KBRA has announced the assignment of preliminary ratings to four classes of mortgage pass-through certificates from FREMF Series 2024-K757 and three classes from Freddie Mac’s structured pass-through certificates (SPCs), Series K-757. The FREMF 2024-K757 transaction amounts to $843.2 million and involves multiple borrowers. Freddie Mac will guarantee six classes of certificates from the underlying Series 2024-K757 securitization and will place these guaranteed certificates into a separate trust that will issue the SPCs.
The transaction is backed by 27 fixed-rate multifamily mortgage loans, with principal balances ranging from $4.7 million to $88.4 million. The largest loan, Haven 124 At Eastlake Station, accounts for 10.5% of the pool, with an in-trust balance of $88.4 million. It is secured by a garden-style multifamily complex in Northglenn, Colorado. Together, the five largest loans make up 45.4% of the cut-off date balance, which also includes Coastline Apartments, The View At Montgomery, Anson At The Lakes, and Preserve At Perdido Apartments. The loans are geographically diversified across 18 states, with the largest concentrations in North Carolina (13.3%), Florida (13.1%), and Colorado (12.0%).
KBRA’s analysis involved evaluating the financial and operating performance of the underlying collateral properties to estimate sustainable net cash flow (KNCF) and determine property values. The portfolio’s weighted average KNCF is 4.5% lower than the issuer’s NCF, and the KBRA capitalization rates indicate values that are, on average, 40.6% less than third-party appraisals. The overall weighted average KBRA capitalization rate for the transaction is 8.56%. The KBRA credit model incorporates rent and occupancy stresses, default probabilities, and loss calculations to assign credit ratings.
For more details on the rating and related documents, you can access the report through the provided links.
Methodologies Used:
- North American CMBS Property Evaluation Methodology
- North American CMBS Multi-Borrower Rating Methodology
- North American CMBS Single Borrower & Large Loan Rating Methodology
- Methodology for Rating Interest-Only Certificates in CMBS Transactions
- Global Structured Finance Counterparty Methodology
- ESG Global Rating Methodology
Disclosures: Additional information regarding credit considerations, sensitivity analyses, and ESG factors can be found in the full rating report. Key sources and methodologies used in preparing the credit rating are detailed in the Information Disclosure Form(s) available online.
About KBRA: Kroll Bond Rating Agency, LLC (KBRA) is a registered credit rating agency with the U.S. Securities and Exchange Commission and is recognized in various international markets. KBRA provides comprehensive credit ratings and insights to support market participants. For more information, visit www.kbra.com.
