NAV | NAV | 8/1/2021(6) | ||||||||||||
Harbor Freight and Tools | NR/Ba3/BB- | 16,000 | 6.3% | $10.75 | $172,000 | 5.8% | NAV | NAV | 10/31/2023 | ||||||||||||
Aldi | NR/NR/NR | 16,785 | 6.6% | $10.13 | $170,000 | 5.7% | NAV | NAV | 9/30/2024(7) | ||||||||||||
Cort Furniture Rental | NR/NR/NR | 10,737 | 4.2% | $12.55 | $134,799 | 4.5% | NAV | NAV | 1/31/2016(8) | ||||||||||||
Total Major Tenants | 125,612 | 49.1% | $11.10 | $1,394,122 | 46.8% | ||||||||||||||||
Non-Major Tenants | 113,832 | 44.5% | $13.94 | $1,586,965 | 53.2% | ||||||||||||||||
Occupied Collateral Total | 239,444 | 93.6% | $12.45 | $2,981,087 | 100.0% | ||||||||||||||||
Vacant Space | 16,458 | 6.4% | |||||||||||||||||||
Collateral Total | 255,902 | 100.0% | |||||||||||||||||||
(1) | Certain ratings are those of the parent company whether or not the parent company guarantees the lease. |
(2) | Annual U/W Base Rent PSF and Annual U/W Base Rent include contractual rent steps through May 2016 totaling $10,509. |
(3) | Tenants are not required to report sales figures under their respective leases. |
(4) | Value City Furniture subleases its space from Dick’s Sporting Goods under a lease that expires in January 2016. Value City Furniture has occupied the former Dick’s Sporting Goods space since August 2005. Value City Furniture has executed a 10-year direct lease which will commence in February 2016. Value City Furniture’s direct lease was included in the underwriting of the Olmsted Shopping Center Mortgage Loan. The current rent under the Dick’s Sporting Goods lease is $12.50 per square foot. |
(5) | Value City Furniture has two, 5-year lease renewal options. |
(6) | hhgregg has two, 5-year lease renewal options. |
(7) | Aldi has three, 5-year lease renewal options. |
(8) | Cort Furniture Rental has one, 5-year lease renewal option. |
A-3-77 |
OLMSTED PLAZA SHOPPING CENTER |
The following table presents certain information relating to the lease rollover schedule at the Olmsted Plaza Shopping Center Property:
Lease Expiration Schedule(1)(2)
Year Ending December 31, | No. of Leases Expiring | Expiring NRSF | % of Total NRSF | Cumulative Expiring NRSF | Cumulative % of Total NRSF | Annual U/W Base Rent | Annual U/W Base Rent PSF(3) | ||||||||||||
MTM | 3 | 10,110 | 4.0% | 10,110 | 4.0% | $74,400 | $7.36 | ||||||||||||
2015 | 2 | 3,302 | 1.3% | 13,412 | 5.2% | $41,958 | $12.71 | ||||||||||||
2016 | 5 | 20,827 | 8.1% | 34,239 | 13.4% | $284,595 | $13.66 | ||||||||||||
2017 | 2 | 7,430 | 2.9% | 41,669 | 16.3% | $114,000 | $15.34 | ||||||||||||
2018 | 4 | 29,012 | 11.3% | 70,681 | 27.6% | $398,460 | $13.73 | ||||||||||||
2019 | 2 | 9,200 | 3.6% | 79,881 | 31.2% | $124,200 | $13.50 | ||||||||||||
2020 | 4 | 14,486 | 5.7% | 94,367 | 36.9% | $247,476 | $17.08 | ||||||||||||
2021 | 3 | 43,300 | 16.9% | 137,667 | 53.8% | $530,788 | $12.26 | ||||||||||||
2022 | 2 | 18,702 | 7.3% | 156,369 | 61.1% | $244,875 | $13.09 | ||||||||||||
2023 | 1 | 16,000 | 6.3% | 172,369 | 67.4% | $172,000 | $10.75 | ||||||||||||
2024 | 1 | 16,785 | 6.6% | 189,154 | 73.9% | $170,000 | $10.13 | ||||||||||||
2025 | 0 | 0 | 0.0% | 189,154 | 73.9% | $0 | $0.00 | ||||||||||||
Thereafter | 1 | 50,290 | 19.7% | 239,444 | 93.6% | $578,335 | $11.50 | ||||||||||||
Vacant | 4 | 16,458 | 6.4% | 255,902 | 100.0% | $0 | $0.00 | ||||||||||||
Total/Weighted Average | 34 | 255,902 | 100.0% | $2,981,087 | $12.45 |
(1) | Information obtained from the underwritten rent roll. |
(2) | Certain tenants may have lease termination options that are exercisable prior to the originally stated expiration date of the subject lease and that are not considered in the Lease Expiration Schedule. |
(3) | The Annual U/W Base Rent PSF and Total/Weighted Average Annual U/W Base Rent PSF exclude vacant space. |
The following table presents historical occupancy percentages at the Olmsted Plaza Shopping Center Property:
Historical Occupancy
12/31/2012(1) | 12/31/2013(1) | 12/31/2014(1) | 4/6/2015(2) | |||
98.0% | 100.0% | 100.0% | 93.6% |
(1) | Information obtained from the borrower. |
(2) | Information obtained from the underwritten rent roll. |
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OLMSTED PLAZA SHOPPING CENTER |
Operating History and Underwritten Net Cash Flow. The following table presents certain information relating to the historical operating performance and the underwritten net cash flow at the Olmsted Plaza Shopping Center Property:
Cash Flow Analysis
2012 | 2013 | 2014(1) | U/W(1) | % of U/W Effective Gross Income | U/W $ per SF | ||||||||
Base Rent | $3,204,276 | $3,351,408 | $3,364,665 | $2,981,087(2) | 70.1% | $11.65 | |||||||
Grossed Up Vacant Space | 0 | 0 | 0 | 246,328 | 5.8 | 0.96 | |||||||
Total Reimbursables | 1,174,571 | 847,438 | 1,393,022 | 1,268,962 | 29.9 | 4.96 | |||||||
Less Vacancy & Credit Loss | 0 | 0 | 0 | (246,328)(3) | (5.8) | (0.96) | |||||||
Effective Gross Income | $4,378,847 | $4,198,846 | $4,757,687 | $4,250,049 | 100.0% | $16.61 | |||||||
Total Operating Expenses | $1,418,578 | $1,472,934 | $1,937,407 | $1,743,501 | 41.0% | $6.81 | |||||||
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Net Operating Income | $2,960,269 | $2,725,912 | $2,820,280 | $2,506,548 | 59.0% | $9.79 | |||||||
TI/LC | 0 | 0 | 0 | 127,951 | 3.0 | 0.50 | |||||||
Reserves for Replacements | 0 | 0 | 0 | 51,180 | 1.2 | 0.20 | |||||||
Net Cash Flow | $2,960,269 | $2,725,912 | $2,820,280 | $2,327,417 | 54.8% | $9.09 | |||||||
NOI DSCR | 2.00x | 1.84x | 1.91x | 1.70x | |||||||||
NCF DSCR | 2.00x | 1.84x | 1.91x | 1.57x | |||||||||
NOI DY | 11.6% | 10.7% | 11.1% | 9.8% | |||||||||
NCF DY | 11.6% | 10.7% | 11.1% | 9.1% |
(1) | The decrease in NOI from 2014 to U/W is due to a tenant vacating 13,058 square feet (5.1% of net rentable area). |
(2) | Base Rent includes contractual rent steps through May 2016 totaling $10,509. |
(3) | The U/W economic vacancy is 5.5%. The Olmsted Plaza Shopping Center Property was 93.6% physically occupied as of April 6, 2015. |
Appraisal.As of the appraisal valuation date of February 11, 2015, the Olmsted Plaza Shopping Center Property had an “as-is” appraised value of $35,370,000.
Environmental Matters.According to the Phase I environmental site assessment dated February 19, 2015, there was no evidence of any recognized environmental conditions at the Olmsted Plaza Shopping Center Property.
Market Overview and Competition.The Olmsted Plaza Shopping Center Property is located within the Cleveland, Ohio metropolitan statistical area. Cleveland is the 28th most populous metropolitan area in the United States and the largest metropolitan area entirely in Ohio, accounting for 17.8% of the state’s population. Unemployment has declined in the metropolitan statistical area from 8.9% in 2010 to 6.0% in 2014. The largest employers in the market are the Cleveland Clinic, US Office of Personnel Management, University Hospitals, Giant Eagle, and Progressive Corporation.
The Olmsted Plaza Shopping Center Property is located within the Cleveland retail market's West retail submarket, approximately 16 miles southwest of the Cleveland central business district. The Great Northern Mall, a super-regional mall owned by an affiliate of Starwood Capital Group Global, L.P. and anchored by Dillard’s, Macy’s, JCPenney, Sears, Dick’s Sporting Goods and a 10-screen Regal Cinemas & RPX, is located along Great Northern Boulevard across from the Olmsted Plaza Shopping Center Property. The 2014 estimated population within a three- and five- mile radii of the Olmsted Plaza Shopping Center Property was approximately 63,467 and 178,407, respectively, and the median household income within the same three- and five-mile radii was approximately $58,373 and $58,008, respectively.
According to the appraisal, as of year-end 2014 there were no new projects under construction within the West retail submarket and the existing supply consisted of approximately 16.7 million square feet. From 2011 to 2014, vacancy in the West retail market has decreased from 6.3% to 5.1%.
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OLMSTED PLAZA SHOPPING CENTER |
The following table presents certain information relating to some comparable retail properties for the Olmsted Plaza Shopping Center Property:
Competitive Set(1)
Olmsted Plaza Shopping Center (Subject) | Berea Plaza | Water Tower Square | Plazas at Great Northern | Village Square | ||||||
Location | North Olmsted, OH | Berea, OH | North Olmsted, OH | North Olmsted, OH | Woodmere, OH | |||||
Distance from Subject | 3.8 miles | 1.2 miles | 0.7 mile | 21.8 miles | ||||||
Property Type | Shopping Center | Shopping Center | Shopping Center | Shopping Center | Shopping Center | |||||
Year Built | 1969 | 1994 | 1995 | 1986 | 1960 | |||||
Anchors | Value City Furniture, hhgregg, Aldi | Jax Big Discount | Volunteer of America | Big Lots | DXL | |||||
Total GLA | 255,902(2) SF | 100,000 SF | 182,861 SF | 632,309 SF | 110,000 SF | |||||
Total Occupancy | 94% | 100% | 73% | 98% | 100% |
(1) | Information obtained from the appraisal. |
(2) | Information obtained from the underwritten rent roll. |
The Borrower.The borrower is B & G Properties Limited Partnership, an Ohio limited partnership and single purpose entity with one independent director. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Olmsted Plaza Shopping Center Mortgage Loan. Jeffrey Glazer and Marshall Brown are the guarantors of certain nonrecourse carveouts under the Olmsted Plaza Shopping Center Mortgage Loan.
The Sponsor.The sponsor is B & G Properties LP, an entity controlled by Jeffrey Glazer and Marshall Brown. Mr. Glazer and Mr. Brown have been actively engaged in real estate investment, development and management activities since 1974. The sponsor developed the Olmsted Plaza Shopping Center Property in 1969 and has owned, managed and operated the property since that time.
Escrows.The loan documents provide for upfront escrows in the amount of $319,454 for taxes, $74,310 for insurance, $4,287 for replacement reserves and $10,717 for tenant improvements and leasing commissions (“TI/LCs”). The loan documents provide for ongoing monthly escrows of $63,891 for taxes, $6,193 for insurance, $4,287 for replacement reserves (subject to a cap of $100,000) and $10,717 for TI/LCs (subject to a cap of $200,000). Additionally, during a Lease Sweep Period (as defined below), all excess cash will be deposited into the special rollover reserve.
Lockbox and Cash Management.The Olmsted Plaza Shopping Center Mortgage Loan requires a lender-controlled lockbox account, which is already in place, and that the borrowers direct tenants to pay their rents directly into such lockbox account. The loan documents also require that all cash revenues and all other monies received by the borrower or the property manager be deposited into the lockbox account within one business day after receipt. Prior to the occurrence of a Cash Management Period (as defined below), all funds on deposit in the lockbox account will be disbursed to the borrower daily. During a Cash Management Period, funds are swept into a lender controlled cash management account.
A “Cash Management Period” will commence upon the occurrence of any of the following (i) the occurrence of an event of default; (ii) the amortizing debt service coverage ratio being less than 1.20x at the end of any calendar quarter; or (iii) the commencement of a Lease Sweep Period (as defined below). A Cash Management Period will be cured with regard to clause (i) when such event of default has been cured and no other default or event of default has occurred and is continuing; with regard to clause (ii) when the amortizing debt service coverage ratio is greater than or equal to 1.20x for two consecutive calendar quarters; and with regard to clause (iii), upon the termination of the Lease Sweep Period.
A “Lease Sweep Period” will commence upon the earlier of: (i) the date which is 12 months prior to the expiration of any Major Lease (Value City Furniture’s Lease and any other lease aggregating 40,000 or more square feet at the Olmsted Plaza Shopping Center Property), including any renewal terms; (ii) the date which any tenant under a Major Lease (a “Major Tenant”) is required to give notice of its exercise of a renewal option thereunder (and such renewal has not been exercised); (iii) any Major Lease (or material portion thereof) is surrendered, cancelled or terminated prior to its then-current expiration date; (iv) any Major Tenant discontinues its business at the premises (“goes dark”) or gives notice that it intends to discontinue its business; (v) the occurrence of a default (beyond any applicable notice and cure periods) under any Major Lease; or (vi) upon the occurrence of an insolvency proceeding by a Major Tenant.
A Lease Sweep Period will end upon the occurrence of, among other things, any of the following: with respect to clauses (i), (ii), (iii), or (iv), the earlier to occur of (A) the date on which the applicable Major Tenant exercises its renewal or extension option and sufficient funds have accumulated in the special rollover reserve to pay for all anticipated leasing expenses, or (B) the date on which all the space demised under the applicable Major Lease has been fully leased pursuant to a replacement lease and all leasing expenses have been paid in full; with respect to clause (v), the default being cured and no other Major Tenant default occurring for a period of three consecutive months following such cure; with respect to clause (vi), the applicable insolvency proceeding being terminated and the applicable Major Lease being affirmed, assumed or assigned; and with respect to clauses (i), (ii), (iii), (iv), (v) and (vi), the determination by the lender that an amount equal to $20.00 per square foot of the space demised under the applicable Major Lease has been deposited into the special rollover reserve (provided, however, that to the extent that the borrower shall lease a portion of the space demised under the applicable Major Lease to a replacement tenant or tenants approved by the lender, then such $20.00 per square foot amount will be decreased so that it applies only to the space that remains after taking into account such replacement lease or leases).
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OLMSTED PLAZA SHOPPING CENTER |
Property Management.The Olmsted Plaza Shopping Center Property is managed by an affiliate of the borrower.
Assumption.The borrower has the right to transfer the Olmsted Plaza Shopping Center Property, provided that certain conditions are satisfied, including (i) no default or event of default has occurred and is continuing; (ii) the borrower has provided the lender with not less than forty-five days’ prior written notice; (iii) the lender reasonably determines that the proposed transferee and guarantor satisfy the lender's credit review and underwriting standards, taking into consideration transferee’s experience, financial condition and creditworthiness; and (iv) the lender has received confirmation from Fitch, KBRA, and Moody’s that such assumption will not result in a downgrade, withdrawal or qualification of the respective ratings assigned to the Series 2015-C29 Certificates.
Partial Release.Not permitted.
Real Estate Substitution.Not permitted.
Subordinate and Mezzanine Indebtedness.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 (or such policies shall have no exclusion from coverage with respect thereto) in an amount equal to the full replacement cost of the Olmsted Plaza Shopping Center 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 6-month extended period of indemnity.
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HALL OFFICE PARK |
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HALL OFFICE PARK |
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HALL OFFICE PARK |
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A-3-85 |
No. 10 – Hall Office Park | ||||||||
Loan Information | Property Information | |||||||
Mortgage Loan Seller: | Wells Fargo Bank, National Association | Single Asset/Portfolio: | Single Asset | |||||
Credit Assessment (Fitch/KBRA/Moody’s): | NR/NR/NR | Property Type: | Office | |||||
Original Principal Balance: | $25,500,000 | Specific Property Type: | Suburban | |||||
Cut-off Date Principal Balance: | $25,500,000 | Location: | Frisco, TX | |||||
% of Initial Pool Balance: | 2.2% | Size: | 142,761 SF | |||||
Loan Purpose: | Refinance | Cut-off Date Principal Balance Per SF: | $178.62 | |||||
Borrower Name: | Hall 2601 Network Associates, Ltd. | Year Built/Renovated: | 2000/NAP | |||||
Sponsor: | Craig Hall | Title Vesting: | Fee | |||||
Mortgage Rate: | 4.200% | Property Manager: | Self-managed | |||||
Note Date: | May 29, 2015 | 3rd Most Recent Occupancy (As of): | 88.0% (12/31/2012) | |||||
Anticipated Repayment Date: | NAP | 2nd Most Recent Occupancy (As of): | 94.0% (12/31/2013) | |||||
Maturity Date: | June 11, 2025 | Most Recent Occupancy (As of): | 96.0% (12/31/2014) | |||||
IO Period: | 12 months | Current Occupancy (As of): | 93.3% (4/1/2015) | |||||
Loan Term (Original): | 120 months | |||||||
Seasoning: | 0 months | Underwriting and Financial Information: | ||||||
Amortization Term (Original): | 360 months | |||||||
Loan Amortization Type: | Interest-only, Amortizing Balloon | 3rd Most Recent NOI (As of): | $1,373,368 (12/31/2012) | |||||
Interest Accrual Method: | Actual/360 | 2nd Most Recent NOI (As of)(2): | $1,715,514 (12/31/2013) | |||||
Call Protection: | L(24),D(92),O(4) | Most Recent NOI (As of)(2): | $2,021,589 (12/31/2014) | |||||
Lockbox Type: | Soft/Springing Cash Management | |||||||
Additional Debt: | None | |||||||
Additional Debt Type: | NAP | U/W Revenues: | $3,845,173 | |||||
U/W Expenses: | $1,611,150 | |||||||
U/W NOI(2): | $2,234,023 | |||||||
U/W NCF: | $2,025,519 | |||||||
U/W NOI DSCR: | 1.49x | |||||||
Escrows and Reserves(1): | U/W NCF DSCR: | 1.35x | ||||||
U/W NOI Debt Yield: | 8.8% | |||||||
Type: | Initial | Monthly | Cap (If Any) | U/W NCF Debt Yield: | 7.9% | |||
Taxes | $328,830 | $54,805 | NAP | As-Is Appraised Value: | $34,600,000 | |||
Insurance | $0 | Springing | NAP | As-Is Appraisal Valuation Date: | March 20, 2015 | |||
Replacement Reserves | $0 | $2,379 | NAP | Cut-off Date LTV Ratio: | 73.7% | |||
TI/LC Reserve | $500,000 | $14,871 | (1) | LTV Ratio at Maturity or ARD: | 60.7% | |||
(1) | See “Escrows” section. |
(2) | See “Cash Flow Analysis” section. |
The Mortgage Loan.The mortgage loan (the “Hall Office Park Mortgage Loan”) is evidenced by a single promissory note that is secured by a first mortgage encumbering the fee interest in an office building located in Frisco, Texas (the “Hall Office Park Property”). The Hall Office Park Mortgage Loan was originated on May 29, 2015 by Wells Fargo Bank, National Association. The Hall Office Park Mortgage Loan had an original principal balance of $25,500,000, has an outstanding principal balance as of the Cut-off Date of $25,500,000 and accrues interest at an interest rate of 4.200%per annum. The Hall Office Park Mortgage Loan had an initial term of 120 months, has a remaining term of 120 months as of the Cut-off Date and requires interest-only payments for the first 12 payments following origination and, thereafter, requires payments of principal and interest based on a 30-year amortization schedule. The Hall Office Park Mortgage Loan matures on June 11, 2025.
Following the lockout period, the borrower has the right to defease the Hall Office Park Mortgage Loan in whole, but not in part, on any date before March 11, 2025. In addition, the Hall Office Park Mortgage Loan is prepayable without penalty on or after March 11, 2025.
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HALL OFFICE PARK |
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Sources and Uses
Sources | Uses | |||||||
Original loan amount | $25,500,000 | 100.0% | Loan payoff | $14,360,000 | 56.3% | |||
Reserves | 828,830 | 3.3 | ||||||
Closing costs | 218,252 | 0.9 | ||||||
Return of equity | 10,092,918 | 39.6 | ||||||
Total Sources | $25,500,000 | 100.0% | Total Uses | $25,500,000 | 100.0% |
The Property.The Hall Office Park Property is a six-story, class A mid-rise office building totaling 142,761 square feet of rentable area and located in Frisco, Texas, approximately 24.0 miles north of the Dallas central business district. Built in 2000, the Hall Office Park Property is situated on a 7.5-acre parcelwithin the Hall Office Park complex, a 162-acre development with 16 class A and B office buildings totaling approximately 2.2 million square feet. The Hall Office Park complex offers amenities including a YMCA fitness center, on-site car detailing, personal care services, errand-running, grocery delivery, laundry pickup and an on-site masseuse. The Hall Office Park Property features double glass entry doors on the east and west sides of the building, which open into a two-story atrium lobby featuring artwork by well-known artists. The grounds of the Hall Office Park Property comprise a central courtyard and a water feature on the east end of the site. The Hall Office Park Property comprises 571 surface and garage parking spaces, resulting in a parking ratio of 4.0 spaces per 1,000 square feet of rentable area. The Hall Office Park Property has averaged an approximate 94.0% occupancy rate since its initial lease-up in 2005. As of April 1, 2015 the Hall Office Park Property was 93.3% occupied by 24 tenants.
The following table presents certain information relating to the tenancy at the Hall Office Park Property:
Major Tenants
Tenant Name | Credit Rating (Fitch/ Moody’s/ S&P)(1) | Tenant NRSF | % of NRSF | Annual U/W Base Rent PSF(2) | Annual U/W Base Rent(2) | % of Total Annual U/W Base Rent | Lease Expiration Date |
Major Tenants | |||||||
FiServ Solutions, Inc. | NR/Baa2/BBB | 49,792 | 34.9% | $26.47(3) | $1,317,994(3) | 38.4% | 4/30/2019 |
Levi Strauss & Co. | BB-/Ba1/BB | 17,457 | 12.2% | $25.00 | $436,425 | 12.7% | 3/31/2017 |
Century Payments | NR/NR/NR | 14,463 | 10.1% | $24.00 | $347,112 | 10.1% | 4/1/2018(4) |
Subaru of America | NR/NR/NR | 7,441 | 5.2% | $27.50 | $204,628 | 6.0% | 10/31/2018 |
Harness Dickey | NR/NR/NR | 6,891 | 4.8% | $27.50 | $189,503 | 5.5% | 4/30/2018 |
Total Major Tenants | 96,044 | 67.3% | $25.98 | $2,495,662 | 72.6% | ||
Non-Major Tenants(5) | 37,127 | 26.0% | $25.33 | $940,485 | 27.4% | ||
Occupied Collateral Total | 133,171 | 93.3% | $25.80 | $3,436,147 | 100.0% | ||
Vacant Space | 9,590 | 6.7% | |||||
Collateral Total | 142,761 | 100.0% | |||||
(1) | Certain ratings are those of the parent company whether or not the parent company guarantees the lease. |
(2) | Annual U/W Base Rent PSF and Annual U/W Base Rent include contractual rent steps through May 2016 totaling $71,684. |
(3) | The Annual U/W Base Rent PSF and Annual U/W Base Rent for FiServ Solutions, Inc. (“FiServ”) represent the tenant’s average contractual rental rate over the remaining lease term. FiServ’s current in-place rental rate is $25.00 per square foot. |
(4) | Century Payments has the right to terminate its lease on April 30, 2017 with notice provided by July 31, 2016 and payment of a termination fee equal to two months’ base rent plus unamortized tenant improvement costs and leasing commissions. |
(5) | Includes maintenance and conference room space totaling 1,431 square feet, which has no lease or Annual U/W Base Rent. |
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HALL OFFICE PARK |
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The following table presents certain information relating to the lease rollover schedule at the Hall Office Park Property:
Lease Expiration Schedule(1)(2)
Year Ending December 31, | No. of Leases Expiring | Expiring NRSF | % of Total NRSF | Cumulative Expiring NRSF | Cumulative % of Total NRSF | Annual U/W Base Rent | Annual U/W Base Rent PSF(3) |
MTM | 0 | 0 | 0.0% | 0 | 0.0% | $0 | $0.00 |
2015 | 2 | 2,266 | 1.6% | 2,266 | 1.6% | $56,982 | $25.15 |
2016 | 6 | 7,695 | 5.4% | 9,961 | 7.0% | $200,228 | $26.02 |
2017 | 9 | 39,353 | 27.6% | 49,314 | 34.5% | $1,013,062 | $25.74 |
2018 | 6 | 31,528 | 22.1% | 80,842 | 56.6% | $816,360 | $25.89 |
2019 | 2 | 49,792 | 34.9% | 130,634 | 91.5% | $1,317,994 | $26.47 |
2020 | 1 | 1,106 | 0.8% | 131,740 | 92.3% | $31,521 | $28.50 |
2021 | 0 | 0 | 0.0% | 131,740 | 92.3% | $0 | $0.00 |
2022 | 0 | 0 | 0.0% | 131,740 | 92.3% | $0 | $0.00 |
2023 | 0 | 0 | 0.0% | 131,740 | 92.3% | $0 | $0.00 |
2024 | 0 | 0 | 0.0% | 131,740 | 92.3% | $0 | $0.00 |
2025 | 0 | 0 | 0.0% | 131,740 | 92.3% | $0 | $0.00 |
Thereafter(4) | 2 | 1,431 | 1.0% | 133,171 | 93.3% | $0 | $0.00 |
Vacant | 0 | 9,590 | 6.7% | 142,761 | 100.0% | $0 | $0.00 |
Total/Weighted Average | 28 | 142,761 | 100.0% | $3,436,147 | $25.80 |
(1) | Information obtained from the underwritten rent roll. |
(2) | Certain tenants may have lease termination options that are exercisable prior to the originally stated expiration date of the subject lease and that are not considered in the Lease Expiration Schedule. |
(3) | Weighted Average Annual U/W Base Rent PSF excludes vacant space. |
(4) | Represents maintenance and conference room space, which has no lease or Annual U/W Base Rent. |
The following table presents historical occupancy percentages at the Hall Office Park Property:
Historical Occupancy
12/31/2012(1) | 12/31/2013(1) | 12/31/2014(1) | 4/1/2015(2) |
88.0% | 94.0% | 96.0% | 93.3% |
(1) | Information obtained from the borrower. |
(2) | Information obtained from the underwritten rent roll. |
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HALL OFFICE PARK |
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Operating History and Underwritten Net Cash Flow. The following table presents certain information relating to the historical operating performance and the underwritten net cash flow at the Hall Office Park Property:
Cash Flow Analysis
2012 | 2013 | 2014 | U/W | % of U/W Effective Gross Income | U/W $ per SF | ||||||||||||
Base Rent | $2,504,156 | $2,865,528 | $3,202,601 | $3,436,147 | 89.4 | % | $24.07 | ||||||||||
Grossed Up Vacant Space | 0 | 0 | 0 | 263,725 | 6.9 | 1.85 | |||||||||||
Total Reimbursables | 232,176 | 287,149 | 371,826 | 371,826 | 9.7 | 2.60 | |||||||||||
Other Income | 12,843 | 19,878 | 32,349 | 37,200 | 1.0 | 0.26 | |||||||||||
Less Vacancy & Credit Loss | 0 | 0 | 0 | (263,725)(1) | (6.9 | ) | (1.85) | ||||||||||
Effective Gross Income | $2,749,175 | $3,172,555 | $3,606,776 | $3,845,173 | 100.0 | % | $26.93 | ||||||||||
Total Operating Expenses | $1,375,807 | $1,457,041 | $1,585,187 | $1,611,150 | 41.9 | % | $11.29 | ||||||||||
Net Operating Income | $1,373,368 | $1,715,514(2) | $2,021,589(3) | $2,234,023(4) | 58.1 | % | $15.65 | ||||||||||
TI/LC | 0 | 0 | 0 | 179,952 | 4.7 | 1.26 | |||||||||||
Capital Expenditures | 0 | 0 | 0 | 28,552 | 0.7 | 0.20 | |||||||||||
Net Cash Flow | $1,373,368 | $1,715,514 | $2,021,589 | $2,025,519 | 52.7 | % | $14.19 | ||||||||||
NOI DSCR | 0.92x | 1.15x | 1.35x | 1.49x | |||||||||||||
NCF DSCR | 0.92x | 1.15x | 1.35x | 1.35x | |||||||||||||
NOI DY | 5.4% | 6.7% | 7.9% | 8.8% | |||||||||||||
NCF DY | 5.4% | 6.7% | 7.9% | 7.9% |
(1) | The underwritten economic vacancy is 7.1%. The Hall Office Park Property was 93.3% physically occupied as of April 1, 2015. |
(2) | Net Operating Income increased from 2012 to 2013 due to the signing of six new leases from July 2012 through March 2013, accounting for 10.6% of the net rentable and totaling $393,292 of underwritten base rent. |
(3) | Net Operating Income increased from 2013 to 2014 due to the signing of seven new leases from September 2013 through October 2014, accounting for 13.2% of the net rentable area and totaling $517,613 of underwritten base rent. |
(4) | U/W Net Operating Income is higher than 2014 due to the underwriting of contractual rent steps through May 2016 totaling $71,684 and rent averaging for FiServ (see “Major Tenants” above). |
Appraisal. As of the appraisal valuation date of March 20, 2015, the Hall Office Park Property had an “as-is” appraised value of $34,600,000.
Environmental Matters. According to a Phase I environmental site assessment dated April 8, 2015, there was no evidence of any recognized environmental conditions at the Hall Office Park Property.
Market Overview and Competition.The Hall Office Park Property is located in Frisco, Texas, just west of the Dallas North Tollway, and within the Hall Office Park complex. Frisco is located in the far northern suburban sector of the Dallas metropolitan area, just north of Plano and approximately 24.0 miles north of the Dallas central business district. The Dallas Cowboys announced they are moving their headquarters to Frisco, after gaining approval to develop a $350.0 million mixed-use facility known as “The Star”. The planned Cowboys development is expected to create 4,500 new jobs by 2026. In addition, Toyota will be making the area its North American headquarters and will relocate approximately 4,000 employees from Torrance, California. Over the next two years, Toyota is expected to build a 1.3 million-square-foot facility in Plano. Primary regional access to the surrounding area is provided by State Highway 121 (a major transportation link between the growing Collin County cities of Allen, McKinney and Plano to the east/south and DFW International Airport to the west) and the Dallas North Tollway (one of the most heavily traveled tollways in the area, providing access to the Dallas central business district to the south and growing suburban locales to the north). According to the appraisal, as of 2014, the estimated population within a three- and five-mile radius of the Hall Office Park Property was 81,229 and 245,207, respectively, and the average household income within the same radii was $111,927 and $118,664, respectively.
According to a third-party market research report, the Hall Office Park Property is situated within the Frisco/The Colony submarket of the Dallas office market. As of the first quarter of 2015, the submarket reported an inventory of 215 office properties totaling approximately 5.7 million square feet with a 14.2% vacancy rate and average asking rent of $27.86 per square foot, modified gross.
The appraiser’s competitive set comprised the 16 class A and B office buildings within the Hall Office Park complex. The competitive properties were built between 1997 and 2014 (average year built of 2004); contain between 90,000 and 200,000 square feet of rentable area (average size of 135,421 square feet); reported occupancy rates ranging from 20.0% (new building in lease-up) to 100.0% (average occupancy rate of 85.0%); and had asking rents ranging from $25.00 to $32.00 per square foot, plus electric (average asking rent of $26.95 per square foot, plus electric). Excluding one property from the competitive set, which was built on a speculative basis in 2014 and reported a 20.0% occupancy rate, the average occupancy rate is 92.0%.
A-3-89 |
HALL OFFICE PARK |
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Competitive Set(1)
Hall Office Park (Subject) | 2591 Dallas Pky | 2595 N Dallas Pky | 6801 Gaylord Pky | 2600 Network Blvd | 2801 Network Blvd | 3000 Internet Blvd | |
Location | Frisco, TX | Frisco, TX | Frisco, TX | Frisco, TX | Frisco, TX | Frisco, TX | Frisco, TX |
Distance from Subject | -- | 0.4 miles | 0.1 miles | 0.2 miles | 0.1 miles | 0.1 miles | 0.2 miles |
Property Type | Office | Office | Office | Office | Office | Office | Office |
Year Built/Renovated | 2000/NAP | 1999/NAV | 1997/NAV | 2000/NAV | 2006/NAV | 2001/NAV | 2007/NAV |
Stories | 6 | 6 | 4 | 4 | 6 | 8 | 6 |
Total GLA | 142,761 SF | 150,000 SF | 100,000 SF | 100,000 SF | 150,000 SF | 197,717 SF | 150,000 SF |
Total Occupancy | 93% | 91% | 100% | 92% | 99% | 86% | 98% |
(1) | Information obtained from the appraisal. |
The Borrower.The borrower is Hall 2601 Network Associates, Ltd., a Texas limited partnership and single purpose entity with one independent director. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Hall Office Park Mortgage Loan. Hall Phoenix/Inwood Ltd. is the guarantor of certain nonrecourse carveouts under the Hall Office Park Mortgage Loan.
The Sponsor.The sponsor is Craig Hall, who is the chairman and founder of Hall Financial Group. Hall Financial Group was founded in 1968 and has diversified holdings including active operations in commercial real estate development, ownership and management. Since its inception, Hall Financial Group has owned and operated approximately 100,000 apartment units and more than five million square feet of office space. Hall Financial Group owns and manages the entire Hall Office Park complex, which comprises 16 class A and B office buildings occupied by tenants including Fiserv, SANYO Energy (USA) Corporation, AmerisourceBergen Specialty Group and Levi Strauss & Company. Craig Hall filed for bankruptcy in the 1980s. In addition, in 2010 and 2011, affiliated entities of Hall Financial Group were involved in four instances of loan defaults, deed-in-lieu of foreclosure proceedings and discounted payoffs. See “Description of the Mortgage Pool – Default History, Bankruptcy Issues and Other Proceedings” in the Free Writing Prospectus.
Escrows.The loan documents provide for upfront reserves in the amount of $328,830 for real estate taxes and $500,000 for tenant improvements and leasing commissions (“TI/LCs”). The loan documents require monthly deposits of $54,805 for real estate taxes, $2,379 for replacement reserves and $14,871 for TI/LCs (subject to a cap of $725,000, as long as (i) no event of default has occurred; (ii) the property maintains a physical and economic occupancy of at least 90.0%; (iii) the amortizing debt service coverage ratio is at least 1.25x; and (iv) the net cash flow debt yield is at least 7.75%). The loan documents do not require monthly escrows for insurance, provided that (a) no event of default has occurred; (b) the Hall Office Park Property is insured via an acceptable blanket insurance policy; and (c) the borrower provides the lender with evidence of renewal of the insurance policies and timely proof of payment of insurance premiums.
Lockbox and Cash Management.The Hall Office Park Mortgage Loan requires a lender-controlled lockbox account, which is already in place, and that the borrower or manager deposit all rents directly into such lockbox account. Prior to the occurrence of a Cash Trap Event Period (as defined below), all funds are distributed to the borrower. During a Cash Trap Event Period, the borrower or manager will cause all rents to be deposited directly into the lockbox account, and all funds on deposit in the lockbox account are swept to a lender-controlled cash management account.
A “Cash Trap Event Period” will commence upon the earlier of (i) the occurrence of an event of default; (ii) the amortizing debt service coverage ratio being less than 1.10x and/or the net cash flow debt yield being less than 7.0% at the end of any calendar month; or (iii) Fiserv Solutions, Inc. (“Fiserv”) (or any replacement tenant of Fiserv) (a) failing to renew its lease or providing renewal notice 12 months prior to its lease expiration date; (b) going dark, vacating or failing to occupy its space; or (c) filing for bankruptcy or being subject to a bankruptcy or insolvency proceeding. A Cash Trap Event Period will end, with regard to clause (i), upon the cure of such event of default; with regard to clause (ii), upon (x) the amortizing debt service coverage ratio being equal to or greater than 1.15x and the net cash flow debt yield being equal to or greater than 7.25%, both for three consecutive calendar months or (y) the borrower agreeing to deposit $12,544 per month into an additional leasing reserve if the Cash Trap Event Period (as a result of clause (ii) above) occurs prior to the first anniversary of the first loan payment date, otherwise the borrower agreeing to deposit $9,182 per month in an additional leasing reserve; with regard to clause (iii)(a), upon Fiserv (or any satisfactory replacement tenant of Fiserv) exercising its renewal option or otherwise extending the term of its lease on terms and conditions acceptable to the lender; with regard to clause (iii)(b), upon Fiserv (or any replacement tenant of Fiserv) resuming business operations in its space for two consecutive calendar quarters; with respect to clause (iii)(c), upon the termination of such bankruptcy or insolvency proceedings and the affirmation of the related lease; and with respect to clauses (iii)(a), (iii)(b) and (iii)(c), (1) upon the amortizing debt service coverage ratio and debt yield (both exclusive of the rent associated with Fiserv (or any satisfactory replacement tenant of Fiserv)) being equal to or greater than 1.15x and 7.25%, respectively, for three consecutive calendar months; (2) upon Fiserv’s space being leased to one or more replacement tenants satisfactory to the lender and receipt of a satisfactory tenant estoppel, with each replacement tenant paying full, unabated rent of not less than Fiserv’s rent at the time of closing of the Hall Office Park Mortgage Loan; being in occupancy and utilizing its space; and having any related tenant improvement costs and leasing commissions fully paid or reserved for or (3) the borrower depositing $75,868 monthly into an additional leasing reserve if the Cash Trap Event Period occurs prior to the first anniversary of the first loan payment date, otherwise the borrower depositing $49,848 monthly in an additional leasing reserve.
Property Management. The Hall Office Park Property is managed by an affiliate of the borrower.
A-3-90 |
HALL OFFICE PARK |
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Assumption. The borrower has the right to transfer the Hall Office Park Property, provided that certain conditions are satisfied, including (i) no event of default has occurred and is continuing; (ii) the lender has reasonably determined that the proposed transferee and guarantor satisfy the lender’s credit review and underwriting standards, taking into consideration transferee’s experience, financial strength and general business standing; and (iii) the lender has received confirmation from Fitch, KBRA and Moody’s that such assumption will not result in a downgrade, withdrawal or qualification of the respective ratings assigned to the Series 2015-C29 Certificates.
Partial Release. Not permitted.
Real Estate Substitution.Not permitted.
Subordinate and Mezzanine Indebtedness.None.
Additional Indebtedness. Hall Phoenix/Inwood Ltd. is permitted to pledge up to 49% of their indirect ownership of the borrower subject to certain conditions, including: (i) the holder of such debt is an institutional lender; (ii) the debt secured by such pledge is also secured by substantial other collateral unrelated to the borrower or the Hall Office Park Property; and (iii) the repayment of the debt secured by such pledge is not specifically tied to the Hall Office Park Property’s cash flow. See “Description of the Mortgage Pool-Subordinate and/or Other Financing” in the Free Writing Prospectus.
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 Hall Office Park Property. The loan documents also require business interruption insurance covering no less than the 12-month period following the occurrence of a casualty event, together with a six-month extended period of indemnity.
A-3-91 |
No. 11 – Dulles North Corporate Parks |
Loan Information | Property Information | ||||||
Mortgage Loan Seller: | Wells Fargo Bank, National Association | Single Asset/Portfolio: | Portfolio | ||||
Credit Assessment (Fitch/KBRA/Moody’s): | NR/NR/NR | Property Type: | Various – See Table | ||||
Original Principal Balance: | $25,000,000 | Specific Property Type: | Various – See Table | ||||
Cut-off Date Principal Balance: | $24,956,509 | Location: | Sterling, VA | ||||
% of Initial Pool Balance: | 2.1% | Size: | 159,601 SF | ||||
Loan Purpose: | Refinance | Cut-off Date Principal Balance Per SF: | $156.37 | ||||
Borrower Names: | Dulles North Office Park II Corporation; Dulles North Five, Corp. | Year Built/Renovated: | Various – See Table | ||||
Sponsor: | B. F. Saul Real Estate Investment Trust | Title Vesting: | Fee | ||||
Mortgage Rate: | 4.310% | Property Manager: | Self-managed | ||||
Note Date: | May 6, 2015 | 3rdMost Recent Occupancy (As of): | 100.0% (12/31/2012) | ||||
Anticipated Repayment Date: | NAP | 2ndMost Recent Occupancy (As of): | 100.0% (12/31/2013) | ||||
Maturity Date: | May 11, 2025 | Most Recent Occupancy (As of): | 100.0% (12/31/2014) | ||||
IO Period: | None | Current Occupancy (As of)(2): | 100.0% (Various) | ||||
Loan Term (Original): | 120 months | ||||||
Seasoning: | 1 month | Underwriting and Financial Information: | |||||
Amortization Term (Original): | 300 months | ||||||
Loan Amortization Type: | Amortizing Balloon | 3rdMost Recent NOI (As of): | $2,999,217 (12/31/2013) | ||||
Interest Accrual Method: | Actual/360 | 2ndMost Recent NOI (As of): | $3,050,129 (12/31/2014) | ||||
Call Protection: | L(25),D(91),O(4) | Most Recent NOI (As of): | $3,055,121 (TTM 1/31/2015) | ||||
Lockbox Type: | Hard/Springing Cash Management | ||||||
Additional Debt: | No | ||||||
Additional Debt Type: | NAP | U/W Revenues: | $3,603,745 | ||||
U/W Expenses: | $902,456 | ||||||
U/W NOI: | $2,701,289 | ||||||
Escrows and Reserves: | U/W NCF: | $2,449,610 | |||||
U/W NOI DSCR: | 1.65x | ||||||
Type: | Initial | Monthly | Cap (If Any) | U/W NCF DSCR: | 1.50x | ||
Taxes | $197,864 | $34,626 | NAP | U/W NOI Debt Yield: | 10.8% | ||
Insurance | $0 | Springing | NAP | U/W NCF Debt Yield: | 9.8% | ||
Replacement Reserves | $0 | $4,457 | NAP | As-Is Appraised Value: | $41,900,000 | ||
TI/LC Reserve | $0 | $12,500 | $300,000 | As-Is Appraisal Valuation Date: | Various | ||
Asurion TI/LC Reserve(1) | $381,900 | $0 | NAP | Cut-off Date LTV Ratio: | 59.6% | ||
NTT Letter of Credit | $0 | Springing | NAP | LTV Ratio at Maturity or ARD: | 43.5% | ||
(1) | Asurion TI/LC Reserve will be disbursed to the borrowers upon the satisfaction of the earlier to occur of the following conditions: (i) providing the lender with a satisfactory estoppel letter stating, among other things, that there is no tenant improvement allowance owed to Asurion under its lease, (ii) Asurion is renewing its lease at the Dulles North Corporate Parks Property, or (iii) the expiration of the current lease to Asurion. |
(2) | See “Historical Occupancy” section. |
The Dulles North Corporate Parks mortgage loan is evidenced by a single promissory note that is secured by a first mortgage encumbering the borrowers’ fee interest in a suburban office building and a data center totaling 159,601 square feet located in Sterling, Virginia (the “Dulles North Corporate Parks Property”). The Dulles North Corporate Parks Property consists of Dulles North Corporate Park 2 (the “Office Building”), a 79,210 square foot class B suburban office building; and Dulles North Corporate Park 5 (the “Data Center”), an 80,391 square foot powered-shell data center. The sponsor developed the collateral over 15 years ago for a total cost basis of approximately $13.6 million. The Office Building was developed in 1999, while the Data Center was constructed in 2000. The Office Building features 300 parking spaces, resulting in a parking ratio of 3.8 spaces per 1,000 square feet of rentable area; while the Data Center features 240 parking spaces, resulting in a parking ratio of 3.0 spaces per 1,000 square feet of rentable area. The Dulles North Corporate Parks Property is part of a larger corporate park containing three additional flex buildings, which are not part of the collateral.
The Northern Virginia data center market is the second largest data center market along the eastern seaboard after the New York metropolitan area. The Dulles North Corporate Parks Property is located in Loudoun County, which benefits from access to Dulles Airport, located approximately 4.7 miles south of the Dulles North Corporate Parks Property. Approximately 70.0% of the world’s internet traffic passes through the Loudoun County centers every day. According to the appraiser, the state of Virginia continues to pass measures to make it more attractive to data center investors, and Dominion Power continues to keep power prices near state and national lows. With immediate accessibility to the airport, the Dulles North Corporate Parks Property provides convenient access to the Washington D.C. metropolitan statistical area, its surrounding area and many parts of the eastern seaboard from Interstate 95. According to a third party market research report, in 2014 the estimated population within a one-, three- and five-mile radius of the Dulles North Corporate Parks Property was 6,540, 66,178 and 236,834, respectively, and the estimated median household income within the same radii was $112,260, $120,431 and $142,246, respectively. As of May 1, 2015 and June 1, 2015, the Dulles North Corporate Parks Property was 100.0% occupied by six tenants.
A-3-92 |
DULLES NORTH CORPORATE PARKS |
Sources and Uses
Sources | Uses | ||||||||
Original loan amount | $25,000,000 | 100.0% | Loan Payoff(1) | $12,522,879 | 50.1 | % | |||
Reserves | 579,764 | 2.3 | |||||||
Closing costs | 469,431 | 1.9 | |||||||
Return of equity | 11,427,926 | 45.7 | |||||||
Total Sources | $25,000,000 | 100.0% | Total Uses | $25,000,000 | 100.0 | % |
(1) | The Dulles North Corporate Parks Property was previously securitized in the LBUBS 2000-C4 transaction. |
The following table presents certain information relating to the Dulles North Corporate Parks Property:
Property Name – Location | Property Type/Sub- Type | Allocated Cut-off Date Principal Balance | % of Portfolio Cut-off Date Principal Balance | Occupancy | Year Built/ Renovated | Net Rentable Area (SF) | Appraised Value | Allocated Cut-off LTV | |||||||||
Dulles North Corporate Park 5 | Other/ Data Center | $14,973,905 | 60.0% | 100.0% | 2000/2006 | 80,391 | $23,700,000 | 63.2 | % | ||||||||
Dulles North Corporate Park 2 | Office/ Suburban | $9,982,604 | 40.0% | 100.0% | 1999/NAP | 79,210 | $18,200,000 | 54.8 | % | ||||||||
Total/Weighted Average | $24,956,509 | 100.0% | 100.0% | 159,601 | $41,900,000 | 59.6 | % |
The following table presents certain information relating to the tenancy at the Dulles North Corporate Parks Property:
Major Tenants
Tenant Name | Credit Rating (Fitch/Moody’s/ S&P)(1) | Tenant NRSF | % of NRSF | Annual U/W Base Rent PSF(2) | Annual U/W Base Rent(2) | % of Total Annual U/W Base Rent | Lease Expiration Date | ||||||||
Major Tenants | |||||||||||||||
NTT Worldwide Telecommunications | NR/Aa3/AA- | 80,391 | 50.4% | $19.89 | $1,598,881 | 49.7% | 2/29/2020(3) | ||||||||
US Customs and Border Protection | NR/NR/NR | 23,535 | 14.7% | $23.00 | $541,308 | 16.8% | 2/14/2017 | ||||||||
Asurion/National Electronics Warranty | NR/NR/NR | 25,460 | 16.0% | $18.45 | $469,689 | 14.6% | 7/31/2016(4) | ||||||||
1000 Sully Road, LLC(5) | NR/NR/NR | 20,056 | 12.6% | $20.38 | $408,738 | 12.7% | 5/31/2027(6) | ||||||||
PaeTec Communications, Inc. | NR/NR/NR | 10,079 | 6.3% | $19.10 | $192,558 | 6.0% | 5/31/2019(7) | ||||||||
Total Major Tenants | 159,521 | 99.9% | $20.13 | $3,211,174 | 99.9% | ||||||||||
Other Space(8) | 80 | 0.1% | $48.01 | $3,841 | 0.1% | ||||||||||
Occupied Collateral Total | 159,601 | 100.0% | $20.14 | $3,215,015 | 100.0% | ||||||||||
Collateral Total | 159,601 | 100.0% | |||||||||||||
(1) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. | |
(2) | Annual U/W Base Rent PSF and Annual U/W Base Rent include contractual rent escalations through June 2016 totaling $85,374. | |
(3) | NTT Worldwide Telecommunications has one, 10-year renewal option. | |
(4) | Asurion/National Electronics Warranty has one, 5-year renewal option. | |
(5) | 1000 Sully Road, LLC is an affiliate of the borrower. | |
(6) | 1000 Sully Road, LLC has one, 5-year renewal option. | |
(7) | PaeTec Communications, Inc. has one, 5-year renewal option. | |
(8) | Other Space is related to antenna equipment space leased by MCImetro Access Transmission Services. |
A-3-93 |
DULLES NORTH CORPORATE PARKS |
The following table presents certain information relating to the lease rollover schedule at the Dulles North Corporate Parks:
Lease Expiration Schedule(1)(2)
Year Ending December 31, | No. of Leases Expiring | Expiring NRSF | % of Total NRSF | Cumulative Expiring NRSF | Cumulative % of Total NRSF | Annual U/W Base Rent | Annual U/W Base Rent PSF | ||||||||
MTM | 0 | 0 | 0.0% | 0 | 0.0% | $0 | $0.00 | ||||||||
2015 | 0 | 0 | 0.0% | 0 | 0.0% | $0 | $0.00 | ||||||||
2016 | 1 | 25,460 | 16.0% | 25,460 | 16.0% | $469,689 | $18.45 | ||||||||
2017 | 1 | 23,535 | 14.7% | 48,995 | 30.7% | $541,308 | $23.00 | ||||||||
2018 | 0 | 0 | 0.0% | 48,995 | 30.7% | $0 | $0.00 | ||||||||
2019 | 2 | 10,159 | 6.4% | 59,154 | 37.1% | $196,399 | $19.33 | ||||||||
2020 | 1 | 80,391 | 50.4% | 139,545 | 87.4% | $1,598,881 | $19.89 | ||||||||
2021 | 0 | 0 | 0.0% | 139,545 | 87.4% | $0 | $0.00 | ||||||||
2022 | 0 | 0 | 0.0% | 139,545 | 87.4% | $0 | $0.00 | ||||||||
2023 | 0 | 0 | 0.0% | 139,545 | 87.4% | $0 | $0.00 | ||||||||
2024 | 0 | 0 | 0.0% | 139,545 | 87.4% | $0 | $0.00 | ||||||||
2025 | 0 | 0 | 0.0% | 139,545 | 87.4% | $0 | $0.00 | ||||||||
Thereafter | 1 | 20,056 | 12.6% | 159,601 | 100.0% | $408,738 | $20.38 | ||||||||
Vacant | 0 | 0 | 0.0% | 159,601 | 100.0% | $0 | $0.00 | ||||||||
Total/Weighted Average | 6 | 159,601 | 100.0% | $3,215,015 | $20.14 |
(1) | Information obtained from the underwritten rent roll. |
(2) | Certain tenants may have lease termination options that are exercisable prior to the originally stated expiration date of the subject lease and that are not considered in the Lease Expiration Schedule |
The following table presents historical occupancy percentages at the Dulles North Corporate Parks:
Historical Occupancy
12/31/2012(1) | 12/31/2013(1) | 12/31/2014(1) | Various(2) | |||
100.0% | 100.0% | 100.0% | 100.0% |
(1) | Information obtained from the borrowers. |
(2) | Information obtained from the underwritten rent roll. Occupancy shown is as of dates ranging from May 1, 2015 to June 1, 2015. |
Operating History and Underwritten Net Cash Flow. The following table presents certain information relating to the historical operating performance and underwritten net cash flow at the Dulles North Corporate Parks Property:
Cash Flow Analysis
2013 | 2014 | TTM 1/31/2015 | U/W | % of U/W Effective Gross Income | U/W $ per SF | ||||||||
Base Rent | $3,019,065 | $3,057,860 | $3,060,675 | $3,215,015(1) | 89.2% | $20.14 | |||||||
Total Reimbursables | 724,277 | 788,505 | 785,906 | 692,901 | 19.2 | 4.34 | |||||||
Other Income | 92,783 | 103,085 | 103,382 | 99,000 | 2.7 | 0.62 | |||||||
Less Vacancy & Credit Loss | 0 | 0 | 0 | (403,171)(2) | (11.2) | (2.53) | |||||||
Effective Gross Income | $3,836,125 | $3,949,450 | $3,949,963 | $3,603,745 | 100.0% | $22.58 | |||||||
Total Operating Expenses | $836,908 | $899,321 | $894,842 | $902,456 | 25.0% | $5.65 | |||||||
Net Operating Income | $2,999,217 | $3,050,129 | $3,055,121 | $2,701,289 | 75.0% | $16.93 | |||||||
TI/LC | 0 | 0 | 0 | 200,690 | 5.6 | 1.26 | |||||||
Replacement Reserves | 0 | 0 | 0 | 50,990 | 1.4 | 0.32 | |||||||
Net Cash Flow | $2,999,217 | $3,050,129 | $3,055,121 | $2,449,610 | 68.0% | $15.35 | |||||||
NOI DSCR | 1.83x | 1.87x | 1.87x | 1.65x | |||||||||
NCF DSCR | 1.83x | 1.87x | 1.87x | 1.50x | |||||||||
NOI DY | 12.0% | 12.2% | 12.2% | 10.8% | |||||||||
NCF DY | 12.0% | 12.2% | 12.2% | 9.8% |
(1) | U/W Base Rent is greater than TTM January 31, 2015 due to contractual rent increases that occurred from February 2015 through May 2015 totaling $68,963 and future rent increases totalling $85,377 through June 2016 being underwritten. |
(2) | The underwritten economic vacancy is 12.5%. The Dulles North Corporate Parks Property was 100.0% physically occupied as of May 1, 2015 and June 1, 2015. |
A-3-94 |
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A-3-95 |
No. 12 – Coastal Village Apartments | ||||||
Loan Information | Property Information | |||||
Mortgage Loan Seller: | Silverpeak Real Estate Finance LLC | Single Asset/Portfolio: | Single Asset | |||
Credit Assessment (Fitch/KBRA/Moody’s): | NR/NR/NR | Property Type: | Multifamily | |||
Original Principal Balance: | $24,000,000 | Specific Property Type: | Student Housing | |||
Cut-off Date Principal Balance: | $24,000,000 | Location: | Fort Myers, FL | |||
% of Initial Pool Balance: | 2.0% | Size: | 800 beds | |||
Loan Purpose: | Acquisition | Cut-off Date Principal Balance Per Bed: | $30,000 | |||
Borrower Name: | Brightstone Fort Myers, LLC | Year Built/Renovated: | 2004/NAP | |||
Sponsors: | David Kirshenbaum; Shaul Kopelowitz; Chaim Munk | Title Vesting: | Fee | |||
Mortgage Rate: | 4.330% | Property Manager: | Ambling Management Company, LLC | |||
Note Date: | January 29, 2015 | 3rd Most Recent Occupancy (As of): | 88.0% (12/31/2012) | |||
Anticipated Repayment Date: | NAP | 2nd Most Recent Occupancy (As of): | 91.0% (12/31/2013) | |||
Maturity Date: | February 6, 2025 | Most Recent Occupancy (As of): | 92.9% (12/31/2014) | |||
IO Period: | 24 months | Current Occupancy (As of): | 95.1% (5/18/2015) | |||
Loan Term (Original): | 120 months | |||||
Seasoning: | 4 months | Underwriting and Financial Information: | ||||
Amortization Term (Original): | 360 months | |||||
Loan Amortization Type: | Interest-only, Amortizing Balloon | 3rd Most Recent NOI (As of): | $2,199,220 (12/31/2013) | |||
Interest Accrual Method: | Actual/360 | 2nd Most Recent NOI (As of): | $2,186,829 (12/31/2014) | |||
Call Protection: | L(28),D(89),O(3) | Most Recent NOI (As of): | $2,094,562 (TTM 3/31/2015) | |||
Lockbox Type: | Soft/Springing Cash Management | |||||
Additional Debt(1): | Yes | U/W Revenues: | $4,815,207 | |||
Additional Debt Type(1): | Future Mezzanine | U/W Expenses: | $2,680,878 | |||
U/W NOI: | $2,134,330 | |||||
U/W NCF: | $2,003,994 | |||||
U/W NOI DSCR: | 1.49x | |||||
Escrows and Reserves: | U/W NCF DSCR: | 1.40x | ||||
U/W NOI Debt Yield: | 8.9% | |||||
Type: | Initial | Monthly | Cap (If Any) | U/W NCF Debt Yield: | 8.3% | |
Taxes | $101,631 | $33,875 | NAP | As-Is Appraised Value: | $32,700,000 | |
Insurance | $20,614 | $21,800 | NAP | As-Is Appraisal Valuation Date: | December 22, 2014 | |
Replacement Reserves | $500,000 | $10,861 | $1,000,000 | Cut-off Date LTV Ratio: | 73.4% | |
Deferred Maintenance | $90,000 | NAP | NAP | LTV Ratio at Maturity or ARD: | 62.4% | |
(1) | The borrower may incur mezzanine debt provided certain conditions are satisfied, including, but not limited to: (i) the combined amortizing net cash flow debt service coverage ratio is not less than 1.25x and (ii) the combined loan-to-value ratio is not greater than 75.0%. |
The Coastal Village Apartments mortgage loan is evidenced by a single promissory note that is secured by a first mortgage encumbering an 800-bed student housing multifamily property located in Fort Myers, Florida (the “Coastal Village Apartments Property”). The Coastal Village Apartments Property is less than three miles from Florida Gulf Coast University, which currently has an enrollment of over 14,000 students. As of May 21, 2015, the Coastal Village Apartments Property was 73% pre-leased for Fall 2015, compared to 48% at that time last year. Students typically sign 12 month leases. Built in 2004, each unit at the Coastal Village Apartments contains four bedrooms and four bathrooms with an average of 1,385 square feet. Unit amenities include a kitchen with full appliance package, private bathrooms in each bedroom, and in-unit washer and dryer. Coastal Village Apartments Property amenities include an outdoor swimming pool with a sun deck, clubhouse, study rooms, a fitness center, a game room, a computer lab with high speed internet connection, and an outdoor sand volleyball court. The Coastal Village Apartments Property contains 789 surface parking spaces, resulting in a parking ratio of 1.0 space per bed. Access to the Coastal Village Apartments Property is controlled via electronic security gates located at the primary entry point along Three Oaks Parkway. As of May 18, 2015, the property was 95.1% occupied.
A-3-96 |
COASTAL VILLAGE APARTMENTS |
Sources and Uses
Sources | Uses | |||||||
Original loan amount | $24,000,000 | 71.8% | Purchase price | $32,000,000 | 95.7% | |||
Sponsor’s new cash contribution | 9,427,702 | 28.2 | Reserves | 712,245 | 2.1 | |||
Closing costs | 715,457 | 2.1 | ||||||
Total Sources | $33,427,702 | 100.0% | Total Uses | $33,427,702 | 100.0% |
The following table presents certain information relating to the unit mix of the Coastal Village Apartments Property:
Apartment Unit Summary(1)
Unit Type | No. of Units |
No. of Beds | % of Total Beds | % of Total Beds | Average Unit Size (SF) |
4 Bedroom - 4 Bathroom | 200 | 800 | 100.0% | 100.0% | 1,385 |
Total/Weighted Average | 200 | 800 | 100.0% | 100.0% | 1,385 |
(1) | Information obtained from the appraisal. |
The following table presents historical occupancy percentages at the Coastal Village Apartments Property:
Historical Occupancy
12/31/2012(1) | 12/31/2013(1) | 12/31/2014(1) | 5/18/2015(2) |
88.0% | 91.0% | 92.9% | 95.1% |
(1) | Information obtained from the borrower. |
(2) | Information obtained from the underwritten rent roll. |
Operating History and Underwritten Net Cash Flow. The following table presents certain information relating to the historical operating performance and underwritten net cash flow at the Coastal Village Apartments Property:
Cash Flow Analysis
2013 | 2014 | TTM 3/31/2015 | U/W | % of U/W Effective Gross Income | U/W $ per Unit | ||||||||||||||||||||
Gross Potential Rent | $4,818,015 | $4,909,309 | $4,904,710 | $4,914,072 | 102.1% | $6,143 | |||||||||||||||||||
Concessions | (15,037) | (6,888) | (3,079) | (3,079) | (0.1) | (4) | |||||||||||||||||||
Other Income | 143,034 | 210,774 | 210,266 | 210,266 | 4.4 | 263 | |||||||||||||||||||
Less Vacancy & Credit Loss | (480,186) | (364,903) | (394,372) | (306,052)(1) | (6.4) | (383) | |||||||||||||||||||
Effective Gross Income | $4,465,826 | $4,748,292 | $4,717,525 | $4,815,207 | 100.0% | $6,019 | |||||||||||||||||||
Total Operating Expenses | $2,266,606 | $2,561,463 | $2,622,963 | $2,680,878 | 55.7% | $3,351 | |||||||||||||||||||
Net Operating Income | $2,199,220 | $2,186,829 | $2,094,562 | $2,134,330 | 44.3% | $2,668 | |||||||||||||||||||
Capital Expenditures | 0 | 0 | 0 | 130,336 | 2.7 | 163 | |||||||||||||||||||
Net Cash Flow | $2,199,220 | $2,186,829 | $2,094,562 | $2,003,994 | 41.6% | $2,505 | |||||||||||||||||||
NOI DSCR | 1.54x | 1.53x | 1.46x | 1.49x | |||||||||||||||||||||
NCF DSCR | 1.54x | 1.53x | 1.46x | 1.40x | |||||||||||||||||||||
NOI DY | 9.2% | 9.1% | 8.7% | 8.9% | |||||||||||||||||||||
NCF DY | 9.2% | 9.1% | 8.7% | 8.3% |
(1) | The underwritten economic vacancy is 5.0% and underwritten credit loss is 1.0%. The Coastal Village Apartments Property was 95.1% occupied as of May 18, 2015. |
A-3-97 |
No. 13 – Foothills Park Place | |||||||
Loan Information | Property Information | ||||||
Mortgage Loan Seller: | Wells Fargo Bank, National Association | Single Asset/Portfolio: | Single Asset | ||||
Credit Assessment (Fitch/KBRA/Moody’s): | NR/NR/NR | Property Type: | Retail | ||||
Original Principal Balance: | $23,000,000 | Specific Property Type: | Shadow Anchored | ||||
Cut-off Date Principal Balance: | $23,000,000 | Location: | Phoenix, AZ | ||||
% of Initial Pool Balance: | 2.0% | Size: | 132,496 SF | ||||
Loan Purpose: | Refinance | Cut-off Date Principal Balance Per SF: | $173.59 | ||||
Borrower Name: | Foothills Shopping Center, L.L.C. | Year Built/Renovated: | 1991/2009 | ||||
Sponsor: | Ronald Hahn | Title Vesting: | Fee | ||||
Mortgage Rate: | 4.130% | Property Manager: | Zell Commercial Real Estate Service, Inc. | ||||
Note Date: | April 3, 2015 | 3rdMost Recent Occupancy (As of): | 98.2% (1/31/2012) | ||||
Anticipated Repayment Date: | NAP | 2ndMost Recent Occupancy (As of): | 99.9% (1/31/2013) | ||||
Maturity Date: | April 11, 2025 | Most Recent Occupancy (As of): | 97.5% (1/31/2014) | ||||
IO Period: | 120 months | Current Occupancy (As of): | 91.7% (2/25/2015) | ||||
Loan Term (Original): | 120 months | ||||||
Seasoning: | 2 month | Underwriting and Financial Information: | |||||
Amortization Term (Original): | NAP | ||||||
Loan Amortization Type: | Interest-only, Balloon | 3rdMost Recent NOI (As of): | $2,543,147 (12/31/2013) | ||||
Interest Accrual Method: | Actual/360 | 2ndMost Recent NOI (As of)(2): | $2,175,933 (12/31/2014) | ||||
Call Protection: | L(26),GRTR 1% or YM(90),O(4) | Most Recent NOI (As of): | $2,165,788 (TTM 1/1/2015) | ||||
Lockbox Type: | Springing (Without Established Account) | ||||||
Additional Debt(1): | Yes | U/W Revenues: | $3,388,274 | ||||
Additional Debt Type(1): | Future Unsecured | U/W Expenses: | $844,492 | ||||
U/W NOI: | $2,543,783 | ||||||
U/W NCF: | $2,317,655 | ||||||
Escrows and Reserves: | U/W NOI DSCR: | 2.63x | |||||
U/W NCF DSCR: | 2.40x | ||||||
Type: | Initial | Monthly | Cap (If Any) | U/W NOI Debt Yield: | 11.1% | ||
Taxes | $21,089 | $21,089 | NAP | U/W NCF Debt Yield: | 10.1% | ||
Insurance | $28,677 | $2,607 | NAP | As-Is Appraised Value: | $39,000,000 | ||
Replacement Reserve | $0 | $0 | NAP | As-Is Appraisal Valuation Date: | March 9, 2015 | ||
Existing TI/LC Reserve | $257,827 | $0 | NAP | Cut-off Date LTV Ratio: | 59.0% | ||
Rent Concession Reserve | $49,724 | $0 | NAP | LTV Ratio at Maturity or ARD: | 59.0% | ||
(1) | Future unsecured subordinate debt is permitted from affiliates of the borrower in an amount up to $585,500. |
(2) | See “Cash Flow Analysis” section. |
The Foothills Park Place mortgage loan is evidenced by a single promissory note that is secured by a first mortgage encumbering a 132,496 square foot shadow anchored retail center (the “Foothills Park Place Property”) located in Phoenix, Arizona, approximately 14.2 miles southeast of the Phoenix central business district. The Foothills Park Place Property is located on a 11.6-acre site, was built in 1991, was most recently renovated in 2009, and is comprised of 11, one-story buildings. The Foothills Park Place Property is part of the larger Foothills Park Place Shopping Center, a 315,999 square foot retail center anchored by a 104,880 square foot JCPenney and a 62,868 square foot Sports Authority (neither are part of the collateral). Major tenants at the Foothills Park Place Property include Goodwill, Peter Piper Pizza, and numerous other national tenants. Approximately 40.5% of the underwritten base rent is from tenants that have occupied their space for over 10 years.
The Foothills Park Place Property includes 530 surface parking spaces resulting in a parking ratio of 4.0 spaces per 1,000 square feet of rentable area. In 2014, the population within a one-, three- and five-mile radius of the Foothills Park Place Property was 15,789, 82,957 and 186,088, respectively, while the estimated median household income within the same radii was $71,476, $85,445, and $80,400, respectively. As of February 25, 2015, the Foothill Park Place Property was 91.7% occupied by 36 tenants.
A-3-98 |
FOOTHILLS PARK PLACE |
Sources and Uses
Sources | Uses | |||||||
Original loan amount | $23,000,000 | 99.4% | Loan payoff(1) | $22,506,453 | 97.3% | |||
Sponsor’s new cash contribution | 142,037 | 0.6 | Reserves | 357,317 | 1.5 | |||
Closing costs | 278,267 | 1.2 | ||||||
Total Sources | $23,142,037 | 100.0% | Total Uses | $23,142,037 | 100.0% |
(1) | The Foothills Park Place Property was previously securitized in the MLMT 2005-CIP1 transaction. |
The following table presents certain information relating to the tenancy at the Foothills Park Place Property:
Major Tenants
Tenant Name | Credit Rating (Fitch/ Moody’s/ S&P)(1) | Tenant NRSF | % of NRSF | Annual U/W Base Rent PSF(2) | Annual U/W Base Rent(2) | % of Total Annual U/W Base Rent | Sales PSF(3) | Occupancy Cost(3) | Lease Expiration Date |
Anchor Tenants – Not Part of Collateral | |||||||||
JCPenney(4) | CCC/Caa2/CCC+ | 104,880 | ANCHOR OWNED – NOT PART OF THE COLLATERAL | ||||||
Sports Authority(4)(5) | NR/Caa1/NR | 62,868 | ANCHOR OWNED – NOT PART OF THE COLLATERAL | ||||||
Total Anchor Tenants – Not Part of Collateral | 167,748 | ||||||||
Major Tenant – Collateral | |||||||||
Goodwill | NR/NR/NR | 22,565 | 17.0% | $15.50 | $349,758 | 13.7% | NAV | NAV | 11/30/2029 |
Peter Piper Pizza | NR/NR/NR | 14,000 | 10.6% | $13.50 | $189,000 | 7.4% | $133 | 14.8% | 3/31/2018 |
Total Major Tenant – Collateral | 36,565 | 27.6% | $14.73 | $538,758 | 21.2% | ||||
Non-Major Tenant – Collateral | |||||||||
Native New Yorker | NR/NR/NR | 6,498 | 4.9% | $25.00 | $162,450 | 6.4% | $475 | 6.6% | 1/31/2023 |
Desert Federal Credit Union | NR/NR/NR | 5,914 | 4.5% | $26.66 | $157,687 | 6.2% | NAV | NAV | 8/31/2016 |
2ndWind Exercise Equipment | NR/NR/NR | 4,332 | 3.3% | $35.00 | $151,620 | 6.0% | NAV | NAV | 10/31/2024 |
Vitamin Shoppe | NR/NR/NR | 3,867 | 2.9% | $38.75 | $149,846 | 5.9% | NAV | NAV | 5/31/2025 |
Total Non-Major Tenant – Collateral | 20,611 | 15.6% | $30.16 | $621,603 | 24.4% | ||||
Other Tenants – Collateral | 64,342 | 48.6% | $21.51 | $1,383,807 | 54.4% | ||||
Occupied Collateral Total | 121,518 | 91.7% | $20.94 | $2,544,168 | 100.0% | ||||
Vacant Space | 10,978 | 8.3% | |||||||
Collateral Total | 132,496 | 100.0% | |||||||
(1) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
(2) | Annual U/W Base Rent PSF and Annual U/W Base Rent include contractual rent bumps through December 2015, totaling $52,515. Sherwin Williams signed an early 5-year renewal with increased rent starting October 1, 2016, which was included in underwriting as Sherman Williams’ rent is significantly below the concluded market rent. |
(3) | Sales PSF and Occupancy Cost are for the trailing 12-month period ending December 31, 2014. |
(4) | JCPenney, Sports Authority, and 5 other outparcel sites are not part of the collateral but contribute to their pro-rata share of common area maintenance reimbursements. |
(5) | Sports Authority subleases a portion of its space to Fresh & Easy, who recently announced they will be closing approximately 50 stores including this location. |
A-3-99 |
FOOTHILLS PARK PLACE |
The following table presents certain information relating to the lease rollover schedule at the Foothills Park Place Property:
Lease Expiration Schedule(1)(2)
Year Ending December 31, | No. of Leases Expiring | Expiring NRSF | % of Total NRSF | Cumulative Expiring NRSF | Cumulative % of Total NRSF | Annual U/W Base Rent | Annual U/W Base Rent PSF(3) |
MTM | 0 | 0 | 0.0% | 0 | 0.0% | $0 | $0.00 |
2015 | 2 | 2,338 | 1.8% | 2,338 | 1.8% | $52,238 | $22.34 |
2016 | 7 | 12,341 | 9.3% | 14,679 | 11.1% | $325,674 | $26.39 |
2017 | 4 | 4,960 | 3.7% | 19,639 | 14.8% | $133,283 | $26.87 |
2018 | 5 | 27,328 | 20.6% | 46,967 | 35.4% | $443,788 | $16.24 |
2019 | 5 | 11,541 | 8.7% | 58,508 | 44.2% | $242,944 | $21.05 |
2020 | 3 | 5,180 | 3.9% | 63,688 | 48.1% | $125,612 | $24.25 |
2021 | 2 | 6,264 | 4.7% | 69,952 | 52.8% | $107,856 | $17.22 |
2022 | 2 | 7,068 | 5.3% | 77,020 | 58.1% | $136,380 | $19.30 |
2023 | 2 | 12,534 | 9.5% | 89,554 | 67.6% | $283,170 | $22.59 |
2024 | 2 | 5,532 | 4.2% | 95,086 | 71.8% | $193,620 | $35.00 |
2025 | 1 | 3,867 | 2.9% | 98,953 | 74.7% | $149,846 | $38.75 |
Thereafter | 1 | 22,565 | 17.0% | 121,518 | 91.7% | $349,758 | $15.50 |
Vacant | 0 | 10,978 | 8.3% | 132,496 | 100.0% | $0 | $0.00 |
Total/Weighted Average | 36 | 132,496 | 100.0% | $2,544,168 | $20.94 |
(1) | Information obtained from the underwritten rent roll. |
(2) | Certain tenants may have lease termination options that are exercisable prior to the originally stated expiration date of the subject lease and that are not considered in the Lease Expiration Schedule. |
(3) | Annual U/W Base Rent PSF excludes vacant space. |
The following table presents historical occupancy percentages at the Foothills Park Place Property:
Historical Occupancy
1/31/2012(1) | 1/31/2013(1) | 1/31/2014(1) | 2/25/2015(2) |
98.2% | 99.9% | 97.5% | 91.7% |
(1) | Information obtained from the borrower. |
(2) | Information obtained from the underwritten rent roll. |
Operating History and Underwritten Net Cash Flow.The following table presents certain information relating to the historical operating performance and underwritten net cash flow at the Foothills Park Place Property:
Cash Flow Analysis
2013 | 2014 | TTM 1/31/2015 | U/W | % of U/W Effective Gross Income | U/W $ per SF | |||||||
Base Rent | $2,528,449 | $2,215,797 | $2,216,842 | $2,627,740(1) | 77.6% | $19.83 | ||||||
Grossed Up Vacant Space | 0 | 0 | 0 | 219,216 | 6.5 | 1.65 | ||||||
Percentage Rent | 66 | 18,023 | 18,023 | 0 | 0.0 | 0.00 | ||||||
Total Reimbursables | 839,216 | 710,890 | 707,729 | 760,534 | 22.4 | 5.74 | ||||||
Other Income | 1,940 | 7,240 | 6,903 | 0 | 0.0 | 0.00 | ||||||
Less Vacancy & Credit Loss | 0 | 0 | 0 | (219,216)(2) | (6.5) | (1.65) | ||||||
Effective Gross Income | $3,369,671 | $2,951,950 | $2,949,497 | $3,388,274 | 100.0% | $25.57 | ||||||
Total Operating Expenses | $826,524 | $776,016 | $783,709 | $844,492 | 24.9% | $6.37 | ||||||
|
|
|
|
|
| |||||||
Net Operating Income | $2,543,147 | $2,175,933(3) | $2,165,788 | $2,543,783(4) | 75.1% | $19.20 | ||||||
TI/LC | 0 | 0 | 0 | 199,628 | 5.9 | 1.51 | ||||||
Capital Expenditures | 0 | 0 | 0 | 26,499 | 0.8 | 0.20 | ||||||
Net Cash Flow | $2,543,147 | $2,175,933 | $2,165,788 | $2,317,655 | 68.4% | $17.49 | ||||||
NOI DSCR | 2.63x | 2.25x | 2.24x | 2.63x | ||||||||
NCF DSCR | 2.63x | 2.25x | 2.24x | 2.40x | ||||||||
NOI DY | 11.1% | 9.5% | 9.4% | 11.1% | ||||||||
NCF DY | 11.1% | 9.5% | 9.4% | 10.1% |
(1) | Annual U/W Base Rent includes contractual rent bumps through December 2015, totaling $52,515. |
(2) | The underwritten economic vacancy is 7.7%. The Foothills Park Place Property was 91.7% physically occupied as of February 25, 2015. |
(3) | The decrease in Net Operating Income from 2013 to 2014 can be attributed to the Michael’s lease expiration in February 2014. The new lease with Goodwill was signed four months later in June 2014 with the tenant taking occupancy on November 26, 2014 and rent payments commencing on February 27, 2015. |
(4) | The increase in U/W Net Operating Income from TTM January 31, 2015 is primarily due to the new lease with Goodwill with annual rent payments of $349,758 commencing on February 27, 2015 and contractual rent increases through December 2015 totaling $52,515 being underwritten. |
A-3-100 |
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A-3-101 |
No. 14 - Smiths Medical | |||||||
Loan Information | Property Information | ||||||
Mortgage Loan Seller: | Rialto Mortgage Finance, LLC | Single Asset/Portfolio: | Single Asset | ||||
Credit Assessment (Fitch/KBRA/Moody’s): | NR/NR/NR | Property Type: | Office | ||||
Original Principal Balance: | $22,250,000 | Specific Property Type: | Suburban | ||||
Cut-off Date Principal Balance: | $22,250,000 | Location: | Plymouth, MN | ||||
% of Initial Pool Balance: | 1.9% | Size: | 182,250 SF | ||||
Loan Purpose: | Acquisition | Cut-off Date Principal Balance Per Unit/SF: | $122.09 | ||||
Borrower Name: | 6000 Nathan (MN) LLC | Year Built/Renovated: | 1999/NAP | ||||
Sponsor: | Corporate Property Associates 17 - Global Incorporated | Title Vesting: | Fee | ||||
Mortgage Rate: | 4.475% | Property Manager: | Interstate Partners II, LLC | ||||
Note Date: | May 8, 2015 | 3rdMost Recent Occupancy (As of): | 45.0% (12/31/2012) | ||||
Anticipated Repayment Date: | NAP | 2ndMost Recent Occupancy (As of): | 45.0% (12/31/2013) | ||||
Maturity Date: | May 6, 2025 | Most Recent Occupancy (As of)(4): | 45.0% (12/31/2014) | ||||
IO Period: | 60 months | Current Occupancy (As of)(4): | 100.0% (3/1/2015) | ||||
Loan Term (Original): | 120 months | ||||||
Seasoning: | 1 month | Underwriting and Financial Information: | |||||
Amortization Term (Original): | 360 months | ||||||
Loan Amortization Type: | Interest-only, Amortizing Balloon | 3rdMost Recent NOI (As of): | $515,262 (12/31/2013) | ||||
Interest Accrual Method: | Actual/360 | 2ndMost Recent NOI (As of): | $827,333 (12/31/2014) | ||||
Call Protection: | L(25),D(88),O(7) | Most Recent NOI (As of)(4): | $1,176,135 (TTM 2/28/2015) | ||||
Lockbox Type: | Springing (Without Established Account) | ||||||
Additional Debt: | None | ||||||
Additional Debt Type: | NAP | ||||||
U/W Revenues: | $4,125,555 | ||||||
U/W Expenses: | $1,735,379 | ||||||
U/W NOI: | $2,390,177 | ||||||
Escrows and Reserves: | U/W NCF: | $2,171,477 | |||||
U/W NOI DSCR: | 1.77x | ||||||
Type: | Initial | Monthly | Cap (If Any) | U/W NCF DSCR: | 1.61x | ||
Taxes(1) | $0 | Springing | NAP | U/W NOI Debt Yield: | 10.7% | ||
Insurance(1) | $0 | Springing | NAP | U/W NCF Debt Yield: | 9.8% | ||
Replacement Reserves(1) | $0 | Springing | NAP | As-Is Appraised Value: | $35,400,000 | ||
TI/LC Reserve(1) | $0 | Springing | NAP | As-Is Appraisal Valuation Date: | April 1, 2015 | ||
Other(2) | $1,339,166 | $0 | NA | Cut-off Date LTV Ratio: | 62.9% | ||
Critical Tenant TI/LC(3) | $0 | Springing | NAP | LTV Ratio at Maturity or ARD: | 57.5% | ||
(1) | Monthly collections spring upon a Cash Management Trigger Event, which includes, but is not limited to: an event of default, a bankruptcy event of the borrower or guarantor or the debt service coverage ratio falling below 1.20x. |
(2) | Other Initial reserves consist of a Brocade free rent reserve ($775,512), Stanley Convergent Security Solutions TI/LC and abatement reserve ($318,617) and a parking lot future expansion reserve ($245,037). |
(3) | All excess cash flow shall be deposited in the Critical Tenant TI/LC monthly reserves upon (i) the monetary or material non-monetary event of default occurring under the Smiths Medical (the “Critical Tenant”) lease, (ii) the bankruptcy or insolvency of the Critical Tenant or any lease guarantor under the Critical Tenant lease, or (iii) the Critical Tenant (or an assignee of subtenant) ceasing to occupy, or discontinuing its normal operations at, the Smiths Medical Property. |
(4) | Smiths Medical executed a lease for 99,977 square feet (54.9% of the net rentable square footage) of previously vacant space on February 1, 2015. |
The Smiths Medical mortgage loan is evidenced by a single promissory note that is secured by a first mortgage encumbering a 182,250 square-foot office property located in Plymouth, Minnesota (the “Smiths Medical Property”), approximately 10.6 miles west of Minneapolis, Minnesota. The Smiths Medical Property is a four-story, suburban office building that was built in 1999 and situated on a 26.3-acre site. As of March 1, 2015, the Smiths Medical Property was 100.0% leased to three tenants including, Smiths Medical (“Smiths Medical”), Brocade Communications Systems, Inc. (“Brocade”), and Stanley Convergent. As part of the Smiths Medical recent lease execution, Smiths Medical entered into an agreement to take the Brocade’s space in January 2016. Simultaneously, Brocade agreed to accelerate its lease expiration to December 2015 in exchange for full gross abatement on its space for the remainder of the year. Smiths Medical will take occupancy in Brocade’s space and commence rental payments in January 2016. Additionally, the Smiths Medical lease has a “must-take” provision which obligates Smiths Medical to lease any rentable space in the Smith Medical Property as it becomes available, at Smiths Medical’s then-escalated rent, during the course of its lease term through its current lease maturity of January 31, 2028. Surface level parking is currently available for 902 cars, reflecting a parking ratio of 4.9 spaces per 1,000 square feet of rentable area.
A-3-102 |
SMITHS MEDICAL |
Sources and Uses
Sources | Uses | |||||||
Original loan amount | $22,250,000 | 65.3% | Purchase price | $32,258,738 | 94.7% | |||
Sponsor's new cash contribution | 11,812,607 | 34.7 | Reserves | 1,339,166 | 3.9 | |||
Closing costs | 464,703 | 1.4 | ||||||
Total Sources | $34,062,607 | 100.0% | Total Uses | $34,062,607 | 100.0% |
The following table presents certain information relating to the tenancies at the Smiths Medical Property:
Major Tenants
Tenant Name | Credit Rating (Fitch/Moody’s/ S&P)(1) | Tenant NRSF | % of NRSF | Annual U/W Base Rent PSF | Annual U/W Base Rent | % of Total Annual U/W Base Rent | Lease Expiration Date | |
Major Tenants | ||||||||
Smiths Medical(2) | NR/Baa2/BBB+ | 99,977 | 54.9% | $12.00 | $1,199,724 | 49.2% | 1/31/2028 | |
Brocade Communications(3) | NR/NR/NR | 44,846 | 24.6% | $15.89 | $712,743 | 29.3% | 12/31/2015 | |
Stanley Convergent | A-/ Baa1/A | 37,427 | 20.5% | $14.00 | $523,978 | 21.5% | 5/31/2021 | |
Total Major Tenants | 182,250 | 100.0% | $13.37 | $2,436,445 | 100.0% | |||
Occupied Collateral Total | 182,250 | 100.0% | $13.37 | $2,436,445 | 100.0% | |||
Vacant Space | 0 | 0.0% | ||||||
Collateral Total | 182,250 | 100.0% | ||||||
(1) | Certain ratings are those of the parent company whether or not the parent guarantees the lease. |
(2) | Smiths Medical has a one-time termination option on July 31, 2025, with 12-months’ notice and a payment of $2,046,940. Due to the structure of Smiths Medical lease, all space at the Smiths Medical Property which becomes vacant will be taken by Smiths Medical due to the must-take clause in its lease. |
(3) | Brocade accelerated its lease termination to take effect on December 31, 2015. Smiths Medical is required to take Brocade’s space on January 1, 2016. As part of its lease termination, Brocade is not required to pay rent through the remainder of its lease term. A free rent reserve of $775,512 was collected at closing. |
The following table presents certain information relating to the lease rollover schedule at the Smiths Medical Property:
Lease Expiration Schedule(1)(2)
Year Ending December 31, | No. of Leases Expiring | Expiring NRSF | % of Total NRSF | Cumulative Expiring NRSF | Cumulative % of Total NRSF | Annual U/W Base Rent | Annual U/W Base Rent PSF(3) | |||||
MTM | 0 | 0 | 0.0% | 0 | 0.0% | $0 | $0.00 | |||||
2015 | 2 | 44,846 | 24.6% | 44,846 | 24.6% | $712,743 | $15.89 | |||||
2016 | 0 | 0 | 0.0% | 44,846 | 24.6% | $0 | $0.00 | |||||
2017 | 0 | 0 | 0.0% | 44,846 | 24.6% | $0 | $0.00 | |||||
2018 | 0 | 0 | 0.0% | 44,846 | 24.6% | $0 | $0.00 | |||||
2019 | 0 | 0 | 0.0% | 44,846 | 24.6% | $0 | $0.00 | |||||
2020 | 0 | 0 | 0.0% | 44,846 | 24.6% | $0 | $0.00 | |||||
2021 | 1 | 37,427 | 20.5% | 82,273 | 45.1% | $523,978 | $14.00 | |||||
2022 | 0 | 0 | 0.0% | 82,273 | 45.1% | $0 | $0.00 | |||||
2023 | 0 | 0 | 0.0% | 82,273 | 45.1% | $0 | $0.00 | |||||
2024 | 0 | 0 | 0.0% | 82,273 | 45.1% | $0 | $0.00 | |||||
2025 | 0 | 0 | 0.0% | 82,273 | 45.1% | $0 | $0.00 | |||||
Thereafter | 1 | 99,977 | 54.9% | 182,250 | 100.0% | $1,199,724 | $12.00 | |||||
Vacant | 0 | 0 | 0.0% | 182,250 | 100.0% | 0 | $0.00 | |||||
Total/Weighted Average | 4 | 182,250 | 100.0% | $2,436,445 | $13.37 |
(1) | Information obtained from the underwritten rent roll. |
(2) | Certain tenants may have lease termination options that are exercisable prior to the originally stated expiration date of the subject lease and that are not considered in the Lease Expiration Schedule. |
(3) | Weighted Average Annual U/W Base Rent PSF excludes vacant space. |
A-3-103 |
SMITHS MEDICAL |
The following table presents historical occupancy percentages at the Smiths Medical Property:
Historical Occupancy
12/31/2012(1)(2) | 12/31/2013(1)(2) | 12/31/2014(1)(2) | 3/23/2015(2)(3) |
45.0% | 45.0% | 45.0% | 100.0% |
(1) | Information obtained from the borrower. |
(2) | Smiths Medical ASD executed a lease for 99,977 square feet of previously vacant space (54.9% of the net rentable square footage) on February 1, 2015. |
(3) | Information obtained from the underwritten rent roll. |
Operating History and Underwritten Net Cash Flow.The following table presents certain information relating to the historical operating performance and underwritten net cash flow at the Smiths Medical Property:
Cash Flow Analysis
2013 | 2014 | TTM 2/28/2015(1) | U/W(1) | % of U/W Effective Gross Income | U/W $ per SF | |||||||||
Base Rent | $1,196,673 | $1,229,794 | $1,453,470 | $2,436,445 | 59.1 | % | $13.37 | |||||||
Grossed Up Vacant Space | 0 | 0 | 0 | 0 | 0.0 | 0.00 | ||||||||
Straight Line Rent(2) | 0 | 0 | 0 | 249,536 | 6.0 | 1.37 | ||||||||
Mark to Market Adjustment | 0 | 0 | 0 | (174,591)(3) | (4.2 | ) | (0.96) | |||||||
Total Reimbursables | 948,034 | 1,028,578 | 1,133,143 | 1,735,379 | 42.1 | 9.52 | ||||||||
Other Income | 99,034 | 93,921 | 77,394 | 91,125 | 2.2 | 0.50 | ||||||||
Less Vacancy & Credit Loss | 0 | 0 | 0 | (212,338)(4) | (5.1 | ) | (1.17) | |||||||
Effective Gross Income | $2,243,741 | $2,352,293 | $2,664,008 | $4,125,555 | 100.0 | % | $22.64 | |||||||
Total Operating Expenses | $1,728,479 | $1,524,960 | $1,487,873 | $1,735,379 | 42.1 | % | $9.52 | |||||||
Net Operating Income | $515,262 | $827,333 | $1,176,135 | $2,390,177 | 57.9 | % | $13.11 | |||||||
TI/LC | 0 | 0 | 0 | 182,250 | 4.4 | 1.00 | ||||||||
Capital Expenditures | 0 | 0 | 0 | 36,450 | 0.9 |
| 0.20 | |||||||
Net Cash Flow | $515,262 | $827,333 | $1,176,135 | $2,171,477 | 52.6 | % | $11.91 | |||||||
NOI DSCR | 0.38x | 0.61x | 0.87x | 1.77x | ||||||||||
NCF DSCR | 0.38x | 0.61x | 0.87x | 1.61x | ||||||||||
NOI DY | 2.3% | 3.7% | 5.3% | 10.7% | ||||||||||
NCF DY | 2.3% | 3.7% | 5.3% | 9.8% |
(1) | Smiths Medical executed a lease for 99,977 square feet of previously vacant space (54.9% of the net rentable square footage) on February 1, 2015. |
(2) | Due to the credit nature of the tenants, Straight Line Rent includes underwritten rent increases of $0.35 per square foot through the fifth year of the Smiths Medical lease and the average rent through the remaining term of the Stanley Convergent lease. Smiths Medical has a current rent of $12.00 per square foot and Stanley Convergent has a current rent of $14.00 per square foot. |
(3) | Mark to Market Adjustment is based on the difference of Brocade Communication in-place rent and the contractual Smiths Medical rent due to Smiths Medical’s takeover in January 1, 2016. |
(4) | The underwritten economic vacancy is 5.0%. The Smiths Medical Property was 100.0% physically occupied as of March 1, 2015. |
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A-3-105 |
No. 15 – Hunterstone Apartments | |||||||
Loan Information | Property Information | ||||||
Mortgage Loan Seller: | Rialto Mortgage Finance, LLC | Single Asset/Portfolio: | Single Asset | ||||
Credit Assessment (Fitch/KBRA/Moody’s): | NR/NR/NR | Property Type: | Multifamily | ||||
Original Principal Balance: | $19,000,000 | Specific Property Type: | Garden | ||||
Cut-off Date Principal Balance: | $19,000,000 | Location: | Leland, NC | ||||
% of Initial Pool Balance: | 1.6% | Size: | 288 Units | ||||
Loan Purpose: | Acquisition | Cut-off Date Principal Balance Per Unit: | $65,972 | ||||
Borrower Name: | HPI Hunterstone LLC | Year Built/Renovated: | 2005/NAP | ||||
Sponsor: | Matthew A. Sharp; J. David Kelsey | Title Vesting: | Fee | ||||
Mortgage Rate: | 4.380% | Property Manager: | Self-managed | ||||
Note Date: | May 1, 2015 | 3rd Most Recent Occupancy (As of): | 92.2% (12/31/2012) | ||||
Anticipated Repayment Date: | NAP | 2nd Most Recent Occupancy (As of): | 94.3% (12/31/2013) | ||||
Maturity Date: | May 6, 2025 | Most Recent Occupancy (As of): | 94.4% (12/31/2014) | ||||
IO Period: | 48 months | Current Occupancy (As of): | 91.3% (4/13/2015) | ||||
Loan Term (Original): | 120 Months | ||||||
Seasoning: | 1 month | Underwriting and Financial Information: | |||||
Amortization Term (Original): | 360 months | ||||||
Loan Amortization Type: | Interest-only, Amortizing Balloon | 3rd Most Recent NOI (As of): | $1,556,530 (12/31/2013) | ||||
Interest Accrual Method: | Actual/360 | 2nd Most Recent NOI (As of): | $1,625,397 (12/31/2014) | ||||
Call Protection: | L(25),D(88),O(7) | Most Recent NOI (As of): | $1,627,567 (TTM 3/31/2015) | ||||
Lockbox Type: | Springing (Without Established Account) | ||||||
Additional Debt(1): | Yes | U/W Revenues: | $2,512,786 | ||||
Additional Debt Type(1): | Future Mezzanine | U/W Expenses: | $963,627 | ||||
U/W NOI: | $1,549,159 | ||||||
U/W NCF: | $1,477,159 | ||||||
U/W NOI DSCR: | 1.36x | ||||||
U/W NCF DSCR: | 1.30x | ||||||
Escrows and Reserves: | U/W NOI Debt Yield: | 8.2% | |||||
U/W NCF Debt Yield: | 7.8% | ||||||
Type: | Initial | Monthly | Cap (If Any) | As-Is Appraised Value: | $25,375,000 | ||
Taxes | $50,135 | $9,549 | NAP | As-Is Appraisal Valuation Date: | April 08, 2015 | ||
Insurance(2) | $0 | Springing | NAP | Cut-off Date LTV Ratio: | 74.9% | ||
Replacement Reserves | $0 | $6,000 | NAP | LTV Ratio at Maturity or ARD: | 66.9% | ||
(1) | The borrower may incur mezzanine debt provided certain provisions are satisfied, including, but not limited to: (i) the combined amortizing net cash flow debt service coverage ratio is not less than 1.30x and (ii) the combined loan-to-value ratio is not greater than 75.0%. |
(2) | The borrower is not required to make monthly insurance deposits as long as the insurance coverage remains in full force and effect. |
The mortgage loan is evidenced by a single promissory note that is secured by a first mortgage encumbering a garden-style multifamily property containing 288 units and located in Leland, North Carolina (the “Hunterstone Apartments Property”). Built in 2005, the Hunterstone Apartments Property is situated on 26.5 acres, located approximately 6.1 miles west of the Wilmington, North Carolina central business district and is within the Wilmington metropolitan statistical area, which has an estimated population of 274,427 as of 2015. The Port of Wilmington, approximately 8.1 miles east of the Hunterstone Apartments Property and the busiest port in North Carolina, accommodates refrigerated and non-refrigerated container cargo destined for North Carolina and other surrounding states. Primary access to the Hunterstone Apartments Property’s neighborhood is provided by Ocean Highway/Highway 17 (approximately 0.4 mile northwest of the Hunterstone Apartments Property) and Highway 74 (approximately 2.0 miles northeast of the Hunterstone Apartments Property), which connects to downtown Wilmington to the east. The Hunterstone Apartments Property is comprised of 12 buildings with a mixture of one, two and three bedroom units. Community amenities consist of a leasing office/clubhouse, fitness center, swimming pool, picnic and grill areas, laundry facility, playground, washer/dryer connections, 24-hour emergency maintenance, and free DVD exchange. Unit amenities include large walk-in closets, fully equipped kitchens, intrusion alarms, washer/dryer connections, private patio/balcony, and outside storage. As of April 13, 2015, the Hunterstone Apartments Property was 91.3% occupied.
A-3-106 |
HUNTERSTONE APARTMENTS |
Sources and Uses
Sources | Uses | |||||||
Original loan amount | $19,000,000 | 74.9% | Purchase price(1) | $25,000,000 | 98.5% | |||
Sponsor's new cash contribution | 6,368,432 | 25.1 | Closing costs | 318,297 | 1.3 | |||
Reserves | 50,135 | 0.2 | ||||||
Total Sources | $25,368,432 | 100.0% | Total Uses | $25,368,432 | 100.0% |
(1) | The Hunterstone Apartments Property was previously securitized in the BSCMS 2006-PW13 transaction. |
The following table presents certain information relating to the unit mix of the Hunterstone Apartments Property:
Apartment Unit Summary(1)
Unit Type | No. of Units | % of Total Units | Average Unit Size (SF) | Average Monthly Rent per Unit |
1 Bedroom/1 Bath | 72 | 25.0% | 576 | $706 |
2 Bedroom/2 Bath | 144 | 50.0% | 889 | $772 |
3 Bedroom/2 Bath | 72 | 25.0% | 1,125 | $887 |
Total/Weighted Average | 288 | 100.0% | 870 | $784 |
(1) | Information obtained from the underwritten rent roll. |
The following table presents historical occupancy percentages at the Hunterstone Apartments Property:
Historical Occupancy
12/31/2012(1) | 12/31/2013(1) | 12/31/2014(1) | 4/13/2015(2) |
92.2% | 94.3% | 94.4% | 91.3% |
(1) Information obtained from the borrower.
(2) Information obtained from the underwritten rent roll.
Operating History and Underwritten Net Cash Flow.The following table presents certain information relating to the historical operating performance and underwritten net cash flow at the Hunterstone Apartments Property:
Cash Flow Analysis
2013 | 2014 | TTM 3/31/2015 | U/W | % of U/W Effective Gross Income | U/W $ per Unit | ||||||||||||||||||||
Base Rent | $2,603,005 | $2,686,500 | $2,715,653 | $2,475,996 | 98.5 | % | $8,597 | ||||||||||||||||||
Grossed Up Vacant Space | 0 | 0 | 0 | 249,840 | 9.9 | 867 | |||||||||||||||||||
Concessions | (83,047 | ) | (70,170 | ) | (63,801 | ) | (63,801 | ) | (2.5 | ) | (221 | ) | |||||||||||||
Other Income(1) | 139,891 | 117,351 | 114,090 | 114,090 | 4.5 | 396 | |||||||||||||||||||
Less Vacancy & Credit Loss | (155,883 | ) | (152,059 | ) | (160,511 | ) | (263,339 | )(2) | (10.5 | ) | (914 | ) | |||||||||||||
Effective Gross Income | $2,503,966 | $2,581,622 | $2,605,431 | $2,512,786 | 100.0 | % | $8,724 | ||||||||||||||||||
Total Operating Expenses | $947,436 | $956,225 | $977,864 | $963,627 | 38.3 | % | $3,345 | ||||||||||||||||||
Net Operating Income | $1,556,530 | $1,625,397 | $1,627,567 | $1,549,159 | 61.7 | % | $5,379 | ||||||||||||||||||
Capital Expenditures | 0 | 0 | 0 | 72,000 | 2.9 | 250 | |||||||||||||||||||
Net Cash Flow | $1,556,530 | $1,625,397 | $1,627,567 | $1,477,159 | 58.8 | % | $5,129 | ||||||||||||||||||
NOI DSCR | 1.37 | x | 1.43 | x | 1.43 | x | 1.36 | x | |||||||||||||||||
NCF DSCR | 1.37 | x | 1.43 | x | 1.43 | x | 1.30 | x | |||||||||||||||||
NOI DY | 8.2 | % | 8.6 | % | 8.6 | % | 8.2 | % | |||||||||||||||||
NCF DY | 8.2 | % | 8.6 | % | 8.6 | % | 7.8 | % |
(1) | Other income includes washer/dryer rentals, late fees, lease termination fees, pet fees and application fees. |
(2) | The underwritten economic vacancy is 12.0%. The Hunterstone Apartments Property was 91.3% physically occupied as of April 13, 2015. |
A-3-107 |
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Annex B
ADDITIONAL MORTGAGE LOAN INFORMATION/DEFINITIONS
General. For purposes of the statistical information regarding the Mortgage Loans set forth in this free writing prospectus, including the Annexes hereto (with respect to Mortgage Loans secured by residential cooperatives the following is supplemented and modified as provided in “Certain Characteristics of Mortgage Loans Secured by Residential Cooperatives” below):
(1) | “ADR” means, with respect to any hospitality property, the average daily rate. |
(2) | “Appraised Value” means, for any Mortgaged Property securing a Mortgage Loan, the value estimate reflected in the most recent appraisal obtained by or otherwise in the possession of the related Mortgage Loan Seller as of the cut-off date. The appraisals for certain of the Mortgaged Properties state an “as-stabilized” value and/or “as-renovated” value and/or “as-completed” value and/or “hypothetical as-completed” as well as an “as-is” value for such properties based on the assumption that certain events will occur with respect to the re-tenanting, renovation or other repositioning of such properties. The “as-is” value is presented as the Appraised Value in this free writing prospectus, except (a) with respect to the Mortgaged Properties identified on Annex A-1 to this free writing prospectus as Jackson Square Apartments and 1321 Harbor Bay Parkway, securing approximately 1.1% and 0.6%, respectively, of the Cut-off Date Pool Balance by allocated loan amount, as to which the “as-completed” or “as-stabilized” value provided in the related appraisal has been used, and (b) where we specifically state otherwise. See the footnotes to Annex A-1 to this free writing prospectus. For additional information related to calculation of “Appraised Value” for Mortgage Loans secured by residential cooperatives see “Certain Characteristics of Mortgage Loans Secured by Residential Cooperatives” below. |
(3) | “Cash Flow Analysis” is, with respect to the one or more Mortgaged Properties securing a Mortgage Loan among the fifteen largest Mortgage Loans, a summary presentation of certain adjusted historical financial information provided by the related borrower, and a calculation of the Underwritten Net Cash Flow expressed as (a) ”Effective Gross Income”minus (b) ”Total Expenses” and underwritten replacement reserves and tenant improvements and leasing commissions. For this purpose: |
· | “Effective Gross Income” means, with respect to any Mortgaged Property, the revenue derived from the use and operation of that property, less allowances for vacancies, concessions and credit losses. The “revenue” component of such calculation was generally determined on the basis of the information described with respect to the “revenue” component described under “Underwritten Net Cash Flow” below. In general, any non-recurring revenue items and non-property related revenue are eliminated from the calculation of Effective Gross Income. |
· | “Total Expenses” means, with respect to any Mortgaged Property, all operating expenses associated with that property, including, but not limited to, utilities, administrative expenses, repairs and maintenance, management fees, advertising costs, insurance premiums, real estate |
B-1 |
taxes and (if applicable) ground rent. Such expenses were generally determined on the basis of the same information as the “expense” component described under “Underwritten Net Cash Flow” below. |
To the extent available, selected historical income, expenses and net income associated with the operation of the related Mortgaged Property securing each Mortgage Loan appear in each Cash Flow Summary contained in the “Summaries of the Fifteen Largest Mortgage Loans” attached as Annex A-3 to this free writing prospectus. Such information is one of the sources (but not the only source) of information on which calculations of Underwritten Net Cash Flow are based. The historical information presented is derived from audited and/or unaudited financial statements provided by the borrowers. The historical information in the Cash Flow Summaries reflects adjustments made by the Mortgage Loan Seller to exclude certain items contained in the related financial statements that were not considered in calculating Underwritten Net Cash Flow and is presented in a different format from the financial statements to show a comparison to the Underwritten Net Cash Flow. In general, solely for purposes of the presentation of historical financial information, the amount set forth under the caption “gross income” consists of the “total revenues” set forth in the applicable financial statements (including (as and to the extent stated) rental revenues, tenant reimbursements and recovery income (and, in the case of hospitality properties and certain other property types, parking income, telephone income, food and beverage income, laundry income and other income), with adjustments to exclude amounts recognized on the financial statements under a straight-line method of recognizing rental income (including increases in minimum rents and rent abatements) from operating leases over their lives and items indicated as extraordinary or one-time revenue collections or considered nonrecurring in property operations. The amount set forth under the caption “expenses” in the historical financial information consists of the total expenses set forth in the applicable financial statements, with adjustments to exclude allocated parent company expenses, restructuring charges and charges associated with employee severance and termination benefits, interest expenses paid to company affiliates or unrelated third parties, charges for depreciation and amortization charges and items indicated as extraordinary or one-time losses or considered nonrecurring in property operations.
The selected historical information presented in the Cash Flow Summaries is derived from audited and/or unaudited financial statements furnished by the respective borrowers which has not been verified by the Depositor, any underwriters, the Mortgage Loan Sellers or any other person. Audits or other verification of such financial statements could result in changes thereto, which could in turn result in the historical net income presented herein being overstated.
(4) | “Cut-off Date Loan-to-Value Ratio” or “Cut-off Date LTV Ratio” generally means the ratio, expressed as a percentage, of the Cut-off Date Principal Balance of a Mortgage Loan to the Appraised Value of the related Mortgaged Property or Properties determined as described under “Description of the Mortgage Pool—Assessments of Property Value and Condition—Appraisals” in this free writing prospectus. See also the footnotes to Annex A-1 in this free writing prospectus. Because the Appraised Values of the Mortgaged Properties |
B-2 |
were determined prior to origination, the information set forth in this free writing prospectus, including the Annexes hereto, is not necessarily a reliable measure of property value or the related borrower’s current equity in each Mortgaged Property. In a declining real estate market, the appraised value of a Mortgaged Property may have decreased from the appraised value determined at origination and the current actual cut-off date loan-to-value ratio of a Mortgage Loan may be higher than the Cut-off Date LTV Ratio that we present in this free writing prospectus, even after taking into account any amortization since origination. No representation is made that any Appraised Value presented in this free writing prospectus would approximate either the value that would be determined in a current appraisal of the related Mortgaged Property or the amount that would be realized upon a sale of that property. See “Risk Factors—Risks Related to the Mortgage Loans—Appraisals May Not Accurately Reflect the Value of the Mortgaged Properties” in this free writing prospectus. In the case of a Mortgage Loan that is part of a Loan Combination, such loan-to-value ratio was calculated based on the aggregate principal balance of the Pari Passu Mortgage Loan and the related Pari Passu Companion Loan as of the cut-off date. |
(5) | “Debt Service Coverage Ratio”, “DSCR”, “Underwritten Debt Service Coverage Ratio” “U/W NCF DSCR” or “U/W DSCR” generally means the ratio of the Underwritten Net Cash Flow for the related Mortgaged Property or properties to the annual debt service as shown on Annex A-1 to this free writing prospectus. In the case of Mortgage Loans with an interest-only period that has not expired as of the Cut-off Date but will expire prior to maturity or any related Anticipated Repayment Date (as applicable), 12 months of principal and interest payments is used as the annual debt service. In the case of any Mortgage Loan that provides for payments of interest-only for its entire term or through any related Anticipated Repayment Date (as applicable), 12 months of interest-only payments is used as the annual debt service. |
In the case of a Mortgage Loan that is part of a Loan Combination, such debt service coverage ratio was calculated based on the aggregate annual debt service of the Pari Passu Mortgage Loan and the related Pari Passu Companion Loan.
In general, debt service coverage ratios are used by income property lenders to measure the ratio of (a) cash currently generated by a property or expected to be generated by a property based upon executed leases that is available for debt service to (b) required debt service payments. However, debt service coverage ratios only measure the current, or recent, ability of a property to service mortgage debt. If a property does not possess a stable operating expectancy (for instance, if it is subject to material leases that are scheduled to expire during the loan term and that provide for above-market rents and/or that may be difficult to replace), a debt service coverage ratio may not be a reliable indicator of a property’s ability to service the mortgage debt over the entire remaining loan term. See “Underwritten Net Cash Flow” below.
The Underwritten Debt Service Coverage Ratios presented in this free writing prospectus appear for illustrative purposes only and, as discussed above, are limited in their usefulness in assessing the current, or predicting the future, ability of a Mortgaged Property to generate sufficient cash flow to repay the related Mortgage Loan. No representation is made that the Underwritten
B-3 |
Debt Service Coverage Ratios presented in this free writing prospectus accurately reflect that ability.
(6) | “LTV Ratio at Maturity or ARD”, “LTV Ratio at Maturity or Anticipated Repayment Date” and “Balloon or ARD LTV Ratio” generally means the ratio, expressed as a percentage, of (a) the principal balance of a balloon Mortgage Loan scheduled to be outstanding on the stated maturity date or of an ARD Loan scheduled to be outstanding on the Anticipated Repayment Date, assuming (among other things) no prepayments or defaults, to (b) the Appraised Value of the related Mortgaged Property or Properties determined as described under “Description of the Mortgage Pool—Assessments of Property Value and Condition—Appraisals” in this free writing prospectus. Each Mortgage Loan requires that a regular monthly debt service payment be made on the stated maturity date or Anticipated Repayment Date, as applicable, and accordingly the principal balance referenced in clause (a) of the immediately preceding sentence will be net of the principal portion, if any, of the monthly debt service payment due on such date. Because the Appraised Values of the Mortgaged Properties were determined prior to origination, the information set forth in this free writing prospectus, including the Annexes hereto, is not necessarily a reliable measure of the related borrower’s current equity in each Mortgaged Property. In a declining real estate market, the appraised value of a Mortgaged Property may have decreased from the appraised value determined at origination and the actual loan-to-value ratio at maturity of a Mortgage Loan may be higher than the LTV Ratio at Maturity that we present in this free writing prospectus. See “Risk Factors—Risks Related to the Mortgage Loans—Appraisals May Not Accurately Reflect the Value of the Mortgaged Properties” in this free writing prospectus. In the case of each Mortgage Loan that is part of a Loan Combination, unless otherwise indicated, such loan-to-value ratio was calculated based on the aggregate principal balance that will be due at maturity with respect to such Mortgage Loan and the related Pari Passu Companion Loan. |
(7) | “Maturity Date Balloon or ARD Payment” or “Balloon or ARD Payment” means, for any balloon Mortgage Loan or ARD Loan, the payment of principal due upon its stated maturity date or Anticipated Repayment Date. Each Mortgage Loan requires that a regular monthly debt service payment be made on the stated maturity date or Anticipated Repayment Date, as applicable, and accordingly the payment of principal referenced in the immediately preceding sentence will be net of the principal portion, if any, of the monthly debt service payment due on such date. |
(8) | “Occupancy Rate” means (i) in the case of multifamily rental properties (other than residential cooperative properties) and manufactured housing community properties, the percentage of rental units or pads, as applicable, that are rented (generally without regard to the length of the lease or rental period) as of the date of determination; (ii) in the case of office, retail and industrial/warehouse properties, the percentage of the net rentable square footage rented as of the date of determination (subject to, in the case of certain Mortgage Loans, one or more of the additional lease-up assumptions); (iii) in the case of hospitality properties, the percentage of available rooms occupied for the trailing 12-month period ending on the date of determination; (iv) in the case of self-storage facilities, either the percentage |
B-4 |
of the net rentable square footage rented or the percentage of units rented for the trailing 12-month period ending on the date of determination, depending on borrower reporting; and (v) in the case of residential cooperative properties, the property vacancy assumption reflected in the related appraisal for purposes of determining the appraised value of the related Mortgaged Property as a multifamily rental property (i.e., the “Coop-Rental Value” reflected in Annex A-1 to this free writing prospectus); such vacancy assumption for residential cooperative properties does not reflect actual occupancy. In the case of some of the Mortgage Loans, the calculation of Occupancy Rate for one or more related properties was based on assumptions regarding occupancy, such as: the assumption that a particular tenant at the subject Mortgaged Property that has executed a lease, but has not yet taken occupancy and/or has not yet commenced paying rent, will take occupancy on a future date generally expected to occur within twelve months of the cut-off date; assumptions regarding the renewal of particular leases and/or the re-leasing of certain space at the subject Mortgaged Property; and certain additional lease-up assumptions as may be described in the footnotes to Annex A-1 to this free writing prospectus. |
(9) | “Occupancy As Of Date” means the date of determination of the Occupancy Rate of a Mortgaged Property. With respect to a residential cooperative mortgage loan, the Occupancy As Of Date is the date of the related appraisal from which the Occupancy Rate is derived. |
(10) | “Prepayment Provisions” denotes a general summary of the provisions of a Mortgage Loan that restrict the ability of the related borrower to voluntarily prepay the Mortgage Loan. In each case, some exceptions may apply that are not described in the general summary, such as provisions that permit a voluntary partial prepayment in connection with the release of a portion of a Mortgaged Property, or require the application of tenant holdback reserves to a partial prepayment, in each case notwithstanding any Lock-out Period or Yield Maintenance Charge that may otherwise apply. In describing Prepayment Provisions, we use the following symbols with the indicated meanings: |
· | “D(#)”means, with respect to any Mortgage Loan, a specified number of monthly payment periods (which number is denoted by a numeric value #) during which voluntary prepayments of principal are prohibited, but the related borrower is permitted to defease that Mortgage Loan in order to obtain a release of the related Mortgaged Property. |
· | “L(#)”means, with respect to any Mortgage Loan, a specified number of monthly payment periods (which number is denoted by a numeric value #) during which voluntary prepayments of principal are prohibited and defeasance is not permitted. |
· | “O(#)”means, with respect to any Mortgage Loan, a specified number of monthly payment periods (which number is denoted by a numeric value #) during which prepayments of principal are permitted without the payment of any Prepayment Premium or Yield Maintenance Charge and the lender is not entitled to require a defeasance in lieu of prepayment. |
· | “YM(#)”means, with respect to any Mortgage Loan, a specified number of monthly payment periods (which number is denoted by a numeric value |
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#) during which prepayments of principal are permitted with the payment of a Yield Maintenance Charge and the lender is not entitled to require a defeasance in lieu of prepayment. |
· | “D or @%(#)” means, with respect to any Mortgage Loan, a specified number of monthly payment periods (which number is denoted by a numeric value #) during which the related borrower is permitted to defease that Mortgage Loan in order to obtain a release of the related Mortgaged Property and during which prepayments of principal are permitted with the payment of a Prepayment Premium (equal to @% of the prepaid amount). |
· | “D or YM(#)” means, with respect to any Mortgage Loan, a specified number of monthly payment periods (which number is denoted by a numeric value #) during which the related borrower is permitted to defease that Mortgage Loan in order to obtain a release of the related Mortgaged Property and during which prepayments of principal are permitted with the payment of a Yield Maintenance Charge. |
· | “D or GRTR of @% or YM(#)” means, with respect to any Mortgage Loan, a specified number of monthly payment periods (which number is denoted by a numeric value #) during which the related borrower is permitted to defease that Mortgage Loan in order to obtain a release of the related Mortgaged Property and during which prepayments of principal are permitted with the payment of the greater of a Yield Maintenance Charge and a Prepayment Premium (equal to @% of the prepaid amount). |
· | “GRTR of @% or YM(#)”means, with respect to any Mortgage Loan, a specified number of monthly payment periods (which number is denoted by a numeric value #) during which prepayments of principal are permitted with the payment of the greater of a Yield Maintenance Charge and a Prepayment Premium (equal to @% of the prepaid amount) and the lender is not entitled to require a defeasance in lieu of prepayment. |
(11) | “Remaining Term to Maturity or ARD” means, with respect to any Mortgage Loan, the number of months from the Cut-off Date to the related stated maturity date or Anticipated Repayment Date. |
(12) | “RevPAR” means, with respect to any hospitality property, revenues per available room. |
(13) | “Stated Principal Balance” means, for each Mortgage Loan in the Trust Fund, a principal amount that: |
· | will initially equal its unpaid principal balance as of the cut-off date or, in the case of a replacement Mortgage Loan, as of the date it is added to the Trust Fund, after application of all payments of principal due on or before that date, whether or not those payments have been received; and |
· | will be permanently reduced on each subsequent distribution date, to not less than zero, by that portion, if any, of the Principal Distribution Amount (without regard to the adjustments otherwise contemplated by clauses 1 through 4 of the definition thereof) for that distribution date that represents principal actually received or advanced on that Mortgage Loan, |
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and the principal portion of any Realized Loss (see “Description of the Offered Certificates—Reductions of Certificate Principal Balances in Connection with Realized Losses and Additional Trust Fund Expenses”) incurred with respect to that Mortgage Loan during the related collection period. |
However, the “Stated Principal Balance” of any Mortgage Loan in the Trust Fund will, in all cases, be zero as of the distribution date following the collection period in which it is determined that all amounts ultimately collectable with respect to that Mortgage Loan or any related REO Property have been received.
(14) | “Structuring Assumptions” means, collectively, the following assumptions regarding the Certificates and the Mortgage Loans in the Trust Fund: |
· | except as otherwise set forth below, the Mortgage Loans have the characteristics set forth on Annex A-1 to this free writing prospectus and the Cut-off Date Pool Balance is as described in this free writing prospectus; |
· | the initial aggregate principal balance or notional amount, as the case may be, of each interest-bearing Class of Certificates is as described in this free writing prospectus; |
· | the pass-through rate for each interest-bearing Class of Certificates is as described in this free writing prospectus; |
· | no delinquencies, defaults or losses occur with respect to any of the Mortgage Loans; |
· | no Additional Trust Fund Expenses (including Trust Advisor Expenses) arise, no Servicing Advances are made under the Pooling and Servicing Agreement and the only expenses of the Trust consist of the trustee fees, the certificate administrator fees, the master servicing fees (including any applicable primary or sub-servicing fees), the CREFC®Intellectual Property Royalty License Fees and the Trust Advisor fees, each as set forth on Annex A-1 to this free writing prospectus; |
· | there are no modifications, extensions, waivers or amendments affecting the monthly debt service payments by borrowers on the Mortgage Loans; |
· | each of the Mortgage Loans provides for monthly debt service payments to be due on the first day of each month, regardless of the actual day of the month on which those payments are otherwise due and regardless of whether the subject date is a business day or not; |
· | all monthly debt service or balloon payments on the Mortgage Loans are timely received by a Master Servicer on behalf of the Trust on the day on which they are assumed to be due or paid as described in the immediately preceding bullet; |
· | each ARD Loan in the Trust Fund is paid in full on its Anticipated Repayment Date; |
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· | no involuntary prepayments are received as to any Mortgage Loan at any time (including, without limitation, as a result of any application of escrows, reserve or holdback amounts if performance criteria are not satisfied); |
· | except as described in the next two succeeding bullets, no voluntary prepayments are received as to any Mortgage Loan during that Mortgage Loan’s prepayment Lock-out Period, including any contemporaneous period when defeasance is permitted, or during any period when principal prepayments on that Mortgage Loan are required to be accompanied by a Prepayment Premium or Yield Maintenance Charge, including any contemporaneous period when defeasance is permitted; |
· | except as otherwise assumed in the immediately preceding two bullets, prepayments are made on each of the Mortgage Loans at the indicated CPRs set forth in the subject tables or other relevant part of this free writing prospectus, without regard to any limitations in those Mortgage Loans on partial voluntary principal prepayments; |
· | all prepayments on the Mortgage Loans are assumed to be accompanied by a full month’s interest and no Prepayment Interest Shortfalls occur; |
· | no Yield Maintenance Charges or Prepayment Premiums are collected; |
· | no person or entity entitled thereto exercises its right of optional termination as described in this free writing prospectus under “Description of the Offered Certificates—Termination of the Pooling and Servicing Agreement”; |
· | no Mortgage Loan is required to be repurchased, as described under “Description of the Mortgage Pool—Cures, Repurchases and Substitutions” in this free writing prospectus; |
· | distributions on the Offered Certificates are made on the 15th day of each month, commencing in July 2015; and |
· | the Offered Certificates are settled with investors on June 26, 2015. |
(15) | “Underwritten Net Cash Flow”, “Underwritten NCF” or “U/W NCF” means an amount based on assumptions relating to cash flow available for debt service. In general, it is the assumed revenue derived from the use and operation of a Mortgaged Property, consisting primarily of rental income, less the sum of (a) assumed operating expenses (such as utilities, administrative expenses, repairs and maintenance, management fees and advertising), (b) fixed expenses, such as insurance, real estate taxes and, if applicable, ground lease payments, and (c) reserves for capital expenditures, including tenant improvement costs and leasing commissions. Underwritten Net Cash Flow generally does not reflect interest expenses, non-cash items such as depreciation and amortization and other non-reoccurring expenses. |
In determining the “revenue” component of Underwritten Net Cash Flow for each Mortgaged Property (other than a residential cooperative property), the related Mortgage Loan Seller generally relied on a rent roll and/or other known, signed tenant leases, executed extension options, property financial statements, estimates in the related appraisal, or other indications of
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anticipated income (generally supported by market considerations, cash reserves or letters of credit) supplied by the related borrower and, where the actual vacancy shown thereon and, if available, the market vacancy was less than 5%, assumed a minimum 5% vacancy in determining revenue from rents, except that in the case of certain non-multifamily and non-manufactured housing community properties, space occupied by such anchor or single tenants or other large creditworthy tenants may have been disregarded (or a rate of less than 5% has been assumed) in performing the vacancy adjustment due to the length of the related leases or creditworthiness of such tenants. Where the actual or market vacancy was greater than 5%, the Mortgage Loan Seller determined revenue from rents by generally relying on a rent roll and/or other known, signed leases, executed lease extension options, property financial statements, estimates in the related appraisal, or other indications of anticipated income (generally supported by market considerations, cash reserves or letters of credit) supplied and generally (but not in all cases) the greatest of (a) actual current vacancy at the related Mortgaged Property or a vacancy otherwise based on performance of the related Mortgaged Property (e.g., an economic vacancy based on actual collections for a specified trailing period), (b) if available, current vacancy according to third-party-provided market information or at comparable properties in the same or similar market as the related Mortgaged Property, subject to adjustment to address special considerations (such as where market vacancy may have been ignored with respect to space covered by long-term leases or because it was deemed inapplicable by reason of, among other things, below market rents at or unique characteristics of the subject Mortgaged Property) and/or to reflect the appraiser’s conclusion of a supportable or stabilized occupancy rate, and (c) subject to the discussion above, 5%. In some cases involving a multi-property Mortgage Loan, the foregoing vacancy assumptions may be applied to the portfolio of the related Mortgaged Properties in the entirety, but may not apply to each related Mortgaged Property. In addition, for some Mortgaged Properties, the actual vacancy may reflect the average vacancy over the course of a year. In determining revenue for multifamily, manufactured housing community and self-storage properties, the Mortgage Loan Sellers generally reviewed rental revenue shown on the rolling one-to-twelve month (or come combination thereof) operating statements or annualized the rental revenue and reimbursement of expenses shown on rent rolls or operating statements with respect to the prior one-to-twelve-month periods. In the case of hospitality properties, gross receipts were generally determined based upon the average occupancy not to exceed 75% and daily rates based on third-party-provided market information or daily rates achieved during the prior one-to-three year annual reporting period.
In determining the “expense” component of Underwritten Net Cash Flow for each Mortgaged Property, the related Mortgage Loan Seller generally relied on, to the extent available, historical operating statements, full-year or year-to-date financial statements, rolling 12-month operating statements, year-to-date financial statements and/or budgets supplied by the related borrower, as well as estimates in the related appraisal, except that: (i) if tax or insurance expense information more current than that reflected in the financial statements was available and verified, the newer information was generally used; (ii) property management fees were generally assumed to be 1% to 6% (depending on the property) of effective gross revenue (or, in the
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case of a hospitality property, gross receipts); (iii) in general, depending on the property type, assumptions were made with respect to the average amount of reserves for leasing commissions, tenant improvement expenses and capital expenditures; (iv) expenses were assumed to include annual replacement reserves; and (v) recent changes in circumstances at the Mortgaged Properties were taken into account (for example, physical changes that would be expected to reduce utilities costs). Annual replacement reserves were generally underwritten to the suggested replacement reserve amount from an independent, third-party property condition or engineering report, or minimum requirements by property type designated by the Mortgage Loan Seller, and are: (a) in the case of retail, office, self-storage and industrial/warehouse properties, generally not more than $0.40 per square foot of net rentable commercial area (and may be zero); (b) in the case of multifamily rental apartments, generally not more than approximately $400 per residential unit per year, depending on the condition of the property (and may be zero); (c) in the case of manufactured housing community properties, generally not more than approximately $80 per pad per year, depending on the condition of the property (and may be zero); and (d) in the case of hospitality properties, generally 4% to 5%, inclusive, of gross revenues. In addition, in some cases, the Mortgage Loan Seller recharacterized as capital expenditures items that are reported by borrowers as operating expenses (thus increasing the “net cash flow”).
Historical operating results may not be available for Mortgaged Properties with newly constructed improvements, Mortgaged Properties with triple-net leases, Mortgaged Properties that have recently undergone substantial renovations and newly acquired Mortgaged Properties. In such cases, items of revenue and expense used in calculating Underwritten Net Cash Flow were generally derived from rent rolls, estimates set forth in the related appraisal, leases with tenants, other third-party-provided market information or from other borrower-supplied information. We cannot assure you with respect to the accuracy of the information provided by any borrowers, or the adequacy of the procedures used by the applicable Mortgage Loan Seller in determining the presented operating information.
For purposes of calculating Underwritten Net Cash Flow for Mortgage Loans where leases have been executed by one or more affiliates of the borrower, the rents under some of such leases, if applicable, have been adjusted downward to reflect market rents for similar properties if the rent actually paid under the lease was significantly higher than the market rent for similar properties.
The amounts described as revenue and expense above are often highly subjective values. In the case of some of the Mortgage Loans, the calculation of Underwritten Net Cash Flow for the related Mortgaged Properties was based on assumptions regarding projected rental income, expenses and/or occupancy, including, without limitation, one or more of the following: (i) the assumption that a particular tenant at a Mortgaged Property that has executed a lease, but has not yet taken occupancy and/or has not yet commenced paying rent, will take occupancy and commence paying rent on a future date generally expected to occur within twelve months of the cut-off date; (ii) the assumption that certain rental income that is to be payable commencing on a future date under a signed lease, but where the subject
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tenant is in an initial rent abatement or free rent period, will be paid commencing on such future date; (iii) assumptions regarding the probability of renewal or extension of particular leases and/or the re-leasing of certain space at a Mortgaged Property and the anticipated effect on capital and re-leasing expenditures; (iv) assumptions regarding the costs and expenses, including leasing commissions and tenant improvements, associated with leasing vacant space or releasing occupied space at a future date; and (v) assumptions regarding future increases or decreases in expenses, or whether certain expenses are capital expenses or should be treated as expenses which are not recurring. In addition, in the case of some commercial properties, the underwritten revenues were adjusted upward to account for a portion or average of the additional rents provided for under any rent step-ups scheduled to occur over the terms of the executed leases. We cannot assure you that the assumptions made with respect to any mortgage loan will, in fact, be consistent with actual property performance. Actual annual net cash flow for a Mortgaged Property may be less than the Underwritten Net Cash Flow presented with respect to that property in this free writing prospectus. In addition, the underwriting analysis of any particular Mortgage Loan as described herein by a particular Mortgage Loan Seller may not (and likely will not) conform to an analysis of the same property by other persons or entities.
For additional information related to calculation of “Underwritten Net Cash Flow”, “Underwritten NCF” or “U/W NCF” for Mortgage Loans secured by residential cooperative properties, see “Certain Characteristics of Mortgage Loans Secured by Residential Cooperatives” below.
See “Risk Factors—Risks Related to the Mortgage Loans—Debt Service Coverage Ratio and Net Cash Flow Information is Based on Numerous Assumptions” and “Description of the Mortgage Pool—Net Cash Flow and Certain Underwriting Considerations” in this free writing prospectus. See also Annex A-1 and the footnotes thereto.
(16) | “Underwritten NCF Debt Yield” or “U/W NCF Debt Yield” generally means, with respect to any Mortgage Loan, the related Underwritten NCFdivided by the Cut-off Date Principal Balance of that Mortgage Loan. However, in the case of a Mortgage Loan that is part of a Loan Combination, unless otherwise indicated, such debt yield was calculated based on the aggregate principal balance of the Pari Passu Mortgage Loan and the related Pari Passu Companion Loan as of the cut-off date. |
(17) | “Underwritten Net Operating Income”, “Underwritten NOI” or “U/W NOI” means an amount based on assumptions of the cash flow available for debt service before deductions for capital expenditures, including replacement reserves, tenant improvement costs and leasing commissions. Underwritten Net Operating Income is generally estimated in the same manner as Underwritten Net Cash Flow, except that no deduction is made for capital expenditures, including replacement reserves, tenant improvement costs and leasing commissions. For additional information related to calculation of “Underwritten Net Operating Income”, “Underwritten NOI” or “U/W NOI” for Mortgage Loans secured by residential cooperative properties, see “Certain Characteristics of Mortgage Loans Secured by Residential Cooperatives” below. See “Risk Factors—Risks Related to the Mortgage Loans—Debt Service |
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Coverage Ratio and Net Cash Flow Information is Based on Numerous Assumptions” in this free writing prospectus. |
(18) | “Underwritten NOI Debt Yield” or “U/W NOI Debt Yield” means, with respect to any Mortgage Loan, the related Underwritten NOIdivided by the Cut-off Date Principal Balance of that Mortgage Loan. In the case of a Mortgage Loan that is part of a Loan Combination, unless otherwise indicated, such debt yield was calculated based on the aggregate principal balance of the Pari Passu Mortgage Loan and the related Pari Passu Companion Loan as of the cut-off date. |
You should review the footnotes to Annex A-1 in this free writing prospectus for information regarding certain other loan-specific adjustments regarding the calculation of debt service coverage ratio information, loan-to-value ratio information, debt yield information and/or loan per net rentable square foot or unit with respect to certain of the Mortgage Loans.
Except as otherwise specifically stated, the Cut-off Date LTV Ratio, Underwritten Debt Service Coverage Ratio, LTV Ratio at Maturity, Underwritten NCF Debt Yield, Underwritten NOI Debt Yield and loan per net rentable square foot or unit statistics with respect to each Mortgage Loan are calculated and presented without regard to any indebtedness other than the Mortgage Loan, whether or not secured by the related Mortgaged Property, ownership interests in the related borrower or otherwise, that currently exists or that may be incurred by the related borrower or its owners in the future.
References to “weighted averages” of the Mortgage Loans in the Mortgage Pool or any particular sub-group of the mortgage loans are references to averages weighted on the basis of the Cut-off Date Principal Balances of the subject Mortgage Loans.
If we present a debt rating for some tenants and not others in the tables, you should assume that the other tenants are not rated and/or have below-investment grade ratings. If a tenant has a rated parent or affiliate, we present the rating of that parent or affiliate, notwithstanding that the parent or affiliate may itself have no obligations under the lease. Presentation of a rating opposite a tenant should not be construed as a statement that the relevant tenant will perform or be able to perform its obligations.
The sum in any column of any of the tables in Annex A-2 may not equal the indicated total due to rounding.
Historical information presented in this free writing prospectus, including information in Annexes A-1 and A-3 to this free writing prospectus is derived from audited and/or unaudited financial statements provided by the borrowers. In each case, the historical information is taken from the same source with respect to a Mortgage Loan and subject to the same adjustments and considerations as described above with respect to the ten largest Mortgage Loans under the definition of “Cash Flow Analysis”.
Certain Characteristics of Mortgage Loans Secured by Residential Cooperatives
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With respect to the residential cooperative mortgage loans sold to the Trust by National Cooperative Bank, N.A., due to attributes particular to residential housing cooperatives, certain information presented in this free writing prospectus and in Annex A-1 to this free writing prospectus differs from that presented for other Mortgage Loans included in the Trust. Several of these differences are particularly relevant to your consideration of an investment in the Offered Certificates.
In particular, the manner in which loan-to-value ratios, debt service coverage ratios and debt yields are calculated for the residential cooperative mortgage loans sold to the Trust by National Cooperative Bank, N.A. differs from the manner in which such calculations are made for other Mortgage Loans included in the Trust.
For example, the appraised value of such a residential cooperative property used for purposes of determining the loan-to-value ratio for the related Mortgage Loan as of any date is the value estimate reflected in an appraisal of such residential cooperative property determined as if such residential cooperative property is operated as a residential cooperative and, in general, such value equals the sum of (i) the gross sellout value of all cooperative units in such residential cooperative property (applying a discount for units that are subject to existing rent regulated or rent-controlled rental tenants as and if deemed appropriate by the appraiser), based in part on various comparable sales of cooperative apartment units in the market, plus (ii) the amount of the underlying debt encumbering such residential cooperative property. This value, based upon the most recent appraisal as of the Cut-off Date, is reflected as the “Appraised Value” of a residential cooperative property on Annex A-1 to this free writing prospectus. With respect to the Mortgage Loan identified on Annex A-1 to this free writing prospectus as Baywoods of Annapolis, representing approximately 1.4% of the Cut-off Date Pool Balance, the related Mortgaged Property is a continuing care retirement community comprised of (i) a portion of the Mortgaged Property operated as an age-restricted residential cooperative property with certain enhanced member services and (ii) a portion of the Mortgaged Property operated as a residential healthcare facility. The “Appraised Value” of the Mortgaged Property securing the Mortgage Loan identified on Annex A-1 to this free writing prospectus as Baywoods of Annapolis is equal to the sum of (i) the value of the portion of such Mortgaged Property operated as a residential cooperative property determined as if such residential cooperative property is operated as a residential cooperative and calculated as provided above,plus (ii) the value of the portion of such Mortgaged Property operated as a residential healthcare facility, in each case as set forth in the related appraisal. With respect to limited equity cooperatives (i.e., housing cooperatives in which eligible members purchase shares at below market prices and are subject to restrictions on the sale price for which units may be re-sold), the gross sellout value referenced above in this paragraph is calculated without regard to any applicable sale price restrictions. The comparable sales considered in the appraisers’ estimates of gross sellout values may have occurred at properties where the cooperative entity’s underlying mortgage debt per cooperative unit was substantially more or less than that at the applicable Mortgaged Property. The appraisers generally made no adjustments to comparable sales statistics to account for any such differences, although monthly unit maintenance obligations may have been considered. A residential cooperative property is also valued as a multifamily rental property to determine a “Coop-Rental Value” as set forth on Annex A-1 to this free writing prospectus. The value of a residential cooperative property as a multifamily rental property is the value estimate reflected in an appraisal of such residential cooperative property and, in general, is derived by applying an appropriate capitalization rate (as determined by the appraiser) to the Underwritten Net Cash Flow for such residential cooperative property.
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In addition, for purposes of determining the debt service coverage ratio and debt yield for a residential cooperative mortgage loan, the “Underwritten Net Cash Flow”, “Underwritten NCF” or “U/W NCF” for a residential cooperative property and the “Underwritten Net Operating Income”, “Underwritten NOI” or “U/W NOI” for a residential cooperative property, in each case as set forth on Annex A-1 to this free writing prospectus, is the projected net cash flow reflected in an appraisal of such residential cooperative property and, in general, equals projected operating income at the property assuming such property is operated as a rental property with rents and other income set at prevailing market rates (but taking into account the presence of existing rent regulated or rent-controlled rental tenants), reduced by underwritten property operating expenses, a market-rate vacancy assumption and projected replacement reserves, in each case as determined by the appraiser. In the case of the Mortgage Loan identified on Annex A-1 to this free writing prospectus as Baywoods of Annapolis, representing approximately 1.4% of the Cut-off Date Pool Balance, the “Underwritten Net Cash Flow”, “Underwritten NCF” or “U/W NCF” for the related Mortgaged Property and the “Underwritten Net Operating Income”, “Underwritten NOI” or “U/W NOI” for such Mortgaged Property equals the sum of (i) such values for the portion of such Mortgaged Property operated as a residential cooperative property calculated as provided above,plus (ii) such values as calculated for the portion of such Mortgaged Property operated as a residential healthcare facility, in each case as set forth in the related appraisal. Accordingly, U/W Revenues, U/W Expenses, U/W Net Operating Income, U/W Replacement and U/W Net Cash Flow, in each case as set forth on Annex A-1 to this free writing prospectus, are derived from the appraisal. However, the projected net cash flow used in such determinations may differ materially from the scheduled monthly maintenance payments from the tenant-stockholders upon which residential cooperatives depend.
The loan-to-value ratios, debt service coverage ratios and debt yields presented herein with respect to such a residential cooperative mortgage loan may differ from the loan-to-value ratios, debt service coverage ratios and debt yields that would have been determined for such residential cooperative mortgage loan had a different methodology (including the methodology used for calculating such values with respect to the other mortgage loans sold to the Depositor) been used.
With respect to information presented in Annex A-1 to this free writing prospectus with respect to mortgage loans secured by residential cooperative properties that have existing subordinate secured indebtedness, (1) the Coop-Committed Secondary Debt equals the balance of any subordinate line of credit mortgage loan, based on the full face amount of the subordinate line of credit mortgage loan, (2) the Whole Loan Cut-off Date Balance equals the sum of the Cut-off Date balance of the WFCM 2015-C29 trust mortgage loan plus the balance of each existing subordinate loan, assuming that such existing subordinate loan is fully advanced and the entire amount thereof is outstanding as of the Cut-off Date, except that (A) with respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as 321 West 90th St. Owners Corp., representing approximately 0.2% of the Cut-Off Date Pool Balance, the Whole Loan Cut-off Date Balance also includes the Cut-off Date balance of the chattel mortgage encumbering such mortgaged property and (B) with respect to the 230 Garth Loan, the existing chattel mortgage is assumed to have a Cut-off Date balance equal to the 230 Garth Loan Chattel Mortgage OPB, (3) the Subordinate Secured Debt Original Balance is determined as if each existing subordinate loan amount is fully advanced on the date of closing of said subordinate loan, (4) the Subordinate Secured Debt Cut-off Date Balance with respect to the 230 Garth Loan reflects the 230 Garth Loan Chattel Mortgage OPB and (5) except with respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Baywoods of Annapolis, representing approximately 1.4% of the Cut-
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Off Date Pool Balance, the Whole Loan Debt Service, Whole Loan U/W NOI DSCR and Whole Loan U/W NCF DSCR are calculated assuming (A) that the subordinate secured indebtedness has been fully advanced and the entire amount thereof is outstanding as of the Cut-off Date (except, with respect to the 230 Garth Loan, the subordinate secured indebtedness is assumed to have a Cut-off Date balance equal to the 230 Garth Loan Chattel Mortgage OPB), (B) that the applicable interest rate for the subordinate secured indebtedness (other than for the subordinate secured indebtedness with respect to the 230 Garth Loan and the subordinate secured indebtedness comprised of a chattel mortgage with respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as 321 West 90thSt. Owners Corp., representing approximately 0.2% of the Cut-Off Date Pool Balance, each of which is determined based upon the actual principal and/or interest payments in effect as of the Cut-off Date) is determined using 1-month LIBOR in effect as of the Cut-off Date and giving effect to any applicable interest rate floor and (C) that any initial interest-only period for such subordinate indebtedness has expired and the related borrower is required to make scheduled principal plus interest payments as set forth in the corresponding promissory note. With respect to the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as Baywoods of Annapolis, the Whole Loan Debt Service, Whole Loan U/W NOI DSCR and Whole Loan U/W NCF DSCR are calculated assuming (A) that the subordinate secured indebtedness has been fully advanced and the entire amount thereof is outstanding as of the Cut-off Date, (B) that interest on the subordinate secured indebtedness is accruing at a rate of 4.000%per annum on an actual/360 basis and (C) that any initial interest-only period on the subordinate secured indebtedness has expired and the borrower is required to make payments of interest plus fixed payments of principal based on a 240-month straight-line amortization schedule. As used in this paragraph: “230 Garth Loan” means the Mortgage Loan secured by the Mortgaged Property identified on Annex A-1 to this free writing prospectus as 230 Garth Road Owners, Inc., representing approximately 0.4% of the Cut-Off Date Pool Balance; and “230 Garth Loan Chattel Mortgage OPB” means $265,650, which such amount is the outstanding principal balance of 230 Garth Loan chattel mortgage as of March 19, 2015.
With respect to the mortgage loans secured by residential cooperative properties, each mortgaged property is owned by the borrower, which is a cooperative housing corporation. No individual or entity (other than the borrower) has recourse obligations with respect to the loans, including pursuant to any guaranty or environmental indemnity. Accordingly, no information is presented in the column labeled Sponsor in Annex A-1 to this free writing prospectus with respect to the residential cooperative mortgage loans sold to the Depositor by National Cooperative Bank, N.A. for inclusion in the Trust. In addition, with respect to information presented in Annex A-1 to this free writing prospectus with respect to mortgage loans secured by residential cooperative properties: (1) Coop – Sponsor Units refers to the number of units owned by the original sponsor responsible for the mortgaged property’s conversion into cooperative ownership; such sponsor may rent its units or opt to market them for sale (either individually or as a whole); (2) Coop – Investor Units refers to a bulk number of units owned by a non-tenant investor(s), who can rent or sell the units; (3) Coop – Coop Units refers to the number of units owned by the borrower, which is a cooperative corporation; In this capacity, the cooperative may manage its units as an investor would or use the units for the benefit of its cooperative members; (4) Coop – Unsold Percent refers to the ratio of the total number of units collectively owned by the original sponsor, a non-tenant investor or the cooperative corporation to the number of units with shares allocated; and (5) Coop – Sponsor/Investor Carry is the sponsor’s or the investor’s net cash flow calculated by subtracting maintenance charges on the sponsor or investor owned units from the actual rents payable on such units, to the extent available. In the case of the Mortgage Loan secured by the Mortgaged Property identified on
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Annex A-1 to this free writing prospectus as Baywoods of Annapolis, representing approximately 1.4% of the Cut-off Date Pool Balance, all such unit calculations are limited to units which are operated as residential cooperative apartment units and exclude the rooms located in the portion of such Mortgaged Property operated as a residential healthcare facility.
In addition, due to the specialized nature of residential housing cooperatives, certain information presented in and shown on Annex A-1 to this free writing prospectus with respect to Mortgage Loans (other than such residential cooperative mortgage loans) is not presented on Annex A-1 to this free writing prospectus with respect to the residential cooperative mortgage loans sold to the Depositor by National Cooperative Bank, N.A. for inclusion in the Trust. For example, since residential cooperatives are not-for-profit entities that set maintenance fees to cover current expenses and plan for future capital needs and a residential cooperative can increase or decrease maintenance fees according to its anticipated expenses and level of cash reserves, historical NOI figures are not representative of the cash flow generated by the property if it were operated as a multifamily rental property. Accordingly, the Most Recent NOI, Second Most Recent NOI, Third Most Recent NOI, and the related fields shown on Annex A-1 to this free writing prospectus for the mortgage loans secured by residential cooperative properties are not presented on Annex A-1 to this free writing prospectus with respect to the residential cooperative mortgage loans sold to the Depositor by National Cooperative Bank, N.A. for inclusion in the Trust.
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Annex C-1
Mortgage Loan Representations and Warranties
Each Mortgage Loan Seller will, solely as to the Mortgage Loans that it is transferring to the Depositor, make the representations and warranties set forth below as of the date specified below or, if no such date is specified, as of the Closing Date, in each case subject to the exceptions to those representations and warranties that are described on Annex C-2 for the applicable Mortgage Loan Seller. Capitalized terms used but not otherwise defined in this Annex C-1 shall have the meanings set forth in the main body of the free writing prospectus or, if not defined therein, in the related mortgage loan purchase agreement.
Each mortgage loan purchase agreement, together with the related representations and warranties (subject to the exceptions thereto), serves to contractually allocate risk between the related Mortgage Loan Seller, on the one hand, and the Trust Fund, on the other. We present the related representations and warranties set forth below for the sole purpose of describing some of the terms and conditions of that risk allocation. The presentation of representations and warranties is not intended as statements regarding the actual characteristics of the Mortgage Loans, Mortgaged Properties or other matters. We cannot assure you that the Mortgage Loans actually conform to the statements made in the representations and warranties that we present below.
In addition, for purposes of the following representations and warranties, the phrase “the Mortgage Loan Seller’s knowledge” and other words and phrases of like import shall mean, except where otherwise expressly set forth below, the actual state of knowledge of the Mortgage Loan Seller, its officers and employees responsible for the underwriting, origination, servicing or sale of the Mortgage Loans regarding the matters expressly set forth below in each case without having conducted any independent inquiry into such matters and without any obligation to have done so (except (i) having sent to the servicers servicing the Mortgage Loans on behalf of the Mortgage Loan Seller, if any, specific inquiries regarding the matters referred to and (ii) as expressly set forth herein). All information contained in documents which are part of or required to be part of a mortgage file, as specified in the Pooling and Servicing Agreement (to the extent such documents exist) shall be deemed within the Mortgage Loan Seller’s knowledge.
1. Complete Mortgage File. With respect to each Mortgage Loan, to the extent that the failure to deliver the same would constitute a “Material Document Defect” in the Pooling and Servicing Agreement and/or Mortgage Loan Purchase Agreement, (i) a copy of the mortgage file for each Mortgage Loan and (ii) originals or copies of all financial statements, appraisals, environmental reports, engineering reports, seismic assessment reports, leases, rent rolls, Insurance Policies and certificates, legal opinions and tenant estoppels in the possession or under the control of such Mortgage Loan Seller that relate to such Mortgage Loan, will be or have been delivered to the Master Servicer with respect to each Mortgage Loan by the deadlines set forth in the Pooling and Servicing Agreement and/or Mortgage Loan Purchase Agreement. For the avoidance of doubt, the Mortgage Loan Seller shall not be required to deliver any attorney-client privileged communication, draft documents or any documents or materials prepared by it or its affiliates for internal uses, including without limitation, credit committee briefs or memoranda and other internal approval documents.
2. Whole Loan; Ownership of Mortgage Loans. Each Mortgage Loan is a whole loan and not a participation interest in a mortgage loan. At the time of the sale, transfer and assignment to the Depositor, no mortgage note or mortgage was subject to any assignment (other than assignments to the Mortgage Loan Seller), participation or pledge, and the
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Mortgage Loan Seller had good title to, and was the sole owner of, each Mortgage Loan free and clear of any and all liens, charges, pledges, encumbrances, participations, any other ownership interests and other interests on, in or to such Mortgage Loan other than any servicing rights appointment, subservicing or similar agreement. The Mortgage Loan Seller has full right and authority to sell, assign and transfer each Mortgage Loan, and the assignment to the Depositor constitutes a legal, valid and binding assignment of such Mortgage Loan free and clear of any and all liens, pledges, charges or security interests of any nature encumbering such Mortgage Loan.
3. Loan Document Status. Each related mortgage note, mortgage, Assignment of Leases (if a separate instrument), guaranty and other agreement executed by or on behalf of the related Mortgagor, guarantor or other obligor in connection with such Mortgage Loan is the legal, valid and binding obligation of the related Mortgagor, guarantor or other obligor (subject to any non-recourse provisions contained in any of the foregoing agreements and any applicable state anti-deficiency or market value limit deficiency legislation), as applicable, and is enforceable in accordance with its terms, except as such enforcement may be limited by (i) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law and except that certain provisions in such Mortgage Loan documents (including, without limitation, provisions requiring the payment of default interest, late fees or prepayment/yield maintenance premiums) may be further limited or rendered unenforceable by applicable law, but (subject to the limitations set forth above) such limitations or unenforceability will not render such Mortgage Loan documents invalid as a whole or materially interfere with the mortgagee’s realization of the principal benefits and/or security provided thereby (clauses (i) and (ii) collectively, the “Standard Qualifications”).
Except as set forth in the immediately preceding sentences, there is no valid offset, defense, counterclaim or right of rescission available to the related Mortgagor with respect to any of the related mortgage notes, mortgages or other Mortgage Loan documents, including, without limitation, any such valid offset, defense, counterclaim or right based on intentional fraud by Mortgage Loan Seller in connection with the origination of the Mortgage Loan, that would deny the mortgagee the principal benefits intended to be provided by the mortgage note, mortgage or other Mortgage Loan documents.
4. Mortgage Provisions. The Mortgage Loan documents for each Mortgage Loan, together with applicable state law, contain provisions that render the rights and remedies of the holder thereof adequate for the practical realization against the Mortgaged Property of the principal benefits of the security intended to be provided thereby, including realization by judicial or, if applicable, non-judicial foreclosure subject to the limitations set forth in the Standard Qualifications.
5. Hospitality Provisions. The Mortgage Loan documents for each Mortgage Loan that is secured by a hospitality property operated pursuant to a franchise or license agreement includes an executed comfort letter or similar agreement signed by the related Mortgagor and franchisor or licensor of such property that, subject to the applicable terms of such franchise or license agreement and comfort letter or similar agreement, is enforceable by the Trust against such franchisor or licensor either (A) directly or as an assignee of the originator, or (B) upon the Mortgage Loan Seller’s or its designee’s providing notice of the transfer of the Mortgage Loan to the Trust in accordance with the terms of such executed comfort letter or similar agreement, which the Mortgage Loan Seller or its designee shall provide, or if neither (A) nor (B) is applicable, the Mortgage Loan Seller or its designee shall apply for, on the Trust’s behalf, a new comfort letter or similar agreement as of the Closing
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Date. The mortgage or related security agreement for each Mortgage Loan secured by a hospitality property creates a security interest in the revenues of such property for which a UCC financing statement has been filed in the appropriate filing office. For the avoidance of doubt, no representation is made as to the perfection of any security interest in revenues to the extent that possession or control of such items or actions other than the filing of Uniform Commercial Code financing statements is required to effect such perfection.
6. Mortgage Status; Waivers and Modifications. Since origination and except by written instruments set forth in the related mortgage file or as otherwise provided in the related Mortgage Loan documents (a) the material terms of such mortgage, mortgage note, Mortgage Loan guaranty and related Mortgage Loan documents have not been waived, impaired, modified, altered, satisfied, canceled, subordinated or rescinded in any respect; (b) no related Mortgaged Property or any portion thereof has been released from the lien of the related mortgage in any manner which materially interferes with the security intended to be provided by such mortgage or the use or operation of the remaining portion of such Mortgaged Property; and (c) neither borrower nor guarantor has been released from its material obligationsunder the Mortgage Loan. With respect to each Mortgage Loan, except as contained in a written document included in the mortgage file, there have been no modifications, amendments or waivers, that could be reasonably expected to have a material adverse effect on such Mortgage Loan consented to by the Mortgage Loan Seller on or after the Cut-off Date.
7. Lien; Valid Assignment. Subject to the Standard Qualifications, each endorsement or assignment of mortgage and assignment of Assignment of Leases from the Mortgage Loan Seller or its affiliate is in recordable form (but for the insertion of the name of the assignee and any related recording information which is not yet available to the Mortgage Loan Seller) and constitutes a legal, valid and binding endorsement or assignment from the Mortgage Loan Seller, or its affiliate, as applicable. Each related mortgage and Assignment of Leases is freely assignable without the consent of the related Mortgagor. Each related mortgage is a legal, valid and enforceable first lien on the related Mortgagor’s fee (or if identified on the Mortgage Loan Schedule, leasehold) interest in the Mortgaged Property in the principal amount of such Mortgage Loan or allocated loan amount (subject only to Permitted Encumbrances (as defined below) and the exceptions to paragraph 8 below (each such exception, a “Title Exception”)), except as the enforcement thereof may be limited by the Standard Qualifications. Such Mortgaged Property (subject to Permitted Encumbrances and Title Exceptions) as of origination and, to the Mortgage Loan Seller’s knowledge, as of the Cut-off Date, is free and clear of any recorded mechanics’ or materialmen’s liens and other recorded encumbrances, and as of origination and, to the Mortgage Loan Seller’s knowledge, as of the Cut-off Date, no rights exist which under law could give rise to any such lien or encumbrance that would be prior to or equal with the lien of the related mortgage, except those which are bonded over, escrowed for or insured against by the applicable Title Policy (as described below). Any security agreement, chattel mortgage or equivalent document related to and delivered in connection with the Mortgage Loan establishes and creates a valid and enforceable lien on property described therein subject to the Permitted Encumbrances and Title Exceptions, except as such enforcement may be limited by Standard Qualifications, subject to the limitations described in paragraph 11 below. Notwithstanding anything herein to the contrary, no representation is made as to the perfection of any security interest in rents or other personal property to the extent that possession or control of such items or actions other than the filing of Uniform Commercial Code financing statements is required to effect such perfection.
8. Permitted Liens; Title Insurance. Each Mortgaged Property securing a Mortgage Loan is covered by an American Land Title Association loan title insurance policy or a
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comparable form of loan title insurance policy approved for use in the applicable jurisdiction (or, if such policy is yet to be issued, by a pro forma policy, a preliminary title policy or a “marked up” commitment, in each case with escrow instructions and binding on the title insurer) (the “Title Policy”) in the original principal amount of such Mortgage Loan (or with respect to a Mortgage Loan secured by multiple properties, an amount equal to at least the allocated loan amount with respect to the Title Policy for each such property) after all advances of principal (including anyadvances held in escrow or reserves), that insures for the benefit of the owner of the indebtedness secured by the mortgage, the first priority lien of the mortgage, which lien is subject only to (a) the lien of current real property taxes, water charges, sewer rents and assessments not yet due and payable; (b) covenants, conditions and restrictions, rights of way, easements and other matters of public record specifically identified in the Title Policy; (c) the exceptions (general and specific) and exclusions set forth in such Title Policy; (d) other matters to which like properties are commonly subject; (e) the rights of tenants (as tenants only) under leases (including subleases) pertaining to the related Mortgaged Property; (f) if the related Mortgage Loan constitutes a cross-collateralized Mortgage Loan, the lien of the mortgage for another Mortgage Loan contained in the same cross-collateralized group of Mortgage Loans, and (g) condominium declarations of record and identified in such Title Policy,provided that none of which clauses (a) through (g), individually or in the aggregate, materially interferes with the current marketability or principal use of the Mortgaged Property, the security intended to be provided by such mortgage, or the current ability of the related Mortgaged Property to generate net cash flow sufficient to service the related Mortgage Loan or the Mortgagor’s ability to pay its obligations when they become due (collectively, the “Permitted Encumbrances”). For purposes of clause (a) of the immediately preceding sentence, any such taxes, assessments and other charges shall not be considered due and payable until the date on which interest and/or penalties would be payable thereon. Except as contemplated by clause (f) of the second preceding sentence none of the Permitted Encumbrances are mortgage liens that are senior to or coordinate and co-equal with the lien of the related mortgage. Such Title Policy (or, if it has yet to be issued, the coverage to be provided thereby) is in full force and effect, all premiums thereon have been paid and no claims have been made by the Mortgage Loan Seller thereunder and no claims have been paid thereunder. Neither the Mortgage Loan Seller, nor to the Mortgage Loan Seller’s knowledge, any other holder of the Mortgage Loan, has done, by act or omission, anything that would materially impair the coverage under such Title Policy. Each Title Policy contains no exclusion for, or affirmatively insures (except for any Mortgaged Property located in a jurisdiction where such affirmative insurance is not available in which case such exclusion may exist), (a) that the Mortgaged Property shown on the survey is the same as the property legally described in the mortgage and (b) to the extent that the Mortgaged Property consists of two or more adjoining parcels, such parcels are contiguous.
9. Junior Liens. It being understood that B notes secured by the same mortgage as a Mortgage Loan are not subordinate mortgages or junior liens, except for any Mortgage Loan that is cross-collateralized and cross-defaulted with another Mortgage Loan, as of the Cut-off Date there are no subordinate mortgages or junior mortgage liens encumbering the related Mortgaged Propertyother than Permitted Encumbrances. The Mortgage Loan Seller has no knowledge of any mezzanine debt secured directly by interests in the related Mortgagor other than as set forth on an exhibit to the related Mortgage Loan Purchase Agreement.
10. Assignment of Leases and Rents. There exists as part of the related mortgage file an Assignment of Leases (either as a separate instrument or incorporated into the related mortgage). Subject to the Permitted Encumbrances and Title Exceptions, each related Assignment of Leases creates a valid first-priority collateral assignment of, or a valid
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first-priority lien or security interest in, rents and certain rights under the related lease or leases, subject only to a license granted to the related Mortgagor to exercise certain rights and to perform certain obligations of the lessor under such lease or leases, including the right to operate the related leased property, except as the enforcement thereof may be limited by the Standard Qualifications. The related mortgage or related Assignment of Leases, subject to applicable law and the Standard Qualifications, provides that, upon an event of default under the Mortgage Loan, a receiver may be appointed for the collection of rents or for the related mortgagee to enter into possession to collect the rents or for rents to be paid directly to the mortgagee.
11. Financing Statements. Subject to the Standard Qualifications, each Mortgage Loan or related security agreement establishes a valid security interest in, and a UCC-1 financing statement has been filed and/or recorded (or, in the case of fixtures, the mortgage constitutes a fixture filing) in all places necessary at the time of the origination of the Mortgage Loan to perfect a valid securityinterest in, the personal property (creation and perfection of which is governed by the UCC) owned by Mortgagor and necessary to operate such Mortgaged Property in its current use other than (1) non-material personal property, (2) personal property subject to purchase money security interests and (3) personal property that is leased equipment. Each UCC-1 financing statement, if any, filed with respect to personal property constituting a part of the related Mortgaged Property and each UCC-3 assignment, if any, filed with respect to such financing statement was in suitable form for filing in the filing office in which such financing statement was filed. Notwithstanding anything herein to the contrary, no representation is made as to the perfection of any security interest in rents or other personal property to the extent that possession or control of such items or actions other than the filing of Uniform Commercial Code financing statements is required to effect such perfection.
12. Condition of Property. The Mortgage Loan Seller or the originator of the Mortgage Loan inspected or caused to be inspectedeach related Mortgaged Property within six months of origination of the Mortgage Loan and within twelve months of the Cut-off Date.
An engineering report or property condition assessment was prepared by a third party engineering consultant in connection with the origination of each Mortgage Loan no more than twelve months prior to the Cut-off Date. To the Mortgage Loan Seller’s knowledge, based solely upon the due diligence customarily performed by the Mortgage Loan Seller in connection with the origination of similar commercial and multifamily loans intended for securitization, and except as set forth in such engineering report or property condition report or with respect to which repairs were required to be reserved for or made, (a) all major building systems for the improvements of each related Mortgaged Property are in good working order, and (b) each related Mortgaged Property (i) is free of any material damage, and (ii) is in good repair and condition, and (iii) is free of patent and observable structural defects, except, as to all statements in clauses (a) and (b) above, to the extent: (x) any damage or deficiencies would not reasonably be expected to materially and adversely affect the use or operation of the Mortgaged Property or the security intended to be provided by such mortgage, or repairs with respect to such damage or deficiencies are estimated to not exceed 5% of the original principal balance of the Mortgage Loan; (y) such repairs have been completed; or (z) escrows in an aggregate amount consistent with the standards utilized by the Mortgage Loan Seller in connection with the origination of similar commercial and multifamily loans intended for securitization, which escrows will in all events be in an aggregate amount not less than the estimated cost of such repairs.
To the Mortgage Loan Seller’s knowledge, based on the engineering report or property condition assessment and the Sponsor Diligence (as defined in paragraph 42), there are no issues with the physical condition of the Mortgaged Property that the Mortgage Loan Seller
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believes would have a material adverse effect on the current marketability or principal use of the Mortgaged Property other than those disclosed in the engineering report or Servicing File and those addressed in sub-clauses (x), (y), and (z) of the preceding sentence.
13. Taxes and Assessments. As of the date of origination and, to the Mortgage Loan Seller’s knowledge, as of the Cut-off Date, all taxes, governmental assessments and other outstanding governmental charges (including, without limitation, water and sewage charges) due with respect to the Mortgaged Property (excluding any related personal property) securing a Mortgage Loan that is orcould become a lien on the related Mortgaged Property that became due and owing prior to the Cut-off Date with respect to each related Mortgaged Property have been paid, or, if the appropriate amount of such taxes or charges is being appealed or is otherwise in dispute, the unpaid taxes or charges are covered by an escrow of funds or other security sufficient to pay such tax or charge and reasonably estimated interest and penalties, if any, thereon. For purposes of this representation and warranty, any such taxes, assessments and other charges shall not be considered due and payable until the date on which interest and/or penalties would be payable thereon.
14. Condemnation. As of the date of origination and to the Mortgage Loan Seller’s knowledge as of the Cut-off Date, there is no proceeding pending and, to the Mortgage Loan Seller’s knowledge as of the date of origination and as of the Cut-off Date, there is no proceeding threatened for the total or partial condemnation of such Mortgaged Property that would have a material adverse effect on the value, use or operation of the Mortgaged Property.
15. Actions Concerning Mortgage Loan. To the Mortgage Loan Seller’s knowledge, based on evaluation of the Title Policy (as defined in paragraph 8), an engineering report or property condition assessment as described inparagraph 12, applicable local law compliance materials as described in paragraph 26, the Sponsor Diligence (as defined in paragraph 42), and the ESA (as defined in paragraph 43), as of origination there was no pending or filed action, suit or proceeding, arbitration or governmental investigation involving any Mortgagor, guarantor, or Mortgagor’s interest in the Mortgaged Property, an adverse outcome of which would reasonably be expected to materially and adversely affect (a) such Mortgagor’s title to the Mortgaged Property, (b) the validity or enforceability of the mortgage, (c) such Mortgagor’s ability to perform under the related Mortgage Loan, (d) such guarantor’s ability to perform under the related guaranty, (e) the current marketability of the Mortgaged Property, (f) the principal benefit of the security intended to be provided by the Mortgage Loan documents, (g) the current ability of the Mortgaged Property to generate net cash flow sufficient to service such Mortgage Loan, or (h) the current principal use of the Mortgaged Property.
16. Escrow Deposits. All escrow deposits and escrow payments currently required to be escrowed with lender pursuant to each MortgageLoan (including capital improvements and environmental remediation reserves) are in the possession, or under the control, of the Mortgage Loan Seller or its servicer, and there are no delinquencies (subject to any applicable grace or cure periods) in connection therewith, and all such escrows and deposits (or the right thereto) that are required under the related Mortgage Loan documents are being conveyed by the Mortgage Loan Seller to the Depositor or its servicer. Any and all material requirements under the Mortgage Loan as to completion of any material improvements and as to disbursements of any funds escrowed for such purpose, which requirements were to have been complied with on or before the Closing Date, have been complied with in all material respects or the funds so escrowed have not been released unless such release was consistent with the Mortgage Loan Seller’s practices with respect to escrow releases or such released funds were otherwise used for their intended purpose. No
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other escrow amounts have been released except in accordance with the terms and conditions of the related Mortgage Loan documents.
17. No Holdbacks. The principal amount of the Mortgage Loan stated on the Mortgage Loan Schedule has been fully disbursed as of the Closing Date and there is no requirement for future advances thereunder (except in those cases where the full amount of the Mortgage Loan has been disbursed but a portion thereof is being held in escrow or reserve accounts pending the satisfaction of certain conditions relating to leasing, repairs, occupancy, performance or other matters with respect to the related Mortgaged Property, the Mortgagor or other considerationsdetermined by the Mortgage Loan Seller to merit such holdback), and any requirements or conditions to disbursements of any loan proceeds held in escrow have been satisfied with respect to any disbursement of any such escrow fund.
18. Insurance. Each related Mortgaged Property is, and is required pursuant to the related mortgage to be, insured by a property insurance policy providing coverage for loss in accordance with coverage found under a “special cause of loss form” or “all risk form” that includes replacement cost valuation issued by an insurer meeting the requirements of the related Mortgage Loan documents and having a claims-paying or financial strength rating of at least “A-:VIII” (for a Mortgage Loan with a principal balance below $35 million) and “A:VIII” (for a Mortgage Loan with a principal balance of $35 million or more) from A.M. Best Company or “A3” (or the equivalent) from Moody’s Investors Service, Inc. or “A-” from Standard & Poor’s Ratings Services (collectively the “Insurance Rating Requirements”), in an amount (subject to customary deductibles) not less than the lesser of (1) the original principal balance of the Mortgage Loan and (2) the full insurable value on a replacement cost basis of the improvements, furniture, furnishings, fixtures and equipment owned by Mortgagor included in the Mortgaged Property (with no deduction for physical depreciation), but, in any event, not less than the amount necessary or containing such endorsements as are necessary to avoid the operation of any coinsurance provisions with respect to the related Mortgaged Property.
Each related Mortgaged Property is also covered, and required to be covered pursuant to the related Mortgage Loan documents, by business interruption or rental loss insurance (except where an applicable tenant lease does not permit the tenant to abate rent under any circumstances), which (i) covers a period of not less than 12 months (or with respect to each Mortgage Loan with a principal balance of $35 million or more, 18 months), or a specified dollar amount which, in the reasonable judgment of the Mortgage Loan Seller, will cover no less than 12 months (18 months for Mortgage Loans with a principal balance of $35 million or more) of rental income; (ii) for a Mortgage Loan with a principal balance of $50 million or more contains a 180 day “extended period of indemnity”; and (iii) covers the actual loss sustained during the time period, or up to the specified dollar amount, set forth in clause (i) above.
If any material part of the improvements, exclusive of a parking lot, located on a Mortgaged Property is in an area identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards, the related Mortgagor is required to maintain insurance in the maximum amount available under the National Flood Insurance Program, plus such additional excess flood coverage in an amount as is generally required by the Mortgage Loan Seller for similar commercial and multifamily loans intended for securitization.
If windstorm and/or windstorm related perils and/or “named storms” are excluded from the primary property damage insurance policy the Mortgaged Property is insured by a separate windstorm insurance policy issued by an insurer meeting the Insurance Rating Requirements or endorsement covering damage from windstorm and/or windstorm related
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perils and/or named storms, in an amount not less than the lesser of (1) the original principal balance of the Mortgage Loan and (2) the full insurable value on a replacement cost basis of the improvements, furniture, furnishings, fixtures and equipment owned by the Mortgagor and included in the Mortgaged Property (with no deduction for physical depreciation), but, in any event, not less than the amount necessary or containing such endorsements as are necessary to avoid the operation of any coinsurance provisions with respect to the related Mortgaged Property by an insurer meeting the Insurance Rating Requirements.
The Mortgaged Property is covered, and required to be covered pursuant to the related Mortgage Loan documents, by a commercial general liability insurance policy issued by an insurer meeting the Insurance Rating Requirements including broad-form coverage for property damage, contractual damage and personal injury (including bodily injury and death) in amounts as are generally required by the Mortgage Loan Seller for similar commercial and multifamily loans intended for securitization, and in any event not less than $1 million per occurrence and $2 million in the aggregate.
An architectural or engineering consultant has performed an analysis of each of the Mortgaged Properties located in seismic zones 3 or 4 in order to evaluate the seismic condition of such property, for the sole purpose of assessing the probable maximum loss or scenario expected loss (“PML”) for the Mortgaged Property in the event of an earthquake. In such instance, the PML was based on a 475-year return period, which correlates to a 10% probability of exceedance in an exposure period of 50 years. If the resulting report concluded that the PML would exceed 20% of the amount of the replacement costs of the improvements, earthquake insurance on such Mortgaged Property was obtained by an insurer rated at least “A:VIII” by A.M. Best Company or “A3” (or the equivalent) from Moody’s Investors Service, Inc. or “A-” by Standard & Poor’s Ratings Services in an amount not less than 100% of the PML.
The Mortgage Loan documents require insurance proceeds in respect of a property loss to be applied either (a) to the repair or restoration of all or part of the related Mortgaged Property, with respect to all property losses in excess of 5% of the then-outstanding principal amount of the related Mortgage Loan, the lender (or a trustee appointed by it) having the right to hold and disburse such proceeds as the repair or restoration progresses, or (b) to the payment of the outstanding principal balance of such Mortgage Loan together with any accrued interest thereon.
All premiums on all insurance policies referred to in this section that are required by the Mortgage Loan documents to be paid as of the Cut-off Date have been paid, and such insurance policies name the lender under the Mortgage Loan and its successors and assigns as a loss payee under a mortgagee endorsement clause or, in the case of the general liability insurance policy, as named or additional insured. Such insurance policies will inure to the benefit of the trustee. Each related Mortgage Loan obligates the related Mortgagor to maintain all such insurance and, at such Mortgagor’s failure to do so, authorizes the lender to maintain such insurance at the Mortgagor’s cost and expense and to charge such Mortgagor for related premiums. All such insurance policies (other than commercial liability policies) require at least 10 days’ prior notice to the lender of termination or cancellation arising because of nonpayment of a premium and at least 30 days’ prior notice to the lender of termination or cancellation (or such lesser period, not less than 10 days, as may be required by applicable law) arising for any reason other than non-payment of a premium and no such notice has been received by the Mortgage Loan Seller.
19. Access; Utilities; Separate Tax Parcels. Based solely on evaluation of the Title Policy (as defined in paragraph 8) and survey, if any, an engineering report or property
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condition assessment as described in paragraph 12, applicable local law compliance materials as described in paragraph 26, the Sponsor Diligence (as defined in paragraph 42), and the ESA (as defined in paragraph 43), each Mortgaged Property (a) is located on or adjacent to a public road and has direct legal access to such road, or has permanent access from a recorded easement or right of way permitting ingress and egress to/from a public road, (b) is served by or has access rights to public or private water and sewer (or well and septic) and other utilities necessary for the current use of the Mortgaged Property, all of which are adequate for the current use of the Mortgaged Property, and (c) constitutes one or more separate tax parcels which do not include any property which is not part of the Mortgaged Property or is subject to an endorsement under the related Title Policy insuring the Mortgaged Property, or in certain cases, an application has been made or is required to be made to the applicable governing authority for creation of separate tax parcels (or the Mortgage Loan documents so require such application in the future), in which case the Mortgage Loan requires the Mortgagor to escrow an amount sufficient to pay taxes for the existing tax parcel of which the Mortgaged Property is a part until the separate tax parcels are created.
20. No Encroachments. To the Mortgage Loan Seller’s knowledge based solely on surveys obtained in connection with origination and the Title Policy obtained in connection with the origination of each Mortgage Loan, and except for encroachments that do not materially and adversely affect the current marketability or principal use of the Mortgaged Property: (a) all material improvements that were included for the purpose of determining the appraised value of the related Mortgaged Property at the time of the origination of such Mortgage Loan are within the boundaries of the related Mortgaged Property, except for encroachments that are insured against by the applicable Title Policy; (b) no material improvements on adjoining parcels encroach onto the related Mortgaged Property except for encroachments that are insured against by the applicable Title Policy; and (c) no material improvements encroach upon any easements except for encroachments that are insured against by the applicable Title Policy.
21. No Contingent Interest or Equity Participation. No Mortgage Loan has a shared appreciation feature, any other contingent interest feature or a negative amortization feature (except that an ARD Loan may provide for the accrual of the portion of interest in excess of the rate in effect prior to the Anticipated Repayment Date) or an equity participation by the Mortgage Loan Seller.
22. REMIC. The Mortgage Loan is a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code (but determined without regard to the rule in Treasury Regulations Section 1.860G-2(f)(2) that treats certain defective mortgage loans as qualified mortgages), and, accordingly, (A) the issue price of the Mortgage Loan to the related Mortgagor at origination did not exceed the non-contingent principal amount of the Mortgage Loan and (B) either: (a) such Mortgage Loan is secured by an interest in real property (including buildings and structural components thereof, but excluding personal property) having a fair market value (i) at the date the Mortgage Loan was originated at least equal to 80% of the adjusted issue price of the Mortgage Loan (together with any related Pari Passu Companion Loans) on such date or (ii) at the Closing Date at least equal to 80% of the adjusted issue price of the Mortgage Loan (together with any related Pari Passu Companion Loans) on such date,provided that for purposes hereof, the fair market value of the real property interest must first be reduced by (A) the amount of any lien on the real property interest that is senior to the Mortgage Loan and (B) a proportionate amount of any lien that is in parity with the Mortgage Loan; or (b) substantially all of the proceeds of such Mortgage Loan were used to acquire, improve or protect the real property which served as the only security for such Mortgage Loan (other than a recourse feature or
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other third-party credit enhancement within the meaning of Treasury Regulations Section 1.860G-2(a)(1)(ii)). If the Mortgage Loan was “significantly modified” prior to the Closing Date so as to result in a taxable exchange under Section 1001 of the Code, it either (x) was modified as a result of the default or reasonably foreseeable default of such Mortgage Loan or (y) satisfies the provisions of either sub-clause (B)(a)(i) above (substituting the date of the last such modification for the date the Mortgage Loan was originated) or sub-clause (B)(a)(ii), including the proviso thereto. Any prepayment premium and yield maintenance charges applicable to the Mortgage Loan constitute “customary prepayment penalties” within the meaning of Treasury Regulations Section 1.860G-1(b)(2). All terms used in this paragraph shall have the same meanings as set forth in the related Treasury Regulations.
23. Compliance with Usury Laws. The mortgage rate (exclusive of any default interest, late charges, yield maintenance charge, or prepayment premiums) of such Mortgage Loan complied as of the date of origination with, or was exempt from, applicable state or federal laws, regulations and other requirements pertaining to usury.
24. Authorized to do Business. To the extent required under applicable law, as of the Cut-off Date or as of the date that such entity held the mortgage note, each holder of the mortgage note was authorized to transact and do business in the jurisdiction in which each related Mortgaged Property is located, or the failure to be so authorized does not materially and adversely affect the enforceability of such Mortgage Loan by the Trust.
25. Trustee under Deed of Trust. With respect to each mortgage which is a deed of trust, a trustee, duly qualified under applicable law to serve as such, currently so serves and is named in the deed of trust or has been substituted in accordance with the mortgage and applicable law or may be substituted in accordance with the mortgage and applicable law by the related mortgagee, and, except in connection with a trustee’s sale after a default by the related Mortgagor or in connection with any full or partial release of the related Mortgaged Property or related security for such Mortgage Loan, no fees are payable to such trustee except forde minimis fees paid.
26. Local Law Compliance. To the Mortgage Loan Seller’s knowledge, based upon any of a letter from any governmental authorities, a legal opinion, an architect’s letter, a zoning consultant’s report, an endorsement to the related Title Policy, a survey, or other affirmative investigation of local law compliance consistent with the investigation conducted by the Mortgage Loan Seller for similar commercial and multifamily mortgage loans intended for securitization, the improvements located on or forming part of each Mortgaged Property securing a Mortgage Loan are in material compliance with applicable laws, zoning ordinances, rules, covenants, and restrictions (collectively “Zoning Regulations”) governing the occupancy, use, and operation of such Mortgaged Property or constitute a legal non-conforming use or structure and any non-conformity with zoning laws constitutes a legal non-conforming use or structure which does not materially and adversely affect the use, operation or value of such Mortgaged Property. In the event of casualty or destruction, (a) the Mortgaged Property may be restored or repaired to the full extent necessary to maintain the use of the structure immediately prior to such casualty or destruction, (b) law and ordinance insurance coverage has been obtained for the Mortgaged Property in amounts customarily required by the Mortgage Loan Seller for similar commercial and multifamily loans intended for securitization, or (c) the inability to restore the Mortgaged Property to the full extent of the use or structure immediately prior to the casualty would not materially and adversely affect the use or operation of such Mortgaged Property.
27. Licenses and Permits. Each Mortgagor covenants in the Mortgage Loan documents that it shall keep all material licenses, permits, franchises, certificates of occupancy and
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applicable governmental approvals necessary for the operation of the Mortgaged Property in full force and effect, and to the Mortgage Loan Seller’s knowledge based upon any of a letter from any government authorities, zoning consultant’s report or other affirmative investigation of local law compliance consistent with the investigation conducted by the Mortgage Loan Seller for similar commercial and multifamily mortgage loans intended for securitization; all such material licenses, permits, franchises, certificates of occupancy and applicable governmental approvals are in effect or the failure to obtain or maintain such material licenses, permits, franchises or certificates of occupancy and applicable governmental approvals does not materially and adversely affect the use and/or operation of the Mortgaged Property as it was used and operated as of the date of origination of the Mortgage Loan or the rights of a holder of the related Mortgage Loan. The Mortgage Loan requires the related Mortgagor to be qualified to do business in the jurisdiction in which the related Mortgaged Property is located and for the Mortgagor and the Mortgaged Property to be in compliance in all material respects with all regulations, zoning and building laws.
28. Recourse Obligations. The Mortgage Loan documents for each Mortgage Loan (a) provide that such Mortgage Loan becomes full recourse to the Mortgagor and guarantor (which is a natural person or persons, or an entity or entities distinct from the Mortgagor (but may be affiliated with the Mortgagor) that collectively, as of the date of origination of the related Mortgage Loan, have assets other than equity in the related Mortgaged Property that are notde minimis) in any of the following events (or negotiated provisions of substantially similar effect): (i) if any petition for bankruptcy, insolvency, dissolution or liquidation pursuant to federal bankruptcy law, or any similar federal or state law, shall be filed by, consented to, or acquiesced in by, the Mortgagor; (ii) Mortgagor or guarantor shall have solicited or caused to be solicited petitioning creditors to cause an involuntary bankruptcy filing with respect to the Mortgagor or (iii) transfers of either the Mortgaged Property or controlling equity interests in Mortgagor made in violation of the Mortgage Loan documents; and (b) contains provisions for recourse against the Mortgagor and guarantor (which is a natural person or persons, or an entity or entities distinct from the Mortgagor (but may be affiliated with the Mortgagor) that collectively, as of the date of origination of the related Mortgage Loan, have assets other than equity in the related Mortgaged Property that are notde minimis), for losses and damages resulting from the following (or negotiated provisions of substantially similar effect): (i) Mortgagor’s misappropriation of rents after an event of default, security deposits, insurance proceeds, or condemnation awards; (ii) Mortgagor’s fraud or intentional misrepresentation; (iii) criminal acts by the Mortgagor or guarantor resulting in the seizure or forfeiture of all or part of the Mortgaged Property; (iv) breaches of the environmental covenants in the Mortgage Loan documents; or (v) Mortgagor’s commission of material physical waste at the Mortgaged Property.
29. Mortgage Releases. The terms of the related mortgage or related Mortgage Loan documents do not provide for release of any material portion of the Mortgaged Property from the lien of the mortgage except (a) a partial release, accompanied by principal repayment, or partial defeasance (as described in paragraph 34) of not less than a specified percentage at least equal to 110% of the related allocated loan amount of such portion of the Mortgaged Property, (b) upon payment in full of such Mortgage Loan, (c) upon a Defeasance (defined in paragraph 34 below), (d) releases of out-parcels that are unimproved or other portions of the Mortgaged Property which will not have a material adverse effect on the underwritten value of the Mortgaged Property and which were not afforded any value in the appraisal obtained at the origination of the Mortgage Loan and are not necessary for physical access to the Mortgaged Property or compliance with zoning requirements, or (e) as required pursuant to an order of condemnation. With respect to any partial release under the preceding clauses (a) or (d), either: (x) such release of collateral (i) would not constitute a “significant modification” of the subject Mortgage Loan within the
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meaning of Treasury Regulations Section 1.860G-2(b)(2) and (ii) would not cause the subject Mortgage Loan to fail to be a “qualified mortgage” within the meaning of Section 860G(a)(3)(A) of the Code; or (y) the mortgagee or servicer can, in accordance with the related Mortgage Loan documents, condition such release of collateral on the related Mortgagor’s delivery of an opinion of tax counsel to the effect specified in the immediately preceding clause (x). For purposes of the preceding clause (x), if the fair market value of the real property constituting such Mortgaged Property after the release is not equal to at least 80% of the principal balance of the Mortgage Loan (together with any related Pari Passu Companion Loans) outstanding after the release, the Mortgagor is required to make a payment of principal in an amount not less than the amount required by the REMIC Provisions.
In the case of any Mortgage Loan, in the event of a taking of any portion of a Mortgaged Property by a State or any political subdivision or authority thereof, whether by legal proceeding or by agreement, the Mortgagor can be required to pay down the principal balance of the Mortgage Loan (together with any related Pari Passu Companion Loans) in an amount not less than the amount required by the REMIC Provisions and, to such extent, the award from any such taking may not be required to be applied to the restoration of the Mortgaged Property or released to the borrower, if, immediately after the release of such portion of the Mortgaged Property from the lien of the mortgage (but taking into account the planned restoration) the fair market value of the real property constituting the remaining Mortgaged Property is not equal to at least 80% of the remaining principal balance of the Mortgage Loan (together with any related Pari Passu Companion Loans).
No such Mortgage Loan that is secured by more than one Mortgaged Property or that is cross-collateralized with another Mortgage Loan permits the release of cross-collateralization of the related Mortgaged Properties or a portion thereof, including due to a partial condemnation, other than in compliance with the REMIC Provisions.
30. Financial Reporting and Rent Rolls. Each Mortgage Loan requires the Mortgagor to provide the owner or holder of the Mortgage Loan with (a) quarterly (other than for single-tenant properties) and annual operating statements, (b) quarterly (other than for single-tenant properties) rent rolls (or maintenance schedules in the case of Mortgage Loans secured by residential cooperative properties) for properties that have any individual lease which accounts for more than 5% of the in-place base rent, and (c) annual financial statements.
31. Acts of Terrorism Exclusion. With respect to each Mortgage Loan over $20 million, and to the Mortgage Loan Seller’s knowledge with respect to each Mortgage Loan of $20 million or less, as of origination the related special-form all-risk insurance policy and business interruption policy (issued by an insurer meeting the Insurance Rating Requirements) do not specifically exclude Acts of Terrorism, as defined in the Terrorism Risk Insurance Act of 2002, as amended by the Terrorism Risk Insurance Program Reauthorization Act of 2007 and the Terrorism Risk Insurance Program Reauthorization Act of 2015 (collectively referred to as “TRIA”), from coverage, or if such coverage is excluded, it is covered by a separate terrorism insurance policy. With respect to each Mortgage Loan, the related Mortgage Loan documents do not expressly waive or prohibit the mortgagee from requiring coverage for Acts of Terrorism, as defined in TRIA, or damages related thereto, except to the extent that any right to require such coverage may be limited by availability on commercially reasonable terms, or as otherwise indicated on Annex C-2.
32. Due on Sale or Encumbrance. Subject to specific exceptions set forth below, each Mortgage Loan contains a “due-on-sale” or other such provision for the acceleration of the payment of the unpaid principal balance of such Mortgage Loan if, without the consent of
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the holder of the mortgage (which consent, in some cases, may not be unreasonably withheld) and/or complying with the requirements of the related Mortgage Loan documents (which provide for transfers without the consent of the lender which are customarily acceptable to prudent commercial and multifamily mortgage lending institutions lending on the security of property comparable to the related Mortgaged Property, including, but not limited to, transfers of worn-out or obsolete furnishings, fixtures, or equipment promptly replaced with property of equivalent value and functionality and transfers by leases entered into in accordance with the Mortgage Loan documents), (a) the related Mortgaged Property, or any controlling equity interest in the related Mortgagor, is directly or indirectly pledged, transferred or sold, other than as related to (i) family and estate planning transfers or transfers upon death or legal incapacity, (ii) transfers to certain affiliates as defined in the related Mortgage Loan documents, (iii) transfers of less than a controlling interest in a Mortgagor, (iv) transfers to another holder of direct or indirect equity in the Mortgagor, a specific Person designated in the related Mortgage Loan documents or a Person satisfying specific criteria identified in the related Mortgage Loan documents, (v) transfers of common stock in publicly traded companies or (vi) a substitution or release of collateral within the parameters of paragraphs 29 and 34 herein, or (vii) by reason of any mezzanine debt that existed at the origination of the related Mortgage Loan as set forth on an exhibit to the related Mortgage Loan Purchase Agreement, or future permitted mezzanine debt as set forth on an exhibit to the related Mortgage Loan Purchase Agreement or (b) the related Mortgaged Property is encumbered with a subordinate lien or security interest against the related Mortgaged Property, other than (i) any companion interest of any Mortgage Loan or any subordinate debt that existed at origination and is permitted under the related Mortgage Loan documents, (ii) purchase money security interests (iii) any Mortgage Loan that is cross-collateralized and cross-defaulted with another Mortgage Loan as set forth on an exhibit to the related Mortgage Loan Purchase Agreement or (iv) Permitted Encumbrances. The Mortgage or other Mortgage Loan documents provide that to the extent any Rating Agency fees are incurred in connection with the review of and consent to any transfer or encumbrance, the Mortgagor is responsible for such payment along with all other reasonable fees and expenses incurred by the Mortgagee relative to such transfer or encumbrance.
33. Single-Purpose Entity. Each Mortgage Loan requires the Mortgagor to be a Single-Purpose Entity for at least as long as the Mortgage Loan is outstanding. Each Mortgage Loan with a Cut-off Date Principal Balance of $30 million or more has a counsel’s opinion regarding non-consolidation of the Mortgagor. For this purpose, a “Single-Purpose Entity” shall mean an entity, other than an individual, whose organizational documents and the related Mortgage Loan documents (or if the Mortgage Loan has a Cut-off Date Principal Balance equal to $10 million or less, its organizational documents or the related Mortgage Loan documents) provide substantially to the effect that it was formed or organized solely for the purpose of owning and operating one or more of the Mortgaged Properties and prohibit it from engaging in any business unrelated to such Mortgaged Property or Properties, and whose organizational documents further provide, or which entity represented in the related Mortgage Loan documents, substantially to the effect that it does not have any assets other than those related to its interest in and operation of such Mortgaged Property or Properties, or any indebtedness other than as permitted by the related mortgage(s) or the other related Mortgage Loan documents, that it has its own books and records and accounts separate and apart from those of any other person (other than a Mortgagor for a Mortgage Loan that is cross-collateralized and cross-defaulted with the related Mortgage Loan), and that it holds itself out as a legal entity, separate and apart from any other person or entity.
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34. Defeasance. With respect to any Mortgage Loan that, pursuant to the Mortgage Loan documents, can be defeased (a “Defeasance”), (i) the Mortgage Loan documents provide for defeasance as a unilateral right of the Mortgagor, subject to satisfaction of conditions specified in the Mortgage Loan documents; (ii) the Mortgage Loan cannot be defeased within two years after the Closing Date; (iii) the Mortgagor is permitted to pledge only United States “government securities” within the meaning of Treasury Regulations Section 1.860G-2(a)(8)(ii), the revenues from which will be sufficient to make all scheduled payments under the Mortgage Loan when due, including the entire remaining principal balance on the maturity date (or on or after the first date on which payment may be made without payment of a yield maintenance charge or prepayment penalty) or, if the Mortgage Loan is an ARD Loan, the entire principal balance outstanding on the Anticipated Repayment Date (or on or after the first date on which payment may be made without payment of a yield maintenance charge or prepayment penalty), and if the Mortgage Loan permits partial releases of real property in connection with partial defeasance, the revenues from the collateral will be sufficient to pay all such scheduled payments calculated on a principal amount equal to a specified percentage at least equal to 110% of the allocated loan amount for the real property to be released; (iv) the defeasance collateral is not permitted to be subject to prepayment, call, or early redemption; (v) the Mortgagor is required to provide a certification from an independent certified public accountant that the collateral is sufficient to make all scheduled payments under the mortgage note as set forth in clause (iii) above; (vi) the defeased note and the defeasance collateral are required to be assumed by a Single-Purpose Entity; (vii) the Mortgagor is required to provide an opinion of counsel that the Trustee has a perfected security interest in such collateral prior to any other claim or interest; and (viii) the Mortgagor is required to pay all rating agency fees associated with defeasance (if rating confirmation is a specific condition precedent thereto) and all other reasonable expenses associated with defeasance, including, but not limited to, accountant’s fees and opinions of counsel.
35. Fixed Interest Rates. Each Mortgage Loan bears interest at a rate that remains fixed throughout the remaining term of such Mortgage Loan, except in the case of ARD loans and situations where default interest is imposed.
36. Ground Leases. For purposes of these representations and warranties, a “Ground Lease” shall mean a lease creating a leasehold estate in real property where the fee owner as the ground lessor conveys for a term or terms of years its entire interest in the land and buildings and other improvements, if any, comprising the premises demised under such lease to the ground lessee (who may, in certain circumstances, own the building and improvements on the land), subject to the reversionary interest of the ground lessor as fee owner.
With respect to any Mortgage Loan where the Mortgage Loan is secured by a Ground Leasehold estate in whole or in part, and the related mortgage does not also encumber the related lessor’s fee interest in such Mortgaged Property, based upon the terms of the Ground Lease and any estoppel or other agreement received from the ground lessor in favor of Mortgage Loan Seller, its successors and assigns (collectively, the “Ground Lease and Related Documents”), Mortgage Loan Seller represents and warrants that:
(A) The Ground Lease or a memorandum regarding such Ground Lease has been duly recorded or submitted for recordation in a form that is acceptable for recording in the applicable jurisdiction. The Ground Lease and Related Documents permit the interest of the lessee to be encumbered by the related mortgage and do not restrict the use of the related Mortgaged Property by such lessee, its successors or assigns in a manner that would materially adversely affect the security provided by the related mortgage. No material change in the terms of the Ground Lease had occurred since its
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recordation, | except by any written instruments which are included in the related mortgage file; |
(B) The lessor under such Ground Lease has agreed in a writing included in the related mortgage file (or in such Ground Lease and Related Documents) that the Ground Lease may not be amended, modified, canceled or terminated by agreement of lessor and lessee without the prior written consent of the lender and that any such action without such consent is not binding on the lender, its successors or assigns,provided that lender has provided lessor with notice of its lien in accordance with the terms of the Ground Lease;
(C) The Ground Lease has an original term (or an original term plus one or more optional renewal terms, which, under all circumstances, may be exercised, and will be enforceable, by either borrower or the mortgagee) that extends not less than 20 years beyond the stated maturity of the related Mortgage Loan, or 10 years past the stated maturity if such Mortgage Loan fully amortizes by the stated maturity (or with respect to a Mortgage Loan that accrues on an actual 360 basis, substantially amortizes);
(D) The Ground Lease either (i) is not subject to any interests, estates, liens or encumbrances superior to, or of equal priority with, the mortgage, except for the related fee interest of the ground lessor and the Permitted Encumbrances and Title Exceptions; or (ii) is the subject of a subordination, non-disturbance or attornment agreement or similar agreement to which the mortgagee on the lessor’s fee interest is subject;
(E) Subject to the notice requirements of the Ground Lease and Related Documents, the Ground Lease does not place commercially unreasonable restrictions on the identity of the mortgagee and the Ground Lease is assignable to the holder of the Mortgage Loan and its successors and assigns without the consent of the lessor thereunder (or, if such consent is required it either has been obtained or cannot be unreasonably withheld,provided that such Ground Lease has not been terminated and all amounts due thereunder have been paid), and in the event it is so assigned, it is further assignable by the holder of the Mortgage Loan and its successors and assigns without the consent of the lessor (or, if such consent is required it either has been obtained or cannot be unreasonably withheld,provided that such Ground Lease has not been terminated and all amounts due thereunder have been paid);
(F) The Mortgage Loan Seller has not received any written notice of material default under or notice of termination of such Ground Lease. To the Mortgage Loan Seller’s knowledge, there is no material default under such Ground Lease and no condition that, but for the passage of time or giving of notice, would result in a material default under the terms of such Ground Lease and to the Mortgage Loan Seller’s knowledge, such Ground Lease is in full force and effect as of the Closing Date;
(G) The Ground Lease and Related Documents require the lessor to give to the lender written notice of any default, provides that no notice of default or termination is effective against the lender unless such notice is given to the lender;
(H) A lender is permitted a reasonable opportunity (including, where necessary, sufficient time to gain possession of the interest of the lessee under the Ground Lease through legal proceedings) to cure any default under the Ground Lease which is curable after the lender’s receipt of notice of any default before the lessor may terminate the Ground Lease;
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(I) The Ground Lease does not impose any restrictions on subletting that would be viewed as commercially unreasonable by the Mortgage Loan Seller in connection with the origination of similar commercial or multifamily loans intended for securitization;
(J) Under the terms of the Ground Lease and Related Documents, any related insurance proceeds or the portion of the condemnation award allocable to the ground lessee’s interest (other than in respect of a total or substantially total loss or taking as addressed in subpart (K)) will be applied either to the repair or to restoration of all or part of the related Mortgaged Property with (so long as such proceeds are in excess of the threshold amount specified in the related Mortgage Loan documents) the lender or a trustee appointed by it having the right to hold and disburse such proceeds as repair or restoration progresses, or to the payment of the outstanding principal balance of the Mortgage Loan, together with any accrued interest;
(K) In the case of a total or substantially total taking or loss, under the terms of the Ground Lease and Related Documents, any related insurance proceeds, or portion of the condemnation award allocable to ground lessee’s interest in respect of a total or substantially total loss or taking of the related Mortgaged Property to the extent not applied to restoration, will be applied first to the payment of the outstanding principal balance of the Mortgage Loan, together with any accrued interest; and
(L) Provided that the lender cures any defaults which are susceptible to being cured, the ground lessor has agreed to enter into a new lease with lender upon termination of the Ground Lease for any reason, including rejection of the Ground Lease in a bankruptcy proceeding.
37. Servicing. The servicing and collection of each Mortgage Loan complied with all applicable laws and regulations and was in all material respects legal, proper and in accordance with customary commercial mortgage servicing practices.
38. Origination and Underwriting. The origination practices of the Mortgage Loan Seller (or the related originator if the Mortgage Loan Seller was not the originator) with respect to each Mortgage Loan have been, in all material respects, legal and as of the date of its origination, such Mortgage Loan and the origination thereof complied in all material respects with, or was exempt from, all requirements of federal, state or local law relating to the origination of such Mortgage Loan;provided that such representation and warranty does not address or otherwise cover any matters with respect to federal, state or local law otherwise covered in this Annex C-1.
39. Rent Rolls; Operating Histories. The Mortgage Loan Seller has obtained a rent roll (or a maintenance schedule in the case of a Mortgage Loan secured by a residential cooperative property) (the “Certified Rent Roll(s)”) other than with respect to hospitality or single tenant properties certified by the related Mortgagor or the related guarantor(s) as accurate and complete in all material respects as of a date within 180 days of the date of origination of the related Mortgage Loan. The Mortgage Loan Seller has obtained operating histories (the “Certified Operating Histories”) with respect to each Mortgaged Property certified by the related Mortgagor or the related guarantor(s) as accurate and complete in all material respects as of a date within 180 days of the date of origination of the related Mortgage Loan.
40. No Material Default; Payment Record. No Mortgage Loan has been more than 30 days delinquent, without giving effect to any grace or cure period, in making required payments in the prior 12 months (or since origination if such Mortgage Loan has been originated within the past 12 months), and as of Cut-off Date, no Mortgage Loan is
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delinquent (beyond any applicable grace or cure period) in making required payments. To the Mortgage Loan Seller’s knowledge, there is (a) no material default, breach, violation or event of acceleration existing under the related Mortgage Loan, or (b) no event (other than payments due but not yet delinquent) which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a material default, breach, violation or event of acceleration;provided,however, that this representation and warranty does not cover any default, breach, violation or event of acceleration that specifically pertains to or arises out of an exception scheduled to any other representation and warranty made by the Mortgage Loan Seller in this Annex C-1. No person other than the holder of such Mortgage Loan may declare any event of default under the Mortgage Loan or accelerate any indebtedness under the Mortgage Loan documents.
41. Bankruptcy. As of the date of origination of the related Mortgage Loan and to the Mortgage Loan Seller’s knowledge as of the Cut-off Date, neither the Mortgaged Property (other than any tenants of such Mortgaged Property), nor any portion thereof, is the subject of, and no Mortgagor, guarantor or tenant occupying a single-tenant property is a debtor in state or federal bankruptcy, insolvency or similar proceeding.
42. Organization of Mortgagor. The Mortgage Loan Seller has obtained an organizational chart or other description of each Mortgagor which identifies all beneficial controlling owners of the Mortgagor (i.e., managing members, general partners or similar controlling person for such Mortgagor) (the “Controlling Owner”). The Mortgage Loan Seller (1) required questionnaires to be completed by each Controlling Owner and guarantor or performed other processes designed to elicit information from each Controlling Owner and guarantor regarding such Controlling Owner’s or guarantor’s prior history regarding any bankruptcies, any felony convictions in accordance with the standards utilized by the Mortgage Loan Seller in connection with the origination of similar commercial and multifamily loans intended for securitization, and (2) performed or caused to be performed searches of the public records or services such as Lexis/Nexis or NCO, or a similar service designed to elicit information about each Controlling Owner and guarantor regarding such Controlling Owner’s or guarantor’s prior history regarding any bankruptcies, any felony convictions, in accordance with the standards utilized by the Mortgage Loan Seller in connection with the origination of similar commercial and multifamily loans intended for securitization. ((1) and (2) collectively, the “Sponsor Diligence”). Based solely on the Sponsor Diligence, to the knowledge of the Mortgage Loan Seller, no Controlling Owner or guarantor (i) was in a state or federal bankruptcy or insolvency proceeding, (ii) had a prior record of having been in a state or federal bankruptcy or insolvency, or (iii) had been convicted of a felony.
43. Environmental Conditions. A Phase I environmental site assessment (or update of a previous Phase I and or Phase II environmental site assessment) and, with respect to certain Mortgage Loans, a Phase II environmental site assessment (collectively, an “ESA”) meeting ASTM requirements conducted by a reputable environmental consultant in connection with such Mortgage Loan within 12 months prior to its origination date (or an update of a previous ESA was prepared), and such ESA (i) did not identify the existence of recognized environmental conditions (as such term is defined in ASTM E1527-05 or its successor, hereinafter “Environmental Condition”) at the related Mortgaged Property or the need for further investigation, or (ii) if the existence of an Environmental Condition or need for further investigation was indicated in any such ESA, then at least one of the following statements is true: (A) an amount reasonably estimated by a reputable environmental consultant to be sufficient to cover the estimated cost to cure any material noncompliance with applicable Environmental Laws or the Environmental Condition has been escrowed by the related Mortgagor and is held or controlled by the related lender; (B) if the only
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Environmental Condition relates to the presence of asbestos-containing materials, radon in indoor air, lead based paint or lead in drinking water, the only recommended action in the ESA is the institution of such a plan, an operations or maintenance plan has been required to be instituted by the related Mortgagor that can reasonably be expected to mitigate the identified risk; (C) the Environmental Condition identified in the related environmental report was remediated or abated in all material respects prior to the date hereof, and, if and as appropriate, a no further action or closure letter was obtained from the applicable governmental regulatory authority (or the environmental issue affecting the related Mortgaged Property was otherwise listed by such governmental authority as “closed” or a reputable environmental consultant has concluded that no further action is required); (D) an environmental policy or a lender’s pollution legal liability insurance policy meeting the requirements set forth below that covers liability for the identified circumstance or condition was obtained from an insurer rated no less than “A-” (or the equivalent) by Moody’s, S&P and/or Fitch; (E) a party not related to the Mortgagor was identified as the responsible party for such condition or circumstance and such responsible party has financial resources reasonably estimated to be adequate to address the situation; or (F) a party related to the Mortgagor having financial resources reasonably estimated to be adequate to address the situation is required to take action. To the Mortgage Loan Seller’s knowledge, except as set forth in the ESA, there is no Environmental Condition (as such term is defined in ASTM E1527-05 or its successor) at the related Mortgaged Property.
In the case of each Mortgage Loan set forth on an exhibit to the related Mortgage Loan Purchase Agreement, (i) such Mortgage Loan is the subject of an environmental insurance policy, issued by the issuer set forth on such exhibit (the “Policy Issuer”) and effective as of the date thereof (the “Environmental Insurance Policy”), (ii) as of origination and to the Mortgage Loan Seller’s knowledge as of the Cut-off Date the Environmental Insurance Policy is in full force and effect, there is no deductible and the Trustee will within 60 days following the Closing Date be a named insured under such policy either (A) directly or as an assignee of the originator, or (B) upon the Mortgage Loan Seller’s or its designee’s providing notice of the transfer of the Mortgage Loan to the Trust in accordance with the terms of such policy, which the Mortgage Loan Seller or its designee shall provide, (iii)(a) a property condition or engineering report was prepared, if the related Mortgaged Property was constructed prior to 1985, with respect to asbestos-containing materials (“ACM”) and, if the related Mortgaged Property is a multifamily property, with respect to radon gas (“RG”) and lead-based paint (“LBP”), and (b) if such report disclosed the existence of a material and adverse LBP, ACM or RG environmental condition or circumstance affecting the related Mortgaged Property, the related Mortgagor (A) was required to remediate the identified condition prior to closing the Mortgage Loan or provide additional security or establish with the mortgagee a reserve in an amount deemed to be sufficient by the Mortgage Loan Seller, for the remediation of the problem, and/or (B) agreed in the Mortgage Loan documents to establish an operations and maintenance plan after the closing of the Mortgage Loan that should reasonably be expected to mitigate the environmental risk related to the identified LBP, ACM or RG condition, (iv) on the effective date of the Environmental Insurance Policy, the Mortgage Loan Seller as originator had no knowledge of any material and adverse environmental condition or circumstance affecting the Mortgaged Property (other than the existence of LBP, ACM or RG) that was not disclosed to the Policy Issuer in one or more of the following: (a) the application for insurance, (b) a Mortgagor questionnaire that was provided to the Policy Issuer, or (c) an engineering or other report provided to the Policy Issuer, and (v) the premium of any Environmental Insurance Policy has been paid through the maturity of the policy’s term and the term of such policy extends at least three years beyond the maturity of the Mortgage Loan (or, in the case of an ARD Loan, the related Anticipated Repayment Date).
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44. Lease Estoppels. With respect to each Mortgage Loan secured by retail, office or industrial properties, the Mortgage Loan Seller requested the related Mortgagor to obtain estoppels from each commercial tenant with respect to the Certified Rent Roll (except for tenants for whom the related lease income was excluded from the Mortgage Loan Seller’s underwriting). With respect to each Mortgage Loan predominantly secured by a retail, office or industrial property leased to a single tenant, the Mortgage Loan Seller reviewed such estoppel obtained from such tenant no earlier than 90 days prior to the origination date of the related Mortgage Loan (or such longer period as the Mortgage Loan Seller may deem reasonable and appropriate based on the Mortgage Loan Seller’s practices in connection with the origination of similar commercial and multifamily loans intended for securitization), and to the Mortgage Loan Seller’s knowledge, based solely on the related estoppel, (x) the related lease is in full force and effect and (y) there exists no material default under such lease, either by the lessee thereunder or by the lessor subject, in each case, to customary reservations of tenant’s rights, such as with respect to CAM and pass-through audits and verification of landlord’s compliance with co-tenancy provisions.
45. Appraisal. The mortgage file contains an appraisal of the related Mortgaged Property with an appraisal date within 6 months of the Mortgage Loan origination date, and within 12 months of the Cut-off Date. The appraisal is signed by an appraiser that (i) was engaged directly by the originator of the Mortgage Loan or the Mortgage Loan Seller, or a correspondent or agent of the originator of the Mortgage Loan or the Mortgage Loan Seller, and (ii) to the Mortgage Loan Seller’s knowledge, had no interest, direct or indirect, in the Mortgaged Property or the Mortgagor or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Mortgage Loan. Each appraiser has represented in such appraisal or in a supplemental letter that the appraisal satisfies the requirements of the “Uniform Standards of Professional Appraisal Practice” as adopted by the Appraisal Standards Board of the Appraisal Foundation.
46. Mortgage Loan Schedule. The information pertaining to each Mortgage Loan which is set forth in the Mortgage Loan Schedule attached as an exhibit to this Mortgage Loan Purchase Agreement is true and correct in all material respects as of the Cut-off Date and contains all information required by the Pooling and Servicing Agreement to be contained therein.
47. Cross-Collateralization. No Mortgage Loan is cross-collateralized or cross-defaulted with any other mortgage loan that is outside the Mortgage Pool, except in the case of a Mortgage Loan that is part of a Loan Combination.
48. Advance of Funds by the Mortgage Loan Seller. Except for loan proceeds advanced at the time of loan origination or other payments contemplated by the Mortgage Loan documents, no advance of funds has been made by the Mortgage Loan Seller to the related Mortgagor, and no funds have been received from any person other than the related Mortgagor or an affiliate, directly, or, to the knowledge of the Mortgage Loan Seller, indirectly for, or on account of, payments due on the Mortgage Loan. Neither the Mortgage Loan Seller nor any affiliate thereof has any obligation to make any capital contribution to any Mortgagor under a Mortgage Loan, other than contributions made on or prior to the date hereof.
49. Compliance with Anti-Money Laundering Laws. Seller has complied in all material respects with all applicable anti-money laundering laws and regulations, including without limitation the USA Patriot Act of 2001 with respect to the origination of the Mortgage Loan.
C-1-19 |
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Annex C-2
Exceptions to Mortgage Loan Representations and Warranties
The exceptions to the representations and warranties set forth below are grouped by Mortgage Loan Seller and listed by the number of the related representation and warranty set forth on Annex C-1 and the mortgage loan name and number identified on Annex A-1. Capitalized terms used but not otherwise defined in this Annex C-2 shall have the meanings set forth in Annex B or, if not defined therein, in the main body of this free writing prospectus or, if not defined therein, in the related Mortgage Loan Purchase Agreement.
Wells Fargo Bank, National Association
Representation Number on Annex C-1 |
Mortgage Loan Name and Number as Identified on |
Description of Exception | ||
(8) Permitted Liens; Title Insurance | IRG – Ellsworth Bailey Saratoga (Loan No. 46) | Tenant (A.R.M. Opco) has Right of First Refusal (ROFR) to purchase the Saratoga I property (allocated loan amount of $2,400,000) if bona fide offer received borrower otherwise willing to accept; ROFR is not extinguished by foreclosure; however, the ROFR does not apply to foreclosure or deed in lieu thereof. | ||
(8) Permitted Liens; Title Insurance | 1321 Harbor Bay Parkway (Loan No. 54) | The mortgaged property consists of one unit in a land condominium. The borrower has a 12.5% voting rights interest in the related owners’ association. Each unit owner has responsibility for maintenance and repairs of its own building and exclusive use easement areas. The association’s duties are limited to landscaping, maintenance of private roads and the like. | ||
(8) Permitted Liens; Title Insurance | 8211 Town Center Drive (Loan No. 59) | Single tenant (Mariner Financial) has Right of First Refusal (ROFR) to purchase subject property if bona fide offer received borrower otherwise willing to accept; ROFR is not extinguished by foreclosure unless tenant is in default of its lease beyond applicable cure periods (in which event tenant’s non-disturbance protections would not apply). | ||
(8) Permitted Liens; Title Insurance | Walgreens – Duncanville, TX (Loan No. 62) | Single tenant (Walgreen Co.) has Right of First Refusal (ROFR) to purchase subject property if bona fide offer received borrower otherwise willing to accept; ROFR is not extinguished by foreclosure; however, the ROFR does not apply to foreclosure or deed in lieu thereof. | ||
(8) Permitted Liens; Title Insurance | Walgreens – Milwaukee (Loan No. 83) | Single tenant (Walgreen Co.) has Right of First Refusal (ROFR) to purchase subject property if bona fide offer received borrower otherwise willing to accept; ROFR is not extinguished by foreclosure; however, the ROFR does not apply to foreclosure or deed in lieu thereof. | ||
(8) Permitted Liens; Title Insurance | Walgreens – Warrensburg, MO (Loan No. 94) | Single tenant (Walgreen Co.) has Right of First Refusal (ROFR) to purchase subject property if bona fide offer received borrower otherwise willing to accept; ROFR is not extinguished by foreclosure; however, the ROFR does not apply to foreclosure or deed in lieu thereof. |
C-2-1 |
Representation Number on Annex C-1 | Mortgage Loan Name and Number as Identified on | Description of Exception | ||
(15) Actions Concerning Mortgage Loan | Country Club Center (Loan No. 7) | Sponsor (Jeffrey Soffer) was one of several co-defendants in a $100 million wrongful death action filed in Florida in January 2014 related to a 2012 helicopter crash in the Bahamas. The lawsuit sought to undo a previous insurance settlement, among other things, and no additional insurance coverage is available for further damages. The lawsuit was dismissed without prejudice in August 2014, however, the plaintiff has appealed the ruling. Further, Jeffrey Soffer is a co-defendant in one or more breach of contract actions related to unpaid commissions aggregating to approximately $12 million, related to various projects. Further, four affiliates of the 50% owner in the borrower (Cabi Holdings, Inc.) were involved in mortgage loan defaults that resulted in the related borrower’s filing for Chapter 11 bankruptcy. The projects included (i) a residential and commercial condominium project in Miami, Florida where the lending syndicate’s refusal to restructure unit release prices prompted a 2009 bankruptcy filing that resulted in a negotiated settlement; (ii) a mixed use condominium tower in Miami, Florida where the inability to refinance the property at maturity prompted a 2010 bankruptcy filing that resulted in the debt being reorganized and a full repayment of the debt in December 2014; (iii) a commercial marina project in Fort Lauderdale, Florida where the inability to refinance the property at maturity prompted a 2010 bankruptcy filing that resulted in a settlement involving an agreed sale; and (iv) an office building in Miami Beach, Florida where the inability to refinance the property at maturity prompted a 2010 bankruptcy filing that resulted in a settlement involving an agreed sale.
In addition, the principals of Cabi Holdings, Inc. defaulted on a $1.5 billion real estate loan in 2008 that had been obtained to acquire a portfolio of 33 office properties in the Los Angeles, California area. Due to the economic downturn, the principals were unable to make scheduled principal payments that they had personally guaranteed, and control was eventually relinquished to one of the mezzanine lenders in lieu of foreclosure. The Cabi principals filed a lawsuit in 2008 alleging that the guarantees were loss guarantees rather than payment guarantees, but that litigation was resolved when the principals agreed to drop any claims against the lenders, and the lenders agreed not to pursue the guarantees. | ||
(18) Insurance | Parkway Crossing East Shopping Center (Loan No. 8) | Babies R Us and Chick-Fil-A pad sites are leased leaseholds (borrower has leasehold estate) where sub-tenant or other non-borrower party constructed improvements and either maintains its own insurance or self-insures. Subject to applicable restoration obligations, casualty proceeds are payable to sub-tenant or other non-borrower party and/or its sub-leasehold mortgagee. | ||
(18) Insurance | Dulles North Corporate Parks (Loan No. 11) | Loan documents permit property insurance policy deductible up to $100,000. In-place property insurance coverage provides for $25,000 deductible. |
C-2-2 |
Representation Number on Annex C-1 | Mortgage Loan Name and Number as Identified on | Description of Exception | ||
(18) Insurance | CVS – Lynn, MA (Loan No. 52) | Borrower’s obligation to provide required insurance (including property, rent loss, terrorism and liability coverage) is suspended if tenant (CVS Pharmacy, Inc.) elects to provide third party insurance or self-insure in accordance with its lease. tenant is permitted to self-insure if, among other things, tenant maintains a minimum net worth of $125 million. If tenant elects to provide third party insurance in accordance with its lease, the borrower’s obligation to provide rent loss or terrorism insurance is suspended, but the lease has no rent abatement or termination remedies for any reason during the loan term. Further, if the lease is in full force effect and there is no lease or loan default, the provisions of the lease shall control disbursement of any casualty proceeds. Tenant has provided notice of its self-insurance election. | ||
(18) Insurance | Walgreens – Duncanville, TX (Loan No. 62) | Borrower’s obligation to provide required insurance (including property, rent loss, terrorism and liability coverage) is suspended if tenant (Walgreen Co.) elects to provide third party insurance or self-insure in accordance with its lease. Tenant is permitted to self-insure if, among other things, Walgreen Co. maintains a minimum net worth of $100 million. If Walgreen elects to provide third party insurance in accordance with its lease, the borrower’s obligation to provide rent loss or terrorism insurance is suspended, but the lease has no rent abatement or termination remedies for any reason during the loan term. Further, if the Walgreen lease is in full force effect and there is no lease or loan default, the provisions of the Walgreen lease shall control disbursement of any casualty proceeds. Walgreen’s has provided notice of its self-insurance election. | ||
(18) Insurance | Tieton Village (Loan No. 76) | Espresso Express pad site is leased fee where tenant or other non-borrower party constructed improvements and either maintains its own insurance or self-insures. Subject to applicable restoration obligations, casualty proceeds are payable to tenant or other non-borrower party and/or its leasehold mortgagee. | ||
(18) Insurance | Walgreens – Milwaukee (Loan No. 83) | Borrower’s obligation to provide required insurance (including property, rent loss, terrorism and liability coverage) is suspended if tenant (Walgreen Co.) elects to provide third party insurance or self-insure in accordance with its lease. Tenant is permitted to self-insure if, among other things, Walgreen Co. maintains a minimum net worth of $200 million. If Walgreen elects to provide third party insurance in accordance with its lease, the borrower’s obligation to provide rent loss or terrorism insurance is suspended, but the lease has no rent abatement or termination remedies for any reason during the loan term. Further, if the Walgreen lease is in full force effect and there is no lease or loan default, the provisions of the Walgreen lease shall control disbursement of any casualty proceeds. Walgreen’s has provided notice of its self-insurance election. |
C-2-3 |
Representation Number on Annex C-1 | Mortgage Loan Name and Number as Identified on | Description of Exception | ||
(18) Insurance | Walgreens – Warrensburg, MO (Loan No. 94) | Borrower’s obligation to provide required insurance (including property, rent loss, terrorism and liability coverage) is suspended if tenant (Walgreen Co.) elects to provide third party insurance or self-insure in accordance with its lease. Tenant is permitted to self-insure if, among other things, Walgreen Co. maintains a minimum net worth of $100 million. If Walgreen elects to provide third party insurance in accordance with its lease, the borrower’s obligation to provide rent loss or terrorism insurance is suspended, but the lease has no rent abatement or termination remedies for any reason during the loan term. Further, if the Walgreen lease is in full force effect and there is no lease or loan default, the provisions of the Walgreen lease shall control disbursement of any casualty proceeds. Walgreen’s has provided notice of its self-insurance election. | ||
(26) Local Law Compliance | Trojan Storage of Oxnard (Loan No. 51) | Self-storage use was permitted with adoption of special use permit on June 21, 2001 with certain conditions, including 15 foot landscaping along the interior lot line for those portions of the property abutting residential districts. Existing landscaped area is approximately 3 feet, which constitutes a zoning violation. Loan documents require that, if there is any governmental enforcement action related to the violation, borrower will promptly comply with any such governmental requirements. Curative work involves removal of four parking spaces. The borrower and guarantors have personal liability for losses related to the property’s failure to comply with the related special use permit’s landscape requirements. The related guarantors’ aggregate net worth is approximately $37.1 million as of March 26, 2015. | ||
(28) Recourse Obligations | Foothills Park Place (Loan No. 13) | SPE Borrower-only on carveouts (59% LTV at loan origination). | ||
(30) Financial Reporting and Rent Rolls | Foothills Park Place (Loan No. 13) | Loan documents require semi-annual (not quarterly) and annual operating statements and rent rolls. | ||
(31) Acts of Terrorism Exclusion | 150 Royall Street (Loan No. 3) | If TRIPRA or a successor statute is not in effect, borrower shall not be required to spend on terrorism insurance more than 2 times the cost of the property and rent loss coverage (excluding terrorism and the premium for flood and named storm coverage) required by the loan documents. | ||
(31) Acts of Terrorism Exclusion | Foothills Park Place (Loan No. 13) | If TRIPRA or a successor statute is not in effect, borrower shall not be required to spend on terrorism insurance more than 2 times the cost of the property and rent loss coverage (excluding terrorism and the premium for flood and named storm coverage) required by the loan documents. |
C-2-4 |
Representation Number on Annex C-1 | Mortgage Loan Name and Number as Identified on | Description of Exception | ||
(31) Acts of Terrorism Exclusion | Walgreens – Duncanville, TX (Loan No. 62) | Borrower’s obligation to provide required insurance (including property, rent loss, terrorism and liability coverage) is suspended if tenant (Walgreen Co.) elects to provide third party insurance or self-insure in accordance with its lease. Tenant is permitted to self-insure if, among other things, Walgreen Co. maintains a minimum net worth of $100 million. If Walgreen elects to provide third party insurance in accordance with its lease, the borrower’s obligation to provide rent loss or terrorism insurance is suspended, but the lease has no rent abatement or termination remedies for any reason during the loan term. Further, if the Walgreen lease is in full force effect and there is no lease or loan default, the provisions of the Walgreen lease shall control disbursement of any casualty proceeds. Walgreen’s has provided notice of its self-insurance election. | ||
(31) Acts of Terrorism Exclusion | Walgreens – Milwaukee (Loan No. 83) | Borrower’s obligation to provide required insurance (including property, rent loss, terrorism and liability coverage) is suspended if tenant (Walgreen Co.) elects to provide third party insurance or self-insure in accordance with its lease. Tenant is permitted to self-insure if, among other things, Walgreen Co. maintains a minimum net worth of $200 million. If Walgreen elects to provide third party insurance in accordance with its lease, the borrower’s obligation to provide rent loss or terrorism insurance is suspended, but the lease has no rent abatement or termination remedies for any reason during the loan term. Further, if the Walgreen lease is in full force effect and there is no lease or loan default, the provisions of the Walgreen lease shall control disbursement of any casualty proceeds. Walgreen’s has provided notice of its self-insurance election. | ||
(31) Acts of Terrorism Exclusion | Walgreens – Warrensburg, MO (Loan No. 94) | Borrower’s obligation to provide required insurance (including property, rent loss, terrorism and liability coverage) is suspended if tenant (Walgreen Co.) elects to provide third party insurance or self-insure in accordance with its lease. Tenant is permitted to self-insure if, among other things, Walgreen Co. maintains a minimum net worth of $100 million. If Walgreen elects to provide third party insurance in accordance with its lease, the borrower’s obligation to provide rent loss or terrorism insurance is suspended, but the lease has no rent abatement or termination remedies for any reason during the loan term. Further, if the Walgreen lease is in full force effect and there is no lease or loan default, the provisions of the Walgreen lease shall control disbursement of any casualty proceeds. Walgreen’s has provided notice of its self-insurance election. | ||
(33) Single-Purpose Entity | WPC Self Storage Portfolio VII (Loan No. 4) | Loan documents permit the borrower to include its assets in a consolidated financial statement of its affiliates, and to include its tax return in a consolidated tax return. |
C-2-5 |
Representation Number on Annex C-1 | Mortgage Loan Name and Number as Identified on | Description of Exception | ||
(33) Single-Purpose Entity | Green Acres MHP (Loan No. 65) | One of three tenants-in-common comprising the borrower is a recycled single purpose entity borrower, and prior owned property is not same as mortgaged property. Borrower previously owned multifamily property in Chicago, IL that it sold in May 2015. An environmental database review was obtained as to the prior owned property, and no environmental issues were identified. The loan documents provide for personal liability to the borrower and guarantors for losses related to the prior owned property. | ||
(33) Single-Purpose Entity | Walgreens – Milwaukee (Loan No. 83) | Recycled single purpose entity borrower, and prior owned property is not same as mortgaged property. Borrower previously owned multifamily property in Rockford, IL that it sold earlier in 2015. A Phase I environmental site assessment was obtained as to the prior owned property, and no recognized environmental conditions were identified. The loan documents provide for personal liability to the borrower and guarantors for losses related to the prior owned property. | ||
(34) Defeasance | WPC Self Storage Portfolio VII (Loan No. 4) | Borrower shall deliver a certificate at borrower’s option of either (A) Chatham Financial, (B) a regionally or nationally recognized public accounting firm reasonably acceptable to lender, or (C) a third party reputable defeasance advisor reasonably acceptable to Lender certifying that the total defeasance collateral will generate monthly amounts equal or greater than the scheduled defeasance payments. | ||
(36) Ground Leases | Gillespie Field Business Park (Loan No. 124) | Leasehold; Fee Not Subordinated. Entirety of mortgaged property is leasehold. Ground lease is between San Diego County, CA and borrower, and latest ground lease expiration is July 22, 2063 (loan matures May 11, 2025).Variations: (L) The ground lease does not specifically provide for right to enter into new lease upon rejection in bankruptcy, but it otherwise provides that upon transfer following foreclosure, the ground lessor will enter into a new lease with leasehold mortgagee. The loan documents provide for personal liability to the borrower and guarantor (i) for losses related to any agreement entered into by ground lessor that materially interferes with borrower’s use of the property and failure to pay ground rent to extent that property revenue is sufficient; and (ii) on a full recourse basis if the ground lease is terminated. | ||
(42) Organization of Mortgagor | Queens’ MarketPlace (Loan No. 5) | An affiliate of the sponsors (Transcontinental Corporation and Bass Brothers) filed for bankruptcy in 2008 in connection with Henderson, NV master planned community. In addition, a mortgage company affiliate of another sponsor (Seligman & Associates, Inc.) was the subject of an involuntary bankruptcy proceeding in 1980 that was converted to a Chapter 11 reorganization. The bankruptcy was closed in December 1984. |
C-2-6 |
Representation Number on Annex C-1 | Mortgage Loan Name and Number as Identified on | Description of Exception | ||
(42) Organization of Mortgagor | Country Club Center (Loan No. 7) | Affiliates of the loan sponsor (Jeffrey Soffer) filed for Chapter 11 bankruptcy protection in mid-2009 (later converted to Chapter 7 bankruptcy at the end of 2009) from the failure of the Fontainebleau Las Vegas project. The project’s funding was disrupted by the Lehman bankruptcy in 2009. The bankruptcy court approved a comprehensive settlement in November 2013, but certain actions by the Chapter 7 trustee were excluded from the scope of the settlement. The Chapter 7 trustee’s lawsuits allege fraudulent conveyance, breach of fiduciary duty, mismanagement of the project and intentional misrepresentations. The Chapter 7 trustee reached a settlement with Mr. Soffer and his affiliates in December 2014 and the case was dismissed with prejudice in February 2015. The settlement included a bar of further pending lawsuits and payment by Soffer of approximately $83 million, a substantial portion of which is being paid by insurance policies. Further, four affiliates of the 50% owner in the borrower (Cabi Holdings, Inc.) were involved in mortgage loan defaults that resulted in the related borrower’s filing for Chapter 11 bankruptcy. The projects included (i) a residential and commercial condominium project in Miami, Florida where the lending syndicate’s refusal to restructure unit release prices prompted a 2009 bankruptcy filing that resulted in a negotiated settlement; (ii) a mixed use condominium tower in Miami, Florida where the inability to refinance the property at maturity prompted a 2010 bankruptcy filing that resulted in the debt being reorganized and a full repayment of the debt in December 2014; (iii) a commercial marina project in Fort Lauderdale, Florida where the inability to refinance the property at maturity prompted a 2010 bankruptcy filing that resulted in a settlement involving an agreed sale; and (iv) an office building in Miami Beach, Florida where the inability to refinance the property at maturity prompted a 2010 bankruptcy filing that resulted in a settlement involving an agreed sale.
In addition, the principals of Cabi Holdings, Inc. defaulted on a $1.5 billion real estate loan in 2008 that had been obtained to acquire a portfolio of 33 office properties in the Los Angeles, California area. Due to the economic downturn, the principals were unable to make scheduled principal payments that they had personally guaranteed, and control was eventually relinquished to one of the mezzanine lenders in lieu of foreclosure. The Cabi principals filed a lawsuit in 2008 alleging that the guarantees were loss guarantees rather than payment guarantees, but that litigation was resolved when the principals agreed to drop any claims against the lenders, and the lenders agreed not to pursue the guarantees. |
C-2-7 |
Representation Number on Annex C-1 | Mortgage Loan Name and Number as Identified on | Description of Exception | ||
(42) Organization of Mortgagor | Hall Office Park (Loan No. 10) | Sponsor (Craig Hall) and various affiliates filed for reorganization under Chapter 11 bankruptcy laws during 1985-1993. In addition, affiliates of the sponsor (Craig Hall) were involved in prior mortgage loan defaults resulting in (i) two discounted payoffs in connection with two separate Michigan apartment complexes in February 2011 and April 2011, respectively, (ii) a deed in lieu in connection with a residential development project in Napa County, California in October 2010, and (iii) a workout in connection with an office building in August 2010, subsequent to which the related loan was paid in full in 2014. | ||
(42) Organization of Mortgagor | Riverside Technology Park A&B (Loan No. 23) | An affiliate of the sponsor (Edward St. John) filed bankruptcy in 1998 in connection with restructuring discussions on a mortgage loan. | ||
(42) Organization of Mortgagor | Dos Santos Apartments (Loan No. 33); San Mateo Apartments (Loan No. 38); Athens Gate Apartments (Loan No. 49); Sand Pebble Apartments (Loan No. 50); Sedona Peak Apartments (Loan No. 107) | Affiliates of sponsor (Richard Aguilar) have been separately involved in Chapter 11 bankruptcy filings on behalf of three borrowers as described herein. A loan secured by a Dallas, Texas multifamily project suffered a maturity default in September 2008 resulting from leasing difficulties. The related lender filed to foreclose in July 2010, and the related borrower (managed by Richard Aguilar) filed Chapter 11 proceedings in September 2010. The reorganization plan was approved in February 2012, which provided for extension and $100,000 payment at time of sale for prior default interest claims. The property was sold in November 2012 and all claims were fully paid. A loan secured by a Houston, Texas multifamily project suffered a maturity default in August 2007 due to declining occupancy. The related lender filed to foreclose in November 2009, and the related borrower (managed by Richard Aguilar) filed Chapter 11 proceedings at that time. The reorganization plan was approved in June 2010, which provided for extension and additional principal payments in the second year of extension. The related lender agreed to a discounted payoff of the note to a third party in October 2012, and the related borrower purchased the note for $100,000 additional consideration in November 2012. Approximately $30,000 of outstanding claims remain to be paid in July 2015. A loan secured by a multifamily project in Ft. Worth, Texas matured in March 2008, but was successively extended with principal payments until March 2011. The loan was sold to a hedge fund, which filed to foreclose in August 2011. After litigation concerning an alleged deed-in-lieu and cash settlement, the hedge fund successfully foreclosed the property in February 2012 and sued the sponsors for the deficiency. The related borrower (managed by Richard Aguilar) filed Chapter 11 proceedings in April 2012 and filed a counterclaim against the hedge fund. The parties settled all claims in August 2013. | ||
(42) Organization of Mortgagor | Gilbert Crosing (Loan No. 53) | California State Teachers’ Retirement System (92.4% beneficial owner of borrower) and managing principals of Trigate (guarantor) did not provide fully completed internal questionnaire forms; full NCO credit searches were performed on each, however. |
C-2-8 |
Representation Number on Annex C-1 | Mortgage Loan Name and Number as Identified on | Description of Exception | ||
(43) Environmental Conditions | Dunwoody Place (Loan No. 25) | Phase I ESA identified recognized environmental condition associated with on-site dry cleaners operating since 1996 and its long-term use of PCE. In lieu of a Phase II, the lender obtained a $2 million lender environmental collateral protection and liability-type environmental insurance policy from Steadfast Insurance Company, a member company of Zurich North America, with a 10 year term (equivalent to loan term) and 3 year policy tail, and having a $50,000 deductible. The policy premium was pre-paid at closing, and a $50,000 environmental insurance policy deductible reserve was required at closing. Zurich North America has an S&P rating of “AA-“. | ||
(43) Environmental Conditions | Lakeside Plaza (Loan No. 64) | Phase I ESA identified various environmental issues: (i) an underground storage tank used for diesel fuel was removed approximately 21 years ago without post-excavation testing, and a Phase II ESA investigation was recommended; (ii) a dry cleaners with on-site processing operated at the subject property between 1980 and 2003, and solvent releases were remediated pursuant to Illinois EPA oversight (the Phase I ESA characterized this as a controlled recognized environmental condition, and recommended no further action; and (iii) the subject property was a golf course between 1940’s and 1970’s, and was used as a landfill site for various landscape debris without a permit. In lieu of a Phase II ESA, the lender obtained a $1 million lender environmental collateral protection and liability-type environmental insurance policy from Great American Insurance Co., with a 10 year term (equivalent to loan term) and 3 year policy tail, and having a $25,000 deductible. The policy premium was pre-paid at closing. Great American has an S&P rating of “A+”. |
C-2-9 |
Representation Number on Annex C-1 | Mortgage Loan Name and Number as Identified on | Description of Exception | ||
(43) Environmental Conditions | Walgreens – Warrensburg, MO (Loan No. 94) | Phase I environmental site assessment identified recognized environmental conditions as follows: (i) on-site LUST that has resulted in groundwater contamination at the property, and is the subject of active remediation; and (ii) an off-site LUST that has the potential for groundwater contamination at the property, and is also the subject of active monitoring and remediation. The on-site LUST is the subject of a Missouri Petroleum Storage Tank Insurance Fund claim. Approximately $130,000 has been paid in clean-up claims to date, and $1 million was initially earmarked for the site by the fund. Testing is ongoing, and future remediation could be intrusive to Walgreen’s. In the event hazardous substances are identified at the property, the tenant has remedies including rent abatement for the duration of any interference or disruption and termination of the lease. The tenant has been notified of the environmental issue and discussion of a license to permit testing or remediation activities in the parking area has been suspended pending specific details about the areas affected and duration of such activity. Construction documents filed in connection with the LUST remediation indicate the improvements were constructed with a vapor barrier, which is expected to sufficiently mitigate vapor intrusion risks associated with groundwater contamination from the LUSTs. The loan documents provide for personal liability to the borrower and guarantors if the Walgreen’s lease is terminated or cancelled, or if the borrower fails to maintain the environmental insurance required in connection with the loan. The lender obtained a $2 million lender environmental collateral protection and liability-type environmental insurance policy from Steadfast Insurance Company, a member company of Zurich North America, with a 10 year term (equivalent to loan term) and 3 year policy tail, and having a $50,000 deductible. The policy premium was pre-paid at closing. Zurich North America has an S & P rating of “AA-”. The guarantor’s stated net worth as of December 31, 2014 is $15.5 million. | ||
(44) Lease Estoppel | 8211 Town Center Drive (Loan No. 59) | Single tenant (Mariner Financial) has identified landlord repair requirements in its estoppel. Tenant’s remedies under the lease are abated for so long as landlord is pursuing a cure, and such curative work has already commenced. $221,357 repair reserve required at closing for related repairs. |
C-2-10 |
Rialto Mortgage Finance, LLC
Representation Number on Annex C-1 |
Mortgage Loan Name and Number as Identified on |
Description of Exception | ||
(1) Complete Mortgage File | Staybridge Suites Indianapolis Airport (Loan No. 60) Comfort Suites – Near the Galleria (Loan No. 74) | The Mortgage Loan documents contain an executed comfort letter in favor of Rialto Mortgage Finance, LLC. The Mortgage Loan Seller or its designee will provide written notice of the transfer to the franchisor and, if required by the existing comfort letter, request that the franchisor deliver a replacement comfort letter in favor of the Trust. With respect to the Mortgage Loans listed, the Mortgage File does not contain the replacement comfort letter. | ||
(2) Whole Loan; Ownership of Mortgage Loans | Brickyard Square (Loan No. 32) | The Mortgage Loan is evidenced by an $11,450,000 Note A-2. The Mortgaged Property is also security for the pari passu Note A-1 which has an original principal balance of $25,000,000. Note A-1 was contributed to the WFCM 2015-C28 trust. The Mortgage Loan will be serviced pursuant to the WFCM 2015-C28 pooling and servicing agreement. | ||
(5) Hospitality Provisions | Best Western Plus – Windsor Gardens (Loan No. 56) | The Mortgagor is required to renew its management agreement with Best Western International, Inc. (“Best Western”) annually. The comfort letter Mortgagor received from Best Western provides that in connection with any notice regarding the potential or actual cancellation of Mortgagor’s membership, Best Western will use commercially reasonable efforts to simultaneously notify lender. Additionally, if Best Western has been notified that the related Mortgage Loan was transferred (including to a trustee in connection with a securitization), Best Western will use commercially reasonable efforts to provide such transferee any cancellation notice, but Best Western is not obligated to provide such notice. | ||
(8) Permitted Liens, Title Insurance | Cooperstown Commons Shopping Center (Loan No. 78) | The fourth largest tenant, NBT Bank, has a right of first refusal to purchase its leased premises. If the Mortgagor receives a bona fide offer from a third party for the purchase of the Mortgaged Property (inclusive of the premises leased to NBT Bank), the Mortgagor is required to request that the third party offeror break the offer into separate offers, one for the premises leased to NBT Bank and another for the remainder of the Mortgaged Property. NBT Bank has a right of first offer to match the offer and purchase its leased premises. | ||
(9) Junior Liens | Staybridge Suites Indianapolis Airport (Loan No. 60) | Interests in the related Mortgagor have been pledged to SSC Plainfield, LLC (the “Mezzanine Lender”) to secure a mezzanine loan in the amount of up to $1,000,000. As of Mortgage Loan origination date, $600,000 of the mezzanine loan was funded. |
C-2-11 |
Representation Number on Annex C-1 | Mortgage Loan Name and Number as Identified on | Description of Exception | ||
(9) Junior Liens | Comfort Suites – Near the Galleria (Loan No. 74) | The franchisor holds an $80,000 promissory note for an existing loan made to the Mortgagor for property improvements. The note provides that no payment is due unless an event of default occurs. The loan will be fully forgiven on January 23, 2020 if no event of default occurs. On the date the loan closed, the Mortgagor deposited with the lender $101,000 to cover any amounts due under the note. | ||
(12) Condition of Property | Sandstone Apartments (Loan No. 75) | Three units in one of the 23 buildings at the Mortgaged Property were significantly damaged by a fire in May 2014 and are not yet being rented out to tenants. Insurance has been covering the cost of renovations (plus rental loss). These three units were underwritten as vacant. | ||
(15) Actions Concerning Mortgage Loan | Brickyard Square (Loan No. 32) | One of the two non-recourse carveout guarantors, Neal Shalom (“NS”), is one of a number of defendants in a civil litigation in New Jersey, which was filed in December 2013 by El Sid Properties, LLC (“El Sid”) relating to Doremus Newark, LLC (“Doremus Newark”), a joint venture between El Sid and Equity Industrial Partners Corp (“EIP”), an entity in which NS is a principal. El Sid’s primary allegation is that EIP and certain other affiliates and principals (including NS) (the “Defendants”) caused the fraudulent and wrongful diversion of proceeds from a portfolio refinancing that is cross-collateralized with a property owned by Doremus Newark, as well as other properties in which El Sid had no beneficial interest and that the Defendants misallocated liabilities, costs and expenses to the Doremus Newark entity, and engaged in acts of self-dealing at the expense of the Doremus Newark venture. The plaintiff is demanding, among other things, unspecified compensatory damages and punitive damages against all defendants, the appointment of a custodian to manage the affairs of Doremus Newark and its parent, and a full accounting of the defendants’ assets. In February 2014, the Defendants filed an answer denying any wrongdoing and filed a number of counterclaims against El Sid alleging, among other things, El Sid’s misconduct under the Doremus Newark organizational documents. In September 2014 a court appointed special fiscal agent produced a report finding that the vast majority of the proceeds received by Doremus Newark were properly accounted for, but expressed no opinion on the allocation of debts and liabilities among the various entities as it was beyond the scope of the court appointed assignment. The report also expressed the hope that a meeting of the principals and their accountants might resolve many of the issues. NS intends to continue defending the lawsuit, and the Mortgage Loan documents provide for recourse to the guarantors for any losses resulting from the lawsuit. |
C-2-12 |
Representation Number on Annex C-1 | Mortgage Loan Name and Number as Identified on | Description of Exception | ||
(18) Insurance | East Haven Self Storage (Loan No. 82) | A portion of the related Mortgaged Property may be located in an area of special flood hazards. The Mortgage Loan documents provide that as of the Mortgage Loan origination date, the Mortgagor is not required to deliver flood hazard insurance because the Mortgagor obtained an elevation certificate that indicates that the Mortgaged Property should not be located in a “special flood hazard area.” The Mortgagor has applied for a Letter of Map Amendment (“LOMA”) issued by the Federal Emergency Management Agency to reflect and confirm that the Mortgaged Property is not located in such “special flood hazard area”. In the event that the LOMA is not issued, the Mortgagor is required to promptly notify lender and obtain the flood hazard insurance required by the related Loan Documents. Until such time as the LOMA is issued or, if denied, the time the related Mortgagor obtains flood insurance coverage in accordance with the terms of the related Loan Documents, the Mortgagor and guarantor have agreed to pay the cost of repairing any damage to the related Mortgaged Property that arises on account of a flood that would have otherwise been covered by flood hazard insurance if such flood hazard insurance would have been obtained. | ||
(26) Local law Compliance | Seacoast Self Storage (Loan No. 72) | The Mortgaged Property is legal non-conforming as to use. The zoning requirements provide that in the event of a casualty, the Mortgaged Property may rebuild to existing use provided the Mortgaged Property is rebuilt within one year of the casualty. In the event of a casualty, the Mortgage Loan documents require the Mortgagor to complete the restoration within one year of the casualty, and provide for recourse to the guarantor and Mortgagor for losses in the event the Mortgaged Property cannot be rebuilt with existing use (self-storage). | ||
(26) Local law Compliance | East Haven Self Storage (Loan No. 82) | The Mortgaged Property is legal non-conforming as to use. If the Mortgaged Property is subject to a casualty estimated at 80% or more of the assessed value, it may not be rebuilt with the current use (self-storage). The Mortgagor and the related guarantor are fully liable for and guarantee payment of any amount necessary to prepay the Mortgage Loan in full in the event there is any insurance shortfall. The Mortgage Loan documents also provide for recourse to the Mortgagor and guarantor for losses if the Mortgaged Property cannot be restored to its current use. | ||
(26) Local law Compliance | All A/C Self Storage (Loan No. 87) | The Mortgaged Property is legal nonconforming as to use. The Mortgagor and the related guarantor are fully liable for and guarantee payment of any amount necessary to prepay the Mortgage Loan in full in the event there is any insurance shortfall that results from any casualty that prevents a rebuild to existing use. |
C-2-13 |
Representation Number on Annex C-1 | Mortgage Loan Name and Number as Identified on | Description of Exception | ||
(26) Local law Compliance | Folcroft Self Storage (Loan No. 98) | The Mortgaged Property is legal non-conforming as to use. If the Mortgaged Property is subject to a casualty estimated at 75% or more of the assessed value, it may not be rebuilt with the current use (self-storage). The Mortgagor and the related guarantor are fully liable for and guarantee payment of any amount necessary to prepay the Mortgage Loan in full in the event there is any insurance shortfall. | ||
(28) Recourse Obligations | Brickyard Square (Loan No. 32) | Recourse for physical waste is for any intentional material physical waste at the Mortgaged Property committed by or on behalf of the Mortgagor, the guarantor or any of their respective affiliates, agents or representatives. | ||
(33) Single-Purpose Entity | Brickyard Square (Loan No. 32) | The Mortgagor is a recycled SPE. In addition to owning the Mortgaged Property, which is comprised of one unit in a two-unit commercial condominium, the Mortgagor previously owned the other unit and transferred it prior to origination of the Mortgage Loan. |
C-2-14 |
Silverpeak Real Estate Finance LLC
Representation Number on Annex C-1 |
Mortgage Loan Name and Number as Identified on |
Description of Exception | ||
(2) Whole Loan | Bella Luna / San Lucas (Loan No. 71) | The related Mortgage secures the related note included in the issuing entity and the related companion loan on apari passu basis. | ||
(5) Hospitality Provisions | TownePlace Suites St. George by Marriott (Loan No. 45) Courtyard by Marriott – Shawnee (Loan No. 48) | The related comfort letter provided at the Mortgage Loan origination is not enforceable by the securitization trust. The comfort letter provides either that (i) upon written notice from the lender to the franchisor or (ii) written notice and a request for a replacement comfort letter (within certain time frames specified in the comfort letter), the comfort letter may be assigned to the trustee. | ||
(7) Lien; Valid Assignment | Bella Luna / San Lucas (Loan No. 71) | The related Mortgage secures the related note included in the issuing entity and the related companion loan on apari passu basis. | ||
(8) Permitted Liens; Title Insurance | Bella Luna / San Lucas (Loan No. 71) | The related Mortgage secures the related note included in the issuing entity and the related companion loan on apari passu basis. | ||
(15) Actions Concerning Mortgage Loan | Summer Bend Apartments (Loan No. 18) | The sponsor is currently subject to fraud related litigation in connection with a dispute over the alleged dilution of investment shares in an entity controlled by the sponsor. The sponsor and the plaintiff continue to engage in settlement discussions. | ||
(26) Local Law Compliance | Olmsted Plaza Shopping Center (Loan No. 9) | Parking at the Mortgaged Property is deficient by 95 spaces. The borrower had covenanted to provide the lender, within 120 days of the origination date of the mortgage loan, with either (i) evidence that the additional 95 parking spaces have been striped at the Mortgaged Property or (ii) an amended variance from the city indicating that the current number of parking spaces is in conformance with zoning requirements. | ||
(26) Local Law Compliance | Solano Apartments (Loan No. 28) | The Mortgaged Property is legal non-conforming as to use. The Mortgaged Property operates as an apartment complex, which use is only permitted on the second floor and above by a special use permit. In the event more than 50% of the Mortgaged Property is damaged or destroyed, the Mortgaged Property may only be restored with a special use permit. | ||
(28)(b)(v) Recourse Obligations | Coastal Village Apartments (Loan No. 12) | Recourse liability for physical waste is limited to intentional physical waste. | ||
(28)(b)(v) Recourse Obligations | Indiana Village (Loan No. 42) | There is no recourse liability for (i) failure of the borrower to cause restoration of the Mortgaged Property or (y) failure of the borrower to maintain the Mortgaged Property, if such failure is due to insufficient funds being available for the operation of the Mortgaged Property or the unavailability of funds to make insurance proceeds available to the borrower. |
C-2-15 |
Walker & Dunlop Commercial Property Funding I WF, LLC
Representation Number on Annex C-1 |
Mortgage Loan Name and Number as Identified on |
Description of Exception | ||
(8) Permitted Liens; Title Insurance | Cathedral Place (Loan No. 2) and Cathedral Place – Parking (Loan No. 41) | The Mortgaged Properties are part of a condominium regime. Cathedral Place consists of two of the four condominium units as well as the related Mortgagor’s 41.53% interest in the common elements, while Cathedral Place – Parking consist of one of the four condominium units as well as the related Mortgagor’s 48.00% interest in the common elements. The Cathedral Place Mortgagor controls two of the four seats on the condominium board of directors and the Cathedral Place – Parking Mortgagor controls one of the four seats on the condominium board of directors. Neither Mortgagor controls the related condominium but each has blocking rights to amendments of the condominium’s declaration and by-laws. The loan agreements provide for loss recourse to the Mortgagor and the guarantor if the Mortgagor materially amends or terminates the condominium documents without lender’s prior consent. | ||
(8) Permitted Liens; Title Insurance | Brittany Bay II (Loan No. 39) | The Mortgaged Property is subject to a land use restriction agreement in favor of the Florida Housing Finance Corporation made in connection with the allocation of federal low-income housing tax credits under Internal Revenue Code of 1986 Section 42. The agreement generally requires that (i) at least 85.0% of the units be reserved for tenants earning no more than 60.0% of the area median income and (ii) at least 15.0% of the units be reserved for tenants earning no more than 25.0% of the area median income, subject to rental restrictions in accordance with the terms of the agreement. The sponsor of the Mortgagor reported that the agreement is scheduled to terminate in 2053. The regulatory agreement requires that an annual report be submitted to the Florida Housing Finance Corporation, whose remedies for noncompliance include specific performance and injunctive relief. | ||
(9) Junior Liens | Magnolia Marketplace (Loan No. 16) | There is existing subordinate debt in the original principal amount of $892,920 secured by the Mortgaged Property. The subordinate loan was issued by the Housing Authority of New Orleans and has a 30-year term which expires on December 23, 2033. The subordinate note accrues interest at a fixed rate of 1% with an annual payment of $8,929. A subordination agreement provides that no enforcement action can be taken without consent of the lender. | ||
(33) Single-Purpose Entity | Cathedral Place (Loan No. 2) | In addition to the Mortgaged Property, the Mortgagor previously owned another property which is part of the related condominium. The Loan Documents provide that the Mortgage Loan will become loss recourse to the Mortgagor and the guarantor to the extent losses are suffered due to the Mortgagor’s prior ownership of the previously owned property. |
C-2-16 |
Representation Number on Annex C-1 | Mortgage Loan Name and Number as Identified on | Description of Exception | ||
(33) Single-Purpose Entity | Norfolk Commerce Park (Loan No. 17) | In addition to the Mortgaged Property, the Mortgagor previously owned another property which was acquired at closing of the Mortgage Loan. The Mortgagor subsequently transferred the property to an affiliate. The Loan Documents provide that the Mortgage Loan will become loss recourse to the Mortgagor and the guarantor to the extent losses are suffered due to the Mortgagor’s prior ownership and conveyance of the previously owned property. | ||
(34) Defeasance | Cathedral Place (Loan No. 2) and Cathedral Place – Parking (Loan No. 41) | Defeasance under the Mortgage Loan documents is not a unilateral right of the Mortgagor. Each related Mortgagor is only permitted to defease the related Mortgage Loan if both Mortgage Loans are defeased simultaneously. | ||
(39) Rent Rolls; Operating Histories | Ozinus Realty Property Portfolio (Loan No. 31) | The Mortgage Loan Seller did not obtain Certified Operating Histories as the sponsor did not maintain Mortgagor level financial statements. | ||
(41) Bankruptcy | Norfolk Commerce Park (Loan No. 17) | One of the guarantors under the related mortgage loan filed for Chapter 7 bankruptcy protection in April 2005. The case was fully discharged on March 10, 2006. | ||
(42) Organization of Mortgagor | Norfolk Commerce Park (Loan No. 17) | One of the guarantors under the related mortgage loan filed for Chapter 7 bankruptcy protection in April 2005. The case was fully discharged on March 10, 2006. | ||
(43) Environmental Conditions | Magnolia Marketplace (Loan No. 16) | An environmental consultant reported that the Mortgaged Property and nearby third-party properties previously had been used for gas stations, dry cleaners, and other activities involving hazardous materials. During redevelopment of a larger parcel after Hurricane Katrina, soil and groundwater impacts were identified. The environmental consultant noted that residual impacted soils used as backfill are in effect capped by paved parking surfaces at the Mortgaged Property. The environmental consultant recommended no further action other than to continue cooperating with the Louisiana Department of Environmental Quality to obtain administrative closure and to appropriately manage any soils and/or groundwater that might be encountered during any future excavation or other disturbance at the Mortgaged Property. |
C-2-17 |
National Cooperative Bank, N.A.
Representation Number on Annex C-1 |
Mortgage Loan Name and Number as Identified on |
Description of Exception | ||
(9) Junior Liens | Baywoods of Annapolis (Loan No. 19) | The referenced Mortgaged Property is encumbered by a subordinate credit line mortgage in the original principal amount of $5,000,000; as of the Cut-off Date, no advances have been made under such subordinate credit line mortgage. | ||
(9) Junior Liens | 39-60 54thStreet Owners, Inc. (Loan No. 47) | The referenced Mortgaged Property is encumbered by a subordinate credit line mortgage in the original principal amount of $750,000; as of the Cut-off Date, no advances have been made under such subordinate credit line mortgage. | ||
(9) Junior Liens | Mendicino Green Apartment Corp. (Loan No. 66); Denn Owners Corporation (Loan No. 104); Carroll Gardens Owners, Corp. (Loan No. 131) | Each of the referenced Mortgaged Properties are encumbered by a subordinate credit line mortgage in the original principal amount of $250,000; as of the Cut-off Date, no advances have been made under such subordinate credit line mortgages. | ||
(9) Junior Liens | 230 Garth Road Owners, Inc. (Loan No. 73) | The referenced Mortgaged Property is encumbered by a subordinate chattel mortgage; as of March 19, 2015, the outstanding principal balance of the chattel mortgage is $265,650. | ||
(9) Junior Liens | Karen Gardens Apartment Corp. (Loan No. 81); Regency Park Owners Corp. (Loan No. 89); Nagle House, Inc. (Loan No. 93); 230 Tenants Corporation (Loan No. 95); 109-111 N. Broadway Apt. Corp. (Loan No. 116); 40 Prospect Park West Owners Corp. (Loan No. 117); 6 West 20thSt. Tenants Corp. (Loan No. 120); 50-22 Owners, Ltd. (Loan No. 121); 585 McLean Owners, Inc. (Loan No. 122); 12 West 17th St. Tenants’ Corp. (Loan No. 123); Waters at West End, Inc. (Loan No. 125); 166 West 76thApartment Corp. (Loan No. 129) | Each of the referenced Mortgaged Properties are encumbered by a subordinate credit line mortgage in the original principal amount of $500,000; as of the Cut-off Date, no advances have been made under such subordinate credit line mortgages. |
C-2-18 |
Representation Number on Annex C-1 | Mortgage Loan Name and Number as Identified on | Description of Exception | ||
(9) Junior Liens | 321 West 90thSt. Owners Corp. (Loan No. 101) | The referenced Mortgaged Property is encumbered by (1) a subordinate credit line mortgage in the original principal amount of $500,000; as of the Cut-off Date, no advances have been made under such subordinate credit line mortgage; and (2) a subordinate chattel mortgage in the original principal amount of $400,000; as of the Cut-off Date, the outstanding principal balance of the chattel mortgage is $400,000. | ||
(9) Junior Liens | Sea Breeze Town Houses Owners, Inc. (Loan No. 108) | The referenced Mortgaged Property is encumbered by a subordinate credit line mortgage in the original principal amount of $100,000; as of the Cut-off Date, no advances have been made under such subordinate credit line mortgage. | ||
(9) Junior Liens | Hartsdale Executive House, Inc. (Loan No. 112) | The referenced Mortgaged Property is encumbered by a subordinate credit line mortgage in the original principal amount of $350,000; as of the Cut-off Date, no advances have been made under such subordinate credit line mortgage. | ||
(9) Junior Liens | 170 East 92ndStreet Owners, Inc. (Loan No. 132) | The referenced Mortgaged Property is encumbered by a subordinate credit line mortgage in the original principal amount of $300,000; as of the Cut-off Date, no advances have been made under such subordinate credit line mortgage. | ||
(12) Condition of Property | Nagle House, Inc. (Loan No. 93) | The Mortgaged Property was not inspected within six months of origination of the Mortgage Loan. The Mortgaged Property was not inspected within twelve months of the Cut-off Date. The engineering report for the Mortgaged Property was prepared more than twelve months prior to the Cut-off Date. | ||
(18) Insurance | Lake Lucina Shopping Center (Loan No. 79); West Friendship Shopping Center (Loan No. 102) | The business interruption or rental loss insurance for the referenced Mortgaged Properties cover a period of less than 12 months. | ||
(28) Recourse Obligations | All of the Mortgage Loans secured by residential cooperatives. | All of the Mortgage Loans secured by residential cooperatives are fully recourse to the related Mortgagors. There are no guarantors for any of Mortgage Loans secured by residential cooperative properties. | ||
(30) Financial Reporting and Rent Rolls | All of the Mortgage Loans secured by residential cooperatives. | The Mortgage Loans secured by residential cooperatives do not require the Mortgagor to provide the owner or holder of such Mortgage Loans with quarterly operating statements. | ||
(30) Financial Reporting and Rent Rolls | 585 McLean Owners, Inc. (Loan No. 122); 12 West 17th St. Tenants’ Corp. (Loan No. 123) | The referenced Mortgage Loans each have an individual lease that accounts for more than 5% of the in-place base rent, but do not require the delivery of quarterly rent rolls. |
C-2-19 |
Representation Number on Annex C-1 | Mortgage Loan Name and Number as Identified on | Description of Exception | ||
(32) Due on Sale or Encumbrance | All of the Mortgage Loans secured by residential cooperatives.
| All of the Mortgage Loans secured by residential cooperatives permit, without the prior written consent of the holder of the related Mortgage, transfers of stock of the related Mortgagor in connection with the assignment of a proprietary lease for an apartment or other similar unit by a tenant-shareholder of the related Mortgagor to other persons who by virtue of such transfers become tenant-shareholders in the related Mortgagor. | ||
(33) Single-Purpose Entity | All of the Mortgage Loans secured by residential cooperatives. | The Mortgagors under the Mortgage Loans secured by residential cooperatives are not Single-Purpose Entities. | ||
(39) Rent Rolls; Operating Histories | Austin Heights Shopping Center (Loan No. 61); Bowen Tower Apartments (Loan No. 100); West Friendship Shopping Center (Loan No. 102); Willow Lake Shops (Loan No. 109); Crown Pointe Plaza (Loan No. 111); Market Place Village (Loan No. 114); | Certified Operating Histories were not obtained with respect to the referenced Mortgaged Properties. | ||
(42) Organization of Mortgagor | All of the Mortgage Loans secured by residential cooperatives. | For purposes of Representation 42 with respect to Mortgage Loans secured by residential cooperatives, the term “Controlling Owner” shall mean any single shareholder of a Mortgagor that owns shares appurtenant to 50% or more of the residential cooperative units at the related Mortgaged Property and holds a majority of the seats of the cooperative corporation’s board of directors. For purposes of this exception to Representation 42, there are no Mortgage Loans that have a Controlling Owner, as defined above. | ||
(43) Environmental Conditions | Nagle House, Inc. (Loan No. 93) | The Phase I environmental site assessment for the Mortgaged Property was prepared more than twelve months prior to the origination of the Mortgage Loan. | ||
(45) Appraisal | Nagle House, Inc. (Loan No. 93) | The appraisal for the Mortgaged Property was prepared more than six months prior to the origination of the Mortgage Loan and more than twelve months prior to the Cut-off Date. | ||
(47) Cross-Collateralization | Baywoods of Annapolis (Loan No. 19) | The referenced Mortgaged Property is encumbered by a subordinate credit line mortgage in the original principal amount of $5,000,000; as of the Cut-off Date, no advances have been made under such subordinate credit line mortgage. | ||
(47) Cross-Collateralization | 39-60 54thStreet Owners, Inc. (Loan No. 47) | The referenced Mortgaged Property is encumbered by a subordinate credit line mortgage in the original principal amount of $750,000; as of the Cut-off Date, no advances have been made under such subordinate credit line mortgage. |
C-2-20 |
Representation Number on Annex C-1 | Mortgage Loan Name and Number as Identified on | Description of Exception | ||
(47) Cross-Collateralization | Mendicino Green Apartment Corp. (Loan No. 66); Denn Owners Corporation (Loan No. 104); Carroll Gardens Owners, Corp. (Loan No. 131) | Each of the referenced Mortgaged Properties are encumbered by a subordinate credit line mortgage in the original principal amount of $250,000; as of the Cut-off Date, no advances have been made under such subordinate credit line mortgages. | ||
(47) Cross-Collateralization | 230 Garth Road Owners, Inc. (Loan No. 73) | The referenced Mortgaged Property is encumbered by a subordinate chattel mortgage; as of March 19, 2015, the outstanding principal balance of the chattel mortgage is $265,650. | ||
(47) Cross-Collateralization | Karen Gardens Apartment Corp. (Loan No. 81); Regency Park Owners Corp. (Loan No. 89); Nagle House, Inc. (Loan No. 93); 230 Tenants Corporation (Loan No. 95); 109-111 N. Broadway Apt. Corp. (Loan No. 116); 40 Prospect Park West Owners Corp. (Loan No. 117); 6 West 20thSt. Tenants Corp. (Loan No. 120); 50-22 Owners, Ltd. (Loan No. 121); 585 McLean Owners, Inc. (Loan No. 122); 12 West 17th St. Tenants’ Corp. (Loan No. 123); Waters at West End, Inc. (Loan No. 125); 166 West 76thApartment Corp. (Loan No. 129) | Each of the referenced Mortgaged Properties are encumbered by a subordinate credit line mortgage in the original principal amount of $500,000; as of the Cut-off Date, no advances have been made under such subordinate credit line mortgages. | ||
(47) Cross-Collateralization | 321 West 90thSt. Owners Corp. (Loan No. 101) | The referenced Mortgaged Property is encumbered by (1) a subordinate credit line mortgage in the original principal amount of $500,000; as of the Cut-off Date, no advances have been made under such subordinate credit line mortgage; and (2) a subordinate chattel mortgage in the original principal amount of $400,000; as of the Cut-off Date, the outstanding principal balance of the chattel mortgage is $400,000. | ||
(47) Cross-Collateralization | Sea Breeze Town Houses Owners, Inc. (Loan No. 108) | The referenced Mortgaged Property is encumbered by a subordinate credit line mortgage in the original principal amount of $100,000; as of the Cut-off Date, no advances have been made under such subordinate credit line mortgage. | ||
(47) Cross-Collateralization | Hartsdale Executive House, Inc. (Loan No. 112) | The referenced Mortgaged Property is encumbered by a subordinate credit line mortgage in the original principal amount of $350,000; as of the Cut-off Date, no advances have been made under such subordinate credit line mortgage. |
C-2-21 |
Representation Number on Annex C-1 | Mortgage Loan Name | Description of Exception | ||
(47) Cross-Collateralization | 170 East 92ndStreet Owners, Inc. (Loan No. 132) | The referenced Mortgaged Property is encumbered by a subordinate credit line mortgage in the original principal amount of $300,000; as of the Cut-off Date, no advances have been made under such subordinate credit line mortgage. |
C-2-22 |
Annex D
Global Clearance, Settlement and Tax Documentation Procedures
The globally offered Wells Fargo Commercial Mortgage Trust 2015-C29, Commercial Mortgage Pass-Through Certificates, Series 2015-C29, Class A-1, A-2, A-3, A-4, A-SB, A-S, X-A, X-B, B, C, PEX and D certificates, will generally be available only in book-entry form.
The book-entry certificates will be tradable as home market instruments in both the European and U.S. domestic markets. Initial settlement and all secondary trades will settle in same-day funds.
Secondary market trading between investors holding book-entry certificates through Clearstream and Euroclear will be conducted in the ordinary way in accordance with their normal rules and operating procedures and in accordance with conventional Eurobond practice, which is seven calendar days’ settlement.
Secondary market trading between investors holding book-entry certificates through DTC will be conducted according to the rules and procedures applicable to U.S. corporate debt obligations.
Secondary cross-market trading between member organizations of Clearstream or Euroclear and DTC participants holding book-entry certificates will be accomplished on a delivery against payment basis through the respective depositaries of Clearstream and Euroclear, in that capacity, as DTC participants.
As described under “Certain U.S. Federal Income Tax Documentation Requirements” below, non-U.S. holders of book-entry certificates will be subject to U.S. withholding taxes unless those holders meet specific requirements and deliver appropriate U.S. tax documents to the securities clearing organizations of their participants.
Initial Settlement
All certificates of each class of offered certificates will be held in registered form by DTC in the name of Cede & Co. as nominee of DTC. Investors’ interests in the book-entry certificates will be represented through financial institutions acting on their behalf as direct and indirect DTC participants. As a result, Clearstream and Euroclear will hold positions on behalf of their member organizations through their respective depositaries, which in turn will hold positions in accounts as DTC participants.
Investors’ securities custody accounts will be credited with their holdings against payment in same-day funds on the settlement date.
Investors electing to hold their book-entry certificates through Clearstream or Euroclear accounts will follow the settlement procedures applicable to conventional Eurobonds, except that there will be no temporary global security and no “lock up” or restricted period. Global securities will be credited to the securities custody accounts on the settlement date against payment in same-day funds.
Secondary Market Trading
Since the purchaser determines the place of delivery, it is important to establish at the time of the trade where both the purchaser’s and seller’s accounts are located to ensure that settlement can be made on the desired value date.
D-1 |
Trading between DTC Participants. Secondary market trading between DTC participants will be settled in same-day funds.
Trading between Clearstream and/or Euroclear Participants. Secondary market trading between member organizations of Clearstream or Euroclear will be settled using the procedures applicable to conventional Eurobonds in same-day funds.
Trading between DTC Seller and Clearstream or Euroclear Purchaser. When book-entry certificates are to be transferred from the account of a DTC participant to the account of a member organization of Clearstream or Euroclear, the purchaser will send instructions to Clearstream or Euroclear through that member organization at least one business day prior to settlement. Clearstream or Euroclear, as the case may be, will instruct the respective depositary to receive the book-entry certificates against payment. Payment will include interest accrued on the book-entry certificates from and including the first day of the calendar month in which the last coupon payment date occurs (or, if no coupon payment date has occurred, from and including June 1, 2015) to and excluding the settlement date, calculated on the basis of a year of 360 days consisting of twelve 30-day months. Payment will then be made by participant’s account against delivery of the book-entry certificates. After settlement has been completed, the book-entry certificates will be credited to the respective clearing system and by the clearing system, in accordance with its usual procedures, to the account of the member organization of Clearstream or Euroclear, as the case may be. The securities credit will appear the next day, European time, and the cash debit will be back-valued to, and the interest on the book-entry certificates will accrue from, the value date, which would be the preceding day when settlement occurred in New York. If settlement is not completed on the intended value date, which means the trade fails, the Clearstream or Euroclear cash debit will be valued instead as of the actual settlement date.
Member organizations of Clearstream and Euroclear will need to make available to the respective clearing systems the funds necessary to process same-day funds settlement. The most direct means of doing so is to pre-position funds for settlement, either from cash on hand or existing lines of credit, as they would for any settlement occurring within Clearstream or Euroclear. Under this approach, they may take on credit exposure to Clearstream or Euroclear until the book-entry certificates are credited to their accounts one day later.
As an alternative, if Clearstream or Euroclear has extended a line of credit to them, member organizations of Clearstream or Euroclear can elect not to pre-position funds and allow that credit line to be drawn upon to finance settlement. Under this procedure, the member organizations purchasing book-entry certificates would incur overdraft charges for one day, assuming they cleared the overdraft when the book-entry certificates were credited to their accounts. However, interest on the book-entry certificates would accrue from the value date. Therefore, in many cases the investment income on the book-entry certificates earned during that one-day period may substantially reduce or offset the amount of those overdraft charges, although this result will depend on the cost of funds of the respective member organization of Clearstream or Euroclear.
Since the settlement is taking place during New York business hours, DTC participants can employ their usual procedures for sending book-entry certificates to the respective depositary for the benefit of member organizations of Clearstream or Euroclear. The sale proceeds will be available to the DTC seller on the settlement date. Thus, to the DTC participant a cross-market transaction will settle no differently than a trade between two DTC participants.
D-2 |
Trading between Clearstream or Euroclear Seller and DTC Purchaser. Due to time zone differences in their favor, member organizations of Clearstream or Euroclear may employ their customary procedures for transactions in which book-entry certificates are to be transferred by the respective clearing system, through the respective depositary, to a DTC participant. The seller will send instructions to Clearstream or Euroclear through a member organization of Clearstream or Euroclear at least one business day prior to settlement. In these cases, Clearstream or Euroclear, as appropriate, will instruct the respective depositary to deliver the book-entry certificates to the DTC participant’s account against payment. Payment will include interest accrued on the book-entry certificates from and including the first day of the calendar month in which the last coupon payment date occurs (or, if no coupon payment date has occurred, from and including June 1, 2015) to and excluding the settlement date, calculated on the basis of a year of 360 days consisting of twelve 30-day months. The payment will then be reflected in the account of the member organization of Clearstream or Euroclear the following day, and receipt of the cash proceeds in the account of that member organization of Clearstream or Euroclear would be back-valued to the value date, which would be the preceding day, when settlement occurred in New York. Should the member organization of Clearstream or Euroclear have a line of credit with its respective clearing system and elect to be in debit in anticipation of receipt of the sale proceeds in its account, the back-valuation will extinguish any overdraft charges incurred over the one-day period. If settlement is not completed on the intended value date, which means the trade fails, receipt of the cash proceeds in the account of the member organization of Clearstream or Euroclear would be valued instead as of the actual settlement date.
Finally, day traders that use Clearstream or Euroclear and that purchase book-entry certificates from DTC participants for delivery to member organizations of Clearstream or Euroclear should note that these trades would automatically fail on the sale side unless affirmative action were taken. At least three techniques should be readily available to eliminate this potential problem:
· | borrowing through Clearstream or Euroclear for one day, until the purchase side of the day trade is reflected in their Clearstream or Euroclear accounts, in accordance with the clearing system’s customary procedures; |
· | borrowing the book-entry certificates in the United States from a DTC participant no later than one day prior to settlement, which would allow sufficient time for the book-entry certificates to be reflected in their Clearstream or Euroclear accounts in order to settle the sale side of the trade; or |
· | staggering the value dates for the buy and sell sides of the trade so that the value date for the purchase from the DTC participant is at least one day prior to the value date for the sale to the member organization of Clearstream or Euroclear. |
Certain U.S. Federal Income Tax Documentation Requirements
A holder that is not a “United States person” (a “U.S. person”) within the meaning of Section 7701(a)(30) of the Code (a “non-U.S. holder”) holding a book-entry certificate through Clearstream, Euroclear or DTC may be subject to U.S. withholding tax unless such holder provides certain documentation to the issuer of such holder’s book-entry certificate, the Certificate Administrator or any other entity required to withhold tax (any of the foregoing, a “U.S. withholding agent”) establishing an exemption from withholding. A non-U.S. holder may be subject to withholding unless each U.S. withholding agent receives:
1. | from a non-U.S. holder that is classified as a corporation for U.S. federal income tax purposes or is an individual, and is eligible for the benefits of the portfolio |
D-3 |
interest exemption or an exemption (or reduced rate) based on a treaty, a duly completed and executed IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable (or any successor forms); |
2. | from a non-U.S. holder that is eligible for an exemption on the basis that the holder’s income from the certificate is effectively connected to its U.S. trade or business, a duly completed and executed IRS Form W-8ECI (or any successor form); or |
3. | from a non-U.S. holder that is classified as a partnership for U.S. federal income tax purposes, a duly completed and executed IRS Form W-8IMY (or any successor form) with all supporting documentation (as specified in the U.S. Treasury Regulations) required to substantiate exemptions from withholding on behalf of its partners; certain partnerships may enter into agreements with the IRS providing for different documentation requirements and it is recommended that such partnerships consult their tax advisors with respect to these certification rules; |
4. | from a non-U.S. holder that is an intermediary (i.e., a person acting as a custodian, a broker, nominee or otherwise as an agent for the beneficial owner of a certificate): |
(a) | if the intermediary is a “qualified intermediary” within the meaning of section 1.1441-1(e)(5)(ii) of the U.S. Treasury Regulations (a “qualified intermediary”), a duly completed and executed IRS Form W-8IMY (or any successor or substitute form)— |
(i) | stating the name, permanent residence address and qualified intermediary employer identification number of the qualified intermediary and the country under the laws of which the qualified intermediary is created, incorporated or governed, |
(ii) | certifying that the qualified intermediary has provided, or will provide, a withholding statement as required under section 1.1441-1(e)(5)(v) of the U.S. Treasury Regulations, |
(iii) | certifying that, with respect to accounts it identifies on its withholding statement, the qualified intermediary is not acting for its own account but is acting as a qualified intermediary, and |
(iv) | providing any other information, certifications, or statements that may be required by the IRS Form W-8IMY or accompanying instructions in addition to, or in lieu of, the information and certifications described in section 1.1441-1(e)(3)(ii) or 1.1441-1(e)(5)(v) of the U.S. Treasury Regulations; or |
(b) | if the intermediary is not a qualified intermediary (a “nonqualified intermediary”), a duly completed and executed IRS Form W-8IMY (or any successor or substitute form)— |
(i) | stating the name and permanent residence address of the nonqualified intermediary and the country under the laws of which the nonqualified intermediary is created, incorporated or governed, |
D-4 |
(ii) | certifying that the nonqualified intermediary is not acting for its own account, |
(iii) | certifying that the nonqualified intermediary has provided, or will provide, a withholding statement that is associated with the appropriate IRS Forms W-8 and W-9 required to substantiate exemptions from withholding on behalf of such nonqualified intermediary’s beneficial owners, and |
(iv) | providing any other information, certifications or statements that may be required by the IRS Form W-8IMY or accompanying instructions in addition to, or in lieu of, the information, certifications, and statements described in section 1.1441-1(e)(3)(iii) or (iv) of the U.S. Treasury Regulations; or |
5. | from a non-U.S. holder that is a trust, depending on whether the trust is classified for U.S. federal income tax purposes as the beneficial owner of the certificate, either an IRS Form W-8BEN-E or IRS Form W-8IMY; any non-U.S. holder that is a trust should consult its tax advisors to determine which of these forms it should provide. |
All non-U.S. holders will be required to update the above-listed forms and any supporting documentation in accordance with the requirements under the U.S. Treasury Regulations. These forms generally remain in effect for a period starting on the date the form is signed and ending on the last day of the third succeeding calendar year, unless a change in circumstances makes any information on the form incorrect. Under certain circumstances, an IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, if furnished with a taxpayer identification number, remains in effect until the status of the beneficial owner changes, or a change in circumstances makes any information on the form incorrect.
In addition, all holders, including holders that are U.S. persons, holding book-entry certificates through Clearstream, Euroclear or DTC may be subject to backup withholding unless the holder—
· | provides the appropriate IRS Form W-8 (or any successor or substitute form), duly completed and executed, if the holder is a non-U.S. holder; |
· | provides a duly completed and executed IRS Form W-9, if the holder is a U.S. person; or |
· | can be treated as an “exempt recipient” within the meaning of section 1.6049-4(c)(1)(ii) of the U.S. Treasury Regulations (e.g., a corporation or a financial institution such as a bank). |
This summary does not deal with all of the aspects of U.S. federal income tax withholding or backup withholding that may be relevant to investors that are non-U.S. holders. Such holders are advised to consult their own tax advisors for specific tax advice concerning their holding and disposing of book-entry certificates.
D-5 |
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Annex E-1
Form of Trust Advisor Annual Report1
(Subordinate Control Period)
Report Date: Report will be delivered annually no later than [INSERT DATE].
Transaction: Wells Fargo Commercial Mortgage Trust 2015-C29, Commercial Mortgage Pass-Through Certificates, Series 2015-C29
Trust Advisor: Trimont Real Estate Advisors, Inc.
Special Servicer: [Midland Loan Services, a Division of PNC Bank, National Association][National Cooperative Bank, N.A.]
Subordinate Class Representative: [_____________________]
I. | Population of Mortgage Loans that Were Considered in Compiling this Report. |
1. | [__] Specially Serviced Mortgage Loans were transferred to special servicing in the prior calendar year [INSERT YEAR]. |
a. | [__] of such Specially Serviced Mortgage Loans are still being analyzed by the Special Servicer and/or Subordinate Class Representative as part of the development of an Asset Status Report. This report does not include work activity related to those open cases. |
b. | [__] of such Specially Serviced Mortgage Loans had executed Final Asset Status Reports. This report is based only on the Specially Serviced Mortgage Loans in respect of which a Final Asset Status Report has been issued. The Final Asset Status Reports may not yet be fully implemented. |
II. | Executive Summary |
Based on the requirements and qualifications set forth in the Pooling and Servicing Agreement, as well as the items listed below, the Trust Advisor has undertaken a limited review of the Special Servicer’s operational activities to service certain Specially Serviced Mortgage Loans in accordance with the Servicing Standard. Based on such review, the Trust Advisor [does, does not] believe there are material violations of the Special Servicer’s compliance with its obligations under the Pooling and Servicing Agreement. In addition, the Trust Advisor notes the following: [PROVIDE SUMMARY OF ANY ADDITIONAL MATERIAL INFORMATION].
In connection with the assessment set forth in this report:
1. | The Trust Advisor reviewed the Final Asset Status Report that was previously executed by the Special Servicer for the following [__] Specially Serviced Mortgage Loans: [LIST APPLICABLE SPECIALLY SERVICED MORTGAGE LOANS]. |
1This report is an indicative report and does not reflect the final form of annual report to be used in any particular year. The Trust Advisor will have the ability to modify or alter the organization and content of any particular report, subject to the compliance with the terms of the Pooling and Servicing Agreement, including, without limitation, provisions relating to Privileged Information.
E-1-1 |
2. | The Trust Advisor’s review of the Final Asset Status Reports should be considered a limited investigation and not be considered a full or limited audit. For instance, we did not review each page of the Special Servicer’s policy and procedure manuals (including amendments and appendices), re-engineer the quantitative aspects of their net present value calculator, visit the property or interact with the borrower. |
3. | All opinions outlined herein are limited to the Specially Serviced Mortgage Loans of this mortgage loan pool with respect to which Final Asset Reports have been delivered. Confidentiality and other provisions prohibit the Trust Advisor from using information it is privy to from other assignments in facilitating the activities of this assignment. |
4. | As required under the Pooling and Servicing Agreement, the Trust Advisor has undertaken a reasonable review of such additional limited non-privileged information and documentation provided by the Special Servicer prior to the Trust Advisor finalizing its annual assessment. |
III. | Specific Items of Review |
1. | The Trust Advisor reviewed the following items in connection with the generation of this report: [LIST MATERIAL ITEMS]. |
2. | The following is a general discussion of certain concerns raised by the Trust Advisor discussed in this report: [LIST CONCERNS]. |
3. | In addition to the other information presented herein, the Trust Advisor notes the following additional items: [LIST ADDITIONAL ITEMS]. |
4. | As required under the Pooling and Servicing Agreement, the Trust Advisor has undertaken a reasonable review of such additional limited non-privileged information and documentation provided by the Special Servicer prior to the Trust Advisor finalizing its annual assessment. |
IV. | Qualifications Related to the Work Product Undertaken and Opinions Related to this Report |
1. | The Trust Advisor did not participate in, or have access to, the Special Servicer’s and Subordinate Class Representative’s discussion(s) regarding any Specially Serviced Mortgage Loan. The Trust Advisor did not meet with the Special Servicer or the Subordinate Class Representative. As such, the Trust Advisor generally relied upon its review of the information described in Item 1 of Section III above and its interaction with the Special Servicer in gathering the relevant information to generate this report. |
2. | The Special Servicer has the legal authority and responsibility to service the Specially Serviced Mortgage Loans pursuant to the Pooling and Servicing Agreement. The Trust Advisor has no responsibility or authority to alter the standards set forth therein. |
3. | Confidentiality and other contractual limitations limit the Trust Advisor’s ability to outline the details or substance of certain information it reviewed in connection with its duties under the Pooling and Servicing Agreement. As a result, this report may not reflect all the relevant information that the Trust Advisor is given access to by the Special Servicer. |
E-1-2 |
4. | There are many tasks that the Special Servicer undertakes on an ongoing basis related to Specially Serviced Mortgage Loans. These include, but are not limited to, assumptions, ownership changes, collateral substitutions, capital reserve changes, etc. The Trust Advisor does not participate in discussions regarding such actions. As such, the Trust Advisor has not assessed the Special Servicer’s operational compliance with respect to those types of actions. |
5. | This report is furnished to the Certificate Administrator pursuant to the provisions of the Pooling and Servicing Agreement. The delivery of this report shall not be construed to impose any duty on the Trust Advisor to respond to investor questions or inquiries. |
Terms used but not defined herein have the meaning set forth in the Pooling and Servicing Agreement dated as of June 1, 2015.
E-1-3 |
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Annex E-2
Form of Trust Advisor Annual Report2
(Collective Consultation Period and Senior Consultation Period)
Report Date: Report will be delivered annually no later than [INSERT DATE].
Transaction: Wells Fargo Commercial Mortgage Trust 2015-C29, Commercial Mortgage Pass-Through Certificates, Series 2015-C29
Trust Advisor: Trimont Real Estate Advisors, Inc.
Special Servicer: [Midland Loan Services, a Division of PNC Bank, National Association][National Cooperative Bank, N.A.]
Subordinate Class Representative: [_____________________]
I. | Population of Mortgage Loans that Were Considered in Compiling this Report |
1. | [__] Specially Serviced Mortgage Loans were transferred to special servicing in the prior calendar year [INSERT YEAR]. |
a. | [__] of such Specially Serviced Mortgage Loans are still being analyzed by the Special Servicer as part of the development of an Asset Status Report. |
b. | [__] of such Specially Serviced Mortgage Loans had executed Final Asset Status Reports. The Final Asset Status Reports may not yet be fully implemented. |
II. | Executive Summary |
Based on the requirements and qualifications set forth in the Pooling and Servicing Agreement, as well as the items listed below, the Trust Advisor has undertaken a limited review of the Special Servicer’s operational activities to service certain Specially Serviced Mortgage Loans in accordance with the Servicing Standard. Based on such review, the Trust Advisor [does, does not] believe there are material violations of the Special Servicer’s compliance with its obligations under the Pooling and Servicing Agreement. In addition, the Trust Advisor notes the following: [PROVIDE SUMMARY OF ANY ADDITIONAL MATERIAL INFORMATION].
In connection with the assessment set forth in this report:
1. | The Trust Advisor reviewed the Asset Status Reports, net present value calculations and Appraisal Reduction Amount calculations and [LIST OTHER REVIEWED INFORMATION] for the following [__] Specially Serviced Mortgage Loans: [LIST APPLICABLE SPECIALLY SERVICED MORTGAGE LOANS] |
2. | [If report is rendered during a Senior Consultation Period, add:] The Trust Advisor met with the Special Servicer on [DATE] for the annual meeting. Participants from the Special Servicer included: [IDENTIFY PARTICIPANTS’ |
2 This report is an indicative report and does not reflect the final form of annual report to be used in any particular year. The Trust Advisor will have the ability to modify or alter the organization and content of any particular report, subject to the compliance with the terms of the Pooling and Servicing Agreement, including, without limitation, provisions relating to Privileged Information.
E-2-1 |
NAMES AND TITLES]. The Specially Serviced Mortgage Loans (including Asset Status Reports, other relevant accompanying information and any related net present value calculations and Appraisal Reduction Amount calculations) were referenced in the meeting. The discussion focused on the Special Servicer’s execution of its resolution and liquidation procedures in general terms as well as in specific reference to the Specially Serviced Mortgage Loans. |
a. | The Trust Advisor’s review of the Asset Status Reports (including related net present value calculations and Appraisal Reduction Amount calculations) related to the Specially Serviced Mortgage Loans [[if report is rendered during a Senior Consultation Period:] and meeting with the Special Servicer] should be considered a limited investigation and not be considered a full or limited audit. For instance, we did not review each page of the Special Servicer’s policy and procedure manuals (including amendments and appendices), re-engineer the quantitative aspects of their net present value calculator, visit the property or interact with the borrower. |
b. | All opinions outlined herein are limited to the Specially Serviced Mortgage Loans of this mortgage loan pool with respect to which Asset Status Reports have been delivered. Confidentiality and other provisions prohibit the Trust Advisor from using information it is privy to from other assignments in facilitating the activities of this assignment. |
3. | As required under the Pooling and Servicing Agreement, the Trust Advisor has undertaken a reasonable review of such additional limited non-privileged information and documentation provided by the Special Servicer prior to the Trust Advisor finalizing its annual assessment. |
III. | Specific Items of Review |
1. | The Trust Advisor reviewed the following items in connection with [if report is rendered during Senior Consultation Period: the annual meeting] and the generation of this report: [LIST MATERIAL ITEMS]. |
2. | During the prior year, the Trust Advisor consulted with the Special Servicer regarding its strategy plan for a limited number of issues related to the following Specially Serviced Mortgage Loans: [LIST]. The Trust Advisor participated in discussions and made strategic observations and recommended alternative courses of action to the extent it deemed such observations and recommendations appropriate. The Special Servicer [agreed with/did not agree with] the recommendations made by the Trust Advisor. Such recommendations generally included the following: [LIST]. |
3. | Appraisal Reduction Amount calculations and net present value calculations: |
a. | The Trust Advisor [received/did not receive] information necessary to recalculate and verify the accuracy of the mathematical calculations and the corresponding application of the applicable formulas required to be utilized in connection with any Appraisal Reduction Amount or net present value calculations used in the Special Servicer’s determination of what course of action to take in connection with the workout or liquidation of a |
E-2-2 |
Specially Serviced Mortgage Loan prior to the utilization by the Special Servicer. |
b. | The Trust Advisor [agrees/does not agree] with the [mathematical calculations] [and/or] [the application of the applicable non-discretionary portions of the formulas] required to be utilized for such calculation. |
c. | After consultation with the Special Servicer to resolve any inaccuracy in the mathematical calculations or the application of the non-discretionary portions of the related formulas in arriving at those mathematical calculations, such inaccuracy [has been/ has not been] resolved. |
4. | The following is a general discussion of certain concerns raised by the Trust Advisor discussed in this report: [LIST CONCERNS]. |
5. | In addition to the other information presented herein, the Trust Advisor notes the following additional items: [LIST ADDITIONAL ITEMS]. |
6. | As required under the Pooling and Servicing Agreement, the Trust Advisor has undertaken a reasonable review of such additional limited non-privileged information and documentation provided by the Special Servicer prior to the Trust Advisor finalizing its annual assessment. |
IV. | Qualifications Related to the Work Product Undertaken and Opinions Related to this Report |
1. | The Trust Advisor did not participate in, or have access to, the Special Servicer’s and Subordinate Class Representative’s discussion(s) regarding any Specially Serviced Mortgage Loan. The Trust Advisor did not meet with the [Special Servicer or the] Subordinate Class Representative. [[If report rendered during Senior Consultation Period:] While the Subordinate Class Representative may have attended the annual meeting,] the Trust Advisor generally did not address issues and questions to the Subordinate Class Representative. As such, the Trust Advisor generally relied upon its review of the information described in Item 1 of Section III above and its interaction with the Special Servicer in gathering the relevant information to generate this report. |
2. | The Special Servicer has the legal authority and responsibility to service the Specially Serviced Mortgage Loans pursuant to the Pooling and Servicing Agreement. The Trust Advisor has no responsibility or authority to alter the standards set forth therein. |
3. | Confidentiality and other contractual limitations limit the Trust Advisor’s ability to outline the details or substance of [[if report rendered during Senior Consultation Period:] the meeting held between it and the Special Servicer regarding any Specially Serviced Mortgage Loans and] certain information it reviewed in connection with its duties under the Pooling and Servicing Agreement. As a result, this report may not reflect all the relevant information that the Trust Advisor is given access to by the Special Servicer. |
4. | There are many tasks that the Special Servicer undertakes on an ongoing basis related to Specially Serviced Mortgage Loans. These include, but are not limited to, assumptions, ownership changes, collateral substitutions, |
E-2-3 |
capital reserve changes, etc. The Trust Advisor does not participate in discussions regarding such actions. As such, the Trust Advisor has not assessed the Special Servicer’s operational compliance with respect to those types of actions. |
5. | This report is furnished to the Certificate Administrator pursuant to the provisions of the Pooling and Servicing Agreement. The delivery of this report shall not be construed to impose any duty on the Trust Advisor to respond to investor questions or inquiries. |
Terms used but not defined herein have the meaning set forth in the Pooling and Servicing Agreement dated as of June 1, 2015.
E-2-4 |
Annex F
Form of Distribution Date Statement
F-1 |
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Wells Fargo Commercial Mortgage Trust 2015-C29 Commercial Mortgage Pass-Through Certificates Series 2015-C29 | For Additional Information please contact | ||
CTSLink Customer Service | |||
1-866-846-4526 | |||
Reports Available www.ctslink.com | |||
Wells Fargo Bank, N.A. | |||
Corporate Trust Services | Payment Date: | 7/17/15 | |
8480 Stagecoach Circle | Record Date: | 6/30/15 | |
Frederick, MD 21701-4747 | Determination Date: | 7/13/15 |
DISTRIBUTION DATE STATEMENT | ||||||||
Table of Contents | ||||||||
STATEMENT SECTIONS | PAGE(s) | |||||||
Certificate Distribution Detail | 2 | |||||||
Certificate Factor Detail | 3 | |||||||
Exchangeable Class Detail | 4 | |||||||
Reconciliation Detail | 5 | |||||||
Other Required Information | 6 | |||||||
Cash Reconciliation Detail | 7 | |||||||
Current Mortgage Loan and Property Stratification Tables | 8-10 | |||||||
Mortgage Loan Detail | 11 | |||||||
NOI Detail | 12 | |||||||
Principal Prepayment Detail | 13 | |||||||
Historical Detail | 14 | |||||||
Delinquency Loan Detail | 15 | |||||||
Specially Serviced Loan Detail | 16-17 | |||||||
Advance Summary | 18 | |||||||
Modified Loan Detail | 19 | |||||||
Historical Liquidated Loan Detail | 20 | |||||||
Historical Bond / Collateral Loss Reconciliation Detail | 21 | |||||||
Interest Shortfall Reconciliation Detail | 22-23 | |||||||
Defeased Loan Detail | 24 | |||||||
Supplemental Reporting | 25 | |||||||
Depositor | General Master Servicer | NCB Master & NCB Special Servicer | General Special Servicer | Trust Advisor | ||||||||||||||||
Wells Fargo Commercial Mortgage Securities, Inc. | Wells Fargo Bank, National Association | National Cooperative Bank, N.A. 2011 Crystal Drive | Midland Loan Services A Division of PNC Bank, N.A. | Trimont Real Estate Advisors, Inc. 3424 Peachtree Road NE | ||||||||||||||||
375 Park Avenue | 550 S. Tryon Street, 14th Floor | Suite 800 | 10851 Mastin Street, Building 82 | Suite 2200 | ||||||||||||||||
2nd Floor, J0127-23 | Charlotte, NC 28202 | Arlington, VA 22202 | Overland Park, KS 66210 | |||||||||||||||||
New York, NY 10152 | Atlanta, GA 30326 | |||||||||||||||||||
Contact: | Contact: | |||||||||||||||||||
Anthony.Sfarra@wellsfargo.com | REAM_InvestorRelations@wellsfargo.com | Contact: Kathleen Luzik | Contact: Valerie Nichols | Contact: Steven Lauer | ||||||||||||||||
Phone Number: (212) 214-5613 | Phone Number: (866) 898-1615 | Phone Number: (703) 302-1902 | Phone Number: (913) 253-9000 | Phone Number: (404) 581-7502 | ||||||||||||||||
This report is compiled by Wells Fargo Bank, N.A. from information provided by third parties. Wells Fargo Bank, N.A. has not independently confirmed the accuracy of the information. | ||||||||||||||||||||
Please visitwww.ctslink.com for additional information and special notices. In addition, certificateholders may register online for email notification when special notices are posted. For information or assistance please call 866-846-4526. | ||||||||||||||||||||
Page 1 of 25 |
Wells Fargo Commercial Mortgage Trust 2015-C29 Commercial Mortgage Pass-Through Certificates Series 2015-C29 | For Additional Information please contact | ||
CTSLink Customer Service | |||
1-866-846-4526 | |||
Reports Available www.ctslink.com | |||
Wells Fargo Bank, N.A. | |||
Corporate Trust Services | Payment Date: | 7/17/15 | |
8480 Stagecoach Circle | Record Date: | 6/30/15 | |
Frederick, MD 21701-4747 | Determination Date: | 7/13/15 |
Certificate Distribution Detail | ||||||||||||||||||||||||||
Class (2) | CUSIP | Pass-Through Rate | Original Balance | Beginning Balance | Principal Distribution | Interest Distribution | Prepayment Premium | Realized Loss/ Additional Trust Fund Expenses | Total Distribution | Ending Balance | Current Subordination Level (1) | |||||||||||||||
A-1 | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||
A-2 | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||
A-3 | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||
A-4 | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||
A-SB | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||
A-4FX | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||
A-4FL | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||
A-S | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||
B | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||
C | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||
D | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||
E | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||
F | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||
G | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||
V-1 | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||
V-2 | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||
R | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||
Totals | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||
Class | CUSIP | Pass-Through Rate | Original Notional Amount | Beginning Notional Amount | Interest Distribution | Prepayment Premium | Total Distribution | Ending Notional Amount | ||||||||||||||||||
X-A | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||
X-B | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||||
(1) Calculated by taking (A) the sum of the ending certificate balance of all classes less (B) the sum of (i) the ending balance of the designated class and (ii) the ending certificate balance of all classes which are not subordinate to the designated class and dividing the result by (A). (2) The balances of the Class A-S, Class B, Class C certificates represent the balance of their respective Regular Interest, as detailed in the Pooling and Servicing Agreement. A portion of these classes may be exchanged and held in Class PEX. For details on the current status and payments of Class PEX, see page 4. | ||||||||||||||||||||||||||
Page 2 of 25 |
Wells Fargo Commercial Mortgage Trust 2015-C29 Commercial Mortgage Pass-Through Certificates Series 2015-C29 | For Additional Information please contact | ||
CTSLink Customer Service | |||
1-866-846-4526 | |||
Reports Available www.ctslink.com | |||
Wells Fargo Bank, N.A. | |||
Corporate Trust Services | Payment Date: | 7/17/15 | |
8480 Stagecoach Circle | Record Date: | 6/30/15 | |
Frederick, MD 21701-4747 | Determination Date: | 7/13/15 |
Certificate Factor Detail | |||||||||
Class | CUSIP | Beginning | Principal | Interest | Prepayment | Realized Loss/ | Ending | ||
A-1 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |||
A-2 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |||
A-3 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |||
A-4 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |||
A-SB | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |||
A-4FX | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |||
A-4FL | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |||
A-S | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |||
B | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |||
C | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |||
PEX | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |||
D | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |||
E | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |||
F | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |||
G | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |||
V-1 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |||
V-2 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |||
R | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |||
Class | CUSIP | Beginning Notional Amount | Interest Distribution | Prepayment Premium | Ending Notional Amount | ||||
X-A | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |||||
X-B | 0.00000000 | 0.00000000 | 0.00000000 | 0.00000000 | |||||
Page 3 of 25 |
Wells Fargo Commercial Mortgage Trust 2015-C29 Commercial Mortgage Pass-Through Certificates Series 2015-C29 | For Additional Information please contact | ||
CTSLink Customer Service | |||
1-866-846-4526 | |||
Reports Available www.ctslink.com | |||
Wells Fargo Bank, N.A. | |||
Corporate Trust Services | Payment Date: | 7/17/15 | |
8480 Stagecoach Circle | Record Date: | 6/30/15 | |
Frederick, MD 21701-4747 | Determination Date: | 7/13/15 |
Exchangeable Class Detail | ||||||||||||||
Class\ Component | CUSIP | Pass-Through Rate | Original Balance | Beginning Balance | Principal Distribution | Interest Distribution | Prepayment Premium | Realized Loss/ Additional Trust Fund Expenses | Total Distribution | Ending Balance | ||||
A-S Regular Interest Breakdown | ||||||||||||||
A-S (Cert) | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||
A-S (PEX) | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||
Totals | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||
B Regular Interest Breakdown | ||||||||||||||
B (Cert) | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||
B (PEX) | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||
Totals | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||
C Regular Interest Breakdown | ||||||||||||||
C (Cert) | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||
C (PEX) | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||
Totals | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||
Class PEX Detail | ||||||||||||||
Class\ Component | CUSIP | Pass-Through Rate | Original Balance | Beginning Balance | Principal Distribution | Interest Distribution | Prepayment Premium | Realized Loss/ Additional Trust Fund Expenses | Total Distribution | Ending Balance | ||||
PEX | 0.000000% | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||
Page 4 of 25 |
Wells Fargo Commercial Mortgage Trust 2015-C29 Commercial Mortgage Pass-Through Certificates Series 2015-C29 | For Additional Information please contact | ||
CTSLink Customer Service | |||
1-866-846-4526 | |||
Reports Available www.ctslink.com | |||
Wells Fargo Bank, N.A. | |||
Corporate Trust Services | Payment Date: | 7/17/15 | |
8480 Stagecoach Circle | Record Date: | 6/30/15 | |
Frederick, MD 21701-4747 | Determination Date: | 7/13/15 |
Reconciliation Detail | ||||||||||||||||||||||
Principal Reconciliation | ||||||||||||||||||||||
Stated Beginning Principal Balance | Unpaid Beginning Principal Balance | Scheduled Principal | Unscheduled Principal | Principal Adjustments | Realized Loss | Stated Ending Principal Balance | Unpaid Ending Principal Balance | Current Principal Distribution Amount | ||||||||||||||
Total | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Certificate Interest Reconciliation | |||||||||||||||||||||||||
Class | Accrual Dates | Accrual Days | Accrued Certificate Interest | Net Aggregate Prepayment Interest Shortfall | Distributable Certificate Interest | Distributable Certificate Interest Adjustment | WAC CAP Shortfall | Additional Trust Fund Expenses | Interest Distribution | Remaining Unpaid Distributable Certificate Interest | |||||||||||||||
A-1 | 0 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
A-2 | 0 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
A-3 | 0 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
A-4 | 0 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
A-SB | 0 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
X-A | 0 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
X-B | 0 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
A-4FX | 0 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
A-4FL | 0 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
A-S | 0 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
B | 0 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
C | 0 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
D | 0 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
E | 0 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
F | 0 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
G | 0 | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
Totals | 0 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||
Page 5 of 25 |
Wells Fargo Commercial Mortgage Trust 2015-C29 Commercial Mortgage Pass-Through Certificates Series 2015-C29 | For Additional Information please contact | ||
CTSLink Customer Service | |||
1-866-846-4526 | |||
Reports Available www.ctslink.com | |||
Wells Fargo Bank, N.A. | |||
Corporate Trust Services | Payment Date: | 7/17/15 | |
8480 Stagecoach Circle | Record Date: | 6/30/15 | |
Frederick, MD 21701-4747 | Determination Date: | 7/13/15 |
Other Required Information | |||||||||||||||||||
Available Distribution Amount (1) | 0.00 | ||||||||||||||||||
Current 1 Month LIBOR Rate | 0.00% | ||||||||||||||||||
Next 1 Month LIBOR Rate | 0.00% | Appraisal Reduction Amount | |||||||||||||||||
Loan Number | Appraisal | Cumulative | Most Recent | ||||||||||||||||
Reduction | ASER | App. Red. | |||||||||||||||||
Effected | Amount | Date | |||||||||||||||||
Total | |||||||||||||||||||
(1) The Available Distribution Amount includes any Prepayment Premiums. | |||||||||||||||||||
Page 6 of 25 |
Wells Fargo Commercial Mortgage Trust 2015-C29 Commercial Mortgage Pass-Through Certificates Series 2015-C29 | For Additional Information please contact | ||
CTSLink Customer Service | |||
1-866-846-4526 | |||
Reports Available www.ctslink.com | |||
Wells Fargo Bank, N.A. | |||
Corporate Trust Services | Payment Date: | 7/17/15 | |
8480 Stagecoach Circle | Record Date: | 6/30/15 | |
Frederick, MD 21701-4747 | Determination Date: | 7/13/15 |
Cash Reconciliation Detail | ||||||||
Total Funds Collected | Total Funds Distributed | |||||||
Interest: | Fees: | |||||||
Interest paid or advanced | 0.00 | Master Servicing Fee-Wells Fargo Bank, N.A. and National Cooperative Bank, N.A. | 0.00 | |||||
Interest reductions due to Non-Recoverability Determinations | 0.00 | Trustee Fee-Wilmington Trust National Association | 0.00 | |||||
Interest Adjustments | 0.00 | Certificate Administration Fee-Wells Fargo Bank, N.A. | 0.00 | |||||
Deferred Interest | 0.00 | CREFC Royalty License Fee | 0.00 | |||||
Net Prepayment Interest Shortfall | 0.00 | Trust Advisor Fee-Trimont Real Estate Advisors, Inc. | 0.00 | |||||
Net Prepayment Interest Excess | 0.00 | Total Fees | 0.00 | |||||
Extension Interest | 0.00 | Additional Trust Fund Expenses: | ||||||
Interest Reserve Withdrawal | 0.00 | |||||||
Total Interest Collected | 0.00 | Reimbursement for Interest on Advances | 0.00 | |||||
�� | ASER Amount | 0.00 | ||||||
Principal: | Special Servicing Fee | 0.00 | ||||||
Scheduled Principal | 0.00 | Rating Agency Expenses | 0.00 | |||||
Unscheduled Principal | 0.00 | Attorney Fees & Expenses | 0.00 | |||||
Principal Prepayments | 0.00 | Bankruptcy Expense | 0.00 | |||||
Collection of Principal after Maturity Date | 0.00 | Taxes Imposed on Trust Fund | 0.00 | |||||
Recoveries from Liquidation and Insurance Proceeds | 0.00 | Non-Recoverable Advances | 0.00 | |||||
Excess of Prior Principal Amounts paid | 0.00 | Other Expenses | 0.00 | |||||
Curtailments | 0.00 | Total Additional Trust Fund Expenses | 0.00 | |||||
Negative Amortization | 0.00 | |||||||
Principal Adjustments | 0.00 | Interest Reserve Deposit | 0.00 | |||||
Total Principal Collected | 0.00 | |||||||
Payments to Certificateholders & Others: | ||||||||
Other: | Interest Distribution | 0.00 | ||||||
Prepayment Penalties/Yield Maintenance | 0.00 | Principal Distribution | 0.00 | |||||
Repayment Fees | 0.00 | Prepayment Penalties/Yield Maintenance | 0.00 | |||||
Borrower Option Extension Fees | 0.00 | Borrower Option Extension Fees | 0.00 | |||||
Equity Payments Received | 0.00 | Equity Payments Paid | 0.00 | |||||
Net Swap Counterparty Payments Received | 0.00 | Net Swap Counterparty Payments Paid | 0.00 | |||||
Total Other Collected | 0.00 | Total Payments to Certificateholders & Others | 0.00 | |||||
Total Funds Collected | 0.00 | Total Funds Distributed | 0.00 | |||||
Page 7 of 25 |
Wells Fargo Commercial Mortgage Trust 2015-C29 Commercial Mortgage Pass-Through Certificates Series 2015-C29 | For Additional Information please contact | ||
CTSLink Customer Service | |||
1-866-846-4526 | |||
Reports Available www.ctslink.com | |||
Wells Fargo Bank, N.A. | |||
Corporate Trust Services | Payment Date: | 7/17/15 | |
8480 Stagecoach Circle | Record Date: | 6/30/15 | |
Frederick, MD 21701-4747 | Determination Date: | 7/13/15 |
Current Mortgage Loan and Property Stratification Tables Aggregate Pool | ||||||||||||||||
Scheduled Balance | State (3) | |||||||||||||||
Scheduled Balance | # of loans | Scheduled Balance | % of Agg. Bal. | WAM (2) | WAC | Weighted Avg DSCR (1) | State | # of Props. | Scheduled Balance | % of Agg. Bal. | WAM (2) | WAC | Weighted Avg DSCR (1) | |||
Totals | Totals | |||||||||||||||
Page 8 of 25 |
Wells Fargo Commercial Mortgage Trust 2015-C29 Commercial Mortgage Pass-Through Certificates Series 2015-C29 | For Additional Information please contact | ||
CTSLink Customer Service | |||
1-866-846-4526 | |||
Reports Available www.ctslink.com | |||
Wells Fargo Bank, N.A. | |||
Corporate Trust Services | Payment Date: | 7/17/15 | |
8480 Stagecoach Circle | Record Date: | 6/30/15 | |
Frederick, MD 21701-4747 | Determination Date: | 7/13/15 |
Current Mortgage Loan and Property Stratification Tables Aggregate Pool | ||||||||||||||||
Debt Service Coverage Ratio | Property Type (3) | |||||||||||||||
Debt Service Coverage Ratio | # of loans | Scheduled Balance | % of Agg. Bal. | WAM (2) | WAC | Weighted Avg DSCR (1) | Property Type | # of Props. | Scheduled Balance | % of Agg. Bal. | WAM (2) | WAC | Weighted Avg DSCR (1) | |||
Totals | Totals | |||||||||||||||
Note Rate | Seasoning | |||||||||||||||
Note Rate | # of loans | Scheduled Balance | % of Agg. Bal. | WAM (2) | WAC | Weighted Avg DSCR (1) | Seasoning | # of loans | Scheduled Balance | % of Agg. Bal. | WAM (2) | WAC | Weighted Avg DSCR (1) | |||
Totals | Totals | |||||||||||||||
See footnotes on last page of this section. | ||||||||||||||||
Page 9 of 25 |
Wells Fargo Commercial Mortgage Trust 2015-C29 Commercial Mortgage Pass-Through Certificates Series 2015-C29 | For Additional Information please contact | ||
CTSLink Customer Service | |||
1-866-846-4526 | |||
Reports Available www.ctslink.com | |||
Wells Fargo Bank, N.A. | |||
Corporate Trust Services | Payment Date: | 7/17/15 | |
8480 Stagecoach Circle | Record Date: | 6/30/15 | |
Frederick, MD 21701-4747 | Determination Date: | 7/13/15 |
Current Mortgage Loan and Property Stratification Tables Aggregate Pool | ||||||||||||||||
Anticipated Remaining Term (ARD and Balloon Loans) | Remaining Stated Term (Fully Amortizing Loans) | |||||||||||||||
Anticipated Remaining Term (2) | # of loans | Scheduled Balance | % of Agg. Bal. | WAM (2) | WAC | Weighted Avg DSCR (1) | Remaining Stated Term | # of loans | Scheduled Balance | % of Agg. Bal. | WAM (2) | WAC | Weighted Avg DSCR (1) | |||
Totals | Totals | |||||||||||||||
Remaining Amortization Term (ARD and Balloon Loans) | Age of Most Recent NOI | |||||||||||||||
Remaining Amortization Term | # of loans | Scheduled Balance | % of Agg. Bal. | WAM (2) | WAC | Weighted Avg DSCR (1) | Age of Most Recent NOI | # of loans | Scheduled Balance | % of Agg. Bal. | WAM (2) | WAC | Weighted Avg DSCR (1) | |||
Totals | Totals | |||||||||||||||
(1) Debt Service Coverage Ratios are updated periodically as new NOI figures become available from borrowers on an asset level. In all cases, the most recent DSCR provided by the Servicer is used. To the extent that no DSCR is provided by the Servicer, information from the offering document is used. The Trustee makes no representations as to the accuracy of the data provided by the borrower for this calculation. | ||||||||||||||||
(2) Anticipated Remaining Term and WAM are each calculated based upon the term from the current month to the earlier of the Anticipated Repayment Date, if applicable, and the maturity date. | ||||||||||||||||
(3) Data in this table was calculated by allocating pro-rata the current loan information to the properties based upon the Cut-off Date balance of each property as disclosed in the offering document. | ||||||||||||||||
Page 10 of 25 |
Wells Fargo Commercial Mortgage Trust 2015-C29 Commercial Mortgage Pass-Through Certificates Series 2015-C29 | For Additional Information please contact | ||
CTSLink Customer Service | |||
1-866-846-4526 | |||
Reports Available www.ctslink.com | |||
Wells Fargo Bank, N.A. | |||
Corporate Trust Services | Payment Date: | 7/17/15 | |
8480 Stagecoach Circle | Record Date: | 6/30/15 | |
Frederick, MD 21701-4747 | Determination Date: | 7/13/15 |
Mortgage Loan Detail | |||||||||||||||||||
Loan Number | ODCR | Property Type (1) | City | State | Interest Payment | Principal Payment | Gross Coupon | Anticipated Repayment Date | Maturity Date | Neg. Amort (Y/N) | Beginning Scheduled Balance | Ending Scheduled Balance | Paid Thru Date | Appraisal Reduction Date | Appraisal Reduction Amount | Res. Strat (2) | Mod. Code (3) | ||
Totals |
(1) Property Type Code | (2) Resolution Strategy Code | (3) Modification Code | ||||||||||||||||||||
MF | - | Multi-Family | OF | - | Office | 1 | - | Modification | 6 | - | DPO | 10 | - | Deed in Lieu Of | 1 | - | Maturity Date Extension | 6 | - | Capitalization of Interest | ||
RT | - | Retail | MU | - | Mixed Use | 2 | - | Foreclosure | 7 | - | REO | Foreclosure | 2 | - | Amortization Change | 7 | - | Capitalization of Taxes | ||||
HC | - | Health Care | LO | - | Lodging | 3 | - | Bankruptcy | 8 | - | Resolved | 11 | - | Full Payoff | 3 | - | Principal Write-Off | 8 | - | Principal Write-Off | ||
IN | - | Industrial | SS | - | Self Storage | 4 | - | Extension | 9 | - | Pending Return | 12 | - | Reps and Warranties | 4 | - | Blank | 9 | - | Combination | ||
WH | - | Warehouse | OT | - | Other | 5 | - | Note Sale | to Master Servicer | 13 | - | Other or TBD | 5 | - | Temporary Rate Reduction | |||||||
MH | - | Mobile Home Park | ||||||||||||||||||||
Page 11 of 25 |
Wells Fargo Commercial Mortgage Trust 2015-C29 Commercial Mortgage Pass-Through Certificates Series 2015-C29 | For Additional Information please contact | ||
CTSLink Customer Service | |||
1-866-846-4526 | |||
Reports Available www.ctslink.com | |||
Wells Fargo Bank, N.A. | |||
Corporate Trust Services | Payment Date: | 7/17/15 | |
8480 Stagecoach Circle | Record Date: | 6/30/15 | |
Frederick, MD 21701-4747 | Determination Date: | 7/13/15 |
NOI Detail | |||||||||||
Loan Number | ODCR | Property Type | City | State | Ending Scheduled Balance | Most Recent Fiscal NOI | Most Recent NOI | Most Recent NOI Start Date | Most Recent NOI End Date | ||
Total | |||||||||||
Page 12 of 25 |
Wells Fargo Commercial Mortgage Trust 2015-C29 Commercial Mortgage Pass-Through Certificates Series 2015-C29 | For Additional Information please contact | ||
CTSLink Customer Service | |||
1-866-846-4526 | |||
Reports Available www.ctslink.com | |||
Wells Fargo Bank, N.A. | |||
Corporate Trust Services | Payment Date: | 7/17/15 | |
8480 Stagecoach Circle | Record Date: | 6/30/15 | |
Frederick, MD 21701-4747 | Determination Date: | 7/13/15 |
Principal Prepayment Detail | ||||||||
Loan Number | Loan Group | Offering Document | Principal Prepayment Amount | Prepayment Penalties | ||||
Cross-Reference | Payoff Amount | Curtailment Amount | Prepayment Premium | Yield Maintenance Premium | ||||
Totals | ||||||||
Page 13 of 25 |
�� | |||
Wells Fargo Commercial Mortgage Trust 2015-C29 Commercial Mortgage Pass-Through Certificates Series 2015-C29 | For Additional Information please contact | ||
CTSLink Customer Service | |||
1-866-846-4526 | |||
Reports Available www.ctslink.com | |||
Wells Fargo Bank, N.A. | |||
Corporate Trust Services | Payment Date: | 7/17/15 | |
8480 Stagecoach Circle | Record Date: | 6/30/15 | |
Frederick, MD 21701-4747 | Determination Date: | 7/13/15 |
Historical Detail | |||||||||||||||||||||
Delinquencies | Prepayments | Rate and Maturities | |||||||||||||||||||
Distribution | 30-59 Days | 60-89 Days | 90 Days or More | Foreclosure | REO | Modifications | Curtailments | Payoff | Next Weighted Avg. | ||||||||||||
Date | # | Balance | # | Balance | # | Balance | # | Balance | # | Balance | # | Balance | # | Balance | # | Balance | Coupon | Remit | WAM | ||
Note: Foreclosure and REO Totals are excluded from the delinquencies. | |||||||||||||||||||||
Page 14 of 25 |
Wells Fargo Commercial Mortgage Trust 2015-C29 Commercial Mortgage Pass-Through Certificates Series 2015-C29 | For Additional Information please contact | ||
CTSLink Customer Service | |||
1-866-846-4526 | |||
Reports Available www.ctslink.com | |||
Wells Fargo Bank, N.A. | |||
Corporate Trust Services | Payment Date: | 7/17/15 | |
8480 Stagecoach Circle | Record Date: | 6/30/15 | |
Frederick, MD 21701-4747 | Determination Date: | 7/13/15 |
Delinquency Loan Detail | |||||||||||||||
Loan Number | Offering Document Cross-Reference | # of Months Delinq. | Paid Through Date | Current P & I Advances | Outstanding P & I Advances ** | Status of Mortgage Loan (1) | Resolution Strategy Code (2) | Servicing Transfer Date | Foreclosure Date | Actual Principal Balance | Outstanding Servicing Advances | Bankruptcy Date | REO Date | ||
Totals |
(1) Status of Mortgage Loan | (2) Resolution Strategy Code | |||||||||||||||||||
A | - | Payment Not Received | 0 | - Current | 4 | - | Assumed Scheduled Payment | 1 | - | Modification | 6 | - | DPO | 10 | - | Deed In Lieu Of | ||||
But Still in Grace Period | 1 | - One Month Delinquent | (Performing Matured Balloon) | 2 | - | Foreclosure | 7 | - | REO | Foreclosure | ||||||||||
Or Not Yet Due | 2 | - Two Months Delinquent | 5 | - | Non Performing Matured Balloon | 3 | - | Bankruptcy | 8 | - | Resolved | 11 | - | Full Payoff | ||||||
B | - | Late Payment But Less | 3 | - Three or More Months Delinquent | 4 | - | Extension | 9 | - | Pending Return | 12 | - | Reps and Warranties | |||||||
Than 1 Month Delinquent | 5 | - | Note Sale | to Master Servicer | 13 | - | Other or TBD | |||||||||||||
** Outstanding P & I Advances include the current period advance. | ||||||||||||||||||||
Page 15 of 25 |
Wells Fargo Commercial Mortgage Trust 2015-C29 Commercial Mortgage Pass-Through Certificates Series 2015-C29 | For Additional Information please contact | ||
CTSLink Customer Service | |||
1-866-846-4526 | |||
Reports Available www.ctslink.com | |||
Wells Fargo Bank, N.A. | |||
Corporate Trust Services | Payment Date: | 7/17/15 | |
8480 Stagecoach Circle | Record Date: | 6/30/15 | |
Frederick, MD 21701-4747 | Determination Date: | 7/13/15 |
Specially Serviced Loan Detail - Part 1 | |||||||||||||||||
Distribution Date | Loan Number | Offering Document Cross-Reference | Servicing Transfer Date | Resolution Strategy Code (1) | Scheduled Balance | Property Type (2) | State | Interest Rate | Actual Balance | Net Operating Income | NOI Date | DSCR | Note Date | Maturity Date | Remaining Amortization Term | ||
(1) Resolution Strategy Code | (2) Property Type Code | ||||||||||||||
1 | - Modification | 6 | - | DPO | 10 | - | Deed In Lieu Of | MF | - | Multi-Family | OF | - | Office | ||
2 | - Foreclosure | 7 | - | REO | Foreclosure | RT | - | Retail | MU | - | Mixed use | ||||
3 | - Bankruptcy | 8 | - | Resolved | 11 | - | Full Payoff | HC | - | Health Care | LO | - | Lodging | ||
4 | - Extension | 9 | - | Pending Return | 12 | - | Reps and Warranties | IN | - | Industrial | SS | - | Self Storage | ||
5 | - Note Sale | to Master Servicer | 13 | - | Other or TBD | WH | - | Warehouse | OT | - | Other | ||||
MH | - | Mobile Home Park | |||||||||||||
Page 16 of 25 |
Wells Fargo Commercial Mortgage Trust 2015-C29 Commercial Mortgage Pass-Through Certificates Series 2015-C29 | For Additional Information please contact | ||
CTSLink Customer Service | |||
1-866-846-4526 | |||
Reports Available www.ctslink.com | |||
Wells Fargo Bank, N.A. | |||
Corporate Trust Services | Payment Date: | 7/17/15 | |
8480 Stagecoach Circle | Record Date: | 6/30/15 | |
Frederick, MD 21701-4747 | Determination Date: | 7/13/15 |
Specially Serviced Loan Detail - Part 2 | |||||||||||
Distribution Date | Loan Number | Offering Document Cross-Reference | Resolution Strategy Code (1) | Site Inspection Date | Phase 1 Date | Appraisal Date | Appraisal Value | Other REO Property Revenue | Comment | ||
(1) Resolution Strategy Code | ||||||||||
1 | - | Modification | 6 | - | DPO | 10 | - | Deed In Lieu Of | ||
2 | - | Foreclosure | 7 | - | REO | Foreclosure | ||||
3 | - | Bankruptcy | 8 | - | Resolved | 11 | - | Full Payoff | ||
4 | - | Extension | 9 | - | Pending Return | 12 | - | Reps and Warranties | ||
5 | - | Note Sale | to Master Servicer | 13 | - | Other or TBD | ||||
Page 17 of 25 |
Wells Fargo Commercial Mortgage Trust 2015-C29 Commercial Mortgage Pass-Through Certificates Series 2015-C29 | For Additional Information please contact | ||
CTSLink Customer Service | |||
1-866-846-4526 | |||
Reports Available www.ctslink.com | |||
Wells Fargo Bank, N.A. | |||
Corporate Trust Services | Payment Date: | 7/17/15 | |
8480 Stagecoach Circle | Record Date: | 6/30/15 | |
Frederick, MD 21701-4747 | Determination Date: | 7/13/15 |
Advance Summary | ||||||
Current P&I Advances | Outstanding P&I Advances | Outstanding Servicing Advances | Current Period Interest on P&I and Servicing Advances Paid | |||
Totals | 0.00 | 0.00 | 0.00 | 0.00 | ||
Page 18 of 25 |
Wells Fargo Commercial Mortgage Trust 2015-C29 Commercial Mortgage Pass-Through Certificates Series 2015-C29 | For Additional Information please contact | ||
CTSLink Customer Service | |||
1-866-846-4526 | |||
Reports Available www.ctslink.com | |||
Wells Fargo Bank, N.A. | |||
Corporate Trust Services | Payment Date: | 7/17/15 | |
8480 Stagecoach Circle | Record Date: | 6/30/15 | |
Frederick, MD 21701-4747 | Determination Date: | 7/13/15 |
Modified Loan Detail | |||||||||
Loan Number | Offering Document Cross-Reference | Pre-Modification Balance | Post-Modification Balance | Pre-Modification Interest Rate | Post-Modification Interest Rate | Modification Date | Modification Description | ||
Totals | |||||||||
Page 19 of 25 |
Wells Fargo Commercial Mortgage Trust 2015-C29 Commercial Mortgage Pass-Through Certificates Series 2015-C29 | For Additional Information please contact | ||
CTSLink Customer Service | |||
1-866-846-4526 | |||
Reports Available www.ctslink.com | |||
Wells Fargo Bank, N.A. | |||
Corporate Trust Services | Payment Date: | 7/17/15 | |
8480 Stagecoach Circle | Record Date: | 6/30/15 | |
Frederick, MD 21701-4747 | Determination Date: | 7/13/15 |
Historical Liquidated Loan Detail | ||||||||||||||
Distribution Date | ODCR | Beginning Scheduled Balance | Fees, Advances, and Expenses * | Most Recent Appraised Value or BPO | Gross Sales Proceeds or Other Proceeds | Net Proceeds Received on Liquidation | Net Proceeds Available for Distribution | Realized Loss to Trust | Date of Current Period Adj. to Trust | Current Period Adjustment to Trust | Cumulative Adjustment to Trust | Loss to Loan with Cum Adj. to Trust | ||
Current Total | ||||||||||||||
Cumulative Total | ||||||||||||||
* Fees, Advances and Expenses also include outstanding P & I advances and unpaid fees (servicing, trustee, etc.). | ||||||||||||||
Page 20 of 25 |
Wells Fargo Commercial Mortgage Trust 2015-C29 Commercial Mortgage Pass-Through Certificates Series 2015-C29 | For Additional Information please contact | ||
CTSLink Customer Service | |||
1-866-846-4526 | |||
Reports Available www.ctslink.com | |||
Wells Fargo Bank, N.A. | |||
Corporate Trust Services | Payment Date: | 7/17/15 | |
8480 Stagecoach Circle | Record Date: | 6/30/15 | |
Frederick, MD 21701-4747 | Determination Date: | 7/13/15 |
Historical Bond/Collateral Loss Reconciliation Detail | |||||||||||||||||||||||||||||||||||
Distribution Date | Offering Document Cross-Reference | Beginning Balance at Liquidation | Aggregate Realized Loss on Loans | Prior Realized Loss Applied to Certificates | Amounts Covered by Credit Support | Interest (Shortages)/ Excesses | Modification /Appraisal Reduction Adj. | Additional (Recoveries) /Expenses | Realized Loss Applied to Certificates to Date | Recoveries of Realized Losses Paid as Cash | (Recoveries)/ Losses Applied to Certificate Interest | ||||||||||||||||||||||||
Totals | |||||||||||||||||||||||||||||||||||
Page 21 of 25 |
Wells Fargo Commercial Mortgage Trust 2015-C29 Commercial Mortgage Pass-Through Certificates Series 2015-C29 | For Additional Information please contact | ||
CTSLink Customer Service | |||
1-866-846-4526 | |||
Reports Available www.ctslink.com | |||
Wells Fargo Bank, N.A. | |||
Corporate Trust Services | Payment Date: | 7/17/15 | |
8480 Stagecoach Circle | Record Date: | 6/30/15 | |
Frederick, MD 21701-4747 | Determination Date: | 7/13/15 |
Interest Shortfall Reconciliation Detail - Part 1 | ||||||||||||||||||||||||||||||||
Offering Document Cross- Reference | Stated Principal Balance at Contribution | Current Ending Scheduled Balance | Special Servicing Fees | ASER | (PPIS) Excess | Non-Recoverable (Scheduled Interest) | Interest on Advances | Modified Interest Rate (Reduction) /Excess | ||||||||||||||||||||||||
Monthly | Liquidation | Work Out | ||||||||||||||||||||||||||||||
�� | ||||||||||||||||||||||||||||||||
Totals | ||||||||||||||||||||||||||||||||
Page 22 of 25 |
Wells Fargo Commercial Mortgage Trust 2015-C29 Commercial Mortgage Pass-Through Certificates Series 2015-C29 | For Additional Information please contact | ||
CTSLink Customer Service | |||
1-866-846-4526 | |||
Reports Available www.ctslink.com | |||
Wells Fargo Bank, N.A. | |||
Corporate Trust Services | Payment Date: | 7/17/15 | |
8480 Stagecoach Circle | Record Date: | 6/30/15 | |
Frederick, MD 21701-4747 | Determination Date: | 7/13/15 |
Interest Shortfall Reconciliation Detail - Part 2 | ||||||||
Offering Document Cross-Reference | Stated Principal Balance at Contribution | Current Ending Scheduled Balance | Reimb of Advances to the Servicer | Other (Shortfalls)/ Refunds | Comments | |||
Current Month | Left to Reimburse Master Servicer | |||||||
Totals | ||||||||
Interest Shortfall Reconciliation Detail Part 2 Total | 0.00 | |||||||
Interest Shortfall Reconciliation Detail Part 1 Total | 0.00 | |||||||
Total Interest Shortfall Allocated to Trust | 0.00 | |||||||
Page 23 of 25 |
Wells Fargo Commercial Mortgage Trust 2015-C29 Commercial Mortgage Pass-Through Certificates Series 2015-C29 | For Additional Information please contact | ||
CTSLink Customer Service | |||
1-866-846-4526 | |||
Reports Available www.ctslink.com | |||
Wells Fargo Bank, N.A. | |||
Corporate Trust Services | Payment Date: | 7/17/15 | |
8480 Stagecoach Circle | Record Date: | 6/30/15 | |
Frederick, MD 21701-4747 | Determination Date: | 7/13/15 |
Defeased Loan Detail | |||||||
Loan Number | Offering Document Cross-Reference | Ending Scheduled Balance | Maturity Date | Note Rate | Defeasance Status | ||
Totals | |||||||
Page 24 of 25 |
Wells Fargo Commercial Mortgage Trust 2015-C29 Commercial Mortgage Pass-Through Certificates Series 2015-C29 | For Additional Information please contact | ||
CTSLink Customer Service | |||
1-866-846-4526 | |||
Reports Available www.ctslink.com | |||
Wells Fargo Bank, N.A. | |||
Corporate Trust Services | Payment Date: | 7/17/15 | |
8480 Stagecoach Circle | Record Date: | 6/30/15 | |
Frederick, MD 21701-4747 | Determination Date: | 7/13/15 |
Supplemental Reporting | ||
Page 25 of 25 |
26 |
[THIS PAGE INTENTIONALLY LEFT BLANK.]
Annex G
Class A-SB Planned Principal Balance Schedule
Distribution | Class A-SB Planned | Distribution | Class A-SB Planned | |||
Date | Principal Balance ($) | Date | Principal Balance ($) | |||
July 2015 | 97,199,000.00 | May 2020 | 97,198,550.80 | |||
August 2015 | 97,199,000.00 | June 2020 | 95,750,620.70 | |||
September 2015 | 97,199,000.00 | July 2020 | 94,106,440.40 | |||
October 2015 | 97,199,000.00 | August 2020 | 92,568,130.38 | |||
November 2015 | 97,199,000.00 | September 2020 | 91,024,179.20 | |||
December 2015 | 97,199,000.00 | October 2020 | 89,363,224.24 | |||
January 2016 | 97,199,000.00 | November 2020 | 87,807,518.69 | |||
February 2016 | 97,199,000.00 | December 2020 | 86,135,146.68 | |||
March 2016 | 97,199,000.00 | January 2021 | 84,567,601.50 | |||
April 2016 | 97,199,000.00 | February 2021 | 82,994,307.61 | |||
May 2016 | 97,199,000.00 | March 2021 | 81,084,068.30 | |||
June 2016 | 97,199,000.00 | April 2021 | 79,497,994.76 | |||
July 2016 | 97,199,000.00 | May 2021 | 77,796,126.24 | |||
August 2016 | 97,199,000.00 | June 2021 | 76,197,992.81 | |||
September 2016 | 97,199,000.00 | July 2021 | 74,484,410.48 | |||
October 2016 | 97,199,000.00 | August 2021 | 72,874,129.68 | |||
November 2016 | 97,199,000.00 | September 2021 | 71,257,942.91 | |||
December 2016 | 97,199,000.00 | October 2021 | 69,526,825.33 | |||
January 2017 | 97,199,000.00 | November 2021 | 67,898,360.24 | |||
February 2017 | 97,199,000.00 | December 2021 | 66,155,316.69 | |||
March 2017 | 97,199,000.00 | January 2022 | 64,514,484.22 | |||
April 2017 | 97,199,000.00 | February 2022 | 62,867,633.37 | |||
May 2017 | 97,199,000.00 | March 2022 | 60,890,711.05 | |||
June 2017 | 97,199,000.00 | April 2022 | 59,230,564.53 | |||
July 2017 | 97,199,000.00 | May 2022 | 56,477,233.25 | |||
August 2017 | 97,199,000.00 | June 2022 | 54,807,394.38 | |||
September 2017 | 97,199,000.00 | July 2022 | 53,024,370.96 | |||
October 2017 | 97,199,000.00 | August 2022 | 51,341,864.75 | |||
November 2017 | 97,199,000.00 | September 2022 | 49,653,186.51 | |||
December 2017 | 97,199,000.00 | October 2022 | 47,851,864.35 | |||
January 2018 | 97,199,000.00 | November 2022 | 46,150,382.10 | |||
February 2018 | 97,199,000.00 | December 2022 | 44,336,623.36 | |||
March 2018 | 97,199,000.00 | January 2023 | 42,622,244.21 | |||
April 2018 | 97,199,000.00 | February 2023 | 40,901,575.73 | |||
May 2018 | 97,199,000.00 | March 2023 | 38,858,354.47 | |||
June 2018 | 97,199,000.00 | April 2023 | 37,123,874.05 | |||
July 2018 | 97,199,000.00 | May 2023 | 35,278,064.06 | |||
August 2018 | 97,199,000.00 | June 2023 | 33,530,447.31 | |||
September 2018 | 97,199,000.00 | July 2023 | 31,671,877.96 | |||
October 2018 | 97,199,000.00 | August 2023 | 29,911,029.58 | |||
November 2018 | 97,199,000.00 | September 2023 | 28,143,720.83 | |||
December 2018 | 97,199,000.00 | October 2023 | 26,266,024.57 | |||
January 2019 | 97,199,000.00 | November 2023 | 24,485,341.31 | |||
February 2019 | 97,199,000.00 | December 2023 | 22,594,654.33 | |||
March 2019 | 97,199,000.00 | January 2024 | 20,800,499.52 | |||
April 2019 | 97,199,000.00 | February 2024 | 18,999,761.75 | |||
May 2019 | 97,199,000.00 | March 2024 | 16,986,774.70 | |||
June 2019 | 97,199,000.00 | April 2024 | 15,172,041.48 | |||
July 2019 | 97,199,000.00 | May 2024 | 13,248,281.63 | |||
August 2019 | 97,199,000.00 | June 2024 | 11,419,829.78 | |||
September 2019 | 97,199,000.00 | July 2024 | 9,482,744.97 | |||
October 2019 | 97,199,000.00 | August 2024 | 7,640,474.94 | |||
November 2019 | 97,199,000.00 | September 2024 | 5,791,444.84 | |||
December 2019 | 97,199,000.00 | October 2024 | 3,834,372.28 | |||
January 2020 | 97,199,000.00 | November 2024 | 1,971,374.67 | |||
February 2020 | 97,199,000.00 | December 2024 | 735.41 | |||
March 2020 | 97,199,000.00 | January 2025 | ||||
April 2020 | 97,199,000.00 | and thereafter | 0.00 |
G-1 |
[THIS PAGE INTENTIONALLY LEFT BLANK.]
(Issuable in Series)
Depositor
● | one or more multifamily and commercial mortgage loans; |
● | commercial mortgage-backed securities evidencing interests in or secured by multifamily and commercial mortgage loans, and other commercial mortgage-backed securities; |
● | direct obligations of the United States or other government agencies; or |
● | a combination of the assets described above. |
TABLE OF CONTENTS | ||
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT | v | |
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE | vi | |
WHERE YOU CAN FIND MORE INFORMATION | vi | |
SUMMARY OF PROSPECTUS | 1 | |
RISK FACTORS | 8 | |
Your Ability to Resell Certificates May Be Limited Because of Their Characteristics | 8 | |
The Assets of the Trust Fund May Not Be Sufficient to Pay Your Certificates | 8 | |
Prepayments and Repurchases of the Mortgage Assets Will Affect the Timing of Your Cash Flow and May Affect Your Yield | 8 | |
Loans Not Insured or Guaranteed | 9 | |
Optional Early Termination of the Trust Fund May Result in an Adverse Impact on Your Yield or May Result in a Loss | 10 | |
Book-Entry Registration May Hinder the Exercise of Investor Remedies | 10 | |
Unused Amounts in Pre-Funding Accounts May Be Returned to You as a Prepayment | 10 | |
Additional Compensation and Certain Reimbursements to the Servicer Will Affect Your Right to Receive Distributions | 10 | |
Additional Mortgage Assets Acquired in Connection with the Use of a Pre-Funding Account May Change the Aggregate Characteristics of a Trust Fund | 10 | |
Net Operating Income Produced by a Mortgaged Property May Be Inadequate to Repay the Mortgage Loans | 11 | |
Future Cash Flow and Property Values Are Not Predictable | 11 | |
Nonrecourse Loans Limit the Remedies Available Following a Mortgagor Default | 13 | |
Terrorist Attacks and Military Conflicts May Adversely Affect Your Investment | 13 | |
Risks Associated with Commercial Lending May Be Different Than for Residential Lending | 13 | |
Special Risks of Mortgage Loans Secured by Multifamily Properties | 14 | |
Special Risks of Mortgage Loans Secured by Retail Properties | 15 | |
Special Risks of Mortgage Loans Secured by Hospitality Properties | 16 | |
Special Risks of Mortgage Loans Secured by Office Properties | 17 | |
Special Risks Associated with Residential Healthcare Facilities | 18 | |
Special Risks of Mortgage Loans Secured by Healthcare-Related Properties | 19 | |
Special Risks of Mortgage Loans Secured by Warehouse and Self Storage Facilities | 21 | |
Special Risks of Mortgage Loans Secured by Industrial and Mixed-Use Facilities | 21 | |
Special Risks Associated with Manufactured Housing Properties | 22 | |
Poor Property Management Will Adversely Affect the Performance of the Related Mortgaged Property | 22 | |
Property Managers May Experience Conflicts of Interest in Managing Multiple Properties | 23 | |
Condemnations of Mortgaged Properties May Result in Losses | 23 | |
Balloon Payments on Mortgage Loans Result in Heightened Risk of Borrower Default | 23 | |
The Servicer Will Have Discretion to Handle or Avoid Obligor Defaults in a Manner Which May Be Adverse to Your Interests | 24 | |
Proceeds Received upon Foreclosure of Mortgage Loans Secured Primarily by Junior Mortgages May Result in Losses | 24 | |
Credit Support May Not Cover Losses or Risks Which Could Adversely Affect Payment on Your Certificates | 24 | |
Mortgagors of Commercial Mortgage Loans Are Sophisticated and May Take Actions Adverse to Your Interests | 25 | |
Assignment of Leases and Rents to Provide Further Security for Mortgage Loans Poses Special Risks | 25 | |
Inclusion in a Trust Fund of Delinquent Mortgage Loans May Adversely Affect the Rate of Defaults and Prepayments on the Mortgage Loans | 25 | |
Environmental Liability May Affect the Lien on a Mortgaged Property and Expose the Lender to Costs | 26 |
State and Federal Laws Applicable to Foreclosure Actions May Affect the Timing of Distributions on Your Certificates | 28 | |
We Have Not Re-Underwritten Any of the Mortgage Loans | 28 | |
Foreclosure on Mortgaged Properties May Result in Adverse Tax Consequences | 28 | |
State and Local Transfer Taxes May Apply to Transfers of Property in a Foreclosure or Deed in Lieu of Foreclosure and Reduce Net Proceeds | 28 | |
Insurance Coverage on Mortgaged Properties May Not Cover Special Hazard Losses | 28 | |
Rights Against Tenants May Be Limited if Leases Are Not Subordinate to the Mortgage or Do Not Contain Attornment Provisions | 30 | |
The Borrower’s Form of Entity May Cause Special Risks | 30 | |
Bankruptcy Proceedings Entail Certain Risks | 32 | |
If Mortgaged Properties Are Not in Compliance With Current Zoning Laws, You May Not Be Able to Restore Compliance Following a Casualty Loss | 32 | |
Restrictions on Certain of the Mortgaged Properties May Limit Their Use | 33 | |
Enforceability of Due-on-Sale Clauses and Assignments of Leases and Rents is Limited | 33 | |
Inspections of the Mortgaged Properties Were Limited | 33 | |
Litigation Concerns | 34 | |
DESCRIPTION OF THE TRUST FUNDS | 35 | |
General | 35 | |
Mortgage Loans—Leases | 35 | |
CMBS | 39 | |
Collection Accounts | 40 | |
Credit Support | 40 | |
Cash Flow Agreements | 40 | |
Pre-Funding | 40 | |
YIELD CONSIDERATIONS | 41 | |
General | 41 | |
Pass-Through Rate | 41 | |
Payment Delays | 41 | |
Shortfalls in Collections of Interest Resulting from Prepayments | 41 | |
Prepayment Considerations | 42 | |
Weighted Average Life and Maturity | 43 | |
Controlled Amortization Classes and Companion Classes | 44 | |
Other Factors Affecting Yield, Weighted Average Life and Maturity | 45 | |
THE SPONSOR | 46 | |
THE DEPOSITOR | 47 | |
USE OF PROCEEDS | 47 | |
DESCRIPTION OF THE CERTIFICATES | 48 | |
General | 48 | |
Distributions | 48 | |
Distributions of Interest on the Certificates | 49 | |
Distributions of Principal on the Certificates | 50 | |
Components | 50 | |
Distributions on the Certificates in Respect of Prepayment Premiums or in Respect of Equity Participations | 51 | |
Allocation of Losses and Shortfalls | 51 | |
Advances in Respect of Delinquencies | 51 | |
Exchangeable Certificates | 52 | |
Reports to Certificateholders | 54 | |
Voting Rights | 55 | |
Termination | 56 | |
Book-Entry Registration and Definitive Certificates | 56 |
DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS | 59 | |
General | 59 | |
Assignment of Mortgage Assets; Repurchases | 59 | |
Representations and Warranties; Repurchases | 60 | |
Collection Account | 61 | |
Collection and Other Servicing Procedures | 64 | |
Realization upon Defaulted Mortgage Loans | 65 | |
Hazard Insurance Policies | 66 | |
Due-on-Sale and Due-on-Encumbrance Provisions | 67 | |
Servicing Compensation and Payment of Expenses | 67 | |
Evidence as to Compliance | 68 | |
Certain Matters Regarding the Master Servicer and the Depositor | 69 | |
Servicer Termination Events | 70 | |
Rights upon a Servicer Termination Event | 70 | |
Amendment | 71 | |
List of Certificateholders | 71 | |
The Trustee and Certificate Administrator | 71 | |
Duties of the Trustee | 72 | |
Certain Matters Regarding the Trustee | 72 | |
Resignation and Removal of the Trustee | 72 | |
DESCRIPTION OF CREDIT SUPPORT | 73 | |
General | 73 | |
Subordinate Certificates | 73 | |
Cross-Support Provisions | 74 | |
Insurance or Guarantees with Respect to Mortgage Loans | 74 | |
Letter of Credit | 74 | |
Certificate Insurance and Surety Bonds | 74 | |
Reserve Funds | 74 | |
Credit Support with Respect to CMBS | 75 | |
CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS AND LEASES | 75 | |
General | 75 | |
Types of Mortgage Instruments | 76 | |
Leases and Rents | 76 | |
Personalty | 76 | |
Cooperative Loans | 77 | |
Junior Mortgages; Rights of Senior Lenders | 78 | |
Foreclosure | 79 | |
Bankruptcy Laws | 83 | |
Environmental Considerations | 85 | |
Due-on-Sale and Due-on-Encumbrance | 86 | |
Subordinate Financing | 87 | |
Default Interest and Limitations on Prepayments | 87 | |
Certain Laws and Regulations; Types of Mortgaged Properties | 87 | |
Applicability of Usury Laws | 87 | |
Servicemembers Civil Relief Act | 88 | |
Americans with Disabilities Act | 88 | |
Forfeiture in Drug, RICO and Money Laundering Proceedings | 89 | |
Federal Deposit Insurance Act; Commercial Mortgage Loan Servicing | 89 | |
MATERIAL FEDERAL INCOME TAX CONSEQUENCES | 90 | |
General | 90 | |
REMICs | 91 | |
Taxation of Owners of REMIC Regular Certificates | 93 | |
Tax Treatment of Exchangeable Certificates | 100 | |
Taxation of Owners of REMIC Residual Certificates | 102 |
Grantor Trusts | 117 | |
Characterization of Investments in Grantor Trust Certificates | 118 | |
Taxation of Owners of Grantor Trust Fractional Interest Certificates | 118 | |
STATE AND OTHER TAX CONSEQUENCES | 128 | |
ERISA CONSIDERATIONS | 128 | |
General | 128 | |
Prohibited Transaction Exemptions | 129 | |
LEGAL INVESTMENT | 132 | |
METHOD OF DISTRIBUTION | 132 | |
LEGAL MATTERS | 133 | |
FINANCIAL INFORMATION | 133 | |
RATINGS | 134 | |
GLOSSARY | 134 |
AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT
● | this prospectus, which provides general information, some of which may not apply to your series of certificates; and |
● | the accompanying prospectus supplement, which describes the specific terms of your series of certificates. |
SUMMARY OF PROSPECTUS | |||||
The following summary is a brief description of the main terms of the offered certificates. For this reason, the summary does not contain all the information that may be important to you. You will find a detailed description of the terms of the offered certificates following this summary and in the accompanying prospectus supplement. | |||||
The Trust Assets | Each series of certificates will represent the entire beneficial ownership interest in a trust fund consisting primarily of any of the following: | ||||
● | mortgage assets; | ||||
● | collection accounts; | ||||
● | forms of credit support; | ||||
● | cash flow agreements; and | ||||
● | amounts on deposit in a pre-funding account. | ||||
The Mortgage Assets | The mortgage assets with respect to each series of certificates may consist of any of the following: | ||||
● | one or more multifamily and commercial mortgage loans; | ||||
● | commercial mortgage-backed securities; | ||||
● | direct obligations of the United States or other government agencies; and | ||||
● | a combination of the assets described above. | ||||
The mortgage loans will not be guaranteed or insured by us or any of our affiliates or, unless otherwise provided in the accompanying prospectus supplement, by any governmental agency or instrumentality or other person. The mortgage loans will be primarily secured by first or junior liens on, or security interests in fee simple, leasehold or a similar interest in, any of the following types of properties: | |||||
● | residential properties consisting of five or more rental or cooperatively owned dwelling units; | ||||
● | shopping centers; | ||||
● | retail buildings or centers; | ||||
● | hotels, motels and other hospitality properties; | ||||
● | office buildings; | ||||
● | nursing homes, assisted living facilities and similar properties; | ||||
● | hospitals or other healthcare related facilities; | ||||
● | industrial properties; | ||||
● | owner-occupied commercial properties; | ||||
● | warehouse, mini-warehouse, cold storage, or self storage facilities; | ||||
● | recreational vehicle and mobile home parks; | ||||
● | manufactured housing communities; | ||||
● | parking lots; | ||||
● | commercial properties occupied by one or more tenants; | ||||
● | entertainment or sports arenas; | ||||
● | restaurants; | ||||
● | marinas; | ||||
● | mixed use properties; | ||||
● | movie theaters; | ||||
● | amusement and theme parks; | ||||
● | destination resorts, golf courses and similar properties; | ||||
● | educational centers; | ||||
● | casinos; | ||||
● | bank branches; and | ||||
● | unimproved land. | ||||
Some or all of the mortgage loans may also be secured by an assignment of one or more leases of all or a portion of the related mortgaged properties. A significant or the sole source of payments on certain mortgage loans will be the rental payments due under the related leases. | |||||
However, some of the mortgage loans may be secured by liens on real properties located outside the United States, its territories and possessions, provided that foreign mortgage loans do not represent 10% or more of the related mortgage asset pool, by balance. | |||||
A mortgage loan may have an interest rate that has any of the following features: | |||||
● | is fixed over its term; | ||||
● | adjusts from time to time; | ||||
● | is partially fixed and partially floating; | ||||
● | is floating based on one or more formulae or indices; | ||||
● | may be converted from a floating to a fixed interest rate; | ||||
● | may be converted from a fixed to a floating interest rate; or | ||||
● | interest is not paid currently but is accrued and added to the principal balance. | ||||
A mortgage loan may provide for any of the following: | |||||
● | scheduled payments to maturity; | ||||
● | payments that adjust from time to time; | ||||
● | negative amortization or accelerated amortization; | ||||
● | full amortization or require a balloon payment due on its stated maturity date; | ||||
● | prohibitions on prepayment; | ||||
● | releases or substitutions of collateral, including defeasance thereof with direct obligations of the United States; and | ||||
● | payment of a premium or a yield maintenance penalty in connection with a principal prepayment. | ||||
Unless otherwise described in the accompanying prospectus supplement for a series of certificates: | |||||
● | the mortgaged properties may be located in any one of the 50 states, the District of Columbia or the Commonwealth of Puerto Rico; | ||||
● | all mortgage loans will have original terms to maturity of not more than 40 years; | ||||
● | all mortgage loans will have individual principal balances at origination of not less than $100,000; | ||||
● | all mortgage loans will have been originated by persons other than the depositor; and | ||||
● | all mortgage assets will have been purchased, either directly or indirectly, by the depositor on or before the date of initial issuance of the related series of certificates. | ||||
Any commercial mortgage-backed securities included in a trust fund will evidence ownership interests in or be secured by mortgage loans similar to those described above and other commercial mortgage-backed securities. Some commercial mortgage-backed securities included in a trust fund may be guaranteed or insured by an affiliate of the depositor, Freddie Mac, Fannie Mae, Ginnie Mae, Farmer Mac or any other person specified in the accompanying prospectus supplement. | |||||
Collection Accounts | Each trust fund will include one or more accounts established and maintained on behalf of the certificateholders. All payments and collections received or advanced with respect to the mortgage assets and other assets in the trust fund will be deposited into those accounts. A collection account may be | ||||
maintained as an interest bearing or a non-interest bearing account, and funds may be held as cash or reinvested. | |||||
Credit Support | The following types of credit support may be used to enhance the likelihood of distributions on certain classes of certificates: | ||||
● | subordination of one or more classes of certificates; | ||||
● | over-collateralization; | ||||
● | letters of credit; | ||||
● | insurance policies; | ||||
● | bonds; | ||||
● | repurchase obligations; | ||||
● | guarantees; | ||||
● | reserve funds; and/or | ||||
● | a combination of any of the above. | ||||
Cash Flow Agreements | Cash flow agreements are used to reduce the effects of interest rate or currency exchange rate fluctuations on the underlying mortgage assets or on one or more classes of certificates and increase the likelihood of timely distributions on the certificates or such classes of certificates, as the case may be. The trust fund may include any of the following types of cash flow agreements: | ||||
● | guaranteed investment contracts; | ||||
● | interest rate swap or exchange contracts; | ||||
● | interest rate cap or floor agreements; | ||||
● | currency exchange agreements; and/or | ||||
● | yield supplement agreements. | ||||
Pre-Funding Account; | |||||
Capitalized Interest Account | A trust fund may use monies deposited into a pre-funding account to acquire additional mortgage assets following a closing date for the related series of certificates. The amount on deposit in a pre-funding account will not exceed 25% of the pool balance of the trust fund as of the cut-off date on which the ownership of the mortgage loans and rights to payment thereon are deemed transferred to the trust fund, as specified in the accompanying prospectus supplement. The depositor will select any additional mortgage assets using criteria that is substantially similar to the criteria used to select the mortgage assets included in the trust fund on the closing date. | ||||
If provided in the accompanying prospectus supplement, a trust fund also may include amounts on deposit in a separate capitalized interest account. The depositor may use amounts on deposit in a capitalized interest account to supplement investment earnings, if any, of amounts on deposit in the | |||||
pre-funding account, supplement interest collections of the trust fund, or such other purpose as specified in the accompanying prospectus supplement. | |||||
Amounts on deposit in any pre-funding account or any capitalized interest account will be held in cash or invested in short-term investment grade obligations. Amounts remaining on deposit in any pre-funding account and any capitalized interest account after the end of the related pre-funding period will be distributed to certificateholders as described in the accompanying prospectus supplement. | |||||
Description of Certificates | Each series of certificates will include one or more classes. Each series of certificates will represent in the aggregate the entire beneficial ownership interest in the related trust fund. The offered certificates are the classes of certificates being offered to you pursuant to the accompanying prospectus supplement. The non-offered certificates are the classes of certificates not being offered to you pursuant to the accompanying prospectus supplement. Information on the non-offered certificates included herein or in any accompanying prospectus supplement is being provided solely to assist you in your understanding of the offered certificates. | ||||
Distributions on Certificates | The certificates may provide for different methods of distributions to specific classes. Any class of certificates may: | ||||
● | provide for the accrual of interest thereon based on fixed, variable or floating rates; | ||||
● | be senior or subordinate to one or more other classes of certificates with respect to interest or principal distribution and the allocation of losses on the assets of the trust fund; | ||||
● | be entitled to principal distributions, with disproportionately low, nominal or no interest distributions; | ||||
● | be entitled to interest distributions, with disproportionately low, nominal or no principal distributions; | ||||
● | provide for distributions of principal or accrued interest only after the occurrence of certain events, such as the retirement of one or more other classes of certificates; | ||||
● | provide for distributions of principal to be made at a rate that is faster or slower than the rate at which payments are received on the mortgage assets in the related trust fund; | ||||
● | provide for distributions of principal sequentially, based on specified payment schedules or other methodologies; and | ||||
● | provide for distributions based on a combination of any of the above features. | ||||
Interest on each class of offered certificates of each series will accrue at the applicable pass-through rate or will be entitled to interest based on the pass-through rates of component interests of a class of offered certificates on the related |
outstanding principal balance or notional amount. Distributions of interest with respect to one or more classes of certificates may be reduced to the extent of certain delinquencies, losses and other contingencies described in this prospectus and the accompanying prospectus supplement. | |||||
The principal balance of a certificate outstanding from time to time represents the maximum amount that the holder thereof is then entitled to receive in respect of principal from future cash flow on the assets in the related trust fund. Unless otherwise specified in the accompanying prospectus supplement, distributions of principal will be made on each distribution date to the class or classes of certificates entitled thereto until the principal balance of such certificates is reduced to zero. Distributions of principal to any class of certificates will be made on a pro rata basis among all of the certificates of such class. | |||||
Advances | A servicer may be obligated as part of its servicing responsibilities to make certain advances with respect to delinquent scheduled payments and property related expenses which it deems recoverable. The trust fund may be charged interest for any advance. We will not have any responsibility to make such advances. One of our affiliates may have the responsibility to make such advances, but only if that affiliate is acting as a master servicer or trustee for the related series of certificates. | ||||
Termination | A series of certificates may be subject to optional early termination through the repurchase of the mortgage assets in the related trust fund. | ||||
Registration of Certificates | One or more classes of the offered certificates may be initially represented by one or more certificates registered in the name of Cede & Co. as the nominee of The Depository Trust Company. If your offered certificates are so registered, you will not be entitled to receive a definitive certificate representing your interest except in the event that physical certificates are issued under the limited circumstances described in this prospectus and the accompanying prospectus supplement. | ||||
Tax Status of the Certificates | The certificates of each series will constitute either: | ||||
● | “regular interests” or “residual interests” in a trust fund treated as a “real estate mortgage investment conduit” under the Internal Revenue Code of 1986, as amended; | ||||
● | interests in a trust fund treated as a grantor trust under applicable provisions of the Internal Revenue Code of 1986, as amended; or | ||||
● | any combination of any of the above features. | ||||
ERISA Considerations | If you are a fiduciary of an employee benefit plan or other retirement plan or arrangement that is subject to the Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of the Internal Revenue Code of 1986, as amended, or any materially similar federal, state or local law, or any person who proposes to use “plan assets” of |
any of these plans to acquire any offered certificates, you should carefully review with your legal counsel whether the purchase or holding of any offered certificates could give rise to transactions not permitted under these laws. The accompanying prospectus supplement will specify if investment in some certificates may require a representation that the investor is not (or is not investing on behalf of) a plan or similar arrangement or if other restrictions apply. | ||||
Legal Investment | The offered certificates will constitute “mortgage related securities” for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended, only if the accompanying prospectus supplement so provides. If your investment activities are subject to legal investment laws and regulations, regulatory capital requirements or review by regulatory authorities, then you may be subject to restrictions on investment in the offered certificates. You should consult your own legal advisors for assistance in determining the suitability of and consequences to you of the purchase, ownership and sale of the offered certificates. See “Legal Investment” herein and in the accompanying prospectus supplement. |
● | a secondary market for your certificates may not develop; |
● | interest rate fluctuations; |
● | the absence of redemption rights; and |
● | the limited sources of information about the certificates other than that provided in this prospectus, the accompanying prospectus supplement and the monthly report to certificateholders. |
● | the voluntary prepayment terms of the mortgage loan, including prepayment lock-out periods and prepayment premiums; |
● | then-current interest rates being charged on similar mortgage loans; and |
● | the availability of mortgage credit. |
● | the prepayment premium or yield maintenance required under certain prepayment scenarios may not be enforceable in some states or under federal bankruptcy laws; and |
● | some courts may consider the prepayment premium to be usurious. |
● | there is a defect or omission with respect to certain of the documents relating to such mortgage loan, and such defect or omission materially and adversely affects the value of a mortgage loan or the interests of certificateholders therein (or has such other effect specified in the related prospectus supplement); or |
● | certain of their respective representations or warranties concerning such mortgage loan are breached, and such defect or breach materially and adversely affects the value of such mortgage loan or the interests of the certificateholders therein (or has such other effect specified in the related prospectus supplement) and is not cured as required. |
● | economic conditions generally and in the area of the project; |
● | the age, quality, functionality and design of the project; |
● | the degree to which the project competes with other projects in the area; |
● | changes or continued weakness in specific industry segments; |
● | increases in operating costs; |
● | the willingness and ability of the owner to provide capable property management and maintenance; |
● | the degree to which the project’s revenue is dependent upon a single tenant or user, a small group of tenants, tenants concentrated in a particular business or industry and the competition to any such tenants; |
● | an increase in the capital expenditures needed to maintain the properties or make improvements; |
● | a decline in the financial condition of a major tenant; |
● | the location of a mortgaged property; |
● | whether a mortgaged property can be easily converted (or converted at all) to alternative uses; |
● | an increase in vacancy rates; |
● | perceptions regarding the safety, convenience and attractiveness of such properties; |
● | vulnerability to litigation by tenants and patrons; and |
● | environmental contamination. |
● | national, regional or local economic conditions (including plant and military installation closings, industry slowdowns and unemployment rates); |
● | local real estate conditions (such as an oversupply of retail space, office space or multifamily housing); |
● | demographic factors; |
● | consumer confidence; |
● | consumer tastes and preferences; and |
● | changes in building codes and other applicable laws. |
● | the length of tenant leases; |
● | the creditworthiness of tenants; |
● | in the case of rental properties, the rate at which new rentals occur; |
● | the property’s “operating leverage” (i.e., the percentage of total property expenses in relation to revenue, the ratio of fixed operating expenses to those that vary with revenues and the level of capital expenditures required to maintain the mortgaged property and to retain or replace tenants); and |
● | a decline in the real estate market or in the financial condition of a major tenant will tend to have a more immediate effect on the net operating income of mortgaged properties with |
● | to generate income sufficient to pay debt service, operating expenses and leasing commissions and to make necessary repairs, tenant improvements and capital improvements; and |
● | in the case of mortgage loans that do not fully amortize over their terms, to retain sufficient value to permit the borrower to pay off the mortgage loan at maturity through a sale or refinancing of the mortgaged property. |
● | the construction of additional housing units; |
● | the physical attributes of the apartment building (for example, its age, appearance and construction quality); |
● | the location of the mortgaged property (for example, a change in the neighborhood over time); |
● | the ability of management to provide adequate maintenance and insurance; |
● | the types of services and amenities that the mortgaged property provides; |
● | the mortgaged property’s reputation; |
● | the tenant mix, such as the tenant population being predominantly students or being heavily dependent on workers from a particular business or personnel from a local military base; |
● | dependence upon governmental programs that provide rent subsidies to tenants pursuant to tenant voucher programs or tax credits to developers to provide certain types of development; |
● | the presence of competing properties; |
● | state or local regulations; |
● | adverse local or national economic conditions; |
● | local military base closings; |
● | developments at local colleges and universities; |
● | national, regional and local politics, including, in the case of multifamily rental properties, current or future rent stabilization and rent control laws and agreements; |
● | the level of mortgage interest rates, which may encourage tenants in multifamily rental properties to purchase housing; and |
● | the possibility that some eligible tenants may not find any differences in rents between subsidized or supported properties and other multifamily rental properties in the same area to be a sufficient economic incentive to reside at a subsidized or supported property, which may have fewer amenities or otherwise be less attractive as a residence. |
● | rent limitations that could adversely affect the ability of borrowers to increase rents to maintain the condition of their mortgaged properties and satisfy operating expenses; and |
● | tenant income restrictions that may reduce the number of eligible tenants in those mortgaged properties and result in a reduction in occupancy rates. |
● | the quality of the tenants; and |
● | the fundamental aspects of real estate such as location and market demographics. |
● | catalogue retailers; |
● | home shopping networks; |
● | the internet; |
● | telemarketing; and |
● | outlet centers. |
● | location; |
● | quality; |
● | management ability; |
● | amenities; |
● | franchise affiliation (or lack thereof); |
● | continuing expenditures for modernizing, refurbishing and maintaining existing facilities prior to the expiration of their anticipated useful lives; |
● | a deterioration in the financial strength or managerial capabilities of the owner and operator of a hotel; |
● | changes in travel patterns caused by changes in access, energy prices, strikes, relocation of highways, the construction of additional highways or other factors; |
● | adverse economic conditions, either local, regional or national, which may limit the amount that may be charged for a room and may result in a reduction in occupancy levels; and |
● | construction of competing hotels or motels, which may also limit the amount that may be charged for a room and may result in a reduction in occupancy levels. |
● | the continued existence and financial strength of the franchisor or hotel management company; |
● | the public perception of the franchise or hotel chain service mark; and |
● | the duration of the franchise licensing or management agreements. |
● | the quality of an office building’s tenants; |
● | the physical attributes of the building in relation to competing buildings; |
● | the desirability of the area as a business location; and |
● | the strength, stability and nature of the local economy (including labor costs and quality, tax environment and quality of life for employees). |
● | age; |
● | condition; |
● | design (e.g., floor sizes and layout); |
● | access to transportation; and |
● | ability or inability to offer certain amenities to its tenants, including sophisticated building systems (such as fiber optic cables, satellite communications or other base building technological features). |
● | increasing governmental regulation and supervision; |
● | a decline in the financial health, skill or reputation of the operator; |
● | increased operating expenses; and |
● | competing facilities owned by non-profit organizations or government agencies supported by endowments, charitable contributions, tax revenues, or other sources. |
● | Senior housing generally consists of facilities with respect to which the residents are ambulatory, handle their own affairs and typically are couples whose children have left the home and at which the accommodations are usually apartment style; |
● | Assisted living facilities are typically single or double room occupancy, dormitory-style housing facilities which provide food service, cleaning and some personal care and with respect to which the tenants are able to medicate themselves but may require assistance with certain daily routines; |
● | Skilled nursing facilities provide services to post trauma and frail residents with limited mobility who require extensive medical treatment; and |
● | Acute care facilities generally consist of hospital and other facilities providing short-term, acute medical care services. |
● | the number of competing facilities in the local market; |
● | the facility’s age and appearance; |
● | the reputation and management of the facility; |
● | the types of services the facility provides; and |
● | where applicable, the quality of care and the cost of that care. |
● | the quality of tenants; |
● | building design and adaptability; and |
● | the location of the property. |
● | other manufactured housing properties; |
● | apartment buildings; and |
● | site-built single family homes. |
● | the physical attributes of the community, including its age and appearance; |
● | the location of the manufactured housing property; |
● | the ability of management to provide adequate maintenance and insurance; |
● | the types of services or amenities it provides; |
● | the property’s reputation; and |
● | state and local regulations, including rent control and rent stabilization. |
● | operating the property; |
● | providing building services; |
● | responding to changes in the local market; and |
● | planning and implementing the rental structure, including establishing levels of rent payments and advising the borrowers so that maintenance and capital improvements can be carried out in a timely fashion. |
● | a substantial number of the mortgaged properties are managed by property managers affiliated with the respective borrowers; |
● | these property managers also may manage and/or franchise additional properties, including properties that may compete with the mortgaged properties securing the mortgage loans included in the trust fund; and |
● | affiliates of the managers and/or the borrowers, or the managers and/or the borrowers themselves, also may own other properties, including competing properties. |
● | its ability to fully refinance the mortgage loan; or |
● | its ability to sell the related mortgaged property at a price sufficient to permit the borrower to make the balloon payment. |
● | the value of the related mortgaged property; |
● | the level of available mortgage interest rates at the time of sale or refinancing; |
● | the borrower’s equity in the related mortgaged property; |
● | the financial condition and operating history of the borrower and the related mortgaged property; |
● | tax laws; |
● | rent control laws (with respect to certain residential properties); |
● | Medicaid and Medicare reimbursement rates (with respect to hospitals and nursing homes) (see “—Special risks Associated with Residential Healthcare Facilities” and “—Special Risks of Mortgage Loans Secured by Healthcare-Related Properties” above.); |
● | prevailing general economic conditions; and |
● | the availability of credit for loans secured by commercial or multifamily, as the case may be, real properties generally. |
● | a reduction in the value of such mortgaged property which may make it impractical or imprudent to foreclose against such mortgaged property; |
● | the potential that the related borrower may default on the related mortgage loan due to such borrower’s inability to pay high remediation costs or costs of defending lawsuits due to an environmental impairment or difficulty in bringing its operations into compliance with environmental laws; |
● | liability for clean-up costs or other remedial actions, which could exceed the value of such mortgaged property or the unpaid balance of the related mortgage loan; and |
● | the inability to sell the related mortgage loan in the secondary market or to lease such mortgaged property to potential tenants. |
● | an environmental consultant investigated those conditions and recommended no further investigations or remediation; |
● | an environmental insurance policy, having the characteristics described below, was obtained from a third-party insurer; |
● | either (i) an operations and maintenance program, including, in several cases, with respect to asbestos-containing materials, lead-based paint, microbial matter and/or radon, or periodic monitoring of nearby properties, has been or is expected to be implemented in the manner and within the time frames specified in the related loan documents, or (ii) remediation in accordance with applicable law or regulations has been performed, is currently being performed or is expected to be performed either by the borrower or by the party responsible for the contamination; |
● | an escrow or reserve was established to cover the estimated cost of remediation, with each remediation required to be completed within a reasonable time frame in accordance with the related loan documents; |
● | the related borrower or other responsible party having financial resources reasonably estimated to be adequate to address the related condition or circumstance is required to take (or is liable for the failure to take) actions, required by the applicable governmental regulatory authority or any environmental law or regulation; or |
● | any other actions described in the related prospectus supplement. |
● | war; |
● | terrorism; |
● | revolution; |
● | governmental actions; |
● | floods, and other water-related causes; |
● | earth movement (including earthquakes, landslides and mud flows); |
● | wet or dry rot; |
● | vermin; |
● | domestic animals; |
● | sink holes or similarly occurring soil conditions; and |
● | other kinds of risks not specified in the preceding paragraph. |
● | such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the mortgaged property and located in or around the region in which such mortgaged property is located; or |
● | such insurance is not available at any rate. |
● | operating entities with businesses distinct from the operation of the mortgaged property with the associated liabilities and risks of operating an ongoing business; or |
● | individuals that have personal liabilities unrelated to the mortgaged property. |
● | the aggregate principal balance of the related Exchangeable Certificates received in the exchange, immediately after the exchange, will equal the aggregate principal balance, immediately prior to the exchange, of the Exchangeable Certificates so exchanged (for purposes of an exchange, interest-only classes of Exchangeable Certificates will have a principal balance of zero); |
● | the aggregate amount of interest distributable on each distribution date with respect to the related Exchangeable Certificates received in the exchange will equal the aggregate amount of interest distributable on each distribution date with respect to the Exchangeable Certificates so exchanged; and |
● | the class or classes of Exchangeable Certificates will be exchanged in the applicable proportions, if any, described in the related prospectus supplement. |
● | A class of Exchangeable Certificates with an interest rate that varies directly with changes in an index and a class of Exchangeable Certificates with an interest rate that varies indirectly with changes in the index may be exchangeable, together, for a related class of Exchangeable Certificates with a fixed interest rate. In such a combination, the classes of Exchangeable Certificates with interest rates that vary with an index would produce, in the aggregate, an annual interest amount equal to that generated by the related class of Exchangeable Certificates with a fixed interest rate. In addition, the aggregate principal balance of the two classes of Exchangeable Certificates with interest rates that vary with an index would equal the aggregate principal balance of the related class of Exchangeable Certificates with the fixed interest rate. |
● | An interest-only class and a principal-only class of Exchangeable Certificates may be exchangeable, together, for a related class of Exchangeable Certificates that is entitled to both principal and interest distributions. In such a combination, the aggregate principal balance of the related class would be equal to the aggregate principal balance of the principal-only class of Exchangeable Certificates, and the interest rate on the related class, when applied to the aggregate principal balance of this related class, would generate interest equal to the annual interest amount of the interest-only class of Exchangeable Certificates. |
● | Two classes of principal and interest classes of Exchangeable Certificates with different fixed interest rates may be exchangeable, together, for a single class of related Exchangeable Certificates that is entitled to both principal and interest distributions. In such a combination, the aggregate principal balance of the single class of related Exchangeable Certificates would be equal to the aggregate principal balance of the two classes of Exchangeable Certificates, and the single class of related Exchangeable Certificates would have a fixed interest rate that, when applied to the principal balance of the single class of Exchangeable Certificates, would generate interest equal to the aggregate annual interest amount of the two classes of Exchangeable Certificates. |
● | A class of Exchangeable Certificates that accretes all of its interest for a specified period, with the accreted amount added to the aggregate principal balance of the class of Exchangeable Certificates, and a second class of Exchangeable Certificates that receives principal distributions from these accretions, may be exchangeable, together, for a single class of related Exchangeable Certificates that receives distributions of interest continuously from the first distribution date on which it receives interest until it is retired. |
● | A class of Exchangeable Certificates that is a planned amortization class, and a class of Exchangeable Certificates that only receives principal distributions on a distribution date if scheduled payments have been made on the planned amortization class, may be exchangeable, together, for a class of related Exchangeable Certificates that receives principal distributions without regard to the planned amortization schedule for the planned amortization class from the first distribution date on which it receives principal until it is retired. |
Federal Deposit Insurance Act; Commercial Mortgage Loan Servicing |
● | banks, |
● | insurance companies, |
● | foreign investors. |
● | tax exempt investors, |
● | holders whose “functional currency” is not the United States dollar, |
● | United States expatriates, and |
● | holders holding the offered certificates as part of a hedge, straddle, or conversion transaction. |
● | given with respect to events that have occurred at the time the advice is rendered, and |
● | is directly relevant to the determination of an entry on a tax return. |
● | REMIC certificates, representing interests in a trust, or a portion of the assets of that trust, as to which a specified person or entity will make a real estate mortgage investment conduit, or REMIC, election under sections 860A through 860G of the Code; and |
● | grantor trust certificates, representing interests in a trust, or a portion of the assets of that trust, as to which no REMIC election will be made. |
REMICs |
● | the related trust, or the relevant designated portion of the trust, will qualify as a REMIC, and |
● | any and all offered certificates representing interests in a REMIC will be either— |
1. | regular interests in the REMIC, or |
2. | residual interests in the REMIC. |
● | “real estate assets” within the meaning of section 856(c)(5)(B) of the Code in the hands of a real estate investment trust, and |
● | “loans secured by an interest in real property” or other assets described in section 7701(a)(19)(C) of the Code in the hands of a thrift institution, |
● | collections on mortgage loans held pending payment on the related offered certificates, and |
● | any property acquired by foreclosure held pending sale, and may include amounts in reserve accounts. |
● | a portion of that certificate may not represent ownership of “loans secured by an interest in real property” or other assets described in section 7701(a)(19)(C) of the Code; |
● | a portion of that certificate may not represent ownership of “real estate assets” under section 856(c)(5)(B) of the Code; and |
● | the interest on that certificate may not constitute “interest on obligations secured by mortgages on real property” within the meaning of section 856(c)(3)(B) of the Code. |
● | whether the related REMIC certificates will be “real estate assets” within the meaning of section 856(c)(5)(B) of the Code, |
● | whether the related REMIC certificates will be “loans secured by an interest in real property” under section 7701(a)(19)(C) of the Code, and |
● | whether the interest/income on the related REMIC certificates is interest described in section 856(c)(3)(B) of the Code. |
● | a single fixed rate, |
● | a “qualified floating rate,” |
● | an “objective rate,” |
● | a combination of a single fixed rate and one or more “qualified floating rates,” |
● | a combination of a single fixed rate and one “qualified inverse floating rate,” or |
● | a combination of “qualified floating rates” that does not operate in a manner that accelerates or defers interest payments on the REMIC regular certificate. |
● | the number of complete years, rounding down for partial years, from the date of initial issuance, until that payment is expected to be made, presumably taking into account the prepayment assumption, by |
● | a fraction— |
1. | the numerator of which is the amount of the payment, and |
2. | the denominator of which is the stated redemption price at maturity of the certificate. |
● | the total amount of thede minimis original issue discount, and |
● | a fraction— |
1. | the numerator of which is the amount of the principal payment, and |
2. | the denominator of which is the outstanding stated principal amount of the subject REMIC regular certificate. |
● | the sum of: |
1. | the present value, as of the end of the accrual period, of all of the payments remaining to be made on the subject REMIC regular certificate, if any, in future periods, taking into account the prepayment assumption, and |
2. | the payments made on that certificate during the accrual period of amounts included in the stated redemption price, over |
● | the adjusted issue price of the subject REMIC regular certificate at the beginning of the accrual period. |
● | the issue price of the certificate, increased by |
● | the total amount of original issue discount previously accrued on the certificate, reduced by |
● | the amount of all prior payments of amounts included in its stated redemption price. |
● | assuming that payments on the REMIC regular certificate will be received in future periods based on the related mortgage loans being prepaid at a rate equal to the prepayment assumption; |
● | using a discount rate equal to the original yield to maturity of the certificate, based on its issue price and the assumption that the related mortgage loans will be prepaid at a rate equal to the prepayment assumption; and |
● | taking into account events, including actual prepayments, that have occurred before the close of the accrual period. |
● | the adjusted issue price or, in the case of the first accrual period, the issue price, of the certificate at the beginning of the accrual period which includes that date of determination, and |
● | the daily portions of original issue discount for all days during that accrual period prior to that date of determination |
● | less any amounts included in its stated redemption price paid during the accrual period prior to the date of determination. |
● | in the case of a certificate issued without original issue discount, you purchased the certificate at a price less than its remaining stated principal amount, or |
● | in the case of a certificate issued with original issue discount, you purchased the certificate at a price less than its adjusted issue price. |
● | on the basis of a constant yield method, |
● | in the case of a certificate issued without original issue discount, in an amount that bears the same ratio to the total remaining market discount as the stated interest paid in the accrual period bears to the total amount of stated interest remaining to be paid on the certificate as of the beginning of the accrual period, or |
● | in the case of a certificate issued with original issue discount, in an amount that bears the same ratio to the total remaining market discount as the original issue discount accrued in the accrual period bears to the total amount of original issue discount remaining on the certificate at the beginning of the accrual period. |
● | the purchase price paid for your offered certificate, and |
● | the payments remaining to be made on your offered certificate at the time of its acquisition by you. |
● | you will not be entitled to deduct a loss under section 166 of the Code until your offered certificate becomes wholly worthless, which is when its principal balance has been reduced to zero, and |
● | the loss will be characterized as a short-term capital loss. |
● | other sources of funds sufficient to pay any federal income taxes due as a result of your ownership of REMIC residual certificates, or |
● | unrelated deductions against which income may be offset. |
● | excess inclusions, |
● | residual interests without significant value, and |
● | noneconomic residual interests. |
● | the income from the mortgage loans and other assets of the REMIC; plus |
● | any cancellation of indebtedness income due to the allocation of realized losses to those REMIC certificates constituting regular interests in the REMIC; less the following items— |
1. | the deductions allowed to the REMIC for interest, including original issue discount but reduced by any premium on issuance, on any class of REMIC certificates constituting regular interests in the REMIC, whether offered or not, |
2. | amortization of any premium on the mortgage loans held by the REMIC, |
3. | bad debt losses with respect to the mortgage loans held by the REMIC, and |
4. | except as described below in this “—Taxable Income of the REMIC” subsection, servicing, administrative and other expenses. |
● | the amount paid for that REMIC residual certificate, |
● | increased by amounts included in the income of the holder of that REMIC residual certificate, and |
● | decreased, but not below zero, by payments made, and by net losses allocated, to the holder of the REMIC residual certificate. |
● | through distributions, |
● | through the deduction of any net losses of the REMIC, or |
● | upon the sale of its REMIC residual certificate. |
● | the daily portions of REMIC taxable income allocable to that certificate, over |
● | the sum of the daily accruals for each day during the quarter that the certificate was held by that holder. |
● | the issue price of the certificate, increased by |
● | the sum of the daily accruals for all prior quarters, and decreased, but not below zero, by |
● | any payments made with respect to the certificate before the beginning of that quarter. |
● | will not be permitted to be offset by deductions, losses or loss carryovers from other activities, |
● | will be treated as unrelated business taxable income to an otherwise tax-exempt organization, and |
● | will not be eligible for any rate reduction or exemption under any applicable tax treaty with respect to the 30% United States withholding tax imposed on payments to holders of REMIC residual certificates that are foreign investors. |
● | excess inclusions will not be permitted to be offset by the alternative tax net operating loss deduction, and |
● | alternative minimum taxable income may not be less than the taxpayer’s excess inclusions. |
● | regulated investment companies, |
● | common trusts, and |
● | some cooperatives. |
● | the present value of the expected future payments on the REMIC residual certificate equals at least the present value of the expected tax on the anticipated excess inclusions, and |
● | the transferor reasonably expects that the transferee will receive payments with respect to the REMIC residual certificate at or after the time the taxes accrue on the anticipated excess inclusions in an amount sufficient to satisfy the accrued taxes. |
● | from each party to the transfer, stating that no purpose of the transfer is to impede the assessment or collection of tax, |
● | from the prospective transferee, providing representations as to its financial condition and that it understands that, as the holder of a non-economic REMIC residual certificate, it may incur tax liabilities in excess of any cash flows generated by the REMIC residual certificate and that such transferee intends to pay its taxes associated with holding such REMIC residual certificate as they become due, and |
● | from the prospective transferor, stating that it has made a reasonable investigation to determine the transferee’s historic payment of its debts and ability to continue to pay its debts as they come due in the future. |
● | the present value of any consideration given to the transferee to acquire the interest, |
● | the present value of the expected future distributions on the interest, and |
● | the present value of the anticipated tax savings associated with the holding of the interest as the REMIC generates losses. |
● | an individual, |
● | an estate or trust, or |
● | a Pass-Through Entity beneficially owned by one or more individuals, estates or trusts, then— |
● | an individual, |
● | an estate or trust, or |
● | a Pass-Through Entity beneficially owned by one or more individuals, estates or trusts, |
● | an individual, |
● | an estate or trust, or |
● | a Pass-Through Entity beneficially owned by one or more individuals, estates or trusts. |
● | the cost of the certificate to that certificateholder, increased by |
● | income reported by that certificateholder with respect to the certificate, including original issue discount and market discount income, and reduced, but not below zero, by |
● | payments of amounts included in the stated redemption price of the certificate received by that certificateholder, amortized premium and realized losses allocated to the certificate and previously deducted by the certificateholder. |
● | entitle the holder to a specified principal amount, |
● | pay interest at a fixed or variable rate, and |
● | are not convertible into the stock of the issuer or a related party, |
● | the amount that would have been includible in the seller’s income with respect to that REMIC regular certificate assuming that income had accrued on the certificate at a rate equal to 110% of the applicable Federal rate determined as of the date of purchase of the certificate, which is a rate based on an average of current yields on Treasury securities having a maturity comparable to that of the certificate based on the application of the prepayment assumption to the certificate, over |
● | the amount of ordinary income actually includible in the seller’s income prior to that sale. |
● | reacquires that same REMIC residual certificate, |
● | acquires any other residual interest in a REMIC, or |
● | acquires any similar interest in a taxable mortgage pool, as defined in section 7701(i) of the Code. |
● | the disposition of a non-defaulted mortgage loan, |
● | the receipt of income from a source other than a mortgage loan or other permitted investments, |
● | the receipt of compensation for services, or |
● | the gain from the disposition of an asset purchased with collections on the mortgage loans for temporary investment pending payment on the REMIC certificates. |
● | the person has sufficient assets to do so, and |
● | the tax arises out of a breach of that person’s obligations under select provisions of the related pooling and servicing agreement. |
● | the present value of the total anticipated excess inclusions with respect to the REMIC residual certificate for periods after the transfer, and |
● | the highest marginal federal income tax rate applicable to corporations. |
● | events that have occurred up to the time of the transfer, |
● | the prepayment assumption, and |
● | any required or permitted clean up calls or required liquidation provided for in the related pooling and servicing agreement. |
● | the transferee furnishes to the transferor an affidavit that the transferee is not a Disqualified Organization, and |
● | as of the time of the transfer, the transferor does not have actual knowledge that the affidavit is false. |
● | the amount of excess inclusions on the certificate that are allocable to the interest in the Pass-Through Entity held by the Disqualified Organization, and |
● | the highest marginal federal income tax rate imposed on corporations. |
● | the holder’s social security number and a statement under penalties of perjury that the social security number is that of the record holder, or |
● | a statement under penalties of perjury that the record holder is not a Disqualified Organization. |
● | the residual interests in the entity are not held by Disqualified Organizations, and |
● | the information necessary for the application of the tax described in this prospectus will be made available. |
● | income, |
● | deductions, |
● | gains, |
● | losses, and |
● | classification as a REMIC. |
● | corporations, |
● | trusts, |
● | securities dealers, and |
● | various other non-individuals, |
● | 30 days after the end of the quarter for which the information was requested, or |
● | two weeks after the receipt of the request. |
● | income, |
● | excess inclusions, |
● | investment expenses, and |
● | relevant information regarding qualification of the REMIC’s assets, |
● | fail to furnish to the payor information regarding, among other things, their taxpayer identification numbers, or |
● | otherwise fail to establish an exemption from this tax. |
● | a foreign person, and |
● | not subject to federal income tax as a result of any direct or indirect connection to the United States in addition to its ownership of that certificate, |
● | owns 10% or more of one or more underlying mortgagors, or |
● | if the holder is a controlled foreign corporation, is related to one or more mortgagors in the applicable trust. |
● | foreign persons, or |
● | U.S. Persons, if classified as a partnership under the Code, unless all of their beneficial owners are (and are required to be) U.S. Persons. |
● | a grantor trust fractional interest certificate representing an undivided equitable ownership interest in the principal of the mortgage loans constituting the related grantor trust, together with interest, if any, on those loans at a pass-through rate; or |
● | a grantor trust strip certificate representing ownership of all or a portion of the difference between— |
1. | interest paid on the mortgage loans constituting the related grantor trust, minus |
2. | the sum of: |
● | normal administration fees, and |
● | interest paid to the holders of grantor trust fractional interest certificates issued with respect to that grantor trust |
● | “loans. . . secured by an interest in real property” within the meaning of section 7701(a)(19)(C)(v) of the Code, but only to the extent that the underlying mortgage loans have been made with respect to property that is used for residential or other prescribed purposes; |
● | “obligation[s] (including any participation or certificate of beneficial ownership therein) which. . . [are] principally secured by an interest in real property” within the meaning of section 860G(a)(3) of the Code; and |
● | “real estate assets” within the meaning of section 856(c)(5)(B) of the Code. |
● | consisting of mortgage loans that are “loans. . . secured by an interest in real property” within the meaning of section 7701(a)(19)(C)(v) of the Code, |
● | consisting of mortgage loans that are “real estate assets” within the meaning of section 856(c)(5)(B) of the Code, and |
● | the interest on which is “interest on obligations secured by mortgages on real property” within the meaning of section 856(c)(3)(B) of the Code, |
● | will be required to report on their federal income tax returns their shares of the entire income from the underlying mortgage loans, including amounts used to pay reasonable servicing fees and other expenses, and |
● | will be entitled to deduct their shares of any reasonable servicing fees and other expenses subject to any limitations imposed under sections 67 and 68 of the Code. |
● | a class of grantor trust strip certificates is issued as part of the same series, or |
● | we or any of our affiliates retain, for our or its own account or for purposes of resale, a right to receive a specified portion of the interest payable on an underlying mortgage loan. |
● | a master servicer, |
● | a special servicer, |
● | any sub-servicer, or |
● | their respective affiliates. |
● | the treatment of some stripped bonds as market discount bonds, and |
● | de minimis market discount. |
● | the holder’s adjusted basis in the grantor trust fractional interest certificate at the beginning of the related month, as defined in “—Grantor Trusts—Sales of Grantor Trust Certificates,” and |
● | the yield of that grantor trust fractional interest certificate to the holder. |
● | a prepayment assumption determined when certificates are offered and sold hereunder, which we will disclose in the related prospectus supplement, and |
● | a constant yield computed using a representative initial offering price for each class of certificates. |
● | the mortgage loans in any of our trusts will in fact prepay at a rate conforming to the prepayment assumption used or any other rate, or |
● | the prepayment assumption will not be challenged by the IRS on audit. |
● | there is no original issue discount or only a less thande minimis amount of original issue discount, or |
● | the annual stated rate of interest payable on the original bond is no more than one percentage point lower than the gross interest rate payable on the related mortgage loans, before subtracting any servicing fee or any stripped coupon. |
● | 0.25% of the stated redemption price, and |
● | the weighted average maturity of the related mortgage loans, |
● | the stated redemption price of the mortgage loans, and |
● | their issue price. |
● | the adjusted issue price or the issue price, in the case of the first accrual period, of the mortgage loan at the beginning of the accrual period that includes that day, and |
● | the daily portions of original issue discount for all days during the accrual period prior to that day. |
● | the amount of any payments made on the mortgage loan during the accrual period prior to that date of amounts included in its stated redemption price. |
● | the issue price of the mortgage loan, increased by |
● | the total amount of original issue discount with respect to the mortgage loan that accrued in prior accrual periods, and reduced by |
● | the amount of any payments made on the mortgage loan in prior accrual periods of amounts included in its stated redemption price. |
● | a prepayment assumption determined when the certificates are offered and sold hereunder and disclosed in the related prospectus supplement, and |
● | a constant yield computed using a representative initial offering price for each class of certificates. |
● | the mortgage loans will in fact prepay at a rate conforming to the prepayment assumption or any other rate, or |
● | the prepayment assumption will not be challenged by the IRS on audit. |
● | in the case of a mortgage loan issued without original issue discount, it is purchased at a price less than its remaining stated redemption price, or |
● | in the case of a mortgage loan issued with original issue discount, it is purchased at a price less than its adjusted issue price. |
● | be allocated among the payments of stated redemption price on the mortgage loan, and |
● | be allowed as a deduction as those payments are made or, for an accrual method certificateholder, due. |
● | the price paid for that grantor trust strip certificate by you, and |
● | the projected payments remaining to be made on that grantor trust strip certificate at the time of the purchase, plus |
● | an allocable portion of the projected servicing fees and expenses to be paid with respect to the underlying mortgage loans. |
● | the prepayment assumption we will disclose in the related prospectus supplement, and |
● | a constant yield computed using a representative initial offering price for each class of certificates. |
● | the mortgage loans in any of our trusts will in fact prepay at a rate conforming to the prepayment assumption or at any other rate or |
● | the prepayment assumption will not be challenged by the IRS on audit. |
● | the amount realized on the sale or exchange of a grantor trust certificate, and |
● | its adjusted basis. |
● | its cost, increased by |
● | any income reported by the seller, including original issue discount and market discount income, and reduced, but not below zero, by |
● | any and all previously reported losses, amortized premium, and payments (other than payments of ordinary interest) with respect to that grantor trust certificate. |
● | entitle the holder to a specified principal amount, |
● | pay interest at a fixed or variable rate, and |
● | are not convertible into the stock of the issuer or a related party, |
● | the amount of servicing compensation received by a master servicer or special servicer, and |
● | all other customary factual information the reporting party deems necessary or desirable to enable holders of the related grantor trust certificates to prepare their tax returns. |
● | a custodian of a person’s account, |
● | a nominee, and |
● | a broker holding an interest for a customer in street name. |
No dealer, salesman or other person is authorized to give any information or to represent anything contained in this free writing prospectus. You must not rely on any unauthorized information or representations. This free writing prospectus is an offer to sell only the securities offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this free writing prospectus is current only as of its date. | $1,091,690,000 WELLS FARGO COMMERCIAL MORTGAGE TRUST 2015-C29 as Issuing Entity COMMERCIAL MORTGAGE PASS- THROUGH CERTIFICATES, SERIES 2015-C29 Wells Fargo Commercial Mortgage Securities, Inc. as Depositor Wells Fargo Bank, National Association Rialto Mortgage Finance, LLC Silverpeak Real Estate Finance LLC Walker & Dunlop Commercial Property Funding I WF, LLC National Cooperative Bank, N.A. as Sponsors and Mortgage Loan Sellers | |||||||
TABLE OF CONTENTS | ||||||||
Free Writing Prospectus | ||||||||
IMPORTANT NOTICE ABOUT INFORMATION | ||||||||
PRESENTED IN THIS FREE WRITING | ||||||||
PROSPECTUS AND THE ACCOMPANYING | ||||||||
PROSPECTUS | ix | |||||||
IMPORTANT NOTICE REGARDING THE | ||||||||
OFFERED CERTIFICATES | xi | |||||||
FORWARD-LOOKING STATEMENTS | xiii | |||||||
SUMMARY | 1 | |||||||
RISK FACTORS | 70 | |||||||
CAPITALIZED TERMS USED IN THIS FREE | ||||||||
WRITING PROSPECTUS | 171 | |||||||
DESCRIPTION OF THE MORTGAGE POOL | 171 | |||||||
TRANSACTION PARTIES | 240 | |||||||
DESCRIPTION OF THE OFFERED CERTIFICATES | 309 | |||||||
YIELD AND MATURITY CONSIDERATIONS | 368 | |||||||
SERVICING OF THE MORTGAGE LOANS AND | ||||||||
ADMINISTRATION OF THE TRUST FUND | 385 | |||||||
CERTAIN LEGAL ASPECTS OF THE MORTGAGE | ||||||||
LOANS | 464 | |||||||
MATERIAL FEDERAL INCOME TAX | ||||||||
CONSEQUENCES | 466 | |||||||
STATE AND OTHER TAX CONSEQUENCES | 471 | |||||||
ERISA CONSIDERATIONS | 471 | |||||||
LEGAL INVESTMENT | 476 | |||||||
LEGAL MATTERS | 477 | |||||||
RATINGS | 477 | |||||||
INDEX OF DEFINED TERMS | 480 | |||||||
Prospectus | ||||||||
Summary of Prospectus | 1 | |||||||
Risk Factors | 8 | |||||||
Description of the Trust Funds | 35 | |||||||
Yield Considerations | 41 | |||||||
The Sponsor | 46 | |||||||
The Depositor | 47 | |||||||
Use of Proceeds | 47 | |||||||
Description of the Certificates | 48 |
FREE WRITING PROSPECTUS | ||||||
Description of the Pooling and Servicing | ||||||||
Agreements | 59 | |||||||
Description of Credit Support | 73 | |||||||
Certain Legal Aspects of Mortgage Loans and | ||||||||
Leases | 75 |
Wells Fargo Securities Citigroup Deutsche Bank Securities | ||||||
Material Federal Income Tax Consequences | 90 | |||||||
State and Other Tax Consequences | 128 | |||||||
ERISA Considerations | 128 | |||||||
Legal Investment | 132 | |||||||
Method of Distribution | 132 | |||||||
Legal Matters | 133 | |||||||
Financial Information | 134 | |||||||
Ratings | 134 | |||||||
Glossary | 134 |