KBRA has assigned preliminary ratings to four classes of BX 2024-BIO2, a single-borrower CMBS securitization.
The transaction is backed by a $560.0 million portion of a $760.0 million non-recourse, first lien mortgage loan. This fixed-rate loan has a five-year term with monthly interest-only payments based on a 6.25% coupon. The loan is secured by the borrower’s fee simple interests in seven life science lab/office buildings (97.2% of the total loan amount) and one parking garage (2.8%). The portfolio comprises 995,458 square feet of lab/office space and is situated in three major U.S. life science markets across two states: Massachusetts (four properties, 56.8% of the total loan amount) and California (four properties, 43.2%). As of April 2024, the portfolio was 93.8% leased to 13 tenants.
KBRA’s assessment of the transaction included a thorough analysis of the properties’ cash flows using our North American CMBS Property Evaluation Methodology and our North American CMBS Single Borrower & Large Loan Rating Methodology. Additionally, we applied our Global Structured Finance Counterparty Methodology to evaluate counterparty risk and our ESG Global Rating Methodology as applicable.
Our analysis resulted in a KBRA net cash flow (KNCF) estimate of approximately $61.0 million, which is 14.8% below the issuer’s NCF, and a KBRA value of about $794.6 million, 27.6% below the appraiser’s aggregate as-is value. The resulting in-trust KBRA Loan to Value (KLTV) is 95.6%. We also reviewed third-party engineering, environmental, and appraisal reports, conducted property site inspections, and examined legal documentation.
To access the rating and relevant documents, click here.
Click here to view the report.
Methodologies
- CMBS: North American CMBS Property Evaluation Methodology
- CMBS: North American CMBS Single Borrower & Large Loan Rating Methodology
- Structured Finance: Global Structured Finance Counterparty Methodology
- ESG Global Rating Methodology
Disclosures
For detailed information on key credit considerations, sensitivity analyses, and how factors might influence credit ratings, please refer to the full rating report. A description of the sources and methodologies used in the credit rating process is available in the Information Disclosure Form(s).
Information on rating categories can be found here.
Further disclosures related to this rating action are available in the Information Disclosure Form(s). Additional information on KBRA’s policies, methodologies, rating scales, and disclosures is available at www.kbra.com.
